PROJECT REPORT On Impact

Of Brand Image On Buying Behavior Of

FMCG Products With Special Reference To Mother Dairy India Limited

FOR THE PARTIAL FULFILLMENT OF THE AWARD OF THE DEGREE OF MASTER OF BUSINESS ADMINSTRATION FROM GGS IP UNIVERSITY DELHI

BATCH: 2011-13

SUBMITTED BY:

SUBMITTED TO: Prof. Preeti Kulshrestha

AR M Y I N S T I T U T E O F M AN AG E M E N T & T E C H N O L O G Y, G RE ATE R NO I D A (U P ) 20 1 30 6

Supervisor Certificate
1

This is to certify that a student of Master of Business Administration, Batch MBA07, Army Institute Management & Technology, Greater Noida, has successfully completed his project under my supervision.

During this period, he worked on the project titled Impact of brand image on buying behavior of FMCG products with special reference to Mother Dairy India limited in partial fulfillment for the award of the degree of Master of Business Administration of GGSIP University, Delhi.

To the best of my knowledge the project work done by the candidate has not been submitted to any university for award of any degree. His performance and conduct has been good.

(Signature)
Name supervisor of the faculty

AIMT-Gr. Noida Date:

ACKNOWLEDGEMENT

I take this opportunity to show my sincere gratitude to all those who made this study possible. First of all I am thankful to the helpful staff and the faculty of Army Institute of Management and Technology. One of the most important tasks in every good study is its critical evaluation and feedback which was performed by our supervisor Prof.Preeti Kulshretha .I am very thankful to our supervisor for investing his precious time to discuss and criticize this study in depth, and explained the meaning of different concepts and how to think when it comes to problem discussions and theoretical discussions. My sincere thanks go to my family members, who indirectly participated in this study by encouraging and supporting me.

TABLE OF CONTENTS
SUMMARY OF PROJECT INTRODUCTION RESEARCH OBJECTIVE COMPANY PROFILE LITERATURE REVIEW CONSUMER BEHAVIOUR DECISION PROCESS BRAND BUILDING BRAND EQUITY BRAND POSITIONING BRANDING OF COMMODITIES PACKAGING AS A DIFFERENTIATING STRATEGY FMCG PRODUCTS RESEARCH METHODOLGY SURVEY ANALYSIS KEY FINDINGS CONCLUSION RECOMMENDATIONS BIBLIOGRAPHY ANNEXURE 5 6 8 9 16

43 44 55 56 59 60 61

CHAPTER 1
SUMMARY OF PROJECT

This study aims to investigate how branding affect purchasing decision does. How much consumers are prepared to pay for branded products, how important they consider price, brand or other factors during their purchasing decisions. The study aims at comprehensive literature review on branding, Brand loyalty, brand awareness, brand equity and brand perceptions, price sensitivity and willingness to pay. The study has been undertaken with special reference to Mother Dairy India Limited. KEYWORDS: Branding, Consumers, Purchase Decision

CHAPTER 2
INTRODUCTION

WHAT IS A BRAND?
Brand recognition and other reactions are created by the use of the product or service and through the influence of advertising, design, and media commentary. A brand is a symbolic embodiment of all the information connected to the product and serves to create associations and expectations around it. A brand often includes a logo, fonts, color schemes, symbols, and sound, which may be developed to represent implicit values, ideas, and even personality. Concepts Marketers engaged in branding seek to develop or align the expectations behind the brand experience, creating the impression that a brand associated with a product or service has certain qualities or characteristics that make it special or unique. A brand image may be developed by attributing a "personality" to or associating an "image" with a product or service, whereby the personality or image is "branded" into the consciousness of consumers. A brand is therefore one of the most valuable elements in an advertising theme. The art of creating and maintaining a brand is called brand management. A brand which is widely known in the marketplace acquires brand recognition. When brand recognition builds up to a point where a brand enjoys a critical mass of positive sentiment in the marketplace, it is said to have achieved brand franchise. One goal in brand recognition is the identification of a brand without the name of the company present. For example, Disney has been successful at branding with their particular script font (originally created for Walt Disney's "signature" logo), which it used in the logo for go.com. "DNA" refers to the unique attributes, essence, purpose, or profile of a brand and, therefore, a company. The term is borrowed from the biological DNA, the molecular "blueprint" or genetic profile of an organism which determines its unique characteristics. Brand equity measures the total value of the brand to the brand owner, and reflects the extent of brand franchise. The term brand name is often used interchangeably with "brand", although it is more correctly used to specifically denote written or spoken linguistic elements of a brand. In this context a "brand name" constitutes a type of trademark, if the brand name 6

exclusively identifies the brand owner as the commercial source of products or services. A brand owner may seek to protect proprietary rights in relation to a brand name through trademark registration. Brand energy is a concept that links together the ideas that the brand is experiential; that it is not just about the experiences of customers/potential customers but all stakeholders; and that businesses are essentially more about creating value through creating meaningful experiences than generating profit. Economic value comes from businesses transactions between people whether they be customers, employees, suppliers or other stakeholders. For such value to be created people first have to have positive associations with the business and/or its products and services and be energised to behave positively towards them hence brand energy. It has been defined as "The energy that flows throughout the system that links businesses and all their stakeholders and which is manifested in the way these stakeholders think, feel and behave towards the business and its products or services."[citation needed]Attitude branding is the choice to represent a feeling, which is not necessarily connected with the product or consumption of the product at all. Marketing labeled as attitude branding includes that of Nike, Starbucks, The Body Shop, Safeway, and Apple Inc. "A great brand raises the bar -- it adds a greater sense of purpose to the experience, whether it's the challenge to do your best in sports and fitness, or the affirmation that the cup of coffee you're drinking really matters." - Howard Schultz (CEO, Starbucks Corp.) The act of associating a product or service with a brand has become part of pop culture. Most products have some kind of brand identity, from common table salt to designer clothes. In non-commercial contexts, the marketing of entities which supply ideas or promises rather than product and services (e.g. political parties or religious organizations) may also be known as "branding".

RESEARCH OBJECTIVE

To study and analyze the impact of brand image on buying behavior of FMCG products with special reference to Mother Dairy India Limited. To analyze the various products of mother dairy India limited.

COMPANY PROFILE
MOTHER DAIRY
Mother Dairy - Delhi was set up in 1974 under the Operation Flood Programme. It is now a subsidiary company of National Dairy Development Board (NDDB). Mother Dairy sources its entire requirement of liquid milk from dairy cooperatives. Similarly, Mother Dairy sources fruits and vegetables from farmers/growers associations. Mother Dairy also contributes to the cause of oilseeds grower cooperatives that manufacture/ pack the Dhara range of edible oils by undertaking to nationally market all Dhara products. Mother Dairy is targeting a turnover of about Rs 2,800 crore (Rs 28 billion) for the current financial year, a significantly higher than last year's Rs 2,200 crore (Rs 22 billion). It has have been growing at 20 per cent for the last three or four years About 30 per cent of its revenues come from non-core milk business such as fresh and frozen fruits The companys revenue from exports is around Rs 100 crore. Dhara, the vegetable oil and food brand, contributes around Rs 370 crore to the revenue figure. Safal, the fresh and frozen fruits, vegetables and juices brand add another Rs 300 crore. It is Mother Dairy's constant endeavor to a) Ensure that milk producers and farmers regularly and continually receive market prices by offering quality milk, milk products and other food products to consumers at competitive prices b) Uphold institutional structures that empower milk producers and farmers through processes that are equitable. SAFAL Fruit and Vegetable Unit was set up in the year 1988 by National Dairy Development Board, an institute of national importance, a body corporate created by Government of India, with an objective to provide a direct link between fruit and vegetable growers and consumers. The unit has drawn on NDDB's three decades of dairy sector strengths in designing its state of the art large and ultramodern central distribution facility to handle fresh and frozen fruit and vegetable. Safal, from Mother Dairy foods processing limited brings Indias finest fruit pulp and concentrate as well as organic Fruit Products, fresh and frozen fruits and vegetables. 9

Presently it is a unit of Mother Dairy Foods Processing Ltd, a wholly owned company of Mother Dairy Fruit & Vegetable Ltd. In April 2000, Mother Dairy Fruit & Vegetable Ltd was created as a subsidiary of NDDB. The processed products of the unit are marketed with the brand name 'SAFAL' The product portfolio has grown over the years to include a wide range of:

Fresh fruits and vegetables - marketed through 329 F & V Booths in Delhi & NCR Frozen vegetables - Peas, Corn & Mixed Vegetable. Processed products like jams, Pickles, ketchups etc. Fruits Juices & Nectars: Orange, Mixed Fruit, Orange Apple, Mango, Grape & Guava.

