Cadbury's purple passage.

Cadbury Schweppes is enjoying a purple passage after the Australian Federal Court this week handed it a win over some allegedly deceptive pratices by competitor Darrell Lea (see DIFFUSIONblog:Cadbury appeal short of a glass and a half 20/7/06).

Cadbury accused Darrell Lea of misleading and deceptive conduct by using a shade of purple which it claims bears "a striking and obvious" resemblance to its own "Cadbury Purple". All very strange because when DIFFUSION walked past the store on Thursday it seemed decidedly blue in colour.

In the original April 2006 hearing, a Federal Court judge dismissed Cadbury's claim, probably because it was more reliant on Cadbury’s claim of ownership of Pantone 2685C and Pantones that are very close to it.

In the disputed hearing the court ruled Cadbury did not “own” the colour purple and that Darrell Lea's use was not likely to convey to a” reasonable consumer” that it was associated with its rival.

However, three Federal Court justices disagreed with the previous finding and allowed Cadbury's appeal, ordering a new trial at the same court to be set (see: http://www.austlii.edu.au/au/cases/cth/FCAFC/2007/70.html)

The Court ruled that in dismissing expert evidence from three witnesses presented by Cadbury, the trial judge had erred.

Interestingly the three experts, Brian Gibbs, an Associate Professor of Marketing and Behavioural Science in the Melbourne Business School at the University of Melbourne, Constantino Stavros, a Senior Lecturer in the School of Economics, Finance and Marketing of RMIT University, Melbourne; and Timothy Riches, the managing director of FutureBrand were all called by Cadbury and presented with photo evidence it had accumulated on it's competitor's activites (let's also note that Cadbury operates no retail stores in Australia, while Darrel Lea has done so since 1927 with more than 1000 stores).

In particular, weight was attached to Gibbs’ evidence which drew attention to such factors as brand concept and brand equity, the nature and storage of brand associations in memory, the role of packaging in marketing communication and the importance and impact of colour in brand.

"It cannot be said that the disputed evidence is of so little weight that it could not influence the result of a new trial, so as to produce a different result," they said in their judgment.

Cadbury claims that since 1995 it has achieved a substantial, exclusive and valuable reputation and goodwill throughout Australia through the colour purple.

It alleges that since 2001, Darrell Lea has consistently used a colour bearing a "striking and obvious" likeness to Cadbury's purple in its signage, badging, wrapping, store fit-out and point of sale facilities.

Cadbury also claimed that Darrell Lea’s conduct constitutes passing off of its chocolate confectionary business and products as a business or products of, or connected or associated with, Cadbury.

DIFFUSION believes Cadbury has taken the route of attempting to prove passing off and by dint of this assume ownership of colour Pantone 2685C, something which it has up to now failed to do.

Coles breakup signals strategy failure.

Putting paid to his much vaunted big-box brand strategy, Coles Group Chairman Rick Allert announced today the troubled retail giant will be split and expressions of interest sought.

Despite a number 30 ranking in the global retailing stakes, Allert and CEO John Fletcher seems to have cast aside the dubious brand work of both McCann Erickson and Futurebrand and has told investors and the market that it was inviting expressions of interest for 100% ownership of the group including what they call the Everyday Needs Business (Coles Supermarkets and Kmart), Target and/or Officeworks. He also said the Group would also consider the sale of a considerable stake in the Everyday Needs Business as well as a demerger of both of Target and OfficeWorks.

Here at DIFFUSION we've been a long time critic of the group's less than comprehensible brand strategy, with Allert and Fletcher being consistently wrong footed by Woolworths. Just over three years ago Fletcher had the opportunity to set things right but even then he was saying his organisation didn't need one. It's about time other similar companies (we have a list!) woke up to the need for CEO-led wholistic brand strategy not run by their marketing departments or their advertising agencies.

Coles failure is a patent example of such strategy absence.

Coles brand backflips.

As DIFFUSION predicted (Is McCann set to give Coles a Walmart 9/4/06) Coles Group's roll out of it's new brand strategy is proving problematic.

Firstly, the much heralded closure of the Bi-Lo brand has not resulted in customers flocking to Coles supermarkets, as was hoped, but to competitors like Woolworths, Aldi and those pesky IGA stores. What this is likely to mean is that its other brands (K-Mart, Vintage Cellars) in the portfolio also slated for the chop are likely to be left standing while John Fletcher and those masterminds at McCann Erickson and Futurebrand rethink the much vaunted supercentre approach. Yes, supercentre is what they are going to be called. Just check out a recent National Retail Manager role Cole Group advertised two weeks ago describing the Coles Supacentre as "radically transforming the retail experience in Australia".

Secondly, there's the tiny issue of an imminent-any-time-any-day-now-soon sale after Fletcher and Coles Group Board chairman Rick Allert decided to throw in the towel and succomb to the inevitable private equity tsunami engulfing some large underperforming listed companies throughout Australia.

Thirdly, Coles Group's current lacklustre trading performance is putting even more pressure on Fletcher and Co to get the new strategy right. Here at DIFFUSION we've received word from Tooronga that there's quite a lot of internal dissatisfaction with the new direction. Insiders are wondering whether the new strategy is going to work.

In the end, it might all be for nought. If, after an equity group breaks it up and Woolworths nabs Coles' best performers Target and OfficeWorks, what will they be left? An underperforming supermarket chain and a lacklustre variety store. Hardly the stuff of dreams.