A MINOR REPORT

ON

Factors considered while purchasing FMCG product

Submitted to

Sujatha g.l (reader)

Submitted by

Manikanta bhakta

II MBA

Roll no: 0846

Poornaprajna institute of management

Udupi.

Introduction

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

Now a day’s customer has a wide variety of choice while selecting FMCG, producer has to innovate additional values to the product that the product continues it presence in the market. Different factor governing the customer based on different product category like milk products, beverages, prepared dishes, Chocolates & Confectionaries, personal care, fabric care etc.

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

Through this we can understand that the customers in the current scenario not only purchase the product based on the one quality that it contains. But they carefully analyze it and then go for the purchase. So knowing the customers attitude is important and what are the factors they considered when purchasing a product

So by this project we can come to know the factors considered by a consumer while purchasing a FMCG product

OBJECTIVE OF THE STUDY

PRIMARY OBJECTIVE:

To study the factors determining the pre purchase decision.

RESEARCH METHODOLOGY

Type of research

Descriptive

Type of data

Primary data

Data collection method

Data is collected through structured questionnaire.

Sampling

Convenient sampling

Sample size

100

Data analysis technique

Quantitative

Data analysis tool

Bar charts, pie charts.

Fast Moving Consumer Goods (FMCG)

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

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

Fast Moving Consumer Goods is a classification that refers to a wide range of frequently purchased consumer products including: toiletries, soaps, cosmetics, teeth cleaning products, shaving products, detergents, and other non-durables such as glassware, bulbs, batteries, paper products and plastic goods, such as buckets. ‘Fast Moving’ is in opposition to consumer durables such as kitchen

appliances that are generally replaced less than once a year. The category may include pharmaceuticals, consumer electronics and packaged food products and drinks, although these are often categorized separately. The term Consumer Packaged Goods (CPG) is used interchangeably with Fast Moving Consumer Goods (FMCG).

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

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

Unlike the perception that the FMCG sector is a producer of luxury items targeted at the elite, in reality, the sector meets the every day needs of the masses. The lower-middle income group accounts for over 60% of the sector's sales. Rural markets account for 56% of the total domestic FMCG demand. Many of the global FMCG majors have been present in the country for many decades. But in the last ten years, many of the smaller rung Indian FMCG companies have

gained in scale. As a result, the unorganized and regional players have witnessed erosion in market share.History of FMCG in India

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

Products and Categories:-

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

Top 10 FMCG Companies in India

1. Hindustan Unilever Ltd.

2. ITC (Indian Tobacco Company)

3. Nestle India

4. GCMMF (FMCG)

5. Dabur India

6. Asian Paints (India)

7. Cadbury India

8. Britannia Industries

9. Procter & Gamble Hygiene and Health Care

10. Marico Industries

The factors which customer focuses while purchasing FMCG products are Price Availability Brand name Quantity Quality Packing Advertisement Reference

Analysis and Interpretation of the Data:

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

Gender:Gender play vital role in purchase decisions. Gender classified on sex Basis

i.e. male and female. Gender classification is requiring to marketer because different gender exhibit different perception towards products. In classification of gender the following number is used to know their perception

Sex No. of respondents PercentageMale 35 35

Female 65 65Total 100 100

Interpretation:35% of the respondents are male and 65% of the respondents are female.

From the above table we can conclude that, the majority of the respondents belong to female group.

Occupation:

Occupation is also influences a person’s consumption pattern. A blueCollar worker will buy work cloths, work shoes and lunch boxes. Similarly theFMCG products are purchased by various occupants. The following occupants of the respondents are classifies for the data collection.

Occupation No. of respondents PercentageBusiness 20 20

Employees 10 10House wives 65 65

Others 05 05

Interpretation:

20% of the respondents are business, 10% of the respondents are Employees, and 65% of the respondents are house wives, 05% of the Respondents are others group.

Purchasing F actor

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

Interpretation:38% of respondents buying FMCG products for its Good Quality, 28% of

respondents use for its Band Name,20% of its Price Consideration, 14% of its easy availability of respondents buying FMCG products.

Quality:

Company has two responsibility in a quality centered. First, they must participate in formulating strategies and policies designed to help the company win through total quality excellence. Second they must deliver marketing quality alongside production quality. This helps to company to attract more number of customers to their products. Hence I try to collect information related to quality of FMCG products.

