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    Ompraksh Ompraksh Document Transcript

    • A PROJECT REPORT ON “ROLE OF SALES PROMOTION ON FMCG”(Submitted in partial fulfillment for the Award of Degree of Master of Business Administration) (2009-2011)Submitted By: Submitted To:Omprakash Yadav Mr. Yogendra SinghMBA 4th Semester (Assist. Prof.) SCHOOL OF MANAGEMENT SOBHASAIRA GROUP OF INSTITUTIONS GOKULPURA, NH-11, SIKAR (RAJ)
    • PREFACEIn this age of globalization hyper competition has become a regular feature. Today themarkets are no less then battlegrounds and one has to strive very hard for survival andgrowth.Due to very rapid industrialization all over the world the demand for the managerialpersonnel and the administrative personnel has increased. The perfect study ofManagement involves both the theoretical as well as practical aspects. To survive in thishighly competitive market ―Practical Knowledge‖ is as relevant as the Theoretical.The significance of MBA Degree is that the Theoretical aspects, which a student learnsthroughout the year in the class sessions, can be practically applied through differentprojects, which one undertakes. Keeping in tune with this doctrine, we have tried toapply theoretical aspects through out the project, which we learned under the course ofmanagement.In this project more emphasize given to the various tools of sales promotion and itsimpact on consumers buying decisions. Actually in recent trend to some extent thistechnique also become victim of clutter, even though it can be eliminated by generatinginnovative and more attractive tools to lure the customers.Now a day most of the FMCG companies considering sales promotion as an importantpart of their marketing strategy. From the analysis of survey it becomes clear thatconsumers do response to the sales promotion campaign, but there are customers whostrongly prefer to stick to brand name. Omprakash Yadav -1-
    • ACKNOWLEDGEMENTEvery study requires a guidance of someone who is working in that field. Firstly wewould like to thank Dean Sir Prof. Praveen Kumar for providing an opportunity ofpreparing a Project Report and allowing us to use the resources of the institution duringthis project.I am extremely thankful to my Project Guide, Mr. Yogendra Singh, faculty ofSobhasaria Group of Institution his precious guidance regarding the preparation of theProject Report. His guidance has proved to be useful and without him, the preparationof this report might not have been possible.I am also thankful to the other faculty members of Sobhasaria Group of institution forextending their valuable support for this project.I also extend my sincere thanks to the Respondents, who helped me during the courseof my project and for their gracious attitude.I would like to take this opportunity to extend my warm thoughts to those who helpedme in making this project a wonderful experience. -2-
    • Executive SummaryAs a part of our study curriculum it is necessary to conduct a grand project. It providesus an opportunity to understand the particular topic in depth and which leads to throughto that topic. My topic for the grand project is titled as ―Study of consumer oriented salespromotion in FMCG sector‖ in which emphasis given to the effect of sales promotion onbuying habits of consumers.To start with we will give brief information regarding FMCG sector then moving to themain topic we will explain what is topic is all about. Promotion is one of the pillars ofmarketing 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 narratedas operant conditioning and projective theory. Based on secondary source certaintheoretical aspects are also included as a part of study.After then concentration is given to the primary research. It includes the analysis andresults of survey which was focuses on consumer‘s behavior towards sales promotioncampaign. The survey was conducted with the help of structured questionnaire.At last conclusion of report, findings and suggestions was given based on study ofsecondary source as well as primary research. -3-
    • INDEXS.No. TOPICS Page No.1. Industrial Profile2. Introduction3. Introduction to the topic4. Sales promotion strategies5. SWOT Analysis6. Research Methodology of the study7. Data Analysis of the survey8. Findings of the report9. Recommendations10. Limitations11. Emerging Trends12. Conclusion13. Bibliography14. Annexure: Questionnaire -4-
    • -5-
    • Industrial ProfileFMCG are products that have a quick shelf turnover, at relatively low cost and dontrequire a lot of thought, time and financial investment to purchase. The margin of profiton every individual FMCG product is less. However the huge number of goods sold iswhat makes the difference. Hence profit in FMCG goods always translates to number ofgoods sold.Fast Moving Consumer Goods is a classification that refers to a wide range offrequently purchased consumer products including: toiletries, soaps, cosmetics, teethcleaning products, shaving products, detergents, and other non-durables such asglassware, bulbs, batteries, paper products and plastic goods, such as buckets.‗Fast Moving‘ is in opposition to consumer durables such as kitchen appliances that aregenerally replaced less than once a year. The category may include pharmaceuticals,consumer electronics and packaged food products and drinks, although these are oftencategorized separately.The term Consumer Packaged Goods (CPG) is used interchangeably with Fast MovingConsumer Goods (FMCG).Three of the largest and best known examples of Fast Moving Consumer Goodscompanies are Nestlé, Unilever and Procter & Gamble. Examples of FMCGs are softdrinks, tissue paper, and chocolate bars. Examples of FMCG brands are Coca-Cola,Kleenex, Pepsi and Believe.The FMCG sector represents consumer goods required for daily or frequent use. Themain segments of this sector are personal care (oral care, hair care, soaps, cosmetics,toiletries), household care (fabric wash and household cleaners), branded andpackaged food, beverages (health beverages, soft drinks, staples, cereals, dairyproducts, chocolates, bakery products) and tobacco. -6-
    • The Indian FMCG sector is an important contributor to the countrys GDP. It is the fourthlargest sector in the economy and is responsible for 5% of the total factory employmentin India. The industry also creates employment for 3 m people in downstream activities,much of which is disbursed in small towns and rural India. This industry has witnessedstrong growth in the past decade. This has been due to liberalization, urbanization,increase in the disposable incomes and altered lifestyle. Furthermore, the boom hasalso been fuelled by the reduction in excise duties, de-reservation from the small-scalesector and the concerted efforts of personal care companies to attract the burgeoningaffluent segment in the middle-class through product and packaging innovations.Unlike the perception that the FMCG sector is a producer of luxury items targeted at theelite, in reality, the sector meets the every day needs of the masses. The lower-middleincome group accounts for over 60% of the sectors sales. Rural markets account for 56%of the total domestic FMCG demand.Many of the global FMCG majors have been present in the country for many decades.But in the last ten years, many of the smaller rung Indian FMCG companies havegained in scale. As a result, the unorganized and regional players have witnessederosion in market share.History of FMCG in IndiaIn India, companies like ITC, HLL, Colgate, Cadbury and Nestle have been a dominantforce in the FMCG sector well supported by relatively less competition and high entrybarriers (import duty was high). These companies were, therefore, able to charge apremium for their products. In this context, the margins were also on the higher side.With the gradual opening up of the economy over the last decade, FMCG companieshave been forced to fight for a market share. In the process, margins have beencompromised, more so in the last six years (FMCG sector witnessed decline in demand). -7-
    • Current ScenarioThe growth potential for FMCG companies looks promising over the long-term horizon,as the per-capita consumption of almost all products in the country is amongst thelowest in the world. As per the Consumer Survey by KSA-Technopak, of the totalconsumption expenditure, almost 40% and 8% was accounted by groceries andpersonal care products respectively. Rapid urbanization, increased literacy and risingper capita income are the key growth drivers for the sector. Around 45% of thepopulation in India is below 20 years of age and the proportion of the young populationis expected to increase in the next five years. Aspiration levels in this age group havebeen fuelled by greater media exposure, unleashing a latent demand with more moneyand a new mindset. In this backdrop, industry estimates suggest that the industry couldtriple in value by 2015 (by some estimates, the industry could double in size by 2010).In our view, testing times for the FMCG sector are over and driving rural penetration willbe the key going forward. Due to infrastructure constraints (this influences the cost-effectiveness of the supply chain), companies were unable to grow faster. Althoughcompanies like HLL and ITC have dedicated initiatives targeted at the rural market,these are still at a relatively nascent stage.The bottlenecks of the conventional distribution system are likely to be removed onceorganized retailing gains in scale. Currently, organized retailing accounts for just 3% oftotal retail sales and is likely to touch 10% over the next 3-5 years. In our view,organized retailing results in discounted prices, forced-buying by offering many choicesand also opens up new avenues for growth for the FMCG sector. Given the aggressiveexpansion plans of players like Pantaloon, Trent, Shopper‘s Stop and Shoprite, we areconfident that the FMCG sector has a bright future.India offers a large and growing market of 1 billion people of which 300 million aremiddle class consumers. India offers a vibrant market of youth and vigor with 54% ofpopulation below the age of 25 years. These young people work harder, earn more,spend more and demand more from the market, making India a dynamic and aspiration -8-
    • society. Domestic demand is expected to double over the ten-year period from 1998 to2007. The number of households with "high income" is expected to increase by 60% inthe next four years to 44 million households.India is rated as the fifth most attractive emerging retail market. It has been rankedsecond in a Global Retail Development Index of 30 developing countries drawn up by AT Kearney. A.T. Kearney has estimated Indias total retail market at $202.6 billion, isexpected to grow at a compounded 30 per cent over the next five years. The share ofmodern retail is likely to grow from its current 2 per cent to 15-20 percent over the nextdecade, analysts feel.The Indian FMCG sector is the fourth largest sector in the economy with a total marketsize in excess of US$ 13.1 billion. The FMCG market is set to treble from US$ 11.6billion in 2003 to US$ 33.4 billion in 2015. Penetration level as well as per capitaconsumption in most product categories like jams, toothpaste, skin care, hair wash etcin India is low indicating the untapped market potential. Burgeoning Indian population,particularly the middle class and the rural segments, presents an opportunity to makersof branded products to convert consumers to branded products.India is one of the world‘s largest producers for a number of FMCG products but itsFMCG exports are languishing at around Rs 1,000 crore only. There is significantpotential for increasing exports but there are certain factors inhibiting this. Small-scalesector reservations limit ability to invest in technology and quality up gradation toachieve economies of scale. Moreover, lower volume of higher value added productsreduce scope for export to developing countries.The FMCG sector has traditionally grown at a very fast rate and has generally outperformed the rest of the industry. Over the last one year, however the rate of growthhas slowed down and the sector has recorded sales growth of just five per cent in thelast four quarters. -9-
    • The outlook in the short term does not appear to be very positive for the sector. Ruraldemand is on the decline and the Centre for Monitoring Indian Economy (CMIE) hasalready down scaled its projection for agriculture growth in the current fiscal. Poormonsoon in some states, too, is unlikely to help matters. Moreover, the generalslowdown in the economy is also likely to have an adverse impact on disposableincome and purchasing power as a whole. The growth of imports constitutes anotherproblem area and while so far imports in this sector have been confined to the premiumsegment, FMCG companies estimate they have already cornered a four to six per centmarket share. The high burden of local taxes is another reason attributed for theslowdown in the industryAt the same time, the long term outlook for revenue growth is positive. Give the largemarket and the requirement for continuous repurchase of these products, FMCGcompanies should continue to do well in the long run. Moreover, most of the companiesare concentrating on cost reduction and supply chain management. This should yieldpositive results for them.The profile of major leading FMCG Market Players is as follows:1. NESTLE INDIANestlé India is a subsidiary of Nestlé S.A. of Switzerland. With six factories and a largenumber of co-packers, Nestlé India is a vibrant Company that provides consumers inIndia with products of global standards and is committed to long-term sustainablegrowth and shareholder satisfaction.The Company insists on honesty, integrity and fairness in all aspects of its business andexpects the same in its relationships. This has earned it the trust and respect of everystrata of society that it comes in contact with and is acknowledged amongst IndiasMost Respected Companies and amongst the Top Wealth Creators of India. - 10 -
    • Nestlé‘s relationship with India dates back to 1912, when it began trading as The NestléAnglo-Swiss Condensed Milk Company (Export) Limited, importing and selling finishedproducts in the Indian market.Brief HistoryAfter India‘s independence in 1947, the economic policies of the Indian Governmentemphasized the need for local production. Nestlé responded to India‘s aspirations byforming a company in India and set up its first factory in 1961 at Moga, Punjab, wherethe Government wanted Nestlé to develop the milk economy. Progress in Mogarequired the introduction of Nestlé‘s Agricultural Services to educate advice and helpthe farmer in a variety of aspects. From increasing the milk yield of their cows throughimproved dairy farming methods, to irrigation, scientific crop management practices andhelping with the procurement of bank loans. Nestlé set up milk collection centre thatwould not only ensure prompt collection and pay fair prices, but also instill amongst thecommunity, a confidence in the dairy business. Progress involved the creation ofprosperity on an on-going and sustainable basis that has resulted in not just thetransformation of Moga into a prosperous and vibrant milk district today, but a thrivinghub of industrial activity, as well. For more on Nestlé Agricultural Services,Nestlé has been a partner in Indias growth for over nine decades now and has built avery special relationship of trust and commitment with the people of India. TheCompanys activities in India have facilitated direct and indirect employment andprovides livelihood to about one million people including farmers, suppliers of packagingmaterials, services and other goods.The Company continuously focuses its efforts to better understand the changinglifestyles of India and anticipate consumer needs in order to provide Taste, Nutrition,Health and Wellness through its product offerings. The culture of innovation andrenovation within the Company and access to the Nestlé Groups proprietarytechnology/Brands expertise and the extensive centralized Research and Developmentfacilities gives it a distinct advantage in these efforts. It helps the Company to create - 11 -
