A RESEARCH REPORT ON

A Study on Consumer Perception as the Pre-Purchase Behavior towards Personal Care Products in the Markets of Durg and Bhilai.

Submitted in partial fulfillment for the award of the degree Master of Business Administration Chhattisgarh Swami Vivekananda Technical University, Bhilai

Submitted by, K. Ganesh Kumar MBA 2nd Semester [Session 2010-2011]

Approved By Dr. Sumita Dave HOD

Guided By Mr. Saket Ranjan Praveer Sr. Associate Professor MBA (SSMV)

Shri Shankaracharya Mahavidyalaya Junwani, Bhilai (C.G.) - 490020

CERTIFICATE This is to certify that the project A Study On Consumer Perception As The PrePurchase Behavior Towards Personal Care Products In The Markets Of Durg And Bhilai. submitted to Shri Shankaracharya Mahavidyalaya, Bhilai in partial fulfillment of the requirement for the award of Master of Business Administration (MBA) is an original work carried out by Mr. K. Ganesh Kumar a student of MBA II Sem, under my supervision and guidance.

Place: Durg Date:

Saket Ranjan Praveer Sr. Associate Professor SSMV, Bhilai

Shri Shankaracharya Mahavidyalaya Junwani, Bhilai (C.G.) 490020

DECLARATION I, K. Ganesh Kumar, a student of MBA II Semester 2010, at Shri Shankaracharya Mahavidyalaya hereby declare that this Project Report under the title A Study on consumer perception as the Pre-purchase behavior towards personal care products in the markets of Durg and Bhilai. is the record of my original work under the guidance of Mr. Saket Ranjan Praveer. This report has never been submitted to anywhere else for award of any degree/diploma.

Place: Bhilai Date:

K. Ganesh Kumar MBA II Semester

ACKNOWLEDGEMENT No great task can be completed successfully without suitable functional environment and proper guidance of the eminent personalities on the subject. I am really indebted to my teacher of Management Department Mr. Saket Ranjan Praveer (Faculty & research guide), under whose guidance we learnt various subjects of Management and reach the stage of preparing this research report. I also convey my sincere gratitude to other faculty members of SSMV for their kind support. I extend my warm and sincere thanks to respondents of Durg, who have given their precious time to fill the questionnaire which helped me to reach the conclusions. I feel proud to prepare this research report under the able guidance of all eminent and renowned personalities who provide their valuable guidance during the preparation of this research report. I hope it will prove to be an important study on the consumers preferences towards the FMCG sector.

Place: Bhilai Date:

K. Ganesh Kumar Enrollment No. AG8490 MBA II Semester

4 [iv]

TABLE OF CONTENTS

i. ii. iii.

CERTIFICATE DECLARATION ACKNOWLEDGEMENT TABLE OF CONTENTS

iv.

1. INTRODUCTION 2. LITERATURE REVIEW 3. RESEARCH METHODOLOGY 4. DATA ANALYSIS AND RESULTS 5. INTERPRETATION OF FINDINGS 6. RECOMMENDATIONS 7. LIMITATIONS 8. CONCLUSION vi. vii.

H Empl 3 oyee Retenti

REFERENCES APPENDIXES

CHAPTER 1:-INTRODUCTION The Indian personal care industry is estimated at Rs 170 billion. The industry is divided into fabric wash, personal wash, hair care, oral cares, skin care, colored cosmetics, mens toiletries and fragrances. Most segments of this industry are going through a decline in 2002 with several leading players reporting lower sales in 2002 due to lower volumes as well as lower realization. The next phase of growth has to come from the rural market as the urban markets are near saturation levels in terms of penetration. The industry has a low entry barrier and competition is severe. Besides the large multinational players, there are some leading domestic players as well as the huge unorganized players. Though most of the market share is with the larger players, companies vie for the marginal market share. Cheaper imports and duplicate products are also affecting the major players. Companies have been adopting promotion schemes to dole out freebies and repackaging products in smaller packages to cater to a wider consumer base are some recent trends. The way ahead for the personal care companies is to introduce new and better product, improve penetration, and make the consumer trade up in price and quality. Rural marketing will be a major thrust area for all companies. This study is been done to analyze the major factors which emphasis the consumers while purchasing personal care products, The current survey aims to combine information from the literature on the consumer perception, fate and effects of factors on intention of consumers while purchasing personal care products. Here is an attempt to know the perception of consumers towards personal care products in Durg and Bhilai. In this research I have tried to find out the impact of various factors on the purchase intention of the consumers.

