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CHAPTER TWO
RESEARCH METHODOLOGY AND
STATISTICAL TOOLS APPLIED
2.1 An Overview of FMGC sector
2.2 Research Methodology
2.2.1 Research Design
2.2.2 Universe of the Study
2.2.3 Survey Population
2.2.4 Sampling Design
2.2.5 Data Collection
2.2.6 Construction of Data Construction Instruments
2.2.7 Validity and Reliability
2.2.8 Analysis Pattern
Variables of the Study
Content Analysis
Statistical Tools Used Analysis
2.1 OVERVIEW OF FMCG SECTOR
FMCG is the acronym of Fast Moving Consumer Goods which is also known as Consumer
Packaged Goods (CPG). Fast moving consumer goods are products that have a quick
turnover, and relatively low cost. These are all consumable items (other than
groceries/pulses) that one needs to buy at regular intervals. These are items which are used
daily, and so have a quick rate of consumption, and a high return. FMCG generally include
a wide range of often purchased consumer products such as toiletries, soap, cosmetics,
teeth cleaning products, shaving products and detergents. The purchasers usually put less
thought into the purchase of FMCG than they do for other durable products such as
electronic items. In comparison with other industries such as automobiles, computers, and
airlines, FMCG business has a steady rate of growth, for it does not suffer from huge
recession and layoffs every time the economy starts to dip. In FMCG business absolute
profit made on the products is relatively small. Since they generally sell in large numbers,
the overall profit on such products can be huge.
FMCG can broadly be categorized into three segments which are:
Household items: like Household cleaners - Dish/utensil cleaners, floor cleaners, toilet
cleaners, air fresheners, mosquito repellents, soaps, detergents, household accessories,
etc.; Fabric wash - laundry soaps and synthetic detergents.
Personal care items: : like Oral Care – toothpaste, mouth-wash; Skin Care - creams,
lotions; Hair Care - hair oil, shampoos, conditioners, personal wash – soaps; cosmetics,
deodorants, perfumes; paper products - tissues, diapers etc. ; shoe care.
Food and Beverages: Foods - as snacks, confectionary, chocolates, bakery products -
biscuits, bread, cakes. Beverages – tea, coffee, juices, bottled water, health beverages and
soft drinks.
Global leaders in the FMCG segment are Nestlé, ITC, Hindustan Unilever Limited, Reckitt
Benckiser, Unilever, Procter & Gamble, Coca-Cola, Carlsberg, Kleenex, General Mills,
Pepsi, Gillette etc.
The burgeoning middle class Indian population, as well as the rural sector, presents a huge
potential for this sector. The FMCG sector in India is at present, the fourth largest sector
with a total market size in excess of USD 13 billion as of 2012. This sector is expected to
grow to a USD 33 billion industry by 2015 and to a whooping USD 100 billion by the year
2025.
This sector is characterized by strong MNC presence and a well-established distribution
network. In India the easy availability of raw materials as well as cheap labour makes it an
ideal destination for this sector. There is also intense competition between the organized
and unorganized segments and the fight to keep operational costs low.
A look at some factors that will drive growth in this sector:
Increasing rate of urbanization, expected to see major growth in coming years.
Rise in disposable incomes, resulting in premium brands having faster growth and deeper
penetration.
Innovative and stronger channels of distribution to the rural segment, leading to deeper
penetration into this segment.
Increase in rural non-agricultural income and benefits from government welfare
programmes.
Investment in stock markets of FMCG companies, which are expected to grow
constantly.
Some of the challenges this sector is likely to face are:
Increasing rate of inflation, which is likely to lead to higher cost of raw materials.
The standardization of packaging norms that is likely to be implemented by the
Government by Jan 2013 is expected to increase cost of beverages, cereals, edible oil,
detergent, flour, salt, aerated drinks and mineral water.
Steadily rising fuel costs, leading to increased distribution costs.
The present slow-down in the economy may lower demand of FMCG products,
particularly in the premium sector, leading to reduced volumes.
