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CONSUMER PREFERENCES IN DIFFERENT BRAND

OF COLD DRINKS

(A case study of Birendranagar Municipality, surkhet)

A Project Proposal

Submitted By
Anu Acharya
T.U. Redg. No:
Symbol No:
Siddhapaila Campus

Submitted To

The Faculty of Management

Tribhuvan University

Kathmandu

In Partial Fulfillment of the Requirements for the

Bachelor Degree In Business Studies (BBS)

Birendranagar, Surkhet

2020
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CHAPTER I

INTRODUCTION

1.1 Background of the Study

Nepal is one of the smallest nations in Asia where about 74 precent of the total
population of nation directly or indirectly depends on agriculture for their livelihood.
Due to the rapid globalization in business, Nepal is also shifting gradually from
agricultural to industrial sector for sustaining its economy. Many industries are being
established and they have become the main streams of contemporary economic life
and business life. It is considered as the global symbol of economic growth and
prosperity.

Research area selected for our study is Birendranagar, the mid western Nepal situated
on the bank of Bheri and Karnali River. It is one of the famous commercial town of
Nepal. Being the most populated area, it may prove to be the most suitable area for
the purpose of our research. Since, most of the modern Hotels restaurants and
bakeries are found in Birendranagar. The consumption of cold drinks is immense
here. As such the survey held in the process of our research reveal the true
characteristics of the cold drinks available in the markets. At the same time the results
derived by the research are appreciable to the whole country. This study includes
almost all the brands of cold drinks (i.e. coke, fanta, lemon fanta, sprite, pepsi,
mirinda, frooti etc). Among the industries that produce cold drinks, bottlers Nepal is
in direct competition with Pepsi-cola products. Coca-cola almost captures 80% of the
market share. Beside these two brands, there are some other brands of cold drinks like
frooti, Rio, and real juice selling cold drink in Barahathwa. These entire products, also
to some extend compete with some Chinese cold drinks available in the market. But
these Chinese cold drinks are not in significant amount for our research purpose.
Therefore our study focuses in the product of coke & pepsi.

In general, marketing means the activity of the company to deliver its products from
the place of production to the place of consumption. It means that marketing is a total
system of business activity designed to place, price, promote and distribute the
products to the target markets in order to achieve organization objective and satisfying
consumers’ desire. Marketing helps organization to find out the consumers
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preference. It keep it sustain till the long run. The success or failure of any new
product in the market depends on consumers’ needs and satisfaction. Any product to
be success fully marketed, need many things more than the core quality immanent
into it. Core quality or a core product alone is not sufficient for successful marketing.
Therefore the products should be presented through proper branding, packaging and
labeling. Almost all of the products today have got brand, that is to say brand is
prominent feature of almost all products. It is essential as it promise to consistently
deliver a specific set of features, benefit services to the buyers. The best brand
conveys a warranty of quality.

1.2 Profile of Cold Drink Industry

Industrial activities are gradually increasing in the country. Along with this beverage
industries are also increasing rapidly as its demand is rising up day by day. To fulfill
this demand of beverages, the number of Beverage Company has also significantly
increased within the last few years and this trend is in increasing stage. This
development of the industrial sector has provided varieties of cold drinks.

At present more than 30 brands of cold drinks are available in market. It is observed
that cold drink firms are battling hard to outperform the competition and to secure the
market position.

Now days, consumers have much alternative choice to select the brand so the
manufactures are facing very tough competition to sell their products. At present the
consumption of cold drinks is increasing tremendously and contributing to the
national income.

In this backdrop, how is the market position of these concerned beverages in the view
of consumer preference is the major concern of the study. Addressing this concern the
study tries to find out the answers to the following questions.

1.3 Objective of the Study

The concept of brand preference is entirely new practice in Nepal. There are so many
fields and research and track out the finding on the practice of brand preference. The
objectives of the present study are presented below:
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1. To understand the consumer preferences in various brand of cold drinks.

2. To identify the affecting factors for selection of cold drinks.
3. To measure the brand loyalty of consumer with reference to different brands of
beverages.
4. To identify the effective advertising media for beverages and measure their
impact on the consumer.

