Dynamic Consumer Influences on Soft Drinks Market in India

Transcription

1 Abstract Dynamic Consumer Influences on Soft Drinks Market in India Kameswara Rao Poranki Professor in Department of Marketing, FAFS, Al Baha University, Saudi Arabia & Mohammed AbulKhair Associate Professor in Department of Marketing, FAFS, Al Baha University, Saudi Arabia Indian were less affected by the recent Economic downturn than in other countries and, in turn, their attitudes and shopping habits have not changed significantly in recent years as India is a second largest populated country in the world. Also, India is a more attractive market for many consumer goods. This has lead to competition among major industrialized countries to capture a considerable share in the ever growing market of India. So, to attract these large numbers of many Multi National Corporations had entered into Indian market. It would not be an easy task to any company to keep pace of these dynamic of India as consumer behavior plays a pivotal role in the success of any company. To attain the goal of capturing the consumer mind, many companies are devising various marketing policies to garner this dynamic market of India. Hence, the researchers of this paper have selected three cities of India namely Delhi, Mumbai and Bangalore in order to assess the dynamic nature of the of soft drinks. This research would be beneficial to the present and potential companies to analyze the Indian soft drinks market particularly those who do a profitable business in India. Key words:consumer influences, Consumer behaviour, etc. Originality/value: This piece of research is worthy in assessing the dynamic nature of Indian of soft drinks. To attain this end, the researchers of this paper have selected three cities of India namely Delhi, Mumbai and Bangalore in order to assess the dynamic nature of the of soft drinks brands of Coca cola and Pepsi cola. Introduction It is very interesting to note that any company in order to attain competitive advantage compared to its competitors, it need to focus on consumer needs to improve business performance. It clearly gives rises to any organization to identify the needs of the customers which further requires understanding the complete dynamics of consumer behavior. As the behavior of customer is very dynamic and keeps changing and there are many factors which influences that behavior of the customer. Any organization needs to understand the factors influencing the behavior of the customer while understanding needs and wants that enables firms to determine what to produce and how to serve their customers better than competitors. The common factors influencing the customer`s behavior are family, culture, society, age, group etc. The researchers of this paper have made an earnest attempt to find out how the different factor of consumer behavior influences the consumption of soft drinks in India. The present and potential companies are needed to focus the dynamics of consumer behavior affecting the consumption of soft drinks which will help them to devise various policies related to their marketing strategies. Review of Literature According to researchers like G. NazanGunay Michael J. Baker (2011) "Firms need to understand the factors influencing behaviour not only to retain existing customers but to attract new ones, as well as to gain a competitive advantage in the market place. Understanding needs and RJSSM: Volume: 05, Number: 10, February 2016 Page 120

