Perception towards the Fast Moving Consumer Goods in Rural Market free essay sample

Keeping in view the frame of references the present paper is an attempt to study the factors affecting the purchase decision of consumers towards purchase of the Fast Moving Consumer Goods (FMCGs) and to recommend the policies which may be adopted by the advertisers to enhance awareness among the rural buyers. The study used primary data collected from a sample of 1000 rural consumers from the 40 villages of 04 districts of Haryana state with the help of a well-structured questionnaire by following „Foot-in-Door Strategy? (FIDS). And found that rural buyers perceived that TV commercials followed by print advertisements and word of mouth plays a significant role for taking the decision to purchase these FMCGs. We will write a custom essay sample on Perception towards the Fast Moving Consumer Goods in Rural Market or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Further, they consider their own experience, display at shops; incentive schemes for the purchase of these FMCGs, whereas they do not fully agree that advice of beautician influences their decision towards the purchase of these FMCGs. On the other hand, rural buyers perceived that social factors are no so strong that those may influence their decision to purchase these FMCGs. Hence, it may be recommended that the producers or marketers should frame ethical advertising strategies keeping in mind that rural people are fond of electronic and print media advertisements. Key Words: Frame of References, Foot-in-Door Strategy, FMCGs. Introduction As we know, consumers have different frame of references formed out of the information gathered from their experience. They try to fit the goods and services in these frames of references. If they do not fit they reject the  things. Many of these reference points are subconscious because they are deeply imbedded in the subconscious mind. It is important to have knowledge of assumptions and beliefs held by consumers. Some consumers may use price as an index of quality. They may declare a product or service as cheap if it sells at a price substantially below the level at which competitive brands are selling. Consumers make a number of assumptions regarding products, services and producers often without fact, e. g. The beer in pastel colour bottles is thought to be lighter and beer in the coloured bottles is considered stronger. Similarly, natural fabrics e. g. wool are considered better that synthetic; and the products 1 IJTMR www. ijtmr. com International Journal of Techno-Management Research, Vol. 01, Issue 02, September 2013 ISSN: 2321-3744 produced in one country are considered superior than produced in other country. Attributes and beliefs are closely related to attitude but harder to change than attitudes. Many times, they are obtained from previous generations and are implanted in an early age of person. People above certain group affiliations and their assumptions and beliefs are drawn from affiliations as in the case of a social class (Sumathi, et al. , 2003). REVIEW OF LITERATURE Sukato and Elsey (2009) examined the phenomena of male consumer behaviour in buying skin care products in Thailand. In order to cope with the research purpose, Fishbein and Ajzen? s theory of reasoned action model is employed as a theoretical framework and modified by adding the self-image construct. The results of the study confirm that beliefs, self-image, normative influences, and attitudes have impacts on purchase intention and purchase behaviour in buying skin care products among Bangkok male consumers and therefore, the modified theory of reasoned action is appropriate to explain male consumer behaviour in the purchase of specific cosmetic product in the Thai setting. Vani, et al. (2010) examined consumer behaviour in Bangalore city regarding toothpaste bands and found that consumer awareness of toothpaste is less in Bangalore city. Oral care market offers huge potential as penetration and per capita consumption of oral care product is very low in India. Further, the study found that brand image, advertising and offer play an important role in purchasing toothpaste, sometimes based on the offer the consumer compare with competitor product and select the best one. Product attribute also analyzed by the consumer for deciding a brand. Switching of one product to other company product is mainly based on advertisement, brand name, packaging availability and price rise. Sridhar and Mishra (2010) analyzed that the rationale and method for studying product adaptation in rural markets and concluded that the findings of the study are contrary to the general understanding that rural is perceived very differently and hence operationalized differently by different organization. However, the results show that contingency theory holds true in case of product adaptation in rural markets also. With the increase in executives? representation of rurality, product adaptation degree also increased. The study also found that the factors influencing the purchase decision of the respondents, consumers buying are influence the most by the product factor due to design, quality, durability, made from safe environment and product range but few respondents are not satisfied with the packaging, image and size of the product. Both the companies are almost on the same platform regarding the factors of competitive price, shape, design, Haats and mandis and message/languages/ presentation of advertisement. The consumers are showing their dissatisfaction for malls and super markets, greater mobility, shop is conveniently situated, and product display is