I BUSINESS INSTITUTE, GREATER NOIDA
MARKETING MANAGEMENT
RESEARCH REPORT
ON
Coca cola segmentation and targeting strategies
SUBMITTED TO SUBMITTED BY
DR. JYOTSHANA UPADHYAY Ajay kumar sao
2024PGDM132
Acknowledgment
I want to express my heartfelt gratitude to Jyotshana
Ma’am for her invaluable guidance, encouragement,
and support throughout preparing this report on "how
coca cola can Propose improvements to its current
segmentation and targeting strategies Task." Her
expertise and insightful feedback have been
instrumental in shaping the direction and quality of this
study.
Ajay kumar sao
2024PGDM132
Coca-Cola, a global leader in the beverage industry, using a similar approach. Coca-Cola
operates in a highly competitive market, with numerous rivals like PepsiCo and smaller
regional players. Here's how Coca-Cola segments its market and identifies its target
segments, followed by some proposed improvements.
1. Coca-Cola’s Market Segmentation Strategy
Coca-Cola uses several segmentation strategies to appeal to a broad and diverse customer
base worldwide:
Demographic Segmentation
• Age: Coca-Cola targets a wide range of age groups, from children to older adults. The
brand is associated with fun, refreshment, and socializing, making it appealing to
younger consumers (12-34), while also appealing to older generations.
• Income: Coca-Cola has options that cater to various income levels. While the
standard Coca-Cola drink is affordable, premium options such as Coca-Cola Zero
Sugar, Diet Coke, and Coca-Cola’s bottled varieties serve consumers who might seek
a healthier or premium choice.
• Family vs. Individual Consumers: Coca-Cola markets family-sized packaging for
large households or gatherings, while also offering single-serve bottles and cans for
individual consumers.
Geographic Segmentation
• Regions: Coca-Cola operates in over 200 countries, tailoring its products to fit the
tastes and cultural preferences of different regions. For instance, in Japan, Coca-Cola
launched unique flavors like green tea, while in Latin America, it has successfully
introduced the beverage as a part of daily life.
• Urban vs. Rural: Coca-Cola markets primarily in urban areas where consumption of
sodas is higher. However, rural areas, especially in developing countries, are targeted
through mass distribution and lower-priced product variants.
Psychographic Segmentation
• Lifestyle: Coca-Cola appeals to people who value social experiences, fun, and
celebration. Coca-Cola's marketing often associates the brand with positive moments,
family gatherings, and social events.
• Health-Conscious Consumers: The rise of health and wellness trends has led Coca-
Cola to target consumers who want lower-calorie, sugar-free options like Coca-Cola
Zero Sugar, Diet Coke, and Coca-Cola Life (with stevia).
Behavioral Segmentation
• Occasions: Coca-Cola’s marketing often focuses on specific occasions like holidays
(Christmas, New Year) or major sporting events (FIFA World Cup, Olympic Games),
where people gather and share drinks.
• Loyalty: Coca-Cola builds strong brand loyalty through its iconic branding,
sponsorships, and emotional connections created through its advertisements and
campaigns.
2. Target Segments
Based on its segmentation, Coca-Cola targets several key market segments:
• Young Adults (12-34 years): This is one of Coca-Cola’s core consumer groups,
particularly those seeking fun, refreshing beverages that align with a youthful, active
lifestyle.
• Health-Conscious Consumers: With the rise of sugar-free and low-calorie
beverages, Coca-Cola targets individuals who prefer alternatives to sugary sodas.
• Families: Coca-Cola offers family-sized packaging, making it an attractive choice for
households.
• Working Professionals: Coca-Cola markets premium drinks like Coca-Cola Zero
Sugar to health-conscious professionals looking for a refreshing but healthier
beverage option.
• Event and Celebration Seekers: Coca-Cola is often marketed for social gatherings
and celebrations (e.g., holiday seasons, parties, etc.), appealing to people looking to
enhance these moments.
