Thursday, October 16, 2008

Coca-Cola: Building a Better Design Machine?

Coca-Cola: Building a Better Design Machine?

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.

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