1.

BACKGROUND AND DEVELOPMENT OF THE SOFT DRINK INDUSTRY

The soft drink industry began in the mid-1880s with the creation of syrup that was mixed with carbonated water and served at drug store lunch counters. During the early years, soft drinks were sold only in stores that could provide fountain service. Increasing distribution was tied to building additional syrup manufacturing plants. With the advent of bottling machinery, soft drinks began to be distributed beyond the town drug store. The first merchant to bottle Coca-Cola was Joseph A. Biedenharn of Vicksburg, Mississippi, who installed a bottling machine in his candy store in 1894. The development of large-scale bottling assisted the proliferation of Coca-Cola, and by 1895 the drink was sold in nearly every part of the United States. An infrastructure of independent bottlers working under contract with Coca-Cola, producing the drink to exact specifications, and distributing it within a specific region, soon became the model distribution method for Coke and was emulated by others. The 1960s and 1970s brought acquisitions and diversification for Coca-Cola and PepsiCola. In 1960, Coke purchased Minute Maid and later acquired Duncan Foods. The CocaCola Company Foods Division was created in 1967 and was later renamed Coca-Cola Foods. Meanwhile, Pepsi-Cola merged with Frito-Lay in 1965, changing its name to PepsiCo but maintaining its beverage division under the name Pepsi-Cola. PepsiCo soon ventured into food service and snack foods with the acquisition of Pizza Hut, Taco Bell, and Kentucky Fried Chicken restaurants. During the 1980s, as consumers became more interested in health and fitness, the soft drink industry faced stiff competition from the makers of bottled water. In response, soft drink manufacturers developed low-calorie and caffeine-free beverages, such as Diet Coke and Diet Pepsi. The start of the 1990s ushered in a new kind of competition focused on "New Age" beverages such as ready-to-drink teas, fruit juice beverages, and flavored waters. Gatorade, the perennial leader among sports drinks, also saw new competition during the 1990s.

From the simple beginnings of one cola, the soft drink industry exploded into a kaleidoscope of traditional sodas, natural sodas, fruit juice drinks, and various kinds of bottled water. Coca-Cola Classic was the best selling soft drink in the United States and around the world in 1992, controlling nearly 20 percent of the domestic market and 46 percent of the worldwide market. Coke Classic controlled 19.3 percent of the soft drink market and posted a sales increase of 1.5 percent for the year. Pepsi-Cola was the second best-selling soft drink for the year, with a 16.1 percent market share, down 0.8 percent over 1991. Diet Coke, Diet Pepsi, and Dr. Pepper completed the list of the top five soft drink brands for 1992. Traditional cola producers were caught off-guard by the rise of generic store brands during the early 1990s as the recession drove consumers to experiment with these lowerpriced drinks. However, these colas were not expected to create a significant amount of brand loyalty, so they did not appear to pose a substantial threat to the major soft drink manufacturers. Despite market dominance, traditional cola products continued to lose market share. Total soft drink consumption grew roughly 5.0 percent annually between 1983 and 1989, but slowed to 3.0 percent in 1990 and only 1.6 percent by 1991. Even the diet cola market has faltered since 1990, losing ground to new drinks commonly called "New Age" beverages. Diet colas, which enjoyed a 10 to 20 percent sales growth rate during the 1980s, decreased to approximately 3 percent per year. Industry analysts suggest that new drinks, including sodas and bottled water, are the most formidable opponents to traditional colas. This market segment began with the rise of the bottled water industry in the United States and expanded into the creation of the New Age category. In the face of rising competition from all fronts of the beverage market, both Coke and Pepsi turned to joint ventures with other beverage companies. Pepsi-Cola has been working with Ocean Spray to provide all of its ready-to-drink beverages, including Ocean Spray Splash, a five-flavor line of fruit sparklers, and Ocean Spray Lemonade. In this alliance, Pepsi has become the exclusive distributor of all Ocean Spray single-serve products.

In a joint venture with Nestle, Coca-Cola created the Coca-Cola Nestle Refreshment Company (CCNR) in 1991 to market ready-to-drink coffee, tea, and chocolate beverages. Nestea Iced Tea, CCNR's first project, was introduced in the United States in March 1992. The bottled tea has no preservatives, artificial flavors or colors, and comes in regular and diet versions. Both cola manufacturers also introduced sports drinks, such as All Sport by Pepsi and PowerAde by Coke. Sports drinks replenish fluids, minerals, and energy lost during exercise, and the market for these drinks has grown into a billion-dollar retail segment. Gatorade accounted for nearly 90 percent of nationwide sales and was the one brand for both Coke and Pepsi to beat. The movement of major players like Coke and Pepsi into nontraditional beverage markets has shown the effect of changing consumer preferences. Should the New Age category remain as a firmly established and viable drink alternative, these two manufacturers are likely to increase their domestic rivalry, possibly to the detriment of the smaller firms in the marketplace. Moreover, Coca-Cola and Pepsi-Cola have set their sites on a much larger piece of the beverage market, overseas expansion. With improving distribution systems, these two giants have been preparing for what they do best, promoting worldwide consumption of well-known and well-loved products. During the late 1990s, it appeared that there was little room for new products in consumers' hearts. In a move reminiscent of Coke's disastrous New Coke campaign, Pepsi rolled out a new diet cola called Pepsi One in October 1998. Hyped by the company as a better tasting diet cola, sales started strong, with Pepsi One capturing 2 percent of the market. It soon faltered as consumers decided it did not taste all that different from Diet Pepsi. Pepsi One's share soon fell to 1.4 percent of the market.

2. SOFT DRINK INDUSTRY IN INDIA

The Indian soft drink beverage market is dominated by Coca-Cola India and PepsiCo. The market had grown over the years to become the third largest consumer of beverages after the US and China. The fact that the per capita consumption of soft drinks in India remained among the lowest in the world added to the high growth potential of the market. Since the 1990s the market had witnessed many price, distribution, and advertising wars between the two cola giants as they fought hard to corner a bigger share of the market. The companies also had to face allegations in 2004 and 2006 that their soft drinks contained high pesticides levels. With the controversy behind it, both the companies were aggressively working toward increasing their market share in India.

Soft drink market size for FINANCIAL YEAR 2006 - 07 was around 270 million cases (6480million bottles). The market witnessed 5- 6 percent growth in the early90s. Presently the market growth has growth rate of 7- 8 percent per annum compared to 22 percent growth rate in the previous year.

This extraordinary success of soft drinks can be attributed to the following factors: Absence of contemporary competitive brand. Euphoric image built up in the Western countries proceeded the entry into Indians are very found by nature of foreign goods, services etc. due to

Indian Market; and prolonged foreign rules.

2.1 Challenges for Soft drinks industry in India.

Parle Exports (P) Ltd, later in 1970 introduced Limca, Lemony Soft drinks. Before Limca introduce, they had tentatively introduced Cola, Pepino, which they had to soon withdraw in the face of battering confrontation with Coca-Cola. Three of four groups of Indians companies who had the required production capacity started their own brands of Cola, Lemon, Orange, but failed to achieve their goal on a national basis. India always has love and hate relationship with MNCs which gave a significant opportunities to soft drink industries in India when Coca-Cola decided to windup its operation in 1977 rather than bowing to the Indian government insisting on: wasted. Manufacturing of the top-secret concentration in India. Disclosure of the chemical composition of the essence. Dilution of equity, as the government felt that lots of foreign currency was being

This left a large vacuum in the popular soft drink market, and a vista was opened to any company with the requisite, technical, marketing and organizational skills. The exit of Coca-Cola from India in 1977 accelerated the growth of several Indian Soft Drink. New soft drink in the form of Tetra pack entered the market among Frooti, Jump-In and Treetop were the prominent once. Till 1977 their equipped bottling plants and the distribution network a longing to be of no use. It took them one year to develop new formula to survive and gradually came up with Campa, Lemon, Orange and Cola that order. However Parle, the pioneer in the soft drinks, blazed its way to national prominence with their product Thumps Up bearing the slogan Happy Days Are Here Again. This particular slogan helped to win over the loyalists or addicts to Coca-Cola, who was in the state of Cola Shock or Cola Depression. Soon the Indian Soft drink industry started at a phenomenal rate, and all Parle Products Gold Spot, Limca and Thumps Up became the brand leader in their own segment.

In spite of all these, the drink market still has large gap, as claim by soft drink manufacturers. To fill these gaps there are many soft drinks concentrate and squashes flooded the market. The Indian soft markets basically offered three flavours i.e. Orange, Lemon and Cola.

2.2 Soft Drink Production Area

The market preference is highly regional based. While cola drinks have main markets in metro cities and northern states of UP, Punjab, Haryana etc. Orange flavored drinks are popular in southern states. Sodas too are sold largely in southern states besides sale through bars. Western markets have preference towards mango-flavored drinks. Diet coke presently constitutes just 0.7 percent of the total carbonated beverage market.

2.3 Types
Soft drinks are available in glass bottles, aluminum cans and PET bottles for home consumption. Fountains also dispense them in disposable containers Non-alcoholic soft drink beverage market can be divided into fruit drinks and soft drinks. Soft drinks can be further divided into carbonated and non-carbonated drinks. Cola, lemon and oranges are carbonated drinks while mango drinks come under non-carbonated category. The market can also be segmented on the basis of types of products into cola products and non-cola products. Cola products account for nearly 61-62 percent of the total soft drinks market. The brands that fall in this category are Pepsi, Coca- Cola, Thumps Up, Diet coke, Diet Pepsi etc. Non-cola segment, which constitutes 36 percent, can be divided into 4 categories based on the types of flavors available, namely: Orange, Cloudy Lime, Clear Lime and Mango.

