Coke to Unveil Ad Campaign for Core Brand

ATLANTA (Reuters) – Coca-Cola Co.(NYSE:KO – News) is expected on Thursday to unveil a new advertising campaign for its sluggish flagship Coke Classic brand as it battles rival PepsiCo Inc.(NYSE:PEP – News) for dominance of the slumping global soft drink market.

Beverage industry sources said on Wednesday the campaign would include television and print ads and debut in the United States, Coca-Cola’s largest and most important market.

A Coca-Cola spokesman declined to comment on what will be the first big promotional push on behalf of Coke Classic since the poorly received “Life Tastes Good” campaign two years ago. But sources familiar with the campaign said the world’s No. 1 soft drink maker plans to use the word “real” in a throwback to the 1960s slogan “It’s the real thing.”

Coke Classic remains the most popular soft drink in the key U.S. market. But its volume in supermarkets and other retail stores dropped 0.8 percent in the first 11 months of 2002, according to Beverage Digest.

Other leading soft drink brands experienced even sharper volume drops than Coke. Pepsi saw its volumes drop 1.5 percent and Coca-Cola’s Sprite brand fell 4 percent in the same period, according to Beverage Digest.

While retailers are not the only source of cola sales, analysts said it was important for Coca-Cola to mount a successful marketing platform on behalf of its best-selling and most profitable brand in the $30-billion U.S. cola market.

Purchase, New York-based PepsiCo. is expected to launch its own ad campaign for its core Pepsi-Cola brand later this year.

“Both companies this year will be intensifying their efforts behind their flagship colas,” said John Sicher, editor of Beverage Digest, a leading industry newsletter. “They are the biggest brands and stopping their volume decline can do a lot for overall growth.”

The Coke Classic campaign arrives amid a long slump in Coca-Cola shares, which fell 29 cents to close at $44.07 on Wednesday on the New York Stock Exchange, near multi-year lows.

PepsiCo. closed 52 cents higher at $42.70 on the NYSE.

Analysts said a successful marketing campaign would take some pressure off Coca-Cola Chairman and Chief Executive Douglas Daft, who pledged to improve Coke’s performance after formally taking over the company’s reins in February, 2000.

Daft and the rest of the Coca-Cola management team have grappled in the past year with the negative impact of an economic slowdown in key markets, most notably Latin America.