CONSUMER PREFERENCE STUDYCARBONATED vs MILK BASED BEVERAGES

BY

HIMANSHU AGARWAL (35036) SUBRATA BAGCHI (35096)

Development Internship Segment

PRM 35

FACULTY GUIDE: PROF. GIRISH K AGRAWAL

JULY, 2015

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ACKNOWLEDGEMENTS

The acknowledgements are our humble way of expressing a deep sense of gratitude to all those who helped us in successfully completing this extensive project.

We would like to thank Mahesana District Milk Producers Co-operative Ltd. for giving us the opportunity to work on their new project and facilitating us to complete it successfully by providing us with access to all the organizational resources.

We express our heartfelt thanks to our Reporting Officer, Mr. D.T. Raval, Sales Head, Dudhsagar Dairy, for taking keen interest in our internship as well as for providing valuable insights throughout the course of internship. We would like to specially thank for ensuring a comfortable stay for us at the dairy.

We would like to thank Prof. Girish Kumar Agrawal for guiding us before, during as well as after the completion of the internship segment. Without his valuable insights, our research methodology would not have been strong. His insights also helped us doing appropriate data collection and analysis.

Last, but not the least, we would like to thank Prof. Vanita Yadav, DIS Co-ordinator and Institute of Rural Management, Anand (IRMA) for providing us with this wonderful opportunity to have hands on experience with a developmental organization during the Development Internship Segment (DIS).

Table of Contents

Chapter 1Introduction.. Consumer Preference.. Model of Consumer Behavior.. Factors Influencing Consumer Behavior Chapter 2Research MethodologyCluster Analysis.. Factor Analysis Chi Squared Test Sources of Data Collection Tools for Data Collection Sampling PlanVariables Taken into ConsiderationChapter 3Sample ProfileAge Group CompositionGender CompositionEducation Group CompositionOccupation Group CompositionMonthly Income CompositionNative Place Group CompositionChapter 4Data AnalysisHypothesis 1: Relationship between age and consumer preference.Hypothesis 2: Relationship between gender and consumer preference...Hypothesis 3: Relationship between education and consumer preference..Hypothesis 4: Relationship between occupation and consumer preferenceHypothesis 5: Relationship between income level and consumer preference..Hypothesis 6: Relationship between marital status and consumer preferenceHypothesis 7: Relationship between native place and consumer preferenceHypothesis 8: Relationship between job nature and consumer preference.Consumer preference towards carbonated drinks and milk base beverages..Consumers choice of beverages and preferred time of consumption.Consumers preference of attributes while purchasing a beverage.Overall purchase frequency of beverages.......Perceived factors by carbonated beverage consumers.Perceived factors by milk base beverage consumersChapter 5..Cluster Analysis..SegmentationChapter 6..Factor Analysis.Cluster 1Cluster 2Cluster 3Cluster 1: Cluster Characteristics..Cluster 2: Cluster Characteristics..Cluster 3: Cluster Characteristics.Chapter 7..Results & Conclusions.Chapter 8..Recommendations.

Chapter 11. Introduction.The beverage industry is growing at a very rapid pace and mainly comprises of carbonated soft drinks, mineral water and also health drinks. These beverages are well acknowledged by the contemporary consumers and these drinks are gradually overhauling the market of the hot drinks those were formerly available. Amidst of this rapid growth, yet the soft drink industry is encountering both new opportunities and challenges in this competitive market. Regularly changing demands and preferences of the consumers entail innovative ways of retaining the old customers as well as expanding the customer base by enticing the newer ones. Recent developments in the consumption of beverage drinks and the ever increasing market challenges have heightened the need for searching and fulfilling consumer needs and preferences.It is becoming progressively difficult to flout the existence of market monsters like the carbonated soft drinks in todays market. Since its inception in the 1830s consumption of the carbonated beverages has been steadily increasing exponentially with the advancements in the technology of its production to its increased availability in the market. So a need has become inevitable to run a consumer survey in order to have a clear picture of the consumer needs and preferences so that the non-carbonated beverage industry can compete with the carbonated soft drinks industry. In order to achieve that target we have done an extensive consumer preference study so as to identify the major consumer needs and preferences and the market gap between the carbonated soft drinks and the non-carbonated milk base beverages.Consumer PreferencesConsumer predilection is used predominantly as a means to select an alternative that has the utmost awaited value among a number of alternatives by the consumer in order to placate his/her needs or cravings. Preferences specify choices among unbiased or more cherished alternatives offered. The preference of the buyer is the result of their comportment they show during probing, procuring and disposing the products. Consumer preferences are demarcated as the idiosyncratic (individual) tastes, as measured by its utility, of several bundles of goods. They permit the consumer to rate these bundles of goods depending upon the levels of utility they contribute to the consumer. The preferences are independent of their income and prices. Ability to procure goods does not decide a buyer's likes or aversions. In other words, the consumer has different preferences over the different combinations of goods defined by the set of commodity bundles. Consumer preferences are evaluated in terms of the level of contentment the consumer gains from consuming different combinations or packages of goods. The consumer's objective is to pick the bundle of commodities which offers the utmost level of gratification as the consumer describe it. But buyers are very much constrained in their varieties. These constraints are demarcated by the consumer's income, and the price the buyer pays for the goods. Consumer value is measured in terms of the comparative utilities between commodities and these reveal the consumer's preferences.Consumer behaviour is defined as the mental and emotional process along with the physical activities of the people who purchase/consume goods and services to satisfy their particular needs and wants. Motivation also affects consumers preference. Development of motivational concepts is explained by Maslows hierarchy of needs theory which says that within every human being, there exists a hierarchy of 5 needs: Physiological: thirst, sex, shelter, hunger etc. Safety: protection from physical and emotional harm. Social: belongingness, acceptance, affection and friendship. Esteem: internal esteem factors and external esteem factors Internal esteem factors: autonomy, achievement and self-respect. External esteem factors: recognition, status and attention. Self- actualization: the drive to achieving one's potential and self-fulfilment.Before the introduction of carbonated soft drinks, butter milk and lassi were the common preferences for beverage among Indians. With the increasing awareness towards health, changing life style, increasing income level and introduction of flavored milk in the Indian market, people are shifting their preference for beverages.

