ABSTRACT
The motivations of soft drink buyers are the subject of this study. What effect the marketing strategies employed to promote each brand of soft drink has on potential buyers. The two rivals’ branding strategies would be uncovered and analyzed so that a direct comparison could be established. The method of data collection and amassment is explored. In addition, hypotheses have been developed to test the interdependence of the five components that have been addressed. Coca-Cola or Pepsi, whoever is more behind and in need of the area of development, would be supplied with suggestions and recommendations.
INTRODUCTION
Background
The study’s major objective was to learn how these factors affected the consumption of soft drinks by people in Pakistan. The goal of this research is to better understand the factors that lead consumers to choose one soft drink brand over another. The results of the research will help marketers create more efficient strategies. Since we are interested in the Pakistani market, we will be focusing our investigation on that country. The purpose of this research is to learn more about customers’ perceptions of soft drinks, and more especially Coke and Pepsi, both before and after they make a purchase.
A brand may be anything from a simple name to an elaborate logo. Customers may get a general sense of what a company stands for through this. The values and stance of an organization may be communicated through its brand. So that consumers can tell you apart from the competition. People are continually looking for methods to improve products by giving them new features and presenting them in a way that competitors can’t match (Clifton and Simmons, 2003).
The beverage business in Pakistan is dominated by the same two oligopolistic titans that control every other sector of the economy: Coca-Cola and Pepsi. It turns out to be challenging to tell which of the two is now leading the market. In their pursuit of success, the duo has encountered numerous trials and tribulations. Both continue to face severe competition on a worldwide scale and develop cutting-edge innovations that give them a leg up at various times. Coke and Pepsi are both soft drink manufacturers. However, Pepsi Co. has a wide range of products outside of only the beverage market.
History of Soft Drinks
The term “soft drinks” originated as a response to the widespread use of alcoholic beverages in the United States; previously, Americans had gravitated toward hard, flavored drinks.
In the 17th century, the first commercially available soft drink was made from a combination of water, lemon juice, and honey. Modern society relies on soft drinks to quench their thirst. They wash down their meal with a variety of soft drinks. There are both natural and artificial tastes in these soft drinks. Drinks made from natural ingredients like fruits and herbs. While there are many different beverages on the market, people tend to favor those that appeal to them most in terms of flavor, quality, and the reputation of the brand. Brand loyalty grows when consumers feel safe and secure when purchasing from a company they know and trust. Later in the analysis, we’ll look at a number of other elements that contribute to a positive brand perception and increased earnings.
Pepsi Cola and Coca-Cola are the two most popular soft drink brands in the country of Pakistan. These are the two largest beverage companies in the world and the most well-known rivals in history. Carbonated beverages with water were first produced in Europe in the 17th century. Many other titles have been given to carbonated beverages throughout the years. Some scientists, like Joseph Black, referred to the gaseous component as fixed air, while others, like Gabriel Vanel, named it aerated water. On the other hand, in 1685, Robert Boyle conducted research on the water’s ingredients and characteristics, which revealed its impacts on human body. There were countless reports and probes. In addition, a short speech was made at London College back in 1722. But at first, bottled water was used to treat illness, and subsequently, as technology advanced and production methods were refined, bottled water became popular. Different
Flavorings like ginger were first produced in 1820, followed by lemon in the 1830s, and finally tonic in 1858. In 1886, John Pemberton came up with the idea for what would become known as Coca-Cola. (Klehr, et al. 2006).
History of Coca-Cola
The American soft drink formerly known as Coca-Cola but now simply as “Coke” was created. There was a significant transition away from wine bars and towards soda fountains in the 19th century. Coca-Cola was created in 1886 by US soldier and pharmacist John Pemberton as a substitute for morphine. “Doc” John thought it was a great way to make money and a huge success. There were several societal indicators that corroborated Doc’s point of view, but John didn’t know how to sell his product to the public. Coke’s initial tagline, “The Pause That Refreshes,” was created by Company accountant Frank Robinson. When John Pemberton died in August 1888, Coca-Cola’s already lackluster start only became worse.
Asa Griggs Candler quickly took control of Coca-Cola and by 1891 was the company’s sole shareholder. Before anyone ever purchased it, he wanted it to be their favorite.
Coca-Cola’s emblem appeared on notebooks, calendars, and posters in addition to discounts. At the time, this was seen as an expansionary action by analysts.
After a legal fight in 1898, Coca-Cola was exclusively offered as a beverage, having lost its name as a headache and tiredness reducing medication due to Candler’s reckless move toward more profitability. Candler was pressured into bottling Coca-Cola by the two brothers who owned a bottling operation in 1899.
and the initial agreement to begin bottling was inked. The “Hutchinson” type bottle was the first and most common bottle used.
