PROJECT REPORT

ON

FACTORS AFFECTING CONSUMER PURCHASE INTENTION

TOWARDS CONSUMER DURABLES
(A COMPERATIVE STUDY OF LG & VIDECON)

UNDER GUIDANCE
Prof. S.k.Chadha

In the partial fulfillment of the requirements

of the Final Project
for the degree of Masters in Business Administration

Submitted By
Navdeep
MBA International Business
University Business School
Panjab University, Chandigarh

ACKNOWLEDGEMENT
I am overwhelmed with pleasure and deep sense of gratitude towards University Business School,
Chandigarh for giving me such an opportunity to do the research project which has opened my vision towards
rich experience of the theory implications and practical applications studied in the MBA course.
I express a heartfelt thanks to my guide Prof. S.K.Chadha who has helped me in choosing and doing this project.
He provided me with guidance, inspiration, perspective and stimulating discussion throughout the process of this
project. He has acted as the constant motivating force for directing me towards right path for the completion of
this project.

Dated: March 21, 2014

Place: Chandigarh

Submitted By

Navdeep
MBA International Business
University Business School
Panjab University, Chandigarh

DECLARATION
I, Navdeep declaring that all the information given in this project report is
true and correct as far as I know.
I am also declaring that all the work in this project is done by me and not
copied from anywhere.

Navdeep
MBA International Business
University Business School
Panjab University, Chandigarh

CERTIFICATE
This is to certify that Mr. Navdeep who is the student of University
Business School, Panjab University, Chandigarh has completed his project on
the topic FACTORS AFFECTING CONSUMER PURCHASE INTENTION TOWARDS
CONSUMER DURABLES (A COMPERATIVE STUDY OF LG & VIDECON) under

my guidance.

He has done this project by himself. I wish him success in future.

Prof. S.K.Chadha
University Business School

PREFACE
There is a famous saying The theory without practical is lame and practical without theory is
blind.
This modern era is era of consumers. Consumers satisfy themselves according to their needs and
desires, so they choose that commodity from where they extract maximum satisfaction.
It has been identified that in the beginning of 21st century the market was observed a drastic
change. The successful brand presents itself in such a way that buyers buy them in special values
which match their needs. Marketing is an important part of any business and advertisement is the
most important part of marketing.
Our institution has come forward with the opportunity to bridge the gap by imparting modern
scientific management principle underlying the concept of the future prospective managers.
To the emphasis on practical aspect of management education the University Business School,
Panjab University, Chandigarh has with a modern system of practical training of repute and
following management technique to the student as integral part of Master degree. in according
with the above obligation under going project in FACTORS AFFECTING CONSUMER
PURCHASE INTENTION TOWARDS CONSUMER DURABLES ( A COMPERATIVE
STUDY OF LG & VIDECON ) Certainly this analysis explores my abilities and strength to its
fullest extent for the achievement of organization as well as my personal goal.

(Navdeep)

CONTENTS
1. Acknowledgement
2. Declaration
3. Certificate
4. Preface
5. Introduction
5.1 Worldwide consumer electronics market
5.2 Indian Consumer Durables Industry
5.3 Brand in consumer durable sector
5.4 Industry analysis
5.5 Market trends
5.6 Market segment
6.
7.
8.
9.
10.
11.
12.
13.

scope of study
Review of Literature
Research methodology
Limitation of the study
Data analysis
Conclusion and Suggestions
References
Questionnaire

2
3
4
5
7
8
9-10
11
12-14
15
15-16
17
17-18
19-22
22
23-34
34
35-36
37-39

5. Introduction
Every company has a prime goal of building positive relationships with the customer by creating
value. Companies can achieve this goal by two ways: physically (design, taste, features, etc.) and
psychologically (brand equity, credibility, advertisements, etc). Companies must present their
products with a unique and superior quality to gain the competitive advantage. By achieving
these goals, companies can increase their cash flow, profitability, loyalty and brand extension
opportunities. However, customers are faced by a myriad of products. They perceive each
6

product with a different perception, which plays an important role in construction of purchasing
intentions..This study is conducted to study factors which are linked with consumer purchase
intention. We intend to proceed with the research keeping the Indian Consumer Durables
Industry as our main focus.
These four factors studied are
1)
2)
3)
4)

Brand equity
Price
Advertisement
Brand credibility

Brand equity: It is a blend of brand awareness, brand association, perceived quality and brand
loyalty. All the four attributes of brand equity affects the brand perception, which ultimately
affects the purchase intention.
Price and brand origin country: The price of product has always been the behind the success
and failure of the brand. Nowadays consumers are also conscious about the place the brand
comes from.
Advertisement: Advertisements is the first impression that the brand makes before the
consumer. Hence it is of utmost importance for any business to succeed.
Brand credibility: It is the consumers believability in the product information contained in the
brand, which requires that the consumer perceives the brand as having ability and willingness to
deliver what has been promised.

