A

Project Report On

Coca-Cola’s Shift to a “One Brand” Strategy: Can it Change

Consumers’ Perception?
Submitted in partial fulfilment of the degree

Post Graduate Diploma in Business Management (PGDBM)

Submitted by
Mr. Shivam Khandelwal
Marketing

Roll No: P18034

PGDBM 2018-2020
Project Guide: Mrs. Deepa Chavan

GOVERNMENT OF MAHARASHTRA’S

SYDENHAM INSTITUTE OF MANAGEMENT STUDIES, RESEARCH &

ENTREPRENEURSHIP EDUCATION (SIMSREE)
B-ROAD, CHURCHGATE, MUMBAI- 400020
 Coca-Cola’s Shift to a “One Brand” Strategy: Can it Change Consumers’ Perception?
This project report in the Special Studies in Marketing based on the in-depth study of
the Coca-Cola’s Shift to a “One Brand” Strategy is submitted in December, 2019 to the
Sydenham Institute of Management Studies and Research and Entrepreneurship Education
(SIMSREE), B - Road, Churchgate, Mumbai - 400 020, in partial fulfilment of the requirements
for the award of the two year’s full time Post Graduate Diploma in Business Management
(PGDBM), AICTE approved.

Submitted By

NAME: Shivam Khandelwal ROLL NO. : P18034

Through

NAME OF THE GUIDE: Mrs. Deepa Chavan

 CERTIFICATE

This is to certify that this project report entitled "Coca-Cola’s Shift to a “One Brand”
Strategy: Can it Change Consumers’ Perception?” is submitted in December,2019 to
Sydenham Institute of Management Studies and Research and Entrepreneurship Education
(SIMSREE), Mumbai 400020, by Mr. Shivam Khandelwal bearing Roll No. P18034 Batch
(2018 - 2020) in partial fulfilment of the requirements for the award of the two year’s full time
Post Graduate Diploma in Business Management (PGDBM), AICTE approved.

This is a record of his work carried out under my guidance. He has discussed with me
adequately before compiling the above work and I am satisfied with the quality, originality and
depth of the work for the above qualification.

PLACE: MUMBAI.
________________________
DATE: 1st December,2019 (Signature of the Guide)
Mrs. Deepa Chavan
SIMSREE,3rd Floor,B-Road,Churchgate,
Mumbai 400020
Tel No.: +91 9892187561
Acknowledgement

I would like to acknowledge the following for being the idealistic channel and fresh
dimension in the completion of this project.

I take this opportunity to thank Sydenham Institute of Management Studies, Research &
Entrepreneurship Education (SIMSREE) for giving me a chance to do this project.

I wish to appreciate the management for providing the state of the art facilities, Director Dr.
Manoj Bhide for his dynamic leadership and the library staff for their support in providing
academic content, and the teaching and supporting staff for providing the entire state of the
art and resources to enable the completion and enrichment of my project.

I would also like to express my sincere gratitude towards my Project Guide Prof. Deepa
Chavan under whose guidance and care made the project successful.

I would like to thank our college for having provided various reference books and magazines
related to my project.
Objectives

 Study the brand positioning strategies adopted by Coca-Cola over the years.
 Understand how its advertising canpaigns helped consistently maintain leadership
positions among other brands.’
 Understand the reason behind Coca-Cola’s shift in marketing strategy.
 Understand the role of perception in consumer behaviour.
 Compare and contrast “Open Happiness” and “Taste the Feeling” campaigns.
 Contents

Introduction………………………………………………………………………………..….7
Background Note…………………………………………………………………………,….8
“Open Happiness” Campaign…………………………………………………………….…10
Moving from Sub brands to one brand………………………………………………….…..11
“Taste the Feeling” from emotion to function………………………………………….…...13
New Look……………………………………………………………………………….…..15
Mixed Reactions……………………………………………………………………….……16
Results………………………………………………………………………………………17
Challenges…………………………………………………………………………………..18
The Road Ahead…………………………………………………………………………….19
References…………………………………………………………………………………...20
 Coca-Cola’s Shift to a “One Brand” Strategy: Can it Change
Consumers’ Perception?