2 wants enables firms to determine what to produce and how to serve their customers better than competitors. The modern marketing concept expects firms to place customers at the center of their organization and to create value for customers to satisfy their expectations. This could lead to these firms increase the likelihood that they will become market leaders. Therefore, the success of firms is associated with understanding and developing insights into the factors influencing behaviour. Another researcher Baker, M.J. (2005) opined that the Marketing is a synthetic discipline that integrates findings from other disciplines like economics, psychology and sociology into a holistic explanation of commercial exchange behaviour. It is rightly pointed out that the study of consumer socialization has been presented in many ways like in the cultural context but it lacks the interest of cohorts across the different civilization some finding suggest that in past days consumer socialization is what they adopt from their parents but with the passage of time the concept have been changed and young people adopt socialization other than their parents and that phenomena needs attention of the researchers like Antonacopoulou, E.P and Pesqueux, Y. (2010). Also, Solomon, M, Bamossy, G and Askegaard, S (2001), have found out in their research that the Customers having positive attitude towards a brand, and they are involved in the repeat buying are termed as brand loyal customer. They have defined that brand loyalty is a form of repeat purchasing behaviour reflecting a conscious decision to continue buying the same brand. In their new research Kotler, P and Armstrong, G, (2007) have found out that there are psychological factors which influence the consumer behaviour in making any purchase decision as these are the influencing factors like motivation, perception, learning, belief and attitude in many. Morgan, M.S. and Dev, C.S. (1994) have studied three variables, which influence brand-switching behaviour, namely changes in usage context or situation, marketing mix variables which are directly controllable by the firm, and customer background variables. McAlister, L. (1982), also studied the situational factors in his research on soft drinks. Yet other researchers like Dhingra R, Sullivan L, Jacques PF, et al (2007) have tried to found out the association between the consumption of sugar-sweetened carbonated soft drinks (soda) and weight gain is well documented. A recent survey by Thomson, M. (2012), on soft drinks found that most of those sold according to sales and profits are Sprite, Coke Cola, Pepsi, Red Bull and others. As per his research evidence indicates that most commonly stock at least some tea, coffee or soft drinks in their home for future consumption. Nowak, L., Thach, Land Olsen, J.E. (2006), propounded that in addition to parental and familial dynamics have been described as the major source of cultural transmission through which particular styles of drinking are learned beside this other sources of socialization like social media has gain a lot much attention these days and act as catalyst to passed theses social values to other groups members. The recent researchers like Barber, N., Taylor, D.C. and Strick, S. (2010) have reported that most of the consume soft drinks with their friends, family and their coworkers. Usually they are not regular users of these drinks but interaction with their fellows makes them a regular user. Interestingly, product needs and preferences change as people go through different stages in their life cycle. Understanding the influences of age on consumer behaviour has been pointed out by many researchers including their impact on information gathering, sources of information used by different age groups, processing, decision making and purchasing behaviour, brand choice, attitudes towards advertising, media use, new technologies and products and services purchase as per Barak, B. and Schiffman, L.G. (1981). According to Aaker, D. and Keller, K.L. (1990), gender is another factor widely used to segment markets. The gender influence on consumer behaviour has been studied by scholars to determine the role of gender on evaluation of brand extension. To make a brand has several advantages, which are market penetration and acceptance by dealers, as they reduce search costs for both retailers and is written in his strategic management textbook by Keller, K. L.(1998), However, branding became part of marketing strategy in the 1950s. However, in the 1990s companies started realizing the goodwill value of their brands by Nijssen, H. T. (1999), Solomon, M, Bamossy, G and Askegaard, S (2001) has written in his Consumer behaviour a European perspective, that Customers having positive attitude towards a brand, and they are involved in the repeat buying are termed as brand loyal customer. That s why it is defined as brand loyalty is a form of repeat purchasing behaviour reflecting a conscious decision to continue buying the same brand. Figure-01: Influences on Consumer Purchasing RJSSM: Volume: 05, Number: 10, February 2016 Page 121

3 Source: As we discussed the decision-making process for is anything but straight forward as per the above literature review. It is therefore, there are many factors that can affect this process as a person works through the purchase decision. The number of potential influences on consumer behavior is limitless. However, marketers are well served to understand the key influences and by doing so they may be in a position to tailor their marketing efforts to take advantage of these influences like external, internal and marketing are in a way that will satisfy the consumer and the marketer as per the above Figure-01. Figure-02: The consumer faces numerous sources of influence Source: Many research studies proved that the consumer behavior involves the psychological processes that go through in recognizing needs, finding ways to solve these needs, making purchase decisions (e.g., whether or not to purchase a product and, if so, which brand and where), interpret information, make plans, and implement these plans (e.g., by engaging in comparison shopping or actually purchasing a product). RJSSM: Volume: 05, Number: 10, February 2016 Page 122

