Consumer Buying Behaviour toward

FMCG (Fast Moving Consumer Goods)

products
Presented by-

Flow of Presentation
Introduction of the problem
Management Decision Problem
Consumer Research Problem
Objective of the Research
FMCG Industry
PESTLE Analysis of FMCG Industry
SWOT Analysis
Consumer Decision making Process and Attributes
Methodology
Analysis and Interpretation of the results
Motivation factors of Consumer towards FMCG Products
Perception building of Consumer towards FMCG Products
Attitude of Consumer towards FMCG products
Limitations
Conclusion

Introduction of the Problem

A multinational FMCG Company is planning to

establish their business operations in India.

Management Decision Problem

How to capture the market share in FMCG sector?

Consumer Research Problem

To determine the behavioural factors of the

consumer related to buying of FMCG products.

Research Objectives
To identify the factors that affect buying behaviour of
consumers with respect to FMCG products.
To understand the impact of external factors (like firms
marketing efforts, sociocultural environment etc.)
To understand the impact of psychological field
(attitude, motivation, perception etc.) in decision
making process of consumer.

FMCG Industry
THE FMCG MARKET HAS THREE MAIN SEGMENTS
FMCG

Food & beverages

Health care

Household and Personal care

18%*

32%*

50%*

OTC products and ethicals

Oral care, hair care, skin care,

cosmetics/deodorants, perfumes,
feminine hygiene and paper
products, Fabric wash, household
cleaners

Health beverages, staples/cereals,

bakery products, snacks,
chocolates, ice cream,
tea/coffee/soft drinks, processed
fruits and vegetables, dairy
products, and branded flour

Source: Dabur, TechSci Research

Notes: OTC is over the counter products; ethicals are a range of pharma
products,
* As on September 2015

FMCG Industry
THE URBAN MARKET ACCOUNTS FOR A MAJOR CHUNK OF
REVENUES

Urban/rural industry break-up (2015)

The urban segment is the largest contributor to the sector,

accounting for around 65 per cent of total revenue and had
a market size of around USD20.74 billion in 2015
Semi-urban and rural segments are growing at a rapid pace;
they currently account for 35 per cent of revenues
35%

In the last few years, the FMCG market has grown at a

faster pace in rural India compared with urban India
FMCG products account for 50 per cent of total rural
spending

USD47.3
billion

Urban
65%
Rural

Source: Emami, TechSci Research

FMCG Industry
FOOD AND PERSONAL CARE
Household and Personal Care products are the largest FMCG segment, constituting around 50 per cent of the total market,
followed by health care products (32 per cent)
In 2015-16, the market for packaged atta reached USD1,2 billion and expected to reach USD2.5 billion in 2019-20
In 2015, biscuits market reached to USD4.1 billion. Britannia has 28 per cent market share in terms of value.
Soft drinks market in India reached around USD10.64 billion in 2015. In 2015, carbonated drinks stood at USD4.09 billion
and fruit juice market stands at USD1.31 billion

Revenue of few top selling FMCG (USD billion), 2015

Biscuits

1.23
1.64

Refined Oil*

4.09

Non Refined Oil*

Salty snacks

1.97

Toilet Soaps
2.90

2.16

Washing Powder
Chocolates
Packaged Atta

2.13

2.20
Source: Dabur, AC Nielsen, TechSci Research
Notes: * Data is for 2013

RKET SHARE OF COMPANIES IN A FEW FMCG CATEGOR

Market leader

Others

Hair oil

29%*

17%

Shampoo

47%

27%

Oral care

54.9%*

30%

13%*

Skin care

54%

12%

3%

Fruit juice

55%

30%

Source: Industry estimates

*: FY16

FMCG Industry Growth in India

This statistic shows the size of the fast moving consumer

goods market (FMCG) in India from 2003 to 2015. In 2007,

India's FMCG market was valued at 18 billion U.S. dollars,
up from 11.6 billion U.S. dollars in 2003.

