FACTORS AFFECTING THE DEMAND FOR INPUTS OF SOFT DRINKS INDUSTRIES: A CASE STUDY OF CENTURY BOTTLING CO. LTD

ABSTRACT

The study was carried out at century bottling company with the purpose of determining the factors affecting the demand for inputs of soft drinks industries. The specific objectives included: to determine the factors influencing the demand of inputs, to examine the challenges faced by century bottling co. ltd in acquiring inputs for soft drinks and to assess the solutions to the challenges faced in acquiring inputs for soft drinks.

A descriptive study design was adopted for this study where both quantitative and qualitative methods of data collection were used. The study used questionnaire method and interview guide to collect data from 52 as the sample size having management/staff.

The study found out that the major factors influencing demand for inputs include; market share, changing societal concerns, attitudes, and lifestyles, prices of inputs, buyers demand for soft drinks and profitability in the soft drink industry.

Also, the challenges facing Century bottling company in acquiring inputs for soft drinks include; competition from other industries, increased customer complaints, inflation, high ordering costs, non availability of products and high transport costs.

Therefore, the study suggested that Century bottling Co. Ltd should forecast demand, strive to obtain higher brand loyalty in all other brands, purchasing planning, introduce more brands, meet consumer demands, increase the global market share and increase their marketing and advertising.

It was recommended that the organization should sustain or increase the global market share. This is very important to sustain because it is the source of the majority of their profits. If they lose global market share, their profits will decline dramatically.

CHAPTER ONE

INTRODUCTION

1.1. Background to the study

The beverage industry producing; carbonated, non-carbonated and nonalcoholic soft drinks, relies on retail businesses to provide end distribution points for customers, (Kyamutetera, April 2009; Ohairwe, 2008). These retailers, constituting over 80% of Uganda’s businesses, practice arm’s length vertical collaboration without optimizing information sharing, decision synchronization and incentive alignment, (Simatupang and Sridharan, 2004). This could explain their lucking performance in the Physical Distribution Service Quality (PDSQ) of their demand chains. Considering the necessity of soft drinks to the healthcare sector, the general community and the industry’s contribution to the economy as a source of revenue and employment, the manufacturers and distributors have failed to take advantage of their collaborations to ensure timely delivery, availability of products and development of a reliable physical distribution system ; Ntayi. et al (2009).

The demand chains are characterized with long delivery cycle times, non availability of products in certain parts of the country and increased customer complaints, (Durgavich, Nabirumbi and Ochaka, 2008; Rabinovich and Bailey, 2004). These indicators of inefficiency in the distribution system were also confirmed by the CEO – Century Bottling Ltd, Mr. Basil Gadios during an interview with the CEO Magazine, (Kyamutetera, April 2009) where he revealed that there was an actual need to improve the PDSQ of soft drinks to the far corners of the country.

Manufacturing is the use of equipments, tools and human resource to produce goods for sale and use purpose. Normally, the manufacturing industry can be divided into three classifications, high technology manufacturing which includes electronic equipments, communication machines and computers. Manufacturing industry includes clothing, metals processing, chemical, furniture, food and transportation equipments manufacturing.

In puts are resources such as people, raw materials, energy, information, or finance that are put into a system manufacturing plant to obtain a desired output. They are resources that a company requires in an attempt to generate an economic profit by producing goods and services.

Coca-Cola, the product that has given the world its best-known taste was born in Atlanta, Georgia, on May 8, 1886. Coca-Cola Company is the world’s leading manufacturer, marketer and distributor of non-alcoholic beverage concentrates and syrups, used to produce nearly 400 beverage brands. It sells beverage concentrates and syrups to bottling and canning operators, distributors, fountain retailers and fountain wholesalers. The Company’s beverage products comprises of bottled and canned soft drinks as well as concentrates, syrups and not-ready-to-drink powder products. In addition to this, it also produces and markets sports drinks, tea and coffee. The Coca- Cola Company began building its global network in the 1920s. Now operating in more than 200 countries and producing nearly 400 brands, the Coca-Cola system has successfully applied a simple formula on a global scale: “Provide a moment of refreshment for a small amount of money- a billion times a day.”

In order for soft drink companies to continue to grow and increase profits they will need to diversify their product offerings. So in order to compete with the substitutes industry, Coca-Cola has diversified from just carbonated drink industry to other substitute and so have other brands like Pepsi, Dr pepper/Snapple. Although processing is still considered low due to limited extraction of juice and packing, the positive strides witnessed in the last two years signal improvement as both juice production and farmers’ involvement has grown.

On the other hand, Century Bottling Company (CBC), manufacturers of Coca Cola products introduced Minute Maid juice brand after investing about Shs39 billion ($15 million) in a juice processing line at its Namanve plant. According to Mr Norton Kingwill, the CBC country manager, Minute maid was introduced as a result of a steady growth in fruit juice consumption and the need to widen the variety of soft drinks. “Coca Cola has been manufacturing Minute Maid in other countries.

