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

SOFT DRINKS
A soft drink (also called soda, pop, coke, soda pop, fizzy drink, tonic, or carbonated beverage) is a non-alcoholic beverage that typically contains water (often, but not always carbonated water), a sweetener, and a flavoring agent. The sweetener may be sugar, highfructose corn syrup, or a sugar substitute (in the case of diet drinks).Examples of beverages not considered to be soft drinks are: pure juice, hot chocolate, tea, coffee, milk, and milkshakes. Beverages like Gatorade and Powerade may meet the definition of a soft drink but are usually called sports drinks. Red Bull (and variations) also may meet the definition, but are usually called energy drinks. Soft drinks are called "soft" in contrast to "hard drinks" (alcoholic beverages). Small amounts of alcohol may be present in a soft drink, but the alcohol content must be less than 0.5% of the total volume, if the drink is to be considered non-alcoholic. Soft drinks may be served chilled or at room temperature. They are rarely heated. HISTORY The first marketed soft drinks in the Western world appeared in the 17th century. They were made from water and lemon juice sweetened with honey. In 1676, the Compagnie des Limonadiers of Paris was granted a monopoly for the sale of lemonade soft drinks. Vendors carried tanks of lemonade on their backs and dispensed cups of the soft drink to thirsty Parisians.

Carbonated drinks
In the late 17th century, scientists made important progress in replicating naturally carbonated mineral waters. In 1767, Englishman Joseph Priestley first discovered a method of infusing water with carbon dioxide to make carbonated water which has 3.4 mg in the drink when he suspended a bowl of distilled water above a beer vat at a local brewery in Leeds, England. His invention of carbonated water (also known as soda water) is the major and defining component of most soft drinks.

Phosphate soda
A variant of soda in the United States called "phosphate soda" appeared in the late 1870s. It became one of the most popular soda fountain drinks from 1900 through the 1930s, with the lemon or orange phosphate being the most basic. The drink consists of 1 US fl oz (30 ml) fruit syrup, 1/2 teaspoon of phosphoric acid, and enough carbonated water and ice to fill a glass. This drink was commonly served in pharmacies.

Soda fountain pioneers

Artificial mineral waters, usually called "soda water", and the soda fountain made the biggest splash in the United States. Beginning in 1806, Yale chemistry professor Benjamin Silliman sold soda waters in New Haven, Connecticut. He used a Nooth apparatus to produce his waters. Businessmen in Philadelphia and New York City also began selling soda water in the early 19th century. In the 1830s, John Matthews of New York City and John Lippincott of Philadelphia began manufacturing soda fountains. Both men were successful and built large factories for fabricating fountains.

Soft drink bottling industry

Over 1,500 U.S. patents were filed for either a cork, cap, or lid for the carbonated drink bottle tops during the early days of the bottling industry. Carbonated drink bottles are under great pressure from the gas. Inventors were trying to find the best way to prevent the carbon dioxide or bubbles from escaping. In 1892, the "Crown Cork Bottle Seal" was patented by William Painter, a Baltimore, Maryland machine shop operator. It was the first very successful method of keeping the bubbles in the bottle. Automatic production of glass bottles In 1899, the first patent was issued for a glass-blowing machine for the automatic production of glass bottles. Earlier glass bottles had all been hand-blown. Four years later, the new bottle-blowing machine was in operation. It was first operated by the inventor, Michael

Owens, an employee of Libby Glass Company. Within a few years, glass bottle production increased from 1,400 bottles a day to about 58,000 bottles a day. Home-Paks and vending machines During the 1920s, "Home-Paks" were invented. "Home-Paks" are the familiar six-pack cartons made from cardboard. Vending machines also began to appear in the 1920s. Since then, soft drink vending machines have become increasingly popular. Both hot and cold drinks are sold in these self-service machines throughout the world.

