Understanding brand switching behaviour in FMCG industry

Abstract

The FMCG industry is a big industry with many competitors fighting the battle of wining the consumers' heart. The aim of these companies is to make the daily life of consumers simple and worth living. With the multiple products that the FMCG companies produce, each of them has a different value proposition, but they all are an alternative to one another since they carry the same objective. Hence, consumers have multiple options to choose from and there exist the easiness to switch to another brand. Thus, it becomes the job of the Marketing Manager to drive consumers' attention to their brand's product. Brand switching can be termed as the attitude of the consumers when they decide to purchase a similar product from another brand. With this switch, their brand loyalty towards a brand they have been buying for so long, terminates. Marketing Managers usual ly classify their consumers into loyalists, neutral and switchers on the basis of their brand affiliation towards the Marketing Manager's brand. For any Marketing Manager, their objective is to have maximum brand loyalists and their day-to-day task is to convert the switchers to stick to their brand. For an FMCG Marketing Manager, there exists a major challenge. FMCG products are usually viewed as low-risk investment since they are used for a shorter duration as compared to other products such as consumer durables. They are also not highly priced too. Hence, consumers of FMCG products put in less time in deciding what FMCG product to buy. Thus, it requires great deal of effort to convince the consumer to buy a particular brand. Thus, we decided to delve deeper and understand the kind of push or incentives required for an FMCG brand to drraw the attention of consumers. In an FMCG sector, we categorised the products into Health Care products, Personal Care products and Food & Beverage products. Health Care products include sanitary pads, clear wipes, energy drinks, ayurvedic products, etc. Personal Care products include shampoo, soap, lotion, facewash, perfume, etc. Food & Beverages products include chocolates, chips, biscuits, aerated drinks, food drinks, etc. With this classification, we also decided to understand if there was any change in the buying attitude of consumers for these products which could further help us understand the willingness to switch in these categories. With the objective of understanding what makes consumers switch and stay loyal to an FMCG brand, we decided to do both primary as well as secondary research. We conducted secondary research through literature reviews by scholars available on the internet as well as visit to the Market Research Agency (Nielson Private Limited) to get insights. With the insights that we got, we wrote a theory development to be tested through the primary research. Our primary research consists of survey to 30 consumers; experimenting the shopping list and behaviour of 10 consumers for 4 months; and an in-depth interview of 3 consumers who are the FMCG buyers in their household. Our literature review highlighted the importance of brand loyalty which can be enhanced through constantly evolving the brand as the consumer needs changes. This helps the consumers to remain faithfu l to the brand. For example, consumers currently favour a seamless consumer experience. Some consumers use both shampoo and conditioner while washing their hair. Consumers find it a pain to buy both shampoo and conditioner. Proctor and Gamble's shampoo brand " Heads & Shoulders" came out with a product that has both shampoo and condit ioner bundled in one bottle, thus saving consumers from the pain of buying two bottles. It was also understood from the literature review that for a Marketing Manager looking to attract consumers, he/she should consider planning a strategy for advertising, sales promotion, pricing, product attributes and availability. The meeting with Mr. Vishay from NielsoniQ. added to our secondary research insights that product attributes and availability of the product plays the most important role in getting consumers to switch to another brand in an FMCG industry. In an FMCG industry which has low risk investment products, consumers generally don't think much or take t ime out to decide what FMCG brand to buy. Hence, availability becomes an important push to get consumers to buy the brand. Imagine, a consumer, feeling very thirsty on the highway from Chennai to Bangalore, stops at a dhaba on the way and buys a Frooti because it was the only drink available to quench her thirst. Thus, it is important for the product to be present everywhere. He also highl ighted that consumers think more for health care products followed by personal care products. Food & Beverages products brands were least thought of buying. With these secondary research insights, we developed a theory to be tested via the primary research methodology. The survey insights by 30 respondents supported the theory that consumers don't think much for food & beverages brands. Certain consumers think of what personal care product brand to buy while all the consumers carefully think about what health care product brand to buy. Most consumers rated advertising, available, promotions, pricing, and product attributes as the reasons to push them to try another brand. We also observed the shopping list of 10 consumers for 4 months and questioned them on any changes in the brands they bought. We also questioned their loyalty for the brands they didn't switch. The insight we received from them was that health care involves a great risk since a wrong brand product can cause side effects, so most people don't easily trust new brands. However, some cited the changes personal care brand due to new features such as anti-dandruff abilit ies, or smooth skin as the reason to experiment and change brands. For food and beverages, most of them cited avai lability. They picked up brands that were available in the nearest store. The in-depth interview oft he three consumers perfectly aligned the same insights and proved the theory that was developed to be right. They added on that Word of Mouth plays a key role since they trust their families, friends, and relatives. With the insights, we got from the primary and secondary research, we derived the conclusion that the Marketing Manager needs to think of constantly think of new product attributes evolve their brands in tune with the consumers' changing needs. There is a need for the Marketing Manager to invest more time in ensuring their product is available in every store. They can also encourage advertising and sales promotion which aids consumers to try the brand and later switch as per their choice. Word of Mouth can be encouraged by the Marketing Manager through brand engagement. Reasonable pricing can be a competitive advantage. The Marketing Manager also needs to consider the different buying attitudes of consumers in the three FMCG categories.