Soft Drink Consumption & Preferences among University level Students of Karachi

Methods Of Business Research Syed Haider Ali Shah

Submitted to: Sir Qazi Salman

Contents
Contents................................................................................................................. 2 Abstract.................................................................................................................. 3 Introduction............................................................................................................ 4 Research Objectives:...........................................................................................4 Literature Review................................................................................................... 5 Sold Drink Consumption Preferences Among University Level Students of Karachi ........................................................................................................................... 5 Method................................................................................................................... 7 Results & Findings..................................................................................................8 Discussion............................................................................................................ 14 Conclusions.......................................................................................................... 15 References........................................................................................................... 17 Appendices ..........................................................................................................18

Abstract
Soft Drinks have become an essential part of the daily routines of the people of Pakistan, especially the universities are occupied by the groups which are described as the high soft drink consumption groups. Karachi being a city having all sorts of communities represents the whole Pakistan. Soft drink market of Pakistan holds great potential but still any local manufacturer has been able to gain share of this lucrative market. This issue raises questions to be answered such as what are the consumption preferences, what factors influence the purchase decision of the consumer and this study focuses on answering these questions. A sample of 100 students was selected from different universities of Karachi through snowball sampling, the data was collected through the questionnaires and qualitative data analysis techniques were used to analyze the data. Analysis of the data has indicated that the highest consumption of soft drink is among the people between the age of 18-21, while Pepsi was the most preferred drink among the all the soft drinks while the most important factor for that determines the preference of consumers regarding the drink is taste another key finding of this study is that a consumer is most likely to select the soft drink of similar color as an alternative to his/her favorite. Lack of resources and time were major constraints to this study otherwise an observational study would have been a better method for such studies as suggested by the previous studies. The impact of price has not been considered as a factor that effects the purchase decision of the consumer. This research study can help students to research further in this domain.

Introduction
Companies & enterprises are entities that are responsible for growth and development of a nation therefore establishment and success of local businesses is of pivotal importance of the economy of any nation and Pakistan is no exception. Multinational benefit an economy to some extent but in the end the capital is transferred to the parent company therefore in order to grow the growth of local businesses and enterprises is important. I have observed that we Pakistanis are regular consumers of soft drinks and soft drinks are important part of our meals and family occasions which suggests that the soft drink market of Pakistan is a large market which at the moment is dominated by the global duo Pepsi Co and the Coca Cola company and all the profit from this market isnt really benefiting Pakistan. Complete absence of local manufactures in the market is not the case with the soft drink industry of Pakistan in fact many local products have tried to enter the market some products being of low quality, some being moderate and some being of very good quality. Some example of such products include the soft drink variants from gourmet and boomer which are good products and were able to create temporary hype in the market but failed to maintain a permanent share in the soft drink industry of Pakistan. Both the local products having good taste and equally priced as compared to Pepsi & Coke but still faced a failure which has led me to believe that there are other factors which are involved in the consumer preference of soft drinks and therefore a need exists to study this topic. For the purpose of this I have selected the age group of as (National Soft Drink Association, 2004) suggests that the highest level of soft drink consumption is between the age of 18-29 and I believe this age group can be easily accessed in Universities. Following are the research objectives and the research questions of this study:

Research Question 1: Which soft drinks are most preferred and which are
the least preferred among the university level student and what are the basis of preference?

Research Question 2: What is the consumption level of soft drinks and

what effects the level of consumption among university level of Karachi

Research Objectives:
1. To understand the reasons of preference of soft drinks among university level students of Karachi. 2. To study the brand loyalties that exist in this segment and the reasons of Brand loyalty. 3. To identify the consumption level of this segment and understand the reasons of consumption.

4. To understand the link between characteristics of a soft drink and its consumption. 5. To draw conclusion about the alternatives the consumer will take if his/her favorite soft drink is not available.

