Research Methodology

INTRODUCTION
Marketing is very innovative field. Here nothing can be assumed.
Whatever innovative idea we generate, we have to test them and they
must be supported by proved results. For this, marketing research is
very important. Consumer behaviour is one such aspect that is very
difficult to measure by guesswork. Anything you say about it, it must be
based on reliable research. In this there must be analysis on brand
loyalty of cigarette smokers and it explained the rationale below.
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N.L.Dalmia Institute of Management studies & research
EXECUTIVE SUMMARY
An in depth Study of Cigarette smoker, survey is done in this research and it
conveys that maximum number of respondents were in the age group of 18-24 and
the least number of respondents were in 12-17age group and above 51age group
and most of the cigarette smoker between 6001 –12000 income group while the
minimum number of respondents were in the income group below 3000. The
maximum numbers of cigarette smokers were graduate while the minimum
numbers of respondents were illiterate. In this research it shows that 40% of the
respondents were students while only 4% were professionals. So we can notice
that out of 100 respondents, the maximum number of smokers were in the age
group of 18-24 years who were students and graduates.
These research tell you that the most important factor in buying the cigarette
is taste and its weightage is around 50% and price is secondary factor which has
got around 20% weightage. Thus, it can conclude that taste is more important
than price and all the other attributes but whose income is below 3000, price and
taste are almost equally important. They are more price conscious compared to
other income groups people. Importance of price in buying behaviour decreases as
income increases up to Rs.16000 and thereafter it remains almost same and it also
possible youngsters are mainly brand switchers because they are at the initial
stage of smoking and they are not habituated to a particular brand.
In this research friend circle is the main reason behind starting smoking.
Advertisement has very little impact on the person to start smoking, so
advertisement is not the boost factor at the initial stage. It also shows that around
65% of respondents came to know their regular brand from their friends. Only 21%
of the respondents have selected the brand after looking its advertisements. In
short, reference group (friends and shop owners) has strong effect on the selection
of the brand, even most of smoker is aware of other brand.
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In this Most of the respondents influenced by the overall presentation of
the advertisements. Youngsters are mainly influenced by the model(s) or punch
line (logo) of the brand. Mainly, the respondents who opted for logo or punch line
tried to match their personality with the model or slogan (like “Made for each other”
or “Discover a passion”). So it is a psychological effect of advertisement on the
respondents. Or even the other brand advertising is good the most of the smoker
respondent that will ignore that brand.
Thus average spending on cigarette by students (who smoke cigarettes

regularly) are around 30%. Total number of students was 40 out of 100
respondents. Out of 40 students, 30 students were regular smokers and the
remaining were occasional smokers. Average spending on cigarettes by the
occasional student smokers was below 10% of their disposable income.
The brand prefers by the respondent was “Will” which is on the 1st position
followed by Will classic, Gold flake, Four square, Bristol etc. The consumption
of cigarette for a regular smokers who smoke less than 10 cigarettes a day and
this smokers prefer to buy cigarettes in a pack instead of buying individual pieces
but Youngsters who fall in the age group of 12-17 and 18-24 prefer to buy
individual pieces, even though they have to pay higher price only because they
cannot take it home.
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IMPORTANCE OF RESEARCH
It is said that though the cigarette smokers are not loyal to their health, they are
very loyal to the brand of cigarette, which they smoke.
One cannot make such assumptions without any strong basis. To justify brand
loyalty among cigarette smokers, one small survey have undertaken. The survey
also throws light on the reference groups, which influence them in making decision
regarding the purchase of cigarette and reasons for smoking. To facilitate the
purpose, I have formed a questionnaire and got it filled by 100 respondents.
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OBJECTIVES
To study the changes in the brand loyalty in response to change in price and also
to find out price elasticity.
Cigarette is one of the products where Government is neither interested in

increasing the domestic consumption nor interested in curbing consumption. In
order to generate more revenue, Government increases the excise duty on
cigarettes on every year, which in turn brings about the increase in price of
cigarettes.
The basic assumption that Government follows behind following a policy of steep
and continuous increase in excise duty on cigarettes is that the demand for
cigarette is price inelastic. However, whether cigarette in India is price elastic or
not is an empirical question, which should be addressed scientifically.
In order to gain some insight into the problem, some firsthand research was
needed and that is why the first stone to build the presented research was laid
here. Nationwide research on this topic could yield some interesting facts and
finding but due limited scope to Mumabi city only.
1.One more thing that goes along with the change in price is brand loyalty. Many a
times change in price comes out to be swift in brand loyalty. So the objective was
to measure change in brand loyalty too.
2. To study the change in brand loyalty in response to change in income.
Income, which depicts affordability of a consumer, is the crucial factor in

determining buying behaviour. Change in income changes the buying behaviour of
a consumer and so do the brand loyalty. Hence our objective was to study this
change.
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3. To study the effect of freebies scheme on brand loyalty.
4. To study the aggregate effect of all the factors discussed above on brand
loyalty.
5. To study the importance that cigarette smokers attach to various attributes

