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A STUDY OF THE CONSUMER BUYING BEHAVIOR OF ITC CLASSMATE PEN
By
SUJAY VIKRAM SINGH
Roll No.:138159622
Dissertation Submitted to the National Council for Hotel
Management & Catering Technology(NCHMCT)& Indira Gandhi
Open University(IGNOU),NEW DELHI
In partial fulfillment of the requirement for the degree of
M.Sc. in Hospitality Administration
(Specialization: Sales & Marketing)
(Academic session 2013-2015)
Under the Guidance of
Mr. N.L. Rastogi
(Co-ordinator M.Sc HA Program)
INSTITUTE OF HOTEL MANAGEMENT CATERING & NUTRITION
SECTOR-G, LUCKNOW, UTTAR PRADESH-220624
INTRODUCTION
BACKGROUND
The study of consumer behavior implies how & why a
particular consumer reacts to the decisions of producers. It is the
study of how individual make decision to spend their available
resources (time, money, effort) on consumption related items. It
includes the study of why they buy it, when they buy it, where they
buy it, how often they buy it & how often they use it.
This study focused on understanding the consumer buying behavior
of pens at retail outlets. It also focused on the issue that
whether the marketing strategies are properly implemented or not.
The study would be beneficial for the ITC Company to formulate the
strategy for future.
Rationale
Pen is a product, which is used by each and every person. There
are various brands of pen in the market of different types Price,
Color, Design, Grip etc. So the pen market is full of competition
where the consumer possesses vast variety of choice to select his
brand which depends on his buying behavior .Of course it is very
difficult to describe consumer buying behavior about pen; even
though researcher have tried to find how the consumer purchases a
particular brand? How much he searches for his brand? What factors
influence he to buys the preferred brand? What are the different
perceptive of retailers on pen?
Pen Industry which is basically my concern industry around which
my project has to be revolved is really a very complex industry.
The project describes an understanding of the strategy &
requirements for ITC Stationery Pens, for penetrating ITC offers to
target market (institutions, retailer's ,etc.) was basically the
field of study for this research.
Thus the genesis for doing this study is to throw light on pen
industry consumer buying behavior in general with specific
reference to the analysis of ITC classmate pen consumer buying
behavior in the target market.
SCOPE OF THE STUDY
The following aspects of pen consumer buying behavior have been
covered in this study.
Demographics of pen consumers.
Psychographics of pen consumers.
Marketing & Competitive environment factors influencing
consumer buying behavior.
Industry and market analysis in terms of size, location, growth,
potential, market share and future business trends.
SIGNIFICANCE OF THE STUDY
This study helps to the researchers to know about the consumer
buying Behavior and its influencing factors
This study will help the company to know about the consumer
buying Behavior pattern of their products
This study will help the company to identify the right marketing
mix for the products
This study helps the company to improve their strategic
formulation and decision making process
STATEMENT OF THE PROBLEM
The research problem addressed in this study is focused on
consumer buying behaviour analysis of classmate pen vis--vis
retailers perspective.
OBJECTIVES OF THE STUDY
To conduct a comprehensive study on ITC CLASSMATE PENS in the
context of consumer buying Behaviour.
To study and analyse purchases and consumption pattern of pens
by the consumers.
To appraise key factors which mostly influence the consumers to
buy pens.
To critically analyse the marketing strategies used by ITC for
promoting the sales of classmate pens against other
competitors.
LIMITATIONS OF THE STUDY
There are number of a factor, which affects consumers perception
about pens and is not possible to take all of them into account.
Thus, this study is limited to variable under consideration.
The research is based on the responses given by the respondents,
which may or may not be biased.
The results shown are relative in nature and are not absolute.
In other words, it is the perception of an average customer.
The research study was conducted within the limited duration of
time. So a detailed and comprehensive study could not be made.
The above listed limitations will provide a potential lead to
conduct a future research on the subject.
HYPOTHESIS
The research hypothesis of this study is as follows.
Ho :The growth in market share of ITC Classmate pens is
comparatively more than its competing brands in the context of
study site COLABA, Mumbai.
GLOBAL WRITING INSTRUMENT INDUSTRY
Globally, writing instrument industry is rising at a healthy
rate despite growing
computerization. The global writing instrument industry is
estimated at Rs 65000
crores. (p.a) where USA markets grew by 5% last year (2008-09)
and is expected to
grow by the same proportionate at this time too. China controls
approximately 10% of the global market, due to its manufacturing
process. India is becoming most preferred manufacturing destination
after china. Indian product quality is among best in the world,
Compared to china mass market products. Indian market is growing
healthily at 15 to 20% and is expected to grow with same rate for
upcoming 2 to3 years (according to CAGR), where the organize sector
now controls 70% Market share in 2011 as compared to 54% up to
2000.
