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FMCG Industry

FMCG Industry

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RESEARCH PROJECT ON CONSUMER PREFERENCE TOWARDS SOFT DRINKS Submitted to Kurukshetra University,Kurukshtera In partial fulfilment of Master of Business

Administration

Under the Guidance of: Dr. Kuldeep Singh

SUBMITTED BY:DEEPAK BATRA MBA 3rd SEM

CONTENTS

 INTRODUCTION  History  Production  Major Companies of soft drinks  Benefits  Groups Involved  Advertising Campaign  Objectives of Study  Research Methodology  Analysis & Interpretation  Findings  Suggestions  Conclusions  Limitations  Bibliography

 Annexure

5% of the total volume. milk. the Compagnie des Limonadiers of Paris was granted a monopoly for the sale of lemonade soft drinks. The sweetener may be sugar. Carbonated drinks In the late 17th century. They are rarely heated. HISTORY The first marketed soft drinks in the Western world appeared in the 17th century.4 mg in the drink when he suspended a bowl of distilled water above a beer vat at a local brewery in Leeds. but not always carbonated water). His invention of carbonated water (also known as soda water) is the major and defining component of most soft drinks. soda pop. but are usually called energy drinks. Soft drinks are called "soft" in contrast to "hard drinks" (alcoholic beverages). highfructose corn syrup. and a flavoring agent. pop. Beverages like Gatorade and Powerade may meet the definition of a soft drink but are usually called sports drinks. and milkshakes.Examples of beverages not considered to be soft drinks are: pure juice. scientists made important progress in replicating naturally carbonated mineral waters. hot chocolate. . or a sugar substitute (in the case of diet drinks). They were made from water and lemon juice sweetened with honey. coke. Red Bull (and variations) also may meet the definition. Soft drinks may be served chilled or at room temperature. coffee. fizzy drink. tonic. Englishman Joseph Priestley first discovered a method of infusing water with carbon dioxide to make carbonated water which has 3. but the alcohol content must be less than 0. or carbonated beverage) is a non-alcoholic beverage that typically contains water (often. a sweetener. Vendors carried tanks of lemonade on their backs and dispensed cups of the soft drink to thirsty Parisians. England. tea.SOFT DRINKS A soft drink (also called soda. In 1767. if the drink is to be considered non-alcoholic. Small amounts of alcohol may be present in a soft drink. In 1676.

John Matthews of New York City and John Lippincott of Philadelphia began manufacturing soda fountains. the "Crown Cork Bottle Seal" was patented by William Painter. It was the first very successful method of keeping the bubbles in the bottle. The drink consists of 1 US fl oz (30 ml) fruit syrup. Inventors were trying to find the best way to prevent the carbon dioxide or bubbles from escaping. 1/2 teaspoon of phosphoric acid. Beginning in 1806. Michael . Yale chemistry professor Benjamin Silliman sold soda waters in New Haven. He used a Nooth apparatus to produce his waters. a Baltimore. In 1892. Four years later. This drink was commonly served in pharmacies. the new bottle-blowing machine was in operation. Soda fountain pioneers Artificial mineral waters.500 U. Businessmen in Philadelphia and New York City also began selling soda water in the early 19th century. Maryland machine shop operator. It was first operated by the inventor. Both men were successful and built large factories for fabricating fountains. Earlier glass bottles had all been hand-blown. and the soda fountain made the biggest splash in the United States. Automatic production of glass bottles In 1899. Soft drink bottling industry Over 1. or lid for the carbonated drink bottle tops during the early days of the bottling industry. Phosphate soda A variant of soda in the United States called "phosphate soda" appeared in the late 1870s.S. It became one of the most popular soda fountain drinks from 1900 through the 1930s. cap. Connecticut. the first patent was issued for a glass-blowing machine for the automatic production of glass bottles. Carbonated drink bottles are under great pressure from the gas. usually called "soda water". with the lemon or orange phosphate being the most basic. and enough carbonated water and ice to fill a glass. patents were filed for either a cork. In the 1830s.

