Consumer Behaviour on Soft Drinks Market in India - A Case Study on Pepsi
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TERM PAPER
NAME OF THE STUDENT : PRIYANK AGARWAL
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TITLE : CONSUMER BEHAVIOUR ON SOFT
DRINKS MARKET IN INDIA – A
CASE STUDY ON PEPSI
TERM PAPER TO BE SUBMITTED IN PARTIAL FULFILMENT OF THE
REQUIREMENTS OF THE GRADUATE DEGREE
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INDEX
S.No CONTENTS Page No
1
1.1
1.2
1.3-1.4
2
2.1
2.1.1
2.1.2
2.1.3
2.1.4
2.1.5
2.1.6
2.2
2.2.1
2.2.2
2.2.3
2.3
2.3.1
2.3.2
Introduction
Overview
Industry Profile
Objectives and Scope
Literature Review
Common characteristics
Economic factors
Key Changes in the industry
Players in the industry
Raw materials used
Types of soft drinks
Distribution
Consumer Behaviour
Consumer and Customer
Application in marketing
Factors influencing Customer Behaviour
PepsiCo
Introduction
History in India
5-7
5-6
6
7
8-14
15
15
16
17
17
18
19
20
20
21
21
22-29
22
22
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1. INTRODUCTION
1.1 Overview
The beverage market is worth $55 billion worldwide. Today’s consumers are concerned with
overall health and wellness. As a result, there is significant impact on food and beverage
purchases. Many studies have shown that consumers are as concerned with good health as they
are about maintaining a high quality of life. The soft drink industry is training people to seek out
new products, even the big guys are coming out with limited edition flavors, and consumers are
beginning to see that there is more flavor activity going on in the category. Whether that really
nets anybody any sales gains is another thing, but it is teaching consumers to seek out and try
new products. It is also trying to create some excitement there. In spite of several challenges and
restrictions faced by this industry, it is a ‘roll’ like never before. Customer preferences may have
shifted, but they are still always on the lookout for a can of ‘coke’ or a new ‘flavoured’ drink to
quench their thirst.
The size of the Indian food processing industry is around $ 65.6 billion, including $20.6 billion
of value added products. Of this, the health beverage industry is valued at $230 million (The
Great Indian Bazaar). A health aware nation and a rising interest in maintaining and improving
human life are just a few reasons why fruit and vegetable demand has risen. Campaigns such as
"5 A Day" promoted by the World Health Organization (WHO) encourage people to consume
five fruits or vegetables per day. The food industry has responded to this demand by developing
fresh and nutritional products with conservation techniques that extend the shelf life of the
product. [1] Recent studies have shown that consumers from the developing countries spend
almost 40% of their income on food and beverages. On the other hand consumers in developed
countries allocate only about one quarter of their income on these goods [2].The three largest
consumed categories of packaged foods are packed tea, biscuits and soft drinks. The total soft
drink (carbonated beverages and juices) market is estimated at 284 million crates a year or $1
billion (The Great Indian Bazaar). The market is highly seasonal in nature with consumption
varying from 25 million crates per month during peak season to 15 million during off-season.
The market is predominantly urban with 25 per cent contribution from rural areas.
Coca cola and Pepsi dominate the Indian soft drinks market. The market had grown over the
years to become the third largest consumer of beverages after the US and China. In India, Coke
and Pepsi have a combined market share of around 95% directly or through franchisees. Campa
Cola has a 1% share, and the rest is divided among local players.
Industry watchers say, fake products also account for a good share of the balance. The total
production of soft drinks in India is about 900 crore bottles in a year, including both aerated and
carbonated soft drinks. The per capita consumption per year is just 4 bottles which is low as
compared to other developing countries, Pakistan-13, Bangladesh-8 and Egypt-3. It is
comparatively very low to the consumption in USA which is a humungous 350. The fact that the
per capita consumption of soft drinks in India remained among the lowest in the world adds to
the high growth potential of the market.
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Since the 1990s the market had witnessed many price, distribution, and advertising wars between
the two cola giants as they fought hard to corner a bigger share of the market. The companies
also had to face allegations in 2004 and 2006 that their soft drinks contained high pesticides
levels. With the controversy behind it, both the companies were aggressively working toward
increasing their market share in India. There are about 110 soft drink producing units (60% being
owned by Indian bottlers) in the country, employing about 125,000 people. There are two
distinct segments of the market, cola and non-cola drinks. The cola segment claims a share of
62%, while the non-cola segment includes soda, clear lime, cloudy lime and drinks with orange
and mango flavors
1.2 Industry Profile
Indian Market of soft drinks has witnessed a radical change in the last few years, after the exit of
coke in 1977, Parle and Pure drinks controlled the soft drinks market. Parle introduced Thumbs
Up in the beginning of 1980s. Indian market is segmented on the basis of types of products into
cola products and non-cola products. Cola products account for nearly 61-62% of the total soft
drinks market and Non-cola products constitute about 36% Gold Spot was considered as the first
soft drink which was established 50 years ago before Coca-Cola entered the company to
dominate the industry. It faced no competition and the elated position image built up in western
countries helped it get ready customers, clients and instant glamour. Parle export private ltd.
should be regarded as the first Indian company that introduced Limca, a lemon drink
complimentary to their well established Gold Spot in 1970 which got moderate success.
However, before this, it had also introduced Cola-Pepino which was withdrawn in face tough
competition from Coca-cola. Coca-Cola serves in India some of the most recalled brands across
the world which includes names such as Coca-Cola, Diet Coke, Sprite, Fanta, along with the
Schweppes product range. The acquisition of Thumbs Up brought some of the leading national
soft drinks like Thumbs Up, Gold Spot, Limca, Maaza, and Citra under its umbrella. After this,
Kinley mineral water was also added and launched in the year 2000. The brands that fall in the
Cola category are Pepsi, Coca- Cola, Thumbs Up, diet coke, Diet Pepsi etc. Non-cola segment
can be divided into 4 categories based on the types of flavors available, namely: Orange, Cloudy
Lime, Clear Lime and Mango.
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1.3 Objectives
The objective of this project is to study-:
To get an in depth knowledge about the Indian Soft drinks and beverages industry.
To analyze the detrimental effects on the health of the consumers
To understand the consumer behavior of the people
To understand the strategies and the marketing mix of PepsiCo
SWOT analysis of PepsiCo
1.4 Scope of study
Finding the important factors which relate to consumer behavior on soft drinks. Various
factors like taste, flavor, media, packaging and quantity, price, brand name etc and their
relation.
Finding out which age group prefers or consumes more of soft drinks and the places
where they consume it.
Finding about the male and female consumption and comparison thereon.
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2. LITERATURE REVIEW
A literature review is an analysis of existing research which is relevant to a particular field or
topic. It explains and justifies how your investigation may help answer some of the questions or
gaps in this area of research. A literature review is not a straightforward summary and it is not a
chronological description of what was discovered in your field.
Importance of writing a literature review
New discoveries don't materialize out of nowhere they build upon the findings of previous
experiments and investigations. A literature review shows how the investigation you are
conducting fits with what has gone before and puts it into context. A literature review gives an
overview of the field of inquiry.
A literature review demonstrates to your reader that you are able to:
Understand and critically analyze the background research
Select and source the information that is necessary to develop a context for your research
Shows how your investigation relates to previous research
Reveals the contribution that your investigation makes to this field (fills a gap, or builds
on existing research, for instance)
Provides evidence that may help explain your findings later.
2.1 For the purpose of this study articles from various journals and by varied authors have been
reviewed.
