The literature review discusses factors that affect customer loyalty in four key areas: 1) Factors that influence customer loyalty include satisfaction, perceived quality, value and expectations. Loyal customers are less price sensitive and spend more. 2) Coca Cola and Pepsi build loyalty through differentiated targeting and diverse product categories. 3) Current issues in the carbonated drink market are affecting youth consumers, potentially decreasing sales. 4) Young consumers are an attractive market segment due to their purchasing power, but they are not homogeneous and marketing must appeal to individual preferences.

1. Building Customer Loyalty
A Research Study Based on Youth Students
For the Consumption of Carbonated Soft Drinks
By
Sam Jose
(G: 20395123)
MSC Business Management
Lancashire Business School
Supervised by,
Roger Armstrong
University of Central Lancashire
United Kingdom
1

2. ABSTRACT
The expansion of customer loyalty is a deliberate objective for most of the companies. In
many business situations, the most important part of marketing activities can be observed as
the growth and maintaining repeat patronage or loyalty among the customers. The purpose of
this research study is to examine the importance of youth consumers in the carbonated soft
drink industry in order to build brand loyalty to maintain world market leadership.
Hence this research study is focus on establishing loyalty among youth consumers. However
the behaviour, purchasing decision and loyalty towards the brand is measured by comparing
with world‘s market leaders of Coca Cola and Pepsi youth consumers and differentiate their
competitive advantage.
The literature review covers all possible ways in explaining the importance of maintaining
customer loyalty and also explain ways in which customer evaluate the product for their
purchase decision for the long term business performance. This research also investigates the
issues with the consumption of carbonated soft drinks among the youth consumers will be
examined. At the same time the investigation also explains the significance of building brand
loyalty within the youth consumers in the carbonated soft drink market.
Finally, the study recommends how to attract the youth consumers in the carbonated soft
drink industry at present and make some tentative recommendations for both Coca Cola and
Pepsi Company.
2

3. DEDICATION
This dissertation is dedicated to my pursuit of understanding the issues faced in the
carbonated soft drink industry, and maintains customer loyalty in this sector and support and
love of my family in India without which this endeavour would not have been possible.
3

4. ACKNOWLEDGEMENT
I would like to thank my supervisor, Roger Armstrong for his support, guidance and time
given to me over the last few months. Not only has he gone out of his way in supporting me
but has also been the main person in making this dissertation what it is today.
I would also like to thank the hundreds of academicians and authors whose dedication and
work I have used through the course of my literature review.
Much appreciation goes out to my university (UCLAN) in providing me with all materials
needed to make this dissertation.
I would also like to express my gratitude to my parents for their love, prayers, moral and
financial support towards my education and making me what I am today.
4

5. TABLE OF CONTENTS
TITLE PAGE................................................................................................................... I
ABSTRACT..................................................................................................................... II
DEDICATION................................................................................................................ III
ACKNOWLEDGEMENTS........................................................................................... IV
TABLE OF CONTENTS................................................................................................ V
CHAPTER ONE Introduction....................................................................................... 7
1.1 Conceptual Background..........................................................................................7
1.2 Aims.......................................................................................................................10
1.3 Research Objectives...............................................................................................11
CHAPTER TWO Literature Review............................................................................12
2.1 Factors affecting Customer Loyalty.......................................................................12
2.2 Consumer evaluation on Brand which Creates Loyalty.........................................16
2.3 Influence of Behavioural and Attitudinal Loyalty among consumers....................20
2.4 Carbonated Soft Drink Industry............................................................................22
2.5 Present issues with the Carbonated Soft Drink Market.........................................25
2.6 Importance of Youth Market.................................................................................28
2.7 Pepsi‘s Youth Market............................................................................................31
CHAPTER THREE Research Methodology......................................................................32
3.1 Introduction...........................................................................................................32
3.2 The Research Philosophy and Need for Paradigm................................................33
3.3 Principle behind the use of Triangulation............................................................36
3.4 Data Collection Methods.....................................................................................37
5

6. 3.5 Pilot Study and Pre-testing Questionnaire...........................................................39
3.6 Secondary sources of data...................................................................................40
3.7 Data Analysis.......................................................................................................41
3.8 Period covered by research..................................................................................43
3.9 Ethical Considerations.........................................................................................43
CHAPTER FOUR Questionnaire Result.........................................................................44
4.1 Introduction.........................................................................................................44
4.2 Results.................................................................................................................44
CHAPTER FIVE Discussion.............................................................................................63
5.1 Summary of the Findings.....................................................................................63
5.2 Discussion of the Findings...................................................................................64
CHAPTER SIX Conclusion................................................................................................69
6.1 Recommendations.................................................................................................72
6.2 Implication for Further Study...............................................................................72
BIBLIOGRAPHY................................................................................................................73
APPENDIX..........................................................................................................................87
6

7. Chapter One
Introduction
1.1. Conceptual Background
This research study deals with the problems facing by the carbonated soft drink market in
order to maintain customer loyalty among the youth targeted audience. Hence descriptive
research methods are using for this research study in order to identify and obtain information
on the distinguishing of a particular problems or issues facing by the carbonated soft drink
industry. As (Hussey, 1997) pointed out that descriptive research method which helps to
explain the fact as they exists. Hence this method of study will helps to identify the issues or
the problems facing by the carbonated soft drink market in past and present situations, mean
while descriptive method of research study will helps to obtain the data which often collected
quantitatively and the statistical techniques which helps to summarize the problems or
information in order to identify the current issues in the markets. The main reason for
choosing this topic is because of the current problems facing by the carbonated soft drink
industry of Cola markets among the youth and young adult consumers which cause to
decreases the sales of carbonated soft drink market and it may cause the declining customer
loyalty among the specified age range of markets. According to (Galguera et al.(2006) and
Quinn et al. (2007) collecting information related to attitude, motivation and behaviour of the
consumers of the students who consuming the carbonated drinks will enhance to get an
understanding on consumer behaviour and marketing decision making.
Developing, maintaining and retaining customer loyalty towards a firm‘s product or services
is generally to be seen as the important factor in the marketing activities Dick and Basu
7

8. (1994). Customer loyalty is one of the most important factor or the issue facing by the
business today. Unless the companies can retain the loyalty of their customer, they will lose
their customer for repeat purchase and the long term future of that business will be uncertain
Linton (1993). According to Dick and Basu (1994) customer loyalty has been defined as the
strength of the relationship between the individual‘s relative attitude and repeat patronage.
Therefore Aaker (1992) pointed out that considering the brand loyalty reflects the likely
habitual behaviour of the consumers when brand make changes in the price, product features,
its communication and distribution programmes etc. It is an important part of the marketing
side for the expansion of the customer loyalty which focuses on the marketing strategy due to
the benefits related with the existing retaining customer Gwinner et al. (1998) and Hagen and
Matthews, (2001). Discovering an exact measurement of loyalty is very important due to its
profitability Reichheld (2003).
However the concept of the customer loyalty is still unknown Hart et al. (1999). Consumer
intended to repurchase the same brand after using it because they recognized that this
particular brand or product meet their exact features, advertising, image of the brand or in
terms of quantity at the right price. Thus brand loyalty is a combination that may require with
the psychological and behavioural measurement towards the consumers Jacoby and Kyner
(1973) and Knox (2001). For example consumers who may receive the basic information
about new cola product. This product information will consist of price, package, taste, brand,
price etc. However soft drink is a low involvement product and the new brand of product is
unattractive to the consumers. But it is unlikely that the customers will be conscious towards
the new product. Instead for a low involvement product such as cola soft drink, the
purchasing decision of the consumers will be likely influenced by the factors such as brand,
packaging of the company, company image and advertisement etc. However analysing the
choice of brand preferences will prevent towards brand attitude and choice behaviour
8

9. Sengupta and Fitzsimons (2000). As market becomes more competitive and most the
companies are trying to maintaining the existing customers and some companies have been
introduced variety of activities to improve customer loyalty. However in business, benefits
associated with customer loyalty are widely recognized. These include capturing of low cost
related existing customers rather than capturing the new customers especially within mature,
competitive markets Ehrenberg and Goodhardt (2000). It is known that increasing the long
term relationship with the consumers is more beneficial so that the reward for this group of
consumers will be long term and increasing Grayson and Ambler (1999).
The brand consumer relationship among the consumers may vary depending on the different
personality of consumers and the way in which individuals build up relationships Fournier
(1998). However Fournier and Yao (1997) pointed out that customers may also create
attachments with more than one brand in the same category. Hence this research also
concentrating on the behavioural and attitudinal loyalty among the consumers in the
carbonated soft drink market comparing with the Coca Cola consumers and Pepsi consumers.
Chaudhuri and Holbrook (2001) suggests that the behavioural loyalty will helps to identify
the repeat purchase behaviour of the brand, whereas attitudinal loyalty gives a degree of
obligation towards the value associated with the brand. There are many ways to correlate the
attitudinal and behavioural loyalty among consumers. Customer behaviour of purchase can be
obtained from the survey result taken by customers. However attitudinal loyalty can be
measured in a survey, taken by the customers in which their observation on various issues
such as relationship between the brands, switching behaviour of customers etc Chun (2008).
Hence the survey results helps to analyse the data which gathered among the consumers
loyalty can be specified, estimated, assessed and presented in a systematic manner Chun
(2008).
9

