k.ganesh kumar

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ARESEARCH REPORT

ON

A Study on Consumer Perception as the Pre-Purchase Behavior

towards Personal Care Products in the Markets of Durg and Bhilai.

Submitted in partial fulfillment for the award of the degreeMaster of Business Administration

Chhattisgarh Swami Vivekananda Technical University, Bhilai

Submitted by,K. Ganesh Kumar

MBA 2nd Semester[Session 2010-2011]

Approved ByDr. Sumita Dave

HOD

Guided ByMr. Saket Ranjan Praveer

Sr. Associate ProfessorMBA (SSMV)

Shri Shankaracharya MahavidyalayaJunwani, Bhilai (C.G.) - 490020


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CERTIFICATE

This is to certify that the project A Study On Consumer Perception As The Pre-

Purchase Behavior Towards Personal Care Products In The Markets Of Durg And

Bhilai. submitted to Shri Shankaracharya Mahavidyalaya, Bhilai in partial fulfillment of

the requirement for the award of Master of Business Administration (MBA) is an original

work carried out by Mr. K. Ganesh Kumar a student of MBA II Sem, under my

supervision and guidance.

Place: Durg Saket Ranjan Praveer Date: Sr. Associate Professor

SSMV, Bhilai

Shri Shankaracharya MahavidyalayaJunwani, Bhilai (C.G.) 490020

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DECLARATION

I, K. Ganesh Kumar, a student of MBA II Semester 2010, at Shri Shankaracharya

Mahavidyalaya hereby declare that this Project Report under the title A Study on

consumer perception as the Pre-purchase behavior towards personal care

products in the markets of Durg and Bhilai. is the record of my original work under

the guidance ofMr. Saket Ranjan Praveer. This report has never been submitted to

anywhere else for award of any degree/diploma.

Place: Bhilai K. Ganesh Kumar

Date: MBA II Semester

3


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ACKNOWLEDGEMENT

No great task can be completed successfully without suitable functional

environment and proper guidance of the eminent personalities on the subject. I am

really indebted to my teacher of Management Department Mr. Saket Ranjan Praveer

(Faculty & research guide), under whose guidance we learnt various subjects of

Management and reach the stage of preparing this research report. I also convey my

sincere gratitude to other faculty members of SSMV for their kind support. I extend my

warm and sincere thanks to respondents of Durg, who have given their precious time to

fill the questionnaire which helped me to reach the conclusions. I feel proud to prepare

this research report under the able guidance of all eminent and renowned personalities

who provide their valuable guidance during the preparation of this research report. I

hope it will prove to be an important study on the consumers preferences towards the

FMCG sector.

Place: Bhilai K. Ganesh Kumar

Date: Enrollment No. AG8490

MBA II Semester

4

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TABLE OF CONTENTS

i. CERTIFICATE

ii. DECLARATION

iii. ACKNOWLEDGEMENT

iv. TABLE OF CONTENTS

1. INTRODUCTION

2. LITERATURE REVIEW

3. RESEARCH METHODOLOGY

4. DATA ANALYSIS AND RESULTS

5. INTERPRETATION OF FINDINGS

6. RECOMMENDATIONS

7. LIMITATIONS

8. CONCLUSION

vi. REFERENCES

vii. APPENDIXES

Employee

H3


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CHAPTER 1:-INTRODUCTION

The Indian personal care industry is estimated at Rs 170 billion. The industry is

divided into fabric wash, personal wash, hair care, oral cares, skin care, colored cosmetics,

mens toiletries and fragrances. Most segments of this industry are going through a decline

in 2002 with several leading players reporting lower sales in 2002 due to lower volumes as

well as lower realization. The next phase of growth has to come from the rural market as

the urban markets are near saturation levels in terms of penetration. The industry has a low

entry barrier and competition is severe. Besides the large multinational players, there are

some leading domestic players as well as the huge unorganized players. Though most of

the market share is with the larger players, companies vie for the marginal market share.

Cheaper imports and duplicate products are also affecting the major players. Companies

have been adopting promotion schemes to dole out freebies and repackaging products in

smaller packages to cater to a wider consumer base are some recent trends. The way

ahead for the personal care companies is to introduce new and better product, improve

penetration, and make the consumer trade up in price and quality. Rural marketing will be a

major thrust area for all companies.

