PowerPoint Presentation

A STUDY OF THE CONSUMER BUYING BEHAVIOR OF ITC CLASSMATE PEN

By

SUJAY VIKRAM SINGH

Roll No.:138159622

Dissertation Submitted to the National Council for Hotel Management & Catering Technology(NCHMCT)& Indira Gandhi Open University(IGNOU),NEW DELHI

In partial fulfillment of the requirement for the degree of

M.Sc. in Hospitality Administration

(Specialization: Sales & Marketing)

(Academic session 2013-2015)

Under the Guidance of

Mr. N.L. Rastogi

(Co-ordinator M.Sc HA Program)

INSTITUTE OF HOTEL MANAGEMENT CATERING & NUTRITION

SECTOR-G, LUCKNOW, UTTAR PRADESH-220624

INTRODUCTION

BACKGROUND

The study of consumer behavior implies how & why a particular consumer reacts to the decisions of producers. It is the study of how individual make decision to spend their available resources (time, money, effort) on consumption related items. It includes the study of why they buy it, when they buy it, where they buy it, how often they buy it & how often they use it.

This study focused on understanding the consumer buying behavior of pens at retail outlets. It also focused on the issue that whether the marketing strategies are properly implemented or not. The study would be beneficial for the ITC Company to formulate the strategy for future.

Rationale

Pen is a product, which is used by each and every person. There are various brands of pen in the market of different types Price, Color, Design, Grip etc. So the pen market is full of competition where the consumer possesses vast variety of choice to select his brand which depends on his buying behavior .Of course it is very difficult to describe consumer buying behavior about pen; even though researcher have tried to find how the consumer purchases a particular brand? How much he searches for his brand? What factors influence he to buys the preferred brand? What are the different perceptive of retailers on pen?

Pen Industry which is basically my concern industry around which my project has to be revolved is really a very complex industry. The project describes an understanding of the strategy & requirements for ITC Stationery Pens, for penetrating ITC offers to target market (institutions, retailer's ,etc.) was basically the field of study for this research.

Thus the genesis for doing this study is to throw light on pen industry consumer buying behavior in general with specific reference to the analysis of ITC classmate pen consumer buying behavior in the target market.

SCOPE OF THE STUDY

The following aspects of pen consumer buying behavior have been covered in this study.

Demographics of pen consumers.

Psychographics of pen consumers.

Marketing & Competitive environment factors influencing consumer buying behavior.

Industry and market analysis in terms of size, location, growth, potential, market share and future business trends.

SIGNIFICANCE OF THE STUDY

This study helps to the researchers to know about the consumer buying Behavior and its influencing factors

This study will help the company to know about the consumer buying Behavior pattern of their products

This study will help the company to identify the right marketing mix for the products

This study helps the company to improve their strategic formulation and decision making process

STATEMENT OF THE PROBLEM

The research problem addressed in this study is focused on

consumer buying behaviour analysis of classmate pen vis--vis

retailers perspective.

OBJECTIVES OF THE STUDY

To conduct a comprehensive study on ITC CLASSMATE PENS in the context of consumer buying Behaviour.

To study and analyse purchases and consumption pattern of pens by the consumers.

To appraise key factors which mostly influence the consumers to buy pens.

To critically analyse the marketing strategies used by ITC for promoting the sales of classmate pens against other competitors.

LIMITATIONS OF THE STUDY

There are number of a factor, which affects consumers perception about pens and is not possible to take all of them into account. Thus, this study is limited to variable under consideration.

The research is based on the responses given by the respondents, which may or may not be biased.

The results shown are relative in nature and are not absolute. In other words, it is the perception of an average customer.

The research study was conducted within the limited duration of time. So a detailed and comprehensive study could not be made.

The above listed limitations will provide a potential lead to conduct a future research on the subject.

HYPOTHESIS

The research hypothesis of this study is as follows.

Ho :The growth in market share of ITC Classmate pens is comparatively more than its competing brands in the context of study site COLABA, Mumbai.

GLOBAL WRITING INSTRUMENT INDUSTRY

Globally, writing instrument industry is rising at a healthy rate despite growing

computerization. The global writing instrument industry is estimated at Rs 65000

crores. (p.a) where USA markets grew by 5% last year (2008-09) and is expected to

grow by the same proportionate at this time too. China controls approximately 10% of the global market, due to its manufacturing process. India is becoming most preferred manufacturing destination after china. Indian product quality is among best in the world, Compared to china mass market products. Indian market is growing healthily at 15 to 20% and is expected to grow with same rate for upcoming 2 to3 years (according to CAGR), where the organize sector now controls 70% Market share in 2011 as compared to 54% up to 2000.

