Research Study based on Customer Loyalty


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A qualitative and Quantitative Method with traingular formula explaining the importance of maintaining customer loyalty and also explain ways in which customer evaluate the product for their purchase decision for the long term business performance

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Research Study based on Customer Loyalty

  1. 1. Building Customer Loyalty A Research Study Based on Youth StudentsFor the Consumption of Carbonated Soft Drinks By Sam Jose (G: 20395123) MSC Business Management Lancashire Business School Supervised by, Roger Armstrong University of Central Lancashire United Kingdom 1
  2. 2. ABSTRACTThe expansion of customer loyalty is a deliberate objective for most of the companies. Inmany business situations, the most important part of marketing activities can be observed asthe growth and maintaining repeat patronage or loyalty among the customers. The purpose ofthis research study is to examine the importance of youth consumers in the carbonated softdrink industry in order to build brand loyalty to maintain world market leadership.Hence this research study is focus on establishing loyalty among youth consumers. Howeverthe behaviour, purchasing decision and loyalty towards the brand is measured by comparingwith world‘s market leaders of Coca Cola and Pepsi youth consumers and differentiate theircompetitive advantage.The literature review covers all possible ways in explaining the importance of maintainingcustomer loyalty and also explain ways in which customer evaluate the product for theirpurchase decision for the long term business performance. This research also investigates theissues with the consumption of carbonated soft drinks among the youth consumers will beexamined. At the same time the investigation also explains the significance of building brandloyalty within the youth consumers in the carbonated soft drink market.Finally, the study recommends how to attract the youth consumers in the carbonated softdrink industry at present and make some tentative recommendations for both Coca Cola andPepsi Company. 2
  3. 3. DEDICATIONThis dissertation is dedicated to my pursuit of understanding the issues faced in thecarbonated soft drink industry, and maintains customer loyalty in this sector and support andlove of my family in India without which this endeavour would not have been possible. 3
  4. 4. ACKNOWLEDGEMENTI would like to thank my supervisor, Roger Armstrong for his support, guidance and timegiven to me over the last few months. Not only has he gone out of his way in supporting mebut has also been the main person in making this dissertation what it is today.I would also like to thank the hundreds of academicians and authors whose dedication andwork I have used through the course of my literature review.Much appreciation goes out to my university (UCLAN) in providing me with all materialsneeded to make this dissertation.I would also like to express my gratitude to my parents for their love, prayers, moral andfinancial support towards my education and making me what I am today. 4
  5. 5. TABLE OF CONTENTS TITLE PAGE................................................................................................................... I ABSTRACT..................................................................................................................... II DEDICATION................................................................................................................ III ACKNOWLEDGEMENTS........................................................................................... IV TABLE OF CONTENTS................................................................................................ V CHAPTER ONE Introduction....................................................................................... 7 1.1 Conceptual Background..........................................................................................7 1.2 Aims.......................................................................................................................10 1.3 Research Objectives...............................................................................................11 CHAPTER TWO Literature Review............................................................................12 2.1 Factors affecting Customer Loyalty.......................................................................12 2.2 Consumer evaluation on Brand which Creates Loyalty.........................................16 2.3 Influence of Behavioural and Attitudinal Loyalty among consumers....................20 2.4 Carbonated Soft Drink Industry............................................................................22 2.5 Present issues with the Carbonated Soft Drink Market.........................................25 2.6 Importance of Youth Market.................................................................................28 2.7 Pepsi‘s Youth Market............................................................................................31CHAPTER THREE Research Methodology......................................................................32 3.1 Introduction...........................................................................................................32 3.2 The Research Philosophy and Need for Paradigm................................................33 3.3 Principle behind the use of Triangulation............................................................36 3.4 Data Collection Methods.....................................................................................37 5
  6. 6. 3.5 Pilot Study and Pre-testing Questionnaire...........................................................39 3.6 Secondary sources of data...................................................................................40 3.7 Data Analysis.......................................................................................................41 3.8 Period covered by research..................................................................................43 3.9 Ethical Considerations.........................................................................................43CHAPTER FOUR Questionnaire Result.........................................................................44 4.1 Introduction.........................................................................................................44 4.2 Results.................................................................................................................44CHAPTER FIVE Discussion.............................................................................................63 5.1 Summary of the Findings.....................................................................................63 5.2 Discussion of the Findings...................................................................................64CHAPTER SIX Conclusion................................................................................................69 6.1 Recommendations.................................................................................................72 6.2 Implication for Further Study...............................................................................72BIBLIOGRAPHY................................................................................................................73APPENDIX..........................................................................................................................87 6
  7. 7. Chapter One Introduction1.1. Conceptual BackgroundThis research study deals with the problems facing by the carbonated soft drink market inorder to maintain customer loyalty among the youth targeted audience. Hence descriptiveresearch methods are using for this research study in order to identify and obtain informationon the distinguishing of a particular problems or issues facing by the carbonated soft drinkindustry. As (Hussey, 1997) pointed out that descriptive research method which helps toexplain the fact as they exists. Hence this method of study will helps to identify the issues orthe problems facing by the carbonated soft drink market in past and present situations, meanwhile descriptive method of research study will helps to obtain the data which often collectedquantitatively and the statistical techniques which helps to summarize the problems orinformation in order to identify the current issues in the markets. The main reason forchoosing this topic is because of the current problems facing by the carbonated soft drinkindustry of Cola markets among the youth and young adult consumers which cause todecreases the sales of carbonated soft drink market and it may cause the declining customerloyalty among the specified age range of markets. According to (Galguera et al.(2006) andQuinn et al. (2007) collecting information related to attitude, motivation and behaviour of theconsumers of the students who consuming the carbonated drinks will enhance to get anunderstanding on consumer behaviour and marketing decision making.Developing, maintaining and retaining customer loyalty towards a firm‘s product or servicesis generally to be seen as the important factor in the marketing activities Dick and Basu 7
  8. 8. (1994). Customer loyalty is one of the most important factor or the issue facing by thebusiness today. Unless the companies can retain the loyalty of their customer, they will losetheir customer for repeat purchase and the long term future of that business will be uncertainLinton (1993). According to Dick and Basu (1994) customer loyalty has been defined as thestrength of the relationship between the individual‘s relative attitude and repeat patronage.Therefore Aaker (1992) pointed out that considering the brand loyalty reflects the likelyhabitual behaviour of the consumers when brand make changes in the price, product features,its communication and distribution programmes etc. It is an important part of the marketingside for the expansion of the customer loyalty which focuses on the marketing strategy due tothe benefits related with the existing retaining customer Gwinner et al. (1998) and Hagen andMatthews, (2001). Discovering an exact measurement of loyalty is very important due to itsprofitability Reichheld (2003).However the concept of the customer loyalty is still unknown Hart et al. (1999). Consumerintended to repurchase the same brand after using it because they recognized that thisparticular brand or product meet their exact features, advertising, image of the brand or interms of quantity at the right price. Thus brand loyalty is a combination that may require withthe psychological and behavioural measurement towards the consumers Jacoby and Kyner(1973) and Knox (2001). For example consumers who may receive the basic informationabout new cola product. This product information will consist of price, package, taste, brand,price etc. However soft drink is a low involvement product and the new brand of product isunattractive to the consumers. But it is unlikely that the customers will be conscious towardsthe new product. Instead for a low involvement product such as cola soft drink, thepurchasing decision of the consumers will be likely influenced by the factors such as brand,packaging of the company, company image and advertisement etc. However analysing thechoice of brand preferences will prevent towards brand attitude and choice behaviour 8
