Effect of branding in purchase in purchase of FMCG products

CHAPTER-1 INTRODUCTION

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Section-A
INTRODUCTION TO FMCG: 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 days customer has a wide variety of choice while selecting FMCG, producer has to add additional values to the product that the product continues its presence in the market. Different factor governing the customer based on different product category like milk products, beverages, prepared dishes, Chocolates & Confectionaries, personal care and 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 effect of branding on consumer while purchasing a FMCG product & Durable goods.
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FMGC-Fast moving consumable goods

Meaning:
A type of good that is consume every day by the average consumer. The goods that comprise in this category are ones that need to be replaced frequently, compared to those that are usable for extended periods of time. FMCG refers to those retail goods that generally replaced or fully used up over a short period of days, weeks or months & within one year.

Main characteristics of FMCGs:

From the customers perspective : a) Frequent purchase. b) Low in investment (price). c) Low in involvement (Little or no effort to choose the item). From the marketers angle : a) High volume. b) Low margin. c) Extensive distribution network. d) High Stock turnover.

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Effect of branding in purchase in purchase of FMCG products

BRANDING:
American marketing Association defines a brand as, a name, term, symbol or design or a combination of them which is intended to identify the goods or services of one seller and to differentiate them from those of the competitors.

Functions/Objects of Branding:
1. It helps in product identification and gives distinctive to a product. 2. Indirectly, it denotes quality or standard of product. 3. It estimates imitation. 4. It helps in advertising and packaging activities. 5. It helps in price differentiation of a product. 6. It facilitates in making a choice. 7. It helps in create and sustain brand loyalty to a particular product. 8. It is essential for competition, because without a means for identification, there is no way of making choice.

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Advantage of Brand Name & Advantages to manufacturers:

1) Product differentiation Product differentiation by branding enables the manufacturers to establish their own price and eliminate price competition to some extent. 2) Brand Image The seller can build up a bright image of his product around the brand. A brand image id built up through the years by quality of products produced, services offered and the companys reputation, policies and marketing efforts. 3) Creation of market Ever increasing competition leads to branding of product by a manufacturer to face competition and create exclusive market for the product. 4) Advertisement and publicity Branding helps advertising, display and sales promotion, branding and packing go hand to hand.

5) Brand Preference
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Branding not only gives separate identity and easy recognition to the product. But it also creates special brand preference and brand loyalty.

6) Brand patronage Branding helps advertising, display and sales promotion, branding and packaging go hand to hand.

7) Expanding the product mix Many successful multi product firms today began with the single product whose success created on umbrella which additional product could be launched with the less risk.

Advantages to customer:
1. A customer has an assurance of quality and consistency in the product attributes being offered. 2. Certain brands provide status and psychological satisfaction to the consumers. 3. There is considerable saving of time and energy in shopping for goods. 4. Rapid sales turnover assures fresh due to frequent replacement of stock with the retailer.

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CONSUMER BEHAVIOUR
We start with the definition of consumer Market. A consumer Market can be defined as all the individuals and households who buy goods and services for personal consumption can be said to be part of the consumer market. Consumer Behavior is defined as All psychological, social and physical of all potential consumers as they become aware of, evaluate, purchase, consume and tell others about products and services

Nature and Characteristics of Indian consumers

Philip kotler has rightly said Market may be defined as a relationship between consumer and producer occurring at a time place and at a value mutually agreeable and acceptable to the concerned parties. It is the responsibility of the marketing system to discover and serve the market demand. It provides the vital link in connecting production (supply) and consumption that will ensure a desired standard of living in an economy. It is important for marketers of Indian firms also to understand the Indian market and its characteristics so as enable them to take crucial marketing decisions related to products, price, promotion and distribution. This will help in matching company products with consumer needs.

