Coke is a very popular product that is loved and used by so many people across the globe. The company successfully managed to expand their branches almost everywhere in the world. This report paper aims to carry out an evaluation of a diet coke which is a favourite consumer product. The report will consist of three tasks which include the following: the first task will involve the description of the selected consumer product and its target market. This task will also describe the market segmentation, targeting and positioning of the diet coke. Secondly, this report paper will involve the application of the relevant consumer behaviour theory to explain how the Coca-Cola company uses target market information to affect the decision-making process of the consumers and encourage them to purchase the diet coke.
This report paper will also detail explanations of the purchase history of the consumers using the past purchase behaviour data for guidance. The final task of this report will include conducting a full marketing mix analysis and incorporating the relevant academic theory throughout the review. The report will conclude by stating the significance of the diet coke which is a favourite consumer product to the Coca-Cola Company and what ought to be done by This company to increase its market share, penetration, and recognition thereby increase their overall sale.
Diet coke and its Target Market
Coca-Cola light or Diet Coke is a no-calorie and sugar-free drink manufactured and distributed by the Coca-Cola Company. This beverage was introduced in 1982 as a strategy of competing with their rival company Pepsi which had earlier launched a sugar-free Diet Pepsi (Coca-Cola, 2018, p. 3). This product used a different formula and recipe as compared to other Coca-Cola beverage drinks. Diet coke has numerous product lines which include Coca-Cola Zero, and Coca-Cola C2. Recently diet coke has been supplied into new cans of different flavours.
STP which stands for Segmentation, targeting, and position is an approach in which markets are categorised into various segments. And this is done with the aim of satisfying customers diversity needs, and capture the niche segments. Segmentation is a process that involves partitioning the market into different sections for easy provision of commodities and services to consumers. Under the above-mentioned process, each segment signifies a different target market. Coca-Cola Company uses segmentation strategy regarding psychographic, demographic and geographical and also carry its business activities in six segments which involve Pacific, Latin America, Europe, Africa, Eurasia, and North America (Wang, 2015, p. 21).
The demographic segmentation is of three parts which are the youth, young adults, and adults. The youth are the majority consumers of coke, and they are not associated with any coke while the adults consume diet coke. Psychographic segmentation is concerned with the lifestyle of the targeted customers, and this is addressed with the self-cool image in the coke can. Targeting is the second stage of the STP process that involves selection of the appropriate segment to be targeted by the company based on the growth, profit, area, and size of each segment.
Diet coke is standing alone since it is not associated with any particular consumer, but it targets consumers according to their age since individuals between the ages of 15-35 provide the largest market for this commodity. Their gender does not differentiate the targeted group. Positioning is the final step of the STP process. Positioning is the process by which organisationsset themselves in the market and how their commodities are viewed by the targeted customers. Positioning is comprised of different features such as distribution, promotion, place, and product. Diet coke has maintained its position among its consumers quite safely for a long duration of time due to its global recognition among consumers (Wang, 2015, p. 21).
The Role of Coca-Cola Company in Influencing the Decision Making Process of Customers
The 2012 report of the annual report of the Coca-Cola Company, it was estimated that this company had sold beverage drinks to more than 150 nations ("Coca-Cola Company - Quality," 2012). This report also predicted that its annual sales were distributed in various countries as follows: 38 per cent in the U.S, 32 per cent in countries such as China, Japan, Brazil, Pakistan, India, and Mexico, and 30 per cent in the remaining nations around the globe. The 2017 report estimated that this company sold 1.8 billion drinks daily. The Coca-Cola Company manufactures Syrup concentrate which it sells to numerous bottlers around the globe that hold the company franchise ("Coca-Cola Company - Quality," 2017).
This company has faced a lot of critics from various customers for the past decade due to issues related to economic, environmental and health effects that are resulted from their products. And therefore, this has decreased their sales and net revenue in specific regions. It is evident from the company’s purchasing history of the customers that this company advertisement, direct and viral marketing, promotion and branding have played significant roles in influencing customers decision making and buying behaviours.
Coca-Cola Company influences customer behaviours through sociological and psychological influence. This company has been successful for the past decade in changing customer purchasing behaviours and decision making. Willing customer collects and gathers relevant data concerning a particular product before they purchase a specific product. They select their preferred commodities due to various product features which include texture, smell, taste, colour, sound, and appearance.
These data and senses then create a perception and sensation in the minds of consumers. Therefore, perceptions and impression enhance brand acceptance, and memory and learning build brand recognition among the customers. Decisions and thoughts of consumers are affected and altered by the mentioned psychological aspects (Sundar, 2016, p. 2). The physical appearance of the diet coke can which consist of the coca cola brand logo attracts more customer.
