When first tasked to research possible consumers of Diet Coke Plus

Diet Coke Plus
What’s In Your Beverage?
Rosemary Maloney
Student Number: 078-70-8556
Consumer Behavior
Professor Sandra Rothenberger
April 7, 2008
Diet Coke Plus: What’s In Your Beverage?
Executive Summary
 The Diet Carbonated Soft Drink industry has been declining over the past few
 Over the past 4 years, there has been exponential growth in the Energy
Beverage Industry
 Propose the following group to target for sales
o Urban
o Professional
o Computer Literate
o Young (26-30)
 Psychological Core contains the following
o Desire to lead a healthy lifestyle
o Under-valued/appreciated in work life
 Recommendations for tactics to reach the audience
o Use the 2008 Olympics in Beijing to sponsor some games (Coca-Cola
is an official sponsor)
o Web applications and viral videos to reach professionals who sit in
front of their computers 40 hours a week
© Rosemary E. Maloney
When first tasked to research possible consumers of Diet Coke Plus, I looked at
my own drinking habits. I rarely drink sodas, but often drink energy drinks, such as
Vitamin Water. From there, I observed my colleagues at their workstations, noticing
either caffeinated soft drinks or energy beverages. This was when my target was
established, young professionals, emphasizing male, and information technology
professionals. In this paper, will discuss the internal and external influences on the
customer, as well as possible ways to get to as Diet Coke Plus’ target consumers as
described above.
Since the soft drink industry is already saturated with many kinds and brands of
carbonated beverages, positioning of Diet Coke Plus should be with energy beverages.
Each serving of Diet Coke Plus (8 fluid ounces) provides the following benefits, 15% of
recommended daily intake (RDI) of niacin and vitamins B6 and B12; 10% of the RDI of
the minerals zinc and magnesium.1 By highlighting these benefits, you should be able to
direct the placement of the beverage with the energy drinks rather than other carbonated
soft drinks (CSDs).
State of the Industry
It is important to note that the sales of diet CSDs have been on a decline the past
few years. Diet Coke has been doing the best of the main brands, in 2005 they had a
surprising (albeit paltry) increase of 0.1% in market share, and in 2006 they had hit a
plateau (0.0% growth) in market share. The news for Diet Pepsi isn’t as good, in 2005,
their market share decreased by 1.9% and in 2006, it decreased an additional 1.0%.
Source: Diet Coke.com
© Rosemary E. Maloney
Although, they were never a major player in the carbonated soft drink market, the
caffeine free cousins of these beverages have seen serious decreases in market share in
2006. Caffeine Free Diet Coke saw a 9.0% reduction in their market share, Caffeine Free
Diet Pepsi’s share of the market decreased by 7.0%.2 Although these classic CSDs were
on the decline, niche beverages had significant increases in their market share, including
Fanta, Sunkist, Diet Dr. Pepper and Diet Mountain Dew.
Michael Bellas, chairman and CEO of Beverage Marketing Corporation noted
that even though these decreases are alarming, the CSD industry would not be going
away anytime soon. The average American person is still drinking nearly 50 gallons of
carbonated soft drinks per year. As Bellas puts it “Everyone still drinks it, we’re just not
drinking as much. It’s a huge category. We are a carbonated nation.”3 One factor for the
shift from CSDs is the obesity epidemic affecting our country. For too long, Americans
were drinking the sugary soft drinks, and because of that weight is up, incidences of
diabetes is up and an added issue is that these are also affecting the children of the nation.
Luckily for the American future (not for the CSD makers) is that more and more people
are shifting to drinking more water over soft drinks.
One of the factors that may be staving of the end of the CSDs is the American
publics move towards spirits from beer. In 2000, spirit drinkers only accounted for 28.7%
of the alcohol beverage market, whereas in 2006, their share had grown to 32.8%. Beer’s
Source: Cioletti, Jeff “CSD Report” Beverage World’s State of the Industry,
April, 2007; www.beverageworld.com
Source: Cioletti, Jeff “CSD Report” Beverage World’s State of the Industry,
April, 2007; www.beverageworld.com
© Rosemary E. Maloney
market share has declined by 4.8% during those 6 years.4 One factor that can be
attributed to this shift is the “Low Carb” diet craze during this time, including the Atkins’
Diet and South Beach Diet. During this time, many beer drinkers who were counting
their carbohydrates shifted toward red wine and mixed drinks. Bacardi Rums advertised
rum and diet cola as viable option for dieters who still wanted to go out and have a good
time. 5 This beverage choice was easy for bartenders to make, and it was zero calories
and zero carbohydrates, an aspect that Bacardi advertised with fervor (an advertisement
for Bacardi and Diet Cola can be found here:
http://www.youtube.com/watch?v=oSr3psMGRdo). Despite the fact that this is helping a
declining product, Diet Coke Plus should not cannibalize Diet Coke’s share of the
market, thus is should be positioned with energy drinks.
