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Analysing the impact of advertising in the soft drink market of Mauritius: The
case study of Coca-Cola

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2012 ISBM International Symposium
March 30-April 1, 2012, SkyCity Marriott Hotel, Hong Kong

Analysing the Impact of Advertising in the Soft Drink market of

Mauritius:
The Case Study of Coca-Cola
Davina Madhavi Chinnapen-Sathana, Vanisha Oogarah-Hanumanb and Rooma Roshnee
Ramsaran-Fowdarc
a
CIM Global Business, Les Cascades, Edith Cavell Street, Port-Louis, Mauritius.
b
Faculty of Law and Management, University of Mauritius, Reduit, Mauritius.
c
School of Management and Marketing, CQUniversity, Building 34, Bruce Highway,
Rockhampton QLD 4702, Australia.

ABSTRACT

In an era of high degree of competitiveness, if there is one prerequisite to give businesses

a competitive edge, it is the need to advertise effectively and efficiently. Since so much
money is being devoted to advertising, analysing its impact remains vital for firms,
especially for those forming part of the collusive oligopolistic market of soft beverages,
where advertising helps in making the difference in the market place. This paper mainly
analyses the degree of influence advertising has on consumers‟ buying behaviour, with
particular reference to Coca- Cola advertisements. The methodology used in the study
consisted of a survey on a sample of 150 respondents, and the finding revealed the
positive impact of advertising on consumption level in the soft beverage market of
Mauritius. It was concluded that nowadays, it is important to sustain customer‟s loyalty to
a company‟s product, hence the need to develop appropriate advertising strategies like
brand equity to prevent consumers from turning unloyal to the brand.

Keyword: Advertising, brand, impact, soft drinks industry.

1. Introduction
Like in most countries, in Mauritius, giant oligopolistic companies such as Coca-Cola or
Pepsi Cola are pouring millions of rupees every year in advertising, for they believe it is
an unfailing if not a reliable way to promote their products, their brands, their
organisation and to reap massive profits. Since so much money is being devoted to
advertising, analysing its impact remains vital for firms, especially for those forming part
of the collusive oligopolistic market of soft beverages, whereby advertising helps in
making the difference in the market place. Does advertising really have an impact on
consumers nowadays? If advertising is not prompting consumers to purchase a soft
beverage, why is the Coca-Cola Company spending so much money on advertising?
This study will contribute to the academic literature by revealing the degree of influence
advertising that has on consumers‟ buying behaviour. No research has been previously
carried out to uncover the role of Coca-Cola advertising in purchasing decisions. The
study will also help to position Coca-Cola advertising against Pepsi advertising in the
Mauritian market and to understand the views and perceptions of Mauritians on Coca-
Cola advertising.

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The structure of the paper is as follows. The paper first reviews the fundamentals and
core concepts of advertising. The main research approaches, instruments to be adopted
and the types of data to be collected for this specific research are then outlined in the
methodology section. This is followed by sections on data analysis and findings,
discussion and conclusion.

2. Literature Review
2.1. The purpose and importance of advertising
The immediate purpose of advertising as Rodger (1996) clearly described, is not to
physically bring buyers and sellers together but to communicate sales motivating
information, ideas, and suggestions to particular target prospects or consumers with a
view to increase the likelihood of a sale. According to Kotler and Keller (2006),
advertising can be used to create brand awareness and provide specific information about
new products and services (informative advertising) and to encourage consumers to buy
the product being advertised rather than those of competitors (persuasive advertising). To
Guiltinan and Paul (1991), advertising can be used to reassure customers that they are
using the best product or service (reinforcement advertising).
It is important for advertisers to understand the advertising communication process so as
to establish the advertising objectives in line with the receiver‟s response. In addition,
advertisers can carefully select the most appropriate media mix to deliver the message to
the target audience. Indeed, if consumers view communication in a specific medium as
disturbing, it may negatively change the attention to and the perception of the message
(Heinonen and Strandvik, 2005). Furthermore, in advertising, the element of feedback
is important to ensure that the target audience has received the message accurately.