    • value that can be sustained over the long term by offering consumers a wide variety ofhigh quality, safe food products at affordable prices.Nestlé India is a responsible organization and facilitates initiatives that help to improvethe quality of life in the communities where it operates. Beginning with its firstinvestment in Moga in 1961, Nestlé‘s regular and substantial investments establishedthat it was here to stay. In 1967, Nestlé set up its next factory at Choladi (Tamil Nadu)as a pilot plant to process the tea grown in the area into soluble tea. The Nanjangudfactory (Karnataka), became operational in 1989, the Samalkha factory (Haryana), in1993 and in 1995 and 1997, Nestlé commissioned two factories in Goa at Ponda andBicholim respectively. Nestlé India is now putting up the 7th factory at Pant Nagar inUttaranchalProducts BrandsProduct Category NESTLÉ EVERYDAY Dairy Whitener NESTLÉ EVERYDAY Ghee NESTLÉ Curds NESTLÉ CEREMEAL Milk Products NESTLÉ Jeera Raita NESTLÉ Fresh n Natural Dahi NESTLÉ Fruit N Dahi NESTLÉ Milk NESTLÉ Slim Milk NESCAFÉ CLASSIC NESCAFÉ SUNRISE Beverages NESTLÉ MILO NESCAFÉ 3 in 1 NESCAFÉ Koolerz - 12 -
    • Prepared Dishes MAGGI 2-MINUTE Noodles MAGGI Healthy Soups MAGGI Dal Atta Noodles MAGGI MAGIC Cubes Chocolates & NESTLÉ Milk Chocolate Confectionaries NESTLÉ KIT KAT NESTLÉ MUNCH NESTLÉ MILKYBAR NESTLÉ MILKYBAR CHOO NESTLÉ BAR-ONE POLO NESTLÉ Eclairs NESTLÉ ACTI-V POLO PowermintHindustan Lever Limited (HLL)The Global arm of Hindustan Levers Limited is Unilevers and its mission is to addVitality to life. Their products meet everyday needs for nutrition, hygiene, and personalcare with brands that help people feel good, look good and get more out of life.HLL has deep roots in local cultures and markets around the world which gives them astrong relationship with their consumers, which are the foundation for their futuregrowth. They benefit from there wealth of knowledge and international expertise to theservice the local consumers - a truly multi-local multinational.Brief HistoryIn the summer of 1888, visitors to the Kolkata harbour noticed crates full of Sunlightsoap bars, embossed with the words "Made in England by Lever Brothers". With it,began an era of marketing branded Fast Moving Consumer Goods (FMCG). In 1931,Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing Company, - 13 -
    • followed by Lever Brothers India Limited (1933) and United Traders Limited (1935).These three companies merged to form HLL in November 1956; HLL offered 10% of itsequity to the Indian public, being the first among the foreign subsidiaries to do so.Unilever now holds 51.55% equity in the company. The rest of the shareholding isdistributed among about 380,000 individual shareholders and financial institutions.Ponds (India) Limited had been present in India since 1947. It joined the Unilever foldthrough an international acquisition of Chesebrough Ponds USA in 1986.The liberalization of the Indian economy, started in 1991, clearly marked an inflexion inHLLs and the Groups growth curve. Removal of the regulatory framework allowed thecompany to explore every single product and opportunity segment, without anyconstraints on production capacity.Simultaneously, deregulation permitted alliances, acquisitions and mergers. In one ofthe most visible and talked about events of Indias corporate history, the erstwhile TataOil Mills Company (TOMCO) merged with HLL, effective from April 1, 1993. In 1995,HLL and yet another Tata company, Lakme Limited, formed a 50:50 joint venture,Lakme Lever Limited, to market Lakmes market-leading cosmetics and otherappropriate products of both the companies. Subsequently in 1998, Lakme Limited soldits brands to HLL and divested its 50% stake in the joint venture to the company.HLL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in 1994,which markets Huggies Diapers and Kotex Sanitary Pads. HLL has also set up asubsidiary in Nepal, Nepal Lever Limited (NLL), and its factory represents the largestmanufacturing investment in the Himalayan kingdom. The NLL factory manufacturesHLLs products like Soaps, Detergents and Personal Products both for the domesticmarket and exports to India.The 1990s also witnessed a string of crucial mergers, acquisitions and alliances on theFoods and Beverages front. In 1992, the erstwhile Brooke Bond acquired KothariGeneral Foods, with significant interests in Instant Coffee. In 1993, it acquired the - 14 -
    • Kissan business from the UB Group and the Dollops Icecream business from CadburyIndia.As a measure of backward integration, Tea Estates and Doom Dooma, two plantationcompanies of Unilever, were merged with Brooke Bond. Then in July 1993, BrookeBond India and Lipton India merged to form Brooke Bond Lipton India Limited (BBLIL),enabling greater focus and ensuring synergy in the traditional Beverages business.1994 witnessed BBLIL launching the Walls range of Frozen Desserts. By the end of theyear, the company entered into a strategic alliance with the Kwality Icecream Groupfamilies and in 1995 the Milkfood 100% Icecream marketing and distribution rights toowere acquired.In January 2000, in a historic step, the government decided to award 74 per cent equityin Modern Foods to HLL, thereby beginning the divestment of government equity inpublic sector undertakings (PSU) to private sector partners. HLLs entry into Bread is astrategic extension of the companys wheat business. In 2002, HLL acquired thegovernments remaining stake in Modern Foods.In 2003, HLL acquired the Cooked Shrimp and Pasteurised Crabmeat business of theAmalgam Group of Companies, a leader in value added Marine Products exports.Present StatureHindustan Lever Limited (HLL) is Indias largest Fast Moving Consumer Goodscompany, touching the lives of two out of three Indians with over 20 distinct categoriesin Home & Personal Care Products and Foods & Beverages. They endow the companywith a scale of combined volumes of about 4 million tonnes and sales of Rs.10,000crores. - 15 -
    • HLL is also one of the countrys largest exporters; it has been recognised as a GoldenSuper Star Trading House by the Government of India.HLLs brands - like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Ponds, Sunsilk,Clinic, Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, Knorr-Annapurna, KwalityWalls – are household names across the country and span many categories - soaps,detergents, personal products, tea, coffee, branded staples, ice cream and culinaryproducts. They are manufactured in close to 80 factories. The operations involve over2,000 suppliers and associates. HLLs distribution network, comprising about 7,000redistribution stockists, directly covers the entire urban population, and about 250million rural consumers.HLL believes that an organization‘s worth is also in the service it renders to thecommunity. HLL is focusing on health & hygiene education, women empowerment, andwater management. It is also involved in education and rehabilitation of special orunderprivileged children, care for the destitute and HIV-positive, and rural development.HLL has also responded in case of national calamities / adversities and contributesthrough various welfare measures, most recent being the village built by HLL inearthquake affected Gujarat, and relief & rehabilitation after the Tsunami causeddevastation in South India.Products BrandsProduct Category Product Name Lux Pears Lifebuoy Personal Care Soap Liril Hamam Breeze Dove - 16 -
    • Rexona Pond‘s Skin Care Fair & Lovely Sunsilk Hair Care: Naturals Clinic Pepsodent Oral Care CloseUp Axe Deodorant Rexona Color Cosmetics Lakme Ayurvedic Healthcare Aysh Fabric Care Laundry Surf Excel Rin Wheel Tea Brooke Bond Beverages Lipton Coffee Bru Salt Knnor Annapurna Foods Sauces Kissan Ice Creams Kwality WallsGLAXO SMITHKLINEGlaxoSmithKline is a leader in the worldwide consumer healthcare market. With nearly$5 billion in sales, over ten $100 million brands and present in 130 markets, theconsumer healthcare business brings an added dynamic dimension to GSK.Operating in the fiercely competitive environment of retail and consumer marketingGlaxoSmithKline Consumer Healthcare brings oral healthcare, over-the-countermedicines and nutritional healthcare products to millions of people. - 17 -
    • Brand names such as Panadol the analgesic, Aquafresh toothpaste, Lucozade thenutritional and Nicorette/ Niquitin smoking cessation products are household namesaround the world. In one year GSK Consumer Healthcare produces - among manyothers - nine billion tablets to relieve stomach upsets, six billion tablets for pain relieftablets and 600 million tubes of toothpaste.But the driving force behind GlaxoSmithKlines consumer healthcare business isscience. With four dedicated consumer healthcare R&D centres and consumerhealthcare regulatory affairs, the business takes scientific innovation as seriously asmarketing excellence and offers leading-edge capability in both.The CompanyThe company has a challenging and inspiring mission: to improve the quality of humanlife by enabling people to do more, feel better and live longer. This mission gives themthe purpose to develop innovative medicines and products that help millions of peoplearound the world. In fact, they are the only pharmaceutical company to tackle the WorldHealth Organization‘s three ‗priority‘ diseases – HIV/AIDS, tuberculosis and malaria.Headquartered in the UK and with operations based in the US, it is one of the industryleaders, with an estimated 7% of the worlds pharmaceutical market.As a company has a emphasized more on research & development, estimated everyhour they spend more than £300,000 (US$562,000) to find new medicines. Themedicines produced are mainly in six major disease areas – asthma, virus control,infections, mental health, diabetes and digestive conditions. In addition, it is a leader inthe important area of vaccines and are developing new treatments for cancer.GSK at a glance Mission is to improve the quality of human life by enabling people to do more, feel better and live longer Research-based pharmaceutical company - 18 -
    • It is the only pharmaceutical company to tackle the three "priority" diseases identified by the World Health Organization: HIV/AIDS, tuberculosis and malaria Its business employs over 100,000 people in 116 countries They make approximately four billion packs of medicines and healthcare products every year Over 15,000 people work in the research teams to discover new medicines We supply one quarter of the worlds vaccines and by the end of 2005 we had 25 vaccines in clinical development In 2005 we donated 136 million albendazole tablets to help elimitate lymphatic filariasis (elephantiasis) In 2005 we shipped 126 million tablets of preferentially-priced Combivir and Epivir (our HIV treatments) to developing countries Almost 100 countries benefitted from our humanitarian product donations in 2005 We sold 23 million bottle of Lucozade Sport Hydro Active in 2005History1976  The H2 blocker Tagamet (cimetidine) is introduced in the UK by the SmithKline Corporation, and in the US in the following year.  The treatment will revolutionise peptic ulcer therapy.1978  Through the acquisition of Meyer Laboratories Inc, Glaxo‘s business in the US is started, to become Glaxo Inc from 1980.  The broad-spectrum injectable antibiotic Zinacef (cefuroxime) is introduced by Glaxo.1981  The anti-ulcer treatment Zantac (ranitidine) is launched by Glaxo and is to become the world‘s top-selling medicine by 1986. Augmentin (amoxicillin / - 19 -
    • clavulanate potassium), to combat a wide range of bacterial infections in children and adults, is launched by Beecham.  The antiviral Zovirax (aciclovir) is launched by Wellcome for herpes infections1982  SmithKline acquires Allergan, an eye and skincare business, and merges with Beckman Instruments Inc, a company specialising in diagnostics and measurement instruments and supplies.  The company is renamed SmithKline Beckman. John Vane of the Wellcome Research Laboratories is awarded the Nobel Prize, with two other scientists, "for their discoveries concerning prostaglandins and related biologically active substances."1983  Glaxo Inc moves to new facilities in Research Triangle Park and Zebulon, North Carolina. The broad-spectrum injectable antibiotic Fortum (ceftazidime) is launched.  Wellcome launches Flolan (epoprostenol) for use in renal dialysis.1986  Beecham acquires the US firm Norcliff Thayer, adding Tums antacid tablets and Oxy skin care to its portfolio.1987  The AIDS treatment Retrovir (zidovudine) is launched by Wellcome. Glaxo introduces the oral antibiotic Zinnat (cefuroxime axetil).1988  SmithKline BioScience Laboratories acquires one of its largest competitors, International Clinical Laboratories, Inc, increasing the companys size by half and establishing SmithKline BioScience Laboratories as the industry leader. - 20 -
    •  The Nobel Prize for medicine is awarded to George Hitchings and Gertrude Elion, of Burroughs Wellcome Inc, and to Sir James Black, who had worked at the Wellcome Foundation and Smith Kline and French Laboratories, "for their discoveries of important principles for drug treatment."1989  SmithKline Beckman and The Beecham Group plc merge to form SmithKline Beecham plc. Engerix-B hepatitis B vaccine (recombinant), a genetically engineered hepatitis B vaccine, is launched in the US and France.1990  The synthetic lung surfactant Exosurf and the anti-epileptic drug Lamictal (lamotrigine) are launched by Wellcome.  Glaxo introduces long-acting Serevent (salmeterol) for asthma, the inhaled corticosteroid Flixotide (fluticasone propionate) and Zofran (ondansetron) anti- emetic for cancer patients.1991  Glaxo launches its novel treatment for migraine, Imigran (sumatriptan), Lacipil (lacidipine) for high blood pressure, and Cutivate (fluticasone propionate) in the US for skin diseases.  SmithKline Beecham moves its global headquarters to New Horizons Court at Brentford, England. SmithKline Beecham‘s Seroxat/Paxil (paroxetine hydrochloride) is launched in the UK, its first market.1992  Mepron (atovaquone) for AIDS-related pneumonia is introduced by Burroughs Wellcome in the US.  SmithKline Beecham‘s Havrix hepatitis A vaccine, inactivated, the world‘s first hepatitis A vaccine, is launched in six European markets. - 21 -
    • 1993  SmithKline Beecham and Human Genome Science negotiate a multi-million- dollar research collaboration agreement for identifying and describing the functions of the genes in the human body.  Glaxo introduces Flixotide (fluticasone propionate) for bronchial conditions.1994  SmithKline Beecham purchases Diversified Pharmaceutical Services, Inc, a pharmaceutical benefits manager.  Sterling Health also is acquired, making SmithKline Beecham the third-largest over-the-counter medicines company in the world and number one in Europe and the international markets.  With the intention of focusing on human healthcare, SmithKline Beecham sells its animal health business.1995  Glaxo and Wellcome merge to form Glaxo Wellcome.  Glaxo Wellcome acquires California-based Affymax, a leader in the field of combinatorial chemistry.  Glaxo Wellcome‘s Medicines Research Centre opened at Stevenage in England.  Valtrex (valaciclovir) is launched by Glaxo Wellcome as an anti-herpes successor to Zovirax (acyclovir).  SmithKline Beecham acquires Sterling Winthrops site in Upper Providence, Pennsylvania, to fulfil US R&D expansion needs.1996  Community Partnership is established by SmithKline Beecham to focus philanthropy on community-based healthcare.  SmithKline Beecham Healthcare Services is formed by combining the clinical laboratories, disease management and Diversified Pharmaceutical Services businesses. - 22 -
