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A study on factors influencing the purchase decision of

  1. 1. European Journal of Developing Country Studies, Vol.2 2006 ISSN(paper)2668-3385 ISSN(online)2668-3687 www.BellPress.org A Study on Factors Influencing the Purchase Decision of FMCG among Bangladeshi Consumers G. M. Shafayet Ullah Lecturer, School of Business Studies Department of Business Administration Southeast University House# 64, Road# 18, Block # B, Banani, Dhaka-1213, Bangladesh Panuel Rozario Prince Lecturer, Department of Business Administration Victoria University of Bangladesh 58/11/A, Panthapath, Dhaka-1205, BangladeshAbstractFast Moving Consumer Goods (FMCG) is one of the largest sectors in the economy of Bangladesh. In the lastfew years the FMCG industry in Bangladesh has experienced dramatic growth; both qualitative and quantitativeimprovements have occurred in the consumer durable items. Fast Moving Consumer Goods or FMCG inmarketing means convenient and low involvement products like- salt, flours, pens, chocolates etc. But in recentyears, the FMCG industries worldwide have experienced a difficult market condition. In some categories,formerly popular brands have either been deleted or squeezed between the category leaders and low-costcompetitors. This study has identified eight primary factors that influence consumer’s purchase decision ofFMCG products in Bangladesh. These factors are Sales Promotion, Unavailability of Brand, Time Constraints,In-Store TVC, Variety Seeking Behavior, Product Features, End of Aisle Display and Product Convenience. Thisstudy recommends focusing on three important factors i.e. Sales Promotion, Time Constraints and Unavailabilityof Brand to smoothen the progress of the FMCG industries in Bangladesh. The FMCG industries will find betterdevelopment opportunities if the findings of this study are used as input in their strategic decision making.Keywords: FMCG, Consumer Preference, Actual Purchase, Sales Promotion, Unavailability of Brand, TimeConstraints, In-Store TVC, Variety Seeking Behavior, End of Aisle Display, Product Convenience.1. Statement of the ProblemThe Bangladeshi FMCG sector is one of the largest sectors in the country’s economy. It has strong MultiNational Company (MNC) presence and is characterized by well established distribution networks, intensecompetition between the organized and unorganized segments and low operational costs (PPFAS, n.d.). Being adeveloping economy, Bangladesh is gradually becoming a large market especially for the Fast MovingConsumer Goods or FMCG. In the last few years the FMCG industry in Bangladesh has experienced dramaticgrowth; both qualitative and quantitative improvements have occurred in the consumer durable items (Hamid etal. 2008). While purchasing the high involvement products like- electronic goods, luxury items or lifestyleproducts, the prior in-home decisions of purchase are not usually altered in the store environment. On thecontrary, for the convenient and low involvement products like- salt, flours, pens, chocolates etc., a significantlevel of distortion from the prior decision of brand choice is frequently observed (Russo, Medvec & Meloy,1996). These convenient and low involvement products are also known as Fast Moving Consumer Goods(FMCG) in marketing. For the marketers, it is very difficult and sometimes impossible to track consumers’ brandpreference. Marketers may form any consumer’s intention to buy and help him to facilitate his purchasingprocess by providing essential information. According to Perner (n.d.) the final decision of which brand to buyfrom available brands comes from an internal information processing that marketers can never fully influencefrom outside. Sometimes after deciding which brand to buy, consumers change their decision at the time ofactual purchase from the retail outlet. The end result of any marketing activity is to persuade the prospective 1
