CONSUMER BEHAVIOUR
SUBMITTED TO,
SUBMITTED BY,
Mr. ANAJI SHARMA, ASSOCIATE PROFFESOR MASTER OF FASHION MANAGEMENT, NIFT-HYDERABAD
SADHANA YADAV MFM-2ND SEMESTER, NIFT-HYDERABAD
1
TABLE OF CONTENTS
SL. NO
TOPIC
PAGE NO.
1.
Introduction
3
2.
Background Study
3
3.
Research Methodology
11
4.
Nature and Scope
12
5.
Results obtained
14
6.
Analysis of the Results
22
7.
Findings and Recommendations Recommendations
23
7.
Appendix
24
8.
References
26
2
INTRODUCTION This report focuses on one of the most commonly used and known personal care product line in the world; Dove by Unilever. Responding to new competitive conditions in its business environment, Unilever Corporation has evolved into one of the foremost transnational companies. With the marketing leverage and established brand name of Unilever, Dove became a success story shortly after its launch. The accomplishment of Dove has largely been built on Unilever‘s ability to target the right consumers by offering quality and consumer-friendly products. Thus, despite the intense competition provided for by companies such as Procter and Gamble and Colgate-Palmolive, Dove remained to be on top of the market. In the year 2011 in India the brand Dove featured in the list of top 50 brands in India according to the ―Brand Trust Report‖. Today, Dove is the biggest Home and personal care brand by the leading multilocal multinational company, Unilever (HUL in India). Having been introduced for the first time as a skin-cleansing product, Dove is now a 2.5 billion Euros brand. Dove has a long range of brands including soaps, body washes and hair care shampoos and conditioners. Consequently, Dove also offers different countries with Dove products that are unique to their climate, culture and skin texture. This research report aims to examine the brand loyalty of Dove. An analysis was conducted with a survey was distributed to 50 consumers at random which has helped in gathering information on existing reasons why they would prefer any product based on the Dove brand‘s product line.
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BACKGROUND STUDY Customers have a number of reasons to be loyal to a brand. Maybe the first product of a type they ever tried was of that brand, and they were satisfied. It might taste, work, feel, or fit better than other brands for that person. Many customers are influenced by price and have an innate distrust for less expensive products. Whatever the reason, these customers are more inclined to purchase with that brand to which they are loyal than with others. Even those customers who favor a single brand but are willing to purchase outside, may look down on a store that doesn‘t carry the favored brand. The primary thing that a brand name does for a customer is establish a reputation. Most people will know something of a given brand, either from experience, from word of mouth, or even by advertisement. The more positive reinforcement that is available for a brand, the greater is the influence on customers. One of the most important things a company can do to gain a customer‘s trust is to provide a great initial purchasing experience. A company that makes a less than impressive impression on a new customer has a much tougher time getting that customer to buy again. In the case of a negative experience, that likelihood declines even further. To build a happy, loyal customer base, it‘s important to have quality products and offer top notch service after the sale. The easiest way to gain a customer‘s distrust is to be disinterested in helping a customer after a problem has arisen. Be proactive and go out of your way to make the customer happy. Assuming your quality control is at an acceptable level, good experiences should far outnumber bad ones. This will lay the foundation for a customer loyal to your brand.