    • 1997  SmithKline Beecham‘s research centre, New Frontiers Science Park, opens at Harlow in England.  SmithKline Beecham and Incyte Pharmaceuticals create a joint venture - diaDexus - to discover and market novel molecular diagnostics based on the use of genomics.1998  SmithKline Beecham and the World Health Organization announce a collaboration to eliminate lymphatic filariasis (elephantiasis) by the year 2020.  The largest pharmaceutical company in Poland is created with the acquisition of Polfa Poznan by Glaxo Wellcome.1999  The 30th anniversary of the launch of Ventolin (albuterol) is marked as respiratory becomes Glaxo Wellcome‘s largest therapeutic area.  Sharpening its focus on pharmaceuticals and consumer healthcare, SmithKline Beecham divests SmithKline Beecham Clinical Laboratories and Diversified Pharmaceutical Services.GSK ProductsProduct name: AquafreshMajor Markets North and South America Europe East and South Africa Middle East Asia Australia and New Zealand - 23 -
    • Aquafresh is one of the worlds largest and fastest growing toothpaste and toothbrushbrands. The unique red, white and blue stripes of the toothpaste make the product notonly visually attractive, but also underline the triple benefits of strong teeth, healthygums and fresh breath – whole mouth protection. The Aquafresh range of manual andelectric toothbrushes not only clean teeth effectively, they are also gentle on gumsbecause of their flexible necks. Their flexible heads and brush tips have been designedfor cleaning even the hardest-to-reach parts of the mouth. The Aquafresh range alsoincludes whitening, sensitive, tartar control and childrens toothpaste, childrenstoothbrushes, dental lozenges and dental gum.Product name: ENOMajor Markets India Brazil South Africa and ThailandENO is the most global of GSKs gastrointestinal brands with sales of £29 million. Thefast-acting effervescent fruit salts, used as an antacid and reliever of bloatedness, wasinvented in the 1850s by James Crossley ENOProduct name: HorlicksMajor MarketsIndia and UKHorlicks, The Great Family Nourisher, is a nutritional drink made from wheat, milk andmalted barley and is sold in powdered form. The brand is such an enormous success inits key market, India, that alongside the traditional family formula, there is a specialformulation for children between one and three years of age and another for breast-feeding mothers. - 24 -
    • COLGATE PAMOLIVE INDIA LIMITED From a modest start in 1937, when hand-carts were used to distribute ColgateDental Cream, Colgate-Palmolive (India) today has one of the widest distributionnetworks in India – a logistical marvel that spans around 3.5 million retail outlets acrossthe country, of which the Company services 9.40,000 outlets directly. The Company hasgrown to a Rs. 9600 million plus with an outstanding record of enhancing value for itsstrong shareholder base.Colgates tight focus in Oral Care in India while building its Personal Care businesscoupled with a simple, but sound worldwide financial strategy, has helped deliverconsistent shareholder value. Colgate consistently increases gross margin while at thesame time reducing overhead expenses. The increase in gross margin and thereduction in overhead expenses provide the money to invest in advertising to supportthe launch of new products, while at the same time increasing operating profit.Today, Colgate is a household name in India with one out of two consumers using amodern dentifrice. Consistently superior quality, innovation and value for moneyproducts emerging out of advanced technology employed, has enabled Colgate to bevoted ‗The Most Trusted Brand‘ in India across all brands and categories for the thirdconsecutive year in the Brand Equity AC Nielson ORG-MARG 2005 survey. Colgatehas been the only brand to be ranked in the top three for all the five surveys and to holdthe premier position for three consecutive years. This is a true measure of the trust andconfidence that generations of consumers have placed in Colgate for their oral careneeds.History1975: - Caprice hair care launches in Mexico. Today, hair care products are sold in over70 countries, with variants to suit every type of hair need.1976: - Colgate-Palmolive acquires Hills Pet Nutrition. Today Hills is the global leaderin pet nutrition and veterinary recommendations. - 25 -
    • 1983:- Colgate Plus toothbrush is introduced. Today over 1.6 billion Colgate toothbrushes are sold annually worldwide. If you lined them up end to end, they would circlethe globe 16 times.1985:- Protex bar soap is introduced, and today offers all-family antibacterial protectionin over 56 countries. Colgate-Palmolive enters into a joint venture with Hong Kong-based Hawley & Hazel, a leading oral care company, which adds strength in key Asianmarkets.1986:- The Chairmans You Can Make A Difference Program is launched, recognizinginnovation and executional excellence by Colgate people.1987 :- Colgate acquires Softsoap liquid soap business from the MinnetonkaCorporation. Today, Colgate is the global leader in liquid hand soap.1989:- Annual Company sales surpass the $5 billion mark.1991:- Colgate acquires Murphy Oil Soap, the leading wood cleaner in the U.S. Today,its product portfolio has expanded to include all-purpose cleaners, sprays and wipes.1992:- Colgate acquires the Mennen Company. Today, Mennen products are sold inover 52 countries.1995:- Colgate enters Central Europe and Russia, expanding into fast-growing markets.Colgate acquires Kolynos Oral Care business in Latin America and launches market-leading Sorriso toothpaste.1996:- Bright Smiles, Bright Futures oral health education program expands to reach 50countries with in-school programs and mobile dental clinics. - 26 -
    • 1997:- Colgate Total toothpaste is introduced and quickly becomes the market leader inthe U.S. Only Colgate Total, with its 12-hour protection, fights a complete range of oralhealth problems.2004: - Colgate acquires the GABA oral care business in Europe, with its strength in theimportant European pharmacy channel and its ties with the dental community.2006:- Today, with sales surpassing $10 billion, Colgate focuses on four corebusinesses: Oral Care, Personal Care, Home Care and Pet Nutrition. Colgate now sellsits products in 222 countries and territories worldwide.ProductsOral Care: Colgate – Toothpaste, Tooth Powder, Whitening Products Pamolive - Shower Gel, Shower Cream, Bar Soap, Liquid Hand Wash, Shave Preps, Skin CareHousehold Care: Axion Surface CleanBRITANIAThe story of one of Indias favorite brands reads almost like a fairy tale. Once upon atime, in 1892 to be precise, a biscuit company was started in a nondescript house inCalcutta (now Kolkata) with an initial investment of Rs. 295. The company we all knowas Britannia today.The beginnings might have been humble-the dreams were anything but. By 1910, withthe advent of electricity, Britannia mechanized its operations, and in 1921, it became thefirst company east of the Suez Canal to use imported gas ovens. Britannias business - 27 -
    • was flourishing. But, more importantly, Britannia was acquiring a reputation for qualityand value. As a result, during the tragic World War II, the Government reposed its trustin Britannia by contracting it to supply large quantities of "service biscuits" to the armedforces.As time moved on, the biscuit market continued to grow and Britannia grew along with it.In 1975, the Britannia Biscuit Company took over the distribution of biscuits from Parryswho till now distributed Britannia biscuits in India. In the subsequent public issue of1978, Indian shareholding crossed 60%, firmly establishing the Indianness of the firm.The following year, Britannia Biscuit Company was re-christened Britannia IndustriesLimited (BIL). Four years later in 1983, it crossed the Rs. 100 crores revenue mark.On the operations front, the company was making equally dynamic strides. In 1992, itcelebrated its Platinum Jubilee. The Wadia Group acquired a stake in the company andbecame an equal partner with Groupe Danone in Britannia. The subsequent year sawsales cross landmark 100,000 tones of biscuits or 1 billion packs of 100g.Britannia strode into the 21st Century as one of Indias biggest brands and the pre-eminent food brand of the country. It was equally recognized for its innovative approachto products and marketing: the Lagaan Match was voted Indias most successfulpromotional activity of the year 2001 while the delicious Britannia 50-50 Maska-Chaskabecame Indias most successful product launch. In 2002, Britannias New BusinessDivision formed a joint venture with Fonterra, the worlds second largest Dairy Company,and Britannia New Zealand Foods Pvt. Ltd. was born. In recognition of its vision andaccelerating graph, Forbes Global rated Britannia One amongst the Top 200 SmallCompanies of the World, and The Economic Times pegged Britannia Indias 2nd MostTrusted Brand.Today, more than a century after those tentative first steps, Britannias fairy tale is notonly going strong but blazing new standards, and that miniscule initial investment hasgrown by leaps and bounds to crores of rupees in wealth for Britannias shareholders. - 28 -
    • The companys offerings are spread across the spectrum with products ranging from thehealthy and economical Tiger biscuits to the more lifestyle-oriented Milkman Cheese.Having succeeded in garnering the trust of almost one-third of Indias one billionpopulations and a strong management at the helm means Britannia will continue todream big on its path of innovation and quality. And millions of consumers will savourthe results, happily ever after.1975:- Britannia Biscuit Company takes over biscuit distribution from Parrys1979: - Re-christened Britannia Industries Ltd. (BIL).1989:- The Executive Office relocated to Bangalore1992:- BIL celebrates its Platinum Jubilee1993:- Wadia Group acquires stake in ABIL, UK and becomes an equal partner withGroupe Danone in BIL1997:- Re-birth - new corporate identity Eat Healthy, Think Better leads to new mission:Make every third Indian a Britannia consumer1999:- "Britannia Khao World Cup Jao" - a major success! Profit up by 37%2000:- Forbes Global Ranking - Britannia among Top 300 small companies2001:- BIL ranked one of Indias biggest brandsNo.1 food brand of the countryBritannia Lagaan Match: Indias most successful promotional activity of the yearMaska Chaska: Indias most successful FMCG launch - 29 -
    • 2002:- BIL launches joint venture with Fonterra, the worlds second largest dairycompanyBritannia New Zealand Foods Pvt. Ltd. is bornRated as One amongst the Top 200 Small Companies of the World by Forbes GlobalEconomic Times ranks BIL Indias 2nd Most Trusted BrandPure Magic -Winner of the Worldstar, Asiastar and Indiastar award for packaging2003:- Treat Duet- most successful launch of the yearBritannia Khao World Cup Jao rocks the consumer lives yet again2005:- Re-birth of Tiger - Swasth Khao, Tiger Ban Jao becomes the popular chant!Britannia launched Greetings range of premium assorted gift packsThe new plant in Uttaranchal, commissioned ahead of schedule.The launch of yet another exciting snacking option - Britannia 50-50 Pepper ChakkarPRODUCTS Britannia Treat proffers a wide variety of flavours, such as the classic favourites Bourbon & Elaichi, the Fruit Flavoured Creams such as Orange, Pineapple, Mango, and Strawberry, the Jam Filled Centres under the Jim Jam range, and the Duet Range Tiger, launched in 1997, became the largest brand in Britannias portfolio in the very first year of its launch and continues to be so till today. Tiger has grown from strength to strength and the re-invigoration. Britannia Good Day was launched in 1986 in two delectable avatars - Good Day Cashew and Butter. Over the years, new variants were introduced - Good Day - 30 -
    • Pista Badam in 1989, Good Day Chocochips in 2000 and Good Day Choconut in 2004. Britannia 50-50 is the leader in its category with more than one-third of market share. The versatile and youthful brand constantly aims to provide a novel and exciting taste experience to the consumer. Britannias oldest brand enjoys a heritage that spans the last 50 years - and going strong., Britannia Marie Gold has maintained its stronghold. It is the #1 brand in its category by a long shot In 1996, Milk Bikis launched a variant called Milk Cream. These round biscuits come with smiley faces and are full of milk cream that makes them very popular with children. To offer something to consumers who cherish healthy living, Britannia introduced Nutri-Choice biscuits. In 1998, Nutri-Choice Thin Arrowroot was morphed from Jacobs Thin Arrowroot (a popular brand in East India). Before Timepass, Britannias offering in the salted cracker category was Snax. Launched in 1999, Snax was promoted as a tastier base for toppings through edgy advertising. Little Hearts was launched in 1993 and targeted the growing youth segment. A completely unique product, it was the first time biscuits were retailed in pouch packs like potato wafers. Britannia Nice Time was the pioneer of sugar sprinkled biscuits in India. This unique product managed to create such a strong consumer pull that soon there was a rush of pretender products in the market, clearly indicative of the success of the concept.Till 1958, there were no breads in the organised sector and bread consumption was ahabit typified by the British. Then, a mechanised bread unit was set up in Delhi with thename "Delbis" which produced sliced bread and packed it under the Britannia name.Thus, Britannia was not only the pioneer, but also inculcated in the people of Delhi thehabit of eating white sliced bread. The Mumbai unit came up in 1963, and there againBritannia was the first branded bread in the city - 31 -
    • DABUR INDIADabur India Limited is a leading Indian consumer goods company with interests inhealth care, Personal care and foods. Over more than 100 years we have beendedicated to providing nature-based solutions for a healthy and holistic lifestyle.Through our comprehensive range of products we touch the lives of all consumers, in allage groups, across all social boundaries. And this legacy has helped us develop a bondof trust with usHistory 1979 Sahibabad factory / Dabur Research Foundation 1986 Public Limited Company 1992 Joint venture with Agrolimen of Spain 1993 Cancer treatment 1994 Public issues 1995 Joint Ventures 1996 3 separate divisions 1997 Foods Division / Project STARS 1998 Professionals to manage the Company 2000 Turnover of Rs.1,000 crores 2003 Dabur demerges Pharma Business 2005 Dabur aquires Balsara 2006 Dabur announces Bonus after 12 years 2006 Dabur crosses $2 Bin market Cap, adopts US GAAPGODFREY PHILLIPSGodfrey Phillips is a company driven by passion - the passion to excel, innovate andwin, a passion to be the leader, to emerge as the most respected company in thetobacco industry, not just in India but all over the world.Godfrey Phillips is today the second largest player in the Indian cigarette industry withan annual turnover of over US$ 265 million. - 32 -
    • Incorporated in India in 1936, the Company established its own manufacturing facilitiesin 1944. Today, the operations span the entire northern and western part of the country,with two manufacturing facilities located in Ghaziabad (near Delhi) and in Andheri(Mumbai), a state of the art R&D centre in Mumbai and a tobacco-buying unit in Guntur(Andhra Pradesh). Headquartered in Delhi, the Company has its sales offices acrossthe country at Ahmedabad, Mumbai, Delhi, Chandigarh and Hyderabad.The Company today is the proud owner of some of the most popular cigarette brands inthe country like Red and White, Four Square, Jaisalmer, Cavanders, Tipper and Prince.Its products are distributed through an extensive India wide network comprising 484exclusive distributors and over 800,000 retail outlets.Over the years, Godfrey Phillips has emerged as a professionally managed, highlyefficient corporate entity. Today, the Company has one of the highest productivity ratesof workers in the entire country and an enviable organisational structure. Over the yearsthe Company has also become an active player in overseas markets, with significantexport volumes.Godfrey Phillips has two major stakeholders, one of Indias leading industrial houses -the K.K. Modi Group and one of the Worlds largest tobacco companies, Philip Morris.Godfrey Phillips has the strong backing of over 15,000 shareholders in the Country andis today, through the sheer determination & passion of every employee of theorganization, growing from strength to strength.From its modest beginning in London way back in 1844, Godfrey Phillips, a major playerin the Indian tobacco industry, has come a long way.The history of the Company reflects the strong determination and passion amongst thefounders & the employees of the Company to establish itself as a leader of the tobaccoindustry in the Country.Mr. Godfrey Phillips, founder of Godfrey Phillips & Sons commenced business in theBarbican (London), as a Cigar manufacturer in 1844. From the Barbican he moved to - 33 -
