“A COMPARATIVE STUDY ON BUYING BEHAVIOUR OF CONSUMER
FOR
INDIGENOUS
PRODUCT
vis-à-vis
INTERNATIONAL PRODUCT” Submitted for the partial fulfillment of the requirement for the award Of POST GRADUATE DIPLOMA IN MANAGEMENT SUBMITTED BY PRAVIN TRIPATHI PGDM 1 2OO8-10 BATCH Department of management INSTITUTE OF MANAGEMENT EDUCATION,
CONTENT ABSTRACT CHAPTER 1- INTRODUCTION, NEED OF STUDY, BACKGROUND CHAPTER 2- RESEARCH METHODOLOGY CHAPTER 3- DESCRIPTIVE WORK OF SUB TOPICS CHAPTER 4- DATA ANALYSIS AND INTERPRETATION
CHAPTER 5- CONCLUSION & SUGGSESTION BIBLIOGRAPHY ANNEXURE-
DECLARATION We the students of PGDM IST year, 2ND semester of INSTITUTE OF MANAGEMENT EDUCATION, SAHIBABAD, Ghaziabad, 2008-10 batch, hereby declare that the Winter Project Report titled “A COMPARATIVE STUDY ON BUYING BEHAVIOUR OF CONSUMER FOR INDIGENOUS PRODUCT vis-a-vis INTERNATIONAL PRODUCT” is the outcome of our own work and the same has not been submitted by
any Institute for the award of any degree or any Professional diploma. Date: ---------------------------PRAVIN TRIPATHI
ABSTRACT The first and most objective of our study is comparative study of consumers buying behavior regarding indigenous and imported products. The study of consumer behavior is the most important factor for marketing of any goods and services. The consumer behavior suggest how individual, groups and organization select, buy, use and dispose of goods, services, ideas or experience to satisfy there needs and wants. It also clues for improving or introducing products or services, setting price, devising channels etc. Since liberalization 100% FDI is allowed in India. This has attracted foreign companies to penetrate the Indian market. The marketers always look for emergent trends that suggest new
marketing opportunities and here in India a lot of opportunities are available.
.
ACKNOWLEDGEMGNT
This Project Report is the fruit of our intense hard work and dedication during our project work. We wish to express our sincere gratitude to our project supervisor Mr. SIDDHARTH VARMA for his esteemed guidance during the course of project work. We are grateful to her for giving us an insight into the realm of Buying consumer Behaviour on National and International product . In spite of her busy schedule, she was always available whenever we required help .
CHAPTER (I) INTRODUCTION
INTRODUCTION As a consumer we are all unique and this uniqueness is reflected in the consumption pattern and process purchase. The study of consumer behavior provides us with reasons why consumers differ from one another in buying using products and services. We receive stimuli from the environment and the specifics of the marketing strategies of different products and services, and responds to these stimuli in terms of either buying or not buying product. In between the stage of receiving the stimuli and responding to it, the consumer goes through the process of making his decision.
Stages of the Consumer Buying Process: Six Stages to the Consumer Buying Decision Process (For complex decisions). Actual purchasing is only one stage of the process. Not all decision processes lead to a purchase. All consumer decisions do not always include all 6 stages, determined by the degree of complexity...discussed next.
The 6 stages are: 1.
2.
Problem Recognition--difference between the desired state and the actual condition. Deficit in assortment of products. Hunger--Food. Hunger stimulates your need to eat. Can be stimulated by the marketer through product information--did not know you were deficient? I.E., see a commercial for a new pair of shoes, stimulates your recognition that you need a new pair of shoes. Information search-o Internal search, memory. o External search if you need more information. Friends and relatives (word of mouth). Marketer dominated sources; comparison shopping; public sources etc. A successful information search leaves a buyer with possible alternatives, the evoked set. Hungry, want to go out and eat, evoked set is Chinese food o Indian food o burger king Evaluation of Alternatives--need to establish criteria for evaluation, features the buyer wants or does not want. Rank/weight alternatives or resume search. May decide that you want to eat something spicy, Indian gets highest rank etc. If not satisfied with your choices then return to the search phase. Can you think of another restaurant? Look in the yellow pages etc. Information from different sources may be treated differently. Marketers try to influence by "framing" alternatives. Purchase decision--Choose buying alternative, includes product, package, store, method of purchase etc. Purchase--May differ from decision, time lapse between 4 & 5, product availability. o
3.
4. 5.
6.
Post-Purchase Evaluation--outcome: Satisfaction or Dissatisfaction. Cognitive Dissonance, have you made the right decision. This can be reduced by warranties, after sales communication etc. After eating an Indian meal, may think that really you wanted a Chinese meal instead.
Types of Consumer Buying Behavior Types of consumer buying behavior are determined by: • •
Level of Involvement in purchase decision. Importance and intensity of interest in a product in a particular situation. Buyers level of involvement determines why he/she is motivated to seek information about a certain products and brands but virtually ignores others.
High involvement purchases--Honda Motorbike, high priced goods, products visible to others, and the higher the risk the higher the involvement. Types of risk: • • •
Personal risk Social risk Economic risk
The four type of consumer buying behavior are: •
•
Routine Response/Programmed Behavior--Buying low involvement frequently purchased low cost items; need very little search and decision effort; purchased almost automatically. Examples include soft drinks, snack foods, milk etc. Limited Decision Making--Buying product occasionally. When you need to obtain information about unfamiliar brand in a familiar product category, perhaps. Requires a moderate amount of time for information gathering. Examples include Clothes--know product class but not the brand.