5.1

Worldwide consumer electronics market

The consumer electronics industry has witnessed a unique growth over the past few years. This
growth can be attributed to the increasing effect of state of the art electronic devices on the
market. The consumer electronics industry is ushering in the dawn of Convergence. It is the
confluence and merging of hitherto separated markets of digital based audio, video and
information technology, removing entry barriers across the market and industry boundaries. This
convergence of technologies has resulted in a greater demand for consumer devices, be they
portable, in-home (mobile phones, digital camera) or in-car (CD/DVD players), offering multiple
functions.
7

The revolution brought about by Digital technology has enabled the consumer electronics sector
to profit from the growing interaction of digital applications such as: camcorders, DVD
player/recorder, still camera, computer monitor, LCD TV etc. It has also witnessed the
emergence of mobile telecommunications technology, incorporating both digital visual and
digital MP3 capabilities. The computer industry has also benefited by being able to make its way
into consumer's living rooms. HDTV's with VGA connections and SD/MMC card slots, personal
media players, and Microsoft-based Media Center PCs have pushed the two industries even
closer together than before.
The India Consumer Electronics Report provides industry professionals and strategists, corporate
analysts, electronics associations, government departments and regulatory bodies with
independent forecasts and competitive intelligence on India's consumer electronics industry.
Indias consumer electronics devices market, defined as the addressable market for computing
devices, mobile handsets and AV products, is projected at about US$29.4bn in 2011. This is
expected to increase to US$50.6bn by 2015, driven by rising incomes and growing affordability.
Only nine out of 1,000 people in India own a computer, one-fifth of the level in China, while
Indian handset population penetration is about 57%.
Spending on consumer electronics devices is projected to grow at an overall CAGR
(compounded annual growth rate) of 14% through 2015, with the key segments including lowcost mobile handsets, color TVs, set-top boxes and notebook computers. In 2010 demand for
LED TV sets grew strongly, and touch screen phones were another growth area.
Consumer electronics manufacturers, after suffering a rare dip in sales last year, are hoping to
bounce back in 2010 with smart phones, e-readers and smaller laptops leading the way.

5.2 Indian Consumer Durables Industry :

The Indian Consumer Electronic Industry is set for a sustained growth over the long term,
powered by the rise in the disposable income, increased product awareness, affordable
pricing, overall development in services and industrial sectors and infrastructure
development in suburban and rural areas. The young generation, which is primarily
dominating the Indian consumer market, is becoming increasingly sophisticated and willing
to upgrade to new technologies and latest products.

To keep pace with the fast changing Indian consumer durables market, firms have to
differentiate their products in the areas of relevance to the consumers, innovate in technology,
develop a strong global network, and find more effective ways of promotion and distribution.
The products and the approach to the market need to be customized to suit the unique needs
of the consumers. Several Indian and MNC players are looking to strengthen their presence
in India to leverage this opportunity
The consumer durables sector raked in revenues worth US$ 7.3 billion in FY12. Growth has
been healthy over the years, recording a compounded annual growth rate (CAGR) of 10.8 per
cent over FY03-12. The market is expected to double at a CAGR of 14.8 per cent to reach
US$ 12.5 billion in FY15 from US$ 6.3 billion in FY10.

Demand for consumer durables in India has been growing on the back of rising incomes.
This trend is set to continue even as other factors like rising rural incomes, increasing
urbanization, a growing middle class, and changing lifestyles changes aid demand growth in
the sector. Consequently, industry analysts expect the sector to post a CAGR of 15 per cent
over 2010-15. Increasing electrification of rural areas and wide usability of online sales
would also aid growth in demand.
The Government of India (GOI) has allowed 100 per cent foreign direct investment (FDI) in
electronics hardware-manufacturing under the automatic route. The government has also
reduced the excise duty to 6 per cent on light-emitting diode (LED) lamps and LEDs required
for manufacture of such lamps. Further, Electronic Hardware Technology Park (EHTP)
Scheme provides benefits, such as duty waivers and tax incentives, to companies which
replace certain imports with local manufacturing
The consumer durables market is divided into two segments durables, also known as the
brown goods (television, digital camera, audio-video systems, computers, electronic
accessories, etc) and consumer appliances or the white goods (air conditioners, refrigerators,
microwave ovens, other household appliances, etc.).

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In its initial years, the sector relied greatly on media and advertising for consumer
penetration. Liberalization of markets in late 1990s saw the entry of global players like
Samsung and LG and a shift in focus towards product innovation. Accessibility to high-end
products was, however, low till mid 2000s. Last few years has seen high end and
inspirational products like air conditioners and High Definition TVs gain stronghold in the
market.
The consumer durables sector is marked by stiff competition between market players to
launch newer models and versions of products, discounts and schemes. The key players in
the consumer durables sector are MNCs like LG, Samsung, Blue Star, Daikin, Hitachi, Sony,
10

etc. LG and Samsung account for the largest shares of the market, and it is estimated that
Indias share in their global revenues will double to 12 per cent in FY15 from 6 per cent in
FY10 and similarly from 2.5 per cent to 5 per cent respectively.
5.3 BRANDS IN CONSUMER DURABLE SECTOR
MNCs
LG )
SAMSUNG )
HYUNDAI)

NATIONAL
KOREA

TCL )
HAIER )

CHINA

PHILIPS )

HOLLAND

PANASONIC )
SHARP )
HITACHI )
SANSUI )
AKAI )
AIWA
WHIRLPOOL )

JAPAN

ONIDA
VIDEOCON
BPL
GODREJ
VOLTAS
IFB

REGIONAL
BUSH
CROWN
SALORA
T-SERIES
WESTON
OSKAR

Indias Consumer Durable industry is dominated by some of the top players like Voltas,
Kelvinator, Allwyn and Godrej, but after liberalization many foreign companies has also
entered the consumer durable industry in India. Some of the major category of good coming
under consumer durable industry is washing machines, air-conditioners, refrigerators and
CTVs.

11

5.4 Consumer Durables industry analysis

Porters Five Forces Model

Although the Indian Consumer durables market is highly competitive, the high growth rates
that it promises make it a good industry to enter.

