a study on marketing activities & consumer opiniions

8/2/2019 A Study on Marketing Activities & Consumer Opiniions

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A PROJECT REPORTON

Marketing Activities Consumer opinionsWith Reference TO VIMAL BOTTILING COMPANY Pvt. Ltd

samalkot.

In Partial Fulfillment of the RequirementFor The A ward of the Degree

In

MASTER OF BUSINESS ADMINISTRATIONBY

y.chakradhararajaUnder the Esteemed Guidance of

Mr. Dr.K.pravinkumarDEPARTMENT OF MANAGEMENT STUDIES

Ramana Institute of Technology2010-2012.


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DECLARATION

I, Mr.Y CHAKRADHARARAJA here by declare that this project reportentitled ASTUDY ON Marketing Activities Consumer opinionsM/sVIMAL BOTTILING COMPANY Pvt. Ltd is a benefited work done

by me to Ramana Institute of Technology COLLEGE, tadepalligudem. Ifurther declare that this work is of my own and has not been submitted in

part (or) full for the award of my degree.

.

Y.CHAKRADHARARJAMBA-Final year

(2010-2012)


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ACKNOWLEDGEMENT

I take this opportunity to express my sincere gratitude to the staffof VIMAL BOTTILING COMPANY Pvt.Ltd, SAMALKOT-533440 andespecially Mr.channel distributor For this guidance. Suggestion and kind co-operation without which would not have been possible my project works.

I am thankful to my project guide Mr. Dr., .K.pravinkumar Headof the Department. Ramana Institute of Technology COLLEGE who helpedme with their valuable suggestions in carrying out my project.

I would also endorse my thanks to my project guideMis. Dr.AMBICA faculty, Maharajas Post Graduation College.

My heartfelt gratitude to my parents and friends for their moralsupport in shaping my project, which was really commendable. This projectwould not have been possible at all without their extreme cooperation,almost patience and value contribution that had been the motivation factor.

Signature ofthe Student

Y.CHAKRADHARAJA


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CHAPTER - I NEED FOR THE STUDY

OBJECTIVESMETHODOLOGYLIMITATIONS


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SOFT DRINKS IN INDIA

Our soft drinks in India industry profile is an essential resource for top-leveldata and analysis covering the soft drinks industry. It includes detailed dataon market size and segmentation, plan textual analysis of the key trends andcompetitive landscape. Demographic information and descriptions of theleading companies.

Scope

Contains an executive summary and data on value, volume andsegmentation. Provides textual analysis of the industry prospects,competitive landscape and leading companies includes a five-year forecastof the industry supported by the key macroeconomic and demographic dataaffecting the market

Highlights

Detailed information is include on market size, measured by both value andvolume market shares are covered by manufacturer and/or brand distributionchannels are also analyzed why you should buy this report spot future trendsand developments inform your business decisions add weight to

presentations and marketing materials save time carrying out-level research.


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THE MARKET FOR SOFT DRINKS IN INDIA

Total sales of soft drinks in India amounted to Rs 111 billion and almost3,272 million liters in 2002. with growth of around 7% in current value and17% in volume terms in that year, sales grew mostly on the back of renewedinterest in carbonates as a result of supply-led strategies, strong demand for

bottled water and interest in 100% reconstituted juices. In-depth individualcountry reports are available for 52 soft drinks markets. Analysis includesthe latest on trade vs. off trade sales statistics, comprehensive sector sales

breakdowns and company and brand share data. Use our soft drinks analysisto develop market strategy, evaluate opportunities and threats and anticipateindustry developments.

SOFT DRINKS

Introduction

Soft drink market size for FY00 was around 270 m.n cases(6480mn bottles). The market witnessed 5-6% growth in the early90s.Presently the market growth has growth rate of 7-8% per annum comparedto 22% growth rate in the previous year. The market size for FY01 isexpected to be 7000 mn bottles.

Soft Drink Production area

The market preference is highly regional based. While cola drinks have mainmarkets in mero cities and northern states of up, Punjab, Haryana etc. orange


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flavored drinks are popular in southern states. Sodas too are sold largely insouthern states besides sales through bars. Western markets have preferencetowards mango-flavored drinks. Diet coke presently constitutes just 0.7% ofthe total carbonated beverage market.

Growth promotional activities

The government has adopted liberalized policies for the soft drink trade togive the industry a boast and promote the Indian brands internationally.Although the import and manufacture of international brands like Pepsi andcoke is enhanced in India the local brands are being stabilized byadvertisements, good quality and low cost.

The soft drinks market till early 1990s was in hands of domestic players like

campa, thumps up, limca etc but with opening up of economy and coming ofMNC players Pepsi and coke the market has come totally under theircontrol.

The distribution network of coca cola had 6.5 lakh outlets across the countryin FY00, which the company is planning to increases to 8 lakhs outletsacross the country during FY00, which it is planning to increases to 7.5 lakh

by FY01.

Types

Soft drinks are available in glass bottles aluminum cans and PET bottles forhome consumption. Fountains also dispense them in disposable containers

Non-alcoholic soft drink beverage market can be divided into fruit drinksand soft drinks. Soft drinks can be further divided into carbonated and non-carbonated drinks. Cola lemon and orange are carbonated drinks whilemango drinks come under non-carbonated category.

The market can also be segment on the basis of types of products into cola

products and non-cola products. Cola products account for nearly 61-62% ofthe total soft drinks market. The brands that fall in this category are Pepsi,coca-cola, thump up, diet coke, and diet Pepsi etc. Non-cola segment, whichconstitutes 36%, can be divided into 4 categories based on the types offlavors available, namely: orange, cloudy lime, clear lime and mango.


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The Indian government forced coca-cola out of the country in 1977. Thecompany return in October 1993 coincided with the arrival of its archrivalPepsi. The United States multinationals now own 90 factories in India: coca-cola 52 and Pepsi 38. They describe these as bottling plants; actually theyare pumping stations, each of which extracts up to 1.5m liters of water a dayfrom the ground. It takes nine liters of clean water to manufacture a liter ofcoke.

By Vandana Shiva and translated by Donald Hounam

The process used in manufacturing these soft drinks are inherentlydamaging. The extraction of ground water deprives poor people of theirfundamental right of access to clean water. The factories spew out toxicwaste that threatens health and the environment. And factories spew out

toxic waste that threatens health and the environment. And the productsthemselves are harmful-the Indian parliament has set up an up a jointcommittee to inquire into the presence of pesticide residues.

In march 2000 coca-cola opened a plant at plachimada, a village in thepalakkad district of the southern state of kerala, intended to produce 1.2mbottles of coca-cola, fanta, sprite, limca, thumbs up, kinely soda and maazaevery day. The conditional license granted by the local panchayat (villagecouncil) authorized the use of motorized pumps, but the company drilledmore than six wells and illegally installed high-powered electric pumps toextract millions of liters of pure water. The level of the water table fell from45 to 150 meters below the surface.

Coca-cola then polluted what little water it had not stolen from thecommunity. It started by dumping waste outside its premises. During therainy season, this spread into paddy fields, canals and wells, causing aserious health hazard. The company abandoned this practice and began

pumping dirty water into dry boreholes that had been drilled on-site for thedisposal of solid waste. This contaminated the aquifers.

As the water supply deteriorated, the total adivasi 1 women had to travelabout 5km to fetch drinkable water. A journalist at the daily newspapermathrubhumi, virender kumar, pointed out that during the time this tookthem, soft drinks would come out of the plant by the truck-load2. Thewomen organized a dharma (sit-in) outside the factory gates to protestagainst the depletion of the groundwater.


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Because of coca-colas activities, 260 wells-sunk by the authorities to supplydrinking water and meet irrigation needs have run dry. This part of keralais known as the rice bowl but agricultural yields have plummeted. Worse,coca-cola has been distributing the toxic waste from its factory to thevillagers as free fertilizer. Analysis has shown that this sludge is rich incadmium and lead, both carcinogenic.

Tribal and farming representatives have protested about the serious damageto harvests caused by contamination of aquifers and springs, and byindiscriminate drilling. They have particularly called for measure to protecttraditional sources of drinking water, preserve ponds and water tanks, andmaintain navigable waterways and canals.

When coca-cola refused to account for its practices, the panchayat withdrawits operating license. It has been alleged that the company responded byoffering the councils president, Anil Krishnan, a 300m-rupee bribe ($6.8m),which he refused. But the loss of the license did not cost them the support ofthe state government, which awarded coca-cola a subsidy of 2m rupeesunder its regional industrial policy. Pepsi and coca-cola have secured similargrants in all the Indian states where they have set up factories, although their

products have negligible nutritional value compared with traditional drinkssuch as nimbus pani, lassie, panna and sattu.

