consumer buying behavior by tesfaye tumdedo

1. INTRODUCTION

The earliest detergent substance was undoubtedly water; after that, oils, abrasives such as wet sand, and wet clay. The oldest known detergent for wool-washing is stale (putrescent) urine. Other detergent surfactants came from saponin sand ox bile. The detergent effects of certain synthetic surfactants were noted in 1913 by A. Reychler, a Belgian chemist. The first commercially available detergent taking advantage of those observations was Nekal, sold in Germany in 1917, to alleviate World War I soap shortages. Detergents were mainly used in industry until World War II. By then new developments and the later conversion of USA aviation fuel plants to produce tetra propylene, used in household detergents, caused a fast growth of household use, in the late 1940s. In the late 1960s biological detergents, containing enzymes, better suited to dissolve protein stains, such as egg stains, were introduced in the USA by Procter & Gamble.

1.1. INDIAN DETERGENT MARKET:

The first companies to manufacture detergents in India were HLL and Swastik. HLL test marketed Surf between 1956 and 1958 and began manufacturing it from 1959. Swastik launched Det, a white detergent powder, in 1957. By 1960, Det had made rapid inroads in eastern India. Surf, a blue detergent powder, became the national market leader with dominant positions in the west, north and south. In the early 1960s, the total volume of detergents manufactured in India grew from around 1600 tons to 8000 tons. HLL dominated the market with a share of almost 70 % compared to Det‟s 25%. In 1966, another player entered the fray. Tata Oil Mills Company (TOMCO) launched its detergent powder 'Magic'. In 1973, TOMCO introduced 'Tata's Tej' in the low-priced segment. TOMCO unveiled another economy detergent powder called OK in 1977. Hindustan Unilever (HUL) is the market leader in Detergent market (approximately 38% market share) followed by other majors like Ghari, Nirma & Henkel. The major brands in these segments are Wheel, Ghari, Nirma, Surf, Tide, Rin.

1.2. CRITICAL SUCCESS FACTORS IN DETERGENT MARKET:

The critical success factors in detergent industry are: Brand Equity

Has distinctive Superior & Consistent quality

Satisfies customer needs

Provides better value for money than other competing brands

Distribution Network

Availability near the consumer

Low unit value products & frequently purchase

By Tesfaye Tumdedo 1

Research on Consumer Buying Behavior of Detergent Products

1.3. DETERGENT INDUSTRY SEGMENTATION:

Detergent market in India can be segmented in three broad categories: Premium Category: It includes Ariel Ultramatic, spring clean Surf Automatic, Quick Wash etc. Mid-Priced Category: It includes Surf Excel Blue, Tide & Stain Champion etc. Mass Market Category: It includes Nirma, Ghari, Wheel, Fena etc

1.4. BRIEF PROFILE OF DETERGENT MAJORS:

Hindustan Lever Ltd: Hindustan Lever Ltd (HLL) is India's largest Fast Moving Consumer Goods (FMCG) Company. HLL's brands like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond's, Sunsilk, Clinic, Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, Knorr-Annapurna, Kwality Wall's are household names across the country and span a host of categories, such as soaps, detergents, personal products, tea, coffee, branded staples, ice cream and culinary products. Presently, HLL has over 16,000 employees including over 1,200 managers. Its mission is to "add vitality to life." the erstwhile Tata Oil Mills Company (TOMCO) merged with HLL, effective from April 1, In February 2007, the company has been renamed to "Hindustan Unilever Limited" to strike the optimum balance between maintaining the heritage of the Company and the future benefits and synergies of global alignment with the corporate name of "Unilever". The detergent brands by HUL in India are Surf Excel, Rin & Active Wheel. Procter & Gamble : William Procter, a candle maker, and James Gamble, a soap maker, immigrants from England and Ireland, respectively, who had settled earlier in Cincinnati, who met as they married sisters, Olivia and Elizabeth Norris, formed the company initially. Alexander Norris, their father-in law, called a meeting in which he persuaded his new sons-in-law to become business partners. On October 31, 1837, as a result of the suggestion, Procter & Gamble was born.