1. A Global Vision: Leading PepsiCo's Learning Evolution.
Author: SIPEK, SARAH editor@CLOmedia.com
Source: Chief Learning Officer. Mar2015, Vol. 14 Issue 3, p22-25. 4p. 2 Color Photographs.
The article features Leslie Teichgraeber, vice president of food and beverage corporation
PepsiCo’s global learning and development strategy, PepsiCo University. Topics discussed
include her role in the human resources department at PepsiCo Inc., her responsibilities which
include implementing global leadership programs to educate employees, and how she will help
solve the challenge faced by PepsiCo in dealing with the changing consumer market.
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2. PepsiCo uses data-driven education approach.
Author: KOSTER, KATHLEEN
Source: Employee Benefit News. Sep2013, Vol. 27 Issue 12, p22-24. 3p
The article focuses on the data-driven education approach utilized by beverage
manufacturer, PepsiCo, in helping employees in the U.S. with their retirement plan and benefits.
Chad Ryan, director of retirement plans for PepsiCo, describes the company's defined
contribution 401(k) plan, defined benefit pension plan, retiree medical plan, and non-qualified
deferred compensation plans. Ryan also explains the importance of offering a competitive set of
retirement planning benefits.
3. Empowering employees to social ambassadors at Pepsi Co.
Authors: McIntosh, Sharon
Source: Strategic Communication Management. May/Jun2012, Vol. 16 Issue 5, p26-29. 4p.
The article presents a case study which discusses PepsiCo Inc.'s best-practice employee
advocacy program that used social networks. It is reported that the company believes that by
empowering employees through social media, they can further communicate our messages on
environmental sustainability and our portfolio of healthier foods and beverages.
4."We didn't want to totally break the law": Industrial Legality, the Pepsi Strike, and Workers'
Collective Rights in Canada.
Author: Smith, Charles W.
Source: Labour / Le Travail. Fall2014, Vol. 74, p89-121. 33p. 4 Black and White Photographs
Canada’s system of industrial legality has routinely limited the collective abilities of workers to
strike. Under the conditions of neoliberal globalization, those limitations have intensified. Yet, in
1997, the Retail, Wholesale and Department Store Union (RWDSU) in Saskatoon,
Saskatchewan, waged a successful strike against Pepsi-Cola Canada. In addition to defeating the
company, the union also expanded workers’ collective rights through a successful constitutional
challenge to restrictive common-law rules limiting secondary picketing. This paper examines the
history of that strike, exploring the multifaceted strategies that the workers undertook to
challenge the company, the state, and the existing law. It argues that workers were successful
because they utilized tactics of civil disobedience to defend their abilities to picket. Recognizing
that success, the paper is also critical of the Supreme Court of Canada’s decision and its
evolution of common-law torts to limit workers’ collective action. The paper concludes by
arguing that the Pepsi conflict highlights the importance of civil disobedience in building
workers’ movements while emphasizing the inherent limitations of constitutional challenges to
further workers’ collective freedoms in Canada.
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5. Pepsi’s 'Painful Marriage' in Sichuan.
Author: Liu, Shengjun1 lgary@ceibs.edu
Source: Asian Case Research Journal. Dec2006, Vol. 10 Issue 2, p281-302. 22p. 1 Map, 1
Cartoon or Caricature.
Pepsi had been competing strongly against Coke throughout the world. In 1993, to gain an upper
hand in a new market, Pepsi established a bottling plant in cooperation with the local government
in Sichuan, an inland province of China. Sichuan Pepsi's business was a big success. The
troubles, however, soon started. Sichuan Pepsi refused to follow the policy of allocating separate
sales areas for each bottler. It compelled Pepsi China to reduce the price of the concentrate and
was eager to produce beverages with new brands to compete with Pepsi. Investigations showed
that the management of Sichuan Pepsi took many actions which went against its agreement with
Pepsi. The company had transformed from a state-owned enterprise to a company controlled by
individuals who formed the top management of Sichuan Pepsi. Both the local government and
Pepsi China had lost control of this new cooperative. This case illustrates a special kind of risk in
joint ventures in transitional economies: the privatization of the local enterprise partner through
some form of management buyout. This risk is further complicated by the changing relationship
between the government and enterprises in China, the guanxi-dominated institutional
environment and continuous economic reform characterized by 'crossing the river by feeling
each stone' which refers to Deng Xiaoping's policy of moving ahead with economic reforms
slowly and pragmatically. In order to succeed in such an environment, a firm must be prepared to
face the 'crouching tiger, hidden dragon'.
6. The Influence of Brand Association on Customer Preference: A Study on Branded Carbonated
Soft Drinks.
Author: Elangeswaran, Sajiththa sajiththa03@gmail.com
Ragel, V. R. victoriaragel@yahoo.co.uk
Source: IUP Journal of Brand Management. Jun2014, Vol. 11 Issue 2, p39-54. 17p.
Divisional Secretatriat Area, Batticaloa in Sri Lanka. Brand Association consists of three
dimensions: Brand Image, Brand Attitude and Perceived Quality. While three variables
individually have higher level of Brand Association, the Pearson's correlation analysis explores a
strong positively significant relationship between dimensions and variables. The findings of the
study indicate that brand association influences the customers' preference of carbonated soft
drinks.
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7. Advertising Soft Drinks to Children: Are Voluntary Restrictions Effective?
Author: Berning, Joshua1McCullough, Michael2
Source: Agribusiness. Autumn2013, Vol. 29 Issue 4, p469-485. 17p.
Using nonlinear time series models, the authors explore the effects of an industry-led initiative to
have firms voluntarily restrict television advertising of carbonated soft drinks to children. They
find that the market leader reduces its advertising to both adults and children and the second
largest firm reduces advertising to adults. Advertising by a nonparticipating firm, however,
increased for adults following the ban. The results emphasize the potential benefits and difficulty
of coordinating cooperative behavior in this type of industry. Such policy strategies may be more
effective directed at industries and not at individual firms.
8. Measurement and tracking of brand equity in the global marketplace - The PepsiCo
experience.
Author: Paulette Kish
Dwight R. Riskey
Roger A. Kerin
Source: International Marketing Review. 2001, Vol. 18 Issue 1, p91. 6p. 2 Diagrams.
The conceptualization and measurement of brand equity, including its sources and outcomes, are
a challenging task, particularly in a global marketplace. This paper briefly describes how
PepsiCo, Inc. conceptualizes and measures brand equity across brands, countries, and over time.
Special attention is given to the Equitrak TM brand equity model developed by PepsiCo, Inc. and
the global brand equity tracking methodology employed by the company in 14 countries. The
paper concludes with managerial insights obtained from this effort. Marketing practitioners and
academics alike regard brand equity as a platform upon which to build a competitive advantage,
future earnings streams, and shareholder wealth (Keller, 1998; Kerin and Sethuraman, 1998).
Nevertheless, the conceptualization and measurement of brand equity, including its sources and
outcomes, remain a challenge. Two key managerial questions must be answered with respect to
conceptualization and measurement.
9. Point-of-Purchase Price and Education Intervention to Reduce Consumption of Sugary Soft
Drinks.
Author: Block, Jason P.
Chandra, Amitabh
McManus, Katherine D.
Willett, Walter C.
Source: American Journal of Public Health. Aug2010, Vol. 100 Issue 8, p1427-1433. 7p. 1
Chart, 3 Graphs.