“In some ways we had been hiding the product and we need a little more balance. When you
are the leader of a category if you abdicate talking about your product benefits then you let
other categories eat your part of the pie. Iced tea, flavoured waters will start capturing
volume from your category.”

“The bigness of Coca-Cola resides in the fact that it’s a simple pleasure. We want to help
remind people why they love the product as much as they love the brand.”

– Marcus de Quinto, former chief marketing officer (CMO) of Coca-Cola.

“Coca-Cola is in one of the more unique positions that I’ve ever seen: The brand is revered,
and the product is increasingly reviled. Brand strategies or tactics can deflect from larger
issues, but fundamentally,…there’s been a shift toward more healthful living. And until they
actively change the product [to be healthier] and change the public’s perception of the
product, the new branding initiatives will ring hollow.”

– Geoff Cook, founding partner of Base Design, an international strategic branding firm.

In a major overhaul of its communication strategy, Atlanta-based beverage giant The Coca-
Cola Company (TCC ) launched a new “One Brand” marketing strategy in January 2016 to
unite for the first time all Coke variants such as Coca-Cola, Diet Coke, Coca-Cola Zero, and
Coca-Cola Life, under the Coca-Cola master brand in one global creative campaign “Taste
the Feeling”. The shake up came at a time when Carbonated Soft Drink (CSD) makers
globally were being challenged by increasing awareness of health concerns and taxation on
sugar-sweetened drinks – factors that deterred consumers from purchasing soda. According
to industry observers, the idea behind the move was to help control over-consumption of
sugar by removing brand barriers to low- and zero-calorie Coke variants, eradicate brand
confusion within the Coke portfolio, encourage consumers to stay within the brand, and
boost sales. “This strategy of generating subbrands, rather than variants, has created
distortions in the main brand. The different brands have sometimes contradicted the
personality of Coca-Cola. Creating brands for different people with different personalities
undermines completely the fundamental Coca-Cola brand promise,” said Marcus de Quinto
(Marcus), former CMO of Coca-Cola, as he announced the new strategy at a media event in
Paris in 2016.

A significant part of Coca-Cola’s success was attributed to its emphasis on brand over
product. The brand Coca-Cola was well known for its innovative marketing campaigns,
catchy advertising slogans, distinctive script logo, and the circular red sign which made it the
world’s best recognized sign of global US enterprise. However, in 2015, increased consumer
preference for healthier drinks slowed down the sales of CSDs. This led the company to trade
its 7-year-old emotion-focused global marketing campaign “Open Happiness” for the more
product-centric “Taste the Feeling” in an attempt to win back consumers and revive sales in
the struggling soda category. The new campaign was rolled across more than 200 countries.
However, some analysts felt that setting a huge brand like Coke on a new marketing course
amid declining soda consumption was a massive undertaking. According to them, the idea of
bringing the product center stage when the product itself was the problem was also a risky
move. In the words of Gabrielle Diepenbrock, Social Media Manager at The Goss Agency,
an advertising firm: “Now the question is, will this new campaign work for Coke? Some
think it’s smart for Coke to focus on their product, but some worry that these ads are slowly
changing Coke’s brand image – with a shallow theme of mere refreshment and the usage of
flashy images… Will the advertisements make it more likely for them to purchase Coke?
Will it make the brand stronger, or will it rob Coke of the brand they have worked so hard to
cultivate?”