  2. 2. European Journal of Developing Country Studies, Vol.2 2006 ISSN(paper)2668-3385 ISSN(online)2668-3687 www.BellPress.orggroup of consumers to acquire what the marketers are offering in the marketplace in exchange of consumers’money. To accomplish this goal, marketers are constantly applying diversified marketing tools to influence theconsumers to buy their offerings. Companies are striving to attain the higher portion of their consumer’s walletthrough fierce marketing strategies. Every marketer dreams to have his products stocked exclusively in theshelves of his consumer’s homes. However, in marketing, it is always said that, “In the end, the consumer isking!” (Richard P. Gee, n.d.). This study focuses around identifying the factors significantly influencing theconsumers’ preferences for the FMCG products during actual purchase from the retail outlets.2. Literature ReviewFast Moving Consumer Goods (FMCG) are the products that are sold quickly at relatively low prices. Thoughthe profit made on FMCG products are relatively small in terms of retail sales, they are generally sold in largequantities in wholesale. So, the cumulative profit on such products can be large. Brand Careers Glossary (n.d.)states that FMCG is an expression used to describe frequently purchased, low cost, low involvement, convenientconsumer items, i.e., snack foods, cleaning products, stationeries, and toiletries etc. The main characteristics ofFMCG’s from the consumers perspective are- frequent purchase, low involvement (little or no effort to choosethe item - products with strong brand loyalty are exceptions to this rule) and low price. Additionally, from themarketers angle, the main characteristics of FMCGs are- high volumes, low contribution margins, extensivedistribution networks and high stock turnover (Majumdar, 2004).There are other definitions regarding FMCG from various viewpoints. Fast Moving Consumer Goods are usuallylow priced and low risk products that require very little thought when purchasing on a daily basis (Food &Safety Promotion Board, 2005). Examples of FMCG generally include a wide range of frequently purchasedconsumer products such as toiletries, cosmetics, oral hygiene products, shaving products and detergents, as wellas other non-durables such as glassware, light bulbs, batteries, stationary products and plastic goods. FMCG mayalso include pharmaceuticals, consumer electronics, packaged food products and soft drinks, although these areoften categorized separately.Some of the best known examples of multinational FMCG companies in Bangladesh include Colgate-Palmolive,Reckitt Benckiser, Nestlé, Unilever, Procter & Gamble, Coca-Cola, Kraft, PepsiCo etc. Some national FMCGcompanies are Square, PRAN and ACI etc. One of the thrust areas of interest could be FMCG segments givenBangladeshs large population with progressive increase in purchasing capacity (Rashid, 2010). Bangladesh sawa growth of over 8% for the year 2003-04. These findings on growth trends around the fast emerging south Asiansub-regional consumer market were released by research firm AC Nielsen. Bangladesh has discovered thecatalytic effect of lower unit packs as an evolutionary path. In Bangladesh, changes in consumers’ buyingbehavior and aggressive distribution by marketers have helped the branded packaged goods to hold the sector’sgrowth. Categories such as hair oil, detergents, milk powder and toothpaste recorded double digit growth rates(Business Standard, 2004). US giants like Proctor & Gamble and Johnson & Johnson have already recordedencouraging surge in sales of their products in Bangladesh. The FMCG market watchers say good performanceof Unilever, having around $500 million dollar annual turnover in Bangladesh, might have opened the eyes of$80 billion plus P&G and $60 billion plus Johnson & Johnson on Bangladesh’s fast growing market of middle-class consumers (Positive Bangladesh, 2011).This is consistent with previous industry studies and with research conducted by marketing academics whichfound that approximately 50% of grocery purchases can be classified as ‘unplanned’ (POPAI Special Report1978; Kollat and Willet 1967; Park et al. 1989). Consumer promotions constitute a significant part of themarketing effort of consumer nondurable (Neslin et al. 1985). For products sold in supermarkets, point-of-purchase promotion is particularly attractive, because the large proportion of grocery purchase decisions aremade after entering the store. A recent study by the Point-of-Purchase Advertising Institute (POPAI) found thattwo-thirds of supermarket purchases are the result of an in-store decision (Agnew 1987).Brand choice