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MARKETING
A COMPARATIVE STUDY OF CONSUMER BUYING
BEHAVIOR ON HAIR CARE PRODUCTS OF HUL AND
P&G
A PROJECT REPORT SUBMITTED TO FACULTY OF MANAGEMENT
STUDIES, UNIVERSITY OF DELHI IN THE PARTIAL FULFILLMENT OF
THE REQUIREMENTS FOR THE DEGREE OF MASTERS IN BUSINESS
ADMINISTRATION
Under the Guidance of
DR. HAMENDRA KUMAR DANGI
Submitted By:
SOUKVINA PHILAVANH
Roll No. F-138
MBA, (FT) 2011-13
FACULTY OF MANAGEMENT STUDIES
UNIVERSITY OF DELHI
MARCH 2013
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A COMPARATIVE STUDY OF CONSUMER BUYING BEHAVIOR ON HAIR
CARE PRODUCTS OF HUL AND P&G
BY
SOUKVINA PHILAVANH
Faculty of Management Studies, University of Delhi
Submitted in the partial fulfillment of the requirements for the
final year of
Masters of business administration
March, 2013
Under the guidance of
DR. HAMENDRA KUMAR DANGI
Faculty of Management Studies
University of Delhi
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Faculty of Management Studies
University of Delhi
CERTIFICATE
This is to certify that this final year project titled:
Comparative study of consumer
buying behavior on hair care products of HUL and P&G
submitted in partial
fulfillment of the requirements for the Degree of Master of
Business Administration
by Ms. SOUKVINA PHILAVANH at Faculty of Management Studies,
University of
Delhi is a record of original research work carried out by her
under my guidance. Any
material borrowed or referred to is duly acknowledged.
DR. HAMENDRA KUMAR DANGI SOUKVINA PHILAVANH
Faculty of Management Studies MBA FT 2011-13
University of Delhi Faculty of Management Studies
University of Delhi
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ACKNOWLEDGEMENT
I express my sincere thanks to my project guide Dr. HAMENDRA
DANGI, for
providing me with an opportunity to work under this guidance and
providing tireless
support during the course of the project. His continued
cooperation, never ending
encouragement, meticulous guidance and uninhibited support at
various stages helped
me in preparation of this research study.
I would also like to thank the staff of the Faculty of
Management Studies, library and
administration section for their cooperation and support. And I
have learnt from
several articles, research studies and papers. I acknowledge the
value I have received
from these bodies of knowledge.
SOUKVINA PHILAVANH
Master of Business Administration (MBA)
Faculty of Management Studies
University of Delhi
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TABLE OF CONTENTS
Lists of figures and tables...6-7
Executive summary.....8-9
1. INTRODUCTION10
1.1. Introduction of FMCG
..............................................................................................
10
1.2. Company profile
........................................................................................................
11
1) Hindustan Unilever Limited (HUL) Brief history
........................................... 11
2) Proctor & Gamble Company (P & G) Brief history
........................................ 12
1.3. Indian hair care
market..............................................................................................
14
1.4. Objectives of the research
.........................................................................................
18
2. LITERATURE REVIEW
.................................................................................................
19
2.1 Research review
..........................................................................................................
19
2.2. Factors influencing consumer buying behavior decisions
.................................... 24
3. RESEARCH METHODOLOGY
....................................................................................
43
3.1. Survey Questionnaire design
....................................................................................
43
3.2. Sample selection and data collection
.....................................................................
43
4. DATA ANALYSIS AND DISCUSSIONS
...................................................................
48
4.1. Indian consumer buying behavior on hair care products of
HUL and P&G ...... 48
4.2 Ranking of the influencing factors of Indian consumer buying
behavior on hair
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care products of HUL and P&G Company
..................................................................
52
4.3. The marketing strategy on hair care products of HUL and
P&G ........................ 61
1) SWOT Analysis of Shampoo Market in
India...................................................... 61
2) Marketing strategy of HUL
.....................................................................................
63
3) Marketing strategy of P&G
....................................................................................
65
5. CONCLUSION AND RECOMMENDATION
........................................................... 68
5.1. Indian consumer buying behavior on hair care products
..................................... 68
5.2. Factors affecting consumer buying behavior on hair care
products.................... 69
6. BIBLIOGRAPHY
.............................................................................................................
72
Appendix..75
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LISTS OF FIGURES
Figure 1: Diversity in top consumer hair needs...15
Figure 2: Market Share of Shampoo Companies in India15
Figure 3: Per capita expenditure on hair care products16
Figure 4: Gender...48
Figure 5: Education..50
Figure 6: Income per month.51
Figure 7: The length of time of using hair care products.51
Figure 8: Willingness to spending for hair care
products....52
Figure 9: Hair care products recommended to be used
normally.52
Figure 10: Brands in which Indian consumers generally
use...53
Figure 11: Sources of Medias...54
Figure 12: Factors influencing Indian consumer buying
decisions..54
Figure 13: Sources of store locations...55
Figure 14: Reviews before buying decisions...56
Figure 15: BCG Matrix of Shampoo Brands in India..62
Figure 16: HUL strategy pyramid for Hair Care products...63
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LISTS OF TABLES
Table 1: Gender48
Table 2: Age.49
Table 3: Marital status..49
Table 4: Occupation.....49
Table 5: Education50
Table 6: Income per month..50
Table 7: Parameters influencing consumer buying
behavior...57
Table 8: T-Test Analysis..60
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EXECUTIVE SUMMARY
FMCG refers to Fast Moving Consumer Goods, requirement for daily
or frequent use.
Typically, a consumer buys these goods at least once a month.
The sector covers a
wide gamut of products such as detergents, toilet soaps,
toothpastes, shampoos,
creams, powders, food products, confectioneries, beverages,
cigarettes.
Hindustan Unilever Limited is India's largest Fast Moving
Consumer Goods (FMCG)
Company based in Mumbai, Maharashtra. It is owned by the
British-Dutch
company Unilever which controls 52% majority stake in HUL. Its
products include
foods, beverages, cleaning agents and personal care
products.
P&G is one of the largest and amongst the fastest growing
consumer goods
companies in India. Established in 1964, P&G India now
serves over 650 million
consumers across India. Its presence pans across the Beauty
& Grooming segment,
the Household Care segment as well as the Health & Well
Being segment, with
trusted brands that are household names across India. These
include Vicks, Ariel,
Tide, Whisper, Olay, Gillette, Ambipur, Pampers, Pantene,
Oral-B, Head &
Shoulders, Wella and Duracell.
According to Haircare industry in India reported from
Datamonitor, in 2009, India
witnessed over 200 new product launches, Most new product
launches occurred in
theshampoo category, which accounted for nearly 45% of all new
offerings, followed
by conditioners and styling agents which collectively accounted
for over 40% of
launches in 2009. Hair colorants accountedfor over 10% of new
launches and this
figure is expected to increase in the future, due to a
steadyincrease in Indias young
population. The least number of new product launches took place
in the permsand
relaxers segment, which made up just about 2% of all new
launches. This is primarily
because suchproducts target a very niche segment of the
population and are yet to find
favour with the masses.
Therefore, my study was focused on three objectives to compare
Indian consumer
buying behavior between HUL and P&G such as to study Indian
consumer buying
behavior on hair care products of HUL and P&G, to evaluate
the factors influencing
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hair care consumer buying behavior of HUL and P&G in Indian
market and to assess
the marketing strategy on hair care products of HUL and
P&G.
A sample size of 190 respondents was used for this study.
Primary data and secondary
data were used in this study, and data from the questionnaire
was analyzed by
software SPSS version 19 to describe the qualitative and
quantitative data.