B a rg a in i
n g
Po w e r o f
S u p p lie r
Ts h r e a
t o f
S u b s ti
tu te s

R iv a lr y
A m o n g st
E x is t in g
F ir m s

B a rg a in i
n g
Po w e r o f
C u s to m e
rs

T h re a t
o f N e w
E n tra n
ts

Threat of New Entrants

Capital Requirements and Economies of Scale:
In the case of retail stores, there is lack of good distribution network and lack of
knowledge of consumer buying patterns which calls for large investment in distribution
channels and research to improve the reach. Economies of scale is required in as there are
large fixed costs associated with setting up a manufacturing plant as there are problems of
under-developed infrastructure, erratic supply of water and electricity in many areas, a high
cost of capital and continuous up gradation of technical and managerial skills.
Supply Chain Issues:
The existence of too many intermediaries in the supply chain coupled with issues in
12

logistics, management of POS data, pilferage and distribution and inventory management,
eats away the profits of the retailer, making it unattractive for new entrants
Product Differentiation:
Though the awareness is increasing amongst the Indian consumers, retailers and
manufacturers are unable to increase brand loyalty. The Indian consumer is very price
sensitive and hence he keeps hoping from one place to another, hunting for good deals.
Switching costs vary amongst the electronic categories. For instance, the switching costs in
mobile phones are high, as consumers who are used to one brand find it difficult to use
another brand. However, for televisions, cameras, and even laptops, consumers are ready to
try new brands based on price for features offered and service quality or reputation of the
brand.
Government Policy:
By encouraging manufacturing zones and improving the infrastructure, the government is
developing the entire manufacturing sector, which will help in boosting the electronics
production in India, which has traditionally been a very small slice of the overall
manufacturing segment. While the government is trying to encourage the growth of the retail
and manufacturing industries in India, there are some policies which need to be looked at.
The duty structure for electronics adds up to 30% which is a significant amount. This is mainly
due to the multiple tax structure which consists of 12% VAT, 8% excise, 4% Goods and
Service Tax, 2% Central Sales Tax and Local taxes.

The FDI policy limits to 51% stake for foreign investors, which forces foreign retailers to use
franchise arrangements, and in the manufacturing sector, the FDI is 100% favouring foreign
investors

Existence of the grey market due to poor government regulations to keep counterfeits at bay
coupled with the lack of consumer knowledge and legal recourse encourages manufacturers
to churn out spurious products which can lead to lost sales of the tune of 10-15%.

Red tapes and bribery in the Indian government system is also a stumbling block
for new retailers or manufacturers.
Taking into consideration the positives and negatives, India still offers a good chance for new
entrants and hence the threat is considered to be low to moderate.
Bargaining Power of Buyers
With the emergence of new channels like the internet, auction sites like rediff.com, the
general consumer (buyers) who usually purchase electronic goods from electronic retailers,
hyper marts, music and book stores, can easily compare prices and go for the best deals in
town. Though the better brands can command a higher price, buyers are constantly
13

comparing prices, service quality and product features and hence commands a moderate to
high power in this industry.
Large chain stores like Tata Croma, E-Zone have distinct advantage over the smaller stand
alone stores as they can demand good discounts suppliers. As brands play an important role
in the electronics market, the retailers find it difficult to integrate backwards to produce their
own electronic goods as in the case of private food labels. Considering the market dynamics
and the size of the market, the buyers have moderate to high power in the consumer
electronics industry
Bargaining power of suppliers
The biggest threat is the trend of large suppliers integrating forward as in the case of Dell,
Apple, Nokia, by setting up their own retail outlets. However, in the Indian electronic
context, there are a large number of suppliers in the market who face overcapacities, poor
distribution, large duties, and declining margins and hence the bargaining power for suppliers
is less and competitive pricing comes into play. With more companies setting up the
manufacturing plants in India, like Nokia in the south, the bargaining power of suppliers is
definitely low to medium. Product differentiation is more and more difficult in the consumer
electronics industry and the existence of cheap Chinese suppliers also adds woes to the
suppliers.
Intensity of Rivalry amongst existing players
There are few key players in the consumer electronic market, but as they are part of big
Indian business groups, they have a lot of muscle power and hence the intensity of rivalry
can be placed at a mid level. Though factors such as high transport and storage costs, lack of
differentiation, large investments, and low switching costs tend to intensify the rivalry, the
fact that the market is only at the nascent stage with promises of high growth rates of 16%
coupled with the diverse needs of customer groups, and an untapped rural market; the
existing players seem to be enjoying a relatively low rivalry.

Threat of Substitutes
The threat of substitutes for the manufacturers of these electronic goods is medium to high
unlike the case of white goods. As new technology enters the market at increasing pace, the
manufacturers and retailers need to understand the consumer needs. For instance the VCR
was replaced by the DVD player which will soon be replaced by a Blue Ray Player. The
incorporation of camera in the mobile phones is definitely a threat to the camera market.
Hence product innovations in this segment are very high and players in this industry need to
mindful of this.

14

5.5 Market trends for the future

Estimates provided by Corporate Catalyst India (CCI) indicate that the consumer durables
market is expected to double at 14.8 per cent CAGR to USD12.5 billion in FY15 from
USD6.3 billion in FY10. Further, demand from rural and semi-urban areas is expected to
expand at a CAGR of 25 per cent to USD6.4 billion in FY15 from USD2.1 billion in FY10.
All major companies in this sector have elaborate expansion plans for the near future. Japans
Panasonic plans to invest USD208 million by 2014 by setting up manufacturing units and an
advanced R&D centre. Samsung plans to invest USD94 million to expand capacity by 2012.
Market leader LG has outlined around USD292 million for enhancing production capacity
and strengthening its LG brand shop network by 2012.

