MARKET RESEARCH PROJECT ON WHAT FACTORS DRIVE SALES OF BISCUIT

BY
Aanchal Luthra (FT161003)
Ankush Ballal (FT161019)
Devankshi Prakash (FT161033)
Manu Chugh (FT161049)
Poornima Venkatesan (FT161064)
Senoj Jones (FT161079)
Surbhi Vyas (FT161093)

GROUP 3, Section 1

You gotta risk it to take the biscuit

Introduction:
Biscuits are one of the fastest moving packaged food categories in the retail channel. It is registered as an easily available and
affordable type of food and forms an integral part of day-to-day life not only in India, but also in many parts of the world. In the
early 19th century, people perceived biscuits as easy-to-carry and long lasting food and used it only during long journey. As time
passed, people started consuming biscuits to get instant energy. It also served as a glucose supplement for the ill. In the recent
decades, biscuit industry has grown leaps and bounds in the national bakery scene. Today, it not only serves as a snack along
with tea or coffee, but it is also categorized according to needs and preference of people. From sweet to salt, simple to exotic,
simple snack to healthy food, we get biscuits in lot more varieties and brands in todays market than we did earlier. Biscuit
market is growing at a rate of 9% annually and 20.5 Lakh metric tons of biscuits were produced in the year 2011-2012. It is
therefore important for a biscuit company to understand the factors that affect the sales of their product. This market research is
conducted to determine the factors that influence the purchase of biscuits and analyze these factors and their effects on
the sales.

Literature Review:
A research conducted by Britannica to identify consumer preference [1] like taste, awareness about brand, frequency of purchase
and satisfaction found that homemakers are always in a better position to buy the house requirements. They also found that
advertisement and monthly income affects the buying behavior of consumers. At the end, they were able to find out the taste
which most consumers prefer.

A research Taking the Biscuit[2] examines the popularity of biscuits and cakes categories for Irish customers to satisfy their
snacking requirements.
Another study was conducted in Portugal, with children, to find the effect of packaging in consumer behavior. They found that
packaging can be a differentiating factor at the point of purchase. Also it is important not to overuse information available on the
packaging since it could lead to a negative impact on the product (Dilution effect )[3]. However, when it comes to nutritional
information that is displayed, a research conducted by Carnage et al[4] says access to nutrition information at the point of
purchase may empower customer decisions regarding food selection, and lead to higher satisfaction and product ratings. Another
research by FRTP Research shows how tea biscuits are cash cows for the FMCG industry [5].
Qualitative Research Method:
We chose to conduct focus group for this research. Since this is not a sensitive topic or a B2B survey, we did not choose an
interview. A focus group with 9 participants were selected, with 5 boys and 4 girls. The insights we derived from the focus group led
us to the following variables and the questionnaires to measure those variables. All the responses were measured in Likert scale.

Dependent Variable:Sales of biscuits

I eat biscuits very frequently

The amount I spend on biscuits per week is approximately (In Rupees)

Independent Variables:1. Brand

I prefer branded biscuits over confectionery biscuits (Confectionery biscuits include local bakery biscuits like Jira biscuits, Atta
biscuits, etc)
I prefer biscuits of a single brand
I eat biscuits of my preferred category irrelevant of the brand

2. Price

Biscuits are good Value for money

If price of a biscuit increases, I switch to others
I search for discounts while shopping for biscuits

3. Taste

Biscuits are tasty

4. Advertising

Biscuit advertisements are valuable source of information

In general, information provided in biscuit advertisements are accurate
I easily get to know about promotional offers of biscuits through advertisements

5. Variety

I love flavours in biscuits (Chocolate, Vanilla, Milk, etc.)

I like eating biscuits having some variety (Cream biscuits, choco-chip biscuits, etc.)

6. Health factor

Biscuits have good nutritional value

I consider biscuits to be junk food
I reflect on the nutritional value of biscuit I eat

7. Packaging

Looks of the biscuit packet do not matter

Quality of packaging of biscuits is important

Covariates:

Age
Gender
Occupation
Annual income
Tendency to snack

Hypothesis:
Based on the independent variables we have come up with the following set of hypothesis
H1: Brand of a biscuit influences its sales
H2: Price has an influence in the sales of biscuits (frequency of purchase and amount)
H3: Taste of the biscuit influences its sales
H4: Advertising affects sales
H5: The more variety the biscuit has, the more it is sold.
H6: The Health factor of a biscuit influences its sales.
H7: Packaging of the biscuits(neatness and attractiveness) influences sales

Reliability
Scale: Health
Case Processing Summary

Cases

Valid

N
257

%
98.8

Excludeda

1.2

Total

260

100.0

a. Listwise deletion based on all variables in the procedure.

