BOP

ASSIGNMENT
Instructor: Rimsha Bilal

Date: 12/02/2020

Slot: Mon/Wed 2nd Slot

Group Members:
Kiran Jafri
Faiza Suri
Shehr Bano
Salaar Rizwan
Ali Rezah Pabaney
Muhammad Mussa
No. Student’s name Contribution
1
Umme Habibas and Mohammad Yaseen household and
Kiran Jafri category wise analysis of selected household and
Analysis.

Muhammad Asif’s household and category wise analysis

3
Zubaida Khaala’s household and category wise analysis of
Shehr Bano
selected household

4
Sakeena Begum’s household and category wise analysis of
Faiza suri
selected household

5
Sobia Shakir’s household and category wise analysis of
Salaar Rizwan
selected household

Abdul Qadir’s household and category wise analysis of

Contribution sheet
Introduction – Purchase trends

To gather insights on the BOP segments and identify and analyze the prevailing purchase
trends, we interviewed 7 households.

In the first household, we interviewed Sobia Shakir, who's 28 years old and married with two
children and lives in a house of 5 people, the area of her residence being Allah Waala Town
Chowk. The average monthly income of her family increased from Rs. 15000 to Rs. 20000 in
the last 5 years.

The second household was represented by Muhammad Yaseen, who lives in Hub Raees
Chowk. He's 28 years old, studied till class 2, is unmarried and lives in a rented house of 10
people along with his parents and brother's family. The average monthly income of his family
is Rs. 22000.

Umme Habiba, who lives in Mahajir Camp, Laasi Paara was interviewed to represent the
third household. She's 37 years old, studied till class 8 and is married with 5 children. She
lives in a rented house of 8 people along with her husband, children and mother in law, with
the average monthly household income of Rs. 25000.

For the fourth household, we interviewed Abdul Qadir whose area of residence is
Qayyumabad. Abdul Qadir's 24 years old, he finished his Matric Education, and is currently
married with one child. He lives in a household of 8 people which includes his wife, child,
parents, 2 sisters and a brother. The average monthly income for his household is Rs. 20000.

The fifth household was represented by Zubaida Khaala, who works in IBA Girls Hostel.
She's married and resides in a rented houses in Staff Town IBA with her husband and 3
children. She completed her Matric education, is 32 years old and the average monthly
income for her household is Rs. 33000, out of which she earns Rs. 12000.

The sixth household was of Muhammad Asif, whose occupation is driving, is 35 years old
and lives in Maasoomiyat. He's married, and lives with his wife and 5 children. His average
monthly household income is Rs. 35000.

Sakeena begum, who is 50 years old, was the person interviewed to represent the last
household for our assignment. She resides in a rented house in Omer Goth, and earns a
monthly salary of Rs. 15000. She's married, has 6 daughters, out of which 4 are married and 2
live with Sakeena begum and her husband. Her husband earns monthly income of Rs. 8000,
which makes an overall monthly household income of Rs. 23000.

Most frequent purchases in Sobia Shakir's household are in the foods category. The purchase
of flour, sugar, ghee and vegetables are the most frequent ones among the other.
In the past 5 years, her overall household income increased from Rs. 15000-20000 however
due to the inflation, their savings are minimum to nill, whereas 5 years back, even with lesser
income, they could manage to save Rs. 2000.
Despite inflation, in this household the trend of purchasing the same unbranded staple food
items prevails. Since these items are unbranded, and have no specified brand name attached
to them, they assume these are the cheapest.
However, the most pressing inflationary pressures for this family are those on the prices of
flour and sugar, which with increasing rent and school education, make it difficult for them to
carry out their usual expenses. In case of price hike, they cut down their purchases for sugar,
salt, red chilli powder and tea.
In the house-care category, her focus was mainly on the detergent she uses to clean her house,
which is Surf Excel and how they need water to clean it, which is an issue due to the water
shortage.
In the self-care category, the shampoo used in their household is Life Buoy's Rs. 150 bottle.
Out of the total household income, 50% goes out in groceries for staple food items, 25% in
self care and house care combined, and not much is spent on child care products like diapers
and pacifiers. The rest is spent on rent and school fee of the children of this household.

