Homework Title / No.

: 1 Course Code: GEN 702

Course Instructor : Dr. Babli Dhiman Course Tutor (if applicable) : ____________

Date of Allotment : 13/09/2010 Date of submission : 23/09/2010

Student’s Roll No. RQ1001A11 Section No. : Q1001

Declaration:

I declare that this assignment is my individual work. I have not copied from any other student’s
work or from any other source except where due acknowledgment is made explicitly in the text,
nor has any part been written for me by another person.

Student’s Signature : _____________

Evaluator’s comments:
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Marks obtained: ___________ out of ______________________

Content of Homework should start from this page only:

Introduction

Perception is the state of one’s mind, awareness, knowledge and understanding regarding a
particular subject or situation and Customer perception can be defined as a customer’s behavior
or understanding and thinking towards a product or service. Robins Stephen P. defines Customer
perception as, “A process by which individuals organize and interpret their sensory impressions
in order to give meaning to their environment.” Perception can differ from reality, as what a
person perceives is not always true when a person experiences it. Customer perception is not
based on the features and services of a product but on the value that the customer feels the
product or service carries. Customer Perception depends on the product, price, promotion,
packaging, brand, advertisements and many more factors

Customers have different perceptions towards different products and brands, as customer’s
perception towards hair oil, usage of hair oil is a traditional Indian habit, it is perceived to offer
hair nourishment, cooling effect, hair growth, strengthening of hair, reduce the problem of falling
hair and help in removing dandruff. The penetration of hair oil is fairly high, around 87% and is
evenly distributed among rural and urban areas. In context to the Dabur brand, Dabur Amla oil or
Dabur’s Vatika oil is what they provide to the market, consumers have a different perception to
this brand than the others.

Dabur’s inception dates back to 1884, in a small Pharmacy of Calcutta by Dr. S.K. Burman who
launched his mission of making Health Care Products. In 1936, it became a full-fledged
company Dabur India (Dr. S.K. Burman) Pvt. Ltd. It later shifted its operation to Delhi in the
year 1972. It became a Public Ltd company after its merger with Vidogum Limited. Dabur runs
three major strategic business units (SBU), Consumer Care Division, Consumer Health Division
and International Business Division. Dabur’s products are marketed in over 60 countries. The
turnover of Dabur (FY 2009) was Rs.2834.11 crores.

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The brands under its different divisions are as follows:

Consumer Care Division- under CCD, it has four distinct business portfolios of Personal Care,

Home Care, Health Care and Food.

Dabur- Ayurvedic health care products

Vatika- Premium Hair Care

Hajmola- Tasty Digestives

Real- Fruit Juices & Beverages

Fem- Fairness Bleaches & Skin Care Products

Consumer Health Division- under CHD, it offers Ayurvedic medicines and Ayurvedic OTC
products that give ayurvedic benefits in ready to use formats. It has more than 300 products sold
under prescription and over the counter.

International Business Division- It caters to health and personal care need of customers across
different international markets.

Dabur India is the name that is well known in every household. It has a very strong presence in
the market.

Review of Literature

There are various studies which have already been conducted, on various dimensions of
Customer Perception towards Fast Moving Consumer Goods (FMCG) and Beauty and Personal
care products. Some of the studies and findings in relation to this area are mentioned here.

Ann Kris (2009), in his article, “Brand Recognition will change customer perception”, explained
the customer’s inclination to known and recognized brands. Big businesses realized the
importance of spreading brand knowledge among customers long ago. He states that it helps in
altering the perception of customers towards the brand and brand recognition building is one of

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the first steps of the inception of a new product or brand. Advertising is the most common way,
though this would take a lot of time. False hype should not be built as this might never get out of
the mind of the customer which can lead to long term rejection. He suggests that Custom logo
and brand name should be constantly exposed to the customer.

Laura Lake A. (2009), in her book, “Consumer Behavior for Dummies”, expressed about the
meaning of consumer perception, its development and eventually leading to the decision-making.
Perception is how people understand things around them, based on the information received
through their senses. Based on this stimulus, they subconsciously evaluate their need, values and
expectations, then they use the evaluation to select, organize and interpret the stimuli. Consumers
make decision to buy based on their perception. Marketers cannot force a perception on the
consumers but they can understand it and influence it, by making their marketing strategies
according to them. The internal sensory characters that influence consumer’s senses are vision,
taste, smell, sound and feel. The external characteristics that influence consumer’s senses are
intensity and size. After receiving and organizing the stimuli, the consumer interprets it by using
the physical appearance, stereotypes, first impressions, early information and halo effect. She
stated that the common mistake made by businesses are their assumption that consumer’s
perception is based on the features and benefits of the product but in fact its based on the value
that the product would provide. Consumer’s perception of value depends on their own criteria.
To ensure that consumer place best value on the product or services, best quality needs to
provided to them, service and support should be immediate, delivery should be made at the right
place, in right condition, etc, to over exceed the consumers expectation. Laura even states that
while making marketing strategies, it should be kept in mind that perception is unique to each
customer, no two people view the world exactly the same and perception is not necessarily as the
world is in reality, but more often it is as a person thinks of the world.