From the data analysis of Indian consumer buying behavior on
hair care products of
HUL and P&G were generally females who used hair care
products of HUL and
P&G, and 72.1% of the respondents were in the age group of
20-25 years. Moreover,
there was a relationship between age, gender and income to
spending for hair care
products. On the other hand, the respondents behavior for using
was under 1 year
only for hair care products of HUL and P&G, therefore Indian
consumers did not
have product loyalty for both companies, and they might change
or swift to other
brands anytime due to many factors for example prices for hair
care products that they
were willing to spending was at Rs. 101-500. Hence, there was
price sensitivity, age-
related, gender-related and income related for Indian consumers
buying behavior for
hair care products of both companies. And there were many
factors affecting them to
buy hair care products of HUL and P&G, most of them normally
used only shampoo,
and some of them used shampoo with hair oil, so that both
companies should be
considered the ways to attract them to buy other hair care
products such as
conditioner, gel, spray, etc. however, according to HUL, there
was only sales
promotion like buy shampoo get one conditioner free, on the
other hand, Dove,
Sunsilk shampoo of HUL were very famous for Indian consumers and
most of them
were females. In contrary, Head and shoulder, Pantene shampoo
were famous for
both males and females. And those were the reasons why both
companies wanted to
produce brands for females and males. However, 62.26% of the
respondents said that
sources of Media factor in which Indian consumers preferred was
from television, and
this advertising campaign of both companies HUL and P&G was
successful on
broadcast Medias. Moreover, the other factors influenced Indian
consumers to buy
was from friends and family. And store location factor was
influenced Indian
consumers to buy hair care products especially from cosmetic
store and retail store
near home. And Indian consumers were sometimes reviewed the
information related
to hair care products before making decision to buy.
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1. INTRODUCTION
1.1. Introduction of FMCG
Fast Moving Consumer Goods (FMCG) or Consumer Packaged Goods
(CPG) is products that
are sold quickly and at relatively low cost. Examples include
non-durable goods such as soft
drinks, toiletries, and grocery items.Though the absolute profit
made on FMCG products is
relatively small, they generally sell in large quantities, so
the cumulative profit on such
products can be substantial. ITC Limited, Procter & Gamble
and Unilever are the three
biggest consumer goods company that operates across the
globe.
FMCGs refers to those retail goods that are generally replaced
or fully used up over a
short period of days, weeks, or months, and within one year.
This contrasts with
durable goods or major appliances such as kitchen appliances,
which 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.
FMCG refers to Fast Moving Consumer Goods, requirement for daily
or frequent use.
Typically, a consumer buys these goods at least once a month.
The sector covers a
wide gamut of products such as detergents, toilet soaps,
toothpastes, shampoos,
creams, powders, food products, confectioneries, beverages,
cigarettes. Typical
characteristics of FMCG products, individual items are of small
value but all FMCG
products put together account for a significant part of the
consumers budget. The
consumer keeps limited inventory of these products and prefers
to purchase them
frequently, as and when required. Many of these products are
perishable. The
consumer spends little time on the purchase decision. Rarely
does he/she look for
technical specification (in contrast to industrial goods). Brand
loyalties or
recommendations of reliable retailer/dealer drive purchase
decision. Trail of a new
product i.e. brand switching is often induced by heavy
advertisement,
recommendation of the retailer or neighbors/ friends. These
products cater to
necessities, comforts as well as luxuries. They meet the demands
of the entire cross
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section of population. Price and income elasticity of demand
varies across products
and consumers.
1.2. Company profile
1) Hindustan Unilever Limited (HUL) Brief history
Hindustan Unilever Limited is India's largest Fast Moving
Consumer Goods (FMCG)
Company based in Mumbai, Maharashtra. It is owned by the
British-Dutch
company Unilever which controls 52% majority stake in HUL. Its
products include
foods, beverages, cleaning agents and personal care
products.
HUL was formed in 1933 as Lever Brothers India Limited and came
into being in
1956 as Hindustan Lever Limited through a merger of Lever
Brothers, Hindustan
Vanaspati Mfg. Co. Ltd. and United Traders Ltd. It is
headquartered
in Mumbai, India and has employee strength of over 16,500
employees and
contributes to indirect employment of over 65,000 people. The
company was renamed
in June 2007 as Hindustan Unilever Limited.
Lever Brothers started its actual operations in India in the
summer of 1888, when
crates full of Sunlight soap bars, embossed with the words "Made
in England by
Lever Brothers" were shipped to the Kolkata harbor and it began
an era of marketing
branded Fast Moving Consumer Goods (FMCG).
Hindustan Unilever's distribution covers over 2 million retail
outlets across India
directly and its products are available in over 6.4 million
outlets in the country. As per
Nielsen market research data, two out of three Indians use HUL
products.
HUL works to create a better future every day and helps people
feel good, look good
and get more out of life with brands and services that are good
for them and good for
others.
With over 35 brands spanning 20 distinct categories such as
soaps, detergents,
shampoos, skin care, toothpastes, deodorants, cosmetics, tea,
coffee, packaged foods,
ice cream, and water purifiers, the Company is a part of the
everyday life of millions
of consumers across India. Its portfolio includes leading
household brands such as
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Lux, Lifebuoy, Surf Excel, Rin, Wheel, Fair & Lovely, Ponds,
Vaseline, Lakm,
Dove, Clinic Plus, Clear, TRESemm, Sunsilk, Pepsodent, Closeup,
Axe, Brooke
Bond, Bru, Knorr, Kissan, Kwality Walls and Pureit.
2) Proctor & Gamble Company (P & G) Brief history
P&G is one of the largest and amongst the fastest growing
consumer goods
companies in India. Established in 1964, P&G India now
serves over 650 million
consumers across India. Its presence pans across the Beauty
& Grooming segment,
the Household Care segment as well as the Health & Well
Being segment, with
trusted brands that are household names across India. These
include Vicks, Ariel,
Tide, Whisper, Olay, Gillette, Ambipur, Pampers, Pantene,
Oral-B, Head &
Shoulders, Wella and Duracell. Superior product propositions and
technological
innovations have enabled P&G to achieve market leadership in
a majority of
categories it is present in. P&G India is committed to
sustainable growth in India, and
is currently invested in the country via its five plants and
over nine contract
manufacturing sites, as well as through the 26,000 jobs it
creates directly and
indirectly. Our sustainability efforts focus on Environmental
Protection as well as
Social Responsibility to help develop the communities we operate
in.
P&G operates under three entities in India - two listed
entities Procter & Gamble
Hygiene and Health Care Limited and Gillette India Limited, as
well as one 100%
subsidiary of the parent company in the U.S. called Procter
& Gamble Home
Products.
In 1964, a public limited company, Richardson Hindustan Limited
(RHL) is formed,
which obtains an industrial license to undertake manufacturing
of Menthol and Vicks
range of products such as Vicks VapoRub, Vicks Cough Drop and
Vicks Inhaler.
In 1991, P&G liberalized the Indian house wife through the
introduction of Ariel
Micro System. The years before Ariel, washing had been a long
arduous process for
housewives, involving back breaking labor.
In 1993, P&G USA enters into a Joint Venture with Godrej
Soaps in India & was
named Procter & Gamble Godrej (PGG) to leverage Godrejs
scale & distribution in
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the Soaps category in India; however the JV for strategic
business reason was
dissolved in 1996.
In 1995, Procter & Gamble Home Products enters the Hair care
Category with the
launch of Pantene Pro-V.The New Pantene Amino Pro-V Complex
range of shampoo
& conditioner comes in three variants suited for individual
needs - Pantene Nourished
Shine, Pantene Hair Fall Control & Pantene Smooth &
Silky. Enriched with the
goodness of pro-vitamins and three essential aminos, Pantene
restores your hair with
its lost beauty while making your hair ten times stronger.
In 1995, P&G initiated the Point Of Market Entry program.
The Direct to Consumer
(DTC) or Direct Marketing (DM) program followed with the launch
of Ariel in India,
brought P&G brands closer to its consumers
In 1997, Procter & Gamble Home Products launches Head &
Shoulders shampoo.
Since 1950, Head & Shoulders has been at the forefront of
scalp and hair science,
significantly advancing the treatment of dandruff and scalp
problems. Along with
professional advice and expert insight we have a wide range of
products to care for
your scalp and nurture your hair. Head & Shoulders is
available in 8 variants in India
including Men Hair Retain, Complete Care for Dry Scalp, Anti
Hair fall, Smooth &
Silky, Cool Menthol, Clean & Balanced, Thick & Long
& Silky Black.
P&G India moves from Tiecicion House, to its new
headquarters at Chakala,
Mumbai. The building became functional in record breaking
construction time Just
27months!
In 2003, P&G India gets Best Employer Award.Standing by the
companys credo of
Touching Lives and Improving Lives, P&G launches Shiksha in
2004 in
association with CRY. The objective of the program is to educate
underprivileged
children.
