CHAPTER TWO

RESEARCH METHODOLOGY AND

STATISTICAL TOOLS APPLIED

2.1 An Overview of FMGC sector

2.2 Research Methodology

2.2.1 Research Design

2.2.2 Universe of the Study

2.2.3 Survey Population

2.2.4 Sampling Design

2.2.5 Data Collection

2.2.6 Construction of Data Construction Instruments

2.2.7 Validity and Reliability

2.2.8 Analysis Pattern

Variables of the Study

Content Analysis

Statistical Tools Used Analysis

2.1 OVERVIEW OF FMCG SECTOR

FMCG is the acronym of Fast Moving Consumer Goods which is also known as Consumer

Packaged Goods (CPG). Fast moving consumer goods are products that have a quick

turnover, and relatively low cost. These are all consumable items (other than

groceries/pulses) that one needs to buy at regular intervals. These are items which are used

daily, and so have a quick rate of consumption, and a high return. FMCG generally include

a wide range of often purchased consumer products such as toiletries, soap, cosmetics,

teeth cleaning products, shaving products and detergents. The purchasers usually put less

thought into the purchase of FMCG than they do for other durable products such as

electronic items. In comparison with other industries such as automobiles, computers, and

airlines, FMCG business has a steady rate of growth, for it does not suffer from huge

recession and layoffs every time the economy starts to dip. In FMCG business absolute

profit made on the products is relatively small. Since they generally sell in large numbers,

the overall profit on such products can be huge.

FMCG can broadly be categorized into three segments which are:

Household items: like Household cleaners - Dish/utensil cleaners, floor cleaners, toilet

cleaners, air fresheners, mosquito repellents, soaps, detergents, household accessories,

etc.; Fabric wash - laundry soaps and synthetic detergents.

Personal care items: : like Oral Care – toothpaste, mouth-wash; Skin Care - creams,

lotions; Hair Care - hair oil, shampoos, conditioners, personal wash – soaps; cosmetics,

deodorants, perfumes; paper products - tissues, diapers etc. ; shoe care.

Food and Beverages: Foods - as snacks, confectionary, chocolates, bakery products -

biscuits, bread, cakes. Beverages – tea, coffee, juices, bottled water, health beverages and

soft drinks.

Global leaders in the FMCG segment are Nestlé, ITC, Hindustan Unilever Limited, Reckitt

Benckiser, Unilever, Procter & Gamble, Coca-Cola, Carlsberg, Kleenex, General Mills,

Pepsi, Gillette etc.

The burgeoning middle class Indian population, as well as the rural sector, presents a huge

potential for this sector. The FMCG sector in India is at present, the fourth largest sector

with a total market size in excess of USD 13 billion as of 2012. This sector is expected to

grow to a USD 33 billion industry by 2015 and to a whooping USD 100 billion by the year

2025.

This sector is characterized by strong MNC presence and a well-established distribution

network. In India the easy availability of raw materials as well as cheap labour makes it an

ideal destination for this sector. There is also intense competition between the organized

and unorganized segments and the fight to keep operational costs low.

A look at some factors that will drive growth in this sector:

Increasing rate of urbanization, expected to see major growth in coming years.

Rise in disposable incomes, resulting in premium brands having faster growth and deeper

penetration.

Innovative and stronger channels of distribution to the rural segment, leading to deeper

penetration into this segment.

Increase in rural non-agricultural income and benefits from government welfare

programmes.

Investment in stock markets of FMCG companies, which are expected to grow

constantly.

Some of the challenges this sector is likely to face are:

Increasing rate of inflation, which is likely to lead to higher cost of raw materials.

The standardization of packaging norms that is likely to be implemented by the

Government by Jan 2013 is expected to increase cost of beverages, cereals, edible oil,

detergent, flour, salt, aerated drinks and mineral water.

Steadily rising fuel costs, leading to increased distribution costs.

The present slow-down in the economy may lower demand of FMCG products,

particularly in the premium sector, leading to reduced volumes.

