rm project digu

8/10/2019 Rm Project Digu

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A role of Sales Promotion in Fast moving consumer

goods

INTRODUCTION

In todays world market the people are more insist for consumer goods.

Consumer goods are those goods which are entailing for human life in daily use. So demand

for those goods also increasing day by day. These goods are essential for human life. There

are many industries those who are like to produce such types of goods which are essential to

consumer in his day to day life. Industries or companies however, provides such products are

initially known as, Fast oving Consumer !oods i.e. FC! industries. These companies

produce such types of goods which are re"uire in human day to day life such as bath soap,

toothpaste, hair oil, detergent etc. #roducts which have a "uick turnover, and relatively low

cost are known as Fast oving Consumer !oods $FC!%. FC! products are those that

get replaced within a year. FC! sector is the fourth largest sector in the economy and

creates employment for more than three million people in downstream activities. Its principal

constituents are &ousehold Care, #ersonal Care and Food ' (everages. The total FC!

market is in e)cess of *s. +,--- Crores. It is currently growing at double digit growth rate

and is e)pected to maintain a high growth rate.. The *s +,---crore Indian FC! industry

is e)pected to register a healthy growth in the third "uarter of /-0-00 despite the economic

downturn.

In simple words, the more loyal the customers, the higher the customer e"uity


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OBJECTIVES OF THE STUDY

1. To study the concept of FMCG i.e. Fast Moving Consumer Goods.

2. To study consumer preferences with respect to sales promotion in

FMCG sector.

3. To study the sales promotional strategies.

4. To study and analye FMCG sector with !"#T analysis.

$. To study how the FMCG improves mar%eting productivity through

sales promotion activities.

&. To study the relationship with consumer maintained 'y FMCG with the

help of sales promotional strategies.

(. To study the factors in)uencing consumer oriented sales promotion.

*. To study the factors in)uencing Trade oriented sales promotion.

+. To study the e,ect of sales promotion activities on FMCG sector.

1-. To study consumer 'ehaviour in purchase of soaps and detergent.


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PRODUCT CATEGORES U!DER

STUD"

DETERGENTS: 1ashing #owder for Clothes

TOILETERIES2 Soaps

RESEARC# $ET#ODO%OG"

Primar& Data '(

#rimary data could be collected through survey method as well as "uestionnaire

method and personal interviews with certain consumers who are likely to use the

consumer goods as per company goodwill in their mind. Type of structured

"uestionnaire is open ended and closed ended.

Secondar& Data '(

Secondary data would be collected from books, newspaper, articles, internet,

maga3ines, 4ournal etc.

SA$P%!G DETA%

)* Target +o+ulation' The population for this research study consists of the

residence of 5alyan.

,* Sam+ling unit' In this study the sampling unit is individual consumer.


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-* Sam+ling met.od: Sample is selected by using conveniencesampling method.

LIMITATIONS OF THE STUDY

1e considered 5alyan region only because of limited time duration.

6ue to this, our sample si3e is only 0--, which is not very large.

7ll the respondents could not fill their "uestionnaire on their own due to

language problem and also problem of time and lack of positive behaviour.

*espondent may give 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.


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C#APTER SC#E$E

)* ntroduction

Page/0()1

. Concept / de0nition

. Characteristics of FMCG roduct

. #'ective of the study

. Methodology and !ampling details

,* n overview of FMCG !ector and some FMCG companies.

Page/)) 2 )3

-* n overview of !ales romotion concept.

Page/)4 2 ,5

3* !ales promotional strategies

Page/,6 2 -1

4* !"#T nalysis and mpact of romotions

Page/-) 2 -3


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5* 5ata nalysis of the survey

Page/-4 2 54

6*Finding6 7ecommendation and Conclusion

Page/55 2 6)

0* nne8ure6 9uestionnaire

Page/6, 2 0)

7i8liogra+.& Page/0-

INTRODUCTION

CONCEPT & DEFINITION

The term FC! $fast moving consumer goods%, although popular and fre"uently

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 e)ists

between the general use and the conceptual meaning of the

8ne of the factors on which the turnaround depends is the purchase cycle.

&owever, the purchase cycle for the same product tend to vary across population

segments. any lowincome households are forced to buy certain products more

fre"uently because of lack of li"uidity and storage space while relatively highincome


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households buy the same products more infre"uently. Similarly, the purchase cycle also

tends to vary because of cultural factors. ost Indians, typically, prefer fresh food

articles and therefore to buy relatively small "uantities more fre"uently. This is in sharp

contrast with what happens in most western countries, where the practice of buying and

socking foods for relatively longer period is more prevalent.

