Customer Perception Towards Branded Carbonated Drinks

STUDY OF CUSTOMER BEHAVIOR AND ATTITUDE TOWARDS BRANDED CARBONATED DRINKS

INTRODUCTION

Beverage Industry in India: A Brief Insight In India, beverages form an important part of the lives of people. It is an industry, in which the players constantly innovate, in order to come up with better products to gain more consumers and satisfy the existing consumers.

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The different ways of segmenting it are as follows:

• Alcoholic, non-alcoholic and sports beverages
• Natural and Synthetic beverages
• In-home consumption and out of home on premises consumption.
• Age wise segmentation i. e. beverages for kids, for adults and for senior citizens
• Segmentation based on the amount of consumption i. e. high levels of consumption and low levels of consumption.

If the behavioral patterns of consumers in India are closely noticed, it could be observed that consumers perceive beverages in two different ways i. e. everages are a luxury and that beverages have to be consumed occasionally.

These two perceptions are the biggest challenges faced by the beverage industry. In order to leverage the beverage industry, it is important to address this issue so as to encourage regular consumption as well as and to make the industry more affordable. Four strong strategic elements to increase consumption of the products of the beverage industry in India are:

• The quality and the consistency of beverages needs to be enhanced so that consumers are satisfied and they enjoy consuming beverages. The credibility and trust needs to be built so that there is a very strong and safe feeling that the consumers have while consuming the beverages.
• Consumer education is a must to bring out benefits of beverage consumption whether in terms of health, taste, relaxation, stimulation, refreshment, well-being or prestige relevant to the category.
• Communication should be relevant and trendy so that consumers are able to find an appeal to go out, purchase and consume. The beverage market has still to achieve greater penetration and also a wider spread of distribution.

It is important to look at the entire beverage market, as a big opportunity, for brand and sales growth in turn to add up to the overall growth of the food and beverage industry in the economy. The Carbonated Drinks Industry In India; A Perspective The Rs. 17000 crore market of carbonated drinks industry in India looked really bad just after the “Pesticide” controversy last year. But some cool promotions and quick reactions by cola companies have handled the crisis satisfactorily.

The controversy has thought the industry few lesson or so and in the process consumer and the economy also benefited. “Colas, contributing more than 50 per cent to fizzy drink sales, saw a huge slide after the pesticide controversy, but are believed to be making a come back. Thanks to increased advertisement spends which is over 20 per cent higher than last year. There is some good news on the non-cola segment.

The lime and lemon segments with brands like sprite and 7up have registered a 30 to 40 per cent growth, although on a smaller base. Nevertheless, the battle between two cola giants, Coke & Pepsi, did not go any slow. Rather it has become fiercer. They are now fighting each other even at the local level. That too the trend is as old as start of this millennium. The present scenario of the carbonated drinks market is behaving the way it has all to do with a duopoly situation. A duopoly is a competitive situation where there are two competitors, normally of roughly equal size. Although in every place they have local competitors and there is a huge unorganized flavoured water market.

Yet again, packaged water is also a competitor to the cola brands and in this category neither of the two cola companies are market leaders. However, as far as the carbonated drinks are concerned there are only two brands, Coke and Pepsi. Therefore, we can safely say that this condition does qualify to be a near duopoly situation and thus there is such intense competition. Unless, the two parties in a duopoly collaborate with each other, which is certainly not the case in the cola market worldwide or in India, this battle is not going to slow down even a bit! Rather, it would grow stronger with every passing day.

In a situation like this it is very interesting to observe marketing strategies in general and Product & Pricing strategies in specific of the players, merely because the action of one player is bound to invite similar reaction from the other. As if, the third law of Newton, that ? every action has an equal and opposite reaction, can‘t fit better in any other situation! In a duopoly like situation, as far as cola industry in India is concerned, it can be said that it is foolish to cut prices unless, one of the two parties has a much lower cost base. But that is not the case in India.