We investigated whether a price increase on regular (sugary) soft drinks and an educational
intervention would reduce their sales. We implemented a 5-phase intervention at the Brigham
and Women's Hospital cafeteria in Boston, Massachusetts. After posting existing prices of
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regular and diet soft drinks and water during baseline, we imposed several interventions in
series: a price increase of 35% on regular soft drinks, a reversion to baseline prices (washout), an
educational campaign, and a combination price and educational period. We collected data from a
comparison site, Beth Israel Deaconess Hospital, also in Boston, for the final 3 phases. Sales of
regular soft drinks declined by 26% during the price increase phase. This reduction in sales
persisted throughout the study period, with an additional decline of 18% during the combination
phase compared with the washout period. Education had no independent effect on sales. Analysis
of the comparison site showed no change in regular soft drink sales during the study period. A
price increase may be an effective policy mechanism to decrease sales of regular soda. Further
multisite studies in varied populations are warranted to confirm these results.
10. PepsiCo doesn't score with iPhone application
Author: Jacques, Amy
Source: Public Relations Tactics. Nov2009, Vol. 16 Issue 11, p4-4. 1/6p.
On Oct. 22, PepsiCo finally pulled the greatly buzzed about iPhone app for Amp energy drink
that provided tips on how men could "score" with women. The app, called "Amp Up lie for You
Score." featured pick-up hens to woo 24 different types of women from the "foreign exchange
student" to "the sorority girl" to the "nerd." A week after the app launched on Oct. 12, consumers
began criticizing it for stereotyping females, and complaints saturated Twitter feeds and blogs.
At this time, PepsiCo did not remove the app, but did post an apology on its Amp Twitter page
indicating that the app was trying to display the "humorous" things that men will do to pick up
women. The tweet reads: "Our app tried 2 shows the humorous lengths guys go 2 pickup women.
We apologize if it's in bad taste & appreciate your feedback." PepsiCo also started a hashtag
(#pepsifail) that it included with the apology post, indicating that the company acted wrongly.
11. Young consumers' views of infused soft drinks innovation.
Authors: Tong, David Yoon Kin
Tong, Xue Fa
Yin, Evon
Source: Young Consumers. 2012, Vol. 13 Issue 4, p392-406. 15p.
This study has two aims: first, to develop a conceptual model for infused drinks innovation using
the subjective norm and lifestyle as predictors; and second, to adapt the beverage science
experimental variables and assess young consumers' experience of the taste, mood and health of
infused drinks using the moderated mediation method. Design/methodology/approach – Using
quota sampling, the data were collected from three faculties in a private university. The
conceptual model was developed using structural equation modelling (SEM). The model was
validated by the first- and second-order confirmatory factor analysis (CFA) of SEM. The multi-
dimensional variables of the taste, mood and health of the infused drinks were computed by the
moderated mediation process and the final mediation effects were confirmed using Aroian tests.
Findings – The subjective norm and lifestyle variables predict innovation in infused soft drinks.
The results from the moderated mediation analyses indicate that both male and female young
consumers prefer the innovation of drinks to suit local tastes and be produced locally; the drinks
should also have health and well-being benefits. Research limitations/implications – The sample
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size of 350 students was sufficient but the generalisability of the result was limited by the
students being recruited from one university. Practical implications – Parents may influence their
children to change their favourite drinks if they are expensive. For this reason, the pricing
strategy is important to price-sensitive consumers. Offering favourite infused drinks to friends is
often part of the lifestyle in Malaysia. In practice, implied recommendation is possible. If this
happens, there is the likelihood that it may be communicated through the social network.
Marketers should use this platform for promoting new drinks. Beverage innovators should learn
from the local popular infused drinks as the baseline for drinks innovation and should innovate to
suit local tastes. In particular, beverage manufacturers should consider satisfying the market
segmentations for flavour lovers and health seekers. Lastly, for effective soft drinks advertising,
it is recommended that beverage marketers should use trendy components in promotions.
Originality/value – The study highlights the possibility of conducting social research by
incorporating variables from experimental studies. By using this method, external validation is
possible when the measures are applied in an uncontrived setting. In addition, it could provide a
better assessment of consumers' needs for product innovation.
12. Pepsi plays safe with Tropicana
Author: Arshdeep Sehgal & Chaitali Chakravarty, TNN Aug 15, 2003, 12.39am IST
Source: http://articles.economictimes.indiatimes.com/2003-08-15/news/27563262_1_tropicana-
pepsi-juice-brand
NEW DELHI: After the soft drink industry was caught on the wrong foot with pesticides
residues in its bottles, Pepsi is no more taking chances.
It has tightened vigilance on Tropicana, its juice brand, which is expected to make maiden profits
this year. If sources are to be believed, Pepsi wants to be doubly sure of its purity and hence
conducting regular checks.
More so, as Pepsi chairman Rajeev Bakshi recently said, "After bottled water was dragged into a
controversy early this year, we knew that soft drink would be the next target."
Sources said that Pepsi knows it has to be extremely careful about Tropicana. It recently
positioned Tropicana on the health platform. A nutritionist from the US especially flew down to
India to explain to the consumers the benefits of drinking the juice .At this stage, it cannot be
complacent about Tropicana which is a growing category within the Pepsi fold, said sources.
The Tropicana brand is registering double digit growth rates of 15-20% annually and after the
recent repackaging and fortification initiatives, the company expects volumes to grow at a faster
rate.
Pepsi has also changed the packaging of Tropicana from baseline to slim line, fortified the juices
with calcium and other essential nutrients.
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Tropicana has 40% share of the packaged fruit juice market. "According to industry estimates,
the packaged fruit juice market in India is now about Rs 120 crore. The two main players in the
industry are Real and Tropicana.
13. Currency Swings Help Push Down PepsiCo Earnings by 24%
Author: STEPHANIE STROMFEB. 11, 2015
Source: http://www.nytimes.com/2015/02/12/business/pepsi-q4-earnings-
fall.html?ref=topics&_r=0
PepsiCo, the beverage and snack giant, said on Wednesday that its quarterly earnings fell 24
percent, putting it in the ranks of companies whose finances were dented by currency swings at
the end of last year. Sales declined slightly to $19.95 billion in the quarter that ended Dec. 27,
from $20.12 billion in the year-ago period, the company said, and earnings dropped to $1.3
billion. Adjusting for currency swings, restructuring costs and other extraordinary
charges, PepsiCo’s income was $1.6 billion.
Indra Nooyi, chief executive of PepsiCo, said 2014 “was a tough year” because of volatility in
the currency markets, unrest in Russia and falling gas prices that no one anticipated. “The market
was quite volatile, and as the year went on, we got to the second half of the year, we started to
really experience all the volatility.”The company’s shares rose more than 2 percent to close at
$100.40. “I think there were fears built in about Russia, Venezuela and the currency issue in
general,” said Ali Dibadj, an investment analyst at Sanford C. Bernstein & Company. “But they
seemed to deliver relatively unscathed by those things and other issues.”On Tuesday, Pepsi’s
rival Coca-Cola reported sharply lower earnings as currency fluctuations and various
restructuring charges took their toll. Once analysts adjusted for those extraordinary factors,
however, Coke’s stock also rose. Both companies face a more fundamental challenge, namely,
that consumers are drinking less sugary soda. PepsiCo has Frito-Lay and Quaker to cushion it
from that trend, and Frito-Lay by far accounted for the largest share of Pepsi’s operating profits.
Pepsi and Coke have vast portfolios of beverage brands and have worked to attract consumers to
the teas, waters and juices they sell, which may account for the slight uptick in their sales in the
United States last year. For the year, PepsiCo’s were flat at $66.6 billion, and profits were $6.5
billion, compared to $6.7 billion in 2013. The company said it would spend as much as $9 billion
on higher dividends and share buybacks.