2.4 Soft Drinks In Rural Market In India

In India, the Coca-Cola and Pepsi soft drink brands suffered a setback in August, 2003 due to a product contamination scare. Both have cut profit margins to the bone in order to fend off competition from low-priced local fruit drinks. Indian consumers are accustomed to drinking a variety of locally produced soft drinks that are sold in small stands throughout the country. Rural India is still a highly pricesensitive marketplace, so the major soft drink companies are forced to cut profit margins in order to compete there. India's purchasing power parity per capita of US$2,850 is representative of a nation in which the average consumer has insufficient income to engage in discretionary spending. Nevertheless, during the hot season, spur-of-themoment beverage sales are commonplace. In order to position themselves for sales growth, the major soft drink companies priced a 200-milliliter bottle at the equivalent of 11 U.S. cents. Although that price is not sustainable beyond the short term, management hopes that it will be enough to wrest market share away from local products and substantially increase sales volume in 2004. Beverage companies cannot afford to ignore India's rural consumers if they wish to expand market share. According to data release by the PRB, only 28 percent of India's population lived in urban areas in 2003. On average, rural consumers have a lower income level than their urban counterparts and demand lower-cost beverage options. In order to remain cost competitive, soft drink companies have to contain the transportation costs involved in expanding their distribution network into widespread towns and villages. Faced with high fuel and vehicle costs, companies are turning to less expensive means of transportation including ox carts and rickshaws. Another challenge facing the major soft drink companies is regaining consumer confidence in the aftermath of the pesticide issue.

India Soft Drinks Come Of Age

The soft drink industry in India still has one of the lowest per capita consumption in the world. But, sensing growth opportunities, Coke and Pepsi set up operations between 1993 and 1995 and since then volumes have risen about 40 percent. But, despite the recent rise in consumption, the soft drink industry is far from reaching its full potential.

2.5 Different reasons why the full potential of the soft drink industry in India is being held back:
2.5.1 Fakes: Duplicates account for a significant portion of this industry. Fly by night operators have an operation catering very close to high volume areas like, Delhi, Mumbai, Goa etc. Law enforcement personnel catch these operators routinely. But despite the stiff penalties it is lucrative for any amateur to start a filling and capping operation with Rs. 5,000 (US$ 100). This is of course possible with the help of margin hungry retailers (largely grocery shops) who give empty bottles. Another reason for this menace is the crown cap. About 80 percent of carbonated drinks sold are crown capped and these caps are not tamper evident. Routinely, corks used by Coca-Cola and Pepsi (seconds) are sold in the used materials market at a lucrative price. Although Coca-Cola and Pepsi have a coded date of manufacture on the bottles, consumer awareness for checking the cork is low. Long-term growth in this package will depend on the pricing of returnable glass bottles and tamper proof closures.

2.5.2 Transportation Problems:

80 percent of the population lives in villages and there are about 500,000 villages in India. Villages are very poorly accessed by paved roads, which increases the cost of distribution and reach. During the monsoon season, access to remote areas is virtually impossible and the recent hike in diesel and petrol prices has increased the cost of transportation to this vital market. Transportation costs approximately 10 percent of the total cost of carbonated drinks. Any increase in transport cost will adversely affect the rural market reach, which is already very price sensitive. 2.5.3 Excise Duties/Politics/Bureaucracy: Governments as well as consumers consider soft drinks as a luxury. Penal rate of duties must be reduced to make a soft drink affordable. Also, some state governments have specific taxation policies against the multinationals. For example, the West Bengal government prevented Coca-Cola from expanding its manufacturing in its state. Due to inconsistent tax policies growth in consumption has been erratic and the introduction of standardized sales tax policies by all state governments will help stabilize growth in this industry.

2.5.4 Market Trends: The soft drink segment has also been witnessing slow growth after a hefty 20 percent increase during 1996-97 and there are signs of waning curiosity in CSD drinks after the initial splash of Coke and Pepsi. Coincidentally, the retail price was lower when the growth was high. This trend against CSD has raised alarm bells in Coca-Cola and it has recently chalked up plans to introduce juices, iced tea etc.

2.5.5 Seasonal Nature:

India is a tropical country known for its Monsoon season and rains. Traditionally the soft drink season starts from April to July and soft drink sales during off-season vary. Due to the vagaries in the season, many soft drink companies operate only during season time. Also, consumers in most parts of India feel consuming a chilled drink during the rainy season will cause throat or cold problems. This is partially true due to inefficient bottling practices adopted by bottling companies throughout India before Coca-Cola and Pepsi's entry. Despite Coke and Pepsi's entry, this social issue has not been addressed in their marketing efforts. Unless this issue is addressed any hike in per capita consumption during off-season will be a daunting task.

2.5.6 Packaging Costs:

80 percent of soft drinks in India are consumed in returnable containers as non-returnable containers carry a hefty tax charge, which is offset by price increases in the market. Hence retailers and bottlers alike prefer fountains and returnable glass bottles. Fountain dispensers have a limited reach due to the lack of portable water in most of the retailer outlets. In most of the packaging materials taxes are levied at the hands of the buyer as well as the seller.

2.5.7 Regional Flavours:

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India is a diverse country with more than 18 Languages and beverage preferences vary from state to state. Some southern states prefer soft drinks with 20 percent sweetness. The Mumbai market has a soft corner for milk-based beverages. The regional flavour profile depends largely on pricing of such drinks. These drinks are manufactured by small-scale manufacturers like Kalimark (Bovonto brand), Vincents (top brand), Socio etc. These brands have a distinct market following especially in the rural areas.

Recently, Coca-Cola in its marketing program has acknowledged this regional differentiation and has drawn distinctive marketing programs for different regions "think local, act local". Von Behr of Coca Cola (India), said: "The first thing that struck me when I came to India was the sheer variety, that people who've spent time here don't realize. It makes the market much more interesting. There's no one recipe for every market; so we have localized the business here by breaking it down into different managerial pieces" New marketing programs based on regional focus could soon see an increase the growth in soft drinks.

3. HISTORY OF PEPSI

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The Pepsi-Cola story itself begins with a drugstore in New Bern, North Carolina, and a pharmacist named Caleb Bradham. Bradham's aim was to create a fountain drink that was both delicious and healthful in aiding digestion and boosting energy. It would be free of the impurities found in many bottled health tonics, and it would contain none of the stronger narcotics often added to popular fountain drinks. As most pharmacies in 1896, Bradham's drugstore housed soda fountain where the smalltown clientele would meet to socialize. Electing to start his new business on a small, manageable scale, Bradham based his operation on familiar territory. Ingredients were hauled downstairs to cramped quarters where they were mixed together and then cooked in a large kettle. The syrup was subsequently poured into one-gallon jugs and five-gallon kegs to be shipped to customers. By 1902, the demand from surrounding drugstores increased so dramatically it dawned on Bradham that Pepsi-Cola was something special. On December 24, 1902, he filed incorporation papers with the state of North Carolina; in these, he indicated his plans for corporate branches in Virginia, Maryland, Pennsylvania, and New York. PepsiCo, Inc. is currently one of the most successful consumer products company in the world with annual revenues exceeding $30 billion and has more than 480,000 employees. PepsiCo, Inc. began as a successor to a company incorporated in 1931, known as Loft Inc. Once known as PepsiCo Cola, the company expanded its business and adopted its current name, PepsiCo, after a merger with Frito-Lay in 1965. This merger dramatically increased PepsiCo's market potential and set the foundation for the company's tremendous growth. PepsiCos products are recognized and are most respected all around the globe. Currently, PepsiCo divisions operate in three major US and international businesses: beverages, snack foods, and restaurants. In each of these businesses, PepsiCo has attained a leadership position as being the world leader in soft drink bottling, the world largest snack chip producer, and the world largest franchised and company operated restaurant system. PepsiCo's overall mission is to increase the value of our shareholders' investments through sales growth, investments and financial activities.

3.1 PEPSI The Indian Experience

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Previously there were Tags like Yehi Hai Right Choice Baby, Nothing Official about It & Yeh Dil mange More, which immediately ring a Bell its to be a Pepsi. But today this advertisement Tag has been changed and now its "Yeh hai Youngistaan Meri Jaan!" Pepsi is a short span of its operations in India has found a place in hearts and minds of the Indian Consumers. The success has primarily been due to the innovative and passionate Indian team, which has been built over the years. Pepsi is a trendsetter managed and run by Indians, where important decisions are taken locally. Pepsi started its operations in India in 1989 and since Pepsi Co. has set up a fully integrated operation India viz. manufacturing, research and development, marketing, distribution and franchising covering fruit/vegetable processing, export, snack foods and beverages. In 1993 Pepsi Co. set up a hold company to further accelerate growth the future through new initiatives and joint ventures. Pepsi Co. fully committed to India and the national objective of development of technology and accelerating exports and employment. It has brought in over $500 million in foreign exchange as well as technology, which is used for its global network by way of royalty, know how of dividends.

4. HISTORY OF COCA COLA

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Coca-Cola, the product that has given the world its best-known taste was born in Atlanta, Georgia, on May 8, 1886. Coca-Cola Company is the worlds leading manufacturer, marketer and distributor of non-alcoholic beverage concentrates and syrups, used to produce nearly 400 beverage brands. It sells beverage concentrates and syrups to bottling and canning operators, distributors, fountain retailers and fountain wholesalers. John Syth Pemberton, a pharmacist, first introduced Coca-Cola in the year 1886 in Atlanta, Georgia when he concocted caramel-colored syrup in a three-legged brass kettle in his backyard. He first distributed the product by carrying it in a jug down the street to Jacobs Pharmacy and customers bought the drink for five cents at the soda fountain. Carbonated water was teamed with the new syrup, whether by accident or otherwise, producing a drink that was proclaimed delicious and refreshing, a theme that continues to echo today wherever Coca-Cola is enjoyed. Coca-Cola originated as a soda fountain beverage in 1886 selling for five cents a glass. Early growth was impressive, but it was only when a strong bottling system developed that Coca-Cola became the world-famous brand it is today. Coca- Cola was the leading soft drink brand in India until 1977, when it left rather than reveal its formula to the Government and reduce its equity stake as required under the Foreign Regulation Act (FERA) which governed the operations of foreign companies in India. In the new liberalized and deregulated environment in 1993, Coca-Cola made its re-entry into India through its 100% owned subsidiary, HCCBPL, the Indian bottling arm of the Coca-Cola Company.