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CONCEPT OF BRAND PERCEPTION LINKED WITH CUSTOMER LOYALTY Brand loyalty is more than simple repurchasing, however. Customers may repurchase a brand due to situational constraints (such as vendor lock-in), a lack of viable alternatives, or out of convenience. Such loyalty is referred to as "spurious loyalty". True brand loyalty exists when customers have a high relative attitude toward the brand which is then exhibited through repurchase behavior. This type of loyalty can be a great asset to the firm: customers are willing to pay higher prices, they may cost less to serve, and can bring new customers to the firm. For example, if Joe has brand loyalty to Company A he will purchase Company A's products even if Company B's are cheaper and/or of a higher quality. From the point of view of many marketers, loyalty to the brand — in terms of consumer usage — is a key factor. Every brand wants to create and retain a loyal customer who engages in continued profitable business with it. Customer Loyalty is the measure of success of the brand in retaining a long term relationship with the customer. Thus customer loyalty is when a brand receives the ultimate reward of its efforts in interacting with its customer. Customer loyalty leads the customer to voluntarily choose a particular product against another for his need. The loyalty may be product specific or it may be company specific. When a loyal customer has repetitive requirement of the same product, such customers may be described as being ‗brand loyal‘. Loyalty also means that customer is sticking to the brand on certain grounds though he may be having other options also. Such loyal customers tend to spend more money buy more, buy longer and tell more people about the product or supplier. This type of long-term customer loyalty can only be created by making the customers feel that they are number one priority. 5
Some customers are inherently predictable and loyal, irrespective of the brands with which they are doing business. They simply prefer long-term relationships with him. Loyal customers are predisposed to stay with one product or brand, resisting competitive offers and also recommend the supplier to others. True, the customers who are targeted by a retention program demonstrate higher loyalty to a business. Therefore such customer retention programs should include regular communication with customers, and provide them opportunities to remain active and choosing to do business with the supplier. Loyalty is demonstrated by the actions of the customer. But it doesn‘t mean that the customer satisfaction level can measure his loyalty. Customer loyalty is not customer satisfaction. Customer satisfaction is the basic entry point for a good business to start with. A customer can be very satisfied with the deal and still not be loyal. On the other hand a customer may not express satisfaction but wants to remain loyal to the brand due to some reasons which keeps him benefited from that brand. On the other hand, loyalty should not be considered as just an attitude. Customer loyalty should have a direct connection to a company‘s financial results. The brand should be able to plan a clear and direct economic benefit of some kind, as the result of the strategies and tactics it employs to increase its customers‘ loyalty. Measuring customer loyalty and developing a retention strategy are of great importance to an organization‘s success.
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DEFINING BRAND LOYALTY The American Marketing Association defines brand loyalty as: 1. "The
situation
in
which
a
consumer
generally
buys
the
same
manufacturer-originated product or service repeatedly over time rather than
buying
from
multiple
suppliers
within
the
category"
(sales
promotion definition). 2. "The degree to which a consumer consistently purchases the same brand within a product class" (consumer behavior definition). Brand loyalty has been defined by Oliver (1997) as, ―A deeply held commitment to re-buy or re-patronize a preferred product/service consistently in the future, thereby causing repetitive same brand or same brand-set purchasing, despite situational influences and marketing efforts having the potential to cause switching behavior.‖ (Oliver, 1999 cited in Pohl, 2006) The definition provided by Oliver lays stress on the situational influences and marketing efforts which cause customers to switch over. A loyal customer is one who is not influenced by these factors and makes repeated purchases from the same seller or brand. Brand loyalty, in marketing, consists of a consumers‘ commitment to repurchase or otherwise continue using the brand and can be demonstrated by repeated buying of a product or service, or other positive behaviors such as word of mouth advocacy. Philip Kotler, again, defines four patterns of (brand loyal) behavior: 1. Hard-core Loyal - who buy the brand all the time. 2. Split Loyal - loyal to two or three brands. 3. Shifting Loyal - moving from one brand to another. 4. Switchers - with no loyalty (possibly 'deal-prone', constantly looking for bargains or 'vanity prone', looking for something different).
