8/10/2019 Proposal for Consumption of beverages

1/5

Topic 1

Demographics

Demographics are the characteristics of any population regarding with size, age, gender,

density, location, occupation, race and other statistic. Demographics are major interest of any

organization which is operating in many countries with several product lines. Population of

the world is increasing at an explosive rate, now it has exceeds to 7.1 billion people and will

grow up to 8.1 billion at the end of 2030. The top ten major contributor counters to this

growth are India, Pakistan, Bangladesh, Nigeria, Russia, Japan, United States, Indonesia,

Brazil and China. (http://www.internetworldstats.com/stats8.htm). A large and highly diverse

population poses both challenges and opportunities to big organizations which are operating

in many countries.

Changes in the world demographics environment have major implications for business. For

example, in Pakistan up to 40 % of the population are young people (14 years old) out of

whom 14% are 4 years old or younger. Large population with a 173 million young people

offers a great opportunity to businesses. E.g. In august 2000 by focusing on this situation

Proctor and Gamble introduced world famous product named as Pampers (disposable

pampers brand) in Pakistan. Dominant percentage of this population was using cloth nappiesat that time. Pampers brand was committed to baby care and development; it reached out to

mothers of new born babies through hospital education programs. Pampers also approached

to low income families, hard to reach areas through mobiles and they also educates the

Pakistani mothers about baby care. And outcome of all these programs was a dominant

market share as award for P&G. so as the good business person we have to analyse the target

market to offer competitive goods and services. This shows the importance of demographics

that plays a vital role before offering any product into the market.

Following below are the most important demographics characteristics of any population.

Age

Gender

Density

Location

Occupation

Race

http://www.internetworldstats.com/stats8.htmhttp://www.internetworldstats.com/stats8.htmhttp://www.internetworldstats.com/stats8.htmhttp://www.internetworldstats.com/stats8.htm

8/10/2019 Proposal for Consumption of beverages

2/5

Topic 2

Beverages

Liquid consumption, conspicuously water, is necessary for good health. Water is a major

component which plays an important role in almost all body functions and water is also a key

element of every tissue, organ and cell (Kleiner, 1999). Whereas some water derives from

food, massive amount of it comes from beverages, either one as pure water or it can also be a

part of anybeveragefor instance, soft drinks, fruit juices, beer, milk, coffee and tea.Liquid

refreshments (beverages) are also significant factor of nutrition. It subsidize to vigorous

eating by facilitating to come across Food Guide endorsements for usage of vegetables, fruits

and dairy products.On the other hand beverages, particularly soft drinks which are rich in

added sugar can charge over recommended level of calories. In 1996 Nielsen S, Siega A and

Popkin B conducted a study that ~50% of the increase in daily caloric is coming from

consumption of calorically sweetened beverages, such as soda. In addition, beverages are also

liable for additional consumption of alcohol and caffeine,colorings, preservations and other

ingredients (Catalogue H164-38/1-2007E) Ottawa: Health Canada, 2007).

Drinks which usually known as soft drinks are Coke,Soda, Fizzy drinks, Minerals, Tonic,

Sparkling water, Seltzer or Carbonated drinks, beverages that normally contains water,flavoring agent and sweetener. Sweetener might be fruit juice, high fructose corn syrup, sugar

or sugar substitutes (in diet drinks case). Soft drinks are known as soft because it contains

small amount less than 0.5 % of alcohol in contrast of hard drinks (alcoholic beverages).

Tea fruit juices and some other nonalcoholic drinks are technically soft drinks according to

this definition but usually not referred to as such.

