the study of customer switching behaviour toward carbonated

The Study of Customer Switching Behaviour Toward Carbonated Soft-drink Market:

“With Special Reference to Manmunai North Divisional Secretariat Area”

BYWILLIAMS ABARAJITHAN J.K

REG NO : EU/IS/2004/MS/35INDEX NO : MS 695

Department of ManagementFaculty of Commerce and Management

Eastern University, Sri Lanka

Contents

Introduction

Problem Identification

Objectives of the study

Significance of the study

Methodology

Literature Review

Analysis & Conclusion

Recommendation

Further Research Implication

Introduction

The basic function of marketing is to attract and retain customers at a profit. (Drucker,1999)

Loyal customers build businesses by buying more, paying premium prices, and providing new referrals through positive word of mouth over time (Ganesh, 2000).

A critical issue for the continued success of a firm is its capability to retain its current customers and make them loyal to its brands (Dekimpe, 1997)

Customer switching behaviour is consequently a serious threat to the achievement of long-term relationships and profitability. (Ganesh, 2000)

The concept of customer switching behaviour as, this is the negative out come of the buyer decision-making process and the then implementation of the decision in regard with a specific product or service selection. (Aitzaz Saeed and Rehan Arshad, 2007)

The customer switching behaviour damages market share and profitability of specific firm yet has remained virtually un-explored in the marketing literature.(Susan M. Keaveney, 1995)

High level of competition, the high cost of acquisition in terms of new product innovation, promotion, distribution and the low rate of churn (switching cost)

Problem Identification

Competitive landscape has become highly dynamic with relatively newer producers wresting customers from old brands and multinationals in recent mobile environment (Agbor, 2004).

Goods are mostly available with good qualities, prices are very competitive nowadays

Understanding customer’s needs become crucial in a competitive market place . (Rana Mostaghel, 2006)

Customer satisfaction can be impacted the behaviour of customers in a number of ways.

On other hand dissatisfied will have bad word-of-mouth a company and spread the news to eight to ten other people. Though switching intention is also influenced by several factors, when known it triggers management action to find out appropriate actions to take to satisfy customers (SPSS white paper, 1996).

Individual consumer switching brands (or repeat buying) induced by the utility (or disutility) (Moshe Givon, 1984)

Customer switching has been related to perceptions of quality (Rust and Zahorik,1993)

The degree to which service switching might be caused by price deals. (Guadagni and Little,1983)

Whether there is customer switching behaviour in the carbonated soft drink market; if so, what is the most basic factor that contributes for customers’ switching behaviour toward the selection of carbonated soft drink products with special reference to Manmunai -North Divisional secretariat area?

Objectives of the study

To examine whether there is customer switching behaviour in carbonated soft

drink market in Manmunai North Divisional District area.

To find out that, whether Marketing Mix of marketers in carbonated soft drink market

have an influence on customer switching behaviour.

To find-out that, whether customers’ demographic factors have an influence on their

switching decision toward carbonated soft drink purchase.

To examine that, whether customers’ psychological factors impact their switching

decision toward carbonated soft drink selection.

To find out that, whether marketing mix, demographic factor, and psychographic

factors have an influence towards customers’ non-switching or loyal behaviour.

Significance of the study

Add value to the organization there by adding value to the shareholders

wealth and to the organization’s profitability

Methodology

Data source

Primary Data – Questionnaire

Secondary Data – Research Articles, Books, Data bases, and Internet

Sample size and Data collection Technique

– 200 questionnaires among the overall Grama Niladary division

Literature Review

Purchase

Usage

Evaluation

Satisfaction

Nonuse

Complaint Behaviour

Postpurchase Dissonance

Product Disposal

Committed Customers

Repeat Purchase

Increased Use

Brand Switching

Discontinued Use

Figure 2.1 Postpurchase Consumer BehaviourSource: Consumer Behaviour – Building Marketing Strategy

