Final Report Section02 Group04

8/19/2019 Final Report Section02 Group04

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What

factors drivebrand

loyalty in

FMCGproducts?

Dommeti Gaayathri - DM 17215

Nadesakumar - DM 17224

Priya RJ - DM 17234

Sai Vishnu M - DM 17244

Surekha R - Dm 17253

Tara Vinyasa - DM 17256

Section 02 | Group 04


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TABLE OF CONTENTS:

I. Introduction 1

II. Abstract 2

III. Qualitative research 2

IV. Hypotheses 4

V. Questionnaire Design 5

VI. Analysis 8

VII. Method Used 11

VIII. Regression 13

IX. Demographics of Respondents 15

X. Conclusion 16

XI. References 16


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Introduction

India's FMCG market is flooded with local as well as global brands that constantly compete for every

consumer's attention. In this world of increased brand presence, and the varieties each brand has to

offer. Brand Loyalty is an often debated topic, and is one of the important factors that contributes

towards increased purchase of one's brand. The FMCG industry is one of the most dynamic industriesworldwide. Also known as Consumer Packaged Goods or CPG its total worth is $570 Billion of which the

Indian FMCG industry forms about $55 Billion. That's approximately 10% of the Global FMCG market. It

is the fourth largest sector that contributes to the Indian Economy where some of the companies have

been around for almost two centuries now. A typical product would be toothpaste or soaps or

detergents, and some of the famous brands that have housed some of our favourite products include:

Unilever LTd, Procter & Gamble, ITC Ltd and so on.

It is one of the most established industries, and while some people may hold deeply held values towards

using some of these brands, there are others who would switch from one brand to another based on

some kind of internal or external trigger. In similar studies conducted earlier, product attributes,marketing capabilities, aesthetics, depth of product line and brand popularity, value and perceived

benefits among others were some of the driving factors of brand loyalty.

This study seeks to explore the various drivers for consumers what gives them an innate sense of loyalty

towards a particular brand? The research goes on to fill in the gaps from previous studies, consider

those unique variables which were not considered earlier.

The FMCG sector has developed at an average of 11% annually, over the last decade. The FMCG

market is expected touch US$ 110.4 B by 2020, with the rural FMCG market anticipated to increase at

17.7% which would be worth US $100 B by 2025.

Indian FMCG Market

Food Products

Personal Care

Fabric Care

Other products


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Abstract

This paper examines some of the key factors that drive brand loyalty among Fast Moving Consumer

Goods products. The main aim behind this study was to develop an insight as to what drives people to

remain loyal to the various brands they use in their everyday lives. It was observed that brand loyalty

depended on a number of reasons including (but not exclusive to) the duration of use of the particularproduct, the availability in local stores/supermarkets, the quantity of consumption, the frequency of

use, brand popularity, online brand visibility and so on.

Keywords: brand loyalty, fmcg, brand benefits

Qualitative research

Choice of Research: Focus Group Discussion

A Focus Group Discussion was conducted, the sample of 10 participants chosen were homogenous.

They were between the age group of 21-25, and were consumers of several leading brands such asColgate toothpaste, Lux soap, Dove soap/shampoo, Surf Excel, Ariel and so on. The discussion was

moderated and the neutral tone of the conversation was retained.

Why FGD?

A common topic such as brand loyalty on FMCG products could be easily talked and discussed. Also the

topic is open-minded and demands fresh insights and factors which drives them to be loyal to the

brand. The insights could be easily articulated by the customers with proper moderation. Hence,

default option of Focus group discussion was our choice.

The reason this discussion was conducted was to gain clarity behind each of their brand sentiments.

The overall line of discussion was centred around: What made them loyal to the brands they have been

using for more than 5 years? On the flip side, the discussion also touched upon; if they had switched

from one brand to another recently and the reason for the same. While one participant held one

particular brand close to their heart, the same brand wasn't considered as good by another participant.

Findings from FGD

The reasons were discussed out, it was observed that a majority of the participants were inclined

towards a particular brand mainly for its functional benefits. For example, if it was a shampoo,

depending on the hair type was it able to deliver what was expected such as removing frizziness,

dandruff control, protection from further damage. An aspect of hedonic benefits was also presenthowever, it was not the key driver for brand loyalty. The various independent variables mentioned

earlier were all discussed and a qualitative analysis was done.


