A Project Report

on

A Study On Consumer Preferences Towards Soap

Brands

Submitted in partial fulfillment of requirement of BBA

BBA VITH(Morning)

BATCH-2013-2016

Submitted to

Ms.Tanvi Gupta Submitted by

Assisstant professor Divya pandey

02414101713

JAGANNATH INTERNATIONAL MANAGAMENT

SCHOOL

1
 DECLARATION

I Divya Pandey student of Bachelor in Business Administration (semester-

VIth) of Jagannath International Management School, hereby declare that
I have successfully completed this project on A study of consumer
preferences towards soap brands as a part of my VI th semester subject.
The information incorporated in this project is true and original to the best
of my knowledge.

Date: signature

2
 ACKNOWLEDGEMENT

With immense pleasure, I would like to present this project report on A study on
consumer preferences towards soap brands As a student of Jagannath
International Management School Would like to express my sincere thanks to all
those who helped me during my project. I would like to express my gratitude to all
those who gave me the encouragement to Complete this project. I would like to
thank my college authorities and Faculty Mentor Ms Tanvi Gupta. For providing me
the opportunity to gain knowledge and experience and for providing guidance to
complete the project. I would like to give my special thanks to my parents, friends,
and their love, support and blessing enabled me to complete this project work
..

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 I

CERTIFICATE OF COMPLETION

This is to certify that the project work entitled A study on consumer

preferences towards soap brands
Its under my guidance and direction is a bonafide work carried out by
Divya Pandey, a candidate of BBA of Jagannath International
Management School.

Signature of the Guide

Ms Tanvi Gupta

Assistant Professor

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 CONTENTS

Description Page No.

Acknowledgement (i) (i)
Contents with page no. (ii)
Certificate of completion 4
Objectives 6
Introduction 7-18
Literature review 18-28
Research Methodology 29-30
Analysis & Interpretation 31-48
Findings 49

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 Suggestions &Recommendations 50
Conclusions 51
Questionnaire 52-56

Limitations 57
Bibliography 58

OBJECTIVES

To determine the awareness level of the soap brands

To identify perception of the consumers
To identify various factors affecting purchases
To determine effects of product ingredients on the
consumer
To study consumer buying behaviors
To determine preference of the consumers

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 INTRODUCTION
HISTORY OF SOAPS

The first recorded evidence of the manufacture of soap-like materials

dates back to around 2800 BC in Ancient Babylon. Babylonians
discovered the basic method of making soap (fats boiled with ashes
and water). Soap was used mostly in the textile industry.

The Ebers papyrus (Egypt, 1550 BC) describe how animal and
vegetable oils were mixed with alkaline salts to produce a soap-like
substance and mention that soap was used for threatening sores, skin
diseases as well as washing.

The ancient Greeks were known to wash without soap. They preferred
to wash with water, blocks of clay, pumice, sands and ashes and then
to anoint themselves with oil. In the second century AD, Galen, the
famous Greek physician, recommended washing with soap as a
preventive measure for skin diseases.

It is believed that Romans cleaned their bodies by rubbing abrasive

substances, like sand or pumice, over the skin and then used sticks to
scrape off the grime and gravel. Regardless of the end uses of soap,
soap became popular throughout the Roman Empire. The ruins of
Pompeii, one of the cities destroyed by the volcanic eruption of Mt.
Vesuvius in 79 A.D., revealed an entire soap factory.

Ancient Germans and the Gauls mixed ashes with animal fat to
produce soap, and they used it to decorate their hair.

Arabic chemists were the first one to produce soaps made from
vegetable oils (such as olive oil), aromatic oils (such as thyme oil) and
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lye. From the beginning of the 7th century, soap was produced in
Nablus, Kufa and Basra. They made perfumed and colored soap, some
of the soaps were liquid and others were solid. They also made special
soap for shaving.

By 1200 AD, Marseilles, France and Savona, Italy became soap

making centers. In the 8th century, soap making was well-known in
Italy and Spain where soap was made with goat fat and Beech tree
ashes. During the same period, the French started using olive oil to
produce soap. Eventually, fragrances were introduced and soaps for
bathing, shaving, shampooing and laundry began to be made.

From the 16th century finer soaps were produced in Europe using
vegetable oils (such as olive oil) as opposed to animal fats. Many of
these soaps are still manufacture, both industrially and by small scale
soap makers.

Due to a better understanding of the role of hygiene and the promotion

of popular awareness of the relationship between cleanliness and
health, industrially manufactured bar soaps became available in the
late eighteen century. The big leap in commercial soap making was two
discoveries by French chemists Nicholas Leblanc and Michael
Chevreul around the turn of the 19th century. In 1791, Leblanc
patented a method of making sodium carbonate or soda ash from
commonly available salt. In 1811, Chevreul discovered the relationship
and chemical nature of fatty acids, glycerin, and fats.

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.Andrew Pears began manufacturing a high-quality, transparent soap in
1789 in London. William Gossage manufactured low-price good-quality
soap from the 1850s. Robert Spear Hudson started producing a soap
powder in 1837.

The development of synthetic detergents in Germany in 1916 made

another breakthrough in soap making chemistry. Another well known
soaping center was The Castille region of Spain, responsible for
making the first, hard, white bars of olive oil soap. Castille soap is still
known today like soaps made with all, or mostly all, olive oil.

Commercial soap, as we know it today, came into existence during

WWI. After the Great War and until 1930's, a method called batch kettle
boiling was used for soap production. Shortly thereafter, continuous
process that decreased soap making production time to less than a day
was introduced and refined by Procter & Gamble. Continuous process
is still used by large commercial soap manufacturers

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 INDIAN SOAP INDUSTRY

The Indian Soap Industry includes about 700 companies with

Size of the Industry combined

annual revenue of about $17 billion.

Geographical
All the major metropolitan cities
distribution

Output per annum Indian per capita consumption of soap is at 460 gms per annum

70% of India's population resides in the rural areas

Market Capitalization
and around 50% of the soaps are sold in the rural markets.

