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Ch. 8 Case: Coke Zero Do Real Men Drink Diet Coke?

Ch. 8 Case: Coke Zero Do Real Men Drink Diet Coke?
When a couple of marketing managers for Coca-Cola told attorney Elizabeth Finn Johnson that they wanted to sue
their Coke Zero 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 introduction of a newer, younger soft drink that tasted exactly the same as the original. Frustrated, Finn Johnson held up the Coke can and shouted, ?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
around the meeting 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 Web sites such as www.youtube.com
to promote Coke Zero as the hip, new alternative 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 years in a row in 2005 and 2006. Morgan Stanley analyst Bill Pecoriello explains, ?Consumers are becoming
ever more health-conscious, and the image of regular carbonated soft drinks is deteriorating rapidly.?
In an attempt to appeal to consumers concerned with nutrition, Coke introduced Diet Coke Plus in 2007, a
sweeter version of Diet Coke fortified with vitamins and minerals. But what they really needed was a way
to reach young male consumers, and Diet Coke Plus, marketed with the tagline ?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 essence created for older, more sophisticated consumers who are willing to pay more, and Full Throttle Blue
Demon, an energy drink with an agave azule flavor (think margaritas) designed to appeal to Hispanic men.
However, research showed that there 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 neither were they willing to make the move to Diet Coke, 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 off
by the ?feminine stigma? of Diet Coke often rejected it anyway because of its aspartame-sweetened aftertaste.
?What we were seeing before Zero launched was that more and more younger people were interested in nocalorie
beverages but weren?t going to sacrifice taste,? Bayne said. ?So when they got interested in no-calorie, they were like, ?Forget it, I?m not going to Diet Coke.?? Testing showed that the name ?Coke Zero? would be
an effective way to sell a low-calorie cola to men without using the word ?diet.? And advances in artificial
sweeteners made it possible for Coke to finally create a product that tasted more like the real thing. So expectations were high when Coke Zero was introduced in 2005 with a big marketing push, including a commercial
that remade the famous 1971 ?Hilltop/I?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, the commercial didn?t catch on,
and neither did the product it was selling.
Despite disappointing sales in the United States, however, Coke Zero was an immediate hit in Australia, selling
more than three times the number of cases expected during its first year on the market. In the United States,
the packaging was white and silver, making it difficult for consumers to see the difference between Coke Zero and Diet Coke. In Australia, the bottles and cans were black, making the product stand out on the shelves and look
more like the ?bloke?s Coke? it was intended to be.
The 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 for the company alongside Coca-Cola Classic and Diet Coke. Chief marketing officer Bayne
is enthusiastic about the impact it may have on the company. ?We do see this as potentially a bit of a white
knight. There?s huge opportunity to grow here.?
1. Describe the specific type of consumer segment that the Coca-Cola Company is targeting with each of the
following products: Diet Coke, Coke Zero, Diet Coke Plus, Coca-Cola Blak, and Full Throttle
Blue Demon.
2. Some industry analysts think soft drink companies should develop products that will bring new customers
into the market rather than just creating variants on the old. They warn that products such
as Coke Zero will ?cannibalize? lost market share from other soft drink categories instead of increasing
the number of consumers overall. Do you agree with this view? Which Coca- Cola products are most likely to lose customers to Coke Zero?
3. Why do you think that the hidden-camera videos used to promote Coke Zero were an effective way
to reach its target market?
4. Do you think Diet Coke could have been repositioned by Coca-Cola to change consumers? perceptions of it enough to become a drink equally appealing to men? Why or why not?
Sources: Jerry Adler, ?Attack of the Diet Cokes,? Newsweek, May 14, 2007;
?Coke?s New ?Coke Zero? Faces Tough Going?, UPI NewsTrack, June 13, 2005;
Duane D. Stanford, ?0: That?s Zero. As in No Calories,? The Atlanta Journal-
Constitution, March 20, 2007; ?Coca-Cola Co.,? MMR, October 30, 2006; www
. Read the COKE ZERO CASE that follows this Assignment list, (scroll to the very end for the Case.) Answer the questions and send them to me in an email.

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