Coca-Cola has a new portfolio branding strategy. Will it work?

Citing the goal to have more than 50% of sales eventually coming from their lower and no calorie versions, Coca-Cola Great Britain recently announced that they are rebranding their portfolio to better unify the Coca-Cola, Coca-Cola Life, Coca-Cola Zero, and Diet Coke brands.  In an effort to help consumers choose the right Coke for them, the core messaging in Great Britain and 8 other nearby European countries will change from “open happiness” to “choose happiness.”  As it’s likely inefficient to continue to advertise all of the sub-brands individually, the intent looks to be to utilize a megabrand communication strategy to more effectively drive all variants (sub-brands) and ultimately create a more balanced portfolio.  Not only will this Coca-Cola megabrand strategy work, but it also should be considered for global application – and here’s why:

Clearer differentiation.  Coca-Cola is looking to promote “choice” as part of their new branding. By unifying under a single visual identity and creating key differentiators (label color, sub-brand, and sub-brand description), Coca-Cola will succeed in their ability to better communicate the differences and benefits of the Coke variants. The distinct colors, already evident in current branding, create visual cues from which consumers can easily select their desired variant.  The sub-brand descriptions, which are now more prominently placed on packaging, helps to ensure consumers understand why each product is different and unique.  This should solve, for example, some of the confusion as to what “Zero” means – some think zero calories, while Coca-Cola wants you to think zero sugar (if you’re wondering…it’s the latter).

Marketing spend efficiency.  At the risk of just stating the obvious, taking a megabrand approach should allow for greater efficiency across all of Coca-Cola’s marketing plans, enhancing overall portfolio margin.  Instead of developing unique communications for each variant, Coca-Cola can now more easily combine the variants into a single communication and drive interest and awareness of all four sub-brands for much less than it takes to drive all four separately.  Promotions that may have just run on one variant can now be easily extended across all four sub-brands.  Agency and development costs are reduced too, as the number of creative ideas, messages, and executions are greatly streamlined.  Applied globally, these savings and efficiencies are, let’s just say, significant.

Enhanced merchandising.  Envision a 4-way of 12 packs at Wal-Mart. Each side is a different color (red, green, black, silver), yet all are unified under the core Coca-Cola brand.  By combining the 4 sub-brands into a single brand communication in-store, Coca-Cola can create a bigger promotional footprint, and drive trial among current Coke drinkers by co-merchandising in retailers, whether on shelf, in aisle, or as part of some larger promotional display.  It’s not that Coca-Cola doesn’t already do this (Coke and Sprite have been co-promoted forever); however, the creative opportunities to combine/mix/ display the variants together should be a welcome addition to retailer’s marketing plans.  Not to slight Zero, but I’m already considering what kind of holiday display Target can pull off with prominent reds, greens, and silvers at their disposal.

Closer taste association with the original Coke.  It’s hard to beat, or even match, the taste of the original Coca-Cola.  Zero, Life, and Diet are good attempts, but nothing beats the real thing (wasn’t that a marketing campaign at one time?).  By more closely associating the red labeled original with the low/no calorie variants, there is an underlying message that all Cokes are created equal.  While they will remain somewhat different tasting, creating an enhanced belief of taste similarity, Coca-Cola should succeed in driving trial of the low/no calorie options among consumers who have purposely stayed away from them thinking that they won’t deliver the authentic taste consumers desire.  While not everyone who tries it is likely to convert to Life, the additional trial of the low/no calorie variants should still provide better overall balance to the Coca-Cola megabrand portfolio.

Demonstrates Coca-Cola’s health consciousness.  OK, this is a bit of a stretch, in that CSDs (carbonated sugary drinks) have arguably played a role in global obesity, especially in children (just reference Mexico’s world leading obesity rates and top ranking in per capita CSD consumption).  However, creating a portfolio communication that elevates the prominence of the low/no calorie options allows Coca-Cola to demonstrate that they are placing these options on equal footing with the original version.  As long as Coca-Cola sticks with a megabrand message, they can claim that their low/no calorie options are as equally available and as important as the original.  Going a step further, Coca-Cola could even claim that 75% of their marketing spend (assuming a the one brand messaging goes across 100% of their plans) are dedicated to the low/no calorie versions, providing even more of a platform from which Coca-Cola can show that they are taking the health of their consumers at least a little more seriously.  As I said, it’s a stretch.

It will be interesting to track the results that Coca-Cola gets out of this branding change across the pond.  If results are positive, which I predict them to be, I can’t see why this megabrand strategy would not get reapplied on a global scale.  Hopefully, consumers will “choose happiness,” and their choices will make Coke happy too.  And marketers everywhere will be watching to see whether a megabrand approach can be more effective in generating sales vs. individual brand/sub-brand communications.


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