The declining value of rupee against other currencies may reduce margins of many
companies, as Marico, Godrej Consumer Products, Colgate, Dabur etc. who import raw
materials.
To conclude, this sector will continue to see growth as it depends on an ever-increasing
internal market for consumption, and demand for these goods remains more or less
constant, irrespective of recession or inflation. Hence this sector will grow, though it may
not be a smooth growth path, due to the present world-wide economic slowdown, rising
inflation and fall of the rupee. This sector will see good growth in the long run and hiring
will continue to remain robust.
2.2 RESEARCH METHODOLOGY
2.2.1 RESEARCH DESIGN
The research design of the present study is exploratory-cum-descriptive-cum-diagnostic.
Exploratory research helps in knowing more about the problem. The study is exploratory
as few studies have been conducted in the area of packaging as promotional strategy in
consumer goods. Moreover, the prevalent packaging strategies used by the marketers have
been explored. The study is descriptive as it identifies the factors influencing packaging
and is being conducted with the help of a structured schedule. It is also diagnostic in its
nature as an attempt has been made to see the relationship between the prevalent packaging
strategies implemented by the marketers and the promotion of consumer goods.
2.2.2 UNIVERSE OF THE STUDY
The universe means the entire mass of observation which is the parent group from which a
sample is to be taken. The universe of the proposed study has been confined only to the
FMCG (Fast Moving Consumer Goods) where packaging strategies can play a significant
role.
2.2.3 SURVEY POPULATION
The survey population of the study is confined to the consumers of FMCG in NCR and
Haryana region.
2.2.4 SAMPLING DESIGN
Sampling is the act, process or technique of selecting a suitable sample or a representative
part of a universe for the purpose of determining parameters or characteristics of the whole
universe or population. The sample has been selected from consumers, who consume
FMCG (Fast Moving Consumer Goods). Non-probability sampling technique has been
applied in the study. The sample has been selected by applying mainly judgmental
sampling. The sample size is 200. A fixed number of respondents have been taken from the
following categories: 100 males and 100 females; in each category of male and female 50
are from urban area while other 50 are from rural area; further in each category of rural and
urban approximately 10 respondents each are from different age groups (11-20 years, 21-
30 years, 31-40 years, 41-50 years and 51 above).
2.2.5 DATA COLLECTION
For the present study both secondary and primary sources of data has been used. The
secondary data has been used for the development of the present research problem has
been collected through review of existing literature pertaining to the study and relevant
information regarding the packaging of consumer goods. Various sources like books,
journals, magazines and internet have been used. The primary data has been collected by
personally visiting the respondents and conducting their interview with the help of a
structured schedule. The discussion and personal observation has been used for gathering
the relevant information from the respondents. The structured schedule has been designed
to gather the primary information of the respondents regarding demographic information,
significance of packaging, consumer perception about packaging strategies and impact of
packaging strategies on purchase decision of consumers. Part – A includes eighteen
statements on 5 - point scale to assess significance of packaging; Part – B includes twenty
four statements on 5 - point scale to assess consumer perception about packaging
strategies; Part – C includes 16 statements on 5 - point scale to assess the impact of
packaging strategies on purchase decision of consumers; Part – D includes four open ended
questions to explore personal experiences of the respondents regarding packaging
strategies and get their valuable suggestions, if any.
2.2.6 CONSTRUCTION OF DATA COLLECTION INSTRUMENTS
For gathering the primary data to fulfill the objectives of the present study, three scales
were developed and standardized by the investigator herself:
Scale - A to Assess Significance of Packaging
Scale - B to Assess Consumer Perception about Packaging Strategies
Scale - C to Assess Impact of Packaging Strategies on Purchase Decision of Consumers.
The process of development and standardization of scales is given as under:
Identification of dimensions
After review of literature, discussion with faculty members of management, experts and
analysis various dimensions for all the three scales were identified. For significance of
packaging four dimensions identified are protection & storage factors, convenience &
availability factors, communication factors and promotional factors; the six dimensions
about consumer perception about packaging strategies include sachet packaging factors,
communication factors, environmental factors, choice/variety factors, innovative and
different packaging factors and economy factors; four dimensions have been identified for
impact packaging strategies on promotion of consumer goods - attraction / communication
factors, economy factors, ecofriendly packaging factors and convenience factors.
