RESEARCH PROJECT REPORT

On
“Understanding online buying behavior: reference from FMCG
industry”

Submitted in partial fulfilment of the requirements of

Post Graduate Diploma in Management
By
Vivek Agarwal
PGDM 2019-21
Under the Supervision of
Mr. Tauseef Irfan
(Assistant Professor)

IILM Academy of Higher Learning, Lucknow 1, Viraj Khand, Gomti Nagar,

Lucknow – 226010
 ACKNOWLEDGMENT

I would like to thank IILM Academy of Higher Learning for continuous support throughout
the thesis final report. I wish to express my deepest gratitude to Prof. Tauseef Irfan, my faculty
guide for supporting and encouraging me throughout my thesis final report. I would like to pay
my special regards to my friends and family for helping and motivating me to attain this project
and completing it.

I am using this opportunity to express my gratitude to everyone who supported me throughout

the course of this project report. I am thankful for their aspiring guidance, invaluably
constructive criticism during the project report. I am sincerely grateful to them for sharing their
truthful and illuminating views on a number of issues related to the project.
 ABSTRACT
E-commerce has made life simple and innovative of individuals and groups; consumer Behavior
in online shopping is different from the physical market where he has access to see the product.
The purpose of the research was to study the consumer behavior in online shopping of FMCG
products especially in India.
All consumers do not behave in the same manner. Different consumers behave differently. The
differences in consumer behaviour are due to individual factors such as the nature of the
consumers, lifestyle and culture. Buyer behaviour is an important tool in the hands of marketers
to forecast the future buying pattern of customers and devise appropriate marketing strategies to
create long-term customer relationships. A vital part of the marketing process is to understand
why a customer or buyer makes a purchase.
Without such an understanding, businesses find it hard to respond to customer needs and wants.
Consumer behaviour is the study of how individuals make decisions to spend their available
resources (time, money and effort) on consumption-related items.
The main research question in thesis is how consumers behave while shopping online. Primary
data was collected through the questionnaire survey. Price, time saving and convenience were
identified as important factors which lead to certain buying behavior in online shopping.
This research gives explanation on how individuals are attending, processing, and selecting the
information on social media before a purchase. The findings indicated that individuals pursue an
active role in information search on social media comparing to mass media, yet information
exposure is selective and subjective during the course of information search.

KEYWORDS
Fast Moving Consumer Goods (FMCG), Consumer Behaviour, Growth, Consumer Decision
Making Process
 INTRODUCTION
People were communicating with other people without a language in olden days. There is a
massive change in the method of communication in modern days. Social Media have become a
convenient way to communicate among all age clusters. The Internet and particularly social
media have modified the shoppers and marketers communicating medium. With the help of net
and the presence of various social media sites it is now possible for business people to meet
worldwide customers at single click of the button. Thanks to the internet technology, which helps
the consumer to search the product on the web, view the review and ranking of existing
customers for the product before he purchased the product Social media modifies the
communication methods between sellers and buyers. E commerce influences the consumer in
their purchase decision. Communication through social media is a new platform to exchange
information about product and services. The analysis of consumer behavior is the core activity
for selling product and service since most consumers are using the internet and on-line social
media tools. Social media become an important media to introduce and market products and also
to do surveys. Nowadays Social media is an important marketing tool for promotional
activities. Hence it becomes necessary to perceive how Social media is affecting consumer
behavior.
Since the internet is acknowledged as the powerful tool in the business processes, many
researchers have tried to reveal its impacts and influences. Especially, the power of the internet
in supporting the buying behaviour of the customers is interesting in today business study. Buyer
behavior means the activities that come from a person organization and buying products or
services. The Buyer behaviour is an important topic because it describes the reason of why
people want to buy one kind of products/services rather than another one.
 CONSUMER BEHAVIOUR
The consumer behavior plays an important role in marketing. This is influenced by various
factors. It is seen that consumer’s needs and wants to buy a product changes with the changing
global scenario. Consumer behaviour can be defined as the decision-making process and
physical activity involved in acquiring, evaluating, using and disposing of goods and services.
This definition clearly brings out that it is not just the buying of goods/services that receives
attention in consumer behaviour but, the process starts much before the goods have been
acquired or bought. The study of consumer behaviour is the study of how individuals make
decisions to spend their available resources (time, effort, money) on consumption related item. It
includes the study of what they buy it, where they buy it, how often they buy it and how often
they use it. It is important to know how consumer reacts towards different product features,
price, and advertisement, in order to ensure strong competitive advantage. All of us are
consumers. We consume things of daily use. We also consume and buy these products according
to our needs, preferences and buying power. In some societies, there is a lot of affluence and
these societies can afford to buy in greater quantities and at shorter intervals. In poor societies,
the consumer can barely meet his barest needs. FMCG in marketing is defined as convenient and
low involvement products like salt, flours, peers, chocolates etc. Fast Moving Consumer Goods
(FMCG) goods are popularly named as consumer packaged goods. Items in this category include
all consumables (other than groceries/pulses) that people buy at regular intervals. The most
common in this list are toilet soaps, detergents, shampoos, toothpaste, shaving products, shoe
polish, packaged food stuff, and household accessories and extends to certain electronic goods.
These items are meant for daily use of frequent consumption and have a high return. The sector
is divided into two distinct segments - the premium segment catering mostly to the urban upper
middle class and the popular segment with prices as low as 40% of the premium segment.
7 P’S OF ONLINE MARKETING MIX.
The marketing mix definition is simple. It is about putting the right product or a combination
thereof in the place, at the right time, and at the right price. The difficult part is doing this well,
as you need to know every aspect of your business plan.

