To Study the Consumer Awareness & Perception Towards Packet Chips Analysis

Executive Summary

The primary objective of our research is “To Study Consumer Awareness and Perception towards Packet Chips”. In order to find this, the research objective was further sub-divided in the following secondary objectives. To study whether the consumers are aware about the packet chips or not. To check the awareness level about the packet chips among the consumers. To find out the factors which the consumers think are important while they are buying snacks.

To find out how packet chips are rated on the factors which the consumers think are important while selecting a snack. Firstly, an Exploratory Research was carried out to provide an insight and to understand the problem more precisely. There were two methods used in the Exploratory Research.In-depth Interviews with the Store keepers in and around Manipal. Focus Group Discussion with the consumers. The information obtained from the in-depth interviews and focus group discussions were used in further research and in particular it was used in the design of the questionnaire.

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Based on the findings of exploratory research, a questionnaire was designed and a Pilot Survey was conducted. Pilot Survey was conducted to detect the weakness in the data collection instrument (i. e. the Questionnaire in this case) and also to provide proxy data for selection of a probability sample. Based on the pilot survey results, the questionnaire was refined and the final Questionnaire for carrying out the actual research was designed. Analysis was done based on the data obtained from Pilot Survey using SPSS and the results obtained were also used in estimating the sample size for the actual research.

The pilot survey would then be followed by the actual research which would involve collecting primary data from the respondents through Questionnaire. The data will be analyzed using Excel and SPSS tools to study the consumer awareness and perception of consumers towards packet chips.

The Research objective is to study the consumer awareness and perception towards packet chips. Packet Chips comes under the Snack Food Category. Snack Food refers to the food eaten in between the meals. The various types of snack food that are available include Biscuits, Namkeen Packets, Packet Chips, French Fries, Maggi Noodles, Fruits, etc. Hence, our objective is to first identify what kind of different snacks people generally have in between the meals. After identifying this, our aim is to analyze whether they are aware about availability of packet chips as a snack item and to check their awareness level about the packet chips.

In order to find out the perception of the consumers towards packet chips, we will first find out as to what factors the consumers consider when they purchase snack items in general. Then we will try to analyze how packet chips are rated by different consumers on these factors. Hence we will get an perception of the consumers about the packet chips.

Industry Analysis

According to a study done by McKinsey & Co in 2009, the Indian Food Market is expected to grow from US$ 155 billion in 2005 to US$ 355 billion in 2025, thus increasing two folds with an annual compounded growth rate of 4. % 1 One of the fastest growing segments within the Food Market is Snack Food Industry, which is growing at a rate 20 percent higher than the regular food market in India. The average per capita snack food consumption in India is 500 grams with the ratio of consumption of Snacks between urban and rural population being 10:1 (the urban Indian consumers eat readymade snacks ten times more than the rural Indian Consumers). The Snack Food Industry in India is fragmented and the market is highly diversified with over 1000 different varieties of snack products such as Potato Chips, French Fries, Biscuits, Fruits, etc.

The Indian Snacks market was estimated to be worth US$ 3 billion as on 2009. 3 The Indian Snack Industry can be divided into 2 segments: ? Organized Segment: This segment, comprising of the branded snack items, was worth US $ 1. 34 billion as on 2009 and is growing at an annual rate of 15-20%. This sector includes items like packet chips, biscuits, noodles, French fries, etc. The major players in this sector are Frito Lay, Con Agra, Dabur, HLL, Parle, ITC, Haldirams, Nestle, Bikaner, Britannia and Cadbury. In the branded snacks market, it was observed that chocolate, potato chips and nuts & seeds were among the fastest growing snacks.

The following graph illustrates the annual growth rate of the various branded snack food items over the past few years and the expected growth over the period 2009-20134. 1 2 Report by US Department of Agriculture. Report by McKinsey & Co done in 2009 3 Report by McKinsey & Co done in 2009 4 Report “Brief of Snack Food Market in India 2008” by Global Agriculture Information Network

Unorganized Segment

This includes the unbranded items like the Indian Chaat items, potato chips (like Hot chips), Popcorn, South Indian Items (Dosa/Uttapam), etc. This segment was worth US$ 1. 6 billion as on 2009 and is growing at an annual growth rate of 7-8% per year. The major growth drivers for the Indian Snack Food Industry are as follows. Increase in the consumption of ready to cook or ready to eat food products. Changing societal trends. Increase in number of nuclear families. People looking for more convenience and pleasure food. Changing Lifestyles of the people. Thus snack food is slowly becoming a daily necessity for people and with a growing population and rising per capita income; the demand of snack food is continuously increasing.

