A REPORT

ON

CONSUMER BEHAVIOUR AND PERCEPTION TOWARDS CIGARETTE

By

Saikat Dey

Roll No- ISB/09/KOL/035

The report is submitted as partial fulfillment of the requirement of

PGDM program of ISB-K

VST industries limited

International school of business Kolkata

Indismart leadership centre

EN 34, Salt Lake Electronics complex

Sector- V, Kolkata- 700091

Acknowledgement
The real spirit of achieving is through the way of excellence of austere discipline, without which
I would never have succeeded in finishing it without the co-operation, encouragement and help
provided to me by various personalities. With this deep felt consent and pleasure, I would like to
express my heartfelt gratitude to all those who helped me in preparation of this project.

It gives me immense pleasure in expressing my deepest and sincerest

gratitude towards my project guide Mr. Pravin Kumar Singh ( sales manager of VST industries
limited ) and Mrs. Kumkum Mandal ( faculty guide of International school of business, Kolkata)
and for their considerate help, inspiring guidance throughout this work.

I shall be failing in my duty if I do not thank all the other Quality

personals and other lect. for source of constant encouragement and co-operation, throughout my
project. I would like to thank Dr. Suborno Bose, Chief mentor of ISBK, P.K. Gupta, Director of
ISBK, Dibyendu Chattaraj, SIP coordinator and the last but not the least Mr. Debasish Roy,
Faculty guide of ISBK without whom I would not probably able to get any opportunity to
accomplish my SIP from such a nice company VST industries limited.

I would be defying if I do not mention my constant source of

inspiration and vitality, that is, my parents who invested their present for my future and for their
co-operation, support and encouragement without which I could not have seen the light of the
day.

Certificate
This is to certify that Summer Internship Project on “Consumer Behaviour and perception
towards cigarette” was done by Mr. Saikat Dey (PGDM + MBA) student of INTERNATIONAL
SCHOOL OF BUSINESS, KOLKATA – 700091 in partial fulfillment of requirement for Award
of Post Graduate Diploma in Business Management and that the Project was carried out under
my guidance.

Place – Kolkata ………………………………...

Date - Mr. / Mrs.

(Faculty & Internal Guide),

ISB, Kolkata

Declaration
I hereby declare that the Summer Internship Project titled “Consumer Behaviour and perception
towards cigarette” being submitted for Award of Post Graduate Diploma In Business
Management has not formed the basis for Award of any other Degree, Diploma, Associate or
other similar title and this dissertation was done independently by me under the guidance of Mr.
Pravin Kumar Singh of VST industries Limited and Ms. Kumkum Mandal of International
School of Business, Kolkata – 700091.

Place: Kolkata ………………………….

Date:

CONTENTS
Chapter Page No.
1. Executive Summary 1

2. Introduction
a. Rationality of the project 2–3
b. Consumer behaviour 3–6
3C-I analysis
c. Industry overview 7 – 11
d. Company overview 11 – 14
e. Competitors 15
f. Consumers 15 – 16

1. Objectives of the study 17

2. Research Methodology of the project 18 – 20

3. Research design, analysis and findings 21 – 39

4. Conclusion 40

5. Recommendations 41 - 45

6. Limitations 46

7. Bibliography 47

8. Appendix 48 – 51
Executive Summary
The project talks about the “consumer behaviour and perception towards cigarettes “.The study is
more concerned with the consumer behavior. The decision making is processes where by a buyer
decide to purchase a particular product out of various alternatives. Thus the study conducted is of
real importance as it helps the management to have a good knowledge of the buying behavior.
The study also helps to understand the reasons why one chooses the organization’s product and
why some choose the product of that of competitors. The study of consumer behaviour provides
critical information to the marketing managers in developing the marketing strategies and tactics.
The first few pages talk about the introduction and the objectives of
the study. This is followed by the research methodology of the project. Next comes research
design and findings. This part consists of mainly survey. It shows two types of survey-

 Survey to the retailers.

 Survey to the consumers.

The purpose of these surveys is to study the purchase behaviour of the consumers and
acceptability of product in the market. The project enables the managers as well as the other key
personnel to understand the local market with respect to the consumer’s perception. The product
offering will be designed from the consumer’s point of view and hence will be more acceptable
by consumer. The improvement process will be synergized with the support of the research
findings. The sales people will be beneficiated by the research findings in designing the sales
process.

The last part consists of recommendation, conclusion, limitation, and the bibliography. In
recommendation part I have given some recommendations that could help the company to
improve their managerial decision and adapt innovative marketing strategies. In conclusion part I
have concluded my research work. Limitation part depicts the major limitations (geographical,
time etc) of my project. Bibliography depicts major sources from where I have collected several
data that helped me a lot to prepare my project. The questionnaire and other important
documents have been annexed to the report.
Introduction
Rationality of the project
VST industries limited is a well known tobacco manufacturing company in India. They also deal
with the exporting of cigarette to the European countries. Today there are so many companies
dealing with cigarettes. So the competition in the industry is immense, for survive in the market
for any company, it must study the factors influencing the consumer’s behavior while he select a
particular product. So it is clear that this study is vital for all the companies in the market to
achieve their objectives by satisfying the needs of consumers.
The study is more concerned with the consumer behavior. The decision making is
processes where by a buyer decide to purchase a particular product out of various alternatives.
Thus the study conducted is of real importance as it helps the management to have a good
knowledge of the buying behavior. The study also helps to understand the reasons why one
chooses the organization’s product and why some choose the product of that of competitors. The
study of consumer behaviour provides critical information to the marketing managers in
developing the marketing strategies and tactics.

Scope of the study

The consumer or buyer is the person or group of persons, who decide what to buy when to buy
and what not to by. In competitive environment one cannot thrust a product on consumer. He has
to produce what is demanded or what can be demanded. The marketing personnel study
consumer behavior to find out what can be sold and what goods and services are likely to be
rejected. Through the study he is motivated to buy or not to buy after study of consumer behavior
through market research or otherwise manufacturer tries to find out how sales can be pushed of
existing products, what changes are required in existing products, what changes are required to
get larger market share. The more important function and purpose is to influence the behavior of
consumers through advertisements, free offers and other methods so that consumer behavior is
studied buy marketing personnel to influence the behavior of consumers after studying what
factors decides the behavior for a particular product, persons, groups or regions.
The scope of the study covers the areas of various products offered by VST
industries ltd. The research study is limited to the area of district of Kolkata. The factors which
influence consumer buying decisions like price of the product, brand name or reputation of the
company, attributes of the product, advertisement, accessibility, quality of the product, previous
experience etc are taken into consideration.
Managerial usefulness of the study

 The project enables the managers as well as the other key personnel to understand the
local market with respect to the consumer’s perception.
 The product offering will be designed from the consumer point of view and hence will be
more acceptable by consumer.
 The improvement process will be synergized with the support of the research findings.
 The sales people will be beneficiated by the research findings in designing the sales
process.

