CONSUMER BUYING BEHAVIOR TOWARDS SOFT DRINKS

GROUP 5 Jatin Jain 147 Nitasha Basu 158 Manika Dhamija 164 Priyanka Malhotra 183 Vibhu Sharma 186 Anusha Gupta 194

MANAGEMENT PROBLEM
A multinational soft drink company is planning to establish their business operations in India. Facilitate decision making of top management by collecting primary data on consumer buying behaviour in the soft drink category, which will help in decision making process of top management.

Product category taken: Soft drinks.

INTRODUCTION
The soft-drink industry comprises companies that manufacture non-alcoholic beverages and carbonated mineral waters, concentrates and syrups for carbonated beverages. Soft drinks can be further divided into carbonated and noncarbonated drinks. The government has adopted liberalized policies for the soft drink trade to give the industry a boast and also to promote the Indian brands internationally. With FMCG companies experiencing the slow down, however the soft-drink industry is leading the way with staggering increase in growth rates.

SOFT DRINK INDUSTRY - INDIA

The 50-billion-rupee soft drink industry is growing at 6 to 7% annually at present in India. In India, Coke and Pepsi have a combined market share of around 95% directly or through franchisees. There are about 110 soft drink producing units (60% being owned by Indian bottlers) in the country, employing about 125,000 people. The per capita consumption of soft drinks in India is around 5 to 6 bottles, compared to Pakistan's 17 bottles, Thailand's 73, the Philippines 173 and Mexico 605. The industry contributes over Rs 12 bn to the exchequer and exports goods worth Rs 2 bn. It also supports growth of industries like glass, refrigeration, transportation, paper and sugar.

MARKET STATISTICS
Demand of Soft-drinks
500 450 400 350 300 250 200 150 100 50 0 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2014-15

Market Structure

26%

24% North East

Million Bottles 18% 32%

West South

Cola Drinks - Segmentation

35 10 9 8 7 6 Percentage 5 4 3 2 1 0 Thumbs Up Coca Cola Pepsi Gold Spot

Non-Cola - Segmentation

30
25 20 15 10 5 0

percentage

Fanta

Mirinda

Limca

Source: www.researchandmarkets.com

OBJECTIVES OF THE STUDY

Identification of the factors that affect the buying behaviour of consumer with respect to soft drink category. Impact of external factors like firm's marketing efforts and socio-cultural environment in consumer buying behaviour. Impact of psychological field (motivation, perception, learning, personality, attitudes) in decision making process of consumer with respect to soft drink category.

RESEARCH METHODOLOGY
SECONDARY RESEARCH
Data collected through articles and research papers on soft drink industry, containing information about the brands.

PRIMARY RESEARCH

Quantitative Research - A survey using a questionnaire to analyze different aspects of the brand like its awareness, recall and perception.

SAMPLING PROCESS
Sample Size: 110 samples across Delhi (Tier 1) Target Population: Consumers of soft drinks

Sampling Unit: house-makers, school and college students and professionals.

Sampling Frame: Malls, Contacts and E-mail. Sampling Technique: Convenience & Judgemental Sampling

Data Analysis & Interpretation

Demographics
GENDER AGE

36%

42%
58%

26%

Male Female

17%

21%

Below 18

18-24

25-35

Above 35

YEARLY FAMILY INCOME

8% 34% 58%

Rs 1-5 Lakhs Rs 5-10 lakhs Above 10 lakhs

50 45

KIND OF BEVERAGE PREFERENCE

40
35 30 25 20 15 10 5 0 Carbonated Non-carbonated Both
Females Males

Type of Non Alocoholic Drink

Regular Cola

Health drinks
Lemon-Lime Sodas Diet Cola Milk Shakes Others 0 5 10 15 20 25 30 35

Purchase Pattern
Everyday 14 Thrice a week 26 Twice a week 29 Once a week 34 Rarely 7

35
30 25 20 15 10 5 0 Everyday Thrice a Twice a week week Once a week Rarely Percentage %

Type of Packaging

Glass bottle 19%

Tetra pack 12%

Can 20%

Pet bottle 49%

Factors influencing consumer to purchase soft drinks

Factors considered while purchasing soft drinks

Taste

Quality

Price

Packaging

Advertisements

Brand Name

Brand Personality / Image

Promotional Offers

Influence by friends and family

Availability

Retailers Suggestion

Taste
Not at all important 2% less important 12%

Neutral 11%

Very Important 31%

Important 44%

less important 2%

Quality

Not at all important 1%

Neutral 17%

Very Important 47%

Important 33%

Price
Very Important Neutral Not at all important Important less important Neutral

Packaging
Very Important
Not at all important

Important
less important

6%
12% 28% 9% 15% 11% 19%

25%
36% 39%

Advertisement

Not at all important 11% less important 14%

Very Important 15%

Neutral 25%

Important 35%

Brand Name
Very Important Neutral Not at all important Important less important

Brand Personality/Image
Very Important Important Neutral less important

8%

9%

24%

14%

12%

15%

12%

14%

44% 48%

Promotional Offers
Very Important Neutral Not at all important Important less important

Availability
Very Important Neutral Important less important

Not at all important

14%
29% 12% 12%

5%

10% 42%

18% 27% 31%

Retailer's Suggestion
Very Important Neutral Important less important

Influence of friends/Family
Very Important Neutral Not at all important Important less important

Not at all important

7% 21% 10% 14% 15%

26%
26% 36%

19%

26%

Impact of external factors like firm's marketing efforts and socio-cultural environment in consumer buying behaviour.

