Final Sip Report by David Jose and Saket Ranjan

Summer InternshipBatch-2011

A REPORT ON UNDERSTANDING CONSUMER BEHAVIOUR IN HEALTH FOOD DRINK CATEGORY ESPECIALLY NUTRAMUL

BY:DAVID JOSESAKET RANJAN

FINAL REPORT

2010

A REPORT ON

UNDERSTANDING CONSUMER BEHAVIOUR IN HEALTH FOOD DRINK CATEGORY ESPECIALLY NUTRAMUL IN AHMEDABAD

BY

DAVID JOSE (09BS0002814)SAKET RANJAN (09BS0002015)

Gujarat Co-Operative Milk Marketing Federation

A Report Submitted in Partial fulfillment of The requirements of

MBA program of The ICFAI University, Dehradun

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Table of Contents

SYNOPSIS......................................................................................................................................................... 7ABOUT NUTRAMUL....................................................................................................................................... 9

SCOPE:.................................................................................................................................................................11LIMITATION OF THE STUDY:................................................................................................................................11RESEARCH METHODOLOGY:................................................................................................................................11CO N C L U S I O N F R O M L I T E R A T U R E S U R V E Y .......................................................................................................14

PRIMARY RESEARCH.................................................................................................................................... 14ENVIRONMENTAL INFLUENCES IN THE PURCHASE OF HFD ...............................................................15DECISION MAKING PROCESS ADOPTED IN PURCHASE OF HFD .........................................................16DATA COLLECTION....................................................................................................................................... 17INSTRUMENT USED..................................................................................................................................... 17METHODOLOGY............................................................................................................................................ 17FACTOR ANALYSIS ............................................................................................................................. 27

INITIAL CONSIDERATIONS .....................................................................................................................27ANALYSIS .......................................................................................................................................................27E IGEN VALUE TABLE ................................................................................................................................28SCREE PLOT: ...............................................................................................................................................29COMMUNALITIES AND COMPONENT MATRIX ................................................................................29ROTATED COMPONENT MATRIX .........................................................................................................30CONCLUSION ................................................................................................................................................31

CLUSTER ANALYSIS .......................................................................................................................... 31

METHODOLOGY ...........................................................................................................................................31Hierarchical Cluster Analysis ..........................................................................................31K-Means Cluster Analysis ...................................................................................................34

INTERPRETATION ........................................................................................................................................35CONCLUSION ................................................................................................................................................37

T-TEST ........................................................................................................................................................ 39

ANALYSIS .......................................................................................................................................................39CONCLUSION ................................................................................................................................................41

POSITIONING STRATEGIES..........................................................................................42

CURRENT POSITIONING: BOURNVITA ..................................................................................42

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...................................................................................................................... 43CURRENT POSITIONING: HORLICKS ......................................................................................43

INTERPRETATION ........................................................................................................................................45Market Ideal ....................................................................................................................................45Bournvita ............................................................................................................................................45

RECOMMENDED FOCUS AREAS .................................................................................................46

Nutramul .............................................................................................................................................46CONCLUSION..............................................................................................................................................47

AUTHORISATION4

THIS IS TO AUTHORISE THAT A FINAL PROJECT REPORT ON

“UNDERSTANDING CONSUMER BEHAVIOUR IN HEALTH FOOD

DRINK CATEGORY ESPECIALLY NUTRAMUL”

IS SUBMITTED BY

DAVID JOSE

SAKET RANJAN

OF BATCH-2011

TO

ICFAI BUSINESS SCHOOL

AS PARTIAL FULFILLMENT OF THE REQUIREMENT OF MBA PROGRAM

OF ICFAI BUSINESS SCHOOL

Prof. Bala Bhaskaran Prof. Swarup Dutta Mr. Kandarp Patel(Director, IBS) (Faculty Guide) (Company Guide)

ACKNOWLEDGEMENTS

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The successful completion of this report would not have been possible without the co-

operation and support of our respected Company and Faculty Guides, beloved friends, and our

institute of inspiration, ICFAI BUSINESS SCHOOL. We hereby acknowledge the relentless and

wholehearted support from one and all of our well-wishers and express everlasting gratitude

to….

…our company guide, Mr. Kandarp Patel (Regional Sales Manager), who was helpful in making

us understand the insights of real business environment by directing and guiding in various

project assignments such as Nutramul, Go-cheese and Edible oil.

…our faculty guide, Prof. Swarup Dutta (Faculty of Marketing, IBS-Ahmedabad)for imparting

valuable guidance and co-operation during the consolidation of our perception in the form of

report, who provided us the qualitative insights of work under our various projects.

Further, we are thankful to the distributors and all the people associated with Amul

directly or indirectly.

Our respectful thanks and acknowledgements go to the leading magazines, websites,

books and periodicals which have helped us a lot in our understanding the industry and express

our self in a better way.

DAVID JOSE (09BS0002814)SAKET RANJAN (09BS0002015)

BATCH-2011ICFAI BUSINESS SCHOOL, AHMEDABAD

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SYNOPSIS

The project- Understanding consumer behavior regarding purchasing of health food drink in

Ahmedabad consists of managerial learning of understanding a product in the market and this

project is undertaken with an objective to understand the buyer’s behaviour in the ‘Health Food

Drinks (HFD)’ category. Through this study, we intend to find the answers to these questions:

What are the prominent factors that drive a customer to purchase a HFD?

What are the various customer segments that buy a HFD?

What are the sources of information for these customer segments?