Today, Safal is the market leader in the frozen peas category with over 60% market share nationally with a turnover of Rs. 165 crores (including exports). It

Unit complex is situated on 22 acres of land. It comprises a prefabricated building consisting of cold store chambers with different sets of temperature and humidity conditions suitable for storage of various fruit and vegetables. It has controlled atmosphere chambers and ripening rooms, deep freeze rooms, preparation hall, processing hall, dispatch hall, reception, dispatch facilities etc. Material handling is done in specially designed plastic crates with the help of forklifts. The Unit also initiates and supports production enhancement activities at farm, improved pre and post harvest practices, efficient logistics from farm to the retail outlets, scientific quality assurance and education of grower, support staff and consumer. Production of quality product begins at the farm level where the grower, in co-operation with unit officials, work to cultivate and supply quality produce to the Unit. With the utmost care and dedication, the growers and Unit officials try to apply their professional knowledge and skills to give consumers the best return for their money. Standards are defined for each fruit and vegetable so as to link price to quality. Procurement specialists and trained field staff help the farmers in crop management and protection. Efforts are made to introduce new seed varieties and scientific methods of agriculture to increase the yield and improve the quality of produce.

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329 specially designed modern retail outlets have been set up in and around Delhi to market fresh and frozen fruit and vegetables, directly to the consumers. Each shop caters to large number of customers, with a capacity to sell 1,600 kilos of fruit and vegetables a day. The shops are equipped with electronic machines that automatically weigh the produce and print item wise bills. Unit also manufactures products such as Jam, Squash, Ketchup etc at its Ramgarh unit. Safal, from Mother Dairy foods processing limited brings you Indias finest fruit pulp an d concentrates as well as organic Fruit Products, fresh and frozen fruits and vegetables. The reason for Safals exceedingly high standards of quality, naturalness and freshness are many. Safal has the finest processing plant including a state- of- the- art processing plant in Mumbai and Banglore India, developed with technical know-how and equipment of Sasib Manzini Camaco SPS of Italy. Safal can process 50000 Mts of fruit per annum. For organic, the select farms from which Safal products originate, are certified by M/S ECOCERT International Gmbh in accordance with EEC Regulation 2092/91 Safals processing facility is ISO 9002, HACCP certified, a registered member of SGF, Europe and participates in the voluntary control system to ensure quality and safety. HACCP and GMP quality systems are strictly followed in every stage of the process. Safal Products do not contain any colouring, artificial sweeteners or preservatives, and employ a unique seamless field to-consumer process that packs every last ounce of natural taste, aroma and flavour into the products. Safal pioneered the modern marketing of fresh and frozen produce through a chain of approx. 329 retail outlets served by a modern produce handling and processing facility. Safal is supported by one of the most modern produce handling and processing facilities, located at Mongolpuri, New Delhi which is designed to handle 1, 20,000 MT of fresh produce annually. A state-of-the-art plant at Mumbai in 1996 is equipped to produce tropical fruits pulps, Pastes, juices and juice concentrated. Supported by the technical know-how and equipment of CFT Manzini, Italy it is 11

A 100% export oriented unit with a capacity of 15000 mts per annum. Produces fruit pulp for export to various countries like U.S.A., U.K., Middle East, Holland, Korea, Canada, Japan, Iran, Singapore, Germany, Russia

Safal has recently set up fruit and vegetable processing plant in Banglore which is one of the best in India and has the capacity to handle 3500 Mts. of fruits per annum. This State- of-theart plant is spread across an area of over 60 acres and has the latest advanced process line from CFT Manzini, Italy. This plant will surely add value to the horticulture produce for the domestic and export markets. To be closer to its international buyers, Safal has a marketing office in Rotterdam. Backward Linkages-Selecting the Best Safal unique emphasis on linking the farmer with the consumer means that you can be assured of superior quality produce. Safal acts as the link between the farmers and the consumer in a procurement process that benefits both. The farmer gets the most remunerative price and the consumer gets the best produce at a reasonable price. The fruit is carefully plucked at the right stage of ripening to ensure superior quality products. The Groups highly trained field staff works closely with the farmers to encourage modern crop management techniques like the use of high grade seeds, scientific farming methods and appropriate post harvest techniques. Precise quality standards are defined and as price is linked to quality, the farmer has an incentive to improve his crop. Produced by select farmers, grown from best quality seeds and managed with care, from germination to harvest, the processing plant therefore receives the finest tropical fruit to produce superior quality pulps, purees, concentrates and pastes. Mother Dairy has established collection-cum-grading centres in the rural areas each covering a cluster of 8 - 10 villages. The growers either supply their products individually or through societies and associations. The entire procurement network is spread across the country and includes 144 direct procurement sources, 13 procurement area offices, 111 growers associations and 8000 growers. State-of-the-art Processing The Safal plant is located in the heart of Indias finest tropical fruit growing region. An area that produces an abundance of premium quality mangoes, bananas, papayas, fresh grapes and 12

pomegranate. It is currently handling 1,00,000 MT fresh fruits and vegetables a year with minimal post-harvesting loss. Mother Dairy is managing this by making use of 12 deep freezing chambers of 900 MT each, five cold storage facilities 1000 MT each and a freezing line (IQF) capable of handling 3.5 MT / hour. The central distribution facility (CDF) of Mother Dairy, is also having seven ripening chambers of 175 MT each and a dispatch hall and process hall of 2160 sq. metres and 3900 sq. metres area respectively for carrying out the task of preservation of highly perishable fruits and vegetables Ripening

The plant has custom- designed ripening rooms which are operated under controlled temperature and humidity conditions to ensure the raw material is of uniform quality. Extraction and refining

Extraction and refining of puree is done in a controlled atmosphere, using a turbo-refiner. An ascorbic acid solution dosing system avoids product oxidation. Enzymes are inactivated by heat exchangers to avoid discolouration and ensure high consistency. Puree concentration is done to the desired brix strength using vacuum evaporators. Extraction and refining of puree is done using state-of-the-art destoner and turbo refiner and the plant is equipped with ascorbic acid, citric acid dozing system and aroma recovery plant. For banana puree, equipments are having C02 dozing system. Plant is also having concentration plant for manufacturing pulp/juice concentrate of desired total soluble solids under vacuum. Sterilization

Before sterilization is heat exchangers, the product is homogenized using a pressure homogenizer. The plant is equipped with state-of-the-art sterilizer, deaerator, metal detector and homogenizer. Modern highly automated production machinery, supported by stringent quality control practices at each step guarantees top quality produce. No colouring, artificial sweeteners or preservatives are added. Our process from farm to market ensures that every element of natural taste, aroma and flavour is sealed in. The unit has the facility for canning and deep freezing pulp and concentrates. There is an IQF (Individual Quick Freezing) process used in the frozen products, which helps in the freezing of each and every grain individually so that frozen products retain their natural nutrition and flavour. The product is filled in pre- sterilized aseptic bag with polyethylene in new MS drum or bag in box for shipment

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The Mumbai plant produces mango puree/ pulp and concentrate, guava puree/pulp and concentrate, banana puree/ pulp conventional, organic banana puree / pulp pomegranate juice clarified / unclarified and concentrate of clarified juice, mango juice clarified and concentrate, guava juice clarified and concentrate. mango blend, tropical fruit pulp blend. Mumbai plant has entered in the production of single strength juices/ concentrates and clarified juices of fruits like pomegranate of 5 6 tons/ hour capacity which is very close to the orchards of pomegranate. Mumbai plant has the facility to store the product upto -18 deg C. The product is available in 215 kg.net weight in aseptic bag in MS drum with polyethylene liner.It may also be available in 20 Kg asceptic bag in box on request from the buyer The Banglore plant produces red and yellow papaya pulp and concentrate, pink guava pulp and concentrate, tomato paste. Banana, mango, guava, and papaya purees are extracted after the fruit is mechanically peeled and destined. Plant is equipped with the state-of-the-art technology with modern atomization from CFT Manzini, Italy, with new cold extractor, rotary vacuum filter, filter press and other modern equipments to obtain the clear juice of pomegranate supported by the stringent updated quality control and practices at each steps while processing of quality wholesome pomegranate to retain the characteristic flavour and colour of the whole fruit in the final product. Quality Control Key to Success We as an organization are committed to deliver highest quality product that is why at every stage of the process we test the product for all physical, chemical, organoleptic and microbiological quality parameters. Regular cutout tests ensure that the product is uniform and meets every specification of our buyers. The unit is a registered member of SGF, Europe, participating in the voluntary control systems to ensure consumer safety and product quality. The unit is ISO 9001:2000 and HACCP certified. The products are kosher certified. Hygienic conditions are strictly maintained in every part of the plant as per the good Manufacturing practices. All fruits waste is collected in a truck using screw conveyors and transported outside for immediate disposal.

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Every entrance is equipped with air curtains and window/doors are made insect/fly proof. Our forced air ventilation system maintains positive pressure throughout the plant.

No colouring, artificial sweeteners or preservatives are added. The modern and highly automated production machinery supported by stringent quality control practices at each step guarantees top quality produce.

Safal ensure quality products for its buyers. That is why at each link in the value chain from farm to plant during processing and in the after sales follow-up, it vouches for the best.