Item Writing
After identification of the dimensions list of items was prepared on the basis of above
sources. Three attempts were made to check and reframe the statements to ensure the
relevancy and uniqueness of the statement. A panel of experienced faculty members and
experts reviewed the items. The items were deleted or rejected on the basis of
recommendations of the experts. So a preliminary draft of items having positive
characteristics was framed. The preliminary draft was used for further analysis. A likert
format answer key was created with each statement rated on five point scale ranging from
strongly agree (5) to strongly disagree (1). The second draft of remaining items was
administered to 100 respondents.
For Scale - A to assess significance of packaging a preliminary pool of 29 items was
framed. Five items were deleted or rejected on the basis of recommendations of the
experts. So a preliminary draft of 24 items was framed. The second draft of 24 items was
administered to 100 respondents.
For Scale - B to assess consumer perception about packaging strategies” based on the
above sources, a preliminary pool of 35 items was framed. Seven items were deleted or
rejected on the basis of recommendations of the experts. So a preliminary draft of 28 items
was framed. The second draft of 28 items was administered to 100 respondents.
For Scale -C to assess impact of packaging strategies on purchase decision of consumers” a
list of 30 items was prepared on the basis of above sources. Nine items were deleted or
rejected on the basis of recommendations of the experts. So a preliminary draft of 21 items
having positive characteristics was framed. The preliminary draft was used for further
analysis.
Item Analysis
Item analysis was carried out to determine the adequacy of the scale. It differentiates
between better and poorer items. For the purpose the investigator employed the item total
correlation and Kelleys (1939) criteria of top 27% and bottom 27% was used for items
analysis to evaluate the proposed category of items. The data were analyzed by using‘t’
test which to depict significance of difference between upper group and lower group on
each item. For items where significant differences were not obtained between two groups,
the items were dropped out. Significant differences were not obtained between two groups
for the following scales - six items for scale –A, four items for scale – B and five items for
scale – C. Data were analyzed using SPSS statistical package version 20.0.
Preparation of Final Draft of the Scale
After carrying out item analysis of preliminary draft of all the three scales the final drafts
were prepared.
Scale - A to Assess Significance of Packaging
The item distribution of various dimensions of factors influencing significance of
packaging is shown in table 2.1.
Table: 2.1: Item Distribution of Scale – A to Assess Factors Influencing Significance
of Packaging
S.No. Factors Item No.
1. Protection & Storage Factors 1, 2, 3
2. Convenience & Availability Factors 4, 5, 6
3. Communication Factors 7, 8a, 8b, 8c, 8d, 8e
4. Promotional Factors 9, 10, 11, 12, 13, 14
Scale - B to Assess Consumer Perception about Packaging Strategies
The item distribution of various dimensions of factors influencing consumer perception
about packaging strategies is depicted in table 2.2.
Table: 2.2: Item Distribution of Scale - B to Assess Factors Influencing Consumer
Perception about Packaging Strategies
S.No. Factors Item No.
1. Sachet Packaging Factors 10, 11, 12, 13, 14
2. Communication Factors 1, 4, 5, 15, 17
3. Environmental Factors 18, 19, 20, 21, 24
4. Choice/ Variety Factors 2, 7, 9, 22
5. Innovative & Different Packaging Factors 3, 6, 8
6. Economy Factors 16, 23
Scale - C to Assess Impact of Packaging Strategies on Purchase Decision of Consumers.
The item distribution of various dimensions of a scale to assess factors having influence on
the impact of packaging strategies on purchase decision of consumers is shown below in
table 2.3.
Table 2.3: Item Distribution of Scale- C to assess Factors Influencing Impact of
Packaging Strategies on the Purchase Decision
S.No. Factors Item No.