    • Primrose Street and after that to Commercial Street London. B.D.V, the packet tobaccowith which the name of Godfrey Phillips was intricately connected, is practicallycontemporary with Mr. Phillips embarkation in tobacco cutting in the year 1887.At that time packet tobaccos were in their infancy. After B.D.V. came "Marigold" andGuinea Gold. Mr. Phillips, a splendid judge of tobacco himself, looked for appreciationof quality in his customers and stuck to his belief that quality will ultimately determinesuccess, something that is still the strongest belief in the Company. Messrs GodfreyPhillips, D.H. Wilmer and H.C. Water incorporated GODFREY PHILLIPS INDIA as aPrivate Ltd. Co. on 3rd December 1936. The Company imported cigarettes fromGodfrey Phillips Ltd. U.K.In the year 1942, plans for setting up a manufacturing facility in Calcutta were made,however it got shelved due to World War II. In 1944, after the war, GODFREYPHILLIPS bought Master Tobacco Co., Chakala, Andheri (Mumbai) thereby establishingits first factory in the Country. In October 1946, GODFREY PHILLIPS became a PublicLtd. Co. with its manufacturing operations in Mumbai.GODFREY PHILLIPS was then primarily a manufacturing company and made cigarettebrands like Cavanders, Abdulla No. 7, DERESKE, Marcovich, Red & White. In 1951/52Godfrey Phillips UK bought out George Dobie & Sons, famous Four Square brand.In 1967, D. Macropolo & Co., which was the sole selling agent for GODFREY PHILLIPS,opened a subsidiary company called "International Tobacco Co.", with its manufacturingfacility in Ghaziabad (near Delhi) to manufacture cigarettes for GODFREY PHILLIPS.In 1967-68, Philip Morris acquired substantial holding in Godfrey Phillips Ltd., U.K. andGodfrey Phillips Investment Corporation which was holding substantial shares ofGodfrey Phillips India Ltd. It also acquired a large share holding interest in GeorgeDobie & Sons. Thus in 1968, Godfrey Phillips Ltd., U.K., George Dobie & Sons, andGODFREY PHILLIPS became affiliates of Philip Morris - 34 -
    • Philip Morris is a large professionally managed multinational with diversified businessinterests. It has a wide range of tobacco and other products, with "Marlboro" being itsleading brand in the world. It took major initiatives in 1968 for GODFREY PHILLIPS tore-organise its operations. A major thrust was given to marketing & sales and it wasdecided to merge D. Marcopolo & Co. with Godfrey Phillips, a process, which began in1969. The merger was finally completed on 31st December 1975, bringing the foursales branches and "International Tobacco Co." under its fold.In 1973 GODFREY PHILLIPS, successfully launched Four Square Kings, India s firstKing Size filter cigarette. It was the sheer passion to be close to the consumer thathelped the Company recognize the demands of the emerging consumer long beforeanyone in the cigarette industry.In 1979, Philip Morris. joined hands with the K.K. Modi Group and in the followingyear the Modi Enterprises took over the management of GODFREY PHILLIPS with asubstantial financial stake. Modi enterprise was new to the cigarette business, but anarea in which they saw a huge potential for growth. They took on this new challengewith a lot of passion, vigour and confidence.The business was given a fresh look in all its areas of operation. Professional managerswere inducted to head the various functions to bring about change and vigor in theorganization to meet the challenges of the eighties. The existing brand franchises wererejuvenated, each brand was modernized with the prime objective of growing theirbrand equity. Modernization of the factories was initiated; product development andresearch activities were stepped up. Aggressive marketing and sales strategies weredrawn up and implemented and each employee was empowered to bring about thedesired change. Everything was restarted with renewed passion and determination.Godfrey Phillips is best known by the brands it manufactures and today the Company isthe proud owner of some of the best FMCG brands of the country. At least 3 of ourcigarette brands today feature in the top 50 FMCG list. They are: Four Square Special,Red & White and Cavanders. - 35 -
    • Apart from these champions, the Company also has other cigarette brands that cater toa large and varied range of consumer segments.The year 2002 also saw the Company re-launch some of its brands, by giving them anentirely new look & positioning, while some new, innovative products were alsointroduced. These brands are already making their presence felt in the industry. Theyare: Jaisalmer (re-launched in 2003), Tipper & Piper (new innovative productsintroduced in 2002) and Prince (another re-launch for the year 2002).Prepared with utmost dedication and passion, to deliver the customer with the mostsatisfying smoke, each cigarette going out into the market bears the Godfrey Phillipsstamp of quality and assurance.Cigarette Four Square Jaisalmer Red & White Cavanders Tipper North Pole PrinceCigars - Brands Don Diego Hav-a-tampa Phillies Santa Damiana H-2000 Rothschild - 36 -
    • GODREJThe foods division of Godrej Industries produces and markets edible oils, vanaspati,fruit drinks, fruit nectar and bakery fats.The division has two state-of-the-art manufacturing facilities: at Wadala in Mumbai, thecapital of the western Indian state of Maharashtra; and at Mandideep near Bhopal in thenorthern Indian state of Madhya Pradesh. It has a national distribution networkconsisting of 800 distributors and 24 consignment agents.The plants are equipped withthe best of modern equipment for the processing and packaging of a wide variety offood products. These include:The Jumpin range of fruit drinks, which come in flavors such as mango, apple,pineapple and orange. The Xs range of fruit nectar (mango, litchi, and sweet orangeand pineapple flavors). Tomato Puree (under the Godrej brand). Fruit pulps and juicesin bulk aseptic packaging. Health and dietetic foods. Refined edible oils of low color indifferent varieties of groundnut, sunflower and soyabean. Processed hydrogenated fatsfor edible purposes such as vanaspati and bakery shortenings.Godrej Industries, in keeping with the philosophy of the Godrej Group, believes thatquality is the product of a combination of man and machine. The foods division haspeople of outstanding caliber to go with the modern technologies it uses. The result: theability to deliver outstanding products.Soymilk is the rich creamy milk of whole soybeans. With its unique nutty flavor and richnutrition, soymilk can be used in a variety of ways.Plain, unfortified soymilk is an excellent source of high-quality protein, B-vitamins andiron. Some brands of soymilk are fortified with vitamins and minerals and are goodsources of calcium, vitamin D and vitamin B-12.Soymilk is free of the milk sugar lactose and is a good choice for people who arelactose intolerant. Also, it is a good alternative for those who are allergic to cows milk.Children can enjoy homemade or commercially prepared soymilk after the age of 1year. Infants under 1 year of age should be fed breast milk, commercially preparedinfant formula or commercial soymilk infant formula. - 37 -
    • Soymilk is available as a plain, unflavored beverage or in a variety of flavors includingapple, mango, malt and plain. Soymilk can be used in almost any way that cows milk isused.Godrej Industries Limited is Indias leading manufacturer of oleochemicals and makesmore than a hundred chemicals for use in over two dozen industries. It alsomanufactures edible oils, vanaspati and bakery fats. Besides, it operates businesses inmedical diagnostics and real estate.GIL is a member of the Godrej Group, which was established in 1897 and has sincegrown into a Rs 6,000 crore conglomerate. The company was called Godrej SoapsLimited until March 31, 2001. Thereafter, the consumer products division got de-mergedinto Godrej Consumer Products Limited, and the residual Godrej Soaps became GodrejIndustries Limited. This led to the formation of two separate corporate entities: GodrejConsumer Products and Godrej Industries.Besides its three businesses, Godrej Industries also runs four divisions — CorporateFinance, Corporate HR, Corporate Audit and Assurance and Research andDevelopment — which operate on behalf of the entire Godrej Group.GIL has built a strong manufacturing base capable of delivering international qualityproducts at competitive prices. It operates two plants, one at Valia in the Indian state ofGujarat and a second at Vikhroli in suburban Mumbai. The companys products areexported to 40 countries in North and South America, Asia, Europe, Australia and Africa,and it leads the Indian market in the production of fatty acids, fatty alcohols and AOSNIRMANirma is one of the few names - which are instantly recognized as a true Indian brand,which took on mighty multinationals and rewrote the marketing rules to win the heart ofprincess, i.e. the consumer.Nirma, the proverbial ‗Rags to Riches‘ saga of Dr. Karsanbhai Patel, is a classicexample of the success of Indian entrepreneurship in the face of stiff competition.Starting as a one-man operation in 1969, today, it has about 14, 000 employee-baseand annual turnover is above Rs. 25, 00 crores. - 38 -
    • India is a one of the largest consumer economy, with burgeoning middle class pie. Insuch a widespread, diverse marketplace, Nirma aptly concentrated all its efforts towardscreating and building a strong consumer preference towards its ‗value-for-money‘products.It was way back in ‗60s and ‗70s, where the domestic detergent market had onlypremium segment, with very few players and was dominated by MNCs. It was 1969,when Karsanbhai Patel started door-to-door selling of his detergent powder, pricedat an astonishing Rs. 3 per kg, when the available cheapest brand in the market wasRs. 13 per kg. It was really an innovative, quality product – with indigenous process,packaging and low-profiled marketing, which changed the habit of Indian housewives‘for washing their clothes. In a short span, Nirma created an entirely new marketsegment in domestic marketplace, which is, eventually the largest consumer pocketand quickly emerged as dominating market player – a position it has never sincerelinquished. Rewriting the marketing rules, Nirma became a one of the widelydiscussed success stories between the four-walls of the B-school classrooms acrossthe world.The performance of Nirma during the decade of 1980s has been labeled as ‗MarketingMiracle‘ of an era. During this period, the brand surged well ahead its nearest rival –Surf, which was well-established detergent product by Hindustan Lever. It was asevering battering for MNC as it recorded a sharp drop in its market share. Nirmaliterally captured the market share by offering value-based marketing mix of four P‘s, i.e.a perfect match of product, price, place and promotion.Now, the year 2004 sees Nirma‘s annual sales touch 800,000 tones, making it one ofthe largest volume sales with a single brand name in the world. Looking at the FMCGsynergies, Nirma stepped into toilet soaps relatively late in 1990 but this did not deter itto achieve a volume of 100,000 per annum. This makes Nirma the largest detergent andthe second largest toilet soap brand in India with market share of 38% and 20%respectively. - 39 -
    • It has been persistent effort of Nirma to make consumer products available to masses atan affordable price. Hence, it takes utmost care to provide finest products at the mostaffordable prices. To leverage this effort, Nirma has gone for massive backwardintegration along with expansion and modernization of the manufacturing facilities.The focal objective behind modernization plan is of up gradation with resource-savvytechnology to optimize capabilities. Nirma‘s six production facilities, located at differentplaces, are well equipped with state-of-art technologies. To ensure regular supply ofmajor raw materials, Nirma had opted for backward integration strategies. Thesestrategic moves allowed Nirma to manage effective and efficient supply-chain.Nirma has always been practiced ‗value-for-money‘ plank. Nirma plans to extend thesame philosophy in categories as commodity food products, personal care products andpackaged food. Distinct market vision and robust infrastructure allowed Nirma to havecost leadership. Apart from this, lean distribution network, umbrella branding and lowprofile media promotions allowed it to offer quality products, at affordable prices.In present scenario, an inspiring 59-year-old persona, Dr. Karsanbhai K. Patel, leadsNirma, playing role of key strategic decision-maker, whereas his next generation hasalready skilled management capabilities. Shri Rakesh K Patel – a qualified managementgraduate, is spearheading the procurement, production and logistic functions, whereasShri Hiren K Patel – a qualified Chemical engineer and management graduate, headsthe marketing and finance functions of the organization. Shri Kalpesh Patel, ExecutiveDirector, leads the professional organizational structure.Products Nirma Bath Soap Nirma Beauty Soap Nirma Lime Fresh Soap Nima Rose Nima Sandal Nirma Washing Powder - 40 -
    • Nirma Detergent Cake Super Nirma Washing Powder Super Nirma Detergent Cake Nirma Popular Detergent Powder Nirma Popular Detergent Cake Nirma Shudh Iodized Salt Nirma Clean Dish Wash Bar Nima Bartan BarITCITC is one of Indias foremost private sector companies with a market capitalization ofover US $ 13 billion and a turnover of US $ 3.5 billion. Rated among the Worlds BestBig Companies by Forbes magazine and among Indias Most Respected Companies byBusiness World, ITC ranks third in pre-tax profit among Indias private sectorcorporations.ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers,Packaging, Agri-Business, Packaged Foods & Confectionery, Information Technology,Branded Apparel, Greeting Cards, Safety Matches and other FMCG products. WhileITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels,Paperboards, Packaging and Agri-Exports, it is rapidly gaining market share even in itsnascent businesses of Packaged Foods & Confectionery, Branded Apparel andGreeting Cards.As one of Indias most valuable and respected corporations, ITC is widely perceived tobe dedicatedly nation-oriented. Chairman Y C Deveshwar calls this source of inspiration"a commitment beyond the market". In his own words: "ITC believes that its aspiration tocreate enduring value for the nation provides the motive force to sustain growingshareholder value. ITC practices this philosophy by not only driving each of itsbusinesses towards international competitiveness but by also consciously contributingto enhancing the competitiveness of the larger value chain of which it is a part." - 41 -
