Customer Behavior: Development of Marketing Strategy for Coca Cola - Essay Example

?Running Head: BEHAVIOR Behavior [Institute’s Table of Contents Table of Contents 2 Introduction: 3 Market analysis: 3 1. Company 3 2. Customers 4 3. Competitors 4 4. Conditions 5 Consumer Analysis: 6 Market Segmentation: 7 Product positioning: 8 Impact on Consumer 9 Consumer decision process 11 Marketing Mix: 12 Market plan assessment 13 Reference List 14 Customer Behavior Introduction: This research paper includes the development of marketing strategy for Coca Cola. It explains all the insights and necessary description of how Coca Cola has developed itself as a successful brand despite the presence of its major competitor, Pepsi. Market analysis: Market analysis of Coca Cola can efficiently describe the factors that determine the attractiveness of its market. It also enlightens its developing opportunities and threats related to strengths and weaknesses of the company. Therefore, to achieve a better understanding of the market analysis of Coca Cola, the study can be divided into following steps of consideration that help make up a complete market analysis. Market analysis also includes the SWOT analysis, which refers to marketing audit and describes how a company’s product is going along in the current market situation (Thomas, 2009). 1. Company Coca Cola is considered to be the leading company in terms of sales and market share in the soft drink industry. It has a massive world appeal and the product image that it entails is loaded with the image that connects people from the heart. The brand is widely recognizable because its iconic image represents the world’s favorite drink and is widely used everywhere. The analysis of the greatest strength of Coca Cola reveals that branding can be considered at the top of the list. This strength allows the company to conduct a wide spread business on a global level while maintaining the usual local approach that it uses in the local market. Coca Cola believes that all customers should be treated on a consistent basis that is why it is successful all over the world and is considered as the favorite soft drink. The company itself does not own the bottling system of Coca Cola. The other independent systems produce and sell the Coca Cola products legally. Coke continues to place itself in a number of varied areas such as music, sports and events. The Coca Cola continues to utilize its sponsorship for the world’s biggest events with its strong brand positioning. 2. Customers The customers of Coca Cola are loyal to the taste. The brand image and the quality are the two essential factors that have kept them loyal for several years. Often, some would not be able to differentiate much between the competitor drinks of Coca Cola and Coca Cola itself as many of the customers do not care about what they drink. Customer’s availability requires that the Push and Pull marketing strategy should be used. Using this strategy, Coca Cola has provided sufficient coolers, freezers, and vending machines at every retail shop. Due to this reason, Coca Cola has attained success in achieving its objectives. People now know what they are drinking and what they should be drinking due to the awareness campaigns of Coca Cola for its potential customers (Friedman, 1994). 3. Competitors The major competitor of Coca Cola is Pepsi. Coca cola and Pepsi are similar drinks but what differentiates Coca Cola from Pepsi is the focus of coca cola on its distinctive features and image in the market. The branding as well as the image of Coca Cola and the value proposition are what Coca Cola aims to create on a varying level as compared to its competitor. The message of Coca Cola is based on human emotions and relationships that connect humans with each other. Coca Cola represents itself as a bridge to connect people and with its unique message “open happiness” the aim to connect its consumers with the brand is successful. The major threat that comes from its competitors is the price. The pricing strategy of Coca Cola focuses on how it can set the right price that continues to bind its customers and maintain the brand image of the company. 4. Conditions The market conditions for Coca Cola Company explain how the brand is consistent with its image in the heads of the consumers. Coca Cola currently enjoys a 50% share of the global carbonated soft-drinks industry and over 80% in many markets. Further conditions for Coca Cola market can be analyzed by conducting a situational (SWOT) analysis, which is as follows: SWOT Analysis Strengths: World’s leading brand Large scale of operations Strong revenue growth Weaknesses: Health care issues Previously failed marketing strategies Opportunities: New product Packaging changes Bottling system Threats: New viable competitors Health consciousness Consumer buying power a) Strength Coca Cola is the world’s leading brand. This serves as its strongest attribute by emerging as a unique thirst quenching brand in the past century. Coca Cola also entails large scale of operations by supplying the world’s favorite drink all over the globe with same motto and same considerations for its customers (Petretti & Beyer, 1999). The strong market share of Coca Cola has enabled it to generate strong revenue, which continues to maintain its position as a giant in the soft drinks industry. b) Weakness Due to the presence of certain compounds in coke, it can raise health concerns related to teeth problems. In addition, since it contains a high amount of sugar, it may cause other serious health problems. People being addicted to the soft drink continue to impose health effects if they consume the drink for a longer period. Another weak attribute of Coca Cola is that due to a strong market positioning it becomes a direct competitor for existing and emerging new products. c) Opportunities There are many opportunities for coca cola to introduce its new flavors in the market. The brand recognition of Coca Cola will enable it to successfully attain a new position in the market. Packaging has enabled them to acquire new margins of sale therefore change in packaging can help them increase sales and industry positioning. The bottling system has enabled the company to cover the diverse geographical areas for its sales and marketing. d) Threats The threat of new competitors however is not very substantial but it could give rise to new competitors emerging with differentiating qualities. The major competitor of the coke has enabled customers to