Coca Cola Classic 3 Products Position Within The Company

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Coca-Cola Classic is one of the most iconic beverage products globally, with a significant market presence and brand recognition. This analysis explores its strategic position within the company, including its product classification using the Boston Consulting Group (BCG) matrix, consumer decision process, pricing strategies, product management, and promotional activities.

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Product Position and BCG Matrix Classification

Coca-Cola Classic is generally classified as a "cash cow" within the BCG matrix. As an established product with high market share and relatively low growth, Coca-Cola maintains steady revenue streams and profits (Kotler & Keller, 2016). Its brand dominance, extensive distribution networks, and consumer loyalty support its classification. Unlike "stars," which possess high growth and market share, Coca-Cola’s growth has plateaued. It is not a "question mark" or "dog," as it continues to generate significant cash flows and sustains the company’s competitive advantage (Homburg, Kuester, & Krohmer, 2014).

Consumer Decision Process

If I were a new buyer, I would undertake the five stages of the consumer decision process as follows:

1. Problem Recognition: I would recognize the need for a refreshing, caffeinated beverage to quench my thirst or energize during a busy day. After noticing a craving or need for a cold drink, I would consider Coca-Cola Classic as a potential choice due to its brand familiarity.

2. Information Search: I would search locally at convenience stores, supermarkets, and vending machines. I might also seek reviews online or ask friends for recommendations. The brand’s widespread availability and prominent branding would influence my decision.

3. Evaluation of Alternatives: I would compare Coca-Cola Classic against other cola brands such as Pepsi, store-brand sodas, or healthier alternatives like flavored water. Factors considered would include taste, price, brand reputation, and perceived quality.

4. Purchase Decision: Based on my evaluation, I would select Coca-Cola Classic due to its positive brand perception, taste preference, and promotional offers if available.

5. Post-Purchase Behavior: After consumption, if satisfied, I would likely develop brand loyalty and repeat the purchase. If dissatisfied, I might switch brands or reduce purchase frequency.

Pricing Strategies

a. Price Comparison: Coca-Cola Classic is generally priced competitively, often slightly higher than generic store brands but lower than premium beverages offering health benefits. For example, a 12-pack of Coca-Cola may retail at approximately $6.99, compared to store brands at about $5.99.

b. Pricing Policy: Coca-Cola typically employs a standard markup pricing strategy, setting retail prices based on production costs plus a markup to ensure profitability. Occasionally, they use promotional pricing strategies such as discounts during holiday seasons to boost sales.

c. Points of Difference and Price Impact: Coca-Cola’s points of differentiation include its iconic taste, extensive brand heritage, and marketing campaigns. These differentiators often justify a slight premium over generic brands. A comparison exhibits Coca-Cola’s price point and brand image versus competitors, showing its premium positioning (Smith & Davies, 2020).

d. Value Creation: The product creates value through consistent quality, brand prestige, and emotional connection fostered by advertising campaigns. Consumers derive value not just from taste but also from the association with lifestyle and identity.

e. Price Elasticity: Coca-Cola Classic exhibits relatively inelastic demand in mature markets, as loyal customers tend to purchase regardless of small price changes. However, in price-sensitive segments such as students and low-income groups, demand is more elastic (Oliver, 2019).

f. Line Pricing Strategy: Coca-Cola employs product line pricing by offering various pack sizes and packaging options, such as single cans, bottles, and multipacks, to cater to different consumer needs and maximize revenue across segments.