BACKGROUND NOTE

Established in 1886, TCC was the world’s largest total beverage company, offering over 500
brands to people in more than 200 countries. The first advertisement for Coca-Cola, appeared
in The Atlanta Journal dated May 29, 1886. Over the years, to promote the drink, the
company came out with several print ads. Jingles and slogans became an integral part of
Coca-Cola’s advertising. After World War II (1939-1945), the company began to
manufacture other beverages and expanded its product line to include root beer, bottled
water, juices, and sports drinks. In 1941, the term ‘Coke’ was first used in magazine ads in
order to establish the name as a trademark. In its ads, TCC emphasized brand over product. It
aimed to sell consumers the experience and lifestyle associated with its brand. In 1985, TCC
introduced a new taste for Coke in North America called New Coke with the slogan “The
Best Just Got Better.” The reason behind the launch of the New Coke was that the company’s
product testers had found that in blind taste tests, many people preferred the sweeter taste of
Pepsi, a carbonated drink manufactured by its rival PepsiCo, Inc. So, TCC also introduced a
new sweeter version of its drink – the first change in the formula since 1886. Customers,
however, rejected the new taste outright and, on public demand, the original formula was
brought back to the market as Coca-Cola Classic. During the 1990s, new beverages were
added to the company’s line-up, including the Powerade sports drink, Qoo children’s fruit
drink, and Dasani bottled water. By 1997, TCC was selling about 1 billion servings of its
products each day.Between 2001 and 2006, Coke sales in the US dropped significantly with
consumers growing increasingly concerned about the impact of sugar-laden drinks on their
health and weight. In order to increase the sales of its carbonated soft drink brands in key
markets, TCC launched a fully integrated global marketing campaign called “Coke Side of
Life” in March 2006. The campaign invited people to choose Coke and look on the positive
side of life. The “Coke Side of Life” campaign ran for about three years (2006-2008) until
the company decided to replace it with another campaign as sales of carbonated soft drinks
continued to decline. In the first half of 2008, the sales volume of Coke slipped by 3.5% in
the US due to increasing competition from newer drinks like bottled teas and vitamin-based
waters.
“OPEN HAPPINESS” CAMPAIGN

The “Open Happiness” campaign was the result of a six-month initiative known as “Project
Next” undertaken to improve the efficiency of Coca-Cola’s marketing strategies. The
campaign whose theme was “Open, share and enjoy a bottle of Coke” was used as a primary
marketing platform in nearly 200 countries globally where Coke was sold. The campaign
included point of sale, promotions, outdoor and print advertising, digital and music
components. Coke was the central theme of all commercials and the campaign was tweaked
for different markets depending on local preferences. Music played a central role in the
“Open Happiness” campaign. TCC teamed up with Warner Music Group’s Atlantic Records
to create a new music track featuring some of the well known artists from the worlds of rock,
pop, and hip hop. The song reflected the positivity, optimism, and fun articulated in the
“Open Happiness” campaign. While some opined that the “Open Happiness” represented the
perfect strategy for connecting with consumers and felt that the campaign had achieved its
aim of increasing sales, others were of the view that it did not have the power to influence
one to purchase a bottle of Coke. They said it was the taste which attracted customers rather
than the ads. However, the 2010 financial results revealed that TCC had seen a 13% increase
in its net operating revenues (from US$30.9 billion in 2009 to US$35.1 billion in 2010) as
well as in its gross profit (from US$19.9 billion in 2009 to US$22.4 billion in 2010). In 2010,
89 servings were consumed per person worldwide and CocaCola was served 200 million
times a day in North America.

In early 2014, TCC launched a digital media campaign globally called ‘Share a Coke’
wherein customers could personalize their Coke bottles. Fans could visit the ‘Share a Coke’
website to personalize their own virtual bottles and cans, and then share the images with
friends and family through social media networks like Twitter and Facebook. Further,
customers could also trace the stores and location where the Coke bottles with their names
were being sold, which boosted sales. More than 6 million virtual Coke bottles were created
and shared by customers in the US by September 2014. The campaign was credited with
increasing the company’s CSD sales in the US by more than 2% in 2014, after 11
consecutive years of sales drop. It also led to an increase in the consumption of Coke from
1.7 to 1.9 billion servings per day, and made #shareacoke a top global trending topic on
social media.

