CHAPTER-1

INTRODUCTION AND

RESEARCH DESIGN

1
 CHAPTER-I
INTRODUCTION AND RESEARCH DESIGN

1. MADHYA PRADESH: A BRIEF OVERVIEW

1.1 Geography and Topography of Madhya Pradesh
After the independence of India, Madhya Pradesh state was formed with Nagpur as its capital
this state comprised the southern parts of the present-day Madhya Pradesh and Maharashtra. In
November 1, 1956, Madhya Pradesh was reorganized and its parts were united with the states
of Madhya Bharat, Vindhya Pradesh and Bhopal to form the new Madhya Pradesh state with
Bhopal as its capital. This state was the largest state of India by area until 2000. In 2000, the
Chhattisgarh region was split to create a new state, and Rajasthan became the largest state of
India. Madhya Pradesh is home to a large tribal population, which has been largely cut-off from
the mainstream development. This makes Madhya Pradesh one of the least developed states in
India, with an HDI value of 0.375 (2011), which is below the national average.
Madhya Pradesh was the state with the major area in the country with natural beauty and
plentiful natural resources and economically useful minerals in large quantity namely diamond
(sole producer in the country), Copper mining (80% in the country), limestone, coal,
magnesium ore and so on and so forth. Madhya Pradesh is nicknamed as the, heart of India as
it is centrally located in India. It is the second largest state in terms of geographical extent, and
is ranked ninth largest economy of India. There are fifty (52) districts in the Madhya Pradesh
state. As per 2011 census, Madhya Pradesh has a population of 72 million (censusindia.gov.in,
2011) accounting to 6% of India’s population. The population density of the state is 236
(CensusIndia.gov.in, 2011) persons per square kilometer and is significantly lower than the
national average of 382 persons per square kilometer. Madhya Pradesh is the largest producer
of oilseeds, garlic, pulses and coriander in the country. The state of Madhya Pradesh is gifted
and bestowed with enormous natural resources like minerals, forests, some valuable herbs and
medicinal plants and eight important rivers flowing across the state.
The state of Madhya Pradesh has over all 44 banks, working with 5949 branches and
4043 ATMs, of these branches nearly 57 percent are represented by commercial banks,
followed by 20 percent each by cooperative banks and RRB and there are only 5 percent of
private sector banks. Of these branches nearly 52 percent are operating in urban/metro and

2
semi-urban areas, while 42 percent are in rural areas. It is interesting to note that nearly 1
percent of these branches operate as special SME branches catering to SME sector.
Madhya Pradesh has a mixed topography that comprises of both hills and plains. The
state has three major seasons which are winter (November through February), summer (March
through May), and the monsoon season (June through September). During the winter average
temperatures range from 10° to 27° C (50° to 81° F). Summers are hot, with an average
temperature of 29° C to 48° C (85° F to 118° F). During the monsoon season temperatures
averages from 19° to 30° C (66° to 86°). Madhya Pradesh receives an average annual rainfall
of about 1200 mm (nearly 50 in), of which 90 percent falls during the monsoon season.
The state of Madhya Pradesh is located at the heart of India containing a total
geographical area of 308 thousand sq. kilometers. It is bordered by five states viz. Uttar
Pradesh, Maharashtra, Gujarat, Rajasthan and Chhattisgarh. The actual location of the Madhya
Pradesh in India is clearly depicted in the Indian map as below:

1.2 Population Growth in Madhya Pradesh

Population distribution by age group in Madhya Pradesh has been witnessing noteworthy
changes, largely due to control of population growth which, has resulted in net decline of 2.33
lakh child population (0-6 years) during 2001-2011. As per KPMG estimates, the state has a
significant demographic dividend, with a rising working age population and a sizeable
population chunk in the lower working age spectrum. Between 2012 and 2017, an additional
4.9 million people are expected to enter the labour market, followed by another 4.5 million
people during 2017-22 (KPMG Estimates, Registrar General and Census Commissione,
2006)

3
 Graph 1.1 Madhya Pradesh Demographic Estimations

Source: KPMG Estimates, Registrar General & Census Commissioner (2006)

1.3 Industrial Profile of Indore District

The commercial capital of Madhya Pradesh is Indore. It is perceived as one of the
richest cities of central India. Indore is also known as “Mini Mumbai” because of having alike
cultural, traditions and life style of Mumbai. The Indore city is managed and administered by
Indore Municipal Corporation (established in 1956 under the Madhya Pradesh Nigam
Adhiniyam) and some regions surrounding the city are administered by Indore Development
Authority. The principal responsibility of Indore Development Authority is to ensure an
efficient development of Indore city. Indore is the only city of India with both an Indian
Institute of Management (IIM) and an Indian Institute of Technology (IIT).
Indore is situated in the western region of Madhya Pradesh covering primarily the black
soil. It comprises of four Tehsil namely Depalpur, Sanwer, Indore and Mhow, Due to its
location on the southern edge of the Malwa Plateau, however hot it may be during the day, in
the late evening, cool breeze starts which makes the evenings quite pleasant, referred to as
Shab-e-Malwa. The Indore District is bounded by the districts of Ujjain to the north, Dewas to
the east, Khargone (West Nimar) to the south, and Dhar to the west. Indore is often referred to
as the commercial capital of Madhya Pradesh with a bulk of its trade coming from Small,
Medium and Large scale manufacturing and service industries. The industries range from
automobiles to pharmaceutical and from software to retail and from textile trading to real estate.
Pithampur Special Economic Zone and Sanwer Industrial belt are the two important industrial

4
fields surrounding the Indore city. The economy of Madhya Pradesh is the tenth- largest state
economy in India with Rs.8.09 lakh crore (US$120 billion) in gross domestic product and a per
capita GDP of Rs.90,000 (US$1,300). Madhya Pradesh ranks twenty-sixth among Indian states
in human development index.
Indore is one of the most progressive districts of Madhya Pradesh and is doing well in
terms of overall financial inclusion including MSME. There are 44 banks operating with
network of over 420 branches of which nearly 80 percent operating in metro and semi urban
areas ensuring access to finance to MSME. Credit to Deposit ratio of Indore district also
confirms on the same.
Indore is the industrial capital of Madhya Pradesh, with an extensive history; Indore has
been a major Indian City right from the pre - independence days. Once, the seat of the great
Holkar Dynasty, Indore has had the advantage of being centrally located in the country, such
that most places in central, western and northern India are within reasonable reach. Moreover,
the richness of resources in the central Indian plains has made Indore a fertile ground for
industrialization. The Indore city has seen hasty growth in the last 12 years; it is an important
business and industrial center. Pithampur the third largest Industrial belt in Asia and Dewas
houses major factories of large companies. The importance of Indore can be judged by the fact
that the country’s major domestic airlines fly in.

