Internal Factors Influencing Consumer Decision Making Process - Coca Cola Soft Drink - Case Study Example

Internal Factors Influencing Consumer Decision Making Process: A case of Coca Cola Soft Drink Author’s Name Grade course Institution Tutor Date Table of Contents Executive Summary……………………………………………………………………………..3 Introduction……………………………………………………………………………………...4 Product Overview………………………………………………………………………..4 Consumer Decision Making…………………………………………………………………….4 Coca Cola Marketing Strategy and Consumer Decision Making Process…………………...5 Perception………………………………………………………………………………………...5 Learning………………………………………………………………………………………….8 Attitudes………………………………………………………………………………………….9 Consumer Imagery……………………………………………………………………………..11 References……………………………………………………………………………………….14 Executive Summary This report outlines the influence that consumers’ internal factors in the consumer decision making process involving different products or services that give the same benefits when consumed. This reports particularly talks about the decision making process when it comes to choosing coca-cola products over other competitor soft drinks, more particularly Pepsi Cola, which is Coca-Cola’s main competitor in the soft drink market. Consumer decision making process involves five steps; identification of needs, gathering information, evaluation of available alternatives, purchasing and finally making post purchase evaluation. All these steps require strategies that will ensure a company’s product is ranked high by consumers. Before making a decision, consumers have to contend with internal and external factors which will at the end determine the type of product to be chosen. Internal factors of perception, consumer imagery, attitudes and learning all play a role in the decision making process. However, for businesses to ensure that these factors are effective, different marketing strategies have to be employed for product success to be achieved. Segmentation, targeting and positioning summarizes the most important marketing strategies that coca-cola has employed to see that it beats Pepsi Cola in the soft drink and claim the biggest market share. Introduction Product Overview The Coca Cola beverage is a product of the Coca Cola Company. It is the most popular soft drink today as well as the biggest selling and the most well-known product globally (Bell, L. 2004, p. 3). The Coca cola soft drink was developed in Atlanta by Dr. John Pemberton in 1886 where it was preliminarily offered as a fountain. The mixing of Coca-Cola syrup together with carbonated water made up the fountain (Bell, L. 2004, p. 9). By 1895, the Coca-Cola product was being sold all over the United States of America. Then in 1899, the Coca-Cola Company began franchising bottling operations in the US (Bell, L. 2004, p. 13). This report will thus look at the influence the internal factors have on the decision making process of consumers before purchasing the Coca-Cola product. Consumer Decision Making Consumer decision making may be defined to as the process whereby consumers identify needs, gather information, evaluate available alternatives, implement decisions made by making a purchase and finally make post purchase evaluation (Lantos 2010, p. 24). These actions are dictated by psychological and emotional factors and influenced by external factors (culture, reference groups, and social values) and internal factors (perception, consumer imagery, learning, attitudes). The decision making process is made up of five steps that the consumer must go through before making the final decision to purchase a product or service (Lantos 2010, p. 56). The coca-cola company has mastered and understood the five steps of the decision making process and this has helped the company to create marketing strategies that are aimed at the right target market (Bell, L. 2004, p. 46). Each step in the decision making process is as important as the next and as requires strategy that is unique so as to keep a business ahead of the competition. When developing a market strategy, business must look into two factors which become very important to the success or failure to the market strategy chosen. These two factors are whether the product is already in the consumer mind or it is a new product never heard of by consumer (Lantos 2010, p. 52). Coca Cola Marketing Strategy and Consumer Decision Making Process Unless one is living in a cave, it is true to point out that coca-cola is a product that almost everybody in the world has heard of; whether through the media or by physically interacting with it (Bell, L. 2004, p. 23). It is a product that is portrayed as a drink that will take care of the need to reduce one’s thirst. However, it is a fact that by drinking water or taking any other soft drink, one’s thirst will be quenched. Putting this into perspective, it would be right then to describe coca-cola as a want and not a need (Majumdar 2010, p. 31). This is because the choice to take coca-cola when one feels thirsty will most often depend on external and internal factors. This