Can Coca-Cola’s ‘One Brand’ marketing strategy help sales pop?

With the global roll out of its one brand strategy, Coca-Cola is making its “biggest strategic change in the history of the company”, according to the brand’s CMO Marcos de Quinto. Yet its biggest challenge is not a marketing one but an industry one – how to overcome declining consumption amid growing concerns over sugar.

It was crystal clear at Coca-Cola’s unveiling of its shiny new global campaign this week that the brand is looking to directly address the issue of changing consumer habits caused by the debate around sugar and obesity through its marketing.

Speaking at the event, the brand’s CMO Marcos de Quinto addressed the issue head on. He said: “The food and drinks industry is facing some challenges. We have to deal with just one of these ingredients – the overconsumption of sugar. Fortunately, we are able to have products with zero sugar. But we didn’t feel that was enough, which is why we are now shifting our strategy. We want to keep accelerating.”

As a result, Coca-Cola is implementing its ‘One Brand’ strategy, which was piloted in the UK last year, on a global scale. The strategy sees its four variants, including Coca-Cola, Diet Coke, Coke Zero and Coke Life placed under one ‘master brand’.

Any marketing activity will focus on the overall brand, without creating different personalities for its variants. In practical terms, this means consumers won’t see any red Coke bottles without the others strategically placed in the same ad.

Going back to basics

The hope is that the new strategy will ensure the company can adapt more quickly to changing consumer needs. It will do this by making consumers more aware of its low- or no-calorie variants while strengthening the overall brand.

Rodolfo Echeverria, Coca-Cola’s VP of global creative, connections and digital, told Marketing Week: “If the brand you love is Coca-Cola, you will now see all of the Coca-Colas together. The different variants don’t change the overall brand – it’s a feature thing. It’s like you’re buying the same BMW, but you choose to have leather seats instead of the standard material.”

While the brand previously focused on emotional advertising, it is now keen to promote the benefits of its products too.

Echeverria explained: “We are integrating the product story with the emotional story much more than before. Overly emotional ads that get awards at the festivals don’t matter because the brand isn’t even related to the story. We said: ‘Enough is enough – no more communications that aren’t integrated in the way we want them to be’.”

The power of the one brand strategy

Initial figures suggest the one brand strategy has had a positive effect on sales in the UK. Bobby Brittain, the brand’s CMO for the UK and Ireland cited Nielsen data showing that during the 52 weeks ending 25 December, Coke as a trademark grew in the UK. Sales of Diet Coke and Coke Zero also increased, but Coke Life was the only variant to see a decline in sales.

He said: “All of our results in relation to our diet and light variants were better than would have been the case had we not done the one brand strategy. Other test markets performed just as well in relation to their lights performance. We know this works and that this is the right approach to get more growth in Coke Zero, Coke Life and Diet Coke.”

While sales are up, however, Coca-Cola’s market share is stagnant. Brittain added: “The overall colas sector is in growth and we’re growing, but our share of that market is virtually flat. It’s -0.01%, which is the bit that we’re not satisfied with. Any leader wants to make the overall sector grow. It’s what didn’t happen last year, but this year we will want to lead the sector.”


Battling long term challenges

The brand’s one brand strategy seems to make sense from a consumer point of view, as it provides a more coherent branding message while also giving its other variants the opportunity to have their moment in the spotlight.

According to IRI figures for the 52 weeks ending 7 November 2015, value sales of Coke Zero declined from £93.2m to £92.7m year on year, while Diet Coke fell from £444.4m to £428.6m. Meanwhile, Coke Life sales were just £1.16m for the four weeks ending 8 November down from £2.67m a year ago.

“It’s a sensible strategy as they have unified the brand. Part of the motivation for it would appear to be so it can drive Coke Life, which has been a lot less successful,” says Robert Haigh, marketing and communications director at Brand Finance.

However, Marketing Week columnist Mark Ritson believes the brand’s renewed marketing push won’t fix the wider challenges impacting the soft drinks market. He says: “[Coca-Cola’s] marketing remains impressive, but the category and the brand are starting to die. Ironically, the one positive of Coke in recent years has been its marketing communications. That ain’t the issue.”

Instead, the instant associations with the Coca-Cola master brand are those of its signature Coke – that it is sugary and unhealthy, which is a big problem.

“Any declines Coca-Cola is facing are related to sugar concerns, so aligning low sugar options with regular Coke reduces the ability to drink a Diet, Zero or Coke Life guilt-free,” adds Emma Rose, senior strategist at Brand Union.

The brand is also in the difficult position where it has to fight consumer trends in the soft drinks market, where an increasing number of people are turning away from carbonated drinks.

READ MORE: Soft drink brands suffer blow as government pledges sugar tax for 2018

“In the short term, the company’s share will remain similar to how it is now. But realistically, it is on a downward trajectory until they reach a plateau. While there is definitely still a place for the brand, its current market share is unsustainable,” Haigh comments.

While Coca-Cola may have heavily invested in marketing, it will be a challenge for it to reverse long term consumer trends – it might be that the brand can only try and manage the decline.

Hide Comments1 Show Comment
  • Marcin 7 Dec 2016 at 4:04 pm

    To be honest I cant believe that one can write so many words about such insignificant things and campaing that is no different to any previous one. Challanges in FMCG markets are nothing compared to B2B marketing. When I look back at my FMCG times I have smile on my face, how easy it was.

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