10. Youth customers are one of the attractive sector as it concerned as the large demographic
group in most of the developed countries and it was extremely benefit the business sector to
produce lot of sales in this particular sector Josefowicz (2003) and Solomon (2007).
Moreover obtaining the relationship of young consumers in the early age of period habitually
formed and other services may be cross selling over the time in deeper and it will create the
people to start a relationship to the product which exists Thwaites and Vere (1995). More
significantly consumers are more individualistic and today‘s market is being globalized. It
means that the company should know that what makes the customer to take a quick decision
and satisfies the customer is primary to the modern business world Ellwood (2002).
Therefore Coca Cola and Pepsi always trying to keep particular differentiated target
customers, for which they build different kinds of marketing strategies in order to retain the
specified targeted customers. For example of diversity of categories are ‗Coke Diet‘ and
‗Pepsi Max‘ Ellwood (2002). Nevertheless, the youth market is segment is not homogenous
in nature Lewis and Bingham (1991) and Bartlett (2004). When price is not an important
factor to the customer, especially low involvement product of cola most consumers are make
their purchases based on how they feel about the product. Mean while positive feelings such
as happiness, love, are some of the desirable feelings of the consumer and advertisement play
an important role which emotionally motivates the consumer to buy the product effectively
Cathy (2007).
1.2. Aims
The overall aim of this research study is to examine the behavioural and attitudinal loyalty
among the youth consumers in the consumption of carbonated soft drinks and to analyse their
influential factor for the purchase of this low involvement product and also reasons for
dissatisfaction.
10

11. 1.3. Research Objectives
This research studies have a clear set of objectives in which each of the aims having a
relation between each other to be achieved as follows:
 To review the literature to identify the influencing factors of attaining customer
loyalty among the youth consumers in carbonated soft drink industry.
 Gather research data for comparing the factors influenced by the youth consumers for
building customer loyalty of Coca Cola and differentiates with the Pepsi Consumers.
 Analyse the current problems faced by the carbonated soft drink market affecting to
the youth consumers.
 Comparing contrast of fundamental reasons for increase or decrease sales in the
carbonated soft drink market.
 To draw conclusion and make tentative recommendations.
11

12. Chapter Two
Literature Review
In this chapter, the literature review was divided into four sections. First of all it reviewed the
general concept that describes the factors affecting customer loyalty for maintain long term
business performance. Secondly, it is comparing the influencing factors of lasting customer
loyalty of Coca Cola Company with their major competitor Pepsi. In the third section, it is
investigating the current issues affecting to the carbonated soft drink industry. Finally it is
investigating whether young consumers are beneficial for the Coca-Cola Company and Pepsi
in order to increase their revenue.
According to Dick and Basu (1994) customer loyalty has been defined as the ―strength of the
relationship between the individual‘s relative attitude and repeat patronage towards the
products‖. Customer loyalty is often related with a brand. Based on ideas and principles in
marketing a brand is a name, sign, symbol, term or design or combination of these, created to
identify and differentiate the brand includes goods and services of one seller from those of
competitors Kotler (2003). Operationally, a brand conveys to identify the name or fame that
representing a specific set of unique features, benefits and services to the buyers. Brand
building is a major part from the marketing side in order to undertake the attraction of
customer loyalty Kotler (2003).
2.1. Factors affecting customer loyalty
Majority of the marketers agreed that ―loyalty‖ is the most important factor that which affect
the performance of the company and Dowling et al. (1997) pointed out that that the loyal
12

13. customers are less price sensitive and spend more in the product while they are loyal to the
specific brand or the company. Moreover there is a primary belief among the marketers that it
is cheaper to market to existing loyal consumers rather than the new ones. According to the
more academic approach by Oliver (1999) consumer loyalty which means an intensively
commitment with the consumers to buy the product or commitment with the product and
services in the future. Therefore it is uncertain whether that a repeat purchase behaviour or
retention can be fully regarded as a customer loyalty or devotion should be considered as
such. For example a routine purchase of buying bread at the corner shop an act of loyalty to
brand or whether it is convenience with the shop. In fact several studies has been proven that
there exists a direct connection between the satisfaction and loyalty. Previous research studies
examined that the satisfied customers become loyal and dissatisfied customers may move to
the other seller Heskett et al. (1993).
The primary objective of implementing ACSI (American Customer Satisfaction Index) in
1984 was to explain the development of the customer loyalty. Therefore in ACSI model there
are three factors which include the past experiences of the customer loyalty they are;
perceived value, perceived quality and customer expectations Anderson et al. (2000).
However in the ECSI (European Customer Satisfaction Index) model divided into two
elements. First one is ―hard ware‖ which contains the elements of the product and services
and the second one is ―human ware‖ which consists the customer service which means the
personal behaviour and atmosphere of the environment Grönholdt et al (2000). In both of
these models it is revealed that satisfaction should increase the loyalty of the consumers.
When the satisfaction is low the customer will have the tendancy to exit e.g. switch to a
competitor or express their complaints about the product or services Grönholdt et al (2000).
Researchers have shown that 60-80% of customer who defect to the competitor said that they
13

14. are satisfied or very satisfied on the survey just previous to their defection Reichheld et al.
(2000). Hence it is clear that there should be other factors apart from satisfaction will have an
impact on the customer loyalty.
Several authors have measured different aspects of loyalty. Mostly loyalty have been seen as
a multidimensional construct acknowledged by different dimensions, some of which can
identified by the behaviour of the customers and other on the basis of psychological
processes. Hence Rundle (2005) pointed out that that it should be measured by
individualizing the attitudinal loyalty defined as a customer tendency towards a brand that
include preference Bowen and Chen, (2001) and Butcher et al, (2001) intent to repurchase
Bloemer et al. (1999), obligation and word of mouth Ganesh and al. (2000) a complaining
behaviour having the positive and negative meaning of dissatisfaction response. Research
has shown that the declining of retention only by a small percentage can have the advantage
on the major profitability of the company Reichheld and Sasser (1990). According to Little
and Marandi (2003) a stable consumer base creates the opportunity for cross-selling and it
decrease the cost of marketing. (Evans and Laskin, 1994; Mittal and Lasser1998).
While explaining the positive effects of having loyal consumer base, customer loyalty is
value motivated for. It is to be mentioned that while improving the quality of customer
loyalty, a key issue or argument factor is that identifying the problems for the customer
defection, i.e. causes for the customer disloyalty. Payne (2000). Kim, Han and Park did a
immense research and from that research they analysed that the brand personality and loyalty
have a link between each other. From their research they got positive support to hypothesis
that the brand personality ultimately affects the brand loyalty Kim et al. (2001). People have
14

15. showed that they are using the particular brand or product of a company for their self image.
Tidwell and Horgan (1993).
Customer satisfaction is prior to the loyalty. Customer satisfaction can be used as an indicator
of future consumer purchases and the satisfied customers will have a higher probability of
creating repeated purchase behaviour in time Zeithaml et al. (1996), of recommending others
that to try the source of satisfaction (Reynolds and Arnold, 2000; Reynolds and Beatty,
1999), and of becoming less willing to the competitor‘s offerings Fitzell (1998). More
specifically satisfaction is found to be essential influencing factor of customer loyalty
(Fitzell, 1998; Fornell, 1992;Reynolds and Beatty, 1999; Sivadas and Baker-Prewitt,
2000;Zeithaml et al., 1996). Whereas satisfaction and customer loyalty recognized to be the
most strongly relationship in most of the research studies. (Anderson andSullivan, 1993;
Fornell, 1992; Rust and Zahorik, 1993; Taylorand Baker, 1994). Satisfied customers will be
always thinking to be loyal to the brand or product Rowley (2005) or without considering
any effect of the other variables Fornell 1992 and Oliva et al. 1992.
Even though the massive growth of young people among the population, media is always
concentrating to remain the youth target audience. The media has always a play a major role
in order to increase the loyalty customers. Television, radio and all other campaigns attracting
the youth and marketing aims aged between 18 to 35 years of old customers. Younger
consumers are very significant and vital, but the problem is if the advertisers are
concentrating on youth targeted audience, they are ignoring the other demographically and
economically vital market of target customers (Carrigan and Szmigin, 1999). Advertisers and
the marketers may have ignored the past generations over 50‘s but they should need to
formulate an idea of strategy towards this new generation customers to fit, healthy and above
15