report will however deal with internal factors that are, perception, consumer imagery, learning and attitudes. Perception Perception is described as the cognitive process within which people organize, interpret and comprehend their surroundings which comprises events, products, and people (Jansson-Boyd 2010, 76). In the decision making process, it is expected that one comprehensively understands the existing situation together with the facts that accompany it in order to come to a decision. If all factors are not considered, then the wrong decision, in most cases, will be made (Jansson-Boyd 2010, 79). Coca-cola has positioned itself in the market in such a way that it is virtually in the minds of its consumers. The amount of money that the Coca-Cola Company pumps into the advertising of their brand is mind boggling (Mooij 2010, p. 31). People keep asking why a well-known multi-billion dollar company would use so much money through advertising. The very reason why it is well-known is that they spend such huge sums on huge advertisement campaigns is the very reason why they want to remain the only product in the minds of their consumers (Mooij 2010, p. 32). Perception is thus based on the theory of attribution whereby it tries to explain how consumers make different judgments on different products and services depending on what they attribute to their behaviour (Sanderson 2009, p. 112). Linking the theory to consumer decision making, it would be correct to state that when consumers interact with a product and experience what it has to offer with regards to their own needs, then they attempt to determine if it was internally or externally caused. Coca-Cola’s positioning in the market has been so vigorous that it is the only soft drink consumers can think of off-the-cuff that it has become so difficult to forget about it. The perception that coca-cola soft drink is more real compared to other competitor soft drinks thus drives consumers to make repeat purchase decisions in favour of coca-cola. Perception has several elements that have become important in the decision making process for consumers (Ramesh 2009, p. 114). The first, selective perception is the idea that product perception is created through media messages and such perceptions ignore different perspectives regarding the given product (Ramesh 2009, p. 115). Coca cola has been spending millions over the years through media advertising and slogans such as ‘The Real Thing’ have created the perception that coca cola is the real thing and the rest of the soft drinks are ‘fakes.’ This becomes important in the information gathering stage of the consumer decision making process and effective media exposure have seen most consumers but coca-cola products (Mooij 2010, p. 52). The second element is perceptual organisation which states that everything consumers see, they see for the first time (Ramesh 2009, p. 116). This is very important to coca-cola because the more they make their product and marketing strategies fresh, then consumers will keep seeing them as a new and fresh product. Advertising for coca-cola has been in such a way that it creates a craze surrounding its products that will get people talking. The more the coca cola product remains fresh in the minds of consumers, the higher the chances they will buy it and ignore other competitor products. The third element, perceptual interpretation is based on the premise that consumers see what they expect to see and they use cues to assist them with identifying and defining what is real and what is not (Ramesh 2009, p. 118). The ability of a business to leverage on this will act to the advantage of the company. Coca-Cola’s main colour theme is red and has always associated itself with everything red. For instance, the Christmas season has always been associated with the red colour, especially Santa Claus’s red outfit. The coca-cola company has therefore been linked to the company due to its annual Coca-Cola Christmas campaign that has been going on for years. As such, every festive season consumers purchase more coca-cola soft drinks than any other beverage. Learning Learning is an important factor when it comes to consumer decision making process. More particularly, it comes it is most important in the purchase and post purchase stages of the decision making process (Hoyer, MacInnis and Pieters 2012, p. 35). Learning can be either behavioral or cognitive. Behavioral learning in consumer behaviour concentrates on behaviour change that occurs mainly as an outcome of experience and as such lays emphasis on stimuli and response. One theory supporting learning is the classical conditioning learning theory which explains that the response brought out by one object will be brought out by another object incase both objects occur together at the same time (Mooij 2011, p. 211). Once a customer purchases the coca-cola product a learning process is initiated regarding the experiences that will be got from consuming the coca-cola soft drink. The advertising campaigns run by the company portray the soft drink