Coca Cola: A Study on the Marketing Strategies for ..., Study notes of Marketing

Download Coca Cola: A Study on the Marketing Strategies for ... and more Study notes Marketing in PDF only on Docsity! Scientific Journal of Intelligent Systems Research Volume 2 Issue 01, 2020 ISSN: 2664-9640 9 Coca Cola: A Study on the Marketing Strategies for Millenniums Focusing on India Longfei Liu1, a 1Doctor of Philosophy (PhD) Management, Limkokwing University of Creative Technology, Cyberjaya, Selangor, 63000, Malaysia. a493221290@qq.com Abstract Started In 1886, as a small patented medicine company based in Atlanta, USA, to the world’s largest soft drink manufacturer. Coca-Cola with its rich history and legacy of over a decade, with its exceptional marketing strategies and a supreme portfolio consisting of over 500 beverages such as Sprite, Thumps Up, Maaza, Minute maid and mineral water brand like Kinley known in India as Hindustan Coca-Cola Beverages (HCCB) has been in Indian markets since 1987. Catering to the thirst and cravings of millions of Indians annually, contributing a significant amount to the Indian economy in terms of investments and employment opportunities. Coca Cola has come a long way using aggressive mass marketing strategies being the pioneers in the field of adaptive marketing or marketing with accordance to the consumer behavioural trends is what built a strong brand image for coca cola especially in the Asian markets. Coca Cola is the one brand which is recognized by everyone around the globe. When we talk about brand equity then it is its value & it’s about stories, memories, associations, and human connections (although of course, these connections would have been very carefully and deliberately engineered by talented marketers over many years and countless board meetings).This is something that Coca-Cola has been the master of for over 100 years. This equity is derived from people’s willingness to pay a premium for the brand and an unwillingness to accept substitutes. Coca-Cola’s marketing strategy has always been to associate happiness, positivity and the good life with their products, & that’s how they are able to create high TOMA (Top of mind awareness).In this research paper, we analyse the different marketing strategies being used by coca cola, especially influence and usage of social-media and digital marketing techniques and the extent to which it is able to influence a consumers behaviour and how he or she reacts to the changing product or price made by the coca cola. We analyse the impact of coca colas strategies from two points of view one that of a customer and second the company itself. We drew up our conclusions based on 100 reliable respondents who are normal residents of India who have been active consumers of Coca Cola as a product keeping aside other products like Thumps Up and Maaza. What we could conclude was price wasn’t a major factor but the brand image created as an effect of advertisements and mental satisfaction after consumption was the major behavioural factor for purchasing which the millenniums exhibit. Keywords portfolio, consumer behaviour, social media, digital marketing. 1. Introduction A customer is generally understood to be the person who makes the decision to purchase a product or who pays for it. In fact products are often bought by one person for consumption by Scientific Journal of Intelligent Systems Research Volume 2 Issue 01, 2020 ISSN: 2664-9640 10 another, therefore the customer and the consumer need not be the same person. The Coca Cola Company who is manufacturer, retailer and marketer of the non-alcoholic beverage concentrates and syrups focuses on the consumers rather than the customers. Being a company which is American by origin and with a rich history starting from the year 1886 it must have been a very dynamic firm which changes its strategies and tweaks its products according to the needs and wants of the consumers. In the recent market coco cola has identified what the customer’s value in the market. “This generation values the openness to new culture and sense. Even though they value new cultures they have a love for their local products and want to support their neighbourhoods and communities and keep the wealth within their region itself. In a way you can say that they are moving back to a collectivist culture*3”. With the collectivist mind-set they want to revive folk traditions and rituals starting from food to spirituality. Customers now follow the YOLO concept where you only live once and they want to experience personalized by unique experiences which allow them to express their identity. The customers have also become health conscious because of their increase in awareness towards the world as a whole. This has made customers scrutinize every ingredient present in the products they consume and makes them weigh their pros and cons before consuming it again. Consumers now value their time, they believe time is money and have a burning desire to be hyper productive especially when it comes to their shopping habits and way of communication. Consumers want to be productive but at the same time they want to have more leisure in their lives and more moments of pleasure and even indulgence. The utmost expectations from the brands they consume is to engage with the brand through new experiences and conversations .These insights are helping coco cola to become a total beverage company. Coco Cola is known for mass targeting and not segmentation. They don't spend their resources on market research rather they spend it on observing the competitors performance and negative public relations. When coke comes up with a new strategy they tend to incorporate a counter strategy towards their competitors while they show the positivity of the brand, one such example of this is the anti-obesity campaign where they used the campaign as a medium to launch their sugar free and diet worthy products. Negative public relations and legal proceedings are the major factors that may affect the wellbeing of the company in the near future if corrective measures are not taken. Coke does not have a large base of loyal customers which is another factor for cokes decline in the near future. The millenniums are the type of customers who may be absolutely loyal or absolutely unloyal to your product. They may love the product or they may hate it, there is a very less chance of them being neutral towards a