A Research Project Report ON
“Buying Behavior of consumers of age group 18-25 for milk chocolate bars with special reference to:(A case study of Yamuna Nagar)
Submitted in the partial fulfillment for the degree of Master of Business Administration Session (2009-2011) Unde r The Guidance Of: Mrs. Anju Anand Department Of Management SIMT
Submitted By : Balraj Saini MBA 4rth Sem. Roll No: 109007 Exam Roll No………..
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Sarswati Institute of Management &Technology Kaithal Kurukshetra University, Kurukshetra 092543-29100 0172-5002920 Fax : 0172-4616994 Mobile : 98767-38000
SARASWATI INSTITUTE OF MANAGEMENT & TECHNOLOGY Teek, Distt. Kaithal-136027 (Haryana) Run by : Shiv Bhola Hi-Tech Education Society # 99, SECTOR 7, PANCHKULA (HARYANA) Present Correspondence Address : Plot No. 994, Ind. Area, Phase-II, Chandigarh-160002, E-mail :
[email protected]
Ref. No. _______________
Dated _______________
To whomsoever it may concern
This is to certify that the Research Project of MBA entitled, “Buying Behavior of consumers of age group 18-25 for milk chocolate bars with special reference to Cadbury, Nestle, & Amul”, done by Mr. Balraj Saini, Roll No. 109007 is a benefited work carried out by him under my guidance. The matter embodied in this project work has not been submitted in our college earlier for award of any degree or diploma to the best of my knowledge and belief.
Mrs. Anju Anand Lecturer
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DECLARATION
I Balraj Saini Roll No. 109007, here by declare that this project report entitle “Buying Behavior of consumers of age group 18-25 for milk chocolate bars with special reference to Cadbury, Nestle & Amul ” has not been presented as a par of any other academic except to get my MBA from Sarswati Institute of Management &Technology, Kaithal
(BALRAJ SAINI)
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ACKNOWLEDGEMENTS In this present world of competition there is a race of existence in which those who are having will to come forward will succeed. Project is a bridge between practical and theoretical working, with this will I have joined the project. I really wish to express my gratitude towards all those people who have helped me. My project guide Mrs. ANJU ANAND (lecturer) who provided me her expert advise, inspiration & moral support in spite of her busy schedule & assignments, has mainly provided my understanding of this project. I am very grateful to her kindhearted approach & encouragement, which helped me immensely in completion of this project report. I take this opportunity to express my gratitude to Mr. K.K AGGARWAL (Director), for his invaluable help & guidance throughout the course. Last, but not the least, I say only this much that all are not to be mentioned but none is forgotten and I will like to extend my special thanks and gratitude to all my classmates who always encourage me in pursuit of excellence.
( BALRAJ SAINI )
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PREFACE This project has been prepared, as a part of our MBA Program. This will also serve as basis knowledge of “Buying Behavior of consumers of age group 18-25 for milk chocolate bars with special reference to Cadbury, Nestle, Amul.” The Project Report is accompanied with number of Formats, charts & flow diagram, which will be helpful in understanding the subject matter. We are thankful to Mrs. ANJU ANAND ; Lastly we are grateful to all the seen and unseen hands that have been kind enough to help me in preparing the above project report from the beginning to end.
( BALRAJ SAINI )
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Contents Particulars Introduction to the study
Page No. 01
Consumer Behavior
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Research Methodology
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A. Problem Statement
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B. Research Design
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• Area of Study • Objective of the Study
C. Sampling Design • • • •
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Sampling Unit Sample Size Sampling Techniques Constraints of the study
D. Data Collection
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• Data Collection Methods • Data Collection Techniques E. Statistical & Analytical Tools
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Analysis & Interpretation
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Findings
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Limitation
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Suggestions
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Conclusions
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Bibliography
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Questionnaire
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Introduction This project is about preference of the consumers towards FMCG products i.e. chocolates in domestic market (in special context of nestle, Cadbury & Amul chocolates) The story of chocolate began in the new world with the Mayans, and also the word chocolate comes from the Mayan word xocoatl, and the word cocoa from the azlec cacahuati, who drank a dark brew called cacahuaquchtl. Later, the Aztec consumed chacahoua and used the cocoa bean for currency. In 1523, they offered cocoa beans to Cortez, who introduced chocolate to the world, where it swiftly became a favorite food among the rich and noble of Europe. From the beginning, turning raw, bitter cocoa beans into what one 17th century writer called “the only true food of the gods” has been a fine art, a delicate mixture of alchemy and science. Centuries ago it was discovered that fermenting and roasting the beans could create an almost otherworldly flavor. In 1875, after years of trying, a 31-year-old candy maker in vevey named Daniel peter figured out how to combine milk and cocoa power. The ancient Aztecs believed chocolate To be the “FOOD OF THE GOD ” Firstly, there is a need to know about the chocolate…that what is chocolate. Why chocolate is the most popular dessert flavoring around.
MEANING OF CHOCOLATE:1. A preparation of the seed of cocoa, roasted, husked, and ground (without removing any of the fat), often sweetened and flavored. 2. A beverage or confection made from this. 8
3. Dark brown. 4. A divine substance inspiring passion in those who consume it.
Origin of chocolate The word chocolate comes from the Mayan word xocoatl, and the word ‘cocoa’ from the Aztec cacahuatl. In Mexico, the beverage was called chocolath, from lath (water) and choco. Supposedly the Spaniard found the Mexican word har to pronounce and called it cacao. Chocolath, chocolath, chocolath. Puff puff. See? I did it! (But let’s stick to cocoa) *LoI*
From cocoa to chocolate Sorting, clearing, frying, crushing, grinding is the only small part of stages of production cycle transforming cocoa beans in chocolate, which we eat. Chocolate is really the unique product, tasty, highly nutritive (about 550 kkal in 100gm of a product), capable to be stored by years without change of properties. It contains 50-55% of carbohydrates, 32-35% of fat, 5-6% of fibers. And also tannin substances (4-5%), stimulators-the bromine and caffeine (1-1.5%), microelements Na, K, Mg, P, Fe and vitamins B1, & B2.
