What does Coke Branding Aim to Achieve? 🧐 Episode 45
In this episode of Pricing College we look at the importance of branding for retail products – and we look at Coca Cola (Coke Branding).
Everyone in the world knows Coca Cola and sees it everywhere we go. Does the huge spend on branding produce a customer view on the brand as a premium product?
We argue that the branding positions it strongly as a middle and mass market product.
TIME-STAMPED SHOW NOTES
[01:11] How advertisements help promote the Coke branding
[03:11] Does coke branding helps to maintain being a market leader in the soft drinks industry?
[04:17] Joanna explains how coke branding message change thru the years
[05:47] Why coke branding protects them from the downside?
[07:18] Unclear brand message of coke acquired healthy options makes consumer confused in Coke branding and product portfolio
[09:26] Is the brand message or coke branding haven’t changed through the years?
Why coke branding is working so well?
As we say in the world of podcasting and busses you wait for one bus on three come at once. So today we’re doing a third in a series of articles or podcasts about Coca Cola.
Right, we’ve been discussing coke quite a bit. We’re saying like everybody knows coke. We all know the brand. We all know the colour even we don’t say Coca Cola we say coke. It got us thinking about the branding behind Coke, its powerful branding and its works.
So today we just want to discuss the purpose of branding.
- How it’s working so well for Coke?
- And potentially, does that brand power give them more pricing power too?
I think branding is one of those things that a lot of marketers and business people don’t get.
In many instances people will say, small companies cannot focus on branding. Branding is where you have Megabox. You can invest hugely and hit all platforms like TV, radio, billboards, internet, whatever else is new nowadays.
One thing about their ads…
- They never talk about promotions in their ads on television.
- They never talk about pricing.
- Or, they never compare their prices to somebody else’s.
- They’re selling the lifestyle.
- They’re selling the experience.
- And, they’re selling the refreshment, the fun, and all those good things.
And of course, they’ve also got niches as well with their branding such as Christmas. There’s that story whether it’s true or not that Santa Claus wears red and white because of Coca Cola ads.
When you think of branding, you think of coke.
Their branding comes out of what they call their trade spend that sort of like a 50/50 split between advertising, pricing, promotions, discounting, and price positioning. That 50% of trade spend on marketing and branding, obviously has been doing a lot. As Aidan says they keep the two very separate.
One, I think the branding is there to set the brand positioning in the market, as the number one premium player in coke.
That’s been a repeated message with Coca Cola over many years that…
- They’ve got the expertise.
- They’re number one.
- And, they’re the go-to top of mind choice for any consumer.
That’s what they try to push with their branding.
I think to some extent it’s quite old fashioned nearly in all segments from toothpaste to household cleaners to washing-up liquids, and all those sorts of things.
Even 10 or 15 years ago there was the market leader that heavily promoted brand whether by Reckitt Benckiser. Or, these sort of people or we would push with a lot of advertising spend. Many of these have been undermined to some extent by discount supermarket chains and your brand competitors.
Coca Cola and the world of soft drinks is one of the stranger ones whereby the traditional I suppose the king of that market still is the king.
That’s what we want to discuss today. Why would that be? Why would it be that when I go to a cafe or something I generally don’t ask for a cola, you ask for a coke, don’t you?
I know that’s also in our markets such as VHS was before it became extinct. And also Hoover is still a very common word, even though probably people who don’t buy by Hoover when they’re buying vacuum cleaners.
It can be very prominent in other areas but coke seems to be the greatest example of it.
Coke branding message through the years
I think it comes down to that repeated messaging over years. That they’re the number one premium and that they’re the go-to sort of choice for a drink. That gets into the heads of consumers.
But at the same time over the past decade or so, has that brand message been diluted to some degree?
Potentially it has. Yes, it’s still strong we’ll still know Coke, but we may go to other types of drinks when we go to the café. We might not just order a Coke. We might choose a smoothie now when 10 years ago would have been Coke or Pepsi the whole bit.
Now people’s tastes have changed and I think that’s changed their brand messaging too. Because before, especially 80s and 90s it was very sort of companies centric. It was all about them. It was all about how great coke was and we had to fit in with the coke lifestyle and ecosystem as consumers.
