A MINOR REPORT

ON
Factors considered while purchasing FMCG product

Submitted to
Sujatha g.l (reader)

Submitted by
Manikanta bhakta
II MBA

Roll no: 0846

Poornaprajna institute of management

Udupi.

Introduction
 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 day’s customer has a wide variety of choice while selecting

FMCG, producer has to innovate additional values to the product
that the product continues it presence in the market. Different
factor governing the customer based on different product
category like milk products, beverages, prepared dishes,
Chocolates & Confectionaries, personal care, 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 factors considered by

a consumer while purchasing a FMCG product
 OBJECTIVE OF THE STUDY

PRIMARY OBJECTIVE:
• To study the factors determining the pre
purchase decision.

RESEARCH METHODOLOGY

• Type of research
Descriptive

• Type of data
Primary data

• Data collection method

Data is collected through structured
questionnaire.

• Sampling
Convenient sampling
• Sample size
100

• Data analysis technique

Quantitative
 • Data analysis tool
Bar charts, pie charts.

Fast Moving Consumer Goods (FMCG)

We regularly talk about things like butter, potato
chips, toothpastes, razors, household care products, packaged
food and beverages, etc. But do we know under which category
these things come? They are called FMCGs. FMCG is an acronym
for Fast Moving Consumer Goods, which refer to things that
we buy from local supermarkets on daily basis, the things that
have high turnover and are relatively cheaper. FMCG’s constitute
a large part of consumers’ budget in all countries. The retail
sector for FMCG’s in India is in the process of a drastic
transformation. The transformation of the retail market is likely to
have a long-lasting impact on wholesale trade and the distribution
of FMCG’s as well. Traditional wholesalers are the most likely
losers, because large retailers tend to buy directly from suppliers.
The Indian FMCG sector is the fourth largest sector in the
economy, with a total market size in excess of US$ 13.1 billion. It
has a strong MNC presence and is characterized by a well
established distribution network, intense competition between the
organized and unorganized segments and low operational cost.
Availability of key raw materials, cheaper labor costs and
presence across the entire value chain gives India a competitive
advantage.

FMCG are products that have a quick shelf turnover, at

relatively low cost and don't require a lot of thought, time and
financial investment to purchase. The margin of profit on every
individual FMCG product is less. However the huge number of
goods sold is what makes the difference. Hence profit in FMCG
goods always translates to number of goods sold.

Fast Moving Consumer Goods is a classification that refers to

a wide range of frequently purchased consumer products
including: toiletries, soaps, cosmetics, teeth cleaning products,
shaving products, detergents, and other non-durables such as
glassware, bulbs, batteries, paper products and plastic goods,
such as buckets. ‘Fast Moving’ is in opposition to consumer
durables such as kitchen appliances that are generally replaced
less than once a year. The category may include pharmaceuticals,
consumer electronics and packaged food products and drinks,
although these are often categorized separately. The term
Consumer Packaged Goods (CPG) is used interchangeably with
Fast Moving Consumer Goods (FMCG).

Three of the largest and best known examples of Fast

Moving Consumer Goods companies are Nestlé, Unilever and
Procter & Gamble. Examples of FMCGs are soft drinks, tissue
paper, and chocolate bars. Examples of FMCG brands are Coca-
Cola, Kleenex, Pepsi and Believe.
The FMCG sector represents consumer goods required for daily or
frequent use. The main segments of this sector are personal care
(oral care, hair care, soaps, cosmetics, and toiletries), household
care (fabric wash and household cleaners), branded and
packaged food, beverages (health beverages, soft drinks, staples,
cereals, dairy products, chocolates, bakery products) and
tobacco.

The Indian FMCG sector is an important contributor to the

country's GDP. It is the fourth largest sector in the economy and
is responsible for 5% of the total factory employment in India. The
industry also creates employment for 3 m people in downstream
activities, much of which is disbursed in small towns and rural
India. This industry has witnessed strong growth in the past
decade. This has been due to liberalization, urbanization, increase
in the disposable incomes and altered lifestyle. Furthermore, the
boom has also been fuelled by the reduction in excise duties, de-
reservation from the small-scale sector and the concerted efforts
of personal care companies to attract the burgeoning affluent
segment in the middle-class through product and packaging
innovations.