Model of Consumer Behavior

Factors Influencing Consumer Behavior:There are three major factors that influence the consumer behaviour while they are about to make any choice regarding the bundle of commodities they should pay for to have the maximum level of utility out of it. Those three factors are described here under,

Culture Factor: Culture is one of the important element that influences a persons needs and comportment. And this element of culture is not a result of one single day but is inculcated within any individual throughout his/her lifetime by his/her own surrounding and values of the family he/she belongs to.Social Factor: Any consumers preference behaviour is much influenced by social factors like his/her reference or social groups like friends and family members, his/her social roles and status that he/she holds in the society he/she belongs to.Personal Factor: Coming to the personal factor, any individual consumers choice of preference is also governed by his own characteristic traits like the buyers age and stage in the life cycle, his/her occupation and economic condition, personality and lifestyle and values that he/she is grown up with.

1.1 Objective of Study: The scope of our consumer preference survey study are hereunder,1.1.1 To find the underlying factors affecting the purchasing behavior of consumers. In order to fulfill this objective we need to do an exploratory survey of the consumer base in and around Mehesana. But for that we need to design a survey questionnaire based on the attributes they look for while selecting any beverage preference.1.1.2 To identify the market gap between carbonated and milk based beverages. This objective can be achieved by comparing the data regarding the intensity of different beverage preference by the sample consumers. For this we have kept a question in the survey form regarding the beverage type which they prefer the most and in order to nullify the possible biasness in their response which may arise due to the health factor associated with the milk based beverages in their subconscious mind we have prepared a menu card consisting of both milk and carbonated beverages and we have made different combinations of their price, packaging & quantity and asked the respondents to choose any three of the total 22 such combinations. And by examining the difference in the frequency or percentage of consumer preferring milk based beverages and carbonated beverages we can determine the market gap of carbonated and milk based beverages.1.1.3 To identify the target segment for milk based beverages. This objective can be achieved through cluster analysis and segmentation profiling of the sample consumer.

1.2 Scope of Study: The scope of this study was restricted to the analysis of consumer preference, perception and consumption pattern towards carbonated and milk based beverages. The study also identifies present market gap and target segment for milk based beverages. This study was restricted to Mahesana milk shed area which includes Mahesana, Kalol, Kadi, Mansa and Patan.

1.3 Limitations: There are quite a number of limitations that we faced during our exploratory consumer preference survey and they are as below,1.3.1 Due to a limited time frame allocated for such an extensive survey project we were only able to take responses from 300 consumers from a total population of 2027727 people (as of census data 2011), which may not sufficiently represent the actual preference of the entire population of the Mehsana milk shed area.1.3.2 The responses have been collected in the month of July when hot and humid summer pertains to exist in the region which may have an influence on the response of the participants.1.3.3 We have collected data from the daily commuters at bus stops and markets and thus there is always a possibility that the sample may contain some respondents who are from outside the Mehesana milk shed area or the district itself. Thus there is always a chance of data misrepresentation because we were to analyze the preference of the consumer belonging to Mehsana milk shed area only.

Chapter 2Research Methodology:The research design adopted for the purpose of the study is primarily empirical in nature as it endeavors to capture the local crescendos that edge the factors affecting the preference of consumers towards milk beverages in comparison to the carbonated beverages. In the study we however have used both qualitative as well as quantitative techniques for amassing statistics & facts, and is based on the data poised predominantly from the primary sources. The data collection has been done through both structured questionnaire and some semi structured interviews in order to provide prospect for quality discussions with the identified participants. The data was analysed using following tools:a. Descriptive statistics and frequency analysis are carried out to draw meaningful interpretations.b. Cluster analysis to identify target segment for milk based beverages.c. Factor analysis to identify the factors depicting consumption pattern of beverages.d. Chi square test is applied to evaluate significant difference between different age groups, gender, education, native place and income level and consumer preference of beverages.Cluster AnalysisWhile collecting and recording data from individual consumer we have recorded it with so many complexities that every individual reveals in their responses. But in order to move from data to information to knowledge to wisdom, we need to reduce those complexity in our data as well as result. We can achieve this in either of the two ways i.e., Cluster Analysis at the case level and Factor Reduction Analysis at the variable level. In cluster analysis what we actually do is that we club together respondents or rather responses which are homogenous in nature maintaining as much heterogeneity as possible across the groups.Factor AnalysisWe perform Factor Reduction analysis at the variable level to club two or more than two variables or attributes into groups and thus showing the consumption pattern of the beverages depending on the various attributes of the beverages.

Chi Square TestThis test is done in order to judge the degree of independence among a set of attribute and the anticipated or desired result or outcome. Here before going for the test we have to formulate a hypothesis one is called the Null Hypothesis and if the null hypothesis got rejected then we can say that the taken attribute has some level of influence on the result. As for example in our case Age is one of the attribute which may have an influence on the consumer preference, so we have to formulate a null hypothesis that Age of the respondent has no significant influence on the preference of the respondents and if after running the chi squared test taking the age variable in account if no change is seen on the preference level of the consumers then we can accept the null hypothesis and conclude that from the Chi-Squared test it is evident that consumer preference is independent of the age of the consumer.2.1 Sources of Data Collection:Primary Sources:First of all we have conducted a pilot survey taking respondents in the form of semi-structured interviews, from the Mehesana city in the Mehsana milk shed area. From the pilot survey we were able to decide upon some factors or attributes that majorly controls the preference of the consumers while selecting any beverages for refreshment purpose.Then accordingly we have prepared a structured questionnaire keeping in mind those attributes and an extensive survey was carried on involving participants from five major cities in and around the Mehsana Milk Shed area i.e., Mehsana, Kalol, Kadi, Mansa and Patan.2.2 Tools for Data Collection:

Semi Structured Interviews: In the first stage we have carried out semi structured interviews involving participants from the Mehsana city. The sample size in that case include 50 participants. We have also carried out some unstructured discussions with the retailers and distributors of both milk and carbonated beverages during our extensive survey program.Structured Questionnaire Survey: In the second stage of our study we have carried out an extensive survey based on the questionnaire formulated after our pilot survey taking a total of 300 participants from the Mehsana Milk Shed area. 2.3 Sampling Plan: Our sampling plan includes 300 participants in all. We have followed both random and stratified random sampling plan during our extensive survey program. The composition of the participants is described here under,

Table 2.1 Sample Data2.4 Variables taken into consideration:1. Demographic Variables:Social FactorsEconomic Factors

AgeMonthly Income

GenderOccupation

Marital StatusJob Nature

Education

Native Place

Table 2.2 Descriptive variables taken for respondent segmentation.