16. all approach to the older people also because the new generation young consumers may
become the future older customers which will reflect on the loyalty of a product Marrin
(1999).
2.2. Consumer evaluation on brand which creates loyalty
According to Hossain (2007), consumer brand evaluation can be studied for the non durable
products especially soft drinks can be studied through certain factors such as brand, brand
image, brand attitude, product attributes and perceived quality. Soft drinks is an important
product item in both urban and rural areas. Consumer may purchase the soft drinks today for
their refreshments. Hence the soft drinks is consumed all over the world shows the massive
demand among the consumers (Nuruzzaman, 1996). The consumer purchasing decisions of
soft drink are influenced by a lot of factors, which direct the consumers to select a specific
brand in preference to others. They are as follows;
2.2.1 Brand
The brand is to be concerned as the centre of element of a product which allows other
information regarding the brand to be support to it Aaker (1991). A brand which means
cannot measured to be chosen (Baker et al. 1986). Consumers will themselves take decision
to buy the particular product because of the popularity of the well established brand (Roselius
1971, Jacoby et al. 1977 both cited in Keller 1993). If a consumer want to buy a particular
brand, a positive attitude should be create first but brand attitude and intention to buy certain
brand cannot be formed unless brand awareness occurs Rossister et al. (1991). A good brand
name gives a initial feeling to the particular brand will be attracted by the customers and
gives a good marketing edge to compare with that of the competitors Rooney, (1995). For
16

17. example a study showed in Turkish cola market that 79.4 per cent of the people like Turkish
cola brand name. It is because of the Turkish cola consumers become aware of the brand cola
Turkish. The advertising concept attracted the cola Turkish consumers to buy the particular
product and the brand name have a influence in the nationalistic value, Turkish life style, act
of patriotism and positive nationalism. Ulas and Arslan (2006). According to a survey
conducted by the grocery manufacturers in USA, American consumers are loyalty to their
national brand and a familiar brand is their first preference or second preference to select the
product from the supermarket (Ulas and Arslan, 2006). Consumer may create certain
relationship with the brands on the basis of certain characteristics of those brand and their
perceptions and their behavioural attitude towards the brand (Firat and Schultz, 1997). Brand
provides that the producers to give added value to their product and services. Nobody can say
that the differentiation on coke and pepsi. It is because of the Coke‘s added value divide
these brand and giving differentiation in the market share Blacket (1991).
2.2.2 Brand Image
A brand image which means the consumer understanding about the whole brand and how
they see it and it doesn‘t happen together with the brand identity. Brand image can be defined
as the consumers‘ emotional concept or response towards the particular brand (Dobni and
Zinkhan,1990). Chiranjeeb (1997) claimed that the brand name is the basis of brand image. In
a broad view purchase decision of a product or particular brand are based upon the existing
attitude towards the brand at the time of purchase. Consumers buying intention of a product
are based on the converting of their attitudes into intentions and buying behaviour are very
frequent Hossain (2007). Coca cola is a brand of soft drinks which have specific and
17

18. protected trade mark, logo, pack and design. Coca cola brand offers consumers taste,
refreshment and promising value and quality worldwide Blacket (1991).
2.2.3 Brand Attitude
An attitude towards a brand is not an obvious behaviour but rather it is a secret or
unobservable internal reaction among the consumers Kim (2002). It is one of the perceived
idea in the marketing Gillbert (1995). The responses of attitude among the products become
positive or negative. Consumers may become learn these attitude over time by being
observing into the product openly or by receiving information about the product. Learned
attitude towards a brand guides the common behaviour among the consumers and getting
consistently favourable or unfavourable response towards the pattern Hossain (2007). Gibson
(2008) reported that the word of advertising seems too basic for the effective of advertising.
For example a Can of coke next to the word ‗awesome‘ or a can of pepsi showing the picture
of a happy couple. Prior research studies shown that the reported attitude towards a brand are
not affected by the things similar to each other. However a news paper in June, 2008 issue of
the Journal of Consumer Research analysed that our suggested opinions and findings that we
actually found will be more influenced than we think. Bryan Gibson (Cental Michigan
University) had showed the students of psychology undergraduates regarding the selection of
cola brands with the words and images Coleman (2009). From the participants he analysed
that the students having different attitude towards the brands, For example some students
have positive attitude towards cola brand associations such as a field of flowers, the word
awesome or a mother holding a child. However other had negative aspects towards these
words or images. Gibson explained that for choosing a product, the complete product attitude
18

19. towards a brand have greater influence while choosing and the consumer may be distracted
or making any unplanned selection for purchasing a product Coleman (2009).
2.2.4 Product Attributes
Product attributes which shows the benefits of products, and these benefits or quality of these
products are the base for using the advertisement and the promotion offer to join with a brand
that motivates the consumers for the influence into the brand attitude Hossain (2007). Now a
days the differentiation of product of the different companies have no importance in giving
the product attributes which may not creates any differences from those of competitor‘s or
sometimes they are not actually used by the consumers at all (Chowdhury and Islam, 2003).
The claim of being a ―Safe‖ sugar replace with the Coca cola and Pepsi gained a significant
integrity offering their products that contained Nutra sweet (Rao & Ruekert, 1994). In effect
these other firms were creating reputation through communicating to the market place that,
should be product turn out to be injurious to health of consumer‘s then Coca Cola, Pepsi and
other companies agreed that the nutra sweet will suffer the unfavourable publicity or
consumer refusal (Rao & Ruekert, 1994). Different techniques had been introduced in the
literature that suggests that which attributes are likely for the consumers to evaluate the
product (Snelders and Schoormans, 2000).
Making product differentiation from those of the competitors can by adding a worthless
attribute may increase consumers‘ quality insight or it can reduce the perceived risk
(Simonson and Tversky, 1992). It is proven that the product attributes are most important to
the consumers. In real life the decision making process of the product by consumers are not
19

20. only attracted by the present value of the product but also has to take the future performance
of the product and attributed services into consideration (Chowdhury and Islam, 2003).
2.2.5 Perceived Quality
Perceived quality can be defined as the consumer‘s evaluation about the overall performance
or superiority of the product (Zeithaml, 1988; Aaker and Jacobson, 1994). Perceived quality
engages the competitor frame of reference. Perceived quality is basically the consumers
perception about the product and thus will get the concrete overall opinion about the brand.
Furthermore perceived quality is actually differentiated from the actual quality and can
analyse from the previous experience from the product and services Anderson et al (2006).
However there is a argument in the loyalty segment. The prediction of the perceived quality
reported by the loyalty customers versus those of the customers who are loyal to another
brand will be usually different. Hence the measurement of perceived quality may not be exact
in some contexts Aaker (1996).
2.3. Influence of Behavioral and Attitudinal loyalty among consumers
Brand loyalty will have great impact on the purchasing behaviour and commitment to
repurchase the product or services in the future, thus it helps to causing repetitive purchasing
behaviour among the customers even though it affect the situational influences and marketing
efforts to cause switching behaviour. Oliver (1999, p. 34). This definition of loyalty will
helps to differentiate the loyalty as behavioural, and attitudinal. Chaudhuri and Holbrook,
2001;Uncles et al., 2003).
20

21. 2.3.1 Behavioural Loyalty
Accordingly some authors (Chaudhuri and Morris 2001, Bandyopahyay and Martell 2007)
behavioural loyalty means the customer‘s interest to continue the relationship with the
provider in the short period. In other words customer interested to continue the relationship
with the current provider or services cause into switching behaviour. In that sense
Behavioural Loyalty doesn‘t meant to be the interest in the commitment with the provider
however it shows the degree of loyalty in the immediate future. Behavioural loyalty in the
consumable goods market are often the result in the habitual behaviour of the consumers. For
example Coke and Pepsi is a non durable consumer product East, (1997). However the initial
purchasing behaviour of the consumer product may result into the decision making process of
the attitudinal behaviour loyalty of the consumers. Furthermore the changes in the market
such as new entrants, changes in the legislation or technological improvement, thus the
purchaser is always likely to make different decision. Thus breaking the habitual nature of
purchase from the customers Rundle and Bennett (2001).
In 1990 it has been seen that the unpredictable increase in the number of competing soft drink
product alternatives arise and increase the breakup of markets, For example coke‘s market
share has been dropped from 24.2% to 21.7% from 1975 to 1984 , the percentage of coke
users drank of 18% reduced to 12% percent due to the to the differentiation in the rivalry
products Hartley (1992). With the introduction of soft drink products, a massive exclusively
loyal consumers of regular one brand becomes diverted to more than one brand. Thus it
divided the behavioural loyalty to divided loyalty Thompson, (1996). Under this
circumstances the managers view point is building brand loyalty cannot understand the
customer who exclusively purchasing the particular brand. However there should be more
21

