Analyzing the factors which influencing customers of choosing a soft drinks Essay

The overview of business environment is changing overtime. Due to increasing of excessive competition in business environment, customer preference and purchase intention are changing day by day. Now Bangladesh is more intense as competitive market in beverage industry with lot of foreign and local companies. People are being more health conscious day by day. They are becoming aware about their daily diet in which liquids play the vital role. Availability of soft drink in our country is numerous. Everyday new types of soft drinks are being launched. The reasons behind this popularity for this soft drink show that demand is very higher in our country. Throughout the year, consumption of the soft drinks goes on. Kids to elder people everybody like soft drink; specially kids and young generation. The competition among the soft drink companies is very high. They are fighting all-time to attract customer and satisfy them in better way than their rivals. In this regard, we searched out the scope to do a marketing research. We have selected five factors or variables: Brand image, Price, Quality, Taste and Product Availability to identify based on which factor customers used to choose a particular soft drink brand. Indeed, we tried to find out which factor among these five factors is the most influential to choose a particular soft drink brand. Brand Image: Brand image refers to images arising in a consumer’s mind from exposure to a named brand. It refers to the impression in the consumers’ mind of a brand’s total personality (real and imaginary qualities and shortcomings). Consumers buy not only a product (commodity), but also the images associated with the product such as power, wealth, sophistication, and most importantly identification and association with other users of the brand. The term â€Å"brand image† gained popularity as evidence began to grow that the feelings and images associated with a brand were powerful purchase influencers. Studies based on that also suggested that brand image can be an important information cue for consumers to evaluate a product. A brand is unlikely to have one brand image, but several, though one or two may predominate. The key in brand image research is to identify or develop the most powerful images and reinforce them through subsequent brand communications. Good brand images are instantly evoked, are positive, and are almost always unique among competitive brands. Brand image is developed over time through advertising campaigns with consistent theme, and packaging, customer service, word-of-mouth and other aspects of brand experience. Brand images are usually evoked by asking consumers the first words/images that come to their mind when a certain brand is mentioned (sometimes called â€Å"top of mind†). When responses are highly variable, non-forthcoming, or refer to non-image attributes such as cost, it is an indicator of a weak brand image. Consumers also feel pride of owning a product purchased from a branded store because they perceive the brand as an image of social status. Social status is the honor or prestige attached to one’s position in society. A society’s stratification system, which is the system of distributing rewards to the members of society, determines social status. Social status, the position or rank of a person or group within the stratification system, can be determined two ways. One can earn their social status by their own achievements, which is known as achieved status. Alternatively, one can be placed in the stratification system by their inherited position, which is called ascribed status. Some consumers believe in themselves to have high social status. Quality: Quality is the ability of a product to satisfy a consumer’s needs and requirements. Perceived quality can be defined as the perception of a consumer about the overall excellence and superiority of a brand, which is directly related to his satisfaction. Quality is the best indicator of the product’s durability, reliability, precision and other valued attributes. It provides added value and constructive perception on a brand to affect consumers’ brand evaluation. The high quality perception often depends on consumers’ distinct liking and beliefs toward the brand. Thus, a brand may contain quality attributes but it may not satisfy consumers’ preference if it does not fit with their perceptions and beliefs of high quality. Typically, consumers recognize the quality levels of different brands through categorical information as well as experience with the brand and they form positive or negative perceptions about the quality of a specific brand. When consumers are convinced with quality of a brand, they evaluate a brand positively. Consumers also feel pride of owning quality product because they perceive better quality as an image of social status. Sometimes, the perception of quality is diverse among consumers. For a brand, different consumers hold different perception vis-a-vis brand quality. One brand might be coded as â€Å"high quality† by some consumers, and â€Å"medium quality† or â€Å"low quality† by others. Again, product quality perceptions are also varied based on the product class. Taste: Taste is defined to as the consumer’s opinion of a product’s (or a brand’s) ability to fulfill his or her