AJRM
Volume 2, Issue 2 (April, 2013)
ISSN: 2277-6621
A Peer Reviewed International Journal of Asian
Research Consortium
AJRM:
ASIAN JOURNAL OF
RESEARCH IN
MARKETING
BRAND MANAGEMENT OF FMCG GOODS:
A COMPARATIVE STUDY OF BRAND LOYALTY AMONG THE URBAN
AND RURAL CONSUMERS
DR. VENKATA SAI SRINIVASA RAO MURAMALLA*
*Assistant Professor,
College of Business Administration,
Salman Bin Abdulaziz University,
Hotat Bani Tamim, Riyadh Region,
Kingdom of Saudi Arabia.
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40
ABSTRACT
Branding of products is a deliberate approach to working with brands, both
internally and externally. The most important driving force behind this increased
interest in strong brands is the accelerating pace of globalization. This has resulted
in an ever-tougher competitive situation on many markets. A product’s superiority is
in itself no longer sufficient to guarantee its success. The fast pace of technological
development and the increased speed with which imitations turn up on the market
have dramatically shortened product lifecycles. The consequence is that productrelated competitive advantages soon risk being transformed into competitive
prerequisites. For this reason, increasing numbers of companies are looking for
other, more enduring, competitive tools – such as brands. For example, if a customer
loves Pillsbury biscuits and trusts the brand, he or she is more likely to try other
products offered by the company such as chocolate chip cookies. Careful brand
management seeks to make the product or services relevant to the target audience.
Brands should be seen as more than the difference between the actual cost of a
product and its selling price - they represent the sum of all valuable qualities of a
product to the consumer. Hence this paper refers to all such factors influencing the
consumers especially women in both urban and rural markets and their brand
preferences and loyalty towards FMCG goods.
______________________________________________________________________________
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Volume 2, Issue 2 (April, 2013)
ISSN: 2277-6621
INTRODUCTION
Brand management is the application of marketing techniques to a specific product, product line,
or brand. The need to understand the emerging markets and consumers has become a big
challenge for the corporate world especially in creating and managing a powerful brand. By
developing a powerful brand, corporates can establish ‘brand equity’ and the equity assists firms
in a variety of ways to manage competition and to maintain market share. Brands make money.
Brands make companies. Brands make images. Branding is one of the most effective competitive
tools and it is a challenging task for the marketer nurture a brand into a strong, profitable brand.
Today’s brands are more visible than those in the past. They are everywhere on the TV
hoardings, posters and print media.
Brands while proclaiming their positive qualities pull down those of their rivals. Intangible assets
such as brands patents and know-how have become increasingly dominant elements of company
value Brands are widely recognized as corporate assets but have been historically evaluated
based on non financial attributes like awareness, recognition and perceived value. Every
marketer instinctively knows that his or her brand is valuable. Brand value is represented by the
premium price a company gets at the time of transfer of ownership. However, the value for ongoing business is determined by the important financial term “goodwill”.
Branding has become a management technique as it involves choosing the best alternative. Brand
managers have to develop a logical order of action in developing brand, awareness and
ultimately leading to brand loyalty.
 Non-recognition -unawareness stage
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 Brand recognition/brand awareness -awareness stage
 Brand preference -making the consumers buying out of habit, a particular brand
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 Brand insistence -consumer will not accept any substitute product at this stage.
 Brand loyalty -last stage, m the branding process when the consumers make repeat purchases
of same brand
Brand is a valuable, renewable and lasting asset capable of producing a sustainable competitive
advantage for the company. For instance, certain brands like Colgate, Dettol, Britannia, Life
Buoy, Ariel, Lux, Pond’s etc are held in high esteem by the Indian consumers. The companies
owning such brands have a good image in the market. A brand is a complex symbol that can
convey up to six levels of meaning such as, attributes, benefits, values, culture, personality and
user.
BRAND LOYALTY-A FORMIDABLE COMPETITIVE WEAPON
A brand is a recognizable and trustworthy badge of origin and also a promise of performance.
