1.1 INTRODUCTION

Marketing is an integrated communications-based process through which

individuals and communities discover that existing and newly-identified needs and wants

may be satisfied by the products and services of others. Marketing is defined by the

American Marketing Association as the activity, set of institutions, and processes for

creating, communicating, delivering, and exchanging offerings that have value for

customers, clients, partners, and society at large.

Marketing is influenced by many of the social sciences, particularly psychology,

sociology, and economics. Anthropology and neuroscience are also small but growing

influences. Market research underpins these activities. Through advertising, it is also

related to many of the creative arts. So it is clear that marketing concept in the present

scenario is consumer oriented. Marketing efforts are mainly for attracting the customers

and satisfying their expectations.

The project, study with Rani Food Products, Vadakara in order to understand the

functions and activities connected with marketing department. The study includes

identifying the purchase influencing factors. Then land of spices and other goodies, this

is how the rest of the world identifies Kerala, the small southern state in the Indian Sub-

continent. The trade ties in spices and other products, which this small state has had with

many European and Arab nations dates back to many centuries.

Mr. V.R Krishnan, a commerce lecturer by profession, gave up his job to start Rani

Private Limited 30 years back. The company has its headquarters in Vatakara, in the

Malabar region of Kerala. A team of dedicated and expert personnel works in a

sophisticated and technologically superior environment. Modern machineries are used to

increase quality of work and also for ensuring their employees a good and safety

working conditions. Thus assuring premium spice powder that remains pure and fresh.

A sincere effort is made to bring out the factors behind the consumer buying decision

of non-durable goods through the present study.

1 | P a g e

1.2 PROBLEM DEFINITION

“Customer is the king” in any market. The success and failure of any product depends

on how well it caters the needs and wants of the targeted customer. The food products are

not different from this concept. Winning the confidence of customers is necessary. It will

result in increased sales and increase in customers.

Attaining new customers and retaining the existing customers are the main focus of

ever company. For that it is important for them to understand the consumer behavior.

Consumer behavior is influenced by so many factors. The behavior of one person will not

be same in different situation. Like wise behavior of two customers will not be same. So

it is very significant for all the companies to understand the factors affect the behavior of

the consumers while they take a purchase decision. So the research problem of this study

entitled “factors influencing customers buying decision of non durable goods” is as

follows

“What are factors influencing decision of customers while they buy purchase

non durable goods?”

1.3 SIGNIFICANCE OF THE STUDY

Rani Private limited company is a well known spice powder manufacturing

company in Kerala. They also deal with the exporting of packed spice powder to Arab

countries and European countries. Today there are so many companies dealing with spice

powders. So the competition in the industry is immense, for survive in the market for any

company, it must study the factors influencing the consumer’s behavior while he select a

particular product. So it is clear that this study is vital for all the companies in the market

to achieve their objectives by satisfying the needs of consumers.

2 | P a g e

The study is more concerned with the consumer behavior. The decision making is

processes where by a buyer decide to purchase a particular product out of various

alternatives. Thus the study conducted is of real importance as it helps the management

to have a good knowledge of the buying behavior. The study also helps to understand the

reasons why one chooses the organization’s product and hwy some choose the product of

that of the competitors. The study of consumer behavior provides critical information to

the marketing managers in developing the marketing strategies and tactics.

1.4 SCOPE OF THE STUDY

The consumer or buyer is the person or group of persons, who decide what to buy

, when to buy and what not to by. In competitive environment one cannot thrust a

product on consumer. He has to produce what is demanded or what can be demanded.

The marketing personnel study consumer behavior to find out what can be sold and what

good s and services are likely to be rejected. Through the study he is motivated to buy or

not to buy after study of consumer behavior through market research or otherwise

manufacturer tries to find out how sales can be pushed of existing products, what

changes are required in existing products, what changes are required to get larger market

share. The more important 66more important function and purpose is to influence the

behavior of consumers through advertisements, incentives and other methods so that

consumer behavior is studied buy marketing personnel to influence the behavior of

consumers after studying what factors decides the behavior for a particular product,

persons, groups or regions.

The scope of the study covers the areas of various products offered by Rani

Private Limited. The research study is limited to the area of district of Calicut and

Malappuram. The factors which influence consumer buying decisions like price of the

product, brand name or reputation of the company, attributes of the product,

advertisement, usage, accessibility, quality of the product, previous experience etc are

taken into consideration.

3 | P a g e

1.5 OBJECTIVES OF THE STUDY

1.5.1 PRIMARY OBJECTIVE

1. To study the factors influencing consumer buying decision of non durable goods.

1.5.2 SECONDARY OBJECTIVES:

1. To identify whether the price of the product have any influence on the consumer

buying behavior.

2. To study the association with brand name of the company and the consumer

buying behavior.

3. T o find out influence of advertisement on the consumer buying behavior.

4. To study the influence of the family/friends opinions on the consumer behavior.

5. To study the effect of previous experience about the product on the consumers

purchase decision.

1.6 RESEARCH HYPOTHESIS

A hypothesis is a preliminary or tentative explanation or postulate by the researcher

of what the researcher considers the outcome of an investigation will be. It is an

informed/educated guess. It indicates the expectations of the researcher regarding certain

variables.  It is the most specific way in which an answer to a problem can be stated.

Research hypotheses are the specific testable predictions made about the

independent and dependent variables in the study. Hypotheses are couched in terms of

the particular independent and dependent variables that are going to be used in the study.

The research hypothesis of this study is as follows.

4 | P a g e

Ho: There is no significant relationship between price of the product and consumer

buying behavior.

Ho: There is no significant relationship between brand name of the company and

consumer buying behavior.

Ho: There is no significant relationship between company advertisements and consumer

buying behavior.

Ho: There is no significant relationship between family/friends opinion and consumer

buying behavior.

Ho: There is no significant relationship previous experience on the products and

consumer buying behavior.

1.7 RESEARCH METHODOLOGY

Research is a systematic method of finding solutions to problems. It is essentially

an investigation, a recording and an analysis of evidence for the purpose of gaining

knowledge. According to Clifford woody, “research comprises of defining and

redefining problem, formulating hypothesis or suggested solutions, collecting, organizing

and evaluating data, reaching conclusions, testing conclusions to determine whether they

fit the formulated hypothesis”1

1.7.1 Sampling Design.

A sample design is a finite plan for obtaining a sample from a given population.

Simple random sampling is used for this study.

1.7.2 Universe.

The universe chosen for the research study is the whole customer’s of Rani

Private Limited.

1 Kothari C R. “Research Methodology-Methods & Techniques”-2nd revised edition (2007) New Age International Publishers- New Delhi.

5 | P a g e

1.7.3 Sample Size.

Number of the sampling units selected from the population is called the size of

the sample. Sample of 100 respondents were obtained from the population.

1.7.4 Sampling Procedure.

The procedure adopted in the present study is probability sampling, which is also

known as chance sampling. Under this sampling design, every item of the frame has an

equal chance of inclusion in the sample.

1.7.5 Methods of Data Collection.

The data’s were collected through Primary and secondary sources.

1.7.5.1 Primary Sources.

Primary data are in the form of “raw material” to which statistical methods are

applied for the purpose of analysis and interpretations.

The primary sources are discussion with administrative officers of Rani Private

Limited, data’s collected through questionnaire.

1.7.5.2 Secondary Sources.

Secondary data’s are in the form of finished products as they have already been

treated statistically in some form or other.

The secondary data mainly consists of data and information collected from

records, company websites and also discussion with the management of the organization.

Secondary data was also collected books.

1.7.6 Nature of Research.

Descriptive research, also known as statistical research, describes data and

characteristics about the population or phenomenon being studied. Descriptive research

answers the questions who, what, where, when and how.

Although the data description is factual, accurate and systematic, the research

cannot describe what caused a situation. Thus, descriptive research cannot be used to

create a causal relationship, where one variable affects another. In other words,

descriptive research can be said to have a low requirement for internal validity.

6 | P a g e

1.7.7 Questionnaire.

A well defined questionnaire that is used effectively can gather information on

both overall performance of the test system as well as information on specific

components of the system. A defeated questionnaire was carefully prepared and specially

numbered. The questions were arranged in proper order, in accordance with the

relevance.

1.7.8 Nature of Questions Asked.

The questionnaire consists of open ended, dichotomous, rating and ranking

questions.

1.7.9 Pre-testing

A pre-testing of questionnaire was conducted with 20 questionnaires, which were

distributed and all of them were collected back as completed questionnaire. On the basis

of doubts raised by the respondents the questionnaire was redialed to its present form.

1.7.10 Sample

A finite subset of population, selected from it with the objective of investigating

its properties called a sample. A sample is a representative part of the population. A

sample of 100 respondents in total has been randomly selected. Actual samples are taken

from the Calicut and Malappuram district. The response to various elements under each

questions were totaled for the purpose of various statistical testing.

1.7.11. Variables of the Study.

Direct variables of the study are the buying behavior of the customers of Rani

Private Limited.

Indirect variables are price, brand name, advertisement, reference group, previous

experience and quality of the Rani Food Products.

1.7.12. Presentation of Data.

The data are presented through charts and tables.

1.7.13. Tools and Techniques for Analysis.

Correlation is used to test the hypothesis and draw inferences.

7 | P a g e

2. LITERATURE REVIEW

2.1 consumer behaviour

Consumer behaviour is the study of when, why, how, where and what people do

or do not buy products. It blends elements from psychology, sociology, social

psychology, anthropology and economics. It attempts to understand the buyer decision

making process, both individually and in groups. It studies characteristics of individual

consumers such as demographics and behavioural variables in an attempt to understand

people's wants. It also tries to assess influences on the consumer from groups such as

family, friends, reference groups, and society in general.

Belch and Belch define consumer behaviour as 'the process and activities people

engage in when searching for, selecting, purchasing, using, evaluating, and disposing of

products and services so as to satisfy their needs and desires.

2.2 Factors influencing consumer behaviour

The behaviour of consumers is dependent on a number of factors which may be

economic or non-economic factors and dependent upon economic factors such as

income, price, psychology, sociology, anthropology, culture, and climate. Therefore the

study is dependent upon all these science and consumer behaviour scientists study it

through research and they believe that these behaviour can be influenced which has

proven by sales promotion of a large number of products. However there is dispute

whether customer should influenced or not and what methods should applied to influence

him.

When one decides to buy a particular product it is an economic decision and

expectations play an important role. One expects from a product or services best of

performance, durability, and dependability. The decision making is a process where by a

buyer decides to purchase a particular product out of various available alternative. The

process of selection and final selection is known as buying decision making.

8 | P a g e

Throughout the buying process, various factors may influence the buyer. All

these factors which determine the buyer or consumer behavior are broadly classified into

five – psychological factors, social factors, cultural factors, personal factors and

economical factors.

2.2.2 Psychological factors.

The psychological factors are factors that operate within individuals partly

determine the people’s general behavior thus influencing their behavior as

consumers. The following are the important psychological factors.

2.2.2.1. Consumer needs and motivation

Motive lies in every buyer. It arises from the needs and wants. The process of

motivation stimulates it and leads him to buy. Thus motive is a stimulated need which an

individual wants to satisfy. A simple example is that when we feel hungry, we may

search for restaurant. Hunger is the motive and search is the action. Thus motivation is a

driving force within an individual which impels him to action to satisfy his needs.

Buying behavior is the result of three factors multiplied by each other – the ability to buy

something, the opportunity to buy it and the motivation (wish, need, desire) to do so.

2.2.2.2. Perception

Different people perceive the same thing at the same time in different ways.

Similarly the same individual at different times may perceive the same thing in a number

of ways. Perception is the process of selecting, organizing and interpreting information

inputs to produce meaning. Information inputs are sensation received through sight,

taste, hearing, smell and touch. When we here an advertisement ,see a friend, smell

polluted air or water or touch a product we receive information input. The

information is conveyed to the brain from the eyes, ears and other sense organs. The

brain’s task is then to take this raw material and use it to help us make sense that

environment through the process of perception

.

In short, perception is the process by which individual receives and interprets the

incoming stimuli through different senses. The different sights, sound, smell, taste

and sensations that we felt are known as stimuli . Perception shapes the behavior of an

individual. This play an important role in buying decisions.

9 | P a g e

2.2.2.3. Learning

Learning greatly influences consumer behavior. Learning is the process of

acquiring knowledge. It is the process of creating changes in behavior through

experience and practice. Learning occurs through the interplay of drives, cues, responses

and reinforcement. A drive is a strong internal stimuli which satisfy the drives (i.e.

Needs). Cues are minor stimuli which determine when, where and how the buyer

responds. Response is the individual’s reaction to the cues. Reinforcement takes place

when consumer is satisfied with the response

.

The important of learning theory for marketers is that they can create demand for

a product by associating it with strong drives, using motivating cues and providing

positive reinforcement.

2.2.2.4. Beliefs and attitudes.

A person forms certain beliefs and attitudes in his mind. It is on experience and

learning. A belief is a descriptive thought that a person holds about something. Such

thoughts are based on learning, opinion or faith. For example, a consumer may believe

that Maruti cars are less costly and fuel efficient. These beliefs are responsible for

developing product and brand images. Thus beliefs influence buying behavior.

Attitude represents a person’s feelings towards a particular object or situation. It

may be positive, negative feelings about products, service, and companies. Attitudes are

shaped and influenced by demographics, social factors and personality of individual

himself. Attitude lead people to behave in a particular way. Attitude plays an important

role in purchase decisions. Marketers should understand and influence consumer

attitudes towards their products.

2.2.3. Cultural factors

Culture encompasses the social values, attitude, towards work, social intercourse,

laws, customs, traditions, etc. Cultural factors are briefly discussed as follows.

10 | P a g e

2.2.3.1. Culture

Culture is the most fundamental factor influencing a person’s wand and behavior.

Culture is defined as all the environment that is created by people. It is a set of ideas,

customs, values, art and beliefs that are produced or shared by society and passed on

from generation to generation. Culture influences the buying behavior of the consumer.

It sets the life style and provides guidelines regarding what should and should not be

done. Thus smoking and drinking are common habits in the west. In eastern countries

these habits are not widespread. Dining on table and with the help of knives and fork is

widely prevented in the west while the people of eastern countries generally eat on the

floor and with the fingers (except Japanese and Chinese). This means that the market for

drinks or forks is limited in eastern countries. Thus culture influences what we eat and

wear, how we relax and where we live.

2.2.3.2. Sub- culture

Culture within a culture is called sub-culture. A sub-culture is a psychological,

religious, social or geographical source of group identification. Thus a person living in

Kerala would feel that he is different from the one living in Tamil Nadu. Psychological,

sub-culture that are important to people and their sense of identity can have an influence

on their behavior.

