Marketing Strategies for Coca-Cola the Key to Term Paper
- Length: 8 pages
- Subject: Business - Advertising
- Type: Term Paper
- Paper: #34030013
Excerpt from Term Paper :
Marketing Strategies for Coca-Cola
The key to the success of any consumer product is an effective marketing strategy. In order to develop such a strategy, it is necessary to carefully examine consumer needs and behavior in relation to the product and adapt marketing techniques to target and address these needs. As one of the top beverage manufacturers, Coca Cola must focus on ways to continually meet the beverage needs of a diverse marketplace that demands variety and choice in products.
Several factors have recently affected sales of Coca-Cola products, included various international economic crises as well as anti-American sentiments abroad that fuelled boycotts ("New formula Coke," Economist, 2001). Also, an increasingly health conscious consumer has caused sales of non-carbonated beverages, such as bottled water and juices to sky-rocket, which necessitated some regrouping for Coca-Cola ("New additions and reformulations," Beverage Industry, 2003). The enormous purchasing power of overseas consumer markets also required Coca-Cola to further understand consumer needs in the diverse international marketplace. Moreover, marketing strategies needed to be developed and implemented according to continually changing consumer needs as well as social and political issues.
The first step in developing an effective marketing strategy is to analyze each behavioural component to contributes to buying behavior among consumers. These components include motivation, perception, attitudes, and culture. In regards to motivation, Coca-Cola must evaluate exactly what factors drive a consumer to purchase one type of soft drink over another. These factors may include taste, price, health concerns, or special promotions. With this information, Coca-Cola can adapt certain factors in order to accommodate consumer needs. If customers are tired of the same old taste, Coca-Cola can re-invent the soft drink with a new taste, such as Vanilla Coke. If customers are concerned about the prices of Coca-Cola products, the company can work with retailers towards initiatives that may lower prices. The concerns of some consumers with regards to health issues associated with carbonated soft drinks could lead Coca-Cola to manufacturer healthier beverages, such as juices and water. Furthermore, if consumers express that their purchasing behavior is motivated by special promotions, Coca-Cola could spend more time and money on promotions that offer incentives such as contests or coupons, which may in turn increase sales.
The second crucial component of consumer behavior that must be analyzed is the perception that the consumer has of the Coca-Cola products. This is where brand identity and brand awareness come into play. The perceptions that consumers have of Coca-Cola products is shaped by the image the company portrays through advertising, media reports of health issues surrounding different types of beverages, as well as factors out of the control of the company, such associations made by consumers between Coca-Cola and the globalization and Americanization movements. Advertising serves to create a brand identity, which is important in regards to consumer behavior. A brand that is more visible and more recognizable will be more successful than brands that are not. If consumers walk down a store aisle and are faced with several soft drinks that are basically variants of the same thing, the consumer will make purchasing decisions based on the perceptions they have of certain products over others. These perceptions are essentially created through the images, sounds, and ideas that have been associated with the product through advertising.
The third important behavioural component for the purchasing decisions of consumers is attitude. Attitudes are formed by the associations that are made between the beverage and those who consume it. Coca-Cola must evaluate what factors are associated with the consumers of each type of product in order to determine the most effective methods for marketing. The "coolness" factor of the product is important, since associations between the product and being up-to-date in regards to style, fashion, or trends may ensure increased profits. This may explain the success of advertising initiatives that include popular celebrities, such as athletes and singers. The associations made by the consumer between the beverage and the celebrity, have positive effects when it comes to purchasing.
Culture is the fourth and final behavioural component that influences the choices made by consumers. The availability of Coca-Cola products is continually expanding into new international markets, and it is important for the company to evaluate the needs of these different cultural groups. Some cultures do not consume carbonated soft drinks at the same rate as Americans, and it is important for Coca-Cola to adapt product lines to accommodate different consumer needs. It is arrogant and unrealistic to expect cultural beverage preference to drastically change in order to align with Coca-Cola. Therefore, Coca-Cola must offer beverages that fit into the cultural preferences already in place.