1.2 Problem statement

Century bottling company is making huge investments in increasing manufacturing capacity while steadily increasing its marketing and advertising focus. Despite, the company registering an increase in profits over the years amidst challenges in various areas, the level of production in the industry has reduced which may be attributed to availability of inputs (Kyamutetera, 2009). Thus, the study sought to determine the factors affecting the demand for inputs of soft drinks industries.

1.3 Objective of the study

The overall objective was to determine the factors affecting the demand for inputs of soft drinks industries while the specific objectives include:

1. To determine the factors influencing the demand of inputs
2. To examine the challenges faced by century bottling co. ltd in acquiring inputs for soft drinks
3. To assess the solutions to the challenges faced in acquiring inputs for soft drinks

1.4 Research questions

1. What factors influence the demand of inputs in soft drinks industries?
2. What challenges are faced by century bottling co. ltd in acquiring inputs for soft drinks?
3. To assess the solutions to the challenges faced in acquiring inputs for soft drinks

1.5 Scope of the study

The study investigated the factors affecting the demand for inputs of soft drinks industries. More emphasis was put on identifying the factors that affect the demand for inputs and the challenges faced and solutions in acquiring inputs for soft drinks. The study was carried out at century bottling company. This is because it is a soft drink industry. The study was carried out for a period of three month in 2017. The study focused on factors that affect the demand for inputs for the past five years (2012-2016).

1.6 Significance of the study

To the government, the findings would help them identify areas that need improvement as regards to factors that affect the demand for inputs.  To policy makers; the study findings would be of great benefit in formulation and implementation of policies related to improving access to inputs for soft Drinks.  The outcome of this study is expected to benefit many manufacturing industries because it may highlight the problems manufacturing industries face due to limited access to inputs for production. The study would help other researchers carrying out the research on other related problems as references to factors that influence demand for inputs, challenges faced in acquiring inputs for soft drinks and the solutions to the challenges faced.

CHAPTER TWO

LITERATURE REVIEW

2.0 Introduction

This chapter presents related literature and it is presented in themes according to the research objectives.

2.1 Factors influencing the demand of inputs

Market size, growth rate and overall profitability are three economic indicators that can be used to evaluate the soft drink industry. The market size of this industry has been changing. Soft drink consumption has a market share of 46.8% within the non-alcoholic drink industry. Data monitor (2005) also found that the total market value of soft drinks reached $307.2 billion in 2004 with a market value forecast of $367.1 billion in 2009. Further, the 2004 soft drink volume was 325,367.2 million liters. Clearly, the soft drink industry is lucrative with a potential for high profits, but there are several obstacles to overcome in order to capture the market share.

The growth rate has been recently criticized due to the U.S. market saturation of soft drinks. Data monitor (2005) stated, “Looking ahead, despite solid growth in consumption, the global soft drinks market is expected to slightly decelerate, reflecting stagnation of market prices.” The change is attributed to the other growing sector s of the non-alcoholic industry including tea and coffee (11.8%) and bottled water (9.3%). Sports drinks and energy drinks are also expected to increase in growth as competitors start adopting new product lines.

Profitability in the soft drink industry will remain rather solid, but market saturation especially in the U.S. has caused analysts to suspect a slight deceleration of growth in the industry (2005). Because of this, soft drink leaders are establishing themselves in alternative markets such as the snack, confections, bottled water, and sports drinks industries (Barbara Murray, 2011c). In order for soft drink companies to continue to grow and increase profits they will need to diversify their product offerings.

The geographic scope of the competitive rivalry explains some of the economic features found in the soft drink industry. According to Barbara Murray (2011c), “The sector is dominated by three major players…Coca-Cola is king of the soft drink-empire and boasts a global market share of around 50%, followed by PepsiCo at about 21%, and Cadbury Schweppes at 7%.” Aside from these major players, smaller companies such as Cott Corporation and National Beverage Company make up the remaining market share. All five of these companies make a portion of their profits outside of the United States.

The Brand Keys’ Customer Loyalty Leaders Survey (2004) shows the brands with the greatest customer loyalty in all industries. Diet Pepsi ranked 17^th and Diet Coke ranked 36^th as having the most loyal customers to their brands. The new competition between rival sellers is to create new varieties of soft drinks, such as vanilla and cherry, in order to keep increasing sales and enticing new customers (Murray, 2011c).

The buyers of the Coca-Cola and other soft drinks are mainly large grocers, discount stores, and restaurants. The soft drink companies distribute the beverages to these stores, for resale to the consumer. The bargaining power of the buyers is very evident and strong. Large grocers and discount stores buy large volumes of the soft drinks, allowing them to buy at lower prices. Restaurants have less bargaining power because they do not order a large volume. However, with the number of people are drinking less soft drinks, the bargaining power of buyers could start increasing due to decreasing buyer demand (Murray, 2011a).