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2.1 Common Characteristics of the Industry
The non-alcoholic side of the Beverage Industry is overwhelmed by a couple of sizeable players
and rivalry around them is regularly compelling. Changing customer tastes adds to working lack
of determination. Evaluating and edges often feel obligated. Additionally, unpredictable thing
expenses will challenge administrations to ensure benefit. Great working effectiveness and
expense control hones, generally on a progressing support, are significant. Outstandingly, the
organizations fare thee well to fence crude material (e.g., aluminum and carbon dioxide) buys.
Slips in perusing the patterns of fixing costs can have a measurable negative effect on income.
We find that refreshment creators with the most secured brands prepare the greatest working and
net wage edges.
2.1.1 Economic Factors in the Industry
Business sector size, development rate and by and large gainfulness are three financial markers
that could be utilized to assess the soda business. The business size of this industry has been
evolving. Soda utilization has a piece of the pie of 46.8% inside the non-jazzed up beverage
industry, obviously, the soda business is lucrative with a potential for high benefits, however
there are some snags to overcome so as to catch the business share. The development rate has
been as of late reprimanded because of the U.S. market immersion of sodas. The change is
ascribed to the next developing areas of the non-alcoholic industry including tea and espresso
(11.8%) and packaged water (9.3%). Games beverages and caffeinated beverages are
additionally anticipated that will expand in development as contenders begin embracing new
product offerings. In light of this, soda pioneers are securing themselves in elective markets, for
example, the nibble, sugary treats, packaged water, and games drinks businesses. In place for
soda organizations to keep on growing and increment benefits they will enhance their item
offerings. The geographic extent of the intense competition demonstrates a percentage of the
budgetary characteristics found in the soda business. Three significant players command -the
segment… Coca-Cola is ruler of the soda pop realm and brags a worldwide piece of the pie of
around half, emulated by Pepsico at about 21%, and Cadbury Schweppes at 7%. Aside from
these real players, littler organizations, for example, Cott Corporation and National Beverage
Company make up the remaining piece of the pie. Every one of the five of these organizations
make a part of their benefits outside of the United States.[3]
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2.1.2 Key Changes in the Industry
The soda business is influenced by macro natural components of the industry that will prompt
change. To begin with, the entry/exit of real firms is a pattern in the industry that will probably
prompt change. All the more particularly, merger and merging has been common in the soda
pops business sector, bringing about a few firms to passageway the industry and after that re-
enter themselves. Some heading organizations have been looking to drive income development
and enhance piece of the pie through the expanded economies of scale found through mergers
and acquisitions. One particular sample is the way PepsiCo obtained Quaker Oats, who
purchased Gatorade which will help grow PepsiCo’s caffeinated beverage division. This pattern
has expanded rivalry as firms' broadening of items is expanding.
A second pattern in the macro environment is globalization. With the developing utilization of
the web and other electronic advances, worldwide correspondence is quickly expanding. This is
permitting firms to work together inside the nation showcase and venture into world markets. It
has driven rivalry significantly as organizations strive to be first-movers. Particularly, the
worldwide soda pop market's compound twelve-month development rate (CAGR) is relied upon
to grow to 3.6% from 2004 to 2009.
Third, changing societal concerns, disposition, and lifestyles are essential patterns. In the United
States and Europe, individuals are getting to be more concerned with a solid lifestyle .Consumer
attentiveness to health issues emerging from weight and idle lifestyles speak to a genuine danger
to the carbonated beverages sector. The pattern is bringing on the industry's business
surroundings to change, as firms are separating their items with a specific end goal to build deals
in a stagnant business. In this manner, the long haul industry development rate, the fourth
pattern, shows low development lately. Since 2000, the CAGR is 1.5 for every penny. The low
development rates are of concern for soda organizations, and some are making new techniques to
battle the low rates. This prompts the fifth pattern of developing purchaser inclination for
separated items. Since soda pops have been around since as unanticipated as 1798 [4], purchasers
need advancement with the items they purchase. In today's globalizing social order, being plain
is bad enough. In this way, the last pattern, item advancement, is important to battle purchasers
need for an assortment of tastes. Firms are already differentiating by taste, with the Coca-Cola
Company as an example. The firm‘s product line includes regular Coca-Cola, Diet Coke, Diet
cherry Coke, 11 cherry Coke Vanilla Coke, Coca-Cola with Lime, Coca-Cola with lemon and
many more. It has also introduced the Coke Zero in India for health freaks.
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2.1.3 Players in the soft drinks market
Besides the obvious top two global companies, Coca-Cola and PepsiCo, all of the remaining top
10 players in terms of value sales come from developed markets, with the exception of Tingyi
Holdings Corp. Tingyi, which does business almost exclusively in China, ranked eighth in 2011
with a global off-trade value share of 1.9%.
2.1.4 Raw Materials used in Soft Drinks
There are different types of raw materials used in different soft drinks. Most of the raw materials
are as under:
1. Water: The simple sweetened soft drink contains about 90% of water, while in diet drinks; it
contains 95% of water.
2. Flavour: Flavour is of great importance in soft drink. Even water from different places has
different taste. The flavour for taste added can be natural or artificial, acidic, caffeine.
3. Artificial Flavour: These are the flavours manufactured from natural extracts; this is used to
give greater choice, in taste to consumers.
4. Acids: Acids like citric acid & phosphoric acid are added to give refreshing tartness or bite &
help in preserving the quality of a drink.
5. Natural Flavors: These are the flavors, which are extracted from fruits, vegetables, nuts, barks,
leaves etc. in soft drink containing natural flavors & fruit juice
6. Caffeine: Caffeine has special kind of taste makes the taste of soft drink a royal one. Caffeine
was added to soft drink from its introduction to a commercial market but now caffeine free soft
drinks are also available. Its quality is ¼ than compared with same amount of coffee.
7. Carbon Dioxide: Carbon Dioxide is a colorless & smell less gas, which is added to cold drink
to get bubble & it also help in keeping drink strong & fresh
8. Colour: Along with taste of soft drink is also of very important, the company tries to maintain
both taste & colour of the soft drink everywhere in the world.
9. Sugar: Sugar syrup is added to the drink at around 75 degree C to the pure drinking water, this
is to make soft drink taste sweet. Even artificial sweetness is also used.
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2.1.5 Types of soft drinks
Glass bottles
Aluminum cans
PET bottles for home consumption
Non-alcoholic soft drink beverage market can be divided two types
a) Fruit drinks
b) Soft drinks.
Soft drinks can be further divided two types
a) Carbonated: Cola, Lemon, Orange
b) Non-carbonated drinks: Mango drinks
The market can also be segmented on the basis of types of products
a) Cola products: Cola products account for nearly 61-62% of the total soft drinks market.
The brands that fall in this category are
Pepsi Coca- Cola
Thumps Up
Diet coke
Diet Pepsi etc
b) Non cola: Non-cola segment which constitutes 36% can be divided types of flavors
available
Orange
Cloudy Lime
Clear Lime
Mango
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2.1.6 Distributions of Soft Drinks
The soft drinks can be distributed on the basis of two concepts.
1. Distribution according to taste: The soft drinks can be distributed in Cola & non – cola taste.
Non cola taste consist of drink of orange, lime, mango etc. & lime taste can further divided in to
cloudy lime & clear lime.
