ND1021115

Title: Customer Satisfaction Stays High for Beverages, Cigarettes

Description: Philip Morris and Reynolds American show gains as customer satisfaction with tobacco products picks up for a second consecutive year.

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ANN ARBOR, Mich. ? Although U.S. sales continue to decline, three nondurable goods industries ? soft drinks, beer and cigarettes ? keep pleasing their U.S. customers, while looking toward Asian markets to boost their balance sheets, according to a report released today by the American Customer Satisfaction Index (ACSI). A fourth measured industry, personal care and cleaning products, stabilizes after a rare drop last year, as companies seek the right combination of quality and value to suit customers aiming to stretch their dollars.

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Overall, consumers are upbeat about their favorite soft drink brands, as the ACSI score for the industry ticks up 1.2% to 85 (on a 0 to 100 scale) and ties electronics (televisions and disc players) as the highest scoring among 47 measured industries.

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?A wide variety of product offerings, product reliability, low unit price, and minimal buyer switching costs keep customers highly satisfied with their soft drinks,? said Claes Fornell, founder of the ACSI, in a press release. ?Add to this the fact that purchasing and consuming these products hardly requires any customer service assistance, and soft drinks come out on top.?

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The industry's score is strengthened by small gains for the two cola giants ? Coca-Cola and PepsiCo improve 1% each to share the lead at 85 ? as well as a big boost for the category of smaller brands (store brands plus labels such as Faygo and Shasta). Following last year?s 7% plunge to 79, customer satisfaction with smaller brands bubbles up 5% to 83.

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Customer satisfaction with breweries is stable at 82 for a second year. This is lower than soft drinks, but stays at a very high level. Two years ago, the industry hit a high point of 84, but a sizeable downturn for market-share leader Anheuser-Busch InBev dampened customer satisfaction overall in 2010.

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?Beer customers tend to be more sensitive to price than those buying soft drinks,? said Fornell. ?Consumption of beer is also less than half of the consumption of soft drinks, which makes customer satisfaction more important for this industry.?

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Customer satisfaction with tobacco products picks up for a second consecutive year, rising 2.6% to an ACSI score of 78. This year?s increase completes the cigarette industry?s recovery from a sharp downturn in customer satisfaction reported two years ago by the ACSI, when new tobacco taxes drove up retail prices.

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?The quality of tobacco products has never been much of an issue for smokers,? said Fornell. ?Their satisfaction, instead, is highly tuned to changes in price, which is why the industry?s ACSI score is the weakest among nondurables.?

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Both major U.S. tobacco players reap customer satisfaction rewards from their ongoing emphasis on price promotions. Philip Morris emerges as the industry leader, up 4% to an ACSI score of 80 ? the company?s best in 16 years. Reynolds American makes progress as well, up 3% to 77, but lags significantly behind Philip Morris.

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Content Subject: Research

Formatted Article Date: #VALUE!

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