Types of beverage

(A Comparative Study on Consumption Patterns of Soft Drinks and Fruit Juices article)

Alcoholic beverages

Hot beverage

Soft drinks

Non-Alcohol beverages

Fruit juice

Other (soup and yogurt)

8/10/2019 Proposal for Consumption of beverages

3/5

Topic 3

Literature Review:

Brand preference

In the 1960 The American Marketing Association (AMA) defined as is a name, term, sign,

symbol, or design, or a combination of them, intended to identify the goods and services of

one seller or group of sellers and differentiate them from those of competitors. (Keller,

1998:2)

For consumers, when deciding between brands which are in the marketplace will include

brands as an element to determine the qualities of the product rather than employing their

time to enhance their knowledge of the product in information searching activities. Therefore,

consumers use brands as cues to make decisions to purchase or try products (Ger et al.,

1993).

Different studies has been conducted to understand the consumers preferences and found that

today demand of a brand is depend on consumers past experiences. (Murphy and Becker

1988) willing ness to pay might be the function of usage which could directly relate to

expected utility, through switching costs, or through beliefs about quality. Childhood

experiences can also play a vibrant share to determine brand preferences (Sirgy 1997).

According to these set of assumptions, accumulated stock of consumers preferences may be

an asset for inescapable firms and a source of long-term survive. In 1956 Bain found that the

benefit to develop sellers ensuing from preference of consumer for their products as opposed

to potential entrant goods as on average larger and more frequent in occurrence at the large

values than other barrier to entry (p. 216).

Brand preferences are used to measure the brand loyalty, when a customer selects a particular

brand in presence of certain competing brands but if that brand is not available in market only

then will accept substitutes. The degree to which customer prefer to buy one brand over

another is developed through strong and clear understanding value expectations. Availability

and equality of price are assumption used to measure the brand preferences, consumer has

more choices and high expectations than ever, to build loyal customers brands has to deliver

more than expectation by offering them value added goods and services.

Many studies of adoption have been used to elaborate that how consumers made preferences

for services and products (Klein AND Tornasky, 1982; Rogers, 1995; Charlotte, 1999;

Mason, 1990). In general, those theories put emphasis on the significance of product features,risk, vanished, relative advantage, social approval, triability.

8/10/2019 Proposal for Consumption of beverages

4/5

Murphy and Becker, 1988 found that brand preference might be a function of past experience

that can directly relate to expected utility, (Klemperer, 1987) through switching cost or views

about quality. It could depend on past exposure to advertising (Schmalensee, 1983,

Doraszelski and Mankovich 2007), or past observations of the behaviour of others as in

Ellison and Fundenberg (1995). At the extreme, brand preference could be entirely

determined by experience in childhood (Berkman, Lindquist and Sirgy, 1997). All have

tremendous impact on the position of our brand in the consumers preference set, but the

relative importance of each factor depends on the nature of industry under consideration,

location and social characteristics of the consumer of different brands.

There are at least three classes of methodologies to measure brand preference directly. Survey

questions, brand choice measure, and constant sum measure. Our study of brand preference in

the beer category adopted the survey question measurement of brand preference.

Brand preference in soft drinks sector:

William R. George conducted a study in (1999) and unfolds the responsible factors

for brand preferences of beverage industry. When alternatives are functionally similar

Consumer appear with high willingness to pay for some certain brands.(Dekimpe et al. 1997)

majority of the buyers particularly purchase a single brand of cola, beer or margarine in

prescience of several brands with similar prices, only just because of perceived taste. A hugenumber of consumers buy branded medications when there are chemically equivalent

substitutes are accessible at the same market for much lower prices. (Kyle, Berndt, and Ling

2002).consumers are willing to pay more for homogenous items like CDs and books from

branded online stores(Brynjolfsson and Smith 2001)

This brand preference is influenced by various factors. In the identification of factors

affecting the brand preference, it was concluded that Brand persona is the most effective

factor that affects the brand preference. This Brand persona deals with the personality aspects

or the external attributes of brand, thus it can be said that consumer prefer any brand by

looking at the external attributes of a brand.

Factors that can effect brand preferences

Taste or health

Consumer awareness

consumption pattern of soft drink product

Reference Group Influence

Situational Variation of the Consumer

8/10/2019 Proposal for Consumption of beverages

5/5

Friends and family

Social status

Price

Country of origin

Quality