brand. Peer pressure and word of mouth plays an important role but peer both of them combined lead to social media marketing. People see their friend post a picture with a new product and show the difference between how they were before the product and how they were after the product. This makes the person want to purchase the product and use it to get the same effect. In very simple terms we can state that the millenniums are very easily influenced, it’s about how the product uses it to their advantage. Coco-Cola has made use of this trait of the millenniums by catering specifically to their interests, like the add where they tweaked their packaging a bit by adding the name Bro or Friends etc. They even created an advertisement to support that idea where a boy and his father are traveling in a train and the father asks his son to accept his friend request on Facebook. But the boy is reluctant to accept his dad’s friend request so the dad sets bait for his son with the coke and because the boy is craving for a sip of the coco – cola he accepts his dad's friend request on Facebook. At the end of the advertisement, the back of the coke bottle is shown with a tag that says, friends, while the son and dad are bickering in a friendly manner in the background. “As Coco-Cola has realized the hunger the consumers have for the product and how they have become more health conscious in the recent times, it has decided to act upon the needs of the Scientific Journal of Intelligent Systems Research Volume 2 Issue 01, 2020 ISSN: 2664-9640 13 for Coca-Cola, their selling and distribution function and retailers. They focus equally on the branding and equity aspects of Coca Cola. It’s also been seen that there is a scope of expansion in rural areas as its still untapped by the leading companies and this can be done by creating brand awareness in these areas. The FMCG branch deals in a two-way system. The researcher talks about the horizontal expansion of Coca-Cola (amount of sales is increased by increasing the number of outlets) and outlet activation (through Acquisition, Retention, and Activation). To find out accurate results, questionnaires, personal and records of the organization are used as a means of data collection. The results show that Coca-Cola is the most preferred beverage in the market whereas water and soda are the least preferred ones. Customers always look forward to different packaging of their favourite product, which also helps in increasing the sales and brand awareness, this also leads to the willingness of most of the outlets to keep Coca- Cola as their main product, but then, a hindrance in opening a new outlet is the unavailability of chilling capacity units. The author concludes that Coca Cola has been opened to new opportunities in terms of horizontal and vertical market and there is a large scope for market penetration in rural areas. The Analytical Study of Decline in Sales of Coca-Cola Based on Customer’s Inclination towards the Product – By Snehal Galande– August 2017 Issue This paper try’s to find out possible reasons of decline in sales of Coca-Cola based on assumptions such as shifts towards healthier drinks, faulty distribution network, and lack of availability of availability of variants of the brand. In 2016, the sales of Coca-Cola declined due to growing health conscious and awareness of the customers. It’s also important for Coca-Cola to treat Indian market cautiously as their US counterpart and bring in variation in their marketing and products here as well. In 2016 it’s also seen that within carbonated beverages, smaller players such as Red Bull have expanded their market share and consumers have started seeking alternatives. After this, Coca-Cola had also come up with other variant products according to the customer preferences (Diet Coke, Sugar-less Coke), even then the customers are always waiting for products better than the existing ones. To find out the customer preferences a ‘Descriptive Research Design’ and ‘Non-Probability Sampling’ technique have been used where they surveyed 50 respondents. The results show that people consume Coca- Cola occasionally, they are health conscious, very few people prefer the taste, but there are people that would look for Coca-Cola’s substitute. The author concludes that the shift of people to healthier drinks can be an advantage for Coca-Cola to introduce new products in the markets with a slight variation in taste. Coca-Cola: International Business Strategy for Globalization–By: Michael Ba Banutu Gomez– November 2012 Issue This paper analyses the six effective global strategies that are necessary for firms to become successful while expanding in terms of differentiation, marketing, distribution, collaborative strategies, labour, management strategies, and diversification. The paper also focuses on Coca- Cola’s operations in the USA, China, Belarus, Peru, and Morocco. Coca Cola has planned successfully in implementing strategies regardless of the country but didn’t effectively utilize all of them in each of the above-mentioned countries. The market has seen Coca-Cola expanding internationally over the last 50 years. Talking about the international differentiation strategy, branding, cost leadership expand, successful positioning, advertising slogan and patriotic image of Coca-Cola in the market help it to maintain loyal customers in the USA. In China, Coca-Cola had to revise its name to attract the customers. Coming to Belarus, Coca-Cola had to guarantee the highest quality of its products. Coca-Cola used strong branding and employment excellence to enter markets in Peru. Social bonding, inspirational messages, and targeting small and rural towns, and investing in soccer teams were marketing techniques to enter Moroccan markets. Coca-Cola has also planned three Scientific Journal of Intelligent Systems Research Volume 2 Issue 01, 2020 ISSN: 2664-9640 14 frameworks (ethnocentric, polycentric and geocentric) to staff their international operations and become a prime leader in the international market. But then, Coca-Cola made few mistakes while planning its frameworks, which were: misunderstanding the new customer base and losing the means of original brands. But then to rectify these mistakes Coca-Cola launched different products in these different countries according to the authentic taste of customers there. In the end, the author concludes that Coca-Cola has succeeded in its planned strategies which was” think globally, act locally,” especially focusing on local cultures and customs. 