A Research Project Report ON “Buying Behavior of consumers of age group 18-25 for milk chocolate bars with special reference to:- (A case study of Yamuna Nagar) Submitted in the partial fulfillment for the degree of Master of Business Administration Session (2009-2011) Under The Guidance Of: Submitted By : 1
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Buying Behavior of Consumers of Age Group 18-25 for Milk Chocolate Bars With Special Reference
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A
Research Project Report
ON“Buying Behavior of consumers of age group
18-25 for milk chocolate bars with special reference to:-
(A case study of Yamuna Nagar)
Submitted in the partial fulfillment for
the degree of Master of Business Administration
Session (2009-2011)
Under The Guidance Of: Submitted By :
Mrs. Anju Anand Balraj Saini
Department Of Management MBA 4rth Sem.
SIMT Roll No: 109007
Exam Roll No………..
1
Sarswati Institute of Management &Technology Kaithal
This is to certify that the Research Project of MBA entitled, “Buying Behavior of consumers
of age group 18-25 for milk chocolate bars with special reference to Cadbury, Nestle, &
Amul”, done by Mr. Balraj Saini, Roll No. 109007 is a benefited work carried out by him
under my guidance. The matter embodied in this project work has not been submitted in our
college earlier for award of any degree or diploma to the best of my knowledge and belief.
Mrs. Anju Anand Lecturer
2
DECLARATION
I Balraj Saini Roll No. 109007, here by declare that this project report entitle “Buying
Behavior of consumers of age group 18-25 for milk chocolate bars with special reference
to Cadbury, Nestle & Amul ” has not been presented as a par of any other academic except to
get my MBA from Sarswati Institute of Management &Technology, Kaithal
(BALRAJ SAINI)
3
ACKNOWLEDGEMENTS
In this present world of competition there is a race of existence in which those who are having
will to come forward will succeed. Project is a bridge between practical and theoretical
working, with this will I have joined the project. I really wish to express my gratitude towards
all those people who have helped me.
My project guide Mrs. ANJU ANAND (lecturer) who provided me her expert advise,
inspiration & moral support in spite of her busy schedule & assignments, has mainly provided
my understanding of this project. I am very grateful to her kindhearted approach &
encouragement, which helped me immensely in completion of this project report.
I take this opportunity to express my gratitude to Mr. K.K AGGARWAL (Director), for
his invaluable help & guidance throughout the course.
Last, but not the least, I say only this much that all are not to be mentioned but none is forgotten and I will like to extend my special thanks and gratitude to all my classmates who always encourage me in pursuit of excellence.
( BALRAJ SAINI )
4
PREFACE
This project has been prepared, as a part of our MBA Program. This will also serve as basis
knowledge of “Buying Behavior of consumers of age group 18-25 for milk chocolate bars
with special reference to Cadbury, Nestle, Amul.” The Project Report is accompanied with
number of Formats, charts & flow diagram, which will be helpful in understanding the subject
matter. We are thankful to Mrs. ANJU ANAND ; Lastly we are grateful to all the seen and
unseen hands that have been kind enough to help me in preparing the above project report from
the beginning to end.
( BALRAJ SAINI )
5
Contents Particulars Page No.
Introduction to the study 01
Consumer Behavior 16
Research Methodology 22
A. Problem Statement 25 B. Research Design 26
Area of Study Objective of the Study
C. Sampling Design 27 Sampling Unit Sample Size Sampling Techniques Constraints of the study
D. Data Collection 28 Data Collection Methods Data Collection Techniques
E. Statistical & Analytical Tools 29
Analysis & Interpretation 32
Findings 42
Limitation 45
Suggestions 47
Conclusions 49
Bibliography 51
Questionnaire 53
6
7
Introduction
This project is about preference of the consumers towards FMCG products i.e.
chocolates in domestic market (in special context of nestle, Cadbury & Amul
chocolates)
The story of chocolate began in the new world with the Mayans, and also the
word chocolate comes from the Mayan word xocoatl, and the word cocoa from
the azlec cacahuati, who drank a dark brew called cacahuaquchtl. Later, the
Aztec consumed chacahoua and used the cocoa bean for currency. In 1523, they
offered cocoa beans to Cortez, who introduced chocolate to the world, where it
swiftly became a favorite food among the rich and noble of Europe.
From the beginning, turning raw, bitter cocoa beans into what one 17 th century
writer called “the only true food of the gods” has been a fine art, a delicate
mixture of alchemy and science. Centuries ago it was discovered that fermenting
and roasting the beans could create an almost otherworldly flavor. In 1875, after
years of trying, a 31-year-old candy maker in vevey named Daniel peter figured
out how to combine milk and cocoa power.
