Market Segmentation on Sales performance of Soft Drink Industry

 

Establishment of effective segmentation:

Determining the segmentation you need to be more effective because proper analysis of market segmentation will provide you success to analysis the customer.

There is some factor of determining effective market segmentation:

Measurable: Measurable of product is depends on your market segmentation it is necessary to measure the sale of product on the basis of segmentation. It is important to analysis the purchasing power of consumer because without analyzing consumer purchasing power and buying habits you cannot measure segmentation.

Accessible: Accessible is most important things in today’s world because understanding the consumer mindset is not only important reaching to the consumer doorstep is also important for that technology is playing vital role. Like you can reach to the customer by radio, television, and internet these are the most effective way to reach to the doorstep of customer such as mobile ad promotion of ads on mobile is most effective way of communication.

                                             

Substantial: It is necessary to be substantial because you have to keep the interest of customer suppose you have high level of retail store for your product but it is necessary to have product according to purchasing capacity of consumer such as your product is to be in such manner so that consumer can afford the product. If you are holding luxuries product it is hard for every customer to afford but when you are holding products on the basis of customer level standard it is easy to interact with customer and you can sold product on the basis of market segmentation.

 

Actionable: actionable refers when market is open to get free response it means when your segmentation is open to take response from market. You can say segmentation is different from other same as some person like soft drink on the basis of taste and some person like soft drink on the basis of brand both are different segmentation of market and some segmentation is depends on the buying habit of the customer it is your responsibility to group all homogeneous product in one chain.

Market is not theoretical science it is practical experience where you will get different ideas when you enter in the depth of market. Market action is totally different from other segmentation activity you will get results of your segmentation.

Soft drink industry is highly consumed product in all FMCG market mainly carbonated drink are preferred more over other drinks carbonate drinks are mainly used in party, picnics and welcome guest in the special occasions. Some of the soft drinks companies are the major giant of induatries such as Pepsi and Coca- cola. Coca – Cola was started in 1887 and forced to close their business India due to government issues in 1970s but coca- cola again entered in Indian market in 1989 whereas Pepsi entered in India market in 1998. Coca – cola want to create its place in Indian market it has takeover Thums-up, Limca in 175 crores.

Coca-Cola keeps on expanding their products same as with Pepsi they start using strategy and target consumer on the basis of segmentation and start attracting consumer mindset by advertisement of their product. Such as celebrity endorsement like film star, cricketers and other high profile celebrities endorsed their products.

In year 2003 both Pepsi ad Coca – Cola were in controversy. These both drink in 2003 were accused for using pesticide in their products which was extremely harmful for health of people for few time period they were start losing their trust in the market but they successful come back in market and recovered from the controversy but they have face huge loss such as they have slash the market price like all time low price 200m bottle for RS. 5 and 300ml for RS. 15.

Coca – cola and Pepsi were competitors of each other from long time ago the war of cola and Pepsi is like never going to end.

 

Brand Positioning of Pepsi:

·         Pepsi always target young generation as their customer.

·         Many of their customers are teenagers and youth.

·         Pepsi always tried to acquire their customer with fun, music, sport.

·         Pepsi focused generally customer between 16- 45 age and focus on their attitude.

There are few brand mantra of Pepsi

·         Young                                                    

·         Celebrity

·         Fresh 

·         Sport        

                                                   

Segmentation of consumer market by Pepsi:

 

Brand positioning of Coca - Cola

The market strategy of coca –cola is to place their brand every corner of world and coca – cola is world most leading soft drink company it has reached almost 200 countries in the world and the most interesting thing is that you will get same taste of coca – cola in every corner of world. The principal of coca – cola is “Think global, act local”.

The coca – cola have come up with different brand and different products such as:

Aquapure                                                    Diet Mello Yello

Bacardi Mixer                                            Diet NESTEA

Citra                                                            Dr. Pepper

Coca-Cola                                                    Fuze

Diet Barq’s                                                   Red Flash

Aquarius                                                        Minute Maid  

 Coca-Cola was invented by JOHN PEMBERTON who was pharmacist and it was invented 1886. It was launched by John Pharmacy for five cent. In first launched of Coca-Cola john pharmacy could sold only 9 glass of drink per day. In today’s scenario Coca-Cola is world’s largest market of soft drink it is now offers almost 500 brands and regulate in 200 countries.