MOVING FROM SUB-BRANDS TO ONE BRAND

Since the start of the millennium, Coca-Cola and other soda drinks had found themselves
becoming increasingly unpopular with people pointing to them as one of the causes of the
causes of the rising obesity rates in the UK and the US. The rising health concerns among
consumers had led to a continuous decline in soda consumption in some key global
markets.The sales volume of CSDs in the US fell by 0.9% between 2013 and 2014, with
TCC losing 1.1% and PepsiCo 1.4%. Coke reported a mere 0.1% volume growth in 2014,
while Diet Coke posted a steep 6.6% drop in sales volume, according to data from Beverage
Digest. According to company filings to the U.S. Securities and Exchange Commission,
TCC’s sales volume – Coke and its variants – fell almost 5% between 2014 and 2016 in the
US and were down 1% worldwide. In the third quarter of 2015, the company reported just
1% global growth in the Coca-Cola trademark, including 1% growth for brand Coke, 8%
growth for Coke Zero, and an 8% drop for Diet Coke. In 2015, according to YouGov Brand
Index which measured a range of consumer perception metrics including value, reputation,
satisfaction, and quality, Coca-Cola’s brand index score dropped 4.1 points to 4.3, a
‘statistically significant’ decline, according to analysts. Purchase intent, meanwhile, dropped
one point to 8.5.7 Coke, which had topped Interbrand’s best global brands list for 13 years,
lost the top spot in 2013. According to Interbrand, the brand’s value fell from US$81.6
billion in 2014 to US$78 billion in 2015. The company addressed health concerns by
launching low-calorie alternatives. It introduced new variants of Coke with distinct and
separate identities. For instance, Diet Coke was marketed to women while Coke Zero was
targeted at men as a low-calorie option. Coke Life using natural sweeteners was later
introduced as a response to calls to reduce artificial sweeteners. However, these variants
failed to attract millennials, who had increasingly begun to cut back on sugary drinks from
their diets. Between 2005 and 2017, diet soda sales dropped by a whopping 34%.9
Throughout these developments, the original flagship Coke variant was kept separate to keep
the brand from being diluted by the low-calorie options. However, the company’s research
showed that not all consumers fully understood the choice offered within the Coca-Cola
master brand and the distinct benefits of each sub-brand. Reportedly, 5 out of 10 consumers
did not realize that Coca-Cola Zero was a no sugar, no calorie drink.

Seeking to save its CSD business, in early 2016 James Quincey (Quincey), the then COO of
TCC, came out with a three-pronged strategy for creating long-term growth in the declining
soda sector. The plan had three essential steps: new recipes, a completely revamped
marketing strategy, and smaller bottles and cans. Marcus was appointed as the CMO of TCC
in January 2015. He was asked to rebuild the Coke brand and spruce up the sales of
carbonated beverages. Marcus, according to many, was a brilliant maverick and a fearless
agent of change. He was known for his marketing innovation at Coca-Cola with initiatives
that had driven sales. For instance, in 2013, he was behind Coca-Cola Spain’s ‘Magic Pill’
campaign, which boosted the brand’s reputation and sales among health-conscious
consumers.

Marcus felt that the “Open Happiness” campaign was just talking about the brand in a
preachy way and saying very little about the product itself. As part of a completely revamped
marketing strategy, he planned to develop a new brand architecture for Coca-Cola, wherein
he decided to push Coke’s sugarless options into the spotlight so that the brand could adapt to
healthier consumption trends. He wanted to focus on the distinct characteristics of each Coke
variant and raise awareness about the choices available.

Marcus pointed out that the loyal consumers of Coke had always loved the brand, but there
were moments when they wanted to reduce their intake of sugary drinks. In such cases, he
felt that Coke was forcing customers to buy into a completely separate variant – Diet Coke or
Coke Zero. For instance, marketing Diet Coke to female consumers suggested that the
original flagship Coke was no longer inclusive of that audience. Implicitly, according to
Marcus, the company was saying that Coca-Cola was not for everybody. Moreover, he felt
that the scattered sub-brands strategy undermined the brand proposition that had made Coca-
Cola successful and was damaging the pure core of what the brand had stood for over the
years–“that it’s a brand for everybody”. As part of Marcus’s plan to boost sales of the sugar-
free variants, Coca-Cola unveiled its new ‘One Brand’ global marketing campaign in Paris
on January 19, 2016, wherein the four Coke variants – Coca-Cola, Diet Coke, Coca-Cola
Zero Sugar, and Coke Life were placed under one ‘master brand’. The campaign was first
piloted in the UK in 2015. The unified approach meant that Coke would no longer have sub-
brands but only variants. Quincey said the new strategy emphasized the company’s
commitment to choice, offering consumers whichever Coca-Cola suited their taste, lifestyle,
and diet. “The One Brand strategy takes us from ineffective way of talking about four
different brands and if you grew up drinking Coke Classic and you wanted to switch to Coke
Zero you almost have to change brand and change your lifestyle. Now the idea of the one
brand is you can enjoy Coca-Cola the whole of your life and you can have it in different
product variants as you want to mix and match whether it is caffeine or sugar or whatever,”
he added.

