dissertation giri[1]

8/7/2019 dissertation giri[1]

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PREFACE

In ancient times, tobacco was used as currency. Smoking, sniffing etc. are

some of the ways of using tobacco. Cigarette is the most sophisticated way of using

tobacco. Joint family system is no more in our society. Now its time of nuclear

family. Generation X believes in handsome earning and to spend it for him. He likes

to be fashionable and stylish. Today the search for style has taken over from the

desire to be fashionable. The ultimate effect of fashion is to make everyone alike,having style means accepting the broad flow of fashion but making it individual to

oneself.

The man of 21 st century earns huge amount; the basic necessities of life can be

satisfied with a few thousands of rupees. So he is left with remaining huge amount.

So now what to do with this amount? Therefore he indulges himself in drinking,

smoking, gambling etc. some do smoking just for killing the time, while some do it to

relieve themselves from tension. Smoking has to do with showing off too and

sometimes it gives boost to their self-esteem.

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INTRODUCTION

Marketing is very innovative field. Here nothing can be assumed. Whatever

innovative idea we generate, we have to test them and they must be supported by

proved results. For this, marketing research is very important. Consumer behavior is

one such aspect that is very difficult to measure by guesswork. Anything you say

about it, it must be based on reliable research. We are going to analyze the brand

loyalty of cigarette smokers. We have explained the rationale below.

What is brand loyalty?

Brand loyalty is something that every company strives for and believes theycan attain. All it takes is a bigger marketing budget, a new advertising campaign or

another creative agency. But ultimately the brand loyalty they aim for, that is a

consumer so loyally devoted to the brand that they buy it again and again, can

never be achieved because they place the emphasis of brand loyalty in the wrong

place. Companies assume that brand loyalty is something that the consumer does

for them, while in reality brand loyalty is something the company and the brand do

for their customer.

At its most basic, consumers can develop a brand habit, meaning that out

of habit they reach for a specific branded product without thinking. A brand habit

makes shopping easier and quicker and the eventual outcome of the purchase

predictable. When consumers buy laundry detergent or bath soap, they dont have

to contemplate all the various brands. They know which one works for them, and

that is the one they reach for. In other words, the consumer knows what to expect

from the purchase. No surprises, no worries.

A higher, more refined connection of consumer with brand is through a

special brand affinity. That is where some recognizable, inherent attribute of the

brand touches an emotional chord with the consumer. They feel connected to the

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brand on a personal level. Many consumers feel an affinity to Coke as the soft drink

linked with their youth. Other consumers feel affinity to branded products that they

display and that others see. The Polo logo, the Coach tag, the Mercedes hood

ornament, the Rolex watch label all say something about the consumer, who they

are, who they aspire to be. But are these branded consumers loyal? No, they feel

an affinity to the brand, but when they want to make a new statement about

themselves, their values, their ideals, and then they will choose another brand. So

one day, you feel in a Polo mood and another day youre in a Nike mood, and

another day you go for Gap.

Brands are far more than just a marketing concept or an asset on thecompanys financial statement. The brand is the contract between the company and

the consumer with the terms of the contract written in emotions. It is on the

emotional level that consumers connect to brands. Their passion, dreams and

desire are all involved with the brand.

Brand loyalty, therefore, is all about how well, effectively and completely the

companys brand satisfies the consumers needs, desires, and dreams. A brand isloyal to the consumer when it connects with the consumers emotional desires.

When that emotional connection occurs, the company may then be rewarded with

some special affinity the consumer feels for the brand which may influence them to

buy again. A brands loyalty to its customers therefore yields consumers having an

affinity for the brand. Truly connecting with the consumer on an emotional level is

the key to brand loyalty and consumer affinity.

In other words, brands are made for customers, not customers made for brands.

Peter Drucker said, Marketing is the whole business seen from the point of view of

its final result, that is, from the customers point of view. If we are to achieve

consumer affinity with our brands, we need to understand the consumer, what their

drives and desires are and how our brands fulfill consumer fantasies.

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Ultimately the challenge for brand marketers is all about connecting why the

consumer buys with how to reach them and where to reach them. How do we

connect? Simple, connecting is about talking less and listening more. It's about

giving more value, rather than taking more money. It's about being involved and

passionate about the customer, rather than waiting for the customer to get involved

with you. It's about connecting with the community and the things that matter to the

consumer. It's about creating your business to satisfy the needs of your customer.

