Major Project Report

TITLE OF REPORT

By
NAME OF CANDIDATE

ROLL NUMBER

In Partial Fulfillment for the award of the degree

Post Graduate Diploma In Management

Batch – 2016-18

Specialization: ______________ and _________________

New Delhi Institute of Management

 DECLARATION

I ………..(student name)………….. student of New Delhi Institute of

Management ……..Batch() declare that every part of the Project Report
………..(title)………… submitted by me is original.

I was in regular contact with my faculty guide and contacted ____ times for
discussing the project through phone, email or visits.

Date of project submission:______________

Signature of the Student

CERTIFICATE OF AUTHENTICITY

Faculty Mentor’s Comments:

_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
________________________

Signature of Faculty guide

Name
 Abstract

The rural consumers are known to earn low income, have low level of literacy,
low level of brand awareness, asymmetric information, inadequate
communication and transportation facilities. The Rural markets and sub-urban
markets are now expanding in Kerala with ever greater penetration index, as
the growth seems stunted in the urban markets. In this study, Rural & suburban
areas with a sample size of respondents. The study intends to identify the level
of influence of various factors on the purchase of FMCG products-toothpaste
among the rural/ semi urban consumers. The study emphasized that rural
consumers gave more importance to the ‘quality’ of the FMCG-personal care
brands they bought rather than the normative influences or social appeal vide
celebrity endorsements in the mass media.
 ACKNOWLEDGEMENT

In this project I have made an honest and dedicated attempt to make the

research material as authentic as it could. And I earnestly hope that it provides

useful and workable information and knowledge to any person reading it.

During this small time frame of two months in which the project reached its

completion, there were a few people whom I would like to make a mention of

and without whose help the project would have never seen the light of the day.

I also thank to my internal guide Prof._________ for his timely response

via e-mail, which immensely helped in giving the project the initial direction it

needed.

I would like to thank my external guide ____________________who

gave me a free hand as far as going about the project work was concerned.

NAME
 TABLE OF CONTENT

CHAPTER.1
INTRODUCTION……………………………………………………………………(1-15)
FMCG OR DURABLE GOODS

INTRODUCTION TO FAST MOVING CONSUMER PRODUCTS

MAJOR SEGMENTS OF THE FMCG INDUSTRY

RURAL CONSUMER BEHAVIOUR TOWARDS DURABLE GOODS

TOP PLAYERS IN FMCG SECTOR OR DURABLE GOODS

FMCG OR DURABLE GOODS SECTOR IN INDIA

RURAL MARKET AND RURAL MARKETING

CHAPTER.2

REVIEW OF LITERATURE…………………………………………………….(16-30)

RESEARCH IN INDIA

RESEARCH ABROAD

CHAPTER.3

RESEARCH METHODOLOGY……………………………………………………(31-35)

RESEARCH DESIGN

STATEMENT OF THE PROBLEM

OBJECTIVES

HYPOTHESIS

DATA COLLECTION

PRIMARY DATA

SAMPLING

SCOPE OF THE WORK

LIMITATION OF THE STUDY

UTILITY OF THE STUDY

CHAPTER.4
DATA ANALYSIS & INTERPRETATION…………………………………….(36-51)

FINDINGS ……………………………………………………….….(52-56)

SUGGESTIONS AND RECOMMENDATIONS……………….…..(57)

CONCLUSION………………………………………………………..(58)

BIBLIOGRAPHY……………………………………………………..(59)

ANNEXURE………………………………………………………..…(60-62)
 LIST OF FIGURES

FIGURE NAME PAGE NO.

FMCG products & Durable Goods

Rural Marketing – 4 A's Structure

Rural Marketing – 4 A's Structure

Chapter 1

Introduction of FMCG OR Durable Goods

Fast-Moving Consumer Goods (FMCG) or Consumer Packaged Goods (CPG) are

products that are sold quickly and at relatively low cost. Though the profit margin made
on FMCG products is relatively small (more so for retailers than the
producers/suppliers), they are generally sold in large quantities; thus, the cumulative
profit on such products can be substantial. FMCG is probably the most classic case of
low margin and high volume business.

Figure: FMCG products & Durable Goods

Introduction to Fast Moving Consumer Products (FMCG)

The Indian FMCG sector is the fourth largest sector in the economy with an estimated
size of Rs.1,300 billion. The sector has seen tremendous average annual growth of about
11% per annum over the last decade. In India, the scenario is quite different in
comparison to developed nations where the market is dominated by few large players,
whereas FMCG market in India is highly competitive and a significant part of the
market includes unorganized players selling unbranded and unpackaged products.

Approximately 12-13 million retail stores exist across India, the large percentage of
which around 9 million are kirana stores. India FMCG sectors’ comprises of few
significant characteristics like well connected distribution network, high level of
competition between the organized and unorganized FMCG players, and low
operational cost. In India, FMCG companies have privilege of having easy availability

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of raw materials, cheaper labour costs and presence across the entire value chain gives
India a competitive advantage.

Products which have a swift turnover and relatively low cost are known as Fast Moving
Consumer Goods (FMCG). FMCG items are those which generally get replaced within
a year. Examples of FMCG commonly include the range of daily consumed items such
as toiletries, soap, detergents, cosmetics, oral care products, shaving products, packaged
food products and digestives as well as other non-durables such as bulbs, batteries,
paper products, glassware and plastic goods. FMCG may also include pharmaceuticals,
consumer electronics, etc.

Indian population is spreading and becoming wealthy day by day, particularly the
middle class and the rural segments, offers immense opportunity which is left untapped
to FMCG players. Growth effect will be seen from product customization in the
matured product categories like skin care, processed and packaged food, mouth wash
etc. In India, many MNCs have made their presence through their subsidiaries (HUL,
Reckitt Benckiser, P&G) and the companies launches innovative products from their
parent’s portfolio in the market regularly to ensure the steady growth. India is a
agriculture based economy and has a varied agro-climatic condition which offers
extended raw material base suitable for many FMCG sub sections like food processing
industries etc. India is one among those countries which has the highest production of
livestock, milk, spices, sugarcane, cashew, and coconut and has the second highest
production of wheat, rice, vegetables and fruits. Similarly, India has an abundant supply
of caustic soda and soda ash, the major raw materials required to manufacture soaps and
detergents, which helps companies manufacturing soaps and detergents to grow and
prosper. The easy accessibility and availability of these raw materials gives India an
additional edge over other countries.

MAJOR SEGMENTS OF THE FMCG INDUSTRY:

Household Care: The detergents segment is experiencing healthy annual growth rate of
10 to 11 per cent during the past five years. The detergent market is equally dominated
by the local and unorganized players which shares decent percentage of the total
volume. In urban areas, people give preference to detergents in place of bars. Household
care segment is featured by intense competition and high level of penetration. With
rapid urbanization and increasing disposable income, introduction of the concept of
small packets and sachets, the household care products demand is growing fast. In
washing powder segment, HUL is the leader with ~38 per cent of market share. Other
leading players are Proctor & Gamble, Nirma and Henkel.

Personal Care: Personal care segment includes oral care products, skin care products
and cosmetics, hair care products, personal wash products etc. The Indian skin care and
cosmetics market is very large and valued at $274 million and is dominated by leading
players like HUL, Colgate Palmolive, Godrej Consumer and Gillette India. The coconut
oil segment covers 72 per cent share in the hair oil market. The hair care market can be

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 divided into hair oils, hair colorants & conditioners, shampoos, and hair gels. Marico
(with Parachute) and Dabur are the leading players in the branded coconut hair oil
market. Rural people prefer to buy sachet which makes up to 40 per cent of the total
shampoo sale. Again HUL is the dominant player with around ~47 per cent market
share; P&G placed at second position with market share of around ~23 per cent.

Personal wash can be further categorized into three segments i.e. Premium, Economy
and Popular. Here also, HUL is leading the market with market share of ~53 per cent;
Godrej stands at second position with market share of ~10 per cent. Increasing
disposable income of the Indian consumers, wide channel network of MNCs, growth in
rural demand for premium products are the key drivers for pulling the future demand
growth up in major FMCG categories

The skin care market is at a primary stage in India. With modernization, the life style
has changed drastically, consumers have more disposable incomes which give greater
product choice and availability of the products give them freedom to purchase.
Moreover, people are becoming more alert and aware about personal grooming. The
leading player in this segment is Hindustan Unilever with a market share of ~54
percent, CavinKare occupies second position with market share of ~12 per cent and
Godrej at third with a market share of ~3 percent.

The oral care market can be categorized into various sub-segments with toothpaste -60
percent; toothpowder -23 percent; toothbrushes -17 percent. Colgate-Palmolive is the
leader of this segment with market share of ~49 percent, while HUL stands at second
position with market share of ~30 percent. In toothpowders market, Colgate and Dabur
are the leading players.

Food and Beverages: This segment comprises of the food processing industry-
packaged foods, health beverage industry- bread and biscuits, chocolates &
confectionery, Packed Mineral Water and ice creams. The three largest consumed
categories of packaged foods are packed tea, biscuits and soft drinks. Tea market
dominates the Indian hot beverage market. Unorganized players enjoy the major share
of tea market. Leading players of organized tea market are HUL and Tata Tea. Major
players in food segment are HUL, Amul, Dabur, Nestle, ITC and Godrej.

Here, we will discuss few positives about FMCG sector:

 Low operational costs

 Presence of wide distribution networks and channel members in both urban and rural
areas
 Participation of well-known branded companies in FMCG sector.
 Favorable governmental Policy: Indian Government has passed the policies aimed at
attaining international competitiveness through lifting of the quantitative restrictions,
reducing excise duties, 100 per cent export oriented units can be set up by government
approval and use of foreign brand names etc.

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 Foreign Direct Investment (FDI): Automatic investment approval up to 100 per cent
foreign equity or 100 per cent for NRI and Overseas Corporate Bodies investment is
allowed for most of the food processing sector except malted food, alcoholic beverages
and those reserved for small scale industries (SSI).

Weak areas of FMCG sector:

 Lower scope of investing in technology and achieving economies of scale, especially in

small sectors
 Low exports levels

Future prospects for FMCG sector:

 Untouched rural market, Untapped opportunities, changing life style

 Rising income levels and higher disposable income, resulting in increase in purchasing
power of consumers
 Large domestic market with more population of age group between 20 and 30. High
expenditure on daily used consumer goods.
 India is the largest milk producer in the world, yet the percentage of processed milk is
very low around 15 per cent. The organized liquid milk business is in its early stage and
also possesses the potential of long-term growth. Even there is huge investment
opportunities in value-added products like desserts, puddings etc.
 Only about 10-12 per cent of output is processed and consumed in packaged form, thus
highlighting the huge potential
 With booming per capita incomes and growing awareness among rural masses, the
growth potential is huge.
 Smaller packs and sachet packing have made the product easy to buy and lower price
are also likely to drive potential up.
 Rural demand etc.

Threats:

 Liberal import policies resulting in replacing of domestic brands.

 Government Taxation policies and regulatory structure
 Rural demand is seasonal and depends upon monsoon.

Fast moving consumer goods (FMCG) – or Consumer Packaged Goods (CPG) – are
products that are consumed quickly over a shorter period of time. Examples include
non-durable goods such as grocery items, soft drinks, dairy products and toiletries.

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 Conditionally, the absolute margins on goods are very low and profit made on FMCG is
comparatively low, the products are sold large quantities so the substantial profits are
generated. The term FMCG refers to those consumer goods that are sold quickly and at
lesser prices. The life of the FMCG is very short and the products are used up over a
short period of days, weeks, or months, and within one year. FMCGs have a short
period of life, either due to high consumer demand or because the product deteriorates
rapidly. Some FMCGs – such as dairy products, fruits and vegetables, meat, etc. are
highly perishable in nature and should be used at earliest. Other goods such as soft
drinks, alcohol, cleaning products, toiletries and pre-packaged foods, have higher sales
volume and high turnover rates.

The main characteristics of FMCGs are:

From the consumers' perspective:

 Frequent purchase or Daily consumed products.