•
•
Extensive Decision Making/Complex high involvement, unfamiliar, expensive and/or infrequently bought products. High degree of economic/performance/psychological risk. Examples include cars, homes, computers, education. Spend a lot of time seeking information and deciding. Information from the companies MM; friends and relatives, store personnel etc. Go through all six stages of the buying process. Impulse buying, no conscious planning.
The purchase of the same product does not always elicit the same Buying Behavior. Product can shift from one category to the next. For example: Going out for dinner for one person may be extensive decision making (for someone that does not go out often at all), but limited decision making for someone else. The reason for the dinner, whether it is an anniversary celebration, or a meal with a couple of friends will also determine the extent of the decision making. Factors Effecting the Consumer Buying Decision Process A consumer, making a purchase decision will be affected by the following three factors: Cultural and sub culture Factor 2. Social Factor 3. Personal Factor 1.
•
Culture and Sub-culture-Culture refers to the set of values, ideas, and attitudes that are accepted by a homogenous group of people and transmitted to the next generation.
Culture also determines what is acceptable with product advertising. Culture determines what people wear, eat, reside and travel. Cultural values in the US are good health, education, individualism and freedom. In American culture time scarcity is a growing problem that is change in meals. Big impact on international marketing. Culture can be divided into subcultures: o o
geographic regions Human characteristics such as age and ethnic background.
West Coast, teenage and Asian American. Culture affects what people buy, how they buy and when they buy. Understanding Consumer Buying Behavior offers consumers greater satisfaction (Utility). We must assume that the company has adopted the Marketing Concept and are consumer oriented. Social Factors Consumer wants, learning, motives etc. are influenced by opinion leaders, person's family, reference groups, social class and culture. •
Roles and Family Influences-Role...things you should do based on the expectations of you from your position within a group. People have many roles. Husband, father, employer, employee. Individuals role are continuing to change therefore marketers must continue to update information. Family is the most basic group a person belongs to. Marketers must understand: o
that many family decisions are made by the family unit
o o
o
o
consumer behavior starts in the family unit family roles and preferences are the model for children's future family (can reject/alter/etc) family buying decisions are a mixture of family interactions and individual decision making Family acts an interpreter of social and cultural values for the individual.
The Family life cycle: families go through stages; each stage creates different consumer demands: •
Reference Groups-Individual identifies with the group to the extent that he takes on many of the values, attitudes or behaviors of the group members. Families, friends, sororities, civic and professional organizations. Any group that has a positive or negative influence on a persons attitude and behavior. Membership groups (belong to) Affinity marketing is focused on the desires of consumers that belong to reference groups. Marketers get the groups to approve the product and communicate that approval to its members. Credit Cards etc.!! Aspiration groups (want to belong to) Disassociate groups (do not want to belong to) Honda, tries to disassociate from the "biker" group. The degree to which a reference group will affect a purchase decision depends on an individuals susceptibility to reference group influence and the strength of his/her involvement with the group.
•
Social Class An open group of individuals who have similar social rank. US is not a classless society. US criteria; occupation, education, income, wealth, race, ethnic groups and possessions. Social class influences many aspects of our lives. i.e; upper middle class Americans prefer luxury cars Mercedes. o
o
o
o
o o o
Upper-upper class, .3%, inherited wealth, aristocratic names. Lower-upper class, 1.2%, newer social elite, from current professionals and corporate elite Upper-middle class, 12.5%, college graduates, managers and professionals Middle class, 32%, average pay white collar workers and blue collar friends Working class, 38%, average pay blue collar workers Lower class, 9%, working, not on welfare Lower-lower class, 7%, on welfare
Social class determines to some extent, the types, quality, and quantity of products that a person buys or uses. Lower class people tend to stay close to home when shopping; do not engage in much pre-purchase information gathering. Stores project definite class images. Family, reference groups and social classes are all social influences on consumer behavior. All operate within a larger culture.
Personal Factor Unique to a particular person. Demographic Factors, Sex, Race, Age etc. Who in the family is responsible for the decision making? Young people purchase things for different reasons than older people. Psychological factors Psychological factors include: •
Motives-
-A motive is an internal energizing force that orients a person's
activities toward satisfying a need or achieving a goal. Actions are effected by a set of motives, not just one. If marketers can identify motives then they can better develop a marketing mix. MASLOW hierarchy of needs!! o o o o o
Physiological Safety Love and Belonging Esteem Self Actualization
Need to determine what level of the hierarchy the consumers are at to determine what motivates their purchases. The product was not selling well, and was almost terminated. Upon extensive research it was determined that the product did sell well in inner-city convenience stores. It was determined that the consumers for the product were actually drug addicts who couldn't digest a regular meal. They would purchase Nutriment as a substitute for a meal. Their motivation to purchase was completely different to the motivation that B-MS had originally thought. These consumers were at the Physiological level of the hierarchy. BM-S therefore had to redesign its MM to better meet the
needs of this target market. Motives often operate at a subconscious level therefore are difficult to measure. •
Perception—
Perception is the process of selecting, organizing and interpreting information inputs to produce meaning. IE we chose what info we pay attention to, organize it and interpret it. Information inputs are the sensations received through sight, taste, hearing, smell and touch. Selective Exposure-select inputs to be exposed to our awareness. More likely if it is linked to an event, satisfies current needs, intensity of input changes (sharp price drop). Selective Distortion-Changing/twisting information, inconsistent with beliefs.
current
received
Advertisers that use comparative advertisements (pitching one product against another), have to be very careful that consumers do not distort the facts and perceive that the advertisement was for the competitor. A current example...MCI and AT&T...do you ever get confused? Selective Retention-Remember inputs that support beliefs, forgets those that don't. Average supermarket shopper is exposed to 17,000 products in a shopping visit lasting 30 minutes-60% of purchases are unplanned. Exposed to 1,500 advertisement per day. Can't be expected to be aware of all these inputs, and certainly will not retain many. Interpreting information is based on what is already familiar, on knowledge that is stored in the memory.