Consumer behaviour related to smoking

Addictive consumption decision making

In economic analyses consumers are often assumed to be rational decision makers. They are
expected to perform rationally when purchasing products; however, in reality, consumers'
choices and actions often result in negative consequences relating to themselves as well as their
society. Addictive consumption, compulsive consumption, and illegal activities are some
examples of the less attractive side of consumer behavior. Numerous studies have confirmed the
importance of less attractive consumer behavior in various aspects of consumer decision making
(Elliott, Eccles, & Gournay 1996; Solomon 2007).

Physiological and psychological factor

Consumer addiction is a consumer's physiological or psychological dependency on certain
products or services. Becker (1992) defines habitual behavior as displaying a positive relation
between past and current consumption, as the time periods compared are not very close. In other
words, a habit may grow into addiction when the effects of past consumption on present
consumption are too strong to be destabilized. Becker further notes that addiction may possibly
be a strong habit. This is taken as the definition of addiction. Becker divided habitual behavior
into the following two categories: harmful habits and beneficial habits. If a habit is harmful, it
indicates that present consumption lowers future utility. By contrast, if a habit is beneficial, it
indicates that present consumption raises future utility. Typical examples of harmful habits
include cigarette smoking, excessive drinking, and use of drugs (e.g., cocaine), since they can
lead to illness and depression. Previous studies in this field have mostly focused on cigarette
smoking, alcohol use, and drug use; Internet addiction ; and shopping addiction.
Risk perception
There are many factors that can affect a consumer's attitude toward addictive or habitual
consumption. One of the factors of great concern is an individual's risk perception. The concept
of risk in economics was originally proposed in 1920 (Knight, 1921). Bauer (1960) introduced
the concept of perceived risk to marketing literature. As behavioral decision studies have shown,
individuals have the ability to reliably incorporate risk perception into their purchasing decisions.
Several studies along this line have found a relationship between an individual's risk assessment
and the consumption of addictive products. However, there is one issue remaining: How do
individuals form their risk perceptions? Do information sources have a direct influence on
consumers' adoption intention or do they have only an indirect influence towards the product,
through risk perception and attitude? Are information sources more likely to influence the
consumer's risk perception when s/he is not addicted to the product as compared to when s/he is?
This study was aimed at addressing these questions.
The empirical section of this study examines cigarette smoking. Cigarette smoking is a major
public health challenge worldwide and has been recognized as a risky consumption activity. The
linkage between risk perception and smoking behavior was found in the following statistics. In
the 1950s, between 40% and 50% of Americans believed that cigarette smoking was a cause of
lung cancer. By the 1980s, this figure had jumped to over 80% (Viscusi, 1991). As The
Economist reported in an article entitled "Why do Europeans smoke more than Americans?"
(April 2006): "Judging by lungs, Americans are fitter than Europeans. Only 19% of adult
Americans smoke, compared to 34% of Germans and 27% of Britons". The gap between
Americans and Europeans may be best explained not by prices or income levels, but by
ignorance. Europeans are less likely than Americans to believe that smoking is harmful. Only
73% of Germans, for example, believe smoking is dangerous, as compared to 91% of Americans.
Consumer behaviour and purchase process analysis- cigarette industry
The following are research findings regarding the purchase process in the cigarettes category –
1 Problem Recognition:
 First time use is triggered by external stimuli such as peer group, first time consumption
is influenced by others almost 100% of the time.
 Significantly first-time use does not have a high correlation with a brand loyalty.

 Habitual users consumption need recognition may be divided into the following
categories-
✔ With established consumption patterns- consumption is ranked as a
majority who smoked any time of the day, those who smoked after a
fixed interval of time, and those that smoked after meals or during
breaks.
✔ With established consumption occasions- Frequent smokers did not
exhibit specific occasion consumptions. Less frequent smokers ranked
occasions as follows- with friends, office breaks, with alcoholic
beverages, when alone, when stressed and lastly to improve
concentration.
✔ Significant variation was found in the sample based on the consumer’s
gender where in frequency of consumption with females was
substantially lower and occasions were largely with friends or with
alcoholic beverages, females tended not to smoke at office or in public
places.
2 Information search:
 Rarely an active search- brand familiarity and loyalty among smokers is significant.
 Alternative seeking is minimal and varies inversely with rate of consumption ( i.e;
frequent smokers do not exhibit variety seeking buying behavior )
3 Evaluation of alternatives:
 Not structured evaluation, vaguely- defined criteria.
 Parameters for evaluation declared as follows ( in descending order of rank )- taste,
brand, association with self – image, availability, size, hardness, price, health.
 Parameters were more in the consumer’s mind than obviously conscious decisions and
varied with psychographics instead of demographics ( common demographic segment
exhibited varied evaluation criteria )
4 Purchase decision and implementation
 Limited problem solving behavior.
 Huge degree of brand loyalty.

 Time and non availability are not significant constraining factors for brand decisions or
long term consumption. However, short-term consumption may be dependent on
availability.
 Transforming a purchase intention into a purchase decision is influenced by a variety of
factors. In the long-term decision to purchase is based on the decision to continue, reduce
or quit smoking, and is based on the following criteria (in descending order of rank) –
Personal health, family pressure, family health, religious reasons, guilt. Brand decision is
based on image (further dependent on peer image and association with self-image). It
should be noted however; that these ranks were given by consumer’s themselves and
guilt is liable to play a larger part among the younger target audience (i.e. first-time
smokers) than admitted.
 Unanticipated situational factors ( eg; Reaction of salespersons ) are rare in occurrence
and do not have significant impact on the purchase decision.
5 Post purchase behavior
Satisfaction or dissatisfaction is not dependent on many factors and remains roughly similar for
each consumer across purchase periods. Post-purchase evaluation is very significant for first-
time users (First time use is defined as consumption not purchase as it is not usually linked with
direct purchase by the final user). This phenomenon decreases as use become more prevalent,
though no specific dividing timeline or use could be identified where such evaluation loses
significance.
Thus, cigarette consumers exhibit typical ‘habitual buying behaviour’. Once loyalty is
established, they change brand infrequently, and tend to remain loyal to a brand for extended
periods of time, which change only due to extrinsic factors like change in peer group,
discontinuation of brand (as in the case of Wills Lights) etc. Habitual buying results in automatic
‘reach for the brand’ behaviour, thus minimising the sales push opportunity and maximising the
need for advertising and positioning in the consumer’s mind.

3C-I analysis
Tobacco industry

What is cigarette?
A cigarette is the product consumed through smoking and manufactured out of cured and finely
cut tobacco leaves and reconstituted tobacco, often combined with other additives, then rolled or
stuffed into a paper-wrapped cylinder ( generally less than 120 mm in length and 10 mm in
diameter ).
Fig 1: Ingredients of the cigarette

Figure 1 shows different ingredients that are required to manufacture an industrialized cigarette.

