1

FACTORS CONSIDERED WHILE PURCHASING FMCG PRODUCT

IN INDIA
SUBMITTED BY
AJAY GANESH I
R (17UBU679)
BACHELOR OF BUSINESS ADMINISTRATION
UNDER THE GUIDANCE OF
Dr. B. AUGUSTINE AROCKIARAJ, M. Com, M.Phil., B.Ed., PGDCA, NET, Ph.D.

DEPARTMENT OF BUSINESS ADMINISTRATION

ST. JOSEPH’S COLLEGE (AUTONOMOUS)

Accredited at A++ Grade (4th Cycle) by NAAC
Special Heritage Status Awarded by UGC
DBT- STAR & DST-FIST Sponsored College
TIRCHIRAPPALLI-620 002
APRIL -2020.
DR. B. AUGUSTINE AROCKIARAJ, M. Com, M.Phil., B.Ed., PGDCA, NET, Ph.D.

HEAD OF THE DEPARTMENT

DEPARTMENT OF BUSINESS ADMINISTRATION

ST. JOSEPH’S COLLEGE (AUTONOMOUS)

TIRUCHIRAPPALLI-620002.

CERTIFICATE

This is to certify of that the project work entitled, is a bonofield record “FACTORS
CONSIDERED WHILE PURCHASING FMCG PRODUCT IN INDIA”
work done by MR.AJAYGANESH I.R (17UBU679) during the academic year 2017-2020
submitted to ST. JOSEPH’S COLLEGE (AUTONOMOUS) TIRUCHIRAPPALLI for the
partial fulfilment for the award of degree BACHELOR OF BUSINESS ADMINISTRATION
by the DEPARTMENT OF BUSINESS ADMINISTRATION, ST. JOSEPH’S COLLEGE
(AUTONOMOUS) TRICHY-2. Under my guidance and supervision. This project work
represents entirely and independent and original work on the part of candidate and this work have
not previously from the basic for the award of other degree, diploma or other title.

HEAD OF THE DEPARTMENT SIGNATURE OF GUIDE

EXTERNAL EXAMINER
Mr. AJAY GANESH.I.R
BACHELOR OF BUSINESS ADMINISTRATION
ST. JOSEPH’S COLLEGE (AUTONOMOUS)
TIRUCHIRAPPALLI-620002.

DECLARATION

I hereby declare that the project work entitled FACTORS

CONSIDERED WHILE PURCHASING FMCG PRODUCTS
IN TAMILNADU has been originally carried out by me under the
guidance of DR. B. AUGUSTINE AROCKIARAJ, M. Com, M.Phil.,
B.Ed.,
PGDCA, NET, Ph.D. This report has not been submitted for any other
courses.

AJAY GANESH I R
(17UBU679)
 ACKNOWLEDGEMENT

First of all, I would like to express my gratitude to almighty god to

enabling me to complete this project work.

I thank Rev. Dr. M. Arockiaswamy Xavier, SJ, Principal, St. Joseph’s

College (Autonomous) Tiruchirappalli.

I express my gratitude to Prof. Dr. V. Alex Ramani, Deputy Principle,

St. Joseph’s College (Autonomous) Tiruchirappalli.

I special thanks to our department head and my guide.

Dr. B. AugustineArockiaraj, St. Joseph’s College (Autonomous)

Tiruchirappalli. For encouragement and guidance. I wish my sense of
gratitude and profound thanks to him.

I would also like to thanks my department professors and my dear

friends for their precious support which helped me in all ways to
complete my project report.

AJAY GANESH I R

(17UBU679)
CHAPTER CONTENTS PAGE.NO
1 INTRODUCTION 07

2 REVIEW OF LITERATURE 14

3 PROFILE OF THE STUDY AREA 19

4 DATA ANALYSIS AND INTERPRETATION 32

5 FINDINGS AND CONCLUTION 40

6 QUSTIONAIRE 41
 LIST OF TABLES

TABLE.NO TITLE PAGE.NO

4.1 GENDER 33

4.2 OCCUPATION 34

4.3 PURCHASING FACTOR 35

4.4 QUALITY 36

4.5 OPINION TOWARDS PRODUCT 37

4.6 PURCHASING PLACE 38

4.7 VALUE FOR MONEY 39

4.8 INFLUENCE OTHERS TO BUY THE 40

PRODUCT

CHAPTER-1
1.1 INTRODUCTION:-
Fast-moving consumer goods (FMCG) are products that are sold quickly and at a
relatively low cost. Examples include non-durable household goods such
as packaged foods, beverages, toiletries, over-the-counter drugs and
other consumables.[1][2]
FMCG is the most common acronym for such products across most of Europe,
Asia and Oceania, while CPG (consumer packaged goods) is used more frequently
in the Americas.
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 .
1.2 OBJECTIVES OF THE STUDY

MAIN OBJECTIVE
The main objective of this study is to find out the factors
considered while buying an FMCG by an consumer.

