INTRODUCTION

COLD DRINK INDUSTRY

Definition of soft drink

Soft drinks are non-alcoholic water-based flavoured drinks that are optionally sweetened,

acidulated and carbonated. Some carbonated soft drinks also contain caffeine; mainly the

brown-coloured cola drinks.

Globally, carbonated soft drinks are third most consumed beverages. Per capita annual

consumption of carbonated soft drinks is nearly four times the per capita consumption of fruit

beverages Soft drink consumption is growing by around 5% a year, according to the

publication Global Soft drinks 2007, published by the Zenith International. Total volume

reached 523,000 million litres in 2007, giving a global per capita consumption of around 67.5

litres per year.

North America is the largest soft drinks market with 27 per cent of total world soft drink sales

and a consumption of 48 gallons per person per year (192 litres/ person / year). The European

market accounts for 21 per cent, with a per capita consumption of 12.7 gallons per year (50.8

litres / person/ year). The fastest growth in soft drink consumption is in Asia. Pakistan is

predicted to have the highest percentage growth rate while India is expected to make sizeable

volume gains, as affluence spreads to more of its vast population.

Major Players-Global

The global soft drink industry is highly concentrated, being largely controlled by the two

multinational companies; Coca Cola and PepsiCo. Coca Cola leads the carbonated soft drink

market in most countries in the world with 60% of the global cola market with its flagship

Coca-Cola brand. Other notable players include Cadbury Schweppes.

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Indian Scenario

Market

According to government estimates soft drinks marketed in India were 6540 million bottles in

March 2001. The market growth rate, which was around 2-3% in ‘80s, increased to 5-6% in

the early ‘90s and is presently 7-8% per annum. Most of the sales of soft drinks take place

during summers while just 5-6% of total sales take place in winters. In summers the high

season lasts for 70-75 days, which contributes more than 50% of the total yearly sales. In

terms of regional distribution cola drinks have main markets in metro cities and northern

states of UP, Punjab, Haryana etc. Orange flavoured drinks and sodas are popular in southern

states. Western markets have preference towards

Mango-flavoured drinks. Non-alcoholic beverage market can be divided into fruit drinks and

soft drinks. Soft drinks available in glass bottles, aluminium cans, PET bottles or disposable

containers can be divided into carbonated and non-carbonated drinks. Cola, lemon and

oranges are carbonated drinks and non-carbonated drinks include mango drinks. Soft drinks

can also be divided into cola products and non-cola products. Cola products in Indian include

brands like Pepsi Cola, Diet Pepsi, Coca- Cola, Diet Coke, Thumps Up etc. Cola drinks

account for nearly 61-62% of the total soft drinks market in India. Non-Cola products

account for 36% the total soft drink market

. Major Players in India

The two global majors PepsiCo and Coca-Cola dominate the soft drink market in India.

Coca-Cola, which had winded up its India operations during the introduction of the FERA

regime, re-entered India 16 years later in 1993. Coca-Cola bought local brands-Thumps Up,

Limca and Gold Spot from Parle Beverages and soft drink brands Crush, Canada Dry and

Sport Cola from Cadbury Schweppes in early 1999.

Pepsi started a couple of years before Coca Cola in 1991 has bought over Mumbai based

Duke’s range of soft drink brands. There are conflicting figures about their market share.

Some estimates put the market share of PepsiCo to be higher and some put the market share

of Coca Cola to be higher. However, the soft drinks segment, dominated by these two

companies, accounted for Rs 6,247 crore in sales in 2002.

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Consumer Behaviour

The term consumer behaviour refers to the behaviour that consumers display in searching for,

purchasing, using, evaluating and disposing of products and services that they expect will

satisfy their needs. The study of consumer behaviour is the study of how individuals make

decisions to spend their available re- source (time, money, effort) on consumption related

items. It includes the study of what they buy, why they buy it, when they buy it, where they

buy it, how often they buy it and how often they use it.

Information about the pattern of consumption in various segments of society and

dynamics of consumer behaviour are central to the understanding for developing new

concepts in marketing. The essence of modern marketing concept is that all elements of

business should be geared towards identifying and satisfying the needs of the consumers.

Decision Making Process

The consumer’s decision to purchase or reject a product is a moments of final truth

for marketer. It signifies whether the marketing strategy has been wise, insightful, and

effective, or whether it was poorly planned and missed the mark. Thus, marketers are

particularly interested in consumer’s decision-making process. We would be discussing a

simple model of consumer decision making that emotional consumer. The modal, has three

major components:

1) Inputs

2) Process

3) Output

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Psychological Factors

Product Price Place Promotion

Firm’s Marketing Efforts

Psychological Factors

Perception Motivation Attitude Learning

Family Reference Group Other non-commercial

influence Social class Culture and sub-culture

influences

Socio culture Environment

Purchase

Trial Repurchase

Post purchase evaluation

Need recognition Information search Valuation

alternatives

Input

Process

Output

CONSUMER DECISION MAKING PROCESS

External influences

Consumer Decision Making

Post Purchase Behaviour

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Experience

INPUTS

The input component draws on external influences that serve as sources of

information about a particular product and influence a consumer’s product-related values and

behaviour. Chief among these input factors are the marketing – mix activities of

organizations that attempt to communicate the benefits of their products and services to their

potential customer, and the no marketing socio-cultural influences, which, when internalized,

affects the consumer’s purchase decision.

PROCESS

The process component of the modal is concerned with how consumers make

decisions. The psychological field represents. The internal influences (motivation, perception,

learning, personality, and attitudes) that effect the consumer’s decision making processes.

Pre purchase Activity: After the problem is identified, the buyer indulges in pre purchase

activity. It is under stood that need is a father of a deed.

There generally remains a time lag when a person thinks to buy and the actual

incidence of buying. During this time, the person is energized and is likely to be influenced

by various factors. Need arousal drives the consumer to collect information about the

required product. He first indulges in internal search, scans his psychological field so as to

recollect of retrieve any information or past experience related to particular need. His

psychological field comprises of his past learning. Perception, personality and past

experience. If he is not satisfied he then goes in for external search and looks for various

sources of information. The degree of perceived risk can also influence this stage of the

decision process. In high – risk situation they are likely to engage in complex information

search and evaluation tactics.

Of key interest to marketer are the various sources of information that the consumer

will return to and the relative influence that they will have on his buying behaviour.

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Evaluation of Alternatives: when evaluating potential alternatives consumers tend to use

two types of information:

1. A “list” of brands from which they plan to make their selection (the evoked set), and

2. The criteria they will use to evaluate each brand.

The criteria consumers use to evaluate the brands that constitute their evoked sets

usually are expressed in terms of important product attributes. Consumers use certain

procedures or rules to facilitate a choice among multi – attribute objects. Consumer’s

decision rules have been broadly classified into two major categories compensatory

and non compensatory decision rules.

An understanding of which decision rules consumer apply in selecting a

particular service or product is useful to marketers concerned with formulating a

promotional programme.

Output

The output portion of consumer decision – marking model concerns two closely

associated kinds of post decision activity. Purchase behaviour and post purchase evaluation.

The objective of both activities is to increase the consumer’s satisfaction with his/her

purchase.

Purchase Behaviour: Consumer make two types of purchase and repeat purchase. If a

consumer purchase a product (or brand) for the first time, and buys a smaller quantity than

usual, this purchase would be considered a trail. Thus, a trail is the exploratory phase of

purchase behaviour in which consumers attempt to evaluate a product through direct use.

If the new brand is established product category (cola, chewing gum, candies) is

found by trail to be more satisfactory or better than other brands, consumers are likely to

repeat the purchase, Repeat purchase behaviour is closely related to the concept of brand

loyalty, which firms try to encourage because it contributes to greater stability in the

marketplace.

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Customer Satisfaction

Customer satisfaction11, a business term, is a measure of how products and services supplied

by a company meet or surpass customer expectation. It is seen as a key performance indicator

within business and is part of the four perspectives of a Balanced Scorecard. In a competitive

marketplace where businesses compete for customers, customer satisfaction is seen as a key

differentiator and increasingly has become a key element of business strategy.[

Satisfaction is a person’s feeling of pleasure and disappointment resulting from comparing a

product’s perceived performance in relation to his or her expectations. It is only the customer

delight that marketer aims for. Increasing competition (whether for-profit or nonprofit) is

forcing businesses to pay much more attention to satisfying customers. (It may help the

reader to notice the role of customer satisfaction in the overall context of product or service

development and management. See Product/Service Management. Also notice the Related

Info (including customer service) in the library.

Measuring customer satisfaction3

Organizations are increasingly interested in retaining existing customers while targeting non-

customers;[2] measuring customer satisfaction provides an indication of how successful the

organization is at providing products and/or services to the marketplace.

Customer satisfaction is an ambiguous and abstract concept and the actual manifestation of

the state of satisfaction will vary from person to person and product/service to

product/service. The state of satisfaction depends on a number of both psychological and

physical variables which correlate with satisfaction behaviors such as return and recommend

rate. The level of satisfaction can also vary depending on other options the customer may

have and other products against which the customer can compare the organization's products.