Industry overview
Tobacco occupies a prime place in the Indian economy on account of its considerable
contribution to the agricultural, industrial and export sectors. India is the second largest producer
of tobacco in the world. China and USA rank first and second respectively, in terms of tobacco
cultivation. Brazil, Turkey, Zimbabwe, Malawi, Italy and Greece are the other major tobacco
producing countries. Tobacco contributes substantially to the economies of these countries. In
2000-2001, the contribution of tobacco to the Indian economy was to extent of Rs 81,820
million, which accounted for about 12% of the total excise collections. Foreign exchange
earnings during the same periods were Rs 9030 millions, accounting for 4% of India’s total
agricultural exports. Endowed with favorable agro-climatic attributes such as fertile soil, rainfall
and ample sunshine, India has the potential of producing different varieties of tobacco with
varied flavors.
India is the second largest producer of tobacco in the world after China. It produced 572 million
kg of tobacco in FY03. However, India holds a meager 0.7% share of the US$ 30 billion global
trade in tobacco, with cigarettes accounting for 85% of the country's total tobacco exports.
Despite being the second largest producer, India is only the ninth largest exporter of tobacco and
tobacco products in the world. Out of the total tobacco produced in India, only one-third is flue-
cured tobacco suitable for cigarette manufacturing. Most of the tobacco produce is suitable for
the manufacture of chewing tobacco, Bidis and other cheap tobacco products, which have no
demand outside the country. In India, three major cigarette players dominate the market,
primarily ITC with 72% market share, Godfrey Phillips with 12% and VST with 8% share of the
market.

SWOT analysis of tobacco industry

Strength

1. India is one of the largest manufacturers in terms of tobacco production.

2. It is one of the traditional items in India foreign trade, and is helping India to earn lots of
foreign exchange.
3. India is leading tobacco exporter of the world.

Weakness

1. Taxation policies are the major weakness of the tobacco industry as Government always
increases tax burden on this industry to bring it out of the reach of the rural people.
2. Now tobacco ads have been prohibited. Government has banned advertisement of
tobacco products on any type of media.

Opportunities

1. The biggest opportunity for the tobacco industry can be get hold of the foreign market by
reducing its subsidies and applying that money in the foreign market.

Threat

1. NGOs are the biggest threats to the tobacco industry as they are always ready with a new
campaign to prohibit tobacco usage and all things.
2. Another threat is the smuggled tobacco products or cigarettes which is somewhere
harming Indian market as smuggled cigarette does not have excise duty on it and its
supply is cheaper.1

Fig 2: Revenue earned from different types of tobacco

Figure 2 shows revenue earned from different types of tobacco. Cigarette earned highest revenue
( %) as compared to Bidi and Chewing tobacco.

Fig 3: Cigarette tax structure

1 To inhibit the purchase decision of smuggled cigarettes by the retail outlets, ITC has taken a unique
distribution strategy-

When because of liberalization several foreign brands started operating their business in India, like-
Marlboro, B&H, 555, New Work etc. because of these cigarettes used to came in Indian market in a
smuggled way so their cost was relatively low comparing to the premium brands of ITC cigarettes. And
Indian consumers were inclined in taking foreign brands, so that was solving their purpose. Then ITC
handled this situation in a masterful way. They stop giving their brands to those retailers and the pan
shops that used to sell foreign brands. Now those retailers started feeling the pain, because the numbers of
foreign brand taking customers were very few. So they were not getting profit after selling those brands.
So they stopped keeping those brands in their shop.
Effect of tax on the sale of cigarettes
Fig 4: Change in the sale of the cigarettes due to the implementation of tax

Source- www.itcportal.com

Figure 4 depicts the fall in the cigarette sales on account of an increase in excise duty in FY2009.

Company

Back ground-

VST Industries Limited (VIL) is one of the leading tobacco and tobacco related products
manufacturer in India. The Hyderabad based company has only one manufacturing plant located
at Azamabad in Andhra Pradesh. VIL’s key products include cigarettes, cut tobacco and un-
manufactured tobacco. In the recent past the company has reduced the production of non filtered
cigarettes. IT has increased its focus on filter tipped cigarettes and in line with this has launched
a new brand of cigarette “Kings Club” (King sized - length 84mm) which would fall under the
middle price band (Rs 35 for a box of 10 sticks).

Business and its operation-

VST Industries Limited (VIL) is one of the leading tobacco and related products manufacturing
company in India. It is ranked third in the domestic markets (based on volumes sold) and is next
to market leaders like ITC and Godfrey Philips. VIL has a 7% (volume based) market share in
the cigarette industry. VIL has a manufacturing plant at Azamabad in Andhra Pradesh, and has
an installed capacity of 25.3 billion cigarettes per annum. Most of the company’s products
(cigarettes) fall under the mid price band. Some of the key brands of VIL are Charminar,
Charminar Special Filter, Charms Virginia Filter, Charms Special Virginia, Moments, Gold
Premium Filter, and Kings Club. Of the above brands Charms Virginia Filter and Charms
Special Virginia are the top selling brands for VIL.

VIL derives a major chunk of its revenues from the sale of cigarettes, which constitute 88.54% of
FY09 revenues. The unmanufactured tobacco or the leaf tobacco segment has witnessed an
increased demand, which has resulted in the revenue mix changing a little in favor of un-
manufactured tobacco products. The share of revenues from the segment has increased by 3.24%
on a y-o-y basis to 11.19% as of FY09. The revenues from the cut tobacco segment are constant
at around 0.28% as of FY09.

Fig 5: Revenue mix in FY08 and FY09

Source- www.vsthyd.in

Figure 5 shows revenue earned from cigarettes in FY08 is much higher than FY09. But it is
expected that in FY10 the revenue earned from cigarette of VST industries limited will increase
as the price of Flake ( ITC ) has increased as compared to Special extra smooth ( VST ).

Fig 6: Change in VST’s revenue mix.

Source – www.vsthyd.in
Figure 6 shows change in revenue mix in FY06, FY07, FY08, and FY09. As far as the picture is
concern domestic revenue of VST from cigarette has decreased over the period of time, though it
is expected that the domestic revenue will increase in FY10 as price of Flake has increased as
described in figure 5. As far as its exporting revenue is concern, it is increasing significantly.

Distribution channel-

A set of independent organizations involved in the process of making a product or service

available to the consumer or business user.

Most producers do not sell their goods directly to the final users, between them stands a set of
intermediaries performing a variety of functions. These intermediaries constitute a marketing
channel.

