Coke's side of life leaves critics scratching heads

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Coca-Cola's new global strategy and tagline for its flagship brand, "Welcome to the Coke side of life" is flummoxing some observers.

"What's on the other side?" asked Tom Pirko, president of consultant Bevmark. "I can't figure out what it means. It's not specific enough to get consumers to relate to the icon."

The concept created by Wieden & Kennedy was unveiled to analysts and press last week by Mary Minnick, president-marketing strategy and innovation, who is under growing pressure to show she can produce winning advertising for the world's most iconic brand. Ms. Minnick, however, took pains to note that the rough video she showed was indicative only of the general strategy and tagline. "I hope it's not reviewed as finished advertising because I've made the caveat pretty clear."

And while some observers are dutifully withholding judgment until the full execution is revealed, initial reaction by many attendees was lukewarm at best.

Too many promises?

"We have heard too many promises from other Coke management teams to accept that change is imminent and the company will be able to execute at the company without seeing proof," wrote Bonnie Herzog, beverage analyst for Citigroup the day following Coke's Dec. 7 briefing.

Some wonder whether advertising can fix Coke's woes at all. "We don't believe that new advertising, that might make consumers feel better about the Coke brand, or better about the ads themselves, will actually result in consumers consuming more of the product," wrote Bill Pecoriello, beverage analyst for Morgan Stanley, in a note to investors the day after the briefing.

Coke's overall strategy is to lead consumers into seeing Coke with new eyes-as the only beverage option for certain occasions rather than simply another beverage option, Ms. Minnick said. But Brian Till, associate professor and marketing-department chair at St. Louis University, questions whether this effort will answer why the brand is relevant to consumers. "I'm not sure they've tapped into the emotion of why people love Coca-Cola," he said. "Being creative and being humorous is great, but it needs to be linked to a selling concept. What is the reason for being for Coca-Cola?"

At least one industry-watcher believes that Coke is taking a page from the Pepsi playbook with the new direction. It's a positioning shift from authenticity to lifestyle, putting Coke "in clear competition with Pepsi," said Shi (Shir) Zhang, an associate professor-marketing at Anderson School at UCLA, pointing out the inherent risk. "With Pepsi, we are familiar with a lifestyle brand already. Coke used to be distinctive. Now it's centering on kids with technology and people who are into technology and hip-looking. The somewhat lukewarm reaction may be because people are already familiar with this kind of style."

Other brands

Beyond the flagship, Coca-Cola is seeking to grow other core brands to broaden market share. Citing consumer-panel research with 60,000 consumers, Ms. Minnick told investors that the company has identified 17 different "need" states-from having a good time to energy/stimulation-that represent 352 billion unit cases of opportunity.

The company is micro-targeting against those need states, extending existing brands with new packaging, marketing or new benefits to creating new ones. Coffee, tea, energy drinks, water and juices will play major roles in touting the company's beverage diversity-it has 80 brands in 200 countries.

Among the products in the pipeline for 2006 and beyond are Sprite 3G, an energy version of the lemon-lime soda; Coca-Cola Blak, a coffee cola targeting adults over 35; new formulas for Nestea; a black-tea brand called Gold Peak; a ready-to-drink coffee brand to be tested in four countries under the Far Coast brand; and an indulgent coffee brand that Beverage Digest is reporting will be marketed under the Godiva brand. Other brands will include Powerade Advance, a single-serve enhanced water, along with lemonade and limeade extensions of Minute Maid juices.

Rick Mathieson, author of "Branding Unbound: the Future of Advertising, Sales and the Brand Experience in the Wireless Age," said that long list of new products "struck me as a continuing misdirection for Coke. Brand marketers are always under pressure to launch new drinks, and that's why we seem to have 10 different flavors of beverages like Sprite and Mountain Dew. But in the long term, all these brand extensions dilute the main brand. Part of the `Welcome to the Coke side of life' seems to be the launch of, among other things, a coffee flavored Coke drink. Who knows, it may work. But it seems like Coke is just losing its fizz."

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