Chapter 3Sample ProfileSample Participants Composition:

3.1 Age Group Composition: During our survey we have recorded responses from different age group of people. Since age plays a very vital role in any individuals preference of taking any beverage, so we have divided our entire sample population into 5 age groups. Minors belonging to age less than 18 years, Youngsters belonging to age 18-25years, Middle aged people belonging to age 25-40 years, Upper Middle aged people belonging to age group 40-60 years and finally Seniors belonging to age group more than 60 years. In the figure below the graphs clearly depicts the frequency distribution of our sample population in the above mentioned age groups.

Table 3.1 Age composition of Respondents Figure 3.1 Age composition of respondents3.2 Gender Composition: Gender also can have a great influence on any individuals choice of refreshment beverages. So we have divided our entire respondent base according to their gender also. But since in most of the cases preference of the female consumers is governed by the male members in the household or family, so we have rough taken a 60/40 ratio of the male and female respondents. More precise information is shown in the figure below as well as in the table also.

Table 3.2 Gender Frequency Distribution of Respondents

Figure 3.2 Gender Frequency Distribution3.3 Education Group Composition: Education plays a vital role in any individuals taste towards selecting any beverage for refreshment purpose. So we have divided our entire sample population into 5 distinct education groups, Primary Educated, Secondary Educated, Senior-Secondary Educated, Graduated and Post-Graduated. The figure below clearly depicts the frequency distribution of our selected sample population among the five above mentioned education groups.

Table 3.3 Respondent Frequency Distribution according to Education Groups

Figure 3.3 Education group Respondent Frequency Distribution

3.4 Occupation Group Composition: Occupation of an individual also correlates very much to his/her mind set and thus may also play a vital role in selecting a particular beverage type for refreshment purpose. For this purpose we have divided our sample into 5 distinct occupation types namely Student, Self-Employed, Salaried, Housewife and None. The figure below clearly depicts a frequency distribution of our sample population among those 5 occupational categories.

Table 3.4 Occupation group respondent frequency distribution

Figure 3.4 Occupation Group Respondent Frequency Distribution

3.5 Monthly Income Composition: Monthly disposable income of any individual can influence to a great extent on his/her lifestyle and as well on the type of beverage he/she prefers for refreshment purpose. So we have distributed our entire sample population into 5 distinct income categories and their frequency distribution is depicted in the figure below.

Table 3.5 Income Group Respondent Frequency Distribution

Figure 3.5 Income Group Respondent Frequency Distribution3.6 Native Place Group Composition: The place from where the participant belong to by his/her origin also reflects some sort of influence on the selection or preference of beverage drinks for refreshment purpose. So we have broadly divided the native place of our respondents into 4 categories namely Metro, Tier 2, Tier 3 and Rural. The figure below depicts the frequency distribution of the entire sample population into the 4 above mentioned native place categories.

Table 3.6 Respondent Frequency Distribution according to Native Place

Figure 3.6 Respondent Frequency Distribution according to Native Place

Chapter: 4 DATA ANALYSIS

In this chapter, data collected through questionnaire is analyzed in detail in accordance to the objectives of research study. The objectives includes finding the underlying factors affecting consumer preference of beverages, market gap of milk based beverages against carbonated beverages and to identify the target segment for milk based beverages. The result presentation consists of a. Hypothesis testing by Chi square test to evaluate if there is a significant relationship between different age groups, gender, education, native place and income level and consumer preference of beverages.b. Consumer preference towards carbonated drinks, butter milk, lassi, flavored milk and flavored soda water using mean and standard deviation.c. Consumer preference of attributes while purchasing beverages using mean and standard deviation.d. Perceived factors by carbonated beverages consumers while purchasing carbonated beverages.e. Perceived factors by carbonated beverages consumers while purchasing milk based beverages.f. Perceived factors by milk based beverages consumers while purchasing carbonated beverages.g. Perceived factors by milk based beverages consumers while purchasing milk based beverages.

Chart 1: Overall consumer preference of beverage

4.1. Hypothesis 1: Relationship between age and consumer preference of beverage

Null Hypothesis H01: There is no significant relationship between age and consumer preference of beverage

Alternative Hypothesis Ha1: There is a significant relationship between age and consumer preference of beverage

Table 4.1:Age group and beverage preference cross tabulation

From this table it is inferred that the p-value is < 0.05, we reject the null hypothesis and accept the alternate hypothesis which signifies there is a significant relationship between age and consumer preference of beverage.

Figure 4.1:Age group and beverage preference

From figure 4.1, we can see that minors and youngsters prefer carbonated beverages while the respondent having age more than 40 years prefer milk based beverages.

4.2. Hypothesis 2: Relationship between gender and consumer preference of beverage

Null Hypothesis H02: There is no significant relationship between gender and consumer preference of beverage

Alternative Hypothesis Ha2: There is a significant relationship between gender and consumer preference of beverage

Table 4.2:Gender and beverage preference cross tabulation

From this table it is inferred that the p-value is > 0.05, we accept the null hypothesis which signifies there is a no significant relationship between gender and consumer preference of beverage.

Figure 4.2:Gender and beverage preference

From figure 4.2 we can infer that both carbonated and milk based beverages are preferred equally by both males and females.

