SMA Pepsi Proposal PDF

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SMA Pepsi prososal research...

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GROUP ASSIGNMENT COVER SHEET STUDENT DETAILS Student name: Nguyễn Vũ Đăng Linh Student name: Hồ Thu Nga Student name: Từ Thị Thanh Mai Student name: Vũ Thị Anh Đào Student name: Nguyễn Đắc Phương Nghi

Student ID number: Student ID number: Student ID number: Student ID number: Student ID number:

UNIT AND TUTORIAL DETAILS Unit name: Surveys and Multivariate Analysis Tutorial/Lectur e: Lecture Lecturer or Tutor name: Hồ Trọng Nghĩa

31181024616 31181025248 31181021378 31181021495 31181020599

Unit number:

Class day and time:

Tuesday and Thursday from 13h to 16h15

ASSIGNMENT DETAILS Title: Length :

Proposal words

Due date:

30/07/2020

Date submitted:

30/07/2020

DECLARATION I hold a copy of this assignment if the original is lost or damaged. I hereby certify that no part of this assignment or product has been copied from any other student’s work or from any other source except where due acknowledgement is made in the assignment. I hereby certify that no part of this assignment or product has been submitted by me in another (previous or current) assessment, except where appropriately referenced, and with prior permission from the Lecturer / Tutor / Unit Coordinator for this unit. No part of the assignment/product has been written/ produced for me by any other person except where collaboration has been authorised by the Lecturer / Tutor /Unit Coordinator concerned. I am aware that this work may be reproduced and submitted to plagiarism detection software programs for the purpose of detecting possible plagiarism (which may retain a copy on its database for future plagiarism checking). Student’s signature: Linh Student’s signature: Nga Student’s signature: Mai

Student’s signature: Student’s signature:

Đào Nghi

Note: An examiner or lecturer / tutor has the right to not mark this assignment if the above declaration has not been signed.

GROUP PROJECT – RESEARCH PROPOSAL EXECUTIVE SUMMARY The purpose of this project is to define the determinants which have an impact on customer loyalty towards Pepsi Cola. This study also ranks the factors that affect their commitment to infer suggestions for Pepsi. In this research proposal, we will discuss the context that is related to customer loyalty and how necessary this study is, explain clearly the research objectives, briefly give some background of customer loyalty and relevant information regarding existing theories. Next, research background, research model and how the research comes up with are also included. After that, target participants are specifically mentioned to ensure obvious understanding of this project, followed by the methods to collect as well as analyze quantitative data. COMPANY INTRODUCTION AND RESEARCH NECESSITY PepsiCo is considered a world leader in convenient snacks, foods and beverages industry. Currently, PepsiCo is ranked the second manufacturer in soft drinks market behind Coca Cola and leading in snacks and juices. PepsiCo has revenues of $40 billion a year with beverages contributing to less than 50% of that revenue[1]. PepsiCo’s mission statement is formulated as “to provide consumers around the world with delicious, affordable, convenient and complementary foods and beverages from wholesome breakfasts to healthy and fun daytime snacks and beverages to evening treats”[2]. Therefore, Pepsi understands that focusing on customer-driven strategy plays an important role determining the success of products. Becoming a true customer-driven business means taking a unified approach that includes marketing and product teams, as well. Therefore, for whatever reason, deeply understanding about loyalty-buying can give Pepsi a huge advantage of maintaining sustainable growth along with brand development. Moreover, the research needs to be conducted as it could help Pepsi make appropriate decisions, evaluate and apply the right strategy in the current market or current segmentation. Concluding from the Pepsi environmental situation of Pepsi, the study shows the detailed guidelines of the loyalty-based dependency upon the awareness, differentiation, or customer perception,etc. Thus, the research is quite important and beneficial for providing the basis of new bonds and relationships between the potential consumers and the brands as "retaining customers is more cost-effective than finding new customers" [3]. OBJECTIVES OF THE RESEARCH