SPECIFIC OBJECTIVES

To find out the most effective or appropriate factor which influence

the consumer to buy them. So that marketing through particular
factor will help them attract more consumers.

1.3 UNDERSTANDING FAST MOVING CONSUMER GOODS

Consumer goods are products purchased for consumption by the

average consumer. They are divided into three different categories:
durable, nondurable goods, and services. Durable goods have a shelf
life of three years or more while nondurable goods have a shelf life of
less than one year. Fast-moving consumer goods are the largest
segment of consumer goods. They fall into the nondurable category, as
they are consumed immediately and have a short shelf life.

Nearly everyone in the world uses fast-moving consumer goods (FMCG)

every day. They are the small-scale consumer purchases we make at
the produce stand, grocery store, supermarket, and warehouse outlet.
Examples include milk, gum, fruit and vegetables, toilet paper, soda,
beer, and over-the-counter drugs like aspirin.
FMCGs account for more than half of all consumer spending, but they
tend to be low-involvement purchases. Consumers are more likely to
show off a durable good such as a new car or beautifully designed
smartphone than a new energy drink they picked up for $2.50 at the
convenience store.

1.4 CHARACTERISTICS

Let's take a look Add some of the characteristics that identify fast-
moving consumer goods in the marketplace. There are two different
categories that characterize fast-moving consumer goods.

 Consumer perspective characteristics include items that have a

very low price, are not difficult to choose, are purchased
frequently, are consumed rapidly and have short shelf lives.
 From the perspective of the marketer, these items are
characterized by high volumes of sales, a high contribution
margin, fast stock turnover and nationwide or worldwide
distribution networks.

1.5 FMCG IN INDIA

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.

1.6 HISTORY

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).
1.7 TYPES OF FAST MOVING CONSUMER GOODS

As mentioned above, fast-moving consumer goods are nondurable

goods, or goods that have a short lifespan, and are consumed at a rapid
or fast pace.

FMCGs can be divided into several different categories including:

 Processed foods: Cheese products, cereals, and boxed pasta

 Prepared meals: Ready-to-eat meals
 Beverages: Bottled water, energy drinks, and juices
 Baked goods: Cookies, croissants, and bagels
 Fresh, frozen foods, and dry goods: Fruits, vegetables, frozen
peas and carrots, and raisins and nuts
 Medicines: Aspirin, pain relievers, and other medication that can
be purchased without a prescription
 Cleaning products: Baking soda, oven cleaner, and window and
glass cleaner
 Cosmetics and toiletries: Hair care products, concealers,
toothpaste, and soap
 Office supplies: Pens, pencils, and markers

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.
 1.8 TOP FMCG COMPANIES IN WORLD :-

1st Place : Nestle.

2nd Place : Johnson & Johnson.
3rd Place : Procter & Gamble.
4th Place : Pepsi.
5th Place : Unilever.
6th Place : AB InBev.
7th Place : Coca Cola.
8th Place : JBS.
9th Place : Phillip Morris
10th Place : L’Oreal

1.9 TOP FMCG COMPANIES IN INDIA :-

1. Hindustan Unilever Limited (HUL) .

2. Colgate-Palmolive.
3. ITC Limited.
4. Nestlé.
5. Parle Agro.
6. Britannia Industries Limited.
7. Marico Limited.
8. Procter and Gamble.
9. The godrej group.
10. Amul.
Special Considerations

Fast-Moving Consumer Goods and E-Commerce

Shoppers across the globe increasingly purchase things they need

online because it offers certain conveniences—from delivering orders
right to the door to broad selection and low prices—that brick-and-
mortar stores can't.

The most popular e-commerce categories, not surprisingly, are non-

consumable goods—durables and entertainment-related products. The
online market for buying groceries and other consumable products is
growing, as companies redefine the efficiency of delivery logistics which
shorten delivery times. While non-consumable categories may continue
to lead consumable products in sheer volume, gains in logistics
efficiency have increased the use of e-commerce channels for acquiring
FMCGs.

Although a highly unlikely scenario, if the current global growth rates

for online and offline FMCG remain constant, online sales will exceed
those from bricks-andmortar stores by 2037a. There is a greater
likelihood of convergence between offline and online commerce with
concepts such as click and collect and alternative delivery solutions
introduced by businesses. E-commerce growth varies around the world.
In some countries, it’s taking off, while it’s stagnating in others.
Emerging technologies, macroeconomic conditions, cultural differences
and many other factors are influencing the evolution of e-commerce at
the market level.
 CHAPTER – 2
REVIEW OF LITERATURE

WHAT IS REVIEW OF LITERATURE?

