COKE INTENSIFIES OCCASION-BASED MARKETING

Carol Angrisani

ATLANTA -- The Coca-Cola Co. has introduced a new retail marketing strategy aimed at converting more shoppers into buyers.

Coke describes OBM/XT (occasion-based marketing/extra) -- a reinvention of its five-year-old OBM initiative -- as a consistent communication system inside the retail environment that's themed around occasions. The goal is to get consumers to consider and convert to Coke -- and other brands -- more frequently inside the store.

OBM/XT recommends cross merchandising products that can drive incident and margin rates for its retail customers; point-of-sale materials that not only communicate the product proposition, but also "bring occasions to life"; and equipment that leverages the iconography of the occasion.

"We believe the battlefield in front of us is in the retail environment," Sean Seitzinger, director of strategic innovation, Coca-Cola, told Brand Marketing. He stressed that consumers are increasingly making decisions inside the store. As a result, manufacturers need to partner with retailers to provide consumers with a more compelling store experience.

OBM/XT was created based on data the company received from a variety of sources, including a "Supermarket Shopper" study conducted last year. Coke observed the way consumers shop in several supermarkets across the country. Along with these observations, it also conducted more than 700 consumer interviews.

One of the key findings was that Coke's conversion rates, while higher than its competitors', provided room for improvement. For stand-alone displays away from the beverage aisle, Coke had a conversion rate of over 33% and a consideration rate of 20%. Of the 20% who stopped at the displays, one-third actually made a purchase.

At the same time, the study found that consumers are a lot less prepared for the shopping experience than in the past, and consequently are using the store as their shopping list. Although two-thirds of shoppers reported planning their trip, only one-third reported bringing a list, coupon or other shopping aid.

"The call-out to us was that we needed to do a better job of converting shoppers to buyers," said Bob Platt, Coca-Cola's senior channel business development manager, supermarkets.

Another Coke study showed that 67% of consumers are buying for reasons beyond price. Coke believes convenience and branded premiums from a retail perspective are strong emerging components, said Seitzinger. So, while OBM/XT focuses on the right price and package, it emphasizes a more powerful consumer proposition.

"The goal here isn't quantity; it's quality," said Seitzinger. "It's not to have 50 points of interruption in the store. Instead, it's having the right number in regard to making sense from an operational and marketing perspective."

Occasions are customizable, although Coke is recommending the "Great American Barbecue" for the summer, along with fall football and fourth-quarter holidays, among others. Retailers can incorporate their own private-label product into the mix. For instance, for a fall football occasion, one of its recommended displays features signage of fans at a tailgate party. The display is filled with Coke, Diet Coke and Sprite, along with private-label hamburger buns, ketchup and potato chips.

"It's not just reminding; it's marketing, and stopping and converting the consumer around the occasion," Seitzinger said. "The occasion comes to life -- and the beverage and food just happen to be pieces of it."