Hilda Clark was the first celebrity to endorse a product as an advertising strategy in the year 1900. Coca-Cola’s “Thirst Knows no Season” slogan marked a shift in positioning for the company from a seasonal beverage to a year-round tropical beverage. In 1960, the first Coke cans hit store shelves. Coke’s original recipe was tweaked and rebranded as “NEW COKE,” but customers were not amenable to the change, thus “Classic” Coke was reintroduced. The 21st century saw the resumption and introduction of activities in a wide variety of nations, including Iraq, Argentina, etc. (Coca-Cola 2017).
Coca-Cola in Pakistan
Coca-Cola entered the Pakistani beverage industry and established local operations in 1953, just as it has in every other country across the world. This opened up fresh doorways for economic growth and social advancement in Pakistan.
In the 20th century, the Pakistani market finally gained access to Fanta, Sprite, Diet Coke, and Fanta Lemon. Coca-Cola’s operations in Pakistan are currently handled by Coca-Cola Beverages Pakistan Ltd.
Products of Coca Cola in Pakistan
Coca-Cola’s whole line of beverages is available in Pakistan, including Fanta, Sprite, Diet Coke, and Fanta Lemon.
History of Pepsi Cola
Pepsi was founded by Caleb Bradham. Brad’s drink was rebranded as Pepsi Cola in 1898 after initially being known as “Brad’s drink.” Also, in 1965, Pepsi cola and Frito-Lay merged to form Pepsi co, and the company gradually expanded into Eastern Europe and Japan.
In the 1970s, when businesses initially started establishing multiple plants every year, Pepsi was the pioneer in providing customers with lightweight, recyclable plastic bottles. After that, in 1971, new logos were used to further the red, white, and blue theme. In addition, in 1973, Pepsi Co foods international, later rebranded as Frito lay international, was established to facilitate the global trading of food goods. More than 150 nations at the time saw distribution of Pepsi goods in 1984, when the company made advertising history (Ali 2013).
Pepsi in Pakistan
In 1959, Pepsi became available in Pakistan. However, it was not widely known, therefore it failed and was eventually discontinued. In 1963, it debuted with reworked policies that significantly increased output in Pakistan. In recent years, Pepsi has struggled in comparison to another popular brand, Coca-Cola (Reddy, et al. 2015).
Products of Pepsi Cola in Pakistan
Products from Pepsi Cola sold in Pakistan include Mirinda, Team, 7-Up, Mountain Dew, Diet, Diet Pepsi, Lays, and Kurkure.
SCOPE OF RESEARCH
The purpose of this study is to investigate what influences consumers’ preferences for soft drinks. The overarching goal of the research is to discover whether and how different marketing strategies have an effect on consumers.
Finding and evaluating the two rivals’ branding strategies would allow for a side-by-side comparison of their respective strengths and weaknesses. The focus of this research would be on the primary factors that draws customers to a certain brand, and how they feel about and make purchases of that brand. The study’s findings would be used to provide recommendations to Coca-Cola or Pepsi, depending on whether company is further behind and more in need of the area for development. Coke and Pepsi would be armed with this knowledge, allowing them to focus their marketing efforts and customer service efforts where they will have the greatest impact.
PROBLEM STATEMENT
Determine whether brand-related factors influence customers’ perceptions and decisions regarding which soft drink (Coca-Cola or Pepsi) to purchase. Also, to compare and contrast the two leading soft drink brands, Coke and Pepsi, from the perspective of their customers both before and after they make a purchase.
SIGNIFICANCE OF STUDY
The elements that impact customers’ buying decisions and their views before they make a purchase have not been adequately studied. Therefore, the following are the benefits of studying currents:
Consumers
Consumers may use the data from this study to better decide between Coca-Cola and Pepsi when it comes to soft drinks, since it reveals the impact of branding on purchasing decisions.
Researcher
This research adds to the existing literature and can be used as a resource for future scholars. There would be an analysis of the variables that influence consumer spending that might be used elsewhere.
Organization
Organizations may use the study’s insights and recommendations to boost sales and profits by implementing new and better marketing strategies. The sales of soft drinks like Coke and Pepsi would also benefit from this. In addition, the findings of this research will aid customers in making more informed brand choices.
PURPOSE OF RESEARCH
The primary purpose of this study is to provide in-depth analysis of the industry on behalf of a potential investor. Knowing the pre-purchase perspective of consumers would allow us to get insight into their buying tendencies. It would also provide insight into how customers perceive the Coca-Cola and Pepsi brands. Particular attention would be paid to the impact of soft drink branding on customers’ purchasing decisions. Market competition is high since the two companies are always trying to increase their respective market shares and bottom lines.
The studies would also reveal that the industry’s profitability is expected to be high, but that growth may slow for some businesses because of market saturation. As a result, several major soft drink producers are expanding into adjacent industries including snacks and sweets.