CHARACTERISTICS OF FMCG PRODUCT

Individual items are of small value. (ut all FC! products put together account

for a significant part of the consumer9s budget.

The consumer spends little time on the purchase decision. *arely does he:she look

for technical specifications $in contrast to industrial goods%. (rand 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.

OBJECTIVE OF THE STUDY

0. To study consumer preferences with respect to sales promotion in FC! sector.


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/. To e)amine tradeoffs, relative importance of different attributes while responding to

a sales promotion offer.

;. To study the effect of sales promotions in FC! sector esp. in soaps and detergentindustry.


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7rticles, aga3ines and =ournals

Sa$li' Detail

)* Target +o+ulation' The population for this research study consists of

the residence of 5alyan.

,* Sam+ling unit' In this study the sampling unit is individual

consumer.

-* Sam+ling met.od' Sample is selected by using conveniencesampling

method.

AN OVERVIE( OF FMCG SECTOR AND SOME

FMCG COMPANIES*

FMCG SECTOR

Individual re"uire goods which are re"uire daily in their life. Those goods are called

as consumer goods which can be produce by FC! companies. These companies produce

consumer goods, sell those goods into consumer market and makes huge amount of profit.

These goods include such goods which the people re"uired in their day to day life for e.g.

hair oil, toothpaste, shaving cream, soap, detergent etc.

FC! stands for Fast oving Consumer !oods which is also known as consumer

packaged goods $C#!%. FC! products are relatively small but in generally include a wide

range of fre"uently purchased consumer products such as soap, cosmetics etc. as well as


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other nondurable such as glassware, bulbs, batteries, paper product and plastic goods.

FC! may also include pharmaceuticals, consumer electronic, packaged food products and

drinks, although these are often categori3ed separately.. In short, FC! provides such goods

or consumer market sells those goods which are daily re"uired in human life. (roadly

speaking most of the companies using arketing i) which includes>#rice, #lace

$Channel of 6istribution%#roduct #romotion.

SOME TOP TEN FMCG COMPANIES

#industan Unilever %td*'

It is a leading name in India in producing personal and healthcare products. The

company was awarded the !olden Super Star Trading Company status from the

!overnment of India.

Da)*# I"ia Lt"+:

6abur India produces a variety of healthcare products and en4oys a turnover of

appro)imately I?* 0+@@ crores.

I"ia To)acco Co$a%'


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ITC is in e)istence since 0@0- and has diversified its business in producing a variety of

consumer goods. The company is known for ensuring the highest level of employee

satisfaction.

Ne,tle I"ia:

t started its ourney in 1+12 as an nglo

Cadbury is synonymous with chocolates in India. (ut apart from chocolates, the

company also manufactures other food and health drink products like (ournvita.

Procter ; Gam8le #&giene and #ealt. Care'

The product range of #'! comprises personal care products, pet foods and variety of

domestic cleaners.

7ritannia ndustries'

(ritannia is known for manufacturing varieties of biscuits, cookies and also milk,

cheese, butter, ghee etc and en4oys all India market.


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Colgate Palmolive'

It is a trusted name in India for personal care, home care, pet care and oral care

products. Colgate is named as Indias ost Trusted (rand in /-00 in the survey

conducted by ?ielson.

A! O


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persuades and reminds prospective customers about a company and its products. Aven the

most useful product or brand will be a failure if no one knows that it is available. 7s 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.

CO!SU$ER ORE!TED SA%ES PRO$OTO!

Consumer 8riented Sales #romotion is the main topic of this pro4ect. &ere emphasi3e

is given to motivate consumer to increase sales. Consumer 8riented Sales #romotion

includes Sampling, Couponing, #remiums, Contest, *efunds, *ebates, (onus #acks, #rice

off, Avent marketing etc.

De>nition' ?otlerdefines sales promotion as2 BSales promotion consists of a diverse

collection of incentive tools, mostly shortterm designed to stimulate "uicker and:or greater

purchase of particular products:services by consumers or the trade.

