Table of Contents

1.0 Introduction 2

2.0 Decision Making Process 2

3.0 Need Recognition & Problem Awareness 3

3.1 Motivation 3

3.2 Motivation and Involvement 3 - 4

3.3 Promotion 4

4.0 Information Search 4

4.1 Culture and Subculture 4 - 5

4.2 Memory 5

4.3 Product 6 - 7

4.4 Promotion 7

5.0 Evaluation of Alternatives 7

5.1 Attitudes 7

5.2 Product 7 - 8

5.3 Price 8 - 9

5.4 Promotion 9-10

5.5 Personality 10

6.0 Purchase 10

6.1 Place and Distribution 11

6.2 Price and Lifestyle 11

7.0 Post Purchase Evaluation 12

8.0 Conclusion 12 - 13

9.0 Bibliography and References 14

Coca Cola

1.0 Introduction

Coca Cola has been an iconic brand that has been considered as a “living symbol of Joy, Youth and Prosperity.” Since its inception in 1886 Coca Cola has gained momentum making it a globally recognized brand with a portfolio of more than 3000 beverages. Coca Cola has led the soft drink market expanding to other markets achieving an oligopoly position with an immense market share making them the global leader for carbonated drinks. But how has this iconic brand become a legend? More importantly is why consumers are still purchasing Coca Cola? The purpose of this assignment is to demonstrate how Coca Cola has become a success utilizing the consumer decision making process as the framework upon which the principles of consumer behavior will be integrated.

2.0 Decision Making Process

The consumer decision making process is essential to understanding the various decision processes a buyer experiences. The decision making process is integral for companies to understand how buyers think and behave when making purchasing decisions. Companies utilize the decision making process because they are concerned with both the practical needs of the buyer and the emotional or personal needs of the individual.

Fig 1 Decision Making Process 1

1 http://tutor2u.net/business/marketing/buying_decision_process.asp

2

3.0 Need Recognition and Problem Awareness

What triggers a consumers want for a coke? When consumers are affected by an internal stimulus such as thirst, problem awareness is created. In order to satiate this need consumers are exposed to a variety of thirst quenchers for example water, juice etc. However consumers choose to consume a Coca Cola beverage instead which indicates their satisfaction is fulfilled by a want for this particular beverage.

3.1 Motivation

Coca Cola appeals to two types of needs within a consumer. The first is the biogenic need which is the psychological utilitarian need of thirst which can be seen as the lowest level of the Maslow Hierarchy of Needs (Fig 2). Coca Cola however seeks to satisfy the higher level needs such as hedonic needs, ego needs and self actualization. Therefore Coca Cola understands the importance of targeting higher level needs in order to build brand loyalty for ensuring consistent sells.

Fig. 2 Maslow Hierarchy of Needs 2

2 http://askjason.blogspot.com/2008/06/question-what-is-maslows-hierarchy-of.html

3

3.2 Motivation and Involvement

Thirst acts as a drive that’s motivates consumers to take action to quench their thirst. Therefore Coca Cola has made it an integral part of their operations to include strong campaigns that increase both motivation and involvement with their product. An example of this can be seen when the Coca Cola Company held a “Fire Passing” activity that consisted of passing the fire of the Olympic Games in preparation of the Beijing 2008 Olympic Games. This type of motivational tactic enhanced the involvement of consumers and actually created an environment that suggested that Coca Cola wants to be part of their lives. This type of involvement appeals to consumers and increases their favorability towards Coca Cola. It can also lead to consumers being motivated to purchases Coca Cola as well as create brand awareness.

3.3 Promotion

Consumers can also become motivated by the various slogans such as:-Passport to refreshment-Coca-Cola has the taste thirst goes for.-Coke adds life.-The pause that refreshes

Coca Cola has attempted to make consumers believe that consuming a Coca Cola entails a refreshing; exciting experience that triggers an emotional response that can only be satisfied with their product. Examples of this can be seen in their advertisements which perceive Coca Cola to be the ultimate thirst quencher unsurpassed by other brands therefore consumers who see these advertisements may experience the need for a coca cola.

4

Image #1 3

4.0 Information Search

As the consumer becomes motivated to seek a solution to their problem of thirst, they engage in two forms of information search:1) Internal2) External

4.1 Culture and Subculture

Information search is significantly aided by the consumer’s cultures and subcultures. Coca Cola appeals to this particular segment by stressing out different values such as family, friendship, happiness, exercise and being cool. The variety of values of Coca Cola covers a broad range of consumers from different ethnical backgrounds as well as reflecting the tastes and preferences of each generation.