Unlike the perception that the FMCG sector is a producer of

luxury items targeted at the elite, in reality, the sector meets the
every day needs of the masses. The lower-middle income group
accounts for over 60% of the sector's sales. Rural markets
account for 56% of the total domestic FMCG demand. Many of the
global FMCG majors have been present in the country for many
decades. But in the last ten years, many of the smaller rung
Indian FMCG companies have gained in scale. As a result, the
unorganized and regional players have witnessed erosion in
market share.
History of FMCG in India

In India, companies like ITC, HLL, Colgate, Cadbury and

Nestle have been a dominant force in the FMCG sector well
supported by relatively less competition and high entry barriers
(import duty was high). These companies were, therefore, able to
charge a premium for their products. In this context, the margins
were also on the higher side. With the gradual opening up of the
economy over the last decade, FMCG companies have been
forced to fight for a market share. In the process, margins have
been compromised, more so in the last six years (FMCG sector
witnessed decline in demand).

Products and Categories:-

 Personal Care, Oral Care, Hair Care, Skin Care, Personal
Wash (soaps); - Cosmetics and toiletries, deodorants, perfumes,
feminine hygiene, paper product; Household care fabric wash
including laundry soaps and synthetic detergents, household
cleaners, such as dish/utensil cleaners, floor cleaners, toilet
cleaners, air fresheners, insecticides and mosquito repellents,
metal polish and furniture polish - Food and health beverages,
branded flour, branded sugarcane, bakery products such as
bread, biscuits, etc., milk and dairy products, beverages such as
tea, coffee, juices, bottled water etc, snack food, chocolates, etc.

Top 10 FMCG Companies in India

1. Hindustan Unilever Ltd.

2. ITC (Indian Tobacco Company)

3. Nestle India

4. GCMMF (FMCG)

5. Dabur India

6. Asian Paints (India)

7. Cadbury India

8. Britannia Industries

9. Procter & Gamble Hygiene and Health Care

10. Marico Industries

The factors which customer focuses while purchasing

FMCG products are
• Price
• Availability
• Brand name
• Quantity
• Quality
• Packing
• Advertisement
• Reference

Analysis and Interpretation of the Data:

The collected data were not easily understandable, so I like to
analyze the collected data in a systematic manner and
interpreted with simple method. The analysis and interpretation
of the data involves the analyzing of the collected data and
interpretation it with pictorial representation such as bar charts,
pie charts and others.

Gender:
Gender play vital role in purchase decisions. Gender
classified on sex Basis i.e. male and female. Gender classification
is requiring to marketer because different gender exhibit different
perception towards products. In classification of gender the
following number is used to know their perception

Sex No. of Percentage

respondents
Male 35 35
Female 65 65
Total 100 100

Interpretation:
35% of the respondents are male and 65% of the
respondents are female. From the above table we can conclude
that, the majority of the respondents belong to female group.

Occupation:

Occupation is also influences a person’s consumption

pattern. A blue
Collar worker will buy work cloths, work shoes and lunch boxes.
Similarly the
FMCG products are purchased by various occupants.
The following occupants of the respondents are classifies for the
data collection.

Occupation No. of Percentage

 respondents
Business 20 20
Employees 10 10
House wives 65 65
Others 05 05

Interpretation:

20% of the respondents are business, 10% of the

respondents are Employees, and 65% of the respondents are
house wives, 05% of the Respondents are others group.

Purchasing F actor

Identification of various factors plays a vital role in consumer

behavior study. The various factors such as quality, price easy
available etc. is influencing lot and influences positively. The
following data reveals how various factors are influencing to
buying of FMCG products.
Factors No of Percentage
respondents
Quality 38 38
Brand 28 28
Price 20 20
Easy availability 14 14
Others 0 0
Total 100 100

Interpretation:
38% of respondents buying FMCG products for its Good
Quality, 28% of respondents use for its Band Name,20% of its
Price Consideration, 14% of its easy availability of respondents
buying FMCG products.
Quality:

Company has two responsibility in a quality centered. First,

they must participate in formulating strategies and policies
designed to help the company win through total quality
excellence. Second they must deliver marketing quality alongside
production quality. This helps to company to attract more number
of customers to their products. Hence I try to collect information
related to quality of FMCG products.
 Opinions No of respondents percentage
Durability 35 35
Freshness 45 45
Taste 20 20
Others 00 00
Total 100 100

Interpretation:
As per the data, 35% of the respondents buy the milk due to
Thickness, 45% of the respondents for Freshness, and 20% of
respondents for Taste. Quality takes vital role in every
organization. From the above table we can conclude that majority
of the respondents expressed that FMCG product

Opinion towards Products:

The behavior of users after his commitment to a product has

been collected with respect product and terms of satisfaction with
rating scale. The following are the data obtained related to FMCG
products. Analysis of Rating towards FMCG products
Ratings No of respondents Percentage
Excellent 25 25
Good 48 48
 Average 22 22
Poor 05 05
Total 100 100

Interpretation:

25% of the respondents rated that FMCG products are

excellent. 48% of the respondents rated as good, 22% of the
respondents rated as Average Quality. 05% of the respondents
rated that FMCG products are Poor.
From the above table we can conclude that majority of the
respondents rated FMCG are of Good Quality

Purchasing Place:

Purchase place is also important to know where users

choose their Purchase point. This helps to marketer to design
various promotion and distribution programmers’. The data is
collected to know the various purchase place and availability.