Tools of Consumer Oriented Sales Promotion'

There are so many tools or techni:ue availa'le to the mar%eters for

achieving o'ective of sales promotion. These tools should 'e used


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considering all other factors a,ecting such as cost6 time6 competitors6

availa'ility of goods etc. These tools are as under=

1. Coupons

2. rice


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situation. rice


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4* 7undling O@ers

roduct 'undling is a mar%eting strategy that involves o,ering

several productsfor sale as one com'ined product. This strategy is

very common in the software'usiness for e8ample; 'undle a word

processor6 a spreadsheet6 and a data'aseinto a single oHce suite6

in the ca'le television industry for e8ample6 'asic ca'le in the

Inited !tatesgenerally o,ers many channels at one price6

SALES PROMOTION STRATEGY

CONCEPT

Sales promotions are specific efforts that are designed to have an immediate impact on

sales. It refers to many kinds of incentives and techni"ues directed towards consumers and
http://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Product_(business)http://en.wikipedia.org/wiki/Softwarehttp://en.wikipedia.org/wiki/Word_processorhttp://en.wikipedia.org/wiki/Word_processorhttp://en.wikipedia.org/wiki/Spreadsheethttp://en.wikipedia.org/wiki/Databasehttp://en.wikipedia.org/wiki/Office_suitehttp://en.wikipedia.org/wiki/Cable_televisionhttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Product_(business)http://en.wikipedia.org/wiki/Softwarehttp://en.wikipedia.org/wiki/Word_processorhttp://en.wikipedia.org/wiki/Word_processorhttp://en.wikipedia.org/wiki/Spreadsheethttp://en.wikipedia.org/wiki/Databasehttp://en.wikipedia.org/wiki/Office_suitehttp://en.wikipedia.org/wiki/Cable_televisionhttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Marketing


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traders with the intention to produce immediate or shortterm sales effects. For e)ample,

buy one get on free, introductory offers etc.

There are three types of sales promotion strategies2

P*,! St#ate'%:

7 Dpush sales promotion strategy involves Dpushing distributors and retailers to sell

your products and services to the consumer by offering various kinds of promotions

and personal selling efforts. 1hat happens here is that a company promotes their

product:services to a reseller who in turn promotes it to another reseller or to the

consumer. The basic ob4ective of this strategy is to persuade retailers, wholesalers and

distributors to carry your brand, give it shelf space, promote it by advertising, and

ultimately Dpush it forward to the consumer. Typical push sales promotion strategies

includeE buyback guarantees, free trials, contests, discounts ,and specialty advertising

items.

Pull Strateg&'

7 Dpull sales promotion strategy focuses more on the consumer instead of the reseller

or distributor. This strategy involves getting the consumer to Dpull or purchase the

product:services directly from the company itself. This strategy targets its marketing

efforts directly on the consumers with the hope that it will stimulate interest and


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demand for the product. This pull strategy is often used when distributors are reluctant

to carry or distribute a product. Typical pull sales promotion strategies includeE

samples, coupons, cash refunds or rebates, loyalty programs and rewards, contests,

sweepstakes, games, and pointofpurchase displays.

A Co$)iatio o- T.o St#ate'ie,:

7 Dcombination sales promotion strategy is 4ust thatE 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 with dealer discounts.

S=OT A!A%"SS A!D $PACT OF

PRO$OTO!S

S=OT A!A%"SS OF F$CG SECTOR

Strengt.s'


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"ellow e8port levels.

!mallarge domestic mar%ets.

@8port potential.

ncreasing income levels will result in faster revenue growth..

Intapped rural mar%et

Kigh consumer goods speding

T.reats'


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7emoval of import restrictions resulting in replacing of

domestic 'rands.

Ta8 and regulatory structures.

!lowdown in rural demand.

DATA A!A%"SS OF T#E SUR


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B)* =.ic. 8rand of Soa+ Detergent do &ou use

7at.ing 2

soa+s

Res+onde

nts

>u8 41

Kamm 3

>ife'uoy 14

Bima *

#thers 34

nter+retation'

The above "uestion has been formed to know the soaps and detergents at the top of the

mind of the customers. It shows those consumers purchase and use of that particular brand.

It will help to the company to know the market scenario and the ma4or brands in the market.

7at.ing soa+s

0

10

20

30

40

50

7espondents 41 3 14 8 34

>u8 Kamam >ife'uoy Bima #thers


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Form the above result it is clear that out of 0-- customers more than


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Form the a'ove result it is clear that out of 1-- customers 3$ are

purchasing the same 'rand of detergent6 whereas all others are on same

level.