In 2009, P&G integrated Wella, Integration of business
organization & Structure,
Employee harmonization in to P&G systems, benefits &
policies etc. & laying the
foundation of business systems & processes like Order,
Shipping, Billing systems,
Purchasing, financial data mgt & reporting.
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1.3. Indian hair care market
Hair care in India industry profile provides top-line
qualitative and quantitative
summary information including: market share, market size (value
and volume 2006-
10, and forecast to 2015). The profile also contains
descriptions of the leading players
including key financial metrics and analysis of competitive
pressures within the
market. Essential resource for top-line data and analysis
covering the India hair care
market includes market size and segmentation data, textual and
graphical analysis of
market growth trends, leading companies and macroeconomic
information.
The hair care market consists of the retail sale of conditioner,
hair colorants, salon
products, shampoo and styling agents. The market is valued
according to retail selling
price (RSP) and includes any applicable taxes. Any currency
conversions used in the
compilation of this report have been calculated using 2010
annual average exchange
rates.
The Indian haircare market generated total revenues of $2.2
billion in 2010,
representing a compound annual growth rate (CAGR) of 15.4% for
the period
spanning 2006-2010.
Conditioner sales proved the most lucrative for the Indian hair
care market in 2010,
generating total revenues of $1.2 billion, equivalent to 57.8%
of the market's overall
value.
The performance of the market is forecast to decelerate, with an
anticipated CAGR of
10.2% for the five-year period 2010-2015, which is expected to
lead the market to a
value of $3.5 billion by the end of 2015.
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Figure 1: Diversity in top consumer hair needs
Figure 2: Market Share of Shampoo Companies in India
The top three companies in shampoo market are Hindustan Unilever
Ltd., Procter and
Gamble and Dabur. From the pie chart, it is seen that Hindustan
Unilever Ltd. is
dominatingthe market with 46% of market share followed by
Procter and Gamble and
Dabur with 24%and 11% of market share. The other major players
in the market are
Indian tobacco Company, Loreal and CavinKare with 6%, 3% and 2%
of market
share.
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Figure 3: Per capita expenditure on hair care products
Changing consumer aspirations: Hair care, once an occasion based
activity, has now
become anintegral part of Indian consumers daily beauty regime.
With growing
disposable incomes andincreasing western influence, Indian
consumers are not shying
away from experimenting withnewer or pricier products. This has
created new
opportunities for the companies in this sector. Asa result,
products such as hair styling
creams & gels, post wash serums etc. which once were
nonexistent in the Indian
market are increasingly finding a place in the Indian consumers
shopping basket.
A shift towards natural/organic products: According to the new
product insight report
Haircare inIndia from Datamonitor, there is a growing preference
towards product
made fromnatural/organic ingredients amongst Indian consumers.
Owing to such a
strong demand, numerous personal care companies in India are
introducing products
that appeal to consumerswho are keen to move away from
conventional haircare
products made from harmful chemicals.
Increasing segmentation in haircare products: According to the
latest report Haircare
in India, due to increasing competition, manufacturers of
haircare products in India
have realized thepressing need to differentiate their offerings
from other competing
brands. This has resulted ingreater segmentation in the haircare
market. Increasing
awareness among consumers has mademanufacturers realize that a
'one size fits all'
approach is no longer enough to attract customers.The demand for
customized
offerings has resulted in the emergence of niche segments in
theIndian haircare
market, such as products which control dandruff, hair loss and
thinning,
productswhich offer protein enrichment or hair softening
properties.
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According to Product Insights: Haircare in India report from
Datamonitor, in 2009,
India witnessed over 200 new product launches, Most new product
launches occurred
in theshampoo category, which accounted for nearly 45% of all
new offerings,
followed by conditioners and styling agents which collectively
accounted for over
40% of launches in 2009. Hair colorants accountedfor over 10% of
new launches and
this figure is expected to increase in the future, due to a
steadyincrease in Indias
young population. The least number of new product launches took
place in the
permsand relaxers segment, which made up just about 2% of all
new launches. This is
primarily because suchproducts target a very niche segment of
the population and are
yet to find favor with the masses.
When compared globally, India, with a share of 3.0%, ranked
eighth in terms of new
product launches inthe haircare market. This relatively low rank
belies the potential
that India holds for haircare products.However, as disposable
income continues to rise
and beauty consciousness continues to grow amongmen and women of
all age groups,
an influx of new products is expected in the future. While
thepenetration of
specialized haircare offerings is still low in India, as product
awareness and
industrydevelopment improve, consumer interest, particularly in
rural India, is bound
to increase significantly.
Apart from traditional hair oil products, Indian hair care
market remains largely
under-penetrated withlarge part of consumption still driven by
urban consumers.
However, manufacturers are increasinglyfocusing on driving their
sales from rural
and semi-urban areas by using sachet strategy and
inducingconsumers to experiment
with new products.
Hair colorant market is one developing area which is showcasing
enormous potential
for themanufacturers. There is a huge demand for hair colorant
products from
consumers through bothprofessional salons as well as retail
channels. Currently, local
players Godrej Industries control majorityof the Indian hair
colorant market while
companies such as Loreal and P&G are launching their
globalproduct portfolio into
the Indian market.
Increasingly Indian consumers specifically women are becoming
more aware about
the global trends andare more willing to spend on their hair
grooming. Today, women
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consumers do not mind shelling out extramoney to buy
international brands which
give their hair that value-add treatment. However, even
maleconsumers are becoming
as self-conscious as their female counterparts and are
increasingly indulging inhair
styling. Hair creams & gels have become a phenomenon amongst
the Indian males
who wish to wear a new hair looks every day. Here again, local
player Godrej with its
Brylcreem dominate the hairstyling market. However, increasingly
companies such as
Unilever, ParasPharma and Marico arelaunching their products to
tap this nascent but
fast growing hair styling segment.With growing awareness and
rising income, Indian
consumers are moving up the value chain in the haircare segment.
Indian hair care
market would continue to see upward growth trajectory driven by
strongdemand from
aspiring consumers. Companies in this industry need to
increasingly focus to meet
demandfrom the evolving consumers who are now looking for more
specialist
products to meet their specific needs.
1.4. Objectives of the research
1) To study Indian consumer buying behavior on hair care
products of HUL and
P&G
2) To evaluate the factors influencing hair care consumer buying
behavior of
HUL and P&G in Indian market
3) To assess the marketing strategy on hair care products of HUL
and P&G
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2. LITERATURE REVIEW
2.1 Research review
RuchitaSaxena (2008) has explored the facts that Hindustan
Unilever (HUL) has
increased its share in the shampoo market even as rivals Procter
& Gamble (P&G)
and CavinKare have suffered erosion. She also mentioned that
according to retail
measurement figures released by AC Nielsen, market leader HULs
share grew from
46.9% in January to March (2007) to 47.8% in the October to
December (2006)
quarter and in the same period, P&Gs market share fell from
25% to 23.7% and third
placed CavinKares from 12.6% to 12%.
P. Guru Ragavendran et al (2009) emphasized in their research
that the survey helped
them in understanding the consumer perception on brand awareness
and position of
product in the market. It was observed that consumers
expectations were Quality,
benefits offered and packaging of shampoos. Based on the results
obtained, integrated
marketing communication was suggested; as a result an
improvement of 8% to 12.6%
was observed in target population.
Albert Ferror et al (2012) concluded in their study that the
European market of
perfumery and cosmetics is the largest in the world. Germany has
the largest market
in the Europe, followed by France, UK, Italy and Spain. These
countries are the big
5 of the sector, and they are leaders in number of new product
launches and in
volume of production, exports and imports.
Dr. Himani Sharma and Shallu Mehta (2012) said that Males
frequency of using the
shampoo is very less as compared to females and the consumers do
not concentrate on
the natural shampoos, they use it only for the purpose of
cleaning, not for to make
their hair healthier and stronger. The frequency of shampoo
usage in males is very
low. They use shampoo on special occasions such as weddings,
parties etc. The
maximum respondents as 51.39% prefer the TV for the
advertisement and the
consumers are not satisfied from the quality of the shampoo and
also the free gifts
distributed with them. Sachet is more preferred as compared to
bottles for the purpose
of packaging of shampoo.