Home-Paks and vending machines During the 1920s. Syrups are commercially sold by companies such as Soda-Club. In the United States. and physical parameters such as color. the microbiological status. "Home-Paks" are the familiar six-pack cartons made from cardboard.000 bottles a day. Vending machines also began to appear in the 1920s.Owens. soft drinks (as well as other beverages such as non- . oranges. Production Soft drink production Soft drinks are made by mixing dry ingredients and/or fresh ingredients (for example. "Home-Paks" were invented. an employee of Libby Glass Company. soft drink vending machines have become increasingly popular. this resulted from natural fermentation used to build the carbonation.) with water. Soft drinks can be made at home by mixing either a syrup or dry ingredients with carbonated water. Production of soft drinks can be done at factories or at home. glass bottle production increased from 1.400 bottles a day to about 58. Potential alcohol content A report in October 2006 demonstrated that some soft drinks contain measurable amounts of alcohol. the level of the major constituent). Since then. In some older preparations. etc. but the level of impurities. etc. lemons. This is not only the functional parameter (in other words. Both hot and cold drinks are sold in these self-service machines throughout the world. Carbonated water is made using a home carbonation system or by dropping dry ice into water. Ingredient quality Of most importance is that the ingredient meets the agreed specification on all major parameters. Within a few years. particle size.

A small amount of alcohol is introduced in some soft drinks where alcohol is used in the preparation of the flavoring extracts such as vanilla extract. but there is some speculation that alcohol might result from fermentation of sugars in an unsterile environment. . Modern drinks introduce carbon dioxide for carbonation.5% alcohol by volume.alcoholic beer) are allowed by law to contain up to 0.

Hindustan Coca-Cola Beverages Pvt Ltd. Besides its namesake Coca-Cola beverage. Burn. both company owned as well as locally owned and includes over 7. Coca-Cola India Private Limited and re-launched Coca-Cola in 1993 after the opening up of the Indian economy to foreign investments in 1991. supermarkets. Limca. thirteen authorized bottling partners of The CocaCola Company. small retailers. and an extensive distribution system comprising of our customers. The Coca-Cola Company‟s brands in India include Coca-Cola. Fanta Orange. The company is best known for its flagship product Coca-Cola. sell and distribute beverages under certain specified trademarks of The Coca-Cola Company. In India. Fanta Apple. Since then its operations have grown rapidly through a model that supports bottling operations. restaurants and numerous other businesses. Thums Up. distributors and retailers. the Coca-Cola system comprises of a wholly owned subsidiary of The Coca-Cola Company namely Coca-Cola India Pvt Ltd which manufactures and sells concentrate and beverage bases and powdered beverage mixes. these customers make our beverages available to consumers across India. the Georgia Gold range of teas and coffees and Vitingo (a beverage fortified with micro-nutrients). Maaza. Minute Maid Pulpy Orange.  The Coca-Cola Company re-entered India through its wholly owned subsidiary.3 million retailers. who are authorized to prepare. our brands are the leading brands in most beverage segments. invented in 1886 by pharmacist John Stith Pemberton in Columbus. Maaza Milky Delite. .These authorized bottlers independently develop local markets and distribute beverages to grocers. namely. Today. Sprite. package. Minute Maid Nimbu Fresh and Nestea Iced tea. Coca-Cola currently offers more than 500 brands in over 200 countries or territories and serves over 1.The Coca-Cola Company is an American multinational beverage corporation and manufacturer. a Company-owned bottling entity. In turn. The Coca-Cola formula and brand was bought in 1889 by Asa Candler who incorporated The Coca-Cola Company in 1892. Kinley.000 Indian distributors and more than 1. retailer and marketer of non-alcoholic beverage concentrates and syrups. Coca-Cola India Private Limited sells concentrate and beverage bases to authorized bottlers who are authorized to use these to produce our portfolio of beverages.7 billion servings each day. Georgia.

