A STUDY ON CONSUMER BUYING BEHAVIOUR

TOWARDS FMCG PRODUCTS

INTRODUCTION
The Fast-Moving Consumer Goods (FMCG) sector is one of the booming
sectors of the Indian economy which has experienced outstanding growth in the
past decade. This sector comprises of three main segments, which include
personal care, household care, food and beverages. Personal care comprises of
oral care, hair care, toiletries, soaps and cosmetics; household care comprises of
fabric wash and household cleaners; and food and beverages include health
beverages, soft drinks, cereals, dairy products, bakery products, chocolates etc.,
FMCG sector is an important contributor to India’s Gross Domestic Product
(GDP) and is also the fourth largest sector in the Indian economy, responsible
for providing employment. This sector also creates employment for around
three million people in downstream activities, which are generally carried out in
smaller towns and rural India.

MEANING OF CONSUMER BUYING BEHAVIOUR:

Consumer behavior is the study of how people make decisions about what
they buy, want, need or act in regards to a product, service, or company. It is
critical to understand consumer behavior to know how potential customers will
respond to a new product or service. It also helps companies identify
opportunities that are not currently met.

In other words, consumer buying behaviour “refers to the buying behaviour of

final consumers, both individuals and households, who buy goods and services
for personal consumption.” 
Consumer behaviour is the study of consumers and the processes they use to
choose, use and dispose of products and services, including consumer's
emotional, mental and behavioural responses.

Consumer Behaviour is a field of study which grows rapidly. It is a wider

concept that studies the reasons for the consumer in selecting the product which
satisfies their need or want.

TYPES OF CONSUMERS BUYING BEHAVIOUR:

1. Complex Buying Behavior:

Consumers go through complex buying behaviour when they are highly

involved in a purchase and aware of significant differences among brands.
Consumers are highly involved when the product is expensive, bought
infrequently, risky and highly self-expressive. Typically, the consumer does not
know much about the product category and has much to learn.
This buyer will pass through a learning process characterized by first
developing beliefs about the product, then attitudes, and then making a
thoughtful purchase choice. The marketer of a high-involvement product must
understand the information-gathering and evaluation behaviour of high-
involvement consumers.

The marketer needs to develop strategies that assist the buyer in learning about
the attributes of the product class, their relative importance, and the high
standing of the company’s brand on the more important attributes. The marketer
needs to differentiate the brand’s features, use mainly print media and long copy
to describe the brand’s benefits, and motivate store sales personnel and the
buyer’s acquaintances to influence the final brand choice.

2. Dissonance-Reducing Buying Behaviour:

Sometimes the consumer is highly, involved in a purchase but sees little

difference in the brands. The high involvement is again based on the fact that
the purchase is expensive, infrequent, and risky. In this case, the buyer will shop
around to learn what is, available but will buy fairly quickly because brand
differences are not pronounced. The buyer may respond primarily to a good
price or to purchase convenience.

After the purchase, the consumer might experience dissonance that stems from
noticing certain disquieting features of the product or hearing favorable things
about other brands. The consumer will be alert to information that might justify
his or her decision. The consumer will first act, then acquire new beliefs and
end up with a set of attitudes. Here marketing communications should aim to
supply beliefs and evaluations that help the consumer feel good about his or her
brand choice.
3. Habitual Buying Behaviour:

Many products are bought under conditions of low consumer involvement and
the absence of significant brand differences. Consider the purchase of salt.
Consumers have little involvement in this product category. They go to the store
and reach for the brand. If they keep reaching for the same brand, it is out of
habit, not strong brand loyalty.

There is good evidence that consumers have low involvement with most low-
cost, frequently purchased products. Consumer behaviour in these cases does
not pass through the normal belief/attitude/behaviour sequence. Consumers do
not search extensively for information about the brands, evaluate their
characteristics, and make a weighty decision on which brand to buy.

Instead, they are passive recipients of information as they watch television or

see print ads. Ad repetition creates brand familiarity rather than brand
conviction. Consumers do not form a strong attitude towards a brand but select
it because it is familiar. After purchase, they may not even evaluate the choice
because they are not highly involved with the product. So, the buying process is
brand beliefs formed by passive learning, followed by purchase behaviour,
which may be followed by evaluation.