2.2 Standardisation versus localisation

Coca-Cola is a global brand which is promoted in several countries. Since the company is
operating on the global platform, there is need to find out the most effective advertising
strategies. Marketers are faced with two advertising strategies here: standardisation
versus localisation. One of the benefits of standardisation is the lowering in costs through
economies of scale. In addition, if a company is using the standardisation strategy, it
means that it will be communicating the same ad message in many countries, thus easing
the coordination process of the marketing tools and avoiding confusion among consumers
who travel frequently (Papavassiliou and Stathakopoulos, 1997). However, proponents
of localisation argue that there is a need to localise because of the existence of differences
in buyers‟ behaviour, disparities in purchasing power and the different competitive
situations of different countries (Schuh, 2007). Hence, advertisers need to consider that
buyer behaviour is influenced by the country‟s culture, which is not the same everywhere.
By integrating the message locally, the ad has a greater chance of success. If not managed
properly, this strategy may nevertheless result in a loss of the brands‟ global image (Anon,
2006).

Both strategies have their own advantages. The best strategy is difficult to determine.
However, “the reality of global advertising suggests that the contingency approach is the
best” (Wells et al., 2003, p.517). This represents a combination of factors influencing the

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standardisation and localisation approach. The contingency approach is the one adopted
by Coca-Cola where it is known as the “glocal” approach - globalisation and localisation
(Anon, 2006).

2.3 Advertising and consumer behaviour

The advertising message has a great influence on the decision-making process of
consumers. Normally when consumers are exposed to advertising, a portion of their long-
term memory is activated thereby, stimulating the buying behaviour (Papavassiliou,
1989). Consumers may process the advertising message in two ways. They may either
process the information to come up with an overall evaluation of the brand being
advertised or they may simply enjoy the entertainment facet, thus hindering the
evaluative aspect of the ad (Papavassiliou, 1989).

2.4 Branding and consumer behaviour

According to Meenaghan (1995), consumers are influenced by the intrinsic values, which
are centred on the quality of the product and the extrinsic values, which originate from
the brand imagery created by advertising. Coca-Cola is the leader in the soft beverage
industry and this success is mainly attributed to the company‟s ability to build relevant
and appealing images around the product, hence creating a brand difference (Kotler and
Keller, 2006). In fact, to become the market leader, Coca-Cola has also optimised on
brand equity as a tool to influence consumer buying behaviour. Normally, brand equity
includes brand strength, which measures the degree of attachment consumers hold
towards a brand and brand attachment, which is the set of attitudes consumers hold
towards a brand (Wright and Nancarrow, 1999).

Consumers prefer high-equity brands such as Coca-Cola because they can easily interpret
the brand benefits of the product, feel more confident of branded products, and obtain
more satisfaction from its usage (Batra et al., 2005). Strong brand equity is beneficial
because the company can better retain the customers; service their needs to later help in
boosting the company‟s profitability level (Rajagopal, 2006). It is to be pointed out that
Aaker‟s framework not only relates brand equity to consumers but also to distribution
trade (other proprietary brand assets). For instance, one of the reasons behind Coca-
Cola‟s leadership is its incredible worldwide distribution (Batra et al, 2005).

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Perceived
Value

Name Brand
Awareness Association

BRAND
EQUITY
Name Other
Symbol Propriatery
Brand
Loyalty Brand
Assets

Provides Value to Customer by Provides Value to Firm by enhancing:

Enhancing Customer‟s:
Efficiency & Effectiveness of Marketing
Interpretation/ Processing of Programs
Information
Brand Loyalty Brand
Confidence in the Purchase Decision Extensions

Use Satisfaction Prices/Margins Trade

Leverage

Competitive Advantage
Figure 1: Aaker’s Brand Equity Framework
Source: Batra et al., 2005, p.318

2.5 Coca –Cola islands and its advertising strategy

Situated in Mauritius, Coca-Cola Islands acts as an intermediary between all the Coca-
Cola bottlers in various islands and the Coca-Cola Company. The role of Coca-Cola
Islands is to give consultancy, technical and marketing support to authorised bottlers
found in Mauritius, Reunion Island, Madagascar, Comoros, Mayotte and the Seychelles.

