Coca-Cola: Building a Better Design Machine?
Its Web-based design tool lets the beverage giant customize marketing for hundreds of brands globally while slashing the time it takes to reach consumers
Walk into any grocery or convenience store and you're likely to see big sales signs tied to events—say, an Olympic-themed sign promoting a series of limited edition Coca-Cola (KO) cans that were available during the Beijing Summer Games. In the past 12 months, Coca-Cola Enterprises, the biggest bottler and distributor of Coke products in the U.S., has created 700,000 of these customized point-of-sale materials alone and expects to pump out 50% more in the next year.
Just five years ago a team of people might have spent weeks or months producing each in-store display. Today, all it takes is Steve Vande Loo and his office computer. Sitting at his desk, the vice-president of commercialization strategy for Atlanta-based Coca-Cola Enterprises (CCE) logs into the Design Machine, a Web site launched by Coca-Cola last year. Vande Loo searches online for the right layout template, customizes the images and the copy, choosing from the seven language options currently available, and forwards the digital file to a Coca-Cola printing facility which will get it into stores within days. He can knock off a new sign in less than 10 minutes.
A huge time-saver for Vande Loo, the Design Machine solves the mega-challenge faced by all global companies: How do you retain control of the brand—or, in Coke's case, 450 brands—and ensure that its image in markets around the world reflects the core strategy? And how do you do that while making the brand management system flexible enough to adapt to local market needs?
Big Web Trend
As a bonus, the Design Machine solves the challenge for a relatively small price: Coca-Cola won't give the actual cost, but says it spent less to put the system up worldwide than it pays in agency fees for a single Coca-Cola ad campaign. "We recovered our investment well within the first year we went live," says David Butler, Coca-Cola's vice-president of design, who conceived the system.
It's hard to know if the flood of new point-of-sale pieces is raising sales. "We typically measure the effectiveness of our marketing activities in broad strokes, so it's difficult to zero in on one execution and connect the dots back to the Design Machine," says Butler. But he adds that major customers such as McDonald's (MCD) are as excited about the tool as Coca-Cola, and "that ultimately drives sales."
The Design Machine reflects a broader trend towards so-called digital asset management systems, which are often Web-based repositories of brand materials (logos, text, images, video clips, etc.) that can be accessed by marketers around the world. Advertising giant Ogilvy & Mather built the first such system in 2001 for client IBM (IBM). At the time, Ogilvy saw it as a more efficient means of distribution and rights management, but the agency has since expanded its offerings and in July formally established a subsidiary, RedWorks, to handle language translation and production services.
Adgistics, a London-based software firm that's partially owned by Ogilvy's parent, WPP, introduced a similar service in 2001. Adgistics 2.0, as the newest version of the product is called, is behind Ford Motor's (F) Dealer Xpress in Britain, a Web-based system that allows dealers to easily customize advertising templates created by Ford's British marketing department. Dealers can change the language, the cars featured, and the specs and pricing, along with adding their own logo and address. Then they select a publication size, and the file is automatically sent to a newspaper for publication or to a digital printer.
The Design Machine is similar to these forerunners: part digital library of brand assets, part design and production tool. Some 3,000 people across the Coca-Cola universe—many are Coke employees while others, like Vande Loo, work for one of the beverage giant's partners—use the site to create hundreds of millions of pieces of customized retail marketing, ranging from grocery aisle signs to packaging to bottle labels.
Once at the site, a marketer can search by brand, event (the Olympics, say, or the Fourth of July), or content (a label or an in-store sign, for example) to find the most appropriate layout template. Then he or she can start customizing the display, adding the logo of a grocery store where a sign will appear, for instance, or selecting copy appropriate for a movie theater. Users don't need to get their designs approved by anyone at Coca-Cola, because the machine's built-in design parameters ensure that the final materials will conform to global standards already set by the corporate design team in Coke's Atlanta headquarters.
Design VP Butler won't give specifics, but says that thanks to the Design Machine, the company has reduced fees to agencies for localizing point-of-sale pieces by 30%. In addition, Coke no longer has to hire outside printing shops and pay rush fees. "It's made our retail marketing process more efficient and more effective," says Katie Bayne, Coca-Cola's chief marketing officer.
Leveraging Savvy Design
The new online tool has also solved a design conundrum at Coca-Cola. Butler had been looking for ways to produce higher quality materials, but had just 60 designers on staff with no prospect of adding more. "The idea [behind the Design Machine] was how can we make it easy for nondesigners to leverage the power of good design," he says.
For Butler, who previously had been brand-strategy director at marketing and consulting firm Sapient, a Web-based device was the obvious answer, and Coca-Cola hired Sapient to build it. The Design Machine now holds more than 4,000 "templates," and Coke designers are adding material almost daily. "It's helping to educate everyone who uses it about what good design is and how it can be a competitive advantage," says Moira Cullen, Coca-Cola's North America design director.
The tool also suggests that, at least in the realm of marketing, the company is finally finding the right balance between the globalization strategy pushed by former Chief Executive Roberto Goizueta a decade ago—a strategy that Harvard Business School Professor Pankaj Ghemawat termed "globaloney"—and the intensely local strategy implemented by Goizueta's successor, Douglas Daft. It's likely that Coca-Cola's new CEO, Muhtar Kent, who took the reins last July, will see the wisdom of the Design Machine's localization capability. After all, he rose through the ranks of Coca-Cola's international division.
"The fundamental challenge for any brand is to make sure that everybody understands the principles about how your brand can be used, to make the assets accessible, and to adapt what you're doing to blend into the local culture," says Nigel Holmes, chief global analyst at Millward Brown, a market research and brand consultancy. A system like the Design Machine that gives Coca-Cola control over its global brands but allows for efficient customization, says Holmes, "just makes sense."
Jessie Scanlon is the senior writer for Innovation & Design on BusinessWeek.com.