Consumer Behaviour Analysis

Kashyap MitraUnitedworld School of BusinessPGPM VI (2014-2016)

Wild Stone

• Leading male grooming brand with presence across multiple categories such as deodorant, talc, perfume, soap and shaving products.

• Is among the top three deodorant brands in the country.

• Believes in continuously offering new choices to their consumers, by constantly evaluating potential categories in the male grooming space.

Indian FMCG Market

• Fourth largest sector in the Indian Economy.• Expected to increase at a growth rate of 14.7%

to touch US$ 110.4 billion (INR 7019.50 billion) during 2012 – 2020.

• Rural FMCG market anticipated to increase at a rate of 17.7% to reach US$ 100 billion (INR 6358.24 billion) during 2012 – 2025.

2020 (F) 2015 (F) FY 12 FY 11 FY 10 FY 09 FY 08 FY 07 FY 060

20

40

60

80

100

120

FMCG MARKET SIZE

FMCG REVENUES ($ Bn)

Source : India Brand Equity Foundation (www.ibef.org)

Food Products43%

Personal Care22%

Fabric Care12%

Hair Care8%

Households4%

OTC Products4%

Baby Care2%

Others5%

Market break-up of Indian FMCG industry

Source : India Brand Equity Foundation (www.ibef.org)

2006 2007 2008 2009 2010 2011 2012 2013 2014 20150

1000

2000

3000

4000

5000

6000

INDIA GDP PER CAPITA PPP ($)

INDIA GDP PER CAPITA PPP ($)

(Source: www.tradingeconomics.com | World Bank)

Demand-Side Drivers

• Consistent GDP Growth. • Increasing Consumer Income. • High Private Consumption– India has a very high rate of private consumption of 61%.– Of that, a further 60% is due to retail spends - goods and

products that people consume, as opposed to services or essential consumption items like rent and education.

• Rising Urbanization– India has 70% of its population living in rural areas.

Deodorant Industry Overview

• Has come up very fast in the FMCG category.• Market size (2007): Rs. 283 Cr.• Market size (2014): More than Rs. 2100 Cr.• Fastest growing product in the FMCG category.• FMCG growth rate: 9%• Deodorant industry growth rate: 16%• India is the fastest growing deodorant market

in the world.

2007 2008 2009 2010 2011 2012 20140

500

1000

1500

2000

2500

Deodorant Market Size in India

Deodorant Market Size in India (Rs. Crore)

(Source: Euromonitor International)

Market Share

• According to an Economic Times report – based on the March 2014 quarter Nielsen data:– Fogg leads the market with 17% market share.– Followed by Park Avenue with 8%. – Axe has slipped to third place with only 6% market

share and its market share is now almost identical to Wild Stone.

The Market Leader: Fogg

• Owned and marketed by Vini Cosmetics.• Found out that deodorants can be differentiated

by having less gas and more perfume.• Guaranteed their customers to have 800 sprays

from a bottle of Fogg Royal priced at around Rs.200/- in 2014.

• The working functionality of Fogg was to have more number of sprays in a bottle.

The Market Leader: Fogg

• The functionality was also adopted well in the promotion of the product with the tagline ‘No Gas, Only Deo’.

• This kind of positioning was also different from the competition, including Axe, which emphasized only on the seduction aspect to sell their deodorants.

• Used a Rational Appeal instead of an Emotional Appeal.

Market Research

OBJECTIVE OF THE STUDY

To understand, analyse and compare consumer behavioural patterns and influencing factors.

METHODOLOGY

• Sampling Techniques:– Convenience Sampling– Snowball Sampling

• Sample Size: 336

DATA COLLECTION

• Instrument Used: Questionnaire.• Questionnaire Type: Closed ended and Open

ended.• Number of Questions: 20.

DATA ANALYSIS

• Techniques used: Pie Charts.• Statistical Tools used: Hypothesis testing.

Demographic Distribution: Break-up of age.

Age Group

15-20 21

21-25 160

26-30 107

31-35 37

36 & above 11

Total 336

15-206%

21-2548%

26-3032%

31-3511%

36 & above3%

Age Group

Demographic Distribution: Break-up of Occupation

Occupation

Student 147

Service 168

Self-employed 21

Total 336

Student44%

Service50%

Self-employed6%

Occupation

Consumer Preference

Gender Deodorant Users %

P. Deodorant Users %

Perfume Users %

Female 51 28 54.9 6 11.7 17 33.3

Male 285 208 72.9 64 22.4 13 4.5

Total 336 236 70.2 70 20.8 30 8.9

Hypothesis Testing• To test for the equality of two proportions, we can perform a

z-test.• Null Hypothesis (H0): p1 = p2 (deodorants are as popular to

women as to men)• Alternate Hypothesis (H1): p1 is not equal to p2• Result: z = -2.583• Table Value @ 95% level of confidence: 1.96• Therefore, |Calculated Value| > |Table Value|• Hence, we reject the null hypothesis, proving that the

deodorant market in India is dominated by the men’s deodorant category.