  9. 9. Sengupta and Fitzsimons (2000). As market becomes more competitive and most thecompanies are trying to maintaining the existing customers and some companies have beenintroduced variety of activities to improve customer loyalty. However in business, benefitsassociated with customer loyalty are widely recognized. These include capturing of low costrelated existing customers rather than capturing the new customers especially within mature,competitive markets Ehrenberg and Goodhardt (2000). It is known that increasing the longterm relationship with the consumers is more beneficial so that the reward for this group ofconsumers will be long term and increasing Grayson and Ambler (1999).The brand consumer relationship among the consumers may vary depending on the differentpersonality of consumers and the way in which individuals build up relationships Fournier(1998). However Fournier and Yao (1997) pointed out that customers may also createattachments with more than one brand in the same category. Hence this research alsoconcentrating on the behavioural and attitudinal loyalty among the consumers in thecarbonated soft drink market comparing with the Coca Cola consumers and Pepsi consumers.Chaudhuri and Holbrook (2001) suggests that the behavioural loyalty will helps to identifythe repeat purchase behaviour of the brand, whereas attitudinal loyalty gives a degree ofobligation towards the value associated with the brand. There are many ways to correlate theattitudinal and behavioural loyalty among consumers. Customer behaviour of purchase can beobtained from the survey result taken by customers. However attitudinal loyalty can bemeasured in a survey, taken by the customers in which their observation on various issuessuch as relationship between the brands, switching behaviour of customers etc Chun (2008).Hence the survey results helps to analyse the data which gathered among the consumersloyalty can be specified, estimated, assessed and presented in a systematic manner Chun(2008). 9
  10. 10. Youth customers are one of the attractive sector as it concerned as the large demographicgroup in most of the developed countries and it was extremely benefit the business sector toproduce lot of sales in this particular sector Josefowicz (2003) and Solomon (2007).Moreover obtaining the relationship of young consumers in the early age of period habituallyformed and other services may be cross selling over the time in deeper and it will create thepeople to start a relationship to the product which exists Thwaites and Vere (1995). Moresignificantly consumers are more individualistic and today‘s market is being globalized. Itmeans that the company should know that what makes the customer to take a quick decisionand satisfies the customer is primary to the modern business world Ellwood (2002).Therefore Coca Cola and Pepsi always trying to keep particular differentiated targetcustomers, for which they build different kinds of marketing strategies in order to retain thespecified targeted customers. For example of diversity of categories are ‗Coke Diet‘ and‗Pepsi Max‘ Ellwood (2002). Nevertheless, the youth market is segment is not homogenousin nature Lewis and Bingham (1991) and Bartlett (2004). When price is not an importantfactor to the customer, especially low involvement product of cola most consumers are maketheir purchases based on how they feel about the product. Mean while positive feelings suchas happiness, love, are some of the desirable feelings of the consumer and advertisement playan important role which emotionally motivates the consumer to buy the product effectivelyCathy (2007).1.2. AimsThe overall aim of this research study is to examine the behavioural and attitudinal loyaltyamong the youth consumers in the consumption of carbonated soft drinks and to analyse theirinfluential factor for the purchase of this low involvement product and also reasons fordissatisfaction. 10
  11. 11. 1.3. Research ObjectivesThis research studies have a clear set of objectives in which each of the aims having arelation between each other to be achieved as follows:  To review the literature to identify the influencing factors of attaining customer loyalty among the youth consumers in carbonated soft drink industry.  Gather research data for comparing the factors influenced by the youth consumers for building customer loyalty of Coca Cola and differentiates with the Pepsi Consumers.  Analyse the current problems faced by the carbonated soft drink market affecting to the youth consumers.  Comparing contrast of fundamental reasons for increase or decrease sales in the carbonated soft drink market.  To draw conclusion and make tentative recommendations. 11
  12. 12. Chapter Two Literature ReviewIn this chapter, the literature review was divided into four sections. First of all it reviewed thegeneral concept that describes the factors affecting customer loyalty for maintain long termbusiness performance. Secondly, it is comparing the influencing factors of lasting customerloyalty of Coca Cola Company with their major competitor Pepsi. In the third section, it isinvestigating the current issues affecting to the carbonated soft drink industry. Finally it isinvestigating whether young consumers are beneficial for the Coca-Cola Company and Pepsiin order to increase their revenue.According to Dick and Basu (1994) customer loyalty has been defined as the ―strength of therelationship between the individual‘s relative attitude and repeat patronage towards theproducts‖. Customer loyalty is often related with a brand. Based on ideas and principles inmarketing a brand is a name, sign, symbol, term or design or combination of these, created toidentify and differentiate the brand includes goods and services of one seller from those ofcompetitors Kotler (2003). Operationally, a brand conveys to identify the name or fame thatrepresenting a specific set of unique features, benefits and services to the buyers. Brandbuilding is a major part from the marketing side in order to undertake the attraction ofcustomer loyalty Kotler (2003).2.1. Factors affecting customer loyaltyMajority of the marketers agreed that ―loyalty‖ is the most important factor that which affectthe performance of the company and Dowling et al. (1997) pointed out that that the loyal 12
  13. 13. customers are less price sensitive and spend more in the product while they are loyal to thespecific brand or the company. Moreover there is a primary belief among the marketers that itis cheaper to market to existing loyal consumers rather than the new ones. According to themore academic approach by Oliver (1999) consumer loyalty which means an intensivelycommitment with the consumers to buy the product or commitment with the product andservices in the future. Therefore it is uncertain whether that a repeat purchase behaviour orretention can be fully regarded as a customer loyalty or devotion should be considered assuch. For example a routine purchase of buying bread at the corner shop an act of loyalty tobrand or whether it is convenience with the shop. In fact several studies has been proven thatthere exists a direct connection between the satisfaction and loyalty. Previous research studiesexamined that the satisfied customers become loyal and dissatisfied customers may move tothe other seller Heskett et al. (1993).The primary objective of implementing ACSI (American Customer Satisfaction Index) in1984 was to explain the development of the customer loyalty. Therefore in ACSI model thereare three factors which include the past experiences of the customer loyalty they are;perceived value, perceived quality and customer expectations Anderson et al. (2000).However in the ECSI (European Customer Satisfaction Index) model divided into twoelements. First one is ―hard ware‖ which contains the elements of the product and servicesand the second one is ―human ware‖ which consists the customer service which means thepersonal behaviour and atmosphere of the environment Grönholdt et al (2000). In both ofthese models it is revealed that satisfaction should increase the loyalty of the consumers.When the satisfaction is low the customer will have the tendancy to exit e.g. switch to acompetitor or express their complaints about the product or services Grönholdt et al (2000).Researchers have shown that 60-80% of customer who defect to the competitor said that they 13
  14. 14. are satisfied or very satisfied on the survey just previous to their defection Reichheld et al.(2000). Hence it is clear that there should be other factors apart from satisfaction will have animpact on the customer loyalty.Several authors have measured different aspects of loyalty. Mostly loyalty have been seen asa multidimensional construct acknowledged by different dimensions, some of which canidentified by the behaviour of the customers and other on the basis of psychologicalprocesses. Hence Rundle (2005) pointed out that that it should be measured byindividualizing the attitudinal loyalty defined as a customer tendency towards a brand thatinclude preference Bowen and Chen, (2001) and Butcher et al, (2001) intent to repurchaseBloemer et al. (1999), obligation and word of mouth Ganesh and al. (2000) a complainingbehaviour having the positive and negative meaning of dissatisfaction response. Researchhas shown that the declining of retention only by a small percentage can have the advantageon the major profitability of the company Reichheld and Sasser (1990). According to Littleand Marandi (2003) a stable consumer base creates the opportunity for cross-selling and itdecrease the cost of marketing. (Evans and Laskin, 1994; Mittal and Lasser1998).While explaining the positive effects of having loyal consumer base, customer loyalty isvalue motivated for. It is to be mentioned that while improving the quality of customerloyalty, a key issue or argument factor is that identifying the problems for the customerdefection, i.e. causes for the customer disloyalty. Payne (2000). Kim, Han and Park did aimmense research and from that research they analysed that the brand personality and loyaltyhave a link between each other. From their research they got positive support to hypothesisthat the brand personality ultimately affects the brand loyalty Kim et al. (2001). People have 14