(price, taste, filter etc.) while buying.
6. To study the effectiveness of a good advertisement of a new brand in terms of

its ability to attract consumers loyal to other brands.
SUPPLEMENTARY OBJECTIVES
1. To study the effect of non-availability of favorite brand on the brand loyalty of

smokers.
2. To study the impacts of new brand (price of which may be less than, equal to
or more than the price of their favorite brand) on the brand loyalty of smokers.
3. To study the reasons for starting smoking.
4. To know the role of reference groups in selection of brand of a cigarette.
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RESEARCH METHODOLOGY
RESEARCH DESIGN
This topic includes the conceptual structure within which research has been
conducted. The purpose of research design is to be as efficient and accurate. The
research design is to get all possible information
TYPE OF RESEARCH:
Descriptive method has been used in this research for the collection of data. As the
research is related to the study of consumer behaviour which can more effectively
be studied through direct questions, experimental research will not be much
effective. Also, considering the time constraint, descriptive research is the most
suitable design for this research.
SOURCE OF DATA:
To overcome the limitations of incompatibility, obsolescence, and bias, I went for

the primary data. A random sampling method of data collection is used for this
project
DATA COLLECTION METHOD:
Data has been collected through questionnaire method. The questionnaire was
designed in such a way to cover as many aspects of consumer behaviour as
possible.
SAMPLE SIZE:
Total 114 persons were contacted and interviewed. Out of these, 14

questionnaires were rejected due to incompleteness, conflicting answers etc.
Therefore, the final sample size was of 100.
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SAMPLING:
Here in this project studied is on consumer behaviour of people in mumbai.

Within the city we have collected samples from different areas. To reduce the
biases which may come through difference in the level of income, attitude, lifestyle
etc. of the people in different areas.
Scope of The Study
The area of specification was marketing; the topic was estimate to study the
brand loyalty of cigarette smoker. The geographic scope was in mumbai
Limitations of Study
• Some respondent were not cooperative and friendly.

• Report is qualitative.
Analytical of data
Since most of the data collected are from close-ended question which forms
nominal scale kind of data. The analytical technique used to validate the response
through S.P.S.S. (Statistical package for social science) marketing research
software.
S.P.S.S. EXACT test is a statistical package for analyzing continuous as
categorical data by exact methods. The statistical methodology underlying this
exact test is well established in the statistical literature and may be regarded as a
natural generalization of fisher’s exact test for the contingency table.
S.P.S.S. EXACT tests are the result of collaboration between CYTEL
Software Corporation and S.P.S.S. INC.
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IMPLEMENTATION
Before starting the actual research, I prepared a questionnaire for pilot study. I
interviewed a random sample of 15 respondents. Through the pilot study, I came to
know which questions were wrongly worded, which were ambiguous, which
needed to be added or to be subtracted etc. On the basis of feedback of this study,
I modified the questionnaire. I prepared the final questionnaire in accordance with
the objective of the research. The final questionnaire was used throughout the
research.
I selected different areas of the city to do study like so that the bias response
could be reduced to the best possible extent. I contacted respondents personally
and got the information as per the questionnaire. Sometimes it happened that
people tells lie, when asked about their regular brand, total expenditure on
cigarettes, etc. So I have discarded their questionnaires. To reduce the magnitude
of this problem, I selected respondents whom I saw smoking at the Pan shop or
General store so that the brand name, expenditure etc. can be verified. Many of
questions were designed to cross check the answers of the respondents. I tried to
make the questionnaire as comprehensive as possible to cover various aspects
related to research. I have used Constant Sum Method in one of the questions.
The questionnaires were handed over only to those respondents who showed
desire to fill up them on themselves, whereas in most cases I have filled up the
questionnaires as per their answers. So that they might not feel boredom or
confusion in filling up the questionnaires.
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HYPOTHESIS****
(1) There is no significant relationship between brand loyalty and age group.
SUB HYPOTHESIS:
(A) Brand loyalty is not affected by change in price.
(B) There is no significant difference in brand loyalty among the various income
groups due to change in price( price increases by 25%).
(C) Brand loyalty is not affected by change in income.
(D) Brand loyalty is not affected by scheme of free gift introduced by other brand.
(E) There is no significant difference in brand loyalty between regular smokers and
occasional smokers.
(2) People give more importance to taste as compared to other attributes.
(3) Does the good advertisement of the new brand help in switching the brand
loyalty.
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SAMPLE DESIGN
AGE-WISE AND INCOMEWISE SAMPLE DESIGN
INCOME GROUP AGE GROUP

