SYNOPSIS

Topic Project on Role of Sales Promotion on FMCG products.

Objective The objective of this study is to enhance my knowledge in this field since I am working in this industry. This study will help me to know about the various sales promotion techniques used by the FMCG companies in order to improve their sales. This sector has a huge potential in the market according to various market research firms.

Scope In this project I have covered South Kerala. This project has covered the study of consumer preference with respect to sales promotion in FMCG sector and also had examine trade off, relative importance of different attributes while responding to a sales promotion offer

Methodology Data collection method has included both primary and secondary data collection methods.

Primary Data Collection Method

Survey method has done through structured questionnaire. Sample size was taken with 100 Retailers and 100 consumers.

Secondary Data Collection Method

It was done through collecting datas via various trade magazines and also with the help of internet.

At last conclusion of report, findings and suggestions was given based on study of secondary source as well as primary research.

PREFACE

In the age of globalization hyper completion has become a regular feature. Today the markets are no less than battlegrounds and one has to strive very hard for survival and growth.

Due to very rapid industrialization all over the world the demand for the managerial personnel and the administrative personnel has increased. The perfect study of management involves both the theoretical and the practical aspects. To survive in this highly competitive market PRACTICAL KNOWLEDGE is as relevant as the theoretical.

In this project more emphasize is given to the various tools of sales promotion and its impact on consumers buying decisions. Actually in recent trend to some extent this technique has also

become victim of clutter, even though it can be eliminated by generating innovative and more attractive tools to lure the customers.

Nowadays most of the FMCG companies considering sales promotion as an important part of their marketing strategy. From the analysis of survey it becomes clear that consumers do response to the sales promotion campaign, but there are customers who strongly prefer to stick to brand name.

EXECUTIVE SUMMARY

As a part of my study it is needful to conduct a grand project. It provides me an opportunity to understand the particular topic in depth and which leads to through to that topic. My topic for the grand project is titled as Role of Sales Promotion on FMCG Products in which emphasis given to the effect of sales promotion on buyings habits of consumers. To start with we will give brief information regarding FMCG sector then moving to the main topic we will explain what is topic all about. Promotion is one of the pillars of marketing mix and same way sales promotion is also one of the elements of promotion. With respect to consumer oriented sales promotion there are certain theories narrated as operant conditioning and projective theory. Based on secondary source certain theoretical aspects are also included as a part of study. Then after concentration is given to the primary research. It includes the analysis and results of survey which was focused on Consumer`s behavior towards sales promotion campaign. The survey was conducted with the help of structured questionnaire. At last conclusion of report, findings and suggestions was given based on study of secondary source as well as primary research.

ACKNOWLEDGEMENT

I am thankful to everyone who supported me in completing this project on Role of sales promotion on FMCG products. I am equally grateful to my Project Guide Mrs. Neelam Chadha for her precious guidance regarding the preparation of the Project Report. Her guidance has proved to be useful and without them the preparation of this report might not have been possible. I also extend my sincere thanks to the respondents, who helped me during the course of the project and for their gracious attitude.

Praful Sugathan

INTRODUCTION
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FMCG Concept and Definition The term FMCG, although popular and frequently used does not have a standard definition and is generally used in India to refer to products of everyday use. Conceptually, however the term refers to relatively fast moving items that are used directly by the consumer. Thus, a significant gap exists between the general use and the conceptual meaning of the term FMCG. Further difficulties crop up when attempts to devise a definition for FMCG. The problem arises because the concept has a retail orientation and distinguishes between consumer products on the basis of how quickly they move at the retailer`s shelves. The moot question therefore is what industry turnaround threshold should be for the item to qualify as an FMCG. Should the turn around happen daily, weekly or monthly? One of the factors on which the turnaround depends is the purchase cycle. However, the purchase cycle for the same product tend to vary across population segments. Many low-income house holds are forced to buy certain products more frequently because of lack of liquidity and storage space while relatively high income households buy the same products more infrequently. Similarly, the purchase cycle also tends to vary because of cultural factors. Most Indians typically prefer fresh food articles and therefore to buy relatively small quantities more frequently. This is in sharp contrast with what happens in most western countires, where the practice of buying and stocking foods for relatively longer period is more prevalent. Thus, should the inventory turnaround threshold be universal or should it allow for income, cultural abd behavioral nuances? Characteristics of FMCG products

Individual items are of small value. But all FMCG products put together account for a significant part of the consumer`s budget. The consumer keeps limited inventory of these products and prefers to purchase them frequently as and when required. Many of these products are perishable. The consumer spends little time on the purchase decision. Rarely does he/she look for technical specifications. Brands loyalties or recommendations of reliable retailer/dealer drive purchase decisions. Trial of a new product i.e brand switching is often induced by heavy advertisement, recommendation of the retailer or neighbours/friends. These products cater to necessities, comforts as well as luxuries. They meet the demands of the entire cross section of population. Price and income elasticity of demand varies across products and consumers.