6. Research Methods and Methodologies A total of 100 samples were selected from different populations belonging to the millennium category. They were different populations as they belong to different universities and various universities have various cultures followed that it impacts their buying strategies. For example, Christ (Deemed to be University) does not allow the students to drink coca- cola or any other fizzy drink for that matter in the campus. This will lead to students wanting to drink fizzy drinks even more as it is not something that is approved of by the management and being in the rebellious age the millenniums are currently residing in, it is a big driving factor. The samples have been collected in such a way that it was only distributed to the millenniums who drink coca- cola. We have used probability sampling and under this, the technique we have adapted is the stratified sampling technique where proportional sampling was used. The sampling distribution strategy we have used is sampling distribution of the mean. The reason we have chosen this method is because it takes all the possible means of random samples of the given sample of the population in which its 100 in our case. When we used this method we were able to cover aspects of the central limits of the theorem. Since the sample size is 100, the curve will be more like a normal distribution curve, irrespective of the shape of the parent population. The parent population, in this case, would be the young and the middle ages people. As the sample size remained 100 we didn’t need to worry about the binomial distributions beginning to assume the characteristics of the normal distribution. 7. Findings The market research we conducted had 150 respondents in total out of which 50 respondents had to be removed as they did not give proper answers and so it could not be used to be a part of our analysis. Through this research, we have understood that coke has become like chai for Indians as 62.4% of the consumers drink Coca Cola at least once a week but the downside of this is that 30.7% have never drunk Coca-Cola or it’s rarely on various occasions that they consume coke. There is approximately 8% of our target sample that consumes Coco- cola on a daily or alternate day basis. The sales of Coco-cola seems to be more dependent on the number of units they sell rather than the quantity of Coca Cola they sell. There are barely any customers who buy the 1500ml Coca- Cola bottles, most of this generation’s customers stick to buying Coca Cola as per their cravings, it’s like a one-time thing, where they purchase it for that moment's satisfaction and are always willing to come back and repurchase it when they crave for it again. In a way, we can say that the millennia want the maximum marginal utility that they can derive from a product. That is the driving force, to get the most satisfaction out of one unit of the product. When we focused on the qualitative aspects to understand which aspect of Coca-Cola actually draws the customers to it, we understood that the taste was the first thing that inspired a person to buy Coca-Cola over Pepsi. The second most important factor was the brand, Coca Cola Scientific Journal of Intelligent Systems Research Volume 2 Issue 01, 2020 ISSN: 2664-9640 15 has built its brand name in such a way that just for the sake of prestige or status people prefer a Coca Cola over a Limca as such. The millenniums are easily influenced by the new trends yet when it came to Coca-Cola 80% of the population preferred the normal coke over the variants of Coca Cola. Obviously, the price is still an important factor as we can say that the demand is equally proportionate to the price of the product. 8. Hypothesis Testing Outcome Social media marketing is the best way of marketing for Coca-Cola. Consumer Satisfaction does have a direct relationship with the price of the product. Age does have a significant impact on the consumption of Coca-Cola. 9. Learning Outcome To analyse the customer behaviour of a particular target market segmented and restricted in a specified geographical location. The effectiveness of unconventional marketing strategies on millennial. The ability of a company to capitalize on its footfall and brand image. Risk management and protection of brand image through popularity in majority customer population. Knowing the seasonal effects on the sales of the product. Analyzing the fast-paced customer trend changes in the millennial target segment. 10. Limitations of the study Every paper has a scope of improvement and every paper with the reference to other papers has touched upon a new aspect of the research conducted on the specific topic and has opened its doors to a whole new forum for research. When a whole new form of research is opened there are definitely limitations that lead to more papers in that field. The limitations of this paper would be the lack of resources as we did not have any funding for this project so other than the data we gathered we were not able to look into other marketing aspects of coca- cola. Choosing a specific company represents one of our major limitations because it did not allow us to compare the efficiency of the competitors marketing strategies. The collection of data also posed as a limitation because we had to constrict this research to India instead of the international marketing strategies of Coca Cola. We also had biased errors is our paper due to the faulty process of selection because the entire target audience who were a part of the sample did not respond to the questionnaire. We faced Non-Sampling errors when the respondents did not take the questionnaire seriously and did not provide accurate information. Out of the 150 respondents we had to scrap 50 respondents as they were not valid answers to the questions and were done for the sake of it. 11. Conclusions Through this research paper, we have concluded that millennials are easily influenced by social media marketing but they are extremely influenced during the festive season because of the number of online offers that happen during those periods. India being the price sensitive market it makes its customers extremely sensitive to the minute changes in the prices of a product which leads to a decrease in demand if the price is high and an increase in demand if