(In RS.) 12-17 18-24 25-40 41-50 >51 TOTAL
<=3000 1 3 3 2 1 10
3001-6000 3 4 7 3 3 20
6001-12000 2 10 8 7 1 28
12001-16000 1 9 6 2 2 20
>16000 2 7 5 6 2 22
TOTAL 9 33 29 20 9 100
The above table shows that maximum number of respondents were in the age
group of 18-24 and the least number of respondents were in 12-17 and 51 above
age group.
Age-wise and Income-wise sample design
30
1
>51
25
7 41-50
2 25-40
20
2
Age-wise
3
2 6 18-24
3 8
15 17-Dec
6
5
10 7
1
2
10
5 3 4 9 7
3
3 2 2
0 1 1
<=3000 3001-6000 6001-12000 12001- >16000
Income-wise 16000
The above graph shows that maximum number of respondents were in 6001 –
12000 income group while the minimum number of respondents were in the
income group below 3000.
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Education
5% illeterate
15% 10%
upto 12 standard
undergraduate
15%
graduate
post graduate
55%
The above graph shows that maximum number of respondents were graduate
while the minimum number of respondents were illiterate.
Occupation
Businessman
Professional
16
25
Student
4
Serviceman
Others
15
40
The above graph shows that 40% of the respondents were students while only 4%
were professionals. The category of others includes a retired person and a
labourer.
From all the above graphs, we can notice that out of 100 respondents, the
maximum number of smokers were in the age group of 18-24 years who were
students and graduates.
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FORMULATION OF HYPOTHESIS
HYPOTHESIS 1
STEP 1:
H0: There is no significant relationship between the brand loyalty and age group.
H1: There is a significant relationship between the brand loyalty and age group.
TABLE SHOWING BRAND LOYALTY AMONG VARIOUS AGE GROUPS
AGE/STATUS 12 - 17 18 – 24 25 - 40 51AND41 - 50
TOTAL
ABOVE
NO. % NO. % NO. % NO. % NO. % NO. %
BRAND LOYAL 4 44,44 20 60,61 23 79,31 16 80,00 7 77,78 70 70,00
NOT BRAND 5 55,56 13 39,39 6 20,69 4 20,00 2 22,22 30 30,00
LOYAL
TOTAL 9 33 29 20 9 100
WHO IS BRAND LOYAL?
According to the definition, brand loyalty is determined by following criteria:
1. At the various level of price rise (from 15% to 25%), cigarette smokers
should either opt for smoking less quantity of the same brand or there should not
be any change in the current buying pattern, but he must not go for another brand.
2. Similarly, at the various level of increase in income, they should either opt for
smoking more quantity of the same brand or there should be no change in the
current buying pattern, but he must not go for the other brand
. 3. He should not switch over to other brand, if other brand introduces the
scheme of free lighter (worth Rs.25) in return for ten empty packets of its brand.
The cigarette smokers who will pass all the above three criteria will be considered
as a brand loyal.
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Inter-relationship Among The Three Criteria Of Brand
Loyalty
In testing the hypothesis of brand loyalty among the various age groups, I have
taken the three criteria. There should be some relationship among these criterion,
otherwise overall picture will not be analytical in the nature. For this purpose, I
have tested the relationship between the brand loyalty and change in price (here
maximum change is 25%), brand loyalty and change in income (here maximum
change is 30%), brand loyalty and effect of free gift scheme introduced by other
company.
NO. OF RESPONDENTS PASSING IN THREE CRITERIA
AGE NO. OF BRAND NO. OF BRAND NO. OF

GROUP LOYAL LOYAL BRAND
LOYAL
25% INCREASE 30% INCREASE FREE GIFT
IN IN INCOME
PRICE (Z)
(X) (Y)
12-17 4 7 8
18-24 24 24 29
25-40 26 25 28
41-50 16 20 20
50+ 7 9 8
TOTAL 77 85 93
CALCULATION OF CORRELATION
X Y Z (X-X) (X-X)^2 (Y-Y) (Y-Y)^2 (Z-Z) (Z-Z)^2 (X-X)(Y- (Y-Y)(Z-Z) (X-X)(Z-Z)

Y)
4 7 8 -11,4 129,96 -10 100 -10,6 112,36 114 106 120,84

24 24 29 8,6 73,96 7 49 10,4 108,16 60,2 72,8 89,44
26 25 28 10,6 112,36 8 64 9,4 88,36 84,8 75,2 99,64
16 20 20 0,6 0,36 3 9 1,4 1,96 1,8 4,2 0,84
7 9 8 -8,4 70,56 -8 64 -10,6 112,36 67,2 84,8 89,04
77 85 93 387,2 286 423,2 328 343 399,8
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r( x,y ) = [ å(X-X)(Y-Y)/[ å(X-X)^2 å(Y-Y)^2]^1/2]
r( y,z) = [ å(Y-Y)(Z-Z)/[ å(Y-Y)^2 å(Z-Z)^2]^1/2]
r( x,z) = [ å(X-X)(Z-Z)/[ å(X-X)^2 å(Z-Z)^2]^1/2]
Therefore,
r xy = 328/(387.2 * 286)^1/2
= 0.986
r yz = 343/(286 * 423.2)1/2
=0.986
r xz = 399.8/(382.2 * 423.2)^1/2
= 0.988
There is a positive relationship among all the three criteria. It is of utmost

importance because if any one is negative then effect of positive relation can be
nullified by the effect of negative relation and overall picture cannot throw light on
the effect of individual criteria on the brand loyalty. As all are very near to 1, it
suggests that the trend between the various criteria is almost perfectly positive
linear relationship.
As there is a positive interrelationship between all the three criteria, we can go

ahead by taking their individual effect on the brand loyalty.
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STEP 2:
CALCULATION OF CHI-SQUARE
OBSERVED EXPECTED (O-E)^2/E

FREQUENCY FREQUENCY
O E
4 6,3 0,8397
20 23,1 0,416
23 20,3 0,3591
16 14 0,2857
7 12 6,3 9 1
5 2,7
13 9,9 0,9707
6 8,7 0,8379
4 6 6 8,7 0,8379
2 2,7
c = 5,547
STEP 3:
Level of significance a = 5%
STEP 4:
Degree of freedom = (r-1)(c-1)-2
= (2-1)(5-1)-2
= 4-2
=2
At a = 5%, and degree of freedom = 2
ctab = 5.991
STEP 5:
Here c cal < ctab
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So the hypothesis is accepted. So there is no significant relationship between the
age group and brand loyalty.
But if the analyses of the data done through the table, we can notice that number
of brand loyal increases when we move from age group 12-17 to 18-24 years.
Similar is the case when we move from age group 18-24 to 25-40 years.
Thereafter, brand loyalty stabilises at around 80%. By which, we can conclude that
there is no direct relationship between brand loyalty and age group. But upto age
group 25-40 yrs, it increases from 45% to 80% and thereafter stabilises for other
groups.
TABLE SHOWING NO. OF BRAND LOYAL AT VARIOUS PRICE CHANGE
STATUS/CHANGE IN 15% 20% 25%