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Design of the Study

Statement of problem:

The Indian Cigarette industry is extremely sensitive to excise taxation, which is the

single largest element in the price of cigarettes. High taxes on cigarettes compared

to other tobacco products have caused a decade long slump in cigarette volumes in

India.

Thus a project titled brand loyalty of cigarette in Bangalore city was

conducted to measure change in brand loyalty (here maximum increase in price is

25%), the change in brand loyalty in response to change in income (Maximum

30%), and to study the effect of freebies scheme on brand loyalty.

MAIN OBJECTIVES:

To study the changes in the brand loyalty in response to change in price

To study the change in brand loyalty in response to change in income.

To study the effect of freebies scheme on brand loyalty.

To study the importance that cigarette smokers attach to various attributes

(price, taste, filter etc.) while buying.

To study the effectiveness of a good advertisement of a new brand in terms

of its ability to attract consumers loyal to other brands.

SECONDARY OBJECTIVES:

To study the effect of non-availability of favorite brand on the brand loyalty of

smokers.

To study the impacts of new brand (price of which may be less than, equal to

or more than the price of their favorite brand) on the brand loyalty of

smokers.

To study the reasons for starting smoking.

To know the role of reference groups in selection of brand of a cigarette.

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Methodology

TYPE OF RESEARCH:

Descriptive method has been used in this research for the collection of data. As the

research is related to the study of consumer behavior, which can more effectively be

studied through direct questions, experimental research will not be much effective.

Also, considering the time constraint, descriptive research is the most suitable

design for this research.

SOURCE OF DATA:

To overcome the limitations of incompatibility, obsolescence, and bias, primary data

was collected. Considering the time and money constraints, sampling method of

data collection was suitable for the project.

DATA COLLECTION METHOD:

Data has been collected through questionnaire method. The questionnaire was

designed in such a way to cover as many aspects of consumer behavior aspossible.

SAMPLE SIZE:

Total 100 persons were contacted and interviewed.

SAMPLING:

Here study of the consumer behavior of the people of Bangalore. Within the city

samples were collected from different areas. To reduce the biases this may come

through difference in the level of income, attitude, lifestyle etc. of the people in

different areas.

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SAMPLE DESIGN

AGE-WISE AND INCOME WISE SAMPLE DESIGN

INCOMEGROUP

AGE GROUP

(In RS.) 12-17 18-24 25-40 41-50 >51 TOTAL 16000 2 7 5 6 2 22

TOTAL 9 33 29 20 9 100

Plan of analysisDifferent areas were selected of the city to do study so that the place bias could be

reduced to the best possible extent. Personal interview was made and got the

information as per the questionnaire. To reduce the magnitude of this problem, we

selected respondents whom we saw smoking at the shop so that the brand name,

expenditure etc. can be verified. Many of questions were designed to cross check

the answers of the respondents. The questionnaire was made as comprehensive as

possible to cover various aspects related to research. The questionnaires werehanded over only to those respondents who showed desire to fill up them on

themselves

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Limitations of study:

1) Since survey is conducted only in Bangalore this mean it doesnt reflect whole

population (smokers) in country.

2) This survey only done for males, since female smokers not socially

acceptable.

3) Sample size very small especially this kind of study sample size should high.

4) The views of the respondents are personal.

5) The sample size selected may not be adequate.

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Overview of Chapter Scheme

Chapte

r

Title Page

No

I Theoretical Background 1

II Design of Study 5

III Profiles 11

IV Analysis and Interpretation 20

V Findings, Recommendations and

Conclusion

39

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INDUSTRY PROFILE

The product features serve to characterize the modern international cigarette.

First, it is manufactured from types of tobacco leaf whose species and method of

curing both originated in the United States. Second, it is packaged and sold as a

branded product using marketing methods whose earliest exponents were American

firms. Third, it is a standardized product made using methods of mass production

which originally became known as the American system of manufacture, and on a

machine whose inventor was an American entrepreneur. In short, the modern

international Cigarette is an American invention. During the course of the twentieth

century this method of consuming tobacco rolled up in paperpractically unknownbefore the mid-nineteenth centuryhas come to prevail throughout the globe as the

most common form of smoking. The purpose of the present book is to explore the

process through which this global industry was established during the first half of the

twentieth century, and in particular to analyze the role played by the firm which

became the worlds leading international cigarette manufacturer; the British

American Tobacco Company, Ltd. (BAT Co.).

Cigarettes have existed in the history of mankind since the historical days.

The first Cigarettes that roll up with tobacco happened when Christopher Columbus'

people met the red Indians on Cuba in 1942.