PRODUCT:

A product is an item that is built or produced to satisfy the needs of a certain group of people.
The product can be intangible or tangible as it can be in the form of services or goods.

You must ensure to have the right type of product that is in demand for your market. So during
the product development phase, the marketer must do an extensive research on the life cycle of
the product that they are creating.

A product has a certain life cycle that includes the growth phase, the maturity phase, and the
sales decline phase. It is important for marketers to reinvent their products to stimulate more
demand once it reaches the sales decline phase.

PRICE:

The price of the product is basically the amount that a customer pays for to enjoy it. Price is a
very important component of the marketing mix definition. It is also a very important
component of a marketing plan as it determines your firm’s profit and survival. Adjusting the
price of the product has a big impact on the entire marketing strategy as well as greatly affecting
the sales and demand of the product.

This is inherently a touchy area though. If a company is new to the market and has not made a
name for themselves yet, it is unlikely that your target market will be willing to pay a high price.
Although they may be willing in the future to hand over large sums of money, it is inevitably
harder to get them to do so during the birth of a business.

When setting the product price, marketers should consider the perceived value that the product
offers.

There are three major pricing strategies, and these are:

 Market penetration pricing

 Market skimming pricing

 Neutral pricing

PLACE:

Placement or distribution is a very important part of the product mix definition. You have to
position and distribute the product in a place that is accessible to potential buyers. This comes
with a deep understanding of your target market. Understand them inside out and you will
discover the most efficient positioning and distribution channels that directly speak with your
market. There are many distribution strategies, including:

 Intensive distribution

 Exclusive distribution

 Selective distribution

 Franchising

PROMOTION:
Promotion is a very important component of marketing as it can boost brand recognition and
sales. Promotion is comprised of various elements like:

 Sales Organization

 Public Relations

 Advertising

 Sales Promotion

PEOPLE:
Of both target market and people directly related to the business.

Thorough research is important to discover whether there are enough people in your target
market that is in demand for certain types of products and services.

The company’s employees are important in marketing because they are the ones who deliver the
service. It is important to hire and train the right people to deliver superior service to the clients,
whether they run a support desk, customer service, copywriters, programmers…etc.
When a business finds people who genuinely believe in the products or services that the
particular business creates, it’s is highly likely that the employees will perform the best they can.
Additionally, they’ll be more open to honest feedback about the business and input their own
thoughts and passions which can scale and grow the business.

PROCESS:
The systems and processes of the organization affect the execution of the service. So, you have
to make sure that you have a well-tailored process in place to minimize costs.

It could be your entire sales funnel, a pay system, distribution system and other systematic
procedures and steps to ensure a working business that is running effectively.

Tweaking and enhancements can come later to “tighten up” a business to minimize costs and
maximize profits.

PHYSICAL EVIDENCE:

In the service industries, there should be physical evidence that the service was delivered.
Additionally, physical evidence pertains also to how a business and it’s products are perceived in
the marketplace.

It is the physical evidence of a business’ presence and establishment. A concept of this is

branding.
NEED OR IMPORTANCE OF CONSUMER BEHAVIOUR:

Marketers need to study the consumer behavior of consumer by doing this they will understand
the opportunities that are present in the market and the field where they need to improve. This
will also help to know the expectation of the consumer relayed to a certain product.

The study of consumer behavior for any product is of vital importance to marketers in
shaping the fortunes of their organizations.
It is significant for regulating consumption of goods and thereby maintaining economic
stability.
It is useful in developing ways for the more efficient utilization of resources of
marketing. It also helps in solving marketing management problems in more effective
manner.
Today consumers give more importance on environment friendly products. They are
concerned about health, hygiene and fitness. They prefer natural products. Hence detailed
study on upcoming groups of consumers is essential for any firm.
The growth of consumer protection movement has created an urgent need to understand
how consumers make their consumption and buying decision.
Consumers’ tastes and preferences are ever changing. Study of consumer behavior gives
information regarding color, design, size etc. which consumers want. In short, consumer
behavior helps in formulating of production policy.
For effective market segmentation and target marketing, it is essential to have an
understanding of consumers and their behavior.
 SEGMENTATION, TARGETING AND POSITIONING IN
ONLINE BUSINESS

Today, Segmentation, Targeting and Positioning (STP) is a familiar strategic approach in

Modern Marketing. It is one of the most commonly applied marketing models in practice. In our
poll asking about the most popular marketing model it is the second most popular, only beaten by
the venerable SWOT / TOWs matrix.

SEGMENTATION:

It involves finding out what kinds of consumers with different needs exist. In the auto market,
for example, some consumers demand speed and performance, while others are much more
concerned about roominess and safety. In general, it holds true that “You can’t be all things to
all people,” and experience has demonstrated that firms that specialize in meeting the needs of
one group of consumers over another tend to be more profitable.
The market is segmented on 4 basis: demographic, geographic, psychographic, and
behavioral segmentation.