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HISTORY OF CHOCOLATE The discovery of cocoa was only a first step in the direction of chocolate. The Mayas were the first to cultivate the cocoa bean for the fruits it yielded. They used the beans as an ingredient in their favorite chocolate drink ‘xocotlatl’. Legend suggests that the first beans came out of paradise and lent wisdom and power to the person that ate them. For obvious reasons, the use of cocoa was kept to a minimum by the emperors. Before the Spanish explorers discovered the New World, chocolates and other “exotic” foods were totally unknown in Europe. Columbus was the first European to become acquainted with cocoa, but he wasn’t exactly impressed. During one of his conquest in the New World he met the Aztecs. For many generations, they drank an infusion of grilled seeds and spices. This mixture tasted disgusting and it also contained cocoa beans. The Aztecs adopted the ides of cocoa consumption from the Mayas. However the conquistadors pizzaro and, in particular, Cortes did show interest in the bean. Fernando Cortes reached the east coast of Mexico in 1519. as an honored guest of Montezuma (Aztec emperor and inveterate chocolate fanatic) he was offered xocotlatl –a small portion of aromatic chocolate drink mixed eith vanilla, pepper and other herbs. For the Mayas, cocoa beans were very important, not only were they a poplar means of exchange, they also had a religious value. The Mayas sacrificed cocoa beans at the funerals of the upper class.
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PREFACE The customer is king. Finally ten years after the liberalization of India’s economy began. The market place has, suddenly become tightening competitive. Not only have new players stormed into the country, there are more brands available then ever before in every segment of every market. The customer today buys only that which meets his/her every desire. This demands more intimate understanding of the customer by the “Smart Companies” the study has been divided into six parts. First part contains briefly the CHOCOLATES, history of chocolates, along with the development of passion for chocolates. Second part presents an overview of evolution of chocolates, chocolate industrygrowth and competition in various categories. Major players in this industry. Third and Forth part includes a brief profile about the consumer behavior & Research Methodology for the study. This part describes the term consumer behavior and it’s importance. Part five deals with the Analysis & Discussion. Important findings have been discussed at last for better understanding. Lastly, Part six namely “Findings & Recommendation” highlights the major findings during the course of the study. Accordingly, recommendations have been made.
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INTRODUCTION EVOLUTION OF CHOCOLATE 1753-1849 1753
Swedish biologist Carolus Linnaeus revealed his feeling for chocolate while attending to the task of classifying organisms in a binomial system. To the chocolate tree he gave the botanical name of theobroma cacao. Cacao refers back to the original native language. Theobroma is a Latin term that translates to “food of the gods”.
1765 In 1765 the Englishman James Watt invented the steam engine and in doing so set in motion what we now refer to as the industrial revolution. Around the same time in the colony of Massachusetts one of the first machine oriented chocolate manufacturing businesses was being established. The partnership of John Hannon, an Irishman, and Dr. James Banker of the Massachusetts colony formed the company Hannon’s Best chocolate. Through the use of an old grist mill, cacao beans were ground into chocolate liquor, pressed into cakes of paste for eventual use as a chocolate beverage. During a routine trading mission to the West Indies, Hannon was presumed dead when his ship failed to returned. The name of the company subsequently changed to the Baker company. It was not until 1927 that the Baker family sold their business to General Foods. 1774
The mysterious rumors that surrounded the death of pope clement XIV, give credence to the notion that chocolate had become a favorable way of distinguish poison. The pope died after consuming 12
a chocolate beverage, which also killed the unwritten confectioner who shared in the consumption. Through there is no proof, the Jesuits are suspected to have arranged his demise. The pope had been in opposition to the Jesuits, and they were known chocolate drinkers. So the conclusion, while not provable, is not unfounded. 1819
Francois Louis Cailler opened a chocolate factory on lake Geneva near Vevey. He used machinery he had developed himself, making him a pioneer in the evolution of Swiss chocolate.
1828
Chocolate maker and chemist Coenraad Van Houten developed the process now known as “Dutching.” His patented invention involved the removal of close to half of the cocoa butter from chocolate liquor through the use of hydraulic pressure. The removal of the cocoa butter resulted in a commensurate decrease in fat content. Instead of fifty percent, the hard cake that was let from this process had a fat content of only Twenty-Five percent. The cake could then be crushed into a powder. The use of alkaline salt allowed for easier mixing with warm water. It also made the color darker and had the pleasing affect of a less bitter taste. This invention would be the key in the development of chocolate as a confection.
1847
Joseph Fry was a Quaker who began manufacturing chocolate under the name of Joseph Fry & Sons. While the original Joseph Fry left the company to become a type founder, his sons continued the business. One of his sons, another Joseph Fry, purchased a Watts steam engine in 1789 to more efficiently grind cacao. A greatgrandson of the original Joseph Fry led the business toward the development of edible chocolate. Hoe found that by remixing some of the cocoa butter back into the processed “Dutched” cocoa powder and adding sugar, a paste was formed that could be pressed into 13
molds. The effect of this was a chocolate bar that gathered as much attention as chocolate beverages had. 1849
Ghirardelli, an Italian native, planned early on having a chocolate business. However, he traveled first to Uruguay and then to Peru before setting in California in 1849. Though he had been attracted by the Gold Rush, he soon learned that there was more reliable profit to be had selling tents to other gold miners than in actual mining. He used the money he saved and started the Ghirardelli chocolate factory, which is still located in San Francisco.