This study is been done to analyze the major factors which emphasis the consumers

while purchasing personal care products, The current survey aims to combine information

from the literature on the consumer perception, fate and effects of factors on intention of

consumers while purchasing personal care products.

Here is an attempt to know the perception of consumers towards personal care

products in Durg and Bhilai. In this research I have tried to find out the impact of various

factors on the purchase intention of the consumers.

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Contributions of this study

The purpose of this report is to provide a background understanding of what factors

are considered by the consumers to know the perception towards personal care product.

To prepare the report, an extensive literature based on factors of consumers perception

towards personal care product has been done.

With the help of this research i have tried to find out the significant impact of some

factors such as Price, Quality, Convenience and Brand on the purchase intention of

consumers while purchasing personal care product. In this research as per the time

limitation I have done the work in following steps

1. I have identified some general factors which affects the purchase intention of

consumers while purchasing personal care product.

2. According to these factors I have made questionnaire and done the survey in the

market of Bhilai and Durg.

3. There was a problem of time limitation so I have done the survey with the sample

size of 100 respondents.

4. For the analysis of data I used Factor Analysis and Regression. After the analysis of

the data I found that price, quality, Convenience, brand is the major factor which

significantly affects the purchase intention of consumers while purchasing personal

care products.

Analysis of the results of the research should go significantly beyond simple graphs,

tables, and analysis of variance. The goal is to identify characteristics of buyers

satisfaction level regarding various features that can be helpful in differentiating among

groups of consumers with different beliefs, feelings, intentions, and buying behaviours,

especially regarding personal care product.

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INDUSTRY PROFILE

India is one of the largest emerging markets, with a population of over one billion.

The Indian personal care industry is estimated at Rs 170 billion. The industry is divided into

fabric wash, personal wash, hair care, oral cares, skin care, colored cosmetics, mens

toiletries and fragrances. India is fourth largest economics in the world in terms of

purchasing power and has a strong middle class base of 300 million. Around 70% of total

households in India reside in the rural areas. The total number of rural households is

expected to rise from 135 million in 2001-02 to 153 million in 2009-10. This presents thelargest potential market in the world. The annual size of the rural FMCG market was

estimated at around us$ 10.5 billion in 2001-02. With growing incomes at both the rural and

the urban level, the market potential is expected to expand further.

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CHAPTER 2:-LITERATURE REVIEW

A literature review is a body of text that aims to review the critical points of

current knowledge and ormethodological approaches on a particular topic. Literature

reviews are secondary sources, and as such, do not report any new or original

experimental work. Most often associated with academic-oriented literature, such as

thesis, a literature review usually precedes a research proposal and results section.

Its ultimate goal is to bring the reader up to date with current literature on a topic and

forms the basis for another goal, such as future research that may be needed in the

area. A well-structured literature review is characterized by a logical flow of ideas;

current and relevant references with consistent, appropriate referencing style; proper

use of terminology; and an unbiased and comprehensive view of the previous

research on the topic.

Perception

Perception is a process by which individuals organize and interpret their

sensory perceives in order to give meaning to their environment. However, what one

perceives can be substantially different from objective reality. There need be, but

there is often, disagreement. For example, its possible that all employees in a firm

may view it as great place to work favorable working conditions, interesting job

alignments, good pay, excellent benefits, an understanding and responsible

management but, as most of us known, its very unusual to find such agreement.

[1]
http://en.wikipedia.org/wiki/Methodologicalhttp://en.wikipedia.org/wiki/Secondary_sourceshttp://en.wikipedia.org/wiki/Theseshttp://en.wikipedia.org/wiki/Logicalhttp://en.wikipedia.org/wiki/Citationhttp://en.wikipedia.org/wiki/Terminologyhttp://en.wikipedia.org/wiki/Secondary_sourceshttp://en.wikipedia.org/wiki/Theseshttp://en.wikipedia.org/wiki/Logicalhttp://en.wikipedia.org/wiki/Citationhttp://en.wikipedia.org/wiki/Terminologyhttp://en.wikipedia.org/wiki/Methodological


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Pre-Purchase decision

Pre-purchase behavior data is essential in understanding what buyers are

looking for and what in-person experiential marketing and merchandising tactics will

best inform and satisfy these decision-makers. Whether at a tradeshow, in a store, or

at other offline venues, more focus and attention must be paid to capturing data that

exposes customer behavior -- which products they looked at, which features they

spent time examining, what problems they are trying to solve.