22. interested in the comprehensive understanding about their brand loyalty base (Yim and
Kannan, 1999).
2.3.2 Attitudinal loyalty
Attitudinal loyalty can be derived as a tendency towards the company deriving from a
psychological process (Jacoby 1978, Rundle and Thiele, 2005). By defining ―attitude‖ is a
person‘s quite feelings, consistent evaluation and tendancy towards an object or idea . People
having different kinds of likes and dislikes of moving towards or away from them
(Armstrong and Kolter, 2.009, p. 177). Hence within this perspective thus it became evident
to understand the attitude of customers towards a particular product to marketer‘s offerings is
an essential element to win in the market place. Accordingly the attitude, motivation and
purchasing behaviour of the students to the purchase and the consumption of the non
alcoholic beverages will enhance to understand the consumer behaviour and the marketing
decision making. According to the previous researchers majority of the existing studies
generalise about the consumers attitude, motivations and behaviour about the food and
beverage consumption, whereas several authors Dibb and Simkin, 1997; Moschis et al., 1997;
Tam and Tai, 1998; Nwankwo and Lindridge, 1998; Lin and Hsu, 2002; Galguera et al.,
2006; Quinn et al., 2007; Gbadamosi, 2007) pointed out that increasing different market
segmentation based on the different diversity which exist among the consumers.
2.4. Carbonated Soft drink industry
The growth of the carbonated soft drink(CSD) from the period of 1960 to 1990 was
incredible and have a great increase in the population in these 30 years. Per capita
22

23. consumption of the soft drinks increased to 2.5 times over the 30 years period of time.
Coleman (2009). Dube (2005) reported that in 1998, 49 percent of the total U.S. beverage
gallons consumed per capita by the CSDs per year. Market size, growth rate and overall
profitability are the three economic factors that can be indicated as to evaluate the soft drink
industry. Datamonitor (2005) found that the value of the soft drink market totally reached
$307.2 billion in 2004 with a market value of forecast of $367.1 billion in 2009. A recent
study by the national carbonated soft drink association (NSDA) evaluate that the industry
currently employs over 175,000 people, generating $8 billion per year in the salaries and
wages Dube (2005). In 1998 CSDs accounted for 49% of the total gallonage in the US
beverage market, increasing over $54 billion revenues approximately 56.1 per cent gallons
consumed per capita per year Beverage world (1998).
Carbonated soft drink market consists of diet cola, standard cola and some fruit flavoured
carbonates and mixers. The United Kingdom market of carbonated soft drinks generates
revenue of $9.6 billion in 2008. The coca cola company accounts for 24.8% volume of
carbonated soft drink market in UK. Supermarkets and hypermarkets supply 34.5% of
carbonated soft drinks. The United Kingdom soft drink market is reduced to 0.7% in 2008 to
reach the a volume of 6.2 billion litres. The carbonated soft drink market in UK forecast to
decline with CARC - 2.2% predicted in the five year between 2008-2013. Datamonitor,
(2008). A significant failure in the year of 1985 was reported was the introduction of new
coke (the reformulation of the Coca-Cola‘s flagship product) was meant to be the riskiest
product introduced in the history of CSD Greising, (1998). New coke turned to be a failure of
product in the market however the original formulae was redistributed immediately. Hence
the introduction new coke proved that without consumer acceptance, the new product will fail
according to their inception and harm for the firm‘s ability to effectively market the product
23

24. to the consumer base Greising, (1998). Gerry (2002) stated that the Coca Cola widely
regarded as the world‘s popular valuable brand has an estimated value of $70 billion.
2.4.1 Industry investigation of soft drinks
Deichert et al. (2006) pointed out about the soft drink industry by stating, ―For years the story
in the non alcoholic sector centred on the power struggle between Coke and Pepsi. However
industry giants have begun started relying on new product and creating for non carbonated
beverages for their growth extension. Hence in order to understand the soft drink industry
market it is essential to consider the factors such as the dominant economic factors, five
competitive forces, trends in the soft drink industry and the industry key factors.
2.4.2 Dominant Economic Factors
Market size growth rate and profitability are the major three economic factors that can be
used to analyse the soft drink industry. The market volume of the industry has been changing.
In the non alcoholic industry, the soft drink consumption has a market share of 46.8%.
illustrated in Table 3. The total value of the market share of soft drinks industry has been
increased to $307.2 billion in year of 2004 with a market forecast value of $367.1 billion in
2009. Further more in 2004 the soft drink volume of the market was 325, 367.2 million litres
(See table 2) in appendix section. Clearly defined the profit is being increasing in the soft
drink industry however there are several obstacles to overcome in order to detain the market
share Deichert (2006).
24

25. Datamonitor (2005) indicated that the consumption of the growth in the soft drink market
globally will be expected to decrease because of the reflecting flow in the market price. The
changes of soft drink industry are growing to other non alcoholic industry such as tea and
coffee (11.8%) and bottled water (9.3%). Competitors begun to adopt new product categories
such as sports drinks and energy drink for the increase of growth in the soft drink industry.
Profitablity in the soft drink industry remain concrete however the market saturation in the
US market is shows decreasing from the reports of analysts.
2.5. Present issues with the carbonated soft drink market
With a new product failure and discontinuation of rates of market increased to 80% across the
food and beverage industry and it is necessary to study the demand of the product in the
consumer soft drink industry while formulating innovative strategies to foster success in the
future. It has been reported that approximately 1235 total new beverages had been introduced
in 2002, whereas approximately 250 survived by late 2003 which can say that 80 percent of
the failure in this sector Beverage world, (2003).
Anderson (2008) stated that the industry-wise the carbonated soft drink market has been
fighting competitively and it has been reached to the maturity point. Hence the industry
giants have begun to rely on new products and the non carbonated beverages for the sales
growth. The past 20 years this trend has been observed. The consumers changing perceptions
in tastes and demographics and concerns about the health and dieting are some of the reasons.
Increased competition from some of the other beverage industry causing the non development
in the CSD market. Other changes include the changing life style of the consumers, their
attitudes towards the product, globalization, changing societal concerns and evolving buyer
25

26. preferences. With key changes in the perception of consumer demand, there are many
indicators shows consumers desire of more bold and exciting flavours. Mintel‘s May 2008
market report says that the flavour of cherry was to be claimed the top new flavour in the
carbonated soft drink market in 2006. They reported that Coca-Cola‘s Black Cherry, Vanilla
Coke, includes its diet version increased their sales of $81 million in the inaugural of the
product in 2006. In Mintel‘s examination period (2001-06) for their April 2007 reported that
these trends shows the new product introduced into the market having highest sales but later
declines thereafter. The sales increases shows the consumers‘ willingness to try the new
product but thereafter declines shows the product‘s lack of continuity in the consumers taste
and preferences.
The consumption of soft drink increased significantly over the recent years with a fivefold
increase in United Kingdom between in 1974 and 1999 and the similar trends of the
consumption of soft drink in U.S. indicated that the massive consumption of carbonated soft
drinks result increasingly rates of overweight and obesity, although there is a link between
the soft drinks and weight status in the adults and the children Claire et al. (2008). Different
opinions are reported about the problems related with the carbonated beverage product, some
suggesting that carbonated beverages are showing negative influence and other describing its
benefit when consumed in variety of conditions Malik et al. (2006). However the scientific
research evidence providing that for further investigation that what happens to the carbonated
drinks while consumed and how does it affect the digestion.
In examining with the carbonated beverages it is to consider the important factors such as
carbon dioxide with which these beverages are charged, sugar or sweetener contained and the
effect of other substances used by the industries for their preparation. Cuomo et al. (2009).
26

27. Beacause of the issue with the overweight and perceived require to slim diet drink were
developed. These drinks are marketed as sugar free drink e.g. (Coca Cola), however in these
drinks they are using artificial sweeteners so as to reduce the content of the calorie. But these
drinks have a erosive potential that may increase the enamel demineralisation. However there
are lot of other problems with the health concerns while using artificial sweeteners in the
carbonated diet drinks Tahmassebi et al. (2006). According to Centre for Disease Control and
Prevention (2000), being overweight and obesity increases the risk of diabetes, heart disease,
stroke, cancer and other diseases causing a number of social and psychological problems in
millions of Americans. They also found that the obesity has been increasing among the adults
between 1976-74 and 1999-2002 has been doubled rising from 15 to 31 percent and the
overall rate of obesity and the overweight in 1976-74 was 47 percent increased to 65 percent
in 1999-2002.
The national Institute of Health recommends that the people who are trying to reduce their
weight should drink water instead of sugar contained soft drinks. Consumption of soft drinks
may contribute to obesity not only for children‘s but also for young adults indicated by a
Harvard School of Public Health study of tens of thousands of nurses within in an eight year
period of time. The consumption of soft drinks by women from less than once a week to one
or more per day gained an average weight of 18 pound. The study also found that the women
who drinking soft drinks daily had almost twice the risk of diabetes as compared to women
who drank less or no soda carbonated drinks Schulze et al (2004).
Researchers found that consuming soft drinks may affect the dietary intake quality among
youth by displacing milk consumption Harnack et al, (1999). Soft drink consumption at
higher level may have other adverse effects on dietary intake. For example comparing with
27

