Chapter 8--Coke Zero

TRUE/FALSE
1.

A list of reasons why customers choose to drink Diet Coke Plus would be helpful for marketers using
benefit segmentation.

ANS: T

Benefit segmentation is the process of grouping customers into market segments according to
the benefits they seek from the product. It groups potential customers on the basis of their
needs and wants rather than some other characteristic, such as age or gender.
PTS: 1
OBJ: 8-4
TOP: AACSB Reflective Thinking
KEY: CB&E Model Customer | CB&E Model Research
MSC: Bloom's Level II Application
2. The Coca-Cola Company uses an undifferentiated targeting strategy for its entire line of products.
ANS: F
Before 1960, the Coca-Cola Company produced only one beverage and aimed it at the entire soft-drink market.
Today, however, it sells a variety of products with multisegment targeting. An undifferentiated targeting strategy,
by contrast, adopts a mass-market philosophy, viewing the market as one big market with no individual
segments.

PTS: 1
OBJ: 8-7
TOP: AACSB Reflective Thinking
KEY: CB&E Model Customer | CB&E Model Research
MSC: Blooms Level I Knowledge
3. If the Coca-Cola Company decided to start marketing Coke Zero as a drink for middle-aged women, then
they would be repositioning it.

ANS: T

Repositioning takes a known brand and changes consumers perceptions of it.

PTS: 1
OBJ: 8-9
KEY: CB&E Model Customer

TOP: AACSB Reflective Thinking

MSC: Blooms Level I Knowledge

4. A clear version of Coke Zero would probably be successful if it was positioned as the only clear diet cola on
the market.

ANS: F

Positioning assumes that consumers compare products on the basis of important features.
Crystal Pepsi failed because consumers perceived the clear positioning as more of a
marketing gimmick than a benefit.
PTS: 1
OBJ: 8-9
KEY: CB&E Model Customer

TOP: AACSB Reflective Thinking

MSC: Blooms Leve II Application

5. Coca-Cola was hoping that its customers loyalty to drinking Diet Coke would easily transition to market
share for Diet Coke Plus.

ANS: T

Diet Coke Plus was a failure because customers were already satisfied with Diet Coke, and were not looking for
soda to be Healthy. However, Coca-Cola was hoping that the Diet Coke drinkers would be thrilled at the
prospect of a healthier soda made by a company to which they were already a loyal.

PTS: 1
OBJ: 8-8
KEY: CB&E Model Customer

TOP: AACSB Reflective Thinking

MSC: Blooms Level I Knowledge

MULTIPLE CHOICE
1. MyCokeRewards.com, which gives Coke drinkers points for each purchase that they can redeem for
rewards such as downloadable ring tones, is an example of

a.
b.
c.
d.
e.

a frequency/loyalty program.
benefit segmentation.
mass marketing.
product differentiation.
a points-for-purchase program.

ANS: A

Developing customers into heavy users is the goal behind frequency/loyalty programs such as
My Coke Rewards. The more Coke you purchase the more rewards you earn.
PTS: 1
OBJ: 8-4
KEY: CB&E Model Customer`

TOP: AACSB Reflective Thinking

MSC: Bloom's Level II Application

2. When the Coca-Cola Company set out to create a product that would appeal to young Hispanic men, they
were using ________ segmentation.

a.
b.
c.
d.
e.

benefit
demographic
geographic
racial
psychographic

ANS: B

Demographic segmentation is based on age, gender, income level, ethnicity, and family life
cycle characteristics.
PTS: 1
OBJ: 8-4
TOP: AACSB Reflective Thinking
KEY: CB&E Model Customer | CB&E Model Research
MSC: Bloom's Level I Knowledge
3. The hidden-camera videos that were placed strategically on Web sites like YouTube to promote Coke Zero
were an example of marketing according to

a.
b.
c.
d.
e.

benefit segmentation.
demographics.
geodemographic segmentation.
usage-rate segmentation.
psychographic segmentation.

ANS: E

Psychographic segmentation is market segmentation on the basis of personality, motives,

lifestyles, and geodemographics. Coke Zero was being marketed to young men who were
likely to use the Internet and who would be the most appreciative audience for the hiddencamera humor shown in the videos.

PTS: 1
OBJ: 8-4
KEY: CB&E Model Customer

TOP: AACSB Reflective Thinking

MSC: Blooms Level II Application

4. When Coca-Cola reintroduced the Coke Zero can in 2007 with a new black label for the U.S. market so
that it would no longer be confused with Diet Coke or other diet colas, it was attempting:

a.
b.
c.
d.
e.

one-to-one marketing.
geodemographic segmentation.
product differentiation.
repositioning.
All of the above

ANS: C

Product differentiation is a positioning strategy that companies use to distinguish their

products from those of competitors.
PTS: 1
OBJ: 8-9
TOP: AACSB Reflective Thinking
KEY: CB&E Model Customer | CB&E Model Research
MSC: Bloom's Level II Application
5. A potential cost of marketing Coke Zero could be the ________ of sales from other drinks within the CocaCola product line.

a.
b.
c.
d.
e.

differentiation
segmentation
concentration
cannibalization
None of the above

ANS: D

A potential cost of multisegment targeting is cannibalization, which occurs when sales of a

new product cut into sales of a firms existing products. In this case, regular and Diet Coke
may see a drop in sales as some customers switch to Coke Zero.
PTS: 1
OBJ: 8-7
TOP: AACSB Reflective Thinking
KEY: CB&E Model Customer | CB&E Model Strategy
MSC: Bloom's Level I Knowledge