A Study on Noodles Buying Behaviour from Organized Retail Outlets in Coimbatore City

A Study on Noodles Buying Behaviour from Organized Retail Outlets in Coimbatore City Uma.k, Dhivya.R., Chandrakumar.M Dept. of Agrl. & Rural Management Abstract Food retailing in India is the fastest growing segment in country s fast paced retail sector. Amongst processed cereal products in India, noodles constitute the largest segment in the processed food market and have a share of about 45 per cent in terms of output. This study examines the consumer buying behavior of noodles. The use of statistical tools such as ranking and multidimensional scaling technique concludes that the availability of wide range of products was the major factor influencing the respondents preference followed by availability of quality products, discounts and offers, shopping convenience, store image and post purchase satisfaction. Index Terms buying behaviour, brand switching behaviour, noodles, transition matrix I. INTRODUCTION Retail is India s one of the largest industries, accounting for more than ten per cent of the country s GDP and around eight per cent of the employment. India has the largest number of retail outlets in the world. According to industry estimates, organized retailing in India is estimated to grow from US$ 330 billion in 2007 to US$ 427 billion by 2010 and US$ 637 billion by 2015. Simultaneously, organized retail which presently accounts for three per cent of the total market is likely to increase its share to 22 per cent by 2010. Organized retailing is projected to grow at the rate of 25-30 per cent per annum (India Retail Forum, 2005). Food retailing in India is the fastest growing segment in country s fast paced retail sector. The size of the grocery market in India is huge and worth Rs 4, 00,000 crore. It is estimated to grow from $236 billion in 2006 to $482 billion by 2020. The penetration of organized retail is about one per cent in this segment. The food retail sales make up to 77 per cent of total retail sales (Ernst and Young, 2006). It is estimated that in Indian consumer shopping wallet about 35-52 per cent is taken up by food and groceries segment and on an average of Rs.2500 on food, groceries and personal care items every month (www.acnielsen.co.in). Noodles Amongst processed cereal products in India, noodles constitute the largest segment in the processed food market and have a share of about 45 per cent in terms of output. Growth in noodles will be among the fastest in the various packaged food products in India. Current value sales of noodles in 2005 stood at slightly over Rs.9 billion, with pouch instant noodles expected to account for more than 66 per cent of the total value sales (Euromonitor Report, 2005). The most popular brands in India are Maggi by Nestle and Top Ramen smoodles by Indo-Nissin Ltd. Due to increasing health consciousness of the consumers, Nestle introduced an instant noodles made of whole wheat grain flour called Atta Noodles. India also has a huge demand for unflavored instant noodles with brands like Bambino and Ching's dominating the market. Modern retail chains are now concentrating more on the development of their private labels. Understanding the consumers visiting the outlet, purchasing pattern, brand preference, etc. is imperative to formulate suitable marketing strategies (Jha 2007) for the promotion of noodles consumption. Objectives: To study the consumer buying behaviour of noodles. To examine the factors influencing the consumer preference towards particular brand of noodles. To analyze the factors responsible for brand switching. II. METHODOLOGY The study was confined to Coimbatore city hence extrapolation of the results may not be possible since there exists a wide difference in consumer preference, behaviour, and the factors like socioeconomic, demographic and psychographic across regions. The study area selected was the Food retail outlets located in Coimbatore city. So the respondents would be the customer of the retail outlets and for selection of respondents convenience sampling technique was used. Population defined is the active retail shoppers. The sample group will comprise of heterogeneous consumers numbering 120 retail shoppers of the Food retail outlets and interviewed personally at the retail outlets. The obtained raw data were analyzed using appropriate statistical techniques and categorized into tables to draw meaningful inferences. The analytical techniques employed in this study are 1. Multi Dimensional Scaling Technique for perception, 2. Rank based quotient technique was used to analyze the reasons for preferring organized retail outlet for purchasing food and grocery items, the motives for purchase of noodles, flavour preference and the reasons for changing a brand. The reason with highest mean score was ranked first www.theinternationaljournal.org > RJSSM: Volume: 01, Number: 10, Feb-2012 Page 48

