ADDIS ABABA UNIVERSITY

SCHOOL OF COMMERCE

MARKETING MANAGEMENT DEPARTMENT

Brand preference in the soft drinks industry

(In the case of Coca Cola &Pepsi Cola) in Addis Ababa Hotels

Thesis submitted to the School of Graduate Studies for the partial fulfillment of
the request for the Master of Arts Degree in Marketing Management

By: Yared Hiruy

Advisor: Bizuneh Asfaw (Ph.D)

June, 2014

Addis Ababa
 Abstract
This research has been undertaken with a purpose of evaluating the level of brand preference in the soft
drinks industry (In the case of Coca Cola & Pepsi Cola) in Addis Ababa Hotels through basing on the
component parts of: logistics support, customer service provision, and promotional efforts undertaken.

Considering the business to business relationship of the research objective, multi stage sampling technique
has been implemented in which hotels found at the higher class level and star level have been selected through
stratified sampling technique and according to their area of dispersion area sampling technique has been also
put into place.

Hence, the major findings assumed as a basis for brand preference are ensuring product availability at the
right timing and quantity, prior information provision to the hotels before delivery of products is undertaken,
and administration of TV ads through famous people to mention some.

In line with the major findings and as a low involvement product category the two rival companies are
heavily competitive on the logistics component especially in ensuring the product availability with the
required brand proportion and timing so as to prevent easily switching of consumers in attaining business
sustainability as a strategic competitive advantage.
 Acknowledgement

First and foremost I would like to say thank you for Almighty God for the energy, commitment,
and initiation that he provide me so that this research could come in to an end.

Secondly I would like to express my heart- felt gratitude to my advisor, Bizuneh Asfaw (Ph.D), for
sacrificing his precious time in providing support for the completion of the research work.

Thirdly, I would like to say thank you for Ato Kidane Aragaw for his humble assistance in my
research work.

Last but not least I would like to extend my great thanks to my friends, family, and all people who
have participated directly and indirectly in my research undertakings in terms of morale, financial,
and informational resources. Without your support life could have been miserable and disgusting.
Hence, I am saying congratulations on my behalf and that of the University.

Yared Hiruy

Signature ______________ Date _______________

June, 2014

Addis Ababa
 Abbreviations

CCS - Coca Cola SABCo

SABCo- South Africa Bottling Company

CSA- Central Statistical Agency

CBBE-Consumer Based Brand Equity

 Table of contents

Chapter One: Introduction Page

1.1 Background of the Study…………………………………………...…....….…….……………....… 1
1.2 Statement of the Problem………………………………………..…...........………........................... 5
1.3 Research Questions ……………………………………………....…………………………….…... 6
1.4 Objectives of the Study…. ..……………………………….……..……………..……………....… 7
- General Objective…………………………………………...…………………………………...… 7
- Specific Objectives……………………………………………………………………………..…. 7
1.5 Significance of the Study………………………………………………………............................... 8
1.6 Scope of the Study …………………………………………………………………………..…….... 8
Chapter Two: Related Literature Review
2.1 Branding, Brand Preference, & Brand Equity………………………………………………………..… 9
2.2 Brand Management……………………………………………………………………………………..… 13
2.3. Consumer Decision Making Models& Promotional Efforts to Brand Preference……………...….. 14
- Consumer Decision Making Model ………………………………………..…………...…. 14
- Low Involvement Consumer Behavior theories and their impact on Ads ……………. 15
- Sales force Impact ……………………………………………………………………………. 16
- Sales Promotion………………………………………………………………….………....… 17
2.4. Logistics Support Provision to Brand Preference ………………………………….………..… 17
2.5 Customer Service Provision to Brand Preference …………………………………………..…. 19
2.6. Theoretical Frame Works ………………………………………………………………………… 24-25
Chapter Three: Research Methodology
3. 0 Research Design …………………………………………………………………………………………..… 26
3.1 Type of Research…………………………………………………………………………………..…………. 26
3.2 Sampling Design ………………………………………………………………………………..…………… 26
- Target Population
- Sample Size & Sampling Technique
3.2 Data Analysis ………………………………………………………………………………………………… 27
Chapter Four: Data Presentation, Analysis & Interpretation of Findings
4.1 Participants Job- Position in their Respective Hotel ……………………………………………………. 28
4.2 Participants Educational Status………………………………………………………………………...… 30-31
4.3 Respondents Professional Service in their Respective Hotel ………………………………..… 31-32
4.4. The Respective Hotel Year of Service……………………………………………………………32-33
4.5. Logistics Support………………………………………………………………………..………….. 33
4. 6. Customer Service ……………………………………………………………………...…………... 37 -40
4. 7. Promotional Efforts ……………………………………………………………………..............… 41-44
Chapter Five: Conclusion and Recommendation
Conclusions and Recommendations ……………………………………………………………..…… 48-53
Prefatory Parts………………………………………………………………………………….
Annex…………………………………………………………………………………………..
List of References……………………………………………………………………………….
 Addis Ababa University

School of Graduate Studies

“Brand preference in the soft drinks Industry (In the case of Coca cola & Pepsi
Cola) in Addis Ababa Hotels”

By Yared Hiruy

Approved by Board of examiners

Name Signature Date

_______________________________ _______________________ _______________

Advisor

_________________________________ __ ______________________ ________________

Internal Examiner

________________________________ __________________________ _________________

External Examiner

Defendant Chair Person:

Name ________________________ Signature_______________ Date__________

Statement of Declaration

I hereby ascertain that the research work entitled as “Brand preference in the soft drinks
Industry (In the case of Coca cola & Pepsi Cola) in Addis Ababa Hotels ” is my original work and
take full responsibility related with its authenticity.

___________________________
Yared Hiruy
_________________________
Date

Advisor
_________________________
Bizuneh Asfaw (Ph.D)
________________________
Date
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Research Topic On :
Statement of the Problem
Brand preference has been an arguable concept in its

conceptualization, measurement, and management for

various authors whether it should be financial based or
strategic based in positioning the level of brand market
performance.
 Fast Moving Consumer Goods business sector is
characterized by frequently purchased, low transaction
amount, & low risk associations of product acquisitions.
Consequently, they are classified under the low involvement
type of consumer decision making.

Marketing intermediaries like hotel industry perform

various activities: physical distribution, warehousing, flow of
information, flow of revenues and profits, logistics…..
 Hotel Industry in Ethiopia had been initiated during
the regime of Emperor Minilik (II) with its first
establishment of Taitu Hotel basing in Addis and
currently the number has ranged up to 822 considering
the capital city of the nation only. Hence, measuring the
brand market performance of Coca Cola through these
marketing channel will have a detrimental effect in the
issue of the research being undertaken.
Research Objective
The main objective of the underlying research is to
assess the status of brand preference of Coca-Cola over
its rival Pepsi Cola in Addis Ababa Hotels based on
logistics support, customer service provision, and
promotional efforts.
Research Methodology
This is a descriptive type of research design
undertaken on a cross-sectional basis through a self
administered questionnaire survey utilizing
marketing intermediaries’ responses as a primary
sources and revision of related literature review as a
secondary source of data collection.
 The target population of this study are the Hotels
found in Addis Ababa City Administration(822 in
total) out of which the sampling frame are those found
at higher level & star level(180 in total)as per the list
provided by Ministry of Trade of Ethiopia,2014.
 The sample size determination is performed
based on personal judgment of the student
researcher considering the method of data
collection(non- probability sampling techniques:
Proportionate Quota sampling),the homogeneity of
the respondents,& representativeness of the
sample(8% of the target pop’n), cost, resource, time
limitations and finally the sample size is
determined to be sixty five hotels.
 As the sampling frame demonstrates 80% of
higher level & star level hotels are found in the 2 sub
cities(Bole and Kirkos) and the remaining 8 sub cities
account only 20% of the sampling frame . Hence, the
sample design and the data collection method are
performed accordingly.
 Finally the reply of respondents has been analyzed
based on the prevailing related literature reviews both
qualitatively and quantitatively through the
applications of descriptive statistical methods and
inferences have been undertaken through the
application of SPSS to generate analytical reports like
reliability and validity tests of the construct, Internal
validity of the variables, and the Factor Analysis.
Conclusion & Recommendation
In evaluating brand preference of Coca Cola over its
rival Pepsi Cola in Addis Ababa Hotels in 2014 three
component parts like logistics support, customer
service, and promotional efforts have been identified
and under their umbrella 24 variables are added to see
their coherence towards the component parts in
particular and towards brand preference at an
aggregate level.
 Accordingly, out of the 24 variables identified for
further analysis in line with the component parts in
particular and the research hypothesis in general 16
of them are found significant in a sample two tailed
t-test at 95% confidence interval and p≤0.05 in
determining brand preference of Coca Cola. Hence,
the research findings are presented as follows:
Conclusion
 Product availability at the right quantity and timing
are found as key variables in the logistics component
parts in the research undertaken.

 Pertaining to customer service provision, making prior

information to customers before delivery of products
is undertaken is a fundamental issue.
 Since administering promotional campaigns are
also the component variables in brand preference,
heavily working on TV ads preparation can create
easily brand association.
Recommendation
 Coca Cola as a company has been operating for over
50 years in Ethiopia and over 125 years in the globe
therefore relationship building with the marketing
intermediaries in line with their business
undertakings plays its vital role for its presence. The
targeted sample provide hotel service for the public
and their strategic location in the capital of the nation
make them relevant to the fast moving consumer
goods manufacturers like Coca Cola Co.
 Coca Cola has to aggressively work on making product
availability on a required timely fashion so as to prevent
easily switching of the marketing intermediaries and
consequently final consumers.