Importance of the study

 This study is important to identify market segmentation is important for increasing sale of soft drink industry. Unfortunately those companies who are not able to identify consumer segmentation for their product they are not able to achieve the potential growth of their product. 

·         It is important to know how market segmentation helps in increasing sales performance of the soft drink industry.

·         It is important to know how it helps in acquiring new customer and retain your existing customer.

·         Decisions related to price of soft drink is depends on market segmentation on customer.

·         The significant impact of this study is how market segmentation affects the sales performance of soft drink industry and sales performance definitely going to affect the turnover of company.

 

 

 Need of the study

The main objective of the study is consumer segmentation in soft drink industry.

·         Provide proper navigation so that industry can develop proper segmentation strategy.

·         Identify relationship between consumer market segmentation and sales performance of soft drink.

·         It is important to know consumer needs and want because that differs, so study of market segmentation is necessary.

·         This study needed to know how market segmentation affects the sale of soft drink because every customer has different income and this affect in sale of soft drink.

·         The study needs to know how market segmentation helps industry create new market opportunity such as developing new consumer segmentation for their product.

 

Review of Literature and research design

 

Segmentation of Market

Market segmentation or you cans say consumer segmentation is the basic principle of modern marketing, it has deep set example that pays particular attention to particular consumer needs and want. In particular market consumer are divided in to different segmentation same is with soft drink industry. Consumer are based on different market segmentation and market size of product is wide whereas some customer are based on heterogeneous and some are homogenous nature all these are depends on nature, need and demand of customer,

 (According to Haley): The market segmentation of customer divides them into different groups and this helps to create close relationship with customer the specific need of customer makes them different from other customer.

 (Boley and Nickerson): The division of market segmentation is into different sub division that allows customer to divide into different segmentation basically every customer has different need, want, demand and preference that makes customer meaningful. However the segmentation helps companies to plan their strategy according to that so that can lead in market.

Market segmentation divides customer into different segmentation. It is necessary to group the customer with similar need, want, and desire into one group. It is important to create group of customer with need and want and same time to create heavy and healthy competition in market. Market segmentation helps to achieve the new heights for your product in market and it also help to identify new opportunity for the product and it provide deep insight to create effective and efficient planning for the customer. The division of buyers is on bases of their homogenous and heterogeneous in nature, the nature helps to identify the how close you are with customer.

The companies different issues in market, however some companies decide to deal with particular market and some companies decide to deal with some important segmentation. Companies deal with some basic stances which are as follows: (Ph. Kotler in 2013).

 

 

1.      Complete market size:

 There are few companies that choose whole market as its market size. These type of companies basically choose mix marketing strategy for their customer because in this market customer need and want is similar to each other, the group of customer are branch and it is easy to serve the market. When company uses marketing mix strategy it is easy and effective for production of product. When taste, need and preference are same for all customers then it is easy to keep same price and same type of product for all customers which are also cost effective. When Coca-Cola came into market it also use same strategy (marketing Mix) and it produce identical product for every customer. The reason behind this strategy is to lower the cost of the product and giving same type of product to every customer.

The fact behind this strategy finally changed as later on companies found that choice of particular customer or you can say the taste of two customers is never same. This fact has changed the marketing strategy of companies now they know that need, want, desired and demand of every customer is different from other customer so it is necessary to define product according their need. This is the parameter where market segmentation of consumer came in to existence.

 

2.      The differentiation of the product:

The product differentiation is the strategy of companies to attract customer. The differentiation of product gives customer choice to choose the product. The differentiation of shows that two customer never has same choice now companies understand the  customer need and want of the customer there are different price, size, type, shape and quantity of product available in the market all the product in the market are based on customer needs. There are few variation in the product on the base of taste such as in soft drink industry there is non- alcoholic drinks, flavored drinks, juice etc. all these drinks are based on demand of the customer.

 

 

 

3.      Targeting customer marketing:

When earlier two strategies is not successful then target customer marketing is another strategy to satisfy the customer need target marketing. In target marketing companies focus on specific customer they choose age group and gender and other specific feature to target customer. Choose target customer will help companies to focus on their product and production of their product according to need of targeted customers that also reduce time and cost effective.

Coca-Cola prove the example of target marketing it different target market for different each customer it has diet drinks for diabetes customer and carbonate drink, flavored drinks and other drink according to customer needs.

It is important to know your customer it can be done by all the above strategy and generally I market segmentation of customer they divide customer into small group or separate the common customer in one group this helps companies to know the customer and their needs.