Because satisfaction is basically a psychological state, care should be taken in the effort of

quantitative measurement, although a large quantity of research in this area has recently been

developed. Work done by Berry, Brodeur between 1990 and 1998[3] defined ten 'Quality

Values' which influence satisfaction behavior, further expanded by Berry in 2002 and known

as the ten domains of satisfaction. These ten domains of satisfaction include: Quality, Value,

Timeliness, Efficiency, Ease of Access, Environment, Inter-departmental Teamwork, Front

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line Service Behaviors, Commitment to the Customer and Innovation. These factors are

emphasized for continuous improvement and organizational change measurement and are

most often utilized to develop the architecture for satisfaction measurement as an integrated

model. The usual measures of customer satisfaction involve a survey [4] with a set of

statements using a Likert Technique or scale. The customer is asked to evaluate each

statement and in term of their perception and expectation the of the performance of the

organization being measured.

Customer Satisfaction – a Critical Component of Profitability4

Exceptional customer service results in greater customer retention, which in turn results in

higher profitability. Customer loyalty is a major contributor to sustainable profit growth. To

achieve success, you must make superior service second nature of your organization. A

seamless integration of all components in the service-profit chain – employee satisfaction,

value creation, customer satisfaction, customer loyalty, and profit and growth – links all the

critical dynamics of top customer service.

Sadly, mature companies often forget or forsake the thing that made them successful in the

first place: a customer-centric business model. They lose focus on the customer and start

focusing on the bottom line and quarterly results. They look for ways to cut costs or increase

revenues, often at the expense of the customer.

They forget that satisfying customer needs and continuous value innovation is the only path

to sustainable growth. This creates opportunities for new, smaller companies to emulate and

improve upon what made their bigger competitors successful in the first place and steal their

customers.

Consumer Preference

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In microeconomics, preferences of consumers and other entities are modeled with preference

relations. Completeness is more philosophically questionable. In most applications, S is an

infinite set and the consumer is not conscious of all preferences. For example, one does not

have to make up one's mind about whether one prefers to go on holiday by plane or by train if

one does not have enough money to go on holiday anyway (although it can be nice to dream

about what one would do if one would win the lottery). However, preference can be

interpreted as a hypothetical choice that could be made rather than a conscious state of mind.

In this case, completeness amounts to an assumption that the consumer can always make up

their mind whether they are indifferent or prefer one option when presented with any pair of

options.

Consumer preferences2

The underlying foundation of demand, therefore, is a model of how consumers behave. The

individual consumer has a set of preferences and values whose determinations are outside the

realm of economics. They are no doubt dependent upon culture, education, and individual

tastes, among a plethora of other factors. The measure of these values in this model for a

particular good is in terms of the real opportunity cost to the consumer who purchases and

consumes the good. If an individual purchases a particular good, then the opportunity cost of

that purchase is the forgone goods the consumer could have bought instead.

We develop a model in which we map or graphically derive consumer preferences. These are

measured in terms of the level of satisfaction the consumer obtains from consuming various

combinations or bundles of goods. The consumer’s objective is to choose the bundle of goods

that provides the greatest level of satisfaction as they the consumer define it.

But consumers are very much constrained in their choices. These constraints are defined by

the consumer’s income, and the prices the consumer pays for the goods. We will formally

present the model of consumer choice. As we go along, we will establish a vocabulary in

order to explain the model. Development of the model will be in three stages. After a formal

statement of the consumer’s objectives, we will map the consumer’s preferences. Secondly,

we present the consumer’s budget constraint; and lastly, combine the two in order to examine

the consumer’s choices of goods.

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Before a new product can be made, or an existing one varied, someone must have the idea of

doing so. Since market research as a business activity is conducted and paid for by firms, the

investigation of consumer wants and preferences is fairly well defined by the spheres of

interest that exist within the firm. There is little point in asking the public the open-end

questions, "What do you need, or want? What shall we make?" The consensus appears to be

that consumers themselves scarcely ever originate new product ideas, that development of a

specific product represents the functioning of creativity in business, and that such creativity

may be found among technical research, production engineering, market research, or sales

staff, all of whom have been responsible for one idea or another.

Considering the magnitude of choice that confronts the American public, it is easy to

understand why this is true. Any household consumer is likely to deal in a far greater variety

of products and purchases than any firm, and any consumer's suggestions for new items cover

a broader field than that of any business interest. The firm is oriented to production and

marketing; the consumer, to his own needs and to an unlimited range of alternatives.

The consumer may say, for example, in answer to the open-end question, "What do you

want?" "We'd like something to make shoe polishing less of a messy job." For the

manufacturer of shoe polish, however, this does not offer clear instructions on how to adapt

his paste, liquid, or spray toward even greater convenience. Nor does it produce for the

manufacturer of shoes a formula for a plastic shoe that can be so cheaply made; it will be

discarded when soiled.

One acceptable alternative, for consumers, might conceivably be for drug companies to

develop a toughening agent for feet so that shoes are no longer needed for protection, and

then for the world of fashion to insist that bare feet are the epitome of style. Thus, consumers'

suggestions rarely furnish new product ideas, either because consumers are inarticulate about

their own needs, or because they lack the technical competence to specify feasible

alternatives.

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Coca Cola

Company Profile

John Pemberton was the inventor of Coca Cola

In May, 1886, Coca Cola was invented by Doctor John Pemberton a pharmacist from Atlanta,

Georgia. John Pemberton concocted the Coca Cola formula in a three legged brass kettle in

his backyard. The name was a suggestion given by John Pemberton's bookkeeper Frank

Robinson.

Birth of Coca Cola 18

Being a bookkeeper, Frank Robinson also had excellent penmanship. It was he who first

scripted "Coca Cola" into the flowing letters which has become the famous logo of today.

The soft drink was first sold to the public at the soda fountain in Jacob's Pharmacy in Atlanta

on May 8, 1886.

About nine servings of the soft drink were sold each day. Sales for that first year added up to

a total of about $50. The funny thing was that it cost John Pemberton over $70 in expanses,

so the first year of sales were a loss.

Until 1905, the soft drink, marketed as a tonic, contained extracts of cocaine as well as the

caffeine-rich kola nut

Asa Candler 31

In 1887, another Atlanta pharmacist and businessman, Asa Candler bought the formula for

Coca Cola from inventor John Pemberton for $2,300.

By the late 1890s, Coca Cola was one of America's most popular fountain drinks, largely due

to Candler's aggressive marketing of the product. With Asa Candler, now at the helm, the

Coca Cola Company increased syrup sales by over 4000% between 1890 and 1900.

Advertising was an important factor in John Pemberton and Asa Candler's success and by the

turn of the century, the drink was sold across the United States and Canada. Around the same

time, the company began selling syrup to independent bottling companies licensed to sell the

drink. Even today, the US soft drink industry is organized on this principle.

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Death of the Soda Fountain - Rise of the Bottling Industry

Until the 1960s, both small town and big city dwellers enjoyed carbonated beverages at the

local soda fountain or ice cream saloon. Often housed in the drug store, the soda fountain

counter served as a meeting place for people of all ages. Often combined with lunch counters,

the soda fountain declined in popularity as commercial ice cream, bottled soft drinks, and fast

food restaurants became popular.

New Coke

On April 23, 1985, the trade secret "New Coke" formula was released. Today, products of the

Coca Cola Company are consumed at the rate of more than one billion drinks per day.

The Coca-Cola Company Mission 11

Our Mission is:

To refresh the world - in mind, body and spirit

To inspire moments of optimism - through our brands and actions, and

To create value and make a difference - everywhere we engage

The Coca-Cola Company Vision 27

To achieve our Mission, we have developed a set of goals, which we will work with our

bottlers to deliver:

Profit: Maximising return to shareowners while being mindful of our overall responsibilities.

People: Being a great place to work where people are inspired to be the best they can be.

Portfolio: Bringing to the world a portfolio of beverage brands that anticipate and satisfy

people's desires and needs.

Partners: Nurturing a winning network of partners and building mutual loyalty.

Planet: Being a responsible global citizen that makes a difference.

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The Coca-Cola Company Values

Our shared values that we are guided by are:

Leadership

Passion

Integrity

Accountability

Collaboration

Innovation

Quality

The Soft Drink Industry Scenario in US 5, 29

The soft drink industry in the US is not different from that in any other country with respect

to the ‘players’ involved in the business. The major components of the industry consist of the

concentrate manufacturers, bottlers and the sales and distribution network of the companies.

The role and responsibilities of each of them are different: the major activity taken up by the

concentrate manufacturers relates to the production of the basic product which is bottled by

the bottling plants –

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The Indian Soft Drink Industry

Scenariothe cola market in India the companies have continued to wage their war in India. Coke, with

the strategic move of buying out Parle, gained a huge market share overnight. But Pepsi is

sparing no efforts to gain a larger share of the market. The potential in the Indian market is

tremendous. The Indian market is roughly more than Rs 1,200 crore; moreover, the per capita

consumption of three bottles in India is lagging way behind the US’s astounding 700 bottles

per capita consumption. Both Coke and Pepsi have rightly realized that the immediate

priority is in expanding the market by increasing the growth rates. The Indian market

averaged a growth rate of 2.5 per cent between the years 1984-92. From 1992, when the Cola

war took a serious turn, the growth rate has almost doubled. Last year the market grew by 20

per cent in volume term, with estimated sales of 140 million cases (one case = 24 bottles of

300 ml each) – up from 115 million cases in 1994. In 1977 a change in the government at the

centre led to the exit of Coke which preferred to quit rather than dilute its equity to 40 per

cent in compliance with the

Provisions of FERA. The first national cola drink to emerge was Double Seven. In the

meantime, Pure Drinks, Delhi, on Coke’s exit switched over to Campa Cola, and, by the end

of 1970s, Campa Cola was practically alone in the cola market. Thumps Up was introduced

by Parle in the beginning of 1980s, followed by Thril by Mcdowells and Double Cola by

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Double Cola Manufacturing Company (DCMC) – an NRI-run outfit with its plant at Nasik.