In Muhammad Yaseen's household, the most frequent purchases are of staple food items too,
wood and water coming next to them, since water shortage causes them to buy water, and in
the Hub Raees are there is a lack of provision for gas for cooking, so they have to purchase
wood for the purpose.
In the food items, the most frequent purchases are of flour, rice and daal. These are
unbranded items, which are bought daily, in the amounts of 3kg, 2kg and 1/2 kg respectively.
They mostly eat daal and potatoes, since they consider these items to be the cheapest. This
household considers the price hike on vegetables to be the most problematic, as they already
do not consume meat, and due to inflation they have to further cut down on the purchase of
vegetables. Apart from this, in case of inflation in future, as per Muhammad Yaseen, the
amount of flour, rice and daal this household consumes daily, might have to be stretched over
3 days.
In the house-care category, which they consider cleaning, they purchase Surf Excel. In the
self-care category, for soup they use Lux, but they are not as brand loyal because when the
prices increase they usually switch from Lux to any other cheaper substitute. For the
shampoo, they purchase Life Buoy.
Out of the total household income of Rs. 22000, the most is spent on food items, then rent
and children education, followed by house-care and then self-care.

In case of Umme Habiba's household, the most frequent purchases are of staple food items
too. Among which flour, rice and daal being the most frequent, which are purchased daily in
this household too in amounts of 2 kg, 1 kg and 1/2 kg respectively. Other food items mostly
purchased include sugar, oil, ghee and tea. The most concerning inflationary impact for them
is that on the prices of flour and vegetables, according to her as the prices of these items go
up, their consumption of the food items go down. In the last 5 years, due to inflation, their
consumption of oil, sugar and milk used has been decreasing. Due to inflation, they have
reduced their consumption of chicken to once a week.
According to her, during her parents time, the cost of doing grocery was Rs. 2000. This cost
has now increased to Rs. 10000-12000.
In case of further increase in inflation, according to her, the first step to be taken would be to
stop educating her children, as school fees for her children takes up a big chunk of her
household's average monthly income, because in her opinion, in a house with 5 children
consumption on basis food items can not be reduced.
In the house care category, they purchase Surf Excel to wash the house. To wash the house
they also require water, which they have to order in Suzukis due to water shortage.
Purchasing this Suzuki costs Rs. 500 for salt water.
In the self-care category, for the soap they purchase Tibet, since it is cheaper than the other
options. For shampoo they purchase Life Buoy too.
Out of the total monthly income of Rs. 25000, most is spent on food, then education and rent,
followed by surf and self-care products. A proportion of this income also goes into the daily
spending of her children on items such as snacks, toffees and more. This sums up to the daily
amount of Rs. 60 per child.

In Abdul Qadir's household, most frequent purchases are of vegetables, oil, flour, water and
fuel. They do not purchase the rice of any brand is particular, usually any local brand works
for them.
In the past 5 years, the total household income has decreased, since his father is old now and
is jobless. Inflation has affected the consumption and expenditure of this household.
Increased cost of transportation, followed by increased prices of food items are the most
pressing inflation related issues for this household. Increased cost of transportation is an issue
since the petrol costs have increased and Abdul Qadir has to take his brother to the hospital
for routine checkup.
Due to increased cost of vegetable, cooking oil, and flour, the household now buys all these
staple food items bit by bit, instead of buying them in a bulk. Moreover, due to inflation
they've also significantly reduced any spending done on items of clothing or technology.
In the category of house-care, they are not making purchases as frequently, and have also
shifted this expenditure for items of self-care, such as medicines required for the sick brother.
The increase in rent of Rs. 4000, inflation and increased cost of caring for elderly members as
they have aged have led to savings being used to filter out expenditures rather than making
new purchases.
Out of the total household income of Rs. 20000, 40% is spent on food items since their prices
are increasing, 30% on self care as they believe in leading a healthy life, 20% is spent of the
one child Abdul Qadir has, and rest is spent on house-care. They do not spend much on house
maintenance, but still maintain the quantity of soap and detergent required. The detergent
they use is Ariel, but if its price increases, they shift to Bonus. The soap used by them is Lux,
but in case of price increase they switch to Capri.