28. the non consumers of soft drinks, youth consumers were using the soft drinks at higher rate
were less likely to consume 4 oz of fruit juices per day and had lower intakes of Vitamin A,
Vitamin C, riboflavin and lower Calcium phosphorous ratios Harnack et al. (1999). Previous
researchers Lin et al., (1994), pointed out that several reasons for the increase of soft drink
consumption among youth have been continuing with higher rate due to the increased use of
the targeted Youth advertising and the marketing techniques by the soft drink companies,
larger single serving package sizes, lower price of soft drinks increased the national trends
towards the eating at fast food and the restaurants that serves the soft drinks as the most
important beverage, and the easy availability of getting soft drinks in the school settings,
vending machines and school cafeteria are some of the marketing tactics using among the
companies to consume the soft drinks at higher rate among youth consumers.
2.6. Importance of Youth market
The young adult market aged between (18-24) is a vital and powerful segment of consumers
to be considered as a separate section Ness et al., (2002). The young adults make up 3.6 per
cent of the population having a spending power of approximately £10 billion per annum
within UK itself Jenkinson (2000). Zollo (1999) predicts that the young adult market in the
US spend a lot of money to buy the products approximately US $100 billion a year and
analyst predict that this segment will spend more by 2010 in comparison with the baby
boomers according to the managers Merrill (1999). Young adults are increasingly the
essential target market for the managers because of their: increasing influence in their family
spending; capability to spend in the future and ability to follow the new trends in the market
Zollo (1999). Young adults are found to be more concerned with the new trends compared to
any other segments in the market and influential in the mass consumer movements of other
28

29. segments Zollo (1999). Consumers including young adults are often influenced by a lot
external factors which include self image, lifestyle and consumption pattern. Establishing the
specific factors that influencing the young adults and their purchasing behaviour pattern have
become a serious issues for the behavioural researchers (Martin and Bush, 2000). Previous
studies have investigated how young adults learn what to consume and what influences them
(Keillor et al., 1996; Moschis and Churchill, 1978).
The studies which has been showed according to the social learning theory says that the
consumers‘ behaviour is affected by lot of sources such as their family values (Baltas, 1997
and Feltham, 1998), financial restraints (Ness et al., 2002; Rowley, 2005; East et al., 1995),
peer group influences (Feltham, 1998; Auty, 2001), self perception (Ness et al., 2002; Auty,
2001), and other social influences (Feltham, 1998; Ness et al., 2002). Solomon (1994),
highlighted that the teenagers will realize the influence of brand loyalty while purchasing
different kinds of products in their age and influenced to buy the product during that age
period. Hence the youth or teen may rely on the particular product in that particular age and
keep purchasing their favourite brand on that age onwards (Hollander and German, 1992).
There are several other important factors to be considered which has been identified by the
researchers such as age, gender, lifestyle, access and purchase frequencies (Jacoby and
Chesnut, 1978 and Veloutosou et al., 2004). Many of these young adults being students
several researches have also found the accommodation type (Feltham, 1998 and Ness et al.,
2002) and the year of study Hein (2003). Whereas ample research has been carried out
reflecting upon the relative factors and their influences, according to Ganesh et al. (2000)
current knowledge is not enough offering the insights to the managers for measuring the
customer group and their decision makings. One of the reasons why managers may not target
29

30. this particular consumer group segment is because they are thought to be less loyalty towards
the brand. The other reasons include the young adults have less experience and attachment
with the brands Howell (2004). Previous research (Pollay et al., 1996; Spero and Stone, 2004;
Roehm and Roehm, 2004) assumes that the young adult customers are not much loyal to the
brand however; these findings are relatively uncertain and creating more argument.
According to Wood (2004) suggests that the finding related to the loyalty or the switching
behaviour within the young adults market should be concentrate with very prudence because
of this segment is very dynamic in its nature and hypothesis would miss the prosperity of
their difficulty in the process of decision making. Furthermore, Ness et al. (2002) observes
that young adults have the common problem of allocating of financial resources and because
of this particular problem the young consumers may have more reasons to have switching
behaviour between products with the aim of saving money. On the other hand Jenkinson
(2000) pointed out that, young adults provide managers with a rare opportunity. During their
previous life cycle young adult‘s development of behavioural response are observed through
their lives. For example this trend is well researched in the tobacco industry whereas it is
observed by many researchers that the young adults will be tend to be loyal to their particular
brand more than a decade once addicted (Pierce and Gilpin, 1995 and Gilpin et al., 1997).
Generation Y consumers aged between (14-31) years old and mostly in this age they are
ready to enter into the college about 34% of the Generation Y consumers will be aged
between 18-23; and another 36% will be 24-30 years old Paul (2001). Janoff (1999) pointed
out that as a college students specified in these ages, they are getting the freedom to enter into
the market to consume the product by their own interests and of course will have a specific
needs and objectives. According to Wolburg and Pokrywczynski (2001) the college market is
one of the most massive segment in the consumer market due to its market size, attitude and
30

31. behaviour to the stylish products, due to the influence of brand loyalty acquired in these
influential years, their position as early adopters and the profitability of their life style or
living standard associated with their college degree. College aged generation Y consumers
having the purchasing capacity of $200 billion annually Gardyn, (2002).
2.7. Pepsi’s Youth market
Pepsi returned to its youth oriented market when they had introduced "Be Young, Have Fun,
Drink Pepsi" campain in Januray, 1993. Pepsi was expecting to gain the market share of at
the expenses of their rival company Coca Cola Company. The attitude of the Pepsi
commercials clearly stated of desire to reach the younger audience Patricia (1993). However
the campaign Be Young, Have Fun, Drink Pepsi" have well received by the Pepsi consumers
but it doesn‘t enable the Pepsi to gain the market share from Coca Cola which was
concurrently running on his high profile campaign, always Coca Cola the campaign of Pepsi
is run its course, Pepsi inaugurated a new campaign "Nothing Else Is a Pepsi," during the
1995 Super Bowl Patricia (1993). BBDO(Pepsi‘s advertising agency) was trying deliberately
to attract the youth targeted customers. Targeting of youth consumers were reflected in the
sales of Pepsi Youth consumers. Furthermore the advertisements introduced by Pepsi were
amusing and entertaining to the targeted audience. At the same time Pepsi was competing to
beat the Coke‘s market power, even though the entire soft drink industry was facing
competition from the new source of entrants (Thomas, 1997).
31

32. Chapter Three
Research Methodology
3.1. Introduction
This chapter will discuss the techniques used to carry out this piece of research. In this
chapter it is also explaining the process by which the data was collected and the various
sources used for the same. The data analysis techniques and the sampling are also will be
discussed herein. This chapter will critically evaluate why certain methods used for this piece
of research and others disqualified. The latter part of this chapter will be discussing the about
the time constraints included to conduct this research and constraints concerned in carry out
the same. This chapter also discusses about how respondents were selected and what other
sources were used to collect the secondary data materials. The methodology has been
structured to accomplish the objectives of the research questions which meant to attain, which
are:
A. Critically evaluate the literature surrounding regarding the, influence of the customer
loyalty among the youth students or youth consumers, evaluating the importance of
building customer loyalty for the long term business performance of the company.
Loyalty towards a product or brand among the youth consumers will be compared
with the similar products of two different companies‘ i.e, Coca Cola and Pepsi and
discussing the current issues regarding the carbonated soft drink market which affects
the performance or sales of the company.
B. Conduct primary research by way of questionnaire given to the youth students who
were the target audience, to understand the buying behaviour and the attitude of the
youth student consumers who were using the carbonated soft drinks, thus analysing
32

