Free Custom «Marketing Segmentation» Essay Paper

Free Custom «Marketing Segmentation» Essay Paper

Understanding the Concept and Process of Marketing Using Segmentation

Marketing refers to the actions, set of institutions as well as procedures for generating, communicating, conveying, and switching offerings, which possess worth for associates, consumers as well as for the entire society. Segmentation is employed in marketing in order to divide the market into groups of consumers sharing comparable set of wants and needs. The duty of the marketer is to identify the segment and decide the one to target (Konrad 1992). With regard to marketing segmentation, this excerpt will analyze the Coca-Cola Company.

Elements of the Marketing Process of Coca-Cola Company

Coca-cola, a leading soft drink firm has adopted a global marketing strategy. The company’s market place is considered single and Coca-cola has been using a uniform strategy for many years. However, the strategy is changing with times and currently; the company is designing marketing campaigns for various regions in the world. The company conducts market research efficiently in the entire world. The company is able to distribute intensively in all parts of the world. The company has a well organised marketing team that works in line with consumers’ regions. They are able to maintain good relations, which enhance effective sales (Lamb, Hair & McDaniel 2011).

Coca-cola advertising strategy has created the company a demand globally. The company has adopted a marketing mix, which contributes to successful marketing. The bottling system is also a plus to the company’s marketing process. The brand image of the company is also significantly influential to the marketing process. Their packaging system has enabled the company to position itself well in the market. Another important element is price; Coca-cola has been able to control the prices of its products, especially in the rural areas where clients are more sensitive to prices rather than quality (Konrad 1992).

The Benefits and the Costs of Marketing Orientation for Coca-Cola Company

Marketing orientation is divided into product and market orientation. A firm that is market oriented organises its activities, services as well as products around its clients’ needs and wants. On the other hand, a firm based on product orientation focus primarily on the products as well as the understanding, products, and systems, which support the particular product (Otta 1990). Coca-cola is based on both product and market segmentation because the two are intertwined and is beneficial if adopted together. For instance, the company is able to conduct market research in order to know what the clients want. The orientation also helps Coca-cola to arrange product research according to the market research results. The company also benefits in that it is able to engage constantly in qualitative market research aimed at finding new ideas from focus groups of clients. Through orientation, Coca-cola produces new products and tests them in smaller market regions prior to introducing them onto a bigger market.  Additionally, the company evaluates how consumers perceive its goods and services continuously. This helps the company to make necessary improvements to product offerings and according to the emerging technologies.

Obviously, marketing orientation also comes with some costs if it is to be effective. Coca-cola incurs a lot of cost in terms of cash during the orientation process. For instance while testing new products in the market; the company has to give free samples. Similarly, marketing research is also expensive and time-consuming. Further, the constant evaluations are also expensive and time-consuming. However, these costs are part of any marketing orientation, which are later covered when the brand launching is successful and brings in profit to the company (Gary 2008).

The Macro and Micro Environmental Factors which Influence Marketing Decision

Currently, the business environment is increasingly becoming more challenging and very complex. Marketers are often confronted with mounting pressures and demands, which they must understand and respond to. The environment that a company operates in is surrounded by external and internal factors. These factors can be further classified into two categories known as micro and macro environments.  The micro environmental factors that influences marketing decisions are the company, customers, suppliers, competitors, public, and marketing intermediaries. The internal environment of an organisation has a great stake on the overall decision of the marketing strategy. The different departments and management levels are the main decision making organ in the organisation. The type of market in which the organisation operates also affects the marketing decision. These markets include consumers, producers, international markets, governments, and resellers (Kotler 2009).

Competitors that the organization faces have the greatest weight in determining the marketing processes of that particular organization. In the case of Coca-Cola Company, the choice of marketing orientation is greatly influenced by its powerful competitors. The company faces a great threat from its competitors such as Pepsico (Harvey 1900). The weakness that Coca-Cola Company exhibits is less advertisements of their products. The public also has a stake and include forces such as the government, the media, and financial.

The macro environmental factors include culture, demography, economic, political, technological, and natural. This can be dealt with adequately in terms of PESTEL analysis (political, economic, socio, technological, environmental, and legal). The political effects of the government transcends law making. Economic policies affect pricing, competitiveness, costs, and profitability of all enterprises. Many marketers find it as very challenging task to identify, examine as well as respond to the social environment/factors such as tastes, preference, attitudes, culture, lifestyle, population characteristics, and educational standards.

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Technology has caused an accelerating change in the methods, means, and the knowledge employed in the supply chain. It has expanded the production possibilities, which in turn satisfies many wants. Coca-cola has not been left behind in the use of technologically improved techniques in production and marketing of its products such as the use of Internet to advertise and promote its products and services.  Technological advancements also help in increasing the marketing environment.

Demographic factors affect the customer base. These include age structure and the entire population. For instance, Coca-cola targets the young people in India because they make up the biggest part of the population. On the other hand, the company targets older people in Europe because they are the most. The economic environment affects the purchasing power of consumers which in turn affects the sales turn over. Shortage of raw materials and increased pollution are some of the natural environment that affects the marketing decision. The sales of Coca-cola products are greatly affected by weather.

Segmentation Criteria for Products in Different Markets

Product segmentation can be described as the process of designing and creating products and services in order to suit markets’ needs and preferences. Large, global companies such as coco-cola need to access and fully understand their markets so as to segment their products in a way that will retain and attract more customers.

There are various criteria for segmenting products designed for various markets. The first critical step is to investigate and understand the needs of the target markets. Coca-cola being one of the global companies should analyze its current customer base so as to describe the key customers for each product line. Through this way, the company will be able to determine their industry position and business stage in each market, and then plan on how to improve its product segmentation for each market (Lamb, Hair & McDaniel 2011).

