Coke Hearts Cadre: Surprise

The cadre can buy but it can't sell.


Cheering for China Before Games Even Start
By GEOFFREY A. FOWLER
April 18, 2008; Page B1
BEIJING – For multinational marketers on the Olympics' home turf, cheerleading for China is part of the Games.

In a welter of ads and promotions directed at the country's increasingly affluent consumers, companies are appealing to Chinese pride and patriotism even as the country is being pilloried overseas.

McDonald's Corp. is asking customers to chant its Olympics refrain: "I'm loving China wins!" The company has had more than 1.3 million people register to become part of the cheering team in a nationwide contest, which is using an "American Idol"-like format to select cheerleaders for China's team during the Games.

PepsiCo Inc. isn't even an official Games sponsor but has joined in on the flag-waving and sentiment anyway. Last fall, the company turned its iconic blue can into a red one in China. It also launched an ad campaign featuring people in funny situations yelling, "I love China!"

At a time when activists and some politicians in the West decidedly aren't loving China, and the global Olympic torch relay is beset by protests, sponsors have stood firmly behind the Beijing Games. At its annual shareholders meeting on Wednesday, Coke fended off criticism from Tibetan and free-speech groups who want the company to use its influence to improve China's human-rights record. The company's chief executive, E. Neville Isdell, said he didn't believe that "stopping the torch relay is in any way over the long run going to be the right thing to do."

The Chinese see these Games as a serious affair. "Chinese people have gone through a lot in the past," says Phyllis Cheung, director of marketing for McDonald's in China. "They have very, very strong patriotism. ... Everywhere, you see people are excited."

"Nationalism is not a strategy," says Michael Wood, the China CEO of Publicis Groupe's Leo Burnett ad agency, which works for both McDonald's and Coke in China. "It is a shared value, which when executed in the right way by the right brand, can create a powerful connection with people."

McDonald's says its cheer is part of a wider effort to make the brand's restaurants into places for people inside China to celebrate -- and even gather to watch -- the Games. Many of McDonald's restaurants in China have televisions.

"We are an international company, no doubt about that," says Ms. Cheung. "What we are doing is being locally relevant, rather than getting into the arena of playing up nationalism."

Coke has about 150 people working on Olympics marketing and operations in China. The word "hong" in Chinese means both red and popular, so the song could be understood as either "Red Around the World" or "Popular Around the World."

While Coke has sponsorship agreements with athletes from around the world, including NBA star LeBron James, much of its marketing inside China revolves around Chinese athletes, like hurdler Liu Xiang and diver Guo Jing Jing, who have built popular sentiment for the hope that Chinese athletes could lead the medal count this summer. A recent survey by Asian advertising consultancy R3 and CSM Media Research found that Chinese consumers recalled Coke's promotions more than the next seven sponsors combined.

Andres Kieger, Coke's director of integrated marketing in China, demurs at the idea that Coke is appealing specifically to a Chinese sense of nationalism. The red song "is about inspiring people and opening up to the world to join and celebrate," he says. "This isn't meant as a patriotic song. It is meant as an emotional song. Red is the color of a lot of good things."

Coke has made Olympics songs for previous Games, though they usually featured less market-specific themes than "Red Around the World." During the 1988 Calgary Games, it commissioned a song called "Can't You Feel It?" and assembled a "world chorus" to sing it. In 2004, it sponsored a song performed by Greece's Despina Vandi called "Come Along Now." A music video for it features no flags or Olympic rings, just plenty of scenes of the sultry Ms. Vandi dancing, sometimes in a bikini. The idea was to "spread messages of optimism, happiness and celebration," the company says.

McDonald's, too, has led a cheering campaign before. During the Atlanta Games in 1996, it ran a campaign called "U.S. wins, you win," in which customers could get free prizes if they collected game pieces that matched with medals won by American athletes.


McDonald's has had nearly 1.3 million people register to join the cheering team in a nationwide contest.
But nationalism can turn against foreign brands, too. Last week, a Chinese blogger called for a boycott of Coke after he found a photo from a Coke ad in Germany showing three Buddhist monks riding a roller coaster with the slogan "Make It Real" -- even as Tibet and Tibetan monks are at the heart of a wrenching national conflict in China. Thousands of other bloggers picked up on the issue, reposting the image all over China's Internet. Coke said the ad is five years old and apologized if use of the image "has caused any offense."

The challenge now for many multinational companies isn't figuring out how to appear patriotic in China, but what message to send in the rest of the world.

"Initially people imagined they would have one global marketing campaign for the Olympics. Now the theory is that you need a separate campaign for China versus the rest of the world," says Greg Paull, the principal of R3, which consults on Olympics advertising in China. "For the sponsors that stay the course, there is more upside in the relationship they build with their consumers in China than downside globally."

Mr. Wood, at Burnett, argues that the Chinese may not be any more patriotic than any past Games host. Rather, he says, the booming Chinese market is just getting much more attention.

"Recognizing the commercial importance of China, you are seeing messages that are skewed more specifically to Chinese people," he says.

Publicis media buying agency ZenithOptimedia estimates that advertisers will spend an extra $3 billion on the Olympics this year -- of which $900 million will be spent in China. China is already the fourth-largest market in the world for Coke, after the U.S., Mexico and Brazil, and it is in the top 10 for McDonald's.

--Juliet Ye in Hong Kong contributed to this article.