RESEARCH PROPOSAL

FACTORS AFFECTING CONSUMER PREFERENCES IN BUYING BEVERAGES- A COCA COLA AND PEPSI
COMPILED BY: SOURABH SAINI RAM SWARUP ARUN KUMAR SANJAY CHOUDHARY KRITI CHAUHAN

INTRODUCTION
Most of the world consumers have certain things in common: their values and attitudes, as well as behaviour often differ. As a result, it is vital that international marketers understand these differences and adapt their marketing strategies accordingly. Failure to do so could result in disaster for a companys international products and marketing programs. As todays economies are becoming more entwined than ever, any possible method that can be used in supporting the building of global brands is appealing. One of the primary objectives that international marketers have is to create an image that is familiar worldwide, but at the same time associated with explicit meanings (Fahyet al. 2004). The beverage industry in India is one of the most competitive with many international names operating in the market. Initially domestic players like Parle group dominated the Indian beverage market with brands like Thumbs up and Limca. However with the re-entry of MNC players like Pepsi in 1991 and Coca-Cola in 1993, the market took a decisive shift in favour of these MNCs and over the years Coca-Cola and Pepsi has become the prominent players in the market. Beverages can be principally classified into carbonated and non-carbonated. Carbonated drinks include cola, lemon and orange flavours while non carbonated drinks principally comprise of mango flavour. The carbonated cola products constitute 60% of the soft drink market and three prominent brands in this category are Pepsi, Coca-Cola and Thumbs up. Thumbs up was a brand from Parle until Coca-Cola bought it in 1993.

LITERATURE REVIEW
As with much research on consumers there is a lot of terminological confusion and sometimes a lack of rigour. This is acknowledged within the academic literature and steps are being taken to rectify this situation.

Consumer Satisfaction Consumer satisfaction and acceptances are often considered in the literature to be closely linked yet these are distinct concepts. Satisfaction is the fulfilment and gratification of the need for a stated good or service, here, beverages. Consumer Acceptance Acceptance describes consumer willingness to receive and/or to tolerate. For example, a customer might accept the occurrence of a certain number of yearly supply interruptions given a certain price. Consumer acceptance and satisfaction are related, as the first is a precursor of the latter. However, despite the fact that satisfaction and acceptance can be thought of as lying on a continuous acceptance does not automatically lead to satisfaction. Weighing needs or preferences against provided product or service attributes results in the balance of satisfaction pointing in a negative or positive direction, depending on whether interests are conflicting or corresponding. This determines the way in which people evaluate companies or utilities performance. Only when a consumers needs for a stated good or service are met, i.e. when the service provided corresponds with their preferences, will they feel satisfied. Customer satisfaction can be enhanced when their needs are met (in terms of both quality and quantity) and accord with their preferences. At the other end of this dimension, where the service provided conflicts with the prevailing needs or preferences, customers may experience feelings of dissatisfaction. Consumer Concerns These are expressed anxieties or unease over an object broadly defined.

Consumer Preferences This is used primarily to mean an option that has the greatest anticipated value among a number of options. This is an economic definition and does not tap into wishes or dreams but for all practical purposes is an appropriate definition. Preference and acceptance can in certain circumstances mean the