probabilities is an opportunistic state as a function of prevailing marketing activity (e.g., feature,display, and price) and the consumers established preferences for the brands in the category. It is well knownthat the mechanism governing the purchase decisions of consumers is influenced by marketing mix variables(‘non-stationary’) and that it varies over the population (‘heterogeneous’) (Wagner & Taudes 1986).Findings from the study of Morrison in 1966 argued that consumers can be characterized based on their brandpurchasing patterns within a product class (cited in Kahn & Raju 1991). For example, some consumers purchasebehavior can be characterized as reinforcing, i.e., a tendency to repurchase the last brand bought (Morrison 1966;Jeuland 1979, cited in Kahn & Raju 1991), while other consumers purchase behavior can be characterized as 2
  3. 3. European Journal of Developing Country Studies, Vol.2 2006 ISSN(paper)2668-3385 ISSN(online)2668-3687 www.BellPress.orgvariety-seeking, i.e., a tendency to shift away from the last brand purchased (Givon 1984; Kahn et al. 1986;Lattin & McAlister 1985; Lattin 1987, Kahn & Raju 1991).Advertising is the vehicle used by producers to inform consumers of the existence and attributes of their brands.The effect of advertising on sales or market share of a firm is probably the most researched relationship inmarketing. Advertising encourages consumers to try a new brand or a brand they have not bought for a long time(Givon & Horsky 1990). One potential consequence of these promotions is their tendency to accelerateconsumer purchases. That is, in response to a promotion, consumers may buy more quantity of the productcategory, or buy at an earlier time (Blattberg et al. 1981, Shoemaker 1979, Wilson et al. 1979). A number ofmarketing researchers suggested that dealing patterns might influence purchase behavior (Krishna 1991, Winer1986).Previous research on state dependence indicates that a brands purchase probabilities vary over time and dependon the levels of inertia and variety seeking and on the identity of the previously purchased brand (Chintagunta1998). Study of Kahn and Raju (1991) indicates that, for a minor brand, price discounts have a relatively largereffect for the reinforcement segment than for the variety-seeking segment. Conversely, for a major brand, pricediscounts have a relatively larger effect for the variety-seeking consumers than for the reinforcement consumers.Lee and Labroo (2004) suggest that consumers prefer brands that are easy to recognize and brands whoseinformation is easy to understand. Earlier research has shown that ease of processing may be perceptual orconceptual in nature. Perceptual processing is feature-based, and has more to do with ease of recognition.Perceptual processing ease benefits brand choice in situations where all the brand choices are present in theenvironment as in a supermarket.2. Conceptual FrameworkDepending on the findings of the previous studies and exploratory research, twenty variables are primarily beingconsidered for analysis. It is assumed that these twenty variables generally affect consumers’ brand preferencefor FMCG in store environment. Variables are Sales Promotion, Point of Purchase Advertising, Product Feature,Product Display, Competitive Pricing, Dealing Pattern, Ease of Recognition, End of Aisle Display, In-StoreTVC, Salesperson Influence, Unavailability of Preferred Brand, Attractive Packaging, Convenience, VarietySeeking Tendency of Consumer, Influence of Other Customers, Store Environment, Time Constrain, CashConstrain, Delightful Mind of Consumer and Level of Involvement of Consumer. The framework is clarified infigure 1.3. Methodology3.1 Data CollectionThe research is descriptive in nature, as it tends to portray what actually works as the motive for changing thepredetermined brand while purchasing the FMCG products from the store. Secondary data was used to constructthe basic framework of the study before proceeding with primary data. Primary data was collected from a groupof respondents through structured questionnaires by personal in-home interview procedure.3.2 SamplesPrimary data was collected from a group of 143 respondents from Dhaka City, Bangladesh. The respondentswere selected through the convenience sampling technique, since