A PROJECT

ON
CONSUMER CONSUMPTION INDEX
For

THE PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

(Session 2017 -19)

SUBMITTED TO SUBMITTED BY

PROFESSOR SHUDIR RANA akshay arora

MBA 1ST YEAR
ROLL NO:65

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INTRODUCTION
Consumer consumption index

Consumer consumption is another term for voluntary private consumption, or an

exchange of money for goods and services. Contemporary measures of consumer
consumption include all private consumption of durable goods, nondurables and
services. In a purely free market, the aggregate level of private consumer
consumption in an economy is necessarily equal to the total market value of
economic output.

Consumption of final goods (i.e. not capital goods or investment assets) is the end
result of economic activity. This is because individuals ultimately use these goods
to satisfy their own needs and wants; economists refer to this satisfaction as
“utility.”

Consumer consumption is the demand side of “supply and demand;” production is

the supply. When economists or policymakers refer to aggregate demand, they
simply mean the combined market value of all consumers consume within a given
area, over a given period of time and at a specific period of time. By its very
nature, consumer consumption only unveils the “use” economy, or deliverable
goods and services. This is different from the make economy, looking at the supply
chain and intermediate phase of production necessary to make deliverable goods
and services. Most official over all metrics, such as gross domestic product, are
dominated by consumer consuming. Others, take the much newer gross domestic
expenditures or gross output, also include the make economy and are less affected
by short-term consumer consuming. Consumer consuming is the most important
short run determinant of economic performance. Other economists, sometimes
known as supply -side’s, accept Say’s Law of Markets and believe private savings
and production is more potent than over all consumption. If consumers blow too
much of their income, however, upcoming economic growth could be
compromised because of insufficient savings and investment. Modern governments
and central banks often checked consumer consuming patterns when considering
current and present fiscal and monetary policies.

Consumers are, naturally, very potent to businesses. The more money consumers
spend at a given company, the better that company will perform. For this reason, it

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does not excite any more to the most investors and businesses pay a great amount
of attention to consumer consuming figures and patterns. If consumers provide
fewer return for a given business or within a given industry, companies must adjust
by decreasing costs, wages, or innovating and introducing newer and better
products and services. Companies that do the most effectively earn higher profits
and, if publicly traded, tend to experience better stock market performance.

Consumer conceptions are the attitudes of households and other entities toward the
economy and the health of the fiscal markets, and they are a strong constituent of
consumer consumption. Conceptions have a powerful ability to cause inconstancy
in the economy, because if the attitude of the consumer regarding the state of the
economy is bad, then they will be averse to spend. Therefore, conceptions prove to
be a powerful predictor of the economy, because when people have trust in the
economy or in what they believe will soon occur they will spend and invest in
confidence. However conceptions do not always affect the consuming habits of
some people as much as they do for others. For example, some households set their
spending strictly off of their income, so that their income closely equals, or nearly
equals their consumption (including savings). Others depend on their conceptions
to dictate how they will consume their income and such.

Market segmentation is the process of dividing a broad consumer or business

market, normally consisting of existing and potential customers, into sub-groups of
consumers (known as segments) based on some type of shared characteristics. In
dividing or segmenting markets, researchers typically look for shared
characteristics such as common needs, common interests, similar lifestyles or even
similar demographic profiles. The overall aim of segmentation is to identify high
yield segments – that is, those segments that are likely to be the most profitable or
that have growth potential – so that these can be selected for special attention (i.e.
become target markets).

Many different ways to segment a market have been identified. Business-to-

business (B2B) sellers might segment the market into different types of businesses
or countries. While business to consumer (B2C) sellers might segment the market
into demographic segments, lifestyle segments, behavioral segments or any other
meaningful segment.

Market segmentation assumes that different market segments require different

marketing programs – that is, different offers, prices, promotion, distribution or

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some combination of marketing variables. Market segmentation is not only
designed to identify the most profitable segments, but also to develop profiles of
key segments in order to better understand their needs and purchase motivations.
Insights from segmentation analysis are subsequently used to support marketing
strategy development and planning. Many marketers use the S.T.P approach,
Segmentation, Targeting , Positioning to provide the framework for marketing
planning objectives. That is, a market is segmented, one or more segments are
selected for targeting, and products or services are positioned in a way that
resonates with the selected target market or markets. Metaphorically speaking, it's
like an orange. Splitting the business into different segments to focus on each one
individually.

As per our data we are considering mostly nondurable goods and services and
some part of durable goods also which will help us to find approximate
consumption pattern of the consumers. The data of the Consumer Consumption
Index are most frequent expenses made by the people in their day to day live and
where the maximum amount if the money is spent by every human.

The segment I picked is Rs. 0 to 25000 which will cover approximately all newly
placed youth who are had just completed their educational journey and landed up
in the work environment. This is a segment where the need of earning is high and
they all come either with very less experience or with no experience. Where the
organization wants to use their talent with paying very less and this is the segment
which does not their value at all which become good opportunity for the
organization to save the cost of the company.

The only reason behind picking this segment is to understand how they spend their
limited income in order to meet their needs and what is their living standard in
which, how they are picking their expenditure items and what amount of their
money being spend in basic requirements and the part of their income being spend
in luxury items.

In the given data the operation of mean, median and mode is done on the basis of
the survey I did with 21 people on the basis of the their expenditure on different
items and also saving which is reserved income for the future expenditure.