 Low involvement (little or no effort to choose the item -- products with strong brand
loyalty are exceptions to this rule)
 Low price

From the marketers' angle:

 High volumes
 Low contribution margins
 Extensive distribution networks
 High stock turnover

FMCG denotes Fast Moving Consumer Goods, supplied in the retail marketing as per
the daily consumer demand. These daily needs and wants have to be served to satisfy
their hunger. Therefore these needs are fulfilled by hard working team of sales,
marketing and distribution who are present on the field with the motive to satisfy the
need of the consumer on right time & place. Now, the level of awareness among
consumers has increased, they check the quality, MRP and date of packaging of the
product. In India, consumers are more conscious and aware due to regular broadcasting
of advertisements on televisions so they gather complete information before purchasing
a FMCG product. So it has become necessary to supply the fresh product in the market.
Because there is a huge competition in the market and there are other alternatives
available in the market so the consumer has other option to move to another branded
product available in the same market. Now the competition has been rising on the top of
the head on each brand. A small mistake and wrong timing of product launching in the
market could lead to heavy loss of the brand image and can incur heavy loses to the
company.

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 Rural Consumer Behaviour towards Durable Goods:

Earlier, rural consumers made their purchasing of their requirements from nearby
towns. However, in recent times, a shift and a swing have been observed in the buying
behaviour of the rural consumer who has started buying the products locally. This
change in consumer purchase habit has given a ray of hope to the rural marketer. This
provides the immense opportunities for employment for the rural masses that can make
their association with the FMCG companies and the companies can get the channel
partners to promote and enhance their business in rural areas. This producerretailer
chain can ensure the supply of the products at the smaller retail outlets in villages.
Studies suggested that advice to the rural consumer by the retailer plays a very
important role in making the product known and familiar among rural masses and it
reduces the efforts of the companies at creating brand knowledge and positioning the
product in rural markets. A promotion campaign educating the benefits of a product or
brand along with hardcore distribution efforts can be seen in rural markets in the FMCG
category. Customer satisfaction is essentially the highest point of a series of customer
experiences or, the net result of the good experiences minus the bad experiences. It
occurs when the customer’s expectations and their subsequent experiences are matched.

Top Players in FMCG sector or durable goods:

 Hindustan Lever Limited (HLL)

 ITC (Indian Tabacco company)
 Nestle India
 GCMMF (Amul)
 Dabur India
 Asian Paints (India)
 Cadbury India
 Britannia Industries
 Proctor and Gamble Hygiene & Healthcare
 Marico Industries

Secondary Players in FMCG sector or durable goods:

 Colgate-Palmolive (India) Ltd.

 Godrej Consumers Product Ltd.
 Nirma Ltd.
 Tata Tea Ltd.
 Parle Agro.

FMCG giants such as ITC, Dabur, Godrej Consumer Products, Britannia, Marico have
been making sincere efforts to promote their products in rural areas and for generating
awareness among them, they have increased their marketing efforts in rural India and

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 smaller towns with the motive to establish a local distribution networks and increase
product visibility in the deep interior parts of rural markets. Godrej has organized 'Rural
melas' in order to access potential rural consumers. Major domestic retailers like AV
Birla, ITC, Godrej, Reliance and many others have already set up farm linkages.
Hariyali Kisan Bazaars (DCM) and Aadhars (PantaloonGodrej JV), Choupal Sagars
(ITC), Kisan Sansars (Tata), Reliance Fresh, Project Shakti (Hindustan Unilever) and
Naya Yug Bazaar have established rural retail hubs.

FMCG or Durable Goods Sector in India:

The Indian FMCG sector is the fourth largest sector in the economy with a total market
size in excess of US$ 13.1 billion. Multinationals have made a strong presence and is
characterized by a intense competition between the organized and unorganized
segments, well connected distribution network, large number of channel members and
low operational cost. In India, companies enjoys the advantage of having cheaper labour
supply, availability of key raw materials and presence across the entire value chain
gives India a competitive advantage. The FMCG market is having a bright future in
India as per studies and is expected to jump from US$ 11.6 billion in 2003 to US$ 33.4
billion in 2015. Per capita consumption/expenditure as well as penetration level in most
product categories like hair wash, packaged foods, jams, skin care, toothpaste etc in
India is low indicating the immense opportunity which is left untapped. Indian
population is mushrooming and it is providing opportunities to multinationals as well as
the domestic players to grow. In India, the middle class and the rural segments, presents
an opportunity to producers of branded products to convert consumers to branded
products and this make-shift from unbranded to branded indicates huge potential to
grow in the same industry. Growth is also likely to come from consumer 'upgrading' in
the matured product categories.

 Indian FMCG sector is contributing Rs. 2 trillion in the total economy with rural India
contributing to a third of revenues.
 As per a study conducted by Booz & Company, FMCG sector is expected to grow in the
range of 12% to 17% upto 2020 and could touch a market size between Rs. 4,000 to
Rs.6,200 billion by 2020.
 Consumer preferences in rural markets have shown a paradigm shift over the last few
years. Their consumption basket looks very similar to that of urban counterparts.
Premium products are replacing basic versions and brands are making their presence
felt. Nielsen estimates that the FMCG market in rural India will mark US$ 100 billion
by 2025, from the current level of US$ 12 billion. Moreover, the Government's efforts
to improve the efficiency of welfare programs with cash transfers will further boost
rural consumption; it plans to deposit US$ 570 billion in the accounts of 100 million
poor families by 2014.
 The rural FMCG market in India has grown 15% in 2011 (Nielsen Report, 2012). The
Indian rural consumer market grew 25% in 2008 and reached US$ 425 billion in 2010-
11 with 720-790 million customers (Quarterly Report, CIITechnopak, 2011). According

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 to FICCI Technopak Report 2009, FMCG industry is projected to grow by 12% and
reach a size of US $ 43 billion by 2013 and US $ 74 billion by 2018.

During the year under review, the FMCG industry continued on a steady growth
trajectory. Riding on continued demand for branded food products, personal care,
household care, baby care and OTC products, the Indian FMCG sector crossed the Rs.
2-trillion mark in fiscal 2012-13, as per AC Nielsen. Future growth in the FMCG sector
is expected to be driven by:

 Low per capita consumption: Per capita consumption levels in FMCG categories such
as skin care, shampoos and toothpastes are much lower in India as compared to other
markets and are expected to drive growth in future.
 Favourable demographics: 65% of India’s population is below the age of 35 years,
making India one of the youngest nations and an important aspect of consumption
growth.
 Low penetration levels of consumer products in most categories.
 Shift to branded products from unbranded products: Current level of unorganized
market in some of the FMCG categories bodes well for future volume growth of
branded products.
 Growth potential in rural markets.

The future of FMCG: FMCG future has a great potential and is going to become a
huge Rs 400,000-crore industry by 2020. A Booz & Company research study reveals
the trends that will shape its future. Considering the above research study, the anti-
ageing skincare category blossomed five times between period 2007 and 2008.

Today, it has become a very lucrative and fastest-growing segment in the skincare
market. Procter & Gamble‘s premium anti-ageing cream Olay, covered 20 per cent of
the market within a year of its launch in 2007 and today leads the market with 37 per
cent share. Around ten years ago, No one had predicted the ready acceptance for anti-
ageing lotions and creams. Similarly, Indian market didn’t expect that Indian consumers
would take oral hygiene seriously. Indian consumers have become very sensitive when
it comes to precautionary measures for the safety of their oral organs. Mouthrinsing is
picking up as a habit among Indian consumers — mouthwash penetration is growing at
35 per cent a year. Even Shampoo category has gained a good momentum in rural areas
and it was not predicted. Rural penetration of shampoos increased to 46 per cent last
year.

Consumption patterns have revolutionized in the last five to ten years. The consumer is
trading newer experiences and is trying innovative things every day. He is looking for
products with better quality, functionality, price, value for money etc. According to a
recent published report by Booz & Company for the Confederation of Indian Industry
(CII), called FMCG Roadmap to 2020: The Game Changers points out the key growth
drivers for the Indian fast moving consumer goods (FMCG) industry in the past ten

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years and identifies the big trends and factors that will impact its future. FMCG sector
has been booming very fast and has seen robust year-on-year growth of approximately
11 per cent in the last decade, almost tripling in size from Rs 47,000 crore in 2000-01 to
Rs 130,000 crore now (it accounts for 2.2 per cent of the country‘s GDP). In last 5
years, the FMCG sector has seen tremendous growth at almost 17 per cent annually
since 2005. It identifies robust GDP growth, increased income in rural areas, opening up
of rural markets, growing urbanization along with evolving consumer lifestyles and
buying behaviors as the key drivers of this growth. It has been predicted that the FMCG
industry is set to see a boom in its annual growth and will grow at least 12 per cent
annually to become Rs 400,000 crore in size by 2020. Even we can experience more
brighter future if some of the factors play out favorably, say, infrastructure investments
pick up, GDP grows a little faster, there is more efficient spending on government
subsidy, the government removes bottlenecks such as the goods and services tax (GST)
and so on, growth can be significantly higher. It could be as high as 17 per cent, leading
to an overall industry size of Rs 620,000 crore by 2020.

Abhishek Malhotra (2010) told that the Indian GDP per capita is low but many Indian
consumer segments which constitute rather large absolute numbers are either close to or
have already reached the tipping point of rapid growth. The FMCG sector is set for
rapid growth over the next 10 years, and by 2020, the industry is expected to be bigger
in size, more economic, highly responsible and more tuned to its customers. According
to the facts based on research on industry evolutions in other markets and discussions
with industry experts and practitioners, Booz & Company has identified some important
trends and explored few factors that will change the fortune of the industry in coming
next ten years. Some key factors related to evolution of consumer segments are as
follows:

1. Accelerating “premiumisation”: The rising income of Indian consumers has

become a major factor for big multinationals to operate their business in India and rising
disposable income has accelerated the trend towards premiumisation or up trading. The
upward trend of purchasing of premium products can be observed prominently in the
top two income groups — the rich class with annual income exceeding Rs 10 lakhs, and
the upper middle class with annual income ranging between Rs 5 lakhs and Rs 10 lakhs.
The rich segment are willing to spend their part of income on purchasing of premium
products to satisfy their newly developed curiosity to consume, emotional value and
exclusive feel, and their behavior is very much similar to consumers in developed
economies. They are wellinformed and aware about various product options available in
the market, and want to spend on buying those products which suit their life-style. The
upper middle class have a curiosity to consume premium products and wants to emulate
the rich and up-trade towards higher-priced premium quality products which represents
the higher status in the society offer greater functional benefits and experience
compared to products for mass consumption. While these two income groups account
for only 3 per cent of the population, it is estimated that by 2020 their numbers will
double to 7 per cent of the total population. The rich will grow to approximately 30
million in 2020, which is more than the total population of Sweden, Norway and

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Finland put together. Similarly, the upper middle segment will be a population of about
70 million in 2020, which is more than the population of the UK. Over the next ten
years, these groups will constitute large enough numbers to merit a dedicated strategy
by FMCG companies. Abhisek Malhotra (2010) added that they have seen companies
focused on selling primarily to the mid segments. Often, there is no clear segmentation
being offered. Players would do well to clearly separate their offerings for the upper and
mid segments,‖ and the two should be treated as separate businesses with a dedicated
team and strategy for each.

2. Evolving categories: Categories are evolving at a brisk pace in the market for the
middle and lower-income segments. With their rising disposable income and spending
capability, these consumers are shifting from need to want based products. For instance,
rural consumers have shifted to toothpastes from toothpowders and are now also
demanding mouthwash within the same category. Now in rural areas, consumers have
voiced for customized products, specifically tailored and designed according to their
individual needs and tastes. The complexities and competitiveness within each category
are increasing significantly. Initially shampoo had two variants — normal and anti-
dandruff. Now, the companies are marketing anti-dandruff shampoos for short hair, long
hair, oily hair, curly hair, and so on. Everything is getting customized. The trend of
mass production has shifted to mass-customization of products which will categorize
the buyer by age, region, ethnic background, personal attributes and professional
choices. Micro-segmentation will amplify the need for highly customized market
research so as to capture the specific needs of the consumer segment targeted, before the
actual product design phase gets underway. The market of beauty products will expand
by 20 per cent per annum as result of the upgrading socio-economic status of
consumers, especially women. Women in middle-class category have become more
conscious of their appearance and looks, they are willing to spend more on improving it.
Few product categories such as colour cosmetics is growing with a rapid pace nearly by
46 per cent and sun care products is growing at 13 per cent have pushed this trend
rapidly.

