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Marketing by the Numbers Diet Coke with Fiber costs ($0.65 per bottle versus $0.55 per bottle for the original Coca-Cola launched Coca-Cola Plus in a limited market in product). Although some Diet Coke drinkers will switch to Japan last year and now plans to launch it nationwide in that Coca-Cola Plus, the company believes the new product will at- country. Coca-Cola Plus is a zero-calorie soda (essentially Diet Coke) with five grams of an indigestible dietary fiber called tract new customers because of its health benefits. Coca-Cola is dextrin. Although some might just call it Diet Coke with a laxa no stranger to introducing new products in Japan. The company tive, Coca-Cola Plus is touted in Japan as a health food that released Coca-Cola Coffee Plus last year and recently intro- suppresses the absorption of fat and keeps blood triglycerides duced its first alcoholic beverage called Lemon Do. at moderate levels. In fact, the product has earned the Japanese government's "gold label," designating it as a government- 7-14. What brand development strategy is Coca-Cola under- approved Food of Specific Health Use (FOSHU). Although taking? (AACSB: Written and oral communication; the new Coca-Cola Plus reaps a higher wholesale price for the Reflective thinking) company ($1.20 per 470-milliliter bottle versus $1.15 per bottle 7-15. Assume the company expects to sell 5 million bottles for the original Diet Coke), it also comes with higher variable w of Coca-Cola Plus in the first year after introduction but that 60 percent of those sales will come from buyers who would normally purchase Diet Coke (that is, cannibalized sales). Assuming the sales of Diet Coke are normally 300 million bottles per year and that the company will incur an increase in fixed costs of $500,000 during the first year to launch Coca- Cola Plus, will the new product be profitable for the company? Refer to the Financial Analysis of Marketing Tactics: Extend the Product Line section in Appendix 3: Marketing by the Numbers for an explanation re- garding how to conduct this analysis. (AACSB: Writ- ten and oral communication; Analytical thinking)