Both Frank Bifulco Jr., VP-marketing for Coca-Cola USA, and Brian Swette, exec VP-chief marketing officer for Pepsi-Cola Co., are fighting the cola wars with new tactics aimed at forging long-term relationships between consumers and their products.
Coca-Cola this year started shooting fireworks from a 42-foot-tall Coke bottle at Turner Field for Atlanta Braves home games, built a museum to itself in Las Vegas, and literally gave money away through ATM machines.
"Before, if it didn't move, we painted it red and we were satisfied with that," says Mr. Bifulco, 47, in charge of marketing 19 brands including flagship Coca-Cola Classic.
"It is not only the incremental volume and profit growth that we need in order to create value for the system," he says. "It is also doing that which more strongly bonds our product with consumers."
Mr. Bifulco, in his position since 1994, says consumers have gotten savvier.
"Just seeing our trademark isn't enough [for them] any longer. It has to be more relevant to them, whether at the moment of purchase or the moment of consumption."
Mr. Swette, 43, is stepping up consumer involvement with Pepsi-Cola to make it "an active part of people's lives." Last year he launched Pepsi Stuff, the hugely successful catalogue promotion featuring brand-labeled merchandise consumers can buy with proof-of-purchase redemptions.
"We broadened it this year to go beyond apparel to larger-than-life experiences," he says. Those include sports fantasies like throwing out the first pitch at the World Series or meeting Jeff Gordon at the 1998 Daytona 500, becoming part of his pit crew and getting a special-edition sports car.
PART OF PROGRAM
"Part of the Pepsi brand experience is always about what's new and what's hot and what's to come," says Mr. Swette, which is leading the soft-drink marketer to link with Sony Playstation and Final Fantasy this holiday season.
"We're building kiosks around our displays so consumers can interact with the games in the play stations. We are bringing theater in-store to make the shopping experience more interesting and to signal to the consumer that that's what the brand's about."
In a more targeted project, the company and Channel One, K-III Communications' national in-school TV project, linked up in a program where school children designed new fronts for vending machines that were later rolled into schools.
Such tactics appear to be working. The U.S. soft drink category is growing, although Coke and Pepsi are pulling share from smaller players. For the first nine months of this year, Coke will be up about 6% in unit volume and Pepsi about 4.5%, according to estimates from PaineWebber.
When it comes to marketing a brand experience, Starbucks is in an enviable position because its most significant distribution channel is its approximately 1,300 cafes.
"We spent less than $15 million last year, disproportionately less than other companies our size," says Scott Bedbury, senior VP-marketing. "When we think about advertising, we think of it as consumer communication. We are communicating a great deal at the store level. It's a very different process than depending on others to retail the products," adds Mr. Bedbury, who moved to Starbucks from Nike in 1995.
"What they have done is a great job with the Starbucks name," says Emanuel Goldman, beverage analyst with PaineWebber. "They took a commodity, coffee, and from nowhere came up with this brand image."
EXPECTED TO GET MORE PLAY
That name stands to get even more play as Starbucks continues its march into supermarkets with its bean coffee, ice cream, and bottled version of its popular Frappuccino drink, bottled through a joint venture with Pepsi-Cola.
"Starbucks' business was built largely without advertising," Mr. Bedbury says. "There is no text book as to what we're doing as a company. We're a little bit of everything. It really creates an interesting challenge and an opportunity