An additional dimension to the Indian soft drink industry was that of fruit a drink which was

valued at Rs 40 core and among the brands in the market, the leader was Parle’s Frooti with

about 40 per cent of the market share. The other players in this segment who have posed

challenges to Parle are Godrej (with Jump in) and Ahmedabad-based Pioma industries’Rasna

Cola-Cola. Before 1992, the Indian soft drink industry had not grown fast mostly due to high

excise duties and government encouragement of fruit drinks over carbonated drinks. Though

Limca was the largest selling brand of bottled soft drink in India, from consumers’ point of

view ‘Cola’ was the most popular flavors. It accounted for about 40 per cent of the market.

‘Lime’ and ‘Lemon’ drinks followed with about 30 per cent, and ‘Orange’ drinks had only

about 20 per cent of the market share. Carbonated soft drinks accounted for the rest 10 per

cent. From 1984 to 1992, the Rs 1,200 crore Indian soft drink industries grew at an average of

2.5 to 3 per cent the highest being 12.4 per cent during 1984-85. Pepsi had a very significant

first mover advantage in the Indian market. It did not have the condition of divestment of 49

per cent equity in downstream ventures attached to it when it received permission to invest in

India. Pepsi had obtained the government approval for its downstream ventures prior to the

FDI guidelines that made Indian equity holding mandatory. Thus, in its original clearance,

Pepsi was not only allowed to hold 100 per cent equity in its holding company but was also

allowed to carry out bottling and marketing operations. The government approval, moreover,

had allowed Pepsi to carry out acquisition of assets to expand its business in the country.

Pepsi used this clause in its approval to buy out 100 per cent stake in some of the domestic

bottling companies including its high profile buyout of Gujarat Bottling Company, the former

Coke franchisee in Ahmedabad. Industry ministry sources have clarified that while Pepsi

would be required to seek fresh government approval if it picks up shares in domestic

bottling companies as part of its portfolio investment, it does not need such approval if the

assets are acquired for expansion. Coca Cola came back to India after 16 years when it was

launched on October 24, 1993, at Agra. Coca-Cola was initially wooed by the Godrej group,

Great Eastern Shipping and the Britannia Industries Ltd, led by Rajan Pillai. In March 1991,

it signed an MOU with BIL and this proposal was accepted by the Chandrasekhar

government. But relationship between the two companies turned sour over the export

oriented clause and finally on June 23, 1993, Coca Cola got the permission to enter the

country with a 100 per cent unit in India. On September 22, 1993, the company bought out

the Parle brands. The industry, prior to 1990, was witnessing sluggish growth rates (CAGR:

around 5 per cent) with two domestic players: Parle and Pure Drinks. The entry of the cola

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giants, Coke and Pepsi, led to a rapid expansion in the size of the market (CAGR for the first

half of the 1990s: around 20 per cent). Coke’s acquisition of Parle has turned the market into

a

The Soft Drink Industry Today

At present, Coke operates through a system of franchise bottlers. It has 53 bottling units

partitioned amongst 26 Companies. Each of these bottlers earlier was doing business with

Parle’s Ramesh Chouhan, before he sold off his soft drink brands to Coke. As per agreement

signed between Coke and these bottlers, the former supplies them with the soft drink

concentrate, which they bottle and then distribute in their respective territories. In a move to

strengthen its position in the Indian market as well as reduce, if not eliminate completely, its

conflicts with its bottlers, Coke plans to set up two bottling companies. Promoted by Coke

South Asia Holdings, it will own all the bottling facilities that the company currently holds in

the country. Under the new plan, the bottlers will cease to remain independent entities;

instead, depending on geographical location, they will be merged into either of the mega

bottling companies. Considering the huge potential of growth of the Indian market, Coke

wants to expand the market by 40 per cent per annum, as against existing growth levels of 20

per cent. As a move towards that direction, Coke is offering bottlers an equity stake in the

two new bottling companies and also a seat in the special advisory committee to assist the

mega bottling companies on its strategy in India. Coke has the plan to take its bottling

companies public in India and then recoup all the investments it has made in the country so

far. Coke presumes that the ownership of bottling units will do away with the fear about the

prospect of any of its bottlers defecting to competitor Pepsi. It also anticipates that it will

provide the company a fair deal of flexibility and control over bottling, the same advantages

that are enjoyed by its competitor Pepsi. Thus, once it owns the bottling units, it would be

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easier for Coke to transfer the bottling technology to India. And more importantly, if Coke

were to put its money in expanding operations, the cost of funds would be far less than if the

Indian bottlers did, simply because capital can be cheaper abroad. But there lies an element of

emotion since most of the 26 bottlers have been in the trade for over 20 years. Since Coke

needs bottlers as much as bottlers need Coke, if Coke forms a bottling company, it must be

able to convince the bottlers that their capital employed will definitely multiply, perhaps

faster than its present rate of accretion. It should also be able to provide some sort of a safety

net to the bottlers if the bottling company fails to achieve its pledged profitability. And

Finally, Coke must assure the bottling companies that they will remain active participants in

the business, and not degenerate into passive shareholders. Squeezing margins is Coke’s main

weapon, whereas the bottlers intend to use the political weapon. Many of them have been

making representations to the government and lobbying with members Of parliament to put

pressure on Coke. They have been talking about launching a new soft drink to take on both

Coke and Pepsi. By early 1999, Coke should have at least 50 per cent of its bottling

operations under its belt, wishes Coca-Cola India president and CEO. The multinational soft

drinks company has already acquired several bottling plants in India and hopes to bring 20-25

of its 50 bottlers under its wing by next year. This translated into real terms and pegged to the

current market output level, means that the company will directly control 65 million cases of

the total 130 million. Coke is now stressing that bottlers with a shorter term perspective

should either sell their plants to the company or enter into a joint venture arrangement. Coke

is entering into dialogue with its bottlers to thrash out their plans and the company’s

expectations, based on its current strategy of building on and managing its existing capacities

more concertedly. In a strategic decision signifying the importance of its Indian operations,

Coca- Cola India has been upgraded as a separate business division, reporting directly to the

headquarters of the Coca-Cola Company at Atlanta. The new division would also signify less

bureaucracy since its needs were earlier routed through the Bangkok office and would

improve accountability, responsibility and autonomy of Coke. The restructuring was also

necessitated by the high volumes involved in the Indian market and its future growth

prospects. Operating as a division will now allow the company to manage its business with

more autonomy. The company has undertaken new marketing initiatives, which includes

launching its products in Bangalore and Guntoor in the south and the ‘get refreshed’

promotional campaigns for its Limca and Thumps Up brands, which have been identified as

new growth vehicles. (Pepsi had also restructured its Indian operations by creating a separate

division – PepsiCo India.)

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Coca-Cola India has firmed up a Rs 100 crore investment programmed for its first company-

owned bottling plant in the state of Karnataka. Simultaneously, rival Pepsi is also pressing

ahead with its Rs 25 crore expansion plan in the state, spearheaded by its proposal to launch

carbonated fruit juice-based beverages. According to the company, the only stumbling block

in this move is the high rate of excise. It is also setting up a research and development (R and

D) centre at Neelamangala in Karnataka. Pepsi has already acquired 12 acres of land adjacent

to its Greenfield project set up about a year ago. This land would mainly be used for R and D

activities in horticulture. Part of this investment would also be employed to set up other

infrastructural facilities like carriage trucks and the necessary cold-chain, etc. Initially,

however, the company would develop new varieties of potatoes and tomatoes for use in its

snack foods business – operated through a separate company, christened Frito-Lay India.

Later, there are plans to extend the activity to other fruits which may be used to prepare

carbonated fruit juice-based beverages. The Neelamangala bottling plant spread over an area

of five acres has lines to bottle fruit juices. Presently, the company manufactures and sells

two mango-based beverages, namely, ‘Slice’ and ‘Mangola’. While the former is revenue

grosser worldwide, the latter was acquired by Pepsi from the Mumbai based Dukes. But

Pepsi’s archrival Coke has no immediate plans to foray into products outside aerated soft

drinks like Coke, Fanta, Thumps Up, Limca, etc, unlike that of Pepsi. Coke had already

acquired a 20 acre plot to set up a Greenfield plant near Bangalore. Part of the investment

would also be used in setting up the plant, to acquire machinery and chillers and for

establishing other infrastructural needs like carriage trucks, etc. This bottling plant would be

Coke’s third company-owned bottling plant in the country. Coke has the approval of the

Foreign Investment Promotion Board (FIPB) to set up four investing companies for equity

investment in downstream bottling units. Coca-Cola India’s restructuring plan is one year

ahead of schedule and the consolidation of the company’s bottling operation would be

complete by the end of 1999. The company expects to own and operate at least 25 COBOs by

the mid-1999. Around 15-20 bottlers would enter equity joint ventures, with Coke

commanding a majority stake in them. The remaining 5-7 bottlers, based mainly in north

India, would continue to work as the soft drink major’s franchise bottlers. The equity

investments in the bottling companies were being made by two companies set up for the

purpose, namely, Hindustan Coca-Cola Bottling North-east and Bharat Coca-Cola Bottling

South-west. By year 2003 the company would divest 25 per cent to the Indian public,

implying it would end up being owners of 51 per cent equity. Most of the bottlers were,

however, opposed to the move

19

Justification of the study

Every research that we are conducting should contain some important to us. Here I am doing

the research on the topic Study of Consumer behavior regarding Cold Drinks (Pepsi & Coke)

on the basis of Price, Brand name, Consumption, Taste, Need. The main reasons of selecting

this topic is

1. Consumers of the cold drinks are very much influencing by the characters of the

products.