Studies have shown that in the absence of comprehensible information,

customers determine their own baseline decision criteria for comparing products.

Whereas a manufacturer may have designed a product to include features relating to

performance, for example, a customer may overlook these features and focus on

form factor, or price -- unless these features, advantages, and benefits are exposed

to the customer in an articulate and effective manner. The purchase decision is a

critical milestone for everyone involved in the sales process. But learning about pre-

purchase behavior is equally important. Answering the question "Why did the

customer buy this product?" will eliminate guesswork, and will lead to long-term

successful customer relationships.

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Impact of various variables on purchase intention

Price

Price is the one element of marketing mix that produces revenue; the other

elements produce costs. Prices are perhaps the easiest element of the marketing

program to adjust; product features, channels, and even promotion take more time.

Price also communicates to the market the ongoing companys intended value

positioning of its product or brand. A well-designed and marketed product can

command a price premium and reap big profits. (Kotler & Keller, 2003, page 431).

Saxena Rajan (page-321) explains that to manufacture, price represents the

quality of money (or goods &services in a barter system) received by the firm or the

seller for its product. Price determines the capability of a customer to buy. Thus price

considered as

Price= (quality of money by the seller)/ (quality of goods & services received

by the seller)

Price impact refers to the correlation between an incoming order (to buy or to

sell) and subsequent price change. J.P. Bouchaud said that a potential powerful way

to assist consumers in making dynamic decision is to disclose price information to

them before they shop (Bouchaud, 2009).

Quality

Quality is a multidimensional concept that cannot be easily defined or

measured, a distinction can be made between objective quality and perceived

quality. Objective quality refers to the actual technical excellence of the product that

can be verified and measured (Monroe & Krishnan 1985). In contrast, perceived

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quality is the consumers judgment about a products overall excellence or superiority

(Zenithal, 1988).

The importance of perceived quality derives from its beneficial impact on

purchase intentions, although contradictory research findings have been reported in

the literature. Some scholars support a positive direct effect of perceived quality on

purchase intentions (Carman 1990; Bounding, satisfaction (Cronin & Taylor 1992;

Sweeney, Souter, & Johnson 1999) and yet others argue that both relationships exist

(Tsiaotso 2006). However, it is of note that the dual effect (direct and indirect) of

perceived product quality on purchase intentions has been found for goods, while the

single effects (direct or indirect) have been reported from studies focused on

services.

In the book Zen and the Art of Motorcycle Maintenance, a cult hero of college

students in an earlier generation literally went crazy trying to figure out the meaning

of quality. Marketers appear to use the word quality as a catchall term for good.

Because of its wide and imprecise usage attribute of quality threatens to become a

meaningless claim (Solomon, 2003, page-306).

Convenience

The consumer usually purchases convenience goods frequently, immediately,

and with a minimum of effort. Examples include tobacco products, soaps, and

newspapers. (Kotler, 12Ed, page-375)

Convenience is anything that is intended to save resources time, energy or

frustration. A convenience store at a petrol station, For example: Sells items that

have nothing to do with gasoline\petrol but it saves the consumer from having to go

to a grocery store.(Wikipedia\ convenience) Impact of convenience according to

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(journal of marketing management) states that there is a great impact of

convenience on purchase intention of consumer.

BRAND

A Name, Term, Sign, Symbol or Design & a Combination of them, intended

to identify the goods or services of one seller or group of sellers from those of

competitors (By American Standard Association)

Kotler, pg 276 had approached that Brand equity is the added value endowed

to product or services. A brand is said to have positive customer-based brand equity

when customer reacts more favorably to a product & the way it is identified as

compared to when it is not.