    • ITCs diversified status originates from its corporate strategy aimed at creating multipledrivers of growth anchored on its time-tested core competencies: unmatcheddistribution reach, superior brand-building capabilities, effective supply chainmanagement and acknowledged service skills in hoteliering. Over time, the strategicforays into new businesses are expected to garner a significant share of these emerginghigh-growth markets in India.Products CigarettesITC is the market leader in cigarettes in India. With its wide range of invaluable brands,it has a leadership position in every segment of the market. Its highly popular portfolio ofbrands includes Wills, Insignia, India Kings, Gold Flake, Navy Cut, Scissors, Capstan, Berkeley, Bristol andFlake. FoodsITC made its entry into the branded & packaged Foods business in August 2001 withthe launch of the Kitchens of India brand. A more broad-based entry has been madesince June 2002 with brand launches in the Confectionery, Staples and Snack Foodssegments.The packaged foods business is an ideal avenue to leverage ITCs proven strengths inthe areas of hospitality and branded cuisine, contemporary packaging and sourcing ofagricultural commodities. ITCs world famous restaurants like the Bukhara and the DumPukht, nurtured by the Companys Hotels business, demonstrate that ITC has a deepunderstanding of the Indian palate and the expertise required to translate thisknowledge into delightful dining experiences for the consumer.The Foods business is today represented in 4 categories in the market. These are: Ready To Eat Foods Staples Confectionery Snack Foods Lifestyle Retailing - 42 -
    • Over the last six years, ITCs Lifestyle Retailing Business Division has established anationwide retailing presence through its Wills Lifestyle chain of exclusive specialtystores. Beginning with its initial offering of Wills Sport relaxed wear from the first store atSouth Extension, New Delhi in July 2000, it has expanded its basket of offerings to thepremium consumer with Wills Classic work wear, Wills Clublife evening wear and atempting range of designer accessories that complete the Look. Greeting, Gifting & StationeryITCs stationery brands Paper Kraft & Classmate are the most widely distributed brandsacross India. ITCs Greeting & Gifting products include Expressions greeting cards andgifting products like autograph books, slam books, party invitations, pop up & minibooks. The business also markets Expressions Regalia, a collection of premium greetingcards & social cause cards & desk calendars in association with SOS Childrens Villages ofIndia. Expressions greetings & gifting products are available in multi brand retail outletsacross India. - 43 -
    • IntroductionFMCG Concept and Definition:The term FMCG (fast moving consumer goods), although popular and frequently useddoes not have a standard definition and is generally used in India to refer to products ofeveryday use. Conceptually, however, the term refers to relatively fast moving itemsthat are used directly by the consumer. Thus, a significant gap exists between thegeneral use and the conceptual meaning of the term FMCG. Further, difficulties crop up when attempts to devise a definition for FMCG. Theproblem arises because the concept has a retail orientation and distinguishes betweenconsumer products on the basis of how quickly they move at the retailer‘s shelves. Themoot question therefore, is what industry turnaround threshold should be for the item toqualify as an FMCG. Should the turnaround 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 populationsegments. Many low-income households are forced to buy certain products morefrequently because of lack of liquidity and storage space while relatively high-incomehouseholds buy the same products more infrequently. Similarly, the purchase cycle alsotends to vary because of cultural factors. Most Indians, typically, prefer fresh foodarticles and therefore to buy relatively small quantities more frequently. This is in sharpcontrast with what happens in most western countries, where the practice of buying andsocking foods for relatively longer period is more prevalent. Thus, should the inventoryturnaround threshold be universal, or should it allow for income, cultural and behavioralnuances? - 44 -
    • Characteristics of FMCG Products: Individual items are of small value. But all FMCG products put together account for a significant part of the consumers 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 (in contrast to industrial goods). Brand 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 neighbors/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. - 45 -
    • Introduction to the topicIntroduction: The importance of consumer sales promotion in the marketing mix of the fastmoving consumer goods (FMCG) category throughout the world has increased.Companies spend considerable time in planning such activities. However, in order toenhance the effectiveness of these activities, manufacturers should understandconsumer and retailer interpretations of their promotional activities. The study herepertains to consumer‘s perceptions regarding sales promotion. Some past researcheshave suggested that promotion itself has an effect on the perceived value of the brand.This is because promotions provide utilitarian benefits such as monetary savings, addedvalue, increased quality and convenience as well as hedonic benefits such asentertainment, exploration and self-expression.Broadly speaking most of the companies using Marketing Mix which includes… Price Place (Channel of Distribution) Product Promotion These are the four basic pillar of marketing mix. Most of the marketing strategiesare built on the basis of these criteria. Promotion is one of the important elements of marketing mix. There are so manyelements of promotion such as …Advertising Direct Marketing Public Relations Sales Promotion - 46 -
    • Traditionally, sales Promotions have been used by marketer to increase sales inthe short term. However, in the last few decades this communication tool has evolvedand now is considered from a strategic point of view. For this reason, it is necessary torealize new studies in this area and study how consumers evaluate sales promotions. Sales promotions have grown in both importance and frequency over the pastfew decades. Although an accurate estimate for total sales promotions expendituresdoes not exist, we can be sure that the trend is up. Sales promotion serves three essential roles: It informs, persuades and remindsprospective customers about a company and its products. Even the most useful productor brand will be a failure if no one knows that it is available. As we know, channels ofdistribution take more time in creating awareness because a product has to passthrough many hands between a producer and consumers. Therefore, a producer has to inform channel members as well as ultimateconsumers about the attributes and availability of his products. The second purpose ofpromotion is persuasion. The cut throat competition among different products putstremendous pressure on their manufacturers and they are compelled to undertake salespromotion activities. The third purpose of promotion is reminding consumers aboutproducts availability and its potential to satisfy their needs. From these elements Sales Promotion is the element which is in the focus of thisproject. Further Sales Promotion is quite broad term it includes … Consumer Oriented Sales Promotion Trade Oriented Sales Promotion - 47 -
    • Consumer Oriented Sales Promotion Consumer Oriented Sales Promotion is the main topic of this project. Hereemphasize is given to motivate consumer to increase sales. Consumer Oriented SalesPromotion includes Sampling, Couponing, Premiums, Contest, Refunds, Rebates,Bonus Pack‘s, Price-off, Event marketing etc.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 ofincentive tools, mostly short-term designed to stimulate quicker and/or greater purchaseof particular products/services by consumers or the trade.‖Roger Strang has given a more simplistic definition i.e. ―sales promotions are short-termincentives to encourage purchase or sales of a product or service.‖Hence, any forms of incentives (price cut or value added nature) offered for short periodeither to trade or consumers are considered as sales promotion activities.Marketer’s uses consumer oriented sales promotion tools for the followingreasons: To increase short term sales To induce trial To reduce inventory To establish a brand name To make cross selling To cope up with competition To avoid advertising clutter - 48 -
    • Tools of Consumer Oriented Sales Promotion:There are so many tools or technique available to the marketers for achieving objectiveof sales promotion. These tools should be used considering all other factors affectingsuch as cost, time, competitors, availability of goods etc. These tools are as under… 1. Coupons 2. Price-Off 3. Freebies 4. Scratch Cards 5. Lucky Draws 6. Bundling Offer 7. Extra QuantityLet‘s have look at each tool… 1. Coupons: Coupon is the oldest and most widely used way of sales promotion. Couponshave been used since 1895. It is mostly used by packaged goods. It is worthwhile touse coupon as a promotion tool because data shows that market for packaged goodsincreased from 16 billion in 1968 to 310 billion in 1994. To boost up the sales not onlymanufacturer but retailers personally can also used. A coupon leads to price reductionsso as to encourage price sensitive customers. Non users can try a product which mayleads to regular sales. 2. Price-off: A price-off is simply a reduction in the price of the product to increase sales andis very often used when introduction a new product. A reduction in price alwaysincreases sales but the use of this technique should be carefully considered in thecurrent market situation. - 49 -
    • Price-off is the most preferred sales promotion technique because consumers responsevery positively to this scheme. Not only that but it also cause large increase in salesvolume. Price-off reductions are typically offered tight on the package through speciallymarked price packs. E.g. Krack Jack offers 30% Price-off. 3. FreebiesFreebies are a popular form of modern marketing and are some of the best things aboutthe internet. The definition of freebies is products or services given away for free at nocost to the consumer. Well that‘s the definition we came up with. I am a bargain freebieshopper, pretty much going for any free product and informing everyone about it.At different times, big and small companies often give away prizes and money which istoo good to be true. Often it‘s in the pursuit of more customers or a larger fan base andit often works. 4. Scratch CardsA scratch card (also called a scratch off, scratch ticket, scratcher, scratchie, scratch-it,scratch game, scratch-and-win or instant game) is a small token, usually made ofcardboard, where one or more areas contain concealed information: they are coveredby a substance that cannot be seen through, but can be scratched off. 5. Bundling OffersProduct bundling is a marketing strategy that involves offering several products for saleas one combined product. This strategy is very common in the software business (forexample: bundle a word processor, a spreadsheet, and a database into a single officesuite), in the cable television industry (for example, basic cable in the United Statesgenerally offers many channels at one price), and in the fast food industry in whichmultiple items are combined into a complete meal. A bundle of products is sometimesreferred to as a package deal or a compilation or an anthology. - 50 -
    • Factors Influencing Consumer Oriented sales promotion: Mainly four factors should be taken into account while determining the salespromotion program. > Target market > Nature of product > Stage of product life cycle > Budget available for promotion1. Target Market:While doing sales promotion, marketer must know who their target market is; otherwisethere is no use of all effort because it leads to no where. A target market can be in anyof the stages of buying hierarchy i.e. awareness, knowledge, liking, preferences,conviction and purchase. Each stage defines a possible goal of promotion.2. Nature of the product:There are various product attributes which influence sales promotional strategy. Whenthe unit price is low the manufacturer as well as the customer has low risk but he canget the benefit of mass marketing. Therefore, mass marketing requires mass salespromotion schemes. Sales promotion scheme differ for products like its durability,perishable goods etc.3. Stage of product Life Cycle:Sales promotion strategies are influenced by the life cycle of a product. When a newproduct introduced, prospective buyers must be informed about its existence and itsbenefits and middlemen must be convinced to stock it. Later, if a product becomessuccessful, competition intensifies and more emphasis is placed on sales promotion toincrease its sales. - 51 -
    • 4. Budget Available for Promotion:The funds available for promotion are the ultimate determinant of the promotionalprogramme. A business with ample funds can make more effective use of salespromotion programme than a firm with limited financial resources. The budget for salespromotion can be prepared by the following methods… Percentage of Sales Fixed funds available for sales promotion Following the competition, and Budgeting by objective. - 52 -
    • Sales Promotion from the Consumers point of viewWillingness to buy on sales promotion offer Sixty per cent of the sample did not show willingness to buy a brand due topromotion while 30% showed willingness and 10% were not sure. This indicates thatwhen 30% showed willingness and 10% consumers who were not sure, these groupsmight be lured through innovative and lucrative sales promotion offer.Ability to induce trial Forty per cent of the respondents had said that sales promotion had the ability toinduce 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 ofpromotion. Eighty per cent of the respondents indicated that they would not continue.But 20% said they would. Thus, it could be inferred that promotions in this category (lowinvolvement products) might encourage trial and brand switching but not long termloyalty.Preference of Schemes: Price off was the most preferred type of scheme. Maximum customers‘ rankedprice-offs as number one or two.Perceived Quality: Majority of respondents had a perception that the quality of the promoted brandsremained the same during promotion, while some of them felt that it was inferior than - 53 -
    • before. It can be inferred that promotions were not leading to negative brand qualityperceptions. It is found that some customer strongly preferred to buy their regular brandand 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 salespromotion, ―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 consumersbelieved that companies were undertaking such activities only for their own benefit andnot for the benefit of consumers. Findings from retailer and consumer perception studies, it is evident that therewas a matching of perceptions regarding nature of scheme (price offs as most preferredtype of scheme mentioned by consumers and retailers‘ perceptions about consumerpreferences). Since retailers observe consumers in store behavior were frequently anddirectly, their perceptions regarding providing consumer behavior are likely to beaccurate. Such inputs from the retailers would be useful to companies.The retailers had the perception that those schemes which were announced throughmass media had better response. This was reinforced by the consumer survey whichshowed that recall in case of heavily promoted schemes on TV was found to be veryhigh.Retailers‘ prediction of companies‘ motivation for offering sales promotion werematching with the consumer perception regarding the same. Thus both viewed thatcompanies were using sales promotion activities mainly to increase short term sales orencourage switching or selling excess stock and not really to give value benefit orenhance/reinforce brand/company image. - 54 -