Marketers of low-involvement products with few brand differences find it

effective to use price and sales promotions to stimulate product trial, since
buyers are not highly committed to any brand. In advertising a low-involvement
product, a number of things should be observed. The ad copy should stress only
a few key points Visual symbols and Imagery are important because they can
easily be remembered and associated with the brand.

The ad campaigns should go for high repetition with short- duration messages.
Television is more effective than print media because it is a low-involvement
medium that is suitable for passive learning. Advertising planning should be
based on classical conditioning theory where the buyer learns to identify a
certain product by a symbol that is repeatedly attached to it.

Marketers can try to convert the low-involvement product into one of

higher involvement. The ways are:

i. This can be accomplished by linking the product to some involving issue, as

when Crest toothpaste is linked to avoiding cavities.

ii. The product can be linked to some involving personal situation, for instance,
by advertising a coffee brand early in the morning when the consumer wants to
shake oft sleepiness.

iii. The advertising might seek to trigger strong emotions related to personal
values or ego defense.

iv. An important product feature might be added to a low-involvement product,

such as by fortifying a plain drink with vitamins,

These strategies at best raise consumer involvement from a low to a moderate

level, they do not propel the consumer into highly involved buying behaviour.

4. Variety-Seeking Buying Behaviour:

Some buying situations are characterized by low consumer involvement but

significant brand differences. Here consumers are often observed to do a lot of
brands’ switching. An example occurs in purchasing cookies. The consumer has
some beliefs, chooses a brand of cookies without much evaluation, and
evaluates it during consumption. But next time, the consumer may reach for
another brand out of boredom or a wish for a different taste. Brand switching
occurs for the sake of variety rather than dissatisfaction.
The marketing strategy is different for the market leader and the minor brands
in this product category. The market leader will try to encourage habitual
buying behavior by dominating the shelf space, avoiding out-of-stock
conditions, and sponsoring frequent reminder advertising. Challenger firms will
encourage variety seeking by offering lower prices, deals, coupons, free
samples and advertising that presents reasons for trying something new.

NEED OR IMPORTANCE OF CONSUMER BEHAVIOUR:

Marketers need to study the consumer behavior of consumer by doing this they
will understand the opportunities that are present in the market and the field
where they need to improve. This will also help to know the expectation of the
consumer relayed to a certain product.

  The study of consumer behaviour for any product is of vital importance

to marketers in shaping the fortunes of their organizations.

  It is significant for regulating consumption of goods and thereby

maintaining economic stability.

  It is useful in developing ways for the more efficient utilization of

resources of marketing. It also helps in solving marketing management
problems in more effective manner.

  Today consumers give more importance on environment friendly

products. They are concerned about health, hygiene and fitness. They
prefer natural products. Hence detailed study on upcoming groups of
consumers is essential for any firm.
  The growth of consumer protection movement has created an urgent
need to understand how consumers make their consumption and buying
decision.

  Consumers’ tastes and preferences are ever changing. Study of

consumer behavior gives information regarding color, design, size etc.
which consumers want. In short, consumer behavior helps in formulating
of production policy.

  For effective market segmentation and target marketing, it is essential to

have an understanding of consumers and their behavior.

FACTORS INFLUENCING CONSUMER BUYING BEHAVIOUR:

The factors influencing consumer buying behavior are as follows:

1. Cultural Factors

Consumer behavior is deeply influenced by cultural factors such as: buyer

culture, subculture, and social class.

Culture

Basically, culture is the part of every society and is the important cause of
person wants and behavior. The influence of culture on buying behavior
varies from country to country therefore marketers have to be very
careful in analyzing the culture of different groups, regions or even
countries.

Subculture

Each culture contains different subcultures such as religions, nationalities,

geographic regions, racial groups etc.

Social Class

Every society possesses some form of social class which is important to

the marketers because the buying behavior of people in a given social
class is similar. In this way marketing activities could be tailored
according to different social classes. Here we should note that social class
is not only determined by income but there are various other factors as
well such as: wealth, education, occupation etc.

2. Social Factors

Social factors also impact the buying behavior of consumers. The

important social factors are: reference groups, family, role and status.

Reference Groups

Reference groups have potential in forming a person attitude or behavior.

The impact of reference groups varies across products and brands
Reference groups also include opinion leader (a person who influences
other because of his special skill, knowledge or other characteristics).

Family

Buyer behavior is strongly influenced by the member of a family.