  15. 15. showed that they are using the particular brand or product of a company for their self image.Tidwell and Horgan (1993).Customer satisfaction is prior to the loyalty. Customer satisfaction can be used as an indicatorof future consumer purchases and the satisfied customers will have a higher probability ofcreating repeated purchase behaviour in time Zeithaml et al. (1996), of recommending othersthat to try the source of satisfaction (Reynolds and Arnold, 2000; Reynolds and Beatty,1999), and of becoming less willing to the competitor‘s offerings Fitzell (1998). Morespecifically satisfaction is found to be essential influencing factor of customer loyalty(Fitzell, 1998; Fornell, 1992;Reynolds and Beatty, 1999; Sivadas and Baker-Prewitt,2000;Zeithaml et al., 1996). Whereas satisfaction and customer loyalty recognized to be themost strongly relationship in most of the research studies. (Anderson andSullivan, 1993;Fornell, 1992; Rust and Zahorik, 1993; Taylorand Baker, 1994). Satisfied customers will bealways thinking to be loyal to the brand or product Rowley (2005) or without consideringany effect of the other variables Fornell 1992 and Oliva et al. 1992.Even though the massive growth of young people among the population, media is alwaysconcentrating to remain the youth target audience. The media has always a play a major rolein order to increase the loyalty customers. Television, radio and all other campaigns attractingthe youth and marketing aims aged between 18 to 35 years of old customers. Youngerconsumers are very significant and vital, but the problem is if the advertisers areconcentrating on youth targeted audience, they are ignoring the other demographically andeconomically vital market of target customers (Carrigan and Szmigin, 1999). Advertisers andthe marketers may have ignored the past generations over 50‘s but they should need toformulate an idea of strategy towards this new generation customers to fit, healthy and above 15
  16. 16. all approach to the older people also because the new generation young consumers maybecome the future older customers which will reflect on the loyalty of a product Marrin(1999).2.2. Consumer evaluation on brand which creates loyaltyAccording to Hossain (2007), consumer brand evaluation can be studied for the non durableproducts especially soft drinks can be studied through certain factors such as brand, brandimage, brand attitude, product attributes and perceived quality. Soft drinks is an importantproduct item in both urban and rural areas. Consumer may purchase the soft drinks today fortheir refreshments. Hence the soft drinks is consumed all over the world shows the massivedemand among the consumers (Nuruzzaman, 1996). The consumer purchasing decisions ofsoft drink are influenced by a lot of factors, which direct the consumers to select a specificbrand in preference to others. They are as follows;2.2.1 BrandThe brand is to be concerned as the centre of element of a product which allows otherinformation regarding the brand to be support to it Aaker (1991). A brand which meanscannot measured to be chosen (Baker et al. 1986). Consumers will themselves take decisionto buy the particular product because of the popularity of the well established brand (Roselius1971, Jacoby et al. 1977 both cited in Keller 1993). If a consumer want to buy a particularbrand, a positive attitude should be create first but brand attitude and intention to buy certainbrand cannot be formed unless brand awareness occurs Rossister et al. (1991). A good brandname gives a initial feeling to the particular brand will be attracted by the customers andgives a good marketing edge to compare with that of the competitors Rooney, (1995). For 16
  17. 17. example a study showed in Turkish cola market that 79.4 per cent of the people like Turkishcola brand name. It is because of the Turkish cola consumers become aware of the brand colaTurkish. The advertising concept attracted the cola Turkish consumers to buy the particularproduct and the brand name have a influence in the nationalistic value, Turkish life style, actof patriotism and positive nationalism. Ulas and Arslan (2006). According to a surveyconducted by the grocery manufacturers in USA, American consumers are loyalty to theirnational brand and a familiar brand is their first preference or second preference to select theproduct from the supermarket (Ulas and Arslan, 2006). Consumer may create certainrelationship with the brands on the basis of certain characteristics of those brand and theirperceptions and their behavioural attitude towards the brand (Firat and Schultz, 1997). Brandprovides that the producers to give added value to their product and services. Nobody can saythat the differentiation on coke and pepsi. It is because of the Coke‘s added value dividethese brand and giving differentiation in the market share Blacket (1991).2.2.2 Brand ImageA brand image which means the consumer understanding about the whole brand and howthey see it and it doesn‘t happen together with the brand identity. Brand image can be definedas the consumers‘ emotional concept or response towards the particular brand (Dobni andZinkhan,1990). Chiranjeeb (1997) claimed that the brand name is the basis of brand image. Ina broad view purchase decision of a product or particular brand are based upon the existingattitude towards the brand at the time of purchase. Consumers buying intention of a productare based on the converting of their attitudes into intentions and buying behaviour are veryfrequent Hossain (2007). Coca cola is a brand of soft drinks which have specific and 17
  18. 18. protected trade mark, logo, pack and design. Coca cola brand offers consumers taste,refreshment and promising value and quality worldwide Blacket (1991).2.2.3 Brand AttitudeAn attitude towards a brand is not an obvious behaviour but rather it is a secret orunobservable internal reaction among the consumers Kim (2002). It is one of the perceivedidea in the marketing Gillbert (1995). The responses of attitude among the products becomepositive or negative. Consumers may become learn these attitude over time by beingobserving into the product openly or by receiving information about the product. Learnedattitude towards a brand guides the common behaviour among the consumers and gettingconsistently favourable or unfavourable response towards the pattern Hossain (2007). Gibson(2008) reported that the word of advertising seems too basic for the effective of advertising.For example a Can of coke next to the word ‗awesome‘ or a can of pepsi showing the pictureof a happy couple. Prior research studies shown that the reported attitude towards a brand arenot affected by the things similar to each other. However a news paper in June, 2008 issue ofthe Journal of Consumer Research analysed that our suggested opinions and findings that weactually found will be more influenced than we think. Bryan Gibson (Cental MichiganUniversity) had showed the students of psychology undergraduates regarding the selection ofcola brands with the words and images Coleman (2009). From the participants he analysedthat the students having different attitude towards the brands, For example some studentshave positive attitude towards cola brand associations such as a field of flowers, the wordawesome or a mother holding a child. However other had negative aspects towards thesewords or images. Gibson explained that for choosing a product, the complete product attitude 18
  19. 19. towards a brand have greater influence while choosing and the consumer may be distractedor making any unplanned selection for purchasing a product Coleman (2009).2.2.4 Product AttributesProduct attributes which shows the benefits of products, and these benefits or quality of theseproducts are the base for using the advertisement and the promotion offer to join with a brandthat motivates the consumers for the influence into the brand attitude Hossain (2007). Now adays the differentiation of product of the different companies have no importance in givingthe product attributes which may not creates any differences from those of competitor‘s orsometimes they are not actually used by the consumers at all (Chowdhury and Islam, 2003).The claim of being a ―Safe‖ sugar replace with the Coca cola and Pepsi gained a significantintegrity offering their products that contained Nutra sweet (Rao & Ruekert, 1994). In effectthese other firms were creating reputation through communicating to the market place that,should be product turn out to be injurious to health of consumer‘s then Coca Cola, Pepsi andother companies agreed that the nutra sweet will suffer the unfavourable publicity orconsumer refusal (Rao & Ruekert, 1994). Different techniques had been introduced in theliterature that suggests that which attributes are likely for the consumers to evaluate theproduct (Snelders and Schoormans, 2000).Making product differentiation from those of the competitors can by adding a worthlessattribute may increase consumers‘ quality insight or it can reduce the perceived risk(Simonson and Tversky, 1992). It is proven that the product attributes are most important tothe consumers. In real life the decision making process of the product by consumers are not 19
  20. 20. only attracted by the present value of the product but also has to take the future performanceof the product and attributed services into consideration (Chowdhury and Islam, 2003).2.2.5 Perceived QualityPerceived quality can be defined as the consumer‘s evaluation about the overall performanceor superiority of the product (Zeithaml, 1988; Aaker and Jacobson, 1994). Perceived qualityengages the competitor frame of reference. Perceived quality is basically the consumersperception about the product and thus will get the concrete overall opinion about the brand.Furthermore perceived quality is actually differentiated from the actual quality and cananalyse from the previous experience from the product and services Anderson et al (2006).However there is a argument in the loyalty segment. The prediction of the perceived qualityreported by the loyalty customers versus those of the customers who are loyal to anotherbrand will be usually different. Hence the measurement of perceived quality may not be exactin some contexts Aaker (1996).2.3. Influence of Behavioral and Attitudinal loyalty among consumersBrand loyalty will have great impact on the purchasing behaviour and commitment torepurchase the product or services in the future, thus it helps to causing repetitive purchasingbehaviour among the customers even though it affect the situational influences and marketingefforts to cause switching behaviour. Oliver (1999, p. 34). This definition of loyalty willhelps to differentiate the loyalty as behavioural, and attitudinal. Chaudhuri and Holbrook,2001;Uncles et al., 2003). 20