INTRODUCTION TO THE TOPIC

The importance of consumer sales promotion in the marketing mix of the FMCG category throughout the world has increased. Companies spend considerable time in planning such activities. However, in order to enhance the effectiveness of these activities, manufactures should understand consumer and retailer interpretations of their promotional activities. The study here pertains to consumer`s perceptions regarding sales promotion. Some past researchers have suggested that promotion itself has an effect on the perceived value of the brand. This is because promotions provide utilitarian benefits such as well as hedonic benefits such as entertainment, exploration and self expression. Broadly speaking most of the companies using Marketing Mix which includes are. Price Place Product Promotion These are the four basic pillar of Marketing Mix. Most of the marketing strategies are built on the basis of these criteria. Promotion is one of the important elements of marketing mix. There are so many elements of promotion such as

Advertising Direct Marketing Public Relations

Sales Promotion

Traditionally sales promotion have been used by marketer to increase sales in the short term. However in the last few decades this communication tool has evolved and now is considered from a strategic point of view. For this reason, it is necessary to realize new studies in this area and study how consumers evaluate sales promotions. Sales promotions have grown in both importance and frequency over the past few decades. Although an accurate estimate for total sales promotions expenditures does not exist we can be sure that the trend is up. Sales promotion serves three essential roles: It informs, persuades and reminds prospective customers about a company and its products. Even the most useful product or brand will be a failure if no one knows that it is available. As we know channels of distribution take more time in creating awareness because a product has to pass through many hands between a producer and consumers. Therefore a producer has to inform channel members as well as ultimate consumers about the attribute and availability of his products. The second purpose of promotion is persuasion. The cut throat completion among products puts tremendous pressure on their manufactures and they are compelled to undertake sales promotion activities. The third purpose of promotion is reminding consumers about products availability and its potential to satisfy their needs. From these elements Sales Promotion is the element which is in the focus of this project. Further Sales Promotion is quite broad term it includes.

Consumer Oriented Sales Promotion Trade Oriented Sales Promotion

Consumer Oriented Sales Promotion:

Consumer Oriented Sales Promotion is the main topic of this project. Here emphasize is given to motivate consumer to increase sales. Consumer Oriented Sales Promotion includes Sampling, Couponing, Premiums, Contest, Refund, Bonus Pack`s, Price Off, Event Marketing etc
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Definition

For the purpose of this study, following definitions of sales promotion were kept in mind. Kotler defines sales promotion as Sales promotion consists of a diverse collection of incentive tools, mostly short-term designed to stimulate quicker and/or greater purchase of particular products/services by consumers or the trade Roger Strang has given a more simplistic definition i.e Sales promotion are short term incentives to encourage purchase or sales of a product or service Hence any forms of incentives(price cut or value added nature) offered for short period either to trade or consumers are considered as sales promotions activities.

Marketer`s uses Consumer Oriented Sales Promotion tools for the following reasons To increase short term sales To induce trial To reduce inventory To establish a brand name To make cross selling To avoid advertising clutter

Tools of Consumer Oriented Sales Promotion There are so many tools or technique available to the marketers for achieving objective of sales promotion. These tools should be used considering all other factors affecting such as cost, time, competitors, availability of goods etc. These tools are as under.

1. 2. 3. 4. 5. 6.

Coupons Price-Offs Freebies Scratch Cards Lucky Draws Bundling Offer

Now let us look at each tool in detail.

1. Coupons Coupons are the oldest and most widely used way of sales promotions. Coupons have been used since 1895. It is mostly used by packaged goods. It is worthwhile to use coupon as a promotion tool because data shows that market for packaged goods increased from 16 billion in 1968 to 310 billion in 1994. To boost up the sales not only manufacturer but retailers personally can also used. A coupon leads to price reductions so as to encourage price sensitive customers. Non users can try a product which may leads to regular sales. 2. Price - Off A Price-Off is simply a reduction in the price of the product to increase sales and is very often used when introduction a new product. A reduction in price always increases sales but the use of this technique should be carefully considered in the market situation. Price-Off is the most preferred sales promotion technique because consumers response very positively to this scheme. Not only that but it is also cause large increase in sales volume. Price-Off reductions are typically offered tight on the package through specially marked price packs. 3. Freebies Freebies are a popular form of modern marketing and are some of the best things about the internet. The definition of Freebies is products or services given away for free at no cost to the consumer. At different times, big and small companies often give away prizes and money which is too good to be true. Often it is the pursuit of more customers or a larger fan base and it often works.

4. Scratch cards A Scratch Card is a small token usually made of cardboard where one or more areas contain concealed information, they are covered by a substance that cannot be seen through but can be scratched off.

5. Lucky Draws It is a product packaging contains a number which is eligible for Luck Draw competition.

6. Bundling Offers Product bundling is a marketing strategy that involves offering several products for sale as one combined product. This strategy is very common in the software business ( for eg. Bundle a word processor, a spreadsheet, and a database into a single office suite) in the cable television industry ( for eg. Basic cable in the U.S generally offers many channels at one price) and in the fast food industry in which multiple items are combined into a complete meal. A bundle of products is sometimes referred to as a package deal or a compilation or an anthology. Factors Influencing Consumer Oriented Sales Promotion Mainly four factors should be taken into account while determining the sales promotion programme. Target Market Nature of Product Stage of Product Life Cycle Budget Available for Promotion

Target Market While doing sales promotion marketer must know who their target market is, otherwise there is no use of all effort because it leads to no where. A Target Market can be in any of the stages of buying hierarchy, i.e. awareness, knowledge, liking, preferences, conviction and purchase. Each stage defines a possible goal of promotion.

Nature of the Product There are various product attribute which influence sales promotional strategy. When the unit price is low, the manufacturer as well as the customer has low risk but he can get the benefit of mass

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marketing. Therefore mass marketing requires mass sales promotion schemes. Sales promotion schemes differ for products like its durability, perishable goods etc.

Stage of Product Life Cycle Sales promotion strategies are influenced by the life cycle of a product. When a new product introduced, prospective buyers must be informed about its existence and its benefits and middlemen must be convinced to stock it. Later, if a product becomes successful, competition intensifies and more emphasis is placed on sales promotion to increase its sales.