The ancient Aztecs believed chocolateTo be the “FOOD OF THE GOD ”
Firstly, there is a need to know about the chocolate…that what is chocolate. Why chocolate is the most popular dessert flavoring around.
MEANING OF CHOCOLATE:-1. A preparation of the seed of cocoa, roasted, husked, and ground (without
removing any of the fat), often sweetened and flavored.
2. A beverage or confection made from this.
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3. Dark brown.
4. A divine substance inspiring passion in those who consume it.
Origin of chocolate
The word chocolate comes from the Mayan word xocoatl, and the word ‘cocoa’
from the Aztec cacahuatl. In Mexico, the beverage was called chocolath, from
lath (water) and choco. Supposedly the Spaniard found the Mexican word har to
pronounce and called it cacao. Chocolath, chocolath, chocolath. Puff puff. See? I
did it! (But let’s stick to cocoa) *LoI*
From cocoa to chocolate
Sorting, clearing, frying, crushing, grinding is the only small part of stages of
production cycle transforming cocoa beans in chocolate, which we eat.
Chocolate is really the unique product, tasty, highly nutritive (about 550 kkal in
100gm of a product), capable to be stored by years without change of properties.
It contains 50-55% of carbohydrates, 32-35% of fat, 5-6% of fibers. And also
tannin substances (4-5%), stimulators-the bromine and caffeine (1-1.5%),
microelements Na, K, Mg, P, Fe and vitamins B1, & B2.
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HISTORY OF CHOCOLATE
The discovery of cocoa was only a first step in the direction of chocolate. The
Mayas were the first to cultivate the cocoa bean for the fruits it yielded. They
used the beans as an ingredient in their favorite chocolate drink ‘xocotlatl’.
Legend suggests that the first beans came out of paradise and lent wisdom and
power to the person that ate them. For obvious reasons, the use of cocoa was kept
to a minimum by the emperors.
Before the Spanish explorers discovered the New World, chocolates and other
“exotic” foods were totally unknown in Europe. Columbus was the first European
to become acquainted with cocoa, but he wasn’t exactly impressed.
During one of his conquest in the New World he met the Aztecs. For many
generations, they drank an infusion of grilled seeds and spices. This mixture
tasted disgusting and it also contained cocoa beans. The Aztecs adopted the ides
of cocoa consumption from the Mayas.
However the conquistadors pizzaro and, in particular, Cortes did show interest in
the bean. Fernando Cortes reached the east coast of Mexico in 1519. as an
honored guest of Montezuma (Aztec emperor and inveterate chocolate fanatic) he
was offered xocotlatl –a small portion of aromatic chocolate drink mixed eith
vanilla, pepper and other herbs.
For the Mayas, cocoa beans were very important, not only were they a poplar
means of exchange, they also had a religious value. The Mayas sacrificed cocoa
beans at the funerals of the upper class.
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PREFACE
The customer is king. Finally ten years after the liberalization of India’s
economy began. The market place has, suddenly become tightening competitive.
Not only have new players stormed into the country, there are more brands
available then ever before in every segment of every market. The customer today
buys only that which meets his/her every desire. This demands more intimate
understanding of the customer by the “Smart Companies” the study has been
divided into six parts.
First part contains briefly the CHOCOLATES, history of chocolates, along with
the development of passion for chocolates.
Second part presents an overview of evolution of chocolates, chocolate industry-
growth and competition in various categories. Major players in this industry.
Third and Forth part includes a brief profile about the consumer behavior &
Research Methodology for the study. This part describes the term consumer
behavior and it’s importance.
Part five deals with the Analysis & Discussion. Important findings have been
discussed at last for better understanding.
Lastly, Part six namely “Findings & Recommendation” highlights the major
findings during the course of the study. Accordingly, recommendations have
been made.
11
INTRODUCTION
EVOLUTION OF CHOCOLATE
1753-1849
1753 Swedish biologist Carolus Linnaeus revealed his feeling for
chocolate while attending to the task of classifying organisms in a
binomial system. To the chocolate
tree he gave the botanical name of theobroma cacao. Cacao refers
back to the original native language. Theobroma is a Latin term that
translates to “food of the gods”.
