AVT Project soft copy

A study on the effects of brand associations of AVT Tea among homemakers

1. INTRODUCTION The research is conducted on the topic “A STUDY ON THE EFFECTS OF BRAND ASSOCIATIONS OF AVT TEA AMONG HOMEMAKERS” at AVT NATURAL PRODUCTS LTD, South Vazhakulam. This study is aimed to find out the effects of the brand associations of AVT Tea which result the brand preference among homemakers. The study helps to find out the influence of AVT brand associations and how much the consumers are satisfied with their brand preference of AVT Tea. The researcher intends to find out how effective is the brand associations and how it play an important role in increasing the brand preference of AVT Tea among its customers. The research is done among the consumers of AVT Tea to know the effectiveness of brand associations and to find out whether steps should be taken to increase the brand preference. AVT Natural Products, ranks today as the market leader in India's black tea industry. The Company commenced its operations in 1972 and within a short span of time, developed into a global player with over 500 products covering spice oleoresins, Decaffeinated Tea, instant tea, green tea, essential oils, natural food colours, micro encapsulated products, sprays dried botanical extracts, health and functional food ingredients, floral concretes/absolutes and resinoids. This project was conducted in the company to study the effects of brand associations of AVT Tea and to assess the satisfaction level of the customers. The project targets the homemakers as the major users of the AVT Tea products. The linkages between the brand name, its attributes, and other brands in the marketplace mean that associated attributes can be unique to the consumer, unique to the brand, or shared with other brands. Consumers purchase decisions for AVT Tea powders are always influenced by a number of factors, which lead them to select a particular brand in preference to others. In this study some attributes are considered as important cues, which lead consumer to select a particular brand of Tea. This study examines satisfaction level of the customers in a given population sample. The study on the effects of brand associations of AVT Tea among customers was studied by way of market research conducted among the customers. Jai Bharath school of management studies 1


1.1 STATEMENT OF THE PROBLEM World requirement for hygienic and consistent quality of branded Tea has become a necessity. Brand associations are not “reasons-to-buy” but provide acquaintance and differentiation that is not replicable. Purchasing decisions are the behavioural outcome that precedes differentiation between several alternatives is the purchasing decision; a subsequent outcome of consumer preferences. Preferences facilitate consumers’ choice by enhancing their intentions towards the favoured brand. Here, homemakers are the prospective customers of AVT tea. The responses from the non-users of the products were quite favorable showing positive demand for the products in the future. Thus to meet these requirements, AVT Natural Products has consciously put forward a strategy to build the brand associations. In order to survive a company needs to view its brand associations in the same way as views its end users. It is essential to find out the effectiveness of brand associations, which have a direct impact on the brand preference of an organization.

 PROBLEM FORMULATION: The purpose of the research reported here was to test empirically a conceptualization of brand associations that consists of three dimensions: brand image, brand attitude and perceived quality. A better understanding of brand associations is needed to facilitate further theoretical development and practical measurement of the construct. Homemakers are considered to be the potential customers and they expressed their satisfaction towards using the products. Hence the study focuses on the responses of homemakers as targeted consumers of branded AVT Tea products. Findings confirm the efficiency of the brand image protocol and indicate that brand associations differ across brands and product categories. The latter finding supports the conclusion that brand associations for different products should be Jai Bharath school of management studies 2


measured using different items. As predicted, dimensionality of brand associations was found to be influenced by brand familiarity.

Framework of the study VARIABLES: A variable is a measurable characteristic that varies. It may change from group to group, person to person, or even within one person over time. Statements about association are usually stated in terms of a relationship between an independent and a dependent variable. The idea is that one variable is the effect of another variable or, to say it another way, that one variable precedes and/or causes another. The dependent variable is the variable to be explained (the ‘effect”). For example, if the independent variable is the brand associations of AVT Tea, then the dependent variable might be brand preference among consumers. In other words, the variation in the dependent variable depends on the variation in the independent variable. Fig 1.1: Framework of the study Intervening variable

 Taste and preferences of the home makers  Change in Prices of rival products  Income of the customers

Brand Preference

Brand associations

(Effect variable)

(Cause variable) Moderating variables

 Perceived quality  Brand image  Brand attitude

Jai Bharath school of management studies 3


(Source: primary data)

The independent variable is the variable expected to account for (the “cause” of) the dependent variable. Because of the limitations in inferring causeand-effect relationships in the social sciences, be cautious about using the terms cause and effect when examining relationships between variables. However, using the terms independent and dependent variables is still appropriate even when this relationship is not articulated in terms of direct cause and effect. Here are a few guidelines that may help to identify the independent and dependent variables: (1) The dependent variable is always the property which is trying to explain; it is always the object of the research. (2) The independent variable usually occurs earlier in time than the dependent variable. (3) The independent variable is often seen influencing, directly or indirectly, the dependent variable. Intervening variables: refer to abstract processes that are not directly observable but that link the independent and dependent variables. The following are Mediating variables: Taste and preferences of the home makers, Change in Prices of rival products, Income of the customers etc. Moderator variables: affect the relationship between the independent and dependent variables by modifying the effect of the intervening variable(s). In this framework the moderating variables are Perceived quality, Brand image, Brand attitude

 PROBLEM IDENTIFICATION: The current dynamic and complex business environment makes it difficult for the managers to obtain the necessary information by themselves, without the help of researchers. It was important from the company’s point of view to understand the acceptance of the product in the market and their feedback on the product which was Jai Bharath school of management studies 4


found out from the market research. Also the study was initiated to spread awareness among those who were unaware this particular product range of the company. Thus the study had an impact on the company’s understanding about its premium range of products.

1.2 OBJECTIVES OF THE STUDY Primary objective: To study the relationship between the influence of brand associations of AVT Tea and brand preference among homemakers. Secondary Objectives  To find out the relationship between perceived quality of AVT Tea and quantity of purchase among homemakers.  To understand the association between overall excellence of AVT Tea products and its brand loyalty among homemakers.

1.3 SIGNIFICANCE OF THE STUDY AVT Natural Products has an inevitable part of business & management strategies. The Project study is very important for knowing the following.  To study the effects of brand associations of AVT Tea.  To familiarize with the brand associations of AVT Tea.  To understand the brand preference of the company products among customers.

1.4 TESTING OF HYPOTHESIS: Chi-square test and correlation test have been employed to find out the hypothesis of the study. The hypotheses are given below. 1) Ho: There is no relationship between brand associations and brand preference among homemakers Ha: There is a relationship between brand associations and brand preference among homemakers 2) Ho: There is no relationship between perceived quality of AVT Tea products and quantity of purchase among homemakers. Ha: There is a relationship between perceived quality of AVT Tea products and quantity of purchase among homemakers.



3) Ho: There is no relationship between overall excellence of AVT Tea products and brand loyalty of AVT Tea among home makers. Ha: There is a relationship between overall excellence of AVT Tea products and brand loyalty of AVT Tea among home makers.

1.5 RESEARCH METHODOLOGY Research methodology is a way to systematically solve the research problem. It may be understood as a science of studying how research is done scientifically. The researcher studies the various steps that are generally adopted by a researcher in studying his research problem along with the logic behind them. It is necessary for the researcher to know not only the research methods/techniques but also the methodology. Researchers also need to understand the assumptions underlying various techniques and they need to know the criteria by which they can decide that certain techniques and procedures will be applicable to certain problems and others will not. All this means that it is necessary for the researcher to design his methodology for his problem as the same may differ from problem to problem. Research methodology includes various research methods such as type of research, source of data collection, sampling frame, population etc.

1.5.1 Data Collection Data Collection Method: Questionnaires were sent to the selected customers of the AVT tea products. The requisite data for the study were collected through structured questionnaire and Personal interview . Primary Data: Primary data are collected through direct interview, questionnaire, interaction and observation. The primary data is collected from the customers of the company. Respondents include both the current and prospective customers of AVT products.

Secondary Data: The secondary data are those which have already been collected by someone and which have already been passed through some statistical process. Secondary data are collected from  company records  magazines  journals Jai Bharath school of management studies 6


 Internet.

1.5.2 RESEARCH DESIGN The research design used for this study is descriptive in nature. Descriptive research studies are those studies concerned with describing the characteristics of a particular individual or a group to prove the outcome. Chi-square test and correlation test have been employed to find out the hypothesis of the study. It is conducted among the customers of AVT Natural Products who are the current and prospective customers of the AVT Tea. The study was based on responses given by the customers of AVT Natural Products.

1.5.3 SAMPLING DESIGN i.

Population: All the items under consideration in any field of inquiry constitute a Universe or

Population. The group of individuals under study is known as population or universe. Therefore, the universe is the aggregate of all the units to be studied to any field of inquiry. In this study the population of the homemakers of Ernakulum district is taken.

ii.

Sample: Sample size refers to the number of items to be selected from the universe to a

sample. Here the sample size taken for the study is 100.

iii.

Sample unit: Every single customer that comes under the list of 100 customers allotted by the

company comes under this list.

1.5.4 Tool for Analysis A structured questionnaire was set with 22 questions asking the respondents to think of the brand associations of the AVT Tea products and their brand preference on the products. After collection of data from the homemakers each question were classified and tabulated in the following statistical tabulation methods.  Simple Percentage Analysis  Chi-Square Test  Correlation test

1.5.5 Period Of Study The study was carried out for a period from May 2nd 2015 to 2nd July 2015.



1.6 LIMITATION OF THE STUDY  Cannot ensure the accuracy and reliability of data.  The quality of the information highly dependent on the knowledge of the respondents.  The customers of AVT products are limited to potential customers as home makers  There may be bias in answering certain questions by the respondents.

1.7 SCOPE FOR FUTURE STUDY The study help to analyze the preference level of AVT Tea products as well as the reach of the product attributes among potential customers. Thus the study would be incidental in bringing out necessary modifications for further brand associations into the brand preference.  As the AVT Tea of products have the advantage of ‘backward integration’ for quality tea products, this will have a major importance in the coming years due to the fact that customers are becoming more health conscious and the authorities of every country have make it a point of their responsibility to sell off only quality tea products that would cater to requirements.  The market competition of AVT tea products is very high. Therefore it is important for the company to have a clear cut idea of this because it has a major opportunity around the globe.  Though the opportunity is very huge, the scope of the study had to be limited taking just a few of the customers who are representative of the company. The study intended to attain a firsthand experience of the overall running of an organization. It helps to understand the working conditions of the organization; it’s financial and market position. A detailed analysis of each of the activities performed by the departments is beyond the scope of the study. It provides a chance to see practical constraints faced by the managers while putting theory in to practice. This research also helps to identify the scope of brand associations which have influence on the brand preference of customers



1.8 CHAPTER SCHEME Chapter 1: Introduction This chapter gives a clear picture about the research. It includes the introduction of the study, statement of problem, objectives of the study, scope of the study, limitation of the study.

Chapter 2: Theoretical background and Literature Review In this chapter the researcher describes the theoretical and literature review of the study.

Chapter 3: Industry Profile This chapter gives a clear picture about the industry, its world, Indian scenario. It also includes the company profile.

Chapter 4: Data Analysis and Interpretation This chapter deals with the analysis and interpretation of the data collected. The analysis and interpretation are presented using tables and graphs. It contains research methodology which includes research design, data collection, sampling and statistical design

Chapter 5: Findings, Suggestions and Conclusion It includes the point wise description of the results found out from the study conducted. This final part of the project includes the conclusion of the entire study and the scope for further study.