1849-1986 1850’s
Prime Minister William Gladstone, in an effort to boost the economy, lowered the taxes on cacao beans, allowing British manufacturers to expand their market.
1860
British FDA is founded. A British journal called the Lancet discovered that many chocolate manufacturers were employing various methods of “Cutting” chocolate with something less expensive. One report revealed that cocoa powder was being thinned with brick powder. Stirred to respond, the British government passed its first food and drug act in 1860.
1868
John Cadbury was another Qyaker who became interested in chocolate production. In 1824 he had opened a Grocery store in Birmingham, England. Cadbury featured cacao beans that he would roast and grind himself. In time he realized the interest and profitability in changing his focus to manufacturing of chocolate. Cadbury became so renown that he received a Royal Warrant in 1854 to be the single cocoa and chocolate provider for Queen Victoria. Richard and George Cadbury took over their father’s 14
business and in 1866 purchase a Van Houton machine. They began to market Cadbury cocoa powder. By 1868, the Cadbury company produced the first box of chocolate candies. Their business continue to flourish, and in 1879 they took over the Birmingham suburb of Bourneville. The factory they built there supported a town, providing both worker housing and recreational facilities. 1879
During the same period that Cadbury was developing into a formidable chocolate force, a Swiss chocolate manufacturer was struggling to find a way to combine chocolate with milk. Daniel Peter could not produce something with a smooth consistency because the milk could be made more shelf-stable for use a baby formula. The product of Nestle’s experimentation was a sweetened condensed milk. The new milk, which had lesser water, was mixable with chocolate and made a product that would not spoil easily. Henri Nestle and Daniel Peter formed a company in 1879. Today, the largest food company in the world is Nestle.
1879
A conching machine was created in 1879 that allowed for the smoothest chocolate yet. Rudolf Lindt used a concave granite bed where chocolate liquor, sugar, and milk if desired, would be ground back and forth by heavy rollers. Lindt named his chocolate Fondants because their texture was as smooth as the popular creamy candies. The process of conching soon became a part of common chocolate manufacturing. In addition, the friction of the rollers produced a heat that made roasting an unnecessary steps. Today, the rollers in conching machines are kept at a controlled temperature for an even higher quality.
1893
Milton Suavely Hershey was a Mennonite from Pennsylvania who owned a caramel manufacturing plant. When he visited the world 15
Colombian Exposition in Chicago his interest was initially to purchase and use machines to make chocolate covered candies. His interest changed course after visiting Europe and researching the many chocolate manufacturers there. Hershey then decided to focus his business on chocolate production and in 1900 he introduced to the world the milk chocolate Hershey bar. It was followed five years later by the Hershey kiss. With business expanding beyond expectation, Milton Hershey took over the town of Derry Church, Pennsylvania and renamed it Hershey. Thought he also developed a Hershey, Cuba around a sugar mill he owned, Milton Hershey was focused out of Cuba in1959 when Castro gained control. Today Hershey, Pennsylvania is an impressive tourist attraction. 1908
The triangular Toblerone chocolate bar was created and launched into market by Swiss chocolate maker Jean Tobler.
1913
Swiss chocolate maker Jules Sechaud invented the chocolate filled bonbon.
1929
At the end of the twentieth century Cella’s Confections, on West Broadway and canal, was a part of many factories that made up New York City’s confectionary district. In 1929 their candy factory began manufacturing chocolate-covered cherries. Today, while the other confectioneries have disappeared, Cella’s remains.
1936
Philip Silverstein owned a candy company on Delancey Street in New York City. In 1936 he created a thick, nut and raisin filled chocolate bar, known as the Chunky Bar.
1940’s As the United States geared up for a war in Europe, Militon Hershey suggested an addition be made to the standard soldier’s “D-Ration.” 16
The American military began to include three 4 ounce, 600 calorie chocolate bars in each “D-Ration.” While from today’s perspective this may seem odd, the Aztecs had used chocolate for the edification of their own warriors. In addition to lifting the energy and spirits of the troops during World War II, the chocolate bars became associated with peace, as malnourished holocaust survivors were rescued by American troops offering chocolate. 1986
When Jim Walsh left his life as an adventures executive in Chicago, he decided to move to Hawaii to start a chocolate business. He purchased plantations on Kea’au and Kona, and decided to use the fine criollo cacao beans for his foundation. The beans he harvested are sent to California, after they have been fermented and dried, and are processed into high quality chocolate. Only available through mail order, the chocolate is used primarily by pastry chefs.