4.1 Important Landmarks

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1894 A modest start for a Bold Idea In a candy store in Vicksburg, Mississippi, brisk sales of the new fountain beverage called Coca-Cola impressed the store's owner, Joseph A. Biedenharn. He began bottling CocaCola to sell, using a common glass bottle called a Hutchinson.

1899 The first bottling agreement Two young attorneys from Chattanooga, Tennessee believed they could build a business around bottling Coca-Cola. In a meeting with Candler, Benjamin F. Thomas and Joseph B. Whitehead obtained exclusive rights to bottle Coca-Cola across most of the United States (specifically excluding Vicksburg) -- for the sum of one dollar. A third Chattanooga lawyer, John T. Lupton, soon joined their venture.

1900-1909 Rapid growth The three pioneer bottlers divided the country into territories and sold bottling rights to local entrepreneurs. Their efforts were boosted by major progress in bottling technology, which improved efficiency and product quality.

1916 Birth of the contour bottle Bottlers worried that the straight-sided bottle for Coca-Cola was easily confused with imitators. A group representing the Company and bottlers asked glass manufacturers to offer ideas for a distinctive bottle. A design from the Root Glass Company of Terre Haute, Indiana won enthusiastic approval in 1915 and was introduced in 1916.

1920s and 30s International expansion

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The Company began a major push to establish bottling operations outside the U.S. Plants were opened in France, Guatemala, Honduras, Mexico, Belgium, Italy, Peru, Spain, Australia and South Africa. By the time World War II began, Coca-Cola was being bottled in 44 countries.

1940s Post-war growth During the war, 64 bottling plants were set up around the world to supply the troops. This followed an urgent request for bottling equipment and materials from General Eisenhower's base in North Africa. Many of these wartime plants were later converted to civilian use, permanently enlarging the bottling system and accelerating the growth of the Company's worldwide business.

1950s Packaging innovations For the first time, consumers had choices of Coca-Cola package size and type -- the traditional 6.5-ounce contour bottle, or larger servings including 10, 12 and 26-ounce versions. Cans were also introduced, becoming generally available in 1960.

1960s New brands introduced Following Fanta in the 1950s, Sprite, Minute Maid, Fresca and Tab joined brand CocaCola in the 1960s. Today hundreds of other brands are offered to meet consumer preferences in local markets around the world.

1970s and 80s Consolidation to serve customers 16

As technology led to a global economy, the retailers who sold Coca-Cola merged and evolved into international mega-chains. Such customers required a new approach. In response, many small and medium-size bottlers consolidated to better serve giant international customers. The Company encouraged and invested in a number of bottler consolidations to assure that its largest bottling partners would have capacity to lead the system in working with global retailers.

1990s New and growing markets Political and economic changes opened vast markets that were closed or underdeveloped for decades. After the fall of the Berlin Wall, the Company invested heavily to build plants in Eastern Europe. As the century closed, more than $1.5 billion was committed to new bottling facilities in Africa.

21st Century The Coca-Cola bottling system grew up with roots deeply planted in local communities. This heritage serves the Company well today as people seek brands that honor local identity and the distinctiveness of local markets. As was true a century ago, strong locally based relationships between Coca-Cola bottlers, customers and communities are the foundation on which the entire business grows.

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5. COCA - COLA VS. PEPSI MARKETING STRATEGY

Control of market share is the key issue in this case study. The situation is both Coke and Pepsi are trying to gain market share in this beverage market, which is valued at over $30 billion a year. Just how this is done in such a competitive market is the underlying issue. The facts are that each company is coming up with new products and ideas in order to increase their market share. The creativity and effectiveness of each company's marketing strategy will ultimately determine the winner with respect to sales, profits, and customer loyalty. Not only are these two companies constructing new ways to sell Coke and Pepsi, but they are also thinking of ways in which to increase market share in other beverage categories. Although the goals of both companies are exactly the same, the two companies rely on somewhat different marketing strategies. Pepsi has always taken the lead in developing new products, but Coke soon learned their lesson and started to do the same. Coke hired marketing executives with good track records. Coke also implemented cross training of managers so it would be more difficult for cliques to form within the company. On the other hand, Pepsi has always taken more risks, acted rapidly, and was always developing new advertising ideas. Both companies have also relied on finding new markets, especially in foreign countries. In the foreign markets, Coke has been more successful than Pepsi. For example, in Eastern Europe, Pepsi has relied on a barter system that proved to fail. However, in certain countries that allow direct comparison, Pepsi has beat Coke.

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In foreign markets, both companies have followed the marketing concept by offering products that meet consumer needs in order to gain market share. For instance, in certain countries, consumers wanted a soft drink that was low in sugar, yet did not have a diet taste or image. Pepsi responded by developing Pepsi Max. These companies in trying to capture market share have relied on the development of new products. In some cases the products have been successful. However, at other times the new products have failed. For Coke, changing their original formula and introducing it as New Coke was a major failure. The new formula hurt Coke as consumers requested Classic Cokes return. Pepsi has also had its share of failures. Some of their failures included: Pepsi Light, Pepsi Free, Pepsi AM, and Crystal Pepsi. One solution to increasing market share is to carefully follow consumer wants in each country. The next step is to take fast action to develop a product that meets the requirements for that particular region. Both companies cannot just sell one product; if they do they will not succeed. They always have to be creating and updating their marketing plans and products. The companies must be willing to accommodate their target markets. Gaining market share occurs when a company stays one-step ahead of the competition by knowing what the consumer wants. Any company must always make sure that it is doing its marketing research before taking any critical decision. This way they are able to get as much feedback as possible from consumers. Next, analyze this data as fast as possible, and then develop the new product based upon this data. Once the product is developed, get it to the marketplace quickly. Time is a very critical factor. With all of these factors taken into consideration any company can overtake its competitor in respect of the market share.

6. PESTICIDE FIASCO

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In 2003, the Centre for Science and Environment (CSE), a non-governmental organization in New Delhi, said aerated waters produced by soft drinks manufacturers in India, including multinational giants PepsiCo and The Coca-Cola Company, contained toxins, including lindane, DDT, malathion and chlorpyrifos pesticides that can contribute to cancer, a breakdown of the immune system and cause birth defects. Tested products included Coke, Pepsi, 7 Up, Mirinda, Fanta, Thums Up, Limca, and Sprite. CSE found that the Indian-produced Pepsi's soft drink products had 36 times the level of pesticide residues permitted under European Union regulations; Coca Cola's 30 times. CSE said it had tested the same products in the US and found no such residues. However, this was the European standard for water, not for other drinks. No law bans the presence of pesticides in drinks in India. The Coca-Cola Company and PepsiCo angrily denied allegations that their products manufactured in India contained toxin levels far above the norms permitted in the developed world. But an Indian parliamentary committee, in 2004, backed up CSE's findings and a government-appointed committee, is now trying to develop the world's first pesticides standards for soft drinks. Coke and PepsiCo opposed the move, arguing that lab tests aren't reliable enough to detect minute traces of pesticides in complex drinks. On December 7, 2004, India's Supreme Court ruled that both PepsiCo and competitor The Coca-Cola Company must label all cans and bottles of the respective soft drinks with a consumer warning after tests showed unacceptable levels of residual pesticides. Both companies continue to maintain that their products meet all international safety standards without yet implementing the Supreme Court ruling. As of 2005, The CocaCola Company and PepsiCo together hold 95 percent market share of soft-drink sales in India. PepsiCo has also been alleged to practice "water piracy" due to its role in exploitation of ground water resources resulting in scarcity of drinking water for the natives of Puthussery panchayat in the Palakkad district in Kerala, India. Local residents have been pressuring the government to close down the PepsiCo unit in the village.

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In 2006, the CSE again found that soda drinks, including both Pepsi and Coca-Cola, had high levels of pesticides in their drinks. Both PepsiCo and The Coca-Cola Company maintain that their drinks are safe for consumption and have published newspaper advertisements that say pesticide levels in their products are less than those in other foods such as tea, fruit and dairy products. In the Indian state of Kerala, sale and production of Pepsi-Cola, along with other soft drinks, was banned by the state government in 2006, but this was reversed by the Kerala High Court merely a month later. Five other Indian states have announced partial bans on the drinks in schools, colleges and hospitals.

6.1 Social implications

The first time when CSE conducted tests on samples of 12 soft drinks, it found out that the pesticide residue levels in these samples are as high as 30 to 35 times that of the levels acceptable by EEC norms. Indian soft drinks market is not under any regulation. Prevention of Food adulteration act 1954 does not include soft drinks. None of the BIS standards that existed before August 2003 had any guidelines or set criteria for the residue levels of pesticides in the soft drinks. But different international agencies have set standards for the residue levels of pesticides. The European Economic Community (EEC) sets the maximum admissible concentration of individual pesticides and related products in drinking water at 0.1 parts per billion to ensure that the toxicity is not dangerous to human beings. For a few pesticides like aldrin, dieldin and heptachlor epoxide the admissible limit is even more stringent, i.e., 0.03 parts per billion.