The word tobacco originated from Indians' words: Tobago and tobacca.

Tobacco is related to garden vegetables, flowers, weeds, and poisonous herbs such

as potatoes, tomatoes, eggplant, petunias, jimson wood, ground cherries, and

nightshade.

Originally, Native Americans in the eastern United States grew Nicotiana rustica,

which was the first form of tobacco introduced in England and Portugal.

N. Tabacam, first introduced to the Spanish, was obtained from Mexico and South

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America. It has been the preferred tobacco since settlers in Jamestown, Virginia,

began growing it,

The Cigarette Industry is one of the oldest industries in India. It is an important agro-

based industry. It is highly Labour intensive and provides livelihood to about five

million people directly and indirectly

India is a major grower and exporter of tobacco in the world. Presently India is

among top three producers of tobacco in the world. Despite lower proportion of total

produce being exported Indian exports it figures among top 10 exporters of the

product in the world. In addition to being the largest contributor to government

coffers, the industry also provides employment to more than 26mn people in thecountry both directly and indirectly. The Indian tobacco is largely used for making

beedis and chewing products like khaini etc. Tobacco is a very peculiar crop; it is

grown in rain starved areas on soils which are otherwise not suitable for any other

crop. Thus it makes use of the least resources available to it, to give a produce

which provides so much to government coffers in terms of excise, exports as well as

employment that today the per acre earning of farmers from a special type of

tobacco is much higher than any other crop grown in the country.

There are various types of tobacco grown in the country but most of the exports of

tobacco by our county are of Flue Cured Virginia (FCV) type. The Indian tobacco

exported, is mostly used as filler in the international cigarettes. Infact like any other

agri-product, the characteristics of tobacco, its taste, its aroma and other properties

largely depend on the soil or area in which it is grown. Moreover cigarette smokers

are very particular about the taste, the aroma of their cigarette brand. So it becomes

extremely necessary to maintain the blend of tobacco used for cigarette

manufacturing to give the same quality product to consumers. This is to maintain

the consistency of taste of a brand.

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Capacity and Production

In India at present, there are 19 units in the organized sector engaged in the

manufacture of cigarettes with a total installed capacity of about 147.377 billion

pieces per annum. The production of cigarettes during 2001-02 was 60577 million

sticks. During the current year i.e. 2004-05 (April 2004 to February, 2005) the

production has been 45198.20 million sticks.

The cigarette and tobacco players face increasing protests from anti-tobacco

and health organizations. Globally as well as in India, the anti-smoking lobbying has

been gaining ground. The cigarette industry faces immense pressure with declining

volumes and increasing government regulations and taxation. Profitability of mostplayers has been affected. .In India Cigarette is an item falling under the First

Schedule to the Industries (Development & Regulation) Act, 1951 and requires an

industrial license.

Philip Morris is worlds largest cigarettes and processed Foods Company. It

has several popular cigarette brands such as Marlboro, Virginia Slim, Player, Basic,

Alpine, Cambridge, Merit, Parliament, Butts & Bristol. Its leading beer brands areMiller, Ice house, Red Dog, Fosters, High Life, Nelson, South Pole Light etc.

Globally the cigarette industry is the most heavily taxed and regulated. If anything,

in the developed markets, cigarette companies also have to contend with legal

problems. The scene is no different in India, vis--vis taxes. In fact, in three of the

past four years, the excise duty on cigarettes has been raised. Further, State

governments have also started levying a luxury tax on cigarette sales.

Until recently, taxation was the main hurdle for the cigarette industry. Now, in

addition to punitive taxation, the Government is coming down heavily on the

industry. The Centre has proposed legislation seeking to ban advertising and

smoking in public places. Taxes and regulation have now become the crucial

determinants of the industry's fortunes.

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ITC has continued to remain the cigarette industry in India the lone ranger. Its

revenue growth has consistently been above the industry's the past few years. The

company's presence in the premium segment has helped it considerably. Also,

ITC's brand strength in the filters segment has helped it capitalize on smokers

upgrading from non-filters.

Some of the brands of ITC are:

India Kings

Gold Flake

WillsScissors

Capstan

Berkeley

Bristol.