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Product Used Category Brand Name Duration Of

Use

Possible

Reason for

Loyalty

Tresseme Shampoo/conditioner Unilever 2 years Suits her hair

very well, for

salon effect,variants

Loreal Paris Shampoo Loreal 6 years Its effective in

smoothening

hair

Dove soap Unilever More than 7

years

Moisturizer

effect, soft on

skin

Dove shampoo Unilever 2 years Soft on skin

Lux Soap Unilever 6 years Smell, soft,

suits her skinvery well

Colgate Toothpaste ColgatePalmolive 6 years Used since

childhood

Head &

Shoulders

Shampoo P & G 7 years Effective

dandruff

control unlike

other anti

dandruff

shampoos

Ariel Detergent P & G 2 years Gentle onclothes, no

discolouring

Parachute Oil Marico 8 years Maintains

health of hair

Maggi Noodles Nestle 15 years Best snack

idea

Bournvita Chocolate mix Cadbury 10 years Best taste

when mixed

with milk

Lakme Sun Screen Unilever 3 years effective

For products like toothpaste, participants tend to stick to the product which there were using

right from their childhood. They don’t shift the product until and unless an explicit need arises.

For instance, they shift to another toothpaste only when the doctor advises to do so.


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80% of the respondents would try any new product launched by the same brand. Whereas,

respondents weren’t ready to try the same product or to say, similar product launched by

another brand. But, to an extent, it also depends on the perception of the brand. If the person’s

brand perception is high, then he might try the product and if he likes it, he will definitely switch

to it.

Respondents normally prefer the brand which suits their personal selection criteria. When the respondents got to get some negative insights on the product which they were using

now, initially they would check on the authenticity of the information and then decided on

quitting or not. Also, they won’t switch unless and until they personally experience the same

problem. If one defective product (handling) might not have produced the proper results, it

doesn’t mean that the product is not good.

Respondents prefer products in high volume since they are sure about not shifting.

Once people are loyal to the brand, they care least about the packaging.

Suppose you are using a brand and it doesn’t have a particular feature which you wanted.

Another brand is coming up with the same feature, would you like to shift?

o Respondents Insights:

I will try the new brand if the feature is important for me.

I will read the reviews before experimenting the new product and also i will make sure that it is

not degrading the earlier qualities.

Respondents unanimously agreed that they don’t shift brand when they see a bad

advertisement of the brand which they are using now. But they also pointed out that they start

buying few products when they find an attractive advertisement, which is quite contradictory.

Also perception of advertisement differs from person to person.

Hypotheses

Our choice of product to test our hypotheses was Shampoos.

Decision Variables

Dependent variable: Brand Loyalty

Independent variables: brand popularity, brand image, value and perceived benefits, Family/Peer

Influence, advertisement, substitution, consumer satisfaction

Control Variables: Age, Gender, Hair length

Main Hypothesis

Null Hypothesis (H0) - Consumers are not loyal to the shampoo brand they use

Alternative Hypothesis (H1) - Consumers are loyal to the shampoo brand they use.


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Set of Hypothesis for Independent Variables

1) H0: Brand popularity has no bearing on brand loyalty.

H1: There is a positive relationship between online brand popularity and brand loyalty.

2) H0: Brand image does not affect brand loyalty.

H1: There is a positive relationship between brand image and brand loyalty.

3) H0: Value and perceived benefits are not a driver of brand loyalty.

H1:There is a positive relationship between value and perceived benefits and brand loyalty.

4) H0: Advertisements of shampoos are not a driver for brand loyalty.

H1: Advertisements have a bearing on brand loyalty.

5) H0: Substituting of shampoos has an no effect on brand loyalty.

H1: Substituting of shampoos has an effect on brand loyalty.

6) H0: Consumers who are satisfied with their brands are not brand loyal.

H1: Consumers who are satisfied with their brands are brand loyal.

7) H0: There is no interaction between brand popularity and brand image.

H1: There is a positive interaction between brand popularity and brand image.

8) H0: There is no interaction between brand popularity and customer satisfaction.

H1: There is a relationship between brand popularity and customer satisfaction.

Questionnaire Design

The scale of measurement used here is the 5-point Likert Scale.