3. Value at the bottom: Bottom of the pyramid is that category of the society which
have existence in large numbers but they live their life with scarcity. The bottom-of-the-
pyramid or BoP consumers are those who earn less than Rs 2 lakhs per annum per
household. The group comprises around 900 to 950 million people. While the middle
class segment is largely urban, they have resources and are mostly well-served and
competitive, the BoP markets are largely rural, less equipped with resources, poorly-
served and uncompetitive. Still, BoP consumers are not able to meet most of their basic
needs: Water, Electricity supply, Basic healthcare, financial services, mobile phones &
communication etc. And so there is untapped opportunity. Abhisek Malhotra (2010)
added that the consumers have aspiration to consume better quality products, and their
income level has also improved. The segment was initially being targeted with smaller
packs and lower-priced products, say, Rs 2 Parle-G , Re 1 Chick Shampoo, Re 1
Hajmola packets. But increasingly the demand will be high for those products which
delivers more value and contains nutrition (vitamins, proteins etc.) and can be served as

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a meal. PepsiCo and Tata, big multinationals are working on such products. The rural
BoP population comprises about 78 percent of the total population. The segment is
becoming an important source of consumption by moving beyond the survival mode. As
a result of rising incomes, the growth of FMCG market in rural areas at 18 per cent a
year has exceeded that of the urban markets at 12 per cent. However, maximum demand
for FMCG is generated from urban areas while the rural market generates only 34 per
cent demand of the FMCGs, given the current growth rates and increasing trend, its
share is expected to rise to 45-50 per cent by 2020. It will require highly customized
products at affordable prices with the potential of large volume supplies. Various
categories of products such as fruit juices, skin creams and sanitary pads which had
minimal demand in the rural markets earlier have suddenly making its mark. While
most FMCG players have made their presence in rural areas and successfully making
the products available to cater the needs of rural masses, the next agenda of growth is
expected to come from increasing category penetration, development of customized
products and up-trading rural consumers towards better quality and higher price
products.

4. Increasing Globalisation: Companies are enjoying the freedom of doing business in

India and they are taking it as an opportunity to expand in a big way. Leading MNCs
have taken the advantage of operating in the country for years given the liberal policy
environment, Tier 2 and 3 global players will see the competition in coming next 10
years. In addition, larger Indian companies are exploiting the opportunities
internationally and also have an access to more global brands, globally recognized
products and fair operating practices for international standards.

5. Decentralization: Despite the complexity of the Indian market (languages, cultures,

distances) the market has mainly operated in a homogenous set-up. Increased scale and
spending power will result in more fragmented and tailored business models (products,
branding, operating structures).

6. Growing Modern Trade: Modern trade share will expand rapidly in coming years
and is predicted to account for nearly 30% by 2020. This channel will fulfill the
objectives of the existing traditional trade (8 million retail stores which will continue to
grow) and ensures distribution through its carry & forward (C&F) model as well as
more ways to interact with the consumer.

7. Focus on Sustainability: Changes in climatic conditions globally, increasing scarcity

of many natural resources (e.g. water, oil) and consumer awareness (e.g. waste) are
leading to increased concerns for the environment. Companies are getting pressure due
to involvement of various stakeholders for being environmentally responsible – from
government (through policy) to consumers (through brand choice) and NGOs (through
awareness).

8. Technology as a Game Changer: Technology has become more advanced with the
economic development. Increased and relevant functionality coupled with lower costs
will enable technology deployment to drive significant benefits and allow companies to

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address the complex business environment. This will be seen both in terms of
efficiencies in the back-end processes (e.g. supply chain, sales) as well as the front-end
(e.g. consumer marketing).

9. Favorable Government Policy: Nowadays government policies have become liberal

for companies to operate in India, they have freedom to export outside India and can
import the raw-materials and finished products from foreign countries. Liberal
government policies have helped in creating a more suitable operating environment.
This will be achieved by pushing the demand side upwards through increased income
and education and parallel supporting the supply side by removing bottlenecks and
encouraging investments in infrastructure. The effect of many of these change drivers –
technology, government policy, consumers, and channel partners – will impact the
business environment within the country. Winning in this new world will require
cementing and enhancing current capabilities and building new ones to bridge gaps. In
this new world FMCG companies will have 6 imperatives from a business strategy
perspective:

1. Disaggregating the operating model.

2. Winning the talent wars

3. Bringing sustainability into the strategic agenda

4. Re-inventing marketing for consumers

5. Re-engineering supply chains

6. Partnering with modern trade.

Another big trend that has been occurring is the emerging idea of many Indians. It is to
be noted that despite having complexities in culture, tradition, language, belief and long
distances, companies consider the Indian market as a homogenous market. One product
is used for the entire country — the same Dabur Amla Hair Oil for Rajasthan and West
Bengal, or the same Cinthol soap for Punjab and Uttar Pradesh. Besides, same
advertisements are shown on television for these products across the country. Now,
Major FMCG players have realized the fact that India is no more a homogenous market
and the taste, preference, life style of consumers vary significantly. Various researches
have predicted that the economic growth of few states in India will exceed the growth
rate and total economic size of other countries. For example By 2020, Maharashtra‘s
GDP will exceed that of Greece, Belgium, and Switzerland, and Uttar Pradesh‘s
economic size will exceed that of Singapore and Denmark. We will see companies
launching different products for different geographical regions within the same country.
Hindustan Unilever launched teas which has a completely different taste in 2 different
states. Pepsi has a different product in Andhra Pradesh which is not sold anywhere else.
Earlier, companies used differentiation strategy at the country level; now they are using
it at the state level. FMCG players are adopting regional approach and they have to
grow “regional” in their thinking and move towards an increasingly decentralized
operating model in India. As consumer tastes and preferences differ across states,
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companies can adopt a regional strategy in terms of product ingredients, channel of
distribution, positioning, promotion and marketing campaign. Overall, regionalization
or decentralization will be used an an important tool for FMCG players for covering
deep interiors of rural area. MNC presence across the entire value chain has made the
FMCG industry more competitive and strong in terms of brand building. It has been
predicted that the FMCG market will touch the figures of US$ 33.4 billion in 2015 from
US $ 11.6 billion in 2003. FMCG companies are targeting the middle class and the rural
segments of the Indian population as they consider them to be the promising market for
developing their business, and give producers the opportunity to convert them to
branded products. Most of the FMCG categories like chywanprash, jams, toothpaste,
hair colors, skin care etc, in India, have low penetration level as well as low per capita
consumption, but the potential for growth is huge. The big firms are getting the
momentum and are growing bigger while small-time companies are catching up the
speed to grow as well.

Thrust on rural development since 1950 eventually made India into an attractive rural
market. Increased awareness along with rise in income levels influenced the rural
marketing environment in the country. Other factors that contributed to the growth of
rural markets are penetration of media, rising aspiration of rural people and packaging
revolution. Fast moving consumer goods (henceforth referred to as FMCG) market has
emerged as one of the most attractive rural markets in India. An effective FMCG
marketing strategy in a rural setup essentially includes product variants, product
categories, price points, sizes and widespread distribution network. The general
impression that the rural markets are potential only for agri-inputs is partly correct as
there are opportunities to market modern goods and services in rural areas in India. The
rural FMCG market in India has grown 15% in 2011. The Indian rural consumer
market grew 25% in 2008 and would reach US$ 425 billion in 2010-11 with 720-790
million customers. According to FICCI Technopak Report 2009, FMCG industry is
projected to grow by 12% and reach a size of US $ 43 billion by 2013 and US $ 74
billion by 2018.

Rural Market and Rural Marketing

Different experts and organizations have divergent views on what constitutes the term,
‘rural’. Describes the word ‘rural’ as ‘place far away from towns and cities’. A rural
market broadly comprises of consumer markets, institutional markets and services.
According to this, rural marketing includes all those activities of assessing, stimulating
and converting the rural purchasing power into an effective demand for specific
products and with the aim of raising the standard of living. It is a two way marketing
process of flow of goods and services from rural to urban areas and vice-versa. Rural
marketing is any marketing activity in which one dominant participant is from rural
area.

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 Figure 1.1: Rural Buyer-Seller (Producer) Matrix

Figure 1.2: Rural Marketing – 4 A's Structure

The Rural buyer-Seller (Producer) Matrix that presents the scope of rural marketing (Figure
1.1). On:

Shelf-I are the goods which are made by rural people in rural areas and consumed by rural
inhabitants. Examples include pottery, woolen, cotton and silk fabric weaved by handlooms,
vegetables and fruits, etc.

Shelf-II comprises of goods made and sold by urban people to rural areas like, automobiles,
bicycles, farm equipment, fertilizers, etc.

Shelf-III comprises of goods made in rural areas and consumed in urban areas like,
vegetables, agro-based products, products of cottage industries, etc.

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Shelf-IV does not fall under the scope of rural marketing. Rural marketing mix would
comprise of 4 A’s viz., Acceptability, Affordability, Accessibility and Awareness (Figure
1.2).

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Chapter 2

REVIEW OF LITERATURE

The review of the earlier studies and the observations of the researchers help in
evaluating the strength and weakness of the concepts used earlier. As a result, it is a
prerequisite review those studies and specifies appropriate concepts as applicable to the
present study. It guides the researcher in understanding the methodology used,
limitations of various available estimation procedures and database and lucid
interpretation and reconciliation of the conflicting results. In case of conflicting and
unexpected results, the researcher can take the advantage of knowledge of other
researchers simply through the medium of their published works. This chapter discusses
the research works done in the past, which includes consumer buying behaviour,
awareness, brand preference, and post purchase behaviour.

RESEARCH IN INDIA

Sharma and Rao, in their article entitled “Problems of Rural Marketing in India”,
segmented the national market into rural and urban markets. Rural markets having low
population density UN integrated in terms of communication and physical distribution
facilities. They further define the dimensions of rural marketing in terms of “population,
income, and consumption levels”.

Singh and Singh, in his article entitled “A Study of Brand Loyalty in India”, found that
consumers had single or multi-brand loyalty based on the nature of product, such as
necessities or luxuries. In addition, brand choice and store loyalty were found to affect
the brand loyalty of the consumer. The factors that influence and strengthen loyalty to
brand were quality of product, habit of use and ready and regular availability.

Kumar et al. in their article entitled “Buying Behaviour of Rural consumers”, point out
that the factors influencing the buying decision - making of consumers on various food
products. The chief factors influencing the consumers were country of origin, brand and
the socio-economic factors were age, education, and income. Finally, the study
identified brand image seemed to be more important than the origin of the product.

SanalKumar, in his article entitled “Buyer Behaviour in Rural Markets”, focused new
product awareness of rural consumers. He found that the rural consumer uses multiple
sources of information and television as one of the important sources. Secondly, the
male member of the household carried out the actual purchase in rural markets, though
the decision maker depends on the type of product. Finally, the rural consumer was less
aware of new products.

Jha and Mithileshwa, in their article entitled “Rural Marketing-Some Conceptual

Issues”, argued that the concepts „rural‟ and „marketing‟ though used very frequently
in various forums, and had eluded a precise and non-controversial definition. When both
the concepts were joined, the resulting concept „rural marketing‟ means different things

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to different persons. They further suggested that various companies in rural areas
adopted the several innovative promotional measures.

Shanmugsundaram, in his article entitled “Soft Drink Preference in Vellore Town of

North Arcot District in Tamil Nadu”, has identified that the most preferred soft drink
among respondents were Gold spot (26%), followed by Limca (25%).Taste was the
main factor for preferring of a particular brand and among the media; television was
played a vital role in influencing consumer. Finally, tetra pack was most preferred one
because of convenience. Joshi (1993) in his article entitled “Food Purchasing Habits and
Consumer Awareness among Rural and Urban Housewives”, identifies that majority of
the urban respondents purchased the groceries such as cereals, pulses , oil, spices and
sugar on monthly basis. On the other, perishables such as fruits, eggs and meat were
purchased once a week and milk was purchased daily. Regarding place of purchase, 83
per cent of urban and 99 per cent of rural respondents purchased all the groceries such
as sugar, rice, and wheat from fair price shops. Both rural and urban respondents
purchased groceries, perishables ready to use foods and commercially available foods
from retail shops. Price, quality, and weight of the product that were considered the
essential factors by both rural and urban respondents.

Rana, in his article entitled “Impact of TV Advertisement on the Customer Buying

Preference”, points out the impact of TV advertisement on branded products at rural
markets. He furthers expresses that among the media, the impact of television
advertisements on social behaviour, including purchasing behaviour was the greatest.
The reason is television has charm, instantaneous transmission capability, and
universality of appeal.

Yogesh Upadhyal, in his article entitled “Brand Loyalty in Rural and Urban
Consumers”, points out that the brand loyalty was identified among more than sixty per
cent of the rural and urban consumers in the product categories namely washing
powder, washing soap, bathing soap, shampoo, tooth paste, powder. However, it was
not applicable for the other three products namely spice, clothes and flour, and rice.