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IMPORTANCE OF BRAND LOYALTY The increasing competition has forced every seller in the market to reconsider their views on customers. Gone are the days when customers were simple and attracting them to the firm was child‘s play. Today the customers are to be treated like kings and must be provided with all that they expect the firm to provide. The firms face double challenges of attracting the customers as well as retaining them. The competition in the marketplace offers the consumers with an opportunity to select from wide variety of similar offerings; so achieving customer loyalty is extremely difficult. Every successful business depends on Brand Loyalty as it is the ultimate goal a company aims at. Brand Loyalty means a consumer‘s commitment to a brand. It implies that the customer not only looks for his/her own benefit but is willing to think about the brand‘s interest. It is mainly stated by repeat purchase. However it is not the end of the story. Brand Loyalty can be reflected in various positive behavior of the customer such as word of mouth advocacy, referring the brand to others and so on. A customer who is loyal to a brand has a typical mind set. When a customer is committed to a brand he/she keeps coming back to the brand to buy a product or a service. A loyal customer is always willing to pay higher price for his/her preferred brand than other brands. He/she also recommends this brand to others after realizing that the brand offers value for money. Thus the importance of brand loyalty is immense since it is brand loyalty that determines the sale of a product or a service. It is very difficult to survive in today‘s competitive world. In order to do so it is very crucial not to lose customers. Reducing customer loss and achieving new customer‘s trust and loyalty can dramatically improve business growth.
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Moreover when customers are loyal to a brand they are less sensitive to price change and willingly pay higher price to get the unique value that your brand offers. Brand loyalty ultimately leads to cost cutting and high profit margin as a loyal customer is indifferent to competitive promotions. Once brand loyalty is established one does not need to spend much on advertising and marketing. A number of things can influence brand loyalty starting from designing a new product to writing its catch line, understanding customer‘s need to employing effective marketing strategy. Brand loyalty occurs as the customer perceives the brand in a positive manner. Developing loyalty among new customers and retaining it among existing customers are equally important. Therefore it is necessary that the customers have a good impression about the brand as it is the foundation of their buying habits. When the customers buy a product they make a trial purchase. If they are satisfied with the product they will get back to buying that product again. Customers prefer to buy products that are familiar, safe and of good quality. A number of things determine brand loyalty. A customer develops brand loyalty only when they get quality product or service at the right price. It is the responsibility of the marketer to maintain the qua lity at a reasonable price.
INTRODUCTION TO THE BR AND
“DOVE”
Unilever was established in 1930 and since that time, the brands introduced by Unilever are attaining the leading position in the International markets. Among all those brands by Unilever, Dove is one of the most famous brands in the consumer industry and they use Dove daily for their skincare and hair care. There is a wide range of brands of Dove including soap bars, face washes, shampoos, conditioners, deodorants, moisturizing creams etc. that are used in 1 in 3 houses all over the world.
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Unilever‘s brand name used for many years on toilet soap became so successful its name was extended to other products. However, being the consumers‘ best choice, Dove is enjoying the leading position in the market with the largest market shares in 75 countries and is a 2.5 billion Euros brand. The goals of Dove brands are to comply with the needs of the consumers all over the world and to work together in effective manner to adopt the advanced ideas while working out on the existing ones. Dove is a personal care brand owned by Unilever. Dove products are manufactured in Argentina, Australia, Brazil, Canada, Germany, India, Ireland, Netherlands, Thailand, Turkey and United States. The products are sold in more than 35 countries and are offered for both women and men. The Dove trademark and brand name is currently owned by Unilever. Dove's logo is a silhouette profile of the brand's namesake bird, the color of which often varies. Products include: antiperspirants/deodorants, body washes, beauty bars, lotions/moisturizers, hair care, and facial care products. Unilever spends 2 billion Euros every year on marketing whereas 1 billion Euros for the research and development purpose. This marketing by Unilever has led Dove brands to attain the leading position in the market by the effective strategies including market research, concentration of a small number of products, varieties in brands, business in collaboration with any other renowned company, innovations, marketing according to demographics, commercials on television, announcements on radio, through contests, workshops and supermarkets, billboards, free help lines, knowledgeable website, and free gift offers etc. Moreover, substantial country-to-country differences in consumer tastes, preferences, and practices, as well as market structures, distribution channels, and local regulations have motivated top management to allow extensive operating independence of Unilever's subsidiaries (Maljers, 1992).