2 ADVERTISING

2.1 Advertising: An Overview

Advertising is an important instrument of preferment of products or services. Advertising

enhancements sales promotion and personal selling to an inordinate extent. Advertising has
attained more prominence in the present world considered by harsh competition in the market
and reckless changes in machinery, and fashion and taste and attitude of customers. Advertising
is used for interconnecting commercial information to the existing and forthcoming customers.
It usually provides information about the advertising firm, its product qualities, price and place
of availability of its products. Advertisement is indispensable for both the sellers and the
buyers. In the present competitive world no business organisation can survive or grow without
effective advertisement. Advertising plays a great role in marketing. The significance of
advertising is felt by looking at the amount of money that is being spent for promoting products,
services, ideas, concepts and personalities all across the world. It is an all-persistent fact for

5
many growing communities. The economic and social impact has far –reaching consequences
than the return on investment model used to calculate the value of advertising in strict economic
sense. Advertising is a reminder to the existing customers and it aims at cultivating new
prospectus also. So it is perceived as an effective medium with the target audience.

The soft drink industry is actually made up of two major manufacturing systems that,
taken together, bring soft drinks to the market. These two systems fall into distinct categories:
(1) flavoring syrup and concentrate manufacturing and (2) soft drink manufacturing. Soft drink
means any type of nonalcoholic beverage produced by a soft drink manufacture; includes
bottled water, but not tap water. The industry as a whole faces challenges as a result of the
slumping economy and changes in consumer’s consumption patterns due to increased health
consciousness. Marketing is an important component of the industry chain, used to create
demand and build customer loyalty. It has undergone a number of changes over the last five
years due to efforts to reduce advertising directed at children, to introduce new types of media,
and to update marketing messages for consumers who are looking for more healthful
alternatives. Ads are a cost-effective way to disseminate messages, whether to build brand
preference for Coca –Cola or to educate people to avoid hard drugs. The business organisation
adopted diverse ways for the process of advertising. In large scale enterprises, business sectors
develops its own branch’s and in small scale enterprises advertising is handled by someone in
marketing department, who works with an advertising agency. The advertising department’s
job is to recommend a budget; improve advertising strategy; approve ads and campaigns; and
handle direct-mail advertising, dealer displays and other forms of advertising. Most companies
use an outside agency to help create advertising campaigns and to select and purchase media.

Advertising shows a significant role in the modern age of the society. It predominantly
regulates the appearance and the total way of life. Advertisements had a great impression on
decision making process and our intellectuality as well as on the approach towards ourselves
and the whole world around us. Advertising shows us ready forms of actions in a certain
situation. It determines what is good and what is bad. Every person, uniformly without
recognizing it, is influenced by advertisements. The consumers didn’t realizes how advertisement
influences them to buy the goods or services.
The determination of advertisement is developing every day. A large amount of money is
consumed on advertising campaigns in order to motivate the consumers and handover to the
companies’ large amount of profits. Furthermore, it is a "product of the first necessity" for any
sector, aimed at a commercial success, and it is becoming more and more costly. Advertising

6
is directly related to economy and politics. It not only determines the purchase of soft drinks,
but also the choice of governmental candidate. In nut shell it determines the route of political
development of the country and the government itself. This advertising function is very
significant in our society, it helps in increasing living standard of the people. Traditional
advertising outlets involves radio, newspapers, magazines and television. Today, however
advertisements are placed nearly everywhere and anywhere. It includes: billboards on
roadsides, websites, YouTube videos, electronic newsletters etc.
The first Advertisement agency was William Taylor in 1786 followed by James ‘Jem’ White
in 1800 at Fleet Street, London and Reeynell and son in 1812. Most of the development of
global advertising agency took place during the 20th century because or rapid development of
industrial sectors. Due to the occurrence of more advanced resources of creating and allocating
advertisements: colorful printing, television, radio, Internet etc. advertising has gaining more
importance.
The main objective of this thesis was to analyze the influence of advertising on a consumer
buying behavior with reference to soft drinks.

7
2.2 NATURE OF ADVERTISING
Advertising is non-personal communication of information about goods, services or ideas over
the numerous media, and it is usually convincing by nature and paid with an identified
sponsors.
The normal definition of advertising includes following main elements:

1. Paid form of communication.

2. With an identified sponsor.
3. Dissemination through the various media.
4. The presence of a specific audience for treatment.
5. Non-personal presentation of goods or services.
6. Intended act.
Thus advertising is usually a paid form of communication, with an identified sponsor, executed
in a positive way through the different media and various other legitimate means and aimed to
disseminate with some products and its further acquisition by possibly large number of
consumers.
Advertisement is a communication whose purpose is to inform potential customers about
products and services and how to use and obtain them. Every medium is used to deliver these
messages, including: television, radio, newspapers, movies, magazines and internet.
Advertisements influence our lives in many unsuspecting ways because of rapid changes in the
macro environment.

Following are the main advantages of advertising:

Advertising helps us to meet with competitors. It is necessary marketing activity in the present
business environment.
Advertisement increases the knowledge of customers regarding the new product availability,
price of the product, quality etc.
Advertising helps to expand the scope of introduction of new products.
Advertisement enhances the goodwill of the company.
Advertisement helps the firms to increase market share.
Advertisement helps to eliminate the middlemen. Advertisement creates a direct link
between the producers and consumers, thereby eliminating the marketing intermediaries.
Advertisement increases living standard of the people especially in developing countries like
India.

8
Limitations of advertising:
Advertisement increases the cost of product which should ultimately bear to the consumer.
Advertisement undermines the social values.
Advertisement adds to costs, producers/manufacturers do not pay any advertising expenses
out of his pocket rather the amount spending on advertisements increases the cost of the
product which should ultimately bear by the consumers.
Almost, every country has adopted its own rules and regulations regarding advertising.
Advertising can define a wide-ranging number of different facets, such as timing, and content.
For example, in Saudi Arab you will not see advertising of cigarettes and alcohol on the TV
and in the UK it is totally prohibited to endorse tobacco on television.

2.3. Organization of advertising

Advertising is a powerful instrument for a different type of consumer groups, and is used to
implement a wide variety of functions. Therefore, it is not easy to classify it. It is possible to
divide advertising into following main categories:

1. By target market segmentation. Market segmentation is a process in which total market is

dividing into sub markets in order to make easily target the customers. Therefore, it should be
studied that the segmentation is a division of the consumer audience on segments by typical
community, proficient and other features.

2. By target effect – marketable (products and services) and non-marketable (governmental and
social). Marketable advertising is used to increase the demand of various goods and services,
generating the best conditions for sale. Non-commercial advertising can be used to divert the
attention and create a good image of a business persons.

3. By segregate region - advertising can also be classified by local, regional, national and
international. International advertising is a speedy development of monetary globalization in
general: interactive videos, world radio and satellite TV, the Internet and other latest
communication tools. The other types of advertising aimed at the population within the
boundaries of a particular state, region, city, town or district.

4. By the way of broadcasting – advertising should broadcasted by means printed (newspapers,

magazines etc.) electronic (radio, television), outdoor advertising.

