MARKETING STRATEGIES

1. MARKET SEGMENTATION

The major segmentation variables – geographic, demographic, psychographic, and behavioral

segmentation.

1.1. Geographic segmentation

Geographic segmentation calls for dividing the market into different geographical units such

as regions, cities, or neighborhood. Coca-Cola has a countrywide network of product

distribution but the company segments more in urban and suburban areas as compared to

rural areas.

1.2. Demographic segmentation

In demographic segmentation, the market is divided into groups on the basis of variables such

as age, family life cycle, gender, income, occupation, education, religion, race, generation,

nationality, and social class. Demographic variables are the most popular base of Coca-Cola

Company for distinguishing their customer groups. The reason is that consumer wants,

preferences, and usage rates are often associated with demographic variables. Another is that

demographic variables are easier for Coca-Cola to measure because they can evaluate or

conduct surveys for the demographic segmentation.

*Age and Life-Cycle Stage

Coca-Cola Consumer wants and abilities change with age. Age and life cycle can be tricky

variables because there are different needs and wants as accord to the age of a person. The

main sector in which Coca-Cola Company targets is the youth because there is a much need

of refreshment and energizers to cope up with their daily activities.

*Gender

Gender is also an issue needed to be given prior by Coca-Cola. Men and women tend to have

different attitudinal and behavioral orientations, based partly on genetic makeup and partly on
socialization practices. Coca Cola targets both genders with its wide variety of drinks. This

market is relatively large and is open to both genders, thereby allowing greater product

diversification.

*Family size

Family size basis is also a base segmentation for Coca-Cola. In our society, we have families

with different family size. So Coca-Cola makes a variation in their served bottle size into

many ways such as 500ml, 1L, 1.5L, 2L pack. People can easily choose a suitable pack based

on their family size.

*Income

Coca-Cola segments different income levels by packaging. For example, for people with a

low level of income, the company has small returnable glass bottle; for the mediocre class it

has non-returnable bottle, and for people with a high level of income it has Coke tin.

*Social Class

Social class has a strong influence on preference in food and drinks. Coca cola design

products for specific social classes.

1.3. Psychographic segmentation

In psychographic segmentation, Coca Cola buyers are divided into different groups on the

basis of lifestyle or personality or values. People within the same demographic group can

exhibit very different psychographic profiles, for that reason Coca Cola Company designed

and made product which are suitable for their personality.

*Lifestyle

People exhibit many more lifestyles than are suggested. People differ in attitudes, interest,

activities, and these affect the goods and services they consume. Coca-Cola Company

presented products which are suitable for modern, busy life style (shortage of time) and

mobile generation.
*Personality

Coca Cola Company is using personality variables to segment markets. They endow Coca-

Cola products with a ―brand personality‖ that corresponds to a target consumer personality.

1.4. Behavioral segmentation

In behavioral segmentation, Coca Cola buyers are divided into groups on the basis of their

knowledge of, attitude toward, use of, or response to a product. Many marketers believe that

behavioral variables-occasions, benefits, user status, usage rate, loyalty status, buyer-

readiness stage, and attitude—are the best starting points for the construction of market

segments.

*Occasions

Coca Cola consumers can be distinguished according to the occasions when they develop a

need, purchase a product, or use a product. Occasions segmentation can help firms expand

product usage.

*Benefit sought

Sometimes, for the promotion strategy of Coke, Coca-Cola Company introduces prizes in the

top cover.

Table: Summary of market segmentation variables of Coke

Variable Typical breakdowns

Geographic - Countrywide distribution network

- Focus on urban and suburban areas

Demographic

Age Young people

Gender Both male and female customers

Family size Variety of packages for different family sizes

Income All

Psychographic

Social class All

Life style Modern, busy life style, mobile generation

Personality ―Brand personality

Behavioral

Occasions When customers develop a need, purchase or use a product

Benefit sought Prizes on packages

2. TARGET MARKETS

The target market for Coca cola is very wide as it satisfies the needs for many different

consumers, ranging from the healthy diet consciousness through Diet Coke to the average

human through its best selling drink regular Coke. Most Coke products satisfy all age groups

as it is proven that most people of different age groups consume the Coca Cola product. This

market is relatively large and is open to both genders, thereby allowing greater product

diversification.