  21. 21. 2.3.1 Behavioural LoyaltyAccordingly some authors (Chaudhuri and Morris 2001, Bandyopahyay and Martell 2007)behavioural loyalty means the customer‘s interest to continue the relationship with theprovider in the short period. In other words customer interested to continue the relationshipwith the current provider or services cause into switching behaviour. In that senseBehavioural Loyalty doesn‘t meant to be the interest in the commitment with the providerhowever it shows the degree of loyalty in the immediate future. Behavioural loyalty in theconsumable goods market are often the result in the habitual behaviour of the consumers. Forexample Coke and Pepsi is a non durable consumer product East, (1997). However the initialpurchasing behaviour of the consumer product may result into the decision making process ofthe attitudinal behaviour loyalty of the consumers. Furthermore the changes in the marketsuch as new entrants, changes in the legislation or technological improvement, thus thepurchaser is always likely to make different decision. Thus breaking the habitual nature ofpurchase from the customers Rundle and Bennett (2001).In 1990 it has been seen that the unpredictable increase in the number of competing soft drinkproduct alternatives arise and increase the breakup of markets, For example coke‘s marketshare has been dropped from 24.2% to 21.7% from 1975 to 1984 , the percentage of cokeusers drank of 18% reduced to 12% percent due to the to the differentiation in the rivalryproducts Hartley (1992). With the introduction of soft drink products, a massive exclusivelyloyal consumers of regular one brand becomes diverted to more than one brand. Thus itdivided the behavioural loyalty to divided loyalty Thompson, (1996). Under thiscircumstances the managers view point is building brand loyalty cannot understand thecustomer who exclusively purchasing the particular brand. However there should be more 21
  22. 22. interested in the comprehensive understanding about their brand loyalty base (Yim andKannan, 1999).2.3.2 Attitudinal loyaltyAttitudinal loyalty can be derived as a tendency towards the company deriving from apsychological process (Jacoby 1978, Rundle and Thiele, 2005). By defining ―attitude‖ is aperson‘s quite feelings, consistent evaluation and tendancy towards an object or idea . Peoplehaving different kinds of likes and dislikes of moving towards or away from them(Armstrong and Kolter, 2.009, p. 177). Hence within this perspective thus it became evidentto understand the attitude of customers towards a particular product to marketer‘s offerings isan essential element to win in the market place. Accordingly the attitude, motivation andpurchasing behaviour of the students to the purchase and the consumption of the nonalcoholic beverages will enhance to understand the consumer behaviour and the marketingdecision making. According to the previous researchers majority of the existing studiesgeneralise about the consumers attitude, motivations and behaviour about the food andbeverage consumption, whereas several authors Dibb and Simkin, 1997; Moschis et al., 1997;Tam and Tai, 1998; Nwankwo and Lindridge, 1998; Lin and Hsu, 2002; Galguera et al.,2006; Quinn et al., 2007; Gbadamosi, 2007) pointed out that increasing different marketsegmentation based on the different diversity which exist among the consumers.2.4. Carbonated Soft drink industryThe growth of the carbonated soft drink(CSD) from the period of 1960 to 1990 wasincredible and have a great increase in the population in these 30 years. Per capita 22
  23. 23. consumption of the soft drinks increased to 2.5 times over the 30 years period of time.Coleman (2009). Dube (2005) reported that in 1998, 49 percent of the total U.S. beveragegallons consumed per capita by the CSDs per year. Market size, growth rate and overallprofitability are the three economic factors that can be indicated as to evaluate the soft drinkindustry. Datamonitor (2005) found that the value of the soft drink market totally reached$307.2 billion in 2004 with a market value of forecast of $367.1 billion in 2009. A recentstudy by the national carbonated soft drink association (NSDA) evaluate that the industrycurrently employs over 175,000 people, generating $8 billion per year in the salaries andwages Dube (2005). In 1998 CSDs accounted for 49% of the total gallonage in the USbeverage market, increasing over $54 billion revenues approximately 56.1 per cent gallonsconsumed per capita per year Beverage world (1998).Carbonated soft drink market consists of diet cola, standard cola and some fruit flavouredcarbonates and mixers. The United Kingdom market of carbonated soft drinks generatesrevenue of $9.6 billion in 2008. The coca cola company accounts for 24.8% volume ofcarbonated soft drink market in UK. Supermarkets and hypermarkets supply 34.5% ofcarbonated soft drinks. The United Kingdom soft drink market is reduced to 0.7% in 2008 toreach the a volume of 6.2 billion litres. The carbonated soft drink market in UK forecast todecline with CARC - 2.2% predicted in the five year between 2008-2013. Datamonitor,(2008). A significant failure in the year of 1985 was reported was the introduction of newcoke (the reformulation of the Coca-Cola‘s flagship product) was meant to be the riskiestproduct introduced in the history of CSD Greising, (1998). New coke turned to be a failure ofproduct in the market however the original formulae was redistributed immediately. Hencethe introduction new coke proved that without consumer acceptance, the new product will failaccording to their inception and harm for the firm‘s ability to effectively market the product 23
  24. 24. to the consumer base Greising, (1998). Gerry (2002) stated that the Coca Cola widelyregarded as the world‘s popular valuable brand has an estimated value of $70 billion.2.4.1 Industry investigation of soft drinksDeichert et al. (2006) pointed out about the soft drink industry by stating, ―For years the storyin the non alcoholic sector centred on the power struggle between Coke and Pepsi. Howeverindustry giants have begun started relying on new product and creating for non carbonatedbeverages for their growth extension. Hence in order to understand the soft drink industrymarket it is essential to consider the factors such as the dominant economic factors, fivecompetitive forces, trends in the soft drink industry and the industry key factors.2.4.2 Dominant Economic FactorsMarket size growth rate and profitability are the major three economic factors that can beused to analyse the soft drink industry. The market volume of the industry has been changing.In the non alcoholic industry, the soft drink consumption has a market share of 46.8%.illustrated in Table 3. The total value of the market share of soft drinks industry has beenincreased to $307.2 billion in year of 2004 with a market forecast value of $367.1 billion in2009. Further more in 2004 the soft drink volume of the market was 325, 367.2 million litres(See table 2) in appendix section. Clearly defined the profit is being increasing in the softdrink industry however there are several obstacles to overcome in order to detain the marketshare Deichert (2006). 24
  25. 25. Datamonitor (2005) indicated that the consumption of the growth in the soft drink marketglobally will be expected to decrease because of the reflecting flow in the market price. Thechanges of soft drink industry are growing to other non alcoholic industry such as tea andcoffee (11.8%) and bottled water (9.3%). Competitors begun to adopt new product categoriessuch as sports drinks and energy drink for the increase of growth in the soft drink industry.Profitablity in the soft drink industry remain concrete however the market saturation in theUS market is shows decreasing from the reports of analysts.2.5. Present issues with the carbonated soft drink marketWith a new product failure and discontinuation of rates of market increased to 80% across thefood and beverage industry and it is necessary to study the demand of the product in theconsumer soft drink industry while formulating innovative strategies to foster success in thefuture. It has been reported that approximately 1235 total new beverages had been introducedin 2002, whereas approximately 250 survived by late 2003 which can say that 80 percent ofthe failure in this sector Beverage world, (2003).Anderson (2008) stated that the industry-wise the carbonated soft drink market has beenfighting competitively and it has been reached to the maturity point. Hence the industrygiants have begun to rely on new products and the non carbonated beverages for the salesgrowth. The past 20 years this trend has been observed. The consumers changing perceptionsin tastes and demographics and concerns about the health and dieting are some of the reasons.Increased competition from some of the other beverage industry causing the non developmentin the CSD market. Other changes include the changing life style of the consumers, theirattitudes towards the product, globalization, changing societal concerns and evolving buyer 25
  26. 26. preferences. With key changes in the perception of consumer demand, there are manyindicators shows consumers desire of more bold and exciting flavours. Mintel‘s May 2008market report says that the flavour of cherry was to be claimed the top new flavour in thecarbonated soft drink market in 2006. They reported that Coca-Cola‘s Black Cherry, VanillaCoke, includes its diet version increased their sales of $81 million in the inaugural of theproduct in 2006. In Mintel‘s examination period (2001-06) for their April 2007 reported thatthese trends shows the new product introduced into the market having highest sales but laterdeclines thereafter. The sales increases shows the consumers‘ willingness to try the newproduct but thereafter declines shows the product‘s lack of continuity in the consumers tasteand preferences.The consumption of soft drink increased significantly over the recent years with a fivefoldincrease in United Kingdom between in 1974 and 1999 and the similar trends of theconsumption of soft drink in U.S. indicated that the massive consumption of carbonated softdrinks result increasingly rates of overweight and obesity, although there is a link betweenthe soft drinks and weight status in the adults and the children Claire et al. (2008). Differentopinions are reported about the problems related with the carbonated beverage product, somesuggesting that carbonated beverages are showing negative influence and other describing itsbenefit when consumed in variety of conditions Malik et al. (2006). However the scientificresearch evidence providing that for further investigation that what happens to the carbonateddrinks while consumed and how does it affect the digestion.In examining with the carbonated beverages it is to consider the important factors such ascarbon dioxide with which these beverages are charged, sugar or sweetener contained and theeffect of other substances used by the industries for their preparation. Cuomo et al. (2009). 26