Some of the worlds leading brands:

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Benson & Hedges

Bond

Camel

Chesterfield

Davidoff

Dunhill

Gauloises

Gitanes

Karelia

Kent

L&M

Lucky StrikeMagna

Marlboro

Monte Carlo

More

Pall Mall

Parliament

R1

Rothmans

Sobranie

Vogue

West

Winston

RESPONDENTS PROFILE

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age w ise respondents distrubution

0

5

10

15

20

25

30

35

12 to 18 18 to 24 25 to 40 41 to 50 >50

age group

no of respondents

AGE-WISE AND INCOME WISE SAMPLE DESIGN

INCOME GROUP AGE GROUP

(In RS.) 12-17 18-24 25-40 41-50 >51 TOTAL

16000 2 7 5 6 2 22

TOTAL 9 33 29 20 9 100

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Income wise respondents distrubution

0

5

10

15

20

25

30

16000

Income group

no of respondents

The above graph shows that most of the respondents 33% were from in the agegroup of 18 to 24 followed by age group of 25 to 40.

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The above graph shows that maximum numbers of respondents were in 6001

12000 income group while the minimum numbers of respondents were in the

income group below 3000.

Education Level of respondents:

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0 5 10 15 20 25 30 35 40

NO OF RESPONDENTS

illitarate

utpto12th

undergraduate

graduate

p.g

Education level

The above graph shows that maximum numbers of respondents were graduate

while the minimum numbers of respondents were illiterate.

TABLE SHOWING BRAND LOYALTY AMONG VARIOUS AGE GROUPS

AGE/STATUS 12 - 17 18 24 25 - 40 41 - 50 51AND TOTAL

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ABOVE

NO. % NO. % NO. % NO. % NO. % NO. %

BRANDLOYAL 4 44.44 20 60.61 23 79.31 16 80.00 7 77.78 70 70.00

NOT BRANDLOYAL 5 55.56 13 39.39 6 20.69 4 20.00 2 22.22 30 30.00

TOTAL 9 33 29 20 9 100

AGE WISE BRAND LOYALTY

4 4 .4 4

6 0 .6 1

7 9 .3 1

8 0

7 7 .7 8

0 10 20 30 40 50 60 70 80 90

12to 17

18 24

25 - 40

41 - 50

51AND ABOVE

Brand loyalty(%)

Age group

Above graph shows that, Brand loyalty is low in age group 12-17.Brand loyalty isvery high in the age group of 41-50.From this study we can say that brand loyaltyremained high as the age increases.

According to this study, brand loyalty is determined by following criteria:

At the various level of price rise (from 15% to 25%), cigarette smokers should either

opt for smoking less quantity of the same brand or there should not be any change

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in the current buying pattern, but he must not go for another brand. Similarly, at the

various level of increase in income, they should either opt for smoking more quantity

of the same brand or there should be no change in the current buying pattern, but

he must not go for the other brand. He should not switch over to other brand, if other

brand introduces the scheme of free lighter (worth Rs.25) in return for ten empty

packets of its brand. The cigarette smokers who will pass all the above three criteria

will be considered as a brand loyal.

Who Is Brand Loyal With Respect To Free Gift Scheme Of Other Brand?

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Brand loyalty among various age group

7 7 .7 7

8 4 .8 4

9 3 .1

1 0 0

8 7 .5 5

0 20 40 60 80 100 120

12 to17

18 24

25 - 40

41 - 50

51AND ABOVE

Brand loyalty(%)

AgeGroup

Here, respondents who opted for no change in the current buying pattern will

be considered as the brand loyal. From the table itself, we can directly conclude that

scheme is ineffective for switching the brand loyalty of cigarette smokers

irrespective of their age group and income group.

TABLE SHOWING BRAND LOYALTY AMONG VARIOUS AGE GROUPS (if

offered free gifts)

AGE/STATUS 12 - 17 18 24 25 - 40 41 - 50 51ANDABOVE

TOTAL

NO. % NO. % NO. % NO. % NO. % NO. %

BRAND LOYAL 7 77.77 28 84.84 27 93.10 20 100.0 8 87.55 90 90.00

NOT BRANDLOYAL 2 22.23 5 15.16 2 6.9 0 00.00 1 12.45 10 10.00

TOTAL 9 33 29 20 9 100

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The above chart shows that free gift scheme is totally ineffective. Here the

respondents are loyal to their respective brands. The graph shows that free gifts

offered by other brands will not influence respondents in shifting their brands.