Orange taste market is occupied by brands like Fanta, Mirinda Orange & Crush. Mango taste
market occupied by brands like Slice, Maaza, and Mangola. Cloudy lime taste is occupied by
brands like Limca, Mirinda Lime etc.Clear lime taste is occupied by 7 UP, Sprite, Canada Dry
etc. This is basically produced in green bottle as sunlight spoils the taste of the drinks; its colour
is transparent like water.
2. Distribution according to the consumption: 80% of soft drinks are consumed on the spot,
where it is sold at place like cinemas, railway stations etc. Other 20% of the market of soft drink
is consumed at home or other places which is sold mostly via Retail outlets and Shopping malls.
Distribution system used by the companies in rural and urban areas
Centralized distribution system used by the companies in the urban areas is not suitable
for rural areas.In the centralized distribution system, the product was transported directly
from the bottling plants to retailers.
In Hub and spoke distribution system the stock was transported from the bottling plants
to hubs and then from hubs, the stock was transported to spokes which were situated in
small towns These spokes fed the retailers catering to the demand in rural areas. Used
large trucks for transporting stock from bottling plants to hubs.Medium commercial
vehicles transported the stock from the hubs to spokes .From spokes to village retailers
the company utilized auto rickshaws and cycles.
Distribution Challenges
In international markets, soft drink companies face a number of distribution challenges,
In many of the emerging country markets such as India, China, and Indonesia. For
example, poor road conditions and other infrastructure problems render efficient
distribution by trucks very difficult.
Physical distribution
Supplies
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2.2 Consumer Behavior
Consumer behavior refers to “the mental and emotional processes and the observable behavior of
consumers during searching for, purchasing and post consumption of a product or service.”. How
consumers make decisions to spend their available resources such as money, time and effort on
consumption and use-related items is the subject of consumer behavior study. Consumer
behavior has two aspects: the final purchase activity which is visible to us and the decision
process which may involve the interplay of a number of complex variables not visible to us. In
fact, purchase behavior is the end result of a long process of consumer decision-making. The
study involves what consumer’s buy, why they buy it, how they buy it, when they buy it, where
they buy it, how frequently they buy it and how they dispose of the product after use. For
example, consider the product computer, a relatively new but big business in our country. A
study of consumer behavior in this area would investigate what kinds of consumers buy it or
would buy for home and personal use? What features do they look for? What benefits do they
seek including post purchase service? How much are they willing to pay? How many are likely
to buy now? Do they wait for prices to come down? Do they look for some freebies. The answers
to these can be investigated through consumer research and provide manufacturers with
important data and insight for determining computer features and promotional strategy etc.
2.2.1 Consumer and Customer
A consumer is anyone who typically engages in any one or all of the activities mentioned in the
definition. Traditionally, consumers have been defined very strictly in terms of economic goods
and services wherein a monetary exchange is involved. This concept, over a period of time, has
been broadened. Some scholars also include goods and services where a monetary transaction is
not involved and thus the users of the services of voluntary organisations are also thought of as
consumers. This means that organisations such as UNICEF, CRY, or political groups can view
their public as “consumers.” The term consumer is used for both personal consumers and
organisational consumers and represents two different kinds of consuming entities. The personal
consumer buys goods and services for her or his personal use (such as cigarettes or haircut), or
for household consumption (such as sugar, furniture, telephone service etc.), or for just one
member of the family (such as a pair of shoes for the son), or a birthday present for a friend
(such as a pen set). In all these instances, the goods are bought for final use, referred as “end
users’ or “ultimate consumers.” The other category of consumer is the organisational consumer,
which includes profit arid not-for-profit organisations. Government agencies and institutions
(such as local or state government, schools, hospitals etc.) buy products, equipment and services
required for running these organisations. Manufacturing firms buy raw materials to produce and
sell their own goods. They buy advertising services to communicate with their customers.
Similarly, advertising service companies buy equipment to provide services they sell.
Government agencies buy office products needed for everyday operations. The focus of this
book is on studying behaviours of individual consumers, groups and organisations who buy
products, services, ideas, or experiences etc. for personal, household, or organisational use to
satisfy their needs. Anyone who regularly makes purchases from a store or a company is termed
as “customer” of that store or the company.
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2.2.2Applications on Marketing of Consumer Behaviour
Consumer behaviour principles are applied in many areas of marketing as discussed below:
Selecting target market: A review of market opportunities often helps in identifying distinct
consumer segments with very distinct and unique wants and needs. Identifying these groups,
learning how they behave and how they make purchase decisions enables the marketer to design
and market products or services particularly suited to their wants and needs. For example,
consumer studies revealed that many existing and potential shampoo users did not want to buy
shampoo packs priced at Rs. 60 or more and would rather prefer a low-priced sachet containing
enough quantity for one or two washes. This finding led companies to introduce the shampoo
sachet, which became a good seller. In case of consumer durables market in India marketers are
targeting the higher income class with special features in the equipments as well as longer
warranty period and of course world class quality. In case of semi urban and rural areas
consumers who prefer the basic offerings or slightly modern version of the product are targeted.
Analysing market opportunity: Consumer behaviour study helps in identifying the unfulfilled
needs and wants of consumers. This requires examining the trends and conditions operating in
the marketplace, consumers’ lifestyles, income levels and emerging influences. This may reveal
unsatisfied 21 needs and wants. The trend towards increasing number of dual income households
and greater emphasis on convenience and leisure have led to emerging needs for household
gadgets such as washing machine, mixer grinder, vacuum cleaner and childcare centres etc.
Mosquito repellents have been marketed in response to a genuine and unfulfilled consumer need.
2.2.3 Factors influencing consumer behaviour
Social factors: are among the factors influencing consumer behavior significantly. They fall into
three categories: reference groups, family and social roles and statussocial factors.
Psychological factors: Among the factors influencing consumer behavior, psychological factors
can be divided into 4 categories: motivation, perception, learning as well as beliefs and attitudes
Cultural factors: are coming from the different components related to culture or cultural
environment from which the consumer belongs Culture and societal environment. Culture is
crucial when it comes to understanding the needs and behaviors of an individual. Throughout his
existence, an individual will be influenced by his family, his friends, his cultural environment or
society that will “teach” him values, preferences as well as common behaviors to their own
culture. For a brand, it is important to understand and take into account the cultural factors
inherent to each market or to each situation in order to adapt its product and its marketing
strategy. As these will play a role in the perception, habits, behavior or expectations of
consumers
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2.4 Pepsi Company
2.4.1 Introduction
PepsiCo is the world’s largest snack food company and is among the top five largest food and
beverage companies in terms of annual revenue. Its main competitors in the food and beverage
industry include The Coca-Cola Company, Nestle, Kraft Foods Inc and Archer Daniels. In many
ways PepsiCo is a very different corporation than The Coca-Cola Company. Unlike Coke, which
focuses primarily on beverages, PepsiCo is a diverse corporation producing soft drinks as well as
snack foods and cereals. Their beverages division only accounts for portion of their $29.26
billion annual revenue (2004).
The first Pepsi-Cola company was formed in 1902 by a North Carolina pharmacist who 9 years
earlier invented the drink that became Pepsi-Cola. Pepsi-Cola declared bankruptcy twice before
1931 when it was finally purchased by the large candy company, Loft Inc. In 1941, after Pepsi
sales had taken off, Loft changed its name to the Pepsi-Cola Company. Pepsi-Cola merged with
Frito-Lay in 1965 to form PepsiCo and become the giant in the snack food and beverages
industry it is today. Adding to their already long list of brands and subsidiaries, PepsiCo
purchased Tropicana in 1998 and then merged with Quaker in 2001. Unlike The Coca-Cola
Company, whose flagship brand is linked to their corporate logo, Pepsi-Cola is only one of four
internationally recognizable brands attributed to PepsiCo. PepsiCo beverages and snacks are
available in over 160 countries around the world.
