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MARKETING

A COMPARATIVE STUDY OF CONSUMER BUYING

BEHAVIOR ON HAIR CARE PRODUCTS OF HUL AND

P&G

A PROJECT REPORT SUBMITTED TO FACULTY OF MANAGEMENT

STUDIES, UNIVERSITY OF DELHI IN THE PARTIAL FULFILLMENT OF

THE REQUIREMENTS FOR THE DEGREE OF MASTERS IN BUSINESS

ADMINISTRATION

Under the Guidance of

DR. HAMENDRA KUMAR DANGI

Submitted By:

SOUKVINA PHILAVANH

Roll No. F-138

MBA, (FT) 2011-13

FACULTY OF MANAGEMENT STUDIES

UNIVERSITY OF DELHI

MARCH 2013

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A COMPARATIVE STUDY OF CONSUMER BUYING BEHAVIOR ON HAIR

CARE PRODUCTS OF HUL AND P&G

BY

SOUKVINA PHILAVANH

Faculty of Management Studies, University of Delhi

Submitted in the partial fulfillment of the requirements for the final year of

Masters of business administration

March, 2013

Under the guidance of

DR. HAMENDRA KUMAR DANGI

Faculty of Management Studies

University of Delhi

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Faculty of Management Studies

University of Delhi

CERTIFICATE

This is to certify that this final year project titled: Comparative study of consumer

buying behavior on hair care products of HUL and P&G submitted in partial

fulfillment of the requirements for the Degree of Master of Business Administration

by Ms. SOUKVINA PHILAVANH at Faculty of Management Studies, University of

Delhi is a record of original research work carried out by her under my guidance. Any

material borrowed or referred to is duly acknowledged.

DR. HAMENDRA KUMAR DANGI SOUKVINA PHILAVANH

Faculty of Management Studies MBA FT 2011-13

University of Delhi Faculty of Management Studies

University of Delhi

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ACKNOWLEDGEMENT

I express my sincere thanks to my project guide Dr. HAMENDRA DANGI, for

providing me with an opportunity to work under this guidance and providing tireless

support during the course of the project. His continued cooperation, never ending

encouragement, meticulous guidance and uninhibited support at various stages helped

me in preparation of this research study.

I would also like to thank the staff of the Faculty of Management Studies, library and

administration section for their cooperation and support. And I have learnt from

several articles, research studies and papers. I acknowledge the value I have received

from these bodies of knowledge.

SOUKVINA PHILAVANH

Master of Business Administration (MBA)

Faculty of Management Studies

University of Delhi

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TABLE OF CONTENTS

Lists of figures and tables...6-7

Executive summary.....8-9

1. INTRODUCTION10

1.1. Introduction of FMCG .............................................................................................. 10

1.2. Company profile ........................................................................................................ 11

1) Hindustan Unilever Limited (HUL) Brief history ........................................... 11

2) Proctor & Gamble Company (P & G) Brief history ........................................ 12

1.3. Indian hair care market.............................................................................................. 14

1.4. Objectives of the research ......................................................................................... 18

2. LITERATURE REVIEW ................................................................................................. 19

2.1 Research review .......................................................................................................... 19

2.2. Factors influencing consumer buying behavior decisions .................................... 24

3. RESEARCH METHODOLOGY .................................................................................... 43

3.1. Survey Questionnaire design .................................................................................... 43

3.2. Sample selection and data collection ..................................................................... 43

4. DATA ANALYSIS AND DISCUSSIONS ................................................................... 48

4.1. Indian consumer buying behavior on hair care products of HUL and P&G ...... 48

4.2 Ranking of the influencing factors of Indian consumer buying behavior on hair

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care products of HUL and P&G Company .................................................................. 52

4.3. The marketing strategy on hair care products of HUL and P&G ........................ 61

1) SWOT Analysis of Shampoo Market in India...................................................... 61

2) Marketing strategy of HUL ..................................................................................... 63

3) Marketing strategy of P&G .................................................................................... 65

5. CONCLUSION AND RECOMMENDATION ........................................................... 68

5.1. Indian consumer buying behavior on hair care products ..................................... 68

5.2. Factors affecting consumer buying behavior on hair care products.................... 69

6. BIBLIOGRAPHY ............................................................................................................. 72

Appendix..75

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LISTS OF FIGURES

Figure 1: Diversity in top consumer hair needs...15

Figure 2: Market Share of Shampoo Companies in India15

Figure 3: Per capita expenditure on hair care products16

Figure 4: Gender...48

Figure 5: Education..50

Figure 6: Income per month.51

Figure 7: The length of time of using hair care products.51

Figure 8: Willingness to spending for hair care products....52

Figure 9: Hair care products recommended to be used normally.52

Figure 10: Brands in which Indian consumers generally use...53

Figure 11: Sources of Medias...54

Figure 12: Factors influencing Indian consumer buying decisions..54

Figure 13: Sources of store locations...55

Figure 14: Reviews before buying decisions...56

Figure 15: BCG Matrix of Shampoo Brands in India..62

Figure 16: HUL strategy pyramid for Hair Care products...63

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LISTS OF TABLES

Table 1: Gender48

Table 2: Age.49

Table 3: Marital status..49

Table 4: Occupation.....49

Table 5: Education50

Table 6: Income per month..50

Table 7: Parameters influencing consumer buying behavior...57

Table 8: T-Test Analysis..60

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EXECUTIVE SUMMARY

FMCG refers to Fast Moving Consumer Goods, requirement for daily or frequent use.

Typically, a consumer buys these goods at least once a month. The sector covers a

wide gamut of products such as detergents, toilet soaps, toothpastes, shampoos,

creams, powders, food products, confectioneries, beverages, cigarettes.

Hindustan Unilever Limited is India's largest Fast Moving Consumer Goods (FMCG)

Company based in Mumbai, Maharashtra. It is owned by the British-Dutch

company Unilever which controls 52% majority stake in HUL. Its products include

foods, beverages, cleaning agents and personal care products.

P&G is one of the largest and amongst the fastest growing consumer goods

companies in India. Established in 1964, P&G India now serves over 650 million

consumers across India. Its presence pans across the Beauty & Grooming segment,

the Household Care segment as well as the Health & Well Being segment, with

trusted brands that are household names across India. These include Vicks, Ariel,

Tide, Whisper, Olay, Gillette, Ambipur, Pampers, Pantene, Oral-B, Head &

Shoulders, Wella and Duracell.

According to Haircare industry in India reported from Datamonitor, in 2009, India

witnessed over 200 new product launches, Most new product launches occurred in

theshampoo category, which accounted for nearly 45% of all new offerings, followed

by conditioners and styling agents which collectively accounted for over 40% of

launches in 2009. Hair colorants accountedfor over 10% of new launches and this

figure is expected to increase in the future, due to a steadyincrease in Indias young

population. The least number of new product launches took place in the permsand

relaxers segment, which made up just about 2% of all new launches. This is primarily

because suchproducts target a very niche segment of the population and are yet to find

favour with the masses.

Therefore, my study was focused on three objectives to compare Indian consumer

buying behavior between HUL and P&G such as to study Indian consumer buying

behavior on hair care products of HUL and P&G, to evaluate the factors influencing

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hair care consumer buying behavior of HUL and P&G in Indian market and to assess

the marketing strategy on hair care products of HUL and P&G.

A sample size of 190 respondents was used for this study. Primary data and secondary

data were used in this study, and data from the questionnaire was analyzed by

software SPSS version 19 to describe the qualitative and quantitative data.