A literature review or narrative review is a type of review article. A

literature review is a scholarly paper that presents the current
knowledge including substantive findings as well as theoretical and
methodological contributions to a particular topic. Literature reviews
are secondary sources and do not report new or original experimental
work. Most often associated with academic-oriented literature, such
reviews are found in academic journals and are not to be confused
with book reviews, which may also appear in the same publication.
Literature reviews are a basis for research in nearly every academic
field. A narrow-scope literature review may be included as part of a
peer- reviewed journal article presenting new research, serving to
situate the current study within the body of the relevant literature and
to provide context for the reader. In such a case, the review usually
precedes the methodology and results sections of the work.
Producing a literature review may also be part of graduate and post-
graduate student work, including in the preparation of
a thesis, dissertation, or a journal article. Literature reviews are also
common in a research proposal or prospectus (the document that is
approved before a student formally begins a dissertation or thesis).[1]
Literature review of kajeel chaterji 2018

With the changing mindset of consumers and the fast progressing

social and economic background, lowermost portion of the market
pyramid will be the fastest growing consumer market. Global fast
moving consumer goods (FMCG) industry dealing with distribution
and marketing of consumerproducts are coming with innovative
plans to tacklethe challenges due to intense competition, brand
loyalty, and intensifying expectations of the customers. This study
first examined the socioeconomicfactors of FMCG to explore
significant variables that affect the purchase intention of the
consumersand find the gap in existing literature. Interpretive
Structural Modeling (ISM) helps in examining relationships among
these factors. The driving and the dependence power of several
factors is recognized by the end results of ISM and is used as an
input to the fuzzy Matriced’ Impacts Croise’s Multiplication
Applique’ea UN Classement (MICMAC) analysis. The findings of the
study reveal that the consumer buying behavior is influenced to a
great extent not only by advertising strategy (AS), brand influence
(BI) and celebrity endorsement (CE) but also by virtual
merchandising.

INTRODUCTION :

Marketing of fast moving consumer goods (FMCGs) has a crucial

part in the economic progress along with the advancement of a
country, irrespective of the size and population (Sarangapani &
Mamatha, 2008). This sector primarily operates on low margins
and strength lies in the strong presence of distribution network,
stiff competition between the systematized and disorganized
sector, and the strong presence of multinational firms. To become
successful in highly dynamic and innovative FMCG segment, a
company not only has to be acquainted with the consumer, intense
brands, well-established and wide-ranging flow arrangement, but
also it has to have a sound understanding and knowledge of
packaging and promoting (Shaout & Khalid, 2014).
The enhancement in the commercial scenario of the rural and urban
customers has assisted the FMCG firms in magnifying their market
to the different vicinities of the country bringing along with
many challenges in front due to dynamic and highly volatile
consumer profile, stiff competition, inconsistent brand loyalty, and
mounting hopes of the consumers (Singh & Dar, 2014). To fight with
these complications the marketers need to craft creative marketing
strategies for which marketer must explore the perceptions of the
customers who look for parameters in selecting any brand of FMCG
(Attri et al., 2013). So the rise of FMCG consumerism has opened the
door of new research in
this vast area.

In this study, the existing literature is examined to explore significant

factor (variables) that affect the
purchase intention of the consumers for the FMCG products and to
find the gap in the existing literature based on the secondary data.
Because of the stunted exploration in the field of recognition
of factors for implementation of FMCG practices, this research can
unveil the different marketing policies which firms should inculcate
for a good enough understanding of the customers’
requirements. From past literature, ten common key FMCG factors
with the help of expert opinion are sought (discussed later) and
contextual relations are investigated and hierarchy among factors is
developed using Interpretive Structural Modeling (ISM) and fuzzy
Impact Matrix Cross-reference Multiplication Applied to a
Classification (MICMAC) analysis is performed subsequently for
removing the hidden relationship.
LITERATURE REVIEW OF PRIYANKA 2018

This study concludes that the factor influencing preferences of

customers across rural and urban area varies for FMCG products.
Product quality is the major influential factor in both rural and urban
area, but the number of respondents varies across both the areas. Price
influence purchase behavior more as compared to brand name in rural
area while brand name has more influence on the urban customers. The
marketers should consider the factors influencing preference of
customers to capture the majority of customer from both areas focusing
on various factors. 8

The present study has been carried out on factors influencing customer
preference across rural and urban areas. The study intends to provide
insights about the difference in the impact of factors influencing
customer across rural and urban areas. The response of customer is not
the same across rural and urban area, which will prove helpful for
marketer in planning marketing strategy for FMCG products. Comparing
individual factors influencing customer response provides idea of
customer behavior for purchase decision making for FMCG products.