  27. 27. Beacause of the issue with the overweight and perceived require to slim diet drink weredeveloped. These drinks are marketed as sugar free drink e.g. (Coca Cola), however in thesedrinks they are using artificial sweeteners so as to reduce the content of the calorie. But thesedrinks have a erosive potential that may increase the enamel demineralisation. However thereare lot of other problems with the health concerns while using artificial sweeteners in thecarbonated diet drinks Tahmassebi et al. (2006). According to Centre for Disease Control andPrevention (2000), being overweight and obesity increases the risk of diabetes, heart disease,stroke, cancer and other diseases causing a number of social and psychological problems inmillions of Americans. They also found that the obesity has been increasing among the adultsbetween 1976-74 and 1999-2002 has been doubled rising from 15 to 31 percent and theoverall rate of obesity and the overweight in 1976-74 was 47 percent increased to 65 percentin 1999-2002.The national Institute of Health recommends that the people who are trying to reduce theirweight should drink water instead of sugar contained soft drinks. Consumption of soft drinksmay contribute to obesity not only for children‘s but also for young adults indicated by aHarvard School of Public Health study of tens of thousands of nurses within in an eight yearperiod of time. The consumption of soft drinks by women from less than once a week to oneor more per day gained an average weight of 18 pound. The study also found that the womenwho drinking soft drinks daily had almost twice the risk of diabetes as compared to womenwho drank less or no soda carbonated drinks Schulze et al (2004).Researchers found that consuming soft drinks may affect the dietary intake quality amongyouth by displacing milk consumption Harnack et al, (1999). Soft drink consumption athigher level may have other adverse effects on dietary intake. For example comparing with 27
  28. 28. the non consumers of soft drinks, youth consumers were using the soft drinks at higher ratewere less likely to consume 4 oz of fruit juices per day and had lower intakes of Vitamin A,Vitamin C, riboflavin and lower Calcium phosphorous ratios Harnack et al. (1999). Previousresearchers Lin et al., (1994), pointed out that several reasons for the increase of soft drinkconsumption among youth have been continuing with higher rate due to the increased use ofthe targeted Youth advertising and the marketing techniques by the soft drink companies,larger single serving package sizes, lower price of soft drinks increased the national trendstowards the eating at fast food and the restaurants that serves the soft drinks as the mostimportant beverage, and the easy availability of getting soft drinks in the school settings,vending machines and school cafeteria are some of the marketing tactics using among thecompanies to consume the soft drinks at higher rate among youth consumers.2.6. Importance of Youth marketThe young adult market aged between (18-24) is a vital and powerful segment of consumersto be considered as a separate section Ness et al., (2002). The young adults make up 3.6 percent of the population having a spending power of approximately £10 billion per annumwithin UK itself Jenkinson (2000). Zollo (1999) predicts that the young adult market in theUS spend a lot of money to buy the products approximately US $100 billion a year andanalyst predict that this segment will spend more by 2010 in comparison with the babyboomers according to the managers Merrill (1999). Young adults are increasingly theessential target market for the managers because of their: increasing influence in their familyspending; capability to spend in the future and ability to follow the new trends in the marketZollo (1999). Young adults are found to be more concerned with the new trends compared toany other segments in the market and influential in the mass consumer movements of other 28
  29. 29. segments Zollo (1999). Consumers including young adults are often influenced by a lotexternal factors which include self image, lifestyle and consumption pattern. Establishing thespecific factors that influencing the young adults and their purchasing behaviour pattern havebecome a serious issues for the behavioural researchers (Martin and Bush, 2000). Previousstudies have investigated how young adults learn what to consume and what influences them(Keillor et al., 1996; Moschis and Churchill, 1978).The studies which has been showed according to the social learning theory says that theconsumers‘ behaviour is affected by lot of sources such as their family values (Baltas, 1997and Feltham, 1998), financial restraints (Ness et al., 2002; Rowley, 2005; East et al., 1995),peer group influences (Feltham, 1998; Auty, 2001), self perception (Ness et al., 2002; Auty,2001), and other social influences (Feltham, 1998; Ness et al., 2002). Solomon (1994),highlighted that the teenagers will realize the influence of brand loyalty while purchasingdifferent kinds of products in their age and influenced to buy the product during that ageperiod. Hence the youth or teen may rely on the particular product in that particular age andkeep purchasing their favourite brand on that age onwards (Hollander and German, 1992).There are several other important factors to be considered which has been identified by theresearchers such as age, gender, lifestyle, access and purchase frequencies (Jacoby andChesnut, 1978 and Veloutosou et al., 2004). Many of these young adults being studentsseveral researches have also found the accommodation type (Feltham, 1998 and Ness et al.,2002) and the year of study Hein (2003). Whereas ample research has been carried outreflecting upon the relative factors and their influences, according to Ganesh et al. (2000)current knowledge is not enough offering the insights to the managers for measuring thecustomer group and their decision makings. One of the reasons why managers may not target 29
  30. 30. this particular consumer group segment is because they are thought to be less loyalty towardsthe brand. The other reasons include the young adults have less experience and attachmentwith the brands Howell (2004). Previous research (Pollay et al., 1996; Spero and Stone, 2004;Roehm and Roehm, 2004) assumes that the young adult customers are not much loyal to thebrand however; these findings are relatively uncertain and creating more argument.According to Wood (2004) suggests that the finding related to the loyalty or the switchingbehaviour within the young adults market should be concentrate with very prudence becauseof this segment is very dynamic in its nature and hypothesis would miss the prosperity oftheir difficulty in the process of decision making. Furthermore, Ness et al. (2002) observesthat young adults have the common problem of allocating of financial resources and becauseof this particular problem the young consumers may have more reasons to have switchingbehaviour between products with the aim of saving money. On the other hand Jenkinson(2000) pointed out that, young adults provide managers with a rare opportunity. During theirprevious life cycle young adult‘s development of behavioural response are observed throughtheir lives. For example this trend is well researched in the tobacco industry whereas it isobserved by many researchers that the young adults will be tend to be loyal to their particularbrand more than a decade once addicted (Pierce and Gilpin, 1995 and Gilpin et al., 1997).Generation Y consumers aged between (14-31) years old and mostly in this age they areready to enter into the college about 34% of the Generation Y consumers will be agedbetween 18-23; and another 36% will be 24-30 years old Paul (2001). Janoff (1999) pointedout that as a college students specified in these ages, they are getting the freedom to enter intothe market to consume the product by their own interests and of course will have a specificneeds and objectives. According to Wolburg and Pokrywczynski (2001) the college market isone of the most massive segment in the consumer market due to its market size, attitude and 30
  31. 31. behaviour to the stylish products, due to the influence of brand loyalty acquired in theseinfluential years, their position as early adopters and the profitability of their life style orliving standard associated with their college degree. College aged generation Y consumershaving the purchasing capacity of $200 billion annually Gardyn, (2002).2.7. Pepsi’s Youth marketPepsi returned to its youth oriented market when they had introduced "Be Young, Have Fun,Drink Pepsi" campain in Januray, 1993. Pepsi was expecting to gain the market share of atthe expenses of their rival company Coca Cola Company. The attitude of the Pepsicommercials clearly stated of desire to reach the younger audience Patricia (1993). Howeverthe campaign Be Young, Have Fun, Drink Pepsi" have well received by the Pepsi consumersbut it doesn‘t enable the Pepsi to gain the market share from Coca Cola which wasconcurrently running on his high profile campaign, always Coca Cola the campaign of Pepsiis run its course, Pepsi inaugurated a new campaign "Nothing Else Is a Pepsi," during the1995 Super Bowl Patricia (1993). BBDO(Pepsi‘s advertising agency) was trying deliberatelyto attract the youth targeted customers. Targeting of youth consumers were reflected in thesales of Pepsi Youth consumers. Furthermore the advertisements introduced by Pepsi wereamusing and entertaining to the targeted audience. At the same time Pepsi was competing tobeat the Coke‘s market power, even though the entire soft drink industry was facingcompetition from the new source of entrants (Thomas, 1997). 31
  32. 32. Chapter Three Research Methodology3.1. IntroductionThis chapter will discuss the techniques used to carry out this piece of research. In thischapter it is also explaining the process by which the data was collected and the varioussources used for the same. The data analysis techniques and the sampling are also will bediscussed herein. This chapter will critically evaluate why certain methods used for this pieceof research and others disqualified. The latter part of this chapter will be discussing the aboutthe time constraints included to conduct this research and constraints concerned in carry outthe same. This chapter also discusses about how respondents were selected and what othersources were used to collect the secondary data materials. The methodology has beenstructured to accomplish the objectives of the research questions which meant to attain, whichare: A. Critically evaluate the literature surrounding regarding the, influence of the customer loyalty among the youth students or youth consumers, evaluating the importance of building customer loyalty for the long term business performance of the company. Loyalty towards a product or brand among the youth consumers will be compared with the similar products of two different companies‘ i.e, Coca Cola and Pepsi and discussing the current issues regarding the carbonated soft drink market which affects the performance or sales of the company. B. Conduct primary research by way of questionnaire given to the youth students who were the target audience, to understand the buying behaviour and the attitude of the youth student consumers who were using the carbonated soft drinks, thus analysing 32