expectations, which is directly related to his / her satisfaction. It may have little or nothing to do with the actual excellence of the product, and is based on the firms (or brands) current public image, consumer’s experience with the firm’s other products, and the influence of the opinion leaders, consumer’s peer group, and others. Quality is the best indicator of the product’s durability, reliability, precision, and other valued attributes. It provides added value and constructive perception on a brand to affect consumers’ brand evaluation. The high quality perception on products often depends on consumers’ distinct liking and beliefs toward supplier and manufacturer of the products. From this belief, if consumers are not satisfied with the taste of juice, they will never purchase that juice. It will also create negative impact for the next product in future. So, perceived taste or quality of juice is very crucial as it is an edible item. Price: Consumers want to get highest utility from a product they purchase by sacrificing money and benefit from other brands. Price perception is the process by which consumers translate price into meaningful cognitions, and it has interested researchers for several years. The classical economic models suggest that a consumer maximizes utility by allocating a limited budget over alternative goods and services. So effects of price are more associated with quality perception of a product or brand. Consumers generally perceive high priced products to be of high quality. Price conveys information to the consumer about product quality. Thus, price information is extensively used as an extrinsic cue to evaluate a product. That is why, price can play both role as an indicator of the level of quality and an indicator of the amount of sacrifice needed to purchase a product. Product availability: Making the products available to the target customers so that they can buy it, i. e. placing or distribution is one of the basic 4Ps of marketing mix. It is essential for companies to make their products easily available to the customers. Availability is becoming an increasingly important issue for consumers seeking out convenient items. When customers find little or no difference between a firm’s product and those of competing suppliers, the customers are readily willing to take a second-choice brand when the first is not immediately available. These products are said to be highly substitutable. In our country, numerous juice manufacturers produce different types and tasted of juice. As a result competition is very high. Substitutable products are also numerous like juices, chocolate milk, water. Thus, volume of stocks available and also the level of variety of stocks, determined in terms of SKUs (Stock Keeping Units), are crucial for sellers to attract and retain consumers. A new survey from the Institute of Grocery Distribution (IGD) found that retailers and manufacturers across Europe are losing out to store and brand switching as consumers substitute products, which are unavailable or difficult to find. Product unavailability will simply influence consumers to switch to other brand juice. Thus, product availability is a very important construct for evaluating consumers’ purchase-decision making 1. 2 Statement of the problem The overview of business environment is changing overtime. Due to increasing of excessive competition in business environment, customer preference and purchase intention are changing day by day. Now Bangladesh is more intense as competitive market in beverage industry with lot of foreign and local companies. People are being more health conscious day by day. They are becoming aware about their daily diet in which liquids play the vital role. Availability of soft drink in our country is numerous. Everyday new types of soft drinks are being launched. The reasons behind this popularity for this soft drink show that demand is very higher in our country. Throughout the year, consumption of the soft drinks goes on. Kids to elder people everybody like soft drink; specially kids and young generation. The competition among the soft drink companies is very high. They are fighting all-time to attract customer and satisfy them in better way than their rivals. In this regard, we searched out the scope to do a marketing research. We have selected five factors or variables: Brand image, Price, Quality, Taste and Product Availability to identify based on which factor customers used to choose a particular soft drink brand. Indeed, we tried to find out which factor among these five factors is the most influential to choose a particular soft drink brand. 1. 3 Purpose of the study We are interested in this topic because we see that everyday a huge amount of beverages is being consumed by the people. This research will give us a clear picture about the mindset of the consumers about which beverage they purchase and at what condition. And also while purchasing beverage what they are looking for. The main objective of this research is to conduct conclusive research to understand how consumers are taking the purchasing decision, what the factors that are influencing their decision and what are they actually looking for while purchasing any beverage. A careful review of those areas led to the identification of the following specific research objectives: 1. To identify the criteria that consumers use when selecting beverage. 