Fizzling out

Why did Derby respondents pan Vanilla Coke?

Elvis has left the building." At the height of the rock 'n' roll era, the expression was part of King folklore and repeated at all shows. Nowadays it's a catchphrase that means "the show is over".

It's particularly apt for Vanilla Coke, whose high-decibel promotions and commercials showed actor Vivek Oberoi aping Elvis.

Just a quarter of the respondents in the ninth Brand Derby considered Vanilla Coke one of the successful brand launches of the past year. On the other hand, 67 per cent felt it was "not successful", with 32 per cent of the respondents considering it the "least successful" brand launch.

Ironically, "irrelevant" advertising was cited as one of the reasons why Vanilla Coke was considered a failure. The other issues raised by the respondents included "wrong positioning", "no connect with Coke as a brand" and "bad product".

That can't be welcome news for Coca-Cola India, which introduced Vanilla Coke in April 2004 as its first flavour extension of Coca-Cola (a brand extension, Diet Coke, was launched more than five years ago). Globally, too, Vanilla Coke is Coca-Cola's fourth extension (it was introduced in the US in 2002), after Diet Coke (also called Coke Light) in 1982, Cherry Coke in 1985 and Diet Coke with lemon (2001).

Contrary to what Derby respondents believe "" "no research done on Indian palate" and a "mismatch of target group and communication" "" Vanilla Coke is the product of extensive market research by Coca-Cola. The finding that urban consumers are fond of "floats" "" ice-cream in cola "" was the trigger, aided by the positive response to Vanilla Coke in south-east Asian markets such as Hong Kong and Thailand.

According to a report on Coca-Cola's global website, Vanilla Coke's sales in Hong Kong exceeded expectations by 60 per cent in just one month. ("Not just plain vanilla," The Strategist, June 15, 2004) Coca Cola pulled out the stops for Vanilla Coke's launch. Television commercials for the product sported a retro look and feel, which was particularly popular last year. The 60-second ad, which aired on youth-centric channels like MTV, Channel [V], HBO and AXN, urged consumers to "try something new and different".

There's no doubt that the TV ads and outdoor promotions were successful in generating hype and awareness for the brand. "Wakaw" (a distorted abbreviation of Vanilla Coke, used in the ads) quickly caught on as a slang for "cool and different" "" all that Vanilla Coke stands for. Then, research shows that the urban youth segment is the most willing to try new variations in beverages. Flavours like vanilla still find favour mainly in urban markets.

Which is why Vanilla Coke was priced within reach of the regular cola: Rs 6 for 200 ml (Re 1 more than Coke), Rs 8 for 300 ml and the PET bottle at Rs 15 for 500 ml (against Rs 15 for a 600 ml bottle of Coke).

The fizz soon turned flat, though. The comments of the Derby respondents aside, retailers too point to slower offtakes of Vanilla Coke. According to a retailer in the south Mumbai area, the product's sales have been rapidly dropping.

Consider this. While he was selling about 48 bottles of Vanilla Coke a day initially, three months after the launch, his monthly sales has dropped to 24 bottles. And now, just eight months after the launch, he manages to sell only four or five bottles of Vanilla Coke.

Coca Cola refutes all charges of failure "" or even a lack of success. According to a statement issued by the company, Vanilla Coke has been launched in 20 cities against the initial target of 10.

"The brand has attracted consumer pull from almost all the markets. It is bringing in the expected volume and market shares and we continue to promote it as per our plans," says the statement.

It adds: "The plan was to specifically target for the 'season' and we launched Vanilla Coke in the season to create excitement in the cola category and offer the youth a new flavour. And, while Coke has a much broader audience, Vanilla Coke was sharply targeted at teenagers in metros."

Derby respondents clearly felt differently. According to them, Vanilla Coke was out of context and had no connection with Coke as a brand. Vivek Oberoi as a mock-Elvis brand ambassador "" complete with bell-bottoms and exaggerated sideburns "" was particularly criticised.

"With young, evolved, aspirational and tech savvy youth as the target audience, it was a clear mismatch," was one of the comments.

For their part, retailers believe the taste "" sweeter cola with a hint of vanilla "" was the culprit. "Not too many people could remain hooked to a drink that smelled like an ice-cream," says a retailer.

That viewpoint found an echo even among Coca-Cola India officials. Says one, "There is an initial craze for everything new. But then people get bored. And this is the exact fate of Vanilla Coke."

The company, however, defends the taste. The company statement states, "Rigorous consumer testing has shown the vanilla taste to be distinct. It is hugely loved by consumers. In fact, consumer likeability and acceptance of the flavour was among the best-ever scores for any product as per our research."

But why did Coca-Cola introduce a flavoured cola? Market sources and company officials say one of the reasons may be the falling market share of Coca-Cola as a brand, although they don't divulge numbers. If that's true, product extension may have been been the best possible option.

Not that Coca-Cola India's track record with product extensions has been promising. In 2001, the company launched Fanta watermelon, a variant of Fanta orange "" and withdrew it within six months.

A few months later, in July, it launched another variant, Fanta green apple "" and took it off the shelves within four months.

But that may be more a quirk of the market than any shortcoming in marketing. "People don't fancy changes in soft drinks for too long. It is strictly a fad," says a market watcher.

To be sure, earlier forays into flavoured extensions by other players also didn't quite set the carbonated soft drink (CSD) market fizzing. In 2002, Pepsi launched two brand extensions of its flagship cola brand "" Pepsi A-ha and Pepsi Blue.

While the former had to be phased out owing to its slow offtake, the latter was launched as a limited edition to leverage the association with the Cricket World Cup.

That's not all. Over 60 per cent of the CSD market is still dominated by regular, black colas.

The rest is split between flavours like orange (dominated by Coca-Cola's Fanta and Pepsi's Mirinda), lemon (Coca-Cola's Limca) and clear, carbonated drinks like Coca-Cola's Sprite and Pepsi's 7-Up.

According to industry observers, flavoured extensions of master brands constitute a negligible part of this segment. Derby respondents clearly think so too.