LITREATURE REVIEW OF KULDEEP CHAND

This paper's intent was to obtain some insights of evaluative criteria in

consumer behaviour. It offers insights on how consumers take buying
decisions and evaluate alternatives while buying FMCG products. This
study has revealed that consumers apply several criteria while selecting
their FMCG purchases. The key criteria considered by consumers
include price, quality, brand, packaging, advertisement factors and
lifestyle factors. However, the dominant criteria and order of priority
varies across consumers. Review reveals that there is a difference
between rural and urban consumers towards price as an evaluative
criterion; price is an important consideration for rural consumers while it
is not a very important factor for evaluation for urban consumers.
Another interesting fact that has emerged is that advertisement has a
different impact on males and females; males are more influenced by
advertisement than females.
However, price as an evaluative criterion is more relevant to males than
females. Reviews bring us to the conclusion that consumers buy FMCG
products based on their income. Consumers with high incomes prefer
branded FMCG products while those with moderate income may settle
for unbranded products. Further, it was found that packaging is an
important evaluative criterion used by consumers while selecting FMCG
products as it helps consumers obtain information about the product and
highly influences consumers' buying behaviour. Review of literature
reveals that people belonging to higher social strata are choosier as
compared to those from lower social class. An interesting revelation is
that in today's era, both literate and illiterate people are brand conscious
and both groups of customers prefer branded products, which is
perceived to be of superior quality. Furthermore, review helps to
conclude that there are other factors considered by consumers, which
influence the choice of evaluative criteria that consumers use. Among
the main factors that influence choice of evaluative criteria are
education, awareness, affordability, adoptability and availability of
FMCG products. All consumers are different and use different
evaluative criteria for different products in FMCG products category.
 CHAPTER – 3
PROFILE OF STUDY AREA

CHANGE IN INDIAN CONSUMER PROFILE

Rapid urbanisation, increased literacy and rising per capita income,

have all caused rapid growth and change in demand patterns, leading
to an explosion of new opportunities. Around 45 per cent of the
population in India is below 20 years of age and the young population is
set to rise further. Aspiration levels in this age group have been fuelled
by greater media exposure, unleashing a latent demand with more
money and a new mindset.

INDIA COMPETITIVENESS AND COMPARISON WITH THE WORLD

MARKETS MATERIAL AVAILABILITY

India has a diverse agro-climatic condition due to which there exists a

wide-ranging and large raw material base suitable for food processing
industries. India is the largest producer of livestock, milk, sugarcane,
coconut, spices and cashew and is the second largest producer of rice,
wheat and fruits & vegetables. India also has an ample supply of caustic
soda and soda ash, the raw materials in the production of soaps and
detergents - India produced 1.6 million tonnes of caustic soda in 2003-
4. Tata Chemicals, one of the largest producers of synthetic soda ash
in the world is located in India. The availability of these raw materials
gives India the locational advantage.

POLICY

India has enacted policies aimed at attaining international

competitiveness through lifting of the quantitative restrictions, reduced
excise duties,
automatic foreign investment and food laws resulting in an environment
that fosters growth. 100 per cent export oriented units can be set up by
government approval and use of foreign brand names is now freely
permitted.

FDI Policy

Automatic investment approval (including foreign technology

agreements within specified norms), up to 100 per cent foreign equity or
100 per cent for NRI and Overseas Corporate Bodies (OCBs)
investment, is allowed for most of the food processing sector except
malted food, alcoholic beverages and those reserved for small scale
industries (SSI). 24 per cent foreign equity is permitted in the small-
scale sector. Temporary approvals for imports for test marketing can
also be obtained from the Director General of Foreign Trade. The
evolution of a more liberal FDI policy environment in India is clearly
supported by the successful operation of some of the global majors like
PepsiCo in India.

Removal of Quantitative Restrictions and Reservation Policy

The Indian government has abolished licensing for almost all food and
agro-processing industries except for some items like alcohol, cane
sugar, hydrogenated animal fats and oils etc., and items reserved for
the exclusive manufacture in the small scale industry (SSI) sector.
Quantitative restrictions were removed in 2001 and Union Budget
2004- 05 further identified 85 items that would be taken out of the
reserved list. This has resulted in a boom in the FMCG market through
market expansion and greater product opportunities.

