Facing declining soda category trends in the United States and flat category growth globally, Coca-Cola is launching a new go-to-market strategy aimed at securing its market share and growth prospects.
The heart of this new strategy is unifying Coke, Diet Coke, Coke Zero, and Coca-Cola Life under a "one brand" marketing brand campaign and packaging architecture design. Historically, the company has treated the variants more as individual brands. The new design will be rolled out in Mexico first this May, with other markets adopting the new packaging throughout 2016 and 2017, with the US likely at the tail end of the transformation.
The marketing campaign will be based on the "Taste the Feeling" concept and supported by 10 TV ads, digital, print, out-of-home, and point of sale materials. The objective of this effort is to have all variants of Coca-Cola will be unified under this message and speak together as one voice instead of separate marketing for Coke, Diet Coke, Coke Zero, and Coca-Cola Life.
The packaging design is also aimed at driving a greater sense of brand unity and halo across the business. All of the Coke variants will now all display the signature Red Disc, although the different variants will still feature a splash of their own unique colors: black for Coke Zero, silver for Coca-Cola Light/Diet Coke and green for Coca-Cola Life. Marcos de Quinto, Coca-Cola CMO explained this decision by saying "Packaging is our most visible and valuable asset, . . .The Coca-Cola Red Disc has become a signature element of the brand, synonymous with great taste, uplift and refreshment. By applying it to our packaging in such a bold way, we are taking the next step towards full adoption of the 'One Brand' strategy, uniting the Coca-Cola family under one visual identity and making it even easier for consumers to choose their Coca-Cola with or without calories, with or without caffeine." Although the company admitted it is still working to determine the exact packaging execution of this vision in the US where Diet Coke has a large market share and utilizes "Coke" on its packaging vs. the other variants, which use the more formal "Coca-Cola".
My take on this brand strategy approach is simple - it's a mistake and will likely fail.
The objective of this strategy is to clearly drive greater scale, which from a marketing standpoint traditionally means driving greater efficiency in advertising spending (e.g., getting a bigger bang for your buck because any advertisement should now drive sales across the broader brand portfolio vs. just one Coke variant like the historic marketing was targeted). Accepting this premise would obviously seem very financially attractive as it would allow Coke to reduce its overall marketing budget because it no longer needs to run four independent advertisements to support the four different variants, it can now look to drive all four behind one advertisement. However, I would argue that any shorter-term cost savings will be more than offset by longer-term revenue declines because the effectiveness of the 'one brand' advertisement will likely be lower than Coke's historic variant focused approach. This is the case because to make this strategy work, Coke effectively needs to dilute its messaging to the least common denominator that halos across all four variants. What made Diet Coke and Coke Zero so powerful is they each spoke to two very different target consumers than original Coke and I worry that one advertising campaign will soften the brand's ability to both target and resonate as deeply with each individual target, instead opting for being a bit of everything for everybody.
From a packaging standpoint, the company is also clearly trying to make a scale play by increasing the visual brand block at shelf with a sea of red. This in theory should grab more consumer attention in store. Additionally, for a design purist standpoint, the simplicity of the new brand architecture is far more beautiful than the current disaggregated design. However, sometimes the uglier solution is the more effective solution from a consumer standpoint. What consumer has ever complained they cannot find Coke on the shelf? I have real worries that the new packaging will lead to significant confusion at the shelf and in some cases will lead to the consumer either walking away empty handed or with the wrong item. Simply put the packaging is just too similar across variants to allow the consumer to quickly find their variant of choice - especially in a category dominated by a grab and go mentality. Additionally, from an on-pack communication standpoint, the variant name is in the wrong location on the can and bottle. It should be below the brand name where consumers eyes are trained to expect it, as opposed to up top. The location on the top of the label is likely to be missed by many consumers based on the fact that the packaging pulls their eye directly to the brand logo and consumers are trained to read down, and not glance back up. Finally, I'd argue consumers have a strong affinity for the can color of their personal favorite variant. In many ways, what can color can you prefer has come to express something about your personality to yourself and others in our society - not necessarily good or bad - but something about who you are. I'm a black can (Coke Zero) guy. I don't think consumers will ever articulate this, but I expect the black can people and the silver can (Diet Coke) people to have some hesitations about picking up a new red disc can. I think they'll miss how their old can helped expression a very small piece of their personality. In this way, Coke will be a victim of its own historic success.