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D. MuthamizhVendanMurugavel, (2010) PG & Research Department
of Commerce,
Gobi Arts & Science College, Gobi, Tamil Nadu, India, A
study on Consumers
Attitude towards Malted Food products with reference to
Gobichettipalayam Town,
COLLEGE SADHANA, Journal for Bloomers of Research. This paper
evaluated the
importance of health in the lives of human beings and the role
of malted food drinks
in ensuring a healthy diet. The author says that malted food
product gives energy
which is very helpful for good health. Malted food products can
be grouped into two
categories: first category is for children such as Junior
Horlicks, Cerelac, Amul,
Farex, Lactodexetc, second category is for malted food products
such as Horlicks,
Boost, Bournvita, Complan, Viva, Maltova, etc, are common for
all people.
The relevance of understanding consumer behavior is rooted in
the modern marketing
concept. It manufacturers attention has switched over from the
products to the
consumers. The marketing strategies and policies depend upon
consumer behaviors. A
careful study of consumer behavior will facilitate marketers in
determining the size,
form, style, color, package, brand etc. thus, with respect to
the malted food drinks
market, it is very essential to understand the nuances of
consumer behavior and the
responses of consumers to the marketplace due to attributes like
form, color,
packaging, benefits etc in order to have a clear understanding
of the market. The
specific objectives of the study undertaken are as follows: To
analyze the brand
preference of consumers towards malted food products, to study
the consumers
satisfaction towards malted food products, to analyze the
problems faced by the
malted food product consumers
As such, the hypotheses for the study are as follows: Hypothesis
1:Ho- there is no
significant relationship between the age and brand preference of
malted food product
consumers. Hypothesis 2: Ho- there is no significant
relationship between the gender
and brand preference of malted food product consumers.
Hypothesis 3: Ho- there is
no significant relationship between the education and brand
preference of malted food
product consumers. Hypothesis 4: Ho- there is no significant
relationship between the
annual family income and brand preference of malted food product
consumers.
Hypothesis 5: Ho- there is no significant relationship between
the age of the
respondents and their significant level. Hypothesis 6: Ho- there
is no significant
relationship between the gender of the respondents and their
significant level.
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Hypothesis 7: Ho- there is no significant relationship between
the education
qualification of the respondents and their significant level of
the malted food product
consumers. Hypothesis 8: Ho- there is no significant
relationship between the annual
family income of the respondents and their significant
level.
In order to constitute a sample size of 150 respondents, 30
business people, 30
agriculturists, 30 employed people (both private and
government), 30 housewives and
30 students were purposely selected. Convenience sampling
technique was employed
to collect required information from the respondents. On the
basis of the responses,
and tests such as Chi square, it was concluded that the null
hypothesis in all the
hypotheses except the 5th
hypothesis were accepted. Thus, there is a significant
relationship between age of the respondents and the level of
satisfaction of the malted
food products consumers, according to the research.
P.H.K. Prathiraja and A.Ariyawardana, (2003), Impact of
Nutritional Labeling on
Consumer Buying Behavior, Sri Lankan Journal of Agricultural
Economics. The
paper evaluated the important role nutritional labeling plays in
providing relevant
nutrition information of food products to consumers. Inclusion
of a nutritional label
on food items may be an important packaging decision for food
processors. Hence, a
study was conducted in Sri Lanka with a view of identifying the
market for nutritional
labeling and the factors that influence the consumer willingness
to pay for nutritional
labeling.
According to food and drug administration (FDA) in the USA, a
label is the primary
point of the contact between the producer and the purchaser and
should be thought of
as an integral part of the producers marketing plan. It is not
just a piece of paper
stuck onto the container but should be an expression of a number
of important
decisions that have been made about marketing.
According to the FDA, a label should clearly and minimally state
the name of the
product, the net weight, the nutrition facts panel (nutritional
label), the name and
address of the manufacturer, and the brand name. These food
labels have become
increasingly complex, particularly as products move from the
status of basic
commodities to highly processed, value-added products.
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Nutrition labels can simplify the whole concept of healthy
eating for consumers. They
help to keep track of the amount of fat and sugar, sodium and
fiber, protein and
carbohydrates etc being consumed by means of intake of the
package food product. It
also allows consumers to make an informed judgment of a products
overall value.
In order to fuel the analysis, data was collected from a random
sample of 90
consumers selected from three supermarkets located in Kandy, Sri
Lanka. The market
for nutritional labeling was identified by exploring data and a
legit method of analysis
was performed to identify the factors that influence the
willingness to pay for
nutritional information on food items. A significantly greater
proportion of individual
in the age category 36 to 50 years, individuals with tertiary
education, individuals
with special dietary status and households with less than 4
members were willing to
pay more for the nutritional labels. Legit analysis showed that
level of education and
special dietary status has a significant positive effect and the
household size has a
significant negative effect on the willingness to pay for
nutrition information.
Accordingly, it could be stated that incorporation of a
nutritional panel in the package
would enhance the demand for food products and it would be an
appropriate strategic
task for the local food processors.
The results of the study were as follows among the respondents,
86% had awareness
about the nutritional labels on food products, while 14% did not
have awareness about
nutrition labels. This particular finding suggests that there is
a consumer propensity to
read nutrition labels and it could change their purchasing
behavior, which ultimately
reflects their relative valuation of taste versus health. Out of
the 90 respondents,
77.8% considered that nutritional information on food items are
vital for their
purchasing decisions. Among the other factors considered during
food shopping such
as price, quality, packaging, label and brand, the highest level
of importance was
attached to nutritional labeling on food products. 25% of the
respondents stated that
they always read the nutrition labels when purchasing a food
item and 62% said they
sometimes read it. Only 2% said that they never look at the
label. This particular
finding suggests that printed nutrition information is an
important sources of
information that consumer use in purchasing. Out of the total
number of 90
respondents, 52.2% were willing to pay something additional for
products with
nutrition information and 47.8% were not willing to pay anything
additional. Of the
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90 respondents, 35 were in the 36-50 year age group and of those
74.3% indicated
that they are willing to pay for nutritional information on food
items. Only 5
respondents were in the over 65 year age group, and of those 20
% revealed that they
are willing to pay for nutritional information. Chi square test
results revealed that the
relationship between age and the willingness to pay is
statistically significant at a
probability level of 0.05. Of the total number of respondents,
43 were males and 47
were females. Of the females, 20 were willing to pay for
nutrition information, which
accounts for 57.4%. Males were less likely to pay for nutrition
information. Chi
square test result revealed that the relationship between gender
and the willingness to
pay is statistically significant at a probability level of 0.05.
this result suggests that
females, their families food gatekeepers, have a large share of
the responsibility for
their families health and are willing to pay more for nutrition
information.
Out of the total 90 respondents 49 were in the income category
Rs. 10,000 to Rs.
20,000 and of those 55.1% were willing to pay for nutritional
information on food
items. 17 individuals were in the income category above Rs.
20,000 and of those
37.5% were willing to pay for nutritional labeling. However,
there was no statistical
significance between income and the willingness to pay for
nutrition information on
food items.
Of the total number of respondents, 38 households had less than
4 members and of
those 73.7% were willing to pay for nutrition information.
However, only 19% of the
households with more than 4 members revealed that they are
willing to pay for
nutrition information. Chi square test results revealed that
there is a significant
relationship between household size and the willingness to pay.
Of the total, 52
respondents had a university degree and of those 62% indicated
that they are willing
to pay for nutritional labeling. 32 have had secondary education
and of those 37.5%
were willing to pay for nutrition information provided on the
food items.
To conclude, this study showed that consumers used nutritional
labeling when making
a purchasing decision and that it is especially because of
health consciousness. A
majority of the respondents revealed that they were willing to
pay something
additional for the nutritional information provided on food
items. Of those who were
willing to pay something additional, a greater proportion was in
the age category 36-
50 years, had tertiary education and the households had less
than 4 members.
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Page | 24
Further, logic analysis showed that gender, level of education
and special dietary
status had a significant positive effect and the household size
had a significant
negative effect on the willingness to pay for nutritional
information. Accordingly, it
could be stated that incorporation of a nutritional panel on the
package would enhance
the demand for the local food products and it would be an
appropriate strategic task
for the local food processors. Thereby, these local producers
could compete with the
other products with nutritional labels and also it would be an
ideal strategy in
penetrating export markets where the nutritional panel is a
legal requirement.