Basing themselves on the AIDA Model, marketing managers at Coca-Cola developed the
following “Funnel” Model. As the Brand Manager explained, the model describes the
five phases the consumer goes through to become loyal to the product. Advertising
objectives are based on these phases. For instance, to create brand awareness, the
marketing managers will try to initially inform the potential consumers about the product.
Positive disposition relates to the unique selling proposition about the product. After
having seen the product being advertised, the consumer is expected to try it, and then
adopt it to finally be committed to the product. The aim of such a model is to bring
brand loyalty. Hence, advertising strategies are formulated based on this model.

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Positive

Disposition
Brand Adoption Commitment
Awareness Trial

Figure 2: The Funnel Model

Based on the above discussion, the following research objectives were to be determined
by the study.

 To evaluate the extent towards which consumers are influenced by Coca-Cola

advertising in Mauritius.
 To assess the effectiveness of Coca-Cola ads
 To evaluate consumers‟ perceptions of Coca-Cola ads in Mauritius

The hypotheses to be tested were:

Null hypothesis 1: Unappealing ads do not have a significant influence on consumers’

purchasing decisions

Null Hypothesis 2: Advertising does not have a significant influence on consumers’

consumption level.

3. Methodology
This is a descriptive study using primary data collected through a structured and
undisguised questionnaire. The questionnaire consisted mostly of closed ended questions.
However, open –ended questions were also integrated to obtain wider variety of
responses and to get the true opinions of respondents. The questionnaire was structured

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into 6 sections. Prior to data collection, a pilot test was conducted among eight
respondents (5% of the sample size) to ensure effectiveness, comprehensiveness, clarity
and reliability and timing of questionnaire.

Due to time constraints and inability to survey the whole population, a sample of 150
respondents was used and the quota sampling technique was adopted based on
geographical differences as shown in Table 1 below. All data were processed using the
SPSS software and descriptive and inferential analyses were performed.

Table 1: Sample population (geographic profile)

Regions North South East West Central Total
Plateau

Questionnaires 29 23 17 25 56 150
per region

4. Analysis and Findings

This section presents an analysis of the findings gathered from the survey. The
demographic profile consisted of an analysis of the age group of respondents, their gender,
residential area, educational level and income level.

Table 2. Demographic profile

Demographics %
Gender
Male 44
Female 56
Age group
Under 20 6
20-29 49
0-39 19
40-49 20
50-59 6
60 and over 0
Residential area
North 20

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South 15
East 12
West 17
Central Plateau 36

Income level
Less than Rs 5000 36
Rs 5 001 -10 000 21
Rs 10 001-15 000 20
Rs 15 001- 20 000 11
Above Rs 20 000 12
Level of education
School Certificate 9
Higher School Certificate 30
Undergraduate 56
Postgraduate 4
Others 1

The soft beverage industry in Mauritius was then analysed and the choice of respondents
assessed. Emphasis was laid on the rivalry that exists between Coca-Cola and Pepsi.

Soft beverage consumption

Among the 150 respondents interviewed, 90 % consumed soft beverages indicating the
strong positioning of the soft beverage industry in Mauritius. However, 10 % did not
consume soft beverages. To obtain plausible reasons behind the non-consumption level,
the following table was generated:

Table 3: Cross tabulation of Soft beverages consumption * Age

Age
Under 20 20-29 30-39 40-49 50-59 Tota
Consumption of Yes 9 69 25 25 7 l 135
soft beverages No 0 4 1 7 3 15
Tota 9 73 26 32 10 150
l

The majority of respondents who did not consume soft beverages fell within the 40-49
age category as shown in Table 3. Research by Matthews (1995) has shown that as people
grow older, they experience a certain amount of cola fatigue, thus explaining the reason

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for the high number of respondents within the 40-49 age group.

The findings revealed that respondents consumed the following soft beverages:

Coca-Cola 97

Pepsi 88
Sprite 84
7 Up 66

Fanta 62

Orangina 50
Eski 49
C Top 44
Others 21
US Cola 1

0 20 40 60 80 100
Figure 3: Brand of soft beverages consumed

The majority of respondents consumed Coca-Cola (97 %), which indicates the leadership
of the brand in the local soft beverage market. Pepsi, which is Coca-Cola‟s closest
substitute, was the second most consumed soft beverage (88 %).