    • Trade Oriented Sales Promotion Trade Oriented Sales Promotion aimed to motivate channel member of thecompany and to encourage them to push company‘s product. Trade Oriented SalesPromotion includes dealer contest and incentives, trade allowances. Point-of-purchasedisplays, sales training programs, trade shows, cooperative advertising, and otherprograms designed to motivate distributors and retailers to carry a product and make anextra effort to push it to their customersSales 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 promotionactivity. Price offs in their opinion had relatively a greater impact compared to any otherform of sales promotion activity like Bonus packs, Premium, Contests etc. Retailerspreferred price offs the most, then bonus pack, premium, contests, in order ofimportance.Perceptions about Buying Roles Retailers viewed that the person who came to the shop (who may be a maid, son,daughter, daughter-in-law and child) was the decider of a toilet soap brand and not theIncome provider (e.g. head of the family). It could be inferred that visibility of informationabout the sales promotion activity at the point of purchase could result into the purchaseof a promoted brand.Perceptions about their role in decision-makingRetailer had relatively very low influence in affecting choice. It could be inferred thatvisibility and awareness about the scheme were the critical success factors so that pullcould be created. - 55 -
    • Perceptions about Response to Sales Promotion OffersThey believed that younger age-groups were more experimental in nature, amenable totrying new brands, and sought/looked for or asked whether there were any) salespromotion schemes running on any toilet soap at the time of purchase.Perceptions about Communications of Sales Promotion SchemesRetailers perceived that role of word of mouth and television advertising played animportant part in providing information inputs to consumers regarding sales promotionactivities.Variations in Information FlowSmaller (non-supermarket, small format store) retailers received relatively less supportcompared to supermarkets in terms of servicing, margins, information about salespromotion activities from the dealers. Many a times small retailers were only informedverbally about sales promotion schemes by the dealer salesmen during the scheduledweekly visits.Dealer-Retailer DynamicsAt the time of sales promotion activities, dealers had tendency to push unwanted stocksonto the smaller retailers. In fact these retailers preferred to stock variety of brands andwanted payment for shelf and window display to increase traffic into their store.However, supermarkets and big retailers were pampered and given special servicesand given better margins and better allowances.MarginsIt was found that in sales promotion schemes margins varied from 6 to15% dependingof 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. - 56 -
    • Perceptions about terms and conditionsRetailers were not found to be happy with sales promotion schemes where theirmargins were cut on the pretext of just fast movement of inventory of the brand beingpromoted. Also if additional incentive was offered it was subject to minimumperformance requirement.Nature of POPRetailers indicated that most of the POP (Point of Purchase) materials were meant forbrand advertisement and not for giving information regarding the schemes. Thus it couldbe inferred that company‘s follow up was not adequate.Servicing during duration of SchemeIn stock-out situation during the running of the sales promotion schemes, smallerretailers had to wait for replenishment of stocks till the next scheduled weekly visit bythe dealer salesman but big retailers were serviced on telephonic request forreplenishment of stocks. This clearly indicated the disparity in treatment.Problem of left-overA leftover stock at the end of any scheme was required to be sold by the retailers beforethey ordered fresh stocks. In case of bonus packs scheme, leftover stock was oftendismantled (cut open buy one get one free) and sold them individually as a regular soap.This approach of the company leads to misappropriation which in turn could result inadverse brand image.Gifts for Retailer motivationCompanies at times were rewarding retailers by giving free gifts like thermos flasks orclocks if they sold more than certain quantity in a given period. Companies were makinga half-hearted effort to motivate retailers. - 57 -
    • Perceptions about mass media announcementsRetailers viewed that whenever sales promotion scheme was announced on TV, itcreated pull and they were more than willing to stock such brands. For exampleMedimix and Dettol contest was not advertised on TV, hence there was very littleawareness leading to unsold stock till 6 months. While Lux Gold Star which was heavilypromoted on T.V. is recalled even today.Post Promotion BehaviorRetailers observed that in most cases sales promotion scheme on a brand mightencourage a buyer to switch a brand temporarily but he would revert back to originalbrand after promotion.Handling ProblemsMany a time‘s retailers had to handle various sales promotion offers simultaneously in acategory and also across categories and there was no formal communication planningeither from the dealer or the company. Remembering each offer and handling was aproblem especially for a small retailer which was often an as one-man show. Why do Sales promotion schemes affect sales? There are three mechanisms behind these facts. It is Purchase quantity, Brandswitching 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 theywould have purchased when there is no promotional incentive.Finally, consumer‘s total consumption of the product category is increased by thepromotion. However, in the long term this positive effect may be diluted because apromotional campaign has no permanent effect in the sales of the firm - 58 -
    • Sales Promotion Strategy Sales are the lifeblood of a business, without sales there would be no business inthe first place; therefore it is very important that if a business wants to succeed, it shouldhave a sales promotion strategy in mind. The primary objective of a sales promotion isto improve a company‘s sales by predicting and modifying your target customer‘spurchasing behavior and patterns. Sales promotion is very important as it not only helps to boost sales but it alsohelps a business to draw new customers while at the same time retaining older ones.There are a variety of sales promotional strategies that a business can use to increasetheir sales, however it is important that we first understand what a sales promotionstrategy actually is and why it is so important. A sales promotion strategy is an activity that is designed to help boost the salesof a product or service. This can be done through an advertising campaign, publicrelation activities, a free sampling campaign, a free gift campaign, a trading stampscampaign, through demonstrations and exhibitions, through prize giving competitions,through temporary price cuts, and through door-to-door sales, telemarketing, personalsales letters, and emails. The importance of a sales promotion strategy cannot be underestimated. This isbecause a sales promotion strategy is important to a business boosting its sales. When developing a sales promotion strategy for your business, it is importantthat 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. - 59 -
    • There are three types of sales promotion strategies: A push strategy A pull strategy or A combination of the twoA Push Strategy: A ‗push‘ sales promotion strategy involves ‗pushing‘ distributors and retailers tosell your products and services to the consumer by offering various kinds of promotionsand personal selling efforts. What happens here is that a company promotes theirproduct/services to a reseller who in turn promotes it to another reseller or to theconsumer. The basic objective of this strategy is to persuade retailers, wholesalers anddistributors to carry your brand, give it shelf space, promote it by advertising, andultimately ‗push‘ it forward to the consumer. Typical push sales promotion strategiesinclude; buy-back guarantees, free trials, contests, discounts, and specialty advertisingitems.A Pull Strategy: A ‗pull‘ sales promotion strategy focuses more on the consumer instead of thereseller or distributor. This strategy involves getting the consumer to ‗pull‘ or purchasethe product/services directly from the company itself. This strategy targets its marketingefforts directly on the consumers with the hope that it will stimulate interest and demandfor the product. This pull strategy is often used when distributors are reluctant to carry ordistribute a product. Typical pull sales promotion strategies include; samples, coupons,cash refunds or rebates, loyalty programs and rewards, contests, sweepstakes, games,and point-of-purchase displays. - 60 -
    • A Combination of Two Strategies: A ‗combination‘ sales promotion strategy is just that; it is a combination of a pushand a pull strategy. It focuses both on the distributor as well as the consumers, targetingboth parties directly. It offers consumer incentives side by side with dealer discounts. The Short term Impact of Promotions:Let‘s have look at the impact of promotions on purchase behavior during thepromotional period i.e. the week or the month when the promotion was being run. Themajority of the empirical studies have focused on the impact of promotions in the shortterm. The key findings across the studies are discussed below.Temporary price reductions (price off) substantially increase sales:There is ample evidence to show that promotions lead to dramatic increases in sales ofpromoted brand in the short term. Studies have consistently reported high sales effectsand high price elasticity of brands which are on promotion. The economic rationale forthe promotional response is clear – temporary price cuts increase the value of theproduct to the consumer and it leads to immediate action. Sales boost can be quantifiedon the basis of brand switching, primary demand expansion and consumer stockpilingduring 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 thatbrand switching effects within a category are asymmetric such that promotions onhigher quality brands impacts weaker brands disproportionately. During a promotion,higher quality brands induce a large number of consumers to switch to them ascompared to lower quality brands. One explanation advanced for this finding by - 61 -
    • researchers is that large share brands have higher brand equity and attract switchersmore than low share brands.Sales Promotion leads to purchase acceleration/stockpiling effects: In response to a promotion, consumers may buy more quantity of the productcategory or buy at an earlier time than usual (purchase acceleration effect). Ifconsumers buy extra quantity during a promotion or earlier than normal, then they arenot in the market to buy products once the promotion is over. Thus purchaseacceleration is demonstrated throughA lengthening of inter purchase times after a promotion. Purchase acceleration wasmore likely to be exhibited in increased purchase quantity than in shortened interpurchase times. Results showed that consumers mostly made up for the large quantitypurchased by waiting longer until purchasing again. Results indicated that heavy userstended to accelerate purchases more than light users. There was negligible differencein 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 duringand after a promotion, but from this project I came to know that promotions also have aprimary demand expansion effect. When a primary demand expansion occurs,promotion induced increase in purchase quantities does not significantly extend the timetill the next purchase in the category occurs, thus indicating that there has been anincrease in consumption promotions induced consumers to buy more and consumefaster. It is found that promotion induced inventory temporarily increased consumptionrates within the category e.g. in categories such as bacon, salted snacks, soft drinksand yogurt exhibited primary demand expansions as a result of promotion whilebathroom tissue, coffee, detergent and paper towels exhibited stockpiling only. - 62 -
    • Sales Promotions affect sales in complementary and competitive categories: From this project it is found that promotion not only increases sales of mainproduct but it also lead to increase in sales of complementary categories. Found strongcross relationships between products of the promoted product category indicating brandsubstitution behavior. They stated that retail price promotions work as a form of implicitprice bundling whereby the consumer surplus is transferred from the promoted item tonon promoted items. Also found that retail price promotions create significantcomplementary and substitution effects within the store. - 63 -
    • The Long term Impact of Promotions:Strategies are builds to reap the benefits for longer period of time; same is true in salespromotion strategies. Let us see impact of promotions effort and study the impact over alonger time period e.g. 4-6 months or even a few years after a sales promotioncampaign.The result showed that consumer promotions for leading brands of establishedpackaged 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 existinglong-term customer base for which the experience of buying the promoted brand wasnothing new.It is found that although the short term effects of promotions are strong; thesepromotions rarely exhibit long term effects. It is observed that each sales componentgenerally lacked a permanent effect and the effect of promotion was short lived andincrease in promotions affected consumers‘ stockpiling decisions in the long run. Theyfound that the combined short and long-term elasticity of promotions was zero. Thestockpiling induced by a promotion was essentially offset by reduced demand in thelong term. Thus increased sales were more a result of sales borrowed from the futurethan increased consumption - 64 -
    • SWOT Analysis of FMCG SectorStrengths: Well-established distribution network extending to rural areas. Strong brands in the FMCG sector. Low cost operations.Weaknesses: Low export levels. Small-scale sector reservations limit ability to invest in technology and achieve economies of scale. Several "me-too‘‘ products.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. - 65 -
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    • RESEARCH METHODOLOGYINTRODUCTIONResearch as a scientific search for pertinent information on a specific topic infectsresearch is a scientific investigation. The advanced learned dictionary of current Englishlays down the meaning of research as ―A care fully investigation or inquiry speciallythrough search for new facts in any branch of knowledgeAccording to Redman and Mory define research as a ―systematizes afford to gain newknowledge‖ some people considered research as a moment, a moment from the knowto the unknownResearch is an original contribution to the existing stop of knowledge for it advancement.It is the pursuit of truth with help of study observation comparison and experimentinsured research for knowledge through objective and systematic method of findingsolution to a problem is research. Research refers to the systematic method consistingof enunciating the problem, formulating the hypothesis, collection of the facts.TYPES OF RESEARCH:- Descriptive Research Analytical Research Quantitative Research Qualitative Research Conceptual Research Empirical Research Applied Research Fundamental Research Scientific Research - 67 -
    •  Exploratory ResearchDESCRIPTIVE RESEARCHDescriptive research includes surveys and fact finding enquiries of different kind. Themajor purpose of descriptive research is description of state of affairs as it exists atpresent. In social and business research we quite often use. We have done Surveyfound fact by personal interview so it is descriptive. The main characteristic of thismethod the researcher has no control over the variables. He can only report what hashappened or what is happening. Most ex. Post facto research projects are used fordescriptive studies in which the researcher seeks to measures. METHOD OF DATA COLLECTIONThe following methodology has been adopted during undertaking the present study.DATA COLLECTION:-The Data has been collected from both primary and as well as secondary sources. Primary Data Secondary DataPRIMARY DATA COLLECTION:-There is the several method of collecting primary data, particularly in surveys anddescriptive research observation method, interview method through questionnaires wasused to know the level of customer satisfaction. - 68 -