9
5. By the method of operation - textual, visual. Textual advertising is divided into simple and
multifaceted, and visual into statistical and dynamic. Simple text advertising is a regular wall
advertisement. Complex text advertising includes a set of basic components - title, subtitle,
main text module, slogan, etc.

6. By the method of impact - advertising is both direct and indirect. Direct advertising refers
the advertising in which there is a face to face contact between buyer and seller: this is the
product, please purchase it. Indirect advertising is an occurrence of a different kind. It operates
almost on a subliminal level. So we do not even recognize it that we captivate the advertising
information regularly. Emolument

8. By the method of emolument –paid and non-paid. Non-paid advertising is exceptional. This
type of advertising can be seen mostly in cases of public or social advertising, not for
commercial purposes. Almost every advertisement is paid form of communication.

2.4. Main Types of Advertising

Following are the main types of advertising:
1. Display advertising – the main objective of display advertisement is fast transformation and
their prospective reach is massive because search engines can match an ad with thousands of
websites based on keyword and targeting preferences.

2. Brand advertising – companies want to sell their products under the brand name because it
gives the distinct individuality of their products and services. Brand advertising helps to build
strong, long-term relationships with the consumers.

3. Political advertising – nowadays political parties use advertising agencies for the promotion
of party candidates especially during the election campaigns in order to motivate the voters.
Advertising helps them to create better image of the politicians.

4. Print advertising - print advertising (newspapers, magazines, brochures etc.) is the most
effective source of advertising because of its wider reach. Advertisers also use digital media,
such as banner ads, to reach the same target consumers.

10
5. Outdoor advertising - outdoor advertising involves displaying large posters banners or
hoardings with the advertisement. Generally these are displayed along the road side, on the
walls of buildings or specifically targeted places that have huge inflow from the public.

6. Radio advertising - radio is a powerful tool for the promotion of goods or services of the
company because of its wider reach and less costlier as compared to TV ads. Advertisers pay
commercial radio stations for airtime and in exchange, the radio station airings the advertisers
commercial to its listening audience.

7. Social media advertising - social media advertising helps the companies to earn quickly
returns because everything on social media is done in real time. It helps the companies for mass
promotion of the products and services.

8. Television advertising - television advertising can convey influential marketing messages

for consumers especially with regard to soft drink companies. Television ads is still the most
pervasive and powerful tool for reaching Indian consumers.

2.5. Functions of Advertising

There are four main functions of advertising:

1. Cost-effective function. The main function of advertising is to influence the sales volume
and increase the volume of profits from the sale of a certain products or services for a certain
unit of time. Advertising provides valuable information about the products or services and
stimulates the people to buy the product. The study reveals that majority of the people have
responded to the ads, which is better for the economy and the economical well- being of society.

2. Social function. The functions of advertising as a social practice is the realization and
amalgamation in the minds of certain consumer models, values and norms of the society. In spite
of the fact that the scope of advertising is contracted, it has a definite effect on the nature of social
relations. Advertising encourages cognizant consumer behaviour, as it helps to relate the features
of the proposals, giving the consumers the opportunity to decide on the purchase of already being
informed.

11
3. Marketing function. The principal component of marketing is advertising. Advertising is
directly related to the marketing activities, whose main aim is to satisfy the needs and wants of
the consumers. Advertising is the backbone of modern business organisations.

4. Communicating function. Advertising is one of the main element of promotional mix which
helps the business organisations to promote their products or services by informing and
persuading the people to buy them.

Other Functions of Advertising

For many firms advertising is the dominant element of the promotional mix – particulars for
those manufacturers who produce convenience goods such as detergent, non – prescription
drugs, cosmetics, soft drinks and grocery products. Advertising can also help to convince
potential buyers that a firm’s product or service is superior to competitor’s product in make in
quality, in price etc. it can create brand image and reduce the likelihood of brand switching
even when competitors lower their prices or offer some attractive incentives. It performs the
following functions:

Promotion of sales. Advertising has become an indispensable marketing activity in the present
era of large-scale production and in the tough competition in the market both in national and
international market. Better advertising campaign helps in to attract large number of customers
in the local, national, and international markets.

Introduction of innovative product. It helps the introduction of innovative products in the

market. Modern business organisations (MNCs, TNCs) can’t wait for the consumers therefore,
in order to attract the customers they heavily advertised their products or services with the help
of different Medias.

Mass production facilitation. Advertising facilitates large-scale production. Advertising

encourages production of goods in large scale because the business firm knows that it will be
able to sell on large-scale with the help of advertising. Those firms who believe in production
concept their main emphasis is on increase quantity of the products which leads to cost
minimization.

12
Research and development (R&D). Advertising stimulates research and development
activities. Advertising has become a competitive marketing activity. The companies tries to
segregate its product from the alternates available in the market with the help advertisements.
Research and development helps business organisations to have competitive edge over its
competitors. Multinational companies have established their own research and development
wing in order to make new innovative products.

Education of people. Advertising also acts as an information service and educate the
consumers about innovative products and their uses. Advertising educates the people by
presenting the information through both audio video usual’s and helps the people to increase
their knowledge regarding the goods and services. Advertisements increases the living standard
of people and also helps in the economic development of the society.

2.6. DEVELOPING AND MANAGING AN ADVERTISING PROGRAM

Advertising is the dissemination of information concerning an idea, product or service to induce
action in accordance with the intent of the advertiser. Ads are cost-effective way to disseminate
messages, whether to build brand preference for soft drinks or to educate people to avoid hard
drugs. Companies which are large in size establish the advertising departments while
sometimes companies also use outsourcing in order to focus the core activities.
While emerging a program, marketing executives should start by ascertaining the target market
and the consumer’s motives. Then they can make the following important decisions in order to
developing an advertising program, known as “the five Ms.” Mission, Money, Message, Media
and Measurement. The above mentioned can be explained by the diagram given below:

13
 The 5Ms of Advertising
Checklist for planning of a marketing or advertising campaign.
What are the advertising goals?
Mission

Money How much money can be spent?

Message What message should be sent to the consumers?
Media What broadcasting channels should be used to communicate?
How should the results be assessed?
Measurement

The verdicts are summarized in the above table.

Figure 1. 1 The Five Ms OF ADVERTISING

Message
 Message
generation
 Message
evaluation &
Money
selection
Factors to  Message
Mission execution
consider: Measurement
 Social
 Sales  Communication
 Stage in PLC
goals impact
 Market share Media
 Advt.  Sales impact
and consumer  Reach,
objectives
base frequency,
 Competition impact
and clutter  Major media
 Advertising types
frequency  Specific
 Product media
substitutability vehicles
 Media
timing
 Geographic
media
allocation

14
After the Target Market, market positioning and marketing mix decisions have been taken the
First step in developing an Advertising Program is:
1. MISSION OR SETTING THE ADVERTISING OBJECTIVES
Advertising Objectives can be classified as to whether their aim is to inform, persuade or
motivate, remind, or reinforce.
To inform: The fundamental aim of advertising is to inform the consumers about innovative
products or services. During this stage the consumers are not aware about the innovative
products or services therefore, firms use advertising to inform the customers about availability
of goods or services, price, quality etc.
To motivate: The companies use advertising in order to stimulate the prospective customers.
Such advertisements aim at building selective brand preferences.
To remind: Reminder advertising aims to stimulate repeat purchase of products and services.
Such advertisements are highly effective in the maturity stage of the product. The aim is to
keep the consumer thinking about the product.