plastic. our operations catalysis growth in demand for products like glass. We have used our distribution network for disaster relief. transportation. vendors and allied industries which often lead to improvement in the overall standards of quality across industries.50. and our presence in communities to improve access to education and potable water. Coca-Cola in India is amongst the largest domestic buyers of certain agricultural products. Our operations also lead to incremental growth for enterprises engaged in post production activities like merchandising. The Coca-Cola Company has always placed high value on good citizenship. This means that if one unit of output of beverage is increased. health. A National Council of Applied Economic Research (NCAER) study on the carbonated soft-drink industry indicates that this industry has an output multiplier effect of 2. and strengthen the community.be it the need for education. The beverage industry is a major driver of economic growth. The Coca-Cola India Foundation is now taking forward in the community at large. We leverage our unique strengths to actively support and respond to local needs -. refrigeration. we share best practices and technological advancements with our suppliers. contributing to creation of jobs and growth in GDP. The system has created indirect employment for more than 1. the direct and indirect effect on the economy will be twice of that.The Coca-Cola Company has invested nearly USD 1. Our basic proposition entails that our Company‟s business should refresh the market. projects and programs of social relevance to carry forward the message of inclusive growth and development.000 people in related industries through its vast procurement. marketing and sales. protect and preserve the environment. supply and distribution system. water or nutrition. In terms of employment. the NCAER study notes that “an extra production of 1000 cases generates an extra employment of 410 man days. and Industrial and agricultural products. We strive to ensure that our work environment is safe and inclusive and that there are plentiful opportunities for our people in India and across the world. As an industry which has strong backward and forward linkages.1.000 people including those on contract.1 billion in its operations in India since its re-entry back into India in 1992. our marketing prowess to raise awareness on issues such as PET recycling. . In addition. The Coca-Cola system in India directly employs over 25. enrich the workplace.” As a Company. our products are an integral part of the micro economy particularly in small towns and villages.

Large investor: One of the largest US multinational investors in the country with an investment of over $1 billion. PepsiCo India‟s diverse portfolio includes iconic brands like Pepsi. and talent. with interests in the manufacturing. PepsiCo entered India in 1989 and in a short period of 20 years has grown into the largest and one of the fastest growing food & beverage business in the country.PepsiCo Inc. corporate values.1 food & beverage business in India: PepsiCo India has not only grown to become the country‟s largest food and beverage business but has also become a powerful and consistent driver of PepsiCo‟s global growth. The company‟s beverage distribution and bottling is conducted by PepsiCo as well as by licensed bottlers in certain regions.000 people worldwide as of 2010. . Kurkure. (13 company and 23 franchisee owned) and three food plants. the consumers they serve and the environment whose resources they use. (NYSE: PEP) is an American multinational corporation headquartered in Purchase.50. Gatorade. Lay‟s.000 people across the country. It‟s beverage and snack food business is supported by 36 beverage bottling plants. marketing and distribution of grain-based snack foods. Inc. they have a responsibility to all the stakeholders including the communities in which they operate. No. PepsiCo is a SIC 2080 (beverage) company. India's beverage and foods businesses have been the largest volume growth contributors to PepsiCo across the globe. This means that while businesses maximize shareholder value. PepsiCo India provides direct and indirect employment to over 1. United States. Tropicana 100%. New York. and was one of the five top marketers of the country in 2009. Indra Krishnamurthy Nooyi has been the chief executive of PepsiCo since 2006. PepsiCo India‟s growth has been guided by PepsiCo‟s global vision of “Performance with Purpose”. Quaker and young but immensely popular and fast growing brands such as Nimbooz and Aliva. PepsiCo was formed in 1965 with the merger of the Pepsi-Cola Company and Frito-Lay. „indovations‟. PepsiCo has since expanded from its namesake product Pepsi to a broader range of food and beverage brands. and other products. PepsiCo India has been frequently recognized for its industry-leading human resource practices. beverages. and the company employed approximately 285. Over the last two years. the largest of which include an acquisition of Tropicana in 1998 and a merger with Quaker Oats in 2001 – which added the Gatorade brand to its portfolio as well.