attractive, value for price paid, cash discount and pricing policy. Lastly, the study concluded that in parameters like, image, shape and size, packaging, durability, small size products, low priced sample packets, price scheme, celebrity endorsement and use of transport like autos, camel carts, HUL has an edge over ITC. Vernekar and Wadhwa (2011) examined the consumer attitudes and perceptions towards eco-friendly products in FMCG sector and their willingness to pay on green products. The study revealed that the green products have substantial awareness among urban Indian customers and they are willing to pay something more on green products. The majority of customers considered that package is most important element of such products. Chandrasekhar (2012) analyzed the consumer buying behaviour and brand loyalty in rural markets regarding fast moving consumer goods and found that brand loyalty is more in Badangpet and Nadergul region and less in Chintulla in soaps category. In hair oil category, branded products usage is more in Badangpet and Nadergul villages and consumer prefer to purchase local brands in Chintulla village. It is also found that Vatika and Navratan hair oils dominate in Badangpet, Parachute hair oil in Nadergul and Gograda local brand and Dabur in Chintulla. In case of Biscuits category, consumers mostly buy in loose, which are available in nearby shops like Salt biscuits, Osmania biscuits etc. Parle-G and Tiger are mostly used brands in Badangpet. Tea is purchased in loose, which is available in local shops. The popular brands Red Label, Three Roses and Gemini are used in Badangpet village. Further, the study found that coffee consumption is very less or no consumption in Nadergul and Chintulla villages. In case of washing powder, Nirma dominate all the three selected sample rural markets regions. In remote area like Chintulla, Nirma sell Rs. 1 sachets. In washing soap category, Rin, 501, Nirma, XXX and Extra 3 IJTMR www. ijtmr. com International Journal of Techno-Management Research, Vol. 01, Issue 02, September 2013 ISSN: 2321-3744 Local Brand dominates all the three selected rural markets. It is also concluded that Ponds, Chintol and Santoor face powder dominated the market and Pond? s has dominated the market in consumption in Badangpet. In sum, the study also found that male members of the family are alone going to buy consumer products and women are not interested in shopping and do not come out from their houses frequently. Jain and Sharma (2012) analyzed the brand awareness and customer preferences for FMCG products in rural market of Garhwal region. The study found that average awareness of the respondents in the rural market is approximately 75 per cent, 70 per cent, 72 per cent, 64 per cent and 73 per cent in case of shampoo, washing powder, soap, tea, toothpaste respectively, which infers that people in the rural market have on an average awareness about most of the products. In the shampoo category, the study found that the respondents give 1st rank to Pantene and last rank to Chik; in case of washing powder, 1st rank to Surf Excel and last rank to Nirma; to soap category, 1st rank to Dettol and last rank to Rexona; in case of Tea, 1st rank to Tata tea and last rank to Maharani tea and in category of toothpaste, 1st rank to Colgate and last rank to Cibaca which infers that advertising and marketing activities have major influences in choices of people in rural market. The study further found that among various factors like quality, price, easy availability, family liking, advertisement, variety, credit attributes of brand preference; the quality is the first preference in case of brand choices and rural people give least preference to variety and credit attributes. It is also concluded that there is a positive impact of media on brand preference of FMCG products among consumers. Jayswal and Shah (2012) analyzed the effect of some selected FMCG product? s television advertisements with commonly used negative emotional appeals on cognitive message processing style of Indian house wives. The study revealing different effect of different advertisement with negative emotional appeals derived that advertising creative aspect has considered most important and it has been truly said that â€Å"what you say is equally important to how you say. † Through varied hypothesis developed by the researcher, the findings is negative emotional advertising appeal makes the cognitive response positive, helps to form positive attitude and this increases the customer intention to buy the brand. The different advertising themes have difference in their effect on individual perception. Prajapati and Thakor (2012) examined the competitive and innovative promotional tools used by toothpaste companies in rural market and its impact on consumer buying behaviour in Gujarat. The study found that rural consumers are more concerned about the quality, brand name of the oral care products purchased by them. Further, it was also found that once the rural consumers found that certain   brands are suitable to them, they do not change it easily due to influence of friends or social groups and lack of availability of their usual brands. In toothpaste category, Colgate and Close-up are the most favorite brands. Price, promotional schemes, color and availability of the product are more influencing factor when they buy the toothpaste. Rural consumers are generally following the instructions of the retailers for buying the toothpaste and also consider the promotional scheme when buy the toothpaste and the prices off schemes are the most influencing scheme to them. When there are special discount and dentist