FMCG

Effect of branding in purchase in purchase of FMCG products
Page 1

CHAPTER-1
INTRODUCTION


Page 2

Section-A

INTRODUCTION TO FMCG:
As we are approaching to the twenty first century the FMCG product
market is growing like a money plant in this world. Not only
companies are gaining huge profit from these product sources but
these products are also one of the main ingredients in our day today
life. So the customer has to think and decide on the products which he
is going to purchase because of the availability of the choices
replicates variants in every section of the products.

Now a days customer has a wide variety of choice while selecting
FMCG, producer has to add additional values to the product that the
product continues its presence in the market. Different factor
governing the customer based on different product category like milk
products, beverages, prepared dishes, Chocolates & Confectionaries,
personal care and
Fabric care etc.

This minor project consist of the response of different age group
respondents who specifies their predetermined factors which drives
them while purchasing the factors which drive them to buy the
products are as under, Price, Availability, Brand name, Quantity,
Quality, Packing, advertisement.

Through this we can understand that the customers in the current
scenario not only purchase the product based on the one quality that it
contains. But they carefully analyze it and then go for the
purchase. So knowing the customers attitude is important and what
are the factors they considered when purchasing a product
So by this project we can come to know the effect of branding on
consumer while purchasing a FMCG product & Durable goods.

Page 3

FMGC-Fast moving consumable goods
Meaning:
A type of good that is consume every day by the average
consumer. The goods that comprise in this category are ones that
need to be replaced frequently, compared to those that are usable for
extended periods of time. FMCG refers to those retail goods that
generally replaced or fully used up over a short period of days, weeks
or months & within one year.

Main characteristics of FMCGs:
From the customers perspective :
a) Frequent purchase.
b) Low in investment (price).
c) Low in involvement (Little or no effort to choose the item).

From the marketers angle :
a) High volume.
b) Low margin.
c) Extensive distribution network.
d) High Stock turnover.


Page 4

BRANDING:
American marketing Association defines a brand as, a
name, term, symbol or design or a combination of them which is
intended to identify the goods or services of one seller and to
differentiate them from those of the competitors.

Functions/Objects of Branding:
1. It helps in product identification and gives distinctive to a
product.
2. Indirectly, it denotes quality or standard of product.
3. It estimates imitation.
4. It helps in advertising and packaging activities.
5. It helps in price differentiation of a product.
6. It facilitates in making a choice.
7. It helps in create and sustain brand loyalty to a particular
product.
8. It is essential for competition, because without a means for
identification, there is no way of making choice.


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Advantage of Brand Name & Advantages to
manufacturers:

1) Product differentiation

Product differentiation by branding enables the
manufacturers to establish their own price and eliminate price
competition to some extent.

2) Brand Image

The seller can build up a bright image of his product
around the brand. A brand image id built up through the
years by quality of products produced, services offered and
the companys reputation, policies and marketing efforts.

3) Creation of market

Ever increasing competition leads to branding of product
by a manufacturer to face competition and create exclusive
market for the product.

4) Advertisement and publicity

Branding helps advertising, display and sales promotion,
branding and packing go hand to hand.

5) Brand Preference

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Branding not only gives separate identity and easy
recognition to the product. But it also creates special brand preference
and brand loyalty.

6) Brand patronage
Branding helps advertising, display and sales promotion,
branding and packaging go hand to hand.

7) Expanding the product mix

Many successful multi product firms today began with
the single product whose success created on umbrella which
additional product could be launched with the less risk.

Advantages to customer:
1. A customer has an assurance of quality and consistency in the
product attributes being offered.
2. Certain brands provide status and psychological satisfaction to
the consumers.
3. There is considerable saving of time and energy in shopping for
goods.
4. Rapid sales turnover assures fresh due to frequent replacement
of stock with the retailer.