From the data analysis of Indian consumer buying behavior on hair care products of

HUL and P&G were generally females who used hair care products of HUL and

P&G, and 72.1% of the respondents were in the age group of 20-25 years. Moreover,

there was a relationship between age, gender and income to spending for hair care

products. On the other hand, the respondents behavior for using was under 1 year

only for hair care products of HUL and P&G, therefore Indian consumers did not

have product loyalty for both companies, and they might change or swift to other

brands anytime due to many factors for example prices for hair care products that they

were willing to spending was at Rs. 101-500. Hence, there was price sensitivity, age-

related, gender-related and income related for Indian consumers buying behavior for

hair care products of both companies. And there were many factors affecting them to

buy hair care products of HUL and P&G, most of them normally used only shampoo,

and some of them used shampoo with hair oil, so that both companies should be

considered the ways to attract them to buy other hair care products such as

conditioner, gel, spray, etc. however, according to HUL, there was only sales

promotion like buy shampoo get one conditioner free, on the other hand, Dove,

Sunsilk shampoo of HUL were very famous for Indian consumers and most of them

were females. In contrary, Head and shoulder, Pantene shampoo were famous for

both males and females. And those were the reasons why both companies wanted to

produce brands for females and males. However, 62.26% of the respondents said that

sources of Media factor in which Indian consumers preferred was from television, and

this advertising campaign of both companies HUL and P&G was successful on

broadcast Medias. Moreover, the other factors influenced Indian consumers to buy

was from friends and family. And store location factor was influenced Indian

consumers to buy hair care products especially from cosmetic store and retail store

near home. And Indian consumers were sometimes reviewed the information related

to hair care products before making decision to buy.

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1. INTRODUCTION

1.1. Introduction of FMCG

Fast Moving Consumer Goods (FMCG) or Consumer Packaged Goods (CPG) is products that

are sold quickly and at relatively low cost. Examples include non-durable goods such as soft

drinks, toiletries, and grocery items.Though the absolute profit made on FMCG products is

relatively small, they generally sell in large quantities, so the cumulative profit on such

products can be substantial. ITC Limited, Procter & Gamble and Unilever are the three

biggest consumer goods company that operates across the globe.

FMCGs refers to those retail goods that are generally replaced or fully used up over a

short period of days, weeks, or months, and within one year. This contrasts with

durable goods or major appliances such as kitchen appliances, which are generally

replaced over a period of several years.

FMCG have a short shelf life, either as a result of high consumer demand or because

the product deteriorates rapidly. Some FMCGs such as meat, fruits and vegetables,

dairy products and baked goods are highly perishable. Other goods such as alcohol,

toiletries, pre-packaged foods, soft drinks and cleaning products have high turnover

rates.

FMCG refers to Fast Moving Consumer Goods, requirement for daily or frequent use.

Typically, a consumer buys these goods at least once a month. The sector covers a

wide gamut of products such as detergents, toilet soaps, toothpastes, shampoos,

creams, powders, food products, confectioneries, beverages, cigarettes. Typical

characteristics of FMCG products, individual items are of small value but all FMCG

products put together account for a significant part of the consumers budget. The

consumer keeps limited inventory of these products and prefers to purchase them

frequently, as and when required. Many of these products are perishable. The

consumer spends little time on the purchase decision. Rarely does he/she look for

technical specification (in contrast to industrial goods). Brand loyalties or

recommendations of reliable retailer/dealer drive purchase decision. Trail of a new

product i.e. brand switching is often induced by heavy advertisement,

recommendation of the retailer or neighbors/ friends. These products cater to

necessities, comforts as well as luxuries. They meet the demands of the entire cross

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section of population. Price and income elasticity of demand varies across products

and consumers.

1.2. Company profile

1) Hindustan Unilever Limited (HUL) Brief history

Hindustan Unilever Limited is India's largest Fast Moving Consumer Goods (FMCG)

Company based in Mumbai, Maharashtra. It is owned by the British-Dutch

company Unilever which controls 52% majority stake in HUL. Its products include

foods, beverages, cleaning agents and personal care products.

HUL was formed in 1933 as Lever Brothers India Limited and came into being in

1956 as Hindustan Lever Limited through a merger of Lever Brothers, Hindustan

Vanaspati Mfg. Co. Ltd. and United Traders Ltd. It is headquartered

in Mumbai, India and has employee strength of over 16,500 employees and

contributes to indirect employment of over 65,000 people. The company was renamed

in June 2007 as Hindustan Unilever Limited.

Lever Brothers started its actual operations in India in the summer of 1888, when

crates full of Sunlight soap bars, embossed with the words "Made in England by

Lever Brothers" were shipped to the Kolkata harbor and it began an era of marketing

branded Fast Moving Consumer Goods (FMCG).

Hindustan Unilever's distribution covers over 2 million retail outlets across India

directly and its products are available in over 6.4 million outlets in the country. As per

Nielsen market research data, two out of three Indians use HUL products.

HUL works to create a better future every day and helps people feel good, look good

and get more out of life with brands and services that are good for them and good for

others.

With over 35 brands spanning 20 distinct categories such as soaps, detergents,

shampoos, skin care, toothpastes, deodorants, cosmetics, tea, coffee, packaged foods,

ice cream, and water purifiers, the Company is a part of the everyday life of millions

of consumers across India. Its portfolio includes leading household brands such as

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Lux, Lifebuoy, Surf Excel, Rin, Wheel, Fair & Lovely, Ponds, Vaseline, Lakm,

Dove, Clinic Plus, Clear, TRESemm, Sunsilk, Pepsodent, Closeup, Axe, Brooke

Bond, Bru, Knorr, Kissan, Kwality Walls and Pureit.

2) Proctor & Gamble Company (P & G) Brief history

P&G is one of the largest and amongst the fastest growing consumer goods

companies in India. Established in 1964, P&G India now serves over 650 million

consumers across India. Its presence pans across the Beauty & Grooming segment,

the Household Care segment as well as the Health & Well Being segment, with

trusted brands that are household names across India. These include Vicks, Ariel,

Tide, Whisper, Olay, Gillette, Ambipur, Pampers, Pantene, Oral-B, Head &

Shoulders, Wella and Duracell. Superior product propositions and technological

innovations have enabled P&G to achieve market leadership in a majority of

categories it is present in. P&G India is committed to sustainable growth in India, and

is currently invested in the country via its five plants and over nine contract

manufacturing sites, as well as through the 26,000 jobs it creates directly and

indirectly. Our sustainability efforts focus on Environmental Protection as well as

Social Responsibility to help develop the communities we operate in.

P&G operates under three entities in India - two listed entities Procter & Gamble

Hygiene and Health Care Limited and Gillette India Limited, as well as one 100%

subsidiary of the parent company in the U.S. called Procter & Gamble Home

Products.

In 1964, a public limited company, Richardson Hindustan Limited (RHL) is formed,

which obtains an industrial license to undertake manufacturing of Menthol and Vicks

range of products such as Vicks VapoRub, Vicks Cough Drop and Vicks Inhaler.

In 1991, P&G liberalized the Indian house wife through the introduction of Ariel

Micro System. The years before Ariel, washing had been a long arduous process for

housewives, involving back breaking labor.

In 1993, P&G USA enters into a Joint Venture with Godrej Soaps in India & was

named Procter & Gamble Godrej (PGG) to leverage Godrejs scale & distribution in

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the Soaps category in India; however the JV for strategic business reason was

dissolved in 1996.

In 1995, Procter & Gamble Home Products enters the Hair care Category with the

launch of Pantene Pro-V.The New Pantene Amino Pro-V Complex range of shampoo

& conditioner comes in three variants suited for individual needs - Pantene Nourished

Shine, Pantene Hair Fall Control & Pantene Smooth & Silky. Enriched with the

goodness of pro-vitamins and three essential aminos, Pantene restores your hair with

its lost beauty while making your hair ten times stronger.

In 1995, P&G initiated the Point Of Market Entry program. The Direct to Consumer

(DTC) or Direct Marketing (DM) program followed with the launch of Ariel in India,

brought P&G brands closer to its consumers

In 1997, Procter & Gamble Home Products launches Head & Shoulders shampoo.

Since 1950, Head & Shoulders has been at the forefront of scalp and hair science,

significantly advancing the treatment of dandruff and scalp problems. Along with

professional advice and expert insight we have a wide range of products to care for

your scalp and nurture your hair. Head & Shoulders is available in 8 variants in India

including Men Hair Retain, Complete Care for Dry Scalp, Anti Hair fall, Smooth &

Silky, Cool Menthol, Clean & Balanced, Thick & Long & Silky Black.

