Consumers’ Preference for Brandy in Kathmandu Valley By Raj Maharjan Symbol No: 17220362 PU Registration Number: 2017-2-22-0288 November 24, 2019
Contents • Background • Objectives of the Study • Literature Review • Research Gap • Methodology • Data Analysis and Presentation • Conclusion and Recommendation
Background • Alcoholic beverage consumption is increasing becoming common. • Trending industry in world due to the growing increasing demand for alcoholic beverages in emerging countries like India, China, Indonesia and Singapore. • In 2017, global alcohol beverage market- $1324.1 billion (Business wire) • In 2025, global expected beverage market- $1684 billion (Business wire)
Objectives of the study General objective To understand consumer’s preference for brandy Specific objective • To identify customers preference on brandy consumption • To analyze factors determining brandy consumption • To suggest managerial implication for promotion of brandy.
Review of Literature Thematic Review Theoretical and Conceptual Review • Concepts: Brandy • Contingent Valuation Model • History of Alcohol consumption in • Theory of Reasoned Action Nepal • Engel Kollat Blackwell Model • Categorization of Alcohol Drinks • Hybrid choice Model • Categorization of Brandy • Hedonic Price Model • Brands of Brandy Available Worldwide • Consumer perception Factor Model • Conjoint Analysis
Empirical Studies Authors Method Countries Findings Recommendation Pettigrew & Ethnographic Hong Products symbolism important Reflect the culture and Charters approach Kong than taste considerations symbol on packing of (2009) product Bruwer & Self- South People prefer for those Facilitate with BOYB Huang (2012) administered Australia restaurants having BOYB facility questionnaire Barber et al. Survey and New Stated willingness to pay and Environmental tagline (2012) controlled Hamisper, the actual price paid was wide while launching new experiment USA on environmental product. product Bernabeu et Conjoint analysis Barcelona People prefer for wine having Promotion of product with al. (2016) good price and quality product good quality at reasonable price Mehta & Indepth Singapore Price, brand, taste, origin and Apply marketing strategy Bhanja interviews type of wine are considered by grouping people with (2017) by young Indian consumers similar preference
• Sustainable Development Goal • Sustainable Development Goal Estimated Costing • Liquor Act, 2031 • Industrial Enterprise Act, 2073 B.S (2016 A.D) • Consumer Protection Act, 2054 B.S (1997A.D.)
Research Gap • Only the large set of study have been conducted on the prevalence on alcohol beverages, study on wine preferences and on the marketing strategies. • Alcohol industry is the fastest growing industry in the world where the wide product segmentation can be made.
Conceptual Framework
Methodology Explanatory Quantitati Purposive Primary Research ve Sampling Data based Design Approach Awareness Index Binomial Logit Model
Theoretical Framework The linear regression model is specified as: U j = β′ j X i + ε j and U k = β′ k X i + ε k …………………………………………………………..(1) If a consumer decides to use brandy (i.e. j), it follows that the perceived benefit from brandy ‘j’ is greater than the benefit from any other alcoholic beverages i.e. ‘k’ which is depicted as: U ij (β′ j X i + ε j ) >Ui k (β′ k X i + ε k ), k ≠ j……………………………….........(2) The probability that a consumer will consume brandy j from the set of available alcoholic beverages could then be defined as follows; P(Y=1/X) = P (U ij > U ik /X) =P (β′ J X i + ε j − β′ k X i − ε k >0/X) =P (β′ J −β′k) X i + ε j −ε k >0/X) =P (β ∗ X i +ε ∗ >0/X) =F (β ∗ X i )………………………………………………..(3)
Analytical Framework
Consumers’ Awareness Index • Awareness level on brandy measured through 15 Yes/no questions carrying 1 marks for each correct response and converting it to 100%. Adequate Moderate If Awareness Score is Above 75% Inadequate If Awareness Score Ranges 50%-75% If Awareness Score Ranges Below 50%
Hypothesis of the Study • H1= There is no relationship between alcohol consumption and given explanatory variables • H2= There is no relationship between brandy consumption and given explanatory variables • H3= There is no relationship between the purchase of brandy and given explanatory variables. • H4= There is no relationship between the reference for brandy and given explanatory variables.
