Coca cola FMCG Product Overview
Coca-Cola is a brand that has maintained a success story over the years, with more than 100 years in the market the brand has been a renewed beverage in the industry. The company has established branches in over 200 countries hence becoming the most worthwhile rated brand in the history of beverage manufacturing. Coca-Cola is re-known as the most focused company in terms of advertising and promotion an aspect that contributes immensely to its wide reach and target market. According to the official statistics 1.9 billion products of Coca-Cola are sold daily over the world, this is because coca cola has invested significantly in the distribution strategies (Arnold, Price and Zinkhan, 2004, p.78).
Coca-Cola is the largest beverage company in the world, the company produces one of the most consumed beverage “coca cola” amongst other beverages that include carbonated beverages, low-calorie soft drinks, juices and energy drinks. Under the Fast Moving Consumer Goods (FMCGs) the company over the past decades has established a customer base and therefore becoming one of the biggest Beverages selling Company in history. Furthermore; the company has been named one of the best-known brands in the world. The product ‘Coca-Cola’ is one of the most preferred beverages with both regional and international markets with which its consumers have a close longstanding familiarity. Coca-Cola allows its consumers to express their individuality and respect for their taste and preferences at the same time enjoying the quality of Coca-Cola (Armstrong, Kotler and Opresnik, 2017, p77-78).
The product purpose is built on three primary missions to the consumer: to refresh the world, inspire moments of optimism and happiness and to create value and make a difference. Coca-Cola has been established as a unique product because of its distinct ingredients in composition from the secret formula “the Coca-Cola syrup” used in its manufacturing (Ghauri, Fu & Väätänen, 2018, p103). Because of these ingredients the product and unique distillation processes it receives, Coca-Cola provides a consistent taste. With unparalleled distribution strategies and marketing strategies, the product is able to reach over 27 million customers globally. The company uses a segmented pricing strategy due to the availability of a wide range of products where each brand of Coca-Cola has different pricing strategy; in some cases the packaging of the product dictates their pricing strategy (Arnould, Price, and Zinkhan, 2014 p.78. Due to the competition coke also uses promotional pricing strategies.
Critical analysis
The theory of consumer behavior is dominated by various factors depending on the organizations. The purpose of the study is to present a profound critical analysis of the consumer behavior concepts in matters surrounding the attitudes of consumers, group influences, social class, and consumer learning processes, personal buying decision process as dictated by consumer’s perspectives. Further, the paper will introduce a variety of recommendations that pertain to strategies that are viable to increase customer loyalty in the Coca-Cola Company. Subsequently, the lack of consistency between consumer attitudes and behavior has suggested the need for thoroughly analyzing the organizations and most specifically the product strategies in terms of not only meeting but satisfying the consumer needs (Imram, 2015, p.224). Despite the analysis that has been made in-store environment affecting consumer behavior, there are still contradictory finding that leads to this analysis depicting the consumer behavior as far as the Coca-Cola product is concerned, additionally the study attempts to integrate prevailing conditions in the specific customer base and market. FMCG producers use a push promotion strategy, which involves product promotion in the purchase and delivery system by offering price incentives and discounts (Kitchen and Proctor 2011, p.98).
Coca-Cola as one of the largest beverage company should invest in app technology to offer incentives to its consumers upon purchase of their brands, the buying decisions of the consumers will consequently change hence maintain customer loyalty (Lamb, Hair & McDaniel, 2012, p.534). The Coca-Cola Company has over the years remained a leading brand in the world because of its services, organizational culture and marketing, and distribution strategies are some of the main aspects that contribute to its success. By conducting annual reviews the company is able to provide its customers with innovative adjustments to cater for their dynamic and evolving needs globally (Sicilia and Palazón, 2008, p.255). The geographic market segmentation is their strategic approach that contributes to their wide reach of every market all over the world, however customer loyalty has declined over the recent decades with many issues sounding the company, with raising concerns regarding health issues across the world with dangerous health complications such as cardiovascular conditions and obesity the brand has significantly been developing a different perception from the loyal customers. By conducting effective campaigns that communicate their intention and measures taken by the company to ensure that their products are fit the company will reduce the future risks that might bring it down. Studies that have been conducted earlier have indicated a close relationship between consumer behavior and consumption. Sarma (2018, p. 59-66) suggests that the primary factors for the formation of customer loyalty include, relationship strength. He further suggests that the relationships of the three factors are likely to face problems in various situations, in this context the situations that align with the case in Coca-Cola company is the changing and growing needs of customers and the organization’s failure to appropriately communicate the price changes in time. Furthermore, the paper will explore the recent marketing strategy in Coca-Cola Company and its benefits. The brand has incorporated various promotional activities according to the trends interchangeably due to the continuous increase in the market size (Sicilia and Palazón, 2008, p.255). The brand has integrated its consumer loyalty programs by introduction of Coca-Cola vending machines, which ensures that customer loyalty is achieved, among other strategies to improve customer loyalty the brand has focused on the degree of product differentiation is one of the most unique as compared to its competitors (De Mooij, 2013, p.183). The product differentiation includes low pricing structure that considers every customer, product innovation, brand and trademark development and protection, sales programs, advertising and intensified efficiency in production techniques (Williamson and Fleury, 2013, p56).