PREFERENCE TOWARDS ATTRIBUTES

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Attributes Respondents

PRICE 20

TASTE 50

FILTER 4TOBACCO 15

ADVERTISEMENT 6

OTHERS 5

TOTAL 100

PREFERENCE TOWARDS ATTRIBUTES

0

20

40

60

PRIC

TAST

FILT

E

TOBA

CC

ADVE

RTIS

EM

OTHE

R

ATTRIBUTES

% RESPOND

Attributes WeightageTaste 50%Price 20%

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Others 30%

OTHERS: (AROMA, FRAGRANCE, COLOR, PACKAGING)

The above chart shows that the most important factor in buying the cigarette is taste

and its weightage is around 50% and price is secondary factor which has got

around 20% weightage. Thus, we can conclude that taste is more important than

price and all the other attributes.

To find out whether the good advertisements of the new brand help in

switching the brand loyalty.

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REACTIONS NO. OF RESPONDENTS

TRY IT 21

ASK/INQUIRE FOR IT 12

IGNORE IT 67TOTAL 100

REACTION FOR GOOD ADVERTISEMENT

0

10

20

30

40

5060

70

80

TRY IT ASK/INQUIRE FOR IT IGNORE IT

Reaction

Respondents

Here, the respondents were shown cuttings of some popular advertisements and

were asked whether they have shown them earlier. Around 78% respondents

answered positively. This means that they are aware of the advertisements of other

brands but still prefer their regular brand. This shows that they have knowledge

about various brands but their buying decision is not affected by the advertisement

of other brands. The main reason behind showing the cutting of advertisements and

packets of various brands was to help them to recollect whether they have seen it

before.

INFLUENCING FACTOR IN ADVERTISEMENT

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PARTICULARS NO. OF RESPONDENTS

MODEL(S) 21FEATURES 12CONTENT 18

PRESENTATION 30NO INFLUENCE 19

OVERALL 100

INFLUENCING FACTOR IN ADVERTISEMENT

0

10

20

30

40

MODE

L( S

FEAT

URE

CONT

EN

PRES

ENTA

TI

NO IN

FLUE

N

FEATURES

RESPONDEN

Most of the respondents influenced by the overall presentation of the

advertisements. Youngsters are mainly influenced by the model(s) or punch line

(logo) of the brand. Mainly, the respondents who opted for logo or punch line tried to

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match their personality with the model or slogan (like Made for each other or

Discover a passion). So it is a psychological effect of advertisement on the

respondents.

About 67% of the respondents replied that even though it may have all the

factors, which they wanted in the advertisement, they would not switch to the new

brand only for the reason that its advertisement is good.

From the above analysis, we can conclude that good advertisement of the

new brand does not significantly attract the cigarette smokers to switch their brand

Main reason to start smoking:

REASONS NO. OF RESPONDENTS

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FRIEND CIRCLE 45TO SHOW OFF 9

OUT OF CURIOSITY 12

RELIEF OF TENSION 13

ADVERTISEMENT 8TIME PASS 13

TOTAL 100

Reasons to start smoking

05

101520253035404550

FRIEN

D CIRC

L

TO SH

OW OF

F

OUT O

F CUR

IOSIT

RELIE

F OF T

ENSIO

ADVER

TISEM

EN

TIME P

ASS

Reasons

Respondents (%)

From the above table, we can conclude that friend circle is the main reason behind

starting smoking. Advertisement has very little impact on the person to start

smoking, so advertisement is not the boost factor at the initial stage.

Effect of Reference Group on Brand Selection:

INFLUENCERS NO. OF RESPONDENTS

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FRIENDS 65

ADVERTISEMENT 21

SHOP OWNER 14

TOTAL 100

INFLUENCE OF REFERENCE GROU

0

10

20

30

40

50

60

70

FRIENDS ADVERTISEMENT SHOP OWNER

Influenses

Respodents(%

)

The above table shows that around 65% of respondents came to know their regular

brand from their friends. Only 21% of the respondents have selected the brand after

looking its advertisements. In short, reference group (friends and shop owners) has

strong effect on the selection of the brand.

AWARENESS OF ADVERTISEMENT OF OTHER BRANDS

AWARE NO. OF RESPONDENTS

YES 78NO 22

TOTAL 100

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0

20

40

60

80

Respondents(%)

Y ES NO

Response

Awaraness of Advertisement of other bran

The above graph, it shows that more than 60% of the respondents were aware of

advertisements of other brand. Whereas about 20% of them were not aware of the

advertisements.