4.3. Hypothesis 3: Relationship between education and consumer preference of beverage

Null Hypothesis H03: There is no significant relationship between education and consumer preference of beverage

Alternative Hypothesis Ha3: There is a significant relationship between education and consumer preference of beverage

Table 4.3:Education and beverage preference cross tabulation

From this table it is inferred that the p-value is < 0.05, we reject the null hypothesis and accept the alternate hypothesis which signifies there is a significant relationship between education level and consumer preference of beverage.

Figure 4.3:Education and beverage preference

From figure 4.3, we can infer that carbonated drinks are mostly preferred by respondents having education till primary level and graduates, while secondary, senior secondary and post graduates prefer milk based beverages.

4.4. Hypothesis 4: Relationship between occupation and consumer preference of beverageNull Hypothesis H04: There is no significant relationship between occupation and consumer preference of beverage

Alternative Hypothesis Ha4: There is a significant relationship between occupation and consumer preference of beverage

Table 4.4:Occupation and beverage preference cross tabulation

From this table it is inferred that the p-value is < 0.05, we reject the null hypothesis and accept the alternate hypothesis which signifies there is a significant relationship between occupation and consumer preference of beverage.

Figure 4.4:Occupation and beverage preference

From figure 4.4, it can be inferred that students prefer carbonated drinks over milk based beverages by a big margin. However, earning respondents prefer to take milk based beverages. Housewives have no particular choice and they prefer both carbonated and milk based beverages.

4.5. Hypothesis 5: Relationship between income level and consumer preference of beverage

Null Hypothesis H05: There is no significant relationship between income and consumer preference of beverage

Alternative Hypothesis Ha5: There is a significant relationship between income and consumer preference of beverage

Table 4.5:Income and beverage preference cross tabulation

From this table it is inferred that the p-value is < 0.05, we reject the null hypothesis and accept the alternate hypothesis which signifies there is a significant relationship between income and consumer preference of beverage.

Also from figure 4.5, we can see that the respondents whose income is less than Rs 15000 prefers carbonated beverages over milk based beverages, but as the income rises, there preference towards milk based beverages rises gradually.

Figure 4.5:Income and beverage preference

4.6. Hypothesis 6: Relationship between marital status and consumer preference of beverage

Null Hypothesis H06: There is no significant relationship between marital status and consumer preference of beverage

Alternative Hypothesis Ha6: There is a significant relationship between marital status and consumer preference of beverage

Table 4.6:Marital status and beverage preference cross tabulation

From this table it is inferred that the p-value is < 0.05, we reject the null hypothesis and accept the alternate hypothesis which signifies there is a significant relationship between marital status and consumer preference of beverage.

Figure 4.6:Marital status and beverage preference

As we can see in figure 4.6 that unmarried people prefer to take carbonated beverages while married people prefers milk based beverages. This difference is due to peer pressure in unmarried life and cost factor.

4.7. Hypothesis 7: Relationship between native place and consumer preference of beverage

Null Hypothesis H07: There is no significant relationship between native place and consumer preference of beverage

Alternative Hypothesis Ha7: There is a significant relationship between native place and consumer preference of beverage

Table 4.7:Native place and beverage preference cross tabulation

From this table it is inferred that the p-value is > 0.05, we accept the null hypothesis which signifies there is a no significant relationship between native place and consumer preference of beverage.

Figure 4.7:Native place and beverage preference

We can infer from figure 4.7 that there is not much difference in preference behavior of consumers who belongs to metros, tier1, tier2, tier3 or rural areas. However, as shown in graph, the residents of tier 2 cities prefer carbonated beverages while the residents of tier3 and rural areas prefer milk based beverages.

4.8. Hypothesis 8: Relationship between job nature and consumer preference of beverage

Null Hypothesis H08: There is no significant relationship between job nature and consumer preference of beverage

Alternative Hypothesis Ha8: There is a significant relationship between job nature and consumer preference of beverage

Table 4.8:Job nature and beverage preference cross tabulation

From this table it is inferred that the p-value is > 0.05, we accept the null hypothesis which signifies there is a no significant relationship between job nature and consumer preference of beverage.

Also from figure 4.8, we can infer that respondents who perform sedentary jobs prefers carbonated beverages while the respondents who performs laborious jobs prefers milk based beverages.

Figure 4.8:Job nature and beverage preference

4.9. Consumer preference towards carbonated drinks, butter milk, lassi, flavoured milk and flavoured soda water.

Table 4.9 Weighted average of consumer preference towards attributes of beverages

1. Butter milk with a weighted average of 4.03 is the most preferred choice of respondents followed by flavoured milk. Standard deviation is 0.829 in butter milk preference as compared to a standard deviation of 1.126 in case of flavoured milk. It shows there is a consistency in preference towards butter milk consumption. However since Mahesana is rich milk shade area, daily in-house preparation of butter milk also influenced respondents choice.2. Carbonated beverages and lassi are also preferred by respondents with a weighted average of 3.45 and 3.47 respectively. Soda water is least preferred choice among respondents with a weighted average of 2.40.3. High ratings to milk based beverages was primarily due to health awareness among respondents and may not depicts the actual preference behavior.

Figure4.9 Mean plot of actual beverage preference and rating of beverages Fig 4.9aFig 4.9b

Fig 4.9cFig 4.9d

4. Respondents who prefers milk based beverages gave an average rating of 2.6 to carbonated beverages whereas the respondents preferring carbonated beverages gave an average rating of 4.4 to carbonated drinks as shown in figure 4.9a. This means that the respondents who prefer milk based beverages do not prefer to take carbonated beverages.5. Respondents who prefers milk beverages gave an average rating of 4.3 to butter milk whereas the respondents who prefers carbonated beverages gave an average rating of 3.5 to butter milk as shown in figure 4.9b. It shows that butter milk is highly preferred by both milk beverages consumers and carbonated beverages consumer.6. Respondents who prefers milk beverages gave an average rating of 4.4 to flavoured milk whereas the respondents who prefers carbonated beverages gave an average rating of 3.1 to flavoured milk as shown in figure 4.9c. This means that the respondents preferring carbonated drinks are skeptical about their preference of flavoured milk and they can shift their preference.7. Respondents who prefers milk beverages gave an average rating of 3.9 to lassi whereas the respondents who prefers carbonated beverages gave an average rating of 2.9 to lassi as shown in figure 4.9d. This means that there is a scope to push more milk beverage consumers towards lassi while the respondents preferring carbonated drinks are skeptical about their preference of lassi and they can shift their preference.8. Respondents preferring carbonated drinks are skeptical about their preference towards soda water while the respondents preferring milk based beverages do not like soda water. So we can discard soda water in our further study.

