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DISSERTATION	PROJECT	REPORT


ON


“ROLE OF SALES PROMOTION ON FMCG”


A Dissertation Project report submitted in Partial Fulfillment of
award of MBA Degree




ANSAL SCHOOL OF MANAGEMENT


ANSAL UNIVERSITY


GURGAON


SUBMITTED TO SUBMITTED BY


DR. KIRTI DUTTA Pooja Deswal


160MBAGEN


Role of sales promotions in FMCG sector


This is to certify that Mr. the student of MBA 2nd year of Ansal University, Gurgaon
have completed their Dissertation Project “Role of sales promotions in FMCG” in the
year 2016-2018 in partial fulfillment of Ansal University requirements for the award of
the degree of Master of Business Administration.




Dissertation Project Guide


Dr.Kirti Dutta


Date:


CERTIFICATE
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Role of sales promotions in FMCG sector
PREFACE


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


Due to very rapid industrialization all over the world the demand for the managerial
personnel and the administrative personnel has increased. The perfect study of
Management involves both the theoretical as well as practical aspects. To survive in this
highly competitive market “Practical Knowledge” is as relevant as the Theoretical.


The significance of MBA Degree is that the Theoretical aspects, which a student learns
throughout the year in the class sessions, can be practically applied through different
projects, which one undertakes. Keeping in tune with this doctrine, we have tried to apply
theoretical aspects through out the project, which we learned under the course of
management.


In this project more emphasize given to the various tools of sales promotion and its
impact on consumers buying decisions. Actually in recent trend to some extent this
technique also become victim of clutter, even though generating innovative and more
attractive tools to lure the customers can eliminate it.


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


ANSAL SCHOOL OF MANAGEMENT YOGESH SINGLA


ANSAL UNIVERSITY
	
	
	
	
	
	
	
	


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Role of sales promotions in FMCG sector
GURGAON
	
	
	
	
	
	
	
	


	
	
	
	
	
	
	
	
	
	


.


	
	
	
	
	
	
	
	


ACKNOWLEDGEMENT


Every study requires a guidance of someone who is working in that field.
Firstly we would like to thank the institution for providing an opportunity of
preparing a Grand Project Report and allowing us to use the resources of the
institution during this project.




We are extremely thankful to our Project Guide, Dr. Kirti Dutta of Ansal
University for their precious guidance regarding the preparation of the Project
Report. Their guidance has proved to be useful and without them, the preparation
of this report might not have been possible.


	


We are also thankful to the other faculty members of Ansal University for
extending their valuable support for this project.


We also extend our sincere thanks to the Respondents, who helped us during the
course of our project and for their gracious attitude.


We would like to take this opportunity to extend our warm thoughts to those who
helped me in making this project a wonderful experience.


Last but not the least; we would also like to thank our family for their support and
encouragement.


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Role of sales promotions in FMCG sector
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Role of sales promotions in FMCG sector
Executive Summary


As a part of our study curriculum it is necessary to conduct a Dissertation project. It
provides us an opportunity to understand the particular topic in depth and which leads to
through to that topic. My topic for the Dissertation project is titled as “Study of consumer
oriented sales promotion in FMCG sector” in which emphasis given to the effect of sales
promotion on buying habits of consumers.


To start with we will give brief information regarding FMCG sector then moving to the
main topic we will explain what is topic is all about. Promotion is one of the pillars of
marketing mix and same way sales promotion is also one of the elements of promotion.


With respect to consumer oriented sales promotion there are certain theories narrated as
operant conditioning and projective theory. Based on secondary source certain theoretical
aspects are also included as a part of study.


Then after concentration is given to the primary research. It includes the analysis and
results of survey, which were focuses on consumer’s behavior towards sales promotion
campaign. The survey was conducted with the help of structured questionnaire.


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


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Role of sales promotions in FMCG sector
INDEX


Sr.
No.
TOPICS Page
No.
1. Research Methodology of the study 6
2. Introduction 8
3. Introduction to the topic 10
4. Sales promotion strategies 24
5. SWOT Analysis 29
6. Data Analysis of the survey 30
7. Findings of the report 61
8. Recommendations 63
9. Limitations 65
10. Emerging Trends 66
11. Conclusion 67
12. Bibliography 68
13. Annexure: Questionnaire 69
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Role of sales promotions in FMCG sector
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Role of sales promotions in FMCG sector
RESEARCH METHODOLOGY


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 detergent


Product categories under study


DETERGENTS:
	
Washing Powder for Clothes


TOILETERIES
	
Soaps


Research Design


Research 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.


(b) Secondary Data Collection method:


➢ Reference books.


➢ Internet.


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Role of sales promotions in FMCG sector
Sampling Detail


1. Target population:
	
The population for this research study consists of the
residence of Gurgaon.


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.


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Role of sales promotions in FMCG sector
Introduction


FMCG Concept and Definition:


The term FMCG (fast moving consumer goods), although popular and frequently used
does not have a standard definition and is generally used in India to refer to products of
everyday use. Conceptually, however, the term refers to relatively fast moving items that
are used directly by the consumer. