a study on major factors affecting consumer purchase decisions,regarding purchase of...

MANAGEMENT THESIS- II

Final Report

Title :

Submitted By : Enrollment Number :

A study on Major factors affecting Consumer purchase decisions,regarding purchase of CTVs,Refrigerators&Computers in Kolkata.

MANAGEMENT THESIS- II Final Report

Title :-

A study on Major factors affecting Consumer purchase decisions, regarding purchase of CTV, Refrigerator & Computers in Kolkata

UNDER GUIDANCE OF Mentor :

Submitted By : Signature :- …………………………………..Enrollment Number :

A report submitted in partial fulfillment of the requirement foraward of the degree in MBA to ICFAI National College.

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Title :

A study on Major factors affecting Consumer purchase decisions, regarding purchase of CTV, Refrigerator & Computers in Kolkata

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Table of ContentsTable of Contents Acknowledgement……………….…………………………………………………….5 List of Charts …………………….…………….……………………………………… .6

Summary………………………….………………………………………………………..8 Introduction ………………….……………………….…………………………………11 Body of Thesis ……………….………………………………………………………….13 Methodology ……………………….… …………………………………..…………….16

Research Design ……………………… …………………………………….....……..18 Analysis & Interpretation of Data ………,……………………………………….20 Findings …………………………………………… …………………………...……….....35 Conclusion and Recommendations ……………………………………………….37

Limitation ………………………………………………………….…………..…………….39

Literature Review ……………………………………………………………….………..41

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Annexure ………………………………………………………………….………………..42

ACKNOWLEDGEMENT

This Study is carried out during partial completion of our Masters in Business Administration from ICFAI National College,Dum Dum

The topic of this Thesis is “A study on Major factors affecting Consumer purchase decisions, regarding purchase of CTV, refrigerator & computers in Kolkata” The Project is being carried out with the guidance and heartiest co-operation of Mr Biswarup Samanta Faculty INC Dum Dum who is my Mentor,& other faculties of INC Dum Dum for providing me with meaningful insights about the subject of study

I am also grateful to the respondents; from I collected the primary data.

I am thankful towards the whole ICFAI family for supporting my activities.

I also convey my sincere gratitude to all the authors & websites from where I had collected meaningful meterials.

With Regards

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LIST OF CHARTS & DIAGRAMS

1 ) Table 1.1 :- Page No 21 – Ranking of various factors,being considered by the respondents,while buying CTVs ,in the age-group of 15-25

2 ) Table 1.2 :- Page No 22 – Ranking of various factors,being considered by the respondents,while buying CTVs ,in the age-group of 25- 35

3 ) Table 1.3 :- Page No 23 – Ranking of various factors,being considered by the respondents,while buying CTVs ,in the age-group of 35-45

4 Table 1.4 :- Page No 24 – Ranking of various factors,being considered by the respondents,while buying CTVs ,in the age-group of 45-55

5 ) Table 1.5 :- Page No 25 – Ranking of various factors,being considered by the respondents,while buying CTVs ,in the age-group of 55-65 & Above

6 ) Table 2.1 :- Page No 26 – Ranking of various factors,being considered by the respondents,while buying Refrigerator ,in the age-group of 25-35

7) Table 2.2 :- Page No 27 – Ranking of various factors,being considered by the respondents,while buying Refrigerator ,in the age-group of 35-45.

8) Table 2.3 :- Page No 28 – Ranking of various factors,being considered by the respondents,while buying Refrigerator ,in the age-group of 45-55.

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9) Table 2.3 :- Page No 29 – Ranking of various factors,being considered by the respondents,while buying Refrigerator ,in the age-group of 55-65& Above.

10) Table 3.1 :- Page No 30 – Ranking of various factors,being considered by the respondents,while buying Computers ,in the age-group of 15-25




14) Table 3.5 :- Page No 34 – Ranking of various factors,being considered by the respondents,while buying Computers ,in the age-group of 55-65 & Above.