MARKET SHARE OF VARIOUS BRANDS

MOST PREFERRED BRAND

BRAND NO. OF RESPONDENTS

GOLD FLAKE 37WILLS 20

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NO. OF RESPONDENTS

0

10

20

30

40

GOLD FLA KE WILLS CLA SSIC FOURSQUARE

BRISTOL OTHERS

Brands

Respondents

CLASSIC 21FOUR SQUARE 8

BRISTOL 9OTHERS 5

TOTAL 100

In research, the Gold Flake brand (king) popularly known emerged as the most

popular brand of cigarette, which accounts for around 37% and Wills classic and

Gold Flake were running neck-to-neck at 20%. Other brands of cigarettes include

555, Marlboro, Rothmans, etc.

PRICE OF NEW BRAND AND REACTION OF CIGARETTE SMOKERS:

REACTION PRICE OF NEW BRAND AS COMPARED TOREGULAR BRAND

LESS EQUAL MORETRY IT 34 23 15

ASK AND INQUIRE FOR IT 9 8 7

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IGNORE IT 57 69 78TOTAL 100 100 100

The above table shows that if the price of new brand is less than the regular brandof smokers, then 34% of smokers will try for the new brand. If it is equal, then 23%

smokers will try it. It means that price is important for about 34% of respondents,

while around 60% to 70% respondents ignored the new brand irrespective of their

price. For the Cigarette Company, they are strong brand loyal. But others either try

the new brand or inquire for it. If price is more, the numbers of smokers who opt for

trying the new brand are less than if the price is equal to their brand.

So far as the new company is concerned, the company should keep low price of the

cigarette as compared to their competitors so that brand loyal people at least try for

new brand. If desired taste were provided simultaneously, then it may be possible to

make them switching to the new brand.

On the detailed study of this table, found that mainly youngsters (age group of 12-17

and 18-24) and low income group people (up to Rs.6000) would opt for trying the

new brand if its price is less as compared to their regular brand. On the other hand,

people with high-income group (particularly above Rs.16000) have shown their

readiness to try the new brand even if its price is more than their regular brand.

Youngsters also show their readiness out of curiosity and to know its taste, provided

its price is not too high as compared to the regular brand.

From the analysis, it can be concluded that youngsters are mainly brand switchers

because they are at the initial stage of smoking and they are not habituated to a

particular brand. Their tendency is to taste various brands and choose their favorite

brand as the one, which is not too costly and at the same time provides other

attributes, which are required for a good brand of cigarette. This age group is more

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prices conscious as compared to age group of 25-40 yrs because youngsters (up to

the age of 24yrs) have limited pocket money or less earning.

BUYING AND CONSUMPTION PATTERN OF REGULAR SMOKERS AMONG

VARIOUS AGE GROUPS

Consumption pattern: less than 10 cigarettes per day

BUYING

PATTERNAGE GROUP

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12 - 17 18 - 24 25 - 40 41 50 51 &ABOVE TOTAL

NO. % NO. % NO. % NO. % NO. % NO. %

ONE OR TWOPIECES 5 100.00 13 81.25 11 78.57 9 69.23 3 60.00 41 77.36

WHOLE PACK 0 0.00 1 6.25 3 21.43 4 30.77 2 40.00 10 18.87

OTHERS 0 0.00 2 12.50 0 0.00 0 0.00 0 0.00 2 3.77

TOTAL 5 16 14 13 5 53

The above table gives information about the regular smokers who smoke less than10 cigarettes a day. As we move from age group of 12-17 to 51 and above, smokers

prefer to buy cigarettes in a pack instead of buying individual pieces. Youngsters

who fall in the age group of 12-17 and 18-24 prefer to buy individual pieces, even

though they have to pay higher price only because they cannot take it home.

Consumption pattern: 10 and more cigarettes per day

BUYINGPATTERN AGE GROUP

12 - 17 18 - 24 25 - 40 41 - 50 51 &ABOVE

TOTAL

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NO. % NO. % NO. % NO. % NO. % NO. %

ONE ORTWO

PIECES1 100,00 6 66,67 4 44,44 2 33,33 1 25,00 14 48,28

WHOLEPACK 0 0,00 3 33,33 4 44,44 4 66,67 3 75,00 14 48,28

OTHERS 0 0,00 0 0,00 1 11,11 0 0,00 0 0,00 1 3,45

TOTAL 1 9 9 6 4 29

The second table gives information about the smokers who smoke 10 or more

cigarettes a day. Usually cigarette smokers, who smoke more than 10 cigarettes a

day, buy in a pack. As we move from age group of 12-17yrs to 51 and above, the

ratio of cigarette smokers buying cigarettes in a pack increases. The interesting

point is that this ratio is higher as compared to the ratio of cigarette smokers who

smoke less than 10 cigarettes a day.