•
Ability and Knowledge-Need to understand individual’s capacity to learn. Learning, changes in a person's behavior caused by information and experience. Therefore to change consumers' behavior about your product, need to give them new information re: product...free sample etc. When making buying decisions, buyers must process information. Knowledge is the familiarity with the product and expertise. Inexperience buyers often use prices as an indicator of quality more than those who have knowledge of a product. Non-alcoholic Beer example: consumers chose the most expensive six-pack, because they assume that the greater price indicates greater quality. Learning is the process through which a relatively permanent change in behavior results from the consequences of past behavior.
•
Attitudes--
Knowledge and positive and negative feelings about an object or activity-maybe tangible or intangible, living or non living.....Drive perceptions Individual learns attitudes through experience and interaction with other people. Consumer attitudes toward a firm and its products greatly influence the success or failure of the firm's marketing strategy. Honda "You meet the nicest people on a Honda", dispel the unsavory image of a motorbike rider, late 1950s. Changing market of the 1990s, baby boomers aging, Hondas market
returning to hard core. To change this they have a new slogan "Come ride with us". Attitudes and attitude change are influenced by consumer’s personality and lifestyle. Consumers screen information that conflicts with their attitudes. Distort information to make it consistent and selectively retain information that reinforces our attitudes. IE brand loyalty. There is a difference between attitude and intention to buy (ability to buy)
•
Personality-all the internal traits and behaviors that make a person unique, uniqueness arrives from a person's heredity and personal experience. Examples include: o o o o o o o o o o o o
Work holism Compulsiveness Self confidence Friendliness Adaptability Ambitiousness Dogmatism Authoritarianism Introversion Extroversion Aggressiveness Competitiveness.
Traits affect the way people behave. Marketers try to match the store image to the perceived image of their customers. There is a weak association between personality and Buying Behavior; this may be due to unreliable measures. Nike ads. Consumers buy products that are consistent with their self concept. •
Lifestyles-Recent US trends in lifestyles are a shift towards personal independence and individualism and a preference for a healthy, natural lifestyle. Lifestyles are the consistent patterns people follow in their lives.
The marketer must be aware of these factors in order to develop an appropriate MM for its target market. 1.1
What is Marketing?
Marketing on the one hand is a business philosophy and on the other an action oriented process. The philosophy - also termed as marketing concept - has its roots in market economy. There are four critical ideas that form the foundation of such an economy: Individuals pursue their self-interest to seek rewarding experience Their choices determine as to what would constitute such experience, the choices themselves being shaped by personal (taste) and external (cultural) influences. Consumers enjoy the freedom to choose; they are sovereign.
This freedom ensures free and competitive exchange between “buyers and sellers”. Marketing in turn is based on these four principles. Thus Marketing can be defined as a ‘Process that aims at satisfying individual and organizational needs by creating, offering and exchanging competitively made products that provide value to the buyers’ Today our focus is on customer. Objectives liken revenue, profit, market share, etc. Re important, but they will flow only by acquiring customer competence. In our country particularly the customer, even as late as in 1980s, was bereft of alternatives; he would uncomplainingly buy whatever the seller dished out. Not any more. Today’s choice empowered customer, supported by a competitive environment, global quality, and new economic realities, decides the fate of the marketer. So let’s define Marketing once more: “It is a total business philosophy aimed at identifying the needs of each customer group, then designing and producing product / service package so as to serve the groups more effectively than the competitors”. This definition reveals three key dimensions of marketing: · It seeks to identify customer needs: Many manufacturers would know all there is to know about relevant production technology, but nothing about their customers’ wants. They may design products with fancy features without considering the perceived value of such features to their buyers. Then they wonder why their sales staff fails to push the product in the market.
Marketing attempts to select customer groups for which it can develop a competitive edge: · Companies taking a shotgun approach - meaning all things to all people - inevitably end up with sackful of unsold product inventories. What is Consumer Buying Behavior? Definition of Buying Behavior: Buying Behavior is the decision processes and acts of people involved in buying and using products. Need to understand: • • •
Why consumers make the purchases that they make? What factors influence consumer purchases? Changing factors in our society.
Consumer Buying Behavior refers to the buying behavior of the ultimate consumer. A firm needs to analyze buying behavior for: • •
Buyer’s reactions to a firms marketing strategy has a great impact on the firm’s success. The marketing concept stresses that a firm should create a Marketing Mix (MM) that satisfies (gives utility to) customers, therefore need to analyze the what, where, when and how consumers buy.
Marketers can better predict how consumers will respond to marketing strategies. NEED OF THE STUDY – There are different national & international products present in India. So to identify the customer & their buying behavior have been the focus of a number of international and national product. The
result of these studies have been useful to the provide solution to various marketing problem. Understanding buying behavior pattern per se is not enough without understanding the composition and origin of the customer. Today most of the Indian customers are attracted by the imported goods because of their high quality. So that most of the Indian company product looses their credibility and loyalty in domestic customers. So the objectives of the study are – 1. How can we stand out in a highly competitive market where consumer have so many choice?. 2. How we can provide best loyalty to our customer while earning a fair profit? 3. How can we grow our business while retaining a core of the loyal customer?
BACK GROUND: A major area of concern in marketer-consumer relation is the growing influence and utilization of the credit market, an outcome of compulsive buying, which has negatively affected the consumers, leading them to unmanageable debt levels. A study to find whether there is any association of the following variables on compulsive buying viz, big five Personality traits, materialism, demographics and credit card usage. The research design is a conclusive design which is single cross sectional descriptive in nature. The primary data was collected using non probability sampling technique. A quota sample of 120credit card holders (using credit card/s above one year) was chosen.