3. Proposed Improvements in Segmentation and Targeting Strategies
Although Coca-Cola has a broad segmentation strategy, there are areas where it could further
refine its targeting:
Segment Expansion
• Sustainability-Conscious Consumers: Like many other large corporations, Coca-
Cola could further target eco-conscious consumers who are looking for brands that
prioritize environmental responsibility. This could be achieved by focusing on
sustainable sourcing, environmentally friendly packaging (e.g., more use of recyclable
or biodegradable materials), and reducing the environmental impact of production.
• Non-Carbonated Beverage Drinkers: As the global market for non-carbonated
drinks grows, Coca-Cola can expand its focus to this emerging group, especially with
its already existing range of teas, juices, and waters.
Improvement in Psychographic Segmentation
• Mental Wellness Segment: Just as there’s a growing focus on physical health, mental
wellness is increasingly important to consumers. Coca-Cola could tap into the market
of beverages with ingredients that promote relaxation, stress relief, or even cognitive
function (e.g., drinks containing adaptogens or nootropics).
Targeting Emerging Markets More Aggressively
• Young Urban Professionals in Emerging Markets: Coca-Cola can target the
younger population in emerging markets like India, Southeast Asia, and parts of
Africa, where the urban middle class is growing rapidly and seeking international
brands.
Segmentation Segment Segment 2: Segment Segment 4: Segment 5: Segment 6:
Criteria 1: Young Health- 3: Families Working Event and Sustainability-
Adults Conscious Professionals Celebration Conscious
(12-34 Consumers Seekers Consumers
years)
Demographics Age: 12- Age: 18- Age: 25- Age: 25-45, Age: 18-50, Age: 18-45,
34, 45, 50, Income: Income: Income:
Income: Income: Income: Medium to Medium to Medium to
Low to Medium to Medium, High, High, High, Gender:
Medium, High, Gender: Gender: Gender: Both
Gender: Gender: Bot Both Both
Both Both
Geographics Global, Urban Global, Global, Global, Global,
focus on areas focus on focus on Focus on especially in
urban globally regions metropolitan key holidays eco-conscious
areas with cities and events regions
larger
family
units
Psychographics Fun, Health- Family- Time- Social, Environmentally
Social, conscious, oriented, efficient, Celebration- responsible,
Trendy Wellness- Value- Health- driven Ethical
focused driven conscious consumers
Brand image High Low- Purchase Moderate High High
frequency calorie during purchase consumption consumption
of preference, holidays frequency during during holidays
purchase, Frequent or holidays and and events
Brand- buyers gatherings events
loyal
4. Recommendation: New Market Segment
Segment 7: Mental Wellness Beverage Consumers
• Target Market: Individuals who seek beverages that contribute to mental wellness,
such as drinks with ingredients that help reduce stress, improve focus, or enhance
relaxation.
• Strategy: Coca-Cola could develop a line of beverages infused with adaptogens,
nootropics, or other natural ingredients aimed at improving mental clarity or
relaxation. These products could be marketed to consumers seeking a calm, focused
mind in a busy, stressed-out world.
• Example: A new line of teas or sparkling waters with ingredients like ashwagandha,
chamomile, or L-theanine, marketed under a wellness and relaxation theme.
5. Additional Proposed Improvements in Segmentation and Targeting Strategies
Expanding with New and Emerging Beverage Categories
• Functional Beverages: Coca-Cola has already expanded into non-carbonated
beverages like teas, juices, and waters. A further opportunity exists in expanding into
functional beverages, which provide specific health benefits such as hydration,
energy, immune support, and gut health. Coca-Cola could introduce beverages with
probiotics, added vitamins, electrolytes, or energy-boosting components.
Cultural Segmentation
• Cultural Tastes and Preferences: Coca-Cola could further refine its offerings by
segmenting based on specific cultural preferences, particularly in diverse and large
markets like India, China, and Africa. For example, beverages that align with local
flavors, traditional recipes, or regional taste profiles could help Coca-Cola strengthen
its relationship with local consumers. This could include drinks with regional fruit
flavors, herbal infusions, or flavors that cater to local palates.