The declining value of rupee against other currencies may reduce margins of many

companies, as Marico, Godrej Consumer Products, Colgate, Dabur etc. who import raw

materials.

To conclude, this sector will continue to see growth as it depends on an ever-increasing

internal market for consumption, and demand for these goods remains more or less

constant, irrespective of recession or inflation. Hence this sector will grow, though it may

not be a smooth growth path, due to the present world-wide economic slowdown, rising

inflation and fall of the rupee. This sector will see good growth in the long run and hiring

will continue to remain robust.

2.2 RESEARCH METHODOLOGY

2.2.1 RESEARCH DESIGN

The research design of the present study is exploratory-cum-descriptive-cum-diagnostic.

Exploratory research helps in knowing more about the problem. The study is exploratory

as few studies have been conducted in the area of packaging as promotional strategy in

consumer goods. Moreover, the prevalent packaging strategies used by the marketers have

been explored. The study is descriptive as it identifies the factors influencing packaging

and is being conducted with the help of a structured schedule. It is also diagnostic in its

nature as an attempt has been made to see the relationship between the prevalent packaging

strategies implemented by the marketers and the promotion of consumer goods.

2.2.2 UNIVERSE OF THE STUDY

The universe means the entire mass of observation which is the parent group from which a

sample is to be taken. The universe of the proposed study has been confined only to the

FMCG (Fast Moving Consumer Goods) where packaging strategies can play a significant

role.

2.2.3 SURVEY POPULATION

The survey population of the study is confined to the consumers of FMCG in NCR and

Haryana region.

2.2.4 SAMPLING DESIGN

Sampling is the act, process or technique of selecting a suitable sample or a representative

part of a universe for the purpose of determining parameters or characteristics of the whole

universe or population. The sample has been selected from consumers, who consume

FMCG (Fast Moving Consumer Goods). Non-probability sampling technique has been

applied in the study. The sample has been selected by applying mainly judgmental

sampling. The sample size is 200. A fixed number of respondents have been taken from the

following categories: 100 males and 100 females; in each category of male and female 50

are from urban area while other 50 are from rural area; further in each category of rural and

urban approximately 10 respondents each are from different age groups (11-20 years, 21-

30 years, 31-40 years, 41-50 years and 51 above).

2.2.5 DATA COLLECTION

For the present study both secondary and primary sources of data has been used. The

secondary data has been used for the development of the present research problem has

been collected through review of existing literature pertaining to the study and relevant

information regarding the packaging of consumer goods. Various sources like books,

journals, magazines and internet have been used. The primary data has been collected by

personally visiting the respondents and conducting their interview with the help of a

structured schedule. The discussion and personal observation has been used for gathering

the relevant information from the respondents. The structured schedule has been designed

to gather the primary information of the respondents regarding demographic information,

significance of packaging, consumer perception about packaging strategies and impact of

packaging strategies on purchase decision of consumers. Part – A includes eighteen

statements on 5 - point scale to assess significance of packaging; Part – B includes twenty

four statements on 5 - point scale to assess consumer perception about packaging

strategies; Part – C includes 16 statements on 5 - point scale to assess the impact of

packaging strategies on purchase decision of consumers; Part – D includes four open ended

questions to explore personal experiences of the respondents regarding packaging

strategies and get their valuable suggestions, if any.

2.2.6 CONSTRUCTION OF DATA COLLECTION INSTRUMENTS

For gathering the primary data to fulfill the objectives of the present study, three scales

were developed and standardized by the investigator herself:

Scale - A to Assess Significance of Packaging

Scale - B to Assess Consumer Perception about Packaging Strategies

Scale - C to Assess Impact of Packaging Strategies on Purchase Decision of Consumers.

The process of development and standardization of scales is given as under:

Identification of dimensions

After review of literature, discussion with faculty members of management, experts and

analysis various dimensions for all the three scales were identified. For significance of

packaging four dimensions identified are protection & storage factors, convenience &

availability factors, communication factors and promotional factors; the six dimensions

about consumer perception about packaging strategies include sachet packaging factors,

communication factors, environmental factors, choice/variety factors, innovative and

different packaging factors and economy factors; four dimensions have been identified for

impact packaging strategies on promotion of consumer goods - attraction / communication

factors, economy factors, ecofriendly packaging factors and convenience factors.