B,* Do &ou ala&s 8u& t.e same 8rand of Soa+ Detergent

ParticularsRes+onde

nts

Les $&

Bo 44


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nter+retation'

The o'ective 'ehind the formation of this :uestion is to %now

the level of 'rand loyalty of the consumers towards the 'rands of soaps

availa'le in the mar%et. The a'ove 0gure shows that on $&E of the

respondents are loyal to their 'rands of detergentsoap. FMCG are such a

mar%et where the level of loyalty remains low and this is 'ecause of

many reasons.

B-* =.ic. factors do &ou normall& consider .ile +urc.asing a

+articular 8rand of Soa+ Detergents

Factors

7at.ing

soa+ Det*+oder

7rand lo&al

0

10

20

30

40

50

60

7espondents 56 44

Les Bo


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Fragrance 1+ 1*

9uality 33 3&

Company

image 1& 13rice 23 1+

ac%aging & 11

#thers 3 3

nter+retation'

The o'ective 'ehind this :uestion is to %now the e,ect of

in)uencing factors in the purchase decision of the soaps and detergent

powders. t mainly contains the factors li%e6 :uality which players an

important role in the purchase decision of the soaps and detergents

'oth. f we loo% at the graph of the soaps and detergent it shows :uality

as the most in)uencing factors in the purchase decision while price is

Factors a@ecting +urc.ase 8e.aviour

0

10

20

30

40

?athing soap 1+ 33 1& 23 & 3

5et.powder 1* 3& 13 1+ 11 3

Fragrance 9ualityCompany

Imagerice ac%aging #thers


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also an important for purchase decision. their new products in the mar%et

with which schemes.

DATA A!A%"SS OF RETA%ERS

B)* Since .o long are &ou in t.is 8usiness


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Particulars Res+ondents

1


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Com+anies Res+onde

nts

Birma +&

KI> 1--

/G +-

Godre +4

#thers &*

nter+retation'

t gives idea a'out the capacity of the retailers to stoc% the

goods and also the variety of the products they are stoc%ing. t will also

ma%e clear the demand of the goods in their stores and the selling of the

product in mar%et. Most of the retailer stoc%s all types of soap and

detergent.

Soa+ Detergent in stoc

0

20

40

60

80

100

120

Series1 96 100 90 94 68

Nirma HUL P! !o"re# $thers


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B-* Ran t.e folloing factors t.at customers loo for in t.e

+urc.ase of Soa+ Detergent*

9Ran from ) to 5:

Factors ) , - 3 4 5

Fragrance 3 24 33 22 1- *

Bualit& && 23 ( 3 1 -

Com+an&

mage+ 1* 34 24 11 4

Price 1( 2* 24 1& & +

Pacaging 4 $ 2 2( 3* 24

Ot.ers 1 2 - * 34 $$


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nter+retation'

It gives an idea about the priority the influencing factors to the consumers and also the

weight age of that factor over other factors.

In the above result people are more "uality and price oriented. 8n the other hand

people are also conscious about the company image because sometimes the consumer

remembers that name of the product by the company name and also from the past

performance of that company. Fragrance and packaging are not influencing factor as per

the respondents.

7at.ing Soa+

0

10

20

30

40

50

60

70

Fragrance 3 24 33 22 10 8

9ua%ity 66 23 7 3 1 0

CompanyImage 9 18 34 24 11 4

rice 17 28 24 16 6 9

ac%aging 4 5 2 27 38 24

#thers 1 2 0 8 34 55

1 2 3 4 5 6


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Factors ) , - 3 4 5

Fragran

ce

11 1( 41 21 ( 3

Bualit& 43 34 1& & 1 -

Com+an

& mage

13 1& 2( 2& 11 (

Price 2( 2* 14 + & 1&

Pacagi

ng

& $ 2 33 43 11

Ot.ers - - - $ 32 &3


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nter+retation '

It gives an idea about the priority the influencing factors to the consumers and also the

weight age of that factor over other factors.

In the above result people are more "uality and price oriented. 8n the other hand

people are also conscious about the company image because sometimes the consumer

remembers that name of the product by the company name and also from the past

performance of that company. Fragrance and packaging are also play important role for

purchasing detergent powder.