as a thirst quencher and by experiencing its thirst relieving qualities consumers make a decision to make coca-cola their go to drink whenever they feel thirsty. Cognitive learning on the other hand tries to explain that learning in itself is knowledge and it focuses on the internal characteristics of the consumer (Mooij 2011, p. 312). It also lays emphasis on the role that memory and thoughts have to play in the decision making process. Coca-Cola’s positioning of its products is in such a way that its product remains in the mind of the consumers (Ramesh 2009, p. 75). A good analogy is where one is thirsty and wants to quench his or her thirst. The consumer will definitely go for a soft drink that he or she is aware of and has seen the adverts rather than go for a competitor soft drink product that he or she does not know well. Cognitive learning usually takes place just before the purchase stage of the decision making process. In the post purchase stage, the cognitive dissonance theory takes centre stage. It attempts to explain a situation where an individual has to change beliefs, attitudes and behaviours as a result of conflicting attitudes due to the feelings of discomfort (Wicklund and Brehm 2013, p. 1). It is of the idea that there is an inner feeling that human beings need to maintain harmony in their beliefs and behaviors. Consumers of the coca-cola product are thus inclined to maintain harmony on their belief that the coca-cola soft drink is the best one in the market. After purchasing the coca-cola soft drink and consuming it, most consumers resort to keep consuming the same soft drink. This is because they would not want to disrupt the benefits they derive from consuming other competitor soft drinks such as Pepsi. Attitudes The value of consumer attitude towards a given product is one very important internal factor of the decision making process to any business (Stoebe 2013, 25). The attitudes of a consumer can either be a barrier or an advantage to a business. An attitude in consumer behavior can thus be defined to as the overall evaluation formed of a product by consumers over time. It plays a major role in satisfying consumer’s personal motives as well as affecting their purchasing habits. Therefore consumer attitude comprises of a set of beliefs, feelings and behaviours towards a given product or service. Consumers will thus have negative or positive feelings and or beliefs towards a product (Lamb, Hair and McDaniel 2010, p. 222). The Fishbein model of attitude employs three components of attitude. The first attitude is the salient beliefs referring to the beliefs consumers may have as they evaluate a product, in this case, the coca-cola soft drink (Mullen, Johnson and Johnson 2013, p. 61). They will thus develop certain untested beliefs regarding coca-cola majorly through the company’s media campaigns. This will lead to the second component, object-attribute connections, which will indicate the possibility of importance a given attribute has with a related competitor product (Mullen, Johnson and Johnson 2013, p. 61). Here, after developing beliefs on the coca-cola soft drink, consumers will want to bring out these salient beliefs by connecting the coca-cola product to the beliefs. The last attribute, evaluation, will involve the measurement of how the attribute is important to the consumers (Mullen, Johnson and Johnson 2013, p. 62). This they will do by making a comparison of coca-cola and competing soft drinks and then make a decision as to which product is, to their own evaluation and perception, superior to the others. Through the study of past and forecasted consumer behaviour, coca-cola has managed to precisely target its different market segments appropriately thereby leveraging on its brand name by influencing the attitudes of consumers. The Fishbein model is more often employed by businesses to reduce attitudes into a score (Mullen, Johnson and Johnson 2013, p. 68). The coca-cola company has targeted different market segments in the soft drinks market. It is aware that different demographics will have different attitudes towards the coca-cola soft drinks product. As such, the company has come up with creative marketing campaigns that target different demographics in different ways but with just one decision in mind; to purchase its coca-cola products (Lopez 2013, p. 6). By individually targeting its target markets, the soft drink personifies its advertisements in a way that consumers get emotionally and physically attached to it and this will lead to an easy decision making regarding whether to buy coca-cola soft drinks or competitor soft drinks (Lopez 2013, p. 8). It is important to note that attitudes may develop as a result of personal experiences that are either positive or negative or from external influences or opinions of a certain product. Whatever the case may be, attitudes are enduring and once developed are difficult to change (Stoebe 2013, 37). Consumer Imagery Imagery refers to the sort of association that a brand could possibly be linked with over a given