Kamalaveni and Nirmala, in their article entitled “Consumer Behaviour in Instant Food
Products” point out there was complete agreement between ranking given by the
housewives and working women regarding the reasons promoting them to buy instant
food products. The study also identified age, occupation, education, family size, and
annual income had greater influence.

Nagaraja, in his article entitled “Consumer Behaviour in Rural Areas: A Micro Level
Study on Buyer Behaviour of Rural Consumers in Kavali Mandal”, points out that the
level of utility was being influenced by the changing tastes and preferences of the
younger generation. The clever and gimmicky advertisements did not attract the rural
consumers. He further suggests that the buying behaviour was highly influenced by
experience of their own and neighbours-consumers.

Narang, in his article entitled “Research out to the Rural Market of Uttar Pradesh”,
studied consumables such as, toilet soap; washing soap, and toothpaste, powder, facial

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cream, edible oil and durables: fan, wrist watches and television. He found that that the
proportion of city and local purchases varied from product to product and a nominal
amount of purchase was made from hawkers in rural areas of India. The result of the
study also indicated that the majority of the rural population was not satisfied with the
locally available brands.

Hundal, in has article entitled “Consumer Behaviour in Rural Markets: A Study of

Durables”, The main objectives of the study were to assess the general attitude of rural
consumers towards consumer durables , to find out the durable brand ownership of rural
consumer, to examine factor considered by them in making product, brand choice, to
investigate the role family members play, different groups and media that influences
purchase decision of rural consumers, to ascertain the intensity of brand loyalty, and the
appeal of promotional schemes.

Nirmala, in his article entitled “A Study on Brand Loyalty and Brand Preference
towards Health Leverages in Coimbatore City”, studied the brand loyalty towards a
particular brand and usage period of that particular brand. It was found that the
consumers emphasised more to quality though rate was high.

Keshav Sharma et al, in their article entitled “Rural Marketing Challenges in the New
Millennium” , point out that the rural consumers believed in joint buying decision-
making; consultation with the elders and the women in the house. Advertisement with
rural culture and regional and local language attracted the audience. The respondents
had strong belief about their customs and traditions. Finally, the respondents were aware
of the availability of the products.

Ganeshmoorthy, Radhakrishnan and Bhuneshwari, in their article entitled “A survey of

Selected Consumer Products in Rural Marketing Areas” , attempted to analyze the
brand loyalty of the products and the influence of mass media in rural markets. The
study revealed that mass media had significant role in the sales promotion of the select
products. The study identified that media informs the consumers to buy good quality
products. Finally, the actors such as price and availability were given highest
preference.

Deepak Halan, in his article entitled “Rural Marketing: is a Different Ballgame”, point
out the many rural consumers were daily wage earners and it made sense to package
products in smaller units or offer low-priced variants for rural markets. In rural, many
brands had to compete with goods from the unorganized sector. Those goods were
generally very low priced and often cheap substitute products available. The rural
consumers were ready to pay higher prices for better quality or more featured products
at the harvest season. This is the time when chances of selling expensive brands are the
highest. Therefore, any pricing strategy must take into account when money is received,
how it is used, and what is the priority order of the needs.

Nandagopal and Chinnaiyan, in their article entitled “Brand Preference of Soft Drinks in
Rural Tamil Nadu”, point out that the most influencing factors to buy the particular
product: quality was first factor influencing the brand preference followed by

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availability and retail price. In addition, price, advertisement, word of mouth, and retail
shopkeepers were the other factors that influenced the brand preference of soft drinks in
the study area.

Mithileshwar Jha, in his article entitled “Understanding Rural Buyer Behaviour”,

identifies that the rural buyers were relatively simpler, more forthright, with lower
aspiration levels, influenced by social pressures, rituals and norms, with moderate to
high risk taking ability and gullible to dream merchants.

Sampathkumar, in his article entitled “Brand Preferences Acidity of Soft Drink Market”
points out that the consumer‟s behaviour involves understanding the acquisition,
consumption, and disposition of the products and services. Those involved in analysing
it, be it consumers, marketers, middlemen, or regulatory agencies, should continuously
make sincere and necessary efforts and take periodic measures to strengthen the body of
knowledge that is already existing. He further suggests that the consumers uniformly
both in urban and rural areas, desire to have quality products at reasonable price and
they trust more the advice of retailers.

Verma and Surender Munjal, in his article entitled “Brand Loyalty Correlates: Study of
FMCGs”, point out that the major factors in making a brand choice decision namely
quality, price, availability, packaging and advertisement. The brand loyalty is a function
of behavioural and cognitive pattern of customer. The age and demographic variable
affected significantly the behaviour and cognitive patterns of the consumers while other
demographic characteristics such as gender and marital status were not significantly
associated with those behavioural and cognitive patterns of the consumers.

Rajashekar and Shankaraiah, in their article entitled “Problems of Consumers in Andhra

Pradesh”, point out that the nature of problems among the consumers varied from place
to place and degree of intensities linked with the awareness level of individual
consumers. The female respondents experienced maximum number of problems
regarding duplicates in essential items, adulteration, and underweight.

Problem of high price of consumer durables was more common in all rural areas than
the urban areas. Educational levels were directly linked to problems such as
manufacturing date and expiry date.

Shivakumar and Ravindran, in their article entitled “Role of Husband and wife in
Purchase Decisions”, identified housewife was the decision-maker for the purchase of
agarbattis, cooking oil, grocery, milk and salt, whereas, the husband was the decision-
maker for fruits and magazines. Mosquito mats and coils were bought based on joint
decisions. The study suggests that the significant difference in the decision regarding
the purchase of convenience goods owing to any one of the characteristics of husbands
and wives namely: age, education, occupation, and income level.

Ganesan, in his article entitled “Brand Switching: A Study of Rural Consumers”,

suggests that the consumers from rural markets felt relatively new set of guidelines such
as short-term promotional exercises were found to be ineffective. Further, he found that

Page | 19
the important variables: advertisement and discounts were found not significant due to
lack of reach of media and dissemination of information to consumers. The variables
namely taste, price, package and cuppage, there existed a significant difference in the
respective means of pre and post purchase satisfaction levels. The taste and price turned
out independent for brand switching.

Rohini Gupta Soni, in their article entitled “Rural Marketing – Some Issues”, reveals
that the rural consumers normally did not make brand discrimination, but once induced
to buy and use a product; the consumers become loyal to the brand provided they were
satisfied about its functional utility such as loyalty to the brand. The user may even
make efforts to get the whole village to use it. The advertisement was effective when it
could speak in the idioms of rural people.

Ganesamurthy, in his article entitled “A Survey of Selected Consumer Products in Rural

Marketing Areas”, advances the improvements in media and transportation. The work
identified the rural market was not restricted to mass consumption products. In contrast,
there was less scope for growth in the urban markets especially for the already
established categories.

Rajnish Tuli and Amit Mooherjee, in his article entitled “Retail Formats: Patronage
Behaviour of Indian Rural Consumers” discusses that the rural consumer preferred to
meet his or her immediate and day-to-day needs from village shops and avoid a
comparatively higher transportation cost at the same time; bulk purchase could drive
them to the regular markets to avail the - bargain and promotional incentives which
would negate the impact of shopping cost incurred. Rural consumers patronize village
shops to meet their credit-based impulsive requirements. On the other hand, cash rich
consumers with no urgency, prefer to purchase from regular markets to avail the
benefits of low prices, discounts, and varieties and so on, which in turn motivate rural
consumers.

Krishna Mohan Naidu, in his article entitled “An Evaluation of Consumer Awareness in
Rural Markets”, attempted to research the awareness level of rural consumers. It was
found study that awareness of the rural consumers about the consumer movements were
qualitative in character and could not be measured directly in quantitative terms. There
was no fixed value or scale, which would help to measure the awareness. However, the
awareness had been studied with the help of the consumers‟ response such as consumer
movements, cosmetics, banking services, drugs, food products, toothpastes, and hair oil.
Finally, awareness levels were found higher in the study area.

Sharma and Kasturi, in their article entitled “An Evaluation of Consumer Awareness in
Rural Markets” observe that rural consumers did experience anxiety due to dissonance
and exhibit defensive behaviour and uses attribution. They were worse hit by non-
availability of quality alternatives. Those forces the consumers to accept low quality
products. As advertisements were not reaching the rural sector effectively, there was a
need to strengthen the hands of information agents to remove the ill effect of post
purchase dissonance.

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Venkateshwarlu, in his article entitled “Preference Portfolio of Rural Consumers
towards Consumer Electronics” put forwards that the age and education could explain
the variation in perception of preference of functions. The varimax rotation factor
analysis identified that the major determinant of rural consumer preferences were land
size, education, and age of the respondents.

Pankaj Priya , in his article entitled “Challenges for Marketing in Indian Hinterland”,
points out that the rural consumers are not always “distant cousins” of the urban folk.
They have their distinct personality and independent thinking based on strong set of
beliefs and values. For people in small towns and villages, community decisionmaking
is quite common in product category due to strong caste and social structure. By age of
the rural consumers, three key groups can be identified. The youngsters in the age group
of eight to 15 would be seen catching up with their urban counterparts, due to their
interaction. The age group of 18 to 25 also exposed to these situations, would be a bit
vary about these changes. In contrast the age group 35 plus will be “laggard” in the
marketing sense. They would still be logged down by their traditional beliefs and age-
old customs.

Sakkthivel and Bishnu Priya Mishra, in their article entitled “Effectiveness of Sachets in
Modifying Rural Consumers Buying Behaviour and their Consumption Pattern - A
Researches view”, propose that the majority of the rural consumers preferred some
products in sachets and others in medium or large container. The products that they
prefer in sachets were purchased on weekly basis and big packages were purchased
monthly. Some of the products in sachets such shampoo, fairness cream, spices and
mosquito repellents had created considerable impact among the rural consumers and
rest of products were failed.

Ramana and Viswanath, in their article entitled “Consumers Behaviour and Awareness
with Special Reference to Edible Oil Users”, declare that the price, quality, and taste
were the most influencing factors among all categories of consumers than smell, colour
and company package and brand in the purchase of Edible oil. The change in price and
quantity of buying was not influenced the buying behaviour of the consumers. Non-
availability of a particular product forced some of the consumers to buy other brands.
Reasons for using the same brand attributes to taste and quality, easy availability, low
price. Regarding motivation factors influencing buying decisions, it was found that head
of the family and advice of the family members were the most influencing factors.

Ramasamy et al. in their article entitled “Consumer Behaviour towards Instant Food
Products in Madurai”, observe that the consumers do build opinion about a brand based
on which various product features play an important role in decision-making process. A
number of respondents, seventy eight per cent laid emphasis on quality and seventy six
per cent on price which was an important factor, while sixty four per cent of the
respondents attached importance to the image of the manufacturer and fifty per cent
considered packaging as an important factor and an equal (50%) felt longer shelf life
influenced them.

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Kubendran and Vanniarajan, in his article entitled “Comparative Analysis of Rural and
Urban Consumers on Milk Consumption”, point out the change in consumption pattern
was due to changes in food habits. If income and urbanization increase among
consumers, the percentage of income spent on consumption would increase. They
further finds that the urban consumers‟ preferred mostly branded products compared to
rural consumers. The most significant factors influencing buying decisions were
accessibility, quality, regular supply, door delivery, and the mode of payment.

Sathya in her article entitled that “Consumer Awareness and Brand Preference for
Health Drinks”, points out that the brand attitude of the consumers depends on the
benefit expected from it and studied the consumer awareness about various brands of
health drinks and brand loyalty of health drinks. The study also concentrates on
consumer purchase decision for number of quality factors, which lead them to select a
particular brand in preference to others, influences health drinks.

Banumathy and Hemameena, in their article entitled “A Study on Analysis of Brand

Preference of Soft Drinks in the Global Environment”, point out that the profile of soft
drinks consumer brand preference and factors influencing the brand preference. In
addition, the most of the consumers like the international brand and they comparing can
follow innovative improvements in the production of soft drinks in order to compete
with the international brands.

Narang, in his article entitled “A study on Branded Foods”, points out that a buyer does
not stick to one brand in case of food purchasing. He/she is able recall different brand
names when they go for purchase. Repetitive advertising can be used to promote brand
recall. The product should be associated with style and trend, so that it appeals to the
youth and the brand name should be developed as a fashion statement. He further
suggests that the promotional schemes such as discounts and free offers with purchase
were suggested to increase rates. Arulkumar and Madhavi (2006) in their article entitled
“A Study on Rural Marketing for FMCG”, in their study pointed out that most of the
rural consumers were influenced by quality of the product. Therefore, the FMCG
Companies should strictly adhere to the quality standards. Price is the second factor that
influences the purchase of the product in most cases and hence the product should be
reasonably priced. They concluded that FMCG companies could significantly increase
the market share by extending attention of rural areas. More generic product with
different advertisement campaigns surely attracts non-users.