PRICE
BRAND LOYAL 92 87 77
NOT BRAND LOYAL 8 13 23
TOTAL 100 100 100
Who Is Brand Loyal With Respect To Change In Price?
Here change in income of cigarette smokers and schemes of free gift from other
brands are ignored. Here the emphasis is to know the effect of only change in price
on the brand loyalty. With respect to increase in price, person going for two options
(less quantity of the same brand or no change in the current buying pattern) will be
considered brand loyal.
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INCOME ELASTICITY
We have calculated income elasticity for the respondents who opted for smoking
more quantity of the same brand if their income increases. And the result is as
follows:
INCOME ELASTICITY
INCOME INCREASES BY
10% 20% 30%
AVG. INCREASE IN 18,18% 30,50% 40,55%
QTY. OF SAME BRAND
INCOME ELASTICITY 1,82 1,525 1,35
The above data shows that as income rises from one level to other, average
consumption of the same brand increases, but at the decreasing rate (for e.g. 30.5
– 18.18 > 40.55 –30.5) and because of that income elasticity is decreasing.
SUB HYPOTHESIS:
Step 1:
H0: Brand loyalty is not affected by scheme of free gift introduced by other brand.
H1: Brand loyalty is affected by scheme of free gift introduced by other brand.
AGE WISE BRAND LOYAL

STATUS AGE GROUP
12-17 18-24 25-40 41-50 51&ABOVE TOTAL
BRAND LOYAL 8 29 28 20 8 93
NOT BRAND LOYAL 1 4 1 0 1 7
9 33 29 20 9 100
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INCOME-WISE BRAND LOYAL
STATUS INCOME GROUP
<=3000 3001-6000 6001-12000 12001-16000 >16000 TOTAL
BRAND LOYAL 9 19 27 19 19 93
NOT BRAND LOYAL 1 1 1 1 3 7
TOTAL 10 20 28 20 22 100
Who Is Brand Loyal With Respect To Free Gift Scheme Of Other Brand?
Here, respondents who opted for no change in the current buying pattern will be
considered as the brand loyal. There is no need to test the above hypothesis by
taking help of chi-square. From the table itself, we can directly conclude that
scheme is ineffective for switching the brand loyalty of cigarette smokers
irrespective of their age group and income group.
SUB HYPOTHESIS:
[E]
STEP 1:
H0: There is no significant difference in brand loyalty between regular smokers and
occasional smokers. ( p1 = p2 )
H1: There is significant difference in brand loyalty between regular smokers and
occasional smokers. ( p1 > p2 )
p1=proportion of brand loyal among regular smokers=0.72
p2=proportion of brand loyal among occasional smokers=0.61
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BRAND LOYALTY AMONG THE REGULAR AND OCASSIONAL SMOKERS
STATUS/PATTERN SMOKERS
REGULAR OCASSIONAL TOTAL
NO. % NO. % NO. %
BRAND LOYAL 59 71,95 11 61,11 70 70,00

NOT BRAND 23 28,05 7 38,89 30 30,00
LOYAL
TOTAL 82 100,00 18 100,00 100 100,00
Here, a person is said to be brand loyal if he passes the entire three criterions
defined earlier i.e.:
1. Change in price
2. change in income
3. Gift scheme introduced by other brand of cigarette
STEP 2:
p1=0.72 p2=0.61 Z cal. = (p1 - p2) / (P^ Q^(1/n1 + 1/n2))1/2 = 0.924
n1=82 n2=18 P^ = ( n1*p1 + n2*p2 ) / ( n1 + n2 ) = 0.70
Q^ = 1 - P^ = 1 – 0.70 = 0.30
STEP 3:
Level of significance α =5%
STEP 4:
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Z tab at right tailed test = 1.645
As H1 is p1 > p2 , it is right tailed test.
STEP 5:
As Z cal < Z tab , H0 is accepted.
If we notice the data of table, It can directly conclude that both categories of
smokers are brand loyal, but the percentage of regular smoker is higher than the
occasional smokers. Brand loyalty ratio between two categories of smokers is 72%
and 61% respectively. It means that occasional smokers can also be brand loyal.
HYPOTHESIS 2
STEP 1:
H0: people give more importance to taste as compared to other attributes
H1: people do not give more importance to taste as compared to other attributes
PREFERENCE TOWARDS ATTRIBUTES
ATTRIBUTES POINTS
PRICE 1930
TASTE 4983
FILTER 1339
TOBACCO 893
ADVERTISEMENT 266
OTHERS 589
TOTAL 10000
OTHERS: (AROMA, FRAGRANCE, COLOUR, PACKAGING)
The above table shows that the preference towards attributes, here the
respondent is given the points according to there preference to the attributes in
these most of the respondent given more points or preference to taste which is
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4983 than followed by price which is 1930 and than filter, tobacco, advertisement,
others
ANALYSIS OF PREFERENCE TOWARDS ATTRIBUTES
TABLE SHOWING AGEWISE PREFERENCE TOWARDS ATTRIBUTES
ATTRIBUTES AGE GROUP