1.4 Rationale

Companies now realize that their brands are an essential asset; even though they do
not appear on the balance sheet of the company. To consider a brand as an asset has
important implication for management. The main idea is to capitalize on a few brands.
They have to be constantly nourished by new products in order to maintaining their
market share. To get the most from them it is necessary to concentrate all one’s efforts
over the long term on a few viable brands to increase their potential and value several
brands which were part of our youth and still exist in our conscious awareness will
soon disappear (Kapferer, 1997). The future lies in the brands of those companies
which understand brand and are able to instill this understanding throughout their
organization. Even if a company’s culture is internally focused, what the brand stands
for remind us of the competitive priorities and the need for continuous improvement
in serving the market by the certain of new products. To understand the brands
requires a true brand professional who knows everything about it is able to integrate
all of its effects, Dynamism and poses an intimate relationship with it. This is even
more necessary when there is ha high staff turnover and brand managers and
constantly changing.

It is good to have integrated the corporate culture, but it is if the brand manager is
immerses in the meaning of brand of which he is in charge. It is not just the marketing
managers who have to understand what a brand stands for. Everybody, throughout the
organization must consider the brand in a professional life; become the active
supporter of it and play an essential part in its functioning. Thus, all those who are
involved in the production process in factories in laboratories and those who are
responsible for the maintenance and growth of their brands have a part to play, the
people involved at the other end of chain, both nationally and internationally, all the
way to the shop floor assistant and the after sales service staff who have an influence
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on the brands performance will after the goods are sold. Must also be involved
(Kepferer, 1997).

Knowledge of the brand preference helps to know the consumers attitudes towards the
different brands (products) and this understanding in turn shed light on different
aspects such as effectiveness of branding policy advertisement policy. It also helps to
collect consumer’s response to the price and availability of the products, consumers’
perception of the total image of the manufacturer.

Brand preference is one way of segmenting a market. On the basis of brand

preference we can segment the market as loyal and non-loyal. If the consumers prefer
the brand and use the product time and again they can be identified as loyal customers
and if they do not prefer the brand they can be identified as non-loyal consumer
market. Brand preference gives sellers or marketer protection from competition and
greater control in planning marketing mix.

In conclusion, this study will help the entire related field like distributor, retailers as
well as consumers. The study aim is to find out the proper attitude regarding the brand
and the effect of the promotional activities for the brand.

1.5 Literature Review

1.5 Review

A dissertation titled “A study on brand loyalty” carried out by Mr. Yogush Pant in
1993 on the following objectives:

 To examine brand awareness of the Nepalese consumer.

 To find out whether Nepalese consumer are brand loyal, i.e. what
percentage of Nepalese consumer are brand-loyal?

 To identify the correlation of brand loyalty.

 To recommend measured helpful or important for developing marketing

strategies and for conducting further researches on brand loyalty.

The major findings of the studies were

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 In each of products selected for this study at least 65 percent consumers are
found to have knowledge of almost all alternative brands available in the
market. Thus, brand awareness of the Nepalese consumers is found to be high.

 A positive association is found between consumers’ income and brand loyalty

in all the products included in this study except shaving blade. In shaving
blade, however, no association is seen between income and brand loyalty.

 Brand loyalty has positive association with store loyalty. In all the products
except soft drink it is found that out the total respondents showing high degree
of store loyalty, at least 85% respondents are found relationship with store
loyalty.

 There is no association between number of brands available and brand loyalty.

It is found that increase or decrease in number of brands available does not
increase or decrease the number of brand-loyal consumers.

 Majority of the Nepalese consumers are found loyal. The following table
reveals the whole findings on brand loyalty of the Nepalese consumer.

 Studies on brand loyalty should be made on continuous basis. Most of the

consumer showing brand loyalty indicates towards hidden assets of the
manufacturers or seller. They should have knowledge of this valuable asset. It
will give them effective guideline for developing successful marketing
strategies.

A dissertation title “ A comparative study on communication effect on advertising and

brand preference: A case of Cold Drinks", conducted by L.P. Baral in 1966, has
focused on the relation between the advertising and brand preference. The main
objectives of the study were as follows:-

 To examine the effectiveness of advertising of cold drinks

 To examine the popular media of advertising.

 To find the strength and weakness if advertisement of cold drinks.

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The major findings of the study were:

 There is no significant different between cold drinks with regard to the quality
of advertisement.

 Company should measure the effectiveness of expenditure which is spent on

advertising and other promotional tools.

 Most of the consumers are informed of the brand by advertisements and there
is high association between the qualities of advertisements.

 Radio TV and Newspapers are the major media for cold drinks.