Production
Soft drink production
Soft drinks are made by mixing dry ingredients and/or fresh ingredients (for example, lemons, oranges, etc.) with water. Production of soft drinks can be done at factories or at home. Soft drinks can be made at home by mixing either a syrup or dry ingredients with carbonated water. Carbonated water is made using a home carbonation system or by dropping dry ice into water. Syrups are commercially sold by companies such as Soda-Club. Ingredient quality Of most importance is that the ingredient meets the agreed specification on all major parameters. This is not only the functional parameter (in other words, the level of the major constituent), but the level of impurities, the microbiological status, and physical parameters such as color, particle size, etc. Potential alcohol content A report in October 2006 demonstrated that some soft drinks contain measurable amounts of alcohol. In some older preparations, this resulted from natural fermentation used to build the carbonation. In the United States, soft drinks (as well as other beverages such as non-

alcoholic beer) are allowed by law to contain up to 0.5% alcohol by volume. Modern drinks introduce carbon dioxide for carbonation, but there is some speculation that alcohol might result from fermentation of sugars in an unsterile environment. 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.

The Coca-Cola Company is an American multinational beverage corporation and manufacturer, retailer and marketer of non-alcoholic beverage concentrates and syrups. The company is best known for its flagship product Coca-Cola, invented in 1886 by pharmacist John Stith Pemberton in Columbus, Georgia. The Coca-Cola formula and brand was bought in 1889 by Asa Candler who incorporated The Coca-Cola Company in 1892. Besides its namesake Coca-Cola beverage, Coca-Cola currently offers more than 500 brands in over 200 countries or territories and serves over 1.7 billion servings each day.

The Coca-Cola Company re-entered India through its wholly owned subsidiary, 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. Since then its operations have grown rapidly through a model that supports bottling operations, both company owned as well as locally owned and includes over 7,000 Indian distributors and more than 1.3 million retailers. Today, our brands are the leading brands in most beverage segments. The Coca-Cola Companys brands in India include Coca-Cola, Fanta Orange, Fanta Apple, Limca, Sprite, Thums Up, Burn, Kinley, Maaza, Maaza Milky Delite, Minute Maid Pulpy Orange, Minute Maid Nimbu Fresh and Nestea Iced tea, the Georgia Gold range of teas and coffees and Vitingo (a beverage fortified with micro-nutrients). In India, 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, a Company-owned bottling entity, namely, Hindustan Coca-Cola Beverages Pvt Ltd; thirteen authorized bottling partners of The CocaCola Company, who are authorized to prepare, package, sell and distribute beverages under certain specified trademarks of The Coca-Cola Company; and an extensive distribution system comprising of our customers, distributors and retailers. 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.These authorized bottlers independently develop local markets and distribute beverages to grocers, small retailers, supermarkets, restaurants and numerous other businesses. In turn, these customers make our beverages available to consumers across India.

The Coca-Cola Company has invested nearly USD 1.1 billion in its operations in India since its re-entry back into India in 1992. The Coca-Cola system in India directly employs over 25,000 people including those on contract. The system has created indirect employment for more than 1,50,000 people in related industries through its vast procurement, supply and distribution system. 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. The beverage industry is a major driver of economic growth. 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 2.1. This means that if one unit of output of beverage is increased, the direct and indirect effect on the economy will be twice of that. In terms of employment, the NCAER study notes that an extra production of 1000 cases generates an extra employment of 410 man days. As a Company, our products are an integral part of the micro economy particularly in small towns and villages, contributing to creation of jobs and growth in GDP. Coca-Cola in India is amongst the largest domestic buyers of certain agricultural products. As an industry which has strong backward and forward linkages, our operations catalysis growth in demand for products like glass, plastic, refrigeration, transportation, and Industrial and agricultural products. Our operations also lead to incremental growth for enterprises engaged in post production activities like merchandising, marketing and sales. In addition, we share best practices and technological advancements with our suppliers, vendors and allied industries which often lead to improvement in the overall standards of quality across industries. The Coca-Cola Company has always placed high value on good citizenship. Our basic proposition entails that our Companys business should refresh the market; enrich the workplace; protect and preserve the environment; and strengthen the community. We leverage our unique strengths to actively support and respond to local needs -- be it the need for education, health, water or nutrition. We have used our distribution network for disaster relief, our marketing prowess to raise awareness on issues such as PET recycling, and our presence in communities to improve access to education and potable water. The Coca-Cola India Foundation is now taking forward in the community at large, projects and programs of social relevance to carry forward the message of inclusive growth and development.

