The June arrival of Coca-Cola Zero actually brings Coca-Cola zero-calorie portfolio to three-Diet Coke, Diet Coke with Splenda and Coke Zero. When the four flavored Coke zero-calorie versions are factored in-Diet Coke with Lemon, Diet Coke with Lime, Diet Vanilla Coke and Diet Cherry Coke-the tally rises to seven dizzying diets. Not to mention its "mid-calorie" C2.
Confused? Just wait. Diet Coke, popular with women, actually holds the same flavor profile as New Coke, the company's disastrous 1980s experiment; Diet Coke with Splenda, akin to New Coke with Splenda, is aimed at pleasing consumers who spurn an aspartame aftertaste. Coke Zero, sweetened with Ace K and essentially a diet version of Coke Classic, is aimed at reaching young men who wouldn't be caught dead with a brand called "diet."
"How many versions of Diet Coke do they need?" opined a writer on the message board for Bevnet, a beverage-industry Web site for industry professionals and consumers.
The answer: plenty, if Coca-Cola wants to hold onto Gen X and millennial consumers fleeing colas in favor of waters, diet drinks and other beverages. Experts lauded its strategy of using zero-calorie Cokes to retain these finicky consumers who demand myriad choices-and who will bail out on a brand if their preferences aren't met.
John Hauser, professor of marketing at MIT Sloan, said marketers are facing a "new world of consumer decision-making" causing brands and sub-brands to accelerate.
As a result, when facing a lot of options consumers naturally simplify how they make decisions based on certain "must-have" attributes-noting, for example, that if a consumer who doesn't like the aftertaste of Diet Coke does not find a Splenda option in the brand lineup, they will decamp to Pepsi. "If Coke is a good brand, having more options is good for brand Coke," he said.
The key will be clearly differentiating each diet Coke brand so they don't cannibalize one other. Jeff Cail, general manager of AC Nielsen's AC Bases America, said that based on current marketing formulas, the Splenda version of Diet Coke, the No. 3 soft drink with nearly 10% of the market, has the potential to drain its sales by 20% to 30%.
Such cannibalization can be curbed when marketers use incremental dollars to support the line extensions rather than pull dollars from the main brand.
Dan Dillon, VP-diet portfolio for Coca-Cola North America, acknowledged that diet versions of Coke and Pepsi aren't the default choice for health-conscious consumers because they don't like the taste of the existing products or the images associated with them.
He said of the sales volume leaving colas, 18% is going to water, 30% is going to other diet brands and 50% is turning to other beverages, including non-cola carbonated soft drinks, noncarbonated drinks, teas and juices.
Acknowledging that there could be confusion with the profusion of zero-calorie Cokes, Mr. Dillon said each would get a dedicated campaign. "That's the question that is becoming top of the list for people nowadays," he said. "There's a lot of innovation, which speaks to idea of variety and the difference on shelf for Coca-Cola Zero is going to be a function of the marketing. The bundle of marketing will differentiate this product and speak to the target in ways people outside the target won't necessarily respond to."
He would not discuss specific marketing plans other than to say, "Youth today have different values and beliefs and brands today may not be speaking to them as well as Coca-Cola Zero will."
But the choice of MDC Partners' Crispin Porter & Bogusky, Miami, and independent AKQA, New York, to handle Coke Zero speaks volumes. Crispin Porter specializes in reaching Coke Zero's bull's-eye consumer-age 18-25 and largely male-with its edgy and nontraditional campaigns for Burger King and Maxim, the latter of which poked fun at "mantropy."
Christie Nordheilm, associate professor at University of Michigan's graduate business school, believes Coke Zero can succeed if "it truly is targeted differently" and if the packaging and marketing provides "search features" or cues that allow consumers to identify differences easily.
The problem is whether Coke can pull it off. "Any excellent product marketer can elicit a different perception for a brand on segments," she said. "But there is a question whether Coca-Cola is one of those marketers."
Coca-Cola Zero: No-calorie cola aimed at young adults and is flavored more like Coca-Cola Classic, but sweetened with aspartame and acesfulfame potassium (ace-k).
Diet Coke: Zero-calorie cola is said to be the formula that New Coke was based on, except that this new version is sweetened with aspartame (Nutrasweet).
Diet Coke with Splenda: Sweetened with sucralose (Splenda) and acesfulfame potassium (ace-k) for consumers who like Diet Coke, but not the aftertaste.
Coca-Cola C2: Half the calories of Coca-Cola Classic (70 per 12 ounces) and is sweetened with high fructose corn syrup, sucralose, aspartame and acesfulfame potassium (ace-k).