 In addition Coca Cola is also advised to strengthen

the variable in customer service component, i.e prior
informing to the hotels before delivery of products is
undertaken so as to minimize time, effort, and cost
that could have been incurred due to gap in
communication from both sides.
 The advertisement campaign (TV ads) has to focus on
endorsing through famous people like artists and
well known athletes so as to easily create associations
as a low involvement product category. In addition
sponsorship of sport festivals like the Coca Cola
Road Series has to continue in an organized approach
since it does have a detrimental effect in creating a
great bonding with the public at large.
 Market activation is also considered as a means of
creating top of mind awareness in the fast moving
consumer goods industry. Therefore, Coca Cola has
to aggressively focus on display materials like
posters and other materials helpful in reminding
strategy.
 During slack seasons in which sales drop
significantly, it is advisable to utilize various sales
discount strategies which should be designed on a
temporarily basis. In line with that, the hotels should
be communicated timely through the area sales
people. In doing so the Coca Cola Co. could
minimize over stocks, under utilization of company
production lines, space constraints, idle labor
hours…
 Finally, through creating a holistic integration
among the component parts of the brand preference:
the logistics support, the customer service, and the
promotional efforts and linking them with the
marketing intermediaries( Addis Ababa Hotels), East
Africa Bottling Share Co operating under a
franchisee agreement with international Coca Cola
Co :
 can enhance its relation level from presence up to
bonding through utilizing the aforementioned
component parts and customizing the brand image
into cultural heritage of the nation.
 Chapter One: Introduction

1.1 .Background of the study

The world in which we live is far more complex today than it was just a few years
ago because of a feverish and fascinating process of perpetual change. New
technologies bursting onto the scene, social networks undergoing extraordinary
growth and expansion, huge amounts of information becoming available to
consumers, the globalization of the economy and the accelerated development of the
so-called emerging countries are some of the main phenomena that are changing the
face of the competitive environment in which brands operate (Aaker, 1996, 2010;
Keller, 2003; Keller and Lehmann, 2006; Veloutsu, 2009), which in turn is posing stiff
challenges for managers.
Branding began sometime around 1500 BC, when the ancient Greeks marked
their cattle, a practice that still exists in the livestock industry. However, branding
initiatives relevant to an institutional enterprise began in 1931, when Procter & Gamble
started placing labels on its products to help consumers differentiate one product from
another. Shortly after the Second World War, Ford and General Motors engaged in
heated advertising battles, which continue today, as a means of educating their
audiences about the distinctive qualities of their respective products(Whisman:2009).
Branding creates mental structures that help consumers organize their
knowledge about products and services in a way that clarifies their decision making
and, in the process, provides value to the firm. Brand as a product can be expressed in
terms of functional, descriptive, and emotional component parts that provide
competitive advantage on the endowed goods and services(Kotler& Keller:2009).
The resource-based view within the strategy literature has argued that sustainable
competitive advantage is created primarily from intangible capabilities, including
brands and reputations (Omar et al., 2009).
In addition it is the brand as an intangible strategic asset of a given company which
is difficult to copy in the competitive environment. Elsewhere, identification of the
activities of the value generating chain, which from the consumer’s point-of-view

1
reveal a high potential value of differentiation, would enable the company to establish
and set the foundation on which activities that create that differential advantage. So,
capitalizing on these activities generates equity for the brand and it becomes a crucial
aspect in improving competitiveness. By achieving this, the brand would strengthen
the competitive position of the company in the market (Dopico & Porral: 2012).
There are conflicting views in the literature regarding the relationship between
brand preference and brand equity. In his seminal paper, Keller (2003) suggests that
brand preference is an antecedent of brand equity. However, subsequently Chang and
Ming (2009) studied the impact of brand equity on brand preference. Furthermore,
some other authors even use the two terms interchangeably (e.g. Rundle- Thiele and
Mackay, 2001).
Brand preference requires careful planning, a great deal of long term commitment,
creativity, design, and executed marketing. This means a holistic approach of
measuring marketing program offered by a firm, Brand Audit, and from the
consumers’ current assessment of knowledge of the brand equity: Brand tracking
studies (Kotler:1994).

As per Dunes and Pras(2013), for a brand to be positioned in a better market

performance and productivity the brand management system has to be embedded
with brand orientation, internal branding, and corporate culture which works on
alignment of company strategic direction with brand building process from top-down
and vice-versa involving top management, employees, customers, stake holders,….

The other prior work that also explored the range of attributes that might affect
brand preference is that of Mitchell and Amioku (1985); they conceptualize brand
preference as a bundle of attributes that leads a customer to favor one brand over
another. These attributes are classified into three sets, namely consumer attributes,
product (service) attributes, and market attributes.
While current literature has focused on building and conceptualizing brand equity,
there has been no consensus on how to measure it or on what constructs to include in
the measurement process (Mackay, 2001b).

2
 The area of brand equity has received significant research attention in recent years.
As a result, current marketing studies attempt to conceptualize, measure, and manage
brand equity in a way that drives brand market performance, and helps firm’s strategic
decision making. An emerging debate started to address whether brand equity should
be thought of from a consumer-oriented or a market performance-oriented perspective.
Motameni and Shahrokhi (1998) recognized the confusion and disagreement in
conceptualizing and defining brand equity, and they identified two opposing
perspectives or schools of thought: the marketing perspective and the financial
accounting perspective.
Keller (1993) posited that companies are motivated to study brand equity for two
reasons: one is financially-based to estimate the value of a brand more precisely for
financial reporting purposes; and the other is strategy-based to improve marketing
productivity. He argued that evaluating the brand in the minds of consumers’ is a
prerequisite for brand market performance.
Financial based of brand equity measurement comprises (Frampton,2010): the
economic value added, the role of the brand(i.e how it affects purchasing), and its
strength(i.e how well it is positioned against its competitors).
Hence, the brand knowledge is the fundamental issue that needs to be addressed
properly. Various scholars have suggested multi dimensional approaches on how to
create brand knowledge to serve as sustainable competitive advantage. Marketing
Researchers Millward Brown & WPP demonstrate brand knowledge as a progressive
effect that could be developed through time from its actual presence up to strong
bonding expressed ranging from low share of category expenditure up its highest level
(Kotler& Keller:2009).
Brand Knowledge as per Keller (2004) is from the point of view of the consumer’s
knowledge developed over time which creates a differential effect to the marketing
stimuli that the results in strong, favorable, and unique association of a given brand.

In achieving better brand market performance, the presence of strong relational

norms among marketing channel intermediaries is associated with the factors like:

3
performance, channel management and governance, conflict resolution, information
exchange and competitiveness. In order to fulfill these goals, firms must manage the
channel intermediaries and logistics function to ensure the effective and efficient flow
of goods, information, and revenue. Studies in the field of channels and logistics
acknowledge that marketing channel networks with strong emergent relational norms
i.e. spirit of cooperation, long term orientation, and a feeling of solidarity are likely to
yield better results (Paswan et.al, 2011).
Hence the Customer Satisfaction Management Survey has to be undertaken for
these intermediaries in light of market orientation, relationship marketing, quality and
service, market driven management, the pursuit of excellence, & marketing control
(Piercy, 1996).
With regard Ethiopian context as per the Central Statistical Agency Report
(2009/20010), Food and Beverage Industrial Group accounts for 36%age distribution of
value adding at the National Account Concept of basic price considering only the
Medium and Large Scale Industries. The Soft Drinks & Mineral Water Sub- Industrial
Group is also showing a tremendous growth in terms of number of establishment
which had been # 17 in 2005/2006 to # 37 in 2009/2010. Therefore, the value adding
contribution and its growing number of establishments demands branding to be the
issue of consideration in undertaking this research.

Coca Cola has been enjoyed for over 125 years in the globe after its first invention by
the Atlanta Chemist, John S. Pemberton, in Jacobs’s pharmacy in May-1886. During its
invention it had been very much fascinating to think that Coca-Cola would become the
second most internationally recognized term in the world after the word “Okay”
(Coca-Cola-SABCo, 2011).
The brand heritage created at a universal level has to be customized within the
cultural heritage of a given country in a way that could facilitate image of quality,
enhanced trust, customer loyalty, and stronger reputation. (Hakala, et al., 2011)
Adaptation versus standardization of the different elements of marketing in target
market of the brand strength with the underlying cultural context of the nation is the

4
basis for business sustainability (Banerjee, 2008). Brand strength can be established
based on image in use from the actual consumer practices and image in inheritance
from previous experiences that contribute a detrimental effect in building brand equity
over time in a dynamic approach (Rindell, et. al 2010)
Hence, East Africa Bottling Share Co. (EABSCo) a bottler found in Ethiopia working
under a franchisee agreement of an International Coca-Cola operations requirement is
expected to align the global brand heritage of Coca Cola in line with the Ethiopian
cultural context.
1.2 Statement of the problem

Brand preference has been an arguable concept in its conceptualization, measurement, and
management for various authors whether it should be financial based or strategic based in
positioning the level of brand market performance (Keller: 2003).

The products under the scope of Fast Moving Consumer Goods(FMCGs) are
mostly those that are frequently purchased and are characterized by low involvement,
low purchase transaction amount and low risk (East, 1997; Kotler, 2000), like food and
beverages such as candies, chocolates, ice-creams, cereals, milk, butter, juices, soft
drinks, personal care products such as soaps, shampoos, toothpastes, deodorants,
house hold care products such as detergents, insect repellents, and personal stationery,
etc.
Brand preference in a given product category demands the application of proper
marketing tools and techniques that go in line with the product nature, the under
lying situation of product application (Product breadth & depth), consumer
characteristics…. and the provision of the necessary logistics support, customer
service, and promotional efforts to maximize brand knowledge overtime which
creates a differential effect to the marketing stimuli that result in strong, favorable,
and unique associations of a given brand and consequently becoming a bonded
customer having a largest product category expenditure(Kotler& Keller: 2009,Cooper
M.B. & Bowersox D.J. 2004)

5
 In attaining the preceding brand equity which results in a given brand preference
and behavioral loyalty marketing channel systems or networks perform various
activities such as physical distribution, warehousing, flow of information, flow of
revenue and profits, and logistics, to name a few (Bowersox et al., 1980; Stern et al.,
1996). Customer loyalty is an invaluable asset for firms as it can provide security and
predictability of demand, create barriers against other firms trying to enter the
market, and also translate into the willingness of customers to pay premium prices(
Kotler and Keller:2006).