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We are calculating this CCI model to understand the pattern in which a group of
same salary employees have different consumption pattern. For example the group
of the people who are having same salary are spend in different ways as we per
data the people who are married they are try to reserve their income, but on the
other hand the employee who are single or unmarried are not worried about the
spending pattern. They are living their life with the maximum consumption of the
provided facilities. We can also conclude that from the given survey that as the age
of the group of the people in growing they more looking for the satisfactory need
and wants of life they are trying to be more practical and they cope and adjust their
life as per the need and demand of the life and the also with the social
environment.

market into demographic segments, lifestyle segments, behavioral segments or any

other meaningful segment.

Market segmentation assumes that different market segments require different

marketing programs – that is, different offers, prices, promotion, distribution or
some combination of marketing variables. Market segmentation is not only
designed to identify the most profitable segments, but also to develop profiles of
key segments in order to better understand their needs and purchase motivations.
Insights from segmentation analysis are subsequently used to support marketing
strategy development and planning. Many marketers use the S.T.P approach,
Segmentation, Targeting , Positioning to provide the framework for marketing
planning objectives. That is, a market is segmented, one or more segments are
selected for targeting, and products or services are positioned in a way that
resonates with the selected target market or markets. Metaphorically speaking, it's
like an orange. Splitting the business into different segments to focus on each one
individually.

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 OBJECTIVES OF THE STUDY

 To understand how they spend their income on consumption

 To know way of consumption for fulfillment their needs and satisfaction

RESEARCH METHODOLOGY

Types Of Research

Descriptive Research

Descriptive Research is used for the study as it helps fact finding through the
primary source, which include questionnaires personal interview and telephonic
interview. Secondary data has been collected from internet Webpage, Managzies
Insurance related Books, Journals Newspaper etc.

Sampling Design

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Sampling is a statistical procedure that is concerned with the selection of the
individual observation; it helps us to make statistical inference about the
population.

 Type of Sampling - Non - probability sampling,

 Sampling procedure- convenience sampling
 Sample unit –rohini
 Sample size – 20 Respondent.
 Statistical method- percentage method.

DATA COLLECTION

The data for the survey will be conducted both primary as well as secondary
Source.

1. Primary Data

Using personal interview technique the survey will collect by using.

Questionnaire. The primary data collection for his purpose is supposed to be

done by judgment sampling conversation sampling. Questionnaire has been
formatted with both open and close questions.

2. Secondary Data
 By using through various records.
 By using through the magazines of the company.
 Browning different website.
 Referring various articles, report, journals and magazine.
 Referring different books and previous project report in college
library.

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 Tools and Technique Analysis

The tool of analysis adopted by me is ‘PIE CHART’ which I have prepared

on the basis of our Questionnaire.

DATA ANALYSIS AND INTERPRETATION

Q1. On what parameters you considered when you purchase food products?

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(10000-35000) INCOME SEGMANT

ATTRIBUTES IN PERCENTAGE

PRICE 70

QUALITY 25

PACKAGE 5

TOTAL 100

CONSUMPTION

5%
PRICE

25% QUALITY
PACKAGE
70%

INTERPRETATION:

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 It can be noticed from the above table that respondent who earn 10000-35000 per
month as you see 70% RESPONDENT consumption on the basis of price meanwhile 25%
focus on quality of product before consume and rest of 5% respondent go toward package.

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Q.2 Which Brand of milk are you consuming?

S.NO Brand of No. of Percentage

milk respondent

1. MOTHER 10 50
DAIRY

2. PARAM 1 5

3. 3 15
ANANDA

4. AMUL 6 30

Total 20 100

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 PRODUCT CONSUME

30%

50% MOTHER DAIRY

PARAM
ANANDA
AMUl
15%

5%

INTERPRETATION It can be noticed from the above table that ‘MOTHER DAIRY’ 50% tops
the list of preferred brands among the available in the market. About 5% of the customers are
using ‘PARAM’ and 15% prefer ‘ANANDA’ for their daily usage. Moreover, 30% customers are
using AMUL and this all consumption according to their income in my survey person earn RS
20000 who prefer mother dairy product meanwhile person who earn 35000 those also prefer
mother dairy so there is no change due to income its all about likes & dislikes / preference.

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Q.3 how much you spend on clothes ?

S.NO Categories No. of respondent Percentage INCOME

1. Costly 2 10 30000-35000

2. Fair 3 15 25000-30000

3. Reasonable price 10 50 15000-20000

4. Average 5 25 10000-15000

Total 20 100 100

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respondent
4
10% percentage
2 15% 50%
25%
0
Costly
fair
Reasonable
price average

INTERPRETATION—The was shows that the consumers answer almost 50% of

respondent find clothes in reasonable price and costly price are 10%. Consumer
who prefer Fairly price is 15% and 25% average and in above table shown income
segment and behalf of income respondent spend on differ differ categories .

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Q.4 what % of your income you spend on different categories are given bellow?

• Transportation
• education
• food &beverages
• entertainment
• insurance
• saving
• health

INCOME SEGMENT <10000-15000>

consumption

5%
20%
5%
Transportation
education
30% 15% food &beverages
entertainment
10% insurance
15% saving
health

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 Income segment <20000-25000>

consumption

10%
20%
12% Transportation
3% education
10% food &beverages
25%
entertainment
insurance
20%
saving
health

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Income segment <30000-35000>

consumption
1%
5% 4%
20%
Transportation

25% education

15% food &beverages

entertainment
insurance
30% saving
health

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 Findings
 The customers are mainly focus on price of the product before buying they don’t care about its
quality and while the other dimensions like taste play very important role in consumption .
 20 % consumption in education &transportation but in other categories they spend less

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