STRONGBRANDS    Professor Tim Calkins, Kellogg School of Management

The Coca-Cola Company has come out with a new advertising campaign. You can watch the ad here and read more about it here. My overall assessment? Things aren’t going well at Coke.

The new campaign is clearly designed to improve perceptions of Coke. The ad features two employees, Jon and Willie. Jon is a hydrologist, and Willie works for a Coke distributor. The spot highlights a variety of brands owned by Coca-Cola. It explains that Coke employs more than 90,000 people in the U.S., replenishes every drop of water and “makes college a reality for thousands of students.”

The objective here makes sense. More and more people have negative perceptions of the Coke brand. Health advocates are highlighting the link between carbonated drinks and obesity; local governments around the country are moving to tax and limit soda sales; and billionaire Michael Bloomberg, the former mayor of New York City, is spending millions attacking the soda industry.

So Coke is trying to shift perceptions, working to get people to think positive things about the company. I understand the intent, and I think it is a logical move.

The Problem

So what is the problem?

Let’s start with the brand portfolio strategy. Coke is working very hard to connect its different brands back to the Coca-Cola Company—the new ad features brands including Honest Tea, Odwalla and Smartwater.

This is a bad idea. Do people like Smartwater better when they know it is part of Coke? I suspect not. If anything, the connection might damage perceptions of Smartwater. In a similar fashion, Honest Tea seems a bit less honest when you realize that this quirky brand is actually owned by a global corporate giant.

Then there is the message. It is a jumble. Coke highlights three scattered points:

• We should like Coke because it employs a lot of people
• The company replenishes water (what does that actually mean?)
• Coca-Cola Company makes college a reality (how?)

This is a mess.

It all feels a little bit like the executive team at Coke is in a frenzy. I can almost imagine the meeting, “People care about jobs, right? So let’s talk about the jobs. And the environment. And college…people are really worried about the price of college. Can we work that in?”

A Better Plan

Instead of airing this weak advertising, the team at Coca-Cola should do a few things.

First, consider changing the corporate name. The Coke brand is becoming a problem in many parts of the world; a new corporate brand would distance the brand Coke from the corporation. It would also allow Coke’s different brands to grow and thrive. This is similar to Google’s shift to Alphabet.

Second, embrace one cause. People want businesses to play a positive role in the world. Young people want to be part of a company doing important things. Some consumers support firms that embrace notable causes. Clean water is important and a natural link to the company, so perhaps that is the right area. College is important, too, and could be a platform. Just don’t get distracted and try to do everything.

Third, invest heavily in the new beverage brands. Soda, as a category, is under attack. Growth will have to come from new brands. The challenge is to continue supporting Coke at adequate levels while accelerating growth of innovative new platforms.

At the moment, Coke executives are in a panic. The problem is that their actions might be doing more harm than good. Coke needs a new approach.

 

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