A STUDY ON CURRENT SCENARIO OF CONSUMER BUYING BEHAVIOUR

TOWARDS AYURVEDIC FMCG PRODUCT

Nishanth N

Research scholar

Department of Studies in Business Administration,

BIMS, University of Mysore.

Dr. Amulya.M

Assistant Professor,

Department of Studies in Business Administration,

BIMS, University of Mysore.

Abstract

We all know about regular FMCG(Fast moving consumer goods) products and its

importance, but in recent trends “Ayurvedic FMCG products has emerged as important

concept in India like as in other parts of developed and developing countries. There has been

a lot of study on buying behaviour of FMCG products, especially in recent trends majority of

the companies are in the study of buying behaviour of consumer.

Consumer buying behaviour is an excited topic in current days as many country and society

has started to be more aware of Ayurvedic FMCG products and its benefits. It is said

“Healthy nation cause healthy people”, hence studying on buying behaviour of consumer

towards Ayurvedic FMCG product is one of the important factors to analyse the growth

condition of Ayurveda and its future. The Ayurvedic industry will be benefited with this kind

of study to implement the strategy in promoting and selling of products. The demand of

Ayurvedic products is increasing rapidly due to their health benefits and lack of side effects.

The best thing of Ayurvedic FMCG product is that it is made up of herbs and shrubs hence it

is free from side effects.

The present paper is to understand the buying behaviour of consumer which may be useful

for retailers, as well as marketers to recognize and better understand the new trends that occur

in FMCG industries. To target the customer in large and to create awareness about Ayurvedic

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FMCG products it is very important for the producers to study and analyse the consumer

behaviour. This study is based on secondary sources.

Key words: Behaviour, consumer, trends, Ayurvedic Products.

Introduction

As a consumer we are all unique in behaviour and this uniqueness is reflected in

consumption pattern and purchasing process. The study of consumer behaviour provides us

the knowledge on why each consumer differs from one another in buying and using the

products. According to industry estimates, India’s natural products segment comprised of 41

percent on personal care products market in 2017, contributing to US$2.5 billion worth of

revenue. South India and the states like Maharashtra, Madhya Pradesh, and Punjab lead

national growth in the natural products segment. The biggest distribution channel is chemist

shops, which led to 19.4 percent value growth for the segment in FY 2016-17. By 2022, India

expects the market for Ayurvedic products to rise US$8 billion in terms of their FMCG

market share in India, Hindustan Unilever Limited (HUL), the wholly owned Indian

subsidiary of British-Dutch conglomerate Unilever, is the top player followed by ITC

Limited, Patanjali Ayurved Limited and so on. HUL recently launched natural versions for

shampoo brands Tresemme and Clinic Plus and for fairness face cream Fair & Lovely, as

well as the naturals brand Lever Ayush

The study on consumer behaviour is very important for the marketer which makes them to

understand and analyse buying behaviour of consumers in market place. It is not only with

what consumers buy, but also with when they buy it, where and how they buy it, and how

often they buy it, and also how they consume it. According to Professor Theodore Levitt of

the Harvard Business School, the study of Consumer Behaviour is one of the most important

in business education, because the purpose of a business is to create and keep customers

before switching to other. Customers are created and maintained through variety of marketing

strategy and the quality of marketing strategies depends on knowing consumers buying

behaviour. Success of a business is to achieve organizational objectives, which can be done

by understanding the consumer requirement and keeping them satisfied. This suggests, that

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the knowledge about consumers challenges the marketers to think about and analyse the

relationship between the consumers & marketers, and the consumer behaviour & the

marketing strategy.

Consumer buying behaviour meaning and definition

According to Frederick Webster- “Consumer buying behaviour is all psychological,

social and physical behaviour of potential customers as they become aware of, evaluate,

purchase, consume and tell other people about products and services.”