the procedure is less time consuming and moreconvenient.3.3 Analysis TechniquesIn the first step of the study, some variables were identified which may have effect on consumer decisionmaking at store environment through exploratory study on previous research works and focus group discussionwith small group of respondents. In the second phase, a statistical analysis was conducted on those previouslyidentified influential variables on the basis of primary data collected through survey. The questionnaire consistedof two parts; first part elicited the basic demographic information of the respondents through some close endedquestions and the second part drew out the respondent’s attitude toward twenty statements through the five pointLikert scale. Each statement represented a variable that is being studied in this research. Likert scale is one of themost prominent scales to researchers that are used to find the level of agreement or disagreement of therespondent toward any statement of interest.Two statistical techniques had been used to analyze the data. These were descriptive statistical analysis 3
  4. 4. European Journal of Developing Country Studies, Vol.2 2006 ISSN(paper)2668-3385 ISSN(online)2668-3687 www.BellPress.orgtechniques (i.e. mean, standard deviation, frequency etc.) and multivariate statistical analysis technique (i.e.Factor Analysis). Factor Analysis is a class of procedure primarily used for data reduction and summarization. Inmarketing research, there may be a large number of variables, most of which are correlated and which must bereduced to a manageable level. Relationships among sets of many interrelated variables are examined andrepresented in terms of few underlying factors. It is an Interdependence Technique, in which an entire set ofinterdependent relationship is examined (Malhotra 2008). The marketing and social science literature is abundantwith applications of factor analysis (Churchill 1987; Timm 1975; Urban and Hauser 1980). This widely usedstatistical technique is frequently employed by researchers who wish to identify a relatively small number offactors or underlying dimensions that can be used to represent relationships within a large variable set (Stewart1981).4. Findings and DiscussionsThe demographic profile of the sample respondents are presented in Table 1 & 2. From Table 3 it is evident that44% people still buy the FMCG products from the small local stores. Another 37% people like to buy thoseproducts from the groceries in the local markets. Only 17.5% of the people prefer the super/mega shops as theirchoice for purchasing FMCG products. Table 4 also shows that, 58% of the people go for purchasing FMCGproducts more than twice in a month. On the other hand, 22.4% of the people go for shopping those productstwice in a month. Another 19.6% people keep only one day in a month for shopping FMCG products.Cronbachs α is a coefficient of consistency and measures how well a set of variables or items measures a single,one-dimensional latent construct. Some professionals, as a rule of thumb, require a reliability of 0.70 or higher(obtained on a substantial sample) before they will use a scale (Maccallum et al., 1996). Obviously, this ruleshould be applied with caution when α has been computed from items that systematically violate its assumptions.In our study the Cronbachs α value is found 0.761 (see Table 5) which is more than the standard value of 0.70.Therefore, it is assumed that the variables are very reliable for the study.Result in Table 6 shows that the KMO value is more than .60 (actual is .684) which authenticates the adequacylevel of sample as tested by the KMO and Bartletts Test. So obviously the data support the use of factor analysisand suggest that the data may be grouped into a smaller set of underlying factors.Moreover the significance value of Bartletts Test of Sphericity is less than .05 (actual 0.00). Clearly the Bartlettvalue has to be significant as for expecting relationships between the variables and if a factor analysis is going tobe appropriate.5. AnalysisFrom the study, it was found that eight factors are responsible for altering consumers’ preference from thepredetermined FMCG brands while they perform the actual shopping at the retail store. Those factors are SalesPromotion, Unavailability