INDUSTRY PROFILE
The Indian writing instruments market today is still on the path
of discovering new niches with ergonomic designed products,
promotional marketing items and luxury items but in the coming
years it is bound to grow tremendously not only domestically but
also in its exports emerging as world leaders in Writing
Instruments.
Indias writing instrument industry is reserved for the small
sector with a statutory limit on the maximum investment in plant
and machinery at Rs 50 crores. As a result critical pen component
like refills are manufactured in house, while all non-critical
components are outsourced.
PROFILE OF PEN INDUSTRY IN INDIA
Over the years, the market share flowed from the unbranded to
the branded sector. The market is segmented according to the
following target audience:
Students(many of whom depend only on pencils and ball point
pens)
Frequent users(in offices across commercial and public
establishments)
Occasional users(housewives and literate manual workers)
MARKET AND MARKET INFORMATION (IN DETAILS)
The worldwide market size for writing industry is Rs 100000
Crores (p.a),where USAs market alone is $4.68 Billion Dollars (App
Rs 21000 Crores).
China exports of pens are over Rs 5000 Crores (p.a).
India exports of pens are over Rs 200 Crores (p.a).
The annual turnover of the industry in India is now estimated at
Rs 2000 Crores per annum and is expected to increase at an annual
growth rate by 15-20% per annum.
About 80% of Indias pen industry revenue comes from pens with a
price range of up to Rs. 15.
A small percentage of pens are priced in the range of Rs.
100-300.
The market for lower price range pens (up to Rs.15) is growing
at 7-8% annually; the mid-range pen market is growing faster at
8-10%.
India is viewed as a quality supplier, where as china as a
cheaper and lower quality products supplier.
Germany, Japan, Taiwan & Korea were hubs for the writing
instrument industry, but due to cast factor manufactured have
started shifting to China and India.
Previously Switzerland was the manufacturing center for ball
point tips, but now India is emerging as a major Tip manufacturer
satisfying not only Domestic demand but Global demand also
MARKET BREAK-UP
It is a quasi-fashion statement something thats aligns with the
personality, still the pen purchase decision is considered as low
involvement decision.
INTRODUCTION TO THE COMPANY
ITC is one of India's foremost private sector companies with a
market capitalisation of nearly US $ 30 billion and a turnover of
over US $ 6.1 Billion. ITC is rated among the World's Best Big
Companies, Asia's 'Fab 50' and the World's Most Reputable Companies
by Forbes magazine, among India's Most Respected Companies by
Business World and among India's Most Valuable Companies by
Business Today.
HISTORY OF ITC
ITC was incorporated on August 24, 1910 under the name of
'Imperial Tobacco Company of India Limited'.
A leased office on Radha Bazar Lane, Kolkata, was the centre of
the Company's existence.
The Company celebrated its 16th birthday on August 24, 1926, by
purchasing the plot of land situated at 37, Chowringhee, (now
renamed J.L. Nehru Road) Kolkata, for the sum of Rs 310,000.
The Company's ownership progressively Indianised, and the name
of the Company was changed to I.T.C. Limited in 1974.
ITCs Product Mix
Cigarettes
FMCG Foods
Lifestyle Retailing
Personal Care
Education & Stationary products
Safety Matches
Hotels
Packaging
ITC CLASSMATE
ITC made its entry into the stationery business in the year 2002
.
ITCs stationery Brands are marketed as Classmate and Paperkraft,
with Classmate addressing the needs of students and Paper kraft
targeted towards college students and executives.
Classmate - Indias truly largest National brand, reaching 65,000
outlets across the country,
Classmate has successfully run the Classmate Young Author &
Artist Contest for 5 years. The contest is a national level event
going across 34 cities and getting participation from 5000
schools.
CLASSMATE PENS
Aesthetically designed, Classmate pens offer the consumer a
smoother and more comfortable writing experience through use of
ergonomic design, reducing the effort required for writing. The
initial launch comprises ball pens - Classmate Safari and Classmate
Ilet - and gel pens - Classmate Glider and Classmate Octane.
ESPB Division ( Education & Stationery Products Business
)
ESPB divisions :
Brands : Paperkraft, Classmate & Saathi
Categories : Notebooks, Arts Stationery, Erasers &
Sharpeners, Geometry Box, Pencils, Scholastics, Pens &
Refills.