Budget Available for Promotion The funds available for promotion are the ultimate determinant of the promotional programme. A business with ample funds can make more effective use of sales promotion programme than a firm with limited financial resources. The budget for sales promotion can b prepared by the following methods.

Percentage of Sales Fixed Funds Available for Sales Promotion Following the Competition Budgeting by Objective and

Sales Promotion from the Consumers point of view

Willingness to buy on sales promotion offer Sixty per cent of the sample did not show willingness to buy a brand due to promotion while thirty per cent showed willingness and ten per cent were not sure. This indicates that when thirty showed willingness and 10 per cent consumers who were not sure, these groups might be lured through innovative and lucrative sales promotion offer.

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Ability to induce trial Forty per cent of the respondents had said that sales promotion has the ability to induce trial which reinforces the above inference.

Long-Term impact In order to understand ability of the promotions to increase long-term sales, respondents were asked about continuity of purchase of a brand after the withdrawal of promotion. Eighty per cent of the respondents indicated that they would not continue. But twenty per cent said they would. Thus, it could be inferred that promotions in this category (low involvement products) might encourage trial and brand switching but not long term loyalty.

Preference of Schemes Price off was the most preferred type of scheme. Maximum customers` ranked Price-Offs as number one or two.

Perceived Quality Majority of respondents had a perception that the quality of the promoted brands remained the same during promotion, while some of them felt it was inferior than before. It can be inferred that promotions were not leading to negative brand quality perceptions. It is found that some customer strongly preferred to buy their regular brand and said that sales promotion would not weaken their loyalty towards the brand.

Perceptions regarding underlying company motivations On tapping perceptions` regarding underlying company motivations for sales promotion, to increase sales was ranked highest followed by to attract switchers and to sell excess stocks. While providing value to customers` and to reinforce company image were ranked lowest. This indicates that consumers believed that companies were undertaking such activities only for their own benefit and not for the benefit of consumers. Findings from retailer and consumer perception studies, it is evident that there was a matching of perceptions regarding nature of scheme (price offs as most preferred type of scheme mentioned by consumers and retailers` perceptions about consumer preferences). Since retailers observe consumers in store behavior were frequently and directly, their perceptions regarding providing
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consumer behavior are likely to be accurate. Such inputs from the retailers would be useful to companies. The retailers had the perception that those schemes which were announced through mass media had better response. This was reinforced by the consumer survey which showed that recall in case of heavily promoted schemes on T.V was found to be very high. Retailers` prediction of companies` motivation for offering sales promotion were matching with the consumer perception regarding the same. Thus both viewed that companies were using sales promotion activities mainly to increase short term sales or encourage switching or selling excess stock and not to give value benefit or enhance/reinforce brand/company image.

Trade Oriented Sales Promotion Trade Oriented Sales Promotion aimed to motivate channel member of Oriented Sales Promotion includes dealer contest and incentives, trade allowances. Point of purchase displays, sales training programmes, trade shows, cooperative advertising and other programmes designed to motivate distributors and retailers to carry a product and make an extra effort to push it to their customers.

Sales Promotion from the Retailer`s point of view Perceptions on Scheme Preference It was found that retailer perceived price offs as a better form of sales promotion activity. Price Offs in their opinion had relatively a greater impact compared to any other form of sales promotion activity like Bonus packs, Premium, Contests etc. Retailers preferred Price Offs the most, then bonus pack, premium, contests, in order of importance. Perceptions about Buying Roles Retailers viewed that the person who came to the shop was the decider was the decider of any product and not the income provider. It could be inferred that visibility of information about the sales promotion activity at the point of purchase could result into the purchase of a promoted brand.

Perceptions about their Role in Decision Making Retailer had relatively very low influence in affecting choice. It could be inferred that visibility and awareness about the scheme were the critical success factors so that pull could be created.
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Perceptions about Response to Sales Promotion Offers They believed that younger age groups were more experimental in nature, amenable to trying new brands, and sought/looked for or asked whether there were any sales promotion schemes running on any toilet soap at the time of purchase.

Perceptions about Communication of Sales Promotion Schemes Retailers perceived that role of word of mouth and television advertising played an important part in providing information inputs to consumers regarding sales promotion activities.

Variations in Information Flow Small retailers received relatively less support compared to super markets in terms of servicing, margins, information about sales promotion activities from the dealers. Many a times small retailers were only informed verbally about sales promotion schemes by the dealer`s salesmen during the scheduled weekly visits.

Dealer-Retailer Dynamics At the time of sales promotion activities, dealers had tendency to push unwanted stocks onto the smaller retailers. In fact these retailers preferred to stock variety of brands and wanted payment for shelf and window display to increase traffic into their store. However, supermarkets and big retailers were pampered and given special services and better margins.

Margins It was found that in sales promotion schemes margins varied from six to fifteen per cent depending of the size of the retail outlet, bargaining power of a retailer, quantity ordered by him etc. Mostly margins were linked to size of the volumes that were ordered.

Perceptions about Terms and Conditions

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Retailers were not found to be happy with sales promotion schemes where their margins were cut on the pretext of just fast movement of inventory of brand being promoted. Also if additional incentive was offered it was subject to minimum performance requirement.

Nature of POP Retailers indicated that most of the POPs( Point of Purchase) materials were meant for brand advertisement and not for giving information regarding the schemes. Thus it could be inferred that company`s follow up was not adequate.