2.1 LITERATURE REVIEW Literature review includes the theoretical and methodological contribution to a particular topic. The literature review about Cost Reduction and Control will give a brief idea about the studies conducted on this topic. From those studies the researcher will get a brief idea about how the study will be conducted by others and how the researcher should conduct the study. In this chapter the study conducted by various persons are included. And the theoretical review about the topic will give a good knowledge about the topic. By understanding these details the researcher will be getting an idea about on which part the study is to be conducted. A literature review is a written document that presents a logically argued case founded on a comprehensive understanding of the current state of knowledge about a topic of study. This case establishes a convincing thesis to answer a study's question. Generally, the purpose of a review is to analyze critically a segment of a published body of knowledge through summary, classification, and comparison of prior research studies, reviews of literature, and theoretical articles.

BRAND ASSOCIATIONS According to Aaker (1991), brand associations are the category of a brand’s assets and liabilities that include anything “linked” in memory to a brand (Aaker, 1991). Keller (1998) defines brand associations as informational nodes linked to the brand nodes in memory that contain the meaning of the brand for consumers. Brand associations are important to marketers and to consumers. Marketers use brand associations to differentiate, position, and extend brands, to create positive attitudes and feelings toward brands, and to suggest attributes or benefits of purchasing or using a specific brand. Consumers use brand associations to help process, organize, and retrieve information in memory and to aid them in making purchase decisions (Aaker, 1991, pp. 109-13). While several research efforts have explored specific elements



of brand associations.

No research has been reported that combined these

elements in the same study in order to measure how they are interrelated.

Aaker (1991) defines brand associations as anything linked in memory to a brand. Three related constructs that are, by definition, linked in memory to a brand, and which have been researched conceptually and measured empirically, are brand image, brand attitude, and perceived quality. We selected these three constructs as possible dimensions or indicators of brand associations in our conceptual model. Of the many possible components of brand associations we could have chosen, We selected these three constructs because they: 1. They are the three most commonly cited consumer brand perceptions in the empirical marketing literature; 2. They have established, reliable, published measures in the literature; and 3. They are three dimensions discussed frequently in prior conceptual research We conceptualize brand image (functional and symbolic perceptions), brand attitude (overall evaluation of a brand), and perceived quality (judgments of overall superiority) as possible dimensions of brand associations.

Related journals  “The effects of brand associations on consumer response'' . Journal of consumer marketing, VOL. 18 NO. 5 2001, pp. 410-425, # MCB university press, 0736-3761 Authors: A. BeleÂn del RõÂo, Rodolfo VaÂzquez, VõÂctor Iglesias: Faculties of Ciencias Economicas, University of Oviedo, Spain  An Evaluation of Brands Image, Product Attributes and Perceived Quality of a Selected Consumer Non-durable Product Journal of Administration and Management Review Volume 19, No.2, August 2007



Author: Md. Enayet Hossain, Assistant Professor, Marketing Department, Rajasthan University, Bangladesh.  A Study of brand Preference: An Experiential View: A Thesis Submitted for the degree of Doctor of Philosophy by Reham Shawky Ebrahim, Brunel Business School, April 2013

BRAND PREFERENCE Brand preferences represent consumer dispositions to favour a particular brand (Overby and Lee, 2006). It refers to the behavioural tendencies reflecting the extent to which consumers favour one brand over another (Hellier et al., 2003; Zajonc and Markus, 1980). Brand preference is close to reality in terms of reflecting consumer evaluation of brands. In the marketplace, consumers often face situations of selecting from several options (Dhar, 1999). Here summarize major contributions of significant studies and articles to the body of knowledge under review, maintained the focus established in the introduction. Evaluated the current "state of the art" for the body of knowledge reviewed, pointing out major methodological flaws or gaps in research, inconsistencies in theory and findings, and areas or issues pertinent to future study. The role of experience is limited to the impact of its type on shifting preference level. Most of prior studies are partial and focusing on one or two antecedents of brand preferences. In addition to these drawbacks, the studies also ignore consequences determining the consumer purchase decisions. Based on these limitations in the literature, a lack of understanding of how consumers develop their brand preferences was identified. Accordingly, the aim of this study is to develop a model that provides an understanding of how brand associations and brand experiences determine brand preferences and to investigate its impact on brand repurchase intentions. In this model, the brand knowledge is defined by attribute-based beliefs, referring to consumers’ salient beliefs about the brand intrinsic cues, and non-attribute beliefs,



reflected in the price, appearance, brand personality, and self-congruity. Therefore, the relative importance of brand associations’ factors contributing to brand preference is determined. Furthermore, the model addresses the interactions between the brand knowledge and brand experience in shaping brand preference. Thus, addressing how the associations reflect embedded value in the brand offerings influencing consumer preferences.

The findings confirm that brand associations are the key sources of brand preferences. In addition, all the factors of brand associations have a direct positive impact on brand preferences.

Prior Studies on Brand Preference The prior studies on brand preferences can be divided into two categories: consumer-oriented factors and brand-oriented factors. The first group of studies focuses on consumer-related factors. Consumer characteristics can be classified according to cultural, social, psychological and personal differences. Among these characteristics, self-concept is the only variable that plays a significant role in determining consumer preferences (Dolich, 1969; Green et al., 1969; Grubb and Grathwohl; 1967; Grubb and Stern, 1971; Hong and Zinkhan, 1995; Hughes, 1976; Ross, 1971; Sirgy, 1982). Moreover, several studies findings reveal the significant impact of consumer lifestyle on brand preferences (Andreasen, 1984; Lee et al., 2007; Mathur et al., 2008; 2003; Orth et al., 2004). According to these studies, consumers cope with changes in events or status by changing his lifestyle and preferences. The changes made depend on the level of stress of the event experienced by consumer. Thus, the change in preferences is a consequence of coping behaviour and not the event itself (Mathur et al., 2003). Even more, the consumer demographics are confirmed in most studies to have significant but low impact on brand preferences (e.g. Bass and Talarzyk, 1972; Jamal and Goode, 2001). The studies that support the significant impact of gender and age Jai Bharath school of management studies 13


on consumer preferences are conducted among groups of young consumers (Hogg et al., 1998; Lambert, 2008; Moschis et al., 1984). Also, Perez et al. (2011) supports the homogeneity of preferences across the inter-generation since preferences are transferred from parents to their children. These results contradict the fact that consumer preferences are heterogeneous (Horsky et al., 2006) and that each consumer has an ideal brand that fit his characteristics (Schmitt and Schultz, 1995).

The second group of studies focuses on brand-related factors. This category focuses on the impact of brand attributes on developing consumer preferences for brands. Brand preference is the result of the brand added-value acquired through the different responses of consumers to the brand attributes. The brand value can be endowed by the brand arising from its related attributes and non-related attributes. Therefore, it represents consumer different responses and the evaluation of brand functional and symbolic attributes (Farquhar, 1990; Park and Srinivasan, 1994). Prior work has demonstrated the positive and significant impact of brand equity, which improves consumers’ perceptions of the brand (Erdem and Swait, 1998) in the service industry (Chang and Liu, 2009) and products (Tolba and Hassan, 2009). The definition of brand equity, as the strength of association between the brand and the different types of evaluation stored in their memory, is relevant in studying consumer behaviour (Farquhar, 1990). The impact of brand equity on consumer preferences is measured at the aggregate level without investigating the impact of its different dimensions (Chang and Liu, 2009; Cobb-Walgren et al., 1995). In a recent study, Tolba and Hassan (2009) examine the impact of different dimensions forming brand equity: knowledge equity, attitudinal equity and relationship equity on brand preference. The results support the significant impact of relationship equity, consumers’ experiences, on brand preferences of users. For non-users, their preferences of brands are affected by attitudinal equity, functional utility and symbolic image. .



Other prior research focuses on the impact of different types of attribute on brand preference, especially non-related attributes: price (e.g. Monroe, 1976; Moon and Voss, 2009), appearance (e.g. Creusen and Schoormans, 2005; Creusen and Schoormans, 1998), brand personality (e.g. Kim et al., 2011) and self-congruity (e.g. Hu et al., 2012; Branaghan and Hildebrand, 2011; Jamal and Al-Marri, 2007). In addition, Sääksjärvi and Samiee, 2011) demonstrate the significant positive impact of brand image on brand preference. This retains the importance of the different evaluative aspect of the brand attributes in consumer preference development.

2.2 THEORETICAL BACKGROUND Theoretical background is a proposed way of thinking about potentially related events. Theoretical background contains built in theories; they cannot be simply reduced to describing a set of observations.

BRAND The brand is conceptualized as a node in memory, which allows other information about the brand to be “anchored” to it (Aaker 1991). The conceptualization of a network of brand associations in memory with brand as a central core has been put forward by many others (Killer 1993, Holden 1993, Holden & Lutz 1992). A brand that is not considered cannot be chosen (Baker etal. 1986). Further, the probability of the brand being chosen is a condition of the number of other brands in the consideration set. Consumers may employ heuristics (decision rule) to buy only familiar, well-established brands (Roselius 1971, Jacoby et al. 1977 both cited in Keller 1993). For a consumer to buy a brand positive attitude must first be made but brand attitude cannot be formed and intention to buy cannot occur unless brand awareness occurs (Rossister & Perey, 1991). Fig 2.1: Brand Equity conceptual model

Brand associations

Customer trend

Brand acceptance


Perceived quality


Customer knowledge

Customer trend

Brand Equity Brand

Power

Awareness of Brand

Loyalty to Brand

Trust to Brand

(Source: journal of contemporary research in business, February 2012 vol 3)

Although there has not always been agreement on how to measure brand image (Dobni and Zinkhan, 1990), one generally accepted view is that, consistent with an associative network memory model, brand image can be defined as perceptions about a brand as reflected by the cluster of associations that consumers connect to the brand name in memory. Thus, brand associations are the other informational nodes linked to the brand node in memory and contain the meaning of the brand for consumers

BRAND ASSOCIATIONS Brand Associations are not benefits, but are images and symbols associated with a brand or a brand benefit. Brand association is anything which is deep seated in customer’s mind about the brand. Brand should be associated with something positive so that the customers relate your brand to being positive. Brand associations are the attributes of brand which come into consumers mind when the brand is talked about. It is related with the implicit and explicit meanings which a consumer relates/associates with a specific brand name. Brand association can also be defined as the degree to which a specific product/service is recognized within its product/service class/category. While choosing a brand name, it is essential that the name chosen should reinforce an important attribute or benefit association that forms its product positioning.



Brand Associations are not benefits, but are images and symbols associated with a brand or a brand benefit. Associations are not “reasons-to-buy” but provide acquaintance and differentiation that’s not replicable. It is relating perceived qualities of a brand to a known entity. For instance- Hyatt Hotel is associated with luxury and comfort; BMW is associated with sophistication, fun driving, and superior engineering. Most popular brand associations are with the owners of brand, such as Bill Gates and Microsoft, Reliance and Dhirubhai Ambani. In line with this criterion, Keller (1993, 1998) classifies brand associations into three major categories: attributes, benefits and attitudes. Attributes are those descriptive features that characterize a brand, such as what a consumer thinks the brand is or has and what is involved with its purchase or consumption. Benefits are the personal value consumers attach to the brand attributes, that is, what consumers think the brand can do for them. Brand attitudes are consumers' overall evaluations of a brand.