Item Writing

After identification of the dimensions list of items was prepared on the basis of above

sources. Three attempts were made to check and reframe the statements to ensure the

relevancy and uniqueness of the statement. A panel of experienced faculty members and

experts reviewed the items. The items were deleted or rejected on the basis of

recommendations of the experts. So a preliminary draft of items having positive

characteristics was framed. The preliminary draft was used for further analysis. A likert

format answer key was created with each statement rated on five point scale ranging from

strongly agree (5) to strongly disagree (1). The second draft of remaining items was

administered to 100 respondents.

For Scale - A to assess significance of packaging a preliminary pool of 29 items was

framed. Five items were deleted or rejected on the basis of recommendations of the

experts. So a preliminary draft of 24 items was framed. The second draft of 24 items was

administered to 100 respondents.

For Scale - B to assess consumer perception about packaging strategies” based on the

above sources, a preliminary pool of 35 items was framed. Seven items were deleted or

rejected on the basis of recommendations of the experts. So a preliminary draft of 28 items

was framed. The second draft of 28 items was administered to 100 respondents.

For Scale -C to assess impact of packaging strategies on purchase decision of consumers” a

list of 30 items was prepared on the basis of above sources. Nine items were deleted or

rejected on the basis of recommendations of the experts. So a preliminary draft of 21 items

having positive characteristics was framed. The preliminary draft was used for further

analysis.

Item Analysis

Item analysis was carried out to determine the adequacy of the scale. It differentiates

between better and poorer items. For the purpose the investigator employed the item total

correlation and Kelleys (1939) criteria of top 27% and bottom 27% was used for items

analysis to evaluate the proposed category of items. The data were analyzed by using‘t’

test which to depict significance of difference between upper group and lower group on

each item. For items where significant differences were not obtained between two groups,

the items were dropped out. Significant differences were not obtained between two groups

for the following scales - six items for scale –A, four items for scale – B and five items for

scale – C. Data were analyzed using SPSS statistical package version 20.0.

Preparation of Final Draft of the Scale

After carrying out item analysis of preliminary draft of all the three scales the final drafts

were prepared.

Scale - A to Assess Significance of Packaging

The item distribution of various dimensions of factors influencing significance of

packaging is shown in table 2.1.

Table: 2.1: Item Distribution of Scale – A to Assess Factors Influencing Significance

of Packaging

S.No. Factors Item No.

1. Protection & Storage Factors 1, 2, 3

2. Convenience & Availability Factors 4, 5, 6

3. Communication Factors 7, 8a, 8b, 8c, 8d, 8e

4. Promotional Factors 9, 10, 11, 12, 13, 14

Scale - B to Assess Consumer Perception about Packaging Strategies

The item distribution of various dimensions of factors influencing consumer perception

about packaging strategies is depicted in table 2.2.

Table: 2.2: Item Distribution of Scale - B to Assess Factors Influencing Consumer

Perception about Packaging Strategies

S.No. Factors Item No.

1. Sachet Packaging Factors 10, 11, 12, 13, 14

2. Communication Factors 1, 4, 5, 15, 17

3. Environmental Factors 18, 19, 20, 21, 24

4. Choice/ Variety Factors 2, 7, 9, 22

5. Innovative & Different Packaging Factors 3, 6, 8

6. Economy Factors 16, 23

Scale - C to Assess Impact of Packaging Strategies on Purchase Decision of Consumers.

The item distribution of various dimensions of a scale to assess factors having influence on

the impact of packaging strategies on purchase decision of consumers is shown below in

table 2.3.

Table 2.3: Item Distribution of Scale- C to assess Factors Influencing Impact of

Packaging Strategies on the Purchase Decision

S.No. Factors Item No.

