CHAPTER ONE

INTRODUCTION
1.1 Back ground of the study
Brand switching is a term in which customers changes brands. It is an easy concept to
understand but preventing it from happening to customers is an entirely different matter it
is widely known that acquiring new customers is generally more expensive than spending
to keep old ones. If a company wants to succeed in the business world then brand
switching is an essential concept that it should take seriously. If a company knows how to
keep its customers then it can have a higher chance of lowering its cost while maintaining
or increasing profit. Brand switching is also defined as the end of customers relationship
with specific brand and establishing new association with another brand (mouri2005).
Sometimes known as brand jumping is the process of choosing to switch from routine use
of one product or brand to steady usage of a different but similar product. much of the
Advertising process is aimed at encouraging brand switching among consumer thus
helping to grow market share for a given brand or set of brands(Malcolm 2021).the
severity of brand switching varies from industry to industry. It is normal for customers to
switch brand in commoditized industries based on who offers the best deal or
convenience at the time of purchase. it is less common for customers to switch brand in
brand or product led industries like fashion, electronics and the like because they have
ample opportunity to inspire brand loyalty and create emotional connection with their
target customers.

Brand switching occurs due to many reasons among them the most common are price,
quality, customers brand fatigue. In many cases a firm cannot attribute brand preference
entirely to customer satisfaction. This is especially true in the retail service industry,
where often the specific usage context is critical determinant of such preferences.
Moreover, beyond the influence of situation on brand preference, it is important to note
more specifically that changes in situations should be tied directly to changes in brand
choice over time that is to switching among brands.

Brand switching in Ethiopia in the case of brewery industry is a very though case
because of their number and the intense competition among the companies. Brand
switching also have psychological association, because brand switching is highly affected
by consumer behavior.

In the present competitive global market it has been seen that organization are
increasingly focusing on the retention of their existing customers. Thus, gaining
knowledge about customers switching behavior has substantively important for the
sustainability of any organization. Customer brand switching behavior is the process
exhibited by a customer, behaving differently to a particular brand and undergoes
alteration in the preference of the existing product or service.

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 Since consumer are the ultimate end user of any product or service the success of any
organizations depends upon the satisfaction of the customer, if not they will switch to
other brands. When any organization loses a customer they are not only losing future
earnings but also incurring the cost of finding new customers. Overtime loyal customers
become less price sensitive therefore, losing loyal customer means giving up high margin.
Considering the technological advancements and its easy access to every individual
customer are becoming intolerant and they can dissolve the relationship as soon as any
problem arises. Thus, customer retention is core concern of each and every
organization(Anju,2014).

Companies are always trying to build mutual relationships with their customers through
delivering better value and fulfilling their commitments, but due to competitive business
environment, its becoming difficult for marketers to do so.
1.2 Statement of the problem
Brand switching means a lot in business because it is the determinant of success and
failure when we came to brewery industry in the case of Ethiopia it becomes more serious
because the competition among the companies are very strong. When brand switching
occurs the company which lost customer will incur lose and the company which gain
customer will increase profit. The fundamental problem in predicting the customer
choices exist in the fact that brand switching decisions of the customers are slowly made
on the basis of several different criteria simultaneously which includes factors like
product quality, price promotion etc. Thus the problem has been more confounded in beer
industry where customers get attracted towards the competitors offer and features and
analyze the expectations of the customers regarding the beer industry (yimer, 2017).

Beer factory managers understanding of their customer is essential to stop them from
switching to another brand or company. According to Dibb and Medows (2001),
relationship marketing has been one of the best approaches that are probable to meet with
a lot of interest with respect to consumer brand switching behavior.

Thus preventing brand switching from happening is one of the major elements of a
company success. In the case of Heineken brewery the company has five portfolio so
there is high probability of brand switching. This research try to address the gap for brand
switching to occur and find possible solution for the case.

1.3 Research Questions

The main purpose of this research is to identify and answer the following question.

1. What are the factors affecting brand switching in Heineken brewery

2. What are the preventive methods taken by Heineken to prevent brand switching
3. What action does Heineken brewery take to switch customer from another brand

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1.4 objectives of the study
The objective of the study is classified into two:
1.4.1 General objectives
The main objective of this research is to assess what type of preventive action does Heineken
brewery takes to prevent brand switching from occurring.
1.4.2 Specific objectives
 To assess the preventive action taken by Heineken brewery
 To identify factors affecting brand switching
 To assess action taken by Heineken to switch customers from another brand

1.5 scope of the study

This study is limited to assess brand switching in the case of Heineken brewery in walia
beer portfolio. narrowing the scope of the study enable the researcher to have better result
of the study because of specific portfolio. The study focused from (2019-2020) brand
switching in walia beer.
1.6 significance of the study
The main significance of the study can be illustrated as the following

 It provide possible solution to prevent brand switching from occurring or creating

brand loyalty
 By providing solution for brand switching it contribute for the company success
 The provided solution will also be useful for the other portfolios under the
company
 The result of this study will have a practical significance to determine the factors
affecting consumer brand switching behavior in case of beer
 By identifying the factors affecting brand switching of beer and their relation to
customers it also help other beer factories.
 It also benefit advertisers of beer product by understanding the factors affecting
brand switching and their relation to customer behavior they can find way to
stimulate these factors.

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1.7 Research design and methodologies
1.7.1 Research design
In this research the researcher choose to follow descriptive research method because the
researcher has no control over the variable its job is reporting what was happened or is
happening. The main objective of descriptive research is describing the state of affairs as it
prevails at the time of the study.
1.7.2 Population, sample size and sample techniques
The population used for the research are users of beer and owners of bar. Among these
researcher will use 40 beer users and 10 bar owners.
1.7.3 Sampling techniques
The researcher use simple random sampling technique.
1.7.4 Type of data
The researcher uses primary data gathered from employee of the organization and customers
and secondary data collected from the company website, related study and other documents.

1.7.5 Data gathering tools

The primary data is gathered through interview and questionnaire. Interview was
conducted with the companies utilities specialist. open ended and close ended questioner
will be used to collect data from beer users. In addition to this the researcher uses the
company website, secondary data, study in brand switching in Ethiopia.

1.7.6 Method of data analysis

The data that was collected through questionnaire was analysed by using tables that are
uses for summarize the data and percentage method. Data obtained from interview and
documents is going to be narrated quantitatively and comparsion is made between the
questionnaires and interview findings.

1.8 Limitation of the study

The study was faced its own limitations, lack of cooperation and commitment of the
respondents to complete filling the questionnaires and interviews to devote their time to
provide the research with relevant information was seriously limited the outcome of the
research. Since the study is based on interviews and questionnaires.

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1.9 organization of the study
The research is classified into four chapters.
Chapter one:- background of the study, statement of the problem, objective of the
study, scope of the study, methodology of the study and organization of the study.
Chapter two:- review of related literatures
Chapter three:- data presentation, analyzing data and interpretation
Chapter four:- summary of findings, conclusion and recommendation