Brief introduction

Soaps are categorized into men's soaps, ladies' soaps and common
soaps. There are few specialty soaps like the Glycerine soaps, sandal
soaps, specially flavored soaps, medicated soaps and baby soaps.
Specialty soaps are high valued which enjoy only a small share of the
market in value terms. The market is growing at 7% a year. This means
that the incremental demand generation is 5% over and above the
population growth. With increasing awareness of hygienic standards,
the market for the Soaps could grow at a rate higher than 8% annually.
Interestingly, 60% of the market is now sourced from the rural sector.
This means that the variance between the two segments is not very
large. Since upper-end market focus is the urban areas, margins come
from the urban sector.

Soap is a product for many people and the lathering up can be a

treasured part of a morning or nightly routine. Whether it might be

10
scented or unscented, in bars, gels, and liquids, soap is a part of our
daily lives. In the United States, soap is a $1.390 million (US$) industry
with over 50 mass market brands. But in Indian markets the sales
potential for soap is only beginning to be realized. At the end of the
year 2000, soap was a $1.032 million (US$) business in India.

India is a country with a population of 1,030 million people. With the

household penetration of soaps is 98%. People belonging to different
income levels use different brands, which fall under different segments,
but all income levels use soaps, making it the second largest category
in India. Rural consumers in India constitute 70% of the population.
Rural demand is growing, with more and more soap brands being
launched in the discount segment targeting the lower socio-economic
strata of consumers. Soap manufacturers originally targeted their
products to the lowest income strata in urban as well as rural areas,
positioning their brands as a way to remove dirt and clean the body.
For some brands, that positioning persists even today with a focus on
removal of body odor and keeping the user healthy. However, soap
positionings are moving towards skin care as a value-added benefit.

Soap is primarily targeted towards women, as they are the chief

decision-makers in terms of soap purchase and for Medicated
positionings like germ killing and anti-bacterial are marketed to families.
About 75% of soap can be bought through the different types of
outlets.This is the most common source for buying soap, which usually
forms a part of the month's grocery list. Pan-Beedi Shops: These are
really small shops, almost like handcarts, and they are primarily set up
to dispense cigarettes and chewing tobacco.

Total annual soap sales by companies marketing their brands at

national or state levels is estimated at 14,000 tonnes of a total soap
market considered to be about 126,000 tonnes.

Market capitalization
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Today in the Indian
economy the popular
segments are 4/5ths
of the entire soaps
market. The
penetration level of
toilet soaps is 88.6%.
Indian per capita
consumption of soap
is at 460 Gms per
annum, while in Brazil
it is at 1,100 grams
per annum. In India,
available stores of
soaps are five million
retail stores, out of
which, 3.75 million
retail stores are in the
rural areas. 70% of
India's population
resides in the rural
areas and around
50% of the soaps are
sold in the rural
markets.

Size of the industry

The Indian Soap Industry includes about 700 companies with

combined annual revenue of about $17 billion. Major companies in this
industry include divisions of P&G, Unilever, and Dial. The Indian Soap
Industry is highly concentrated with the top 50 companies holding
almost 90% of the market. The market size of global soap and
detergent market size was estimated to be around 31M tonne in 2004,

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which is estimated to grow to 33M tonne in the coming years. Toilet
soaps account for more than 10% of the total market of soap and
detergents. In Asia, the countries like China and India are showing
rapid growth in the toilet soap section. Market share of body wash was
estimated to be around 2% in 2004 and is showing signs of healthy
growth in these markets. India's soap market is Rs 41.75 billion.

Indian Soap Industry volume is Rs 4,800-crore. For the purpose of

gaining a competitive edge, Indian companies are now relaunching
their brands with value-additions to woo consumers across India. For
instance, Hindustan Lever Ltd (HLL) has recently launched a host of
toilet soap brands which include Lifebuoy, Lux, Breeze and Liril-with
value additions. Also is in the process of rolling out 'Ayush' ayurvedic
soap. The aim is to meet the evolving needs of customers.

One of the factors which affect the demand of soaps is the penetration,
which the products have in market. In case of soaps this has not been
a major issue as the penetration in the rural area is as high as 97% and
that for urban area is around 99%. Thus approximately the penetration
is around 99% for overall India.

Total Contribution to the economy / sales

In terms of market share for Indian Soap Industry the data indicates
that HLL had a market share of 64 % in the soap market, followed by
Nirma at 16.8 % and Godrej at 4.4%. Nirma's market share was in the

13
northern region was 21 %. The largest contributor to the toilet soaps
market in Indian market is Hindustan Lever with the total contribution to
the economy & enjoys almost a two-thirds share, with the second
ranked Nirma Soaps placed at a distantly low share of 16.8%. Lux and
Lifebuoy have held the sway of the market for almost fifty years.

Top leading Companies

In the Rs 4,800-crore Indian toilet soaps market, the lead players

include:

HLL

Godrej Consumer Products Ltd

Colgate Palmolive Ltd and

Wipro Consumer Care

Employment Opportunities

Indian Soap Industry has tremendous opportunities in the

manufacturing companies of soaps for Graduates and post graduates
in the areas of Marketing, Finance, Administration, Advertising and
even opportunities for the models to act in ads for the soaps.

Latest developments

In Indian Soap Industry the entry of new players in the 6,500-

crore toilet soaps industry is expected to bring about a new twist
in the "Indian soap opera".

ITC Ltd has started investing in aggressive brand-building and

product development projects to promote its brands, Fiama De
Wills, Vivel and Superia.

14
 Godrej Consumer Products Ltd and Wipro Consumer Care
Lighting are established players in the Industry which are
beefing up their research projects and advertising plans to take
on new rivals.

With increasing competition, the Indian Soap Industry is

expected to register a healthy growth this fisca. The sector
registered a 15% value growth.

GCPL is hiking its advertising budget by 20% to gain high

visibility for its brands.