4 The above Figure-02 has explains us for example, cultural influences for granted, but they are significant an American will usually not bargain with a store owner. However it is a common practice in much of the World. Physical factors also influence our behavior as another example is that, we are more likely to buy a soft drink when we are thirsty, and food manufacturers have found that it is more effective to advertise their products on the radio in the late afternoon when people are getting hungry. Also, a person s self-image will tend to influence what he or she will buy an upwardly mobile manager may buy a flashy car to project an image of success. Other factors like Social factors also influence what the buy often, seek to imitate others whom they admire, and may buy the same brands. Finally, consumer behavior is influenced by learning you try a hamburger and learn that it satisfies your hunger and tastes good, and the next time you are hungry, you may consider another hamburger as per the above conceptual figures. About Coca-Cola India Coca-Cola India is one of the country s leading beverage companies, offering a range of healthy, safe, high quality, refreshing beverage options to. Over the last 22 years, ever since its re-entry in 1993, the company has gone on to establish an unmatched portfolio of beverages; refreshing with its leading beverage brands like Coca-Cola, Coca-Cola Zero, Diet Coke, Thums Up, Fanta, Limca, Sprite, Maaza, Minute Maid range of juices, Georgia and Georgia Gold range of hot and cold tea and coffee options, Kinley and Bonaqua packaged drinking water, Kinley Club Soda and BURN energy drink. The Company along with its bottling partners, through a strong network of over 2.6 million retail outlets, touches the lives of millions of. Its brands are some of the most preferred and most sold beverages in the country Thums Up and Sprite being the top selling sparkling beverages. PepsiCo India Region: Leadership through Performance with Purpose PepsiCo entered India in 1989 and in a short period, has grown into one of the largest MNC food and beverage businesses in the country. PepsiCo s growth in India has been guided by Performance with Purpose, its goal to deliver top-tier financial performance while creating sustainable growth and shareholder value. In practice, Performance with Purpose means providing a wide range of foods and beverages from treats to healthy eats; finding innovative ways to minimize our impact on the environment and lower our costs through energy and water conservation, as well as reduced use of packaging material; providing a safe and inclusive workplace for our employees globally; and respecting, supporting and investing in the local communities where we operate. Method The data collected by using simple random sampling and the questions are designed based on Likert scale in the three cities of Delhi, Mumbai and Bangalore of India. Out of the questionnaires circulated we have qualified only 126 only suitable for our research. We have developed the below hypothesis in this research. H1: Consumer behavior does not influence the Soft Drink brands of India. H0: Consumer behavior does influence the Soft Drink brands of India. Conclusion The researchers have enjoyed this research whilecollecting the data from Delhi, Mumbai and Bangalore of India gives rise to 60.3% people of Indians in these cities likes Coca cola and 39.7% of people like Pepsi cola. It is interesting to note that the Indian are brand conscious as they have been influenced by various types of advertising before taking a decision about their purchase of their soft drinks. It was found that as many as 50% of the have been felt that the price of the soft drinks is high in this research. However, the cultural factors, social factors, personal factors and psychological factors strongly influence the consumer behavior. Present study is used to examine the RJSSM: Volume: 05, Number: 10, February 2016 Page 123