and hence considered the most important reason by the sample consumer. 3. In the present study, Chi-square ( 2 ) test was used to analyze if there was any association between various factors that might influence the awareness and purchase decision of the sample consumers. 4. Markov Analysis is a way of analyzing the current movement of some variable in an effort to forecast its future movement. The number of respondents consuming different brands of noodles for the past six months (October 2007 March 2008) and before six months (before October 2007) was calculated to analyze the brand switching behaviour of customers with respect to noodles. III. RESULTS AND DISCUSSION A. General Characteristics of the Respondents The general characteristics of respondents like age, income, family size, education, occupational status, etc. will have significant bearing on the consumer behaviour which in turn will influence the adoption of promotional methods and success of business. Age is an important factor in decision making regarding the purchase of noodles (Fig 1). From the data collected, majority of the customers visiting organized retail outlet were middle aged and young people so they can develop the promotional strategies targeting this group. As far as gender is concerned, female respondents constituted the majority (63.34 per cent) as the willingness and responsibility for shopping food and grocery items for the family is more among them. Based on monthly income (Fig 4), the respondents were categorized into four groups. 39.17 per cent of respondents were having monthly family income of Rs. 20,001-30,000, followed by 24.17 percent in Rs.10, 001 to 20,000. As the income of majority of the households was higher, expenditure on food items would also be higher. The size of the family (Fig 5) influences purchase decisions such as choice of brand, quantity of purchase, pack size. In this study the family size of the sample households was post stratified into smaller size, medium size and larger size. About half of the respondents (51.67 per cent) had less than or equal to four members in their family, followed by 39.17 per cent had 5 7 members in their family. So in the organized retail outlets the stock keeping units and the quantity of stocks must be oriented towards the requirements of small and medium families. B. Noodles Consumption Details of the Respondents The customers motives for purchasing the noodles (Table 1) for their family have significant influence in choice of brand, quantity and pack size purchased. The attributes viz. tasty food to eat was the major motive for purchasing noodles and was given first rank followed by easy to cook food, preference of children/family members and just for a change from the regular food items respectively. The details of usage pattern of noodles among the respondents have significant influence on the quantity purchased. Analysis on the quantity of purchase of noodles per month and preferred pack size by the households will help to provide stocking enough quantity and enough packets of different size in the shelves of the store and also to make estimation of the expenditure made for noodles per month. The quantity of purchase varied because of the availability of different brands in different pack sizes (Table 2).The pack size purchased by the customers varied based on the affordability, availability, quantity of consumption, frequency of purchase, etc. About 32.50 per cent of them consumed noodles during evening time followed by 20 per cent consumed as breakfast. About 45 per cent of the respondents purchased 320-400 grams per month followed by 480-570 grams (26.67%). Because of the availability of different brands in different pack sizes, four categories were made. As for as preference is concerned, about 41.67 per cent of the respondents preferred 320-400 grams pack size followed by 160-200 grams pack (27.50 %). One third purchased 480-570 and 80-100 grams pack. So the firm can use this information in developing