The respondents in aggregate ‘neither agree nor disagree’ to materialism and have ‘rarely’ compulsive buying. The respondents ‘moderately agree’ that they are high enhanced credit card spenders, but at the same time they ‘rarely’ indicate compulsive buying, which is a positive outcome. They ‘disagree’ to high credit card financing behavior, which again exposes to the fact that they ‘spent and finance their spending’ cautiously, keeping track of mental account4 as a self control device against environmental factors, like retailing environment, availability of credit and so. Emotional stable extroverts tend to have a steady spending behaviour and external influences do not impact much, is true in this study. Twelve percent of respondents have ‘high credit default probability’, with a score between 5 to 10on the scale. The emergence of relationship in some cases is as supported by literature from previous studies at the same time poses a challenge before the researcher to take up complicated models (like structural equation modeling) to possibly explore a new direction to the nature of relationships.
CHAPTER (II)
RESEARCH METHODOLOGY
OBJECTIVE OF THE STUDY The systematic and objective identification, collection, analysis, dissemination, and use information for the purpose of assisting management in decision making related to the identification and solution of problem and opportunities in marketing. When an industry comes in the competitive market then the main problem comes in front of him is, how can survive in the market. For this purpose they have to
know about their production process, employment process, distribution process, consumer needs and consumer behavior. The main purpose of the industry is to satisfy the consumer needs. Their all function rounds around the customer, they try to know the behavior of the customer and fulfill their goal and to know about the customer’s behavior they do marketing research. In this era the marketing research is the basic part of the industry. Marketing research include the evaluation of the organization’s all functions like their production, manufacturing, distribution, marketing , financial and human resources. We can say it is the internal research of an industry. There are some external factor which affects the growth of the organization like customer behavior and the political, technological, economical, and legal environment. And the most important factor is consumer buying behavior because this factor is responsible for the utilization of the product and ultimately sells of the product. So industry also needs the research on the consumer buying behavior. When we do the research on the consumer behavior we should know the entire factor which affects the consumer buying behavior. Social environment, education, culture and traditions, income, society are the factors which affect the buying behavior of the consumer. We can also divide it into geographic, demographic, psychological factor. The main objective of this study are – To under stand why customer buy a particular product. To know the marketing opportunities. To know about customer acceptance of the product. To analyse the customer expectation from the manufacturer. To help the company to know what consumer want in the product.
Why consumer prefer imported goods instead of indigenous goods. In the marketing research we firstly design our research. Our research can be Descriptive, explorative and casual research design. Casual research design is based on survey and observation. In this research process we are selected descriptive research design.
RESEARCH METHODOLOGY Research problems: To study buying behavior of consumer for indigenous and imported products. Data source: Primary data and secondary data Research approach: Survey approach Research methodology: Exploratory method Research Instruments: Questionnaire
SAMPLING PLAN Population Definition Sample: Malls ,Super Mark
Extent: Delhi/NCR Sample Methods Sample size Primary data
Random Simple Sampling 75. Questionnaire and Interview SAMPLE
While deciding about the sample of research, it is required from the researcher’s point to pay attention to these under mentioned points: a) Sample Units: A decision has to be taken concerning a sampling unit before selecting a sample, sampling unit may be a geographical one such as state, district, village Etc. so in this research sampling unit is Delhi/NCR. b) Source list: It is also called sampling frame from which sample is to be drawn ,it caters name of all the items of a universe (in case of finite universe only).Researcher has to prepare it c) Sampling size: This refers to the no. of items to be selected from the universe to constitute a sample. This is a major problem before the researcher. The size of sample should neither be excessively large not too small, it should be optimum. This size of population must be kept in view for this also limits the sample size .Sample size in this research is 75 customers. d) Sampling procedure: Finally the researcher must decide the type of sample he must be .That is he
must decide about the technique to be used in selecting items for the sample .In fact this technique or procedure stands for the sample design itself. In this we used the random sampling on the basis of first survey results, which is from 75 respondents. INSTRUMENTS USED We collected primary data through sample survey or census surveys from the selected elements in malls and super markets. So for this purpose we have used the most popular tool of primary data collection through direct communication with respondents. The tools we used are questionnaires. Source of data: Data required for the study was collected through primary sources i.e. Market Survey. METHOD OF DATA COLLECTION Actually data is of two kinds so researchers should keep in mind both types of data. a) Primary Data: Primary data are those, which are collected afresh and for the first time and this happen to be original in character. b) Secondary Data: Secondary data are those data which have already been collected by someone else and which have already been used as per required. There are basically two sources to collect secondary data a) Internally: Provided by the company/organization
b)Externally: Various publication of central, state and
local Government. • Books, magazines, newspapers • Internet After only keeping in mind one can think about what type of data has to be collected during research as our research is concerned we have to gather primary data for Customer behavior
QUESTIONNAIRE This method is more popular .The questionnaire is sent to the person concerned to answer the questions formatted and return the same soon. A Questionnaire consists of a number of questions printed or typed in definite order on a form or set of forms. The Questionnaire is sent to the respondents. In order to achieve the research objective it is necessary to collect accurate and relevant data, secondary data are already published data collected for purposed other than the specific research needs at hand. Primary data that are collected specifically for the research situation at hand, were collected by surveys ,using respondents surveys is one of the ways of collecting primary data namely observations, experiments and surveys .