Fig 7 : Distribution channel of cigarette industry

MANUFACTURER

EXPORTERS OF TOBACCO,
BIRI AND CIGARETTES

SHOP STOKIST ( STK )

CONSUMER SHOP
WHOLESALE DEALER

DISTRIBUTION
STOCK CARRYING
REPRESENTATIVE ( DR ) SUBDEALER POINT ( STK )
Competitors

Indian tobacco company ( ITC ) limited Godfrey Phillips ( India ) limited

Address- P.B.No.317, G.T.Road Srinivasarao Address- Four Square House, D. No 41826

Thota GUNTUR 522004 (AP) Chandramouli Nagar, Ring Rd Guntur 522007
(AP)
Key product ( cigarette )- Flake, Gold Flake,
Silk cut, classic etc. Key product- Four Square, Red & White etc

N/B: Now flake has the highest market share in N/B: Their products have a very low market
West Bengal. share as compared to ITC, VST etc.
Others including G.T.C industries limited,
N.T.C industries limited etc

Address-1st lane,Vidya NagarGuntur

522007 (AP)

Key product- Special Extra Smooth, Charm,

Kings Club, Charminar etc

N/B: SES has second highest market share.

Consumer

Consumers of cigarette include common people including all the social class. Main consumers
are the office goers college students and now a days females also.

Fig 8: Percentage of smoking by females.

Figure 8 shows that the percentage of female smoking any tobacco product is much lesser in
India as compared to few other countries.

Fig 9: Percentage of smoking by males.

Figure 9 shows that the percentage of male smoking any tobacco product is much higher.

The probable reason behind the high percentage of male smoker as compared to female smoker
in India has been discussed in the research design.

Objectives
Primary objective- To study consumer behaviour and adopt few marketing strategy that increase
the market share and create the distance from the competitors.

Secondary objective- Secondary objectives are as follows……

1. To study the consumer’s behaviour toward the cigarette.
2. To find the attributes which influenced the consumers in selecting the
particular brand of cigarettes.
3. To know specific aspects related to the buying behaviour of cigarette
consumer.
4. To know the consumer preferences and choices.
5. To know the potential of the market and expand the existing market.
6. To identify whether price of the product have any influence on the
consumer buying behaviour.

Research methodology
Research is a systematic method of finding solutions to problems. It is essentially an
investigation, a recording and an analysis of evidence for the purpose of gaining knowledge.
According to Clifford woody, “research comprises of defining and redefining problem,
formulating hypothesis or suggested solutions, collecting, organizing and evaluating data,
reaching conclusions, testing conclusions to determine whether they fit the formulated
hypothesis”
Thus, three key ideas regarding marketing research are:-

i. Marketing research is concerned with studying any of the manifold

problems in marketing.
ii. Its purpose is to aid decision-making in the marketing field.
iii. Systematic gathering and analysis of information is its route in achieving
its purpose.

Sample plan
Research instruments- Primary survey.

Sample unit- Male and Female.

Sample size- 100 consumers and 680 retail outlets during market survey.

Sample segmentation- On the basis of Age, Location, Income level, Occupation, Education etc

Sampling method- Random.

Sampling area- 1. For survey to consumers- College street, Shyam Bazar, Sector V, Dhapa.
2. For survey to retail outlets- Sector V, college street, S.N Banerjee Road,
Sealdah, Dhapa.

Methods of data collection

The data were collected through primary and secondary sources.

Primary source of data- Primary data is original data, first hand and for the specific purpose of
the research project. We have visited to the variety of retail outlets (680) and collected data
depicting per day consumption rate of different brand belonging from different company. Also
we have prepared a questionnaire which we have already distributed to 100 consumers belonging
from different social class to understand their behavior. To do so I have selected four different
areas representing different social class. Areas are College Street, Sector 5, Alimudin Street and
Dhapa.

Questionnaire development is the critical part of primary data collection job. For this I have
prepared a questionnaire in such a way that it is able to collect all relevant information regarding
the project.

In this questionnaire, I have used mostly close-ended questions that are easier to be answered by
respondents (consumers) and also easier for interpretation and tabulation & one open-ended
question to take the opinion of the respondents in their own words. The questions were asked to
the consumers covering perception towards their purchase, price of the product, characteristic of
the product, brand image, effectiveness of the advertisements, sales promotional activities,
overall opinion about the product, etc.

Secondary source of data- It was collected to add the value to the primary data. Data regarding
VST company annual report, 2009, its profile and other necessary information and data have
collected by referring to website, magazine, annual reports, reference book, daily newspapers.

Stages in the research study

1. Formulate the questionnaire-
Keeping in mind the purpose of the study, the various parameters have to be select on
which the acceptability of the various brand of cigarettes can be judged. Parameters are
price, brand image, characteristic of the product.

2. Field work-
As the survey was purposive so researcher has to search for the consumers who smoked
everyday or at least have an idea about cigarette industry. To do so researcher need to
visit to various places excluding school, colleges and hospitals.
3. Data punching-
The collected answers to all questionnaire then coded into a excel sheet, so that they can
be further analyzed using different market research tools, methods and tests. This is done
through column coding of the various entries to the answers to each question.
4. Analysis of the data-
The data in an excel format is then analyzed by application of different tests and methods.
Cross tabulation of the data is done to analyze the break up or the data under different
heads (top breaks which are the deciding and analyzing criteria) and sectors. Then the
graphs had been formed.
5. Findings-
From the analyzed data, major findings are drawn with respect to different top breaks in
the data. Graphs and charts are then used to correctly display the crux of the difference in
the different sectors and top breaks.
Also interpretations are taken out on the basis of these graphs to answer the basic
research objective.
Fig 10: Stages in the research study

Formulation of questionnaire

Field work

Data punching

Analysis of the data

Findings

Research design, analysis and findings

“A research design is the arrangement of condition for collection and analysis of data in the
manner that to combine relevance to research purpose with economy in procedure “.

Assumption of the project

1. The market is homogeneous and the opinion of the sample is reflecting the opinion of the
mass.
2. There is still scope of improvement in the process.
3. The respondents are giving unbiased response.
4. The competitors are not influencing the survey by any means.
Market research 1
I have started our SIP on 28th April. On that day our company guide Mr. Pravin Kumar Singh
gave us few valuable information regarding the cigarette industry like its distribution channel, its
market and its product and gave us three assignments for next one week ( 29th April to 7th May).
The assignments were as follows…

1. Gain a detailed knowledge regarding the distribution channel of cigarette industry.

2. Records maintained at Wholesale Dealer point.
3. VST product information and its competitors ( including its brands )

To do so I visited to 680 retail outlets and collected per day consumption of different brand of
cigarette belonging from different companies. I did my project work from Beliaghata dopt and I
have visited to several routes with respective Dealer Representative (DR) as follows….

Table 1: Name of the visited routes, name of DR, date of visiting and number visited of
retail outlets during the time period of 29th April- 7th May.