1. Attraction Factors 1, 4, 10, 11, 12, 13, 14

2. Economy Factors 3, 5, 6, 7, 8, 9, 16

3. Ecofriendly Packaging Factors 15, 16

4. Convenience Factors 2

Scoring Pattern

For scoring pattern for each item included in the scale, Likert -Type five point scale was

adopted. Accordingly each item was scored on the basis of Strongly Agree, Agree,

Indifferent, Disagree and Strongly Disagree and then quantified as 5,4,3,2 and 1

respectively.

2.2.7 VALIDITY AND RELIABILITY

Reliability is concerned with the question of whether the results of a study are repeatable

while validity is concerned with the integrity of conclusions that are generated from the

piece of research. The content validity of the scales was established on the basis of experts’

opinions and comments. The content validity of the scales was assessed by ratings of

judges. All the items initially selected for the three scales - to assess significance of

packaging, to assess consumer perception about packaging strategies and to assess impact

of packaging strategies on purchase decision of consumers were presented to the judges to

decide. Only those items were selected which received 80% unanimity. Rest of the items

were selected which received 80% unanimity. Rest of the items were either modified or

dropped. Some of the items were ambiguous were either modified or dropped. Item

analysis was carried out to determine the internal consistency of the scale which is an

evidence of construct validity. The reliability of all the three scales was estimated by using

test- retest method. These reliability co-efficients were appropriate for the purpose as

Guilford (1954) says that the “Tool should be chosen even though their reliability may be

of the order of only 0.50”. On the basis of high values, it can be concluded that all the three

scales - to assess the significance of packaging, to assess consumer perception about

packaging strategies and to assess impact of packaging strategies on purchase decision of

consumers are reliable.

2.2.8 ANALYSIS PATTERN

2.2.8.1 VARIABLES OF THE STUDY

Two types of variables have been included in the present study.

Independent Variables: ‘Gender, ‘Age’, ‘Place of residence’, ‘Qualification’, ‘Marital

Status’, ‘Family Type’ and ‘Family Income’ of the respondents have been taken as

independent variables.

Dependent Variables: ‘Packaging’, ‘Packaging Strategies’ and ‘Promotion’ have been

taken as dependent variables.

2.2.8.2 CONTENT ANALYSIS

Significance of Packaging:

The four dimensions to assess significance of packaging (table 2.4) include protection &

storage factors, convenience & availability factors, communication factors and

promotional factors.

The protection & storage factors include statements 1, 2 and 3; convenience & availability

factors include statements 4, 5 & 6; communication factors include statements 7, 8a, 8b,

8c, 8d &8e and promotional factors include statements 9, 10,11,12,13 &14.

Table: 2.4: Content Analysis to Measure Significance of Packaging

S.No. Item

No.

Description of Items Response Categories and

Weight Assigned

Protection & Storage Factors SA

5

A

4

I

3

D

2

SD

1

1 1 It protects the product

2 2 It stores the product properly

3 3 It keeps the products hygienic and fresh

Convenience & Availability Factors

4 4 It makes the product convenient to use

5 5 It makes product available in different sizes

according to requirement

6 6 It helps to lower the distribution cost

Communication Factors

7 7 It communicates the necessary information

8 8 a) It communicates about ingredients/

composition

9 8 b) It communicates about statutory

information (MRP/Date of

manufacturing/expiry date etc.)

10 8 c) It communicates about the quality of the

product

11 8 d) It communicates about marketer and brand

12 8 e) It communicates about utility for a

particular purpose

Promotional Factors

13 9 It acts as an attention seeker by attracting

consumers.

14 10 It acts as a silent salesman

15 11 It acts as a persuasive salesperson

16 12 It adds value to the product

17 13 Well- designed package creates promotional

value.

18 14 It motivates consumers to buy the product

Consumer Perception about Packaging Strategies:

The six dimensions to assess consumer perception about packaging strategies include

(table 2.5) Sachet packaging factors, communication factors, environmental factors,

choice/variety factors, innovative & different packaging factors and economy factors.

Table: 2.5: Content Analysis to Measure Consumer Perception about Packaging

Strategies

S.

No

Item

No.