Brand managers’ job is challenging to establish a brand and create brand equity. Indian market is
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Volume 2, Issue 2 (April, 2013)
ISSN: 2277-6621
flooded with plenty of brands, both Indian and International. Brand equity enhances customer’s
confidence and results in brand loyalty. A highly loyal customer base can be expected to
generate a very predictable sale and profit stream. Brand loyalty as an asset encourages and helps
to create and enhance brand equity. While brand loyalty is the ultimate goal of the markets,
loyalty patterns may be shifting to a number of product categories. For example, in the category
of soaps, the consumers may be loyal to a segment of a brand through qualitative research, which
may provide insights into factors, which may trigger involvement. The greater the proliferation
of the brands in a category, the greater is the tendency on the part of the consumer to try out new
brands. Timely re-launches and adding new items in the product line enhances the involvement
levels of the existing customer base. Numerous forms of drives basically motivate an individual.
These drives could be physiological needs, need for prestige, need for affiliation, need for power
etc. There are also stimuli from the outside marketing world. These are ones, which may be in
the form of a product or an advertisement or the WOM (Word of Mouth).
FACTORS INFLUENCING BRAND LOYALTY
In a changing environment, sustaining a loyal base of consumers involves a mix of factors. For
example, creating an emotional brand-prevents the consumers from switching. Brand loyalty
offers a number of advantages to the marketers in today’s competitive context. There is profit
from increasing buying, profit from good WOM and profit from a premium price when
consumers stay loyal to a brand. As the environment changes and as there is a proliferation of
brands, brand loyalty as a concept is likely to undergo a number of changes. There could be a
number of factors, which influence brand loyalty. Recent studies across a number of product
categories have shown that there need not be a correlation between customer satisfaction and
loyalty. The aspects, which provide insight into managing the loyalty factors, are:
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 Nature of the product and consumer usage
 Monitoring trends to hold the loyal base of consumers and
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 Symbolic and functional appeals associated with the product/brand.
SOME IMPORTANT WAYS TO INCREASE CUSTOMER LOYALTY ARE
 Offer a guarantee that makes sense to customers
 Offer customer convenient hours as convenience is the test that counts today because time is
equally important as is price
 Staying in touch with customers through regular communication
 Say “thank you” in many ways
 Recognize long-term customers
 Introduce something new
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Volume 2, Issue 2 (April, 2013)
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 Do something “extra”
 Make realistic promises
STATEMENT OF THE PROBLEM
The consumers’ mind can be thought of as a geometric space where brands are plotted as points
to represent consumer judgments. The task of the marketer is to mould consumer perceptions so
as to occupy the -desired position for his brand. Consumer’s attitudes, beliefs and experience
play a vital role in forming opinion about brands, buying decisions and influencing his loyalty.
The following issues emerge in this context.
 In the Fast Moving Consumer Goods (FMCG) market flooded with a variety of brands, what
are the brands considered to be most popular in respect of certain regularly used FMCGs?
 Do the consumers use the same brand that they consider as popular in the market?
 Do the products possess the attributes that the consumers expect?
 What are the factors influencing brand loyalty?
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OBJECTIVE
The specific objective of the study is to measure the loyalty of the respondents quantitatively.
An attempt has been made to know the brand loyalty of consumers in respect of 8 categories of
FMCGs that are commonly used by both, urban and rural consumers. The selected products are
bathing soap, shampoo, face powder, tooth paste / powder, face cream, washing soap, washing
powder and hair oil.
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PARENTING LITERATURE
A brief summary of the studies related to the present study are presented below: Sarwade W.K.
in his research on “Emerging dimensions of buyer’s behavior in rural area” studied the marketing
and consumer behavior aspects such as place of buying, frequency of purchase, brand decisions
buying motives, shopping behavior and brand choice of buyers with reference to selected
products in rural area; The study reveals that most of the consumers from rural area developed
brand familiarity with some brand names like Lipton, International Lux, and Pantene which are
heavily known in urban areas. The study also revealed that, most of the rural consumers are not
aware of the producer of the product. The ‘corporate’ image is playing a very significant role in
popularizing the product in rural markets. Vikas Saraf, in his research on ‘Branding -Hub of the
corporate wheel’ studied the necessity of Branding. The study reveals the changing basis for
brand management and it also revealed that, how to create brand image and brand loyalty. The
author concludes that branding is everything and Brands are not simply products or services.