1765 In 1765 the Englishman James Watt invented the steam engine and in
doing so set in motion what we now refer to as the industrial
revolution. Around the same time in the colony of Massachusetts
one of the first machine oriented chocolate manufacturing
businesses was being established. The partnership of John Hannon,
an Irishman, and Dr. James Banker of the Massachusetts colony
formed the company Hannon’s Best chocolate. Through the use of
an old grist mill, cacao beans were ground into chocolate liquor,
pressed into cakes of paste for eventual use as a chocolate beverage.
During a routine trading mission to the West Indies, Hannon was
presumed dead when his ship failed to returned. The name of the
company subsequently changed to the Baker company. It was not
until 1927 that the Baker family sold their business to General
Foods.
1774 The mysterious rumors that surrounded the death of pope clement
XIV, give credence to the notion that chocolate had become a
favorable way of distinguish poison. The pope died after consuming
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a chocolate beverage, which also killed the unwritten confectioner
who shared in the consumption. Through there is no proof, the
Jesuits are suspected to have arranged his demise. The pope had
been in opposition to the Jesuits, and they were known chocolate
drinkers. So the conclusion, while not provable, is not unfounded.
1819 Francois Louis Cailler opened a chocolate factory on lake Geneva
near Vevey. He used machinery he had developed himself, making
him a pioneer in the evolution of Swiss chocolate.
1828 Chocolate maker and chemist Coenraad Van Houten developed the
process now known as “Dutching.” His patented invention involved
the removal of close to half of the cocoa butter from chocolate liquor
through the use of hydraulic pressure. The removal of the cocoa
butter resulted in a commensurate decrease in fat content. Instead of
fifty percent, the hard cake that was let from this process had a fat
content of only Twenty-Five percent. The cake could then be
crushed into a powder. The use of alkaline salt allowed for easier
mixing with warm water. It also made the color darker and had the
pleasing affect of a less bitter taste. This invention would be the key
in the development of chocolate as a confection.
1847 Joseph Fry was a Quaker who began manufacturing chocolate under
the name of Joseph Fry & Sons. While the original Joseph Fry left
the company to become a type founder, his sons continued the
business. One of his sons, another Joseph Fry, purchased a Watts
steam engine in 1789 to more efficiently grind cacao. A great-
grandson of the original Joseph Fry led the business toward the
development of edible chocolate. Hoe found that by remixing some
of the cocoa butter back into the processed “Dutched” cocoa powder
and adding sugar, a paste was formed that could be pressed into 13
molds. The effect of this was a chocolate bar that gathered as much
attention as chocolate beverages had.
1849 Ghirardelli, an Italian native, planned early on having a chocolate
business. However, he traveled first to Uruguay and then to Peru
before setting in California in 1849. Though he had been attracted
by the Gold Rush, he soon learned that there was more reliable profit
to be had selling tents to other gold miners than in actual mining. He
used the money he saved and started the Ghirardelli chocolate
factory, which is still located in San Francisco.
1849-1986
1850’s Prime Minister William Gladstone, in an effort to boost the
economy, lowered the taxes on cacao beans, allowing British
manufacturers to expand their market.
1860 British FDA is founded. A British journal called the Lancet
discovered that many chocolate manufacturers were employing
various methods of “Cutting” chocolate with something less
expensive. One report revealed that cocoa powder was being thinned
with brick powder. Stirred to respond, the British government passed
its first food and drug act in 1860.
1868 John Cadbury was another Qyaker who became interested in
chocolate production. In 1824 he had opened a Grocery store in
Birmingham, England. Cadbury featured cacao beans that he would
roast and grind himself. In time he realized the interest and
profitability in changing his focus to manufacturing of chocolate.
Cadbury became so renown that he received a Royal Warrant in
1854 to be the single cocoa and chocolate provider for Queen
Victoria. Richard and George Cadbury took over their father’s 14
business and in 1866 purchase a Van Houton machine. They began
to market Cadbury cocoa powder. By 1868, the Cadbury company
produced the first box of chocolate candies. Their business continue
to flourish, and in 1879 they took over the Birmingham suburb of
Bourneville. The factory they built there supported a town,
providing both worker housing and recreational facilities.
1879 During the same period that Cadbury was developing into a
formidable chocolate force, a Swiss chocolate manufacturer was
struggling to find a way to combine chocolate with milk. Daniel
Peter could not produce something with a smooth consistency
because the milk could be made more shelf-stable for use a baby
formula. The product of Nestle’s experimentation was a sweetened
condensed milk. The new milk, which had lesser water, was mixable
with chocolate and made a product that would not spoil easily. Henri
Nestle and Daniel Peter formed a company in 1879. Today, the
largest food company in the world is Nestle.
