After a decade building the iconic 'Diet Coke break' positioning, Coca-Cola is boldly gambling the equity of its biggest UK brand to broaden its target audience.
With Diet Coke arguably superseding the original Coke brand as the most important product in Coca-Cola's portfolio, the rethink will prove to be critical in mapping out the soft-drink giant's strategic direction.
'In terms of global performance, Great Britain is the most successful Diet Coke market,' says UK marketing director Julia Goldin. In the UK, the global launch market for Diet Coke 22 years ago, the brand overtook sales of original Coke for the first time in 2003. This year's relaunch is the first sign that Coca-Cola - which is underperforming globally - is putting into action its global marketing recovery plan.
In November it announced a cut in long-term growth targets, and chief executive Neville Isdell, brought out of retirement to address sluggish sales in the US and Western Europe, said at the time: '2005 is not going to deliver the returns that will be satisfactory to me as a shareholder.'
Spend increase
The long-term target for annual volume growth was lowered to 3%-4% from 5%-6%. The company has decided to spend its way out of trouble, pledging to invest an additional $400m (拢216m) in marketing and innovation. Diet Coke is one of the first brands to benefit, with a 50% increase in its marketing spend to almost 拢10m.
Coke says the decision to scrap 'Diet Coke break' - into which Coke had ploughed about 拢60m, according to Nielsen Media Research - was based on the fact that the female-biased marketing no longer reflected the brand's true consumer demographic. About 40% of Diet Coke drinkers are male. A spokeswoman for Coca-Cola GB said that 'the social and cultural way people want to be talked to have moved' and the positioning was 'not very relevant now'.
The new ad strategy is considered better able to promote the growing range of Diet Coke variants: Diet Coke Lemon, launched in 2002, worth 拢30.4m in sales in 2004; Diet Coke Vanilla in 2003, worth 拢22m; and Diet Coke Lime, which debuts next month.
The shift to a campaign with a less gender-specific appeal, featuring an animated tortoise and the strapline 'Live fast, love life, feel good in your shell', has its critics. One senior soft-drinks marketer argues that, strategically, Diet Coke has moved too far from its roots. 'It has thrown away equity spent building up all those years of association as the 11 o'clock moment. It looks as if it has thrown strategy to the wind.'
To engage with the male market, Diet Coke is being promoted - alongside regular Coke and sister brand Powerade - as part of Coca-Cola's 拢14m sponsorship of The Football League, although Goldin says the sports association will not be heavily pushed. The brand is also retaining its links with film, developed under the female-oriented positioning, to keep firm ties with the core audience.
An interesting parallel is the rethink of the 47-year positioning of Nestle's flagship Kit Kat brand following a fall in performance against rival Cadbury.
In a similar move to Diet Coke's, Nestle embarked on an innovation programme and needed a broader positioning beyond its iconic 'Have a break' to allow more flexible product marketing. Simon Bolton, chief executive at Kit Kat's agency, J Walter Thompson, believes that the chocolate bar managed to retain its brand equity through a subtler transition to 'Make the most of your break'.
Benefits focus
Tim Duffy, chief executive of M&C Saatchi, the agency responsible for the introduction of the highly successful Lucozade Sport brand, believes that Diet Coke's new positioning will be effective because it concentrates on the healthy lifestyle message. 'The brand is overcoming the problem of moving away from its advertising equity by being true to the product,' he says. 'It is not an empty attempt to get to men.'
At the forefront of Coca-Cola GB's marketing plans is the fight against resurgent rival Pepsi, which has eaten into Coke's market share, especially in growth areas such as bottled water and fruit juice. The importance of Diet Coke to the future strategic map for the UK business is highlighted by the decision of Coca-Cola GB chiefs to make a bold stand against US pressure to launch C2 - the much-hyped mid-calorie brand which has not lived up to sales expectations - and instead focus on the growth prospects of Diet Coke.
With Diet Coke embarking on a new strategic plan, the biggest issue facing Coca-Cola is what to do with the main Coke brand. Outwardly there appears to be some convergence of strategy with Diet Coke's new line 'For those who love life' and Coke's 'Life tastes good'.
Claire Nuttall, consulting director at branding agency Dragon, wonders whether the convergence might be a danger for Coca-Cola. As she says: 'The main difference now is that Diet Coke appears to be being positioned more aspirationally, while Coke is perhaps appealing to a younger audience.'