Fig 2.2: Brand Associations concept

Brand associations

Brand Image

i1

i2

Perceived Quality

i3

i4

i5

Brand attitude

i6

i7

i8

i9

Where i1, i2, i3...Etc are the informational nodes of the Brand



(Source: journal of consumer marketing, vol. 18 no. 5 2001)

BRAND IMAGE: A brand image is the totality of consumer perceptions about the brand, or how they see it, which may not coincide with the brand identity. Brand image is defined as the reasoned or emotional perception consumers attach to specific brands (Dobni and Zinkhan, 1990). A brand image consists of functional and symbolic brand beliefs. Brand image associations are largely product category specific and measures should be customized for the unique characteristics of specific brand categories (Park and Srinivasan, 1994; Bearden and Etzel, 1982). Brand benefits are the foundation of brand image. Chiranjeeb (1997) claimed that a brand name itself is the foundation of brand image. In a broad sense purchase decisions are based almost solely upon the attitude existing at the time of purchase. The factors which may prevent consumers from converting their attitudes into intentions and buying behavior are very numerous and frequent (Wallen dorf, 1979).

BRAND ATTITUDE: It is one of the pervasive notions in all of the Marketing (Gillbert 1995). Formal attitudes are learned predispositions to respond to some object in a consistent way. The response may be favorable or unfavorable (Wallendorf, 1979). Consumers learn these attitudes over time by being exposed to the object directly or through receiving information about the object. Our learned attitudes serve as general guides to our overt behavior with respect to the attitude object, giving rise to a consistently favorable or unfavorable pattern of response.

PERCEIVED QUALITY: Perceived quality is defined as the consumer's judgment about a product's overall excellence or superiority (Zeithaml, 1988; Aaker and Jacobson, 1994). For example, Jai Bharath school of management studies 18


Sethuraman and Cole (1997) found that perceived quality explains a considerable portion of the variance in the price premium consumers are willing to pay for national brands. The perceived quality of products and services of strong brands add value to consumers' purchase evaluations. We propose that consumers have more highly developed brand association structures for familiar brands than for less familiar ones, and hence are more likely to have multi-dimensional brand associations for familiar brands compared to less- or unfamiliar brands.

Product Attributes: Product attributes are the benefits of products, and these benefits are the surface means used in advertisement and promotion offer to connect the brand with a motivation which influence brand attitude (Rossister, 1987). Nowadays, companies try to differentiate their products emphasizing some trivial attributes which in a real sense create no differences from those of its competitors’ or, sometimes they are not actually used by consumers at all (Chowdhury & Islam 2003). It is evident that product attributes are most salient to the consumers (Garvin, 1983, 1984). In reality, during the decision for dealing, it is assumed that consumers not only consider the present value of the products but also take the future performance or future associated with the product attributes into consideration (Chowdhury and Islam, 2003).

Objectives of Brand Associations The creation of a brand implies communicating a certain brand image in such a way that all the firm's target groups link such a brand (and thus the products sold using its name) with a set of associations. Brand equity research in marketing, as exemplified by Aaker's (1991, 1996) conceptualization and Keller's (1993, 1998) framework, is rooted in cognitive psychology and focuses on consumer cognitive processes. Thus, this view of brand equity proposes that:  The brand creates value for both the consumer and the firm.  The brand provides value to the firm by generating value for the consumers.



 Consumers' brand associations are a key element in brand preference formation and management. The issue of brand equity has emerged as one of the most critical areas for marketing management. Despite strong interest in the subject, however, to date little research has been conducted in order to investigate which brand associations have the strongest effects on consumer behavior. Some of these works only adopt a theoretical perspective, without performing an empirical test (Keller, 1993, 1998; Teas and Grapentine, 1996). Moreover, several of the empirical studies made analyze the overall relation between brand image and consumer response, that is to say, without considering the different dimensions of brand associations. The brand associations are status function which expresses the feelings of admiration and prestige that the consumer may experience upon using the brand (Solomon, 1999). According to Vigneron and Johnson (1999), this function is based on five characteristics of the brand: (1) Symbol of the individual's power and social status; (2) Reflection of social approval; (3) Exclusivity or limitation of the offer to a small number of people; (4) Contribution of emotional experiences; and (5) Technical superiority.

BRAND PREFERENCE Consumer brand preference is an essential step in understanding consumer brand choice; has therefore always received great attention from marketers. Horsky et al. (2006) demonstrate the importance of incorporating information about brand preference into the brand choice model. Brand preferences reveal the type of attributes a brand possesses, to strengthen its position and increase its market share. Moreover, it forms a critical input in developing a company’s successful brand strategy, and gives insight for product development. However,



the shift to experiential marketing broadens the role of the brand from a bundle of attributes to experiences. Brand preferences reveal the type of attributes a brand possesses, to strengthen its position and increase its market share. Moreover, it forms a critical input in developing a company’s successful brand strategy, and gives insight for product development. However, the shift to experiential marketing broadens the role of the brand from a bundle of attributes to experiences. The technological advancement helped increasing the similarities between the brands attributes and product commoditization. Consequently, consumers cannot shape their preferences among brands using rational attributes only. They seek the brand that creates associations; intrigue them in a sensorial, emotional, and creative way. Companies’ competitiveness in such market has, therefore become increasingly difficult. Their survival requires building their competitive advantage by delivering memorable associations, which would influence consumers’ brand preferences, and consequently stimulate consumers’ purchase decisions. However, the role of brand personality on brand preference is realized through brand associations. The findings also support that the impacts of the general brand attributes and appearance on brand preference are partially mediated by brand associations. Furthermore, brand preference positively impacts repurchase intentions.

3.1 INDUSTRY PROFILE Tea is the oldest and the most widely consumed and the lowest cost beverage in the world after water. It is considered to be one of the major components of world beverage market which provides more than 2,000 different types of tea for consumption. Though several varieties of tea such as green tea and herbal tea are now becoming popular, by far the most important tea to international trade is black tea. In the global tea market, China, India, Kenya, and Sri Lanka are the major Jai Bharath school of management studies 21


producers and also play a major role as exporters of tea, while Russia, U.K., U.S., Pakistan, and Japan form the major markets for these exports. Consumer awareness of the health benefits of tea and premium have been the growth drivers of the tea market recently. In this domain the global tea industry is largely dominated by India, the second largest producer and one of the largest consumers of tea. India is succeeded China and followed by Kenya Sri Lanka, Vietnam and Indonesia in the production hierarchy of countries. Tea cultivation is not done everywhere and anywhere. Its cultivation is restricted to certain specific regions in the world due to specific requirements of climate and soil that suit its cultivation. Among the major tea producing countries that are located in the continent of Asia are China, India, Sri Lanka are the major producers. Kenya, Malawi, Rwanda, Tanzania, Uganda are major producers in African tea growing countries which are located mostly around the tropical regions. Apart from these regions, certain regions in South America like Argentina and Brazil produce tea. Tea in India is introduced by a British national, Robert Bruce who discovered tea plants mounting in the upper Brahmaputra valley in Assam and neighboring areas some two hundred years back from today. It was in 1838, Indian tea that was developed in Assam was sent to the then Great Britain for the first time, for public sale. Therefore, tea in India is grown primarily in the domains of Assam, West Bengal, Tamil Nadu and Kerala. Apart from these major regions, tea is also grown in little quantities in Karnataka, Himachal Pradesh, Tripura, Uttaranchal, Arunachal Pradesh, Manipur, Sikkim and Meghalaya.

3.1.1 INTERNATIONAL SCENARIO Tea is one of the most popular and lowest cost beverages in the world and consumed by a large number of people. Owing to its increasing demand, tea is considered to be one of the major components of world beverage market. The global market for hot beverages (coffee and tea) is forecasted to reach US$69.77 billion in value and 10.57 million tons in volume terms by the year 2015 (GIA, 2011). Tea cultivation is confined only to certain specific regions of the world due Jai Bharath school of management studies 22


to specific requirements of climate and soil. Majority of the tea producing countries are located in the continent of Asia where China, India, Sri Lanka are the major producers. African tea growing countries are located mostly around the tropical regions where Kenya, Malawi, Rwanda, Tanzania, Uganda are major producers. Apart from these regions, some quantities of tea are also being produced in South America (Argentina, Brazil and others), the Near East (Iran and Turkey) and the CIS (Russia and Georgia). Globally, tea is cultivated in 36, 91,938 ha with an annual production of 4066596 thousand Kg (Anonymous, 2010). Over the years, both area and production has increased substantially along with global trade of tea. Being an agricultural commodity whose production is bound to fluctuate due to vagaries of nature, the prevailing differences between production and demand is well below any reasonable limits. In this article, an attempt has been made to project the global scenario of tea in terms of area, production, yield, export and import of tea over the last two decades. Amongst tea producing countries, the principal producers are China, India, Sri Lanka, Kenya and Indonesia. These five countries account for 77% of world production and 80% global exports.

Area under Tea plantation The last decade of 20th Century saw a sluggish rate of increase in total area under tea. During 1991, tea was cultivated globally in 2563.75 thousand ha which increased to 2661.88 thousand ha with a compound growth rate of 0.42% during that period. With the advent of 21st century the world tea industry saw a steady increase in the overall area under tea.

During 2001 the area under tea was 2727.42 thousand ha which increased to 3691.89 thousand in 2010 with a compound growth rate of 3.42% during this period.



In terms of area under tea plantation, on an average during the last two decade (1991 – 2013), China lead (45%) the world followed by India (21%), Sri Lanka (7%), Kenya (5%), Vietnam (3%)

g 3.1 Percentage of share of area under tea in major Tea producing countries of the wor

Others; 19%

India; 21%

Kenya; 5% Vietnam; 3% Sri Lanka; 7% China; 45%

(Source: accessed from Internet)

EXPORT World Tea export recorded a compound growth rate of 2.31% during 19912000 where export increased from 1078.17 m kg to 1324.65 m kg. Almost similar compound growth rate was observed in the first decade of 21st Century where export increased from 1400.55 m kg in 2001 to 1738.41 m kg in 2010.



On an average during the last two decade, in the export front, both Kenya and Sri Lanka lead the world each with 20% of their contribution followed by China (17%), India (14%) and others (25%).

During the last five years, it has been observed that total world exports averages 41% of total world production and 84% of exports accounted for by six countries (India, Sri Lanka, China, Kenya, Indonesia and Vietnam). The largest tea producers India and China drink away most of their own production and share only a small fraction of exportable tea. Sri Lanka and Kenya, on the other hand, share only 7% and 5% tea growing area, but are world leaders in exports, meeting 20 % each of world export needs. India exported AVT premium tea worth USD 1,264,467 with total quantity of 320,468. Saudi Arabia is the largest buyer of AVT premium tea accounting for exports worth USD 870,227 followed by United Arab Emirates and Qatar which imported AVT premium tea worth USD 278,126 and USD 99,272 respectively. 