Central and state initiatives

Various states governments like Himachal Pradesh, Uttaranchal and

Jammu & Kashmir have encouraged companies to set up manufacturing
facilities in their regions through a package of fiscal incentives. Jammu
and Kashmir offers incentives such as allotment of land at concessional
rates, 100 per cent subsidy on project reports and 30 per cent capital
investment subsidy on fixed capital investment upto US$ 63,000. The
Himachal Pradesh government offers sales tax and power concessions,
capital subsidies and other incentives for setting up a plant in its tax free
zones. Five-year tax holiday for new food processing units in fruits and
vegetable processing have also been extended in the Union Budget
2004-
5. Wide-ranging fiscal policy changes have been introduced
progressively. Excise and import duty rates have been reduced
substantially. Many processed food items are totally exempt from excise
duty. Customs duties have been substantially reduced on plant and
equipment, as well as on raw materials and intermediates, especially for
export production. Capital goods are also freely importable, including
second hand ones in the food-processing sector.

Critical operating rules in Indian FMCG sector

• Heavy launch costs on new products on launch advertisements, free

samples and product promotions.
• Majority of the product classes require very low investment in fixed
assets • Existence of contract manufacturing
• Marketing assumes a significant place in the brand building process
• Extensive distribution networks and logistics are key to achieving a
high level of penetration in both the urban and rural markets
• Factors like low entry barriers in terms of low capital investment, fiscal
incentives from government and low brand awareness in rural areas have
led to the mushrooming of the unorganised sector
• Providing good price points is the key to success

Household care

The size of the fabric wash market is estimated to be US$ 1 billion,

household cleaners to be US$ 239 million and the production of
synthetic detergents at 2.6 million tonnes. The demand for detergents
has been growing at an annual growth rate of 10 to 11 per cent
during the past
five years. The urban market prefers washing powder and detergents to
bars on account of convenience of usage, increased purchasing power,
aggressive advertising and increased penetration of washing machines.
The regional and smallunorganised players account for a major share of
the total detergent market in volumes.

Personal care

The size of the personal wash products is estimated at US$ 989 million;
hair care products at US$ 831 million and oral care products at US$ 537
million. While the overall personal wash market is growing at one per
cent, the premium and middle-end soaps are growing at a rate of 10
per cent. The leading players in this market are HLL, Nirma, Godrej
Soaps and Reckitt & Colman. The oral care market, especially
toothpastes, remains under penetrated in India (with penetration level
below 45 per cent) due to lack of hygiene awareness among rural
markets. The industry is very competitive both for organised and
smaller regional players. The Indian skin care and cosmetics market is
valued at US$ 274 million and dominated by HLL, Colgate Palmolive,
Gillette India and Godrej Soaps. This segment has witnessed the entry
of a number of international brands, like Oriflame, Avon and Aviance
leading to increased competition. The coconut oil market accounts for
72 per cent share in the hair oil market. In the branded coconut hair oil
market, Marico (with Parachute) and Dabur are the leading players. The
market for branded coconut oil is valued at approximately US$ 174
million.

Food and Beverages

Food

According to the Ministry of Food Processing, the size of the Indian

food processing industry is around US$ 65.6 billion including US$ 20.6
billion of value added products. Of this, the health beverage industry is
valued at
US$ 230 billion; bread and biscuits at US$ 1.7 billion; chocolates at US$
73 million and ice creams at US$ 188 million. The size of the semi-
processed/ready to eat food segment is over US$ 1.1 billion. Large
biscuits & confectionery units, soyaprocessing units and
starch/glucose/sorbitol producing units have also come up, catering to
domestic and international markets. The three largest consumed
categories of packaged foods are packed tea, biscuits and soft drinks.

Beverages

The Indian beverage industry faces over supply in segments like coffee
and tea. However, more than half of this is available in unpacked or
loose form. Indian hot beverage market is a tea dominant market.
Consumers in different parts of the country have heterogeneous tastes.
Dust tea is popular in southern India, while loose tea in preferred in
western India. The urban-rural split of the tea market was 51:49 in 2000.
Coffee is consumed largely in the southern states. The size of the total
packaged coffee market is 19,600 tonnes or US$ 87 million. The urban
rural split in the coffee market was 61:39 in 2000 as against 59:41 in
1995. The total soft drink (carbonated beverages and juices) market is
estimated at 284 million crates a year or US$ 1 billion. The market is
highly seasonal in nature with consumption varying from 25 million
crates per month during peak season to 15 million during offseason. The
market is predominantly urban with 25 per cent contribution from rural
areas. Coca cola and Pepsi dominate the Indian soft drinks market.

Mineral water market in India is a 65 million crates (US$ 50 million)

industry. On an average, the monthly consumption is estimated at 4.9
million crates, which increases to 5.2 million during peak season.
Exports

India is one of the world's largest producers for a number of FMCG

products but its exports are a very small proportion of the overall
production. Total exports of food processing industry was US$ 2.9
billion in 2001-02 and marine products accounted for 40 per cent of the
total exports. Though the Indian companies are going global, they are
focusing more on the overseas markets like Bangladesh, Pakistan,
Nepal, Middle East and the CIS countries because of the similar lifestyle
and consumption habits between these countries and India. HLL, Godrej
Consumer, Marico, Dabur and Vicco laboratories are amongst the top
exporting companies.

