A STUDY ON MARKET SEGMENTATION IN FAST-MOVING CONSUMER GOODS

(FMCG) COMPANIES RELATED TO HAIR CARE PRODUCTS WITH SPECIAL

REFERENCE TO CHANDIGARH

SYNOPSIS

Submitted to Eternal University

In the partial fulfillment for the
Degree of
MBA (Master of Business Administration)
In
Marketing
By
Varsha Umarnani (BS17MB009)

Department of Management
Akal college of Economics, Commerce and Management
Eternal University, Baru Sahib, Sirmour, (HP), India
July 2018
Name of Student : Varsha Umarnani
Registration No. : BS17MB009
Major Subject : Masters in Business Administration
Name of Major Advisor : Dr. Amandeep Singh
Name of Department : Department of Management
Name of College : Akal College of Economics, Commerce &
Management

1. Title: A Study of Market Segmentation in Fast-Moving Consumer Goods (FMCG) Companies

with special reference to Chandigarh.
2. Introduction:
The process of dividing a broad consumer or business market, normally consisting of existing and
potential customers, into sub-groups of consumers. Buyers in any market differ in their wants,
resources, locations, buying attitudes, and buying practices. Through market segmentation, companies
divide large, heterogeneous markets into smaller segments that can be reached more efficiently and
effectively with products and services that match their unique needs.
Many different ways to segment a market have been identified. Business-to-business (B2B) sellers
might segment the market into different types of business or countries. While business to consumer
(B2C) sellers might segment the market into demographic segments, lifestyle segments, behavioral
segments or any other meaningful segment.
Market segmentation assumes that different market segments require different marketing programs –
that is, different offers, prices, promotion, distribution or some combination of marketing variables.
Market segmentation is not only designed to identify the most profitable segments, but also to
develop profiles of key segments in order to better understand their needs and purchase motivations.
Many marketers use the S-T-P approach; Segmentation→ Targeting → Positioning, as a broad
framework for simplifying the process. Segmentation comprises identifying the market to be
segmented; identification, selection, and application of bases to be used in that segmentation; and
development of profiles. Targeting comprises an evaluation of each segment's attractiveness and
selection of the segments to be targeted. Positioning comprises identification of optimal position and
development of the marketing program.
2.1. BASIS FOR SEGMENTING CONSUMER MARKET

Consumer Market Segmentation

Geographic Demographic Psychographic Behavioral

Countries Age Life Style User Nations

Nations Gender Social Class Usage rate
States Sex Personality Benefits sought
Regions Family Occasions
Cities Education Loyalty
Neighborhoods Income Attitude

1. Geographic Segmentation
Geographic segmentation divides markets according to geographic criteria. In practice, markets can
be segmented as broadly as continents and as narrowly as neighborhoods or postal codes. Geographic
segmentation may be considered the first step in international marketing, where marketers must
decide whether to adapt their existing products and marketing programs for the unique needs of
distinct geographic markets. Geographic segmentation is widely used in direct marketing campaigns
to identify areas which are potential candidates for personal selling, letter-box distribution or direct
mail.
2. Demographic Segmentation
Demography is based on consumer- demographic variables such as age, income, family size, socio-
economic status, etc. Demographic segmentation assumes that consumers with similar demographic
profiles will exhibit similar purchasing patterns, motivations, interests and lifestyles and that these
characteristics will translate into similar product/brand preferences.
3. Psychographic Segmentation
Psychographic Segmentation, which is sometimes called psychometric or lifestyle segmentation, is
measured by studying the activities, interests, and opinions of customers. It considers how people
spend their leisure, and which external influences they are most responsive to and influenced by.
Psychographics is a very widely used basis for segmentation, because it enables marketers to identify
tightly defined market segments and better understand consumer motivations for product or brand
choice.
4. Behavioral Segmentation
Behavioral segmentation divides consumers into groups according to their observed behaviors. Many
marketers believe that behavioral variables are superior to demographics and geographic for building
market segments. Marketers customize the variable and descriptors for both local conditions and for
specific applications. For example, in the health industry, planners often segment broad markets
according to 'health consciousness' and identify low, moderate and highly health conscious segments.

