Are Indian customers ready for family pack sized product?

Rustomjee Business School

Rasik Bhatte Danish Shaikh

02 46

UNDER THE GUIDANCE OF Dr. Hanif Kanjer Founder and Dean (RUSTOMJEE BUSINESS SCHOOL) 1st January 2013

ACKNOWLEDGEMENT
We would like to express our profound gratitude to all those who have been instrumental in guiding us through our research .We express our sincere thanks to Dr. Hanif Kanjer founder and dean of Rustomjee Business School for giving us this opportunity. We are deeply grateful to Mrs.Shipra Bhatia, our project guide, for the cooperation extended by her to conduct this study, advising us on the project report and furnishing the required information. We would also like to thank the faculty for their constant support. Last but not the least we would like to thank my parents and friends for their constant help and support.

INTRODUCTION
Many companies launching their products in family pack sized packets. To offer products in a family pack is one of the strategies most marketers adopt as a successful business gimmick. This strategy works best both for the end-users and the marketers alike. Earlier Indian consumer were instead of putting money in buying commodities in advance, they used to shop frequently by purchasing small amount of commodities. One of the reasons for this buying pattern was lack of economical prosperity. But now India is growing economy and income level of middle class is rising. Today people dont have much time for everyday shopping. Consumption level is also increasing. In towns big malls are coming up where people give preference to buying in large quantity in advance. By considering this ecosystem many FMCG companies are already launched and coming up with new family pack sized product. But where is the place of these products in Indian consumers basket? Many of the family packed sized product we dont consume at a time. FMCG companies are generating wants for family packed sized product by, Relating them with family, Idea of eating with sharing, Giving discounts, Attractive packaging etc. FMCG companies generating Wants for their family pack sized product but is there Demand for family pack sized product?

RESEARCH METHODOLOGY
As market gets more competitive, at times it becomes more crucial to not merely understand but even anticipate consumer requirements. Concepts of marketing thus tell us that success in business thus greatly dependent on identifying the consumer needs and satisfying them better than competition. Briefly put, marketing research is process of identifying consumer needs and determining how best to satisfy them. Research design can be thought of as the structure of research -- it is the "glue" that holds all of the elements in a research project together. The research process consists of the following steps: PROBLEM RECOGNITION AND DEFINITION HYPOTHESIS GENERATION DEFINING OBJECTIVES OF RESEARCH SAMPLING DATA COLLECTION QUESTIONNAIRE DESIGN DATA ANALYSIS CONCLUSION LIMITATION

1.

STATEMENT OF THE PROBLEM

The study is done to determine the reason as to which 1) Are consumers ready to buy family pack size product or not 2) To find consumer demographics who purchase family pack product 3) Why Consumers choose a particular brand

2. PROPOSED RESEARCH HYPOTHESIS

Once the actual problem has been articulated, the next step is to transfer them into testable hypothesis. When confronted with a given situation, we tend to make assumption about its

causes. Similarly hypothesis are assumptions about the possible causes of issue in hand in the organisation. We test these hypothesis for validity of our assumptions. Following are the hypothesis:1.More than 50% buyer of family pack products buy family sized pack over normal pack it because of discounts. 2.Amount spend on the purchase of family pack sized product is dependent on the size of the family

3. OBJECTIVES OF THE STUDY To examine the demographic profile of the current users of family pack products. To study the recent trends. To evaluate the amount spend by consumer on family pack product. The major benefits desired in a family pack by the users over regular pack.

4. SAMPLING Sampling: - Sampling means method of studying from few selected items, instead of entire big number of units. The Sampling unit: - Consumers of family pack product including students, housewives, working men etc. The size of the sample: 63 Sampling Technique: - Simple Random sampling without replacement This method chooses n number of units from population in such a way that each of unit of population has equal probability of being selected. Simple random sample: However, this does not guarantee that a particular sample is a perfect representation of the population. Simple random sampling merely allows one to draw externally valid conclusions about the entire population based on the sample.

5. TYPE OF RESEARCH Exploratory research The major objective of exploratory research is to identify and define the scope of the problem. It allows researchers to generate and test the Hypothesis. Also it allows the perceptual mapping of the company and competitors. It is opposed to pure research which is not problem-oriented but for the increase in knowledge which may be used in future.

