Project Report On “Consumers’ perception regarding branded and unbranded grocery items”
Submitted to: Punjab Technical University, Jalandhar.
In partial fulfillment of the requirement for the award of degree of Master of Business Administration (SESSION – 2007-09)
SUBMITTED TO:
SUBMITTED BY:
Mr. Raman Kumar
Sanjay Verma
(Lect. In Mgt.)
MBA IVth Sem Roll no 7043221465
CT INSTIUTE OF MANAGEMENT & IT JALANDHAR
CERTIFICATE
This is to certify that the project report entitled “ Consumers perception regarding branded and unbranded grocery items” submitted by SANJAY
VERMA is a bonafied piece of work conduced under my direct supervision and guidance. No part of this work has been submitted for any degree of any other university. It may be considered for evaluation in partial fulfillment of the Degree of Master of Business Administration.
DATE:-
PROJECT GUIDE: Mr. Raman Kumar (Lect. In Mgt.)
PREFACE
A person learns to understand business from a realistic angle. With the help of major project an individual show the practices of business. I have done my project on the topic “ Consumers perception regarding branded and unbranded grocery items”. In my research I studied firstly what is brand,
importance of brand for company & about the branded grocery items. Then I collected the data through questionnaire to know what consumer perceive about branded grocery. Do they accept the branded grocery items or the prefer to buy lose or unbranded grocery, in my research I also have tried to find out the factors that pushes a customer from unbranded to branded & also the factor that stop them top buy unbranded items. In today’s world of cutthroat competition the theory “survival of the fittest” prevails. A comparison has to be made and weak points should be overcome in order to meet customer’s demand with more efficiency.
STUDENT DECLARATION I Sanjay Verma Verma has prepared the report titled “customer “customer Perception towards online shopping”. I have not copied from any report submitted earlier this or in any university. This is purely original work. Sanjay Verma MBA-4thSem, Roll No. 7043221465
ACKNOWLEDGEMENT
A project report takes a lot of efforts and labor for its completion. It can never get completed without the toil. But in addition to, a lot of help is requiring from sources also. This project could never had completed without the endeav endeavors ors of my projec projectt guide, guide, Asst. His insi insigh ghtt and and Asst. Prof. Prof. Raman Raman Kumar Kumar. His valuable suggestions helped me in every phase of making of the project, be it data collec collectio tion, n, data data analys analysis is or represe representa ntatio tion n of the inform informati ation. on. I express express deep deep gratitude to Asst. Prof. Raman Kumar. Besides, acknowledgements are also due to the the wort worthy hy dire direct ctor or of the the inst instit itut ute, e, Ashwani Under whose whose able able Ashwani Kansara Kansara Under leadership such projects reach the level of refinement and polishing that is required of them. During this project numerous other people helped me but mentioning those entire names, here is not possible. To all those unnamed helpers, I extend my heartiest thanks, as without their help this project would not have materialized.
TABLE OF CONTENTS
Chapters
Title
Page no
Chapter 1
Introduction to the Study
1
Chapter 2
Objectives of the study
35
Chapter 3
Research
37
Chapter 4
Limitation of the study
41
Chapter 5
Data analysis and
43
Chapter 6
interpretation Conclusion &
60
Recommendations Bibliography Annexure
CHAPTER-1
1
INTRODUCTION INTRODUCTION TO THE STUDY
The packaged food industry is probably one of the most promising emerging markets in India today. Gone are the days when wheat was sent to the local ‘chakki’ to be milled into flour or mustard oil grinded at the local ‘kolu’s’. People today have become extremely conscious and are willing to pay pay the extra rupees rupees in order order to ensure ensure that qualit quality y produc productt enter enter their their kitchens. There has been a complete overhaul of lifestyle and traditional systems in the last decade or so with the emergence and growth of nuclear families. Meals are no more a family ‘event’ but have been relegated to a mundane routine. People are hard-pressed for time and are constantly in need of that magic something will save them an additional minute without compromising on nourishment. This must-hallowed gap has been effectively filled by the packaged foods industry. Starting from instant noodles and soup, packaged rice and flour and on to frozen peas and meat all of which is contently located under the roof of the local supermarket. Branded and packaged foods fill this gap not by saving only by saving time for the consumer but also ensure quality and consistency. The local supermarket too has come a long way. Today they door of urban Indi Indiaa by the the hund hundre reds ds.. Asso Associ ciat ated ed dist distra ract ctio ions ns notw notwit iths hsta tand ndin ing, g, the the supermarket has emerged as the one-stop shopping solution for families, 2
Where all domiciles necessarily rub shoulders within each other at prices that are competitive and more often than not even lower than the local ‘karyana’ store. Through trial and error, intelligent consumers have realized how very beneficial these ‘alternatives’ are. From salt to noodles, peas to chicken, every thing is available today treated, processed and hygienically packaged untouched by hand. Consumers have started preferring them in spite of the fact that they are offered at a premium i.e. priced slightly higher than what they would get at the local sabzi mandi or butcher hop unbranded (and relatively more unclean). Companies efforts have been aimed further ease the consumer’s shopping experience and at the same time giving them total value for money. So in my rese resear arch ch I have have sele select cted ed this this topi topicc the the ‘stu ‘study dy of cons consum umer er perception about branded and unbranded items’. In this project I find the consumer liking disliking their way of thinking & their way of adopting the thing. I studied what are the various factors that perceive are important while purchasing and where the branded & unbranded grocery to them.
3
The meaning of brands
Brands are a means of differentiating a company’s products and services
from those of its competitors. There is plenty of evidence to prove that customers will pay a substantial price price premium premium for a good brand and remain loyal to that brand. It is
impo import rtan ant, t, ther theref efor ore, e, to unde underst rstan and d what what bran brands ds are are and and why why they they are are important. MacDonald sums this up nicely in the following quote emphasizing the importance of brands: “…It is not factories that make profits, but relationships with customers, and it is company and brand names which secure those relationships”
Businesses that invest in and sustain leading brands prosper whereas those that fail are left to fight for the lower profits available in commodity mark.
4
What is a Brand?
One definition of a brand is as follows:
“A name, term, sign, symbol or design, or a combination of these, that is intended to identify the goods and services of one business or group of businesses and to differentiate them from those of competitors ”.