[3]

Contributions of this study The purpose of this report is to provide a background understanding of what factors are considered by the consumers to know the perception towards personal care product. To prepare the report, an extensive literature based on factors of consumers perception towards personal care product has been done. With the help of this research i have tried to find out the significant impact of some factors such as Price, Quality, Convenience and Brand on the purchase intention of consumers while purchasing personal care product. In this research as per the time limitation I have done the work in following steps 1. I have identified some general factors which affects the purchase intention of consumers while purchasing personal care product.
2. According to these factors I have made questionnaire and done the survey in the

market of Bhilai and Durg. 3. There was a problem of time limitation so I have done the survey with the sample size of 100 respondents.
4. For the analysis of data I used Factor Analysis and Regression. After the analysis of

the data I found that price, quality, Convenience, brand is the major factor which significantly affects the purchase intention of consumers while purchasing personal care products. Analysis of the results of the research should go significantly beyond simple graphs, tables, and analysis of variance. The goal is to identify characteristics of buyers satisfaction level regarding various features that can be helpful in differentiating among groups of consumers with different beliefs, feelings, intentions, and buying behaviours, especially regarding personal care product.

[4]

INDUSTRY PROFILE

India is one of the largest emerging markets, with a population of over one billion. The Indian personal care industry is estimated at Rs 170 billion. The industry is divided into fabric wash, personal wash, hair care, oral cares, skin care, colored cosmetics, mens toiletries and fragrances. India is fourth largest economics in the world in terms of purchasing power and has a strong middle class base of 300 million. Around 70% of total households in India reside in the rural areas. The total number of rural households is expected to rise from 135 million in 2001-02 to 153 million in 2009-10. This presents the largest potential market in the world. The annual size of the rural FMCG market was estimated at around us$ 10.5 billion in 2001-02. With growing incomes at both the rural and the urban level, the market potential is expected to expand further.

[5]

CHAPTER 2:-LITERATURE REVIEW A literature review is a body of text that aims to review the critical points of current knowledge and or methodological approaches on a particular topic. Literature reviews are secondary sources, and as such, do not report any new or original experimental work. Most often associated with academic-oriented literature, such as thesis, a literature review usually precedes a research proposal and results section. Its ultimate goal is to bring the reader up to date with current literature on a topic and forms the basis for another goal, such as future research that may be needed in the area. A well-structured literature review is characterized by a logical flow of ideas; current and relevant references with consistent, appropriate referencing style; proper use of terminology; and an unbiased and comprehensive view of the previous research on the topic.

Perception Perception is a process by which individuals organize and interpret their sensory perceives in order to give meaning to their environment. However, what one perceives can be substantially different from objective reality. There need be, but there is often, disagreement. For example, its possible that all employees in a firm may view it as great place to work favorable working conditions, interesting job alignments, good pay, excellent benefits, an understanding and responsible management but, as most of us known, its very unusual to find such agreement.

[1]

Pre-Purchase decision Pre-purchase behavior data is essential in understanding what buyers are looking for and what in-person experiential marketing and merchandising tactics will best inform and satisfy these decision-makers. Whether at a tradeshow, in a store, or at other offline venues, more focus and attention must be paid to capturing data that exposes customer behavior -- which products they looked at, which features they spent time examining, what problems they are trying to solve. Studies have shown that in the absence of comprehensible information, customers determine their own baseline decision criteria for comparing products. Whereas a manufacturer may have designed a product to include features relating to performance, for example, a customer may overlook these features and focus on form factor, or price -- unless these features, advantages, and benefits are exposed to the customer in an articulate and effective manner. The purchase decision is a critical milestone for everyone involved in the sales process. But learning about prepurchase behavior is equally important. Answering the question "Why did the customer buy this product?" will eliminate guesswork, and will lead to long-term successful customer relationships.