2. To know that how consumers evaluate beverage industry and their choice criteria. 3. To identify the demographic and psychographic profile of the consumers. 4. To determine that can customer preference and purchase intention be explained in terms product evaluations and customer characteristics. 5. To identify the value proposition of the customer. 2. 0 Literature Review Soft drinks are most common popular fast moving consumer goods in Bangladesh. After independence the soft drinks habit of Bangladeshi people has been changed a lot. Besides our traditional soft drinks consumer of Bangladesh like to take western soft drinks also after 1980s. As a result of global marketing this was not too hard for the consumers. Different foreign food companies were established in Bangladesh. Beverage industry is one of them. But more interestingly we don’t know beverage is also our cultural food because beverage doesn’t mean only carbonated drinks. Yoghurt, soup and lacchi are also beverage of our own tradition, which consumed for the last 100 years in Bangladesh. Beverage business entered into our market in the later part of 1980. At that time there were only few companies in Bangladesh. But by the change of time and western culture influences it’s become very popular in Bangladesh. By year 2000 more than 12 Beverage Company operating business in Bangladesh and most of them are foreign companies. Most of the studies conducted on the customer preference of beverage have been reviewed in the subsequent section. A. John S. A. Edwards & Hadyn Ingram (1995), Volume 7; Issue 5; Page 25 – 28in â€Å"Food, beverage and accommodation: an integrated operations approach†mentioned that accommodation has a close relation with food & beverage. B. Mary Bellis (2005) in â€Å"Food History – Beverages and Drinks† explained thehistory of Beer, Wine, Alcoholic & Non-Alcoholic beverages and Drinks. C. Mohajon Bangladeshi Online Bazar (2006) in â€Å"Beverage product view†identified different beverages & their quality with prices. D. Transcom Beverage Limited official website (2003) in â€Å"Introduction† explained that TBL manufactures the famous Pepsi range of beverages-Pepsi, 7up,Mirinda Orange, Mirinda Lemon, Slice and Soda. As a corporate citizen Pepsico believes it has a responsibility to contribute to the quality of life in our communities. 3. 0 Research Methodology 3. 1 Research Design The research method will be applied research design. We have followed problem identification research. Our research is an exploratory research. Each respondent will be interviewed through filling up his or her questionnaire. Because of the conclusive nature of the objectives, we will primarily use quantitative questioning in the surveys. For making research questions more effective researcher will use Likert-5 Scale method for most of the questions, and also some other questioning method so that interviewers can easily express their opinions on the questionnaire, and it will facilitate the researcher to identify the actual objectives of this business research. The sample size of this study will be 40 and respondents will be selected from several universities throughout the Dhaka city. Eligible respondents will be adult over the age of 18. Information will be collected through interviewer administered questionnaire method. A simple random method will be used to select respondent to the questionnaire. 40 questionnaires will be prepared based on demographic factors of respondent (like: age, income, occupation, loyalty, media preference, leisure passing, etc) and some factors considered important for satisfaction measurement. The factors are: quality of product, price, convenience, flavor, taste, and brand image. Research questions 1. How does a brand image influence customers to choose a soft drink? 2. How does a quality influence customer to choose a soft drink? 3. How does taste influence customers to choose a soft drink? 4. How does price persuade the customers’ decision to choose a soft drink? 5. How does product availability reinforce the customers’ to choose a soft drink? Hypotheses of the study: Based on the Research Question, we have developed the following hypothesis: Influence of Brand image Brand image is a crucial extrinsic cue which provides specific information about product quality, reputation, performance, credibility, prestige, and so on about a brand. Hence, chain superstores with high image brands may have significant and dominating influence in customers for choosing to shop at a chain superstore. A well-known brand also reduces the consumers’ risk perception and increases positive preference towards a superstore. Brand image is also used as a symbol of social status sometimes and it forces the consumer to own the brand name of a chain superstore. Thus, if a chain superstore can achieve reliability and reputation as a high image brand, the consumers is highly influenced to choose that store whenever they are shopping. Therefore, our first hypothesis, H1: Brand image influences customers to choose a soft drink Influence of perceived quality Quality is the totality of features and characteristics of a brand based on its ability to satisfy stated and implied needs. When a consumer lacks sufficient knowledge about intrinsic cues, he or she may use perceived quality information to evaluate a