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In the 1880s, Procter & Gamble began to market a new product, an inexpensive soap that floats in water. The company called the soap Ivory. The company began to build factories in other locations in the United States because the demand for products had outgrown the capacity of the Cincinnati facilities. The detergent brands by P&G in India are Ariel & Tide. Nirma Ltd: A Humble Beginning In 1969, Karsanbhai Patel (Patel), a chemist at the Gujarat Government's Department of Mining and Geology manufactured phosphate free Synthetic Detergent Powder, and started selling it locally. The new yellow powder was priced at Rs. 3.50 per kg, at a time when HLL's Surf was priced at Rs 15. Soon, there was a huge demand for Nirma in Kishnapur (Gujarat), Patel's hometown. He started packing the formulation in a 10x12ft room in his house. Patel named the powder as Nirma, after his daughter Nirupama. By 1985, Nirma washing powder had become one of the most popular detergent brands in many parts of the country. By 1999, Nirma was a major consumer brand – offering a range of detergents, soaps and personal care products. Nirma's success in the highly competitive soaps and detergents market was attributed to its brand promotion efforts, which was complemented by its distribution, reaches and market penetration. Nirma's network consisted of about 400 distributors and over 2 million retail outlets across the country. This huge network enabled Nirma to make its products available to the smallest village.

The detergent brands by Nirma in India are Nirma Washing Powder,Super Nirma Washing Powder& Nirma Popular Detergent Powder

Rohit Surfactants Private Limited:

A family business started around 1970 for manufacturing & marketing of oil soap with a turnover of a couple of Lac turned into a corporate in the year 1998 along with the manufacturing of detergent With the passage of the time, by adopting latest technology & using premium quality raw material. Company does the manufacturing and trading of detergents, toilet soaps and other FMCG products. It developed detergent powder under the brand name „Ghari‟.

2. LITRATURE REVIEW

2.1. CONSUMER BEHAVIOUR

To better understand the importance of consumer-based brand equity on consumer

perceptions of a brand, it is necessary to have an overview of consumer behavior. Belch and

Belch (2004) defined consumer behavior as “the process and activities people engage in

when searching, selecting , purchasing, using, evaluating and disposing of product and

services so as to satisfy their needs and desire”.

According to Ugala (2001), two types of consumer behavior exist, i.e. cognitive and

experience-oriented consumer behavior. Consumers with cognitive behavior are logical and

rational consumers while experience oriented consumers have more emotional reason to

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want to purchase a product. Dalqvist and Linde (2002) characterized consumer behavior

into four i.e. rational, learned, unconscious and social behavior and they are represented by

these three steps: knowledge→ Attitude→ Action.

Rational behavior: consumers with rational behavior first get some knowledge

about the product and what it may offer. By assessing this information, they get an

attitude toward the product and finally act; whether or not to buy the product. This

type of behavior is mostly common when consumers are purchasing expensive

products for example cars. (KNOWLEDGE→ATTITUDE→ACTION)

Unconscious behavior: consumers with unconscious behavior begins with an

attitude towards the product, this attitude may either come from emotions or

feelings. This attitude will lead the consumers to find out more information about

the product and get knowledge about it and finally act their choice.

(ATTITUDE→KNOWLEDGE→ACTION)

Learned behavior: this type of behavior stems from habits. These Consumers do not

plan their choice of product, they do it by habit. Example of this behavior is when

buying a newspaper. (ACTION→KNOWLEDGE→ATTITUDE)

Social behavior: consumers with social behavior choose their products as a result of

the social environment which they live in. Their status, lifestyle and influence from

others determine the product they will buy. (ACTION→ATTITUDE→KNOWLEDGE)

Culture has been seen to have one of the greatest influences on consumer behavior.

According to Kotler et al (1999), apart from cultural factors other factors such as social,

personal, and psychological factors have influence on consumer’s behavior.

Cultural factors have to do with the culture, subculture or social class in which a

consumer identifies his /her with.

Social factors have to do with the consumer’s family, reference groups and the

consumer’s role and status.

Personal factors are the lifecycle status and age of consumers. Also, the economic

situation, occupation, self-concept and consumers personality.4


Psychological factors include perception, motivation, learning, attitude and belief of

the consumers.

2.2 CONSUMERS BUYING BEHAVIOUR

According to söderlund (2001), consumers buying behavior has to do with the attitude,

intention, preference and strength to commitment and the consumer’s ways of

identification. Consumers buying behavior can also be referred to as the buying behavior of

the final consumer. Consumer buying behavior is a complicated issue due to the fact that

many internal and external factors have effect on consumers buying decision.

According to Kotler et al (1999), there are five stages of consumers buying behavior. This

can be seen in the diagram below.

Figure 1: buying decision process; Source: Kotler et al (1999) pg.254

From the diagram above, it can be seen that consumers passes through five stages in their

buying process. According to Kotler (1999), Consumers do not pass through all the stages in

their everyday purchase. For example in everyday commodity purchase, information search

and evaluation are omitted. In other words, consumers faced with complex purchase

situation pass through all this stages.

