Mark Ritson: The Diet Coke relaunch shows its marketers have lost the plot

Coca-Cola has abandoned its One Brand strategy and opted for an expensive Diet Coke relaunch that will do nothing to protect profits and, worst of all, targets millennials.

Diet Coke overhaulUp until now the general consensus has been that, while Coca-Cola might be in a bit of trouble, its marketers were one of the major reasons to keep the faith and it was assumed they would steer the company through the tough times ahead.

There seems little doubt that Coca-Cola (the brand) is starting an irrevocable decline as global tastes swing away from sugar, artificial sweeteners and fizzy drinks. Coke will always be Coke but it will become a fraction of its former self in the years ahead. That’s a problem for The Coca-Cola Company because, despite a wide product portfolio, it remains far too dependent on Coke for its profits.

Around a third of the company’s total corporate worth can be attributed to the brand value of its number one product. That was once a big tick in the company’s favour, but with sales on the slide and promotional activity the only way to support Coke’s continued volumes, the company looks wobbly. There is no harm in being a one-trick pony, but when the trick starts losing its magic you have a problem.

A lot of the issues of a declining brand have been offset by the heroic brand management skills of the army of top-flight marketers working at Coca-Cola. They might be flogging a soon-to-be-dead horse, but nobody has flogged better or harder than the marketers at Coke. A smart blend of communication, innovation and consolidation has enabled the company to buy time as it looks to diversify into new offerings.

READ MORE: Coca-Cola preps Diet Coke overhaul in the UK to boost sales

But the Diet Coke relaunch in the US this month raises some tricky questions. Much of the marketing around it does not just look strange, it looks entirely at odds with the successful approach that Coke has been using to soften its decline thus far. For starters, there is the troubling decision to target ‘millennials’.

“Millennials are now thirstier than ever for adventures and new experiences, and we want to be right by their side,” explained Rafael Acevedo, the man in charge of the brand refresh. “We’re contemporising the Diet Coke brand and portfolio with sleek packaging and new flavours that are appealing to new audiences.”

Cue a clichéd ad with achingly unkempt, multicultural 20-somethings being wacky and diverse while extolling the excellent new flavours.

Too much has already been written about why millennials fail almost every test of market segmentation so I will not bore you (again) with the same message. The only genuine advantage of millennials is that when you encounter a company that claims to be targeting them you know you are in the presence of a sub-optimal, strategy-by-the-numbers marketing team. The idea that Coca-Cola, once the vanguard of 20th-century marketing, would stoop so low makes me sad.

Then there is the weird brand architecture disjuncture. Two years ago we were told that Coca-Cola was embarking on the “biggest strategic change in the history of the company”, with a global brand consolidation that saw it switch from running each of its Coke products as a separate entity to a branded house approach in which the focus switched to the Coke master brand.

READ MORE: Coca-Cola’s CMO explains why its ‘One Brand’ marketing strategy is going global

Accompanying this was a single campaign in which different Coke products were presented as little more than product variants. “We are reinforcing that Coca-Cola is for everybody,” Coke’s former CMO Marcos de Quinto said at the time. “Coca-Cola is one brand with different variants, all of which share the same values and visual iconography.”

The One Brand strategy was a clever way for Coke to get more bang for its marketing buck. Promoting one master brand rather than three or four separate sub-brands would have cut costs substantially, thereby retaining profits despite the declining volumes. But that’s not what is happening with Diet Coke now, which is clearly back to being a very separate sub-brand with its very distinct and significantly more expensive promotional activity.

And the single “visual iconography” that the One Brand strategy promised is also out the window. The new Diet Coke cans look very different from the rest of the Coke offer.

The design principles behind 2016’s One Brand presented the suite of Coke variants with the same distinctive assets and recognisable format centered on the Coca-Cola red Pantone colour and circular disc shape (see above).

“The unification of the brands through design marks the first time in our 130-year history that the iconic Coca-Cola visual identity has been shared across products in such a prominent way,” James Sommerville, vice-president of global design, explained at the time.

But the new design for Diet Coke renders it almost completely separate in size, shape, colour and codification from the master brand (see below). It’s almost as if the marketing team at Diet Coke missed the One Coke memo and continued to operate like it was 1998, not 2018. James Sommerville was once again on hand as global design head, this time to deliver the opposite sentiment to his One Brand message two years earlier.

Sommerville waxed lyrical about how the new design would “demonstrate progressive change and innovation with a look that would appeal to a consumer seeking bolder flavors”. So much for that iconic visual identity then.

