The Study of Customer Switching Behaviour Toward

Carbonated Soft-drink Market:

“With Special Reference to Manmunai North
Divisional Secretariat Area”

BY
WILLIAMS ABARAJITHAN J.K

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

Department of Management
Faculty of Commerce and Management
Eastern University, Sri Lanka
 Contents

Introduction
Problem Identification
Objectives of the study
Significance of the study
Methodology
Literature Review
Analysis & Conclusion
Recommendation
Further Research Implication

Page  2
 Introduction

 The basic function of marketing is to attract and retain customers at a profit.

(Drucker,1999)
 Loyal customers build businesses by buying more, paying premium prices,
and providing new referrals through positive word of mouth over time
(Ganesh, 2000).
 A critical issue for the continued success of a firm is its capability to retain its
current customers and make them loyal to its brands (Dekimpe, 1997)
 Customer switching behaviour is consequently a serious threat to the
achievement of long-term relationships and profitability. (Ganesh, 2000)
 The concept of customer switching behaviour as, this is the negative out
come of the buyer decision-making process and the then implementation of
the decision in regard with a specific product or service selection. (Aitzaz
Saeed and Rehan Arshad, 2007)

Page  3
 The customer switching behaviour damages market share and profitability of
specific firm yet has remained virtually un-explored in the marketing literature.
(Susan M. Keaveney, 1995)
 High level of competition, the high cost of acquisition in terms of new product
innovation, promotion, distribution and the low rate of churn (switching cost)

Page  4
 Problem Identification

 Competitive landscape has become highly dynamic with relatively newer

producers wresting customers from old brands and multinationals in recent
mobile environment (Agbor, 2004).
 Goods are mostly available with good qualities, prices are very competitive
nowadays
 Understanding customer’s needs become crucial in a competitive market
place . (Rana Mostaghel, 2006)
 Customer satisfaction can be impacted the behaviour of customers in a number
of ways.
 On other hand  dissatisfied will have bad word-of-mouth a company and
spread the news to eight to ten other people. Though switching intention is also
influenced by several factors, when known it triggers management action to find
out appropriate actions to take to satisfy customers (SPSS white paper, 1996).

Page  5
 Individual consumer switching brands (or repeat buying) induced by the utility
(or disutility) (Moshe Givon, 1984)
 Customer switching has been related to perceptions of quality (Rust and
Zahorik,1993)
 The degree to which service switching might be caused by price deals.
(Guadagni and Little,1983)

Whether there is customer switching behaviour in the carbonated soft drink

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

Page  6
 Objectives of the study

 To examine whether there is customer switching behaviour in carbonated soft drink market
in Manmunai North Divisional District area.

 To find out that, whether Marketing Mix of marketers in carbonated soft drink market have an
influence on customer switching behaviour.

 To find-out that, whether customers’ demographic factors have an influence on their switching
decision toward carbonated soft drink purchase.

 To examine that, whether customers’ psychological factors impact their switching decision
toward carbonated soft drink selection.

 To find out that, whether marketing mix, demographic factor, and psychographic factors have an
influence towards customers’ non-switching or loyal behaviour.

Page  7
 Significance of the study

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

wealth and to the organization’s profitability

Page  8
 Methodology

Data source
Primary Data – Questionnaire
Secondary Data – Research Articles, Books, Data bases, and Internet

Sample size and Data collection Technique

– 200 questionnaires among the overall Grama Niladary
division

Page  9
 Literature Review

Purchase

Postpurch
Nonuse
ase
Dissonanc Usage
e
Product
Disposal
Evaluation Complain
t
Behaviou
Satisfactio r
n

Committe Repeat Increased Brand Discontinu

d Purchase Use Switching ed Use
Customer
s
Figure 2.1 Postpurchase Consumer Behaviour
Source: Consumer Behaviour – Building Marketing Strategy
Page  10
 Analysis & Conclusion
Variable Dimension Switching Customers Loyal Customers
Mean SD Mean SD
Marketing Mix Product 3.96 0.874 4.02 0.8
Price 3.79 0.945 3.68 0.912
Place 4.13 0.871 4.07 0.75
Promotion 4.08 0.789 4.29 0.66
Demographic Personal 3.157 1.142 3.419 0.841
Factor Economic 3.197 0.964 3.22 0.972
Cultural 2.476 1.182 3.182 1.406
Social 3.215 1.047 3.37 0.983
Psychological Perception 3.44 0.966 3.459 0.86
Factor
Emotion 3.57 0.937 3.66 0.814
Motivation 3.41 1.001 3.86 0.928

