When it comes to marketing a feeling can be more important than a fact.  In the early 2010s, Coke was faced with plateauing sales mostly due to a declining engagement with Millennials and Gen Z consumers.  Research showed that Millennials and Gen Z’s viewed Coca Cola as a generic, mass-market product that had little personal relevance.   Coke needed to find a way to reconnect emotionally with this younger audience and differentiate its product in a crowded beverage market…but how?

Aware that the Millennials and Gen Zs felt emotionally disconnected to Coke as a brand, further research revealed that there was a segment of those customers who valued personalized social sharing experiences.  Those younger consumers desired products that felt uniquely theirs, products that they could share with others both in person and online on social media.

Armed with these market insights, it was clear to Coke that they didn’t need to create a new product to serve this younger market but rather they needed to create a new campaign to address the needs of Millennials and Gen Zs.    Employing the same efforts that one might associate with new product development, Coke designed the “Share a Coke” campaign.    The campaign replaced Coke’s bottle logo with popular first names that were specific to each market.  Because cultural and social norms are so different in each market, Coke used regional data to determine what were the most popular first names (and nicknames) in each region.  Coke then put those names on their bottles, and by doing so  transformed an everyday soda bottle into a social connection.  People searched for their names on the bottles, bought bottles for friends, and shared photos online tagged “#ShareACoke.”  The results were impressive:

• Sales among young consumers rose sharply for the first time in over a decade.
• Coca-Cola experienced a massive uptick in organic social media engagement.
• The campaign created a new emotional link between consumers and the Coke brand.

What can we learn from Coke’s unique segmentation strategy:

• Segmentation can identify under-served customer groups.  Millennials and Gen Z’s viewed coke as a generic brand that brought them little value.
• Innovation isn’t always a new product:  Segmentation can help promote products and services to serve specific segments’ needs.  Coke designed the “Share a Coke” campaign to build relationships with disenfranchised Millennials and Gen Z’s.
• A feeling is often more important than a fact:  Coke understood that segmentation isn’t just about demographics but about tapping into customers’ emotional needs which in this case was for identity and connection.

The Coke story demonstrates the power of segmentation in driving business growth by investing in research and listening to customer feedback.  Effective segmentation is more than a marketing tool—it’s an engine for innovation and profitable growth. By differentiating its product through personalization, Coca-Cola reignited its brand relevance and created measurable value in an otherwise saturated drinks market.  Now a question for you – what are you doing to create significant value your market?  If the answer is “not much” – start segmenting your customers!