Inter brand - a leading branding consultancy - defines a brand in this way:
“A mix mixture ture of tang tangib ible le and and inta intang ngib ible le attr attrib ibut utes es symb symbol oliz ized ed in a trademark, which, if properly managed, creates influence and generates value”
Manufacturers can use their own brands (known as manufacturer’ brand) a brands of their distributor (distributor brands). Manufacturer/distributor use brand names for a verity of reasons from simple identification purposes to having legal Protec Protectio tion n for unique unique feature featuress of the produc products ts from from imitat imitation ionss and help help consumers consumers recognizes recognizes certain certain quality quality parameters. parameters. In some cases, brands brands are just used to endow the product with unique story and character which itself can be a basis for f or product differentiation.
5
How a brand is created
Grocery companies spend enormous sum on building brand equity by way of 1- Advertisements/publicity Advertisements/publicity
2- Free samples
3- Low entry price
4- Promotions
Advertisements/publicity
Advertisement and promotion can induce trials but for sustained loyalty, the manufacturer has to offer superior quality and value of money. Most successful successful brands are founded founded on chance chance discovery of a new product/ product/ process or assiduous research and development work. Major players invest in R&D on thei theirr exit exitiing bran rands and impro mprove ve the produ roducct qual qualit ity y continuously to maintain their edge over competitors. Advertising is paid communication through a non-personal medium in which the sponsor is identified and the message is controlled. Variations include publicity publicity,, public relations,, produ relations product ct
placem pla cement ent, sponsorship sponsorship,,
promotion.. promotion 6
underwriting,, underwriting
and
sales
Every major medium is used to deliver these messages: Tele Televi visi sion on,, radio radio,, movi movies es,, maga magazi zine nes, s, news newspa pape pers rs,, the the inte intern rnet et,, and and billboards. Advertisements can also be seen on the seats of grocery carts, on the walls of an airport walkway, and the sides of buses, or heard in telephone hold messages or in-store PA systems – nearly anywhere a visual or audible communication can be placed. Adve Advert rtis isin ing g clie client ntss are are pred predom omin inan antl tly, y, but but not not excl exclus usiv ivel ely, y, for-p for-prof rofit it corporations seeking to increase demand for their products or services . Low entry price
Esta Establ blis ishi hing ng a rela relati tive vely ly low low pric pricee for for a prod produc uctt or serv servic ice, e, usua usuall lly y to stimulate demand and acquire market share. This makes the most economic sense for the seller when there are significant economies of scale achievable from high volume production, or when the buyers are price sensitive and the seller has few competitive advantages Free samples
A free sample is a portion of food or other product which is given out in shopping malls, malls , grocery stores, stores, and other venues. Sometimes samples of non-perishable items are included in direct marketing mailings.
7
The The purpo purpose se of a free free samp sample le is to acqu acquai aint nt the the cons consum umer er with with a new new product. The concept of a free sample is not unlike that of a test drive, drive, in that a customer is able to try out a product before purchasing it. There are lots of free samples online. Often, people will create forums to share free samples they find, such as the Slick Deals Esta Establ blis ishi hing ng a rela relati tive vely ly low low pric pricee for for a prod produc uctt or serv servic ice, e, usua usuall lly y to stimulate demand and acquire market share. This makes the most economic sense for the seller when there are significant economies of scale achievable from high volume production, or when the buyers are price sensitive and the seller has few competitive advantages
Promotion
Single element of an advertising campaign. A promotion might be a shortterm term price price reduct reduction ion,, contes contestt or sweeps sweepstak takes, es, packag packagee giveaw giveaway, ay, or free free sample offer. A promotion might also be a single mailing within a direct mail campaign or series of advertisements that make up part of an ongoing prin printt adve advert rtis isin ing g camp campai aign gn.. The The Milk Milk Advi Adviso sory ry Boar Board d has has empl employ oyed ed celebrities with milk mustaches in a series of magazine ads. These "Got Milk?" print ads are a promotion within an overall campaign to increase milk consumption.
8
Promotional Promotional Objectives
There are a number of promotional objectives, some of the most common being information dissemination, product demand, product differentiation, product highlights, and sales stabilization. Regardless of the promotional objective selected, the company's goal is to inform and convince consumers to buy the product.
9
Brand value to consumers Brands, in fact, influence consumer behavior in a number
1. Reassurance: A brand is stamp of authenticity. It adds value by promising
‘reliab ‘reliabili ility’ ty’ and help help to establ establish ish repeat repeat purcha purchase se pattern patterns. s. In a foreig foreign n country, people seek the reassurance of familiar brands, even though they are presumably traveling to find new experiences.
2. Value expression: We choose brands that reflect the individual values that
we possess as individual. We do this to communicate the desire singles in the highly social environment we inhabit.
3. Usage: A strong brand increases a consumer’s usage and spends over
time, either within a category or as abridge into other categories. It has been succ succes essf sful ul in ever every y cate catego gory ry,, beca becaus usee the the perc percep epti tion on has has been been the the same-“consistent valve delivery to the same”.
4. Brand Brand switch switch:: in FMCG markets, experimenting less with competition
means that the brand achieve larger proportion of the category spend by the consumer. For example, maggi soup is always bought by the consumer, and is not being substituted by other soup brands.
10
BRANDS - BUILDING A BRAND What factors are important in building brand value?
Professor Professor David David Jobber Jobber identifies identifies seven main factors factors in building building successful successful brands,
as
illustrated
in
the
diagram
below:
11
1. Quality : Quality is a vital ingredient of a good brand. Remember the “core
benefits” – the things consumers expect. These must be delivered well,
consistently. The branded washing machine that leaks, or the training shoe that often falls apart when wet will never develop brand equity. Research confirms that, statistically, higher quality brands achieve a higher market shares and higher profitability that there inferior competitors.
2. Positioning: Positioning is about the position a brand occupies in a
market in the minds of consumers. Strong brands have a clear, often unique position in the target market. Positioning can be achieved through several means, including brand name, image, service standards, product guarantees, pac packa kagi ging ng and and the the way way in whic which h it is deli delive vere red. d. In fact fact,, succ succes essf sful ul positioning usually requires a combination of these things.