P&G India moves from Tiecicion House, to its new headquarters at Chakala,

Mumbai. The building became functional in record breaking construction time Just

27months!

In 2003, P&G India gets Best Employer Award.Standing by the companys credo of

Touching Lives and Improving Lives, P&G launches Shiksha in 2004 in

association with CRY. The objective of the program is to educate underprivileged

children.

In 2009, P&G integrated Wella, Integration of business organization & Structure,

Employee harmonization in to P&G systems, benefits & policies etc. & laying the

foundation of business systems & processes like Order, Shipping, Billing systems,

Purchasing, financial data mgt & reporting.

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1.3. Indian hair care market

Hair care in India industry profile provides top-line qualitative and quantitative

summary information including: market share, market size (value and volume 2006-

10, and forecast to 2015). The profile also contains descriptions of the leading players

including key financial metrics and analysis of competitive pressures within the

market. Essential resource for top-line data and analysis covering the India hair care

market includes market size and segmentation data, textual and graphical analysis of

market growth trends, leading companies and macroeconomic information.

The hair care market consists of the retail sale of conditioner, hair colorants, salon

products, shampoo and styling agents. The market is valued according to retail selling

price (RSP) and includes any applicable taxes. Any currency conversions used in the

compilation of this report have been calculated using 2010 annual average exchange

rates.

The Indian haircare market generated total revenues of $2.2 billion in 2010,

representing a compound annual growth rate (CAGR) of 15.4% for the period

spanning 2006-2010.

Conditioner sales proved the most lucrative for the Indian hair care market in 2010,

generating total revenues of $1.2 billion, equivalent to 57.8% of the market's overall

value.

The performance of the market is forecast to decelerate, with an anticipated CAGR of

10.2% for the five-year period 2010-2015, which is expected to lead the market to a

value of $3.5 billion by the end of 2015.

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Figure 1: Diversity in top consumer hair needs

Figure 2: Market Share of Shampoo Companies in India

The top three companies in shampoo market are Hindustan Unilever Ltd., Procter and

Gamble and Dabur. From the pie chart, it is seen that Hindustan Unilever Ltd. is

dominatingthe market with 46% of market share followed by Procter and Gamble and

Dabur with 24%and 11% of market share. The other major players in the market are

Indian tobacco Company, Loreal and CavinKare with 6%, 3% and 2% of market

share.

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Figure 3: Per capita expenditure on hair care products

Changing consumer aspirations: Hair care, once an occasion based activity, has now

become anintegral part of Indian consumers daily beauty regime. With growing

disposable incomes andincreasing western influence, Indian consumers are not shying

away from experimenting withnewer or pricier products. This has created new

opportunities for the companies in this sector. Asa result, products such as hair styling

creams & gels, post wash serums etc. which once were nonexistent in the Indian

market are increasingly finding a place in the Indian consumers shopping basket.

A shift towards natural/organic products: According to the new product insight report

Haircare inIndia from Datamonitor, there is a growing preference towards product

made fromnatural/organic ingredients amongst Indian consumers. Owing to such a

strong demand, numerous personal care companies in India are introducing products

that appeal to consumerswho are keen to move away from conventional haircare

products made from harmful chemicals.

Increasing segmentation in haircare products: According to the latest report Haircare

in India, due to increasing competition, manufacturers of haircare products in India

have realized thepressing need to differentiate their offerings from other competing

brands. This has resulted ingreater segmentation in the haircare market. Increasing

awareness among consumers has mademanufacturers realize that a 'one size fits all'

approach is no longer enough to attract customers.The demand for customized

offerings has resulted in the emergence of niche segments in theIndian haircare

market, such as products which control dandruff, hair loss and thinning,

productswhich offer protein enrichment or hair softening properties.

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According to Product Insights: Haircare in India report from Datamonitor, in 2009,

India witnessed over 200 new product launches, Most new product launches occurred

in theshampoo category, which accounted for nearly 45% of all new offerings,

followed by conditioners and styling agents which collectively accounted for over

40% of launches in 2009. Hair colorants accountedfor over 10% of new launches and

this figure is expected to increase in the future, due to a steadyincrease in Indias

young population. The least number of new product launches took place in the

permsand relaxers segment, which made up just about 2% of all new launches. This is

primarily because suchproducts target a very niche segment of the population and are

yet to find favor with the masses.

When compared globally, India, with a share of 3.0%, ranked eighth in terms of new

product launches inthe haircare market. This relatively low rank belies the potential

that India holds for haircare products.However, as disposable income continues to rise

and beauty consciousness continues to grow amongmen and women of all age groups,

an influx of new products is expected in the future. While thepenetration of

specialized haircare offerings is still low in India, as product awareness and

industrydevelopment improve, consumer interest, particularly in rural India, is bound

to increase significantly.

Apart from traditional hair oil products, Indian hair care market remains largely

under-penetrated withlarge part of consumption still driven by urban consumers.

However, manufacturers are increasinglyfocusing on driving their sales from rural

and semi-urban areas by using sachet strategy and inducingconsumers to experiment

with new products.

Hair colorant market is one developing area which is showcasing enormous potential

for themanufacturers. There is a huge demand for hair colorant products from

consumers through bothprofessional salons as well as retail channels. Currently, local

players Godrej Industries control majorityof the Indian hair colorant market while

companies such as Loreal and P&G are launching their globalproduct portfolio into

the Indian market.

Increasingly Indian consumers specifically women are becoming more aware about

the global trends andare more willing to spend on their hair grooming. Today, women

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consumers do not mind shelling out extramoney to buy international brands which

give their hair that value-add treatment. However, even maleconsumers are becoming

as self-conscious as their female counterparts and are increasingly indulging inhair

styling. Hair creams & gels have become a phenomenon amongst the Indian males

who wish to wear a new hair looks every day. Here again, local player Godrej with its

Brylcreem dominate the hairstyling market. However, increasingly companies such as

Unilever, ParasPharma and Marico arelaunching their products to tap this nascent but

fast growing hair styling segment.With growing awareness and rising income, Indian

consumers are moving up the value chain in the haircare segment. Indian hair care

market would continue to see upward growth trajectory driven by strongdemand from

aspiring consumers. Companies in this industry need to increasingly focus to meet

demandfrom the evolving consumers who are now looking for more specialist

products to meet their specific needs.

1.4. Objectives of the research

1) To study Indian consumer buying behavior on hair care products of HUL and

P&G

2) To evaluate the factors influencing hair care consumer buying behavior of

HUL and P&G in Indian market

3) To assess the marketing strategy on hair care products of HUL and P&G

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2. LITERATURE REVIEW

2.1 Research review

RuchitaSaxena (2008) has explored the facts that Hindustan Unilever (HUL) has

increased its share in the shampoo market even as rivals Procter & Gamble (P&G)

and CavinKare have suffered erosion. She also mentioned that according to retail

measurement figures released by AC Nielsen, market leader HULs share grew from

46.9% in January to March (2007) to 47.8% in the October to December (2006)

quarter and in the same period, P&Gs market share fell from 25% to 23.7% and third

placed CavinKares from 12.6% to 12%.

P. Guru Ragavendran et al (2009) emphasized in their research that the survey helped

them in understanding the consumer perception on brand awareness and position of

product in the market. It was observed that consumers expectations were Quality,

benefits offered and packaging of shampoos. Based on the results obtained, integrated

marketing communication was suggested; as a result an improvement of 8% to 12.6%

was observed in target population.

Albert Ferror et al (2012) concluded in their study that the European market of

perfumery and cosmetics is the largest in the world. Germany has the largest market

in the Europe, followed by France, UK, Italy and Spain. These countries are the big

5 of the sector, and they are leaders in number of new product launches and in

volume of production, exports and imports.

Dr. Himani Sharma and Shallu Mehta (2012) said that Males frequency of using the

shampoo is very less as compared to females and the consumers do not concentrate on

the natural shampoos, they use it only for the purpose of cleaning, not for to make

their hair healthier and stronger. The frequency of shampoo usage in males is very

low. They use shampoo on special occasions such as weddings, parties etc. The

maximum respondents as 51.39% prefer the TV for the advertisement and the

consumers are not satisfied from the quality of the shampoo and also the free gifts

distributed with them. Sachet is more preferred as compared to bottles for the purpose

of packaging of shampoo.