Limitation Every project faces some limitation; because of this limitation the required And necessary data to complete the project may not gather in proper manner. The limitations which we observe were as follows: • With respect to actual population the sample size was too small. This might be effect the final result. • Since the responses were only from some part of Delhi, the report cannot be generalized for whole Delhi and NCR. • Respondents may have given bias information. • The time limit for the research was one week that was small time to collect adequate information for inference for the consumer buying behavior. Discussion As our project title is to find the market behavior of the customer buying a Indigenous and International product. Accomplish this project and to make report .we survey all type of customer behavior in the market. We gather data and after data analysis, we conclude that the market behavior of the customer bases on the buying Indian and
International product. At a present time mostly customer like a style and social status and brand conscious in the society.
CHAPTER (III)
Descriptive Study
Descriptive Study Indian market is one of the fast booming market in the world. It attract most of the Indian and international company towards them. Due to the globalization most of international branded company inter in the Indian market and increase the competition between them. There are different international competitor which are present in the Indian market like Lee, Cotton Country, Cantabile, Mc Donald, Dominos, Elle etc. These company try to attract most of Indian customer. Most of the Indian people prefer imported garment because they think imported company provided better
look and they charge lower prices but in the case of food and cosmetic they prefer indigenous food and cosmetic. Food and Grocery – In a country where there is a grocery shops at every street corner and a vegetable and fruits vender near each bus stop. How can organized retail of food become feasible. A successful retailers seem to have just one option, offer attractive price to the consumer. A successful retailer wining edge will therefore come from souring how best it can leverage its scale to drive merchandise costs down increase stack turn and get better credit terms from its vendors. There are obvious and hidden areas where costs are pruned and the benefit of this lower costs of retailing can be passed on to customers as lower prices which is turn should fuel demand. The food supply chain in India is fuel in efficiencies a results of inadequate infrastructure, too man middlemen, complicate, lows and an indifferent attitude. There is little doubt that food retailing has immense potential. During the course of this researches EITG spoke to several players, national and international in the food retail business. There are different types of food retail store are available in india market. They serve different types of indigenous and international food to their customer. Different types of indigenous food retail store are – • Food Bazaar • HaldiRam • Bikaner And the international retail stores are – • Mc Donald’s • Dominos • Barista • Pizza hut • Nescafe
These are main player in the food market. These food retail stores have captured most of the Indian market but still more Indian customers like to eat indigenous food. They want to have local food, that’s a main reason that most of the food retail store emphasize on local market and they serve according to their taste. For example Mc Donald’s franchisees say they think the new coffee drinks will be particularly helpful in drawing young consumer who will prefer them to drip coffee. India’s largest publicly traded retailer, Pantaloon Retail Ltd. will make its formal entry into the gourmet food business with its Gourmet food Bazaar targeting those Indian with a global palate and a wallet to match. Pantaloon will open the first 4,500 sq. ft store in select city walk mall, an upscale new shopping mall in south Delhi very soon. Pantallon is going to enter this in category with store in New Delhi, Banglore and Mumbai. “We believe in food. Also there is the customer that is ready for more lifestyle shopping, more branded item, and more international cuisine” said Damoder Mall, who heads the company’s ventures into new businesses. The company operate in various formats including department stores and hypermarkets and runs a supermarket chain called Food Bazaar that sells discount food items from potato to pasta. Mall decline to say how many gourmet stores the company plans to open. A resent report by consultant Ernst and Young says Food and Grocery constitute almost 54% or $ 152 billion of India’s total annual retail business but modern retailers account for just 1% of market . A growing number of organized retailers in India have plans to target the food market and are opening thousands of grocery stores though out the country in coming years. Mumbai based Hyper city Retail Pvt. Ltd. Is also planning to launch Gourmet city next year. Hypermarket which runs a hypermarket in Mumbai’s western suburb of Malad, has a counter for imported cheeses, handmade chocolates, cold ,cuts, marinated meats, a bakery and stocks gourmet food form British supermarket Cahin , whitrose.
Godrej Agrovet Ltd also recently relaunched some of the stores in its Nature’s Basket supermarket chain to stoke a rang of imported food products include wine, organic pasta, wasabi, hagenDaz ice cream etc. Gourmet food Bazaar plans to stock Indian as well as imported food products in the store. “There will be live bakers, lots of cheese, sandwiches, there will be a salad bar and many imported foreign brands will be there Mall said.” The future Group, Pantaloon’s parent, also recently took a stake in sula wines, a domestic wine company and now stocks Sula wine at some of its Food Bazaar store. So if we summarise whole thing we can say Indian retail market is most booming industries in the country. Most of the Indian company are interested in food industry. But according to our sarvey most of the Indian people are like indigenous food. Indian food has become too much popular in the United Kingdom over the past decade and a large number of Britons now prefer to eat out at Asian restaurants, according to a study. Sales of not only Indian but also other Asian dishes like Chinese and Thai have increased 36 per cent between 2001 and 2006. Overall the fast food industry has increased its sales by 73 per cent between 1995 and 2005, the study says. "Food is now a key part of our leisure time and we are eating out more often. It is no longer unfashionable to cook but this trend can be at odds with desires for convenience or intentions to make ethical or healthy choices. "The popularity of convenience food snacking and eating out has led to concerns about the demise of the family meal as well as a decline in knowledge and skills about food (but) the majority of family meals are still eaten together. "Even in single person households, eating remains a social activity with young single people tending to invite people to dinner more
often than their married counterparts," 'The Guardian' quoted the government study of British eating habits as saying. However, it has played down reports that Britain is not only becoming a nation of scoffers but also getting dangerously dependent on food from abroad. According to the study, Britain now imports 40 per cent of the country's food, significantly more than 10 years ago when the European Common Agricultural Policy (CAP) rewarded farmers for production. "But we used to import far more between 1870 and 1939. The very high self-sufficiency of the 1980s and 1990s was unusual -- an artifact of the CAP. Europe is expected to provide most of our future imports for the foreseeable future," the study says.