Nature and Characteristics of Indian consumer

1. Geography
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2. Population 3. Urban-Rural composition 4. Sex composition 5. Age factor 6. Literacy level 7. Income level 8. Linguistic diversity 9. Religion 10. Dress, food, habits and festival

Geography:
India ranks seventh in the world in terms of size. There are also various regions namely great mountain zone, Indo Gangetic plain, the desert regions. Climate in terms of temperature is also varied. Temperature in extreme north is low as compared to the south and north regions.

Population:
India is one of the worlds highly populated countries. Further, the distribution of the population is also unequally divided amongst the states of India. Related to density of population also there is diversity among the different regions/states depending upon topography, climate and level of economic development. Knowledge about the density of population will help the marketing executives in developing appropriate priorities and alternative marketing strategies.

Urban-Rural Composition:
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About 80% of Indias population is rural whereas 20% is urban. However, post independence period has seen a gradual shift of people towards urbanization. During the period, the urban population increased almost four times whereas rural population could only double itself. This rate of increase in urban population has been more pronounced in the states of Gujarat and Maharashtra mainly. This shift towards urbanization is mainly due to seeking of better job prospects, higher income and consequently better standard of living. This urban-rural feature will have a bearing on the consumption pattern of the consumers.

Sex Composition:
With increasing education, the role of women has undergone significant changes. The profile of women has changed from that of a housewife to a working woman. Today, the urban housewife is an active partner and plays a major role in the purchase decisions. In India the sex composition in most the states consists of more males than females except in Kerala where it is the other way round. This knowledge of sex composition will help the marketer to understand the market better and work out strategies to design suitable promotional techniques for each gender.

Age:
This is another important factor to be kept in mind while segmenting the market so that suitable marketing strategies may be developed. On account of wide exposure to various communication
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media like television, private channels, magazines, etc., children are also participating in buying decisions related to their clothes, toys, books, books, etc. An analysis of the Indian consumer will not be complete without a mention of the urban teenagers and youth market. They are more modern, careless for tradition and religion. They have an inclination towards the western culture and are quick to seek novelties new fashions.

Literacy Level:
Depending upon the level of literacy amongst the target consumers, the marketers will have to design a suitable communication mix for promotion of a product or service. According to 1991 census, the nations average literacy rate is 52.11 Crore literacy among males was 63.86% while among females it was 39.42%. With the efforts of government continuing to bring down the level of illiteracy in the country, there should be an increase in the level of literate consumers in the coming years. Thus the literacy level goes a long way in shaping consumer demand by influencing the tastes, Living standards and aspirations of people.

Income Level:
Income level, (money to spend or purchasing power) purchasing power or income has a direct effect on the potential demand for the product. Income levels can be analyzed on the basis of two income concepts, namely (a) disposable income(income minus taxes), (b) discretionary income, which is the income left after paying
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taxes and meeting expenses related to food clothing shelter and the other necessary items. Income, credit and assets are objective elements of our purchasing power. However, economic ability must be combined with willingness to buy i.e., the ability and willingness to spend the discretionary income will have a direct effect on the potential demand of the products. Purchasing power depends on the income of the target market. Thus, depending upon the income of its target market, the company will decide on the suitable marketing mix elements to be adopted especially related to pricing of the product.

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SECTION-B INDUSTRY PROFILE

In this competitive economy FMCG market is having significant demand in low to middle income consumers and above all highly price sensitive.

It consists of goods, which are directly consumable, packaged and branded. The FMCG in India has undergone extreme changes following economic Liberalization. Qualitative and quantitative restrictions are under the new trade policy. India stands as third largest industry in FMCG industry food and processed foods, personal care products and dental products. Insecticides, liquor, batteries are also included in this category.

Progressive reduction in excise duties on major FMCG product categories, rapid extensions of media reach especially TV, considerable caring of licensing restrictions are some of licensing restrictions are some of major drives of the India FMCG market in the recent past.