Stein Sammy (2010), in his article “How Motivation and Perception Influence Consumer
Behavior?” described the influence, motivation and consumer perceptions have on the behavior
of the consumer. Companies motivate the consumer by means of being pioneers in the latest
technology, quality, celebrity endorsements; these motivate the consumers to be among the elite
group. Perception influences consumer behavior too, consumers want to be perceived as being

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part of a particular group, having good taste, a flair, or making good choices. He states that
motivation can affect how a person is perceived, consumer behavior is heavily influenced by
motivation and perception and companies know it very well.

Recklies Dagmar (2006), in his article, “Understanding and Managing Customer Perception”,
explained that customer’s perception in today’s market not only depends on the price, product
and value, customer satisfaction but more than that a relationship needs to built with the
customer, to keep his perception positive. He found that customers were more informed, they
had a wider choice of often less distinguishable products, they know where to buy from by
finding different deals, so the traditional methods of differentiation through price, quality,
functionality are of no use. He states that development of a strong relationship between the
company and customer can bring competitive advantage. It’s about the perceived experience a
customer makes in his interactions with the customer. With this the customer because of the
emotional bond that he has made with the company that he prefers the products of the company.
Loyal customers truly prefer the product, and loyalty goes beyond a rational decision for known
quality or price-performance ratio, it is about the customers perceptions about the brand.
Involvement of feeling, emotions and perceptions is an important point, because these
perceptions have become much important for gaining sustainable competitive advantage.
Customer’s perceptions are dynamic, with the relationship building, the perceptions regarding
the brand, product or services would change. With more experience his perceptions would shift
from fact based judgments to more general meaning. He also suggests that with changing
circumstances, the customer’s perceptions can change too, so company has to keep in mind that
behavior and perform and modify accordingly. He suggested that to keep the customers,
companies should circumvent the loss of exclusivity associated with high market share is to
leverage the brand by introducing new related market. Where customers perceive high market
share lead as a sign of quality, a high market share should be advertised. Contact the customers
who indicate low results for loyalty and perception of the company in the surveys and follow-up
should be done.

Wanninayake & Randiwela (2008), in his article, “Customer Attractiveness towards Green
Products of FMCG sector: An Empirical Study”, explained the attitude of consumers towards

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eco-friendly products and their willingness to pay for green products. With the growing concerns
for the nature and environment, people are getting more inclined towards the use of green
products. The basic factors such as convenience, availability, price, quality and performance are
something consumers will never compromise on. As the society has become more complex with
environmental issues and unethical business practices, both the consumer and business became
concerned with natural environment. They found that despite of the age factors, educational
level, gender factor, all consumers are becoming inclined towards ecological products. The
impact of green marketing has been strong on the consumer’s buying decision overall. They
concluded by suggesting that organizations should pay more attention to this aspect otherwise
they might loose the customer to their competitors. Marketers can identify consumer
environmental needs, and develop products to address this issue, produce eco-friendly packaging
i.e. bio-degradable, recycle, reuse, for this marketers can charge higher price for their product by
highlighting the eco-friendly feature.

Woo Kyong Kim and Juhyeon Kim (2009), in their research “A study on the Consumer’s
Perception of Front-of- Pack Nutrition Labeling”, explained perception of the consumers in
Korea towards the labeling of food. They found that 13.4% of the processed foods had labeling
on it and many consumers always checked the labeling and some of the consumers seldom
checked it. In addition, a large number of the consumers thought that front package labeling was
important and even more consumers thought it was important to know the percentage of the daily
value as a way of front package labeling. They suggested that front of pack nutrition labeling is
important and should be updated and improved constantly as it helps consumers understand the
nutrition value.

Mukherjee Abhijeet (2008) in his article, “Good Packaging can Change Consumer Perception”,
explained the change in perception of the consumer with innovative and different packaging of
Fast moving Consumer Goods (FMCG). Packaging has become an important aspect, when the
quality of two products is same; the consumer tends to go in for the packaging. There is o
restriction as to the color and design of the packaging, so the companies are taking the benefit of

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being innovative and attracting the customers. They observed that this was not so a few years
back, as not much emphasis was given on the packaging, but now with technology up gradation,
awareness and increased competition, smaller brands established themselves in little time.