5.6 Different Segments of Indian Consumer

The Socialites
Socialites belong to the upper class. They prefer to shop in specialty stores, go to clubs on
weekends, and spend a good amount on luxury goods. They are always looking for
something different. They go for high value, exclusive products. Socialites are also very
branding conscious and would go only for the best known in the market.
The Conservatives
The Conservatives belong to the middle class. The conservative segment is the reflection of
the true Indian culture. They are traditional in their outlook, cautious in their approach
towards purchase; spend more time with family than in partying and focus more on savings
than spending. Slow in decision making, they seek a lot of information before making any
purchase. They look for durability and functionality but at the same time is also image
conscious.
The Working Women
The working woman segment is the one, which has seen a tremendous growth in the late
nineties. This segment has opened the floodgates for the Indian retailers. The working
woman today has grown out of her long-standing image of being the homemaker. Today, she
is rubbing shoulders with men, proving herself to be equally good, if not better. Working
women have their own mind in decision to purchase the products that appeal to them.
The Youth
The rise of next generation has been written about with unbridled optimism and
Enthusiasm, based on the coming of age of liberalization children. They are global in their
worldwide view and have been exposed to enormous information unlike their parents raised
amidst a consumption-friendly and consumption encouraging social discourse. They are
expected to be at the forefront of creating a new, modern, west-embracing consumer society,
as well as yield the demographic dividend that will drive economic growth.

15

Factors that will drive growth in this sector

Increased disposable incomes and greater accessibility to credit is growing the consumer
base, especially in the middle and upper sections of the population.
Relaxation of tariffs and increased liberalization amid a favorable FDI environment is
leading to expansion in India, increased investments and greater R&D. Key players like
Whirlpool, Hitachi, and Panasonic announced huge investment plans in the coming years.
LG Electronics Inc. is a South Korean multinational electronics company headquartered
inYeouido-dong, Seoul, and a member of the LG Group chaebol. The company operates its
business through five divisions: Mobile Communications, Home Entertainment, Home
Appliances, Air Conditioning, and Energy Solutions. It is the world's second-largest
television manufacturer (after Samsung Electronics), and the world's fourth-largest mobile
phone maker by unit sales in the third quarter of 2013
LG electronics was established on October 1, 1958 (As a private company) and in 1959, LGE
started manufacturing radios, operating 77 subsidiaries around the world with over 72000
employees worldwide it is one of the major giants in consumer durable worldwide. The
company has many as 27 R&D centers and 5 Design Centers.

Videocon Industries Limited is a large diversified Indian company headquartered

in Gurgaon, Haryana. The group has 17 manufacturing sites in India and plants in Mainland
China, Poland, Italy and Mexico. It claims to be the third largest picture tube manufacturer in
the world. The group is a US$5 billion global conglomerate.
Durables
In India, the group sells consumer products like color televisions, washing machines, air
conditioners, refrigerators, microwave ovens and many other home appliances, through a
multi-brand strategy with the largest sales and service network in India.
Since the entry of Korean Chaebol and their rising popularity in the Indian market, Videocon
from a stand-point of market leader has seen a slow decline to become a no 3 player in India.
The company continues to do well in the washing machine and refrigerator segment but has
significantly lost ground in the durables space.
Hence, we intend to investigate the effect of the four factors on consumer purchase intention
pertaining to these companies products only.

6. Scope of the study

16

Products are bundles of tangible and intangible attributes designed to satisfy the consumer. In
order to succeed as a marketer, creating a strong brand image can be a powerful marketing
strategy to reduce uncertainty about evaluation of a product and to increase the purchase
intentions. A well-known brand name associated with a positive brand image creates
competitive advantage in terms of increasing consumers interest, positive evaluation of a
product and encourages repeated purchases. Sigmund Freud suggested that a persons
purchasing decisions are affected by subconscious motives that even the buyer may not fully
understand. Since each individual is a unique product of heredity, environment and
experience it, predicting such a strange behavior of people is a huge and complicated task,
filled with uncertainties, risks, and surprises. Still, there is no denying to the fact that
understanding how consumers make purchase decisions can help marketing managers in
several ways. In regard of the same, it becomes an important study of research with many
conclusions drawn in the past, yet, many more has to come up in the future. We intend to tap
onto the scope of this research by restricting our study to city Chandigarh.

7. Review of Literature
Brand equity - Brand equity is considered as an important part of the brand building. Brand
equity is an incremental utility or value which brand adds to the product. It is an important
metric for evaluating the impact of brand perception on purchase intention. It is a blend of
brand awareness, brand association, perceived quality and brand loyalty. All the four
attributes of brand equity affects the brand perception, which finally affects the purchase
intention.
Price - Consumers make buying decisions every day, and the buying decision is the focal
point of the marketers effort. The central question of concern for the marketers is: How do
consumers respond to their brand? Most large companies research on the purchase
intention of the consumer because it is this intention that leads to the actual buying of the
product. There are certain variables which help us generalizing the consumers perception of
the brand choices available. One such variable is price. Does consumer think an expensive
brand is superior in quality? At the end of this study, we shall be able to give a relationship
between purchase intention of the consumer and price, pertaining to durables sector in
India, through a thorough analysis of the variables stated above.
Advertisement - A consumer can obtain trustworthy perception through advertising
endorsers recommendation and endorsement and a company can therefore increase its
competiveness. Advertising endorser can connect product value by deepening consumers
impression and transfer their feelings on a product/service. So, it is suggested that business
advertisers hire a high credibility endorser (an idol or a celebrity) to promote their products
17