A. Demographic Segmentation:

Demographic segmentation divides the markets into groups based on variables such as age,
gender, family size, income, occupation, education, religion, race and nationality. Demographic
factors are the most popular bases for segmenting the consumer group. One reason is that
consumer needs, wants, and usage rates often vary closely with the demographic variables.
Moreover, demographic factors are easier to measure than most other type of variables.

1. Age:

It is one of the most common demographic variables used to segment markets. Some companies
offer different products, or use different marketing approaches for different age groups.

2. Gender:

Gender segmentation is used in clothing, cosmetics and magazines. As the buying behavior of
different individuals are different as per their gender.

3. Income:

Markets are also segmented on the basis of income. Income is used to divide the markets because
it influences the people’s product purchase. It affects a consumer’s buying power and style of
living. Income includes housing, furniture, automobile, clothing, alcoholic, beverages, food,
sporting goods, luxury goods, financial services and travel.

4. Family cycle:

Product needs vary according to age, number of persons in the household, marital status, and
number and age of children. These variables can be combined into a single variable called family
life cycle. Housing, home appliances, furniture, food and automobile are few of the numerous
Product markets segmented by the family cycle stages. Social class can be divided into upper
class, middle class and lower class. Many companies deal in clothing, home furnishing, leisure
activities, design products and services for specific social classes.

B. Geographic Segmentation:

Geographic segmentation refers to dividing a market into different geographical units such as
nations, states, regions, cities, or neighborhoods.

Geographic variables such as climate, terrain, natural resources, and population density also
influence consumer product needs. Companies may divide markets into regions because the
differences in geographic variables can cause consumer needs and wants to differ from one
region to another.

C. Psychographic Segmentation:

Psychographic segmentation pertains to lifestyle and personality traits. In the case of certain
products, buying behavior predominantly depends on lifestyle and personality characteristics.

1. Personality characteristics:

It refers to a person’s individual character traits, attitudes and habits. Here markets are
segmented according to competitiveness, introvert, extrovert, ambitious, aggressiveness, etc.
This type of segmentation is used when a product is similar to many competing products, and
consumer needs for products are not affected by other segmentation variables.

2. Lifestyle:

It is the manner in which people live and spend their time and money. Lifestyle analysis provides
marketers with a broad view of consumers because it segments the markets into groups on the
Basis of activities, interests, beliefs and opinions. Companies making cosmetics, alcoholic
beverages and furniture’s segment market according to the lifestyle.

D. Behavioral Segmentation:

In Behavioral segmentation, buyers are divided into groups on the basis of their knowledge of,
attitude towards, use of, or response to a product. Behavioral segmentation includes
segmentation on the basis of occasions, user status, usage rate loyalty status, buyer-readiness
stage and attitude.

1. Occasion:

Buyers can be distinguished according to the occasions when they purchase a product, use a
product, or develop a need to use a product. It helps the firm expand the product usage. For
example, Cadbury’s advertising to promote the product during wedding season is an example of
occasion segmentation.

2. User status:

Sometimes the markets are segmented on the basis of user status, that is, on the basis of non-
user, ex-user, potential user, first-time user and regular user of the product. Large companies
usually target potential users, whereas smaller firms focus on current users.

3. Usage rate:

Markets can be distinguished on the basis of usage rate, that is, on the basis of light, medium and
heavy users. Heavy users are often a small percentage of the market, but account for a high
percentage of the total consumption. Marketers usually prefer to attract a heavy user rather than
several light users, and vary their promotional efforts accordingly.
4. Loyalty status:

Buyers can be divided on the basis of their loyalty status—hardcore loyal (consumer who buy
one brand all the time), split loyal (consumers who are loyal to two or three brands), shifting
loyal (consumers who shift from one brand to another), and switchers (consumers who show no
loyalty to any brand).

5. Buyer readiness stage:

The six psychological stages through which a person passes when deciding to purchase a
product. The six stages are awareness of the product, knowledge of what it does, interest in the
product, preference over competing products, conviction of the product’s suitability, and
purchase. Marketing campaigns exist in large part to move the target audience through the buyer
readiness stages.

ONLINE MARKET TARGETING:

The list below refers to what’s needed to evaluate the potential and commercial attractiveness of
each segment.

 Criteria Size: The market must be large enough to justify segmenting. If the market is
small, it may make it smaller.
 Difference: Measurable differences must exist between segments.
 Money: Anticipated profits must exceed the costs of additional marketing plans and other
changes.
 Accessible: Each segment must be accessible to your team and the segment must be able
to receive your marketing messages
 Focus on different benefits: Different segments must need different benefits
POSITIONING:

The act of designing the company’s offering and image to occupy a distinctive place in the mind
of the target market. The end result of positioning is the successful creation of a customer-
focused value proposition, a cogent reason why the target market should buy the product.

Successful positioning adds value to your business and gives you a head start on the
competition. Positioning is the art of distinguishing your business from others in the
mind of your customers. You can make our online business stand out by high product
quality, great service, low prices or dedicated care for the environment. But it’s equally
important to communicate this distinctive factor to your target group.
ONLINE CONSUMER DECISION MAKING PROCESS:

Online Customer Behavior Process

According to the above figure, in the search stage, they might look for the product reviews or
customer comments. They will find out which brand or company offers them the best fit to their
expectation.