make their independent decisions with the introduction of substitute drink. Therefore, price sensitivity is another factor that becomes a threat for Coca Cola Company. Consumer Analysis: The customer analysis of coca cola reveals information about the type of customers that Coca Cola targets. Based on demographics, the individuals are targeted between the ages of 14 to 30 years. These individuals are younger, unmarried and often students who can include coca cola as an important part of their lives. Other than this, the Coca Cola website also attracts customers by displaying a bright and colorful ambience that signals towards youth. Commercials have also focused on keeping the pointer at the young audience however; the psychological effects are also used as a part of customer motivation. In this regard, they have also successfully catered individuals aged above 40 (Dransfield, 2001). Market Segmentation: The aim of market segmentation is to focus on the aspect of who is going to buy the product. The market segmentation of Coca Cola divides its target markets into a number of groups and assists it in recognizing that where it should focus its marketing strategies to capture the right segment of customers for its production and sales. Target market The Coca Cola beverage is generally for all types of consumers however, it specifically focuses on some consumers depending on their demographics. Coca Cola’s diet soft drinks are specifically targeted for the diet conscious individuals aged 25-39 whereas it also focuses on individuals who are aged between 13 to 24. Segmentation criteria The market segment of coca cola follows a certain criteria, which enlightens the customer target market. Coca cola specifically targets the youth. Since the past days, the drink was merely marketed as a thirst-quenching beverage but now it has advanced to more developed concepts of marketing and places its focus on the youth target market. Segments The Coca Cola market is segmented in four broad ways; mass marketing, concentrated marketing, differentiated marketing and Niche marketing. The extensively used market segment by coca cola is the differentiated marketing. Differentiated marketing enables coca cola to serve all aspects of its target markets such as those of diet conscious people. Attractiveness Analysis Five main factors influence the attractiveness of the market segments; segment size, segment growth, segment profitability, current and potential competition and business capabilities. Coca Cola chooses the market segment that has the greatest potential and that constitutes its market segment size. Coca Cola focuses on individuals who are young and include coke as an essential part of their lives. The growth of the youth population increases to expand the target market of coca cola every year. This segment shows growth however, coca cola also expands its roots into targeting individuals aged above 40. The potential competition enables coke to choose the target market efficiently. As for its major competitor, the youth is an attractive market segment (Lamb, Hair, & McDaniel, 2012). Therefore, Coca Cola expands its view and begins to focus on average human relationships to gather individuals from all age groups. Coca Cola has proven that it has the capability to perform successfully in in a specific target market such as those of diet conscious drinkers. The introduction of Diet Coke has enabled coca cola to use its brand positioning to win this target market. Product positioning: The brand positioning of Coca Cola is based on two preferences; the value for money and the demographics of consumers. Brand attributes, consumer expectations, competitor attributes, price and consumer perceptions of the brand best define the brand positioning. The features of Coca Cola and its unique taste differentiate it from other soft drinks. Its major competitor has enabled it to gather a large market share and a large percentage of consumer acceptability or brand loyalty. Its unique logo and combination of red and white colors has distinctively placed it as a refreshing drink for youth and drink that people enjoys at happy moments and occasions. What consumers expect from Coca Cola is obviously the quality and consistency in providing the best taste through all these years. Coca Cola Company produces other brands, which suit the different ages and varying aspects of human lifestyles and occasions. Coke being the most favorite still faces issues with competition of pricing. However both regular and diet drinks of coca cola are sold exclusively at retail outlets with special packages of prices to combat the competitions. What consumer expects from coca cola is the quality and assurance to remain consistent in giving them what they have always enjoyed in the past centuries. In the process of brand positioning there are other factors too, which complete the positioning concept of a brand. Coca Cola labeling is displayed clearly on bottles to ensure that its consumers are given the clear and correct information about the packaging and other necessary details such as the ingredients of the beverage. The packaging also focuses on the concept of green earth ensuring that healthy measures are adopted in the packaging process of the beverage. Impact on Consumer The impact of positioning has incorporated many results in the form of consumer perceptions. Coca cola has affected the cultures all over the world in many ways. It has affected how people think about beverages now and specifically how they include coca cola as an important factor of their daily lives. The impact on consumers can be analyzed as follows: Perception The consumer perception of Coca Cola tells how deeply people are connected to this drink. With the induction of new flavor, Coca Cola began to decline miserably until the owners realized how customers enjoyed and celebrated the classic coke flavor. With the restoration of the classic flavor, the market share for coca cola soon began to upraise and matched its major competitor, Pepsi. The perception about Coca Cola brands is that they offer drinks for all types of people. For instance, people with diet consciousness can reap greater benefits with Diet Coke (Disselkamp, 2002). Learning & memory The reason to remember Coca Cola is that Coca Cola with its attractive advertisements tries to build the focus on individuality. It describes that coke is attached to a number of people belonging from the same age group yet different professions. Consumers remember coke