6.

DATA COLLECTION

a. Primary Data: Primary data has been collected using Survey. Surveys are almost necessity for collecting wide variety of data including those on behavior, attitude awareness, satisfaction level etc. The key point here is that the data you collect is unique to you and your research and, until you publish, no one else has access to it. Degree of Structure: -Structured and indirect (close ended questions) Mode of primary data collection: - Internet b. Secondary data: Secondary data has been obtained from the internet. Secondary data analysis saves time that would otherwise be spent collecting data and,

7. QUESTIONNAIRE DESIGNING Following are the factors determine Questionnaire designing:1) Objective of the research: - Structured questions of dichotomous or the multiple choice questions are most suited for information needed on the behavior. They provide satisfactory answer of the what, when, how, how much, aspects of the information. 2) Sampling unit: - The demographic characteristics of respondents such as age, occupation should be taken into consideration while making questionnaire. 3) Data collection method: - Data collection method also decides how many and what structured questions should be ask. Online survey gives us flexibility of asking numbers of questions but these questions should be self explanatory as chances of misinterpretation of questions on internet survey are high.

DATA ANALYSIS AND INTERPRETATION

The process organization, and interpretation of numerical data, especially the analysis of population characteristics by inference from sampling is known as Data Analysis and Interpretation. The world is full of observations that can be made, but not every observation constitutes a useful piece of data. All scientists make choices about which data are most relevant to their research and what to do with that data: how to turn a collection of measurements into a useful dataset through processing and analysis, and how to interpret those analyzed data in the context of what they already know. The thoughtful and systematic analysis and interpretation of data allow it to be developed into evidence that supports scientific ideas, arguments, and hypothesis.

Proportion Test
Proposed Hypothesis : Null hypothesis Ho= More than 50% buyer of family pack products buy family sized pack over normal pack it because of discounts. 50% buyer of family pack products buy family sized pack over normal pack it because of discounts. P=.50 More than 50% buyer of family pack products buy family sized pack over normal pack it because of discounts. P>.50

Alternative Hypothesis

Ha=

Tail Test Alpha Probability

Right tail Proportion test 0.05 0.95

Out of total 58 family pack users, 27 consumers opted for family pack because of discounts which they get. Z obs.=(p'-p)/sqrt(p.q/n) n x p p' q Z critical Z observed 58 27 0.5 0.47 0.5 1.64 (0.53)

Z observed lies in acceptance region. We accept null hypothesis. Therefore 50% or not more than 50% buyer of Rejection region Z cri.=1.64

Acceptance region Z Obs=-.53

family pack products buy family sized pack over normal pack it because of discounts.

2)Chi Square test

Proposed Hypothesis: Null Hypothesis Alternative Hypothesis Tail Test Alpha Probability Amount spend on the purchase of family pack sized product is dependent on the size of the family Amount spend on the purchase of family pack sized product is independent on the size of the family Amount spend on the purchase of family pack sized product is Not independent on the size of the family

Ho= Ha=

Right tail Proportion test 0.05 0.975

Observed

Monthly amount spend on the purchase of family pack product <500 rs. 500-1000 rs. 0 0 11 2 8 21 1000-2000 rs. 0 0 5 1 0 6 2000-5000 rs. 0 0 1 0 3 4 Total 1 3 28 12 14 58 % 2% 5% 48% 21% 24%

No. of individuals in family

2 3 4 5 6 Total

1 3 11 9 3 27

Expected
2 3 4 5 6

Monthly amount spend on the purchase of family pack product <500 rs. 500-1000 rs. 0.36 1.09 10.14 4.34 5.07 1000-2000 rs. 0.10 0.31 2.90 1.24 1.45 2000-5000 rs. 0.07 0.21 1.93 0.83 0.97 0.47 1.40 13.03 5.59 6.52

No. of individuals in family

(fo-fe)^2/fe
2 3 4 5 6

Monthly amount spend on the purchase of family pack product <500 rs. 500-1000 rs. 0.36 1.09 0.07 1.27 1.69 1000-2000 rs. 0.10 0.31 1.53 0.05 1.45 2000-5000 rs. 0.07 0.21 0.45 0.83 4.29 0.61 1.84 0.32 2.09 1.90

No. of individuals in family

F(critical)=

=CHIINV(probability, deg. freedom)

Degree of freedom= (5-1)*(4-1) =12

=4.40

F (Observed)= X = (fo-fe)^2/fe 20.51 P value= 0.06 P > Alpha Therefore we reject null Hypothesis.