The overall objective of this Project is to experience the way in which consumer respond to the

product in given environment. This experience opens the dimensions in order to:-

Understand the Industry in which organizations operates.

Business model of the organization.

Understanding the organizational functional area of sales and marketing.

The Methodology for the project:-

Consumer survey

Visit of Retailer outlet

Visit of Distributor Points

Taking consumer feedback

Taking retailer feedback

Analyzing supply-chain of the product

Analysis of sales records

COMPANY PROFILE

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Introduction and History :

Formed in 1946, a dairy cooperative movement in India with 250 liter of milk per day

with name KAIRA DISTRICT CO-OPERATIVE MILK PRODUCERS’ UNION.

A Brand name Amul is managed by Gujarat Co-operative Milk Marketing Federation

(GCMMF).

The brand name AMUL means AMULYA (suggested by a quality control expert in

Anand). This word derived from Sanskrit Word AMULYA which means priceless.

Amul has spurred the white revolution of India, which has made India the largest

producer of milk and the milk products in the world and the white revolution has finally

created a billion dollar brand.

Today Amul dairy is No.1 dairy in Asia and No.2 in the world, which is matter of proud

for Gujarat and whole India.

Amul has more than 150 chilling centers in various villages.

Dr. Verghese Kurien, former chairman of GCMMF- The man behind the success of

Amul.

Facts :

Members: 13 district cooperative milk producers' Union

No. of Producer Members: 2.79 million

No. of Village Societies: 13,328

Total Milk handling capacity: 11.22 million liters per day

Milk collection (Total - 2008-09): 3.05 billion liters

Milk collection (Daily Average 2008-09):8.4 million liters

Milk Drying Capacity: 626 Mts. per day

Cattle feed manufacturing Capacity: 3500 Mts. per day

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ABOUT NUTRAMUL

NUTRAMUL MALTED MILK FOOD is made from malt extract, milk solids, sugar,

Cocoa powder, emulsifying agents, sodium bicarbonate and added flavour.

Composition:

Fat 6.5%

Carbohydrates 70%

(Starch, sugar)

Moisture 2%

Protein 11.5%

Cocoa 8%

Special Features:

Amul’s Nutramul has the highest protein content among all the brown beverage powders

sold in India and is the only one in India with BIS certification mark.

Product Specification:

Carries BIS certification mark IS: 1806-1975 Type II.

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INTRODUCTION

Malt-based drinks market is one of the largest market in India, it accounts for 22% of the

world’s retail volume sales. These drinks are consumed and marketed as a nutritious drink,

mainly consumed by the old, the young and the sick. HFDs are mainly targeted at children aged

between 5-18 years. This is because of the life style they used to live i.e they are active and

playful in nature and need extra energy. In order to keep the energy levels of the children high

using some drinks the pressure is on home maker. The HFD category comprises of two sub-

categories – ‘Brown Powder’ and ‘White Powder’. While the white drink finds a bigger market

in South and East, the brown one makes its presence felt in North and West. White drinks

account for almost two-thirds of the market. Currently, brown drinks (cocoa-based) continue to

grow at the expense of white drinks like Horlicks and Complan. The share of brown drinks has

increased from about 32% to 35% over the last five years. Cadbury’s Bournvita is the leader

in the brown drink segment with a market share of around 18%. India has a thriving Rs.2,000-

crore health food drinks market, with many global players, like the market leader,

GlaxoSmithKline (‘Horlicks’, ‘Boost’, ‘Viva’ and ‘Maltova’), Cadbury (‘Bournvita’), Nestle

(‘Milo’), Heinz (‘Complan’). Glaxo rules the Indian HFD market with a share of around 64%.

RESEARCH OBJECTIVE

This project is undertaken with an objective to understand the buyers’ behaviour in the ‘Health

Food Drinks (HFD)’ category. Through this study, we intend to find the answers to these

questions:




To get the insight of HFD category we will also look at the current positioning strategy

of two leading HFD brands in India i.e. Cadbury’s ‘Bournvita’ and GlaxoSmithKline’s

‘Horlicks’; and based on our study we will suggest an effective marketing strategy to

increase the sale of Nutramul.

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Scope:This study has enhance our scope to understand

Competitor’s behavior

Understanding retailer attitude and expectation

Market Mapping.

Limitation of the study: Non Availability of sales data.

Test market area are not the full representative of market in general

Lack of measurement of competitive brand and there sales and market strategies.

Research Methodology:

Market study

Market survey

Visit of Retailer outlet

Visit of Distributor Points

Taking consumer feedback

Taking retailer feedback

Analysis of supply-chain of product

EXPLORATORY STUDY:

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Literature Review

Indian Milk Beverage Consumption Habits:

There are two categories of milk beverages or health food drinks – white beverage and the brown

beverage. Brands such as Bournvita, Nutramul, Boost, Maltova and Milo constitute the brown

beverage and have about 60-70% cocoa as their main ingredient. Others like Horlicks and

Complan fall under the white beverage category. Households constitute 60 per cent of the total

market with the rest constituted by the institution segment. According to a study conducted on

households, the biggest consumers of milk are in the age group of 5-18 years. The study also

shows that 60 per cent of the high income households are regular consumers of the beverage.

These families on an average consume about 30-40 gm. of the product a day. Mothers are the

key influencers in brand choice. Children also have a strong say in the brand selection. These

beverages are usually added to warm or cold milk. In addition to its use as a tasty and nutritious

milk drink, some of the brands (especially brown beverages) are also used as an additive in milk

to make it a tasty snack drink in institutional segments like restaurants, canteens, juice parlors.