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CHAPTER 3
Review of literature
1. Maryam Amini Pashandi (JANUARY 2013) (Jai Narain Vays University Department of accounting) Researcher has identified The effect of Brand Equity on Consumer Buying Behavior in term of FMCG in Indi a. Background of study: According to him Fast moving consumer goods (FMCG) or Consumer Packaged Goods (CPG) are products that are sold quickly and at relatively low cost. Examples include non-durable goods such as soft drinks, toiletries, and grocery items. Though the absolute profit made on FMCG products is relatively small, they generally sell in large quantities, so the cumulative profit on such products can be substantial. The term FMCG refers to those retail goods that are generally replaced or fully used up over a short period of days, weeks, or months, and within one year. This contrasts with durable goods or major appliances such as kitchen appliances, which are generally replaced over a period of several years.It is found that the volatility of stock market could affect consumers purchasing mood, not tomention the growth or declines of retail sales. While Blackwell, (2002) supported this argument by the fact that brand equity depends on the number of people with regular purchasing. The intensive discussion in the literature so far has shade light on the values of brand equity for both consumers and the firm. For the consumers, brand equity could provide them within formation about the brand which influences their confidence during the purchasing process. And it be observed from such studies that there is a high propensity for consumers with good perceptions to buy from the same shop again than those with poor perceptions. Findings: This quantitative research targets consumer behaviors in pu rchasing fast moving consumers goods (FMCG) in term of Brand of products. For this purpose four elements as brand equi tys components were identified that has potential affect purchasing FMCG, and they are Brand Awraeness, Brand Association, perceived Quality, and Brand Loyalty. At the end, results showed the highest impact on consumer purchasing behavior refers to Brand Loyalty.

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2. Ahmad Dr. Tauseef (2011) Researcher has identified The Impulse Buying Behavior of Consumes For The FMCG Products . Findings: His findings were as follows: In a research impulse buying was defined as an unplanned purchase and this definition can also be found in the research of Kollat and Willett (1967). In another research reported that impulse buying usually takes place, when a consumer feels a forceful motivation that turns into a desire to purchase a commodity instantly. Beatty and Ferrell (1998) defined impulse buying as instantaneous purchase having no previous aim or objective to purchase the commodity. Stern (1962) found that products bought on impulse are usually cheap. It clearly indicate that there exists a weak association between consumer lifestyle, fashion involvement and post-decision stage of consumers purcha sing behavior with the impulse buying behavior including the attitudinal as well as behavioral aspects of the consumers buying behavior. Pre-decision stage of consumers purchasing behavior established strong association with the impulse buying behavior of the consumers. So, it is established through this research that consumers purchasing product s in the area of plan their purchases, having shopping lifestyle related to planned purchases and their post-decisions are also not guilty. The pre-decision stage of the purchasing associate these buyers with unplanned or impulse buying because these days stores are full of variety of products and a buyer can easily get interested in purchasing a product which appeals him or her while shopping the planned list of products and here pleasure principle comes into play.

3. KulkarniDr. S.H. (july 2001)

(ASMs Institute of Business Management & Research) Researcher has identified Study Of The Consumer Behaviour Towards FMCG Products In Rural Areas . Background of study: According to him Things are changing fast now. The increasing literacy level and media explosion, people are becoming conscious about their lifestyles and about their rights to live a better life. Brand consciousness is on the rise. This, clubbed with increasing disposable income of rural households, has made the rural consumer more demanding and choosier in his purchase behaviour than ever before. And the dusky village damsel has now learned to pine for a satin rose. Findings: His findings were as follows: Without a doubt, FMCG companies must focus product availability in rural points. POS (both in primary & secondary) must be added 17

prolifuratiously to foster visibility as there is a read y market for branded products. Organisations must focus on TV ads keeping the rural markets in mind, since a big chunk of audience is influenced by the same. Organisations can no more be complacent about their rural positions and must work on brand retention, since maximum people have an average life in the same. People are becoming more and more aware about different brands available. They want to try new products. They are becoming brand conscious. Rural India has a potential of $500-bn. Companies should try to explore rural market. There is a huge growth opportunity out there

4. . ChandraSekhar B.V.N.G (august 2004)

(Academic and Internship Programme Indian Institute of Management Baanagalore) Researcher has identified Consumer Buying Behaviour and Brand Loyalty Background of study: According to him Indian Marketers on rural marketing have two understanding (i) The urban metro products and marketing products can be implemented in rural markets with some or no change. (ii) The rural marketing required the separate skills and techniques from its urban counterpart. The Marketers have following facilities to make them believe in accepting the truth that rural markets are different in so many terms. Findings: His findings were as follows: In the study majority of the respondents are male categories. Male members of the family are alone going to buy consumer products. Women are not interested in shopping and do not come out from their houses frequently. Most of the families come under the agriculture category. Family income is very low. Product planning is very important to marketer to enter into rural market. Non-Availability of brands is another reason which affects purchasing decision. Packaging should be strong enough to stand rough handling because of poor infrastructure facilities and pack should be small. Brand names should be simple, small and easy to remember and pronounce Effective IMC is required to reach remote villages.

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CONSUMER BEHAVIOUR
Whatever else is may be in our lives-child, Parent, student, worker, jogger, or stamp collector- we are all consumers, all of our days. We buy and use goods and services constantly, to eat; to wear, to read, to watch, to play, to travel in, to keep us healthy, to make us wealthy, and if not wise at least better educated, the act of consumption is therefore an integral and intimate part of our daily existence. And that is there whether we have a lot of money to spend or little. In every long country of the world, billions of purchase of goods and services are made every year. In the U.S. for example, the activity now accounts for most of the economy- some $4 trillion, or about two third of the annual gross national product. BUYING BEHAVIOUR Consumer decision making varies with type of buying decision. The decision to buy toothpaste, a tennis racket, a personal computer and a new car are all very different. Complex and expensive purchases are likely to more buyer deliberation and more participants. Assael distinguished four types of consumer buying behavior based on the degree of buyer involvement and the degree of differences among brands. COMPLEX BUYING BEHAVIOUR Consumers engage in complex buying behavior when they are highly involved in a purchase and aware of significant differences among brands. This is usually the case when the product is expensive, bought infrequently, risky and highly self-expressive. Typically the consumer does not know much about the product category and has much to learn. For example a person buying a personal computer may not know what attributes to look for. Many of the product features carry no meaning unless the buyer has done handsome research: 16K memory, disk storage, screen resolution, and so on. Complex buying behavior involves a three-step process. First the buyer develops beliefs about the product. Second, he or she develops attitudes about the product. Third, he or she makes a thoughtful purchase choice. For the consumers information gathering and evaluation behavior the market needs to develop strategies.

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BRAND BUILDING
1. BRANDBUILDING BY TAKING ADVANTAGE OF WORLD FAMOUS EVENTS LIKE WORLD CUP (CRICKET) Surf Excels advertising during the world cup was talked about. The brief was to link Surf Excel with cricket and at the same time bring out the brands functions and benefits like stain removing. The advertisement highlighted the core benefit of the brand removal of stains, says an HLL spokesperson. That is why the client bought the idea immediately, even though the idea was not typically lever. This ad. Campaign is an example of how a company can build its brand image by keeping a close watch on events taking place all around the world. 2. BRANDBUILDING THOUGH SHIFT IN AD. STRATEGY Onidas brand image was being threatened by umpteen brands. It wanted an advertising strategy, which could communicate its contemporary, youthful premium brand image with an aim of cheeky arrogance. This arrogance stems from the fact that their T.V. is the best. This time they changed their familiar and successful devil, as they believed that the core of the brand is more important than symbols like the devil. So the new ad. With the airplane came up. This is the case of changing the brand image through advertising. 3. REINFORCING THE BRAND IMAGE Kelvinator has reinforced its the coolest one image with series of ads. For example, in one of its advertisements a man sings attuned but gains appreciation when he feels cold and sings in his shivering voice once the refrigerator is opened. Despite Kelvinators ownership being shifted from whirlpool to Electrolux, the consumers still associate Kelvinator with the coolest one. The ads. Were basically meant to bring Kelvinator back o top of mind consciousness. The idea came from rustic reasoning and the ads are being aired on star sports and sony. This case endorses the fact that advertising can play a vital role in fixing the brands image in peoples minds. 4. BUILDING BRAND IMAGE KEEPING THE COMPETITORS IN MIND LG Electronics Fridge 20

Sub branded PN system (preserve nutrition), was positioned as nutrition preserver. The ads said from today, all other refrigerators become history; drawing attention to something that pushed their one benefit further towards the consumer. The advertising aimed at both the head and the heart.