During this stage, well-organized web site structure and attractive design are important things to
persuade consumers to be interested in buying product or service.

Stage 1

The most useful characteristic of internet is that it supports the pre-purchase stage as it helps
customers compare different options.

Stage 2

During the purchasing stage, product assortment, sale services and information quality seem to
be the most important point to help consumers decide what product they should select, or what
seller they should buy from.

Stage 3

Post-purchase behavior will become more important after their online purchase. Consumers
sometimes have a difficulty or concern about the product, or they might want to change or return
the product that they have bought. Thus, return and exchange services become more important at
this stage.
FAST MOVING CONSUMER GOODS

Fast Moving Consumer Goods (FMCG) are also called as packaged goods. The goods that are
categorized as FMCG are also known as consumables which include groceries, beverages,
toiletries, drugs and pulses that are often purchased by the consumers. A list of goods that is
purchased includes detergents, toilet soaps, toothpaste, shoe polish, foodstuff, and accessories
related to household and electronic items. These items are used on regular basis by consumers
and will have low cost.
Fast Moving consumer goods consist of both food and non-food items that a consumer needs in
his/her day to day life. These items are purchased by consumers regularly and these are promoted
on a large scale to grab the attention of consumers to buy their brand products by the
manufacturers. These goods are often purchased at supermarkets, departmental stores,
hypermarkets, etc. The marketers are using new sales location and outlets to sell their products
and have accessible to the customers easily. There are a few traditional retailers who have come
up with label brand to reap extra profits. Every individual would use these consumer products
regularly.
INDIAN FMCG INDUSTRY
FMCG products are those products, which popularly known as consumer packaged goods. Items
in this category include all consumables (other than groceries/pulses) people buy at regular
intervals. The most common list are toilet soaps, detergents, shampoos, toothpaste, shaving
products, shoe polish, packaged food stuff, and household accessories and extends to certain
electronic goods. These items are meant for daily of frequent consumption and have a high
return. The Fast Moving Consumer Goods (FMCG) segment is the fourth largest sector in the
Indian economy. Food products are the leading segment, accounting for 43 percent of the overall
market. Personal care (22 percent) and fabric care(12 percent) come next in terms of market
share. Growing awareness, easier access, and changing lifestyles have been the key growth
drivers for the sector. The Indian FMCG sector is the fourth largest in the economy and has a
great impact on consumer buying behavior.

CHARACTERISTICS OF FMCG INDUSTRY IN INDIA

Branding: It is important for the company’s manufacturing fast moving consumer goods to
have a strong brand present and they should invest a huge amount of money in strengthening the
brand. With functional characteristics that are challenging to attain in this competitive market,
branding would help you gain loyal customers and improve sales figure.

Distribution Network: This has given a breeze to the Indian retailing industry. However,
due to poor infrastructure, manufacturers are unable to distribute their products to rural and a few
parts of urban markets. FMCG companies are developing the best distribution network to
distribute the products throughout India.. Once a strong distribution network is created, it reaps
umpteen benefits to the manufacturer and keeps them ahead of its competitors.

Contract Manufacturing: FMCG companies would focus mostly on building brands,

product development and creating distributed networks. At the same time, these companies are
Outsourcing production requirements to third party producers to meet the consumer demands..
There are many items that are manufactured by small scale industries only with SSI units are
enjoying high tax incentives. The contract manufacturing is growing rapidly due to its
importance and huge popularity.

Large unorganized sector: The unorganized sector has a huge space in FMCG sector.
Many companies are using their location advantages, regional presence to reach consumers in
remote areas where large consumer products are highly in demand. The low cost of these
products would give them high advantages.

INDUSTRY SEGMENTS

The main segments of the FMCG sector are:

Personal Care: oral care; hair care; skin care; personal wash (soaps); cosmetics and toiletries;
deodorants; perfumes; paper products (tissues, diapers, sanitary); shoe care.

Household Care: fabric wash (laundry soaps and synthetic detergents); household cleaners
(dish/utensil cleaners, floor cleaners, toilet cleaners, air fresheners, insecticides and mosquito
repellants, metal polish and furniture polish).

Branded and Packaged Food and Beverages: health beverages; soft drinks;
staples/cereals; bakery products (biscuits, bread, cakes); snack food; chocolates; ice cream; tea;
coffee; processed fruits, vegetables and meat; dairy products; bottled water; branded flour;
branded rice; branded sugar; juices etc.
E.C OMMERCE / ONLINE SHOPPING

Internet makes life simple and innovative. People are doing business online and trade has
become more easy and fast due to this. Internet provides new ways to promote business. Website
becomes the essence of online business as to show their services and products. Internet gathers
all competitors and consumers in one place. It brings new lane to promote, advertise products
and services in market.
Online consumers are always seeking new products, new attractiveness and the most important
thing being price compatibility with their budget. The internet is the best way to save time and
money through purchasing online within their range of budget at home or in anywhere. Online
consumers don’t have limits to online shopping. They also use internet for comparison of prices
of goods and services, news, visit social networks and search information and so on.
Anything that customer’s purchases affects environment by means of delivery, whether they
have the product shipped at home or drive to a brick and mortar store (supermarket). In earlier
days people used to go to different shops before purchasing as they didn’t have a great deal of
easy access to information on products. Due to the development of World Wide Web it has now
become easy to access the products available worldwide without wasting time, money and other
resources apart from helping environment. Centre for Energy and Climate Solutions suggests
that we can protect land and save energy by shopping online. The recession has so much impact
on online consumer behavior.
Online shopping behavior depends on four factors such as Shopping motives, personality
variables, internet knowledge and experience and last factor is shopping incentives. These are
key determinants to influence the behavior of online consumers. Online seekers are the main
sources of online shopping. Online shoppers always want to seek information within few clicks
and reach to the most relevant information according to their requirements such as competitive
brands, best price offers, product specification and consumer word-of-mouth.