1. Attraction Factors 1, 4, 10, 11, 12, 13, 14
2. Economy Factors 3, 5, 6, 7, 8, 9, 16
3. Ecofriendly Packaging Factors 15, 16
4. Convenience Factors 2
Scoring Pattern
For scoring pattern for each item included in the scale, Likert -Type five point scale was
adopted. Accordingly each item was scored on the basis of Strongly Agree, Agree,
Indifferent, Disagree and Strongly Disagree and then quantified as 5,4,3,2 and 1
respectively.
2.2.7 VALIDITY AND RELIABILITY
Reliability is concerned with the question of whether the results of a study are repeatable
while validity is concerned with the integrity of conclusions that are generated from the
piece of research. The content validity of the scales was established on the basis of experts’
opinions and comments. The content validity of the scales was assessed by ratings of
judges. All the items initially selected for the three scales - to assess significance of
packaging, to assess consumer perception about packaging strategies and to assess impact
of packaging strategies on purchase decision of consumers were presented to the judges to
decide. Only those items were selected which received 80% unanimity. Rest of the items
were selected which received 80% unanimity. Rest of the items were either modified or
dropped. Some of the items were ambiguous were either modified or dropped. Item
analysis was carried out to determine the internal consistency of the scale which is an
evidence of construct validity. The reliability of all the three scales was estimated by using
test- retest method. These reliability co-efficients were appropriate for the purpose as
Guilford (1954) says that the “Tool should be chosen even though their reliability may be
of the order of only 0.50”. On the basis of high values, it can be concluded that all the three
scales - to assess the significance of packaging, to assess consumer perception about
packaging strategies and to assess impact of packaging strategies on purchase decision of
consumers are reliable.
2.2.8 ANALYSIS PATTERN
2.2.8.1 VARIABLES OF THE STUDY
Two types of variables have been included in the present study.
Independent Variables: ‘Gender, ‘Age’, ‘Place of residence’, ‘Qualification’, ‘Marital
Status’, ‘Family Type’ and ‘Family Income’ of the respondents have been taken as
independent variables.
Dependent Variables: ‘Packaging’, ‘Packaging Strategies’ and ‘Promotion’ have been
taken as dependent variables.
2.2.8.2 CONTENT ANALYSIS
Significance of Packaging:
The four dimensions to assess significance of packaging (table 2.4) include protection &
storage factors, convenience & availability factors, communication factors and
promotional factors.
The protection & storage factors include statements 1, 2 and 3; convenience & availability
factors include statements 4, 5 & 6; communication factors include statements 7, 8a, 8b,
8c, 8d &8e and promotional factors include statements 9, 10,11,12,13 &14.
Table: 2.4: Content Analysis to Measure Significance of Packaging
S.No. Item
No.
Description of Items Response Categories and
Weight Assigned
Protection & Storage Factors SA
5
A
4
I
3
D
2
SD
1
1 1 It protects the product
2 2 It stores the product properly
3 3 It keeps the products hygienic and fresh
Convenience & Availability Factors
4 4 It makes the product convenient to use
5 5 It makes product available in different sizes
according to requirement
6 6 It helps to lower the distribution cost
Communication Factors
7 7 It communicates the necessary information
8 8 a) It communicates about ingredients/
composition
9 8 b) It communicates about statutory
information (MRP/Date of
manufacturing/expiry date etc.)
10 8 c) It communicates about the quality of the
product
11 8 d) It communicates about marketer and brand
12 8 e) It communicates about utility for a
particular purpose
Promotional Factors
13 9 It acts as an attention seeker by attracting
consumers.
14 10 It acts as a silent salesman
15 11 It acts as a persuasive salesperson
16 12 It adds value to the product
17 13 Well- designed package creates promotional
value.
18 14 It motivates consumers to buy the product
Consumer Perception about Packaging Strategies:
The six dimensions to assess consumer perception about packaging strategies include
(table 2.5) Sachet packaging factors, communication factors, environmental factors,
choice/variety factors, innovative & different packaging factors and economy factors.
Table: 2.5: Content Analysis to Measure Consumer Perception about Packaging
Strategies
S.
No
Item
No.
