Cold Drinks Essay

Soft drinks are non-alcoholic water-based flavoured drinks that are optionally sweetened, acidulated and carbonated. Some carbonated soft drinks also contain caffeine; mainly the brown-coloured cola drinks. PROBLEM STATEMENT To find out consumers buying behaviour and to identify gaps in the industry if any. RESEARCH OBJECTIVE To find out the factors affecting soft drinks buying pattern. To find out the consumers buying habits. Seasonal changes in the buying habits. To find out the consumer’s future requirements and conceptualize an innovative product. To study the overall Beverages industry. SOFT DRINKS MARKET – AN OVERVIEW. Global Scenario The global soft drink industry is highly concentrated, being largely controlled by the two multinational companies; Coca Cola and PepsiCo. Coca Cola leads the carbonated soft drink market in most countries in the world with 60% of the global cola market with its flagship Coca-Cola brand. Other notable players include Cadbury Schweppes. Indian Scenario In the booming soft drinks industry, multinationals seem to be the biggest winners in terms of market share. The Coca-Cola Company led the highly consolidated market with a 42. 8% volume share, followed by PepsiCo at 28. 6% in 2004. Danone is a minor player in India with a 0. 5% share, chiefly due to its late market entry and limited offerings. According to government estimates soft drinks marketed in India were 6540 million bottles in March 2001. The market growth rate, which was around 2-3% in ‘80s, increased to 5-6% in the early ‘90s and is presently 7-8% per annum. Most of the sales of soft drinks take place during summers while just 5-6% of total sales take place in winters. In summers the high season lasts for 70-75 days, which contributes more than 50% of the total yearly sales. In terms of regional distribution cola drinks have main markets in metro cities and northern states of UP, Punjab, Haryana etc. Orange flavoured drinks and sodas are popular in southern states. Western markets have preference towards mango-flavoured drinks. Non-alcoholic beverage market can be divided into fruit drinks and soft drinks. Soft drinks available in glass bottles, aluminium cans, PET bottles or disposable containers can be divided into carbonated and non-carbonated drinks. Cola, lemon and oranges are carbonated drinks and non-carbonated drinks include mango drinks. Soft drinks can also be divided into cola products and non-cola products. Cola products in Indian include brands like Pepsi Cola, Diet Pepsi, Coca- Cola, Diet Coke, Thumps Up etc. Cola drinks account for nearly 61-62% of the total soft drinks market in India. Non-Cola products account for 36% the total soft drink market. Until 1990s, domestic players like Parle Group (Thumps Up, Limca, Goldspot) dominated the softdrink market in India. However, with the advent of the MNC players like Pepsi (1991) and Coke (re-entered in 1993 after it was banned in 1977) in the early 1990s, the market control shifted towards them by the late 1990s. The per capita consumption of soft drinks in India is among the lowest in the world – 5 bottles per annum compared to the 800 bottles per annum in the USA. Delhi reports the highest per capita consumption in the country – 50 bottles per annum. The consumption of PET bottles is more in the urban areas (75% of total PET bottle [plastic bottles] consumption) whereas the sales of 200ml bottles were higher in the rural areas. According to a survey, 91% of the soft drink consumption in India is in the lower, lower middle and upper middle class section. After a somewhat subdued performance in 2006 due to a recurrence of the pesticides controversy, soft drinks sales bounced back strongly to record double-digit volume growth in 2007. With carbonates growth back on a positive upward curve alongside burgeoning sales of fruit/vegetable juice and bottles water, soft drinks showed impressive growth in 2007. Off-trade volumes grew slightly faster than on-trade volumes, driven by higher consumption of packaged and branded soft drinks at home and on the go. The emergence of supermarkets/hypermarkets, heavy consumer promotions and various new product launches played a key role in driving off-trade volume growth. Soft drinks sales in 2007 were propelled by bottled water and fruit/vegetable juice with their healthier positioning helping to drive sales of soft drinks. While carbonates posted single-digit growth in 2007, rebounding from the pesticides controversy of 2006, it was bottled water and fruit/vegetable juice that stormed ahead with high double-digit growth rates. Poor municipal infrastructure for tap water has pushed sales of bulk packaged water to households. Fruit/vegetable juice is growing as a result of increased consumer expenditure