The Ground-Breaking article by SXTC's Stefan Paul Jaworski with contribution from Al Ries of Ries and Ries (one of America's most famous Marketers and the inventor of "positioning") that correctly predicted the damage and eventual failure of one of Coca-Cola's largest new product introductions ever—three years before it occurred! Vanilla Coke.
Hailed by global media, leading marketing and brand experts, academics, and brand managers, read "Why Vanilla Coke Won't Work."
Prologue (2009):
Coca-Cola, despite the tremendous losses and damage incurred by its first Vanilla Coke foray (2002-2005), decided in 2007 to "re-introduce" this failed, sub-branded product into numerous countries including the USA, Canada, New Zealand, and now China. Of course, the rules of brand and marketing have not changed and the chances of another core brand diluting Vanilla Coke product and sub brand "biting Coca-Cola in the behind" are even greater than the first attempt in 2002. Indeed, memories of the painful "New Coke/Classic Coke" fiascos come to mind. Coca-Cola seems to enjoy doing things the wrong (and hard) way with the world watching carefully.
Here we go again...
-Stefan Paul Jaworski (October 2009)
October 18, 2002
(St. Louis, MO.) Rewarded your curiosity, yet? Well, if you have, chances are that it will stop there or not far after—and so will Vanilla Coke sales. Amidst sales stabilizing in its very mature American market, Coke has decided to add yet another line extension of the flavor type—this one called “Vanilla Coke.” With its net operating revenues and market share stagnant over the last decade, my hypothesis is that this maturity brand decided, via its consultants and advertisers gleeful advisement, that it had to “make some noise”—or as DDB would put it “Talk Value”; or mouth-action or buzz. And, as most advertisers believe, what better way to liven things up than a line extension and the resulting campaign.
Or is it? In an age of modern brand strategy science, one of the things we have come to learn is that more often than not brand line extensions are full of dangers and unknowns—especially regarding the areas of brand equity, focus, identity, and position. Initial sales of Vanilla Coke may be high, but brand strategists such as myself are trained to look at a brand not just short term but also in the long (often in decades). My question at this point is, “was Coke threatened by a vanilla flavored brand endangering its position as cola market leader”—a super cream soda maybe? After research, the answer seems not. Hence, the “let’s make some noise” theory is most likely at work.
But why Vanilla? The vanilla flavor choice no doubt has its origins in the Coke “float” we in the USA have all come to know and love over the decades—vanilla ice cream, some Coke, and the residual taste of the two is not bad. But for myself, not good enough to want to base Coke, itself, on or jeopardize the iconic brand name! So confusion no doubt will be a major by-product no doubt. The reality that concerns me most is that Coke has never learned its lesson about “playing around with line extensions”—just look at Cherry Coke, and no one will ever forget the New Coke fiasco that could have cost them the company. Yet, Coca-Cola’s marketers, advertisers and consultants “of the moment” just don’t seem to have an internal fear, or shall we say a healthy apprehension, of playing with key aspects of their brand’s identity, position, and/or equity.
As Marketing and brand strategists have known for years, thanks to the pioneering work of guru Al Ries, line extensions can wreak havoc with any brand’s equity in multiple ways both short and long term—many of which are unpredictable. I see Vanilla Coke not even valuable as a short term “buzz creator”, as the buzz that it creates will only assist in steering core brand Coke away from its deeply entrenched core values and historical position in the consumer’s mind. Remember, that cream soda in consumer’s minds is usually always a light cola (clear, yellow, or clear pink at worst)—not a “dark cola like Coca-Cola! In other words, such efforts contribute cumulatively to making Coke “less Coke” and more of “something else” (what else who knows?): literally, redefining what Coke is from identity to position to core values. For me, “core value drift” is one of the most dangerous things a brand can have happen as the effects are generally devastating, initially subtle, kill relevance identity and position, and carve a wedge of confusion between brand and the consumer, market, and society. Vanilla Coke over time can very easily do this to the core Coca-Cola brand and its most valuable asset: its vital brand identity (and a primary source of equity). Also, adding in the extension of Vanilla Coke increases the complexity of the overall brand architecture- something not conducive to focused, simplified and effective brand management or consumer interpretation of the brand. Left unchecked, a best-case scenario is it causing internal brand and strategic management confusion; at worst, and most likely, customer confusion is the most dangerous result.