INDUSTRY PROFILE

The Indian writing instruments market today is still on the path of discovering new niches with ergonomic designed products, promotional marketing items and luxury items but in the coming years it is bound to grow tremendously not only domestically but also in its exports emerging as world leaders in Writing Instruments.

Indias writing instrument industry is reserved for the small sector with a statutory limit on the maximum investment in plant and machinery at Rs 50 crores. As a result critical pen component like refills are manufactured in house, while all non-critical components are outsourced.

PROFILE OF PEN INDUSTRY IN INDIA

Over the years, the market share flowed from the unbranded to the branded sector. The market is segmented according to the following target audience:

Students(many of whom depend only on pencils and ball point pens)

Frequent users(in offices across commercial and public establishments)

Occasional users(housewives and literate manual workers)

MARKET AND MARKET INFORMATION (IN DETAILS)

The worldwide market size for writing industry is Rs 100000 Crores (p.a),where USAs market alone is $4.68 Billion Dollars (App Rs 21000 Crores).

China exports of pens are over Rs 5000 Crores (p.a).

India exports of pens are over Rs 200 Crores (p.a).

The annual turnover of the industry in India is now estimated at Rs 2000 Crores per annum and is expected to increase at an annual growth rate by 15-20% per annum.

About 80% of Indias pen industry revenue comes from pens with a price range of up to Rs. 15.

A small percentage of pens are priced in the range of Rs. 100-300.

The market for lower price range pens (up to Rs.15) is growing at 7-8% annually; the mid-range pen market is growing faster at 8-10%.

India is viewed as a quality supplier, where as china as a cheaper and lower quality products supplier.

Germany, Japan, Taiwan & Korea were hubs for the writing instrument industry, but due to cast factor manufactured have started shifting to China and India.

Previously Switzerland was the manufacturing center for ball point tips, but now India is emerging as a major Tip manufacturer satisfying not only Domestic demand but Global demand also

MARKET BREAK-UP

It is a quasi-fashion statement something thats aligns with the personality, still the pen purchase decision is considered as low involvement decision.

INTRODUCTION TO THE COMPANY

ITC is one of India's foremost private sector companies with a market capitalisation of nearly US $ 30 billion and a turnover of over US $ 6.1 Billion. ITC is rated among the World's Best Big Companies, Asia's 'Fab 50' and the World's Most Reputable Companies by Forbes magazine, among India's Most Respected Companies by Business World and among India's Most Valuable Companies by Business Today.

HISTORY OF ITC

ITC was incorporated on August 24, 1910 under the name of 'Imperial Tobacco Company of India Limited'.

A leased office on Radha Bazar Lane, Kolkata, was the centre of the Company's existence.

The Company celebrated its 16th birthday on August 24, 1926, by purchasing the plot of land situated at 37, Chowringhee, (now renamed J.L. Nehru Road) Kolkata, for the sum of Rs 310,000.

The Company's ownership progressively Indianised, and the name of the Company was changed to I.T.C. Limited in 1974.

ITCs Product Mix

Cigarettes

FMCG Foods

Lifestyle Retailing

Personal Care

Education & Stationary products

Safety Matches

Hotels

Packaging

ITC CLASSMATE

ITC made its entry into the stationery business in the year 2002 .

ITCs stationery Brands are marketed as Classmate and Paperkraft, with Classmate addressing the needs of students and Paper kraft targeted towards college students and executives.

Classmate - Indias truly largest National brand, reaching 65,000 outlets across the country,

Classmate has successfully run the Classmate Young Author & Artist Contest for 5 years. The contest is a national level event going across 34 cities and getting participation from 5000 schools.

CLASSMATE PENS

Aesthetically designed, Classmate pens offer the consumer a smoother and more comfortable writing experience through use of ergonomic design, reducing the effort required for writing. The initial launch comprises ball pens - Classmate Safari and Classmate Ilet - and gel pens - Classmate Glider and Classmate Octane.

ESPB Division ( Education & Stationery Products Business )

ESPB divisions :

Brands : Paperkraft, Classmate & Saathi

Categories : Notebooks, Arts Stationery, Erasers & Sharpeners, Geometry Box, Pencils, Scholastics, Pens & Refills.

