Assessment 8: Market Segmentation and Product Positioning Map

STRAM 1: Strategic Management

Introduction

Coca-Cola company is the world’s driving producer, advertiser, and merchant of delicate

drinks. Coca Cola utilizes “Multisegment” focusing on procedure which implies that the

organization has more than single, all around characterized, market section. It builds up a

showcasing blend for each of the portions. Coca Cola has more than 400 distinct items line,

aggregate of 3,500 item blend.i

The company has been very successful in its campaign that it has solidified its status to

be one of the icons in American culture. As it continues to expand globally, Coca-Cola partnered

with several bottlers worldwide to go over all the processes of every product.

Behind the company's success is a marketing approach that typically guides Coca-Cola to

market its products. Most companies generally classify their marketing strategies into different

categories. As with Coca-Cola, market segmentation, targeting, and positioning are three

essential factors that helped the company effectively cater to its target customers.ii

The subsequent chapters of this article will analyze these three variables in Coca-Cola's

marketing strategy. This can also serve as a guide for startups to formulate their marketing

approach.

Market Segmentation of Coca-Cola

Market segmentation refers to classifying potential markets in segments or groups with

common needs and responding similarly to a specific marketing action. This approach allows

firms to target various categories of customers that perceive the absolute value of particular

products and services variable from one another.

Coca-Cola's market segmentation focuses on four various elements, namely geographic,

demographic, psychographic, and behavioral. Coca-Cola might have originated from the United
States, but it has expanded its brand to various countries across the globe over the years. The

company's geographic segmentation aims to drive the market into different geographical units,

including cities, regions, and neighborhoods. While Coca-Cola might be focusing on urban and

suburban areas, it also ensures a countrywide product distribution network. This is in the

realization that as the company expands, there is a demand from those in rural areas.

Meanwhile, the demographic segmentation of Coca-Cola is divided into sub-segments

based on various variables like age, occupation, family life cycle, race, religion, generation,

social class, and nationality. These variables are the most popular basis of Coca-Cola to

distinguish customers groups. The psychographic element of the Coca-Cola market segmentation

is categorized into different groups based on lifestyle, personality, or values.

The behavioral variable is the final element in Coca-Cola's marketing segmentation. It

generally focuses on the customers' knowledge of, use of, response, and attitude towards its

products. Most marketers treat the behavioral variables as excellent starting points for

formulating market segments.

Targeting of Coca-Colaiii

Coca-Cola's targeting strategy is broader, not only because of its global presence in the

market but also with the several products that they provide. There is also the need to satisfy

various customers, ranging from average to health-conscious ones. The primary target of Coca-

Cola is younger customers within the age bracket of 10-25 and a secondary market composed of

people aged 25-40.

The company targets the market that desires an intense flavor with their regular cola

drinks in terms of taste. Meanwhile, diet cola drinks and their variants target those customers that

are health conscious. Coca-Cola campany has also expanded its product to non-cola beverages to
target those not fond of drinking its regular cola drinks. A Coca-Cola product such as Sprite is

specifically designed to target teens and college students, while others target the young working

group.

Positioning of Coca-Cola

Positioning tackles how products will stand with the competition, which offers the same

products and services in the market and customers' minds. An excellent positioning transforms a

product into a unique one, making customers consider using it. In a marketplace with various

cluttered products showcasing similar benefits, an effective positioning strategy makes the

product stand out among others and creates curiosity from customers.

With Coca-Cola, it positions its products as thirst-quenching and refreshing. The products

they offer are said to bring joy to its target market. The drinks and other products from Coca-

Cola are also associated with having a great time with family and friends while enjoying daily

life. Additionally, the company also markets its products consistently and of premium quality.

For those looking for high-quality drinks, one of the names that will surely come into their minds

will be Coca-Cola. The company has an extensive selection of refreshments; each offers a

positive experience for consumers. In contrast to other beverage brands, Coca-Cola brands itself

as a product that provides happiness and positive in customers' lives. Ultimately, the company's

primary focus is to cater to the needs and preferences of its global customers.

Table of Segmentation, Targeting and Positioningiv

The Coca-Cola market segmentation, targeting, and positioning variables are

comprehensively described above. You can refer to this table below for a simplified list of how

the company categorized these variables and principles.