Definition of Constructs ? Consumer

The consumers for packet chips include population of different age groups as it is a product that is consumed by children, teenagers, middle aged people and old aged people. Hence the word consumer for this research represents people in all the specified age groups (5-14, 15-24, 25-40, Greater than 40).

Awareness means the state of being conscious of particular objects. Here awareness is used to indicate whether packet chips as a snack is known to people or not. Perception: It signifies the perception of consumers towards packet chips i. . how they perceive packet chips. Different consumers may perceive it differently. For ex. Some may perceive it as tasty while some others may perceive it as a snack for time pass. ? Packet Chips: Packet Chips include Potato Chips, Banana Chips and Corn Chips. The Branded market for Banana Chips and Corn Chips is almost negligible when compared to the branded market for Potato Chips. Hence they have been classified into the unbranded chips. Research Methodology Firstly, an Exploratory Research was carried out to provide an insight and to understand the problem more precisely.

There were two methods used in the Exploratory Research. In-depth Interviews with the Store keepers in and around Manipal. Focus Group Discussion with the consumers. The information obtained from the in-depth interviews and focus group discussions were used in further research and in particular it was used in the design of the questionnaire. Based on the findings of exploratory research, a questionnaire was designed and a Pilot Survey was conducted. Pilot Survey was conducted to detect the weakness in the data collection instrument (i. e. he Questionnaire in this case) and also to provide proxy data for selection of a probability sample. 6|Page Based on the pilot survey results, the questionnaire was refined and the final Questionnaire for carrying out the actual research was designed. The results from Pilot Survey were also used in estimating the sample size for the actual research. The pilot survey would be followed by the actual research which would involve collecting primary data from the respondents through Questionnaire. The data will then be used to analyze the consumer awareness and perception of consumers towards packet chips.

Scope The data that would be obtained through the primary research will be limited to the responses given by the residents and students in and around the city of Manipal. Exploratory Research The Exploratory Research mainly comprised of two methods i. e. In-depth interviews with the Store keepers and Focus Group Discussions with the consumers. In-Depth Interviews Four in-depth interviews were conducted with vendors in Manipal. One shop owner was interviewed each at Tiger circle, Kamath circle, store outside MIT College and store in TAPMI campus.

This was done in order to find out the how these shops sell packet chips and to analyze the behavior of customers when they come to buy chips and other snacks. The various factors which came from the interview were following. These types of shop carry different types of snacks such as biscuits, namkeen, samosa, puffs, packet chips, kurkure, chocolates etc. Packet Chips are generally placed outside the shop so that it can catch the eye of a consumer When he buys a packet of chips, he only picks the packet and makes the payment. The Store keeper has no influence on his buying behavior.

Sometimes a buyer comes for purchasing some other items but since chips catches their attention he tempts to buy it. If any particular flavor is not available the consumer ends up buying the alternate flavors. So the consumers are generally not flavor loyalled. Youngsters and middle aged persons buy packs of Rs. 10-20 whereas if children are the end consumers, then Rs. 5 pack is mostly bought. Old aged people generally preferred unbranded wafers over branded ones. Focus Group Discussions Six FGDs were conducted with the target consumers of chips and snacks. Two FGDs were conducted each at TAPMI, Food court and Kamath circle.

There were 8-10 people in each discussion and it was done to find out the buying behavior of consumers towards packet chips and factors affecting those decisions. The objective included finding out the different types of snacks consumer prefer and timing of the day when they like to have snacks. The following were the major findings: ? The main factors which came out as important were taste, price, mood, availability, quality, varieties, packaging, hunger satisfying, brand, health and nutrition, visibility in store ,word of mouth, advertisements, time of consumption and readiness to eat.