Therefore, marketers are trying to find the roles and influence of the
husband, wife and children. If the buying decision of a particular product
is influenced by wife, then the marketers will try to target the women in
their advertisement. Here we should note that buying roles change with
change in consumer lifestyles.

Roles and Status

Each person possesses different roles and status in the society depending
upon the groups, clubs, family, organization etc. to which he belongs. For
example, a woman is working in an organization as finance manager.
Now she is playing two roles, one of finance manager and other of
mother. Therefore, her buying decisions will be influenced by her role
and status.

3. Personal Factors

Personal factors can also affect the consumer behavior. Some of the
important personal factors that influence the buying behavior are:
lifestyle, economic situation, occupation, age, personality and self-
concept.

Age

Age and life-cycle have potential impact on the consumer buying

behavior. It is obvious that the consumers change the purchase of goods
and services with the passage of time. Family life-cycle consists of
different stages such young singles, married couples, unmarried couples
etc. which help marketers to develop appropriate products for each stage.

Occupation

The occupation of a person has significant impact on his buying behavior.

For example, a marketing manager of an organization will try to purchase
business suits, whereas a low-level worker in the same organization will
purchase rugged work clothes.

Economic Situation

Consumer economic situation has great influence on his buying behavior.

If the income and savings of a customer is high then he will purchase
more expensive products. On the other hand, a person with low income
and savings will purchase inexpensive products.

Lifestyle

Lifestyle of customers is another import factor affecting the consumer

buying behavior. Lifestyle refers to the way a person lives in a society
and is expressed by the things in his/her surroundings. It is determined by
customer interests, opinions, activities etc. and shapes his whole pattern
of acting and interacting in the world.

Personality

Personality changes from person to person, time to time and place to

place. Therefore, it can greatly influence the buying behavior of
customers. Actually, Personality is not what one wears; rather it is the
totality of behavior of a man in different circumstances. It has different
characteristics such as: dominance, aggressiveness, self-confidence etc.
which can be useful to determine the consumer behavior for particular
product or service.

4. Psychological Factors

There are four important psychological factors affecting the consumer

buying behavior. These are: perception, motivation, learning, beliefs and
attitudes.

Motivation

The level of motivation also affects the buying behavior of customers.

Every person has different needs such as physiological needs, biological
needs, social needs etc. The nature of the needs is that, some of them are
most pressing while others are least pressing. Therefore, a need becomes
a motive when it is more pressing to direct the person to seek satisfaction.

Perception

Selecting, organizing and interpreting information in a way to produce a

meaningful experience of the world is called perception. There are three
different perceptual processes which are selective attention, selective
distortion and selective retention. In case of selective attention, marketers
try to attract the customer attention. Whereas, in case of selective
distortion, customers try to interpret the information in a way that will
support what the customers already believe. Similarly, in case of selective
retention, marketers try to retain information that supports their beliefs.

Beliefs and Attitudes

Customer possesses specific belief and attitude towards various products.

Since such beliefs and attitudes make up brand image and affect
consumer buying behavior therefore marketers are interested in them.
 Marketers can change the beliefs and attitudes of customers by launching
special campaigns in this regard.

CONSUMER DECISION MAKING PROCESS:

The five stages of the consumer decision making process include;

Problem recognition, information search, information evaluation,
purchase decision, and evaluation after purchase.  This is just a general
model of the decision-making process and it emphasizes that the buying
decision making process starts before the actual purchase and continues
even after the purchase.  It also encourages the marketer to focus on the
complete buying process and not just on the purchase decision.

Need Recognition: 
Consumers recognize a problem as a need or want.  Of course, the most
frequent problem occurs when consumers realize they are out of the
product.

For example, when the gas tank gets near empty, or you run out of lunch
meat for your sandwiches, or when your car is due for maintenance.
Problem recognition also occurs when a consumer receives new
information about a good, service, or business.  New fashions, for
example, can make people recognize that their current clothing is not in
style or up to date.  Different circumstances can change and force a
consumer to recognize a major buying problem.   This need can also be
recognized with the help of Abraham Maslow’s need hierarchy.

1. Biological and Physiological needs - food, clothing, shelter.

2. Safety needs - protection from elements, security, order, law, stability,

freedom from fear.

3. Love and belongingness needs - friendship, intimacy, affection and

love, - from work group, family, friends, romantic relationships.

4. Esteem needs - achievement, mastery, independence, status,

dominance, prestige, self-
 respect, respect from others.