Cochin Sea accounted for 96.6% of exports followed by Cochin which



account for 3.4% of exports. Average price of AVT premium tea per unit is USD 3.95 and average value per shipment is 3,741

IMPORT Like export, tea import (either for re-export or for own consumption) has also shown an increasing trend. The review of the global scenario of tea in terms of area, production, yield, exports and imports indicated overall increase in the quantity of tea in the world market over last two decades and the trend is increasing. So strategies must be adopted to meet up the challenges in global demand for tea in the coming years. Besides, general consumption of tea, health benefit effects of tea need to be promoted more vigorously to trap the non-conventional areas of tea in the world Jai Bharath school of management studies 25


for an expansion in the consumption. Value addition and diversification for a wide range of tea products need to be developed for balancing the supply demand chain. Through these ways, the global tea industry can think of sustainability in future keeping in mind the climate change across the globe.

3.1.2. NATIONAL SCENARIO Beginning of Tea in India The discovery of indigenous tea in Assam in 1823 led to the origins of the tea industry in India. However, the Calcutta Agricultural Society differs from the above opinion. It has consistently held that in the early 1700's, the ships of the East India Company frequently brought the tea plants in the country by way of curiosity. In 1788, Sir Joseph Bank recorded the existence of indigenous tea growing wild in Coochbehar and Rangpur districts of Bengal and suggested the cultivation of this plant. The wild teas of Cochlear confirmed the first discovery of indigenous tea in India.

Birth of Indian Tea Industry The birth of Indian tea industry was marked by the discovery of indigenous teas plant in Assam in 1823 by Robert Bush. This received momentum when the East India Company in 1833 lost the tea trading monopoly in China. In 1835, a scientific deputation was sent to Assam to report on prospects of the tea industry and the team saw tea plants in many parts in the hills between Assam and Burma. In 1836, C.A. Bruce was made the Superintendent of Tea Forests. Among others, he formed the Bengal Tea Company at Calcutta with the objective of purchasing the produce from the East India Company’s tea plantations in India. Ultimately tea cultivation was commissioned in many districts in India wherever there was some hope of a success. Within a few months, India along with Sri Lanka dominated the world tea trade/market.

Present status of Indian tea in Global position



India is the largest producer of black tea as well as the largest consumer of tea in the world. Currently, India produces 23% of total world production and consumes about 21% of total world consumption of tea – nearly 80% of the tea produced is consumed within India. Over the last 20 years, India’s world ranking as an exporter has come down from number one to number four, in the face of stiff competition from Sri Lanka, Kenya, and China.

3.2

COMPANY PROFILE

3.2.1 History In 1925, Alfred Vedam Thomas demolished a myth. He proved that it was not just the British who could manage plantations by starting a 300 acre tea plantation at Pasuparai, Tamil Nadu. From the original tea plantation, AVT has made steady progress over the years moving on into rubber, coffee, vanilla, pepper and cardamom. The seeds of AV Thomas group of companies were planted when Mr. AV Thomas purchased grass land in a place named Pasuparai in Tamil Nadu in 1925 and planned tea saplings. On purchasing their estate Mr. AV Thomas floated various companies under his management. The company was AV Thomas and Company Limited. After this a number of companies were formed under his leadership in different locations in Kerala. AVT Natural Products Ltd (AVT NPL) is a public limited company promoted by A.V Thomas group as a strategic diversification from the traditional plantation business of A.V Thomas Group. AVT Naturals formed in 1994 belongs to the renowned AVT Group of Companies and in the last 16 years has grown manifolds. The company’s contract farming model ensures “Quality at Source”. Marigold business is an integrated project starting from seed development and going on to Oleoresin. The contract farming model followed by AVT Naturals has been regarded as one of the best in the industry.

3.2.2 Location Kerala is the land of tea plays a significant role in the global tea market. AVT Naturals deals with a premium range of exotic spices and Tea products that come Jai Bharath school of management studies 27


straight from Kerala, Tamil nadu and Assam. AVT NPL is located in the port city of

Cochin,

Kerala,

India. referred

Cochin is to

as

the

‘queen of the Arabian Sea’ or ‘the spice capital of the World’. Having been strategically located in Cochin, AVT NPL has strategic advantage of proximity to the source of raw material and logistic advantage of import, export facilities owing to the sea, air and rail transport modes being within its reach.

AVT Naturals Product Limited (AVT NPL) The AVT NPL started its operation by establishing a Soybeans Extraction plant in Pandurana, Madhya Pradesh, which produces high quality of Soya-oil and oiled cakes. The oil is used as a raw material by the domestic vegetable oil industry while the cake was mainly exported to abroad. In 1994 AVT Natural Products Limited, setup its second extraction unit at Vazhakulam near Aluva in Kerala. The AVT Group of companies after 85 years of its operation has presence in Indian agri-business sector including plantations, aero processing, plant biotechnology and natural food and food ingredients.

AVT NPL is 100% export oriented unit located in

Kochi, Kerala the spice capital of the world. AVT NPL is a member of AV Thomas group of companies with interest in plantations, leather goods, tissue culture and medical diagnostics. AVT NPL is one of the largest contract framing companies in India, with proven capabilities in backward integration. There are two companies under the spice project, AVT NPL and AVT McCormick in 1994.

AVT GROUP OF COMPANIES 1. AVT Natural Products Co Jai Bharath school of management studies 28


AVT Natural Products is the world's largest Oleoresin pigment manufacturer and exporter with large volume exports to food processing and cosmetic industries in Mexico and the USA.

2. AVT McCormick ingredients LTD In a strategic joint venture with McCormick & Co Inc-USA, AVT distributes a wide variety of spices and curry powders for the international market.

3. AVT Agro chemicals AVT manufactures and markets pesticides formulated under direct license from Bayer AG, Germany, with a distribution network of over 5000 outlets spread across India.

4. AVT leathers The company manufactures a wide range of leather products, catering to licensee requirements of various international brands including Ralph Lauren and Pierre Cardin. 5. AVT Biotech AVT Biotech is the leading exporter of tissue culture plants and operates the largest bio-technology facility in India, producing 8 million plants for the Indian market and 6.5 million for the international market annually.

6. AVT Rubber Over 2 million kilograms of rubber is produced annually at AVT's rubber plantations. AVT Rubber produces various grades like centrifuged latex, crumb rubber and dipped rubber goods.

7. AVT Consumer Products Division Jai Bharath school of management studies 29


AVT Consumer Products Division (CPD) markets some of South India's favourite brands of tea. AVT also has a significant presence in the international market for various bulks, commoditized teas. Cardamom brands like Raihana and Shahi are already being exported and AVT is poised to enter the coffee export market soon. On the anvil are plans to diversify into value added services like vending machines and a chain of tea parlours. Primary among the CPD's strengths is the ability to innovate constantly predetermining the needs of the consumer.

Table 3.1 AVT Group of Companies N

Yea

o

r

1

192

Unit

Activity

The high land produce company limited

Tea and cardamom

5 2

193 4

3

193

The midland rubber produce company Tea, cardamom and rubber limited

exports

AVT and company limited

Trading export and

5 4

193

manufacturing The Kalpatta estate limited

Tea and cardamom

The Rajagiri rubber produce

Rubber, coffee export

6 5

193 7

6

194 1

7

194

The Nelliampathy tea produce company Tea and coffee export limited The shevaroy estate limited

Tea, coffee, cardamom and

3 8

194

edible oil Neelamalai agro industries limited

6


Tea trading and export


9

197

AVT investments limited

Financial and investment

6 10

197

company AVT leather and allied products Ltd

Leather goods and export

Nelliyampathy investments limited

Finance

Hawthrone investments limited

Finance and investments

6 11

197 6

12

198 0

13

198

company Midland latex products limited

Latex examination glover

AVT naturals products limited

Spice, oleoresins and essential

9 14

199 4

15

199

oil Rush AVT medicals limited

Manufacturing caters

5 (Source: accessed from company records)

Major Areas of Business AVT Group of companies has stopped up into varies areas of business. The divisions in the AVT group are:



Figure 3.2 Different areas of business



(Source: accessed from company website)

Company Turnover Today AVT is a Rs. 1000 crore company with a strong local and overseas presence in branded packaged goods, bulk commodities, beverages and the spices market. AVT NPL holds a major share in the Indian spice industry and the present turnover of the company is about 87 Crore rupees.

Brand Associations of AVT Tea Brand Associations of AVT Tea are the informal nodes linked to the brand node in memory. It contains meaning of the brand as perceived by consumers. As in case of AVT tea products, Brand associations come in three major forms  Attributes  Benefits  Attitudes Brand associations are the category of a brand’s assets and liabilities that include anything “linked” in memory to a brand. Keller (1998) defines brand associations as informational nodes linked to the brand node in memory that contains the meaning of the brand for consumers. Brand associations are important to marketers and to consumers. Marketers use brand associations to differentiate, position, and extend brands, to create positive attitudes and feelings toward brands, and to suggest attributes or benefits of purchasing or using a specific brand. When delimiting brand functions the greatest difficulty lies in the small number and the diverging nature of studies examining their dimensionality. Furthermore, most works do not make an explicit distinction between product functions and brand functions. Product functions are associations related to the physical or tangible attributes, and so are present in all products, even in those sold without a brand or with an unknown brand. Brand functions, on the other hand, are associations related to intangible attributes or images added to the product thanks Jai Bharath school of management studies 33


to its brand name, that is, they represent benefits that can only be obtained from products with a brand.

Figure 3.3 Brand Associations of AVT Tea

AV T TE A

Tea Plantation s

South Indian Tea Brand

AV Tho mas

Qua lity

Natural products

Discount coupons

Strongest Tea ,consistently

Afforda bility

Accept ability AVT Premi um

Availa bility

(Source: accessed from consumer survey) Other informational nodes which give Brand Associations of AVT Tea are given below     

Premium tea bags South Indian Tea giant Green logo of AVT CSR activities House wives



 Spices  Natural Flavours . .

3.2.4 BUSINESS PROFILE AVT has been successful in tying up with large format stores to supply commodities for store brands. The Food World tie-up is a notable example. AVT is open to co-branded associations wherein branding rights are exclusive but the products are made to retail chain specifications. AVT also enters into agreements wherein brand ownership rests with the retail chain. They are constantly striving to add value to the retail segment and welcome associations that are mutually beneficial.

Board of Directors

Chairman

: Mr. Ajith Thomas

Managing Director

: Mr. M S A Kumar

Directors

: Mr. Habib Hussain Mr. P. Shankar I.A.S (Retd) Mr. Shyam. B. Ghia Mr. A Alagappan

Registered Office 64, Rukmini Lakshmipathy Salai, Egmore Chennai-600 008, E-mail: [email protected].

Subsidiary Companies





AVT NPL, 117 Philip street, #05-01 Grand building, Singapore.



Heilong Jiang AVT Bio- Products Ltd (sub of AVT NPL) Shuang Yashan state farm, Boston, China.

2.5

Mission, Vision, Values & Team

Mission  To be a Global Leader in Marigold Extracts through a fully integrated supply chain with excellence in Plant Science & Agriculture and Logistics Management.  To achieve growth and stability in performance by diversifying to value added natural ingredients for synergistic business segments through development of product research and technology base.  To bring in highest level of efficiency, traceability, food safety and quality in the supply chain through Contract Farming.  To establish brand equity for natural ingredients through development of consumer marketing skills.  To comply flawlessly with ever changing international statutory regulations for our business segments.  To consistently add value in our business to deliver superior returns to all stakeholders-customers, employees, shareholders, suppliers, and society

Vision:  To be a global leader, enriching lives through natures on ingredients as food, nutrition, and medicine for mankind.  Provide total customer satisfaction through continuous improvement in products, process and services.  Develop and motivate employees through ongoing HRD programs.