Anand and Hundal, in his article entitled “Motivators for Purchase of Durable for Rural
and Urban Consumers of Punjab”, mainly examine the comparative buying behaviour of
rural and their urban counterparts towards the purchase of refrigerator. It finds that to
compare and analyse the motivational factors for purchase of refrigerator among rural
and urban consumers.

John Mano Raj, In his article entitled “ Social Changes and the Growth of Indian Rural
Market: an Invitation to FMCGs”, This paper covers the attractions for the FMCG
marketers to go to rural and the urban markets and uses a suitable marketing strategy

Page | 22
with the suitable example of companies and their experience in going rural. Thus, the
rural marketing has been growing steadily over the years and is now bigger than the
urban market for FMCG. Globally, the FMCG sector has been successful in selling
products to the lower and middle-income groups and the same is true in India. Over 70
per cent of sales are made to middle class households today and over 50 per cent of the
middle class is in rural India. However, the rural penetration rates are low. This presents
a tremendous opportunity for makers of branded products who can convert consumers
to buy branded products. The marketers need to develop different strategies to treat the
rural consumers since they are economically, socially, and psycho-graphically different
from each other. This paper covers the attractions for the FMCG marketers to go to
rural, the challenges, and the difference between the rural, the urban market, and the
suitable marketing strategy with the suitable customers.

Kaushik Mukerjee, in his article entitled “Analysis of the Strategies of Hindustan Lever
Limited and Coca-Cola in the Indian Rural Market”, focuses on to analyze the rural
marketing initiatives. It is found that the potential of rural marketer is willing to use
suitable strategies for reaching the rural consumers, to ensure proper need satisfaction,
appropriate imagery and performance, the right feelings and judgments, and generating
suitable resonance among the consumers.

Anandan et al. in their article entitled “A Study on Brand Preferences of Washing Soaps
in Rural Areas”, India's rural markets have seen much activity in the last few years.
Since penetration levels are high in most categories, future growth can come only from
deeper rural penetration. Rural marketing has become the latest marketing mantra of
most FMCG majors. True, rural India is vast with unlimited opportunities, waiting to be
tapped by FMCG majors. To gain advantage of this, the Indian FMCG sector is busy
putting in place a parallel rural marketing strategy. FMCG majors are aggressively
looking at rural India since it accounts for 70 per cent of the total Indian households.
This study aimed at finding the factors influencing the rural customers to prefer a
particular brand in detergent soaps. This study concludes with suggesting the strategic
framework for Marketers to win over the hearts of the rural customers.

Selvaraj, in his article entitled “A Study on Rural Consumer Behaviour Regarding Non-
Durable Goods with Special Reference to Erode District, Tamil Nadu”, points out that
the factors influencing the rural awareness and satisfaction level of rural consumers. It is
found that rural consumers vary not only in their behaviour practices but also in
conviction and belief, yet, the general directing has not, charges widely between rural
and urban consumers as regards aiming on superior quality products.

Rajesh Shinde, in his article entitled “Recent Facts of Consumer Behaviour - A case
study of rural market” , highlighted that the understand the buying decision process,
features influences to purchase, place of purchase and evaluate the sources of
information. It is found that, the place of purchase, which the rural consumer prefers is
the weekly market, which is a good channel of distribution of FMCGs. Moreover the
youth who visits the Taluks or District place are influenced by the city culture and it is
reflected in their purchasing decision.

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Aditya Prakash Tripathi, in his article entitled “Indian Rural Market - A Silver Lining
for the Marketers”, noticed that the Indian rural market has a tremendous potential that
is yet to be tapped. A small increase in rural income results in an exponential increase in
buying power. However, the marketing strategy for rural market has to be different from
that adopted for the urban market, because of different social environment. Appropriate
advertising and personal selling to meet the demand and integrated outlets have become
the essential elements of the marketing strategy for the rural market. the success of
marketing in rural areas depends on how effectively the marketing skills are applied in
the number of complex activities of marketing, beginning with the assessment of the
need of the rural consumers, organizing the production to match the demand, pricing,
advertising and publicity, culminating in the sale of the product at a profit.

Sarangapani and Mamtha, in their article entitled “Rural Consumer: Post Purchase
Behaviour and Consumerism”, focuse on to analyse their consumption patterns with
select FMCGs, to investigate the motives of rural consumers, their brand preferences
and shop patronage with regard to select FMCGs, to examine the post purchase
behaviour of sample rural consumers in terms of their levels of satisfaction and
consumerism in rural areas and to suggest measures for effective marketing practices to
adopted in rural areas to suit rural consumers.

Murlidher Lokhande, in his article entitled “Rural Marketing: A Study of Consumer

Behaviour”, focuses to understand how rural consumers purchase two wheelers, which
are the factors that affect purchasing decisions, etc. It is found that the majority of the
respondents from the village were farmers and they had been using various models of
motor.

Venela, in her article entitled “A Study on Two-Wheelers in the Indian Rural Market”,
points out that the marketing practices in rural market to study the buying behaviour of
rural consumers regarding two wheelers and to identify the place of purchase and
measure the satisfaction level of rural areas. It is found that, most of the consumers who
are owners have listed quality of the product as the prime factor while considering the
various brands of two wheelers.

Suma Devi and Sathiyapriya Eswaran, in their article entitled “Consumer Preference
and Satisfaction towards Health Drinks”, highlight that the consumer preference and
satisfaction towards a particular brand and the usage period of that particular brand. It is
found that the company has to adopt new strategies in order to sell the product more
economical package and better promotional strategies to maintain market constant.

Saravanan, in his article entitled “A Study on consumer Behaviour of Women with

Special Reference to Durable goods in Coimbatore city, Tamil Nadu”, points out that
the factors influencing women purchasing behaviour and the problems faced by women
during and after purchase. He further suggests that the maximum number of women
consumers is not aware of the consumerism and consumer rights. Hence, the
government can conduct some consumer awareness programs for the women

Page | 24
consumers, and it can help to improve purchasing behaviour among the consumer and it
can save consumers from falling into the traps of the deceiving sellers.

Mukesh Garg, has conducted a study on “Consumer cooperatives and rural

development”, focuses on need and importance of the consumer cooperatives, procedure
of their organization, financial assistance available from the Governments. It is found
that, it given proper opportunities; women can prove that they have potential that
exceeds expectations.

Sakthivel Rani, has studied “Consumer Behaviour in Rural Markets: A-B-C-D

Paradigm and its Applications”. This study focuses the consumer behaviour in rural
markets, and to offer generalizations and recommendations to those wishing to market
their products/services in the rural markets. It is found that, the practical applications of
rural consumer behaviour findings in Indian markets have often posed a problem for
marketers for two reasons. First, most consumer research in rural markets has used a
research. Second, there has been no comprehensive framework to integrate the findings
in a meaningful manner. The A-B-C-D paradigm is an attempt which provided a
comprehensive framework that will enable marketers to understand, Integrate and
supply consumer behaviour in rural markets.

Chirag Patel, in his article entitled on “Market share of Health Drinks”, points out that
people are aware of different brands of health drink. Most of the customers prefer to use
glass a day, as it is convenient in both way in terms of quantity and notorious. Brand
name is consider as an important factor while purchasing a health drink and in which
Bournvita is the most preferred brand name among the customer. He further suggested
that the „television‟ has played a vital role in spreading awareness of various health
drink brands. Many people also consider the quality and hygiene maintain by the
company. It is also found that price plays an important role in any product but service
also plays equal importance in success of any product.

Makkar Urvashi and Dhyani Vijendra, in their article entitled, “Consumer perception
towards different media options -An empirical study of rural and urban perspective”,
explains that the marketers to focus attention on the diverse media vehicles in general
and media specifically. Which are the key buying guides for the customers in urban
markets? Provide insight in the formulation of further media strategy by the marketers
enabling them to focus on right media choice and media mix once thing that is sure is
that the media is having a dramatic impact on the consumption patterns of the
consumers irrespective of their affiliation to certain geographical location rural and
urban and their gender. Even in this new business environment, where electronic
transactions are becoming the norms. His use of other media option to document
business transaction is equally important. Specifically for the rural customers indeed as
per the current research.

Prashant Tripathi and Sengupta, in their article entitled “Increasing Role of Children in
Family Purchase Decisions”, point out that influence of children varies by product,
product sub-decision, stage of the decision making process, nature of socialization of

Page | 25
children, families gender role orientation, demographic features such as age gender, and
relative influence has been studied with respect to various factors. They further suggest
that exposure to mass media and discussions with parents ensure that children are not
only aware of the new brands available, but also expertise to evaluate on various
parameters.

Abhigyan Bhattacharjee (2011) in his article entitled “Media Influence on FMCGs-A

Comparative Study among Rural and Urban Households on Their Product

Purchase Decision”, points out that are three related changes in the nature and content
of media that deserves to be highlighted. First, there has been a several fold increase in
the number of television channels in the country, and exponential rise in advertising
expenditure in India, and finally, a related shift has been the altering of the
programming overall media content to suit the corporate interest. He further suggested
that influence of media the purchase of FMCG product seems be similar for both the
rural and urban households the different income classes and family types.

Ganapathi and Anbumalar, in their article entitled “A Study on The Preference of

Consumer for Health Drinks”, they point out that the factors influence the consumer
while purchasing health drink and to know whether there is awareness among the
general public regarding the various brands of health drinks, and also try to find out the
market share for various health drinks which is an urban and rural area, to analyze the
various reasons for certain health drinks that holds major market share and the
consumption behaviours of the consumers. They suggested to most of the consumers are
concerned with the quality of health drinks. Therefore, the manufacturer should take
appropriate steps to develop the quality of the various brands of health drinks.

Kalakumari and Sekar, in their article entitled “A Study on Emotional Brand Loyalty
towards Consumer Health Drinks”, point out that the changing reference of the
customers because in today‟s time, there are much more options in choosing the health
drinks according to the consumers taste. In order to increase the customer‟s satisfaction,
marketers have developed various marketing programs. Were they concluded that the
brand loyalty on consumer health drinks, which was based on the customer‟s mindset,
maintains that building a strong brand involves a series of logical steps.

RESEARCH ABROAD

Harold (1971) in his article entitled “Personality and Consumer Behaviour”, comments
that personality, or better yet, the inferred hypothetical constructs relating to certain
persistent qualities in human behaviour, have fascinated both non-professionals and
scholars for many centuries. The author found that in the fields of marketing and
consumer behaviour, the helps in identifying personality data and to popularize
individual requirements by the marketers.

Louden, David. et al. in their article entitled “Consumers Behaviour Concept and
Application”, identifies the consumers buying behaviour normally should include the
Page | 26
less observable decision processes that accompany consumption, including where, how
often and under what conditions consumers make their purchases of desired goods and
services. Therefore their major activities and strategies such as market opportunities
analysis, target market selection and marketing mix decision, are consumer oriented.

Peter and Jerry in their article entitled “Brand knowledge among Consumers Relates to
the Cognitive Representation of the Brand Consumers‟‟. Brand knowledge can be
defined in terms of personal meaning about a brand stored in consumer memory, that is,
all descriptive and evaluative brands related information.

Jacob Hornik, in his article “Estimating the Time Spent on Shopping Activities”
attempted to construct a unified model of shopping behaviour by drawing on the
households‟ production approach. A formal treatment is presented that takes into
account the explicit relationships between consumers temporal and monetary resources,
stage in the family life cycle, their subjective shopping preferences and shopping
behaviour. Emerged propositions make the study of time use for shopping increasingly
amenable.

Zaltman and Wallaendor, in their article entitled “Consumer Behaviour”, human

behaviour in consumption process involves planning to make purchase, making
purchases and using their varying degrees of satisfaction to make their purchase. In all
these activities, consumers are the target of marketing attempts to influence by major
entities such as business, government agencies, and advocate groups and by social
groups such as one‟s family, friends, and peers.

Jorin, in his article entitled “Consumer behaviour is Changing and Offering New
Opportunities”, examines changes in spending power and buying habits of Swiss
consumers since the beginning of the 20th century and in the more recent past. Current
trends include greater emphasis on health and safety of foodstuffs and less attention to
price, increased demand for low calorie light products, and increased demand for
organically grown foods. For young people, more concern with enjoyment and less for
health, with more meals eaten from home and generally an increased demand for
convenience foods. The prospects for high quality branded products were seen to be
good.