[2]

Impact of various variables on purchase intention

Price Price is the one element of marketing mix that produces revenue; the other elements produce costs. Prices are perhaps the easiest element of the marketing program to adjust; product features, channels, and even promotion take more time. Price also communicates to the market the ongoing companys intended value positioning of its product or brand. A well-designed and marketed product can command a price premium and reap big profits. (Kotler & Keller, 2003, page 431). Saxena Rajan (page-321) explains that to manufacture, price represents the quality of money (or goods &services in a barter system) received by the firm or the seller for its product. Price determines the capability of a customer to buy. Thus price considered as Price= (quality of money by the seller)/ (quality of goods & services received by the seller) Price impact refers to the correlation between an incoming order (to buy or to sell) and subsequent price change. J.P. Bouchaud said that a potential powerful way to assist consumers in making dynamic decision is to disclose price information to them before they shop (Bouchaud, 2009). Quality Quality is a multidimensional concept that cannot be easily defined or measured, a distinction can be made between objective quality and perceived quality. Objective quality refers to the actual technical excellence of the product that can be verified and measured (Monroe & Krishnan 1985). In contrast, perceived

[3]

quality is the consumers judgment about a products overall excellence or superiority (Zenithal, 1988). The importance of perceived quality derives from its beneficial impact on purchase intentions, although contradictory research findings have been reported in the literature. Some scholars support a positive direct effect of perceived quality on purchase intentions (Carman 1990; Bounding, satisfaction (Cronin & Taylor 1992; Sweeney, Souter, & Johnson 1999) and yet others argue that both relationships exist (Tsiaotso 2006). However, it is of note that the dual effect (direct and indirect) of perceived product quality on purchase intentions has been found for goods, while the single effects (direct or indirect) have been reported from studies focused on services. In the book Zen and the Art of Motorcycle Maintenance, a cult hero of college students in an earlier generation literally went crazy trying to figure out the meaning of quality. Marketers appear to use the word quality as a catchall term for good. Because of its wide and imprecise usage attribute of quality threatens to become a meaningless claim (Solomon, 2003, page-306). Convenience The consumer usually purchases convenience goods frequently, immediately, and with a minimum of effort. Examples include tobacco products, soaps, and newspapers. (Kotler, 12Ed, page-375) Convenience is anything that is intended to save resources time, energy or frustration. A convenience store at a petrol station, For example: Sells items that have nothing to do with gasoline\petrol but it saves the consumer from having to go to a grocery store.(Wikipedia\ convenience) Impact of convenience according to
[4]

(journal of marketing management) states that there is a great impact of convenience on purchase intention of consumer. BRAND A Name, Term, Sign, Symbol or Design & a Combination of them, intended to identify the goods or services of one seller or group of sellers from those of competitors (By American Standard Association) Kotler, pg 276 had approached that Brand equity is the added value endowed to product or services. A brand is said to have positive customer-based brand equity when customer reacts more favorably to a product & the way it is identified as compared to when it is not. Branding is an important element in business. Without a brand, customers have to explain to the sellers in detail about the products that they want, while sellers may be confused or give the wrong products to the customers. Therefore, it can be assumed that brand acts as a sign, name or symbol for the products and services. The main aim of the brand is to identify the products or services of a seller or groups of sellers and differentiate an offering of a seller from that of its rivals (Kotler). (Halliday Jess, 29-Jul-2010) Branding and labeling have the most impact on consumers buying decisions, followed by blind tasting. When a consumer is making up their mind whether or not to buy a product they are not guided by its taste alone. A number of extrinsic factors also vie for their attention, such as awareness of the brand, labeling, price and origin. Kotler (pg 276) approaches brand equity from a customer based perspective defining it as the differential effect of brand knowledge on consumer response to the marketing of the brand.
[5]