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

A third of PepsiCo India's portfolio today comprises healthier products: PepsiCos portfolio reflects its commitment to nourish consumers with a diverse range of fun and healthy products, making the healthful choice an easier choice. As PepsiCo grows, the portfolio transformation will continue with a systematic plan to reduce added sugar, sodium and saturated fats in its products. Today, the portfolio includes several healthier treats like Quaker Oats, Tropicana juices, rehydrator Gatorade, Pepsi Max and Cheetos Whoosh. PepsiCo was the first in India to introduce the use of healthier oils for its snacks -- Lays Potato chips, Kurkure and Cheetos. Global leader in water conservation: In 2009, PepsiCo India achieved a significant milestone, by becoming the first business in the PepsiCo system to achieve Positive Water Balance (PWB). This means that it replenishes more water than it consumes in its manufacturing operations. This has been validated by Deloitte Consulting. 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%. In 2010, PepsiCo India saved 10.1 billion litres of water through various initiatives. For water related environment initiatives, PepsiCo India has received numerous awards such as CII National award for water management, Water Digest award for water practices and Golden Peacock award for water conservation among others. Care for the environment: Following its success in water conservation, the company is now focused on reducing its carbon footprint. Nearly 30% of its energy is today generated from renewable sources such as rice husk boilers and wind turbines. Initiatives such as agriculture waste boilers in our plants, installation of wind turbines, reduction of use of chemicals, reduction in weight of packaging and film used in product packaging, reduction in weight of metal crowns/polypropylene caps for plastic bottles, conversion of potato waste into bio gas help reduce load on the environment. 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. Its award-winning "waste to wealth" recycling program reaches 450,000 families.

PROJECT PROFILE

INTRODUCTION

Main objective of the study is to know the consumer liking vis--vis market potential of Soft drinks in Sirsa. It has been done by the actual field survey and collecting primary data. For the purpose of survey, the complete population has been divided into 4 Age Groups i.e. Below 10 years 10-20 20-30 years years

Above 30 years The attention is mainly focused on the population, which could spell their choice/liking for soft drinks. 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, company cant impress strongly due to the tender age & low awareness level. The population growth graph in India has an upward trend and India is considered the biggest market of the world. As such MNC and other reputed players in the Soft drinks find India as their dreamland. 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. The liking for soft drinks is widely affected due to its location, people & economy. This study has been undertaken keeping in mind these vital factors.

Location:Sirsa city is quite old city and is located in the westernmost region of the state, bordering Punjab and Rajasthan. The people in this area are of mixed kind. Here we can find businessmen, Housewives, students, doctors, lawyers etc. People of rural areas also reside here. Urban background

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. The population of this area is very large i.e. over lacs. The people of rural area have been involved in agriculture. Some people of Rural Back ground are also engaged in good jobs. Urban background people are professionals, businessmen, educationists etc. this area is thus a mixed society.

SELECTION OF AREA:Following consideration prompted the choice of Sirsa city for the present study of liking for Soft drinks. Due to rapidly changing society, on account of greater exposure to media Advertisement. Due to its vicinity to Delhi, there is a lot of impact on the life-style of the Young Turk. The second main consideration was that in Sirsa city, the education exposure level is comparatively higher in comparison to other areas. The city has many reputed colleges & schools. In addition to this I belong to this place. This has facilitated me in the task of Data collection.

