Evaluation of Consumers’ Behaviour on Brand Loyaltyand Switching of Competitive Soda Products

Abstract

This study examines the brand loyalty principle in three (3) bottling soda drinks on the basis of consumers’ choice based on cost, product quality and availability determinant factors. The data collected from respondents through a questionnaire were analyzed on the basis of ChapmanKolmogorov transition probability matrix for Markov processes for 1st ,2nd and 3rd steps.. The results revealed varying retention and switching patterns as both the upward and downward diagonals decreases as the step increases though Pepsi has the highest retention likelihood under cost and product quality determinant factors with a differential margin of about 14% to Coke while Limca takes the least. Pepsi maintains a margin of close to 30% ahead of Coke while Limca assumes the least under consumers’ choice based on product quality. The retention is higher in Coke based on availability with a margin of approximately 8% to Pepsi which is 4% higher than Limca.It was also observed that probability of switching from Pepsi to coke is higher than switching to Limca at the various steps under all the choice determinants factors. The computation of the markets share for the brands based on the initial probabilities under choice determinants factors revealed Pepsi as the dominant brand under cost and product quality considerations while Coke dominates under availability factor while Limca constantly maintains the rare both in terms of the retention and switching as well as market shares