  33. 33. the respondent information from their understanding regarding the loyalty towards a product from the minds of the consumers. C. Findings from the questionnaire result will be analysed and compared with the literature review to obtain the overall findings of this piece of research. D. Finally conclusion of the research analysis will be illustrated and understanding or any recommendations regarding the Customer loyalty among the youth consumers will be explained.This chapter will also discuss in detail about why mixed methods were used in this piece ofresearch work and discussing why the use of triangulation method is unavoidable in theframework of this research. An effort has been made to analyse critically the relationshipbetween theory and research. This chapter also aims to understand the validation behind theselection of paradigms and the research methods.3.2. The Research Philosophy and Need for Paradigm.The perception of the paradigm is essential to the research process for an extensive study inall areas. A paradigm is, ― a very general concept of the nature of scientific endeavour withinwhich a given enquiry is undertaken‖, Mangan et al. (2004, p. 566). In the early 1960‘s theconception of the paradigm was brought by Thomas Kuhn and this paradigm can becharacterize the ―people‘s value judgments, standards, norms, perspectives, frames ofreference, ideologies, myths, theories, and agreed measures that can govern their thinking andaction‖, Gummesson (2000, p. 18). However it is very important part in research method toselect the appropriate paradigm, it is also important in the process of selection of rightparadigm which supports the research questions being researched and basis on the available 33
  34. 34. resources Amaratunga et al. (2002). Deductive theory settings and inductive theory buildingare the two main approaches towards for the development of a theory, differentiate in theirhypothesis goals. In selection of the paradigms, the deductive approach supports theinterpretive science, while the inductive approach favours the positive paradigm Perry(1998).Positivism works with the formation of theory for data verification which will not likely tohelp on quantitative methods further to generate an assumption, however interpretive scienceapproach which generates an assumption of showing some individual experiences favoursmore of a qualitative method Amaratunga et al. ( 2002). Hence this approach showing morenaturalist in nature, it is understandable to know the different experiences among the peopleAmaratunga et al. (2002) and Arora and Stoner ( 2009). Abstract of the above would beindicating the inductive theory approach which helps positive paradigm likely to usequantitative methods for illustrating the information obtained, whereas the deductive theorywhich supports interpretive science helps more towards the naturalist approach and effort byusing qualitative technique of research.For the purpose of this research study, researcher will be obtain data both from respondentsfor the purpose of obtaining qualitative piece of this study and extensive study for thepurpose of quantitative part of this research. In additional interpretive science can be againclassify into critical theory, constructivism and realism. Critical theory and constructivism aresubjective in nature is diverse from the realism which is subjective and objective in natureand hence the paradigm that bear positivism and interpretivism Perry (1998) and Amaratungaet al. (2002). In order to study this cases given the complexity of paradigms, it is essentiallyto use the triangulation method in order to obtain the necessary information and has to sortout that information which is irrelevant to the study Perry(1998). For the purpose ofachieving aims of this research study the researcher should start this piece of work only after 34
  35. 35. the careful observation of epistemological and ontological values. Epistemology whichrelated with positivism and interpretivism is different to ontology which is related with theobjectivism and constructivism. Epistemological study will helps to give the perception ofunderstanding or give insight of knowledge can be accepted as suitable information, whileontology helps to obtain knowledge on the social entities Bryman and Bell (2007). Thesegives climb to the inductive and deductive approach theories.3.2.1 Inductive and Deductive theoryInductive and deductive method of study is useful for obtaining the logical interpretation forthe purpose of study the world around with different application of priniciples which helps toget an perceptive issue related to the subject area with use of Inductive and Deductive theoryWinclaw (2009) and both study can be understood and applied suitably, only if gainedthrough different experiences Bryman and Bell (2007). Inductive reasoning which means onereasons from particular examination from the generally accepted principles whereasdeductive reasoning is which observes from the general principles to the specificobservations. Even though both theories are related to each other and they are not superior toeach other and the use of both theories is helpful for the researcher to exchange the genuineexamination into impirically testable hypotheses, Wienclaw (2009). Deductive theory ofreasoning is used mainly for testing the existing principles with the help of organizedapproaches in search of the proof differentiated from the inductive theory where forecastingare not used to find out the conclusion but personal experiences of world are taken intoconsideration. Though both approaches need to be evaluate significantly before theirapplication in empirical research study Bryman and Bell (2007). Perry (1998) pointed out thatthe empirical research study should be based on the deductive and inductive theory approach 35
  36. 36. only, however the mixture of both will help the researcher to get an advantage from existingtheories as well not be able to generate new theories. Therefore it is significant to use of boththeories.3.3. Principle behind use of TriangulationHussey and Hussey (1997) cited in Mangan et al. (2004, pg 569) states that, ―the use ofdifferent research approaches, methods and techniques in the same study is known astriangulation and such triangulation can overcome the potential bias and sterility of singlemethod approaches.‖. According to Easterby et al. (1991) and Tashakkori and Teddlie (1998)recognized triangulation method in four different ways i.e, data, investigator, methodologicaltriangulation and finally triangulation theories. Naslund (2002) who supported the specifiedtheories mentioned above which needs to use the multiple theories who says that boththeories is needed for the focus of the advanced research and can develop from those theories.The use of triangulation method will helps the researcher in capitalizing the effectiveness forthe research method and helps to sort the ineffectiveness of any given method, Tashakkoriand Teddlie, 1998 and Byrman and Bell, 2007). Triangulation method which assist theresearcher for making convenient conclusions which helps to get a better thoughtful by usingmultiple methods in any situations (Johnson and Onwuegbuzie, 2004).Qualitative and quantitative method with the triangulation method is using by the researcherfor this research method. To achieve the effective triangulation method the researcher wouldbe using both of the methods in order to gain the objectives of the research and both of thismethod will enhance to filter related to the findings of the research. As per this theoryqualitative method would helps produce the theories and exploration by way of inductive 36
  37. 37. method and quantitative method will helps to explore the theory experiment and can obtainexplanations to explorations cited, Johnson and Onwuegbuzie (2004).3.4. Data Collection MethodsThe researcher is using qualitative and quantitative method of data collection to get a entireunderstanding to achieve the acknowledged objectives for this piece of research. Primary datawill helps the researcher to understand the objective of the research on a wide range ofperspective with the use questionnaire given to the students and helps to analyse the findingsof the research on a narrow point of view. Secondary data also using for this research studyget a vast knowledge in this field of study.The data collection method of this piece of research will be questionnaire. Questionnaire isparticularly used for survey that the person answering the questions actually recorded as therespondent information (Kervin, 1999). This research is aims to investigate about thebehaviour attitude of youth student consumers towards the carbonated soft drinks of CocaCola and Pepsi, hence questionnaire can collect information in a systematic way. Theselection of respondents will be the current students studying at the University of CentralLancashire. The Questionnaire were distributed to 80 to 100 youth students in the Universitymain campus. The age of the students will exactly fit with this research question which isyouth student consumers. After collecting all feedback from the respondents, the collectedquestionnaire will be analysed and interpreted to get the final result with the support ofsecondary data. (A copy of the questionnaire can be found in appendix I, p.87). 37
  38. 38. 3.4.1. Primary Sources of DataJankowicz (2000), Bryman and Bell (2007), states that, primary data is the collection of firstinformation or from the collection first hand information which enhance the researcher toidentify the key element or from direct sources. Primary data research plays an important rolefor attain the collection of information for this research. For this piece of research work theresearcher has to use also using the company‘s internal reports, annual reports and alsoconducting a questionnaire which is given to the University students in the main campus. a. Company Internal ReportsCompany internal reports have been using for the vital importance of understanding thechoosen area for the study of this research and reports related to the company has been usingand further reports related to the company will be included for the purpose of analysis of thisresearch. b. Sampling TechniqueThe sampling technique using here for this research study is Purposive sampling, Asindicated by Jankowicz (2000) purposive sampling techniques is mainly using to know theview which are important with the particular problem of study to address the issue in thespecified area. This will helps to study consumption of carbonated soft drink among theyouth consumers. To a broad view the researcher is using this method for explaining thepresumption out of the primary data. However in the case of secondary data the researcher isused the ―Quota sampling method‖ in depth for an understanding of various problem that 38
