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Market Research on Consumer Preference towards Detergent Sector


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All about consumer behavior, psychology and purchase intentions.

All about consumer behavior, psychology and purchase intentions.

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  • 1. Title: Market Research on Consumer Preference towards Detergent Sector.Author Details – Name: Arnab Roy Chowdhury. Affiliation: Student, UnitedWorld School of Business. E-mail Address:
  • 2. ACKNOWLEDGEMENT:I express my sincere gratitude to Ms. Sapna Choraria for giving me the opportunity to undergothis project. I, further, thank her for lending me a helping hand in solving my problems related tothe project. This project would not have been possible without her valuable time, constantsupport and inspiration. I also thank UnitedWorld School of Business for providing me anopportunity to undertake a skill basis project at this crucial stage of my life, while pursuingMBA, which helped me to understand the topic, that was untouched before, deeply. Anysuggestions for improvement are always welcome.
  • 3. ABSTRACT:Due to rapid urbanization, emergence of small pack size and sachets, the demand for thehousehold products is flourishing. With the increase in per capita income and wide range ofchoices being available, the consumers are mainly focusing on these products. The companiesare finding it difficult to survive or to retain their market share due to changing trends in demandand high peak competition. In order to lure the consumers, companies study the quantity beingpurchased by the customers and at what price. Here, I am trying to confine myself to thedetergent market in Uvarshad village, Gandhinagar (Gujarat) and find out how certain factorsaffect the demand of consumers for detergent.Keywords: consumer preference, purchase intention, customer satisfaction, brand position,price, consumer psychology and peer influence.Source:Journal of Brand Management (2012) 19, 712–734. doi:10.1057/bm.2011.6; published online 23 March 2012.
  • 4. IntroductionDetergent is a material used to assist cleaning. The term ‘detergent’ is sometimes intended todifferentiate between soap and other surfactants used for cleaning. It refers specifically toclothing detergent rather than hand soaps or other types of cleaning agents. Plain water is used tomix detergent for cleaning purposes. Probably the most widely used detergents are soaps ormixtures composed chiefly of soaps. However, not all soaps have significant detergency andalthough the words ‘detergent’ and ‘soap’ are sometimes used interchangeably, not everydetergents are soap. This terminology is sometimes used to refer to any surfactant, even when itis not used for cleaning. So it should be avoided as long as the term ‘surfactant’ itself isavailable. The size of the detergent market is estimated to be Rs. 12,000 Crores.Types and Composition:There are several factors that dictate what compositions of detergent should be used, includingthe materials and clothes to be cleaned, the apparatus to be used and types of dirt. For instance,all of the following ingredients are used to clean glass and utensils. The sheer range of differentdetergents, that can be used, demonstrates the importance of context in the selection of anappropriate glass-cleaning agent:• A chromic acid solution—to get glass very clean for certain demanding purposes such asanalytical chemistry.• A high-foaming mixture of surfactants with low skin irritation—for hand washing of dishwarein a sink or dishpan.• Any of various non-foaming compositions—for dishware in a dishwashing machine.• Other surfactant-based compositions—for washing windows with a sponge, followed byrinsing.• An ammonia-containing solution—for cleaning windows with no additional dilution.
  • 5. Research Objectives:The following project has been given in order to make me understand the real environment of themarket in which research is conducted. Marketing research, being a very important field of studyin management, can only be learned through practically working in the markets. The subject ofthis study, being an FMCG product, forced me to go and interact with the households and knowtheir buying intention, preferences and expectations from the detergents they use. My objectivewas to find out what are the salient features that led the consumers to switch from one brand toanother. In this assignment, I have defined my research objectives as follows:-• To identify customer needs.• To find out the customers’ frequency of use of detergent in a month.• To find the various ways by which the customers wash their clothes/ dishes.• To find the brand loyalty of the customers.• To find the qualities they look for while buying a detergent.• To study the reasons that made the customers switch from their previous brands.• To find the mode of communication through which they came to know about the qualities oftheir present brand.• To find the number of times the customers switch from one brand to another.• To find the role of packaging in the purchase behavior of a product- quantity.• Consumers’ awareness about the harmful effects of the detergents.The objectives, hence, paved the way for the exhaustive research that I conducted in this field, toelaborate and analyze separately in order to get a complete and a dynamic overview.Market Research:Market research is any organized effort to gather information about markets or customers. It is avery important component of business strategy. The term is commonly interchanged withmarketing research. However, expert practitioners may wish to draw a distinction that marketingresearch is concerned specifically about marketing processes, while market research is concernedspecifically with markets. Market research, as defined by the International Code on Market andSocial Research, includes social and opinion research and the systematic gathering andinterpretation of information about individuals or organizations using statistical and analyticalmethods and techniques of the applied social sciences to gain insight or support decision making.