Coke’s commercials basically based on young generations, so the young generation is the

target market of Coke because they want to represent Coke with the youth and energy but

they also take the old people into consideration they take then as a co-target market.

3. POSITIONING

Bottle Sizes:

The company offers their products in different bottle sizes which include:
• SSRB Standard Size Returnable Bottle

• LRB Litter Returnable Bottle

• NRB No Return Bottle or Disposable Bottle

• PET 1.5 or 2 Liter Plastic Bottle

• CANS Tin Pack 330 ml

Packaging:

Coca cola products are available in different packaging:

• 24 Regular Bottle Shell.

• 6 Bottle Pack for 1.5 PETs.

• 12 Bottles in a pack for Disposable Bottle.

• 24 Cans in one crate.

4. MARKETING MIX

The marketing mix is probably the most crucial stage of the marketing planning process. The

marketing mix refers to the combination of the four factors (price, promotion, product, and

place) that make up the core of a business’s marketing strategy.

4.1. Product

Each design and logo of Coca-Cola has flexible transformation, creativity and

appropriateness to appear on advertisements, T-shirts, beach towels, hats, which creates a

complete marketing campaign for Coca-Cola. Coca Cola has recently been honored the

Platinum Pentaward 2009 for its summer 2009 designs, which is the noble prize for designing

eye-catching and unique product package. With this design, Coca-Cola has confirmed its top

position for the package design styles of beverages.

Also Coca Cola continuously innovates its products with more beautiful and easier-to-use

packaging design. Coca Cola bottle packaging includes: 330ml cans, bottles Pet 1.5L, 330ml

tank (24L / T). The company also introduced plastic bottles 390ml with compact and elegant

design to meet the shopping needs of each customer.

4.2. Promotion

 Price deal: A temporary reduction in price.

 Loyalty rewards program: Consumers collect points, miles, or credits for purchases

and redeem them for rewards.

 Coupons: Coupons have become a standard mechanism for sales promotions.

 On-line couponing: Coupons are available on line. Consumers print them out and take

them to the store.

 Online interactive promotion game: Consumers play an interactive game associated

with the promoted product.

Contests/sweepstakes/games: Consumers are automatically entered into the event by

purchasing the product.

4.3. Place

Coca-Cola beverages are produced in the three bottling plants located in Ho Chi Minh City,

Hanoi and Da Nang. In 2001, the Vietnamese government agreed to allow the merger of the

three bottling plants under the centralized management structure, in which the Coca-Cola

bottling plant in Ho Chi Minh City performs the management role. Two bottling plants in

Hanoi and Da Nang currently operate as two branches of the Coca-Cola Company in northern

and central Vietnam respectively. These manufacturing plants enables the company to expand

the distribution network in all three areas, providing products for the agencies in those areas.

For beverage products, distribution is important. Since Pepsi entered Vietnamese market

before Coca Cola, it took over a large number of distributors. Hence Coca Cola need to
continue to expand its distribution network, through the agencies, cafes, restaurant, etc. and to

attract dealers by increasing the support for active agents such as gifting, decorating shop

support, financial support.

4.4. Price

Since Coca Cola Vietnam faces a major threat from its competitor Pepsi Co., so naturally the

pricing is done keeping in view the increasing rivalry with Pepsi. Pricing is basically standard

for all over the world. Price changes occur seldom after a longer period of time say, a year etc.

Mostly prices are devoid of governmental and/or political laws and regulations but in

Vietnam, due to an ever increasing rate of inflation, prices have increased in a short span of

time.

Coca Cola consider the buyer's perceived value, not the seller's cost as an important basis for

pricing. They use the cost factor prices in the marketing mix to build perceived value in the

minds of buyers.

 Coca Cola pricing strategy of market penetration: Coca Cola selects low price strategy

for new products, in the hope that will attract are a large number of customers and

gain a large market share.

 Discount pricing: Coca Cola will adjust its prices to commercial customers who pay

ahead of time, buy products in large quantities.