Date post: | 07-Jan-2017 |
Category: |
Marketing |
Upload: | kashyap-mitra |
View: | 973 times |
Download: | 4 times |
Consumer Behaviour Analysis
Kashyap MitraUnitedworld School of BusinessPGPM VI (2014-2016)
Wild Stone
• Leading male grooming brand with presence across multiple categories such as deodorant, talc, perfume, soap and shaving products.
• Is among the top three deodorant brands in the country.
• Believes in continuously offering new choices to their consumers, by constantly evaluating potential categories in the male grooming space.
Indian FMCG Market
• Fourth largest sector in the Indian Economy.• Expected to increase at a growth rate of 14.7%
to touch US$ 110.4 billion (INR 7019.50 billion) during 2012 – 2020.
• Rural FMCG market anticipated to increase at a rate of 17.7% to reach US$ 100 billion (INR 6358.24 billion) during 2012 – 2025.
2020 (F) 2015 (F) FY 12 FY 11 FY 10 FY 09 FY 08 FY 07 FY 060
20
40
60
80
100
120
FMCG MARKET SIZE
FMCG REVENUES ($ Bn)
Source : India Brand Equity Foundation (www.ibef.org)
Food Products43%
Personal Care22%
Fabric Care12%
Hair Care8%
Households4%
OTC Products4%
Baby Care2%
Others5%
Market break-up of Indian FMCG industry
Source : India Brand Equity Foundation (www.ibef.org)
2006 2007 2008 2009 2010 2011 2012 2013 2014 20150
1000
2000
3000
4000
5000
6000
INDIA GDP PER CAPITA PPP ($)
INDIA GDP PER CAPITA PPP ($)
(Source: www.tradingeconomics.com | World Bank)
Demand-Side Drivers
• Consistent GDP Growth. • Increasing Consumer Income. • High Private Consumption– India has a very high rate of private consumption of 61%.– Of that, a further 60% is due to retail spends - goods and
products that people consume, as opposed to services or essential consumption items like rent and education.
• Rising Urbanization– India has 70% of its population living in rural areas.
Deodorant Industry Overview
• Has come up very fast in the FMCG category.• Market size (2007): Rs. 283 Cr.• Market size (2014): More than Rs. 2100 Cr.• Fastest growing product in the FMCG category.• FMCG growth rate: 9%• Deodorant industry growth rate: 16%• India is the fastest growing deodorant market
in the world.
2007 2008 2009 2010 2011 2012 20140
500
1000
1500
2000
2500
Deodorant Market Size in India
Deodorant Market Size in India (Rs. Crore)
(Source: Euromonitor International)
Market Share
• According to an Economic Times report – based on the March 2014 quarter Nielsen data:– Fogg leads the market with 17% market share.– Followed by Park Avenue with 8%. – Axe has slipped to third place with only 6% market
share and its market share is now almost identical to Wild Stone.
The Market Leader: Fogg
• Owned and marketed by Vini Cosmetics.• Found out that deodorants can be differentiated
by having less gas and more perfume.• Guaranteed their customers to have 800 sprays
from a bottle of Fogg Royal priced at around Rs.200/- in 2014.
• The working functionality of Fogg was to have more number of sprays in a bottle.
The Market Leader: Fogg
• The functionality was also adopted well in the promotion of the product with the tagline ‘No Gas, Only Deo’.
• This kind of positioning was also different from the competition, including Axe, which emphasized only on the seduction aspect to sell their deodorants.
• Used a Rational Appeal instead of an Emotional Appeal.
Market Research
OBJECTIVE OF THE STUDY
To understand, analyse and compare consumer behavioural patterns and influencing factors.
METHODOLOGY
• Sampling Techniques:– Convenience Sampling– Snowball Sampling
• Sample Size: 336
DATA COLLECTION
• Instrument Used: Questionnaire.• Questionnaire Type: Closed ended and Open
ended.• Number of Questions: 20.
DATA ANALYSIS
• Techniques used: Pie Charts.• Statistical Tools used: Hypothesis testing.
Demographic Distribution: Break-up of age.
Age Group
15-20 21
21-25 160
26-30 107
31-35 37
36 & above 11
Total 336
15-206%
21-2548%
26-3032%
31-3511%
36 & above3%
Age Group
Demographic Distribution: Break-up of Occupation
Occupation
Student 147
Service 168
Self-employed 21
Total 336
Student44%
Service50%
Self-employed6%
Occupation
Consumer Preference
Gender Deodorant Users %
P. Deodorant Users %
Perfume Users %
Female 51 28 54.9 6 11.7 17 33.3
Male 285 208 72.9 64 22.4 13 4.5
Total 336 236 70.2 70 20.8 30 8.9
Hypothesis Testing• To test for the equality of two proportions, we can perform a
z-test.• Null Hypothesis (H0): p1 = p2 (deodorants are as popular to
women as to men)• Alternate Hypothesis (H1): p1 is not equal to p2• Result: z = -2.583• Table Value @ 95% level of confidence: 1.96• Therefore, |Calculated Value| > |Table Value|• Hence, we reject the null hypothesis, proving that the
deodorant market in India is dominated by the men’s deodorant category.