On the basis of the field survey and subsequent analysis, the study has found
following. All wholesalers are under the distributorship of Chitwan Supplier the
single distributors of ‘Coca Cola in Narayangarh. Wholesalers prefer the brands of
cold drinks on the basis of sales volume. On the basis of sales volume, ‘Coca cola
stands at the top and Dewstands in second. Few wholesalers have expressed the view
that some retailers complain over the price of cold drinks. After introduction of dew
in the market 90% of wholesalers expressed that it is satisfactory and rest of the
wholesalers expressed that the quality is not satisfactory regarding the distribution of
different brands by their quality, Coca Cola is the best quality cold drinks and Dew
was in second position.

This study concluded that the use of cold drinks has become a general consumption
phenomenon in Narayangarh. There are various brands of cold drinks available in the
market and market of cold drinks has turned to be competitive in recent years. The
company does not have effective and reliable channel to collect information from
wholesalers, distributors and consumer.

The study has recommended that an improvement in test and quality and fixing
reasonable price can be helpful measure to increase the volume of sales in the market.
The company should increase the incentive to the wholesalers/distributors so as to
motivate and encourage them to their transactions. The company should diversity its
market by penetrating in to potential rural areas. It should establish efficient
distribution networks and provide reasonable amount of commission at each level.
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1.6 Methods

Research methodology is a way to systematically solve the research problem. It is an

art of scientific inquiry. It generates new knowledge and concepts systematic,
controlled, empirical and critical investigation of hypothetical propositions about the
presumed relations among natural phenomena. It is a systematic careful inquiry or
investigation done to discover new information or relationship and to expand verify
existing knowledge for some specific purpose. “Research methodology is an
organized systematic data based critical scientific inquiry or investigation into specific
problem undertaken with the objective of finding answer or solution it,"
(SekaranV.1992)

The objective of this study is to examine the brand preference of cold drinks in
Birendranagar municipality, ward no 6. Beside this basic objectives of this study has
also aimed at identifying the factors associated with preference and examine the brand
loyalty of the Nepalese consumer studying brand preference is very much necessary
to keep face with the increasing competition in the market. In this competitive modern
business world research on consumer behavior is consider as most essential activity to
be carried on to become a successful marketer. In this study, the necessary and
relevant data have been collected from the sample consumer. To achieve this
objective, the study follows a research methodology, which has been described as the
following:

1.6.1 Research Design

A plan of study or blue print for study that presents a series of guide posts to enable
the researcher to progress in the right direction in order to achieve the goal is called a
research design or strategy.

After exploring the sources of information about different aspects of marketing of

cold drinks, primary information were generated through interview with consumers
who use cold drinks. This research is conducted under qualitative research design. A
set of questionnaire have been administered in order to generate data and other
information related to the study. Collected data are analyzed through descriptive as
well analytical research tools and techniques.
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1.6.2 Population and Sample

As the total population of cold drinks users of presently available brand is hard to find
in number the study takes the population as the total consumer of cold drinks in
Birendranagar municipality. This study included 150 respondents using purposive
sampling method, based in Birendranagar municipality, ward no 6. Though the
sample size is very small in comparison to the total population, sufficient efforts have
been made to make the sample representative by including consumers from the
different professions, age group, and sex.

1.6.3 Nature and Sources of data

The data used in this study are mainly primary in nature, which are collected directly
from the respondents. The respondents for this study are consumers of cold drinks in
Birendranagar municipality, ward no 6. The questionnaires were distributed to the 150
respondents of Birendranagar municipality for collecting necessary information. The
questionnaire used in this study is presented in the Appendix1.

The data collected are through the questionnaire, from where we can get accurate and
specific data in which the study is focused. Apart from it, some relevant secondary
data are also used for the study. Different cold drinks companies, local newspapers,
magazines, publications, different published and unpublished reports, bulletins,
journals etc are used as secondary data.

1.6..4 Data Collection Procedure

The data have been collected through the field survey of Birendranagar municipality.
A set of questionnaire was developed for the purpose of collecting data from the
respondents. The questionnaires were served through personal contact in which the
respondents were requested to fill up. The researcher personally visited to take
response of the consumers who were chosen from different professions, age group,
education background and sex. The closed questionnaire includes objective questions.
A few additional questions were asked for snooping.
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1.6.5 Data processing, Tabulation and Analysis

The raw data collected through the questionnaire are thoroughly checked, compiled
and presented in appropriate to facilitate analysis and interpretation. There are many
analytical tools to analyze the data. In this research, researcher used MS-Excel to
tabulate the collected data and presented it in different statistical tools like bar
diagrams, percentage and pie-chart that have been used to make the information easy
and understandable.