Servicing during duration of Scheme In stock out situation during the running of the sales promotion schemes, small retailers had to wait for replenishment of stocks till the next scheduled weekly visit by the dealer`s salesman, but big retailers were serviced on telephonic request for replenishment of stocks. This clearly indicates the disparity in treatment.

Problem of Left-Over A left-over stock at the end of any scheme was required to be sold by the retailers before they ordered fresh stocks. In case of bonus packs scheme, left over stock was often dismantled and sold them individually as a regular soap. This approach of the company leads to misappropriation which in turn could result in adverse brand image.

Gifts for Retailer Motivation Companies at times were rewarding retailers by giving free gifts like thermo flasks or clocks if they sell more than certain quantity in a given period. Companies were making a half-hearted effort to motivate retailers.

Perceptions about Mass Media Announcements Retailers viewed that whenever sales promotion scheme was announced on T.V, it created pull and they were more than willing to stock such brands. For eg. Medimix and Dettol contest was not advertised on T.V, hence there was very little awareness leading to unsold stock till six months. While Lux Gold Star which was heavily promoted on T.V is recalled even today.
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Post Promotion Behavior Retailers observed that in most cases sales promotion scheme on a brand might encourage a buyer to switch a brand temporarily but he would revert back to original brand after promotion.

Handling Problems Many times retailer had to handle various sales promotion offers simultaneously in a category and also across categories and there was no formal communication planning either from the dealer or the company. Remembering each offer and handling was a problem especially for a small retailer which was often an one man show.

Why Do Sales Promotion Schemes Affect Sales? There are three mechanisms behind these facts. It is Purchase quantity, Brand switching and Category expansion. First, consumer can increase the quantity they buy just because the product is on sale. Second, consumers are inducing to purchase another brand different from the one they would have purchased when there is no promotional incentive. Finally, consumer`s total consumption of the product category is increased by the promotion. However in the long term this positive effect may be diluted because a promotional campaign has no permanent effect in the sales of the firm.

Sales Promotion Strategy

Sales are the life blood of a business, without sales there would not be any business in the first place, therefore it is very important that if a business wants to succeed, it should have a sales promotion strategy in mind. The primary objective of a sales promotion is to improve a company`s sales by predicting and modifying your target customer`s purchasing behavior and patterns. Sales promotion is very important as it not only helps to boost sales but it also helps a business to draw new customers while at the same time retaining older ones. There are a variety of sales
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promotional strategies that a business can use to increase their sales, however it is important that we first understand what a sales promotion strategy actually is and why it is so important. A sales promotional strategy is an activity that is designed to help boost the sales of a product or service. This can be done through an advertising campaign, public relation activities, a free sampling campaign, a free gift campaign, a trading stamps campaign, through demonstrations and exhibitions, through prize giving competitions, through temporary price cuts and through door to door sales, telemarketing, personal sales letters and emails. The importance of a sales promotion strategy cannot be underestimated. This is because a sales promotion strategy is important to a business boosting its sales. When developing a sales promotion strategy for your business, it is important that you keep the following points in mind. Consumer attitudes and buying patterns Your brand strategy Your competitive strategy Your advertising strategy Other external factors that can influence products availability and pricing

There are three types of Sales Promotion Strategies

A Push Strategy A Pull Strategy A Combination of the two

A Push Strategy A Push sales promotion strategy involves pushing distributors and retailers to sell your products and services to the consumer by offering various kind of promotions and personal selling efforts. What happens here is that a company promotes their products and services to a reseller who in turn promotes it to another reseller or to the consumer. The basic objective of this strategy is to persuade retailers, wholesalers and distributors to carry your brand give it shelf space promote it by advertising and ultimately push it forward to the customer. Typically push sales promotion strategies include buy-back guarantees, free trials, contests, discounts and specialty advertising items.

A Pull Strategy
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A Pull sales promotion strategy focuses more on the consumer instead of the reseller or distributor. This strategy involves getting the consumer to pull or purchase the product or services directly from the company itself. This strategy targets its marketing efforts directly on the consumer with the hope that it will stimulate interest and demand for the product. This pull strategy is often used when distributors are reluctant to carry or distribute a product. Typically pull sales promotions strategies include, samples, coupons, cash refunds or rebates, loyalty programmes and rewards, contests, games and point of purchase displays.

A Combination of Two Strategies A Combination sales promotion strategy is just that, it is a combination of a push and a pull strategy. It focuses both on the distributor as well as the consumers, targeting both parties directly. It offers consumer incentives side by side along with dealer discounts.

The Short Term Impact of Promotions Let us look at the impact of promotions on purchase behavior during the promotional period i.e the week or the month when the promotion was being run. The majority of the empirical studies have focused on the impact of promotions in the short term. The key findings across the studies discussed below.

Temporary Price Reductions Substantially Increase Sales There is ample evidence to show that promotions lead to dramatic increases in sales of promoted brand in the short term. Studies have consistently reported high sales effects and high price elasticity of brands which are on promotion. The economic rationale for the promotional response is clear temporary price cuts increase the value of the product to the consumer and it leads to immediate action. Sales boost can be quantified on the basis of brand switching, primary expansion and consumer stock piling during a promotion. Sales Promotion Leads to Brand Substitution with the Product Category The sales bump during the promotional period into sales due to brand switching, purchase time acceleration and stockpiling. Studies on brand switching have shown that brand switching effects within a category are asymmetric such that promotions on higher quality brands induce a large number of consumers to switch them as compared to lower quality large low share brands.