A higher percentage of consumers prefer white beverages over brown beverages. White

beverages are used for their therapeutic benefits while brown beverages are used more for their

taste.

Milk Consumption Behaviour

Since health food drinks are consumed mostly with milk,

therefore consumption behavior of milk can be extended to the

consumption of HFDs as well.

Both flavouring and packaging were found to be important

factors in consumption, especially amongst kids. A US based research

has shown that when it comes to milk, 85% of US children prefer any

kind of flavoured milk to the plain white milk. Chocolate was found to

be a leading flavour for milk in the flavoured milk category. While

other varieties such as strawberry, banana and vanilla were also

available. This consumption behaviour can be extended to Indian consumers because of the

widened impact of urbanization and

globalization.

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Milk intakes and habits with respect to milk consumption are found to vary with the sex

of the person according to a study published in Journal of American Dietetic Association. In a

cross sectional study amongst American adolescents it was found that milk intake was

proportional to the taste preference of the teenagers. Also attitude of personal health / nutrition

was found to be an important parameter. It was also found that consumption of milk was found

to be significantly and inversely related to fast food consumption . Thus factors such as social

income status, personal attitude towards health and taste preferences are important influencers in

milk consumption. Considering these facts, promoting the health benefits and catering to the

taste preferences of the consumers becomes imperative for the health food drink manufacturers.

Beverages constitute a significant amount in the dietary intake of the children. Milk leads

the category of beverages consumed by children. With chocolate flavour being favoured by most

of the children, most of the health food drink manufacturers have launched the chocolate version

of their products. Chocolate flavoured milk variants are the most popular variant in the flavoured

milk category. This fact is also reflected in the strategy adopted by Horlicks with the launch of

its ready-to-drink version of “Doodh” in India.

The major Companies & their Brands of HFD in India are:-

Glaxo SmithKline Horlicks

Boost

Viva

Maltova

Cadbury Bournvita

Nestle Milo

Heinz Complan

Amul Nutramul

Dabur Chyawan Junior

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Conclusion from Literature Survey

Factors which might influence the purchase and consumption of HFDs as identified from the literature survey are as follows:

Colour of the health food drink

Age of the consumer

Income of the family

Key Influencers in the purchase decision

Flavour

Packaging

Attitude towards personal health

Primary ResearchDiscussion and interview is used to conduct a primary exploratory study to determine the attributes people seek as a decision criteria for choosing a health drink. For this purpose, we conducted Discussion and interview in different location of Ahmedabad city.

Location:

Thaltej

Vastrapur

Maninagar

Chandkheda

A freewheeling discussion on the attribute influencing the choice of Health Food Drinks was encouraged. Based on the discussions, the following product attributes were identified as influencing the purchase decisions of the customers:

Nourishment: The unhealthy food habits and modern lifestyle of today’s youth is somewhat affecting their proper growth and development. So people are looking for supplements which can give them proper nutritional value and are beneficial for a healthy lifestyle. Moreover increasing health awareness among parents and household incomes has aggravated this trend. People are looking for health drinks which can provide sufficient iron, calcium, vitamins A and D and vitamin C intake in daily dietary consumption.

Colour: The Indian Health food drink market consists of brown and white powder drinks. The colour of a HFD plays a significant role in the purchase decision towards it. Brown colour is generally considered a utilitarian attribute which is seen as symbol of quality in Indian markets.

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Palatability: The HFD’s basically target children and early youth as a potential consumer. They are largely impulsive, fun loving and choosy towards products. So taste of a product does play a significant role in this segment.

Economy: As HFD is a daily consumption product, people expect value for the money spent. Moreover the middle class, a large potential buyer of health drinks is price sensitive and hence prefers a value for money product.

Shelf-presence: Presence in the market or shelf-presence influences the purchase of the HFD. People generally purchase the most visible product and in case of unavailability of a brand the consumers do not delay their purchase decision. Moreover a larger shelf space attracts innovators (youths) to buy them.

Packaging: The attractive packaging entices children, who are sometimes the key decision makers behind a HFD purchase. The advertisement formulates the attitude of consumer. A packaging design in sync with the advertisements will attract consumers by affecting their cognitive component. Moreover packaging can consider the after use of containers jars for Indian markets. Historically attractive designs and packaging has boosted the sales of the HFD’s.

Brand Image: The brand is the trust between company and the consumer. A high utilitarian value product category like HFD needs to have a trust among its customer base to sell its value proposition. So a brand attached to high nutritional and health values will play an immense role in the sale of HFD.

Promotions: The Indian market is price sensitive market wherein promotions increase the sale of a product. Children also get attracted to promotional schemes like freebies of soft toys etc. So Health drinks companies are frequently coming up with offers such as free shakers, toys etc.

Granular/ Powder: The granular and powdered form of HFD’s is considered as a decisive variable for their purchase in some cases.

Easy to Mix: The HFD’s should easily mix up with the liquid. A HFD with low solubility challenges the functionality of the core product.

Environmental Influences in the purchase of HFDBased on the Literature review and the discussion conducted, we could classify the identified factors as environmental influencers. These are specified as below:

Demographics

Income

Age

Education

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Family

Role of influencer in family

Family size

Reference Groups

Of child

Of mother (decision maker)

Marketing Activities

Advertising

Promotion

Decision making process adopted in purchase of HFD

Limited decision making involves recognizing a problem for which there are several possible solutions. It then involves internal and limited external search, few alternatives, simple decision rules on a few attributes and little post purchase evaluation unless there is a product problem. It covers the middle ground between nominal and extended decision making.

