José Ignacio Gafo Gómez-Zamalloa

I would not go that far with the statement, but I would certainly say that it has helped to diminish the decline that the The Coca-Cola Co was having within it soft drinks division, while attaining further differentiation.

Structural market trends cannot be changed through launching Star Products and Brands. But the latter can make indeed make a lot of sense from a financial and marketing point of view, even in mature markets.

Coca-Cola has been struggling for years within its soft drinks division, mainly due to the sharp decline of this market in its core market: The USA. Reason for this has been a shift of preference towards healthier drinks such as mineral water, juices and energetic drinks (sure that energetic drinks are not that healthy, but people perceive them as such). Coca-Cola Co was aware of this trend and has been able to enter successfully into this new market, but also had to do something for its soft drinks.

The solution has come by launching something new and aligned with what the market is asking for: The Zero sub-brand. Before launching it, Coca-cola had its regular Coke + a light one. The first was perceived as unhealthy, while the second was viewed as having a weird taste by many customers that were looking for something else. Solution for this? Coming out with something that had the best of each one: A new version that had the full flavor of the regular one while not having sugar at all.

The launch was carefully thought and turned out to be a big success throughout the world: It helped to revitalize the sales the soft drink division (at least for the first six months), while bringing a unique positioning for Coca-Cola.

What to do next? As a boss I had in Canon Europe once told me: “If something is working, keep on doing it and extend it to the rest of the categories”. Thus Fanta and Sprite Zero were launched. Same strategy as with Coca-Cola Zero: Big launch for the new version intended to revitalize the Fanta and Sprite categories and attain again differentiation. Results to be seen in the mid term, but are likely to be very positive for Fanta and Sprite as well. Again, they will not change the core market trend (soft drinks sales are to keep on dropping), but will have positive effects for the brand, its profits and its sales.

My prediction? Zero will be expanded to all brands of The Coca-cola Co. Aquarius Zero is to come soon!

Think Different!!!

Ignacio Gafo

Posted on 15 May 2008 in Nuevas Tendencias, International Marketing, Branding

Comments

Posted by: Joseph Esau at May 24, 2008 06:54 AM

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