Need recognition: this is when the consumers defined their problem or need. A need

could arise either as a result of internal or external stimulus. Example of an internal

stimulus is when you need to eat something as a result of hunger. External stimulus

arises from commercial on television after which the consumer thinks that the

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Information Search

Need Recognition

Evaluation of Alternatives

Purchase Decision

Post-Purchase Behaviour


brand/product is needed. Therefore it is of importance that marketers find out what

stimulus attracts interest in their brand.

Information search: this is when consumers start to search for information either

through commercial source, personal source, public source, and experiential source.

This information enhances the consumer’s knowledge and awareness of the

available brand.

Alternative evaluation: this is the stage whereby the consumers evaluate and rank

alternative brand based on the information they have. Such information can be price

or quality etc.

Purchase decision: this is when consumers purchase the product. Consumer’s

perception of a brand can be influenced by unforeseen situational factors and

attitude of others.

Post-purchase decision: this is when the consumers compare their expectation and

perceived performance. Kotler et al (1999) stated that they get satisfied when their

expectations are the same with the product performance.

Differences in consumers behavior depends on the type of product the consumer is buying.

Kotler et al (1999) designed a buying behavior model which consisted of four different buyer

behaviors.

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High involvement Low involvement

Significant differences between brands

Complex buying behavior

Variety-seeking behavior

Few differences between brands

Dissonance-reducing behavior

Habitual buying behavior

Table 1: four type of buyer’s behavior, source: Kotler et al (1999) p.251

Complex buying behavior is when consumers purchase a high quality brand and

before making the purchase he seeks a lot of information about it.

Habitual buying behavior is when consumers purchase a product out of habit.

Variety seeking buying behavior is when consumers go around shopping and

experiment with a variety of product.

Dissonance reducing buying behavior is when a buyer is so highly involved with

buying a product as a result of the fact that it is expensive or rare.

3. Research Design

3.1. PROBLEM DEFINITION

Cleaning product play an essential role in our daily lives. By safely and effectively removing soils, germs and other contaminants, they help us to stay healthy, care for our homes and possessions and make our surroundings more pleasant. Detergent plays an important role in FMGC sector. The overall soap penetration in Indian house hold is more than 90%. When compared to other sectors investors prefer to make their investment in this sector mostly. However there is high growth tendency for FMCG sector it faces some difficulties in achieving their destination. Hence the purpose of this Research is to identify the factors that influence on consumer buying pattern particularly in Delhi. Detergents are used by each one in their day to day life, that’s the reason behind to select this particular product for the research.

3.2. Objectives of the research

To identify customer preference of on form of detergent

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To find out the customers’ frequency of use of detergent in a month.

To find the brand loyalty of the consumers.

To find the product attributes they look for while buying a detergent.

To research the reasons that made the customers switch from their previous brands.To find the mode of communication through which they came to know about the qualities of their present brandTo find the role of packaging in the purchase behavior of a product- quantity

3.3. Research methodology/process

o Defining the research problem

o Review of related literature.

o Collection of secondary data and primary data (by using questionnaire). To collect data I used the questionnaires method. The main area of the study was Delhi. Target customers were mainly business persons and students. The age group was not defined. The sources of data collection used in the study are both primary and secondary in nature. A questionnaire was prepared and distributed to 100 respondents in Delhi. Sampling technique used was simple random sampling. The research design used in my research was descriptive incorporating knowledge from primary and secondary information analysis.

o Analyses and Interpretation of data. In my research I used percentage method for analysis and interpretations of the collected data

o Preparing the research report

4. Findings and Analysis

4.1. General Profiles of sample Respondents In sample respondents taken 62% males and 38% were females.

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Age of Respondents can be seen as shown below. 44% of the respondents were at the age

bracket of 20 to 25 years of old followed 21% of below 20 years and 15% of 25 to 30 years.

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4.2. Research Findings and analysis

The responses of 104 customers’ were that most them were using powder for their washing of clothes. This data can be used well by detergent producing organization. The data shows that people are using more of powder form detergent which is mostly compatible with washing machine, which presents a big market share which can be satisfied by moving towards powder form of detergent.

Figure 2 shows that Surf Excel is the most preferred brand followed by Tide, Ariel and Ghari

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Figure 3 shows that most of the customers are brand loyal and do not change their brand easily. 29% of the sample says that they are using their present brand since last 5 years or more and 15% says they are using 3 to 4 years and 8% 4 to 5 years. In general 75% of respondents are using the preferred brand for 2 to more than 5 years.

Figure 4 suggests that most of the customers are very brand loyal towards the brand they are using and do not change easily and hesitate to go to a new brand.

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As can be seen in the figure 5, 60 % of respondents would like to spend Rupees 150 up to 200 per month. So this is significant amount which enable to get adequate market share in the detergent market segment by providing value to the consumers for the money in exchange.

