The beginning of 2016 will be the new era for Coca-Cola.
Previously, we knew Coca-Cola with its sub-brands products – Diet Coke, Coke Zero and Coca-Cola Life – with each product has unique color of can. This year, Coca-Cola redesign the can of all its sub-products into more uniform design around the iconic Coca-Cola Red Disc. It will look like this:
(Source: Mashable 2016)
This step is a part of the new Coca-Cola campaign which is begin from this year, “Taste the Feeling”, to replace their long-know previous slogan, “Open Happiness”. The aim is to unite all the products into one single identity.
You can read the conversation about the new branding strategy with VP of Global Design for Coca-Cola James Sommervile here: http://www.coca-colacompany.com/stories/coke-packaging-gets-a-new-look–global-design-vp-explains-thinki/
Last year, Coca-Cola also launched it “single brand” strategy as a trial. The idea is to promote sub-brands, rather than variants.
However, Chief Marketing Officer Marcos de Quinto said that the differentiation created distortions to the main brand. Each sub-brand has its own brand personality, which is sometimes, contradicted to the brand personality of the original Coca-Cola. You can read the conversation with de Quinto here: http://http://www.coca-colacompany.com/tastethefeeling/
This year, Coca-Cola make itself further into the umbrella approach in its branding strategy, rather than the house of brands approach. All the sub-brands now marketed as variants in one single brand. The strategy is to extend the brand equity of the original Coca-Cola into all of its variants.
(Source: Marketing Magazine 2016)
It is an appropriate strategy for Coca-Cola, right?
Coca-Cola has a powerful brand. ESM: The European Supermarket Magazine, even named Coca-Cola as the world’s biggest-selling grocery brand in their Billion Dollar Brands 2015 report. You can read about it here: http://www.esmmagazine.com/coca-cola-named-worlds-biggest-selling-grocery-brand-in-billion-dollar-brands-2015-report/22067
Red is always the trademark colour of Coca-Cola brand. By adding the visual brand of each variants with the classic red disc, when consumers saw the new design of Diet Coke or Coca-Cola Zero, they will associate it to the signature trademark of the original Coca-Cola. All the variants now united under one powerful brand of the original Coca-Cola.
In class, we learned that the umbrella approach is usually more preferred than the house of brands approach. Aaker and Keller (1990) found that consumer perception on the quality of parent product will likely transferred to its extension if they are “fit”. It is aligned to signalling theory, when the extension take advantage from the reputation from the former well-known product (Erdem 1998).
But, are they ‘fit’?
What is the first thing in your mind about Coca-Cola? Everyone has his or her own opinion about Coca-Cola, but more people aware about obesity and diabetes. However, while Coca-Cola well known as unhealthy drink, they also promote healthier alternative of Coca-Cola.
But, do you know five out of ten people do not realize that Coca-Cola Zero is no sugar and no calorie?
Yep, it is true according to Coca-Cola itself. Probably, some of you also do not realize it before. Coca-Cola is usually associated as unhealthy drink. This perception may create wrong signal to Coca-Cola Zero. You can read about it here http://http://www.coca-cola.co.uk/stories/health/choice-and-information/coca-cola-one-brand-marketing-strategy/
But still, with sub-brand strategy, while the sales of the original Coca-Cola increased only by 1% in last year, reported by The Wall Street Journal, the sales of soft drinks in overall was shrinking. Interestingly, the sales of Coca-Cola’s sub-brands, for example like Diet Coke, also fell by 6%.
De Quinto said that the last year sub-brand approach was not an optimal strategy to promote Coca-Cola’s healthier alternatives.
So the question is, how to make people associate the healthier alternatives of Coca-Cola to the iconic power of the original brand, but not to the perception about the original Coca-Cola as sugary drink.
Whether Coca-Cola should implement the umbrella approach, or the house of brands approach, or somewhere between them, those considerations are worth to be considered.
So what do you think about Coca-Cola’s latest branding strategy?
Name: Fanaldi Fadillah Fedrizal (ffedriza)
Student ID: 215335291
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