The industry contributes to the exchequer of income tax and central excise to the extent of 95% and 16% respectively of the total collection employment both direct and indirect and in terms of 994 data, it provided 6% of the total 9.1 million. The Industry contributes to the exchequer by way of income tax and central excise to the extent of 95% and 16% respectively of the total collection. It provides
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considerable employment both direct and indirect and in terms of the 994 data, it provided 6% of the total 9.1 million. The industry has a significant rural bias and accounts for 56% of the total rural Demand.

Expenditure on consumer durable like washing machines, refrigerators and color televisions has shown an impressive growth during the 1990s. The rural share of the market for FMCG had been growing steadily over the last few years, from 54.24% in 1989-90 to 56.26% in 1992-93 and to 57.9% in 1995-96. This share went up to 59.3% in 1995-96. This share went up to 59.3% in 1997-98.

Industry Classification: The FMCG industry is volume driven & is characterized by low margins. The products are branded & backed by marketing, heavy advertising, slick packaging & strong distribution networks. The FMCG segment can be classified under the premium segment & popular segment; the premium segment caters mostly to the higher/upper middle class which is not much price sensitive apart from being brand conscious. The price sensitive popular or mass segment consists of consumers belonging to the semi-urban or rural areas who are not particularly brand conscious. Products sold in the popular segment have considerably lower prices than their premium counterparts.

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Effect of branding in purchase in purchase of FMCG products

CHAPTER-03 RESEARCH DESIGN

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RESEARCH DESIGN
Title of the study: A study on effect of Branding on Consumers in Purchasing FMCG goods in Someshwara puram Tumkur

STATEMENT OF THE PROBLEM: FMCG are of high sales and they have short life and as they are fast moving as the title says. This study helps to understand how branding affects the purchase decision of the consumer in buying FMCG.

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OBJECTIVES OF THE STUDY:

1. To analyze how the brand affects the customers purchasing decision in FMCG goods. 2. To understand the choice of the customer is Branded or Branded goods. 3. To analyze the need of branding in FMCG goods. 4. To analyze the attributes which attract consumers to purchase the branded product. 5. To analyze the effect of promotional activities on brands in the buying behavior of customers. 6. To analyze whether branding helps customers away from competition & protect market share.

Scope of the study: This study helps us to know the necessity of branding on FMCG goods which have rapid sales.

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RESEARCH METHODOLOGY Type of study: This is a descriptive type of study which means Descriptive research, also known as statistical research, describes data and characteristics about the population or phenomenon being studied. Descriptive study answers the questions who, where, what, when and how.

Survey Method: Random sampling is done by circulating questionnaire to FMCG.

Questionnaires: A well structured questionnaire had been circulated to FMCG. A questionnaire consists of a set of questions regarding effect of branding FMCG.

Sample size: 100 consumers of FMCG were taken as sample for my study.

Sample population: This particular survey is directed at only who use FMCG.
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SOURCES OF DATA: Data was collected on two sources. 1. Primary Data 2. Secondary Data.

PRIMARY DATA is collected through questionnaire, search and research through place where today's computer has been mostly used. SECONDARY DATA is being search sites like magazines, newspapers, journals, websites and the data has been collected through other approaches.

Methods of interpreting data : 1. Graphs 2. Bar charts 3. Percentage.

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DATA ANALYSIS AND INTERPRETATION

Analysis of Age group of respondents Table no.1 Age group 15-20 21-25 26-30 31-35 35 and above Total No. of % of respondents respondents 21 21 27 27 18 18 16 16 19 19 100 100 Source: Primary data

Analysis: From the survey it is clear that 27% of the respondents fall in age group of 21-25, 21% come under 1520, 18% are in between 26-30, 19% of them are above 35 and 16% are of 31-35 age group

Inference: It can be inferred from above table that majority of the respondents fall in the age group of 21-25.