Literature Review
Sold Drink Consumption Preferences Among University Level Students of Karachi
Soft drink Industry of Pakistan seems to be growing day by day , marketing campaigns, Increasing Advertisements and availability of new product shows that Soft market in Pakistan is growing day by day and becoming more competitive. Soft drinks have become an important part of daily routines and meals of people living in Pakistan . (Business Monitor International, 2009) says that soft drink consumption in Pakistan will increase by 39% in 2004 which makes the Pakistani soft drink market attractive for International and local brands. Most of advertisement being teen and youth focused explains the interest of the manufacturers in this segment of the market, which is a good strategy as (National Soft Drink Association, 2004) concluded from their research that the highest level of soft drink consumption is found among people between the ages of 19-30 and Pakistan being a youth dominated population. Many research studies have been carried around the world out for the purpose of indentifying what are the factors associated with preference of a soft drink in different age group but there hasnt been any study which particularly focus on this issue in the environment of Pakistan. Different studies suggest that preference and consumption of a soft drink depends upon different factors such as taste, Advertisement, Packaging and color of the drink, reason for drinking, Family, Cultural influences and the ease of availability although there lacks a common factor which all the studies consider as the most strongest indicator of soft drink preferences. Some of the studies (Grim & Harnack, 2004), (Fahad & Saddath, 2010) seem to agree that taste is the most important variable that determines the preference of a soft drink and loyalty to a particular drink, (Gladwell, 2005) also agrees that taste is one of the most important factor that determines preference of a soft drink he proves his point by giving the example of Blind test Pepsi challenge which showed that consumer for that particular test preferred Pepsi but for long term consumption they still preferred Coca Cola due to the reason that it tasted better when it is consumed completely. (Gladwell, 2005) has further justified his point by

explaining the historical failure of New Coke which resulted in disaster for the Coca Cola company although people preferred Sweeter drink in the tests but in actual they were loyal to the taste of classic coke which is why new coke resulted in a complete failure. Thus there lies enough consensus among (Grim & Harnack, 2004) (Gladwell, 2005) & (Fahad & Saddath, 2010) that taste is the most important factor. However, according to (Gladwell, 2005) the color and packaging of the product also significantly effects the purchase decision , He discuses the case of two inexpensive brands of brandy which were E & J and Christian Brothers, repeated tests were conducted by the Christian Brothers to determine the reason of their declining market share although tests showed that people preferred the taste of Christian Brothers but still it was continuously losing its market share, In the end it was determined that the reason to this declining market share was the unattractive look of bottle of Christian Brothers. Hence (Gladwell, 2005)

strongly emphasize on the importance of packaging. However (Ries & Ries, 1999) hold a similar opinion that color and packaging of a product is responsible for creating the unique position of the brand and the product in the minds of consumer and changing the color or the packaging design can result in complete disaster (Haig, 2003) identifies one of the biggest brand failure that resulted due to this reason when in early 1994 crystal Pepsi failed badly in the market as people were not able to relate the clear look with the name of Pepsi as Pepsi was known as a Cola company. Experts such as (Gladwell, 2005) & (Haig, 2003) have very clearly defined the importance of packaging and design of a product. Another factor which many studies have considered important for the soft drink preferences is the impact of advertisement (Fahad & Saddath, 2010) (Umer, 2008) & (Grim & Harnack, 2004) agree to the point that advertisement has a significant effect on the preference and purchase of soft drink however all of them believe that it is not the most important factor of all. Finally there seems a group of researchers who believe that the most important factor in developing soft drink consumption preferences is the influence of family and Culture. It is believed by (Grim & Harnack, 2004) that the preference of soft drink of an individual is highly dependent upon the preferences of his/her parents and the soft drink which is mostly consumed in the house. (Neural Correlated of Behavioral preferences for culturally familiar drinks, 2004) believes that to a major extent preferences depends upon the culture and family preferences. It becomes extremely important to discuss that the data collection techniques used by the authors were different from each other as the experiments (Gladwell, 2005) (Haig, 2003) discussed were based on observational techniques while studies of (Fahad & Saddath, 2010) (Umer, 2008) were based upon survey method for data collection.

