Professional Documents
Culture Documents
1.0 Introduction
Risks are omnipresent throughout our daily life. An understanding of perception of risks
concerning beverages has become prominent for marketing managers. There are several
empirical evidences that factors like family, price and cultural difference affect the purchase
decision. The theory of planned behavior (TPB) by Ajzen, 1991 has helped many studies to
predict purchase intention and this study provides a modified TBP to include additional
determinants of purchase intention. Consumption of energy drinks in Mauritius and around
the world has become famous. The main suppliers of energy drinks in Mauritius are the
Phoenix Beverages group, Compagnie Industrielles de Pailles Ltee, Eau Val Ltee and
Redbull energy drink (RPM Enterprice Ltd). Zenith's market intelligence director, Esther
Renfrew said, Energy drinks remain the most dynamic segment in the soft drinks market,
with strong growth in most countries. The energy drinks consumption around the world has
increased and this is shown below:
_______________________________________________________________________
Naaila Banu Korimbocus, Faculty of Law and Management, University Of Mauritius, Mauritius,
n.korimbocus@uom.ac.mu
2007
2011
4%
6.8%
Middle East
East Europe
4.9%
7.5%
5.2%
8%
West Europe
Asia Pacific
North America
15.4%
25%
39.4%
16.9%
21.9%
35.9%
Africa
Australia
1.3%
2.5%
1.2%
4.2%
Latin America
Attitude
Intention to
purchase
Perceived
Risk reduction
risk
strategies
Chen and Lin (2009) claims that purchase intention represents what we think we will buy.
Purchase intention is one way to denote how a person is likely to buy a particular brand
and the intention to do so is not only determined by the customers attitudes towards one
brand, but also towards others (Teng et al, 2007).
Attitude is concerned with the positive and negative feeling of performing a behavior (Jin &
Kan, 2011). Attitude is the most powerful factor that influence purchase intent according to
the TPB (Hernan et al, 2012). It is also seen to be having a positive relationship with the
intention to purchase a product (Alam & Sayuti, 2011). That is, a negative attitude would
lead to rejection of a purchase while a positive attitude a purchase behavior. This is also
supported by other authors. They stated that there is a strong relationship between
attitudes and intention to purchase (Thompson et al, 1994).
Perceived Benefits
3
1. Product involvement
Quester and Lim (2003) denoted, product involvement reflects the perceived relevance of
the product category to the individual on an ongoing process. Perception of risk is a type of
product involvement and has been determined as a consequence of product involvement
(Dholakia, 2001).
2. Trust
There is a negative relationship between trust and perceived risk (DAlessandro et al,
2012). That is, the lower the trust in a product, the higher the perceived risks (Yen, 2010).
There are four types of relationship between trust and perceived risk; the first is that
perceived risk reduce the relationship between consumers trust and intent to purchase;
secondly, perceived risk go before consumers trust; thirdly, trust go before perceived risk
and finally the relationship between these two are reciprocal ( Chang & Wen, 2008).
7. Packaging
When perceived risk is high, the consumer always focuses on packaging (Celhay &
Passbois, 2011).
8. Price
The research of Lim (2003 quoted by Xu & Shao 2010 p. 515) stated that price is one
element that affects perception of risk.
9. Perceived quality
Quality is an indicator to assess risks (Teas & Agarwal, 2004). The study of Shimp and
Bearden (1982 quoted by Teas & Agarwal 2004 p. 244) explained that high perceived
quality is used to curb perceived risks to determine the level at which a product will perform
its necessary functions.
Risk reducing strategies
When there are high levels of perceived risks, consumers are likely to reduce these risks
(Yeung & Yee, 2003). The research of Kim and Lenon (2000 Stoel & Ha 2004 p. 383)
denoted that there is an inverse relationship between information available and perceived
risks. In order to ensure their purchase, consumers should try to eliminate the risks that are
likely to occur (Zhang & Lu, 2001). Evidence in the paper of Gurnan et al (2004 quoted by
6
3.0 Methodology
This study consisted of a causal research as the main focus was mainly to determine the
cause and effect relationship between perceived risks and intention to buy. Both primary
and secondary data have been used. A questionnaire was used as instrument to collect
data. Prior to data collection, a pilot test was conducted to ensure reliability of the
questionnaire. In November 2012, a pilot testing was conducted where six questionnaires
were used for this purpose. A sample of 200 respondents was taken out of the target
population which consisted mainly secondary and tertiary students, housewives, working
population and the retired people. A non probability quota sampling was used as shown in
the table below using the following formula:
No of population in a district * Sample size
Total population
Percentage (%)
Gender:
Male
Female
Age group:
Below 20
21-30
31-40
41-50
51-60
Above 60
District:
Riviere Du Rempart
Pamplemousses
Flacq
Black River
Port Louis
Savanne
Moka
PlaineWilhems
Grand Port
Marital Status:
Single
Married
Divorced
Separated
Educational level:
Primary
Secondary
Tertiary
Occupation:
Self employed
Student
Public sector
51
49
18.5
31
18.5
17
8.5
6.5
10.5
10.5
11.5
10.5
13
5.5
6
22
10.5
46
51
2
2
7
56
36
9.5
26
20.5
31
8
6
7
Below Rs5000
Rs5001-15000
Rs15001-25000
Rs25001-35000
Above Rs35000
11.5
46
24.5
9.5
8.5
Ethnic group:
38
32
15
11
4
Muslim
Hindu
Christian
Tamil
Others
Valid
How did you come to know about the existence of energy drinks
Frequency
Percent
Valid Percent
Cumulative
Percent
N/A
16
8.0
8.0
8.0
Television
55
27.5
27.5
35.5
on shelf
58
29.0
29.0
64.5
Newspaper
18
9.0
9.0
73.5
Friends/relatives
37
18.5
18.5
92.0
Radio
3
1.5
1.5
93.5
Don't remember
8
4.0
4.0
97.5
Billboards
2
1.0
1.0
98.5
Internet
3
1.5
1.5
100.0
Total
200
100.0
100.0
The findings show that the most effective medium to create awareness for energy drinks
were television, friends and on shelf. The other communication tools like radio (1.5%),
billboards (1%), and newspaper (9%) were not as much effective in delivering the
message.