Figure 4.10 Mean plot of age group and rating of beverages

Fig 4.10aFig 4.10b1. As shown in figure 4.10a, highest preference to carbonated beverages is given by youngsters (age 18-25 years) and minor respondents (age Rs 60000) showed less preference toward butter milk when compared with other income groups as shown in figure 4.11b. This might be due to less socialization factor among this income group. Fig 4.11c Fig 4.11d3. There is a high variation of preference of lassi among respondents of various income group. Respondents in low income group (< Rs 15000) are skeptical about their preference of lassi as shown in figure 4.11c. Respondents in mid and upper mid-level income usually prefers lassi. However respondents in higher income bracket prefer to take thick lassi, which is much costlier than other beverages.4. Similarly, respondents whose income is greater than Rs 25000 gave a high average rating to flavoured milk. Respondents in mid income bracket also prefers to take flavoured milk as shown in figure 4.11d, however the low income group respondents with an average rating of 3.65 are skeptical about it due to cost and quantity factor.

Figure 4.12 Mean plot of education level and rating of beverages

Fig 4.12a Fig 4.12b1. Respondents having education till primary level gave high rating to carbonated beverages followed by graduates. However respondents having education till secondary or senior secondary and post graduates are skeptical towards carbonated drinks as their preferred beverage.

Fig 4.12c Fig 4.12d2. Respondents having education till primary level gave a mean rating of 4.5 to butter milk. Also for other respondents butter milk is preferred choice.3. Lassi is mostly preferred by post graduates while the people having primary education preferred it least. Similarly flavoured milk is mostly preferred by post graduates.

4.10. Consumers choice of beverages and preferred time of consumption

1. Carbonated drinks are mostly preferred by 67% consumers during afternoon and evening while it is a preferred beverage in morning for 6% of consumers and 8.70% consumers prefer carbonated drinks during night time.

Figure 4.14Consumer choice of beverage and preferred time.

Figure 4.142. Butter milk is mostly preferred during morning (before 12PM) and afternoon time (between 12PM and 3PM) by 45% of respondents. 15.3% of respondents like to have butter milk during evening time (between 3PM and 7PM) while 7.30% respondents prefer to consume butter milk during night time (after 7PM).3. 29.30% of respondents like to consume lassi at night time followed by 26% in evening, while 15.7% of respondents like to consume lassi in morning and 9.3% during afternoon.4. 54.7% of respondents like to have flavoured milk at night time i.e. after 7PM, 33.33% of respondents also like to consume it during morning time i.e. before 12PM. 26.3% of respondents like to purchase flavoured milk in evening followed by 10.3% in afternoon.4.11. Consumers preference of attributes while purchasing a beverage

Table 4.10 Overall preference of attributes of beverages

Table 4.10

1. From table 4.10, it can be inferred that with the average rating of 4.73 and standard deviation of 0.488, taste is the most important attribute that comes in consumers mind while making a purchase.2. Health, with an average preference rating of 4.03 is the 2nd most preferred attribute while purchasing a beverage. Price and availability are also important attributes having mean rating of 3.96 and 3.76 respectively.3. With a standard deviation of 1.359, respondents largely differ over their choice of quantity of beverages. However they give emphasis to quantity but it should not be compromised with the quality of the product.4. Respondents gave least preference to packaging and attractiveness of the beverage. This means that aesthetics do not play much important role in influencing consumer preference of beverages.Table 4.11 Preference of attributes of beverages according to age group

Table 4.11

1. Minors gave very high importance to taste factor while making a beverage purchase. Health and price are also important factors influencing purchase preference. Availability is not as much important factor for minors. They also prefer quantity, however aesthetics do not play much role in deciding their preference for purchasing beverages.

Figure 4.15 Preference of attributes of beverages according to age group

2. Above trend is also followed by youngsters and senior respondents. However they prefer price over health as attribute. Availability is an important factor as well for this age group.3. Middle aged respondents (25-40 year) and upper middle aged respondents (40-60 year) gave more importance to taste and health. However price, availability, attractiveness and quantity are also important attributes for this age group.

Table 4.12 Preference of attributes of beverages according to education level

Figure 4. 16 Preference of attributes of beverages according to education level

1. People having education till primary level are more price conscious. Taste and availability is also important factors influencing purchasing behavior. They do not give much importance to health and attractiveness and quantity matters to them.2. People having education till secondary level prefer taste, health, easy availability and price as major influential factor while making beverage purchase. Same trend is followed by respondents who are educated till senior secondary level.3. Graduates and post graduates gave highest importance to taste and health. However graduates are more price conscious than post graduates. This means people having higher education are not price conscious. Surprisingly post graduates also gave emphasis to quantity and packaging of beverages. Availability is an important issue for graduates but not for post graduates.

Table 4.12 Preference of attributes of beverages according to income level

1. Apart from taste, price is the next most important factor for the respondents having income level less than Rs 15000. Health and availability is also a concern for the respondents in this income group.2. For the respondents having income between Rs 15000-25000, health and availability are the most important factors. However packaging and quantity also seems to influence their purchase behavior.3. Taste, price and health are the most important attributes for the respondents in income group of Rs 25000-40000. Availability issue do not bother the respondent of this income group.4. For the higher income group, price is not a concerning factor while making purchase. However health, taste and packaging are the attributes which influence the purchasing behavior.