the advertisement, to assess the sales potential of noodles and deciding the stocking levels of stock keeping units of noodles. About 56.67 % purchased monthly once along with purchase of food and grocery items. Whereas frequency of consumption of noodles influences the quantity of purchase, frequency of purchase and pack size purchased. About 40.83 % of them consumed noodles weekly once followed by 30.83 % take monthly twice etc. (Fig 6) Chi-square test was done to examine whether there was any association between purchase frequency and consumption frequency (Table 3). It revealed that there was significant difference between frequency of purchase and frequency of consumption of noodles as majority of respondents purchased noodles monthly once in contrast majority of them consumed weekly once. C. Quantity Vs. Income level Since Chi-square test shows significant association between the quantity of noodles purchased per month and income level of the respondents as in Table 4, quantity consumed per month increased with income level indicates that income influenced the purchase of quantity of noodles in the family (Srinivasan et al., 2000). So the firm has to target middle and high income customers to promote their product. D. Average Monthly Food and Noodles Expenditure of the Respondents Average monthly food expenditure (per cent) and corresponding noodles expenditure as per cent to food expenditure was estimated in Table 6. This indicates that as income increased percentage of food expenditure to total income decreased which was in accordance with Engel s theory of family consumption. Also it could be found that the percentage expenditure for noodles to food expenditure increased with increase in income level which indicates that www.theinternationaljournal.org > RJSSM: Volume: 01, Number: 10, Feb-2012 Page 49

income influenced the purchase of quantity of the noodles in the family. The result could be confirmed from the study of Srinivasan et al., that the quantities of processed foods consumption was high in high income group and the total income of the household significantly influenced the expenditure incurred on the processed products. So, the firm has to target high income people to promote noodles product. E. Reasons for Preferring Particular Brand of Noodles The reasons for preferring particular brand (Table 10) was studied to know whether there was any difference in the influencing factors among the buyers different brands. Taste was ranked as first and quality as second by buyers of different brands (Murugananthi 2005; Padmavathy 2005), range of flavours Srivastav (2005) and brand name were ranked third and fourth respectively. So the firm has to introduce new range of flavours and build brand image through the marketing strategies among the buyers of particular brands in order to influence them to purchase their own. Also the availability of own brand in low price and offers given for it should be communicated in such a way that it reaches the buyers of other brands. F. Brand Switching Behaviour of the Respondents The study of brand switching behaviour of the respondents is important to retain the existing customers and to attract new customers. The Table 11 explains the number of respondents consuming the different brands of noodles for the past six months (October 2007-March 2008) and before six months (before October 2007). The change in number of respondents during that period indicates that Brand X had lost nine customers during the last six months, while Brand Y had lost five customers in contrast Brand Z had gained fourteen customers. Local brands and other national brands had gained and lost three customers, so there was neither loss nor gain. G. Retention Probabilities As per retention probability given in Table 12, Brand X had the retention probability of 0.853 indicating 85.3 per cent of Brand X users were retained for the past six months, similarly for Brand Y it was 0.861, for local brands it was 0.500 and other national brands had 0.700 of retention probability of their customers. While Brand Z had 1.00 as retention probability indicating there was 100 per cent retention of the already existing customers. H. State Transition Matrix The Table 13 provides the information on transition of the customers from one brand to another brand during period I to II. The five Brand Z buyers were continuously buying it. In Brand X there was transition of six customers to Brand Z and one person to