 

Soft Drink Industry:

Soft Drink is one of fastest consuming product in FMCG sector. It has different variety such as natural flavored drinks, carbonate Drinks, energy drinks etc. The soft drink is basically represented as refreshment of soft drinks; there are several drinks which is basically famous for refreshment of customer.

The supply chain plays important role in soft drink industry because supply chain mostly depends on producer of soft drinks; the delivery of drinks from producer to retailer is most important thing such as it helps in final consumption.

India is world’s largest consumption of soft drink country almost more than 7 billion bottles in a year. There are two major giant in the field of soft drink industry such as Coca-Cola and Pepsi. These both companies have captured more 90% of the carbonate drink and flavored drinks. Pepsi came into existence after 2 of Coca-Cola. These two companies are major giant of soft drink industry and earn crores of income from consumer by selling their drinks. These two companies are two competitors of each other from years they have different strategy for their products. The wars between two companies have been begun, both the companies have design different product and strategies and packaging for the consumer.  

Statement of the Problem

Soft drink is huge market where is competition is extremely high and in current scenario soft drink became global market, so the problem is that whether market segmentation of consumer affects the sales of soft drink industry.

 Market segmentation in soft drink industry is required or not and if required then what are its positive and negative affect on the sale of soft drink industry.

 

 

Scope of the study

The study is conducted to know the effect of market segmentation on sales performance of soft drink industry and same as the study is conducted to analysis how consumer segmentation is done in soft drink industry. The consumer segmentation shows that how companies have divided their customer in different group such as on the basis of taste, flavored, preference, and brand selection.

 

Objective of the study

There are following objective of the study:

·         To know how market segmentation is important in sale of soft drink industry.

·         To know the effect of demographic, psychographic, geographical and behavioral segmentation on consumer mindset and habits of purchasing the products.

·         To know socio economic profile of customer towards soft drink mainly Coca-Cola and Pepsi.

·         To know the different strategies used by soft drink industries to acquire customer such as Coca-Cola and Pepsi.

 

 

Hypothesis:

Hypothesis is assumption that is generally used to test the outcome of the study. In hypothesis two variables are measured or relationship between two variables measured. In research you will generally found that the variable measures in two type Null hypothesis and Alternative hypothesis.

 

Formulation of Hypothesis

Null Hypothesis: There is no significant relationship between consumer market segmentation and sales performance of soft drink.

Alternative Hypothesis: There is significant relationship between consumer market segmentation and sales performance of soft drink.

 

Sampling:

A sample is part of the population that is taken from population. The size of population is always higher than sample in research, population is never taken for research always sample is used for research it can be for anything such as events, object, industry etc.

Population vs. sample

Population: Effect of consumer market segmentation on sales performance of soft drink industry.

Sample: 56 respondents on analysis of consumer segmentation on sales performance of soft drink industry.

 

Data collection:

In this research data is collected in systematic and appropriate way it is based on online survey, previous study and online analysis. The data is also based on first hand data which is fresh data and some are secondary data.

 

Type of data collection:

Qualitative data: The study also based on qualitative data analysis which is based on interpretation and analysis on charter and categories.

Quantitative data: The studies also consider graphs, charts, number and numeric table analysis which are form of quantitative analysis.

Method of data collection:

There are two methods of data collection primary and secondary methods.

Primary method of data collection: The study consist of primary method of data analysis that is questionnaire method that helps in getting respond on based of question asked in questionnaire. This also represents first hand data.

Secondary data analysis: secondary data analysis based on qualitative and quantitative analysis that is consist of second hand data such as charts, table and other qualitative analysis.

 

Data analysis:

Data collected and analysis means all the collected data will interpreted and analysis their result such as interpretation of questionnaire analysis data. The also some other analysis such as Chi- square analysis is one method of analysis.

 

Limitation of the study

·         The study is limited to certain constraints such as it is restricted to effect of market segmentation on sales performance of soft drink industry.

·         The study is based on particular sample, size, and nature.

·         Soft drink market is extremely large it is hard to study every factor in the report.

 Profile of the selected organization

 

In the soft drink industry production, distribution, marketing strategy and supply of carbonate, flavored, mineral water and sweet drinks all the soft drinks. The history of marketing has proved that innovation in business such as marketing strategy, product building, images of the product, franchising, production and identifies the taste and preference of consumer.