Nor does the damage inflicted upon the food chain and the economy stophere. To sweeten its products, the soft drinks industry increasingly usesmaize syrup, high in fructose and damaging to health. Since maize is alreadyused in the industrial manufacture of animal feed, this significantly reducesthe amount available for human consumption, depriving the poor of a cheap,

basic food. The substitution of maize derived sweeteners for healthierequivalents derived from sugar cane (such as gur and khandsari) has anadverse effect upon farmers, whose subsistence depends on cane crops.

In 2003 the district medical officer advised the people of plachimada thattheir water was so polluted that it was unfit for consumption. The adivasiwomen were the first to denounce coca colas hydro piracy with their sit-intheir initiative sparked national and international expressions of solidarity. InFebruary 2004, as the campaign gathered strength and with a droughtworsening the water crisis, keralas chief minister finally ordered the closure


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of the coca-cola plant. The entire plachimada panchayat joined the rainbowalliance created by the women. Another panchayat, in perumatty, filed a

public-interest suit against the multinational in the kerala high court.

In December 2003 Justice Balakrishnana Nair ordered coca-cola to ceaseillegal extraction of groundwater in plachimada. The reasons for his

judgment are as significant as the decision. He pointed out: the public trustdoctrine primarily rests on the principle that certain resources like air, seawaters and the forests have such a great importance to the people as a wholethat it would be wholly unjust-filed to make them a subject of privateownership. The said resources being a gift of nature, they should be madefreely available to everyone, irrespective of their status in life. The doctrineenjoins upon the government to protect the resources for the enjoyment ofthe general public rather than to permit their use for private ownership or

commercial purpose.

Our legal system, based on English common law, includes the public-trustdoctrine as part of its jurisprudence. The state is the trustee of all naturalresources, which are by nature meant for public use and enjoyment. The

public at large is the beneficiary of the seashore, running waters, air, forestsand ecologically fragile lands. The state as a trustee is under a legal duty to

protect natural resources. These resources meant for public use cannot beconverted into private ownership.

Water is a public good; and since the state and its various agencies areunder an obligation to protect groundwater against excessive exploitation,their inaction constitutes a violation of the right to life guaranteed underarticle 21 of the Indian constitution.

the supreme court of India has consistently maintained that the right tounpolluted air and water are an integral aspect of the right to life as defined

by this articles. So although there is no law specifically regulating theextraction of groundwater, the panchayat and the state are required to

prevent any overexploitation of underground reserves. Coca-colas propertyrights do not extend to the ground water below the land it owns. Nobody hasthe right to appropriate the lions share of this resource and the governmenthas no power to license a private third party to extract water in such vastquantities.


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Accordingly, the court gave coca-cola a month to cease water-extraction;and it ordered the panchayat and the state to ensure that this demand wasmet.

The women have been the heart and soul of the resistance and lawyers,parliamentarians, scientists and writers have take up their initiative. Thestruggle has spread to other areas where coca-cola and Pepsi are pumpingout aquifers. Following the opening in 1999 of a coca-cola plant at kaladera,a village near jaipur, the capital of the state of Rajas than the water tablelevel below ground fell from 12 to 37.5 meters. The opening of a factory inthe mehdiganj district, 20km from the holy city of Varanasi (Benares),caused groundwater to sink by 12 metres and polluted surrounding fields. Acoca-cola installation at singhchancher, a village in the baillia district ofeastern utter Pradesh, has caused long-term pollution to water and land.

Everywhere, protesters are organizing. But the public authorities usualresponse to demonstrations has been violence. At jaipur, in October 2004,the well-know Gandhi an activities siddharaj Dodda was arrested for taking

part in a peaceful march to demand the closure of the factory.

It is not only the drying-up of the wells; it is also the risk of contamination.When, despite evidence that their products contained pesticides thatrepresent a danger to health3, both companies refused to produce a list ofingredients, the rajas than high court banned the sales of drinksmanufactured by coke and Pepsi. The Supreme Court rejected an appeal anddemanded disclosure of the exact contents of the products. So far the drinksremain banned throughout the state.

A 1999 study by the all India coordinated research project on pesticideresidues showed that 60% of food products sold in the country werecontaminated with pesticides and that 14% contained residues above

permitted levels. Facts like these give the lie to the myth that multinationalsare primarily concerned with safety and trustworthy than the public sector.

This prejudice against the public provision of goods and services has helpedsell the idea of privatization, which has undermined the supply of cleanwater at an affordable price.

On 20 January human chains formed around coca-cola and Pepsi factoriesacross India. Peoples tribunals gave the hydro-privates notice to quit the


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country. The plachimada case proves that people are more powerful thanprivate companies.

Such pillaging of water resources could not happen without the complicityof centralizing states. Campaigns have expanded to encompass dam projectsand the grandiose plan to divert all the subcontinents rivers from theircourses, which is increasingly opposed4. protesters have denounced the

privatizations encouraged by the world bank, specifi-cally that of the Delhiwater supply5.

The struggle against the theft of water is not limited to India.Overexploitation of ground water and major river diversion projectsrepresent a significant threat to the world as a whole. Nature does notdistribute water uniformly. If every part of the globe received equal rainfall,

with the same frequency and pattern, the same vegetation would spring upeverywhere, supporting the same animal species. Our world is built upondiversity; its hydrological cycle is a democratic system for the distribution ofwater to all living species. Without democratic access to water, there can beno democracy.

Adivasi denotes

Introduction

In April 2004, coca cola India, a wholly owned subsidiary of coca-colacompany (coca-cola or coke) launched vanilla coke, the company first flavorextension in India. Launched with much fanfare, vanilla coke was expectedto boost coca colas sales in India which had taken a plunge following the

pesticide contamination controversy in 2003

Background

Coca-cola LTD.

Coca cola India

Coca-cola had reentered India in 1993, after having withdrawn from thecountry in the late 1970s in the wake of the foreign exchange regulation act(FERA) of 1973. After reentering India, coca-cola encountered several

problems, causing a dent in the parent companys bottom line. In the early


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2000s the company launched a series of marketing initiatives that increasedboth its total sales volume and its market share. Consequently, it receivedthe prestigious woodruff award for outperforming the dozen-old emergingmarkets of coca-cola worldwide in growth and profitanbility during 2002.coca colas repertoire of brands in Indian included coke, maaza, thumps up,limca, fanta and powdered soft drink brand sun fill.

In August 2003, coca-cola found itself in highly publicized controversywhen the center for science and environment (CSE), a Delhi-based non-governmental organization (NGO), reported that the pesticide levels in coke,Pepsi, Miranda and nine other soft drinks of the cola majors had exceededacceptable norms. Some of these pesticides were extremely toxic. Therewere fears that in the long run the pesticides could cause cancer and damagethe nervous and reproductive system among others. Through coke and Pepsi

reiterated that the products they manufactured in India were safe the widelypublicized reports caused a sharp dip in sales of the cola majors India.

The coca-cola company (coca-cola) manufactures, distributes and marketsnon-alcoholic beverage concentrates and syrups, including fountain syrups,in the world. The company manufactures and sells non-carbonated

beverages, primarily carbonated soft drinks and a variety of non-carbonatedbeverages. Coca-cola also manufactures and distributes juices and juicedrinks and certain water products such as Dasani. The company also hasownership interest in numerous bottling and canning operations. Coca-colahas five strategic business units: North America, Africa, Asia, LatinAmerica, and Europe, Eurasia and the Middle East. Finished beverage

products bearing its trademarks are sold in more than 200 countriesworldwide.

BRIEF: for the nine months ended 30 September 2005, the coca-colacompanys revenues increased 6% to $17.55B. net income increased 10% to$4.01B. Revenues reflect increased gallon sales and favorable pricing. Netincome also reflects the receipt of$42M related to HFCS law suit

settlement, favorable tax settlement related to coca-cola FEMSA, a decreasein other operating charges, an increase in interest income and higher equityincome.


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The coke study in India

Coca-cola made its debut in India in 1950 when pure drinks pvt.ltd a Delhibases company became the franchised bottler of coca-cola exportcorporation subsequently 22 franchisers entered in to agreement with cces.In the early days the concrete required to product coca-cola was imported bythe bottler from an overseas manufacturing plant of cces. In 1985 a branchof cces was set up at Delhi to supply bottler with concrete and beverage basein 1964 fanta orange flavour introduced by cces.