Fast-Moving Consumer Goods (FMCG) or Consumer Packaged Goods (CPG) are products that
are sold quickly and at relatively low cost. Examples include non-durable goods such as packaged
foods, beverages, toiletries, over-the-counter drugs and many other consumables. In contrast, durable
goods or major appliances such as kitchen appliances are generally replaced over a period of several
years. Some FMCGs, such as meat, fruits and vegetables, dairy products, and baked goods, are highly
perishable. Other goods, such as pre-packaged foods, soft drinks, chocolate, candies, toiletries, and
cleaning products, have high turnover rates. The sales are sometimes influenced by holidays and
seasons. 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.
The following five companies are selected based on largest customer base (IBEF 2016)
1.Company Prospects
(a) Hindustan Unilever Limited
Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods Company. HUL
works to create a better future every day and helps people feel good, look good and get more out of
life with brands and services that are good for them and good for others. With over 35 brands
spanning 20 distinct categories such as soaps, detergents, shampoos, skin care, toothpastes,
deodorants, cosmetics, tea, coffee, packaged foods, ice cream, and water purifiers, the Company is a
part of the everyday life of millions of consumers across India. Its portfolio includes leading
household brands such as Lux, Lifebuoy, Surf Excel, Rin, Wheel, Fair & Lovely, Pond’s, Vaseline,
Lakme, Dove, Clinic Plus, Sunsilk, Pepsodent, Close-up, Axe, Brooke Bond, Bru, Knorr, Kissan,
Kwality Wall’s and Pureit.
(b) Procter & Gamble Hygiene & Health Care Limited (P&G)
The Company has 21 product categories out of which only 8 product have presence in India. The
company is planning to launch the rest 13 product in India. It primarily specializes in a wide range
of cleaning agents and personal care and hygienic products. The company expects to see a growth in
other categories. The company has an aggressive plan to set up 20 new factories across the World out
of which 19 is expected to come in emerging markets and most of them would be seen in Brazil,
Russia, India and China (BRIC) nations. Whisper which is one of the company’s powder brands has
recorded 50 per cent market share in urban India.
(c) Godrej Consumer Products Limited (Godrej)
The Board of Directors of Godrej Consumer Products Limited (GCPL) has approved the acquisition
of 50 per cent stake of its joint venture partner SCA Hygiene Products’ stake in Godrej SCA Hygiene
Limited. After the transaction, the Joint Venture which owns the ‘Snuggy’ brand of baby diapers will
became a 100 per cent subsidiary of GCPL. Godrej Consumer Products Limited has acquired 100 per
cent stake in Kinky Group Limited, South Africa. Kinky is among one of the largest brand into hair
segment with product portfolio.
(d) Dabur India Limited (Dabur)
Dabur derived from “daktar burman” is India largest Ayurvedic medicine & natural consumer
products manufacturer. Dabur has entered into the malted food drink market with the launch of a new
health drink “Dabur Chyawan Junior”. According to the company, they expect to capture a market
share of 10 per cent of the Rs. 1,900 crores malted food drink market over the next two years. Dabur
has acquired 72.15 per cent of Fem Care Pharma Ltd (FCPL), a leading player in the women’s skin
care products market, for Rs 203.7 Crores in an all-cash deal. The Company is expected to create
synergy by this deal. Dabur got approval from Government of Himachal Pradesh to set up another
medicine manufacturing unit. The project has an expected investment of Rs. 130 Crores.
(e) Patanjali
Patanjali Ayurved Limited produces quality Herbomineral preparations. To monitor quality, the
Divya Yog Mandir Trust and Patanjali Yog Peeth grow many endangered herbs on its farmland. The
principles of Good Manufacturing Practices (GMP) are rigorously followed in the plant and Company
prides itself on being environment friendly.A high stress on quality, several quality circles and special
quality circles and special project teams working on Total Quality Management (TQM) projects make
quality a way of life in Patanjali Ayurved Limited. This enables Patanjali Ayurved Limited to
produce herbomineral preparations with uniform levels of batch-to-batch consistency. This ensures
that the customer gets the same high quality product regardless of where it is purchased.
3. Scope:
This study will help in understanding the various targeting strategies used by the various FMCG
companies. This study will also test the various bases of market segmentation and their impact on
buying behavior of the customers. This study will also highlight the importance of use of new basis
for market segmentation.
4. Objectives:
1. To study the impact of market segmentation on buying behavior of the customers.
2. To study the various targeting strategies used by FMCG companies.
5. Expected new knowledge:
This study will highlight the various kinds of targeting strategies used by FMCG companies. This
study will bring out the impact of various basis of market segmentation on the buying behavior of the
customers. This study will tend to purpose new models/basis for market segmentation for catering the
needs of the customers in a better way.
6. Review of literature:
A literature is a scholarly paper, which includes the current knowledge including substantive findings,
as well as theoretical and methodological contributions to a particular topic. Literature reviews are
secondary sources, and do not report new or original experimental work. The literature available is
presented below.
Hassan S S, Craft S H (2005) created an increased understanding of linking global market
segmentation to decisions with strategic positioning options. The purpose of this paper was to
examine empirically the relationship between positioning strategies and bases of segmentation in
international markets. A principal component analysis was conducted to determine the major macro-
as well as micro-bases of segmentation that are linked with strategic positioning decision options.
Further, a regression analysis was used to examine the effect of each of the segmentation bases on the
different strategic positioning options used by segmentation manager. The findings indicate the value
of both macro- and micro- bases of segmentation in order to leverage similar strategic positioning
across global markets. However, micro-bases of segmentation are suggested for firms seeking
differential positioning strategies. The academic understanding and managerial practice of linking