Hypothesis: H1: Price has a significant impact personal care product. H2: Quality has a significant impact on consumer purchase intention while purchasing personal care product. H3: Convenience has a significant impact on consumer purchase intention while purchasing personal care product. H4: Brand has a significant impact on consumer purchase intention while purchasing personal care product. Research Model and Conceptual framework Price is taken as independent variable which has significant impact on purchase intention of customers, as given in literature review J.P. Bouchaud said that a potential powerful way to assist consumers in making dynamic decision is to disclose price information to them before they shop. Quality is taken as another variable which has significant impact on purchase intention of consumers; the importance of perceived quality derives from its beneficial impact on purchase intentions. Convenience is taken as variable which has significant impact on purchase intention of customers because convenience is anything that is intended to save resources time, energy or frustration.impact of convenience according to (journal of marketing management) states that there is a great impact of convenience on purchase intention of consumer. Brand is taken as independent variable which has significant impact on purchase intention of customers (Halliday Jess, 29-Jul-2010) When a consumer is making up their on consumer purchase intention while purchasing

[1]

mind whether or not to buy a product they are not guided by its taste alone. A number of extrinsic factors also vie for their attention like brand, labeling and origin.

Figure 1

[2]

CHAPTER 3:-RESEARCH METHODOLOGY

Research Methodology:Research Methodology is the way to systematically solve a research problem. In it the various steps are followed that are generally adopted in the study along with the logic behind them. It is a conceptual structure with in which the study is conducted. It constitutes the blue print for the collection, measurement and analysis of data. Causal research design has been taken to conduct the study. Data collection has been organized through primary source for which questionnaire containing 7-point likerts scale has been used. A convenience sampling has been used to collect data. 100 respondents were approached who were the users of personal care products. The samples collected from the city of Durg and Bhilai.

Research Objectives:1. To identify the significant factors of consumer perception as the pre-purchase

behavior.
2. To evaluate the impact of the factors of consumers perception as pre-

purchase behavior.

Research Plan
Research Design Research Instrument Measurement Scale Causal Structured questionnaire 7 point Likerts Scales

Sample Plan
[3]

Sampling Design Sample Size Sampling unit Demographics Sample Location

Convenience 100 User of Personal care products Age, Gender, Income, Occupation City of Durg and Bhilai

Data Collection:

Primary Data Collection It was collected during the interaction with people through questionnaire and personal interaction.

Secondary Data Collection The data collection was done through literature and information obtained from various sources to increase the effectiveness of the research. On the other hand, these are those which have already been passed through the statistical process .Inputs were obtained from:

o Websites. o Magazines. o Books. o Journals.

Questionnaire Design:It translates the information needed into a set of specific questions that the respondents can and will answer.

CHAPTER 4:-DATA TABULATION AND ANALYSIS

[4]

Factor Analysis:Factor analysis attempts to reduce the number of variables and discover the underline constructs that explain the variance. It extracts the uncorrelated factors that account for the largest portion of variance from an initial set of variables Correlation matrix is used to discover the simple pattern in the pattern of relationships among the variable. With the help of Factor Analysis found that quality and Brand were loaded in the same column, thus by analyzing the central point of both the variable, Quality (x21, x22, x23) is found to be lower than Brand i.e. (x41, x42, 43) thus quality has been eliminated from observed variables and then the regression analysis is done on remaining variables i.e. Price, convenience, Brand. Rotated Component Matrix Component 1 Y1 Y2 Y3 X11 X12 X13 X21 X22 X23 X31 X32 X33 X41 X42 X43 0.295 0.246 0.246 0.133 0.105 0.149 0.791 0.848 0.843 0.134 0.113 0.088 0.804 0.828 0.810 2 0.140 0.071 -0.028 0.172 0.168 0.218 0.349 0.254 0.296 0.892 0.898 0.892 -0.090 -0.095 -0.064 3 0.900 0.912 0.871 0.008 -0.019 0.117 0.180 0.192 0.053 -0.050 0.107 0.080 0.346 0.304 0.231 4 0.039 0.007 0.050 0.907 0.923 0.855 0.021 0.026 0.025 0.221 0.167 0.176 0.182 0.169 0.298

Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. a. Rotation converged in 6 iterations.

Regression Analysis
[5]

Variables Entered/Removed Variables Model Entered 1 X4, X3, X1a Variables Removed . Method Enter

a. All requested variables entered.