PESTLE ANALYSIS
Political :-

Tax Structure: Complicated tax structure, high in direct tax and changing tax
policies are challenges for this sector.
Infrastructure Issues: Performance of FMCG sector is very much dependent on
government spending on Agricultural, Power, and Transportation Infrastructure.
Economical:-

Inflation
Exchange Rate:- This shows that what is the exchange rate or foreign
currency rate. If exchange rate is higher more amount is paid on import of
goods & if it lowers less amount is to be paid & on the other hand if it is higher
the amount received will be more & if it is lower the amount received will be
low.

 Social Factors:-

Change in consumer buying power

Change in Lifestyle
Rural focus
Technology:-

Organic food coming in the market due to technology upgradation

E-commerce sites like big basket, Amazon, Flipkart has also become a part of FMCG
buying centres
Legal Factors:-

Consumer protection
Environmental factors:-

Recycling of waste products

Eco-packing of FMCG products that doesnt harm the nature

SWOT Analysis

STRENGTHS

WEAKNESSES

1. Low operational costs

2. Presence of established distribution
networks in both urban and rural areas
3. Presence of well-known brands in FMCG
sector

1. Lower scope of investing in technology and

achieving economies of scale, especially in
small sectors
2. Low exports levels
3. Counterfeit Products. These products
narrow the scope of FMCG products in
ruraland semi-urban market.

OPPORTUNITIES

THREATS

1. Untapped rural market

2. Rising income levels, i.e. increase in
purchasing power of consumers
3. Large domestic market- a population of over
one billion.
4. Export potential and High consumer goods
spending

1. Removal of import restrictions resulting

in replacing of domestic brands
2. Tax and regulatory structure
Source:
http://www.cii.in/PolicyAdvocacyDetails.aspx?
enc=pqzPog

Consumer Decision Making Process

Attributes

Packaging

Logo

Brand image

Ability to Distinguish

Advertisements

Celebrity endorsement

Brand name

Past experience

Quality

Trustworthiness

Positioning

Repurchase

Referrals

Availability

Price

Satisfaction

Methodology
Research Instrument: Structured Questionnaire
Tools used for analysis: SPSS, Excel
Sampling Plan
1. Sampling

Unit:

individuals

products
2. Sampling
Technique:
(Convenient Sampling)
3. Sample size: 169

who

buy

existing

Non-probability

FMCG

sampling

Classification of Data
Female
14%

Male

21%
31%

27%
38%

69%

Gender
Age of
Respondent

Interpretation of Data
90

Skin Care

80
70

Quality
Brand
Image

Garnie Himaly
Ponds
r
a
Nivea
77

36

27

30

60
50
40
30

79

18

34

24

20
10

Price
Affordable

37

53

44

36

Packaging

60

70

33

Ponds
Garnier
Himalya
Nivea

Interpretation of Data
Soaps Attribute

Bathing Soap
80
70

Quality
Brand
Image
Price
Affordabl
e
Packagin
g

Medimi
Dove Pears Cinthol Dettol
x
57

36

27

30

20

60
50
40
30

59

18

34

24

20

20
10

27
40

23
70

36
33

46
7

38
20

Dove

Pears

Cinthol

Quality
Price Affordable

Dettol

Brand Image
Packaging

Medimix

Interpretation of Data
70
60

Toothpaste

50
40

Dabur Colgat Pepsode Closeu Promis30

Red
e
nt
p
e
20

Quality
Brand
Image

18

42

60

50

20
10

15

18

34

24

11

Price
Affordable

50

28

60

20

12

Packaging

50

50

55

10

Dabur Red
Colgate
Pepsodent
Closeup
Promise

Interpretation of Data
80

Hair
Shampoo

70
60
50

Quality
Brand
Image

Head &
Shoulders

Clinic
Plus

Panten
e
Vatika

70

35

60

55

45

60

10

40
30
20
10
0

Price
Affordable

42

28

45

65

Packaging

49

51

43

27

Head &
Shoulders
Clinic Plus
Pantene
Vatika

Interpretation of Data
Detergent

Surf

Tide

Ariel

80

Rin Wheel

70
60

Quality
Brand
Image
Price
Affordable

70

Packaging

32

58

50

24

28

44

35

39

40

35

38

65

28

29

30

64

39

45

18

20

The above data shows that customer buying

behaviour changes with the attributes

Quality
Brand Image
Price Affordable
Packaging
#REF!