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D. MuthamizhVendanMurugavel, (2010) PG & Research Department of Commerce,

Gobi Arts & Science College, Gobi, Tamil Nadu, India, A study on Consumers

Attitude towards Malted Food products with reference to Gobichettipalayam Town,

COLLEGE SADHANA, Journal for Bloomers of Research. This paper evaluated the

importance of health in the lives of human beings and the role of malted food drinks

in ensuring a healthy diet. The author says that malted food product gives energy

which is very helpful for good health. Malted food products can be grouped into two

categories: first category is for children such as Junior Horlicks, Cerelac, Amul,

Farex, Lactodexetc, second category is for malted food products such as Horlicks,

Boost, Bournvita, Complan, Viva, Maltova, etc, are common for all people.

The relevance of understanding consumer behavior is rooted in the modern marketing

concept. It manufacturers attention has switched over from the products to the

consumers. The marketing strategies and policies depend upon consumer behaviors. A

careful study of consumer behavior will facilitate marketers in determining the size,

form, style, color, package, brand etc. thus, with respect to the malted food drinks

market, it is very essential to understand the nuances of consumer behavior and the

responses of consumers to the marketplace due to attributes like form, color,

packaging, benefits etc in order to have a clear understanding of the market. The

specific objectives of the study undertaken are as follows: To analyze the brand

preference of consumers towards malted food products, to study the consumers

satisfaction towards malted food products, to analyze the problems faced by the

malted food product consumers

As such, the hypotheses for the study are as follows: Hypothesis 1:Ho- there is no

significant relationship between the age and brand preference of malted food product

consumers. Hypothesis 2: Ho- there is no significant relationship between the gender

and brand preference of malted food product consumers. Hypothesis 3: Ho- there is

no significant relationship between the education and brand preference of malted food

product consumers. Hypothesis 4: Ho- there is no significant relationship between the

annual family income and brand preference of malted food product consumers.

Hypothesis 5: Ho- there is no significant relationship between the age of the

respondents and their significant level. Hypothesis 6: Ho- there is no significant

relationship between the gender of the respondents and their significant level.

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Hypothesis 7: Ho- there is no significant relationship between the education

qualification of the respondents and their significant level of the malted food product

consumers. Hypothesis 8: Ho- there is no significant relationship between the annual

family income of the respondents and their significant level.

In order to constitute a sample size of 150 respondents, 30 business people, 30

agriculturists, 30 employed people (both private and government), 30 housewives and

30 students were purposely selected. Convenience sampling technique was employed

to collect required information from the respondents. On the basis of the responses,

and tests such as Chi square, it was concluded that the null hypothesis in all the

hypotheses except the 5th

hypothesis were accepted. Thus, there is a significant

relationship between age of the respondents and the level of satisfaction of the malted

food products consumers, according to the research.

P.H.K. Prathiraja and A.Ariyawardana, (2003), Impact of Nutritional Labeling on

Consumer Buying Behavior, Sri Lankan Journal of Agricultural Economics. The

paper evaluated the important role nutritional labeling plays in providing relevant

nutrition information of food products to consumers. Inclusion of a nutritional label

on food items may be an important packaging decision for food processors. Hence, a

study was conducted in Sri Lanka with a view of identifying the market for nutritional

labeling and the factors that influence the consumer willingness to pay for nutritional

labeling.

According to food and drug administration (FDA) in the USA, a label is the primary

point of the contact between the producer and the purchaser and should be thought of

as an integral part of the producers marketing plan. It is not just a piece of paper

stuck onto the container but should be an expression of a number of important

decisions that have been made about marketing.

According to the FDA, a label should clearly and minimally state the name of the

product, the net weight, the nutrition facts panel (nutritional label), the name and

address of the manufacturer, and the brand name. These food labels have become

increasingly complex, particularly as products move from the status of basic

commodities to highly processed, value-added products.

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Nutrition labels can simplify the whole concept of healthy eating for consumers. They

help to keep track of the amount of fat and sugar, sodium and fiber, protein and

carbohydrates etc being consumed by means of intake of the package food product. It

also allows consumers to make an informed judgment of a products overall value.

In order to fuel the analysis, data was collected from a random sample of 90

consumers selected from three supermarkets located in Kandy, Sri Lanka. The market

for nutritional labeling was identified by exploring data and a legit method of analysis

was performed to identify the factors that influence the willingness to pay for

nutritional information on food items. A significantly greater proportion of individual

in the age category 36 to 50 years, individuals with tertiary education, individuals

with special dietary status and households with less than 4 members were willing to

pay more for the nutritional labels. Legit analysis showed that level of education and

special dietary status has a significant positive effect and the household size has a

significant negative effect on the willingness to pay for nutrition information.

Accordingly, it could be stated that incorporation of a nutritional panel in the package

would enhance the demand for food products and it would be an appropriate strategic

task for the local food processors.

The results of the study were as follows among the respondents, 86% had awareness

about the nutritional labels on food products, while 14% did not have awareness about

nutrition labels. This particular finding suggests that there is a consumer propensity to

read nutrition labels and it could change their purchasing behavior, which ultimately

reflects their relative valuation of taste versus health. Out of the 90 respondents,

77.8% considered that nutritional information on food items are vital for their

purchasing decisions. Among the other factors considered during food shopping such

as price, quality, packaging, label and brand, the highest level of importance was

attached to nutritional labeling on food products. 25% of the respondents stated that

they always read the nutrition labels when purchasing a food item and 62% said they

sometimes read it. Only 2% said that they never look at the label. This particular

finding suggests that printed nutrition information is an important sources of

information that consumer use in purchasing. Out of the total number of 90

respondents, 52.2% were willing to pay something additional for products with

nutrition information and 47.8% were not willing to pay anything additional. Of the

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90 respondents, 35 were in the 36-50 year age group and of those 74.3% indicated

that they are willing to pay for nutritional information on food items. Only 5

respondents were in the over 65 year age group, and of those 20 % revealed that they

are willing to pay for nutritional information. Chi square test results revealed that the

relationship between age and the willingness to pay is statistically significant at a

probability level of 0.05. Of the total number of respondents, 43 were males and 47

were females. Of the females, 20 were willing to pay for nutrition information, which

accounts for 57.4%. Males were less likely to pay for nutrition information. Chi

square test result revealed that the relationship between gender and the willingness to

pay is statistically significant at a probability level of 0.05. this result suggests that

females, their families food gatekeepers, have a large share of the responsibility for

their families health and are willing to pay more for nutrition information.

Out of the total 90 respondents 49 were in the income category Rs. 10,000 to Rs.

20,000 and of those 55.1% were willing to pay for nutritional information on food

items. 17 individuals were in the income category above Rs. 20,000 and of those

37.5% were willing to pay for nutritional labeling. However, there was no statistical

significance between income and the willingness to pay for nutrition information on

food items.

Of the total number of respondents, 38 households had less than 4 members and of

those 73.7% were willing to pay for nutrition information. However, only 19% of the

households with more than 4 members revealed that they are willing to pay for

nutrition information. Chi square test results revealed that there is a significant

relationship between household size and the willingness to pay. Of the total, 52

respondents had a university degree and of those 62% indicated that they are willing

to pay for nutritional labeling. 32 have had secondary education and of those 37.5%

were willing to pay for nutrition information provided on the food items.

To conclude, this study showed that consumers used nutritional labeling when making

a purchasing decision and that it is especially because of health consciousness. A

majority of the respondents revealed that they were willing to pay something

additional for the nutritional information provided on food items. Of those who were

willing to pay something additional, a greater proportion was in the age category 36-

50 years, had tertiary education and the households had less than 4 members.