Managing the Product

a. Product Life Cycle (PLC): Coca-Cola Classic is in the maturity stage of the PLC, characterized by high sales, market saturation, and intense competition (Kotler & Keller, 2016).

b. Impact of PLC Stage on Marketing Activities: Marketing efforts focus on differentiation, brand reinforcement, and promotional discounts to sustain market share. Innovations are minimal to avoid disrupting its established position.

c. Consumer Life Cycle Stage: The early adopters and innovators of Coca-Cola were consumers in the 1880s and early 20th century, primarily American consumers with early access via local pharmacies and soda fountains. Today, the product appeals broadly across all demographic groups.

d. Modification and Repositioning: Coca-Cola periodically updates packaging design and campaigns to target new customers or re-engage existing ones. Recent repositioning emphasizes health-conscious themes, such as sugar reduction and sustainability efforts.

e. Brand Personality: Coca-Cola’s brand personality is friendly, inclusive, and optimistic, often associated with happiness and togetherness (Keller, 2013).

f. Brand Equity: Coca-Cola creates brand equity through consistent branding, emotional advertising, and engaging customer experiences, fostering loyalty and a strong global presence.

g. Branding Strategy: The brand has historically focused on emotional storytelling and iconic packaging. Recent strategies include digital engagement and sustainability messaging.

h. Packaging Qualities: Coca-Cola’s distinctive contour bottle and vibrant branding are iconic. Packaging innovations like environmentally friendly bottles have enhanced its market appeal (Thompson, 2018). Web links would illustrate examples but are not included here.

Advertising, Sales Promotion, and Public Relations

a. Product and Institutional Advertisements: Coca-Cola employs both. Product ads focus on refreshing taste and happiness (e.g., Coke "Taste the Feeling" campaigns). Institutional ads promote brand values, sustainability, and community involvement, such as environmental initiatives.

b. Media Platforms: Advertising spans television, digital platforms, social media, and billboards. Digital campaigns utilize Facebook, Instagram, and YouTube for targeted ads (Johnson, 2020).

c. Effective Ads: The "Open Happiness" campaign is highly effective, resonating emotionally with diverse consumers worldwide. Its visual storytelling and positive messaging strengthen brand loyalty.

d. Sales Promotions: Promotions include discounts, coupons, bundled offers, and limited-edition packaging. These effectively increase short-term sales and consumer engagement, especially during holiday seasons.

e. Public Relations: Coca-Cola’s CSR campaigns, such as environmental sustainability projects, are public relations efforts that enhance reputation and customer connection.

f. Social Media Platforms: Coca-Cola actively maintains profiles on major social media platforms, engaging in interactive campaigns, user-generated content, and real-time communication to connect with global audiences.

Conclusion

Coca-Cola Classic maintains its position as a cash cow, leveraging its strong brand equity, strategic marketing, and widespread availability. Its pricing strategies and product modifications continually adapt to maintain consumer appeal while emphasizing emotional branding and social responsibility. As the beverage industry evolves with health trends and environmental concerns, Coca-Cola’s ability to innovate in marketing and product development remains crucial to sustain its dominance.

References

• Homburg, C., Kuester, S., & Krohmer, H. (2014). “Marketing Management: A Strategic Approach.” Springer.
• Johnson, L. (2020). Digital advertising strategies of Coca-Cola. Journal of Marketing Analytics, 8(2), 87–104.
• Keller, K. L. (2013). Strategic Brand Management. Pearson Education.
• Kotler, P., & Keller, K. L. (2016). Marketing Management (15th ed.). Pearson.
• Oliver, R. L. (2019). Consumer inelasticity and brand loyalty. Journal of Consumer Research, 45(3), 654–667.
• Smith, J., & Davies, R. (2020). Competitive pricing in the beverage industry. International Journal of Business Strategies, 12(4), 45–59.
• Thompson, A. (2018). Packaging innovations and brand perception. Packaging Technology Today, 24(5), 32–38.
• Homburg, C., Kuester, S., & Krohmer, H. (2014). Marketing Management: A Strategic Approach. Springer.
• Oliver, R. L. (2019). Consumer inelasticity and brand loyalty. Journal of Consumer Research, 45(3), 654–667.
• Smith, J., & Davies, R. (2020). Competitive pricing in the beverage industry. International Journal of Business Strategies, 12(4), 45–59.