of Brand, Time Constrain, In-Store TVC, Variety Seeking Behavior, Product Features,End of Aisle Display and Product Convenience (see Table 7).Those eight factors explain almost 64.065% variance in the data. Among them the leading factor, SalesPromotion influence mostly in altering consumer brand choice with an Eigenvalue of 3.885 and able to explain19.426% variance. Other leading factors are Unavailability of Brand (Eigenvalue 1.773), Time Constraints(Eigenvalue 1.455) and In-Store TVC (Eigenvalue 1.298). Unavailability of Brand means the out of stocksituation of any particular brand. Time Constraints implies the allocation of limited time by consumer forshopping particular product. These three factors can explain 8.867%, 7.277% and 6.490% variance in datarespectively. Rest four factors are presented in a descending order in Table 7 based on respective Eigenvalues.The study has selected the factors which are being extracted for having Eigenvalues over 1. Several moreaccurate methods for retaining factors are often grouped under the rubric of ‘rules of thumb’ (Gorsuch 1983;Zwick & Velicer 1986), among which the scree test is readily available, frequently used, and usually providessatisfactory results. The Cattell-Nelson-Gorsuch (CNG) scree test (Gorsuch, 1983) gives a statistical test for thispoint and contended that with principal components analysis the scree test usually produces cutoffs nearEigenvalue = 1.00. Here, the cumulative variance of the study is 64.065%. The rotated factor loadings matrixsummarizes the structure by indicating which variables associate primarily with which factors. Based on thenotion of ‘simple structure’ (Thurstone, 1947), here the word ‘structure’ is to denote the identification for eachvariable of the factor with which it is primarily associated, these variables have been classified with specificfactor loadings into 8 specific factors. The cumulative variance confirms that the study result is quite acceptable 4
  5. 5. European Journal of Developing Country Studies, Vol.2 2006 ISSN(paper)2668-3385 ISSN(online)2668-3687 www.BellPress.orgas the extracted factors should account for at least 60 percent of the variances. DeVellis (2003) claimed that avalue of .70 as the lowest acceptable bound for Cronbachs alpha, although some claim it may decrease to .60 inexploratory research (Hair et al., 1998).Therefore, considering the evidence, the revised model of factors influencing the purchase decision of FMCGproducts in Bangladesh is presented in figure 2.6. RecommendationsSome recommendations are prescribed below based on the findings of this study. These recommendations willbe worthy if aligned with FMCG Company’s marketing decision making.FMCG companies should focus more on the small local stores and groceries for their promotional activity,combining both the push and pull strategies. Consumers of Bangladesh still prefer those shops over super/megashops for FMCG product purchasing as it is evident from this research finding (see Table 3). Since most of theconsumers purchase FMCG products more than twice in a month, FMCG companies can generate a stream ofsale throughout the year. But to do so, those companies need to establish a strong market position by creatingpositive image among the prospective customer groups through various innovative and strategic marketing toolslike promotional events, sponsorship, viral marketing etc.Sales Promotions are found to be the most effective tools for generating sale of FMCG’s. Companies maydevelop well defined, objective based, short term sales promotion strategies to gain market advantage over theircompetitors. Focus has to be given both on sales promotion and trade promotion. Sales person should be wellchosen and trained, since they play a vital role in facilitating consumer choice decision at the time of actualpurchase of FMCG products from the shop.An effective distribution system is the most significant issue in product marketing. Since it was proved throughthe factor Unavailability of Brand that the consumer generally switches to another brand if their preferred brandis not available at the time of purchase, the FMCG companies have to ensure the distribution of their productsalong with other promotional activities to the door step of the consumer. A perfect