OBJECTIVES OF THE STUDY

To find out the customer choice/preference towards various Soft drinks. To find out the various factors influencing the purchase of Soft drinks. To find out market leader in the market. 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. 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, so the study didnt get any help from that angle. Limited area of operation thats only few areas are covered in this project. Numbers of respondents conducted for the age groups of below 10 & above 30 are less, as they are not easily approachable. Lack of experience of the researchers may cause some errors. People do not have exact & appropriate knowledge on the recall of brands Hypothesis is not taken.

RESEARCH METHODOLOGY

For the research study to be accepted in its and spirit, the procedures for conducting it should be vividly expressed. 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 there is a plethora of statistical techniques for different research study, so it is highly essential that the procedures and techniques to be applied should be explained carefully, 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. It is the framework, which determines the course of action towards the collection and analysis of required data. This framework is to ensure that the relevant data are collected and it also implies that it is collected accurately in an economical manner.

Research design has broadly been classified into three categories: Exploratory The exploratory design research attempts to bring out new relationship. 2) Descriptive- The study is typically concerned with determining the frequency of a particular phenomenon. 3) Casual research design Casual research design is adopted in order to discover and determine the cause and effect relationship. Since the present study is not building on any previous study its nature has to be essentially exploratory. 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 study was in some measure also casual, at least initially.

1)

SAMPLE DESIGN: An ideally selected sample represents the whole universe. The bigger the size of a sample, the more representative it is likely to be. But, both time and money are the major constraints. Thus, a sample should never be too big as to be un-manageable nor too small as to loose its representation. In sample design, 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. In probability sampling, each element of the population has known, non-zero chances of being selected in the sample while non-probability sampling involves personal judgement. For the present study, the techniques of convenience sampling (i.e. non-probability sampling is used. A due consideration should be given to the data collection so that the conclusion comes out to be accurate.

C)

DATA COLLECTION METHOD:

Usually, three basic methods are used to collect primary data1) 2) 3) Interview Observation Questionnaire

Structured interview involves the usage of questionnaire to collect the desired data from those who have the same information. Unstructured interviewing on the other hand involves research/depth interviewing. In observation, no questionnaire is used, but the situation of interest is watched carefully to record the relevant information. Keeping in view the nature of this study, questionnaire method was found to be most effective. The questionnaire is structured i.e. it is presented having from question in sequence, and non-disguised i.e. objective of the study is clear to the respondents.

D)

DATA ANALYSIS: The data was collected, tabulated, 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. Some diagrams have also been aided in order to make the study clear and easily understandable. In brief my research design is as follows: Sample Area- Sirsa city Sample unit- Individual using Soft drinks Sample size- 100 Study based on- primary data Data collection instrument- Questionnaire

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.

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, 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.

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

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

TA TU

G E

E/ F

/H U N

R G Y

N E

LE

AS

ENERGY/HU NGER 10% TASTE 42% STATUS 15% ENERGY/HUNGER STATUS PLEASURE/FUN TASTE PLEASURE/ FUN 33%

Interpretation:

U R

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.

CONCLUSION

Based on the findings of the research detailed in the preceding pages, a few unmistakable conclusions can be drawn, they are as follows: 1) Good advertising effect & nice taste of soft drinks can take any company to those heights, one had not even thought of. 2) Rising price of soft drinks is affecting the buyers buying behaviour to large extent. 3) Consumers are very much affected by attractive packaging. 4) Sale of soft drinks is very heavy in summers but people do buy soft drinks in every season. 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.

6) Income of people has very little effect on the choice/liking of soft drinks.

SUGGESTIONS & RECOMMENDATIONS

Soft drinks companies should come up with more flavours of soft drinks in spite of well-known flavours.

As most of the people purchase soft drinks for party occasions, some schemes can be introduced.

Most of the people purchase soft drinks for the sake of change in taste, pleasure/fun. Hence these things can be used in designing advertising.

Price of the soft drinks should not exceed as most of the people with lower income group also consume soft drinks. Therefore, higher price affects their buying behaviour.

Packing must be done in colours corresponding to the colour of the soft drinks.