Description of Items Response Categories
and Weight Assigned
Sachet Packaging factors SA
5
A
4
I
3
D
2
SD
1
1. 10 Use of sachet(very small packets) is increasing
2. 11 Usage of sachet is increasing because of its
affordable/low price
3. 12 Sachet motivates a consumer to try various products
4. 13 Sachets are easy to handle/use
5. 14 Using sachets leads to less wastage of product
Communication Factors
6. 1 Packaging is just an outer covering
7. 4 These days more information is written on the package
8. 5 It tells story about the brand
9. 15 More attractive packaging is displayed in the main areas
of the shops
10. 17 Good packaging is taken as symbol of better quality
product
Environmental Factors
11. 18 It is wasting the scarce raw materials
12. 19 Packaging is creating more waste material
13. 20 It is creating more pollution in the environment
14. 21 Unnecessary packaging of the product should be
avoided
15. 24 Majority of Indian organizations do not consider the
negative impact of packaging on environment.
Choice/ Variety Factors
16. 2 Today, consumer has more choices in terms of
packaging options
17. 7 Packaging is making the product more easy to use
18. 9 Now products are available in many sizes
19. 22 More eco-friendly packaging is available in the market
Innovative & different packaging factors
20. 3 More attractive packaging is coming in the market
21. 6 More colourful packaging is coming
22. 8 The use of very innovative and different kind of
packaging is increasing
Economy Factors
23. 16 After consumption of the product the packaging is used
for decoration/storage purpose
24. 23 Packaging is an undesirable burden on the pocket of
consumers.
The sachet packaging factors include statements 10, 11, 12, 13, 14; communication factors
include statements 1, 4, 5, 15 & 17; environmental factors include statements 18, 19, 20,
21 & 24; choice/variety factors include statements 2, 7, 9 & 22; innovative & different
packaging factors include statements 3, 6 & 8 and economy factors include statements 16
& 23.
Impact of Packaging Strategies on the Promotion of Consumer Goods:
Table: 2.6: Content Analysis to Measure Impact of Packaging Strategies on the Promotion
of Consumer Goods
S.
No
Item
No.
Description of Items Response Categories
and Weight Assigned
Attraction/ Communication Factors SA
5
A
4
I
3
D
2
SD
1
1 1 Good packaging of a product attracts you
2 4 You read the instructions on packaging before buying a
product
3 10 The colour of packaging influences your purchase
decision
4 11 You buy a product because of its attractive packaging
5 12 You buy a product (which you do not require) only
because of its very attractive or different packaging.
6 13 It enhances impulse purchase (purchasing without
thinking)
7 14 You will pay higher for good/attractive packaging
Economy Factors
8 3 You buy a product because of the reusability of its
package
9 5 You will purchase a product because of its value pack
(big pack for less price)
10 6 You will buy a product because of its small sachet
packaging
11 7 You will buy sachet (which you do not require) just to
try
12 8 You prefer refill pack as it costs less
13 9 You prefer refill pack as its original packaging can be
reused
Ecofriendly Packaging Factors
14 15 You prefer eco-friendly packaging
15 16 You prefer eco-friendly packaging even if you have to
pay little extra
Convenience Factors
16 2 You will buy a product because its packing makes the
product usage more convenient
Four dimensions to assess the impact of packaging strategies on promotion of consumer
goods include (Table 2.6) attraction/communication factors, economy factors, ecofriendly
packaging factors and convenience factors. Attraction/communication factors include
statements 1, 4, 10, 11, 12, 13 & 14; economy factors include statements 3, 5, 6, 7, 8, 9 &
16; ecofriendly packaging factors include statements 15 & 16 and Convenience factors
include statement 2.
2.2.8.3 STATISTICAL TECHNIQUES APPLIED FOR THE ANALYSIS OF DATA
The data has been analyzed using SPSS version 20.0 statistical package. Factor analysis
has been applied and further ANOVA and t-test have been applied on the various factors
obtained from factor analysis. Descriptive statistics such as means and standard deviation
have also been used to describe the nature of data. To represent the data pictorially bar
diagrams have been used.
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