Transformation in Marketing – Understanding Consumer Preferences and Buying Behaviour of Branded Idli / Dosa Batter

JOURNAL OF CRITICAL REVIEWS

ISSN- 2394-5125 VOL 7, ISSUE 19, 2020 TRANSFORMATION IN MARKETING – UNDERSTANDING CONSUMER PREFERENCES AND BUYING BEHAVIOUR OF BRANDED IDLI / DOSA BATTER

Dr.T. Karthikeyan1, M.Sampathkumar2

1Assistant Professor, Dept. of Business Administration,Annamalai University, Chidambaram, India. 2Research scholar, Dept. of Business Administration,Annamalai University, Chidambaram, India email: [email protected], [email protected]

ABSTRACT: Idli and Dosa are the most common breakfast dishes in South India. Gone are the days, the batter for Idli / Dosa were prepared at home. Packed batter is sold in almost every grocery store. The branded Idli/Dosa batter segment is growing at a higher pace. Not only in the urban markets, where both husband and wife in a family are working, the sale of packed Idli/Dosa batter is growing in the semi-urban markets too. This research paper focuses on understanding the consumers’ buying behaviour, which in turn would help the new entrants of branded batter segment to adapt an effective marketing strategy to achieve growth in the sustainable business environment. Why do we call the branded batter segment as sustainable business and why not the unbranded segment? The unbranded segment does not follow any food safety standards, which we feel has a negative effect on the society that consumes the same. Whereas the branded batter segment is compelled to run their business in an organized manner. The production of batter as per the food safety standards, hygienic packing and supply chain makes the branded batter segment a sustainable business. However, due to price sensitivity the brands are not able to compete with the unbranded segment in the market. Apart from offering a quality product to the consumers, what else a batter brand should understand to retain and improve their position in the market? This paper discusses points on consumer buying behaviour and their preferences in the purchase of branded batter. Transformation in marketing based on these inputs should support any batter brand to grow their business. A sample size of 200 branded batter users were taken for the survey in the urban market, Chennai, India. There were four hypotheses created and proved right in the study and a few more inferences were also made from other questions.

KEYWORDS: Idli / Dosa batter, Consumer behaviour, buying behaviour, consumer preferences, batter brands in Chennai, transformation in marketing, sustainable business

I. INTRODUCTION

A transformation in marketing is required for the new entrants of branded batter segment to develop their business in the sustainable environment. In order to develop a new marketing strategy for the batter brands, understanding the behaviour and purchase pattern of branded consumers looked mandatory. Hence this study amongst branded batter users were initiated. Since most of the branded users are in urban markets, it was decided to do the study in an urban center. The obvious topmost ubran center in Tamilnadu is Chennai, where all the other district people reside and work. The sample size for the study was arrived based on the Cochran’s formula explained below.

Sample size estimation:

Using Cochran’s formula, n= [Z2 * P * (1-P)]/ M2 n is the sample size

Z is the Z score value.

For a confidence interval of 85%, the Z value is 1.44

P is the Population proportion. Considered value is 50% M is the Margin of error. Considered value is +5% n= 207

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II. OBJECTIVES:

1. To understand the consumers’ buying behaviour and preferences

2. To develop a transformational marketing strategy for new entrants of branded batter segment

III. METHODOLOGY:

A structured questionnaire was designed to conduct the study. The sampling methodology adopted was Simple random sampling.

Population:

• Users of branded batter, belonging to SEC A & B

• Decision makers for buying batter

Sample size n: 200

Location: Chennai, India (10 major localities of Chennai were shortlisted for the survey)

Duration of the study : December 2019 to January 2020

IV. FINDINGS & RESULTS:

Brands used by Respondents:

Users of branded batters were only interviewed for the study. 56% of the respondents who were interviewed were users of Udhaiyam batter. Balaji brand has the next highest share of 29%.

Brands used by Respondents

120 112

100

20 8 8 6 5 3

0 Udhaiyam Balaji ID Vijay Sakthi Shakthi Others

Factors influencing Purchase Decision:

Table1: Average rating of factors that influences purchase (Respondents were asked to rate the attributes out of 5 [1 being poor; 5 being Excellent])

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Parameters Average rating Taste 4.92 Price 3.99 Brand Name 4.42 Product Quality 4.84 Availability 4.72 Advertisements 3.50 Discounts, Offers 3.54

Taste tops the influencing factors followed by Quality and Availability

Most preferred SKU in batter:

250

199 200

150 130 124

100 92 57 51 49 54

50 21 22 1

0 500 gm 800 gm 1 kg 1.5 kg

Not at all May Be I am interested

1Kg is the most preferred SKU by respondents.

Apart from the above key inferences of the research, there were four hypotheses created and proved right through this study.