suggest them to purchase the toothpaste they definitely purchase it. Ranu and Rishu (2012) analyzed the scope of Ingredient branding in creating sustainable differentiation advantage for FMCG companies. The results of the study revealed that careful planning must be done before entering into a relationship in order to maximize the benefits of any ingredient branding strategy. Along with the costs involved in forming and maintaining the alliance, and the opportunity cost involved for the partnering firm, the consumer? Quality sensitivity and their ability to evaluate quality must also be considered. Firms considering an ingredient branding strategy must also evaluate the customer? s perception toward each brand prior to the alliance. The perceived fit of the products as well as the brands must be understood, and the level of customer familiarity with each brand must be gauged. This will help marketers in developing a successful Ingredient branding strategy, which builds on the strengths of the partnering brands and generates additional value for the consumer. Mishra, et al. (2012) examined the major dimensions of consumers? Perception about the benefits they derive from different types of sales promotion schemes in durable goods and to build a framework showing the valid relationships among all types of multiple consumer benefits of sales promotion in consumer durables. This exploratory study is mainly based on field survey carried out in India. The findings indicate that consumers perceive factors like savings, higher product quality, shopping convenience categorized as utilitarian benefits and value expression, entertainment, exploration categorized as hedonic benefits as primary reasons for taking advantage of various sales promotion schemes. Vaishnani (2012) examined and measured brand equity perception with reference to sales promotion schemes for selected FMCG products and it is concluded that there is no significant difference between of brand equity perception among gender as one of the demographic variables. Apart from it, it is concluded that there is significant difference between brand equity perceptions among various employment status. Adding to it, it is clear that self employed consumers compare to not employed 5 IJTMR www. ijtmr. com International Journal of Techno-Management Research, Vol. This is proven through study of FMCG data and it is shown that price promotions can be optimized to improve return without increased risk. After, reviewing the existing literature it is observed that the above studies have considered different factors a lot. However, these studies not focussed upon the purchase decision behaviour of rural areas. Consequently, the present study entitled â€Å"Customer’ Perception towards the Fast Moving Consumer Goods in Rural Market: An Analysis† may be conducted. Methodology and Objectives The present study is of exploratory, descriptive, pure and empirical in nature. The present research paper attempts to identify the factors affecting the purchase decisions of customers towards the purchase of FMCGs and to recommend the particular factors that should be considered most important for such type of decisions. To achieve the said objectives, only twelfth question item of the questionnaire (Total 16 question items) was used. The study used primary data collected with the help of a well-structured questionnaire by following „Foot-in-Door Strategy? (FIDS) (Malhotra, et al. , 2010). Further, to analyze and interpret the data  frequency distribution, mean, mode, percentage for exploratory data analysis and standard deviation (S. D. ), correlation, F-test (ANOVA) and factor analysis were used for confirmatory data analysis. In the light of the above mentioned objective the following hypothesis was that the rural buyers do not significantly differ demographically towards factors influencing their purchasing decision for fast moving consumer goods (H1). Sampling Plan The steps in the sampling design were as follows. The response on these factors were collected from rural buyers on 5-point Likert scale from 5 for strongly agree, 4 for agree, 3 for neither agree nor disagree, 2 for disagree to 1 for strongly disagree continuum. The mean values of most of the variables are more than 3, which gives the inference that rural buyers admit that the above said factors certainly affect their decision regarding the purchase of all fast moving consumer goods. To test the appropriateness of factor analysis technique the correlation between the variables is checked and Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy statistic is also used for the same. The correlation matrix is a lower triangle matrix showing the simple correlation, r, between all possible pairs of variables included in the analysis. Being an identity matrix of population correlation matrix, all the diagonal terms are 1, and all off-diagonal terms are 0. The test statistics for Sphercity is based on a Chisquare transformation of the determinants of the correlation matrix. Favours the rejection of the null hypothesis. Further, KMO compares the magnitude of the observed correlation coefficients to the magnitude of partial correlation coefficients. Small the value of KMO statistic indicate that the correlation between pairs of variables cannot be explained by other variables and the factor analysis may not be appropriate. Generally, a value greater than 0. 5 is desirable for the test statistic. Here, it can be seen from Table 3 that the null hypothesis, that the population correlation matrix is an identity matrix, is rejected by Bartletts Test of Sphericity. The approximate Chi-square statistic value is 22612. 