3. Repositio Repositioning: ning: Repositioning occurs when a brand tries to change its
mark market et posi positi tion on to refle reflect ct a chan change ge in cons consum umer er’s ’s tast tastes es.. This This is ofte often n required when a brand has become tired, perhaps because its original market has matured or has gone into decline. The repositioning of the Lucozade brand from a sweet drink for children to a leading sports drink is one example. Another would be the changing style of entertainers with aboveaverage longevity such as Kylie Minogue and Cliff Richard.
12 4. Communication: Communications also play a key role in building a
successful brand. We suggested that brand positioning is essentially about
Customer perceptions – with the objective to build a clearly defined position in the minds of the target audience. All elements of the promotional mix need to be used to develop and sustain customer perceptions.
5. First-mover First-mover advantage: advantage: Business strategists often talk about first-mover
advant advantage age.. In terms terms of brand brand develo developme pment, nt, by “first “first-mov -mover” er” they mean that it is possible for the first successful brand in a mark market et to crea create te a clea clearr posi positi tion onin ing g in the the mind mindss of targ target et customers before the competition enters the market. There is ple plent nty y of evid eviden ence ce to supp suppor ortt this this.. Thin Think k of some some lead leadin ing g consumer product brands like Gillette, Coca Cola and Sell tape that, in many ways, defined the markets they operate in and continue to lead. However, being first into a market does not necessarily guarantee long-term success. Competitors – drawn to the high growth and profit potential demonstrated by the “mark “market et-mo -move ver” r” – will will ente enterr the the marke markett and and copy copy the the best best elements of the leader’s brand (a good example is the way that Body Shop developed the “ethical” personal care market but were soon facing stiff competition from the major high street cosmetics retailers. 6. Long-term perspective: This leads onto another important factor in brand
bui build ldin ing: g: the the need need to inve invest st in the the bran brand d over over the the long long-t -ter erm. m. Buil Buildi ding ng custom customer er awaren awareness ess,, commun communica icatin ting g the brand’ brand’ss messag messagee and creati creating ng customer loyalty takes time. This means that management must “invest” in a brand, perhaps at the expense of short-term profitability.
13 7. Internal marketing: Finally, management should ensure that the brand is
marketed “internally” as well as externally. By this we mean that the whole bus busin ines esss shou should ld unde underst rstan and d the the bran brand d valu values es and and posi positi tion onin ing. g. This This is particularly important in service businesses where a critical part of the brand value is the type and quality of service that a customer receives. Think T hink of the brands that you value in the restaurant, hotel and retail sectors. It is likely that your favorite brands invest heavily in staff training so that the face-toface contact that you have with the brand helps secure your loyalty.
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Understanding what is brand equity
Over 21,000 new products were introduced in 2004 alone yet history tells us that better than 90% of them won’t be on the shelf a year later. Why such a high failure rate and why this been a historical trend. The develo developme pment nt of a succes successfu sfull produc product-, t-, which which includ includes es the produc product, t, the pac packa kage ge,, the the prod produc uctt name name and and iden identi tity ty,, is a chal challe leng ngin ing. g. But But not not insurmountable task. The like hood for success can be greatly enhanced if one focuses on certain critical issues. Clear product definition and proper execution and implantation that definition can lead to success and longevity in the market. Thro Throug ugh h the the 1980 1980’s ’s and and 90’s 90’s there there has has been been a grow growin ing g corp corpora orate te on increa increasin sing g shareh sharehold older er value. value. Typica Typicall headin heading-g g-grab rabbin bing g story story of these these decade decadess have have includ included ed waves waves of layoff layoffs, s, corpor corporate ate restru restructu cturin ring g and an emphasis on operating efficiencies. One solution is to grow the brand. This serves to build consumer and investor confidence in and loyalty to the company. A strong brand acts as a promi promise, se, leadin leading g faithf faithful ul custom customers ers to pay a premiu premium m over over compet competiti itive ve pro produ duct cts. s. Like Like wise wise the the stoc stock k of high highly ly repu repute ted d comp compan anie ies’ s’ trad tradee at premiums to other in their respective industries. The most important assets of any busine business ss are intang intangibl ible: e: the compan company y name, name, brand, brand, symbol symbols, s, and slog slogan ans, s, and and thei theirr unde underly rlyin ing g asso associ ciat atio ions ns,, perc percei eive ved d qual qualit ity, y, name name awar awaren enes ess, s, cust custom omer er base base,, and and prop propri riet etar ary y reso resour urce cess such such as pate patent nts, s, trademarks and channel relationship
15 These assets, which comprise brands equity, are primary sources of competitive advances and future earning. Yet, research show that manager cannot identify with confidence their brand association, level of consumer awaren awareness ess,, or degree degree of custom customer er loyalt loyalty. y. Moreov Moreover, er, in the last last decade decade manage managerr desper desperate ate for short-t short-term erm financi financial al result result have have often often unwitt unwitting ingly ly damaged their brands through Price Price prom promot otio ions ns and and un wise wise bran brand d exte extens nsio ions ns,, caus causin ing g irre irreve vers rsib ible le deterioration of the value of the brand name. Although several companies, such as Hindustan Lever Limited and other comp compan anie iess have have rece recent ntly ly creat createe an equi equity ty mana manage geme ment nt posi positi tion on to be guar guardi dian an of the the valu valuee of the the bran brand d name names, s, far too too few few mana manage gerr real really ly understand the concept of brand equity and how it must be implemented.
In a fascinatin fascinating g and unsightly unsightly examinatio examination n of the phenomenon phenomenon of brand equity, it is extremely important to know how to avoid the temptation to place short-term performance before the health of the brand and instead, to manage brands strategically creating, developing and exploiting each of the assets assets in turn, turn, likewi likewise se compan companies ies can increa increase se their their new product’ product’ss chances an d maximize the potential rewards, by understanding what their target market desires. For instance, it’s tempting to short-cut market research and rich a product idea to market. m arket.
16 Large sum of money become invested in the process. Even if poor consum consumers ers result result occur, occur, compan companies ies may contin continue ue on when when they they should should postpone or cancel the launch.
Companies must first listen to the voice of the consumer is a critical one to hear but one that many firms have difficult in translating into products. Many companies hear the words spoken by the consumers and work hard to deliver on them but, as is often the case, what is says is actually meant (by the consumer) may be very, very different.
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Branding and Brand Equity
In today’s environment, building strong brands establishing brand equi equity ty is beco becomi ming ng more more and and more more chal challe leng ngin ing. g. Incr Increa ease sed d pres pressu sure re to complete on price, increased competition through product introductions and store brands, and the fragmentation of advertising and market segments are just a sample of the pressure being faced by companies in today’s highly competitive environment.
