The end of the Chief Marketing Officer

It’s the end of an era at The Coca-Cola Company with the retirement of its Chief Marketing Officer, Marcos De Quinto a former colleague with whom I used to work, whilst he headed marketing for the South East and West Asia Division.

The Chief Marketing Officer’s position has now been replaced by a Chief Growth Officer who will report to the new CEO of Coca-Cola who is bringing about radical changes within the company.

The Chief Growth Officer’s role is being created by merging marketing, customer engagement (or sales), product development (or commercialisation) along with strategy and resource allocation. The mandate is to accelerate financial performance by building growth platforms around their portfolio of branded businesses. This is expected to bring a more focused responsibility for growth, by compelling the company to think ahead and taking the risks required to meet the emerging trends and not merely fighting for today’s sales and advertising budgets. This function is expected to lead to a stronger business by squarely providing the primary commercial responsibility onto the broad shoulders of the CGO.

This move by The Coca-Cola Company is not the first. The trend has been in the works for the last five years with companies such as Colgate-Palmolive, Modelez (with brands such as Oreo, Cadbury, Nabisco,) and personal care company Coty having already created this position.

The reason for this change would seem to be driven by the increasing difficulties in achieving growth for these very large and complex multinational companies. With consumer’s growing empathy for local brands which often source their raw materials from local farms and regions which are close to them. In addition to being natural and fresher it could have the flexibility of indigenous ingredients, thereby creating much greater appeal than mass produced global brands. 

The challenge for multinationals is straddling this paradox of being global but being locally a tuned and adaptive to individual but very different local tastes and cultures.

With easy growth at global FMCG companies being a thing of the past, companies can no longer rely on traditional methods of incremental expansion and innovation. It’s no longer about getting into new categories, acquisitions or distribution channels but about a longer term vision by altering corporate culture to be in synch with local consumers. It’s the only way these large conglomerates can find new opportunities for growth by being grounded on the local consumer needs and business realities.

It has taken the Coca-Cola Company many years to realise this and they are now trying hard to catch up on lost ground. In the late 1990s whilst I was heading the Sri Lanka Coca-Cola business, my recommendations to shift the marketing focus away from the Coca-Cola brand to fruit flavours, in tune with local taste preferences to accelerate growth, was met with much resistance. It was too much to expect a change in strategy to be made in Sri Lanka, to that which seemed to have worked across the world - where soft drink consumption was built through singular focus behind the flagship Coca-Cola brand. 

The situation today at Coca-Cola is dramatically different with much more flexibility on understanding and adapting to meet the tastes and preferences of local consumers.

Whilst brand Coca-Cola will always be the heart and soul of the company, it now seeks growth through pivoting away from declining carbonated beverage segments to juices, energy drinks, new flavours and will concentrate more on brands liked bottled water Smartwater, flavoured water Vitamin water, and dairy brand Fairlife in the USA. Coca-Cola already has acquired such brands as Innocent smoothies in UK and is test marketing Zico coconut water in India as a means of quickly adapting to rapidly changing local tastes.

The implications of this change is greater accountability, which means the person heading up the CGO position is expected to transform the role of marketing into the only language that truly matters to business, which is money and growth.

Traditional marketing still has a role to play but within a broader framework, which is all around branding and generating demand by loading the sales funnel with prospective consumers. Whilst implementing this function of engaging consumers with the brand value proposition, the sales and customer teams are expected to nurture the leads and engagements that have been generated and convert them into a sales transaction. In addition, product teams are expected to work to deliver the value marketing and sales promise to customers through features, flavours, styles, packaging and price points where customers are either delighted or disappointed.

This approach naturally leads to putting the consumer at the very centre of the entire business, whilst making the holistic marketing function more accountable. It also moves the needle to be more data driven and strategic as it requires decisions to be made on where short term and long term resources need to be allocated to deliver better returns. 

The lesson for conventional marketing departments is the shift that has happened from being one that is responsible only for demand creation to one where there is greater accountability for the business as a whole. This would call for marketing to be more analytical and comfortable with data and financial implications in the decision making process. 

There has always been a gap in business between marketing, which is seen as an expense and finance, which is seen as being responsible for long term strategy and profitability. With the birth of the Chief Growth Officer, he or she will be responsible for driving revenue and growth, thereby bridging the gap between marketing and finance.

(Established in 1996 in UK, Brand Finance is an independent consultancy focused on strategy, management and valuation of brands and branded businesses. Brand Finance Lanka commenced operations in 2005 and is one amongst a global network across 17 countries, including USA, India, Canada, Spain, Brazil, Australia, Netherlands and Singapore. Ruchi can be contacted on [email protected].)