Detergen

t

0

10

20

30

40

50

60

70

&ragran'e 11 17 41 21 7 3

()a%ity 43 34 16 6 1 0

*om+any Image 13 16 27 26 11 7

Pri'e 27 28 14 9 6 16

Pa',aging 6 5 2 33 43 11

$thers 0 0 0 5 32 63

1 2 3 4 5 6


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FINDING/ RECOMMENDATION AND CONCLUSION

F!D!GS

Sales #romotion, a shortterm 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 Bsmart or a Bgood shopper

FC! are such a market where the level of loyalty remains low and this is because of

many reasons.

Guality as the most influencing factors in the purchase decision while price is also an

important for purchase decision.

Schemes always attract more and more consumers towards particular brand. TH as the

best media to market the product which will cover ma4ority of the viewer ship. 8n the

second place it shows news papers as the media to promote the product in the market.

Customers are looking for any type of the promotions on the product before them going

to purchase.

?I*7 is mainly offering credit facility which is offered by all ma4or players it may

differ in the time limit of the credit.


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RECO$$E!DATO!

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

ma4or impact. Clearly this shows that managers need to invest into brand building e)ercise

so that his:her brand appears in the consideration set of the target consumers. 8nly after this

should he spend time, money and energy on sales promotion activities.

Companies need to create sufficient awareness about sales promotion schemes through

mass media in order to create awareness. FC! products are low involvement products

characteri3ed by switching behaviour. 7lso the person going to the shop for the purchase of

soap is the final decision maker of the brand. &ence it is essential that companies need to

design attractive, striking, visible #8#s for scheme announcements.1ith respect to nature

of scheme, the finding suggested that premium $free gift% was popular with companies.

1hile 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.

The findings e)hibited that both the retailers and consumers perceived that sales

promotion activities.6eveloping a system to tap such responses 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 consumer.


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CO!C%USO!

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 #romotion has ceased to be ma4or differentiator at least in the metros, with almost

all companies offering similar freebies and gifts.. Currently #rice off and buy one get one

free offers are very effective to attract the consumers towards the products. 1ith 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.

8ne of the very important facts we came to know from this pro4ect is that sale of goods

which contain large "uantity and having big packaging e.g. detergent are stagnating because

consumer prefer to buy small pack goods, the reasons are2 small pack goods reduce risk of

bad "uality, It had low cost or say price, and last but important factor i.e. mentality to

purchase 4ust to try first. Sales of small pack goods are "uite 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 percentage e)tra.


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A!!EURE

BUESTO!!ARE FOR CUSTO$ER

am student of M.com !emester N studying in 0 SO$A"A CO%%EGE

u8

Kamam

>ife'uoy

Birma

#thers


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Particula

rs

Res+onde

nt

LesBo

B-* =.ic. factors do &ou normall& consider .ile +urc.asing a

+articular 8rand of Soa+ Detergents

Factors

7at.in

g soa+

Det*+od

er

Fragrance

9uality

Company image

rice

ac%aging

#thers

B3* Do &ou consider +romotional sc.emes .ile +urc.asing a

+articular 8rand of Soa+ Detergent

Particulars

Res+onde

nt

Les

Bo

B4* =.ic. of t.e folloing +romotional sc.emes &ou .ave comeacross so far

Promotiona

l sc.emes

Res+onde

nt

Coupons


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price o,

BUESTO!!ARE FOR RETA%ERS

BUESTO!!ARE

am student of M.com. !emester N studying in 0 SO$A"A

CO%%EGE


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Birma

KI>

/G

Godre

#thers

B-* Ran t.e folloing factors t.at customers loo for in t.e

+urc.ase of Soa+ Detergent* 9Ran from ) to 5:

Factors ) , - 3 4 5

Fragrance

9uality

Company

mage

rice

ac%aging

#thers

B3* Do &ou suggest customers to +urc.ase a certain 8rand

Particul

ar

Res+onde

nt

Les

Bo

B4* f "es .&

Particula

r

Res+onde

nt

Kigh


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margin

9uality

7elationsh

ipBo reason

77%OGRAP#"

12 Re-e#ece Boo3,

Mar%eting Management 'y hilip otler6 arling indersley

ndia pvt ltd.

. ndustrial Mar%eting 'y C.!.G. rishnamachatyula and

>alitha 7.6 Daico u'lishing

42 Jo*#al

!pecial ssue on Customer @:uity Management

52 Ma'a6ie,

?usiness Today

72 Ne., Pae#,

The Times of ndia

5B


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www. wi%ipedia. Com

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