Table 1. Coca-Cola Market Segmentation, Targeting and Positioning

Market Segmentation Targeting Positioning

-Thirst-quenching and

refreshing products
Geographic  
-Promotes happiness and

positivity for every drink

Domestic
Region  
International

Urban
Density  
Rural

Demographic    

Age 10-40  

Gender Males and females  

Bachelor, singles not living at

Life-cycle stage home, newly married couples,  

Full Nest I and II

Average, above average, high-

Income  
income earners

Professionals, students,
Occupation  
employees

Behavioral    

Degree of loyalty Hard-core and soft-core loyals  

Benefits sought Refreshment, satisfaction of  

 habit, enjoying the good taste,

spending time with people

User status Regular users  

Easygoing, ambitious,
Personality  
determined

Psychographic    

Working, middle, and upper

Social class  
classes

Lifestyle Explorer, aspirer, succeeder

Coca Cola has been in operation since 1886 when the price of a bottle was going at five

cents according to Kanesan, Ismail, and Krishnan [3]. Coca Cola is now the world-leading soft

drink manufacturer with an employee base of more than 700,000 and about 500 brands. For all

these periods Coca Cola as a company has not changed over the years with the company being

able to maintain its tastes from its inception to the present date. Coca Cola is known to have

managed to remain competitive all these while because it has segmented its market to fit the

products it produces and that has seen the company create a highly loyal consumer. Even though

there are commonly known methods of segmentation such as demographic, psychographic,

geographic, and behavioral segmentation, Coca Cola has been known for its market demographic

which is largely based on family size, age, and income.

Other Competitors Productv

PepsiCo segmentation, targeting and positioning decisions can be specified as the essence

of overall marketing efforts. Segmentation involves dividing population into groups according to
certain characteristics, whereas targeting implies choosing specific groups identified as a result

of segmentation to sell products. Positioning refers to the selection of the marketing mix the most

suitable for the target customer segment.

PepsiCo uses multi-segment type of positioning and accordinglyvi, it targets more than

one customer segment at the same time with different products or service packages. For example,

Pepsi-Cola is positioned as soft drink that tastes good and has a pleasantly refreshing impact.

However, Pepsi-Cola contains a high amount of sugar and it is not positioned for customers that

are concerned about health implications of consuming carbonated soft drinks. For this specific

customer segment PepsiCo offers Diet Pepsi, which is positioned as a soft carbonated drink that

contains less among of sugar compared to Pepsi-Cola and other soft drinks.

Table 2. PepsiCo segmentation, targeting and positioning:

Type of Segmentation PepsiCo target segment

segmentation criteria

Geographic Region Domestic/international

Density Urban/rural

Demographic Age 15-45

Gender Males & Females

Life-cycle stage Bachelor Stage young, single people not living at home

Newly Married Couples young, no children

Full Nest I youngest child under six

Full Nest II youngest child six or over

Income Average, above average and high earners

Occupation Students, employees, professionals

Behavioral Degree of ‘Hard core loyals’ and ‘Soft core loyals’

loyalty

Benefits sought Refreshment, enjoying good taste, satisfaction of a habit,

spending time

Personality Easygoing/determined/ambitious

User status Regular users

Psychographic Social class Working class, middle class and upper class

Lifestyle Aspirer, Succeeder, Explorer

PepsiCo works in the same industry and competes closely with Coca Cola, they are more

like duopolies and therefore they tend to have similar market strategies. However, PepsiCo is

known for its multi-segment type where it targets more than one customer with its diverse

products. Just like Coca Cola, PepsiCo is also known to sell beverages with a high concentration

of sugar which creates health concerns among many people. Some people find consuming

carbonated soft drinks sold by PepsiCo to be a health hazard. The company reacted to this

segment by introducing Diet Pepsi which is known as a soft carbonated drink with a very low

level of sugar. The Pepsi brands can be divided into three major sections. The first one is the

Pepsi Max which is known for its low calorie. The second brand is known as Diet Pepsi which is

the one that has been introduced with low sugar content for those who may be diabetic and those

who do not want high sugar beverages. The third brand is known as Pepsi Next which is also

60% less sugar. The different major brands have been effectively used to target specific markets

segments and have worked so positively for the company for several years.
Diagram

Now that we have categorized each principle's components in Coca-Cola's marketing

strategy, presenting it through a diagram like a map can be ideal. A map allows viewers to

understand better the connections of the elements of the marketing approach. See Image 1.

Image 1. Coca-Cola Marketing Segmentation, Targeting and Positioning Diagram

Coca-Cola

My Takeaways

Suppose we try to open a beverage store, the Coca-Cola's marketing approach can be

helpful. The company might be a giant one, but several principles are also applicable for

beginner entrepreneur or starter, looking at the marketing treatment of Coca-Cola. It is just a

matter of localizing each variable to fit into your brand's marketing approach. The diagram and

discussion above can also be helpful if you are studying marketing and plan to create your first

marketing strategy using marketing segmentation, targeting, and positioning principles.

i
https://mpk732t12016clusterb.wordpress.com/2016/04/09/3743/
ii
https://www.smartling.com/resources/101/what-can-we-learn-from-coca-cola's-global-marketing-success/
iii
https://www.start.io/blog/coca-cola-target-market-segmentation-customer-analysis-marketing-strategy/
iv
https://prezi.com/j3nuefe63w_h/segmentation-of-coca-cola/
v
https://embapro.com/frontpage/marketingstpcoanalysis/7704-pepsico
vi
https://amcollective.sg/reads/5-marketing-strategies-we-can-learn-from-pepsi