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SummaryThe Indian Consumer Durables Industry

The Consumer Durables industry consists of durable goods and appliances for domestic use such as televisions, refrigerators, air conditioners and washing machines.Instruments such as cellphones and kitchen appliances like microwave ovens are also included in this category. The sector has been witnessing significant growth in recent years, helped by several drivers such as the emerging retail boom, real estate and housing demand, greater disposable income and an overall increase in the level of affluence of a significant section of the population. The industry is represented by major international and local players such as BPL, Videocon, Voltas, Blue Star, MIRC Electronics, Titan, Whirlpool, etc.

The consumer durables industry can be broadly classified into two segments: Consumer Electronics and Consumer Appliances.

Consumer Appliances can be further categorised into Brown Goods and White Goods.

The key product lines under each segment are as follows.

Consumer Durables White Goods Kitchen Applicances /

Brown GoodsConsumer Electronics

• Refrigerators

• Washing Machine

• Air-conditioners

• Speakers and Audio .. .. ...Equipments

• Mixers

• Grinders

• Microwave Ovens

• Iron

• Electric Fans

• Cooking Range

• Chimneys

Mobile Phones

Televisions

MP3 Players

DVD Players

VCD Players

Computers

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KEY CONSUMER DURABLES,& GROWTH TRENDS

The consumer durables market in India was estimated to be around US$ 4.5 billion in 2006-07. More than 7millionunits of consumer durable appliances have been sold in the year 2006-07 with colour televisions (CTV) forming the bulk of the sales with 30 per cent share of volumes. CTV,refrigerators and Air-conditioners together constitute more than 60 per cent of the sales in terms of the number of units sold.

Key Consumer Durables - Share by Volume

Source: Cygnus Quarterly Report, Aug 2007.

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INTRODUCTION

Purpose

The project is expected to throw light into various factors which affect consumers purchase decisions, while buying consumer durables,& demographic profile of customers in Kolkata.

This study can play a major role for organizations while planning its marketing activities,& decide on the promotions for the same.Moreover,the study is going to provide meaningful insights to students, who will be doing similar study in future.

Nature of Study

The study is based on a combination of primary & secondary data,& thus will be able to analyse various major factors which affects the purchase decisions regarding consumer durables,namely CTVs,Refrigerators & Computers for various Income segments.

Nature of Project

As in the study,various customers are interviewed,this project is expected to serve valuable information,regardingthe various factors affecting consumer’s purchase decisions for consumer durables mainly CTVs,Refrigerators & Computers in Kolkata,the project is undertaken in Kolkata & may not hold completely relevant for other zones of the country,where the demographic factors are different.

Overview

The study is provide a brief knowledge on the demographics elements present in the market of Kolkata,& its effects on the purchase decisions on consumer durables,Specially CTVs,Refrigerators & Computers,& major factors,or a combination of factors which affects the consumer’s purchase decision for the same.

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BODY OF THESIS

Research Progress

The research has found significant factors which affects consumers purchase decisions,it has been observed that the purchase decisions are affected by a combination of two or more factors,the final part of the thesis will try to draw a clearer picture on these factors,& how do they affect the purchase decisions.Many factors inside the factor of “Family Influence”are also present,family members from time to time play many roles of influencer,decider,gatekeeper etc.( These are explained in the annexure).

It has also been found that,a factor which is most common during purchase of CTV,the same factor may not be having equal importance during the purchase of refrigerators,Computers etc.

The consumer durables industry in India is set for sustained growth over the long term, fuelled by favourable consumer demographics, overall growth in services and industrial sectors and infrastructure development in suburban and rural areas. Several Indian and MNC players are looking to strengthen their presence in India to leverage this opportunity.

Findings till date : Product –wise Analysis

CTV

The CTV production was 15.10 million units in 2006-07 and is expected to grow by at least 25 per cent. At the disaggregated level, conventional CTV volumes have been falling while flat TVs have grown strongly. Market sources indicate that most CTV majors have phased out conventional TVs and have been instead focusing more on flat TVs. The flat segment of CTVs now account for over 60 per cent of the total domestic TV production and is likely to be around 65 per cent in 2007-08. High-end products such as liquid crystal display (LCD) and plasma display CTV grew by 400 per cent and 150 percent respectively in 2006–07 following a sharp decline in prices of these products and this trend is expected to continue.