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Major Players in the Market CADBURY (INDIA) Trading at rs.850, the Cadbury (India) stock presents a good long-term investment option. After hitting a high of Rs. 981 in March 2000, the stock retraced to its present level. The current price discounts the latest EPS 49 times. With good growth protects ahead and a strong financial background, the stock may hold good potential for steady returns over the long term. Cadbury (India), subsidiary of Cadbury Schweppes Overseas, is one of the leading player in the chocolate and sugar confectionary segment. The parent has a 51 percent stake in the company. For the year-ended December 1999, close to 76 percent of the sales turnover was derived from chocolate followed by malted foods (22 percent). Cadbury (India) has for long been the leading player in the chocolate industry. It is virtually a household name with leading brands such as Five Star and Dairy Milk. Of late, the company has been flooding the market with new launches. Among the successes of recent years are Perk and Picnic. In the malted food segmented, Bournvita is one among the popular brands. However, the health- drink segment has failed to lead support to the company’s bottom-line in the recent past. Volumes in Bournvita have been deciding for some time. However, this is not likely to be a drag on the profitability. Cadbury (India) has levered on its marketing strengths and product range. Competition may stem from players such as nestle in the near term. Apart from this, other new players such as Mars and Hershey’s may have an impact on the level of competition. However, the reduction in the excise duty on malted drinks 18
and chocolates and the lower import duties on cocoa is likely to have a positive impact on the cost-structure of the firm. The earnings performance of 2000 first quarter was impressive. Sales revenue rose 20 per cent to Rs. 139.34 crores compared to the corresponding previous period. Operating margins declined marginally from 16.4 per cent to 15.7 per cent. Post-tax earnings rose a 11.5 per cent to Rs. 10.34 crores. If the top line growth is sustained at this level, it could provide a boost and growth over the long term. Shareholders can stay invested.
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NESTLE The story of chocolate began in the new World with the Mayans, who drank a dark brew called cacahuaquchtl. Later, the Aztecs consumed chacahoua and used the cocoa bean for currency. In 1523, they offered cocoa beans to Cortez, who introduced chocolate to the world, where it swiftly became a favorite food among the rich and noble of Europe. From the beginning, tuning raw, bitter cocoa beans into what one 17th century writer called “the only true food of the gods” has been a fine art, a delicate mixture of alchemy and science. Centuries ago it was discovered that by fermenting and roasting the beans, an almost otherworldly flavor could be created. In 1875, after tears of trying, a 31-year-old candy maker in Vevey named Daniel Peter figured out how to combine milk and cocoa powder. The result-milk chocolate. Peter, a friend and neighbor of Henri Nestle, started a company that would quickly become the world’s leading maker of chocolate. For three decades the company called Peter, Cailler, Kohler relied on Nestle for milk and marketing expertise. In 1929, the almost inevitable merge took place as Nestle acquired Peter, Cailler, and Kohler.
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AMUL AMUL CHOCOLATE is made from Sugar, Cocoa Butter, Milk Solids, Chocolate mass Composition Milk Fat 2% Sugar 55% Total fat 32.33% (Milk fat + Cocoa Fat) Cocoa Solids 7.5% Milk Solids 20% Product Specifications: Meets all requirements under the PFA for boiled sugar confectionary. “A gift foe someone you love”. Amul Chocolate has chosen the phrase “A gift of someone for love” to market their chocolate products. Today, GCMMF’s Amul brand of milk products receives business queries from dozens of countries, ranging fron the U.S. and the Netherlands to Singapore and New Zealand-thanks to an innovative marketing campaign on the World Wide Web. The round-eyed, Chubby-Cheeked Amul Moppet has been a wildly popular advertising fixture, with its punchy one-liners amusing Indian viewers from bus stands, lamp kisos and billboards for over thirty years. The ultimate compliment to the butter came when a British company recently launched a butter and called it Utterlt Butterly, a fitting recognition of the “Thorough bred, utterly Butterly Delicious Amul.” Every week, Amul’s topical ads for its butter products are posted on its Web site, along with recipes fore Indian dishes featuring Amul products. Archives of hundreds of topicals dating back to 1979 are available on the site. The topicals have also been carried every day on the Indian World home page.
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INTRODUCTION The term consumer behavior refers to the behavior that consumers display in searching for, purchasing, using, evaluating and disposing of products and services that they expect will satisfy their needs. The study of consumer behavior is the study of how individuals make decisions to spend their available re- source (time, money, effort) on consumption related items. It includes the study of what they buy, why they buy it, when they buy it, where they buy it, how often they buy it and how often they use it. Information about the pattern of consumption in various segments of society and dynamics of consumer behavior are central to the understanding for developing new concepts in marketing. The essence of modern marketing concept is that all elements of business should be geared towards identifying and satisfying the needs of the consumers.
Decision Making Process The consumer’s decision to purchase or reject a product is a moments of final truth for marketer. It signifies whether the marketing strategy has been wise, insightful, and effective, or whether it was poorly planned and missed the mark. Thus, marketers are particularly interested in consumer’s decision-making process. We would be discussing a simple model of consumer decision making that emotional consumer. The modal, has three major components: 1)
Inputs
2)
Process
3)
Output
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CONSUMER DECISION MAKING PROCESS External influences Socio culture Environment
Firm’s Marketing Efforts • • • •
• Family • Reference Group • Other non-commercial influence • Social class • Culture and subculture influences
Product Price Place Promotion
Input
Consumer Decision Making Psychological Factors
• Need recognition • Information search • Valuation alternatives
• • • • •
Perception Motivation Attitude Learning Personality
Experience
Post Purchase Behavior Purchase • Trial • Repurchase Output Post purchase evaluation
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Process
INPUTS The input component draws on external influences that serve as sources of information about a particular product and influence a consumer’s productrelated values and behavior. Chief among these input factors are the marketing – mix activities of organizations that attempt to communicate the benefits of their products and services to their potential customer, and the no marketing sociocultural influences, which, when internalized, affects the consumer’s purchase decision.
PROCESS The process component of the modal is concerned with how consumers make decisions. The psychological field represents. The internal influences (motivation, perception, learning, personality, and attitudes) that effect the consumer’s decision making processes.