local brands and two persons to other national brands. Similarly in case of Brand Y there was transition of three customers to Brand Z and two persons to local brands. While in rest of the brands also there was transition of some customers to other brands during the past six months. I. State Transition Probability Matrix The table 14 provides the information on transition probability of the customers from one brand to another brand during period I to II. Brand X had retained 85.3 per cent of its customers while it had lost 9.9 per cent of its customers to Brand Z, 1.6 per cent to local brands and 3.2 cent to other national brands. Brand Y had retained 86.1 per cent of its customers while it had lost 8.3 per cent to Brand Z and 5.6 per cent to local brands. In case of local brands the retention percentage was 50 while it had lost 34 per cent to Brand Z and 16 per cent to other national brands. In case of other national brands there was 70 per cent retention while it had lost 30 per cent to Brand Z. In case of Brand Z there was 100 per cent retention of the customers and there was no loss but there was gain of 9.9 per cent customers from Brand X followed by 8.8 per cent from Brand Y, 34 per cent from local brands and 30 per cent from other national brands. So the firm should adopt suitable marketing strategies to continuously retain the existing customers and to attract more new customers for its brand. J. Factors Influencing the Respondents to Change the Brand The study on the factors influencing the customers to change their brand in Table 15 helps the firm to be cautious and make necessary measures in order to retain the existing customers and also to attract new customers. So the firm should pay attention on the above discussed factors in order to retain existing customers and attract new customers for their brand (Srivastav 2005). IV. CONCLUSION The general characteristics of respondents like age, income, family size, education, occupational status, etc. will have significant bearing on the consumer behaviour which in turn will influence choice of brand, quantity of purchase, pack size etc Any firm has to target middle and high income customers to promote food product. Also the firm has to promote their noodles brand not only as children food but also as family food. The firm has to communicate the nutritious aspects of noodles and also introduce new flavours in order to increase the frequency of consumption of noodles among the consumers. Availability of wide range of products was the major factor influencing the respondents preference followed by availability of quality products, discounts and offers, shopping convenience, store image and post purchase satisfaction. Above all, this kind of consumer study would help the retail outlets in maintaining the stock keeping units and the quantity of stocks, the adoption of promotional methods and success of business. In order to utilize immense market potential in food retail, companies need to develop specific marketing strategies and action plans taking into account the complex set of factors that influence consumer behaviour. www.theinternationaljournal.org > RJSSM: Volume: 01, Number: 10, Feb-2012 Page 50

% of Respondents Percentage of Respondents V. TABLES AND FIGURES Fig 6. Frequency of Purchase and Consumption Fig 1. Age of the Respondents in Years 60 50 41-50 23% 51-60 9% 21-30 28% 40 30 20 10 0 Once/ Twice a Monthly twice Monthly once Occasionally week Frequency Purchase Consumption 31-40 40% 80 Fig 8. Preferred Place of Purchase Fig 3. Occupation of respondents 60 Business 9% 40 Government sector 21% Private sector 43% 20 0 Organized retail outlet Local grocery store Bazaar street Departmental stores Other supermarket Place of Purchase Food and grocery items Noodles Home makers 27% Fig 4. Monthly Income in Rs. >40,001 12% < 10,000 8% 30,001-40,000 18% 10,001-20,000 24% 20,001-30,000 38% Fig 5. Family Size of the Respondents More than 8 9% 5 to 7 39% Less than 4 52% www.theinternationaljournal.org > RJSSM: Volume: 01, Number: 10, Feb-2012 Page 51