5. Self-Actualization needs - realizing personal potential, self-fulfillment,

seeking personal growth and peak experiences.

Information search:

Consumers search for information that is helpful in making a purchasing

decision.  They may get this information in one or in many ways.
Marketers are interested in the major information sources that consumers
use and the influence each has on the final purchase decision. Consumer
information sources typically fall into four groups: 

 personal sources;

 commercial sources;

 public sources; and

 experience sources.

The consumer receives the most information from commercial sources.

These include advertisements, salespeople, catalogs, newspapers, and
manufacturer-supplied direct mail. However, the most effective influence
often comes from such personal sources as family members and friends.  

Information Evaluation:

Follows the information search.  During this stage consumers usually

compare products with respect to their various features and benefits.
They may compare product brands, styles, sizes, colors, prices, and
related services.  They may also compare products at various stores.
They consumer may also evaluate the importance of certain information.
 For many consumers, perceived reliability is extremely important.  For
others, price, ease of operation, related services, or prestige may be
paramount.  Other information may be more important to consumers
when evaluating services.  

Purchase Decisions:

 At this stage in the decision-making process, consumers have

recognized a need, done some research on the product, and evaluated
available alternatives.  they are now ready to make a purchase decision,
the actual buying of a specified product.  Many factors influence the
purchase decision.  These include the cost of the product compared to
how much money the consumer can afford to spend, the opinions of
family or friends, and the sales and services policies of the marketer.
Some customers may wish to try a product before making a major
purchase. 

Evaluation After Purchase:

After customers make buying decisions, they often continue to evaluate

them.  Post-purchase evaluation occurs when a customer seeks reasons to
support a purchase decision.  retailers use the term buyer’s remorse to
describe a customer’s second thoughts after a purchase.  Marketers use
the term cognitive dissonance to refer to post-decision doubt that a
customer has about an original purchase.  This doubt stems from an
awareness that in reaching a particular buying decision the individual
may have rejected certain attractive alternatives. Doubt is created when
the motive for buying the alternative overshadows the actual purchase.
Marketers take positive steps to reduce cognitive dissonance and to help
buyers feel good about their purchases.  Successful marketers know that a
satisfied customer is an excellent advertisement for the company and its
products.  They try to fulfill their customers’ needs and wants.  Customer
oriented practices usually result in customer recommendations, called
word of mouth advertising and customer loyalty and repeat business.

Example of consumer decision making process:

E.g., Aman is a college going boy. He has a simple mobile phone with
basic features and he wishes to buy an android phone with best possible
features. He goes to his dad and asks for giving him a new phone. His dad
says that the budget is Rs.10000/-.

Stage 1: Aman realized that he needs a phone.

Stage2: He searches and gathers all the information regarding all the
phones and at the end he selected the phone that he wanted.

Stage3: Then he goes to his father and tells him that I have selected a few
phones in the budget that was given by you.

Stage4: And then his father provides him with the required amount. Then
Aman goes and actually purchases his cell phone.

Stage5: it includes the review of Aman after using the phone.

FAST-MOVING CONSUMER GOODS (FMCG)

Products which have a quick turnover, and relatively low cost are known as Fast
Moving Consumer Goods (FMCG). FMCG products are those that get replaced
within a year. Examples of FMCG generally include a wide range of frequently
purchased consumer products such as toiletries, soap, cosmetics, tooth cleaning
products, shaving products and detergents, as well as other non-durables such as
glassware, bulbs, batteries, paper products, and plastic goods. FMCG may also
include pharmaceuticals, consumer electronics, packaged food products, soft
drinks, tissue paper, and chocolate bars.

Fast-moving consumer goods (FMCG) or consumer packaged goods (CPG)

are products that are sold quickly and at relatively low cost. Examples include
non-durable goods such as soft drinks, toiletries, over-the-counter drugs, toys,
processed and many other consumables. In contrast, durable goods or major
appliances such as kitchen appliances are generally replaced over a period of
several years.

FMCG have a short shelf life, either as a result of high consumer demand or

because the product deteriorates rapidly. Some FMCGs—such as meat, fruits
and vegetables, dairy products, and baked goods—are highly perishable. Other
goods such as alcohol, toiletries, pre-packaged foods, soft drinks, and cleaning
products have high turnover rates.