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Refigerator

Refrigerators are one of the most sought after appliances in Indian middle class homes. The refrigerator market has two segments: Direct Cool and the relatively new Frost-Freetype. The market for refrigerators in 2006-07 was about 6.5 million units. The growth of refrigerator segment is projected to be between 18 to 22 per cent over the next5 years.A critical success factor for the refrigerator market,given its widespread use, is deeper reach into the market and increased penetration. Recently, the market is getting reinforced by the replacement segment as well.

Computers

Purchase decisions for computers are largely affected by the factor of Assembled & Branded.The topic of the study is not about finding the factor behind buying assembled or branded PC/laptops.Thus the study is mainly focused on finding the major factors affecting consumers purchase decisions while buying branded computers.

Brands account for 10 per cent of the total consumer goods market in India, while organised retailing is around 2 per cent of the total industry. Though branded computers are perceived to be costlier than non-branded computers, the penetration of branded products is increasing.

The relative shares of branded computers at the organised sector indicates that a significant share of branded products is being sold through unorganised channels. This highlights the need for a strong distribution network to penetrate deeper into the potential market.

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Reasearch Methodology

The research was to be conducted in mainly four stages;

STAGE 1 : Identifying the Problem

1.1 A Pilot survey was done by informally interviewing few individuals who had purchased consumer durables recently.

1.2 Inputs,about the basic (Generic)factors that they consider purchasing Consumer Durables are gathered.

1.3 Various materials published in similar studies are consulted.

1.4 key factors & the kind of data required for successful completion, are being identified.

STAGE 2: Collecting Suitable Data 2.1 A questionnaire is framed while considering both the Key & the Generic factors, which affeaffects consumer purchase decisions.2.2 Customers are classified according to various Income segments.

STAGE 3 : Analysing & interpreting the collected Data

3.1 A data sheet is being formatted by feeding the collected information into excel sheet systematically.

STAGE 4 : Writing the Report

Detailed report has been made as per the analysis from time to time in a most possible proper, convenient & scientific format. Using various simple statistical tools,to analyze the nature of the data.Applying Suitable higher order statistical procedures to define & interpret the required information.

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RESEARCH DESIGN

Sampling: As the study demand,the questionnaires are filled by respondents from

various age groups.

The Sample size : The sample size was 100,which was equally distributed into the 5

age groups.

Type of Sampling Design:

Non-Probability Sampling :( Convenience Sampling)

The sample design for the survey is convenience-sampling method. This method is

selected by considering time factor for the survey and population.

Data Collection :

Primary Data

This study is mostly based on Primary data collected,& informations received directly

in the process of the survey.

Secondary Data

As the topic of the thesis is comparatively different & unusual,thus finding adequate amount of relevant data had been a challenge.

Still,some websites,& books on Market Reasearch had been reffered for finding out the factors & helped a lot in the process of Questionnaire designing.

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RANK SCORE AS GIVEN BY THE RESPONDENTS,IN THE AGE GROUP OF 15-25

PRODUCT - CTV AGE GROUP 15 - 25 &Above

RANKS R1 R2 R3 R4 R5 R6 WEIGHT 6 5 4 3 2 1 Total/6FACTORS

FEATURESNO OF RESPONDENTS 10 3 2 1 3 1 TOTAL SCORE

60 15 8 3 6 1 93 15.5

BRANDNO OF RESPONDENTS 7 3 2 4 4 0

42 15 8 12 8 0 85 14.2

ASTHETICSNO OF RESPONDENTS 6 3 5 2 3 1

36 15 20 6 6 1 84 14.0

FAMILYNO OF RESPONDENTS 5 3 7 1 3 1

30 15 28 3 6 1 83 13.8

PRICENO OF RESPONDENTS 9 4 2 1 2 2

54 20 8 3 4 2 91 15.2AFTER SALES SERVICE

NO OF RESPONDENTS 6 4 3 5 2 0

36 20 12 15 4 0 87 14.5Table 1.1

From the above table,we can see that,among the age group of 15-25,they preferThe Features & Price of a CTV before buying,though this group is not the direct customer,but their views are also important,while a family is taking a collective decision,to buy a CTV.

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54 20 0 15 2 1 92 15.3


24 45 16 3 2 1 91 15.2


30 15 20 18 2 0 85 14.2


48 25 4 6 4 2 89 14.8




24 25 24 12 2 0 87 14.5Table 1.2

This is a major purchasing group for CTVs,as this group is of the young adults,who as per the study has givenFeatures,Brand &Family preferencees as overall Rank 1,2,& 3 respectively.

Another important factor is that,this group is emerging as a major purchasing group of consumer durables.

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PRODUCT – CTV AGE GROUP 35 - 45



30 30 0 3 10 3 76 12.7


30 15 8 6 6 5 70 11.7


30 15 24 9 4 1 83 13.8


36 25 16 6 2 2 87 14.5




54 20 12 6 4 0 96 16.0Table 1.3

This is the Major Purchasing group,for CTVs as well,thus ad efforts should be directed towards this group as well,This group has shown After Sales Services as their First importance while buying a CTV,followed by the factor of Price.

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PRODUCT - CTV AGE GROUP 45 - 55



30 30 0 3 10 3 76 12.7


36 20 12 6 4 2 80 13.3


18 10 20 15 6 2 71 11.8


42 25 24 3 2 0 96 16.0




54 20 8 9 4 0 95 15.8Table 1.4

RANK SCORE AS GIVEN BY THE RESPONDENTS,IN THE AGE GROUP OF 55-65 & Above.

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12 25 8 0 10 6 61 10.2


24 10 20 9 8 2 73 12.2


12 15 24 15 8 0 74 12.3


48 20 20 6 2 0 96 16.0




60 25 8 3 4 0 100 16.7Table 1.5


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PRODUCT - Refrigerator AGE GROUP 25 - 35



54 20 0 15 2 1 92 15.3


54 20 0 15 2 1 92 15.3


54 20 0 15 2 1 92 15.3


48 20 8 0 8 2 86 14.3


42 20 4 9 4 3 82 13.7

AFTER SALES SERVICENO OF RESPONDENTS 5 4 6 3 1 1

30 20 24 9 2 1 86 14.3Table 2.1



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RANKS R1 R2 R3 R4 R5 R6 WEIGHT 6 5 4 3 2 1 Total/6 FACTORS


54 20 12 0 4 2 92 15.3


30 10 12 3 8 5 68 11.3


36 30 4 12 4 1 87 14.5


42 25 12 6 6 0 91 15.2


30 20 20 3 6 2 81 13.5


48 20 12 6 2 2 90 15.0Table 2.2



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42 25 24 3 2 0 96 16.0


24 10 12 6 8 5 65 10.8


36 40 8 3 4 1 92 15.3


42 25 12 6 6 0 91 15.2


36 25 8 6 6 2 83 13.8


54 25 4 6 6 0 95 15.8Table 2.3

RANK SCORE AS GIVEN BY THE RESPONDENTS,IN THE AGE GROUP OF 55-65 & Above

PRODUCT - Refrigerator AGE GROUP 55 - 65 & Above

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42 25 24 3 2 0 96 16.0


24 10 12 6 8 5 65 10.8


36 40 8 3 4 1 92 15.3


42 25 12 6 6 0 91 15.2


36 25 8 6 6 2 83 13.8


54 25 4 6 6 0 95 15.8Table 2.4


PRODUCT - Computer AGE GROUP 15 - 25 & Above

RANKS R1 R2 R3 R4 R5 R6

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WEIGHT 6 5 4 3 2 1 Total/6FACTORS


60 20 12 6 2 0 100 16.7


36 20 12 6 4 3 81 13.5


48 30 4 0 4 3 89 14.8


24 5 12 18 4 4 67 11.2


30 30 12 3 6 2 83 13.8


42 20 20 3 6 0 91 15.2

Table 3.1



RANKS R1 R2 R3 R4 R5 R6

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WEIGHT 6 5 4 3 2 1 Total/6FACTORS