1.7 Limitations

This study has taken under partially fulfillment of requirement of Bachelor's Degree
in Business Studies. It aims to find out brand preference of cold drinks in only
Surkhet valley on the basis of consumers preference towards the different brands.
This survey is conducted by considering the time constraint. Sample size of 150
respondents may not be adequate. It is difficult to be precise about the most
appropriate sample size for conducting such research. Due to subjectivity and beliefs
of consumers, some answers of the questionnaire may differ from the reality. Also
due to lack of available literature on customer preference of beverages and lack of
cooperation from the respondents affect the validity of the data.

In spite of fulfillment of objective, this study has the following limitations, which are
as follow:

a.This study is limited inside certain areas of Birendranagar municipality. So it

may not represent overall consumers’ view of the entire city.

b. Only four brands of cold drinks such as Fanta, Dew, Coca Cola and Sprite
are selected for the study.

c.Sample size is limited (within 150 respondents representing consumers only)

d. Most of data used is these studies have been obtained through closed
questionnaire interviews, so most of data are primary based on sample
survey.
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APPENDIX
Questionnaire sheet to the respondents
Consumer Preferences in Different brands of Cold Drinks
Demographic profile
Name: Address:
Age: Below 15 years 15 to 30 years 30 years and above
Sex: Male Female:
Profession: Student Jobholder Housewives
Others ……... (Specify)
Please tick ( ) mark the correct option.
1. Do you consume cold drinks?
a) yes ( ) b) No ( )
2. If yes, how often?
a) Very frequently ( ) b) frequently ( )
c) Occasionally () d) Rarely ()
3. Why do you like cold drinks?
a) Easy to consume ( ) b) Easily available ( )
c) Refreshing ( ) d) others……….
4. Since when have you started consuming cold drinks?
a) Recently ( ) b) Since a year ( )
c) Since 2 years ( ) d) more than 2 yrs ( )
5. Which brand of cold drinks do you refer more?
a) Fanta ( ) b) Dew () c)Coca Cola ( )
d) Sprite( ) e) others ( )
6. Do you decide which cold drinks to consume before you go to shop?
a) yes ( ) b) No ( )
7. Which factors do you consider while consuming cold drinks?
a) Price ( ) b) Quality () c) Taste ( )
d) Gift/prize ( ) e) Availability ( ) f) others
8. In general where do you like to enjoy consuming cod drinks?
a) Home ( ) b) School/College ( ) c) Restaurant ( )
d) Traveling/Journey ( ) e) Others …………….
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9. Have you heard/seen advertisement of cold drinks?

a) Yes ( ) b) No ( )
10. If yes, in which media have you found more about it?
a) Radio ( ) b) Television ( ) c) Hoarding board ( )
d) Magazine/paper ( ) e) others……………..
11. How do you perceive the advertisement of cold drinks?
a) Informative ( ) b) Entertainment ( ) c) Attractive ( )
d) Just for notice ( ) e) others………
13. What would you do if your preferred brands of cold drinks were not available in
market?
a) Wait for the prefer brand ( ) b) Buy the second preferred one ( )
c) Buy any available one ()
14. Rank the following brands from 1-5 as your preference assuming 1 for the best
and 5 for the least considering the taste of beverages
a) Fanta ( ) b) Dew () c)Coca Cola ( )
d) Sprite( ) e) others ( )
15. Rank the following brands from 1-5 as your preference assuming 1 for the best
and 5 for the least considering the quality of beverages
a) Fanta ( ) b) Dew () c)Coca Cola ( )
d) Sprite( ) e) others ( )
16. Rank the following brands from 1-5 as your preference assuming 1 for the best
and 5 for the least considering the price of beverages.
a) Fanta ( ) b) Dew () c)Coca Cola ( )
d) Sprite( ) e) others ( )
17. Rank the following brands from 1-5 as your preference assuming 1 for the best
and 5 for the least considering overall characteristics
a) Fanta ( ) b) Dew ( ) c)Coca Cola ( )
d) Sprite( ) e) others ( )
18. What do you like to suggest the beverages for further improvement?
a. Improve the quality ( )
b. Reduce the price ( )
c. Increase the prize ( )
d. Fascinating advertises ( )
e. Conduct more promotional activities ( )
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f. Other ………………………….
Thank you