  • 6. Experiences and Difficulties Encountered in the Field:The survey, conducted as a part of my curriculum, provided loads of experience to me. However,the fact that some difficulties and experiences were encountered while performing the taskcannot be overlooked. They are listed below:-Difficulties: • Since I am from West Bengal and not so familiar with the local language (Gujarati), so I had communication problems with the local people in some areas. I got my task done by speaking in Hindi. • Not much importance was given to me, at the beginning, by some of the households. I was greeted with much reluctance. Later when I made it clear to them that for what reasons I am conducting this survey, then only some people rendered help and provided some relevant data. Still in some cases, I was given contradictory answers which seemed to show that they were trying to get over from the questionnaires as soon as possible. Experiences: • Simply I got an understanding of how the door-to-door salesman might feel when they are turned away from the gate itself while marketing their products. • This survey provided me some first-hand knowledge of how real life surveys are conducted by organizations involved in market research. • I was able to understand the mentality of the consumers varying from rural areas to urban areas. It also gave me a clear idea regarding the effect of income and personal experiences while indulging in purchase. • It is also found that brand loyalty still exists irrespective of income if the product satisfies the desired needs of the consumers. For example, Sunlight was used by families of high income while Surf (which is costlier) was used by some of the families falling under lower income category. • Though many a times consumers were confused while answering the questions, yet it was surprising to see that in most cases, both men and women were equally knowledgeable about the product and gave satisfactory answers.
  • 7. Research Process:• Choosing the research problem.• Review of related literature.• Collection of data.• Interpretation of data.• Preparing the research report.Major Detergent Brands:NIRMA - Washing PowderThis product, when launched in the domestic market, created a wonder. In 1969, when the priceof the detergents was so excessive that for most of the people, it was a luxury item. Nirmaensured a tremendous potential market segment. The product was priced lower as compared toother competitive brands for consumer attraction. The consumers became loyal to this brand,helping it to over-take the decades’ old brands, due to its unique environment-friendly andphosphate-free formulation. This brand had been ranked as the “most widely distributeddetergent powder brand in India” as per All India Census of Retail Outlets during a surveyconducted by The Economic Times, on March 11, 1997 and carried out in 435 urban towns.WHEEL:It is the most dominant market leader in the detergent segment. Wheel washing powder is knownfor its great cleaning ability with minimum effort. The superior formulation of this product isenhanced with the power of lemon, which not only removes the tough dirt in your cloth, but alsoleaves a pleasant lemon fresh fragrance after washing. The convenience provided by Wheel hasrelieved many housewives from the laborious laundry process of the traditional bar soaps.ARIEL:Ariel is a detergent made by Procter & Gamble. It was the first detergent with stain-removingenzymes. It was a powder designed for twin-tub and top-loading washing machines. With theclimb in popularity of automatic front-loading washing machines, a suitable low-variant waslaunched in the early 1970s. In 2003, Ariel brought out its quick wash action to its detergents, toallow consumers to be able to do their laundry on a quick wash cycle. In 2006, Ariel started its"turn to 30" campaign to inspire consumers to wash in cool water so that the energy can besaved. Ariel launched a concentrated version of their liquid detergents named Ariel Power in the
  • 8. spring of 2008. In October 2008, Ariel launched their new Excel Gel product which can be usedin temperatures as low as 15 degrees Celsius.SURF EXCEL:It was the first Fast Moving Consumer Goods (FMCG) for Detergents.• Surf was the first brand of detergent that was advertised on TV. It is advertised on more than300 channels across the globe.• Introduced the concept of bucket wash to housewives who till then used to wash clothes withlaundry soaps.• Surf Excel launched in 1954, is one of the oldest detergent powders in India. Initially, the brandwas positioned on the clear proposition of “whitened wash”.• HUL is now re-working the Surf Excel strategies by moving away from positioning the brandon functional benefits so as to build an emotional connect.TIDE:Tide is the name of a popular laundry detergent in the market of Canada, the United States andother countries. It is manufactured by Procter & Gamble. Tide is the world’s oldest & mosttrusted detergent brand and is the market leader in 23 Countries around the world. It waslaunched in India in middle of the year 2000. It gives outstanding whiteness due to its anti re-deposition global technology. Anti-agents help to keep soils away from re-settling on clothesafter they have been removed during the wash. The brand, being a relatively new entry in India,has only two types of products namely ‘Tide detergent’ and ‘Tide bar’. Tide detergent isavailable in India in packs of 200 gm, 500 gm, 1 kg, 2 kg and 20 gm single use sachets. Tide baris available in 75 gm, 125 gm, 200 gm bars.
  • 9. Major Competitors:In washing powder, HUL is the leader with 38% of market share. Other major players are Nirma,Proctor & Gamble, Ghari and Henkel.