same thing but it is useful to keep the distinction in mind with preference tending to indicate choices among neutral or more valued options with acceptance indicating a willingness to tolerate the status quo or some less desirable option. Consumer Expectations The distinction between expectations and preferences is often blurred though the concepts are distinct. Expectation is used in three slightly differing senses in the literature. One is the act of expecting or looking forward a belief about what will happen in the future. A related but more technical use of expectation is to denote a more formal estimation of the probability of an event occurring. These first two definitions can be distinguished from preference in that preferences refer to some desired state and, as in the above definition, imply that more than one state is possible and that there are some options. Unfortunately expectation is also used more loosely to mean a requirement or demand for something and in this sense is a kind of strong preference. Consumer Awareness Consumer awareness is the level of knowledge about, in this case, beverages which includes the company, supply system and service. In most research the adequacy or otherwise of this awareness is anchored against the service provider or regulators perspective on the supply. Where consumer awareness does not equate with this industry perspective this is often termed a consumer (miss) perception. Consumer Attitudes An attitude is a positive or negative evaluation of a social object or action. A social object in the present context might mean the beverage company, supply system and service, or the beverage itself. Many theories of attitudes (Ajzen, 1985) have attitude as a factor involved in determining behavioural choices however there is considerable continuing debate about when, and in what circumstances, attitudes are important determinants of behaviour. An attitude toward something should thus not be taken to imply that attitude consistent behaviour will automatically follow. Consumers and the Public

While discussing definitional clarity it is worth acknowledging that The consumer is not a representative of a single homogeneous group, the public. Social scientists prefer to use the term publics to reflect the idea that not all members of the public share the same goals and values nor have the same relative power or status within any society.

STATEMENT OF PROBLEM
This proposal aims to find out the various factors influencing the consumer decision while making a purchase of a beverage. The beverage market in India is worth 2074.67 million INR. Though the major portion of the market is still

dominated by the carbonated beverages there is a major shift towards the healthy options such as juices and buttermilk. There was a growth of 31.52% in the juice segment from 2007-2008. As a result of this phenomenal growth, a lot of competition has entered the market. A number of new brands have flooded the market. Due to these changes in the beverage market there is a need to identify and evaluate the reasons for the shift in consumer purchase pattern. The study aims to determine the factors influencing decision while purchasing beverages.

OBJECTIVES OF THE STUDY

The overall purpose of this study is to gain a deeper understanding of different international and local factors affecting consumer preferences on a local market. We also want to explore the effect of international well-organized advertising campaigns having on consumers buying process. We also study whether or not there is a relation between the above mentioned factors. We have limited our research to the cola drink industry, rather than the entire soft drink industry. Although consumer perceptions on international brands marketing strategies, the focus of the investigation will be on Coca-Cola and Pepsis advertisement and sponsorship as well as their brand. PRIMARY OBJECTIVES To determine the factors influencing the consumer decision while buying beverages namely Coca-Cola and Pepsi.

SUB OBJECTIVES
To determine the product attributes influencing purchase decision. Determine the reasons for consuming either beverage brand. To determine the most preferred beverage among the given brands. To determine which commercial beverage tickles the choice.

HYPOTHESES

In the 1980s consumers were tested on whether they preferred the Pepsi product over that of Coca-Colas, and the results provided that the majority did indeed choose Pepsi. Yet, interestingly enough, Coca-Cola was and still is today the leader within the cola drink market. Based on these results following assumptions are made: H1:- Consumers explicitly prefer one brand but actually favour the taste of another. Coca-Cola and Pepsi marketing strategy differ widely, specifically in that of their advertisements, where Coca-Cola depends heavily on tradition, while Pepsi relies more on the appeal of celebrities and young people. As a result the following hypothesis is suggested. H2:- Seeing as Coca-Cola and Pepsi seem to target different consumers age the choice of cola product differs, as well as their taste preferences. More specifically the younger age group particularly have a more positive attitude towards Pepsi on the whole, whereas the older age group are more positive towards Coca-Cola. According to theory, teenagers have a high need for belonging, independence and approval to name a few, but more importantly they need to feel accepted, particularly by their peers (Solomon et al. 2001). Consequently they switch primarily targeted at them, as they are vulnerable to consumerism and media (Blackwell et al. 2001). As a result, following hypothesis is proposed: H3:- People aged eighteen and younger have the highest level of knowledge of brand advertisement, hence they are more influenced by it in their choice of products than any other age group.

RESEARCH METHODOLOGY
DATA COLLECTION: - We have used the data already collected by Rambabu Pentyala the use of a questionnaire as the main aim is to measure consumers understanding and experience of global advertising campaigns.