Suppliers for the soft drink industry do not hold much competitive pressure. Suppliers to Coca-Cola are bottling equipment manufacturers and secondary packaging suppliers. Although Coca-Cola does not do any bottling, the company owns about 36% of Coca-Cola Enterprises which is the largest Coke bottler in the world (Murray, 2011a). Since Coca-Cola owns the majority of the bottler, that particular supplier does not hold much bargaining power. In terms of equipment manufacturers, the suppliers are generally providing the same products. The number of equipment suppliers is not in short supply, so it is fairly easy for a company to switch suppliers. This takes away much of suppliers’ bargaining power.

The buyers of the Coca-Cola and other soft drinks are mainly large grocers, discount stores, and restaurants. The soft drink companies distribute the beverages to these stores, for resale to the consumer. The bargaining power of the buyers is very evident and strong. Large grocers and discount stores buy large volumes of the soft drinks, allowing them to buy at lower prices. Restaurants have less bargaining power because they do not order a large volume. However, with the number of people are drinking less soft drinks, the bargaining power of buyers could start increasing due to decreasing buyer demand (Murray, 2011a).

2.2 Challenges faced by soft drinks industries

Despite the heavy growth indicators of Soft Drink Industry, condition is very grim in carbonated soft drink sub segment. It has lost sales to healthier beverage options such as flavored waters, juices and health drinks. Carbonated Soft drink consumption is on a decline in developed countries as consumers switch to healthier alternatives such as juices, Ready-to-Drink (RTD) teas, RTD coffee, water mixers etc.

Moreover, soft drinks are prone to higher taxation due to their unhealthy nature. Hence, volume consumption is on a decline in the U.S. and Europe. Developing nations, on the other hand, offer tremendous potential in terms of volume growth. Soft drink consumption (per capita) in countries like China, India and Brazil is still only a fraction of what it is in the developed world. Consumers have been shifting to natural and healthier beverages with less sugar and calorie content due to the health risks associated with sugary drinks.

The diet counterparts have fared even worse, with the artificial sweetener aspartame being criticized for causing sugar cravings, dehydration, weight gain and even heart diseases. Health and wellness concerns have further caused a 7% decline in diet soda consumption in the domestic market in the first quarter of 2014.

The Coca-Cola Company calls its carbonated beverage category sparkling beverages. Over the past few years, sparkling beverages have come under severe criticism from health agencies and consumers. These drinks, better known as CSDs (carbonated soft drinks), have been criticized for their high sugar content and caffeine.

Health agencies have also accused the drinks of causing several diseases, including obesity, diabetes, and osteoporosis. Consumers are slowly moving away from CSDs to still beverages.

Coca-Cola’s still beverage portfolio includes noncarbonated beverages such as flavored water, juices, ready-to-drink tea, coffee, and sports drinks. “Sales of carbonated soft drinks slid for the tenth straight year in 2014 as Pepsi and Coca Cola each posted modest declines, according to a key industry report that showed volume has now settled to levels last seen in the mid-1990s.

2.2 Solutions to the challenges faced by soft drinks industries in acquiring inputs

The soft-drinks industry is fully saturated with competitors. Also, the industry is no longer expanding, and market share is actually decreasing as more consumers are looking to healthier options. By continually introducing new products, Coca-Cola was able to increase their profits and allow the company to continue to grow. Also, having a diverse product line will make the corporation very stable, which is appealing to investors and creditors.

According to Sicher (2009), strong growth in demand in emerging economies: soft drink industries are already well established in key geographic areas. The companies’ strong foothold in these markets, positions it perfectly for leveraging market level growth in these economies. The companies are also focusing on scaling up operations in emerging economies through wider collaborations with bottlers. Bottlers are making huge investments in increasing manufacturing capacity, while the companies are steadily increasing their marketing and advertising focus.

Kyamutetera (2009) advances that trying to sustain or increase the global market share. Companies should be well-established globally. This is very important to sustain because it is the source of the majority of their profits. If they lose global market share, their profits will decline dramatically.

According to (Ntayi, 2009) to maintain and try to increase their brand loyalty, companies should strive to obtain higher brand loyalty in all other brands. The brand loyalty is important because it will allow sustaining profits and maintaining their market share.

Companies are using different strategies to grab the bigger chunk of the market. They are following a two-fold strategy in this respect:  Increased Marketing Spend by as much as 10% in 2011 in most companies.  The companies are rolling out products flavored with stevia, a natural low-calorie sweetener (Nabirumbi and Ochaka, 2012).

CHAPTER THREE

RESEARCH METHODOLOGY

3.0 Introduction

This chapter presents the research design, area of the study, study population, sample size, sample techniques, the data collection instruments, the procedures of data collection, ethical considerations, and data analysis.