in order to enhance consumer purchase intention . Researchers have found that an

advertisement endorser with positive characteristics and personality can do wonders for the
brand and hence, enhance consumers purchasing intention for the brand.
Brand credibility It is broadly defined as the believability of an entity's intentions at a
particular time. Credibility has two main components: expertise and trustworthiness. Thus,
brand credibility is the believability of the product information contained in a brand, which
requires that consumers perceive the brand as having the ability (expertise) and willingness
(trustworthiness) to deliver continuously what has been promised (brands can function as
signals because if and when they do not deliver what is promised, their brand credibility will
erode). Although there is uncertainty about quality of the brand which is associated with the
consumer perceived risk, and consumer want to be risk averse in most context. Risk aversion
affects consumer perception and purchasing intention. Risk-averse consumers feel threatened
by ambiguous and uncertain product assessments. So brand credibility helps in lower down
the consumer risk by becoming credible and consistent symbols of product quality

A consumers attitude and assessment and external factors construct consumer purchase
intention. When consumers buy a product, they will compare it. A product with a good brand
image can make consumers have a high level satisfaction and confidence to purchase it
Purchase intention can measure the possibility of a consumer to buy a product, and the higher
the purchase intention is, the higher a consumers willingness is to buy a product.
Consumers purchasing intention is significantly dependent on the four variables namely,
brand equity, price, advertisement and brand credibility. This research has been very
important for the businesses in the past and will remain so in the future as well. To
summarize, purchase intention indicates that consumers will follow their experience,
preference and external environment to collect information, evaluate alternatives, and make
purchase decision.

8. Research Methodology
18

Main Objective
To study the factors affecting consumer purchase intention
Specific Objectives
1. To study the effect of brand equity on consumer purchase intention
2. To study the effect of price on consumer purchase intention
3. To study the effect of advertisement on consumer purchase intention
4. To study the effect of brand credibility on consumer purchase intention

Hypothesis
We seek to test the following four alternate hypotheses.
H1: Brand equity affects consumer purchase intention.
H2: Price affects consumer purchase intention
H3: Advertisements affects consumer purchase intention
H4: Brand credibility affects consumer purchase intention.

Elements of research design:

(i)

Purpose of Study: Hypothesis Testing

The purpose of the study is hypothesis testing as we are hypothesizing that the brand
perception affects the purchase intentions of the consumer. The number of hypothesis
would be equal to the number of variable taken by us.

(iii)

Time Horizon: Cross Sectional Study

We are collecting the data only once in order to prove the hypothesis, true or false
So, it is a cross-sectional study.

19

PRICE

Figure Dependent and Independent variables

Variables: Dependent and Independent variables

There are two types of variables used in the study i.e. Independent and dependent variables. An
independent variable can be easily compared to the cause and the dependent variable to the effect
produced by that cause.

The variables which are used in the study are as follows:

Independent variables
1.
2.
3.
4.

Brand equity
Product price
Advertisement ( in terms of information and value corruption )
Brand credibility

Dependent variable
1. Purchase Intentions

Scale Used
20

Likert Scale will be used to get the questionnaires filled. It is a psychometric scale. When
responding to a Likert questionnaire item, respondents specify their level of agreement or
disagreement on a symmetric agrees-disagree scale for a series of statements. The Likert scale is
the sum of responses on several Likert items. The format of a typical five-level Likert item:
1.
2.
3.
4.
5.

Strongly disagree
Disagree
Neither agree nor disagree
Agree
Strongly agree

Selecting Sample
The primary source of selecting data for research is Questionnaire to be filled by convenience
sampling. Students residing in Panjab university hostels are our population.

SAMPING PLAN
Sampling Type
Convenience sampling

Sample Selection
Students residing in Pnajab university hostels will be the sampling unit. In
total, eight hostels will be selected at random (four boys hostel and four
girls hostel).Students residing in the selected hostels will be the respondents
who will be filling questionnaire for LG & Videocon.
The responses for LG & Videocon will be taken from all the selected hostels
in the following manner- (number in the bracket shows the number of
questionnaire to be filled)

21

Boys hostel
1

Sample Size
160 respondents
girls hostel)
.Analysis of Data

Questionnair
Questionnai
e
re
LG (20)

LG (20)

VIDEOCON
(20)
VIDEOCON
(20)

4
Girls hostel
1

LG (20)

LG (20)

(80 each from boys and

To arrive at pertinent 3
analysis, the collected data will be
VIDEOCON
put to a planned
statistical analysis using SPSS
(20)
package.
After 4
scoring the questionnaires, the
VIDEOCON
data of all the
respondents
will be pooled and
(20)
tabulated. To arrive at
certain conclusion regarding the
hypothesis advanced in the process investigation, the description of the statistical tools which we
intend to apply for the analysis of data is as follows:
a) Correlation Analysis: The relationship between independent variables and dependent
variable.
b) Regression analysis: The regression analysis was done to examine the significant
effect of independent variables on the dependent variable.

9. Limitations of the study

1. The study is merely on the basis of comments and opinions provided by the people of tricity.
2. According to our assumption, the consumer purchase intention depends mainly upon four
attributes. However, there can be other attributes which affects the brand perception.

