Feed your curiosity on how Coca-Cola continuously provides premium quality products by exploring its marketing principles effectively.
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Introduction
Coca-cola is generally tagged as the 'soft drink' of the world (Bell 2004). The company started selling its drink in 1886 when Dr. John S Pemberton charged his customers five cents per bottle. Since then, the brand has become the leading soft manufacturer globally with over 700,000 employees with more than 500 brands.
The company has been very successful in its campaign that it has solidified its status to be one of the icons in American culture. As it continues to expand globally, Coca-Cola partnered with several bottlers worldwide to go over all the processes of every product.
Behind the company's success is a marketing approach that typically guides Coca-Cola to market its products. Most companies generally classify their marketing strategies into different categories. As with Coca-Cola, market segmentation, targeting, and positioning are three essential factors that helped the company effectively cater to its target customers.
The subsequent chapters of this article will analyze these three variables in Coca-Cola's marketing strategy. This can also serve as a guide for startups to formulate their marketing approach.
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Market Segmentation of Coca-Cola
Market segmentation refers to classifying potential markets in segments or groups with common needs and responding similarly to a specific marketing action. This approach allows firms to target various categories of customers that perceive the absolute value of particular products and services variable from one another.
Coca-Cola's market segmentation focuses on four various elements, namely geographic, demographic, psychographic, and behavioral. Coca-Cola might have originated from the United States, but it has expanded its brand to various countries across the globe over the years. The company's geographic segmentation aims to drive the market into different geographical units, including cities, regions, and neighborhoods. While Coca-Cola might be focusing on urban and suburban areas, it also ensures a countrywide product distribution network. This is in the realization that as the company expands, there is a demand from those in rural areas.
Meanwhile, the demographic segmentation of Coca-Cola is divided into sub-segments based on various variables like age, occupation, family life cycle, race, religion, generation, social class, and nationality. These variables are the most popular basis of Coca-Cola to distinguish customers groups. The psychographic element of the Coca-Cola market segmentation is categorized into different groups based on lifestyle, personality, or values.
The behavioral variable is the final element in Coca-Cola's marketing segmentation. It generally focuses on the customers' knowledge of, use of, response, and attitude towards its products. Most marketers treat the behavioral variables as excellent starting points for formulating market segments.
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Targeting of Coca-Cola
Coca-Cola's targeting strategy is broader, not only because of its global presence in the market but also with the several products that they provide. There is also the need to satisfy various customers, ranging from average to health-conscious ones. The primary target of Coca-Cola is younger customers within the age bracket of 10-25 and a secondary market composed of people aged 25-40.
The company targets the market that desires an intense flavor with their regular cola drinks in terms of taste. Meanwhile, diet cola drinks and their variants target those customers that are health conscious. Coca-Cola campany has also expanded its product to non-cola beverages to target those not fond of drinking its regular cola drinks. A Coca-Cola product such as Sprite is specifically designed to target teens and college students, while others target the young working group.
Positioning of Coca-Cola
Positioning tackles how products will stand with the competition, which offers the same products and services in the market and customers' minds. An excellent positioning transforms a product into a unique one, making customers consider using it. In a marketplace with various cluttered products showcasing similar benefits, an effective positioning strategy makes the product stand out among others and creates curiosity from customers.
With Coca-Cola, it positions its products as thirst-quenching and refreshing. The products they offer are said to bring joy to its target market. The drinks and other products from Coca-Cola are also associated with having a great time with family and friends while enjoying daily life. Additionally, the company also markets its products consistently and of premium quality.
For those looking for high-quality drinks, one of the names that will surely come into their minds will be Coca-Cola. The company has an extensive selection of refreshments; each offers a positive experience for consumers. In contrast to other beverage brands, Coca-Cola brands itself as a product that provides happiness and positive in customers' lives. Ultimately, the company's primary focus is to cater to the needs and preferences of its global customers.
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Table
The Coca-Cola market segmentation, targeting, and positioning variables are comprehensively described above. You can refer to this table below for a simplified list of how the company categorized these variables and principles.
