Can Packaging Innovation Revive Carbonated Soft Drink Sales?

Fast Company features a story this week about Coke's innovative new "sharing can" featured in the video below.  It makes you wonder:  Can packaging innovation revive sagging carbonated soft drink sales?  In developed markets, health and wellness concerns, coupled with many new alternative beverages, have dragged down sales of colas.  We have seen packaging energize other mature brands in beverages.  Take, for instance, the Coors Light cans where the blue color of the Rocky Mountains on the bottle indicate that the beer is very cold.  Coors Light rode this focus on "cold" to a stronger market share position in the US beer market - a market where sales have been relatively flat for some time.  Of course, Coors Light didn't just innovate on packaging... they truly have owned that market position as the "cold" beer.  The combination of positioning and packaging is what made their strategy successful.  Can Coke pull something similar off in the days ahead?

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Dove Real Beauty Sketches

This Dove "Real Beauty" online ad has created quite a stir.  You can read about the response to this campaign here.  Dove certainly seems to have struck a chord with its customers.  The fact that some people have criticized the ad doesn't seem to concerning, as most Dove customers seem to be responding positively.  The attention that it has received seems to endorse the view: there is no such thing as bad publicity.   Nevertheless, there's a big question remaining:  Will this attention turn into additional revenue for Dove?  Can the engagement with customers translate into sales in the supermarket?  

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New Thoughts about Brand Extensions

For years, scholars and consultants have argued that companies should stick to brand extensions that fit closely with the core brand image and identity.   The logic goes as follows:  It's ok for Coke to make Diet Coke, but it does not make sense for the firm to offer Coke-branded laundry detergent. 

Researchers Tom Meyvis, Kelly Goldsmith and Ravi Dhar noticed something interesting though.  A few firms did extend their brands successfully in a way that seemed to fit much less closely with the core brand's image and positioning.   If these firms had succeeded, then perhaps the notion of fit needed more clarification.  

The scholars conducted an experiment, and in that study, they found that visual cues make a difference with consumers.  Seeing the physical product, as opposed to just hearing about it, can cause customers to genuinely consider a brand extension that appears to be low fit.  According to Kelly Goldsmith, “When you give people pictures, preferences shift because [people] are focused on quality—they are more interested in quality than fit.  Whereas when you show the brand concept without pictures … the reaction is more focused on fit than quality. Allowing product comparisons leads to the same results.”

Goldsmith explains the practical implications of the study: “If you get your brand-extension concept out of the lab and into the store, all of those [benefits from visual cues and brand comparison] are taken care of.  If you are a brand like Nike or Häagen-Dazs, or one of these very large national brands associated with quality, and you want to make money by extending that very successful brand even further—to new [but] lower-fitting categories—what our research shows is that you really need to show people what that product looks like and show it to them in the context of other brands in that category."

I find the research very interesting.  I still believe firms need to be very attentive to fit when it comes to brand extensions.  However, the notion of offering visual cues, sampling, and physical displays does seem to make sense.  Those tactics certainly do help a consumer understand and appreciate a new product offering that may not seem to fit with a brand's prior identity. 

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Do Olympic Sponsorships Make Sense?

Knowledge @ Wharton has a special report on Olympic sponsorships this week.   Do these sponsorships make economic sense?   Some experts argue that sponsorships don't offer an immediate benefit, but they have a positive long term effect on brand equity.   That may be the case, but hopefully, firms would experience beneficial short term effects as well.  Unfortunately, that may not be the case. University of Nebraska-Lincoln Professor Kathleen Farrell and her co-author W. Scott Frame conducted a study of the impact of sponsorships on the market value of firms.  They found that stocks tended to fall slightly during the period in which firms announced that they were sponsoring the 1996 Olympics. 

Perhaps even more interesting are two reports by marketing firms.   Gallup and Robinson found that most people cannot identify the official Olympic sponsors.   Another report by marketing agency Jam found that Nike was the brand most mentioned by consumers as an Olympic sponsor, but the firm actually is not sponsoring the London Olympics! 

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