What is Brand Equity? “Brand equity” refers to the value of a brand. Brand equity is based
on the extent to which the brand has high brand loyalty, name awareness, perceived quality and strong product associations. Brand equity also includes othe otherr “int “intan angi gibl ble” e” asse assets ts such such as pate patent nts, s, trad tradem emar arks ks and and chan channe nell relationships.
There are different definitions of brand equity, but they do have several factors in common:
18 : These are as follows
Monetary Value: The amount of additional income expected from a branded
product over and above what might be expected from an identical, but unbranded product. For example, grocery stores frequently sell unbranded versions of name brand product. The same companies produce the branded and unbranded product, but they carry a generic brand or store brand label like Hawkins. Store brands sell for significantly less than brand counterparts, even when the contents are identical. This differential is the monetary value of the brand name.
Intangible: The intangible value association with a product that cannot be
acco accoun unte ted d for by pric pricee or featu feature res. s. Peps Pepsii and and coke coke have have creat created ed many many intang intangibl iblee benefit benefitss for its produc productt by associ associati ating ng them them with with film film stars. stars. Children and adult want to consumer their product to feel some association with this star. It is not the ingredients or the features that drive demand for their products, but the marketing image that has been create. Buyers are willing to pay extremely high price premium over lesser-known brands, which may offer the same or better, product quality and features.
Perceived Quality: The overall perception of quality and image attributed to
a product, independent of its physical features. Mercedes and BMW have established their brand names as synonymous with high- quality, luxurious automobiles. Years of marketing, image building and quality manufacturing have lead to perceive Mercedes and BMW as providing superior quality to other brand name automobiles even when such a perception is unwarranted.
19 In short, brand equity is asset of assets and liabilities linked to a brand, its name, and symbol that add to or subtract from the value provide by the product or service to a firm and/or that of firm’s customers.
The overall description of brand equity incorporates the ability to provided added value to your company’s product and service. This added value can be used to your company’s advantage to charge price premium. Lower marketing cost and offer greater opportunities fir customer purchase. A badly mismanage brand can actually have negative brand equity, meaning that potential customers have such low perception of the brand that they presc prescrib ribee less less value value to the product product than than they they would would if they they object objective ively ly assessed all its attributes/features.
One of the examples of brand equity is in the soft drink industry. Without a brand name and all of the marketing dollars that have gone into, coca-cola would be nothing more than flavored water. Due to the company’s long-term marketing efforts and protection, enhancement and nurturing of their brand name, coke is one of the most recognizable brands the world. This includes lost sales, lost marketing dollars and lost promotions, additional marketing costs to promote a new brand, and significantly lower awareness and trial rates forms their new brand.
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BRANDING PROMOTIONS
Developing a promotion as a brand can provide a powerful tool for building
Additional brand awareness and positive associations. An excellent method to achieve this is through linking the promotion to the actual brand. For example, consider a promotion to win a trip to Disney world for a product with no link to Disney world or travel. The contest participants will most likely forget except the actual product associated with the prize.
Compare this with a company’s brand promotion that directly on the association of the product thus power of the brand. A promotion such as this affects non-participants as well as those inv loved, creating a platform to be built on each year. Furthermore developing a tight link between and the brand avoids the possibility of promoting other brands. In effect, it is recommended to brand a promotion so that it cannot a linked to anther brands.
21
BRANDING IN GROCERY
Historically, traditional food items were the domain of small local players. Grocery item earlier were sold loose and unbranded. Then some progressive traders started the cleaning, grading and primary packaging. And the next stage of development was branding so primary food such as Atta (wheat flour). But those were mainly regional brands. Popular among these were “rose” and Shakti bog” brands in northern India. Whereas in traditional food items such as spice vand pickles there were host of local brands brands with regional regional strong-holds strong-holds such as spice power in east east “Bed “Bedka kar” r” pick pickle less in west west,, MDHMDH-Ma Masa sala la in nort north h east east.. The The food food ingredient-nobody though of only food ingredients that was there tomato purees and paste in cans which in the recent times godrej introduced in tetra pack. Edible oil in tin pack and later on in polyester jar and tetra pack were the first major step in branding grocery item. Today we get Varity of edible oils and Marco are the leading players in this sector. Amongst MNC’s we have corn oil from COC and “Sun drop” from ITC agro—a sunflower oil which subsequently has been acquired by CONAGRA- the fastest growing food company in American. The next major attempt to market a branded grocery item was done about a decade ago by Tatas by introducing the first refined iodized salt in poly bag by brand name “Tata Salt” and that was a success.
22 The next big brand in this category is “Captain Cook” from DCW chemicals that had plans in branded grocery items and thus the company introduced other items including wheat flour under the same brand name. But that was short lived.
During 1997 DCW chemical s suffered a major setback and the company decides to divest this food business. The acquirer is Corn Product Co. (India) Ltd-a wholly
Owned subsidiary of CPC-international a nine billion US dollar American multinational in food and grocery business. The company recently changed its name to Best Food ltd. CPC was a sleepy company operating in India for over fifty years and their performance was lackluster. With their limited range of Rex and brown and Polson brands of convenience foods globally did not have any commitment in India? In late seventies and early eighties when I was heading their project department many investment proposal were send and notably among those were dextrose manufacturing project as CPC has a flavored glucose brand in the portfolio and known soup project.
The third brand of salt is “Kissan Annapurna” which is making a sustained effort to get market share. This brand which is now in Hindustan level fold through brook bond acquisition who in turn acquired Kissan in early nineties have reportedly spend Rs18 Crores in advertising and got 14% market share in a Rs200 Crores branded salt category in a span of one year. Tata salt still holds 26% market share and Captain Cook share is about 20% and balance 40% is still with the small players.
23 With the acquisition of “Captain Cook” in branded salt market MNCs are the dominant players controlling 60% of the market.
The value addition in branded salt and pepper was really done succes successfu sfull by a Delhi Delhi based based local local compan company y hi tech tech Foods Foods belong belonging ing to Dharampal Satayapal of premium “Baba zarda” fame. Hi-tech Foods catch brand of salt and pepper in dispenser pack is a success story with upper middle class household and restaurant segments as the main customers. The first MNC to get into the branded spice business was Brook Bond who introduced the select premium priced spice range by name “Sona” in late eighties. The products were priced and packaged for higher income group. They struggled struggled for couple couple of years to establish “Sona” brand but failed and were forced to withdraw in later years.