Hotel Industry in Ethiopia has been initiated during the regime of Emperor
Minilik (II) with its first establishment of Taitu Hotel basing in Addis and currently the
number has ranged up to 822 considering the capital city of the nation only (Trade and
Ind. Development Bureau, Addis Ababa: 2013) Hence, measuring the brand market
performance of soft drinks Industry through these marketing channel will have a
detrimental effect in the issue of the research being undertaken.

1.3 Research Questions

This research tries to answer the following question based on empirical

research undertakings:

- What is the status of brand preference in the soft drinks industry

considering Coca-Cola over its rival Pepsi Cola in Addis Ababa Hotels based
on the three major component parts?

.Logistics support: consisting of ensuring product availability at the right

timing, with the required brand proportion, with a reasonable price, and at an
accepted level of quality.

. Customer service provision: encompassing prior communication of

customers before delivery of products is undertaken, handling gaps in delivery
of products because of documentation immediately, informing changes in

6
 working system to customers before implementation is performed, and timely
retrieval of defective products.

. Promotional efforts undertaken: holding performing TV ads through

famous people, provision of sales discounts during slack seasons, doing market
activation aggressively, and sponsorship of sport festival.

1.4Objectives of the study

 General objective
- The main objective of the underlying research is to assess the status of
brand preference in the soft drinks industry considering Coca-Cola over its
rival Pepsi Cola in Addis Ababa Hotels based on logistics support, customer
service, and promotional efforts.
 Specific objectives

In consistent with the preceding general objective, the research is

conducted with the purpose of evaluating each component part in relation to
their effect in the brand preference in the soft drinks industry of the two rival
companies:

.Logistics support: consisting of ensuring product availability at the right

timing, with the required brand proportion, with a reasonable price, and at an
accepted level of quality.

. Customer service provision: encompassing prior communication of

customers before delivery of products is undertaken, handling gaps in delivery
of products because of documentation immediately, informing changes in
working system to customers before implementation is performed, and timely
retrieval of defective products.

. Promotional efforts undertaken: holding performing TV ads through famous

people, provision of sales discounts during slack seasons, doing market
activation aggressively, and sponsorship of sport festival.

7
 1.5 Significance of the study

This research will have an insight on the variables to depend for brand
market performance in the Soft Drinks Product Category like: logistics support,
customer service provision, and promotional effort in creating competitive
advantage and business sustainability over time.

1.6 Scope of the study

The research tries to cover brand preference in the soft drinks industry
considering Coca Cola over its rival Pepsi Cola undertaken in Addis Ababa
Hotels only. Hence, the output of the research is subject to the area of
consideration and the research design employed.

8
 Chapter Two: Related Literature Review

2.1 Branding, Brand Preference, & Brand Equity

Branding began sometime around 1500 BC, when the ancient Greeks marked
their cattle, a practice that still exists in the livestock industry. However, branding
initiatives relevant to an institutional enterprise began in 1931, when Procter & Gamble
started placing labels on its products to help consumers differentiate one product from
another. Shortly after the Second World War, Ford and General Motors engaged in
heated advertising battles, which continue today, as a means of educating their
audiences about the distinctive qualities of their respective products(Whisman:2009).
According to American Marketing Association (AMA), a brand is a” name, term,
sign, symbol, design, or a combination of the intended to identify the goods and
services of one seller or a group of sellers and to differentiate from those of
competition”. Branding a product can both benefit the consumer as well as the
manufacturer. It is beneficial to the consumer in terms of minimizing the risk of
utilizing it, searching cost, and image associations that they need to communicate to
others. Besides, manufacturers’ also harvest the advantage of branded product in:
identifying a product easily from its competitors, having legal protection, means of
endowing products with unique associations, source of competitive advantage, and
financial returns.(Keller:2004)

Branding creates mental structures that help consumers organize their knowledge
about products and services in a way that clarifies their decision making and, in the
process, provides value to the firm. Brand as a product can be expressed in terms of
functional, descriptive, and emotional component parts that provide competitive
advantage on the endowed goods and services (Kotler& Keller: 2009)
Over time, the concept of brand has developed in response to changes in the
business environment (Knox and Bickerton, 2003) thus deepening and widening the
brand domain through the application of branding to activities other than
manufacturing.

9
 Branding is a central concept in marketing, and the particular importance of
corporate branding has been highlighted by a number of writers (Keller and Richey,
2006; Merrilees and Miller, 2008). Although there has been increasing interest in
branding, it is reasonable to say that its incorporation into the conceptual structure of
marketing has yet to be completely consolidated (Stern, 2006). In the search for an
holistic conceptualization, we assume a semiotics-based conceptual model for
branding, according to which the brand is founded on three fundamental pillars: the
identity pillar, which includes the sign or signs that identify the brand (name, logo,
slogan, etc. forming the identity mix) and the brands associated with it, thus building
the corporate identity structure; the object pillar, which includes the different offers of
the brand together with the organization, and the marketing activities that support
them; and the market pillar, which includes the brand’s stakeholders and their
different responses to the brand at cognitive, affective, and behavioral levels
(Mollerup, 1997).
There are conflicting views in the literature regarding the relationship between
brand preference and brand equity. In his seminal paper, Keller (2003) suggests that
brand preference is an antecedent of brand equity. However, subsequently Chang and
Ming (2009) studied the impact of brand equity on brand preference. Furthermore,
some other authors even use the two terms interchangeably (e.g. Rundle- Thiele and
Mackay, 2001).

Brand preference requires careful planning, a great deal of long term commitment,
creativity, designed, and executed marketing. This means a holistic approach of
measuring marketing program offered by a firm (Brand Audit) and from the
consumers’ current assessment of knowledge of the brand equity (Brand tracking
studies) (Kotler:1994)

The other prior work that also explored the range of attributes that might affect
brand preference is that of Mitchell and Amioku (1985); they conceptualize brand
preference as a bundle of attributes that leads a customer to favor one brand over

10
another. These attributes are classified into three sets, namely consumer attributes,
product (service) attributes, and market attributes.
As per Alamro & Rowley (2011), consumer brand preference has been identified as
three main clusters: brand awareness, brand image, &consumer attributes.
While current literature has focused on building and conceptualizing brand equity,
there has been no consensus on how to measure it or on what constructs to include in
the measurement process (Mackay, 2001a).

The area of brand equity has received significant research attention in recent years.
As a result, current marketing studies attempt to conceptualize, measure, and manage
brand equity in a way that drives brand market performance, and helps firm’s strategic
decision making. An emerging debate started to address whether brand equity should
be thought of from a consumer-oriented or a market performance-oriented perspective.
Motameni and Shahrokhi (1998) recognized the confusion and disagreement in
conceptualizing and defining brand equity, and they identified two opposing
perspectives or schools of thought: the marketing perspective and the financial
accounting perspective.
Keller (1993) posited that companies are motivated to
study brand equity for two reasons: one is financially-based to estimate the value of a
brand more precisely for financial reporting purposes; and the other is strategy-based
to improve marketing productivity. He argued that evaluating the brand in the minds
of consumers’ is a prerequisite for brand market performance.
Financial based of brand equity measurement comprises (Frampton,2010): the
economic value added, the role of the brand(i.e how it affects purchasing), and its
strength(i.e how well it is positioned against its competitors).
Hence, the brand knowledge is the fundamental issue that needs to be addressed
properly. Brand equity is the tangible and intangible worth of a given brand accumulated
over time. Various authors have tried to demonstrate brand equity into different ways:

 Marketing Research Consultants Millward Brown & WPP(Kotler&

Keller:2009) developed Brand Dynamics Model (BRANDZ) which discusses

11
brand building follows a sequential series of step, each contingent up on
successfully accomplishing the preceding one. The model starts with weak
relationship (low share of category expenditure) and ends up with strong
relationship (high share of category expenditure). In creating such relationships
it demands to pass through the brand building blocks of: presence, relevance,
performance, advantage, & bonding. Bonded, consumers are those found at the
top of the pyramid, build stronger relationships with the brand and spend more
on it than those of at the lower level. More consumers however will be found at
the lower level. The challenge for the marketers is to develop activities and
programs that help consumers move up the pyramid.
 Keller (2004) argued brand equity to be measured from the perspective of
the consumer through his model of Consumer Based Brand Equity Pyramid
(CBBE Pyramid). The model tries to depict the association of the brand building
blocks with the pyramid. The brand (CBBE) building blocks involve: Identity,
Meaning, Response, & Relationship can be created because of the marketing
programs and efforts undertaken by the firm. For Identity creation, brand
salience framework has to be established demanding a given brand to be easily
recalled and recognized from its product category (Brand Depth) and being
utilized in a various physical settings (Brand Breadth). For meaning of a brand
to be installed, the product performance in terms of tangible attributes and the
brand image those consumers in product applications. The Response block is
learned evaluations in terms of emotional & judgmental reactions of the
consumer. The final output Relationship is generated from the intensity or the
depth of psychological bond that consumers have with the brand as well as the
level of actively engendered with loyalty. In total what Keller tries to
demonstrate is that brand equity is the consumer’s brand knowledge that
creates a differential effect to marketing stimuli over time to react in creating a
strong, favorable, & unique association of a given brand
 Aaker (1991) defined brand equity as “a set of five categories of brand
assets (liabilities) linked to a brand’s name or symbol that add to (subtract

12
 from) the value provided by a product or service.” He identified five brand
equity constructs: brand awareness; brand perceived quality; brand
associations; brand loyalty; and other proprietary brands assets, such as
patents, trademarks, and channel relationships.
 Tolba &Hassen(2009) tried to classify the CBBE Model into three
dimensions: Knowledge equity, attitudinal equity, and relationship equity in
which brand awareness, brand associations, and familiarity with the brand
refers to Knowledge equity, attitudinal equity is characterized by the affective
component, brand preference, satisfaction, and behavioral loyalty are
considered as the relational equity.