Over the few decades, the Coca-Cola Company has been using various marketing strategies because of the different brands and market segments they have, with market segmentation being one of their most used strategies. A market segment consists of various groups who share a similar set of needs and wants, the organizations, therefore, have to identify these groups and decide the right group to target. However, Coca-Cola recently announced a new marketing strategy that is referred to as the ‘One Brand Strategy’ this is where a company chooses to limit itself to one brand for each performance segment. Consequently the strategy is aimed exclusively at one market segment, focusing the depth of the brand strategy (Lamb, Hair & McDaniel, 2013, p.77). The strategy is part of the Coca-Cola approach to develop a creative campaign “Taste the Feeling”. One Brand Strategy is a marketing strategy that companies adopt as they grow where they end up with only one brand in operation. Coca-colas aim by introducing the one-brand strategy is to leverage the Coca-Cola brand to boost sales of their products that are sugar-free such as Coke Zero, Diet Soda and calorie-free soda (Scholderer and De Brabander, 2017, p.2-3. Subsequently, one brand strategy is holding immense benefits to any company, firstly the company maintains communication clear and concise and avoids feeding customers with information overload, additionally when Coca-Cola adopts the strategy with will manage many brands hence make clear decisions on the resources to invest on the specific brand (Vrontis & Sharp, 2003, 289-309).Marketing communication mix refers to specific methods used in promotion of the company’s product to the target market. The most common depictions of promotional mix comprise five elements: advertising, personal selling, discounts and promotions, direct marketing, event sponsorship, and public relations (Gartner and Rifkin, 2017, p.55). Coca-Cola uses various communication mix strategies, one of the most common strategies of promotion id advertising, Coca-Cola adverts are generally visible in almost every part of the world, the recent technological advancements the company has ventured into ads and online advertising that include videos and television commercials that are created to ensure that the target customer is informed and later persuaded to make the purchasing decision, further, the company realizes that customer satisfaction is of utmost importance, thereby Coca-Cola ensures through their adverts that they promote the message of satisfaction through various tag phrases, “taste the feeling”(Shimp & Andrews, 2013, p.95-101).
Another major communication and promotional strategy used by Coca-Cola is Sports and physical activity marketing or the commonly known strategy of event sponsorship. Event sponsorship occurs when a company spends money to pay an event in order to be included in the event, the presence of the company exposes it and the products hence developing a customer base, the strategy does not basically revolve around sports but other events such as concerts and community events, the company might hand over merchandises during the event such as T-shirts, samples, gifts, and a few products (Nestle, 2015, p143). However, Coca-Cola being among major producers of beverages that pose stiff competition the company realized the need to adopt various strategies to communicate and deal with competition effectively, the organization has achieved a lot in terms of being the world leading beverage company by incorporating these strategies hence developing consistent efforts that align its products and mission with various cultures across the world (Gertner, and Rifkin, 2017 p.56). The factors that affect consumer behavior can be categorized into three groups: cultural factors, social factors, and personal factors. Cultural factors are factors that characterize a set of values and ideologies of a particular community or group of individuals, consequently, these factors impact the buying decision of an individual. Secondly, the social factors that affect consumer behavior are perceptions of other groups in the society, role in the society, relatives or status in the society. The third category is the personal factors and these are the factors that align with the findings, personal factors that affect consumer behavior include occupation, age, personality, and perception.
Factors of age being the most common, recent studies have shown that Coca-Cola consumption is highly present among youth and small children, individuals from 70 and above do not consume the beverage as frequent as the youth, other factors that align with the findings are perception, individuals have perceived the negative effects of carbonated drinks amongst them Coca-Cola, some of the assumptions that the drink is bad for your health due to the preconceived misconceptions that the drink is made using ingredients that are harmful containing chemicals. In other countries such as Malaysia, individuals perceive that the increased consumption of sweetened and carbonated drinks has been cited as an important factor of the development of obesity in school-aged children.