Buying preferences were found to be also affected by occasions like picnic, movie, party etc. Display is an important component and sometimes on noticing chips at shops they feel like buying the chips. Advertisements do have an affect over the purchase decision as when they see the chips on the shelves they like to try it because they liked the advertisement. While having snacks in evening consumers have options of packed snacks and cooked food like dosa, chats and other fast food, whereas in night they mostly rely on packed food and noodles. ? Chocolate came out as a substitute for snacks particularly popular among girls.

Pilot Survey

Pilot Survey was conducted to detect the weakness in the Questionnaire designed and also to estimate the sample size for the final research to be carried out. A survey of 30 respondents was done as a part of pilot testing. The sampling technique that was used during the Pilot Survey was Convenience Sampling which involved picking the set of respondents which were convenient to use. Questionnaire Design Based on the factors and findings obtained in the exploratory research (In-depth Interviews and Focus Group Discussions), a Questionnaire was designed which was used as the Data Collection Instrument for the Pilot Survey.

Results from the Pilot Study

Regression Analysis was carried out to find the most important factor that the consumers consider while selecting a snack. The dependent variable for the regression analysis was the average weekly expense which the consumers make on the snacks and the independent variables where the various factors considered while buying a snack. These factors were specified in the Questionnaire (Refer Question 4) and the respondents were asked to rate each of the factor on a scale of 1 to 5, where “1” indicates “Very High” and “5” indicates “Very Low”.

From the below table we see that TASTE was considered as the most important factor by the respondents.

The number of factors specified in the Questionnaire was 15 and while getting the questionnaires filled, it was observed that rating 15 factors was difficult for the respondents. Hence a Factor Analysis was carried out to check if the number of factors could be reduced. The following were the components identified after doing the Factor Analysis.

Extraction Method: principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. a. Rotation converged in 20 iterations. As seen from the above table the number of factors could be reduced into 6 components. However the number of factors was not reduced to 6 in the final Questionnaire. Although visibility in stores, packaging, advertising and availability were clubbed into single component, we felt that the factors have to be specified separately in the questionnaire as each specifies a different attribute. Component 2 puts Quality and Hygiene into one component.

Since both are highly corelated and hygiene is a part of quality of the snack, these two factors were clubbed and named as Quality. Similarly Mood and Time of Consumption were clubbed into single factor and was named as Mood.

Another important observation was that the factor “Health and Nutritious” was not classified into any of the components. The result of regression analysis also showed that this was the least important factor while buying a snack. This means that people in India are still not conscious about the snacks they eat and give a lot of other factors such as Taste.

Hence this factor was excluded from the Questionnaire.  The Conclusive Research is done to get the information that is required of the research. The research process will be formal and structured and will be done by selecting large sample size. The data obtained from this can be directly used in decision making. The conclusive research that will be carried will be basically a Primary Research. Questionnaire Design The Questionnaire that was used in the Pilot Survey was refined based on the data analyzed from the pilot surveys and the responses obtained.

The following were the changes that were made to the Questionnaire: ? Question Numbers 2, 3 and 7 specify different types of snacks which people consume. All the items given in the options do not carry a Brand Name except the snack Namkeens. In the Questionnaire Namkeens have been specified as Haldirams Namkeen in which Haldiram is the brand name and not a type of snack. Hence the appropriate change was made and this option was replaced by “Namkeen Packets (Ex. Haldirams)”. ? Based on the results obtained from Factor Analysis, the number of factors in the Questions 4 and 5 were reduced to 12 from 15.

The factors Quality and Hygiene were clubbed into one factor “Quality”. The factors “Mood and Time of Consumption” were clubbed into one Factor by name “Mood”. Factor by name “Healthy & Nutritious” was removed from the options. ? The following question was removed as it gives the overall rating of the various brands of chips, whereas the primary objective of the research is to obtain the data only at the product level. 12 | P a g e – Please rate the following brands of packet chips on a scale of 1 to 5 where 1 is Very High and 5 is Very Low. Brand Lays Uncle Chips Bingo Haldiram Parle Pringles Unbranded

Very High High Moderate Low Very Low The Appendix A gives the Final Questionnaire that will be used for conducting the conclusive research and collecting the actual data that will be used in decision making. Sample Size Calculation From the Regression Analysis done on the data obtained from the pilot survey, it was analyzed that Taste is the most important factor which the consumers consider while they are purchasing a snack. Hence the standard deviation and the Standard Error of this variable will be used in estimating the Sample Size for the final research to be carried out.