2.2 Brand Management

Knowledge of brand management actions is a central concern for practitioners

and top managers. Brand managers’ activities have emerged as the most important top
management priority with respect to marketing strategy. Branding activities have to
demonstrate that a portfolio of strong brands create value for the shareholders
(Madden et al., 2006) and the status of the marketing department within the firm
depends on its ability to show its contribution in terms of return on investment (e.g.
Verhoef and Leeflang, 2009)
As per Dunes and Pras (2013), for a brand to be positioned in a better market
performance and productivity the brand management system has to be embedded
with brand orientation, internal branding, and corporate culture which works on
alignment of company strategic direction with brand building process from top-down
and vice-versa involving top management, employees, customers, stake
holders,….Brand strategy has to base on the philosophy of inside out paradigm in
which set of core values and beliefs connect the entire organization to ensure long term
sustainability (Whisman: 2009). Corporate reputation is an outcome of interactions
between stakeholders and the organization over time. Corporate identity and
corporate branding are key drivers of an organization’s reputation management
(Argenti& Druckenmiller, 2004).

13
 Successful brand management focuses on making brand preference, ensuring that
products and/or services sold under the brand’s umbrella of values really are
perceived as superior to those of competitors (Nilson, 2000)

Brand Positioning is the act of designing the Co’s offer & image so that it occupies
a distinct and valued place in the target consumer’s minds. It involves undertaking
four steps: determination of target customers, competitors, identification of point of
parity & point of difference in relation to competitors (Kotler& Keller: 2009). Point- of -
parities are the minimum requirement of a brand provisions within its product
category which are at the generic & expected level (categorical) & at the competitive
level. Point –of- differences are the benefits through which a given brand can create
unique associations in the competitive environment. Point –of- differences have to be
measured through the guide lines of desirability (relevance, distinctiveness, &
believability)& deliverability (feasibility, communicability, & sustainability).

Core values of a brand have to be identified, mental map and structure need to be
created so as to establish brand mantras. Brand mantras communicate what the brand
is and the brand is not usually categorized in three forms: the brand functions,
descriptive modifier, & emotional modifier. (Keller: 2004)

2.3. Consumer decision making models& promotional efforts to brand preference

It can vary from a situation to a situation in which a consumer’s evaluation of

brand alternatives is constrained by the information requirement and the associated
financial, social, & psychological risks in selecting that specific brand from a given
product category (Assael:2001).

.Consumer Decision Making Model: It is a model classifying evaluation of brand

alternatives based on degree of involvement (situational or enduring) and the type of
decision level expected to be made. Consequently, the categories are complex decision
making, limited decision making, brand Loyalty, & inertia. Complex decision making is
a situation under which consumers are exposed to a higher degree of involvement and
decision making because of the fact that the natures of products are with high

14
procurement costs, associated with personality egos in a cognitive learning. Limited
decision making is undertaken with low degree of involvement because of the low risk
associated with the acquisition of the products. Consumers tend to make brand choices
based on cognitive economy. Brand loyalty comes after a total acceptance of a brand
through previous experiences. Hence, consumers directly take the acquisition of the
product without requiring further evaluation of brand alternatives. Finally, Inertia is
simply going as usual since there are no demanding situations for information
requirement and risk associated with it like purchase of a common salt (Assael: 2001).

. Low Involvement Consumer Behavior Theories and their impact on Ads

.Krugman’s theory of passive learning argued that TV advertisements are

instrumental for low involvement decisions since they can create product recall through
repetitive approach and the approach of conveying the message should be utilizing
imagery rather than informative. In addition he tries also to confirm that print ads are
also beneficial for higher involvement decisions since they provide sufficient time of
consideration to the target audience in creating brand evaluations & preferences in an
objective approach(Assael: 2001).

.Sherif’s theory of social judgment also tried to assert that a consumer with high
involvement requires a lot of effort to persuade requiring product attribute related
information because of being positioned at lower acceptance zone. Despite this fact,
however, low involvement types of consumers are easy to persuade with a wider
possibility to switch to other brands (Assael: 2001).

.Petty & Cacioppo also developed Elaboration Likelihood Model (ELM) which
tried to classify the content of an advertisement into central & peripheral component.
They emphasized that in marketing an ad of low involvement products, the focus is
advantageous to be made in endorsing the ads rather than information contents
(Assael: 2001).

15
.Sales force impact….

Business to business brand managers must relentlessly concentrate on developing

and communicating points of difference as the basis for creating differentiation and
providing superior value (Davis et al., 2008). Given the importance of the sales
function; however, it is surprising that the sales people and their emotional potential
are seldom seen as a starting point for differentiation.

Other research reported in the services marketing literature has addressed such
aspects of interpersonal communication style, and its effects on customer responses, as
non-verbal communication, customer orientation, employee satisfaction, and perceived
effort (Spark, et al, 1997). Beyond the services marketing literature, Wentzel (2009) has
analyzed the effects of different aspects of employees’ communication on consumers’
perception of brand image and their attitudes to the brand, in various product
categories.

Sales people today are expected not only to meet sales targets but also to build
long-term, profitable business relationships which in turn are based on positive
emotions such as satisfaction. Thus relationship selling behavior is important from a
branding point of view. Its primary goal is securing, building, and maintaining long-
term relationships with profitable customers (Johnson and Marshal, 2005).

As per Baumgarth & Schmidt (2010), sales person should not be seen as simply an
actor in the distribution process but rather should be integrated in the product(service)
positioning & marketing communication that could result in superior differentiation of
the offering in the competitive environment.

Interactive brand management is thus fundamentally about using the sales function
as the motive force for communicating differentiated company values, integrating sales
in to brand management, and implementing a strategy of relationship leadership
(Binckebanck, 2006).

16
 .Sales promotion

Devecehio & Puligadda (2012) emphasized the attractiveness of lower prices is

evident in the use of price discounts. Discounts have increased steadily over the past
two decades to the point that consumer packaged goods manufacturers now spend 10
percent-30 percent of their gross sales revenue on such promotions; an expense that is
eclipsed only by the cost to produce the goods.

Kinard& Bonner (2013) in their research undertakings of an experimental design

consisting of 475 subjects participated came in to conclusion that odd pricing effects
ending with 0 or 9 are easy to remember and the adaptation level price range of
consumers within the given product category has to be taken in to consideration.
Moreover if they are to be wrongly remembered, the tendency of rounding is to 5 or 9.
This finding can be used for marketing intermediaries to contribute to profit
maximization since it will have a great effect especially for low profit margin and high
inventory turnover product types like Fast Moving Consumer Goods.

2.4 Logistics Support Provision to Brand Preference

The logistics channel is responsible for the timely delivery of the required products
where as the marketing channel is for the product, price, & promotional activities
(Bowersox & Cooper: 2004)

Product availability is a major component part to ensure fill rate and

responsiveness to the ultimate customer. In doing so, there demands balancing the
over stock of products which results in higher inventory costs and the out of stock
issue leading to loss of sales (Chopra &Meindl: 2004) .A company should work on
holding of product mixes in relation to their preceding contribution of sales revenue
and the products need to be identified in terms of Stock Keeping Units (SKUs).

According to Pareto, the Italian Economist in the 19th Century, 8o% of the total sales
revenue is generated from the 20% of the products & the rest works vice versa
(Chirstopher: 1994).

17
 Dopico and Porral(2012) in their research undertakings which had been performed
both through interviewing with 36 sector executives and 250 surveys with potential
customers came into conclusion that excellence in delivered finished goods, brand
image, and product design are the sources for brand equity and attaining competitive
edge in the fashion market of the textile closing sector.

In attaining brand equity which results in a given brand preference and behavioral
loyalty marketing channel systems or networks perform various activities such as
physical distribution, warehousing, flow of information, flow of revenue and profits,
and logistics, to name a few (Bowersox et al., 1980; Stern et al., 1996).

It is coming to mean one of the two things to ensure product availability: First, it
means the use of a third party distribution Co., secondly it can mean the establishment
of a ‘a profit centre” concept of distribution with the parent Co. As per the illustrations
of Chirstopher (1994), the advantages of third party distribution service Co. would
appear to be:

. Customized customer service requirement at a reasonable cost

.Increased geographical coverage

. Lower operational costs both over all & in peripheral areas

. Specialized services available in: stock management, ability to redeploy

management resources, & overall risk reduction.

Apart from the preceding advantages of out sourcing distribution function, the
drawbacks are:

. Loss of direct control on stock rotation & customer service

. In adequate performance feed back

. In ability to respond to special demands

. Higher direct cost& communication problems with customers

18
 Kotler also emphasizes that organizations may not directly employ their own
resources in reaching their products to their final consumer. In such cases the need for
intermediaries to create time, possession, & place utilities to the manufacturers
becomes inevitable. Based on this their nature of organization differs in line with the
intended purpose of business operation either for immediate consumption (retailers) or
further business undertakings (wholesalers) (Kotler: 1994).

It is a Co’s decision based on the nature of the product to be offered, costs and
benefits associated, and the availability of resources both from the company side and
the agents to go for out-sourcing, in-house, or a combination of both to the distribution
capability so as to have its own share in ensuring brand preference.

2.5 Customer Service Provision to Brand Preference

Beyond availability and capability, quality of service means that shipment arrive
damage free, invoices are correct, returns of products & occurrence of unexpected gaps
are handled properly. Some firms are introducing on line order status, brilliant
recovery approach in rectifying sudden gaps to promote customer loyalty as part and
parcel of competitive advantage. (Bowersox& Cooper: 2004)

As per Zeithamal (2004), marketing communication system is categorized under

three main pillars: External Marketing Communication, Internal Marketing, &
Interactive Marketing. External Marketing Communication involves the traditional
way of transferring Co’s information about its goods & services through
advertisement, sales promotion, public relations, and direct marketing. Internal
Marketing is concerned about awareness creation to the internal employees of a given
Co’s goods & services so that alignment is developed between what is communicated
externally and the level of awareness of front line service providers of the Co.
Interactive Marketing is the actual marketing communication expected to be
undertaken with the customer at the interface level in the form of personal selling,
customer service center, service encounter, & service capes. Hence, these three
components of the service triangle, i.e, External Marketing Communication, Internal

19
Marketing, & Interactive Marketing have to be provided in a consistent, up-to-date,
and accurate approach collectively termed as Integrated Marketing Communications
(IMCs) so as to keep the customer satisfied.

IMCs build a strong brand identity in the market place by tying together and
reinforcing all your images and messages. IMCs mean that all your corporate
messages, positioning, images, and identity are coordinated across all venues. It tells
that all your public relations say the same things as your direct mail campaign, and
your advertising has the same ‘look and feel’ as your website (Zeithamal:2004).