BRANDING AN INDUSTRIAL HI TECH PRODUCT INTEL (the third line) it is the worlds tenth most valuable brand. It is targeting the main stream market, with a special accent on home pc market, along with office use. Its global advertising sees the blue door opening- the viewer is sucked down a flash whirl, virtual town. The shear technical wizardry of the ad spots gelds the aura of a very hi- tech product and in this case well becomes the message itself. It also links it to the excitement of surfing the internet. It has positioned the brand as the internet dream machine. 5. EMOTIONS IN BRANDBUILDING WHEEL Wheel detergent powder was advertised using the emotion anger. Although it sounds negative, the trick clicked as the angry lady was calmed when she used the detergent which brought award to her husband. A successful campaign fixing the brand as a household middle class which the customer can identify. MAGGI Maggi tomato ketchup is illustrated as, sauce ka big boss. The tag line of Tomchi is not too hot, not too sweet, tastes just right. It appears to be a direct hit at Maggis its different hot and sweet sauce. The communication is based on positioning of tomchi as a sauce, which has a perfect balance of tomatoes for sweetness and spice of chillies. The maggi sauce campaign with its famous Ajit jokes-Lilly dont be silly or boss has gone for a toss, was path breaking. It has made the brand memorable. There is a new ad now, which explains the expansion advertising strategy. Maggi is continuously following upon. But whatever be the product, maggi has remained and will remain etched in the customers mind as a dependable and a quality brand.

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6. BUILDING BRAND THROUGH CORPORATE ADVERTISING ICICI ICICI has been building its identity over the last couple of months and the impact is that now a common man knows what ICICI stands for. In the common parlance it denotes trust and confidence. The new identity has given ICICI extra mileage in everything and advertisements have built trust in the group name thus helping leverage each product through cross-synergies, seamlessly. This trust has been built at a lower cost. The communication device used is very interesting as it educates the common man about his own money. This is the financial brand in the offering. (Currently their ad campaign has again undergone a change. Now they are focusing on hassle free banking.) DEBEERS The Debeers has rocketed this non-traditional brand fro 1995 and its market has grown stupendously by 19.4% in 1997. The ratio of advertising to incremental sales was 1.2:100. The Debeers Consolidated Mines manages consumer demand using advertising, publicity and trade. The brand plank was: diamonds are more modern and aspiring as compared to gold. Communication had two options: the woman as a self-purchaser buying with and without her husbands approval or the husband surprising the wife. The second was preferred and thus the product was positioned as a highly emotionally charged surrogate for status. In TV there were two spots:1. Architect 2. Hotel spot Print advertising focused on creating identification with women portrayed and directly compared costs with that of familiar objects. Diamond-testing information below the ad addressed the knowledge issue. These efforts changed the attitudes of viewers against diamonds. In 1997, diamonds were seen as more personal gifts. Nevertheless, diamonds had an upper hand on gold only in terms of beauty and status. In 1997 only, major change was in media when recall leapt up. 22

The new wedding strategy was used and the new international shadows execution looked stylish and elegant. Infomercials were run which addressed price, confidence and knowledge issues, the channel thus enabled them to get a long, complex message into a medium one having greatest reach and impact. No wonder Debeers is a name in itself.

ADVERTISING THE HARD WAY VICCO It took Vicco 27 years to carve out a niche for itself. After five unsuccessful years of trying to sell Vicco Turmeric, it decided to use e fresh strategy. Other than packaging, communication of the brand was an important aspect used. Using the traditional haldi ceremony, it positioned the product in the minds of the Indian women category. The core theme rekindled memories of tradition and happiness but also insisted upon daily application of the cream It also came up with a vanishing cream formulation and after extensive advertising in over a thousand movie halls and the television, the brand began to gain acceptance. Fair and Lovelys introduction did not dent Viccos sales while Sangeeta bijlani endorsed the brand. With continuous harping on the natural benefits of turmeric cream, Vicco went ahead unfaltered by fairness creams and came to be known as a nationally recognized turmeric cream.

BRAND EQUITY
The equity of a brand is measured by the awareness and the image which it evokes. This is a natural measurement, since the brand is the symbol. Brand awareness relates to the number of persons who recognized the brand significance and who are conscious of the promise which the symbol express. The aim of advertising is to reveal the meaning of the brand and to spread it as far and as wide as possible to encourage people to try the product offered. The decision as to which of these different levels of awareness should be pursued depends on the way in which customers are expected to make their choice, and the degree of personal involvement.

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BRANDING OF COMMODITIES
In the past, in India, most commodities were sold in unbranded form. Today we notice the reverse trend. It all started in early Nineties when foodgrains and spices were offered in branded form. Vegetables followed this, and so did salt, sugar, etc. Today, more marketers have jumped into the bandwagon. Say, Tata salt has used corporate name, oranges are stamped with the growers level; tea s sold in special pack, design or names, common nuts and bolts are packaged in cellophane with the distributors symbol, and automobile componentsspark plug, tyres, filter-bear separate brand names from the automakers. This craze for branded commodities is also a result of the changed lifestyle of people, specially working couples who have high disposable incomes and for whom quality and convenience now take priority. Marketers are flocking to the commodity market because of huge size they offer. For instance, the branded rice market is at Rs. 1100 crore which constituted just about 10 % of the rice market. This goes to show the immense opportunity. Generally speaking, marketers have added value to commodities through branding, be it fertilizer, salt, spices, flour, rice or sugar. Hindustan Lever has achieved a thundering success when they differentiated its DAP fertilizer under the brand name of paras. Similarly, Brooke Bond has branded frozen vegetables with its Green Valley Brand. DCW Home product had modest success when it first launched Captain Cook Salt and followed it up with Captain Cook Atta. Siel is into sugar, NEPC has offered atta, maida, sooji and spices.

24

Advantages The brand name makes it easier for the marketer to process orders & track down problems associated with the brand. The marketers brand name & trademark provide legal protection( patent or copyrights) of the unique features, which would otherwise be copied by competitors. Branding gives the marketer the opportunity to attract loyal and profitable segment of customers. Loyalty created over time offers the unique advantage of having assured customer base against competition & greater control in their marketing programme. It is wrong to assume that any commodity market is a homogeneous mass. Instead, the task lies in skillfully identifying the different segments & understanding their specific needs. Branding helps marketer to form suitable segmentation of the market. Different brands can be aimed at different segments of customers. In the long run it helps to build a strong association with the consumers as well as the trade. By highlighting the same name, they could project their quality and image of the company. Last, but most important, to derive the first movers advantage and tap the huge market potential. CUSTOMERS BENEFITS Branding of commodity products not only benefits the organization but it also helps the customer. 1) Quality:- Customer will get the quality product from the wide variety of similar products. a) The risk of getting adulterated product is minimized. For example unbranded masala etc. may be adulterated which not only affects the taste of the food but also affects the health of the person. b) The manufacturing date is printed on the packet of branded commodity which helps him to know how old the product is. For example the local grocery shop can give the old Atta to the customer telling as fresh Atta but for branded customer can read the manufacturing as well as expiry date. 2) Quantity:- In branded commodity products the customer is getting theright quantityofproduct. The grocery shop cannot give him less amount. 25

3) Price:- The price of branded commodity product is fixed so a shopkeeper cannot change it & customer cannot be cheated. For branded commodity products the shopkeeper has to charge the same price from a child or an adult customer. 4) Value For Money:- The branded commodity product saves time of a customer because the customer does not have to waste time in removing unwanted material from the commodity products. Customer easily identifies the branded commodity. Customer knows the special attributes or benefits. Challenges in Branding Commodities The commodity market is generally driven by price. Besides, consumers, by and large, show n involvement in selection of a commodity. Under such conditions, to make them insensitive to price itself is a very difficult task. And, afterwards to create a preference for more sustained efforts on the part of any marketer. Of course, the challenges are slowly taking place in cties and big towns where consumers are able to appreciate the benefits of buying a branded commodity. Branded commodity is a marketing exercise at a very fundamental level. Unlike in consumer goods market where the marketer can play around with consumer perception, brand differentiation etc, in a commodity, branding is about going to the basics or exploring at the grass-root level. To quote, David Aaker, It involves overturning the rules of the market, establishing new selling propositions in the market, establishing new selling propositions in the market which so far has been driven largely by price. And everything from positioning, pricing, brand value & packaging takes on a new sensitivity. Brand building involves cost, apart from additional cost incurred in packaging, labeling, advertising, legal protection & a risk that if the brand should prove unsatisfactory to the user, the companys image would suffer & it may even affect market for other products of the company. Thus the challenges involved are formidable. Still any marketer prefers to brand it because of many unique advantages. PACKAGING AS A DIFFERENTIATING STRATEGY The package provides the buyers first encounter with the product & is capable of turning him on or off. Many marketers have called packaging a 5th P along with Price, Product, Place & Promotion. Packaging is treated as an element of the product strategy. Well-designed 26

packages can create an image of convenience and quality for the consumer and promotional value for the producer. This could be a useful tool for justifying the premium charged. Inertia Industries Limited (IIL) launched their premium of Sand Piper beer in1993, but the response was less than encouraging as the customer could not associate ubiquitous brown bottle with a premium beer & hence the price charged struck a discordant note with the customer. In 199, to rectify the defect, the company went for the relaunch & the packaging was changed to green bottle with a golden champagne foil top. IIL now repositioned Sand Pipers as the champagne of beers. The effect was startling. It sold out 37,000 cases as compared to merely 3000 cases a year before. IMPORTANCE OF PACKAGING IN COMMODITY PRODUCTS Packaging plays a very important role in commodity products. For example, Uncle Chipps potato chips are based on its delivery of freshness, crispness & retention of flavor. This is possible by use of packaging technology wherein the product is packed in air-tight metal foil packets filled with nitrogen atmosphere to prevent air from leaking in & spoiling the product. Moreover, at a time when potato chips were available only in colorless, transparent, their quality plastic packages, Uncle Chipps was the first to use packets made of air impermeable metal foil which was brightly colored for visual differentiation.

