A study on Customer Expectation and Preference towards New Product of Devicolam Distilleries Ltd

Submitted by Vimal Romeo PGDM Batch 18 Roll No. : 174

Under The Guidance Of Prof. Suryanarayanan Associate Professor, XIME

A Project Report submitted in partial fulfillment of the requirement for the award of Post Graduate Diploma in Business Management

Xavier Institute of Management and Entrepreneurship Bangalore

EXECUTIVE SUMMARY
The project work is titled A study on Customer Expectation and Preference towards New Product of Devicolam Distilleries Ltd. The duration of the study was 8weeks. Devicolam Distilleries Ltd., Kakkanad, Ernakulam has planned to introduce a new premium product in the market. So they want to know the customer preference and their expectation about the new product. Through this study, the company can get an overview about the preference of the customers and what all the things they expect in the new product.

Objectives
1. To know about the existing product of the DDL. 2. To study about how to improve the effectiveness of sales activity. 3. To know the future of the introducing product according to the present scenario. To know the competition between other companies

Results
1. 41% of the respondents are willing to purchase the new product. So there is a chance for the success of the new product. 2. Only 26% of them want a change in brandy colour and 74% of the respondents want no change in colour. So it is not compulsory to change the present brandy colour. 3. 100% of the respondents are expecting innovative bottle, gallo cap and mono carton. So while introducing new product the company should adopt new technologies for the success of the product. 4. 86% of them are expecting a price between Rs.300-Rs450.

Conclusion
The company should give importance for the quality and brand name of the product. The customers are expecting innovative bottle with gallo cap and carton. So for a better result the company should provide them these facilities at reasonable price.

Recommendations
1. Most of the respondents preferred innovative bottle, gallo cap and carton. So the company should introduce new product with these items. 2. The brand name is the main factor for purchasing a product. So the name of the product should be a suitable one. 3. The product should be introduced during festival season 4. The price of the product should be affordable i.e. between Rs.300 - Rs.450.

INTRODUCTION

Industry Background
DDL is a subsidiary of Cee Cee Holding and the leading distillery in Kerala with its state of the art manufacturing unit situated at Kakkanad near KINFRA IT Park in 6.5 acres of land about 30 Kilometer from Cochin airport, 10 Km from Ernakulam city and 12 Km from Cochin port. The roads are well laid and interconnected with KINFRA IT/Industrial Park and the location is best suited for distillery. We believe in manufacturing of high-level quality IMFL. We further believe in business ethics, total customer satisfaction and inspires trust and confidence in todays business environment. DDL got ISO 9001- 2000 certification in February 2005 for its quality management system. Our plant was expanded to the capacity of 4860000 CPA in the year 2006 with ultra modern hi-tech and sophisticated instruments and facilities. 9 automated bottling lines with slat conveyors are installed for attaining high-level production and to ensure the quality parameters. Liquor production is one of the profitable businesses in todays world. In India several private, public and government companies are producing liquor and making huge profits. But this liquor consumption is injurious to human body. It will spoil the life of the young generations of the country. The government cannot stop the production and distribution of liquor because it accelerates the revenue in the form of tax. The turnover tax of liquor (IMFL) sales is 100%. KSBC was formed on 23.02.1984 to take over the wholesale distribution of liquor in a phased manner and to eventually set up distilleries and blending units to produce spirit, arrack and IMFL. Since then the distribution of liquor has been bought under the control of Corporation except for loose vending of liquor by Bars/ clubs and a small portion of the retails by Consumer Federation. Kerala State Beverages Corporation Ltd (KSBC) is a public sector company owned by the Government of Kerala, which has a monopoly over wholesale and retail vending of alcohol in Kerala. It controls the retail sale of Indian Made Foreign Liquor and beer trade in the state. As per recommendation of a judicial commission, Kerala Government in 1984 amended the Abkari Act and set up a Public Sector Corporation to procure spirit and arrange blending, bottling, sealing and distribution of arrack and sale of IMFL. KSBC (Kerala State Beverages Corporation) has the monopoly right to distribute liquor throughout the state by KSBC and any other selling activities within the state are illegal and are subject to severe punishment including imprisonment.