Finally Zeithamal also identified as possible gaps in service communication

systems as inadequate management of: service promises, customer expectations,
customer education, & internal marketing communication.

Chirstopher (1994) also broadly defined customer service as a sum total of three
segments: Pre-transaction elements, transaction elements, & post-transaction elements.
Besides, Chirstopher suggested the under mentioned six steps from cost effective
customer service delivery system:

. Identifying the key components of customer service

.Establishing the relative importance of the customer service components

. Identifying company positions on key components of the customer service

. Segmenting the market by its service requirement

. Designing the customer service package

. Establishing customer service management & control procedures

As per Kauffmann &Dant (1992) customer relationship management in

business operations has to be measured based on solidarity, role integrity, and
mutuality. Solidarity refers to the importance attached to the orderly exchange norms
that are accepted by the majority and captures sentiments such as trust, future

20
cooperation, and open communications versus discreet transaction orientation and
arms length negotiation. Role integrity captures more complex expectations and roles
associated with the relationships with trading partners versus an expectation of
simplistic transactional role fulfillment by exchange partners. Finally, mutuality
(reciprocity) captures the importance associated with long-term payoffs where each
party tries to balance the account book on a transaction by transaction basis; as is the
case in discreet exchange relationships, by constantly monitoring, reconciling, and
controlling every transaction with high degree of immediacy.
In addition to Kauffmann & Dant, Salter & Olson (2001) cohered with the idea of
aligning marketing intermediaries with the corporate marketing strategy of a company
in their literature of “marketing strategy and relational-ism in supply chain”. It says
firms try to adopt one or more of the three marketing strategies aggressive marketing,
price leadership, and product focus (specialization) – they may find that the extent of
relational norms present in their marketing channels may not be equally suitable for all
three strategies. Aggressive marketing strategy is characterized by high-quality
innovative products, close relationships with customers, extensive marketing research
and market segmentation to identify premium target markets, selective distribution,
and intensive advertising. For channel partners, such strategy refers to an intimate
knowledge of the market, closer involvement with both the suppliers and customers,
and a willingness to invest in market research and R&D. A high degree of relational
ism in marketing channels is thus likely to foster closer ties amongst channel
intermediaries, strong identification with the common goal, and an incline towards
long term payoffs in comparison to a more transactional and short term orientation.
Literature on use of power business-to-business relationships have traditionally
suggested that an aggressive marketing strategy may be associated with use of power
by lead channel members, however, recent thinking suggests that the use of coercive
power in fact results in dysfunctional out comes. Product specialization (focus)
strategy, on the other hand, is characterized by a more concentrated approach towards
segmenting the market and targeting a narrowly defined niche market with fewer and
more specialized products (consistent with the more current service dominant logic,

21
the term product is henceforth used to represent the entire range of offering –products,
services, and the resultant solutions). For channel members, this strategy may translate
into a shrinking business volume. Although the increased focus on segmentation and
focused targeting may prove to be a significant investment of effort and resources, the
outcomes may not be commensurate with the enhanced resource allocation, especially
with a shrinking scope of operation and business volume. Surely, this is not a
promising picture of the firm’s future in that the shrinking business may not bode very
well for the relational-ism amongst channel members. In fact, the literature suggests
that the narrow product and market focus may be more congruent with strong and
close administrative control. Lasser and Kerr (1996) found that firms offering
differentiated and highly specialized products tended to rely more on highly involved
control relationship with very close monitoring of behavior. Thus, relational-ism, while
conducive for aggressive market strategy, may not be as conducive for product
specialization strategy. Finally, price leadership strategy requires a shift in focus to
lower margins and high volumes. Price leadership strategy may require intensive
distribution with a focus on larger markets resembling mass marketing strategy. While
Slater and Olson (2001) found that mass marketing strategy is congruent with analyzer
strategy, Lasser andKerr (1996) found the cost leaders to be low in behavioral control,
contractual restriction, and manufacturer coordination with medium levels of
manufacturer support. While this strategy is not likely to yield significant results in the
short run, it may have a bright future due to the enhanced market coverage. Therefore,
to encourage the channel members to go along with a low price strategy, managers
may need to rely heavily on relational norm among channel partners with a promise of
a successful future. This approach is more likely to succeed than a strong bureaucratic
stance which is typically more transactional and short term in orientation. An obvious
example would be Wal-Mart, which is known as a price leader and is known to use
closer ties with its channel partners to achieve its objectives.
Customer participation was considered to comprise various behaviors, such as
preparation, relationship building, information exchange, quality assurance, and
assessment behaviors. Quite early on, several authors suggested that customer

22
participation actually extends beyond the services process, involving customers’
inclination to learn & experiment, and to engage in active dialogue, collaboration, and
company development with sellers (Wikistrom, 1996; Prahalad and Ramas
wamy,2004).
Participative customers conduct more repurchases, show lower price sensitivity,
perceive the brand image more favorably and even contribute in service
recovery(Cermak et al.1994).
Customer loyalty is an invaluable asset for firms as it can provide security and
predictability of demand, create barriers against other firms trying to enter the market,
and also translate into the willingness of customers to pay premium prices( Kotler and
Keller:2006)
Hence, the effect of customer satisfaction in the daily operation of the business has to
be measured periodically. Accordingly Piercy &Morgan(1994) developed a process
based Customer Satisfaction Measurement(CSM) model comprising the under
mentioned dimensions:

 Analytical: concerned with techniques, formal procedures, systems ….

 Behavioral: concerned with attitudes, beliefs, perceptions, motivation,
commitment and resulting behavior of the people involved in the process.
 Organizational: concerned with the organizational structure, information
flows, management style and corporate culture i.e the context in which the
process operates; and finally
 Consistency: It involves the integration among the preceding component
parts over time, i.e, analytical, behavioral, and organizational.

23
 2.6 Theoretical Frame Work

From the preceding theoretical discussions made, the theoretical frame work
utilized is: The Model developed by Marketing Research Consultants Millward Brown
&Wpp (Kotler& Keller:2009) to measure the brand preference in the soft drinks
industry considering the two rival companies Coca-Cola and Pepsi-Cola in Addis
Ababa Hotels.

Strong relation-ship (High share of

Nothing else about it Bonding category expenditure)

Advantage
Does it offer something better than others?
Performance
Can it deliver?

Does it offer me something? Relevance

Presence

Do I Know about it?

Weak relation-ship (Low share of

Category expenditure)

Fig 2.1 Brand Dynamics by Milllward Brown & WPP (Kotler& Keller: 2009)

The theoretical model tries to demonstrate the linkage of the brand preference
pillars: the logistical support, customer service provision, and promotional efforts in
the soft drinks industry considering the two rival companies Coca-Cola and Pepsi-Cola
with the marketing intermediaries in the hotel industry in Addis Market.

24
 Consequently, it tries to measure the brand equity level of each concerned hotel in
response to the preceding marketing stimuli resulting in from the range of presence
level to bonding.

25
 Chapter Three: Research Methodology

3. Research Design

3.1 Type of Research

This is an explanatory type of research design undertaken on a cross-sectional basis

utilizing survey method as a primary sources and revision of related literature review
as a secondary source of data collection.

3.2 Sampling Design

 Target Population

As per the classification made by the Ministry of Trade of Ethiopia hotels are
classified into four categories: Lower Level, Medium Level, Higher Level, and Star
Level considering their level of their service provision and they 822 in total
considering the capital of the nation only out of which 180 in number are found at
the Higher Level, and Star Level.

Since the study undertaken is assumed as business to business relationship of the

hotels with two rival companies, the Higher Level and Star Level is the sampling
frame of the research.

 Sample Size & Sampling Technique

Due to the fact that there is a challenge of getting data related to this study, sample
size determination is performed considering the following conditions:

-Homogeneity of the class of the hotels,

- Representativeness of the sample to the population, &

- Time & resource limitations. Consequently, the sample size is determined to be

sixty five hotels and it is 8% of the total hotels found in Addis.

The sampling technique employed is one of the probability sampling techniques

(Multi Stage Sampling) in which Stratified Sampling Technique is used to select the 180
hotels based on their class of Higher Level and Star Level. Based on this Area Sampling
Technique is implemented based on their dispersion in the sub-cities and presented as
follows to represent the sample size determined:

26
 Table 3.1 Area dispersion of Hotels and Numbers selected

Item Dispersion of Available Percentage Numbers

Hotels in Addis Number composition selected for the
#
Sub-Cities sample

1 Kirkos 56 31.11% 17

2 Bole 84 46.67% 39

3 Nefas Silk, 40 22.22% 9

Gulele, Arada,
Yeka, Akaki-
Kaliti, Lideta,
Addis Ketema,
& Kolfe Keranio

Total 180 100% 65

Source: Ministry of Trade of Ethiopia, 2014

3.3 Data Analysis

The reply of the respondents has been analyzed based on the prevailing related
literature reviews quantitatively through the applications of descriptive statistical
methods and inferences have been undertaken like reliability and validity tests of the
construct, Internal validity of the variables, and the Principal Component Analysis.

27
 Chapter Four: Data Presentation, Analysis, & Interpretation of Findings

The data has been collected through self administered questionnaire survey in
which 65 hotels found at higher and star level in Addis are contacted following area
sampling technique and 52 of them were willing to respond in the time period of May
01-12, 2014. The composition of the respondents is consisting of the food and beverage
department staffs of each respective hotel since they are believed to be essential for the
purpose of the research being undertaken. Besides their size differs as per the internal
organization of the targeted hotel ranging from two up to five respondents and the
questionnaires retrieved are 181 in number. Prior to actual administration of the
questionnaire, peer evaluation had been conducted so as to evaluate face and content
validity.

Hence, the response rate is 80% of the targeted sample size in terms of hotel
number and it can be considered as an acceptable response rate (Adams et.al, 2010).

The self administered questionnaire is having two sections the general information
and the basic information. Each of which is discussed separately.