Brand PreferenceBrand Preference

Wild Stone 52

Park Avenue 33

Fogg 21

Engage 5

Axe 34

Layer 13

Wild Stone33%

Park Av-

enue21%

Fogg13%

En-gage3%

Axe22%

Layer8%

Brand Preference

Key Findings: Even though Fogg is the market leader, Wild Stone has a really good presence in this part of the country. Wild Stone’s Red and Park Avenue’s Good Morning are the two most popular deodorant fragrances in this region.

Brand Loyalty

Brand Loyalty

Non-switchers 118

Switchers 218Non-switchers

35%

Switchers65%

Brand Loyalty

Hypothesis Testing• Z-type test.• Null Hypothesis (H0): P=1/2 (the number of switchers =

the number of non-switchers)• Alternate Hypothesis (H1): P is not equal to ½ • Result: z = 5.55• Table Value @ 95% level of confidence: 1.96• Therefore |Calculated Value| > |Table Value|• Hence, we reject the null hypothesis that the number of

switchers and the number of non-switchers are the same.

Key Findings

• This acts both as an advantage and a disadvantage for Wild Stone or any other deodorant brands.

• It suggests that it might be easy for a brand to acquire customers from the competitors but at the same time it is very hard to retain customers as well.

Wild StoneHave you used Wild Stone?

Yes 173

No 155

This table shows that 53% of the sample size or 173 out of 336 people have used Wild Stone out of which only 52 are still using it.

• Good demand in the sub-urban regions due to a good relationship between the firm and the retailers and aggressive sales mechanisms.

• The problem lies within the urban areas - tough to convert non Wild Stone users into Wild Stone users, even though almost everyone has heard of and knows the brand Wild Stone.

Do you know about Wild Stone?

Yes 334Blank 2

New Deodorant

Interest in buying a new deodorant in the market

Yes 227 No 97Maybe 11

Yes68%

No29%

Maybe3%

Openness to Experience

Price

Reasonable price range100 - 149 4

150 - 199 88

200-249 188

250 & above 52

100 - 1491%

150 - 19927%

200-24957%

250 & above16%

How much is a customer is willing to spend on a deodorant

Influencing Factors

What influences you to make purchase decisions?

Advertisements 28Price 71Recommendations 41Fragrance 195

Advertisements8%

Price 21%

Rec-om

menda-

tions12%

Fragrance58%

Influencing Factors

Medium of PromotionMedium of Brand

AwarenessTVC 314Others 22

93% of the respondents said that they’ve come to know of Wild Stone through TV commercials.

• In the present-day scenario, due to technological advancements, people spend more time on the internet than watching TV.

• Almost non-existent online presence.• Last Facebook post: December 31st 2014.• No presence in other social networking sites such as

Instagram and Twitter.

Consumer Preference

Preference

Deodorant 236Perfumed Deodorant 70Perfume 30 Deodorant

70%

Perfumed Deodorant

21%

Perfume9%

Preference

Deodorants v/s Perfumed Deodorants

• Fogg leapfrogged their competition and became the market leader with the help of product innovation in the form of perfumed deodorants.

• Majority of the population still prefers using deodorants.

• Pareto Analysis: you can say that 80% of the market demands deodorants while 20% demands perfumed deodorants; where 80% of this 20% demand is catered by Fogg alone. (Used just as an example and these are not actual values)

Recommendations

• How to bridge the gap: intensive growth; integrative growth; and diversification growth.

• Wild Stone is looking into and integrative growth plan and aspires to have under them a full portfolio of men’s personal care products in order to increase their brand equity and sales volume.

• All deodorant brands are concentrating their focus on Perfumed Deodorants.

• In my opinion, what Wild Stone can do is to focus on Deodorants and not Perfumed Deodorants.

• The effort should lie in shifting from the “Market penetration” quadrant to the other quadrants.

New Market

• To maximize market share, you’ll have to maximize revenue by acquiring either new customers or by hijacking your competitor’s customers.

• Changing their target segment would not be feasible as they’ve already created a deep brand image within the mind of the customers.

• Rural FMCG market. (growth)• Smaller SKUs priced at around Rs. 99/-.

Focus

• This is where their focus on Deodorants instead of Perfumed deodorants will pay-off.

• The price-sensitive nature of the rural markets would make it hard, if not impossible, at this time for Perfumed Deodorants to be sellable.

• If the industry is going one way, this might be a good time for Wild Stone to go the other way.

Going Public

• ROI in the West Zone < East Zone.• To increase their market share, they need to

make an impact all over the country, not just in the Eastern region.

• Going public would be a good option.• They could use that capital in order to expand

their operations in the future.