Rees, in his article entitled “Factors Influencing Consumer Choice” , advances factors
influencing the consumer's choice of food are flavour, texture, appearance, advertising,
a reduction in traditional cooking, fragmentation of family means and an increase in
„snacking‟ etc. Demographic and household role changes and the introduction of
microwave ovens had produced changes in eating habits. Vigorous sale of chilled and
other prepared foods was related to the large numbers of working wives and single
people, who require value convenience. Development in retailing with concentration of
80 per cent of food sales in supermarkets was also considered important. Consumers
were responding to messages about safety and healthy eating. They were concerned
about the way in which food was produced and want safe, „natural‟, high quality food
at an appropriate price.

Page | 27
Alexander, in his article entitled “Subcultures of Consumption: An Ethnography of the
New Bikers”, explains the multiple dimensions of brand knowledge. The reality that
emerges from the varied activity in branding through the years is that all different kinds
of information may become linked to a brand, including the following. a) Awareness b)
attitudes c) benefits d) images e) thoughts f) feelings g) experiences purchases he high
price products. Dhillon et al. (1995) in his article entitled “Consumer Behaviour of
Buyers for Durable Goods”, studied the purchase behaviour in Ludhiana, rural and
urban respondents ranked nearby market and main market as their first and second
preference of order respectively for the purchase of food items. Urban respondents
visualized the factors little differently to rural consumers and ranked quality,
appearance, place of buying and expiry date as first, second, third and fourth ranks.

Brodowsky and Howard Glen, in their article entitled “The Role of Country of Origin in
Consumers Purchase Decision”, found that high and low, ethnocentric consumers used
the country information differently and hence the model could be useful for managers
when choosing a location for manufacturing.

Frank (1997) in his article entitled “Correlates of Buying Behaviour of Grocery

Products”, found that there was no significant association between the socio-economic
variables namely social class, gender, intelligence, marital status, family size, and
education of the buyers and their brand loyalty.

Ruth and Commuri, in his article entitled “Shifting Roles in Family Decision Making”,
revealed major economic decisions had become more shared and less controlled by one
family member. Most decisions involved collaboration of partners instead of being solo-
decisions. Also owing to socio-economic changes, some decisions being dominated in
the present.

Kaur, in his article entitled “Impact of Viewing TV on the Social Life of Rural Illiterate
and New-literate Adults”, reported that television viewing enhanced social mobility
among rural adults. She also reported that these influences are related to literacy, status,
gender, and viewing time.

Low and Lamb Jr. came out with an interesting conclusion that well-known brands tend
to exhibit multi-dimensional brand associations, consistent with the idea that consumers
have more developed memory structures for more familiar brand. Consumers might be
willing to expend more energy in processing information regarding familiar brands
compared to unfamiliar brands.

Yee and Young, aimed to create awareness of high fat content of pies, studied consumer
and producer awareness about nutrition labelling on packaging. For this, seven leading
pie brands were analysed for fat content. Most pies did not display nutritional labelling
on packaging. Over half of the consumers (52%) who responded to were aware of the
campaign. The study was successful at raising consumer awareness about the high fat
content of pies and influencing the food environment with a greater availability of lower
fat pies. It is possible to produce acceptable lower fat pies and food companies should
be encouraged to make small changes to the fat content of food products like pies.

Page | 28
Potato topped pies are lower in fat and are widely available. Regular pie eaters could be
encouraged to select these as a lower fat option.

Hugar et al. in his article entitled “Dynamics of Consumer Behaviour in Vegetable

Marketing in Dharwad city”, low-income groups purchased lesser quantity of
vegetables as compared to medium, and high-income groups Majority of low-income
group preferred to purchase vegetables from producers because of reasonable price.
High and medium income families preferred stall vendors for the purchase of vegetables
because of better quality and package content.

Kamenidou, in his article entitled “Purchasing and Consumption Behaviour of Greek

Households towards three processed Peach Products: canned peaches in syrup, juice,
and peach jam. The results revealed that 47 per cent of the households purchased
canned peaches in syrup, 67 per cent peach juice, and 43 per cent purchased peach jam.
Reasons for such purchase were satisfactory taste, qualities, and household's perception
that they were healthy products. The results also indicated that the consumption
quantities were considered low, while households usually purchased the same brand
name, meaning that there was a tendency for brand loyalty.

Schiffman Leon & Kanuk Lazar Leslie (2003) in their article entitled “Consumer
Behaviour”, declares that consumer decision - making can be viewed as three distinct
but inter-locking stages. The input stage, process stage and the output stage. These
stages are depicted in the simplified model of consumer decision-making process. The
psychological factors inherent in each individual affect how the external factors from
the input stage influence the consumer‟s recognition of a need for pre-purchase search,
for information and evaluation of alternatives.

Kim-Hyunah et al. Cause-effect analysis of brand equity factors in contact food service
management company in college and university in Incheon area analysed the
relationship among brand equity factors (brand awareness, brand image, brand
preference and brand loyalty) and suggested a strategy for brand management in
contract food service management companies. He concluded that brand awareness has
positive effect on brand image and brand preference and recommended that the contract
food service companies should focus on improving brand awareness as a brand strategy.
In addition, brand preference and brand image had significant positive effects on brand
loyalty. Thus, the companies should strive to strengthen brand loyalty through building
brand preference and brand image. Brand loyalty promoted more customer visits, which
was directly related to profitability of contract food service management companies, the
authors concluded.

Lahiri et al. in their article entitled “Brand Extensions in Consumer Non-Durables,

Durables, and Services”, this paper investigates the impact of perceived quality,
similarity, consumer knowledge of extended category and consumer innovativeness on
the success of brand extensions in consumer non-durables, durables, and services. The
findings show that perceived quality is an important factor influencing the success of

Page | 29
the extension. However, consumer knowledge of the extended product category does
not have a significant impact on the evaluation of brand extensions.

Lee et al. in their article entitled “Shopping Goals, Goal Concreteness and Conditional
Promotions”, have articulated that goal evoking promotions were more effective in
influencing consumer‟s behaviour when goals were less concrete, such as early in the
shopping process. Further, they concluded that research should articulate how congruity
between consumer goods and the retail environment influences consumer evaluation,
search, and shopping behaviour.

Anderes Hassinger et.al. in his article entitled “Consumer Behaviour in Shopping”,

have attempted to examine the factors responsible for influencing the behaviour of the
consumers. They have identified price, trust and convenience were important factors.
Price was considered the most important factor for a majority of the consumers.
Furthermore, they have three segments such as high spenders, price easers, and bargain
seekers.

Gupta and Sreelata Neelesh, in their article entitled “A Study on Marketing Strategies in
the Indian Soft Drinks Industry, A Case Study of PepsiCo, and Coca-Cola Ltd”, focused
on to study some of the major strategies implemented by the soft drink companies and
to know about the effect of these strategies. They observed that India is probably the
only market where Pepsi is the market leader and coke occupies the second spot.

Page | 30
Chapter 3

Research Methodology

Research is a scientific and systematic research for patient information on a specific

topic. Research refers to a critical, carful and exhaustive investigation or inquiry or
experimentation or examination having as its aim the revision of accepted conclusions,
in the light of newly discovered facts.

Research methodology is a way to systematically solve the research problem. It may be

understood as science of studying hoe research is done.“The study of methods by which
we gain knowledge, it idea with the cognitive process imposed on research by the
problems arising from the nature of its subject-matter”.

Research Design: This research studies are concerned with describing the
characteristics of a particular individual or of a group. This study concerned with
specific predictions, with narration of facts and characteristics concerning individual,
group or situation are examples of descriptive study.

Statement of the problem:

Consumer behavior research is the scientific study of the processes consumers use to
select, secure, use and dispose of products and services that satisfy their needs.
Knowledge of consumer behavior directly affects marketing strategy. This is because of
the marketing concept, i.e., the idea that firms exist to satisfy customer needs. Firms can
satisfy those needs only to the extent that they understand their customers. For this
reason, marketing strategies must incorporate knowledge of consumer behavior into
every facet of a strategic marketing plan. There is a widespread recognition that
consumer behavior is the key to contemporary marketing success.

Retailing has changed the fortune of several companies across the world. In this
booming retail market in India it became inevitable for the companies to learn how to
retain their market share as well as to enhance it. With the entry of bigger players, the
retail market is getting more and more organized and structured. Competition will soon
be very intense. Existing customers generate larger margins and profits than the new
ones.

Research Design:

The focus of the study is to understand the factors influencing buying behavior of
consumers while shopping for apparels in organized retail outlets in New Delhi. It was

Page | 31
 therefore, decided to use explorative design, which befits into the pattern of
investigation. A structured questionnaire was used for the purpose of collecting the data.
New Delhi was divided into five zones and care was taken to cover respondents from all
the zones, so that the study will be representative of entire New Delhi.

Objectives:

 To analyze the influence of demographic variables on the buying behavior of

consumers while purchasing apparels in organized retail outlets;
 To understand the factors that influence the buying behavior of consumers while
shopping for apparels in organized retail outlets;
 To investigate the impact of Sales Promotions by organized retailers on purchase
intention for apparels; and
 To understand the influence of retail store location on consumers shopping for
apparels.

Hypothesis:

The study tries to test the following main hypothesis:

Ha1: Demographic variables have an impact on the buying behavior of consumers

while shopping for products in organized retail outlets;

Ha2: Various store related factors influence the buying behavior of consumers while
shopping for products in organized retail outlets.

The hypothesis Ha1 is further divided into the following sub hypothesis:

Ha11: Gender has an impact on the buying behavior of consumers while shopping for
apparels in organized retail outlets.

Ha12: Age has an impact on the buying behavior of consumers while shopping for
apparels in organized retail outlets.

Ha13: Marital Status has an impact on the buying behavior of consumers while
shopping for apparels in organized retail outlets.

Ha14: Income has an impact on the buying behavior of consumers while shopping for
apparels in organized retail outlets.

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Ha15: Education has an impact on the buying behavior of consumers while shopping
for apparels in organized retail outlets. Ha16: Profession has an impact on the buying
behavior of consumers while shopping for apparels in organized retail outlets.

Data Collection:

To overcome the limitations of incompatibility, obsolescence, and bias, primary data

was collected. Considering the time and money constraints, sampling method of data
collection was suitable for the project.

Primary data:

Primary data are those data that are collected for the first time, It is better to go for
primary data since it is first hand information and there is less chances of personnel bias
and information can be collected with accuracy at the same time. It could be re-
tabulated and survey concerned in various forms this data can be used. For collecting
primary data we have chosen the questionnaire method.

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 100 persons were contacted and interviewed.

SAMPLING:

Here study of the consumer behaviour of the people of New Delhi. Within the city
samples were collected from different areas to reduce the biases this may come through
difference in the level of income, attitude lifestyle etc. of the people in different areas.

Scope of the work:

In the present scenario, the researcher wants to foray into organized retailing in the
Indian sector in order to explore the different aspects that have impact on consumers’
buying behavior. Retailing covers a very wide range of products and services; hence the
researcher has decided to focus only on the organized apparel segment. There have been
a few studies in the past which have concentrated on organized apparel retailing in
different cities in India. However the researcher found that there was a gap in
understanding the buying behavior of consumers with respect to apparels in organized
retail outlets. There was no comprehensive study done to understand the factors that
influence buying behavior of consumers when they shop for apparels in organized retail
outlets especially in Metropolitan cities in India.

The researcher will concentrate the whole analysis based on a survey based quantitative
study in New Delhi. The agenda of the entire study is to know the factors which
influence the buying behavior of consumers while purchasing apparels in organized
retail outlets. Care has been taken to include all the major formats of organized apparel

Page | 33
 outlets in the study. The research will be useful to organized apparel retailers in
Bangalore as well as other metropolitan cities in India. This research intends to help the
organized apparel retailers to understand their customers better. The organized apparel
retailers can concentrate on the important factors which will lead to more customer
footfalls and which will actually enhance the purchase intention of customers. This
study will be useful for organized apparel retailers who are planning to open new
apparel outlets.