ROUTE NAME NAME OF DR DATE VISITED RETAIL

OUTLETS (NO)
CIT RD SAVTOSH 30/04/2010 56
BELIAGHATA 2 NETAI 03/05/2010 59
COLLEGE PRABIR 04/05/2010 42
STREET
ALLIMUDIN KAUCHAR 05/05/2010 70
SREET
R.A.K RD MUNNA 06/05/2010 81
After getting all the data I put those data on excel sheet and prepared a pie chart which I am
showing in Fig 11.

Table 2: Different brand of cigarettes and their respective company and their sales ( in no
of packets )

COMPANY BRAND SALES

ITC FLAKE 3966
VST SPECIAL EXTRA SMOOTH 2228
ITC GOLD FLAKE 1434
ITC SILK CUT 1005
ITC NAVY CUT 746
ITC VIRZINIA 504
GPI RED & WHITE 292

Fig 11: Market share ( in terms of sales ) of different brand of cigarettes belonging from
different company on the basis of above survey.

Interpretation-

Figure 11 shows Flake has highest market share with the market share of 38%. While Special
extra smooth (SES ) , Gold Flake, Silk Cut, Navy Cut, Virzinia and Red & White have the
market share of 19%, 16%, 11%, 8%, 5% and 3% respectively.

The probable reason behind that is the price factor. Among the above brand Special Extra
Smooth is the cheapest product. For that reason consumer prefers Special Extra Smooth instead
of other brands ( excluding the Flake ). Though the consumers belonging from the upper class
will obviously go for Gold Flake instead of Special. But in the city like Kolkata the frequency of
upper class consumer is very few as compared to the middle class consumer. For that reason
Special has the greater market share than the other brands ( excluding Flake ). As far as the Flake
is concern, it has the highest market share. The reason behind that it has all the attributes that a
good brand should have, like price, availability, taste, brand name etc. Though the market share
of Flake as decreased due to the increase in price as discussed in Fig 12.

Market research 2
On 14th May our company guide meet with us and checked all our assignments and gave
assignment for next week (17th May to 21st May) is as follows…..

Visit at least 240 retail outlets that include two urban areas and two rural areas as a neutral i.e;
not belonging to any company as compared to previous survey.

The reason behind that Sir assumed whatever the data we have collected, that might be incorrect,
as we visited to those outlets as a representative of VST. So whatever data we have collected
might be affected with biasness of shop owner, i.e; the data we have collected might be in favor
of VST. To examine accuracy of those collected data we visited to retail outlets as a neutral.
Surprisingly after the collection of all data we saw that the market share of VST has increased by
6% ( fig 12 )

Table 3: Different brand of cigarettes and their respective company and their sales ( in no
of packets ) during the time period of 17th May-21st May

COMPANY BRAND SALES

ITC FLAKE 3499
VST SES 2401
ITC SILK CUT 1348
ITC NAVY CUT 859
ITC VIRZINIA 581
NTC REGENT 806
After getting all the data I put those data on excel sheet and prepared a pie chart which I am
showing in Fig 12.

Fig 12: Market share ( in terms of sale ) of different brand of cigarette belonging from
different companies on the basis of above survey ( 17th May to 21st May ).

Interpretation-

Figure 12 shows the market share of different brand of cigarettes belonging from different
companies on the basis of survey (17th May - 21st May). According to the figure Flake has
highest market share ( 37% ) which has decreased by 1% and Special extra smooth (SES) has
25% market share which has increased by 6% . So we can see that the market share of SES has
increased but in case of Flake, the market share has decreased as compared to the previous
survey (i.e; survey on 29th April – 7th May ).

This is related with time of survey. VST were selling around 50 million of Special extra smooth
(SES) till March’10. In May it has grown and now they will be hitting around 63-65 million.
Flake ( ITC) is the major competitive brand of Special ( VST ). As the Flake’s new MRP and
Special’s new MRP hit the market at the end of April’10 consumer started shifting from Flake to
Special from May onwards. As we did our first survey in April’10 and second one in May’10,
we got such a fluctuating result.
Table 4: Sales of Flake and SES over 30th April – 7th May and 17th May – 21st May.

Time period Sales of Flake Sales of SES

30th April 17th May 470 440 328 350
3rd May 18th May 557 500 394 380
th th
4 May 19 May 1156 1100 800 750
5th May 20th May 847 718 370 520
7th May 21st May 936 741 336 401
th th th st
Table 4 shows the sales of Flake and SES over 30 April – 7 May and 17 May – 21 May.

Fig 13: Sales of Flake and SES over 30th April – 7th May’10.

Interpretation-

Figure 13 shows the sales of Flake and SES over 30th April – 7th May. According to the figure
sales of Flake are higher than SES over the period of time.

The probable reason behind that is the price. As the price of Flake was very reasonable (before
the new MRP of Flake hit the market) consumer try to consume Flake instead of any other
brands, including SES. For that reason Flake had such a huge sale.

Fig 14: Sales of Flake and SES over 17th May – 21st May.

Interpretation-

Figure 14 shows the sales of Flake and SES over 17th May – 21st May. According to the figure
sales of Flake are higher than SES over the period of time, but the difference between the sales
of Flake and SES much lesser as compared to previous survey (30th April – 6th May).
The probable reason behind that the price. Due to imposition of new MRP of both the SES and
Flake, the sales of Flake have decreased. As far as the SES is concern, due to new MRP, its sales
has increased. To prove my interpretation I have constructed a couple of graphs depicting the
consistency in the sales of Flake and SES.

Table 5: S.D. of Flake and SES over 30th April- 7th May and 17th May-21st May

Time period S.D. of Flake S.D. of SES

30th April-7th May 280.6950302 199.887
17th May-21st May 259.6174 164.04329
Table 4 shows Standard deviation of Flake and SES over 30 April- 7th May and 17th May-21st
th

May. According to above table S.D. of Flake is much higher than S.D. of SES.

Fig 15: S.D. of Flake and SES over 30th April – 7th May.

Fig 15 shows the S.D. of the Flake and SES over 30 th April – 7th May. According to the figure
S.D. of Flake is much higher than S.D. of SES.

Fig 16: S.D. of Flake and SES over 17th May – 21st May.

Figure 16 shows the S.D. of Flake and SES over 17th May – 21st May. According to the figure
S.D. of Flake is much higher than S.D. of SES.

Interpretation-
Figure15 and 16 show the consistency in the total sales of Flake and Special extra smooth
(SES) over the period of time. At first I have collected the total sales of flake and SES during the
period of 29th April – 7th May and during the period of 17th May-21st May. Then I put all those
data on a excel sheet and by using Standard deviation got the consistency in the sales of Flake
and SES over the above period of time as shown in table 4.

The standard deviations of the sales of Flake and SES during the time period of 29th April- 7th
May are 280.695 and 199.887 and from 17th May- 21st May are 259.6174 and 164.04329. So we
can see that the standard deviation of Flake is much higher than Special Extra Smooth. That
means the consistency in the sales of Special Extra Smooth is higher than the sales of Flake.

