The Coca Cola Company Marketing Mix - Coursework Example

The Coca Cola Company Marketing Mix Department Table of Contents Introduction 3 The Coca-Cola Company 4 The Marketing Mix 4 Product 5 Place 6 Promotion 6 Price 7 People 7 Process 8 Physical Appearance/Evidence 9 Consumer Behavior 9 Theories of Consumer Behavior – The Utility Theory of Demand 10 Sociological Factors Influencing Consumer Behaviour 11 Personal factors 11 Social factors 11 Psychological Influences 12 Conclusion 12 References: 14 Introduction The recent era of globalization has turned the entire market into a single marketplace. This practice is being continuously supported by technological up gradation as well as the innovative trends of marketing. Earlier, the marketers used to consider a specific market and used to design their products according to the needs of that particular market. Today the entire world is considered as markets by the marketers who are involved in global trade. Participating in the global trade has become a growing trend of today’s business scenario since global trade comes with the opportunities of competitive advantage and access to a wider market that provides the marketers, ample scope to grow and develop. Therefore in this context, when a marketer wishes to grow and prosper then it’s necessary for him/her to consider the entire world as their consumer. This is true for products as well as services. Marketers majorly aim at improving brand image through several avenues. In most cases, the marketers aim at addressing the social and psychological needs of their customers to buy their brands over their competing brands in the market. The marketers also intend to identify the sociological and psychological drives such as attention and perception drives and motivations, consumer learning and memory, personality and self-concept, and attitude formation and change. The sociological needs include the peers and reference groups of the customers, the impact of social class and culture, family, and social categorization on the buyer behavior. The report at hand focuses on the marketing mix of a brand and the means through which the brand convinces and satisfies its customers. This current research paper delves into the marketing mix of Coca-Cola, a global brand in the soft drink industry, which has been a leader of the market. The Coca Cola Company has been successful in its operations commanding a large portion of the soft drink industry. Despite competition from other companies such as PepsiCo, the company has always been firm in its operations. The marketing strategies of the company have been very influential and its advertising appealing. The Coca-Cola Company The Coca Cola company license or owns and markets more than 500 non-alcoholic beverage brands, mainly sparkling beverages in addition to still beverages such as juices, waters, sports and energy drinks, ready-to-drink coffee, and enhanced waters. The company serves the global market, which include Europe, Africa and Eurasia, North America, Latin America, Pacific, Corporate and Bottling investment (Coca Cola, 2014). Coca Cola sells more than 230 brands in more than 200 countries (Coca Cola, 2014). While the company currently operates internationally, it has always emphasized local operations, with independent business people with their localities own and bottling and distribution operations. Coca Cola is currently the market leader with a market share of 29.9 percent followed closely by PepsiCo Inc., which has a market share of 11.5 percent and Nestle with a market share of 3 percent (Cavale, 2014). Other smaller companies in the industry accounts for the remaining 59.6 percent of the global market share (Cavale, 2014). The Marketing Mix When thinking about the marketing plans of the products of a company, the marketing mix is always the proper place to commence the planning strategies. This tool helps the marketers to discover the needs of a particular product as well as it target market. It refers to a set of controllable and interrelated variables assembled by a company to satisfy the target market in a competitive market (Myers, 2006). This strategy involves selecting and implementing the best possible course of action to attain the long term objectives of the company in relation to the product, especially in gaining the competitive edge over its competing products. The marketing mix has been described as the managerial use of several mechanisms with the aim of achieving the desired results in terms of production, satisfying the projected market with the values of products that meet the expectations of the clients as well as introducing new ideas into the product being offered into the market (Myers, 2006). The marketing mix provides the marketers with the standard tool for formulating a plan for developing and promoting a product in the market. Examining the marketing mix of an organization such as the Coca-Cola Company can assist the researcher to understand the synergy and dynamics involved between the seven