Different authors hold different views on this issue and there seems to be lack of consensus about what are the factors that are true determinants of soft drink consumption preferences as (Gladwell, 2005) (Grim & Harnack, 2004)& (Fahad & Saddath, 2010) are of the opinion that it all depends upon the taste of the drink although (Fahad & Saddath, 2010)& (Grim & Harnack, 2004) believe taste is most important factor while (Gladwell, 2005) believes that packaging and design significantly contribute to the development of preference for a particular soft drink which is also what (Ries & Ries, 1999) have proposed.

Method
The research has been conduction through the questionnaire method of Data collection through the internet, the questionnaires were delivered to the respondents through facebook. The questionnaires were developed using qualitative approach having questions in multiple choice, matrix and numeric rating scales. The sampling techniques used was snowball sampling in which some people were assigned the task of identifying respondents having the characteristics which were supposed to be in respondents .The characteristics for being a perfect respondent included being student of a university and having age between 18-29. The sample size which was selected for the purpose of this study was 100 respondents the main reason for selection of this sample was that it was a decent sample size considering the time, financial resources and the access. The questionnaires were delivered to the respondents through facebook and the responses were stored in an excel sheet which was being updated with each response. After completion of 100 responses the the data has been analyzed qualitatively and there it hasnt been subjected to any statistical tests due to unfamiliarity with the advance software used for data analysis. The time utilized for the collection of responses was three weeks in which 100 responses were completed, the instructions were written on the questionnaires to help the participants. The procedures applied in this study cannot be considered much reliable because of the unrepresentativeness of the data and insufficient skills of the researcher to analyze the data properly.

Results & Findings

To analyze the data obtained through the questionnaires the statistical test of correlation and factor analysis have been applied on the data. Following charts summarize the data and provide with different co-efficient to illustrate and conclude the results:

Correlations
Advertisem Brand_Ambassa Brand_Na Family_P Packagin Taste Taste Pearson Correlation Sig. (2-tailed) N Advertisement Pearson Correlation Sig. (2-tailed) N Brand_Ambassado Pearson r Correlation Sig. (2-tailed) N Brand_Name Pearson Correlation Sig. (2-tailed) N Family_Preference Pearson Correlation Sig. (2-tailed) N Packaging Pearson Correlation Sig. (2-tailed) N Consumption Pearson Correlation Sig. (2-tailed) N .947 97 .125 94 .459 95 .091 97 .354 97 .849 98 102 .797 96 -.007 .002 93 -.159 .001 94 -.077 .002 96 -.172 .035 96 -.095 .849 98 98 -.019 1 .195 96 .027 .168 93 .313** .052 94 .327** .002 96 .316** 97 .216* .035 .354 96 97 1 -.019 .719 96 -.133 .000 93 .144 .000 94 .201 97 .319** .002 96 1 .002 .091 96 97 .216* -.095 .816 94 .037 .000 91 .440** 95 .355** .000 94 1 .052 94 .319** .001 .459 94 95 .316** -.172 .488 93 -.024 94 .502** .000 91 1 .000 93 .355** .168 93 .201 .002 .125 93 94 .327** -.077 97 .073 .488 93 1 .816 94 .502** .719 96 .440** .195 96 .144 .797 .947 96 97 .313** -.159 1 ent .073 dor -.024 me .037 reference -.133 g Consumption .027 -.007

Pref Frequencies Responses N $Prefa Taste Advertisement Brand_Ambassador Brand_Name Family_Preference Packaging Total 63 6 8 19 5 16 117 Percent 53.8% 5.1% 6.8% 16.2% 4.3% 13.7% 100.0% Percent of Cases 86.3% 8.2% 11.0% 26.0% 6.8% 21.9% 160.3%

From the graphs and the tables following points can be observed :

The most preferred soft drink among the university level students is Pepsi & Coke. On average students drinks soft drinks 5 times a week. The major reason of consumption of the soft drinks is that it is used as a refreshment and to complement product however it is not a good option to satisfy thirst.