Table 1. Motives for Purchasing Noodles (n = 120) S.No Motives Mean score Rank 1. Tasty food 91.45 I 2. Easy to cook 81.24 II 3. Preference of children/family members 41.86 III 4. Just for a change 35.41 IV Table 2. Consumer buying behaviour of Noodles S.No Particulars No. of respondents Percent Usage Pattern of Noodles 1. Evening food 39 32.50 2. Breakfast 24 20.00 3. Whenever needed 20 16.67 4. Holiday food 18 15.00 5. Dinner 15 12.50 6. Special occasion food 4 3.33 Quantity of Purchase of Noodles (Quantity in grams/ month) 1. 80-100 4 3.33 2. 160-200 19 15.83 3. 320-400 54 45.00 4. 480-570 32 26.67 5. >570 11 9.17 Preferred Pack Size (grams)of the Respondents 1. 80-100 14 11.67 2. 160-200 33 27.50 3. 320-400 50 41.67 4. 480-570 23 19.16 Table 3. Purchase Frequency Vs. Consumption Frequency A. Consumption frequency S.No Purchase frequency Twice a week Weekly once Monthly twice Monthly once Occasi onally Total 1. Weekly once 6 9 0 0 0 15 2. Monthly twice 3 26 2 0 0 31 3. Monthly once 0 14 35 19 0 68 4. Occasio 0 0 0 0 6 6 nally Total 9 49 37 19 6 120 (χ 2 = 122.92, Table value = 21.026 df = 12 Significant at 5 % level) S.No Quantity (grams/ month) Table 4. Quantity Vs. Income level Income (Rs.) < 10,000 10,001-20,000 20,001-30,000 30,001-40,000 >40,001 1. 80-100 3 1 0 0 0 4 2. 160-200 5 12 2 0 0 19 3. 320-400 1 9 35 6 3 54 4. 480-570 0 7 9 12 4 32 5. >570 0 0 1 3 7 11 Total 9 29 47 21 14 120 (χ 2 = 116.681, Table value = 26.296 df = 16 Significant at 5% level) Total Table 6. Average Monthly Food Expenditure of the Respondents www.theinternationaljournal.org > RJSSM: Volume: 01, Number: 10, Feb-2012 Page 52

S.No Income (Rs.) Average monthly food expenditure to total Average monthly noodles expenditure to food expenditure income (per cent) (per cent) 1. < 10,000 28.27 0.83 2. 10,001-20,000 25.37 0.95 3. 20,001-30,000 23.08 0.97 4. 30,001-40,000 19.64 1.02 5. >40,001 15.34 1.32 Table 7. Decision Makers in Purchase of Noodles S.No Decision maker No. of respondents Percentage to total 1. Wife 52 43.33 2. Husband 11 9.20 3. Wife and Husband 16 13.33 4. Children 34 28.33 5. All 7 5.83 Table 8. Reasons for Preferring Organized retail outlet for Regular Purchase (n =86) S.No B. Reasons Mean score Rank 1. Availability of wide range of products 97.28 I 2. Availability of quality products 84.68 II 3. Discounts and offers 67.42 III 4. Shopping convenience 48.44 IV 5. Store image 34.67 V 6. Post purchase satisfaction 17.44 VI Table 9. Brand Purchased Presently by the Respondents (n =120) S.No Brand No. of respondents Percentage to total 1. Brand X 52 43.33 2. Brand Y 31 25.83 3. Brand Z 19 15.83 4. Other national brands 10 8.34 5. Local brands 6 5.00 6. Not specific about brands 2 1.67 Table 10. Reasons for Preferring Particular Brand S.No Reasons Buyers of different brands Mean score Rank 1. Taste 99.03 I 2. Quality 88.83 II 3. Range of flavours 80.55 III 4. Brand name 70.95 IV 5. Pack size 59.02 V 6. Availability in required time 51.53 VI 7. Attractive package 38.06 VII 8. Shelf life 30.18 VIII 9. Price 19.41 IX 10. Promotions and Offers 12.30 X Table 11. Brand Switching Behaviour of the Respondents (n =118) Change during the period No. of consumers Brand No. of consumers during period I S.No Gain Loss during period II 1. Brand X 61 0 9 52 2. Brand Y 36 0 5 31 3. Brand Z 5 14 0 19 4. Local brands 6 3 3 6 5. Other national brands 10 3 3 10 Total 118 20 20 118 Table 12. Retention Probabilities (n =118) www.theinternationaljournal.org > RJSSM: Volume: 01, Number: 10, Feb-2012 Page 53

S.No Brand No. of consumers during period No. of consumers No. of consumers Probabilities of I lost retrieved retention 1. Brand X 61 9 52 0.853 2. Brand Y 36 5 31 0.861 3. Brand Z 5 0 5 1.000 4. Local brands 6 3 3 0.500 5. Other national brands 10 3 7 0.700 Table 13. State Transition Matrix (n =118) S.No Period II Other national Brand X Brand Y Brand Z Local brands brands Period I 1. Brand X 52 0 6 1 2 2. Brand Y 0 31 3 2 0 3. Brand Z 0 0 5 0 0 4. Local brands 0 0 2 3 1 5. Other national brands 0 0 3 0 7 Table 14. State Transition Probability Matrix (n =118) S.No Brand Brand X Brand Y Brand Z Local brands Other national brands 1. Brand X 0.853 0 0.099 0.016 0.032 2. Brand Y 0 0.861 0.083 0.056 0 3. Brand Z 0 0 1.000 0 0 4. Local brands 0 0 0.340 0.500 0.160 5. Other national brands 0 0 0.300 0 0.700 Table 15. Factors Influencing the Respondents to Change the Brand (n =120) S.No Reasons Mean score Rank 1. Non availability of the brand of purchase 95.35 I 2. Taste of other brand was good or better 88.45 II 3. New offers given to other brand 68.20 III 4. Price of other brand was lower 59.27 IV 5. Trial pack of new brand in the market 41.06 V 6. Advertisement 29.63 VI 7. Peer group suggestion 17.97 VII *** www.theinternationaljournal.org > RJSSM: Volume: 01, Number: 10, Feb-2012 Page 54

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