Pinto and Diegoin (2010) stated that today's market is globally linked. Every business has its competitors on the international scale who are mainly focusing on improving productivity, shrinking prices, better performance and the physical traits of the product. The fact is that consumers have a wide choice in the same line product and quality, where product quality has always been the first priority, but now it's packaging which affects the consumers' buying behavior. A product reflects the brand behavior from the point of view of the customer. In terms of marketing, a product is anything which fulfills the needs of the customer. It builds the connection between branding, its packaging and the consumer buying choices (Small Business Development, 2015).
Earlier packaging was considered to be a part of the cost in the business but now this theory has changed it to an investment. Packaging plays an important role in directing the growth of the product in the market and also to expand the life cycle of the product in the market. Therefore, the growth of the brands is expressively affected by effective packaging which enhances the consumer brand loyalty to products. According to Bishnoi and Dhillon (2013), the strength of any product depends on its packaging, how it attracts customers and improves visibility. As every country has its own culture, there will be a difference in each country's packaging, considering what consumers like and want. Even in countries with diverse cultures, operating the geographic or urban-rural divide may demand variations in packaging (Bishnoi and Dhillon, 2013).
Everyone has the right to enter the market any time to produce and sell goods according to their own will. All the manufacturers put their efforts to gain consumers by selling tactics. Therefore it is vital to use a variation of packaging forms, size, color, labeling, information and price of same line products. So that particular brands become different from the others.
The objective of the study is to study the mindset of consumers in New Delhi (India) and find out the reasons that influence the consumer when it comes to packaging characteristics of similar line products of (Fast Moving Consumer Goods) FMCG. There are other reasons also which influenced consumer buying behaviour such as ' consumer perception and consumer intention but this study will only focused on packaging characteristics.
FMCG sector is very vast in India. It is the 4th largest sector of the economy providing employment to more than three million people. This is also observed in India that FMCG market is growing at a galloping speed. FMCG always constitutes of the largest part of the income of people of any country and since India has one of the biggest populations of the World, it is significant to conduct a research on Indian base.
The research is focused on New Delhi which is the capital of India also with the wide variety of FMCG products in the market and the richest people of the country (Srinivasu, 2014).
Figure 1.1: Total market size
1.2 Background of the research
According to Shah, (2011) In India, companies such as Dabur foods Ltd., Gujrat cooperative milk marketing federation (also known as AMUL), Hindustan Unilever Ltd., ITC, Mother Diary and Nestle have been a dominant force in the packaging of F.M.C.G. well supported by industry relatively less competition and barriers to entry. These companies were, therefore, able to charge a premium for its products. In this context, the margins were also on the upper side. With the gradual opening of the economy over the past decade, F.M.C.G. packaging companies have been forced to fight for market share. In the process, margins have been committed. Following are the F.M.C.G packaging companies details.
Company Name: Details (Market performance)
1. Dabur foods Ltd. Dabur foods belong to the Dabur India Ltd. Which is the 4th largest FMCG packaging company in INDIA with the market capitalization of Rs.16,000 crores. It is focused on its healthy and holistic lifestyle product from past 125 years.
Revenue ' Rs. 900 crores
2. Gujrat cooperative milk marketing federation(GCMMF) (AMUL) GCMMF is the Cooperative organization which manages the AMUL. GCMMF is the largest food production marketing and packaging company in India with the turnover of US$ 2.2 billion in 2010-2011. AMUL is providing its services since 1946.
3. Hindustan Unilever Ltd. (HUL) HUL is the fast growing and leading food and packaging companies in India. With the revenue of Rs. 5,000 Crores and the net profit of 12%. Its parent company Unilever with the equity of 52% in the market.
Market capitalization-Rs. 61,000 Crores.
4. ITC ITC is one of the India's leading private sector company with the fast market share growth. Moreover, it is also one of the biggest foreign exchange earners (US $ 3.2 billion in recent years) in India. Moreover, It introduced in the market in August 2001 with its packaged food service.