Limitation of the Study:

 The study is restricted to some state. Hence it may not be possible to generalize the
finding to the entire population of the country;
 Some of the respondents may not give accurate information, as they may not like to
reveal their actual identity, income etc;
 There may be some positive and negative biases of the respondents;
 Shopper’s may not have the patience to answer all the questions accurately;
 Consumers would like to portray themselves as trendy and elite and may not give their
actual preferences; and
 Promotions and sales may temporarily draw the attention of price conscious customers
who otherwise may go for unbranded apparels from smaller unorganized retailers.

With all limitations and shortcoming, an honest enquiry was undertaken.

Utility of the study

The study will be useful for organized apparel retailers while identifying new store
locations.

 The study will help organized apparel retailers to understand importance of sales
promotions while inducing the consumers to buy apparels. The research will also
help the apparel retailers to understand which type of sales promotion is most
preferred by the consumers.
 This research enquiry will help mall developers and organized apparel retailers
to understand the importance of visual merchandising and store ambience in
attracting the customers.
 This research work will help the different formats of organized retail outlets
such as Department stores, exclusive apparel stores, hypermarkets, discount
stores, factory outlets etc in order to understand which type of apparels to stock
more (i.e., formal, casual, party wear)

Page | 34
 This research study will be of use for academicians and students in order to
understand organized apparel retail in some state and the factors influencing the
buying behavior of consumers with respect to apparels in some state.

Page | 35
Chapter 4

DATA ANALYSIS & INTERPRETATION

We analyse the companies like Colgate & Pepsodent.

Buying Frequency

BRANDS WEEKLY FORTNIGHT MONTHL WHEN

LY Y NEEDE
D
COLGATE 1 1 25 22
PEPSODENT 0 1 14 6

25

20

15 weekly
fortnightly
monthly
10 when needed

0
COLGATE PEPSODENT

Package Size:

BRAND FAMILY MEDIUM SMALL

COLGATE 33 15 1
PEPSODENT 16 4 1

Page | 36
 35

30

25

20 PACKAGE SIZE FAMILY

PACKAGE SIZE MEDIUM
15 PACKAGE SIZE SMALL

10

0
COLGATE PEPSODENT

The frequency of purchase mainly depends on the brushing habits and the number of
members in the family. 66% of the people preferred the family pack while 31%
preferred the medium pack.

Based on this survey, most of the respondents are unhappy about the price that they pay
for their favourite brand. This is evident from the fact that pricewise the rating of the
brand is very poor compared to product, availability and promotion. Hence as far as the
price is concerned, the company should consider the views of consumer otherwise the
consumer switch over to competitor’s product is inevitable. Currently, price range
varies from Rs. 05-10 for a small pack in the economy segment, Rs15-25 for a medium
pack in the regular segment and Rs 40 and above for a family pack in the value added
segment. Thus, analysing economic factor is an important task for the company to fix
the price.

Buying Location:

BRAND LOCAL GENERAL SUPER MEDICAL

MARKET

COLGATE 18 11 13 7
PEPSODENT 7 6 5 3

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 18

16

14

12

BUYING LOCATION LOCAL

10
BUYING LOCATION GENERAL
8 BUYING LOCATION SUPER MART
BUYING LOCATION MEDICAL
6

0
COLGATE PEPSODENT

The above data helps us conclude that respondents of all other brands buy toothpaste
from a local shop. The other buying locations such as a general store or a super mart or
a medical store have relatively less buyers. The only exception that we found to this rule
is the brand Sensodyne which people prefer to buy from a general store or a super mart
or even a medical store more than a local store.

Purchase Influence:

BRAND RETAILER FAMILY FLAVOUR ADV LOOKS

COLGATE 6 14 12 16 1

PEPSODENT 6 5 8 1 0

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 16

14

12

10 PURCHASE INFLUENCE RETAILER

PERCHASE INFLUENCE FAMILY
8 PURCHASE INFLUENCE FLAVOUR
PURCHASE INFLUENCE ADV
6
PURCHASE INFLUENCE LOOKS

0
COLGATE PEPSODENT

Based on the study it is interesting to see that in the sample size of 100 respondents 27
of them prefer their brand of toothpaste only due to the “taste” or “flavour” factor while
25 of them are influenced by their family tradition in buying their preferable brand.
Further 23 people are influenced by advertisement and 20 people buy toothpaste which
is of their retailer’s choice. It is important for the manufacturer to keeps these attributes
in mind for deeper penetration into the market.It is also seen that basically there are
three kinds of purchase influences for any product. Informational influence, normative
influence, and identification influence. Informational influence means that an individual
uses the behaviour and options of group member to gather useful information.
Normative influence refers to an individual’s achieving group expectations and gaining
the respect of and sense of belonging to the group. Identification influence occurs when
an individual understands the values and norms of the group.

Usage Longevity:

BRAND >1 YEAR <1 YEAR

COLGATE 19 30

PEPSODENT 11 3

Page | 39
 30

25

20

USAGE>1 YEAR
15
USAGE<1 YEAR

10

0
COLGATE PEPSODENT

It was seen that the penetration of toothpaste was high in Kolkata as all the 100
respondents who were questioned used toothpaste. It was also seen that 55 out of 100
people have been using their brand of toothpaste for over ayear while the remaining 45
have been using their brand of toothpaste for less than a year. This implies that a large
part of the population have switched brands over the last year which means that the
toothpaste market is still lucrative and this factor might encourage some new players to
come into the market in the future provided they have the right mix of strategy. This is
already true with the brand Sensodyne which was launched only last year and it is
already competing fiercely with global leaders like Colgate.

Areas in Which Brands Can Improve:

BRAND FLORIDE FOAMING COLOUR FLAVOUR

COLGATE 22 11 1 15

PEPSODENT 10 3 3 5

Page | 40
 25

20

BRAND IMPROVEMENT FLORIDE

15
BRAND IMPROVEMENT FOAMING

BRAND IMPROVEMENT COLOUR

10
BRAND IMPROVEMENT IN
FLAVOUR

0
COLGATE PEPSODENT

For Colgate the biggest improvement should be in its Fluoride content followed by its
flavour, foaming and colour.

For Pepsodent also, improvisation 1st needs to done in its fluoride content followed by
flavour colour and foaming.

Clearly enough the first criterion for all the companies to improve their product is in
their fluoride content after which comes flavour foaming and at last colour.

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Brand Loyalty:

BRAND YES NO MAYBE

COLGATE 6 19 24

PEPSODENT 7 5 9

25

20

15
BRAND SWITCHING YES
BRAND SWITCHING NO

10 BRAND SWITCHING MAY BE

0
COLGATE PEPSODENT

Switch Simulator:

BRAND PRICE OFFER ORAL OTHERS

REDUCE BENEFITS

COLGATE 7 6 16 0

PEPSODENT 3 0 13 0

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 16

14

12
SWITCH SIMULATOR PRICE
REDUCE
10
SWITCH SIMULATOR OFFER
8
SWITCH SIMULATOR ORAL
BENEFIT
6
SWITCH SIMULATOR OTHERS

0
COLGATE PEPSODENT

The reasons for a consumer to switch from a particular brand of toothpaste to a

particular one are many. But the majority of people are becoming more aware of the
oral health quotient offered by brands such as Sensodyne which is seen as a driving
force for brand switching in the recent times. Hence it is seen that the overall mentality
of the people is slowly shifting from being “brand loyal” to becoming a “health
conscious” one. But when it comes to comparisons among brands about loyalty Colgate
surprisingly emerges the winner among other giants. Colgate in this regard had a very
close fight while the Pepsodent users seemed to be the least loyal towards their brand.

Brand Loyalty vs. Age:

0-15 years 15-25 years 25-35 years 35+ years

0 17 12 10

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Most brand-loyal are the age group of 15-25 followed by 25-35 and later by people
above 35 years of age. As age increases people tend to be lesser brand-loyal and there is
a high possibility that as age gradually increases the concern of the brand factor itself
decreases. The greatest target of the toothpaste should be the young blood.

Brand Image:

BRAND PRODUCT PRICE PROMOTION AVAILABILITY

COLGATE 146 137 136 156

PEPSODENT 61 50 60 60

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 160

140

120
CURRENT BRAND RATE PRODUCT
100
CURRENT BRAND RATE PRICE
80
CURRENT BRAND RATE
PROMOTION
60
CURRENT BRAND RATE
AVAILABILITY
40

20

0
COLGATE PEPSODENT

Based on this study the preference for selecting toothpaste is mainly based on brand,
quality, and flavour. It was seen that Colgate still enjoys the majority amongst the
people closely followed by Close-up, Pepsodent and Sensodyne. Hence well established
brands such as Colgate and close-up which have been flourishing in the Indian market
for decades control the market share of toothpaste. This is attributed to the following
fact. India is a country knows for keeping its traditional values and hence a lot of people
still blindly follow their family traditions even while buying a particular brand of
toothpaste. The concept of brand image is slowly starting to change with the youth
population becoming more and more health conscious and trying out newer products
offering oral health benefits and hence it would be advisable for the brands to
concentrate more on the oral health care.

Various Attributes and the Brand Rating One Their Basis:

BRAND/ATTRIBUTE COLGATE PEPSODENT

FRESHNESS 161 214
CAVITY 178 190
ENEMAL 181 197
WHITENING 166 209

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TASTE 176 217
FRESHNESS
250

200

150

100
TASTE CAVITY
50
COLGATE
0
PEPSODENT

WHITENING ENEMAL

Based on this study, product attributes play a crucial role in influencing the consumers
for decision making while buying a brand. Various attributes such as breath freshening,
cavity prevention, enamel protection, teeth whitening and taste were taken into
consideration. It was found that Colgate was a favourite brand for breath freshening
closely followed by close-up and Pepsodent. For cavity prevention, Colgate was the
preferred brand in enamel protection. Colgate again won the majority in the teeth
whitening and taste category. Overall, it was seen that the health benefits of particular
toothpaste had been the driving force behind the consumer purchase behaviour of a
brand and this shift in the trend had been noticed very recently.

Source of Awareness about the Brand:

BRAND FAMILY FRIENDS ADVS AGENTS OTHERS

COLGATE 20 10 13 4 2

PEPSODENT 4 1 9 3 4

Page | 46
 20

18

16
BRAND AWARENESS SOURCE
14 FAMILY
BRAND AWARENESS SOURCE
12 FRIENDS

10 BRAND AWARENESS SOURCE ADVS

8 BRAND AWARENESS SOURCE

AGENTS
6
BRAND AWARENESS SOURCE
4 OTHERS

0
COLGATE PEPSODENT

Based on the study conducted it was found that people were only aware of the big
players like Colgate & Pepsodent. It was additionally seen that Indian brands which are
supposed to be ayurvedic have little or no penetration in the market. This goes to show
that there is still scope for further improvement in the marketing and advertising
campaign for the two Indian brands to make them competent with the market leaders
like Colgate.

Age vs. Brand:

AGE COLGATE PEPSODENT

0-15 0 0
15-25 100 140
25-35 40 69
35+ 32 51

Page | 47
 140

120

100

80
COLGATE
PEPSODENT
60

40

20

0
0-15 15-25 25-35 35+

For age group 15-25: 1st preference is Colgate, 2nd preference is Pepsodent

For age group 25-35: 1st preference is Colgate, 2nd preference is Pepsodent

For age group 35+: 1st preference is Colgate, 2nd preference is Pepsodent

Final word: Colgate emerges the clear winner in all age groups. Pepsodent as always
had a close fight. Pepsodent in spite of being the last choice seems to be doing quite
well if we take the time of existence factor into consideration.

ANNOVA TESTING:

To test whether the two attributes age and preference level of a brand are associated or
not.

Ho: The preference level of a brand is different in different age groups

H1: the preference level of a brand is not different in different age age groups.

Page | 48
AGE GROUP COLGATE PEPSODENT
<15 0 0
15-25 21 15
25-35 12 3
>35 8 4

COLGATE PEPSODENT
9 81 -3 9
0 0 -9 81
-4 16 -8 64

5 97 -20 154

Page | 49
F calculated=Mean Sum of squares between samples (MSB) /MSE =116.66/21.25
=5.489 F tabulated for 3, 8 degrees of freedom (Dof) = 7.5 F calculated < F tabulated
.Hence null hypothesis H0 is accepted. Hence it is seen that the preference level of a
brand is different in different age groups.

