ETHICS EXERCISE

Tobacco companies are frequently criticized for targeting potential customers

below the legal age to purchase and use their products. Critics cite Joe Camel
and the Marlboro Man as images meant to make smoking appealing to young
people. If tobacco companies are actually following this particular demographic
targeting strategy, most would agree that it is unethical if not illegal.
Questions
1. Is marketing tobacco products to younger consumers unethical?
2. Many are beginning to argue that fast-food companies, such as McDonald’s
and Burger King, are knowingly marketing unhealthy food to consumers. Is it
unethical for fast-food companies to market kids’ meals to children?
3. What does the AMA Statement of Ethics have to say about marketing
unhealthy or harmful products to consumers, particularly children and young
adults? Go to the AMA Web site at www.marketingpower.com to review
the statement of ethics (www.marketingpower.com/AboutAMA/Pages/
Statement of Ethics.aspx). Write a brief paragraph summarizing where the
AMA stands on this important issue.

MARKETING PLAN EXERCISE

Once you’ve completed the marketing plan exercise for each chapter in Part 2 of
this textbook, you can complete the Part 2 Marketing Planning Worksheet on your
companion Web site at www.cengage.com/marketing/lamb. Complete the follow-
ing exercises to continue the marketing plan you began in Chapter 2:
1. To whom does your company market (consumer, industrial, government,
not-for-profit, or a combination of targets)? Within each market, are there
specific segments or niches that your company can concentrate on? If so,
which one(s) would you focus on and why? What are the factors used to
create these segments? What are the Internet capabilities in those markets?
If you try to encourage those segments to access your product or service
via the Internet, will that change which segments are most important to your
business? How? What are the factors used to create these segments? Which
segments should your company focus on and why?
2. Describe your company’s target market segment(s). Use demographics,
psychographics, geographics, economic factors, size, growth rates, trends,
NAICS codes, and any other appropriate descriptors. What role does the
Internet play in your target market’s life? How is the target market for your
Internet business different from that of a traditional business in your market?
3. Using the list of key competitive advantages you described in Part 1 of your
marketing plan, create a series of positioning grids, using two factors each
as dimensions. (See grids in LO9 in your textbook, for an example.) Then
Analyzing Marketing Opportunities

plot the list of key competitors you identified earlier onto these positioning
grids. Is your company too close to a key competitor? Are there spaces
where the consumer needs and wants are unsatisfied? Consider how the
Internet changes what factors are important to your success in your market
space. Is technology the most important factor for your firm, or are there
other ways for you to differentiate from and beat your competition?

CASE STUDY: 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,”
PART 2

288
she was baffled. She tried to talk them out of it, but they were determined. They

CHAPTER 8
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 shout-
ed, “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

Segmenting and Targeting Markets

cameras had been planted around the meeting room to capture the reactions of
several unsuspecting attorneys who had been asked to consider the case, includ-
ing an immigration lawyer who was asked if he could get the Coke Zero market-
ing 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.

© VICKI BEAVER
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-con-
scious, 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 tagline 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 essence created for older, more sophisticated con-
sumers 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
they weren’t willing to make the move to Diet 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 off by the “feminine stigma” of Diet Coke often rejected it any-
way because of its aspartame-sweetened aftertaste. “What we were seeing before
Zero launched was that more and more younger people were interested in no-calo-
rie 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 packag-
ing 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 com-
pany 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.”59

289
 Questions
1 Describe the specific type of consumer that the Coca-Cola Company is tar-
geting with each of the following products: Diet Coke, Coke Zero, Diet Coke
Plus, Coca-Cola Blak, and Full Throttle Blue Demon. What types of demo-
graphic segmentation is each product’s marketing most likely to include?
2 Some industry analysts think soft-drink companies should develop products
that will bring new customers into the market rather than just creating vari-
ants on the old. They warn that products like Coke Zero will cannibalize lost
market share from other soft drink categories instead of increasing the num-
ber of consumers overall. 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? Do you think a simi-
lar strategy with a viral marketing campaign on the Internet would appeal to
the target market for Diet Coke Plus?
4 Do you think Diet Coke could have been repositioned to change consum-
ers’ perceptions of it enough to be considered a drink equally appealing to
men? Why or why not?

COMPANY CLIPS

READYMADE—FOCUS AND SEGMENTATION

ReadyMade markets itself as a magazine catering to GenNest, the group of
consumers ages 25 to 35 who are just settling down after college.
The young couples that make up this group are buying their first houses and
taking on domestic and decorating roles for the first time. They are interested in
© NKP MEDIA, INC./CENGAGE

being stylish, while at the same time maintaining their own unique personalities.
But ReadyMade appeals to a wider variety of readers than just GenNest. The
magazine has subscribers in all age groups, from teens looking to spruce up
their rooms to retirees looking for projects to enliven their homes. This diversity
offers a unique challenge to ReadyMade as it tries to promote itself to advertisers
who need to know what sort of people will be reached through advertisements
appearing in the publication.
Questions
1 How does ReadyMade communicate the demographics of its reader base
to advertisers who want to see specific statistics that do not easily represent
ReadyMade’s target market?
2 What sort of segmentation does ReadyMade use when it markets to
businesses and investors?
3 What ideas do you have that would help ReadyMade
reach out to new subscribers without alienating its loyal
base?

A high score indicates that you operate within

budget constraints. Living on a budget doesn’t
necessarily mean that you change your shop-
ping behavior or your price comparison
behavior, however. Low scores relate to
financial health and a tendency to be brand
loyal. After reading Chapter 8, you can see
why income and financial situation can be an
important segmentation variable!