2.2.3.3. Social class.

There is a relationship between social class and consumption pattern. Asocial

class is a group of people with similar values, interest and behavior within a society.

Consumers buying behavior is determined by the social class to which they belong rather

than by their income alone. The social class is based on income, education, occupation,

family history, social status etc

.

Sociologists divide most societies into three classes – upper, middle, and lower.

Shopping pattern, savings, and spending habit, leisure time activities etc. Differ in

different social classes. Upper class buys products of high quality irrespective of price.

Middle class buy items to show their status in the society. They live well. They spend

their leisure in park, museums etc. The lower middle class buy less expensive goods.

11 | P a g e

Lower class is composed of factory workers, coolies, petty service people who

are not well educated and have low income. They buy very simple and cheep products.

Thus we can see that the social class has a definite influence on products and brand

preferences.

2.2.4. Social factors

Forces that other people expert on buying behavior is called social factors. The

important social factors are as follows.

2.2.4.1. Reference group.

A person not only interacts with his family but also with the groups outside his

family. One such a group is reference group. Reference groups are the social, economic

or professional group. A reference group consists of family friend, relatives, friends, co-

workers, classmates, teenagers, sports group, music lovers, club membership etc. A

consumer buys those goods which his reference group buys. For example, our friend may

influence our choice of cloths, books, cinema and music. We consult our families in

choosing car’s, home, food, investment and furniture. It is necessary for the marketers to

identify the reference groups of their target markets.

2.2.4.2. Role and status.

A person plays s many roles in his or her life. His or her role changes with the

position her or she holds in a group- family, friends, organization, colleagues, neighbors

etc. People choose products that conform to their role and status in the society.

A person’s role and status exercise great influence on his or her buying behavior

also. For example, an advocate in his professional capacity may buy regularly up-to-date

law books. At home he may purchase durable goods kike refrigerator, furniture etc. He

may be the president of a rotary club. He may spend money on charities. Therefore, a

marketer should consider not merely the reference group of a customer but also the role

and status which he occupies in that groups.

12 | P a g e

2.2.4.3. Family.

Status, background, size etc. of the family influence the buyer behavior. In

nuclear families wife and dominates in purchase of goods, cosmetics, kitchenware,

washing machines and other household articles. Husband normally purchases

automobiles, electronic goods, insurance and the like. Some decisions are taken jointly

by husband and wife like furniture, interior decoration, housing etc. Children also

influence purchase of certain items like sports goods, clothes, recreational goods etc.

Thus the family is one of the important factors determine consumer behavior.

2.2.4.4. Family life cycle

The family life cycle is a useful factor influencing consumer behavior. The

family life cycle describes how a typical family evolves from bachelorhood to marriage,

from marriage to having children and maintaining them and then to solitary retirement.

At each stage in the cycle the needs, experience, income and family composition change.

The family life cycle is an excellent tool for market segmentation and for developing

market campaigns and advertisement.

The need of families in different stages of life cycle change considerably. For

example, young bachelors have more needs of cigarettes, showy clothing’s, camera etc.

Newly married couples spend more on clothing, recreations, shopping goods etc. As the

size of the family grows with addition of children, the expenditure increases on food,

clothing, toys, school bags, and umbrella and so on. As children get married and start

living separately, family grows old and there is considerable change in buying pattern.

For the older couples, the need shifts to simple clothing, drugs, spectacles, walking

sticks, traditional books and so on.

2.2.5. Personal factors.

Personal factors are those unique to a particular person. Important personal

factors influencing buyer decision making are as follows

2.2.5.1. Age and life cycle stage.

Needs are determined by age. Small children require milk powder, baby food;

toys etc. young adults require recreational facilities and transportation etc.

13 | P a g e

2.2.5.2. Personality.

One individual is different from others not only in physical features but also in

decision making .Every individual has a distinct personality that influence his behavior

and thus his behavior also. Personality of an individual refers to his personal trait which

determines his behavior. The personality traits such on confidence, dominance,

sociability, friendliness, aggressiveness, emotional stability, etc. are variables which

facilitate in analyzing consumer behavior

2.2.5.3. Self image.

People all have an image of which they are and reinforce this image through their

purchases. The tendency to believe that “you are what you buy” is especially prevent

among young people. Marketers utilize on the peoples needs to express the identity

through their purchases by emphasizing the image value of products and services. That is

why professional athletes, cricket players, film artists and musicians are frequently used

in advertisements.

2.2.5.4. Occupation

The occupation of a person decides the consumption pattern. For example, a

teacher would buy simple clothes, books, papers, etc. A company executive would buy

expensive cloths, visit by air, etc.

2.2.5.5. Life style.

Life style refers to an individual’s pattern of living expressed through

activities, interests and opinions. Life style patterns include the ways people spend

time, the extent of their interaction with others and their general outlook on life and

living. Life style has strong impact on many aspects of consumer buying decision

process. Life style influence consumer’s product need, brand preference, types of media

used, and how and where they shop.

2.2.6. Economic Factors.

2.2.6.1. Personal income: - Gross income of a person is composed of disposable income

and discretionary income. The disposable income is the balance remaining after

deducting taxes and compulsory deductions from gross income.

14 | P a g e

When disposable income rises, the expenditure on various items will increase and

vice versa. The discretionary income is the income remaining after meeting basic

necessaries of life. This income is available for buying shopping goods durables and

luxuries. The increase in this income raises standard of living.

2.2.6.2. Family income

Family income is the aggregate income of all members of a family. The family

income also influencing the buying behavior of the family. The family income remaining

after the expenditure on the basic needs of the family is made available for buying

shopping goods, durables and luxuries.

2.2.6.3. Savings.

When a person decides to save more out of his present income, he will spend less

on comforts and luxuries .However, his expenditure on profitable investment increases at

the same time.

2.2.6.4. Income expectations

If a person expects any increased in his income, he will buy durables such as

scooter, car, refrigerator etc on hire purchase or installment basis. If his future income is

likely to decline, he will restrict his expenditure to bare necessities.

2.2.6.5. Liquidity position.

The liquidity position of a person refers to his holding of cash and assets which

can be quickly convertible into cash, example, and bank balance marketable securities. If

an individual has more liquid assets, he goes in for buying comforts and luxuries

15 | P a g e

2.3 Alternative Evaluation

In almost every product there a number of alternatives for a consumer, be it a day

to day consumer product like grocery, butter, tea, coffee or consumer durables like TV’s,

refrigerators, air conditioners, motor bikes, cars, house and other services. Today there

are over 30 models and more are introduced now and then. Hence the consumer can

decide which one is the best alternative for him. Thus alternative evaluation can be

defined “as the process by which a choice alternative, is evaluated and selected to meet

consumer needs”

The selection of costly products are done with great care, one collects

information on various models available. Then he eliminates those which are beyond his

budget. In the next stage, he short lists two/three models and studies them in depth for

which he consult his friends, relatives and those who have technical knowledge about the

product and finally he select one model (chart 1). The number of stages differs from

product to products and situation to situation. In case of daily use choice is simple and

often it is made on the basis of past experience and short memory. Some of these

products are also purchased on recommendations of retailers or friends or influence of

advertisements. Most of the decision for non-durables i.e. FMCG is taken on the spot

mostly in the shop, sometimes based on past experience, sometimes induced by retailer

and some times influenced by advertisements of the producers.

2.3.1 Criteria for evaluation for buying Non durable Goods

2.3.1.1 Price

In poor countries like India often alternative evaluation is done on price

consideration which one can afford. For instance, in case of detergent, house or a car first

consumer decides the range which is in his reach or affordability or his willingness to

spend upon a product. Then he examines those brands which are within his brand. Many

companies initially succeeded because of low price. Japan after Second World War

captured many markets in different countries because of low price. Now china is

applying the same tactics for capturing the markets all around the world.

16 | P a g e

2.3.1.2 Brand i.e. Reputation of the manufacturer .

In most of the markets for each product a number of brands are available for

almost any product including rice, wheat flour, tea, coffee, vegetables, pickles, mobile, to

mention a few. The consumers give due weightage to brand reputation aspects and feel

that a product which has higher market share than others is rated high in choice making

by a consumer, be it a FMCG, consumer durables, services or others. Therefore,

marketers are always on alert to increase the market share.

2.3.1.3 Attributes

Different products have different attributes like taste, flavor, fragrance, durability,

performance etc. In case of products like basmati rice, tea, toothpaste, cosmetics, etc

brand is very important factor. But in India many unbranded products are selling largely

on price consideration especially in rural markets. But their color, smell, quality, shape

are also considered. There are hundreds of attributes which are considered for different

products.

2.3.1. 4 Experience

The prior experience about a product or service is an important factor to use it

again or not to use it. If one has good experience on one product, he may not consider

other brand and most likely will purchase it again unless better products have been

introduced in the market and consumer feels them better than tried product or service.

2.3.1.5 Familiarity

The familiarity about a product depends to a considerable extent on the

advertisement, friends, relatives and family members. In evaluation consumer consider

only those brands which are known to him which is different than personal experience.

2.3.1. 6. Trade-off

There are positive and negative aspects about a products or service. The

consumer will select that product which has more positive points than negative points.

He, in order words trade off negative aspects with positive aspects and product must

have net positive aspects to be considered for purchase.

17 | P a g e

2.3.1. 7 Number of alternatives to be considered.

At present in India for most of the products and many services there are a number

of alternatives with the exception of railways and electricity and to a certain extent

communication services. It is not possible for an average consumer to consider all of

them before making a choice. Therefore, he decides to restrict his choice to a few

models/brands. Normally an average consumer restricts his choice to 3 or 4 maximum

five brands. The marketer’s job is to make consumer aware about his product so that it

may be short listed for consideration.

2.3.1.8 Advertisement

The consumer has to be made only aware but familiar about a product so that it

may be included for alternate consideration set of consumers. This important job is done

by advertisements. Consumers of certain products feel that advertised products are better

and they discard those products which are not advertised frequently. Some consumers

feel that heavily advertised products are better than less advertised products. But if this

criterion is given high weightage, many products will be left out because 50% production

in India is in small scale sector and they rarely advertise their products or services. Thus

only limited weightage should be given to it.

2.3.1.9 Accessibility

Accessibility is an important criterion for certain products and services. For

example one will buy sweets from a nearby shop specially when there is some

unexpected guest even if quality is inferior. Similarly for provisions one looks to nearby

shops but some shops have started making supplies of order given on telephone at home

but this service could not overcome the problem of accessibility specially for those

consumers who buy only after seeing the product.

2.3.1.10. Memory

The memory of a consumer is a store of information, experience, quality, price

and many evaluations are memory based. Those factors which catch consumer’s eyes are

memory factors and decisions choice are made on the basis of impressions about various

alternative products.

18 | P a g e

But often memory of majority of consumers is short which is called working

memory, only very limited number of consumers have sharp and long memory. Hence

considerable weightage is given to proper display in stores so that it may catch the eye of

a consumer.

2.3.1.11 Objective of purchase

Some products and services can be bought by different consumers with different

objectives. Some products are purchased for utility and some others for show or status. If

one is throwing a party on the occasion of daughter’s marriage one will serve the best

possible foods and drinks. But on some other occasion the same consumer will choose

what he can easily afford. Thus objective often becomes main deciding factor of a

particular alternative.

2.3.1.12 Quality

The quality is an important factor in deciding to buy a particular brand or not. In

case of industrial machinery and raw materials by industry and in case of consumer

durables quality is an important selecting criteria: same is true for hospitals and many

other services in order that consumer gets the right quality and are not cheated various

countries have laid down standards for quality. In India, BIS has fixed standards.

2.3.1.13 Beliefs

Beliefs are subjective evaluation which have been formed overtimes based on

culture, experience, religion, region etc. if consumer believes that ‘A’ shop is good for

grocery, ‘B’ restaurant is good for lunch or dinner, ‘C’ picture hall is good for watching

movies, he will use this belief for purchase or utilizing the services. If some one believes

that foreign brands are better than domestic brands he will buy them only. This criterion

plays an important role in India. Similarly in daily consumer purchase decision this

aspect plays a very important role in final evaluation and selection and all other factors

become secondary and fall in the background. Hence the marketed constantly makes

consumers believe that his product is the best.

19 | P a g e

2.3.1.14 Performance

Consumer wants to evaluate how a product performs, be it a consumer durable or

service. If in his judgment out of ten alternatives, product X has a reputation for

performance, he will like to buy that product even if the price is higher. The evaluation is

based on information with the consumer and his relatives and friends experience. This

information is also collected from survey reports and other sources.

2.3.1.15 Consistency

The consumer prefers to purchase only this brands which remain constantly good

quality and do not reduce the quality with the passage of time. Therefore certain

producers have maintained same quality for generations. If a manufacturer of soap,

sweets or some other products reduces the quality soon sales curve drops. The consumers

expect same good quality will supplied consistently. But inspire of this fact many Indian

producers do not maintain consistency and they suffer.

2.3.1.16 Features

The consumers are also attracted by special features of a product whether it is

ready to eat food, insurance policy or durables. As special features do influence the

purchase it is necessary to introduce them but consumer judges to what extent these

claims are true.

2.3.1.17 Trail

In case of daily use products like soaps, detergents, shampoos, tea, pickles,

panmasala and many other consumable consumers may buy a product for trail. N order

to help consumers in this regards companies have introduced small trail packs. If

consumer likes a product on trail, he becomes the permanent customer. It is often

thought that trail is possible only in the case of FMCG but now one can have trail drive

for automobiles and after trail if he is satisfied he can decide to buy, otherwise he can

reject the product. In order to encourage consumers to buy their products some

companies also provided free sample trails and some hold free trail stalls in certain

events. For example- Nescafe Coffee.

20 | P a g e

The above is only illustrative list of criterias which a consumer may decide to

consider evaluating a product or services. It is not necessary to consider all of them for

each product. Further, consumer may choose other criterias which he feels appropriate

based on his knowledge, information, and family influence for a particular product or

services.

2.4.1 Consumer Buying Process.

Buying is a mental process. A decision to buy a product is taken after passing

through different stages. The buying decision process involves the following steps:

2.4.1.1 Problem Recognition

The consumer decision-making process begins when a buyer recognizes a

problem or an unsatisfied need or desire. For example, a consumer might think it is time

to buy a new car when his current one has to be repaired four times in one month. Or a

student might have the desire for a compact disk (C D) player because some of her owns

them. Since consumer may not always recognize that they have a problem or a need,

business use products, advertising, packaging, and sales personnel to help trigger

consumer awareness of need and desire.