  • 10. SWOT Analysis: Strengths: Weakness: 1. Low operational costs. 1. Not well diversified product portfolio. 2. Strong research and development. 2. Not present where market potential is high like hair 3. Present in more than 125 shampoo. countries. 3. Weak advertising. 4. Presence of established distribution network in both 4. Low exports levels. rural and urban areas. 5. Less scope of investing in 5. Presence of well-known technology and achieving brands in this sector. economies of scale, particularly in small sectors. Opportunities: Threats: 1. Available rural market. 1. Can lose market share to rivals if distribution 2. Increase in purchasing channel does not perform power of consumers due to well. rise in income level. 2. Removal of import 3. Export potentials. restrictions so as to replace 4. Large domestic market with domestic brands. a population over one 3. Need to come out with billion. more umbrella brands. 5. High spending on consumer 4. Tax and regulatory goods. structure.Source:
  • 11. 4 P’s Analysis:Product - A product consists of tangible and intangible attributes which satisfy the need, wantand desire of the consumers. The product includes the following variables:- • Brand name. • Product innovation and range. • Quality, safety and functionality. • Packaging and labeling of the product. • Style, shape and design. • Warranty and services.Similarly, detergents fall under the category of fast moving consumer goods that are needed ondaily basis. Consumer preference on detergent products generally depends on the product’squality, safety, functionality and packaging of that product.Price - A study on various data, regarding the market operations, is needed in order to fix aproduct’s selling price. The selling price of a product depends upon the cost of production, brandposition, evaluation of the competitors and the price perceived by the consumers. The priceinfluences the choice and image of the product in the consumer’s mind. Price plays a vital role inthe sale of a product and often creates huge impact on both the producers as well as thecustomers. Price includes the following variables:- • Use of pricing policies and strategies. • Discounts offered so as to attract customers. • Terms of debit or credit sale.Sometimes, price of the detergent and other few schemes related to price proves to be a decisivefactor for which consumers prefer an alternative brand.Promotion - The main target of an organization along with its specialist group of employees isto set up promotional campaigns, provide innovative ideas on advertisements, and come up withlucrative schemes for the promotion of the product in the market and attract a large number ofconsumers. Promotion includes matching up with new trends and technology. Promotions alsodecide the segmentation targeting and positioning of the product. The right kinds of promotionsaffect all the other three variables – the product, price and place. It deals with advertising, salespromotion, including promotional education, publicity, and individual selling of a particular
  • 12. product. Promotional activities are very much necessary for the companies of this industry as itestablishes good rapport with the consumers. Advertising gives information and guidance toconsumers. Along with advertisement, personal selling is also significant and helpful formotivating the customers to buy a specific product. Certain sales promotion techniques have afavourable impact on consumer psychology.Place - It involves physical distribution which means delivery of goods at the right time and atthe right place to consumers. For large-scale distribution of detergents, the services ofwholesalers, retailers and various other market inter-mediaries are required. Distribution ofgoods comprise of certain variables that are given below:- • Types of inter-mediaries available for distribution. • Transportation, warehousing and inventory control for making the product available to consumers easily. • Distribution centers along with order processing. Literature Review:The review of literature is directed towards consumer preferences for detergents. However, therewas a research that addressed consumer preferences for fast moving consumer goods. This studyis stimulated by concerns with lots of access to local markets. Topics of this research workinclude consumer preferences on detergent products, consumers’ attitudes regarding the brandimage, consumer preferences for global as well as domestic brands, and its country-of-origin.Today’s detergent industry has seen considerable change in its customers’ purchasing patterns.Consumers are depending on their psychological satisfaction. They are also searching for moreconvenience in retail shopping. As a result, they are willing to pay more for products that arequick and easy to use and have huge stock in the market. Faced with a highly competitive marketand an ever decreasing direct marketing channel, branding has become very important forproducers to gain a competitive advantage in the market place. Brand image provides consumerswith a familiarity that increases convenience in grocery shopping.Influential Factors while buying a particular detergent:According to a group of consumers, the ‘whiteness’ that the detergent provides, is one of themost vital influences while buying the detergent. The second most influential factor is its‘gentleness on hand’. Other important factors include ‘good stain removing capacity’ and ‘easyon fabric’.