4.12. Overall purchase frequency of beverages.

Figure 4.17 Purchasing frequency of beverages

4.13. Purchase frequency of beverages according to age group

Table 4.13 Purchase frequency of carbonated beverages according to age group

Table 4.14 Purchase frequency of milk based beverages according to age group

1. From table 4.13, it can be seen that 46.5% of minors consume carbonated drinks more than once in a month, 7% are daily consumers and 30.2% of minor respondents consume carbonated beverages once in a week. Also 16.3% of minor respondents consume cold drinks only once in a month. Contrary, 55.8% of minors are daily consumers of milk based beverages. This might be due to parental pressure. 4.7% respondents consumes more than once in a week. 25.6% of respondents consumes milk based beverages once in a month as depicted in table 4.142. All respondents in the age group 18-25 year consume carbonated drinks atleast once in a week. 36.3% are daily consumers and 37.5% consumes more than once in a week as shown in table 4.13. This population mainly consists of college going students, so social status is a major factor boosting the sales of carbonated drinks in this age group. However only 21.3% of respondents in this age group are daily consumers of milk based beverages, 37.5% consumers prefer to take milk beverages more than once a week. 2.5% consumes only once in a month and 1.3% never consumes milk beverages.3. 64.5% of middle aged consumers (25-40 year) consume carbonated drinks only once in a month, 9.2% consumes it more than once in a week, 22.4% of respondents consume carbonated drinks only once in a week. 1.3% are daily consumers and 2.6% never drink carbonated beverages as shown in table 4.6. In case of milk beverages, 7.9% consumes daily, 21.1% once in a week and 34.2% each more than once in a week and once in a week. 2.6% respondents do not prefer milk beverages as shown in table 4.14.4. Upper middle aged people (40-60 year) are not frequent consumers of carbonated beverages which can be seen by the data as 78.6% respondents consume carbonated beverages only once in a month. No respondent is a daily consumer of it and 8.9% of respondents never consume carbonated beverages. However senior respondents gave varied responses as 15.6% are daily consumers while 13.3% never consumes. 86% of respondents purchase milk beverages atleast once in a week of which 17.9% are daily consumers in the age group 40-60 years. 35.6% of senior respondents consume milk beverages daily and 37.8% consumes more than once in a week. However majority sales is of butter milk.4.14. Purchase frequency of beverages according to occupation

Table 4.15 Purchase frequency of carbonated beverages according to occupation

Table 4.16 Purchase frequency of milk based beverages according to occupation

1. As shown in table 4.15, 29% of students, both school and college going, consumes carbonated beverages daily. 39% consumes more than once and 26% purchase once in a week. Similarly 34% of students purchase milk beverages daily, 21% purchase it more than once in a week and 31% purchase it once in a week. Only 13% consumes only once in a month and 1% never purchase milk beverages2. 50% of self-employed respondents make the purchase of carbonated drinks once in a month while 40.7% of respondents purchase milk beverages more than once in a month. Self-employed respondents are primarily shopkeepers and local businessmen. Similar trend is followed by salaried respondents. 3. 46.5% housewives consume carbonated drinks only once in a month, while 53.5% consumes milk beverages once in a week. This means carbonated drinks are mostly preferred by students while self-employed, salaried and housewives prefer milk beverages.

4.15. Purchase frequency of beverages according to income level

Table 4.17 Purchase frequency of carbonated beverages according to income

Table 4.18 Purchase frequency of milk based beverages according to income

1. Respondents in lower income level give mixed response about their preference of beverage. Maximum respondents in this income group prefers to take carbonated drinks more than once in a week and milk beverages once in a week. However 4.4% of respondents never purchase carbonated beverages. 2. Similarly in income group Rs15000-25000, 44.8% of respondents take carbonated beverages only once in a month while 29% like to consume milk beverages daily. These are mostly people having non sedentary jobs and prefers flavoured milk3. Respondents in higher income group are aware about health and usually consumes carbonated beverages only once in a month. However majority of this population is either a daily consumer of milk beverages or purchase it more than once in a week.

4.16. Purchase frequency of beverages according to gender

Figure 4.18 Purchase frequency of carbonated beverages according to gender

Figure 4.19 Purchase frequency of milk based beverages according to gender

As we can see in figure 4.19, only 10.7% of female respondents consumes milk beverages daily while their 32.4% male counterpart purchase daily. However there is not much difference in preference of carbonated beverages. 8.1% of females never purchase milk beverages. Also it can be infer from figure 4.18 that female are more health conscious than males as 30.9% of males consume carbonated beverages more than once in a week but only 17.9% females buy carbonated drinks more than once in a week.

4.17. Perceived factors by carbonated beverage consumers while purchasing carbonated beverages.

Table 4.19 Mean values of factors by carbonated drinks consumers for carbonated drinks

MeanStd. DeviationInterpretation

I consume cold drink when I feel thirsty3.831.003Agree

I consume cold drinks in parties & celebrations.3.851.003Agree

I consume cold drinks without any reason (just like that).3.75.932Agree

Price with quantity induces me to buy cold drinks.3.32.941Neither agree nor disagree

As a health drink I buy cold drink1.80.836Highly Disagree

As a status symbol I buy cold drink.3.271.031Neither agree nor disagree

The taste of it induces me to buy cold drink.3.59.843Agree

The variety induces me to buy cold drink.2.731.118Neither agree nor disagree

Season influences me to buy cold drink.4.10.933Highly Agree

Brand reputation induces me to buy cold drink3.291.115Neither agree nor disagree

Easy availability is an important factor while purchasing cold drink3.63.864Agree

I get influenced by advertisement to buy cold drink2.68.970Neither agree nor disagree

Soda (Fizziness) in cold drinks induced me to buy it3.46.943Neither agree nor disagree

1. According to Maslows hierarchy theory, thirst is one of the physiological need which determines consumer behavior. Consumers consider carbonated beverages as thirst quenching. Also consumer associate carbonated beverages with social factor like belongingness, acceptance, affection and friendship. External esteem factors such as status also plays an important role while making purchase.2. Respondents consider carbonated beverages as an impulse product and they are usually motivated by visibility of the product. Taste is also an important factor while purchasing carbonated drinks. 3. A major portion of carbonated beverage consumers associate their status with the consumption of carbonated beverages. Season also influence their choice of beverage and consumption increases during summers. 4. They prefer to take branded beverages, however they are not compelled to buy the beverage due to brand image. They are already exposed to so many advertisements regarding carbonated beverages that now it will not affect their purchasing behavior. 5. Easy availability is a major factor while making purchasing decision. Low price of carbonated drinks compel respondents to buy.