2.4.1.2 Information Search

After recognizing a problem or need, the consumer seeks out information on

how to satisfy it. An information search can focus or product features, prices,

availability of brands, seller characteristics, warranties, and other factors. Business can

expedite the information search by supplying consumers with useful, accurate, timely,

and readily available product information.

Consumer usually begin the search process with an internal search process

with an internal search into their memory .Usually , a person had stored information in

his or mind for dealing with that need. In this case, a decision can be made with a little or

no additional information search. However, if more information is needed, consumers

engage in external search. In this case, additional information is obtained from a variety

of external sources. One source of information is communication with other people,

including family, friend, and associates. Although it is difficult to gauge which of these

sources are actually used, they are considered a powerful influence on buying decisions.

21 | P a g e

Marketing sources of information include advertising, salespeople, dealers and

product packages. Buyers can also obtain information from public sources such as

independent product rating and newspaper articles, these sources, such as consumer

reports, are important because they are though to be objective and provide information

on quality and value. Finally, examining the product or actually using the product may

provide additional information.

How consumer process this information depends on a number of factors,

including amount of information, availability, method of presentation, quality and

confidence. One danger firm’s face is the situation in which a consumer reaches an

information overload. A person may collect so much information that is become difficult

to evaluate the alternatives. Although firms cannot eliminate this possibility, they should

provide only information based on the criteria that are most important to target

customers. The way which the information is transmitted also influences how it is

processed. For many products, pictures are recalled with greater accuracy then are words,

and the combination of picture and words is most effective. The quality and availability

of information also influence how consumer process information.

After the information is processed, it should yield a group of brands from which

the buyer can choose. This group of brands sometimes called the buyer’s evoked set. For

example, the student’s search for a CD player might yield an evoked set of Sony, Jensen,

Sanyo, Pioneer, Demon and Magnavox machines. The consumer must then evaluate each

of the alternatives in the evoked set.

2.4.1.3 Evaluation of alternatives

Buyers have choices. They are looking for certain benefits from their purchase.

So they evaluate the alternatives on the basis of attributes – taste, color, price, durability,

quality etc. Of the alternative products. He assesses the merits and demerits of all the

available alternative. It helps the consumer in choosing the best possible alternative

22 | P a g e

2.4.1.4 Purchase decision

While evaluating each alternative, the consumer ranks them first, second and

third etc. These are his preferences. Now the customer goes to the shop and buys the

product of the brand chosen.

2.4.1.5 Post purchase behavior: - After the consumer has actually purchased the

products / brand he will be satisfied or dissatisfied with it. This satisfaction or

dissatisfaction will result in certain consequences. If he is satisfied with the product, he

would regular buy the brand and develop a loyalty. If he is dissatisfied with the product

he may stop buying more products of that brand and may also spread bad words about

the brand. This negative feeling which arises after purchase causing inner tension is

known as cognitive dissonance. A marketer therefore, understands the correct buying

process of customers and decides on marketing activities accordingly rather than by their

income alone. The social class is based on income, education, occupation, family history,

social status etc.

Sociologists divide most societies into three classes – upper, middle, and lower.

Shopping pattern, savings, and spending habit, leisure time activities etc. Differ in

different social classes. Upper class buys products of high quality irrespective of price.

Middle class buy items to show their status in the society. They live well. They spend

their leisure in park, museums etc. The lower middle class buy less expensive goods.

Lower class is composed of factory workers, coolies, petty service people who are not

well educated and have low income. They buy very simple and cheep products. Thus we

can see that the social class has a definite influence on products and brand preferences.

The purchase decision also depends upon the psychology of the buyer. For this

purpose there are four following views of consumer decision making.

2.5.1 Four views of consumer decision making

# Economic person

# Passive person

# Cognitive person

# Emotional person.

2.5.1.1 Economic person:-

23 | P a g e

In economics a person is considered a rational human being and makes decisions

on the basic of price. But this behavior is not considered realistic by scientists.

According to them skills, habits are limited. The people have limitations of their values

and goals. The behavior is also limited on the basis of limitation of information and

knowledge. In this world economic and marketing conditions are imperfect as well as

persons are imperfect. Thus decision is not taken purely on economic factors such as

relationship between price and marginal utility, or indifference curves. Thus decision

making is combination of economic and other factors and is not purely economic

decision.

2.5.1.2 Passive person:-

In passive model it is presumed that persons are submissive to self interest and

promotional efforts of marketers influence passive person more than non-passive

persons. These persons are those who believe that decision depends upon their

persuasion and in this theory high importance is given to salesman. But modern

marketers place limited role of marketer which seems more realistic because human

being is a rational person and he uses his knowledge, skill and weights alternatives on

the basis of their attributes. No longer has he blindly believed what is said in

advertisement.

2.5.1.3 Cognitive person:-

The believers in cognitive theory presume that man is a problem solver. They

actively and rationally study the attributes. The task of such persons has been made

easier by professional journals, consumer forums, consultants, and market reports, In the

process of decision making consumer gathers and evaluates information before arrive at

a decision . The information is sought on the attributes of competitive products, their

performance, durability, price, service and if one feels it necessary he seeks information

from relatives and friends especially from those friends who are technocrats. But the

limitation of this theory is that a person is not able to collect information on all

alternatives and sometimes he is not able to get full information ever of short listed

brands. Therefore, the decision sometimes is not totally logical.

24 | P a g e

In other circumstances buyer is overloaded with information and one finds it

difficult to process whole of it. This theory, however, is applicable to educated consumer

who is fully involved. Since these conditions prevail in small fraction of Indian

consumer, often he is bluffed and marketer influences his decision more than in well

educated country.

2.5.1.4 Emotional person

The decision of people is not fully rational on many occasions because we all are

emotional. For instance, we go to the market and like the product on first sight; we it

without further injury. This is particularly true in case of objects of art, gift items,

fashion goods and religious books, and services. In the matter of sex also one become

emotional and does not consider price or consequences.

If we go to religious places and see god idols, pictures or other objectives we buy

them without further thought whether our pocket allows it or not. When purchases are

based on emotions less or no emphasis is placed on pre-purchase information. The

decision basically depends on mood and feelings. If two friends are roaming in a market

and through window shopping like a product they enter the shop/ store and buy it

immediately. If one visits a store and likes some displayed items he immediately picks

them for purchases, sometimes even without asking for price.

Moods are also part of emotion. If we are in happy mood on some good news we

have happy feelings and buy some such thing which we might not have bought

otherwise. The moods depend not only on events affecting an individual but also on

atmosphere prevailing around. Therefore, big good and fragrance. Hotels and restaurants

also create conditions for good mood to attract customers. In good mood sometimes

buyer’s decision is bases largely on marketing feelings without considering information

on the product. This type of decision takes place in the matter of music records,

cosmetics, fashion goods, visit to a restaurant etc.

Thus it may be concluded that buying decision is a complex matter and in

different situations different factors have bigger or smaller role. It is not always possible

to generalize decision making theory.

25 | P a g e

2.6 Low Involvement Decision Making.

When the stake in item to be purchases or service to be utilized is not much and

the risk of wrong decision is only short lived, decision making involves low of

involvement. If for instance consumer decides to buy X brand washing powder and does

not find it suitable it can be rejected and repeat purchase is not made of the same brand.

But the loss due to buying decision is limited to the cost of the powder. If one develops

fever and visit near by doctor and he takes longer time than normally required he can be

discarded. If some one sends a courier mail from Delhi to Mumbai and it does not reach

next day the service can definitely be rejected for next mail but if the mail contains

important documents delay may cause loss and so risk is involved. Thus the law of

involvement does not depend entirely on the nature of product or service but also on

other factors such as its consequences. Therefore even in some low involvement product

or service decision making has to depend upon other factors too. However, on the whole

generally no or very limited inquiry is done for low involvement items. Very often some

inquiry is made from seller but its attributes vis-à-vis of alternatives is not evaluated.

2.7 Unplanned Purchase Behavior

All purchase by any consumer is not preplanned. When a wife visits a market for

planned purchases and if something which was not in the list she likes or finds it a

bargain on-spot the short decision is taken for purchase which is called unplanned

purchase. The unplanned purchases may be defined those purchase decisions which are

taken on the spot without any prior planning. Such purchase is quite large when visits an

exhibition or visits a religious place or visit mela like Khumbh Mela . One sees many

products at these place and makes purchases for oneself , relatives and friends, for gifting

or when innovative products are available . Generally when one visit such places he

takes money for such purchases but does not know what he is going to buy. The purchase

decision in such circumstances is called unplanned purchase decision. The basic point to

observe is that no prior inquiry is made nor prior information is collected.

But in such purchases also often alternatives are available and one has to decide

which product is better. This depends purely on mood at that point of time and liking or

disliking of particular product or alternative. It will not be correct to say that all

unplanned purchase decision is taken without considering alternatives.

26 | P a g e

2.8 Strategic Implication of Low Involvement Decision Making.

In case of low involvement decision making it is more likely that consumer

change the brand if he finds equally good brand in the market or there is bargain sale or

discount sale. In products of low involvement there is class of consumers for whom

“brand loyalty” has little meaning. More ever studies in India suggest that brand loyalty

is weakening. The bargain sales are attracting customers like buy two trousers and get-

one free, buy a toothpaste and get tooth brush free, buy Nature Fresh Atta and get a

scratch coupon free. There are a number of others who offer 10 to 20 percentage extra

quality without extra price.

The consumer purchase decisions are influenced by such bargains because he

belongs to none especially in case of low involvement products. The thumb rule in India

discount bazaars is that who give best deal to buyers thrives . It has been realized by

marketers that price value score cover brand. This trend is most visible not only in

garments but also in FMCG. Therefore Lux offers Rs. 5 discount . Good Knight

mosquito mats offered free soap , the management of shoppers stop admit that discount

sales work well for store because it sells more and attractive customers Bombay Dyeing

has discount sales every year . Since Bhilwara group announced 15 to 50 percentage

discount its sales have doubled . If there is no basic difference in a product consumer

decision is based on discount or incentives available . But brand loyalty is continuing in

certain items like cosmetics and design and quality conscious customers . However , the

share of such buyers in total is decline and strategic planners will have to keep this fact

in mind. Now buyers for low involvement products decide on the basis of price and

value over brand at least in India where purchasing power of majority of consumers is

limited.

2.9 Complex Decision Making.

In case of high involvement products and services decision making is complex

and difficult. If for example some one is seriously ill besides the reliability of a doctor

one has to look to his pocket and permanent loss of funds if treatment does not succeed .

The heart operation cost Rs. 3 Lakh in one hospital and Rs. 1 Lakh in another hospital.

27 | P a g e

The concern person has to decide whether it is worth spending Rs. 3 Lakhs

instead of Rs. 1 Lakh, in such case psychology, emotion, price, and pocket play a part

along with reliability. There are social cultural inputs consisting of non-commercial

influences which are considered. Social class, culture, sub-culture, information, opinion

of users all plays a part.

If some one decides to buy a car, it is available from Rs. 2 Lakhs onwards going

up to Rs.25 Lakhs or more for imported car. The decision to buy a particular models

does not depend merely on technical factors, reliability of operations, trouble free

operation but also on non-utility factors. The buyer considers his status, ego satisfaction,

impression on friends and relatives and satisfaction that most of his known persons do

not process that high price model. But there is other whose decision is based only on

utility. In that case he has to collect information on all the possible models , compare

there technical and non-technical features , narrow down his choice to two or three

models before taking the final decision .At this stage friends who have experience of

driving that model or who knows about automobiles is consulted.

In any other high involvement item also the process is quite complex first one has

to collect information on alternative choices , evaluate them not only in term of

performance , reliability and durability but also price. One is required to work out cost

benefit analysis and terms of payment. It is difficult to evaluate all these complex

factors. When some manufacturer is offering wide range of TV or Refrigerator task

becomes all the more complex.

2.10 Problem Factors In Decision Making.

All said the choice decision is not easy and increasing the number of alternative

always does not lead to best choice. Many researchers have found that when numbers of

alternatives increases, the consumers use such strategies which eliminate a number of

alternatives at an early stage but when the numbers of alternatives are less one goes into

greater detail.

28 | P a g e

When there are too many alternatives and a larger number of attributes to be

considered often marketers and policy makers do not provide complete information

because it has found by researchers that when more information is given consumer tend

to make poorer decisions. However, many researchers differ from this view like Russo,

Wilkie, Sumers that choice accuracy increased as more information and attributes are

added. But what is a good decision is disputed.

The other factors which may make decision biased is that many consumers have

pre-determined notions and preference and make decisions by brands, many of them do

not add more alternatives and new attributes to the alternatives under consideration and

the predetermined alternative is selected for final purchase.

Sometimes consumer is confronted with non-comparable attributes of different

alternative choices. For example certain marketers offer discounts and other incentives

which are independent of the attributes of alternatives . In such a situation often

consumers are attracted by discounts, and sales incentives.

The choice decision also depends upon ability of consumers to process the given

information. Some consumers have better abilities to compare available information and

some offer do not have that much ability and make wrong choice. In order to help

consumers to assess information better, some marketers make same information more

salient by using color, size etc. They use same pattern of information on all labels so that

it may be easy to locate and understand. Moreover, information is given in such manner

that it may be easy for consumers to understand and compare.

The good marketer uses symbols that quickly and largely convey their concept

and give information on advantages and risks at one place. Good stores also give

information on their board. The information is given in such a manner that encourages

proper understanding and forming correct strategies. The researches have concluded that

most of the consumers have limited capacity to process the information.

29 | P a g e

Throughout the buying process, various factors may influence the buyer. All

these factors which determine the buyer or consumer behavior are the psychological

factors, social factors, cultural factors, personal factors and economical factors. Thus a

lot of factors are there in this present scenario that influences the consumer behavior.

2.11 Models of Consumer behavior

2.11.1 Monadic models of consumer behavior

2.11.1.1 Elasticity model

This is a pure economic, more precisely, micro economic model. The model says:

as the price increases, other things remain constant; demand of the commodity will go

down. But how much it will go down, will depend on the nature of the commodity, if the

price goes up slightly, demand will fall much larger margin. Diamond is, therefore

known as highly price elastic, while commodity like petrol may not be very cheap, but

life comes to a standstill without it. If price of the petrol increases, people cannot reduce

the consumption, and in general, decrease in quantity is much less than the increase in

price. All such commodities are called price inelastic.

2.11.1.2 Response hierarchy model

The model attempts to predict the sequence of mental stages that the consumer

passes through while purchasing a product. This model is purely psychological. It covers

three mental stages, namely, cognitive, affective, and behavioral. Cognitive stages deals

with creation of knowledge or awareness in the mind of the consumers. The next stage is

concerned with the developing an interest in the mind of the consumer which results in

develop in an attitude or change in attitude towards the specific product. The attitude

formation finally brings us to the behavior formation, the buying behavior.