An example of how Coca Cola targets families can be seen in the “Coca Cola Pet Promotion.” This is an example of family of orientation whereby Coca Cola targets the parents who in turn influence their children’s decision making

Its current advertisement shows different age groups in diverse locations drinking their new product (Coca-Cola Zero). It reaches out to the working and business class, showing offices and other work based locations. The exposure of the distinctively designed label and the coordinated and structured image differentiates the company’s products from the rest of the competition and made Coca-Cola the most recognized global product band.

3 http://sierrafath.wordpress.com/

5

Coca-Cola’s products are in different stages of the ‘product life. For example Coca-Cola Zero was introduced in Western countries (the U.S. and Europe) in 2005. The company is responding to growing consumer concerns towards obesity and the changes towards healthy and organic living. Coca-Cola Zero is at the maturity stage (well known, established brand in a highly competitive market) and has to be defended from competition of other companies with similar products.

Coca Cola has a competitive advantage due to the fact that 94% of the world’s population is familiar with the Coca Cola brand. Coca Cola however has taken a very Westernized approach to its advertising methods that have been significantly altered and customized to certain countries that they inhibit due to globalization of the brand.

Examples of this transition can be seen in their sales promotion activities in Pakistan:

Coca Cola Basant FestivalCoca Cola is the official sponsor of the basant festival that gives the more refreshing flavor to the colors of basant by adding more life to the festival, giving the consumer a unique experience they never tasted before. Now, “where there is basant there is Coca Cola.”

Coca Cola Concerts: Abrar-ul- haq who is a popular singer in Pakistan assisted with the brand positioning of Coca Cola in Pakistan by publicly announcing the benefits of Coca Cola to the mind, body and soul. This type of endorsement was specifically targeted towards the youth which is an example of the Observational Theory.

Coca Cola is also aggressively aligning itself with the values of environmentally concerned consumers by:-Reducing carbon emissions.-Utilizing the best possible mix of energy resources.

4.2 Memory

Coca Cola is of the opinion that it is essential to make sure that their product is stored in the long term memory of consumers. The tactic implied by Coca Cola is one of creating high levels of exposure to their consumers by sponsoring big events, implementing intensive campaigns and focusing on packaging.

Coca Cola does sponsoring for charities such as:-Katrina evacuees-Tsunami Reliefs.This creates a positive image and customer perception that consumer’s affiliate with Coca Cola.

4.3 Product

6

Coca Cola embraces the saying that, “Color is a creation of our eyes and minds,” by the usage of bright and vivid red colors Coca Cola is utilizing the strongest of all colors. The psychological effect of the color associates Coca Cola with key words such as winner, desire and hunger for fullness and experience of life that contributes to its brand personality. The classic typeface is meaningful because it captures the essence of the American way fo life therefore appealing to its Cultures.

Image # 2 4

Another rather prominent feature that stands out among consumers is the actual packaging of the Coca Cola that bores a semblance to the figure of a woman/ breasts. This unmistakably sexual sign unconsciously attracts the attention of consumers. This can be linked in terms of personalities to Sigmund Freud’s Psychoanalytic theory which is based on the hypothesis that human behavior is driven by motives that are influenced by psychological needs, sex being one of them. The shape also bores a semblance to a maternal meaning which involves feelings of security and peace. These two packaging tactics are likely to be stored in a consumer’s long term memory.

Coca Cola applies a classical conditioning approach by linking their product with jingles and songs. Examples of this are:The Hilltop Story, “ I’d like to buy the world a coke.”Always Coca ColaThe Bee Gees Coke Commercial.

This is an economical form of advertising that imprints upon consumers thoughts of Coca Cola that through repetition will be stored in the long term memory of consumers.

4.4 Promotion

Coca Cola campaigns that were immensely popular:

Coca Cola and Mc Donald’s A joint promotion was launched entitled, “we go together” whereby Coca cola was heavily promoted throughout the Mc Donald’s franchises.

Coca Cola and NokiaUnder the crown promotion that gave away Nokia phones with the purchase of Coca Cola products. “Caught Red Handed” campaign that pin pointed consumers who were

4 http://vi.sualize.us/view/fabiano/853685f33fa94489d1d38659507f42a2/

7

consuming Coca Cola and awarding them with cell phones and vice versa if they were caught conversing on a Nokia cell phone.

This is an efficient way to gain storage in long term memory of consumers because Coca Cola is affiliating with globally recognized brands such as itself. The recognition received was an excellent way to increase consumer awareness because consumers who are familiar with Mc Donald’s and Nokia and have preferences towards those products will assume that the high standards of Mc Donald’s and Nokia are duplicated at Coca Cola. The campaigns also assisted in increasing brand loyalty and confidence among consumers.