Brands are the sum totals of all the images that people have in their heads about a particular
company and a particular mark. Day G.S.A had put forth a ‘Two dimensional concept of Brand
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Volume 2, Issue 2 (April, 2013)
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loyally’. He stated that brand attitudes as well as purchase are needed to measure brand loyalty.
St Analysis of purchases of convenience food brands shows that the true loyal buyers are very
conscious of his need of the economies when buying, confident of brand judgment and heavy use
of the product.
METHODOLOGY
The study is based on the objective to assess the attributes of the product as perceived by the user
and to ascertain the Brand Loyalty. Visakhapatnam District of Andhra Pradesh State in India has
been taken as the area of the study. Primary data were collected from women who are residing in
rural and urban area of Visakhapatnam District, through interview schedule. The schedule of the
interviews was held during the June, July and August months of the year 2012. The entire
women population of Visakhapatnam District constitutes the sample frame, 100 respondents
were selected from Visakhapatnam town (Urban respondents) and the rest 100 respondents were
selected from three rural areas in the District (rural respondents). To determine the association
between age and loyalty & income and loyalty, both for urban consumers and rural consumer’s
null hypotheses have been set and tested. Weighted average has been used for determining the
level of loyalty by computing brand loyalty scores.
BRAND LOYALTY-AN ANALYSIS
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Over the last decade, Indian brands have attempted a number of positioning strategies and some
have been responsible for the phenomenal success of the respective brands. Hamam soap
heralded the honest proposition about some years back in the soap category and it was followed
by Peter England in the ready made shirts category and Sprite in the soft drink category. The
view of consumers over the product category has a strong implication on the brand proposition.
There are three kinds of consumers and they are
 Consumers who are loyal to a brand.
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 Consumers who may try the brand for the first time.
 Consumers who may like to try out a brand for the first time, especially when a brand is new.
A. LOYALTY SCORE
An attempt has been made to quantify loyalty by eliciting response from the respondents
regarding the following eight statements in respect of each of the eight product categories chosen
for the study.
 Newer brands have not been able to affect its popularity a It is worth a higher price
 I trust this brand
 I cannot do without this brand
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Volume 2, Issue 2 (April, 2013)
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 I love this brand
 It has something no other brand has a will use this brand in future also and
 It has never let me down
The final score for a brand for each customer was obtained by adding up the number of
agreements to each of eight statements. The total was divided by number of users of each
product, which is multiplied by eight to arrive at a score on scale of 0 to 8. Based on the scores,
the following tables were prepared *Attributes tables * Loyalty table (Brand wise for each and
every product) * Top loyalty score table.
B. ATTRIBUTES TABLE
Five important attributes were considered for the study and they are a) Good Appearance,
b) Fragrance, c) Good for Health and Hygiene, d) Total satisfaction and e) Quality Justifies the
cost; the respondents were asked to select any or all those attributes that they perceive as being
present in the brand they use.
TABLE 1.1: ATTRIBUTES SCORES - RURAL WOMEN CONSUMERS
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Products
Bathing Soap
Shampoo
Face Powder
Tooth Paste
Face Cream
Washing Soap
Washing Powder
Hair Oil
Attributes
Good
Fragrant
Good
Full
appearance
for
satisfaction
health &
hygiene
85
80
90
75
81
79
80
68
73
82
67
7.5
79
68
70
63
82
83
62
69
62
60
57
63
53
58
66
57
61
52
55
63
Quality
justifies the
cost
Average
score
78
86
63
60
72
55
58
51
0.816
0.788
0.720
0.680
0.740
0.594
0.584
0.564
Table 1.1 shows that among all the FMCG products for the rural respondents, bathing soap
scores high on good for health and hygiene followed by good appearance. 86 respondents opined
that the quality justifies the cost of shampoos; fragrance is an important factor influencing the
selection of a particular brand of face powder. The attribute ‘good appearance’ emerges as the
topper in respect of tooth paste while fragrance dominates the selection of face cream. Washing
soaps, washing powder and Hair oil have low attributes
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Volume 2, Issue 2 (April, 2013)
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TABLE 1.2: ATTRIBUTES SCORES - URBAN WOMEN CONSUMERS
Products
Good
Appearance
Fragrant
91
78
80
73
86
68
63
67
87
84
92
81
89
65
68
70
Bathing Soap
Shampoo
Face Powder
Tooth Paste
Face Cream
Washing Soap
Washing Powder
Hair Oil
Attributes
Good for
health &
hygiene
Full
satisfaction
Quality justifies
the cost
Avg
Score
69
82
88
72
67
62
61
59
80
75
83
70
72
59
62
60
0.810
0.808
0.812
0.728
0.778
0.648
0.614
0.656
78
85
79
68
75
70
53
72
Table 1.2 shows that among urban respondents, 91 respondents have stated that bathing soaps
appear to be good. Fragrant column reveals face powder has scored 92 points. Respondents
opined that, face powders’ cost is on par with the quality. Shampoos score the highest for “Good
for health and hygiene” aspect. 88 respondents have full satisfaction with their face powder.