Market Segmentation
Targeting
Positioning
Geographic
-Thirst-quenching and refreshing products
-Promotes happiness and positivity for every drink
Region
Domestic
International
Density
Urban
Rural
Demographic
Age
10-40
Gender
Males and females
Life-cycle stage
Bachelor, singles not living at home, newly married couples, Full Nest I and II
Income
Average, above average, high-income earners
Occupation
Professionals, students, employees
Behavioral
Degree of loyalty
Hard-core and soft-core loyals
Benefits sought
Refreshment, satisfaction of habit, enjoying the good taste, spending time with people
User status
Regular users
Personality
Easygoing, ambitious, determined
Psychographic
Social class
Working, middle, and upper classes
Lifestyle
Explorer, aspirer, succeeder
Mind Map
Now that you have categorized each principle's components in Coca-Cola's marketing strategy, presenting it through a diagram like a mind map can be ideal. A mind map allows viewers to understand better the connections of the elements of your marketing approach. See the example below.
Suppose you are to open your beverage store, Coca-Cola's marketing approach can be helpful. The company might be a giant one, but several principles are also applicable for startups, looking at its marketing treatment. It is just a matter of localizing each variable to fit into your brand's marketing approach. The diagram and discussion above can also be helpful if you are studying marketing and plan to create your first marketing strategy using marketing segmentation, targeting, and positioning principles.
It can also be beneficial to organize all the components through mind mapping software, similar to what was illustrated above. EdrawMind is a user-friendly mind mapping tool that offers a straightforward process for creating mind maps online. If you want it to look playful, you can even put images, shapes, and other elements to your diagram. The interface is easy to navigate, giving first-time users ease. If you find it a handful to make your mind map structure, you can use pre-built templates of the Market Segmentation and STP Analysis. The templates will provide you with a framework, and all you have to do is input the information on the diagram. The software is also very flexible as users can either work on their mind maps through a browser or from their desktops.
Age. Firstly, the company targets young people between 10 and 35. They use celebrities in their advertisem*nts to attract them and arrange campaigns in universities, schools, and colleges. They also target middle-aged and older adults who are diet conscious or diabetic by offering diet co*ke.
For individuals looking for high-quality beverages, Coca-Cola offers a wide range of the most refreshing options — each creates a positive experience for customers when they enjoy a Coca-Cola brand drink.
Unlike other beverage options, Coca-Cola products inspire happiness and make a positive difference in customers' lives, and the brand is intensely focused on the needs of consumers and customers.”
In short, STP is a marketing approach where you segment your audience, target the best-fit audience segments for your product, and position your product to capture your target segment effectively.
Target marketing segmentation is where you divide your potential customers into segments. You'll then focus on a few segments (or groups of people) that align most with your product or services. Doing so helps you tap into their needs and desires to attract new sales and increase longevity.
Demographic, psychographic, behavioral and geographic segmentation are considered the four main types of market segmentation, but there are also many other strategies you can use, including numerous variations on the four main types. Here are several more methods you may want to look into.
A great positioning strategy example would be a computer company that focuses on providing cutting edge technology at premium costs before their competitors. Another example of positioning strategy would be a large chain store that focuses on providing popular goods to many people at a low cost.
co*ke aggressively markets its product lines through advertising across multiple mediums and channels, including TV, online ads, sponsorships, etc. Coca-Cola's sponsorships include NASCAR, NBA, the Olympics, American Idol, etc.
Market positioning refers to the process of establishing the image or identity of a brand or product so that consumers perceive it in a certain way. For example, a car maker may position itself as a luxury status symbol. Whereas a battery maker may position its batteries as the most reliable and long-lasting.
Product positioning is a form of marketing that presents the benefits of your product to a particular target audience. Through market research and focus groups, marketers can determine which audience to target based on favorable responses to the product.
Positioning refers to the ability to influence consumer perception of a brand or product. The objective of positioning in marketing is to establish the image or identity of a brand or product so that consumers perceive it in a certain way.
Even though there are commonly known methods of segmentation such as demographic, psychographic, geographic, and behavioral segmentation, Coca Cola has been known for its market demographic which is largely based on family size, age, and income.
The segmentation-targeting-positioning process is so effective because it breaks down broader markets into smaller parts, making it easier to develop specific approaches for reaching and engaging potential customers instead of using a generic marketing strategy that would not be as appealing, or as effective.