    • 1. OBSERVATION METHOD:-The observation method is the most commonly used method especially in studiesrelating to behavioral sciences. In a way we all observe things around us, but this sort ofobservation is not scientific observation. Observation becomes a scientific tool and themethod of data collection for the researcher, when it serves a formulated researchpurpose, is systematically planned and recorded and is subjected to checks andcontrols an validity and reliability.2. INTERVIEW METHODThe interview method of collecting data involves presentation of oral-verbal stimuli andreply in terms of oral-verbal responses. This method can be used through personalinterviews and, if possible, through telephone interviews. In this study we havediscussed the personal interviews and telephone interviews.a) Personal interviews: - Personal interviews method requires a person known asthe interviewer asking question generally in a face-to-face contact to the other person orpersons.b) Telephone interviews: - This method of collecting information consists toconnecting respondents on telephone itself. It is not a very widely used method, butplays important part in industrial surveys.COLLECTION OF SECONDARY DATASecondary data means data that are already available i.e. they refer to the data whichhave already been collected and analyzed by someone else. Secondary data mayeither be published data or unpublished data. Usually published data are available in:a) Books, Magazines and Newspapers;b) Report and Publication of various associations connected with business andindustry, bank, stock exchanges, etc.;c) Technical and Trade journals; - 69 -
    • The sources of unpublished data are many; they may be found in diaries, letters,unpublished biographies and also may be available with scholars and research workers,trade associations, labour bureaus and other public/private individuals andorganizations.Research Objectives: 1. To study consumer preferences with respect to sales promotion in FMCG sector. 2. To examine tradeoffs, relative importance of different attributes while responding to a sales promotion offer. 3. To study the effect of sales promotions in FMCG sector esp. in soaps and detergent industry. 4. To study consumer behavior in purchase of soaps and detergentProduct categories under study DETERGENTS: Washing Powder for Clothes TOILETERIES SoapsResearch DesignResearch design selected for this project is Descriptive.Data collection Method: (a) Primary Data Collection Method:  Survey method was used for primary data collection.  We used questionnaire as an instrument for survey method.  Structured questionnaire.  Type of questionnaire: Open ended and closed ended. - 70 -
    • (b) Secondary Data Collection method:  Reference books.  Internet. Sampling Detail1. Target population: The Population for this research study consists to the residents of Sikar.2. Sampling unit: In this study the sampling unit is individual consumer.3. Sample size: 100 consumers 100 retailers.4. Sampling method: The sample is selected by using convenience- sampling method. - 71 -
    • - 72 -
    • Q1. Which brand of Soap / Detergent do you use? Bathing –soaps Respondents Lux 41 Hamm 3 Lifebuoy 14 Nima 8 Others 34 Bathing soaps 50 40 30 20 10 0 Lux Hamam Lifebuoy Nima Others Respondents 41 3 14 8 34Interpretation: The above question has been formed to know the soaps and detergents at thetop of the mind of the customers. It shows those consumers‘ purchase and use of thatparticular brand. It will help to the company to know the market scenario and the majorbrands in the market.Form the above result it is clear that out of 100 customers more than 40 are consumersare having the same brand as the image in their mind, whereas others category is alsoshowing the higher graph than these 3 major players(Hamam, Lifebuoy, Nima). - 73 -
    • Detergent powder Respondents Nirma supper 19 Wheel 14 Surf 35 Ariel 18 Others 14 Detergent Powder 40 35 30 25 20 15 10 5 0 Nirma sup Wheel Surf Ariel Othres Respondents 19 14 35 18 14Interpretation: Form the above result it is clear that out of 100 customers 35 are purchasing thesame brand of detergent, whereas all others are on same level. - 74 -
    • Q2. Do you always buy the same brand of Soap / Detergent? Particulars Respondents Yes 56 No 44 Brand loyal 60 50 40 30 20 10 0 Yes No Respondents 56 44Interpretation: The objective behind the formation of this question is to know the level of brandloyalty of the consumers towards the brands of soaps available in the market. Theabove figure shows that on 56% of the respondents are loyal to their brands ofdetergent/soap. FMCG are such a market where the level of loyalty remains low andthis is because of many reasons. - 75 -
    • Q3. Which factors do you normally consider while purchasing aparticular brand of Soap / Detergents? Bathing Factors soap Det.powder Fragrance 19 18 Quality 33 36 Company image 16 13 Price 23 19 Packaging 6 11 Others 3 3 Factors affecting purchase behavior 40 30 20 10 0 Company Fragrance Quality Price Packaging Others image Bathing soap 19 33 16 23 6 3 Det.powder 18 36 13 19 11 3Interpretation: The objective behind this question is to know the effect of influencing factors inthe purchase decision of the soaps and detergent powders. It mainly contains thefactors like, quality which players an important role in the purchase decision of thesoaps and detergents both. If we look at the graph of the soaps and detergent it shows quality as the mostinfluencing factors in the purchase decision while price is also an important for purchasedecision. - 76 -
    • Q4. Do you consider promotional schemes while purchasing aparticular brand of Soap / Detergent? Particulars Respondents Yes 78 No 22H0: Promotional schemes have a significant effect on the purchase of brand.H1: Promotional schemes do not have an effect on the purchase of brand. Effect of schemes purchase behavior 100 80 60 40 20 0 Yes No Respondents 78 22Interpretation: Answer of this question will give idea about the effect of promotional schemes inthe purchase decisions. Such types of schemes always attract more and moreconsumers towards particular brand. Simultaneously it gives idea about the factorswhich consumers look most in the product before they make final decision. Here H0 is accepted as the graph shows that 78 out of 100 consumers arelooking for such schemes before they make purchase. - 77 -
    • Q5. Which of the following promotional schemes you have comeacross so far? Promotional schemes Respondents Coupons 16 price off 84 Freebies 24 scratch cards 12 lucky draw 9 Bundling 31 extra qty. 44 Familiarity of promotional Schemes 100 80 60 40 20 0 scratch Coupons price off Freebies lucky draw Bundling extra qty. cards Respondents 16 84 24 12 9 31 44Interpretation: The above stated question clearly states the awareness of promotional schemesoffered 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/schemeswhich consumers have came across at the time of purchase. It will help themanufacturers and marketers too how too launch their new products in the market withwhich schemes. - 78 -
    • Q6. Which medium do you feel is suitable to promote the variouspromotional schemes? Source Respondents Radio 11 TV 69 Newspaper 43 Hoarding 15 Others 12 Mediums to promote the promotional schemes 80 60 40 20 0 Radio TV News.ppr Hoarding Others Respondents 11 69 43 15 12Interpretation: This question gives stress on the media habit of the people and through whichthe product should be launch or they think it would be better than other Medias. The above result shows TV as the best media to market the product which willcover majority of the viewer ship. On the second place it shows news papers as themedia to promote the product in the market. - 79 -
    • Q7. Is there any existing scheme on the Soap / Detergent you arecurrently using? Particulars Respondents Yes 58 No 42 Existing scheme on the Soap / Detergent 70 60 50 40 30 20 10 0 Yes No Respondents 58 42Interpretation: The answer of the respondents give idea about the awareness of the promotionalschemes offered in the market on their existing soaps and detergents. In this situation more then 40% of the people are not aware or having vague ideaabout the promotional schemes running into the market. It shows that people are not much aware of the schemes which continue in themarket it may be because of the present stock of the product at their place. - 80 -
    • Q8. If yes, please specify? Particulars Respondents 3+1/Other Free 36 Discount 22 No idea 6 No answer 36Interpretation: This question supports the above question. It enlists the answers of thosecustomers who are aware of the present schemes offered in the market and also thoseschemes which are more demanded in the market. The result shows that 1+1 or 2+1 or other free schemes are more demanded andmore aware schemes in the market. So manufacturers may go for the same at the time of launching their product. - 81 -
    • Q9. If you get an attractive promotional offer in the product other thenof your choice will you switch over? Particulars Respondents Yes 73 No 27 Switching behavior 80 70 60 50 40 30 20 10 0 Yes No Respondents 73 27Interpretation: It shows the level of brand loyalty among the consumers. The result clearlyshows that out of 100, 73 people are ready to switch over to another brand if they findbetter promotional schemes which suits their budget means more qyt + less cost +quality.Combination of all these schemes will run better in the market. - 82 -
    • Q10. Give reason for the same? Particulars Respondents Cost+qty 16 Quality 17 Satisfaction 2 Brand loyal 5 More benefit/budget 22 Season change 2 No answer 36 Reason 40 30 20 10 0 More Season Cost+qty Quality Satisfaction Brand loyal No answer Benefit/bud change Respondents 16 17 2 5 22 2 36Interpretation: Above question it gives specific reasons for switching too other products. Itshows that extra quantity with less or same price, more satisfaction, quality and otherfactors influence consumers to switch over too other brands. - 83 -
    • Retailers - 84 -
    • Q1. Since how long are you in this business? Particulars Respondents 1-5 Years 24 5-10 Years 27 More than 10 years 49 60 50 40 30 20 10 0 1-5 Years 5-10 Years More than 10 years Series1 24 27 49Interpretation: This question gives idea about the benefit to the retailers who are on the marketfrom long period of time and the benefits they are getting more as compare to others. Italso shows their experience in the field and the services they are providing too their newand regular customers. It also gives idea about the benefits they are gaining forwholesalers and direct from the company. - 85 -
    • Q2. Name the Soap / Detergent (Company) you stock for. Companies Respondents Nirma 96 HUL 100 P&G 90 Godrej 94 Others 68 Soap / Detergent in stock 120 100 80 60 40 20 0 Nirma HUL P&G Godrej Others Series1 96 100 90 94 68Interpretation: It gives idea about the capacity of the retailers to stock the goods and also thevariety of the products they are stocking. It will also make clear the demand of thegoods in their stores and the selling of the product in market. Most of the retailer stocksall types of soap and detergent. - 86 -
    • Q3. Rank the following factors that customers look for in thepurchase of Soap / Detergent. (Rank from 1 to 6) Factors 1 2 3 4 5 6 Fragrance 3 24 33 22 10 8 Quality 66 23 7 3 1 0 Company Image 9 18 34 24 11 4 Price 17 28 24 16 6 9 Packaging 4 5 2 27 38 24 Others 1 2 0 8 34 55 Bathing Soap 70 60 50 40 30 20 10 0 1 2 3 4 5 6 Fragrance 3 24 33 22 10 8 Quality 66 23 7 3 1 0 Company Image 9 18 34 24 11 4 Price 17 28 24 16 6 9 Packaging 4 5 2 27 38 24 Others 1 2 0 8 34 55 - 87 -
    • Interpretation: It gives an idea about the priority the influencing factors too the consumers andalso the weight age of that factor over other factors. In the above result people are more quality and price oriented. On the other handpeople are also conscious about the company image, because sometime consumerremembers that name of product by the company name and also from the pastperformance of that company. Fragrance and packaging are not influencing factor asper the respondents.Factors 1 2 3 4 5 6Fragrance 11 17 41 21 7 3Quality 43 34 16 6 1 0CompanyImage 13 16 27 26 11 7Price 27 28 14 9 6 16Packaging 6 5 2 33 43 11Others 0 0 0 5 32 63 - 88 -
    • Detergent 70 60 50 40 30 20 10 0 1 2 3 4 5 6 Fragrance 11 17 41 21 7 3 Quality 43 34 16 6 1 0 Company Image 13 16 27 26 11 7 Price 27 28 14 9 6 16 Packaging 6 5 2 33 43 11 Others 0 0 0 5 32 63Interpretation: It gives an idea about the priority the influencing factors too the consumers andalso the weight age of that factor over other factors. In the above result people are more quality and price oriented. On the other handpeople are also conscious about the company image, because sometimes theconsumer remembers that name of the product by the company name and also from thepast performance of that company. Fragrance and packaging are also play importantrole for purchasing detergent powder. - 89 -
    • Q4. Do you suggest customers to purchase a certain brand? Particular Respondents Yes 33 No 67 Suggestion 80 70 60 50 40 30 20 10 0 Yes No Series1 33 67Interpretation: This could be a very help question to understand the role of retailers in thepurchase decision. In above graph 67% of retailer are not suggest to purchase particular brandbecause of personal relation or that customer are brand loyal while 33% of the retailerare suggesting consumers to buy particular brand. There could be many reasons like,extra margin, relations with consumers and quality of the products which retailer mayget the benefit of the same. - 90 -
    • Q5. If Yes why? Particular Respondents High margin 9 Quality 17 Relationship 7 No reason 67 If yes 80 70 60 50 40 30 20 10 0 High margin Quality Relationship No reason Respondents 9 17 7 67Interpretation: it gives idea about the reasons why retailers suggest the consumers to buyparticular brand. In above graph and table it is clear that for margin and of better relations withconsumers and too provide quality product to consumers they suggest consumers toobye particular brand. For the company it may be helpful to target such retailers to selltheir product in the market easily. - 91 -
    • Q6. Do customers look for various schemes in the product? Particular Respondents Yes 92 No 8 Customers look for various schemes 100 80 60 40 20 0 Yes No Respondents 92 8Interpretation: This gives a real helpful data for checking the effect of sales promotions in themarket and how seriously consumers follow the promotions before they go for purchaseparticular brand. The above result shows that only 8 out 0f 100 didn‘t go for the promotionotherwise all are looking for any type of the promotions on the product. - 92 -
    • Q7. If yes which schemes? Promotional Respondents Schemes Coupons 11 Price Off 82 Freebies 35 Scratch Cards 2 Lucky Draws 19 Bundling Offer 65 Extra Quantity 79 Which schemes 100 80 60 40 20 0 Scratch Lucky Bundling Extra Coupons Price Off Freebies Cards Draws Offer Quantity Respondents 11 82 35 2 19 65 79Interpretation: The above stated results show the demand of various types of promotionalschemes in the market by the consumers. Almost all types of schemes are beingdemanded by the consumers in the market but there are three major schemes whichconsumers generally look at the time of purchase or before that. Price off, product bundling and extra quantity are more demanded by theconsumers over others schemes. - 93 -