Description of Items Response Categories

and Weight Assigned

Sachet Packaging factors SA

5

A

4

I

3

D

2

SD

1

1. 10 Use of sachet(very small packets) is increasing

2. 11 Usage of sachet is increasing because of its

affordable/low price

3. 12 Sachet motivates a consumer to try various products

4. 13 Sachets are easy to handle/use

5. 14 Using sachets leads to less wastage of product

Communication Factors

6. 1 Packaging is just an outer covering

7. 4 These days more information is written on the package

8. 5 It tells story about the brand

9. 15 More attractive packaging is displayed in the main areas

of the shops

10. 17 Good packaging is taken as symbol of better quality

product

Environmental Factors

11. 18 It is wasting the scarce raw materials

12. 19 Packaging is creating more waste material

13. 20 It is creating more pollution in the environment

14. 21 Unnecessary packaging of the product should be

avoided

15. 24 Majority of Indian organizations do not consider the

negative impact of packaging on environment.

Choice/ Variety Factors

16. 2 Today, consumer has more choices in terms of

packaging options

17. 7 Packaging is making the product more easy to use

18. 9 Now products are available in many sizes

19. 22 More eco-friendly packaging is available in the market

Innovative & different packaging factors

20. 3 More attractive packaging is coming in the market

21. 6 More colourful packaging is coming

22. 8 The use of very innovative and different kind of

packaging is increasing

Economy Factors

23. 16 After consumption of the product the packaging is used

for decoration/storage purpose

24. 23 Packaging is an undesirable burden on the pocket of

consumers.

The sachet packaging factors include statements 10, 11, 12, 13, 14; communication factors

include statements 1, 4, 5, 15 & 17; environmental factors include statements 18, 19, 20,

21 & 24; choice/variety factors include statements 2, 7, 9 & 22; innovative & different

packaging factors include statements 3, 6 & 8 and economy factors include statements 16

& 23.

Impact of Packaging Strategies on the Promotion of Consumer Goods:

Table: 2.6: Content Analysis to Measure Impact of Packaging Strategies on the Promotion

of Consumer Goods

S.

No

Item

No.

Description of Items Response Categories

and Weight Assigned

Attraction/ Communication Factors SA

5

A

4

I

3

D

2

SD

1

1 1 Good packaging of a product attracts you

2 4 You read the instructions on packaging before buying a

product

3 10 The colour of packaging influences your purchase

decision

4 11 You buy a product because of its attractive packaging

5 12 You buy a product (which you do not require) only

because of its very attractive or different packaging.

6 13 It enhances impulse purchase (purchasing without

thinking)

7 14 You will pay higher for good/attractive packaging

Economy Factors

8 3 You buy a product because of the reusability of its

package

9 5 You will purchase a product because of its value pack

(big pack for less price)

10 6 You will buy a product because of its small sachet

packaging

11 7 You will buy sachet (which you do not require) just to

try

12 8 You prefer refill pack as it costs less

13 9 You prefer refill pack as its original packaging can be

reused

Ecofriendly Packaging Factors

14 15 You prefer eco-friendly packaging

15 16 You prefer eco-friendly packaging even if you have to

pay little extra

Convenience Factors

16 2 You will buy a product because its packing makes the

product usage more convenient

Four dimensions to assess the impact of packaging strategies on promotion of consumer

goods include (Table 2.6) attraction/communication factors, economy factors, ecofriendly

packaging factors and convenience factors. Attraction/communication factors include

statements 1, 4, 10, 11, 12, 13 & 14; economy factors include statements 3, 5, 6, 7, 8, 9 &

16; ecofriendly packaging factors include statements 15 & 16 and Convenience factors

include statement 2.

2.2.8.3 STATISTICAL TECHNIQUES APPLIED FOR THE ANALYSIS OF DATA

The data has been analyzed using SPSS version 20.0 statistical package. Factor analysis

has been applied and further ANOVA and t-test have been applied on the various factors

obtained from factor analysis. Descriptive statistics such as means and standard deviation

have also been used to describe the nature of data. To represent the data pictorially bar

diagrams have been used.