It has been believed that mineral water and flavored drink used as health drink. Their also carbonate drink in soft drink industry. This soft drink has been represented as refreshing, energy, sweet drinks.

There are market leader of soft drink market

Coca-Cola

PepsiCo

Industry profile of Coca-Cola

The Coca-Cola Company was established on September 5 in 1919. The company got license for non-alcoholic drink such as carbonated drink, flavored drinks and mineral water etc. The company also includes several other brands such as sprite, Fanta, Diet coke, Minute maid. The Coca-Cola is choice of thousand people it gives consumer several brand for their choice of drink. It is being market leader in the field of the soft drink industry. It is one of world’s most valuable brand worth of more than 21 billion dollar.

 

·         The Coca-Cola is world’s largest soft drink and being in the market from  more than 125 years.

·         It includes 15 brands and grows sales to 1 billion per year.

·         It provides service to 1.7 billion per day

·         It has 146000 employees in their organization and indirectly 700000 people are working in the Coca-Coal Company.

 

 Mission of Coca-Cola

It is appreciate the winning of happiness and optimize.

IT is to maintain family value and make happy movement in family.

To refresh the world with variety of flavored.

Vision of Coca-Cola 

People oriented: Coca-Cola is people oriented because it focus on their employees, they provide working environment to their employee.

Satisfaction of customer: Consumer satisfaction is one of most important aim of companies to satisfy the need and want of consumer.

Productivity: The Company is highly effective in FMCG goods and performs efficiently in the market.

 

Most popular brand of Coca-Cola

Sprite:

·         Sprite has been originated in Germany and represented as a Fanta Klare Zitrone ( presented as refreshing drink).

·         It has represented in USA in year 1961. It has been launched to compete with 7 UP and now it is being sold almost 190 countries.

·         This drink is launched by Coca-Cola on of the leading brand in the soft drink industry. When it was introduced it was named as “Lithiated Lemon” in year 1929, 1961 it has being renamed as sprite.

 

 

·         Sprite came in India in 1999. It has one of the most popular drinks and heavy competitor of 7UP.

 

Product Related Attributes

·         Sprite is represented as refreshing drink and it contain lemon make feel people free and charged. It also contains lemon-lime and free from caffeine.

·         It has unique flavored of taste that makes you attractive towards this drink. Sprite is on of the popular drink in Indian market.

·         Sprite is different from soft drink because it marketing is completely different from other soft drink. It has been shown as straight forward and mind refreshing soft drink and presented as lemon soda drink.

·         Sprite provides 140 calories in 1 can of sprite that can be broke down in different parts such as 0% fat, 0% protein, 100% carbohydrates.

·         It contain different ingredient and also helpful in digestion as most of the people believe that. It includes such as citric acid, sugar, sodium benzoate and other ingredient.

 

Taglines of Sprite

Sprite has been launched in India 1999. It came with tagline “Sprite Bujhaye only Pyaas,  Baki All Bakwass”.

Sprite has continued it tagline till 2004 after that in 2004 it has changed its tagline to “No Gyan - Only Sprite”.

After few years in 2008 it has changed its tagline to “Seedhi Baat, No Bakwaas, Clear Hai!

 Brand value and self-Image

·         Sprite is all about refreshing the mood of consumer and most honestly representing drink in the industry of soft drink.

·         It connects strongly with honest with younger and powerful through and target youngster in the market and make them refresh

·         The sprite presented itself different from other drink. It makes people to believe that “first drink then think” this formula woks powerfully and seems that consumer are likes its product and sales is being boosting.

·         It is always trying to connect with thought of young generations and targeting the mindset of young generations.

 

Brand portfolio

Soft Drink by Coca-Cola

Minute maid

Fanta

Limca

Thums up

Sprite

Maaza

            

Energy drink by Coca-Cola

Aquarius Glucocharge

Minute Maid Smoothie

Schweppes tonic water

SWOT Analysis of Coca-Cola

Strength:

·         Coca-Cola is world’s largest brand in soft drinks.

·         It is market leader and represents itself as giant.

·         Ii has largest supply chain in soft drink market.

·         It has different product line according to customer need.

 

 

Weakness

·         It has been represented as negative image of junk food.

·         Daily consumption can harm your body (carbonate drinks).

·         They have to Maintaining proper cash to manage daily operation of business.

Opportunity:

·         Coca-Cola is trying to acquiring new customers by expanding its product line.