QUESTIONNAIRE: - The questionnaire allowed gathering specific information on how different consumers perceive international campaigns, as well as the different factors that influence consumer preference. The questionnaire was divided into structured and unstructured questions accordingly. A ratio scale was also used which allowed the respondents to classify or rank the objects i.e. 1-5,where 5 represents very good while 1 represents very bad. Finally in combination with the structured questions, unstructured questions were asked, where the respondents were able to clarify and express in detail their responses and opinions SAMPLE COLLECTION: - the respondents selected by Rambabu Pentyala were as follows: <18: the majority were seventh to ninth graders from North India region. 19-34: students >35: family, friends and people from Hyderabad These respondents were selected on the basis of easy access, as the majority were friends and family. The questions in the questionnaire were based upon theoretical framework and thus. Questions can be divided into following groups: CONSUMER PREFERENCE: the questionnaire initiated with an introduction to the consumption of cola drink and hence the questions were designed in such a way to give an overall view of the respondents relationship to cola as a soft drink. BRAND: question 7-10 encompasses the respondents viewpoint on Coca-Cola and Pepsi as a brand respectively, as well as the associations that go with them. These questions were of great relevance since it illustrated whether the respondents held favourable or non-favourable towards the brands. Questions 11 and 12 were specifically about the two brands logo and slogans, indicating once again which of the two brands were preferred over the other. ADVERTISEMENT: questions 13-15 are linked to the advertisement theory and provided with knowledge about respondents attitude towards advertisement in general and the extent in which advertisement influences consumers in their

choice of products. Moreover the questions provided with and insight into how familiar and open the respondents were of Coca-Cola and Pepsis advertisement and campaigns. SPONSORSHIP: questions 16-18 are in accordance to the theory regarding sponsorship. These questions provided with knowledge about the relationship between sponsorship and brand image and whether it is successful to sponsor different events. OTHERS: finally, the respondents were asked to fill in their age and preferred activity to see whether the theory about age correlates to the different age groups responses.

SIGNIFICANCE OF THE STUDY

VALIDITY: in order to gain as high validity as possible, the research has been conducted with a view of providing most relevant information. The need to satisfy customer success in any commercial enterprise is very obvious. The income of all commercial enterprise is derived from the payments

received for the products and services supplied to its customers. If there is no customer there is no income and there is no business. Then the core activity of any company is to attract and retain customers. It is therefore no surprise that Peter Ducker the renowned management Guru, has said to satisfy the customers is the mission and purpose of every business.

According to American Marketing Association, Marketing Research is the function that links the consumer, customer and public to the marketer through information-information used to identify and define marketing opportunities and problems, generate, refine and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process. Marketing Research plays a very significant role in identifying the needs of customers and meeting them in best possible way. The main task of Marketing Research is systematic gathering and analysis of information. Thus this study is helpful in providing an insight into what helps a customer decide his preference for a particular product and this in turn gives the companys and idea of how they can bring about changes in their product, advertisement or sponsorship to stimulate customer preference for their product. Although, as the number of respondents were limited the external validity of this study can be questioned.

REFERENCES:Aaker, D.A. 2005. Strategic market management. London: Simon and Schuster. Solomon M., G. Bamossy, G. & Askegaard- consumer behaviour, Harlow England; New York: Financial Times, 2001.

Blackwell R., P. Miniard and J. Engel, international marketing, Ohio: South Western, 2001. Kotler P, J. Armstrong 2005. Principles of marketing, Harlow Pearson Education Limited. Rambabu Pentyala, vol.5 (1) October 2011, pp-1-21; Management Education and Research Institute. http://en.wikipedia.org/wiki/Coca-Cola http://en.wikipedia.org/wiki/Pepsi http://business.enotes.com/business-finance-encyclopedia/advertising http://en.mimi.hu/marketingweb/lowinvolvement_products.html www.coke.com.au/about_advert.asp