One of the most popular response hierarchy models is the AIDA model. AIDA

stands for attention, interest, desire, and action, depicts the sequence of mental stages

that the consumer passes through before buying

30 | P a g e

.

(Figure No.2.11.1.2.1)

2.11.1.3 The black Box Model

Black Box model is also called stimulus response model. Consumer’s mind and

thought processing is treated like a “black box” which cannot be opened to find out its

working. The model highlights the input stimulus like promotional advertisement and

resultant output, the purchase behavior.

The Black Box Model (Figure No.2.11.1.3.1)

Black box model although does not describe formation of purchase behavior

but mentions personality, motivation, attitude and learning process the factors standing in

between input stimulus and output behavior. Later on market researchers developed the

model into complex multivariable model.

31 | P a g e

Stage

Cognition

Affective

Behavior

AIDA Model

Attention

Interest

Desire

Action

ProductPricePromotionPlace

The impregnableBlankBox

Product ChoiceBrand ChoiceBrand loyalty

Input stimulus Purchase Behavior

2.11.2 Electric or Multivariable models of consumer behavior

2.11.2.1 The Howard-sheth model

The model explains the buyer decision process using six sets of variables as seen

in the figure.

The Howard Sheth Model (Figure No.2.11.2.1.1)

32 | P a g e

BEHAVIORAL DETERMINANTS

Personality

Culture

Social class

Importance of purchase decision

INHIBITORS

Price of product, Brand

Availability of product, brand

Financial status of individual

Time constrains on individual

INPUTS

Product services Brands

Facts

Images

Feelings

PERPECTUAL REACTION

Perpetual bias

Sensitivity of information

Filtering of information

PROCESSING DETERMINANTS

Purchase motivation

Available

Satisfaction

Past experience

Judgment criteria

OUTPUTS

Attending Understanding

attitudes

Purchase intention

Purchase behavior

Purchase decision

ACTUAL PURCHASE OR NO PURCHASE

OR DELAY

2.11.2.1.1Input variable: - these include information inputs about the

alternative services or products available with rational and emotional elements. For ex- a

customer wants to possess a standard chartered Gold card, he will seek information

regarding the facilities of such card, the interest charged and will also affected by the

promotional Ad of Standard Chartered gold card.

2.11.2.1.2 Behavioral Determinants: - these variables are the pre existing

elements in consumer’s mind and existing pre disposition of the consumer, influenced by

his culture, family and other such factors. Behavioral determinants do not play overt role,

nevertheless, play a significant role in buying decision. While buying a Standard

Chartered gold card the potentional buyer’s consideration of possessing a credit card as

status symbol or his habit of buying expensive items, will bear a positive impact on his

decision of owning the card.

2.11.2.1.3 Perpetual reaction: - Information from inputs is not accepted at

their face value by the consumer but are processed in the minds of the consumers and

then interpreted. For example: a person who is serious about possessing a gold card will

compare the advantages and disadvantages with the similar credit card. He will seek

information activity. He will go out of the way to get the information, try to assilimilate

as much as possible and filter all the important information. One not so interested person

may also receive some information on the TV set and will not be sensitive to the

information and hence won’t filter much of it for processing purpose

2.11.2.1.4 Processing determinants: - these are the factors affecting

evaluation of the gathered information. Factors affecting are motivation and past relevant

experience. Learning process will include experience about the product and also on post

purchase service. The consumer will also apply some judgment at the criteria to evaluate

the alternative.

2.11.2.1.5 Inhibiters: - these are the external constrains, inhibiting the actual

or potential purchase behavior. For possessing the cold card, the inhibiters can

a) Rate of interest charged

b) Income of the person

33 | P a g e

c) Relative price of other credit cards

d) Any formality that has to be fulfilled, for example: one has to submit his income

statement, his permanent income tax account number etc.

2.11.2.1.6 Output variables: - the outcome of the process of the interacting

elements may results in the purchase decisions, not to purchase or post-dated purchase

2.11.2.2 The Howard Ostlund model

Howard and Ostlund model is an improvement on the Howard- Sheth model,

in terms of greater predictability of the consumer’s buying decision. However, the model

is much more complex than the Howard Sheth model.

Although the model is more comprehensive, it is extremely difficult to

understand, because its variables are further divided into too many “content” variables

i.e. which deal with what the buyer thinks- brands comprehension, personal attitudes etc

and “structural” variables i.e. how the buyer thinks- media selection process, perceptual

bias etc.

2.11.3 The product adoption Model

Given the fact that much of marketing communication activities are related to

the launching of new products, developing a consumer behavior model especially for

finding how consumers “adopt” the product is highly beneficial for the marketers.

Rogers defined the “diffusion” as the process by which ‘innovation’ is communicated

over time among the individuals within society who constitute the target market. The

diffusion process depends on four factors. They are

a) The diffusion itself

b) The communication process and channels used

c) The time at which the individuals deicide to adopt the product and

d) The various class of consumers

There are five categories of consumers involved in this whole process of

diffusion of innovation

34 | P a g e

2.11.3.1 Innovation: - They are venture individuals who are willing to try

new ideas and consume new products, even, if there could be certain defects in the new

product

2.11.3.2 Early adopters: - They are opinion leaders within the particular

industry or social group. These people are willing to try new ideas ahead of others, but

who make careful assessment of potential risk before trying or using the new product

2.11.3.3 Early majority: - These people try the innovated products, services,

or ideas ahead of rest of the gentry or masses. They hold up their purchase till they get

favorable information from the early adopters.

2.11.3.4 Late majority: - They are risk averters and unadventurous. They take

new product when it is well listed in the market.

Innvaotors 2.5%

Product Innovation model (Figure No.2.11.3.1)

2.11.3.4 Laggards: - They buy the product when the new product no more

remains new. The speed at which a new product gains acceptance and is adopted by all

types of consumers, varies from product to product. The speed is much higher in case of

easily understood consumer precuts: kitchenware, consumer non durables: like soft

drinks etc. while in case of technically complex products the speed is much lower.

35 | P a g e

Early majority 34%

Late majority

34%

Early adopter 13.5%

Laggards 16%

The model is successful in helping the marketers to understand the process of

diffusion. This significant especially for FMCG companies, which frequently bring out

new products for market along with heavy promotional spending, assuming that the all

the consumers will accept the products. The time dimension in learning and adopting is

of crucial importance. Similarly for technical goods, like a laptop or palmtop computers,

it is very important for the marketer or the producer to understand the period when they

can accept the acceptance of the product by the majority. This is very important to know

as these products are always under the threat of technological obsolescence.

36 | P a g e

3.1 INDUSTRIAL PROFILE

The Food Manufacturing Industry is the complex, global collective of diverse

businesses that together supply much of the food energy consumed by the world

population. Only subsistence farmers, those who survive on what they grow, can be

considered outside of the scope of the modern food industry.

3.1.1 Definitions

"Food industry" is not a formally defined term; however, it is usually used in a

broadly inclusive way to cover all aspects of food production and sale. The Food

Standards Agency, a government body in the UK, describes it thus."...the whole food

industry – from farming and food production, packaging and distribution, to retail and

catering." The Economic Research Service of the USDA uses the term "food system" to

describe the same thing.”The U.S. food system is a complex network of farmers and the

industries that link to them. Those links include makers of farm equipment and

chemicals as well as firms that provide services to agribusinesses, such as providers of

transportation and financial services. The system also includes the food marketing

industries that link farms to consumers and which include food and fiber processors,

wholesalers, retailers, and foodservice establishments."

3.1.1.1 Nature of the Industry

Workers in the food manufacturing industry link farmers and other agricultural

producers with consumers. They do this by processing raw fruits, vegetables, grains,

meats, and dairy products into finished goods ready for the grocer or wholesaler to sell to

households, restaurants, or institutional food services.

Food manufacturing workers perform tasks as varied as the many foods we eat.

For example, they slaughter, dress, and cut meat or poultry; process milk, cheese, and

other dairy products; can and preserve fruits, vegetables, and frozen specialties;

manufacture flour, cereal, pet foods, and other grain mill products; make bread, cookies,

cakes, and other bakery products; manufacture sugar and candy and other confectionery

products;

37 | P a g e

Process shortening, margarine, and other fats and oils; and prepare packaged

seafood, coffee, potato and corn chips, and peanut butter. Although this list is long, it is

not exhaustive: Food manufacturing workers also play a part in delivering numerous

other food products to our tables.

Quality control and quality assurance are vital to this industry. The U.S.

Department of Agriculture (USDA) oversees all aspects of food manufacturing. In

addition, other food safety programs have been adopted recently as issues of chemical

contamination and the growing number of new food-borne pathogens remains a public

health concern. For example, by applying science-based controls from raw materials to

finished products, a program called Hazard Analysis and Critical Control Point

(HACCP) focuses on identifying hazards and preventing them from contaminating food.

Thirty-four percent of all food manufacturing workers are employed in plants that

slaughter and process animals and another 19 percent work in establishments that make

bakery well. Seafood product preparation and packaging, the smallest sector of the food

manufacturing industry, accounts for only 3 percent of all jobs.

3.1.1.2 Agriculture

Agriculture is the process of producing food, feed, fibre and other desired

products by the cultivation of certain plants and the raising of domesticated animals

(livestock). The practice of agriculture is also known as "farming", while scientists,

inventors and others devoted to improving farming methods and implements are also

said to be engaged in agriculture. More people in the world are involved in agriculture as

their primary economic activity than in any other, yet it only accounts for four percent of

the world's GDP.

3.1.1.3 Food processing

Food processing is the set of methods and techniques used to transform raw

ingredients into food or to transform food into other forms for consumption by humans

or animals either in the home or by the food processing industry.

38 | P a g e

Food processing typically takes clean, harvested crops or slaughtered and

butchered animal products and uses these to produce attractive, marketable and often

long-life food products. Similar processes are used to produce animal feed. Food

processing takes clean, harvested or slaughtered and butchered components and uses

them to produce marketable food products.

3.1.1.4 History

Food processing dates back to the prehistoric ages when crude processing

incorporated slaughtering, fermenting, sun drying, preserving with salt, and various types

of cooking (such as roasting, smoking, steaming, and oven baking). Salt-preservation

was especially common for foods that constituted warrior and sailors' diets, up until the

introduction of canning methods. Evidence for the existence of these methods exists in

the writings of the ancient Greek , Chaldean, Egyptian and Roman civilisations as well

as archaeological evidence from Europe, North and South America and Asia. These tried

and tested processing techniques remained essentially the same until the advent of the

industrial revolution. Examples of ready-meals also exist from pre industrial revolution

times such as the Cornish pasty and the Haggis

Modern food processing technology in the 19th and 20th century was largely

developed to serve military needs. In 1809 Nicolas Appert invented a vacuum bottling

technique that would supply food for French troops, and this contributed to the

development of tinning and then canning by Peter Durand in 1810.

Although initially expensive and somewhat hazardous due to the lead used in

cans, canned goods would later become a staple around the world. Pasteurization,

discovered by Louis Pasteur in 1862, was a significant advance in ensuring the micro-

biological safety of food.

In the 20th century, World War II, the space race and the rising consumer society

in developed countries (including the United States) contributed to the growth of food

processing with such advances as spray drying, juice concentrates, freeze drying and the

introduction of artificial sweeteners, colouring agents, and preservatives such as sodium

benzoate. In the late 20th century products such as dried instant soups, reconstituted

fruits and juices, and self cooking meals such as MRE food ration were developed.

39 | P a g e

In Western Europe and North America, the second half of the 20th century

witnessed a rise in the pursuit of convenience; food processors especially marketed their

products to middle-class working wives and mothers. Frozen foods (often credited to

Clarence Birdseye) found their success in sales of juice concentrates and "TV dinners". [1] Processors utilised the perceived value of time to appeal to the post-war population,

and this same appeal contributes to the success of convenience foods today.

3.1.1.5 Food industry technologies

Sophisticated technologies define modern food production. They include many

areas. Agricultural machinery, originally led by the tractor, has practically eliminated

human labour in many areas of production. Biotechnology is driving much change, in

areas as diverse as agrichemicals, plant breeding and food processing. Many other areas

of technology are also involved, to the point where it is hard to find an area that does not

have a direct impact on the food industry. Computer technology is also a central force,

with computer networks and specialized software providing the support infrastructure to

allow global movement of the myriad components involved.

3.1.1.6 Marketing

As consumers grow increasingly removed from food production, the role of

product creation, advertising, publicity become the primary vehicles for information

about food.

With processed food as the dominant category, marketers have almost infinite

possibilities in product creation.

3.1.1.7 Wholesale and distribution

A vast global transportation network is required by the food industry in order to

connect its numerous parts. These include suppliers, manufacturers, warehousing,

retailers and the end consumers. There are also those companies that, during the food

processing process, add vitamins, minerals, and other necessary requirements usually lost

during preparation.

40 | P a g e

3.1.1.8 Retail

With populations around the world concentrating in urban areas, food buying is

increasingly removed from all aspects food production. This is a relatively recent

development, taking place mainly over the last 50 years. The supermarket is a defining

retail element of the food industry, where tens of thousands of products are gathered in

one location, in continuous, year-round supply.

Food preparation is another area where change in recent decades has been

dramatic. Today, two food industry sectors are in apparent competition for the retail food

dollar. The grocery industry sells fresh and largely raw products for consumers to use as

ingredients in home cooking. The food service industry offers prepared food, either as

finished products, or as partially prepared components for final "assembly".

3.1.1.9 Regulation

3.1.1.9.1 Labour and education

Until the last 100 years, agriculture was labour intensive. Farming was a common

occupation. Food production flowed from millions of farms. Farmers, largely trained

from generation to generation, carried on the family business. That situation has changed

dramatically. In North America, over 50% of the population were farm families only a

few decades ago; now, that figure is around 1-2%, and some 80% of the population lives

in cities. The food industry as a complex whole requires an incredibly wide range of

skills. Several hundred occupation types exist within the food industry.

3.1.1.10 Research and development

Research in agricultural and food processing technologies happens in great part in

university research environments. Projects are often funded by companies from the food

industry. There is therefore a direct relationship between the academic and commercial

sectors, as far as scientific research.

41 | P a g e

3.1.2 Prominent Food Companies

The Food World is the biggest directory for food, beverage and agriculture

industries, worldwide.

DuPont and Monsanto are the leading producers of pesticide, seeds, and other

farming products.