Type

Public Sector Corporation Retail and Wholesale

Industry

alcohol (IMFL) vending

Founded

23.2.1984 Thiruvananthapuram, Kerala Kerala

Headquarters

Area served

The judicial commissions of inquiry appointed by the Government streamline the liquor trade in the state recommended 1. To provide genuine liquor at reasonable price, through Government agencies. 2. Exploitation through increased tax and exploitation by middlemen should be stopped and consumer protection must be guiding policy. 3. For achieving the above, nationalization of entire liquor trade was suggested. In line with the suggestion the Government decided to set up a public sector corporation to procure spirit and arrange blending, bottling, sealing, and distribution of arrack and also for dealing with the sale of IMFL. An amendment was made in the Akbari Act 1984 to give effect to the same. The Kerala State Beverages Corporation handles potable liquor made out of Extra Neutral Alcohol. Potable liquor is a consumable item containing potable Alcohol and other chemicals. The role of KSBC is channelizing all kinds of liquor/beer/wine from manufactures throughout the country for the consumers in Kerala. Any non-availability of any item is the decision of the respective manufacturer not to sell the item in Kerala. As such KSBC is not restricting purchase of liquor from any manufacturer who is prepared to enter into a valid contract. KSBC performs the role of procuring liquor and take adequate steps to ensure the quality standards of liquor and place them to the consumer through the various channels of distribution enabling the consumer to take his

preference. The liquor bought through KSBC contains the holographic stickers pasted on the bottle caps. The activity of KSBC confines to contracts for procurement and distribution. Consumer has to know his health condition while deciding to drink. Alcohol is not a freely marketable item like any other consumable but can be sold only through license. In this point of view there is a message that consumer has to check his health while consuming liquor. Liquor sales in Kerala for the 2011-12 fiscal touched dizzy heights, reaching an all-time high of Rs.7,860 crore compared to Rs.6730 crore in 2010-11, according to an official. According to the Kerala State Beverages Corporation (KSBC), the sole wholesalers in the state, Kerala also got a windfall by way of taxes, its revenue growing from Rs.5,232 crore to Rs.6,352 crore in the same period. Rum continued to be the most preferred drink for Kerala tipplers, which accounted for over 55 percent of sales followed by brandy (40 percent). Vodka drinkers were just about four percent and the rest were accounted by gin, whisky and wine lovers, said the official. Rum and brandy rule Keralas liquor market and together account for 94 percent of the sales of the Kerala State Beverages Corporation (KSBC) which is toasting record sales during the Left governments tenure.

Objectives
To study and analyse the consumer profile about the existing products of Devicolam Distillery Limited To give a suggestion to the company regarding the measures to be taken to increase the sales To make a study about the future of introducing a new product according to the present market scenario and the preferences of the consumers

METHODOLOGY
RESEARCH METHODOLOGY
Research is a scientific and systematic search for pertinent information on a specific topic. In simple terms research terms research refers to a search for knowledge.

RESEARCH DESIGN:
The type of research adopted is descriptive research. Descriptive research includes surveys and fact finding enquiries of different kinds. The major purpose of descriptive research is descriptive of the state of affairs as it exists at present. In social science business research we quite often use the term Ex Post Facto research for descriptive research studies. The main characteristic of this method is that the researcher has no control over the variables; he can only report what has happened or what is happening. Most Ex Post Facto research projects are used for descriptive studies in which the researcher seeks to measure such items as for example, frequency of shopping, and preference of people or similar data. Ex Post Facto studies also include attempts by researchers to discover causes even when they cannot control the variables. The methods used in this research are chi-square, weighted arithmetic mean and percentage analysis.

SAMPLE SIZE:
The population of study was too large for convenience 100 sample size is taken for the study.

