A REPORT ON

CHOCOLATES

&

CONSUMER BUYING BEHAVIOUR

SUBMITTED TO:

DR.SHRADDHA SHIVANI

SUBMITTED BY:

1. BIDISHA BISWAS

2. CH.SHARVANI

3. D.MADHURI

4. KUMARI AKANSHA

5. NEHA SRIVASTAVA

6. PREETI PAL

7. PUNAM KUMARI

8. PURVA GURIA

9. RAJASHREE DAS

10. RINI SARKAR

11. SHIVANGI

12.SUNITA KUMARI

CONTENTS

1. Introduction 1

2. Methodology 2

3. Findings 3

4. Data analysis

Hypothesis –I 4-5

Hypothesis –II 6-7

5. Interpretations 8-9

6. Recommendations 10-11

7. Conclusion 12

8. Appendices

Questionnaire 13-15

Charts 16-17

9. References 18

INTRODUCTION

In the present world, Chocolate is the only word that transcends the barrier of age and language intriguing alike from kids to their grandparents. It is one which is consumed and liked by almost every one. Chocolate accounts for a small share of the sugar and confectionary market in India. Mithai- the traditional Indian sweet is getting substituted by chocolate. The consumption level of chocolate is surged during festive seasons like Rakshabandhan, Diwali, e.t.c.chocolate market in India is estimated be around 1500 crores growing at 18-20% per annum.

The increasing consumption levels, offers the industry significant prospects, especially for foreign players which are highly competitive. There are a small number of large firms in the industry - Cadbury’s, Nestlé and Amul being the most well known. Many of the brands in the market have been in existence for a long time and have a high amount of brand loyalty. Openings for new products therefore are limited. There are many examples of products that have been launched but could not sustain long-term sales success. For example, mars, Gandour, e.t.c

The study mainly focuses on the buying behavior of the people followed in making purchase of chocolates and how far the brand loyalty and age group affects it. A sample of 100 people with different age groups is taken and a interviews are conducted to find the above. By going through the interviews of these people it was found that age becomes the main factor in deciding the type of chocolate that is to be bought and brand loyalty effects the purchase decision of the consumer. In India Cadbury has highest brand loyalty with more than 70% of the market share. The study reveals that most of the consumers are under age group 11-30.

Most of the market is being grabbed by foreign brands like Cadbury and nestle. In spite of being a domestic brand Amul market share is around 3% along other local brands. Amul has brand loyalty among its customers in its other dairy products. But it is may be due to its less promotional and distribution it couldnot get more market share. Amul chocolates are positioned as if they were only to children. And due to this it was unable to capture the market of other age groups. Different tools have been used to study and interpret the consumer buying behavior and recommendations are made.

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METHODOLOGY

HYPOTHESIS DEVELOPED

: There were two hypothesis developed. The first one was whether the flavour of the chocolate varies with the age of the consumers and the second was does the brand name matters in buying decision.

SOURCES OF DATA: There were two sources of data used. The first one was Primary source and the second was Secondary source. The primary source consists of questionnaires and observations. The secondary source consists of internet and magazines.

The design of questionnaire was as follows:

• Types of questions: Multiple choice questions were used.

• Phrasing of the questions: The following points were taken into consideration while phrasing of the questions:

1. Difficult and vague words were avoided.

2. Lengthy and unspecific questions were avoided.

3. Two questions were not combined together.

• Order of the questions: General questions were included first followed by specific questions.

• Number of questions: The questionnaire consisted of 19 questions.

SAMPLING DESIGNS AND SAMPLE SIZE: Random sampling method was used and the sample size was 100.

TARGET POPULATION: The selected population consisted of diversified age groups from a small part of North India and a small part of South India.

DESCRIPTIONS OF STUDY: The survey was conducted in Ranchi during December, 2008.

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FINDINGS

The survey conducted discovered that most of the chocolate bar consumers falls in the age group of 10 – 30.There is a common notion that chocolates are meant for younger generation but survey revealed that every section of the society has chocolate consumers.

The survey showed that 51% of people in the age group of 10-40 prefer dark chocolates bars. It also exposed that milk chocolates are more preferred by people under age group 0-10 and 40 & above. It revealed that more than 75% of people opt for nut chocolates.

