case study marketing

CASEASSIGNMENT: COKE ZERO

.lfen Drink Diet Coke?

a couple of marketing managers for Coca-Cola told attorney Elizabeth Finn Johnson that they wanted to sue theirZero colleagues for "taste infringement," she was baffled. She tried to talk them out of it, but they were determined.They argued that Coca-Cola Classic should be protected from the age discrimination it would suffer with the introductionof a newer, younger soft drink that tasted exactly the same as the original. Frustrated, Finn Johnson held up the Coke canshouted, "It's not a person! Title VII doesn't cover these things!"What she didn't know was that the marketing managers were actors. Hidden cameras had been planted aroundmeeting room to capture the reactions of several unsuspecting attorneys who had been asked to consider the case,including an immigration lawyer who was asked if he could get the Coke Zero marketing head deported back to Canada.The short videos were strategically placed on websites like YouTube.com to promote Coke Zero as the hip, newalternative to Diet Coke for men.

The Coca-Cola Company knows it has to be creative if it' s going to sell more soda after sales dropped two yearsin a row in 2005 and 2006. Morgan Stanley analyst Bill Pecoriello explains, "Consumers are becoming ever more health-nscious, and the image of regular carbonated soft drinks is deteriorating rapidly." In an attempt to appeal to consumersconcerned with nutrition, Coke introduced Diet Coke Plus in 2007, a sweeter version of Diet Coke fortified with vitaminsand minerals. But what they really needed was a way to reach young male consumers, and Diet Coke Plus, marketed with

o lines like "Your Best Friend Just Got Friendlier!" wasn't going to do it.

A few new products appealed to certain male demographics, such as Coca-Cola Blak, a cola with coffee essencecreated for older, more sophisticated consumers who are willing to pay more, and Full Throttle Blue Demon, an energydrink with an agave azule flavor (think margaritas) designed to appeal to Hispanic men. However, research showed thatiere was still a big demographic hole to fill as young men between the ages of 18 and 34 were abandoning the Coca-Cola brand altogether. They didn't want all the calories of regular Coke, but they weren't willing to make the move toDiet Coke, either, which has traditionally been marketed to women who want to lose weight.Katie Bayne, chief marketing officer for Coca-Cola North America, says that the men who weren't put offby the=feminine stigma" of Diet Coke often rejected it anyway because of its aspartame-sweetened aftertaste. "What we wereseeing before Zero launched was that more and more younger people were interested in no-calorie beverages but weren'tgoing to sacrifice taste," Bayne said. "So when they got interested in no-calorie, they were like, 'Forget it, I'm not goingi l l Diet Coke."Testing showed that the name "Coke Zero" would be an effective way to sell a low-calorie cola to men without. g the word "diet." And advances in artificial sweeteners made it possible for Coke to finally create a product thattasted more like the "Real Thing." So expectations were high when Coke Zero was introduced in 2005 with a bigmarketing push, including a commercial that remade the famous 1971 "HilltoplI'd Like to Teach the World to Sing" ad-this time with rapper G-Love on a rooftop singing that he'd like to teach the world to "chill." Unfortunately, thecommercial didn't catch on, and neither did the product it was selling.Despite disappointing sales in the U_S., however, Coke Zero was an immediate hit in Australia, selling morethan three times the number of cases expected during its first year on the market. In the U.S., the packaging was whitesilver, making it difficult for consumers to see the difference between Coke Zero and Diet Coke. In Australia, thees and cans were black, making the product stand out on the shelves and look more like the "bloke's Coke" it wasintended to be.The span class="tx" style="box-sizing: content-box !important; position: absolute; top: 131.8pt; left: 64.2pt; display: inline-block; white-space: nowrap; text-align: left; border-width: 0px 0px 5pt; border-style: solid; border-color: transparent; overflow: hidden; width: 6.5pt; height: 8.1pt;">U.S. marketing team took notice and reintroduced Coke Zero with a black and silver label in 2007. Coca-Cola is now investing more money in Coke Zero than any other brand its size, hoping it will someday be a megabrand forthe company alongside Coca-Cola Classic and Diet Coke. Chief Marketing Officer Bayne is enthusiastic about the impact- may have on the company. "We do see this as potentially a bit ofa white knight. There's huge opportunity to growhere."I

CASE:COKE

1. Describe the specific type of consumer that the Coca-Cola Company is targeting with each of thefollowing products: Diet Coke; Coke Zero; Diet Coke Plus; Coca-Cola Black; Full Throttle Demon.~2. Some Industy analysts think soft-drink companies should develop products that will bring newcustomers into the market rather than just creating variants on the old. They warn that productslike Coke Aero will cannibalize lost market share from other soft-drink categories instead ofincreasing the number of consumer overall: Which Coke products are most likely to losecustomers to Coke Zero?

3. Why do you think that the hidden-camera videos used to promote Coke Zero were an effectiveway to reach its target market? Do you think a vial hidden-camera strategy on the Internetwould appeal to the target market of Diet Coke Plus?

4. Do you think Diet Coke could have been repositioned to change consumers' perceptions of itenough to be considered a drink equally appealing to men? Why or why no.