FACTORS AFFECTING THE BUYING DECISION OF THE BEVERAGE

INDUSTRY

ABSTRACT

The industry of beverages is growing very rapidly as the beverages are considered as the

worldwide business and running a business in today’s globalized world does not often easy

time. The research is conducted to find out the factors that influence the consumer buying

behavior that why the people in Karachi prefer to buy international cola instead of local cola.

The factors are Brand name, taste, packaging and advertisement. In this research qualitative

approach is used for the collection of data through primary source. Questionnaires were used

for the collection of the data from consumer in order to get first-hand knowledge. The sample

size of this population of the research is 70.

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INTRODUCTION

Beverages are considered as the worldwide business among the world and this business has a

large scope along with greater competition. Running a business in today's globalized world does

not often offer easy times, as Pakistan normally scores quite low on global competitiveness

indicators. One such industry in Pakistan, that seems to be bucking this trend however, is the

Beverage industry.

The industry of beverages grown over the time in Pakistan. The industry produces juice colas

squashes and milk. With about almost 170 units are in operation throughout the country. Both

upstream and downstream businesses have developed and are flourishing.

Problem Statement

What are the factors that influence the consumer buying behavior that why they prefer

international cola over local cola?

Is brand name influences the consumer buying behavior that why people prefer international cola

over local cola?

Are taste influences the consumer buying behavior that why people prefer international cola over

local cola?

Is packaging influences the consumer buying behavior that why people prefer international cola

over local cola?

Is advertisement influences the consumer buying behavior that why people prefer international

cola over local cola?

Purpose of Study

The purpose of the study is to find out the factors which have significant effect of consumer

buying behavior while purchasing soft drinks.

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General Purpose

To develop a study on determinants of consumer buying behavior that helps every soft drinks

firm in the world to work on their growth of sales.

Specific Purpose

To design a work frame that helps the Pakistani colas firms to evaluate the factors that helps to

identify the areas why their sales are affected by international competitors.

Basic Purpose

Within the last few year as the beverages has now become the fashion for serving beverages on

every event like marriages, parties etc. and sometimes after meal as beverages are now become

the supporting complimentary items after meal. Therefore, beverages industry requires lots of

effort in order to compete in this industry.

Theoretical Framework

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Consumer Buying

Behavior

Packaging

Advertisement

Brand Name

Taste

Hypothesis/Aims/Objectives

H○: Brand name does not have significant effects on consumer buying behavior relating to

beverages in Karachi.

H1: Brand name has significant effects on consumer buying behavior relating to beverages in

Karachi.

H○: Taste does not have significant effects on consumer buying behavior relating to beverages in

Karachi.

H2: Taste has significant effects on consumer buying behavior relating to beverages in Karachi.

H○: Packaging does not have significant effects on consumer buying behavior relating to

beverages in Karachi.

H3: Packaging has significant effects on consumer buying behavior relating to beverages in

Karachi.

H○: Advertisement does not have significant effects on consumer buying behavior relating to

beverages in Karachi.

H4: Advertisement has significant effects on consumer buying behavior relating to beverages in

Karachi.

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LITERATURE RIVIEW

There are many determinants of consumer buying behavior the one factor that influence the

consumers buying behavior is self-esteem as the research of which is conduct by Tariq Jalees

show that there some factors that influence the consumer behavior which are post purchase guilt

tendency to spend reactive aspects and most importantly self-esteem. These all factors have a

great impact on the buying behavior of consumers as people care about their status and they want

to have other people have good opinion about them. (Jalees, 2007)

There are many other factors that are important with respect to buying behavior the other factor

that is influence to the buying behavior is brand locality. It is important because people now a

days are brand loyal as they like to buy with the same manufacturer because they like there

product and they have faith in their product. Consumers are so loyal to the product that

consumers do not want to change present brand. Nourishment is the main important between

choosing among the different brands of healthy foods or beverages. Consumers are very

conscious towards the healthy food it means they will go for the quality in foods that they want

hygienic and healthy food. (Motwani & Agarwal, 2012)

As we all know that now a days advertisement is directly proportional to the product sale as

much as you have advertise the product you will get the results as quickly. Nowadays there are

many types of advertisement for e.g. Electronic Media, Newspaper, Magazine, Radio, Bill

Board, Online etc. It is the basic need such as a product for sale. Advertisement tends to possess

and emotionally bond between product and consumers even this emotional inheritance enhances

the consumer towards the brand. As we all seen that the international colas companies spend a

big amount of money towards advertisement as compare to our Pakistani local companies. The

outcomes of the research study mainly demonstrate that there retreats a feeble companionship

between natural reactions with the buyer purchasing behavior. In the research that purchasers

buy item in the territories of their areas by passionate reaction, rather than natural reaction. As in

the research it shows that consumer buys those items form which shop kippers are passionately

connected. (Saleem & Saleem, 2011)