2. MONEY
Money is an important factor it deals with determining on the Advertising Budget. As we know
advertising is treated as a current expense, part of it is really an asset that forms up an intangible
asset called brand equity. The advertising budget can be distributed in different areas.
Following are five the detailed factors to be considered when setting the Advertising budget:

Stage in the product life cycle (PLC): every product has its own life cycle, sooner or later it
will die. The concept of PLC used by marketing management as a factor in deciding when it is
appropriate to increase advertising budget or reduce it. Innovative goods or services typically
receive huge amount of advertising budgets to meet against the competitors and to gain
consumer trial. Reputable brands usually are reinforced with low advertising budgets as a ratio
to sales.

Market Segment and Consumer base: the brands which have high demand in the market
usually require low advertising expenditure as a percentage of sales to sustain their share. To
build share by increasing market size requires larger advertising expenditures. Furthermore,
on a cost-per-impressions basis, it is less expensive to reach consumers of a widely used brand
them to reach consumers of low-share brands.

15
Competition: the present competitive environment is a dynamic in nature. There are large
number of rivals and high advertising costs, a product must advertise more severely to be heard
above the noise in the market
.
Advertising regularity: in the present competitive world there are numerous ads displayed on
media the consumers didn’t remind them therefore, the number of repetitions are needed.

Product substitutability: those products or services whose substitutes are easily available in
the market (example chocolates, beer, soft drinks etc.) require heavy advertising to survive in
the market. Advertising is also important when a brand can offer distinctive physical benefits
and other uses.

3. MESSAGE GENERATION
Message generation can be done in the following ways:
Inductive: During the exchange of information with the consumers, traders, experts and
entrants consumers are the main source from which different concepts, ideas and suggestions
should be received. Their feeling about the product, its strengths, and weaknesses gives enough
information that could support the Message generation process.
Deductive: John C. Maloney proposed a framework for generating Advertising Messages.
According to him, a buyer expects four types of rewards from a product: Rational, Sensory,
Social, Ego Satisfaction. Buyers might visualize these rewards from:
Results-of-use Experience
Product-in-use Experience
Incidental-to-use Experience.

MESSAGE EVALUATION AND SELECTION

The advertiser needs to evaluate the alternative messages. A good ad generally focuses on one
core selling proposition. Messages can be rated on desirability, exclusiveness and believability.
The message must first say something desirable or interesting about the product.
MESSAGE EXECUTION
The message’s impact depends not only upon what is said but also on how it is said. Some ads
aim for rational positioning and others for emotional positioning. While executing a message
the style, tone, words, and format for executing the message should be kept in mind.

16
Style. Any message can be presented in any of the following different execution styles, or a
combination of them:
Lifestyle: Emphasizes how a product fits in with a lifestyle.
Mood or image: Evokes a mood or image around the product, such as beauty, love, or serenity.
No claim is made about the product except through suggestion.
Musical: Uses background music or shows one or more persons or cartoon characters singing
a song involving the product.
Personality symbol: Creates a character that personifies the product. The character might be
animated
Technical expertise: Shows the company’s expertise, experience, and pride in making the
product.
Scientific evidence: Presents survey or scientific evidence that the brand is preferred over or
outperforms other brands. This style is common in the over-the-counter drug category.
Tone: The communicator must also choose an appropriate tone for the ad.
Words: Memorable and attention-getting words must be found.
Format: Format elements such as ad size, color, and illustration will make a difference in an
ad’s impact as well as its cost. A minor rearrangement of mechanical elements within the ad
can improve its attention-getting power. Larger-size ads gain more attention, though not
necessarily by as much as their difference in cost. Colored illustrations instead of black and
white increase ad effectiveness and ad cost. By planning the relative supremacy of different
elements of the ad, optimal delivery can be achieved.

17
4. MEDIA
The next ‘M’ to be considered while making an Advertisement Program is the Media through
which message is delivered. The steps to be considered are:

Deciding on
Geographic
media Deciding on
media timing
Step V
Selecting
Step IV specific media
vehicles Choosing
Step III among major
media types Deciding reach,
Step II frequency and
impact
Step I

5. MEASUREMENT
The last step in scientific advertising is to measure its effectiveness. Evaluating the
effectiveness of the Advertisement Program is very important as it helps check further wastage
of money and helps make corrections that are important for further advertisement campaigns.
The marketing manager needs to evaluate the effectiveness of advertising in order to improve
the effectiveness of advertising by making changes in advertising message and to determine
the optimum level of advertising expenditure. Marketing- Advertising experts have developed
some methods to accomplish this task these include:
Communication-Effect Research
Sales-Effect Research

18
 3. PLANNING OF AN ADVERTISING CAMPAIGN

3.1. Selecting Time for Promotional Undertakings

Marketers are continuously trying to draw the consumer’s attention towards their products and
services. The new companies have to work hard in order to attract large number of customers and
also retain them. Therefore it is the fundamental function of marketing management to take
necessary decisions about, how to carry out advertising promotions in altered phase periods.
Promotional activities may be periodic (before festivals) or intermittent. Promotional activities can
also be intended for different occasions, for example, opening of new outlets in various towns,
districts for the sale.
Therefore in these circumstances, if the trade turnover has dynamic seasonal changes, the
advertising policy provides the following strategies:

T
TURNOVER

P Seasonal advertising

Anti-seasonal advertising

0 3 6 9 12 months

Graph 1.2. Promotional strategies for turnover growth (Source: author)

19
Seasonal advertising pertains to the advertising focused on the basis of seasonal products and
thereby the usage of specific advertising strategies. In this graph T is the cost of turnover; P states
the cost of advertising matters, making a share of P depending on the product specifications; L is
advertising, the intensity of which remains at the same level. The influence of advertising on sales
volume is reasonably assessed. If the seasonal advertising is not changed during that period the
sales volume of products and services will also be same. If there is frequently changes takes place
during in the release of promotional products follow the changes in sales of goods, i.e. the use of
seasonal advertising. Dynamics of the release of promotional products follows the changes in
spread in the form of anti-seasonal advertising.

4. ADVERTISING AND PRODUCT LIFE CYCLE

4.1. Concept of Product Life Cycle (PLC)

The product life cycle is an important concept in marketing. Every product has its life. Industrial
goods may have longer life than consumer goods. The life cycle of a product is associated with
marketing and management decisions within businesses, and all goods go through these stages:
The product life-cycle concept specifies as to what can be expected in the market for a new
innovative product at various stages i.e., introduction, growth, maturity, and decline. Thus, the
concept of product life-cycle can be used as an anticipating tool. The concept comes from the
fact that any product sooner or later dislodges or replaced by another innovative product.