CONSUMER BEHAVIOUR OVER INTERNET

Buyers are becoming more sophisticated, and understanding consumer behaviour is the
key to a successful marketing and sales strategy. Here’s some key insights into internet,
mobile and social media usage in 2020.

Global internet usage

According to Live Internet Stats, Google receives over 81 000 searches per second on any given
day and research from Oberlo shows that it has 92.18% of the search engine market share
worldwide - this shows the sheer volume of information available at the click of a button.
Here’s a look at some of the stats from the 2020 We Are Social state of digital global report:
FACTORS OF ONLINE CUSTOMER BEHAVIOR
The first elements to identify are factors that motivate customers to buy products or services
online. They are divided into two categories − external factors and internal factors.

 The External Factors are the ones beyond the control of the customers. They can divide
into five sectors namely demographic, socio-economic, technology and public policy;
culture; sub- culture; reference groups; and marketing.

 Internal Factors are the personal traits or behaviors which include attitudes, learning,
perception, motivation, self-image.

 The Functional Motives is related to the consumer needs and include things like time,
convenience of shopping online, price, the environment of shopping place, selection of
products etc.

 The Non-Functional Motives related to the culture or social values like the brand of the
store or product.
What sets the modern buyer apart from other consumers throughout history, is the amount of
research that they can (and do) perform before making a purchase. The internet has provided the
means to perform thorough product research, in the form of content such as customer
testimonials, online product demonstrations, and reviews. Here are some interesting insights We
Are Social believe will impact the role of digital in our lives in 2020:

 Brands will need to adapt to a new range of rules and restraints n the digital space.
 Brands will be rewarded for championing transparency in the name of the greater
social good.
 Brands will support consumers in creating and enforcing healthier digital habits
What product/services do you intend to purchase online in the next 6 months*
Global Average

Ctothlng/AccessorIes/snoes
AJrMne tlDeVreservabons
ELectronlc equlpm4rtt
ToursYl-lotet Reservaoons
Cosmetl<s/nutritJon suppues
Event Tlckecs
Computer rsarowae
Vld+os/DVOs/Garnes
Gro<eues
Husic
Sporting Gcods
Toys/Dolts
Computer Softwae

Baby supplies
Alcoholic drinks
Spans J'•lemarablfla
Car Idre

I do not pLan to make an

purchase in Lhe next 6 onune
months
ONLINE SHOPPING IN INDIA
The Internet has exploded in India, spreading its reach further than ever before. As more and
more consumers embrace the virtual world as a safe and convenient place to shop – either on
computers or using their smartphones – one thing is for certain, e-commerce is here to stay.

If the Internet is anything to go by, India's technological and economic growth has moved into
the top gear.

With more India's online shopping registering a phenomenal 100 per cent annual growth, many
retail chains and consumer durable companies are joining the Web bandwagon to tap the e-
shopping market.

"The online shopping industry in India is fast catching on, not just in the larger metros but also in
the smaller cities. At present the market is estimated at Rs 46,000 crore and is growing at 100 per
cent per year", Ajit Chauhan, managing director, Synergy Promotions and Marketing Services,
said.

According to Google, India has more than 100 million Internet users, out of which around half
opt for online purchases and the number is growing every year. With such a large market size,
companies, right from retail shops to consumer goods, are entering the Web space to attract
potential customers.
 LITERATURE REVIEW

The main objective of the research was to put emphasis on the reasons for counterfeit purchase
and the norms they follow while forming this behavior. The other objectives were to find out the
dominant factors affecting on the consumer while purchasing counterfeit goods, to know the
relationship of these factors with the purchase behavior and application of TPB model for
knowing the factors creating inclination towards counterfeit. The sample size was for research
was 50 respondents. A structured questionnaire was used by following the convenience sampling
method. The data were described with the help of pivot tables and pie charts with percentages.
Also to identify the relationship of demographic factors that influence online shopping, to study
the preferences of the consumers toward online shopping and the satisfaction level of the
consumers while they shop online. To achieve the objective, null hypothesis. Online shopping is
not reliable and trustworthy to the consumers‟ was tested.