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Further, logic analysis showed that gender, level of education and special dietary

status had a significant positive effect and the household size had a significant

negative effect on the willingness to pay for nutritional information. Accordingly, it

could be stated that incorporation of a nutritional panel on the package would enhance

the demand for the local food products and it would be an appropriate strategic task

for the local food processors. Thereby, these local producers could compete with the

other products with nutritional labels and also it would be an ideal strategy in

penetrating export markets where the nutritional panel is a legal requirement.

2.2. Factors influencing consumer buying behavior decisions

According to Kotler and Keller (2009), a consumers behavior is affected by 3

different factors: cultural, social and personal factors. There are many different kinds

of factors under each of these 3 categories.

Culture is one of the most major influences in consumer behavior. Consumption

choices cannot be understood without taking into consideration the culture in which

they are made. According to Solomon, Bamossy, Askegaad and Hogg (2006), culture

is a kind of like the share memory of a society. It is a mixture of meanings, rituals,

norms and traditions shared by a society or an organization. Another definition of

culture as given by Evans, Jamal and Foxall (2006), is to see it as a meaning system

that a member of a certain group uses to guide his or her life. The meaning system

gives people a sense of identity and rationale for their actions (how people should

behave in different context). Consumer products and services are the part of the

system of meaning. The system is often culturally shared and culture specific and it is

passed on from one generation to another.

Evans et al. (2006) define culture as consisting of 3 elements: 1. Cognitive elements

and beliefs, 2. Values and norms and 3. Signs, signals and symbols; Cognitive

elements and beliefs are the things that societies know about the physical and social

worlds. Cognitive elements and beliefs also encompass societys religious beliefs and

the ways in which the society works.

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Values and norms on the other hand refer to the way in which the majority of people

in the society are expected to behave. Signs, signals and symbols include language

and methods of conveying meaning.

However, the Indian culture is part so called collectivist cultures, in which according

to Solomon et al. (2006) cultures where more important is placed on achieving the

goals of a stable in group in contrast to individualistic culture where the emphasis is

on attaining personal goals. This has been taken into account in the study as well.

Family, social roles and statuses as well as different reference groups are some of the

social factors that, in addition to culture, affect consumer behavior. According to

Kotler and Keller (2009) a reference group is a group that has a direct or indirect

influence on a persons attitudes or behavior whereas according to Noel (2009),

reference groups serve as a way of comparing oneself to others. Family is one of the

most important reference groups and thus a major influence in consumer behavior.

Social roles and statuses also affect the way people choose to buy or not to buy a

certain product or a service. A social role is comprised of the activities a person is

expected to perform inside a certain group such as family or an organization. Status,

on the other hand, is something that each role carries with it; a senior manager has

more status than a junior manager. People often choose products and services that

reflect the roles they have and their actual or desired status in a society Kotler and

Keller (2009).

According to Kotler and Keller (2009, p. 194), those reference groups that have a

direct influence on a person are called membership groups. Membership groups can

be further categorized into primary groups and secondary groups. Primary groups are

those groups a person communicates with quite regularly and informally. In addition

to the most important reference group, family, primary groups include for example

religious and professional groups. Secondary groups require less regular interaction

and they are often more formal in nature compared to primary groups.

In addition to the reference groups people are part of, groups in which they dont

particular also influence consumers. These include inspirational groups, groups an

individual admires and hopes to join, and dissociative groups, groups whose values or

behavior a person resents and rejects. Kotler and Keller (2009) say that reference

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groups influence consumer behavior in 3 ways: they present and disclose new

behaviors and lifestyles, they influence attitudes and self-concept and they create

pressures for conformity that can have an effect on buying behavior.

Personal characteristics also influence a consumers behavior. Examples of personal

characteristics include the consumers age and stage in the life cycle, occupation,

economic circumstances, personality, self-concept, lifestyle and values. Kotler and

Keller (2009) values have such a huge impact on consumer behavior and are

important in terms of this study because of the ethical aspect of buying behavior.

Informational influence that someone provides to a consumer is often based on

personal experience; friends or acquaintances recommend products or services that

they have tested and have positive experience of. Turning to a friend for advice on

purchasing decisions saves the consumer time and energy; it decreases time required

to search for information and lessens the risk of dissatisfaction in terms of quality and

endurance of the product. Informational influence has great impact on consumer

behavior because people usually place high value on word of mouth communication,

especially in those cases where the information comes from a trusted source such as

friends or relatives that the consumer knows personally. (Noel 2009) Asch and Wolfe

(2001), tantamount to Noel (2009), also note that recommendations for products and

services made by friends or relatives have a higher value to a consumer than

recommendations made by sales staff for example. The impact and influence of word

of mouth communication will be covering marketing communications.

According to Kasser and Kanner (2004), consumers environmentally conscious

behavior is often socially influenced. They state that the best prediction of a consumer

making an environmentally friendly purchase is the people they know who have made

a similar type of purchase.

Asch and Wolfe (2001) as well as Kotler and Keller (2009) and Noel (2009) discuss

that social class is also a great influence of consumer behavior, although Kotler and

Keller (2009) define social class as being part of the cultural factors affecting

consumer behavior rather than personal factor. Social classes are hierarchically

ordered divisions of society whose members share similar values, interest and

behavior Kotler and Keller (2009). Social classes are usually quite homogenous

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according to Asch and Wolfe (2001) and Kotler and Keller (2009) social classes show

4 different kinds of characteristics.

Kotler and Keller (2009) and Asch and Wolfe (2001) note that in addition to age,

consumption is shaped by family life cycle. Family life cycle refers to the number,

age and gender of people in the household at any point in time. Moreover,

psychological life cycle stages, the certain passages and transformations people go

through in life, also affect consumer behavior. One of the phases in psychological life

cycle is becoming a parent, which may change an individuals consumption habits

radically.

Thus, different kinds of critical life events such as marriage, childbirth, illness,

divorce, carreer change, and widowhood may affect consumer buying behavior.

Kotler and Keller (2009)

The first characteristic is that people within a certain class tend to be more alike in the

way they dress, speak and use their free time than people in another social class.

Second, people are often perceived to have certain superior or inferior positions

according to their social class. The third characteristic linked to social classes is that

usually a cluster of variables indicates social class better than any single variable.

These variables include for example occupation, income, wealth, education, and value

orientation. The fourth thing that characterizes social classes is that people can move

from one social class to another during their life.

Noel (2009) states that an individuals social class can be determined based on several

factors of which occupation, education and income are the 3 biggest and most

important. Occupation and economic circumstances were also mentioned by Kotler

and Keller (2009) as some of the personal factors affecting consumer behavior.

Asch and Wolfe (2001) agree with Kotler and Keller (2009) in that social classes

show distinct preferences in terms of brands and products in for example clothing,

recreational activities and automobiles and thus affect the way people behave in

decision making situations. Noel (2009) discusses that social class is a good predictor

of purchasing behavior related low to moderately priced goods that have some sort of

symbolic value. These include for example cosmetics products.

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Kotler and Keller (2009) agree that occupation and the economic circumstances that

come with it are great influences in consumer behavior. The type of products and

services people choose to buy is greatly affected by their economic situation such as

spendable income, saving and assets, debts, borrowing power and attitudes toward

spending and saving. Luxury goods may be the desire of many but only few can

afford them. Although this is also a question of what kind of things different people

are willing to splurge on.

Personality and lifestyle are also factors that influence consumer behavior. Kotler and

Keller (2009) define personality as a set of differentiating psychological

characteristics that lead to relatively consistent and long-lasting responses to

environmental stimuli. Solomon (2007) shares this view by stating that personality

concerns the unique psychological features of a person and effects the way people

respond to their environment. According to Kotler and Keller (2009) as well as Asch

and Wolfe (2001), lifestyle on the other hand refers to the persons way of living as

expressed in activities, interests and opinions whereas according to Solomon (2007),

lifestyle is more related to buying behavior referring to the pattern of consumption

habits that reflects how a person allocates his or her time and money.