Prepurchase Activity After the problem is identified, the buyer indulges in prepurchase activity. It is under stood that need is a father of a deed. There generally remains a time lag when a person thinks to buy and the actual incidence of buying. During this time, the person is energized and is likely to be influenced by various factors. Need arousal drives the consumer to collect information about the required product. He first indulges in internal search, scans his psychological field so as to recollect of retrieve any information or past experience related to particular need. His psychological field comprises of his past learning. Perception, personality and past experience. If he is not satisfied he then goes in for external search and looks for various sources of information. The degree of perceived risk can also influence this stage of the decision process. In 25
high – risk situation they are likely to engage in complex information search and evaluation tactics. Of key interest to marketer are the various sources of information that the consumer will return to and the relative influence that they will have on his buying behavior.
Evaluation of Alternatives when evaluating potential alternatives consumers tend to use two types of information: 1.
A “list” of brands from which they plan to make their selection (the evoked set), and
2.
The criteria they will use to evaluate each brand. The criteria consumers use to evaluate the brands that constitute their evoked sets usually are expressed in terms of important product attributes. Consumers use certain procedures or rules to facilitate a choice among multi – attribute objects. Consumers decision rules have been broadly classified into two major categories compensatory and non compensatory decision rules. An understanding of which decision rules consumer apply in selecting a particular service or product is useful to marketers concerned with formulating a promotional programme.
Output The output portion of consumer decision – marking model concerns two closely associated kinds of post decision activity. Purchase behavior and post purchase evaluation. The objective of both activities is to increase the consumer’s satisfaction with his/her purchase. 26
Purchase Behavior Consumer make two types of purchase and repeat purchase. If a consumer purchase a product (or brand) for the first time, and buys a smaller quantity than usual, this purchase would be considered a trail. Thus, a trail is the exploratory phase of purchase behavior in which consumers attempt to evaluate a product through direct use. If the new brand is established product category (cola, chewing gum, candies) is found by trail to be more satisfactory or better than other brands, consumers are likely to repeat the purchase, Repeat purchase behavior is closely related to the concept of brand loyalty, which firms try to encourage because it contributes to greater stability in the marketplace.
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RESEARCH METHODOLOGY 28
Research methodology in a way is a written game plan for conducting research. Research methodology has many dimensions. It includes not only the research methods but also considers the logic behind the methods used in the context of the study and complains why only a particular method of technique has been used. It also helps to understand the assumption underlying various techniques and the criteria by which they can decide that certain technique will be applicable to certain problems and other will not. Therefore in order to solve a research problem, it is necessary to design a research methodology for the problem as the some may differ from problem to problem. This chapter focuses on the various techniques, methods and assumptions used in this study. It sheds light on the research problem, objectives of the study, and also its limitations. The later part of the chapter explains the manner, in which the data is collected, classified, tabulated, analyzed and interrupted so as to each to conclusive results. The study is of diagnostic nature and thus the overall research design is going to be rigid. The design should provide enough provision for protection against bias-ness and must maximize reliability.
HYPOTHESIS 29
Ho= Various factors (image of product, paying capacity, price of product, packaging of product brand awareness, influence of advertisement) effect the consumer buying behavior for milk chocolates bar.
H1= NO effect of various factors (image of product, paying capacity, price of product, packaging of product, brand awareness, influence of advertisement) on consumer purchase in milk chocolate bars.
A) PROBLEM STATEMENT 30
Research work is management parlance is extremely important for a given close view of the relatives of the real life business issues . For any management student who is striving to perform outstandingly. It is of paramount importance that apart from theoretical knowledge he must also gain some practical knowledge.
Survey report deals specially with providing an opportunity to
management students to have some exposure in real business world. My study topic deals with Consumer Behavior and different factors that influence consumer to purchase a particular brand of chocolates. As chocolate is regarded as one of the biggest Fast Moving Consumer Good (FMCG), there are many factors in mind of consumer which induce them to purchase a particular brand of chocolate. Some of these factors are Price, Taste, Packaging, Brand name. Ever changing behavior of consumer, dominance of different brands in the market compelled me to undertake a research work in this segment. The prime objective of my study is to analyze the effect of various factors on buying behavior of consumers.
B) RESEARCH DESIGN To analysis the buying behaviors of the residents of Yamuna Nagar Sample Survey Methods has been employed through other methods are also important. This method is given prime significance in modern research because of its extensive use to study the relationship of different factors, attitudes and practices of society and to explore the problems that cannot be treated by experimental methods. To collect data, a number of techniques are employed under the sample survey method i.e. questionnaire. The increasing use of questionnaire is probably due to increased emphasis by social scientists on quantitative measurement to uniformly accumulated data.
A) Area of study 31
The area of the study is different Markets of Yamuna Nagar in order to collect the Primary data from the respondents.
B) Objective 1.
To study the brand preferences of consumers from the three brands of chocolates i.e. Amul, Cadbury, Nestle available in the market.
2.
To find the extent of brand loyalty of consumers that exists among different chocolate brands.
3.
To study the influence of various aspects on buying behavior. These factors are: Price Taste Brand name Packaging
4.
To study the usage & brand awareness of chocolates product in among the residents of Yamuna Nagar.
5.
To study the consumer preference for different chocolate products.
Study area
:
Yamuna Nagar.
Target Segment
:
Consumers of Milk chocolates bars of age group 18-25
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C) SELECTION OF SAMPLE It becomes impossible to contact each and every individual of the population due to limitations of essential resources like time and money. Therefore, the study is preferably allowed down to a representation sample to make the study more manageable. Keeping in the view the objectives and resource limitation of the study, 100 respondents were considered. Respondents
100(Youths of age group 18-35)
The selected sample is representative of the population and is accurate and practicable.
D) SAMPLING PLAN The following factors will be taken into consideration within the scope of sampling plan: I Sampling Unit It defines the target population that will be sampled i.e. it answers who is to be surveyed. In this study, the sampling unit is youth with in the age group of 18-25 years. II
Sampling Size It indicates the numbers of people to be surveyed.