synchronization betweenpromotional activities and distribution is very crucial in this regard.Another important factor that influences the FMCG consumers is Time Constrain. FMCG products are lowinvolvement in nature, so consumers want to spend the least amount of time possible for purchasing them.Consumers want to spend the majority of their time and effort to high involvement products. Point of purchaseadvertisements like buntings, cutups, posters, stickers is very much applicable in these cases for gatheringconsumer attention at the last moment. And in case of low involvement products, grabbing the attention maysometime increase the chance of sales. Some innovations have to be come out from the FMCG companies tomake this marketing tool more attractive to the consumer.Besides these factors, there are other factors i.e. In-Store TVC, Variety Seeking Behavior of the Consumers,Product Features, End of Aisle Display and Product Convenience which merit the FMCG companies’ attention.For last few years, markets of FMCG products are experiencing different reformations. The increasing threatposed by generic products, pricing pressure through initiatives such as Everyday Low Pricing, and the ever-growing options for consumers have made the marketers’ task tough. In some categories, formerly popularbrands have been deleted, squeezed between the category leader and lower cost competitors. Therefore, theFMCG industry will find a better development opportunity if it uses the findings of this study as the input oftheir decision making strategies.7. Limitations and Directions for Further ResearchLike all research, there were some constraints that were faced during this study. Respondents do not actuallyknow what they really feel about the area of the study. It was difficult to extract the answer required withoutactually experiencing it. Respondents were busy enough with their own lives and jobs. They do not have a lot oftime for analyzing the real experience of that specific situation of this study. This study can provide an insightinto the future either by asking people what they plan to do or extrapolating from past or present trends. Thereare problems with this approach however. People often do not know what they will do in the future and whatthey think they will do is often very different from what they actually do. Also, in a fast-changing environment,extrapolation from the past is highly unreliable (Makridakis, 1996). 5
  6. 6. European Journal of Developing Country Studies, Vol.2 2006 ISSN(paper)2668-3385 ISSN(online)2668-3687 www.BellPress.orgThe majority of the samples in this study were students. Many arguments exist, both in favor and against theconvenience samples containing students. Several authors, including Beltramini (1983), Oakes (1972) havespecified the dangers of using student samples in research. They have commonly mentioned threats to externalvalidity as their prime concern, arguing that students are atypical of the general population; therefore anyfindings based on student samples may not be generalizable to other populations (Cunningham, Anderson Jr. andMurphy 1974). Still, some scholars diverge on this concern. Oakes (1972) argue that such arguments areunfounded because regardless of what population is sampled; generalization can be made only with caution toother populations. As generalization of the finding with student subjects is limited; this research, having majorityof the samples as students, may experience the same consequences. Thus, future research should consider bettersamples, combining more people with occupations other than students in an attempt to replicate the modeldeveloped in this study that would allow for greater external validity.Only generic FMCG product class was considered for evaluation in this study. Bur there are many types ofFMCG products within this class, each with their own different characteristics. For example, there are highlyperishable FMCG products i.e. meat, fruits and vegetables, dairy products, baked goods etc. There are alsoFMCG products having high turnover rates i.e. alcohol, toiletries, pre-packaged foods, soft drinks, cleaningproducts etc. Future studies must explore how the proposed model in the present research works for a widerrange of FMCG product types, situations, settings, and