Coca Cola Brand - Consumer Decision Making - Case Study Example

Name: Tutor: Course: Date: Executive Summary 3 Introduction 3 Consumer Decision Making 4 Marketing Segmentation, Targeting and Positioning 5 1. Geographic segmentation. 5 2. Demographic Segmentation 5 3. Psychographic 6 Internal Factors Influencing Consumer Decision Making Process 6 1. Motivation 6 2. Personality 6 3. Self-Concept 7 4. Perception 7 5. Consumer imagery 8 6. Learning 8 7. Attitudes 9 Conclusion 9 References 10 Executive Summary This paper discusses the Coca Cola brand. It analyses the influence of internal factors affecting consumer decision making with a close look at Coca Cola. For the last century, Coca Cola has been the world’s leading soft drink manufacturer and has maintained its grip on the market despite the fact that it has consistently faced stiff competitors from other big companies such as Pepsi. The paper looks at how the company has managed to position itself as the market leader and maintain its dominance. It looks at how the company has done its marketing segmentation and targeting in order to appeal to diverse markets and retain them. The company has clearly understood what it needs to do to enter into new markets and maintain a grip on its current market by delivering what consumers need. Introduction The product selected for analysis is Coca Cola. This is because of two main compelling factors. First is its longevity. Since its invention in 1886, the brand has withstood the test of time to remain, by far, the world’s leading soft drink. The second factor is competitiveness. Coca Cola has remained competitive over the centuries and decades and nothing really seems to threaten its domination of the world market. This paper discusses the influence of different internal factor in consumer decision making for the Coca Cola brand. It explores its marketing mix elements, consumer decision making process and marketing strategy. Consumer Decision Making The five steps in the consumer decision making process are need recognition, information search, evaluation of alternatives, purchase and post-purchase. In the need recognition stage, a consumer is faced with an imbalance between the desired and the actual state. The consumers realize they have a need they have to fulfill and marketers help them recognize this need. For the case of Coca Cola, this is achieved through intense marketing and visibility. The second stage is information search. Once consumers have recognized a need, they search for information on the various products that can satisfy that need. This information search can either occur internally or externally. Internally, they can try to recall of a way of satisfying the recognized need wile externally, they can actively search for a solution in the external environment. This can be aided by personal experience or the presence of a marketing-controlled information source such as the presence of an advert or promotion campaign (Armonk & Sharpe, 2011, p.126). The third stage is evaluation of alternatives. Here, the consumers evaluate the different alternatives they can use to satisfy their needs. They make a decision on which commodity to settle on based on the information stored in their memory or that obtained from external sources. They subject the available commodities to a set criterion and decide the product to purchase that they believe will best solve their need in their current situation. The fourth stage is purchase decision. Ones’s choice from the available alternatives is made. The decision can be influenced by unanticipated circumstances such as promotional deals on unpopular products which can make a consumer choose a product they would otherwise not have chosen. The last stage is post-purchase behavior. After buying a product, the consumers have expectations on the product. These expectations determine whether a consumer is satisfied or not. Satisfaction normally leads a consumer to buy the product again in future (Armonk & Sharpe, 2011, p.149). Marketing Segmentation, Targeting and Positioning Over the years, one approach that Coca-Cola has used to maintain its grip of the world soft drink market is proper marketing segmentation, targeting and positioning. It uses multi-segment targeting strategy. It then comes up with a marketing mix for each of the targeted segments. Its segments are: 1. Geographic segmentation. Coca Cola has come up with different products that target different ethnic geographical locations such as continents and countries. So far it is the leading soft drink sold in most countries in the world. For instance, in its marketing, the main idea is to serve its products cold and this mainly targets hot areas such as the middle East. The pricing also varies from country to country depending on the income levels of people in that country. 2. Demographic Segmentation Coca Cola uses age, sex, family type an income levels in its marketing demographic segmentation. For example, It segments small kids by introducing tastes like cherry, lime and vanilla. On gender segmentation, Coca Cola came up with Coca Cola Zero in order to appeal to men and Diet Coke in order to appeal to females. To focus on the family, it has an economy pack and to focus on income levels, it uses different packing such as recyclable and one-time-use packages (Grewal et al, 2011, p.247) 3. Psychographic Coke segments all consumer classes by targeting psychographic variables such as lifestyle, occupation, personality, social class and level of education. Coca Cola strives to maintain its domination of the world market, conscious of the fact that people prefer to be associated with well-known and popular products. It therefore continually communicates the message that it is the most loved and popular soft drink (Eelbarz, 2013). Internal Factors Influencing Consumer Decision Making Process These factors include motivation, personality and self-concept, perception and consumer imagery, learning and altitudes (Solomon & Stuart, 2000, p.138) 1. Motivation Buying decision is influenced by a motivation to buy and marketers take advantage of this motivation. The needs that consumers seek to fulfill by purchasing a product are the motives for buying. The best known theory of motivation is the Maslow’s hierarchy of needs. These are arranged as: Physiological, safety, social, esteem and self actualization. As each of these needs is satisfied substantially, the next need becomes the dominant one. To satisfy a consumer, the marketer needs to know at which level the consumer is because this means the next need is what he/she is focusing on. Coca Cola has exploited this theory well through relentless marketing and associating its products with appealing aspects such as social class, esteem, and safety of its products in order to appeal to consumers across the board (Robbins, 2009, p.145). 