Melinda Gates, through her travels for the Gates Foundation in the developing world, sees that poverty-stricken areas do not have a lot of things we take for granted- clean surroundings, clean water, sanitation or electricity. But she is astounded by what they do have- Coke.
At a TedTalk, she reveals this astounding statistic-
“It’s staggering, if you think about Coca-Cola. They sell 1.5 billion servings every single day.That’s like every man, woman and child on the planet having a serving of Coke every week. So why does this matter?”
How is Coke able to do what governments and non-profits have not come close to achieving? Melinda thinks, to solve the most complex and hardest problems, we need to look at the leaders in innovation across all sectors.
“I feel that, if we can understand what makes something like Coca-Cola ubiquitous, we can apply those lessons then for the public good.”
So what are the takeaway lessons from Coke, according to Melinda Gates-
Work with Real-time data AND react to it immediately
This means they know their market and they know it well. Anytime they have sales drop, they can identify the problem and fix it. With most small businesses and non-profits, alike this critical evaluation comes late. By this time the money has been spent with less than desirable results. Strike one.
Tap into Local Entrepreneurial Talent
Coke discovered that to reach rural markets they cannot use western methods-i.e. a 60 footer rolling into smaller towns - because there aren’t good roads everywhere. But what is abundant are keen locals trying to set up businesses and shops. So Coke setup micro distribution centers that trained local entrepreneurs by giving them small loans. These folks in turn hired salesmen who transported Coke into interior town and villages via hand carts and bicycles. Coke had arrived.
This is a crucial aspect that social enterprises and NGO must learn – tap local talent and knowledge. We are seeing more and more that the reason why projects like Nuru Lights and Charity: Water are successful is because they use local support. This approach has multiple benefits because when you make the “cause” the business of the community, there is very little chance of failure. It helps unlock the potential of the community to solve their own problems.
Butt-Kicking Marketing
Obviously, one of the biggest reasons Coke is successful is because people want one! How can NGOs and social enterprises make communities also want clean drinking water or better sanitation? Coke uses its “open happiness” slogan and other marketing ways that makes people feel happy about drinking a Coke. Melinda says social good isn’t marketed the same way because NGO’s believe that- people should want better living conditions because they need them.
This obviously does not happen because Coke has reached places that clean water hasn’t. So what is the issue? NGOs forever have been using slogans that only sound good when what they need to do is use marketing techniques that portrays the solutions on hand as desirable, trendy and must-haves. Use behavioral science, use innovation.
The biggest takeaway for NGOs is to look at big corporations and different sectors and learn from innovators. These players have poured hundreds of millions of dollars in research and analysis. Due to the power of the information age, a lot of these management practices can become common knowledge. Listen. Learn. Adapt.
About Priti Ambani
Hi Priti,
I definitely agree that there are a few lessons from the corporate world which could be incorporated into not for profits strategic thinking. However, not to be Debbie Downer, but the multi-billion dollar resources of Coca-Cola is not a fair comparison to the (often tiny) marketing budgets of non-profits. Even with that, the recent debacle over the polar bear soda can campaign showed very clearly that even a big company as Coke could make mistakes in interpreting market data.
Separately, I am concerned why a company like Coca-Cola does not use it’s admirable sales network reaching rural or under-served areas to bring healthier products, like clean water, and actually spread “open happiness” to more people. If Coca-Cola could use a % of the millions of dollars invested in its marketing, advertising & research budgets, into developing ‘better for you’ products than CSDs, wouldn’t that be great? This comes down to ongoing discussions on connecting the dots between social responsibility and corporate mission.
I do believe that many NGOs are very innovative and extremely entrepreneurial. It is amazing to see some of them stretch a dollar to achieve a lot. That said, several NGOs are often terrible at talking about their or scaling it to a larger audience. And I have come across many that need good training in measurement & evaluation. Would it not be great if giants like Coca-Cola could help in sponsoring some of the NGO leaders to get trained in these areas?
Hi Remya,
Thanks for reading EP and your thoughtful comments!
I don’t necessarily agree that you need big marketing budgets to be innovative. Coca-Cola’s marketing campaigns are not a go-by for anybody. The idea Melinda Gates (and I agree) was trying to put forward is that the NGOs need to strike a cord with communities. Sometimes a fresh perspective, thinking outside the box helps, like tying the need for toilets with courtship as Melinda explained in the video.
This article is not about what Coca-Cola is doing or not doing about CSR (though that itself merits another post, like you correctly point out), but about how NGOs can learn from some successful for-profit business models. There is no denying the fact that Coca-Cola can do much more that helps their corporate sustainability mission, but this post is not about that.
I completely agree with you on the new wave of smart NGOs like Charity: Water and Nuru Lights who are very innovative and are spearheading successful projects. Surely, it will be wonderful to see powerful companies like Coca-Cola sponsoring social enterprise leaders. Now that can be called a great CSR program!
Thanks again for writing in.
Priti
You are most welcome! As we both agree these topics need more exploration…Look forward to reading more from you.
Unfortunately, Coke IS everywhere and it’s helping to fuel the obesity and diabetes epidemics we see in so many places — Mexico and the U.S., for example. And Coke’s involvement in labor, human rights and environmental abuses worldwide as well as tax evasion and avoidance has been a disaster for many parts of the world. Take a look at http://www.KillerCoke.org. Here’s an example:
“Dr. Ann Lopez, author and environmental science professor, Ph.D., at San Jose City College in California and Director of the Center for Farmworker Families, states:
” ‘The people of west central Mexico are easy corporate prey for predator Coke. You can’t stand anywhere in some of the rural towns and not see a Coke ad. I’ve seen what Coke is doing in the west central Mexico countryside where I do research: pushing their addictive products on peasant populations who can ill afford them and in which one in 10 may have undiagnosed diabetes.’
“She points out that struggling people, unaware of the ill effects of the soft drinks, will ‘sell the healthy things that they grow on the land, like corn, beans and eggs from chickens to buy cola which they eventually become addicted to.’ She quotes Vicente Silva, a former municipal president of Chilchota saying that ‘Coke and beer arrive at the Purepecha indigenous towns and villages, in the morning, before the arrival of milk!’ “
Most of my experience in the for-profit sector and I think the main challenge is how to transfer the expertise from people doing business into people doing good, or how to make both simultaneously. I saw Melinda talk about this in TEDxChange and wrote about it here: http://tonidelrio.com/2010/09/21/tedxchange-the-future-we-make/
Would love to hear your thoughts.
T.
Thanks Toni. I left a comment on your blog!
-Priti
I’m astounded by what seems a myopic focus on the name ‘Coke”… doesn’t anyone see the (dis)association with what the Gates Foundation is doing promoting DNA-altering vaccinations around these third-world countries? Does anyone really think there’s much difference between Coke and vaccinations? Their both foreign to the body, unnatural, and destructive.
Wake Up!