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Limited Decision Making

In case of HFDs, there are many brands available in the market. While purchasing a HFD, we look for few attributes based on our past experience and little external search like POS, any TV advertisement or a word of mouth from some known person. The decision might just involve evaluating the newness of the available alternative HFD; or might involve evaluating the actual or anticipated behaviour of others.

DATA COLLECTION

Instrument Used A detailed questionnaire was made which measured the cognitive, affective and behavioral components of the attitude of customers towards the purchase of HFD on a 5 point Likert scale. Please refer Appendix 1 for the full questionnaire used for the process. A sample question is shown below.

I prefer buying a bottled HFD over a non-bottled pack HFD

Strongly Agree Agree NeutralDisagreeStrongly disagree

MethodologyData was collected using the following techniques:

Personal Interviews: With the mothers who are the purchasers of HFD

Survey: Questionnaire based survey was made in Ahmedabad city .

Telephone based survey: Telephonic interviews were conducted of our relatives and colleagues.

Via the above methods, we were able to collect 200 responses. The sampling method employed was convenience based sampling. Next, we move to analyze the data collected above by using various quantitative techniques in SPSS software.

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DATA ANAYSISRATING OF HFD DONE BY MOTHERS

The above graph shows the rating given by consumers to various brands of HFD on scale of 1to 5 where 1 stands for poor & 5 stands for Excellent, for the 4 parameters namely Quality, Price, Availability & Packaging. It shows how different brands are embedded at different positions in the mind of consumers.

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From the Graph it is clearly visible that Bournvita Scores the most with respect to all other brands in all 4 parameters & this is evident from the kind of sales taking place of this product. In matters of Quality it is being closely followed by Complan & Horlicks.

Nutramul scores best for its pricing. But even though it is economical it falls flat on its face due to poor quality (read taste) of the product. This is affecting the product very badly, as even the consumers who have tried the product have discontinued using them.

Thus if Nutramul has to increase its market share then it should focus on Quality, Packaging & Price significantly, so that it comes at par with other competitors.

RATING OF HFD DONE BY RETAILERS

The above graph shows the rating given by Retailers to various brands of HFD on scale of 1to 5 where 1 stands for poor & 5 stands for Excellent, for the 4 parameters namely Quality, Price, Availability & Packaging.

From the Graph it is clearly visible that Bournvita Scores the most in respect to all other brands in all 4 parameters & this is evident from the kind of sales taking place of this product. In matters of Quality it is 2-3 points behind Complan & Horlicks.

Nutramul scores best for its pricing. And it even ahead of complan & Boost in that matterBut even though it is economical it falls flat on its face due to poor quality (read taste) of the product. This is affecting the product very badly, as even the consumers who have tried the product have discontinued using them.

Thus if Nutramul has to increase its market share then it should focus on Quality, Packaging & Price significantly, so that it comes at par with other competitors

SWOT Analysis Of Nutramul

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SWOT Analysis Of Bournvita

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STRENGTHS1. Best quality product in its segment.

2. Presence in the Market since decades 3. Price of the product

WEAKNESSES1. Limited SKU Packs

2. Lack of Promotional activities.

3. Lack of awareness of product4. Taste ,Packaging & Availability

OPPORTUNITIES1. Wide scope for market penetration

2. Brand Promotion (e.g.,-promotion

through CSR activities)

THREATS1. New Entrants (e.g. Dabur)

2. GSK & Cadbury a major threat

(Brand wise & Promotion wise)

STRENGTHS1. Taste ,Packaging & Availability

2. Many SKU Packs

3. Extensive Promotional activities.

4. Good awareness of the product among Masses esp Children

WEAKNESSES1. Pricing a bit on higher side


2. Introducing New Flavours & Variants


2. GSK as a major threat (Brand wise &

Promotion wise)

SWOT Analysis Of Horlicks

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STRENGTHS1. Packaging & Availability

2. Many SKU Packs

3. Extensive Promotional activities.

4. Reasonable awareness of the product among Masses esp Children

WEAKNESSES1. Pricing a bit on higher side2. Its Powder Form



2. Cadbury is a major threat (Brand

wise & Promotion wise)

Factor AnalysisThis was undertaken to group the similar factors that drive a customer to purchase a HFD into distinct “heads”. Factor analysis is a statistical method used to describe variability among observed variables in terms of fewer unobserved variables called factors. The observed variables are modeled as linear combinations of the factors, plus "error" terms. The information gained about the interdependencies can be used later to reduce the set of variables in a dataset.

Initial Considerations Sample Size: Correlation coefficients fluctuate from sample to sample, much more so in small

samples than in large. Therefore, the reliability of factor analysis is also dependent on sample size. A sample size 5 times the number of variables is considered good. In our survey there were 13 variables and we had a sample size of 100 parents.

Data Screening: The first thing to do when conducting a factor analysis is to look at the inter-correlation between variables. If the test questions measure the same underlying dimension (or dimensions) then we would expect them to correlate with each other (because they are measuring the same thing). If there are variables that do not correlate with any other variables (or very few) then those variables should be excluded before the factor analysis is run. The correlations between variables can be checked using the correlate procedure to create a correlation matrix of all variables. This matrix can also be created as part of the main factor analysis.

AnalysisKMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .860

Bartlett's Test of Sphericity Approx. Chi-Square 1.254E3

Df 276

Sig. .000

The KMO statistic varies between 0 and 1. A value of 0 indicates that the sum of partial correlations is large relative to the sum of correlations, indicating diffusion in the pattern of correlations. A value close to 1 indicates that the patterns of correlations are relatively compact and so factor analysis should yield distinct and reliable factors. A value greater than .5 is recommended. Furthermore, values between .5 and .7 are mediocre; values between .7 and .8 are good and above .9 are considered superb. Since the test value is .860 which is very close to 1, we are confident that Factor analysis will give good results.

Bartlett’s measure tests the null hypothesis that the original correlation matrix is an identity matrix. For factor analysis to work there should be some relation between variables because if the matrix were an identity matrix all correlation coefficients would be zero. If the test is significant, it can be inferred that there are some relationships between the variables. For this, Bartlett’s test is highly significant (p<.001) and therefore factor analysis is appropriate.

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http://en.wikipedia.org/wiki/Errors_and_residuals_in_statistics

http://en.wikipedia.org/wiki/Linear_combination

http://en.wikipedia.org/wiki/Linear_combination

http://en.wikipedia.org/wiki/Variable

http://en.wikipedia.org/wiki/Variance

http://en.wikipedia.org/wiki/Statistics

Eigen Value table Total Variance Explained

Comp

onent

Initial Eigenvalues

Extraction Sums of Squared

Loadings Rotation Sums of Squared Loadings

Total

% of

Variance

Cumulati

ve % Total

% of

Variance Cumulative % Total

% of

Variance Cumulative %

1 3.117 23.976 23.976 3.117 23.976 23.976 2.718 20.904 20.904

2 2.294 17.649 41.625 2.294 17.649 41.625 2.432 18.709 39.613

3 1.450 11.155 52.781 1.450 11.155 52.781 1.528 11.753 51.365

4 1.208 9.290 62.070 1.208 9.290 62.070 1.392 10.705 62.070

5 .972 7.473 69.544

6 .935 7.189 76.733

7 .785 6.039 82.772

8 .690 5.310 88.082

9 .608 4.677 92.759

10 .429 3.297 96.056

11 .291 2.235 98.291

12 .222 1.709 100.000

13 -

3.898E-

17

-2.998E-

16100.000

Extraction Method: Principal

Component Analysis.

The above output lists the Eigen values associated with each linear factor before extraction, after extraction and after rotation. Before extraction there were 13 linear components, the Eigen values associated with each factor represent the variables explained by that particular linear component. The first few factors explain relatively large variance whereas subsequent factors explain small amount of variance. All the factors with Eigen values greater than 1 are extracted and we are left with 4 factors. The Eigen values associated with them is again displayed in the columns labeled Extraction Sums of Squared loading. The values are same as the values before extraction just that the values for the discarded factors are ignored. In the final part of the table, the Eigen values of the factors after rotation are displayed. Rotation has the effect of optimizing the factor structure and one consequence for these data is that the relative importance of the four factors is equalized.

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Scree Plot:

Communalities and Component matrix

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The above table shows the table of communality before and after extraction. Principal component analysis works on the assumption that all variance is common; therefore before extraction the communalities are all one. After extraction some of the factors are discarded and so some information is lost. The amount of variance in each variable that can be explained by the retained factors is represented by the communalities after extraction.

The component matrix contains the loadings of each variable onto each factor. The loadings less than .4 have been suppressed in the matrix and so there are blank spaces for many of the loadings. This table is not relevant from the point of view of interpretation.

Rotated Component MatrixThe rotated component matrix is a matrix of the factor loadings for each variable onto each factor. This matrix contains the same information as the component matrix above except that it is calculated after rotation. There are several things to consider about the format of this matrix. First, factor loadings less than 0.4 have not been displayed because we asked for these loadings to be suppressed.

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Conclusion From the Factor analysis we could come with four main factors, as can be seen from the table above. We have named these factors on the basis of commonalities among the sub factors. In the factor 1 we can see that all other sub factors are closer to product likeability except the attractive packaging which is coming as an outlier in this group. All the four factors as identified are shown in the table below:

Cluster AnalysisCluster Analysis is a technique used to assign a set of observations into subset as per similarity in their behaviour. In the given consumer behaviour research each of the respondents had given certain set of preference parameters while making their purchase decision. We use the cluster analysis technique to group the customers into subsets who use similar type of factors into consideration before buying the health food drink.

MethodologyThe 13 factors rated by the consumers had been clubbed as 4 dominant factors using factor analysis as presented earlier. The factor scores of each respondent were then used to do cluster analysis on available data.

Hierarchical Cluster AnalysisWe started with the hierarchical cluster analysis on the given data and used the “Between-Groups Linkage” method to obtain the dendogram of sub-groups amongst the given set of respondents. The

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measure used was “Squared Euclidean Distance” for interval. The 13 factors of the products were taken as variables to explain the factor scores i.e. the observed behaviour of the respondents.

The screen shot below shows the procedure adopted for the same:

After this we obtained the dendogram diagram for the given set of data which is reproduced from the SPSS output below:

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Dendograms start with individual cases and group the

most similar ones as one group. This process is continued till an optimum centroid distance is obtained and clear clusters emerge.

The image on the left is a screen shot of the dendogram that we obtained as an output of the hierarchical cluster analysis. The detailed dendogram is provided in the Appendix 2 for reference.

In this dendogram it is evident that at the 4th level of differentiation, there are 4 dominant clusters which could be evolved from the given data set. We use this information to carry out the k-means cluster analysis.