54 15 8 6 6 1 90 15.0


54 25 8 9 2 0 98 16.3


30 30 12 3 6 2 83 13.8


18 15 8 18 4 4 67 11.2


54 25 8 0 4 2 93 15.5


36 25 12 6 6 1 86 14.3Table 3.2




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30 45 4 6 2 2 89 14.8


42 20 12 15 2 0 91 15.2


36 25 4 9 6 2 82 13.7


36 30 8 3 4 3 84 14.0


48 20 4 6 6 2 86 14.3


36 50 4 3 4 0 97 16.2Table 3.3





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60 45 4 6 2 2 119 19.8


48 15 16 9 4 0 92 15.3


42 25 8 3 6 2 86 14.3


36 40 8 3 0 3 90 15.0


54 20 8 9 2 1 94 15.7


48 45 0 6 2 0 101 16.8Table 3.4

RANK SCORE AS GIVEN BY THE RESPONDENTS,IN THE AGE GROUP OF 55-65 & Above



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60 45 4 6 2 2 119 19.8


48 15 16 9 4 0 92 15.3


42 25 8 3 6 2 86 14.3


48 25 12 6 2 1 94 15.7


54 15 8 3 4 3 87 14.5


48 25 12 3 4 1 93 15.5Table 3.5

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Findings

CTVs

Among the age group of 15-25,they preferThe Features & Price of a CTV before buying,though this group is not the direct customer,but their views are also important,while a family is taking a collective decision,to buy a CTV.

The age group of 25-35 is a major purchasing group for CTVs,as this group is of the young adults,who as per the study has givenFeatures,Brand &Family preferencees as overall Rank 1,2,& 3 respectively

The age group of 35-45 is also the major purchaser of CTVs as the major purchase decisions are taken by this age group,in the Indian family structure,this group should be given preference

Refrigerators

The age group of 25-35,is the major purchaser of refrigerators,& they had given preference towards,Aesthetics,Brand & Features respectively.

The age group of 35-45 is also the major purchaser of refrigerators,they had expressed their preference towards,Brand,Family Prefference & After Sales Service

Computers

For computers,the major purchaser group is the age-group of 15-25 & 25-35 respectively, they had experessed Their preference towards.

The preference of the 15-25 age group has ranked Features,Asthetics & Brand as their 1 st ,2nd

& 3rd preference respectively. The age group of 25-35 has ranked Brand,Features & Price as their first three ranks

respectively.

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Suggestions & Recomendations

General Suggestions ( On which the study can be proceeded further,in details)

Different requirements to address urban and rural population.

Products need to address Indian working environment.

Innovation in Advertising and Promotions.

Advertisements should focus more on factors other than price,like After Sales Services.

The distribution channel should be even stronger,even in rural areas.

Growing urbanization,& increase in the number of nuclear families are creating a huge wave of opportunities for the Consumer durable market.This trend is also very much prevalent in

Kolkata,thus marketers should emphasize on the major factors affecting consumers purchase decision,so that they can create an visibility & positive image in the mind of the customer

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Limitations :

The study is expected to give meaningful insights but can still suffer from some basic limitations as mentioned below

1. Time Constraint

As the time given to complete the project is lesser than actual time required to complete similar studies,the quality of findings may get affected.

2. Sample Size

The sample size estimated is 100 (hundred),thus the findings from the same may not be reperesentative of the actual population.

3. Classifying Income Segments

Getting required number of respondents belonging to each Income segment may be tough. As unless somebody is filling up the questionnaires, its not possible to accurately guess the Income class the respondent is belonging to.

4. Respondent’s Bias

Some respondents may not state their actual income,& thus under/overstatement of the same is possible. Moreover some respondents might also not state their actual reasons while making purchase decisions (eg Price),due to their ego states.

All the above limitations can affect the actual collected data, but care has been taken to minimize such discrepancies.

Above all the limitations this study is expected to be useful with minimum possible errors & discrepancies.

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Literature Review

Newspapers

The Economic Times/Brand EquityThe Telegraph/MetroThe Businessline/Brandline

Magazines

The BusinesslineThe Gadget Guru

Books

Consumer Behaviour published by ICFAI PublicationsIntegrated marketing Communications published by ICFAI PublicationsConsumer Behavior , Text and Cases.by Satish Batra and S.H.H.Kazmi

Websites

www.markettrends.comwww.indianbrandequity.co.inwww.consumerternds.netwww.marketchoice.net

Professionally Supported by

Mr Biswarup Samanta ( Mentor & Faculty IT INC Dum Dum)

Note : As the study is mostly done on primary data,thus no part of any secondary data is duplicated or reproduced.

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http://www.marketchoice.net/

http://www.consumerternds.net/

http://www.indianbrandequity.co.in/

http://www.markettrends.com/

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