Brand loyalty

1. If I like a brand, I rarely switch from it just to try something different

2. I get bored of using the same brand of shampoo even if it is good for my hair

3. Once I find a shampoo that suits my hair, I stick with it

4. The shampoo brand I'm using suits me well


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Substitution

1. I enjoy exploring several different alternatives (like shikhai) or brands while shopping

2. A lot of the time I feel the urge to buy something really different from the brands I usually buy.

3. I am the kind of person who would try any new brand in the first chance I get

4. How likely would you switch brands if alternative brand was cheaper?

Family/peer influence

1. I would rather wait for my friends to try a new brand of shampoo, rather than try it myself

2. I would go for the same brand of shampoo that my family uses.

3. It is important for me that my friends approve of the brand of shampoo I use

4. I frequently gather information from my friends or family before I purchase a brand

Advertisement

1. It's hard to put in words, but this commercial leaves me with a good feeling about using this

brand

2. I can get an idea of the true benefit by watching my brand's advertisement

3. I could really relate to the hair related issues discussed in the ad

4. This ad was meaningful to me

Value and perceived benefits

1. Using this brand makes me feel good about myself

2. I choose brands because of the quality they represent

3. The brands I use reflect my social status

4. I can tell a lot about the product's quality from the brand name

Brand image

1. I buy brands that are consistent with my values

2. I choose brands because I support the values they stand for

3. I prefer buying those brands that have a good public standing

4. This is a good brand (that I'm using), I wouldn’t hesitate recommending it to others.

Brand popularity

1. I prefer buying the best selling brands.

2. The most advertised brands are usually very good choices.

3. I only look for the utility value and not whether it is famous .

4. I buy based on celebrities that endorse the brand


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Consumer satisfaction

1. What is your general experience with your shampoo? (1= much worse than expected, 5 = better

than expected)

2. This brand matches my ideal product in the shampoo category

3. Functional performance of brand is satisfactory

Age

1. You belong to the age group:

10 - 18

18- 25

25-40

40 and above

Gender

Please state your gender

Hair Length

I have :

short, cropped hair

shoulder length hair

hip length hair

Analysis:

Scale: CRONBACH FOR BRAND LOYALTY - DEPENDENT VARIABLE

Case Processing Summary

N %

Cases

Valid 164 100.0

Excludeda 0 .0

Total 164 100.0

a. Listwise deletion based on all variables in the

procedure.


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Cronbach's Alpha N of Items

.769 3

Item-Total Statistics

Scale Mean if Item

Deleted

Scale Variance if

Item Deleted

Corrected Item-

Total Correlation

Cronbach's Alpha if

Item Deleted

cs1 7.42 1.767 .593 .700

cs2 7.59 1.654 .600 .691

cs3 7.52 1.564 .616 .674

Scale: CRONBACH FOR BRAND_POPULARITY


N %

Cases

Valid 164 100.0

Excludeda 0 .0

Total 164 100.0


procedure.

Reliability Statistics


.613 4


Scale Mean if Item

Deleted

Scale Variance if

Item Deleted

Corrected Item-

Total Correlation

Cronbach's Alpha if

Item Deleted

revbp1 6.7378 5.066 .453 .502

revbp2 6.9268 4.903 .411 .529

revbp4 5.9512 5.102 .310 .610

bp3 6.4329 5.057 .410 .530

Scale: CRONBACH FOR SUBSTITUTION


N %

Cases

Valid 164 100.0

Excludeda 0 .0

Total 164 100.0


procedure.


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.671 4


Scale Mean if Item

Deleted

Scale Variance if

Item Deleted

Corrected Item-

Total Correlation

Cronbach's Alpha if

Item Deleted

revs1 10.6280 7.217 .454 .604

revs3 11.0305 6.594 .557 .531

s2 10.9329 7.867 .328 .684

s4 10.7805 7.129 .481 .586

Scale: CRONBACH FOR BRAND_IMAGE


N %

Cases

Valid 164 100.0

Excludeda 0 .0

Total 164 100.0


procedure.