Soap Industry- Indian Scenario

Growth and development of soap industry in Indian scenario can be

studied as

1. soap industry before independence,

2. soap industry after independence and 3.soap industry during

the 1990s.

.1 Soap Industry before Independence

In India modern soap industry was started during the early 20' century.
The history of soap manufacturing in India by the organized sector can be
traced to as far back as 1879, to the North West soap company at Kanpur
by the British and Kerseve soap company at Meerut in 1897. By 19 18
there were as many as eleven large soap manufacturing units in India
which started the production of modern type of soaps. It was around this
time that imports of toilet soap began and major International brands
appeared on the scene. The first indigenous unit was set by Godrej in 191
8 in Bombay. Next was the Tatas in 1930, followed by Levers in L Usha
Shivaraman (1988) Poised for a major breakthrough, Economic Times, july

15
28, 1934. By the end of the thirties domestic production had started in full
swing and therefore imports of soap declined. The import worth Rs. 20
million in 1920-21 came down to Rs. 8 million in 1940-4 1. Thus
immediately after the end of the first world war Godrej, Tata oil Mills,
Mysore and Madras governments entered into the soap manufacturing
field. In 1922 Unilever was taken over by the North West factory. But they
did not show much interest in increasing their capital in soap manufacture
in India. Large scale soap manufacture came into being, only by 1930.
Limited progress was acquired in this business.

4.3.2 Indian Soap Industry- After Independence

Soon after independence, the Indian government took the leadership in

strengthening the indigenous soap manufacture. Soaps and detergents
are manufactured in India both in the organized and in the unorganized
sector. Industrial licencing introduced by the government benefited the
soap business. The support given by the government and other financial
institutions helped in a strong manner to promote the growth of soap
production in the small scale sector. As result the government imposed
total ban on the import of soaps from 1955 onwards. Besides satisfying
the needs L of the internal market, the Indian soap manufacture sphere
acquired the capability for export also. In 1955, when the production in the
organized sector was one lakh tonnes, it was one lakh ten thousand
tonnes in the unorganized sector. Even then sufficient attention was given
to the organized sector. Hindustan lever produced more than 60,000
tonnes and maintained its supremacy as it was before independence. As a
result of changes brought in the policy of licencing, the production of soap
and detergents in the organized sector of India was steadily increasing
from 1960 onwards.

Major players & market shares:

Hindustan Unilever ltd., (HUL) is the leader for the toilet soap
industry in India with a 60% share in the market. Other major players

16
 from LUX is facing competition are Godrej soaps, Wipro, Procter &
Gamble, Colgate Palmolive, Johnson & Johnson etc.,

Their market shares is as follows

COMPANIES MARKET SHARES

HUL 60
TATA OIL
13
MILLS
DOVE 07
GODREJ
05
SOAPS
NIRMA 08
OTHERS 07

SEGMENTATION OF SOAPS

The Following table lists the key brands of the main

companies.

COMPANY BRAND SEGMENTATION

Godrej soaps Cinthol Premium
Godrej no 1 Popular
Marvel Popular
Lifebuoy(plus,
gold,family,liquid) Carbolic

HUL Lux(international, Premium

Dove Premium
Face washes,
Shower gel) Premium

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 Liril,pears, Premium
Jai,breeze Popular

P&G Camay Premium

WIPRO Santoor,baby soft Premium

Wipro shikakai Popular
KS&DL My sore sandal soap Premium
My sore sandal gold Premium
HENKET-SPIC Margo Popular
COLGATE- Palmolive natural Premium
PALMOLIVE

LITERATURE REVIEW
Consumer is the king of any business activity. It is very important for any
marketing person to know how the consumer perceives different things
and how he behaves accordingly. So consumer research is imperative for
the success of any marketing effort. Hence an attempt is made in the
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present Chapter to study the behavior and perception of consumer.First of
all perception is defined as the process of receiving, selecting organizing,
interpreting, checking and reacting to sensory stimuli or data.
Consumer behavior is defined as behavior that consumer display in
searching for purchasing, using evaluating and disposing of product and
services that they expect will satisfy their needs.
The study of consumer behavior is the study of how the individuals make
decision to spend their available resources like time, money, effort, etc, on
consumption related items. It includes the study of what they buy, when
they buy it, why they buy it, where they buy it, how often they buy it and
often use it.
As marketer, it is important to recognize why and how individuals make
their consumption decision, so that we make better strategic marketing
decision. If marketer understand consumer behavior they are able to
predict how consumer are likely to react to various information and
environmental cues and are able to shape their marketing strategies
accordingly. With out doubt, marketers who understand consumer
behavior will have great competitive edge in the market.
Consumer behavior is relatively new field of study in the mid-to-late 1960s
with no body of research of its own, the discipline borrowed heavily from
concepts developed in other scientific disciplines, such as Psychology
(study of individuals), Sociology (Study of groups), Social psychology
( study of how an individual operates in groups), Anthropology ( the
influence of society on individuals) and Economies.

The initial thrust of consumer behavior was from a managerial prospective,

marketing manager wanted to know the specific causes of consumer
behavior. They also wanted to know how people receive store and use
consumption related information so that they could design marketing
strategies to influence consumption decision. They regard consumer
behavior disciplines as an applied marketing science.
There are number of reasons why the study of consumer behavior was
developed as a separate marketing discipline. Marketers had long noted
19
that consumer did not act or react as marketing theory would suggest. The
size of the consumer market in every country is vast and constantly
expanding. Large amount were being spent on goods and services by
millions of peoples. Consumer preference were changing and becoming
highly diversified. Even in industrial markets, where needs for goods and
services were always more homogeneous than in consumer markets,
buyers were exhibiting diversified preference and less predictable
purchase behavior.
As marketing people began to study the buying behavior of consumer, they
soon realized that despite a sometimes mo too approach to fact and
fashions, many consumer rebelled at using the identical product everyone
else used. Instead they preferred differentiated product that they felt
reflected their own special new personalities and life styles.
So by studying consumer behavior marketing people will be able to needs
of different groups of customers more efficiently.