2. In cold drinks market (especially in Pepsi and coke) the consumption patterns are very

wide

3. Both the companies are very closely rivals of each others.

4. In cold drink market consumer behaves very dynamically and consumers need more

and more tastes and choices.

5. Rapid increase in population also affects the growth of market of these products.

6. Increasing demand of rural market.

7. Increasing income of middle class people.

20

OBJECTIVES OF THE STUDY Primary Objective:

To know the impact of various external factors on Consumer preference and

Consumer satisfaction:-

Price

Brand name

Taste

Need

consumption

Secondary Objectives: To make suggestions to company to improve the level of satisfaction among

customers.

To know the price effect on the purchase of cold drinks.

To find the cause behind choice of particular brand of cold drinks

.

21

LITERATURE REVIEW

Websites

http://www.ciadvertising.org/sa/fall_05/adv380j/gaemi/final/home.htm- consumer1

from this site I have gathered the information about the consumer preference.

http://madeinatlantis.com/smartshopping/new_products_consumer_preferences.htm 2

from this site I have gathered the information about the consumer preference about

the new products that are being launched by these companies into the markets.

www.1000ventures.com/business_guide/crosscuttings/ customer _ satisfaction .html 3

from this site I have gathered the information about the customer satisfaction

http://en.wikipedia.org/wiki/Customer_satisfaction 4- From this site I have taken the

matter regarding how to measure customer satisfaction and how it is a component of

profitability.

http://www.researchandmarkets.com/reportinfo.asp?report_id=305593 5 - From this

site I have taken the matter regarding the Global Market Review Of cold drinks –

Forecasts.

. http://inventors.about.com/library/inventors/blpepsi.htm 6 .html - From this site I

have taken the matter regarding the general introduction about the cold drink industry

. http://en.wikipedia.org/wiki/Pepsi 7 I have taken the matter regarding the general

information of Pepsi group.

22

http://inventors.about.com/od/foodrelatedinventions/a/soft_drinks.htm 8

I have taken the matter regarding the various information like what are their values,

vision, and mission.

http://inventors.about.com/library/inventors/blpepsi.htm 9

I have taken the matter regarding the marketing philosophy, marketing strength,

market positioning about the Pepsi group.

. http://en.wikipedia.org/wiki/coke 10 I have taken the matter regarding the general

information of Pepsi group.

http://www.coca-cola.co.uk/Mission_Vision_and_Values/ 11 i have taken the

vision ,mission, and value of coke

http://wiki.answers.com/Q/What_is_pepsi_mission_statement 12 I have taken the

mission statement of Pepsi from this site

http://www.pepsico.com/Pep_Citizenship/sustainability/visionstrategy/

mission_values/index.cfm 13 I have taken the values statement of Pepsi from this site

BOOKS:

Suja R. Nair, Consumer Behaviour in Indian Perspectives (First Edition: 2001),

Himalaya Publishing House, Mumbai-400004. Chapter 1, PP 3-614.

“Factors influencing consumer behaviour, Decision making, Concept of consumer

behaviour” is studied to know about the various factors those effects the consumer

behaviour these can be external as well as internal”

Leon G. Schiff man and Lesli Lazar kanauk, Consumer Behaviour, Eight

Edition, Prentice Hall of India, New Delhi, PP 8,9,11,19,2015.

Study of the customer behaviour is the study of how individuals make decisions to

spend their available resources (Time, Money and Efforts) on consumption related

23

items. It includes the study what they buy, when they buy it, when they buy it, where

they buy it, how often they buy it and how often they use it.

G.C. Beri, Marketing research, Third Edition, Tata Mc graw Hill Publications

PP 95-98,23316.Matter regarding the sampling size decisions, determination of sample size and other

sampling methods.

Kothari, C.R, Research methodology, methods & techniques, new age

international ltd. Publishers, Second edition, P.no27-4217.

“Methods of data collection, collection of data through Questionnaire, collection of

secondary data” are referred before the data collection from this book” Decisions

regarding what, where, when, how much, by what means concerning an enquiry or a

research study constitute a research design

Gupta, S.P. Stastical methods and techniques, Sultan Chand & Sons.

Educational Publishers, New Delhi,P.no237-241,628-62918

From this book I have taken the matter regarding the hypothesising testing and what

should be the size of the sample for the application.

Jain,T.R, Statistics for MBA,V.K.(India) enterprises, New Delhi.,edition2006-

07,P.no 135-13719

From this book I have taken the matter regarding the multiple correlations and their

use.

Magazines

The Square Trap - Page 21 by Irving Shulman - Fiction – 197620 From this magazine I

have taken the growth of the cold drinks industry.

Eating Disorders: Time for Change - Page 8 by Mona Villapiano, Laura J. Goodman -

Psychology - 2001 21 From this magazine I have taken the data regarding the cold

drinks industry in india.

24

Living Backwards: A Transatlantic Memoir - Page 68 by Carl Dawson - Social

Science22 From this magazine I have taken the data regarding the birth of coca cola in

cold drinks industry

Operations Management: Critical Perspectives on Business and Management - Page

8823 From this magazine I have taken the data regarding the cold drinks industry in

india.

by Michael Lewis, SLACK & LEWIS, Nigel Slack - Business & Economics - 2002

Forbidden Fruit - Page 486 by Erica Spindler - Fiction – 199624 i have taken the vision

,mission, and value of coke

The Living Age - Page 429 by Making of America Project, Eliakim Littell, Robert S.

Littell - American literature – 185825 From this journal I have taken the matter

regarding the general introduction about the cold drink industry

Caribbean Islands - Page 620 by Sarah Cameron - Travel – 200326 From this

magazine I have taken the data regarding the birth of coca cola in cold drinks

industry

Bali & Lombok - Page 97 by Ryan Ver Berkmoes, Lisa Steer-Guerard - Travel –

200527 From this magazine I have taken the matter regarding the Global Market

Review Of cold drinks

Manual of Cutaneous Laser Techniques - Page 32 by Tina S. Alster - Medical –

200028

The Elements of Marketing - Page 226 by Paul Dulaney Converse - Marketing – 195229

Matter regarding the sampling size decisions, determination of sample size and other

sampling methods.

Food and Beverage Management - Page 355 by Bernard Davis, Andrew Lockwood,

Sally Stone - Business & Economics – 199830 from this journalI have gathered the

information about the consumer preference about the new products that are being

launched by these companies into the markets

Pop Fiction: The Song in Cinema by Steve Lannin, Matthew Caley - Music – 200531

25

RESEARCH METHODOLOGY

Research methodology is a way to systematically solve the problem. It may be understood

has a science of studying how research is done scientifically. In it we study the various steps

that all generally adopted by a researcher in studying his research problem along with the

logic behind them. The scope of research methodology is wider than that of research method.

Meaning of Research

Research is defined as “a scientific & systematic search for pertinent information on a

specific topic”. Research is an art of scientific investigation. Research is a systemized effort

to gain new knowledge. It is a careful inquiry especially through search for new facts in any

branch of knowledge. The search for knowledge through objective and systematic method of

finding solution to a problem is a research.

Research Design

The research design is the conceptual structure within which research is conducted; it

constitutes the blue print of the collection, measurement and analysis of the data. As search

the design includes an outline of what the researcher will do from writing the hypothesis and

its operational implication to the final analysis of data.

Research design can be of three types:

Exploratory Research Design

26

Descriptive Research Design

Experimental Research Design

The present study is Descriptive in nature, as it seeks to discover ideas and insight to bring

out new relationship. Research design is flexible enough to provide opportunity for

considering different aspects of problem under study.

Sampling and sampling design

Sampling may be defined as the selection of some part of an aggregate or totality on the basis

of which a judgment or inference about the aggregate or totality is made. In simple words, it

is the process of obtaining information about the population by examining only a part of it.

Sampling Unit : It defines the target population that will be sampled i.e. it answers

who is to be surveyed. In this study, the sampling unit is consumers of three brands of

High-end sports shoes.

Sampling Size : - It indicates the numbers of people to be surveyed. Though large

samples give more reliable results than small samples but due to constraints of time

and money, the sample size will be restricted to 100 respondents.

Sampling Design : This refers to the procedure by which the respondents should be

chosen. In this case, Stratified random sampling was done since the respondents

will classified into well defined classes or strata that were distinct from each other.

Analytical Tools

After collection of data another work necessary for any data collector is to correctly analysis

that data. So statistical tolls helps us to correctly analysis the data .As I am here using the

software for analysis of the data XLSTAT.