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K-Means Cluster Analysis The hierarchical cluster analysis was followed by the K- means cluster analysis to get quick cluster results. Care was taken to group each case by membership for further data mining. To start with we entered Number of clusters as 6 to obtain the set of clusters. The same is being represented below:

However with no of clusters as 6 we obtained clusters where there was just 1 case in a cluster. Hence we iterated the process with number of clusters equal to 5. This also did not yield the correct results. Finally with number of clusters given as 4 we obtained a fair segmentation of the available data. The same is shown below in the table which is the output from SPSS file:

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Number of Cases in each Cluster

Cluster 1 26.000

2 18.000

3 12.000

4 12.000

Valid 68.000

Missing 66.000

The final cluster centers table that was obtained is as below. This table was further used for the interpretation of clusters and identifying their membership traits.

Final Cluster Centers

Cluster

1 2 3 4

Health_attitude 4.19 3.67 4.42 4.58

Colour_of_HFD 3.77 3.28 3.17 2.00

Chocolate_flavour 3.88 3.00 4.33 2.92

Preference_for_flavoured_milk 4.19 3.11 4.33 2.92

Price 2.46 3.44 2.50 1.50

Visibility_in_shop 3.35 2.89 2.33 1.58

Bottled 4.08 2.67 2.67 3.75

SKU_Size 4.27 3.61 1.83 2.42

Attractive_packaging 3.54 3.11 4.33 1.67

Preferred_brand 4.04 3.89 4.00 3.75

Free_offer 4.27 3.61 1.83 2.42

Top_of_mind_recall 3.58 3.11 2.58 3.25

Granularity 4.08 2.94 3.25 1.58

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Interpretation The above table is obtained on a scale of 5. We multiplied all the scores by 2, to take the scores on a scale of 10, in order to get a better understanding of the scores, and a better comparison across the various clusters and various attributes.

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Clusters

1 2 3 4

Health attitude 8.38* 7.34 8.84 9.16

Color of HFD 7.54 6.56 6.34 4

Chocolate flavor 7.76 6 8.66 5.84

Preference for flavored milk

8.38 6.22 8.66 5.84

Price 4.92 6.88 5 3

Visibility in shop 6.7 5.78 4.66 3.16

Bottled 8.16 5.34 5.34 7.5

SKU Size 8.54 7.22 3.66 4.84

Attractive packaging 7.08 6.22 8.66 3.34

Preferred brand 8.08 7.78 8 7.5

Free offer 8.54 7.22 3.66 4.84

Top of mind recall 7.16 6.22 5.16 6.5

Granularity 8.16 5.88 6.5 3.16

*in the above table, the RED coloured scores denote the important attributes which influence the purchase behaviour of the customer in each cluster.

The above table is then subjected for interpretation, to find out the most pertinent attributes in each of the clusters. These attributes will define the cluster’s purchase behaviour for the HFDs.

In the interpretation, we consider the factor-loading scores of each attribute, and compare that score with the corresponding scores in the other clusters, and also with the scores of the other attributes in the same cluster. This comparison is required to understand the weight of the attribute in the overall purchase decision of the HFDs by a particular cluster.

Considering some example based on the above table:

scores for the ‘Health Attitude’ are high across all 4 clusters, and also the difference of the scores is not much.

This gives us the interpretation that Health Attitude is considered to be an important attribute in the purchase decision of a consumer for a HFD

In the ‘Preference for flavoured milk’, the scores of Cluster 1 and 3 are very near to each other, and are much higher than the scores of cluster 2 and 4. Also the scores are very high among all the other attributes of cluster 1 and 3.

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This shows that cluster 1 and 3 considers Preference for flavoured milk as an important attribute their purchase decision for HFDs.

In case of the ‘Top of mind recall’, we observe that the scores of the attributes are lesser as compared to all the other major attributes of each cluster

This shows that Top of mind recall is not considered to be an important attribute in the purchase decision of HFDs by any of the clusters.

Conclusion Continuing on the same lines, and comparing the scores of the attributes across all the clusters and all the attributes, we can see that the following attributes are important in the purchase decision of the HFDs by each cluster:

Cluster – 1

Health attitude

Colour of HFD

Chocolate flavour

Preference for flavoured milk

Bottled

SKU Size

Preferred brand

Free offer

Granularity

Cluster – 2

Health attitude

Price

SKU Size

Preferred brand

Free offer

Cluster – 3

Health attitude

Chocolate flavour

Preference for flavoured milk

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Attractive packaging

Preferred brand

Cluster – 4

Health attitude

Preferred brand

Based on the above found attributes, we can name the 4 clusters as:

Cluster–1 Value Seeker

These customer look out for complete value from a brand of HFD which they purchase, and consider almost all of the attributes which we identified in our studies, for their purchase decision

Cluster–2 Price Conscious

These customers considers price to be a very important attribute in their purchase behaviour, and want to have the best buy for the HFD, and also give preference for any free offer available with any brand of HFD

Cluster–3 Palatability Seeker

This cluster of customers considers the taste of the HFD and the packaging of the HFD to be an important factor in their purchase decision.

Cluster–4 Nutrition Seeker

These customers only buy HFD because of the nutrition which the HFDs provide in the growth of their child. They have their preferred brand of HFD and are aware of what all nutrition is being provided by the HFDs.

T-Test The sources of information influencing the purchase decision are:

TV Advertisement

Children

Referral group

Internet

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Print Advertisement

The respondents were asked to rank the factors in order of importance. A t-test was conducted on the results of the survey in order to compare the means of the ranks for the factors. This was done on all the 4 clusters identified above in the cluster analysis.