According to Solomon (2007), consumers personalities are important in terms of

buying behavior in the sense that they often reflect unconscious motives underlying

purchasing decisions. People cannot necessarily automatically recognize the real

motive or reason for buying a certain product or brand. This assumption has been

derived from Freuds theory of personality where the human mind consists of the id

(directs a person towards immediate satisfaction without thinking about the

consequences), the superego (the counterweight to the id) and the ego (the referee

between the id and the superego that tries to mediate between temptation and virtue).

Self-image and normative influences are likely to demonstrate a linkage. Self-image

refers to the perceptions individuals have of what they are like (Goldsmith, Moore

&Beaudoin 1999), whereas normative influence is defined as the other people or

groups who would approve or disapprove of the respondents performing behavior

(Ajzen&Fishbein 1980), Hu and Jasper (2006) revealed that an individual adopts a

behavior, which complies with others (normative influences), resulting from the belief

that adoption will enhance the individuals self-concept or self-image.

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The study of Siu and Wong (2002) investigated price, packaging, promotion,

salesperson, and store distribution for cosmetic product attributes in Hongkong.

Anderson and He (1998) found quality, price, brand, packaging, advertising, and

salesperson as influential attributes when Chinese consumers considered using

cosmetics in China. Additionally, Johri and Sahasakmontri (1998) revealed that

consumers attitudes toward grenn (environmentally-friendly) cosmetic products

evaluate a product based on its fragrance, color, performance, brand name, price,

whether it is safe for skin, opportunity to pre-test, outlet atmosphere, packaging,

ingredients, and whether it was tested on animals. Therefore, attributes affecting

buying skin care products are expected to include price, quality, packaging,

promotion, salesperson, advertising, brand and type of distribution. Consequently,

there is need to investigate how those attributes influence the attitudes of Indian

consumers towards buying hair care products.

Beaudoin and Goldsmith (1998) implied that attitudes towards buying apparel were

associated with self-image because purchasing apparel satisfies various needs, such as

self-image and self-identity. Like apparel, skin care cosmetics have symbolic and

communicative value. Cosmetics have found to influence person perception since

these products effect personal appearance. Accordingly, Coulter, Feick, and price

found that self-image had an influence towards applying and buying cosmetic

products for women in Hungary. This study proposes to examine self-image in a

different gender and therefore it expected that self-image in a different gender and

therefore it is expected that self-image influences the attitudes of consumers in the

purchase of hair care products in this study.

Shih and Fang (2004) found that normative influences such as friends, colleagues, and

family. So that, attitudes had influenced on behavioral intention in adopting internet

banking for customers in Taiwan; Buttle and Bok (1996) also found 2 predictor

constructs, which were attitudes and normative factors, affecting business travelers

intention toward staying in the hotel on the next business trip in Seoul, South Korea.

There is a need to examine the influence of attitudes toward using skin care products

and normative influences upon the intention to buy hair care products.

The major benefit of the reasoned action model is that it explains and predicts

purchasing behavior utilizing purchase intentions as mediator. On the other hand,

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Albrecht and Carpenter (Choo, Chung &Pysrachik 2004) have questioned the

mediating role of behavioral intention in purchase behavior and have argued that there

is a direct casual relationship between attitudes and behavior. However, most

researchers have demonstrated the validity of behavioral intention as a moderating

variable of behavior in various research settings.

There are mainly 3 focuses within the previous analysis that investigated that the

factors influencing whole switching, specifically the context, marketing mix factors

and client characteristics. The results of marketing mix factors are one in every of the

foremost interested areas and been frequently studied, and huge numbers of studies

centered on the influences of advertising and promotion on brand switching behavior.

Some analysis focused on the changes of consumers attitudes towards totally

different brands in numerous things, and the way situational context interact with

selling actions. Different analysis studied on how demographic variables influence

advertising/promotion responsiveness, the hierarchy of advertising/promotion

influence, and comparison of various products classes.

The relationship between product, price, promotion, advertising and whole switching

are examined in numerous product markets, as well as service and merchandise

sectors, and in numerous geographic markets.

Morgan and Dev (1994) examined 3 varieties of variables that influence brand

switching behavior, particularly changes in usage context or situation, marketing mix

variables which are directly controllable by the firm, and consumer background

variables. The analysis has been conducted inside service business attributable to the

upper importance of maintaining existing consumers for service retailing. The

advantage of this analysis is that the thought of each controllable and uncontrolled

factors influencing brand switching. The influence of controllable variables marketing

mix variables has been examined below a range of contexts, and varied from totally

team of consumers who have different characteristics. Moreover, the researchers

believed that context, control, and consumers variables could influence the level of

involvement, variety seeking, and cognitive processing. (Morgan and Dev, 1994),

and its meaningful and necessary to check the connection between client

involvement and brand selection behavior. The result showed the sturdy impact of the

special deal supply on brand switching, and therefore the necessary impact of usage

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context. The explanation of the importance of context, in keeping with Morgan and

Dev (1994), would be the result of consumers could not evaluate their purchase while

not considering the merchandise expertise context. Therefore, Morgan and Dev

believe that contextual analysis is crucial for investigating brand selection behavior in

service retail trade.

Another analysis conducted by Miller and Ginter (1979) tested the importance of state

of affairsal variables and studied if consumers attitudes can vary during a totally

different situation. Miller and Ginter (1979) believed that its meaningful to check the

variations of attitudes towards totally different brands during a specific state of affair.

Moreover, Miller and Ginter (1979) assumed that consumers brand selection

behavior could also be varied in numerous things. During the analysis, mainly 3

assumptions are made purchase levels of specific brands, attribute importance, and

perceptions of specific brands will vary differently across situations (Miller and

Ginter, 1979). The result showed that there is a modification in brand selection across

4 eating things, and sales volume of various brands additionally varied across 4

occasions.

The importance of analysis on alternative fast moving consumer goods in terms of

situational influence on brand switching could also be seen from the on top of

empirical analysis presented. In Chinese market, the dramatically increase in sales

throughout holidays, like spring festival and national day, worries by marketers and is

interest to several researchers. Each marketers and researchers have an interest within

the special consumer behavior throughout holidays that are thought of because the

golden amount of selling. Therefore, the analysis on the influence of scenario on

brand alternative behavior might be useful for corporations to create marketing

program based mostly on the importance of brand name attributes for special

vacation, and to create certain those vital brand attributes throughout a special amount

of your time is centered and promoted.

Marketing tools have been studied by many researchers in terms of their influence on

brand selecting behavior, and some models have been developed. McAlister (1982)

mentioned the factors influencing brand switching marketing variables, such as

price, product design, promotion and distribution and situational variables.

Carpenter and Lehmann (1985) created a model to analyze the relationship among

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marketing mix, brand switching, and competition. During this model, marketing mix

elements, particularly worth and advertising, have been investigated, further as how

these marketing mix elements influence complete switching and competition after

they works along with alternative factors such as brand name and merchandise

feature. The analysis found that price, promotion and advertising have both negative

and positive impacts on brand switching; particularly advertising, it will stimulate

customers to shop for more products, but at a similar time it is passing the data of

worth consciousness which may increase brand switching. Moreover, the analysis

prompts that corporations might reduce the intension of competition through its name

and multiple entries in the product line under the same brand name (Carpenter and

Lehmann, 1985). Researchers (Carpenter and Lehmann, 1985) prompt that by using

brand name to distinguish their own brands from others and by launching more

products under a similar brand, corporations will increase their complete awareness

and their competitiveness. In addition, (Carpenter and Lehmann, 1985) argued that it

is not sensible to adopt a single marketing strategy for all the products under a similar

brand and therefore the strategy for various levels of brands ought to diverge. For

instance, for the higher level brands having sound brand images, advertising could be

used to develop their good brand images; while for the lower level brands, price

promotion could be used to extend the sales volume.

The correlation between advertising and brand switching has been studied, and there

are different points of view towards the influences of advertising in terms of brand

switching behavior. Especially, the hierarchy models of consumers response to

advertising. A range of analysis learning on the method of how consumers respond to

advertising with their purchase additionally got to be investigated, as a result of there

are many intermediate effects before the ultimate purchase.