Online shopping is still at an evolving stage in India and few studies have been undertaken for
assessing the attitude of male and female towards shopping for apparel in India. This study
focuses on various factors that affect the buying behavior of consumers while shopping online. A
number of studies have been done in this field some of which are discussed below:
2.1 Impact of demographic variables on online shopping
2.2 Factors affecting consumer buying behavior
2.3 Consumer satisfaction towards e-shopping
2.4 Website trust and website design
2.5 Perceived apparel quality
 OBJECTIVES OF THE STUDY

1. To understand FMCG Market in India

2. To learn and understand the marketing mix of FMCG products in India
3. To find out the factors /variables that influence online buying Behavior of
consumers
4. To highlight strategies used for marketing FMCG products
 LIMITATIONS

 Sample size is small it might not give the exact figure or may not be the exact
representative of the actual population.
 The customers are not very much cooperative and sometimes not even bothered
what is being asked to them.
 There may be some bias in the responses of the respondents which cannot be
ruled out fully.
 The study is limited to areas of Lucknow only.
 RESEARCH METHODOLOGY

Research Topic Understanding online buying behaviour : reference from

FMCG industry
Area of Study Lucknow
Data Sources Primary and Secondary Data
Research Design Descriptive
Research Approach Survey
Research Instrument Questionnaire
Sample Size 60
Type of Sampling Convenience Sampling
Contact Method Online google form.

Research is defined as human activity based on intellectual application in the investigation of

matter. The primary purpose for applied research is discovering, interpreting, and the
development of methods and systems for the advancement of human knowledge on a wide
variety of scientific matters of our world and the universe.
The term research is also used to describe an entire collection of information about a particular
subject.

Methodology is the method followed while conducting the study on a particular project.
Through this methodology a systematic study is conducted on the basis of which the basis of a
report is produced.
It is a written game plan for conducting Research. Research methodology has many dimensions.
It includes not only the research methods but also considers the logic behind the methods used in
the context of the study and explains why only a particular method or technique has been used. It
also helps to understand the assumptions underlying various techniques and by which they can
Decide that certain techniques will be applicable to certain problems and other will not.
Therefore in order to solve a research problem, it is necessary to design a research methodology
for the problem as the some may differ from problem to problem. The methodology adopted for
studying the objectives was surveying the in-house customers, through mails and Google docs.

NATURE

The methodology adopted to achieve the project objective involved descriptive research
method. The information required for fulfilling the objective of study was collected from
various primary and secondary sources.

TYPE OF RESEARCH
This study is DESCRIPTIVE in nature. It helps in breaking vague problem into smaller and
precise problem and emphasizes on discovering of new ideas and insights.

DATA COLLECTION
Two type of data collection method is adopted:
1. Primary Data Collection
2. Secondary Data Collection

Primary Data is collected through the open ended questionnaire by direct interaction with the
customers. The questionnaire was structured type and contained questions relating to different
dimensions of FMCG industry.

Secondary data is collected through the various website.

Research Plan:
To know the “Understanding online buying behaviour : reference from FMCG industry”

Research Instrument:

Here the research instrument is Questionnaire through which primary data is collected from the
customers in different areas.
 DATA ANALYSIS AND INTERPRETATION

Q1. Gender Analysis.

Number of responses: 60 responses.

Gender Respondents
Male 36.7%
Female 63.3

INTERPRETATION

Out of my 60 respondents, 63.3 % were female and only 36.7% were male. They were reached
by submitting an online survey using Google documents.
 Q2. Age factor.

Age group 20-25 26-30 31-35 36 or above

INTERPRETATION

Most of respondents are pretty young, aged between 20-25 years as in the young youth are the
major consumers which counts for 78.3% of this survey are the most brand conscious group and
15% people are aged at 26-30 years which are little less brand conscious.

The people of age 31 and above are less.

By asking these two general questions –gender and age may help to identify weather social
media has impacted the decision making processes differently based on these two segmentations.
Q3. Educational Qualifications.

Educational Matriculate Intermediate Bachelors Masters

qualification and above
Respondents 1 3 55 40

INTERPRETATION

Most of my respondents are my colleagues and friends, so it counts for 55% of the people are
doing their bachelors and 40% are doing their master’s degree just like me.

This question is important because better the educational qualification, more will be the chances
of getting appropriate answers regarding their online buying behavior since they all the perks and
cons of internet buying.
Q4. Where do the respondents live?

INTERPRETATION

Posh area residents stand out in their higher education and income levels relative to other types
of communities which in this survey accounts for 20% of my respondents.

Suburban residents are the most educated and have the highest reported household income of the
four community types which is 10% here the majority population resides in Urban area which is
68.3%.

People living in all these areas have good educational background and have full-fledged access
to internet technology.

Household income highly influences the consumer behavior towards fashion goods; families
having income above Rs 50000 monthly prefer more of the branded fashion apparels &
accessories as compared to families having income less than Rs. 50000 a month.
Q5. You use internet for ?

INTERPRETATION

The Internet has basically made our lives easier and convenient. The world is at our fingertips
now, thanks to the internet. When we see how it has changed the scenario of the modern world,
we cant thank internet enough.

Information is probably the biggest advantages that internet offers to us. 53.3% respondents
mentioned that they use internet to gather information There is a huge amount of information
available on the internet for just about every subjects known to man, ranging from government
law and services, trade fairs and conferences, market information, new ideas and technical
support, the lists is simply endless.

28.3% respondents said they use internet for communicating for the internet lets a person to
communicate with people in virtually any parts of the world through the internet or e-mail, and
even share pictures, informations and videos. 15% respondents use internet for online shopping
have many website selling a varieties of products online and one just needs to select or bid for
the desired product and entire financial transactions can be conducted online.
Q6. Do you pay attention to advertisements on internet?