populations. A finding’s failure to replicate its results isevidence of its limit to the generalizability of the relation. However, when a finding does replicate its results, thescope of the relation is extended.According to a recent study by the Nielsen Company, ‘aspirational’ products i.e. breakfast cereals, cold cream,fragrances and chocolates will drive the future of the consumer products industry in the neighboring countryIndia. As the present research took place in Bangladesh, this future trend will certainly be of an impact in here.To capture the business opportunities and lead in these markets, marketers must make decisions based on an in-depth understanding of the competitive environment and consumer demands in their own sector (Moodi, 2005).Moreover, key impulse products such as biscuits, chocolates, salty snacks and confectionery, which areessentially unplanned purchases for instant gratification, are clocking high double-digit growth rates and rapidincrease in retail presence (Mukherjee, 2011). Further research should offer enough variety in terms of FMCGproduct types in addition to the generic FMCG product class used here. Especially, certain FMCG product typesi.e. aspirational FMCG products, key impulse FMCG products, highly perishable FMCG products, high turnoverFMCG products etc. deserve more focused, extensive empirical future studies on Bangladeshi context.ReferencesAgnew, J. (1987), "POP Displays are Becoming a Matter of Consumer Convenience," Marketing News, 9: 14.Beltramini, R. F. (1983), “Student Surrogates in Consumer Research,” Journal of the Academy of MarketingScience, 11 (Fall): 438-443Blattberg, R. C., Eppen, G. D. et al. (1981), "A Theoretical and Empirical Evaluation of Price Deals ForConsumer Nondurables," The Journal of Marketing, 45(1): 116-129.Chintagunta, P. K. (1998), "Inertia and Variety Seeking in a Model of Brand-Purchase Timing," MarketingScience, 17: 253-270.Churchill, Gilbert A., Jr. (1987), Marketing Research: Methodological Foundations, Chicago, Illinois: TheDryden Press, 756-777.Cunningham, W. H., Anderson, T. Jr. and Murphy, J. H. (1974), “Are Students Real People?” Journal ofBusiness, 47 (July): 399-409DeVellis, R. F. (2003), Scale Development: Theory and Applications, Sage Publications, Inc.Gorsuch, R. L. (1983). Factor analysis, 2/E Hillsdale, NJ: Erlbaum.Givon, M. (1984), "Variety Seeking Through Brand Switching," Marketing Science, 3(1): 1-22.Givon, M. and Horsky, D. (1990), "Untangling the Effects of Purchase Reinforcement and AdvertisingCarryover," Marketing Science, 9(2): 171-187.Hair, J. F., Anderson, R. E. et al. (1998), "Multivariate Data Analysis Upper Saddle River." Multivariate DataAnalysis, 5/E, Upper Saddle River.Jeuland, A. P. (1979), "Brand Choice Inertia as One Aspect of the Notion of Brand Loyalty," Management 6
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  8. 8. European Journal of Developing Country Studies, Vol.2 2006 ISSN(paper)2668-3385 ISSN(online)2668-3687 www.BellPress.orgJournal of Consumer Research, 13(2): 250-256.Zwick, W. R., & Velicer, W. F. (1986). “A Comparison of Five Rules for Determining the Number ofComponents to Retain”. Psychological Bulletin, 99:432-442.Web ResourcesBrand career glossary (n.d.), Brand channel, viewed on 12 December 2010,http://www.brandchannel.com/education_glossary.aspBusiness Standard (2004), Pakistan, Bangladesh pip India in FMCG race: AC Nielsen survey, viewed on 15 May2011, http://www.business-standard.com/india/news/pakistan-bangladesh-pip-india-in-fmcg-race-ac-nielsen-survey/199287/Food and safety promotion board (2005), Business 2000, viewed on 12 December 2010http://www.business2000.ie/pdf/pdf_8/fspb_8th_ed.pdfMukherjee, W (2011), ‘Aspirational goods to drive FMCG growth: Study’, The Economics Time, 25 February2011, Viewed on 20 May 2011, http://articles.economictimes.indiatimes.com/2011-02-25/news/28634134_1_consumer-products-indian-fmcg-aspirational-productsMoodie, M (2005), ‘FMCG business continuing to boom in China says new ACNielsen report’, The MoodieReport, Viewed on 19 May 2011, http://www.moodiereport.com/document.php?c_id=1178&doc_id=8001Perner, L. n.d., Introduction to marketing, viewed 28 January 2011,http://www.consumerpsychologist.com/marketing_introduction.htmlPositive Bangladesh (2011), US MNCs May