2.4.2 History in India
PepsiCo entered India in 1989 and has grown to become one of the largest food and beverage
businesses in India. PepsiCo India has been consistently investing in the country and has built an
expansive beverage and snack food business supported by 38 beverage bottling plants and 3 food
plants. PepsiCo India’s diverse portfolio includes iconic brands like Pepsi, Lay’s, Kurkure,
Tropicana 100%, Gatorade and Quaker. Within 2 decades, the company has been able to
organically grow eight INR 1000 crore plus brands in India, which are household names trusted
across the country. PepsiCo India is driven by its global commitment to sustainable growth,
Performance with Purpose, which works on four planks of replenishing water, partnering with
farmers, waste to wealth and healthy kids. In 2009, PepsiCo India achieved a significant
milestone, by becoming the first business to achieve ‘Positive Water Balance’ in the beverage
world, a fact verified by Deloitte Touché Tohmatsu India Pvt. Ltd. The company has been Water
Positive since then.
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2.4.3 Products
PepsiCo India’s expansive beverage portfolio includes:
• Iconic refreshment beverages: Pepsi, 7UP, Nimbooz, Mirinda, Mountain Dew,
• Low-calorie options: Diet Pepsi
• Hydrating and nutritional beverages: Aquafina (drinking water), Gatorade (isotonic sports
drink)
• Fruit juices: Tropicana100%
• Juice-based drinks: Tropicana Nectars, Tropicana Twister, Slice
• Local brands: Lehar Evervess Soda, Dukes Lemonade, Mangola
2.4.4 Brand features
PEPSI:
Pepsi has become a friend to the youth and has led many youth cultures. Youngsters over
the generations have grown up with Pepsi and share an emotional connect with it, unlike
any other cola brand.
Pepsi, Cricket and Bollywood have been joined at the hip since the beginning. Shah Rukh
Khan, Sachin Tendulkar, Amitabh Bachchan, Priyanka Chopra, Ranbir Kapoor and
Deepika Padukone are a few celebrities who have endorsed the brand.
The Pepsi My Can is undoubtedly the most popular cola pack of all times. It is not just a
pack but a style statement for today’s youth. Especially after the “Yeh Hai Youngistaan”
Campaign of Ranbir Kapoor
Seven UP:
For the past 2 years, 7UP’s ambition as a brand has been to capture and own the lemon
refreshment territory within the clear lime category. Lemon has proven to be a clear and
relevant differentiator for the brand and has allowed the brand to ladder up to an
emotional payoff of uplifting refreshment.
After establishing itself as “The Lemon Drink”, in Jan 2009, 7UP continued to build
further on the theme of mood up-liftment and refreshment with its new tagline “Mood ko
do Lemon ka Lift”.
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MIRINDA:
Mirinda's bold and vibrant color, great orange taste and sparkling bubbles encourages one
to be more spontaneous and playful.
With an endeavor to give the consumers a great tasting product to delight them
continuously, its taste has been reformulated and improved - first in 1996, then in 2002.
And what’s more is that Mirinda is now made without any artificial flavor in it.
MOUNTAIN DEW:
It is a soft drink that exhilarated like no other because of its daring, high-energy, active,
extreme citrus taste. Challenge, a can do attitude, adventure and exhilaration is deeply
entrenched in its brand and has always celebrated the bold and adventurous spirit of the
youth.
This exhilaration and excitement of Mountain Dew has always been reflected in the high-
adrenaline advertising of the brand that connected it to outdoor adventure.
SLICE:
With the launch of ‘Aamsutra‛ campaign in 2008 with Katrina Kaif as brand ambassador
along with a winning taste & most appealing pack graphics, Slice created disruptive
excitement in the category and celebrated mango indulgence like no other. Similar to this
is the new Alphonso Slice.
While other players have portrayed mango as a simple and innocent fruit, Slice celebrates
the indulgence and sensuality of consuming a Mango. The creative idea ‘Aamsutra‛
communicates the art of experiencing pure mango pleasure through the taste of Slice.
NIMBOOZ:
Locally Relevant Taste:-Nimbooz is a great tasting product which has capitalized on the
existing familiarity & behavior of high frequency consumption of unpackaged /
Homemade nimbu pani.
Convenience and Great Value:-The product is available in 3 convenient formats, 350ml
PET, 200ml RGB and 200ml Tetra at magic price points of Rs.15, Rs. 10 and Rs. 10
respectively.
Accessibility:-Nimbus is India’s first nationally available packaged Nimbus Pain.
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TROPICANA TWISTER:
This refreshing offering is best explained by the brand's tagline – ‘Toot Padua Fruit’,
which connotes the exciting rush of fruit-based refreshment offered by Tropicana
Twister.
Tropicana Twister is a refreshing juice drink brand that brings the goodness of fruit juice,
made from best of fruits from around the world.
The brand is targeted at young adults seeking natural refreshment beverage options that
also deliver on ‘attitude’ or ‘coolness’ quotient’ and ‘on-the-go convenience.’
AQUAFINA:
Aquafina is the face of PepsiCo’s water conservation initiatives and builds awareness on
PepsiCo’s efforts to replenish and restore the water table through its pack-labels.
Aquafina goes through a 5 step state-of-the-art purification process to give consumers
pure water and perfect taste every time.
Aquafina ensures its availability across more than half a million outlets. To cater to
varied consumer needs and occasions, it is available in various pack sizes.
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2.4.5 SWOT Analysis
STRENGTHS (S)
Product diversity. PepsiCo has several hundreds of brands, which include: carbonated
and noncarbonated drinks, water, savory and whole grain-based snacks. Product
diversification strengthens PepsiCo because it doesn’t have to rely on few key products
or seasonal sales and isn’t significantly affected by changes in customer tastes.
Extensive distribution channel. PepsiCo products are served to more than 10 million
stores per week in more than 200 countries.
Corporate Social Responsibility. The firm recognizes its role in a society and engages in
education, recycling, water usage reduction, obesity fighting and other projects through
PepsiCo Foundation, thus increasing its brand awareness and customer loyalty.
Competency in mergers and acquisitions. The key to PepsiCo business growth is its
successful mergers and acquisitions of beverage, bottling and snacks companies. PepsiCo
acquired such brands as Gatorade, Tropicana, Doritos, Quaker Oats and many others.
Brands earning more than $1 billion a year. The company doesn’t have to rely on one or
two of its product to bring most of the revenues. Instead, Pepsi has 22 brands that
contribute significantly to its income, serving different industries and satisfying various
consumer tastes.
Successful marketing and advertising campaigns. More than $2 billion spent on
advertising over 2012 resulted in PepsiCo’s growing market share over its main
competitors, including Coca Cola Company, which spent even more on advertising.
Complementary product sales. In its annual financial report, PepsiCo revealed one of its
studies' results that about 30% of customers who buy its snacks also buy its beverages.
PepsiCo’s decision to diversify its product range is firm’s competitive advantage too.
Proactive and progressive. According to New York Times food industry writer Melanie
Warner, PepsiCo, by many critics, is considered to be most proactive and progressive
food company.
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WEAKNESS (W)
Over-dependence on Wal-Mart. More than 13% of PepsiCo business revenues come from
Wal-Mart store chain. Wal-Mart has a significant buyer power and can easily dictate
prices over PepsiCo leaving it with very small margins.
Low pricing. PepsiCo usually prices its products lower than its competitors. Low price is
associated with low quality and PepsiCo products are usually perceived as ones.