Hypothesis 1: For 99% of the population, idlis and dosas are the most preferred breakfast

Hypothesis 2: At least 80% of the population use idli/dosa batter for both breakfast and dinner

Hypothesis 3: At least 90% of the population buy idli/dosa batter from Kirana stores (Neighbourhood mom & pop stores)

Hypothesis 4: At least 90% of the population are using the idli/dosa batter brand recommended by their grocer/shopkeeper

Research statement 1: For 99% of the population, idlis and dosas are the most preferred breakfast

Null Hypothesis Ho: P=0.99

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Alternate Hypothesis H1: P≠0.99

Two-tailed Z test at a 99% confidence level is applied on the basis of the hypotheses framed

Criteria for choosing Z test

• Random sampling was applied

• Sample size is greater than 30 and the sampling distribution is normal

• Hypothesis test is based on proportions

σ = sqrt [P * (1 - P) / n] sqrt [(0.99 * 0.01) / 200] σ = sqrt (0.0000495) = 0.007 z σ = (p - P) / σ σ =(.995 - .99)/0.007 0.71

P: Hypothesized value of population proportion

p: Sample proportion

Since this is a two-tailed test, P value is the probability that the Z score is greater than 0.71 or lesser than -0.71

So P (Z<-0.71) =0.2 and P (Z>0.71) =0.2. Thus, P value = 0.2 + 0.2 = 0.4

The significance level is 0.01 (99% confidence level)

The P value 0.4 is greater than the significance level 0.01. This indicates that it is not statistically significant and the evidence against the null hypothesis is weak. Thus, the alternate hypothesis cannot be accepted.

Hence, Ho is accepted

Research statement 2: At least 80% of the population use idli/dosa batter for both breakfast and dinner

Null Hypothesis Ho: P>=0.80

Alternate Hypothesis H1: P<0.80

One-tailed Z test at a 99% confidence level is applied on the basis of the hypotheses framed

Criteria for choosing Z test

• Random sampling was applied

• Sample size is greater than 30 and the sampling distribution is normal

• Hypothesis test is based on proportions

σ = sqrt [P * (1 - P) / n] = sqrt [(0.8 * 0.2) / 200]

σ = sqrt (0.0008) = 0.028 z = (p - P) / σ(.85 - .80)/0.028 1.78

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P: Hypothesized value of population proportion

p: Sample proportion

P (Z<1.78) = 0.03. Thus, the P value is 0.03

The significance level is 0.01 (99% confidence level)

The P value 0.03 is greater than the significance level 0.01. This indicates that it is not statistically significant and the evidence against the null hypothesis is weak. Thus, the alternate hypothesis cannot be accepted.

Hence, Ho is accepted

Research statement 3: At least 90% of the population buy idli/dosa batter from Kirana stores (Neighbourhood mom & pop stores)

Null Hypothesis Ho: P>=0.90

Alternate Hypothesis H1: P<0.90

One-tailed Z test at a 99% confidence level is applied on the basis of the hypotheses framed

Criteria for choosing Z test

• Random sampling was applied

• Sample size is greater than 30 and the sampling distribution is normal

• Hypothesis test is based on proportions

σ = sqrt [P * (1 - P) / n] =sqrt [(0.9 * 0.1) / 200] sqrt (0.00045) = 0.02 z =(p - P) / σ =(.895 - .90)/0.02 =-0.25

O: Hypothesized value of population proportion

p: Sample proportion

P (Z<-0.25) = 0.4. Thus, the P value is 0.4

The significance level is 0.01 (99% confidence level)

Hence, Ho is accepted

Research statement 4: At least 90% of the population are using the idli/dosa batter brand recommended by their grocer/shopkeeper

Null Hypothesis Ho: P>=0.90

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ISSN- 2394-5125 VOL 7, ISSUE 19, 2020 Alternate Hypothesis H1: P<0.90

One-tailed Z test at a 99% confidence level is applied on the basis of the hypotheses framed

Criteria for choosing Z test

• Random sampling was applied

• Sample size is greater than 30 and the sampling distribution is normal

• Hypothesis test is based on proportions

σ = sqrt [P * (1 - P) / n] =sqrt [(0.9 * 0.1) / 200]

σ = sqrt (0.00045) = 0.02 z = (p - P) / σ

=(.915 - .90)/0.02 = 0.75 P: Hypothesized value of population proportion p: Sample proportion

P (Z<0.75) = 0.2. Thus, the P value is 0.2

The significance level is 0.01 (99% confidence level)

The P value 0.2 is greater than the significance level 0.01. This indicates that it is not statistically significant and the evidence against the null hypothesis is weak. Thus, the alternate hypothesis cannot be accepted.

