Coke-Zero... The latest Loser from The World's Most Valuable Brand. By Stefan Paul Jaworski

It seems like history is repeating itself, or simply someone is not learning from past mistakes. Enter Coca-Cola's newest line extension blunder "Coke Zero."

After the Vanilla Coke fiasco who could possibly believe that the gang from Atlanta and their beloved ad agencies would creatively do it again? Well, as the adage goes: some people never learn. Even the world's most valuable brand according to Interbrand (valuing it at about $89 billion USD).

This time, the mistake borders more on the hilarious than on the sad: who would name a product "Zero"? Let's see what Webster's Dictionary defines "Zero" as:

Main Entry: ¹ze·ro
Pronunciation: 'zE-(")rO, 'zir-(")O
Function: noun
1 a : the arithmetical symbol 0 or <null> denoting the absence of all magnitude or quantity

4 : an insignificant person or thing : NONENTITY
5 a : a state of total absence or neutrality b : the lowest point

In other words, from looking at the above definition of 'Zero,' Coca-Cola has created for itself a brand and product of nothing, insignificance, absence of anything, or in simple American terms a "loser"... Amazing. Atlanta finally has gone off the Marketing deep end and created yet another line extension of the most world's most valuable brand—but this time dubbed it "loser." Hence, before the brand and marketing game even begins, Coca-Cola has literally dug a hole for the product as well as its core brand—and thus the company itself. And at the same time provided arch rival Pepsi with an unmatched opportunity to gain valuable ground in the never-ending brand cola war. At this juncture, I can only think of the wisdom that Al Ries gave us long ago that holds true throughout time (paraphrased): "big brands often get hurt because usually through their arrogance think they can make no mistakes and thus get away with anything" .

Like people, brands are watched, listened to, and judged- and the Coke Zero goof looks to both the public and media like a really stupid mistake has been made by the brand world's "golden child". Indeed, a mistake that could quickly take the luster off of the fabled Coke brand wizardry and mystique—especially to investors and shareholders who must be wondering what is going on marketing-wise after the Vanilla Coke fiasco.

For the last several decades, marketers and brand experts such as Al Ries, Phil Kotler, and Paul Temporal have demonstrated beyond doubt that there is very much a "science" regarding marketing and brand building with consistent laws operating—a key concept being/involving positioning. A brand, before even entering a market, must carefully define and carve out for itself a unique identity and position to occupy (especially in the mind) that resonates positively with targeted customers and their society—and try and keep it at all costs. In extending the brand via new products (line extensions) or into new markets, this same carefully constructed position must be considered, maintained, as well as guarded—the extensions must not be allowed to damage, dilute, or negatively effect the core brand or its position at any cost. With Coke Zero, it seems that all marketing and brand logic has purposely been thrown out the door and an almost "anti -brand, anti-marketing" (let's damage the core brand Coke at all cost) rationale been adopted—as no seriously managed brand in this day and age would make such a significant error in judgment.

Of course, Pepsi are making the best of it—reveling in the Coke Zero mistake. Any opportunity to have an arch rival self-inflict damage to their core brand is a wonderful opportunity to take advantage of. Case in point: in London UK, the famed red, double decker buses everywhere are carrying ads re-positioning Coca-Cola (via Coke Zero) as old news, not with it, worthless, a loser, a joke..."a zero." The same for New York and most global centers. And there is nothing Coke can do about it. The Pepsi attack ads are basic, but very effective in the message they are conveying: showing an "uncool" image such as a moose labeled "Zero" on the one end of a thermometer with the other end having a "cool/hip" image of a fox, beautiful girl, etc. labeled "Max"(Pepsi's Product) with Pepsi's logo. In other words: "Coke Zero is Zero, a loser, nothing, uncool... move over to the Pepsi Max end which is cool, great, hot, hip, a winner!" Not good for a product line extension that is so close to its corporate core brand: carrying the famed Coca-Cola or Coke brand name.

For myself, the Coke Zero problem also lies in the nature of the product itself as there is confusion: why have Coke Zero, a product created to remove the negatives of sugar, when already such a product exists in the form of Diet Coke? There may be some males that may view Diet Coke as a female drink, but they are a minority; and besides, what male would switch to a brand for losers? On the surface, what is the difference between Coke Zero and Diet Coke? None really. Hence, here we have a product released without any real basis of difference—except semantics maybe—causing serious market and consumer confusion. In essence, to me, Coke Zero is literally a baseless line extension product that also makes a literal fool out of the core brand (Coca-Cola) whose name it is using for extension credibility. A vicious brand damaging circle in reality.