LITERATURE REVIEW
The local brands and the global brands are viewed differently by people in various nations. The reach of local brands is limited to the immediate area. In contrast, global brands have a broader reach since their products are sold and advertised in more places. A consumer will not purchase a brand’s goods if that brand’s products do not meet the client’s needs. And he probably doesn’t want to buy from that company again. There are several things a consumer may consider before making a final decision on a product. A consumer is more likely to stick with a brand if he had positive experiences with it. If someone is unfamiliar with or dissatisfied with a brand, he is less inclined to try it out (Joseph, 2015).
Both beverages have similarities in flavor and visual appeal. The study set out to determine which soft drink is more widely consumed in Pakistan and why consumers choose one brand over another (Pepsi or Cola) and what variables play into their decision. However, research into these elements led them to the conclusion that commercials were the primary means through which their brand was introduced to the public. In addition, this study discusses global and local tactics, such as how local markets face competition from worldwide markets. Brand synchronization, which emphasizes brand loyalty, is also discussed in this study (Jamil Paracha, et al., 2012).
Brand and Branding
The term “brand” literally means “sword” in German, where it originated. According to Clifton and Simmons (2003), a brand might take the form of a name, a symbol, a word, a name, letters, numbers, shapes, a color, a logo, or a combination of these elements. A logo is a symbol that represents a company in the public’s mind, consumer thinking, consumers’ minds, etc. There is significance behind every symbol. Brand it means to mark with a hot iron in order to identify goods, as per the old definition. The only thing that truly sets these businesses apart from one another is their respective brands. Numerous brands serve as examples. Coca-Cola and Pepsi are the two most well-known soft drink manufacturers (Karam and Saidam 2015).
Consumer Buying Behavior
The most crucial factor is the consumer’s cultural background or milieu. However, there are numerous elements that impact a consumer’s buying behavior, not the least of which is culture. There are three main types of factors: Considerations of society, psychology, and the individual.
Social Factors: Time, location, and circumstance of purchase all have a role, as do the consumer’s social and physical surroundings.
Psychological Factors: This encompasses the buyer’s mentality and character traits in relation to the goods.
Personal Factors: consumer characteristics such as identity, self-perception, way of life, profession, and means of financial support (Stavkova, Stejskal and Toufarova 2008).
Consumer Buying Decision
The term “consumer” refers to an individual who purchases and uses various goods and services to meet his or her wants and requirements. A consumer must decide to acquire a product or service before making a purchase. There are six main considerations a buyer makes before committing to a purchase (Tantiwongwat 2013).
Problem Recognition
Before making a purchase, consumers must determine what problem they are trying to solve. The client must be aware of their own requirements. In other words, what exactly are they looking to buy? What people think they are vs what they are in any particular moment is also a part of this. (Jones 2014).
Information Search
The next step, after figuring out the issue, is to learn as much as possible about the product in question. There are a variety of places from which to glean this data. Therefore, it raises consumers’ consciousness about various brands. (Ibid).
Evaluation of Alternatives
Now that they’ve done their research on the specific band they want to buy, they’ll rate the brands in order of preference. They are initially concerned with the advantages the brand offers. They are also ranked according to the brand’s quality and cost (Bornmark, Goransson and Svensson 2005).
Purchase
This is the stage where the customer finally makes a decision to purchase a particular product or a brand (Bornmark, Goransson and Svensson 2005).
Post purchase
A customer who makes a purchase but isn’t completely pleased with it might send it back for a refund if it doesn’t live up to his expectations. (Bornmark, Goransson and Svensson 2005).
Feedback
After using the goods, the consumer provides comments on how satisfied he was with the purchase.
Brand Name
Differentiating one company’s brand from another is often done through the brand name. The purpose of a brand name is to catch consumers’ attention with its uniqueness. A brand’s name is extremely important since it conveys information about the product’s intended use to the buyer. It’s a crucial link in the chain that brings a product to life. A recognizable brand name may also be an effective technique of dissemination of information. Some companies, however, assign their products not on the basis of emotional experience for the customers, but on the basis of what is memorable and memorable immediately upon seeing it. A brand’s name must be one of a kind and appealing to the target audience in order to be successful. It seems to reason that a brand with a catchy name will do well in the marketplace. Many businesses these days employ the tactic of giving their brand a distinct moniker (Tantiwongwat 2013).
Brand Awareness
By informing the intended audience that they are well-versed in the brand and its products, brand awareness may be achieved. The three stages of brand awareness are: being known, being talked about, and being remembered (Koniewski 2012).
Figure 3: Levels of Brand Awareness
See figure in (Read more section) pdf.