22

DATA ANALYSIS
OF

FACTORS AFFECTING CONSUMER PURCHASE

INTENTION TOWARDS
CONSUMER ELECTRONIC PRODUCTS
(A COMPERATIVE STUDY OF LG & VIDECON)

10.

CONTENTS

23

1. Exploratory data analysis

1.1.
Age
1.2.
Gender
1.3.
Marital status
1.4.
Occupation
1.5.
Annual income
1.6.
Highest qualification
2. Reliability Test
3. Normality test
4. Hypothesis testing
4.1.
Correlation analysis
4.2.
Regression analysis
4.2.1. Demographic analysis chi square analysis
5. Marketing Implementation

DATA ANALYSIS
To arrive at pertinent analysis, the collected data was put to a planned statistical analysis using
SPSS package. After scoring the questionnaires the data of all the people was pooled and
tabulated. To arrive at certain conclusion regarding the hypothesis advanced in the process
investigation, the description of the statistical tools which were applied for the analysis of data, is
as follows:.

1.

Exploratory Data Analysis

1.1 AGE
24

DURABLES
VIDEOCON
LG

Age Group

Frequency

Percent

18-24

66

82

25-30

14

18

Total

80

100.0

18-24

64

80.0

25-30

15

19

>30

Total

80

100.0

Age(VIDEOCON)
18-24

25-30

>30

4th Qtr

Age (LG)
18-24

25-30

19%

18%

>30

1%

80%

83%

Interpretation
Above graphs show that VIDEOCON: 82% of the respondents are in age group 18-24, 18% of the respondents are in
age group 25-30.
LG: 80% of the respondents are in age group 18-24, 19% of the respondents are in age group
25-30 and 1% of the respondents are in age group >30.
1.2

GENDER
DURABLES
VIDEOCON

LG

Gender

Frequency

Percent

MALE

40

50.0

FEMALE

40

50.0

Total

80

100.0

MALE

40

50.0

FEMALE

40

50.0

Total

80

100.0

25

Male

50%

Female

50%

Interpretation
Above graph shows that 50% of the respondents are males, 50% of the respondents are females
(in both cases).

1.3 MARITAL STATUS

DURABLES
VIDEOCON
LG

Marital Status
Single
Married
Single
Married

Frequency

Percent

80

100.0

2.5

78

97.5

80

100.0

Interpretation
For VIDEOCON, all the respondents are single. For LG, 2.5% of the respondents are married
and 97.5% of the respondents are single.

1.4 OCCUPATION
DURABLES

Occupation

Frequency

Percent

VIDEOCON

STUDENTS

80

100.0

LG

STUDENTS

80

100.0

Interpretation
26

All the respondents are students (in both cases).

1.5 ANNUAL HOUSEHOLD INCOME (in lakhs)

DURABLES
VIDEOCON

Income

Frequency

Percent

1-3

39

48.8

3-7

23

28.8

7-10

14

17.5

>10

5.0

1-3

38

47.5

3-7

23

28.8

7-10

13

16.3

>10

7.5

LG

Income (LG)
1-3 lakhs

3-7 lakhs

7-10 lakhs

>10 lakhs

16%

7%
47%

29%

Income (VIDEOCON)
1-3 lakhs

3-7 lakhs

7-10 lakhs

>10 lakhs

17%

5%
49%

29%

27

Interpretation
Above graphs show that 49% of the VIDEOCON respondents and 47% of the LG respondents
have annual salary between 1 & 3 lakhs.Similarly, for other income groups.
1.6 HIGHEST QUALIFICATION
DURABLES
VIDEOCON

Qualification

Frequency

Percent

Under Graduate

LG

8.8

Graduate

49

61.3

Masters

24

30.0

Under Graduate

17

21.3

Graduate

41

51.3

Masters

19

23.8

3.8

Doctorate

Highest Qualification Highest Qualification(LG)

(VIDEOCON)
UG
Graduate
UG

Graduate

1% 12%

Masters

Masters

Doctorate

4%
24%

87%

21%

51%

Interpretation
Above graphs show that 12% of the VIDEOCON respondents and 21% of the LG respondents
are Undergraduate. Similarly, for other qualification groups.

28

2. Reliability Test
Section
Brand Equity
Price
Advertisement
Brand Credibility
Purchase Intention

Cronbach's Alpha

N of Items

.791
.852
.649

8
5
5
5
2

.855

.632

Interpretation
The above table showing the Cronbachs Alpha values of each section(greater than 0.6) shows
that the scales used are reliable.

3. Normality Test
Kolmogorov-Smirnova
Statistic

df

Shapiro-Wilk
Sig.

Statistic

df

Sig.

avg1

.101

160

.000

.983

160

.042

avg2

.097

160

.001

.978

160

.012

avg3

.094

160

.002

.981

160

.029

avg4

.120

160

.000

.968

160

.001

avg5

.149

160

.000

.949

160

.000

Interpretation
Since the p-values of the averages are found to be less than 0.05, the above normality table
shows that the data collected is not normal(Shapiro-Wilk test).Hence this finding demands nonparametric testing.

.
29

4. Hypothesis Testing
4.1. Correlation Analysis
DURABL
ES

VIDEOC
ON

LG

a.