brand. Nowadays, a consumer does not intend to buy just a brand, but he or she purchases the benefits associated with it. Consequently, high quality perceptions toward a brand achieve consumers’ preferences and satisfactions rapidly. Consumers evaluate a brand as unique, prestigious and reliable for its superior quality. If the product is associated with high perceived quality, the consumers’ trust of a brand is increased and thus a brand’s preference is also increased. Moreover, consumers use the brand’s quality to differentiate a brand from the other brands. Researchers generally have postulated that there are many different ways to differentiate products; superior quality is one of the most effective. Therefore, the perception of higher quality directly influences the consumers’ favorable evaluation of a brand. So, our second hypothesis, H2: Quality influences customers to choose a soft drink. Influence of taste Quality is the totality of a features and characteristics of a product based on its ability to satisfy stated and implied needs. When a customer lacks sufficient knowledge about intrinsic cues, he or she may use perceived quality of a product while deciding to shop at a chain superstore rather than at a departmental store. Nowadays, customers do not intend to buy just a product or its brand, but they purchases the benefits associated with it. Consequently, high quality perceptions toward a store achieve consumers’ preferences and satisfactions rapidly. Consumers evaluate a branded store as unique, prestigious and reliable for its ability to provide superior quality products. If the product is associated with high-perceived quality, the consumers’ trust of that store increases and thus that store’s preference also increases. Although there are many ways of differentiating products, researchers generally have recommended that superior quality is one of the most effective ways. So when a super chain store provides same products with higher quality, consumers will use that high quality to differentiate their products from products of other stores. Consumers will definitely buy products from that superstore rather than from departmental stores. Therefore, the perception of higher quality directly influences the consumers’ choice of chain superstores over departmental stores. Therefore, our third hypothesis: H3: Taste influence customers to buy a soft drink Influence of price Consumers are most likely to use price in deciding which store to buy from when some related information is lacking, when they are not familiar with a product, and when information about purchase context is lacking. Consumers often perceive price as an extrinsic quality cue. Several studies have searched consumer perception of price as an indicator of quality, and many of these have shown price to act on this manner. The argument behind this assumption is that: (a) Producing quality goods require sophisticated machineries that cost more and increase prices, (b) Manufacturers use high quality raw materials to produce quality products, and (c) It is unlikely that a product with low quality will be charged more in this competitive world But consumer markets of most products are highly price sensitive. Some brands of same quality are charged lower compared to other brands because of competition available in the market as marketing strategy or just because of that the supplier of that brand has some competitive advantages over distribution of its products (like wholesalers or chain supermarkets). In both ways, consumers are most likely to be influenced by perceived price, for choosing a chain superstore over a departmental store. Therefore, the following hypothesis is drawn based on the above reasoning: H4: Price persuades the customers’ decision to choose a soft drink Influence of Product availability Product availability is a very important construct for evaluating consumers’ purchase-decision making. Shoppers want to make their shopping easier and quicker, and they do not want to visit multiple stores to complete their weekly shop. Nearby department stores can store less number of SKUs (stock keeping units) while chain superstores can store in bulk amounts since they are comparatively much larger in size. And the variety of products is also much higher in superstores. They not only keep grocery items, but also products of wet markets (vegetables, meats, fishes, etc.) as well as a vast array of other household, personal care, and miscellaneous products. For example, at any point in time, there are nearly 20,000 different products available at stores of Agora while Nandan has capacity of displaying 22,000 items at a time. They also provide the latest and unique items of different products much before those could reach the retail department stores. And since these superstores have several branches at different locations, they definitely give the consumers to avail the benefits of high product availability. Therefore, when customers are looking for purchasing several types of products together, they are highly influenced by this extrinsic cue of product availability. H5: Product availability does reinforce the customers’ to choose a soft drink. 3. 