2.2. Factors influencing consumer buying behavior decisions
According to Kotler and Keller (2009), a consumers behavior is
affected by 3
different factors: cultural, social and personal factors. There
are many different kinds
of factors under each of these 3 categories.
Culture is one of the most major influences in consumer
behavior. Consumption
choices cannot be understood without taking into consideration
the culture in which
they are made. According to Solomon, Bamossy, Askegaad and Hogg
(2006), culture
is a kind of like the share memory of a society. It is a mixture
of meanings, rituals,
norms and traditions shared by a society or an organization.
Another definition of
culture as given by Evans, Jamal and Foxall (2006), is to see it
as a meaning system
that a member of a certain group uses to guide his or her life.
The meaning system
gives people a sense of identity and rationale for their actions
(how people should
behave in different context). Consumer products and services are
the part of the
system of meaning. The system is often culturally shared and
culture specific and it is
passed on from one generation to another.
Evans et al. (2006) define culture as consisting of 3 elements:
1. Cognitive elements
and beliefs, 2. Values and norms and 3. Signs, signals and
symbols; Cognitive
elements and beliefs are the things that societies know about
the physical and social
worlds. Cognitive elements and beliefs also encompass societys
religious beliefs and
the ways in which the society works.
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Values and norms on the other hand refer to the way in which the
majority of people
in the society are expected to behave. Signs, signals and
symbols include language
and methods of conveying meaning.
However, the Indian culture is part so called collectivist
cultures, in which according
to Solomon et al. (2006) cultures where more important is placed
on achieving the
goals of a stable in group in contrast to individualistic
culture where the emphasis is
on attaining personal goals. This has been taken into account in
the study as well.
Family, social roles and statuses as well as different reference
groups are some of the
social factors that, in addition to culture, affect consumer
behavior. According to
Kotler and Keller (2009) a reference group is a group that has a
direct or indirect
influence on a persons attitudes or behavior whereas according
to Noel (2009),
reference groups serve as a way of comparing oneself to others.
Family is one of the
most important reference groups and thus a major influence in
consumer behavior.
Social roles and statuses also affect the way people choose to
buy or not to buy a
certain product or a service. A social role is comprised of the
activities a person is
expected to perform inside a certain group such as family or an
organization. Status,
on the other hand, is something that each role carries with it;
a senior manager has
more status than a junior manager. People often choose products
and services that
reflect the roles they have and their actual or desired status
in a society Kotler and
Keller (2009).
According to Kotler and Keller (2009, p. 194), those reference
groups that have a
direct influence on a person are called membership groups.
Membership groups can
be further categorized into primary groups and secondary groups.
Primary groups are
those groups a person communicates with quite regularly and
informally. In addition
to the most important reference group, family, primary groups
include for example
religious and professional groups. Secondary groups require less
regular interaction
and they are often more formal in nature compared to primary
groups.
In addition to the reference groups people are part of, groups
in which they dont
particular also influence consumers. These include inspirational
groups, groups an
individual admires and hopes to join, and dissociative groups,
groups whose values or
behavior a person resents and rejects. Kotler and Keller (2009)
say that reference
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groups influence consumer behavior in 3 ways: they present and
disclose new
behaviors and lifestyles, they influence attitudes and
self-concept and they create
pressures for conformity that can have an effect on buying
behavior.
Personal characteristics also influence a consumers behavior.
Examples of personal
characteristics include the consumers age and stage in the life
cycle, occupation,
economic circumstances, personality, self-concept, lifestyle and
values. Kotler and
Keller (2009) values have such a huge impact on consumer
behavior and are
important in terms of this study because of the ethical aspect
of buying behavior.
Informational influence that someone provides to a consumer is
often based on
personal experience; friends or acquaintances recommend products
or services that
they have tested and have positive experience of. Turning to a
friend for advice on
purchasing decisions saves the consumer time and energy; it
decreases time required
to search for information and lessens the risk of
dissatisfaction in terms of quality and
endurance of the product. Informational influence has great
impact on consumer
behavior because people usually place high value on word of
mouth communication,
especially in those cases where the information comes from a
trusted source such as
friends or relatives that the consumer knows personally. (Noel
2009) Asch and Wolfe
(2001), tantamount to Noel (2009), also note that
recommendations for products and
services made by friends or relatives have a higher value to a
consumer than
recommendations made by sales staff for example. The impact and
influence of word
of mouth communication will be covering marketing
communications.
According to Kasser and Kanner (2004), consumers environmentally
conscious
behavior is often socially influenced. They state that the best
prediction of a consumer
making an environmentally friendly purchase is the people they
know who have made
a similar type of purchase.
Asch and Wolfe (2001) as well as Kotler and Keller (2009) and
Noel (2009) discuss
that social class is also a great influence of consumer
behavior, although Kotler and
Keller (2009) define social class as being part of the cultural
factors affecting
consumer behavior rather than personal factor. Social classes
are hierarchically
ordered divisions of society whose members share similar values,
interest and
behavior Kotler and Keller (2009). Social classes are usually
quite homogenous
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according to Asch and Wolfe (2001) and Kotler and Keller (2009)
social classes show
4 different kinds of characteristics.
Kotler and Keller (2009) and Asch and Wolfe (2001) note that in
addition to age,
consumption is shaped by family life cycle. Family life cycle
refers to the number,
age and gender of people in the household at any point in time.
Moreover,
psychological life cycle stages, the certain passages and
transformations people go
through in life, also affect consumer behavior. One of the
phases in psychological life
cycle is becoming a parent, which may change an individuals
consumption habits
radically.
Thus, different kinds of critical life events such as marriage,
childbirth, illness,
divorce, carreer change, and widowhood may affect consumer
buying behavior.
Kotler and Keller (2009)
The first characteristic is that people within a certain class
tend to be more alike in the
way they dress, speak and use their free time than people in
another social class.
Second, people are often perceived to have certain superior or
inferior positions
according to their social class. The third characteristic linked
to social classes is that
usually a cluster of variables indicates social class better
than any single variable.
These variables include for example occupation, income, wealth,
education, and value
orientation. The fourth thing that characterizes social classes
is that people can move
from one social class to another during their life.
Noel (2009) states that an individuals social class can be
determined based on several
factors of which occupation, education and income are the 3
biggest and most
important. Occupation and economic circumstances were also
mentioned by Kotler
and Keller (2009) as some of the personal factors affecting
consumer behavior.
Asch and Wolfe (2001) agree with Kotler and Keller (2009) in
that social classes
show distinct preferences in terms of brands and products in for
example clothing,
recreational activities and automobiles and thus affect the way
people behave in
decision making situations. Noel (2009) discusses that social
class is a good predictor
of purchasing behavior related low to moderately priced goods
that have some sort of
symbolic value. These include for example cosmetics
products.
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Page | 28
Kotler and Keller (2009) agree that occupation and the economic
circumstances that
come with it are great influences in consumer behavior. The type
of products and
services people choose to buy is greatly affected by their
economic situation such as
spendable income, saving and assets, debts, borrowing power and
attitudes toward
spending and saving. Luxury goods may be the desire of many but
only few can
afford them. Although this is also a question of what kind of
things different people
are willing to splurge on.
Personality and lifestyle are also factors that influence
consumer behavior. Kotler and
Keller (2009) define personality as a set of differentiating
psychological
characteristics that lead to relatively consistent and
long-lasting responses to
environmental stimuli. Solomon (2007) shares this view by
stating that personality
concerns the unique psychological features of a person and
effects the way people
respond to their environment. According to Kotler and Keller
(2009) as well as Asch
and Wolfe (2001), lifestyle on the other hand refers to the
persons way of living as
expressed in activities, interests and opinions whereas
according to Solomon (2007),
lifestyle is more related to buying behavior referring to the
pattern of consumption
habits that reflects how a person allocates his or her time and
money.
According to Solomon (2007), consumers personalities are
important in terms of
buying behavior in the sense that they often reflect unconscious
motives underlying
purchasing decisions. People cannot necessarily automatically
recognize the real
motive or reason for buying a certain product or brand. This
assumption has been
derived from Freuds theory of personality where the human mind
consists of the id
(directs a person towards immediate satisfaction without
thinking about the
consequences), the superego (the counterweight to the id) and
the ego (the referee
between the id and the superego that tries to mediate between
temptation and virtue).