The other prime findings were that 46% of the sample purchase chocolates in price range of Rs.5-10 and 38% of the sample purchase chocolates in price range of Rs.10-20. 61% of the sample preferred Cadbury, 25% Nestle, and 14% preferred Amul.

From the sample collected blue wrapper colour was preferred by 29 people, red by 8 people, purple by 20 people, white by 7 people, gold by 20 people and other colours were preferred by 16 people.

63% of sample size preferred medium sized chocolate bars and 43% of people preferred chocolates packs for gifting on special occasions.

43% of sample used Television - ads as an information channel to gather information about chocolates. 32% used stores, 18% used friends and relatives and 7% used other sources to assemble information about chocolates.

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DATA ANALYSIS

HYPOTHESIS I

• NULL HYPOTHESIS : the brand name is important.

• STATISTICAL TOOL : CHI-SQUARE.

• TARGETED POPULATION: PEOPLE OF RANCHI from the age group of 0-60 YEARS,

mostly above the poverty line.

• SAMPLE SIZE : 100

CH I -SQU ARE TESTAGE GROUP CADBURY’S NESTLE AMUL TOTAL

0-20 24 14 6 44

20-40 31 6 4 41

40-60 6 5 4 15

TOTAL 61 25 14 100

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O E (O-E) 2/ E

24 26.84 0.300

31 25.01 1.43

6 9.15 1.08

14 11 0.82

6 10.25 1.76

5 3.75 0.42

6 6.16 0.004

4 5.74 3.03

4 2.1 1.72

∑[(O-E)2/ E]=10.564

Chi square (calculated) is 10.564

Chi square (tabulated) at 5% level of significance is 9.49

This shows that null hypothesis is rejected as the calculated value of the Chi-Square

is more than the tabulated value.

This is why despite of a big brand name, AMUL Chocolates have a very low market

share.

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HYPOTHESIS II

NULL HYPOTHESIS : Flavour of the chocolate differs with the age of the consumers.

STATISTICAL TOOL : CHI-SQUARE TEST.

TARGETED POPULATION : PEOPLE OF RANCHI, from the age group of 0-60 YEARS,

mostly above the poverty line.

SAMPLE SIZE : 100

AGE DARK MILK TOTAL

0-20 20 21 41

20-40 25 22 47

40-60 5 7 12

TOTAL 50 50 100

CH I -SQU ARE TEST

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O E (O-E) 2/ E20 20.5 0.0121

25 23.5 0.0957

5 6 0.1666

21 20.5 0.0121

22 23.7 0.1219

7 6 0.1666

∑[(O-E)2/ E]= 0.575

Chi-Square (calculated) is 0.575

Chi-Square (tabulated) at 5% level of significance is 5.99

This shows that null hypothesis is accepted as the calculated value of the

Chi-Square is less than the tabulated value.

This shows that the flavour of the chocolate differs with the age group of the

consumers

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INTERPRETATIONS

1) Purpose of purchase:-

Most of the people purchase Chocolates for fun, enjoyment and sharing. Chocolates are being

more preferred as gifts rather than sweets particularly in the urban as well as semi-urban

areas.

2) Sources of information:-

Information regarding chocolates is obtained through commercial sources i.e. TV ads,

Displays, etc.

3) Basis for selection:-

Attributes like appearance, wrapper colour, size of the chocolate bar, taste, price becomes the

basis for evaluation and the selection of the Chocolates.

4) Reasons of Cadbury’s success:-

Cadbury’s uses intensive advertisement and distribution which may be the reason for its

largest market share than Amul.

Gift packs like celebration of Cadbury’s for special occasions like diwali are most preferred

over Rejoice of Amul. Dark Chocolates are more preferred because of its nutrition and taste.

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.

5) Age groups:-

All the age groups prefer Chocolates for snacking and fun.

Mostly Chocolate bars of price range Rs. 5-20 are preferred. Cadbury’s advertisements focus

on all age groups where as Amul’s are kids – oriented.

6) Market strategy:-

Apart from brand image, Cadbury’s also has more brand commitment than Amul.

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RECOMMENDATIONS

1) Proper concentration:-

Though AMUL has got a wide product variety, it still needs to concentrate more on its

chocolate products. Without compromising on quality, AMUL can reduce the size of its

chocolates to gain the demand for smaller packs.