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The samples tested were found to contain four pesticides more often than others Lindane, DDT and its metabolites, Malathion and Chlorpyrifos. Each of these can have detrimental effects on the general well-being of human beings. Lindane accumulates in the fat tissues and can cause damage to liver, kidney and is suspected to be carcinogenic in nature. DDT and its metabolites are found in almost 80 percent of the samples tested. DDT and its metabolites have negative impact on the potency levels of human beings and can increase the incidence risk of breast cancer among the female population. Chlorpyrifos is suspected to effect the functioning of the brain. It also affects the immunological system of the body. Malathion is also carcinogenic in nature. Some of those who sympathize with PepsiCo in this whole pesticide saga say that the per capita consumption of soft drinks in India is too small for any of these pesticide residues in the soft drinks to have any appreciable effect if at all on the consumers. Though this may be true to certain extent, it has been scientifically proven that the excretion of some of the aforementioned pesticides from the human body is extremely slow even after the intake ceases. Moreover, all the aforementioned pesticides are proven to be highly carcinogenic in nature. The main reason cited for the highly unacceptable levels of pesticide residue levels in the soft drinks is mainly because of the negligence on the part of the companies to process the ground water before using it in the manufacturing process. The ground water in general, is contaminated because of unregulated and indiscriminate use of pesticides in India. The public response to CSEs findings has been very sharp as reflected by steep drop in sales of the soft drinks immediately following the release of CSEs findings. Though there was no hue and cry all over, the general public seems to have taken strong notice of the fact that all is not well with the soft drinks produced and marketed by the Cola Companies. The blatant denials by the head honchos did not allay the fears of the general public.

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6.2 Political implications

The governments response initially was guarded in nature. The government has conducted its own investigation into the matter and came out with the verdict that though the samples did contain pesticide residues, the levels were not as high as those stated by CSE. Lack of any specific guidelines or set criteria in this case has meant that the Cola Companies have not flouted any legality and could not be wronged for what they were doing. One positive that came out was that the government started tinkering with the idea of coming up with standards for acceptable levels of pesticide residues in the soft drinks and other beverages. The political ramifications of the issue are there for all to see. The new UPA government that came into the power in May 2004 could not force the issue and this saw the pesticide issue taking backburner. Three years after the issue first saw the light, there was not much progress from the side of Pesticide Residue Sub-Committee of CCFS the government supported body. CSE came up with fresh tests and still highly unacceptable levels of pesticide residues, this time taking the new BIS standards and guidelines for acceptable limits. Four states ruled by the opposition at the center, NDA, i.e., Gujarat, Madhya Pradesh, Rajasthan and Chattisgarh banned the sale of Coke and Pepsi in educational and government institutions. Karnataka and Kerala followed the suit, with the later even banning production of the soft drinks in the state. Overall, the government did not play a proactive role in this issue as can be seen from the fact that three years after the issue first cropped up, the government is yet to come up with the standards for pesticide residue levels in the soft drinks. The fact that the ministry of health and CSE do not see eye to eye on the matter did not help the cause. Somehow, the matter has deviated substantially from the core issue, i.e., carcinogenic pesticide residue levels in the primary ingredient water. The CCFS is known to have been expending resources and time on the obesity inducing sugar, which anyway is not the major constituent of the soft drink composition. Moreover, the expert committee constituted by the ministry of health faulted the CSEs methodology of conducting tests and hence the credibility of its tests.

23

6.3 Economic implications

Despite of the initial knee-jerk reaction, the general public by and large has not been paying much attention to the Pepsi pesticides issue. The ban imposed by some of the states will hit the profitability of the companys operations. The thing really worth mentioning is the reluctance of both the Cola Companies in accepting the fact that they have been following different safety standards at different places. All through the issue, the chairman of Pepsi India Holding Rajeev Bakshi was adamant that Pepsis products in India are as safe as anywhere else. While it may be true that extremely low levels of per capita consumption render any fears of toxic effects of pesticides unreasonable, the reluctance of the Cola Companies in accepting the fact that the ground water used in the manufacturing process is not sufficiently treated, is an ominous sign to the consumer. The cost involved with such processing and subsequent testing of the water samples for residue levels might not be exorbitant in comparison to the amount of damage from not taking any such initiative might cause in the long run. In the age of triple bottomline, the overall behaviour of Pepsi India in the pesticides issue leaves a lot desired.

24

7. CONSUMER BEHAVIOUR

7.1 Introduction
Consumer behaviour is the study of why, how, what, when, where and how often do consumers buy and consume different products and services. Knowledge of consumer behaviour is helpful to the marketer in understanding the needs of his different consumer segment and developing appropriate marketing strategies for each. It is also useful for the marketer in developing and understanding of how consumers respond to the various marketing stimuli, which he provides in term of the products, price, promotion, and place. If the marketer can correctly identify these stimuli that evoke a positive response in the consumer he can very easily design effective marketing strategies using these stimuli. A consumers decision to purchase a product is influenced by number of variables, which can be classified into four categories, namely psychological, personal, social and cultural. Consumers differ from one another in terms of their sex, age, education, income, family life cycle stage, personality and lifestyle and other personal characteristic, which influence their buying behaviour. The need of elderly consumers is different from those young consumers. Newly married couples have needs, which are totally different from older married couples. The term consumer behaviour can be defined, as the behaviour that consumers display in searching for, purchasing, using, evaluating, and disposing of products, services and ideas, which they expect, will satisfy their needs.

25

7.2 Major Factors Influencing Buying Behaviour

A consumers buying behaviour is influenced by cultural, social and personal factors. Cultural factors exert the broadest and deepest influence.

7.2.1 Cultural Factors:

Culture, subculture, and social class are particularly important influences on consumer buying behaviour. Culture is the fundamental determinant of a persons wants and behaviour. Each culture consists of smaller subcultures that provide more specific identification and socialization for their members. Subcultures include nationalities, religions, racial groups, and geographic regions. Social classes are relatively homogenous and enduring divisions in a society, which are hierarchically ordered and whose members share similar values, interests and behaviour. Social classes show distinct product and brand preferences in many areas, including clothing, home furnishing, leisure activities and automobiles.

7.2.2 Social Factors

Consumer Behaviour is influenced by Social Factors like reference group, family and role and status also influence consumer behaviour.

Reference Groups
A persons reference groups consist of all the groups that have a direct influence on the persons attitude or behaviour. Some groups are Primary group such as family, friends, neighbours and co-workers with whom the person interacts continuously and informally. Their reference group in at least three ways significantly influences people: 26

1 2 3

Reference group exposes individuals to new behaviours and lifestyles. They influence the persons attitude and self-concept. They create pressure for conformity that may affect persons actual product and brand choices.

An opinion leader is the person in informal products related communication that offers advice or provides information about a specific product or product categories.

Family
This constitutes the most influential primary reference group. A person belongs to the family of orientation, which consists of ones parents and siblings. A person acquires an orientation towards religion, politics and economies and a sense of personal ambition, self worth and love. Even if the buyer no longer interacts very much with his or her parents, the parents influence on the buyers behaviour can be significant. In country like India, where parents live with their grown children, their influence can be substantial. One must remember there is a shift in the trend due rise in employment of women, is especially in non-traditional jobs. The standards conception women buy all the household goods is changing studies have revealed that husband too have started taking interest in household purchase.

Roles And Status

A person participates in many groups throughout his life in a Family, clubs, and organization. A persons position in each group can be defined in terms of role and statues. Role consists of the activities that a person is accepted to perform carries status.

7.2.3 Personal Factors

27

Buying decision is influenced by buyers age and stage in life cycle, occupation, economic circumstances, life style and personality and self-concept.

Age And Stages In Life Cycle

While consumption of soft drinks are considered, as the age increases the frequency of taking soft drinks goes on decreasing. It is observed that human being love more of soft drinks when they are young (teen age) but the same human reduces his consumption frequency when he grows older. Consumption is also shaped by family life cycle and psychological life cycle stages.

Economic Circumstances
Peoples economic circumstances consist of their spendable income, savings and assets, debts, borrowing power, of income sensitive goods pay constant attention to trends in personnel income, savings and interest rates. If economic indication points to recession, marketers can step to redesign, reposition and reprice their products so they continue to offer value to target customer.

Lifestyle
A persons life style is persons pattern of living in the world as expressed in persons activities, interest and opinions. Marketer search for relationship between their products and lifestyle groups.

Personality And Self-Concept

Personality is usually described in terms of such traits as self-confidence, dominance, sociability, and adaptability. Personality can be a useful variable in analysing consumer behaviour, provided that personality types can be classified accurately and that strong correlation exit between certain personality types and products or brand choices. Related to personality is a persons self-concept.

7.3 CONSUMER BEHAVIOR: THE MARKETING PSYCHOLOGY

28

7.3.3 Introduction
The study of consumers helps firms and organizations improve their marketing strategies by understanding issues such as how

The psychology of how consumers think, feel, reason, and select between different alternatives (e.g., brands, products); The psychology of how the consumer is influenced by his or her environment (e.g., culture, family, signs, media); The behavior of consumers while shopping or making other marketing decisions; Limitations in consumer knowledge or information processing abilities influence decisions and marketing outcome; How consumer motivation and decision strategies differ between products that differ in their level of importance or interest that they entail for the consumer. How marketers can adapt and improve their marketing campaigns and marketing strategies to more effectively reach the consumer.

7.3.4 Four main applications of consumer behavior:

29

The most obvious is for marketing strategyi.e., for making better marketing campaigns. For example, by understanding that consumers are more receptive to food advertising when they are hungry, we learn to schedule snack advertisements late in the afternoon. By understanding that new products are usually initially adopted by a few consumers and only spread later, and then only gradually, to the rest of the population, we learn that (1) companies that introduce new products must be well financed so that they can stay afloat until their products become a commercial success and (2) it is important to please initial customers, since they will in turn influence many subsequent customers brand choices.

A second application is public policy. In the 1980s, Accutane, a near miracle cure for acne, was introduced. Unfortunately, Accutane resulted in severe birth defects if taken by pregnant women. Although physicians were instructed to warn their female patients of this, a number still became pregnant while taking the drug. To get consumers attention, the Federal Drug Administration (FDA) took the step of requiring that very graphic pictures of deformed babies be shown on the medicine containers.

Social marketing involves getting ideas across to consumers rather than selling something. Marty Fishbein, a marketing professor, went on sabbatical to work for the Centers for Disease Control trying to reduce the incidence of transmission of diseases through illegal drug use. The best solution, obviously, would be if we could get illegal drug users to stop. This, however, was deemed to be infeasible. It was also determined that the practice of sharing needles was too ingrained in the drug culture to be stopped. As a result, using knowledge of consumer attitudes, Dr. Fishbein created a campaign that encouraged the cleaning of needles in bleach before sharing them, a goal that was believed to be more realistic.