The next step is to strive and meet the identified markets’ needs so as to satisfy them. For example if a market requires a certain type of product, then the company should supply this product so as to meet their needs. If the packaging and labeling has been identified as a need, the company should strive to adopt new packaging and labeling methods to meet the markets’ needs and requirements (Lamb, Hair & McDaniel 2011).

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The last and not the least is to measure the effectiveness of the segmentation methods employed in each market and adapt to them. The company should identify the most effective segmentation method for each of it markets and then plan on how best to improve it. However, Coca-cola should often access and determine the effectiveness of its products segmentation criteria for its various markets. Through this way, if a segmentation criteria start failing, then it would be rectified immediately so as to avoid losing customers.

A Targeting Strategy for a Selected Products/Service

Coca-cola targets the whole market but also tries to earn more income from a segment instead of obtaining revenue from other producer sources. The company achieves this by recognising other segments such as through the use of demographics namely age and gender. The particular strategy to be addressed as the target strategy is thus demographic and especially, gender. Coca-cola targets males and females differently. This is because of the gender differences in terms of preferences. Ladies are known to like soft drinks while other drinks are associated with men. Fanta is one of the products that Coca-cola uses to target the ladies and children. This is because of the brand quality in terms of taste and appearance. The company makes the Fanta in such a way a child is able to spot it and identify it from a group of other drinks. The colour and taste is appealing for kids whereas the taste appeals more for ladies. Thus, Fanta is one product that Coca-cola uses to target ladies and children.

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Demonstrate how buyer behavior affects Marketing Activities in Different Buying Situations.

Buyer behavior is influenced by several forces such as social, cultural, internal, personal, and economic factors. Human conduct is governed by instincts and it is instincts that make people to act differently at different times. Marketers should carefully plan on how to make full use of the buyers’ motives. The currently marketing is customer-based and therefore, it’s crucial to utilize the customer needs in framing policies such as production and pricing policies (Glynn 2004).

Buyer behavior unveils various other factors that dictates the like and purchase of a specific product. For instance, if the consumers are attracted by packaging, the marketers will pay more attention on how best to package their products. Some buyers also purchase cheap and hence it would be counterproductive to raise prices. However, for the products that are bought to enhance social status, it is very easy to raise the pricing. For instance, Coca-cola considers that rural populations buy cheap products whereas those in urban areas look for quality products. Thus, the company is able to market its products depending on the geographic segmentation. This has an influence on the company’s distribution channels and thus Coca-cola has to ensure the distribution channels are cheap and economical for rural areas.

Propose New Positioning for a Selected Product/Service.

Positioning doesn’t involve what is done to the product but rather what is done to the mind of a prospect. Coca-cola has different products that are targeted to varying market segments. The company can position thums up to the energetic as well as adventurous individuals who are interested in love taking risk and adventure to prosper. The advertisement of thums up should be aimed at positioning it in the consumer’s mind as the strong soft drink. The campaign for positioning thums up should thus be at the forefront and much weight as well as efforts put into it to popularize it among the males as it is referred to as a masculine product.

SWOT and Pestel Analysis for Coca-cola

SWOT Analysis


-the brand is the leading in the world

-its operations are large scale

-the company’s revenue growth is strong


-         The performance in North America is sluggish


-         The market for bottled water is growing

-         The Hispanic population is growing in the US

-         Acquisitions


-         The company face intense competition

-         It relies on bottling partners

-         The growth of carbonated beverages is sluggish


Coca-Cola’s PESTEL Analysis

Political Analysis

-         The company is monitoring the regulations and policies laid down by the government, thus the firm is affected by any changes in the laws, especially when entering a foreign nation

-         Currently, the company is not facing any political issues.

Economic Analysis -         The market for carbonated drinks is growing slowly, particularly in the firm’s main market, i.e. North America. In 2004, the firm recorded a market growth of just 1% for North America
Sociological Analysis

changes in consumer lifestyles

- Consumers have become more health conscious, which impact the sale of the carbonated drinks like juices, bottled drinks, and tea.

- Decrease in the demand for carbonated drinks, which result into a reduced in the revenues Coca-cola obtains.

Technological Analysis

-the advancement of technology is coming along with the introduction of new products into the market.

- Coca-cola took advantage of the advanced technology to create cherry coke in 1985 although the consumers continue to opt for the traditional taste of the original coke.



Convergent and Lateral thinking as Applied by Coca-Cola

Coca-cola, although an old company, continues to advertise and create awareness of its products worldwide. The company uses all-pervasive means to advertise its brand and create identity. To remain competitive and sustain the brand identity, Coca-cola employs convergent and lateral thinking. This involves strategizing on ways to win consumers’ trust for their old brands in a market with new and emerging brands (Lamb, Hair & McDaniel 2011). Coca-cola through convergence and literal thinking communicates its brand message beyond the visual and information content of packaging. The company uses high quality materials to position its products and this is accompanied by a message that configures the mindset of the consumers, which lure them to buying their brands. This is through producing and marketing creatively thereby finding their way into the minds and hearts of the consumers. Thus, Coca-cola positions its products in the minds of consumers through lateral thinking. A good exemplar is the thums up drink, which has been positioned as a strong drink targeting energetic people. Through convergence, Coca-cola has managed to position the thums up in the minds of its target group thereby competing over its rival mountain dew from Pepsi, which target the same group. Therefore, literal and convergence thinking has helped Coca-cola to remain competitive because of its strategic positioning. 



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