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.
References
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https://www.fssai.gov.in/upload/media/FSSAI_News_Ayurveda_IndiaBriefing_03_08_2018.
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