4.2. Stages of Product Life Cycle

Product life cycle is divided into following four stages: introduction, growth, maturity and
decline.
1. Introduction stage. This is the stage in which the product has been introduced first time in the
market, and sales of the product starts to grow slowly. During the introductory stage the product
is still an innovation. The sales volume in this stage is low because the product is still innovative
for consumers. The main aim of all business organisations is to enhance the sales and increases
profits. Companies bears higher costs, since in this phase there are high costs of production and if

20
there is available the substitute of the product then it involves more risks. In the introductory stage,
the promotion is aimed at innovators and early adopters.

2. Growth stage. As the product grows in popularity, it moves into the second phase of its life-
cycle, i.e., the growth stage. In the growth stage, the firms seek to build brand preference and
increase market share. During this stage the consumers try to use new product and vice-versa the
sales will start to grow expressively. At this stage buyers usually accept the new product and its
demand starts to increase rapidly. The firm’s objective is to increase market coverage in order to
attract large number of customers. Wider promotional tools are used to provide valuable
information of product to the prospective buyers. The other firms also pay attention to this product
and offer their own parallel products. Profitability begins to rise, firms use different promotional
components such as radio television newspapers etc. to communicate the information of product.

3. Maturity stage. During the maturity stage, the strong growth in sales diminishes. Competition
may appear with similar products. The fundamental objective at this point is to defend market
share while maximizing the profits. Firms enhances their production capacity and make different
changes to the product so that it can compete with the rival products. The profit of the enterprise
is reduced and grows slowly. The firms use aggressive strategies in order to survive in the market.
Production features may be enhanced to differentiate the product from that of competitors.

4. Decline stage. At this stage firms yield the product- reduces costs and continue to offer it,
possibly to a loyal niche segment. The marketers also use different strategies to maintain the
product, possibly regenerating it by adding quality, quantity and adding new features to retain the
market share. During this stage the profits of the firm drastically reduced because of various
external factors which are totally uncontrollable.

21
4.3. Curve of Product Life Cycle

Product life cycle at different stages can be represented graphically.

Graph: 1.2 Product Life Cycle Curve (Source: author)

This figure shows the old-style curve of the product life cycle. It designates the different periods
of product life cycle: introduction, growth, maturity, and decline.

22
There is also a perfect curve and the vilest one:

Graph 1.4. A perfect curve of the product life cycle (Source: author)

Graph 1.5. The vilest curve of the product life cycle (Source: author)
These graphs of perfect curve and vilest curve are not precisely. The curve of sales in the graphs
falls below zero at one point. Of course this cannot occur, since it would mean that the company
purchases its personal goods. By this way it also indicates the material costs of the company to
develop a new product, i.e. purchase of other goods (labor, technology, etc.).

23
4.4. SELECTION OF SPREADING METHODS
It is very important for the advertisers to select the appropriate channels of distribution for their
products and services in order to convey the messages to its prospective buyers. For this purpose
the advertisers must decide the media factor and its coverage, flexibility and appearance. The
firms should also kept into cost consideration regarding the selection of media. Following are the
detailed information about the criteria that must be considered:

1. Coverage Before selecting the any media the advertisers must take consideration its
media coverage. The firms should select those media channels which have wider
coverage. The study reveals that Internet, newspapers, television and radio are the most
effective media to influence the consumer buying behaviour.

2. Simple the most ingredient of an advertisement is that it should be presented in simple

language. The advertisers should avoid use of technical jargon so that people can easily
understand the message. Along with simple the advertisement should be eye catching
and should be capable of holding.

3. The impact the influence of advertising depends upon the media selection or
distribution channels. Broadcasting messages on radio covers wider areas of national as
well as international. The research had shown that TV ads are more effective as compared
to other means because it is able to combine sound, include color, and several other
factors. Therefore both illiterate as well as literate persons can understand the message.

4. Conviction value of the advertisement copy shall be clever to have ever long-lasting
impression on the reader, viewer and listener if the suggestions are supported by
convincing arguments. The reader should not have any disbelief on the quality of the
product or services. He should be fully convinced.

5. Suggestive the advertisement copy should be proficient of suggesting the reader about
the convenience and use of the product. Effective slogans can be used to give better
recommendations to the people.

24
Following are the main dissemination methods of advertising messages in order to reach
prospective consumers:
Media,
Direct mail
Outdoor advertising.
The media includes television, radio, internet, newspapers, magazines, journals and brochures.

Direct mail (direct post advertising) – direct-mail advertising is the process of sending offers or
promotions by mail to current customers. Direct mail campaigns give high return on investments
and even a higher ROI than paid ads. The business organisations know that direct-mail advertising
is one of the most effective and profitable ways to reach out new and existing customers.

Outdoor advertising- outdoor advertising includes any type of marketing done outdoors to grab
people’s attention. The most popular format is posters, billboards and light installations. Outdoor
is arguably the most creative picture for advertising because the most successful ads reflect the
imagination.

25
Table 1.1 Profiles of Major Media Types
Medium Advantages Limitations

Flexibility, timeliness, less expensive Short life, low quality, a small

Newspapers large circulation, recognition and audience of "secondary" readers,
broad acceptance. suitable only for the educated class.

More effective, suggestive, clarity High costs, too many other

Television of message, attractive higher reach. advertisements, less selective audience.

High frequency, cost effective, time Relatively high costs, limited coverage.
Direct mail efficiency, no competition,
personal appeal.

Mass character, wider coverage Suitable only for audio means,

Radio and demographic selectivity, low cost. more distraction as compared to TV .

Trustworthiness and prestige, Limited flexibility, expensive,

Magazines Attractive, visual quality and longer less coverage and few consumers.
life span.

Flexibility ,cost effective, good impact Limited appeal, lack of control,

Outdoor etc. high production costs etc.
advertising

26
4.5. SOURCES OF ADVERTISING

The Twenty-First century media revolution has brought about many changes in the way consumer
seek out, become interested in, and purchase goods and services. Not only do they have more
purchase choices but there are also more media vehicles utilized to search for and purchase goods
and services. Marketing professionals and advertising agencies recognize that now consumers are
in driver’s seat regarding the choice of media channels. Traditional metrics, such as reach and
frequency are no longer enough for selecting media to target messages for creating buyers in
addition to loyal customers.
Printed advertising
Print advertising is a form of advertising that uses physically printed media to reach prospective
customers. Print media still the hold the important position in the market field for the promotion
of goods and services. It also remains to be one of the most popular forms because it can reach a
wide target audience and is less expensive. Theses advertisements appear in newspapers,
magazines and brochures.

