(Conclusion)

JESUS CELDRAN (aka King King or King2), Tony Eames, then region manager, and I traveled almost every weekend, hopping from one island to the next. King King had great credibility in Mindanao as a hero of World War II—he had served with the guerrilla forces as an intelligence officer behind Japanese lines—and he had a facility for languages. On Mindanao, two insurgencies were under way, one led by the communist New People’s Army and the second by the Moro National Liberation Front. And yet, this was Coca-Cola’s strongest market.

Pepsi made a major mistake in failing to attack our customer base there. Since we had a strong lead, we could charge higher prices and use these profits to combat “the Imitator” in Manila. If Pepsi had used that strategy against us in Mindanao, it would have strangled our top profit center.

Wherever we traveled, we would hold sales rallies with music, good food, San Miguel beer and theatrics. I would sometimes smash a Pepsi bottle against the wall of a bottling plant to rev up the troops. In one town, the local bottling manager arranged for us to ride to one of the rallies on a tank. Appealing to the country’s militaristic fascination, we created a sales team called “Tiger Force,” and played the song “Eye of the Tiger” from the film Rocky III.

To this day, when I hear it, I am energized. I feel all over again the thrill of the fight. This was business war. When we launched Mello Yello, billed as “the World’s Fastest Soft Drink,” I led the salesmen in calisthenics—doing push-ups on the stage. Then we’d run around the plant.

I find it useful to look at our business through the lens of our competitor. To that end, I took the team to the InterContinental Hotel in Manila, where they entered a room decorated with Pepsi posters. There were Pepsi T-shirts and ice-cold Pepsi. Then, I conducted an all-day session designed to detect the weaknesses in the Pepsi system. Workers got honest assessments of their flaws and strengths.

Roberto Goizueta, the Coca-Cola CEO, helped our cause, flying in for a visit to Manila. It was interesting to see Roberto, who is Cuban, in his Latin mode. The Sorianos were Spanish-Filipinos, and they bonded with Goizueta completely. At an evening party, we all did the “tinikling,” a Filipino dance. Never underestimate the power of social interactions, team sports or cocktails.

Bottle sizes

AT the end of my first 12 months, Coca-Cola was increasing its market share, led by the energized sales force and Mello Yello. New packaging also helped. Pepsi had been selling a 12-ounce bottle for the same price as an 8-ounce one. San Miguel had lacked the capital to convert to 12-ounce bottles, but Coca- Cola’s investment made it possible, and so a plan was hatched to convert to the larger size.

I said no to a complete conversion, partly because I knew Pepsi couldn’t continue to sell the 12-ounce drink at its current price; inflation would deflate their profits. Plus, keeping the 8-ounce bottle reduced the number of new 12-ounce bottles we had to produce, saving us money. And, because manufacturing capacity for the new bottles was limited, keeping the 8-ouncers meant that we could accelerate, by at least a year, the debut of the 12-ouncers.

The strategy paid off. Our profits increased along with our share of the market. In response, Pepsi brought in a new team of expats. They committed the sin that I had tried to avoid: sitting around at the Manila Polo Club, drinking beer and complaining about the Filipinos. This is what happens when management is disconnected; you get alienation all around and little understanding of the market or the customers.

In 1983 Coca-Cola took the lead in the Philippines. We built a new bottling plant in Manila and significantly upgraded four other facilities. By 1984, Coke sales had increased 11 percent, despite a 5-percent drop in soft-drink sales across the country. What’s more, I had gotten used to the humidity.

But then Coke sent me to colder climes. I was off to West Germany to head the company in Central Europe.

(Neville Isdell was a force at Coca-Cola for more than 30 years, assuming the role of chairman and CEO in 2004, after working for the company in Zambia, South Africa, Australia, the Philippines, Russia, Germany, India and Turkey. This excerpt, the last of two parts, is from his memoir,  Inside Coca-Cola: A CEO’s Life Story of Building the World’s Most Popular Brand, written with David Beasley, to be published on October 25 by St. Martin’s Press.)