Variables and Expected sign Variables Description Value Expected Sign Age Age of the respondent +/- Gender Sex of the respondent +/- Edu Education Status - edu_level Received Level of Education - Monthly_income Average monthly income of the respondent + Marital_status Marital status of respondent +/- Family_con Respondents brandy consumption with family +/- Culture_brandy Brandy consumption on any occasion + Heard Repondents knowing of brandy name + Prefer_brandy Respondents preferred place for brandy consumption + Pc_brandy Respondents brandy consumption preference after dinner + Taste Respondents first priority for the taste during brandy + purchase
Variables Description Value Expected Sign Brandy_benefits Respondents knowledge on health benefits of brandy +/- B_content Alcohol content in brandy +/- F_terms Brandy familiarity terms +/- Brandy preference Respondents preference for brandy + Design Design of bottle at first priority while selecting +/- brandy Dis Discount and offer at first priority while selecting +/- brandy Price Price at first priority while selecting brandy +/- Advertisement Brandy purchase on the basis of advertisement +/-
Analytical Framework Research sub objective Research Questions Analytical Method To identify consumers preference What is the consumer Descriptive (frequencies, mean, for brandy preference for brandy among percentages, graphs, charts) people? To understand peoples knowledge What is the position of Awareness level index awareness level on brandy on brandy among the alcohol consumers? To identify the determining factors What are the factors considered Binary Logit Model by people while purchasing considered by people while selecting brandy? brandy among alcoholic beverage. To suggest managerial implication What are the strategies that are Descriptive (frequencies, mean, for promoting brandy on the basis being applied in beverage percentages, graphs, charts) of awareness level on brandy industry for promoting the knowledge identified product?
Study Area
Socio Demographics Alcohol Non alcohol Total consumers consumers 5% 1% 18% 133 22 155 Agriculture Industry 45% 31% Service Business 72 42 144 Others 205 64 269 Total Alcohol Consumption Frequency Sex Very frequently Frequently Neutral Less frequently Very less frequently Total Male 9 34 40 33 25 141 Female 5 7 16 16 30 74 Total 14 41 56 49 55 215
Consumer Preference for Brandy Most Preferred Alcoholic Beverage Sex Wine Brandy Whisky Rum Gin Vodka Scotch Others Total Male 27 24 61 16 6 27 10 4 171 Female 43 17 15 3 1 10 2 3 91 Total 70 41 76 19 7 37 12 7 262 Brandy Preference 150 100 50 0 Male Female Alcohol Consumption Brandy Preference Brandy Consumption Brandy Purchased in Past six month
Factors Considered While Purchasing Brandy Ranking Factors 1 2 3 4 5 6 7 Easy availability 42 48 50 45 45 3 4 Price 80 98 36 24 9 6 4 Discount/offer 9 39 62 56 41 3 6 Taste 98 42 55 37 20 3 0 Advertisement 6 8 16 37 39 15 10 Brand name 28 18 39 59 58 14 1
Overall Awareness Level Brandy Intrinsic Extrinsic Overall Consumption Factors Factors Awareness Awareness Awareness Awareness Level Level Level Level Less Aware 107 57 268 199 Moderate 156 188 0 68 Aware High Aware 6 24 1 2 Total 269 269 269 269
Binary Logistic Regression
Findings • No difference on alcohol consumption between educated and uneducated person • Brandy name heard significant with alcohol consumption and brandy consumption. • Less preference for brandy and brandy consumption • Not highly aware about the brands of brandy available in market. • Change in brand for having new taste and rise in price.
Recommendation • Production of brandy with low alcohol content • Wide promotion of brandy in Nepalese society • Establishment of micro brewery
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