Branding is an important element in business. Without a brand, customers

have to explain to the sellers in detail about the products that they want, while sellers

may be confused or give the wrong products to the customers. Therefore, it can be

assumed that brand acts as a sign, name or symbol for the products and services.

The main aim of the brand is to identify the products or services of a seller or groups

of sellers and differentiate an offering of a seller from that of its rivals (Kotler).

(Halliday Jess, 29-Jul-2010) Branding and labeling have the most impact on

consumers buying decisions, followed by blind tasting. When a consumer is making

up their mind whether or not to buy a product they are not guided by its taste alone.

A number of extrinsic factors also vie for their attention, such as awareness of the

brand, labeling, price and origin. Kotler (pg 276) approaches brand equity from a

customer based perspective defining it as the differential effect of brand knowledge

on consumer response to the marketing of the brand.

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Hypothesis: -

H1: Price has a significant impact on consumer purchase intention while purchasing

personal care product.

H2: Quality has a significant impact on consumer purchase intention while purchasing


H3: Convenience has a significant impact on consumer purchase intention while

purchasing personal care product.

H4: Brand has a significant impact on consumer purchase intention while purchasing


Research Model and Conceptual framework

Price is taken as independent variable which has significant impact on purchase

intention of customers, as given in literature review J.P. Bouchaud said that a potential

powerful way to assist consumers in making dynamic decision is to disclose price

information to them before they shop.

Quality is taken as another variable which has significant impact on purchase

intention of consumers; the importance of perceived quality derives from its beneficial

impact on purchase intentions.

Convenience is taken as variable which has significant impact on purchase intention

of customers because convenience is anything that is intended to save resources time,

energy or frustration.impact of convenience according to (journal of marketing

management) states that there is a great impact of convenience on purchase intention of

consumer.

Brand is taken as independent variable which has significant impact on purchase

intention of customers (Halliday Jess, 29-Jul-2010) When a consumer is making up their

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mind whether or not to buy a product they are not guided by its taste alone. A number of

extrinsic factors also vie for their attention like brand, labeling and origin.

Figure 1

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CHAPTER 3:-RESEARCH METHODOLOGY

Research Methodology:-

Research Methodology is the way to systematically solve a research problem. In itthe various steps are followed that are generally adopted in the study along with the logic

behind them. It is a conceptual structure with in which the study is conducted. It constitutes

the blue print for the collection, measurement and analysis of data.

Causal research design has been taken to conduct the study. Data collection has

been organized through primary source for which questionnaire containing 7-point likerts

scale has been used. A convenience sampling has been used to collect data. 100

respondents were approached who were the users of personal care products. The samples

collected from the city of Durg and Bhilai.

Research Objectives:-

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

behavior.

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

purchase behavior.

Research Plan

Research Design Causal

Research Instrument Structured questionnaire

Measurement Scale 7 point Likerts Scales

Sample Plan

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Sampling Design Convenience

Sample Size 100

Sampling unit User of Personal care products

Demographics Age, Gender, Income, Occupation

Sample Location City of Durg and Bhilai

Data Collection:-

Primary Data Collection -

It was collected during the interaction with people through questionnaire and

personal interaction.

Secondary Data Collection -

The data collection was done through literature and information obtained

from various sources to increase the effectiveness of the research. On the other

hand, these are those which have already been passed through the statistical

process .Inputs were obtained from:

o Websites.

o Magazines.

o Books.

o Journals.

Questionnaire Design:-

It translates the information needed into a set of specific questions that the

respondents can and will answer.

CHAPTER 4:-DATA TABULATION AND ANALYSIS

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Factor Analysis:-

Factor analysis attempts to reduce the number of variables and discover the

underline constructs that explain the variance. It extracts the uncorrelated factors that

account for the largest portion of variance from an initial set of variables Correlation matrix

is used to discover the simple pattern in the pattern of relationships among the variable.

With the help of Factor Analysis found that quality and Brand were loaded in the same

column, thus by analyzing the central point of both the variable, Quality (x21, x22, x23) is

found to be lower than Brand i.e. (x41, x42, 43) thus quality has been eliminated from

observed variables and then the regression analysis is done on remaining variables i.e.