In Figure 6 the package quantities mostly preferred by consumers were: - 39 % respondents prefer 1500gm to 2000gm followed by 29 % of up to 500gm and 21 % of 500 gm to 1000gm. Therefore it is found that 89% of respondents prefer package quantities from 500gm to 2000gm. Detergent companies should give attention on the package quantity of the above range.

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As can be seen in the Figure 7 consumers prefer to buy detergent from supermarkets 44% respondents followed by 29% convenience store and 27% Neighborhood store.

As can be seen in figure 8; 44% respondent consumers made purchasing decision once in a month followed by 32 % twice in a month and 21 % of them responding as three times in a month. Therefore I can say consumers made planned purchase within a month mostly once so impulse purchase less likely to happen.

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Figure 9 summarizes that most people have learned from the means of TV advertisements. This shows us as to how effective is TV advertisements as a means of promotion of brands.

The figure 10 shows that people are more season conscious while choosing their detergent. This means that people want their detergents to be adaptive to different clothes as the season demands.

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The Figure 11 summarizes that the reason behind changing their previous brand was lack of better cleaning and special features. This has been the better cleaning factor with 28.16% and 22% being Special features. It could be like usages with the rough water etc. both of them have been shown have the most effective reason for changing of the previous brand. Therefore I can conclude that if a brand was to increase its demand and market share it should concentrate on providing better cleaning power along with special features.

As can be seen in Figure 12 from sample respondents 23.08% put quality as a priority in

their mind before purchasing detergent followed by 19% cleaning power and 17% of price.

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In figure 13 50.49% of the consumers said their detergent buying decision influenced by family followed by 19% social media and 14% by friends

As can be shown in Figure 14 More than 55% of respondents are willing to try new products with different special features. Therefore detergent companies need to keep investing in innovation to add special features to the detergent products.

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5. RESEARCH RESULTS:

After analyzing the findings, the following inferences can be drawn : The most appropriate form of detergent was powder Surf Excel is the most preferred brand followed by Tide, Ariel & Ghari. Most of the customers are brand loyal and do not change their brand easily with the

hesitation to go to a new brand. 75% of the sample says that they are using their present brand since last 2-5 years or more.

The reason behind changing their previous brand was lack of better cleaning and special features. These have been the better cleaning factor with 28.16% and 22% being Special features. It could be like usages with the rough water etc. both of them shown have the most effective reason for changing of the previous brand.

People want their detergents to be adaptive to different clothes as the season demands.

Most people learn from the means of TV advertisements. This shows us as to how effective is TV advertisements as a means of promotion of brands.

Quality is the most important factor in selecting a detergent followed by cleaning power and price.

Detergent buying happens most of the times in supermarkets with 44% respondents were prefer it.

44% of the respondents buy detergent once in a month. It was found that detergent with package quantity of 500gm to 2000gm were

preferred with 68% respondents said so. 60% of respondents would like to spend Rs 150 to 200 per month on detergent. 50.49% of the consumers said their detergent buying decision influenced by family

followed by 19% social media and 14% by friends More than 55% of respondents are willing to try new products with different special

features. Therefore detergent companies need to keep investing in innovation to add special features to the detergent products.

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6. Conclusions

The findings of the analysis showed that the customers are mostly brand loyal in their purchase of detergents and do not change their brand easily. The reason behind changing their previous brand was lack of special features as usage with the rough water, better cleaning factor etc. It shows that if a brand has to increase its demand and market share it should concentrate on providing special features. The television advertising is an effective tool of creating customers in detergent sector today. The research also shows that quality is the most important factor in selecting a detergent followed by cleaning power and price and consumers buying decision was influenced mostly suggestions by family members followed by social media and friends. This indicates that social media is upcoming platform to influence purchasing decision. Most respondents are willing to try new products with different special features. Therefore detergent companies need to keep investing in innovation to add special features, to improve packaging of the detergent products.

7. REFERENCES: 1. Schiffman, Leon G & Kanuk, Leslie Lazar, “Consumer Behavior”, 9th Edition, Prentice

Hall of India Pvt. Ltd. 2009.

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2. Kotler, Philip “Marketing Management – Analysis, Planning, Implementation & Control, 9th Edition, Prentice Hall of India Pvt. Ltd. 1997.

3. http://www.authorstream.com/Presentation/neeraj.sah1000-118541-marketing-airtel-ariel-market-penetration-strategy-1-education-ppt-powerpoint/

4. http://www.encyclopedia.com/topic/detergent.aspx

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consumer buying behavior by tesfaye tumdedo

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