What makes a company successful?...

... delivering products and services that are relevant and create impact among consumers.

I combine my expertise as a Marketing executive in a Fortune 500 company and my passion as an investor to find the Companies that I think have "cracked the code" with consumers. Advertising does work. When I see a new product that fits relevant consumer trends, and that is supported with a campaign that I find particularly shrewd and innovative, I know that Company is potentially a great investment.

One of the great investors of all times, Peter Lynch, recommends to "buy what you know". You watch TV, go to the supermarket and walk around everyday. Observe... look around: what you see can make you money in the stock market. Now, let's be clear: a Company is not good just because it advertises. What we have to look for is great products supported with -and enhanced by- great advertising. The principle is simple: if something is good enough to draw your interest, it will be of interest to millions of persons just like you.

It is my goal to share with the reader my findings in the world of marketing which I think will turn into great returns for investors. Profit from it!

Saturday, September 1, 2007

Coke is it!

I used to be an avid Pepsi drinker. For me, Coke was a fairly standard, no-frills kind of drink. However, during the last couple of years I've seen with growing admiration the dramatic push The Coca-Cola Company (KO) is making in terms of innovation and outstanding product quality. First it was Coke Zero. Although skeptical at the beginning, it took me a couple of months to try this product; I mean, what could be so different from Pepsi One, anyway? Boy, was it different!! The first taste made me a convert. What a product!! Refreshing, flavorful and yet quite light. This successful introduction was followed by Coke's latest brilliant moves: the launch of Diet Coke Plus -Diet Coke with added vitamins and minerals-, and the acquisition of Glaceau, the manufacturer of the wildly successful VitaminWater line. Both initiatives strongly position the company to fully leverage the already robust -and still growing- consumers demand for healthier, balanced products that support their quest for overall well-being. In the best tradition of a consumer goods leader, Coca-Cola is strongly supporting both products with integrated marketing campaigns across several mediums. Perhaps the best example of advertising at work is VitaminWater. After just a few weeks of closing the Glaceau deal, Coca-Cola launched a vibrant, massive multi-media campaign to support VitaminWater, reinforcing its positioning as a hip, alternative brand for the in-crowd.
All this activity has not gone unnoticed in Wall Street. Coca-Cola share price has increased from around $44 in October 2006 to $54 in late August. While at 24 times trailing earnings the stock is not exactly cheap by historical standards at this point, I think Coke's portfolio strategy is definitely working. The Company is asserting its leadership position in the beverage market through a demonstrated understanding of what the consumers want and, most importanttly, where they are going in terms of priorities and needs. Growth at Coke can only bubble up.

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