Section I: General Information

4.1 Participants Job- Position in the Respective Hotel

In the following table (4.1.1) and pie chart (4.1.1), it is tried to summarize
current position of the food and beverage department staffs of the respondents
in the hotel.
Tabel 4.1.1 Respondents Job-Position in the Hotel

Employee’s position in the Frequency Valid Percent Cumulative

hotel Percent
Non- Managerial
109 65.7 65.7
position
Managerial
57 34.3 100.0
position
Total 166 100.0

Source: Survey Report-2014

28
 The non- managerial position consists of the inventory controllers, store keepers,
waiters, bar people, etc having the majority of the respondents response rate (65.7 %)
and the remaining (34.3%) are the department managers of the food and beverage of
each respective hotel. Hence, the work force shows the largest percentage composition
of respondents are front line service providers who are better to evaluate the
relationship of the two rival companies on daily basis.

Chart 4.1.1 Respondents Job-Position in the Hotel

Source: Survey Report-2014

29
 4.2 Participants Educational Status

The educational status of respondents is summarized both in a frequency table

and bar chart.

Table 4.2.1 Participants Educational Status

Educational status Frequency Valid Cumulative

Percent Percent
Primary 7 3.9 3.9
Secondary 25 14.0 18.0
Diploma 95 53.4 71.3
Degree 41 23.0 94.4
Masters and
10 5.6 100.0
above
Total 178 100.0

Source: Survey Report-2014

In line with table 4.2.1 the highest composition of the educational status of respondents
are diploma holders(53.4%), following with degree holders(23%), and the remaining 23.6 %

are falling under primary, secondary, and masters and above. Hence, 82% of the

targeted sample are holding diploma and above in their educational status and this
will be assumed a good ground for their information provision of the research. This
can better be visualized through the following bar chart.

30
 Chart 4.2.1 Participants Educational Status

Source: Survey Report-2014

4.3. Respondents Professional Service in their Respective Hotel

In the following table 4.3.1 and bar chart 4.3.1, the respondents’ professional service in
their respective hotel is depicted in a 5 years interval scaling method

Table 4.3.1 Respondents Professional Service in their

Respective Hotel
Years of service Frequency Valid Cumulative
Percent Percent
0-5 136 77.3 77.3
5-10 20 11.4 88.6
10-15 8 4.5 93.2
15-20 6 3.4 96.6
>20 6 3.4 100.0
Total 176 100.0

Source: Survey Report-2014

31
 Chart 4.3.1 Respondents Professional Service in their Respective Hotel

Source: Survey Report-2014

In line with the preceding table 4.3.1 and bar chart 4.3.1, 77.3% of the respondents are
having 5 years and below service in their hotel and the rest 22.7% served above 5 years.
This implies that relationship building is not to be based on the long years of brand
image but to aggressively work on current level of performance.

4.4 The Respective Hotel Year of Service

In this illustration it was tried to see for how long does the respective hotel stay in
the service provision of the hotel industry in the form of table 4.4.1 and Chart 4.4.1

Table 4.4.1 Hotels’ Year of Service

Years of service Frequency Valid Cumulative
Percent Percent
0-5 86 49.4 49.4
5-10 32 18.4 67.8
10-15 12 6.9 74.7
15-20 10 5.7 80.5
>20 34 19.5 100.0
Total 174 100.0

Source: Survey Report-2014

32
 Chart 4.4.1 Hotels’ Year of Service

Source: Survey Report-2014

In consistent with the table 4.4.1 and Chart 4.4.1, 74.7% of the hotels are having a
service years of 15 years and below but the rest 25.3% are above 15 years. This shows
that majority of the hotels are new entrants within 15 years so the rival companies are
expected to illustrate the brand preference pillars in an integrated and consistent
approach to show their performance for the marketing intermediaries .

Section II: Basic Information

This section is the main part of the research topic in which the component variables
of brand preference: logistics support, customer service, and promotional efforts of the
Coca Cola Co. is analyzed in line with the reply of the respondents as compared to
Pepsi Cola Co.

4.5 Logistics support

In this component part 8 variables have been identified to evaluate the logistics
efficiency of the two rival companies, i.e Coca cola & Pepsi cola. These are:

-The right quantity coded as 5.1 & 5.2 respectively

- To be made available at the right time coded as 5.3 & 5.4,
-Reasonable price coded as 5.5 & 5.6,
-With the required quality coded as 5.7 & 5.8.
Accordingly, reliability test for the logistics component has been undertaken and
the result is .848 and it is acceptable as per the Cronbach’s ≥.60 Alpha
(Bahatlacherjee, 2012).

33
 Table 4.5.1 Reliability Statistics

Cronbach's Cronbach's No of
Alpha Alpha Based Items
on
Standardized
Items
.848 .846 8
Source: Survey Report-2014

In addition to see convergent and discriminant validity among related variables of the
logistics component, Pearson product moment correlation is depicted in table 4.5.2.

Table 4.5.2 Inter-Item Correlation Matrix

Q5.1 Q5.2 Q5.3 Q5.4 Q5.5 Q5.6 Q5.7 Q5.8

Q5.1 1.000 .449 .644 .408 .451 .266 .469 .102
Q5.2 .449 1.000 .435 .698 .380 .493 .213 .371
Q5.3 .644 .435 1.000 .674 .452 .339 .284 .108
Q5.4 .408 .698 .674 1.000 .355 .431 .211 .295
Q5.5 .451 .380 .452 .355 1.000 .771 .537 .311
Q5.6 .266 .493 .339 .431 .771 1.000 .450 .505
Q5.7 .469 .213 .284 .211 .537 .450 1.000 .318
Q5.8 .102 .371 .108 .295 .311 .505 .318 1.000
Source: Survey Report-2014

In the preceding table 4.5.2, we can see that how making available products at the
right quantity and at the right timing are highly convergent within the same company
showing ≥.6 but less convergent with price a nd qua ilty ( Bahatlacherjee,2012).
Considering within the two companies of the independent variables quantity and
timing are showing discriminant validity with price and quality. Hence, this implies
that product availability at the right brand proportion and timing are the key variables

34
in brand preference of the two rival companies and switching of consumers can arise
because of these factors.
Table 4.5.3 shows the significance of each variable in explaining the reliability
of the construct logistics component demonstrating .3 and above in its total statistics. In
addition the Cronbach's Alpha if Item Deleted explains the effect of each variable if it
had not been considered in the research undertaking and it is actually higher than 0.80
In addition it further explains the capability and appropriateness of each variable in
addressing the reliability of the component part.

Table 4.5.3 Item-Total Statistics

Scale Mean if Scale Corrected Squared Cronbach's
Item Deleted Variance if Item-Total Multiple Alpha if Item
Item Deleted Correlation Correlation Deleted
Q5.1 25.83 41.442 .571 .593 .832
Q5.2 25.93 40.212 .624 .610 .825
Q5.3 25.90 40.051 .603 .664 .828
Q5.4 25.95 39.586 .633 .686 .824
Q5.5 25.82 38.825 .675 .697 .818
Q5.6 25.93 39.239 .674 .717 .819
Q5.7 25.65 42.188 .496 .416 .841
Q5.8 26.12 44.296 .396 .330 .851
Source: Survey Report-2014

Table 4.5.4 is trying to depict the role of each variable in explaining the variability
of logistics component when the data reduction is performed:

Table 4. 5.4 Communalities

Initial Extraction
Q5.1 1.000 .780
Q5.2 1.000 .769
Q5.3 1.000 .800
Q5.4 1.000 .845
Q5.5 1.000 .766
Q5.6 1.000 .800
Q5.7 1.000 .744
Q5.8 1.000 .720
Source: Survey Report-2014

35
 In line with Table 4.5.4, Coca Cola is doing better than Pepsi Cola in keeping
proper brand contribution but excelled by Pepsi Cola in availing the products with
required timing.

Table 4.5.5 is showing the role of adding a single variable in expressing the
logistics component part.

Table 4.5.5 Total Variance Explained

Componen Initial Eigen values Extraction Sums of Squared Loadings
ts Total % of Cumulative Total % of Cumulative
Variance % Variance %
1 3.906 48.821 48.821 3.906 48.821 48.821
2 1.275 15.938 64.759 1.275 15.938 64.759
3 1.045 13.065 77.824 1.045 13.065 77.824
4 .632 7.902 85.727
5 .445 5.565 91.292
6 .383 4.793 96.085
7 .162 2.025 98.110
8 .151 1.890 100.000
Source: Survey Report-2014

In the preceding table 4.5.5 it can be said that through utilizing three components of
the two companies, 77.82% of the logistics component can be explained. This implies
the economical contribution of adding a single variable in the research undertaken
utilizing three variables rather than eight variables.

Table 4.5.6 illustrates the impact of the three components selected based on the
preceding factor analysis on each variable in explaining the logistics in its totality.

36
 Table 4.5.6 Component Matrix

Component
1 2 3
Q5.1 .685 -.381 -.407
Q5.2 .735 -.186 .441
Q5.3 .723 -.514 -.116
Q5.4 .745 -.375 .387
Q5.5 .776 .298 -.273
Q5.6 .770 .447 .087
Q5.7 .607 .328 -.518
Q5.8 .504 .543 .414
Source: Survey Report-2014

4. 6. Customer service

In this component part 8 variables have been identified to evaluate customer

service efficiency of the two rival companies, i.e Coca cola & Pepsi cola. These are:

-Making prior communication before delivery of products 6.1 & 6.2 respectively
-Gaps in documentation handling 6.3& 6.4
- Informing changes in working system 6.5 & 6.6
-Retrieval of defective products timely 6.7 & 6.8
Accordingly, reliability test for the customer service component has been
undertaken and the result is .87 and it is acceptable as per the Cronbach’s
Alpha≥.60 (Bahatlacherjee, 2012).

Table 4.6.1 Reliability Statistics

Cronbach's Cronbach's N of Items
Alpha Alpha Based
on
Standardized
Items
.870 .874 8
Source: Survey Report-2014

37
 In addition to see convergent and discriminant validity among related variables
of the customer service component, Pearson product moment correlation is depicted in
table 4.6.2.