Questionable practices. PepsiCo is using and selling tap water but places view of
mountains on its water bottle labels, thus deceiving people that it is mountain spring
water when it is not. PepsiCo has also been criticized for using water in India with higher
than allowed amount of pesticides in it.
Weak brand awareness. The Coca Cola Company has the largest share market of
beverages in the world and much stronger brand awareness than Pepsi, placing it at
competitive disadvantage.
Too low net profit margin. PepsiCo’s net profit margin is 9.7% compared to Coca Cola’s
18.55% and Nestlé’s 11%.
OPPORTUNITIES (O)
Growing beverages and snacks consumption in emerging markets. PepsiCo has made
large investments in BRIC countries to expand its market share as these countries
represent the fastest growing food and beverages markets in the world. If PepsiCo is
successful it will increase its revenues and global market share significantly. In addition,
it will be able to rely less on US market.
Increasing demand for healthy food and beverages. Due to many programs to fight
obesity, demand for healthy food and beverages has increased drastically. PepsiCo has an
opportunity to further expand its product range with beverages and snacks that have low
amount of sugar and calories.
Further expansion through acquisitions. So far, PepsiCo has been successful in acquiring
other companies and adding new growing brands to its portfolio.
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Bottled water consumption growth. Consumption of bottled water is expected to grow
both in US (PepsiCo’s largest bottled water market) and the rest of the world.
Savory snacks consumption growth. The same opportunity PepsiCo has in growing its
revenue selling snacks as this market is also expected to grow.
THREATS (T)
Changes in consumer tastes. Consumers around the world have become more health
conscious and reduce their consumption of carbonated drinks, drinks that have large
amounts of sugar, calories and fat.
Water scarcity. Water is becoming scarcer around the world and increases in both cost
and criticism for PepsiCo over the large amounts of water used for production.
Decreasing gross profit margin. PepsiCo’s gross profit margin was decreasing over the
past few years and may continue to decrease due to higher water and other raw material
costs.
Legal requirements to disclose negative information on product labels. Some researches
show that particular ingredients, consumed in extra large quantities, in some of PepsiCo
products could cause cancer. For this reason, many governments consider to pass
legislation that requires disclosing such information on product labels. Products
containing such information may be perceived negatively and lose its customers.
Strong dollar. More than 50% of PepsiCo’s income is from outside US. Due to strong
dollar performance against other currencies PepsiCo’s income should fall.
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2.4.6 Market Advantage for Pepsi in India
Coke had a small presence in India before pulling out in 1977 after new government regulations
would have forced it to partner with an Indian company and share the drink's secret formula. In
1988, PepsiCo formed a joint venture with two Indian companies and introduced products under
the Lehar brand. (Lehar Pepsi was introduced in 1990.) Coke re-entered the market in 1993, after
Indian regulations were changed to allow foreign brands to operate without Indian partners.
Coke's time out of India cost it dearly. Pepsi got here sooner, and got to India just as it was
starting to engage with the West and with Western products. And with no real international
competition, Pepsi' became this catch-all for anything that was bottled, fizzy, and from abroad.
Pepsi became synonymous for the product soft drink.
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3. RESEARCH STATEMENT
The findings and analysis is based upon a research done by using quantitative data and secondary
data on consumer behaviour on soft drinks market in India.
31. 31
4. RESEARCH METHODOLOGY
Introduction to Research Methodology
The design of any study begins with the selection of a topic and a research methodology. The
word “research” is used to describe a number of similar and often overlapping activities
involving a search for information. The word “methodology” can properly refer to the theoretical
analysis of methods appropriate to a field of study or to the body of methods and principles may
be derived to understand different situations within scope of a particular discipline. Therefore,
research methodology refers to the way in which the data are collected for the research project.
My Research data includes quantitative data. In this research paper, quantitative data and
secondary data have been involved.
Quantitative Data- Information that can be counted or expressed numerically. This type of data is
often collected in experiments, manipulated and statistically analyzed. Quantitative data can be
represented visually in graphs and charts. The behaviour of consumers is recorded through it.
Data Collection Method:
Depending on the nature of the information to be gathered, different instruments are used to
conduct the assessment:
SECONDARY DATA - Secondary data is the data that have been already collected by and
readily available from other sources. Such data are cheaper and more quickly obtainable than the
primary data and also may be available when primary data cannot be obtained at all.
TOOLS:
Tools used in Research Methodology are as follows:
Pie Diagram
A pie chart (or a circle graph) is a circular chart divided into sectors, illustrating numerical
proportion. In a pie chart, the arc length of each sector is proportional to the quantity it
represents. Pie charts are very widely used in the business world and the mass media. Pie chart
was used to find the percentage of different factors and other asked questions.
Column Chart
The column chart consists of a group of equi-spaced rectangular bars, one for each category of
given statistical data. The columns, starting from a common base line, must be of equal width
and the length represents the values of statistical data. The column chart was used to show the
frequency of crates of different soft drink brands kept by retailers.
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5. RESULTS AND DISCUSSIONS
An analysis has been showed in which a comparison has been made between different
carbonated brands.
To find out how many people consume soft drinks regularly
Table 1 shows the Number of people who regularly consume soft drinks and those who don’t.
Chart 1 shows a percentage wise share of the regular consumers of soft drinks as that of not
regular consumers and is derived from Table 1. As it is clearly visible, 76% of the total
population of the sample is regular consumers of soft drinks, it shows us that the majority of the
people like drinking aerated beverages.
To find out which age group consume soft drinks regularly
Table 2 shows the age group distribution of the surveyors or the sample population. It also shows
how many of them like soft drinks and how many don’t. Chart 2, derived from Table 2, puts the
same in bar graph form. As it is seen that all age groups prefer drinking soft drinking regularly.
The age group of below 16 and above 50 have the highest ratio with 83.33% people of both
category said that they drink soft drinks regularly. Also as it is visible from the chart and table, in
the age group of 16-30 only 69.69% people said they consume soft drinks regularly, this tells us
that the new generation of teens and adults are becoming more and more health conscious and
shifting to better and healthier options. 48
To find out how many males and females consume soft drinks regularly
Table 3 shows the total males and females in the survey and also whether they like soft drinks
and consume them regularly or not. Chart 3 is derived from the data in Table 2 and tells us what
percentage of the males like soft drinks and what not. It tells us the same things about the
females. We can clearly understand from this that both men and women consume soft drinks
regularly as both have more than 70% as regular consumers. Also it can be seen here that the
women drink more as compared to men as out of 13 women 10 said they drink regularly (77%
approx) while 27 out of 37 men said they drink regularly (73% approx).
33. 33
To find out how frequently people consume soft drinks
Table 4 and Chart 4 show us the frequency at which people consume soft drinks. 20% of the
people have said that they never drink soft drinks, while 8% of the people agreed that they drink
but rarely (once in a month). It was staggering to see that 38% of the people agreed they were
quite often (thrice in a week) consumers of soft drinks and even more shocking was to see that
34% people owned up that they are very regular (once in a day) consumer of soft drinks. This
tells us that the soft drinks industry is at a rise.
To find out total score given to Different brands on the basis of different criteria’s
Table 5 has been formed by taking the total of all the marks given to each aspect of each brand
by each survey filler. Chart 5 which has derived from table 5 clearly shows us that Thumbs Up
has the highest score which means it is the best according to consumers in overall performance
and satisfying the needs of the consumers. This directly tells us that more people prefer Thumbs
Up which proves our data in Chart 5.