Values    

Constantly strive for value in whatever we do. Belief in ethical business and transparency. Encourage individual excellence and foster environment for team work. Know the business environment, product and customers well update knowledge. Jai Bharath school of management studies 36


 Respect the neighborhood and individuality of each customer, supplier, and employee.

Team  AVT Natural has 160 permanent dedicated employees in its direct rolls.  450 foot soldiers supporting contract farming advising farmers on Good Agricultural Practices (GAP).  Our dedication to total customer satisfaction and adherence to highest quality standards have established our name to be reckoned with in the food ingredients business.

3.3

PRODUCT PROFILE

AVT NPL is an ISO 9002 certified company which produces the best quality of black Tea from its 100% export oriented unit highly competitive world market of USA, EUROPE and other Asian countries.

Value Added Tea 1.

Decaffeinated Tea Decaffeinated Tea India and China are fast emerging as a low cost hub for

various manufacturing activities and toll processing of tea wherein caffeine is solvent extracted is no different altogether. India holds the competitive advantage because of strict food safety laws and consistent and reliable quality offered by Indian vendors. AVT as a group is a prominent player in beverage industry in India and their unquestionable expertise in tea has led to various synergistic research and development activities which helped AVT NPL gaining stronghold in decaffeinated tea segment. We have successfully invested in solvent based extraction wherein caffeine is removed without compromising tea quality. Today with processing capacity of 7000 MT and actual capacity much more than that, we are one of the largest toll processor of teas in India. Our customer base include global tea majors like Harris Freeman Our dedicated decaffeination plant and our inbuilt thrust on Quality, Food Safety and GMP practices assures world class products for the customers. Jai Bharath school of management studies 37


2. Green Tea 

Beverage Grade-Polyphenols 35% to 45% (Catechins 20% to 30%, EGCG 5 % to 15%) Green tea extract with high caffeine (20% to 80%)-



Thermogenic Nutraceutical Grade- Polyphenols 85% to 95 % (Catechins 65% to



75%,EGCG 40% to 45%) Application as antioxidant in food-EGCG 45% Meat Industry, Oil Industry, Cosmetics, Oral Hygiene

3. Instant Black Tea  

Instant Black Tea –cold water soluble-Iced tea Instant Black Tea –hot water soluble

BULK TEA AVT CPD exports various grades of fine quality black tea in both dust and leaf forms to Russia, the Middle East and Europe. This division has contributed consistently and significantly to the overall growth of the company in spite of the stringent quality and satisfaction measures that the export market imposes. The types of tea that can be procured from AVT are:

TEA  AVT Rajah  AVT Premium  AVT Premium Tea Bags  AVT Assam  AVT Gold Cup  AVT manalaroo 1. AVT Rajah



AVT Rajah is a popular blend of South Indian teas arrived at after tasting 25,000 cups of tea. A high quality golden colored blend with a refreshing full-bodied flavor, Rajah packs taste and freshness into every cup.

2. AVT Premium The flagship brand and market leader in the southern states of Kerala and Tamil

Nadu, AVT Premium is a blend of dust teas from the finest high-grown tea gardens of Assam and South India. A strong dark brew with a unique pungent flavor, AVT Premium is a favourite primarily for its strong taste and consistency.

3. AVT Premium Tea Bags For convenience seekers, AVT Premium is also available in tea bags. A ‘Perflo’ system allows quick, complete infusion of tea while providing the real taste of traditionally brewed tea.

4. AVT Assam



AVT Assam is a rich blend of the finest Assam teas. Every cup provides a robust, full-bodied taste with the rich flavour of real Assam tea. 5. AVT Gold Cup Discover the pleasures of a truly sensory experience in this finely crafted blend of 100% Assam Tea. From the invigorating, full bodied flavour of Assam Tea to the beautiful rich color, it is the perfect balance of taste and strength. Go ahead you deserve a Gold Cup.

AVT Premium AVT Premium

Coffee

has

recently

launched

AVT

Coffee.

An instant success thanks

to AVT’s ability to

understand the preferences

of the coffee drinkers. A 60:40 blend of coffee and chicory. AVT Premium provides a strong flavour that resembles traditional filter coffee

TEA  

AVT Darbari AVT Supreme

1. AVT Darbari

The perfect blend from Assam’s finest gardens, Darbari is AVT’s popular leaf tea. Its heady flavour, unique taste and competitive pricing make AVT Darbari a very attractive brand in its segment. Jai Bharath school of management studies 40


2. AVT Supreme

AVT Supreme is a premium blend of the finest Assam CTC leaf. It is strictly for the discerning tea drinker and is known for its uniquely rich flavour and aroma.

The Production Procedure: Delivering quality at every point As soon as the purchases are affected, the details of all teas produced are fed into AVT's proprietary software "Panchathantra". Blend sheets are generated using this application.

The process: Once the blend sheets are generated, the samples pertaining to the teas

used are drawn from the warehouses. Representative table bulks of the blends are prepared. These table bulks are then tasted against the various standards and competition. The volumes are recorded and only those blends that match up to the standards are passed for

blending.

Finally,

blend sheets are issued

to

various

the

blending units.

The place: AVT has state of the art manufacturing facilities in Coimbatore and Kochi. All the teas are blended using Vertical Tower Blenders, which are fitted with rare earth magnets and sorting machines to remove any stray iron filings and other



extraneous matter (like jute strings) from the teas. Once the blending is complete, the blended tea is once again tasted against the standard. The blended tea is sent into the market for testing and certification. After proper testing the blends are released for packing.

The product: The blended teas are packed with state of the art packing machinery installed in our units. All necessary care is taken to see that our products meet PFA norms. Prior to the actual blending process, a representative table bulk of the blend order is made and is tested along with the standard so as to ensure consistency in the end product. AVT has a modern laboratory that is fitted with the latest testing equipments in the Coimbatore facility. All our blends are put through statutory checks required by the PFA Act.

DISTRIBUTION NETWORK Acceptability, Availability and Affordability' is the philosophy at AVT. AVT constantly ensure that our distribution network is efficient in the rural, semi-rural and urban markets. The right distribution translates to low cost, high efficiency and better sales, merchandising and distributions programs. AVT still holds over 90% of the total distribution in Kerala and Tamil Nadu, which is quite a remarkable feat considering that there are bigger market players with deeper pockets and national brands. AVT has 850 distributors across Kerala, Tamil Nadu, Andhra Pradesh, Karnataka and Orissa. Table 3.2: Distribution Network coverage of AVT in India

State

Total retail units in the state (in

Retail units of AVT (in lakh)

lakh)


AVT Distributors

% Market Coverage


Kerala

9

7.5

127

85%

Tamil Nadu

15

10.5

284

70%

Andhra

20

8

169

40%

Karnataka

16

4

137

25%

Orissa

12

5.4

133

45%

Pradesh

(Source: accessed from company website)

MAJOR SPICES EXPORTED AVT NPL is an ISO 9002 certified company which produces the best quality spice oil extracts and colour pigments from its 100% export oriented unit highly competitive world market of USA, EUROPE and other Asian countries. Product Profile of the Company is given below.

 Natural colour  Marigold extracts

Black pepper

 Oleoresin paprika

chilly

 Turmeric

Hot chilly (capsicum)

 Black pepper (natural)

Ginger



Celery

Nutmeg

 Natural flavors  

Black pepper oleoresin Celery oleoresin



  

Capsicum oleoresin Nutmeg oleoresin Ginger oleoresin

 Essential oils    

Black pepper Celery Ginger Nutmegs

 Antioxidants  

Rosemary extracts Green tea

 New products    

Vanilla extract Annatto Fenugreek Safflower extract

Awards and Recognitions AVT Natural Products won Asia’s 200 best under A billion by Forbes magazine in 2012. AVT Natural Products Ltd won last year Emerging India Awards, constituted for Small and Medium Enterprises in India, for "FMCG Food and Agri Business Category". All SMEs having maximum net worth up to Rs. 500 million were eligible for this award. AVT Naturals have shared second prize of Kerala State Pollution Control for the excellence in pollution control by large industries in Kerala for 2009/10. Kerala State Productivity Council Award for overall performance of the company. The company has bagged this award for the second time. FACT M.K.K. Nair Memorial Productivity Award 1998-1999.

QUALITY CERTIFICATES The brand quality and perceived quality of an organization is represented by number of quality certificates posses by that company. AVT Natural products Ltd has the following quality certificates, which show their quality production and services provided to their customers. Jai Bharath school of management studies 44


 ISO 9001:2008 Certification  ISO 22000: Food Safety System Certification  Spice house certificate by the Spice Board of India  Kosher certificate  GMP(Good Manufacturing Practice)  American Institute of Banking International, USA (AIB) 1999 "Superior rating" in 2002, 2003,2004,2005,2006.  2001, 2004 consecutive year "lab of the year" for micro technology worldwide.

Code of Ethics  100% compliance with the law.  Protection of the property information and confidentiality of information.  Prohibition against insider trading.  Giving and receiving gifts of certain values.  Policies regarding records retention and e-mail access.  Policies of improper or questionable payments.

Corporate Social Responsibilities AVT Natural, as a part of its social responsibility identifies the needs of the neighborhood and fulfils them completely. They support 30,000 small and marginal farmers with technology to improve their net farm returns and their livelihood. AVT group respect their neighborhood and all our stakeholders.

 Eye Clinic: Around 40,000 school children were screened and, those who required vision correction were identified and given the necessary Jai Bharath school of management studies 45


treatment. This was carried out by the doctors from Shankara Netralaya in association with AVT Natural Products and Rotary Club, Sathyamangalam.  Successful cleaning of weeds and waste materials from the Bhavani river banks and strengthening of the embankments to provide better irrigation facility to the farming community was carried out.  Infrastructure of the approach roads to our facility was further rectified.  Yearly financial assistance offered to the Panchayat for the Polio Eradication Programme.  Free weekly medical checkup and assistance provided to the rural community by doctors of AVT Natural Products at Sathyamangalam.  AVT has offered numerous facilities in the education sector by providing basic amenities like computers, laboratory equipments etc. for the students of neighbouring schools. Cash awards have been endowed on top ranking students in the final year of their school.

4. DATA ANALYSIS RESEARCH APPROACH: Survey method was used for this study. It was conducted among the homemakers of AVT Natural Products who are the current and prospective customers of the AVT TEA.

RESEARCH DESIGN Research design is a conceptual structure within which research is conducted. It facilitates smooth sailing of various research operations to make the research as effective as possible. Survey research was used for the study with encompasses measurement procedures that involves asking questions to respondents. The study was based on responses given by the customers of AVT Natural Products. For this purpose a descriptive study was found to be most appropriate. A descriptive study is undertaken in order to ascertain and describe the characteristics of the variables involved in the study. Chi-square test and Jai Bharath school of management studies 46


correlation test have been employed to find out the relationship among variables and the objectives of the study.