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Effect of branding in purchase in purchase of FMCG products

Graph No. 1

Graph title: "Age group of respondents"

15-20 21-25 26-30 31-35 35 and above

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Analysis of Gender of the respondents

Table no.2 Gender No of respondents 69 31 100 % of respondents 69 31 100

Male Female Total

Source: Primary data

Analysis: From the survey it is clear that 69% of the respondents are male and 31% are female employees.

Inference: It can be inferred from the above table that majority of respondents are of male category.

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Graph no 2

Graph Title: Gender of the respondents

80 70 60 50 40 30 20 10 0 Male Female

No of respondents

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Analysis of respondents opinion regarding their brand loyalty Table no. 3 Options Yes No Total No. of respondents 70 30 100 % of respondents 70 30 100

Source: Primary data

Analysis: It is clear that 70% of the respondents are brand loyal and 30% of them are not brand loyal.

Inference: It can be inferred from the above table that majority of the respondents are brand loyal.

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Graph no. 3 Graph title: Respondents opinion regarding their brand loyalty

Yes No

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Analysis Respondents opinion regarding the attribute that attracts to buy a branded product

Table no. 4 Attribute Brand name Cleanliness Price Easy availability others Total No. of respondents 34 24 23 9 10 100 % of respondents 34 24 23 9 10 100

Source: Primary data

Analysis: It is clear that 34% say brand name attracts in buying branded product, 24% say that its cleanliness, 23% say that its price, 10% opine that its other factors and 9% thinks that its price attracts them to buy branded product.

Inference: It can be inferred from the above table that majority of the respondents say that brand name attracts them to buy a product.
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Effect of branding in purchase in purchase of FMCG products

Graph no 4

Graph Title: Respondents opinion regarding the attribute that attracts to buy a branded product

Brand name Cleanliness Price Easy availability others

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Effect of branding in purchase in purchase of FMCG products

Analysis of respondents opinion regarding the reason for the delay between purchase decision and the actual purchase Table no. 5 Reasons No of respondents 27 % of respondents

Financial constraints Waiting for more 55 innovative product Waiting for 18 market response Total 100

27 55

18 100

Source: Primary data

Analysis: It is clear that 55% of the respondents delay the actual Purchase because they wait for more innovative product, 27% say that its financial constraints and 18% are delaying actual purchase because they wait for market response. Inference: It can be inferred from the above table that majority of the respondents wait for the innovative product before the actual purchase.
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Effect of branding in purchase in purchase of FMCG products

Graph no 5

Graph Title: Respondents opinion regarding the reason for the delay between purchase decision and the actual purchase

60 50 40 30 20 10 0 Financial constraints Waiting for more Waiting for market innovative product response

No of

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Effect of branding in purchase in purchase of FMCG products

Analysis of Respondents opinion regarding factors that influences to buy branded product

Table no. 6 Influences No of respondents 27 8 17 20 16 % of respondents

Advertising Shop display Word of mouth Attractive packaging Family/Friends/ Relatives Dealer Any other Total

27 8 17 20 16

7 7 4 4 100 100 Source: Primary data

Analysis: It is clear that 27% are influenced by advertising, 20% are influenced by attractive packaging, 17% from word of mouth and 16% are influenced by family/friends/relatives. Inference: It can be inferred from the above table that majority of the respondents feel that advertisement influences them to buy branded product.
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Graph no 6:

Graph Title: Respondents opinion regarding factors that influences to buy branded product

Advertising Shop display Word of mouth Attractive packaging Family/Friends/ Relatives Dealer Any other

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Analysis Respondents opinion regarding the influence of brand name in purchase of FMCG products

Table no. 7 Options No of respondents 54 26 17 3 100 % of respondents

Agree Strongly agree Disagree Strongly disagree Total

54 26 17 3 100

Source: Primary data

Analysis: It is clear that 54% agree, 26% strongly agree, 17% disagree and 3% strongly disagree that brand name influences the purchase of FMCG products.

