The “One Brand” strategy, announced by Coca-Cola today (5 March), will not only place the company’s four product variants, Coca-Cola, Diet Coke, Coke Zero and Coca-Cola Life under the Coca-Cola master brand rather than being marketed as separate brands, but will also evolve the company’s “Open Happiness” strapline to “Choose Happiness” in Great Britain, promoting the strategy’s goal of enabling consumers to make informed choices by more clearly communicating product characteristics.
Despite the fact that the shift may appear to simplify the company’s strategy and reduce costs, Coca-Cola insists more money will be invested into marketing, but across the portfolio rather than in individual brand campaigns.
This platform will allow the company to save on non-earned media and production costs, and is in line with the company’s goal of cutting $600m from its marketing budget and re-investing into front-line marketing support.
Coca-Cola invested heavily behind media in 2014, with media spend up by double digits since the initial plan was introduced just over a year ago.
A global campaign starring Marilyn Monroe and Elvis in celebration of the 100th anniversary of the company’s contour bottle was revealed at an investors’ conference in New York on 20 February.
Coca-Cola’s chief executive Muhtar Kent said the campaign is an example of how the quality of its advertising is improving as a result of the re-investment of savings made from tighter procurement processes and investment in “creating efficient and global campaigns.”
Previously, Kent had stated: “Media investments take time to reach their full respect, but when we fully fund our brands with high quality marketing, we see results. It’s still early days, but we are encouraged by some initial positive signs.”
Umbrella branding can be cost-efficient
The move is an effort to improve customers’ understanding of the company’s cola products after consumer research commissioned by the company showed that half of consumers don’t know that Coke Zero has no sugar and no calories, with many unclear about the difference between Coke Zero and Diet Coke.
It will mean that all future communications will present the four products together for the first time, and advertising will come at both a Coca-Cola brand level and at a variant level, but only to push the taste and ingredients of the products rather than a story or personality.
Reshaping under Coca-Cola’s master brand in this way could allow advertising to work more efficiently.
Tim Eales, strategic insight director at IRI, told Marketing Week: “The halo effect of a powerful master brand’s image can invoke its qualities onto the range, allowing umbrella advertising to work better and more cost-effectively.”
It could also allow for more cost-effective innovation, as new products could fit into the existing model in a way that “doesn’t depend on us spending a fortune in creating a new entity every time,” according to the company.
New brand platform could improve consumer clarity
While the strategy may be in line with the company’s budgeting tactics, it remains to be seen whether consumer responses to the platform will result in sales growth for Coca-Cola’s products.
The company’s intention is to have half of its Coca-Cola trademark sales come from lower and no calorie products by 2020, which seems like an achievable goal given its latest results.
Data from IRI shows that sales of total cola products for the company had dropped 1.1% to £1.2bn year on year to 31 January, with volume falling by 2.2% to 1.1 billion.
While sales for its Coca-Cola and Diet Coke variants had also dropped, Coke Zero, its no calorie and no sugar variant, saw sales up 7.9% to £94.5m and volume up 2.8% to 83.6m.
The platform could bring clarity to consumers, ultimately benefiting sales, which Coca-Cola claims is the ultimate goal of the strategy.
Richard Ford, soft drinks analyst at Mintel, told Marketing Week: “The benefit of a ‘One Brand’ strategy would be to show that Coca-Cola essentially has a menu of products, allowing consumers to choose the product that’s right for them depending on their individual need state.
“Positioning the different Coca-Cola variants together in communications should make it easier for Coca-Cola to highlight the products’ differences, bringing greater clarity for the consumer.”