Understanding consumers’ buying behaviour is one of the elements that helps in achieving

marketing goals, without understanding its very difficult to gain more customers. Since

customer is the reason why any organization exists, it is necessary to understand the customer

and study the pattern of his buying behaviour. Especially in today’s competitive world. It also

helps when customers will buy more from business. Their buying behavior is one of the

elements which must be understood for a better view about the customer profile.

Impact of marketing mix on consumer buying behaviour

Neil Borden in 1953 introduced the primary idea of marketing mix while describing

the recipe that was needed to make a successful marketing campaign. The idea was then

given the 4 P’s in 1960 by E. Jerome McCarthy.

The marketing elements that affect a products performance are seen in four distinct functions,

also called the Four Ps of marketing.

Product: Marketer always needs to keep consumers buying behaviour in mind and

design the product that satisfies the unsatisfied needs of the consumers. It is very

difficult for an Ayurvedic products marketer to fulfil the needs of consumer with size,

shape and taste etc which are nature based products. The marketer also has to decide

the important aspects of service, packaging of the product that are eco-friendly to

deliver the product to consumer. With all this challenges, knowing consumer

behaviour is also important in developing product scope.

Price: Majority of time consumer buying behaviour depends on price of the products,

which is also important for a marketer to analyse and decide? Marketer should decide

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what price to be charged for the product to stay competitive in business. When

compared to regular FMCG products, Ayurvedic FMCG products prices are different

which also impact the buying behaviour of consumer to switch to and fro.

Place: Next is distribution channel, where to offer the product and service,

distribution mix plays a major role in deciding the place, Creating demand for

Ayurvedi FMCG product is challenging job for marketer, all the retail outlets does not

sell Ayruvedic products, only selected outlets sell the products and with that

limitation, marketer has to analyse the consumer buying behaviour of the product.

Promotion: Promotion plays a major role in switching the buying behaviour of

consumer towards the Ayurvedic FMCG product. Some of the popular promotion

technique are advertising, sales promotion, online marketing, publicity and direct

marketing. Marketer has to decide which method would be more effective to reach

consumer by knowing the buying behaviour of consumer. This way it is very

important to know the consumer especially in current scenario.

Objective

To understand the concept & fundamental nature of consumer buying behaviour

towards Ayurvedic FMCG product.

To study about the consumer awareness towards Ayurvedic FMCG product.

To study about the factor influencing the consumer to use the selected Ayurvedic

FMCG products.

Methodology

Secondary data sources like Magazines, Books, Newspapers, Digital sources and Journals are

used.

Literature review

Dr. Suvarna discuss about the future of Ayurveda, the huge demand is driven due to

various factors like the stressful working culture, exhaustive lifestyle, the endless quest of

peace, growing ailments with less healthy environment. Today, people are on a constant run

for quality and are ready to spend for the services that can offer them the same in a natural

way, which leads to Ayurveda posing a welcome break for all. A major concern is the change

in product pattern and importance given by most of the firms towards natural product, and the

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failure of regulation systems, which may hamper the spread of ayurvedic tradition in future.

The market for ayurvedic oral and personal care products in India is expected to grow at a

rapid pace over the coming decades. Ayurvedic Herbal manufacturers are investing in

research, constantly coming up with new and innovative technologies, research and

development and products are resulting in more effective Ayurvedic product. Ayurvedic oral

and personal care products are now competing with Non Organic products and they need to

strive to ensure quality that is similar to Non Organic brands.

The Author Chandiraleka (2016) highlights about the customer awareness, factor

influencing the customers to use the selected products, and the buying preferences towards

selected Ayurvedic and herbal products, the author also justify as Ayurvedic products are

reasonably cost effective and well accepted by customers. They are easily available and do

not have side effects. With its rich biodiversity and rich heritage of Indian medicinal system,

India would draw world attention as an abode of eco-friendly medicinal systems that are in

harmony with the nature. The main tools used for the analysis are simple percentage analysis

and Garrett’s Ranking Technique and it is concluded that all the customers are aware of the

product, and most of the customers are satisfied with the quality & price of the product.