GarmentThe end of trade restrictions should generate unprecedented business for developing countries - including, Bangladesh, China, Hong Kong, India, Indonesia, Korea, Pakistan, Philippines, Sri Lanka and Thailand. In practice, China is likely to run away with the gold and silver prizes, leaving the other countries to fight over the bronze. The key will be volume-driven efficiencies combined with design capabilities and flexibility in manufacturing. These are the factors that have catapulted China into the biggest clothier of the world. Not only did the quota regime protect high-wage Western companies, the way in which it was administered in India, it also cocooned many low-wage Indian producers who were assured of business without being really competitive. It worked like this: a
country, say, China, could not export more than a certain number of pieces to the US in a year - even if Americans preferred to buy Chinese stuff for cost or quality reasons. That gave the opportunity for less competitive players from other counties to sell their wares in the US. "Quotas afforded the comfort of assured business to manufacturers and to those who held a quota, and this imparted a sense of stability," says Rahul Mehta, managing director of Creative Outerwear Ltd, part of the $55-million-turnover Creative group of companies, among the biggest Indian garment exporters. He adds: "Even inefficient manufacturers got quotas, which assured them business, and flab crept in," he adds. Often quotas were obtained merely for the premium, and someone else did the manufacturing. The Indian textile industry clearly has many advantages. India is one of the biggest cotton producers in the world, it has a huge market, which creates the opportunity to exploit economies of scale, it has cheap skilled labour, and it has plenty of design skills. Still, the country's garment industry suffers from many structural weaknesses, unlike China's. Till recently Indian law decreed that garment manufacturing should remain a small-scale activity. The result: even today 80 per cent of the country's garment makers operate from tiny outfits with less than 20 machines per unit. A 2003 survey by the Confederation of Indian Industry, Introspecting Competitiveness of the Textile Sector, reveals that only 20 per cent of the manufacturers in the Rs28,000 cr. garment sector (with seven million workers) constitute the organized sector. Currently, 75 per cent of the readymade garment exports, according to CMAI, are to the quota countries.
In the post-quota regime, competition from China, Hong Kong, and other low-cost countries with huge capacities, will force Indian manufacturers to compete on productivity, quality and cost, which require not just skill but scale and technology. To survive the competitive onslaught, size will be a key determinant. The industry will have to transform its unorganized, small-scale character to become large, organized and capable of high-cost investments in modern, high-speed equipment. The garment industry being a small scale industry, not surprisingly, when India's overall quota was distributed among exporters, the allotments were skewed in favour of small units. Until the late 1990s, with 80 per cent of garment production coming from smallscale units and 70 per cent of the quota being distributed on the basis of 'past performance entitlement' (PPE) manufacturers had no reason to expand their operations or invest in expensive equipment. Those who did grow did so by more small-scale units, usually making a separate garment category. Another 15 per cent of the quota was reserved for allotment on a 'first-come, first-serve entitlement' (FSFSE) for manufacturers with a turnover limit of Rs5 cr.. This again blocked large manufacturers from quota entitlements. With the quota system being scrapped from 1 January 2005, leading garment manufacturers can now begin consolidating and expanding their capacities. Even the larger of the existing small-scale export manufacturers, freed of the compulsion to create small satellite units to acquire a larger share of the prized quota, are now expanding capacities to achieve economies of scale. The Government's own efforts are now aimed at undoing some of the earlier policies to encourage size and competitiveness. Recognizing the threats of global survival post-MFA, it has embarked on the role of an industry-friendly facilitator, with policy measures that would help exporters.
• • • •
•
•
Garments have been removed from the list of industries reserved for the small-scale sector Machinery import duty has been reduced to a nominal 5 per cent Excise duty has been reduced sharply A textile upgradation fund scheme (TUFS) has been introduced to provide a reimbursement of 5 per cent interest on loans or finance charged by the lending agency on a bankable project of technology upgradation. The central value added tax (CENVAT) network has been extended to all players in the handloom, powerloom and organized sectors. The small-scale industry excise duty exemption up to Rs1 cr. has been removed.
In the meanwhile, another issue that requires resolution is the state of poor infrastructure in India. Overseas buyers and domestic suppliers all have their own horror tales of delayed shipments due to the deplorable congestion at Indian ports, the sordid condition of roads from the manufacturing centers to the shipment points leading to consignments stranded in broken-down vehicles, traffic choke-up at the numerous octroi collection centres â none of which seem as acute in countries with whom India will compete post quotas. India also has an advantage of being the third largest cotton producer, which lends itself to lower freight cost and shorter lead times. Since the country also produces a variety of cottons, it provides greater flexibility, to meet varied requirements and arbitrage opportunities. The per-unit cost in India is currently higher than in China but India has the ability to counter the Chinese cost dragon through:
•
•
•
Amalgamation of manufacturing units and high technology equipment to ensure economies of scale and lower unit prices. Mark-ups of 20 per cent to 25 per cent of the FOB prices, arising out of the odious 'premium cost' to acquire quotas from those who had them, which disappears with the abolition of quotas. Reforms to reduce the 'hidden costs' - import licence, inland freight movement, octroi malpractices, etc.