Since it applearnce in 1958, coca-cola had maintained its top position in softdrinks industry till its exit. The cces expanded to a grant 100 crore and

complex of 22 bottling plants operated in 13 states through 2 lakhs retailoutlets. In 1971 sales touched 637.78 lakhs yielding a profit of 31.37 lakhs

before taxation was 55 percent to 60 percent. This percentage is 35 to 40percent more than what customer goods generally fetched. The cces used tosell 25 lakhs kegs. Of concentrate, get profit of 49 percent of his sale profits.Repatriated to the USA.

Exit of coca-cola;

In 1975 govt of India asked cces to reduce to reduce its foreign (capital)holding. By that time foreigner held entire capital gave two Indian branchesshould dilute its equity to 40 percent and transfer its technological know-how to Indian economy. The company agreed to former condition. It didntaccept the latter. If wanted to keep a liaison and quality control cokeconcentrate. The Govt of Indian turned down their pica finally in 1977 ccesleft the country. Since then the vacuum created by the end of coke becamethe breeding ground for indigenous cola.

Cokes re-entry:

In the wake of the Govt liberalization policies many multinationals policieshave planned to get hold the Indian economy. Pepsi-co Itd has entered themarket fiver year ago after serious controversy. The $13 billion Atlanata

based mega-corp. coco cola has finally entered the Indian marketing after a16-year exile. Coca cola Indian limited has acquired the bottling lights of


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parley brands thumps up, gold spot limca mazza and citra ( except bislericubsoda) for $ 40 million November 1993.

Ramesh chuhan the managing director of parle exports will be chairman and50 percent parter in a new bottling company which will be set up in jointventure with coca cola India Itd., and he will hold coke franchises in Delhi,Bombay bang lore, surat and ahmedbad returning to India after it pulled outa in a blaze of publicity and controversy coco-cola has opted for adeliberately low-key relaunch. On dussera day last it high Agara and itssurrounding districts the location was chosen because of its proximity to

bottling facility in near by hatchers the first plant to grade to cokesinternational standards.

Despite its low start in the Indian market coco-cola has one enviable

advantage over its main competitor the acquisition of chauhans parle withthis deal. Coke has not only managed to eliminate what would have been itsmain domestic rival, but has piggy backed on its bottling and distributionnetworks parle has a 60 percent share of the branded soft drinks market(Pepsi ha 26 percent while pure drinks traits behinds with roughly 10 percentand the rest is shared by others). But acquisition also practically explain thedelay. When coke decides to finally throw its hat back in to the ring last yearit firs back in to the last year approached pure drinks for possible tie up.

Coke and pure drinks go back a long way in 1940 coco-cola had givencaptain sardar mohan singh a franchises to start its first bottling unit in whatwas then a garage of premnath motors in central Delhi. By 1977 coke leftIndian rather than reveal its secret formula as it was asked to by then govt.

pure drinks had four to five bottling plants. Now than coke wanted to make acome back. It approached the descendants of mohan singh to find out if theywere interested. That deal couldnt materlise. When Pepsi singed amemorandum of understanding with Punjab. Agro industrial and voltas in1988, the idea then was to come in to India with a food project, while softdrinks would provide it very small segment of the whole package coca-cola

mean while also bagan seriously looking at the huge untapped Indianmarket. At the same time when Pepsi came in the Atlanata basedmultinational made an application to set up a coke concrete plant in freetrade zone.Where 75 percent would be exported out and the remainders sold in theIndian market. The project with adl godrej almost came through but a tough


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fight put up by chauhanas well as government delays forced coke to pull atthe eleventh hour.

For three years Pepsi ruled the roost competing locally with pure drinks andparle. All this while coke was biding its time in 1991 it began talking torajan pillai about setting up an nri project in which pillai would have amajority state and coke would held about 26 percent but then as the financialmess in which pillai was in become apparent coke once again developedcold feet and decided to act accordingly the company implemented itsdisengagement strategy activating a clause in its memorandum ofunderstanding (mou) with pillai which stipulated that should the Indiangovernment permit a 100 percent owned venture by coke in the country awould have the option of going it along. On April 5, 1993, therefore cokeapplied to the foreign investment promotion board (fipb) gave the clearance

and by may, 1993 coke had pulled out of its arrangement with pillai payinghim 53 million as compensation and now the decks were cleared for serioustalks with chauhan. Mean while convinced that coke would benefits from analliance with parle and chatting at the delay in beginning operations. Jaydeveh raja one of the chief architects of the deal had flown to Atlanta in March1993 to make a presentation to a senior management team headed by I.

Neville isdell presiden of cokes Asian and European operations. Chauhansrationals behind the demand being involving in Briton would mean andequal partnership with coca cola with and equity state in key concretemanufacturing company. Simultaneously chauhan approached to the boston

based management consultants ME kinesy and company to suggest the idealarrangement and hammer out the best possible bargain for him.

As if ADILL a senior manager at MC KINSEY from newyork representedhim in negotiations with coke in july 1993, negotiations at last weretranslated in to an agreement chauhan visted Atlanta to sign its first MOUwith coke. It was not only a formal declaration of the intention of the twosides to collaborate in Indian but also spell put that there would be two jointventures between coke and parley.

This was meant to be kept totally secret. But the news of the alliance hadleaked out evoking an immediate reaction from parles bottlers. They wereafraid of being made redundant once the ideal was finalized. Besides the

pressure from his bottlers two more apects made ramose shaun to rethinkabout his plan. Firstly the difference with his brother parakeet shaun was notsatisfied by the price being quoted by coke. Therefore, to work out the price


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to be paid for paroles brands the brand equities of thumpup, gold spot citralimca and mazza were calculated.

Two considerations determined the final price of $40 million for the brandsthe highly profitable nature of parle exports main concrete and bottlingoperations which made a profit of RS 20 crores on turnover of rs 60 crores in1992 and dominant market shares of parle brands in their respectivecategories (thumps:55 percent; goldspot;75 percent; citra:65percent ;limca:85 percent). The arrangement between coca cola and parle will nowsee the information of two companies with shaun as the chairman of both.The first will be an an investment company for bottling operations whichwill pick up equity stakes in the bottler companies and well be an equal

partnership between coke and parle while the second will be a marketingservices company.

Present soft drink manufacturers:

Pure drinks Pvt.Ltd

Former bottlers of cces. The Delhi based company sells soft drinks throughits franchised territory throughout the country. It owns 10 bottling units and32 franchise units currently manufacturing campacol, orange, lemon. Thecompany ha 10 percent of the soft drink market flavour wise.

Indian Beverage company:

It was Delhi based company formed by seven former bottler of coca-colaunder the brand of name nove. The company launched its lemon and orangeflavors in 1979.

Dukes and company:

It was founded by dinshaw pundole in 1980 in Mumbai.

Mc dowels company

Me dowels entered the soft drinks industry in 1984-85. The companysbrand names are thrill for cola sprint for lemon. Its has its products bottled in20 plants.

Modern manufacturer:


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The Delhi based company launched 77 (double seven) in September 77through its 10 franchised units. Latter it introduced lemon and orangeflavors.

Pepsi food (PVT.)LTD

Pepsi co.., which was in Indian from 62-95, has left this company as itsproducts were not found acceptable to the Indian public. Pepsi co. inc. the$13 million soft drinks snack and fast food canglomerable has finally reentered in to the Indian market after a few years of hectic lobbying andcontroversy. The Punjab agro industrials company (with 36 percent ofequity) is promoters of Pepsi co. ( with 40 percent equity) to form an Indianmarket Pepsi co. inc. Pepsi has signed a letter of indent in which the.

Following clause are there

That the sale of soft drinks should in to exceed 25 percent of the totalTurn over achieving a foreign in flow out flow ratio of 5:2 accepting 50

percent export on exfactory production value.Calking up a cumulative export total of RS 194 crore during 10 years.Will have to export at least 50 percent of its total turnover of which be 40%items manufactured by Pepsi.

Dodged by controversies one or another since its thinking of entering in toIndian market Pepsi has changed its plants beings in predominate. Softdrinks vertex to predominantly agricultural one. The soft drink concrete

plants and the potato and grains processing plants in Punjab. Sangal districtsand the fruit and vegetable processing plants in hosiarpur districts have plantnearly double the amount sanctioned earlier. It manufacturers Lehar Pepsi acola drink, 7up a clear lemonade Miranda an orange drinks. Since a mangodrink and teem a lemon drink.