Table 4.6.2 Inter-Item Correlation Matrix

Q6.1 Q6.2 Q6.3 Q6.4 Q6.5 Q6.6 Q6.7 Q6.8

Q6.1 1.000 .709 .606 .515 .619 .577 .381 .300
Q6.2 .709 1.000 .536 .505 .475 .509 .255 .298
Q6.3 .606 .536 1.000 .843 .524 .505 .390 .276
Q6.4 .515 .505 .843 1.000 .456 .533 .346 .286
Q6.5 .619 .475 .524 .456 1.000 .892 .378 .158
Q6.6 .577 .509 .505 .533 .892 1.000 .340 .151
Q6.7 .381 .255 .390 .346 .378 .340 1.000 .630
Q6.8 .300 .298 .276 .286 .158 .151 .630 1.000

Source: Survey Report-2014

In the preceding table 4.6.2, we can see that how making prior communication
before delivery of products is highly convergent with gaps in documentation
handling, and informing changes in working system in the same company showing ≥.6
but less convergent with retrieval of defective products timely ( Bahatlacherjee,2012).
Considering within the two companies of the independent variables retrieval of
defective products timely is showing discriminant validity with all variables. Hence,
retrieval of defective products timely should be considered as a separate issue in
affecting the customer service.
Table 4.6.3 shows the significance of each variable in explaining the customer
service component demonstrating .3 and above. In addition the Cronbach's Alpha if
Item Deleted explains the effect of each variable if it had not been considered in the
research undertaking and it is actually higher than 0.80. In addition it further explains
the capability and appropriateness of each variable in addressing the reliability of the
component part.

38
 Table 4.6.3 Item-Total Statistics
Scale Mean if Scale Corrected Squared Cronbach's
Item Deleted Variance if Item-Total Multiple Alpha if Item
Item Deleted Correlation Correlation Deleted
Q6.1 20.94 41.351 .726 .643 .842
Q6.2 21.06 44.016 .637 .561 .853
Q6.3 21.24 41.586 .720 .776 .843
Q6.4 21.06 42.958 .680 .759 .848
Q6.5 21.51 42.813 .678 .837 .848
Q6.6 21.54 42.905 .678 .835 .848
Q6.7 21.41 43.832 .531 .500 .865
Q6.8 21.45 45.446 .398 .450 .881
Source: Survey Report-2014
Table 4.6.4 is trying to depict the ability of each variable in explaining the
percentage of the variance of the customer service component under the economical
data reduction approach:

Table 4.6.4 Communalities

Initial Extraction
Q6.1 1.000 .684
Q6.2 1.000 .567
Q6.3 1.000 .672
Q6.4 1.000 .614
Q6.5 1.000 .727
Q6.6 1.000 .749
Q6.7 1.000 .752
Q6.8 1.000 .845
Source: Survey Report-2014

In table 4.6.4 the variables of retrieval of defective products timely, informing

changes in working system are exhibiting greater value in explaining the customer
service component in general, i.e .7 and above when the economical data reduction
approach is performed. Hence, this shows that customer service component can better
be explained in addressing these issues of entertaining the retrieval of defective
products and making proper communication of changes in working system before
implementation.

39
 Table 4.6.5 is showing the degree of rationality to add a single variable in
expressing the customer service component part. This implies the economical
contribution of adding a single variable in the research undertaken utilizing two
variables rather than eight variables.

Table 4.6.5 Total Variance Explained

Component Initial Eigenvalues Extraction Sums of Squared Loadings
Total % of Cumulative Total % of Cumulative
Variance % Variance %
1 4.337 54.216 54.216 4.337 54.216 54.216
2 1.274 15.924 70.140 1.274 15.924 70.140
3 .853 10.667 80.807
4 .687 8.591 89.398
5 .353 4.407 93.805
6 .260 3.246 97.051
7 .159 1.993 99.043
8 .077 .957 100.000
Source: Survey Report-2014

Table 4.6.6 illustrates the theoretical economical of the research in data reduction
and the relative impact of the two components on each variable in making decisions of
selecting them.

Table 4.6.6 Component Matrix

Component
1 2
Q6.1 .822 -.096
Q6.2 .745 -.108
Q6.3 .819 -.045
Q6.4 .783 -.041
Q6.5 .795 -.308
Q6.6 .798 -.335
Q6.7 .586 .639
Q6.8 .460 .796
Source: Survey Report-2014

40
4. 7. Promotional efforts

In this component part 8 variables have been identified to evaluate promotional

efforts of the two rival companies, i.e Coca cola & Pepsi cola companies. These are:

-TV ads undertaken through famous people 7.1 & 7.2 respectively
-Provision of sales discounts 7.3& 7.4
- Market activation performed aggressively 7.5 & 7.6
-Sponsorship of sport festivals 7.7 & 7.8

Accordingly, reliability test for the promotional efforts component has been
undertaken and the result is .765 and it is acceptable as per the Cronbach’s Alpha≥.60
(Bahatlacherjee, 2012).

Table 4.7.1 Reliability Statistics

Cronbach's Cronbach's No of
Alpha Alpha Based Items
on
Standardized
Items
.765 .764 8
Source: Survey Report-2014

In addition to see convergent and discriminant validity among related variables

of the promotional efforts component, Pearson product moment correlation is
depicted in table 4.7.2

41
 Table 4.7.2 Inter-Item Correlation Matrix

Q7.1 Q7.2 Q7.3 Q7.4 Q7.5 Q7.6 Q7.7 Q7.8

Q7.1 1.000 .657 .138 .072 .151 .238 .416 .295
Q7.2 .657 1.000 .101 .168 .085 .403 .465 .452
Q7.3 .138 .101 1.000 .807 .182 .128 .074 .054
Q7.4 .072 .168 .807 1.000 .182 .220 .016 .069
Q7.5 .151 .085 .182 .182 1.000 .671 .355 .138
Q7.6 .238 .403 .128 .220 .671 1.000 .390 .430
Q7.7 .416 .465 .074 .016 .355 .390 1.000 .714
Q7.8 .295 .452 .054 .069 .138 .430 .714 1.000
Source: Survey Report-2014

In the preceding table 4.7.2, rather than seeing the interdependency of the
promotion component within a company higher convergence is observed between the
rival companies ≥.6 (Bahatlacherjee, 2012). Hence, we can infer that the promotional
effort of each company is heavily dependent on the other in persuading potential
customers.
Table 4.7.3 shows the significance of each variable in explaining the promotional
efforts component reliability. Though all variables are positively correlated towards
the measurement of the component under consideration, they fall under 0.3 and above.
In addition the Cronbach's Alpha if Item Deleted explains the effect of each variable if
it had not been considered in the research undertaking and it is actually higher than 0
.70 Hence, it further explains the capability and appropriateness of each variable in
addressing the reliability of the component part.

42
 Table 4.7.3 Item-Total Statistics

Scale Mean if Scale Corrected Squared Cronbach's

Item Deleted Variance if Item-Total Multiple Alpha if Item
Item Deleted Correlation Correlation Deleted
Q7.1 22.59 34.197 .447 .489 .743
Q7.2 22.56 33.225 .544 .604 .726
Q7.3 23.53 36.732 .316 .681 .764
Q7.4 23.65 36.833 .338 .693 .760
Q7.5 22.68 34.404 .405 .620 .751
Q7.6 23.02 31.519 .592 .657 .715
Q7.7 22.10 33.502 .579 .650 .721
Q7.8 22.56 33.612 .493 .623 .734
Source: Survey Report-2014

Table 4.7.4 is trying to depict that the role of each variable in explaining the
percentage of variance of promotion components when the data reduction is made.

Table 4.7.4 Communalities

Initial Extractio
n
Q7.1 1.000 .637
Q7.2 1.000 .749
Q7.3 1.000 .887
Q7.4 1.000 .897
Q7.5 1.000 .840
Q7.6 1.000 .793
Q7.7 1.000 .692
Q7.8 1.000 .603
Source: Survey Report-2014

43
 In table 4.7.4 Except Sponsorship of sport festivals and TV ads of Coca Cola Co.
(0.60 and above) in general, all variables are showing i.e .7 and above in expressing the
theoretical three components. Hence, the major focus areas of the promotion tool are
advised to be provision of sales discounts and undertaking market activation
aggressively.

Table 4.7.5 is showing the degree of expression in adding a single variable in the
promotional efforts component part. This implies the economical contribution of
adding a single variable in the research undertaken utilizing three variables rather than
eight variables.

Table 4.7.5 Total Variance Explained

Component Initial Eigen values Extraction Sums of Squared Loadings

Total % of Cumulative Total % of Cumulative
Variance % Variance %
1 3.109 38.864 38.864 3.109 38.864 38.864
2 1.757 21.963 60.827 1.757 21.963 60.827
3 1.230 15.377 76.204 1.230 15.377 76.204
4 .824 10.299 86.503
5 .514 6.421 92.924
6 .262 3.281 96.205
7 .164 2.047 98.252
8 .140 1.748 100.000
Source: Survey Report-2014

In the preceding table 4.7.5 it can be said that through utilizing three components of
the two companies, 76.20% of the promotional efforts component can be explained.

Table 4.7.6 illustrates the theoretical economical of the research in data reduction
and the relative impact of the three components on each variable in making decisions
of selecting them.