33. the respondent information from their understanding regarding the loyalty towards a
product from the minds of the consumers.
C. Findings from the questionnaire result will be analysed and compared with the
literature review to obtain the overall findings of this piece of research.
D. Finally conclusion of the research analysis will be illustrated and understanding or
any recommendations regarding the Customer loyalty among the youth consumers
will be explained.
This chapter will also discuss in detail about why mixed methods were used in this piece of
research work and discussing why the use of triangulation method is unavoidable in the
framework of this research. An effort has been made to analyse critically the relationship
between theory and research. This chapter also aims to understand the validation behind the
selection of paradigms and the research methods.
3.2. The Research Philosophy and Need for Paradigm.
The perception of the paradigm is essential to the research process for an extensive study in
all areas. A paradigm is, ― a very general concept of the nature of scientific endeavour within
which a given enquiry is undertaken‖, Mangan et al. (2004, p. 566). In the early 1960‘s the
conception of the paradigm was brought by Thomas Kuhn and this paradigm can be
characterize the ―people‘s value judgments', standards, norms, perspectives, frames of
reference, ideologies, myths, theories, and agreed measures that can govern their thinking and
action‖, Gummesson (2000, p. 18). However it is very important part in research method to
select the appropriate paradigm, it is also important in the process of selection of right
paradigm which supports the research questions being researched and basis on the available
33

34. resources Amaratunga et al. (2002). Deductive theory settings and inductive theory building
are the two main approaches towards for the development of a theory, differentiate in their
hypothesis goals. In selection of the paradigms, the deductive approach supports the
interpretive science, while the inductive approach favours the positive paradigm Perry(1998).
Positivism works with the formation of theory for data verification which will not likely to
help on quantitative methods further to generate an assumption, however interpretive science
approach which generates an assumption of showing some individual experiences favours
more of a qualitative method Amaratunga et al. ( 2002). Hence this approach showing more
naturalist in nature, it is understandable to know the different experiences among the people
Amaratunga et al. (2002) and Arora and Stoner ( 2009). Abstract of the above would be
indicating the inductive theory approach which helps positive paradigm likely to use
quantitative methods for illustrating the information obtained, whereas the deductive theory
which supports interpretive science helps more towards the naturalist approach and effort by
using qualitative technique of research.
For the purpose of this research study, researcher will be obtain data both from respondents
for the purpose of obtaining qualitative piece of this study and extensive study for the
purpose of quantitative part of this research. In additional interpretive science can be again
classify into critical theory, constructivism and realism. Critical theory and constructivism are
subjective in nature is diverse from the realism which is subjective and objective in nature
and hence the paradigm that bear positivism and interpretivism Perry (1998) and Amaratunga
et al. (2002). In order to study this cases given the complexity of paradigms, it is essentially
to use the triangulation method in order to obtain the necessary information and has to sort
out that information which is irrelevant to the study Perry(1998). For the purpose of
achieving aims of this research study the researcher should start this piece of work only after
34

35. the careful observation of epistemological and ontological values. Epistemology which
related with positivism and interpretivism is different to ontology which is related with the
objectivism and constructivism. Epistemological study will helps to give the perception of
understanding or give insight of knowledge can be accepted as suitable information, while
ontology helps to obtain knowledge on the social entities Bryman and Bell (2007). These
gives climb to the inductive and deductive approach theories.
3.2.1 Inductive and Deductive theory
Inductive and deductive method of study is useful for obtaining the logical interpretation for
the purpose of study the world around with different application of priniciples which helps to
get an perceptive issue related to the subject area with use of Inductive and Deductive theory
Winclaw (2009) and both study can be understood and applied suitably, only if gained
through different experiences Bryman and Bell (2007). Inductive reasoning which means one
reasons from particular examination from the generally accepted principles whereas
deductive reasoning is which observes from the general principles to the specific
observations. Even though both theories are related to each other and they are not superior to
each other and the use of both theories is helpful for the researcher to exchange the genuine
examination into impirically testable hypotheses, Wienclaw (2009). Deductive theory of
reasoning is used mainly for testing the existing principles with the help of organized
approaches in search of the proof differentiated from the inductive theory where forecasting
are not used to find out the conclusion but personal experiences of world are taken into
consideration. Though both approaches need to be evaluate significantly before their
application in empirical research study Bryman and Bell (2007). Perry (1998) pointed out that
the empirical research study should be based on the deductive and inductive theory approach
35

36. only, however the mixture of both will help the researcher to get an advantage from existing
theories as well not be able to generate new theories. Therefore it is significant to use of both
theories.
3.3. Principle behind use of Triangulation
Hussey and Hussey (1997) cited in Mangan et al. (2004, pg 569) states that, ―the use of
different research approaches, methods and techniques in the same study is known as
triangulation and such triangulation can overcome the potential bias and sterility of single
method approaches.‖. According to Easterby et al. (1991) and Tashakkori and Teddlie (1998)
recognized triangulation method in four different ways i.e, data, investigator, methodological
triangulation and finally triangulation theories. Naslund (2002) who supported the specified
theories mentioned above which needs to use the multiple theories who says that both
theories is needed for the focus of the advanced research and can develop from those theories.
The use of triangulation method will helps the researcher in capitalizing the effectiveness for
the research method and helps to sort the ineffectiveness of any given method, Tashakkori
and Teddlie, 1998 and Byrman and Bell, 2007). Triangulation method which assist the
researcher for making convenient conclusions which helps to get a better thoughtful by using
multiple methods in any situations (Johnson and Onwuegbuzie, 2004).
Qualitative and quantitative method with the triangulation method is using by the researcher
for this research method. To achieve the effective triangulation method the researcher would
be using both of the methods in order to gain the objectives of the research and both of this
method will enhance to filter related to the findings of the research. As per this theory
qualitative method would helps produce the theories and exploration by way of inductive
36

37. method and quantitative method will helps to explore the theory experiment and can obtain
explanations to explorations cited, Johnson and Onwuegbuzie (2004).
3.4. Data Collection Methods
The researcher is using qualitative and quantitative method of data collection to get a entire
understanding to achieve the acknowledged objectives for this piece of research. Primary data
will helps the researcher to understand the objective of the research on a wide range of
perspective with the use questionnaire given to the students and helps to analyse the findings
of the research on a narrow point of view. Secondary data also using for this research study
get a vast knowledge in this field of study.
The data collection method of this piece of research will be questionnaire. Questionnaire is
particularly used for survey that the person answering the questions actually recorded as the
respondent information (Kervin, 1999). This research is aims to investigate about the
behaviour attitude of youth student consumers towards the carbonated soft drinks of Coca
Cola and Pepsi, hence questionnaire can collect information in a systematic way. The
selection of respondents will be the current students studying at the University of Central
Lancashire. The Questionnaire were distributed to 80 to 100 youth students in the University
main campus. The age of the students will exactly fit with this research question which is
youth student consumers. After collecting all feedback from the respondents, the collected
questionnaire will be analysed and interpreted to get the final result with the support of
secondary data. (A copy of the questionnaire can be found in appendix I, p.87).
37

38. 3.4.1. Primary Sources of Data
Jankowicz (2000), Bryman and Bell (2007), states that, primary data is the collection of first
information or from the collection first hand information which enhance the researcher to
identify the key element or from direct sources. Primary data research plays an important role
for attain the collection of information for this research. For this piece of research work the
researcher has to use also using the company‘s internal reports, annual reports and also
conducting a questionnaire which is given to the University students in the main campus.
a. Company Internal Reports
Company internal reports have been using for the vital importance of understanding the
choosen area for the study of this research and reports related to the company has been using
and further reports related to the company will be included for the purpose of analysis of this
research.
b. Sampling Technique
The sampling technique using here for this research study is Purposive sampling, As
indicated by Jankowicz (2000) purposive sampling techniques is mainly using to know the
view which are important with the particular problem of study to address the issue in the
specified area. This will helps to study consumption of carbonated soft drink among the
youth consumers. To a broad view the researcher is using this method for explaining the
presumption out of the primary data. However in the case of secondary data the researcher is
used the ―Quota sampling method‖ in depth for an understanding of various problem that
38

39. have been pointed out in various sources from the literature reviews conducted by the
previous researchers. The resources using for secondary data mainly journals and texts. The
reason for choosing this sampling method is to identify the overall understanding of views of
different people and to get an overall understanding related to the issues related with the
carbonated soft drink market among the youth consumers. The population that makes up the
purposive sampling is the Youth students of University of Central Lancashire which suits
with this research to get an understanding of issues related to the subject area.
3.5. Pilot Study and Pre testing questionnaire
As suggested by Bryman and Bell (2007) it is always helpful to conduct a pilot study or
pretesting the questions before administering a self completion questionnaire. In fact
conducting of pilot study questionnaire cannot say that it ensures the questions operate well
however it will helps reduce the risk conducting a self completion questionnaire. However
the main study is going to employ closed questions however open ended questions can be
used to generate fixed choice of answers. It is essential for conducting a pilot study because if
everyone who answers the questions reply in the same way doesn‘t meet the objectives of the
research and resulting data will not helps to meet the objectives of the research which is an
unfair. Hence pilot study will helps the researcher to identify the sufficiency of the
respondents. However the problems arise while conducting the pilot study questionnaire will
helps to improve or to make better while designing a self completion questionnaire. Pilot
study questionnaire will be given to 12 respondents in the same age group. Hence this study
will helps to prepare self administered questionnaire.
39