PARLE (PVT) LIMITED.(CONVERTED TO COCA-COLA INDIALTE)

PARLE has its head quarters at viley parle in Mumbai the place which gavethis company its name. In 48 parle exports (PVT) LIMITED, started its softdrinks production in India with the name Indian private owned company.


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This owned by chauhan brothers in Mumbai. By 1962, one million sales hadbeen made by parley.

In 1961 parle was split in to two Biscuit industrials and parle bottling. Againin 1966 parle bottling was divided in to two clear divisions. Parle exports thecompany headed by ramesh chauhan which supplied the concrete and

provides advertising support t its 62 franchises all over the country and parlebeverages headed by prakash chauhan which looks after parles own bottlingthere were only two bottling units owned by parle itself one at Mumbai andanother at Delhi. At the launch of thumsup the company spent nearly RS 20lakh on advertising. While today it spends together nearly rs 40 croreannually. The sale of parle products increases drastically because of thevacuum created by with drawl of coco-cola from Indian market.

Local soft drinks industry in coastal areas of Andhra Pradesh

The ARTOS soft drink was established in 1920. In the year 1957 wasconverted in to ramachandra raju stockiest to a manufacture and sell softdrinks under the name of artos for these purpose-imported plants waslnstalled. Initially company introduced 25 varieties of soft drinks. Aftersome time responding three varieties of soft drinks.These include ARTOS color, ginger and artos orange; initially they plannedto manufacture 50,000 cases per year.The company also manufactures soft drinks concrete and they use theseconcretes in their own soft drinks manufacturing. The equipment of theorganization comprises bottle workers boilers water purifiers, and bottlefilters.


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OBJECTIVES

TO know about the business activities of vimal bottling company.

TO study the marketing activities of vimal bottling company.

TO study the consumer opinion about soft drinks of vimal company.

TO describe the buying behavior of the soft drink consumers in termsof their preference and indifferences.

TO suggest various measures wherever necessary.


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METHODOLOGY

For the present study data has been colleted both primary and secondarysources.

Primary data:

Primary data was collected from predicated number of branded softdrink buyers within areas of eastgodvari district. The respondents werechoosen selectively and deliberately from the age groups of 15 to 16years. The number of respondents is 250 in the sample. A well-structured questionnaires was in advance. It was personally envisagedamong the respondents.

Secondary data:

A lot of information and data were to be gathered from secondarysources. The conceptual framework for the study was from public titileson marketing management consumers behavior and marketing research.The information relating to he soft drink industry in general wascollected from published article current literature available in standard

business magazines and journals.


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SCOPE OF THE STUDY

The study focuses its attention on marketing activities and consumeropinion in general there is a wider scope for the functions of theorganizations.

The scope of the subject area is the east godvari district of theandhrapardesh, through the company has got the market share in thewest godvari district also.

Further the total respondents were two hundred and fifty which aredivided accordingly to the age group and the sex. The age group consistsof bellows 15 years,

15-20 years, 35-45 years, 35-48 years and finally 58-60 years.

I admit that the scope of the study is not much comprehensive butkeeping a view of the limited time I conducted my sparing no efforts.

LIMITATION


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LACK OF TIME

TIME IS NOT SUFFICIENT FOR THE COLLECTION OF MOREINFORMATION

A SCOPE OF THE STUDY LIMITED TO EAST GADAVARI

EXACT INFORMATION IS NOT AVAILABLE

SOME OF THE COMPANIES ARE VERY BUSY SO THAT THEINFORMATION COLLETED FROM THEM IS A BIT DIFFICULT.

DEALERS ARE WIDELY DISTRIBUTED SO IT IS SOMEWHATDIFFICULT INAPPROUCHING THEM.

UNWILLINGNESS

Unwillingness of the company employees to provide certain informationfor the project to maintain secrecy

Data:

The study is mainly carried out based on secondary data

The study is based on historical data and information provided in annualreports.

The study is depends upon the accuracy of the data provided


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PROFILES OF VIMAL BOTTLING COMPANY

BRIEF PROFILE OF VIMAL BOTTING UNITCO

The vimal bottling company was started in 1983 as a partnership firm of 5partners and located at samalkota in east godvari district. The total cost ofthis company is 2 cores 50 lakhs. The success and growth achieved by thecompany can been sits increasing sales which has become four fold in thelast 10 years.

PRODUCTS

This company producing soft drinks with all flavors i.e lemon orange zinger

pineapple and cola, of these categories each one of one has its owncontribution in sales. Zinger and lemon type products have the highest sales.


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PRODUCTION PROCESS

Plant capacity:

The company has installed a sum: automatic plant lay out. The presentcapacity of the plant is 50 crate/ hr. i.e., 400 crates per shift of 8 hours.During the months of March to June due to peak demand, the plant isoperated its full capacity i.e., 600 crates per shift of 12 hours. During theother months of production per shift are 200 crates per shift.

PRODUCTION SCHEDULE:

The production schedule fixed daily by taking in to considerations themarket demand the availability of empty bottles and the inventory position

of filled bottles. The production schedule for each brand is fixed dailyproductions generally in summer the demand reaches its peak andproduction will be extended up to 4hours to existing shift.

RAW MATERIAL REOUIRED:

Raw materials are the flavor essence concentrate supplied by renewscompany sugar and water. Sugar is purchased in bulk from the wholesalesugar market. Water is further treated with chemicals purified with water isthen sent through steel pipes to a large container when Co2 is directed tosome extent of 10 liters to 100 liters. This is further directed where it ismixed with sugar and heated up to 80 degrees in heat exchanges. In theimmediate process it losses heat. Then this syrup is directed to syrup tankswhere it mixes with essence at and their proportion. This liquid is filled in

bottles which are first washed with soap latter with a dilute solution of soapin a bottle washes. Then they are filled and cropped at filled and crowningunits capacity of filler and crowing units capacity of filler and crowningunits is bottles per unit.

PLANT LAY OUT:

The layout of bottling plant installed by company is confirmed to produce online out. The machines and equipments are arranged according to thesequence of operations. The machines and workers are specialized in the

performance of specific operations such as preparation of syrup. Filling thebottles aerating and scrolling the bottles with liquid.


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QUALITY CONTROL

The company takes great care to maintain the quality of the products. Thebottles are critically examined for impurities continuously as the bottlesmove out. The flavor concepts sugar percentage and tees at the product arecheck

ORGANISATION CHART VIMAL BOTTLING UNIT

MANAGING PARTNER

MANAGER

Sales officer Accounts Security officer (a/o)

Urban rural

Sales supervisor sales supervisor

Sales man cum driver salesman-cum-driver

Lauders lauders


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FUNCTIONS

In this organization he is in charge of entire marketing department. He looksafter the day-to-day sales deviations from targets advertisement, distributionsales promotion purify direction etc. and responsible person to manager andmanaging partner.

ASSTSALES OFFICER:

He assists the sales officer. He collects all the data, arranges the data andthen passes it on the sales officer.

SALES SUPERVISOR:

He is in charge of two or more routes of sales. He makes the day-to-daysales and collection chart and submits to his higher as Asst sales officer.

SALESMAN-CUM-DRIVER:

It is his duty to see the distribution of products in a particular area assignedto him. He has two roles of the van and collection of money and delivery of

products in this area.

LAUDER:

He helps in the physical movement of product from warehouse to van todealers place.

MARKETING ACTIVITIES:

VIMAL BOTTLING company marketing activities namely east godvari andwest godvari districts. This company has divided in to total marketing areain to different peoples are managed and served efficiently it has segmentedthe total market on the basic of purchasing power area outlets and sales


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volume etc. The VIMAL BOTTLING Company is using different levels ofchannels according to their convenience and order to serve the people in

better way

DISRIBUTION CHANNELS:

The channel of distribution in this company is wholesales to retailer tocustomer.

DISRIBUTION NETWORK

VIMAL Bottling Company wholesales net work Eastgodvari district.