12 - 17 18 - 24 25 - 40 41 – 50 51 & TOTAL
ABOVE
NO. % NO. % NO. % NO. % NO. % NO. %
PRICE 245 27,22 720 21,82 500 17,24 295 14,75 170 18,89 1930 19,3
TASTE 405 45,00 1528 46,30 1535 52,93 945 47,25 570 63,33 4983 49,8
FILTER 45 5,00 234 7,09 445 15,34 530 26,5 85 9,44 1339 13,4
TOBACCO 40 4,44 353 10,70 275 9,48 170 8,5 55 6,11 893 8,93
ADVERTISEMENT 95 10,56 111 3,36 30 1,03 25 1,25 5 0,56 266 2,66
OTHERS 70 7,78 354 10,73 115 3,97 35 1,75 15 1,67 589 5,89
900 3300 2900 2000 900 10000
From the above table, we can conclude that taste is the most important attribute for
the consumers of all age groups. For 51 and above age group, taste has got the
highest weightage (around 63%).
 Price has emerged as second important attribute for all the age groups
except for 41-50. Age group 12-17 is more price conscious than any other
age group. It can also be noticed that weightage of price decreases as we
move from age group 12-17 to age group 41-50 and thereafter it
increases slightly. This indicate that price becomes somewhat important
for 51 and above age group people.
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 The advertisement has little impact on the respondents of all age
group.
 For the age group 41-50, filter emerged as second important attribute.
INCOME-WISE PREFERENCE TOWARDS ATTRIBUTES
ATTRIBUTES INCOME GROUP

<=3000 3001-6000 6001-12000 12001- >16000 TOTAL
16000
NO. % NO. % NO. % NO. % NO. % NO. %
PRICE 460 46 425 21,25 585 20,89 195 9,75 265 12,05 1930 19,3
TASTE 455 45,5 990 49,5 1310 46,79 1163 58,2 1065 48,41 4983 49,83
FILTER 50 5 237 11,85 350 12,50 345 17,3 357 16,23 1339 13,39
TOBACCO 35 3,5 194 9,7 310 11,07 103 5,15 251 11,41 893 8,93
ADVERTISEMENT 0 0 68 3,4 87 3,11 30 1,5 81 3,68 266 2,66
OTHERS 0 0 86 4,3 158 5,64 164 8,2 181 8,23 589 5,89
1000 2000 2800 2000 2200 10000
This table explains that for the respondents whose income is below 3000,
price and taste are almost equally important. They are more price conscious
compared to other income groups people. Importance of price in buying behaviour
decreases as income increases up to Rs.16000 and thereafter it remains almost
same. This indicates the inverse relationship between the importance of price and
income group.
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ADVERTISEMENT
HYPOTHESIS
[3 ]
STEP 1:
H0: The good advertisement of the new brand helps in switching the brand loyalty.
H1: The good advertisement of the new brand does not help in switching the brand
loyalty.
Main reason behind starting smoking
 In question number 21 of the questionnaire: what did make you start smoking?
The result was as follows:
REASON FOR STARTING SMOKING
REASONS NO. OF
RESPONDENTS
24
FRIEND CIRCLE 45
TO SHOW OFF 9
OUT OF 12
CURIOSITY
RELIEF OF 13
TENSION
ADVERTISEMENT 8
TIME PASS 13
TOTAL 100
From the above table, we can conclude that friend circle is the main reason
behind starting smoking. Advertisement has very little impact on the person to start
smoking, so advertisement is not the boost factor at the initial stage.
Effect Of Reference Group On Brand Selection
 In Q.22 : where did they come to know about the brand, which they
smoke regularly? The result was as follows:
INFLUENCERS NO. OF RESPONDENTS

FRIENDS 65
ADVERTISEMENT 21
SHOP OWNER 14
TOTAL 100
The above table shows that around 65% of respondents came to know their
regular brand from their friends. Only 21% of the respondents have selected the
brand after looking its advertisements. In short, reference group (friends and shop
owners) has strong effect on the selection of the brand.
 In Q.23: whether they are aware of the advertisements of the other

brands. The result was as follows:
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AWARENESS OF ADVERTISEMENT OF OTHER BRANDS
AWARE NO. OF RESPONDENTS

YES 78
NO 22
TOTAL 100
Here, the respondents were shown cuttings of some popular advertisements

and were asked whether they have shown them earlier. Around 78% respondents
answered positively. This means that they are aware of the advertisements of
other brands but still prefer their regular brand. This shows that they have
knowledge about various brands but their buying decision is not affected by the
advertisement of other brands. The main reason behind showing the cutting of
advertisements and packets of various brands was to help them to recollect
whether they have seen it before. The questionnaire was somewhat lengthy, so the
idea of showing advertisement was succeeded in capturing the attention of the
respondents.
 while showing the various advertisements, I had asked the respondents, what
does influence them in the advertisement? The result was as follows:
INFLUENCING FACTOR IN ADVERTISEMENT
PARTICULARS NO. OF RESPONDENTS

MODEL(S) 21
FEATURES 12
CONTENT 18
OVERALL
PRESENTATION 30
NO INFLUENCE 19
100
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Most of the respondents influenced by the overall presentation of the
advertisements. Youngsters are mainly influenced by the model(s) or punch line
(logo) of the brand. Mainly, the respondents who opted for logo or punch line tried
to match their personality with the model or slogan (like “Made for each other” or
“Discover a passion”). So it is a psychological effect of advertisement on the
respondents.
 In Q.25, the main aim was to find out whether the good advertisement of
the new brand helps in switching the brand loyalty. We asked the
question that if respondents would come across to the advertisement of
the new brand, which satisfy their choice about what influence them most
in the advertisement, what would be their reaction? The result was as
follows:
REACTIONS NO. OF RESPONDENTS