ESPB - Hierarchy

CEO of ESPB - ( Mr. Chand Das )

HOSM ( Head of Sales & Marketing )

Marketing Manager

PV DHOBALE

NSM ( National Sales Manager ) KN GRANT

Mumbai General Trade Team Structure

Assitant Branch Manager ( ESPB )

Area Manager 2

Area

Manager 1

l

Area Manager 3

Area Executive

3

Area Executive

3

Area Executive

3 No.s

DI

NSM ( National Sales Manager )

General Trade - NSM

Alternate Trade - NSM

Modern Trade Manager

Institutional Manager

RSM ( East )

RSM ( West )

RSM ( South )

RSM ( North )

Assitant Branch Managers

Area Executives

Area Managers

Area Managers

Area Managers

Area Executives

Area Executives

RESEARCH METHODOLOGY

RESEARCH DESIGN

Research Approach: Exploratory study is done for the study of consumer buying Behavior.

Time Dimension: The study was done using Cross Sectional method(As the Study is done only once in the pre specified period of 5 weeks in months of November-December. longitudinal study was not possible).

SAMPLING PLANS

Description of Population/Universe

Here population refers to the number of consumers and retailers who are using and selling various pens. The sample population includes people from various categories like Business Person, Service Person, Student, Housewife's Etc.

Sampling Area

Is the place where the sample is drowned. Here the researchers take samples from various parts of Colaba, Mumbai.

Sample Size

The number of sampling unit selected from the Population is called the size of the sample. The sample size selected was 100 for consumers survey and 50 for retailers survey

Sampling technique

Here the researcher used probability sampling method.ie stratified sampling is used for consumers (when subpopulations within an overall population vary, it is advantageous to sample each subpopulation (stratum) independently.Stratificationis the process of dividing members of the population into homogeneous subgroups before sampling. The strata should be mutually exclusive: every element in the population must be assigned to only one stratum. The strata should also be collectively exhaustive: no population element can be excluded. Thensimple random samplingorsystematic samplingis applied within each stratum.)

and non-probability convenience method for the retailers as the sampling technique.

Method of Data Collection

Primary Data: The researcher has collected primary data using structured questionnaire and personal interviews with selective respondents.

Secondary data: It was collected from the ITC company magazines, websites, and other such sources.

Instrumentation

Research Instrument: Structured Non-Disguised Questionnaire is the research instrument used here. The researcher has effectively used close ended questions.

Administration: This was done using self-administered questionnaire conducted through face to face communication.

DATA PRESENTATION

The data are presented through charts, graphs and tables.

TABLES: A univariate table were used to project the data.

GRAPHS: Graphical representation of data was through- Pie chart, Column graphs ,Bar graphs.

STATISTICAL TOOLS USED

PERCENTAGE METHOD

In this project percentage method test and used. The following are the formula:

Number of Respondents

Percentage of Respondent = *100

Total Respondent

CO-RELATION ANALYSIS was used to prove the hypothesis of the project.

FINDINGS

Amongst different types of Pen, Ball pen is preferred by most of the consumers

Cello Brand enjoys the market leader position and it is also preferred by the majority of the consumers for writing among the different brands of Pen available in the market.

Among the various price of pens available in the market, between Rs 5-10 price level is the most popular level.

Most of the consumers are prefer to buy pen from stationary shops.

Smooth writing is the most influencing pen characteristic in the consumer buying process of pen

TV advertisement is the most influencing media for customers to buy pen.

Though the effect of In-shop advertisement towards customer is minimum, among the various mediums pen stands influences the most.

Friends are most influencing category of people in consumer buying decision of pen.

Though there is no strong brand loyalty towards any brands, high quality can make brand loyal customers.

Most of the customers buy more than 10 pen in a year on an average basis

Customers are less inclined to refill their pen because the pen cost is negligibly small

Among the surveyed customers only 39% has used classmate pens.

Maximum sale of pen happens during the school opening time.

High margin is the main pushing factor for retailers to sell more products

Most of the retailers replenish their stocks once in two weeks.

Among the surveyed retailers only 24% have classmate pen in their store

In retailers opinion by improving the availability of classmate pen, the sales can be improved.

On applying our findings to our 100 consumer in the survey, price satisfaction were correlated with overall satisfaction scores, r=0.19, which is considered as smaller effect, Hence Null Hypothesis is accepted in total.