The underlying foundation of demand, therefore, is a model of how

consumers behave. The individual consumer has a set of preferences and
values whose determination are outside the realm of economics. They are
no doubt dependent upon culture, education, and individual tastes, among
a plethora of other factors. The measure of these values in this model for a
particular good is in terms of the real opportunity cost to the consumer who
purchases and consumes the good. If an individual purchases a particular
good, then the opportunity cost of that purchase is the forgone goods the
consumer could have bought instead. We develop a model in which we
map or graphically derive consumer preferences. These are measured in
terms of the level of satisfaction the consumer obtains from consuming
various combinations or bundles of goods. The consumers objective is to
choose the bundle of goods which provides the greatest level of
satisfaction as they the consumer define it. But consumers are very much
constrained in their choices. These constraints are defined by the
consumers income, and the prices the consumer pays for the goods. We
will formally present the model of consumer choice. As we go along, we will
20
establish a vocabulary in order to explain the model. Development of the
model will be in three stages. After a formal statement of the consumers
objectives, we will map the consumers preferences. Secondly, we present
the consumers budget constraint; and lastly, combine the two in order to
examine the consumers choices of goods. THE THEORY OF THE
CONSUMER Consumer make decisions by allocating their scarce income
across all possible goods in order to obtain the greatest satisfaction.
Formally, we say that consumers maximize their utility subject to budget
constraint. Utility is defined as the satisfaction that a consumer derives
from the consumption of a good. As noted above, utilitys determinants are
decided by a host of noneconomic factors. Consumer value is measured in
terms of the relative utilities between goods. These reflect the consumers
preferences. Theory of Consumer Preferences Consumer preferences are
defined as the subjective (individual) tastes, as measured by utility, of
various bundles of goods. They permit the consumer to rank these bundles
of goods according to the levels of utility they give the consumer. Note that
preferences are independent of income and prices. Ability to purchase
goods does not determine a consumers likes or dislikes. One can have a
preference for Porsches over Fords but only have the financial means to
drive a Ford. These preferences can be modeled and mapped through the
use of indifference curves. In order to graphically portray consumer
preferences, we need to define some terms. First, since we will be working
in two dimensions (2-d graphs), we assume a two good world. These could
be any Page 2 two goods. One common treatment is to define one good,
say food, and let the other good be a composite of all other goods. For
expository simplicity (making things easier for me), lets define the two
goods as Good X and Good Y. The axes of the graph then measure
amounts of Good X on the horizontal, and amounts of Good Y on the
vertical. Each point in this Cartesian space then defines some combination
of goods X and Y. We call these combinations commodity bundles. The
goal of the theory of preferences is for the consumer to be able to rank
these commodity bundles according to the amount of utility obtained from
them. In other words, the consumer has different preferences over the
different combinations of goods defined by the set of commodity bundles.
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In order to develop a model we need to make some assumptions about the
consumers preferences . There are four assumptions. The first is
decisiveness. Here, given any two commodity bundles in commodity
space, the consumer must be able to rank them. In Figure 1, suppose we
randomly chose two commodity bundles A and B. This assumption means
that the consumer must be able to say that they prefer commodity bundle A
over B, or B over A, or that bundles A and B provide the same level of
utility. The second assumption is consistency. The consumer must be
consistent in preference and rankings. Again referring to Figure 1, suppose
we now include bundle C. Let the consumer prefer commodity bundle A
over B, and also commodity bundle B over C. Then by this assumption the
consumer must prefer A over C. The following two assumptions are not
required to develop the theory of the consumer, but simplify matters
significantly. The third assumption is non-satiation. In other words, more is
always better than less. More formally, any commodity bundle with at least
as much of one good and more of the other must be preferred. Commodity
bundle A in Figure 1 has two straight lines running through it. This creates
four quadrants, to the northeast, southeast, southwest and northwest of
bundle A. All Figure 1 Good X Good Y A B C NW NE SE SW U0 Page 3
commodity bundles to the northeast of A contain more of both X and Y then
does A. Therefore, by the assumption of non-satiation, any bundle in this
quadrant is preferred to A. The opposite is true for bundles to the
southwest of A. They contain less X and Y than does A, hence must be
less preferred. The quadrants to the southeast and northwest contain more
of one good but less of the other; hence we cannot determine preference
rankings with respect to A. The last of the assumptions is convexity, which
is the most difficult to explain. It is based on the notion that as a consumer
consumes more and more of a particular good, the additional utility
obtained decreases. We define marginal utility as the change in utility due
to an incremental increase in the consumption of a given good. Convexity
says that marginal utility declines as consumption increases. Note that the
total utility continues to increase if marginal utility is positive (which it must
be for non-satiation to hold), but total utility increases at a decreasing rate
if marginal utility is declining. An indifference curve is a collection of all
22
commodity bundles which provide the consumer with the same level of
utility. The indifference curve is so named because the consumer would be
indifferent between choosing any one of these commodity bundles. In
Figure 1 the curved line which passes through commodity bundle A
represents an indifference curve. All the commodity bundles on U0 provide
the same utility as does bundle A. Any commodity bundle above the U0
indifference curve must be preferred to any commodity bundle on U0.
Conversely, any commodity bundle on U0 must be preferred to any bundle
below it. The choice of commodity bundle A to derive U0 was completely
arbitrary. It could have been any other commodity bundle. This means that
each commodity bundle has an indifference curve running through it.
Figure 2 shows a family of three indifference curves. An indifference curve
represents a greater level of utility as we move further to the northeast
from the origin. Why? (The student should examine the consumer
preference assumptions for the answer.) Therefore indifference curve U2
has a higher utility level than U1 which has a higher utility level than U0.
Page 4 Note that indifference curves are negatively sloped. This is the
case because of non-satiation. Indifference curves can not be upward
sloping because the consumer cannot be indifferent between two
commodity bundles if one has more of both goods. The big question is why
the indifference curve is bowed inwards. The quick and dirty answer is the
assumption of convexity. Recall that convexity results from diminishing
marginal utility, i.e., as a consumer consumes more and more of a given
good, the additional unit of that good provides less utility. As we move
along an indifference curve from left to right,the consumer is consuming
more and more of good X and less and less of good Y. Thus the marginal
utility of the additional unit of good X declines whereas the marginal utility
of the foregone Y increases. Since by an indifference curves definition that
each commodity bundle provides the same level of utility, the consumer is
willing to give up less and less good Y as he or she consumes more and
more good X in order to hold utility constant. This trade off between goods
X and Y along an indifference curve is an important topic. It is called the
marginal rate of substitution (MRS). Figure 3 shows four commodity
bundles, A, B, C and D, along an indifference curve. As we move to the
23
right along U1, we are increasing the amount of good X by equal
increments of an amount X. The amount of good Y that must be given up