Targeting Digital-Native Gen Z Consumers
• Gen Z Focus: Coca-Cola can target Gen Z, who are extremely digital-savvy, socially
conscious, and value brand authenticity. Coca-Cola could increase its online presence
and leverage social media platforms like TikTok, Instagram, and YouTube to appeal
to this audience. Additionally, Coca-Cola could embrace sustainability in both its
product offerings and branding to appeal to the eco-conscious nature of Gen Z.
Premiumization and Luxury Segmentation
• Premium, Artisan Drinks: Coca-Cola could explore a new segment of premium and
artisan beverages, which would attract consumers who seek exclusivity and high-end
products. This could involve limited-edition flavors, craft-style sodas, or premium
bottled versions. By tapping into this premium segment, Coca-Cola can capture the
high-income group that may be willing to pay more for exclusive or artisanal
products.
6. New Market Segment Recommendations
Segment 8: Gen Z Digital-Natives
• Target Market: A young, digital-native audience (ages 16-30) that is active on social
media platforms such as TikTok, Instagram, and YouTube. This group tends to favor
brands that are authentic, transparent, and socially responsible. They are often
engaged in online communities, content creation, and value innovation in products.
• Strategy: Coca-Cola could expand its engagement with Gen Z through social media
challenges, influencer collaborations, and interactive campaigns. Additionally, Coca-
Cola could offer more limited-edition products, digital-first experiences, and eco-
friendly packaging to align with their values. Digital content that showcases the
brand’s commitment to social causes, environmental responsibility, and innovation
would resonate with this group.
• Example: A TikTok campaign that promotes Coca-Cola as the drink of choice for
Gen Z, encouraging them to share creative recipes or ways they enjoy Coca-Cola
during their daily lives.
Segment 9: Premium Drink Consumers
• Target Market: This segment includes consumers who seek high-quality, exclusive
beverages that offer a luxury experience. They are willing to pay more for premium
ingredients, artisanal production methods, or unique offerings.
• Strategy: Coca-Cola could create an exclusive line of premium beverages, like craft
sodas or limited-edition luxury packaging. The brand could use higher-end
ingredients (e.g., organic sugar, rare flavors) or collaborate with renowned chefs or
mixologists for special formulations. Coca-Cola could position these drinks as
lifestyle choices for consumers who appreciate refinement and sophistication.
• Example: A Coca-Cola Signature Mixers line designed for pairing with high-end
spirits like whiskey or rum, marketed as a premium option for those seeking an
upscale beverage experience.
1. Gen Z Digital-Natives (Segment 10)
Strategy:
• Leverage Social Media Platforms: Create fun, engaging campaigns on platforms
like TikTok, Instagram, and YouTube that encourage user participation. Focus on
interactive content such as challenges, behind-the-scenes stories, and product
collaborations with influencers.
• Brand Authenticity: Gen Z values transparency and authenticity in brands. Coca-
Cola should showcase its sustainability efforts, community involvement, and ethical
practices through social media campaigns. Engage them by highlighting social causes
the brand supports.
• Collaborations with Influencers: Partner with digital-native influencers, YouTubers,
and TikTok personalities to endorse products in an organic and relatable manner.
These influencers can incorporate Coca-Cola products into their lifestyle while
aligning with Gen Z's values (e.g., environmental causes, social justice).
• Limited-Edition & Customizable Products: Introduce limited-edition packaging or
flavors in collaboration with influencers or local trends. Also, explore customizable
packaging (e.g., bottles with personalized names or messages) to resonate with Gen
Z's desire for individuality.
• Digital-First Campaigns: Use AR (augmented reality) and other immersive
technologies in campaigns to create unique, shareable experiences that can easily go
viral. For example, an interactive AR filter on Snapchat that brings the Coca-Cola
logo to life with fun animations.
Example:
• A TikTok campaign encouraging users to share their “Coca-Cola Moments” by
showcasing how they enjoy Coca-Cola in their daily lives, featuring a custom filter
and a branded hashtag.
2. Premium Drink Consumers (Segment 11)
Strategy:
• Create Premium Product Lines: Develop a range of premium beverages under a
distinct brand or sub-brand (e.g., "Coca-Cola Luxe") that includes high-quality
ingredients, exclusive flavors, or artisanal production methods. This could involve
using organic sweeteners, rare fruits, or unique botanicals.