Reliability Statistics
Cronbach's Alpha

N of Items

.569

We deleted item 3 to get a higher cronbach alpha

Reliability
Case Processing Summary
N
Valid
257
a
Cases
Excluded
3
Total
260
a. Listwise deletion based on all variables in the procedure.
Reliability Statistics
Cronbach's Alpha

N of Items

.764

%
98.8
1.2
100.0

Scale: Variety
Case Processing Summary

Cases

Valid

N
257

%
98.8

Excludeda

1.2

Total
260
a. Listwise deletion based on all variables in the procedure.

100.0

Reliability Statistics
Cronbach's
N of Items
Alpha
.614
2
Item-Total Statistics
Scale Mean if Scale
Corrected
Item Deleted Variance
if Item-Total
Item Deleted Correlation
V1 I like eating biscuits
3.81
having some variety
V2 I love flavours in
3.84
biscuits

Cronbach's
Alpha if Item
Deleted

1.360

.444

1.197

.444

Reliability
Scale: Price
Case Processing Summary

Cases

Valid

N
257

%
98.8

Excludeda

1.2

Total

260

100.0

a. Listwise deletion based on all variables in the procedure.

Reliability Statistics
Cronbach's
N of Items
Alpha
.791
3
Item-Total Statistics
Scale Mean if Scale Variance Corrected Item- Cronbach's
Item Deleted
if Item Deleted Total
Alpha if Item
Correlation
Deleted
P1 Biscuits are good Value
5.84
for money

3.486

.673

.674

P2 price of a biscuit
increases, I switch to 6.28
others

3.532

.657

.691

P3 I search for discounts

6.28
while shopping for biscuits

3.562

.573

.783

Reliability
Scale: Advertisement
Case Processing Summary

Cases

Valid

N
246

%
94.6

Excludeda

14

5.4

Total
260
a. Listwise deletion based on all variables in the procedure.

Reliability Statistics
Cronbach's
N of Items
Alpha
.837
3

100.0

Item-Total Statistics
Scale Mean if Scale Variance Corrected Item- Cronbach's
Item Deleted
if Item Deleted
Total Correlation Alpha if Item
Deleted

Ad2 In general, information

provided
in
biscuit 5.28
advertisements are accurate

3.558

.738

.737

Ad1Biscuit advertisements
are valuable source of 5.29
information

3.659

.651

.822

Ad3 I easily get to know

about promotional offers of
5.20
biscuits
through
advertisements

3.537

.712

.762

Reliability
Scale: Packaging
Case Processing Summary

Cases

Valid

N
257

%
98.8

Excludeda

1.2

Total

260

100.0

a. Listwise deletion based on all variables in the procedure.

Reliability Statistics
Cronbach's
N of Items
Alpha
.631
2

Item-Total Statistics
Scale Mean if Scale
Corrected
Item Deleted Variance
if Item-Total
Item Deleted Correlation
Packaging 2 Reverse 3.87
look matter
Package 3 done Quality
of packaging of biscuits 3.02
is important

Cronbach's
Alpha if Item
Deleted

1.175

.461

1.210

.461

Reliability
Scale: Brand
Case Processing Summary

Cases

Valid

N
257

%
98.8

Excludeda

1.2

Total
260
100.0
a. Listwise deletion based on all variables in the procedure.
Reliability Statistics
Cronbach's
N of Items
Alpha
.614
3
Item-Total Statistics
Scale Mean if Scale
Corrected
Item Deleted Variance
if Item-Total
Item Deleted Correlation
BR1 I prefer branded
biscuits
over 5.50
confectionery biscuits
BR2 I prefer biscuits of
5.86
a single brand
BR3 Reverse code -I
eat biscuits of my
4.96
preferred
category
,irrelevant of the brand

Cronbach's
Alpha if Item
Deleted

3.103

.570

.281

2.632

.694

.044

5.252

.100

.888

Summary of Cronbach Alpha

Cronbach
Independent
Variables
Alpha
Health
Variety
Price

0.764
0.614
0.791

Advertisement
Packaging
Brand

0.837
0.631
0.614

After Reliability Analysis, we see that for every construct, we have obtained Chronbach Alpha greater than 0.6
therefore we conclude that all our constructs are valid to go ahead with further analysis.