Tooth paste and face cream score the highest on account of the fragrance aspect. The average
score column reveals that face powder score the highest, followed by bathing soap and then by
shampoo with a subtle difference in the score. As in the rural category among the urban
respondents also, the selected attributes scored low in respect of washing soap, washing powder
and hair oil.
TABLE 1.3: LOYALTY SCORES - RURAL WOMEN CONSUMERS
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Loyalty Score
Score
Brand
Name
Score
Brand
Name
Score
Brand
Name
Score
Lux
0.708
Pears
0.687
Mysore
Sandal
0.750
Cinthol
0.50
0.642
Chick
0.594
Sunsilk
0.719
All Clear
0.750
Meera
0.656
Ponds
0.768
0.617
Spinz
0.571
Cuticura
0.875
Zee
0.781
Colgate
0.606
Gokul
Sandal
Pepsodent
0.719
Close up
0.721
Fair &
Lovely
Rin
0.671
Fair Ever
0.618
Vicco
0.775
Ponds
0.708
0.633
501
0.318
Discound
0.391
Arasan
0.750
Power
0.625
Surf
0.625
Rin
0.746
Arid
0.652
Wheel
0.477
Power
0.850
VVD
0.668
Parachute
0.600
Vatika
0.650
Aswini
0.813
Brand
Name
Score
Brand
Name
Bathing
Soap
Hamam
0.681
Shampoo
Clinic
Plus
Face
Powder
Tooth
Paste
Face
Cream
Washing
Soap
Washing
Powder
Hair Oil
46
Products
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TABLE 1.4: LOYALTY SCORES - URBAN WOMEN CONSUMERS
Loyalty Score
Scor Brand Scor
e
Name
e
Brand
Name
Lux
0.70
4
Pears
0.64
6
Mysore 0.75
Sandal 0
0.61
6
Chick
0.63
8
Sunsilk
0.56
3
All
Clear
Ponds
0.60
0
Gokul
Sandal
0.59
8
Spinz
0.83
3
Tooth
Paste
Colgat
e
0.60
3
Pepsode
nt
0.50
0
Close
up
Face
Cream
Fair & 0.61
Lovely 5
Fair
Ever
0.52
5
Washin
g Soap
Rin
0.56
6
501
Washin
g
Powder
Hair Oil
Surf
0.55
4
VVD
0.59
4
Product Brand
s
Name
Scor
e
Bathing
Soap
Hama
m
0.62
2
Shampo
o
Clinic
Plus
Face
Powder
Brand
Name
Scor
e
0.75
0
Bran
d
Name
Cinth
ol
Scor
e
0.57
1
Meera
0.51
6
Cuticur 0.87
a
5
Zee
0.70
8
0.61
6
Babool
0.51
8
Ancho 0.16
r
7
White
Vicco
0.58
3
Ponds
0.92
2
0.66
3
Discoun
d
0.36
1
Arasan
0.49
0
Power
0.50
0
Rin
0.60
9
Arid
0.52
5
Wheel
0.55
7
Power
0.53
1
Parachut
e
0.50
8
Vatika
0.57
8
Aswini
0.84
4
Dabur
Amla
0.79
2
As shown in Table 1.4, (Urban women consumers) the highest loyalty scores among bathing
soaps goes to lux, among shampoos, chick; in face powder category, Spinz; among tooth paste,
close up, among face creams, ponds secured the maximum loyalty scores. 501 gets the first place
among washing soaps. In washing powder category, Rin gets the top most score. The op scorer
among hair oil category is Aswini. Loyalty scores are generally low for washing soap and
washing powder.