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CONSUMER BEHAVIOUR
We start with the definition of consumer Market. A consumer
Market can be defined as all the individuals and households who buy
goods and services for personal consumption can be said to be part of
the consumer market.
Consumer Behavior is defined as All psychological, social
and physical of all potential consumers as they become aware of,
evaluate, purchase, consume and tell others about products and
services

Nature and Characteristics of Indian consumers
Philip kotler has rightly said Market may be defined as a
relationship between consumer and producer occurring at a time place
and at a value mutually agreeable and acceptable to the concerned
parties. It is the responsibility of the marketing system to discover
and serve the market demand. It provides the vital link in connecting
production (supply) and consumption that will ensure a desired
standard of living in an economy.
It is important for marketers of Indian firms also to understand the
Indian market and its characteristics so as enable them to take crucial
marketing decisions related to products, price, promotion and
distribution. This will help in matching company products with
consumer needs.

Nature and Characteristics of Indian consumer
1. Geography

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2. Population
3. Urban-Rural composition
4. Sex composition
5. Age factor
6. Literacy level
7. Income level
8. Linguistic diversity
9. Religion
10. Dress, food, habits and festival

Geography:
India ranks seventh in the world in terms of size. There are also
various regions namely great mountain zone, Indo Gangetic plain, the
desert regions. Climate in terms of temperature is also varied.
Temperature in extreme north is low as compared to the south and
north regions.
Population:
India is one of the worlds highly populated countries. Further,
the distribution of the population is also unequally divided amongst
the states of India. Related to density of population also there is
diversity among the different regions/states depending upon
topography, climate and level of economic development. Knowledge
about the density of population will help the marketing executives in
developing appropriate priorities and alternative marketing strategies.

Urban-Rural Composition:

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About 80% of Indias population is rural whereas 20% is
urban. However, post independence period has seen a gradual
shift of people towards urbanization. During the period, the
urban population increased almost four times whereas rural
population could only double itself. This rate of increase in
urban population has been more pronounced in the states of
Gujarat and Maharashtra mainly. This shift towards
urbanization is mainly due to seeking of better job prospects,
higher income and consequently better standard of living.
This urban-rural feature will have a bearing on the consumption
pattern of the consumers.

Sex Composition:
With increasing education, the role of women has undergone
significant changes. The profile of women has changed from that of a
housewife to a working woman. Today, the urban housewife is an
active partner and plays a major role in the purchase decisions. In
India the sex composition in most the states consists of more males
than females except in Kerala where it is the other way round. This
knowledge of sex composition will help the marketer to understand
the market better and work out strategies to design suitable
promotional techniques for each gender.

Age:
This is another important factor to be kept in mind while
segmenting the market so that suitable marketing strategies may be
developed. On account of wide exposure to various communication

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media like television, private channels, magazines, etc., children are
also participating in buying decisions related to their clothes, toys,
books, books, etc.
An analysis of the Indian consumer will not be complete
without a mention of the urban teenagers and youth market. They are
more modern, careless for tradition and religion. They have an
inclination towards the western culture and are quick to seek novelties
new fashions.
Literacy Level:
Depending upon the level of literacy amongst the target
consumers, the marketers will have to design a suitable
communication mix for promotion of a product or service. According
to 1991 census, the nations average literacy rate is 52.11 Crore
literacy among males was 63.86% while among females it was
39.42%. With the efforts of government continuing to bring down the
level of illiteracy in the country, there should be an increase in the
level of literate consumers in the coming years.
Thus the literacy level goes a long way in shaping consumer
demand by influencing the tastes, Living standards and aspirations of
people.

Income Level:
Income level, (money to spend or purchasing power)
purchasing power or income has a direct effect on the potential
demand for the product. Income levels can be analyzed on the basis
of two income concepts, namely (a) disposable income(income minus
taxes), (b) discretionary income, which is the income left after paying

Page 11

taxes and meeting expenses related to food clothing shelter and the
other necessary items.
Income, credit and assets are objective elements of our
purchasing power. However, economic ability must be combined with
willingness to buy i.e., the ability and willingness to spend the
discretionary income will have a direct effect on the potential demand
of the products. Purchasing power depends on the income of the
target market.
Thus, depending upon the income of its target market, the company
will decide on the suitable marketing mix elements to be adopted
especially related to pricing of the product.