TRY IT 21
ASK/INQUIRE FOR IT 12
IGNORE IT 67
TOTAL 100
About 67% of the respondents replied that even though it may have all the
factors, which they wanted in the advertisement, they would not switch to the new
brand only for the reason that its advertisement is good.
From the above analysis, we can conclude that our hypothesis is rejected
and good advertisement of the new brand does not significantly attract the
cigarette smokers to switch their brand.
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DATA ANALYSIS
1. AVERAGE EXPENDITURE ON CIGARETTE BY THE STUDENTS
(% OF THEIR DISPOSABLE INCOME)
CLASS MID FREQUENCY

(% SPENDING VALUE
ON CIGARETTE) xi fi Fixi c.f
0-10 5 4 20 4
10-20 15 5 75 9
20-30 25 7 175 16
30-40 35 5 175 21
40-50 45 4 180 25
50-60 55 3 165 28
60-70 65 2 130 30
30 920
Disposable income = pocket money + part time/full time job earning
Mean X = ∑fixi / ∑fi = 920/30
=30.67%
Median = M = n/2th item
=30/2th
=15th
M = L + [(n/2 – cf)/f * w]
28
Where L=20, n=30, cf=9, f=7, w=10
M = 28.57%
Thus average spending on cigarette by students (who smoke cigarettes regularly)

are around 30%. Total number of students was 40 out of 100 respondents. Out of
40 students, 30 students were regular smokers and the remaining were occasional
smokers. Average spending on cigarettes by the occasional student smokers was
below 10% of their disposable income.
1. MARKET SHARE OF VARIOUS BRANDS
MOST PREFERRED BRAND
BRAND NO. OF
RESPONDENTS
WILLS 37
CLASSIC 20
GOLD FLAKE 21
FOUR 8
SQUARE
BRISTOL 9
OTHERS 5
100
In our research, the Wills brand emerged as the most popular brand of cigarette,
which accounts for around 37% and Wills classic and Gold Flake were running
neck-to-neck at 20%. Other brands of cigarettes include 555, Marlboro, Rothmans,
etc.
3.PRICE OF NEW BRAND AND REACTION OF CIGARETTE SMOKERS
REACTION PRICE OF NEW BRAND AS

COMPARED TO REGULAR BRAND
LESS EQUAL MORE
TRY IT 34 23 15
29
ASK AND INQUIRE 9 8 7
FOR IT
IGNORE IT 57 69 78
TOTAL 100 100 100
The above table shows that if the price of new brand is less than the regular
brand of smokers, then 34% of smokers will try for the new brand. If it is equal,
then 23% smokers will try it. It means that price is important for about 34% of
respondents, while around 60% to 70% respondents ignored the new brand
irrespective of their price. For the Cigarette Company, they are strong brand loyal.
But others either try the new brand or inquire for it. If price is more, the numbers of
smokers who opt for trying the new brand are less than if the price is equal to their
brand.
So far as the new company is concerned, the company should keep

low price of the cigarette as compared to their competitors so that brand loyal
people at least try for new brand. If desired taste were provided simultaneously,
then it may be possible to make them switching to the new brand.
On the detailed study of this table, we also find that mainly youngsters (age group
of 12-17 and 18-24) and low income group people (upto Rs.6000) will opt for trying
the new brand if its price is less as compared to their regular brand. On the other
hand, people with high-income group (particularly above Rs.16000) have shown
their readiness to try the new brand even if its price is more than their regular
brand. Youngsters also show their readiness out of curiosity and to know its taste,
provided its price is not too high as compared to the regular brand.
From the analysis, it can be concluded that youngsters are mainly brand switchers
because they are at the initial stage of smoking and they are not habituated to a
particular brand. Their tendency is to taste various brands and choose their favorite
brand as the one, which is not too costly and at the same time provides other
attributes, which are required for a good brand of cigarette. This age group is more
price conscious as compared to age group of 25-40 yrs because youngsters (upto
the age of 24yrs) have limited pocket money or less earning.
30
4. BUYING AND CONSUMPTION PATTERN OF REGULAR SMOKERS
AMONG VARIOUS AGE GROUPS
Consumption pattern: less than 10 cigarettes per day
BUYING PATTERN AGE GROUP

12 - 17 18 - 24 25 - 40 41 – 50 51 & TOTAL
ABOVE
NO. % NO. % NO. % NO. % NO. % NO. %
ONE OR TWO 5 100,00 13 81,25 11 78,57 9 69,23 3 60,00 41 77,36

PIECES
WHOLE PACK 0 0,00 1 6,25 3 21,43 4 30,77 2 40,00 10 18,87
OTHERS 0 0,00 2 12,50 0 0,00 0 0,00 0 0,00 2 3,77
TOTAL 5 16 14 13 5 53
The above table gives information about the regular smokers who smoke
less than 10 cigarettes a day. As we move from age group of 12-17 to 51 and
above, smokers prefer to buy cigarettes in a pack instead of buying individual
pieces. Youngsters who fall in the age group of 12-17 and 18-24 prefer to buy
individual pieces, even though they have to pay higher price only because they
cannot take it home.
Consumption pattern: 10 and more cigarettes per day
BUYING PATTERN AGE GROUP