DATA COLLECTION:
When deciding about the method of Data collection to be used for the study, the research should keep in mind two types of data via; primary and secondary data.

Primary data:
The primary data are those that are collected afresh and for the first time and thus happen to be original in character. In this study the primary data are collected through the structured questionnaires.

Secondary data:
In this study, the secondary data are collected through company website, official reports etc.

ANALYSIS
A survey is carried out among 100 customers mainly in south Kerala with the help of structured questionnaire. The respondents are of different age group having considered of this work. The primary data was collected directly from the consumers and secondary data was collected from official sources and internet, records of the company.

TOOLS USED FOR DATA ANALYSIS:

1. CHI-SQUARE: This is a statistical measure used in the context of sampling analysis for comparing a variance to a theoretical variance. The Chi-square test is an important test amongst the several tests of significant developed by statistical. 2. WEIGHTED ARITHMETIC MEAN: The weighted mean is similar to an arithmetic mean , where instead of each of the data points contributing equally to the final average, some data points contribute more than others. The notion of weighted mean plays a role in descriptive statistics and also occurs in a more general form in several other areas of mathematics. 3. PERCENTAGE ANALYSIS: This method is used in making comparison between two or more series of data. Percentage is used to describe the relationships; percentage can be used to compare the relative terms, the distribution of two or more series of data.

LIMITATIONS, FINDINGS & RECOMMENDATIONS

Limitations
Period of this study is limited to 8weeks. So, it could not be possible to cover all Kerala. There was a bias among the respondents while responding. The study mainly deals with the South Kerala. Only male respondents are taken into consideration. The sample size of hundred does not completely represent the population.

Findings
58% of the drinking respondents are between the age 26-40, followed by 22% below 25 age, 12% from 41-55 and only 8% of the respondents are coming above the age 55. 43% of the respondents drinking alcohol are Under Graduate, 37% are illiterate, 12% are coming under HSE and 8% have done Post Graduate. 56% of the liquor drinking respondents are salaried people, 24% of the respondents are Business people, 12% of them are Professionals and 8% of them are doing agriculture. There is no significant relationship between the income of the respondents and the brand used by the respondents. 60% of the total respondents are purchasing the products based on the brand name. So the name of the product should be simple and easy to understand. There is no significant relationship between the brand and the age of the respondents. 48% of the total respondents are having the habit of changing the brand while 52% do not have the habit of changing the brand. So people are using same brand continuously. Out of the total respondents, the chances of replacing the products are 82%. 41% of the respondents are willing to purchase the new product. So there is a chance for the success of the new product. Only 26% of them want a change in brandy colour and 74% of the respondents want no change in colour. So it is not compulsory to change the present brandy colour. 100% of the respondents are expecting innovative bottle, gallo cap and mono carton. So while introducing new product the company should adopt new technologies for the success of the product. 86% of them are expecting a price between Rs.300-Rs450.

If brandy is not available in the KSBC shop most of the people (72%) prefer Rum. 38% of the respondents are purchasing the products above 20 per month,31% are purchasing the no. of products within 16-20, followed by 12% are purchasing 11-15 products and 19% are purchasing below 10 products per month. Out of the total respondents major respondents (34%) of them are purchasing 500ml of products, 32% are buying 180ml product, 22% are purchasing 750ml, 8% are purchasing 375ml and 4% are purchasing 1000ml. Out of the total respondents, the chances of replacing the products are 82%. And the remaining 18% are not willing to replace their product.

Recommendations
Most of the respondents preferred innovative bottle, gallo cap and carton. So the company should introduce new product with these items. Most of the respondents prefer Rum if Brandy is not available . So the company can come up with a new variety of Rum as there are already 5 varieties of Brandy The brand name is the main factor for purchasing a product. So the name of the product should be a suitable and catchy one. The price of the product should be affordable i.e. between Rs.300 - Rs.450. The product should be introduced during festival season. There should be no change in brandy colour. They should promote the product as much as possible.