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Occupation vs. Brand:

OCCUPATION COLGATE PEPSODENT

SALARY 62 92
BUSINESS 23 29
STUDENT 73 112
OTHER 14 27

120

100

80
SALARY
BUSINESS
60
STUDENT
OTHER
40

20

0
COLGATE PEPSODENT

Salaried: 1st preference is Colgate, 2nd preference is Pepsodent

Business: 1st preference is Colgate, 2nd preference is Pepsodent

Student: 1st preference is Colgate, 2nd preference is Pepsodent

Other: 1st preference is Colgate, 2nd preference is Pepsodent

To wrap up Colgate is best among all occupations . Pepsodent are not close competitors
in this segment. It comes last in all occupations is still doing great especially among
business and student class. Based on this study demographic factor like age and
occupation influence people indirectly for decision making. This is supported by
following evidence. It was found that out of 100 people questioned 41 were students
who preferred the medium pack while 37% were salaried and 12% were businessmen
and this chunk of the population preferred the family pack. Since the study was limited
to Kolkata city people preferred only known brands which have been existing in the
market for many years such as Colgate, Close-up and Pepsodent while lesser known
brand such as Sensodyne largely do not have much takers.

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Findings

Demographic factor

Based on this study demographic factor like age, gender, education, status, and income
influence people indirectly for decision making. This is supported by following
evidence.

Demographic factors play a major role in children’s power to influence their parents.
For example, they argue that age is a relevant variable as older children are presumed to
be more knowledgeable about products and family needs. This is mainly due to their
increase in cognitive development. However, findings on whether product knowledge
has a positive impact on teenagers’ influence differ. Adolescents were found to have
greater influence in concept-oriented families, and if they had better grades. Also,
parental employment status (single versus dual income) appears to affect teens’
influences for some product categories (stereo phones) but not for others (TVs, VCRs,
furniture). For instance, adolescents from traditional homes, whose mothers have a
career, are more influential in family decision making, possibly due to guilt on the
mothers’ part.When trying to influence their parents, children use different types of
influence, e.g. bargaining, persuasion, emotional, and request strategy. According to
importance and time frame of the presumed purchase, six kinds of response strategies
are normally used by parents (bargaining, persuasion, emotional, expert, legitimate, and
directive strategy).

Usage

Based on this study 80% of the consumers using toothpaste in New Delhi.50% of the
respondents are brushing twice in a day than once and thrice. When compare to other
products like toothpowder and mouth wash, the availability of toothpaste is more in the
market and also the package size is convenient for the consumer. So the usage rate is
high for toothpaste. This also supported by following review. It showed that
consumption increases with inventory, not only because of the stock pressure from
inventory holding costs, but also because higher inventories give consumers greater
flexibility in consuming the product without having to worry about replacing it at high
prices. They found no category expansion effect in the detergent category. Showed in a
lab study that promotional activity might cause consumers to consume a stockpiled
product more quickly. The research performed by Wansink demonstrated that larger
package sizes influence the usage volume of usage variant products, partially because
larger packages are perceived to be less expensive to use (lower perceived unit costs).

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Awareness

Based on this study the awareness level of toothpaste brand was less in New Delhi city.
People knows only the popular brands like Colgate & Pepsodent. So they purchase only
known brand. In New Delhi most of the respondents aware of Colgate then Pepsodent
then regional players like Dabur, Anchor, and Ajanta. This is supported by the
following review.

Most of the respondents used 3 brands, two brands, and three. Due to Indian family set
up most of the consumers using only one common paste for the entire family. Oral care
awareness and brand awareness is less in new delhi. Product awareness is an important
factor for buying a product. The oral care awareness level is less in India, when
compare to other counters like Europe and Thailand. Per capita consumption of
toothpaste is only 70gm in India. In oral care toothpowder, toothpaste and toothbrush
dominating the Indian market but in other countries mouth spray, mouth wash products
also dominate in the market. Still in India rural area people are using neem and tobacco
for brushing. So the manufacturing companies and government both are responsible for
creating awareness through advertising campaign.

Brand awareness can also effect decisions about brands within the consideration set.
Consumers may employ heuristic (decision rule to buy only familiar well, established
brands. Consumers do not always spend a great deal of time making purchase decisions
in a study of pre purchase search for laundry, Some people found that the median
number of packages- store was around 1:2 before a selection was made.They found that
purchases such as coffee toothpaste and margarine, the consumer took an average 12
seconds from the time of first looking at the shelf’s to the time they placed in their
trolley.

They designed a controlled experiment probe the role of brand awareness in the process
of consumer choice for the purchase of peanut, butter, whose results revealed that brand
awareness was a dominant factor in both initial (trial) and repeat purchase decisions
even when the quality of the selected brand was inferior to that of the other brands.

Frequency of purchase

Based on this study frequency of purchasing is based on the brushing habit and
members in the family. Most of the respondents, buying once in a month, twice and

Page | 53
thrice. So frequency of purchasing is mainly based on usage rate and promotional effect.
This is supported by following review. The study of people implied a positive
relationship between high frequency of purchase and promotional elasticity. Based on
that, they hypothesized that shorter consumer inter purchase time’s result in more brand
switching because the consumer must live with the consequences of buying a less
preferred brand for a shorter period. In addition Narasimhan et al. conjectured that
interpurchase times are related to purchase acceleration. Long inter purchase times
discourage acceleration because the stockpiled product must be stored for a longer
period of time. This was supported by empirical findings. They found less stockpiling
for often purchased products.

Dentist’s advice

Based on this survey most of the respondents accepted the advice of dentist to avoid
dental problem, some respondents changed their brand due to taste problem, few
respondents ignored the dentist advice because they felt that this is a sales promotion
technique backed by company, some are not interested in oral care. The dentist to
population ratio is a critically low 1:35000 in the country. This results in low oral
hygiene consciousness and widespread dental diseases. So the Government and
company is responsible for creating awareness through dental campaign to avoid dental
problem and increase the consumption of toothpaste in India

Price

Based on this survey, most of the respondents are influenced by price then availability,
and then packaging .For increasing the price of a product the company should consider
the views of consumer otherwise the consumer switch over to competitor product. This
is supported by the following review.

Vani, Ganesh, and Panchanatham discussed the price of toothpaste in their research
work(Oral care segmentation)- Price wise toothpaste can be segmented as economy,
regular and value added segment. The price range varies from Rs. 15-20 for a 100gm
pack in the economy segment. Rs30-35 for a 100gm pack in the regular segment and Rs
50 for 100gm pack in the value added segment. So analyzing economic factor is an
important task for the company to fix the price.

Product attributes

Based on this study product attributes also influencing the consumers for decision
making. Most of the respondents gave importance to healthy tooth and gums, prevention
of tooth decay, herbal attribute, whiteness, long lasting freshness, and good foam. So

Page | 54
people consider the benefit of the product for buying toothpaste. This supported by the
following review.

Vani, Ganesh and Panchanatham (2011) discussed the benefit of toothpaste in

toothpaste buying model. In this article they discussed about decay prevention and
brighter teeth.-Large number of families with children seriously concerned about the
possibilities of cavities and shows a definite preference for fluoride toothpaste. Large
group of young married people smoke more than average. They are giving importance
to brighter teeth. So analyzing the requirement of people is important factor for selling
the product successfully in the market.

Brand image

Based on this study the preference for selecting toothpaste is mainly based on brand, n
quality, and flavor. Brand image influencing the consumer mind and consumer feel the
quality of the product. This is supported by the following review. People suggested that
the brand image was an extrinsic attribute of the product. He believed that the brand
image has less impact compared to intrinsic attributes. Vani suggested that the brand
image served as a channel for providing certain information to the customer. Ganesh
noted that the brand image was considered to be a consistently favorable factor as a risk
reliever. Some found that the consumer has a more positive attitude toward the product
with a brand image than toward the product with no brand image.

Reference group

Based on this study parents are influencing more for buying toothpaste then friends,
spouse, kids and self decision. So reference group also influencing the consumer in
decision making. This is supported by the following review. Vani,Ganesh suggested
that the reference group provided three types of influences. Informational influence,
normative influence, and identification influence. Informational influence means that an
individual uses the behavior and options of group member to gather useful information.
Normative influence refers to an individual’s achieving group expectations and gaining
the respect of and sense of belonging to the group. Identification influence occurs when
an individual internalizes the values and norms of the group.

Advertising

Based on this study majority of the respondents influenced by advertisement for buying
toothpaste. In recent circumstances technology plays an important role in decision

Page | 55
making; especially in advertising field the technology role is very high. Television
advertisement inducing the consumer mind for decision making, especially kid’s
advertisement for toothpaste influencing the kids to influence the parents to buy a
particular brand. Other kind of advertisement in magazine, newspaper also influencing
the people. Advertising is a strong base for consumer to select toothpaste. Celebrity
endorsement also influencing the consumer for decision making; attractive banner in
road side attracts the consumer to select a particular brand. This is supported by the
following review.

A successful nation economy depends on advertising promoting sales so that factory

production is maintained, people are employed and have spending power, and the
money goes round and round. Advertising, it has been conjectured in prior literature,
shapes consumer preferences in multiple ways. The first, most obvious effect is that
advertising informs the consumer of product attributes and hence raises awareness and
knowledge of the true quality of the brand. This has been called the informative effect
of advertising.Second, advertising may directly influence a consumers brand evaluation
through such cues as celebrity endorsements and music, even without providing any
explicit information. This has been referred to as the persuasive or prestige effect of
ads.Third, advertising can influence how consumers experience and evaluate the quality
of the product from subsequent consumption. This effect has been evocatively referred
to as the transformative effect of advertising .

Sales promotion

Based on this study most of the respondents influenced by free gift, extra quantity and
discount. So free gift influencing the customer for decision making. This is supported
by the following review. Vani in advertising impact using the power of promotional
gifts. The power of promotional product rests with reciprocation. If the right gift is
presented properly the recipient will want to give something back. So the free gift is an
essential tool in promoting the product. Normally human being is attracted by any kind
of free gift.

Brand switching

Based on this study switching of one brand to other brand is mainly based on
advertisement impact and offers provided by the companies. Sudden increase in price
also affected the respondents to switch .Some respondent’s switch to other brand for
trying new option. In some cases friends, kids, parents relatives influencing the people
to switch. So promotion played an important role in switching. This is supported by the
following review. Gupta concluded that more than 84% of the sales increase due to
promotions is accounted for by brand switching (a very small part of which may be
switching between different sizes of brands).They offer an empirical generalization on
promotional response. They concluded that brand switching varies systematically across
product categories.

Page | 56
Suggestions and Recommendations

 The companies should give more emphasis on advertising and sales promotion
and the toothpastes should sport medicinal values which would help in
combating oral health issues.

 The customers are becoming king as they have a whole lot of choices. Hence the
companies should try to be cost effective and pass on the saved amount to the
customer.

 Retailers are still the place to buy toothpaste. So the companies should focus on
retailers also who is also a customer for their products.

 The companies should try to launch new products after thorough research of the
consumers as they are becoming more dynamic day by day.

 The companies should target the youth of the country preferably the age group
of 15-35 as slowly they are also bringing changes in their purchase decisions as
well as in their family purchases.

 The brands like close up and Sensodyne which are less popular should plan to
launch new flavours, to attract customers who would like to change from their
existing brand.

 They should bring about some changes in their packaging and labelling

Page | 57
Conclusion

The toothpaste industry is going to be more competitive in the near future. The profit
margin is going down over the year and this might continue in the future as well. So the
main mantra for the companies to be successful is to satisfy the consumers and develop
brand image and brand loyalty amongst them. It has become very necessary for the
consumers to understand the mentality of the Indian consumers very well. In the future
the companies, who come up with new products at competitive prices and with good
quality keeping the oral health quotient in mind, are going to the successful.
Promotional activities are also going to play an important role that should to be for both
retailers and consumers. So we are going to see a market which is going to heat up in
the near future where mainly two major players Colgate and HLL will fight the war.

Page | 58
Bibliography

The major sources of information were:

www.google.com

www.colgate.com

www.pepsodent.com

Page | 59
Questionaire:

What percentage of consumer awareness for using toothpaste?

a) Colgate b) Pepsodent

5
4.5
4
3.5
3
2.5 2017
2 2016
1.5
1
0.5
0
colgate pepsodent

Which age use which brand of toothpaste?

a) Colgate b) Pepsodent

5
pepsodent
4
colgate
3

0
0-15 15-25 25-35 35+

Page | 60
 What is your favourite brand of tooth paste?

a) Colgate b) Pepsodent

What attracts you to the product you choose?

a) Flavour c) Frothiness

b) Packaging d) price

Have you ever had any side effects using this brand of toothpaste?

a) Colgate yes no
b) Pepsodent yes no

Brand rating as per usage of toothpaste?

(Give stars out 10)

a) Colgate ****
b) Pepsodent ***

Page | 61
Page | 62