10
0

Surf

Tide Ariel

Rin Wheel

Reliability Tests

Hypothesis
Hypothesis 1:

H1: there is relationship between Buying Behavior and Packing color

H0: there is no relationship between Buying Behavior and Packing color

the table of correlations. Where two variables buying behavior and Packing color are

positively correlated (r= .591, p = .000). There is moderate relation between these two
variables which is significant. We will accept H1 and reject H0.

 So we can say that the attractive packaging color can attract consumer. Consumer likes the colored

packaging. It also implies that using attractive colors in packaging we can grab customer attention.
Hypothesis 2:
H1: there is relationship between Buying Behavior and Background of Packing.
H0: there is no relationship between Buying Behavior and Background of Packing.

 Where two variables buying behavior and Background of Packing are positively correlated (r= .554,

p = .000). There is moderate relation between these two variables which is significant. We will accept
H1 and reject H0.
It mean that the customer can adopt product on the behalf of its packaging background. This result is
also useful to marketer so that they create products with best possible background image.
Hypothesis 3:
H1: there is relationship between Buying Behavior and Quality of Packing.
H0: there is no relationship between Buying Behavior and Quality of Packing .

 H1 ACCEPT H0 REJECTED
The results clears that the consumer also evaluate the products on the behalf of its packaging quality.

The better quality of package is proffered by customer.

Hypothesis 4:
H1: there is relationship between Buying Behavior and Font Style.
H0: there is no relationship between Buying Behavior and Font Style.

H1 is accepted and H0 is rejected

 H1 :- There is significant difference between customer buying behaviour towards various product

buying attributes
H0 :-There is no significant between customer buying behaviour towards various product buying
attributes

 The significant level in ANOVA table shows that the combination of

variables significantly predicts the dependent variable

The levels of packing color, back ground of packing, quality of

packing, font style, wrapper design, printed information and

innovative packing are : 0.003, 0.005, 0.001, 0.004, 0.004, 0.002, and 0.003 respectively.
This test shows that the coefficients of the predictor are statistically

significant at less than five percent level of significance. So we will

reject Ho and accept H1.

Motivation factors towards FMCG

products

11%

22%

46%

21%

Health Conscious
Beauty Attributes
Taste
New Products in same
segment,Attractive
Advertisement

Arousal of Motives
Needs

Factors

Percentage

Physiological

Taste

22%

Emotional

Health Conscious

46%

Cognitive

Beauty Attributes

21%

Environmental

New Products in same

segment, Attractive
Advertisement

11%

Perception of Consumer towards FMCG

Products
Perceived Price

Perceived Quality

Perceived Risk

Perceived
Perceived Value
Value

Attitude of Consumer towards FMCG Products

Demographic
Factors
Income, Age
Perceived
Quality
Value
Risk

Perceived
Price
+
Brand Image

Dissatisfacti
on

Satisfaction

ATTITUDE
ATTITUDE

Purchase
Purchase
Intention
Intention

Limitations of Research
Respondent selection error as time and resources are

limited.
Data analysis error as we have restricted skills and
resources in analysing data.
Respondent error.
Sampling frame may not be appropriate.

Recommendations
Culture difference does have an impact on companies initiatives to design

the product.
Company must keep in mind all the parameters of packing, protection and
promotion of a product.
Some companies do the change in packing as to increase their market share.
Other important/noteworthy aspects:
1. Product differentiation
2. Market segmentation
3. New product introduction
4. Pricing
5. Promotion.

THANK YOU