·         They are trying to establish new product such as energy drink, diet coke, water bottles etc.

·         Coca-Cola is expanding its market by diversify its product.

 

Threats:

·         It has highly competition with its competitor such as Pepsi.

·         Health issues with carbonated drink.

·         It does had their own bottles they are depends on their bottling partners.

 PepsiCo

PepsiCo is ranked under fortune 500 companies, it is American multinational company. It is famous for marketing and manufacturing of soft drinks such as carbonate and non- carbonate flavored drinks.

The product of PepsiCo is consumed by consumer almost 1 billion per day and it is being operated in almost 200 countries. PepsiCo is always competitor of Coca-Cola; it is being fight for world’s largest brand whereas Coca-Cola is market leader in soft drink industry.

Pepsi has 18 different product line and highly competitive market it provides refreshment and nutrition and highly target on young generation. The main product of Pepsi is Mountain dew, Tropicana, Miranda and 7 up. It is also world’s 2 largest manufactures of soft drinks.

 

Mission of PepsiCo

For Consumers: It is aim of company to provide incredible taste to consumer with every sip and new and unique brand experience.

For Customer: Creating good relation with customer and changing innovation and satisfy the need and taste preference of consumer.

For shareholders: It is aim of company to provide effective return to their shareholders and make company world’s best company.

“Create more smiles with every sip”

 

Vision of PepsiCo

The vision of PepsiCo is to become market leader and accelerate its growth. To achieve all heights for the company and provides all possible support so that company can grow efficiently and effectively.

“Be The Global Leader”

Mountain Dew

Mountain dew was launched in 2003 with highly promotion and advertising and huge campaign. Earlier it was launched in Pakistan in 1993 but it extreme failure for Mountain Dew.

Mountain dew is extremely success of Pepsi. It is carbonate drink and represented as powerful drink in the market.

Celebrity endorsement is one of the factors that make mountain dew popular in public. As we all know that Hrithik Roshan is brand ambassador of mountain dew.

Mountain dew is fastest drink growing drink in Indian market and representing itself as a highly powerful drink in the market. The sale of mountain dew is efficiently higher than Pepsi or any other drink in product line of soft drink.

 

Popularity of Mountain Dew

The Mountain dew is highly popular drink in the market of soft drink and famous drink in Indian market. It is famous because of its thirst; this drink is mainly known of its color, caffeine, and its taste to the customer.

 

 

Marketing Mix Strategy of Mountain Dew

Product:

This product focused or targeted customer are basically young generation such as between 18- 35 and it includes people such as male female, students, employees and working professional and every other young generation people.

The manufacturing process of mountain dew is highly security prove. It has to be pass through different level of quality check and quality control process.

 

Promotion:

Promotion creates high degree of awareness in customer mindset.

Direct marketing and advertisement through different channel can create high customer attention.

Place:

In Pepsi there is large scale of supply chain. Pepsi has effective supply chain and distribution for their customer and supply chain should be on time.

 Price:

Price is most effective to attract the customer. Pepsi have launched different range of their product. There is different range of product line according to product. Companies analysis that customer only not looking only for taste and preference they are also looking for price segment of which price is most relevant for them.

 

Different size of bottles:

Mountain dew is most effective drink in Pepsi brand segmentation such as they provides different bootless in range such as 500 ml, 1 liter, 1.5 liters, 2.5 liters these are most common size of mountain dew such as cans, different shape of bottles.

 

 

Pull Strategy of Mountain dew

“Pull strategy is kind of strategy that requires high amount of spending and expense is huge. In pull strategy companies spend lot of money to attract the people mindset and they use this stategy to bulid their brand at national or international level.

Mountain dew sponsor different event and TV shows to make their brand valuable and famous in the people mindset.

Mountain dew use celebrity endorsement to promote their brand such as Hrithik Roshan is brand ambassador of mountain dew.

They organize different type of show or concert for building their brand they target young customer and teenager and advertise their brand and create awareness of brand.

        

Celebrity endorsement by Pepsi:

Pepsi majorly focus on celebrity endorsement because it create healthy brand image of their drinks. Pepsi use celebrity endorsement as their marketing strategy. There are major in the list of celebrity of Pepsi such as Virat Kholi, Hrithi Roshan etc are the big name of celebrity in Indian market. It has always been known that Pepsi is largest market advertiser. It has also sponsor mega sports game like Pepsi IPL league and other major event to make it brand globally famous.