Easy available No of respondents percentage

Yes 95 95
 No 05 05
Total 100 100

Interpretation:

95% of the respondents said that they are getting FMCG

products easily. Only 05% of the respondents disagree with the
easy available of FMCG products. From the above table we can
conclude that majority of the respondents getting the FMCG
products easily from the dealers or retailers

Value for the Money:

Consumers always think while paying price to the products
such as how much we are paying towards products and how much
we are getting. This data is gathered to know what value they are
receiving from the FMCG Products.

Response No of respondents percentage

Yes 96 96
No 04 04
 Total 100 100

Interpretation:
96% of the respondents feel that they get the value for
money they paid. Only 04% of the respondents feel that they are
not getting the value for money what they paid. From the above
table we can conclude that majority of the respondents are
agreed that they are getting the value for money they paid.

Influence to Others to Buy Products:

Post experience & benefits will help organization in obtaining

the additional sale. In this connection feedback its act as an
influence to others to adopt the product the user survey has
conducted to identify what an extent user recommends to others.
The data has been extracted & it is as follows.
 Recommend No of respondents percentage
Yes 95 95
No 05 05
Total 100 100

Interpretation:

95% of the respondents recommended FMCG products, 05%

of the respondents not recommended FMCG products to others.
From the above table we can conclude that majority of the
respondent’s recommended FMCG products.

FINDINGS AND CONCLUSIONS

FINDINGS:

1. It is found in the survey that females are the main

decision maker for the FMCG products. As per the data, 65% of
female and 35% of male makes purchase decision.
 2. Based on the occupation of the customer, it is
found in the survey that 65% are the housewives and 35% are
from various occupations such as a businessman, employee,
farmers, etc for the FMCG products.

3. The main purchasing factors for the FMCG

products are Quality and Brand image. The data reveals that 42%
influences on Quality and 32% influenced for the Brand.

4. 88% of the total respondents are using product

since from a long time. The majority of the respondents are using
FMCG products from more than 3 years.

5. It is found in the survey that customer are

influencing through Word of Mouth

Conclusions:

From the survey conducted it is observed that FMCG

products have a good market share. From the study conducted
the following conclusions can be drawn. The factors considered by
the customer before purchasing FMCG products are freshness,
taste, durability and easy availability.

Finally I conclude that, majority of the customers are

satisfied with the
FMCG products because of its good quality, reputation, easy
availabilities. Some customers are not satisfied with the FMCG
products because of high price, lack of availability, spoilage and
low shelf life etc. therefore, if slight modification in the marketing
programme such as dealers and outlets, promotion programmers,
product lines etc., definitely company can be as a monopoly and
strong market leader.
Customer Response – Questionnaire

I am Manikanta Bhakta, student of second year MBA of the

Poornaprajana Institute of Management, Udupi, doing my minor project on
“factors to be considered while choosing a FMCG products” as a part of
study. I request you to provide the required information for the completion of
my study. And I Promise that the information is used exclusively for
academic purpose only.

1. Personal profile:
a. Name:
b. Address:
c. Sex: Male: [ ] Female [ ]
d. Age: [ ]

2. Occupation:
a. Self-employed: [ ] b. Professional: [ ]
c. House wife: [ ] d. Student: [ ]

3. What is the most important factor that matters while buying an FMCG?
a. Quality: [ ] b. Price: [ ] c. Service: [ ]

4. How did you come to know about the FMCG product?

a. By friends/family: [ ] b. Direct mailers: [ ]
c. Press Ads: [ ] d. Reference website: [ ]
e. T.V. Ads: [ ]

5. Which configuration would you decide on while buying an FMCG?

a. Intermediaries: [ ] b. Standard: [ ]
c. Latest / Advanced: [ ]
6. Are you satisfied with the quality of the product?
a. Yes: [ ] b. No: [ ]

7. Do you think the price of FMCG product is high / low compared to

Competitor’s product?
 a. Very good: [ ] b. High: [ ]
c. Average: [ ] d. Same: [ ]

8. How often do you buy this product of FMCG?

a. Daily: [ ] b. Monthly: [ ]
c. Weekly: [ ] d. Occasionally: [ ]

9. What is your opinion about the performance of FMCG product?

a. Outstanding: [ ] b. excellent: [ ]
c. Good: [ ] d. Average: [ ]

10. Do the various schemes / promotional activities affect your purchase?

a. Yes: [ ] b. No: [ ]

11. Suggestion (if any):

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Date: SIGNATURE