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FMCG Depending on the tangibility and durability found in an offering, products are typically classified as service, durable and non-durable products. As the name suggests, service has more of intangibles, whereas durable products offer both tangibility and durability. Non-durable products are normally consumed fast and hence purchased regularly. Here, consumers tend to spend the minimum of effort in comparisons and buying the item. Fst Moving Consumer Goods usually refer to non-durable product. Example include soft drinks, toiletrics, grocery items, etc. A customer usually spends a minimum of effort of procure them. However, much of astute marketing activities have evolved from this class of product, where consumers show low involvement, get wider choice and allured by a host of inducements. Based on the prime factor behind their buying, fast moving consumer goods (henceforth called FMCGs) can be further subdivided into three classes;

1.

Staples. Goods that consumers purchase on a regular basis. For example, a buyer purchases a toilet soap, detergent, sauce, toothpaste and biscuits ad and when stocks reach critical level.

2.

Impulse Goods. Good that are purchased without any planning are search effort. These goods are usually procured due to external stimulus. Thus chocolates soft drink, and potato chips are displayed in the Kirana store because shoppers may not have thought of buying them until spotting them. 3. Emergency good. Emergency goods are purchased when that particular need arises. The requirements for umbrellas arises during the rainy season or pullovers with the advent of winter. Manufacturers of emergency goods will place them in many outlets so as to capture the sale when the customer needs these goods.

Characteristics of An FMCG from Consumers Perspective An FMCG is characterized by a few distinct factors. By its very name on is able to make out the fact that an FMCG has a low shelf life. There are a host of other characterisitics which have considerable implications for any marketer. These are now briefly described.

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1. Frequency purchase. As is obvious form the name itself, these goods leand themselves to frequent purchases by the consumers. A product like salt is bought very frequently. It is an inexpensive product, costing anywhere between Rs. 2.00. to Rs. 5.00 kg and is also available in almost all the corner shops which cater to their respective neighhourhoods. It is never stocked at home beyond a level as it is easily available thus making it all the more attractive to buy at all times and even at odd hours! 2. Low involvement. FMCGs are by their very nature low involvement goods. When a consumer walks into a shops to purchase a packet of salt or a bottle of tomato ketchup, the consumer rarely makes an effort to choose the item. Even if the consumer is aware of the various brands of that particular product, should be brand he or she ask for not be available, the consumer will, in most cases, take what ever is offered in its place. Another factor which works in this direction is that there is offered in its place. Another factor which works in this direction is that there is usually a very large variety of options available in these product classes. So if the brand asked for is not available the consumer still has a large choice. There are a few exceptions to this rule. Products like cigarettes, personal hygiene products, although satisfying all the other criteria of FMCFs, are found to command a high level of brand loyalty. Once a consumer gets used to a particular brand of shampoo, consumers do not easily accept any other brand. In the case of personal hygiene products, like shampoos or sanitary towels, consumers do not like to change brands because it is a matter of prior habit or personal liking and as such those groups of form a very brand loyal market. They even go to different shops if the preferred brand is not found at the first shop. 3. Low Price. FMCGs are usally low priced. However, a consumer may perceive an option to be high priced when tacitly compared to popular brands. For example, the most expensive toilet soap may cost Rs. 50-00. Good like soaps, detergents, tea, potato wafers etc., are high volume products in the low involvement category. This is another reason why consumers show a limited interest in selecting these.

29

Characteristics of the FMCG from Marketers Angle 1. High volumes. The market for FMCGs is characterized by high volumes. A medium sizes family, for example, may use two the three cakes of soap in a month. If that number is multiplied by the number of such families throughout the country, one arrives at a very large number. The phenomenon is noticed for toothpastes, flakes, biscuits, soaps, chewing gums and so on. These goods are, therefore, manufactured in millions of tones. As a result, if a marketers cannot ensure large volume sales, the operations may not be viable. 2. Low margins. Because of the high volume and as a consequence of intense competition, these products are usually sold at prices which are very close to their production costs and the margins offered to dealers / distri butors on these products are rather low. So, ma marketers sets prices as low as possible and ensures turnover through large volumes. Similarly, distributors and dealers operate in low margins which they manage with high volume sales and quick disposal of stock. 3. Extensive distribution networks. Consumer preference in the FMCG product are not rigid. A consumer may ask for a brand whose advertisement he or she has seen recently, thanks to easy recall. Usually a buyer will ask for a product and accept whatever brand is given by the shopkeeper. Even in the unlikely even that the consumer does ask for a specific brand -name, in case the brand is not available, he or she will settle for some other one. In other words, the notion of brand loyalty is not very prevalent among a large section of market. In the case of impulse good consumers will generally require the product only on sight. The consumer allows the shopkeeper to decide for him. In view of such customer behaviour and low loyalty on the part of the dealers; it becomes necessary for companies to make sure that their product is well distributed. With this in mind, most FMCG companies have built up highly extensive distribution networks all over the country. It is because of this reason that a foreign company initially tries to acquire another Indian company to have access to its distribution network. HLL,ITC, Brooke Bond, Colgate-Palmolive, Britannia, Eveready, etc. today have extremely extensive distribution networks in India, HLL has a very far 30

reaching network in the rural markets. Little wonder then, that Lifebuoy is the largest selling soap in the world! 4. High stock turnove. A characteristic feature of FMCGs is that they have a very high stock turnover. This is a consequence of the fact that these products are bought frequently and a t regular intervals. In other words, thee goods have a short shelf life. Shopkeepers, therefore, a willing to trade in these goods more readily because they find a high stock turnover, which consequently allows them to rotate his capital a number of times in a month or so. A pouch retailer, for example, can turn his capital over almost daily. He buys his stocks in the morning and by the time he shuts at night, he has regained his investment and more. The next day, the same money is reinvested.

Growth Strategies for FMCG We have already highlighted the fundamental characteristics of fast moving consumer goods and their markets. We shall now consider the various growth strategies followed by FMCG companies. Typically, the success of an FMCG depends greatly on its marketing strategy. Typically, a marketer purses a wide combination of strategies. For instance, when prices are competitive the company would use an extensive distribution network, design suitable advertising and sales promotion schemes from time to time. However, what is it that can make an FMCG brand sell more than its competitor? What makes some outstanding brands? How does a marketer convert a customer from buying a generic washing powder to buying a particular brand, say Surf? Or what makes Lifebuoy a symbol of health for over a century? Let us now discuss various methods employed by the companies in an FMCG market. 1. Multibrand Strategy. A company often nurtures a number of brand in the same

category. There are various motives for doing this. The main rationale behind this strategy is to capture as much of the market share as possible by trying to cover as many segments as possible, as it is not possible for one brand to cater to the entire market. This also enables the company to lock up more distributor shelf space.

31

Take, for example, the strategy adopted by Hindustan Lever. They have introduced many brands in the soaps and detergents market so that no segment is left untouched. It has Dove in the Ultra-premium segment, Lifebuoy for the economy segment and brands like Rexona, Liril, Lux and Le Sancy for the intervening segments. In the detergents markets also, Surf itself is available in different forms - Surf Ultra, Surf Easywash, apart from the generic product. It has the Surf range in the premium segment, and Wheel for the economy segment. It has thus covered itself against any form of attack and captured market shares in every possible segment. Cadburys has also done something similar to their range of chocolates. It has Eclairs, which is positioned in the economy segment, Break and Five Star, which cost less than Rs. 10 each for popular categories and then it has chocolates with fruits and nuts, crispies and other exotic combinations which are slightly more expensive than the plain milk chocolates. At the premium end, Cadbury offers bigger sizes of its dry fruit filled range and it also manufacturers gift boxed containing big sized chocolates. In its recent launch Perk was positioned as a snack-food. In this way, they are covering many positions or usages of chocolates. Another reason to adopt multiple brand strategy is to protect its major brand by setting up flanked brands. Sometimes the company inherits different brand names in the process of acquiring other companies and each brand name has a loyal following. An example of this strategy in the Indian context would be that of Coca Cola which acquired Thums Up, prior to its entry into the market. Today they have a portfolio of soft drinks, each with a substantial market share. 2 Product flanking. Product flanking refers to the introduction of different combinations of products at different prices, to cover as many market segments as possible. It is basically offering the same product in different sizes and process combinations to tap diverse market opportunities. The introduction of shampoos in small sachet has, for example, made them affordable to the lower segment of consumers who previously could not afford to spend anywhere between Rs. 30 and Rs. 40 for a standards bottle of a good shampoo. Although the sachets were initially launched to guard the main brand surprisingly they have now become a big success among new and small quantity users.