“TASTE THE FEELING”: FROM EMOTION TO FUNCTION

Under the ‘One Brand’ strategy, TCC launched a new global campaign called “Taste the
Feeling”. The aim of the campaign was to put the product at the center of every ad as Coke
wanted to gain more customers in the struggling soda category. The campaign was positioned
as a shift from the brand per se toward the product, as Marcus had noticed over a period of
time that the brand had just been talking about “happiness” and forgetting that it was a drink
that tasted good. “We’ve found over time that the more we position Coca-Cola as an icon, the
smaller we become. The bigness of Coca-Cola resides in the fact that it’s a simple pleasure –
so the humbler we are, the bigger we are... We’re going from ‘Open Happiness’ to exploring
the role Coca-Cola plays in happiness,” he said. In March 2015, TCC invited 10 of its roster
agencies to pitch ideas for a global campaign. The initial round of work included TV ads, as
well as digital, print, and out-of-home marketing. The campaign was rolled out globally
across more than 200 countries at different times in different markets. The campaign came to
life through a number of elements, including 10 television commercials, 100+ campaign
images which were used in print advertising, out of home billboards, in-store and digital
media, a new visual identity system, a new music anthem, as well as an audio signature.

The campaign celebrated the product as well as the brand by featuring the product at the
heart of the creative where people were enjoying simple pleasures. The ads featured universal
storytelling with the product at the core to reflect both the functional and emotional aspects
of the Coke experience. The spots gave the viewer momentary, but intimate glimpses into
everyday moments, feelings, and experiences such as a first date that people shared while
enjoying Coca-Cola . The ads featured simple stories and no dialogue, while using one
unifying theme song. At the close of each spot, the Coca-Cola variants united under the
iconic red Coca-Cola disc. The campaign kicked off with a lead spot called “Anthem” that
placed Coca-Cola at the center of ordinary moments like ice-skating with friends, a first date,
and a first love. The ad featured an original song by Australian pop star Conrad Sewell and a
new audio signature inspired by the sounds of enjoying a Coca-Cola such as the pop of the
cap and the fizz. Globally, alternate versions of the ads were produced with locally relevant
casts and culturally relevant vignettes. For instance, the “Elevator,” ad released in Africa and
China featured a woman bellhop and a rap star getting stuck in a hotel elevator while the
African version of the ad starred Nigerian rapper Banky W; the Asian version featured
Chinese pop singer Lu Han.

The campaign also featured 100+ campaign images shot by noted fashion photographers Guy
Aroch and Nacho Ricci capturing people from around the world enjoying Coca-Cola in a
variety of moods. The images were used in print advertising, on out of home billboards, in-
store, as well as on digital media . Talking about Coca-Cola’s new product-centric campaign,
Adam Padilla, CEO of consultancy Brandfire, said, “It’s a philosophical shift [for Coca-
Cola], and it ushers in a new era where de Quinto seems to be prepping Coca-Cola to make
some bold moves… ‘Open Happiness’ could be said about a lot of things, when you open
anything. But when you talk about ‘Taste the Feeling,’ you have very strong connectivity
with a feeling with Coke, and you also have the literal aspect of tasting it–the taste of
happiness.”