In fact, both the companies, Coke and Pepsi, invest heavily in advertising and in distribution through their franchise as well as their own systems. However, a great deal of attention is paid by both companies to cost, particularly in the development of a tightly effective supply chain system in which economies are squeezed out and, wherever possible both overheads and working capital are controlled. Therefore, it is extremely difficult to for both the parties to play with the prices. Rather, it is counter-productive exercise, as when prices are reduced in a particular area by one of the cola brands, the second must follow.

If we look into the history of pricing of these two particular players of the carbonated drinks industry, we will see that the first major initiative in the price front took place some years ago when the brand Coca-Cola came back to India. At that point of time colas were available only in 200 ml bottles. Coca-Cola, in it‘s come back trail, broke the tradition by launching Cola in the 300 ml size bottles but at the same price as Pepsi, which was then in a 200 ml bottle. With this strategy, Coke expected to gain advantage in the market especially in India, which is traditionally a highly price sensitive market.

However, Pepsi, as being a fierce competitor was prepared for it and soon launched its colas in the 300 ml sizes. Thereby, in India, it was the 300 ml bottle which became the standard in most parts of the country, making the price a parity issue between the two brands. Then, a few years ago, one litre and 1.5 litre non-returnable PET bottles at a discount in comparison to, a 300 ml returnable glass bottle, the traditional packaging in this product category, was launched by Pepsi. It was a successful move resulting in significant increase in the consumption level especially amongst the loyal consumers in the urban areas.

And part of the rule of the game, Coke followed Pepsi in the above move in order to reduce the cost per glass to the consumer. Then came the days of a 500 ml non-returnable PET bottle which was advertised almost totally on the cost of the consumer per 100 ml of cola! Nevertheless, the great advantage that the PET bottles provided is that they have increased home consumption level which was not of much significance compared to out of home consumption till then. And in very recent times the Coke did a u-turn that is price cuts. The latest move of reducing price to the consumer is the very opposite of what has been happening to-date.

It has now re-launched a 200 ml bottle at a unit price of approximately 2/3rd of the 300 ml price, thus making retail purchase look cheaper. This strategy was meant to fight consumption pattern of smaller towns and rural areas where two people share a 300 ml bottle. Importantly, by making the bottle smaller it has only reduced unit price without affecting the trade margin. It has been reported that Pepsi has been cutting the price of its 300 ml bottle in some places, until an inventory of 200 ml bottles was built, as an answer to the Coke‘s strike.

However, this act of Pepsi might boomerang as there is a strong probability of having some negative effect on the supply chain and other inventory cost in the long run. Competitive Arena The soft drink market all over the world has been witnessing a neck to neck battle between the two major players, Coca-Cola and Pepsi since the very beginning. The thirst quenchers are trying hard to have the major chunk of the pie of carbonated soft drink market. Both the players are spending their energies in building capacity, infrastructure, promotional activities etc.

Coca-Cola being 11 years older than Pepsi has dominated the scene in most of the soft drink markets in the world and enjoying leadership in terms of market share. But the Coca-Cola people are finding it hard to keep away Pepsi, which has been narrowing the gaps regularly. The two are posing threats to each other in every nook and corner of the world. While Coca-Cola has been earning most of its bread and butter through beverage sales, Pepsi has a multi products portfolio with some portion from the same business. Aims/Objective

In this research we are making an attempt to study which carbonated drink is preferred by consumers around Manipal, and do they take into account factors such as price, brand, taste etc while purchasing a carbonated drink.

• Consumer perception towards Carbonated drinks.
• To understand buying behavior of consumers.
• To recommend for future course of action.

RESEARCH DESIGN

Research Design: Descriptive research- also known as statistical research, describes data and characteristics about the population. Descriptive research answers the questions who, what, where, when and how.

COLLECTION OF DATA

1. Primary data : Based on questionnaire, will be distributed among consumers & direct interview will be taken, to collect the data.
2. Secondary data : Collected from articles, magazines, newspaper research reports and internet.
3. Sampling: Stratified sampling technique will be considered. A sample size of 200 consumers will be selected from Manipal to study.