These four behavioural components involved in the purchasing decisions made by consumers are all influential and inter-related. Attitudes held by consumers about Coca-
Cola may have been spawned by perceptions of the brand that were created by advertisements. Cultural factors may influence motivations of whether or not to purchase Coca-Cola products. Perceptions of the products may be created according to how Coca-Cola responds to particular consumer motivations. The relationships between these behavioural components necessitate marketing strategies that address a wide range of factors.
Bruss (2001) explains how developing a promotional strategy that is perfect for a particular product is akin to writing an effective personals ad. The importance lies in succinctly making a point, indicating what exactly is being offered by the product, as well as targeting the appropriate consumer audience. This author explains the importance of strategies that bring forth the key attributes of the brand, which is described as critical for marketing strategies. This is where the perception and attitudinal behavioural components come into play. Bruss (2001) explains how the promotions for Sprite, a Coca-Cola product, portray an "urban, edgy, contemporary feel, and speak in the language of the brand." Furthermore, Dasani, another Coca-Cola product, "targets an audience that is concerned with replenishing after an active day. Moreover, it is critically important for Coca-Cola to determine the attributes of their products before embarking on the development of specific marketing promotions.
Coca-Cola experienced some trauma in regards to sales in the past few years. Some of these problems stemmed from Asian economic crises, as well as a "growing disillusion with symbols of globalization in Europe," which may have resulted due to the fact the Coca-Cola was not in tune with local consumer market trends, and had become too much of a sluggish, centralized bureaucracy ("New formula Coke." Economist, 2001).
In order to increase profits, Coca-cola moved to develop a new strategy that would respond more quickly to changing consumer needs. This was implemented through a "thinking local, acting local" marketing initiative, which aimed to increase growth through sales of non-carbonated drinks that are increasingly obtaining market share from traditional soft drinks ("New formula Coke." Economist, 2001). This new marketing initiative contributes to an ambitious sales target set by Coca-Cola for the next decade, which promises an average 7.8% volume growth each year. In order to achieve these goals, it was projected that non-carbonated beverages would have to double present growth rates to approximately 20% a year by volume, which would end up accounting for 25% of Coca-Cola's overall sales, in comparison to the present 10% ("New formula Coke." Economist, 2001).
Ultimately, the first priority in the making of a successful product is meeting the needs of consumers (Popp, 2003). There is ever-increasing variety in the marketplace, which has resulted in consumers often trying new products rather than buying the same products week after week (Popp, 2003). Coca-Cola has engaged in brand extension in response to changing needs of consumers and increased competition. The investment of time and money for the development of a solid launch and plan for brand extension is necessary and worthwhile (Popp, 2003). Coca-Cola must focus on the motivation and perception behavioural components of consumer decisions when developing brand extension strategies. Furthermore, one of the most important factors in brand extension is that the new creation must taste good in order to appeal to the consumer (Popp, 2003). Vanilla Coke was a brand extension initiative undertaken by Coca-Cola, which was developed due to data gained through consumer research that indicated quantitatively and qualitatively that consumers enjoyed Coke with this added flavor (Popp, 2003).
Moreover, a successful brand hinges on effective planning and execution of extensions through research development, and methodical launch processes (Popp, 2003). Successful research is conducted through various methods, such as the Internet. Keenan (2001) described how Coke created an online research panel of teenagers and asked how to revamp its Powerade sports drink, which allowed for quick feedback and reliable, quality results. This research initiative resulted in the re-launch of Powerade with added B-vitamins, and Coke diminished the time and cost of product development research by half (Keenan, 2001).
The health concerns that shape consumer behavior in regards to purchasing soft drinks has changed the motivations, perceptions and attitudes in relation to Coca-Cola. Coca-Cola has responded to this trend by creating a line of bottled water ("Growth in liquid assets," Beverage…