The energy drink category has experienced incredible growth over the past few
years. Even with many beverage choices and more entries into the marketplace, it
continues to grow. The growth in this industry has slowed over the past few years: in
2004, there was 70% growth; in 2005, a 54% increase; and from January 2006 through
June 2007, there was a 36% increase. Even with the slow industry wide growth, it is a
substantial difference as opposed to the flattened growth of the Diet Coke and Diet Pepsi.
The top 3 energy drinks account for 68.7% of market share, and the combined sales in the
USA are approximately $499,428,980 for 2006 and the first 6 months of 2007.6 This
Source: Cioletti, Jeff “Beer Report” Beverage World’s State of the Industry,
April, 2007; www.beverageworld.com
Source: Taken from Daily Candy Blog
Source: Zegler, Jennifer; “State of the Industry – Beverage Blockbusters
2007” www.bevindustry.com
© Rosemary E. Maloney
market has the ability to continue growth, as well as appealing to the target of young
External and Internal Factors on the Target Audience
As discussed in class, external factors affecting the target include their culture and
subculture, demographics (age, income, sex, etc.), social status, reference groups
(inclusive of family) and marketing influences7. The psychological core of the customer
are the internal influences on the person, these include perception, learning, memory,
motives, personality, emotions, and attitudes. The target demographics for this is
beverage is:
Urban (or suburban working in a urban area)
Educated (completed a Bachelor’s Degree)
Computer Literate (heavy emphasis on the Information Technology Professional)
Looking to lead a Healthy lifestyle
Further dissection of these demographic choices, urban persons (both people that live and
work in urban areas) are considered to be busy. The view is that these people do not have
the time to sit and enjoy their time the same way that people that work in suburban or
rural areas. The way we choose to “take-out” our coffee and our meals and consume them
while traveling, while at our desks, or while watching TV. Although students are often
busy, our focus is on the professional running around between meetings. General
Knowledge dictates that they do not have the time to fully cook healthy meals to get the
vitamins and minerals that the body needs to be as active as they are. Most professionals
these days have their bachelor’s degree, as it has become almost standard in the United
States to go to college.
Source: Class Notes 3/31/08 – Copyrighted Dr. Sandra Rothenberger
© Rosemary E. Maloney
Most energy drinks are targeted at young men, thus males are in our target
demographic. This can be observed in the naming of such beverages to appeal to them:
DareDevil, Power Trip, The Beast, Monster, Rock Star, AMP, Sobe No Fear and
Adrenaline Rush and Full Throttle.8 Not to ignore the female energy beverage drinking
population, but it appears that more of these beverages are focused towards the male
view. There is one subset of females that I considered adding to chosen demographic, the
so-called “Alpha Mom.”9 As described by Bruce Horovitz, the “alpha mom” spends time
on-line, spends money and is seen as a leader for the other mothers in her child’s
playgroup. Constance Van Flandern, a graphic designer from Oregon, coined the term
“alpha mom”; she used to describe moms who are serious multitaskers.
The reason for choosing the above computer literate as the target has to do with
observations in the IAC Corporate office. The Information Technology (IT) team often is
seen drinking caffeinated soft drinks and energy drinks, which are provided to the entire
office for free. On a few occasions, I have noticed Diet Coke Plus on a few of the desks,
leading to impromptu interviews with staff members. One such discussion was with
Vincent Luciani, the VP of Information Technology, where I asked him why he was
drinking Diet Coke Plus. His response, “Well, it’s free and I wanted to try it. It tastes
pretty good, and theoretically it’s better for me than regular Diet Coke, which I was going
to drink anyway.” 10
Source: Zegler, Jennifer; “State of the Industry – Beverage Blockbusters
2007” www.bevindustry.com
Source: Horovitz, Bruce; “Alpha Moms leap to top of trendsetters;
Multitasking, tech-savvy women are expected to be next to watch” USA
Today; March 27, 2007
Informal Interview – Vincent Luciani, 3/20/2008
© Rosemary E. Maloney
The Psychological Core
The Psychological core of this consumer is focusing on the professional’s work
life. Unfortunately for information technology professionals, most of the senior
management at US companies don’t recognize the value of the information technology
department. IT expenditures are often the largest capital costs, but can lead to significant
gross revenue. Still, many of these employees feel that their efforts go unnoticed; leading
to employees feeling under valued and under-appreciated11. As discussed in class, this
despairing feeling leads people to look for escapist activities. As a result of this, this
group is often targeted for gaming and new technology goods; items like Blu-Ray DVDs,
In many cases the target market will look to lead an “extreme” lifestyle, or wish
they still could. Many energy drinks are advertised in tandem with X-Sport Games, like
“Kronik Energy Desert Dog Bowl Bash” which is a large skateboarding event.12 The
main focus of many of these beverages is to allow young males to be apart of the xlifestyle, as the target of Diet Coke Plus is slighter older than college-aged; many of them
are looking to lead a healthier lifestyle.