Page 12

SECTION-B
INDUSTRY PROFILE
In this competitive economy FMCG market is having significant
demand in low to middle income consumers and above all highly
price sensitive.

It consists of goods, which are directly consumable, packaged
and branded. The FMCG in India has undergone extreme changes
following economic Liberalization. Qualitative and quantitative
restrictions are under the new trade policy. India stands as third
largest industry in FMCG industry food and processed foods,
personal care products and dental products. Insecticides, liquor,
batteries are also included in this category.

Progressive reduction in excise duties on major FMCG product
categories, rapid extensions of media reach especially TV,
considerable caring of licensing restrictions are some of licensing
restrictions are some of major drives of the India FMCG market in the
recent past.

The industry contributes to the exchequer of income tax and
central excise to the extent of 95% and 16% respectively of the total
collection employment both direct and indirect and in terms of 994
data, it provided 6% of the total 9.1 million. The Industry contributes
to the exchequer by way of income tax and central excise to the
extent of 95% and 16% respectively of the total collection. It provides

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considerable employment both direct and indirect and in terms of the
994 data, it provided 6% of the total 9.1 million. The industry has a
significant rural bias and accounts for 56% of the total rural Demand.

Expenditure on consumer durable like washing machines,
refrigerators and color televisions has shown an impressive growth
during the 1990s. The rural share of the market for FMCG had been
growing steadily over the last few years, from 54.24% in 1989-90 to
56.26% in 1992-93 and to 57.9% in 1995-96. This share went up to
59.3% in 1995-96. This share went up to 59.3% in 1997-98.

Industry Classification:

The FMCG industry is volume driven & is characterized by low
margins. The products are branded & backed by marketing, heavy
advertising, slick packaging & strong distribution networks. The
FMCG segment can be classified under the premium segment &
popular segment; the premium segment caters mostly to the
higher/upper middle class which is not much price sensitive apart
from being brand conscious. The price sensitive popular or mass
segment consists of consumers belonging to the semi-urban or rural
areas who are not particularly brand conscious. Products sold in the
popular segment have considerably lower prices than their premium
counterparts.


Page 14

CHAPTER-03

RESEARCH DESIGN


Page 15

RESEARCH DESIGN

Title of the study: A study on effect of Branding on Consumers in
Purchasing FMCG goods in Someshwara puram Tumkur

STATEMENT OF THE PROBLEM:
FMCG are of high sales and they have short life and as they are fast
moving as the title says.
This study helps to understand how branding affects the purchase
decision of the consumer in buying FMCG.


Page 16

OBJECTIVES OF THE STUDY:

1. To analyze how the brand affects the customers purchasing
decision in FMCG goods.
2. To understand the choice of the customer is Branded or Branded
goods.
3. To analyze the need of branding in FMCG goods.
4. To analyze the attributes which attract consumers to purchase the
branded product.
5. To analyze the effect of promotional activities on brands in the
buying behavior of customers.
6. To analyze whether branding helps customers away from
competition & protect market share.

Scope of the study:
This study helps us to know the necessity of branding on FMCG
goods which have rapid sales.


Page 17

RESEARCH METHODOLOGY
Type of study:
This is a descriptive type of study which means Descriptive
research, also known as statistical research, describes data and
characteristics about the population or phenomenon being studied.
Descriptive study answers the questions who, where, what, when and
how.

Survey Method:
Random sampling is done by circulating questionnaire to
FMCG.

Questionnaires:
A well structured questionnaire had been circulated to FMCG.
A questionnaire consists of a set of questions regarding effect of
branding FMCG.