Analysis & Conclusion Variable Dimension Switching Customers Loyal Customers

Mean SD Mean SD

Marketing Mix

Product 3.96 0.874 4.02 0.8Price 3.79 0.945 3.68 0.912Place 4.13 0.871 4.07 0.75Promotion 4.08 0.789 4.29 0.66

Demographic Factor

Personal 3.157 1.142 3.419 0.841Economic 3.197 0.964 3.22 0.972Cultural 2.476 1.182 3.182 1.406Social 3.215 1.047 3.37 0.983

Psychological Factor

Perception 3.44 0.966 3.459 0.86

Emotion 3.57 0.937 3.66 0.814

Motivation 3.41 1.001 3.86 0.928

Attitudes 3.425 0.94 3.5 0.93

Learning and Memory

3.77 0.957 3.86 1.093

Source-Survey data

Variables

Switching Customers Loyal Customers

Mean SD Mean SD

Marketing Mix 3.99 0.847 4.015 0.78

Demographic Factor

3.01 1.08 3.3 1.05

Psychological Factor

3.52 0.96 3.67 0.925

Source-Survey data

Recommendation

Product

Should consider about their brand name and positioning of brand among potential customers.

Should market their product at different size in order to facilitate customers’ selection.

Should maintain their present high quality and taste of the soft drink.

If soft drink are available in plastic container at different container than glass or tin, that will be more convince for customer selection.

Should introduce new product under their brand name, in order to increase the brand reputation and profits.

Some older soft dink can re-modify according to customers’ need with favourable smell, and different taste.

The container design also should modify to attract more customers and target group. E.g. children

There is a demand for a soft drink with high nutrition and safety to health, therefore marketers can fill this gap by producing, soft drink with high nutrition or can product new soft drink for new target market.

Marketing Mix

Price

Low priced soft drink can be marketed

Provide discount facilities

Provide credit facilities and flexible payment.

Place

Should properly manage their inventory in each and every place where they are covering.

Marketers should properly manage the place where their product is available for customer purchase in order to pull the customer to purchase the soft drinks

Should ensure that the soft drinks are available at any quantities that customers required.

should have good relationship

should induce the sellers to recommend their soft drink

Promotion

Should revise their advertisements according to customers need and culture.

Can send their sales peoples

Can employ with public relational activities

Consumers’ Demographic Factor

Personal Factor

Can produce and market different carbonated soft drinks according to customers’ age group, and gender

According to educational and occupational segments.

Based on customers’ health condition.

Economic Factor

Should develop or reorganize their soft drinks by targeting various income levels and spending pattern of such groups.

Culture Factor

Based on customers’ culture and religion, marketers can deviate and differentiate the soft drinks in order to increase the number of loyal customers from different culture and religion.

Social Factors

Based on the material status and family size (influence from those) marketers can develop their packaging and advertising style.

While marketing the soft drinks, manufacturers teach to resellers to induce the right people.

Should know that who are the influence people on the decision of purchaser

Consumers’ Psychographic Factor

Perception

Should satisfy the customer expectations by delivering superior product.

Customer oriented activities.

Emotion

Customers’ emotions are the very crucial factor for a marketer to understand and satisfy.

Motivation

Soft drink marketers should clearly understand the different sources of customers motivation.

Attitudes

The introduction or modification of carbonated soft drink should enable the customers to maintain their attitude toward publicity of their family status.

Learning and Memory

Brand building strategies should adopt by soft drink markets in order to create long term memory in customers learning in order to sustain in the market place.

Implication

Offer more benefits to marketers for protecting their customers from switching

Comparative analysis of both switching and loyal tendency may also help

Bring number of advantages

Further Research Implication

It will be interesting to investigate this idea in other rest of the parts in Sri Lanka and involving people belonging to all ethnic groups.

It can be interesting to investigate with other influences factors, such as customers’ personality, macro environment factors (i.e. political, technological, westernization and localization), and environmental concern issues (green marketing oriented purchase) and so on.

Increasing the sample size and using other sampling techniques are also very favorable in the data collection as it gives greater accuracy of the data.

The same research can be done to other significant sectors

Thank YouThank You

the study of customer switching behaviour toward carbonated

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