Labour cost, as a percentage of manufacturing cost in India is already lower than in China and all India needs is to achieve higher manpower productivity. That, of course, is easier said than done. Major Indian companies are already expanding their capacities in order to avail of economies of scale. Gokaldas Exports, India's top garments exporter, has added eight factories in the past two years larger and more modern in terms of technology and infrastructure. Gokaldas now has 41 factories with a workforce of 31,000 - up 30 per cent. Orient Craft, with 18,000 people on its rolls, is also adding 30 per cent capacity, with three new factories this year and two in 2005.In India, 95 per cent of garments makers have annual sales of less than Rs50 cr.; and of the 16,000 export manufacturers, only around 100 companies are able to cross the Rs100-crore sales level per annum. The value of Indian garment exports was Rs28,000 cr. ($5.4 billion) in the last fiscal. To achieve exports of $25 billion by 2010, India would have to expand its manufacturing capacity five-fold; expansion of 30 per cent by top players will just not suffice. Harminder Sahni, associate director, KSA Technopak , however, is quite optimistic. "China is no doubt a very large player, but most of the customers feel over-bought in China and hence are very keen on having a second source of supply. So it is more like China and
India in most cases. Also, US buyers are dominant in China, so EU buyers are keener on being dominant in the Indian subcontinent.". Anyway India, with its closer proximity to Europe, has traditionally enjoyed a larger export share to the EU countries.
The world market share In spite of the Chinese dominance, India has a fair opportunity to grab a substantial stake in the projected garment market share. According to PHD Chamber of Commerce and Industry (PHDCCI), post-MFA, India's market share in the US is expected to go up to 15 per cent from the present 4 per cent. In the EU, the market share increase is expected to be 50 per cent - from the current 6 per cent to 9 per cent. In the more competitive and experienced world fashion markets, buyers well understand the need for geographical de-risking - the SARS breakout in China early this year affected the apparel industry severely, sending buyers to build linkages with India, Hong Kong and others. Besides, there have been incidents of terrorist attacks, hurricanes and earthquakes, which can disrupt supply management and hence the 'need' for better geographical diversification. For most buyers China may be the first choice for many, but India comes a close second. MK Panthaki, director, Clothing Manufacturing Association of India, says, "Whether these countries will oblige China in the post-quota regime is a moot question."
India fails to satisfy the requirement of the fall / autumn-winter season, when the demand for cotton fabric dips. The wool output from the country is of low quality as the shearing and breeding of sheeps and goats is not scientific. Though Reliance Industries is the world's biggest polyester maker, synthetics account for just 14 per cent of India's exports. To balance its exports between its peak spring-summer peak demand periods, India needs to diversify into synthetics and wool. Garment manufacturers require more than production efficiencies to survive in the years ahead. They need professionalism to undertake hard-core marketing, focused and consistent positioning, and most of all, a keen understanding of fashions and trends to cash in on the advantage of competing in a world without quotas. According to our survey most of the Indian people prefer imported garment because they think imported garments provided better look at a cheaper rate. In India there are different imported brand are available like LEE, CANTABAIL, COTTON COUNTRY, COUNTY LONDON etc. This is important. While the potential to grow is immense, companies have to realise that consumers are knowledgeable and a fancy name alone is not enough. Until the market perception of the textile industry changes or the companies promote a different image, returns will not materialise from an investment perspective regardless of the market's potential to grow.
COSMETICThere are different indigenous and international brands are present in Indian market. Indian brands are-
• Hindustan Uni Liver • Shehnaz Husain • Ayur And international brands are – • GARNIAR • ELLE Indian people are spending most of the money on the Indian cosmetic brand. In India there are many beauty parlor of women and men and they charge a very high prices. But most of the Indian people think international brand are most costly and most of the international brand are shutted to Indian people that’s a main reason mostly Indian people prefer Indian cosmetic product. Indian market is one of the fast booming market in the world. It attract most of the Indian and international company towards them. Due to the globalization most of international branded company inter in the Indian market and increase the competition between them. There are different international competitors which are present in the Indian market like Lee, Cotton Country, Cantabile, Mc Donald, Dominos, Elle etc. These companies try to attract most of Indian customer. Most of the Indian people prefer imported garment and cosmetics because they think that imported company provided better look and they charge lower prices.
CHAPTER (IV)
Data Analysis & Interpretation
DATA ANALYSIS Table No 1 :- Persons like to go for shopping
Category
No. of Respondent
Percentage of Respondent
Super Market Mall Traditional Shop e-Shopping
17 30 11 12
24% 43% 16% 17%
GRAPH 1
Persons like to go for shopping
12
E- S HOP
11
TRAD S HOP
E-SHOP TRAD SHOP MALL 30
MALL
SUP MRKT
17
S UP MRKT
Interpretation: - At a present time mostly customer like went to the mall (43%) and customer second preference a super market (24%) and third preference equally e-shopping and traditional shopping (16%). Table No 2 :- No of visit
Category
No. of Respondent
Percentage of Respondent
During Weekend Monthly 15 – 20 days Rarely
27 20 12 11
36% 30% 18% 16%
GRAPH 2
No of visit
30 20 10 0
WEEKLY MONTHL 27
15-20
RARELY
12
11
20
Interpretation: - Customers behavior went to for the shopping in the mall, e-shopping, super market and traditional shop. only 36% customer want go to the daringly and 30% customer monthly and 18% customer 15-20 days and 16% customer rarely go for shopping. Table No 3 :- Are you brand conscious
Category
No. of Respondent
Percentage of Respondent
Yes No
47 23
67% 33% GRAPH 3
Brand Conscious
NO 33% YES 67%
Interpretation:- 67% customers said that we are a brand conscious and only 33% customers not like a brand means that he is not depend on branded product.
Table No 4 :- Satisfied with the brand available in market
Category
No. of Respondent
Percentage of Respondent
Yes No
60 10
86% 14%
GRAPH 4
Satisfied with the brand available
70 60 50 40 30 20 10 0 YES
NO YES
NO
Interpretation:- In the market 86% customers said that branded product easy available in the market and 14% customer said that not easy available in present market.