NEW LOOK

Furthering its ‘One Brand’ global marketing strategy, in April 2016, TCC overhauled its
packaging. According to James Sommerville, Global VP of Design, the Coke brand was
diluted in store and on shelf with different designs across Coke Zero, Coke Life, and Diet
Coke. He said that during the design process, the team saw the Red Disc as the one design
element that could unite the trademark visually. They felt that the unified red look would
actually help people stay in the Coca-Cola franchise, resulting in less switching between
brands. “Packaging is our most visible and valuable asset. By applying the Coca-Cola Red
Disc to our packaging in such a bold way, we are taking the next step towards full adoption
of the ‘One-Brand’ strategy, uniting the Coca-Cola family under one visual identity [...].”The
new packaging used a single visual identity system for all the Coke variants anchored by the
iconic Coca-Cola Red Disc. The Red Disc was prominently featured on bottles and cans of
all Coke brands underscoring the company’s commitment to providing choice. Besides the
Red Disc, the new packaging featured each sub-brand’s distinct tagline and signature color
throughout the packs, as for instance, black for Coke Zero, silver for Coca-Cola Light, and
green for Coca-Cola Life. The upper half of the can was defined by the color red while the
different colors on the bottom represented the variants. The company said the new designs
would help consumers make informed choices by identifying each Coca-Cola product with
its signature color. The new packaging also included product name and benefits on the front
of the pack. The unification of the brands through design marked the first time in its 130-year
history that the iconic company’s visual identity had been shared across products in such a
prominent way. Tish Condeno, marketing director of Coca-Cola Singapore, Malaysia, and
Brunei, said, “We realised that we were in danger of losing our iconic colour in a sea of other
colours like silver and black, and we knew we needed to reclaim it as an icon of our brand.
That’s one of the primary ideas behind the new strategy.”
MIXED REACTIONS

Some analysts felt that the new campaign could succeed in achieving TCC’s objective as it
was able to extend the reach of Coca-Cola to wider markets without creating different
personalities for its variants, which ensured that the company would be able to adapt more
quickly to changing consumer needs. According to Joseph Anthony, founder and CEO of
branding firm Hero Group, “Young people want to feel part of a global society, and they’re
looking for brands that can help them participate in one. This will do very well in creating
equity for Coke as an enabler, someone who empowers consumers to feel part of a global
conversation and community.” However, some analysts felt that Coca-Cola’s ‘One Brand’
strategy was not really addressing the issue associated with consumption of sugar. They felt
that with a unified approach the company was just wrapping the Coke brand in a different
discourse. Some experts opined that under the new positioning, the variants of the Coke
brand were being viewed as disparate elements, which they felt was a bit ironic considering
that Marcus was attempting to create consistency across the Coke sub-brands. They said
while “Open Happiness” tapped into one strong universally relevant emotion executed in
fascinating ways, the “Taste the Feeling” campaign was cold at a functional as well as
emotional level. Some analysts were of the opinion that though the ads relating to the new
campaign had a youthful feel, they were generic and had nothing new to offer. “Personally, I
prefer “Open Happiness.” It made me admire and look to Coke as something more than just a
beverage. It was a brand that stood for things I stood for--and in that respect, I felt better
about myself when buying a Coke,” said The Goss Agency’s Gabrielle Diepenbrock. Some
analysts were skeptical about how the ‘One Brand’ strategy would prove beneficial for a
global brand like Coca-Cola, which sold variations of its products and used different
packaging across different countries. Some analysts felt that it was really not necessary for
the company to change the brand communication of Coke frequently as it was the taste which
mattered to consumers rather than the brand image. Others opined that the new product-
centric marketing plan was complicated and difficult to implement. They felt that consumers
could get confused or become alienated by the change in relative weight given to the Coke
sub-brands. “Will consumers who drank Diet Coke still choose it at the shelf when it is so
heavily branded Coca-Cola? A lot to consider,” commented Larry Lucas, partner at global
brand strategy firm, Vivaldi Partners Group.However, some experts opined that Coca-Cola’s
decision to communicate its non-sugar variants more clearly was an appropriate response.
They said the company had to be dedicated to pushing these healthier options to sustain its
success in the future. “It is clearly moving away from a [marketing strategy] that leads people
to associate the Coca-Cola brand with a single product. Ultimately, it will depend on the
success of the other variants in the portfolio to boost the overall brand. There is definitely a
place for them in the world,” commented Nick Liddell, director of consulting at branding
agency The Clearing.