The first MNC to introduce Indian pickles was Nestlé with their Maggie brand. The products are still in the market. And as mentioned earlier, the MNC to introduce traditional snacks is Pepsi under the umbrella of “Leher namkins”. It can be concluded that in traditional Indian foods MNCs cannot add much value through the involvement of their principle aboard .on the contrary, they will have to learn from the locals to derive advantage of their brand and resource muscle.
Hindustan Level is expected to enter branded grocery items though Kissan rough in a big way. The company does significant export of branded rice particular in Middle East market and therefore expected to introduce the branded rice shortly in domestic market as well.
24
Otherwise, in India so far branded package rice is limited to Basmati rice and there are many brands in this category and leading among them is “KOHINOOR” – but all are from small manufacturers. The grocery business is basically low margins and high volume business and thus it required multiple supply sources to be strategically located to reduce he cost of friend and excellent distribution infrastructure and logistics management capability.
Price and quality are expected to be the major determinate in the success of grocery items and basic foods. Consumers in India would not be willing to pay much as the price of convenience.
25
CONSUMER PERCEPTION
Perception can be describe as “how we see the world around us.” Two indivi individua duall may be subjec subjectt to the same same stimul stimulii under under appare apparels ls the same condition, but how they recognize them, select them, organize them, and interpret them is a highly individual process based on each person’s one needs, values and expectations. The influence that each of these variables has on the perceptual process, and its relevance to marketing.
DEFINATION
“Perception is defined as the process by which an individual selects, organized and interpret stimuli into a meaning full & coherent picture of the world. A stimulus is any unit of input to many of the senses. Examples of stim stimul ulii incl includ udee prod produc ucts ts,, pack packag ages es,, and and bran brand d name names, s, adve advert rtis isin ing g and and commercial. Sensory receptors are the human organ that receives sensory inpu inputs ts.. All All of thes thesee func functi tion onss are call called ed into into play play-- eith either er sing single le or in combination-evaluation and use of most consumer products. The study of perception is largely the study of what we subconsciously add to or subtract from raw sensory input to produce our own private picture of the world.
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PERCEPTUAL SELECT Consumers subconsciously exercise a great deal of selective as to which aspect of the environment-which stimuli-they perceive. An individual may look at some things, ignore others and turn away from still others. In total, people actually receiver perceive only a small fraction to the stimuli to which they are expose marketing ng stimul stimulii includ includee an enormou enormouss number number of Nature Nature of stimulu stimulus: s: marketi variables that affect the consumer’s perception such as the nature of the product, its physical attributes, the packages design, the brand name, the advertisement and commercial, the pos posit itio ion n of a prin printt ad or the the time time of a comm commer erci cial al and and the the edit editor oria iall environment.
Contrast: - contrast is one of the most attention- compelling attributes
of a stimulus. Advertiser often uses extremely attention getting device to achi achiev evee maxi maximu mum, m, cont contra rast st and and thus thus pene penetr trat atee the the cons consum umer er perceptual screen.
Expectations: - People usually see what they expect to see and what they
expect expect to see is usuall usually y based based on familia familiarit rity y previo previous us experi experienc encee or preconditioned set in marketing context people tend to perceive product and product attributes according in their own expectation.
27
Motives: - People tend to perceive thing they need or want the stronger
the the need need the the grea greate terr the the tend tenden ency cy to igno ignore re unre unrela late ted d stim stimul ulii in the the environment. An individual perceptual process simply attunes itself more closely to those elements of the environment that are important to that person.
Important selective perception concepts: As the preceding discussion
illustrates, the consumer’s “Selection” of stimuli from the environment is based on the interaction of expectation and motives wit the stimuli itself. These factors giver rise to a number of important concepts concerning perceptions.
Consumers actively actively seek out messages SELECTIVE EXPOSURE: Consumers they find pleasant or with which they are sympathetic and actively avoid avoid painfu painfull threa threaten tening ing ones. ones. Consum Consumers ers also also select selective ively ly expose expose themselves to advertisement that reassures them of the wisdom of their purchase decision.
SELECTIVE ATTENTION: Consumers have a heightened awareness
of the stimuli that meet their need or interest and an owner awareness of stimuli irrelevant to needs.
28
consumers ers subcon subconsci scious ously ly screen screen out PERCEPTU PERCEPTUAL AL DEFENSE DEFENSE: consum stimuli that are important to for them not to see even though exposure has has alre alread ady y take taken n plac place. e. Thus Thus threa threate teni ning ng or othe otherw rwis isee dama damagi ging ng stimuli are less to be consciously perceived than are neutral stimuli at the same level of exposure.
Consumers protect protect themselves themselves from PERCEPTUAL BLOCKING: Consumers being bombarded with stimuli by simply” tuning out”- blocking such stimul stimulii from from consci conscious ous awaren awareness ess.. This This percep perceptua tuall blocki blocking ng –out –out is somewhat to the mechanical “zapping” of commercial using remote controls.
29
CONSUMER DECISION MAKING AND BUYING PROCESS
Marketing have go beyond the various influences on buyers and develo develop p an unders understan tandin ding g of how consum consumers ers actual actual make make their their buying buying decisions. Mainly the buyer plays these roles in buying decisions:
Initiator: a person who first suggests the idea of buying the product or
service.
Influencer : a person whose view or advice influences the decision.
Decider: a person who decide on any component of a buying decision.
Buyer: the person who makes the actual purchase.
User: a person who consumers or uses the product or service.
30
Decision Making Process
Need Recogniti Recognition on: The buying buying proces processs starts starts when when the buyer buyer
recognizes a problem or need. The need can be triggered by internal or external stimuli. In the former case, one of the person normal needs – hunger, thirst and sex- rise to a threshold level and become a drive. In the relative case, a need is roused r oused by an external stimulus.
Marketers need to identify the circumstances that trigger a particular need. By gathering information from a number of consumers, marketers can identify the most `frequent stimuli that spark and interested in a product category. category. They can develop develop marketing marketing strategies strategies that trigger consumer’s consumer’s interest.