5.0 Evaluation of Alternatives

After the Information search the consumer must now evaluate the information gathered. Coca Cola must aim to be included in the “consideration set” of the consumer from which they will choose. It is futile to Coca Cola if they are not included into that set because then they would not be an option for step 4 of the consumer decision making process.

5.1 Attitudes

Changing attitudes about Coca Cola can be caused due to an approach avoidance conflicts such as:- The fact that consumers may develop a negative attitude towards the product due to the unhealthy aspects of Coca Cola. - The evaluation of competition such as Pepsi.

The main task of Coca Cola at this stage is to convince consumers of its benefits which will then persuade them to purchase Coca Cola.

5.2 Product

Coca Cola portrays their product on three levels:The actual product which is the parts and features, which deliver the core product. Consumers will purchase the Coca Cola because of the high standards and high quality of the Coca cola products. The augmented product is the extra consumer benefits provided to the consumers such as the fulfillment of higher level needs. (Fig 2)

BrandingCoca Cola utilizes the individual brand strategy whereby each individual product receives their own brand name e.g. Coca Cola. The popularity of a brand is often the deciding factor in terms of consumer purchasing. Thankfully Coca Cola has invested several million dollars into the development and promotion of their brand resulting in worldwide recognition. “Coca Cola” is the most recognized trademark, recognized by 94% of the world’s population and is the most widely recognized word after “OK.”

PositioningCoca Cola applies positioning to allow consumers to see what is unique about its products

8

in comparison to its competition. Its positioning is based on the process of positioning by direct comparison and have positioned their products as to be beneficial to their target market. An example of this is seen in the comparison of Coca Cola and Pepsi.

Image # 5 5

5.3 Price

The price of Coca Cola is one of the most important factors to consider when the consumer is purchasing.

Coca-Cola uses ‘penetration pricing’ (low price for product) to achieve high market shares and revenue maximization overseas. The company’s pricing decisions are dependent on trade tariffs, taxes and regulations. Due to the large market share, loyal customers and technological edge Coca Cola is currently considered to be the leader in pricing.

Coca-Cola’s pricing strategy relies upon international and domestic competition, brand recognition and penetration of the products etc. The costs of marketing products in developing countries have been kept low to achieve a high profit margin. Marketing products in developed countries are relatively important; therefore the pricing is kept higher than other regions but with same profit margin.

Coca Cola also adapts a type of psychological pricing whereby its ending figures are 98 instead of .00 which gives the consumers the perception that the product is cheaper.

5.4 Promotion

Coca Cola utilizes both above the line and below the line promotions.

Above the line

Television and Radio- Coca Cola uses this expressive form of advertising to persuade consumers that they are the # 1 drink through the use of repetition.

5 http://whosbetter.wordpress.com/2009/11/

9

Testimonials- Coca Cola uses this type of advertising to transfer feelings of the people existent in the commercial to the product. A very popular testimonial is the coke Santa that creates a positive image for Coca Cola therefore creating a competitive advantage.

Image 6 6

Glittering generalities- Coca Cola has used appealing words and slogans in their advertisements to make them seem more appealing. Coca cola aims for consumers to perceive them as selective exposure through slogans such as:-Open Happiness-Coca Cola makes good things taste better.-Enjoy Coca Cola

Sponsoring Sports- By targeting sports fans, Coca Cola is associating themselves with the particular sport thereby gaining recognition and increasing market share. The company has sponsored the Olympics, NBA, NASCAR, NCAA, FIFA world cup and English Football League.

Below the line

Green contest- Coca Cola has launched a green contest that is aimed at promoting environmental sustainability.

Coca Cola Wonder of the World Promotion- Allowed consumers to get the opportunity to win a dream vacation to destinations such as Paris, Hollywood, New York, Singapore and Cairo. The promotion sparked an interest within the public who avidly collected their Coca Cola caps.

All the promotional tactics of Coca cola aim to shape the culture of the population to think that drinking Coca Cola is the way of life.

5.5 Personality

6 http://www.instapunk.com/archives/InstaPunkArchiveV2.php3?a=682

10

Coca cola has created a brand personality that consumers align themselves using an ideal self concept. Coca Cola has done this through advertisements that emanate traits that consumers can relate to.

Coca Cola also uses Peripheral Route with celebrities such as Elvis Presley, Marilyn Monroe and various famous professional athletes. By doing this Coca Cola has translated the classic elements of Coca Cola into something new and engaging that speak to today’s style minded consumers.