44
 Table 4.7.6 Component Matrix
Component
1 2 3
Q7.1 .634 -.191 .446
Q7.2 .726 -.205 .424
Q7.3 .353 .846 .216
Q7.4 .367 .856 .172
Q7.5 .545 .175 -.716
Q7.6 .730 .037 -.508
Q7.7 .767 -.321 -.019
Q7.8 .709 -.308 .065
Source: Survey Report-2014

4.8 Aggregate effect of the component parts…..

In evaluating brand preference in the soft drinks industry of Coca Cola over its
rival Pepsi Cola three component parts( the logistics support, the customer service, and
promotional efforts) have been identified and under the main component parts 24
variables are added to see their coherence towards that objective and accordingly table
4.8.1 is illustrated as follows:

45
 Table 4.8.1 One-Sample Test

Test Value = 3
t df Sig. (2- Mean 95% Confidence Interval of
tailed) Difference the Difference
Lower Upper
Q5.1 7.788 177 .000 .730 .55 .92
Q5.2 6.639 174 .000 .646 .45 .84
Q5.3 6.163 169 .000 .629 .43 .83
Q5.4 6.321 163 .000 .646 .44 .85
Q5.5 6.960 173 .000 .713 .51 .91
Q5.6 6.415 167 .000 .661 .46 .86
Q5.7 9.181 168 .000 .911 .72 1.11
Q5.8 4.670 165 .000 .440 .25 .63
Q6.1 4.776 172 .000 .462 .27 .65
Q6.2 2.644 166 .009 .246 .06 .43
Q6.3 1.589 168 .114 .154 -.04 .34
Q6.4 2.757 165 .006 .259 .07 .44
Q6.5 -.501 163 .617 -.049 -.24 .14
Q6.6 -1.149 145 .252 -.123 -.34 .09
Q6.7 .465 154 .642 .052 -.17 .27
Q6.8 -.936 139 .351 -.114 -.36 .13
Q7.1 5.391 165 .000 .572 .36 .78
Q7.2 5.419 155 .000 .577 .37 .79
Q7.3 -4.296 154 .000 -.445 -.65 -.24
Q7.4 -5.099 153 .000 -.513 -.71 -.31
Q7.5 2.628 157 .009 .304 .08 .53
Q7.6 .275 157 .784 .032 -.20 .26
Q7.7 8.641 161 .000 .889 .69 1.09
Q7.8 4.603 163 .000 .512 .29 .73
Source: Survey Report-2014

46
 As per table 4.8.1 in a 95% confidence interval and at a significance level of p≤.05
two tailed sample t-test,

 All the logistics variables of: making available at the right quantity and
with proper timing, reasonable pricing, and with the required quality for
both Coca Cola Co. and Pepsi Cola Co affect brand preference.

 With regard to the customer service component part variables: making

prior communication before delivery of products does have a
significance level in brand preference for both Coca Cola and Pepsi Cola
Companies but gaps in documentation handling affects only Pepsi Cola
Company. Moreover, informing changes in the working system and
retrieval of defective products do not have any significance for both
companies as per the data analyzed from the preceding table 4.8.1
 Pertaining to Promotional efforts component part variables: TV ads
undertaken through famous people, provision of sales discounts, and
sponsorship of sport festivals do have a significant effect in brand
preference for both companies but performing market activation
aggressively affects only Coca Cola Co.

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 Chapter Five: Conclusion and Recommendation

5.1 Summary

In evaluating brand preference in the soft drinks industry of Coca Cola over its
rival Pepsi Cola in Addis Ababa Hotels three component parts like logistics support,
customer service, and promotional efforts have been identified and under their
umbrella 24 variables are added to see their coherence towards the component parts in
particular and towards brand preference at an aggregate level. Hence, the research
findings are summarized as follows:

 From the logistics support component part all the 8 variables were found
relevant for the construct but for the purpose of emphasis provision ensuring
product availability at the right quantity and timing are of the Hotels priority
showing higher convergent validity between themselves for both companies in
general and there is a tendency of shift in demand from one Company to
another if there are shortages in supply. In this regard Coca Cola Co. is good at
delivering the right quantity in a required brand proportion but excelled by
Pepsi Cola Co in timely delivery of customer order.
 Cognizant with customer service component part, making prior
communication before delivery of products was found relevant in the study for
both companies. As per the result of the study Coca Cola is doing better in
relation to its strong competitor Pepsi Cola with this issue and it should
continue in an organized approach to hold its competitive position. Since the
other variables like: gaps in documentation handling, informing changes in the
working system prior to implementation, and retrieval of defective products
timely were not found relevant in the study for both companies and hence they
are not considered for generalization.
 The third component part considered in analyzing the brand preference is the
promotional efforts being undertaken; in doing so all variables were found
relevant in the research undertaken except for one variable in Pepsi Cola Co
(Market activation). In elaborating the related variables the effect of variables in

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 promotional efforts is not in an interdependent approach within one company
rather the intermediaries perceive the promotional tools in a comparative approach
with in the two companies. Except in market activation and sponsorship of sport
festivals, Pepsi Cola Company is doing better than Coca Cola Company in
undertaking TV ads through famous people and provision of sales discounts. In
line with the preceding summarized issues and review of the related literature
review, the under-mentioned conclusions and recommendations are drawn:

5.2. Conclusion

Relationship building with the marketing intermediaries like hotels plays vital role
for the presence of the two rival companies. Corporate reputation is an outcome of
interactions between stakeholders and the organization over time. Corporate identity
and corporate branding are key drivers of an organization’s reputation management
(Argenti& Druckenmiller, 2004)
Successful brand management focuses on making brand preference, ensuring
that products and/or services sold under the brand’s umbrella of values really are
perceived as superior to those of competitors (Nilson, 2000)
 Product availability at the right quantity and timing are found as key variables in
the logistics component parts in the research undertaken. Furthermore, as per
Chopra & Meindl( 2004), product availability is a major component part to ensure
fill rate and responsiveness to the ultimate customer. In doing so, there demands
balancing the over stock of products which results in higher inventory costs and the
out of stock issue leading to loss of sales .A company should work on holding of
product mixes in relation to their preceding contribution of sales revenue and the
products need to be identified in terms of Stock Keeping Units (SKUs). Dopico and
Porral(2012) in their research undertakings which had been performed both
through interviewing with 36 sector executives and 250 surveys with potential
customers came into conclusion that excellence in delivered finished goods, brand
image, and product design are the sources for brand equity and attaining
competitive edge in the fashion market of the textile closing sector.

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 Hence, this implies that as a low involvement product category, the two rival
companies are heavily dependent on these variables in ensuring their competitive
position in the market.
 Pertaining to customer service provision, making prior information to customers
before delivery of products is undertaken is a fundamental issue. In addition as per
Johnson and Marshal (2005), sales people today are expected not only to meet sales
targets but also to build long-term, profitable business relationships which in turn
are based on positive emotions such as satisfaction. Thus relationship selling
behavior is important from a branding point of view. Its primary goal is securing,
building, and maintaining long-term relationships with profitable customers.
Accordingly, the effect of customer satisfaction in the daily operation of the
business has to be measured periodically. This shows that the hotels are highly
sensitive in prior information provision before delivery is undertaken so as to
minimize resources that could be wasted in the gap of information.
 With regard to the promotional efforts undertaken within the two rival companies,
it can be said that rather than linking the variables at a company level
interdependence is there between the two companies in influencing potential
customers.

Finally in line with theoretical model developed by Millward Brown & Wpp(Kotler
& Keller: 2009) and the research findings the following recommendation is given:

5.3 Recommendation

 Coca Cola has to aggressively work on in making product availability on a

required timely fashion so as to prevent easily switching of the marketing
intermediaries and consequently final consumers.
 In addition Coca Cola is also advised to strengthen the variable in customer
service component, i.e prior informing to the hotels before delivery of products
is undertaken so as to minimize time, effort, and cost that could have been
incurred due to gap in co

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  In line with that Piercy & Morgan (1994) developed a process based Customer
Satisfaction Measurement (CSM) model comprising the under-mentioned
dimensions:

.Analytical: concerned with techniques, formal procedures, systems ….

.Behavioral: concerned with attitudes, beliefs, perceptions, motivation,

commitment and resulting behavior of the people involved in the process.
.Organizational: concerned with the organizational structure, information
flows, management style and corporate culture i.e the context in which the
process operates; and finally
.Consistency: It involves the integration among the preceding component
parts over time, i.e analytical, behavioral, and organizational.

Some firms are introducing on line order status, brilliant recovery approach in
rectifying sudden gaps to promote customer loyalty as part and parcel of competitive
advantage (Bowersox& Cooper: 2004).

. The advertisement campaign (TV ads) has to focus on endorsing through famous
people like artists and well known athletes so as to easily create associations as a low
involvement product category. In addition sponsorship of sport festivals like the Coca
Cola Road Series has to continue in an organized approach since it does have a
detrimental effect in creating a great bonding with the public at large.

 Since administering promotional campaigns are also the component variables in

brand preference, heavily working on TV ads preparation can create easily brand
association and Krugman’s theory of passive learning argued that TV
advertisements are instrumental for low involvement decisions, they can create
product recall through repetitive approach and the approach of conveying the
message should be utilizing imagery rather than informative (Assael: 2001). Petty &
Cacioppo also developed Elaboration Likelihood Model (ELM) which tried to
classify the content of an advertisement into central & peripheral component. They
emphasized that in marketing an ad of low involvement products, the focus is

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 advantageous to be made in endorsing the ads rather than information contents
(Assael: 2001)
 In addition the issue of sales discount during slack seasons has to be taken into
consideration and accordingly Devecehio &Puligadda(2012) emphasized the
attractiveness of lower prices is evident in the use of price discounts. Discounts
have increased steadily over the past two decades to the point that consumer
packaged goods manufacturers now spend 10 percent-30 percent of their gross
sales revenue on such promotions; an expense that is eclipsed only by the cost to
produce the goods.

Market activation is also considered as a means of creating top of mind awareness

in the fast moving consumer goods industry. Therefore, Coca Cola has to aggressively
focus on display materials like posters and other materials helpful in reminding
strategy.

During slack seasons in which sales drop significantly, it is advisable to utilize

various sales discount strategies which should be designed on a temporarily basis. In
line with that, the hotels should be communicated timely through the area sales
people. In doing so the Coca Cola Co. could minimize over stocks, under utilization of
company production lines, space constraints, idle labor hours…

To ensure sustainable competitive advantage the rival companies are expected to

create a holistic integration among the component parts of the brand preference: the
logistics support, the customer service, and the promotional efforts and linking them
with the marketing intermediaries (Addis Ababa Hotels). Consequently, the two
companies can enhance their relation level from presence up to bonding through
utilizing the aforementioned component parts and customizing the brand image into
cultural heritage of the nation.

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 This research has been undertaken on the Hotels found in Addis at the Higher and
Star levels due to purpose of the study, resource, and time limitations. However, better
understanding about the brand preference in the soft drinks industry of the two rival
companies at hotel level can be grasped taking the entire hotels found in Addis as a
sampling frame.

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