Both Archer Daniels Midland and Cargill process grain into animal feed and a

diverse group of products. ADM also provides agricultural storage and

transportation services, while Cargill operates a finance wing.

Bunge is a global soybean exporter and is also involved in food processing, grain

trading, and fertilizer.

Dole Food Company is the world's largest fruit company. Chiquita Brands

International, another US based fruit company, is the leading distributor of

bananas in the United States. Sunkist Growers, Incorporated is a U.S. based

grower’s cooperative.

Tyson Foods is the world’s largest processor and marketer of chicken and the

largest beef exporter from the United States. Smithfield Foods is the world's

largest pork processor and hog producer.

Nestlé is the world's largest food and beverage company. Kraft Foods is the

largest U.S. based food and Beverage Company. Unilever is an Anglo-Dutch

company that owns many of the world's consumer product brands in foods and

beverages.

3.1.3 Working Conditions

Many production jobs in food manufacturing involve repetitive, physically

demanding work. Food manufacturing workers are highly susceptible to repetitive-strain

injuries to their hands, wrists, and elbows.

This type of injury is especially common in meat-processing and poultry-

processing plants. Production workers often stand for long periods and may be required

to lift heavy objects or use cutting, slicing, grinding, and other dangerous tools and

machines. To deal with difficult working conditions, ergonomic programs have been

introduced to cut down on work-related accidents and injuries.

42 | P a g e

In 2003, there were 8.6 cases of work-related injury or illness per 100 full-time

food manufacturing workers, much higher than the rate of 5.0 cases for the private sector

as a whole. Injury rates vary significantly among specific food manufacturing industries,

ranging from a low of 1.8 per 100 workers in retail bakeries to 12.9 per 100 in animal

slaughtering plants, the highest rate in food manufacturing.

In an effort to reduce occupational hazards, many plants have redesigned

equipment, increased the use of job rotation, allowed longer or more frequent breaks, and

developed training programs in safe work practices. Furthermore, meat and poultry

plants must comply with a wide array of Occupational Safety and Health Administration

(OSHA) regulations ensuring a safer work environment. Although injury rates remain

high, training and other changes have reduced those rates. Some workers wear protective

hats, gloves, aprons, and shoes. In many industries, uniforms and protective clothing are

changed daily for reasons of sanitation.

Because of the considerable mechanization in the industry, most food

manufacturing plants are noisy, with limited opportunities for interaction among

workers. In some highly automated plants, manual work has been replaced by computers

and factory automation, resulting in less waste and higher productivity. While much of

the basic production—such as trimming, chopping, and sorting—will remain labor

intensive for many years to come, automation is increasingly being applied to various

functions, including inventory management, product movement, and quality control

issues such as packing and inspection.

Working conditions also depend on the type of food being processed. For

example, some bakery employees work at night or on weekends and spend much of their

shifts near ovens that can be uncomfortably hot. In contrast, workers in dairies and meat-

processing plants typically work daylight hours and may experience cold and damp

conditions. Some plants, such as those producing processed fruits and vegetables,

operate on a seasonal basis, so workers are not guaranteed steady, year-round

employment and occasionally travel from region to region seeking work. These plants

are increasingly rare, however, as the industry continues to diversify and manufacturing

plants produce alternative foods during otherwise inactive periods.

43 | P a g e

3.1.4 Employment

In 2004, the food manufacturing industry provided 1.5 million jobs. Almost all

employees were wage and salary workers, but a few food manufacturing workers were

self-employed and unpaid family workers. In 2004, about 29,000 establishments

manufactured food, with 89 percent employing fewer than 100 workers (chart 1).

Nevertheless, establishments employing 500 or more workers accounted for 36 percent

of all jobs.

The employment distribution in this industry varies widely. Animal slaughtering

and processing employs the largest proportion of workers. Economic changes in

livestock farming and slaughtering plants have changed the industry. Increasingly, fewer,

but larger, farms are producing the vast majority of livestock in the United States.

Similarly, there are now fewer, but much larger, meat-processing plants, owned by fewer

companies—a development that has tended to concentrated employment in a few

locations.

Food manufacturing workers are found in all States, although some sectors of the

industry are concentrated in certain parts of the country. For example, in 2004,

California, Illinois, Iowa, Pennsylvania, and Texas employed 24 percent of all workers in

animal slaughtering and processing. That same year, Wisconsin employed 33 percent of

all cheese manufacturing workers, and California accounted for 20 percent of fruit and

vegetable preserving and specialty food manufacturing workers.

3.1.5 Occupations in the Industry

The food manufacturing industry employs many different types of workers. More

than half are production workers, including skilled precision workers and less skilled

machine operators and laborers (table 2). Production jobs require manual dexterity, good

hand-eye coordination, and, in some sectors of the industry, strength. Red-meat

production is the most labor-intensive food-processing operation. Animals are not

uniform in size, and slaughterers and meatpackers must slaughter, skin, eviscerate, and

cut each carcass into large pieces.

44 | P a g e

They usually do this work by hand, using large, suspended power saws. They

also clean and salt hides and make sausage. Meat, poultry, and fish cutters and

trimmers use hand tools to break down the large primary cuts into smaller sizes for

shipment to wholesalers and retailers. These workers use knives and other hand tools to

eviscerate, split, and bone chickens and turkeys.

Bakers mix and bake ingredients according to recipes to produce breads, cakes,

pastries, and other goods. Bakers produce goods in large quantities, using mixing

machines, ovens, and other equipment.

Many food manufacturing workers use their hands or small hand tools to do their

jobs. Cannery workers perform a variety of routine tasks—such as sorting, grading,

washing, trimming, peeling, or slicing—in the canning, freezing, or packing of food

products. Hand food decorators apply artistic touches to prepared foods. Candy

molders and marzipan shapers form sweets into fancy shapes by hand.

With increasing levels of automation in the food manufacturing industry, a

growing number of workers are operating machines. For example, food batch

makers operate equipment that mixes, blends, or cooks ingredients used in

manufacturing various foods, such as cheese, candy, honey, and tomato sauce. Dairy

processing equipment operators process milk, cream, cheese, and other dairy

products. Cutting and slicing machine operators slice bacon, bread, cheese, and other

foods. Mixing and blending machine operators produce dough batter, fruit juices, or

spices. Crushing and grinding machine operators turn raw grains into cereals, flour, and

other milled-grain products, and they produce oils from nuts or seeds. Extruding and

forming machine operators produce molded food and candy, and casing finishers and

stuffers make sausage links and similar products. Bottle packers and bottle fillers operate

machines that fill bottles and jars with preserves, pickles, and other foodstuffs.

45 | P a g e

Food cooking machine operators and tenders steam, deep-fry, boil, or pressure-

cook meats, grains, sugar, cheese, or vegetables. Food and tobacco roasting, baking, and

drying machine operators and tenders operate equipment that roasts grains, nuts, or

coffee beans and tend ovens, kilns, dryers, and other equipment that removes moisture

From macaroni, coffee beans, cocoa, and grain. Baking equipment operators tend

ovens that bake bread, pastries, and other products. Some foods—ice cream, frozen

specialties, and meat, for example—are placed in freezers or refrigerators by cooling and

freezing equipment operators. Other workers tend machines and equipment that clean

and wash food or food-processing equipment. Some machine operators also clean and

maintain machines and perform duties such as checking the weight of foods.

Many other workers are needed to keep food manufacturing plants and equipment

in good working order. Industrial machinery mechanics repair and maintain production

machines and equipment. Maintenance repairers perform routine maintenance on

machinery, such as changing and lubricating parts. Specialized mechanics

include heating, air-conditioning, and refrigeration mechanics, farm equipment

mechanics, and diesel engine specialists.

Still other workers directly oversee the quality of the work and of final

products. Supervisors direct the activities of production workers. Graders and sorters of

agricultural products, production inspectors, and quality control technicians evaluate

foodstuffs before, during, or after processing.

Food may spoil if not packaged properly or delivered promptly, so packaging and

transportation employees play a vital role in the industry. Among these are freight, stock,

and material movers, who manually move materials; hand packers and packagers, who

pack bottles and other items as they come off the production line; and machine feeders

and off bearers, who feed materials into machines and remove goods from the end of the

production line. Industrial truck and tractor operators drive gasoline or electric-powered

vehicles equipped with forklifts, elevated platforms, or trailer hitches to move goods

around a storage facility. Truck drivers transport and deliver livestock, materials, or

merchandise and may load and unload trucks. Driver/sales workers drive company

vehicles over established routes to deliver and sell goods, such as bakery items,

beverages, and vending-machine products.

46 | P a g e

The food manufacturing industry also employs a variety of managerial and

professional workers. Managers include top executives, who make policy

decisions; industrial production managers, who organize, direct, and control the

operation of the manufacturing plant; and advertising, marketing, promotions, public

relations, and sales managers, who direct advertising, sales promotion, and community

relations programs.

Engineers, scientists, and technicians are becoming increasingly important as the

food manufacturing industry implements new automation and food safety processes.

These workers include industrial engineers, who plan equipment layout and workflow in

manufacturing plants, emphasizing efficiency and safety. Also, mechanical

engineers plan, design, and oversee the installation of tools, equipment, and

machines. Chemists perform tests to develop new products and maintain the quality of

existing products. Computer programmers and systems analysts develop computer

systems and programs to support management and scientific research. Food scientists

and technologists work in research laboratories or on production lines to develop new

products, test current ones, and control food quality, including minimizing food-borne

pathogens.

Finally, many sales workers, including sales representatives, wholesale and

manufacturing, are needed to sell the manufactured goods to wholesale and retail

establishments. Bookkeeping, accounting, and auditing clerks and procurement

clerks keep track of the food products going into and out of the plant. Janitors and

cleaners keep buildings clean and orderly.

3.1.6 Outlook

Overall wage and salary employment in food manufacturing is expected to

increase by 4 percent over the 2004-14 periods, compared with 14 percent employment

growth projected for the entire economy. Despite the rising demand for manufactured

food products by a growing population, automation and increasing productivity are

limiting employment growth. Nevertheless, numerous job openings will arise in many

segments of food manufacturing, as experienced workers transfer to other industries or

retire or leave the labor force for other reasons.

47 | P a g e

Job growth will vary by occupation but will be concentrated among food

manufacturing workers—the largest group of workers in the industry. Because many of

the cutting, chopping, and eviscerating tasks performed by these workers have proven

difficult to automate, employment among handworkers will rise along with the growing

demand for food products, especially beef. Hand working occupations include

slaughterers and meat packers and meat, poultry, and fish cutters and trimmers, whose

employment will rise as the consumption of meat, poultry, and fish climbs and more

processing takes place at the manufacturing level. Other production workers also will

benefit from the shift in food processing from retail establishments to manufacturing

plants.

Although automation has had little effect on most handworkers, it is having a

broader impact on numerous other occupations in the industry. Fierce competition has

led food manufacturing plants to invest in technologically advanced machinery to be

more productive. The new machines have been applied to tasks as varied as packaging,

inspection, and inventory control. As a result, employment will not increase as rapidly

among some machine operators, such as packaging machine operators, as for industrial

machinery mechanics who repair and maintain the new machinery. Computers also are

being widely implemented throughout the industry, reducing employment growth of

some mid-level managers and resulting in decreased employment for administrative

support workers, but increasing the demand for workers with excellent technical skills.

Taken as a whole, automation will continue to have a significant impact on workers in

the industry as competition becomes even more intense in coming years.

Food manufacturing firms will be able to use this new automation to better meet

the changing demands of a growing and increasingly diverse population. As convenience

becomes more important, consumers increasingly demand highly processed foods such

as pre-marinated pork loins, peeled and cut carrots, microwaveable soups, or ready-to-

heat dinners. Such a shift in consumption will contribute to the demand for food

manufacturing workers and will lead to the development of thousands of new processed

foods. Domestic producers also will attempt to market these goods abroad as the volume

of international trade continues to grow.

48 | P a g e

The increasing size and diversity of the American population has driven demand

for a greater variety of foods, including more ethnic foods. The combination of

expanding export markets and shifting and increasing domestic consumption will help

employment among food manufacturing workers to rise over the next decade and will

lead to significant changes throughout the food manufacturing industry.

Unlike many other industries, food manufacturing is not highly sensitive to

economic conditions. Even during periods of recession, the demand for food is likely to

remain relatively stable.

3.1.7 Spices

Vast fortunes made and squandered, powerful rulers seduced, ailments cured, and

nations discovered…all in the name of spice. Spices have always cast a spell on our

imaginations. They flatter our senses: our sight with their vibrant colors, our smell with

their enticing fragrances, and our taste with their distinct flavors.

Spices have been the catalysts of some of the greatest adventures in human

history, like Christopher Columbus' voyage. Still today, spices empower us as explorers,

even if we never journey beyond the kitchen counter. They energize our daily adventures

in food and remind us of journeys to exotic places and favorite meals with loved ones.

3.1.7.1 Black Pepper

Black and White Pepper are both obtained from the small dried berry of the vine

Piper nigrum. For Black Pepper, the berries are picked while still green, allowed to

ferment and are then sun-dried until they shrivel and turn a brownish-black color. They

have a hot, piney taste. Black Pepper adds flavor to almost every food of every nation in

the world. It is used in rubs, spice blends, salad dressings, and peppercorn blends.

49 | P a g e

3.1.7.1.1Origins

The principal exporters for Black Pepper are India (Malabar and Tellicherry

Pepper), Indonesia (Lampong Pepper), Brazil and Malaysia. Tellicherry is actually a

special type of Malabar Pepper designated for its bold size and uniform appearance. Both

have excellent flavor, aroma and pungency properties. The flavor and aroma of Lampong

Pepper is similar to the Malabar type. The Malaysian and Brazilian varieties are

relatively milder in flavor. Because pepper can be stored for many years without losing

its flavor and aroma, it has long been known as the master spice. Pepper was so precious

in ancient times that it was used as money to pay taxes, tributes, dowries, and rent. It was

weighed like gold and used as a common medium of exchange. In A.D. 410, when Rome

was captured, 3,000 pounds of pepper were demanded as ransom.

3.1.7.2 Cardamom

Cardamom is the dried, unripened fruit of the perennial Elettaria cardamomum.

Enclosed in the fruit pods are tiny, brown, aromatic seeds which are slightly pungent to

taste. Cardamom pods are generally green but are also available in bleached white pod

form. It is available both in the whole pod and as decorticated seeds with the outer hull

removed.

Cardamom is used in Danish pastries, Saudi Arabian, North African, Asian, and

Indian cooking and in spice blends such as garam masala, curry powder, and berbere.