as we move from bundle A to bundle Figure 2 Good X Good Y U0 U1 U2
Figure 3 Good X Good Y U1 Y0 Y1 Y2 X A B C D Page 5 B (Y0), from B
to C (Y1), and from C to D (Y2) gets smaller and smaller. This is true
because the additional utility from the additional increment in good X
provides less and less utility, while the additional unit of good Y the
consumer is giving up contains more and more utility. This gives rise to
why the indifference curve bows inwards. The marginal rate of substitution
reflects the maximum amount of good Y the consumer would be willing to
give up in order to obtain an additional unit of X. The consumer would be
happy to give less Y since it would place the consumer above U1 at a
higher utility level. However, the consumer would not be willing to give up
more Y since it would place the consumer below U1 at a lower level of
utility. The MRS can be portrayed as the slope of the indifference curve.
This would show the amount of good Y given up per unit of X. The slope
between points A and B is Y0/X, between B and C is Y1/X, and between C
and D is Y2/X . Notice that since Y is declining, the slope is getting flatter
and flatter. For very small increases in good X, the slope of the indifference
curve becomes the slope of the tangent to it. We general define MRS as
the absolute slope of the tangent to an indifference curve. In Figure 4 the
tangent gets flatter and flatter as we move from A to B, B to C and C to D.
To sum up, the slope of the indifference curve represents the value to the
consumer of the additional unit of X in terms of the amount of Y they are
willing to give up. As we move from left to right along an indifference curve,
the slope gets flatter reflecting a decrease in the value of the additional unit
of good X. This theory of the consumer has given us many tools.
Indifference curves map or graphically represent consumer preferences.
The properties of these indifference curves reflect the four consumer
preference assumptions. The slope of an indifference curve, the MRS,
reflects the value placed on the additional unit of a good in terms of the
other goods the consumer would be willing to give up. These concepts will
be used extensively in the next few chapters. Figure 4 Good X Good Y U1
ABCD Page 6 The Budget Constraint Using these families of
24
indifference curves, we can model consumer preferences showing how the
consumer would rank commodity bundles according to the utility each
bundle provides. Having a map of consumer preferences, however, is not
enough to explain the choices consumers make. Choices are also a
function of our constraints, namely the consumers income and the price of
goods. In order to simplify the presentation, we assume that income is
exhausted over the consumer purchases. This means we are excluding
savings. The budget constraint would then say that income is equal to the
sum of consumer expenditures. Expenditures on a particular good is the
product of the amount of the good purchased times its price. We can then
write the budget constraint as: I = Px*X +Py*Y. In this equation the
consumer has expended all income, I, across both goods X and Y, where
Px and Py are the prices of X and Y, respectively. To graph this budget
constraint into commodity space requires rewriting the budget constraint in
terms of good Y, the variable on the vertical axis. Using simple algebra, we
can rearrange terms to produce the following budget line: Y = I/Py - Px/Py *
X. In the equation of a line (Y = mX + b), the slope is given by m, the
number multiplied with X, and the Y intercept is given as b. Referring to the
budget line, its slope is Px/Py and the Y intercept is I/Py. Figure 5
illustrates these characteristics of the budget line. Good Y Good X Px/ Py
I/Py I/Px Figure 5 Page 7 The budget line divides commodity space into
two. The commodity bundles which are affordable are shown as being on
or below the line. Income is completely spent for those bundles on the line.
We exclude the commodity bundles below the budget line since all income
is not being spent. The commodity bundles above and to the right of the
budget line are beyond the reach of the consumer, given their income and
the prices of goods X and Y. Note the intercepts. The Y intercept
represents a commodity bundle that contains only good Y. This is the
amount of good Y that the consumer could purchase if they spent their
entire income on good Y. The same is true for good Xs intercept. I/Px is
the maximum amount of good X that this consumer can purchase, given
their income and the two goods prices. The budget line plays two
important roles. The first is determined by the level of income. The more
income the consumer has to spend the greater number of the commodity
25
bundles that are affordable. An increase in income would be portrayed as a
parallel shift outwards of the budget line. It is a parallel shift because we
are holding the prices of goods X and Y constant, therefore there would be
no change in the lines slope. The second role for the budget line is to act
as a price line. A price line demonstrates the relative price of two goods. A
relative price is the price of one good in terms of another. For example, let
Pb = $0.50/banana be the price of bananas, and Po = $1.00/orange the
price of oranges. The relative price of a banana in terms of oranges is
orange. If the consumer buys a banana then they necessarily forgo
purchasing one half orange. If we take the ratio of the bananas price to the
price of an orange, we get: Thus the slope of the budget line shows the
relative price of good X in terms of good Y. If the price of good X increases,
then the amount of good Y that is foregone increases. There is an increase
in the relative price of good X. Since we are holding income and the price
of good Y constant, this increase in good Xs price results in a decrease of
the budget lines X intercept. The line swivels inward. Relative price is an
important tool. It shows how much of one good that the consumer must
necessarily give up in order to obtain more of another. The flatter the
budget line, the less costly the good on the horizontal axis in terms of the
good on the vertical axis. The steeper the budget line, the more costly the
good. Note that relative price is shown solely as the budget lines slope.
The distance from the origin does not reflect prices. Consumer Choice Pb
Po $0.50/banana $1.00/orange 1 2 oranges banana . Page 8 The
consumers objective is to allocate income between goods X and Y so that
they achieve the greatest amount of utility, i.e., to reach the highest
indifference curve possible within their budget constraint. They must
choose that commodity bundle on their budget line which has the highest
level of utility. Utility levels, as we have seen, are measured by indifference
curves; therefore the consumer tries to reach the highest feasible
indifference curve. In Figure 6, we examine several possible choices for a
consumer. Should they choose commodity bundle B? It is on their budget
line and so exhausts income. But does B provide the highest level of
utility? The answer is no because there are other affordable commodity
bundles within the budget constraint that lie on a higher indifference curve.
26
The commodity bundle which maximizes utility is commodity bundle A. All
other feasible commodity bundles lie below As indifference curve. The
utility maximizing commodity bundle is determined by the tangency of the
indifference curve to the budget line. At the point of tangency, the slope of
the indifference curve is equal to the slope of the budget line. In other
words, the marginal rate of substitution is equal to the relative price of X in
terms of Y. This means that the amount of good Y that the consumer must
give up for another unit of good X is equal to the amount they are willing to
give up. Utility Maximization: MRS = Px / Py. Recall that MRS can be
interpreted as the value to the consumer of the additional unit of good X.
The relative price of good X represents the consumers opportunity cost.
Therefore, utility maximization is achieved when the marginal benefit of
consuming more good X is equal to its marginal cost in terms of Y.
Returning to Figure 6, commodity bundle B is not utility maximizing. Note
that the tangent to U0 at B is steeper than the budget lines slope. In other
words, MRSb > Px/Py. This says that the value to the consumer of the
additional unit of X is greater than its costs. Utility rises by Good Y Good X
I/Py I/Px Figure 6 B A U0 U1 MRSb Page 9 consuming more good X at
the expense of less Y. This would move the consumer down to the right
along the budget line. Utility is again maximized at commodity bundle A.