In order to understand the relationship between and brand alternative, it is necessary

to understand the objectives of advertising. There are some arguments concerning the

purposes of advertising. Some researchers mentioned that advertising is used to attract

new consumers, whereas some researchers argued that advertising is especially a tool

to take care of existing consumers and make them continue to purchase the same

brand.

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According to Lavidge and Steiner, the purposes of advertising mentioned by

researchers are mainly from two aspects: short-term and long-term effects (Lavidge

and Steiner, 1961). The short-term impact is aimed to attract a lot of consumers and

boost immediate sales, whereas the long-term effects can be providing information

and educating consumers to differentiate one brand from others, build up brand image

and improving client loyalty, and eventually increasing sales.

It is not surprise that the target of advertising is to boost sales: however where the

increased sales come from seems a motivating question for researchers. Many

researches focusing on this question suggests that there can be mainly two divisions

of the growing sales throughout advertising campaign. First, extra sales maybe made

because of the switching from other brand: consumers attempt new brands which they

do hardly ever purchase. Or consumers repeat their purchases and purchase a lot of

same brand merchandise. Analysis conducted by Deighton, Henderson and Neslin

(1994) discovered that sales increase comes largely from brand switching rather than

repeated purchase throughout an advertising activity. That is to say, the influence of

advertising on those consumers who already bought the merchandise promoted is a

smaller amount obvious than on those new consumers.

Several analyses will prove the correlation between advertising and sales increase.

Little 1979s analysis detected the positive result of advertising on sales, and equally.

Raj (1982), McDonald (1970) found the positive relation between advertising

exposure and complete switching, the analysis showed the higher switching rate when

consumers have a lot of chances to ascertain advertisements.

However, Ehrenberg (2000) held a different read purpose towards the target of

advertising. Ehrenberg 2000, p39, advertisings main role is to reinforce feelings of

satisfaction with brands already bought. Researchers (e.g. Simon and Arndt, 1980;

Tellis, 1988) holding the similar purpose of real recommended that the result of

advertising is to strengthen repeat purchase behavior, rather than to form brand

switching, and advertising has stronger impact on the consumers who are familiar

with the brand or already heard of the message which advertising is attempting to

pass.

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The effects of advertising are explained by Raj (1982) after the analysis which

targeted on the influence of shopper loyalty on the results of advertising has been

done. Per Raj (1982), advertising might have strong influence on lower loyalty

consumers by attracting them to change to the brand advertised, and higher loyalty

consumers can probably respond to the advertising with repeat purchase and increase

their purchase quantity. In this analysis 3 categories variables are tested: consumer

type, advertising content, and product type (Raj, 1982) three folds of investigations

are done in this analysis, first, the variations between two teams of consumers, namely

loyal consumers and non-loyal consumers; second, how advertising contents can

influence differing types of consumers; and third how advertising effectiveness can

amendment with different product varieties. The result urged that advertising strategy

ought to be adjusted base mostly on differing types of consumers. Moreover, the

analysis discovered a noteworthy result, and showed that there is no obvious

change/decrease in sales of competitive brands, though there is a rise in sales of

advertised product.

In Ehrenberg (2000)s opinion, repeat purchase accounts an outsized quantity of sales

volume of frequently purchased products, and analysis on advertisings main

effectiveness shouldnt solely be limited in discovering the last word purchase

behavior or the persuasive effectiveness of advertising, rather each stage of the

process of responsiveness must be investigated, as a result of there is no strong proof

to prove the effectiveness of persuasive role of advertising. In addition, a long-term

effect is also resulted from the reinforcement of advertising. Consumers might switch

back to the brand which they usually get after the promotion and advertising

campaign, in order to create a new purchase behavior and create repeat purchase,

advertising reinforcement is crucial and necessary (Ehrenberg, 2000).

Although the majority of marketer use immediate sales increase as a measurement of

effectiveness of advertising, the short-term affects cannot be thought of because the

completed criteria for the influence of proposed advertisement, as a result of long-

term influence might occur in an exceedingly comparatively longer period. Lavidge

and Steiner (1961) urged that though short-term effects should not be ignored,

providing effects of abundant advertising would seem in an exceedingly long-term

period and therefore the effects dont seem to be direct (Ehrenberg, 2000). Therefore,

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in Lavidge and Steiners purpose of read, both short-term and long-term effects ought

to be invested.

Therefore, the increasing sales may not be the only criteria for the high effectiveness

of advertising, rather advertising effectiveness ought to be measured based mostly on

3 objectives: developing brand awareness and providing product knowledge, making

brand preference and positive feeling, building up trust and stimulating purchase

(Lavidge and Steiner, 1961). Beerli and Martin Santana (1999) argued that advertising

effectiveness ought to be outlined clearly. As a result of though increasing sales is the

goal of every company, the objectives of advertising is different from business goals,

and therefore the main purpose of advertising is to pass info and communicate with

existing or potential consumers. In different words, the effectiveness of advertising

ought to be evaluated based mostly on objective achievement. If the objective of

advertising cannot be achieved, its effectiveness may not be acceptable.

Different factors might affect the effectiveness of the advertising simultaneously. The

results of the analysis conducted by Lodish et al. (1995) shows that there is no strong

correlation between advertising expenditure and sales effects, as a result of there are

many different factors which may influence the advertising effectiveness, such as

brand and media strategy, and different product categories.

Biel and Bridgwater (1990) urged that the effectiveness of advertising, especially for

fast moving consumer goods, is said to liking and feeling towards the advertising.

There is a positive relation between liking and effectiveness of advertising. In

different words, if the TV advertising is more likable, shoppers is also more possible

to be persuaded. Moreover, the more relevant and meaningful advertising is more

effective than the advertising which solely has better entertainment functions and

therefore the factors which influence liking of consumer are trusted product category,

different forms of products might have issues/ various factors influencing industrial

liking or the importance of each factor might amendment. Hierarchy models of

consumers responses to advertising Vakratsas and Ambler (1999) analyzed great

amount of analysis on the results of advertising and found that there have been mainly

3 forms of models of how advertising works. The first category is market response

model, which no intermediate advertising effects thought of. Typically, advertising,

price, and promotional measures are associated with behavioral measures such as

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sales or brand selection. Vakratsas and Ambler (1999) held the positive read towards

market response models attributable to its advantages. First, secondary data or

objective data could be utilized in analysis, and most important, the uncertainties

which are caused by intermediate measurement could be eliminated.

Furthermore, there are 2 levels of studies, namely aggregated-level and individual-

level studies, the previous uses market-level data, such as brand advertising

expenditures or market share; the latter use single supply data such as individual

brand selection (Vakratsas and Ambler, 1999). one in every of the samples of

aggregate level studies could be the analysis on the relationship between the impact of

advertising sales and advertising spending (Lodish et al., 1995).

The second category of models grouped by Vakratsas and Ambler (1999) are

hierarchy impact models, though there are several different hierarchy models and they

all concentrate on the process of advertising effects. In different words, hierarchy

impact models assume that the influence of advertising on consumers is a method, and

there are several steps and intermediate advertising effects in this method. One in

every of example of hierarchy advertising impact model is AIDA model:

Attention-Interest-Desire-Action studied by E. St. Elmo Lewis in 1989 (Vakratsas

and Ambler, 1999, p.26; Ehrenberg, 2000, p.41).

The steps and therefore the method of how advertising affects consumer ought to be

studied, though the validity of hierarchy models is argued by researchers as a result of

very few proof are often found (Palda, 1966) providing consumers may not change

their brand preference immediately from one brand to another, how consumers move

from one stage up to next stage and at last move to actual purchase stage is a

necessary problem for understanding consumers brand switching behavior, and it is

conjointly useful for increasing the effectiveness of marketing communication.

Lavidge and Steiner (1961) argued that the changes of all the stages of influence

should be evaluated, rather than solely live the event of brand name awareness or

sales stimulation. Theses 3 aspects of consumer responses could be derived from a

classic psychological model (Lavidge and Steiner, 1961), and similarly, Beerli and

Martin Sartana (1999) urged that the simplest thanks to live personal response is 3

component behavior analysis, namely cognition, affection and conation or rational,

emotional and striving states (Lavidge and Steiner, 1961). Moreover, Ehrenberg

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(2000) urged that the work of advertising could be studied from 3 aspects: product

awareness, product trial, and repeat purchase.