40. 3.5.1 Closed-ended and open ended Questionnaires
A questionnaire is a, ―reformulated written set of questions to which respondents record their
answers, usually within rather closely defined alternatives‖, Sekaran (2003, p. 236). Mean
while Dawson (2006) pointed out that quantitative data can be collected from the
questionnaire which was one of the important tools to confine the quantitative data and also
helps to design it properly according to meet the objectives of the research. However
questionnaire is having a benefit that it will helps the researcher to knowing exactly what is
required to concentrate for measuring the variables. Personally administered questionnaire
was again divided into open ended and closed ended questionnaires. While open ended
questions allows the respondents to answer the question according to their views, Sekaran
(2003). Closed questionnaire will helps the researcher to code the data quickly and easily
subsequent for analysis.
For the purpose of this research study the researcher is using mainly closed ended questions,
however some open ended questions also added to collect a broad view of information among
the respondents. As the researcher wants to find out the different views of respondents while
using the carbonated soft drinks. Hence these issues related to the topic will helps to collect
more data while using some open ended questions. (A copy of the questionnaire can found in
appendix I, p.87).
3.6. Secondary Sources of Data
This research also using the secondary sources of data. Secondary data will helps to get an
understanding about what previous researchers found related to the specified area of research.
40

41. This research is an academic piece of work which needs the help of secondary data to
introduce the key factors regarding the research area. The following material have been using
for this section of research:
a) Academic and Professional Journals – these include the collection of journals related
to the chosen research topic and related to the industry, journals etc.
b) Academic Text Books – these have been collected from the University library, public
libraries and others sources.
c) Websites – these include collecting information from the company websites related to
the specified choosen area and other associated websites.
3.7. Data Analysis
The combination of primary and secondary data are using for this research study. While
primary data would include both qualitative and quantitative namely, questionnaire results,
and company‘s internal reports etc. Secondary sources of data would include books,
academic journals and appropriate website articles. As a process of data is being analysed
with different methods the researcher, has the responsibility to make an analysis strategy in
order to achieve at it best analysis of data. According to (Kleining, 1991) quantitative method
can be successful when it is backed by the qualitative data which helps in analysing and
interpretation of the research study a lot in a comprehensive manner.
3.7.1 Analysis Strategy
Analysis of collected data and explanations related to this having a major role in any of the
practical research. Hence it is essential to build up a clear strategy to be developed and
41

42. analysed in the starting stage itself. As part of any kind of research, the researcher should be
concluding with plenty of raw information which has to be analysed properly for the proper
understanding of the study. The researcher will get a proper insight and better understanding
regarding the research study only when the appropriate method of analysis strategy is used
and analysed effectively, Amaratunga et al (2002).
This research would apply the interactive model proposed by Miles and Huberman (1994).
This would include the data reduction basically by the process of selection, focusing,
simplification and abstraction of data. This would helps for the preparation of charts,
diagrams, graphs and tables etc. Data reduction method will helps for illustrating the
assumption and relevant analysis. The use of data reduction method will helps to investigate
by giving relevant and quantitative data can be analyzed by way of display primarily, Curwin
and Slater (2008). The above mentioned process will be again could get an advantage with
use of the make things easier for getting quantitative data before the final display as it helps
in simplifying the final data collected, Amaratunga et. al (2002).
Therefore the researcher is going to use the data reduction method followed by display for the
purpose of the study. The primary data which consists of the questionnaire findings would be
first go through for the purpose collecting the data using data reduction method followed by
graphs, tables and other appropriate ways. Amaratunga et. al (2002) also suggested that
before collecting the major findings of the research it is to consider the patterns and models
used in agreements and disagreement to get an outline findings of the research study. For the
purpose of this study the researcher would be collecting findings related to the impact
building customer loyalty and will be linked with the existing literature review collected from
the previous researchers. As Bryman and Bell (2007) suggests that the beginning point of any
42

43. qualitative research for most business is next to the coding system. This process involving the
classification of the data that collected used for analysis.
3.8. Period Covered by Research
This research was conducted between February to April, 2010. All the data will be collected,
analysed and the findings will be summarised within this period of time limit.
3.9. Ethical Considerations
As suggested by Bryman and Bell (2007), it is very important to make sure that the
confidentiality of all collected data from the questionnaire. According to this research careful
consideration will be given for maintain the confidentiality of records and anonymity of
accounts because from the survey questionnaire lot of private information of individuals are
taken and recorded for the investigation of this research question. According to Academy of
Management issues relating to confidentiality and anonymity should be negotiated and
agreed with potential research participants. Hence during the part of this research, all data
collected only by way of questionnaire will be used only for the purpose of the study and not
been handed over to any third parties. Once this dissertation has been marked the
questionnaires will be destroyed.
43

44. Chapter Four
Questionnaire Result
4.1. Introduction
This chapter focused on the in depth analysis of the data collected from the respondents. The
purpose of this chapter is to present the questionnaire results findings and analysis of the data
which gathered from the respondents.
4.2. Results
The closed ended and open ended questionnaire shown in (Appendix section I. Pg, 87, Table
No: 1) indicating the response rate of the youth students and their purchase influence and
behavior towards the Coca Cola and Pepsi. The questionnaire result also indicating their
behavior or attitude towards other products as shown in charts and graphs as under.
The response rate of students gathered from the questionnaire. Questionnaires were
distributed within in the University of Central Lancashire main campus. First of all the
questionnaire were distributed to 85 students in the campus of the University of Central
Lancashire in the early of April, 2010. Totally 85 questionnaire result were collected and 80
respondents information were validated and suits with the research. The age of the students in
the campus exactly fit with the research question which is Youth consumers. In total of 80
respondents, 60 per cent of them are male while 40 per cent of them are female. Secondly 97
per cent of the respondents were aged between 18-24 and the rest of the 3 per cent occupied
the age above 24. From the questionnaire result it is indicated that the respondent information
were collected from different nationalities. In which 50 per cent of respondents from Europe,
44

45. 30 per cent from Asia, 15 per cent from Africa and rest of the 5 per cent from America and
Australia.
4.2.1 Market Division
Popularity of Cola Brand
7%
12%
48% Coke
Pepsi
33% Both of them
Others
Figure 1.1
It is clearly indicated in Figure 1.1, among the popularity of Cola brand among the youth
consumers. From the above diagram it can be clearly point out that the Coca Cola is the most
favourite brand among the Youth consumers from different nationalities which represents 48
percent of the market Volume. However Pepsi represents with 33 percent of the market
volume which indicating the increase of Youth Consumers towards Pepsi products or
attracted to the brand. Even though 12 percent of the respondents indicated their attraction
towards both of the products (Coke and Pepsi). Furthermore 7 Percent of youth students
indicated that they are attracted towards other products rather than Coke or Pepsi.
45

46. 4.2.2 Preference Choice of brand
Describe the choice
100%
90%
80%
70%
60%
50%
40% Pepsi
30% Coke
20%
10%
0%
Figure 1.2
As can be seen from Figure 1.2, indicating that almost 80 percent of the Pepsi Youth
consumers or supporters pointed out that Pepsi represents young while only 20 percent of
Coca Cola consumers considered that it is young. However over 90 percent of Coca Cola
youth consumers agreed that Coke is classical and 85 percent of Pepsi consumers also agreed
that it is a classical brand or product. It is significant to be mention that 88 percent of Coke
consumers also pointed out that this brand is a traditional one which is a competitive
advantage for Coca Cola Company and only 35 percent of the Pepsi consumers agreed that it
is traditional for their preference of their Choice of this particular brand. From the
questionnaire result it is clearly indicating that Pepsi youth consumers considering that this
46

47. product is cool and fashion, with 80 percent and 65 percent respectively. However Coke
consumers believed their brand is cool and fashion representing only a 15 percent and 25
percent respectively. Finally from the questionnaire results it is to be stated that 60 percent of
Coke Youth consumers trusts that brand Coca Cola is the icon of happiness while only 20 per
cent of Pepsi consumers indicated their character of their cola brand.
4.2.3 Buying Behaviour
Spending on cola per week
8%
Below £5
£5 - £10
32%
Above
60% £10
Figure 1.3
As can be seen from Figure 1.3, shows the spending capacity of youth students towards cola
products tabulated from the respondents. From the result it is clearly indicating that 60
percent of the respondents having a spending capacity under 5 pound on cola per week.
While 32 percent of the people are spending usually between 5 pound to 10 pound per week.
However 8 percent of the response rate shows that they spend above 10 pound per week for
47