INTERPRETATION

Advertising is the art of influencing human action to buy or possess ones product. The term
‘media’ refers to the means through which the advertising information is communicated by the
advertiser to the prospective customers. Advertising helps the brands to popularize their products
among the mass, which in turn helps them to influence the purchasing decision of the consumers.

Advertisement is essential for any media for its running and its true with websites, so these
websites carry advertisements in such a manner which is attractive and layout plays an important
role in it.

The results show that the respondents have Internet access via their personal phones or any other
wireless device. 61.7% of respondents are watch advertisements and 38.3% responded no or
maybe they skip the advertisements.

The reason is to examine whether exposure to advertisements via social media platforms
comparing to mass media channels may.

61.7% of my respondents get attracted by online advertisements and it also increases the
awareness of a product for them.
Q7. How often do you shop online?

INTERPRETATION

One of the reasons why online shopping has grown so much over the years is because of the
experience that businesses are able to provide to their customers. The experience of online
shopping is just as close to retail store shopping and we can purchase almost everything online.

Out of 60 respondents in this survey, 60% shop online but not very often like once or twice in a
month.11.7% people shop often like every two weeks and 18.3% respondents shop atleast once
in a week. The rest 10% of my respondents can be called shopaholics because they buy products
online pretty frequently like twice in a week.

I believe the people who shop often belong to the posh and suburban areas for their standard of
living must be high too.
Q8. Does social media influence your buying decision?

INTERPRETATION

Since social media is considered as an extent of external stimuli in the decision process, it affects
a consumers buying decision greatly.

In order to examine the influence of information available on social media on consumers’

decision process, I added this question wherein I found that 61.7% respondents agreed to the fact
that their buying decision is influenced by social media platforms.

Individuals who share their reviews, comments, or experiences though the social media can be
referred as opinion leader, in which they have a certain degree of influence on consumers. With
the available platforms on social media, the gathered data has proven that information is easier to
find and the flow of information is faster and access to more individuals; that is, everyone can be
an opinion leader and has a certain degree of influences on the Internet over the others.

Some people disagreed while 28.3% people were neutral as in their decision is sometimes
influenced and sometimes not.
Q9. What products do you most often buy from the Internet?

INTERPRETATION

Most of the people these days tend to buy products online; it's much easier and quicker.

Out of my 60 respondents, 41.7% people purchase FMCG goods on internet as FMCG

consumers enjoy the comfort of shopping online They can see product pages with details and
accurate information and with high-quality images for making informed purchase decisions,
while 36.7% respondent shop for electronic goods online because the consumers prefer to shop
for electronics online to grab the latest products before they hit the retail market. Be it a flagship
smartphone or a multi-door refrigerator, tech savvy people are keen to lay hands on freshly
launched products than others while 20% respondents shop for home goods online.
Q10. What is most important to you when buying on the Internet?

INTERPRETATION

Customers can shop on the go or from the comfort of their homes. If reports are to be believed,
online stores are as successful as brick and mortar stores – at least in some niches.

Some people prefer shopping online only for the usage of the products, some people prefer
buying online to purchased branded products while some shop online for the available discount
prices.

Out of my respondents, brand name is the most important criteria for 53.3% people when
shopping for products online and 26.7% people shop online because they get good discounts on
products online and very few people guy because of the social causes associated with products.
Q11. When visiting a website, which would have the strongest negative impact
on you?

INTERPRETATION

Consumer satisfaction with online shopping is directly dependent on a number of factors. There
is a constant dilemma in the market related to the question which online shopping determinants
affect the customer satisfaction. It is therefore important to understand the factors that drive
customer satisfaction and their choice of online stores.

Around 40% of respondents mentioned that Lack of customer reviews has a big negative
impact on a consumer’s purchase decision because product reviews affect purchasing behavior a
lot. Business owners have to pay a great deal of attention to the feedback and read reviews to
understand consumers’ needs and 31.7% respondents said that lack of adequate information
about products has a negative impact in their minds.

Many people purchase products because of good discount deals on products and 13.3%
respondents said that lack of discounts is a turn off for them and 15% said lack of graphical
representation affects their buying decision.
Q12. What is your preferred source of information for your buying decision?

INTERPRETATION

Even though social media and the Internet rule, customers make purchase decisions using a
combination of old media, new media, and conversations with friends and family. The marketer
must be able to provide his consumer with a very specific and unique set of positive attributes
regarding his own brand, so that the purchase decision is made in his favor.