As a final benefit, studying consumer behavior should make us better consumers. Common sense suggests, for example, that if you buy a 64 liquid ounce bottle of laundry detergent, you should pay less per ounce than if you bought two 32 ounce bottles. In practice, however, you often pay a size premium 30

by buying the larger quantity. In other words, in this case, knowing this fact will sensitize you to the need to check the unit cost labels to determine if you are really getting a bargain. There are several units in the market that can be analyzed. Our main thrust in this course is the consumer. However, we will also need to analyze our own firms strengths and weaknesses and those of competing firms. Suppose, for example, that we make a product aimed at older consumers, a growing segment. A competing firm that targets babies, a shrinking market, is likely to consider repositioning toward our market. To assess a competing firms potential threat, we need to examine its assets (e.g., technology, patents, market knowledge, awareness of its brands) against pressures it faces from the market. Finally, we need to assess conditions (the marketing environment). For example, although we may have developed a product that offers great appeal for consumers, a recession may cut demand dramatically.

8. CELEBRITY ENDORSEMENT
Today 'Celebrity Endorsement' has attracted immense debate on whether it really contributes to the brand building process or whether it is just another lazy tool to make

31

the brand more visible in the minds of the consumers. Although it has been observed that the presence of a well-known personality helps in solving the problem of overcommunication that is becoming more prominent these days, there are few undesirable impacts of this practice on the brand. The theories like 'Source Credibility Theory, Source Attractiveness Theory and Meaning Transfer Theory' provide a basis on which the methodology of celebrity endorsement works and also explains how the process of the celebrity endorsement influences the minds of the consumers. Firms invest huge amounts as advertising expenditure for hiring the right celebrity. However there lies uncertainty with respect to the returns that the company might be able to garner for the brand. The issue of matching the values of the celebrity with the brand values is also very important, i.e. getting the right celebrity to endorse the right brand. Consumers perceive the brand as having superior quality because it has been endorsed by a credible source. This makes endorsement as one of the indictors of quality for any brand. Corporate credibility along with endorser credibility plays a significant role in the attitude of the consumer towards the brand and the advertisement respectively. On the other hand, the over popularity of the celebrity sometimes overshadows the brand. If the celebrity is involved in multiple endorsements, it tends to create confusion among consumers and hence negatively affects the perception of the advertisement and the brand. Hence, to say clearly whether the practice of celebrity endorsement impacts positively or negatively to the brand still remains a debate.

Firms endorse celebrity for a variety of reasons. It might be the life experience of the celebrity that fits the advertising message or the endorser's high appeal with the firm's

32

consumer target group. Studies associated with the market effect of celebrity endorsement suggest that consumers positively value the use of celebrity endorsers in the advertisements. Firms invest significant money in putting together brands and organisations with endorser qualities such as attractiveness, likeability, and trustworthiness. But today's dynamic market conditions make these investments unviable.

8.1 History
Celebrities are involved in endorsing activities since late nineteenth century2. The advent of celebrity endorsements in advertising in India began when Hindi film and TV stars as well as sportspersons began encroaching on a territory that was, until then, the exclusive domain of models3. One of the first sports endorsements in India was when Farokh Engineer became the first Indian cricketer to model for Brylcream. The Indian cricket team now earns roughly Rs. 100 crore through endorsements. There was a spurt of advertising, featuring stars like Tabassum (Prestige Pressure Cookers), Jalal Agha (Pan Parag), Kapil Dev (Palmolive Shaving Cream) and Sunil Gavaskar (Dinesh Suitings).

8.2 Success Of Celebrity Endorsements

Does celebrity endorsement really work? Theoretically yes, because the qualities associated with the endorser are associated with the brand and the brand therefore remains at the top of the consumer's mind. However one needs to realize that the impact

33

of an endorser cannot be sustainable in all product categories and in all the stages of brand life cycles. It really depends upon the type of product. If it is a 'functional brand', then the product itself is the hero. Here any celebrity association with the brand without corresponding performance of the product will not be sustainable. While incase of 'image brands', like the categories of soaps, soft drinks, cigarettes etc., where it is difficult to distinguish between the products, celebrity endorsements help to distinguish between the brands at an emotional level. A research conducted by Synovate7, a global market research firm, revealed that 47 percent people would be more likely to buy a brand that was endorsed by their favorite celebrity. Pepsi Co. has used a variety of celebrities including Aishwarya Rai, Hrithik Roshan, Amitabh Bachchan, Kareena Kapoor, Rahul Khanna, Fardeen Khan, Sachin Tendulkar etc. Amongst advertisements featuring celebrities, Pepsi tops the heap with the highest recall of 70 percent, while arch rival Coke is lower across all markets with 52 percent recall. This proves that Pepsi has really exploited the use of celebrities in their advertisements and has worked8. Hindustan Lever's 'Lux' soap in India has been using popular film actresses to endorse the soap since its launch four decades ago implying that they owe their stunning looks to the brand. This consistent message hence reinforces the brand values and has been successfully able to position the soap rightly as the 'beauty soap'9 .

It would be difficult to judge the direct effect of celebrity endorsement on the sales or profits of the company. On Amitabh Bachchan endorsing RIN, an HLL spokesperson says that it was too early to gauge the success of 'Rin' in terms of sales and that though Dabur healthcare products' sales had improved, the increase could not be solely attributed to him. Similarly, there are also cases wherein there was a dramatic change in the sales

34

figure after the endorsements. For example Rahul Malhotra, Associate Director Marketing, P&G India quotes "Certainly, it has helped us promote our brand 'Head & Shoulders'. Last year, we were ranked as No. 2 and this year we are market leaders in this segment with over 45 percent market share". D. Garg, Vice-President (Marketing), Dabur India Ltd quotes, "A celebrity does help in increasing brand sales, but only if he/she is selected carefully and used effectively. The personality of the brand and the celebrity have to complement each other and the selection of the celebrity is, therefore, very important."

8.3 Positive Impacts of Celebrity Endorsement on the Brand

Approval of a brand by a star fosters a sense of trust for that brand among the target audience. This is especially true in case of new product11. Celebrities ensure attention of the target group by breaking the clutter of advertisements and making the advertisement and the brand more noticeable. A celebrity's preference for a brand gives out a persuasive message and hence, because the celebrity is benefiting from the brand, the consumer will also benefit. There is a demographic and psychographic connection between the stars and their fans. Demographic connection establishes that different stars appeal differently to various demographic segments i.e. age, gender, class, geography etc., while psychographic connection establishes that stars are loved and adored by their fans. Some stars have a universal appeal and therefore prove to be a good bet to generate interest among the masses. Another invaluable benefit from celebrity endorsements is the public relation opportunities.

Looking at the effect of celebrity endorsement on the wealth of a company a classic example of Michael Jordan can be used. At the time of rumors of Michael Jordan returning to NBA in 1995, he was endorsing products of General Mills (Wheaties), Mc'Donalds (Quarter Pounders, Value Meals), Nike (Air Jordan), Quaker Oats (Gatorade) and Sara Lee (Hans Underwear). Study conducted by Mathur et al. associated with Jordan's endorsements shows that the anticipation of Jordan's return to NBA, and the 35

related increased visibility for him resulted in increase in the market adjusted values of his client firms of almost 2 percent, or more than $1 bn in stock market value. From this study one can observe that the major celebrity endorser with rumors or otherwise has a tremendous potential to influence the profitability of endorsed products. Semi-partial endorsement indicates that when a company uses famous characters from any TV soaps for brand endorsements, consumers tend to relate to the character that he or she plays in the soap and hence can attract more credibility. For example, Smriti Irani who plays 'Tulsi' in a famous soap has garnered a lot of support from the middle-class housewife today. If she would endorse a brand, there would be more relativity and credibility.

8.4 Negative impacts of Celebrity Endorsement on the brand

More often talked about is the extreme usage of a celebrity called 'lazy advertising', that is inadequate content masked by usage of a celebrity. A good example is the use of Boris Becker by Siyaram and Steve Waugh by ANP Sanmar. Also as said earlier, associating with a star, in itself does not guarantee sales. There is also the fear of Brand-celebrity disconnect which points out that if the celebrity used represents values that conflict with the brand values, the advertising would create conflict in the minds of the target audience.