RESULTS

According to the company, early data on the ‘Taste the Feeling’ campaign showed “green
shoots” having led to a growth in retail sales as well a rise in the profile of the Coca-Cola
brand. In North America, Coca-Cola’s net revenues grew 8% for the fourth quarter 2016 and
4% for the year, outperforming total retail value growth for both the North America
nonalcoholic ready-to-drink beverage industry and US consumer packaged goods companies.
Even in the UK, initial figures suggested the “One Brand” strategy had had a positive effect
on sales. In 2017, for the first time ever, Coke’s sugar-free products contributed to half of the
brand’s overall sales in the UK. In the US, sales of Coca-Cola Zero Sugar were up 13% in
2017. Other countries had experienced even greater growth, with Germany up almost 20%,
Great Britain at 50%, and Mexico at 90%.“We believe that marketing takes its time to build
up. It is a huge business, and the Coca-Cola business is not going to suddenly change
overnight. The early signs from the data are starting to look very encouraging, especially in
those places where we launched first and we launched the fastest and the hardest. And we see
encouraging results in terms of retail sales growth of the Coca-Cola brand in total,” said
Quincey.

However, global figures showed that the brand was battling falling sales. In 2016, Coca-
Cola’s net revenues declined 6% for the fourth quarter and 5% for the full year. Coca-Cola’s
second quarter results in July 2016 showed global net revenues had fallen 5% year-on-year.
In the UK total CocaCola ‘classic’ value sales for the six months ending July 2016 were
down 7.8% to £267.5 million. Diet Coke, Coke Zero, and Coke Life all saw sales fall by
5.4%, 3.4%, and 54.5% respectively. In the fourth quarter of 2017 global net revenues
declined 20% to US$7.5 billion. For the full 2017 fiscal year TCC reported net sales of
US$35.4 billion, a 15% drop compared to the previous year. In the first quarter of 2018 the
company delivered a strong financial performance. Total unit case volume grew 3%, with
growth across all category clusters and geographic operating groups. Net revenues declined
16% to US$7.6 billion for the quarter while organic revenues (non-GAAP) grew 5%.
Analysts said that the strong results came as Coke had diversified its portfolio to include
more low-sugar drinks to appeal to consumers looking for healthier options while
simultaneously spending more on marketing its core Coca-Cola brands.

CHALLENGES

Some analysts felt that setting a big brand like Coke on a new marketing course was a
massive task, particularly at a time when the brand was battling declining soda consumption
amid growing health concerns over sugar. An increasing number of customers were moving
away from sugary beverages in favor of healthier options such as ready-to-drink fruit juices
and bottled water . According to Nathan Edwards, Global Sales Executive, Innovation
Enterprise, a business media company, “Coke’s issue is not its advertising, it’s its negative
perception in a health-conscious society, and it’s unclear what the new campaign and unified
branding does that will change the public’s perception of the drink.”Some analysts wondered
whether the new product-centric focus had put the brand in a tricky spot. As Coca-Cola tried
to draw attention back to its products through its ‘One Brand’ strategy, people were looking
to consume healthier products. According to them, the idea of focusing on the product when
the product itself was the problem, was a risky move.
Declining soda sales was one of the major concerns for the company. While Coca-Cola was
pushing to broaden its lineup with healthier options, its lifeblood remained carbonated drinks.
Moreover, the company was under pressure as a number of alternatives marketed as healthier
or more natural were fragmenting the soft drinks market. In 2016, Coca-Cola fell out of the
top 10 in BrandZ’s ranking of the world’s 100 most valuable brands for the first time.
According to BrandZ, Coca-Cola’s brand value declined from US$80.3 million in 2016 to
US78.1 million in 2017 .“Even though volume sales are largely flat, more brands are
focusing on quality and launching low-calorie options, so there are some green shoots within
the sector and there is an opportunity for growth. For the more traditional brands that have
been out in the market for a while, it will be more difficult to reinvent themselves than it is
for new players,” said David Lancaster, senior account manager at strategic consultancy
CGA Strategy. Another major concern for Coca-Cola was the recommendation by the public
health arm of the United Nations that countries should consider taxing junk foods–especially
sugary drinks–in order to curb the growth of childhood obesity worldwide. With at least 8g
of sugar per 100ml, regular Coca-Cola would fall into the highest band of the new sugar tax,
effective from April 2018 in the UK. This would lead to an increase in the price of a can of
Coca-Cola in the UK by around 8p. According to The Sun, a standard can of regular coke,
costing around 70p, would cost 8p more while the cost of a 1.75ml bottle of coke would
increase from roughly £1.25 to £1.49. Some analysts felt that the unified approach might
dilute the purpose behind low-calorie options such as Coke Life and Diet Coke. For instance,
in markets like the US where Diet Coke had a large and loyal customer base, the company
was in a dilemma on how it would integrate Diet Coke into its ‘One Brand’ strategy.
Moreover, with several different products and packaging designs that varied among regions,
a global marketing plan focused on the products themselves would be challenging to manage,
opined experts.