Targeting those who consider themselves as healthy as a demographic is nothing
new, but the current health crisis in our country is nothing to dismiss. In a report from the
New England Journal of Medicine, the increasing waistlines are decreasing life spans.
Currently, the expected lifespan of the average American is at 77.6 years, but that figure
Source: Basu, Amit and Jarnagin, Chip, “Business Insight (A Special
Report): Information Technology; How to Tap IT’s Hidden Potential: Too
often, there’s a wall between a company’s information-technology department
and everything else; that wall has to go” The Wall Street Journal; March 10,
Source: Cirillo, Jennifer “Bring on the Buzz” Beverage World; June 15,
© Rosemary E. Maloney
is expected to decline by 2 to 5 years over the next 50 years. Two-thirds of US adults are
overweight or obese, with 1/3 of them qualifying as obese. Childhood obesity has
doubled in the past 25 years, and nearly 30% of American children are considered
overweight.13 Even though children are not a part of the demographic, they learn their
behaviors from the adults in their life.
Preliminary Survey
In order to learn more about what people were drinking, I conducted an
anonymous web survey on April 2nd. The link to the survey was sent to 50 people, the
make-up of the group was people my own company, IAC, as well as family members
across various industries (mostly cousins, siblings and in-laws). There is an
understandable bias to this survey, as IAC is considered a young company and family
members were filling out the survey as well. The website, SurveyMonkey.com was used
to keep respondents anonymous.
Thirty-seven completed surveys were received, making the response rate 74%. Of
the responders, 66.7% said they drank energy beverages or caffeinated soft drinks on a
regular basis. When the participants were asked to classify what CSDs they drank, the
results were interesting. Diet Coke had more drinkers than Diet Pepsi, similarly, there
were more people drinking Diet Coke Plus over the Pepsi’s comparable beverage. As for
energy drinks, 42.9% of the responders drank 4-5 Red Bulls per month. 56.8% said they
drank their CSD/energy drink of choice because of the taste, whereas 37.5% said they
drank it to get an energy rush.
Source: Wellman, David. “Health is Hot” Frozen Food Age. March 2005
© Rosemary E. Maloney
The largest demographics of the survey respondents were as follows:
Sex: 54.1% Male
Age: 43.2% 26-30
Income Level: 30.6% $25,001 - $50,000
Professional Category: 37.0% Information Technology
Highest Degree Attained: 62.2% Bachelor’s Degree
Lifestyle Classification: 75.7% Somewhat Healthy
The complete results of the survey are included in Appendix A. Although I was surprised,
by the low income level, the results were as expected. The survey, despite the
considerable bias, does support the hypothesis set forth, that this would be an ideal target
Conclusion and Recommendations
Diet Coke Plus should be directed at men aged 26 – 30, professional (IT Focus),
educated and living or working in an urban area. To reach this tech savvy market
segment, viral marketing and blogs should be used to get their attention. Some viral
videos that have been passed in the place have included the “Bud Light Swear Jar.” The
advertisement showed an office with a swear jar, the receptionist says they’ll use the
money for something for the whole office, “like a case of bud light”. The humorous
commercial than goes on to show how much cursing the office staff did in order to raise
the money for the beer.
Another possible way to reach this desired audience is to use an engaging
application. During the holidays, Office Max has a promotion where you upload a picture
of your face onto an elf. The elf then dances and sings to Christmas carols, and allows the
creator to send to friends; once they send to friends, the online application invites them to
create their own “elf”. The level of engagement this provides as well as peer to peer
(albeit tacit) recommendation of the product.
© Rosemary E. Maloney
Another recommendation goes back to the Bacardi and Diet Cola advertisement
described above in the state of the CSD industry. A somewhat sarcastic viral video could
be produced to encourage the usage of Diet Coke Plus for your Rum and Cola choice.
The thought behind it would be to say, you’re already doing something better for yourself
over drinking beer, why not make your cocktail healthier.
Finally, in these days of the digital video recorder, you cannot rely on television
commercials to reach your audience. Coca-Cola has the exclusive soft drink rights for the
2008 Beijing Olympic Games. The Olympics provide an opportunity to reach a massive
international audience who are intently watching summer games that only occur every 4
years. These events inspire emotions in the general public, and could be used to inspire to
lead a healthy lifestyle. Diet Coke Plus should seize this opportunity to get their product
© Rosemary E. Maloney