on naturally healthy (NH) beverages. While functional drinks and RTD tea also posted impressive growth in 2007, they were growing from a very small base and are yet to achieve a critical mass in terms of establishing a loyal consumer base. With consumers showing a growing preference for healthier soft drinks such as bottled water and fruit/vegetable juice rather than carbonates in 2007, the two carbonates giants suffered a marginal decline in share. Although both players embarked on a change in strategy to focus more on non-carbonated soft drinks in their portfolios, they were unable to maintain share and lost out slightly to home-grown players Parle Bisleri and Dabur India. Coca-Cola India launched Minute Maid and pushed the sales of its juices while PepsiCo India heavily promoted Tropicana, Aquafina and Gatorade during 2007. In addition, Coca-Cola India and PepsiCo India embarked on re-branding themselves as total beverage players and not just carbonates players. With the retail scene in India undergoing a rapid metamorphosis with the establishment of supermarkets/ hypermarkets and convenience stores, soft drinks sales have benefited positively. People in urban areas are increasingly flocking to supermarkets to pick up speciality items that are not available in the kirana stores that are found all over India. Modern retail outlets have provided soft drinks players with many opportunities to push their brands. Consumer promotions for fruit/vegetable juice and emerging sectors such as RTD tea and functional drinks are driving product sampling. Attractive point-of-sale (PoS) displays and gift packs of concentrates are also drawing consumer attention in supermarkets/hypermarkets. Heath drinks Soft drinks is expected to post a strong performance on the back of increasing affluence amongst consumers and evolving lifestyles which lead to consumers devoting less time to preparing fresh food and drink at home. Competition from the unorganised sector will diminish gradually as consumers show greater aversion to buying unpackaged and unbranded soft drinks from street vendors due to health and hygiene concerns. Rising health consciousness is also expected to drive sales of naturally healthy (NH) soft drinks such as 100% juice and mineral water. In addition, soft drinks such as sports drinks and juice-based carbonates are also expected to fare well over the forecast period as consumers perceive them to be healthy. Softdrinks can be segmented on the basis of carbonation, flavor type or place of consumption. Based on carbonation, soft drinks are principally classified into carbonated and non-carbonated drinks. While the carbonated drinks mainly include Cola, orange and lemon, the non-carbonated drinks include mango flavors. Cola products account for over 60% of the total soft drink market and include popular brands such as Coca-Cola, Pepsi, Thumps Up etc. Non-cola segment constitutes for over 35% of the market and can be divided into four sub groups based on types of available flavours that include – *Orange: Popular brands include Fanta, Mirinda Orange etc. *Clear lime: 7Up, Sprite *Cloudy lime: Limca, Mirinda Lemon. *Mango: Maaza, Slice Carbonates account for over 54% of total soft drinks sales in volume terms in India, with sales amounting to 2. 3 billion litres in 2004. CONSUMER’S PROFILE Soft drinks are impulse purchase products, and there is an element of indulgence associated with them. It does not figure very high on the shopping list. The consumer buys it just to while away time or as a substitute to water. Since, the older generation is of the opinion that nothing can substitute water, the companies generally target the youngsters, teenagers, children, employee of corporate offices. As these products are general fun drink, brand loyalties are not strong for a particular brand and consumers look for novelty and new flavors. Soft drinks consumption heavily relies on seasons. Though consumers are becoming health conscious, fans of classic carbonated soft drinks (CSDs) still are on the large. SAMPLING DESIGN TARGET POPULATION Consumers are surveyed to know their preference. The respondents are between the age group of 15 to 40. All the respondents are residents of Mumbai city. SELECTING A SAMPLING TECHNIQUE The sampling was done on a random basis whereby the respondents visited and primary data is collected. The Respondents were selected as per convenience sampling. RESEARCH DESIGN The research design was Exploratory in nature. Secondary Data and the Data from the Questionnaire were used to do the Analysis. This Exploratory research was done to give the insights about Consumers buying behaviour. The factors affecting their purchase of Soft- Drinks. DATA COLLECTION: The Primary data was collected through