32

The idea behind this concept is to flank the core product by offering different variations of size and price so that the consumer finds some brand to choose from. Stayfree has introduced so many variations of its product where consumers can now buy stayfree singles, doubles, compacts, Stayfree Regular, packets of 10 or 20 sanitary towels. Vicks, the cough and cold relieving medicine is now available in small containers and also as inhalers, cough drops and cough syrups. They have offered a whole range of the same product in many sizes and prices to flank their main brand, Vicks Vaporub. 3. Brand extensions. Markets like to have a loyal consumer base so that those particular brands enjoy high brand equity in the market. In such cases, companies make brand extensions in the hope that the extensions will be able to ride on the equity of the successful brands, and that the new brand will stand in its own right in the course of time. At times, the idea does not work and the result is that the strong preference for the original brand itself gets diluted in the bargain. However, if th is strategy works, it has been of tremendous value leading to the formation of a number of umbrella brands in a variety of products. Brand extension strategy offers a number of advantages. A well respected brand name gives the new product instant recdognition and easier acceptance. It enables the company to enter new product categories more easily. A classic example of this is Lifebuoy and its brand extensions. Today this brand has a number of extensions like Lifebuoy Plus, Lifebuoy Liquid and lifebuoy Gold apart from the regular Lifebuoy. All these brands have been positioned at different segments. Another example is that of Amul. With the success of its first product, Amul milk powder, the company came out with Amul ghee, Amul butter, Amul cheese, cheese spread, etc. and finally added Amul chocolates to its portfolio. An example of the extreme success of brand extensions is that of Classic Milds, a brand extension of the premium cigarette of ITC Ltd. At the time when Classic Milds was launched, Classic was fully entrenched in the premium cigarettes range and enjoyed tremendous brand equity. Within a few months of the launch, the market share held by Classic began to slide down. Classic Milds became such a favourite that it cannibalized the sales of its own mother brand! Today Classic Milds enjoys a much higher market share than Classic which has been relegated to the number two slot. 33

4.

Building product line. Some companies add related new product lines to give the consumer all the products he / she would like to buy under one umbrella. Revlon and Britannia have done precisely this. The former company added related products in the cosmetics range so as to offer their customers a one stop shop for all the cosmetic they could possibly need, ranging form moisturizing creams to face scrubs and delicately shaded eye colours. Revlon today is associated not just with nail colours and lipsticks, but also with the entire range of make-up and hair-care. Britannia has adopted a similar strategy. It has introduced diff erent kinds of biscuits and baked foods in the past few years. By adding a number of flavours in each product line the company grew in the industry. Building related product lines is today the market leader in the biscuits and related baked food products i ndustry.

5.

New product development. Given the intense competition in most products today, companies that fail to develop new products are exposing themselves to great risk. Their existing products are vulnerable to changing consumer needs and tastes, new technologies, shortened product life cycles and increased domestic and foreign competition. A company can add new products through the acquisitions of other companies or by devoting ones own efforts on new product development. With the help of new products a company can enter a growing market for the first time, and supplement its existing product lines. New products could also mean offering improved performance like black & white TVs to colour sets or greater perceived value and replacing existing products or relaunching old products which are targeted at new market segments. For instance, transistor sets may be relaunched with a view to attract the rural market or customers who wish to catch FM programes. Dove by HLL is an example of creating an entirely new premium segment. For the first time in India, a soap with One - fourth moisturizer was offered to the consumer. It has been positioned for the super premium segment as a skin care product and not as a soap. Dabur, on the other hand, identified an ex isting consumer need and developed Dabur Vatika Hair Oil. Consumer research revealed that Indian ladies mixed a variety of herbs with their hair oil before application. By

34

adding, henna, lime, and other such ingredients to coconut oil Dabur created Vatika as a solution to the above need. 6. Innovations in core products. In the FMCG market, the life of a product is short, Marketers, therefore, continually try to introduce new brands to offer some thing new and meet the changing requirements of the customer. A consumer is also open to try out new options and, on the other hand, brand loyal segment is persuaded to upgrade their choice. Hence it is prudent for a marketer to innovate from time to time both by technological expertise as well as from the consumers or dealers feedback. Such innovations are tried out around the core products of a company. 7. Long term outlook. Many companies adopt a long term outlook towards growth in an FMCG market. In the process, short term gains which might adversely affect the long term prospects of the company are sacrificed. The historic example of this was the strategy adopted by Kelloggs in Mexico. The concept of cornflakes for breakfast promoted by Kelloggs is entirely American in nature. A country like Mexico, which is culturally and ideologically so different from America, could not accept the Kelloggs offer. However, Kelloggs with its long term outlook took 28 years before finally breaking even. Today it is the market leader in the breakfast cereals markets, enjoying an unparalleled monopoly.

8.

Wide distribution network. A very simple way of increasing an FMCG companys market share is by developing a strong distribution network, preferably in term of more locations. One of reach of the product has been extended, it i s likely to gain in market share became of its deep penetration. As extensive distribution system can be developed over time, or the company may acquire another company which has an extensive distribution network. As stated earlier, Brooke Bond, Asian Pain ts, Hindustan Lever, Union Carbide have developed a good distribution network. This stands as the prime reason behind their market leadership in respective businesses.

9.

Monitoring the pulse of the consumers. Companies spend considerable effort to find out the whats, wheres, hows and whens of their consumers. They figure out all sorts of things about them that at latter are not even awave of. Well-known companies frequently undertake marketing research to find out more about their consumers and how to satisfy their needs and wants in a better manner. 35

It helps them to monitor the pulse of their buyers so that they are able to identify and / or anticipate the needs of the consumers and be able to satisfy them in a better manner than the competitors. We may cite here the famous MR study about instant coffee users. When instant coffee was first introduced, housewives complained that it did not taste like real coffee. Yet in blindfold tests, many housewives could not distinguish between cups of instant and decoction coffee. This indicated that much of their resistance was psychological. Researchers decided to design two almost identical shopping lists, the only difference being that regular coffee was on one list and instant coffee on the other. The instant coffee list was given to a different but comparable group. Both groups were asked to guess the social and personal pretty much the same with one significant difference: a higher proportion of the housewives whose list contained instant coffee described the subje ct as lazy, a spendthrift and failing to plan well for her family." These women obviously were imputing the fictional housewife in to their own anxieties and negative images about the use of instant coffee. The instant coffee company now knew the nature of the resistance and could develop a campaign to change the image of the housewife who serves instant coffee. The lesson seems to be that an FMCG marketer must examine the buyers mind regularly. 10. Advertising and media coverage. Advertising is required to build awareness about an FMCG or brand which is available in the market but not many people might know about it. Information advertising figures heavily in the pioneering state of a product category, where the objective is to build primary demand. Persuasive advertising become important in the competitive stage, where the companys objective is to build a selective demand for a particular brand. Most advertising falls into this category. For example, Pantene shampoo attempts to persuade consumers that it delivers more benefits than any other brand of shampoo. Marketers try to established the superiority of its brand through specific comparisons with one or more brands in the product class. Reminder advertising is quite common with mature products. Expensive four colour Coco-Cola ads in magazines do not have the objectives of informing or persuading buyers. Perhaps it tires to remind people to purchase Coca-Cola. A related form of 36

advertising is reinforcement advertising, which seeks to reassure current pu rchasers that they have made the right choice. The basic idea about growth through adverting by a company is to increase market share through more share of mind as more information about the company and its products will induce the viewer at the time of actual demand. 11. Sales promotion. Sales promotions offer a direct incentive to buy more in the short term. They are designed to stimulate quicker and / or greater purchase of particular products by consumers or the trade. However, a few points have to be k ept in mind. They yield faster and more measurable responses in sales than advertising does. They mainly attract the deal prone consumers who switch brands as deals become available. Loyal buyers normally do not change their brand as a result of competitive promotion. A classic example of sales promotion is that of the Maruti car filled with Nescafe coffee packets. The consumers were given forms to fill in and among other things were asked to guess the number of packets of coffee stuffed in the car. The care was finally awarded to the person whose guess was closet to the actual. Pepsi has been doing a large amount of promotions since the time it entered India. Pepsi cassettes and T-Shirts have been offered to young people of over the country. The Pepcard was the first of its kind in the country. Promotins like Aishawarya is coming to you home and You could be the 13 th man with Sachin Tendulkar have all been a part of the many innovative campaigns carried out by this compa ny.