Brand PreferenceBrand Preference
Wild Stone 52
Park Avenue 33
Fogg 21
Engage 5
Axe 34
Layer 13
Wild Stone33%
Park Av-
enue21%
Fogg13%
En-gage3%
Axe22%
Layer8%
Brand Preference
Key Findings: Even though Fogg is the market leader, Wild Stone has a really good presence in this part of the country. Wild Stone’s Red and Park Avenue’s Good Morning are the two most popular deodorant fragrances in this region.
Brand Loyalty
Brand Loyalty
Non-switchers 118
Switchers 218Non-switchers
35%
Switchers65%
Brand Loyalty
Hypothesis Testing• Z-type test.• Null Hypothesis (H0): P=1/2 (the number of switchers =
the number of non-switchers)• Alternate Hypothesis (H1): P is not equal to ½ • Result: z = 5.55• Table Value @ 95% level of confidence: 1.96• Therefore |Calculated Value| > |Table Value|• Hence, we reject the null hypothesis that the number of
switchers and the number of non-switchers are the same.
Key Findings
• This acts both as an advantage and a disadvantage for Wild Stone or any other deodorant brands.
• It suggests that it might be easy for a brand to acquire customers from the competitors but at the same time it is very hard to retain customers as well.
Wild StoneHave you used Wild Stone?
Yes 173
No 155
This table shows that 53% of the sample size or 173 out of 336 people have used Wild Stone out of which only 52 are still using it.
• Good demand in the sub-urban regions due to a good relationship between the firm and the retailers and aggressive sales mechanisms.
• The problem lies within the urban areas - tough to convert non Wild Stone users into Wild Stone users, even though almost everyone has heard of and knows the brand Wild Stone.
Do you know about Wild Stone?
Yes 334Blank 2
New Deodorant
Interest in buying a new deodorant in the market
Yes 227 No 97Maybe 11
Yes68%
No29%
Maybe3%
Openness to Experience
Price
Reasonable price range100 - 149 4
150 - 199 88
200-249 188
250 & above 52
100 - 1491%
150 - 19927%
200-24957%
250 & above16%
How much is a customer is willing to spend on a deodorant
Influencing Factors
What influences you to make purchase decisions?
Advertisements 28Price 71Recommendations 41Fragrance 195
Advertisements8%
Price 21%
Rec-om
menda-
tions12%
Fragrance58%
Influencing Factors
Medium of PromotionMedium of Brand
AwarenessTVC 314Others 22
93% of the respondents said that they’ve come to know of Wild Stone through TV commercials.
• In the present-day scenario, due to technological advancements, people spend more time on the internet than watching TV.
• Almost non-existent online presence.• Last Facebook post: December 31st 2014.• No presence in other social networking sites such as
Instagram and Twitter.
Consumer Preference
Preference
Deodorant 236Perfumed Deodorant 70Perfume 30 Deodorant
70%
Perfumed Deodorant
21%
Perfume9%
Preference
Deodorants v/s Perfumed Deodorants
• Fogg leapfrogged their competition and became the market leader with the help of product innovation in the form of perfumed deodorants.
• Majority of the population still prefers using deodorants.
• Pareto Analysis: you can say that 80% of the market demands deodorants while 20% demands perfumed deodorants; where 80% of this 20% demand is catered by Fogg alone. (Used just as an example and these are not actual values)
Recommendations
• How to bridge the gap: intensive growth; integrative growth; and diversification growth.
• Wild Stone is looking into and integrative growth plan and aspires to have under them a full portfolio of men’s personal care products in order to increase their brand equity and sales volume.
• All deodorant brands are concentrating their focus on Perfumed Deodorants.
• In my opinion, what Wild Stone can do is to focus on Deodorants and not Perfumed Deodorants.
• The effort should lie in shifting from the “Market penetration” quadrant to the other quadrants.
New Market
• To maximize market share, you’ll have to maximize revenue by acquiring either new customers or by hijacking your competitor’s customers.
• Changing their target segment would not be feasible as they’ve already created a deep brand image within the mind of the customers.
• Rural FMCG market. (growth)• Smaller SKUs priced at around Rs. 99/-.
Focus
• This is where their focus on Deodorants instead of Perfumed deodorants will pay-off.
• The price-sensitive nature of the rural markets would make it hard, if not impossible, at this time for Perfumed Deodorants to be sellable.
• If the industry is going one way, this might be a good time for Wild Stone to go the other way.
Going Public
• ROI in the West Zone < East Zone.• To increase their market share, they need to
make an impact all over the country, not just in the Eastern region.
• Going public would be a good option.• They could use that capital in order to expand
their operations in the future.