The most frequent purchases in Zubaida Khaala's household include flour, rice, daal, house-
cleaning items and petrol. The increase in the overall household income in the past 5 years
has been of Rs. 4000, and the purchase patterns of the households have also changed. The
spending has shifted more towards healthcare as her husband had a major operation in the
past year and so medicinal services, proprietary medicines and supplies are required.
Inflation has also affected their consumption patterns, since a significant amount is spent on
petrol since she has to pick her younger daughter from school, the older from parlour and
much is spent on her son's bike rides.
Due to inflation, the spending of this household on self care and house care items has also
decreased. They are using old tooth brushes, old toilet brush and sponge. They are not
spending income on new clothes, since due to increasing prices, saving for her daughter's
nikkah has become a major issue.
The frequency of buying goods has increased since in this case too, they can't afford bulk
buying, whereas the quantity of these goods purchased has reduced, so that Zubaida Khaala
could fund her daughter's education who wishes to join college too.
The reduction in the quantity purchased is also so that more could be spent on health care
since the prices for medical services and pharmaceuticals have gone up.
In the house-care category, the detergent they buy is Bonus, but if the price increases to Rs.
55 of the 475 gram pack, they switch to Gai Soap.
In the self-care category, the soap they use is Safeguard, but if its price rises, they switch to
Capri.
Out of the total household income, 70% is spent on food items, since food prices have
increased and the supermarkets near Khaala's house are smaller, fewer and experience higher
costs per unit sold. 20% on house-care items, this is because she does cleaning work and she
believes it allows her to maintain her routine, lifestyle and independence. Only 10% is spent
on self-care items because according to her when daily life revolves around fighting for
survival, you minimize time and resources spent on self care.

In the household of Sakeena Begum, the purchases depend on the monthly income. This is
because even though she gave us an average monthly pay for her household, her pay varies
with her work. Most frequent purchases are of flour and milk. The other food items they
purchase include cooking oil, ghee and spices which they purchase on monthly basis. This
household however purchases Nido milk for children and Tarang for tea. They do not
purchase open milk. However, they purchase unbranded sugar, oil, ghee, flour and spices. All
these things, except flour, are purchased on monthly basis.
In order to deal with inflation, they cut down their consumption of food items such as sugar
and some expensive vegetables. Whereas, they shift to eating other vegetables more as they
are cheaper when compared to chicken and meat.
In the house-care category, the detergent they buy is Hero detergent since it's cheaper than the
rest.
In the self-care category, they buy Tibet soap, Medicam toothpaste, whereas the brand of
shampoo is not specific for them. The purchase of soap is done on weekly basis, whereas the
shampoo is purchased on monthly basis.
Out of the overall income, most is spent on food items because even though they cut on some
expensive items, food is still essential for their survival, and so they spend more on food.
Next comes the expenditure on self-care and then home-care.

The most frequent purchases in Muhammad Asif's household are on food items, which are
sugar, flour and vegetables. These items are purchased daily. Other food items that are
purchased include cooking oil of no specific brand, open milk, ghee, tea and chicken which is
only cooked once a week. Due to high prices of red meat, it is rarely ever consumed in this
household.
In case of inflation, Muhammad Asif cuts down on the money he spends on eating hotel food
items when he's out on his job.
In the category of house-care, the detergent used in this household is Bonus, however it is
only used for mopping. Surf Excel is used for washing clothes.
In the category of self-care, the soap used is Lux, in case of price increase they switch to Life
Buoy. For the shampoo Life Buoy Rs. 10 sachets are purchased, and for toothpaste, the
household uses Sensodyne.
Out of the overall income, major chunk is spent on food items, followed by the education of
Muhammad Asif's children. Next comes self-care and then house-care expenditure.