Finally, I also want to point out the damage in regards to the "internal organization" that brand mistakes such as Vanilla Coke and Coke Zero have, which is rarely spoken about. All successful brands are as much about "Internal Branding" (especially identity, personality, emotions, perceptions, image, and associations) and bonding as their more visible external aspects (such as advertising, PR, promotions, etc.). With brands literally being "living things," the Internal brand aspect is indeed as much a creature of "self fulfilling prophesy" as it is skill. If brand workers perceive the brand as a winner, they act that way—the same if it's a loser. Hence, the result of a company launching or experiencing even a single "brand loser" can have very real, even devastating, effects on the company and most importantly its people. No one likes to be on a losing team- real or perceived—and the more losses, the deeper the team digs itself into negativity spiritually, emotionally, and ultimately in terms of reality (self-fulfilling prophesy). Experience a series of very embarrassing, global scale brand errors such as team Coke and become the butt of industry jokes, the Press, and every major marketing publication possible, and the negative consequences on your internal brand culture (and team) can be enormous. Possibly enough to demoralize and damage the brand seriously in terms of morale, performance, and ultimately brand pride. The same can be said for the brand position: too many losing games can demoralize your audience and change their perception of you forever, as well as future generations through story-telling and passing-down of perception ("we are Pepsi People as Coke has been a loser for years") . Ultimately, brands are about relationships and at the core of these are Identities—carefully established, tested and tried personalities that constitute the bulk of the intangible brand equity and value that can make up to 90% of a brand's market value (usually judged via market capitalization). Creating brand value is a highly skilled, timely, painstaking, and effort intensive endeavor that does not always pay off—as so many things can de-rail the entire process. It can also be a very fickle thing, in the sense that one large mistake or miscalculation occurring just once, or several smaller ones in a row, can wreak havoc and bring down the whole house of cards as Perrier, EXXON, Firestone, Calvin Klein, and Benneton have found out before... and Coke is finding out, again.

Stefan Paul Jaworski, Masters Degree Marketing, is Partner & Global Brand Officer for Studio X-Temporal Global Brand Consulting—a multinational Brand and Marketing Strategy leader whose clients have included Anheuser-Busch, Monsanto, Kraft, Nabisco, Sea World, FCB, Citibank, Burger King, Jack Daniel’s, Ralston Purina, TWA, Hewlett Packard, Apple, Bosch, Jordache, John Deere, JBL, Exxon, Polar Wave, Energizer, and the nations of the UK, Dubai, Malaysia, and many others. SXTC is responsible for 16 industry-leading Brand and Marketing books published globally. Mr. Jaworski is the author of 2 regarded Brand Strategy books, 22 Brand Strategy articles, and a speaker on Brand Marketing and Brand Management Strategy.

www.sxtcbrand.com

Reviews:

Dear Stefan:

Great article. It’s sad. Coke spends all its time on line extensions while the cola category keeps sinking.

All the best.

Al Ries (Feb 19, 2007)

Comments

I absolutely agree!! I could not understand the rationale behind extending the brand with an identical product. Not only is Coca Cola Corp showing that Coke Zero is worthless, but haven't they also diminished the value of Diet Coke in the process? Great blog!

Posted by: Dan Bowman | 11/27/2006 at 08:04 AM

A nice piece of work. This site challenges me as both a brand builder and marketer. Why is it so hard to find? A question we must ask ourselves, don't you think?! Possibly disgruntled advertisers, brand managers, and others who have created an "aside" forum to say what they really think and fear to say in THE interstellar ad and corporate worlds! Or Prophets of a new, PURE message that's been blunted and mis-delivered by Interbrand, Burnett, and Fallon!

I am DEE-LIGHTED and excited by this blog. What are the exact addresses of these guys offices cause if they are in New York I am DEFINITELY paying a visit with a big bottle of bubbly, a hearty handshake, and some sterlized, academic brand books to burn! And of course a stern warning (a plea even) not to break my heart by watering down the cause to the pressures and pleas of the "powers that be" in the ad and marketing world.

Posted by: SVARRO | 12/31/2006 at 01:43 PM

Bang on! My only other comment is that with such brand and marketing "heavies" as Jaworski and Ries writing on this how could it miss? Maybe challenge me the Other way... how it could work!

Posted by: Garry | 03/29/2007 at 01:06 PM