Hemanthkumar P (2018) study about the consumer buying behaviour towards

Ayurvedic products. The findings may be useful to online retailers, as well as marketers and

practitioners to recognize and better understand the new trends that occur in the industry of

Ayurvedic products. The author concludes by justifying as people are gradually getting aware

about the Ayurvedic medicine or products and also benefited. People are getting more

fascinated towards Ayurvedic OTC products as compared to the product/medicine suggested

by doctors and the credit goes to PATANJALI which is known as a game changer in FMCG

Industry. Ayurvedic Herbal producers are spending in research, constantly coming up with

new and innovative technologies, research and development and products have come up more

effective in the form of oral and personal care products and is a good sign for India as country

where this magical system of Ayurveda was born.

Supratimm Kundu (2017) discuss about the reason that motivate consumer to buy

Ayurvedic product. The demand for Ayurvedic formulations is increasing both in the

domestic market as well as internationally, putting the total exports at INR 10 billion for 2010

(Krishnakumar,2010). According to some estimates, the domestic sales are growing at an

annual rate of 20 per cent while the international market for medicinal plant-based products is

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estimated to be growing at 7 per cent per annum (IIED and ETS, 2002), the author conclude

saying there is strong positive relationship between green advertisement and green brand

awareness. If the companies adopt green advertising strategies with true environmental and

green claims to create positive green brand awareness, it will result in prompting buying

behaviour and green satisfaction.

Dr. M. Rajarajan highlights the consumer behaviour towards herbal cosmetic products

in India. A huge number of cosmetic and toiletry formulations have been designed and

developed based upon Indian Herbs recently. The author concluded that the market for

Ayurvedic beauty products is growing fast. More and more products now include herbal and

botanical ingredients. Herbal cosmetics are prepared, using permissible cosmetic ingredients

to form the base in which one or more herbal ingredients are used to treat different skin

ailments and for the beautification. The chemical formulation of all these cosmetic products

includes addition of various natural additives like waxes, oils natural color, natural fragrances

and parts of plants like leaves. The demand of herbal cosmetic is rapidly expanding. The

advantages of herbal cosmetics are lower cost, side effects free, environmental friendly, safe

to use and so on.

Awareness on Ayurvedic FMCG products

India Briefing from Dezan Shira & Associates says, in India US$53 billion FMCG

sector is moving towards the wider adoption of Ayurveda. In recent years, its popularity has

dramatically risen due to expanding application in personal care and food products segments.

Previously, Ayurveda based products in Indian market were limited to hair oils, the local

dietary supplement called chyawanprash, but now natural Ayurvedic ingredients are

increasingly being merged into number of products, ranging from shampoos, skincare cream,

oil, powder, toothpaste, gel and soaps to cough syrups, tea, packaged juice, nutritional

supplements, among other FMCG. These products find massive appeal among, both, India’s

urban and rural markets as well as among older consumers already familiar with the

traditional herbal ingredients. Awareness about Ayurvedic products is driven by increasing

popularity of popular brands like Himalaya, Dabur, Vicco laboratories, Patanjali and many

more. Ayurvedic FMCG brand are also driving their products through online and digital

marketing. Several players, from Amazon to Grofers, are expanding the “Ayurveda and

herbal” products category and ramping up product selection, besides expecting three-fold

growth in sales from this category.

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As per data from Kantar World panel, the consumer insights arm of WPP, in the quarter

ended march, Ayurvedic products grew 60% in volume from the year earlier while the overall

FMCG segment grew 6%. Ramdev‟s push for Ayurveda products has given momentum to

the entire segment as Ayurvedic products now reach 77% of Indian homes, up from 69% two

years ago. In one of the recent studies, 71 per cent of consumers surveyed said that they

choose a face cream or body lotion if it is only “natural”, 38 per cent said they would like to

purchase a shampoo or hair oil if it is prepared of botanical ingredients. Now, consumers are

looking for ease in beauty and are aware of harmful effects of chemicals. This has made a

positive demand for natural beauty and personal care products as safer substitutes. IFL is in

the opinion that emerging demand of Ayurvedic and natural products with factors such as low

prices and feel Indianness is providing a nationalistic culture to the nation.