Domestic players

Britannia India Ltd (BIL)

Britannia India Ltd was incorporated in 1918 as Britannia Biscuit Co Ltd

and currently the Groupe Danone (GD) of France (a global major in the
food processing business) and the Nusli Wadia Group hold a 45.3 per
cent equity stake in BIL through AIBH Ltd (a 50:50 joint venture). BIL
is a dominant player in the Indian biscuit industry, with major brands
such as Tiger glucose, Mariegold, Fifty-Fifty, Good Day, Pure Magic,
Bourbon etc. The company holds a 40 per cent market share in the
overall organised biscuit market and has a capacity of 300,000 tonne per
annum. Currently, the bakery product business accounts for 99.1 per
cent of BIL's turnover. The company reported net sales of US$ 280
million in 2002-03. Britannia Industries Ltd (BIL) plans to increase its
manufacturing capacity through outsourced contract manufacturing and
a greenfield plant in Uttaranchal to expand its share in the domestic
biscuit and confectionery market.
Dabur India Ltd

Established in 1884, Dabur India Ltd is the largest Indian FMCG and
ayurvedic products company. The group comprises Dabur Finance,
Dabur Nepal Pvt Ltd, Dabur Egypt Ltd, Dabur Overseas Ltd and Dabur
International Ltd. The product portfolio of the company includes health
care, food products, natural gums & allied chemicals, pharma, and
veterinary products. Some of its leading brands are Dabur Amla, Dabur
Chyawanprash, Vatika, Hajmola, Lal Dant Manjan, Pudin Hara and the
Real range of fruit juices. The company reported net sales of US$ 218
million in 2003- 04. Dabur has firmed up plans to restructure its sales
and distribution structure and focus on its core businesses of fast-moving
consumer good products and over-the-counter drugs. Under the
restructured set-up, the company plans to increase direct coverage to gap
outlets and gap towns where Dabur is not present. A roadmap is also
being prepared to rationalise the stockists' network in different regions
between various products and divisions.

Indian Tobacco Corporation Ltd (ITCL)

Indian Tobacco Corporation Ltd is an associate of British American

Tobacco with a 37 per cent stake. In 1910 the company's operations
were restricted to trading in imported cigarettes. The company changed
its name to ITC Limited in the mid seventies when it diversified into
other businesses. ITC is one of India's foremost private sector companies
with a turnover of US$ 2.6 billion. While ITC is an outstanding market
leader in its traditional businesses of cigarettes, hotels, paperboards,
packaging and agriexports, it is rapidly gaining market share even in its
nascent businesses of branded apparel, greeting cards and packaged
foods and confectionary. After the merger of ITC Hotels with ITC Ltd,
the company will ramp up its growth plans by strengthening its alliance
with Sheraton and through focus on international projects in Dubai and
the Far East. ITC's subsidiary, International Travel House (ITH) also
aims to launch new products and services by way of boutiques that will
provide complete travel services.
Marico

Marico is a leading Indian Group incorporated in 1990 and operating in

consumer products, aesthetics services and global ayurvedic businesses.
The company also markets food products and distributes third party
products. Marico owns well-known brands such as Parachute, Saffola,
Sweekar, Shanti Amla, Hair & Care, Revive, Mediker, Oil of Malabar
and the Sil range of processed foods. It has six factories, and sub-
contract facilities for production. In 2003-04, the company reported a
turnover of US$ 200 million. The overseas sales franchise of Marico's
branded FMCG products is one of the largest amongst Indian
companies. It is also the largest Indian FMCG company in Bangladesh.
The company plans to capture growth through constant realignment of
portfolio along higher margin lines and focus on volume growth,
consolidation of market shares, strengthening flagship brands and new
product offerings (2-3 new product launches are expected in 2004-05). It
also plans to expand its international business to Pakistan.

Nirma Limited Nirma Ltd,

promoted by Karsanbhai Patel, is a homegrown FMCG major with a

presence in the detergent and soap markets. It was incorporated in 1980
as a private company and was listed in fiscal 1994. Associate companies'
Nirma Detergents, Shiva Soaps and Detergents, Nirma Soaps and
Detergents and Nilnita Chemicals were merged with Nirma in 1996-
1997. The company has also set up a wholly owned subsidiary Nirma
Consumer Care Ltd, which is the sole marketing licensee of the Nirma
brand in India. Nirma also makes alfa olefin, fatty acid and glycerine.
Nirma is one of the most successful brands in the rural markets with
extremely low priced offerings. Nirma has plants located in Gujarat,
Madhya Pradesh and Uttar Pradesh. Its new LAB plant is located in
Baroda and the soda ash complex is located in Gujarat. Nirma has
strong distributor strength of 400 and a
retail reach of over 1 million outlets. The company reported gross sales
of US$ 561 million in 2003-04. It plans to continue to target the mid and
mass segments for future growth.