2 Data Collection This was the critical part of the whole research process. The researcher had to carefully plan the whole data collection process and the success of the whole report depended on the precise execution of that detailed plan. The primary data source was the principle methodology used for this research. All the members of the group will collect the data conducting personal interviews. The questionnaire will contain several questions with close and open ends accommodation additional queries for understanding the opinion of the respondents and having an insight into the matter. 3. 3 Data Analysis After collecting data, a comprehensive screening process followed. Incomplete and biased data stored out and deleted from the data bank. Both descriptive and inferential statistics used in the analysis. We use two types software to analyze the data. The software’s are: SPSS Microsoft Excel Descriptive statistics will be used to depict the specific situation of specific aspects relating to choosing a soft drink. Factors analysis will be performed to identify the factor of choosing a soft drink. Correlation between the factors and age, gender, level of income and occupation will be identified to know the relationship. In order to explore relationship with the overall influence factors, multiple regression analysis will be preferred with the factors. Through this research and statistics analysis we had tried to find the demographic factors of the target market, their likings and decisions regarding purchasing juice. We also tried to find the reliability analysis of the data, mean of the independent and dependent variables and regression analysis to go to the findings of this research report. It gives the total picture of the target market based on demographic, socio-economic factors. Through this we will be able to measure about the age group, average monthly income, favorite programs and the important issue that influence them to purchase juice of the target customer. This is totally based on the survey that we have done. 4. 0 Limitations. For preparing this report we have several limitations for gathering appropriate information and other related issues. Our limitations are: Generally the customers are posh people. They are also busy people. So taking interview of them is really a big task. Sometimes they did not realize the questions and could not provide information. If a larger number of respondents were surveyed it would have been possible to get more accurate data about the consumer’s preference. So our analysis may not be reliable. There are may have some error in our research. Like, research error, interviewer error, data analysis error, etc. Since it was a very short period of time, we weren’t able to collect more data to acquire deep understanding. 5. 0 References Business Research Methods, 8th edition written by W. G. Zikmund â€Å"Marketing Research – an applied orientation† 5th edition written by Naresh K. Malhotra Business Research Methods written by D. R. Coopers and P. S. Schindler Appendix Questionnaire We are the students of Independent University, Bangladesh (IUB) enrolled in Business Research Methodology course. As per the requirement of course, a questionnaire has developed to investigate about factors regarding the customers’ consideration in choosing soft drinks. Regarding this objective we humbly requesting you to contribute in survey by marking this script. We assure you that the provided data will be used only for academic purposes. 1. Do you drink soft drinks? Yes No 2. How frequently do you purchase soft drinks? Once in a day Once in a week Once in a month Others (Please specify)†¦ 3. What is your age? Less than 20 years 20 to 30 years 30 to 40 years 40 to 50 years Above 50 years 4. What is your occupation? Service holder (govt. / private/ multinational) Businessman (Entrepreneur/ Intrapreneur) Student (high school/undergraduate/graduate) Homemaker Others (Please specify)†¦ 5. What is the average monthly income of your family? Less than 10,000 10,000Tk. to less than 20,000Tk. 20,000Tk. to less than 30,000Tk. 30,000Tk. to less than 40,000Tk. 40,000Tk. and above 6. When do you watch TV? During 12 AM- 6 AM During 6 AM – 2 PM During 2 PM-7 PM During 7 PM-12 AM 7. What do you do during leisure? Watching TV Fishing Hang out with friends Reading books Sports activities Others (Please specify)†¦ 8. Which media do you prefer? TV channel FM radio Newspaper & magazine Bill board ad Others (Please specify)†¦. 9. Which of the following factors influence the most of my purchase of soft drinks? Purchase of soft drinks Strongly disagree Disagree Neutral Agree Strongly agree Brand image Price Availability Taste Quality 10. Place your agreement level with the statements below: Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree I find the product (Soft Drink) of my choice always available. I consider Product Availability before going to a purchase the soft drink The Product unavailability creates negative impact on my purchase. I consider the products (soft drink) taste before purchasing any soft drink I consider the products (soft Drink) taste is the most important factor in purchasing the soft drink I think high price always ensures the high quality. Price of soft drink is important factor to me before deciding to buy any soft drink I find the price of the soft drinks available in our country affordable I consider Brand Image while purchasing soft drinks I think the Brand Image of soft drinks indicates my social status I think High Brand Image ensures high quality products.