S.NO. DEALER IN AREA DEALER IN DIST

1 SAMOLLKOTA EAST GODVARI2 PEDDAPURAM EAST GODVARI

3 KAKINADA EAST GODVARI

4 RAJAHMUNDARY EAST GODVARI

5 JAGGAMPETA EAST GODVARI

6 ANNAVARAM EAST GODVARI

7 TUNI EAST GODVARI

8 PRATHIPADU EAST GODVARI

9 KATHIPPUDI EAST GODVARI

10 SANKAVARAM EAST GODVARI11 SITANAGARAM EAST GODVARI

12 RAMPACHODAVARAM EAST GODVARI

13 GOKAVARUM EAST GODVARI

14 MARENUMALLI EAST GODVARI

15 DEVIPATANAM EAST GODVARI

16 YELESWARAM EAST GODVARI

17 RAJAVOMMANGI EAST GODVARI

18 ADDATEEGALU EAST GODVARI

19 GANGAVARUM EAST GODVARI20 THONDANGI EAST GODVARI

21 PITHAPURAM EAST GODVARI

22 GOLLAPROLLU EAST GODVARI

23 TALLAREVU EAST GODVARI

24 MANDAPETA EAST GODVARI

25 VELANGI EAST GODVARI


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26 RAVULUPALEM EAST GODVARI

27 KOTHAPETA EAST GODVARI

28 RAZOLE EAST GODVARI

29 JAGGNNAPETA EAST GODVARI

30 AMALAPURAM EAST GODVARI31 MUMMIDIVARUM EAST GODVARI

32 KADIYAM EAST GODVARI

33 ATREYAPURAM EAST GODVARI

34 ANGARA EAST GODVARI

35 DRAKSHARAM EAST GODVARI

36 PAMARU EAST GODVARI

37 ALLAVARAM EAST GODVARI

38 MUKTESWARAM EAST GODVARI

39 YANAM EAST GODVARI

RETAILERS WORK COVERAGE IN

EAST GODVARI DISTRICT

AND

WEST GODVARI DISTRICTS

S.NO TYPEOF OUTLET NO OF RETAILERS

1 PAN SHOPS 15,000

2 HOTELS 320

3 CINEMA THEATRES 22

4 COOLDRINKSSHOPS

120

5 BAKERIES 34


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TOTAL 15,496

CONSUMERS

VIMAL Bottling Company supplies crates of soft drinks to wholes sales.They are the distributors in particular area. Then wholesalers supply softdrink to the retailers. From retailers the drinks are selling to the consumers.If the order is in bulk quantity.

PRICING IN VIMAL BOTTLING COMPANY

The products of VIMAL soft DRINKS were economically price RS 5.00 perbottle when compared with that of other popular company products RS 7.0per bottle. The pricing structure was as follows

Factory price RS 70

Transportation RS 10

Price to the dealer RS 80

Price to the retailer RS 100

Price to the consumer RS 5.00RS 120 PER CRATE

PROMOTION

This company adopting so many approaches and strategies forpromotion of its products by direct sales to the customers discounts forparty orders intensive advertising on hoardings paintings on pan shopsthrough slides at cinema theatre media and public please. This companycollecting the deposit amount for the outlets at the lower rate whencompared with other companies.

INCENTIVES TO SALES PEOPLE

The company gives incentives to all sales force. They are given normalwages and incentives are paid in addition to the their wages when

production target is achieved.

COMPETITORS


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The company has facing more competition from MULTINATIIONALCOMPANYS like

COCO-COLA PRODUCTS. PEPSI PRODUCTS AND OTHERLOCAL PRODUCTS. BUT IN THE EAST GODVARI DISTRICT thiscompany products having good demand and image.

SALES: DETAILS OF VIMAL BOTTLING COMPANY

YEAR AMOUNTS

1995-1996 2.30 LAKHS

1996-1997 3.10 LAKHS

1997-1998 3.60 LAKHS

1998-1999 3.92 LAKHS

1999-2000 4.60 LAKHS2000-2001 5.23 LAKHS

2001-2002 5.89 LAKHS

2002-2003 6.30 LAKHS

2003-2004 7.43 LAKHS

2004-2005 8.85 LAKHS

NUMBER OF EMPLOYEES

Production 30Administration 12

Sales 102

Total 142


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THEORITICAL FRAME WORK


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THEORITICAL FRAME WORK OF

MARKETING MIX

THEORITICAL FRAME WORK OF MARKETING

Marketing occupies an important role in the organization of business unit. Itis of the important line activities of business operations. It is of the importantline activities of business operations. The changes that are taking place in theeconomy reflect every often field. The job of business is to produce goodsand servies to the consumers. In and economy characterized by scarcity ofmen; materials and money. The job of businessman has become morecomplex. More over with increases in the competition increases in thecompetition increases in the needs of the consumers and widening ofmarkets; the business is placed in the more difficult position in producing

and selling of goods. The performance of their activities felt necessary forthe success and survival of the business organization. In this context theactivity of marketing mix came in to existence.

Marketing management take place when at least one party to a potentialgivers thought to objectives and means of achieving defined responses fromother parties. According to American Marketing association marketingmanagement is the process of planning and executes conception pricing

promotion and distribution of ideas goods and services to create exchangethat satisfy individual and organizations objectives. Thus a definitionrecognize marketing management as prospects of involving analysis

planning implantation and control. That is covers ideas goods and services;that is rest on the nation exchange and that the goal is to produce satisfactionfor the parties involved. The function of distribution involves bothchannelisation of products/ services and their physical distribution.

Marketing is concerned with business and functions involved in it in includemarketing research product planning pricing selling advertising anddistribution. Through these function are identified with operations unique to

them individually they are performed in isolation they internal amongthemselves to produce an integrated business function called marketing.

The marketing management executive closely coordinates activities ofdifferent marketing connection right from the conception of the product ideato the consumption of the finally developed and delivered the product. Theresult of this intra marketing coordination is the development of marketing


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mix built in potential for the maximum impact in the marketing place.Besides marketing decision scar heads coordinates with other corporate fun.Ex product finance personal etc. so as to produce a well knit effective and

profitable corporate action directed towards achieved of the turn objectiveof consumer satisfaction and targeted return on investment.

Marketing mix is an optimum combination efforts indifferent functionalareas of marketing called components like market research produce pricedistribution and communication including sell in such a market objective aand targets are achieved with maximum efficiency and maximum cost thatthe firm uses of purpose its marketing in the target market. There areliterally dozens of marketing mix tools popularized a four classification oftheir tools called the fours product place price and promotion.

MARKETING MIX

The world market is derived from a Latin word MARCATUSMEANSmerchandise were traffic trade over where trade is conducted

The term market is quite comprehensive in nature as it includes all resourcesand set of activities necessary to direct and facilitate the flow of goods andservices from the producer to ultimate customer the process of distribution.

THE TWIN ACTIVITIES, WHICH MOST SIGNIFICES ARE:

Matching the product with demand.

Transfer of ownership and possession at even state in the flow of goods fromprimary producers to the ultimate consumers.

The American marketing association defines marketing as a process ofplanning and executing of the conception pricing promotion and distributionof ideas goods and services to create exchanges that satisfies the individuals

and organization activities, from the social point of view marketing is theprocess of creating and delivering a higher standard of living.

This marketing deal with identifying and meeting human and social needs inshort we can say marketing means meeting needs profitability.

MEANING OF MARKETING MIX:


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Marketing mix is the set of marketing tools that firm uses to pursue itsmarketing objectives in the target market.

McCarthy classified these tools in to four board groups that he called thefour ps of marketing: product price place and promotion.

Marketing mix

PRODUCT PRICE PROMOTION PLACE

Product variety list price sales promotion channelsQuality design Discount advertising coverageFeatures allowances sales force assortmentBrand name payment period public relations locationPackaging credit terms direct marketingServiceWarrantiesReturns

The four represent the seller view of the marketing tools available forinfluencing buyers. From a buyers point of view each marketing tool isdesigned to deliver a customer benefit.

MARKETING ENVIROMENT

A firm marketing environment consists of the factors and forces outside

marketing that effect marketing managements ability to develop andmaintain successful transactions with the target customers.

FACTORS EFFECTING MARKETIGN ENVIROMENT

The marketing environment can be broadly divided in to


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Uncontrollable factors of external environment

Controlled factors of external environment

Uncontrollable factors include:

Macro environment

DemographyCompetitionEconomyLegal & government factors

Technological factorsSocial factors

Microenvironment

An organizations marketing system is also shaped to some extent by internalforces that are largely controllable by the markets. These internal factorsinfluences include a firms production financial human resources research &development company location & image.

ROBERT LAUTERBORN suggested that the seller four PS correspond tocustomer FOUR CS

FOUR PS FOUR CS

Products Customer solution

Price Customer cost

Place Convenience

Promotion communication

PRODUCT


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A product is anything that can be offered to a market to satisfy a want orneed products that are marketed include physical goods services experiencesevents persons places properties organizations information and ideas.