Expand Business in Bangladesh Market, viewed on 18 May 2011,http://positivebangladesh.wordpress.com/category/business-development-at-bangladesh/Rashid, M 2010, ‘Investing in Bangladesh’, The Daily Star, 30 May 2010, viewed on 28 April 2011,http://www.thedailystar.net/newDesign/news-details.php?nid=140571Richard P. Gee (n.d.), Customer is King, Viewed on 10 February 2011,http://www.geewiz.co.nz/downloads/Customer_is_King.pdfParag Parikh Financial Advisory Services Limited (n.d.), FMCG Sector: Indian Companies GoingConglomerate, Viewed on 14 April 2011,http://www.moneycontrol.com/news_html_files/news_attachment/2008/IC_FMCG_Sector_PPFAS_Sep08.pdf Table 1: Respondents’ Demographic Profile (I) EducationGender Frequency (%) Age Frequency (%) Level Frequency (%)Male 74 51.7 < 15 Years 3 2.1 Below SSC 6 4.2Female 69 48.3 16 - 25 Years 82 57.3 SSC 6 4.2 26 - 35 Years 33 23.1 HSC 52 36.4 36 - 45 Years 15 10.5 Graduate 58 40.6 > 45 Years 10 7.0 Masters 16 11.2 Above Masters 5 3.5Total 143 100 Total 143 100 Total 143 100 Table 2: Respondents’ Demographic Profile (II) Profession Frequency (%) Income Range Frequency (%) Govt. Service 4 2.8 < 5,000 TK 81 56.6 Service to Local Private Company 26 18.2 5,001 - 10,000 TK 22 15.4 Service to MNC 5 3.5 10,001 - 15,000 TK 5 3.5 Professionals 4 2.8 15,001 - 20,000 TK 15 10.5 Teacher 6 4.2 20,001 - 25,000 TK 6 4.2 Business 4 2.8 25,001 - 30,000 TK 8 5.6 Student 83 58.0 Above 30,000 TK 6 4.2 Others 11 7.7 Total 143 100 Total 143 100 8
  9. 9. European Journal of Developing Country Studies, Vol.2 2006 ISSN(paper)2668-3385 ISSN(online)2668-3687 www.BellPress.org Table 3: Respondents Store Preference Store Choice Frequency Percent (%) Small Local Store 64 44.8 Grocery in Local Market 54 37.8 Super Store 25 17.5 Total 143 100.0 Table 4: Respondents Purchase Frequency Occurrence Frequency Percent (%) Once in a Month 28 19.6 Twice in a Month 32 22.4 More than Twice in a Month 83 58.0 Total 143 100.0 Table 5: Reliability Statistics Cronbachs Alpha N of Items 0.761 20 Table 6: KMO and Bartletts Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy. 0.684 Approx. Chi-Square 522.265 Bartletts Test of Sphericity Df 190 Sig. 0.000Table 7: Factors Affecting the Consumers to Switch from the Predetermined Brands While Actually Shopping FMCG in the Retail Outlet Factor Variance Cumulative Factor’s Name Eigenvalues Number (%) Variance (%) 1 Sales Promotion 3.885 19.426 19.426 2 Unavailability of Brand 1.773 8.867 28.293 3 Time Constrain 1.455 7.277 35.570 4 In-store TVC 1.298 6.490 42.060 5 Variety Seeking Behavior 1.185 5.926 47.986 6 Product Features 1.109 5.545 53.532 7 End of Aisle Display 1.089 5.447 58.978 8 Product Convenience 1.017 5.086 64.065 9
  10. 10. European Journal of Developing Country Studies, Vol.2 2006 ISSN(paper)2668-3385 ISSN(online)2668-3687 www.BellPress.org Influential Variables Influential Variables1. Sales Promotion 11. Unavailability of Preferred Brand2. Point of Purchase Advertising 12. Attractive Packaging3. Product Feature 13. Convenience4. Product Display 14. Variety Seeking Tendency of Consumer5. Competitive Pricing 15. Influence of Other Customers6. Dealing Pattern 16. Store Environment7. Ease of Recognition 17. Time Constrain Purchase Intention8. End of Aisle Display 18. Cash Constrain Purchase Decision (for FMCG)9. In-Store TVC 19. Delightful Mind of Consumer10. Salesperson Influence 20. Level of Involvement of Consumer Figure-1: Conceptual Framework of Factors Influencing the Purchase Decision of FMCG Products 10
  11. 11. European Journal of Developing Country Studies, Vol.2 2006 ISSN(paper)2668-3385 ISSN(online)2668-3687 www.BellPress.orgFactor-1: Sales PromotionVariance Explained 19.426%Factor-2: Unavailability of BrandVariance Explained: 8.867%Factor-3: Time ConstrainVariance Explained: 7.277%Factor-4: In-store TVCVariance Explained: 6.490% Purchase Intention (for FMCG) Purchase Decision (Total Variance Explained: 64.065%)Factor-5: Variety Seeking BehaviorVariance Explained: 5.926%Factor-6: Product FeaturesVariance Explained: 5.545%Factor-7: End of Aisle DisplayVariance Explained: 5.447%Factor-8: Product ConvenienceVariance Explained: 5.086% Figure-2: Revised Framework of Factors Influencing the Purchase Decision of FMCG Products 11

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