global market segmentation with strategic positioning decisions. The limitation of study was this
framework conceptualizes the way for embarking on promising and relevant future research that is
needed to substantiate and enrich the academic understanding and managerial practice of linking
global segmentation with strategic positioning decisions. Future research should focus on the use of
hybrid segmentation strategies; its logical design; implementation issues; and its evaluation
mechanism. This study shows that provides specific empirical evidence of a relationship between the
strategic use of segmentation and strategic positioning.
Metaxas T (2005) the purpose of the paper is to present a structural analysis of market research and
target market segmentation procedures in Place Market implementation. It supports that this structure
is characterized by flexibility since it can be used in more specialized research fields such as: tourism,
culture, innovation, business activities, leisure and recreation etc. The paper focuses on city’s internal
an external environment in micro-macro economical level, trying to set up a wide range of concernin
the planning and the successful performance of Place Marketing.
Goyat S (2011) reported that with the dominance of demographic and psychographic factors for
segmentation but critically I observe that there is great influence of extraneous variables as price,
trends, and market conditions on the purchase of the consumers. It is also observed that segmentation
is completely dependent upon all four traditional bases not on single one. This facilitate that there is
need of further research in market segmentation area in different specified areas to find the
dominating basis of market segmentation.
Premkanth P (2012) says that in this competitive commercial world, an organization has to satisfy the
needs and wants of the customers, and has to attract new customers, and hence enhance their
business. Market segments and marketing mix has strong impact on customer satisfaction. Their study
discuss that the Market Segmentation highly positive impact on customer Satisfaction.
M V Raghunandan & Ramaswamy S (2017) introduced marketing in FMCG segmentation in Retail
Sector. The retail sector in India is one of the largest growing industries in this developing economy.
Market can be segmented and the target market of any product and service could be properly
identified (in the Indian retail sector – in present research) and the research want to find which
combination and model of segmentation would be really help the Indian retail sector – especially
malls for better rearrangement of their way of working and addressing market and the choosy,
undecided, changing, vibrant, sometimes confused and economically growing (powerful) Indian
retail. Lastly, the study on how the segmentation could be used for retail sector as a strategy for better
sustainability and growth.
7. Research Gap:
A lot of studies have been conducted in the field of market segmentation in various FMCG
Companies but their scope is always limited up to studying them from company’s perspective. This
study will tend to study the impact of market segmentation from customers’ perspective. This study
will also test each basis of market segmentation and their impact on purchase routine of customer.
8. Technical programme:
8.1. Name of study:
The study entitled “A Study on Market Segmentation in Fast-moving consumer goods companies
(FMCG) Companies related to Hair Care Products with special reference to Chandigarh.
8.2. Research Methodology
Location: Locations of the study for the research purpose will be Chandigarh.
Sample Size: Sample size will be 100 that will be taken from selected 5 companies on a random
basis.
Product: The study will be focused on Hair Care segment of FMCG companies.
8.3. Tools for Collection:
The study is purely based on primary data. Primary data will be collected by a well structured
questionnaire from the customers of FMCG Companies. A sample of 100 customers will be taken on
random basis.
8.4. Tools for Data Analysis:
The data is proposed to be analyzed with the appropriate statistical and mathematical tools as per the
requirement of the research.
8.5. Data Collection:
The data for the present study is proposed to be collected through primary as well as secondary
sources.
· Primary Data: The Primary data is proposed to be collected through questionnaire.
· Secondary Data: The Secondary data is proposed to be collected through web sources,
books, articles, research papers, journal etc.
9. References:
Ansari, M. N. (2017). List of Recently Published Quality Research Papers. Imperial Journal of
Interdisciplinary Research, 3(8).
Bases of Market segmentation (2018) accessed from https://businessjargons.com/bases-market-
segmentation.html on 09/01/2018
Dabur India Limited (2018) accessed from https://www.indiainfoline.com/company/dabur-india-
ltd/summary/3392 on 16/03/2018
FMCG Companies (2017) accessed from https://economictimes.indiatimes.com/topic/FMCG
companies on 21/03/2018
FMCG Companies in India in (2018) accessed from http://nextwhatbusiness.com/top-fmcg-
companies/ on 10/04/2018
Godrej Consumer Products Limited (2017) accessed from https://in.linkedin.com/company/godrej-
consumer-products-ltd on 28/05/2018
Goyat, S. (2011). The basis of market segmentation: a critical review of literature. European Journal
of Business and Management, 3(9), 45-54.
Hassan, S. S., & Craft, S. H. (2005). Linking global market segmentation decisions with strategic
positioning options. Journal of Consumer Marketing, 22(2), 81-89.
Hindustan Unilever (2018) accessed from https://www.hul.co.in/about/who-we-are/introduction-to-
hindustan-unilever/ on 28/04/2018
Introduction to Hindustan Unilever Limited (2017) accessed from https://www.hul.co.in/about/who-
we-are/introduction-to-hindustan0\ on 08/01/2018
Market segmentation (2018) accessed from https://en.wikipedia.org/wiki/ Market_segmentation
on 14/05/2018
Metaxas, T. (2005). Market research and target market segmentation in Place Marketing procedure:
a structural analysis. Marketing Territoriality (Territorial Marketing, Application Possibilities,
Development Trends), Department of Trade and Marketing, The Poznan University, Academy of
Economics, Poland, 50-74.
Patanjali (2017) accessed from https://www.patanjaliayurved.net/about on 11/05/2018
Procter & Gamble Hygiene and Health Care Limited (2017) accessed from
https://www.nseindia.com/content/corporate/eq_PGHH_base.pdf on 08/02/2018
Puwanenthiren, P., & Udurawana, Y. (2015). Market segmentation and its impact on customer
satisfaction with especial reference to commercial bank of Ceylon Plc.
 ADVISORY COMMITTEE