а) Advertising in the newspapers. Newspapers are the most popular form of media. They are
generally delivered at home, or available at newsstands, and it is the most inexpensive way to reach
a huge mass of people quickly. Advertisers can reach a very broad audience through newspapers
which offer great elasticity. For eras, newspapers have been responsible for reliable and in-depth
reporting on local, regional, national and worldwide issues every day. The advertisers may choose
the specific area to be covered and the advertisement can be placed in newspapers at very short
notice as compared with other media. However, I would like to tell more about what advertisers
usually take into account when choosing an appropriate newspaper for their advertisements and
what distinguishes newspapers from each other:
Parameters of newspapers release. The most important parameters are the frequency of publication
of the newspaper, its circulation, format and volume, availability of appendices and additional
issues.
Periodicity. Of course, the frequency of publication is taken into account by customers and
advertising distributors primarily because it regards the timing of bringing advertising to
consumers. Daily newspapers allow you to do with more efficiency. Weekly are more suitable for

27
advertising that needs to be re-published again.
Circulation. A newspapers circulation is the number of copies it distributes on an average day.
Despite the newer technologies like internet newspaper circulation is still effective.
Flexibility. Newspapers provide flexibility in advertising in the sense that advertisement campaign
can be initiated and stopped quickly.
Classified and display advertising in newspapers. In accordance with the existing rules,
advertisements posted in newspapers are usually subdivided into a display and classified. Display
advertising can be located almost at any page of the newspaper or exit in a form of appendices or
special advertising inserts.
Classified advertising. Classified advertising is a form of advertising which is particularly common
in newspapers, online and other periodicals which may be sold or distributed free of charge.
Classified advertisements are much cheaper than larger display advertisements used by businesses,
although display advertising is more wide spread. This type of advertisement is mostly posted by
common individuals in order to sell their single items.

b) Advertising in magazines
Many companies still use print magazines as a channel to engage consumers in the offline world.
The study reveals that 61% companies use print magazines as part of their marketing mix. The
quality of magazines reproduction is usually high. Consumers sometime keep individual copies
for long period of time; reread them or pass them on to other. Some magazines have prestige value.
The marketer can cover national or large regional markets at a low cost per contract (per individual
reached). Magazines generally offer high-quality printing of advertisement which helps to attract
the consumers towards the products. Magazines are typically kept around for a long period of time
and allows brands to stand apart in an overcrowded digital market and create lasting, memorable
engagement.
Classified and display advertising in magazines. Unlike classified ads, display ads are usually
demarcated with thin or thick lines that frame the ads. Display advertising is widely used as
compared to magazines. Display ads can come in a variety of sizes, including half and full-page
ads.

28
c) Outdoor advertising
Outdoor advertising involves the use of sign and bill-boards, posters or displays (such as those that
appear on a building’s wall) and electric spectacular (large, illuminated, sometime animated sign
and display). Outdoor advertising is particularly effective in metropolitan and other can use this
medium to bring the products to the attention of consumers or to remaining them of the product,
while they are on shopping trips or area disposed towards shopping. An outdoor advertisement is
usually brief and cannot fully inform about the company or product, so the acquaintance of
potential consumers with new goods through this media is not efficient enough. Outdoor
advertising services include hoarding/ billboard advertising, transit advertising (bus, train, taxi
etc.).

d) Electronic advertising

Electronic advertising is advertising that uses the internet and other forms of digital media to help
a business promote and sell goods and services of the companies. Television and radio is one of
the best examples of electronic media. In every stage of the day it’s involving the people. Whether
an individual is enjoying daily serials, cricket match, wrestling etc. advertisements are all around
and they directly or indirectly affects the buying decision processes.
a. Advertising on radio
The radio is a prominent vehicle of advertising in our country and accounts for a large sum of the
total advertising budget. Radio has the wider reach and frequency medium for communicating the
information. Radio’s variety of formats allows you to pinpoint your advertising on the stations that
best match the consumer’s interests. The main purpose of radio is to convey information from one
place to another through the intervening media (air, space) without wires. Moreover, it is being
used for communicating sound and television signals, radio is used for the transmission of data in
coded form. The business companies paid commercial radio stations for airtime and in exchange
the radio station broadcasts the advertiser’s commercial to its listening audience.
Radio advertising has many advantages:
 Radio advertisements delivered timely message to its listeners.
 It has wider reach and less expensive.
 Relay of speed is very fast.
 Selective targeting: radio stations already targets specific demographic and market
segments.

29
However, there are also some detriments:
 In radio advertising there is a lack of visual appeal.
 One way communication.
 Lack of attention and wide fragmentation.

b. Advertising on television
Television advertising medium combines sight and sound and has great influence on consumer
behaviour. Television advertising conveys the message promoting and aiming to market a products
or services. The major portion of revenue is generated by mostly private owned television
networks. The study also revealed that during 2010-2011 the number of commercials has grown
progressively, though the length of commercials has reduced. By using animated characters, an
advertisement may have a certain appeal that is difficult to achieve with actors or mere product
displays.
Classification of TV advertising. Modern TV advertising can be classified by three principles -
form of execution, distribution channel and implementation strategies.

4.6. ADVERTISING IN INDIA

Indian advertising was introduced by Dattaram and Company in 1905 from Gurgaon, an area in
Mumbai (Chunnwala and Sethia, 2011). The journey of Indian Advertising in Post-independence
India was classified into four key phases by an anthropologist, William Mazzarella. The first phase
began after the Indian independence from Great Britain (1947) and lasted till the early 1960s. The
Indian advertising during this period was a realistic presentation unified with overall lack of
ingenuity as it was still operated as the colony of British Empire. The second phase (1960-1980)
was known as an Indian professional identity independent of Great Britain as it stressed to
overcome the issues of the first phase. The third phase that began in the early 1980s focused on
creating the competent marketing channels other than creativity and innovative advertising that
would have an extensive contact all over the country. Subsequently, the fourth phase (1980-
present) is represented by high level of creativity and effective marketing mechanism. Nowadays
the Indian advertising has evolved from small scale to full-fledged industry with expected growth
rate of 15.5% year on year to Rs.57, 485 in 2016 which is hold up by positive industry sentiment
and a strong GDP growth rate of 7% and above.

30
Table: 1.2 Total Advertising expenditure in India

Year In Rupees (crore) Year on Year Growth (Percentage)

2006 18,946 21.2

2007 21,608 14.0

2008 23,356 8.1

2009 24,177 3.5

2010 29,609 22.5

2011 33,388 12.8

2012 35,074 5.1

2013 38,598 10.0

2014 43,491 12.7

2015 49,759 14.4

2016 57,485 15.5

Source: www.medianama.com

31
 Graph: 1.6
Advertising expenditure in India

Advertising expenditure in India

70000

60000
57482
50000 49759
43491
40000 38598
33388 35074
30000 29609
23356 24177
20000 21608
18946

10000

0 21.2 14 8.1 3.5 22.5 12.8 5.1 10 12.7 14.4 15.5

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Rupees in Crores Year on Year Growth (%age)

Advertising in India is getting tougher day by day as the competition goes very high. Advertising
agencies play a very vital role in creating advertise on the basis of information collected about
product. Among the sources of advertising, Television advertising is estimated to contribute the
highest advertising speed with a share Rs.27, 074 Crore, with 47.1% of the total followed by
newspaper with a share of 17,099 Crore, 29% of total. Digital advertising spend is projected to be
the third highest category in advertising spending with a share of Rs.7300 Crore,12.7% of the total
projected advertising spending. Conversely, of all the segments magazine advertisement is
expected to decline by 14.8% for the third consecutive year and contributes 1% of the total
advertising spend.