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
28%
10.50%
N/A
Boost up Curiosity
energy
7%
Fun
5.50%
Taste
5.50%
Refresh
morale
Valid
N/A
Daily
Weekly
Monthly
Yearly
Anytime
Every three months
Total
Percent
Valid Percent
56
2
53
71
13
3
2
28.0
1.0
26.5
35.5
6.5
1.5
1.0
28.0
1.0
26.5
35.5
6.5
1.5
1.0
200
100.0
100.0
Cumulative
Percent
28.0
29.0
55.5
91.0
97.5
99.0
100.0
35.5% of the total population consume it on a monthly basis, only 1% on a daily basis,
26.5% drink it weekly, 6.5% yearly, 1.5% consume it anytime, and 1 every three months.
The frequency of use is low mainly on monthly basis which is not a good indicator in terms
of the profitability of energy drink firms in Mauritius.
10
Percentage (%)
8
42
8
5
3
2
33
11
Yes
83.5 %
65%
No
8.5%
27%
N/A
8%
8%
63.5%
49%
28.5%
43%
8%
8%
Time risk
8%
41%
N/A
51%
Yes
No
12
Percentage (%)
3
6.5
17
65.5
8
N/A
What do you think will be Delighted
your feeling if you have to Satisfied
consume energy drinks
Disappointed
Regret
Total
Total
16
30
119
19
16
200
Table 8: Cross tabulation of psychological risks between feelings of purchase and decision
taking
Those 108 respondents who feel that purchasing energy drink is not a wrong decision are
those who also feel satisfied and delighted, meaning that there is a positive relationship
between these two. That is, people who are delighted and satisfied will perceive the
purchase of energy drink as a good decision.
13
Do you consume
energy drinks?
1
.632
**
.000
200
**
.632
200
1
.000
200
200
5.0
Energy drinks are popular among Mauritians as the majority of them know what that
product is about and aware about the various energy drinks available on the market. The
most famous brands of energy drinks appear to be Redbull and Lucozade. People in
Mauritius do purchase and consume energy drinks, but most of them drink it on a monthly
or weekly basis, which implies that its use is not so frequent among Mauritians. Producers
and marketers of energy drinks have to act upon if they want sales to grow. Among all the
risks that exist, health risk seems to be the highest among Mauritians. The
recommendations proposed to the producers and marketers of energy drinks are as
follows:
Product improvement - Producers of energy drinks are advised to invest in R&D that may
allow them to improve the harmful ingredients, taste and reduction of caffeine and taurine
to reduce health risk. They can also try to introduce new flavors and remove or curb the
toxic ingredients by replacing it by herbal ones.
Quality assurance -The organization should be ISO certified to reassure customers that
energy drinks are reliable and healthy product. The focus on continuous improvement will
make customers trust energy drinks. As seen in the literature, trust and perceived risks are
inversely related. So being ISO certified will help to increase trust in energy drink and as
such alleviating risk perception.
Communication tools - There is a need to invest and design persuasive and informative
advertising. More information about the health concern should be provided and educate
them about the non-hazardous effect of consuming energy drinks as many Mauritians do
not know the other characteristics of energy drinks.
Targeting - After having segmented the market, it is essential to target the right one as the
targeting the whole may be a waste. The targeted population can be illustrated as follows:
15
Female
Age group
District
Income group
Rs5001-Rs15000
Source: COMPUTED
6.0 Conclusion
The study of consumer risk perception is a complex issue since human beings are
unpredictable creatures. Many strategies have failed to determine how to curb perceived
risks in the past. Changing drinking behavior of consumers is a must, but amending the
mindset of people is difficult. Perception of risk on the intention to purchase a product is a
difficult matter to assess as peoples thought change over time. The theory of planned
behavior has been used in several studies, but not only do attitudes and social norms
influence intention to purchase, other factor like health issues was of most concerned to
Mauritians. This study has enlightened us on perception of risk and intention to purchase
which is a rare study. Indeed, drinking habit may be a culture, but buying decision is a
torture because everything is in the mind.
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