RECOMMENDATIONS

Cello Company is regarded as No 1 market leader due to its product verities mainly in the Price range ranging from Rs 5 20 .In this Low Price Segment where majority of consumers prefer to buy their pen. At the same price range Classmate have very less products which can satisfy consumer need. So hereby I suggest that Classmate should Come up with more products in Effective Price range Of Rs 5 20, targeted to different consumer segments.

The practice of Use and Throw is more visible in consumers, so classmate should bring some models in below 5 Rs price level.

Company should strongly take care of availability of pens at rural retail outlets.

As Classmate is relatively new to the market consumers are not that much aware about the product, so company should focus more on promotional activities.

Compare to other brands classmates have limited or minimum In-shop advertisement objects, by increasing this brand awareness can be improved.

From the survey it is clear that different variable/features influence buying decision of consumer in different segments. Thus Company should not have a common Positioning for all Target Markets. The companies should try to focus on a target group by focusing on various characteristics that affect their buying decision

SCOPE FOR FUTURE RESEARCH

The factors that influence the consumer may change with change in time

because the needs of consumer may vary with change in time. So continuous

monitoring and close observation of factors that motivate the consumer is

necessary to maintain a competent workforce. Only with a competent work

force an organization can achieve its objective. Moreover, marketing

department is the most valuable asset to any organization. A further study

with in department analysis to know to what extent these factors motivate

the consumers is required.

BIBLIOGRAPHY & WEBLIOGRAPHY

BIBLIOGRAPHY

ITC India Ltd -Annual Report (2012).

Kothari, C.R.( 1982). Research methodology. New Delhi: Tata Mc Graw-Hill Ltd.

Das ,Bhagaban & Das ,Debadutta (2006) .Consumer Buying Behavior In India: New Delhi: Tata Mc Graw-Hill Ltd.

Solomon,R,Michael(2010). Consumer Behavior - Buying, Having, And Being, Prentice Hall PTR

Ali ,S.S,. Thakur,A.K,.Madhavan,K,.Palat(2009)-Models in Consumer Buying Behavior. Deep & Deep Publication

WEBLIOGRAPHY

http://www.itcportal.com/about-itc/shareholder-value/annual-reports/itc-annual-report-2013/content.aspx ( June,2013)

http://www.citehr.com/29099-hr-issues-retailing-business-plan.html (June,2013)

http://www.scribd.com/doc/82186216/Indian-Pen-Industry-Project (n.d)

http://informahealthcare.com/doi/abs/10.1080/01421590020031066

APPENDIX

QUESTIONNANIRE

I have undertaken a project on A STUDY OF THE CONSUMER BUYING BEHAVIOR OF ITC CLASSMATE PEN. The information provided by you in response to this questionnaire will be effectively used for developing this study and will help in a significant manner for my personal appraisal at ITC. The data will be kept confidential and will be used for academic purpose only.

Consumer Buying Behavior Questionnaire

Name -----------------------------

Age Group:

(a ) 15-20 [ ] (b)20-25 [ ] (c) 25-35 [ ]

(d) 35-50 [ ] (e) Above 50 [ ]

Place______________________

Occupation:

Student [ ] Business Person [ ]

Regular Employee [ ] Others [ ] _____________

Q 1). Which type of Pen do you currently use?

a)Ball Pen [ ]b)Gel Pen [ ]

c)Ink Pen [ ]d)Premium pen [ ]

Q 2). Which Brand Of Ball Pen do prefer to write?

a) Classmate[ ]b) Reynolds[ ]c)Cello[ ]

d) Lexi[ ]e) Linc [ ] f) Italia [ ]

g) others____________

Q 3). What is the price range in which you generally used to buy a pen?

( a) Below Rs 5 [ ] (b) Between Rs 5-Rs 10 [ ]

(c) Between Rs 10-Rs 15 [ ] (d) Between Rs 15-Rs 20 [ ]

(d) Above 20[ ]

Q 4).From where do you prefer to buy pen?

(a) Stationary shops [ ] (b) Super market [ ]

(c) Shopping malls [ ] (d) Others____________

Q 5). Which Characteristics of Pen Influence your Buying Decision?

a )Smoothly writing [ ]b)Grip[ ] c)Price[ ]

d)Long-Life[ ] e)Brand Name [ ]

Q 6). Which Advertising Media Influences You The Most?

a)TV Advertisements[ ]b)Banners & hoarding[ ]

c)Newspapers & Magazines[ ]d)Internet[ ]

Q 7). Is your buying decision influence In-Shop advertisements?

a)Yes []b)No[]

If Yes, Which influences the most?

a)Posters [ ] b) Hoardings[ ]c)Pen Stands[ ] d)Stickers

Others__________________

Q 8). Who influence your buying decision most?