period. It thus plays a very important role in determining how consumers will perceive a said brand and the manner in which they will react to it in the future (Batra and Scott, 2002, p. 56). Brand imagery therefore is important when it comes to determining the relations that consumers psyche will have with the product. Consumer imagery is thus a phenomenon whereby a consumer tries to preserve his or her own image by purchasing products or services that they believe are in harmony with their own self images and therefore avoid those that disturb this harmony (Batra and Scott, 2002, p. 89). It is human nature for a consumer to want to be associated with a well known brand such as coca-cola. It says a lot about the person and this is the reason why the Coca-Cola Company will pay a lot of money just to have famous celebrities and athletes be seen with a coca-cola bottle. As such, consumers will want to be associated with these famous people by also consuming coca-cola products. This has given the company mileage over competitor soft drinks. To make consumer imagery a success, businesses have to position their products strategically. Such strategies will include umbrella positioning, competitor positioning and value-based positioning. First off, umbrella positioning refers to a market strategy a company owns a vast majority of products that consumers buy repeatedly (Sengupta 2005, p. 56). In most cases, it is difficult for consumers to tell which company owns this vast array of products and coca-cola is one such company. Over the years, coca-cola has bought several soft drink companies such as minute maid and Schweppes and retained their names. Consumers buying these products may not know that they are owned by the coca-cola company. However, when they do know the vast number of products the company has under its management then it positions itself in the mind of consumers that most, if not all soft drink brands, are its brands. Umbrella positioning has helped coca-cola products find their way into the market easily without the company having to spend a lot of money on availing new products. This thus has an influence in decision making regarding purchasing coca-cola soft drinks instead of other soft drinks. Competitor based positioning is also another strategy to enhance consumer imagery. It is mostly employed in a highly competitive market whereby one competitor looks at the strategies employed by another competitor and doing something to counter it (Sengupta 2005, p. 66). Coca-Cola’s main competitor over the years has been Pepsi Cola and as such has positioned itself against it. It is a continuous battle that tries to determine which of the two brands has the best soft drink products. Consumers always want to be associated with the best products as being the best is part of their image and preserving it is very important (Lopez 2013, p. 29). Over time, coca-cola has proved to be the most popular brand of the two and it is the reason why in most social events, the non-alcoholic soft drink of choice has mostly been coca-cola products. Creative slogans such as “The Real Thing” have been Coca-Cola’s driving force and consumers who want to be associated with real things opt for coca-cola rather that Pepsi Cola (Besanko, D. 2010, p. 52). Being an oligopoly market with few sellers and many buyers, the coca-cola company has leveraged on its vast array of products and priced products strategically competitively against those of Pepsi Cola. The third positioning strategy is value-based positioning and it is based on the relationship that exists between quality and the price of a certain product (Sengupta 2005, p. 88). Coca-cola consumers do not want to spend a fortune to quench their thirst or be associated with the brand ‘coca-cola’ and so the company has come up with strategies that have enabled consumers to both enjoy the product at affordable prices (Lopez 2013, p. 34). To an extent, consumer imagery is mostly associated with luxury products which are too expensive in most cases. However, coca cola soft drink is not a luxury product and therefore at affordable prices, consumers can still connect with the soft drink company. The affordable pricing for quality coca cola beverage beats the Pepsi products by a long range and these two positive components play a huge role in consumer imagery with the coca-cola product. References Bell, L. (2004). The story of Coca-Cola. North Mankato, Minn: A+. Lantos, G. (2010). Consumer Behavior in Action: Real-Life Applications for Marketing Managers. Armonk: M.E. Sharpe Tritip, K. (2010). Factors Influencing Consumer Decision-Making in Dietary Supplement Consumption. Saarbrücken, Germany: Lambert Academic Pub. Majumdar, R. (2010). Consumer Behaviour: Insights from Indian Market. New Delhi: PHI Learning. Jansson-Boyd, V. (2010). Consumer Psychology. Maidenhead: Open University Press. Mooij, M. K. (2010). Global Marketing and Advertising: Understanding Cultural Paradoxes. Los Angeles: SAGE. Sanderson, C. A. (2009). 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