5 relationship between consumer behavior and soft drink brands of Coca cola and Pepsi cola of India. The MNCs like Coca and Pepsi, in India have managing their respective brands by understanding the consumer influences like taste, price, choice and awareness and devising their marketing strategies accordingly. Finally the researchers have concluded that it is very important to deduce these results by constant research in wider areas to assess the dynamic consumer influences of soft drinks market in India. As this research has confined to only three cities of India and it may not reflect the entire population of India. It is therefore, the researchers are suggesting the future researchers have to widen their scope of their research across many cities of India to get desired and accurate results. Then only the companies understudy would get benefited by using this kind of research. References 1. G. NazanGunay Michael J. Baker, (2011),"The factors influencing behaviour on wine consumption in the Turkish wine market", EuroMed Journal of Business, Vol. 6 Issue 3 pp Baker, M.J. (2005), Marketing is marketing everywhere!, The Journal for Decision Makers, Vol. 30 No. 3, pp Antonacopoulou, E.P.andPesqueux, Y. (2010), The practice of socialization and the socialization of practice, Society and Business Review, Vol. 5 No. 1, pp Solomon, M, Bamossy, G and Askegaard, S (2001), Consumer behaviour: a European perspective. Harlow, Financial Times/Prentice-Hall, New York. 5. Kotler, P and Armstrong, G, (2007), Consumer markets And Consumer Buying Behaviour Principles of Marketing, 12th edition, Prentice hall, USA, Page Morgan, M.S. and Dev, C.S. (1994), An Empirical Study of Brand Switching for a Retail Service. Journal of Retailing, Vol.70, No.3, pp McAlister, L. (1982), A Dynamic Attribute Satiation Model of Variety Seeking Behaviour. Journal of Consumer Research, Vol.9, September, pp Dhingra R, Sullivan L, Jacques PF, et al(2007), Soft drink consumption and risk of developing cardio metabolic risk factors and the metabolic syndrome in middle-aged adults in the community. Circulation. 2007; 116: Thomson, M. (2012), 10 most popular beverages around the world, available at: 10_most_popular_beverages_around_the_world-3295 (accessed 03 January 2016). 10. Kim, J.H. and Kim, C. (2010), E-service quality perceptions: a cross-cultural comparison of American and Korean, Journal of Research in Interactive Marketing, Vol. 4 No. 3, pp Nijssen, H. T. (1999), Success factors of line extensions of fast-moving consumer goods. European Journal of Marketing, 33 (5/6), p Nowak, L., Thach, Land Olsen, J.E. (2006), Wowing the millennial: creating brand equity in the wine industry, Journal of Product & Brand Management, Vol. 15 No. 5, pp Barber, N., Taylor, D.C. and Strick, S. (2010), Selective marketing to environmentally concerned wine : a case for location, gender and age, Journal of Consumer Marketing, Vol. 27 No. 1, pp Barak, B. and Schiffman, L.G. (1981), Cognitive age: a non-chronological age variable, Advances in Consumer Research, Vol. 8 No. 1, pp Aaker, D. and Keller, K.L. (1990), Consumer evaluations of brand extensions, Journal of Marketing, Vol. 54 No. 1, pp Keller, K. L.(1998), Strategic brand management: building, measuring and managing brand equity (3 ed.): Prentice Hall. 17. Solomon, M, Bamossy, G and Askegaard, S (2001), Consumer behaviour: a European perspective. Harlow, Financial Times/Prentice-Hall, New York. RJSSM: Volume: 05, Number: 10, February 2016 Page 124

6 ANNEXURE Table-01: Frequency of Purchase analysis S.No Consumer Response Frequency of Purchase by the Percentage 1. Yes No Total The above table explains that 99.2% of purchased Soft Drink brand and 0.8% of them are not using these brands. Note: We have calculated the cumulative percentages while finalizing this research. Table-02: Brand Choice of Consumers S.No Consumer Response on Frequency of Purchase by the Percentage Brands 1. Coca Cola Pepsi Cola Total The above table depicts that 60.3% of prefer Coca cola and 39.7% people s choice is Pepsi cola Table-03: Brand by Consumers 1. Disagree Neutral Agree The above table depicts that 24.6% are not compared different brand before purchasing, 20.6% neutral and 54.8% people are fully agree to compared the different beverage brands before purchasing. Table-04: Brand by Consumers related to Taste of the Soft Drink 1. Undesirable Neutral Desirable The above table explains us that 5.6% of are undesirable about the taste when they choosing a beverage brand, 9.5% are neutral and 84.9% are desirable about the taste when they choosing a beverage brand. RJSSM: Volume: 05, Number: 10, February 2016 Page 125

7 Table-05: Brand by Consumers related to Quality of Soft Drink 1. Undesirable Neutral Desirable We from the above table deduce that 8.8% of are undesirable about the quality of beverage brands when they choosing, 8.7% are neutral and 82.5% people are desirable about the quality of beverage brands. Table-06: Brand by Consumers related to Price of Soft Drink 1. Undesirable Neutral Desirable The above table tells us 15.1% of are undesirable about the price of soft drink brands 31% are neutral and 53.9% are desirable. Table-07: Brand by Consumers related to Price of Soft Drink 1. Undesirable Neutral Desirable The above table denotes that 7.1% of are undesirable about the awareness of beverage brands when they choosing, 8.7% are neutral and 84.1% people are desirable. Table-08: Regression Analysis of Brand of Soft Drinks S.No Variables Coefficient Standard Error T-Value Probability Beta 1. Constant Consumer Behaviour The above table tells us that beta values as consumer behavior variable influence on dependent variable of soft drink brands of Coca cola& Pepsi cola of three cities of India. *** RJSSM: Volume: 05, Number: 10, February 2016 Page 126