Taste
IV 2 Health IV 3 Variety IV 4 Price IV
5
1Biscuits are average
average
Average
average
tasty
Pearson
1
Correlation
Taste
Sig. (2-tailed)
N
257
Pearson
.237**
Correlation
Health
Sig. (2-tailed)
.000
N
257
Pearson
.413**
Correlation
Variety
Sig. (2-tailed)
.000
N
257
Pearson
.338**
Correlation
Price
Sig. (2-tailed)
.000
N
257
Pearson
.042
Correlation
Ad
Sig. (2-tailed)
.498
N
257
Pearson
.166**
Correlation
Package
Sig. (2-tailed)
.008
N
257
Pearson
.311**
Correlation
Brand
Sig. (2-tailed)
.000
N
257
**. Correlation is significant at the 0.01 level (2-tailed).
*. Correlation is significant at the 0.05 level (2-tailed).

Ad IV
6
package
average

- Brand
Average IV 7

.237**

.413**

.338**

.042

.166**

.311**

.000
257

.000
257

.000
257

.498
257

.008
257

.000
257

.142*

.346**

.076

.069

.307**

257

.023
257

.000
257

.225
257

.269
257

.000
257

.142*

.334**

.111

.164**

.316**

.023
257

257

.000
257

.075
257

.008
257

.000
257

.346**

.334**

.054

.121

.958**

.000
257

.000
257

257

.386
257

.054
257

.000
257

.076

.111

.054

.015

.041

.225
257

.075
257

.386
257

257

.809
257

.508
257

.069

.164**

.121

.015

.107

.269
257

.008
257

.054
257

.809
257

257

.086
257

.307**

.316**

.958**

.041

.107

.000
257

.000
257

.000
257

.508
257

.086
257

257

As seen from the correlation matrix, since correlation is observed between independent variables, we have to
undergo factor analysis so as to reduce correlated variables to uncorrelated factors.
Factor Analysis
Communalities

Initial

Extraction

Taste

1.000

.506

Health

1.000

.298

Variety

1.000

.511

Brand

1.000

.907

Ad

1.000

.954

Package

1.000

.565

Price

1.000

.923

Extraction Method: Principal Component Analysis.

Total Variance Explained

Component
Initial Eigenvalues
Total

% of Variance

Extraction Sums of Squared Loadings

Cumulative %

1
2.575
36.791
36.791
2
1.080
15.428
52.219
3
1.009
14.412
66.630
4
.863
12.322
78.952
5
.835
11.927
90.879
6
.597
8.533
99.412
7
.041
.588
100.000
Extraction Method: Principal Component Analysis.

Total

% of Variance

Cumulative %

2.575
1.080
1.009

36.791
15.428
14.412

36.791
52.219
66.630

As observed, three factors have Eigen values greater than one and hence all the independent
variables are reduced to three factors .
Component Matrixa

Component
1

Taste

.553

.410

-.181

Health

.523

-.087

.128

Variety

.573

.424

.052

Brand

.880

-.364

-.029

Ad

.124

.236

.940

Package

.268

.648

-.270

Price

.898

-.342

-.017

Extraction Method: Principal Component Analysis.

a. 3 components extracted.

Component Score Coefficient Matrix

Component
1

Taste

.215

.379

-.179

Health

.203

-.081

.127

Variety

.223

.392

.051

Brand

.342

-.337

-.029

Ad

.048

.218

.932

Package

.104

.600

-.267

Price

.349

-.316

-.017

Extraction Method: Principal Component Analysis.

Component Scores.

Component Score Covariance Matrix

Component

1
1.000
2
.000
3
.000
Extraction Method: Principal Component Analysis.
Component Scores.

.000
1.000
.000

.000
.000
1.000

Since we have multiple factor loadings for few of the variables, we perform factor rotation for better classification
of our variables against the factors.
The table below depicts the component matrix after factor rotation
Rotated Component Matrixa
Component
1

Taste

.285

.652

-.021

Health

.508

.136

.147

Variety

.307

.611

.209

Brand

.945

.111

-.043

Ad

.040

.006

.976

Package

-.082

.744

-.070

Price

.951

.135

-.025

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 4 iterations.

Component Transformation Matrix

Component

1
2
3

.880
-.472
.045

.466
.844
-.267

.088
.255
.963

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.