Similarly, Vakratsas and Ambler (1999) believed that advertising has some

intermediate effects such as on consumers beliefs, attitudes and behavior. Vakratsas

and Ambler (1999) mentioned the influence of advertising on these 3 dimensions, and

especially the behavioral effects, as an example, the influence on selection.

Morison (1966) compared 3 models which analyzed the influence of previous

purchase on buying call. First model assumes that buying call is a linear learning

process, since past purchase experiences would influence current call and the

influence of recent purchase have much stronger impact. In contrast, the second

model shows that solely the recent purchase would influence current purchase call,

and the third model assumes that there is no impact of previous purchase on current

purchase.

Deighton, Henderson and Neslin (1994) argued that it is not affordable to judge

advertising influence solely based mostly on current advertising. As a result of

consumers would respond differently to a same advertising looking on they recently

bought the brand or not. Therefore, without investigating the influence of previous

purchase, advertising and their interaction, the study would be less meaningful.

Deighton, Henderson and Neslin (1994) steered that advertising should not specialize

in the consumers simply bought the brand; instead, other potential users ought to be

targeted if the advertising needs to stimulate brand switching, since consumers who

simply bought the brand would have little responsiveness to the advertising.

It is price to note the interaction between getting expertise of consumer and

advertising (Deighton, Henderson and Neslin, 1994), as a result of the expertise of

previous advertising and get could interact with present advertising and end in

different brand choice behaviors (Ehrenberg, 2000). Deighton, Henderson and Neslin,

1994) developed a model which illustrates the relations among previous

advertising/promotion, current advertising/promotion, previous purchase, and current

purchase. Moreover, during this model, price, brand preference and size preference

have been thought about as determinants of current purchase. It showed the continual

influence of previous advertising through its interaction with previous purchase. The

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model shows again that the influence of advertising and promotion is not solely short-

term, most frequently they would affect sales during a longer period of time with the

expertise of previous purchase.

Ehrenberg (2000) mentioned that consumers may not be interested in a billboard for a

brand or new brand which they are doing not frequently purchase, and consumers

could purchase over one brand product throughout a period of time. Therefore, the

first step of brand choice behavior, creating brand awareness, is very important.

Additionally, stimulating consumers to undertake the new brand is also crucial, as a

result of consumers will most likely solely type repeat purchase behavior when they

try the product.

Promotion tools have been thought about mutually of the most helpful tools to

influence sales volume in an exceedingly short-term period of time (Laroche et al.,

2003). Neslin et al. (1985) thought about promotions as sales acceleration and

maximizing tools. According to Gupta (1988), the impacts of price and promotions on

which brand consumer will opt for, after they are willing to buy merchandise, and the

way a lot of they are going to obtain are vital. Laroche et al. 2003) summarized 3

main benefits of marketing, as well as triggering unplanned purchase, encouraging

consumers to buy non-promoted merchandises, accelerating the quantity of looking

journeys to the store. Clearly promotion has been thought about one in every of the

stimuli of brand switching and repeat purchase.

Oliveira-Castro et al. (2005) argued that the major impact of promotions is on brand

shifting rather than increased consumption. Oliveira-Castro et al. (2005) additionally

suggest that complete purchasing need to be studied from 2 dimensions, specifically

utilitarian and symbolic factors, as a result of consumers want to realize each

utilitarian and informational edges from their brand purchases. Thats to say, when

a consumer is shopping for a brand she or he is truly shopping for not solely the

functions of the merchandise but additionally the fulfillment of emotional needs.

There are 2 double explanations for the increased sales resulted from promotion, one

is the increased purchasing quantity from existing consumers, and therefore the

different is the new purchase from new consumers. Existing consumers might store

more product that they dont want immediately, they will store pile the merchandise

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throughout promotion activities. If all the increasing sales from existing consumers in

short-term, there could also be no vital changes or increase in sales in an exceedingly

long-term amount as a result of the shop piling (Gupta, 1988). Therefore, the most

purpose of promotion could be attracted more new customers, rather than stimulate

existing shoppers to buy more some products. However, according to Ehrenberg and

Hammond (1995), price promotion has more impacts on existing consumers rather

potential consumers. In distinction, the results of different research (Gupta, 1988:

Bell, Chiang and Padmanabhan, 1999) shows that superior effect of promotion is the

patrons who switch from different brands rather than on the prevailing buyers. Within

the research conducted by Gupta (1988), brand switching accounts more than

eightieth of sales increase throughout the promotion, as well as a tiny low share of

sales increases come from the switching within a brand.

Promotion is one in every of the aspects within the selling combine which have been

studied in terms of its relationship with the consumers responsiveness, especially at

the stage of behavior: the actual purchase behavior (Shi, Cheung, and Prendergast,

2005).

According to (Shi, Cheung, and Prendergast, 2005), previous research has revealed

the link between marketing and consumers behavioral responsiveness, and therefore

the research showed that marketing has the positive influence on consumers

behavior, like brand switching, stockpiling, purchase acceleration, product trial and

spending larger amount (Shi, Cheung, and Prendergast, 2005), although there are

some arguments regarding the negative influences of price promotion for higher level

brands (Ehrenberg, Hammond, and Goodhardt, 1994). However, the negative effect

on brand has not been proved by the research conducted by Davis, Inman and

McAlister (1992). The study compared the evaluations of consumers analysis for

brands once promotion, and located that there is no obvious amendment of

consumers analysis for brands once the promotion. The cognitive affective

behavior framework has been adopted in this study, and complete analysis queries

have designed based mostly on this framework. The variables of consumers felling,

brand quality, and merchandise usage have been used to evaluate brands. Questions,

like make me feel smart regarding myself, is prime quality, is a complete I exploit

frequently, have been asked to check respondents attitudes towards brands.

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Research studied on 5 promotion tools and brand switching in Hong Kong (Shi,

Cheung, and Prendergast, 2005) proved that 3 promotion tools, price discounts, buy

one get one free offers, and in store demonstration, have vital influence on complete

alternative. The explanation for this result could also be explained by different

researchers, like the consequences of in-store demonstrations on brand switching.

Ram and Sheth (1989) believed that demonstrations in stores can attract consumers to

buy new products, and therefore the barriers of perform and emotion is reduced.

Different promotional tools, like cents off and free gift have been additionally

studied in (Lichtenstein et al.s research in 1997).

Some researchers argued that the studies on marketing should not be solely restricted

in behavioral level; instead, the psychological or attitudinal elements must be

investigated furthermore (Lichtenstein et al., 1997; Laroche et al., 2003). It is similar

with the arguments regarding the influence of advertising on brand alternative

behavior; some researchers are interested within the intermediated influence like

advertising/promotion effects on emotional and attitudinal changes before purchasing.

In Laroche et al., 2003 on the linkage between promotional tools and consumers

emotional, attitudinal, and behavioral responses, 2 differing types of promotional

tools have been investigated to match their distinctive effects on consumers, and this

research additionally studied the contributions of many trait variables to the

distinction of responsiveness.

Price has been thought about as a determinant of brand switching in the Linear

LearningModel developed by Lilien (1974). How consumers can behave a

modification their purchases when some product classes and types are in value

promotion, how consumers can response to cost changes, how value modification

may result in responsiveness from consumers and complete sales changes are

interested by marketers and researchers, as a result of value is one in every of the

foremost important factors of creating marketing strategic and tactical decision like

pricing, promotion and segementation (Oliveira-Castro et al., 2005).

According to Oliveira-Castro et al., 2005, customers might response value promotion

differently for different levels brand, and their goal would be to gain the maximum

advantages as well as each utilitarian and informational advantage, in addition as

minimize their purchase prices. Krishna (1992) urged that buyers have varied

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expectations for different brands; consequently, they may answer price oriented

promotions differently. That is to say, consumers completely different value

expectations for brand can in all probabilit