It is mentioned in a report at statista.com and tuoitre.vn [4-5] that the market of carbonated soft drink is believed to get the compound annual growth rate at 8.6% in the next four years in all over the world and at 6%-7% in 2020 within Vietnam. The growth rate in Vietnam is higher than that in many developed countries such as France, Japan with about 2% growth rate, according to Anh, T. (2020) [6]. It can be obviously seen that the carbonated soft drink has gradually become extremely attractive not only to domestic investors but also to foreigner ones. Pepsico is among the leading companies in this sector with a lot of different kinds of soft drink. In his analysis in therichest.com, Said S. [7] mentioned that Pepsi is the product that has made the largest contribution in Pepsico various portfolios for a long time which accounts for one fifth of its total revenue. On the other hand, the customers are paying more attention to their health so they tend to choose the products that contain less amount of artificial sweeteners such as fruit juice, mineral water, etc. Besides, with the harsh competition from Coca-cola, customers are likely to switch brands if the Pepsi strategies is not available to respond to their actions. This study will point out all of the factors that could impact Pepsi’s customer loyalty as well as analyze how much influence they could have on the loyalty of customers from Pepsi. This paper will find out related components through collecting data from a great number of respondents with different characteristics such as gender, age, job, etc. Vietnam, there have been some loyalty analyses conducted. However, there are very few analyses about factors influencing loyalty of Pepsi’s customers. The report will help to generalize the potential factors that can impact customers' belief as well as their satisfaction about the brand, thereby seeing the level of customer loyalty toward Pepsi and suggesting some ideas for company to improve as well as maintain its high level. And if Pepsi can fulfill customers’ requirements, there is a high opportunity that they will become loyal customers. RESEARCH BACKGROUND Brand loyalty is defined as “a deeply held commitment to rebuy or repatronize a preferred product/service consistently in the future, thereby causing repetitive same-brand or same brand-set purchasing, despite situational influences and marketing efforts having the potential to cause switching behavior”[8]. Still, this view is not universally held, as others suggest that the two constructs are either not related [9] or that they are synonymous and represent each other [10]. Some researchers suggest that behavioral, or purchase, loyalty consists of repeated purchases of the brand [11], whereas attitudinal brand loyalty includes a degree of dispositional commitment in terms of some unique value associated with the brand.

Hence, an intermediate view on the matter asserts the constructs are related, yet by definition are distinct, with commitment leading to loyalty [12]. Loyalty is defined as the intention of a consumer to repurchase products/services through a particular beverage. Customer loyalty is defined as repeated purchases of particular products or services in a protracted time. To prove this reason, Brody and Cunningham [13] mentioned a particular customer’s purchase frequency and Farley [14] researched purchase possibility are proposed as a means to measure loyalty. Yee and Faziharudean argued that customer loyalty towards Internet banking websites has become an issue due to stiff competition among the banks in Malaysia, which is specifically affected the most by customer satisfaction, followed by “habit, utilitarian value related to the monetary, values of the product as well as the emotional benefits of the customer”[15] . Another study demonstrated the influence of switching behavior on customer loyalty towards the cold drink in Pakistan [16]. Customers feel free to purchase products or services from various suppliers without limitation. Therefore, we have a bias towards customers willing to purchase premium worth. Researchers have proposed a two dimensional conceptualization of loyalty by positive and negative expertise. We normally comprehend that price is “the amount of money charged for a product or service” . In other words, customers pay a price, a set of value for owning, consuming a product or using a service . As cited and discussed in the topic “Price Sensitivity” of Ready Ratio [17], goods that are widely available will show more price sensitivity, which can be completely applied in customer satisfaction. An example listed in the same topic [17], consumers usually do not accept a few more cents paid more for additional gasoline gallon and there are also some instances for price sensitivity fluctuated due to various levels of income. As beverage is one of the industries that provides many choices for their customers in the mass market, therefore, are quite sensitive to any changes of price. To sum up, prices are considered to contribute remarkably to customer loyalty. It is widely believed that perceived quality, one of the potential keys to determinant of loyalty, is the benefits that a buyer derives from a seller’s suggestion, and offering. Perceived quality and satisfaction are highly intercorrelated [18]. It has been suggested that brand reputation is a major driver of customer loyalty, and hence companies seek to increase the equity of their brands [19]. Brand reputation evolves all the time, and it is mainly created by the flow of information from one user to another [20].