.464 4


Scale Mean if Item

Deleted

Scale Variance if

Item Deleted

Corrected Item-

Total Correlation

Cronbach's Alpha if

Item Deleted

revbi2 10.5183 3.319 .485 .126

revbi3 10.8049 4.305 .333 .327

bi4 10.5427 5.869 -.004 .610

bi1 10.1341 4.534 .287 .373

As can be seen from the above table, if the variable bi4 is removed from the questionnaire, the

cronbach increases to 0.610

Scale: CRONBACH FOR VALUE_PERCEIVED_BENEFITS


N %

Cases Valid 164 100.0


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BRAND_POPULARITY 1.000 .595

SUBSTITUTION 1.000 .454

BRAND_IMAGE 1.000 .497

Extraction Method: Principal Component Analysis.

Total Variance Explained

Component Initial Eigenvalues Extraction Sums of Squared Loadings

Total % of Variance Cumulative % Total % of Variance Cumulative %

1 1.934 32.241 32.241 1.934 32.241 32.241

2 1.242 20.696 52.937 1.242 20.696 52.937

3 .867 14.444 67.381

4 .748 12.467 79.848

5 .656 10.933 90.782

6 .553 9.218 100.000

Extraction Method: Principal Component Analysis.

From the above table it can be seen that there are 2 eigen values above 1, hence the data can

be effectively segregated into two factors.

As is seen, there is a sharp change between 2 and 3 of the component number axis, thus it is

concluded that the data can be can be categorized into 2 factors.


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Component Matrixa

Component

1 2

REV_VALUE_PROPOSI

TION.653 .115

ADVERTISEMENT .355 .757

CUSTOMER_STATISFA

CTION.671 .204

BRAND_POPULARITY -.273 .721

SUBSTITUTION .637 -.221

BRAND_IMAGE .672 -.213

Extraction Method: Principal Component

Analysis.

a. 2 components extracted.

As can be seen from the above table, Factor 1 consists of Value proposition, customer

satisfaction, substitution and brand image and Factor 2 consists of advertisement and brand

popularity.

Factor 1 can be known as Customer Perception

Factor 2 can be known as Promotions factor

Regression

Variables Entered/Removeda

Model Variables Entered Variables Removed Method

1

REGR factor score

2 for analysis 5,

REGR factor score

1 for analysis 5b

. Enter

a. Dependent Variable: BRAND_LOYALTY

b. All requested variables entered.


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Demographics of Respondents

Age Group of Respondents

Gender of Respondents

Hair Length of Respondents


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Conclusion:

After analysing the various outputs, following were the observations:

Brand popularity has no bearing on brand loyalty

There is a positive relationship between brand image and brand loyalty. There is a positive relationship between value and perceived benefits and brand loyalty.

Advertisements of shampoos are not a driver for brand loyalty.

Substituting of shampoos has an effect on brand loyalty.

Consumers who are satisfied with their brands are brand loyal.

There is no interaction between brand popularity and brand image.

There is no interaction between brand popularity and customer satisfaction.

Thus, it can be concluded that from the above variables that have been duly considered and

analysed, they contribute 31.7% towards customers being brand loyal, there are possibly other

factors that may contribute towards brand loyalty.

References:

Indian Institute of Management, Bangalore, Journal of Consumer Behaviour 2005, "Factors

affecting Brand Loyalty: A study in emerging market on fast moving consumer goods" S.Ramesh

Kumar, Jai Yashwant Advani

Journal of Product and Brand Management 2006, "An empirical examination of brand loyalty"

Jan Møller Jensen, Torben Hansen

International Journal of Business and Management, 2010 " Customer Brand Loyalty" Junjun Mao

Journal of International Business Administration, 2014 " Determinants of Brand Loyalty: A Studyof the Experience-Commitment-Loyalty Constructs" Vishwas Maheshwari, George Lodorfos & Siril

Jacobsen

Journal of Sociological Research 2014, " Effect of brand trust and customer satisfaction on brand

loyalty in Bahawalpur" Zohaib Ahmed, Muhammad Rizwan, Mukhtar Ahmad, Misbahul Haq

http://ibef.org/download/FMCG-March-2014.pdf

Journal of Law and Commerce 2014, "Brand Loyalty & Loyalty Of Brands: A Symbiotic

Relationship" Amir H. Khoury

https://www.pwc.in/assets/pdfs/rc-publications/innovation-in-fmcg.pdf

http://www.ibef.org/industry/fmcg-presentation

Documents

Final Report Section02 Group04