3.1 Research Design

A descriptive research design was used. A quantitative design, combined with qualitative method was used for this study. Qualitative approach involves an unstructured approach to inquiry and allows flexibility in all aspects of the research process. It is more appropriate to explore the nature of a problem, issue or phenomenon without quantifying it. Its main objective is to describe the variation in a phenomenon, situation or attitude like description of an observed situation, or opinions. Quantitative research is the systematic empirical investigation of observable phenomena through statistical, mathematical or computational techniques. The research used this method because it produces information only on the particular cases studied.

3.2 Area of study

The study was carried out at century bottling company. This is because it is a soft drink industry. This area was chosen because it was accessible; it was also convenient for easy and cheap data collection.

3.3 Population of the Study

According to Baron, (2011), this constitutes people-individuals, organizations, groups, communities or other units that provide information or to collect information about for the study. The target population was comprised of 60 respondents both male and female.

3.4 The Sample Size

The sample refers to a few items selected from the universe or population for study purposes, (Baron, 2011). The sample size would consist of 52 respondents from the study area. It is determine based on the Krejcie and Morgan’s sample size calculation which same as using the Krejcie and Morgan’s sample size determination table. The sample size determination Table 3.1 is derivative from the sample size calculation which expressed as below equation (Krejcie and Morgan, 1970). The Krejcie and Morgan’s sample size calculation was based on p = 0.05 where the probability of committing type I error is less than 5 % orp <0.05.

S=

Where,

s = required sample size.

X²=the table value of chi-square for 1 degree of freedom at the desired confidence level (0.05 = 3.841).

N = the population size.

P = the population proportion (assumed to be 0.50 since this would provide the maximum sample size.

d = the degree of accuracy expressed as proportion (0.05).

Table 3.1: Showing Sample size

Adapted from Krejcie, R.V & Morgan, D.W (1970)

3.5 Sampling Procedures

According to Baron, (2011), sampling is a definite plan determined before data collection for obtaining a sample from a given population. It involves three decisions: who to be sampled, how many people to sample, and how to obtain the sample. The following sampling techniques were used. Purposive Sampling involves deliberate selection of particular units of the population for constituting a representative sample (Baron, 2011). It involves convenience and judgemental sampling. Judgmental sampling or purposive sampling – The researcher chose the sample based on who she thought was appropriate for the study.

3.6 Data source

The data collected was primary and secondary in nature. Primary data was collected from respondents through the use of questionnaires and interview sessions. The secondary data was collected from Library, research reports, journals, articles inform of literature review which provided information related to the study.

3.7 Data Collection Instruments

The study involved the following instruments;

3.7.1 Interviews

The researcher strived to get first-hand information by making appointments with individual respondents to answer questions related to the study topic. Semi-structured interviews were used to generate additional information from the respondents. This involved a more interactive interface with staff. The interview guide was used as an instrument of data collection because it helps the researcher to acquire information which would have if using other methods and it saves time for the researcher and the respondents since only key questions are asked.

3.7.2 Questionnaire

Questionnaires was used to collect data from key informants mainly because they can read and write, they may have busy schedules thus not interfering with them and can answer at their convenient time. Questions were constructed in simple English that can easily be interpreted. They was taken to respondents by the researcher and picked at an appointed date.

3.8 Procedures of Data Collection

The researcher was given a go ahead by the University Supervisor to go to the field to collect data. An introduction letter and a valid identity card (ID) were presented to the administration to clarify that the researcher is a student of Kyambogo University.  With the help of a lecturer, the student designed research tools which include; interview guides and questionnaire.  They was discussed with the colleagues to verify their validity for the case of staff members and clients, the researcher met with the respondents at their places of work, the researcher met them between 4:00 – 5:00 pm because this was the time when most of the respondents was available after their work. Some clients were visited during working hours with the help of a staff member. After data was collected, it was analyzed.

3.9 Quality Control

The quality of the research design that can be checked by considering the validity of the study, reliability of the data and instruments of data collection as well as the generalization ability of the study are described below.

3.9.1 Validity of research instruments

The researcher administered the questionnaire and interview guides on a small group of respondents to examine the effectiveness, relevance and appropriateness of the language to be used. The questions were posed using pilot testing methods to test for validity. Adjustments and corrections were made by the supervisor before the questionnaires and interview guides were finally administered to the rest of the respondents.

3.9.2 Reliability of the Study

Reliability is defined as the degree to which measures are free from error and therefore yield consistent results and applies to a measure when similar results obtained over time and across situations. When the outcome of a measuring process is reproducible, the measuring instrument is reliable. When conducting research, the researcher tried to act as neutral as possible in order to avoid being bias. The researcher was also conscious about the type of questions to ask.