Clutter in brand endorsements is very prominent these days and such kind of overexposure can be bad for the brand as the recall value drops by a huge margin. A popular drawback of celebrity endorsement is the 'Vampire Effect' or the celebrity overshadowing the brand. Some viewers forget the brand that a celebrity is approving. Others are so spellbound by the personality of the celebrity that they completely fail to notice the brand being advertised. Two new drawbacks can be seen these days what marketers call Celebrity Trap and Celebrity Credibility. Celebrity trap is when the celebrity becomes an addiction for the marketing team and the task to find substitutes becomes more and more

36

difficult, leading to surfeit of celebrities. Celebrity credibility refers to skepticism by the consumers regarding the celebrities, especially when there is anything negative regarding the celebrity associated with the brand in the news, then brand is bound to be affected. For example, Air Jordan's generated revenue sales of $130 million in the first year. The sales dropped miserably in the second year when Jordan missed 62 games due to a broken foot18. Another main worry of the advertisers is that their celebrity endorser would get caught in a scandal or an embarrassing situation. Multiple product endorsement also has a negative impact on customers' purchasing intentions. Tripp et al. investigated the effects of multiple product endorsement by celebrities on customers' attitudes and intentions. They found that the number of products a celebrity endorses negatively influences consumer perception of the endorser and the advertising itself. It was suggested that when as many as four products are endorsed, celebrity credibility and likeability, as well as attitude towards the ad, may attenuate. Superstar Amitabh Bachchan endorses multiple brands like Pepsi, Mirinda, ICICI, BPL, Parker pens, Nerolac, Dabur, Reid & Taylor, Maruti Versa, Hajmola, Tide, Cadbury and a few social messages. It has worked in some cases, while in some cases it has not. D. K. Jain, Chairman and President, Luxor Writing Instruments Pvt. Ltd, the marketer of the Parker brand said, "Using Amitabh Bachchan as our brand ambassador has helped in strengthening our brand image and recall within the target audience". Tarun Joshi, Communications Custodian, Reid & Taylor said, "Amitabh Bachchan is an icon with universal appeal and has helped us to reach out to the real 'Bharat.' In fact, agents and retailers have told us that already customers have started asking about the 'Amitabh wali suiting.'" Incase of Nerolac Paints, which was endorsed by Amitabh Bachchan, around 80 percent of the respondents when asked to associate Bachchan with any paint, did so with Asian Paints, which is the biggest competitor of Nerolac20. The budget or cost is an important factor for celebrity endorsement21. Depending on the status of the celebrity, remuneration could run into millions of rupees for several years or may also include a profit sharing plan. For example when S. Kumar's used Hrithik

37

Roshan for their launch advertising for Tamarind, they reckoned they spent 40 - 50 per cent less on media due to the sheer impact of using Hrithik. Sachin's endorsements got him $18 million over five years. When Aamir first endorsed Pepsi in 1995, he received Rs 17 lakhs for it; his Coke commercials in 1999 got him Rs 2 crore. Hrithik Roshan in his highflying days reportedly made over Rs. 20 crore in endorsements and events by 200122. However, a number of brands have been built without celebrity endorsement. For some of their brands, Hindustan Lever and Procter & Gamble do not believe in celebrity endorsement because they think that consumers, especially housewives, are more likely to identify with a layperson on screen than a celebrity. Procter & Gamble launched its 'Rejoice' brand in India with testimonials from ordinary women in their TV advertising. Few more examples of this will be Lifebuoy, Wheel, Dettol, Close Up, Fevicol etc.

8.5 Conclusion
Whether Celebrity endorsement has a positive or a negative impact on the brand is a debate that is open to interpretation. But till the time the corporate world continues to foot fancy bills of celebrity endorsers and till consumers continue to be in awe of the stars, the party is not likely to break up.

9. MARKETING RESEARCH SYSTEM

Marketing research is the systematic design, collection, analysis and reporting of data and findings relevant to specific marketing situation facing the company. Marketing managers may request a market survey of a product, preference test, a sales forecast by region, or research advertising effectiveness.

Marketing Research Process Involves Few Steps:

38

STEP 1: Define The Research Objectives: The first step is to define and agree on the research objective. Well-defined objectives make it easier possible to accomplish the mission. STEP 2: Developing The Research Plan: The second stage is to develop a research plan for gathering the needed information. This calls for decisions on the data sources, research approach, research instruments and contact methods. STEP 3: Analysing The Information: This is the most important step as the final output of the research depends on how efficiently is it analysed. One can make use of data sampling, frequency distribution and other related statistical techniques.

10. SURVEY REPORT

Table 1.1 Age-wise distribution of samples
Age Group 10-17 18-25 26-34 34& above Total Sample Distribution 22 30 24 24 100

Fig. 1.1 Age-Wise Distribution of Samples

39

Age-Wise Distribution Of Samples

35 30 25 20 15 10 5 0 10-17 18-25 26-34 34& above 22 30 24 24

Observations:
A survey was carried out in Mumbai in the month of June. A total sample space of 100 respondents was interviewed and the above graph reveals the facts. The method of random and judgment sampling was considered. 22 respondents from the Age Group of 10 17 years were interviewed. 30 and 24 respondents were interviewed from the Age Groups of 18 25 years, 26 33 years respectively and the final group comprised of 24 respondents in the Age Group of 34 and Above. These candidates were interviewed near school, colleges and offices

Table 2.1 Consumption Pattern

Consumption Pattern Daily 4-6 TIMES A WEEK 2-3 TIMES A WEEK ONCE IN A WEEK ONCE IN 10 DAYS ONCE IN 2 3 WEEK ONCE IN A MONTH EVEN LESS Total 10-17 2 8 7 3 1 1 0 0 22 18-25 4 7 4 4 3 4 3 1 30 26-33 34 & Above 2 0 2 1 4 4 5 2 3 5 2 2 4 6 2 4 24 24 Total 8 13 19 14 12 9 14 11 100

40

Fig. 2.1 Consumption Pattern

Consumption Pattern

11% 14%

8%

13%

9% 12%
Daily ONCE IN 1 DAYS 0 4-6 TIMES A WEEK ONCE IN 2 3 W EEK

19% 14%
2-3 TIMES A WEEK ONCE IN A MONTH ONCE IN A WEEK EVEN LESS

Fig. 2.2 Age Wise Consumption Pattern

A eW e C n u p nP tte g is o s m tio a rn
9 8 7 6 5 4 3 2 1 0

ONCE IN 2

4-6 TIMES

2-3 TIMES

ONCE IN

3 WEEK

A MONTH

ONCE IN

10 DAYS

A WEEK

A WEEK

ONCE IN

A WEEK

EVEN

1 7 0-1

1 -2 8 5

2 -3 6 3

34&a o e bv

Observations:
On an average only 8 percent of the total respondents consume soft drinks daily and around 13 percent consume soft drinks almost 4-6 times a week. Around 19 percent of the respondents consume soft drinks 2 3 times a week. Most of the people following this consumption pattern belong to the age group of 10 17. 25 percent of the respondents consume soft drinks only once in a month or even less than that. Majority of which belong to the Age Group of 34 and above.

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LESS

Daily

Majority of the respondents in the age group of 18 25 prefer to have soft drinks 4 6 times a week.

Analysis:
Overall 21 percent of the total respondents consume soft drinks frequently. The above consumption pattern is followed mainly by people from age group below 25 years. People from this age group are the ones going to schools and colleges so they are most likely to consume the soft drinks People in the Age Group of 34 and Above are the ones who consume soft drinks the least. This is mainly due to the fact that they are more health conscious. People in the age group of 26 33 are the ones who neither consume too much nor completely avoid soft drinks. On an average, the people in this age group consume soft drinks once in a week.

Table 3.1 Reasons For Consumption Pattern

Reasons For The Consumption Pattern `10 - 17 18 - 25 Taste 5 4 Refreshing 9 7 To Change Mood 3 1 On An Outing 2 7 Not Good For Health 1 4 Do Not Prefer 2 6 Others 0 1 Total 22 30 26 - 33 34 & ABOVE Total 4 4 17 3 1 21 2 1 6 9 4 22 2 3 10 4 9 21 0 2 3 24 24 100

Fig. 3.1 Reasons For Consumption Pattern

42

Reasons For Consumption Pattern

3% 21% 22% 10%
Taste Refreshing To Change Mood On An Outing

17% 21%

6%
Not Good For Health Do Not Prefer Others

Fig. 3.2 Age - Wise Reasons For Consumption Pattern

Reasons For Consumption Pattern

10 8 6 4 2 0
`10 - 17 18 - 25 26 - 33

r o F d o o G t o N

r e f e r P t o N o D

Observations:
21 percent of the respondents consume soft drinks because they find it Refreshing. Majority of them belong to the Age Groups of 10 17 and 18 25. Another 21 percent of the respondents Do not prefer to have too much of soft drinks. Majority of them belong to the Age Group of 34 and Above. 22 percent of the respondents prefer to consume soft drinks mostly during Outings. Most of them belong to the Age Group of 26 33. Also there are 10 percent respondents who dont consume too much soft drinks because they find it Not good for Health. This is opinion is common across all the Age Groups.

e t s a T

g n i h s r f e R

d o o M e g n a h C o T

43

g i t u A n O

h t l a e H

34 & ABOVE

Analysis:
People in the Age Groups of 10 17 and 18 25 usually dont think too much while consuming a soft drink. They only look at soft drink as a way of refreshment. Respondents in the Age Group of 34 and Above are usually health conscious. This is also shown by their consumption pattern in the previous graph (Fig. 2.2) Respondents in the Age Group of 26 33 mostly like to have soft drinks along with their hard drinks [alcoholic beverages] when they go for an outing. People in All Age Groups are aware of the fact that soft drinks are not so good for health but that stops very few people from consuming them on a frequent basis.

Table 4.1 Brand Preference

Brand Coke Pepsi Total

10-17 9 13 22

18 - 25 10 20 30

26 - 33 34 & ABOVE 18 14 6 10 24 24

Total 51 49 100

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Fig. 4.1 Brand Preference

Brand Preference
25 20 15 10 5 0 10-17 18 - 25
Coke

26 - 33
Pepsi

34 & ABOVE

Observations:
51 percent of the total respondents prefer COKE over PEPSI. However in the Age Groups of 10 17 and 18 25, 59 percent and 67 percent respectively prefer PEPSI. While in the Age Groups of 26 33 and 34 and Above, 75 percent and 58 percent respectively prefer COKE.

Analysis:
Coke and Pepsi are almost neck-to-neck when it comes to the overall Pepsi has lately targeted the youth with its Youngistan Campaign, which response with Coke having a slight edge over Pepsi. has shown in the response as the Age Groups of 10 17 and 18 25 overwhelmingly favour Pepsi. The Youth Driven campaign of Pepsi may have contributed to the Older Age Group favouring Coke.