3.1.7.2.1Origins

Whole Cardamom pods come from India while the decorticated seeds are

imported from Guatemala. Two varieties are indigenous to India but are also cultivated

in Guatemala and Sri Lanka. Indian Cardamom is considered to be of premium quality.

The Malabar type, rounded in shape, has a pleasantly mellow flavor generally regarded

as superior. The Mysore type, ribbed and three cornered, has a slightly harsher flavor but

retains its green color longer. Throughout the Arab world, Cardamom is one of the most

popular spices, with Cardamom coffee being a symbol of hospitality and prestige. The

spice is also very popular in the Scandinavian countries where it is used more

extensively than cinnamon.

50 | P a g e

3.1.7.3Cilantro

Cilantro is the dried leaves of the herb, Coriandrum sativum, an annual herb of

the parsley family. Also known as Chinese parsley, Cilantro has a distinctive green,

waxy flavor. Cilantro is the usual name for the leaf of the plant that is otherwise

identified as Coriander, and from which Coriander Seed is obtained. Used in salsas,

chutneys, salads, dips, beans, and soups. Cilantro is used in Asian, Mexican, Indian, Tex

Mex, Caribbean, and North African cuisines, and is used in seasoning blends such as

masala, curry, salsa, and recados.

3.1.7.3.1Origins

Cilantro is believed to have been one of the earliest plantings in North America,

where the cilantro leaves, rather than the seed, became more popular. Today, it is

cultivated in the Mediterranean region of Southern Europe, Mexico and the U.S.

Cilantro is mentioned in the Medical Papyrus of Thebes written in 1552 B.C. and is one

of the plants which grew in the Hanging Gardens of Babylon. Ancient Hebrews added

Cilantro to an herb mixture used in the ritual of Passover. Greek and Roman physicians

hailed its medicinal powers. The Coriandum sativum herb is believed to have been one

of the earliest plantings in North America - dating back to 1670 in Massachusetts - and it

soon appeared in Latin America where the Cilantro leaves, rather than the seed, became

most popular.

3.1.7.4Cinnamon

Cinnamon is the dried inner bark of various evergreen trees belonging to the

genus Cinnamomum. At harvest, the bark is stripped off and put in the sun, where it curls

into the familiar form called "quills."

Cinnamon in the ground form is used in baked dishes, with fruits, and in

confections. Cassia is predominant in the spice blends of the East and Southeast Asia.

Cinnamon is used in moles, garam masala, and berbere.

51 | P a g e

3.1.7.4.1Origins

Cinnamomum burmannii is primarily imported from Indonesia and is the most

common form of Cinnamon in the United States. Once again, Vietnam has become the

source for Cinnamomun loureirii, referred to as Saigon Cinnamon, and considered the

finest Cinnamon available. Cinnamomum zeylanicum, grown in Sri Lanka, is actually

"true Cinnamon" but is not widely used in the United States due to its unique flavor.

Cinnamon was one of the first known spices. The Romans believed Cinnamon's

fragrance sacred and burned it at funerals. Because Cinnamon was one of the first spices

sought in the 15th Century European explorations, some say it indirectly led to the

discovery of America.

3.1.7.5Cloves

Cloves are the dried, unopened, nail-shaped flower buds of the evergreen

Syzygium aromaticum. They are reddish-brown in color and have a strong, aromatic

flavor and aroma. Cloves are an important ingredient in the spice blends of Sri Lanka

and North India. They are used in garam masala, biryanis, and pickles. In the U.S.,

cloves are used in meats, salad dressings, and desserts. Clove is a key flavor contributor

to ketchup and Worchestershire sauce seasoning blends. Chinese and German seasonings

also depend on Cloves to flavor meats and cookies.

3.1.7.5.1Origins

Cloves are believed to be native to the Molucca Islands of Indonesia. Although

Indonesia is the largest producer of Cloves, Zanzibar and Madagascar are the major

exporters, where Clove trees cover thousands of acres of the islands. Historically, Cloves

originating from Madagascar have been considered superior.

The name Cloves comes from the French "clou", meaning nail. The first

references to Cloves are found in Oriental literature in the Han period in China under the

name "chicken-tongue spice". From the 8th Century on, Cloves became one of the major

spices in European commerce.

52 | P a g e

3.2 COMPANY PROFILE

Kerala is also known as the 'Land of Spices', as major portion of its cuisine is hot

and spicy. Coconut is an integral part of almost all dishes prepared in Kerala. Rice is the

staple food for the people of Kerala. Sea food is also an important part of Kerala cuisine.

Chutneys and pickles makes the Kerala food more tangy, lip-smacking and adds to its

taste value. People of Kerala are highly concerned about the health aspect of their food.

Thus, oil, sugar and artificial additives are used in minimum quantity.

Food is served on soft banana leaves and is eaten with hands. There is also a

prescribed order of serving various dishes on the banana leaf. The people of Kerala enjoy

both - simple dish known as 'Kanji' as well as an extravagant menu known as 'Sadya'.

People usually sit in rows of mats at the time of the sadya (feast) as a tradition.

The food is flavoured with non-scalding spices such as cinnamon, cardamom,

ginger, clove, garlic, cumin, coriander and turmeric. Spices are used to tone up the

system the way wines aid the digestion in the Western cuisine. Kerala food is mildly

flavoured, gently cooked and has a certain genteel delicacy on the stomach.

Appam - It is a kind of pancake made of rice flour fermented with a small amount

of toddy (fermented sap of the coconut palm). Appam is circular in shape, edged with a

crisp, lacy frill. It is eaten with chicken or vegetable stew. Kanji (rice gruel) and payaru

(green gram), kappa (casava) and fish curry are traditional favourites of the Keralites.

A popular breakfast dish is puttu - rice flour dough layered with grated coconut

and steamed in a hollow Bamboo cylinder. It is eaten sprinkled with sugar or with

mashed bananas or with a spicy curry made of channa or chic peas. Other South Indian

dishes such as 'Dosa', 'Iddly', etc are also common in Kerala. Deserts like Payasam and

Palppayasam are made with milk, sugar, ghee, rice and dry fruits. The people of Kerala

put to good use whatever the land offers and the result is a fantastic cuisine that is simple

yet mouth-watering.

53 | P a g e

Then land of spices and other goodies, this is how the rest of the world identifies

Kerala, the small southern state in the Indian Sub-continent. The trade ties in spices and

other products, which this small state has had with many European and Arab nations

dates back to many centuries.

3.2.1 Vision of the company

Company believe in time and we are committed to give the best products to

customers every time. To fulfill that we are planning to expand in a big way.

Stand for Quality: To rise up to market's expectation out to give people the best

products evolve after a chain of quality evaluation methods.

Stands for relationships: To make a long standing relationship with people and

business partners.

Mr. V.R Krishnan, a commerce lecturer by profession, gave up his job to start

Rani Private Limited 30 years back. The company has its headquarters in Vatakara, in

the Malabar region of Kerala. A team of dedicated and expert personnel works in a

sophisticated and technologically superior environment. Modern machineries are used to

increase quality of work and also for ensuring their employees a good and safety

working conditions. Thus assuring premium spice powder that remains pure and fresh.

Their success in the local sector gave the company the impetus to export their

products to the Middle East and European nations by 1989. In India Company’s products

are available all over Kerala and the major cities in India. The brand “Rani” is accepted

as a mark of quality among the consumers. The company endeavors to give the very best

to their customers. Rani Spices are quality tested and graded before packing. Rani food

products were awarded the Indian Spices Logo in 1995.

54 | P a g e

The certificate is issued by Spices Board ensures excellent grading backed by

stringent standards. They are also presented the Spice House Certificate. All this, as

recognition for their sincere dedication to the profession of providing the customer’s

quality spices that are truly cut above the rest of their competitors in the market. Kerala

was always known for her inexhaustible array of exquisite spices and herbs. To live their

legendary frame, Rani Food Products was established in 1980 at chorode, Malabar. A

team of experts, dedicated personnel work here in a sophisticated environment using

most ground and blended in the right constituency to time masala; latest machines that

minimize heat generation are used to prevent evaporation of volatile oils. Assuring their

consumers premium spice powders, that remains pure and fresh.

Rani Spices are quality tested and graded before packaging. Attractive, air tight

packing brings the customers the spices with their natural flavor instinct.

In the factory four types of machines are used.

Machine Function

Powdering machine This machine is used to convert the raw

materials into powder

Cleaning Machine materials Removing of dirty and sand from the raw

materials

Packing Machine This is used for the packaging of the

finished products

Sealing Machines The packets are sealed using this machine

55 | P a g e

3.2.2 Research and Development

Rani Private Limited has installed a fully-automated Microbiology-testing Lab to

ensure stringent quality in spices and ready-to-eat food products.

Tempo Reader detects yeasts and moulds within 48 hours. Eastern is the first company

in India in the spice sector to have this fully-automated ic system.

Vitec 2 Compact is used to detect bacteria.

Mini Vidas is an automatic instrument which enables Pathogen-screening.

Tecra Unique Plus - The Tecra Unique Plus Salmonella Test takes less than 22 hours as

compared to traditional methods of Salmonella-screening which takes 5-6 days.

HPLC is used for Toxin detection, pungency of chillies and Sudan Dye detection.

Gas Chromatograph - This equipment analyses pesticide residue count.

UV Spectrophotometer - This determines color value of chillies, curcumin in turmeric,

piperin in pepper.

NIR Spectrophotometer- For Nutrition factor analysis.

ELISA Plate Reader - Is used for aflatoxin, ochratoxin analysis.

Luminar Pocket Swab Plus - Based on the presence of cell component ATO,

Luminator Pocket Swab can estimate microbial count within minutes.

Air Ideal- Is used for environmental monitoring.

56 | P a g e

3.3 DEPARTMENT PROFILE

The head office and factory of Rani Food Products is situated in the chorode,

Vadakara. They have 118 employees including office staffs. There are 7 managers, 88

factory workers, 13 sales personnel, 10 office staff and one watchman. The

organizational structure of Rani Food Products got well defined hierarchical positions

which ensure them to work most effectively and efficiently.

The organizational structure of the Rani is characterized by the following

Specialization by functions

Emphasis on sub goals

Pyramidal growth of the organization.

Line and staff decisions

Functional authority relationship among departments.

Quick decision making

High degree of specialization

Brings order and clarity in the organization

Promotes professional achievement

Economy in the nature of organizational resources

High degree of control and co-ordination of functions.

In the organizational, Managing Director controls all the function like production,

personnel, marketing and finance, which are the major functional areas of management.

These areas have their own organization procedures and sub activities.

57 | P a g e

3.3.1 Management

Sole authority of Rani Food Products lies in the hand of partners; they are the

Board of Directors. They in turn delegate some of their powers to managers. Managers

get their work done through persons lying below them.

3.3.1.1 Production department of Rani Private limited

The production manager and his team are responsible for realizing the visions of

the company within constraints of technical possibility. This involves coordinating the

operations of various production activities and maintains a good flow of work without

any blockage.

3.3.1.2 Human resource department of Rani Private limited

58 | P a g e

Board of directors

Production manager

Supervisor

Staff

The managing human resource in the organization is an important task. Human

resource department deals with the management of employees of the organization. Rani

Private Limited follows a system in HR department in which staffs are directly managed

by supervisor and this superior is accountable to his superiors. He has a communicator

between employees and top management.

He observes whether work is performed according to the plan and if there is any

deviation between the planned performance and actual performance, he takes necessary

measures to reduce that deviation.

HR department administers the salary of the employees. In Rani, each employee

is due to retire at the age of 58. Rani Pvt Limited provides provide retirement benefits

includes E.S.I, PF etc.

3.3.1.3 Marketing department of Rani Private limited

59 | P a g e

Board of directors

HR Manager

Assistant HR Manager

Supervisor

Staff

The marketing manager is in- charge of the marketing activities of the company.

He organizes the market research to understand the needs and wants of the consumers

and analyses the information so obtained for determined sales strategies, setting targets

and developing new product s. He also evaluates the advertising and sales promotion

activities. Advertising is an important medium of canvassing.

Rani Pvt. Ltd, their advertising is done through fixation of banners, stickers,

board displays, poster, newspapers, magazines, periodicals etc. As the company is also

dealing with international markets, they provide awareness to customers through

participating in international exhibition; tours etc, and help to boast up the sales.

60 | P a g e

Board of directors

Marketing Manager

Supervisor

Sales Representatives

Salesmen

The management from time to time makes the decision regarding the amount spent

for advertisement. Company is marketing their products through two ways. They are

1. Direct distribution

2. Through agents and representatives

The company is using their own vehicles for the distribution of the finished products.

3.3.1.3.1 DISTRIBUTION CHANNEL

From the factory goods are sent to the warehouse. From the warehouse under the

guidance of the marketing department, it is supplied to distributors and through them it

reaches to the ultimate consumers.

61 | P a g e

Retailers

Wholesalers

Consumers

Factory

3.4 PRODUCT PROFILE

Kerala, popularly known as "God's Own Country" is a paradise for spices and

other delicacies. Rani Food Products, have created a niche for itself in the processed food

segment by genuine spices and quality products

Main food products of the company

1. Spices powder

The species powders conform to the highest international standards in aroma and

quality retaining the dedicated texture flavors. Rani Brand consumers packaging is

mainly in 100gm, 200gm and 400gm, cartons and pouches. Bulk packaging includes 20

kg, 25kg bags. The varieties that we have in the segment are

Chilli Powder

 Coriander Powder

 Turmeric Powder

 Dry Ginger Powder

 Cumin Powder

 Black Pepper Powder

Curry Powder

Rani Food Products have come up with some excellent curry powders. The

superior quality packing helps in retaining the flavor for a long time.

Chicken Masala

A mixture of many spices this is the ideal solution for the modern women. An

excellent powder, which will help you make many mouth-watering chicken recipes.

Meat Masala

An excellent masala powder for all your meat preparations.

Tandoori Chicken Masala

Now you can make tandoori chicken at home with Rani Tandoori Chicken

Masala.

Chicken Fry Masala

62 | P a g e

Another time saver for the workingwomen, this masala can save you precious

time.

Channa Masala

We have a range of North Indian curry powders also. This is one such masala for

you.

Biriyani Masala

For the avid biriyani lovers, here is an excellent powder to make mouth watering

biriyanis.

Fish Masala

This is also a time saver, the masala has all the ingredients for your favorite fish

curry. Just follow the instructions in the packet to make excellent fish curry.

2. Vegetable Masala

Excellent masala for all the vegetable preparations.

Sambar Powder

Premium spices are used to produce this excellent sambar powder.

Rasam Powder

A wonderful combination of different spices to make your favorite rasam.