I will use following statistical tools:

MDS

27

Factor Analysis

Principle Component Analysis (PCA)

Multi Dimension Scaling:

Multi dimension scaling is asset of related statistical techniques often used in data

visualization for exploring similarities or dissimilarities in data. MDS is a special case of

ordination .An MDS algorithm starts with a matrix of item-item similarities, and then assigns

a location of each item in a low –dimensional space, suitable for graphing or 3D visualization

Q6.Why did you prefer this Cold drinks? Grade the following factors in Rank 1 to 5

1-Most preferred 5-Less preferred

Group1 Group2 Group3 Group4 Group5

BRAND NANE 47 44 49 52 46

TASTE 68 62 61 59 66

PRICE 53 55 51 49 56

CONSUMPTION 64 62 67 61 58

NEED 72 68 71 74 70

28

INTERPRETATION

1) At the Kruskals stress one G4 and G5 got the 1 st rank in dissimilarity, disparity and distance

that mean people lies in group 4 and in G5 have the same opinion regarding to the cold drinks

companies

2) At the stress level of 0.311 all the groups are not close to each other that means the groups

different from each other.

3) In the above multi dimensional scaling Model: Dij= Pij and the level of Convergence is

0.0001. Group 1 and Group 3 has the biggest rank so we can say that their is very less

possibility of agree ness between the two group

Q 23. Are you satisfied with the overall performance ?

Group1 Group2 Group3 Group4 Group5

Fully satisfied 4 6 3 5 4

Satisfied 5 3 6 4 5

Average 5 4 6 7 4

Less satisfied 5 3 6 4 3

Poor 2 2 1 2 1

29

Interpretation

At the Kruskals stress one G3 and G4 got the 1st rank in dissimilarity, disparity and

distance that mean people lies in group 3 and in 4 have the same opinion regarding to the

sports shoes companies.

At the stress level of 0.103 all the groups are not close to each other that means the

groups different from each other.

In the above multi dimensional scaling Model: Dij= Pij and the level of Convergence is

0.0001. Group 3 and Group 5 has the biggest rank so we can say that their is very less

possibility of agree ness between the two group

Q 8 Weight these companies according to your preference between 1 to 5?

5-Most Preferred 1-Less Preferred

30

Group1 Group2 Group3 Group4 Group5

pepsi 72 70 68 73 71

7 up 56 54 51 59 52

coke 67 62 60 59 64

mirinda 46 43 47 41 49

limca 48 51 46 50 47

Interpretation At the Kruskals stress one G1 and G3 got the 1st rank in dissimilarity, disparity and

distance that mean people lies in group 1 and in 3 have the same opinion regarding to the

sports shoes companies.

At the stress level of 0.031 all the groups are not close to each other that means the

groups different from each other.

In the above multi dimensional scaling Model: Dij= Pij and the level of Convergence is

0.0001. Group 2 and Group 4 has the biggest rank so we can say that their is very less

possibility of agree ness between the two group

Factor Analysis

The purpose of factor analysis is to describe a set of variables using a linear combination

of common underlying factors, and a variable representing the specific part of the original

variables. The variance of an original variable may be broken down into a part shared

with other variables (explained by the factors) called the communality of the variable, and

a specific part called the specific variance.

factor 1 factor 2 factor 3 factor 4 factor 5 factor 6 factor 7 factor 8 factor 9 factor 101 8 14 9 21 14 14 12 14 14 112 12 28 19 27 28 21 18 28 17 143 21 26 28 24 14 32 28 14 13 23

31

4 25 18 25 21 24 19 24 24 34 345 34 14 19 7 16 14 18 16 22 18

F1 Aware about the availability of cold drinks

do does tv and hordings contains sufficent and understandable informationF3 brand name influence on purchase behaviourF4 On what factor will you switch over to some other brand

F5 Satisfaction level with the col drinks that you have purchased the colddrinks that

F6 post purcsahe experience with cold drinks ase experience with t

he cold drinkd

F7 If other brands offer attractive schemes then you switch over to some other brand

F 8 does the cold drinks company meets the quality which is required F9 Interested to have more cold drinks in futureF10 Recommendation of cold drinks to someone

Scree plot

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

F1 F2 F3 F4axis

Eige

nval

ue

0

20

40

60

80

100C

umul

ativ

e va

riabi

lity

(%)

32

Factor loadings (axes F1 and F2: 68.64 %)

Var10Var9

Var8

Var7

Var6Var5

Var4

Var3

Var2

Var1

-1.2

-0.8

-0.4

0

0.4

0.8

1.2

-1.6 -1.2 -0.8 -0.4 0 0.4 0.8 1.2 1.6F1 (40.29 %)

F2 (2

8.35

%)

Variables (axes D1 and D2: 65.64 %)after Varimax rotation

Var10

Var9

Var8 Var7

Var6

Var5

Var4

Var3

Var2

Var1

-1

-0.75

-0.5

-0.25

0

0.25

0.5

0.75

1

-1 -0.75 -0.5 -0.25 0 0.25 0.5 0.75 1D1 (36.42 %)

D2

(29.

22 %

)

Interpretation:-

Factor analysis selects the factor f1 & f9 are most important they are avaibility of the soft

drinks & they are interested in purchase of cold drinks in future. the another factor is the

brand name the customers like most. In all 5 factors are selected which are very important

33

Principal component analysis:-

Principal component analysis (PCA) expresses a set of variables as a set of linear

combinations of factors that are not correlated between them; these factors represent an

increasingly small fraction of the variability of the data. This method allows you to

represent the original data (observations and variables) with fewer dimensions than the

original, while keeping data loss to a minimum. Representing the data in a limited number

of dimensions (2 dimensions in this case) greatly facilitates analysis.

PCA differs from factor analysis in that it creates a set of factors that have no correlation

to one another; this corresponds to the special case where all communalities are equal to 1

(null specific variance).

Scree plot

0

1

2

3

4

5

6

F1 F2 F3 F4axis

Eige

nval

ue

0

20

40

60

80

100

Cum

ulat

ive

varia

bilit

y (%

)

34

Variables (axes F1 and F2: 90.10 %)

Var10

Var9

Var8

Var7

Var6

Var5

Var4Var3

Var2

Var1

-1

-0.75

-0.5

-0.25

0

0.25

0.5

0.75

1

-1 -0.75 -0.5 -0.25 0 0.25 0.5 0.75 1F1 (50.09 %)

F2 (4

0.00

%)

Interpretation:- as the PCA make the cross checking of the factor analysis so in the

cross checking the factor 3&7 are found most important which influence the customers

most while purchasing the cold drinks

Data collection:

There are two types of data these are:

PRIMARY DATA: - The primary data are those, which are collected afresh and for

the first time. And thus happened to be original in character. Sources of primary data are:

Questionnaire

Observation

Personal interview

SECONDARY DATA: -

The secondary data on the other hand, are those which have already been collected by

Someone else and which have already been passed through the statistical processes.

35

Sources are:. Books, magazines, newspaper, publications.

Hypothesis TestingChi-square test is used when the set of observed frequencies obtained after experimentation

have to be supported by hypothesis or theory. The test is known as X2- test of goodness of fit

and is used to test if the deviation between observation (experiment) and theory may be

attributed to chance (fluctuations of sampling).χ2 also enables us to explain whether or not

two attributes are associated or related to each other A)

Hypothesis

H0 = after sale service and consumer behaviour are Correlated.

H1= after sale service and consumer behaviour are not Correlated.

36

Procedure:

(1) Set up the null hypothesis that there is no significant difference

between the observed and expected value.

(2) We compute the value of CHI- square by using the formula

CHI-square = ∑ , χ2=Σ (( Oi- Ei)2/Ei)

O- Observed value

E- Expected value

Degree of freedoms=(R-1)(C-1)

Level of significance=5

By applying Chi-Square……

OBSERVED

Price influence on cold drinks

Brands High High Avg. Average Avg. Low Low

mirinda 2 4 6 2 3

pepsi 3 4 5 3 2

coke 4 7 7 7 3

37

7 up 2 3 3 4 2

Any other 5 6 7 2 4

Total 16 24 28 18 14

As I have taken the sample size of 100 so it is assumed that expected value for each response should

be equal to 20.

Observed

value(o)

Expected

value(E)

O-E (O-E)2 (O-E)2/E

16 20 -4 16 0.80

24 20 4 16 0.80

28 20 8 64 3.20

18 20 -2 4 0.20

14 20 -6 36 1.80

2 Calculated = 6.80

Degree of freedom (V) = (r-1) (c-1) = (5-1(5-1) =16

Level of significance=5%

for V =16 2 0.05 table value = 26.2962

Since the tabular value at 5% level of significance is more then the calculated value of chi. so

the null hypothesis has been rejected.

Now there is a significant relationship between the price and the cold drinks purchase

38

Limitations of the study

Limited area The primary limitation was the limited area of the research so due to small area out of the

country the results may not be completely correct.

Small sample size The secondary limitation was the small size of customer so due to small samples out of

big universe the results may not be completely correct

Biased responsesThe chances of personal prejudice and bias are possible at respondent level. Also the

people were quite hesitant in inquiring exact data regarding their income level.

39

Time availability

Most of people were at their work they did not have time to give all replies. Also time period

was very short.