Information search: An aroused consumer will be inclined to search for
more information. We can distinguish between two levels of arousal. The milder search state is called heightened attention. At this level a person simply becomes more receptive to information about a product. At the next level, the person may enter active information search: looking for reading material, phoning friend and visiting stores to about the product. Consumer information sources fall into four groups •
Personal sources: family, friends, neighbors
•
Comm Commer erci cial al
sour source cess:
adve advert rtis isin ing, g,
sal salespe espers rso ons, ns,
deal dealeers, rs,
packaging 31 •
Public sources: mass media, consumers-rating organizations
•
Experimental sources: handling, examining, using the product
Each information source performs a different function in influencing the buying decision. Through gathering information, the consumer learns about competing brands and their features. Evaluation of alternatives: There is no single evaluation process used
by all consumers or by one consumer in all buying situation. There are several decision evaluation processes, the most current models of which see the process as cognitively oriented. Some basic concepts will help us understand consumer evaluation processes.
•
First, the consumer is trying to satisfy a need.
•
Second, the consumer is looking for certain benefits from the product solution.
•
Third, the consumers see each product as a bundle of attributes with varying abilities of delivering the benefits sought to satisfy this need. Consumers vary as to which product attributes they see as most relevant and the importance they attach to each attribute. They will pay the most attention to attributes that deliver the sought ben benef efit itss the the mark market et for a prod produc uctt can can ofte often n be segm segmen ente ted d accord according ing to attrib attribute utess that that are silent silent to differe different nt consum consumer er group. 32 Purchase Decision: in evaluation stage, the consumer forms
pref referen rences amon mong the brands in the choice set. The
consumer \may also forms an intention to buy most preferred bra brand nd.. Howe Howeve ver, r, two two fact factor orss can can inte interv rven enee betw betwee een n the the purchase intentions and the purchase decision. The first factor is the attitude of the others. The second, factor is unanticipated pai paitu tuat atio iona nalfa lfact ctor or that that may may erup eruptt to chan change ge the the purc purcha hase se intention.
A consumer’s decision to modify, postpone or avoid a purchase decision is heavily influenced by perceptive risks. The amount of perceived risk varies with amount of money at stake, the amount attribute uncertainty and amount of consumer selfconfidence.
afterr purc purcha hasi sing ng the the prod produc uctt the the Post Post purch purchase ase behavior behavior: afte cons consum umer er will will expe experi rien ence ce some some leve levell of sati satisf sfac acti tion on ort diss dissat atis isfa fact ctio ion. n. The3 The3 mark market eters ers job job does does not not end end when when the the prod produc uctt is boug bought ht mark market eter erss must must moni monito torr post post purc purcha hase se satisf satisfact action ion;; post post purcha purchase se action action and post post purch purchase ase produc productt users.
33
CONSUMER DECISION MAKING AND BUYING PROCESS
Need Recognition
Information Information Search
Cultural, Social, Individual and Psychological
Evaluation of Alternatives
Purchase
Post purchase Behavior
CHAPTER-2
Objective of the study
35
OBJECTIVES OF THE STUDY
1. To check the awarene awareness ss level of consum consumers ers regardi regarding ng branded branded grocery items.
2. To stud study y the the pe perc rcep epti tion on of cons consum umer er abou aboutt the the pack packag aged ed and and brands grocery items.
3. To know the the place from from where where customer customer purchas purchasee branded branded items. items.
4.
To know now abou aboutt the the fact factor or affe affect ctin ing g a cu cust stom omer er’s ’s ch choi oice ce of branded /unbranded items.
5. To know know whether whether is there there is impac impactt of income income level level on the sale sale of branded unbranded grocery items.
36
Chapter er –3
37
RESEACH METHODOLOGY
Research Methodology is ways to systematically solve the problem.
The Research Methodology includes the various methods and techniques for conducing a Research.” Marketing Research is the systematic design, collection, analysis and reporting of data and finding relevant solution to a specific marketing situation or problem”. D.Slesinger and M. Stephenson in the encyclopedia of social sciences define Research as “the manipulation of things, concept or symbols for the purpose of generalizing to extend, correct or verify knowledge, whether that aids in construction of theory or in the practice of an art.”
Research is, thus an original contribution to the existing stock of
know knowle ledg dgee makin making g for for its its adva advanc ncem emen ent. t. The The purp purpos osee of rese resear arch ch is to disc disco0 o0ve verr answ answer er to the the ques questi tion on throu through gh the the appl applic icat atio ion n of scie scient ntifi ificc procedures. Our project has specified framework for collecting data in an effective manner. Such framework is called” RESEARCH Methodology”. The research process followed by me consists of following steps:
o
Defini Defining ng the proble problem m and resear research ch objec objectiv tivee: it is said, “ A problem problem well def define ined d is half half solve solved d”. The step is to define the
prob proble lem m unde underr stud study y and and deci decidi ding ng the the rese resear arch ch obje object ctiv ive. e. The The objective of my research is to know the consumer perception towards
unbranded & branded grocery items. 38
o
second of this study consists consists of Development the research plan: the second developing the most efficient plan for gathering data.
o
Sampling Sampling plan- A sample plan is a definite plan for obtaining a
sample from a given population. It refers to the technique or the procedure the researcher would adopt in selecting sample items for the sample. Sample plan may as well lay down the number of items to be included in the sample. i.e., the size of the sample. The plan helps in decision making in the following areas.
Universe: All All cust custom omer erss of bran brande ded d and and unbr unbran ande ded d groc grocery ery item itemss
constitute the universe.
Sample size: size: this refers to the number of items to be selected from the
universe to constitute a sample. The size of sample should neither be excessively large, nor too small, it should be optimum. The sample size for my study is -100 .
Sampling procedure: It is a way through which sampling is done.
Ther Theree are are vari variou ouss proc proced edur ures es like like rand random om,, syst system emat atic ic etc. etc. The The sampling procedure for my study is convenience sampling.
Research design: Descriptive in nature.
39
o
Data collection: information will be collected from both primary and
secondary data.
Primary sources: Primary data are those which are collected afresh
and for the first time. I have collected primary data by conducting survey through Questionnaire, which includes both open ended and close-ended Questions. Second ndar ary y data data are are thos thosee whic which h alrea already dy been been Secondar Secondary y sources sources: Seco collected by someone else and which already had been passed through the the stat statis isti tica call proc proces ess. s. I have have coll collec ecte ted d seco second ndary ary data data has has been been collected through Magazines, Web sites, and Newspaper.