Garam Masala

Spices are handpicked to make the best Garam Masala

PACKAGING

Rani Brand Consumer Packing:100g, 200g & 400g cartons &

pouches

Bulk packing: 10 Kg & 25 Kg Bags

3. Vegetable Pickles:-

63 | P a g e

Hand picked vegetables and spices are used to make traditional and mouth

watering pickles.

Lime

Hand picked lime is used to make the traditional lime pickle.

Mango

Best quality mangos are picked to produce mango pickle the traditional way.

Tender Mango

Tender Mangos the best in the lot are chosen to make this mouth watering pickle.

Garlic

Only the best pods are used to make this pickle.

Ginger

Farm fresh ginger is used to make this delicacy.

Mixed Vegetables

The best lot of seasonal and off-season vegetables is used to make pickles that

could last for a long time.

Ginger Chutney

An exquisite delicacy from Rani, this is surely going to make your mouth water

PACKAGING

Rani Brand Consumer Packing:

100g, 200g, 500 g &

1Kg (Stand up pouch)

300g, 400g & 1 Kg (Glass bottles & Pet Bottles)

Bulk Packaging:1 Kg & 5 Kg (Plastic

containers & cartons)

4. Non Vegetable pickles

64 | P a g e

Prawns

Only the best prawns are selected for this delicacy.

Mussels

A shell fish found in the coastal area of Malabar, this pickle is a rare delicacy

for pickle lovers.

Fish

Another mouth watering delicacy, the taste of this pickle is sure to make you

want for more.

5. Whole spices

Chilli

Coriander

Turmeric

Mustard

Fenugreek

Cumin

Dry ginger

Black pepper

Cloves

PACKAGING

Rani Brand Consumer Packing:50g, 100g, 200g, & 400g

cartons & pouches

Bulk packing: 10 Kg, 25 Kg bags

6. Other products

Coffee Powder

65 | P a g e

The best coffee beans are picked, blended and roasted to give the coffee powder

with the right flavor and fragrance.

Idly powder

An easy to use preparation for the modern working women

Condiments Powder

Atta

Rice Powder (Puttu Podi & Appam Podi)

Useful for a variety of preparations, the Rani Brand rice powders have really

taken over the market.

4. ANALYSIS AND INTERPRETATION OF DATA

66 | P a g e

4.1 DESCRIPTIVE STATISTICS

The data after collection has to be processed and analyzed in accordance with the

outline laid down for their purpose of the time of developing the research plan. This is

essential for a scientific study and for ensuring that the researcher had all relevant data

for making contemplated comparison and analysis.

The term Analysis refers to the computation certain measures along with

searching patterns of relationship that among data groups. Analysis of data in a general

way involves a number of closely related operations which are performed with the

purpose of summarizing these in such a manner that they answer the research questions.

Interpretation is the technique of growing inferences. In fact, the main function if

the researcher is the interpretation of the collected data. Interpretation is needed for each

question to give the result of the each question.

4.1 Age group of the respondents

67 | P a g e

SL NOAGE GROUP

NUMBER OF

RESPONDENTS PERCENTAGE

1 Below 20 8 8

2 20-30 28 28

3 30-40 52 52

4 Above 40 12 12

Total 100 100

(Table.4.1)

8%

28%

52%

12%

Age Group of Respondents

Below 2020-3030-40Above 40

(Chart 4.1)

INTERPRETATION

The table shows that 52% of the respondents are in the age group of 30-40 year

4.2(a) Customer awareness about Rani Food Products

68 | P a g e

SL NOPARTICULARS

NUMBER OF

RESPONDENTS PERCENTAGE

1 Yes 100 100

2 No 0 0

Total 100 100

(Table.4.2)

(Chart 4.2)

INTERPRETATION

The table shows that 100% of the respondents are aware about the Rani Food Products...

4.2(b) Source of customer awareness about Rani Food Products?

69 | P a g e

100%

Customer awareness about Rani Food products

YesNo

SL NOPARTICULARS

NUMBER OF

RESPONDENTS PERCENTAGE

1 Advertisements 40 40

2 Friends 16 16

3 Retail shops 32 32

4 Sales executives 12 12

5 Any other source 0 0

Total 100 100

(Table.4.3)

adver

t...

Friends

Retai

l...

Sales

ex...

Any o

the.

..0

5

10

15

20

25

30

35

4040%

16%

32%

12%

0%

(Chart.4.3)

INTERPRETATION

The table shows that 40% of the respondents came to know about Rani Food Products

through the advertisements of the company.

4.3 Have you used the products of Rani Private Limited?

70 | P a g e

SL NOPARTICULARS

NUMBER OF

RESPONDENTS PERCENTAGE

1 Yes 100 100

2 No 0 0

Total 100 100

(Table.4.3)

yes No0

20

40

60

80

100

120

100%

0%

Usage of Rani Food Products

(Chart.4.3)

INTERPRETATION

The table shows that each one of the respondents is using the products of the Rani

Private Limited.

4.4 Customer’s product usage duration of Rani Private Limited

71 | P a g e

SL NOPARTICULARS

NUMBER OF

RESPONDENTS PERCENTAGE

1 Below 6 months 12 12

2 0-1 year 16 16

3 1-2 year 32 32

4 Above 2 year 40 40

Total 100 100

( Table.4.4)

Below 6 months 0-1 year 1-2 year Above 2 year0

5

10

15

20

25

30

35

40

45

12%

16%

32%

40%

Product usage duration

(Chart.4.4)

INTERPRETATION

The table shows that 40% of the respondents are using Rani Food Products for more than

two years.

72 | P a g e

4.5 Advertisements of Rani Food Products have a major influence on the buying decision of customers.

SL NOPARTICULARS

NUMBER OF

RESPONDENTS PERCENTAGE

1 Strongly agree 24 24

2 Agree 43 43

3 Average 16 16

4 Disagree 12 12

5 Strongly disagree 5 5

Total 100 100

( Table.4.5)

Strongly agreeAgree

AverageDisagree

Strongly disagree

0

5

10

15

20

25

30

35

40

45

24%

43%

16%

12%

5%

(Chart.4.5)

INTERPRETATION

The table shows that 43% of the respondents agree that advertisements of Rani Food

Products have a major influence on their decision to purchase Rani Food Products.

73 | P a g e

4.6.1 Influence of price of the Products on customer’s purchase

decision.

SL NOPARTICULARS

NUMBER OF

RESPONDENTS PERCENTAGE

1 Strongly agree 48 48

2 Agree 32 32

3 Neutral 20 20

4 Disagree 0 0

5 Strongly disagree 0 0

Total 100 100

( Table.4.6)

Strongly agreeAgree

NeutralDisagree

Strongly disagree

0

10

20

30

40

50

48%

32%

20%

0%0%

Influence of price of the product on purchase decision

(Chart.4.6)

INTERPRETATION

The table shows that 48% of the respondents strongly agree that price of the product will

influence their purchase decision.

74 | P a g e

4.6.2 Influence of quality of the Products on customer’s purchase

decision.

SL NOPARTICULARS

NUMBER OF

RESPONDENTS PERCENTAGE

1 Strongly agree 22 22

2 Agree 46 46

3 Neutral 14 14

4 Disagree 11 11

5 Strongly disagree 7 7

Total 100 100

( Table.4.7)

Strongly agree Agree Neutral Disagree Strongly disagree0

5

10

15

20

25

30

35

40

45

50

22%

46%

14%11%

7%

Influence of quality of the product on purchase decision

(Chart.4.7)

INTERPRETATION

The table shows that 46% of the respondents agree that quality of the product will

influence their purchase decision.

75 | P a g e

4.6.3 Influence of availability of the Products on customer’s purchase

decision.

SL NOPARTICULARS

NUMBER OF

RESPONDENTS PERCENTAGE

1 Strongly agree 29 29

2 Agree 39 39

3 Neutral 9 9

4 Disagree 15 15

5 Strongly disagree 8 8

Total 100 100

( Table.4.8)

Strongly agreeAgree

NeutralDisagree

Strongly disagree

05

10152025303540

29%

39%

9%15%

8%

Influence of availability of the Products on purchase de-cision.

(Chart.4.8)

INTERPRETATION

The table shows that 39% of the respondents agree that availability of the product will

influence their purchase decision.

76 | P a g e

4.6.4 Influence of brand name of the company on customer’s purchase

decision.

SL NOPARTICULARS

NUMBER OF

RESPONDENTS PERCENTAGE

1 Strongly agree 23 22

2 Agree 36 19

3 Neutral 0 0

4 Disagree 22 36

5 Strongly disagree 19 23

Total 100 100

( Table.4.9)

Strongly agree Agree Neutral Disagree Strongly disagree0

5

10

15

20

25

30

35

40

23%

36%

0%

22%19%

Impact of brand name on the consumer purchase decision

(Chart.4.9)

INTERPRETATION

The table shows that 36% of the respondents agree that brand name of the company will

influence their purchase decision.

77 | P a g e

4.6.5 Influence of previous experience on the products on customer’s

purchase decision.

SL NOPARTICULARS

NUMBER OF

RESPONDENTS PERCENTAGE

1 Strongly agree 50 50

2 Agree 34 34

3 Neutral 10 10

4 Disagree 6 6

5 Strongly disagree 0 0

Total 100 100

( Table.4.10)

Strongly agreeAgree

NeutralDisagree

Strongly disagree

01020304050

50%

34%

10%6%

0%

Influence of previous experience on customer's purchase decision

(Chart.4.10)

INTERPRETATION

The table shows that 50% of the respondents strongly agree that the previous experience

on the product will influence their purchase decision.

78 | P a g e

4.6.6 Influence of advertisements on customer’s purchase decision.

SL NOPARTICULARS

NUMBER OF

RESPONDENTS PERCENTAGE

1 Strongly agree 38 38

2 Agree 32 32

3 Neutral 2 2

4 Disagree 17 17

5 Strongly disagree 11 11

Total 100 100

( Table.4.11)

Strongly agreeAgree

NeutralDisagree

Strongly disagree

05

10152025303540

38%

32%

2%17%

11%

Impact of advertisements on the customer's purchase de-cision

(Chart.4.11)

INTERPRETATION

The table shows that 38% of the respondents strongly agree that the advertisements will

influence their purchase decision.

79 | P a g e

4.6.7 Influence of family/friends opinion on customer’s purchase

decision.

SL NOPARTICULARS

NUMBER OF

RESPONDENTS PERCENTAGE

1 Strongly agree 32 32

2 Agree 44 44

3 Neutral 9 9

4 Disagree 7 7

5 Strongly disagree 11 11

Total 100 100

( Table.4.12)

Strongly agree Agree Neutral Disagree Strongly disagree0

5

10

15

20

25

30

35

40

45

50

32%

44%

9%7%

11%

Impact of family/friends opinion on customer's purchase decision

(Chart.4.12)

INTERPRETATION

The table shows that 44% of the respondents agree that the opinions of family/friends

will influence their purchase decision.

80 | P a g e

4.6.8 Influence of sales promotional activities of the company on

customer’s purchase decision.

SL NOPARTICULARS

NUMBER OF

RESPONDENTS PERCENTAGE

1 Strongly agree 7 7

2 Agree 22 22

3 Neutral 11 11

4 Disagree 24 24

5 Strongly disagree 36 36

Total 100 100

( Table.4.13)

Strongly agreeAgree

NeutralDisagree

Strongly disagree

0

10

20

30

40

7%22%

11%24%

36%

Impact of sales promotional activities on the customer's purchase decision

(Chart.4.13)

INTERPRETATION

The table shows that 36% of the respondents strongly disagree that the sales promotional

activities of the company will influence their purchase decision.

81 | P a g e

4.7.1 Customer’s satisfactory level on Price of Rani Food Products

SL NOPARTICULARS

NUMBER OF

RESPONDENTS PERCENTAGE

1 Highly satisfied 22 22

2 Satisfied 46 46

3 Normal 14 14

4 Dissatisfied 11 11

5 Strongly dissatisfied 7 7

Total 100 100

( Table.4.14)

Highly satisfiedSatisfied

NormalDissatisfied

Strongly dissatisfied

05

101520253035404550

22%

46%

14%

11%

7%

(Chart.4.14)

INTERPRETATION

The table shows that 46% of the respondents satisfied with the price of Rani Food

Products.

82 | P a g e

4.7.2 Quality of Rani Food Products and customer’s satisfactory level

SL NOPARTICULARS

NUMBER OF

RESPONDENTS PERCENTAGE

1 Highly satisfied 48 48

2 Satisfied 32 32

3 Normal 20 20

4 Poor 0 0

5 Very poor 0 0

Total 100 100

( Table.4.15)

Highly satisfiedSatisfied

NormalPoor

Very poor

01020304050

48%

32%

20%

0%

0%

(Chart.4.15)

INTERPRETATION

The table shows that 48% of the respondents are highly satisfied with the quality of Rani

Food Products.

83 | P a g e

4.7.3 Customer’s satisfactory level on brand name ‘Rani Food Products

SL NOPARTICULARS

NUMBER OF

RESPONDENTS PERCENTAGE

1 Highly satisfied 36 36

2 Satisfied 45 45

3 Normal 4 4

4 Poor 13 13

5 Very poor 2 2

Total 100 100

( Table.4.16)

Highly satisfiedSatisfied

NormalPoor

Very poor

05

1015202530354045 36%

45%

4%13%

2%

(Chart.4.16)

INTERPRETATION

The table shows that 45% of the respondents are satisfied with Brand name ‘Rani Food

Products’.

84 | P a g e

4.7.4 Customer’s satisfactory level on the availability of Rani Food

Products

SL NOPARTICULARS

NUMBER OF

RESPONDENTS PERCENTAGE

1 Highly satisfied 33 33

2 Satisfied 28 28

3 Normal 23 23

4 Poor 14 14

5 Very poor 2 2

Total 100 100

( Table.4.17)

Highly satisfied Satisfied Normal Poor Very poor0

5

10

15

20

25

30

35 33%

28%

23%

14%

2%

(Chart.4.17)

INTERPRETATION

The table shows that 33% of the respondents are satisfied with the availability of Rani

Food Products.

85 | P a g e

4.7.5 Customer’s satisfactory level on the flavors of Rani Food Products

SL NOPARTICULARS

NUMBER OF

RESPONDENTS PERCENTAGE

1 Highly satisfied 50 50

2 Satisfied 38 38

3 Normal 9 9

4 Poor 3 3

5 Very poor 0 0

Total 100 100

( Table.4.18)

Highly satisfiedSatisfied

Normalpoor

Very poor

05

101520253035404550

50%

38%

9%

3%

0%

(Chart.4.18)

INTERPRETATION

The table shows that 50% of the respondents are highly satisfied with the flavors of Rani

Food Products.