DATA COLLECTION a. Data Source The study requires data from both primary and secondary sources.  The primary data was collected from the customers of the AVT Tea products who are representative of all sectors of business of the company. Respondents include both the current and prospective customers of AVT TEA.  The secondary data was collected from published magazines and articles of the company, official records, academic books, internet etc.

b. Data Collection Method Questionnaires were sent to all the selected customers of the company. The requisite data for the study were collected through structured questionnaires.

c. Data collection tool A structured questionnaire was set with 22 questions asking the respondents to think about the benefits, perceived quality and other attributes of the AVT Branded Tea products and their effects of associations on the customers. The researcher initially prepared a pool of questions which was further modified and read by the company for the ease of administration.

SAMPLING DESIGN a. Population All the items under consideration in any field of inquiry constitute a Universe or Population. The group of individuals under study is known as population or universe. Therefore, the universe is the aggregate of all the units to be studied to any field of inquiry. In this study the population of the homemakers of Ernakulum district is taken.

b. Sample



Sample size refers to the number of items to be selected from the universe to a sample. Here the sample size taken for the study is 100.

c. Sample unit: Every single customer that comes under the list of 100 customers allotted by the company comes under this list.

CHAPTER OVERVIEW This chapter contains analysis and interpretation of primary data collected through structured questionnaire. Percentage analysis was done to know the cumulative response of respondents for each variable. The responses were tabulated with the help of bar charts, pie diagrams and doughnuts, whereas the hypothesis for testing the associations is evaluated using chi-square method. Correlation test has been employed to find out the relationship among variables.

4. DATA ANALYSIS 4.1 Showing the regular customers of AVT Tea Table 4.1: Regular Customers of AVT NPL (Brand Loyalty) Number of years

Frequency

Percentage

5+ years 4 years

64 18

64% 18%

3 years

6

6%

2 years

12

12%

1 year

0 100

0%

Total

(Source: Survey data)


100%

A study on the effects of brand associations of AVT Tea among homemakers 70 60 50 40 30 20 10 0 5+ years

4 years

3 years

2 years

1 year


Interpretations The chart indicates that, there is large number of loyal customers using the tea products of AVT NPL. The number of customers using product above 5 years is 64%, followed by 18 per cent of customers in four years. Therefore the bar chart shows the brand loyalty among customers for more than five years.

4.2 Showing the most purchased brands of AVT Tea Table 4.2: Most purchased brands of AVT Tea No

Products

Frequency

Percentage

1

AVT Rajah

28

28%

2

AVT Premium

55

55%

3

AVT Gold cup

15

15%

4

AVT Assam

2

2%

5

AVT Manalaroo

0

0

100

100

Total




Figure 4.2: Most purchased brand of AVT Tea 60 50 40 30 20 10 0 AVT Rajah

AVT Premium AVT Gold cup

AVT Assam

AVT Manalaroo


Interpretations The bar chart indicates that, AVT premium Tea has the highest percentage of customers of about 55. It is followed by 28 per cent of AVT Rajah and 15 per cent of AVT Gold cup customers. In addition, the customers of AVT Assam and AVT Manalaroo are very negligible as compared to other brands of AVT NPL.

4.3 Respondents preferred brands for Tea consumption Table 4.3: Most purchased Tea brands



(Source: Survey data) Figure 4.3: Most purchased Tea brands 50 45 40 35 30 25 20 15 10 5 0 AVT Tea

3Roses

Kannan Devan

Tata tea

Red label


Interpretations The survey indicates that, the most preferred Tea brands are AVT Tea and Kannan Devan Tea of 43% and 38% of customers respectively. This shows the competition between AVT Tea and Kannan Devan. Furthermore, Red Label has 12 per cent of customers. However the other brands have very few customers for brand preference.

4.4 Benefits of AVT Tea product over competitors Table 4.4: Benefits of AVT Tea Product over competitors Benefits of AVT Tea Product

Frequenc

Percentage

y Perceived Quality

39

39%

Availability

13

13%

Affordable Price

33

33%

Product attributes

5

5%

Acceptability

10

10%



Total

100

100%

(Source: Survey data) 45 40

Figure 4.4: Benefits of AVT Tea Product over competitors

35 30 25 20 15 10 5 0

39

13

33

5

10


Interpretations The bar chart indicates that, the most popular benefit of AVT Tea is the perceived quality (39%) and the second most popular benefit is the affordable price (33%) over its competitors. There are few respondents who caste the other benefits such as the availability (13%), acceptability (10%) and product attributes (5%) of AVT Tea.

4.5 Promotional activities of AVT Tea on customers’ purchase decision Table 4.5: Promotional activities of AVT Tea No

Promotional activities

Frequency

Percentage

1

Advertisements

25

25%

2

Gift coupons

31

31%

3

Discount Offers

31

31%

4

Festival Offers

13

13%

5

Other promotions

0

0%

100

100%

Total



(Source: Survey data) 35 30 25

31

31

25

20 13

15 10 5

0

0


Interpretations The graph demonstrates that, majority of the AVT Tea customers are equally influenced by discount offers (31%) and gift coupons (31%) on their purchase decisions. A large number of respondents think that 25 per cent of advertisements have an impact on their purchase behaviour. A small percentage of festival offers also have an effect on customers whereas other promotions have no influence on the purchase desire.

4.6 Showing the promoters of purchase behaviour of AVT Tea over other Brands Table 4.6: Promoters of AVT Product Jai Bharath school of management studies 53


promoters of AVT Product

Frequenc

Percentage

y Self Friends Retailers Family Media Total

43 4 0 13 40 100 (Source: Survey data)

43% 4% 0% 13% 40% 100%

Figure 4.6: Promoters of AVT Product 50 45 40 35 30 25 20 15 10 5 0

self

friends

retailers

family

media


Interpretations The bar chart shows that, 43 out of 100 respondents are ‘self’ motivated and 40 per cent are influenced by media advertisements of AVT Tea. Family has a significant role of about 13% of promoters while friends inspired only four percentages for the purchase of AVT products. An important finding from the survey is that retailers have no role in purchase intentions of the respondents.

4.7.1 Showing the rating of Perceived Quality of AVT Tea products.



Table 4.7.1: The perceived Quality rating of AVT Tea products Satisfaction Level

Frequency

Percentage

Very high

55

55%

High

32

32%

Medium

13

13%

Low

0

0%

Very low

0

0%

100

100

Total

(Source: Survey data) Figure 4.7.1: The perceived Quality rating of AVT Tea products 60 50 40 30 20 10 0 Very high

High

Medium

Low

Very low


Interpretations The line graph illustrates that, 55 per cent of respondents have been perceived as ‘very high’ quality. It is followed by 32% of ‘high’ quality level of AVT Tea, while percentage of 13 customers says that perceived quality is ‘neutral’. The ‘low’ and ‘very low’ customers regarding the Quality of AVT account for zero.

4.7.2 Demonstrating the quantity of purchase level of homemakers per month



Table 4.7.2: Quantity of purchase level per month Quantity of purchase level

Frequenc

Percentage

y Very high

4

4%

High

32

32%

Medium

56

56%

Low

8

8%

Very low

0

0%

100

100

Total

(Source: Survey data) Figure 4.7.2: Quantity of purchase level per month

8% 4% very high

medium 32%

high

Low

very low

56%


Interpretations The pie diagram depicts that, AVT Tea has majority of 56% of medium level quantity purchase while 32 per cent of high level quantity purchase by customers during a month. The rest of the quantity purchase levels by customers per month is 4%, 8% and 0% respectively.

4.8

Showing the scope of Future purchase of AVT Tea Products



Table 4.8: Future purchase of AVT Tea Products Frequenc

Percentage

y Definitely will

64

64%

Probably

26

26%

Probably not

4

4%

Might or might not

4

4%

never

2

2%

Total

100

100%

(Source: Survey data) Figure 4.8: Future purchase of AVT Tea Products

4%

4% 2%

26% 64%


Interpretations The pie chart shows that, the highest percentage (64%) of respondents are willing to purchase the AVT Tea in future whereas 26 per cent of respondents have probability on their purchase desire. There are only 2% of respondents who were ‘not willing’ to purchase AVT products in future.

4.9

Showing familiar factors of AVT Tea among homemakers



Table 4.9: Familiar factor of AVT Tea Familiar Factors

Frequency

Percentage

26 21 23 27 3 100

26% 21% 23% 27% 3% 100%

of AVT tea Brand associations Brand awareness Brand loyalty Brand quality Brand personality Total

(Source: Survey data) Figure 4.9 : Familiar factor of AVT Tea 30 25 20 15 10 5 0


Interpretations The graph indicates that, majority of homemakers are familiar with brand quality (27%) and brand associations (26%) of AVT Tea. They are followed by 23 per cent of brand loyalty and 21 per cent of brand awareness. Brand personality has only five per cent on familiarizing the AVT Tea products among customers.

4.10 Showing rating of the brand associations’ which have influence on brand preference among homemakers Jai Bharath school of management studies 58


4.10.1 Showing the Rating of brand association AV Thomas group Table 4.10.1: Rating of AV Thomas group Rating of AV

Frequenc

Percentag

Thomas group

y

e

Excellent Very good Good Average Poor Total

76 13 11 0 0 100

76% 13% 11% 0 0 100%

(Source: Survey data) Figure 4.10.1 : Rating of AV Thomas group 80 70 60 50 40 30 20 10 0

Excellent

Very good

Good

Average

Poor


Interpretations The graph shows that, 76 out of 100

respondents are rated the brand

association as ‘AV Thomas’ has excellent influence, while 13 percent ranked it as ‘very good’ and remaining 10 customers are caste as ‘good’.

4.10.2 Showing the Rating of the brand association: Strongest Tea, consistently (Tagline of AVT Tea).



Table 4.10.2: Rating of the tagline: Strongest Tea, consistently Rating of Tagline

Frequency

Percentage

Excellent

40

40%

Very good

25

25%

Good

28

28%

Average

5

5%

Poor

2

2%

Total

100

100%

(Source: Survey data) Figure 4.10.2 : Rating of the tagline: Strongest Tea, consistently 45 40 35 30 25 20 15 10 5 0 Excellent

Very good

Good


Average

Poor



Interpretations The bar chart represents, the majority of respondents who voted the tagline as ‘excellent’ and 25% and 28% of respondents who believe that tagline has been influenced as ‘very good’ and ‘good’ respectively. There are hardly 5% and 2% of customers having ‘average’ and ‘poor’ influence about the tagline.

4.10.3 Showing rating of the brand association: South Indian Tea giants. Table 4.10.3: Rating of the brand association: South Indian Tea giants Rating of South

Frequenc

Percentag

Indian Tea giants

y

e

Excellent

11

11%

Very good

9

9%

Good

16

16%

Average

51

51%

Poor

13

13%

Total

100 (Source: Survey data)

100%

Figure 4.10.3 : Rating of the brand association: South Indian Tea giants 60 50 40 30 20 10 0 Excellent

Very good

Good

Average


Poor



Interpretations The chart represents that, most of the homemakers have ‘average’ rating of 51% and the second most percentage accounts for ‘good’ (16%). It is then followed by 11% of ‘excellent’ rating for the brand association ‘South Indian giants’. ‘Very good’ has only 9 per cent of respondents whereas ‘poor’ rating has 13% of respondents.