ESPB - Hierarchy
CEO of ESPB - ( Mr. Chand Das )
HOSM ( Head of Sales & Marketing )
Marketing Manager
PV DHOBALE
NSM ( National Sales Manager ) KN GRANT
Mumbai General Trade Team Structure
Assitant Branch Manager ( ESPB )
Area Manager 2
Area
Manager 1
l
Area Manager 3
Area Executive
3
Area Executive
3
Area Executive
3 No.s
DI
NSM ( National Sales Manager )
General Trade - NSM
Alternate Trade - NSM
Modern Trade Manager
Institutional Manager
RSM ( East )
RSM ( West )
RSM ( South )
RSM ( North )
Assitant Branch Managers
Area Executives
Area Managers
Area Managers
Area Managers
Area Executives
Area Executives
RESEARCH DESIGN
Research Approach: Exploratory study is done for the study of
consumer buying Behavior.
Time Dimension: The study was done using Cross Sectional
method(As the Study is done only once in the pre specified period
of 5 weeks in months of November-December. longitudinal study was
not possible).
SAMPLING PLANS
Description of Population/Universe
Here population refers to the number of consumers and retailers
who are using and selling various pens. The sample population
includes people from various categories like Business Person,
Service Person, Student, Housewife's Etc.
Sampling Area
Is the place where the sample is drowned. Here the researchers
take samples from various parts of Colaba, Mumbai.
Sample Size
The number of sampling unit selected from the Population is
called the size of the sample. The sample size selected was 100 for
consumers survey and 50 for retailers survey
Sampling technique
Here the researcher used probability sampling method.ie
stratified sampling is used for consumers (when subpopulations
within an overall population vary, it is advantageous to sample
each subpopulation (stratum) independently.Stratificationis the
process of dividing members of the population into homogeneous
subgroups before sampling. The strata should be mutually exclusive:
every element in the population must be assigned to only one
stratum. The strata should also be collectively exhaustive: no
population element can be excluded. Thensimple random
samplingorsystematic samplingis applied within each stratum.)
and non-probability convenience method for the retailers as the
sampling technique.
Method of Data Collection
Primary Data: The researcher has collected primary data using
structured questionnaire and personal interviews with selective
respondents.
Secondary data: It was collected from the ITC company magazines,
websites, and other such sources.
Instrumentation
Research Instrument: Structured Non-Disguised Questionnaire is
the research instrument used here. The researcher has effectively
used close ended questions.
Administration: This was done using self-administered
questionnaire conducted through face to face communication.
DATA PRESENTATION
The data are presented through charts, graphs and tables.
TABLES: A univariate table were used to project the data.
GRAPHS: Graphical representation of data was through- Pie chart,
Column graphs ,Bar graphs.
STATISTICAL TOOLS USED
PERCENTAGE METHOD
In this project percentage method test and used. The following
are the formula:
Number of Respondents
Percentage of Respondent = *100
Total Respondent
CO-RELATION ANALYSIS was used to prove the hypothesis of the
project.
FINDINGS
Amongst different types of Pen, Ball pen is preferred by most of
the consumers
Cello Brand enjoys the market leader position and it is also
preferred by the majority of the consumers for writing among the
different brands of Pen available in the market.
Among the various price of pens available in the market, between
Rs 5-10 price level is the most popular level.
Most of the consumers are prefer to buy pen from stationary
shops.
Smooth writing is the most influencing pen characteristic in the
consumer buying process of pen
TV advertisement is the most influencing media for customers to
buy pen.
Though the effect of In-shop advertisement towards customer is
minimum, among the various mediums pen stands influences the
most.
Friends are most influencing category of people in consumer
buying decision of pen.
Though there is no strong brand loyalty towards any brands, high
quality can make brand loyal customers.
Most of the customers buy more than 10 pen in a year on an
average basis
Customers are less inclined to refill their pen because the pen
cost is negligibly small
Among the surveyed customers only 39% has used classmate
pens.
Maximum sale of pen happens during the school opening time.
High margin is the main pushing factor for retailers to sell
more products
Most of the retailers replenish their stocks once in two
weeks.
Among the surveyed retailers only 24% have classmate pen in
their store
In retailers opinion by improving the availability of classmate
pen, the sales can be improved.
On applying our findings to our 100 consumer in the survey,
price satisfaction were correlated with overall satisfaction
scores, r=0.19, which is considered as smaller effect, Hence Null
Hypothesis is accepted in total.