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Sales Promotion leads to Purchase Acceleration/Stockpiling Effects In response to a promotion, consumers may buy more quantity of the product category or buy at an earlier time than usual (purchase acceleration effect). If consumers buy extra quantity during a promotion or earlier than normal, then they are not in the market to buy products once the promotion is over. Thus purchase acceleration is demonstrated through a lengthening of inter purchase times after a promotion. Purchase acceleration was more likely to be exhibited in increase purchase quantity than in shortened inter purchase times. Results showed that consumers mostly made up for the large quantity purchased by waiting longer until purchasing again. Results indicated that heavy users tended to accelerate purchases more than light users. There was negligible difference in the acceleration propensities of high versus low income groups.

Sales Promotion leads to Primary Demand Expansion for a Category While it was traditionally assumed that consumption rates remain fixed during and after a promotion, but from this project I came to know that promotions also have a primary demand expansion effect. When a primary demand expansion occurs, promotion induced increase in purchase quantities does not significantly extend the time till the next increase in consumption promotions induced consumers to buy more and increased consumption rates within the category e.g in categories such as bacon, salted snacks, soft drinks and yogurt exhibited primary demand expansions as a result of promotion while bathroom tissue, coffee, detergent and paper towels exhibited stockpiling only.

Sales Promotion affect Sales in Complementary and Competitive Categories From this project it is found that promotion not only increases sales of the main product but it also leads to increase in sales of complementary categories. Found strong cross relationships between products of the promoted product category indicating brand substitution behavior. They stated that retail price promotions as a form of implicit price bundling whereby the consumer surplus is transferred from the promoted item to non-promoted items. Also found that retail price promotions create significant complementary and substitution effects within the store

The Long term Impact of Promotions Strategies are build to reap the benefits for longer period of time, same is true in sales promotion strategies. Let us see impact of promotions effort and study the impact over a longer time period eg. Four to six months or even a few years after a sales promotion campaign.

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The result showed that the consumer promotions for leading brands of established packaged products had no after effects on the brand`s sales or repeat buying loyalty. The extra sales of a brand while promoted came virtually all from the brand`s existing long term customer base for which the experience of buying the promoted brand was nothing new. It is found that although the short term effects of promotions are strong these promotions rarely exhibit long term effects. It is observed that each sales component generally lacked a permanent effect and the effect of promotion was short lived and increase in promotions affected consumers` stockpiling decisions in the long run. They found that the combined short and long term elasticity of promotions was zero. The stockpiling induced by a promotion was essentially offset by reduced demand in the long term. Thus increased sales were more a result of sales borrowed from the future than increased consumption.

SWOT ANALYSIS OF FMCG SECTOR Strengths Well established distribution network extending to rural areas. Strong brands in the FMCG sector. Low cost operations.

Weaknesses
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Low export levels. Small scale sector reservations limit ability to invest in technology And achieve economies of scale.

Opportunities Large domestic market. Export potential. Increasing income levels will result in faster revenue growth.

Threats Imports. Tax and regulatory structure. Slowdown in rural demand.

DATA ANAYSIS OF THE SURVEY

CONSUMERS

1. Which brand of Soap do you use?

Brand Lux Medimix Chandrika Dettol

Respondents 41 3 14 8

21

Others

34

Respondents

Lux Medimix Chandrika Dettol Others

Interpretation The above question has been formed to know that which brand is at the top of the customers mind. It shows those consumers` purchase and use of that particular brand. It will help to the company to know the market scenario and the major brands in the market. From the above result it is clear that out of 100 customers more than 40 are having the same brand as the image in their mind, whereas others is also showing the higher graph than these three major players.

2. Do you always buy the same brand of Soap? Particulars Yes No Respondents 56 44

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Respondents

Yes No

Interpretation The objective behind the formation of this question is to know the level of brand loyalty of the consumers towards the brands of the soaps available in the market. The above figure shows that on 56 per cent of the respondents are loyal to their brands. FMCG are such a market where the level of loyalty remains low and this is because of many reasons.

3. Which factors do you normally consider while purchasing a particular brand of Soap?

Factors Fragrance Quality Company image Price

Respondents 19 33 16 23

23

Packaging Others

6 3

Respondents
Fragrance Quality

Particulars Yes No

Respondents 78

Company Image Price

22
Packaging Others

Interpretations The objective behind this question is to know the factors of influencing in the purchase decision of the soaps. It mainly contains the factors like quality which plays an important role in the purchase decision of the soaps.

4. Do you consider promotional schemes while purchasing a particular brand of Soap?

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Respondents

Yes No

Interpretation Answer of this question will give idea about the effect of promotional schemes in the purchase decisions. Such types of schemes always attract more and more consumers towards particular brand. Simultaneously it gives idea about the factors which consumers look most in the product before they make final decision.

5. Which of the following promotional schemes you have come across so far?

Promotional schemes Coupons Price off Freebies

Respondents 16 84 24

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Scratch cards Lucky draw Bundling Extra qty.

12 9 31 44

Respondents

Coupons Price off Freebies Scratch cards Lucky draw Bundling Extra qty.

Interpretation The above stated question clearly states the awareness of promotional schemes offered in the market by the marketers to attract more and more consumers. The results show that price off and extra quantity is the two main offers/schemes which consumers have came across at the time of purchase. It will help the manufacturers and marketers to how to launch their new products in the market with which schemes.

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6. Which medium do you feel is suitable to promote the various promotional schemes?

Source Radio TV Newspaper Hoarding Others

Respondents 11 69 43 15 12

Respondents

Radio T.V Newspaper Hoarding Others

Interpretation This question gives stress on the media habit of the people and through which the product should be launch or they think it would be better than other media.