4.10.4 Showing rating of the brand association: ‘Discount coupons’. Table 4.10.4: Rating of the brand association: Discount coupons Rating of Discount

Frequenc

Percentag

coupons

y

e

Excellent

72

72%

Very good

11

11%

Good

9

9%

Average

8

8%

0 100

0 100%

Poor Total

(Source: Survey data) Figure 4.10.4 : Rating of the brand association: Discount coupons 80 70 60 50 40 30 20 10 0 Excellent

Very good

Good


Interpretations Jai Bharath school of management studies 62

Average

Poor


According to the bar diagram 72 out of 100 respondents say that, discount coupons have ‘excellent’ influence on their purchase, while 11 per cent represents for ‘very good’. There are almost similar rating for ‘good’ (9%) and ‘average’ (8%). In addition to that, none of the homemakers voted ‘poor’ rating for this brand association of AVT Tea.

4.10.5 Showing rating of the brand association: ‘Availability’. Table 4.10.5: Rating of the brand association: Availability Rating of availability Excellent Very good Good Average Poor Total

Frequency

Percentage

12 15 23 50 0 100

12% 15% 23% 50% 0 100%

(Source: Survey data) Figure 4.10.5 : Rating of the brand association: Availability 60 50 40 30 20 10 0 Excellent

Very good

Good

Average


Interpretations


Poor


The bar chart shows that, half of the sample is rated as average and 23% of respondents were representing ‘good’ for the availability of AVT Tea. The other ratings were given as follows, very good (15%) and excellent (12%) while poor has zero respondents.

4.10.6 Showing rating of the brand association: ‘Acceptability’. Table 4.10.6: Rating of the brand association: Acceptability Rating of

Frequenc

Percentag

Acceptability

y

e

41 25 27 5 2 100

41% 25% 27% 5% 2% 100%

Excellent Very good Good Average Poor Total




Figure 4.11.6: Rating of the brand association: Acceptability 45 40 35 30 25 20 15 10 5 0 Excellent

Very good

Good

Average

Poor


Interpretations The bar graph represents that, 41 per cent of customers rated as excellent for the acceptability (brand association) of AVT Tea while it has 27% and 25% of rating for both very good and good respectively. Hardly 5% for average and 2% for poor rating have given to the acceptability of AVT tea.

4.10.7 Showing rating of the brand association: ‘Affordability’. Table 4.10.7: Rating of the brand association: Affordability Rating of

Frequenc

Percentag

Affordability

y

e

65

65%

Excellent



Very good Good Average Poor Total

27 3 5 0 100

27% 3% 5% 0 100

(Source: Survey data) Figure 4.11.7: Rating of the brand association: Affordability 70 60 50 40 30 20 10 0 Excellent

Very good

Good

Average

Poor


Interpretations According to the bar chart, a highest percentage (65%) has been rated as ‘excellent’ and 27% of respondents were representing ‘very good’ for the affordability of AVT Tea. The ‘average’ and ‘good’ rating have a least percentages of 5 and 3 respectively; while and ‘poor’ rating has zero respondents.

4.11 Showing the effects of brand associations of AVT Tea on customer attractiveness Table 4.11: brand associations of AVT tea Brand association

Frequency

Percentage

4

4%

of AVT tea Product benefits



Perceived Quality

45

45%

Product promotions

40

40%

Product attributes

3

3%

Other factors

8

8%

100

100%

Total

(Source: Survey data) Figure 4.11 : brand association factors of AVT tea

4

3 45

40

8


Interpretations The graph shows that, 100 out of 45 respondents are influenced by perceived quality while 40 respondents are attracted by the product promotions of AVT Tea. The other factors of AVT Tea have negligible role in attracting customers.

4.12 Ranking of AVT Tea products based on the parameters Table 4.12: Ranking of AVT Tea products Ranking of AVT Tea

Frequency

Percentage

Expertise

21

21%

Trust worthiness

30

30%

products



Quality

33

33%

Liability

0

0

None of these

16

16%

Total


100%

Figure 4.12: Ranking of AVT Tea products 35 30 25 20 15 10 5 0


Interpretations The graph represents that, 33 per cent of respondents ranked the quality as major parameter for brand preference while 30% consumers believe that AVT products are trust worthiness. The other parameters expertise and none of these accounts for 21% and 16% respectively whereas Liability has no respondents at all.

4.13 Showing the inspired attributes of the AVT Tea products Table 4.13: Attributes of AVT Product Attributes of AVT

Frequency

Percentage

Quality

40

40%

Quantity

3

3%

Product



Promotions

19

19%

Price

35

35%

Packaging

3

3%

100

100%

Total


Figure 4.13 : Attributes of AVT Product 45 40 35 30 25 20 15 10 5 0

Quality

Quantity

Promotions

Price

Packaging


Interpretations The bar graph demonstrates that, quality (40%) and price (35%) are the important attributes of the AVT Tea. Promotional activities inspired 19% of respondents while quantity and packaging of AVT Tea have only 3 per cent of inspired customers.

4.14 Demonstrating the brand quality uniqueness of AVT Table 4.14: Brand Quality uniqueness of AVT Frequency

Percentage

Certainly

60

60

Probably

17

17



Probably not

2

2

Might or might not

23

23

never Total

0 100

0 100

(Source: Survey data) 70

60

60 50 40 30

23

17

20 10

2

0

0


Interpretations The chart shows that, a highest percentage of 60 respondents declare that AVT Tea ‘certainly’ has brand quality uniqueness whereas, 23 per cent think that it is ‘might or might not’. However 17 out of 100 homemakers say that, there is ‘probably’ in this case, while ‘probably not’ represents only 2%. No one believes that AVT Tea ‘never’ has brand quality uniqueness.

4.15 Feeling about the Quality guarantee provided by AVT Tea Figure 4.15: Quality guarantee rating by purchasers Frequency

Percentage

Excellent

30

30%

Good

49

49%

Average

15

15%



poor

6

6%

Very poor Total

0

0


100%

Figure 4.15: Quality guarantee rating by purchasers

6% 15% Excellent

Good

30% Average

Poor

very poor

49%


Interpretations The pie chart represents that, a highest percentage of 49 respondents rated the ‘good’ quality guarantee, whereas 30 per cent says that AVT has ‘excellent’ quality guarantee. The 15% respondents rated the quality programs are ‘average’ and 6% of respondents says that it has ‘poor’ quality guarantee. There are no customers who rated AVT Tea as ‘very poor’ for their quality guarantee.

4.16 Showing the willingness to pay a premium for the AVT brand products Table 4.16: Willingness to pay for Premium of AVT Products

Yes

Frequency

Percentage

70

70%



No

30

30%

Total

100

100


Figure 4.16: Willingness to pay for Premium of AVT Products

NO; 30%

YES; 70%


Interpretations The doughnut chart demonstrates that, 70% respondents are willing to pay price for premium, whereas others are not ready to buy the premium products of the AVT Tea.

4.17 Showing the changes needed for AVT Product in future Table 4.17: Changes Needed for AVT Product Changes Needed for AVT Product

Frequency

Percentag e

Improved Quality

7

7%

More Quantity

14

14%



More promotions

39

39%

Less Price

35

35%

Better Packaging Total

5 100

5% 100

(Source: Survey data) Figure 4.17: Changes Needed for AVT Product 45 40 35 30 25 20 15 10 5 0


Interpretations The bar graph demonstrates that, the majority of the homemakers needed changes such as, more promotions (39%) and less price (35%). 14 per cent of the respondents wanted more quantity of AVT Tea while changes of improved quality and better packaging account for 7% and 5% respectively.

4.18

Showing consumers’ willingness to purchase the brand extensions of AVT

Table 4.18: Consumer willingness to purchase the Brand Extensions of AVT Frequency


Percentage


Yes

55

55%

No

17

17%

can’t say

28

28%

Total

100

100%

(Source: Survey data) Figure 4.18: Consumer willingness to purchase the Brand Extensions of AVT

17% YES 28%

NO

55% can’t say


Interpretations According to the pie chart 55% homemakers are ‘would like to purchase’ the brand extensions, while 17 percent of respondents represent their unwillingness. The remaining 28% of homemakers ‘couldn’t say’ their willingness to purchase the products of the AVT Tea.

4.19 Showing the recommendations of AVT Tea products to others Table 4.19: Recommendation of the AVT Branded Tea products to others

Yes

Frequency

Percentage

59

59%



No

41

41%

Total

100

100%

(Source: Survey data) Figure 4.19: Recommendation of the AVT Branded Tea products to others 70 60 50 40 30 20 10 0 YES

NO


Interpretations The bar chart shows that, 59% of respondents would like to recommend the products, while 41% of respondents are not willing to recommend AVT Tea products to others.

4.20 Showing the current view on AVT Tea product Table 4.20: Current view of AVT Tea product Frequency

Percentage

Branded product

25

25%

Quality product

20

20%



Affordable product

55

55%

Available product

10

10%

other benefits

3

3%

Total


100%

60 50 40 30 20 10 0


Interpretations The graph shows that, majority of customers (55%) says that AVT Tea product has affordable price and 25 respondents like the branded products of AVT Tea while 20 per cent of respondents have perceived the quality. Since the availability of the product has 10% of respondents, the other benefits of the products have least percentage of 3%.

4.21.1 Showing overall effects of the brand associations of AVT Tea among homemakers. Table 4.21.1: Overall effects of the brand associations of AVT Tea Frequency


Percentage


Yes

66

66%

No

34

34%

Total

100

100%


Figure 4.21.1: Overall effects of the brand associations of AVT Tea 70 60 50 40 Percentage

30 20 10 0

Yes

No


Interpretations According to the bar chart 66% of respondents have fair knowledge about the brand associations of AVT Tea, while 34% of respondents are still unacquainted with the AVT Tea brand associations.

4.21.2 Showing the overall influence of brand associations of AVT Tea on customer’s brand preference Table 4.21.2: The overall influence of brand associations of AVT on customers’ brand preference



Frequency

Percentage

Yes

54

54%

No

46

46%

100

100%

Total

(Source: Survey data) Figure 4.21.2: The overall influence of brand associations of AVT on customers’ brand preference 56 54 52 50 48 46 44 42 Yes

No


Interpretations According to the graph, the brand associations of AVT Tea which have influenced on respondents’ brand preference accounts for 54%. However, the 46 per cent of homemakers have no influence for AVT Tea brand associations on their brand preference.

4.22

Showing the rating of AVT Tea products in terms of overall excellence Table 4.22: Consumer overall Rating of AVT Tea AVT Product Rating 5 Stars

Frequency

Percentage

18

18%



4 Stars

65

65%

3 Stars

17

17%

2 Stars

0

0

1 Star

0

0

Total


100%

70 60 50 40 30 20 10 0 5 Stars

4 Stars

3 Stars

2 Stars

1 Star


Interpretations The chart shows that, 65 out of 100 respondents rated ‘four stars’ to the overall superiority of AVT Tea. In addition to that another 18 homemakers ranked ‘five stars’ while 17 per cent accounts for ‘three stars’. The homemakers didn’t rate two stars and ‘single star’ which indicate that, AVT has moderate level of excellence in their brand category.