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Table 5.1 Packaging Preferred

Packaging 250ml 330ml 500ml 1.5 l 2l Tin Total 10-17 6 1 8 0 0 7 22 18 - 25 9 1 5 2 0 13 30 26 - 33 13 3 4 0 0 4 24 34 & ABOVE 9 2 5 1 2 5 24 Total 37 7 22 3 2 29 100

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Fig. 5.1 Packaging Preferred

Packaging Preferred
40 35 30 25 20 15 10 5 0 250ml 330ml
10-17

500ml
18 - 25

1.5 l
26 - 33

2l
34 & ABOVE

Tin

Observations:
37 percent of the respondents prefer to have their soft drinks in 250 ml bottles. Majority of them belong to the Age Group of 26 33. 29 percent of the respondents prefer to have their soft drink in a Tin. This is response is dominated by the age Group of 18 25. Only 2 percent of the respondents like to consume soft drink in 2 litre bottles. This category of people solely consists of respondent in the Age Group of 34 and Above.

Analysis:
The 250 ml bottles are relatively cheaper than the Tins and also easily available as compared to the 330 ml bottles. People in the Age Group of 18 25 like tin because it looks cool as well as they can take it along with them and no need to complete the drink at the store itself. The 2 litre bottles are the most economical and the entire family can have it. This makes it a good choice for the 34 and above category.

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Table 6.1 Consumption In Multiplexes

Response Yes No Total 10-17 14 8 22 18 - 25 18 12 30 26 - 33 14 10 24 34 & ABOVE 9 15 24 Total 55 45 100

Fig. 6.1 Consumption In Multiplexes

48

Consumption In Multiplexes
20 15 10 5 0 10-17 18 - 25
Yes

26 - 33
No

34 & ABOVE

Observations:
55 percent of the overall respondents consume soft drinks in Multiplexes irrespective of the high price charged. The high percentage of respondents following the above practice belongs to the Age Groups of 10 17, 18 25 and 26 33. The people of this age group frequent multiplexes. Only 37.5 percent of the total respondents in the Age Group 34 and Above consume soft drinks in Multiplexes due to the price factor and the health reason.

Analysis:
Due to the growing standard of living of the people in the urban areas and with the increase in the number of multiplexes, the number of people visiting multiplex has increased in the past few years. Majority of the urban population dont mind consuming soft drinks in multiplexes.

49

People in the Age Group of 34 and Above are more cost

conscious as they have dependent family to support. So these people may not find consuming soft drinks at multiplexes worthy enough. People in the Age Groups of 10 17, 18 25 and 26 33 usually go by their instincts while taking minor decisions such as consuming soft drinks and so dont mind consuming soft drinks in Multiplexes.

Table 7.1 Flavour Preference

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Flavour 10-17 Cola 3 M ango 4 Orange 3 Soda 3 Lemon 2

18 - 25 4 2 2 3 2

26 - 33 34 & ABOVEAverage 3 2 3 2 2 2.5 2 2 2.25 4 4 3.5 1 3 2

Fig. 7.1 Flavour Preference

Flavour Preference
5 4 3 2 1 0 10-17
Cola

18 - 25
Mango Orange

26 - 33
Soda

34 & ABOVE
Lemon

Observations:
Soda flavoured drink is preferred by most of the respondent as it gets a rating of 3.5 out of 5. It is most preferred by the Age Groups of 26 33 and 34 and Above. Respondents from the Age Group of 10 17 prefer the Mango flavoured drink. Respondents from Age Group of 18 25 respondents prefer the Cola Flavoured drink . Orange and Lemon Flavoured Drinks are the least preferred ones.

Analysis:

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A major portion of People in the Age Groups of 26 33 and 34 and Above prefer the Soda Flavored Drinks as it goes well with any drink. This also confirms the finding that people above age of 26 like to consume soft drink along with the alcoholic beverages.

People in the Age Group of 10 17 are relatively young compared to the other Age Groups. Mango being a Fruit Drink attracts them and also the fact that it is non-carbonated makes them a good choice for this Age Group.

Cola Flavoured drinks have a much more Youth Oriented advertising campaign, which makes them a hit among the younger Age Group. The only reason for the non - preference of Orange and Lemon Flavoured Drinks is due to the fact that fresh juice of orange and lemon is easily available and preferred rather than having in the aerated form.

Table 8.1 Brand Preferred In Cola Flavour

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Brand Pepsi Coke Thumps up Total

10-17 6 11 5 22

18 - 25 6 11 13 30

26 - 33 34 & ABOVE 8 10 8 7 8 7 24 24

Total 30 37 33 100

Fig. 8.1 Brand Preferred In Cola Flavour

Cola Flavour
14 12 10 8 6 4 2 0 10-17 18 - 25 26 - 33 34 & ABOVE

Pepsi

Coke

Thumps up

Observations:
37 percent of the total respondents prefer Coke over Pepsi and Thumps up. Majority of them belong to the Age Group of 10 17. However in the Age Group of 18 25 people prefer Thumps up. Respondents from Age Group of 34 and Above prefer Pepsi to Coke and Thumps up.

Analysis:
The above observations are due to the fact that Pepsi is much sweeter compared to the other two while Thumps is much stronger than the other two. So this makes Coke the ideal choice, which is neither too sweet nor too strong.

Table 8.2 Brand Preferred In Mango Flavour

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Brand Mangola Maaza Total

10-17 11 11 22

18 - 25 18 12 30

26 - 33 34 & ABOVE Total 15 15 59 9 9 41 24 24 100

Fig. 8.2 Brand Preferred In Mango Flavour

M ango Flavour
20 15 10 5 0 10-17 18 - 25
Ma g n ola

26 - 33
Ma z aa

34 & AB VE O

Observations:
59 percent of the respondents prefer Mangola over Maaza. The above trend is uniform amongst all the age groups. Respondents in the age group 10-17 do not have any preference for any particular brand.

Analysis:
The above observations can be contributed to the fact that Mangola came into the market a long time before Maaza came into the picture. So people are loyal to it. The above preference may also because people prefer the taste of Mangola more than Maaza.

Table 8.3 Brand Preferred In Orange Flavour

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Brand Fanta Mirinda Total

10-17 8 14 22

18 - 25 11 19 30

26 - 33 9 15 24

34 & ABOVE 12 12 24

Total 40 60 100

Fig. 8.3 Brand Preferred In Orange Flavour

Orange Flavour
20 15 10 5 0 10-17 18 - 25
Fanta

26 - 33
Mirinda

34 & ABOVE

Observations:
60 percent of the respondents prefer Mirinda over Fanta The above trend is uniform amongst all the age groups. Respondents in the age group 34 an above do not have any preference for any particular brand.

Analysis:
Mirinda is a much older brand as compared to Fanta so people are more loyal towards it. Also majority of the people prefer Mirinda may be because it has a better taste.

Table 8.4 Brand Preferred In Soda Flavour

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Brand Sprite 7 up Total

10-17 10 12 22

18 - 25 9 21 30

26 - 33 34 & ABOVE Total 8 6 33 16 18 67 24 24 100

Table 8.4 Brand Preferred In Soda Flavour

25 20 15 10 5 0 10-17

Soda Flavour

18 - 25
Sprite

26 - 33
7 up

34 & ABOVE

Observations:
67 percent of the respondents prefer 7 up over Sprite The above trend is uniform amongst all the age groups. Respondents in the age group 10-17 have almost an equal preference for both the brands.

Analysis:
Even here the preference can be contributed to Brand Loyalty as 7up is a much older brand compared to Sprite. Taste can also be a factor for the preference.

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Table 8.5 Brand Preferred In Lemon Flavour

Brand Lemonade Limca Total 10-17 7 15 22 18 - 25 13 17 30 26 - 33 8 16 24 34 & ABOVE 11 13 24 Total 39 61 100

Table 8.5 Brand Preferred In Lemon Flavour

20 15 10 5 0 10-17

Lemon Flavour

18 - 25
Lemonade

26 - 33
Limca

34 & ABOVE

Observations:
61 percent of the respondents prefer Limca over Lemonade. The above trend is uniform amongst all the age groups. Respondents in the age group 34 and above do not have much of a preference for any particular brand.

Analysis:
Lemonade is only available in 500 ml bottles or the 1.5l and 2l bottles. So it is not much preferred as people normally prefer 250ml, 330 ml bottles or Tins. Also people may prefer Limca because of its Taste.

Table 9.1 Influence Towards Selection Of Brand

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Role Friends Family Kids Colleagues Self Others Total

10-17 6 2 0 0 12 2 22

18 - 25 16 3 0 0 10 1 30

26 - 33 5 1 2 0 14 2 24

34 & ABOVE 8 5 3 0 7 1 24

Total 35 11 5 0 43 6 100

Fig. 9.1 Influence Towards Selection Of Brand

Influence Towards Brand Selection

6% 35%

43% 0% 5%
Friends Family Kids Colleagues Self Others

11%

Observations
43 percent of the respondents are self-influenced i.e. they choose a brand according to their own wish and majority of them belong to the Age Groups of 10 17, 18 25 and 26 33. 35 percent of the respondents are influenced by their friends to choose a particular brand and this is more prominent in the age Group of 18 25. Family plays an influential role in the choice of brand of 11 percent of the respondents who are mainly from the Age Group of 34 and Above. Only 5 percent of the respondents are influenced by their kids. Obviously these respondents belong to above 26 years Age Group.

Analysis:
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People who are self influenced are the ones who like to take their own decisions at least the small ones and also they are the ones who are fully aware of the various brands available in the market.

People in the Age Group of 18 25 are very often under peer pressure and do things, which their friends approve of. People in the Age Group of 34 and Above are very much influenced by their family and kids as they give lot of importance to their family life and also the fact that the kids are more aware of the various brands available in the market and are capable of influencing their parents decisions.

Table 10.1 Factors Impacting Consumption Pattern

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Factors Taste Price Quality Availability Brand Name Other Total

10-17 18 0 2 1 1 0 22

18 - 25 17 0 7 3 3 0 30

26 - 33 15 1 2 1 4 1 24

34 & ABOVE 20 0 3 0 1 0 24

Total 70 1 14 5 9 1 100

Table 10.1 Factors Impacting Consumption Pattern

Factors Impacting Consumption Pattern

25 20 15 10 5 0
10-17 18 - 25 26 - 33 34 & ABOVE

Taste

Price

Quality

Availability

Brand Name

Other

Observations:
70 percent of the respondents feel that Taste plays the most important role in their choice of soft drink. While there are 14 percent respondents who feel Quality plays a very important role in the selection of a soft drink.