2. Personality Every consumer has a distinct personality and it is up to the marketer to identify this personality in order to understand the consumer. There are five fundamental personality traits: agreeableness, conscientiousness, negative emotionality, extraversion and openness (Griffin, 2008, p.263). 3. Self-Concept This refers to how consumers view or perceive themselves. It includes perceptions, beliefs, attitudes, and self-evaluations. Changes in self perception are very gradual and it is through this self perception that individuals define their identity which in turn determines their behavior. Human behavior is dependent on self concept and since consumers want to protect their identity, their buying decisions reflect their self image. Coca Cola is continually associating itself with perfection as the brand of choice and this has greatly helped it maintain its market domination (McDaniel, 2013, p.76). 4. Perception Perception is the process by which consumers acquire information regarding their environment through the five senses of touch, smell, hearing, sight and taste. It is achieved through a set frame of reference composed of ideas, beliefs, attitudes and values which can be influenced by a marketer. A marketer needs to possess knowledge about the perception process because it leads to a response which he/she must take advantage of. The perception process starts with environmental stimuli, information input, perceptual selection, perceptual organization, perceptual interpretation and finally responses reflected in the decision to either buy or not buy (Strydom, 2004, p.43). Perceptual selection is the process the perceiver uses to make a choice between the relevant and irrelevant environmental inputs in his opinion. These inputs can be influenced and for the case of Coca Cola, it feeds the consumers with information they can associate and identify with thereby making it relevant to them. This is followed by perceptual organization which is composed of the activities performed by the perceiver group (target consumers) to the environmental inputs. Once this is over, it is followed by perceptual interpretation which involves the perceiver trying to draw meaning of the patterns formed through perceptual organization (Sahaf, 2008, p.106).m Coca Cola aids its consumers in this process through the use of slogans such as “spreading happiness since 1886,” “Coke adds life,” and “open happiness”; slogans that consumers can associate with or want to be part of. 5. Consumer imagery Imagery refers to the type of association that a product can get linked with over time. This has a huge impact on how consumers view the product. It helps the organization shape itself in the consumer’s psyche because consumers prefer to buy products that they believe are congruent with their personal image (Hoyers & Pieters, 2013, p.108). For instance, Coca Cola has long been associated with freshness because it has consistently portrayed itself as the refreshment drink of choice and this has sunk to the consumers mind such that they choose Coke every time they go for refreshments. 6. Learning Most of the consumer behaviors result from learning. This is a process that creates changes in behavior through practice and experience. Learning is either experiential or conceptual. Experiential learning occurs through experience which alters behavior. For instance, if you drink a drink such a Sprite and love it, you are likely to keep on drinking it, preferring it over other variants. Conceptual learning on the other hand is not acquired through experience. It is influenced through secondary information such as what you hear about something. For instance if you repetitively hear Coca Cola being taunted as the best soft drink through adverts, you are likely to believe that (McDaniel, 2013, p.79). 7. Attitudes Attitudes are linked closely to values. An attitude is a learned way of responding consistently to an object, such as a product. They rest on the value system of an individual which is a representation of personal standards for right or wrong, good or bad, etc. they are more enduring than beliefs. It is therefore imperative for a marketer to make his consumers develop the right attitude towards his products to convert them to lifetime consumers (McDaniel, 2013, p.80). Conclusion Today, brands must continually adopt new marketing strategies in order to survive competition and develop a competitive advantage over their rivals. To succeed, a brand must begin with positioning itself in the minds of its target consumers. This should be in such a way that the brand is persuasive, distinctive and offers the consumers better value than that offered by its competitors (Sengupta, 2005, p.3). Coca Cola has positioned itself as the best soft drink brand in the world market. This has succeeded through the use of promotional campaigns as well as provision of high quality drinks. The success is owed to both marketing and quality of the products. Motivation is what drives consumers to buy one product instead of the other. Marketers take advantage of this by being guided by the Maslow’s hierarchy of needs. This theory has proven to be particularly useful and effective for marketers since it helps them succeed in their marketing campaigns. As a person fulfills the needs in a particular level, he/she immediately turns onto the needs on the next level (Redman, 1979, p.58). It is therefore imperative for a marketer to understand the level in which his target customer is because such a customer will only be interested in the needs on the next level. Failure to make this distinction would deem a marketing campaign ineffective. Coca Cola understands this and also appreciates the fact that customers have different income levels and require differentiated products such as in packaging. In view of this, it packages its products in either disposable or returnable bottles, both containing the same drink but sold at different prices in order to satisfy the needs of consumers with different levels of income. References Eelbarz, 8. (n.d.). Coca-Cola: Ch. 8 - Segmenting and Targeting Markets. Coca-Cola: Ch. 8 - Segmenting and Targeting Markets. Retrieved April 18, 2014, from http://elbaz-coca- cola.blogspot.com/2011/11/ch-8-segmenting-and-targeting-markets.html Grewal, D., & Levy, M. (2010). Segmentation, Targeting and Positioning. Marketing (2nd ed., p. 247). Boston: McGraw-Hill Irwin. Griffin, R. W. (2008). Basic Elements of Individual Behavior in organisation . Fundamentals of management (5th ed., p. 263). Boston: Houghton Mifflin Co.. Hoyer, W. D., & Pieters, R. (2013). Memory and Knowledge. 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