Depend
ent
variable
Avg5

Avg5

Avg1

Avg2

Avg3

Avg4

Avg5

Correlati
on
coefficie
nt

.473**

.627**

.092

.447**

1.000

Sig. (2tailed)

.000

.000

.416

.000

Correlati
on
coefficie
nt

.707**

.605**

.250*

.593**

1.000

Sig. (2tailed)

.000

.000

.025

.000

Spearman's
rho

Hypotheses- (VIDEOCON)

H0: Consumer Purchase Intention is independent of Brand Equity (null hypothesis)

The p- value for the relationship between Brand Equity and Consumer Purchase Intention was
obtained as .000 which is less than 0.05. Our null hypothesis is hence rejected .On the evidence
of this data; it appeared to be that there is a relationship between Brand Equity and Consumer
Purchase Intention in the population.
H0: Consumer Purchase Intention is independent of Price (null hypothesis)
The p- value for the relationship between Price and Consumer Purchase Intention was obtained
as .000 which is less than 0.05. Our null hypothesis is hence rejected .On the evidence of this
data; it appeared to be that there is a relationship between Price and Consumer Purchase
Intention in the population.

30

H0: Consumer Purchase Intention is independent of Advertisement (null hypothesis)

The p- value for the relationship between Advertisement and Consumer Purchase Intention was
obtained as .416 which is more than 0.05. Our null hypothesis is hence accepted .On the
evidence of this data, it appeared to be that there is no relationship between Advertisement and
Consumer Purchase Intention of the population.
H0: Consumer Purchase Intention is independent of Brand Credibility (null hypothesis)
The p- value for the relationship between Brand Credibility and Consumer Purchase Intention
was obtained as .000 which is less than 0.05. Our null hypothesis is hence rejected. On the
evidence of this data, it appeared to be that there is a relationship between Brand Credibility and
Consumer Purchase Intention of the population
b. Hypotheses- (LG)
H0: Consumer Purchase Intention is independent of Brand Equity (null hypothesis)
The p- value for the relationship between Brand Equity and Consumer Purchase Intention was
obtained as .000 which is less than 0.05. Our null hypothesis is hence rejected .On the evidence
of this data; it appeared to be that there is a relationship between Brand Equity and Consumer
Purchase Intention in the population.
H0: Consumer Purchase Intention is independent of Price (null hypothesis)
The p- value for the relationship between Price and Consumer Purchase Intention was obtained
as .000 which is less than 0.05. Our null hypothesis is hence rejected .On the evidence of this
data; it appeared to be that there is a relationship between Price and Consumer Purchase
Intention in the population.
H0: Consumer Purchase Intention is independent of Advertisement (null hypothesis)

31

The p- value for the relationship between Advertisement and Consumer Purchase Intention was
obtained as .030 which is less than 0.05. Our null hypothesis is hence rejected .On the evidence
of this data; it appeared to be that there is a relationship between Advertisement and Consumer
Purchase Intention of the population.
H0: Consumer Purchase Intention is independent of Brand Credibility (null hypothesis)
The p- value for the relationship between Brand Credibility and Consumer Purchase Intention
was obtained as .000 which is less than 0.05. Our null hypothesis is hence rejected. On the
evidence of this data, it appeared to be that there is a relationship between Brand Credibility and
Consumer Purchase Intention of the population.
4.2 Regression Analysis
DURABLES

Section

VIDEOCON

LG

Sig.

Rec_avg1

.376

.507

Rec_avg2

2.027

.001

Rec_avg3

-.141

.783

Rec_avg4

.718

.230

Constant

-9.856

.002

Rec_avg1

2.319

.001

Rec_avg2

.144

.763

Rec_avg3

.542

.362

Rec_avg4

.096

.870

Constant

-11.533

.000

Interpretation
For VIDEOCON, p-value of section2 (PRICE) is found to be 0.01(less than 0.05), which shows
that this variable is significant. On the other hand, for LG, p-value of section1 (BRAND
EQUITY) is 0.01(less than 0.05) showing the significance of this variable .Hence, the regression
equations are as followsVIDEOCON:

ln(PI) = -9.856 + 2.027 (price)

The above equation implies that for one unit change in price, consumer purchase intention
changes by 2.027 units, in the same direction.
32

LG:

ln(PI) = -11.533 + 2.319 (brand equity)

The above equation implies that for one unit change in brand equity, consumer purchase
intention changes by 2.319 units, in the same direction.
DURABLES
VIDEOCON
LG

Scale item
P12
P3
P8

Constant

B
1.124

-10.694
1.635
-14.866

1.543

Sig
0.023
0.024
0.001

For VIDEOCON, since the p-value is 0.023(less than 0.05), item P12 (PRICE) is the most
influential item. Hence, the regression equation isln(PI) = -10.694 + 1.124 (P12)
For LG, since the p-values of P3 and P8 are 0.024 and 0.001 (less than 0.05) respectively, these
items are the most influential. Hence, the regression equation isln(PI) = -14.866 + 1.635 (P3) + 1.543 (P8)
4.2.1 Demographic Analysis (Chi-square test)

Value

DURABLES

Asymp. Sig. (2sided)

Pearson ChiSquare
VIDEOCON

df

Likelihood Ratio
Linear-by-Linear
Association
N of Valid Cases

12.907a

.012

14.852

.005

5.338

.021

80

Interpretation

33

Above table shows the association of gender with P12, the most influential item of section2
(PRICE).Hence, this leads to the finding that for Videocon, consumer purchase intention varies
with gender.
Hence, it can be concluded that Videocon needs to work out some gender based strategy to
increase sales.

5. Marketing Implementation
According to the findings of the study, it is seen that 60% women have high probability
of purchasing Videocon products. On the other hand such percentage for men is lower
than even a half of total male population (45%). So it is evident that Videocon is behind
its competitors with respect to male segment. Hence Videocon needs to work to attract
male customers. So a strategy leading to the solution of this problem would be beneficial
to them.