The aspect of consumer loyalty is developed on the basis of customer satisfaction and loyalty, as discussed above various factors contributes to consumer behaviors; consequently, the factors might affect customer loyalty positively or negatively. The recommendations that I would suggest would revolve around consumer behavioral. Since consumer behavior involves the study of how individuals and organizations and how they select and use products and services, it revolves around behavior psychology and motivations. Therefore consumer behavior will dictate how consumers think and feel; about a different choice that is available in the market, additionally how consumers reason and select between different products or rather alternatives. Therefore I would suggest social intelligence. Coca-Cola is considered a multinational company that can invest a lot concerning developing a target market and creating customer loyalty. In other words, the intensive market dimensions in the market can be traced using the social media research, this will include collecting consumer insights, through asking specific questions pertaining to the product or conducting questionnaires. Subsequently, the company can investigate consumers talking about their brand. Conducting research on the consumer insights and reviews can ultimately be a very viable solution to increasing consumer loyalty, by collecting the insights the company will be able to adjust the brand according to the customer’s preferences, according to collecting consumers insights is considered a marketing intelligence strategy that most companies have successfully used and increased even the customer base.
Conclusion
Fundamentally, a major influence of customer loyalty is responsiveness, due to the large market of Coca-Cola the company is unable to implement a viable strategy that can ensure that customers are reached and responded to upon major concerns about the brands. Responsiveness is the key in winning the loyalty of any customer when a company shows the willingness to respond to the needs or requests of customers quickly, the customer develops a firm loyalty. This therefore basis my conclusion on developing a strategy that will ensure that every customer is heard anytime he/she makes a request or complain, by collecting customer complaints and marinating a log the company will be able to adjust their brands according to the requests of the client, subsequently these complaints will help the company after they review them frequently looking for indications of product defects that could be addressed. There is need for implementation of loyalty programs that are aimed at rewarding consumers for frequently making purchases. For multinational companies especially companies that deal with beverages it is difficult for customers to gain and maintain customer loyalty, when one consumes a drink it depends mostly on the mood if he/she will like the beverage, however, Coca-Cola company has over the years had consistent efforts in strategies to maintain customer loyalty, nonetheless running customer loyalty programs that are technologically integrated can be a viable strategy, the strategy might involve investing in app technology which will incorporate the incentives.
References
Armstrong, G., Kotler, P. and Opresnik, M. (2017). Principles of Marketing. Boston: Pearson, pp.77-90.
Arnould, E., Price, L. and Zinkhan, G. (2014). Consumers. Boston: McGraw-Hill/Irwin, p.78.
De Mooij, M., 2013. Convergence and divergence in consumer behaviour: implications for global advertising. International Journal of advertising, 22(2), pp.183-202.
Gertner, D. and Rifkin, L. (2017). Coca-Cola and the Fight against the Global Obesity Epidemic. Thunderbird International Business Review, 60(2). Pp.56
Imram, N., 2015. The role of visual cues in consumer perception and acceptance of a food product. Nutrition & Food Science, 99(5), pp.224-230.
Kitchen, P. and Tony Proctor, T. (2011). The Informed Student Guide to Marketing. 1st ed. Padstow, Cornwall: Pearson/Allyn and Bacon, p.98.
Lamb, C., Hair, J., & McDaniel, C. (2012). Essentials of marketing. Mason, Ohio: South-Western Cengage Learning, p.66-80
Lamb, C., Hair, J., & McDaniel, C. (2013). Marketing. Mason, OH: South-Western/Cengage Learning, p.77.
Nestle, M. (2015). Soda politics – taking on big soda (and winning). United States of America, New York: Oxford University Press, p.143.
Sarma, S. (2018). Global observations of the influence of culture on consumer buying behavior (4th Ed.). United States of America: IGI Global, p.59-66.
Scholderer, J. and De Brabander, H.F., 2017. Why consumers behave as they do with respect to food safety and risk information. Analytica chimica acta, 586(1-2), pp.2-7.
Shimp, T., & Andrews, J. (2013). Advertising, promotion, and other aspects of integrated marketing communications. Mason, Ohio: South-Western Cengage Learning, p.95-101.
Sicilia, M. and Palazón, M., 2008. Brand communities on the internet: A case study of Coca-Cola’s Spanish virtual community. Corporate Communications: An International Journal, 13(3), pp.255-270.
Sicilia, M. and Palazón, M., 2008. Brand communities on the internet: A case study of Coca-Cola’s Spanish virtual community. Corporate Communications: An International Journal, 13(3), pp.255-270.
Vrontis, D., & Sharp, I. (2003). The Strategic Positioning of Coca-Cola in their Global Marketing Operation. The Marketing Review, 3(3), p. 289-309.
Williamson, J. and Fleury, A. (2013). The competitive advantage of emerging market multinationals. Cambridge: Cambridge University Press, p.56.
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