1879 A conching machine was created in 1879 that allowed for the
smoothest chocolate yet. Rudolf Lindt used a concave granite bed
where chocolate liquor, sugar, and milk if desired, would be ground
back and forth by heavy rollers. Lindt named his chocolate Fondants
because their texture was as smooth as the popular creamy candies.
The process of conching soon became a part of common chocolate
manufacturing. In addition, the friction of the rollers produced a heat
that made roasting an unnecessary steps. Today, the rollers in
conching machines are kept at a controlled temperature for an even
higher quality.
1893 Milton Suavely Hershey was a Mennonite from Pennsylvania who
owned a caramel manufacturing plant. When he visited the world 15
Colombian Exposition in Chicago his interest was initially to
purchase and use machines to make chocolate covered candies. His
interest changed course after visiting Europe and researching the
many chocolate manufacturers there. Hershey then decided to focus
his business on chocolate production and in 1900 he introduced to
the world the milk chocolate Hershey bar. It was followed five years
later by the Hershey kiss. With business expanding beyond
expectation, Milton Hershey took over the town of Derry Church,
Pennsylvania and renamed it Hershey. Thought he also developed a
Hershey, Cuba around a sugar mill he owned, Milton Hershey was
focused out of Cuba in1959 when Castro gained control. Today
Hershey, Pennsylvania is an impressive tourist attraction.
1908 The triangular Toblerone chocolate bar was created and launched
into market by Swiss chocolate maker Jean Tobler.
1913 Swiss chocolate maker Jules Sechaud invented the chocolate filled
bonbon.
1929 At the end of the twentieth century Cella’s Confections, on West
Broadway and canal, was a part of many factories that made up New
York City’s confectionary district. In 1929 their candy factory began
manufacturing chocolate-covered cherries. Today, while the other
confectioneries have disappeared, Cella’s remains.
1936 Philip Silverstein owned a candy company on Delancey Street in
New York City. In 1936 he created a thick, nut and raisin filled
chocolate bar, known as the Chunky Bar.
1940’s As the United States geared up for a war in Europe, Militon Hershey
suggested an addition be made to the standard soldier’s “D-Ration.”
16
The American military began to include three 4 ounce, 600 calorie
chocolate
bars in each “D-Ration.” While from today’s perspective this may
seem odd, the Aztecs had used chocolate for the edification of their
own warriors. In addition to lifting the energy and spirits of the
troops during World War II, the chocolate bars became associated
with peace, as malnourished holocaust survivors were rescued by
American troops offering chocolate.
1986 When Jim Walsh left his life as an adventures executive in Chicago,
he decided to move to Hawaii to start a chocolate business. He
purchased plantations on Kea’au and Kona, and decided to use the
fine criollo cacao beans for his foundation. The beans he harvested
are sent to California, after they have been fermented and dried, and
are processed into high quality chocolate. Only available through
mail order, the chocolate is used primarily by pastry chefs.
Major Players in the Market
17
CADBURY (INDIA)
Trading at rs.850, the Cadbury (India) stock presents a good long-term
investment option.
After hitting a high of Rs. 981 in March 2000, the stock retraced to its present
level. The current price discounts the latest EPS 49 times. With good growth
protects ahead and a strong financial background, the stock may hold good
potential for steady returns over the long term.
Cadbury (India), subsidiary of Cadbury Schweppes Overseas, is one of the
leading player in the chocolate and sugar confectionary segment. The parent has
a 51 percent stake in the company. For the year-ended December 1999, close to
76 percent of the sales turnover was derived from chocolate followed by malted
foods (22 percent).
Cadbury (India) has for long been the leading player in the chocolate industry. It
is virtually a household name with leading brands such as Five Star and Dairy
Milk. Of late, the company has been flooding the market with new launches.
Among the successes of recent years are Perk and Picnic.
In the malted food segmented, Bournvita is one among the popular brands.
However, the health- drink segment has failed to lead support to the company’s
bottom-line in the recent past. Volumes in Bournvita have been deciding for
some time. However, this is not likely to be a drag on the profitability.
Cadbury (India) has levered on its marketing strengths and product range.
Competition may stem from players such as nestle in the near term. Apart from
this, other new players such as Mars and Hershey’s may have an impact on the
level of competition. However, the reduction in the excise duty on malted drinks
and chocolates and the lower import duties on cocoa is likely to have a positive
impact on the cost-structure of the firm.