Taste is the most important factor for the consumers and consumers give greater consideration to taste as compared to the other factors. Brand name is the factor which is given the consideration to evaluate a soft drink and Packaging of the product feature which is of significant importance to the consumers. Factors such as family preference, brand ambassador and advertisement are given least consideration by the consumers.

Discussion
This study provides significant understanding of the preferences and loyalties of the soft drink market for the highest consumption of the group. The fact that no such study has been carried out specifically for the Pakistani Soft drink market further adds to the importance of this report. However the results cannot be compared to some of the earlier studies as they utilized observational techniques which are considered to give better results for this kind of projects. But with all the constrains which includes time, financial as well as narrow skill set I believe that I have worked well to answer the research question and also to compare the importance given to various product features in university level students here in

Pakistan with other similar studies from different part of the world. One of the strength of this study is that the all the participants had the characteristics required to be a true respondent. Lack of accurate statistical evidence is a major downfall of the project as the desired data was obtained. However observational methods would have been much more interesting with much more credible results. The results show that there is a difference in the extent to which different product features are given consideration as compared to the other earlier studies, taste undoubtedly is the most important factor but advertisement and brand ambassadors are not given great importance to make the final decision regarding the product in fact packaging and brand name are the factors that a consumer considers instead of advertisements and brand ambassador. As the report was started with an intention to provide local manufacturers with an insight of the market therefore it becomes it is also important to respond to continuous local brand failures. It is interesting that hardcore loyalties arent present in the soft drink market as a great importance is given to the ease of availability and most respondents havent shown any hesitation in going for a different product other than the desired one. It is observed that soft drinks having similar color and flavor served as perfect alternatives to each other such as a person whose favorite soft drink is Pepsi wouldnt hesitate to take coke if Pepsi is not available, 80% of the people who selected Pepsi as their favorite answered that they would go for Coke if Pepsi is unavailable and similar results can be seen for 7up and Sprite and Fanta and Marinda as well. Therefore in order to capture the market it is necessary for the manufacturers to develop products that resemble the products of there international competitors and there is a clear indication that soft drinks are used by the people to complement food therefore it would be a good option for the local manufacturers to team up with restaurants and hotels to introduce the product at a broader level to the target market.

Conclusions
The objective of the report was to determine that what are the most preferred drinks, what are the alternative preferences of the consumers, what are the factors that a consumer takes in consideration to evaluate a soft drink and what are the reasons of consumption among the university students of Karachi and this

project clearly answers the research questions. From this study the following conclusions can be drawn regarding the questions Pepsi and coke are the most favorite soft drinks of the university level students, the most important factors for consumers are the taste, brand name and the packaging of the product while soft drinks are usually consumed to complement food and as a refreshment. Except for the above mentioned factors another factor has been seen to have impact on the final decision of the consumer this factor is ease of availability. This shows that in Pakistan different factors are taken into consideration as compared to the western world. Lower ranked factors such as advertisement and brand ambassador can also be associated with the reason that celebrity culture is not very popular in Pakistan and therefore are not as much celebrities that people follow therefore are not concerned with the brand ambassador. It is also observed that the soft drink companies spend a lot of money on the advertisement of their products which should be reconsidered as people arent much dependent upon the advertisement. New brands however are required to spend significant amount of money on advertisement to make people aware of their presence but should mainly focus of developing relationship with hotels and restaurants to present their products along with the food. Price is a factor that has been completely neglected during the study primarily because leading products are currently being offered at the same price but price is an important factor and considering the great increase in the prices of soft drink in the last 5 years it is possible that a product with good taste, having some resemblance with the current market leaders if offered at a slightly lowered price can create new opportunities for the local manufacturer and can occupy a noteworthy share of the market. Therefore it can be suggested to the local manufacturers to this product mix in mind when developing the new products i.e. good taste, resemblance with market leaders and a lower price.