Component Score Coefficient Matrix

Component
1

Taste
Health

.002
.223

.468
-.007

-.057
.119

Variety

.013

.421

.169

Brand
Ad
Package

.459
-.019
-.204

-.118
-.042
.626

-.083
.957
-.095

Price

.456

-.100

-.067

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.
Component Scores.
Component Score Covariance Matrix
Component

1
2
3

1.000
.000
.000

.000
1.000
.000

.000
.000
1.000

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.
Component Scores.

From the rotated component matrix, we observe that three constructs independent variables brand and price
are loaded the 1st component. Independent variables taste, variety, packaging are loaded on 2 nd component.
Independent variable advertising is loaded on 3 rd component. We depict the loading of variables on the
component if loading of a variable is >0.4.
The factor component 1 can be named Conscientiousness
The factor component 2 can be named Appeal on senses
The factor component 3 can be named Effect of advertising
Now the regression analysis is done with these three factors as independent variables and the dependent
variables as sales of biscuits

Regression Analysis:
Model

Variables Entered

Variables Removed

Method

Effect_Of_Advertising,
Appeal_To_Senses,
Conscientousnessb

Enter

a. Dependent Variable: The amount I spend on biscuits per week is approximately

b. All requested variables entered.

Model Summaryb
Model
R

R Square

Adjusted R Square

Std. Error of the

Estimate

1
.727a
.529
.523
20.653
a.
Predictors:
(Constant),
Effect_Of_Advertising,
Appeal_To_Senses,
Conscientousness
b. Dependent Variable: The amount I spend on biscuits per week is approximately

ANOVAa
Model
Regression

Sum of Squares

df

Mean Square

Sig.

121213.076

40404.359

94.723

.000b

Residual
107917.874
253
426.553
Total
229130.949
256
a. Dependent Variable: The amount I spend on biscuits per week is approximately
b. Predictors: (Constant), Effect_Of_Advertising, Appeal_To_Senses, Conscientousness
Coefficientsa
Model

Unstandardized Coefficients

Standardized
Coefficients

Sig.

Std. Error

Beta

(Constant)

140.109

1.288

108.754

.000

Conscientiousness

12.589

1.291

.421

9.753

.000

Appeal_To_Senses

15.172

1.291

.507

11.754

.000

Effect_Of_Advertising

9.210

1.291

.308

7.135

.000

a. Dependent Variable: The amount I spend on biscuits per week is approximately

Residuals Statisticsa
Minimum

Maximum

Mean

Std. Deviation

Predicted Value

67.77

196.57

140.11

21.760

257

Residual

-150.184

33.522

.000

20.532

257

Std. Predicted Value

-3.324

2.595

.000

1.000

257

Std. Residual
-7.272
1.623
.000
.994
a. Dependent Variable: The amount I spend on biscuits per week is approximately

257

Regression Analysis is done and we got adjusted R square of about 0.523. 52.3% variance in sales is explained by
the independent variables considered.
Conclusion:
All three factors are significant , and the Beta value for all the factors is positive
positively correlated with the dependent variable i.e. Sales of biscuits .

which depicts

factors are

Recommendations:
To increase the sales, manufacturers can concentrate more on the appeal of senses category. Hence improving
package design, variety and taste, improves the overall sales of biscuit
The next factor that contributes to the sales is Conscientiousness. Showcasing the product as a VFM, improves the
overall sales.
Advertisement affects the least in the sales of biscuit.
Hence, it can be seen that improving the qualities of product improves sales rather than focusing on
advertisement. Hence more budget should be allotted for product improvement to attract more sales.
Reference:
[1] A STUDY ON CONSUMERS' PREFERENCE TOWARDS VARIOUS TYPES OF BRITANNIA BISCUITS IN KANCHIPURAM TOWNS Dr. M.
Arutselvi, IJRIME Volume2, Issue5 (May-2012) ISSN: 2249-1619
[2]Taking the Biscuit. Checkout Jul 2014, Vol 40 issue 7, p36-40.
[3] Encouraging children to eat more healthily: The influence of packaging, CARLA PIRES* and LUSA AGANTE Journal of Consumer
Behaviour, J. Consumer Behav. 10: 161168 (2011))
[4] Effect of nutritional information in perceptions of food quality, consumption behavior and purchase intentions, Crange, david A.
Conklin, Martha T. Lambert, Carolyn U, Journal of food service business research. 2004, Vol7 Issue 1, p43-61. 19p
[5] How the tea biscuit category remains the cash cow for the FMCG companies like Britannia, parle and ITC., FRPT-FMCG Snapshot.
4/27/2014, p28-30. 2p.