Attitudes 3.425 0.94 3.5 0.93

Learning and 3.77 0.957 3.86 1.093
Memory

Page  11

Source-Survey data
 Variables Switching Customers Loyal Customers

Mean SD Mean SD

Marketing Mix 3.99 0.847 4.015 0.78

Demographic 3.01 1.08 3.3 1.05

Factor

Psychological 3.52 0.96 3.67 0.925

Factor

Source-Survey data

Page  12
Page  13
 Recommendation
Marketing Mix
Product
 Should consider about their brand name and positioning of brand among potential customers.
 Should market their product at different size in order to facilitate customers’ selection.
 Should maintain their present high quality and taste of the soft drink.
 If soft drink are available in plastic container at different container than glass or tin, that will be more
convince for customer selection.
 Should introduce new product under their brand name, in order to increase the brand reputation and
profits.
 Some older soft dink can re-modify according to customers’ need with favourable smell, and different
taste.
 The container design also should modify to attract more customers and target group. E.g. children
 There is a demand for a soft drink with high nutrition and safety to health, therefore marketers can fill this
gap by producing, soft drink with high nutrition or can product new soft drink for new target market.

Page  14
Price
 Low priced soft drink can be marketed
 Provide discount facilities
 Provide credit facilities and flexible payment.
Place
 Should properly manage their inventory in each and every place where they are covering.
 Marketers should properly manage the place where their product is available for customer purchase in order to pull
the customer to purchase the soft drinks
 Should ensure that the soft drinks are available at any quantities that customers required.
 should have good relationship
 should induce the sellers to recommend their soft drink
Promotion
 Should revise their advertisements according to customers need and culture.
 Can send their sales peoples
 Can employ with public relational activities

Page  15
 Consumers’ Demographic Factor

Personal Factor
 Can produce and market different carbonated soft drinks according to customers’ age group, and
gender
 According to educational and occupational segments.
 Based on customers’ health condition.
Economic Factor
 Should develop or reorganize their soft drinks by targeting various income levels and spending
pattern of such groups.
Culture Factor
 Based on customers’ culture and religion, marketers can deviate and differentiate the soft drinks in
order to increase the number of loyal customers from different culture and religion.
Social Factors
 Based on the material status and family size (influence from those) marketers can develop their
packaging and advertising style.
 While marketing the soft drinks, manufacturers teach to resellers to induce the right people.
 Should know that who are the influence people on the decision of purchaser

Page  16
 Consumers’ Psychographic Factor

Perception
 Should satisfy the customer expectations by delivering superior product.
 Customer oriented activities.
Emotion
Customers’ emotions are the very crucial factor for a marketer to understand and satisfy.
Motivation
Soft drink marketers should clearly understand the different sources of customers motivation.
Attitudes
The introduction or modification of carbonated soft drink should enable the customers to maintain
their attitude toward publicity of their family status.
Learning and Memory
Brand building strategies should adopt by soft drink markets in order to create long term memory in
customers learning in order to sustain in the market place.

Page  17
 Implication

 Offer more benefits to marketers for protecting their customers from switching
 Comparative analysis of both switching and loyal tendency may also help
 Bring number of advantages

Page  18
 Further Research Implication

 It will be interesting to investigate this idea in other rest of the parts in Sri Lanka and
involving people belonging to all ethnic groups.
 It can be interesting to investigate with other influences factors, such as customers’
personality, macro environment factors (i.e. political, technological, westernization and
localization), and environmental concern issues (green marketing oriented purchase) and so
on.
 Increasing the sample size and using other sampling techniques are also very favorable in
the data collection as it gives greater accuracy of the data.

The same research can be done to other significant sectors

Page  19
 Thank You

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