Sample size:
100 consumers of FMCG were taken as sample for my study.

Sample population: This particular survey is directed at only who use
FMCG.

Page 18

SOURCES OF DATA:
Data was collected on two sources.
1. Primary Data
2. Secondary Data.

PRIMARY DATA is collected through questionnaire, search
and research through place where today's computer has been
mostly used.
SECONDARY DATA is being search sites like magazines,
newspapers, journals, websites and the data has been
collected through other approaches.

Methods of interpreting data :
1. Graphs
2. Bar charts
3. Percentage.


Page 19

DATA ANALYSIS AND INTERPRETATION

Analysis of Age group of respondents
Table no.1
Age group No. of
respondents
% of respondents
15-20 21 21
21-25 27 27
26-30 18 18
31-35 16 16
35 and above 19 19
Total 100 100
Source: Primary data

Analysis: From the survey it is clear that 27% of the
respondents fall in age group of 21-25, 21% come under 15-
20, 18% are in between 26-30, 19% of them are above 35 and
16% are of 31-35 age group

Inference: It can be inferred from above table that majority of
the respondents fall in the age group of 21-25.


Page 20

Graph No. 1

Graph title: "Age group of respondents"
15-20
21-25
26-30
31-35
35 and above

Page 21

Analysis of Gender of the respondents

Table no.2
Gender No
of
respondents
% of respondents
Male 69 69
Female 31 31
Total 100 100

Analysis: From the survey it is clear that 69% of the
respondents are male and 31% are female employees.

Inference: It can be inferred from the above table that
majority of respondents are of male category.


Page 22

Graph no 2

0
10
20
30
40
50
60
70
80
Male Female
Graph Title: Gender of the respondents

No of respondents

Page 23

Analysis of respondents opinion regarding their brand
loyalty
Table no. 3
Options No. of
respondents
% of respondents
Yes 70 70
No 30 30
Total 100 100

Analysis: It is clear that 70% of the respondents are brand
loyal and 30% of them are not brand loyal.

majority of the respondents are brand loyal.


Page 24

Graph no. 3

Graph title: Respondents opinion
regarding their brand loyalty

Yes
No

Page 25

Analysis Respondents opinion regarding the attribute
that attracts to buy a branded product

Table no. 4
Attribute

No. of
respondents
% of respondents
Brand name 34 34
Cleanliness 24 24
Price 23 23
Easy availability 9 9
others 10 10
Total 100 100

Analysis: It is clear that 34% say brand name attracts in
buying branded product, 24% say that its cleanliness, 23% say
that its price, 10% opine that its other factors and 9% thinks
that its price attracts them to buy branded product.

majority of the respondents say that brand name attracts them
to buy a product.

Page 26

Graph no 4

Graph Title: Respondents opinion
regarding the attribute that attracts to buy
a branded product

Brand name
Cleanliness
Price
Easy availability
others

Page 27

Analysis of respondents opinion regarding the reason
for the delay between purchase decision and the actual
purchase
Table no. 5
Reasons No
of
respondents
% of respondents
Financial
constraints
27 27
Waiting for more
innovative
product
55 55
Waiting for
market response
18 18
Total 100 100

Analysis: It is clear that 55% of the respondents delay the
actual Purchase because they wait for more innovative
product, 27% say that its financial constraints and 18% are
delaying actual purchase because they wait for market
response.
majority of the respondents wait for the innovative product
before the actual purchase.

Page 28

Graph no 5

0
10
20
30
40
50
60
Financial
constraints
Waiting for more
innovative product
Waiting for market
response
regarding the reason for the delay between
purchase decision and the actual purchase

No of

Page 29

Analysis of Respondents opinion regarding factors that
influences to buy branded product

Table no. 6
Influences No
of
respondents
% of respondents
Advertising 27 27
Shop display 8 8
Word of mouth 17 17
Attractive
packaging
20 20
Family/Friends/
Relatives
16 16
Dealer 7 7
Any other 4 4
Total 100 100

Analysis: It is clear that 27% are influenced by advertising,
20% are influenced by attractive packaging, 17% from word
of mouth and 16% are influenced by family/friends/relatives.
majority of the respondents feel that advertisement influences
them to buy branded product.