3.10 Data Processing, Presentation and Analysis

The data was qualitatively analysed. It involved identifying the major themes arising from the respondents’ answers; assigning codes to these themes; classification of the major responses under the main theme; and integrating the responses into the report in a descriptive and analytical manner. Quantitative data was analyzed to give percentages, and statistical figures. For the analysis, Microsoft Excel statistical packages were used. The researcher developed the data entry templates supervised by the researcher. Once the questionnaires are checked for completeness and correct recording, it was then entered into the developed database for subsequent analyses. The researcher validated entries through regular checks to ensure data was recorded accurately.

3.11 Ethical Considerations

The researcher collected data upon seeking respondents’ consent after revealing the type of information needed and the purpose to avoid potential concealment of vital information.

The researcher also maintained confidentiality of respondents’ information; and reported the true findings of the study without any bias.

3.12 Limitations of the study

The study involved the following constraints;

The time allowed to do this research was not enough to allow exhaustive study and obtained all the essential information for much more suitable conclusions.

The researcher was limited by financial resources such as transport costs and stationery to carry out her research effectively.

3.13 Delimitations of the study

The study limitations were overcome as follows;

The problem of limited time was minimized by putting much effort on this research so as to meet the deadline.

Also in an effort to mitigate a challenge of limited financial resources, the researcher sourced for funds from a friends, relatives and parents.

CHAPTER FOUR

PRESENTATION AND DISCUSSION OF FINDINGS

4.0 Introduction

The study looked at the factors affecting the demand for inputs of soft drinks industries. The findings from the study were presented and analyzed orderly based on the formulated study objectives. This was made possible with help of computer packages MS word and Excel where by tables, graphs and pie-charts were generated.

The chapter begins by presenting the biographic characteristics of respondents in terms of gender; age, education levels, department, position and period of work. The study there after discusses findings as per the formulated objectives of the study.

4.1 Background information of the respondents

Under the gender distribution of respondents, the study was delighted with both male and female respondents as shown in the table below;

Figure 4.1: Gender of Respondents

Source: Primary Data

According to figure 4.1 above, 51.67% majority of respondents were male while 48.33% were women. This implies that the organization is gender sensitive since all categories of people were employed by the organization.

Table 4.1: Age bracket of Respondents

Source: Primary Data

From the table above, (46.2%) were in the age bracket of 31-40 of the respondents who were 41 and above, (17.3%) were in the age bracket of 18-30years. From the study majority of the respondents were in the age group between 31-40 years. This can be explained to the fact that it’s mainly the adults in this bracket that are married.

Figure 4.2: Highest Level of education

Source: Primary Data

From figure 4.2 above, majority of respondents constituting 46.67% were diploma holders, 28.33% of them acquired 1^st degree and 25% of the respondents had acquired secondary level. This justifies that the organization recruits, maintains and retains high qualified human resource to fill the positions of the organization which implies that the selected sample had the capacity to avail the researcher with reliable and appropriate information on the topic under study.

Figure 4.3: Period of Work

Source: Primary Data

According to the figure 4.3 above, majority of the respondents (50%) had been in the organization for less than 2years while 40% of them had been in the organization from 2-5years and 10% of the respondents have stayed in the organization for 6-10years. This shows that the working experience for the categories of workers was enough to get conclusive results, since it’s assumed that by virtue of their positions, they know about the variables under study.

Table 4.2: Position in the organization

Source: primary Data

According to the table above, majority of the respondents (36.5%) were from the lower management, 30.8% of them were non managerial staff, 25% of the respondents were in middle management and only 7.7% of them were in top management. It is important to note that these respondents’ positions in the organization as it would highlight the information given depending on their positions.

4.2 Factors influencing the demand of inputs

The study sought to factors influencing the demand of inputs at Century bottling Co. Ltd. Results were obtained and are presented below;

Table 4.3: Factors influencing the demand of inputs

Source: Primary Data

According to table above, majority of the study respondents 32 (61.5%) agreed with profitability in the soft drink industry while 17 (32.7%) of them strongly agreed, 02 (3.8%) of the respondents were not sure, 01 (1.9%) of the study respondents disagreed and no respondent strongly disagreed. Since the majority of the respondents 49 (94.2%) were positive implies that profitability in Century bottling co. ltd has influenced demand for soft drinks.

Majority of respondents 24(46.2%) strongly agreed with prices of inputs, 14(26.9%) of them agreed, 8(15.4%) of the study respondents disagree, 5(9.6%) strongly disagree while 1(1.9%) of the respondents were not sure. However, most of the responses 38(73.1%) agreed implying that prices of inputs has to some extent influenced the demand for inputs in Century bottling co. ltd.

The table above also indicates with most respondents 19(36.5%) strongly agreed that new entrants in the industry, 12(23.1%) of the respondents agreed, 11(21.2%) of the respondents disagreed while 7(13.5%) strongly disagreed and only 03(5.8%) of the study respondents were not sure. This implies that since the majority 31(59.6%) agreed, new entrants in the industry has influenced demand for inputs of soft drinks in Century bottling co. ltd.

