Coca-Cola will promote all four of its key drinks under a new "one brand strategy" from May. This is "The biggest change ever to Coke's marketing," according to Jon Woods, GM of Coca-Cola GB.
This makes a whole lot of sense to me.
1. Reducing fragmentation
For many years Coke has managed each of its drinks as separate brands, each with its own communication campaign, brand idea, slogan and tonality:
– Coke: the anchor product in the range = the embodiment of the Coke brand and its idea "Open Happiness"
– Diet Coke: targeting figure conscious women, most famously advertised with the "Diet Coke break" where a hunky guy strips to the waist for the Diet Coke girls
– Coke Zero: macho male Coke without the calories, advertised using multiple campaigns including "Making the impossible possible"
– Coke Life: lower calories with natural sweetener
This has fragmented Coke's money and talent over four different products which are at the end of the day just different types of cola. The new one brand approach will focus all efforts on one brand, with descriptive names to help you find what you want.
2. Focus on the sausage
I was never convinced of the need for multiple Coke brands. There is no real difference in product appearance, price position or pack format. The only difference is in calories (full, 1/3 less and none). Advertising was used to try and create more differentiation through emotional "sizzle".
One big failure of this sizzle-focused strategy is many consumers don't get the difference between them, despite gazillions of dollars of ad spend. Can you believe that according to Coke 5 out of 10 consumers in the Uk don't know that Coke Zero is a zero calorie drink!
A bit of analysis confirms that if you were starting from scratch, you'd probably use the Coke brand plus a descriptor as your brand architecture, given that the stretch from core Coke is limited on both key dimensions:
– Product stretch: how different is the new product from the core product?
– Emotional stretch: how different is the personality of the new product from the core? This can be influenced by the new product sector, the target consumer and the price point (e.g. more premium)
3. Follow the money
A look at he 2014 UK revenue of the different Coke products shows why the one brand strategy makes sense. Coke is "following the money" to focus on the core business. 90% of the business is in Coke and Diet Coke. Coke Zero has struggled to get anywhere near close to the objective set at launch of being as big as Diet Coke, as I suggested it would back in 2006 here and again in 2010 here. And Coca-Cola Life is small at the moment. Time will tell if it is a "dwarf", doomed to stay small, or a "toddler" (small but will grow big).
My guess is that Coca-Cola Life is a dwarf and will suffer the same fate as Pepsi Raw, Pepsi's attempt at a "natural Cola", that I posted on here back in 2007. I called natural cola being like "seeing your parents on a nudist beach. It might be natural. But it just doesn't feel right". Coca Cole Life is neither the real thing (red Coke) or a true low calorie Coke like Diet Coke. The main benefit is being made with natural sweeteners, which raises questions about the sweeteners in other Coke drinks.
In conclusion, Coke's one brand strategy helps them re-focus on the core Coke brand, and expect it to deliver a better ROI. Total sales might be the same or even a bit less. But the amount of marketing budget should be quite a bit less.