According to a study of “Why B2B Marketers Waste 19% of Their Budget” [21], customer belief was considered and selected to be one of the best reasons that a consumer could build their relationship with any vendors. It can also be understood as a consumer's belief in their vendor morality and kindness [22]. Additionally, consumer loyalty is directly affected by belief, they hardly make any buying intentions with vendors that failed in building their trustworthiness. In other words, customer belief plays an important role in customer loyalty [22]. Traditionally, customer satisfaction was employed as a label of IS success [23] and therefore frequently measured in past studies. However, to develop relations between antecedents of customer satisfaction (e.g., quality), and consequences of overall customer satisfaction (e.g., individual impact, and customer loyalty) [24-25]. Given that our capture an overall measure of customer satisfaction with beverages and concern about survey length and respondent convenience, the conceptualization of customer satisfaction adopted below therefore to summarize the affective response though his/her experiences with beverages, especially Pepsi Cola. RESEARCH MODEL

Habit indicates the repetition of the buying actions. It will occur when a consumer finds that a product can meet their requirements in terms of many factors such as price, quality, efficiency. H1: Habit has a positive impact on customer loyalty. Higher frequency the customers purchase a product will result in the higher chance that they have loyalty to the brand.

Price segmentation also plays a very important role to influence a customer's buying decision. Therefore, if Pepsico has good, suitable price segmentation strategies, they can improve their competitiveness over their rivals in the market. H2: Price segmentation can positively impact customer satisfaction. Good price segmentation can satisfy customers and make them have better brand attitude. Perceived quality is how the customers feel about the products. If they think that the brand can ensure the quality, the attitude towards the products will increase. Quality includes many fields such as how their products are distributed, how various flavors and packages their products have,ect. H3: There is a positive relation between perceived quality and customer satisfaction. If the quality, the flavors, the packages or the distributions of the products are good enough to meet the requirements from the customers in terms of high quality, tasteful flavors, eye-catching appearances or available supplies, the customers can be very satisfied and it will drive to their repeated buying actions. Promotion can encourage the customers to purchase and even purchase with higher level. Moreover, it can attract the customers from competitive brands. H4: The promotion positively influences the customer satisfaction and belief. A suitable promotion at a right time can motivate the customers to choose their brand over others. Brand reputation may ensure the quality of the products for the customers. According to Pratap A. [26], there are very few potential competitors in this carbonated beverages industry with Pepsico. Additionally, as a big company with worldwide popularity for such a long time, Pepsico has built stability and trust as one of the most leading brands so that the customers are more likely to believe in the quality of the products from their brands than those from other new brands. H5: The brand reputation has a positive impact on customer satisfaction and belief. The more reputation the brand has, the more likely that the customers believe their needs can be fulfilled by the products from that brand. H6: There is a direct relation between customer belief and customer loyalty. Increasing the customer belief will help the brand to keep their customers switching to other brands. H7: The relation between customer satisfaction and customer loyalty is positive. RESEARCH DESIGN

Target Participants This study uses the non-probability sampling technique which is convenience sampling, judgement sampling and snowball sampling to collect the data from around 120 people. Convenience sampling is applied in order to measure the perception of Pepsi image in the market easily. Also, judgmental sampling helps collect the data from potential loyalty customers who have already purchased Pepsi to understand specific issues or manage opinions of the product. In addition, snowball sampling method is appropriate for collecting the information of participants from 16 to 60 years old. Questionnaire and Measurement The survey has two parts. The first part which is at the end of the questionnaire asks the respondents gender, age, income, education and status to gather the information about the respondents of different characteristics that can be used to understand the variations in different classes. The second part includes variables that are under this study, such as habit, customer satisfaction, prices and so on to investigate the relationship on customer loyalty. All variables in the questionnaire are constructed by using a 5-point Likert scale to measure. Measurement items and sources Variables

Items

Sources

Price

Price is reasonable, corresponding with its quality.