CHI-SQUARE TEST FOR DATA ANALYSIS 4.23

Showing chi-square test for testing association between brand associations and brand preference. Jai Bharath school of management studies 79


Ho: There is no relationship between brand associations and brand preference among homemakers Ha: There is a relationship between brand associations and brand preference among homemakers. Table 4.23.1: Showing 2X2 contingency table of brand associations and brand preference among homemakers. 2X2 contingency table

Brand preference

Brand associations

Row Totals

Effected

Not effected

Influenced

42

12

54

Not influenced

24

22

46

66

34

100 (Grand Total)

Column Totals

(Source: Survey data) 2 Chi-square ( χ ) equation is expressed as,

χ

2

(O−E)2 ∑ E

=

Where, O = Observations E = Expected Frequency =

R ow Totals ×C olumnTotals Grand Total

Table 4.23.2: Showing chi-square test for testing relationship between brand associations and brand preference.


A study on the effects of brand associations of AVT Tea among homemakers Observations

Expected Frequency

2

(O-E)2

(O−E) E

(O)

(E)

42

35.64

40.44

1.13

24

30.36

40.44

1.33

12

18.36

40.44

2.2

22

15.64

40.44

2.58

100

7.742 (Source: Survey data)

Critical region

= (r – 1) (c – 1)

Degrees of freedom

= (2– 1) (2 – 1) = 1

χ

2

R= number of row C= number of column

Table value at Level of significance 5% = 3.841 Chi-square

7.742

Dof (1,0.05)

3.841

Interpretation Here calculated chi-square value is greater than the table value. Hence neglect Ho. That is, there is a relationship between brand associations and brand preference among homemakers.

CORRELATION TEST FOR DATA ANALYSIS 4.24

Showing correlation test for testing the relationship between perceived quality of AVT Tea products and quantity of purchase among homemakers.



Ho: There is no relationship between perceived quality of AVT Tea products and quantity of purchase among homemakers. Ha: There is a relationship between perceived quality of AVT Tea products and quantity of purchase among homemakers. Let X be the perceived quality of AVT Tea products. Let Y be the quantity of purchase among home makers. Table 4.24: Testing the relationship between perceived quality of AVT Tea products and quantity of purchase among homemakers. Respondents (n)

100

∑X

∑Y

∑XY

∑X2

∑Y2

441

357

1616

1995

1323

(Source: MS Excel data analysis) Coefficient of correlation (r) equation is expressed as,

r=

Y X ∑ ∑¿ ¿ ¿ ¿ X ∑¿ ¿ Y ∑¿ ¿ ¿ ¿ XY −¿ n∑ ¿ ¿

Substituting the values in the above equation, we get r = 0.8437.

Interpretation Here the correlation coefficient indicates a highly positive correlation of 0.8437; hence perceived quality and quantity of purchase among homemakers are associated



with each other. That is, increase in perceived quality of AVT is associated with an increase in the quantity of purchase among homemakers.

4.25

Showing correlation test for testing the relationship between overall excellence of AVT Tea products and brand loyalty of AVT Tea among home makers.

Ho: There is no relationship between overall excellence of AVT Tea products and brand loyalty of AVT Tea among home makers. Ha: There is a relationship between overall excellence of AVT Tea products and brand loyalty of AVT Tea among home makers. Let X be the overall excellence of AVT Tea products. Let Y be the brand loyalty of AVT Tea among home makers. Table 4.25: Showing correlation test for testing the relationship between overall excellence of AVT Tea products and brand loyalty Respondents ( n )

∑X

∑Y

∑XY

∑X2

∑Y2

100

400

434

1786

1634

1990

(Source: MS Excel data analysis) Coefficient of correlation (r) equation is expressed as,

r=

Y ∑ X ∑¿ ¿ ¿ ¿ X ∑¿ ¿ Y ∑¿ ¿ ¿ ¿ XY −¿ n∑ ¿ ¿



Substituting the values of ∑X, ∑Y, ∑XY, ∑X 2, and ∑Y2 in the above equation, we get r = 0.8311.

Interpretation Here the correlation coefficient indicates a highly positive correlation of 0.8311, hence overall excellence and brand loyalty of AVT Tea are associated with each other. That is, increase in overall excellence of AVT Tea products is associated with an increase in the brand loyalty of AVT Tea.

5.1 FINDINGS 1. Customers of AVT Natural Products are highly loyal to the brand, which show its ability to meet customer’s needs. Most of the customers of AVT tea have an experience with the company for more than 4 years (Table 4.1 and figure 4.1). 2. The most popular brand of AVT Tea is AVT premium Tea which has the highest percentage of customers as compared to other brands of AVT Tea (Table 4.2 and figure 4.2). 3. The most popular Tea brands are AVT Tea and Kannan devan Tea; they have 43% and 38% of customers respectively. This shows the competition between AVT Tea and Kannan Devan (Table 4.3 and figure 4.3). 4. The most popular benefit of AVT Tea is their perceived quality (39%) over its competitors (Table 4.4 and figure 4.4). 5. The majority of the AVT Tea customers are equally influenced by discount offers (31%) and gift coupons (31%) (Table 4.5 and figure 4.5). 6. According to the survey, 43 out of 100 respondents are ‘self’ motivated and 40% are promoted by media advertisements of AVT Tea as compared to its rival brands (Table 4.6 and figure 4.6). 7. 55 per cent of respondents are ‘highly satisfied’ on the perceived quality of AVT Tea over their rivals while ‘less satisfied’ and ‘not satisfied’ account for zero (Table 4.7.1 and figure 4.7.1). Majority of the customers purchase ‘medium quantity’ of AVT Tea every month (Table 4.7.2 and figure 4.7.2). Jai Bharath school of management studies 84


8. A highest percentage (64%) of respondents are would like to purchase the AVT Tea in future (Table 4.8 and figure 4.8).

9. Majority of homemakers are familiar with brand quality (27%) and brand associations (26%) of AVT Tea (Table 4.9 and figure 4.9). 10. AVT Tea brand associations like AVT group, AVT tagline, discount coupon, acceptability and affordability have ‘excellent’ influence on the homemakers, while South Indian giants and availability are rated as ‘average’. 11. Perceived quality has the major influence on the customer attractiveness to AVT Tea products (Table 4.11 and figure 4.11). 12. 33 per cent of respondents ranked the quality as major parameter for their brand preference (Table 4.12 and figure 4.12). 13. Quality has inspired the brand preference and it becomes an important attribute of the AVT Tea (Table 4.13 and figure 4.13). 14. A highest percentage of 60 respondents declare that AVT Tea ‘certainly’ has brand quality uniqueness (Table 4.14 and figure 4.14). 15. Almost half percentages of respondents have felt that AVT has ‘good’ quality guarantee which shows the acceptance of the product within the customer group of AVT NPL (Table 4.15 and figure 4.15). 16. A highest percentage of 70 respondents are willing to pay price for premium, whereas others are not ready to buy the premium products of AVT Tea (Table 4.16 and figure 4.16). 17. Majority of homemakers needed changes such as, more promotions (39%) and less price (35%) (Table 4.17 and figure 4.17). 18. 55% homemakers are would like to purchase the brand extensions of AVT Tea (Table 4.18 and figure 4.18).



19. When awareness is generated in the way of questionnaires, 59% of respondents would like to recommend the products, while 41% of respondents would not like to recommend AVT Tea products to others (Table 4.19 and figure 4.19). 20. Majority of customers (55%) say that AVT Tea has ‘affordable price’ in current Tea market (Table 4.20 and figure 4.20). 21. The feedback about the Survey indicates that 66% of respondents have affected by the brand associations of AVT Tea (Table 4.21.1 and figure 4.21.1). 22. The brand associations of AVT Tea which have influenced on respondents’ brand preference accounts for 54% (Table 4.21.2 and figure 4.21.2). 23. 65 per cent of respondents rated ‘four stars’ to the overall superiority of AVT Tea (Table 4.22 and figure 4.22). 24. The brand associations of AVT Tea turn to be a right initiative of the company to meet that part of the brand preference among customers. That is there is a relationship between brand associations and brand preference among customers of AVT Tea. (Table 4.23.2). 25. The perceived quality of AVT Tea products and quantity of purchase are associated with each other. That is, increase in perceived quality of AVT is associated with an increase in the quantity purchase among homemakers (Table 4.24). 26. The correlation coefficient indicates a highly positive correlation hence overall excellence and brand loyalty of AVT Tea are associated with each other. That is, increase in overall excellence of AVT Tea products is related with an increase in the brand loyalty of AVT Tea (Table 4.25).

5.2.

SUGGESSTIONS

 Advertisement is an important promotional activity that can influence on the homemakers. Nowadays AVT is not much concentrating on advertisements, so much more efforts should be made to advertise the product.



 Since AVT Tea has majority of customers, the brand has tight competition with Kannan devan Tea brand. Therefore, it is essential for the management to take effective strategies to increase the brand preference in future.  It is very clear that AVT premium Tea has the highest percentage of customers as compared to other brands of AVT Tea. So marketing promotions should be implemented accordingly to strengthen other Tea brands of the company.  AVT tea has failed to execute the marketing promotions of the sub brand ‘AVT Manalaroo’. Hence awareness and advertisements should reach to the targeted customers in order to increase the sale of the brand  The company management should have to provide better incentives and trainings to the retailers because retailers have no influence on the purchase behavior of customers.  Promotional activities of AVT Tea are comparatively less. Other competitors are trying to incorporate new ideas to withstand in the industry, so it has become a criterion to focus on promotional activities.  Homemakers should get awareness regarding the new technologies and innovations provided by the AVT NPL such as premium bags, wending machines etc.

5.3.

CONCLUSION

AVT Natural Products ltd. is a market leader in the South Indian black tea industry, which having its major share in the international and domestic market. This project helps to find out the influence of AVT brand associations and how much the consumers are satisfied with their brand preference of AVT Tea. It finds the acceptance of the tea product in the existing group of customers and its reach into the prospective group of homemakers.



AVT is having high brand preference among homemakers. Most of the customers are interested in using branded tea. Homemakers brand preference represents a fundamental step in understanding the brand associations. Brand associations have a significant impact on brand preference. House engineers are aware of the AVT tea because of the brand associations such as AV Thomas, perceived quality, affordability, discount coupons and the tagline: Strongest Tea, consistently. They have created brand preference in the minds of the homemakers. According to the survey, the most popular Tea brand is AVT Tea and it is followed by Kannan devan. This shows the increasing competition between AVT Tea and Kannan Devan. However, the most popular brand of AVT Tea is AVT premium Tea which has the highest percentage of customers as compared to other brands of AVT Tea. Promotional activities of AVT Tea are comparatively less. Other competitors are trying to incorporate new ideas to withstand in the industry, so it has become a criterion to focus on promotional activities. The perceived quality of AVT Tea products and quantity of purchase are associated with each other. Similarly, overall excellence and brand loyalty of AVT Tea are also associated with each other. The brand associations of AVT Tea turn to be a right initiative of the company to meet that part of the brand preference among customers. The research concludes that there is an association between brand associations and brand preference among customers of AVT Tea.

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WIBLIOGRAPHY  www.avtnatural.com  http://en.wikipedia.org/wiki/buyer_decision_processes  www.techneau.org/fileadmin/files/publication/publication/.../D6.2.1.pdf


AVT Project soft copy

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