2)Penetration pricing:-

Taking the diverse economy of India into consideration, AMUL should go for "penetration

pricing” so that people from all income groups are benefited. Penetration pricing is an

approach to pricing where in the price is set to a sufficiently low level(below the prices of

competing products) to make the product attractive to mass market. The aim is to achieve

large market share by high initial sales.

3) Adopt new marketing policies:-

Sales professionals of the local region who have familiarity with the local language can be

appointed to look after the sales of that area, so that they can easily converse with the

retailers and can build goodwill for the company.

4) External appearance:-

Packaging should be more attractive as the appearance of the chocolate matters a lot for the

consumers.

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5) Innovative and up to date promotions:-

The traditional method of promotions has to be changed by the MNCs and National

Companies. A portion of the ad budget can be allocated for retailers' margin. Through ad

campaigns, the companies can also create awareness among consumers regarding the

products.

6) Proper market segmentation:-

The target consumers for AMUL should be people from all age groups, not only the kids.

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CONCLUSION

The chocolate market is as fragmented as any other FMCG category, such as ice creams or

shampoos and within the chocolate market, there exists a tough competition among the

confectionary companies. The growing chocolate market is gaining attention of all the

manufacturers thus giving rise to opportunities for the new entrants. For nearly every industry,

sustainability is a key objective. Creating a sustainable chocolate industry benefits all of the

industry’s stakeholders, from the grower to the manufacturer. Confectionary companies are

constantly finding new ways to gain attention of the consumers on their products, trying to

improve the quality and availability of the product, making the product more appealing.

Hence the general idea that brand name or flavor does not matter is not appreciable and needs to

be revised as the prevailing trends show an upsurge in the demand for a wide range of varieties

with specifications. This survey facilitates the companies like Amul to revise their strategies to

gain large market shares. Understanding the changing perceptions regarding the consumer

buying behavior helps an organization in being the market leader.

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APPENDICES

QUESTIONNAIRE

1. What age group do you fit into?

* 0-10 * 11-20 * 21 – 30 * 31 - 40 * 41 – 50 * 50+

2. What is your gender?

* Male * Female

3. What type of chocolate do you like?

* White * Dark * Milk

4. What ingredients would you prefer in it?

* Fruit * Nut * Caramel * Toffee * Mint

5. Which taste do you prefer in the chocolates?

* Strawberry *Milk *Pineapple * Chocolate * Mint *Elaichi

6. Do you have any allergies to any of the above?

*Yes * No * If yes, state which.............................

7. What is the price range you prefer for the chocolates?

*Below Rs. 5 * Rs.5-Rs.10 * Rs. 10-Rs. 20 * Above

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8. What brand do you prefer?

(State which, e.g. Cadbury, Nestle, Amul etc)......................................

9. What colour would you like the wrapper to be?

*Blue * Green * Red * Purple * Black * White * Gold * Silver *Any Other

10. Where do you get information about chocolate bars?

*Magazine ads * TV ads * Newspaper Ads * In-Store * Friends/Relatives * Internet

11. Where do you buy chocolate bars from?

*Corner shop * Supermarket * Internet * Other (Please State).............................

12. How big would you like it to be?

*Small * Medium * Large * Extra Large

13. Do you think appearance is important?

*Yes * No

14. On an average how many do you buy a week?

*None * 1-5 * 6 - 10 * +10

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15. What do you use chocolate for?

*Enjoyment * Energy * Snacking * Cooking * Sharing

16. Do you prefer gifting chocolates?

* Yes * No

17. If yes, which brand?

*Cadbury * Nestle * Amul * If any other, please specify…………………..

18. Do special occasions persuade you to buy chocolate gift packs rather than sweets?

*Yes *No

19. Are you diabetic or health conscious?

*Yes (state which)................. * No

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CHARTS

16

CONSU MER PREFERENCE FO R TH E BRAND S

0

10

20

30

40

50

60

70

CADBURY'S NESTLE AMUL

Brand

No. of persons

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REFERENCES

MARKETING MANAGEMENT-ANALYSIS, PLANNING AND CONTROL - PHILIP

KOTLER

FUNDAMENTALS OF MARKETING-STANTON, WILLIAM J.

GOOGLE

WIKIPEDIA

WWW.BUSINESSBALLS.COM

HTTP://SEARCH.EBSCOHOST.COM/

HTTP://WWW.ECONOMICTIMES.COM/

BUSINESS WORLD

MARKETING RESEARCH- G.C.BERI

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