questionnaire administered to Consumers. The Secondary Data was collected through Internet, Business journals. The questionnaire was designed keeping the overall objectives and the information required. The questionnaire administered to the Consumers was aimed at finding out their preference & factors affecting their purchase decision for Soft drinks and also to identify how these existing products can be improved according to the consumers. DATA ANALYSIS: Data Analysis is being done arranging the data in tabular forms and using graphical representations. The survey conducted and the related findings. How many bottles (consider 350 ml) of cold drinks do you consume? CONSUMPTION IN BOTTLES (350 ml) 1 in a week1 in 4 days1 in 2 days>1 in a day 25 %42%27%6% Analysis. Consumers proffered having cold drinks once in a week or 4 days. Regular consumers were few. Consumption increased during the summers. Consumption is more amongst teenagers and youngsters. Young professionals also consumed cold drinks regularly mostly since it came complimentary with other food items such as pizzas or burgers. It is also used by working professionals as lunch-time substitute for water. Do you generally stick to brands ? YES89% NO11% Analysis: It is seen that, consumers are highly brand conscious. The big brands have been successful in creating loyalty towards their products in the long run. But, it is seen that, the consumers are not particular about one specific brand. As long as the brand is known to him/her, the product would be consumed. Also, the safety issues concerning beverages are high. Hence, unbranded beverages are not popular. Do you stick to a particular brand? YES27% NO73% Analysis: It is seen that consumers look for branded beverages, but not for a particular product as such. As long as the product is from a well- known brand, it will be consumed. It is also seen that, whenever a particular soft-drink isn’t available, any other substitute works. Hence, switching brands is relatively easy. Do you prefer ‘no fizz’ drinks (e. g. Slice, Maaza) or ‘strong fizz’ drinks e. g. (Thumbs up or Pepsi) ? Fizz LevelPercentage Strong Fizz16. 7% Light Fizz25% No Fizz58. 3% Analysis A very significant trend-shift towards no-carbonated drinks is seen. Previously, CSD (carbonated Soft drinks) have been very popular. Recently this trend has been changing. People now prefer ‘no fizz’ drinks. ‘Strong fizz’ i. e. cold drinks with high carbon concentration are running low on popularity. How Important are the following Factors ? Analysis. Most important factors as considered by consumers as per the survey results, are Brand, flavour and nutritional value. Shape of the bottle or packaging is the least important criteria. Flavour is also an important factor. Data table is given below : FactorsLeast ImportantSomewhat ImportantAverageImportantCriticalN/ARating Average Color22. 2% 44. 4% 11. 1% 0. 0% 11. 1% 11. 1% 2. 25 Flavour0. 0% 22. 2% 22. 2% 33. 3% 22. 2% 0. 0% 3. 56 Quantity0. 0% 16. 7% 50. 0% 33. 3% 0. 0% 0. 0% 3. 17 Nutrition value0. 0% 20. 0% 10. 0% 50. 0%20. 0% 0. 0% 3. 70 Shape of bottle42. 9%0. 0% 28. 6% 0. 0% 14. 3% 14. 3% 2. 33 Packaging50. 0% 16. 7% 0. 0% 0. 0% 0. 0% 33. 3% 1. 25 Brand11. 1% 0. 0% 11. 1% 22. 2% 44. 4% 11. 1% 4. 00 Exclusivity0. 0% 16. 7% 16. 7% 16. 7% 0. 0% 50. 0% 3. 00 Would you prefer nutritious drinks over others? YES72% NO22% Analysis : People are growing more health conscious due to the changing trends, growing awareness levels, better education and standard of living. This leads them towards more nutritional drinks. Consumers are now looking for cold-drinks that also satisfy other needs or provide added benefits along with being just a cold drink, Do you like energy drinks more? YES68% NO32% Analysis: Energy drinks are quite popular in the Indian markets with Red Bull being the prime player and a few other brands. The prices are still high considering the Indian markets. Would you like a glucose induced packaged drinking water ? YES79. 3% NO20. 7% Analysis: Packaged drinking water sales have grown manifolds in the last decade due to improper hygiene and improper municipal care. Consumers seem keen on having a product that can provide them added benefits with the packaged drinking water, such as, glucose induced water. Do you prefer the classic CSD (carbonated soft drinks) over anything else ? YES41% NO59% Analysis There are a significant percentage of consumers who have strong preferences towards carbonated soft drinks. Most of these respondents are male. Would you buy a drink that comes in 3 variations depending on its level of ‘fizz’? YES79. 3% MAYBE23. 1% NO20. 