AnalysisOne-Sample Statistics

N Mean Std. Deviation Std. Error Mean

Reference

groups26

2.53851.02882 .20177

TV

Advertisement26

2.00001.20000 .23534

Internet 26 3.9231 1.35420 .26558

Print

Advertisement26 3.5385 1.24035 .24325

Child 26 2.9231 1.38342 .27131

Exhibit 1: Cluster 1

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Reference

groups18 3.0556 1.34917 .31800

TV

Advertisement18

2.44441.50381 .35445

Internet 18 3.4444 1.61690 .38111

Print

Advertisement18 3.3333 1.23669 .29149

Child 18 2.7778 1.30859 .30844


One-Sample Statistics


Reference

groups12

2.58331.16450 .33616

TV

Advertisement12

1.91671.16450 .33616

Internet 12 3.7500 1.42223 .41056

Print

Advertisement12 3.9167 1.08362 .31282

Child 12 2.8333 1.40346 .40514

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Reference

groups12

2.66671.72328 .49747

TV

Advertisement12

1.8333.83485 .24100

Internet 12 3.0833 1.56428 .45157

Print

Advertisement12 3.2500 .86603 .25000

Child 12 4.1667 .93744 .27061


We can say from the results that there is a significant difference between the ranks of the factors with a 95% confidence.

Conclusion The two most important factors that emerge out of the tests are:

Cluster 1: Reference groups and TV Advertisement

Cluster 2: TV Advertisement and Child



This finding is an important implication for product placement as the marketer can target the relevant source information for communicating with the customers in the respective clusters.

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POSITIONING STRATEGIES

Current Positioning: BournvitaCadbury’s Bournvita is the market leader in the Brown HFD market with a share of 18%. It has changed its positioning many a times from the time it was launched way back in 1948. Its journey in terms of positioning is shown below:

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Appendix 3 shows the print advertisements of Bournvita in current scenario.

Current Positioning: HorlicksGlaxo Smithkline’s Horlicks is the market leader in the HFD category in India with a market share of over 50%. It’s the oldest brand of HFD in India having a history of nearly 150 years. It has mostly focused itself on the nutrition platform and being “the great family nourisher”. Subsequently, it changed its packaging making it more attractive and calling itself “the pleasurable family nourisher”. It has now focused on children and started its famous “Apang Opang Japang” campaign which has become quite a hit amongst the children. It further strengthened its position in the minds of the consumer by coming up with campaigns like “Now proven- Taller, Stronger, Sharper”.

Appendix 4 shows the print advertisements of Horlicks in current scenario.

Current Positioning: Nutramul

Nutramul lost out on its consumer base due to other dynamic players such as Boost, Complan, Horlicks and Bournvita. Its earlier position as a strength and energy provider was usurped by Boost. Though Nutramul was still remembered by its older consumer base, its imagery lacked the dynamism that the other players had. DMA brought back the Karate Kid, a strong icon from Nutramul's earlier communication, which suggested strength and energy. An illustrated Karate kid was used with a bright powerful background.

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Perceptual Map

A perceptual map is a visual representation of how target consumers view the competing alternatives in a Euclidean space which represents the market.

In order to develop the perceptual map, the questionnaire survey captured the brand of health food drink being usually used by the consumers. Question asked in the questionnaire: “Which health food drink do you usually use in the family?” Thus against every respondent who had given his choices for the various purchase factors we have his mostly used brand. This data along with the ratings of the underlying purchase factors were fed as input to SPSS and Factor Analysis through Principal Component Extraction was carried out. Based on the factor scores for the identified factors viz, Likeability, Packaging & Promotions, Purchase Feasibility and Brand Perception, perception for the brands was formulated by assigning relative weights based on the average scores.

The average factor scores are calculated for the respondents of same brand. The same is represented below in the tables:

Used Brand

LikeabilityPackaging & Promotion

Purchase Feasibility

Brand Perception

Boost 0.442181 -0.10239 0.056683 -0.36352

Bournvita 0.636334 0.777112 0.149687 0.149345

Complan -0.4891 -0.771 -0.24864 -0.12282

Horlicks 0.455397 0.232525 0.11274 0.05191

Nutramul -0.75397 -0.6923 -0.21275 -0.12193

The ideal self that should be represented for the market was calculated by taking an overall average of the factor scores as given by all the respondents. This data was further filtered to keep average factor scores for ideal market self and the two leading brands – Bournvita and Horlicks. The same is tabulated below:

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Brand Likeability Packaging & Promotion Purchase Feasibility Brand Perception

Total (Ideal)

0.058168 -0.11121 -0.02846 -0.0814

Bournvita 0.636334 0.777112 0.149687 0.149345

Nutramul -0.75397 -0.6923 -0.21275 -0.12193

The average scores were then plotted on the graph to arrive at the perceptual map:

Interpretation

Market IdealThe market ideal was calculated from the average response of all respondents. The perception map for the market ideal comes across as symmetric on all four factors with slight positive skewness for packaging and promotion.

BournvitaBournvita clearly comes across as the winner on all fronts as per the market ideal parameters. It is evident that the consumers using Bournvita consider likeability, brand perception, packaging and promotion and purchase feasibility as the drivers behind their purchase.

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Bournvita wins the market ideal on the packaging and the promotion front and also scores very high on the likeability factors such as chocolate flavour, granularity, and preference for flavoured milk. Similarly for consumers who indicated brand image as the main purchase driver found Bournvita to be high on factors such as nutritional value providing overall better health quality and higher brand loyalty.