Inference: It can be inferred from the above table that majority of the respondents agree that brand name influences the purchase of FMCG products.
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Graph no 7

Graph Title: Respondents opinion regarding the influence of brand name in purchase of FMCG products.
60

50

40

30

No of respondents

20

10

0 Agree Stongly agree Disagree Strongly disagree

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Effect of branding in purchase in purchase of FMCG products

Respondents opinion regarding the influence of Quality in purchase of FMCG products Table no. 8 Options Agree Strongly agree Disagree Strongly disagree Total No of respondents 52 34 13 1 100 % of respondents 52 34 13 1 100

Source: Primary data

Analysis: It is clear that 52% agree, 34% strongly agree, 13% disagree and 1% strongly disagree that quality influences the purchase of FMCG products.

Inference: It can be inferred from the above table that majority of the respondents agree that quality influences the purchase of FMCG products.

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Graph no 8

Graph Title: Respondents opinion regarding the influence of Quality in purchase of FMCG products

60

50

40 No of respondents

30

20

10

0 Agree Strongly agree Disagree Strongly agree

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Analysis of Respondents opinion regarding the influence of price in purchase of FMCG products Table no. 9 Options Agree Strongly agree Disagree Strongly disagree Total No. of respondents 43 30 23 4 100 % of respondents 43 30 23 4 100

Source: Primary data

.Analysis: It is clear that 43% agree, 30% strongly agree, 23% disagree and 4% strongly disagree that quality influences the purchase of FMCG products.

Inference: It can be inferred from the above table that majority of the respondents agree that quality influences the purchase of FMCG products.

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Graph no. 9

Graph title: Respondents opinion regarding the influence of price in purchase of FMCG products

Agree Strongly agree Disagree strongly agree

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Analysis of table of satisfaction of respondents towards the product features branded FMCG products

Table no. 10 Options Yes No Total No. of respondents 80 20 100 % of respondents 80 20 100

Source: Primary data

Analysis: It is clear that 80% of the respondents are satisfied and 20% of them are not satisfied with the product features of branded FMCG products

Inference: It can be inferred from the above table that majority of the respondents are satisfied with the product features of branded FMCG products.

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Graph no 10

Graph Title: Table of satisfaction of respondents towards the product features branded FMCG products

80 70 60 50 No of respondents 40 30 20 10 0 Yes No

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Effect of branding in purchase in purchase of FMCG products

Analysis of respondents opinion regarding the influence of advertisement in purchase of FMCG products Table no. 11 Options Agree Strongly agree Disagree Strongly disagree Total No. of respondents 47 40 10 3 100 % of respondents 47 40 10 3 100

Source: Primary data

Analysis: It is clear that 42% agree, 40% strongly agree, 10% disagree and 3% strongly disagree that quality influences the purchase of FMCG products.

Inference: It can be inferred from the above table that majority of the respondents agree that quality influences the purchase of FMCG products.
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Graph no 11

Graph Title: Respondents opinion regarding the influence of advertisement in purchase of FMCG products
50 45 40 35 30 25 20 15 10 5 0 Agree Strongly agree Disagree Strongly disagree No of respondents

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Effect of branding in purchase in purchase of FMCG products

Analysis of respondents opinion regarding the switching of brand preference if promotional scheme is offered with another brand Table no. 12 Options Yes No Total No. of respondents 57 43 100 % of respondents 57 43 100

Source: Primary data

Analysis: It is clear that 57% of the respondents would like to switch brand and 43% of them do not like to switch brand if promotional scheme is offered with another brand.

Inference: It can be inferred from the above table that majority of the respondents would like to switch brand preference if promotional scheme is offered with another brand.

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Graph no 12

Graph Title: Respondents opinion regarding the switching of brand preference if promotional scheme offered with another brand

Yes 2nd Qtr

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Respondents opinion regarding purchase of FMCG product if required immediately Table No.13 Options No of respondents Buy the available 61 product Search for the 39 branded product Total 100 % of respondents 61 39 100

Source: Primary data

Analysis: It is clear that 61% of the respondents would like to buy the available product and 39% of them would search for the branded FMCG product.