FMCG companies sell their products directly to consumers. Major features which distinguish this sector from the others, are as follows: Low capital intensity Most product categories in FMCG, require relatively minor investment in plant and machinery and other fixed assets. Therefore shortage of product for want of capacity would be a rare phenomenon. The turnover is typically five to eight times the investment made in a greenfield plant at full capacity. This is also due to the fact that the business being marketing

37

driven, players do not integrate backward. Also, the business has low working capital intensity as bulk of sales from manufacturers takes place on a cash basis.

High initial launch cost Nonetheless, there is a large front-ended investment made in new products including cost of product development, market research, test marketing and most importantly its launch. To create awareness and develop franchise for a new brand requires enormous initial expenditure is required on launch advertisements, free samples and product promotions. Launch costs are as high as 50-100% of revenue in the first year and these costs progressively reduce as the brand matures, gains consumer acceptance and turnover rises. For established brands, advertisement expenditure varies from 5 - 12% depending on the categories. It is common to give occasional push by re-launches, which involves repositioning of brands with sizable marketing support. Technology Basic technology for manufacturing is easily available. Also, technology for most products has been fairly stable. Modifications/ improvement rarely change the basic process. Nonetheless, major global players spend enormous sums on R&D due to their ability to spread cost over the wider base of their global operations. Their R&D efforts are towards : Cost effective manufacturing process without compromising on quality and functional performance. Research driven formulations which give cutting edge. High standards of hygiene/ purity for personal care and food products. Standardized formulation, which can be used across countries.

Marketing driven In relative terms, marketing function has greater importance in FMCG companies. The players have to reach out to mass population and compete with several other brands which 38

essentially offer similar products. The perceived differences are greater than the real differences in the product. Market research Consumers' purchase decisions are based on perceptions about brands. They also keep on changing with fashion, income and changes in lifestyle. Unlike industrial products, it is difficult to differentiate products on technical or functional grounds. With increasing competition, companies spend enormous sums on product launches. Market research and test marketing become inevitable. Balance sheets are misleading The most critical asset for FMCG companies is represented by its brands and distribution network. Brands are bought and sold like any other assets. Typically, when an FMCG business is sold, the value of the brand is several times of that of tangible assets. However as per the current accounting practices in most countries, investment made in building of brands are written off as revenue expenditure. This is due to high risk involved with a new brand, subjectivity involved in its valuation, lack of consistency and difficulty in separating a brand's value from that of tangible assets employed in the business. While a successful brand will pay back the investment several times, in case of brand failure, entire investment has to be written off. High return on networth of most established companies is also misleading due to the fact that the assets sans brands are considerably understated in the balance sheet. Significant presence of unorganized sector There is a significant presence of unorganized sector in India. In the past, several factors led to mushrooming of small unorganized players with local presence viz Basic technology for most products is fairly simple and easily available. Fiscal advantages : In India, small-scale sector enjoys (the concessions however have been diluted considerably in the past few years) exemption/ lower rates of excise duty, sales tax etc. This makes them more price competitive vis-a-vis the organized sector. 39

Remote rural markets : Due to highly scattered market and poor transport infrastructure, very few MNC companies/ organized players have been able to reach out to remote rural areas and even small towns.

Low brand awareness enables local players to market their spurious look-alike brands. Cost advantage : Lower overheads due to limited geography, family management, focused product lines and minimal expenditure on marketing.

Critical success factors FMCG business rests on the two pillars of brand equity and distribution network. Brand equity Brand equity refers to the intangible asset in the form of brand names. The consumer's loyalty for a particular brand is due to the perception that the product Has distinctively superior and consistent quality. Satisfies his/ her specific needs. Provides better value for money than other competing brands. In FMCG products, brand equities are relatively stronger as the consumer is reluctant to try unknown brands/ unbranded products as Most of these products are for personal use. It is often difficult to differentiate a product on technical or functional grounds and therefore little reason to switch from a known brand. A successful brand generates strong cash flow which enables the owner of the brand to reinvest a part of it in the form of aggressive advertisement/ promotion to reinforce the perceived superiority of the brand. The worth of a brand is manifested in the consumers insistence on a particular brand or willingness to pay a price premium for the preferred brand.

40

CHAPTER 4
RESEARCH METHODOLGY

Descriptive Research was done which included surveys and fact-finding enquiries of different kinds

Secondary data was collected from different sources such as brand equity, brand reporter, web sites, etc

Structured questionnaire was prepared so as to know consumer buying behavior Graphs and diagrams were drawn out of the data analysis

Sample Size: 150 Respondents

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CHAPTER 5
DATA ANALYSIS
1. Which of the following Mother Dairy brands/products are you aware of? Milk Curd Ice-cream Juices Vegetables Frozen Vegetables Ghee Lassi Butter Pickles Jam 1Vegetable Oil Cheese 150 150 97 69 121 78 99 150 150 88 88 63 47

160 140

150 150 121

150 150

120 100 80 60 40 20 0
Milk Vegetables Butter Cheese Curd Frozen Vegetables Pickles Ice-cream Ghee Jam Juices Lassi Vegetable Oil

97 78 69

99 88 88 63 47

Awareness about daily products is higher than other products. But as all the products are sold through company franchised outlets most of the respondents were aware of the products of MDIL.

42

2. How often do you consume Mother Dairy Products? Daily 150 Occasionally 0 Never 0

Never

0 0 150 0 20 40
Daily

Occasionally

Daily

60

80
Occasionally

100
Never

120

140

160

All the products of MDIL are consumed on daily basis by respondents that includes milk, curd, butter etc.

43

3. How often do you purchase the Mother Dairy products? Daily Milk Products Vegetables Frozen Products Jam, Pickles, etc 150 78 18 Once a week 21 39 Fortnightly 22 21 88

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

18

78 39 88

150 21 21 22 Daily Once a week Fortnightly

Milk Products

Vegetables

Frozen Products

Jam, Pickles, etc

The purchase frequency of the respondents in shown in above graph its the highest for milk products. MDIL is known to be a milk products company.

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4. Factors you consider while purchasing a Mother dairy products RANK THEM ACCORDING YOUR PRIORITY:

Packaging 98

Quality 143

Brand 145

Shelf Life 112

Price 81

Availability 117

160 143 140 120 100 80 60 40 20 0 Packaging Quality Brand Shelf Life Price Availability 98 81 112 117 145

The above bar graphs list the factors that matter the most in affecting the purchase decision of respondents.

45

5. Listed below are statements about shopping behavior for Mother Dairy Products. Please check one box for each statement to indicate the extent to which you agree or disagree with each statement.
Agree I buy the products I like, regardless of other available brands I buy new products only when they are well accepted. I am not as concerned about other products as I am about price and quality. I prefer to buy known brands rather than take a chance on something new. I am confident that I have good choice for consumer products.
Impact of Brand on Buying Behaviour

121 28 141 150 150

Neither Agree Nor Disagree 29 97 9

Disagree

25

New Product & Buying Behaviour

Neither Agree Nor Disagre e 19%

Disagre e 0% Neither Agree Nor Disagre e 65%

Disagre e 17%

Agree 18%

Agree 81% Impact of Price and Quality

Existing Brand Vs. New Brand

Neither Agree Nor Disagre e 6%

Disagre e 0%

Neither Agree Nor Disagre e 0%

Disagre e 0%

Agree 94% Consumer Brand Choice

Agree 100%

Neither Agree Nor Disagre e 0%

Disagre e 0%

Agree 100%

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6. Who influence you to purchase the brand? Family 145 Friends 19 Advertisement 78 Self 98 Other

Self

98

Advertisement

78

Friends

19

Family

145

As evident from above the influence of the family members is the highest.

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7. In which media you have seen the advertisement of Mother Dairy products? TV Magazine Billboard and hoardings 86 12 13 21 0 18 Newspaper Internet Other

Internet 0% Newspaper 14%

Other 12%

Billboard and hoardings 9% Magazine 8%

TV 57%

Mother Dairy ads are mostly visible on TV followed by Newsppaer.

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8. Which of the following would affect you choice of Mother Dairy Products? No effective at all Quality Price Promotional campaigns 49 69
100%

Affecting the most 150 101 81

67% 54% 46% 33%

No effective at all
Quality Price

Affecting the most

Promotional campaigns

The most important factor affecting the buying decision for MDI products is quality.

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9. When you buy a Mother Dairy a promotional/discount offer, will you by the product after the campaign? Decision Yes Likely Dont Know I will most likely written over to my previous brand I will switch over to previous brand No. of Respondents 69 13 21 47

31% 46%

14%

9%

Yes Likely Dont Know I will most likely written over to my previous brand I will switch over to previous brand

As evident switching to other similar brands is possible if the present brand is not able to satisfy the buyers expectation.