Self-image and normative influences are likely to demonstrate a
linkage. Self-image
refers to the perceptions individuals have of what they are like
(Goldsmith, Moore
&Beaudoin 1999), whereas normative influence is defined as
the other people or
groups who would approve or disapprove of the respondents
performing behavior
(Ajzen&Fishbein 1980), Hu and Jasper (2006) revealed that an
individual adopts a
behavior, which complies with others (normative influences),
resulting from the belief
that adoption will enhance the individuals self-concept or
self-image.
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The study of Siu and Wong (2002) investigated price, packaging,
promotion,
salesperson, and store distribution for cosmetic product
attributes in Hongkong.
Anderson and He (1998) found quality, price, brand, packaging,
advertising, and
salesperson as influential attributes when Chinese consumers
considered using
cosmetics in China. Additionally, Johri and Sahasakmontri (1998)
revealed that
consumers attitudes toward grenn (environmentally-friendly)
cosmetic products
evaluate a product based on its fragrance, color, performance,
brand name, price,
whether it is safe for skin, opportunity to pre-test, outlet
atmosphere, packaging,
ingredients, and whether it was tested on animals. Therefore,
attributes affecting
buying skin care products are expected to include price,
quality, packaging,
promotion, salesperson, advertising, brand and type of
distribution. Consequently,
there is need to investigate how those attributes influence the
attitudes of Indian
consumers towards buying hair care products.
Beaudoin and Goldsmith (1998) implied that attitudes towards
buying apparel were
associated with self-image because purchasing apparel satisfies
various needs, such as
self-image and self-identity. Like apparel, skin care cosmetics
have symbolic and
communicative value. Cosmetics have found to influence person
perception since
these products effect personal appearance. Accordingly, Coulter,
Feick, and price
found that self-image had an influence towards applying and
buying cosmetic
products for women in Hungary. This study proposes to examine
self-image in a
different gender and therefore it expected that self-image in a
different gender and
therefore it is expected that self-image influences the
attitudes of consumers in the
purchase of hair care products in this study.
Shih and Fang (2004) found that normative influences such as
friends, colleagues, and
family. So that, attitudes had influenced on behavioral
intention in adopting internet
banking for customers in Taiwan; Buttle and Bok (1996) also
found 2 predictor
constructs, which were attitudes and normative factors,
affecting business travelers
intention toward staying in the hotel on the next business trip
in Seoul, South Korea.
There is a need to examine the influence of attitudes toward
using skin care products
and normative influences upon the intention to buy hair care
products.
The major benefit of the reasoned action model is that it
explains and predicts
purchasing behavior utilizing purchase intentions as mediator.
On the other hand,
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Albrecht and Carpenter (Choo, Chung &Pysrachik 2004) have
questioned the
mediating role of behavioral intention in purchase behavior and
have argued that there
is a direct casual relationship between attitudes and behavior.
However, most
researchers have demonstrated the validity of behavioral
intention as a moderating
variable of behavior in various research settings.
There are mainly 3 focuses within the previous analysis that
investigated that the
factors influencing whole switching, specifically the context,
marketing mix factors
and client characteristics. The results of marketing mix factors
are one in every of the
foremost interested areas and been frequently studied, and huge
numbers of studies
centered on the influences of advertising and promotion on brand
switching behavior.
Some analysis focused on the changes of consumers attitudes
towards totally
different brands in numerous things, and the way situational
context interact with
selling actions. Different analysis studied on how demographic
variables influence
advertising/promotion responsiveness, the hierarchy of
advertising/promotion
influence, and comparison of various products classes.
The relationship between product, price, promotion, advertising
and whole switching
are examined in numerous product markets, as well as service and
merchandise
sectors, and in numerous geographic markets.
Morgan and Dev (1994) examined 3 varieties of variables that
influence brand
switching behavior, particularly changes in usage context or
situation, marketing mix
variables which are directly controllable by the firm, and
consumer background
variables. The analysis has been conducted inside service
business attributable to the
upper importance of maintaining existing consumers for service
retailing. The
advantage of this analysis is that the thought of each
controllable and uncontrolled
factors influencing brand switching. The influence of
controllable variables marketing
mix variables has been examined below a range of contexts, and
varied from totally
team of consumers who have different characteristics. Moreover,
the researchers
believed that context, control, and consumers variables could
influence the level of
involvement, variety seeking, and cognitive processing. (Morgan
and Dev, 1994),
and its meaningful and necessary to check the connection between
client
involvement and brand selection behavior. The result showed the
sturdy impact of the
special deal supply on brand switching, and therefore the
necessary impact of usage
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context. The explanation of the importance of context, in
keeping with Morgan and
Dev (1994), would be the result of consumers could not evaluate
their purchase while
not considering the merchandise expertise context. Therefore,
Morgan and Dev
believe that contextual analysis is crucial for investigating
brand selection behavior in
service retail trade.
Another analysis conducted by Miller and Ginter (1979) tested
the importance of state
of affairsal variables and studied if consumers attitudes can
vary during a totally
different situation. Miller and Ginter (1979) believed that its
meaningful to check the
variations of attitudes towards totally different brands during
a specific state of affair.
Moreover, Miller and Ginter (1979) assumed that consumers brand
selection
behavior could also be varied in numerous things. During the
analysis, mainly 3
assumptions are made purchase levels of specific brands,
attribute importance, and
perceptions of specific brands will vary differently across
situations (Miller and
Ginter, 1979). The result showed that there is a modification in
brand selection across
4 eating things, and sales volume of various brands additionally
varied across 4
occasions.
The importance of analysis on alternative fast moving consumer
goods in terms of
situational influence on brand switching could also be seen from
the on top of
empirical analysis presented. In Chinese market, the
dramatically increase in sales
throughout holidays, like spring festival and national day,
worries by marketers and is
interest to several researchers. Each marketers and researchers
have an interest within
the special consumer behavior throughout holidays that are
thought of because the
golden amount of selling. Therefore, the analysis on the
influence of scenario on
brand alternative behavior might be useful for corporations to
create marketing
program based mostly on the importance of brand name attributes
for special
vacation, and to create certain those vital brand attributes
throughout a special amount
of your time is centered and promoted.
Marketing tools have been studied by many researchers in terms
of their influence on
brand selecting behavior, and some models have been developed.
McAlister (1982)
mentioned the factors influencing brand switching marketing
variables, such as
price, product design, promotion and distribution and
situational variables.
Carpenter and Lehmann (1985) created a model to analyze the
relationship among
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Page | 32
marketing mix, brand switching, and competition. During this
model, marketing mix
elements, particularly worth and advertising, have been
investigated, further as how
these marketing mix elements influence complete switching and
competition after
they works along with alternative factors such as brand name and
merchandise
feature. The analysis found that price, promotion and
advertising have both negative
and positive impacts on brand switching; particularly
advertising, it will stimulate
customers to shop for more products, but at a similar time it is
passing the data of
worth consciousness which may increase brand switching.
Moreover, the analysis
prompts that corporations might reduce the intension of
competition through its name
and multiple entries in the product line under the same brand
name (Carpenter and
Lehmann, 1985). Researchers (Carpenter and Lehmann, 1985) prompt
that by using
brand name to distinguish their own brands from others and by
launching more
products under a similar brand, corporations will increase their
complete awareness
and their competitiveness. In addition, (Carpenter and Lehmann,
1985) argued that it
is not sensible to adopt a single marketing strategy for all the
products under a similar
brand and therefore the strategy for various levels of brands
ought to diverge. For
instance, for the higher level brands having sound brand images,
advertising could be
used to develop their good brand images; while for the lower
level brands, price
promotion could be used to extend the sales volume.
The correlation between advertising and brand switching has been
studied, and there
are different points of view towards the influences of
advertising in terms of brand
switching behavior. Especially, the hierarchy models of
consumers response to
advertising. A range of analysis learning on the method of how
consumers respond to
advertising with their purchase additionally got to be
investigated, as a result of there
are many intermediate effects before the ultimate purchase.
In order to understand the relationship between and brand
alternative, it is necessary
to understand the objectives of advertising. There are some
arguments concerning the
purposes of advertising. Some researchers mentioned that
advertising is used to attract
new consumers, whereas some researchers argued that advertising
is especially a tool
to take care of existing consumers and make them continue to
purchase the same
brand.
