Title: Market Research on Consumer Preference towards Detergent Sector.

Author Details –

Name: Arnab Roy Chowdhury.

Affiliation: Student, UnitedWorld School of Business.

E-mail Address: arnabroychowdhury2010@gmail.com

ACKNOWLEDGEMENT:

I express my sincere gratitude to Ms. Sapna Choraria for giving me the opportunity to undergo this project. I, further, thank her for lending me a helping hand in solving my problems related to the project. This project would not have been possible without her valuable time, constant support and inspiration. I also thank UnitedWorld School of Business for providing me an opportunity to undertake a skill basis project at this crucial stage of my life, while pursuing MBA, which helped me to understand the topic, that was untouched before, deeply. Any suggestions for improvement are always welcome.

ABSTRACT:

Due to rapid urbanization, emergence of small pack size and sachets, the demand for the household products is flourishing. With the increase in per capita income and wide range of choices being available, the consumers are mainly focusing on these products. The companies are finding it difficult to survive or to retain their market share due to changing trends in demand and high peak competition. In order to lure the consumers, companies study the quantity being purchased by the customers and at what price. Here, I am trying to confine myself to the detergent market in Uvarshad village, Gandhinagar (Gujarat) and find out how certain factors affect 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.

Introduction

Detergent is a material used to assist cleaning. The term ‘detergent’ is sometimes intended to differentiate between soap and other surfactants used for cleaning. It refers specifically to clothing detergent rather than hand soaps or other types of cleaning agents. Plain water is used to mix detergent for cleaning purposes. Probably the most widely used detergents are soaps or mixtures composed chiefly of soaps. However, not all soaps have significant detergency and although the words ‘detergent’ and ‘soap’ are sometimes used interchangeably, not every detergents are soap. This terminology is sometimes used to refer to any surfactant, even when it is not used for cleaning. So it should be avoided as long as the term ‘surfactant’ itself is available. 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, including the 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 different detergents, that can be used, demonstrates the importance of context in the selection of an appropriate glass-cleaning agent:

• A chromic acid solution—to get glass very clean for certain demanding purposes such as analytical chemistry.

• A high-foaming mixture of surfactants with low skin irritation—for hand washing of dishware in 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 by rinsing.

• An ammonia-containing solution—for cleaning windows with no additional dilution.

Research Objectives:

The following project has been given in order to make me understand the real environment of the market in which research is conducted. Marketing research, being a very important field of study in management, can only be learned through practically working in the markets. The subject of this study, being an FMCG product, forced me to go and interact with the households and know their buying intention, preferences and expectations from the detergents they use. My objective was to find out what are the salient features that led the consumers to switch from one brand to another. 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 of their 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, to elaborate 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 a very important component of business strategy. The term is commonly interchanged with marketing research. However, expert practitioners may wish to draw a distinction that marketing research is concerned specifically about marketing processes, while market research is concerned specifically with markets. Market research, as defined by the International Code on Market and Social Research, includes social and opinion research and the systematic gathering and interpretation of information about individuals or organizations using statistical and analytical methods and techniques of the applied social sciences to gain insight or support decision making.

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 task cannot 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.

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 Powder

This product, when launched in the domestic market, created a wonder. In 1969, when the price of the detergents was so excessive that for most of the people, it was a luxury item. Nirma ensured a tremendous potential market segment. The product was priced lower as compared to other 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 and phosphate-free formulation. This brand had been ranked as the “most widely distributed detergent powder brand in India” as per All India Census of Retail Outlets during a survey conducted 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 known for its great cleaning ability with minimum effort. The superior formulation of this product is enhanced with the power of lemon, which not only removes the tough dirt in your cloth, but also leaves a pleasant lemon fresh fragrance after washing. The convenience provided by Wheel has relieved 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-removing enzymes. It was a powder designed for twin-tub and top-loading washing machines. With the climb in popularity of automatic front-loading washing machines, a suitable low-variant was launched in the early 1970s. In 2003, Ariel brought out its quick wash action to its detergents, to allow 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 be saved. Ariel launched a concentrated version of their liquid detergents named Ariel Power in the

spring of 2008. In October 2008, Ariel launched their new Excel Gel product which can be used in 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 than 300 channels across the globe.

• Introduced the concept of bucket wash to housewives who till then used to wash clothes with laundry soaps.

• Surf Excel launched in 1954, is one of the oldest detergent powders in India. Initially, the brand was positioned on the clear proposition of “whitened wash”.

• HUL is now re-working the Surf Excel strategies by moving away from positioning the brand on 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 and other countries. It is manufactured by Procter & Gamble. Tide is the world’s oldest & most trusted detergent brand and is the market leader in 23 Countries around the world. It was launched 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 clothes after 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 is available in India in packs of 200 gm, 500 gm, 1 kg, 2 kg and 20 gm single use sachets. Tide bar is available in 75 gm, 125 gm, 200 gm bars.

Major Competitors:

In washing powder, HUL is the leader with 38% of market share. Other major players are Nirma, Proctor & Gamble, Ghari and Henkel.

SWOT Analysis:

Source: www.ghallabhansali.com/file/FMCG.pdf

Strengths:

1. Low operational costs.

2. Strong research and development.

3. Present in more than 125 countries.

4. Presence of established distribution network in both rural and urban areas.

5. Presence of well-known brands in this sector.

Weakness:

1. Not well diversified product portfolio.

2. Not present where market potential is high like hair shampoo.

3. Weak advertising.

4. Low exports levels.

5. Less scope of investing in technology and achieving economies of scale, particularly in small sectors.

Opportunities:

1. Available rural market.

2. Increase in purchasing power of consumers due to rise in income level.

3. Export potentials.

4. Large domestic market with a population over one billion.

5. High spending on consumer goods.

Threats:

1. Can lose market share to rivals if distribution channel does not perform well.

2. Removal of import restrictions so as to replace domestic brands.

3. Need to come out with more umbrella brands.

4. Tax and regulatory structure.

4 P’s Analysis:

Product - A product consists of tangible and intangible attributes which satisfy the need, want and 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 on daily basis. Consumer preference on detergent products generally depends on the product’s quality, safety, functionality and packaging of that product.