Opinions No of respondents percentageDurability 35 35Freshness 45 45

Taste 20 20Others 00 00Total 100 100

Interpretation:As per the data, 35% of the respondents buy the milk due to Thickness, 45%

of the respondents for Freshness, and 20% of respondents for Taste. Quality takes vital role in every organization. From the above table we can conclude that majority of the respondents expressed that FMCG product

Opinion towards Products:

The behavior of users after his commitment to a product has been collected with respect product and terms of satisfaction with rating scale. The following are the data obtained related to FMCG products. Analysis of Rating towards FMCG products

Ratings No of respondents PercentageExcellent 25 25

Good 48 48Average 22 22

Poor 05 05Total 100 100

Interpretation:

25% of the respondents rated that FMCG products are excellent. 48% of the respondents rated as good, 22% of the respondents rated as Average Quality. 05% of the respondents rated that FMCG products are Poor.From the above table we can conclude that majority of the respondents rated FMCG are of Good Quality

Purchasing Place:

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

Easy available No of respondents percentageYes 95 95No 05 05

Total 100 100

Interpretation:

95% of the respondents said that they are getting FMCG products easily. Only 05% of the respondents disagree with the easy available of FMCG products. From the above table we can conclude that majority of the respondents getting the FMCG products easily from the dealers or retailers

Value for the Money:

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

Response No of respondents percentageYes 96 96No 04 04

Total 100 100

Interpretation:96% of the respondents feel that they get the value for money they paid.

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

Influence to Others to Buy Products:

Post experience & benefits will help organization in obtaining the additional sale. In this connection feedback its act as an influence to others to adopt the product the user survey has conducted to identify what an extent user recommends to others. The data has been extracted & it is as follows.

Recommend No of respondents percentageYes 95 95No 05 05

Total 100 100

Interpretation:

95% of the respondents recommended FMCG products, 05% of the respondents not recommended FMCG products to others. From the above table we can conclude that majority of the respondent’s recommended FMCG products.

FINDINGS AND CONCLUSIONS

FINDINGS:

1. It is found in the survey that females are the main decision maker for the FMCG products. As per the data, 65% of female and 35% of male makes purchase decision.

2. Based on the occupation of the customer, it is found in the survey that 65% are the housewives and 35% are from various occupations such as a businessman, employee, farmers, etc for the FMCG products.

3. The main purchasing factors for the FMCG products are Quality and Brand image. The data reveals that 42% influences on Quality and 32% influenced for the Brand.

4. 88% of the total respondents are using product since from a long time. The majority of the respondents are using FMCG products from more than 3 years.

5. It is found in the survey that customer are influencing through Word of Mouth

Conclusions:

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

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

Customer Response – Questionnaire

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

Poornaprajana Institute of Management, Udupi, doing my minor project on

“factors to be considered while choosing a FMCG products” as a part of

study. I request you to provide the required information for the completion of

my study. And I Promise that the information is used exclusively for

academic purpose only.

1. Personal profile:

a. Name:

b. Address:

c. Sex: Male: [ ] Female [ ]

d. Age: [ ]

2. Occupation:

a. Self-employed: [ ] b. Professional: [ ]

c. House wife: [ ] d. Student: [ ]

3. What is the most important factor that matters while buying an FMCG?

a. Quality: [ ] b. Price: [ ] c. Service: [ ]

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

a. By friends/family: [ ] b. Direct mailers: [ ]

c. Press Ads: [ ] d. Reference website: [ ]

e. T.V. Ads: [ ]

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

a. Intermediaries: [ ] b. Standard: [ ]

c. Latest / Advanced: [ ]

6. Are you satisfied with the quality of the product?

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

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

Competitor’s product?

a. Very good: [ ] b. High: [ ]

c. Average: [ ] d. Same: [ ]

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

a. Daily: [ ] b. Monthly: [ ]

c. Weekly: [ ] d. Occasionally: [ ]

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

a. Outstanding: [ ] b. excellent: [ ]

c. Good: [ ] d. Average: [ ]

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

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

11. Suggestion (if any):

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Date: SIGNATURE