But now I think things have changed. The tables are turned somewhat. Now it’s the consumers who have the front foot and coke is always catching up with that. Yes, we would still go to coke and think of it as a premium drink, but now there are other alternatives.
So that’s an interesting sort of dynamic to this brand positioning and brand power.
I personally think of the coke branding, it protects them on the downside.
I think obviously there are alternative drinks. Let’s give an example if you’re going to somebody’s house for dinner or even to a cafe or restaurant when you ask for some food and you ask for Coke or a Cola. If you see them serving their own brand of Cola, which from an own brand, logo and label. Potentially, you wouldn’t know the difference if you hadn’t seen that logo.
Some people would argue differently but we don’t know if you would or not depending on how much you like your coke. What I think would happen is if you saw them and you say… “ oh they’re cutting corners, they’re saving a few cents here and there on that drink”.
Which is in many regards a nondescript drink. What are they doing to the other? to the salad or the meat? What were the cutting corners elsewhere?
It almost insinuates that they’re just cutting or shaving making those little services here and there. That potentially you’ll see down the line.
To serve you a more premium soft drink, batch made soft drinks etc, that question doesn’t arise but Coke is such a generic product. It protects them and the downside where I think a lot of the competition is certainly in supermarkets.
We’ve seen over the years many alternatives attempt to combat the coke field. Virgin coke and Britain. And there have been more own brands that have not gained acceptance to the point where they’re acceptable to serve them in public or certainly at a dinner party.
I think Coke still dominates within the coke category.
However, they are the go-to choice whether it’s because of prestige, status, habit, whatever is the key, consumer driver here. But with changes in diet. I do believe that the bigger issue is with healthier alternatives, that’s the bigger competition.
I don’t think the brand messaging around that is clear and as a result, coke is acquiring a lot of healthier brands, waters, fruit drinks, the whole a lot. But the brand positioning around that is less clear than the brand positioning around, Coca Cola.
As a consumer, you don’t think of the alternatives that they’ve just acquired, the healthier alternatives you still think of coke. Which demonstrates or indicates that the brand positioning is still confused across their portfolio.
I think we often think branding is promoting the premier or premium sort of concept.
I think in this instance now that as time moves on to 2020. And, I almost think that the branding is to keep stability in that mid-market share to protect it on the downside.
To some extent, leave the top end of the market open to batch drinks and very niche sort of product or service. Where people are prepared to pay more to look cool or to look like they’re on the cutting edge of stuff with people. Which coke will never make you look at the cutting edge or make you look unusual.
So, to some extent, it’s a protection from society shooting you down. If you seem to be cutting corners and being cheap with your guests. It’s a strange model that would apply to any new company coming up.
Probably not, but they have that legacy business as a historical company such a strong brand. And then, the money is there to protect it and keep it in that mass-market area
Bottomline: Does the coke branding message still pretty the same as before? Does it affect Coke brand positioning?
I think, in the 70s, 80s and 90s, the brand positioning around Coke was really strong people used to drink Coke, much more than they do today.
It was competing with one or two alternatives based on superiority, expertise, and brand positioning and it did a really good job. However, the message now is still pretty much the same as it was then.
But now the market is saturated with new entrants. It’s more fragmented that people want different things and it’s much more consumer-led. So I think Aidan said about the prestige value of coke at a party. I think, again, even that is not as much as it would have been.
So, probably if you had a new entrant in Coca Cola and it had a new spin on it which was healthy. It was kid-friendly. It was good or kinder for kids’ teeth they weren’t going to ruin their enamel etc, Moms would be okay with that.
They’d be like… ” what is that new brand?”
They wouldn’t be thinking you didn’t give my kids a Coke or drink. I think they’d be like, actually, it’s better for the kid thanks for introducing this new brand to me. I think even in terms of status, that’s changed too.
Kids birthday parties can be a minefield if you think dinner party guests can be problems. Yeah, parents of kids at a birthday party can be even pickier than at a five-star restaurant.
Even so that if you have Coke at the party. Some people will be like… “ Oh, she’s got coke at a kids party is not that’s not very health-conscious”.
I think it highlights how branding and the value of a product are determined very much by the time, the place, the niche.
And all the details you have to dig into it the value drivers of that product. That can be value in one instance, could be negative in the other. Yeah, personally think I’ve covered coke as much as I want to cover it this week so I’m done.
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