Page 30

Graph no 6:

regarding factors that influences to buy
branded product

Advertising
Shop display
Word of mouth
Attractive packaging
Family/Friends/
Relatives
Dealer
Any other

Page 31

Analysis Respondents opinion regarding the influence of
brand name in purchase of FMCG products

Table no. 7
Options No
of
respondents
% of respondents
Agree 54 54
Strongly agree 26 26
Disagree 17 17
Strongly disagree 3 3
Total 100 100

Analysis: It is clear that 54% agree, 26% strongly agree, 17%
disagree and 3% strongly disagree that brand name influences
the purchase of FMCG products.

majority of the respondents agree that brand name influences

Page 32

Graph no 7

0
10
20
30
40
50
60
Agree Stongly agree Disagree Strongly disagree

regarding the influence of brand name in
purchase of FMCG products.

No of respondents

Page 33

Respondents opinion regarding the influence of Quality
in purchase of FMCG products
Table no. 8
Options No of
respondents
% of respondents
Agree 52 52
Disagree 13 13
Total 100 100

disagree and 1% strongly disagree that quality influences the

majority of the respondents agree that quality influences the


Page 34

Graph no 8

0
10
20
30
40
50
60
Agree Strongly agree Disagree Strongly agree
Graph Title: Respondents opinion regarding
the influence of Quality in purchase of FMCG
products

No of respondents

Page 35

Analysis of Respondents opinion regarding the influence
of price in purchase of FMCG products
Table no. 9
Options No. of
respondents
% of respondents
Agree 43 43

Disagree 23 23
Strongly
disagree
4 4
Total 100 100

.Analysis: It is clear that 43% agree, 30% strongly agree,
23% disagree and 4% strongly disagree that quality influences



Page 36

Graph no. 9

Graph title: Respondents opinion regarding
the influence of price in purchase of FMCG
products
Agree
Strongly agree
Disagree
strongly agree

Page 37

Analysis of table of satisfaction of respondents towards
the product features branded FMCG products

Table no. 10
Options No. of
respondents
% of respondents
Yes 80 80
No 20 20
Total 100 100

Analysis: It is clear that 80% of the respondents are satisfied
and 20% of them are not satisfied with the product features of
branded FMCG products

majority of the respondents are satisfied with the product
features of branded FMCG products.


Page 38

Graph no 10

0
10
20
30
40
50
60
70
80
Yes No
Graph Title: Table of satisfaction of
respondents towards the product features
branded FMCG products

No of respondents

Page 39

Analysis of respondents opinion regarding the influence
of advertisement in purchase of FMCG products
Table no. 11
Options No. of
respondents
% of respondents
Agree 47 47
Disagree 10 10
Total 100 100

disagree and 3% strongly disagree that quality influences the


Page 40

Graph no 11

0
5
10
15
20
25
30
35
40
45
50
Agree Strongly agree Disagree Strongly disagree
regarding the influence of advertisement in
purchase of FMCG products

No of respondents

Page 41

Analysis of respondents opinion regarding the switching
of brand preference if promotional scheme is offered with
another brand
Table no. 12
Options No. of
respondents
% of respondents
Yes 57 57
No 43 43
Total 100 100

Analysis: It is clear that 57% of the respondents would like to
switch brand and 43% of them do not like to switch brand if
promotional scheme is offered with another brand.

majority of the respondents would like to switch brand
preference if promotional scheme is offered with another
brand.