32
Table: 1.3 Media-wise Advertising expenditure in India 2016
Media In Rupees (Crore) Share by Segment (Percentage)
Television 27,074 47.1
Radio 2,195 3.81
Print 17,674 30.74
Cinema 510 0.88
Digital 7,300 12.7
Out of home 2,732 4.75

Source: www.medianama.com

The speedy development of technology and electronic media has brought out the fact that
television is the foremost and leading communication media for advertising which has the potential
impact unmatched by any other media. Comparing with other medium, television is more effective
medium due to its combined features of audio and video appealing both the ear and the eye.
Similarly, advertising through television appeals to both the illiterate as well as literate and this is
one of the reasons that the advertisers found it to be effective over the print media. The concert of
television advertising is quite satisfactory for over the years which is revealed by the fact that
within 2016, it will accounts for the majority of the total Indian advertising expenditure at 47.1%
with Rs. 27,074 crore even though it is expected to grow at marginally lower pace of 17.6%
compared with 18.98% in 2015.

33
5. ADVERTISING PSYCHOLOGY

5.1. Psychology of advertising

Advertisements are sometimes spoken of as the nervous system of the present competitive
business world. As our nervous is made to give us all the possible atmospheres from objects, so
the advertisement which is analogous to the nervous system must awaken in the reader as many
different kinds of pictures as the object itself can excite. In 1895, Harlow Gale was the first
psychologist to use theory and scientific methods to study advertising and the coaxing.

5.2. Manipulation in advertising

The center of any advertising technology is the guidance of consumer behavior. The serpentine
advertising intends to do that by using facts arguments and exercising with consumer’s emotions
and feelings in a misleading and pretended manner. Overestimation of the quality of product, false
arguments and emotional appeals are largely claimed used in manipulation through advertising.

34
RESEARCH DESIGN AND METHODOLOGY

Research is a diligent, dynamic and systematic process of inquiring in order to discover, interpret
and revive facts, events, behaviour or theories to make practical applications intended for the
benefit of the human society as a whole. Research methodology embraces the procedures
undertaken by the researcher to complete the research in order to attain the specified objectives
laid down by the study. The research methodology is of crucial importance because it assists the
researcher to identify the ways in which the research can be conducted. Some important factors
in research methodology include validity of research data, research ethics and the reliability of the
measured information. Research design refers to the planning and organising of the activities
which will enable the researcher to obtain the relevant data, evidence and information as part of
the research project. Research design is of immense importance as it helps the researcher in
smooth and efficient sailing through the research project. Moreover, it facilitates in yielding
maximum information by putting in minimum efforts and also confers maximum reliability of the
results. Research design not only deters misleading conclusions through the strenuous exercise
but also helps the researcher to define precisely his aims and objectives, population to be studied,
the nature of the measurements and the way of interpreting the results. This research is based on
descriptive research or quantitative research. . In this descriptive research Cross-sectional study
used to parallel demographical variables with approach of the respondent. There were several
demographic variables such as, Age, Gender, Educational Qualification, Family Income and
Satisfaction level of the consumers. This study identifies and evaluates the Sales promotions
activities adopted by soft drink companies to influence the behavior of customers. Factors
affecting consumer behavior towards soft drinks. Basically this research is describing the
population surveyed and its characteristic, so it is descriptive research.
On the basis of review of literature and identified research gap an attempt through this study
is made to study advertising effectiveness and its influence on consumer behaviour in soft drinks
in terms of the following objectives.

35
OBJECTIVES OF THE STUDY
1. To study the impact of advertisements on consumer buying behavior.
2. To study the consumer perception regarding the most effective media for Advertisements.
3. To analyze the relationship between the advertisement and the consumers buying behavior.
4. To examine the factors responsible for influencing consumers buying behavior.

HYPOTHESIS OF STUDY: The following assumptions/ hypothesis were set for the study in
order to validate the study:
1. H0: There is negative relationship between advertising and consumer buying behavior.
H1: There is a positive relationship between advertising and consumer buyer behaviour.
2. H0: There is no significant relationship between qualifications of the respondents and
influence of advertisement towards their buying decision.
H1: There is a significant relationship between qualifications of the respondents and
influence of advertisement towards their buying decisions.

NEED AND SCOPE OF THE STUDY

Advertising plays an important role to aware the general public about the product or services. The
soft drink market is highly competitive, and consumer advertising is a prominent influence in soft
drink purchase and consumption. Too aware about the public, advertisement is very effective to
tell about the products. As far as Indore division is concern there is a great demographic
diversification. Advertisements reach each place whether it is hill area or plane area in any
form whether it may be print, electronic or word of mouth etc. People Indore district speaks
different languages, have different cultures and various other practices that’s why every type
of advertisement is very effective because of reach ability of the newspapers, magazines,
television sets and internet facilities. As far as the advertiser concern, it is the duty of the advertiser
to make effective advertisement. In Indore district, every kind of people is living i.e. Low income,
Middle income and higher income people. Here every brand of soft drinks is available.

In terms of research the scope of the study refers to the parameters of the study within which the
study will be operating. In other words scope defines specific boundaries where the objectives,
knowledge, instructions or outcome of activities are found. This also determines the accepted

36
range of the study around which the method of investigation should be centered. In the present
context to understand the advertising effectiveness and its influence on consumer behaviour. The
area of the study comprises of Indore district. The study focus on the influence
of advertising, branding, and major factors influencing consumer behaviour on soft drink
companies. The scope also includes the effect of demographics on the customer satisfaction. This
work will help in understanding the behaviour of the customers towards soft drinks to predict about
their specific choices.
DATA SOURCES
The intention of the study is to perceive advertising effectiveness and its influence on consumer
behaviour on soft drinks with reference to Indore district. The study is based on the following
dimensions; advertising impact, customer satisfaction, factors influencing consumer behaviour,
brand loyalty, and demographics of the customers. For the above mentioned reasons, the study is
based on both primary data as well as secondary data.
Primary Data:
The present study is based upon the primary and secondary data, but primary data forms the
backbone of the study. A questionnaire would be designed so as to cover all the essential
questions regarding advertising and its influence on consumer buying behaviour.
Secondary Data:
The secondary data has been taken in the form of various websites, doctoral thesis, research
papers, books and research articles related to the topic.

PILOT STUDY: It was decided to conduct a pilot study for the following reasons:

1- To finalize the method of measuring advertising effectiveness (including testing and its

validity) this will be used in the main empirical research.

2- T o finalize the questionnaires to be used in the main empirical research.

3- T o gain familiarity with the field work and the problems that can occur at different

stages of the research.