12 - 17 18 - 24 25 - 40 41 - 50 51 & ABOVE TOTAL
NO. % NO. % NO. % NO. % NO. % NO. %
ONE OR TWO 1 100,00 6 66,67 4 44,44 2 33,33 1 25,00 14 48,28

PIECES
WHOLE PACK 0 0,00 3 33,33 4 44,44 4 66,67 3 75,00 14 48,28
OTHERS 0 0,00 0 0,00 1 11,11 0 0,00 0 0,00 1 3,45
TOTAL 1 9 9 6 4 29
The second table gives information about the smokers who smoke 10 or more
cigarettes a day. Usually cigarette smokers, who smoke more than 10 cigarettes a
day, buy in a pack. As we move from age group of 12-17yrs to 51 and above, the
31
ratio of cigarette smokers buying cigarettes in a pack increases. The interesting
point is that this ratio is higher as compared to the ratio of cigarette smokers who
smoke less than 10 cigarettes a day.
5. EFFECT OF NON AVAILABILITY OF FAVORITE BRAND ON BRAND

LOYALTY
OPTIONS AGE GROUP

12-17 18-24 25-40 41-50 51+ TOTAL
NO. % NO. % NO. % NO. % NO. %
A 3 33,33 12 36,36 10 34,48 10 50 6 66,67 41

B 0 0,00 3 9,09 2 6,90 1 5 0 0,00 6
C 1 11,11 4 12,12 9 31,03 3 15 2 22,22 19
D 5 55,56 14 42,42 8 27,59 6 30 1 11,11 34
9 33 29 20 9 100
A=GO TO ANOTHER SHOP AND BUY SAME BRAND
B=SMOKE BIDI
C=POSTPONE BUYING
D=BUY ANOTHER BRAND OF CIGARETTE
From the above table, we can analyse that as the age group increases,
respondents to their sample size increases for option A. Similarly, and it is a
decreasing trend for option D. As we move from age group 12-17 yrs to 51 yrs and
above, % number of respondents opting for options A increases. Reverse is the
situation for option D. This shows that non-availability of a favorite brand has much
effect on the youngster to switch their brand. Overall picture shows that around
34% of respondents go for another brand of cigarette, means switching their brand.
There are also respondents who either smoke bidi or postpone buying at that time
because they do not want to switch the brand.
32
33
Effect of non availability of favorite brand on brand loyality
60
50
50
40
A
33
30 B
29
30 C
D
20
20
14 15
12
9 10 9 10 9
10 8
5 6 5 6
3 34 2 3 2
01 0000 0000 0000 1 0 1 0000
0
NO. % NO. % NO. % NO. % NO. %
17-Dec 18-24 25-40 41-50 51+

Age Group
The overall picture can be represented by graph as shown :
Availability of favorite brand is most important for the smoker. If it is not available
then around 34% will go to another brand and around 25% who are brand loyal but
may be dissatisfied with the non-availability of their favorite brand. Only 41%
respondents are strong brand loyal with respect to availability of cigarette at a
shop.
FINDINGS OF ANALYSIS
34
1. Taste is more important for the entire age group and income group.
Youngsters and low-income group people are more price conscious than other age
group and income group people.
2. A cigarette smoker will not sift from one brand to another on finding the
advertisement of the new brand attractive.
3. Brand loyalty is affected by change in price.
4. Brand loyalty is affected by change in income.
5. Brand loyalty is not affected by scheme of free gift introduced by the other
brand.
6. There is no significant difference in brand loyalty between regular and

occasional smokers.
7. Youngsters are more influenced by the advertisement than other age group
smokers
35
HYPOTHESIS TESTING
1. Brand loyalty has no direct relationship with the age group.
Number of brand loyal rises with the increase in the age group. Brand loyalty is low
in age group 12-17 because they are new smokers, so they tend to taste various
brands keeping price in mind. While in age group 18-24, it is high as compared to
12-17 age group, because they are habituated to a particular brand to some
extent. For the same reason, number of brand loyal increases in age group 25-40.
Thereafter it stabilises for the next two age groups.
2.People give more importance to taste as compared to other attributes.
I wanted to know the most preferred attribute in a cigarette for the smokers and it
found out of the research that for all the income groups as well as age groups taste
is the most important attribute. Price is emerged as the second important factor.
Students and people whose income is below 3000 Rs. are more price conscious
than other age groups and income groups. Packaging has no impact on smokers.
3.The advertisement of new brand does not help in switching the brand
loyalty.
Attractive advertisement of the new brand does not influence cigarette smokers to
switch their brand. Even though the most attractive model(s) or overall good
presentation of advertisement is provided by new brand, they will stick to the
regular brand. So it fails to attract the significant smokers of other brand.
Recommendations
36
1. Availability of the favorite brand is most important for the brand loyal
cigarette smokers. Because of non-availability, they may try another brand. So
physical distribution and delivery on time at various outlets are very important.
2. Company should not increase the price of cigarette more than 20% because
after that the brand loyalty decreases at faster rate.
3. Company should not introduce free gift scheme to attract the cigarette smokers
because this people do not have any effect.
37
CONCLUSION
 Advertisement does not have much impact on the non-smoker to start