installation of wind turbines. Water Digest award for water practices and Golden Peacock award for water conservation among others. PepsiCo India saved 10. As PepsiCo grows. PepsiCo is leading a pioneering initiative to replace transplanting of paddy with direct seeding technology which has helped reduce water consumption in paddy cultivation by over 30% and has also cut down GHG emissions by 75%. PepsiCo India has received numerous awards such as CII National award for water management. rehydrator Gatorade. making the healthful choice an easier choice. reduction in weight of packaging and film used in product packaging. PepsiCo was the first in India to introduce the use of healthier oils for its snacks -. Its award-winning "waste to wealth" recycling program reaches 450. This means that it replenishes more water than it consumes in its manufacturing operations. In 2010. reduction of use of chemicals. by becoming the first business in the PepsiCo system to achieve ‘Positive Water Balance’ (PWB). PepsiCo India achieved a significant milestone. This has been validated by Deloitte Consulting.000 families. For water related environment initiatives. conversion of potato waste into bio gas help reduce load on the environment. sodium and saturated fats in its products.Lays Potato chips.A third of PepsiCo India's portfolio today comprises healthier products: PepsiCo‟s portfolio reflects its commitment to nourish consumers with a diverse range of fun and healthy products. Tropicana juices.1 billion litres of water through various initiatives. Global leader in water conservation: In 2009. reduction in weight of metal crowns/polypropylene caps for plastic bottles. Today. Pepsi Max and Cheetos Whoosh. the portfolio includes several healthier treats like Quaker Oats. Nearly 30% of its energy is today generated from renewable sources such as rice husk boilers and wind turbines. the company is now focused on reducing its carbon footprint. Care for the environment: Following its success in water conservation. Initiatives such as agriculture waste boilers in our plants. Kurkure and Cheetos. . the portfolio transformation will continue with a systematic plan to reduce added sugar. PepsiCo India also partners NGOs and local administrations in three states of India to recycle household solid waste in an endeavor to keep cities clean.

PROJECT PROFILE .

It has been done by the actual field survey and collecting primary data.e. the complete population has been divided into 4 Age Groups i. Location:Sirsa city is quite old city and is located in the westernmost region of the state. lawyers etc. which could spell their choice/liking for soft drinks. The population growth graph in India has an upward trend and India is considered the biggest market of the world. Housewives. People of rural areas also reside here. This study has been undertaken keeping in mind these vital factors. company can‟t impress strongly due to the tender age & low awareness level. The liking for soft drinks is widely affected due to its location. Urban background . For the purpose of survey. As such MNC and other reputed players in the „Soft drinks‟ find India as their dreamland. people & economy. Below 10 years 10-20 20-30 years years Above 30 years The attention is mainly focused on the population. However age group of below 10 years is least preferred for carrying out the sample survey due to the fact that liking for a particular brand. students. bordering Punjab and Rajasthan.INTRODUCTION Main objective of the study is to know the consumer liking vis-à-vis market potential of Soft drinks in Sirsa. doctors. It has been found that there exists good scope for soft drinks manufacturers due to enhanced liking & awareness level amongst the various strata of population. Here we can find businessmen. The people in this area are of mixed kind.

e. educationists etc. The population of this area is very large i. SELECTION OF AREA:Following consideration prompted the choice of Sirsa city for the present study of liking for Soft drinks.  The second main consideration was that in Sirsa city. This has facilitated me in the task of Data collection. this area is thus a mixed society. over lacs. The city has many reputed colleges & schools.  Due to its vicinity to Delhi. . Some people of Rural Back ground are also engaged in good jobs. there is a lot of impact on the life-style of the Young Turk. The people of rural area have been involved in agriculture. businessmen. on account of greater exposure to media Advertisement. Urban background people are professionals. the education exposure level is comparatively higher in comparison to other areas.  Due to rapidly changing society.people also live here. So we can say that people with modern thinking are aware of surroundings & have a taste for the consumption of soft drinks. In addition to this I belong to this place.