Table 4.20 Mean values of factors by carbonated drinks consumers for milk beveragesMeanStd. DeviationTranslate

I consume milk beverages when I feel thirsty2.30.981Disagree

I consume milk beverages in parties & celebrations.2.471.043Disagree

I consume milk beverages without any reason (just like that).3.27.974Neither agree nor disagree

Price with quantity induces me to buy milk beverages.2.84.888Neither agree nor disagree

As a health drink I buy milk beverages.4.45.986Highly Agree

As a status symbol I buy milk beverages.2.39.952Disagree

The taste of it induces me to buy milk beverages.3.77.769Agree

The variety induces me to buy milk beverages.3.151.027Neither agree nor disagree

Season influences me to buy milk beverages.2.131.003Highly Disagree

Brand reputation induces me to buy milk beverages2.631.151Neither agree nor disagree

Easy availability is an important factor while purchasing milk beverages3.32.986Neither agree nor disagree

I get influenced by advertisement to buy milk beverages3.181.054Neither agree nor disagree

1. Respondents who prefer to take carbonated beverages do not prefer milk based beverages as thirst quenching beverage. Also they do not prefer to consume milk beverages in parties and celebrations which means that respondents do not associate milk beverages with social factors. 2. Also season change do not affect their choice of beverage. They consume milk beverages as health drink. They consider milk beverage as an impulse product and usually get influenced by advertisement and visibility. 3. Brand reputation do not play much important role in their preference. However taste of milk beverages compel them to buy it. Variety and price are also considered by respondents who prefer carbonated beverages. 4. In peer group, they consider drinking milk beverages as childish. High degree of standard variation shows that respondent gave varied responses to the questionnaire.

Table 4.21 Mean values of factors by milk beverage consumers for carbonated beverages

1. Consumers who prefer to take milk beverages do not consider carbonated drinks as thirst quenching as the mean rating is 2.47. However high standard deviation depicts varied responses and it may not represent the actual behavior.2. They usually prefer to take carbonated drinks in parties and celebrations as they consider cold drinks as friendly and social. However they do not consider consuming carbonated beverage as status symbol. Also visibility and advertisements of carbonated beverages usually do not influence their choice. This might be due to loyalty towards milk based beverages.3. As shown in table 4.21, the respondents do not consider taste as a major factor to purchase carbonated drinks. However season has some influence on their purchasing behavior.4. Similarly brand reputation do not have much effect on purchasing preference of carbonated drinks.5. However respondents consider easy availability of carbonated drinks as a factor which may influence them to purchase these. On contrary, respondents do not consider carbonated drinks as impulse product as shown in table 4.21.

Table 4.21 Mean values of factors by milk beverage consumers for milk based beverages

1. Respondents who prefer to purchase milk based beverages consider milk beverages as thirst quenching and prefer butter milk over carbonated drinks.2. Also they prefer to have lassi and butter milk in parties and celebrations, however they do not consider it as a way to socialize with people. Also they do not consider that drinking milk beverages will enhance their social status.3. Respondents consider milk beverages as an impulse product and their purchase behavior is motivated by visibility of the product. They also consider milk beverages as refreshing hunger satiating product and prefer to take butter milk or thick lassi over flavoured milk. This is also the reason that they prefer price and quantity as one of the motivating factor to purchase milk beverages.4. Taste is the most important factor that influence the purchase intention of consumers and they like to consume various available flavors. Regular customer do not get much influenced by seasonal variation. Also there purchasing behavior depends upon the availability of milk beverages. If available easily, there purchasing frequency tends to increase.5. Brand reputation do not matter much and they consider local brands like Madhvi ahead of taste and quality. Also they think that advertisement about products help to add new customers and retaining existing customers.

Chapter 5 Cluster Analysis5.1 Segmentation

Table 5.1 Variance Ratio Criterion and Omega value table.From the clustering analysis the result so far we have obtained denotes that we should go with the 3 cluster solution since the Omega value of the cluster 3 taking the responses of various variables of all 300 respondents is the lowest. Thus we can further obtain results about the cluster membership of the respondents in all the three clusters and their distribution in the clusters as carbonated beverage preferring and milk based beverage preferring consumer. We can also further draw perceptual maps taking the character attributes of the beverages of all the three clusters and thus we can determine which cluster is preferring which attributes the most and that will also help in concentrating upon the attributes during our marketing campaigns and also we will be able to determine which target segment to choose next in order to increasing the market share of the beverage market.

Respondent Distribution in different ClustersClusterNo. of Respondents

Cluster 175

Cluster 2108

Cluster 3117

Chapter 6Factor AnalysisCluster 1

Table 6.1 Response Variance Explanation table for Cluster 1.

Table 6.2 Regression factor score table of beverage types for Cluster 1

Table 6.3 Component Matrix table for Cluster 1.

Figure 6.1 Perceptual Map of Cluster 1 Respondents.Cluster 2

Table 6.4 Response Variance Explanation table for Cluster 2.

Table 6.5 Regression factor score table of beverage types for Cluster 2.

Table 6.6 Component Matrix table for Cluster 2.

Figure 6.2 Perceptual Map of Cluster 2 Respondents.Cluster 3

Table 6.7 Response Variance Explanation table for Cluster 3.

Table 6.8 Regression factor score table of beverage types for Cluster 3.

Table 6.9 Component Matrix table for Cluster 3.

Figure 6.3 Perceptual Map of Cluster 3 Respondents.

Cluster 1In cluster 1 respondents prefer carbonated beverages because of its easy availability, Brand Value which is nothing due to their endorsement by popular public figures or celebrities in Advertisement and the repeated advertisement in televisions and other forms. Whereas whenever they prefer milk based beverages then they do so keeping in mind the taste factor and the health benefits that they would derive out of consuming any milk based beverages instead of any carbonated beverages. Also it is evident from the perceptual map that whenever they feel thirsty, their thirst quenching attitude ultimately drives them to prefer milk based beverages. Whereas the last factor influencing this cluster is Parties and Celebrations which has a dual effect on both the beverage type.