This is related with time of survey. VST were selling around 50 million of Special extra smooth
(SES) till March’10. In May it has grown and now they will be hitting around 63-65 million.
Flake ( ITC) is the major competitive brand of Special ( VST ). As the Flake’s new MRP and
Special’s new MRP hit the market at the end of April’10 consumer started shifting from Flake to
Special from April onwards. As we did our first survey in April’10 and second one in May’10,
we got such a fluctuating result.

Market research 3
Marketing is very innovative field. Here nothing can be assumed. Whatever innovative idea we
generate, we have to test them and they must be supported by proved results. For this, marketing
research is very important. Consumer behaviour is one such aspect that is very difficult to
measure by guesswork. Anything you say about it, it must be based on reliable research. In this
there must be analysis on brand loyalty of cigarette smokers and it explained the rationale below.
To facilitate the purpose, I have formed a questionnaire and got it filled by 100 respondents
which I have showed in annexure part. Here only we interpret the data collected from the survey
as presented below.
Fig 17: Respondent (%) on the basis of age group

Interpretation-
An in depth Study of Cigarette smoker, survey is done in this research and it conveys that
maximum number of respondents were in the age group of 18-24 and the least number of
respondents were in above 50 age group. As we know that cigarette selling is banned to age
group of 17 years or below that, we have started our survey from the age group of 18. The
probable reasons behind the maximum number of respondents were in the age group of 18-24 are
they are young aged, they try to maintain their social status by smoking the cigarette. According
to them cigarette is the style symbol and lastly they are very much affected by the advertisement.
For example Sharukh Khan is a very popular face in Indian cinema and has a huge fan following.
When he smoked at the public place, their fans also try to imitate him. Another reason may be
the frustration ( jobless, betrayed by girl friends ). As far as the old people ( >50 ) is concern,
they are very much health conscious. For that reason 18-24 aged people are the maximum
respondent and >50 aged people are the minimum respondent.

Fig 18: Respondent on the basis of income level.

Interpretation-

An in depth Study of Cigarette smoker, survey is done in this research and it conveys that
maximum number of respondents were between the income level of 6001-12000 and the least
number of respondents were in the income level of <3000. The probable reason behind that the
financial condition. In the country like India poverty level is still much higher in the rural area.
For that reason consumer with the income level <3000 will prefer other relatively cheaper
tobacco product like Bidi, chewing tobacco etc instead of cigarette. As far as those consumer is
concern having the income level of >12000, they belong from the upper middle class social
class. So they are very much health conscious and aware of harmful effect of smoking. For that
reason they try to avoid the smoking or at least try to transform themselves from frequent user
group to occasional user group. For that reason they are the minimum number of respondent.
Consumer with the income level of 6001-12000 is the maximum number of respondent. They
basically belong to the lower middle class social status. They prefer cigarette among all other
tobacco product.

Fig 19: Respondent (%) on the basis of occupation.

Interpretation-

The maximum numbers of cigarette smokers were graduate while the minimum number of
respondents was student (< 18 years). In this research it shows that 40% of the respondents were
student (graduate) while 30% were professionals. 25% of the respondents were others including
illiterate, jobless etc.

As we know that cigarette selling is banned to age group of 17 years or below that, students (<18
years) are the minimum number of respondents. The probable reasons behind the maximum
number of respondents were the graduate are that they are young aged, they try to maintain their
social status by smoking the cigarette. According to them cigarette is the style symbol and lastly
they are very much affected by the advertisement. For example Sharukh Khan is a very popular
face in Indian cinema and has a huge fan following. When he smoked at the public place, their
fans also try to imitate him. Another reason may be the frustration (jobless, betrayed by girl
friends). As far as the professionals are concern, they are also addicted to the smoking but they
are more mature than those Graduates. The probable reason behind their less number of
respondence as compared to graduate is that the family pressure. Most of them are usually
married that provide the extra responsibility towards their family members and lastly wife may
play an influencing factor for quitting the smoking.

For that reason Graduates are maximum number of respondent and students (< 18) are the
minimum number of respondents. So we can notice that out of 100 respondents, the maximum
number of smokers was in the age group of 18-24 who were students and graduates that support
the interpretation done in Fig 17.

Fig 20: Respondent (%) on the basis of Gender.

Interpretation-

Figure 20 shows the respondent (%) on the basis of gender. The figure tells us that the maximum
number of respondent is male while minimum number of respondent is female.

The probable reason behind that in the country like India women is very much conservative.
Most of them try to avoid the modern life style. This is basically psychological and socio cultural
factor that acts as the inhibitor to the smoking.

For that reason we got such a result over here.

Fig 21: Weightage on the product attributes (having the income level of > 12000)

Interpretation-

Figure 21 depicts that price has got the 20% weightage. While tastes, brand name, availability,
matching with social status and others attributes have the 40%, 10%, 20%, 5% weightage for
those consumers having the income level of > 12000.

The probable reason behind that is the financial condition. The consumer with the income level
of > 12000 is very much efficient to consume expensive brand of cigarette (eg; Classic by ITC).
To them taste is the biggest concern. They put greater emphasis over the taste of the product that
they are consuming. They are willing pay higher for price for consuming quality product, but
they never like to compromise with the taste or quality of the product. For that reason they put
greater emphasis over the taste of the cigarette than on the price. As far as the brand name is
concern, it does not create much impact on them. As discussed earlier they are looking for the
taste of the product, if the existing brand fails to provide same level of satisfaction as the brand
provides, they easily change their consuming brands. For that reason brand name has the little
impact on them. Above figure depicts that matching with the social class has got the equal
weightage (20%) as the price got. The probable reason behind that they try to match their social
status with the consuming product. For example an MBA will never go for Regent, they will
always try to select the brand that matches their social status. In this example he will probably go
for Classic instead of Regent.

For that reason the most important factor in buying the cigarette is taste and its weightage is
around 40% and price is secondary factor which has got around 20% weightage. Thus, it can be
concluded that taste is more important factor than price and all other attributes for those
consumer having the income level of > 12,000.

Fig 22: Weightage (%) on the product attributes (having the income level of < 3000)

Interpretation-

Figure 22 depicts the weightage (%) on the product attributes for those consumers having the
income level of less than 3000. The figure tells us that price has got 40% of weightage. While
brand, tastes, availability, matching with the social class and others attributes have 5%, 20%,
25%, 2% and 8% weightage for those consumer having the income level of < 3000.

The probable reason behind that is also the financial condition. The consumers with the income
level of < 3000 are very much price sensitive. To them price is the biggest concern. They put
greater emphasis on the price of the product that they are consuming. They will not try to pay
higher price to consume the quality product. They always go for those products that provide
them partial level of satisfaction as compared to quality product at a reasonable price. As far as
the brand name is concern, it has the minimum impact on them. But availability has the greater
impact on them than the brand name. The probable reason can be the loyalty to the brand. They
are not loyal to their existing brand. Their intention is only smoking. If their existing brand is
unavailable in the market, they easily change their brand. For example if Regent will unavailable
in the market, they will easily shift to the Chancellor without thinking a twice.