27
 RESEARCH METHODOLOGY

The task of data collection begins after a problem has been defined
and research design/plan chalked out. While deciding about the
method data collection, the research should keep in mind two types of
data viz, primary and secondary.

The primary data are those which are collected fresh and for the first
time and thus happen to be original in character. The secondary data
are those which have already been collected by someone else and
which have already been passed through the statistical process. The
methods of collecting are to be originally collected, while in case of
secondary data the nature of data collection work is merely of
compilation

28
PRIMARY SOURCE- A structured questionnaire to be prepared and
data will collected from respondents. The sampling technique used in
this survey is convenience sampling.

SECONDARY SOURCE- Secondary data means the data already

available, which has already been collected and analyzed by someone
else. It includes the published data available in the form of:

Various publications
Journals
Books, magazines, Newspapers
Internet
SAMPLE SIZE

The sample size of respondents will be 30. Convenience sampling

method will used.

Tools used for data collection:

Data was collected by using a self-constructed questionnaire from 30
respondents.

TOOLS USED IN SURVEY

The various tools used in conducting the survey are as follow:

Questionnaire
Personal Interview

INTERVIEW METHOD: The interview method of collecting

data involves presentation of oral verbal stimuli and reply in terms

29
 of oral verbal responses. Personal interview method is the face to
face contact to the other preson.This method is particularly
suitable for intensive investigation.

QUESTIONNAIRE METHOD: This method of data collection

is quite popular in case of big queries. In this method a
questionnaire is presented to a concerned person with a request to
give answers of the questions. The general form of questionnaire
can be either structured or unstructured. Structured questionnaires
are those in which there are definite, concrete and predetermined
questions. When these characteristics are not present in the
questionnaires, it is termed as unstructured. The questions
included can be in the form of closed ended which involves choice
of answers or it can be open ended questions which asks for the
respondents personal opinions and views.

Overview:

Research Type: Objective

Data collection: Primary source of data (questionnaire),

Secondary

Data (internet, books, newspaper and

various journals)

Research approach: Survey method

Research instrument: Questionnaire

Research: Semi-Structured

Size: 30

Research Sampling: Convenient sampling

Tools of data analysis: SPSS and Microsoft Excel

30
DATA ANALYSIS AND INTERPRETATION

31
The purpose of the questionnaire was to identify the usage and buying
pattern of the consumers of toilet soap. For this, questionnaires were
administered to 30 respondents. The analysis is done on the basis of
the answers given by the respondents to the questionnaire.

1. Gender wise classification

The respondents group includes males and females. 57% of the
respondents are females and 43 % are males. There is high proportion
of males.

60

50

40

30 male
female

20

10

0
frequecy percentage

The following bar graph will illustrate the gender wise classification.

Gender Frequency Percentage

Female 13 43
Male 17 57
Total 30 100

32
 2. Marital Status

The respondents are classified into married and single to see any
difference in the usage pattern and the buying behavior. The
respondents are 90% single and the rest 10% are married which shows
a comparable distribution for the analysis. The data analyzed is shown
in the table below.

Marital Status Frequency Percentage

Single 27 90
Married 3 10
Total 30 100

Hence majority of the user base lies in the single youth but the married
people also forms a comparable share in the bar graph.

100

90

80

70

60

50 single
married
40

30

20

10

0
frequecy percentage

The following bar graph will illustrate the classification based on marital
status

3. Age group

33
This consists of classification of respondents according to age group.
The following pie chart illustrates this.
Age Group Frequency Percentage
15-25 14 47
26-35 9 30
36-45 6 20
Above 45 1 3
Total 30 100

frequecy

15-25
26-35
36-45
above 45

Fig 1: Classification according to age

group

The age groups of the respondents are divided into certain range and
the range is 10. The ages are grouped as 15 to 25, 26 -35, 36-45 and
above 45. Here majority of the respondents belong to the age group of

34
15 to 25 and is about 47%. 30% of them are from the age group of 26
to 35.