Analysis of data and interpretations:
After collection of date the analysis of data has been done through vari variou ouss stat statis isti tica call tool toolss and and tech techni niqu ques es.. The The anal analys ysis is of data data req required a numbe mber of closely rel related operat rations such as establishment of category, the application of these categories to raw data data thro throug ugh h codi coding ng,, tabu tabula lati tion on and and then then draw drawin ing g stat statis isti tica call inferences.
40
Chapter-4
41
LIMITATIONS OF THE STUDY
1. Due to constra constraint intss of time & financ financial ial resourc resources, es, the scope scope of study study is limited to few customer of Jalandhar only.
2. Smaller Smaller sample sample may not always always give give better better results. results. Sample Sample may not be true representative of the whole population.
3. The possibi possibility lity of of biased biased responses responses is ruled ruled out. out.
4. Lack of availab availability ility of full full informati information. on.
42
DATA ANALYSIS AND INTERPRETATION
43
1 Q: - While purchasing grocery items what do you prefer? Objective: - To know how many people are aware of braded grocery items.
TABLE NO.1 RESPONSE Branded Unbranded Both Total
NO. OF RESPONDENTS 19 14 67 100
GRAPH NO.1
Consumer's purchasing Preference 19% Branded
14%
Unbranded Both
67%
Interpretation The result show that out of 100 respondents 19% respondents prefer branded items, 14% unbranded items and 67% respondent are those who buy both branded and unbranded items.
44
2 Q : - What names come to your mind when you think of branded items (if
you cannot recall then please?
Obje Object ctiv ive: e: - To know know awar awaren enes esss leve levell of the the resp respon onde dent ntss abou aboutt the the companies offering branded grocery items.
TABLE NO.2 Grocery Items
No of respondents
Annapurna Atta Shakti bog Atta Annapurna Pillsbury Lalkila rice Kohinoor rice Manawa sugar Tata tea Taj mahal Dabur honey Coco fruit Mother’s recipe Tata salt
08 10 15 2 9 10 5 7 8 7 4 5 10
GRAPH NO.2
consumer awarenesws regarding regarding comapnies offeri offering ng branded grocery rocery items 20 15
15 10 5
10
9 10
10 5
7
2
0 NO. of respondents respondents
4 5
8
Shakti bog Atta Annapurna Pillsbury Lalkila rice Kohinoor rice Manawa sugar Tata tea Taj mahal Dabur honey Coco fruit mother's recipe Tat salt Annapurna
Interpretation:
Every person has their different opinions regarding the companies offering branded food items. So that only interpretation can be given, therefore the interpretation is that for Atta or wheat flours the first name strikes to the mind of respondents is Shaktibhog, Annapurna & Pillsbury. For rice Lalkila & Kohinoor, for sugar mawana, tea of Tata & tea of Tata 7 Taj mahal, Honey of Dabur, dry- fruit of Coco, pickles of mother’s recipe, salt of Tata
& Annapurna, spices of MDH. But there are many respondents who do not know about the companies offering branded Dry-fruit 7 cereals.
46
3 Q: - From where do you purchase the grocery items?
Objectives: - To know the point of purchase.
TABLE NO.3.
RESPONSE
NO.
Near general store Super Market CSD Canteen Any Other
RESPONDENTS 40 28 12 20
OF
47 GRAPH NO.3 Point of Purchase 20% 40%
Near general store Super Market
12%
CSD Canteen Any Other
28%
Interpretation The result shows out of 100 respondent 40%respondent buy grocery items from near general store, 28% go to super market and 12% go to CSD Canteen to buy grocery because the people only from defense background
are allowed to purchase from the Canteen and moreover they allow two time purchase in a month and 20% from any other grocery wholesaler or other as they like.
48
4 Q: -Which of the following items you prefer to buy as branded ones?
Objective: To know which of the items respondents mainly preferred mainly to buy as branded ones.
TABLE NO. 4
Response Atta
or
No of respondents Wheat
13
Flour Rice
06
Sugar
02
T ea
22
Honey
04
Dry-fruits
07
Pickles
05
Salt
25
Spices
10
Cereals
06
Total
100
GRAPH 4
Prefe Prefe rtence of consumer regard regarding the items that should available branded Atta or Wheat flour Rice
12%
20%
25% 25 %
Suger
13% 13 % 3%
Tea Tea Honey Dry-Fruit
50%
Pickles
45% 45 %
Salt Spices
10% 10 %
NO:
Interpretation:
15% 7%
Cerels
From the above, it can be said that 25% of respondents prefer branded salt, followed by 22.5% for branded Tea, 12.5% branded Atta/wheat flour, 10% branded Spices, 7.5% branded dry-fruit, 6.5% branded Rice, 6% branded Cereals, 5% branded Pickles, 3.5% branded Honey, 1.5% branded Sugar.
50
5 Q: - Which of the following factors induce you most to go for branded
items.
Objec Objectiv tives: es: -To knows knows the import importanc ancee of each each factor factor that that effecti effecting ng the purchasing decision of customers.
TABLE NO.5
Factors Good quality Variety Assured quality Packaging Advertisement
No of respondents 27 25 22 16 10
51
GRAPH NO.5
Factor influenes buying behaviour 10% 16%
27%
Good quality Variety Assured quality Packaging
22%
25%
Advertisement
Interpretation From From abov abovee tabl tablee it is foun found d that that good good qual qualit ity y is more more emph emphas asis is by consumer then Variety, Assured quality, Packaging,Advertisement.
Resp esponde onden nts
No. Of res respon pondent dentss
Yes
50
No
50
6 Q: - Are you satisfied with unbranded items you have used?
Objective: - To know the satisfaction level of them respondent. NO. 6 TABLE
GRAPH NO.6
52
Satisfaction Satisfaction Level of C onsumers Regarding unbranded unbrande d items items 50
50
50 No of respondents
0 Yes
No
Interpretation The result for unbranded items show that out of 100 people 50% are satisfied with unbranded items and 50% of not satisfied.
53 7 Q: - If answ answer er to que questio stion n 6 is ‘NO ‘NO’ the then what hat are reas reason on of you you dissatisfaction? Objectives: - To find out the reason of dissatisfaction.