Mulky Avinash G. et al. (2007), in their article “Price Endings and Consumer Perception”,
explained the impact of price ending with ‘9, it has a different recollection from other price
endings and the impact it has on consumer’s perception of value, quality and recall of a product.
They stated that there are number of theories that have been proposed in the context of price
ending, based on it they have divided it into “Level effects” and “Image effects”. Level effects,
referred to as underestimation effects, are the skewed perception of price levels due to price
endings and Image effects are the consumer’s perception of the firm behavior as a result of price
signal. They found that that there is a definite relationship in the Indian context of 9 endings
being associated with value. 9 endings are related to sales/promotions. Most advertisements
involving a sale or promotion do have 9 ending prices. They also clarified that consumers do
make a decision regarding value based on touching, but they are keeping visual affect in concern.
The signaling of quality by 0 ending is not very strong in the Indian context and non-zero even
endings are not perceived to be different from 0 endings. As in case of internet shopping, feel
and touch, context is missing, so buyer takes cues from the descriptions, price ending can have a
huge impact on the buyer, so it can be used to convey information. Mulky Avinash et al.,
concluded by positing price ending with 9 are high value, product is on sale and that customers
remember the price ending 9 and 0 and there is no difference in the Indian consumer’s perception
regarding non- zero endings and zero endings.

Grewal Dhruv et al. (1996), in their study “The Effects of Price-Comparison Advertising on
Buyer’s Perceptions of Acquisition Value and Transaction Value”, expressed the effect of price-
comparison advertisements on buyer’s perception of value. They examined the perceived
acquisition value (the benefit from acquiring the product relative to the displeasure of paying for
it) and perceived transaction value (the satisfaction of taking advantage of price-offer or deal).
They found that advertised reference price increased the buyer’s internal reference price (the

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mental price scale by which a buyer judges the fairness of an actual price). With the higher
internal reference price, the value of the transaction is enhanced in the buyer’s eyes. This in turn
affects the buyer’s decision to buy the product or to search further for a lower price. They even
stated that with these findings, the common belief that perceived quality is an important part of
the ‘value equation’ was reaffirmed.

Joshi Vivek & Ahluwalia Supreet (2008) “The Impact of Celebrity Endorsements on Consumer
Brand Preferences”, in their article explained the consumer’s favorable attitude towards their
favorite celebrity endorsed product. They observed that marketers should not ignore the fact that
celebrities are mere human beings, if they can bring positive attitude from buyers, they can at
times tarnish the image of the brand because of their involvement in some bad controversy.
Brand is the proprietary visual, emotional, rational and cultural image that can be associated with
the company or the product. Celebrities are the people who have recognition in the society and
are the experts of their respective field. With the help of celebrity endorsing the brand, instant
awareness, easy recall, knowledge about the brand, value and the image of the brand is created,
highlighted and refreshed by the celebrity, credibility and trust can be created. They found that
the known products, names and more exposed products were bought more than the others. All
buyers wanted to buy the products which were more acceptable, highly recognizable and
reputed. They even found that compared to any other type of endorsers, goods endorsed by
famous people had higher degree of recognition and recall. Celebrity created positive feelings
and connected the customer to the brand. A proper match should be there in the celebrity and the
brand. They concluded by positing that the high cost involved in the celebrity endorsement is
justified applied under the right circumstances. The celebrities along cannot ensure the success of
the brand, it’s the combination of several factors and elements that influence the mind of the
consumers.

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References

Ann Kris, (2009), “Brand Recognition will Change Customer Perception”,

Dabur India, http://www.dabur.com/About%20Dabur

Grewal Dhruv, Monroe Kent B & Krishnan R. (1996), “The Effects of Price Comparison
Advertising on Buyer’s Perception of Acquisition Value and Transaction Value”, Marketing
Science Institute, http://www.msi.org/publications/publication.cfm?pub=421#ViewOrder

Joshi Vivek & Ahluwalia Supreet, (2008), “The Impact of Celebrity Endorsement on Consumer
Brand Preferences”, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1625400

Kim Kyoung and Kim Juhyeon (2009), “A study on the Consumers Perception of Front –of-Pack
Nutrition Labeling”, http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2809237/pdf/nrp-3-300.pdf

Laura Lake A. (2009), “Consumer Behavior for Dummies”, Wiley Publication Inc, Indiana, pp.
85-96.

Mulky Avinash G. (2007), “Price Endings and Consumer Perception”, http://tejas-

Mukherjee Abhijeet (2008), ‘Good Packaging can Change Consumer Perception”, The
Economic Times, 15 Aug, 2008.

Recklies Dagmar (2006), “Understanding and managing Customer Perception”, Effective

Robins S.P., (2009), “Organizational Behavior”, Pearson Education, South Africa, p.119.

Stein Sammy, “How does Motivation and Perception Influence Consumer Behavior”,
http://www.helium.com/items/1601996-how-does-motivation-and-perception-influence-
consumer-behavior

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Wanninayake & Randiwela (2008), “Consumer Attractiveness towards Green Products of
FMCG sector: An Empirical Study”, Oxford Business & Economics Conference Program,
Oxford Journal, UK, pp. 22-24, ISBN-978-0-9742114-7-3.

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