Insights

In the light of the above information, it can be deduced that the most frequently purchased
items in any BOP segment household are food items, and most of the average household
income is also spent on these items. What needs to be highlighted is that none of these people
were specific about a brand when it came to flour, rice, sugar and daal. And only one of these
7 households preferred Tarangg and Nido over open milk. This signifies that even though
there are branded products of rice, sugar and milk being marketed, they might not be a
success at capturing the BOP segment. This might be because most of these products are not
targeting the BOP segment. The increase in inflation has also in most cases affected the
consumption of these food items. Although most of these families consider food essential for
their survival and spend a significant amount of their income on these items, when it comes
to reducing the expenditure, food items is also where they cut costs. They mostly reduce
expenditure in this category by reducing the quantity purchased of the food items, such as
reducing the spending on vegetables and sugar. Most of these people due to the impact of
inflation, have reduced their meat consumption to minimal level, specially red meat
consumption. They tend to eat vegetables and daal more. Since all of the families interviewed
don't really buy flour, rice and daal from any brand, the increase in prices due to inflation has
to be dealt with quantity reduction.
In the house-care category, there were four names Surf Excel, Bonus, Ariel and Gai Soap.
Most of these people preferred Surf Excel over other brands of detergent. This could be
because Surf Excel has created brand loyalty among these people, one prominent example of
detergents being addressed as 'Surf' in these households. Despite being a premium brand, Surf
Excel has penetrated into the BOP segment too. However, the families which were more
concerned with the costs use Bonus, as it is a cheaper option. The cheapest option as per the
insights gained is Gai Soap for the BOP segment.
In the self-care category, the most preferred soap was Lux and the most preferred shampoo
was Life Buoy. Lux, despite associating their brand with high-class celebrities, has somehow
made its mark in the BOP segment. This could be because even though Lux's target market is
different, its method of advertising creates resonance among the people of the BOP segment
and has an appeal to it. The popularity of Lux among this segment could also be because of
the dignity factor of the BOP segment, as they might wish to be associated with a high quality
product. People in this segment who prefer a cheaper soap option are more inclined towards
Tibet and Capri soaps, and in case of increase in the price of Lux, the users of Lux switch to
these soaps. This signifies that even though Lux has captured the BOP segment, the market
isn't very brand loyal to the brand.
For the shampoo category, majority preferred Life Buoy, and most of the families did not
really talk about switching from Life Buoy in case of price hike, one of the families however
did say they buy the Rs. 10 sachets of Life Buoy. This suggests that Life Buoy has introduced
different SKUs with different price ranges for different segments, and has successfully
captured the BOP segment too. This also implies that households in the BOP segment prefer
Life Buoy even over Sunsilk, Pantene, Head & Shoulders and other popular shampoo brands.

Recommendations

On the basis of the insights gathered, our group's recommendation would be for the soap
companies and the spices industry. Other companies such as Capri and Tibet are failing based
on the data on these 7 households when compared with Lux, even though they offer cheaper
prices ,the major underlying reason for this could be because BOP segment consumers do not
perceive these soaps of a good quality. They associate the advertisements for these soaps
with quality. And since Lux uses A-list celebrities for their marketing, Lux's perceived
quality is higher. What brands like Capri and Tibet can do is expand their advertising budget
a little and associate some representation of higher quality with their advertisements. For
instance, they could show people with characteristics of SEC A using these soaps, as this will
help in psychologically targeting the quality conscious people of BOP segment. As for the
spices industry it is very much prevalent that the informal market is the leader in this hence
the companies should focus on targeting the element of that emphasize the fact that the cost
incurred to the consumer is similar and the spices are made are not only of high quality but
require less amount due to its concentration hence one packet can be used for a longer time
furthermore they coud use advertisement to highlight the fact and remove the stigma and
taboo that only “hath se kute howe masala main he suad hain” and show that market leaders
such as shan and national also create those masalas in the same way.