    • Q8. Which Trade Promotions do various companies offer? NIRMA Promotions Respondents Extra Margin 46 Extra Units 34 credit facility 55 Gifts 24 promo. Exp. 8H0: Effect of trade promotions for all four brands is similar.H1: Effect of trade promotions for all four brands is not similar. Trade Promotions by Nirma 60 50 40 30 20 10 0 Extra Margin Extra Units credit facility gifts promo. Exp. Series1 46 34 55 24 8Interpretation: From the above graph shows the trade promotions offered by the NIRMA Ltd tothe retailers to attract them towards stocking their goods and also stop them switchingthem too other major players in the market. NIRMA is mainly offering credit facility which is offered by all major players it maydiffer in the time limit of the credit. It is also providing extra margin, and units withoccasional gift with their schemes. - 94 -
    • HUL Promotions Respondents Extra Margin 47 Extra Units 34 Credit facility 58 Gifts 25 Promo. Exp. 22 Trade Promotions by HUL 70 60 50 40 30 20 10 0 Extra Margin Extra Units Credit facility Gifts Promo. Exp. Series1 47 34 58 25 22Interpretation: The advantage of HLL over NIRMA is that it bare promotional expenses whichNIRMA is not doing. It attracts more consumers through such promotions, such asdisplay of the product, banners etc. So this may help it to attract more retailers. It may because of its less cost ofproduction in other segments in which nirma is not operating. - 95 -
    • P&G Promotions Respondents Extra Margin 40 Extra Units 33 Credit facility 55 Gifts 20 Promo. Exp. 12 Trade Promotions by P&G 60 50 40 30 20 10 0 Extra Margin Extra Units Credit facility Gifts Promo. Exp. Series1 40 33 55 20 12Interpretation: P&G is also a big player in the FMCG market. It is also providing all the facilitieswhich others are providing to retailers. - 96 -
    • GODREJ Promotions Respondents Extra Margin 46 Extra Units 32 Credit facility 57 Gifts 19 Promo. Exp. 18 Trade Promotions by Godrej 60 50 40 30 20 10 0 Extra Margin Extra Units Credit facility Gifts Promo. Exp. Series1 46 32 57 19 18Interpretation: Godrej is a big player in the FMCG market. It is also providing all the facilitieswhich others are providing to retailers. But it is lacking in bearing expenses which HULis providing to maximum number of retailers. - 97 -
    • OTHERS Promotions Respondents Extra Margin 30 Extra Units 18 Credit facility 38 Gifts 15 Promo. Exp. 7 Trade Promotions by Others 40 35 30 25 20 15 10 5 0 Extra Margin Extra Units Credit facility Gifts Promo. Exp. Series1 30 18 38 15 7Interpretation: Others include local players, as well as we established players like, wipro buttheir products are not in demand like other players but still they are providing all thefacilities to retailers to attract towards stocking their products. - 98 -
    • GODREJ NIRMA HUL P&GExtraMargin 46 46 47 40Extra Units 32 34 34 33Creditfacility 57 55 58 55Gifts 19 24 25 20Promo.Exp. 18 8 22 12 34.4 33.4 37.2 32ANOVA: Single FactorSUMMARYGroups Count Sum Average VarianceColumn 1 5 172 34.4 289.3Column 2 5 167 33.4 339.8Column 3 5 186 37.2 229.7Column 4 5 160 32 284.5ANOVASource of SS df MS F P-value F critVariationBetween Groups 72.55 3 24.18333 0.084609 0.967457 3.238872Within Groups 4573.2 16 285.825Total 4645.75 19All the big players provide promotion to the retailers due to cut throat competition;Interpretation: from the one factor anova analysis, it is clearly seen that there is a effectof trade promotion on various brands and are similar too. As p> 0.05, it is the evidencethat the null hypothesis is accepted - 99 -
    • Q9. Give reasons for not stocking a particular brand. Retailer stocks all types of soap and detergent because of competition.10. Any Suggestions. Retailer suggested that packaging should be further improved and used aspromotional tool, to encourage sales during certain periods the company should provide price off or extra quantity because that influences directly to the consumer. - 100 -
    • Findings of the report: Sales Promotion, a short-term inducement, offered to a consumer or trade hasgained momentum as a promotional tool world over. It represents nearly three fourth ofthe marketing budget at most consumer product companies. Sales promotions canenhance consumers‘ self-perception of being ―smart‖ or a ―good‖ shopper FMCG are such a market where the level of loyalty remains low and this is because of many reasons. Quality 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. Simultaneously it gives idea about the factors which consumers look most in the product before they make final decision Price off and extra quantity is the two main offers/schemes which consumers have came across at the time of purchase TV as the best media to market the product which will cover majority of the viewer ship. On the second place it shows news papers 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+1 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 budget means more qyt + less cost + quality. Extra quantity with less or same price, more satisfaction, quality and other factors influence consumers to switch over too other brands. Retailer stocks all types of soap and detergent because of competition. People are more quality and price oriented. Consumer remember that name of the product by the company name and also from the past performance of that company - 101 -
    • Consumer remembers that name of the product by the company name and alsofrom the past performance of that companyRetailers are not suggest to purchase particular brand because of personalrelation or that customer are brand loyalMargin and of better relations with consumers and too provide quality product toconsumers they suggest consumers too bye particular brand.Customers are looking for any type of the promotions on the product before themgoing to purchase.Price off, product bundling and extra quantity are more demanded by theconsumers over others schemes.NIRMA is mainly offering credit facility which is offered by all major players it maydiffer in the time limit of the credit.HUL attracts more consumers through such promotions, such as display of theproduct, banners etc. - 102 -
    • Recommendation: The findings of the empirical study indicate that unless the brand to be promotedis in the consideration set of the consumer, sales promotion by itself is unlikely to haveany major impact. Clearly this shows that managers need to invest into brand buildingexercise so that his/her brand appears in the consideration set of the target consumers.Only after this should he spend time, money and energy on sales promotion activities. Sales promotion should not be used in isolation but need to be integrated withother tools and in line with the overall positioning of the brand. Also the importance ofthe role of mass media came out clearly in the study. Companies need to create sufficient awareness about sales promotion schemesthrough mass media in order to create awareness. FMCG products are low involvementproducts characterized by switching behavior. Also the person going to the shop for thepurchase of soap is the final decision maker of the brand. Hence it is essential thatcompanies need to design attractive, striking, visible POPs for scheme announcements. With respect to nature of scheme, the finding suggested that premium (free gift)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 forthe target consumers. Repetitive use of the same premium for a prolonged period may have negativeeffect on the loyal customers. When the company is giving its own product free aspremium, it needs to ensure the quality of the product from it as it is likely to jeopardizethe image of both its products. The findings exhibited that both the retailers and consumers perceived that salespromotion activities carried out by the companies for increasing sales in short term andclearing excess stocks. What it implies is that companies need to use sales promotion - 103 -
    • synergistically and communicate so that they provide value to the target audience andenhance brand quality/image perceptions.Companies need to systematize information flow regarding sales promotion activitiesparticularly at dealer and retailer level. Ensuring proper information flow and devisingchecks and measures to reduce misappropriations and implementation flows should beconsidered critical aspects for the success of sales promotion activities by thecompanies. As retailing is fragmented, direct reach by companies is next to impossible.Through dealers and proper feedback mechanism, companies keep in touch with themarket.From the study it was found that smaller retailers felt neglected and not enthused toimplement the schemes, particularly when additional handling, stocking, accounting wasrequired on the part of a retailer without compensatory margins. It can be seen that theretailer and consumer perceptions matched with respect to preferences of schemes,underlying motivations and role of mass media. This implies that the retailer would be arich source of information about the consumer and the likely response to salespromotion activities.Developing a system to tap such responses from time to time both at retailer andconsumer level would be helpful for planning future sales promotion activities. In orderto build trust and commitment companies should tap preferences, perceptions ofretailers as well as consumers. - 104 -
    • - 105 -
    • Limitations of the studyWe considered Sikar region only because of limited time duration.Due to this, our sample size is only 100, which is not very large.All the respondents could not fill their questionnaire on their own due to languageproblem and also problem of time and lack of positive behavior.Respondent may give biased answer due to some lack of information about otherbrands.Findings of the study are based on the assumption that the respondents havegiven correct information. - 106 -
    • Emerging TrendsSo far as FMCG market is concern there is new trend is emerging known as Jointsales promotion. Actually it is old concept but it was more prevailing in durableproducts now it is coming intro non durable goods also. When any sales promotionscheme either for trade or consumer is announced by more than one company and /ormore than one brand of the same company, it is referred as joint sales promotion orhorizontal 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 time Tie-up of a new /slow moving brand with an established brand Target market commonality Seasonal demand Distribution commonality Targeting new segment Derived demand Countering competitive joint sales promotions - 107 -
    • Conclusion of the Survey The study reflects that the use of sales promotion undeniably has increased overthe years in India. Future holds lot of promise for such schemes across wider range ofproduct-markets. Sales Promotion has ceased to be major differentiator at least in the metros, withalmost all companies offering similar freebies and gifts. As a result now marketers haveto find out some innovative ways of sales promotion to differentiate from competitors.Currently Price off and Bye one get one free offers are very effective to attract theconsumers towards the products. We have noted that these kind of promotional tools are useful for short termincrease in sales and to induce first trial. These types of promotional schemes shouldbe consistent and changed from time to time depending upon season and competitor‘sschemes. With the Increasing number of supermarket, the branded packaged goods workas silent sales person. So in such stores, sales promotion plays a more effective role instimulating consumers‘ demands. One of the very important facts we came to know from this project is that sale ofgoods which contain large quantity and having big packaging e.g. detergent arestagnating because consumer prefer to buy small pack goods, the reasons are: smallpack goods reduce risk of bad quality, It had low cost or say price, and last butimportant factor i.e. mentality to purchase just to try first. Sales of small pack goods arequite high, but from the company‘s point of view small pack goods is less profitablecompare to large pack goods. So here marketer tries to increase sales of large pack goods by using salespromotion tactics like price off and percentage extra. - 108 -
    • Annexure - 109 -
    • Questionnaire CustomersPlease fill this questionnaire. Your identity would not be revealed and information will only beused for academic purpose.Q1. Which brand of Soap / Detergent do you use? Bathing –soaps Respondent Lux Hamam Lifebuoy Nirma Others Detergent powder Respondent Nirma supper Wheel Surf Ariel OthersQ2. Do you always buy the same brand of Soap / Detergent? Particulars Respondent Yes NoQ3. Which factors do you normally consider while purchasing a particular brand of Soap/ Detergents? Bathing Factors soap Det.powder Fragrance Quality Company image Price Packaging Others - 110 -
    • Q4. Do you consider promotional schemes while purchasing a particular brand of Soap /Detergent? Particulars Respondent Yes NoQ5. Which of the following promotional schemes you have come across so far? Promotional schemes Respondent Coupons price off Freebies scratch cards lucky draw Bundling extra qty.Q6. Which medium do you feel is suitable to promote the various promotional schemes? Source Respondent Radio TV Newspaper Hoarding OthersQ7. Is there any existing scheme on the Soap / Detergent you are currently using? Particulars Respondent Yes No - 111 -
    • Q8. If yes, please specify? Particulars Respondent 3+1/Other Free Discount No idea No answerQ9. If you get an attractive promotional offer in the product other than of your choice willyou switch over? Particulars Respondent Yes NoQ10. Give reason for the same? Particulars Respondent Cost + Qty Quality Satisfaction Brand loyal More benefit/budget Season change No answerQ11. Give suggestions about futuristic promotional schemes................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................. - 112 -
    • RetailersPlease fill this questionnaire. Your identity would not be revealed and information will only beused for academic purpose.Q1. Since how long are you in this business? Particulars Respondent 1-5 Years 5-10 Years More than 10 yearsQ2. Name the Soap / Detergent (Company) you stock for. Companies Respondent Nirma HUL P&G Godrej OthersQ3. Rank the following factors that customers look for in the purchase of Soap /Detergent. (Rank from 1 to 6) Factors 1 2 3 4 5 6 Fragrance Quality Company Image Price Packaging Others - 113 -
    • Q4. Do you suggest customers to purchase a certain brand? Particular Respondent Yes NoQ5. If Yes why? Particular Respondent High margin Quality Relationship No reasonQ6. Do customers look for various schemes in the product? Particular Respondent Yes NoQ7. If yes which schemes? Promotional Respondent Schemes Coupons Price Off Freebies Scratch Cards Lucky Draws Bundling Offer Extra Quantity - 114 -
    • Q8. Which Trade Promotions do various companies offer? NIRMA Promotions Respondent HUL Extra Promotions Respondent Margin Extra Margin Extra Units Extra Units credit Credit facility facility Gifts Gifts Promo. Exp. promo. Exp. P&G GODREJ Promotions Respondent Promotions Respondent Extra Margin Extra Margin Extra Units Extra Units Credit facility Credit facility Gifts Gifts Promo. Exp. Promo. Exp. OTHERS Promotions Respondent Extra Margin Extra Units Credit facility Gifts Promo. Exp.Q9 Give reasons for not stocking a particular brand.………………………………………………………………………………………………………………………………………………………………………………………………………………Q10. Any Suggestions……………………………………………………………......................……………………………………………………………………………………………………….….……………………………………………………………………………………………........ - 115 -
    • - 116 -
    • BibliographyBOOKS  Philip Kotler, ―Marketing Management‖, 11th edition, Pearson education Asia Publication.  C.R.Kothari, ―Research Methodology methods & techniques‖,New Age International(p)ltd.publishers,2nd edition.WEBSITES  http://www.nirma.co.in_files  http://www.hul.co.in_files  http://www.pg-india_files  http://www.godrej_files - 117 -