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Popular beverages have also effects on the consumer’s consumption worldwide. There are some

factors that make these beverages popular like price, color, brand name, taste etc. popularity of a

particular beverage depends on its taste, color, brand loyalty these factors are highly effects the

consumption of the beverages. Tastes are considered most important among these factors with

respect to price, packaging color, brand name etc. because people choose especially for products

like beverages according to their taste. But taste can be persisted for a longer period of time but it

can be changed. (Ghosh & Arindam, 2013)

Clients have moral goals and taste preferences, it appeared that accommodation is liable to

influence their choice. As in the study shows that consumer buying behavior is also affected by

the consumers loyalty the study also shows that the environment also affect the consumption of

the beverages if there is a relaxing atmosphere consumer tend to consume more beverages.

Environment and weather conditions matters a lot in case of every types of beverages. The

consumption of beverages effected as the weather and environmental changes. (Abel, 2009)

It was affirmed that clients decide to make their buys from a shop where much time is not

squandered to find answers for their requirements for instance, placing the shop exceptionally

near the client, a shop which offers reasonable costs, a shop which treats clients with deference, a

shop which takes care of clients issue, a shop where the deals faculty associate enthusiastically

with clients, and a shop which propels the clients for instance, offering normal bargains

advancement. (Asamoah, 2012)

Hypermarkets are also considered as the place where people use to buy FMCGs product. Mostly

people use to visit hypermarkets for buying of FMCGs product in bulk quantity for weekly and

monthly planned budgets and purchase product like beverages that are usually unstructured that

they just attract from packaging and willing to buy such products. Therefore, it is concluded in

the research that Czech people preferred hypermarkets for the purchasing of beverages. Beside

that 4P`s also play important role in the success of any product in way that if correct need and

want that are people expecting from any product are being recognized so that satisfaction level is

utilized fully, and others place, price and promotion are allocated considering competitors. .

Quality, packaging, advertisement, price and brand also have their significant importance that

attracts consumers while products choosing among different brands. (Foret & Prochazka, 2006)

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Consumer behavior varies from person to person with respect to time. Consumer behaviors

matters a lot in the consumer`s purchasing decisions. While launching any product cognitive and

emotional elements are being involved according to the norms and culture that cover the

specified target area which attracts customers towards purchasing of products. Consumer buying

behavior is being considered whether it is cognitive or emotional in order to influence according

to their needs. Alcoholic and non-alcoholic drinks are best example how it effects consumer

buying behavior especially in Muslim countries that alcoholic drinks are not advertise

commercially and openly because of Islamic obligations therefore, alcoholic beverages

companies are not likelihood to launched their products in such countries due to emotional

factors. (Pelau, 2012)

Product packaging is the sources of indirect communication that derive the need and components

present in the products for FMCGs products. How much the product packaging is designed

appropriately considering all elements like pricing, colors, ingredients and nutritional facts etc.

people are more willing to for such type products and also among with brand logo as brand

experience is main factor that people usually consider most while purchasing products. People

are brand loyal and purchase product among their specific brands so that brand experience are

also main aspect for the purchase decision when consumer pay for any product. As it is

concluded that how strong brand name is, the lesser contribution are being required for the

consumer criteria for the challenging consumer behavior development. (Variawa, 2010)

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RESEARCH METHODOLOGY

This research is an descriptive study with data collected from the primary source. Questionnaires

were used for the collection of the data from consumers in order to get the first-hand knowledge.

This basically relates to the collection of primary data.

For this study different respondents have been surveyed with their demographic characteristics

are mentioned below,

House hold income: 8000 & above.

Age group: 20 & above.

Education: Matriculation & above.

Residence of different towns.

Population

For my research I have selected the population of Karachi as Karachi is the heart of the Pakistan

and the estimated population of Karachi is about 13.38 million on 9 Dec, 2013. (Malik, 2013)

Sample

Sample size for Karachi population is calculated through sample size calculator and according to

it the appropriate sample size for Karachi population is 68 in which acceptance of error margin is

10% along with confidential level is 90%. (http://www.raosoft.com/samplesize.html)

Sample Design

Non- probability sampling method is used for the gathering of data in which respondent are

selected on random basis as the people who use beverages can be anyone but still there is age

limitation i.e. above 20 years for making judgmental and reasonable responses and it is necessary

the respondent must be a resident of Karachi.

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Research Tools

Following are the tools used in this research.

Questionnaire

Microsoft Word

Microsoft Excel

Steps in Instrument Designing :-

Close ended and Likert scale questionnaire has been designed for this research. Close ended

questionnaire are those questionnaire in which there is only specified options for the question

and Likert scales questionnaire has ranking from 1-5 for the calculation of weights of respondent

opinions.

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