To find out which brand consumers think is the best in taste
Chart 5 has been derived from Table 5 and shows us the total marks given to the different brands
on the basis of taste. Chart 5 shows us that nearly all have gotten the same score but still Thumbs
Up leads with a score of 153 and a percentage share of 14.6%. Here 7 Up gets the lowest score
and thus the consumers have given 7 Up the least preferred rank maximum number of times.
To find out which brand consumers think is the best according to price
Chart 5 has been derived from Table 5 and shows us the total marks given to the different brands
on the basis of price. It then totals all the scores and each score is divided by the total so as to
understand the percentage that each brand got. Chart 5 shows us that nearly all have gotten the
same score but still Thumbs Up leads with a score of 139 and a percentage share of 14%. Here
Mirinda gets the lowest score as 117. 51
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To find out which brand consumers think is the best according to color
Chart 5 has been derived from Table 5 and shows us the total marks given to the different brands
on the basis of color. It then totals all the scores and each score is divided by the total so as to
understand the percentage that each brand got. Chart 5 shows us that nearly all have gotten the
same score but still Thumbs Up leads with a score of 149 and a percentage share of 14%. Here
Mirinda gets the lowest score as 117 and a percentage of 11%. Thus people are not liking the
extra orangey colour of Mirinda and the colour that it leaves behind on the tongue.
To find out which brand consumers think is the best according to packaging
Chart 5 has been derived from Table 5 and shows us the total marks given to the different brands
on the basis of packaging. It then totals all the scores and each score is divided by the total so as
to understand the percentage that each brand got. Chart 5 shows us that nearly all have gotten the
same score but surprisingly Pepsi leads with a score of 141 and a percentage share of 13%. Here
Fanta gets the lowest score as 117. Thus the new design of the Pepsi bottle that was introduced
recently has been well accepted by the consumers.
To find out which brand consumers think is the best according to advertisement & brand
icon
Chart 5 has been derived from Table 5 and shows us the total marks given to the different brands
on the basis of price. It then totals all the scores and each score is divided by the total so as to
understand the percentage that each brand got.
Nearly all have gotten the same score but still Thumbs Up leads with a score of 162 (15%)
closely followed by Mountain dew at 149 (13.8%). Here Mirinda gets the lowest score as 117
(10.8%). Thus brand endorsements by celebrities such as Salman Khan and Akshay Kumar have
worked wonders for Thumbs Up, while Mountain Dew should be happy with the publicity that
its dare devil and gravity defying stunts that is hsown in its ads. Also brand tie up with Hrithik
Roshan has also upped its Bollywood quotient. Mirinda here needs to work on its advertisement.
Its new ad which shows only cartoon is definitely not striking a chord with the mass public.
35. 35
6. CONCLUSION
Findings and Recommendations
Findings:
The sales and consumption of the soft drink industry has grown exponentially over the
years, especially in India
The foreign policies of the government directly affect the industry as the major players
are from outside
The preference of brand of the customer is heavily formed due to the advertisement and
brand icons that the company choose
Even though this industry is profitable it is also unethical in sorts.
The major players have tried to use their power and influence and gotten away with
wrong doings towards the local communities and the environment
The product is also detrimental to the health of the consumers
Recommendations:
As brand image is very important in this industry, the companies should try to take up
social initiatives so as to improve their images. Coca Cola has already taken up a CSR to
do that
The market is getting saturated and thus the players need to come up with a new and
innovative product which is not harmful to health
The major companies will also have to invest in other arenas so as to make sure that they
have profits from some other sources also and not only this
36. 36
7. BIBLIOGRAPHY
[1] Dr Simranjeet Kaur Sandhar, Consumption Pattern of soft drinks and fruit juices a
comparative study, SVIM e-Journal, Vol I, Issue I, 2013
[2] Selvanathan & Selvanathan, 2003
[3] Barbara Murray (2006c)
[4] American Beverage Association, 2006
[5] Richard Girard, Company Profile:Pepsico, Polarish Institute, 2005, Pg3
[6] http://www.pepsicoindia.co.in/media/fact-sheet.html
[7] PepsiCo (2013).Available at: http://www.pepsico.com/Brands.html
[8] United States Securities and Exchange Commission (2012). 10-K Annual report of PepsiCo,
Inc
[9] Warner, Melanie (2010). Good News! PepsiCo’s Indra Nooyi Solves the Obesity Crisis.
Bloomeburg Business Week, September 20-26 2010
Earth Island Journal, Autumn 2014
Issue, Page 11
37. 37
Subhasis Ray, Feasibility Study to Identify the Opportunities for Selling Soft Drinks in
Educational Institutions, The Icfai University 40 Journal of Marketing Management, Vol. VIII,
No. 2, 2009, Page 40
Statistical Method by NG DAS.
Research Methodology by C.R. Kothari.
Consumer behaviour-
http://shodhganga.inflibnet.ac.in:8080/jspui/bitstream/10603/9162/7/07_chapter%202.pdf- James
F. Engel, Roger D. Blackwell and Paul W. Miniard, “Consumer Behaviour” (1990).
Factors of consumer behaviour-
http://www.slideshare.net/wishleo507/consumer-behavior-and-factors-influencing-consumer-
behavior?related=1
42. 42
Table 1
Do you regularly Consume Soft Drinks?
No. Of People Percentage (%)
YES 37 74
NO 13 26
Total 50 100
Chart 1
Do you Consume Soft Drink?
Yes No
26%
74%
Table 1
Source: Dr Simranjeet Kaur Sandhar, Consumption Pattern of soft drinks and fruit juices a
comparative study, SVIM e-Journal, Vol I, Issue I, 2013
43. 43
Table 2. What is the age group that drinks soft drinks regularly?
No.of People Yes No Yes % No %
Below 16 6 5 1 83.33333 16.6666667
33 23 10 69.69697 30.303030316-30
5 4 1 80 2030-50
Above 50 6 5 1 83.33333 16.6666667
Total 50 37 13 100 100
Chart 2
Age Wise Soft Drink Consumption
90
80
70
Percentage
60
50
40
30
20
10
0
Below 16 16-30 30-50 Above 50
Yes 83.33333333 69.6969697 80 83.33333333
No 16.66666667 30.3030303 20 16.66666667
Table 3
Gender Wise Soft Drink Consumption
No.of People Yes No Yes % No %
Male 37 27 10 72.97297 27.027027
Female 13 10 3 76.92308 23.0769231
Total 50 37 13
44. 44
Chart 3
Gender Wise Soft Drink Consumption
Female
Male
0 20 40 60 80 100 120
Male Female
Yes % 72.97297297 76.92307692
No % 27.02702703 23.07692308
Table 2 and Table 3
Source:
http://shodhganga.inflibnet.ac.in:8080/jspui/bitstream/10603/9162/7/07_chapter%202.pdf- James
F. Engel, Roger D. Blackwell and Paul W. Miniard, “Consumer Behaviour” (1990).
45. 45
Table 4
How frequently do you consume soft drinks?
No. Of People Percentage (%)
Never 10 20
Rarely 4 8
Quite Often 19 38
Regularly 17 34
Total 50 100
Chart 4
Consumption Regularity of Soft
Drinks
20%
34% Never
8%
Rarely
Quite Often
38%
Regularly
Table 4
Souce: Asian Case Research Journal. Dec2006, Vol. 10 Issue 2, p281-302. 22p. 1 Map, 1
Cartoon or Caricature. Elangeswaran, Sajiththa1 sajiththa03@gmail.com Ragel, V.
R.2 victoriaragel@yahoo.co.uk