Page 42

Graph no 12

the switching of brand preference if
promotional scheme offered with another
brand

Yes
2nd Qtr

Page 43

Respondents opinion regarding purchase of FMCG
product if required immediately
Table No.13
Options No of
respondents
% of respondents
Buy the available
product
61 61
Search for the
branded product
39 39
Total 100 100

Analysis: It is clear that 61% of the respondents would like to
buy the available product and 39% of them would search for
the branded FMCG product.

majority of the respondents would like to buy the easily
available product if required immediately.


Page 44

Graph no 13

purchase of FMCG product if required
immediately

Buy the available product
Search for the branded product

Page 45

Analysis of respondents opinion regarding branded
FMCG products over unbranded FMCG products
Table no. 14
Options No
of
respondents
% of respondents
Yes 63 63
No 37 37
Total 100 100

Analysis: It is clear that 63% of the respondents say that
branded FMCG products are better than unbranded FMCG
products and 37% of them feel that unbranded FMCGs are
better

majority of the respondents feel that branded FMCG products
are better than unbranded FMCG products.


Page 46

Graph no 14

0
10
20
30
40
50
60
70
Yes No
regarding branded FMCG products over
unbranded FMCG products

No of respondents

Page 47

FINDINGS

1. It is clear from above table that majority of the respondents
fall in the age group of 21-25.

2. We can conclude that majority of respondents are of male
category.

3. It can be inferred from the above table that majority of the
respondents are brand loyal.

4. From the survey it is clear that majority of the respondents
say that brand name attracts them to buy a product.

5. We can easily say that majority of the respondents wait for
the innovative product before the actual purchase

6. It is clear the above table that majority of the respondents
feel that advertisement influences them to buy branded
product.

Page 48

7. We can conclude that majority of the respondents agree
that brand name influences the purchase of FMCG products.

8. It is clear from the above table that majority of the
respondents agree that quality influences the purchase of
FMCG products.

agree that quality influences the purchase of FMCG products

10. It is clear that majority of the respondents are satisfied
with the product features of branded FMCG products.

11. We can conclude that majority of the respondents agree
that quality influences the purchase of FMCG products.

12. Survey shows that majority of the respondents would like
to switch brand preference if promotional scheme is offered
with another brand.


Page 49

13. It is clear that majority of the respondents would like to
buy the easily available product if required immediately.

feel that branded FMCG products are better than unbranded
FMCG products.


Page 50

QUESTIONNAIRE
Dear friends,
I am a BBM student, as a part of course curriculum; I have
taken up a study on effect of branding on consumers in purchasing
FMCG goods. I would be grateful if you kindly co-operate by
answering this questionnaire.
The information is only for academic purpose and would be kept
confidential.
PERSONAL DETAILS
NAME OF THE RESPONDENT:
SEX: M F
OCCUPATION:
AGE GROUP: 15-20 21-25 26-30 31-35 36 and Above
MONTHLY INCOME:
5000-10000
10001-20000
20001-30000
30000 and above


Page 51

1. Are you a brand loyal customer?
Yes No

2. Which attribute did attract you to purchase branded products?
Brand Name Transparent
Price Cleanliness
Easy Availability Others

3. What was the reason for the delay between the purchase
decision and the actual purchase?
Financial constraints
waiting for more innovative product
waiting for market response

4. What influenced you to buy the branded products?
Advertising Shop Display
Word of mouth Family/Friend/Relatives
Attractive packaging any other
Dealer


Page 52

5. Brand name influences in purchase of FMCG products.
Agree Disagree
Strongly Agree strongly disagree

6. Quality influences in purchase of FMCG products.
Agree Disagree

7. Price influences in purchase of FMCG products.
Agree Disagree

8. Are you satisfied with the product features of branded FMCG
products?
Yes No

9. Advertisement influences in Purchase of FMCG products.
Agree Disagree


Page 53

10. Will you like to switch your brand preference if you get some
promotional scheme with another brand?
Yes No

11. Do you think branded FMCG products are better than
unbranded FMCG product?
Yes No

:

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