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Moreover, rising trade barriers have, until recently, always reinforced the need for managerial autonomy at the subsidiary level. The major competitors of Dove brands are Palmolive by Colgate-Palmolive and Ivory and Oil of Olay by P&G, but Dove is still at the top because of the consumers‘ confidence in it, its best quality and curative advantages that keep the skin moist and beautiful and hair healthy and shiny by the advanced formulae of ¼ moisturizing cream, conditioners, vitamin B5, Vitamin E and nutrients used in Dove brands that also helps for the aged people to keep their skin protected from wrinkles. Hence the success of Dove brands is attributed to just one thing that Unilever goes extra miles to give the loyal consumers high-quality, competitive products and services The products under the brand Dove can be listed under the following heads Shampoos
and Dove intense repair
Conditioners Dove hair fall rescue Dove daily shine Dove dryness care Dove dandruff care Hair Treatments
Heat defense mist Intensive repair overnight mask Intensive repair regenerating mask
Body lotions
Essential nourishment Go fresh nourishment Indulgent nourishment
Bar and body wash
Crème Fresh moisture Gentle exfoliating 11
Antiperspirants
Original Silk dry Clear Touch anti white marks
RESEARCH METHODOLOGY The
primary
research
methodology involves
identifying
the
population,
selecting a sample, identifying the appropriate sampling technique, preparing the survey and administering the survey to the sample population.
Defining the Target Population People who have used Dove‘s products and are most likely to have a perception about them. The target population for evaluating the perception towards Dove as a brand would include people possessing all of the following attributes:
Has used any product of Dove at least once
Falls in the age group of 16 to 50 yrs.
Selection of Sampling Procedure Since no sampling frame exists, which could provide information about the probable respondents, thus convenience sampling technique would be used to conduct the survey using a structured questionnaire.
Determining Sample Size The sample size for conducting this survey has been decided on ad – hoc basis and a large sample size of 40 respondents has been chosen.
Administering the Survey The survey is primary survey, conducted by administering a structured, non – disguised questionnaire. 12
Time frame The survey will be conducted in the city of Hyderabad during the month of May 2012.
NATURE AND SCOPE OF THE RESEARCH This report focuses on the primary research conducted to understand the customers‘ perception of Dove as a brand. The report discusses what drives consumers to be loyal to Dove as a brand or what makes them choose other brands. The consumers would be asked to fill a questionnaire that would analyze: How do they feel about products of Dove brand? Why do they purchase Dove products? How do they compare Dove brands with the competitors in the market? What would drive them to discontinue using Dove brand and switch to competitors? The gathered data is then processed, analyzed and interpreted in a systematic and objective fashion to understand what reasons influence the loyalty of the consumers being studied towards the brand.
13
RESULTS OBTAINED 1. Consumer rating of Dove brand in terms of quality: 25 40 %
20
s e s n o p15 s e r f o r e10 b m u N
30 %
20 %
8%
5
2% 0 Very Good
Good
Neutral
Bad
Very Bad
Responses
2. Consumer rating of Dove brand in terms of Value for money: 18 32 %
16 14
28 %
s e s n12 o p s10 e r f o 8 r e b m 6 u N
20 %
12 % 8%
4 2 0
Very Good
Good
Neutral
Bad
Very Bad
Responses
14
3. Difference Between The Quality Of The Brand And Other Brands: 30 50 %
25 s e s n20 o p s e r f 15 o r e b 10 m u N
40 %
10 %
5
0 Yes
No
Can't Say
Responses
4. Agreement/Disagreement with following statements: a) Always had a good impression about Dove 16
30 %
30 %
14 24 %
s12 e s n o10 p s e r f 8 o r e b 6 m u N 4
16 %
2 0%
0 Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree
Responses
15
b) Friends and family highly value Dove brand: 30 25
50 %
s e s n20 o p s e r f 15 o r e b 10 m u N
20 %
20 % 10 %
5
0%
0 Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree
Responses
c) Believe that Dove products are better than its competitors: 30 48 %
25 s e s n20 o p s e r f 15 o r e b 10 m u N
18 % 14 %
12 %
8%
5 0 Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree
Responses
16
d) Dove suits them:
Brand Suits Them 45 40
80 %
s35 e s n o30 p s 25 e r f o20 r e b15 m u N10
10 %
5
10 %
0 Strongly Agree
Agree
Neutral
0%
0%
Disagree
Strongly Disagree
Responses
e) Dove as a brand is trustworthy and credible: 40 35
70 %
s30 e s n o25 p s e r f 20 o r e b15 m u N10
20 %
5
6%
4%
0 Strongly Agree
Agree
Neutral
Disagree
0% Strongly Disagree
Responses
17
f) Spread positive word about dove: 18 32 %
16 s14 e s n12 o p s10 e r f o 8 r e b 6 m u N 4
30 % 26 %
12 %
2 0%
0 Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree
Responses
g) Consider themselves loyal to dove: 16
30 %
30 %
14 s12 e s n o10 p s e r f 8 o r e b 6 m u N 4
20 %
8%
2
2%
0 Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree
Responses
18
5. Frequency of purchase during past 6 months period: 14 24 %
12 s e10 s n o p s 8 e r f o r 6 e b m u 4 N
20 % 16 % 14 %
6%
2 0 Once
Twice
Thrice
More than 4 times
not purchased
Responses
6. Likelihood of repurchase: 20
38 %
18 32 %
16
s e s14 n o p12 s e r f 10 o r e 8 b m 6 u N
22 %
A= definitely repurchase dove, B=might repurchase dove, C= neutral towards repurchase decision, D= not repurchase dove
8%
4 2 0
A
B
C
D
Responses
19
7. Likelihood of purchase of a different brand in stock out situations: 30
25
48 %
s e s n20 o p s e r f 15 o r e b 10 m u N
28 %
12 %
A=not purchase another brand, B=might purchase in emergencies, C=look for other similar brand D=purchase different brand
12 %
5
0 A
B
C
D
Responses
8. Likelihood of repurchase in case of price increase: 30
25
50 %
s e s n20 o p s e r f 15 o r e b 10 m u N
30 % 22 %
A=only purchase dove, B=purchase dove if price increase is marginal C=evaluate other products also D=not purchase dove
8%
5
0 A
B
C
D
Responses
9. Likelihood of repurchase in case of a lower priced similar product by a competitor: 20
25
46 % A=not discontinue dove, B=might try lower priced product, C=switch to lower priced product
20
s e s n o p15 s e r f o r e10 b m u N
26 %
28 %
5
0 A
B
C
Responses
21
ANALYSIS OF THE RESULTS The survey was undertaken on customers of Dove products and 60% of the respondents rated Dove positive in terms of quality which indicates that a majority of the consumer base uses Dove products because of the quality it provides to them. In addition to this a good 48% people think that it is a good value for money brand and the amount that they pay for the products gives them the kind of satisfaction they require out the products they buy. Also 50% of the people surveyed believe that the products are different in terms of quality as compared to other brands providing similar kind of products. This number reinforces the results of question number 1 in which people rate Dove positive in terms of quality and therefore we can say that as far as quality is concerned Dove as a brand has an affirmative image in the minds of its users . Looking at the results of question number four we can see that more than 50% percent of the people feel that their family members also value the brand, the brand suits them, the brand is trustworthy and credible, they will spread positive word about the brand. These results insinuate that the users as well as peers value the brand highly they trust the brand and are readily willing to recommend it to other people. They think that the brand suits them and no other brand available in the market is able to satisfy them then way Dove does. On the other hand people don‘t feel that Dove products are any different from their competitors, this can mean that people use the products just for the fact that it satisfies their needs and is a good value for money but incase some competitor launches products that is perceived better than Dove products it is possible that the customers might switch to the competitors products. Also, from looking at the responses of question number 6 through 9 we can say that a major chunk of the people surveyed regularly buy Dove products and other things being equal people are most likely to repurchase the brand even if the brand increases price, there is a stock out situation or even if a competitors lowers his price or comes up with similar lower priced products people are loyal enough to stick to the brand. However, when consumers were asked about 22
whether Dove products were better than its competitors only a small percentage of 18% agreed to it, this means although people are highly satisfied with the quality of products they still don‘t find other brands inferior.
