Target segment of coca cola

COCA-COLA Back in 1886, an Atlanta pharmacist created a caramel-colored liquid and brought it down the street to Jacobs’ Pharmacy, where it was mixed with carbonated water and sold for five cents a glass. The beverage caught on, and sales took off from the initial average of nine drinks a day, to today’s total of 1.7 billion Coke-owned beverages consumed daily. The success spawned bottling plants, six-pack cartons, international distribution—and imitators. For example, Pepsi followed in 1902 and today is a $29 billion conglomerate with vast holdings. Both companies spent decades marketing a single brand, Coke or Pepsi. But over the course of the 20th century, they both expanded their product lines by introducing drink alternatives such as Fanta, Sprite, TAB, Fresca, and Diet Coke (Coca-Cola), along with Diet Pepsi and Mountain Dew. The relatively simple segmentation that these offerings suggested has since grown increasingly com- plex and sophisticated, especially as the competitors have expanded their inter- national sales into hundreds of diverse country markets. Although they face a number of smaller competitors, the primary focus in this mature market is to take customers away from its main rival, or else find a way to encourage existing customers to drink more cola—both challenging tasks. For Coca-Cola, the best solution is to pursue extensive product development for new and different mar- ket segments. Market Segmentation Strategy In a tightening, competitive consumer market, Coke has developed unique prod- ucts for various specific market segments. Because these unique products appeal to specific groups, Coke has been able to increase its sales without cannibalizing the sales of its other products. In addition to the products already mentioned, for example, the company launched caffeinefree versions of both Coke and Diet Coke to appeal to cola drinkers who wanted to cut back on their caffeine intake but pre- ferred colas to lemon-lime-flavored drinks. By introducing these decaffeinated versions of traditional sodas, Coca-Cola increased the number of sodas it sold each day, without hurting sales, because the consumers targeted by these products already had been avoiding or minimizing cola consumption to reduce their caf- feine intake. Dieters Segment As more Americans expressed concerns about their weight, Coca-Cola began by introducing Diet Coke, which became the number one selling diet soft drink in the United States within a year of hitting shelves. In 1986, Diet Cherry Coke joined the brand, followed by Diet Coke with Lemon. Diet Coke with Vanilla and Diet Coke with Lime followed quickly, along with Diet Black Cherry Vanilla Coke. Then new trends in the market led diet-conscious consumers to pay more attention to their overall health, not just calorie content. Thus the company introduced Diet Coke Plus—the familiar version of the beverage but with added vitamins and minerals. Coca-Cola Life has appeared only in Argentina and Chile so far; the reduced- calorie “sparkling beverage” promises natural sweeteners. “Real Men” Segment Women hoping to drop a dress size may turn to diet sodas, but “real men” don’t want to be caught with a “girly” diet drink. Coca-Cola had a response for them too: the high-profile launch of Coke Zero, which consistently avoided the dreaded word diet. The successful introduction instead has relied on advertising featuring such masculine images as James Bond to target men through its packaging, pro- motions, and image. By appealing to men between the ages of 18 and 34 years who wanted to drink a low-calorie cola but would prefer not to be seen buying or sipping Diet Coke, Coca-Cola increased its sales of Coke-branded products by one-third. The DIY Segment Soda fountain sales have remained an important part of Coke’s business since the company’s inception. To boost its cola sales in restaurants, Coke combined the soda fountain concept with the do-it-yourself (DIY) trend to offer customers up to 104 individualized flavor choices in a new machine. The Freestyle ma- chine was created by the designers of Ferrari race cars. Size-controlled shots of concentrated flavors get released into carbonated water midstream, so the drink is mixed in the air; special technology keeps one consumer’s beverage from picking up the flavors from the last drink poured. The Freestyle also allows moms to have a Diet Coke with Lime, while dads sip their Coke Zero with Lime and the kids select between a Caffeine-Free Vanilla Coke or a Caffeine-Free Diet Cherry Vanilla Coke. Marketing Value to Segments A successful new product introduction needs to combine an innovative product with a marketing campaign that communicates the value of that new product to the targeted segment.