48. cola products. Hence it can be assess that the buying behaviour of the Youth consumers is
higher according to the percentages shown in the above figure and the spending capacity of
the low involved product of carbonated drinks are increasing among the youth consumers.
Effectiveness of Advertisement
3% 2%
27%
Very much
A lot
68% Not at all
Little
Figure 1.4
It is clearly indicated from the above Figure 1.4, that the influence of advertisement towards
the consumers. As can be seen from the above figure, 68 percent of the respondents believed
that the brand or product is very much influenced them to buy the product. Mean while. 27
percent of the respondents indicated that the advertisement are motivating them a lot to make
a purchase decision of a product. However 3 percent of the respondents believed that the
advertising campaigns are not at all influenced them to buy the product and rest of the 2
percent of the respondents pointed out that the advertisement giving only little influence to
buy a particular brand or a brand categories. From the overall survey results it is clearly
indicating that the brand or product is an icon for the company (Coke and Pepsi) are the base
48

49. for using the advertisements into more effective that motivates the consumers especially
Youth, which is influenced to buy the particular product.
Channel of Accessing the Advertisement
45%
45%
40%
33%
35%
30%
25%
20%
15%
10%
10%
4% 5%
3%
5%
0%
Tv Internet Radio Magazine Poster Promotion
Figure 1.5
The accessibility of the advertising channels are presented in Figure 1.5, which states that
Television, Internet, Radio, Magazine, Poster and Promotions are the major advertisement
sources that the respondents can easily accessible of the marketing campaigns of companies.
More specifically 45 percent of the respondents from the questionnaire clearly pointed out
that television were the first channel which is giving priority to access the marketing
campaigns among the products of Coke and Pepsi. More significantly internet advertisements
are more effective over the past years. It is indicated that the 33 percent among the
respondents accessing their second channel of preference to internet. In the mean time
traditional advertising channels such as radio, magazine, poster and promotion also plays a
49

50. considerable role to attract the consumers to buy a specific product. While radio which is
contributing 10 percent of attraction among the result tabulated from the respondents and
magazine, poster and promotion which representing 3 percent, 4 percent and 5 percent
consecutively. Hence from the above figure it is clearly indicating that the all the
advertisement channels plays an immense performance to attract the consumers especially
youth which motivates them to buy the product. Finally advertisements channels plays a
significant role in order to attain the long term performance of the business and thus to
enhance and maintaining the customer loyalty.
4.2.4 Loyalty on the Brand
Refer to Appendix Section, Table No.1 pg.no.87 for this question
Encounter of Cola price increased
100% 7%
15%
90%
20%
80%
30%
70%
60%
Buy it when price decreases
50%
40% 73% Buy cheaper one
30% 55% Still buy it
20%
10%
0%
Encounter one
20 % higher Encounter Two
40% higher
Figure 1.6
50

51. The questionnaire result for the above Figure 1.6, clearly shows the pattern of buying
behaviour among the respondents while their favourite cola price increases. From the above
figure it is clearly indicating their responses encountered when the cola price increases. The
first encounter is their favourite cola price is higher i.e., 20 percent recently compared to
others (One is 1 pound and the other one is 1.20 pounds). The second encounter is their
favourite cola price is higher than others 40 percent (One is 1 pound and another one is 1.40
pound). In the first encounter, 73 percent of the respondents believed that they would still buy
their favourite cola brand which indicates their attitude towards the brand or their habitual
behaviour. However 20 percent of the respondents i.e., the youth students indicated that they
would buy only the cheaper one which shows the decrease of 20 percent sales among the
youth consumers because of the importance of price differentiation among the products. The
other 7 percent of the respondents explained that they would buy only their favourite brand or
product when price decreases. In distinction, the second encounter shows clearly a different
attitude or behaviour among the respondents. From the second encounter in the price
differentiation i.e., 40 percent higher than other product it shows that respondents buying
behaviour to their favourite cola brand which represents only 55 percent while 30 percent of
the respondents indicated that they will buy only the cheaper product and 15 percent of the
target audience pointed out that they would buy only their favourite brand only when the
price decreases.
Hence this similar questionnaire result indicated in Figure 1.6, twisted to understand the
changing minds, behavioural pattern, retention of product, customer loyalty among the youth
consumers while the price increasing. It can be say that once customer is loyal towards the
product they will use to buy the same brand or product which is the main advantage getting
towards the company. That is why the 73 percent and 55 percent among the respondents
51

52. indicated that they would buy the same product. However (Hart et al., 1999) indicated that
the measurement of a perfect customer loyalty is uncertain or difficult. That is why the
respondents answered that 20 percent and 30 percent of consumers will buy the cheaper one
which shows the switching behaviour of their choice. Even though 22 percent of the
respondents from both of the questions stated that they will buy only the product when the
price reduced which shows the important encounter with the price and affecting to the
customer loyalty of a product. However it can say that the customer loyalty is always
uncertain due to the changing behavioural pattern or attitude among the consumers especially
youth.
Reaction when favourite cola
sold out
10% Buy other one
30%
Go to another place to
20%
find out
Buy another brand of
same flavour
Buy nothing
40%
Figure 1.7
The third encounter which is addressed was the reaction when favourite brand of cola had
been sold out which can be found in Figure 1.7. There are 40 percent among the respondents
answered that they would go to another place to find out the same brand of cola. However 30
52

53. percent of the response rate was they would buy the other brand of their cola instead of the
same one. However 20 percent of the respondents indicated that they will possibly buy the
brand of the same flavour and 10 percent among the respondents pointed out that they would
buy nothing if the particular choice of brand or product if not available.
Hence it can be say that brand image plays an important role among the consumers in order
to maintain long term business performance of the company and thus enhance customer
loyalty towards the product. It is clearly indicating that the majority of the customers who
trust in their own favourite product are based upon the existing attitude towards the brand at
the time of purchase. However consumers may be sometimes confused at the time of
purchase because they are having lack of understanding about the differentiation of products.
This is because of the competitive products are available in the markets. However it can be
say that the repeat purchase behaviour among the consumers are even affect the situational
influences and marketing efforts to cause switching behaviour (Oliver, 1999, p. 34).
Frequency of changing cola
brand
30% 27%
Frequently
Rarely
43% Never
Figure 1.8
53

54. As can be found in Figure 1.8, specified the frequency of changing cola brand among the
respondents. From the result from the respondents, it is significantly shows that the frequency
of changing the brand or product among the specified age group of consumers is relatively
very low. The questionnaire result shows that 30 percent among the consumers never
changed their favourite brand. However 27 percent and 43 percent of the respondents pointed
out that they used to change the product or brand frequently and rarely occasions. From
above figure it can be say that the frequency of changing the cola brand or product among the
consumers is uncertain. Hence Heskett et al. (1993) pointed out that repeat purchase
behaviour and retention among the consumers is not leading to attain the customer loyalty or
devotion, because of the uncertainty is still exists among the behaviour and attitude among
the consumers.
Reasons of changing cola brand
No of Respondents
20
21
7
6
Qualities 2
Higher price
Marketing
mistaken Fashion icon
Others
Figure 1.9
54

55. The reasons of changing the cola brand and the distinction with explanation of potential
changing situations are presented in Figure 1.9. From the previous questionnaire Figure (1.8),
indicated that 70 percent of the respondents used to change their favourite product. Hence 35
percent of the respondents stated that quality dissatisfaction was the main reason for changing
their favourite product. Mean while 38 percent of the respondents complained that they are
changing their favourite brand because of the fashion icon spokesman transferred or motivate
them to buy another brand from a different company. Further reason of changing cola brand
is due to the other specific factors such as higher price, marketing mistaken representing 35
percent and 10 percent respectively. However 6 percent of the respondents believe that the
changes occur due to other reasons.
Therefore (Aaker, 1992) indicated that the changes made with the brand may affect the
loyalty among the consumers. Considering the brand loyalty among the consumers the
habitual behaviour of the consumers will definitely affect when brand make any changes in
the price, product features, its communication and distribution programmes etc. Hence from
this result it can say that cola is a low involvement product so that the purchasing decision of
the consumers may likely influenced by the factors such as brand, packaging, taste, price and
advertisements etc (Sengupta and Fitzsimons, 2000). However (Payne, 2000) pointed out that
the responsibility of the company is not only to increase the customer loyalty but they should
also try to identify the problems encountered with the consumers and solve the problems also.
4.2.5 Preference choice to other products
From the questionnaire result it clearly stated that 7 percent of the respondents like other
products apart from Coca Cola and Pepsi. From the given choices in the question respondents
55