  39. 39. have been pointed out in various sources from the literature reviews conducted by theprevious researchers. The resources using for secondary data mainly journals and texts. Thereason for choosing this sampling method is to identify the overall understanding of views ofdifferent people and to get an overall understanding related to the issues related with thecarbonated soft drink market among the youth consumers. The population that makes up thepurposive sampling is the Youth students of University of Central Lancashire which suitswith this research to get an understanding of issues related to the subject area.3.5. Pilot Study and Pre testing questionnaireAs suggested by Bryman and Bell (2007) it is always helpful to conduct a pilot study orpretesting the questions before administering a self completion questionnaire. In factconducting of pilot study questionnaire cannot say that it ensures the questions operate wellhowever it will helps reduce the risk conducting a self completion questionnaire. Howeverthe main study is going to employ closed questions however open ended questions can beused to generate fixed choice of answers. It is essential for conducting a pilot study because ifeveryone who answers the questions reply in the same way doesn‘t meet the objectives of theresearch and resulting data will not helps to meet the objectives of the research which is anunfair. Hence pilot study will helps the researcher to identify the sufficiency of therespondents. However the problems arise while conducting the pilot study questionnaire willhelps to improve or to make better while designing a self completion questionnaire. Pilotstudy questionnaire will be given to 12 respondents in the same age group. Hence this studywill helps to prepare self administered questionnaire. 39
  40. 40. 3.5.1 Closed-ended and open ended QuestionnairesA questionnaire is a, ―reformulated written set of questions to which respondents record theiranswers, usually within rather closely defined alternatives‖, Sekaran (2003, p. 236). Meanwhile Dawson (2006) pointed out that quantitative data can be collected from thequestionnaire which was one of the important tools to confine the quantitative data and alsohelps to design it properly according to meet the objectives of the research. Howeverquestionnaire is having a benefit that it will helps the researcher to knowing exactly what isrequired to concentrate for measuring the variables. Personally administered questionnairewas again divided into open ended and closed ended questionnaires. While open endedquestions allows the respondents to answer the question according to their views, Sekaran(2003). Closed questionnaire will helps the researcher to code the data quickly and easilysubsequent for analysis.For the purpose of this research study the researcher is using mainly closed ended questions,however some open ended questions also added to collect a broad view of information amongthe respondents. As the researcher wants to find out the different views of respondents whileusing the carbonated soft drinks. Hence these issues related to the topic will helps to collectmore data while using some open ended questions. (A copy of the questionnaire can found inappendix I, p.87).3.6. Secondary Sources of DataThis research also using the secondary sources of data. Secondary data will helps to get anunderstanding about what previous researchers found related to the specified area of research. 40
  41. 41. This research is an academic piece of work which needs the help of secondary data tointroduce the key factors regarding the research area. The following material have been usingfor this section of research: a) Academic and Professional Journals – these include the collection of journals related to the chosen research topic and related to the industry, journals etc. b) Academic Text Books – these have been collected from the University library, public libraries and others sources. c) Websites – these include collecting information from the company websites related to the specified choosen area and other associated websites.3.7. Data AnalysisThe combination of primary and secondary data are using for this research study. Whileprimary data would include both qualitative and quantitative namely, questionnaire results,and company‘s internal reports etc. Secondary sources of data would include books,academic journals and appropriate website articles. As a process of data is being analysedwith different methods the researcher, has the responsibility to make an analysis strategy inorder to achieve at it best analysis of data. According to (Kleining, 1991) quantitative methodcan be successful when it is backed by the qualitative data which helps in analysing andinterpretation of the research study a lot in a comprehensive manner.3.7.1 Analysis StrategyAnalysis of collected data and explanations related to this having a major role in any of thepractical research. Hence it is essential to build up a clear strategy to be developed and 41
  42. 42. analysed in the starting stage itself. As part of any kind of research, the researcher should beconcluding with plenty of raw information which has to be analysed properly for the properunderstanding of the study. The researcher will get a proper insight and better understandingregarding the research study only when the appropriate method of analysis strategy is usedand analysed effectively, Amaratunga et al (2002).This research would apply the interactive model proposed by Miles and Huberman (1994).This would include the data reduction basically by the process of selection, focusing,simplification and abstraction of data. This would helps for the preparation of charts,diagrams, graphs and tables etc. Data reduction method will helps for illustrating theassumption and relevant analysis. The use of data reduction method will helps to investigateby giving relevant and quantitative data can be analyzed by way of display primarily, Curwinand Slater (2008). The above mentioned process will be again could get an advantage withuse of the make things easier for getting quantitative data before the final display as it helpsin simplifying the final data collected, Amaratunga et. al (2002).Therefore the researcher is going to use the data reduction method followed by display for thepurpose of the study. The primary data which consists of the questionnaire findings would befirst go through for the purpose collecting the data using data reduction method followed bygraphs, tables and other appropriate ways. Amaratunga et. al (2002) also suggested thatbefore collecting the major findings of the research it is to consider the patterns and modelsused in agreements and disagreement to get an outline findings of the research study. For thepurpose of this study the researcher would be collecting findings related to the impactbuilding customer loyalty and will be linked with the existing literature review collected fromthe previous researchers. As Bryman and Bell (2007) suggests that the beginning point of any 42
  43. 43. qualitative research for most business is next to the coding system. This process involving theclassification of the data that collected used for analysis.3.8. Period Covered by ResearchThis research was conducted between February to April, 2010. All the data will be collected,analysed and the findings will be summarised within this period of time limit.3.9. Ethical ConsiderationsAs suggested by Bryman and Bell (2007), it is very important to make sure that theconfidentiality of all collected data from the questionnaire. According to this research carefulconsideration will be given for maintain the confidentiality of records and anonymity ofaccounts because from the survey questionnaire lot of private information of individuals aretaken and recorded for the investigation of this research question. According to Academy ofManagement issues relating to confidentiality and anonymity should be negotiated andagreed with potential research participants. Hence during the part of this research, all datacollected only by way of questionnaire will be used only for the purpose of the study and notbeen handed over to any third parties. Once this dissertation has been marked thequestionnaires will be destroyed. 43
  44. 44. Chapter Four Questionnaire Result4.1. IntroductionThis chapter focused on the in depth analysis of the data collected from the respondents. Thepurpose of this chapter is to present the questionnaire results findings and analysis of the datawhich gathered from the respondents.4.2. ResultsThe closed ended and open ended questionnaire shown in (Appendix section I. Pg, 87, TableNo: 1) indicating the response rate of the youth students and their purchase influence andbehavior towards the Coca Cola and Pepsi. The questionnaire result also indicating theirbehavior or attitude towards other products as shown in charts and graphs as under.The response rate of students gathered from the questionnaire. Questionnaires weredistributed within in the University of Central Lancashire main campus. First of all thequestionnaire were distributed to 85 students in the campus of the University of CentralLancashire in the early of April, 2010. Totally 85 questionnaire result were collected and 80respondents information were validated and suits with the research. The age of the students inthe campus exactly fit with the research question which is Youth consumers. In total of 80respondents, 60 per cent of them are male while 40 per cent of them are female. Secondly 97per cent of the respondents were aged between 18-24 and the rest of the 3 per cent occupiedthe age above 24. From the questionnaire result it is indicated that the respondent informationwere collected from different nationalities. In which 50 per cent of respondents from Europe, 44
  45. 45. 30 per cent from Asia, 15 per cent from Africa and rest of the 5 per cent from America andAustralia.4.2.1 Market Division Popularity of Cola Brand 7% 12% 48% Coke Pepsi 33% Both of them Others Figure 1.1It is clearly indicated in Figure 1.1, among the popularity of Cola brand among the youthconsumers. From the above diagram it can be clearly point out that the Coca Cola is the mostfavourite brand among the Youth consumers from different nationalities which represents 48percent of the market Volume. However Pepsi represents with 33 percent of the marketvolume which indicating the increase of Youth Consumers towards Pepsi products orattracted to the brand. Even though 12 percent of the respondents indicated their attractiontowards both of the products (Coke and Pepsi). Furthermore 7 Percent of youth studentsindicated that they are attracted towards other products rather than Coke or Pepsi. 45