PRODUCT LEVEL

In planning its market offering the market offering the marketer needs tothink through five level of the product.

Each level adds customer value and five constitute a customer valuehierarchy.

Fundamental level is core benefit-fundamental service or benefit that

the customer is really buying Basic product marketer turns core benefit in to a basic product

Expected product a set if attributes and conditions buyers normallyexpect when they purchase this product

Augmented product which exceeds customer expectations

Potential product- all possible augmentations and transformations theproduct might undergo in the future.

Product classification:

Products are classified on basic of characteristics durability, tangibility anduse.

Durability and tangibility

1. Nondurable goods2. Durable goods3. Services

Consumer goods classification

1. convenience goods2. shopping goods3. specialty goods4. unsought goods

product mix:


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A product mix (also called product assortment) is the set of all products anditems that a particular seller offers for sale.

Branding is major issue in product strategy A brand is a name term signsymbol or design or a combination of them intended to identify the goods orservices of one seller or group of seller and differentiate them from those ofcompetitors.

Packaging and labeling

Most physical products have to be packed and labeled. Packaging includesthe activities of designing and producing the container for a product.

Labeling

Seller must label products. The label my be simple tag attached to product orone elaborately design graphic that is part of the package.

Priced

Price is the marketing mix element that produces revenue, the othersproduce costs.

Setting the price;

A firm must set the price for the first time when it develops a new product,when it introduces its regular product in to new distribution channel orgeographical or geographical area and when it when it enters bids on newwork.

The firms as to considering many factors in setting its pricing policy.

Selecting the pricing objective Determining demand

Estimating cost

Analyzing competitors costs prices and offers

Selecting a pricing method

Selecting the final price


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Price adaptation strategies are:

Geographical pricing

Price discounts and allowances Promotional pricing Discriminatory pricing

Product mix

Pricing any product is an important task, as it ultimately decides a number offactors the quality sold, customer acceptance and mostly importantly, itinfluences the gross and net revenue that can be realized. The initial pricingcalls attention for the following factors

Demand for the product

Possible reaction of the competitors

Expected market shares

Company policies regarding products channels and promotion.Price may be based on costs fixed in variable marginal or total costsinvolved in producing and moving the product. What ever be the pricingmethod adopted.

Consumer psychology should be given utmost importance in pricing certain

products as it largely influences the price elasticity a product enjoys forinstance price may be considered an indicator of quality especially whencost aspects are not known. All the costs that are involved in producingdistributing and handling etc.., should be covered in the long run and areasonable surplus needs to be created to survive by any business unit.

The final element of the market mix that must be considered is pricerepresents the cost that the buyers must accept the order to obtain the

product. It involves not only money, but also opportunity cost and energy

cost.

It is an important element of marketing mix. It can be used as a strategicmarketing variable to meet competitors. It also a direct source of revenue forthe firm. It must not only cover the cost but also leave some margin togenerate profit for the firm. However price should be so high as to frightenthe customer. Price is also an element which is highly perceptible to the


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customer and significantly affects theirs decisions to buy a product. Ingeneral price directly determines the quality to be behavior.

Promotion

Promotion is the element in the organization marketing mix that service toinform persuade and remind the market of a product and for the organizationselling it in hopes of influencing the recipients feeling beliefs or behavior.

PROMTIONAL METHODS

There are five forms of promotion:

Personal selling the direct presentation of a product to a prospectivecustomer by a representative of the organization selling it. Personalselling takes place face to face or over the phone and it may bedirected to middleman or a final consumer

Adverting is impersonal mass communication that the sponsor haspaid for and in which sponsor is clearly identified.

The most familiar form of adverting is found in board cast (TV and radio)

and print media (newspaper and magazines). Sales promotion is demandstimulating activity designed to supplement advertising and facilitiespersonal selling. Its is paid for by the sponsor and frequently involves atemporary incentive to encourage purchases. Included in sales promotion arewide spectrum of activities such as contests, trade shows in store displaysrebates premiums discount and coupons.

DISTRIBUTION

The development of the arrangements necessary to transfer ownership of a

product and transport the product form where it is produced to where it isfinally consumed.

Distributed role with in a marketing mix is getting the product to its targetmarket. The most important activity in getting a product to market is aarranging for its sales from producer to final customer. Other common


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activities are promotion the product storing it and assuming some of thefinancial risk during the distribution process.

A middleman is business firm that renders services related to the sale andfor purchases of a product as it flows from producer to consumer.

CHANNELS DISTRIBUTION:

Most producers work with market intermediates to bring their products tomarket. The market intermediates make up market channels trade channel ordistribution channels.

Marketing channels are set of interdependent organs involved in theprocess of making a produces a server available for use or consumption.

--------------STERN AND EL --- ANSAR


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In a ever- widening market, particularly in consumer goods marketdistribution channels have distinctive role in successful implementation ofmarket plan and strategies.

Searching buyers and sellers Marketing goods for the requirement of the market

Offering product in the form of assortment or packages able andacceptable by the consumer

Implementing price strategy in such a manner that would beacceptable to the buyer and ensure effective distribution.

Providing feed back information for marketing intelligence and salesforecasting

Helps in the creation and establishment of market for a new product.

COMPONENTS OF DISRIBUTION CHANNELS.

All kinds of merchant middleman such as distributions stockiest, dealerswholesalers and retailers. All agents middleman such as commission agents

brokers and ware house keepers.Distribution channel consists of the set of people and firm involved in thetransfer of title to a product as the product moves from producer to ultimateconsumer of business user.

A channels consisting only of producer and final customer with nomiddleman providing assistance is called distribution.

In a contrast a channels of producer final customer and at least one level ofmiddleman represent indirect distribution.

CHANNELS DESIGN DECISIONS

Designing a channel system calls for

Analyzing customers desired service out put levels Establishing objective and constraints identifying major channel

alternative.

Evaluating the major alternative.


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CONSUMER MARKETING CHANNELS

WholesalerManufacturer 2nd level

O level 1st level Jobber

Manufacturer Manufacturer Retailer

ConsumerRetailer

ConsumerConsumer

3rd level

Manufacturer

Wholesaler

Jobber

Retailer

Consumer

Buyer behavior

Dominant family purchase ---cozena

Demographic factors

The consumer buying process


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Maslaws hierarchy of needs

Socio economic classify scheme

Types of buyer behavior

The buying decision process

Organization buying behavior

Demographics factors

AgeStage in family cycleOccupationEconomic circumstancesLife stylesSocial influence variablesFamily back groundReference groupsRoles and status

Consumer buying process

Marketing inputs consumer purchase decisionsProduct product choicePrice location choice

Promotion brand choicePlace other choice

Psychological inputCultureAttitude

Learning


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Perception

Buying Behavior is the decision processes and acts of people involved inbuying and using products.

Need to understand

Why consumer make the purchase that they make?

What factors influence consumer purchase?

The changing factors in our society?

Consumer Buying Behavior refers to the buying behavior of the ultimate

consumer. A firm needs to analyze buying behavior for:

Buyers reactions to a firms marketing strategy has a great impact on thefirms success.

The marketing concept stresses that a firm should create a marketing mix(MM) that satisfies (gives utility to ) customers therefore need to analyze thewhat where when and how consumer buy.Marketing can better predict how consumer will respond to marketingstrategies.Stages of the consumer buying process

Six stages to the consumer buying decision process (for complex decisions.)Actual purchasing is only one stage of the process. Not all decision processlead to a purchase. All consumer decisions do not always include all 6 stagesdetermined by the degree of complexity discussed next.

The 6 stages are:

1. problem Recognition

(A wareness of need)---difference between the desired state and theactual condition. Deficit in assortment of products. Hunger stimulatesyour need to eat. Can be stimulated by the marketer through productinformationdid not know you were deficient? I.E.., see a


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commercial for a new pair of shoes stimulates your recognition thatyou need a new pair of shoes.

2. information search

internal search memory.

External search if you need more information. Friends and relatives(world of mouth). Marketer dominated sources; comparison-shopping;

public sources etc.

A successful information search leaves a buyers with possible alternativesthe evoked set.

Hungry want to go out and eat, evoked set is

Chinese foodIndian foodBurger kingKlondike Kates etc

3. evaluation of Alternatives

need to establish criteria for evaluation features the buyers wants or doesnot want. Rank /weight alternative or resume search. May decide that youwant to eat something spicy Indian gets highest rank etc.

if not satisfied with your choice then return to the search phase. Can youthink of another restaurant? Look in the yellow pages etc. Informationfrom different sources may be treated differently. Marketer try toinfluence by framing alternatives.