as a part of their integral food and drink component because coca cola enlightens its attachment to individual personality. Motivation, personality & emotion Coca Cola represents itself as a drink that becomes an integral part of our happy and successful life. It guarantees motivation and enthusiasm with its unique taste and quality representation of the image. Consumer attitude assessment Consumer attitude towards coca cola can be assessed by analyzing its target market segments. The target market for coca cola is the youth. It includes both men and women ranging from 14-39 years of age. The consumer attitude of Coca Cola can be best described with the consumer decision process, which incorporates the major influences of decision-making factors to buy coke. Consumer decision process The consumer decision process for Coca Cola can be described on the basis of classic model of decision-making process. This model is as follows: 1. Need recognition & problem awareness: The internal stimulus creates the awareness for anything and so thirst triggers consumers to want a coke. Customers can opt for a variety of drinks such as plain water or other competitor’s drinks of coke but choosing coke over these options highlights the success of coca cola as their first option. Coca Cola satisfies both biogenic needs and hedonic needs of its consumers and therefore understands the importance of targeting higher level needs to ensure greater customer satisfaction. In order to build a need for coke, numbers of slogans are used that attract customers and affect them psychologically. Examples of such slogans are “coke adds life”. 2. Information search Customers engage themselves into two forms of searches; the internal search and the external search. The Coca Cola consumers focus on their cultures and subcultures where coca cola targets its customers. It appeals to different segments by focusing on the family values of consumers from different ethnical backgrounds. It also focuses on the preferences of different generations. 3. Evaluation of alternatives Consumers continually look for alternatives therefore coca cola focuses on being differential and being the first option to its consumers. The pricing and the quality, both come into play when the alternatives are evaluated. 4. Purchase The placing and distribution of coca cola is strong enough to help customers make readily decisions for their purchase of soft drinks. The availability of coke and the right pricing strategy has enabled coca cola to be the first option of its consumers. 5. Post purchase evaluation Coca Cola has placed itself to a position of post purchase consonance, which enlightens greater satisfaction by consumers. Thus, consumers are never dissatisfied by the quality and taste of coca cola. Marketing Mix: Coca Cola Company currently has 3,300 products. The marketing mix for coca cola has been changing over the past many years. A complete marketing mix strategy for Coca Cola is describes below: Product: Coca Cola comes forward as the first favorite drink of the entire world due to its unique and differential marketing strategies. Coke has been a favorite beverage for a long time and continues to enjoy its satisfying position in the market as a first preference of many soft drink lovers. Price: Pricing for Coca Cola is done according to the demographics and geographic segments of the product. The pricing strategy is based on its major competitor Pepsi therefore; they have formed a cartel to ensure that the prices are stable in the market for their customers. Place Being the most favorite brand of the world, Coca Cola has based its distribution on the concept of mass availability and mass promotion. Today, people can easily see the coca cola products at every retail and super stores. Coca Cola has expanded its root extensively to target the niche market segments. Now their customers do not only include the high-class people but also the villagers and the country people who thoroughly enjoy their coke like all other drinkers around the world. Promotion The varying promotional strategy of coke has enabled it to target the wide range of audience. It specifically focuses on the lifestyles and behaviors of its consumers. Market plan assessment 1. Competitor’s response Pepsi has been the major competitor for Coca Cola since a long time. In the past, it has showed fierce competition with Coca Cola trying to compete the best standards of coke. In this regard, Pepsi emerged with a new taste to compete with Coca Cola. In competition, Coca Cola decided to switch to the similar flavor of their drinks, which resulted in a failed strategy and caused Coca Cola a heavy loss on market shares. In recent examples, Pepsi competed with Coca Cola upon the Coca Cola beverage-dispensing machine, the Coke Freestyle. Pepsi introduced Pepsi Fusion to compete with the attractive vending machine that serves as a successful distribution strategy for many food products (Asongu, 2007). Pepsi has been competing with Coca Cola by introducing other products that matched the quality and consistency of Coca Cola products such as those in lime flavor drinks. The cola war may not be over yet. With the invention of new innovative products, these two competitors could emerge once again on the surface with unique value propositions and marketing strategies. 2. Anticipated results & contingencies The results of this study explain that Coca Cola is a successful brand despite its fierce competitor Pepsi. It is imperative that coca cola should continue to bring innovations in its products and the way of marketing in order to sustain in the beverage industry. Coca Cola focuses on all age groups whereas Pepsi specifically targets the youth. Although youth comprises a large percentage of the total population, but Coca Cola focuses on bringing people together through display of emotions. Reference List Asongu, J. J. (2007). Strategic Corporate Social Responsibility in Practice. Lawrenceville, GA : Greenview Publishing. Disselkamp, M. (2002). Eurobrands. Chicago: GRIN Verlag. Dransfield, R. (2001). Corporate Strategy. London: Heinemann. Friedman, K. (1994). Elvis, Jesus and Coca-Cola. New York : Bantam Books. Lamb, C. W., Hair, J. F., & McDaniel, C. (2012). Essentials of Marketing. Mason, Ohio : South-Western Cengage Learning. Petretti, A., & Beyer, C. H. (1999). Classic Coca-Cola Calendars. Iola, Wis. : Antique Trader Books. Thomas, M. (2009). Belching Out the Devil: Global Adventures with Coca-Cola. New York : Nation Books. Read More