OBJECTIVES OF THE STUDY  To find out the customer choice/preference towards various Soft drinks.  To find out market leader in the market.  To find out the various factors influencing the purchase of Soft drinks. .  To categorize the consumer on the basis of taste & preferences.

LIMITATION OF THE STUDY As every study has some limitations. this study is not an exception too regarding limitations.  Numbers of respondents conducted for the age groups of below 10 & above 30 are less.  People do not have exact & appropriate knowledge on the recall of brands  Hypothesis is not taken.  Limited area of operation that‟s only few areas are covered in this project. as they are not easily approachable. so the study didn‟t get any help from that angle. .  Lack of experience of the researchers may cause some errors. Some of the main limitations that I had to face while working on this project are highlighted as under:  There was no reliable secondary data available.

As there is a plethora of statistical techniques for different research study. which determines the course of action towards the collection and analysis of required data. To the extent that the research had to begin with certain factors which were likely to be influential to determining consumer attitude towards cars. The whole plan should be defined effectively so that the researcher can have reasons in favor of some factors and so against some other. as under: It has been divided into four parts: - a) b) c) d) A) RESEARCH DESIGN SAMPLE DESIGN DATA COLLECTION METHOD DATA ANALYSIS PROCEDURE RESEARCH DESIGN A research design is the specification of method and procedure for acquiring the information needed. 3) Casual research design – Casual research design is adopted in order to discover and determine the cause and effect relationship. so it is highly essential that the procedures and techniques to be applied should be explained carefully. the procedures for conducting it should be vividly expressed. 1) . the study was in some measure also casual.The study is typically concerned with determining the frequency of a particular phenomenon.RESEARCH METHODOLOGY For the research study to be accepted in its and spirit. at least initially. 2) Descriptive. This framework is to ensure that the relevant data are collected and it also implies that it is collected accurately in an economical manner. It is the framework. Research design has broadly been classified into three categories: Exploratory – The exploratory design research attempts to bring out new relationship. Since the present study is not building on any previous study its nature has to be essentially exploratory.

For the present study.e. three basic methods are used to collect primary data1) 2) 3) Interview Observation Questionnaire . the techniques of convenience sampling (i. a sample should never be too big as to be un-manageable nor too small as to loose its representation. C) DATA COLLECTION METHOD: Usually. non-probability sampling is used. both time and money are the major constraints. In sample design. non-zero chances of being selected in the sample while non-probability sampling involves personal judgement. the more representative it is likely to be. each element of the population has known. In probability sampling. following three aspects are highlighted: - Determination of sample unit Determination of sample technique Determination of sample size SAMPLE UNIT: The universe of the study is all the individuals using Soft drinks in Sirsa city and the sample size of 100 is to be taken using random sampling technique. SAMPLE SIZE = 100 SAMPLING TECHNIQUES: There are two main categories of sampling techniques – namely Probability Sampling & Non Probability Sampling.SAMPLE DESIGN: An ideally selected sample represents the whole universe. The bigger the size of a sample. Thus. A due consideration should be given to the data collection so that the conclusion comes out to be accurate. But.

Keeping in view the nature of this study. questionnaire method was found to be most effective. D) DATA ANALYSIS: The data was collected.e.Sirsa city Sample unit. In observation.e.Structured interview involves the usage of questionnaire to collect the desired data from those who have the same information. but the situation of interest is watched carefully to record the relevant information. The questionnaire is structured i. tabulated. and non-disguised i. Some diagrams have also been aided in order to make the study clear and easily understandable. and interpreted and analyzed with a view to get some useful information In order to make the study more comprehensive responses have been presented with the help of various tables. objective of the study is clear to the respondents. no questionnaire is used. it is presented having from question in sequence. Unstructured interviewing on the other hand involves research/depth interviewing.100 Study based on.Questionnaire .Individual using Soft drinks Sample size.primary data Data collection instrument. In brief my research design is as follows: Sample Area.