4. purchase decision

Choose buying alternative includes product package store method of

purchase etc.

5. purchase

May differ from decision time lapse between 4&5 productavailability.


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6. post purchase evaluation

outcome: satisfaction or dissatisfaction. Cognitive dissonance, haveyou made the right decision. This can be reduced by warranties, aftersales communication etc. after eating an Indian meal may think thatreally you wanted a Chinese meal instead. HandoutPillsbury 1-800#s 1-800#s gives the consumer a way of communicating with themarketer after purchase. This helps reduces cognitive dissonancewhen a marketer can answer any concerns of a new consumer

Types of Consumer Buying Behavior

Types of consumer buying behavior are determined by:

Level of involvement in purchase decision. Importance and intensity ofinterest in a product in a particular situation.

Buyers level of involvement determines why he/she is motivated to seekinformation about a certain products and brands but virtually ignores others.

High involvement purchaseHonda motorbike high priced goodsproducts visible to others and the higher the risk the higher theinvolvement. Types of risk:

Personal riskSocial riskEconomic risk

The four type of consumer buying behavior are:

Routine Response/Programmed Behaviorbuying low involvementfrequently purchased low cost items; need very little search and decisioneffort; purchased almost automatically. Example include soft drinks snack

foods milk etc.

Limited decision making buying product occasionally. When you need toobtain information about unfarmiliar brand in a familiar product category

perhaps. Requires a moderate amount of time for information gathering.Example include clothesknow product class but not the brand.


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Extensive decision making /complex high involvement unfamiliar expensiveand /or infrequently bought products. High degree ofeconomic/performance/psychological risk. Example include cars homescomputers and education spend a lot of time seeking information anddeciding.Information from the companies MM; friends and relatives store personneletc. Go through all six stages of the buying process.

Impulse buying no conscious planning.

The purchase of the same product does not always elicit the same buyingbehavior product can shift from one category to the next for example: Goingout for dinner for one person may be extensive decision making(for someonethat does not go out often at all), but limited decision making for someone

else. The reason for the dinner whether it is an anniversary celebration or ameal with a couple of friends will also determine the extent of the decisionmaking.

Categories that Effect the Consumer Buying Decision ProcessA consumer making a purchase decision will be affected by the followingthree factors:

Personal

Psychological Social

The marketer must be aware of these factors in order to develop anappropriate MM for its target market.

Personal

Unique to a particular person. Demographic factors. Sex, Race Age etc. Whoin the family is responsible for the decision making ? young people

purchase things for different reasons than older people.

Handoutfrom choices of checkout---

Highlights the difference between male and female shoppers in thesupermarket.

Psychological factors


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Psychological factors include

Motives

A motives is an internal energizing force that orients a persons activitiestoward

Satisfying a need or achieving a goal. Actions are effected by a set ofmotives not just one. If marketers can identify motives then they can betterdevelop a marketing mix.MASLOW hierarchy of needs!!

Physiological

Safely

Love and Belonging

Esteem

Self Actualization

Needs to determine what level of the hierarchy the consumer are at todetermine what motivates their purchases.

HandoutNutriment Debunked

Nutriment, a product marketed by Bristol Myers squibb originally wastargeted at consumers that needed to receives additional energy from theirdrinks after exercise etc.., fitness drink. It was therefore targeted atconsumers whose needs were for eitherlove and Belonging or esteem. The

product was not selling well and was almost terminated. Upon extensiveresearch it was determined that the product did well in inner-city

convenience stores. It was determined that the consumer for the productwere actually drug addicts who couldnt not digest a regular meal. Theywould purchase nutriment as a substitute for a meal. Their motivation to

purchase was completely different to the motivation that B-MS hadoriginally thought. These consumers were at thephysiologicallevel of thehierarchy. B-MS therefore had to redesign its MM to better meet the needs


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of this target market. Motives often operate at a subconscious level thereforeare difficult to measure.

Perception

What do you see?? Perception is the process of selecting organizing andinterpreting information inputs to produce meaning. IE we chose what infowe pay attention to organize it and interpret it information inputs are thesensations received through sight, taste, hearing, smell and touch.

Selective Exposure select inputs to be exposed to our awareness. Morelikely if it is linked to an event, satisfies current intensity of input changes(sharp price drop).

Selecting Distortion changing / twisting current received informationinconsistent with beliefs.

Advertisers that use comparative adverstisements (pitching one productagainst another) have to be every careful that consumer do not distort thefacts and perceive that the advertisement was for the competitor. A currentexampleMCI and AT&T do you ever get confused?

Selecting Retention Remember inputs that support beliefs forgets those thatdont.

Average supermarket shopper is exposed to 17,000 products in a shoppingvisit lasting 30 minutes 60% of purchase are unplanned. Exposed to 1,500advertisements per day. Cant be expected to be aware of all these inputs,and certainly will not retain many.

Interpreting information is based on what is already familiar on knowledgethat is stored in the memory.

Ability and knowledgeNeed to understand individuals capacity to learn. Learning changes in apersons Behavior caused by information and experience. Therefore tochange consumers behavior about your product, need to give them newinformation re:product.free sample etc. south Africa..open bottle of wineand pour it!! Also educate American consumers about changes in S.A. needto sell a whole new country.


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When making buying decisions buyers must process information knowledgein the familiarity with the product and expertise. Inexperience buyers oftenuse prices as an indicator of quality more than those who have knowledge ofa product. Non alcoholic Beer example: consumer chose the most expensivesix-pack, because they assume that the greater price indicates greater quality.

Learningis the process through which a relatively permanent change inbehavior results from the consequences of past behavior.

Attitudes

Knowledge and positive and negative feelings about an object or activitymaybe tangible or intangible living or non- livingDrive perceptionsindividual learns attitudes through experiences and interaction with other

people consumer attitudes towards a firm and its products greatly influencethe success or failure of the firms marketing strategy.

Handout Oldsmobile

Oldsmobile vs. Lexus due to consumers attitudes toward Oldsmobile (asdiscovered by class exercise) need to diassociate Aurora from theOldsmobile name. Exxon Valdez-nearly 20,000credit cards were returned orcut up after the tragic oil spill.

Honda You meet the nicest people on a Honda dispels the unsavory imageof a motorbike rider, late 1950s. Changing market of the 1990s baby

boomers aging, and Hondas market returning to hard core. To change thisthey have a new slogan come ride with us.

Attitudes and attitude change are influenced by consumers personality andlifestyle.

Consumers screen information that conflicts with their attitudes. Distortinformation to make it consistent and selectively retain information thatreinforces our attitudes. IE brand loyalty.


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There is a difference between attitude and intention to buy (ability to buy).

Personality

All the internal traits and behaviors that make a person unique uniqueness

Arrives form a persons heredity and personal experience. Examples include:

Workaholism

Compulsiveness

Self confidence

Friendliness

Adaptability

Ambitiousness

Dogmatism

Authoritarianism

Introversion

Extroversion

Aggressiveness

Competitiveness.

Traits affect the way people behave. Marketers try to match the ago the store

image to the perceived image of their customers.

There is a weak association between personality and buying behavior thismay be due to unreliable measure. Nike ads. Consumers buy products thatare consistent with their self-concept.


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Lifestyles

Recent US trends in lifestyles are a shift towards personal independent andindividualism and a preference for a healthy natural lifestyle.

Lifestyles are the consistent patterns people follow in their lives.

EXAMPLE healthy foods for a healthy lifestyle. Suntan not consideredfashionable in US until 1920s. Now an assault by the American Academy ofDermatology.

Social factors

Consumer wants, learning motives etc. are influenced by option leader,

persons family, reference groups, social class culture.

Opinion leaders

Spoken person etc. marketers try to attract opinion leaders. They actuallyuse (pay) spokespeople to market their products. Michael Jordon (Nike,McDonalds, Gatorade etc.)

Roles and family influences

Roles... Things you should do based on the expectations of you from yourposition within a group people have many roles. Husband father employeesindividuals role are continuing to change therefore marketers must continueto update information.

Family is the most basic group a person belongs to. Marketers must aunderstand:

That many family decisions are made by the family unit

Consumer behavior starts in the family unit

Family roles and preferences are the model for childrens future family (canreject/alter/etc)


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Family buying decisions are a mixture of family interactions and individualdecision making

Family acts an interpreter of social and cultural values for the individual.