Though large samples give more reliable results than small samples but due to constraints of time and money, the sample size was restricted to 100 respondents.
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Probability sampling can be of following types • Simple random sampling • Stratified random sampling • Cluster (area) sample In this case, stratified random sampling was done since the respondents will classified into well defined classes or strata that were distinct from each other.
E) COLLECTION OF DATA After the research problem has been defined and the research design has been chalked out, the task of data collection begins. The data can be collected mainly through primary sources, but it was supplement with secondary data. I
Primary data collection
Primary data is the data which is collected through observation or direct communication with the respondent in one form or another. These are several methods for primary data collection like Observation Method, Interview Method, through schedules, through questionnaires and so on. II
Secondary data collection methods
Secondary data is collected through •
Magazines
•
Journals
•
Portals
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F) STATISTICAL & ANALYTICAL TOOLS
CHI – SQUARE TEST:- For measuring the affect of price on purchase of milk chocolate bars of different brands.
V= (r-1)*(c-1) Expected Frequency = Row Total * Column Total / Total frequency If , Table Value > Calculated Value, Hypothesis is accepted. GROUP CORRELATION:- For measuring the correlation between
various influencing factors like price, taste, packaging, brand name etc. and buying behavior of consumers for milk chocolate bars the Group Correlation is used and the formula is: r
N ∑ fdxdy - ∑fdx∑fdy
=
√ N∑fdx2-(∑fdx)2 √ N∑fdy2-(∑fdy)2
T-TEST
(Student’s
Distribution):-
for
measuring
the
consumption level of consumers of milk chocolate bars of three brands.
S=√ ∑X
2
n-1 If , Table Value > Calculated Value, Hypothesis is accepted. LIKERT SCALE:- For the ranking of milk chocolate bars according
to consumer preferences 35
Analytical tools:- Like Pie graphs etc. Formation of Questionnaire Quite often the questionnaire is considered as the heart of a survey operation. Hence it should be carefully constructed. It is an investment that is widely used to collect various types of data and consists of long lists of questions designed to collect any information. It has personally been found that people are more frank in giving replies to a questionnaire than to an interview schedule. Though being less expensive, it has certain limitations like incomplete entries and erroneous responses. But the educational qualification of the respondents is an additional factor which renders this technique the most relied upon. Formation of a good questionnaire involves intensive thinking and deliberation of the problem with predetermined objective and aims properly placed in the questionnaires. The
questionnaire framed for the purpose of the study consists of a
limited number of questions placed in logical order. So, that the objective of the question is clear to the respondents. All the questions are centered on the problem keeping in the mind. The questions were both open and close ended as well as multiple choices.
Analysis of Data Data, after collection, has to be analyzed in accordance will the outline laid for the time of developing the research plan. The term analysis refers to the computation of certain measures along with searching for patterns of relationship that exist among data groups.
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CONSTRAINT OF THE STUDY There are following constraints of the study which can be explained as:1)
The time of research was short due to which many fact has been left untouched.
2)
The Area undertaken in research in Yamuna Nagar only. But to do a completer research a wide area is required, so the area is also a constraint of the study.
3)
Sample for the study taken is of only 100 consumers. Which can also act as a constraint in the study.
4)
While collecting data some of the consumers are not willing to fill the questionnaire, so they might not fill their true behavior. This can also be a constraint of the study.
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ANALYSIS AND INTERPRETATION Q1. Which companies’ chocolate do you purchase? Please rank them according to your preference.
Brand Name
Percentage
Cadbury
40
Nestle
35
Amul
25
25%
40%
Cadbury Nestle
35%
Amul
As per shown in the Pie chart, the maximum market share is hold by Cadbury. And least share is hold by Amul followed by Nestle. And this result is obtained from the response of customers towards Questionnaire filled by them for the consumption of milk chocolate bars.
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Q2. What is your pattern of consumption?
Pattern of consumption
Percentage of consumption
More than one per day
15
Daily one
25
3-4 chocolates per week
45
Weekely
10
Rarely
5
Percentage of consumption
10% 5%
More than one per day Daily one
15% 25%
45%
3-4 chocolates per week Weekely Rarely
As shown in Pie chart, most of the consumers consume milk chocolate bars as 34 per week, which represent 45% of the total number of surveyed consumers. And second most percentage of consumers consumes milk chocolate bars are of daily one. As calculated by Tool Of T-Test for every brand of milk chocolate bars, in which the hypothesis is taken that more than 60% of population consumes milk chocolate bars more than one a week. And in these three brands i.e. Cadbury, Nestle and Amul the result was positive
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Q3. Which factor you consider the most while purchasing the chocolate?
Consumer's consideration
Percentage
Price
16
Taste
48
Brand
18
Packaging
9
Other
9
Percentage Price 9%
9%
16%
Taste Brand
18% 48%
Packaging Other
Most of the consumer of milk chocolate bars says that the most considering factor by them on the basis of which they purchase a particular brand of milk chocolate bars is Taste of that milk chocolate bars. And the lest interested factor is Packaging. As analyzed with the help of Correlation Tool in which the correlation between different factors that influence consumer to purchase a particular brand of milk chocolate bar is +.132, which shows that there is positive correlation between different influencing factors and buying behavior of consumers.