Finding and analysis

Q 1. Which cold drinks are you drinking?

response respondent

pepsi 36

coke 44

40

any other 20

0

10

20

30

40

50

1

response

pepsi

coke

any other

. Only 36% out of the total sample drinks pepsi, 44% drinks coke &20% of the people drink

other cold drinks

Q 2. What type of pack of cold drinks are you using?

response respondent

200 ml 17

500 ml 42

1 ltr 30

Any other 11

41

respondent

01020304050

200ml

500ml

1 ltr anyother

responses

perc

enta

ge

respondent

Out of total 17% of people uses the 200 ml cold drinks, 42% people use 500ml pack, 30 %

people use 1ltr pack & 11%uses the other packs of cold drinks

Q 3. Which brand of cold drinks are you drinking?

response respondent

thumps up 15

mirinda 28

slice 21

7 up 11

42

any other 25

respondent

0102030

responses

perc

enta

ge

respondent

15% of people drinks the thumps up 28%, people drinks mirinda , 11 % of the people uses

the 7 up & , 25% o the people uses the other brands of the cold drinks and 21% people drinks

slice

Q 4. How did you come to know about these brands of cold drinks?

response respondent

Through friends 27

43

Family members 20

Advertisement 30

Publicity 21

any other 12

05

101520253035

respondent

responses

perc

enta

ge

Through friends

Familymembers

Advertisement

Publicity

any other

When its comes to knowledge about the cold drinks then 21% of the respondents got

aware through publicity and 30% through advertisement. 20% respondents got aware

through their family members.12% have come to know from other sources.

Q 5. Which factor influence you more to purchase the cold drinks?

response respondent

price 20

scheme 27

Brand name 25

taste 26

need 12

44

05

1015202530

respondent

responses

perc

enta

ge

price

scheme

Brand name

taste

need

The Price and taste Factors influence mostly People. It means when the people are going

for purchase the cold drinks then they are mostly influenced by these two.25% of the

respondents are influenced by the brand name of these cold drinks company.12% of the

respondents are considering need when they are going for purchase of the cold drinks

Q7. Are you aware about the all scheme available in the market?

Response Fully Aware Aware Neutral Less Aware Not So

much

Percentage 34% 25% 21% 12% 8%

45

34% of the respondents are fully aware about the cold drinks that are available in the

market.40-45% of the people are aware and some of them are neutral regarding the

awareness.12% of the people are less aware about the availability of these cold drinks.8%

people are not so much aware.

Q 8. Weight these brands according to your preference

response respondent

Pepsi 23

7 up 14

Coke 24

mirinda 31

limca 8

46

05

101520253035

respondent

RESPONSES

PERC

ENTA

GE

Pepsi

7 up

Coke

mirinda

limca

23% of the customers are preferring Pepsi while they are going for purchase,24% prefer

coke and 31% prefer mirinda. 14% people prefer the 7 up & 8% people prefer the other

brands

Q 9. Arrange these companies according to you which company gives the most benefits to

customers?

response respondent

PEPSI 43

COKE 57

47

0102030405060

1

RESPONSES

PERC

ENTA

GE

PEPSI

COKE

Now when its come to giving benefits to customers coke here also occupying the first

place, 57% people agree with this. Only 43% people think that Pepsi provides benefits to

customers..

Q 10. Which type of media influences your purchase behaviour?

response respondent

TV 35

HORDING 13

NEWSPAPERS 17

MAGAZINE 27

48

WALL

PAINTING

8

0

10

20

30

40

respondent

RESPONSES

PERC

ENTA

GE

TV

HORDING

NEWSPAPERS

MAGAZINE

WALLPAINTING

When its comes to the type of media which influences the purchase behaviour of the

customer, then it is t.v.35% of the sample thinks that they are influenced by T.V when

they are going to purchase.27% are influenced by Magazine. Newspaper, Hoarding, and

wall painting have very small influence on the purchase behaviour.

Q 11. Do TV and hoardings contain sufficient and understandable information?

response respondent

Fully satisfied 14

Satisfied 18

Average 26

49

Less satisfied 28

Dissatisfied 14

05

1015202530

respondent

RESPONSES

PERC

ENTA

GE

Fully satisfied

Satisfied

Average

Less satisfied

Dissatisfied

TV and hoardings are available at the Magazine. outlet. These are important for some

people, some may how do not show much interest in these. Only 32% of the total sample

are satisfied about the availability of sufficient information in these.42% of the

respondents think that these does not contain sufficient information

Q 12. Who influenced you more in your buying decision of cold drinks

response respondent

Self 23

Family member 31

Friends/relatives 46

50

0

10

20

30

40

50

respondent

responses

perc

enta

ge

Self

Family member

Friends/relatives

When a person is going to purchase something then a no. of items that reflects a

consumer. Here when a person is going to purchase cold drinks then Friends/relatives

play a very vital role.46% of the sample thinks that they are mostly influenced by the

Friends/relatives. After that Family members and the self also influenced the purchase

decision.

Q 13. In your opinion, what role advertisement plays?

Response Provides

important

Give

information

Creates

awareness

Convenience

in purchase

Misleading

51

details

Percentage 24% 18% 28% 18% 12%

Out of the total sample 24% of the respondents think that advertisements provides

important details that proved to be very useful when they are going to purchase. Some are

saying that it provides awareness and it is convenience in purchase.8% of the people are

saying that advertisement leads to misguide them while they are going for purchase.

Q 14 Which Company’s Advertisement you like most:

response respondent

52

PEPSI 59

COKE 41

respondent

020

4060

80

PEPSI COKE

responses

perc

enta

ge

respondent

As we all know that advertisement plays a very important role. So now a day all the

companies whether they are Indian or foreign they are going for this. 59% of the people

like the advertisement of Pepsi. Coke Ad is not so much familiar among the

respondents.41% of the sample like the advertisements of the coke

Q 15. Where you can see that Advertisement: -

53

response respondent

T.V. 64

Road shows 16

Posters 8

internet 4

Hoardings 8

respondentT.V.

Road shows

Posters

internet

Hoardings

Companies are doing their advertisement campaign on different sources whether on T.V,

Internet, Road shows, Hoarding etc.64% of the total sample are seeing these advertisements

on T.V.In case of Internet and Hoarding they have their less impact on the final consumer

when they are going for purchase.

Q 16. How much you are involved in the various promotional activities by cold drinks

companies?

response respondent

More 18

54

involvement

Normal

involvement

27

Less

involvement

32

No

involvement

23

respondent Moreinvolvement

Normalinvolvement

Lessinvolvement

No involvement

Involvement means how much the person takes interest in buying a particular thing.

27% of the sample they are normally involved in buying a pair of sports shoes. 32% shows

less involvement.23% of the sample are not involved at all. They simply go to the shop and

purchase the cold drinks

17 Are you aware about different promotion activity done by cold drinks companies?

response respondent

55

YES 64

NO 36

Promotion activities are those, which are being done by the companies for increasing their

sales, increasing market share, for creating awareness. 64% of the respondents are aware

about the different promotion activities done by the various cold drinks companies. On the

other hand 36% of the sample does not aware about these activities

Q 19.Which of the following is most preferred by you during purchase of cold drinks?

response respondent

Price 19

56

brand name 25

taste 28

consumption 19

respondent Price

brand name

taste

consumption

Need

When it comes to purchasing of cold drinks, the customers prefer various kinds of schemes

like price, coupons, warranty etc. The sample that I have taken 28% of the respondents prefer

taste scheme while they are going for purchase. 19% of the respondents prefer price while

they are going for purchase. 25% of the respondents prefer brand name while they are going

for purchase.

Q 20. What extent brand name influences your purchase of soft drink?

response respondent

High 19

High Average 25

Average 28

57

Average Low 19

Average Low 9

05

1015202530

respondent

responses

perc

enta

ge

High

High Average

Average

Average Low

Average Low

Mostly Respondents are influenced by the brand name when they are going to purchase the

cold drinks.19% of the respondents think that they are highly influenced by the brand name

when they are going to purchase.53% of the sample thinks that they are influenced at high

average and at the average level.28% of the sample does not have any influence of price at

their purchasing.

Q 21. If other brands offering attractive schemes, will you change to other brand?

response respondent

Sure 18

Often 24

58

Neutral 28

Not Sure 18

Never 12

0 10 20 30

resp

onde nt

responses

per

cen

tag e

Never

Not Sure

Neutral

Often

Sure

Now a day it is the time of competition. So every company whether it is domestic or foreign

they want to join this competition. So each and every company is coming with a no. of

promotion schemes. If the other companies comes up with more attractive schemes then their

present then 42% think that they will shift to other company.28% remain neutral at this.12%

think that they will purchase cold drinks from the same company. These are hard core loyal

to the company.

Q 22. On what factor will you switch over to some other brands of cold drinks?

Response respondent

Price 23

59

brand name 24

Taste 32

Promotional Scheme 7

Advertisement 21

PRICE

BRAND NAME

TASTE

PROMOTIONALSCHEME

ADVERTISEMENT

When it comes to switch over from one brand to the other brand then the respondents mostly

consider price and the taste. Taste is most important in case of the cold drinks because

sometimes the people buy these cold drinks only on the basis of these.32% people going for

these services. Brand name also plays an important role.24% of the sample will switch over

with a brand name. Promotional Scheme also plays an important role. 7% thinks that they

will switch over to other brand with these promotional schemes.