core elements, often referred as the 7Ps. The 7Ps include the product, place, promotion, price, people, process, and physical appearance. Product The Coca-Cola Company has been the leading company in the soft drink industry with the largest portfolio comprising about 3,300 variant brand products. There are several categories of the beverages provided by the company including 100 percent fruit juices, diet category, water, fruit drinks, tea and coffee, and energy drinks among several others. According to the data released by Nielson, the Coca Cola Company is the leading brand in beverages, retail packaged water in 2010 (The Nielsen Company, 2010). Subsequent reports from different researchers have revealed that Coca Cola has remained the No. 1 brand in the soft drink industry. Currently, the company has its market presence in different countries in the world – about 200 countries – with different types of engagements such as partnerships, wholly owned corporations, and subsidies among several strategies of internationalization. Currently, India is one of the largest markets for the multinational corporation. Place The Coca Cola Company is one of the largest multinational companies with distribution channels all over the world. The company is one of the world’s most favored and available brands all over the brand. Using the Fast Moving Consumer Goods FMCG distribution system, which incorporates the small and middle level players in the distribution channel, the company has managed to reach the largest areas possible. For instance, in India, which is one of the company’s leading markets, the company has managed to overcome the local companies such as Bovonto and Kalimark in the industry through its elaborate distribution channels Promotion Promotions are significant for companies to build and improve consumer demand. This category also entails for components referred to as the Promotion Mix and includes advertising, public relations, selling, and sales promotion. Advertising effectively informs and persuades the target market to buy the products; public relations offer the positive image of the company and brand to public; selling targets the consumers to buy the products, and sales promotion convinces the customers to buy the products immediately (Myers, 2006). The Coca Cola Company invests a large amount of money every financial year in advertising and promotions around the world to maintain its position as a leader in the industry against its competitors such as PepsiCo. In its branding, the Coca Cola Company has used polar bear characters and a message of nostalgia over time. Other promotional techniques that have been used by the company include TV ads, magazine ads, online ads, and social media advertising. The company has been sensitive of the increasing technological improvements. Therefore, it has ensured that it meets the needs of the young clients, who spend most of their over the internet. The company engages in several sponsorships including sports sponsorships for major events, organizations, and projects around the world such as American Idol, Apple iTunes, BET Network, NASCAR, NBA, NCAA, and the Olympic Games in order to increase brand recognition (The Coca Cola Company, 2014).Sales promotions at the store are used to drive revenue during slow periods. Price Coca Cola Company has a value based pricing strategy, which has been operational for a very long time, and has constantly addressed the needs of the customers. The company’s major target market is the middle class families with middle incomes. Therefore, with the tensions from competing brands such PepsiCo, the company has managed to maintain a relatively affordable price range to ensure that this target market can purchase the products without much ado. In 2011, the company was criticized by analysts and its shareholders for maintaining relatively low prices in response to the economic recessions in the United States (The Coca Cola Company, 2014). However, due to the oligopoly nature of the market, where there are few producers and many consumers, coupled with the company position, the Coca Cola company has managed to ensure that the volume of sales increase the returns on investment. The company has a varied pricing strategy for different brands and in different countries according to the assessments of the consumption criteria (The Coca Cola Company, 2014). People The people are the target consumers that the company intends to sell its products to them. It also entails the employees of the organization, and the management. As earlier mentioned, the Coca Cola Company is the largest international beverage company with its presence in about 200 countries. Most of the company’s target consumers are the middle class families since the company’s products are usually consumed for recruitment and not a necessity. While the company targets consumers of all ages, most of the consumers of the company are the youth. Additionally, the company has diversified its customer base by introducing brands that address