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Q4. What extent of price tag influences your purchase decision of chocolate? Extent of influence
Percentage
High
13
High average
23
Average
27
Low average
19
Low average
18
Percentage High High average
13%
18%
23% 19%
Average Low average
27%
Low average
Shown by the Pie chart, price has an influencing effect on the purchasing behavior of consumers for milk chocolate bars, as 23% and 27 % of consumers lies in high average and average parameter. And to prove the same Chi-Square Test has been used,to prove the same observed values are compared with the expected once. And calculated chi-square is as:χ
2
Calculated
=
0.437
But the calculate value was lesser than table value. Hence null hypothesis is selected that change in price has influencing effect on buying behavior of consumer for milk chocolate bars. 42
Q5. Which reference group influence you most to buy a particular chocolate?
Reference Groups
Percentage
Friends
55
Family
3
Retailers
1
Celebrity
39
Others
2
As shown in the bar graph, from reference group friends are the most influencing factor which influence consumer to purchase a particular brand of milk chocolate. And this statement is supported by 55% of consumers of milk chocolate bars. And the second most influencing factor which influence customer to purchase a particular brand of milk chocolate bar are celebrities , and this statement is supported by 39% of consumers.
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Q6. You consider manufacturing and expiry date while buying any chocolate________ Consumer's View
Percentage
Strongly Agree
28
Agree
29
Neutral
37
Disagree
4
Strongly Agree
2
Consideration on manufacturing and Expiry date
4%2%
Strongly Agree 28%
37%
Agree Neutral
29%
Disagree Strongly Agree
As shown in Pie chart, about 37% of consumers are neutral while considering the manufacturing and expiry date of milk chocolate bars. But if talk about those who strongly agree on the consideration of manufacturing and expiry date represented by 28% of population and 29% of population represent those who are agree on the statement that they consider manufacturing and expiry date while purchasing any milk chocolate bar. 44
By applying Chi-Square…… OBSERVED Price Influence on Chocolate purchase CHOCOLATE High High Average Avg. BRANDS Cadbury Nestle Amul Total
Avg. 5 5 3 13
9 8 6 23
Low
Low 11 9 7 27
8 7 4 19
7 6 5 18
EXPECTED Price Influence on Chocolate purchase High High Avg. Average Avg. Low
CTV Brand Cadbury Nestle Amul Total
Observed Value 5 5
5.2 4.5 3.25 13
10.8 9.45 6.75 27
7.6 6.65 4.75 19
7.2 6.3 4.5 18
Expected value 5.2 4.5
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9.2 8.05 5.75 23
Low
(O-E)2 .01 .25
(O-E)2/E .01 .06
3 9 8 6 11 9 7 8 7 4 7 6 5
3.25 9.2 8.05 5.75 10.8 9.45 6.75 7.6 6.65 4.75 7.2 6.3 4.5
χ 2 Calculated V
=
=
8χ
2
0.05
.04 .004 .003 .022 .004 .02 .02 .02 .02 .12 .01 .014 .04
0.437
(r-1) (c-1)
for V = So, χ
.125 .04 .025 .125 .04 .2025 .125 .16 .1225 .5625 .04 .09 .25
2
0.05
=
(5-1) (3-1) = 8
table value
=
table value greater than χ
2
15.58 calculated value so hypothesis is
accepted and there is positive relation between change in price level and purchasing decision. Let us take the hypothesis that customer are satisfied with the present brands of chocolate in Yamuna Nagar. By applying Likert Scale………. Fully satisfied Satisfied Neutral Dissatisfied Fully dissatisfied
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Cadbury 11x5 = 55 13x4 = 25 8x3 = 24 5 x 2 = 10 3 x1 = 3 144
Nestle 10x5 = 50 11x4 = 44 6x3 = 18 5x2 = 10 3x1= 3 125
Amul 7x5 = 35 8x4 = 32 5x3 = 15 3x2 = 6 2x1 = 2 90
So as per the scale obtained the ranking of various brands of chocolate is as under :=
Rank 1 =
=
47
Rank 2
Rank 3
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FINDINGS The findings of the study of consumer are buying behavior in chocolates states among all the three to brands i.e. Cadbury, Nestle and Amul. The brand at first place is Cadbury, the Nestle (2nd) and last is Amul. Among all these three Cadbury is having the largest market share i.e. 40%, Nestle 35% and Amul 25%. Among all these Brands Cadbury is the only company offering largest number of brands in chocolates i.e. 6 (only for milk chocolate bars). As compared to Cadbury Nestle Company is having 2 brands and Amul is with 4 brands of chocolates. The buying behavior of consumer for different brands of milk chocolate bars is effected by various factors like price, taste, packaging, brand etc. as shown in Analysis and Interpretation part, in the form of group correlation. With the help of t-test it has also been proved that more than 60% of consumers consume milk chocolate bars more than once in a week. It has been calculated for all the three brands separately which has been taken in the study. If there will be change in price level of milk chocolate bars, then it will
affect the buying behavior of consumers and this finding has been proved with the help of Chi-Square Test (χ 2). The most important factor which consumers consider while purchasing any milk chocolate bars is Taste of that chocolate. They give preference to other factors also, but most important thing is taste. The buying behavior of consumers is also affected by the different type of advertisements. And the most influencing media is electronic media, and from reference group friends are at most influencing position. 49
Quality is the most important factor which consumers consider while switching over to any other brand of milk chocolate bars. Consumers of Yamuna Nagar are more attracted towards the foreign brands like Cadbury and Nestle and demand that more number of foreign milk chocolate bars should be available in the market, like some milk chocolate bars brands of Swiss and French chocolates. As this thing shows that consumer of Yamuna Nagar are more satisfied with the foreign brands and hence demand more of it. But brands like Amul are not able to get proper place in the market in spite that good advertisement is being done by Amul also. One another finding of the research is that consumers of milk chocolate bars of Yamuna Nagar are quite hesitant towards the use of unfamiliar brands, whose advertisement they do not see on different type medias.
