Back in the day, when people noted that Diet Coke was 99% water, it was an insult. The point was that water was free, and Diet Coke was just free water plus a little bit of artificial this and that — so you would have to be a fool to pay so much for it.
Of course, times have changed. Bottled water now generates an estimated $50 billion in sales each year, with that number growing rapidly. According to this CBS News report, which puts soda revenues at $68 billion a year and stagnant, bottled water is now as big a business as soda.
All of which explains the new print ad I saw for Diet Coke, which was simply a picture of a can of Diet Coke and the words “99 Percent Water.” The implication is that if Diet Coke and water are almost the same thing, but Diet Coke tastes better, you might as well drink Diet Coke. Which is a pretty sensible point of view, as long as the 1% that is not water isn’t hurting you.
Still, imagine if an ad agency in the 1980s proposed such a slogan for Diet Coke. They would have been laughed out of the building, and for good reason. What consumers are willing to pay for a good depends on at least two things (although this is not the way economists usually talk about how demand is determined). The first is how much utility or enjoyment they get from the good. The second is how much it costs to make the good — consumers don’t like big markups, even if they enjoy consuming the good.
So, in a world where free water is the benchmark, if you make Diet Coke, you want to hide the fact that it is mostly water with a few cheap extras mixed in. On the other hand, when water is priced the same as soda, that part of the equation falls away. The emphasis can instead move to the fact that a lot of people strongly prefer the flavor of Diet Coke to that of water.
I don’t know whether this ad campaign will work, but it definitely shows cultural — not to mention economic — insight.
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On the bottled water matter, I think it has been pretty well known for a while that Dasani is filtered tap water. I don’t think Coke has tried to hide that. Personally, Dasani is my favorite bottled water for the same reason Erratica mentions for drinking regular Coke – it just tastes better. I don’t care whether it’s filtered or spring.
That’s also the reason I prefer Diet Coke over Coke. I can taste the difference so fast, I’ll return a regular Coke given to me in a restaurant (and a Pepsi, for that matter).
On the bottled water matter, I think it has been pretty well known for a while that Dasani is filtered tap water. I don’t think Coke has tried to hide that. Personally, Dasani is my favorite bottled water for the same reason Erratica mentions for drinking regular Coke – it just tastes better. I don’t care whether it’s filtered or spring.
That’s also the reason I prefer Diet Coke over Coke. I can taste the difference so fast, I’ll return a regular Coke given to me in a restaurant (and a Pepsi, for that matter).
@Erratica #5: “If one is addicted to the drink it is simply because you crave the taste.”
I think in the case of Coke (regular or diet), the caffeine plays no small part in the addiction.
@Erratica #5: “If one is addicted to the drink it is simply because you crave the taste.”
I think in the case of Coke (regular or diet), the caffeine plays no small part in the addiction.
People choose Diet drinks because there are no calories (or just 1 calorie) and the similar carbonated taste. Regular sodas are generally 150 calories per can.
People choose Diet drinks because there are no calories (or just 1 calorie) and the similar carbonated taste. Regular sodas are generally 150 calories per can.
Am I the only one that thinks Coke Zero tastes WAY better than Diet Coke? Also, Diet 7-up and Diet Sprite don’t taste that bad either. I can’t stand Diet Coke or Diet Pepsi though. Diet Dr. Pepper ain’t bad either.
Am I the only one that thinks Coke Zero tastes WAY better than Diet Coke? Also, Diet 7-up and Diet Sprite don’t taste that bad either. I can’t stand Diet Coke or Diet Pepsi though. Diet Dr. Pepper ain’t bad either.