CHI-SQUARE ANALYSIS
Chi-Square technique was employed to know whether or not there exists a significant association
between (i) age and loyalty of rural consumers (ii) age and loyalty of urban consumers (iii)
income and loyalty of rural consumers (iv)Income and loyalty of urban consumers. Karl-person’s
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Volume 2, Issue 2 (April, 2013)
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correlation technique has been applied to determine the degree of relationship between the
attribute score given by respondents and loyalty score secured by the respondents.
TABLE 1.5: AGE AND BRAND LOYALTY-RURAL WOMEN CONSUMERS
Age
Young (up to 30 Yrs)
Middle (31-40Yrs)
Old(Above 40Yrs)
Total
Low
(up to 27 Yrs)
Brand loyalty
Medium
(28-53 Yrs)
2 (14.3)
7(50.0)
5(35.7)
14
44(59.5)
18(24.3)
12(16.2)
74
Total
High
(Above 53
Yrs)
4 (33.3)
6(50.0)
2(16.7)
12
50
31
19
100
Table 1.5 indicates that the relationship between age and brand loyalty is significant at 5% level
of rural respondents. In the category of urban respondents (Table 1.6) also, there is significant
relationship between age groups and loyalty scores. Chi-square test further reveals that in respect
of both rural and urban respondents, the relationship between family income and brand loyalty is
insignificant (Table 1.7 & 1.8). Correlation results (Table 1.9 & 1.10) show that there exists a
positive, significant (@1% level) relationship between attributes perceived to be possessed by a
product and loyalty of the respondents in respect of rural as well as urban consumers.
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TABLE 1.5 (A): CHI - SQUARE TABLE
Factor
Calculated 2
Df
Table Value
Significance
Age
12.049
4
9.488
Significant @ 5% Level
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TABLE 1.6: AGE AND BRAND LOYALTY—URBAN WOMEN CONSUMERS
Age
Young (up to 30 Yrs)
Middle (31-40Yrs)
Old(Above 40Yrs)
Total
Low
(up to 27 Yrs)
Brand loyalty
Medium
(28-53 Yrs)
High
(Above 53 Yrs)
Total
6(40.0)
3 (20.0)
6(40.0)
15
16 (22.2)
44(61.1)
12 (16.7)
72
3 (23.1)
5(38.5)
5(38.5)
13
25
52
23
100
TABLE 1.6 (A): CHI -SQUARE TABLE
Factor
Calculated 2
Df
Table Value
Significance
Age
10.645
4
9.488
Significant @ 5% Level
TABLE 1.7: ANNUAL FAMILY INCOME AND BRAND LOYALTY-RURAL
RESPONDENTS
49
Annual Family Income
Low (up to Rs.50000)
Middle (Rs.50000 Rs.2 Lacs)
High (above Rs.2 lacs)
Total
Brand loyalty
Low
7(50.0)
6(42.9)
1(7.1)
14
Total
Medium
42 (56.8)
31(41.9)
1(1.4)
74
High
4 (33.3)
7(58.3)
1(8.3)
12
53
44
3
100
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TABLE 1.7 (A): CHI-SQUARE TABLE
Factor
Calculated 2
Df
Table Value
Significance
Income
4.345
4
9.488
Not Significant
TABLE 1.8: ANNUAL FAMILY INCOME AND BRAND LOYALTY-URBAN
RESPONDENTS
Annual Family Income
Low (up to Rs.50000)
Middle (Rs.50000 Rs.2 Lacs)
High (above Rs.2 lacs)
Total
Brand loyalty
Low
5(33.3)
9(60.0)
1(6.7)
15
Total
Medium
35(48.6)
34(47.2)
3(4.5)
72
High
6(46.2)
6(46.2)
1(7.7)
13
46
49
5
100
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TABLE 1.8 (A): CHI-SQUARE TABLE
Factor
Calculated 2
Df
Table Value
Significance
Income
1.440
4
9.488
Not Significant
TABLE 1.9: CORRELATION BETWEEN ATTRIBUTES AND LOYALTY-RURAL
RESPONDENTS
Statistic
Pearson Correlation
Loyalty & Attribute
Brand Loyalty
Attribute
Sig (2 tailed)
Brand Loyalty
Attribute
N
Brand Loyalty
Attribute
**Correlation is significant at 0.01 level (2 tailed)
Brand Loyalty
1.000
0.624**
0.000
100
100
Attribute
0.624**
1.000
0.000
100
100
TABLE 1.10: CORRELATION BETWEEN ATTRIBUTES AND LOYALTY-URBAN
RESPONDENTS
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Statistic
Pearson Correlation
Loyalty & Attribute
Brand Loyalty
Attribute
Sig (2 tailed)
Brand Loyalty
Attribute
N
Brand Loyalty
Attribute
** Correlation significant at 0.01 level (2 tailed)
Brand Loyalty
1.000
0.660**
0.000
100
100
Attribute
0.624**
1.000
