Economics for a Product Category of Your

Economics

For a product category of your choice show how you would segment the market. Discuss what variables you would use to segment the market and why you selected those variables. Then identify the market segment you see being the least served and discuss the possibilities of developing a product to serve that market. Then make a recommendation on if developing the product to serve that segment makes sense financially. Be sure to support your analysis with references.

The Coca-Cola Company is in the process of introducing a new drink: a pocketbook drink called Dasani Drops. These are drops carried in one's handbag that people can carry around with them in a compact way and then drop into water when that water is accessible turning the liquid into a healthy, tasty drink. The aim of the new drink is to use artificial sweeteners (that are considered healthier) and to lower the calorie counts in soda.

The market segmentation for Dasani Drops represents the "consumers who want a lower-calorie soft drink but have shunned diet sodas" (Strom, 2012).

The drink is comparatively expensive: $4 dollars. Some may consider this cheap, but this is more expensive than the average Coca-Cola product and may inhibit consumers, who would otherwise buy it, from procuring the item.

The proposed market segmentation for the beverage would be the following:

1. Demographic segmentation - the market would be based on factors such as age, gender, family size, income, occupation, education, race and nationality. Conceivably, a certain profile of individual is able to afford this drink and would be more attracted to its alleged health components. These people would fall into a particular age strata, and would be characterized by income, occupation, and likely, race and nationality too (since some ethnic groups are more attracted to health matters than others).

2. Psychographic segmentation -- where a combination of psychology and demographics is used to understand the potential consumer. Psychographic segmentation divides the consumer according to variables of lifestyle, personality, values and social class. Certain social strata (such as upper middle class) and those with more money may be more apt to buy the drink, particularly since it serves as status symbol. Also those with a certain personality and lifestyle (on the go and occupied with their work who don't have the time to shop for the item). The segmentation may also include people who are involved in exercise, such as bicyclists, who would also want something compact. Since these the drink is healthy, it is conceivable that the targeted market would be people who are interested in health matters and who exercise. The profile fits the middle to upper m idle class who have more time for leisure and are more idealistic (at least in terms of health)

3. Behavioral segmentation -- Coke can divide consumers according to their reaction to previous Coke health-based products such as Diet Coca-Cola and 'Zero' Coca-Cola (containing 'zero' calories). It is these consumers who, liking Coca-Cola, would likely be also interested in another health-oriented product.