Table 4: Mean scores of factors influencing buying decisions

Factors Mean

Advertising 3.29
Brand 3.71
Price 3.23
Wide Availability 3.72
Quenches Thirst 3.89
Lack of choice 2.89

The closer the mean score is to 5, the stronger is the importance of the factor for
influencing soft beverage consumption. The mean score for advertising was 3.29,
implying that Mauritians are neither discouraged nor encouraged by advertising in their
purchasing decisions. However, other factors such as brand (mean = 3.71), wide
availability (mean= 3.71) or the intrinsic quality (quenches thirst) of the product (mean =
3.89) do encourage them in purchasing a Coca-Cola. Nevertheless, when asked if they
would buy a Coca-Cola with reference to its price, respondents tend to have a neutral

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response (mean = 3.23), due to the fact that prices of the different soft beverages do not
vary significantly. In addition, the „lack of choice‟ factor generated a neutral response
with a mean of 2.89, implying that consumers do have a variety of choice regarding soft
beverages. Therefore, the three main factors which encourage respondents to consume
Coca-Cola are branding, wide availability and the intrinsic quality of the product.

To get a clearer picture of the influence of branding and of advertising on buying

decisions, a comparative analysis was conducted, as shown in Figure 4.

80

70

60
Number of respondents

Advertising
50

Brand
40

30

20

10

0
Strongly Somewhat Neutral Somewhat Strongly
discouraged discouraged encouraged encouraged

Figure 4. Influence of advertising and branding on buying decisions

Most respondents had a neutral attitude towards the influence of advertising on buying
decisions. Most of them did not know whether advertising encouraged them or
discouraged them in their buying decisions. On the other hand, respondents were more
influenced by branding than by advertising in their purchasing decisions. Hence,
Mauritians have a tendency to purchase Coca-Cola mainly because of the strong brand
positioning of the product.

Null hypothesis 1: Unappealing ads do not have a significant influence on consumers’

purchasing decisions.
To check whether there is an association between unappealing ads and purchasing
decision, the Chi Square tests were used.

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Table 5: Chi-Square Tests

Asymp. Sig. Exact Sig. Exact Sig.
Value df (2-sided) (2-sided) (1-sided)
Pearson Chi-Square .217 b 1 .641
Continuity Correction a .000 1 1.000
Likelihood Ratio .407 1 .523
Fisher's Exact Test 1.000 .817
Linear-by-Linear
.214 1 .644
Association
N of Valid Cases 63
a. Computed only for a 2x2 table
b. 2 cells (50.0%) have expected count less than 5. The minimum expected count is .
19.

Since the significance level is 0.641 (above 0.05), it can be concluded that there is no
significant relationship between unappealing ads and their effect on purchasing decisions
(accept Ho). Even if consumers have seen an unappealing ad, they will continue to
purchase the drink.

Hence, it becomes important to evaluate the impact of Coca-Cola advertisements on

actual level of Coca-Cola consumption, as shown in the following table:

Table 6: Cross tabulation: Coca-Cola Consumption * Influence of advertising

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Inf luence of Coca-Cola advertisement on purchasing decision

Neither
discouraged
Strongly Somewhat nor Somewhat Strongly
discouraged discouraged encouraged encouraged encouraged Total
Coca-Cola consumption Yes Count 6 6 41 29 5 87
Expected Count 7.5 7.5 40.8 23.1 8.2 87.0
% within Coca-Cola
6.9% 6.9% 47.1% 33.3% 5.7% 100.0%
consumption
% within Inf luence of
Coca-Cola advertisement 54.5% 54.5% 68.3% 85.3% 41.7% 68.0%
on purchasing decision
% of Total 4.7% 4.7% 32.0% 22.7% 3.9% 68.0%
No Count 5 5 19 5 7 41
Expected Count 3.5 3.5 19.2 10.9 3.8 41.0
% within Coca-Cola
12.2% 12.2% 46.3% 12.2% 17.1% 100.0%
consumption
% within Inf luence of
Coca-Cola advertisement 45.5% 45.5% 31.7% 14.7% 58.3% 32.0%
on purchasing decision
% of Total 3.9% 3.9% 14.8% 3.9% 5.5% 32.0%
Total Count 11 11 60 34 12 128
Expected Count 11.0 11.0 60.0 34.0 12.0 128.0
% within Coca-Cola
8.6% 8.6% 46.9% 26.6% 9.4% 100.0%
consumption
% within Inf luence of
Coca-Cola advertisement 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
on purchasing decision
% of Total 8.6% 8.6% 46.9% 26.6% 9.4% 100.0%

