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Introduction
The marketing plan created for the Coca-Cola Company will focus on building customer
loyalty of Hispanic and Black American teenagers (aged 12-20) in North America. The
goal is to increase the sales of carbonated soft drinks (such as, Regular Coke, Diet Coke
and Coke Zero) from this demographic segment. The basic marketing model, STP
(segmentation, targeting, positioning), will be used to analyze the carbonated soft drinks
(CSDs) industry and current marketing performance of the Coca-Cola Company, and to
support why Hispanic and Black American teenagers are the target of interest. The STP
model is a three-stage process that examines segmenting, targeting, and positioning
strategies used by an industry or a specific company (Fripp, 2012).
Marketing segmentation involves grouping customers by a certain specified criteria, which
is often determined by similar customer behaviors. This segmentation assists marketers in
determining competitive strategy (American Marketing Association, 2011). To understand
Coca Cola’s use of segmentation, the beverage industry should be viewed as a whole (see
Figure 1). Coca-Cola is a big giant in the nonalcoholic beverage segmentation, which has
approximately 500 brands in all of the sub segmentations, including Regular Coke and
Diet Coke within the carbonated soft drinks segmentation, Minute Maid within the fruit
beverages subgroup, and Dasani in the bottled water subgroup.
Figure 1: Segmentation of the Beverage Industry (Williams & Goldsworthy, 2012)
In North American households, carbonated soft drinks (CSDs) are the most consumed type
of soft drink, with 85% of all respondents in a representative survey of American
households indicating that they drink some type of CSD (Zmuda, 2009). Within this
specific marketing plan, Regular Coke, Diet Coke and Coke Zero have been chosen as
target products.
Under each product class, there are various customer segments, which are most popularly
analyzed through the demographic analysis approach. Demographic segmentation referring
to age, gender, and race is commonly used across the industry for marketing purposes
(Williams & Goldworthy, 2012). In conjunction with Coca-Cola’s Responsible Marketing
Policy, we will not advertise directly to children aged 12 and younger. Below is an
age-based segmentation that can be broken into three categories:
• Youth Ages 12 -19 (Goal: build brand loyalty early)
• Youth adults ages 20 - 24 (Goal: continue to build brand loyalty)
• Adults ages 25 - 35 (Goal: focus mainly on diet products) (Williams & Goldworthy,
2012).
The youth segment is a main target through many different marketing approaches, such as
promotion, web-based advertising, and sponsorship. From the age-based segmentation, the
youth segment is also critical for Coca-Cola’s advertising to build brand loyalty. If
teenagers can be nurtured from youth to youth adulthood, there is little need to spend
billions of dollars to continue advertising to them, as the group should be loyal to the
brand once having reached adulthood.
The next aspect of the STP model, targeting, refers to the process of focusing on a
particular segment of a total population, in which the marketer utilizes expertise to satisfy
that submarket and accomplish its goals and objectives (American Marketing Association,
2011). Using this model, the reason why the Black and Hispanic Americans are the best
targets for the CSDs of the Coca-Cola Company is explored.
According to Mintel (2010), teens and young adults are the primary targets for CSD
marketing, as there is a strong demand for CSDs within this segment, as well as within
households with children and those with incomes below $50,000 a year. While CSDs are
the main product segment of Coca-Cola, it has been noted that overall consumption has
declined due an increase in overall health awareness. Therefore, many nonalcoholic
marketers are looking for alternative and smaller sub segments of the market to target in
order to increase sales. The Hispanic teen is one such sub segment that Mintel identifies as
a significant opportunity for CSD manufacturers, because approximately 11% of teens in
the United States are Hispanic (compared with White teenagers, who only account for 8%
of the total teen population). In addition, this Hispanic teen sub segment is growing
rapidly, which creates significant opportunities for Coca-Cola to target Hispanic teens with
advertisements that may contain imagery of Hispanic culture (Mintel, 2010). The date set
seen in Figure 2 also displays a number of notable consumption trends among racial and
ethnic groups. Both African-American and Hispanic consumers are more likely to drink
CSDs than other groups.
Figure 2 Adult Nonalcoholic Beverages by Subcategory and Race/Ethnicity (Williams &
Goldsworthy, 2012)
Lastly, positioning is referred to as the customer’s perceptions of the place a product or
brand occupies within a market segment. In some markets, a position is achieved by
associating the benefits of a brand with the needs or lifestyle of the segments. Positioning
often involves the differentiation of the company’s offering from the competition by
implying a comparison in terms of specific features (American Marketing Association,
2011). For Coca-Cola, the positioning process is to create a value image for the Black and
Hispanic segment markets that will lead to an explicit meaning place in their mind,
therefore setting up a competitive advantage.
The marketing strategy and plan that will be provided to Coca-Cola surrounds assistance
for Hispanic and Black immigrants fighting poverty, with hopes to improve their children’s
education. Through the Coca-Cola Scholars Foundation and Sustainability Plan,
Coca-Cola could enhance its responsible and happiness corporation image in North
American customers’ minds, and nurture life long loyalty customers in Hispanic and Black
customers segment, which are dominant contributors for the enhancement of CSDs in the
future.
As marketing research is crucial to the creation of a marketing plan, customer satisfaction