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According to Lavidge and Steiner, the purposes of advertising
mentioned by
researchers are mainly from two aspects: short-term and
long-term effects (Lavidge
and Steiner, 1961). The short-term impact is aimed to attract a
lot of consumers and
boost immediate sales, whereas the long-term effects can be
providing information
and educating consumers to differentiate one brand from others,
build up brand image
and improving client loyalty, and eventually increasing
sales.
It is not surprise that the target of advertising is to boost
sales: however where the
increased sales come from seems a motivating question for
researchers. Many
researches focusing on this question suggests that there can be
mainly two divisions
of the growing sales throughout advertising campaign. First,
extra sales maybe made
because of the switching from other brand: consumers attempt new
brands which they
do hardly ever purchase. Or consumers repeat their purchases and
purchase a lot of
same brand merchandise. Analysis conducted by Deighton,
Henderson and Neslin
(1994) discovered that sales increase comes largely from brand
switching rather than
repeated purchase throughout an advertising activity. That is to
say, the influence of
advertising on those consumers who already bought the
merchandise promoted is a
smaller amount obvious than on those new consumers.
Several analyses will prove the correlation between advertising
and sales increase.
Little 1979s analysis detected the positive result of
advertising on sales, and equally.
Raj (1982), McDonald (1970) found the positive relation between
advertising
exposure and complete switching, the analysis showed the higher
switching rate when
consumers have a lot of chances to ascertain advertisements.
However, Ehrenberg (2000) held a different read purpose towards
the target of
advertising. Ehrenberg 2000, p39, advertisings main role is to
reinforce feelings of
satisfaction with brands already bought. Researchers (e.g. Simon
and Arndt, 1980;
Tellis, 1988) holding the similar purpose of real recommended
that the result of
advertising is to strengthen repeat purchase behavior, rather
than to form brand
switching, and advertising has stronger impact on the consumers
who are familiar
with the brand or already heard of the message which advertising
is attempting to
pass.
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Page | 34
The effects of advertising are explained by Raj (1982) after the
analysis which
targeted on the influence of shopper loyalty on the results of
advertising has been
done. Per Raj (1982), advertising might have strong influence on
lower loyalty
consumers by attracting them to change to the brand advertised,
and higher loyalty
consumers can probably respond to the advertising with repeat
purchase and increase
their purchase quantity. In this analysis 3 categories variables
are tested: consumer
type, advertising content, and product type (Raj, 1982) three
folds of investigations
are done in this analysis, first, the variations between two
teams of consumers, namely
loyal consumers and non-loyal consumers; second, how advertising
contents can
influence differing types of consumers; and third how
advertising effectiveness can
amendment with different product varieties. The result urged
that advertising strategy
ought to be adjusted base mostly on differing types of
consumers. Moreover, the
analysis discovered a noteworthy result, and showed that there
is no obvious
change/decrease in sales of competitive brands, though there is
a rise in sales of
advertised product.
In Ehrenberg (2000)s opinion, repeat purchase accounts an
outsized quantity of sales
volume of frequently purchased products, and analysis on
advertisings main
effectiveness shouldnt solely be limited in discovering the last
word purchase
behavior or the persuasive effectiveness of advertising, rather
each stage of the
process of responsiveness must be investigated, as a result of
there is no strong proof
to prove the effectiveness of persuasive role of advertising. In
addition, a long-term
effect is also resulted from the reinforcement of advertising.
Consumers might switch
back to the brand which they usually get after the promotion and
advertising
campaign, in order to create a new purchase behavior and create
repeat purchase,
advertising reinforcement is crucial and necessary (Ehrenberg,
2000).
Although the majority of marketer use immediate sales increase
as a measurement of
effectiveness of advertising, the short-term affects cannot be
thought of because the
completed criteria for the influence of proposed advertisement,
as a result of long-
term influence might occur in an exceedingly comparatively
longer period. Lavidge
and Steiner (1961) urged that though short-term effects should
not be ignored,
providing effects of abundant advertising would seem in an
exceedingly long-term
period and therefore the effects dont seem to be direct
(Ehrenberg, 2000). Therefore,
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in Lavidge and Steiners purpose of read, both short-term and
long-term effects ought
to be invested.
Therefore, the increasing sales may not be the only criteria for
the high effectiveness
of advertising, rather advertising effectiveness ought to be
measured based mostly on
3 objectives: developing brand awareness and providing product
knowledge, making
brand preference and positive feeling, building up trust and
stimulating purchase
(Lavidge and Steiner, 1961). Beerli and Martin Santana (1999)
argued that advertising
effectiveness ought to be outlined clearly. As a result of
though increasing sales is the
goal of every company, the objectives of advertising is
different from business goals,
and therefore the main purpose of advertising is to pass info
and communicate with
existing or potential consumers. In different words, the
effectiveness of advertising
ought to be evaluated based mostly on objective achievement. If
the objective of
advertising cannot be achieved, its effectiveness may not be
acceptable.
Different factors might affect the effectiveness of the
advertising simultaneously. The
results of the analysis conducted by Lodish et al. (1995) shows
that there is no strong
correlation between advertising expenditure and sales effects,
as a result of there are
many different factors which may influence the advertising
effectiveness, such as
brand and media strategy, and different product categories.
Biel and Bridgwater (1990) urged that the effectiveness of
advertising, especially for
fast moving consumer goods, is said to liking and feeling
towards the advertising.
There is a positive relation between liking and effectiveness of
advertising. In
different words, if the TV advertising is more likable, shoppers
is also more possible
to be persuaded. Moreover, the more relevant and meaningful
advertising is more
effective than the advertising which solely has better
entertainment functions and
therefore the factors which influence liking of consumer are
trusted product category,
different forms of products might have issues/ various factors
influencing industrial
liking or the importance of each factor might amendment.
Hierarchy models of
consumers responses to advertising Vakratsas and Ambler (1999)
analyzed great
amount of analysis on the results of advertising and found that
there have been mainly
3 forms of models of how advertising works. The first category
is market response
model, which no intermediate advertising effects thought of.
Typically, advertising,
price, and promotional measures are associated with behavioral
measures such as
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sales or brand selection. Vakratsas and Ambler (1999) held the
positive read towards
market response models attributable to its advantages. First,
secondary data or
objective data could be utilized in analysis, and most
important, the uncertainties
which are caused by intermediate measurement could be
eliminated.
Furthermore, there are 2 levels of studies, namely
aggregated-level and individual-
level studies, the previous uses market-level data, such as
brand advertising
expenditures or market share; the latter use single supply data
such as individual
brand selection (Vakratsas and Ambler, 1999). one in every of
the samples of
aggregate level studies could be the analysis on the
relationship between the impact of
advertising sales and advertising spending (Lodish et al.,
1995).
The second category of models grouped by Vakratsas and Ambler
(1999) are
hierarchy impact models, though there are several different
hierarchy models and they
all concentrate on the process of advertising effects. In
different words, hierarchy
impact models assume that the influence of advertising on
consumers is a method, and
there are several steps and intermediate advertising effects in
this method. One in
every of example of hierarchy advertising impact model is AIDA
model:
Attention-Interest-Desire-Action studied by E. St. Elmo Lewis in
1989 (Vakratsas
and Ambler, 1999, p.26; Ehrenberg, 2000, p.41).
The steps and therefore the method of how advertising affects
consumer ought to be
studied, though the validity of hierarchy models is argued by
researchers as a result of
very few proof are often found (Palda, 1966) providing consumers
may not change
their brand preference immediately from one brand to another,
how consumers move
from one stage up to next stage and at last move to actual
purchase stage is a
necessary problem for understanding consumers brand switching
behavior, and it is
conjointly useful for increasing the effectiveness of marketing
communication.
Lavidge and Steiner (1961) argued that the changes of all the
stages of influence
should be evaluated, rather than solely live the event of brand
name awareness or
sales stimulation. Theses 3 aspects of consumer responses could
be derived from a
classic psychological model (Lavidge and Steiner, 1961), and
similarly, Beerli and
Martin Sartana (1999) urged that the simplest thanks to live
personal response is 3
component behavior analysis, namely cognition, affection and
conation or rational,
emotional and striving states (Lavidge and Steiner, 1961).
