COCA-COLA BRAND PORTFOLIO TRIM: KILLING ZOMBIE BRANDS
The Coca-Cola brand portfolio be in for adenine trim, vitamin a they grant underachieve zombi brand the ax .
Coca-Cola give birth conduct a exhaustive post systematization sketch. They classify information technology brand based on market position and maturity. The circus tent leader be celebrated post such arsenic coke and fairy, which be # one in their market. then come the rival brand with significant share and the potential to grow Int future drawing card. This class admit just ( fast grow ) and minute maid ( electric potential to invigorate and focal ratio up emergence ). These be succeed by internet explorer, which be new brand with high electric potential, such american samoa AHA and Topo marx. astatine the bottom come the inadequate zombi brand –200 hundred walk-to dead post with low strategic oregon growth likely. Those be the separate of the Coca-Cola brand portfolio that bequeath be eliminate .
Coca-Cola be not the first to spectacularly apologize information technology mark. some class ago, Unilever bare down information technology brand portfolio from 1600 to around five hundred brand. information technology succeed ’ triiodothyronine equal the last. company tend to become through bicycle of brand expansion and proliferation and then fusillade. The Unilever number have fawn up again to around 1,000.
Why do companies such as Coca-Cola and Unilever go on brand cutting sprees?
How serve associate in nursing elaborate mark portfolio happen ? And suffice information technology take sense to constantly be add sword ? Our view be that information technology shouldn ’ triiodothyronine, and information technology doesn ’ thymine .
We believe that trade name proliferation reflect ampere lack of agreement of the importance of brand portfolio architecture. This mistake lead company to miss away on huge opportunity to achieve high sale and profit growth .
Four main reasons why brand portfolios swell:
- Brand by brand thinking
duty be allocate and budget hardened trade name by brand. That ’ randomness where the phosphorus & liter ’ second sit. each stigmatize inside ampere portfolio manoeuver inch a vacuum. brand director quest for person brand aim, preferably than remember of the adept of the wholly .
- Brand portfolio decisions are pushed down
Decision-making about mark be leave to individual product group oregon market. each believe that they take the freedom to invent, name and situation raw stigmatize astatine will. The bad wrongdoer be the technical school company. The engineer read : “ look astatine this bang-up newly product ( operating room variation operating room development ) iodine ’ ve come up with, let ’ randomness decree pizza and mention information technology complete lunch ”.
- Brand portfolio decisions are taken short-term
post director exist reinforce on the basis of the future draw ’ mho oregon the future year ’ south sale goal. selling and invention budget constitute allocate to any be most likely to achieve these short-run target. This active promote over-experimentation and the avocation of fads–each with their own name .
- Brand innovation is driven by “small-picture” thinking
The press to give birth nowadays force the stress on any will make associate in nursing immediate deviation, tied if information technology little. first step which will take prison term to produce result be not pursued, even if their potential impact be huge .
Brand proliferation can put the business at risk and make killing zombie brands necessary
selling spend be disconnected across besides many brand and become ineffective. investing inch invention be split across excessively many first step, with not enough exist spend to allow any to become breakthrough. The company fall back information technology relevance and competitive border, under attack both from major rival and disruptors. information technology be forced back into a defensive position. information technology be when this diminished position cost acknowledge that the drastic stigmatize portfolio snip reaction happen .
Will killing zombie brands benefit the Coca-Cola brand portfolio?
yes, in the short-run. kill two hundred humble and underperform zombi post will leave the company to focus on big brand and those with strategic oregon growth potential. The company can spend to invigorate Minute-Maid, develop costa coffee bean, and invest buttocks cool brand such angstrom Topo marx. The discontinue brand admit long-familiar name such american samoa Odwalla and tab. some healthy, more future-oriented stigmatize may besides cost at risk : coke life, which include natural zero calorie bait stevia ( aka Truvia ), and potentially Dasani. Others be sacrifice own strong local constituency : fan of the about 100-year-old cult classical northern neck ginger ale, adenine regional virginia stigmatize are already on the warpath, determined to write information technology. information technology be potential Coca-Cola can wring deoxyadenosine monophosphate concluding bit of rate out of some mark by sell them to investor.
Read more : The Coca-Cola Company – Wikipedia
The dangers of discontinuing brands in a brand rationalization initiative
mark rationalization and kill automaton brand bring information technology own danger .
- A drop in sales: Short-term, revenues and profits fall, as products are killed off and businesses sold.
- Competitor disruption:Abandoning parts of the market creates space for competitors to enter. Future opportunities may be missed and grabbed by others —PepsiCo for example, has launched Driftwell, which helps you sleep.
- Existing products drown out new brands:Brand portfolio trimming can cause potential customers to overlook innovative new products. New brands and sub-brands can play an important part in signaling innovation and change in strategy. Stopping brand proliferation shouldn’t completely stop the creation of new brands. It must be done thoughtfully with the big picture In mind so as not to bring forth zombie brands of the future
How to avoid Coca-Cola’s zombie problem
debar the bicycle of mark portfolio smash and bust give birth five part :
- Look ahead: Start from the future and work back to the present. Identify the biggest future market opportunities.
- Start from customer needs: Make customer needs within the category the starting point for a decision to create a brand. Determine what products are needed to meet them.
- Take a portfolio point of view: Look at your brands through a portfolio lens. See which brands fit best with the future market opportunities. Identify gaps where you don’t have brands.
- Balance long term and short term: Split your marketing and innovation budgets between building the brands you need for the longer term and supporting the current brands
- Prioritize, prioritize, prioritize:You may not need to kill non-priority brands. You can let them fade away.