Model Summary Model 1 R 0.497 R Square 0.247 Adjusted R Square 0.224 Std. Error of the Estimate 1.21099

a. Predictors: (Constant), X4, X3, X1 ANOVA Model Regression Residual Total Sum of Squares Df 46.216 140.784 187.000 Mean Square F 3 15.405 96 1.467 99 Sig. 10.505 0.000

a. Predictors: (Constant), X4, X3, X1 b. Dependent Variable: Y Coefficients Unstandardized Coefficients Model 1 (Constant) X1 X3 X4 B 2.150 0.007 0.072 0.424 Std. Error 0.569 0.100 0.099 0.085 0.008 0.070 0.478 Standardized Coefficients Beta t 3.776 0.074 0.730 4.977 Sig. 0.000 0.941 0.467 0.000

a. Dependent Variable: Y

Regression Analysis
[6]

Regression is the determination of a statistical relationship between two or more variables. In simple regression, we have four variables, three variable (defined as independent) is the cause of the behavior of another one (defined as dependent variable).Regression interpret what exists physically i.e., there must be physical way in which independent variables x4, x3, x1 can be affected by dependent variable Y. It was found by factor and Regression analysis test that there was one factor which is significantly responsible for affecting purchase intention f consumers while purchasing personal care product, that is brand. In the factor analysis test the coefficient value of brand is 0.000 which is less than 0.05; the brand is a major factor which affects the consumers perception as pre-purchase behavior towards personal care product. The coefficient value of price is 0.941, quality is 0.467, which are greater than 0.05; these four factors dont affects the consumers perception as pre-purchase behavior towards personal care product.

[7]

CHAPTER 5:-INTERPRETATION OF FINDINGS

1. It was found by factor and Regression analysis test that there was one factor which

significantly responsible for affecting purchase intention of consumers while purchasing personal care product, that is brand.
2. In the factor analysis test the coefficient value of Brand X 4 is 0.000 which is less than

0.05; the Brand X4 is a major factor which affects the consumers perception as prepurchase behavior towards personal care product.
3. The coefficient value of Price X1 is 0.941, Quality X2 is 0.467, which are greater than

0.05; these four factors dont affects the consumers perception as pre-purchase behavior towards personal care product. 4. Coefficient value shows that most of the respondent highly considered brand while purchasing personal care products.

[8]

CHAPTER 6:-RECOMMENDATIONS Since, there is a significant difference among the determinants so every determinant is to be treated differently. As the consumers highly considered the factor Brand while purchasing personal care product, so Brand will be given highest consideration while developing market strategies. The marketers should focus on branding strategies as the consumers consider it while purchasing. More of investments need to be made towards building brand.

[9]

CHAPTER 7:-LIMITATIONS

This study is only modest attempt and not be claimed as comprehensive one, further it is to be pointed that data are inebriation for the study and consequently the findings mode out of it are reliable to the extent that the respondent have been for the right nourishing the same. During conducting this research I come across the following limitation: 1. The research and survey was limited to only one city of Chhattisgarh. 2. The time available for conducting was not sufficient. 3. Respondents were least interested. 4. Since the sample size taken was very small, the conclusion cannot be generalized.

[10]

CHAPTER 8:-CONCLUSIONS

It can be concluded that Brand has the major significance on the purchase intention of the consumers.

It can be said that the impact of other factors on consumer purchase intention is low like Price, Quality, and Convenience.

The consumers, of personal care products are more inclined towards the highly advertised brands available in the market.

[11]