Reason for rational use of Ayurvedic FMCG product

The concept of rational use of Ayurvedic product has not yet fully penetrated into the

minds of consumers, and as a result there is lack of knowledge about Ayurveic product. The

benifits related to Ayurvedic products and traditional ingredients are catching everyone’s

imagination very fast and promise to be the next big thing in FMCG industry. Ayurveda,

combined with the recent trends of increasing acceptance of natural product, this accounts for

a huge potential in the up and coming times for Ayurvedic products. Techsci research says,

the total size of the Indian Ayurvedic market is growing substantially at a rate between 10-15

percent, with the same growth rate targeted for the next 5 years. According to research report,

consumers are increasingly shifting towards products based on natural ingredients due to

health awareness especially young population is contributing to growth of Ayurvedic

products market in India. The fact that Ayurveda provides a viable business opportunity is

borne out by the long and successful runs of several brands in this field that include Dabur

(launched 1884), Amrutanjan (launched 1893), Himalaya (launched 1930), Baidyanath

(launched 1917), VICCO (launched 1952) and many more. Manufacturing in Ayurvedic

products has passed from smallscale production and later to the industrial scale, emerging as

a competing alternative to the regular FMCG market. Earlier, in the initial half of the 19th

century, a number of households produced and distributed ayurvedic products. But the

production and distribution was not based on any pricing mechanism. This means that while

raw herbal, metal and mineral products were traded and marketed in a big way, readymade

products were never considered as a “commodity” to be marketed for money. In the mid-19th

century, demand emerged for Ayurveda. The leading companies like Dabur, Zandu,

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Himalaya, have achieved a significant growth in the last few years. In 2003, among 9,000

ayurvedic firms, a mere 2%, constituted more than 80% of the market share, while the rest of

the firms had a smaller percentage, though they have a strong niche market in some regions,

especially in rural areas.

Attitude of consumer on Ayurvedic FMCG products

Attitude consists of thoughts or beliefs, feelings and intentions towards a particular

product or services. Understanding consumer’s attitude can help a marketer to know

consumers better and even change their attitudes. Consumers worldwide are going green and

this is especially true in today’s market. The market share of natural based products has been

increasing gradually and consumers are more aware with better informed than ever before.

They are becoming conscious of the ingredients that go into the products that they use and are

cautious about the chemicals that are known to cause side effects, due to which demand for

Ayurvedic FMCG product is increasing day by day. Report published on economic times

Nov 2018 by PwC, 77 percent Indian households use Ayurvedic products and the size of the

Ayurvedic market is expected to increase from $3.4 billion in 2015 to $9.7 billion by 2022.

This report is one of the evidence for change on consumer’s attitude towards Ayurvedic

FMCG product.

Challenges to find buying behaviour of consumer

Consumer behaviour refers to the selection, purchase and consumption of goods and

services for the satisfaction of their wants. There are different processes involved in the

consumer behaviour. Initially the consumer tries to find what product to consume, then

selects only those products that promise greater benefits. After selecting the product, the

consumer makes an estimate of the available money which he can spend. Lastly, the

consumer analyses the prevailing prices of product and takes the decision to consume.

Meanwhile, there are various other factors influencing the purchases of consumer such as

social, cultural, personal and psychological factors and this has become a big challenge for

marketer to analyse the buying behaviour of consumer especially consumers buying

Ayurvedic FMCG products.