TABLE NO.7
GRAPH NO.7
Response
No.
Poor quality Impurity Unavailability Price
respondents 28 13 0 9
Of
Reason Of Dissatisfaction s t n e d n o p s e r f o o N
9
Price
0
Unavailability
13
Impurity
28
Poor quality
Interpretation The result of question 8 shows that only 40 respondents are dissatisfied from unbr unbran ande ded d item itemss they they used used.. The The reas reason onss for for diss dissat atis isfa fact ctio ion n were were poor poor quality, impurity in the order of importance. 54 INCOME & PURCHASING RELATIONSHIP
There is great relationship between income & purchasing decision. As well as income level change their consumer preferences or choice of purchase also changes, according to my studied consumer with high income level prefer branded things more than consumers with low income level. The consumer with low or you can say middle income level prefer only basic thing as branded but high income level consumer buy every thing branded this is shown in following table TABLE NO.8 Income level 10000-15000
Branded Tea • •
Salt
Unbranded Atta • •
Rice
•
Sugar
15001-20000
20001-25000
•
Atta
•
Sugar
•
Rice
•
Dry-fruit
• •
Spices Spices
•
Pickles
•
Sugar
•
Honey
Dry-fruit Prefer fer al almos most •
25001 & above
all things branded
55 The The data data show shown n in tabl tablee is gath gather ered ed by matc matchi hing ng inco income me leve levell of the the consumer with their buying preference this tables show that as the income increases demand for branded items also increases. Customer prefers to buy that goods branded which they buy unbranded former.
57
Chapter-6
CONCLUSIO ION
58
CONCLUSION
1. Customer is having a sense of freedom and choice.
2. Now the market is said to be customer oriented.
3. The preference of consumer is continuously shifted form unbranded to branded items.
4. Braded grocery items lie on high price scale and consumers want that price price should be reduced reduced where unbranded unbranded items lie on a low price scale but quality is not good.
5. Bran Brande ded d groc grocery ery item itemss have have a grea greatt impa impact ct on the the unbr unbran ande ded d item itemss because the sale of branded items is increasing and unbranded is decreasing because of consciousness of customer regarding quality.
6. According to the study, consumers are more aware of companies offering branded Atta, Tea, and Salt than companies that are offering other branded grocery items.
7. Purchasing power of consumers is changed due to change in income level.
8. Today’s customer is not loyal to one, they switch to other if they don’t get brand they want.
59
RECOMMENDATION
60
RECOMMENDATION
1. Cons Consum umer erss are are not not very very awar awaree abou aboutt all all bran brande ded d groc grocer ery y item itemss available in the market so companies should adopt good promotional stages to occupy an appealing space on the mind of consumers.
2. Price Price should should be reduced reduced of brande branded d items, items, compani companies es should should charge charge reasonable price from customer for branded items.
3. The The reta retail iler er or whol wholes esal aler er deal dealin ing g with with unbr unbran ande ded d groc grocery ery items items should improve quality of the items because these are major reasons of consumers’ dissatisfaction.
4. Branded Branded items items should should be easily easily available available..
5. Adverti Advertisem sement entss have have a great great impact impact on buying buying decision decision so the ads of item item such such as bran brande ded d dry-fr dry-frui uit, t, pick pickle les, s, suga sugarr etc etc shou should ld also also be telecast.
61
BIBLIOGRAPHY
62 BIBLIOGRAPHY
Kotl Kotler er
Phil Philip ip::
“Mar “Marke keti ting ng
Mana Manage geme ment nt
Anal Analys ysis is,,
Plan Planni ning ng,,
Implementation & Control, 6th edition (New Delhi – Prentice- Hall of ltd.1999.
Shar Sharma ma D.D, D.D, mark market etin ing g rese resear arch ch proc proces ess, s, Mark Market etin ing g rese resear arch ch principles, Application and cases
http://www.iimadh.ernet.in/-satish/teapaper.pd
www.indianline.com
www.google.com
63
Annexure
64
QUESTIONNAIRS Dear Respondent, I am Sanjay Verma student of CT INSTITUTE OF MANAGEMENT & IT, JALADHAR Pursuing MBA and conducting project regarding the” Consumers perception regarding branded and unbranded grocery items in Jalandhar”. I will be very thankful to you if you provide me the required information. Personal detail:Name: Gender: Occupation: Address :
…………………………………………. …………………………………………. ………………………………………….. ………………………………………….
Contact No: …………………………………………. 1. Q: - While purchasing grocery items what do you prefer?
1) Branding items
2) Unbranded items
3) Both
2 Q: - What names come to your mind when you think of branded items (if You cannot recall then please 1. Atta or wheat flour
_____________________ _____________________
2. Rice
_____________________ _____________________
3. Sugar
_____________________ _____________________
4. Tea
_____________________ _____________________
5. Honey
_____________________ _____________________
6. Dry-Fruit
_____________________ _____________________
7. Pickles
_____________________ _____________________
8. Salt
____________________ ____________________
9. Spices
____________________ ____________________
10. Cereals
_____________________ _____________________
65 3 Q: - From where do you purchase the grocery items? 1) Near general store 2) Super market 3) CSD canteen 4) Any other 65 4. Q: - Which of the following items you prefer to buy branded ones?
1) Atta or wheat
6) Dry-Fruit
2) Rice
7) Pickles
3) Sugar
8) salt
4) Tea
9) Spices
5) Honey
10) cereals
5 Q: -Which of the following factors induce you most to go for branded Items. ? 1. Good quality 2 Varieties 3. Assured quantity 4. Packaging 5. Advertising
6 Q: - Are you satisfied with unbranded items you have used? Yes No
66 7 Q: - If answer to question 6 is ‘NO’ then what are reason of Your dissatisfaction?” 1) Poor Poor qua quali lity ty 2) Impu Impuri ritty 3) Unav Unavai aila labi bili lity ty 4) Price 8 Q: - What improvements do you recommended for branded items? ____________________________ __________________________________________ _____________________ _______ ____________________________ __________________________________________ _____________________ _______ ________________________________
9 Q: -What do you think the future of branded items as well as unbranded items? ____________________________ ___________________________________________ ____________________________ _____________ ___ ____________________________ ___________________________________________ ____________________________ _____________ ___ ____________________________ ___________________________________________ ____________________________ _____________ ___
67