the medical needs such as Diet Coke for diabetic customers. The company data reveal that the company serves about 1.9 billion customers everyday within its distribution channels (The Coca Cola Company, 2006-2013). India provides the company with the largest market due to its large population and the company’s ability to maintain its brand image in the Indian market. For instance, in India, the company has a large network of employees of more than 1.5 million people working in different capacities. The company is one of the leading employers in the global business scene. The company’s management system is centralized in the United States with several managers responsible for its operations in the 200 countries of its presence. Process The process of the product is significant in its marketing since it determines the capability of the product to supply the demand of the customers (Ivy, 2008). It majorly entails the manufacturing processes and the distribution channels adopted by the company. The company adopts the most recent technology in its production in order to ensure efficiency. Additionally, the company’s raw materials such as water, which is a natural resource that faces depletion, is continuously preserved its social corporate responsibility activities. The distribution channel adopted by the company is consumer focused and ensures that the products are delivered to the nearest store and points that customers can easily access without additional costs. The company also engages in research and development to ensure that it meets the needs of the customers as well as remains ahead of competitors in product delivery and production. Physical Appearance/Evidence The physical appearance or evidence refers to the first distinction of a product in the market. Consumers easily identify products in the market through its appearance. The evidence or availability of the product in the market helps in building brand image and increasing sales as well as market control. The Coca Cola staff and sales personnel are constantly in contact with the customers during different occasions such as sales promotions or sponsored sporting events. The packaging of the product ensures that the customers easily identify the products from the company. The packaging materials and shapes are also made in different forms to appeal to the psychological needs of the customers. The company logo features in all its brands. Even further, through promotional measures, the company provides T-Shirts, shopping bags, and umbrellas with the company logo to enhance its acquaintance with the customers. Consumer Behavior Consumer Behavior is a field of study that embraces all the aspects of purchasing, be it a physical product or an intangible service. It is a complex, dynamic, multi faceted procedure and the person devising the marketing strategies makes all the advertising and promotional decisions on the basis of the suppositions drawn from the behavior of the customers. Consumption might happen due to several reasons, the key reason being the realization of a requirement, goal or worth. Another noteworthy reason for buying a product could possibly be the people or group around the consumer or the longing to get acknowledged as the part of a cluster (Foxall and et al, 2005). It’s the marketer’s job to keep on varying the aspects of the marketing mix (product, price, promotion, people, process, place, and physical appearance) for devising strategies to attract and retain consumers. The following illustration represents a consumer behavior model- Source: http://newagepublishers.com/samplechapter/000160.pdf Thus it can be seen that there are abundant causes behind opting for a product and also there are some critical factors behind the non-acceptance of a product or service. A few factors shown in the consumer behavior model will be discussed in the context of the Coca Cola Company in the subsequent sections. Theories of Consumer Behavior – The Utility Theory of Demand This theoretical approach to understanding consumer behavior is based on the measurable satisfactions that consumers get from the products that they consume. Consumers always want to buy products that give them the highest benefits in the market (Tohamy, & Mixon, 2004). This provides value for their money. The Coca Cola Company has managed to meet the varied needs of the customers to ensure that the latter gets the maximum benefits from the products that they buy from the company. Such benefits include the extended community engagement through CSR activities and lower pricing for quality products. The range of products provided by the company to meet different needs such as Diet Coke and Coke Light are meant to meet the nutritional needs of the diverse customers. Sociological Factors Influencing Consumer Behaviour Sociological factors of consumer behaviour comprises of mainly the personal and social factors. Personal factors The personal factors consider the whole bunch of consumers as individuals. The demographic factors of a target market