The family life cycle: families go through stages, each stagecreatesdifferentconsumerdemand:

Bachelor stage.most of BUSAD301

Newly married, young, no children. Me

Fullest nest I youngest child under 6

Fullest nest II youngest child 6 or over

Fullest nest III older married couples with dependent children

Empty nest I older married couples with no children living with them, headin labor force

Empty nest II older married couples no children living at home head retired

Solitary survivor in labor force

Solitary survivor retired

Modernized life cycle includes divorced and no children.

Handout Two Income Marriages Are Now the Norm

Because 2 income families are becoming more common, the decision makerwithin the family unit is changingalso, family has less time for children

and therefore tends to let them influence purchases decisions in order toalleviate some of the guilt (children influences about $130 billion of goodsin a year) children also have more money to spend themselves.

Reference Groups


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Individual identifies with the group to the extent that he takes on many ofthe values, attitudes or behavior of the group members. Families friends,sororities civic and professional organizations. Any group that has a positiveof negative influence on a persons attitude and behavior.Membership

groups (belong to) Affinity marketing is focused on the desires of consumerthat belong to reference groups. Marketers get the groups to approve the

product and communicate that approval to its members. Credit cards etc!!Aspiration groups (want to belong to)Disassociate groups (do not want tobelong to) Honda tries to disassociate from the biker groups.

The degree to which a reference group will affect a purchase decisiondepends on an individuals susceptibility to reference group influence andthe strength of his/her involvement with the group.

Social class

An open group of individuals who have similar social rank. US in not aclassless society. US criteria; occupation, education, income, wealth, race,ethnic groups and possessions.

Social class influences many aspects of our lives. IE upper middle classAmericans prefers luxury cars Mercedes.

Upper Americans- upper- upper class,. 3%, inherited wealth aristocraticnames.

Lower- upper -class, 1.2%, newer social elite, from current professionals andcorporate elite.

middle- uppers- class12.5% , college graduates, managers and professionals.

Middle Americans middle class, 32%, average pay white collar workersand blue collar friends

Working class, 38%, average pay blue collar workers

Lower Americans lower class, 9 %, working, not on welfare


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Lower-lower class, 7%, on welfare

Social class determines to some extent the types, quality, and quantity ofproducts that a person buys or uses.

Lower class people tend to stay close to home when shopping; do not engagein much prepurhase information gathering. Stores project definite classimages.

Family reference group and social classes are all social influences onconsumer behavior. All operate within a larger culture.

Culture and sub-culture

Culture refers to the set of values ideas and attitudes that are accepted by ahomogenous group of people and transmitted to the text generation.

Culture also determine what is acceptable with product advertising. Culturedetermine what people wear eat reside and travel. Cultural values in the USare good health education individualism and freedom. In American culturetime scarcity is a growing problem. IE change in meals. Big impact oninternational marketing.

Handoutwill British warm up to iced tea?

No. But that is my opinion!!....Tea is part of the British culture, hot withmilk. Different society, different levels of needs different cultural values.Culture can be divided into subcultures: Geographic regions Humancharacteristics such as age and ethnic back ground. IE West Coast teenageand Asian American. Culture effects what people. Buy how they buy andwhen they buy.

Understanding consumer Buying Behavior offers consumers greater

satisfaction (utility). We must assume that the company has adopted themarketing concept and are consumer oriented

CONSUMER BEHAVIOR

The field of consumer behavior is the study of individuals groupsorganizations and process they use to select secure use and dispose of


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product services experience or ideas to satisfy needs and impacts that theseprocess have on the consumer and society. This is border view of consumerbehavior than the traditional one which focused much more on the buyersand immediate antecedents and consequences of the purchasing process.This view will lead us to examine indirect influences on consumptiondecisions as well as consequences that involve more than the purchaser andseller. Understanding and properly interpreting consumer wants is whole loteasier said than done. Generally market researcher talk to more than 4,000consumers or find out

What they drink of our products and those of our competitors

What they drink of possible improvement in our products

How they use our products

What attitude they have about our product and our advertising

What they feel about roles in the family and society.

What their hopes and dreams are for themselves and their families.

Today, as never before we cannot take our business for granted. Thats whyunderstanding-and therefore learning to anticipate- consumer behavior is ourkey to planning and managing in this ever- changing environment.

APPLICATIONS OF CONSUME BEHAVIOR:

Market strategy:

All marketing strategies and tactics are based on explicit implicts beliefsabout consumer behavior. Decisions based on explicit assumptions and


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sound theory and reach are more likely to be successful than are decisionsbased solely on implicit intuition. Thus knowledge of consumer can beimportant competitive advantage.

Social marketing:

Social marketing is the application of marketing strategies and tactics to alteror create behavior that have a positive effect on the target individuals and /or society as a whole

MARKETING STRATEGY AND CONSUMER

BEHAVIOR

Marketing analysis

CompanyCompetitorsConditionsConsumers

Marketing segmentationsIdentify product-related need


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SetsGroup customers with similar need

SetsDescribe each groupSelect attractive segment (s) to target

Marketing strategyProduct, price, distribution,Promotion, services

Consumer decisions processProblem recognitionInformation searchAlternative evaluation

PurchaseUseEvaluation

Out comesIndividualsFirmSociety

CREATING SATISFIED CUSTOMER

Our totalProduct

Consumer superior perceivedDecision value sales valueProcess expected delivered

Competitors

Total product

CustomerSatisfaction


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THE NATURE OF CONSUMER BEHAVIOR

Want recognition

Search of information on product that could satisfy the needs of the buyer;

Alternative selection;

Decision-making on buying the product;

Post-purchase behavior.

Model of consumer behavior

External

Influences

CultureSub cultureDemographicSocial status Experience and acquisitionsReferenceGroups Decision process

Family situationsMarketing

Problem recognition

Information searchSelf concept

And need Alternative evaluation


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Life style Desires and selection

Out let selectionand purchases

Internal Post purchaseInfluences ProcessesPerceptionLearningMemoryMotivesPersonalityEmotionsAttitudes

Experience and acquisitions

CONSUMER BUYING DECISSION PROCESS:

According to Myers (1962), a persons decision making process depends toa significant degree on their cognitive style. Starting form the work of CarlJung. Myers developed a set of four bi-polar dimensions the Myers BriggsType Indicator: The terminal points on these dimensions are: thinking andfeeling extraversion and introversion; judgments and perception; andsending and intuition. He claimed that a persons decision making style is

based largely on how they score on these four dimensions. For examplesomeone that scored near the thinking, extroversion, sensing, and judgmentsends of the dimensions would tend to have a logical analytical, objective,critical, and empirical decision making style.

Cognitive and personal biases in decision making

It is generally agreed that biases can creep into our decision making

processes, calling into question the correctness of a decision. Below is a listof some of the more common cognitive biases.

Selecting search for evidence we tend to be willing to gather factsthat support certain conclusions but disregard other facts that supportdifferent conclusions.


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Premature termination of search for evidence we tend to accept thefirst alternative that looks like it might work.

Conservatism and inertia unwillingness to change thought patterns

that we have used in the past in the face of new circumstances.

Experiential limitations unwillingness or inability to look beyondthe scope of our past experiences; rejection of the unfamiliar.

Selective perception we actively screen out information that we donot think is salient.

Wishful thinking or optimism we tend to want to see things in apositive light and this can distort our perception and thinking.

Recency we tend to place more attention on more recent informationand either ignore or forget more distant information.

Repetition bias A willingness to believe what we have been told mostoften and by the greatest number of different of sources

Anchoring Decisions are unduly influenced by initial information thatshapes our view of subsequent information.

Group think - peer pressure to conform to the opinions held by thegroup.

Source credibility bias we reject something if we have a bais againstthe person, organization, or group to which the person belong; we areinclined to accept a statement by someone we like.

Incremental decision making and escalating commitment we look ata decision as a small step in a process and this tends to perpetuate aseries of similar decisions. This can be contrasted with zero baseddecision making.

Inconsistency the unwillingness to apply the same decision criteria insimilar situations.


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Attribution asymmetry we tend to attribute our success to ourabilities and talents, but we attribute our failures to bad luck andexternal factors. We attribute others success to good luck, and theirfailures to their mistakes.

Role fulfillment we conform to the decision making expectations thatothers have of someone in our position.

Understanding uncertainty and the illusion of control we tend tounderestimate future uncertainty because we tend to believe we havemore control over events than we really do.

Faulty generalization in order to simplify an extremely complexworld, we tend to group things and people. These simplifying

generalization can bias decision ma

a study on marketing activities & consumer opiniions

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