  46. 46. 4.2.2 Preference Choice of brand Describe the choice 100% 90% 80% 70% 60% 50% 40% Pepsi 30% Coke 20% 10% 0% Figure 1.2As can be seen from Figure 1.2, indicating that almost 80 percent of the Pepsi Youthconsumers or supporters pointed out that Pepsi represents young while only 20 percent ofCoca Cola consumers considered that it is young. However over 90 percent of Coca Colayouth consumers agreed that Coke is classical and 85 percent of Pepsi consumers also agreedthat it is a classical brand or product. It is significant to be mention that 88 percent of Cokeconsumers also pointed out that this brand is a traditional one which is a competitiveadvantage for Coca Cola Company and only 35 percent of the Pepsi consumers agreed that itis traditional for their preference of their Choice of this particular brand. From thequestionnaire result it is clearly indicating that Pepsi youth consumers considering that this 46
  47. 47. product is cool and fashion, with 80 percent and 65 percent respectively. However Cokeconsumers believed their brand is cool and fashion representing only a 15 percent and 25percent respectively. Finally from the questionnaire results it is to be stated that 60 percent ofCoke Youth consumers trusts that brand Coca Cola is the icon of happiness while only 20 percent of Pepsi consumers indicated their character of their cola brand.4.2.3 Buying Behaviour Spending on cola per week 8% Below £5 £5 - £10 32% Above 60% £10 Figure 1.3As can be seen from Figure 1.3, shows the spending capacity of youth students towards colaproducts tabulated from the respondents. From the result it is clearly indicating that 60percent of the respondents having a spending capacity under 5 pound on cola per week.While 32 percent of the people are spending usually between 5 pound to 10 pound per week.However 8 percent of the response rate shows that they spend above 10 pound per week for 47
  48. 48. cola products. Hence it can be assess that the buying behaviour of the Youth consumers ishigher according to the percentages shown in the above figure and the spending capacity ofthe low involved product of carbonated drinks are increasing among the youth consumers. Effectiveness of Advertisement 3% 2% 27% Very much A lot 68% Not at all Little Figure 1.4It is clearly indicated from the above Figure 1.4, that the influence of advertisement towardsthe consumers. As can be seen from the above figure, 68 percent of the respondents believedthat the brand or product is very much influenced them to buy the product. Mean while. 27percent of the respondents indicated that the advertisement are motivating them a lot to makea purchase decision of a product. However 3 percent of the respondents believed that theadvertising campaigns are not at all influenced them to buy the product and rest of the 2percent of the respondents pointed out that the advertisement giving only little influence tobuy a particular brand or a brand categories. From the overall survey results it is clearlyindicating that the brand or product is an icon for the company (Coke and Pepsi) are the base 48
  49. 49. for using the advertisements into more effective that motivates the consumers especiallyYouth, which is influenced to buy the particular product. Channel of Accessing the Advertisement 45% 45% 40% 33% 35% 30% 25% 20% 15% 10% 10% 4% 5% 3% 5% 0% Tv Internet Radio Magazine Poster Promotion Figure 1.5The accessibility of the advertising channels are presented in Figure 1.5, which states thatTelevision, Internet, Radio, Magazine, Poster and Promotions are the major advertisementsources that the respondents can easily accessible of the marketing campaigns of companies.More specifically 45 percent of the respondents from the questionnaire clearly pointed outthat television were the first channel which is giving priority to access the marketingcampaigns among the products of Coke and Pepsi. More significantly internet advertisementsare more effective over the past years. It is indicated that the 33 percent among therespondents accessing their second channel of preference to internet. In the mean timetraditional advertising channels such as radio, magazine, poster and promotion also plays a 49
  50. 50. considerable role to attract the consumers to buy a specific product. While radio which iscontributing 10 percent of attraction among the result tabulated from the respondents andmagazine, poster and promotion which representing 3 percent, 4 percent and 5 percentconsecutively. Hence from the above figure it is clearly indicating that the all theadvertisement channels plays an immense performance to attract the consumers especiallyyouth which motivates them to buy the product. Finally advertisements channels plays asignificant role in order to attain the long term performance of the business and thus toenhance and maintaining the customer loyalty.4.2.4 Loyalty on the BrandRefer to Appendix Section, Table No.1 for this question Encounter of Cola price increased 100% 7% 15% 90% 20% 80% 30% 70% 60% Buy it when price decreases 50% 40% 73% Buy cheaper one 30% 55% Still buy it 20% 10% 0% Encounter one 20 % higher Encounter Two 40% higher Figure 1.6 50
  51. 51. The questionnaire result for the above Figure 1.6, clearly shows the pattern of buyingbehaviour among the respondents while their favourite cola price increases. From the abovefigure it is clearly indicating their responses encountered when the cola price increases. Thefirst encounter is their favourite cola price is higher i.e., 20 percent recently compared toothers (One is 1 pound and the other one is 1.20 pounds). The second encounter is theirfavourite cola price is higher than others 40 percent (One is 1 pound and another one is 1.40pound). In the first encounter, 73 percent of the respondents believed that they would still buytheir favourite cola brand which indicates their attitude towards the brand or their habitualbehaviour. However 20 percent of the respondents i.e., the youth students indicated that theywould buy only the cheaper one which shows the decrease of 20 percent sales among theyouth consumers because of the importance of price differentiation among the products. Theother 7 percent of the respondents explained that they would buy only their favourite brand orproduct when price decreases. In distinction, the second encounter shows clearly a differentattitude or behaviour among the respondents. From the second encounter in the pricedifferentiation i.e., 40 percent higher than other product it shows that respondents buyingbehaviour to their favourite cola brand which represents only 55 percent while 30 percent ofthe respondents indicated that they will buy only the cheaper product and 15 percent of thetarget audience pointed out that they would buy only their favourite brand only when theprice decreases.Hence this similar questionnaire result indicated in Figure 1.6, twisted to understand thechanging minds, behavioural pattern, retention of product, customer loyalty among the youthconsumers while the price increasing. It can be say that once customer is loyal towards theproduct they will use to buy the same brand or product which is the main advantage gettingtowards the company. That is why the 73 percent and 55 percent among the respondents 51
  52. 52. indicated that they would buy the same product. However (Hart et al., 1999) indicated thatthe measurement of a perfect customer loyalty is uncertain or difficult. That is why therespondents answered that 20 percent and 30 percent of consumers will buy the cheaper onewhich shows the switching behaviour of their choice. Even though 22 percent of therespondents from both of the questions stated that they will buy only the product when theprice reduced which shows the important encounter with the price and affecting to thecustomer loyalty of a product. However it can say that the customer loyalty is alwaysuncertain due to the changing behavioural pattern or attitude among the consumers especiallyyouth. Reaction when favourite cola sold out 10% Buy other one 30% Go to another place to 20% find out Buy another brand of same flavour Buy nothing 40% Figure 1.7The third encounter which is addressed was the reaction when favourite brand of cola hadbeen sold out which can be found in Figure 1.7. There are 40 percent among the respondentsanswered that they would go to another place to find out the same brand of cola. However 30 52
  53. 53. percent of the response rate was they would buy the other brand of their cola instead of thesame one. However 20 percent of the respondents indicated that they will possibly buy thebrand of the same flavour and 10 percent among the respondents pointed out that they wouldbuy nothing if the particular choice of brand or product if not available.Hence it can be say that brand image plays an important role among the consumers in orderto maintain long term business performance of the company and thus enhance customerloyalty towards the product. It is clearly indicating that the majority of the customers whotrust in their own favourite product are based upon the existing attitude towards the brand atthe time of purchase. However consumers may be sometimes confused at the time ofpurchase because they are having lack of understanding about the differentiation of products.This is because of the competitive products are available in the markets. However it can besay that the repeat purchase behaviour among the consumers are even affect the situationalinfluences and marketing efforts to cause switching behaviour (Oliver, 1999, p. 34). Frequency of changing cola brand 30% 27% Frequently Rarely 43% Never Figure 1.8 53
  54. 54. As can be found in Figure 1.8, specified the frequency of changing cola brand among therespondents. From the result from the respondents, it is significantly shows that the frequencyof changing the brand or product among the specified age group of consumers is relativelyvery low. The questionnaire result shows that 30 percent among the consumers neverchanged their favourite brand. However 27 percent and 43 percent of the respondents pointedout that they used to change the product or brand frequently and rarely occasions. Fromabove figure it can be say that the frequency of changing the cola brand or product among theconsumers is uncertain. Hence Heskett et al. (1993) pointed out that repeat purchasebehaviour and retention among the consumers is not leading to attain the customer loyalty ordevotion, because of the uncertainty is still exists among the behaviour and attitude amongthe consumers. Reasons of changing cola brand No of Respondents 20 21 7 6 Qualities 2 Higher price Marketing mistaken Fashion icon Others Figure 1.9 54