FINDINGS AND RECOMMENDATIONS Similar to any other brand‘s customers Dove‘s customers also fall in various consumer categories, which are explained below along with the percentage in each category: Hardcore loyal: These are those customers which are satisfied with the brand will not switch to other brands in any situation. In Dove‘s case this percentage is close to 30 percent. Switching loyal: This is that category in which people are not emotionally attached to the product and if they feel that there is a brand which is better in terms of quality they will switch to the other brand in no time. But if they find that the second product is not living upto there expectations than they might switch back to the first product again. In Dove‘s case this percentage is a 26 percent. This is a segment that Dove really needs to work upon and turn them into hardcore loyal. Not loyal: This is category which is not loyal at all and is more than ready to switch to other brands in case of a fall in the price of other brands. These people are very price sensitive and are using dove just because it suits them and is easy on their pocket. The percentage of this category for Dove is a whopping 28%. For these people the brand does not need to bother much because they are price sensitive and will not stick to the brand in any way except lowering the price. Overall the brand enjoys a fairly good reputation in the minds of the customers and the customers feel that it‘s a value for money brand that gives them great benefits and enough satisfaction. The survey concludes that Dove has a strong 23
loyal customer base but at the same time it also has a segment of customers which are price sensitive and not loyal in the true sense, therefore it should make constant efforts to retain the customers it already has and make efforts to turn the not so loyal switchers into hardcore loyal.
References http://ivythesis.typepad.com/term_paper_topics/2011/06/industry-report-dove-byunilever.html
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SURVEY Declaration: This survey is being conducted by the students of National Institute of Fashion Technology, Hyderabad; as a part of their project survey. The information given by you will be used solely for academic purposes only and will not be disclosed anyhow. You are kindly requested to fill the following survey form. Have you used Dove products? o Yes o No (if no please exit the survey, thanks for participating) Rate Dove as a brand in terms of quality Very good
Good
Neutral
Bad
Very Bad
Bad
Very Bad
Rate dove as a brand in terms of value for money Very Good
Good
Neutral
Do you perceive a difference between the quality of Dove‘s products and products of other brands? o o o
Yes No Can‘t say
Thinking of Dove brand to what degree do you agree or disagree with the following statements? Statement
Strongly Agree Agree
Neutral
Disagree
Strongly Disagree
I have always had a good impression about this brand My friends and family highly value this brand I believe the products of this brand are better than its competitors The brand suits me The brand is trustworthy and credible I say positive things about this brand to others 25
I consider myself loyal to this brand How many times have you purchased Dove products in the past 6 months? o o o o o
o o o o
o o o o
Once Twice Thrice More than four times I have not purchased it How likely are you to repurchase dove products? I will definitely repurchase Dove I might repurchase Dove I am neutral towards the repurchase decision I will not repurchase dove How likely are you to purchase a different brand in case of stock out situations? I will not purchase another brand, I purchase only Dove I might consider purchasing a different brand in emergencies I will browse and look for brands offering similar products I will certainly purchase a different brand if I do not find dove
How likely are you to repurchase the product if price increases? o o o o
I I I I
will will will will
purchase Dove even if the price increases purchase Dove purchase Dove only if the price increase is marginal evaluate other products also if the price increases for Dove not purchase Dove incase the price increases
How likely are you to repurchase if a similar competitor has a price slightly lower? o o o
I am not likely to discontinue Dove in favor of a lower priced product I might try out the lower priced product instead of Dove I will switch to the lower priced product instead of Dove
Demographic Questions: Your Gender
○Male
Your Age
○ 18 to 20 yrs.
Educational Qualifications Occupation Income of Family (Per Annum)
○Female ○ 21 to 25 yrs
○ Undergraduate ○ Graduate ○ Post- Graduate ○Student ○ Service Personnel ○ Own business ○ Housewife ○ below Rs.1.5lakh ○ Rs.1.5lakh to 3lakh 26
○ Rs.3.1lakh to 5lakh
○ above Rs.5lakh
27
