As a Marketer, I wish it wasn’t true. I am a huge fan of great Marketing and Coke has always been one of the best. Being a fan of Coke is likely how it feels for Manchester United fans to see your team fall to fifth place in the standings or Montreal Canadiens fans to see your team completely miss the playoffs. I hate seeing what’s happening with Coke.
I have heard a lot of Marketers suggest that Coke’s downfall is because “Coke is bad for you”. Of course it is bad for you. So is beer, chocolate and fast cars and yet those categories are going strong. Plus, when looking at a change in sales, you must look to see what has changed. We have known that Coke was bad for you for the past 15 years, yet from 2000 to 2014, Coke saw strong steady years of growth. Coke’s Marketing was bucking the underlying “health” trend that should be bringing them down.
If I invested $10,000 in Coke in 2005, it would have turned into $22,000 by 2014, significantly beating the stock market. However, 18 months later with declining sales trend, that $22,000 is still $22,000 and Coke is now in panic mode.
At Beloved Brands, we believe that Brands have to create a REPUTATION that connects quickly and lasts in the minds and hearts of the CONSUMER, generating a tight BOND, POWER and PROFIT, beyond what the product alone could achieve. From 2000 to 2014, Coke had been using a “Happiness” platform to make everyone feel good. It wasn’t the most strategic, but the execution was terrific. Cute polar bears, story-telling, names on labels, innovative viral ads. It was working. However, in the last 18 months, there appears to be a ton of confusion on what is the Coke reputation. This has led to lower consumer connectivity, driving lower sales and profits. At the beloved stage, the marketing effort has to shift to transforming your brand into an experience. Beloved brands create magic with the consumers, so they feel more and think less. When I look at what Coke has done with a new master brand strategy, new red cans for all brands and focusing on the product, I see a brand that is thinking more and feeling less. As a fan of Coke, they are now putting the brand at risk of becoming the next Kodak, Sony and General Motors. I hope they figure it out fast and get back to having fun.
To us, Marketing involves a process of THINK, PLAN, DECIDE, EXECUTE. The panic mode of facing declines has them thinking too much about the sales line and not enough about the reputation they manage with consumers. Some of the decisions they are making appear to be the wrong decisions and the panic mode has them on the wrong path. Let’s hope they can find their way.
2005-2015: The 3 things Coke did to keep the growth alive
We have known for a while that Coke was bad for us, yet we kept drinking it. It was fun moment to have with friends, a great thirst quencher on a hot summer day, and even a piece of American history in every bottle. Coke used amazing tactical executions to keep the brand alive in our hearts.
1. New Lifestyle machines turned Coke into an experience:
When I was a kid, it was so much fun to go up to the pop fountain and combine every flavour: a bit of Coke, a bit of Sprite and Orange or Root Beer and back to the coke for a bit more. But Coke’s new Freestyle machines took that to the level combining art, science, entertainment and design to give you up to 100 options to make the fountain drink of your choice. These machines, not only give you a drink, but a fun and very cool interactive experience. They make Coke magical and fun, keeping the love affair with Coke alive. This is helping consumers to feel more and think less.
2. Beautiful ads that made us feel good about ourselves:
Coke has done amazing advertising work for the past 80 years. They invented our visual of Santa and taught the world to sing. The best Coke ads aren’t filled with highly strategic messages but just great feelings. In so many focus groups, I have heard consumers say, “I love the Coke polar bear ads”. When I’d ask why, all anyone can ever say is “they make me feel good”. Coke really did a good job around the “share happiness” ads. Below is a great viral ad where a Coke machine gives out free Cokes and Pizza to College students. These ads are focused on getting consumers to feel more and think less.
3. Names on bottles that makes Coke seem very personal:
When I first saw names on cans and bottles, I was highly skeptical. As a Marketer, I thought about the painful logistics of inventory management. I forgot to think like a consumer. This is a very fun, light-hearted tactic for Coke, perfectly fitting with the share happiness brand idea. This program helps consumers to feel more and think less.
2015-2016: The 3 things Coke is doing to inhibit growth
1. Listing the calories as a positive feature on the bottles:
So we know Coke is bad for us. Many diets suggest never drink your calories. Coke is loaded with sugar. We all saw Coke fighting the New York mayor on portion sizes and we know they are fighting legislation on labelling standards. But now Coke trying to turn their 149 calories per can into a positive is one of the craziest ideas I have seen since McDonald’s told us their hamburgers use “real beef”. In a social media world, it has set up the brand to ridicule. (e.g. Coke has more calories than a Cinnabon). This type of feature is more about thinking and less about feeling.
2. You shouldn’t use a Master Brand strategy when you don’t have one master brand consumer:
Usually a master brand strategy works when you can build separate brands under the same idea and even cross-polinate consumers from product to product. However, Coke, Diet Coke and even Coke Zero have three distinct types of consumers. The new Coke master brand strategy feels like a complete force fit. The two sugar-free consumers would rarely if ever drink a real Coke. Now if it was 1981 and Coke decided to use a Master brand approach, maybe that would have worked. But 35 years later, they have THREE huge brands on their hands. In fact, Diet Coke is the #2 brand in the category next to Coke. In theory, the brand and the variant can go together. But in practice, bringing them together after the fact is extremely difficult. Just imagine if Microsoft decided to re-name the Xbox with Surface. High risk, no value move. Their new “Taste the Feeling” advertising campaign is all about SELLING MORE PRODUCT. It’s an OK spot, not a great spot. For a 90 second spot called “Anthem” it lacks the emotional appeal you would expect, and it won’t really generate any viral share-ability. In fact, it on has 650,000 YouTube views so far. It has a lot of product shots, but not really the connectivity needed to move product. And the Diet Coke branding is so bad that you could almost have a contest to spot the “Diet Coke”. This type of advertising is more about moving the feet and less about feeling.
3. New packaging is ugly and off-strategy:
First, I believe that packaging is one of Coke’s biggest strengths. Obviously, the red Coke has 100 years of heritage, and matches the heavy syrup taste of Coke. However, the Diet Coke silver/white package conveys a lighter taste than the red package, appealing mostly to women. The Coke Zero black package stood out in the grocery aisles and grabbed a higher share of the male consumer looking for a sugar-free option. Having three separate packages for three different consumers is a smart strategy. The only explanation I have heard for this type of packaging is “Brand Blocking”. You’re joking right? Coke is already a dominant brand in a huge aisle of the grocery section. Having all red will actually hurt them on the shelf as it will be confusing for the separate customers. I’d rather 10 feet of red, 10 feet of silver and 10 feet of black. Plus, this new packaging is ugly!!! This is just confusing to the consumer, it won’t get to think, feel or even move feet. My hope is that comes to their senses quickly and goes back to the normal packaging. QUICKLY.
Coke has to return to capturing the magic with consumers. Think less. Feel more.
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