The process of grouping members of the population into relatively homogeneous subgroups before sampling. Proportionate allocation uses a sampling fraction in each of the strata that is proportional to that of the total population.

If the population consists of 60% in the male stratum and 40% in the female stratum, then the relative size of the two samples (three males, two females) should reflect this proportion.

Random sampling is undertaken for selecting sample from the population SAMPLING ERROR: In any study involving the sampling process, there would normally be a certain amount of inaccuracy in the data collected. This inaccuracy is termed as ‘Sampling Error’. In other words, sampling errors are those errors which arise on account of sampling.

Limitations of the Study

1. Some of the respondents refused to fill the questionnaires.
2. The responses may vary as some people did not want to come up with real answers.
3. The people were busy in their own work so they might not have given actual responses.
4. Limitation of time.
5. The survey is conducted only in few areas of Manipal; hence the results may vary in other parts of the cities.
6. Small sample size.
7. And like any other research the limitation of personal bias of respondents limits the scope of the study.
8. The findings are based on the survey conducted in the month of feb; the results may vary in other months.

INTERPRETATION: Since the calculated value 0. 000 is lower than 0. 05, we reject the null hypothesis and conclude saying that the occupation are dependent on the selection of carbonated drinks. So, occupation does not affect in the selection of branded carbonated drinks.

FINDINGS AND CONCLUSION

Findings

1. Maximum number of people surveyed is below 15 years because they are major consumers.
2. Out of 200 people 13%are professionals, 9% are businessman, 26% are serviceman, and 49% are students.
3. Out of 200 respondents, 97% of consumers buy cold drinks and only 3% of them do not buy.
4. 9% respondents prefer coke, 18% prefer Pepsi, 12% 7up, 11 % of them prefer Sprite, 9% Fanta, and 23% prefer Thumbs-up.
5. 25% people purchase cold drinks because of taste, 20% people purchase cold drinks because of brand name, 20% people purchase cold drinks because of packaging, 15% people purchase cold drinks because of price, 11% people purchase cold drinks because of brand ambassador, 8% people purchase cold drinks because of easy availability & 1% people purchase cold drinks because of any other reason.
6. Out of 200 consumers 98% have seen the advertisement and only 2% have not seen the advertisement of any brands.
7. 3% people remember the advertisement of coke, 23% people remember the advertisement of Pepsi, 1% people remember the advertisement of 7up, 6% people remember the advertisement of sprite, 4% people remember the advertisement of Fanta, and 23% people remember the advertisement of Thumbs-up.
8. 24% people remember the advertisement because of creativity, 25% people remember the advertisement because of brand ambassador, 11% people remember the advertisement because of their idea of delivering the message, 25% people remember the advertisement because of frequency of ads, and 15% people remember the advertisement because of logical reason.

Conclusion

From the analysis of the data collected and from the experiences we have reached the following conclusions:

• COKE is most popular amongst its users mainly because of its TASTE, BRAND NAME. Thus it should focus on good taste so that it can capture the major part of the market. But most of the consumers prefer THUMSUP as their 1st preference, then COKE.
• We come to the conclusion that visibility affects the sales of project in a very special way. And in terms of the advertisements lays is lacking behind mostly consumers remember the advertisement because of the frequency of add and brand ambassadors, creativity. After acquiring a new customer, there is lot of importance of its retention also. This can be done only by providing extra flavors and good taste.
• In today’s scenario, customer is the king because he has got various choices around him. If you are not capable of providing him the desired result he will definitely switch over to the other provider. Therefore to survive in this cutthroat competition, you need to be the best. Customer is no more loyal in today’s scenario, so you need to be always on your toes.

We feel that there is cut-throat competition between COKE,PEPSI,THUMSUP so to be on top of mind of the customers they need to do something outstanding every time.

BIBILOGRAPHY

• Research methodology by C. R. Kotari
• Websites:
  • www. cocacola. com
  • www. pepsi. com
  • www. wikipedia. com
• Doing Quantitative Research in Education with SPSS by Daniel Muijs.

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