Inference: It can be inferred from the above table that majority of the respondents would like to buy the easily available product if required immediately.

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Graph no 13

Graph Title: Respondents opinion regarding purchase of FMCG product if required immediately

Buy the available product Search for the branded product

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Analysis of respondents opinion regarding branded FMCG products over unbranded FMCG products Table no. 14 Options No of respondents 63 37 100 % of respondents

Yes No Total

63 37 100

Source: Primary data

Analysis: It is clear that 63% of the respondents say that branded FMCG products are better than unbranded FMCG products and 37% of them feel that unbranded FMCGs are better

Inference: It can be inferred from the above table that majority of the respondents feel that branded FMCG products are better than unbranded FMCG products.

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Graph no 14

Graph Title: Respondents opinion regarding branded FMCG products over unbranded FMCG products
70 60 50 40 30 20 10 0 Yes No No of respondents

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FINDINGS

1. It is clear from above table that majority of the respondents fall in the age group of 21-25.

2. We can conclude that majority of respondents are of male category.

3. It can be inferred from the above table that majority of the respondents are brand loyal.

4. From the survey it is clear that majority of the respondents say that brand name attracts them to buy a product.

5. We can easily say that majority of the respondents wait for the innovative product before the actual purchase

6. It is clear the above table that majority of the respondents feel that advertisement influences them to buy branded product.

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7. We can conclude that majority of the respondents agree that brand name influences the purchase of FMCG products.

8. It is clear from the above table that majority of the respondents agree that quality influences the purchase of FMCG products.

9. From the survey it is clear that majority of the respondents agree that quality influences the purchase of FMCG products

10. It is clear that majority of the respondents are satisfied with the product features of branded FMCG products.

11. We can conclude that majority of the respondents agree that quality influences the purchase of FMCG products.

12. Survey shows that majority of the respondents would like to switch brand preference if promotional scheme is offered with another brand.

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13. It is clear that majority of the respondents would like to buy the easily available product if required immediately.

14. From the survey it is clear that majority of the respondents feel that branded FMCG products are better than unbranded FMCG products.

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QUESTIONNAIRE Dear friends, I am a BBM student, as a part of course curriculum; I have taken up a study on effect of branding on consumers in purchasing FMCG goods. I would be grateful if you kindly co-operate by answering this questionnaire. The information is only for academic purpose and would be kept confidential. PERSONAL DETAILS NAME OF THE RESPONDENT: SEX: M OCCUPATION: AGE GROUP: 15-20 MONTHLY INCOME: 5000-10000 10001-20000 20001-30000 30000 and above 21-25 26-30 31-35 36 and Above F

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1. Are you a brand loyal customer? Yes No

2. Which attribute did attract you to purchase branded products? Brand Name Price Easy Availability Transparent Cleanliness Others

3. What was the reason for the delay between the purchase decision and the actual purchase? Financial constraints waiting for more innovative product waiting for market response

4. What influenced you to buy the branded products? Advertising Word of mouth Shop Display Family/Friend/Relatives any other

Attractive packaging Dealer

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5. Brand name influences in purchase of FMCG products. Agree Strongly Agree Disagree strongly disagree

6. Quality influences in purchase of FMCG products. Agree Strongly Agree Disagree strongly disagree

7. Price influences in purchase of FMCG products. Agree Strongly Agree Disagree strongly disagree

8. Are you satisfied with the product features of branded FMCG products? Yes No

9. Advertisement influences in Purchase of FMCG products. Agree Strongly Agree Disagree strongly disagree

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10. Will you like to switch your brand preference if you get some promotional scheme with another brand? Yes No

11. Do you think branded FMCG products are better than unbranded FMCG product? Yes No

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