This is very big news for marketing. The Coca-Cola Company (TCCC) may be converting to a "long tail" model marketing.
Given its pending portfolio of coffee soda, gourmet teas and Godiva drinks, Coca-Cola is expected to expend more time and energy on low-volume, high-margin categories than ever. (Hein, in Adweek, today, ref. below)
As Hein notes, that TCCC has a history of creating small brands and then losing interest in them. But it now appears to be acting in earnest, with a slew of new launches, including Coke Blak, Gold Peak Tea, and Godiva Coffee.
It’s hard for a company like TCCC to supply the long tail. The corporate mind set is shaped by the sales volume associated with Coca-Cola and Diet Coke. Anything less looks like a waste of time.
But the market reeducates us all. Big brand erosion appears to have persuaded them that a "long tail" approach is now obligatory. In the words of Caroline Levy, a gifted analyst at UBS, "I believe they understand they have no choice now."
But here’s the kicker. There are moments in the Adweek article where it sounds like people inside and outside TCCC universe believe that this the new brands are being driven by nothing so much as the health considerations attached to sugar and carbonation. This would mean that TCCC would be making the right move for the wrong reason.
Surely, people are moving away from CSD (carbonated soda drinks) but just as clearly, never will be see monolithic brands like Coca-Cola and Diet-Coke rise to take their place. This is because the market has fragmented, plenitude has exploded, and we will never put Humpty Dumpty together again. What we are looking at is a long tail market, as Chris Anderson would call it, in which niches exist not because consumers are in flight from old "unhealthy" brands but because their taste and preference is busting out in all directions.
Is TCCC using long tail language? No, according to Hein, they are multiplying products to speak to various "need states."
Rather than look at beverages on a category by category basis, Mary Minnick, head of marketing, innovation and strategic growth, has said Coke is looking at how beverages fit into consumers lives. She has described the need states as, "Enjoyment today," "feel good today," and "be well tomorrow."
I have never been crazy about the "need state" model. It colonized vast portions of the marketing world, and if it helps a marketer model diversity of taste and preference, that’s all to the good. But finally, it does not encourage a systematic cartography of the long tail. If TCCC thinks it is innovating to address a "feel good today" need state, it is prevented from seeing that it is in fact talking to the newly various America. And this, even more than what counts as acceptable sales volume, is one of the great challenges for TCCC is an era of plenitude.
Will TCCC embrace a long tail model? In what was perhaps the most expensive "cost saving measure" in the history of the CSD industry, TCCC CEO Douglas Daft some years ago fired the Atlanta marketing team. This made it difficult for the corporation to practice marketing at the top of its game. The good news is that Neville Isdell is rebuilding this team. So one of the necessary conditions of transition is now in place
There is evidence of a robust and leading thinking happening inside the corporation. The "light it up" campaign shows intelligence and courage TCCC hasn’t exhibit in some time. (Though even here the results are uneven. "Haircut" was wonderful. "Boy kisses girl" was cliched.)
Let’s cross our fingers and hope that TCCC installs a "long tail" model.
Hein, Kenneth. 2006. Strategy: Coke Seeks Relief (Again) By Scratching The Niche. Adweek. March 06, 2006. here. (subscription required)
McCracken, Grant. 2006. Lighting it up at the Coca-Cola Company. This Blog Sits at … February 17, 2006. here.