Thus it can be concluded that price is more important attributes than the taste for those consumer
having the income level of < 3000. They are more price conscious compared to other income
group. Importance of price in buying behaviour decreases as income increases up to Rs. 16000
and thereafter it remains almost same.

Fig 23: Influencing factors on the purchase decision.

Interpretation-

Figure 23 depicts the factors those influence during the purchase decision. As far as the figure is
concern friend has got the 45% weightage. While advertisement, film star and models, shop
owner have got the 15%, 10% and 30% weightage respectively.

In this research friend circle is the main reason behind starting of smoking. Advertisement has
very little impact on the person to start smoking, so advertisement is not the boosting factor at
the initial stage. It also shows that around 45% of the respondents came to know their regular
brand from their friends. Only 15% of the respondents have selected the brand after looking its
advertisement. In short, reference group ( friends and shop owners ) has strong effect on the
selection of the brand, even most of the smokers are aware of other brands.

In this most of the respondents are influenced by the overall presentation of the advertisements.
Youngsters are mainly influenced by the models or the punch line ( logo ) of the brand. Mainly,
the respondents who opted for logo or punch line tried to match their personality with the model
or slogan ( like “ Made for each other “ or “ Discover a passion “ ). So it is a psychological effect
of advertisement on the respondents. Or even the other brand advertising is good the most of the
smoker respondent that will ignore that brand.

Thus it can be concluded that the peer group has the greatest influence on the purchase decision
of the consumer as compared to the advertisement and the film star and the model.

Fig 24: Consumption rate ( in terms of sale ) of different brands of cigarette belonging from
different companies.
Interpretation-

Figure 24 depicts the consumption rate ( in terms of sale ) of different brands of cigarette
belonging from different companies. According to the figure Flake has the highest market share
( 38%) . while Will Classic, Special Extra Smooth, Gold flake and others have the market share
of 8%, 19%, 15% and 20% respectively.

The probable reason behind that the price factor. Among the above brand Special Extra Smooth
is the cheapest product. While Will Classic is the expensive one. For that reason consumer
prefers Special Extra Smooth instead of Wills Classic. Though the consumers belonging from the
upper class will obviously go for Classic instead of Special. But in the city like Kolkata the
frequency of upper class consumer is very few as compared to the middle class consumer. For
that reason Special has the greater market share than the Classic. As far as the Flake is concern, it
has the highest market share. The reason behind that it has all the attributes that a good brand
should have, like price, availability, taste, brand name etc. Though the market share of Flake as
decreased due to the increase in price as discussed in Fig 12.

For that reason Flake has the highest market share followed by Special Extra Smooth, Gold
Flake, Will Classic and others.
Conclusion
Tobacco industry has its own relevance and one of the leading revenue generating industry in the
India. VST industries limited is one of the leading tobacco company in India. The study
conducted on the “CONSUMER BEHAVIOUR AND PERCEPTION TOWARDS THE
CIGARETTE” states the various factors which have influence on the consumer’s buying
behaviour.

The study was among 100 consumers and 680 retailers and collected information through
structured questionnaire. The study helped to findings which were related with consumer’s
buying behaviour and company’s marketing strategies for attracting them. In the tobacco
industry there is the tough competition is going on because of the large number of competitors
and various alternatives available to the consumers. In order to meet the tough competition, each
company in the industry has to more and more people towards their products. The main way to
attract the consumers is to understand factors which are influencing their buying behaviour. In
brief through my market research I got the followings as shown below –

 Flake had a reasonable market share, but due to change in its MRP their market share has
decreased and market share of Special Extra Smooth has increased.
 Maximum number of respondents was in the age group of 18 – 24.
 Maximum number of respondents was in the income level of 6001 – 12000.
 Maximum number of cigarette smokers was Graduate.
 Taste of the cigarette has got the maximum weightage for those consumers of above
12000 income levels and price has got the maximum weightage for those consumers of
below 3000 income level.
 Friends act as the major influencing factors for the purchase decision of cigarette.

The organization can still concentrate on specific areas which are evolved from this study in
order to make the consumers more satisfied. Only if the consumers are properly served- they will
purchase the product again. The recommendation of this report may help in this direction. The
study helps to understand about the tobacco industry and also helps to know about the current
trend in the market, sales and demand.
Recommendations
 Punctuality-
I started my SIP from Beliaghata depot. Every day I entered at 9 o’clock. But most of the
time I found that there was no one. Everybody used to come after 30-40 minutes. This
affected their work also. Every DR (dealer representatives) should enter the market
within 10 am. But due to late arrival they could not enter the market within 10 am. My
work was to collect the data of per day consumption rate of different brand of cigarettes
belonging from different companies along with the DRs. But due to late penetration to
the market few retailers did not take the products from the respective DRs of VST
industries limited as they already purchased those VST’s product from whole sellers or
uncontrollable hawkers. As compared to other companies, particularly ITC, their DRs
enter the market bit earlier than VST’s dealer. This drawback affects the productivity of
the VST industries limited. So according to me management should keep a close look
over this matter as soon as possible.

 Keep a close look over the market-

The only way to maintain the communication between the market (shop owner) and the
company is to visit to the market at a regular interval. In every FMCG company there is a
particular employee called “marketing supervisor”. In VST, Beliaghata depot has two
marketing supervisors. But they hardly entered the market. It is very tough for the
supervisor to cover such a huge territory. But being the part of such a huge and reputed
company like VST it is mandatory to do assigned job. As far as the ITC is concern, their
supervisors make a contact with the shop at a regular interval. The major function of the
supervisors is to collect the information from the market (shop owner) in terms of the
demand of the product, their supply, customer satisfaction and many more and provide
that valuable information to the company. To do so they need to visit to the market at a
regular interval. So in that part VST is lagging behind and management needs to do
something as soon as possible. I am highlighting few shops, their locations and the
performance of supervisors of ITC and VST in terms of visit to these shops.
Table 6: List of shops and the performance of the supervisors of ITC and VST

Shop/owner name Location Performance (ITC) Performance (VST)

Khursid Alam R.A.K Rd Good Poor
N.D Ayath R.A.K Rd Moderate Poor
Abdul Rashid Alimmudin Street Very good Very poor
Laxmi Sahu College Street Moderate Good
Raur Stores D.C Dey Rd Moderate Moderate

 Better marketing strategy-

Management of VST should adopt innovative marketing strategy. Currently they are
providing the “coupon facilities”, “ free offers” etc. But like VST all the other cigarette
companies are also adopting the same strategy. In addition to that VST needs to adapt
few other innovative marketing strategies. For example to attract the consumer Virginia
( ITC product ) has taken the same marketing strategy, but they increase the amount.
Special Extra Smooth ( VST product ) has also the coupon system. Every packet has a
coupon depicting a certain amount of money. But the amount of money they are
providing is very low as compared to Virginia providing. Virginia providing the coupon
of Rs 250 also. So when a consumer hears about that free offer from the retailer, he will
definitely go for a full pack instead of one or two piece, which in turn increases the
productivity of the product. VST also needs to do the same thing. Particularly for their
newly launched brand- “ Kings Club “. As this brand is new to the market management
needs to pay a careful attention on this. As we all know every product has their own life
cycle, it is management’s duty to adopt different marketing strategy for different product
belonging from different life stage. Below I am presenting the “ Product Life Cycle
( PLC )” of VST product and their brands and their probable life stage.