Table No 5 :- If yes you prefer
Category
No. of Respondent
Percentage of Respondent
National Brand International Brand
60 10
86% 14%
GRAPH 5
Yes you prefer
36
NATIONAL BRAND
34
33
33.5
34
34.5
NATIONAL BRAND
35
35.5
36
36.5
INTERNATIONAL BRANR
Interpretation:- Customers behaviors buying for the National and International product mostly like buying a National product as 86% and only 14% customers like buying a International product.
Table No 6 :- Favors in liberalization for easy availability of imported goods
Category
No. of Respondent
Percentage of Respondent
Yes No
59 11
85% 15%
GRAPH 6
Easy availability of imported goods
60 50 40 30 20 10 0
YES
NO
Interpretation:- 86% customers said that in the market easy availability of the Imported product.
Table No 7 :- Parameters effect buying decision
Category
No. of Respondent
Percentage of Respondent
Quality Price Easy availability National/State
35 15 19 1
50% 22% 27% 1%
GRAPH 7
Parameters buying decision
1% 27% QUALITY EASY AVAILABILITY PRICE NATIONAL/STATE
51%
21%
Interpretation:- In the market customer behavior on the bases of the buying product mostly people prefer a quality as 51% and other 49% people buying on the bases of easy availability and price, only 1% people like a national/state. Table No 8 :- Type of garments prefer Category
No. of Respondent
Percentage of Respondent
Imported Indigenous
28 42
40% 60%
GRAPH 8
Type of garments
IMPORTED
INDIGENOUS
0
10
20
30
40
50
Interpretation:- In the garments sector mostly like a Indigenous product, Out of the total customer only 40% customer prefer a International product because International garments product price high compare to the Indian garments product. Table No 9 :- Type of food prefer Category
No. of Respondent
Percentage of Respondent
Imported Indigenous
10 60
14% 86%
GRAPH 9
Type of food
70 60 50 40 30 20 10 0 INDIGENOUS
IMPORTED
Interpretation:- Mostly customer behavior like a Indigenous food. Out of the total customer 86% customers prefer the Indigenous food and only 14% customer prefer a International product.
Table No 10 :- Type of cosmetic prefer Category
No. of Respondent
Percentage of Respondent
Imported Indigenous
28 42
40% 60%
GRAPH
Type of cosmetic
50 40 30 20 10 0
INDIGENOUS
IMPORTED
Interpretation:- In the market 60% customer prefer a Indian cosmetic product and only 40% customer like a International cosmetic product. Table No 11 :- If you prefer Indigenous product/brand what else can be done to make them comparison with International brands? Ans -
Quality base and Price base.
Table No 12 :- If you prefer indigenous goods what fascinates towards them? Ans -
Easy availability and Service.
CHAPTER (V)
Conclusion & Suggestion
Conclusion
As the research has shown the comparison between customer buying behavior regarding Indian and International product in recent time. Since the consumer buying behavior is the important factor to forecast the sales of any product in a particular area. So company should keep close eye on the market situation. yet, customer were price sensitive, but the
changing
market trend and customer view and preference
shown that
customer are now quality sensitive .They want
quality product, good services, easy availability of product and better performance by the product. These days no of customer buying from malls has been increased. Also the frequency to visit the malls has been increased substantially. People are more brands conscious and they are satisfied with the range of products available there. We can conclude from our study that still more inclination is towards indigenous product the preference ratio of indigenous to imported products is 6 : 4.This is because of the relatively higher price of imported product.
Suggestions i.
Customer like best quality product on any price, so company should add latest technology to their products.
ii.
After sales services is the area where Indian and International Company can highly satisfy the existing customer, because they can make more customer through their word of mouth.
So Indian and International Company should provide latest and reliable service to their customers. iii.
Customer’s behavior always looks for some extra benefit with purchasing. They demand for affordable price for product and gifts with purchasing.
iv.
International Company should make strategy to cater every income group customers in city. Upper income group are affordable to purchase but lower income group is not. So International Company should make policies to send their product and every home.
v.
The Indian company should give more emphasis on advertising to create market awareness and to make a brand image in the minds of investors.
vi.
The International Company should do more publicity through road shows, newspaper and advertisement. As this will create awareness about he fund and schemes that are at present managed by the International Company.
vii.
They should keep a close eye on competitor strategy.
Bibliography News paper: -
The Economic Times. Business Standard.
Journals: -
Business World, Business Today.
Website: -
www.wikipedia.com www.rbi.com
Book: -
Kotler Philip , Principle of Management Khothri C R , Research Methodology
Appendices Questionnaire on Customer survey Topic:-Buying behaviors consumer International & Indian product. Name: Age/sex: Profession: 1. Where do you like to go for shopping?
a) Super market shopping.
b) Mall
c) Traditional shop
d) e-
2. How many time you like to visit this place? a) During weekends b) Monthly c) 15-20 days d) rarely 3. Are you brand conscious? a) Yes b) No 4. Are you satisfied with the variety of brand availability in the market? a) Yes b) No 5. If yes you prefer? a) National brand
b) International brand
6. Are you in favors of liberalization for easy availability of imported goods? a) Yes b) No 7. Which parameter/s effect you’re buying decisions? a) Quality b) Price c) easy availability d) national/ state 8. Which type of garments you prefer? a) Indigenous b) Imported 9. Which type of food you prefer? a) Indigenous b) Imported 10. Which type of cosmetic you prefer? a) Indigenous b) Imported
11. If you prefer Indigenous product/brand what else can be done to make them comparison with International brands? ……………………………………………………………… ………………………………………………………………… 12. If you prefer indigenous goods what fascinates towards them. …………………………………………………………………. …………………………………………………………………..