Hence, Ho is accepted

V. INTERPRETATION:

As per the first two hypotheses, it is proved that the demand for the packed idli/dosa batter is very high in urban centers like Chennai. The third and fourth hypotheses prove that most of the batter brands are purchased from the neighbourhood stores and the most important thing is that the brand recommended by the shopkeeper is preferred by the consumers. A new entrant in to the idli/dosa batter segment can confidently enter the segment based on the first two hypotheses. Also, the importance of getting placements in the small mom and pop stores is very well proved.

VI. MARKETING STRATEGY:

Based on the data, it is advised that the new entrants in the field of branded batter shall look at increasing the width of their distribution rather the depth. If you take the example of ID batter, only 4% of the respondents have said that they purchase ID brand. Despite their advertisement spend and innovative campaigns, their sale looks very low compared to the regional brands such as Udhaiyam and Balaji. This is mainly because of the lack of width of distribution. ID batter is available in major self-service counters whereas, the availability in mom and pop stores seems to be limited. Though the price sensitivity may be highlighted as one of the important factors for not placing in the small grocery shops, the self-service counters have not fetched them enough sales. Few brands give importance to depth of the distribution (ie), they reach the counter early in the morning and place more than 10 packs of batter in the refrigerator resulting in very less space for the competitors. In this kind of approach, more than the sale, the chances of getting returns are more. Rather, placement of 3 to 5 packs in more number of outlets would fetch better sale.

The new entrants should also be conscious about the pricing strategy. New entrants may feel that penetration pricing may help them get an initial customer base. It might get a base, but it may not help in retaining the customer base. The premium pricing is not at all the right strategy for the batter segment. In order to effectively launch and sustain the business, the basic cost-plus pricing method would work well. The pricing of Udhaiyam and Balaji brands fall anywhere between Rs.45/- to Rs.55/- per Kg, whereas the price of ID batter is around Rs.70/-per Kg. The unbranded segment sells at Rs.25/- to Rs.30/- per Kg. Anywhere between Rs.40/-to Rs.45/-

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ISSN- 2394-5125 VOL 7, ISSUE 19, 2020 per Kg of batter is the right price for a new entrant. Slowly after capturing the customer base, the same can be increased to Rs.50/- per Kg. With this price range, getting placements in the kirana stores would not be an issue. Instead of confining the distribution to a particular area, it is recommended that the new entrants spread their distribution as larger as possible. This strategy of adapting more distribution width would bring more stability to the new entrants to this sustainable business.

As far as distribution is concerned, it is advisable not to appoint distributors during the launch phase. A test market to be identified for the launch. The promoter himself with his limited team should look after the distribution. On reaching a threshold, where the promoter feels that the distributor will not make any loss by way of more returns, promoter can look at appointing a distributor for that region. Similar approach to be done for every market during expansion.

VII. CONCLUSION

This paper highlighted the reasons for calling a branded batter segment, a sustainable business. New entrants normally tend to follow the market leaders. This paper gives more insights for the newbies. Any new entrant in the branded batter segment, shall adapt the transformation in marketing explained in this paper and launch the product. The study also elucidated the factors that influence batter purchase. The points of purchase are key in a batter business. The hypotheses related to the same was again proved in this research.

VIII. REFERENCES

[1] Dr Deepak Chawla, Dr Neena Sondhi (2011). Research Methodology Concepts and Cases. Vikas Publishing House Pvt Ltd

[2] Paul E. Green & Donald S. Tull: RESEARCH FOR MARKETING DECISIONS.

[3] Maerschand, J. (2016). Growing opportunities in the Indian food market. Flanders Investment & Trade.

[4] Food and Beverage News (2018). Retrieved from.Com: http://www.fnbnews.com/Top-News/indias-rtc- food-mkt-estimated-to-reach-38206-million-by-end-of-2017-41000

[5] Prasad Usha (2016), “He got batter and batter daily and today helms a Rs 100 crore turnover company”, The Weekend Leader. Available at http://www.theweekendleader.com/Success/2555/getting-batter- daily.html

[6] This Market is New Poised for Exponentail Growth. (2015). Food and Beverages News.

[7] Kim, W.C., & Mauborgne, R. (2005). The business model study on Red Collar group: Based on the perspective of Blue Ocean strategy. Chinese Studies, 6(2), 12-25

[8] FMCG Distribution Channels in India: Challenges and Opportunities for Manufacturers and Retailers

[9] Mishra, Debi P.Journal of Global Business Issues; Burbank Vol. 2, Iss. 2

[10] Dekker, R., van Asperen, E., Ochtman, G. and Kusters, W. (2009), "Floating stocks in FMCG supply chains: using intermodal transport to facilitate advance deployment", International Journal of Physical Distribution & Logistics Management, Vol. 39 No. 8, pp. 632-648.

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