11.

Conclusion and recommendations

The consumer durables industry in India is set for sustained growth over the long term,
fuelled by favourable consumer demographics, overall growth in services and industrial
sectors and infrastructure development in suburban and rural areas. Several Indian and
MNC players are looking to strengthen their presence in India to leverage this
opportunity.
Success in the long-term will require firms to develop a wide and robust distribution
network, differentiate their products in areas of relevance to the consumer and innovate in
the areas of promotion, product financing, etc. The product and approach to market need
to be customised according to demographical changes So that it suits the unique needs of
the Indian market.

34

References:
Moradi, H & Azim Zarei (2001): The Impact of Brand Equity on Purchase Intention and Brand
Preference-theModerating Effects of Country of Origin Image.
Jacoby, J & David Kyner (1973): Brand loyalty vs repeat purchasing power
Cobb-Walgren, C & Naveen Dhontu (1995): Brand Equity, Brand Preference, and purchase
Intent
Belen del Rio, A,Rodolfo Vazquez & Vctor Iglesias (2001): The effects of brand
associations on consumer response
Srinivasan, V & Chan Su Park (2005): An Approach to the Measurement, Analysis,
andPrediction of Brand Equity and Its Sources
Naresh, G & Sheena (2012): Do brand personalities make a difference to consumers
Jian, WU & FU Guoqun (2007): The effects of brand origin country and made-in country on
consumers product evaluations and purchase intention
Khan, I & Salman Majeed (2012): Impact of brand related attributes on purchasing intention of
customers
Aziz, J & Wasiq Ejaz (2012): The impact of brands on consumer purchase intentions
Huang, W (2010): brand story and perceived brand image,evidence from Taiwan
Kuang Chi, H & Ren Yeh Huery (2009) :The impact of brand awareness on consumer purchase
intention
Akdeniz AR, A (2009): Effect of perceived value on the brand preference and the purchase
intention
Hernandez, A & Ines Kuster (2012): Brand impact on purchasing intention.An approach in
virtual social network channels

35

Chi, H & Ren Yeh Huery (2009): The influences of perceived value on consumer purchase
intention,the moderating effect of advertising endorser
Tezi, YL(2008): The effect of branding on consumer purchase intention.
Erdem, T & Joffre Swait (2002): The impact of brand credibility on consumer price sensitivity
Hanzaee, KH & Mohammad Javed(2012): The effects of brand credibilityand prestige on
consumer purchase intention in low & high product involvement.
Choi, YG & Chihyung Ok(2011): Roles of brand value perception in the development of brand
credibility and brand prestige.
Iglesias, V(2001): The effects of brand association on consumer response
Hernandez, A & Ines Kuster (2012): Brand impact on purchasing intention.An approach in
virtual social network channels
Grewal, D & Julie Baker(1998): The Effect of Store Name, Brand Name andPrice Discounts on
Consumers' Evaluations and Purchase Intention.

36

QUESTIONNAIRE
For Office Use Only:
Respondent No.

Dear Respondent,

I..... am doing a research project on FACTORS AFFECTING CONSUMER

PURCHASE INTENTION TOWARDS CONSUMER ELECTRONIC PRODUCTS ( A
COMPERATIVE STUDY OF LG & VIDECON ) . I request you to kindly cooperate in
filling up the questionnaire. We assure you that your information and feedback will remain
confidential and that, this research is purely for academic purposes
Thank you very much for participating. Answer the questionnaire on the basis of
Likert Scale given below.

Strongly
Disagree(SD)
1

Disagree(D)
2

Neutral(N)
3

Agree(A)

Strongly Agree(SA)

Section A: This section of the questionnaire deals with brand equity.

1. LG is a well known durables product company

2. LG has well established retail network as compare to

other companies
3. LG services are highly reliable

4. LG is my first choice if I purchase any electronic goods

5. I will not choose other company if LG Products are

available

5
37

6. I am aware of LG Products

7. I can quickly recall the logo of LG

8. I buy LG Products instead of other ,even if they are the

same

Section B: This section of the questionnaire deals with price.

9. If I were to buy a consumer electronic product, I would
consider buying it from LG at the quoted price.

10.I am likely to use LG Products

11.At a price quoted, I would consider buying LG Products

12.The probability that I would consider buying LG

Products is high

13.I am willing to buy LG Products

14.LG advertisement is a valuable source of information

about local sales and discounts

15.LG advertisement tells me if they have the features I

am looking for

16.LG advertisement helps me keep up-to-date about

their Products available in the market

17.LG advertisement promotes undesirable values in our

society

18. Most of LG advertisements distort values in our society 1

Section C: This section of the questionnaire deals with advertisement.

Section D: This section of the questionnaire deals with brand credibility

19.LG delivers what it promises

38

20.LG Products are believable

21.LG is committed to deliver its claims

22.LG is a name you can trust

23.LG has the ability to deliver its promises

Section E: This section of the questionnaire deals with demographic variables

Age
and above
Gender
Marital Status
Occupation
4. Working woman
Annual Income (in Rs Lakhs)
4. More than 10
Highest Qualification
4. Doctorate

1. 18-24
1. Male
1. Married
1. Professionals
5. Students
1. Upto3

2. 24-30

2. Female
2. Single
2. Employees
3. House wife
6. Others
2. 3-7

1. Undergraduate 2. Graduate
5. Diploma

3. 30

3.7-10
3. Masters

6. Others

39