EFFECT OF NON AVAILABILITY OF FAVORITE BRAND ON BRAND LOYALTY

OPTIONS

AGE GROUP

12-17 18-24 25-40 41-50 51+ TOTAL

NO. % NO. % NO. % NO. % NO. %

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A 3 33,33 12 36,36 10 34,48 10 50 6 66,67 41

B 0 0,00 3 9,09 2 6,90 1 5 0 0,00 6

C 1 11,11 4 12,12 9 31,03 3 15 2 22,22 19

D 5 55,56 14 42,42 8 27,59 6 30 1 11,11 34

Total 9 33 29 20 9 100

A=GO TO ANOTHER SHOP AND BUY SAME BRAND

B=SMOKE BEEDI

C=POSTPONE BUYING

D=BUY ANOTHER BRAND OF CIGARETTE

From the above table, we can analyze that as the age group increases, respondents

to their sample size increases for option A. Similarly, it is a decreasing trend for

option D. As we move from age group 12-17 yrs to 51 yrs and above, % numbers of

respondents opting for option A increases. Reverse is the situation for option D.

This shows that non-availability of a favorite brand has much effect on the youngster

to switch their brand. Overall picture shows that around 34% of respondents go for

another brand of cigarette, means switching their brand. There are also respondents

who either smoke bidi or postpone buying at that time because they do not want to

switch the brand.

The overall picture can be represented by graph as shown below:

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0

5

10

15

20

25

30

3540

45

Respondents(%)

A B C D

Reaction

EFFECT OF NON AVAILBLITY OF BRAND

A=GO TO ANOTHER SHOP AND BUY SAME BRAND

B=SMOKE BEEDI

C=POSTPONE BUYING

D=BUY ANOTHER BRAND OF CIGARETTE

Availability of favorite brand is most important for the smoker. If it is not availablethen around 34% will go to another brand and around 25% who are brand loyal but

may be dissatisfied with the non-availability of their favorite brand. Only 41%

respondents are strong brand loyal with respect to availability of cigarette at a shop.

FINDINGS OF STUDY

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1. Brand loyalty rises with the increase in the age group.

Brand loyalty is low in age group 12-17 because they are new smokers, so they

tend to taste various brands keeping price in mind. While in age group 18-24, it is

high as compared to 12-17 age groups, because they are habituated to a particular

brand to some extent. For the same reason, number of brand loyal increases in age

group 25-40. Thereafter it stabilizes for the next two age groups.

2. People give more importance to taste as compared to other attributes.

It has found out that for all the income groups as well as age groups taste is the

most important attribute. Price is emerged as the second important factor. Students

and people whose income is below 3000 Rs. are more price conscious than other age groups and income groups. Packaging has no impact on smokers.

3. The advertisement of new brand does not help in switching the brand

loyalty.

Attractive advertisement of the new brand does not influence cigarette smokers to

switch their brand. Even though the most attractive model(s) or overall good

presentation of advertisement is provided by new brand, they will stick to the regular brand. So it fails to attract the significant smokers of other brand.

4. Most of the smokers tasted international brands

5. 67% respondents replied that they ignore advertisement of new brand.

6. Friends circle is main reason to start smoking.

RECOMMENDATIONS

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1. Availability of the favorite brand is most important for the brand loyal cigarette

smokers. Because of non-availability, they may try another brand. So physical

distribution and delivery on time at various outlets are very important.

2. A company should not introduce free gift scheme to attract the cigarette smokers.

3. Since taste is foremost important, if any company want enter market, taste should

be according to consumer taste.

4. Aggressive advertisement or promotional activity, it may help in trying the product

by smokers, but it not necessarily leads to brand switching.

CONCLUSION

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Advertisement does not have much impact on the non-smoker to start

smoking.

Friend circle is the influencing factor to start smoking.

Reference group (friends and shop owners) has strong effect on the selection

of particular brand.

A cigarette smoker will not shift from one brand to another on finding the

advertisement of the other brand more attractive.

Availability of favorite brand is of utmost importance for a cigarette smoker. If

it is not available, then around 34% of the respondent will switch to other

brand and 19% will postpone their buying or may be dissatisfied with the

company. So the delivery of the cigarettes on time to various outlets (shops)

is very important.

QUESTIONNAIRE

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1. Name:

2. Age Group:

a) 12-17 years d) 41-50 years

b) 18-24 years e) 51 and above c) 25-40 years

3. Educational Qualification:

a) Illiterate d) Graduate

b) Up to 12 th standard e) Post graduate

c) Under graduate

4. Occupation:

a) Businessman c) Professional

b) Serviceman d) Student

e) Others (specify)..