smoking.
 Friend circle is the main reason behind starting the smoking.
 Reference group (friends and shop owners) has strong effect on the selection
of particular brand.
 A cigarette smoker will not shift from one brand to another on finding the
advertisement of the other brand more attractive.
 Availability of favorite brand is of utmost importance for a cigarette smoker. If it

is not available, then around 34% of the respondent will switch to other brand and
19% will postpone their buying or may be dissatisfied with the company. So the
delivery of the cigarettes on time to various outlets (shops) is very important.
38
EPILOGUE
“ No study is fully complete in itself “ – said the elders. Even then, not taking
opportunistic shelter in this proverbial saying, I am are fully aware of the many
lacunas in this piece of survey, presented in the foregoing pages. Firstly, the
sample size should have been much larger in each category of persons sampled.
Secondly, some more intriguing questions must have been addressed to the
individuals. Had these two deficiencies been not there, the outcome of this survey
should have been more interesting and fruitful than what it is in the present form.
Alas! The master factor for these two deficiencies was paucity of time.
As this is only a pilot survey of small sample size, the same can be expanded to a
more efficient and highly useful study. As the ‘proof of the pudding is in eating’, I
sincerely hope and wish that this pudding will prove tasteful and informative to the
reader.
39

Research Methodology

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INTRODUCTION

Marketing is very innovative field. Here nothing can be assumed.

Whatever innovative idea we generate, we have to test them and they

must be supported by proved results. For this, marketing research is

very important. Consumer behaviour is one such aspect that is very

difficult to measure by guesswork. Anything you say about it, it must be

based on reliable research. In this there must be analysis on brand

loyalty of cigarette smokers and it explained the rationale below.

Thus average spending on cigarette by students (who smoke cigarettes

Cigarette is one of the products where Government is neither interested in

2. To study the change in brand loyalty in response to change in income.

Income, which depicts affordability of a consumer, is the crucial factor in

5. To study the importance that cigarette smokers attach to various attributes

6. To study the effectiveness of a good advertisement of a new brand in terms of

1. To study the effect of non-availability of favorite brand on the brand loyalty of

3. To study the reasons for starting smoking.

4. To know the role of reference groups in selection of brand of a cigarette.

To overcome the limitations of incompatibility, obsolescence, and bias, I went for

DATA COLLECTION METHOD:

Total 114 persons were contacted and interviewed. Out of these, 14

Here in this project studied is on consumer behaviour of people in mumbai.

Scope of The Study

• Some respondent were not cooperative and friendly.

(A) Brand loyalty is not affected by change in price.

(C) Brand loyalty is not affected by change in income.

(2) People give more importance to taste as compared to other attributes.

INCOME GROUP AGE GROUP

Age-wise and Income-wise sample design

TABLE SHOWING BRAND LOYALTY AMONG VARIOUS AGE GROUPS

WHO IS BRAND LOYAL?

According to the definition, brand loyalty is determined by following criteria:

NO. OF RESPONDENTS PASSING IN THREE CRITERIA

AGE NO. OF BRAND NO. OF BRAND NO. OF

X Y Z (X-X) (X-X)^2 (Y-Y) (Y-Y)^2 (Z-Z) (Z-Z)^2 (X-X)(Y- (Y-Y)(Z-Z) (X-X)(Z-Z)

4 7 8 -11,4 129,96 -10 100 -10,6 112,36 114 106 120,84

r( y,z) = [ å(Y-Y)(Z-Z)/[ å(Y-Y)^2 å(Z-Z)^2]^1/2]

r( x,z) = [ å(X-X)(Z-Z)/[ å(X-X)^2 å(Z-Z)^2]^1/2]

There is a positive relationship among all the three criteria. It is of utmost

As there is a positive interrelationship between all the three criteria, we can go

OBSERVED EXPECTED (O-E)^2/E

Degree of freedom = (r-1)(c-1)-2

At a = 5%, and degree of freedom = 2

Here c cal < ctab

TABLE SHOWING NO. OF BRAND LOYAL AT VARIOUS PRICE CHANGE

STATUS/CHANGE IN 15% 20% 25%

Who Is Brand Loyal With Respect To Change In Price?

AGE WISE BRAND LOYAL

p1=proportion of brand loyal among regular smokers=0.72

p2=proportion of brand loyal among occasional smokers=0.61

BRAND LOYAL 59 71,95 11 61,11 70 70,00

3. Gift scheme introduced by other brand of cigarette

p1=0.72 p2=0.61 Z cal. = (p1 - p2) / (P^ Q^(1/n1 + 1/n2))1/2 = 0.924

n1=82 n2=18 P^ = ( n1*p1 + n2*p2 ) / ( n1 + n2 ) = 0.70

Level of significance α =5%

As H1 is p1 > p2 , it is right tailed test.

As Z cal < Z tab , H0 is accepted.

H0: people give more importance to taste as compared to other attributes

PREFERENCE TOWARDS ATTRIBUTES

OTHERS: (AROMA, FRAGRANCE, COLOUR, PACKAGING)

ANALYSIS OF PREFERENCE TOWARDS ATTRIBUTES

TABLE SHOWING AGEWISE PREFERENCE TOWARDS ATTRIBUTES

ATTRIBUTES AGE GROUP

INCOME-WISE PREFERENCE TOWARDS ATTRIBUTES

ATTRIBUTES INCOME GROUP

n1=82 n2=18 P^ = ( n1p1 + n2p2 ) / ( n1 + n2 ) = 0.70