A few examples are positioning by: Product attributes and benefits: Associating your brand/product with certain characteristics or with certain beneficial value. Product price: Associating your brand/product with competitive pricing. Product quality: Associating your brand/product with high quality.
Dividing a target market into segments means grouping the population according to the key characteristics that drive their spending decisions. Some of these are gender, age, income level, race, education level, religion, marital status, and geographic location.
A target customer is an individual that's most likely to buy your product. And it's a subset of the broader target market. For example, if your target market is female athletes between the ages of 13 to 25, a target customer could be female athletes in the specific age range of 13 to 16.
Customer segmentation is one of the most important marketing tools at your disposal, because it can help a business to better understand its target audience. This is because it groups customers based on common characteristics. These groups can be used to build an overview of customers.
There are many ways to segment markets to find the right target audience. Five ways to segment markets include demographic, psychographic, behavioral, geographic, and firmographic segmentation.
Brand positioning creates clarity around who you serve. It also explains to your target audience why you are the best company for them and what sets your products or services apart. It helps you justify your pricing strategy. The positioning of the brand can be used to justify a pricing strategy.
A brand positioning statement outlines exactly what your company does, for whom, and what makes you different. The idea behind it is to create a unique niche for your brand in the minds of consumers within your category.
A significant part of Coca-Cola's success is its emphasis on brand over product. co*ke doesn't sell a soft drink in a bottle; it sells “happiness” in a bottle.
Do you remember the craze in finding a bottle of co*ke with your name on it? The campaign was originally trialled back in 2011 and resulted in a 7% increase in sales. 'Share a co*ke' was launched in 2013 and 2014, with Coca-Cola's marketing proving the effectiveness of personalisation.
There are three standard types of product positioning strategies brands should consider: comparative, differentiation, and segmentation. Through these strategies, brands can help their product stand out by targeting the right audiences with the best message.
Simply put, brand positioning is the process of shaping the status of your brand in customers' minds. Its goal is to ensure that they associate it with the benefits. This is done by putting the spotlight on specific features that make your brand unique, such as the purpose of a product, the price, or exclusivity.
Definition: Positioning defines where your product (item or service) stands in relation to others offering similar products and services in the marketplace as well as the mind of the consumer. Description: A good positioning makes a product unique and makes the users consider using it as a distinct benefit to them.
The co*ke targeting approach also has a strong focus on what's known as the “conscious progressive” personality type – consumers who value independence, learning, personal growth and being true to oneself, and who seek out those traits and experiences in the brands they consume.
So how is Coca-Cola using behavioral segmentation? Loyalty Status – The company is constantly measuring loyalty using social data and data gathered from the activity on co*ke's website. Occasions – co*ke puts a lot of focus on understanding the most popular occasions for consumers to drink co*ke.
"Positioning" is where that plan comes into place. Unlike targeting, positioning is more about what your business says and does than your audience. This process involves creating in the minds of your target audience a brand persona that positions your business as the solution they may need now or later.
Positioning is the last stage in the Segmentation Targeting Positioning Cycle. Once the organization decides on its target market, it strives hard to create an image of its product in the minds of the consumers. The marketers create a first impression of the product in the minds of consumers through positioning.
There are four main customer segmentation models that should form the focus of any marketing plan. For example, the four types of segmentation are Demographic, Psychographic Geographic, and Behavioral. These are common examples of how businesses can segment their market by gender, age, lifestyle etc.
There are five psychographic segmentation variables on the basis of which hom*ogeneous segments can be prepared for proper research – Personality, Lifestyle, Social Status, AIO (Activities, Interests, Opinions), and Attitudes.
Mexicans are the largest consumers of co*ke, and consumers in the country drink 745 co*ke beverages a year. After “o*k”, “Coca-Cola” is the second most-known phrase in the world.
Common characteristics of a market segment include interests, lifestyle, age, gender, etc. Common examples of market segmentation include geographic, demographic, psychographic, and behavioral.
A positioning statement is an expression of how a given product, service or brand fills a particular consumer need in a way that its competitors don't. Positioning is the process of identifying an appropriate market niche for a product (or service or brand) and getting it established in that area.
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