RECOMENDATIONS

Nutramul

Nutramul lacks the market ideal on almost each and every front. Nutramul needs to pick up with the market ideal on likeability by introducing new taste and adding different flavour. Nutramul needs to exceed market ideal on the packaging and promotion fronts i.e. launching attractive schemes, convenient SKUs and colourful jars.

Recommended Focus Areas

Nutramul Focus on Product packaging and Promotion

Launch smaller sized SKUs

Provide freebies, gifts etc. with your product

Launch new flavours so as to increase customer likeability

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CONCLUSION

It is highly imperative that marketers understand the purchase behaviour of the consumers so as to focus on the prominent factors that consumers keep in mind while purchasing their product. The project has clearly identified the answers of the questions it intended to find. To summarize the same:


Likeability

Packaging & Promotion

Purchase feasibility

Brand perception


Value Seeker

Price Conscious

Palatability seeker

Nutrition seeker


Reference groups of the mother

T.V. Advertisements

Children

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APPENDIX 1* * * * * * * * * * * * * * * * * * * H I E R A R C H I C A L C L U S T E R A N A L Y S I S * * * * * * * * * * * * * * * * * * *

Dendrogram using Average Linkage (Between Groups)

Rescaled Distance Cluster Combine

C A S E 0 5 10 15 20 25 Label Num +---------+---------+---------+---------+---------+

55 ─┬───────────────────┐ 65 ─┘ ├─────┐ 43 ─────────────────────┘ │ 32 ─────────┬───┐ ├─────────┐ 39 ─────────┘ ├─┐ │ │ 46 ─────────────┘ ├─────┐ │ │ 42 ───────────────┘ ├─────┘ │ 37 ─────────────────────┘ │ 56 ─────┬───────────┐ │ 66 ─────┘ ├───────┐ │ 54 ─────────────────┘ │ │ 22 ───────┬─────────┐ │ │ 36 ───────┘ │ │ │ 41 ─────────┬─────┐ ├─────┐ ├───┐ │ 45 ─────────┘ │ │ │ │ │ │ 50 ─┬───┐ ├─┘ │ │ │ │ 60 ─┘ ├─────┐ │ │ │ │ │ 34 ─────┘ ├─┐ │ ├─┘ │ ├───┐ 33 ───────┬───┘ ├─┘ │ │ │ │ 44 ───────┘ │ │ │ │ │ 47 ─────────────┘ │ │ │ │ 38 ───────┬───────────┐ │ ├─┐ │ │ 48 ───────┘ ├───┘ │ │ │ │ 21 ───────────────────┘ │ │ │ │ 13 ─────────┬─┐ │ │ │ │ 15 ─────────┘ ├─────┐ │ │ │ │ 9 ───────────┘ ├───┐ │ │ │ │ 12 ───────────────┬─┘ ├───┐ │ │ │ │ 40 ───────────────┘ │ │ │ │ │ │ 31 ─────────────────────┘ │ │ │ │ │ 3 ─────────────┬─────────┐ ├───┘ │ │ │ 14 ─────────────┘ │ │ ├─────┘ ├───┐ 10 ───────┬───────┐ │ │ │ │ │ 24 ───────┘ ├─┐ ├─┘ │ │ │ 7 ───────────────┘ ├─────┤ │ │ │ 1 ─────────────────┘ │ │ │ │ 27 ─────┬─────┐ │ │ │ │ 29 ─────┘ ├─────┐ │ │ │ │ 8 ───────┬───┤ │ │ │ │ │ 11 ───────┘ │ ├─────┘ │ │ │ 4 ───────────┘ │ │ │ │ 26 ─────────────────┘ │ │ │ 16 ───────────────────────────────┘ │ ├───┐ 17 ─────────────────────────┬─────┐ │ │ │ 18 ─────────────────────────┘ │ │ │ │ 51 ─────┬─────────┐ ├─────────┘ │ │ 61 ─────┘ ├─────────┐ │ │ │ 2 ───────────┬───┘ │ │ │ │ 5 ───────────┘ ├─────┘ │ │ 23 ─────────────┬─────┐ │ │ │ 30 ─────────────┘ ├─────┘ │ │ 6 ─────────┬───┐ │ │ │ 35 ─────────┘ ├─────┘ │ │ 28 ─────────────┘ │ │ 25 ───────────────────────────────────┬─────────┘ │ 64 ───────────────────────────────────┘ │ 53 ─┬─────────────┐ │ 63 ─┘ ├───────┐ │ 19 ───────────────┘ ├───────────────┐ │ 52 ─────┬───────────────┐ │ │ │ 62 ─────┘ ├─┘ │ │ 58 ─┬─────────────┐ │ │ │ 68 ─┘ ├─────┘ ├─────────┘ 57 ───────────┬───┘ │ 67 ───────────┘ │ 49 ─────┬─────────────────────┐ │ 59 ─────┘ ├───────────┘

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20 ───────────────────────────┘

APPENDIX 2

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APPENDIX 3

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APPENDIX 4

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REFERENCES

www.amul.com

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http://www.amul.com/

www.businessline.comwww.wikipedia.orgwww.icmr.comBooks- Marketing Management-Philip KotlerCase Study Victor Brand- Simon George Vol.27,No 4, Oct-Dec 2002

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http://www.icmr.com/

http://www.wikipedia.org/

http://www.businessline.com/

Final Sip Report by David Jose and Saket Ranjan

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