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Coke Life - Strategy Proposal

Here's how I'd have launched Coke Life in Australia

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Coke Life - Strategy Proposal

  1. 1. Marius Donnestad Strategy Planner Launch Strategy Response
  2. 2. “I made this letter very long because I did not have the leisure to make it shorter” Blaise Pascal
  3. 3. Questions for the client 1. Can we please sample the product? 2. What are the production process like? Particularly with regards to the stevia plant? 3. What market research do you have that you can share with us (also for Coke Classic, Diet Coke and Coke Zero)? 4. More specifically, have you done any research on former customer, who’s left the cola category? Who are they and why did they leave? 5. What were the findings that led to the development and introduction of Coke Life? What were the business and market opportunities that were identified? 6. What have been your marketing strategies for the various test markets? 7. What have been the results and learnings from these markets? 8. How do you respond to negative publicity, for example to claims of deceiving the public of what is still a fairly large amount of sugar, and that stevia is actually a harmful ingredient, which only in 2008 and 2011 were legalised for food production in the US and EU respectively?
  4. 4. Identifying the challenge Advertising in test-markets and media coverage both in Australia and overseas have so far focused on Coke Life as a mid-calorie alternative, essentially positioning it on a scale of calorie content between Coke Classic on one end and Diet Coke and Coke Zero on the other. With each end of the scale offering established and popular alternatives, there is little to suggests that a significant market opportunity exists in the gap between these, despite slight improvements in taste. It is hard to imagine many calorie-conscious consumers choosing a mid-calorie drink when tasty zero-calorie options exist. Positioning Coke Life according to calorie content fails on a number of points, which come to represent the challenges for an Australian launch strategy: • Fulfilling the potential of Coke Life’s ‘natural’ credentials. • Finding a role within the wider cultural shift that triggered the innovation of Coke Life in the first place. • Creating a new market that doesn’t cannibalise sibling brands. • Leveraging the equity of the Coca-Cola brand.
  5. 5. Identifying the opportunity Coca-Cola Classic is about as mainstream as a brand can get, and for many years it was all Coca-Cola needed. With shifts in culture, however, came the need for innovation. Increased focus on health in the 80s led to the introduction of Diet Coke, targeted mainly at women, who at the time were the most health conscious - the focus being on losing weight by consuming fewer calories. When men followed suit and sugar was made the main culprit for over-weight populations, Coke Zero was introduced in 2005. Both have been highly successful and combined constitute 32% of cola sales in Australia (2013). Since the introduction of Coke Zero, concerns have been raised about zero-calorie foods and drinks, especially in the US. These options have been perceived as compromises, whereas calories have been replaced with chemicals and harmful additives. During the same period a new concept of what’s regarded ‘healthy’ has emerged. ‘Natural’ is a key part of this concept. ‘Natural’ is a key differentiator for Coke Life, and the opportunity exists to create a new category of Coke, targeting those for whom neither Coke Classic nor Diet Coke/Coke Zero longer appeal.
  6. 6. From this... NO CALORIES (1,5 Cal, 0 g. sugar) SOME CALORIES (136 Cal, 34 g. sugar) LOTS OF CALORIES (210 Cal, 53 g. sugar) Four’s a crowd. What is two distinct propositions - ‘original’ and ‘zero-calorie’ - will be watered out and blend into three shades of different calorie-content when Coke Life is added.
  7. 7. NO-CALORIES NATURAL ORIGINAL With three categories, consumers are offered three distinct choices: • The original and best (but lots of calories) • Zero calories (but artificial) • Natural (but with some calories) this
  8. 8. When subculture becomes mass culture In order to identify the people to whom Coke Life may appeal and why, we will first take a look at the cultural trend that created a demand for a natural variety of Coke. The last decade or so has seen a macro-trend sweeping the globe that has left few aspects of modern life untouched. While it can be explained by a number of factors, it’s likely to have been fueled in part by events such as 9/11, the GFC and an increased focus on the environment. As is the natural lifecycle for any successful trend, what started out as alternative lifestyles in various subcultures have now hit the mainstream, slowly affecting the lives of more and more people. As such it is no longer as much a trend as it is modern culture. For the purpose of this strategy response, we will call it the ‘Sustainable-Authentic’ movement, or lifestyle. Key words include: Authenticity Retro Ecological Ethical Artisanal Sustainable New Age Natural Sharing economy Local Second hand Independent Low-tech Conscious consumption Home-made
  9. 9. The new ‘healthy’ The ‘Sustainable-Authentic’ movement has been particularly impactful in the area of food and drinks, and from a singleminded focus on calories, the idea of what’s healthy has evolved to become more complex. Key words include: It is according to these concepts that Coke Life must be perceived as credible, and it is these concepts with which Coke Life must be associated. Organic Ecological Ethical Artisan Fresh Sustainable Native Real Local produce Non-processed Independent Hand-made Home-made Additive free