Non rejection region F crit. = 4.40

Rejection region

F obs.= 20.51

Also F observed lies in the rejection region. Therefore we accept alternative Hypothesis. Therefore Amount spend on the purchase of family pack sized product is Not independent on the size of the family

3)ANOVA
Proposed Hypothesis : For Reasons Null hypothesis Alternative Hypothesis For Gender Null hypothesis Ho: Ha : There is no significant difference in the 'reasons for selecting family pack over small pack'. There is significant difference in the 'reasons for selecting family pack over small pack'. There is no significant difference in the male and female while selecting family pack over small pack.

Ho:

There is no significant difference in the gender while selecting family pack over small pack.

Alternative Hypothesis

Ha :

There is significant difference in the gender while selecting family pack over small pack.

Reasons for selecting family pack over small pack

Attractive packaging and look Discounts Ease of purchasing

Gender Female 0 9 6

Male 6 18 19

Test - ANOVA: Two-Factor Without Replication Alpha = .05 SUMMARY Count Attractive packaging and look 2.00 Discounts 2.00 Ease of purchasing 2.00 Female Male ANOVA Source of Variation Rows(Reasons) Columns(Gender) Error Total 3.00 3.00

Sum 6.00 27.00 25.00 15.00 43.00

Average 3.00 13.50 12.50 5.00 14.33

Variance 18.00 40.50 84.50 21.00 52.33

SS 134.33 130.67 12.33 277.33

df 2.00 1.00 2.00 5.00

MS 67.17 130.67 6.17

F 10.89 21.19

P-value 0.08 0.04

F crit 19.00 18.51

For Reasons P value(.08) > Alpha(.05)

Acceptance region F Obs=10.89

Rejection region F cri.=19

F critical(19.00) > F observed(10.89) Therefore F observed lies in the acceptance region. Therefore we accept the null hypothesis. There is no significant difference in the 'reasons for selecting family pack over small pack'. For Gender P value(.04)< Alpha (.05)

Acceptance region F cri.=18.51

Rejection region F Obs=21.19

F critical(18.58) <F observed(21.19) Therefore F observed lies in the rejection region. Therefore we accept the alternative hypothesis. Therefore There is significant difference in the gender while selecting family pack over small pack.

Conclusion
From the first Hypothesis testing we can conclude that half or more than half of the people buy family pack size product not because of discounts. There may be different reasons for these consumers to select family pack size over normal pack. Which also supported by our last hypothesis testing which result stated that there is no significant difference in the reasons for selecting family pack over small pack? Thats why companies should not only positioned their family pack sized product as discounted product but also can promote differently like currently lays promoting Lays Party Pack. Lays tries to relate its large packet of lays chips with enjoyment with sharing, partying. Whereas with PepsiCo Indias impeccable record of innovations, Mirinda introduced Home Pack for the entire family, Priced at an amazingly affordable price of only Rs 32/- for a proprietary 1-litre PET bottle. Mirinda tries to associate itself with family as well as affordability. Also the amount spend on the family pack size product is also dependant on the size of the family. Because families with fewer numbers of individuals, may not needed that big quantity of product. So they may be buying small sized product. One of the conclusion we drawn from the hypothesis testing is such that There is significant difference in the gender while selecting family pack over small pack. Because there is different psychological factors affects the buying behavior of both male and female. One factor which motivate female, may not influence on males buying behavior.

Limitations
a) Geographical limitation: Our survey has limited to two locations viz Virar and Thane and Mumbai b) Sample size is limited to sixty three. Due to time constrain and limited resources, we are unable to expand our sample size.