Also majority of respondents 13(25%) strongly agreed with brand name loyalty and 11(21.2%) agreed as compared to 11(21.2%) of them who strongly disagreed and 8(15.4%) of the respondents who disagreed while only 9(17.3%) of the respondents were not sure. Majority 24(46.2) agreed while 19(36.5%) opposed implying that brand name loyalty in Century bottling co. ltd has also influenced demand for inputs of soft drinks.

Furthermore, findings in table above indicate with most respondents 21(40.4%) strongly agreed that buyers demand for soft drinks and 01(1.9%) of them agreed as compared to 10(19.2%) of the respondents disagreed and 06(11.5%) of the study respondents strongly disagreed while 14(26.9%) of the respondents were not sure. This implies that at buyers demand for soft drinks has influenced demand for inputs of soft drinks since 22(42.3%) agreed.

Most respondents 36(69.2%) strongly agreed with market share and 9(17.3%) of the respondents agreed compare to those who concurred, 7(13.5%) of the respondents disagreed and no respondent strongly disagreed or were not sure. Since majority 45(86.5%) agreed implies that in most cases, market share has influenced demand for soft drinks at Century bottling co. ltd.

From results, 41(78.8%) strongly agreed with changing societal concerns, attitudes, and lifestyles and 5(9.6%) agreed as compared to 2(3.8%) of the respondents who disagreed and 1(1.9%) of them strongly disagreed and only 3(5.8%) of the respondents were not sure. Most responses 46(88.4%) of the respondents were positive implies that in Century bottling co. ltd, changing societal concerns, attitudes, and lifestyles have influenced demand for soft drinks.

Fewer respondents 4(7.7%) strongly disagreed with growing consumer preferences and 14(26.9%) of them disagreed compared to those who concurred 19(36.5%) strongly agreed and 11(21.2%) of them agreed while only 4(7.7%) were not sure implying that growing consumer preferences have influenced demand for inputs of soft drinks in Century bottling co. ltd as 30(57.7%) agreed.

According to table above, majority of the study respondents 27(51.9%) agreed with size of the organization and 14(26.9%) strongly agreed as compared to 6(11.5%) of the respondents who strongly disagreed and 5(9.6%) disagreed. This implies that size of the organization is another factor that has influenced demand for inputs in Century bottling co. ltd as shown by 41(78.8%) of the respondents).

Majority of respondents 20(34.5%) agreed with able to recognize consumer wants and needs, followed by 13(25%) of the respondents who strongly disagreed, 10(19.2%) disagreed while 07(13.5%) of the study respondents strongly agreed and only 2(3.8%) of the respondents were not sure implying that ability to recognize consumer wants and needs in Century bottling co. ltd has also influenced demand for inputs of soft drinks.

4.3 Challenges faced by Century Bottling co. ltd in acquiring inputs for soft drinks

The study sought to examine the challenges faced by Century Bottling co. ltd in acquiring inputs for soft drinks. Results were obtained and are presented below;

Table 4.4: Challenges faced by Century Bottling co. ltd in acquiring inputs for soft drinks

Source: Primary Data

From Table above, findings show that most respondents 28(53.8%) strongly agreed with higher taxation, 11(21.2%) of them agreed compared to 9(17.3%) who strongly disagreed and 4(7.7%) disagree while only no respondents were not sure. Majority 39(75%) agreed implying that high taxation on soft drinks has increased the general operational cost in Century bottling co. ltd.

Majority 31(59.6%) of the respondents strongly agreed with high ordering costs, 12(23.1%) of them agreed while 4(7.7%) of the respondents disagreed, 3(5.8%) of them strongly disagreed and only 1(1.9%) were not sure. Since majority 43(82.7%) agreed implies that in most cases, high ordering costs has been a major challenge faced by Century bottling co. ltd in their pursuit to acquire inputs for their soft drinks.

From results, 41(78.8%) strongly agreed with competition from other industries and 5(9.6%) agreed as compared to 2(3.8%) of the respondents who disagreed and 1(1.9%) of them strongly disagreed and only 3(5.8%) of the respondents were not sure. Most responses 46(88.4%) of the respondents were positive implies that in Century bottling co. ltd, competition from other industries have made it difficult for Century bottling co. ltd to acquire inputs of soft drinks.

Fewer respondents 4(7.7%) strongly disagreed with changing consumer preferences and 14(26.9%) of them disagreed compared to those who concurred 19(36.5%) strongly agreed and 11(21.2%) of them agreed while only 4(7.7%) were not sure implying that changing consumer preferences have caused problems for Century bottling co. ltd in relation to meeting the changing customer preferences as 30(57.7%) agreed.

Finally from the table 4.5 above, majority 49(94.2%) of the respondents strongly agreed with inflation and only 03(5.8%) of the study respondents agreed. However, no respondent strongly disagreed, disagreed or were not sure implying that in Century bottling co. ltd, as a result of inflation the organization has faced several difficulties in acquiring inputs for soft drinks as the prices keep on changing as 52(100%) agreed.