Price, convenience, Brand.

Regression Analysis

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Rotated Component Matrix

Component

1 2 3 4

Y1 0.295 0.140 0.900 0.039

Y2 0.246 0.071 0.912 0.007Y3 0.246 -0.028 0.871 0.050

X11 0.133 0.172 0.008 0.907

X12 0.105 0.168 -0.019 0.923

X13 0.149 0.218 0.117 0.855

X21 0.791 0.349 0.180 0.021

X22 0.848 0.254 0.192 0.026

X23 0.843 0.296 0.053 0.025

X31 0.134 0.892 -0.050 0.221X32 0.113 0.898 0.107 0.167

X33 0.088 0.892 0.080 0.176

X41 0.804 -0.090 0.346 0.182

X42 0.828 -0.095 0.304 0.169

X43 0.810 -0.064 0.231 0.298

Extraction Method: Principal Component Analysis.Rotation Method: Varimax with Kaiser Normalization.

a. Rotation converged in 6 iterations.


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Variables Entered/Removed

ModelVariables

EnteredVariables

Removed Method

1 X4, X3, X1a

. Enter a. All requested variables entered.

Model Summary

Model R R SquareAdjustedR Square

Std. Errorof the Estimate

1 0.497 0.247 0.224 1.21099

a. Predictors: (Constant), X4, X3, X1

ANOVA

Model Sum of Squares Df Mean Square F Sig.

RegressionResidualTotal

46.216 3 15.405 10.505 0.000

140.784 96 1.467

187.000 99

a. Predictors: (Constant), X4, X3, X1b. Dependent Variable: Y

Coefficients

Model

UnstandardizedCoefficients

StandardizedCoefficients

t Sig.BStd.

Error Beta

1 (Constant) 2.150 0.569 3.776 0.000X1 0.007 0.100 0.008 0.074 0.941

X3 0.072 0.099 0.070 0.730 0.467

X4 0.424 0.085 0.478 4.977 0.000

a. Dependent Variable: Y

Regression Analysis

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Regression is the determination of a statistical relationship between two or more

variables. In simple regression, we have four variables, three variable (defined as

independent) is the cause of the behavior of another one (defined as dependent

variable).Regression interpret what exists physically i.e., there must be physical way in

which independent variables x4, x3, x1 can be affected by dependent variable Y.

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

is significantly responsible for affecting purchase intention f consumers while purchasing

personal care product, that is brand. In the factor analysis test the coefficient value of brand

is 0.000 which is less than 0.05; the brand is a major factor which affects the consumers

perception as pre-purchase behavior towards personal care product.

The coefficient value of price is 0.941, quality is 0.467, which are greater than 0.05;

these four factors dont affects the consumers perception as pre-purchase behavior

towards personal care product.

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CHAPTER 5:-INTERPRETATION OF FINDINGS

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

significantly responsible for affecting purchase intention of consumers while purchasing

personal care product, that is brand.

2. In the factor analysis test the coefficient value of Brand X4 is 0.000 which is less than

0.05; the Brand X4 is a major factor which affects the consumers perception as pre-

purchase behavior towards personal care product.

3. The coefficient value of Price X1 is 0.941, Quality X2 is 0.467, which are greater than

0.05; these four factors dont affects the consumers perception as pre-purchase

behavior towards personal care product.

4. Coefficient value shows that most of the respondent highly considered brand while

purchasing personal care products.

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CHAPTER 6:-RECOMMENDATIONS

Since, there is a significant difference among the determinants so every determinant

is to be treated differently. As the consumers highly considered the factor Brand while

purchasing personal care product, so Brand will be given highest consideration while

developing market strategies.

The marketers should focus on branding strategies as the consumers consider it

while purchasing.

More of investments need to be made towards building brand.

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CHAPTER 7:-LIMITATIONS

This study is only modest attempt and not be claimed as comprehensive one, further

it is to be pointed that data are inebriation for the study and consequently the findings mode

out of it are reliable to the extent that the respondent have been for the right nourishing the

same.