It’s easy to sneer at such small details. Cynics might point to the fact that both designs are cans with the Coke logo on them. But in this strategic volte face in terms of targeting, architecture and design there is a genuine risk that Coke’s marketers are losing the plot too.

This is a time for less product, more focus and improved profits. Nothing is going to save Coke from the category-induced apocalypse ahead. The earlier, smarter strategy of focusing on the master brand appeared to embrace that reality and plot a slower and more graceful decline for Big Red. This new, more radical approach to Diet Coke appears at odds with that more realistic strategy and opens up the possibility that Coke isn’t just a big brand with big issues, it might also be a company without the marketers to manage the challenge.

Professor Mark Ritson will be teaching the next Marketing Week Mini MBA course from 24 April 2018. To book your place, sign up at marketingweek.com/mini-mba.

Hide Comments15 Show Comments
Comments
  • Zbiggy Ucinek 17 Jan 2018 at 8:33 am

    Sorry Mark, but you are talking out of your arse. The one brand strategy was the kind of nonsensical crap spouted by so many textbook taught marketeers. All about the bottom line savings which any idiot can do and not about the top line which takes really creativity and talent to achieve. But then again when you have an MBA to flog to teach people to think like everyone else should I be surprised? The relaunch is a bold and in my humble opinion a pretty cool move. Moving away from the old days of a one size fits all philosophy to embrace the clear more individualistic nature of todays consumers. But then as the exceptional Tom Peters so eloquently stated MBA’s don’t teach creativity because it is so hard to teach! I rest my case.

  • Frank Kowalski 17 Jan 2018 at 10:11 am

    This time I absolutely agree with Mark. What surprises me the most is that they understand changes in a category, but completely ignore them. People are moving towards less sugary and more healthy choices, but why should a consumer choose Diet Coke over something else is beyond me. Shouldn’t they cater to consumer needs and at least explain what “diet” even means these days.

  • Grant Simmons 17 Jan 2018 at 2:24 pm

    I’m somewhere in the middle on this. I think the targeting strategy shows limited creativity, but the product strategy is cooler, hipper, and frankly better aligned with the ‘quick grab’ crowd in pubs, bars and Red Bull strongholds. Diet Coke has always been seen as a pick-me-up without Red Bull’s ‘stigma of shakes’, this play adds a perfect mixer scenario to the – um – mix, and I can see these flavors surfacing in pubs and clubs as chic rather than Coke-ish.
    That being a cool component to the rebrand… I’ll come back to the nebulous millennial ‘segment’ strategy, and underscore (and agree) that it’s a mugs game and more of a ‘folks like us’ play than an honest targeting methodology.
    I think you may be surprised with the unlikely success of the new look, but that will be in spite of the crappy target positioning… unfortunately it will give some validation to the young creative crowd set, who will look beyond the failures of their marketing and point at the success of product sales.
    Cheers

  • Pete Austin 18 Jan 2018 at 9:46 am

    Strange video with young folks and no iPhones. Is it intended to be ironic?

    Regarding the One Brand thing. I’ve never understood why people drink Coke – it’s fizzy water plus a ton of sugar and a chemical taste – so using variants of the same brand name more widely seemed a really bad idea.

  • Satish Pai 19 Jan 2018 at 8:06 am

    Mark – you need to read a report on the Singapore launch of Diet Coke on some media sites
    No spoilers from my side, its too good to be believed

  • Al King 19 Jan 2018 at 1:01 pm

    I disagree Mark. I don’t think there’s a problem with Coke targeting new segments. I also think it’s prudent to diversify in the sugar free category. The ad made me want to try them. I do consumer in this category and have often wanted a wider choice. It’s also OK to change strategy if it isn’t working or circumstances change. Promoting three or four separate sub-brands makes sense to me. Innovation for new consumers should always trump visual identity which follows soon after. I think its classic segmentation, targeting and positioning in action.

  • Colin Lewis 19 Jan 2018 at 9:03 pm

    For all ye naysayers, this is the point that you are missing: ‘Nothing is going to save Coke from the category-induced apocalypse ahead’ Quoting ‘Aliens’ out of context: ‘Game Over, Man’. Sugared water with caramel – sorry, with aspartame – not exactly the health zeitgeist.

  • Lee Boswell 22 Jan 2018 at 9:30 am

    First-time commenter. It seems odd, Mark, that you are advocating an approach that is designed only to stop the inexorable decline into oblivion rather than an approach that ‘might’ just stop it. I’m not saying this is the answer (and OMG that video is truly awful), but at least there is recognition that the ‘one-brand’ approach seemed to be centred around the one brand that IS likely to fail. Classic Coca-Cola is the company’s Achilles. Destined to bring greatness – but also destined to die. If the company had continued to focus on the one-brand strategy – it would be tarring the sub-brands with this destructive, sugary, brush.
    Now is the time to make a change, recognise it needs to evolve and find new products and markets. It was only a few weeks ago that you pointed out how Philip Morris was smart to diversify. To move away from its core brand (cigarettes) which is destined to die.
    Pick a side Mark!

