Investigation into the impact of customer service quality on customer satisfaction with particular reference to the carbonated soft drink industry in South Africa

Abstract

The main purpose of this study is to ascertain the major service quality variables that determine customer satisfaction for the Carbonated Soft Drink market which is dynamic and is also part of the highly competitive impulse beverage industry in South Africa. Amalgamated Beverages Industry (aka Coca Cola) still holds the lion’s share of the market although its share has fallen in the last 5 years presumably due to the growth in the consumption of substitutes such as bottled water, 100% fruit juices, energy drinks and dairy juice blends. The proliferation of “diet conscious” consumers has exacerbated the situation. These alternatives are the primary growth areas in the impulse beverage market. This has obviously threatened the viability and profitability of major players in this industry. To date the performance of Carbonated Soft Drinks (CSDs) has been less than satisfactory. There are other key players which have penetrated this market namely Pepsi, trading as Pioneer Foods, Royal, Pioneer Foods, California Cola, Pick ‘n Pay and Quality Beverages.

For purposes of this study the three key players were chosen namely ABI, Pepsi and Quality Beverages. These key players have made huge investments in this industry at the level of production and distribution. In addition heavy investments go towards advertising and promotional campaigns. This research is exploratory in nature and makes way for further research in order to reach a more logical conclusion. This study is conducted within the confines of Gauteng region and more specifically Johannesburg North and Central. These two regions were chosen because the researcher resides close to these regions and wanted to minimize the costs involved in this study. The researcher also assumed the findings are a true representation of the broader picture of the South African scenario.

Before collecting information the researcher initially consulted recent articles, books, magazines, company reports and even the internet in order to develop a clear understanding of the industry. This also helped the researcher to make logical decisions in the course` of undertaking the research. To that effect the researcher adopted the service quality SERVQUAL and the Gaps models in coming up with a measurement instrument for the research.

The CSD companies have two broad categories of customers namely the trader and the end user or consumer. The trader purchases the product for purposes of research whilst the end user buys for consumption. This research focused on the trade customer. According to research experts a sample of more than 5% of the total population does not compromise validity. However the researcher opted for more than 10% of the total population in order to increase reliability of the results. Thus from the population size of 965 trade outlets the researcher arrived at a sample of 100. The traders were classified into four major categories namely retail outlets, wholesalers, restaurants and service stations. Information was collected from these 100 traders using personal interviews. The researcher is the one who conducted all the interviews. Information was gathered from buyers, managers and owners. The researcher took advantage of the Statistical Package for Social Scientists in order to make a meaningful analysis of the data collected. Many service oriented recommendations have been promulgated by this research. They are neither exhaustive nor prescriptive given the time constraint within which this research was conducted.