As shown in Table 6, most respondents (41 or 47.1%) who consumed Coca-Cola had a
neutral attitude towards the influence of advertising on their purchasing decisions. 33.3%
of respondents who consumed Coca-Cola were somewhat encouraged by Coca-Cola
advertisements while only 5.7 % were strongly encouraged by Coca-Cola ads. Hence,
Coca-Cola advertising had some impact on the purchasing behaviour of some consumers.

Null Hypothesis 2: Advertising does not have a significant influence on consumers’

consumption level.

It thus becomes necessary to test the association between Coca-Cola advertising influence
and Coca-Cola consumption level through the Chi Square tests, as shown in Table 7.

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Table 7: Chi-Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 10.325a 4 .035
Likelihood Ratio 10.607 4 .031
Linear-by-Linear
.554 1 .457
Association
N of Valid Cases 128
a. 3 cells (30.0%) have expected count less than 5. The
minimum expected count is 3.52.

Since the level of significance was 0.035 (less than 0.05), there is a significant association
between Coca-Cola advertisement influence and the level of consumption. Therefore
the null hypothesis 2 was rejected and the alternative hypothesis accepted. This implies
that Coca-Cola advertisement had an influence on consumers‟ consumption level. To
measure the strength of association which existed between advertising influence and the
level of consumption, Cramer‟s V was used as shown in Table 8.

Table 8: Cramer’s V
Symmetric Measures

Value Approx. Sig.

Nominal by Phi .284 .035
Nominal Cramer's V .284 .035
N of Valid Cases 128
a. Not assuming t he null hy pothesis.
b. Using t he asy mptotic standard error assuming the null
hy pothesis.

In Cramer‟s V, measures are restricted to 0 and 1. The closer the value is to 1, the stronger
is the association. The value for Cramer‟s V was 0.284 and it was thus deduced that there
is a weak association between Coca-Cola advertising influence and Coca-Cola
consumption level.

Table 9. Mean scores for customers’ perceptions towards Coca-Cola ads in

Mauritius

Reasons Mean

Coca-Cola advertisement is only a tool to encourage 3.75

consumption
Advertising is only a tool used by Coca-Cola to reap higher 3.72
profit
Coca-Cola advertisements are meaningless 2.48

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Coca-Cola advertisements are deceptive 2.39

A 5- point Likert Scale was used from 1 to 5 with 1 being „strongly disagree‟ and 5 being „strongly disagree‟

Table 9 shows that most respondents tended to agree (mean = 3.75) that Coca-Cola
advertisement is only a tool to encourage consumption. Mauritians also agreed (mean =
3.72) that Coca-Cola advertising is only used by the company to reap higher profit.
However, when asked about their level of agreement with the statement that Coca-Cola
advertisements are meaningless, respondents tended to disagree (mean = 2.48). With a
mean of 2.39, respondents also disagreed on the statement that Coca-Cola ads are
deceptive. Therefore, respondents believed that Coca-Cola ads were useful to some
extent and not deceptive.

5. Discussion
The analysis provides ample evidence to indicate the positive impact of advertising on
consumption level. The research has shown that there is a weak but moderate significant
relationship between the influence of Coca-Cola ads and consumption level of the
beverage. Besides, the leadership of the brand in the local soft beverage industry confirms
the effectiveness of the Coca-Cola ads. In fact, the aim of Coca-Cola Islands is to
increase brand loyalty in Mauritius, so that in future, consumers are reluctant to switch
between brands. This strategy seems to be working effectively as indicated by the high
level of Coca-Cola consumption. However, as Ha (1998) advocated, it is not easy to
obtain and sustain customer‟s loyalty to a company‟s product, since there are many forces
driving customers to be unloyal, such as competitors or the customers‟ thirst for variety.
Hence, it becomes necessary for Coca-Cola Islands to develop appropriate advertising
strategies to prevent consumers from turning unloyal to the brand.