Brand Recognition: In this initial phase, consumers learn to recognize the brand. Brand recognition occurs when a product or service becomes so familiar to a consumer that he or she prefers it to others on the market.
Brand Recall: Given the wide variety of options available to him, the buyer often makes a snap decision on which brand to purchase at the very moment of purchase.
Top of Mind: When customers are asked to name a brand, they should think of the one that comes to mind first. Some of the things that help people remember your brand include:
Be unique, unforgettable: There is a need to differentiate items because so many of them seem the same in today’s market. A brand can only effectively convey the unique qualities of its product if it is the only one of its type. In order for it to be obvious to buyers what they’re getting.
Involve a motto or tune: Because it incorporates a visual aspect of the business, a slogan may have a powerful connection to the brand. This illustrates the power of a catchy slogan or tune in effecting change.
Publicity: Advertising the goods is essential if you want people to recognise it. Skilled promotion and brand awareness-building are the goals of advertising.
Event sponsorship: The primary objective of event sponsorship is to increase product visibility.
Brand expansion: Customers are more likely to remember a brand if they see its name, symbol, or emblem on other items. Coke and Pepsi, for instance, are household names that have spawned many spinoffs.
Using signs: Packaging is the most important feature of the product as when the customer comes to buy a product the first thing he/she sees is the packaging of that product. If he is not aware of the product the packaging can give him/her a clue of what a product is about.
These were some of the most common factors that lead to brand awareness (Bornmark, Goransson and Svensson 2005).
Brand Loyalty
Consumers’ preferences are profoundly impacted by their amount of brand loyalty. If a customer is pleased with a certain brand, he or she is more likely to purchase that brand in the future. Repeat buyers don’t care about pricing and will always buy the things they prefer. Once a consumer has decided on a certain brand, they are unlikely to change their minds. When people find a product they enjoy, they tend to remain with it, which may be seen as brand loyalty. Because switching from a customer’s favourite brand is challenging, customers are less inclined to take the risk of trying another brand. However, if they are satisfied with the quality of a competing brand, they may switch. On a consistent basis, consumers are aware of the value they are receiving. In addition, customers frequently ignore competing items when shopping.
their favoured brand, given that rival brands may really be superior in quality to the one the buyer prefers. Customers’ propensity to move to a different brand is correlated with the degree to which they have an emotional connection to that brand. The name of the brand, the customer’s familiarity with the brand, and the customer’s opinion are all aspects that contribute to brand loyalty. (Bornmark, Goransson and Svensson 2005).
Satisfaction Trust Figure 4: Attributes of Brand Loyalty
See figure in (Read more section) pdf.
This is the simple model for the brand loyalty which includes brand trust, satisfaction, commitment, repeat purchase and involvement that gives an outcome i.e. brand loyalty.
Brand Perception
When we talk about how people feel about a brand, we are referring to their perceptions of the brand. People are more likely to purchase a certain brand because of the impression it leaves on their minds. If a customer has a positive pre-purchase impression of a brand, he or she is more likely to give that brand a try; conversely, if he or she has a negative pre-purchase impression of a brand, for whatever reason, he or she will not even consider buying that brand. A customer’s opinion can be influenced by their upbringing and background, but marketers can only do so much. A customer’s preference for one brand over another might be based on his or her preconceived notions about that brand, such as the belief that Coke tastes better than Pepsi or vice versa. Culture, society, politics, and religion all have a role in shaping people’s perspectives. (Khanna 2015).
Taste Preference
Many findings indicate that the drinks’ flavours are the only reason for their popularity. Consumers often base their purchases on how something tastes. If a consumer tries a soft drink like Pepsi or Coca-Cola and like the flavour, for instance, it stands to reason that he would continue to buy and drink the product. Customers’ decision-making is greatly influenced by how something tastes. It follows that consumers place a premium on flavour when choosing a brand. (J 1998) .
Competitors
Competition in every market may be broken down into the following five factors: rivalry among enterprises, threat of new entrants, possibility of replacement goods, bargaining power of suppliers, and bargaining power of consumers. In low-profit sectors, competition is fierce. (Strategic Analyst’s Toolkit n.d.).
Figure 5: Porter’s Five Forces Model
See figure in (Read more section) pdf.
Porter’s Five Forces Model
Rivalry among Competing Firms
There are a lot of players in Pakistan’s beverage market, but Coke and Pepsi are the two biggest names. Both parties come up with unique strategies to get an edge in the market.
Potential Entry of New Competitors
There are new local firms entering the market with unregistered patents, hoping to steal a little of business from the likes of Coca-Cola and Pepsi. Both companies adjust their price methods in response to the competition from regional brands. An story in the Dawn newspaper said that in the wake of the introduction of competing products, both companies had reduced the price of their 1.5-liter offerings (Khan 2003).