Q 23. Are you satisfied with the overall performance?

response respondent

60

Fully satisfied 22

Satisfied 23

Average 26

Less satisfied 21

dissatisfied 8

05

1015202530

respondent

responses

perc

enta

ge

Fully satisfied

Satisfied

Average

Less satisfied

dissatisfied

Satisfaction plays a very important role to the consumers as well as to the sellers. The sample

that I have taken shows that they most of them are satisfies with the cold drinks that they

have purchased.65 to 70% of the sample are Fully satisfied, Satisfied and average satisfied

with these cold drinks.29 % of the sample somehow are not satisfied with the cold drinks

whatever the reason may be like price, taste, promotional schemes etc.

Q 24. How is your post purchase experience with your past soft drinks?

61

response respondent

Excellent 14

Very good 19

Good 32

Average 21

Poor 14

05

101520253035

respondent

responses

perc

enta

ge

Excellent

Very good

Good

Average

Poor

Post purchase behaviour means how the consumer reacts after the purchasing of sports shoes.

This is the behaviour on the basis of which the consumer repurchases.33% of the sample

thinks that their post purchase behaviour is very good, means the product that they wanted

from the seller meets their needs.53% of the sample that their post purchase behaviour is

good or average.14% of the sample thinks that their post purchase behaviour is poor

Q 25. How much you consume the cold drinks?

response respondent

62

Daily 37

in the week 43

On any

occasion

20

respondent

0

10

20

30

40

50

Daily

in the week

On anyoccasion

People consume the cold drinks in regular basis. They consume these when they felt

trusty.37% people consume the cold drinks daily. 43%people consume on the interval basis

or in the week etc. 20% people takes on the any occasion

Findings

63

Total volume reached 523,000 million litres in 2007, giving a global per capita

consumption of around 67.5 litres per year.

North America is the largest soft drinks market with 27 per cent of total world soft

drink sales and a consumption of 48 gallons per person per year (192 litres/ person /

year).

The market growth rate is presently 7-8% per annum.

44% of the people Prefer coke. 36% of the people Prefer Pepsi. 20% of the people

prefer other cold drinks

When it comes to know about awareness 21% comes through Publicity, 30% sample

comes across through Advertising 27% through friends &20% through family

members.

Brand name and taste are the most important factor which influences the purchase of

cold drinks.53% of the sample influence with these.

59% OF the samples are fully aware about the availability of the cold drinks that are

in the market.

When it comes to giving benefits to customers 57% sample thinks that coke provides

most.

Among the media T.V and magazine plays the very important Role.35% of the

sample are influenced by T.V.

64

64% of the respondents are aware about the different promotion activities done by the

various cold drinks company

28% of the respondents prefer taste scheme while they are going for purchase. 25% of

the respondents prefer brand name

50% of the sample thinks that they are influenced at high average and at the average

level.32% of the sample does not have any influence of price at their purchasing.

65 to 70% of the sample are fully satisfied, Satisfied and average satisfied with these

cold drinks.29 % of the sample somehow are not satisfied with the cold drinks.

BIBLIOGRAPHY

65

WEBSITES-

1. http://inventors.about.com/od/foodrelatedinventions/a/soft_drinks.htm

2. http://inventors.about.com/library/inventors/blpepsi.htm

3. http://inventors.about.com/od/cstartinventions/a/coca_cola.htm

4. http://en.wikipedia.org/wiki/Pepsi

5. http://in.news.yahoo.com/040325/137/2c759.html

6. http://www.epa.gov/epaoswer/hazwaste/test/pdfs/8141a.pdf

7. http://www.chinashoesexpo.com/en/news0507_6.asp

8. http://www.coca-cola.co.uk/Mission_Vision_and_Values/

9. http://wiki.answers.com/Q/What_is_pepsi_mission_statement

http://www.pepsico.com/Pep_Citizenship/sustainability/visionstrategy/

mission_values/index.cfm

BOOKS:

1) Suja R. Nair, Consumer Behaviour in Indian Perspectives (First Edition: 2001),

Himalaya Publishing House, Mumbai-400004. Chapter 1, PP 3-6.

2) David L. Loudon and Abert J. Della Bitta, Consumer Behaviour and concepts and

applications, Fourth Edition, Tata Mc Graw Hill, New Delhi, PP 5-8,9,19 .

3) Leon G. Schiffman and Lesli Lazar kanauk, Consumer Behaviour, Eight Edition,

Prentice Hall of India, New Delhi, PP 8,9,11,19,20.

4) Frank R. Kardes, Consumer Behaviour and Managerial decision making, Second

Edition, PP 23,47.

5) Murray R. Spiegel, Theory and Problem of Statistics, Third edition, Tata Mc Graw

Hill Publication, Chapter 12, 14.

6) S.P.Gupta and M.P. Gupta, Business Statistics, Twelth Edition, Sultan Chand and

Sons Publications. PP 237-241,628-629.

66

7) T.R. Jain and Dr. S.C. Aggarwal, Statistics For M.B.A,

8) G.C. Beri, Marketing research, Third Edition, Tata Mc graw Hill Publications PP 95-

98,233.

9) Donald S. Tull and Del Hawkins, Marketing Research Measurements and Methods,

Sixth Edition, PP 49, 330, 355, Chapter 22.

10) Philip Kotler, Principles of Marketing, Ninth Edition. PP 8,9.

11) Kothari C.R., Research Methodology Methods and Techniques (Second Edition) New

Age International Publishers, Ansari Road, Daryaganj, New Delhi-110002. Chapter 4,

Page 55-58. Chapter 6, Page 95,100,111.

12) Business Research Methodology (Eighth Edition) by Donald R. Cooper and Pamela

S. Schindler, Tata McGraw Hill Publishing Company Limited, New Delhi. Chapter 3,

Page 82, 86, 87. Chapter 4, Page 101,102.

Journal & Magazine

The Square Trap - Page 21 by Irving Shulman - Fiction – 1976

Eating Disorders: Time for Change - Page 8 by Mona Villapiano, Laura J. Goodman -

Psychology - 2001 –

Living Backwards: A Transatlantic Memoir - Page 68 by Carl Dawson - Social

Science

Operations Management: Critical Perspectives on Business and Management - Page

88

by Michael Lewis, SLACK & LEWIS, Nigel Slack - Business & Economics - 2002

Forbidden Fruit - Page 486 by Erica Spindler - Fiction – 1996

The Living Age - Page 429 by Making of America Project, Eliakim Littell, Robert S.

Littell - American literature – 1858

Caribbean Islands - Page 620 by Sarah Cameron - Travel – 2003

Bali & Lombok - Page 97 by Ryan Ver Berkmoes, Lisa Steer-Guerard - Travel – 2005

Manual of Cutaneous Laser Techniques - Page 32 by Tina S. Alster - Medical – 2000

Salaula: The World of Secondhand Clothing and Zambia - Page 174 by Karen

Tranberg Hansen - Social Science

The Elements of Marketing - Page 226 by Paul Dulaney Converse - Marketing – 1952

Food and Beverage Management - Page 355 by Bernard Davis, Andrew Lockwood,

Sally Stone - Business & Economics – 1998

Pop Fiction: The Song in Cinema by Steve Lannin, Matthew Caley - Music – 2005

67

Annexure

Questionnaire

68

Name of the respondent: - ………………

Age:-

Sex:-

Occupation:-………………………..

Income level:-

1. Which cold drinks are you drinking?

Pepsi La coke

Any other

2. What type of pack of cold drinks are you using?

200ml 500ml

1 ltr any other

3. Which brand of cold drinks are you drinking?

thumps up Mirinda

slice Id 7up

any other

2. How did you come to know about these brands of cold drinks?

Through friends Family members

Advertisement Any other

Publicity

3. Which factor influence you more to purchase the cold drinks–

Price Scheme

Brand Name Taste

69

6. Why did you prefer this service provider? How do you grade the following qualities?

1 2 3 4 5

Price

Brand Name

taste

need

consumption

7. Are you aware about the all scheme available in the market?

Fully aware Aware Less aware

Neutral Not so much

8. weight these brands according to your preference?

pepsi

7up

coke

mirinda

limca

9. Arrange these companies according to you which company gives the most benefits to

customers?

pepsi

coke

10. Which type of media influences your purchase behaviour?

T.V Hording

Newspaper Magazine

Wall painting

70

11. Do TV and hoardings contain sufficient and understandable information?

Fully satisfied Satisfied

Average Less satisfied

Dissatisfied

12. Who influenced you more in your buying decision of cold drinks?

Self

Family member

Friends/relatives

13.. In your opinion, what role advertisement plays?

Provides important details Give information

Creates awareness Convenience in purchase

Misleading

14 Which Company’s Advertisement you like most:

pepsi coke

15. Where you can see that Advertisement: -

T.V ii Road shows

Posters internet

Hoardings

16. How much you are involved in the various promotional activities by cold drinks

companies?

More involvement Normal involvement

Less involvement No involvement

71

17 Are you aware about different promotion activity done by cold drinks companies?

Yes No

18 How many other soft drinks do you know? Specify name.

19. Which of the following is most preferred by you during purchase of cold drinks?

Price brand name

taste consumption

Need

20. What extent brand name influences your purchase of soft drink?

High High Average

Average Average Low

Low

21. If other brands offering attractive schemes, will you change to other brand?

Sure Often

Neutral Not Sure

Never

22. On what factor will you switch over to some other brands of cold drinks?

price brand name

taste Promotional Scheme

72

23. Are you satisfied with the overall performance?

Fully satisfied Satisfied

Average Less satisfied

Poor

24. How is your post purchase experience with your past soft drinks?

Excellent Very good

Good Average

Poor

25. How much you consume the cold drinks?

Daily in the week

On any occasion

26. Does the soft drinks company meet the quality consistency as

Offered / required?