0.000
100
100
FINDINGS
Following are the findings of the study:
 Among rural women consumers, bathing soap gets the highest attribute score of 0.816.
Shampoo, Face cream and Face powder follow it with a moderate difference. Washing soap,
washing powder and hair oil have scored the least.
 Among urban respondents, face powder gets the highest attribute score of 0.812. Bathing soap
and shampoo follow it with a subtle difference in the score. All the other products secured
moderate scores which were much higher than the attribute scores given by rural consumers.
 Brand loyalty scores of Mysore sandal, All clear, Cuticura, Closeup, Vicco, Arasan, Power and
Aswini are the highest in rural respondents.
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 Lux, Chik, Spinz, Close up, Ponds, 501, Rin and Aswini brands secured the top loyalty scores
of urban consumers in respect of each item of FMCGs considered for the study.
 In respect of both rural and urban respondents, it is inferred that the relationship between age
and brand loyalty are significantly associated at 5% level of significance.
 The relationship between family income and brand loyalty is insignificant with regard to both
rural and urban respondents.
 Among the rural as well as the urban category, the selected attributes scored low, in respect of
three products namely, washing soap, washing powder and hair oil. This indicates that the
quality of those three products needs to be improved irrespective of brands.
 Correlation results reveal that there exists a positive and significant relationship between
attributes perceived to be possessed by a product by the consumers and their brand loyalty,
both for rural and urban consumers.
SUGGESTIONS
Following are the suggestions offered from the above findings:
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The manufacturers of FMCGs have tried various tricks to satisfy the consumers by using
different flavors, attractive colors, convenient packages, styles, advanced techniques for effective
advertisements and also by introducing new varieties to cater to the needs of different segments
of consumers. Following suggestions will help in strengthening brand loyalty.
 Companies must go further and train and encourage their distributors and dealers to serve their
customers well so as to build brand loyalty.
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 Marketers should turn to the following tools for attracting the attention of the people towards
their brands.
 PUBLIC RELATIONS & PRESS RELEASE: Brands can gain a lot of attention from well
placed newspaper and magazine stories.
 SPONSORSHIPS: Brands are frequently promoted in sponsored events such as sports events.
 Clubs & Consumers communities: companies can form a centre of a customer community,
such as Harley Davidson motorcycle owners or Brad Ford plate collectors.
 FACTOR VISITS: Hershey’s & Cadbury’s - two candy companies have built theme parks at
their factories and they invite visitors to spend a day. Such a venture may be attempted in India
also.
 TRADE SHOWS: Trade shows represent a great opportunity to build brand awareness,
knowledge and interest.
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CONCLUSION
There is high correlation between attributes by the users. There is high correlation between
attributes scores and loyalty. Brand loyalty is significantly associated with the age of the
respondents rather than with their income. Loyalty scores indicate that the consumers of less
popular brands are more loyal than others in respect of almost all products Market players have
to see that their products possess the required tributes so as to make consumers highly loyal. The
analysis of attributes scores lead to the conclusion that even the most popular brands do not
possess all the attributes expected by the users.
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