Case Study: Coke Zero

I highly agree with the statement that “companies should develop products what will bring new customers into market rather than just creating variants on the old” (Lamb et al. 289) because when old products failed, it is an opportunity for the company to invest in different market segments— “a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs” (Lamb et al. 261)—that could potentially increase additional consumers. For instance, Coke Cherry has been the “dog”— a “poor performer [and]it has only a small share of a slow-growth market” (Draft 213)— product line compared to other successful drinks such as Diet Coke, Coke Zero, and regular Coke. Thus, managers must foresee the concept: why continuing to invest in older products that do not produce profits and lose additional money in the investment; hence, why not take the risk of manufacturing new products that could be the “cash cow”—the “dominant business in the industry, with a large market share” (Daft 213)—in the market? Diet Coke and Coke Zero are the “star”, which have “additional growth potential” (Daft 213) and “will generate profits and a positive cash flow” (Daft 213). Both Diet Coke and Coke Zero are concentrating on the demographic segmentation—“segmenting markets by age, gender, income, ethic background, and family life cycle” (Lamb et al. 265)—by particularly age; therefore, the target market of Diet Coke and Coke Zero is older age classes who are concerns with high calories diets. However, as you know, dental care is extremely expensive now-a-days; hence, coke—specifically soda—first, provokes high calories and second, dental cavities. Coke could provide a means of promoting dental healthcare by launching different product lines,—besides sodas— such as fruit smoothies that are saturated with vitamins.