Table 7: Different brands of cigarette of VST and their probable life stage.

Name of the brand Probable life stage

Kings Club Introduction phase

Special Extra Smooth Growth Phase

Charminar Maturity phase

Charm Decline phase

Fig 25: different brands of cigarette of VST and their probable life stage.

Charminar

Charm
SES
SALES

Kings Club

TIME

Based on the above life stages management needs to take various marketing strategy.
According to me the strategies are as follows-
• For Kings Club- As it is now in its introductory phase, management needs to pay
careful attention on it. For example coupon system providing high amount of
money to the consumer, free gifts, lucky draw at the end of the year etc. I think
lucky draw system will be most useful strategy over here. To participate in that
lucky draw consumer needs to have a certain amount of number of packet of
Kings Club which in turn will increase the productivity of the Kings Club.

• For Special Extra Smooth- This is the only brand VST has that acts as the cash
generator, as it belongs to the Growth phase. So the management of the VST does
not need to take any new strategy over here.
• For Charminar- As it belongs from the maturity phase, management needs to
think for new strategy as discussed earlier.
• For Charm- Need to drop the product as it is a cash trap.

 Correct selection of Dealer representative-

Dealer representative ( DR ) is the only person who maintains the communication
between the market and the company. So selection of the DR is the most vital job of the
company. As cigarette selling is very laborious job, they need to be physically and
mentally sounds. They should have also few innovative ideas in order to sell their
product. As far as the VST’s DRs are concern, most of them are very much efficient. But
few of them do not have such spark. For example VST provides the coupon system.
Every packet contains a certain amount of money. Retailers accumulate all the coupons
and give all the coupons to the DR once in a week. A good DR tries to sell their extra
product instead of giving the money to the retailers. For example if retailer accumulates
15 coupons of 1 Rs each, then it is DR’s duty to push the extra product ( Rs 15 ) instead
of giving him Rs 15. To do so company needs to choose appropriate DR.
 Stretching up-
VST needs to stretches up their product. During my survey I personally feel from the
response of the consumers that there is some paradigm problem of the consumer towards
the cigarettes of VST. Few consumers directly told me that MBAs or Engineers never use
the VST’s product. As far as the company is concern they clearly segmented their market
and identified their targeted consumers, i.e; middle class people. For that reason their
brand Special Extra Smooth ( SES ) are generating such huge revenue as compared to
their earlier stage. But being a one of the leading company in the tobacco industry VST
should have all sorts of product that matches the social images of all sorts of people.
According to me the only way to beat the ITC and all other close competitors is to adapt
the “ Frontal attack “ marketing strategy, i.e; attack the market leader by a product with a
superior marketing mix.

 Paradigm shift –
During my survey, when I was taking recommendation from the consumers, most of the
time they suggested that VST should change the consumer’s paradigm towards their
products ( different brands ). To do so the company needs to reorient with variety of
brands that can able to match the social image of every sorts of consumers. If we take an
example of one of the leading tobacco company in India – ITC, we will see that the
company has all sorts of brands of cigarette that can able to match the social image of all
kinds of people, Classic for upper social class people, Flake for middle class people etc.
But as far as VST is concern, they don’t have such a variety of brands that can able to
match the different social class. So management needs to pay a careful attention on this
matter.
Limitations
Definition of the perfection differs from individuals to individuals. No matter how meticulous
one is, the study that is completely based on responses from a vast variety of people cannot be
free from limitations. Though the present study aimed to achieve the above mentioned objectives
in full earnest and accuracy, it was hampered due to certain limitations. Some of the limitations
of this study may be summarized as follows-

 Selection of the people who are under consideration as sample for the study may not be
the best sample selected.
 Getting accurate responses from the respondents due to their inherent problems,
personality traits and mood fluctuations was a very difficult task.
 Sample size was limited due to the limited period allocated for the survey.
 Questionnaire method was used for data collection. The limitation of questionnaire
method is applicable to this study.
 Since the study is conducted only in few areas of Kolkata, it does not possible to take
overall conclusion.
Bibliography
Websites:
✔ www.scribd.com
✔ www.123management.net
✔ www.vsthyd.in
✔ www.itcportal.com
✔ www.moneycontrol.com

Newspapers:
✔ Economic Times.
✔ Market Express.
✔ Hindustan Times (Mint).
✔ Telegraph.

Books and Magazines:

✔ Marketing management by Kotler
✔ Marketing management by Ramaswamy.
✔ Business world.
✔ Business and economy.
✔ Religare Technova.

Others:
✔ VST company report, 2009.
Appendix
NAME-

AGE-

SEX-

OCCUPATION-

INCOME LEVEL-

1 Which brand of cigarette you prefer?

2 Rate your favorite brand on the basis of following attributes……

A. Taste
Excellent [ ] Very Good[ ] Good[ ] Fair[ ] Poor[ ]
B. Price
Excellent [ ] Very Good[ ] Good[ ] Fair[ ] Poor[ ]
C. Product quality
Excellent [ ] very good[ ] Good[ ] Fair[ ] Poor[ ]
D. Matching with your social status
Excellent [ ] Very Good[ ] Good[ ] Fair[ ] Poor[ ]
E. Availability
Excellent [ ] Very Good[ ] Good[ ] Fair[ ] Poor[ ]

3 When do you prefer to consume cigarette?

Anytime[ ], After fixed interval of time[ ], During break[ ], After meal[ ].

4 You are belonging from which smoker group?

Frequent user [ ], Occasional user[ ]

5 If occasional user then rank the following occasion…….

A. With friends B. Office breaks C. With alcoholic beverages D. Alone.

6 If you are a frequent user, then do you prefer to purchase cigarette in

A. Piece [ ] B. Packet [ ]

7 Who influence your purchase decision?

Friends [ ], Peer Group [ ], Film star [ ], Others ( please specify)…….

8 Rank the ATTRIBUTES given below according to your preference (Please rank the

most preferred one as 1 and so on………

PRODUCT ATTRIBUTES RANK

PRICE
TASTE
BRAND
HEALTH
ASSOCIATION WITH SELF IMAGE
AVAILABILITY
SIZE AND HARDNESS

RECOMMENDATION ( if any)…………..