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LIMITATION 1. The time of research was short due to which many fact has been left
untouched. 2. The Area undertaken in research in Yamuna Nagar only. But to do a completer research a wide area is required, so the area is also a constraint of the study.
3. Sample for the study taken is of only 100 consumers. Which can also act as a constraint in the study. 4. While collecting data some of the consumers are not willing to fill the
questionnaire, so they might not fill their true behavior. This can also be a constraint of the study.
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SUGGESTIONS A detail study of the “Consumer’s Buying Behavior of Age Group 18-25 For Milk Chocolates Bars” was done. Some important suggestions are as follows: 1. Dealers should keep chocolates in cold storage in summers, and try to save chocolates from sun light as they melt in hot place, which will ultimately affect the buying behavior of consumer if he/she not feel satisfied. 2. The chocolates whose expiry dates goes off should be replaced at once and fresh stock should be offered.
3. The retailers and distributors must be provided “Dispensers” and
company’s freezers or defreeze for storing chocolates, so that they can offer good quality chocolates to consumers. 4. In Yamuna Nagar there is a scarcity of foreign chocolates. Here some of customers are ready to pay premium prices but due to non availability they have to satisfy with available brands.
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Conclusion Every research activity ends with some conclusion and same happens with this report also. By analyzing the collected data the conclusion which is arrived is as follows: Foreign Brands like Cadbury and Nestle has an edge over Indian brand like Amul. Which is calculate as with the help Likert scale And the Value comes out for Cadbury brand is 144 . But if we talk about Nestle Brand the value comes out is 125. And for Amul this value comes out to be 90. Which grades foreign brands to be Higher as compare to Indian brand of milk chocolate bar. Another conclusion of the study is that change in price has a substantial
effect on the buying behavior of consumer for milk chocolate bars as the calculated value in Chi-Square test was .437and the table value comes out to be 15.58 which shows that calculated value is lesser than table value, hence the null hypothesis is selected that there is positive relation between change in price level and purchasing decision of the consumers for milk chocolate bars. Different factors like Price, Taste , Brand Name , Packaging have an influencing effect on the buying behavior of consumers for milk chocolate bars as shown with the help of Group Correlation tool in which the correlation comes out to be Positive.
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BIBLOGRAPHY BOOKS • • • • • • • • •
Marketing Management -Kotler Philip (1st edition reprint) o Chapter 7, Page 183 th Marketing Research – Donald T.S (6 edition), Page 49 Marketing Research – Beri G.C (3rd edition), Page 79 Marketing Research – Boyd H.W (7th edition) Research Methods – Donald C.R (8th edition), Page 120 Basic Marketing – Pereaurt W.D (2nd edition), Page 450 Consumer Behaviour – Della A.J (4th edition), Page 15 Consumer Behaviour – Gupta S.L (2nd edition), Page 144 Consumer Behaviour – Schiffman & Kanauk (3rd edition) , Page 306
MAGAZINES & JOUNALS • Advertising ExpressFebruary 2006, Traditional Mass Media, By K.Suresh, Page 35 • Marketing Mastermind – March 2006, Advertising Reaction ,By Barada Prasad Panigrhy, Research Associate , ICFAI Centre, Page 36 • Indian Journal of Marketing – March 2006, Article By Dr.Banusmathy, Page 31 • Business World – April 24,2006 , Page 8 • Business India – Advertising , April 23,2006 • Business Today – Trends, April 23,2006 • Synergy - Article By Mittal Alok, January 2006,Page 74-85 • Business Research – June 2005, Page 31
Websites www.amul.com www.nestle.com www.cadburyindia.com www.consumerpsychology.com 58
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Questionnaire On
“Buying behavior of consumer for Milk chocolate bar of age group 18-25 With special reference to 3 companies i.e. Cadbury, Nestle and Amul” Name of the consumer
____________________________________
Age
____________________________________
Sex
____________________________________
Q. Do you like chocolate ? Q1. Which companies’ according to your preference.
chocolate do you purchase? Please rank them
Cadbury
Nestle
Amul
RANK 1 RANK 2 RANK 3 RANK 4 RANK 5 Q2. What is your pattern of consumption?
More than one per day
Daily One
3-4 Chocolate per week Weekly Q3. You purchase same chocolate every time… 60
Rarely
Strongly Agree
Agree Neutral
Disagree
Strongly Disagree
Q4. Which factor you consider the most while purchasing the chocolate?
Price
Taste
Brand
Packaging
Other Q5. What extent of price tag influences your purchase decision of chocolate? High
High Average Low Average
Average Low
Q6. Which mode of advertisement influence you most to buy a particular chocolate?
Magazine Newspaper Radio Television Other
_______ _______ _______ _______ _______
Q7. Which reference group influence you most to buy a particular chocolate?
Friends Family Retailer Celebrity Other
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_______ _______ _______ _______ _______
Q8. You consider manufacturing and expiry date while buying any chocolate________
Strongly agree
Agree Neutral
Disagree
Strongly Disagree
Q9. If you switch over to another brand of chocolate then what factor you consider? Price
Quality
Advertisement and Reference group
Brand Name Taste
Q.10 What quality of chocolate attracts you ? Quantity of sugar.
Chocolate Flavor
Quantity of Milk. Q11. Are you satisfy with the present brand of chocolate in Yamuna Nagar_______
Strongly Satisfy
Satisfy
Neutral Dissatisfy
Strongly
Dissatisfy Q12. What is your suggestion for the improvement of your preferred chocolate brand?
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