How Coca-Cola overhauled its marketing in 2015
From its ‘one brand’ strategy to lower calorie products, the soft drinks company is determined to keep up with changing consumer behaviour.
Back in March this year, Coca-Cola introduced a one brand strategy where its four product variants, Coca-Cola, Diet Coke, Coca-Cola Zero and Coca-Cola Life were placed under one Coca-Cola master brand instead of being marketed as separate products.
At the same time, the company changed its ‘Open Happiness’ strapline to ‘Choose Happiness’ in the UK to enable consumers to make informed choices by more clearly communicating product differentiation.
The new brand strategy came to fruition after its consumer research showed that half of consumers didn’t know that Coke Zero has no sugar and no calories, with many unclear about the different between Coke Zero and Diet Coke.
Bobby Brittain, GB marketing director for Coca-Cola, told Marketing Week at the time that this lack of knowledge suggests the company’s focus on building personality behind its brands has stunted consumers’ understanding of the products.
“We’ve failed to communicate clearly enough the product differentiation. That’s a major wakeup call for us. We need to ensure that we are enabling consumers to make an informed choice.”
Bobby Brittain, GB marketing director, Coca-Cola
To achieve this goal, the company said it would increase investment both in the whole Coca-Cola portfolio and in each of its individual products. It also rolled out new packaging, with each variant given the same design and set of characteristics, such as the iconic Coca-Cola script, ribbon and layout.
Early sales results
While it is still early days in terms of measuring sales results off the back of the new strategy, initial data in August suggested an uplift in sales since its introduction.
Data from IRI shows that total Coca-Cola value sales across its variants were up by 1.46% year on year to £480.3m for the 20 weeks to 18 July (the period during which the strategy has been in place). Volume sales fell slightly (0.69%) to 425 million litres.
Growth in the wider cola market was slower, up 0.5% to £1.7bn. Main rival Pepsi saw total sales drop 8.4% for the same period to £161.7m.
However sales of standard Coca-Cola fell by 2.79% to £246.9m while sales of Coke Zero were also down slightly. This was offset by a rise in sales of Diet Coke and the introduction of Coke Life in August 2014.
Nicoleta Alcea, account director of business insights at IRI, says: “The core range is growing, and this doesn’t appear to be related to distribution. That leaves us with rate of sale, which is effected by price promotion or media and advertising.”
She added that each of the variants has seen less in-store promotion than usual this year, suggesting that the brand’s marketing efforts are the main driver of sales.
Rugby World Cup sponsorship
Besides launching two TV ads since the new strategy was introduced, the brand also got involved with the Rugby World Cup in August. Throughout the sponsorship, the brand decided to put Coke Zero centre stage.
“It’s unique in the sense that the one brand strategy frees up all of the individual variants to have their own time in the sun,” Brittain said. “For the first time people are seeing Coke Zero as the face of Coca-Cola. This is definitely Coke Zero’s time to shine.”
It focused on the ingredients and “intrinsics” of Coke Zero as the basis for Rugby World Cup promotion rather than the brand’s personality according to Brittain.
He also said that Coke Zero has an opportunity to “grow even faster”, something the company is addressing by “doubling down on investment” and pushing the variant both in TV and communications as well as through in-store promotions.
“It’s the variant that we see as a strong part of the future of the portfolio,” he commented.
Adapting to healthier lifestyles
Amid growing consumer concern around sugar and the obesity crisis, the brand is facing a tough battle. As a result, Coca-Cola is keen to boost its lower and no calorie variants, and aims to have half of its sales come from lower and no calories variants by 2020. They currently make up roughly 40% of its portfolio.
To achieve this, the brand launched ‘Coke Life’. It meant to offer a lower calorie variant for more health conscious consumers. It has a third fewer calories and sugar than Coca-Cola and is sweetened using a blend of sugar and naturally sourced sweetener stevia.
At the time of the launch, Coca-Cola Europe’s president James Quincey said: “[Coca-Cola Life] complements our existing brands and is well positioned to meet changing lifestyle trends, providing people with a great tasting, lower calorie cola sweetened from natural sources.”
However it faced criticism from some quarters over its positioning as a ‘healthy’ product, with some saying that there was “little to applaud” in the announcement.
Sales figures from IRI show that since the introduction of the new product in August 2014, the Life brand has grown into a £28.9m business, representing 2.43% of the total Coca-Cola portfolio.
The brand said it was pleased with the product’s performance so far. Brittain told Marketing Week in October: “We’re very pleased with the performance of Coca-Cola Life.
“Consistent with our strategy, we launched the variant to increase the choice we offer customers, shoppers and consumers and it is encouraging to see that Kantar data continues to show in the first year that over half of the volume switched into Life has come from regular carbonated soft drinks.
“With the launch of Coca-Cola Life and our continued investment focus on Coca-Cola Zero and Diet Coke we are confident we can achieve our commitment that half of the Coca-Cola products we sell will be lower and no calorie by 2020.”