The Coca-cola logo is made up of contrasting colours hence creating an impressive brand recognition among the consumers. This company also attracts customers through the use of the unique formula in producing their drinks thereby making coke products have a distinctive taste from other dinks around the globe. Coca-Cola Company also uses psychological influence to increase the brand recognition of their commodities by putting its ads on various social media platforms and sponsoring numerous sports activities. And through this, Coca-Cola Company influences the purchasing decision of their customers.
This company also influences the decision-making process of customers through sociological influence in different ways. The attitude of consumers is significant in deciding the type of brand to purchase by these customers. Consumers’ attitudes on different commodities are contributed by their memory and psychological perceptions. Decision making among consumers is often affected by the difference between the brand preferences and social-cultural variations among consumers. And This can be clearly be explained through the Coca-Cola customer's buying behaviours whereby the young individuals tend to consume carbonated drinks more which is contrary to the old and the middle-aged customers.
In countries such as the United States, People consume a lot of diet coke drinks due to the U.S traditional habits of consuming fast food. But this is contrary in nations such as Korea, Japan, and China where diet coke drinks are not familiar to the majority of the citizens in these countries since these nations perceive that carbonated drinks contain large amounts of sugars and fats which are harmful to their health. Despite these socio-cultural challenges, the Coca-Cola company has used numerous sociological influences to affect the decision-making process of consumers ("Diet Coke Plus to target health-conscious consumers," 2007).
Coca-cola Company has affected the buying behaviours of customers sociologically by providing different product lines and product mix to their customers. It has also introduced new drinks that have low levels of sodium, caffeine, sugar, and fats to attract customers that are suffering from different diseases such as diabetes. And to attract aged consumers' that fear consuming these drinks due to their health concerns (Chu et al., 2015, p. 237). And this has influenced the decision-making process of consumers.
Marketing Mix Analysis for Diet Coke
Coca-Cola Company manufactures and distributes a wide range of soft drinks which includes Fanta, diet coke, coke zero among others. This company has gained global recognition among its customers due to its unique taste which is attributed to their special formula for producing these drinks. The marketing mix of diet coke consists of the following 4P’s: price, Promotion, place, and product. Pricing is a part of diet coke marketing mix that is concerned with how the Coca-Cola Company prices the diet coke drink to attract more customers, penetrate a new market, increase the market share of this drink, and increase its recognition among the consumers. This company has used various forms of pricing strategies for the past decade to meet its annual target. Different coca cola sub-brands are priced differently based on their demand by their consumers, competition, and recognition.
Price skimming is a pricing strategy where companies price their commodities high when they enter into the market and later reduces the prices of these commodities with time. Coca-Cola Company uses a price skimming strategy where they set high initial prices for their drinks in the new markets and later with time they lower these prices. This strategy has proven to be effective for this company and also for the diet coke drink since it has maintained the brand image of this company, and also in helping Coca-Cola Company in making maximum profits.
Coca-Cola Company also uses a discount pricing strategy in pricing its products especially the diet coke drink where the prices of these drinks are minimised during festive seasons to attract more customers to this sub-brand. The discount pricing strategy has helped to increase the sales and profits connected with the diet coke drink. Another pricing strategy applied by this company is the competitive pricing where the Coke Company prices the price of the diet coke drink slightly below that of the competitors to try and attract more consumers to this drink (Mayer, 2016, p. 33).
Product is another element of the marketing mix for the diet coke. Product can be defined as the output that is realised when raw materials are converted into products. The Coca-Cola Company manufactures diet coke which is a fresh drink that is characterised by a good taste. This product is available around the globe in different volumes and different packages but under one name. Place is another element of the marketing mix for the diet coke. Place can be defined as the geographical placement of commodities. Place plays a significant role in the marketing of the diet coke.
The coca cola company has ensured that it has placed the diet coke in places that customers can quickly acquire and purchase this product. This company has also strengthened its distribution channels to ensure that this particular product is efficiently distributed around the globe. Promotion is a part of the marketing mix for diet coke that involves increasing the consumers’ awareness of the existence of diet coke. The coca cola company has used numerous promotional tools to increase diet coke recognition among customers. These promotional tools include various forms of media platforms such as radios, internet, magazines, newspapers, and television.
Conclusion
In conclusion, it is evident that the diet coke plays significant roles in the Coca-Cola Company. This product has enabled this company to compete with their competitor companies such as Pepsi effectively. It has increased the comparative advantage of the Coca-Cola Company by expanding the product lines of this company, therefore, improving customers' alternatives to products. Lastly, diet coke has attracted consumers that perceived that Coca-Cola products had adverse health effects on individuals. Coca-Cola Company should increase its advertisement on diet coke and also enlighten people on the ingredients that are used to manufacture this product to clear their doubts.
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