THE ROAD AHEAD

Quincey, who took over the reins of the company in May 2017, introduced a new business
strategy called ‘Coke’s Way Forward’ in February 2017. According to him, the company’s
new business strategy would focus on Choice, Convenience, and the Consumer. As part of
the new strategy the company planned to build a portfolio of “consumer-centric brands”
including low and no-sugar options across a wide array of categories. In March 2017, Marcus
retired as TCC’s global CMO after nearly 35 years with the soft drinks giant. Thereafter, the
company’s global marketing role was combined with strategy to create a new position ‘chief
growth officer’ (CGO). The CGO was responsible for driving growth across five strategic
drink categories: sparkling; juice/dairy/plantbased; tea and coffee; water; and enhanced
waters and energy. Francisco Crespo, the president of Coca-Cola Mexico, was appointed the
CGO of Coca-Cola in May 2017.

Going forward, the company planned to invest more in marketing and in building awareness
about its low- and no-sugar drinks. In January 2018, Coca-Cola launched four new flavors of
its popular low-calorie Diet Coke in sleeker cans in an attempt to attract millennial
customers. The no-calorie drink came in Ginger Lime, Feisty Cherry, Zesty Blood Orange,
and Twisted Mango flavors. The company said the brand revamp reversed the negative sales
trend of Diet Coke in North America and drove Diet Coke volumes up 3% in the first quarter
of 2018. Earlier in July 2017, Coke Zero was rebranded as Coke Zero Sugar as the brand
wanted to communicate that it did not contain sugar. Analysts said the company had to
continually promote its healthier options to keep up with changing consumer preferences,
manage falling sales, and sustain its global dominance in the beverages industry. The
questions being asked by analysts were: Can Coca-Cola reinvent itself with the ‘One Brand’
strategy? Can the strategy pay off and boost sales amid growing health concerns over sugary
drinks? Will Coca-Cola’s efforts to unify the brand with product-led positioning resonate
well with the consumers and change perceptions? “I understand Coke’s reasoning. I even
agree to some extent. But the way the campaign portrays the brand as only a product takes us
back to the ‘80s. On top of that, the execution bothers me. It is rather soon to predict
anything, but my gut says this new brand positioning won’t do justice to Coke’s brand and
risks damaging their equity. If I’d try to guess something here, not far from now we will be
seeing Coke revising its strategy again. But, only time will tell,” commented Marcel Jacob, a
Creative Brand Strategist.
References

1. https://www.marketingweek.com/coca-cola-moves-to-one-brand-strategy-scrapping-
individual-brand-campaigns/
2. https://www.coca-colacompany.com/stories/taste-the-feeling-launch
3. https://www.marketingweek.com/can-coca-colas-one-brand-strategy-help-sales-pop/
4. https://www.marketing-interactive.com/coca-cola-goes-back-to-basics-as-one-brand-
strategy-hits-sg-and-my/
5. https://www.designmantic.com/blog/coca-cola-one-brand-strategy/
6. https://medium.com/@NamiSonthalia/an-insight-into-coca-colas-visual-branding-
strategy-bba0eb0bc519
7. https://www.marketingsociety.com/the-gym/coke-one-brand-strategy-simpler-and-
more-sausage
8. https://www.warc.com/content/paywall/article/event-
reports/understanding_cocacolas_one_brand_strategy/107135’
9. https://www.slideshare.net/HibaNasir5/coca-cola-brand-positioning
10. https://www.coca-colacompany.com/investors/archives-annual-other-reports
11. https://m.economictimes.com/industry/cons-products/fmcg/pepsi-coca-cola-and-
other-soft-drink-makers-struggle-as-early-rains-dampen-peak-sales-
season/articleshow/20921234.cms?from=desktop
12. https://www.marketingweek.com/coca-cola-sales-not-fizzing-as-too-few-share-a-
coke/