REFERENCES

Blackwell, R.D.; Mansard, P.W.; Engel, J.F. (2001). Consumer Behaviors (Ninth Edition). Fort Worth: Carman JM (1990). Consumer perceptions of service quality: An assessment of the SERVQUAL dimensions. Journal of Retailing, 66(l), 33-55. Cronin JJ & Taylor SA (1992). Measuring service quality: a re examination and extension. En.wikipedia.org\wiki\convenience. http://marketing-bulletin.massey.ac.nz Marketing Bulletin, 2005, 16, Research Note 4, Page 1 of 10 J.P.Bouchaud, capital fund management March 13, 2009 Kotler Philip & Keller Kevin lane, marketing management 12th Ed. Page-374, 2003 Kotler Philip & Keller Kevin lane, marketing management 12th Ed. Page-431,2003 Loudon, D.; Della Bitta. (1986). A. Consumer Behavior. Concepts and Applications, New York: Monroe KB & Krishnan R (1985). The effects of price on subjective product evaluations, in Perceived Quality J. Jacoby and J. Olson (Eds). Lexington: Lexington Books, 209-232. McGraw-Hill. Solomon Michael. R. Consumer behavior 5th ed. (page-306) Saxena rajan, marketing management 3rd Ed. Page-321 Tsiotsou R (2006). The role of perceived product quality and overall satisfaction on purchase intentions. International Journal of Consumer Studies, 30 (2), 207-217. Zeithaml VA (1988). Consumer perceptions of price, quality, and value: A means-end model and synthesis of evidence. Journal of Marketing 52(July), 2-22.

[12]

APPENDICES QUESTIONNAIRE
STUDY ON CONSUMER PERCEPTION AS THE PRE-PURCHASE BEHAVIOUR TOWARDS PERSONAL CARE PRODUCTS IN THE MARKETS OF DURG AND BHILAI I am a student of master of business administration at shri shankaracharya mahavidyalaya, Bhilai. As a part of my curriculum, i am conducting a study on CONSUMER
PERCEPTION AS THE PRE-PURCHASE BEHAVIOUR TOWARDS PERSONAL CARE PRODUCTS IN THE MARKETS OF DURG AND BHILAI . The data will be used exclusively for

academic purpose only, without disclosing your identity. I would be grateful to you for your candid responses. Please mark a tick () in your preferred box. Strongly Disagree 1.1 1.2 1.3 2.1 2.2 2.3 3.1 3.2 3.3 4.1 4.2 4.3 I have an intention to purchase personal care products I am likely to purchase personal care products My intention to purchase personal care products is high I prefer price while purchasing personal care products 1 1 1 1 1 1 1 2 2 2 2 3 3 2 2 3 3 4 4 2 3 3 4 4 5 5 3 4 4 5 5 6 6 Neutral 4 5 5 6 6 7 7 Strongly Agree 5 6 6 7 7 6 7 7 7

1 2 3 4 5 6 7 Price is an important factor for me while purchasing personal care 1 2 3 4 5 6 7 products 1 2 3 4 5 6 7 1 2 3 4 5 6 7 If I get considerable Price I purchase personal care product 1 2 3 4 5 6 7 I prefer quality while purchasing personal care products 1 1 2 2 3 3 4 4 5 5 6 6 7 7

Quality is an important factor for me while purchasing personal care 1 2 3 4 5 6 7 products 1 2 3 4 5 6 7 1 2 3 4 5 6 7 If I get good quality I purchase personal care products 1 2 3 4 5 6 7 I prefer convenience while purchasing personal care products 1 1 2 2 3 3 4 4 5 5 6 6 7 7

Convenience is an important factor for me while purchasing personal 1 2 3 4 5 6 7 care products 1 2 3 4 5 6 7 1 2 3 4 5 6 7 If I find good convenience, I purchase Personal care product 1 2 3 4 5 6 7

[13]

5.1 5.2 5.3

I prefer Brand while purchasing Personal care products

1 1 2

2 3

3 4

4 5

5 6

6 7

Brand is an important factor for me while purchasing personal care 1 2 3 4 5 6 7 products 1 2 3 4 5 6 7 1 2 3 4 5 6 7 If I get good Brand I purchase Personal care products 1 2 3 4 5 6 7

6 6.1 6.2 6.3 6.4 6.5

Personal Details Name /Optional Age Gender Annual Income (Rs. Lakhs) Occupation 5

o o o o Student

<20 Male <1.

o
40

20

o o Female

41 - 60

>60

o
2.99

1.5-

3-4.50

>4.5

o Business o Service
Person Person

o Professional o Household (Specify)

o Other

Thank you for your contribution K.GANESH KUMAR MBA-II, Semester SSMV, Bhilai

[14]