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SBJ/Sept. 2-8, 2013/Global Special Issue
Coke sets sights on Russia
Published September 2, 2013, Page 10
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The beverage giant’s urgency was justified. The Sochi Games offer Coke its first opportunity in five years to use its Olympic sponsorship to gain market share in an emerging market, and the opportunity arrives at a time when Russia is becoming increasingly important to Coke’s business.
|NHL star Alexander Ovechkin is used in a campaign to identify Olympic torch bearers.
“It’s a growing market,” said Thierry Borra, Coca-Cola’s director of Olympic Games management. “Buying power is increasing. We have a good marketing campaign that can help us.”
Coke’s stature in Russia has improved in recent years, but it has taken time. Pepsi actually entered the Russian market first, opening its first plant there in 1974. It was two decades before Coca-Cola followed suit and opened its first factory in Moscow.
Today, Coke leads Russia’s $14.5 billion carbonated soft drink market with a 36.7 percent share, according to Beverage Digest. Pepsi has an 18.3 percent share, but its total business, which includes Frito Lay and several juice brands, make it the top food and beverage company in Russia with sales there of more than $5 billion. It remains a strong brand in the Krasnodar region of Southern Russia, which is where Sochi is located, and that’s one reason Coca-Cola executives are excited about the Olympics.
“For us, it’s a great opportunity to develop and potentially take over a bit of our competitor’s (market share there),” Borra said.
Borra, a Frenchman who joined Coke in 1995 and has worked on every Olympics since the 2004 Athens Games, is one of the marketers spearheading Coke’s efforts in Russia. The company’s approach to Russia mirrors the marketing tactics it employed ahead of the London Games.
Last January, Coke released a commercial featuring NHL star Alexander Ovechkin promoting a campaign to identify Olympic torch bearers. The commercial closed with Coke’s 2014 Olympic slogan “Vlivaisya!,” which means “joining.” The company also developed a mobile marketing tour that went to 15 cities, promoting past Olympic torch relays and raising awareness of Russia’s 40,000-mile plus relay.
“We (are inviting) people to join the party that Russia is trying to start,” Borra said. “It’s a way for us to bring happiness across the country.”
More than 65,000 people submitted essays and applications to carry the torch, and more than 14 million people
Coke has complemented its digital, torch-relay campaign with billboards in Moscow, St. Petersburg and Sochi. It also ran a national promotion offering a commemorative Olympic glass for purchases of Coca-Cola at retail stores.
The company has 20 brands in Russia, but it is concentrating its Olympic marketing on Coca-Cola, Powerade and a local juice drink called Dobry. The goal is to improve brand awareness and grow volume, Borra said.
“The growth is there,” Borra said. “You just need to balance what you’re doing all around the country.”
Beverage Digest Editor John Sicher said Coke may not see immediate increases in market share because of its Olympic efforts, but that doesn’t negate the value of the marketing initiative.
“The Olympics are certainly a very large promotional opportunity for Coke, but it doesn’t necessarily translate into immediate market share gains,” Sicher said. “It’s more likely to translate into reinforcement of brand strength.”
But it’s about more than just volume for Coke. Borra said that because Coke’s business in Russia is still so new the company also is using the Olympics to boost morale among its 15,000-plus employees. The company offered staff the chance to work the Games, and more than 1,000 employees applied. Select employees also will get a chance to run in the torch relay.
Borra is confident the sales will follow.
“The Olympics bring a unique opportunity to accelerate the business.”