Coca-Cola is the most preferred soft drink in Mauritius. However, even if Mauritians
prefer to consume Coca-Cola, some segments of the population prefer Pepsi. Since it has
been proved that there exists a positive relationship between advertising influence and
consumption level, it becomes important for Coca-Cola to capture that segment
preferring Pepsi. Coca-Cola Islands can use a set of different specialised advertising
campaigns (Farbey, 2002), to achieve this objective. It is important to first segment the
market to implement such a strategy. Coca-Cola Islands can segment the market
according to age, gender and intensity of consumption.

The market survey also showed that there are non- soft beverage consumers, light,
medium and heavy users. The non-consumers were mainly within the 40-49 age group.
They are reluctant to consume soft beverages because they are conscious of the
increasing health issues surrounding the consumption of soft beverages. It thus becomes
important for Coca-Cola Islands to formulate appropriate advertising strategies to target
these consumers with other products in the portfolio such as Coca-Cola light. As far as
the light users are concerned, Coca-Cola Islands can encourage them to consume Coca-
Cola more frequently. This can be achieved by focusing on feature appeals, like the

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refreshing aspect of drinking a Coca-Cola. The ads could be targeted to these light users
during very hot seasons. It is important for Coca-Cola to maintain its heavy and
medium users and this could be achieved through promotional tools like sales promotion.

Coca-Cola‟s “glocal” strategy is working fairly well in Mauritius. According to the

market research survey, most consumers are influenced by the brand (mean = 3.71) in
their purchasing decisions. This strategy could be improved so as to establish a stronger
sense of cultural congruence (Anon, 2006). Hence, ads could reflect the typical Mauritian
culture while still maintaining a balance with the brand‟s global image.

The market survey has indicated that consumers have a wrong perception of the use of
advertising as a marketing tool. The majority of respondents tended to agree that Coca-
Cola uses advertising to encourage consumption (mean = 3.75) and to reap higher profits
(mean = 3.72). It thus becomes important to reposition the role of Coca-Cola advertising.
This can be achieved through the attitude-change strategies as proposed by Schiffman
and Kanuk (2000). The aims of such strategies are to show consumers that Coca-Cola
advertisement is not only a tool to encourage consumption and reap higher profit, but a
way to bring images of happiness and unity among people so that they feel better.
According to the Brand Manager of Coca-Cola Islands, the Coke Side of Life campaign
is a way of telling people to take life on the positive side. Unfortunately, most consumers
could not understand the message of the ad. Hence, it would be advisable for Coca-Cola
Islands to integrate positive images reflecting happiness, which consumers can clearly
distinguish.

6. Conclusion

The soft beverage industry in Mauritius is at an interesting stage. Nowadays increasing

health issues and introduction of new drinks on the market are discouraging the
consumption of soft beverages. At the same time, giant companies in the industry are
investing massive amount of money on advertising so as to acquire higher market share.
The role of advertising is thus becoming increasingly important.

This research study revealed the positive relationship between advertising influence and
consumption level. In addition, the leadership of Coca-Cola in the Mauritian soft
beverage market was confirmed. This position can be mainly attributed to the strong
brand influence of the product. However, Pepsi is not far behind. Major segments of the
population are developing strong preferences towards Pepsi ads. The study also showed
the wrong perceptions Mauritians have towards Coca-Cola advertising.

Coca-Cola may lose its market share in the future if no actions are taken to remedy the
situation. It is therefore important for Coca-Cola to capture those segments preferring
Pepsi ads and to reposition itself. This can be achieved through the use of different
specialised advertising campaigns, more investment in corporate social responsibility, and
communication of ads in the most effective medium. Coca-Cola Islands should
emphasise on its glocal and creative strategies, to maintain its leadership and obtain
higher share of the market. Coca-Cola has a long way to go, provided it keeps track of

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market changes and matches its strategies to these changes. In the future this research
could be further expanded to include the impact of branding on Coca-Cola purchasing
decisions.

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