  • 13. Convincing powers of various schemes:There are certain schemes that are launched to promote sales, prove effective when the customergoes to purchase that product. Majority of the consumers supported this fact.Suggestions provided by the consumers: Suggestive points Number of people Change in price 05 Change in fragrance 08 Different quantities available 02 No comments 05Major influencers while purchasing a product: Factors of influence Number of people Friends & Relatives 08 Self-experience 02 Advertisements 05 Neighbours 03 Others 02Quantity usually purchased: Quantity Number of people Upto 500 gm 10 500 - 1000 gm 06 1 - 2 kg 03 More than 2 kg 01
  • 14. Packaging Preference:Packets, upto 500 gm, are the straight away winners with 50% of the consumers coming underthis category while few uses packs ranging between 500 gm to 1 kg and the rest is left out.However, jars were also preferred (during its time) because of its multi-utility purpose after theusage of the primary product.Brand Image:Every brand has its specified image in front of the consumer which is known as brand image. Itis the overall impression in the consumers’ mind about a product after gathering informationabout it from various sources. Generally, brand image means a set of beliefs which is held abouta specific brand. It represents the present position of the brand in the market. Here, the image ofthe branded products is clearly reflected in the minds of the consumers who prefer to purchasethose particular products. The brand image needs to be showcased to the customers, but how? Itis basically received through the loyalty, perceived quality and awareness regarding the productsto be purchased. Thus, the impact of the brand image remains in the customers’ mind for a longperiod of time and it helps them while purchasing any branded products.Country of Origin:The earliest detergent substance was undoubtedly water; after that oils and then wet sand and wetclay. The oldest known detergent for wool-washing is stale. Other detergent surfactants camefrom sand ox bile. The detergent effects of certain synthetic surfactants were noted in 1913 by A.Reychler, a Belgian chemist. In the late 1960s biological detergents, containing enzymes, bettersuited to dissolve protein stains, were introduced in the USA by Procter & Gamble.The first companies to manufacture detergents in India were HUL and Swastik. HUL marketedSurf between 1956 and 1958 and began manufacturing it from 1959 while Swastik launched Det,a white detergent powder, in 1957. By 1960, Det had made rapid inroads in eastern Indiawhereas Surf, a blue detergent powder, became the national market leader with dominantpositions in the west; north and south. In the early 1960s, the total volume of detergentsmanufactured in India grew from around 1600 tonnes to 8000 tonnes. HUL dominated themarket with a share of almost 70 % compared to its competitors.Role of price:The customers, who are loyal towards their respective brands, do not intend to buy diversebranded products. Price along with the consumer income plays a significant role towards the saleand purchase of a product. These lead to the segmentation of the consumers into two parts: highincome group people who tend to purchase expensive products and other is the average or lower
  • 15. income group of people who try to maintain their budget while opting for their products as pertheir preferences.Peer Influence:It is one of the important factors influencing consumer behavior towards detergent productsbecause it is a psychological phenomenon of human beings. Through exposure to social models,consumers acquire knowledge, skills and dispositions needed to make purchase decisions. Thedegree of a person’s exposure to other sources of information, such as television, influences theconsumer behavior. Celebrity endorser, typical youth themes of rebellion, individuality, freedom,confidence and boldness, persuades consumers to get influenced for these types of products.Style Statement:Style statement is again an important role influencing consumer preference towards washingproducts. It is also a psychological domain of human beings. Here, style statement can be seen intwo perspectives: firstly, low priced items are purchased for few days and then they are disposed.Secondly, there are high-end customers who buy expensive and quality products purposefully forless or bulky use, but with the brand, which will take them to higher level of the social circle.Methodology:This quantitative study investigates the coefficient effect of independent variable upon proposeddependent variables. This study targets people from the local village. Data has been collectedfrom 20 respondents, including both male and female, with the help of a structured questionnairedeveloped on the basis of previous research studies.Limitations:• The responses are dependent on the verbal behavioral pattern.• Depends on the purchase intention of the people.• Influence of celebrities and brands.• Lack in post marketing strategies.Implications:The economic influence has created a distinct class and has an impact on the society. The growthof economy has lead to the stratification of social recognition among the civilized world and thishas fueled the increase in consumption rates of luxury brands. Status is symbolized by the brandpurchases and resembles the quality of life. The customer preference is definitely influenced bythe commercialization and globalization of the world trading system. This can be seen in thechanges in social value, economy, and culture. Western and developed countries have a direct
  • 16. influence and people adapt more in foreign cultures rather than orthodox systems as shoppingand fashion play major roles in lifestyle.Framework: BRAND COUNTRY IMAGE OF ORIGIN CONSUMER PRICE PREFERENCE PEER STYLE INFLUENC STATEMENT E
  • 17. Conclusion:It can be concluded that demand for this industry is set to boom and this will be driven by therise in share of middle class. Further, the upper end rich class will consume branded products andmaintain their status while the middle class, also known as consuming class, will thrive for massend products. Thus, spurt in the industrial sector growth is also likely to boost the urban as wellas rural consumption demand for detergents.References:Books and Authors - 1. Kotler’s ‘Marketing Management. 2. Rajendra Nargundkar’s ‘Marketing Research. 3. Dr. S.K. Laroiya (H.O.D. Economics Dept., ABS). 4. Journals of Management. 5. Applied Marketing.Internet (websites) - 1. 2. 3.