According to table above, majority of the study respondents 27(51.9%) agreed with high transport costs and 14(26.9%) strongly agreed as compared to 6(11.5%) of the respondents who strongly disagreed and 5(9.6%) disagreed. This implies that increasing transport costs have hindered the organization in acquiring inputs for soft drinks as the general operational costs increase.

Majority of respondents 20(34.5%) agreed with long delivery cycle times, followed by 13(25%) of the respondents who strongly disagreed, 10(19.2%) disagreed while 07(13.5%) of the study respondents strongly agreed and only 2(3.8%) of the respondents were not sure implying that in Century bottling co. ltd, sometimes the delivery cycle time are long which affects the production process.

Most respondents 30(57.6%) agreed with non availability of products followed by 11(21.2%) who strongly agreed and a significant percentage 11(21.2%) disagreed. However, few respondents opposed implying that sometimes the inputs are not available in the marketing.

Furthermore, findings in table above indicate that most respondents 43(82.7%) agreed increased customer complaints, 08(15.4%) agreed and only 1(1.9%) opposed while no respondents were not sure or strongly disagreed opposed. This implies that at Century bottling co ltd, faces a challenge of increased customer complaints.

Finally, majority of respondents 37(71.2%) of the respondents strongly agreed with labour required and 09(17.3%) of them agreed as compared to 3(5.8%) of the respondents who disagree and 1(1.9%) of them strongly agreed while 2(3.8%) of the respondents were not sure. Since the majority were positive implies that much labour is required in acquiring inputs of soft drinks thus, increasing the general operational costs of Century Bottling co. ltd.

4.4 Solutions to the challenges faced in acquiring inputs for soft drinks

The study sought to assess the solutions to the challenges faced in acquiring inputs for soft drinks. Results were obtained and are presented below;

Table 4.5: Solutions to the challenges faced in acquiring inputs for soft drinks

Source: Primary Data

According to table above, majority of the study respondents 27(51.9%) agreed with increasing manufacturing capacity and 14(26.9%) strongly agreed as compared to 6(11.5%) of the respondents who strongly disagreed and 5(9.6%) disagreed. This implies that increasing manufacturing capacity in Century Bottling co. ltd can help improve the production performance.

Majority of respondents 20(34.5%) agreed with increasing marketing and advertising, followed by 13(25%) of the respondents who strongly disagreed, 10(19.2%) disagreed while 07(13.5%) of the study respondents strongly agreed and only 2(3.8%) of the respondents were not sure. This implies that increasing marketing and advertising in Century Bottling co. ltd can help improve the market performance.

Most respondents 30(57.6%) agreed with increase the global market share followed by 11(21.2%) who strongly agreed and a significant percentage 11(21.2%) were not sure. However, no respondents opposed implying that increasing the global market share have improved reliability in Century Bottling co. ltd thus, improving organizational performance in the process.

Furthermore, findings in table above indicate that most respondents 43(82.7%) agreed with striving to obtain higher brand loyalty in all other brands, 08(15.4%) agreed and only 1(1.9%) opposed while no respondents were not sure or strongly disagreed opposed. This implies that at Century Bottling co. ltd, customer loyalty should be realized in all brands to improve the market performance of the organization.

Finally, majority of respondents 37(71.2%) of the respondents strongly agreed introduce more brands and 09(17.3%) of them agreed as compared to 3(5.8%) of the respondents who disagree and 1(1.9%) of them strongly agreed while 2(3.8%) of the respondents were not sure. Since the majority were positive implies that discovering new brands would widen the market base at Century Bottling co. ltd.

From Table above, findings show that most respondents 28(53.8%) strongly agreed with meet consumer demands, 11(21.2%) of them agreed compared to 9(17.3%) who strongly disagreed and 4(7.7%) disagree while only no respondents were not sure. Majority 39(75%) agreed implying that meeting customer demands would increase customer loyalty in Century Bottling co. ltd thus, it has improved operational performance.

Majority 31(59.6%) of the respondents strongly agreed with purchasing planning, 12(23.1%) of them agreed while 4(7.7%) of the respondents disagreed, 3(5.8%) of them strongly disagreed and only 1(1.9%) were not sure. Since majority 43(82.7%) agreed implies that in most cases, purchasing planning would meet customer demands at Century Bottling co. ltd.

From results, 41(78.8%) strongly agreed with forecast demand and 5(9.6%) agreed as compared to 2(3.8%) of the respondents who disagreed and 1(1.9%) of them strongly disagreed and only 3(5.8%) of the respondents were not sure. Most responses 46(88.4%) of the respondents were positive implies that in Century Bottling co. forecasting demand would ensure that future stock-outs are avoided.

