The company pledged to invest between $350m-$400m a year more on marketing and innovation, starting in 2005. The changes are being introduced by chief executive Neville Isdell, who took over running Coca-Cola from Doug Daft in June. He admitted that problems at the company stemmed from falling marketing spend in recent years.
Isdell said: "We're not talking about radical changes in strategy. We're talking about a dramatic change in execution."
Coca-Cola, which retains Vizeum for its UK media planning and buying, said that a major portion of the $400m would fund media behind core brands globally. Another portion would go to programmes to develop Coke's organisational capabilities, including training and development. It is expected that the majority of that extra sum would be spent promoting the main Coke brand outside of North America.
There has been difficulty at the company deciding on a firm direction for the brand's advertising. Chuck Fruit, who took up the role of chief marketing officer at Coca-Cola in June this year, admitted to investors: "Candidly, our advertising has not been as consistently effective as it needs to be."
While Pepsi has recruited a battalion of celebrities to push its main brand to the youth market, Coca-Cola appears to be unable to decide whether it wants to go with youthful, cutting-edge advertising, or stick with its warm glowing family appeal.
A case in point earlier this year was an ad showing a man cooling off by putting a can of Coke under his armpit, and then giving it to an unsuspecting friend to drink. Although the spot rated highly with young people in research, it was pulled from the air after a senior executive at the company said it did not fit in with Coke's wholesome image.
More in keeping with the image Coke wants to project is an ad originally made for the UK market by Mother, called "I wish". It shows a woman walking down the street handing out bottles of Coke. The spot was screened in the US after success in the UK.
At a meeting with investors yesterday, two new ads by McCann Erickson in the US were shown, both with a Christmas theme, but Fruit said that Berlin Cameron/Red Cell, which is also on Coke's roster, was working on new ads for the beginning of next year.
The company said that 2005 would be a transitional year and lowered volume growth targets to between 3% and 4%.
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