References
1. A Comparitive Study On Consumer Preference On Soft Drinks & Consumer Awareness Regarding The Adverse Effect Of Soft Drinks On Health Authors: Moh Ammed Fahd, Moh Ammed Sadath Mes College Of Engeneering Http://Www.Scribd.Com/Doc/18425173/A-Comparitive-Study-On-ConsumerPreference-And-Hazards-Of-Soft-Drinks 2. Marketing Communication Of Pepsi & Coca Cola In Pakistan Author: Muhammad Kashif Omer Malik Malardalens University Http://Www.Google.Com.Pk/Url? Sa=T&Rct=J&Q=&Esrc=S&Frm=1&Source=Web&Cd=1&Ved=0ce8qfjaa&Url=Http %3a%2f%2fmdh.Diva-Portal.Org%2fsmash%2fget %2fdiva2%3a37418%2ffulltext01&Ei=Cm7etAua8xqrqe3lamabw&Usg=Afqjcngcudos7u6ajbchpcjohmqbh3dcow&Sig2=Dbpddyl _7gv9n8wjdg5ydg 3. Soft Drink Consumption: The Frightening Statistics And Associated Health Risks! Http://Www.Everyday-Wisdom.Com/Soft-Drink-Consumption.Html

4. Principles Of Marketing By Philip Kotler, 2nd Edition(1999) Http://Www.4shared.Com/Office/2byvcur9/Philip_Kotler_-_Principles_Of_.Html? Cau2=403tnull 5. Research Methods For Business Students(2009) By Saunder, Thornhill & Lewis Http://Ebooks.Narotama.Ac.Id/Files/Research%20methods%20for%20business %20students%20(5th%20edition)/Cover%20%26%20table%20of%20contents %20-%20research%20methods%20for%20business%20students%20(5th %20edition).Pdf

6. Blink (2005) By Malcom Gladwell Http://Www.4shared.Net/Download/B1cdvxeildk1g8mbcvmgjk/MalcomGladwell-Blink.Html

7. 22 Immutable Laws Of Branding (1999) By Al Ries & Laura Ries

Http://Www.Slideshare.Net/Sjhus/22-Immutable-Laws-Of-Branding

8. The Truth About The 100 Biggest Brand Failures(2003) By Matt Haig Http://Www.Slideshare.Net/Thakkarvijayrajiv/Brand-Failures-The-Truth-AboutThe-100-Biggest-Branding-Mistakes-Of-All-Time

Appendices

Soft Drink Consumption Preferences

1. Your Age (Please tick any one of the following)

18-21 22-24 24-27 27 or more

2. Gender

Male Female

3. Which soft drink do you usually drink? ( Please tick any one of the following)

Pepsi Coke 7Up Sprite Fanta Marinda Dew

4. How many time do you have soft drink in a week? ( Please tick any one of the following)

2-4 times 4-6 times 6-8 times 8 or more times

5. Which soft drink container do you usually prefer? ( Please tick any one of the following)

250 ml 300 ml 500 ml

6. Rank the following cold drinks on the basis of your preference. Where 1 means most preferred and 7 being least preferred.
Dew.( Marinda...( Coke( Sprite.( ) ) ) ) Pepsi.( 7up( Fanta....( ) ) )

7. What drives you to consume a soft drink? ( Please tick any one option for each reason)

Reasons

Strongly Disagree

Disagree

Neither agree nor disagree

Agree

Strongly Agree

It acts as a refreshment It satisfies my thirst It makes me look good Food tastes better

8. How important are the following factors for you in order to consume a soft drink. ( Please tick any one option for each factor) Factors Taste Advertisement Brand Ambassador Brand Name Family Preference Packaging Ease of Availability Very Less Less Importan Importan t t Not Importan t Importan t Very Importan t

Thank You For Completing the Questionnaire