Fewer respondents 4(7.7%) strongly disagreed with market survey for proper negotiations and 14(26.9%) of them disagreed compared to those who concurred 19(36.5%) strongly agreed and 11(21.2%) of them agreed while only 4(7.7%) were not sure implying that market survey for proper negotiations in Century Bottling co. ltd as 30(57.7%) agreed thus would lead to improved operational performance.

CHAPTER FIVE

CONCLUSION AND POLICY RECOMMENDATIONS

5.0 Introduction

This chapter presents a conclusion(s) drawn, recommendations, and areas for further research basing on study findings.

5.1 Conclusion

The life cycle of a simple soft drink involves a complex chain of players, systems, and strategies – often mysterious even to professionals observing or working in the industry. From production and distribution to advertising and sales, the soft drink industry’s operating model has evolved over the years and continues to adapt quickly as economic, social, and political forces shift. This report has taken a closer look at the factors influencing demand for inputs involved in producing soft drinks, some of the challenges now facing the industry and strategies to the challenges involved in acquiring inputs for soft drinks.

The major factors influencing demand for inputs include; market share, changing societal concerns, attitudes, and lifestyles, prices of inputs, buyers demand for soft drinks and profitability in the soft drink industry.

According to the study, the major challenges facing Century bottling company in acquiring inputs for soft drinks include; competition from other industries, increased customer complaints, inflation, high ordering costs, non availability of products and high transport costs.

Therefore, the study suggested that Century bottling Co. Ltd should forecast demand, strive to obtain higher brand loyalty in all other brands, purchasing planning, introduce more brands, meet consumer demands, increase the global market share and increase their marketing and advertising.

5.2 Recommendations

Looking towards the future, the most important recommendation to Century bottling co. ltd is continuing product innovation and expansion of their product line. The soft-drinks industry is fully saturated with competitors. Also, the industry is no longer expanding, and market share is actually decreasing as more consumers are looking to healthier options. By continually introducing new products, Century bottling co. ltd will be able to increase their profits and allow the company to continue to grow. Also, having a diverse product line will make the corporation very stable, which is appealing to investors and creditors.

A second recommendation would be to sustain or increase the global market share. Century bottling co. ltd is very well-established globally, and is the global soft-drinks leader. This is very important to sustain because it is the source of the majority of their profits. If they lose global market share, their profits will decline dramatically.

A final recommendation for Century bottling co. ltd is to maintain and try to increase their brand loyalty. Diet Coke has the second highest brand loyalty of all the soft-drink competitors’ brands, and solid advertising campaigns will help maintain the brand loyalty. They can also strive to obtain higher brand loyalty in all other brands, not solely Diet Coke. The brand loyalty is important because it will allow Century bottling co. ltd to sustain profits and maintain their market share.

5.3 Areas for future studies

• The study recommends that further studies should be carried out on;
• The effect of competitors on market share
• The effect of increased customer complaints on market performance

REFERENCES

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Cadbury Schweppes. (2004). 2004 Annual Report.

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APPENDICES

APPENDIX I: QUESTIONNARE

I am Atim Lilie Naome Ocen, a final year student pursuing a Bachelor’s Degree of Arts in Economics of Kyambogo University. This questionnaire serves to gather data concerning the “factors affecting the demand for inputs of soft drinks industries: a case study of Century Bottling Co. Ltd”. You have been identified as one of the key respondents for this study. Therefore, I request for your cooperation. You will not be forced to answer any question that is against your will. The information you will provide was treated with utmost confidentiality and will only be used for academic purposes.

Thank you in advance

SECTION A: BACKGROUND INFORMATION

1. What is your sex?

Male                Female

2. What is your age?

18 –30             31-40               41-50                           Over 50

3. What is your highest level of education?

Masters                    Degree                Diploma                     Secondary

Primary                       None                            others specify…………………………………..

4. What is your occupation?

Top Management                               Middle Management

Lower Management                            Non-Managerial Staff

SECTION B: FACTORS INFLUENCING THE DEMAND OF INPUTS

6. What factors influence the demand for inputs in this organization? In this section, tick the best option by using strongly Agree (SA), agree (A), Not Sure (NS), Disagree (D), Strongly Disagree (SD).

SECTION C: THE CHALLENGES FACED BY CENTURY BOTTLING CO. LTD IN ACQUIRING INPUTS FOR SOFT DRINKS

7. What challenges are faced by Century bottling company ltd in acquiring inputs for soft drinks? In this section, tick the best option by using strongly Agree (SA), agree (A), Not Sure (NS), Disagree (D), Strongly Disagree (SD).

SECTION D: SOLUTIONS TO THE CHALLENGES FACED IN ACQUIRING INPUTS FOR SOFT DRINKS

8. What solutions to the challenges facing Century bottling company ltd in acquiring inputs for soft drinks? In this section, tick the best option by using strongly Agree (SA), agree (A), Not Sure (NS), Disagree (D), Strongly Disagree (SD).

THANK YOU FOR YOUR TIME