Foreign players

Cadbury India Ltd (CIL)

Cadbury Indian Ltd vis a 93.5 per cent subsidiary of Cadbury

Schweppes Plc, UK, a global major in the chocolate and sugar
confectionery industry. CIL was set up as a trading concern in 1947 and
subsequently began its operations with the small scale processing of
imported chocolates and food drinks. CIL is currently the largest player
in the chocolate industry in India with a 70 per cent market share. The
company is also a key player in the malted foods, cocoa powder,
drinking chocolate, malt extract food and sugar confectionery segment.
The company had also entered the soft drinks market with brands like
'Canada Dry' and 'Crush', which were subsequently sold to Coca Cola in
1999. Established brands include Dairy Milk, Perk, Crackle, 5 Star,
Éclairs, Gems, Fructus, Bournvita etc. The company reported net sales
of US$ 160 million in 2003. The company plans to increase the number
of retail outlets for future growth and market expansion.

Cargill

Cargill Inc is one of the world's leading agri-business companies with a

strong presence in processing and merchandising, industrial production
and financial services. Its products and geographic diversity (over 40
product lines with a direct presence in over 65 countries and business
activities in about 130 countries) as well as its vast communication and
transportation network help optimise commodity movements and
provide competitive advantage. Cargill India was incorporated in April
1996 as a 100 per cent subsidiary of Cargill Inc of the US. It is engaged
in trading in soyabean meals, wheat, edible oils, fertilisers and other
agricultural commodities besides marketing branded packaged foods. It
has also set
up its own anchorage facilities at Rosy near Jamnagar in Gujarat for
efficient handling of its import and export consignments.

Coca Cola

Coca-Cola started its India operations in 1993. The Coca-Cola system in

India comprises 27 wholly company-owned bottling operations and
another 17 franchisee-owned bottling operations. A network of 29
contract-packers also manufacture a range of products for the company.
Leading Indian brands Thums Up, Limca, Maaza, Citra and Gold Spot
exist in the Company's international family of brands along with Coca-
Cola, Diet Coke, Kinley, Sprite and Fanta, plus the Schweppes product
range. During the past decade, the Coca-Cola system has invested more
than US$ 1 billion in India. In 2003, Coca-Cola India pledged to invest a
further US$ 100 million in its operations.
Colgate-Palmolive India

Colgate Palmolive India is a 51 per cent subsidiary of Colgate Palmolive

Company, USA. It is the market leader in the Indian oral care market,
with a 51 per cent market share in the toothpaste segment, 48 per cent
market share in the toothpowder market and a 30 per cent share in the
toothbrush market. The company also has a presence in the premium
toilet soap segment and in shaving products, which are sold under the
Palmolive brand. Other wellknown consumer brands include Charmis
skin cream and Axion dish wash. The company reported sales of US$
226 million in 2003-04. The company's strategy is to focus on growing
volumes by improving penetration through aggressive campaigning and
consumer promotions. The company plans to launch new products in
oral and personal care segments and is prepared to continue spending on
advertising and marketing to gain market share. Margin gains are being
targeted through efficient supply chain management and bringing down
cost of operations.
H J Heinz Co

A US$ 8.4 billion American foods major, H J Heinz Co comprises 4,000

strong brand buffet in infant food, sauces and condiments. The company
was the first to commence manufacturing and bottling of tomato ketchup
in 1876. In India, Heinz has a presence through its 100 per cent
subsidiary Heinz India Pvt Ltd. Heinz acquired the consumer products
division of pharmaceutical major Glaxo in 1994. Heinz's product range
in India consists of Complan milk beverage, health drink Glucon-D,
infant food Farex and Nycil prickly heat powder, besides the Heinz
ketchup range.

