It's case study time in this month's management briefing. In this, the penultimate part of Richard Woodard's look at rebranding, we see the right - and the wrong - way to do it.

One that worked…

Highland Park

Talk to a number of whisky enthusiasts about single malts and the name Highland Park will spring readily to the lips of many as one of their favourite products – and yet, this brand was something of an under-acheiver until about five years ago.

The kickstart for a radical rethink was spirits commentator Paul Pacult’s description of Highland Park 18-year-old as the best spirit in the world – and the decision by brand owner The Edrington Group to invest GBP18m (US$28.2m) on elevating the brand out of the shadow cast by stablemate The Macallan.

Getting it right was a task that fell to global brand controller Jason Craig (who has since moved on to reinvigorate blended Scotch Cutty Sark). “I felt I was left with fantastic liquid, but average packaging,” Craig said months after the relaunch. “The packaging should try to tell the story about why the liquid is so good.”

But, he was also wary of being too iconoclastic in breathing new life into the brand. “That’s fine, but difficult with a Scotch brand that’s 209 years old. You run the risk of compromising your authenticity to try to attract a younger consumer.”

Having said that, Craig quickly recognised that traditional Scots imagery – “heather and weather, tartan and bagpipes” – was both cliched and inhabited by too many brands already.

“Most brands were marketing on the back of being Scottish more than anything else,” he recalls. “That’s not enough. If everyone’s talking the same language, there’s no differentiation, so your brand has to stand for more than the traditional Scottish stereotypical cliches.”

The result was a stylishly Celtic/Norse image, inspired by Highland Park’s Orkney home, which was a Scandinavian province until the 15th century. At the same time, the design had to distinguish between the different age statements – a 15-year-old and 30-year-old had just been introduced.

The success of the exercise, coupled with the introduction of a continuous stream of special edition and vintage malts, has established Highland Park where Edrington wants it to be: not an entry-level single malt, but a graduation point for those already broadly familiar with the category.

“A number of people in the single malt category moving up from the mainstream malts bypassed Highland Park because they didn’t know about it and the packaging didn’t appeal to them as much,” says Craig.

In part, this positioning is also dictated by production concerns and Highland Park’s limited stocks of aged whisky, necessitating an appeal to a limited section of the malts market, rather than aiming to be universally popular; a good example of how prosaic business concerns – simply supply and demand – influence brand positioning.

…and one that didn’t

New Coke

If you want to really know about the power of brands – and the effects of getting it wrong when relaunching – look no further than the 'New Coke' debacle of 1985.

This is by, most measures, the world’s most ubiquitous and powerful brand. But, a century after its birth, Pepsi was making serious inroads into Coke’s market share, outselling it in supermarkets and winning over younger consumers in particular with its sweeter taste.

What happened next contravened two of Interbrand executive director Scott Lucas’ golden rules: it was wholly reactive (the new Coke flavour was sweeter, even though previous advertising had trumpeted Coke’s less sugary taste), and it angered the brand’s most fiercely loyal fans.

But, it’s not as if the company didn’t test-market its new baby. Focus groups were broadly positive, preferring the taste of the new product to 'old' Coke and Pepsi, and exhibiting a willingness to keep buying it.

However, the marketing boys missed a trick: There was a vocal minority of consumers in the groups who were virulently anti the new Coke, and their strong opinions had a contagious effect on the less committed. This was peer pressure – and in the real world, its influence was huge.

The response went way beyond concerns over taste and image: some Southerners, who most readily identified with Coke because of its origins, even considered the relaunch as a latterday continuation of the Civil War, and another surrender to the sugar-loving Yankee hordes.

Among the 400,000-plus letters and calls, CEO Roberto Goizueta was referred to as “Chief Dodo”, and psychiatrists called in to monitor the calls likened the mood of some consumers to one of bereavement. The effect on public mood was huge: after initial success, sales of new Coke plateaued amid a welter of negative publicity.

Within 77 days, 'old' Coke was back on sale, renamed Coke Classic and selling alongside the young upstart, which was only renamed Coca-Cola II in 1992 and died a lingering death shortly afterwards, finally being discontinued in 2002.

There’s no doubt that new Coke was a costly failure for the company, igniting a battle with its bottlers which indirectly led the company to acquire many of them to prevent future problems – quite apart from the millions wasted on developing, testing, marketing and selling the new brand.

But, indirectly, Coke benefited from the move. Brand loyalty was so strong and so ingrained that many consumers reportedly just stopped buying cola, rather than switching to Pepsi, or went to extraordinary lengths to secure supplies of old Coke instead.

The tidal wave of publicity was huge, such that TV shows were interrupted by newsflashes when old Coke was reintroduced, and the effect was a huge spike in sales once the company admitted its error, with revenues rising at twice the rate of Pepsi.

Nobody lost their jobs at Coke, mainly because they had, in a rather ham-fisted and inadvertent way, reawakened the public’s sub-conscious love of and faith in the brand.

“Yes, it infuriated the public, cost a ton of money and lasted only 77 days before we reintroduced Coca-Cola Classic," said marketing VP Sergio Zyman later. "Still, New Coke was a success because it revitalised the brand and reattached the public to Coke.”

A failure, yes, but one that demonstrates that powerful brands can get away with it – if they’re lucky.

For part two of this management briefing, click here. The fourth and final part can be found here.