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The above result shows T.V as the best media to market the product which will cover majority of the viewership. On the second place it shows newspapers as the media to promote the product in the market.

7. Is there any existing scheme on the Soap you are currently using?

Particulars Yes No

Respondents 58 42

Interpretation The answer of the respondents give idea about the awareness of the promotional schemes offered in the market on their existing soaps. In this situation more that forty per cent of people are not aware or having vague idea about the promotional schemes running into the market. It shows that people are not much aware of the schemes which continue in the market it may be because of the present stock of the product at their place.

8. If yes, please specify?

Particulars Respondents 3+1/Other Free

36

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Discount No idea No answer

22 6 36

Respondents

3+1/Other free Discount No idea No answer

Interpretations

This question supports the above question. It contains the answers of those customers who are aware of the present schemes offered in the market and also those schemes which are more demanded in the market. The result shoes that 1+1 or 2+1 or other free schemes are more demanded and more aware schemes in the market. So manufactures may go for the same at the time of launching their product.
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9. If you get an attractive promotional offer in the product other than of your choice will you switch over?

Particulars Yes No

Respondents 73 27

Respondents

Yes No

Interpretation
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It shows the level of brand loyalty among consumers. The result clearly shows that out of 100, 73 people are ready to switch over to another brand if they find better promotional schemes which suits their budget means more Quantity + Low cost + Quality. Combination of all these schemes will run better in the market.

10. Give reason for the same?

Particulars Cost + Qty Quality Satisfaction Brand loyal More Benefit Season change No answer

Respondents 16 17 2 5 22 2 36

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Respondents

Cost + Qty Quality Satisfaction Brand loyal More Benefit/Budget Season change No answer

Interpretation

Above question gives specific reasons for switching to other products. It shows that extra quantity with less or same or same price, more satisfaction, quality and other factors influence consumers to switch over to other brands.

11. Give suggestions about futuristic promotional schemes?

This shows the consumers` future expectations from whether the company to come with new schemes or to continue with the present one. It shows consumers demand which the manufactures have to meet.

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RETAILERS

1. Since how long are you in this business?

Particulars 1-5 Years 5-10 Years More than 10 years

Respondents 24 27 49

Respondents

1-5 Years 5-10 Years More than 10 years

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Interpretation

This question gives idea about the benefit to the retailers who are on the market from long period of time and the benefits they are getting more as compare to others. It also shows their experience in the field and the services they are providing to their new and regular customers. It also gives idea about the benefits they are gaining for wholesalers and direct from the company.

2. Name the brand you stock more?

Companies Lux Medimix Chandrika Dettol Others

Respondents 31 5 28 10 26

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Respondents

Lux Lifebouy Dettol Medimix Others

Interpretation It gives idea about the capacity of the retailers to stock the goods and also the variety of the products they are stocking. It will also make clear the demand of the goods in their stores and the selling of the products in the market. Most of the retailer stocks all types of brands.

3. Rank the following factors that customers look for in the purchase of the Soap. (Rank from 1 to 6).

Factors Fragrance Quality Company

1 3 66 9

2 24 23 18

3 33 7 34

4 22 3 24

5 10 1 11

6 8 0 4

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Image Price Packaging Others 17 4 1 28 5 2 24 2 0 16 27 8 6 38 34 9 24 55

Respondents

Fragrance Quality Company Image Price Packaging Others

Interpretations

It gives an idea about the priority the influencing factors to the consumers and also the weight age of that factor over other factors.

4. Do you suggest customers to purchase a certain brand?

Particular Respondents Yes No 33 67

Respondents

Yes No

Interpretation

This could be a very help question to understand the role of retailers in the purchase decision. In above graph 67 per cent of the retailers are not suggesting to purchase particular brand of personal relation or that customer are brand loyal. While 33 per cent of the retailers are suggesting customers to buy a particular brand. There could be many reasons like, extra margin, relationship with the customers and quality of the products which retailer may get the benefit of the same.

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5. If yes, why?

Particular High margin Quality Relationship No reason

Respondents 9

17 7 67

Respondent

High margin Quality Relationship No reason

Interpretation

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It gives idea about the ideas about the reasons why retailers suggest the consumers to buy particular brand. In above graph and table it is clear that for margin and of better relations with consumers and to provide quality product to consumers they suggest consumers to buy particular brand. For the company it may be helpful to target such retailers to sell their product in the market easily.

6.

Do customers look for various schemes in the product?

Particular Respondents Yes No 92 8

Respondents

Yes No

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Interpretation

This gives a real helpful data for checking the effect of sales promotions in the market and how seriously consumers follow the promotions before they go for the purchase of any particular brand. The above results shows that only 8 out of 100 did not go for the promotion otherwise all are looking for any type of the promotions on the product.

7. If yes, which scheme?

Promotional Schemes Coupons Price Off Freebies Scratch Cards Lucky Draws Bundling Offer Extra Quantity

Respondents

11 82 35 2 19 65 79

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Respondents

Coupons Price Off Freebies Scratch Cards Lucky Draw Bundling Offer Extra Qty

Interpretation

The above stated results show the demand of various types of promotional schemes in the market by the consumers. Almost all types of schemes are being demanded by the consumers in the market but there are three major schemes which consumers generally look at the time of purchase or before that. Price Off, Product Bundling and Extra Quantity are more demanded by the consumers over other schemes.

8. Which Trade Promotions do various companies offer?

Dettol Promotions Extra Margin Respondents 25

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Extra Units Gifts Promo Exp.