Indeed, consumer minds are very limited in regards to the number of products using a single brand name before they lose the meaning of the brand and what it stands for. “Too many ‘Cokes’ lead to a Pepsi” may be a dreaded, future tagline for VC. In a world of too many brand choices vying for a place in the marketer’s holy grail (“the evoked set”), the market leader does not want to lose this vital position in the consumer’s head because of confusion from offering too many product versions under one brand name. Vanilla Coke, for me, is the “one too many” product.
In my experience, line extensions expose the core brand to the danger of being degraded and diluted: “what, there was something wrong with the Coke I have been drinking for years so you added vanilla”, or better yet, “don’t tell me, another taste challenge told you Coke was second, so you added vanilla”. I also see Vanilla Coke having the potential of adding to core brand Coca-Cola the problem of not being taken seriously- at best I vision VC becoming another “distant”, “novelty” brand extension a la Cherry Coke and its diet version. At worst, the brand within a year or two could end up a rejected disaster like New Coke—something that would directly transfer negativity to the core brand’s equity.
My bet is that after some time (a year or two), with sales dropped off significantly and the “novelty” gone, Vanilla Coke will be quietly “retired”, or reborn in some third world market. Either way, adding another flop doesn’t add to core brand Coke’s credibility, its leadership position, or its reputation as a marketing powerhouse that manages brand equity well. A very interesting, but unlikely, twist could be where VC would backfire on Coke by igniting a taste for the original true vanilla flavored sodas such as cream soda or root beer—“VC gives rise to A&W resurgence” (which ironically is actually happening). In the world of line extensions and advertising on this scale, I have found that anything can happen- and has.
Famed marketer Al Ries, brought up a good point for this article, “enjoyed your article on Vanilla Coke which is right on target. We both believe that what is especially bad about the line extension (Vanilla Coke) is that they are using millions of dollars to advertise the extension when they should be using that money to promote the core brand.” Indeed, the priority of any company is to build, defend, enhance, and strengthen their core brands. Putting valuable resources into such a flimsy extension is leaving core brand Coca-Cola wide open, and a waste of valuable resources. As for the value of mouth-action or talk value that the advertisers and some executives speak about? No doubt, any failure of Vanilla Coke certainly will increase the “talk value” or “mouth-action” of core brand Coke sadly as “another blunder by Coke”—decreasing both brand equity and confidence in the Marketing, and overall Brand, decision making of company management.
I am curious.
—Stefan Paul Jaworski
Reviews
“Stefan, great article. I wholeheartedly agree with your premise: Vanilla Coke is another brand fiasco in the making. Once again, I think your insights are bang on. Great work.”
-Patrick (Allossery). The National Post
“Stefan, well done with the Vanilla Coke article! Coke won't like it of course, but I think they are making quite a few strategic mistakes of late. Over in Asia, people are struggling to understand what Douglas Daft's edict “Think Local, Act Local” really means for a global brand.”
-Dr. Paul Temporal (Oxford PHD). Leading Global Brand Expert, and advisor to many of the world's top brands as well as nation brands.
“Stefan…enjoyed your article on Vanilla Coke which is right on target. What is especially bad about the line extension is that they are using millions of dollars to advertise the extension when they should be using that money to promote the core brand.”
-Al Ries. CEO Ries & Ries. The Inventor of "Positioning", best-selling global Brand and Marketing Author, and one of the World’s most famous Marketing experts in Positioning, Brand Strategy, and Focus.
Stefan Paul Jaworski, Masters Degree Marketing, is Brand and Marketing Strategist for North America with Studio X Branding-Temporal Global Brand Consulting- a 20 year old, leading global/multinational Brand Marketing Consultancy. Clients have included Coca-Cola, Anheuser-Busch(Budweiser), Motorola, Panasonic, Kao Cosmetics, Intel, TDK, The Hard Rock Café, Hewlett Packard, Apple Computers, Bosch, Exxon, and Microsoft, as well as governments including New Zealand, The UK, China, and Malaysia. The firm is responsible for industry-leading articles, cases, white papers, and 11 of the Marketing world’s most respected brand strategy books.
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