Price - A study on various data, regarding the market operations, is needed in order to fix a product’s selling price. The selling price of a product depends upon the cost of production, brand position, evaluation of the competitors and the price perceived by the consumers. The price influences the choice and image of the product in the consumer’s mind. Price plays a vital role in the sale of a product and often creates huge impact on both the producers as well as the customers. 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 decisive factor for which consumers prefer an alternative brand.

Promotion - The main target of an organization along with its specialist group of employees is to set up promotional campaigns, provide innovative ideas on advertisements, and come up with lucrative schemes for the promotion of the product in the market and attract a large number of consumers. Promotion includes matching up with new trends and technology. Promotions also decide the segmentation targeting and positioning of the product. The right kinds of promotions affect all the other three variables – the product, price and place. It deals with advertising, sales promotion, including promotional education, publicity, and individual selling of a particular product. Promotional activities are very much necessary for the companies of this industry as it establishes good rapport with the consumers. Advertising gives information and guidance to

consumers. Along with advertisement, personal selling is also significant and helpful for motivating the customers to buy a specific product. Certain sales promotion techniques have a favourable impact on consumer psychology.

Place - It involves physical distribution which means delivery of goods at the right time and at the right place to consumers. For large-scale distribution of detergents, the services of wholesalers, retailers and various other market inter-mediaries are required. Distribution of goods 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, there was a research that addressed consumer preferences for fast moving consumer goods. This study is stimulated by concerns with lots of access to local markets. Topics of this research work include consumer preferences on detergent products, consumers’ attitudes regarding the brand image, 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 more convenience in retail shopping. As a result, they are willing to pay more for products that are quick and easy to use and have huge stock in the market. Faced with a highly competitive market and an ever decreasing direct marketing channel, branding has become very important for producers to gain a competitive advantage in the market place. Brand image provides consumers with 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 the most 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 ‘easy on fabric’.

Convincing powers of various schemes:

There are certain schemes that are launched to promote sales, prove effective when the customer goes 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 05

Major influencers while purchasing a product:

Factors of influence Number of people

Friends & Relatives 08

Self-experience 02

Advertisements 05

Neighbours 03

Others 02

Quantity usually purchased:

Quantity Number of people

Upto 500 gm 10

500 - 1000 gm 06

1 - 2 kg 03

More than 2 kg 01

Packaging Preference:

Packets, upto 500 gm, are the straight away winners with 50% of the consumers coming under this 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 the usage of the primary product.

Brand Image:

Every brand has its specified image in front of the consumer which is known as brand image. It is the overall impression in the consumers’ mind about a product after gathering information about it from various sources. Generally, brand image means a set of beliefs which is held about a specific brand. It represents the present position of the brand in the market. Here, the image of the branded products is clearly reflected in the minds of the consumers who prefer to purchase those particular products. The brand image needs to be showcased to the customers, but how? It is basically received through the loyalty, perceived quality and awareness regarding the products to be purchased. Thus, the impact of the brand image remains in the customers’ mind for a long period 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 wet clay. The oldest known detergent for wool-washing is stale. Other detergent surfactants came from 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, better suited 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 marketed Surf 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 India whereas Surf, a blue detergent powder, became the national market leader with dominant positions in the west; north and south. In the early 1960s, the total volume of detergents manufactured in India grew from around 1600 tonnes to 8000 tonnes. HUL dominated the market 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 diverse branded products. Price along with the consumer income plays a significant role towards the sale and purchase of a product. These lead to the segmentation of the consumers into two parts: high income group people who tend to purchase expensive products and other is the average or lower income group of people who try to maintain their budget while opting for their products as per their preferences.

Peer Influence:

It is one of the important factors influencing consumer behavior towards detergent products because it is a psychological phenomenon of human beings. Through exposure to social models, consumers acquire knowledge, skills and dispositions needed to make purchase decisions. The degree of a person’s exposure to other sources of information, such as television, influences the consumer 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 washing products. It is also a psychological domain of human beings. Here, style statement can be seen in two 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 for less 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 proposed dependent variables. This study targets people from the local village. Data has been collected from 20 respondents, including both male and female, with the help of a structured questionnaire developed 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 growth of economy has lead to the stratification of social recognition among the civilized world and this has fueled the increase in consumption rates of luxury brands. Status is symbolized by the brand purchases and resembles the quality of life. The customer preference is definitely influenced by the commercialization and globalization of the world trading system. This can be seen in the changes in social value, economy, and culture. Western and developed countries have a direct influence and people adapt more in foreign cultures rather than orthodox systems as shopping and fashion play major roles in lifestyle.

Framework:

Conclusion:

CONSUMER PREFERENCECONSUMER PREFERENCE

COUNTRY OF ORIGIN

COUNTRY OF ORIGIN

PRICE

PEER INFLUENCE

PEER INFLUENCE

BRAND IMAGEBRAND IMAGE

STYLE STATEMENTSTYLE STATEMENT

It can be concluded that demand for this industry is set to boom and this will be driven by the rise in share of middle class. Further, the upper end rich class will consume branded products and maintain their status while the middle class, also known as consuming class, will thrive for mass end products. Thus, spurt in the industrial sector growth is also likely to boost the urban as well as 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. www.scribd.com

2. www.ghallabhansali.com/files/FMCG.pdf

3. www.wikipedia.com