21 10 5

Response on Dettol

Extra Margin Extra Units Gifts Promo. Exp

Interpretation

From the above graph shows the trade promotions offered by the Dettol to the Retailers to attract them towards stocking their goods and also stop them switching them to other major players in the market. Dettol is mainly offering extra margin which is offered by all major players. It also provides extra units and gifts occasionally with their schemes.

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Lux Promotions Extra Margin Extra Units Gifts Promo. Exp. Respondents 47 34 25 22

Response on Lux

Extra Margin Extra Units Gifts Promo. Exp

Interpretation

The advantage of Lux over Dettol is that it bare promotional expenses which Dettol is not doing. It attracts more consumers through such promotions, such as displays, banners etc.

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So this may help it to attract more retailers. It may because of its less cost of production in other segments in which Dettol is not operating.

Chandrika Promotions Extra Margin Extra Units Gifts Promo. Exp. Respondents 40 33 20 12

Response on Lifebuoy

Extra Margin Extra Units Gifts Promo. Exp

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Interpretations

Lifebuoy is also a big player in the FMCG market. It is also providing all the facilities which others are providing to retailers.

Medimix Promotions Extra Margin Extra Units Gifts Promo. Exp. Respondents 46 32 19 18

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Response on Medimix

Extra Margin Extra Units Gifts Promo. Exp

Interpretations

Medimix is also a big player in the market. It is also providing all the facilities which others are providing to retailers. But it is lacking in bearing expenses

OTHERS Promotions Respondents

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Extra Margin Extra Units Gifts Promo. Exp.

30 18 15

Response on Others

Extra Margin Extra Units Gifts Promo. Exp

Interpretation

Others include local players as well as established players, Mysore sandal, Chadanam etc. But their products are not in demand like others players but still they are providing all the facilities to retailers to attract towards stocking their products.
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9. Give reasons for not stocking a particular brand? Retailer stocks all types of Soaps because of cut-throat completion

10. Any suggestions. Retailers suggested that packaging should be further improved and used as promotional tool to encourage sales during certain periods the company should provide Price Off or Extra Qty offers because that influences directly to the consumer.

FINDINGS OF THE REPORT Sales Promotion, a short term inducement offered to a consumer or trade has gained momentum as a promotional tool world over. It represents nearly three fourth of the marketing budget at most consumer product companies. Sales Promotions can enhance consumers` self-perception of being SMART or a GOOD shopper. FMCG is a such market where the level of loyalty remains because of many reasons. low and this is

Quality as the most influencing factors in the purchase decision while price is also an important for purchase decision.

Price is also an important for purchase decision.

Schemes always attract more and more consumers towards particular brand. Simultaneously it gives idea about the factors which consumers look most in the product before they make final decision.
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Price Off and Extra Quantity is the two main offers which consumers have came across at the time of purchase. T.V as the best media to market the product which will cover majority of the viewership . On the second place, it shows newspapers as the media to promote the product in the market.

People are not much aware of the schemes which continue in the market it may be because of the present stock of the product at their place.

1+1 or 2+2 or other free schemes are more demanded and more aware schemes in the market.

People are ready to switch over to another brand if they find better promotional schemes which suits their budgets means more qty + less cost + quality

Extra quantity with less or same price, more satisfaction, quality and other factors influence consumers to switch over to other brands.

Retailers stock all types of brands due to cut-throat competition.

People are more quality and price conscious. Retailers are not suggested to purchase particular brand because of personal relation or that customer are brand loyal.

Customers are looking for any type of the promotions on the product before they purchase it.

Price Off, Product bundling and Extra quantity are more demanded by the consumers over other schemes.
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RECOMMENDATIONS The findings of the empirical study indicate that unless the brand to be promoted is in the consideration set of the consumer, sales promotion by itself is unlikely to have any major impact. Clearly this shows that managers need to invest into brand building exercise so that his/her brand appears in the consideration set of the target consumers. Only after this he should spend Time, Money and Energy on sales promotion activities. Sales promotion should not be used in isolation but need to be integrated with other tools and in line with the overall positioning the brand. Also the importance of the role of mass media came out clearly in the study. Companies need to create sufficient awareness about sales promotion schemes through mass media in order to create awareness. FMCG products are low involvement products characterized by switching behavior. Also the person going to the shop for the purchase of soap is the final decision maker of the brand. Hence it is essential that companies need to design Attractive, Striking, Visible POPs for scheme announcements.

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With respect to nature of scheme, the findings suggested that premium was popular with companies. While both retailers and consumers preferred Price Offs. So it is necessary that the perceived value of a free gift has to be appealing and high for the target consumers. Repetitive use of the same premium for a prolonged period may have negative effect on the loyal customers. When the company is giving its own product free as premium, it needs to ensure the quality of the product from it is likely to jeopardize the image of both its products. The findings exhibited that both the retailers and consumers perceived that sales promotion activities carried out by the companies for increasing sales in short term and clearing excess stocks. What it implies is that companies need to use sales promotion synergistically and communicate so that they provide value to the target audience and enhance brand quality/image perceptions. Companies need to systematize information flow regarding sales promotion activities particularly at dealer and retailer level. Ensuring proper information flow and devising checks and measures to reduce misappropriations and implementation flows should be considered critical aspects for the success of sales promotion activities by the companies. As retailing is fragmented, direct reach by companies is next to impossible. Through dealers and proper feedback mechanism, companies keep in touch with the market. From the study it was found that smaller retailers felt neglected and not enthusiast to implement the schemes, particularly when additional handling, stocking, accounting was required on the part of a retailer without compensatory margins. It can be seen that the retailer and consumer perceptions matched with respect to preferences of schemes, underlying motivations and role of mass media. This implies that the retailer would be a rich source of information about the consumer and the likely response to sales promotion activities. Developing a system to tap such response from time to time both at retailer and consumer level would be helpful for planning future sales promotion activities. In order to build trust and commitment companies should tap preferences, perceptions of retailers as well as consumers.