Though the profit margin made on FMCG products is relatively small (more so
for retailers than the producers/suppliers), they are generally sold in large
quantities; thus, the cumulative profit on such products can be substantial.
FMCG is probably the most classic case of low margin and high-volume
business.
THE FMCG INDUSTRY

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 labour
costs and presence across the entire value chain gives India a competitive
advantage. The FMCG market is set to treble from US$ 11.6 billion in
2003 to US$ 33.4 billion in 2015. Penetration level as well as per capita
consumption in most product categories like jams, toothpaste, skin care,
hair wash etc in India is low indicating the untapped market potential.
Burgeoning Indian population, particularly the middle class and the rural
segments, presents an opportunity to makers of branded products to
convert consumers to branded products. Growth is also likely to come
from consumer 'upgrading' in the matured product categories. With 200
million people expected to shift to processed and packaged food by 2010,
India needs around US$ 28 billion of investment in the food-processing
industry.

Products belonging to the FMCG segment generally have the following

characteristics:

 They are used at least once a month

 They are used directly by the end-consumer

 They are non-durable

 They are sold in packaged form

 They are branded

INDUSTRY SEGMENTS

The main segments of the FMCG sector are:

1. Personal Care: oral care; hair care; skin care; personal wash
(soaps); cosmetics and toiletries; deodorants; perfumes; paper
products (tissues, diapers, sanitary); shoe care.

2. Household Care: fabric wash (laundry soaps and synthetic

detergents); household cleaners (dish/utensil cleaners, floor
cleaners, toilet cleaners, air fresheners, insecticides and mosquito
repellents, metal polish and furniture polish).

3. Branded and Packaged Food and Beverages: health beverages;

soft drinks; staples/cereals; bakery products (biscuits, bread,
cakes); snack food; chocolates; ice cream; tea; coffee; processed
 fruits, vegetables and meat; dairy products; bottled water; branded
flour; branded rice; branded sugar; juices etc.

LEADING COMPANIES IN MANUFACTURING OF FMCG

PRODUCTS:

Fast Moving Consumer Goods (FMCG) includes a wide variety of products that
are used on a regular basis including cosmetics, detergents, shaving items, soap,
toiletries and non-durable products such as batteries, light bulbs, glassware,
household electronics etc.

FMCG industry is one of the fastest growing sectors in the country, as the
consumer demand and penetration has greatly increased in the past few years.

1.ITC LTD:

ITC Limited is one of the top most traded FMCG company of India. It was
established in 1910 in the name “Imperial Tobacco company of India ltd”. later
in 1970 the name changed to “Indian Tabacco India limited” which was again
renamed in 1974 to what we know today “ITC Limited”. It is one of the oldest
FMCG company in Indian history. The company is headquartered in Kolkata,
West Bengal.
2. HINDUSTAN UNILEVER LIMITED:

HUL is one of the most popular FMCG company with a very diversified
portfolio. It is a result of the merger between unilever, an Anglo-Dutch FMCG
company, Hindustan Vanaspati Mfg. Co. Ltd and United Traders Ltd. The
merger was held in 1956 and the company got the name “Hindustan Lever
Limited”. It was renamed as “Hindustan Unilever Limited” in 2007. The
company is headquartered in Mumbai.
Some of the most popular brands are Kissan, Surf excel, Bru coffee, Brooke
Bond Taj Mahal, Fair & Lovely, Lakme etc

3.NESTLE LTD:

In 1959 Nestle India was incorporated at New Delhi as a subsidiary of Nestle

S.A. of Switzerland. They are key manufactures of food, dairy, chocolates and
coffee products. Some of their most popular products are: Maggi, Nescafe,
KitKat, Everyday, Milkmaid etc.

4.PARLE AGRO:

Parle Agro is the first complete Indian company on our list of top 10 FMCG
companies in India. This privately owned company was established in 1984.
The company headquartered in Mumbai having core business of food items,
FMCG and beverages. Frooti, Appy, LMN, Hippo and Bailey are some of its
popular brands.

5.BRITANNIA:

Britannia Industries limited is among the most trusted brands in India. It is an

Indian food-products corporation established in 1892. In 1918 the company was
named as The Britannia Biscuit Company Limited (BBC) and later renamed as
Britanis Industries Limited in 1979. The company is owned by the Wadia
Group since 1993. It’s headquartered at Kolkata and mainly produces food
items and dairy products.