This year Coca-Cola launched a rather strange campaign behind its Coca-Cola Zero product.
You may have seen it. It’s based on the odd idea that executives at Coca-Cola that sell Coca-Cola Classic want to hire lawyers to sue their co-workers who sell Coke Zero. To them it’s “a clear case of taste infringement.” In simple terms, the Classic marketing guys want to sue the Zero guys for producing a Coke with no calories that tastes as good as a Coke with calories.
But then you might say, “What about Diet Coke?” Good question. The grand strategy is to have a three-cola strategy (Classic, Diet and Zero). This is not unlike PepsiCo, which is pursuing the same idea. They have basic Pepsi, Diet Pepsi, Pepsi Max and, coming soon, Diet Pepsi Max.
What’s going on here? In my estimation, nothing but confusion, and confusion is the enemy of effective marketing. This is the kind of stuff you often see when a category is flat or declining. All the marketing guys sit around, stare at complicated marketing research and try and figure out ways to turn things around.
Before you can say “segmentation,” they are headed into endless line extensions designed to attract this segment or that customer group that the research has produced. Millions are spent in product development, marketing and advertising, and the business stays flat or even declines. Most of this activity revolves around existing customers who try these new offerings but eventually migrate back to their favorite version.
Think about it. If I drink Pepsi or, say, Pepsi Max, why would I switch to Coke Zero? To get the taste of Coke Classic? It all makes little sense since I’m a Pepsi drinker. But, if I’m a Classic Coke drinker, I might be tempted to try a new cola with zero calories that tastes like the one I’m drinking. Who knows, but it all strikes me as just shuffling the deck chairs on a brand that’s slowly sinking.
Even the Coke people admit to a bit of a cannibalization problem. They claim that 45% of Coke Zero drinkers are incremental rather than coming from Diet Coke drinkers. But what about Classic drinkers? Anyway you slice it, more than half of your drinkers were your original customers, and now you are launching a campaign directly targeting Coke Classic drinkers by dramatizing the fact that you can now get a Classic taste with zero calories.
But they don’t need to sit around and wait to see what happens. All they have to do is look over at the beer business and they have a pretty good view of their future. Budweiser and Miller have, over the years, produced endless line extensions, trying to breathe some life into a declining category. They haven’t generated any additional business. All they have done is cause confusion and muddied up their brands. Budweiser once had a wonderful line, “This Bud’s for you.” The question became, Which one do you have in mind? Now when you say, “The great taste of Coke,” the question becomes, Which one do you have in mind? Oh, forget it, I’ll have a bottle of water.
The real victim of all tinkering is the basic brand of Coca-Cola. Once upon a time they were “The Real Thing.” This was a powerful differentiating idea that put Pepsi into the uncomfortable position of being a me-too brand. But, as you introduce more things such as a New Coke, a Diet Coke, a Vanilla or Cherry Coke, a Zero Coke, you can no longer be a real thing. You become a many-things brand that stands for just being a cola. Obviously, Pepsi is also a cola, so all you’ve done is level the playing field. Not good when you’re the leader.
As I’ve written in “Differentiate or Die,” once you try to become everything, you become nothing in the mind. And without that differentiating idea, you had better have a very low price.
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