Coca-Cola Company: Consumer Behavior Model - Case Study Example

Part 1

1. Consumer behavior model: Environmental factors

Environmental factors that influence consumer behavior is a representation of a complex sum total of customs, belief patterns, moral law, traditions, knowledge or any other form of habit that has been acquired through the society (Wright, 2006). As such, consumer behavior is influenced by one’s culture. Two of the most important factors that influence consumer behavior towards coke include social as well as cultural factors. Consumer behavior is influenced by different people such as the family, opinion leaders, social class among other individuals and groups. People in charge of service delivery of a product can influence consumer behavior through the decision-making process by reinforcing the brand image.

In regard to social factors, the Coca-Cola Company is engaged in various campaign and promotional programs. It uses many advertisements showing groups of happy and joyful people celebrating together while drinking coke. These groups could be family members, students among others. These campaigns attract such people who feel that they belong to those groups. In terms of the cultural aspect, the company’s marketing team appreciates the different cultures from different nations and markets its products to include the cultural aspects. For example, in consideration of the European culture, it celebrates Christmas through its adverts and in consideration of Pakistani culture; it features the celebration of the month of Ramadan in its campaigns.

2. Consumer behavior: Consumer factors

There are different consumer factors which play a significant role in determining consumer behavior. These are the personal factors which are unique to an individual and may include age, sex, occupation, lifestyle, personality and self-concept among others (Mooij & Mooij, 2011). There are different reasons as to why a person may decide to buy a product with respect to personal factors. The Coca-Cola Company acknowledges the importance of personal factors in its influence on consumer buying behavior. As such, it ensures that it covers all ages, different walks of life and so on and so forth. Focusing on three personal factors, we can feature age & life cycle stage, lifestyle, and economic situations.

To take advantage of age and life cycle stage, the company engages in advertising campaigns that feature people from different age groups; young and old. By so doing, it ensures that everyone regardless of their ages can drink coke. People from different cultures, subcultures, occupations, social class etc., have different lifestyles which dictate their interests, opinions as well as activities they engage in. Coca-Cola ensures that it includes a blend of all these aspects in its campaigns so that people with different lifestyles can relate to its products. To capture the economic element, the company sells its products in different packs that are affordable to all.

3. Role of involvement in consumer decision making

Consumer involvement refers to the state of mind that drives a consumer to buy a product or service. It represents the importance that a consumer places on a product or service. There are different levels of involvement that a consumer can engage in while making a purchase decision. Different factors also determine a consumer’s level of involvement. Involvement plays a relevant role in the consumer’s decision-making process as it determines whether the decision to purchase or not to purchase is made and also the time within which the decision can be made (Lamb, Hair, & McDaniel, 2009). The level of involvement that a consumer is most likely to have with coke is ‘some level of involvement’. This is because, it involves a simple decision of little bit importance to the consumer, and the consumer has to make an evaluation of some alternatives. Buying a drink of coke does not cost much to the consumer and it is thus not risky or complex to decide and so, cannot be of high involvement. It is also refreshment and consumers drink it to enjoy themselves. It cannot therefore be of low involvement since it is not habitual.

4. Consumer decision making process

The first step in consumer buying process is need recognition. In this case, the customer feels thirsty and requires a drink that can quench the thirst. Coca-cola takes advantage of this stage by informing the consumer that coke will satisfy this need. It does this through advertisements that show how a thirsty person feels good while taking the drink. The second step is information search (Lamb, Hair, & McDaniel, 2009). After the person recognizes a need, they start to search for information on how this need can be satisfied. Coca-Cola intervenes in this stage by engaging in thorough campaigns and promotions to ensure that its products are known everywhere; in shops, hotels, malls, and other outlets, so that wherever the person is, they can easily see their products. The third step is the evaluation of alternatives. After the prospective consumer has information about the different competing products, he/she evaluates them to see which one has the best offer.

Coca-Cola positions itself highly among its competitors such as Pepsi through competitive prices, ease of accessibility, blending well with food among other attributes, to capture the consumer’s attention as the best. The fourth step involves the purchase decision, whereby the consumer actually buys the product. Coca-Cola acknowledges the possibility of this decision being disrupted by negative feedback from other consumers and as such, it ensures that it appeals to masses by advertising how it can satisfy people from different cultures, social standing, economic status as well as age. By so doing, the consumer is more likely to get the motivation to buy rather than negative feedback. The final stage involves the post-purchase behavior. Here the customer may be satisfied or dissatisfied with the product and thus gives a negative or positive feedback. For satisfied customers, the company does continuous advertisements for repeat purchases and provides communication networks to enable consumers to air their complaints.

Part 2

1. Market segmentation

Market segmentation involves the process of dividing the market into sub-groups of consumers who share certain attributes (McDonald & Dunbar, 2013). Coca-Cola Company uses mass marketing strategy to sell its products whereby it considers everyone as its target customer. It uses undifferentiated marketing allowing for no segmentation. However, there is still some feature of segmentation. Two bases for segmentation for Coca-Cola include geographic and demographic segmentation. Under geographic segmentation, the company divides its consumers into international, climatic as well as local consumers.

Internationally, it segments its consumers country wise and region wise according to quality and taste. For developed countries, it offers best quality and taste and vice versa. Climatically, the company focuses on hot areas as the main idea is to serve its drinks cold. Locally, for example in some countries, it may focus more on urban than rural areas. Under demographic segmentation, the company divides its market by age, family type as well as income. For example, it introduces vanilla, lime and cherry tastes to target children aged from 4-12 and coke for younger adults. In terms of family type, it introduces the family pack to focus on family as well as groups. For income, the company uses different packing for people from different income levels.

2. Target market

Geographic segmentation for Coca-Cola Company offers better growth prospects and is thus more profitable. This is particularly true for the international markets in the developing nations. The company’s presence in the developed nations is well established to saturation points and the emergence of the health-conscious population in these regions pose a threat to the company since there is a shift to healthy drinks which Coca-Cola does not offer. However, in developing countries, people are just getting introduced to the products and are thus enthusiastic about it. These markets will definitely offer Coca-Cola greater growth opportunities. This market segment can be named “the upcoming millennials”.

3. Target market strategy

The Coca-Cola Company has successfully used mass marketing to sell its products and that is one of the reasons the company has the greatest global presence. Mass marketing allows for generalized marketing (McDonald & Dunbar, 2013). As it pursues the attractive potential in the developing countries, it should continue to maintain its presence in the developed countries in order to sustain and increase its market share. This way, the company will continue to satisfy its existing customers and acquire new ones for a more assured profitability as well as sustainability.

4. Positioning

Perceptual map

Cold beverages that quench thirst

Carbonated

Coca-cola

Fruity

Affordable

premium

Pepsi

Dr. Pepper

Product positioning involves what you do to a prospective consumer’s mind (Ries & Trout, 2001). Coca-Cola is perceived to be the most affordable as well as highly carbonated and thus most refreshing in the above product mapping. Being the market leader in the above product map, it has the best position which it needs to enhance. For this reason, it should maintain its current space and continue to compete with its competitors rather than finding a new space that may bring confusion to the existing and prospective consumer who identifies well with its current attributes.