Assignment task: By way of background, Sergio was the Chief Marketing Officer (CMO) at Coca-Cola during the 1980s and 1990s, where he was responsible for the highly successful launch of Diet Coke and the not so successful launch of New Coke. After leaving Coca-Cola, Sergio went on to establish a highly successful marketing consulting firm - which is where he encountered this situation.
When Pepsi introduced Crystal Pepsi their intention was to capture a larger market share of the soft drink market, by having a Pepsi product that competed in the lemon-lime category primarily against 7-Up and Sprite - even though it was a cola drink.
Sergio, at Coca-Cola, decided that they would go out of their way to neutralize the impact of the newly launched Pepsi product. One of Coca-Colas successful products at the time was Tab. Tab was Coca-Colas first diet cola drink, around 20 years before Diet Coke was introduced.
To combat Crystal Pepsi, a product line extension of Tab Clear was introduced to compete directly against Crystal Pepsi. The key difference between the two products was that Tab was a diet drink, competing against a full sugar clear version of Pepsi.
Coca-Colas intent, which was highly successful, was to confuse the market as to the positioning (that is, the unique benefits) of both Crystal Pepsi and Tab Clear. With this to say, Crystal Pepsi did not generate significant market share and was eventually withdrawn from the market, along with Tab Clear.
According to Sergios marketing book, the intent was always to withdraw Tab Clear as the product was simply a competitive defensive move without any long-term intention to maintain the product.
Question: Do you agree with the strategy of launching a short-term product in order to simply block a competitive move? How could this trade-off - that is, protecting market share will protect long-term profitability - be effectively implemented into a firm's hierarchy of business goals?