[27]+[28]

Price is acceptable compared with other brands. Price is appropriate with my income. Price is stable. Perceived Quality

Products are diverse. Flavor is distinguishable from other brands’ products. Packaging is eye-catching, recognizable.

[29]

The product capacity is diverse. Product information (ingredients, origin, expiration,...) is apparent and clear on each product. Product is effective in refreshing. I feel full of energy after using products. Promotion

Promotion/discounts are diverse.

[30]

Promotion/discounts are attractive. Promotion/discounts take place regularly. I buy more when there are discounts. I try new products when they have discounts. Brand Reputation

Products have good quality.

[31]

Advertising is impressive. Products are distinguishable from others of different brands. Product line is distinguishable. Brand has positive campaigns towards society. Brand creates a good feeling. Habit

I buy products without any consideration. I use product as my family and friends use.

[32]

I give priority to this product rather than others. I have consumed the product for a long time. Customer Belief

I know these products very well.

[29]

I feel secure when using products. The product can fulfill its commitment to customer. Using products is not harmful to my health. Customer Satisfaction

I am satisfied with the quality of product.

[29]

I am satisfied with product’s packaging. I am satisfied with product’s promotion. I am satisfied with product price. I am satisfied when using products. Customer Loyalty

I often use the product in special occasions and parties I immediately thought of the product when I wanted to purchase a soft drink product. If the products are not available in a shop, I will look to buy them in other shops. I am willing to paid a higher price to use the product I will recommend the

[29]

product to friends and relatives I will say good things about product when someone asks. I will continue using product.

DATA COLLECTION AND ANALYSIS Secondary Data The data collection used is firstly based on secondary data to gain general insights and understanding of customer loyalty as well as gather factors that can affect it on Pepsi products, which are provided in the research background section and see whether they are adopted and valid in this research project or not. Survey/Questionnaire Based on the research model which describes factors affecting Pepsi’s customer loyalty, the survey is formed and pre-tested to make sure wording is not confusing or difficult to understand. After that, for the purpose of collecting data, it will be conducted in both offline and online survey-based procedure, with the sample size of at least 120 participants, consisting of teens and young adults who have consumed Pepsi, at the age of over 16. The questionnaire will be printed for offline data collection and also designed under Google form for online target. Then, the data obtained will be entered in SPSS software and results extracted from relevant techniques will be employed for analysing. Analysis Methods The nature of this study is descriptive and correlation research. Descriptive statistics help describe and understand the features of a specific data set by giving short summaries about the sample and measures of the data [33]. By using the measure central tendency such as mean, mode, median and the measure variability such as standard deviation, minimum and maximum, it can verify the developed hypotheses that mirror the present scenario like which age has a high potential loyal with Pepsi and compare types of customers. Correlation

analysis indicates that two variables have a significant relationship or not and which variables are increase/decrease at the same time. Which factors indirectly and directly affect customer loyalty will be clearly shown. RESULTS

Reliability Statistics

Cronbach's Alpha .658

N of Items 7

SUPPORTING INFORMATION ⮚ References [1] 2009 Trade Ideas, I., 2020. Pepsi Store - History Of The Birthplace Of Pepsi. [online] Pepsistore.com. Available at: [Accessed 28 June 2020]. [2] Panmore Institute. 2020. Pepsico’S Vision Statement & Mission Statement Analysis Panmore Institute. [online] Available at: [Accessed 28 June 2020]. [3] 5 reasons why customer satisfaction Survey is important | QuestionPro [Internet]. QuestionPro. [cited 15 June 2019]. Available from: https://www.questionpro.com/blog/5-reasons-customer-satisfaction-surveyimportant/ [4] Statista. Carbonated soft drink [In...