RECOMMENDATIONS
Cello Company is regarded as No 1 market leader due to its
product verities mainly in the Price range ranging from Rs 5 20 .In
this Low Price Segment where majority of consumers prefer to buy
their pen. At the same price range Classmate have very less
products which can satisfy consumer need. So hereby I suggest that
Classmate should Come up with more products in Effective Price
range Of Rs 5 20, targeted to different consumer segments.
The practice of Use and Throw is more visible in consumers, so
classmate should bring some models in below 5 Rs price level.
Company should strongly take care of availability of pens at
rural retail outlets.
As Classmate is relatively new to the market consumers are not
that much aware about the product, so company should focus more on
promotional activities.
Compare to other brands classmates have limited or minimum
In-shop advertisement objects, by increasing this brand awareness
can be improved.
From the survey it is clear that different variable/features
influence buying decision of consumer in different segments. Thus
Company should not have a common Positioning for all Target
Markets. The companies should try to focus on a target group by
focusing on various characteristics that affect their buying
decision
SCOPE FOR FUTURE RESEARCH
The factors that influence the consumer may change with change
in time
because the needs of consumer may vary with change in time. So
continuous
monitoring and close observation of factors that motivate the
consumer is
necessary to maintain a competent workforce. Only with a
competent work
force an organization can achieve its objective. Moreover,
marketing
department is the most valuable asset to any organization. A
further study
with in department analysis to know to what extent these factors
motivate
the consumers is required.
BIBLIOGRAPHY & WEBLIOGRAPHY
BIBLIOGRAPHY
ITC India Ltd -Annual Report (2012).
Kothari, C.R.( 1982). Research methodology. New Delhi: Tata Mc
Graw-Hill Ltd.
Das ,Bhagaban & Das ,Debadutta (2006) .Consumer Buying
Behavior In India: New Delhi: Tata Mc Graw-Hill Ltd.
Solomon,R,Michael(2010). Consumer Behavior - Buying, Having, And
Being, Prentice Hall PTR
Ali ,S.S,. Thakur,A.K,.Madhavan,K,.Palat(2009)-Models in
Consumer Buying Behavior. Deep & Deep Publication
WEBLIOGRAPHY
http://www.itcportal.com/about-itc/shareholder-value/annual-reports/itc-annual-report-2013/content.aspx
( June,2013)
http://www.citehr.com/29099-hr-issues-retailing-business-plan.html
(June,2013)
http://www.scribd.com/doc/82186216/Indian-Pen-Industry-Project
(n.d)
http://informahealthcare.com/doi/abs/10.1080/01421590020031066
QUESTIONNANIRE
I have undertaken a project on A STUDY OF THE CONSUMER BUYING
BEHAVIOR OF ITC CLASSMATE PEN. The information provided by you in
response to this questionnaire will be effectively used for
developing this study and will help in a significant manner for my
personal appraisal at ITC. The data will be kept confidential and
will be used for academic purpose only.
Consumer Buying Behavior Questionnaire
Name -----------------------------
Age Group:
(a ) 15-20 [ ] (b)20-25 [ ] (c) 25-35 [ ]
(d) 35-50 [ ] (e) Above 50 [ ]
Place______________________
Occupation:
Student [ ] Business Person [ ]
Regular Employee [ ] Others [ ] _____________
Q 1). Which type of Pen do you currently use?
a)Ball Pen [ ]b)Gel Pen [ ]
c)Ink Pen [ ]d)Premium pen [ ]
Q 2). Which Brand Of Ball Pen do prefer to write?
a) Classmate[ ]b) Reynolds[ ]c)Cello[ ]
d) Lexi[ ]e) Linc [ ] f) Italia [ ]
g) others____________
Q 3). What is the price range in which you generally used to buy
a pen?
( a) Below Rs 5 [ ] (b) Between Rs 5-Rs 10 [ ]
(c) Between Rs 10-Rs 15 [ ] (d) Between Rs 15-Rs 20 [ ]
(d) Above 20[ ]
Q 4).From where do you prefer to buy pen?
(a) Stationary shops [ ] (b) Super market [ ]
(c) Shopping malls [ ] (d) Others____________
Q 5). Which Characteristics of Pen Influence your Buying
Decision?
a )Smoothly writing [ ]b)Grip[ ] c)Price[ ]
d)Long-Life[ ] e)Brand Name [ ]
Q 6). Which Advertising Media Influences You The Most?
a)TV Advertisements[ ]b)Banners & hoarding[ ]
c)Newspapers & Magazines[ ]d)Internet[ ]
Q 7). Is your buying decision influence In-Shop
advertisements?
a)Yes []b)No[]
If Yes, Which influences the most?
a)Posters [ ] b) Hoardings[ ]c)Pen Stands[ ] d)Stickers
Others__________________
Q 8). Who influence your buying decision most?