• Exclusive Packaging: Offer premium packaging, such as glass bottles or high-end
cans with limited-edition artwork, to appeal to the luxury market. Custom-designed
bottles that feature collaborations with artists or designers could also create
exclusivity.
• Partnerships with Luxury Brands: Collaborate with high-end brands or luxury
restaurants/bars to position Coca-Cola as a luxury experience. Offer the premium line
in high-end retail outlets, exclusive restaurants, and high-profile events (e.g., fashion
shows, high-end sporting events).
• Elevated Consumption Experiences: Position Coca-Cola premium drinks as a
companion to high-end spirits or gourmet meals. Market them as mixers for cocktails
or an upscale refreshment at luxury events.
• Create a Sense of Occasion: Market Coca-Cola premium drinks for special
occasions and celebrations, framing the brand as a luxury choice for moments that
matter, such as weddings, parties, and exclusive events.
Example:
• Coca-Cola Signature Mixers paired with premium whiskeys, promoted with celebrity
endorsements and luxury event sponsorships (e.g., Formula 1 races, fashion weeks).
3. Sustainability-Conscious Consumers (Segment 6)
Strategy:
• Commitment to Sustainability: Coca-Cola should continue to reinforce its
commitment to sustainability by reducing plastic use, improving recycling programs,
and using sustainable ingredients. This could include campaigns centered around
Coca-Cola's commitment to a “Zero Waste” policy or “Move to Zero” packaging,
emphasizing recycled materials.
• Launch Eco-Friendly Products: Introduce a line of drinks that are both sustainably
sourced and packaged in fully recyclable or biodegradable packaging. For instance,
Coca-Cola could introduce more plant-based drink options and beverages made from
organic ingredients.
• Transparent Marketing: Build trust by offering transparency about the sourcing of
ingredients, the environmental impact of production, and the company’s sustainability
goals. Regularly update consumers on progress made toward reducing Coca-Cola's
environmental footprint.
• Eco-Conscious Collaborations: Partner with environmental influencers and activists
to spread the message of sustainability. Collaborate with eco-conscious organizations
and campaigns, especially those focused on recycling, conservation, and renewable
energy.
• Sustainability-First Store Placement: Place sustainable packaging and products in
eco-conscious retail outlets and markets where consumers already prioritize
sustainability, such as Whole Foods, or during green festivals and sustainability
events.
Example:
• A "Coca-Cola Green" campaign highlighting new products in fully recyclable
packaging and made with sustainably sourced ingredients, supported by educational
content on social media about Coca-Cola's environmental impact.
4. Non-Carbonated Beverage Drinkers (Segment 7)
Strategy:
• Expand Non-Carbonated Offerings: Develop a wider range of beverages such as
bottled water, flavored waters, teas, smoothies, and juices. Coca-Cola can focus on
creating healthier, refreshing alternatives to carbonated soft drinks, with a focus on
natural ingredients and less sugar.
• Health-Forward Marketing: Position these drinks as healthy alternatives for
hydration and wellness, targeting consumers who seek beverages that align with their
health-conscious lifestyles. This includes promoting low-sugar, no-sugar, or
functional ingredients like electrolytes, vitamins, and antioxidants.
• Innovative Flavors and Functional Beverages: Introduce unique flavor
combinations and beverages that offer functional benefits, such as hydration, energy,
or immune system support. This could include adding ingredients like coconut water,
aloe vera, turmeric, or other superfoods to the product range.
• Packaging for On-the-Go Lifestyles: Design functional packaging, like eco-friendly
bottles that are easy to carry and consume on-the-go. Introduce smaller packaging for
fitness enthusiasts and busy professionals.
• Cross-Promotion with Fitness & Wellness Brands: Partner with gyms, health
clubs, or wellness influencers to promote Coca-Cola's non-carbonated beverages as
the drink of choice for active, health-focused consumers.