If answer is student, what is your source of income?

Amt. in Rs.

a) Pocket-money __________

b) Part/Full time job __________

c) Both a) and b) __________

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5. Income group [If respondent is dependent, then income of his family will be

considered.]:

a) 3000 & Below d) 12001-16000

b) 3001-6000 e) 16001 and above

c) 6001-12000

6. How often do you smoke?

a) Regularly (Daily) b) Occasionally

7. How many cigarettes on an average do you smoke?

Per day Per week Per month

Regularly

Occasionally XXX

8. If answer to Question No. 6 is occasionally, do you smoke the same brand every

time?

Yes No

9. Which single brand of cigarette do you smoke regularly?

__________________________________________

10. Since how long have you been smoking? (Mention Regular Brand)

_________Years ____________________________________

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11. Which brands of the cigarettes have you tried so far?

a) Wills Natural Light l) Four Square Special Filter

b) Wills Classic m) Four Square King

c) Wills Classic Mild n) Gold Flake (king) or small

d) Wills Classic Menthol o) Benson & Hedges

e) Wills Filter Tripped p) 555

f) Bristol q) Rothmans

g) Marlboro r) India King

12. What factors do you consider important in buying any brand of cigarette. Please

give points to attributes out of total 100 points.

AttributesPrice Taste Filter Packaging Advertisement

Points

Attributes Aroma Fragrance Color Tobacco TotalPoints 100 (one hundred)

13. How much do you buy at a time?

a) One or two pieces b) Whole pack C) Others

14. What price do you pay for buying (individual piece/pack) of?

(Mention Regular Brand = MRB)?

Rs.__________________

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15. If the price of _________ (MRB) were increased by following percentages, with the

price of other brands remaining the same, what would be your reaction?

Increase in price by

No. Reaction 15% 20% 25%

1. Start smoking less Qty. of same brand.

(To what extent specify in %)

2. Shift to other brand

3. No change in buying pattern

16. How much do you spend on cigarettes monthly? Rs__________________

17. If your income increases by following percentages, what would be your reaction?

Increase in income by

No. Reaction 10% 20% 30%

1. Start smoking more Qty. of same brand.

(Specify in %)

2. Shift to some high value brand 3. No change in buying pattern

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18. If you find a new brand at a shop what will you do?

If the price of new brand is

No. Reaction Equal to MRB More than MRB Less than MRB

1. Try it

2. Ask and inquire for it

3. Ignore it

19. If you dont find the _______(MRB) at a particular Shop, what would you do?

a) Go to another shop and buy same brand b) Postpone buying at that time

c) Buy another brand of cigarette d) others__________________

20. If the brand other than ____________(MRB) introduces the scheme of free lighter

(Worth Rs.25) in return of 10 empty packets of that brand, what will be your

reaction?

a) Shift to that brand pattern b) No change in current buying

21. What did you make start smoking?

a) Friend circle d) Relieve of tension

b) To show off (for status) e) Advertisement

c) Out of curiosity f) Time pass

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22. How did you come to know about MRB? Through,

a) Friends b) Advertisement c) Shop owner

23. Are you aware of the advertisements of brands other than ___________(MRB)?

Yes No

24. What influences you in the advertisement?

a) Models c) Content like punch line, Logo etc.

b) Features of the product d) Overall presentation of ad

e) No influence

25. If you come across an advertisement of new brand, which has you choice in Que.

24, would you

a) Try it b) Ask/inquire for it c) Ignore it

Thanking you,

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EPILOGUE

No study is fully complete in itself said the elders. Even then, not taking

opportunistic shelter in this proverbial saying, though aware of the many lacunas in

this piece of survey, presented in the foregoing pages. Firstly, the sample size

should have been much larger in each category of persons sampled. Secondly,

some more intriguing questions must have been addressed to the individuals. Had

these two deficiencies been not there, the outcome of this survey should have been

more interesting and fruitful than what it is in the present form. The master factor for

these two deficiencies was paucity of time.

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Bibliography

Books

Marketing Management , Philip Kotler, Pearson Education / PHI, 11th Ed.,

2003.

Business Research Methods, Donald R. Cooper and Ramela S. Schindler,

Tata McGraw- Hill Publishing Company Limited, New Delhi, Sixth edition , 2000.

Websites

http://www.itcportal.com/

http://www.indiainfoline.com/

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