  10. 10. Who are we talking to The typical Coke Life customer will be someone who grew up drinking Coke Classic; switched to Diet Coke or Coke Zero when becoming aware of their sugar and calorie consumption, before cutting out colas all together (or at least reducing their consumption) after becoming skeptical of zero-calorie products. Most people simply prefer what feels safe and familiar. Most people don’t want to venture too far outside their comfort zone, they have no need to be on the cutting edge of innovation and culture. Which is why the majority of people are slow to take up a new trend, and when they do, they practice a light version of it. But few, if any, can resist being influenced by an evolving culture, and will therefore adapt to it, often subconsciously, in an effort simply to keep up with the world around them. Through no fault of their own their tastes and preferences evolve accordingly, and these are currently being defined by the ‘Sustainable- Authentic’ movement. While aspiring to a ‘Sustainable-Authentic’ lifestyle, and embracing elements of it, there are also many aspects they don’t relate to. They may love Masterchef, but think foraging for native ingredients is a step too far. They recycle their trash, but it doesn’t mean they want to walk down the street wearing recycled clothes. They may not want to pay $7 for a pretentious organic cola, but their familiarity with Coca-Cola means Coke Life is a brand that lets them practice a lighter version of the lifestyle without leaving their comfort zone. And it is not a niche market...
  11. 11. The ‘early majority’ To illustrate the size of the market, it can be helpful to apply the ‘Sustainable-Authentic’ movement to E.M. Roger’s innovation-adoption lifecycle. The movement has arguably reached a stage where it is now being adopted by the Early Majority. It is therefore this group that Coke Life will target for its launch. The early majority makes up around 34% of the population, and research will help us define this group further. As the movement trickles down to the late majority, so will the target audience of Coke Life expand/evolve.
  12. 12. Our Core Target Audience? MY KITCHEN RULES CONTESTANTS 2015
  13. 13. Key insights BRAND ‘Natural’ is perceived as being healthy irrespective of calorie content, opening up for a new category of cola. CULTURE The ‘Sustainable-Authentic’ movement has become main- stream, changing ideas about what is regarded ‘healthy’. CONSUMER While continually adapting to an evolving culture most people still prefer that which feels safe and familiar.
  14. 14. Proposition Coke Life offers an accessible and familiar alternative for the ‘Early Majority’ who practice a light version of the ‘Sustainable- Authentic’ lifestyle. So how do we best bring this proposition to life?
  15. 15. Communication challenge For many, the skepticism towards Coca-Cola will be impossible to overcome. However, amongst many former and existing customers we will find goodwill, and we will be able to leverage a familiarity with the brand. They want to drink Coke, they just need a little help to justify it. There is also an obvious conflict between Coca-Cola as a cornerstone of capitalism and the ethos of the ‘Sustainable-Authentic’ movement. However, while the movement had its roots among various idealists, we are targeting the mainstream audiences within it. Nevertheless, there is a balance that we need to strike in order to be perceived as credible also amongst this group. The role for communication becomes: Establish Coke Life as a credible natural alternative for mainstream audiences within the ‘Sustainable- Authentic’ movement.
  16. 16. DISTRIBUTION One of the key pillars of Coke’s marketing has always been their distribution strategy, best illustrated by former Coca-Cola president Robert Woodruff’s famous vision: “within an arms length reach of desire”. In the launch phase for Coke Life, however, it’s important to practice some moderation, as a clear and distinct distribution strategy is an effective way of claiming ‘Sustainable-Authentic’ credentials. Ideally, Coke Life will be distributed in different channels than Coke Classic, Diet Coke and Coke Zero. For example: • Fast casual restaurants such as Mad Mex and Grill’d instead of traditional fast-food outlets like McDonalds. • Harris Farm, Independent grocery- health food- and wholefood shops instead of Woolworths and Coles. • Farmer’s markets • Independent cafes The challenge is to find a balance between places our target audience actually shop and channels that convey the desired brand image. Strategic pillars
  17. 17. BRAND Authenticity is key to any brand who wants to be seen as part of the ‘Sustainable-Authentic’ culture. As a corporate behemoth Coca-Cola has arguably a bit of a job to do on this front. On the other hand, the company does also have a strong mythology: its origins as a medicine sold in pharmacies; rumours of containing cocaine; a secret recipe and being the inventor of the modern Santa Clause. Coke Life can tap into the equity of these assets when creating their own brand story. This story is likely to include stories about the rich history of the stevia plant.
  18. 18. MEDIA CHANNELS The medium is the message. To strike the right balance between ‘commercial’ and ‘alternative’, media placement becomes crucial. It’s not simply about reaching as many as possible, rather ads should appear in media that are somehow relevant to the ‘Sustainable-Authentic’ movement. Perhaps a mix of commercial properties such as Masterchef and My Kitchen Rules and more niche properties with target audiences predominantly among ‘early adopters’. While the latter may not be viewed by 100% of the early majority, a more niche and exclusive channel strategy will in itself contribute to building the brand.
  19. 19. DESIGN There is a wide range of verbal, visual and behavioural codes and cues that convey the various aspects of the ‘Sustainable-Authentic’ culture, e.g. ‘authentic’, ‘sustainable’, ‘ethical’ etc. Whereas niche brands and innovators may break with established conventions, it is important that a mainstream player like Coke Life understands and adheres to these. Merely talking about being ‘natural’ isn’t enough. Design, packaging and POS should all go towards telling a more specific story about these aspects of the brand. The recyclable bottle is a start.
  20. 20. PARTNERSHIPS AND INITIATIVES Coca-Cola is involved in a wide range of partnerships and community initiatives. Coke Life must identify those with some sort of credibility in and connection to the new world into which it is asked to be invited. For example: • Sponsor alternative sports like surfing and skating. • Sponsor cooking shows • Create relevant content • Community initiatives - community gardens etc • Partner with local restaurants • Something with yoga
  21. 21. Strategic pillars - Summary DISTRIBUTION Targeted. Limited. Independent. Exclusive. BRAND Leverage mother-brand to build its own mythology. MEDIA CHANNELS Building the brand more important than maximum reach. DESIGN Follow established conventions, codes, cues and behaviours. PARTNERSHIPS AND INITIATIVES Identify properties with credibility in the new world.
  22. 22. Cheers!