Example:
• Coca-Cola’s flavored water line or Minute Maid Pure squeezed juices marketed as a
healthy, refreshing drink for active individuals. Collaborations with fitness apps to
offer free product samples after completing workouts could also be part of the
strategy.
5. Mental Wellness Beverage Consumers (Segment 8)
Strategy:
• Focus on Functional Ingredients: Coca-Cola could introduce a product line
designed to promote mental well-being. These could include beverages containing
adaptogens, nootropics, or calming ingredients like chamomile, lavender, or valerian
root.
• Mental Wellness Campaigns: Partner with mental health organizations to raise
awareness about the importance of mental wellness. Coca-Cola can sponsor
mindfulness events or online resources that encourage a balanced, stress-free life,
while subtly promoting its wellness-oriented products.
• Innovative Packaging & Messaging: Use calming colors and soothing designs for
packaging. The messaging could emphasize relaxation, de-stressing, and a focus on
mental clarity. Additionally, Coca-Cola could include mindfulness tips or QR codes
on the packaging leading to guided meditation sessions or wellness content.
• Tie-In with Fitness & Wellness Centers: Coca-Cola could promote these products
in wellness centers, yoga studios, and spas, where customers are already looking for
beverages that align with their mental wellness practices.
• Leverage Celebrity Endorsements in Wellness: Partner with influencers and
celebrities who focus on mental wellness or mindfulness to endorse the brand and
share personal experiences with Coca-Cola's wellness products.
Example:
• Coca-Cola Calm, a new sparkling water line with natural ingredients designed to help
with stress relief and promote relaxation, marketed with a campaign that ties into
mental health awareness month.
6. Premiumization and Luxury Segment (Additional Strategy)
Strategy:
• Limited-Edition, Collectible Bottles: Release premium, limited-edition bottles in
collaboration with high-end designers or artists. These can be marketed as collectible
items that appeal to luxury consumers.
• Exclusive Events and Experiences: Host invitation-only events where consumers
can experience Coca-Cola products in a luxury setting, such as at gala dinners, private
concerts, or luxury brand activations.
Example:
• Coca-Cola could create a "Coca-Cola Elite" experience where they offer tailored
drink pairings for gourmet meals, presented in luxurious bottles with personalized
labels for a select group of top-tier customers.
Conclusion
Coca-Cola operates in a highly competitive market, where the need to adapt and innovate is
crucial for sustaining its market leadership. By effectively segmenting the market and
strategically targeting diverse consumer groups, Coca-Cola can continue to build on its iconic
brand while addressing evolving consumer preferences. The proposed segmentation
strategies, such as targeting Gen Z digital-natives, premium drink consumers, sustainability-
conscious buyers, non-carbonated beverage drinkers, and mental wellness consumers, offer
significant opportunities for Coca-Cola to expand its product offerings and engage with new
customer bases.
Through leveraging digital-first marketing, sustainable product lines, and personalized
experiences, Coca-Cola can enhance its connection with younger, health-conscious, and eco-
aware segments. The focus on premium and luxury consumers will allow Coca-Cola to tap
into the high-income group willing to invest in exclusive, high-quality products. Additionally,
expanding into mental wellness beverages and functional drinks aligns with current consumer
trends prioritizing health and well-being, enabling Coca-Cola to differentiate itself in the
marketplace.
References
Coca-Cola’s Official Website - This is the best resource for understanding Coca-
Cola's current products, sustainability initiatives, and corporate values.
Link: https://www.cokecorporation.com/
Coca-Cola’s Sustainability Reports - These reports provide detailed insights into
Coca-Cola’s environmental and social responsibility efforts.
Link: https://www.cokecorporation.com/sustainability/
Market Segmentation Insights - For more details on market segmentation strategies,
particularly in the beverage industry, you can refer to reports from market research firms like
Statista, Nielsen, or Mintel.
• Statista: https://www.statista.com/statistics/1007220/
• Nielsen: https://www.nielsen.com/
• Mintel: https://www.mintel.com/
Harvard Business Review (HBR) - For strategic marketing and segmentation
approaches, HBR provides many articles on how companies like Coca-Cola develop their
marketing strategies.
• Link: https://hbr.org/