LIMITATIONS OF THE STUDY

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I conducted South Kerala region only because of limited time duration.

Due to this, my sample size is only 100, which is not very large

Respondent may have given biased answer due to some lack of information about other brands.

Findings of the study are based on the assumption that the respondents have given correct information.

EMERGING TRENDS

So far as FMCG market is concern there is a new trend is emerging known as Joint Sales Promotion. Actually it is an old concept but it was more prevailing in durable products now it is coming into non durable goods also. When any sales promotion scheme either for trade or consumer is announced by more than one company and or more than one brand of the same company, it is referred as Joint Sales Promotion or Horizontal Co-operative Sales Promotion or Cross Promotion or Umbrella Sales Promotion.

Classification of joint sales promotion

Use complementarily due to natural use. New use catering complementary relationships. Commonality of need due to use of time. Tie-up of a new /slow moving brand with an established brand.
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Target market commonality. Seasonal demand. Distribution commonality. Targeting new segment. Derived demand. Countering competitive joint sales promotions.

CONCLUSION OF THE SURVEY

The study reflects that the use of sales promotion undeniably has increased over the years in India. Future holds lot of promise for such schemes across wider range of product-markets.

Sales Promotion has ceased to be major differentiator at least in the metros, with almost all companies offering similar freebies and gifts. As a result now marketers have to find out some innovative ways of sales promotion to differentiate from competitors. Currently Price off and Buy one and get one free offers are very effective to attract the consumers towards the products.

We have noted that these kind of promotional tools are useful for short term increase in sales and to induce first trial. These types of promotional schemes should be consistent and changed from time to time depending upon season and competitors schemes.

With the Increasing number of supermarket, the branded packaged goods work as silent sales person. So in such stores, sales promotion plays a more effective role in stimulating consumers demands.
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One of the very important facts we came to know from this project is that sale of goods which contain large quantity and having big packaging, the reasons are: small pack goods reduce risk of bad quality, It has low cost or say price, and last but important factor i.e. mentality to purchase just to try first. Sales of small pack goods are quite high, but from the companys point of view small pack goods is less profitable compare to large pack goods.

So here marketer tries to increase sales of large pack goods by using sales promotion tactics like price off and by extra quantity.

BIBLIOGRAPHY

Philip Kotler, Marketing Management, 11th edition, Pearson education Asia Publication.

S.Sumathi and P.Saravanavel, Marketing Research & Consumer Behavior, Vikas Publishing House Pvt. Ltd.

Internet ( www.google.com).

ANNEXURE
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Questionnaire for Consumers

Name: Brand Lux Medimix Chandrika Dettol Others Respondent

Gender: Location: 1. Which brand of Soap do you use?

2. Do you always but the same brand of Soap?

Particulars Yes No

Respondent

3. Which factors do you normally consider while purchasing a particular brand of Soap?

Factors Fragrance Quality Company image

Respondents

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Price Packaging Others

4. Do you consider promotional schemes while purchasing a particular brand of Soap?

Particulars Yes No

Respondent

5. Which of the following promotional schemes you have come across so far?

Promotional schemes Coupons Price Off Freebies Scratch Cards Lucky Draw Bundling Extra Qty.

Respondent

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6. Which medium do you feel is suitable to promote the various promotional schemes?

Source Radio TV Newspaper Hoarding Others

Respondent

7. Is there any existing scheme that you are currently using?

Particulars Yes No

Respondent

8. If yes, please specify?

Particulars 3+1/Other Free Discount No idea

Respondent

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No answer

9. If you get an attractive promotional offer in the product other than of your choice will you switch over?

Particulars Yes No

Respondent

10. Give reason for the same?

Particulars Cost + Qty Quality Satisfaction Brand Loyal More Benefit Season Change No Answer

Respondent

11. Give suggestions about futuristic promotional schemes.

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Questionnaire for Retailers

Name:

Location:

1. Since how long are you in this business?

Particulars 1-5 Years 5-10 Years More than 10 years

Respondent

2. Name the Soap brand that you stock more?

Brand Medimix Dettol Lux Chandrika Others

Respondent

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3. Rank the following factors that customers look for in the purchase of Soap (Rank from 1 to 6)

Factors Fragrance Quality Company Image Price Packaging Others

4. Do you suggest customers to purchase a certain brand?

Particular Respondent Yes No

5. If yes, why?

Particular High margin

Respondent

60

Quality Relationship No reason

6. Do customers look for various schemes in the product?

Particular Respondent Yes No

7. If yes, which schemes?

Promotional Schemes Coupons Price Off Freebies Scratch Cards Lucky Draws Bundling Offer

Respondent

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Extra Quantity

8. Which Trade Promotions do various brands offer?

Medimix Promotions Extra Margin Extra Units Gifts Promo. Exp. Respondent

Lux Promotions Extra Margin Extra Units Gifts Promo. Exp. Respondent

Chandrika Promotions Extra Margin Extra Units Gifts Promo. Exp. Respondent

Dettol Promotions Respondent

Extra Margin Extra Units Gifts Promo. Exp.

OTHERS Promotions Extra Margin Extra Units Gifts Promo. Exp. Respondent

9. Give reasons for not stocking a particular brand.

10. Any suggestions.

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