Hindustan Lever Ltd (HLL)

Hindustan Lever Ltd is a 51 per cent owned subsidiary of the Anglo-

Dutch giant Unilever, which has been expanding the scope of its
operations in India since 1888. It is the country's biggest consumer
goods company with net sales of US$ 2.4 billion in 2003. HLL is
amongst the top five exporters of the country and also the biggest
exporter of tea and castor oil. The product portfolio of the company
includes household and personal care products like soaps, detergents,
shampoos, skin care products, colour cosmetics, deodorants and
fragrances. It is also the market leader in tea, processed coffee, branded
wheat flour, tomato products, ice cream, jams and squashes. HLL enjoys
a formidable distribution network covering over 3,400 distributors and
16 million outlets. In the future, the company plans to concentrate on its
herbal health care portfolio (Ayush) and confectionary business (Max).
Its strategy to grow includes focussing on the power brands' growth
through consumer relevant information, cross category extensions,
leveraging channel opportunities and increased focus on rural growth.
Nestle India Ltd (NIL)

Nestle India Ltd a 59.8 per cent subsidiary of Nestle SA, Switzerland, is
a leading manufacturer of food products in India. Its products include
soluble coffee, coffee blends and teas, condensed milk, noodles (81 per
cent market share), infant milk powders (75 per cent market share) and
cereals (80 per cent market share). Nestle has also established its
presence in chocolates, confectioneries and other processed foods.
Soluble beverages and milk products are the major contributors to
Nestle's total sales. Some of Nestle's popular brands are Nescafe,
Milkmaid, Maggi and Cerelac. The company has entered the chilled
dairy segment with the launch of Nestle Dahi and Nestle Butter. Nestle
has also made a foray in non-carbonated cold beverages segment
through placement of Nestea iced tea and Nescafe Frappe vending
machines. Exports contribute to 23 per cent of its turnover and the
company reported net sales of US$ 440 million in 2003.

PepsiCo

PepsiCo is a world leader in convenient foods and beverages, with

revenues of about US$ 27 billion. PepsiCo brands are available in nearly
200 markets across the world. The company has an extremely positive
outlook for India. "Outside North America two of our largest and fastest
growing businesses are in India and China, which include more than a
third of the world's population" (Pepsico's annual report). PepsiCo
entered India in 1989 and is concentrating on three focus areas - soft
drink concentrate, snack foods and vegetable and food processing.
PepsiCo's success is the result of superior products, high standards of
performance and distinctive competitive strategies.
Procter & Gamble Hygiene and Health Care Limited

Richardson Hindustan Limited (RHL), manufacturer of the Vicks range

of products, was rechristened ‘Procter & Gamble India’ in October 1985,
following its affiliation to the ‘Procter & Gamble Company’, USA.
Procter & Gamble Hygiene and Health Care Limited (PGHHCL)
acquired its current name in 1998, reflecting the two key segments of its
business. P&G, USA has a 65 per cent stake in PGHHCL. The parent
also has a 100 per cent subsidiary, Procter & Gamble Home Products
(PGHP). The overall portfolio of the company includes healthcare;
feminine-care; hair care and fabric care businesses. PGHH operates in
just two business segments – Vicks range of cough & cold remedies and
Whisper range of feminine hygiene. The detergent and shampoo
business has been relocated globally to Vietnam.
 CHAPTER 4
DATA ANALYSIS AND INTERPRETATION

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.

4.1 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 Percentage

Male 35 35
Female 65 65
Total 100 100

No. of respondents
Pe rcentage

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.
4.1 Occupation:

Occupation is also influences a person’s consumption pattern. A blue

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

Occupation No. of respondents Percentage

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

No. of respondents Percentage

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.
4.3 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 38
Brand 28 28
Price 20 20
Easy availability 14 14
Others 0 0
Total 100 100

No of respondents
Percentage

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.
 4.4 Quality:

Company has two responsibility in a quality centered. First, they must

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

Opinions No of respondents percentage

Durability 35 35
Freshness 45 45
Taste 20 20
Others 00 00
Total 100 100

No of
No of respondentsrespondent
s, Durability, 35, 17%
No of respondents,
Durability
Freshness

Total, 100, N Toafste o

50% respondOetnhtesr,s Freshness, 45,
23%Total

No of
respondentNo of
s, Others,respondents,
0, 0%Taste, 20, 10%

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
4.5 Opinion towards Products:

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

perc
entage
No of respondents

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
4.6 Purchasing Place:

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

Easy available No of respondents percentage

Yes 95 95
No 05 05
Total 100 100

YesNo

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
4.7 Value for the Money:

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

Response No of respondents percentage

Yes 96 96
No 04 04
Total 100 100

Yes
No

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.
4.8 Influence to Others to Buy Products:

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

Recommend No of respondents percentage

Yes 95 95
No 05 05
Total 100 100

No of
respondents, No, 5, 5%

Yes
No

No of
respondents, Yes, 95, 95%

Interpretation:

95% of the respondents recommended FMCG products, 05% of the

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

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

2. Based on the occupation of the customer, it is found in the survey

that 65% are the housewives and 35% are from various occupations such as a
businessman, employee, farmers, etc for the FMCG products.

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

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

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

Mouth

Conclusions:

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

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

I am Ajay ganesh final year student of BBA in st.joseph college Trichy 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):