During conducting this research I come across the following limitation: -

1. The research and survey was limited to only one city of Chhattisgarh.

2. The time available for conducting was not sufficient.

3. Respondents were least interested.

4. Since the sample size taken was very small, the conclusion cannot be generalized.

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CHAPTER 8:-CONCLUSIONS

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

of the consumers.

It can be said that the impact of other factors on consumer purchase intention is low

like Price, Quality, and Convenience.

The consumers, of personal care products are more inclined towards the highly

advertised brands available in the market.

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REFERENCES

Blackwell, R.D.; Mansard, P.W.; Engel, J.F. (2001). Consumer Behaviors (Ninth Edition).

Fort Worth:

Carman JM (1990). Consumer perceptions of service quality: An assessment of the

SERVQUAL dimensions. Journal of Retailing, 66(l), 33-55.

Cronin JJ & Taylor SA (1992). Measuring service quality: a re examination and extension.

En.wikipedia.org\wiki\convenience.

http://marketing-bulletin.massey.ac.nz Marketing Bulletin, 2005, 16, Research Note 4, Page

1 of 10

J.P.Bouchaud, capital fund management March 13, 2009

Kotler Philip & Keller Kevin lane, marketing management 12th Ed. Page-374, 2003

Kotler Philip & Keller Kevin lane, marketing management 12th Ed. Page-431,2003

Loudon, D.; Della Bitta. (1986). A. Consumer Behavior. Concepts and Applications, New

York:

Monroe KB & Krishnan R (1985). The effects of price on subjective product evaluations, in

Perceived Quality J. Jacoby and J. Olson (Eds). Lexington: Lexington Books, 209-232.

McGraw-Hill.

Solomon Michael. R. Consumer behavior 5th ed. (page-306)

Saxena rajan, marketing management 3rd Ed. Page-321

Tsiotsou R (2006). The role of perceived product quality and overall satisfaction on

purchase intentions. International Journal of Consumer Studies, 30 (2), 207-217.

Zeithaml VA (1988). Consumer perceptions of price, quality, and value: A means-end

model and synthesis of evidence. Journal of Marketing 52(July), 2-22.

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APPENDICES

QUESTIONNAIRE

STUDY ON CONSUMER PERCEPTION AS THE PRE-PURCHASE BEHAVIOUR

TOWARDS PERSONAL CARE PRODUCTS IN THE MARKETS OF DURG ANDBHILAI

I am a student of master of business administration at shri shankaracharyamahavidyalaya, Bhilai. As a part of my curriculum, i am conducting a study on CONSUMERPERCEPTION AS THE PRE-PURCHASE BEHAVIOUR TOWARDS PERSONAL CARE

PRODUCTS IN THE MARKETS OF DURG AND BHILAI. The data will be used exclusively foracademic purpose only, without disclosing your identity. I would be grateful to you for yourcandid responses. Please mark a tick () in your preferred box.

StronglyDisagree

Neutra

l

StronglyAgree

1.1 I have an intention to purchase personal care products1

1

2

2

3

3

4

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1.2 I am likely to purchase personal care products1

1

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1.3 My intention to purchase personal care products is high1

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2.1 I prefer price while purchasing personal care products1

1

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2.2Price is an important factor for me while purchasing personal care

products

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2.3 If I get considerable Price I purchase personal care product1

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3.1 I prefer quality while purchasing personal care products1

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3.2Quality is an important factor for me while purchasing personal care

products

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3.3 If I get good quality I purchase personal care products 11

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4.1 I prefer convenience while purchasing personal care products1

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4.2Convenience is an important factor for me while purchasing personal

care products

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4.3 If I find good convenience, I purchase Personal care product1

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5.1 I prefer Brand while purchasing Personal care products1

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5.2Brand is an important factor for me while purchasing personal care

products

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5.3 If I get good Brand I purchase Personal care products 11

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77

6 Personal Details

6.1 Name /Optional

6.2 Age o 60

6.3 Gender o Male o Female

6.4Annual Income

(Rs. Lakhs)

o 4.5

6.5 Occupation o Studento Business

Person

o Service

Persono Professional o Household

o Other

(Specify)

Thank you for your contribution

K.GANESH KUMAR

MBA-II, Semester

SSMV, Bhilai

k.ganesh kumar

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