Cultural factors: Consumer buying behaviour is deeply influenced by cultural

factors such as buyer culture, subculture, and social class. Basically, culture is the part

of every society and is the important cause of person wants and behaviour. The

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influence of culture on buying behaviour varies from country to country therefore

marketers have to be very careful in analysing the culture of different groups, regions

or even countries. Each culture contains different subcultures such as religions,

nationalities, geographic regions, racial groups etc. This becomes challenge for

marketer to develop the products. More and more groups causes increase in

production cost, producing different varieties in small quantity leads to more cost than

producing single variant in large quantity. Every society possesses some form of

social class which is important to the marketers because the buying behaviour of

people in a given social class is similar. In this way marketing activities could be

tailored according to different social classes. Here we should note that social class is

not only determined by income but there are various other factors as well such as

wealth, education, occupation etc.

Social factors: Social factors also impact the buying behaviour of consumers. The

important social factors are reference groups, family, role and status. Reference

groups have potential in forming a person attitude or behaviour. The impact of

reference groups varies across products and brands. Family factor is influenced by

member of a family, therefore marketers are trying to find the roles and influence of

the husband, wife and children. Basically in regular FMCG product the buying

decision of a particular product is influenced by wife then the marketers will try to

target the women in their advertisement, where as in Ayurvedic FMCG product it is

difficult to target particular segment and increase the business, depending on one

segment is risky for the marketer to compete in the business.

Perception: Selecting, organizing and interpreting information in a way to produce a

meaningful experience of the world is called perception. Each individual has different

perception towards the product they buy, it is very difficult to ready the mind of each

individual. When a product is created both pros and cons gets created with its feature,

but finally it depends on the consumer to decide which product to buy. Ayurvedic

FMCG products are growing with positive result, but we never know when the

perception of the consumer change? And this has become the major challenge for

marketer to analyse the buying behaviour.

Beliefs and Attitudes: Consumer possesses specific belief and attitude towards

various products. Since such beliefs and attitudes make up brand image and affect

consumer buying behaviour therefore marketers are interested in them. Marketer need

lots of effort to change beliefs and attitudes of consumer on the product they develop

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and it require R&D, campaigns, promotion and huge investment. In current

competitive scenario, Ayurvedic companies are facing lots of challenges in knowing

the consumer behaviour and also competitor behaviour.

Suggestion

Ayurvedic FMCG products have competition within same segment as well with

regular FMCG product, hence marketer needs to be more cautious in knowing the buying

behaviour of consumer and update the products as per the needs. Focus on customer

engagement as how often customers connect with advertisement of regular FMCG products,

based on the analysis Ayurvedic companies has to build strategy for Ayurvedic FMCG

products through upgraded technique to attract the customer. Ayurvedic product sellers both

in urban and rural areas should try to sell good quality product at reasonable price and avoid

selling duplicate quality which affects the health of human beings. Proper research should be

carried out to produce quality product, to know consumer behaviour and to analyse the brand

loyalty which will certainly enhance the demand pattern of Ayurvedic product both in urban

and rural areas. Ayurvedic FMCG companies needs to utilize technology in understanding

the buying behaviour of the consumer, concentrate more on digital market, conduct survey,

conduct competition to better understand consumer needs and requirement, based on the

analysis Ayurvedic companies has to build strategy for Ayurvedic FMCG products.

Conclusion

This is the right time for Ayurvedic companies to understand the buying behaviour of

consumer and develop the product for competing globally. From the above suggestions of the

study it is concluded that the market for Ayurvedic FMCG products is growing fast. Many

companies have entered the segment with branded products in categories such as skin care,

hair care, soaps and essential oils etc. Concern about harmful chemicals in consumable

products has increased consumer interest in natural product. More and more products now

include herbal and botanical ingredients. Today, India is captivating the mainstream

Ayurvedic industry in a big way, to put it in a nutshell as long as human-beings are there in

this world, Ayurveda would also exist and its marketing both in rural and urban areas would

have a bright future. Ayurveda has a bright future in India as a business proposition due to the

ever increasing demand for natural products, and many big brand Ayurvedic companies are

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doing its best to understand the buying behaviour of consumer, but is it enough to grow and

compete in business? Answer left by consumer.

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