Fig # 11 7

6.0 Purchase

Coca Cola has the ability to fulfill the pre purchase evaluation of any consumer due to its aggressive marketing mix strategies. The purchase step means that consumers have come to a decision of the brand i.e. Coca Cola, the retailer as well as the payment method.

6.1 Place and Distribution

Coca cola does not sell directly to its consumers therefore it utilizes an indirect distribution via intermediaries. In order for a consumer to purchase a Coca cola the following distribution channel is observed:

-The Coca Cola Company-Wholesalers/ Distributors-Retail/ Corner Store/ Vending Machine -Consumer

Some consumers may wonder why at almost every food place, gas station or convenience store you can find a Coca Cola. This is because Coca Cola utilizes an intensive distribution method whereby anywhere a consumer goes there is Coca Cola. This is a contributing factor towards Coca Cola’s popularity and it can lead consumers to perceive Coca Cola as being reliable.

7 http://themarketingdirectors.wordpress.com/

11

An example of this can be seen in past Coca Cola slogans 8 such as:-All Trails Lead To Ice-Cold Coca-Cola.- Wherever You Are, Whatever You Do, Wherever You May Be, When You Think Of Refreshment, Think Of Ice Cold Coca-Cola.- Along The Highway To Anywhere- Coke Follows Thirst Everywhere- Coca-Cola Goes Along- Dependable As Sunshine

6.2 Price and Lifestyle

Mobile Vending- due to innovations they have developed a cash free way of purchasing Coca Cola via SMS text message. This type of payment method appeals to on the go consumers who are part of the modern age whereby cash is a thing of the past.

7.0 Post Purchase Evaluation

This is an essential step in the decision making process for consumers because it decides whether product purchase has been a success or not. After purchasing a Coca Cola the consumer would experience either:1) Post Purchase Dissonance2) Post Purchases Consonance

Coca Cola has prided itself on having a high level of post purchase consonance. Evidence of this can be found via the mobile campaign of Coca Cola and Cha Cha Mobile that enables Coca cola to gain a deeper understanding of consumers by allowing them to text questions and their opinions. Coca Cola found that consumers who have had their complaints satisfactorily dealt with are more loyal than those who did not have an avenue to express their complaint.

Another important factor when consumers purchase Coca Cola is the level of purchase involvement.

Low Level of Purchase Involvementwhen consumers adapt a low purchase involvement with very limited post purchase evaluation they generally maintain a high level of repeat purchase. When consumers

8 http://www.angelfire.com/oh/cocacolaantiques/slogans.html

12

associate Coca Cola with a low level of purchase involvement it is known as a habitual product that consumers purchase every day.

Coca Cola’s has the ability to make consumers feel that they are experiencing an increase in marginal benefit against a constant marginal cost. This means that Coca Cola can give consumers so much satisfaction and enjoyment that they value it far above its price, therefore purchasing it without hesitation.

8.0 Conclusion

Coca Cola has earned its status in the minds of consumers by being a leader in the world of style and reflecting the tastes and preference of each generation. Coca Cola’s success as the leading manufacturer of the carbonated drink market emanates their understanding of the importance of the consumers psychological core as well as the consumer environment and how it affects the decision making process.

From the development of its original logo, to the re- engineering of its trademark shaped bottle to the launch of appealing and enticing marketing campaigns the Coca Cola Company has consistently sought to illustrate Coke as a hallmark of quality and style that seeks to remain ever present and relevant.

Coca Cola has portrayed its products as being modern and sophisticated that speaks the vocabulary of contemporary consumers as well as reflects the signature style that loyal older consumers have grown up with.

Coca Cola has truly understood the consumer not only how they think, but also their cultural as well as social aspects that influence their purchasing decision. This is clearly evident by coke being recognized as the most recognized and beloved brand in the world.

13

9.0 Bibliography and References

References

1) http://tutor2u.net/business/marketing/buying_decision_process.asp 2) http://askjason.blogspot.com/2008/06/question-what-is-maslows-hierarchy-of.html 3) http://sierrafath.wordpress.com/ 4) http://vi.sualize.us/view/fabiano/853685f33fa94489d1d38659507f42a2/ 5) http://whosbetter.wordpress.com/2009/11/ 6) http://www.instapunk.com/archives/InstaPunkArchiveV2.php3?a=682 7) http://themarketingdirectors.wordpress.com/ 8) http://www.angelfire.com/oh/cocacolaantiques/slogans.html

Bibliography

Websites

Company Profile- The Coca-Cola Company

Available from: www.datamonitor.com

Coca Cola

14

Available from: www.coca-cola.com/ourcompany/mission

15