4. Occupation
The respondents group includes 3 categories of people- employees,
professionals, self-employed and others. The student group forms the
chunk of the user base as per the research with 44%. Employed form 3
7% of the population. The data in table format is shown below.
Frequenc Percentag
Category y e

Employed 11 37
Self-
Employed 4 13
Profession
al 0 0
Student 13 44
Others 2 6
Total 30 100

The analyzed data is illustrated in the following bar graph

35
 50

45

40

35

30

25 frequency
percentage
20

15

10

0
employed self employed profesional student other

The following bar graph will illustrate the Classification based on

occupation.

5. Buying pattern
The buying pattern has been divided as per the frequency and includes
, once in 15 days, once in month, once in 2 months

36
 frequency
once in 15 days 4
once in month 15
once in 2 months 11

The percentage of respondents who buy soap once in a month forms

the maximum. This is illustrated in the bar graph shown below.

frequency
16

14

12

10
frequency
8

0
once in 15 days once in month once in 2 months

The following bar graph will illustrate the based on usage pattern.

6. Using Specific Brand

37
Frequency of the people using a specific brand for a considerable
period of time constitutes 34% of the population. The remaining doesnt
have a specific brand preference. This is illustrated in the following bar
graph. From the bar graph we can find that more than half of the
respondents are those who do not use a specific brand for a
considerable period of time. This shows that brand loyalty among soap
buyers in city is very low.

Frequency
25

20

15 Frequency

10

0
Yes No

The following bar graph will illustrate the specific brand preference

38
 7. Category of soap
Popular category soaps forms the most popular among the
respondents. More than 50% of the customers favors popular category.
It includes brands like lux, pears, cinthol, dettol etc. The following bar
graph will illustrate this.

Frequency
Economic
Frequency
Premium

Popular

0 2 4 6 8 10 12 14 16 18

The following bar graph will illustrate the Category preference.

8. Brand Preference
The most popular soap brand among the customers is Lux. Pears is
the second popular soap among the respondents. The preference is
shown in the bar diagram shown below.

39
 frequency
12

10

frequency
6

The following bar graph will illustrate the Brand preference.

9. Preferred Packet size

Out of the sample surveyed majority of the people purchase 75 gm
packets. The second position is for 125 gm packets. This is illustrated
in the bar graph shown below.

Frequency
15

10 Frequency

0
75 gm 100 gm 125 gm Others

The following bar graph will illustrate the Packet size preference.

10. Buying behavior when brand is not found

40
When a brand is not available in the store the possible events from the
consumer side can be- select another brand, go to another shop for
purchasing that particular brand or try the same brand to buy that
particular brand. The buying behavior is illustrated in the bar graph
shown below.

frequency
9
8
7
6
5
4
3
2
1 frequency
0

10. Purchase decision influence

Purchase decision also plays an important role in brand preference.

Different categories of people effect consumer decision .A person make
sole decision among others while friend contribute second highest
influence in decision while children is least

41
 frequency
12
10
8
6
4
2
frequency
0

11. Store preference

From the survey its found out that majority of the people prefer to buy
soaps from supermarkets. This may be due to the popping up of large
number of supermarkets across the city. Thus it is essential for soap
companies to formulate strategies focused on customers who buy the
product from supermarkets. This is illustrated in the bar graph shown
below.

42
 frequecy
25

20

15

10 frequecy
5

12. Product characteristics

Consumer sees a variety of different attributes in product .for different

consumers there are different characteristics which they favor in a
product. Respondents rank the different attributes on scale of 5.
Different attributes were Product Characteristics (Quality, Packaging,
Fragrance, Ingredients, Dirt removal, etc) which was highest rated
because if product delivers its value then consumer buy it, Price and
Convenience of place of purchase (Super Market, Retail Shop,
Groceries etc) are on the equal scale ,Promotional Activities(TV/Radio
advertisement, Free Issues, Money-Offs, Discount, etc),
Influence/Suggestion of a person(Family Member, Friend, etc),
Suitability to the skin type plays the least role.

43
 attributes
6

4
attributes
3

0
Product Characteristics (Quality, Packaging, Fragrance, Ingredients, Dirt removal, etc)

14. Factors to be considered in soaps for ranking

From the survey it is found that quality of soap is the paramount criteria
while selecting soap. Attractive packaging of the product is another
criterion along with the fragrance of the soap. Size is another criterion
which is rated high but is found to have less rating than skin protection.

This shows a shift in consumer taste from being price conscious to look
conscious. This data shows that customers tend to have a liking for
quality products and for famous brands. The various factors are ranked
from 1 to 7. The highest rank, i.e. 7 is for quality and the last rank, i.e. 1
is for packaging. This is illustrated in the following diagram.

44
 Rank

Rank

15 Promotional activities
Promotional activities of the soaps are governed by different factors.
TV advertisement, hoardings, newspapers are the major factor that
influences purchase decision. Majority of the respondents subscribed
these as the major factor. This is illustrated in the bar graph given
below. Respondents has to select top three promotional activities
among different activities

45
 promtional activities
10
9
8
7
6
5
4 promtional activities
3
2
1
0

CHI-SQUARE Test

4.2.1 Age group and specific brand preference

Age group Using specific brand Total

Yes No
15-25 0 1 1

26-35 4 5 9

36-45 5 7 12

Above 45 1 7 8

Total 10 20 30

Null Hypothesis (H0):

The brand preference is independent of different age groups.
Chi-square test:

46
 Observed Value Expected Value (Oij Eij )2/Eij
0 0.333 0.333
1 0.666 0.1675
4 3 0.333
5 6 0.1666
5 4 0.25
7 8 0.125
1 2.666 1.0410
7 5.333 0.5210

df= (c-1)(r-1)= (2-1)(4-1)=3

2 = (Oij Eij )2/Eij [14] = 2.937

The table value of 2 for 3 degree of freedom at 5 per cent level of

significance is 7.815. Since the calculated value of 2 is much less
than the table value the null hypothesis is accepted.