Market capitalization- Rs.137,000 crores.
5. Mother Dairy Mother Dairy solely company owned by National Dairy Development Board. It was established in 1974. They manufacture, pack and markets its dairy products such as butter, ghee, Milk, flavored milk and dahi.
Its market share is 66% in New Delhi.
6. Nestle India Nestle India is a subsidiary of Nestle S.A of Switzerland. In India, it operates co-packers and 7 factories. It holds worldwide sales. The growth of the company took a drastic hike in 2010 with the revenue of Rs. 1,000 Crores and Net profit of 15%.
Market share Rs. 35,000 Crores.
According to Hine, (1995) In past flexible packaging include woven baskets early, leaves, pumpkins, wooden barrel, ceramic and glass containers. Glass containers have a very long history, but the first types of glass containers were very expensive and very rare form of packaging.
The 19th century from 1800 – 1900 was a period of rapid development of packaging systems with the appearance of: metal cans (1818), paper bag the (1850s), folding paperboard carton (1880s), Corrugated paperboard case (1890s), Tubes (eg toothpaste tubes),Milk Bottles ( 1860s).
An overview of some developments in packaging during the last 200 years is as follows.
– 1800-1859s : 1809 (France, Nicolas Appert ) introduced food in glass jars sealed. In 1810, (Peter Durand) introduced container welded tin and marketed using canned food packaging heat. In 1852, (Francis Lana Pennsylvania, USA), introduced paper bag making.
– 1870-1879: corrugated materials used for packaging.
– 1880-1884: Quaker Oats was used as packages.
– 1900-1906: milk containers paraffin wax coated paper were used.
– 1910-1927: waxed cardboard boxes were used as containers, 1912, regenerated cellulose film (RCF) was introduced, 1915, paper bottle, a folded blank box called Pure-Pak, which was delivered flat for subsequent folding, gluing, paraffin wax coating, filling and sealing milk in dairy, 1920, Cartons with waxed paper packaging was introduced(. In 1927, (Du Pont )perfected the cellulose casting process.
– 1930-1935: In 1939, ethylene was first polymerized commercially by Imperial Chemical Industries (ICI) Ltd. Later, polyethylene (PE) was produced by ICI in association with Du Pont. PE has been extensively used in packaging since the 1960s.
– 1947. During the Second World War, aerosol containers were used by the military to dispense pesticides.
– 1950: a pouch for heat processed foods was introduced.
– 1956: squeezable plastic package , Tetra Pak launched its tetrahedral carton of milk that was built from cardboard extrusion coated low density polyethylene.
Tetra Pak launched the Tetra Brik Aseptic system rectangular box (TBA) for long-life milk ultra-heat treated (UHT). The carton TBA has become one of the main forms of packaging in the world for a wide range of liquid foods and drinks.
– 1970. The bar code system for retail packing was used for beverage bottles was introduced; frozen in microwave-safe plastic containers, bag-in-box systems and a range of flexible sealing packaging systems form (FFS) aseptic filling were developed and food.
– 1980. Coextruded plastics plastic materials incorporating oxygen barrier for sauce bottles to tighten and sterilizable plastic containers for foods that could be environmental microwave heated. PET coated paperboard for dual ovenable ready meals.
– 1990. The digital printing of graphics in cuts packaging and labels for food packaging was introduced.
Since the advent of food can in the century, protection, hygiene, product quality and comfort, in previous researches, it is shown that 90s have been the main drivers of food technology and packaging innovation. In recent years, there has been a growing demand for packaging that offers both ease of use and high quality food to consumers with busy lifestyles (Coles et al, 2003).
The last 200 years have seen the package evolve from being a container for the product to becoming an important element of the overall design of the product – for example, the extent of packaging Milk in glass bottles and loose, turned into Cardboard box, plastic bags and plastic bottles in (2005-2015) to maintain oxygen barrier material for long shelf life. In current scenario 2005-2015, within 10 years the packaging concern shifted to quality, reducing theft, eco-friendly, easy and flexible packaging.