Name Designation Department Signature

Dr. Amandeep Singh Associate Professor Management Major Advisor

Dr. Amit Kumar Assistant Professor Management Member

Dr. Ramamurthi Ravi Associate Professor Commerce Member

Dr. Kajal Chaudary Assistant Professor Commerce Member

Dr. Varun Mahajan Assistant Professor Economics Member

Forwarded five copies to the Dean, Postgraduate Studies, for approval by the RDC

Head of the Department/ Principal

Dean of the college

Dean, Post Graduate Studies

 ADVISORY COMMITTEE MEETING
Name of the Student: VARSHA UMARNANI
Regd. No.: BS17MB009 Semester : Second
Major Subject: Marketing
Major Advisor: Dr. Amandeep Singh
Name of Department: Management
Name of College: Akal college of Economics, Commerce & Management
Venue: Baru Sahib (HP)
Date: ……………………
Time: ……………
Student Work Load Teaching

S.No. Course No Title of Course L+T+P

T1 MBA 504 Managerial Accounting 4+1+0

i2 MBA 505 Organizational Behavior 4+1+0

t3 MBA 506 Production and Operations Management 4+1+0

4 MBA507 Marketing Management 4+1+0

5 MBA 508 Management Information System 4+1+0

Title of Synopsis: A study on Market Segmentation In Fast-Moving Consumer Goods (FMCG)

Companies with special reference to Chandigarh.
Research work carried out in the present Semester

Collecting Literature Review

Research work to be carried out in the next Semester

Signature of the Student

Signature of Major Advisor

Committee Members
1. Name: Dr. Amandeep Singh Signature:
2. Name: Dr. Kajal Choudhary Signature:
3. Name: Dr. Amit Kumar Signature:
4. Name: Dr. Ramamurthi Ravi Signature:
5. Name: Dr. Varun Mahajan Signature: