Reference no: EM132223561

An article in the Wall Street Journal described how the next "Pepsi Generation" will likely drink diet cola. Pepsi learned that one-third of teens are diet soda drinkers and that teens start drinking diet soft drinks at a very early age. However, a substantial portion of young people, particularly males, don't consider diet sodas cool. According to the chief marketing officer for Pepsi-Cola North America, "We are treating Diet Pepsi as the flagship brand… It's a big step for us." Indeed, this is a major break with the traditional soft-drink market, where the sugar-sweetened version of Pepsi still dominates in market share. However, with concerns of rising obesity and schools cutting back on sugar-sweetened drinks in vending machines, soft-drink manufacturers, like Pepsi, are responding with increased marketing of their diet soft drinks. As part of this new change in focus, Diet Pepsi will be marketed as a hip, cool brand for everyone, including teenagers and baby boomers. Meanwhile, Pepsi is narrowing its sales pitch for regular Pepsi-Cola to "soda drinkers younger than 25, Latinos, African-Americans, and sports fans."

1. By treating the diet soda market as relatively homogeneous, what marketing strategy is Pepsi using?

2. Which segmentation variables is Pepsi using when it narrows its marketing efforts for regular Pepsi-Cola to "soda drinkers younger than 25, Latinos, African-Americans, and sports fans"?

3. The article noted that a substantial portion of young people don't consider diet sodas cool, particularly men. What is Pepsi trying to accomplish with its increased effort to reach these consumers?