Parents[ ] b)friends[ ] c) colleagues[ ] d)sales person[ ] e) others [ ]

Q 9). Do You Choose Only One Brand?

a)Yes []b)No[]

If Yes, Which brand?

a) Classmate[ ]b) Reynolds[ ]c)Cello[ ]

d) Lexi[ ]e) Linc [ ] f) Italia [ ]

Q10) Why do you purchase the same brand?

a) High Quality[ ] b) Brand Image[ ] c) Easy Availability [ ]

d)Value for money[ ] e)others____________

Q 11).Rank the brands of pens according to your preference from 1-5?

Classmates[ ] Cello[ ], Reynolds[ ], Lexi[ ], Linc[ ], Italia[ ]

Q 12) Number of pen usually buy in a year?

a)less than 2[ ] b) 2-5 [ ] c)5-10 [ ] d)more than 10[ ]

Q 13). Do You Refill Your Pen regularly?

a)Yes b)No

If No, Why

a)Pen Cost Is Negligibleb)Replacement results into Poor Performance

c)Refill Is Unavailable

d) Specify If Others,______________

Q14) Have you purchased classmate pen?

a)Yes []b)No[]

Retailers Questionnaire

Name of the store: ___________________________

Location:_______________________________

Contact No:_____________________________

Type of store

a) Stationary store [ ] b) Department store[] c) Supermarket [ ]

d) Malls [] e) others______________

Average monthly Sales:

a) less than 1 lakh[ ] b)1-3lakh [ ] c)3-5lakh [ ]

d) 5-10lakh[ ] e) above 10 lakhs[ ]

Q1) In which price range you sell maximum pens?

a) Less than 7Rs[ ] b)7-10 [ ] c)10-15[ ]

d)15-25 [ ]e)Above 25[ ]

Q 2) Which type of pen you sell the most?

a)Ball Pen [ ]b)Gel Pen [ ]

c)Ink Pen [ ]d)Premium pen [ ]

Q3) Maximum sales under the price range between Rs5-Rs.20 are for which brand of pens? (Rank in order of sales)

(a) Classmate [ ] (b) Reynolds[ ]

(c) Cello[ ] (d) Lexi [ ] e)Linc [ ]f)Flair[ ]

(g) Others[ ] (please specify)___________

Q4)-Sales of pens between the ranges of Rs5-Rs.20 is high during which period of time?

(a) High during exams [ ] (b) Stable throughout the year [ ] (c) When new Schemes are introduced[ ]. (d) School opening time[ ]

Q5)-Please tick the brands of pen you keep in your store

a) Classmate [ ] b) Reynolds[ ]c) Cello[ ] d) Lexi [ ]

e) Linc [ ]f)Flair[ ] g) Italia[ ]h)Lexor [ ] i)Win[ ]

Q6)-When people buy pens what among the following options do they prefer?

a )Smoothly writing [ ] b)Grip[ ] c)Price[ ]

d)Long-Life[ ] e)Brand Name [ ] f)Looks[ ]

Q7 ) Your influence towards customer in their buying decision?

a)High b)Average c)Low d)Nil

Q8) What motivate you to push the products more to customers?

High margin [ ] b)Schemes[ ] c)Quality of products [ ]

d) Others__________

Q9) How often you replenish your stocks?

a)every week[ ] b)once in two week[ ]

c) once in a month [ ]

d)more_________

Q10)Do you think buying decision are influenced by In-Shop advertisements?

a)Yes []b)No[]

If Yes, Which influences the most?

a)Posters [ ] b) Hoardings[ ]c)Pen Stands[ ] d)Stickers

Others__________________

Q11) For non-brand loyal customers, which brand you suggest most?

a) Classmate [ ] (b) Reynolds[ ]

(c) Cello[ ] (d) Lexi [ ] e)Linc [ ]f)Flair[ ]

Q12) What make you to do so?

a)High margin[ ] b)Schemes[ ] c)Quality of products[ ]

d)Brand image [ ] others[ ] ____________

Q13)Do you have classmate pen in your store?

a)Yes []b)No[]

If Yes

What makes classmates to sell more?

a) Improve quality b) better margin c) more advertisement

d) Better availability e) others_____________

If No

Are you interested to sell classmate pen?

a)Yes []b)No[]