Who buys soft drinks for you? parents Self Friends Brother/sister 12% 53% 23% 12% .

.Friends 23% Parents 12% Parents Self Brother/sister Friends Self 53% Brother/sister 12% Interpretation: From the above analysis it is clear that majority of the persons buy soft drinks for themselves.

25% on the basis of ads. . 14% on the basis of suggestions from friends. &% on the basis of shopkeepers advice and % on the basis of price.You choose soft drinks on the basis of? ADVERTISEMENTS 25% FRIENDS SUGGESTION 14% SHOPKEEPERS ADVICE 7% PRICE CONSIDERATION TASTE 4% 50% ADVERTISEMENTS 25% FRIENDS SUGGESTION SHOPKEEPER1S ADVICE 14% 4% 7% PRICE CONSIDERATION TASTE 50% Interpretation: From the above analysis it is clear that 50% of the people choose soft drinks on the basis of taste.

Consumption pattern CLIMATE HOT COLD AUTUMN ANY TIME TOTAL MALE 17 8 7 8 40 FEMALE 27 10 15 8 60 TOTAL 44 18 22 16 100 30 25 20 15 10 5 0 HOT COLD AUTUMN ANY TIME MALE FEMALE .

20% 42% HOT COLD AUTUMN 18% ANY TIME 20% Are you a habitual or occasional consumer? CONSUMER SERVICE STUDENT BUSINESSMAN HOUSEWIFE TOTAL HABITUAL 7 12 5 6 30 OCCASIONAL 20 24 16 10 70 TOTAL 27 36 21 16 100 .

30 25 20 15 10 5 0 HABITUAL OCCASIONAL UD EN T VI CE AN M ST BU SI N PIE CHART (%) Habitual Occasional 30% 70% HABITUAL 30% HABITUAL OCCASIONAL 70% OCCASIONAL HO US EW SE R ES S IF E .

Purpose of consuming soft drinks? MALE ENERGY/HUNGER STATUS PLEASURE/FUN TASTE TOTAL 4 6 13 17 40 FEMALE 8 4 16 32 60 TOTAL 12 10 29 49 100 35 30 25 20 15 10 5 0 MALE FEMALE R S TA TU G E E/ F /H U N R G Y N E E P LE AS ENERGY/HU NGER 10% TASTE 42% STATUS 15% ENERGY/HUNGER STATUS PLEASURE/FUN TASTE PLEASURE/ FUN 33% Interpretation: U R S TA ST E U N .

Majority of the respondents consume soft drinks for taste while some other consume for pleasure. Very less percentage of the respondents consume for hunger satisfaction and status. .

a few unmistakable conclusions can be drawn. 5) As the age of the people increases the buying of soft drinks by parent buying for children to self purchase by young age groups according to their taste.CONCLUSION Based on the findings of the research detailed in the preceding pages. 4) Sale of soft drinks is very heavy in summers but people do buy soft drinks in every season. 6) Income of people has very little effect on the choice/liking of soft drinks. 2) Rising price of soft drinks is affecting the buyer‟s buying behaviour to large extent. they are as follows: 1) Good advertising effect & nice taste of soft drinks can take any company to those heights. 3) Consumers are very much affected by attractive packaging. . one had not even thought of.

 Most of the people purchase soft drinks for the sake of change in taste. Therefore. Hence these things can be used in designing advertising. some schemes can be introduced.SUGGESTIONS & RECOMMENDATIONS  Soft drinks companies should come up with more flavours of soft drinks in spite of well-known flavours.  Price of the soft drinks should not exceed as most of the people with lower income group also consume soft drinks. pleasure/fun.  As most of the people purchase soft drinks for party occasions.  Packing must be done in colours corresponding to the colour of the soft drinks. higher price affects their buying behaviour. .

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