4.2.2 Age group and usage

Age group Alternate Once a day Twice a day Others total

days
15-25 0 0 1 0 1

26-35 0 1 7 1 9

36-45 0 6 8 0 14

Above 45 0 4 1 1 6

Total 0 11 17 2 30

Null hypothesis (H0):

Soap usage pattern is independent of different age groups.

47
Chi-square test:
2 = (Oij Eij )2/Eij = 8.488

Degree of freedom is 9 and level of significance is 0.05. The table

value of 2 for 9 degree of freedom at 5 per cent level of significance is
16.919. Since the calculated value of 2 is much less than the table
value the null hypothesis is accepted.

48
 Findings
1. It is found that the people in the age group of 15-25 form the major
chunk of customers. They form about 47% of the customers and
most of them are students
2. More than half of the customers buy soap once in a month.
3. Only 10% respondents use specific brand for a considerable period
of time.
4. The popular category soaps forms the most selling category of
soaps.
5. 75 g was found to be the most popular volume among customers.
6. Supermarkets are preferred by majority of the respondents to buy
soaps.
7. The experience from the product in terms of its attractive
packaging, value for money etc has a higher say in purchase
decision.
8. For a customer the quality of the soap is the paramount criteria
while selecting soap. Brand name of the product is another criterion
along with the fragrance of the soap.

Suggestions
49
For soap:
Reduce burning sensation
Adopt aggressive marketing strategy for toilet soaps.
Smaller size of toilet soaps to enable the travelling people to be
brand loyal
More attractive packaging should be adopt e.g.: chinthol come
with new packaging and thus higher there sales

For sales:
Attractive Packaging
Incentive to dealers/ distributors
TV commercials telecasted especially during prime time
Advertisements through Radio channels during morning and
evening
Outdoor media: billboards at railway stations, buses etc

Since advertising has a critical role in purchasing decision in store

promotions, offers and discounts, media advertisements etc for toilet
brands should be increased. Efforts should be made to improve the
purchasing volume of the customers. For that discounts can be given
for multi packet purchase. Special measures must be taken to woo the
customers.

Conclusion
The average consumer has become sensitive to value offered by
brands, either in terms of price or in terms of the intrinsic benefit
offered at a higher price point. The emergence of several discount
brands and higher-priced improved offerings can be seen in the soap

50
category. Lux is an example of how the brand initiated the strategy of
offering several variants (like almond) in the lower segment when such
variants have been associated with higher segments in the category.

Apart from expecting value, the consumer is also caught in generic

competition which may force him/her to downgrade in a few categories
while testing other categories. For instance, the consumer, in order to
balance her household budgets, may alternate between a good brand
of soap and a low-priced soap [8].

Balancing functional benefits, symbolic appeals and timing the right

combination of good functional attributes and symbolic brand
orientation (which can be beyond advertising like an event associated
with beauty care/hair care) within a price band is likely to be a
conceptual approach to get over the complexities of the FMCG
markets.

QUESTIONNAIRE

PERSONAL INFORMATION

51
 1. NAME

2. GENDER
MALE

FEMALE

3. MARTIAL STATUS
Married

Unmarried

4. Age Group
15-25

25-35

35-45

Above 45

5. Occupation
Employed

Self-Employed

52
 Professional

Student

Other

About the soaps

6. How often do you buy bath soaps?

Once in 15 days

Once in month

Once in 2 months

7. Do you use a specific soap brand?

yes

no

8. Which category of soap do you generally use?

Economic

Premium

53
 Popular

9. What is your brand preference?

Lux

Lifebuoy

Dettol

chintol

pears

Johnson and Johnson

Other:

10. What is the Preferred Packet size you purchase?

75gm

100gm

125gm

others

11. If you do not get your brand in a shop then will you?

54
 Go to another shop

Try the same type of brand

Try another brand

12. Who influence/suggest you to make the purchasing

decision of the brand?
Children

Friends

Yourself

Husband

Presenter/Sales Person Other

13. From where you like to buy the soap?

Super Markets

Premium Groceries

Retails Pharmacy

Fancy Shops

14. Rank the following attributes you consider while buying?

55
 1 2 3 4 5
Product Characteristics (Quality, Packaging,
Fragrance, Ingredients, Dirt removal, etc)

Price

Convenience of place of purchase (Super Market,

Retail Shop, Groceries etc)

Promotional Activities(TV/Radio advertisement,

Free Issues, Money-Offs, Discount, etc)

Influence/Suggestion of a person(Family Member,

Friend, etc)

Suitability to the skin type

15. What are the factors to be considered in soaps for

purchasing
(Please indicate the rank using only number 1 to 7, 1 least and 7 th
highest)
Attractive packaging

Fragrance/Odor /Smell

Size/Weight

Ingredients

Moisturizing effect

Lathering/Foaming effect

Softness

56
 Dirt removal /Cleansing

Skin protection

16. What are the top 3 most influenced promotional activities to

soap?
TV Advertisement

Radio Advertisement

POSM (Posters, Danglers, etc

Hoardings

Newspaper/Magazine

Discounts

Free Banded issues (ex: Buy 2 get 1 free, etc)

LIMITATIONS
Time was one of the main constraint of this study
Arrangement of the data was difficult
Secondary data was vague
Observation on the secondary data was difficult due to
discrepancy in the data

57
 BIBLIOGRAPHY
WEBSITES

www.slideshare.net/.../study-of-consumer-behaviour-and-pre-related-to
https://www.scribd.com/.../A-Study-of-Consumer-Perception-Towards-...
iosrjournals.org/iosr-jbm/papers/Vol16-issue9/...4/D016941729.pdf

https://www.researchgate.net/.../256839769_Customers'_Perception_
toward...

BOOKS

58
 Marketing Management: Global Perspective, Indian Context
Pocket Marketer
MARKETING MANAGEMENT - Page 89
M. GOVINDARAJAN - 2007 -

Business Today - Volume 5, Issues 9-16 - Page 16

Business India - Issues 283-290 - Page 116

59