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Coca-Cola Co.'s appointment of insider Charles Frenette as chief marketing officer will likely spark a change in the beverage giant's strategy of spreading its $1.6 billion ad budget among some two dozen agencies.

The unusual strategy is one of the key legacies of the departing Sergio Zyman, 52, who resigned effective May 1. Mr. Zyman will work as a consultant to Coca-Cola and plans to write a book on marketing.

Mr. Frenette is "not a pure marketing guy like Sergio, who is kind of a marketing maverick and a pure marketing person. I think he will bring a different style and approach to the job," said Gary Hemphill, VP-information services at consultancy Beverage Marketing Corp.

Word that Mr. Zyman was preparing to step down surfaced earlier this month, but had been dubbed speculation by Coca-Cola before last week's announcement (AA, March 16).


Mr. Frenette, 45, takes his new post -- one of the most visible and important jobs in global marketing -- following a two-year stint as president of the company's Southern Africa Division. From 1986 to '92, he led Coca-Cola's fountain business and, from '92 to '96, oversaw Coca-Cola operations in the U.S.

Mr. Frenette's management style is said to be markedly different from the colorful, charismatic and strong-willed Mr. Zyman.

"He is a very smart man; a real outgoing, friendly, customer-oriented guy," said Sid Feltenstein, chairman, president and CEO of A&W Restaurants, who was exec VP-worldwide marketing for Burger King Corp. when Mr. Frenette worked with the burger chain to refine its fountain relationship with Coca-Cola.


Mr. Zyman's departure could return creative responsibilities for Coca-Cola's flagship brand to a single agency, industry observers said.

McCann-Erickson Worldwide, New York, handled the global account for brand Coke for many years, but lost creative work when a previous Coca-Cola marketing chief, Peter Sealey, moved the business to Creative Artists Agency, the Hollywood talent agency. CAA eventually removed itself from that venture, but executives working on the account set up Edge Creative, Los Angeles, which continues to handle a significant portion of global creative for Coca-Cola Classic.

Other shops that handle Classic creative include Wieden & Kennedy, Portland, Ore.; D'Arcy Masius Benton & Bowles, St. Louis; and W.B. Doner & Co., Southfield, Mich. McCann continues to handle media.

Lowe & Partners/SMS, New York, is the agency of record for Diet Coke.

One executive close to the company said it is doing a good job managing the numerous agencies handling the flagship brand around the world, and that they yield strong creative executions.

In South Africa, Coca-Cola brands are handled by Sonnenberg Murphy Leo Burnett.

Last week, following the announcement of the change, Coca-Cola VP-Director of Advertising Ian Rowden called at least some of the agencies to tell them they were safe on the business.

One Coca-Cola agency executive, however, said Mr. Frenette is "going to have his own look and core group of people that share his and Doug's agenda [referring to Coca-Cola Chairman-CEO M. Douglas Ivester]."


Mr. Ivester said Mr. Frenette is charged with leading the company into more local-marketing initiatives. He also credited Mr. Zyman, with whom he worked closely in his former role as president, for doing an "outstanding job over the last five years in building a truly world-class marketing organization and preparing it for this new phase."

Company observers said Mr. Zyman's exit was sparked in part by the likelihood he had little chance of being named president of Coca-Cola, a vacant post since Mr. Ivester succeeded Roberto Goizueta last fall following Mr. Goizueta's death. A spokesman said Mr. Ivester has no timetable for filling that slot.

In addition to Mr. Rowden, Chuck Fruit, VP-director of media and presence marketing, and Chris Lowe, VP-director of strategic marketing, will report to Mr. Frenette.

Bill Katz, president of the New York office of BBDO Worldwide, which has had the account of archrival Pepsi-Cola Co. for years, said: "I personally think Coke and Pepsi thrive when there is tension in the cola category; you almost hope for the success of both. Will this guy change Pepsi's life? No. And I don't think Sergio changed Pepsi's life."

Last year, Coca-Cola's growth in the U.S. outpaced Pepsi. According to Beverage Marketing Corp., Coca-Cola's U.S. volume was up 5.1%, while Pepsi's volume was up 3%, compared with the year earlier.

Contributing: Mercedes M. Cardona, Laura Petrecca

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