The mode of collecting the data will be through a Survey that will be done in the city of Manipal using the Questionnaire and Sampling Method described earlier. Disguise Game Disguise Game will serve as an alternative method to collect the data. In this method, the consumers will not be directly surveyed. The data collection will be done in a disguised manner. The consumers will be asked to play the disguised game and the data will be collected by the way the consumer plays the game. The game will be designed in such a way that the data collected can be used to carry out the primary research.

One of the Games that will be used is “Tampi Commodity Exchange. The game will be played in the following way: ? The consumer will be showed a trading screen in which the various commodities that are traded in the market will be shown. Here the commodities that will be use are Chocolates, Packet Chips, Namkeen, Noodles, Chaat items and Biscuits. Appendix C gives the Screen Shot of the Screen.  The consumer is then asked to trade in the commodity market by selecting one commodity which he wants to buy and one commodity which he wants to sell.

While selecting a particular commodity either to buy or to sell, a trader must specify the criteria on which his selection is based. All these commodities will be traded in the market in quantity of 100 grams / unit of commodity. Hence the trader is asked to specify the price at which he is willing to buy or sell the commodity in the market.

Then based on the price at which he bids or asks, points will be given to the trader as a reward for playing the game. These points will be rewarded based on the difference between the actual price of that commodity in the market for 100 grams and the price which the trader bids or asks. This trading screen will be linked to an Excel in which the data that is given as an input on the screen will be directly saved in an Excel Sheet This game will serve the purpose in the following ways: ? First the factors which they consider are important while they buy or sell a particular commodity (i. e. a snack food item) will be collected. This data can later be used to identify how much percentage of the population considers each of the factors to be important. Ex. 35% of the consumers surveyed want to buy packet chips because they feel that it tastes good. The price of the commodity given by the traders can be used to identify two things: a) To check the awareness level. Generally a snack may not be actually available in the packet size of 100 grams. So when he quotes the price, we can check how aware he is about the price of the product. For Ex. Rs. 10-12 of Maggi Noodles packet contains 85 grams. So if a trader quotes an price of Rs. 13-16 for a 100 gram packet, then we can say that his awareness level about the product is high b) It will also measure how much the consumer is willing to pay for the snack. Data Analysis The data will be cleaned and used for analysis.

For the data analysis, SPSS (Statistical Package for Social Sciences) and Excel will be used. The following are some of the major analyses that will be used for this purpose. Simple Tabulation will be used for Question No. 1 to check whether the consumers are aware about the packet chips or not.

Cross Tabulation will be done for the questions 8, 9, 18 to check the level of consumer awareness towards packet chips. Cross Tabulation will be used for Question No. 2 and Question No. 20 to identify what types of snacks are preferred by consumers of different age groups . Children, Teenagers & Youngsters, Middle-Aged People and Old Aged People. ? Cross Tabulation will be done to identify how much each age group spends on snacks in a week in general and out of it how much they spend on packet chips in a week. With this we will get the data as to which consumer segment spends the most on the packet chips. This analysis will involve questions 6,7 and 20. ? Regression Analysis and Correlation Analysis will be done for the Question No. 4 to identify the factors which are co-related and also to find the most important factors among the given factors.

The dependent variable in this case would be the average weekly expenses of the consumers and independent variables will be factors. ? Factor Analysis will be done to reduce the number of factors specified in Question No. 4 into various components and these components will be named accordingly. These components contain the factors that are co-related to each other. ? Discriminant Analysis Based Perceptual Mapping will be done for the Question No. 4 and Question No. 5 to find out the consumer perception of the packet chips vis-a-vis snacks in general.

Cluster Analysis will be done to segment the customers based on their behavioral and demographic profile. It will involve the questions 4, 5, 20, 21. Simple/Cross Tabulation will be done for the questions 10, 11, 12, 13, 14, 15, 16 and 17 to analyze the buying behavior of the consumers towards packet chips.

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