7% Analysis : In this question, a conceptual product with 3 levels of fizz was put up to the respondents. The audience responded quite favourably towards the idea. Since there is a divide amongst consumers who prefer strong fizz and the others who prefer no fizz drinks, such a product is given a thumbs up by the consumers. Would you like to have an additional product (e. g. chips) as a packaged product along with your cold drinks? YES53. 8% MAYBE30. 8% NO15. 4% Analysis: Generally, consumers have cold drinks along with wafers, chips or some kind of snack. In this question, the reaction of consumers is noted for how would they like it if the companies could come up with some offer where in the snacks come up bundled with the soft drink. These snacks can be suited best for the taste of the particular product along with which it could be supplied. CONCLUSION AND RECCOMMENDATIONS: The soft drinks market is an attractive industry with lot of scope for new entrants. Even if there are branded players since decades, trends are shifting now towards unconventional products. New innovations regarding flavour and nutritional value are most welcomed by the consumers. Lifestyles are changing and stress levels are high. This drives consumers to look for added benefits with the conventional ‘colas’. Hence, now consumers prefer cold drinks with natural fruit extracts, flavoured milk or energy drinks. A certain dislike towards carbonated drinks is seen especially amongst female consumers. As compared to other soft drinks these nutritional drinks are bit pricier. Ways should be thought of to reduce these rates and make them more affordable. Also, there are only mango flavoured, lemon flavoured or orange flavoured drinks available in the no-fizz category. More flavours can be tried. Brands should stress more on the nutritional value of the cold-drink and specify exactly how much of the daily nutrition will it provide them. A new product especially for females could be come up with. APPENDIX Cold drinks 1. Default Section 1. How many bottles (consider 350 ml) of cold drinks do you consume? How many bottles (consider 350 ml) of cold drinks do you consume? one in a week one in 4 days one in 2 days one in a day more than 1 bottle in a day Other (please specify) 2. Do you generally stick to one brand or easily switch brands? Do you generally stick to one brand or easily switch brands? Yes No Maybe 3. Do you prefer ‘no fizz’ drinks (e. g. Slice, Maaza) or ‘strong fizz’ drinks like Thumbs up or Pepsi? Do you prefer ‘no fizz’ drinks (e. g. Slice, Maaza) or ‘strong fizz’ drinks like Thumbs up or Pepsi?no fizz light fizz strong fizz Other (please specify) 4. Please select according to your preference (5 being the highest) Least ImportantSomewhat ImportantAverageImportantCriticalN/A Color Please select according to your preference (5 being the highest) Color Least Important Somewhat Important Average Important Critical N/A Flavour Flavour Least Important Somewhat Important Average Important Critical N/A Quantity Quantity Least Important Somewhat Important Average Important Critical N/A Nutrition value Nutrition value Least Important Somewhat Important Average Important Critical N/A. Shape of bottle Shape of bottle Least Important Somewhat Important Average Important Critical N/A Packaging Packaging Least Important Somewhat Important Average Important Critical N/A Brand Brand Least Important Somewhat Important Average Important Critical N/A Exclusivity Exclusivity Least Important Somewhat Important Average Important Critical N/A 5. Would you like your cold drink bottle to come in varied sizes so that it can be accomodated anywhere? Would you like your cold drink bottle to come in varied sizes so that it can be accomodated anywhere? Yes No Maybe. Other (please specify) 6. Would you buy a drink that comes in 3 variations depending on its level of ‘fizz’? Would you buy a drink that comes in 3 variations depending on its level of ‘fizz’? Yes No Maybe 7. Would you prefer your cold drink bottles to preserve the fizz for several days after opening the bottle? Would you prefer your cold drink bottles to preserve the fizz for several days after opening the bottle? Yes No Maybe 8. Would you like to have an additional product (e. g chips) as a packaged product along with your cold drinks? Would you like to have an additional product (e.g chips) as a packaged product along with your cold drinks? Yes No Maybe 9. Would you like to buy cold drinks, if you will get some promotional offer along with your cold drinks? Would you like to buy cold drinks, if you will get some promotional offer along with your cold drinks? Yes No Maybe 10. Gender? Gender? Male Female. BIBLIOGRAPHY http://resources. bnet. com/index. php? http://www. agriculture-industry-india. com/agricultural-commodities/soft-drinks. html http://www. foodindustryindia. com http://www. euromonitor. com http://www. icmrindia. org.