Parents[ ] b)friends[ ] c) colleagues[ ] d)sales person[ ] e)
others [ ]
Q 9). Do You Choose Only One Brand?
a)Yes []b)No[]
If Yes, Which brand?
a) Classmate[ ]b) Reynolds[ ]c)Cello[ ]
d) Lexi[ ]e) Linc [ ] f) Italia [ ]
Q10) Why do you purchase the same brand?
a) High Quality[ ] b) Brand Image[ ] c) Easy Availability [
]
d)Value for money[ ] e)others____________
Q 11).Rank the brands of pens according to your preference from
1-5?
Classmates[ ] Cello[ ], Reynolds[ ], Lexi[ ], Linc[ ], Italia[
]
Q 12) Number of pen usually buy in a year?
a)less than 2[ ] b) 2-5 [ ] c)5-10 [ ] d)more than 10[ ]
Q 13). Do You Refill Your Pen regularly?
a)Yes b)No
If No, Why
a)Pen Cost Is Negligibleb)Replacement results into Poor
Performance
c)Refill Is Unavailable
d) Specify If Others,______________
Q14) Have you purchased classmate pen?
a)Yes []b)No[]
Retailers Questionnaire
Name of the store: ___________________________
Location:_______________________________
Contact No:_____________________________
Type of store
a) Stationary store [ ] b) Department store[] c) Supermarket [
]
d) Malls [] e) others______________
Average monthly Sales:
a) less than 1 lakh[ ] b)1-3lakh [ ] c)3-5lakh [ ]
d) 5-10lakh[ ] e) above 10 lakhs[ ]
Q1) In which price range you sell maximum pens?
a) Less than 7Rs[ ] b)7-10 [ ] c)10-15[ ]
d)15-25 [ ]e)Above 25[ ]
Q 2) Which type of pen you sell the most?
a)Ball Pen [ ]b)Gel Pen [ ]
c)Ink Pen [ ]d)Premium pen [ ]
Q3) Maximum sales under the price range between Rs5-Rs.20 are
for which brand of pens? (Rank in order of sales)
(a) Classmate [ ] (b) Reynolds[ ]
(c) Cello[ ] (d) Lexi [ ] e)Linc [ ]f)Flair[ ]
(g) Others[ ] (please specify)___________
Q4)-Sales of pens between the ranges of Rs5-Rs.20 is high during
which period of time?
(a) High during exams [ ] (b) Stable throughout the year [ ] (c)
When new Schemes are introduced[ ]. (d) School opening time[ ]
Q5)-Please tick the brands of pen you keep in your store
a) Classmate [ ] b) Reynolds[ ]c) Cello[ ] d) Lexi [ ]
e) Linc [ ]f)Flair[ ] g) Italia[ ]h)Lexor [ ] i)Win[ ]
Q6)-When people buy pens what among the following options do
they prefer?
a )Smoothly writing [ ] b)Grip[ ] c)Price[ ]
d)Long-Life[ ] e)Brand Name [ ] f)Looks[ ]
Q7 ) Your influence towards customer in their buying
decision?
a)High b)Average c)Low d)Nil
Q8) What motivate you to push the products more to
customers?
High margin [ ] b)Schemes[ ] c)Quality of products [ ]
d) Others__________
Q9) How often you replenish your stocks?
a)every week[ ] b)once in two week[ ]
c) once in a month [ ]
d)more_________
Q10)Do you think buying decision are influenced by In-Shop
advertisements?
a)Yes []b)No[]
If Yes, Which influences the most?
a)Posters [ ] b) Hoardings[ ]c)Pen Stands[ ] d)Stickers
Others__________________
Q11) For non-brand loyal customers, which brand you suggest
most?
a) Classmate [ ] (b) Reynolds[ ]
(c) Cello[ ] (d) Lexi [ ] e)Linc [ ]f)Flair[ ]
Q12) What make you to do so?
a)High margin[ ] b)Schemes[ ] c)Quality of products[ ]
d)Brand image [ ] others[ ] ____________
Q13)Do you have classmate pen in your store?
a)Yes []b)No[]
If Yes
What makes classmates to sell more?
a) Improve quality b) better margin c) more advertisement
d) Better availability e) others_____________
If No
Are you interested to sell classmate pen?
a)Yes []b)No[]