Leaders are hard to beat: Coke Zero vs. Pepsi Max

This week's earlier post looked at being a leader brand in a segment, with the example of Kettle Chips in premium crisps. Another good example is recent news coverage of the challenges Coke Zero is having taking on the leader brand in "lads cola" segment, Pepsi Max.

Coke Zero was launched in 2006 with the ambition of being as big as Diet Coke in 10 years. I posted back in 2006 asking questions about the rationale for Coke Zero and how successful it would be. Well, 4 years into that 10 year journey, and the status is (mkt share 4 weeks to 26 Dec 09):

Coke Zero: 2.2% share, lowest share since launch

Diet Coke: 26.8% share, +1%pt

So, why is Coke having such a hard time?

1. Taking on a Leader brand is hard:

Coke Zero's fundamental problem is that whilst Coke the dominant leader brand overall in cola, with a c. 50% share, Pepsi Max is the leader in this segment of sugar-free cola targeted at young men. Pepsi Max's simple idea is "maximum taste, no sugar". In contrast to Diet Coke and Diet Pepsi which are targeted at women, Pepsi Max has always had a "laddish" style of communication.

Pepsi Max was launched in 1993, a 13 year head start on Coke Zero. They have hard-wired into peoples' brains that Pepsi Max is the sugar-free cola with attitude for young guys. And changing this is very hard. Coke Zero have spent £22.7 million in marketing since launch, and are yet to seriously dent Pepsi Max's share.

Indeed, the growth in Pepsi Max in the last year is 2/3 of the size of the whole of Coke Zero.

Picture 10
2. A weaker concept?

Another issue for me is that the Coke Zero concept is less inspiring and compelling for the target of young men. Zero focuses on what is missing, sugar. Whilst Max focuses on the good stuff, which is taste. Also, "Max" as an idea leads you to lots of great marketing ideas, as the website above shows. "Max your music", "Max your football" etc.

Picture 83.

Coke Zero in contrast have a campaign at the moment about "making the impossible, possible". This is based on the idea of having all the Coke taste and no sugar is impossible, made possible. Pretty complex stuff, compared to "Maximum taste, no sugar".

3. Lack of distinctiveness

Taking on and beating a leader brand is tough, but can be done, providing you have a highly distinctive mix. This has not been the case with Coke Zero as far as I can see. Similar product. Similar pack. Similar distribution. Similar advertising style with laddish humour.

In conclusion, think long and hard before you take on a leader brand in a segment. And if you do, ensure you have a disntinctive mix and value proposition that really adds significant value vs. the leader. And be ready to spend heavily, over a long time, to make any progress.