Segmenting markets   

Not all consumers or business customers share identical needs, product requirements, or buying behaviour. Marketers deal with this fact through market segmentation – one of the most fundamental parts of marketing strategy. This aspect consists of three steps: segmenting, targeting, and positioning. (Dibb, Ferrell, Simkin, & Pride, 2012)

Just like other companies, The Coca-Cola Company targets different market segment for their product Coca-Cola. They make use of demographic segmentation and take into account the following variables:

Ø  Age – Coca-Cola targets the youth (age 15-25) mainly as this group is the most active and therefore requires the most energy and refreshment.

Figure 1: Different sizes of Coca-Cola
Source: Coca-Cola

Ø  Family size – each society/country has different family sizes which is why Coca-Cola is bottled in various sizes such as 500ml, 1L, 1.5L, and 2L packs. This way, consumers can choose with ease which size is best suitable for their family.

Ø  Level of income – Coca-Cola is distributed in returnable glass bottles in low level income countries/places such as the Philippines whereas consumers with high level income are served with Coke in tins.

In regards to geographical segmentation:

Ø  Urban and sub-urban areas – Coca-Cola has distribution networks countrywide however these areas are more targeted as opposed to rural areas.

Coca-Cola also uses psychographic segmentation through the following variable:

Ø  Lifestyles – products from this company especially the classic Coca-Cola is presented to suit the modern lifestyle, which is characterized by busy people (always-on-the-go) and mobile generation. This is the reason why coke in cans are manufactured, to promote convenience.

The market is also segmented behaviorally (which relates to the way consumers behave towards the product). Variables include:

Ø  Volume usage – the market is divided into heavy, moderate, and light users. Coca-Cola then serve these segments through variations in packaging (e.g. 6 bottle pack of 1.5L, or 24 cans in a crate) This can also be influenced by holidays and other occasions

Ø  Benefit expectations – consumers often seek for promotions that include raffles or prizes which Coca-Cola implements through their labels/packaging. A great example is their campaign in the summers of 2013 and 2014 called Share a Coke where people can customize their own Coca Cola bottles with their name in it. This generated sales of more than 150 million personalized bottles. (Coca-Cola, 2014)

Figure 2 Some of the names from Coca-Cola's new marketing campaign Share-A-Coke. Source: Coca-Cola

The effectiveness of segmentation can be maximized when segments are measurable, substantial (large enough to be sufficiently profitable), accessible (easy to reach), stable (segments will be around long enough for marketing mix to be implemented), and useful (meaningful and are likely to enable company to improve marketing strategy and better satisfy target market). (Dibb, Ferrell, Simkin, & Pride, 2012)

The segments described above are easy to identify and measure through the use of marketing research (consumer panels or questionnaires/attitude surveys). Moreover, they are mostly easy to reach, and stable which is why Coca-Cola is able to carry out marketing strategies like promotion and aggressive advertising especially in relation to occasions such as Christmas. Lastly, each segment is useful and therefore helps The Coca-Cola Company to develop their marketing mix and expand their markets.

Bibliography

Coca-Cola. (2014). Share A Coke Names | Marketing Campaign. Retrieved November 21, 2016, from Coca-Cola website: http://www.coca-cola.co.uk/stories/share-a-coke#

Dibb, S., Ferrell, O., Simkin, L., & Pride, M. (2012). Marketing Concepts & Strategies (6th ed.). Cengage Learning EMEA.