664 with 630 degree of freedom, which is significant at 0. 05 level. The value of KMO statistic (. 774) is also large (gt;0. 5). Thus, factor analysis may be considered as appropriate techniques for analyzing the correlation matrix. The matrix constructed from the data obtained in form of the responses of rural buyers? overall opinion about the factors influence their decision to purchase various FMCGs. Once, it has been determined that factor analysis is suitable for analyzing the data, an appropriate method must be selected. The approach used to drive the weight or factors score coefficients. The two basic approaches are principal component analysis (PCA) and Common factor analysis (CFA). In PCA, the total variance in data is considered. The diagonal of the correlation matrix consists of unities and full variance is brought into the factor analysis. PCA is recommended when the primary concern is to determine the minimum number of factors that will account for maximum variance in the data for use in subsequent multivariate analysis. Further, PCA may be carried out if the correlation for the variables contains at least two correlations of 0. 30 or greater. The correlation matrix of 36 variables which were developed to know the overall opinion of rural buyers towards factors influence their decision to purchase FMCGs under study and it is found there are high correlations between the variables; therefore, it may be stated that factor analysis is appropriate. Further, it is found that 17 variables have the correlations above 0. 30. Therefore, PCA method is used for extraction of variable for the component or factor concerned. The extraction communalities for each variable which is the amount of variance a variable shares with all the other variables being considered. It is also the proportion of variance explained by the common factors. In the Table 4, five factors have been extracted on the basis of prior knowledge to describe the relationships among variable in a best way. Further, the scree plot associated with this analysis is given in Exhibit 1. From the scree plot, a distinct break occurs at five factors. Finally, from the cumulative percentage of variance accounted for, it can be seen that five account for 50.  835 per cent of the variance, 8 IJTMR www. ijtmr. com International Journal of Techno-Management Research, Vol. 01, Issue 02, September 2013 ISSN: 2321-3744 contributed by first component is 17. 480 followed by second (9. 914 per cent), third (8. 257 per cent), fourth (7. 740 per cent) and fifth (7. 444 per cent) of total variance. The rotation was made by the most commonly used method i. e. varimax procedure. This is an orthogonal method of rotation that minimizes the number of variables with high loadings on a factor, thereby enhancing the interpretability of the factors. Interpretation is facilitated by identifying the variables that have large loadings on the same factor. That factor can be interpreted in terms of the variables that load high on it. For the purpose of interpretation, each factor was composed of variables that loaded 0. 30 or higher on that factor. In case, where variables loaded 0. 30 or above on two factors, each variable was assigned to the factor where it had the highest loading. The maximum of each row (ignoring the sign) indicates the respective variable belongs to the respective component (Table 5). After interpretation of the factors, Table 6 enlists the rating of factors on the basis of their importance and also depicts the results through ANOVA. It depicts that factor 3 is at the top by which rural buyers perceived that TV commercials ( =4. 20) followed by print advertisements ( =4. 18) and word of mouth ( =. 95) plays a significant role for taking the decision to purchase these FMCGs. Further, they consider their own experience, display at shop, incentive schemes for the purchase of these FMCGs. Whereas, they do not fully agree that advice of beautician influence their decision towards the purchase of these FMCGs. On the other hand, rural buyers perceived that social factors are no so strong that those may influence their decision to purchase these FMCGs (factor 5, =3. 084). As far as F-statistics (ANOVA) is concerned, Table 6 shows that rural buyers significantly differ education, gender, income and occupation-wise towards cultural and psychological factors; age, education marital, income, occupation and district-wise towards social factors and marital status wise they differ towards demographic factors which may influence their purchasing decision of fast moving consumer goods at 0.01 significance level with respective degrees of freedom of demographic characteristics of the rural buyers by rejecting null hypothesis. Concluding Remarks In total, it is found that rural buyers perceived that TV commercials followed by print advertisements and word of mouth plays a significant role for taking the decision to purchase these FMCGs. Further, they consider their own experience, display at shops; incentive schemes for the purchase of these FMCGs, whereas they do not fully agree that advice of beautician influences their decision towards the purchase of these FMCGs. On the other hand, rural buyers perceived that social factors are no so strong 9 IJTMR www. ijtmr. com International Journal of Techno-Management Research, Vol. 01, Issue 02, September 2013 ISSN: 2321-3744 that those may influence their decision to purchase these FMCGs. Therefore, it may be recommended that the producers or marketers should frame ethical advertising strategies keeping in mind that rural people are fond of electronic and print media advertisements. References 1. Chandrasekhar, B. V. N. G.