Analysis:

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The above observations clearly show that Taste is the only major factor influencing the choice of a soft drink. Quality is the next most important factor influencing the selection of the soft drink but it is comparatively very less influential than Taste.

Table 11.1 Brand Value

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Brand Pepsi Coke

High 16 13

Fair 80 82

Low 4 5

Total 100 100

Fig. 11.1 Brand Value

Brand Value
100 80 60 40 20 0 High Fair
Pepsi Coke

Low

Observations:
80 percent and 82 percent of the respondents perceive that the price charge for Pepsi and Coke respectively is FAIR. 16 percent and 13 percent of the respondents perceive that the price charge for Pepsi and Coke respectively is HIGH. Only 4 percent and 5 percent of the respondents perceive that the price charge for Pepsi and Coke respectively is LOW.

Analysis:
On the whole majority of the People perceive that the price charged by both the brands PEPSI and COKE is FAIR.

Table 12.1 Influence Of Advertisement

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Response Yes No Total

10-17 17 5 22

18 - 25 17 13 30

26 - 33 34 & ABOVE 17 9 7 15 24 24

Total 60 40 100

Fig. 12.1 Influence Of Advertisement

Influence Of Advertisment
20 15 10 5 0 10-17 18 - 25
Yes

26 - 33
No

34 & ABOVE

Observations:
60 percent of the overall respondents feel that Advertisement plays a crucial role in influencing them towards changing of brand or towards increase in consumption of soft drink. This feeling is common across all the Age Groups except the Age Group of 34 and above. Amongst respondents from the Age Group 34 and above, only 38 percent of them feel advertisement has an influence in their choice of soft drink brand.72 percent of them do not take decision based on the advertisement.

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Analysis:
People in the Age Groups of 10 17, 18 25 and 26 33 are the ones who get easily wooed away by Fancy Advertisement and tend to take impulsive decisions. People in the Age Group of 34 and Above are mature and take their decisions after weighing all the pros and cons.

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Table 13.1 Influence OF Celebrity Endorsement

Response Yes No Total 10-17 14 8 22 18 - 25 21 9 30 26 - 33 34 & ABOVE 14 8 10 16 24 24 Total 57 43 100

Fig. 13.1 Influence OF Celebrity Endorsement

Influence Of Celebrity Endorsement

25 20 15 10 5 0 10-17 18 - 25
Yes No

26 - 33

34 & ABOVE

Observations:
57 percent of the overall respondents believe that Celebrity Endorsement has an impact on their choice of brand. This belief is common across all the Age Groups except the Age Group of 34 and Above. Only 33 percent of the respondents in the Age Group of 34 and Above believe that Celebrity Endorsement influences their choice of brand.

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Analysis:
Celebrity Endorsement has an impact on the Younger Age Groups, as they tend to imitate their role models in every possible way. People in the Age Group of 34 and Above are not much influenced by celebrity endorsement as they have a more thoughtful approach towards decision making.

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Table 14.1 Source Of Information

Source Of Information Friends Family Newspaper Television Advertisement Hoardings Retailers Total 10-17 7 1 3 22 11 0 44 18 - 25 9 1 4 30 13 3 60 26 - 33 15 0 5 22 4 2 48 34 & Above 11 2 4 20 8 3 48 Total 42 4 16 94 36 8 200

Fig. 14.1 Source Of Information

Source Of Information
4% 21% 2% 8% 47% Friends Television Advertisement Family Hoardings Newspaper Retailers

18%

Observations:

67

The medium of awareness of a new product for 47 percent of the respondents is Television Advertisement. 21 percent of the respondents are informed about the new product by Friends. 18 percent of the respondents are informed by the Hoardings.

Analysis:
Visual Medium is the most useful communicative medium for informing the consumers about the launch of new product. Word Of Mouth Publicity is also effective but not as effective as the Visual Medium

Table 15.1 Areas For Product Improvement

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Factors Taste Quality Price Variety Packaging Other No changes Total

10-17 9 7 1 1 1 0 3 22

18 - 25 12 2 6 3 1 1 5 30

26 - 33 34 & ABOVE 5 8 8 3 4 4 3 1 1 2 1 2 2 4 24 24

Total 34 20 15 8 5 4 14 100

Fig. 15.1 Areas For Product Improvement

Areas For Product Improvement

14 12 10 8 6 4 2 0 10-17 Taste Quality Price 18 - 25 Variety 26 - 33 Packaging 34 & ABOVE Other No changes

Observations:

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34 percent of the respondents want changes in the Taste of the soft drinks. While 20 percent and 15 percent of the respondents want changes in the Quality and Price respectively. There are also 14 percent respondents who dont want any changes in their soft drinks.

Analysis:
Taste being the most important factor in soft drinks is confirmed in the above question. Quality and Price plays the secondary role in the soft drink selection. This confirms the understanding among respondents that the price charged by the soft drink company is fair. Respondents who dont want any changes in the soft drink are the ones who are fully satisfied consumers.

10.1 Limitations:
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Every research is conducted under some boundaries and this research is not an exception. Limitations of this project are 1. It is difficult to conclude on Consumer Behaviour based on the sample size of 100. However, due to time constraints I have restricted the sample size from various Age Groups to 100. 2. Here, I have taken this sample size without any scientific formulae and just on judgement base. 3. There might have been tendencies among the respondents to amplify or filter their responses under the testing condition. 4. Since the result has been drawn on the basis of the information provided by the respondents, chance of response error might have crept. 5. Consumer behaviour is an attitudinal, which needed specialized knowledge of the area, so there is chance for interpretational error.

11. CONCLUSION

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The project report is a study of Consumer Behaviour Towards Soft Drinks. Consumer behaviour is the study of why, how, what, when, where and how often do consumers buy and consume different products and services. The research sample size of 100 was decided to study consumer behaviour of various prospects in soft drink industry. It was found that as the consumers age goes on increasing the frequency of consumption goes on decreasing and the analysis has proven it. Most of the respondents consume soft drinks because they like its taste and feel soft drinks are refreshing. However consumers from the Age Group of 34 and Above do not consume more of soft drinks because they have a perception that regular consumption is not good for health. Kids and Youngsters have a completely different perspective. Thus soft drinks companies need to tap the older Age Group by introducing some soft drinks, which do not have any health implications attached to its consumption and inform them through effective advertising. This Age Group is not very much influenced by celebrity endorsements so the companies need to come up with some innovative advertising campaign but the important thing is that they should have the product to support their campaign

Friends and family members play an important role in selection of the brand of soft drinks and this proves the effect of reference groups on buying behaviour.

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Although effective advertisement plays an important role in influencing consumer towards changing of brand but on the other hand pricing and availability should be supportive for such change. Taste is the most important factor which influences the consumers choice of soft drink so the soft drink companies should give it due importance. Friends and television advertisement are said to be the main source for information for any new product entry in market. This again shows the impact of personal and social factors on the buying behaviour. There is huge scope in the rural market as Pepsi and Coca Cola together have a market share of just 55%. The rural market cannot be ignored as 70 % of Indias population lives in rural areas. Pricing is very important aspect in the rural market as it is price sensitive. But this does not mean a marketer can be successful by introducing substandard products at cheap rates. This analysis is drawn basically from the theory of consumer behaviour and I have tried to cover all aspects related to this topic.

12. ANNEXURE
QUESTIONNAIRE

73

1 2 3

Name of the Respondent: Location: Contact:

Age Group: Years 10-17 18-25 26-34 34& above Occupation:

Code 01 02 03 04

On an average how often do you consume soft drinks? Daily 1 Once in 10 days 4-6 times a week 2 Once in 2-3 weeks 2-3 times a week 3 Once in a month Once in a week 4 Even less

5 6 7 8

Can you suggest any reason for such kind of consumption pattern? I like the taste It refreshes me It changes my mood I like to have it on an outing Not good for health Not available near my residence I dont prefer it so much Any other Which of the following you prefer as your brand? Coke Pepsi

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How do you prefer to have soft drink? 200ml 330ml 500ml 1.5 l 2l Tin

10 Do you even consume soft drinks in multiplexes where the price charged is very high? Yes No

11 Which flavour do you enjoy ? [ 1- Most preferred and 5 - Least preferred] Flavour Cola 1 Mango 1 Orange 1 Soda 1 Lemon 1

2 2 2 2 2

3 3 3 3 3

4 4 4 4 4

5 5 5 5 5

12 Which brand do you prefer in each of the flavour? Cola Pepsi Mango Orange Soda Lemon Mangola Fanta Sprite Limca

Coke Maaza Mirinda 7 up Lemonade

Thumps up

13 Who plays an important role in influencing you towards the specific flavour? Friends Family Kids Colleagues 75

None of the Above Others

14 According to you which factor plays an important role in selection of soft drink? Taste Price Quality Availability Brand Name Other

15 How do you perceive the price for the following brands with respect to taste and quality? Brand High Fair Low Pepsi Coke

16 According to you does advertisement play a crucial role in influencing you towards changing of brand or towards increase in consumption of soft drink? Yes No

17 If yes rate it on the scale of 1to 5 where 5 is min and 1 is max? 1 2 3 4 5

18 Do you feel the celebrities endorsing has any impact on the choice of brand? Yes No

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19 If any new variety or flavour is introduced in the market how are you informed? Friends Family Newspaper Television Advertisement Hoardings Retailers Any Other

20 So at the end do you want to suggest any areas in your soft drink that needs improvement? Taste Quality Price Variety Packaging Other No changes

BIBLIOGRAPHY Books:

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 Marketing Management Philip Kotler Marketing Management Ramaswamy Namakumari

Websites: www.allbusiness.com www.consumerpsychologist.com www.pepsiindia.co.in www.pepsico.com www.heritage.coca-cola.com

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