like age, gender, occupation, income, marital status, education and so on affects the consumer’s purchase decision to a great extent. Age serves as an important factor for the products and services of the firm (Blackwell, Miniard and Engel, 2006). As earlier mentioned in the marketing mix, the Coca Cola Company has a range of consumers of different demographic factors. However, based on the social ladder, the company major target market is the middle class families. Most of the consumers of the Coca Cola products use the beverages for refreshment purposes, which is commonly witnessed in the middle class families. Additionally, the company targets the youth with its products, thereby directing much of its advertising campaigns online to meet the youth that spend most of their time over the internet. Social factors Family, friends, and peer groups create a large influence on the purchase behavior of the consumers. This process is known as “Word of Mouth” (East, Wright and Vanhuele, 2008). Culture, social class, and social roles are known to be dominant factors in managing the approaches of the human being. It includes a universal set of attitudinal designs which are sustained and transmitted by the members of a definite society by the means of various modes. For example the people belonging to the similar culture would have a general dialect, patterns of doing things and recreations as well as they are anticipated to share like values. Psychological Influences Consumers’ motivation in purchasing decision might proffer the marketers with more unqualified understanding of the customer’s expectations and their reaction to the diverse marketing policy and strategies developed by the marketer. Cognition and Affect are the two main elements of the term consumer behavior that are known to be created by different and partly autonomous cognitive and affective systems that can, however, persuade each other in a range of techniques. The affective framework is reactive in most of the cases (Peter and Olson, 2008). This implies that the affective framework generally reacts involuntarily to diverse situations and consequently a person has very limited direct command over their feelings and emotions. In most of the cases affective responses are learnt by the means of classical conditioning and early socialization (Kenneth and Irwin, 2013). Due to this, affective responses differ extensively across social groups and cultures and as a result individuals tend to act in response in an unusual manner to similar stimulus (Foxall & Yani-De-Soriano, 2011). Conclusion The success of the Coke brand in the global soft drink industry is sufficient proof that the company has managed to critically asses and implements its marketing mix strategy all over the world. 7Ps of the Coca Cola Company reveal that the company has successfully coordinated these components of the marketing mix to beat competition from the leading brands such as PepsiCo. Consumer behavior is also a significant factor to consider while comparing competing brands in the market, especially in the soft drink industry. References: Blackwell, R.D. Miniard, P.W. and Engel, J.F. 2006. Consumer Behaviour. Thomson South Western. Cavale, S. (2014). Coke revenue misses estimates as soda sales slow. Reuters. Retrieved from http://www.reuters.com/article/2014/02/18/us-cocacola-results-idUSBREA1H0WH20140218 East, R. Wright, M and Vanhuele, M. 2008. Consumer Behaviour Applications in Marketing. London: SAGE. Foxall, G, & Yani-De-Soriano, M 2011, Influence of Reinforcement Contingencies and Cognitive Styles on Affective Responses: An Examination of Rolls Theory of Emotion in the Context of Consumer Choice, Journal Of Applied Social Psychology, 41, 10, pp. 2508-2537, Academic Search Elite, EBSCOhost, viewed. 11 July 2014 Foxall, G. and et al. 2005. Consumer Psychology for Marketing. London: Thomson. Ivy, J 2008, A New Higher Education Marketing Mix: The 7Ps for MBA Marketing, International Journal Of Educational Management, 22, 4, pp. 288-299, EBSCOhost, viewed 11 July 2014. Kenneth, S.B. and Irwin, A.H.2013. Social Psychology. New York: Psychology Press. Myers, CA 2006, The Impact of Promotions on the Convergence in Preference Elicitation Methods, Journal Of Promotion Management, 12, 2, pp. 3-17, Professional Development Collection, EBSCOhost, viewed 11 July 2014. Peter, J.P. and Olson, J.C .2008. Consumer Behaviour and Marketing Strategy. Mcgraw-Hill/Irwin Series in Marketing. The Coca Cola Company, 2006-2013, Company highlights, retrieved from http://www.coca-colaindia.com/ourcompany/company_highlights.html The Coca Cola Company, 2014, http://us.coca-cola.com/home/ The Nielsen Company, 03-15-2010, Nielsen Reports February 2010 U.S. Search Rankings, retrieved from http://www.nielsen.com/us/en/insights/news/2010/nielsen-reports-february-2010-u-s-search-rankings.html Tohamy, S, & Mixon, J 2004, Illustrating Consumer Theory with the CES Utility Function, Journal Of Economic Education, 35, 3, p. 251, EBSCOhost, viewed 11 July 2014. Read More