Moreover, Ehrenberg
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(2000) urged that the work of advertising could be studied from
3 aspects: product
awareness, product trial, and repeat purchase.
Similarly, Vakratsas and Ambler (1999) believed that advertising
has some
intermediate effects such as on consumers beliefs, attitudes and
behavior. Vakratsas
and Ambler (1999) mentioned the influence of advertising on
these 3 dimensions, and
especially the behavioral effects, as an example, the influence
on selection.
Morison (1966) compared 3 models which analyzed the influence of
previous
purchase on buying call. First model assumes that buying call is
a linear learning
process, since past purchase experiences would influence current
call and the
influence of recent purchase have much stronger impact. In
contrast, the second
model shows that solely the recent purchase would influence
current purchase call,
and the third model assumes that there is no impact of previous
purchase on current
purchase.
Deighton, Henderson and Neslin (1994) argued that it is not
affordable to judge
advertising influence solely based mostly on current
advertising. As a result of
consumers would respond differently to a same advertising
looking on they recently
bought the brand or not. Therefore, without investigating the
influence of previous
purchase, advertising and their interaction, the study would be
less meaningful.
Deighton, Henderson and Neslin (1994) steered that advertising
should not specialize
in the consumers simply bought the brand; instead, other
potential users ought to be
targeted if the advertising needs to stimulate brand switching,
since consumers who
simply bought the brand would have little responsiveness to the
advertising.
It is price to note the interaction between getting expertise of
consumer and
advertising (Deighton, Henderson and Neslin, 1994), as a result
of the expertise of
previous advertising and get could interact with present
advertising and end in
different brand choice behaviors (Ehrenberg, 2000). Deighton,
Henderson and Neslin,
1994) developed a model which illustrates the relations among
previous
advertising/promotion, current advertising/promotion, previous
purchase, and current
purchase. Moreover, during this model, price, brand preference
and size preference
have been thought about as determinants of current purchase. It
showed the continual
influence of previous advertising through its interaction with
previous purchase. The
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model shows again that the influence of advertising and
promotion is not solely short-
term, most frequently they would affect sales during a longer
period of time with the
expertise of previous purchase.
Ehrenberg (2000) mentioned that consumers may not be interested
in a billboard for a
brand or new brand which they are doing not frequently purchase,
and consumers
could purchase over one brand product throughout a period of
time. Therefore, the
first step of brand choice behavior, creating brand awareness,
is very important.
Additionally, stimulating consumers to undertake the new brand
is also crucial, as a
result of consumers will most likely solely type repeat purchase
behavior when they
try the product.
Promotion tools have been thought about mutually of the most
helpful tools to
influence sales volume in an exceedingly short-term period of
time (Laroche et al.,
2003). Neslin et al. (1985) thought about promotions as sales
acceleration and
maximizing tools. According to Gupta (1988), the impacts of
price and promotions on
which brand consumer will opt for, after they are willing to buy
merchandise, and the
way a lot of they are going to obtain are vital. Laroche et al.
2003) summarized 3
main benefits of marketing, as well as triggering unplanned
purchase, encouraging
consumers to buy non-promoted merchandises, accelerating the
quantity of looking
journeys to the store. Clearly promotion has been thought about
one in every of the
stimuli of brand switching and repeat purchase.
Oliveira-Castro et al. (2005) argued that the major impact of
promotions is on brand
shifting rather than increased consumption. Oliveira-Castro et
al. (2005) additionally
suggest that complete purchasing need to be studied from 2
dimensions, specifically
utilitarian and symbolic factors, as a result of consumers want
to realize each
utilitarian and informational edges from their brand purchases.
Thats to say, when
a consumer is shopping for a brand she or he is truly shopping
for not solely the
functions of the merchandise but additionally the fulfillment of
emotional needs.
There are 2 double explanations for the increased sales resulted
from promotion, one
is the increased purchasing quantity from existing consumers,
and therefore the
different is the new purchase from new consumers. Existing
consumers might store
more product that they dont want immediately, they will store
pile the merchandise
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throughout promotion activities. If all the increasing sales
from existing consumers in
short-term, there could also be no vital changes or increase in
sales in an exceedingly
long-term amount as a result of the shop piling (Gupta, 1988).
Therefore, the most
purpose of promotion could be attracted more new customers,
rather than stimulate
existing shoppers to buy more some products. However, according
to Ehrenberg and
Hammond (1995), price promotion has more impacts on existing
consumers rather
potential consumers. In distinction, the results of different
research (Gupta, 1988:
Bell, Chiang and Padmanabhan, 1999) shows that superior effect
of promotion is the
patrons who switch from different brands rather than on the
prevailing buyers. Within
the research conducted by Gupta (1988), brand switching accounts
more than
eightieth of sales increase throughout the promotion, as well as
a tiny low share of
sales increases come from the switching within a brand.
Promotion is one in every of the aspects within the selling
combine which have been
studied in terms of its relationship with the consumers
responsiveness, especially at
the stage of behavior: the actual purchase behavior (Shi,
Cheung, and Prendergast,
2005).
According to (Shi, Cheung, and Prendergast, 2005), previous
research has revealed
the link between marketing and consumers behavioral
responsiveness, and therefore
the research showed that marketing has the positive influence on
consumers
behavior, like brand switching, stockpiling, purchase
acceleration, product trial and
spending larger amount (Shi, Cheung, and Prendergast, 2005),
although there are
some arguments regarding the negative influences of price
promotion for higher level
brands (Ehrenberg, Hammond, and Goodhardt, 1994). However, the
negative effect
on brand has not been proved by the research conducted by Davis,
Inman and
McAlister (1992). The study compared the evaluations of
consumers analysis for
brands once promotion, and located that there is no obvious
amendment of
consumers analysis for brands once the promotion. The cognitive
affective
behavior framework has been adopted in this study, and complete
analysis queries
have designed based mostly on this framework. The variables of
consumers felling,
brand quality, and merchandise usage have been used to evaluate
brands. Questions,
like make me feel smart regarding myself, is prime quality, is a
complete I exploit
frequently, have been asked to check respondents attitudes
towards brands.
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Research studied on 5 promotion tools and brand switching in
Hong Kong (Shi,
Cheung, and Prendergast, 2005) proved that 3 promotion tools,
price discounts, buy
one get one free offers, and in store demonstration, have vital
influence on complete
alternative. The explanation for this result could also be
explained by different
researchers, like the consequences of in-store demonstrations on
brand switching.
Ram and Sheth (1989) believed that demonstrations in stores can
attract consumers to
buy new products, and therefore the barriers of perform and
emotion is reduced.
Different promotional tools, like cents off and free gift have
been additionally
studied in (Lichtenstein et al.s research in 1997).
Some researchers argued that the studies on marketing should not
be solely restricted
in behavioral level; instead, the psychological or attitudinal
elements must be
investigated furthermore (Lichtenstein et al., 1997; Laroche et
al., 2003). It is similar
with the arguments regarding the influence of advertising on
brand alternative
behavior; some researchers are interested within the
intermediated influence like
advertising/promotion effects on emotional and attitudinal
changes before purchasing.
In Laroche et al., 2003 on the linkage between promotional tools
and consumers
emotional, attitudinal, and behavioral responses, 2 differing
types of promotional
tools have been investigated to match their distinctive effects
on consumers, and this
research additionally studied the contributions of many trait
variables to the
distinction of responsiveness.
Price has been thought about as a determinant of brand switching
in the Linear
LearningModel developed by Lilien (1974). How consumers can
behave a
modification their purchases when some product classes and types
are in value
promotion, how consumers can response to cost changes, how value
modification
may result in responsiveness from consumers and complete sales
changes are
interested by marketers and researchers, as a result of value is
one in every of the
foremost important factors of creating marketing strategic and
tactical decision like
pricing, promotion and segementation (Oliveira-Castro et al.,
2005).
According to Oliveira-Castro et al., 2005, customers might
response value promotion
differently for different levels brand, and their goal would be
to gain the maximum
advantages as well as each utilitarian and informational
advantage, in addition as
minimize their purchase prices. Krishna (1992) urged that buyers
have varied
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expectations for different brands; consequently, they may answer
price oriented
promotions differently. That is to say, consumers completely
different value
expectations for brand can in all probabilit