The efforts were made to pre-test each and every dimension of the interview schedule. The pilot

study was conducted among the 50 consumers which consume Soft Drinks in district Indore and

37
accordingly the interview schedule was restructured and finalized after making some necessary

modifications on the basis of the experiences and feedbacks obtained in the pilot study. At the

beginning of the pilot study, a list of tentative hypothesis and information needs was made to

add in the preparation of the questionnaires. After several preparations of the questionnaires given

in appendix was finalized. The questionnaires were made only in English.

Sampling for the pilot study: Indore District was given as the geographic scope of the pilot

study.

Data analysis for the pilot study: An analysis was to be done on the computer with the help of
SPSS software. The efforts were made to pre-test each and every dimension of the interview
schedule. The pilot study was conducted among the 50 consumers which consume Soft Drinks in
district Indore and accordingly the interview schedule was restructured and finalized after making
some necessary modifications on the basis of the experiences and feedbacks obtained in the pilot
study.

SAMPLE DESIGN
The sampling method used by the researcher in this study is stratified random sampling. Where
the data was collected from the consumers of the soft drinks situated in Indore district. The sample
size will be used during the research is restricted only 600 between age group 15- 55 and the
area of the research is district Indore (M.P.).
STATISTICAL TOOLS AND TECHNIQUES USED IN THE STUDY
The data collected was rationally ordered and subjected to Statistical Package for Social Sciences
(SPSS). The data was consequently subjected to various statistical tests with the help of SPSS
software. The statistical data has been presented in the form of tables and graphs. The statistical
techniques used are Arithmetic mean, standard deviation, ANOVA, Chi square test, Regression,
Correlation.

38
ARITHMETIC MEAN

Arithmetic mean is derived by dividing the sum total of all observations by the total number of
observations. If the mean score value of the statements is high, it indicates that the existence
of the corresponding dimension is highly prevalent. On the contrary, lower mean value indicates
that the existence of corresponding dimensions is merely influencing the decision-making process
of the customers. Standard deviation helps the researcher to evaluate the significance of the mean
value. As the mean describes the central location of the data, the standard deviation describes the
spread of the same data from the central location. The more is the spread, the less accurate is the
value of mean. Therefore, the more is the value of standard deviation, the less is the significance
of the mean value or vice-versa.

COEFFICIENT OF CORRELATION

Correlation is a statistical technique which helps the researcher to understand the proximity
between two variables in order to comprehend the relationship between them. In other words,
correlation is directed towards measuring the degree of association between two variables and it
refers to any broad class of statistical relationships involving dependence between two variables.
The higher is the value of correlation between the variables, the more is the probability of one
variable explaining the changes in the other variable provided the significance value is less than
0.5. There are several correlation coefficients, often denoted by ρ or r, measuring the degree of
correlation. The most common of these is the Pearson coefficient of correlation, which is
sensitive only to a linear relationship between two variables. Other correlation coefficients have
been developed to be more robust than the Pearson coefficient of correlation. Usually, in simple
correlation between two variables the researchers are looking for a linear relationship. Correlation
is always between -1.0 and +1.0. If the correlation is positive, the variables are directly related
to each other whereas if the correlation is negative, the variables are inversely related to each
other. In the present study, correlation has been used to examine the relationship between
customer satisfaction, brand loyalty, demographics and pricing policy of the soft drink companies.

39
REGRESSION ANALYSIS
The term "regression" was coined by Francis Galton in the nineteenth century to describe a
biological phenomenon. The earliest form of regression was the method of least squares which
was published by Legendre in 1805 and by Gauss in 1809. A regression is a statistical analysis
assessing the association between two variables. Regression analysis is widely used for prediction
and forecasting. Moreover, it is also used to understand which among the independent variables
are related to the dependent variable and it explores the forms of these relationships. In restricted
circumstances, regression analysis can b e used to infer causal r e l a t i o n s h i p s between the
independent and dependent variables. The formula for regression is as under;

y = a + bx

Where:

x and y are the variables.

b = The slope of the regression line

a = The intercept point of the regression line and the y axis.
N = Number of values or elements
X = First Score
Y = Second Score
ΣXY = Sum of the product of first and Second Scores
ΣX = Sum of First Scores
ΣY = Sum of Second Scores
ΣX2 = Sum of square of First Scores

MEAN OPINION SCORE (MOS)

For discovering the perception of consumers towards the various statements on soft drinks, the
Five-Point Likert Scale has been used, on the basis of which Mean Opinion Score (MOS) and
Ranks were derived. There were six (06) statements in the Five point Likert Scale and the
reliability of the same is calculated as 99%.

40
ORGANISATION OF THE STUDY

The study has been completed in six chapters.

Chapter - I
The chapter I covers the introductory part and research design of the study. In the very first chapter
a brief overview is given about entire study. This part of the study also discusses information
regarding sample design, data source, statistical tools used in the study, limitations of the study
and the future relevance of the study.

Chapter - II
This chapter consists of the review of literature pertaining to the study area.

Chapter – III
This chapter deals with the adverti si ng effect iveness and m ethods of m easuri ng
effecti veness of advert isi ng .

Ch ap ter -I V
This chapter deals with consumer behaviour and major factors influencing consumer behaviour.

Chapter – V
This chapter is about analysis and interpretation of the results derived from applying various
relevant statistical tools and techniques to the data.

Chapter - VI
This is the last chapter of the study. It gives the summary of the research findings and highlights
the conclusion and suggestions emerging from the discussion.

41
LIMITATIONS OF THE STUDY

1. Low awareness level of customers regarding the various soft drinks offered by domestic and
multinational companies that might have influenced their responses.
2. The focus of research is only on advertisement influences on consumer buying behaviour
with reference to soft drinks rather than other influencing factors like price, packaging etc.
3. Majority of the findings are drawn based on Chi square test. The result of Chi square test
depends upon the way variables are categorized. Hence the limitation of Chi square test are
applied.
4. Sample size, cost and time limitations and the particularized nature of the study has
lead the researcher to restrict the scope of the study.
5. Some of the consumers were hesitant to furnish accurate information pertaining to
consumption, qualification, income etc.

FUTURE RELEVANCE OF THE STUDY

The present research is equally beneficial for students, academicians, companies and the people
related to the soft drink industry. Moreover, the scope of the study is open for the future research.
The researcher has made the following proposals for the same:
1. A separate study can be conducted to know the effect of pricing policy on perceive
product quality, and brand loyalty in the s o f t d r i n k b e v e r a g e industry.
2. A study can be conducted to evaluate the effect of demographics on brand loyalty of the
consumers of the soft drink industry.
3. This research has taken limited number of demographic variables as independent variables
(Necessity of advertisement, Pleasure, Dominance, Motivation etc.). Therefore, considering
more demographic variables, aspiring researchers can conduct research and may discover
interesting relationships.
4. Further, research can be conducted at the state and national level as this research has been
confined to Indore district only. Time spent, preferred time, frequency of consumption,
occasions etc. have been taken as variables for the measurement of advertisement influence
on consumer buying behaviour with reference to soft drinks. Adding more variables to this,
further studies can be conducted.

42