  • Heather Johnston 22 Jan 2018 at 12:32 pm

    Diet? DIET? Nobody does ‘diet’ these days. Even Weight-Watchers isn’t about ‘diet’. Are all these cool millennials on diets, then? Like their grandma? Sugar is out, but that does not mean aspartame is in, or any cannily-constructed selection of artificial flavours – at least, not without a big jolt of caffeine to help it along. There comes a point where the whole thing needs revisiting, and the potential sale of a big chunk of Coke equity when Berkshire Hathaway changes pilots is my bet. The new guys are from insurance and financial services, and I doubt they have Warren’s fondness for Cherry Coke. Eighteen months, maybe.

  • christian cook 22 Jan 2018 at 7:09 pm

    I ‘m not sure whether a one size fits all approach is appropriate to a brand like Coca-Cola where there is such a disparity between the cultural nuances of its markets.

    Surely one of the worlds biggest brands, with products in so many markets world-wide, needs to be able to flex its strategy in line with the needs of key regions and countries?

    Having a monolithic design architecture in a world with polygamous attitudes towards aspiration and wellbeing is surely a strategy that forgets the importance of cultural nuance?

    Coco cola has launched this in the US, an advanced market in terms of health trends. I’m sure the new marketing strategy is reacting to specific market needs, rather than an ideological and economically driven need to build a homogenous brand that forgets the needs of its consumers at a local level.

    As we globalise and enlarge the gap in inequality of both knowledge and affluence, we should be seeking to keep hold of brand consistency whilst reacting and adapting to the consumers who we serve.

    I believe perhaps it was this homogenisation of brand and disregard for consumers that led to the reassessment if strategy that Mark is describing.

    Whether or not this is a successful design is another question.

    I’d be interested to hear some thoughts.

  • Heather Johnston 23 Jan 2018 at 10:00 am

    Packaging used to be called ‘the silent salesman’ and what this redesign does is fade Diet Coke into the wall alongside all the other brightly coloured ‘energy drinks’ without creating a reason to pick it out from the chiller – or the shelf. Set this beside a can of Sprite or Monster . I’m not very convinced about the longevity of old brands like Coke in markets where brands themselves are not as popular as they are in the USA, but while the Coke name still means something, the livery has a use. Anybody who buys any sort of Coke on a health premise, incidentally, needs a brain reset.

  • Chris Arnold 26 Jan 2018 at 5:49 pm

    I like the can. I like the design. No idea about the flavours but a bold move. However, it’s a dynamic market, price sensitive and just being Coca-Cola doesn’t make people buy you – consumers are less loyal. Time will tell if it works. But the thing that gets me is the term ‘Millennials’. It is not a segment. It’s a all encompassing term use try media to describe under 35s and is full of assumptions, misinformation and hyped up bull. I do a lot of work in this group, and have just helped launch a milk drink. There is not such thing as ‘a’ Millennial., they are as diverse as any group. The shocker is that they are 90% ordinary. Hipsters by the way represent 0.00000001%. They behave90% of the time like almost everyone else. The values they are often give apply equally to their parents (where they got most of them from). Yes they are more digitally native, stream TV more, listen to music their parents hate, but that’s irrelevant when they go into corner shop for a drink.

  • David Hoggins 5 Feb 2018 at 10:42 am

    The share price doesn’t seem to support any of your assertions …?

  • Peter Györki 6 Feb 2018 at 10:32 am

    If you cut down a tree and wrap it in nice gift paper, you don´t get a bunch of flowers.
    Mor and more classic brands have lost the power of true innovation. Instead we see them loosing contact with their roots and heritage. Trying to follow trends, stressed by fast rising new consumer brands. This is just another example of that.
    To me, Diet Coke Mango is far from what the brand Coca Cola once ment for the post war generation.

  • Adam Clarkson 8 Mar 2018 at 1:26 pm

    Feels like four new attempts at ‘vodka vehicle’ to me. Poor.

  • Post a comment

Latest from Marketing Week

NOT REGISTERED? IT'S FREE, QUICK AND EASY!

Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now

THE BEST CONTENT

Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.

THE BIGGEST ISSUES

From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.

PERSONAL AND PROFESSIONAL DEVELOPMENT

Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3703 or email customerservices@marketingweek.com

If you are looking for our Jobs site, please click here