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Coca-Cola: The end of happiness?

July 26, 2016

 

When Coca-Cola’s CMO Marcos de Quinto explained why he wanted to replace “Open Happiness” with “Taste the Feeling”, he said the brand needed to get closer to its core values. Unfortunately, the change actually pushed the brand further away from its strong heritage.

 

So it came as no surprise when Marketing Week reported yesterday that Coca-Cola sales continue to decline, despite heavy investments behind this new brand direction.

 

From a Marketing perspective, this major strategic shift was doomed to fail for two key reasons.

 

First, strong brands are built by driving consistency – across touchpoints, across geographies, and across time.  Coca-Cola became one of the world’s most valuable brands because of its unwavering consistency in all of these dimensions.

 

Since its founding in the early 1890s, Coca-Cola has consistently been about bringing people together to enjoy moments of happiness.  And while its taglines have changed many times, the core meaning of its brand has always remained the same.

 

By now moving away from an emotional positioning around happiness to a functional positioning around taste, Coca-Cola risks destroying the equity which it has worked so hard to build.  It is natural to want to dial-up product attributes when trying to stimulate short-term sales, but it should be done within the context of your overall brand story and not at the expense of it.

 

Second, strong brands are built by making clear choices.  A strong brand cannot be all things to all people, so it must clearly identify who it is going to serve.

 

Coca-Cola has historically done a terrific job of managing its portfolio of brands.  The company recognized early on that Diet Coke is not just a different flavor of Regular Coke.  Rather, it is a fundamentally different proposition for a fundamentally different target audience.  As a result, it correctly pursued an approach in which different brands would be built, each with its unique positioning and personality. 

 

By now moving away from a “house of brands” approach to a “branded house” approach (where all cola-based products fall under the umbrella Coke brand), Coca-Cola risks losing its meaning to each of its distinct target audiences.  There are a lot of effective ways for brands to promote trial and cross-sell, but fundamentally changing your brand strategy is not one of them.

 

Mr. de Quinto has called this new “One Brand” strategy, “the biggest change ever in the story of Coca-Cola.”  It’s a shame, though, that the story of a company which has always stood for happiness, now won’t have a happy ending.

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