86 | P a g e

4.7.6 Customer’s satisfactory level on the aroma of Rani Food Products

SL NOPARTICULARS

NUMBER OF

RESPONDENTS PERCENTAGE

1 Highly satisfied 42 42

2 Satisfied 28 28

3 Normal 16 16

4 Poor 11 11

5 Very poor 3 3

Total 100 100

( Table4.19).

Highly satisfiedSatisfied

NormalPoor

Very poor

05

1015202530354045

42%

28%

16%

11%

3%

(Chart.4.19)

INTERPRETATION

The table shows that 42% of the respondents are highly satisfied with the aroma of Rani

Food Products.

87 | P a g e

4.7.6 Customer’s satisfactory level on the packaging of Rani Food

Products

SL NOPARTICULARS

NUMBER OF

RESPONDENTS PERCENTAGE

1 Highly satisfied 29 29

2 Satisfied 50 50

3 Normal 11 11

4 Poor 10 10

5 Very poor 0 0

Total 100 100

( Table.4.20)

Highly satisfiedSatisfied

NormalPoor

Very poor

05

101520253035404550

29%

50%

11%10%

0%

(Chart.4.20)

INTERPRETATION

The table shows that 50% of the respondents are satisfied with the packaging of Rani

Food Products.

88 | P a g e

4.8. Factors which customers experience on Rani Food Products

SL NO

PARTICULAR

NUMBER OF

RESPONDENTS PERCENTAGE

1 Good quality 42 42

2 Affordable price 23 23

3 Timely availability 13 13

4 Easy applicability 10 10

5 Reliability 12 12

Total 100 100

( Table.4.21)

Good quality Affordable price Timely availability Easy applicability Reliability0

5

10

15

20

25

30

35

40

4542%

23%

13%10%

12%

(Chart.4.21)

INTERPRETATION

The table shows that 42% of the respondents ranked that they are mostly satisfied with

the quality of the Rani Food products.

89 | P a g e

4.9. Satisfaction level of customers on Rani Food Products compared

with the others substitutes available in the market

SL NOPARTICULARS

NUMBER OF

RESPONDENTS PERCENTAGE

1 Highly satisfied 31 31

2 Satisfied 40 40

3 Neutral 5 5

4 Dissatisfied 16 16

5 Highly Dissatisfied 8 8

Total 100 100

( Table.4.22)

Highly satisfiedSatisfied

NeutralDissatisfied

Highly Dissatisfied

05

10152025303540

31%

40%

5%

16%

8%

(Chart.4.22)

INTERPRETATION

The table shows that 40% of the respondents are satisfied with the Rani Food Products

compared with the others substitutes available in the market

90 | P a g e

4.10. Family/friends influence on customer’s decision to buy Rani Food

Products

SL NOPARTICULARS

NUMBER OF

RESPONDENTS PERCENTAGE

1 Strongly agree 39 39

2 Agree 36 36

3 Neutral 9 9

4 Disagree 3 3

5 Strongly disagree 13 13

Total 100 100

( Table.4.23)

Strongly agreeAgree

NeutralDisagree

Strongly disagree

0

5

10

15

20

25

30

35

40

39%

36%

9%

3%

13%

(Chart.4.23)

INTERPRETATION

The table shows that 36% of the respondents strongly agree that the family/friends

opinion influenced them to buy Rani Food products.

91 | P a g e

4.2 INFERENTIAL STATISTICS

I. Ho: There is no significant relationship between price of the product and

consumer buying behavior.

Mean Std. Deviation NInfluence of price of products on buying behavior

4.28 .780 100

Satisfactory level of Rani Food Products

3.65 1.149 100

Correlations

Influence of price of

products on buying

behavior

Satisfactory level of Rani Food

ProductsInfluence of price of products on buying behavior

Pearson Correlation 1 .866(**)Sig. (2-tailed) . .000Sum of Squares and Cross-products

60.160 76.800

Covariance .608 .776N 100 100

Satisfactory level of Rani Food Products

Pearson Correlation .866(**) 1Sig. (2-tailed) .000 .Sum of Squares and Cross-products

76.800 130.750

Covariance .776 1.321N 100 100

** Correlation is significant at the 0.01 level (2-tailed).

Inference:

Since the Correlation is significant at the 0.01 level (2-tailed) the null hypothesis that is

“Ho: There is no significant relationship between price of the product and

consumer buying behavior” is rejected and an alternative hypothesis is framed.

H1: There is significant relationship between price of the product and consumer

buying behavior.

92 | P a g e

II. Ho: There is no significant relationship between brand name of the company and

consumer buying behavior.

MeanStd.

Deviation NInfluence of brand name of the company on buying behavior

2.81 1.529 100

Satisfactory level of brand name of Rani Private Limited

4.00 1.054 100

Correlations

Influence of brand name of

the company on buying

behavior

Satisfactory level of brand name of

Rani Private Limited

Brand name of the company

Pearson Correlation 1 .815(**)Sig. (2-tailed) . .000Sum of Squares and Cross-products

231.390 130.000

Covariance 2.337 1.313N 100 100

Satisfactory level of brand name of Rani Private Limited

Pearson Correlation .815(**) 1Sig. (2-tailed) .000 .Sum of Squares and Cross-products

130.000 110.000

Covariance 1.313 1.111N 100 100

** Correlation is significant at the 0.01 level (2-tailed).

Inference:

Since the Correlation is significant at the 0.01 level (2-tailed) the null hypothesis that is

“Ho: There is no significant relationship between brand name of the company and

consumer buying behavior.” is rejected and an alternative hypothesis is framed.

H1: There is significant relationship between brand name of the company and

consumer buying behavior.

93 | P a g e

III. Ho: There is no significant relationship between company advertisements and

consumer buying behavior.

Mean Std. Deviation NInfluence of advertisement on Customer buying behavior

3.69 1.412 100

Influence of Advertisement of Rani Private Limited on buying decision

3.69 1.116 100

Correlations

Influence of advertisement on Customer

buying behavior

Influence of Advertisement of Rani Private

Limited on buying decision

Influence of advertisement on Customer buying behavior

Pearson Correlation 1 .919(**)Sig. (2-tailed) . .000Sum of Squares and Cross-products

197.390 143.390

Covariance 1.994 1.448N 100 100

Influence of Advertisement of Rani Private Limited on buying decision

Pearson Correlation .919(**) 1Sig. (2-tailed) .000 .Sum of Squares and Cross-products

143.390 123.390

Covariance 1.448 1.246N 100 100

** Correlation is significant at the 0.01 level (2-tailed).

Inference:

Since the Correlation is significant at the 0.01 level (2-tailed) the null hypothesis that is

“Ho: There is no significant relationship between company advertisements and

consumer buying behavior” is rejected and an alternative hypothesis is framed.

H1: There is significant relationship between company advertisements and

consumer buying behavior.

94 | P a g e

IV. Ho: There is no significant relationship between family/friends opinion and

consumer buying behavior.

MeanStd.

Deviation NInfluence of family/friends opinion on Customer buying behavior

3.81 1.261 100

Influence of family friends opinion about Rani Private Limited on buying decision

3.84 1.324 100

Correlations

Influence of family/friends

opinion on Customer

buying behavior

Influence of family friends opinion about Rani Private Limited on

buying decisionInfluence of family/friends opinion on Customer buying behavior

Pearson Correlation 1 .974(**)Sig. (2-tailed) . .000Sum of Squares and Cross-products

157.390 160.960

Covariance 1.590 1.626N 100 100

Influence of family friends opinion about Rani Private Limited on buying decision

Pearson Correlation .974(**) 1Sig. (2-tailed) .000 .Sum of Squares and Cross-products

160.960 173.440

Covariance 1.626 1.752N 100 100

** Correlation is significant at the 0.01 level (2-tailed).

Inference:

Since the Correlation is significant at the 0.01 level (2-tailed) the null hypothesis that is

“Ho: There is no significant relationship between family/friends opinion and

consumer buying behavior.” is rejected and an alternative hypothesis is framed.

H1: There is significant relationship between family/friends opinion and consumer

buying behavior.

95 | P a g e

V. Ho: There is no significant relationship previous experience on the products and

consumer buying behavior.

MeanStd.

Deviation NInfluence of previous experience on consumer's buying behavior

4.00 1.155 100

Consumer satisfaction about Rani Food Products compared to other products

3.70 1.283 100

Correlations

Influence of previous

experience on consumer's

buying behavior

Consumer satisfaction about Rani

Food Products compared to

other productsInfluence of previous experience on consumer's buying behavior

Pearson Correlation 1 .879(**)Sig. (2-tailed) . .000Sum of Squares and Cross-products

132.000 129.000

Covariance 1.333 1.303N 100 100

Consumer satisfaction about Rani Food Products compared to other products

Pearson Correlation .879(**) 1Sig. (2-tailed) .000 .Sum of Squares and Cross-products

129.000 163.000

Covariance 1.303 1.646N 100 100

** Correlation is significant at the 0.01 level (2-tailed).

Inference:

Since the Correlation is significant at the 0.01 level (2-tailed) the null hypothesis that is

“Ho: There is no significant relationship previous experience on the products and

consumer buying behavior.” is rejected and an alternative hypothesis is framed.

H1: There is significant relationship previous experience on the products and

consumer buying behavior.

96 | P a g e

5.1 SUMMARY

This document aims at providing marketing department and management

members with the information that can be beneficial both personally and professionally.

Every business enterprise has multiple objectives including of adequate profit for

payment of a reasonable rate of return to the owners and for investment in business

through satisfaction of customers, maintenance of a contended workforce and creation of

a public image. The basic job of marketing department is to understand the needs and

wants of the customers and produce goods and services for satisfying consumer’s needs

and wants. So it is very important before launching a new product survey of consumer

behavior is necessary to find out whether a particular product will sell or not so that

accordingly investment decision is taken.

The food manufacturing industry is one industry where there is cut throat

competition. The customers have number of alternatives to choose from. When there is

number of alternatives increases, the consumers use such strategies which eliminate a

number of early stages so it is the objective of the organization to gain a good name in

the minds of consumers.

This project entitled as “factors influencing buying behavior of non-durable

goods” was done to find out the factors which will influence the behavior of consumers

while they take decision to purchase non-durable goods. The study undertakes various

efforts to analyze all of them in great details. The researcher in this project at the outset

gives the clear idea of the entire department existing in the company and also the

products produced by the Rani Private Limited. From the study, the researcher was able

to find some of the important factors which will influence the consumer behavior while

they take decision to purchase non-durable goods. Factors like price, brand name,

advertisement, reference group, previous experience, accessibility and quality of the

products are very much affect the consumer behavior. It is also clear from the study that

the company is so eager in satisfying the expectations of their consumers and their

present effort for it is so far effective.

97 | P a g e

5.2 FINDINGS

The findings of the study are follows

The Rani Private Limited has a well defined organization structure.

Among the target market most of the people are well aware about the Rani Food

Products.

Most of the customers are using the products of the company for more than two

years

From the study it is clear that majority of respondents are highly satisfied with

products of Rani Private Limited.

The advertisements of Rani Private Limited have influenced the buying decision

of the customers.

From the study it is clear that most of respondents agrees to the fact that the

quality, availability of the product and brand name, advertisement, sales

promotional activities of the company, previous experience had influenced their

buying behavior.

Majority Respondents are agreeing that the opinions of friends or relatives about

a product will influence their purchase decision.

Price of the Rani Food products is affordable according to the most of the

respondents.

Majority of the respondents are highly satisfied with the quality of the Rani Food

Products.

The study reveals that the most of the respondents are satisfied with availability,

flavors, aroma, packaging and brand name of Rani Food Products.

98 | P a g e

5.3 SUGGESTIONS

The suggestions for the findings from the study are follows

Presently the company is more concentrates only on a small segment of Kerala;

the study reveals that the company has the potential for capturing the market all

over the state. So the company can expand its target market.

From the study, it is clear that the sales promotional activities have a significant

influence on the consumer’s buying behavior. So the company should give due

importance for sales promotional activities for attracting more customers.

The company can improve the package designs of the products, so that company

can attract more customers by stealing the competitor’s market share.

From the study, it is found that the advertisements of Rani Private Limited is not

so impressive compared to competitors, so that company should improve the

advertisement campaign.

99 | P a g e

5.4 LIMITATIONS OF THE STUDY

The limitations of the study are the following

Questionnaire method was used for data collection .The limitation of

questionnaire method is applicable to this study.

Since the study is conducted only in Malapuram and Calicut districts, it does not

possible to take overall conclusion.

The findings of this study cannot be generalized because the study is only

conducted among the customer’s of Rani Private Limited.

The investigator intended to cover only few areas of the topic relevant to the

proposed study. As the study was done in a limited time, investigator could not

select large sample for the study

100 | P a g e

5.5 CONCLUSION

Food manufacturing industry has its own relevance and need in today’s world.

Rani Private Limited is one of the food manufacturing companies in Kerala. The study

conducted on the “FACTORS INFLUENCING BUYING DECISIONS OF NON-

DURABLE GOODS” states the various factors which have influence on consumer’s

buying behavior.

The study was conducted among 100 employees and collected information

through structured questionnaire. The study helped to findings which were related with

customer’s buying behavior and company’s marketing strategies for attracting them.

In the Food manufacturing industry especially in Kerala there is tough competition is

going on because of large number of competitors and various alternatives available to the

customers. In order to meet the tough competition each company in the industry have to

attract more and more people towards their products. The main way to attract the

customers is to understand factors which are influencing their buying behavior.

The organization can still concentrate on specific areas which are evolved from

this study in order to make the customers more satisfied. Only if the customers are

properly served- they will purchase the product again. The suggestions of this report may

help in this direction. The study helps to understand about the food manufacturing

industry and also helps to know about the current trend in the market, sales and demand.

101 | P a g e

5.6 SCOPE FOR FUTURE RESEARCH

The present study on factors influencing consumer buying behavior of non-

durable goods helps to get clear picture about the factors which influence the customers

on their purchase of non durable goods. This in turn helps the management to formulate

suitable policy to attract more customers. Hence, the marketing strategies of the

company may also change.

The study of consumer behavior is so vast because consumers all around world

are not the same and the difference in consumer behavior between countries are

increasing. Because all aspects of consumer behavior are culture bound and not subject

to merely environmental factors but integrated in all of human behavior. There is further

scope for conducting research on areas like

Factors influencing the consumer purchase decision of durable goods.

Affect of sales promotional activities on consumer purchase behavior.

Influence of media on buying behavior

Influence of consumer personality on purchase decision

Motive behind purchase decision

 

102 | P a g e