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RESPONDENT PROFILE
Marital status Single 11 Married 139

Single 7%

Married 93%

Educational Information: (tick one) School 8 SSC/HSC 47 Graduate 76 Post-graduate 19

Postgraduate 13%

School 5% SSC/HSC 31%

Graduate 51%

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Occupation: (tick one) Occupation Businessman Executive Government Service Academics House-Wife Self-employed Student Others
Others 8%

No. of Respondents 12 36 31 6 45 4 4 12

Self-employed 2%

Student 3%

Businessman 8% Executive 24%

House-Wife 30%

Academics 4%

Government Service 21%

Monthly Household Income: <10000 11 10000-15000 19 15000-20000 46

<Rs.10000 7% >Rs. 20000 49% Rs. 1500020000 31% Rs. 1000015000 13%

>20000 74

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CHAPTER 6
KEY FINDINGS

Awareness about daily products is higher than other products. But as all the products are sold through company franchised outlets most of the respondents were aware of the products of MDIL.

All the products of MDIL are consumed on daily basis by respondents that include milk, curd, butter etc. Quality is the totality of features and characteristics of a product or service that bear on its ability to satisfy or implied needs. In the purchase decision quality of the product is one of the important factor considered by customers.

Customer prefer for known brands than go for the unknown brands. Mother Dairy ads are mostly visible on TV followed by Newsppaer. And in the buying they are more influenced by the family members As evident switching to other similar brands is possible if the present brand is not able to satisfy the buyers expectation. Days are gone when there are few players in the market now competition is so intense that one cant sustain without having good quality and advanced technology in their products. Specially in the consumer durable segment product feature becomes more important.

Family is the most important consumer-buying organization in society. Family members constitute the most influential primary group. Influence of family members in high involvement product category is more,

Companies are paying millions of dollars on their advertising campaign. The purpose of advertising is differs from company to company. Some has brand awareness or some has sales, as this main objective for adverting. But does advertising really influences purchase decision of customers it is the biggest whirlpool for every marketer.

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CHAPTER 6
CONCLUSION
Reason for failure of Branded Commodity A number of reasons can be attributed to the success of a brand. However, the same cannot be said for the failure of a brand in the market place. Often, the reason may could be as simple & mundane as i) ii) i) ii) Unattractive packaging. Improper naming of the brand, Bad product quality, Marketers not being able to understand the core needs of the consumer properly. Still serious lapses, which are attributed for failures, are Inadequate differentiation or me-too syndrome: The most common reason for failure is that the marketers launch products, which are, simply clones of brands already in the market. These new products failed to stand out in crowd. In fact, often lack of imagination prevents marketers to create a significant difference with the existing options. For example Nirma Bath was launched a few years ago in competition of lifebuoy. The brand was just me-too offering & had nothing new to offer to consumer & attempted to cash in on run-away success of Nirma washingPowder which had stormed the Indian detergent market. Price convenience equation: Many new packaged food products come into market on convenience platform. That is, the consumer can get rid of some tedious chores simply by paying little more price for the product. The point to calculate here is, just how much will a customer pay for the product. The point to calculate here is, just how much will a customer pay for the convenience. If the convenience-price ratio is not right, the new product has little chance to succeed. All Seasons Foods Package chatni & sambarsfailed as a result of getting this convenienceprice ratio wrong. The basic idea behind the chatni & sambhars was right. All Seasons calculated that housewives would be only too glad to snap up packaged sambars & chatnis if a company with good credentials sold them. 54

The company bought a state-of-the-art plant from US to produce the proper quality & taste. But the product failed to take off. The reason; the products were prohibitively priced. A chatni bottle half the size of a ketch-up bottle cost twice as much. For most housewives, that did not make any sense. A tomato ketch-up took hours to prepare, & most housewives were only too glad to get it in packaged form. A sambar or chatni required far less effort to cook, & paying a premium for a bottled version was really worth the effort. Positioning: Improper positioning sometimes brings disasters For example Milk food Yogurt Milkfood was a successful icecream in North India. However when the company decided to make this line extension through Milkfood Yogurt, it did not succeed. The problem was that it was never clearly communicated what the yogurt was all about. The advertising projected it as a superior form of curd, but consumers mistook it as a novel form of ice cream. The Milkfood name (associated with icecream) was there on packaging as large as life. The yogurt cost Rs.5.50 & Rs.6.50 for different variants (against a Vanilla cup of same size which came for Rs.4). The end result was that the consumer refused to pay the premium. Prices were slashed to Rs.5, but it did not help. Distribution Channel. Another major reason why new product: Often fail in the market is improper understanding of the distribution channel. A manufacturer often chooses distribution channel which he is familiar with-not one which is suited for the product. For example Ruffles Chips. Pepsis Ruffles chips also failed due to lack of distribution support. Pepsi could not convenience to distributors to carry this product through. While their soft drinks could hold out, their chips got crushed & mangled. Improper Pricing: Success of a new brand depends to a large extent on initial price setting. The popular saying that one must get value for ones money, because when the consumer has inclination to buy new offering, there should be a clear benefits. Some other reasons:1 Lack of Differential Advantage Products fail when customers do not perceive them as better value than existing options. 2 Too Slow Development. Speed of entry or design of new products is essential in the changing market where technology is readily available.

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3 Poor Planning. Error in judgment about target market/segment, in accurate positioning often misses the opportunities. 4 Lack of Managment Enthusiasm. Management is, at times, complacent & avoids entry into new area. 5 Lack of Organizations Expertise. Managing new products may call for expertise, which an organization may sometimes lack. 6 Assigning inadequate resources to market development. Presuming that the product is so good that it will sell on its own can prove to be wrong as special efforts of market development are required. 7 Lack of Genuine Superiority. If a new product is merely & imitation of existing product, but claims superiority with which the consumers do not quite agree, the product will fail sooner or later. 8 Under Estimating The Competition. Underestimation of competitors capabilities & possible reactions is at times the cause of product failure. If the product launch is 9 based on a lower cost of production & the assurance of good channel support. It may face its match by competitors. 10 Poor market Research. The wrong reading of consumers mind & arriving at an optimistic forecast of market demand is sometimes the reason for product failure. 11 Poor timing of Launch. Too early or too late an entry into the market is also a common cause of failure.

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CHAPTER 7

RECOMMENDATIONS

Maintaining Brand image requires efforts in maintaining high quality products across the entire brand portfolio. In this regard it is recommended that MDIL maintains the brand image through quality, price, availability and finally packaging. MDIL has all the available resources in terms of outlets, distribution network and products but it needs to improve on its brand image through advertisements for its products that are not consumed on daily basis. MDIL should improve on its brand image for Ice Creams in regards to increasing competition from Kwality, Vadilal and others because the product has high potential in the market because of its quality and price. MDIL should target to use umbrella branding for increasing awareness about its complete product range most importantly for products like frozen vegetable, juices, pickles, etc.

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CHAPTER 8

BIBLIOGRAPHY

Kevin Lane Keller (2004), Strategic Brand Management, 2nd edition, Pearson Education, New Delhi

Consumer Behavior, 6th Edition, by Lean G. Sehiffman and Leslic lazan Kanuk. Consumer Behavior, 6th Edition, by Hawkins, Best ad Coney.

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CHAPTER 9

ANNEXURE
QUESTIONNAIRE (Tick whichever applicable) 1. Which of the following Mother Dairy brands/products are you aware of? Milk Ice-cream Vegetables Ghee Butter Jam Cheese 2. How often do you consume Mother Dairy Products? Daily Occasionally Never Curd Juices Frozen Vegetables Lassi Pickles Vegetable Oil

3. How often do you purchase the Mother Dairy products? Daily Milk Products Vegetables Frozen Products Jam, Pickles, etc Once a week Fortnightly

4. Factors you consider while purchasing a Mother dairy products 59

RANK THEM ACCORDING YOUR PRIORITY: Packaging Brand Price Quality Shelf Life Availability

5. Listed below are statements about shopping behavior for Mother Dairy Products. Please check one box for each statement to indicate the extent to which you agree or disagree with each statement. Agree Neither Agree Nor Disagree Disagree

I buy the products I like, regardless of other available brands I buy new products only when they are well accepted. I am not as concerned about other products as I am about price and quality. I prefer to buy known brands rather than take a chance on something new. I am confident that I have good choice for consumer products.

6. Who influence you to purchase the brand? Family Advertisement Other 7. In which media you have seen the advertisement of Mother Dairy products? TV Magazine Billboard and hoardings Newspaper 60 Friends Self

 Internet Other 8. Which of the following would affect you choice of Mother Dairy Products? No effective at all Quality Price Promotional campaigns Affecting the most

9. When you buy a Mother Dairy a promotional/discount offer, will you by the product after the campaign? Yes Likely Dont Know I will most likely written over to my previous brand I will switch over to previous brand

Respondent Profile
Name: Age: Marital status: Single Married

Educational Information: (tick one) School Occupation: (tick one) Businessman Executive Government Service Academics SSC/HSC Graduate Post-graduate

House-Wife Self-employed Student Others ________________________(Please Specify) Monthly Household Income: <10000 10000-15000 15000-20000 61