Fully satisfied Satisfied

Average Less satisfied

Dissatisfied

27. Are you interested to have the same cold drinks in future?

Sure Often

Neutral Not Sure

73

Never

28. Would you like to recommend the cold drinks brand to your

Friend/Relatives?

Highly Recommend Recommend

Neutral Not Recommend

Never Recommend

Multi Dimension Scaling

Q6.Why did you prefer this Cold drinks? Grade the following factors in Rank 1 to 5

1-Most preferred 5-Less preferred

74

Group1 Group2 Group3 Group4 Group5

BRAND NANE47 44 49 52 46

TASTE 68 62 61 59 66

PRICE 53 55 51 49 56

CONSUMPTION 64 62 67 61 58

NEED 72 68 71 74 70

XLSTAT 7.1 - Multidimensional Scaling (MDS) - 3/27/2008 at 5:16:18 PM

Similarity matrix (converted to a dissimilarity matrix): workbook = Book1 / sheet = Sheet1 /

range = $B$2:$F$6 / 5 rows and 5 columns

Uniform weighting (default)

No missing values

Metric Multidimensional Scaling

Multidimensional Scaling model: absolute

Stress used for the results: Kruskal's stress-1

Dimension of the representation space: 5

Repetitions: 10

Seed of the pseudo-random numbers generator: 3757803258

Iterations: 50

Convergence: 0.0001

Space with 5 Dimensions:

Model: Dij= Pij

75

Observation coordinates:

Observation Dim1 Dim2 Dim3 Dim4 Dim5

group1 2.529 0.068 5.404 2.611 1.478

group 2 -2.446 0.143 7.192 2.369 -0.002

group 3 -0.912 -0.196 -8.968 -3.836 -1.297

group 4 0.489 -0.002 -2.741 -0.873 -0.187

group 5 0.340 -0.012 -0.887 -0.271 0.009

Distances measured in the representation space:

  group1 group 2 group 3 group 4 group 5

group1 0 5.496 16.363 9.243 7.405

group 2 5.496 0 17.430 10.856 8.945

group 3 16.363 17.430 0 7.126 9.019

group 4 9.243 10.856 7.126 0 1.966

group 5 7.405 8.945 9.019 1.966 0

Ideal distances calculated using the model (disparities):

  group1 group 2 group 3 group 4 group 5

group1 0 6.000 21.000 10.000 2.000

group 2 6.000 0 19.000 12.000 6.000

group 3 21.000 19.000 0 7.000 3.000

group 4 10.000 12.000 7.000 0 0.000

group 5 2.000 6.000 3.000 0.000 0

In the case of the absolute model, the disparities are equal than the dissimilarities

Residual distances:

  group1 group 2 group 3 group 4 group 5

group1 0 -0.504 -4.637 -0.757 5.405

group 2 -0.504 0 -1.570 -1.144 2.945

76

group 3 -4.637 -1.570 0 0.126 6.019

group 4 -0.757 -1.144 0.126 0 1.966

group 5 5.405 2.945 6.019 1.966 0

Comparative table:

Pair Dissimilarity Disparity Distance

Dissimilarity

rank

Disparity

rank

Distance

rank

group 4 - group 5 0.000 0.000 1.966 1 1 1

group1 - group 5 2.000 2.000 7.405 2 2 4

group 3 - group 5 3.000 3.000 9.019 3 3 6

group 2 - group 5 6.000 6.000 8.945 4 4 5

group1 - group 2 6.000 6.000 5.496 4 4 2

group 3 - group 4 7.000 7.000 7.126 5 5 3

group1 - group 4 10.000 10.000 9.243 6 6 7

group 2 - group 4 12.000 12.000 10.856 7 7 8

group 2 - group 3 19.000 19.000 17.430 8 8 10

group1 - group 3 21.000 21.000 16.363 9 9 9

In the case of the absolute model, the disparities are equal than the dissimilarities

77

78

Summary of repetitions:

Repetition Iterations

Initial

stress

Fin.

stress

1 20 0.715 0.311

2 22 0.684 0.311

3 21 0.656 0.311

4 21 0.674 0.311

5 22 0.767 0.311

6 21 0.675 0.311

7 19 0.641 0.311

8 22 0.757 0.311

9 22 0.656 0.311

10 21 0.690 0.311

In bold, repetition corresponding to the best solution that XLSTAT found

INTERPRETATION

4) At the Kruskals stress one G4 and G5 got the 1 st rank in dissimilarity, disparity and distance

that mean people lies in group 4 and in G5 have the same opinion regarding to the cold drinks

companies

5) At the stress level of 0.311 all the groups are not close to each other that means the groups

different from each other.

79

6) In the above multi dimensional scaling Model: Dij= Pij and the level of Convergence is

0.0001. Group 1 and Group 3 has the biggest rank so we can say that their is very less

possibility of agree ness between the two group

Q 23. Are you satisfied with the overall performance ?

Group1 Group2 Group3 Group4 Group5

Fully satisfied 4 6 3 5 4

Satisfied 5 3 6 4 5

Average 5 4 6 7 4

Less satisfied 5 3 6 4 3

Poor 2 2 1 2 1

XLSTAT 7.1 - Multidimensional Scaling (MDS) - 3/26/2008 at 3:42:10 PM

Similarity matrix (converted to a dissimilarity matrix): workbook = Book1 / sheet = Sheet2 /

range = $B$2:$F$6 / 5 rows and 5 columns

80

Uniform weighting (default)

No missing values

Metric Multidimensional Scaling

Multidimensional Scaling model: absolute

Stress used for the results: Kruskal's stress-1

Dimension of the representation space: 5

Repetitions: 10

Seed of the pseudo-random numbers generator: 40317230

Iterations: 50

Convergence: 0.0001

Space with 5 Dimensions:

Model: Dij= Pij

Observation coordinates:

Observation Dim1 Dim2 Dim3 Dim4 Dim5

G1 -0.104 0.166 0.303 0.225 0.597

G2 0.896 0.900 0.259 0.168 0.775

G3 -1.000 -0.348 0.447 0.341 0.740

G4 -1.079 -0.520 0.321 0.252 0.446

G5 1.288 -0.198 -1.330 -0.987 -2.558

Distances measured in the representation space:

81

  G1 G2 G3 G4 G5

G1 0 1.255 1.059 1.202 4.020

G2 1.255 0 2.284 2.457 4.041

G3 1.059 2.284 0 0.382 4.588

G4 1.202 2.457 0.382 0 4.358

G5 4.020 4.041 4.588 4.358 0

Ideal distances calculated using the model (disparities):

  G1 G2 G3 G4 G5

G1 0 1.000 1.000 1.000 4.000

G2 1.000 0 2.000 3.000 4.000

G3 1.000 2.000 0 0.000 5.000

G4 1.000 3.000 0.000 0 4.000

G5 4.000 4.000 5.000 4.000 0

In the case of the absolute model, the disparities are equal than the dissimilarities

Residual distances:

  G1 G2 G3 G4 G5

G1 0 0.255 0.059 0.202 0.020

G2 0.255 0 0.284 -0.543 0.041

G3 0.059 0.284 0 0.382 -0.412

G4 0.202 -0.543 0.382 0 0.358

82

G5 0.020 0.041 -0.412 0.358 0

Comparative table:

Pair Dissimilarity Disparity Distance

Dissimilarity

rank

Disparity

rank

Distance

rank

G3 - G4 0.000 0.000 0.382 1 1 1

G1 - G4 1.000 1.000 1.202 2 2 3

G1 - G2 1.000 1.000 1.255 2 2 4

G1 - G3 1.000 1.000 1.059 2 2 2

G2 - G3 2.000 2.000 2.284 3 3 5

G2 - G4 3.000 3.000 2.457 4 4 6

G4 - G5 4.000 4.000 4.358 5 5 9

G1 - G5 4.000 4.000 4.020 5 5 7

G2 - G5 4.000 4.000 4.041 5 5 8

G3 - G5 5.000 5.000 4.588 6 6 10

In the case of the absolute model, the disparities are equal than the dissimilarities

83

Summary of repetitions:

Repetition Iterations

Initial

stress

Fin.

stress

84

1 27 0.559 0.103

2 28 0.569 0.103

3 27 0.614 0.103

4 26 0.541 0.103

5 28 0.573 0.103

6 27 0.620 0.103

7 29 0.563 0.103

8 27 0.648 0.103

9 28 0.575 0.103

10 27 0.616 0.103

In bold, repetition corresponding to the best solution that XLSTAT found

Interpretation

At the Kruskals stress one G3 and G4 got the 1st rank in dissimilarity, disparity and

distance that mean people lies in group 3 and in 4 have the same opinion regarding to the

sports shoes companies.

At the stress level of 0.103 all the groups are not close to each other that means the

groups different from each other.

In the above multi dimensional scaling Model: Dij= Pij and the level of Convergence is

0.0001. Group 3 and Group 5 has the biggest rank so we can say that their is very less

possibility of agree ness between the two group

85