Cluster2In cluster 2 again the same thing is evident that the respondents prefer to take milk based beverages keeping in mind the taste factor and the health benefits that they would derive from consuming those milk based beverages instead of carbonated beverages. The only thing added to this is that they also perceive that there is no issues with the availability of the milk based beverages. Whereas the carbonated beverages are only preferred on the grounds of their thirst quenching reason and seasonal influence. The thirst quenching factor is due to the water base of the beverage and the low viscosity of the base used whereas the seasonal influence is that during the scorching hot summer season anybody feeling thirsty would go for the thirst quenching attribute of any beverage.

Cluster 3In case of cluster 3 respondents the milk based beverages enjoys consumer preference only on the basis of the health benefit factor that they perceive they would gain on consuming the milk based beverages. Whereas the carbonated beverages enjoy consumer preference due several other factor like the status symbol that the consumer would represent while taking a carbonated beverage instead of a milk beverage which at times considered to be a desi drink, it also enjoys the favor of brand reputation due to excessive advertisement on print media and televisions, seasonal influence, thirst quenching factor and popularity in parties and celebrations which is again somewhat influenced by the status factor. But coming to the advertisement it plays a dual role but somewhat skewed towards the carbonated beverages.

Chapter: 7RESULTS AND CONCLUSIONS

The general and demographic characteristics of consumer results indicated that 52% of total respondents belongs to 18-40 years of age followed by 18.7% in age group 40-60 years, 15% in age group of above 60 years and 14.3% of minors. About 63% are male and 37% are female of which 43% are unmarried. 44% of respondents are graduate followed by 29% senior secondary and 16% secondary educated. Post graduates and primary educated counts 3% and 8% respectively. 36% of respondents are self-employed personals followed by 33.3% students. Salaried and housewives counts 15% and 14% respectively. 60% of participants earns less than Rs 15000 per month while 20% participants earns in between Rs 15000-25000. 63% of respondents belongs to rural area while 27% belongs to tier 3 cities.

The study shows that market gap of milk based beverages against carbonated drinks is 47.3%. Also 70% of minors and 57.5% of youngsters prefer carbonated beverages. However 52.6% of middle aged people and 77% of upper middle aged prefer to take milk based beverages. 47.3 % of both male and female prefer carbonated beverages. Carbonated drinks are mostly preferred by respondents having education till primary level and graduates, while secondary, senior secondary and post graduates prefer milk based beverages. The respondents whose income is less than Rs 15000 prefers carbonated beverages over milk based beverages.

Respondents gave highest mean rating to buttermilk followed by lassi and carbonated beverages. Butter milk is highly preferred by both milk beverages consumers and carbonated beverages consumer. The respondents who prefers carbonated beverages gave an average rating of 3.1 to flavored milk. Respondents in mid and upper mid-level income usually prefers lassi. However respondents in higher income bracket prefer to take thick lassi, which is much costlier than other beverages. With the average rating of 4.73 and standard deviation of 0.488, taste is the most important attribute that comes in consumers mind while making a purchase followed by health with an average preference rating of 4.03. Aesthetics do not play much important role in influencing consumer preference of beverages. Price and availability are also important attributes having mean rating of 3.96 and 3.76 respectively. For the respondents having income between Rs 15000-25000, health and availability are the most important factors. For the higher income group, price is not a concerning factor while making purchase.

46.5% of minors consume carbonated drinks more than once in a month. Contrary, 55.8% of minors are daily consumers of milk based beverages. This might be due to parental pressure. In age group of 18-25 year, social status is a major factor boosting the sales of carbonated drinks. 24.3 % 64.5% of middle aged consumers (25-40 year) consume carbonated drinks only once in a month, 22.4% of respondents consume carbonated drinks only once in a week.

24.3% respondents purchase milk beverages daily as compared to 13.3% of carbonated drinks, 31% consume milk beverages more than once when compared to 26% of carbonated drinks. Carbonated drinks are generally considered as thirst quenching and people prefer to have them in parties and celebrations as they consider them as an easy way to mingle with people. Also they dont need a reason to purchase carbonated beverages and they have impulsive response towards these beverages. Season plays a very important role in deciding consumer preference. Consumers are generally brand aware and price conscious and are motivated by advertisement to purchase the product. They consume milk beverages as health drink. In peer group, they consider drinking milk beverages as childish. They also consider milk beverages as refreshing hunger satiating product and prefer to take butter milk or thick lassi over flavoured milk. This is also the reason that they prefer price and quantity as one of the motivating factor to purchase milk beverages.

Chapter: 8RECOMMENDATIONS

From the data gathered and the analysis of this report, it has been established that while thirst and price are important driver in the conscious mind of the consumers, underlying drivers such as brand, health concern and social image consumption mode are the final factors determining the type of purchase made by the consumers.Improved distribution channel would help to increase the availability of the products. Increasing the number of outlets, preferably at strategic locations would help in increasing the sales. Also provision of portable outlets outside school and colleges would make the availability easier.From our study, it has also been revealed that milk based beverages are impulse products and increasing visibility of the product line through advertisements and shelf space would help in increasing the product awareness and sales volume.Proper arrangements for display of product line at outlets would help in adding new customer to the outlets as they are meant for milk selling and facing difficulties in adding new customer.Since our target segment is aged between 18-25 years, therefore, an effective strategy to build branding is to communicate at this target group in ways that present a fun and social image. This could be achieved through viral marketing over the internet, having special clubs on Facebook and other social media channels. Also it is necessary to have a strong opinion maker endorsing the brand to make people aware about available product line and focus on the social benefit, i.e. to be part of the in group. As thirst and refreshment are key triggers of the purchase, the final objective of the communication plan will be to provide this reassurance that the product does indeed quench the thirst, provide the ultimate refreshment, on top of providing the ultimate social integration tool and this can be achieved through proper advertisement strategies.