18
The earnings performance of 2000 first quarter was impressive. Sales revenue
rose 20 per cent to Rs. 139.34 crores compared to the corresponding previous
period. Operating margins declined marginally from 16.4 per cent to 15.7 per
cent. Post-tax earnings rose a 11.5 per cent to Rs. 10.34 crores. If the top line
growth is sustained at this level, it could provide a boost and growth over the
long term. Shareholders can stay invested.
19
NESTLE
The story of chocolate began in the new World with the Mayans, who drank a
dark brew called cacahuaquchtl. Later, the Aztecs consumed chacahoua and used
the cocoa bean for currency. In 1523, they offered cocoa beans to Cortez, who
introduced chocolate to the world, where it swiftly became a favorite food among
the rich and noble of Europe.
From the beginning, tuning raw, bitter cocoa beans into what one 17 th century
writer called “the only true food of the gods” has been a fine art, a delicate
mixture of alchemy and science. Centuries ago it was discovered that by
fermenting and roasting the beans, an almost otherworldly flavor could be
created. In 1875, after tears of trying, a 31-year-old candy maker in Vevey named
Daniel Peter figured out how to combine milk and cocoa powder. The result-milk
chocolate. Peter, a friend and neighbor of Henri Nestle, started a company that
would quickly become the world’s leading maker of chocolate. For three decades
the company called Peter, Cailler, Kohler relied on Nestle for milk and marketing
expertise. In 1929, the almost inevitable merge took place as Nestle acquired
Peter, Cailler, and Kohler.
20
AMUL
AMUL CHOCOLATE is made from Sugar, Cocoa Butter, Milk Solids,
Chocolate mass Composition Milk Fat 2% Sugar 55% Total fat 32.33% (Milk fat
Marketing Research – Donald T.S (6th edition), Page 49 Marketing Research – Beri G.C (3rd edition), Page 79 Marketing Research – Boyd H.W (7th edition) Research Methods – Donald C.R (8th edition), Page 120 Basic Marketing – Pereaurt W.D (2nd edition), Page 450 Consumer Behaviour – Della A.J (4th edition), Page 15 Consumer Behaviour – Gupta S.L (2nd edition), Page 144 Consumer Behaviour – Schiffman & Kanauk (3rd edition) , Page 306
MAGAZINES & JOUNALS
Advertising Express- February 2006, Traditional Mass Media, By K.Suresh, Page 35
Marketing Mastermind – March 2006, Advertising Reaction ,By Barada Prasad Panigrhy, Research Associate , ICFAI Centre, Page 36
Indian Journal of Marketing – March 2006, Article By Dr.Banusmathy, Page 31
Business World – April 24,2006 , Page 8 Business India – Advertising , April 23,2006 Business Today – Trends, April 23,2006 Synergy - Article By Mittal Alok, January 2006,Page 74-85 Business Research – June 2005, Page 31
“Buying behavior of consumer for Milk chocolate bar of age group 18-25
With special reference to 3 companies i.e.
Cadbury, Nestle and Amul”
Q. Do you like chocolate ?
Q1. Which companies’ chocolate do you purchase? Please rank them according to your preference.
Cadbury Nestle Amul RANK 1
RANK 2
RANK 3 RANK 4 RANK 5
Q2. What is your pattern of consumption?
More than one per day Daily One
3-4 Chocolate per week
Weekly Rarely
Q3. You purchase same chocolate every time…
60
Name of the consumer ____________________________________
Age ____________________________________
Sex ____________________________________
Strongly Agree Agree
Neutral
Disagree Strongly Disagree
Q4. Which factor you consider the most while purchasing the chocolate?
Price Taste
Brand Packaging
Other
Q5. What extent of price tag influences your purchase decision of chocolate?
High High Average Average
Low Average Low
Q6. Which mode of advertisement influence you most to buy a particular chocolate? Magazine _______ Newspaper _______ Radio _______ Television _______ Other _______
Q7. Which reference group influence you most to buy a particular chocolate? Friends _______
Family _______ Retailer _______ Celebrity _______
Other _______
61
Q8. You consider manufacturing and expiry date while buying any chocolate________
Strongly agree Agree
Neutral
Disagree Strongly Disagree
Q9. If you switch over to another brand of chocolate then what factor you consider?
Price Quality Brand Name
Advertisement and Reference group Taste
Q.10 What quality of chocolate attracts you ?
Quantity of sugar. Chocolate Flavor
Quantity of Milk.
Q11. Are you satisfy with the present brand of chocolate in Yamuna Nagar_______
Strongly Satisfy Satisfy
Neutral
Dissatisfy Strongly Dissatisfy
Q12. What is your suggestion for the improvement of your preferred chocolate brand?