According to my survey, 40% people get information about products through a company’s
website, and 25% respondents said that their purchase decision comes from word of mouth from
their friends and relatives. While 18.3% get information about products by product
advertisements on television, mass media and hoardings, while 16.7% respondents gather
information through online advertisements as internet pop up adds are a good way of product
marketing.
 RESULTS
The results from the questionnaire and the distribution of collected data among the respondents
has been discussed and presented. The questionnaire was designed to collect the primary data
and further on to analyze the data and how consumers behave against the importance of price,
convenience, trust, loyalty when they purchase online. The questionnaire was divided to, first,
the demographics segmentation among the respondents and second to, collect the data about the
factors like price, convenience, brand consciousness, safety, trust which effect directly or
indirectly to the decision making process and ultimately highlight the typical behavior of
consumer while shopping online. The questionnaire as you know divided into four main
segments such as general, Consumer Behavior in Buying Process, Customer concern in online
shopping and Post Purchase Behavior and Experience.
 DISCUSSION
There are number of factors that affect the behavior of online consumers in India’s market. But
in this research, main focus is to study the behavior of the consumers in the process of
purchasing from online stores. There are many theories and models that identify the consumer.
This research is limiting itself on the scenario to identify consumer behavior variables in the
buying process of FMCG goods in India. Consumer behavior would be changed according kinds
of goods and products. Therefore, different factors have different importance in the eye of
consumer based on quality and kinds of FMCG goods. Therefore, this research limits itself only
to consumer behavior in online shopping of FMCG good in India.
 CONCLUSION
It is very important to know the psychology of the consumers in the dynamic environment. Ever
changing buying behavior of the consumers in the digitalized world should be understood
properly to make the business sustainable. The revolutionized economy possesses many threats
and challenges which are to be faced by the marketers today. People should be made more aware
regarding the advantages of digitalized marketing.
The digitalization has brought positive change in behavior of consumers. Also digitalization
gives rewards to consumer in form of coupons, gift vouchers, discount, cash back, cash discount
which motivates them to use digital transactions.
The online shopping is getting popular among the young generation as they feel it more
comfortable, time saving and convenient. It is analyzed from the survey that when a consumer
makes a mind to purchase online electronic goods he or she is affected by multiple factors. The
main crucial identified factors are time saving, the best price and convenience. The best price
factor is popular among people because generally in online markets prices are lower as against
the physical markets. People compare prices in online stores and then review all feedbacks and
rating about product before making the final selection of product and decision. To purchase
online things FMCG goods are in demand because of the best price, convenience and time
saving. Some barriers in the process of online shopping is the lack of quality products reviews
and accurate product information and less product awareness of people living in semi urban
areas.
E-Shopping consumer behavior as shown in the research is a very important aspect of
maintaining an E-Shop. The Internet is becoming more and more interconnected with our daily
lives as it can be seen on the survey through the recurring purchases individuals made on the
Internet. Consumers are using a variety of Internet tools that are placing greater leverage on
consumer bargaining pricing on prices and products avail-able for purchase. The research clearly
showed that consumers are engaged in finding the best deal with the Internet. However, a
question on the validity of actually finding and fulfilling the need planned by purchasing the
product could has been a plus to this report.
 BIBLIOGRAPHY
The following sources of information have been used for theoretical and analysis work.

1) Marketing Management, by Phillip Kotler. Marketing Research, by Naresh K Malhotra

2) https://www.researchgate.net/publication/324246393_CUSTOMERS_BEHAVIOUR_TOW
ARDS_ONLINE_SHOPPING_IN_INDIA
3) https://www.academia.edu/32462617/CONSUMER_BUYING_BEHAVIOUR_TOWARDS
_ONLINE_SHOPPING
4) https://www.emerald.com/insight/content/doi/10.1108/BPMJ-02-2015-0022/full/html
5) https://papers.ssrn.com/sol3/Delivery.cfm?abstractid=2009242
6) https://pdfs.semanticscholar.org/7ac2/6f15d849b1c30858fbb01e2d2375492c3c02.pdf
 APPENDIX
The following questionnaire was administrated to conducts the survey of the respective

sample: Dear Sir/Madam,

I’m Vivek Agarwal, student of PGDM 19-21 in IILM Academy of Higher Learning, Lucknow
and presently doing a project on “Understanding online buying behaviour: reference from
FMCG industry”. I request you to kindly fill the questionnaire below and assume you that the
data generated shall be kept confidential. I would be obliged if you co-operate with me in filling
the questionnaire.

Demographic Profile

1. Gender Analysis
(a) Male (b) Female

2. Age Analysis (years)

(a) 20-25 (b) 26-30
(c) 31-35 (d) 36 and above

3. Educational Qualification
(a) Matriculate or below (b) Intermediate
(c) Bachelors (d) Masters and above

4. Living in which area?

(a) Urban (b) Sub urban
(c) Rural (d) Posh
(e) Others
5. You use internet for?
(a) Shopping (c) Information
(b) Communicating (d) Making friends

6. Do you pay attention to advertisements on Internet?

(a) Yes (b) No

7. How often do you shop online?

(a) Not very often (once or twice a month) (b) Not often (once every two weeks)
(c) Often (once a week) (d) Very often (twice in a week)

8. Does Social Media influence your buying decision?

(a) Agree (b) Disagree
(c) Neutral (d) Neither

9. What products do you buy most often from the internet?

(a) Home Hardware (b) FMCG goods
(c) Home (d) Electronics

10. What is most important to you when buying on the internet?

(a) Usage (b) Brand name
(c) Discount price (d) Social activism

11. When visiting a website, which would have the strongest negative impact on you?
(a) Lack of product information (b) Lack of discounts offered
(c) Lack of graphical representation (d) Lack of customer reviews

12. What is your preferred source for your buying decision?

(a) Company’s website (b) Social media

(c) Friends and relatives (d) Advertisements