Consideration of Brand while Purchasing

maybe 23%

I have a preference for one or more brands in the soft drink class.
yes 44%
65%

no 33%

I understand the features of soft drinks well enough to evaluate the brands.

15 %

20 %

yes

no

maybe

Majority of consumers are inclined to a particular brand and have evaluated its features thoroughly.

If I received information that was contrary to my preferred soft drink, I would still keep my preferred brand.
maybe 12%

no 22% yes 66%

30

45

25

I usually purchase the same brand within the soft drink class.

yes

no maybe

Even the brand loyal customers consider critics of their chosen brand.

Effects of Advertisements
Advertisements - most influencing factor in attracting customer Celebs endorsing a soft drink comes next Sales promotion and sponsoring events are other attracting factors All the factors are quite close, so no factor can be ignored

Medium of Advertising
Outdoor advertising and Television are the main source of advertising Followed by Window Display

Sources of Purchase
Nearby Convenience Stores are main purchase point for customers Supermarkets and Local Pan Shops are next

Impact of psychological field in consumer decision making process with respect to soft drink category.

Attitude
What kind of attitude do you have towards carbonated drinks?
neutral 22% positive 45%

negative 33%

Brand Loyalty
Most of the customers are not too brand loyal Availability is a strong point for sales

I would prefer Indian soft drinks(jaljeera, nimbu paani , lassi) to western soft drinks (flavoured water, colas etc).
23%

18%
15% 13%

20%

11%

Male Female

Yes

No

Maybe

Scope for new products

14% 15% 12% 9% 9% 6% 3% 11% 9%

7%
5%

Motivation
In your opinion what could be the reason for consuming soft drinks?
5 4.5 4 3.5

3
2.5 2 1.5 1 0.5 0

gives prestige

Gives Refreshment / Quenches thirst

Economical

Reflects Life Style

Tastes Good

This soft drink helps me express the I within myself and makes me happy.

maybe 35%

yes 33%

no 32%

Buying Behavior Influencer

Customers tend to buy the brand they like and not get influenced by others Family influences the buying behavior of majority of the rest

Purchase Behavior at a Restaurant

Customers show a different purchase behavior when in a restaurant They most of the times they go with the group while ordering a soft drink

Learning
Classical conditioning : ensure certain behaviour through repetition. Eg :Coca-Cola's "happiness machine: evokes happiness and togetherness. Pepsi associated with fun and happy times by use of cricketers and celebrities. Subliminal advertising : At movie theatre to increase sales of popcorn and Coke. Instrumental conditioning : learn by trial and error Informal learning is most often mimicked behaviour and has an impact on soft drinks.

Top of Mind Recall

Limca 3% Fanta 5% Red bull 2% Others Fruity,real juice, tropicana, maazaa 7%

Thums up 11%

Coca cola 39%

Pepsi 33%

Perception - Word association

COCA COLA
Popular Sweet taste American/western brand Youthful , energetic Original recipe Global co. Harmful/hazardous Best Refreshing Coke Spread happiness Thanda
6%
4% 8% 9% 5% 7% 4% 13% 8% 13% 11%

12%

PEPSI
14% 10% 11%

9%
6%

7%
4%

7%

8%

8%

9% 7%

Conclusion
The most important factors for purchase behaviour were taste, price, brand name and quality. Independent small grocers/convenience stores lead the distribution of soft drinks. Outdoor advertising and Television are the most popular mediums of advertising. Celebrity advertising has a powerful effect on consumer. Brand switching cost is low hence most consumers are not too loyal. Buying behaviour is contradictory in situations of isolation and while socialising.

 The most important reason cited for purchasing soft drinks is for quenching thirst and attaining refreshment. Coca Cola and PepsiCo are in the top of mind of people. Pepsi has stuck with its high energy and comedydriven strategy while Coke has been projecting its core values of happiness and togetherness Consumers have become increasingly aware of health and fitness-related issues.

Managerial Implications
Launch a differentiated product in the saturated soft drink market. Need for integrated marketing campaigns to make a mark in the highly competitive soft drink industry. Endorsement by celebrities also creates top of the mind recall. Convenience stores are the most important purchase point, hence must be an important distribution partner. Focus on taste, branding and price. Target growing market for health and wellness products. Consumers are seeking healthier beverages even if they are more expensive, due to their positioning.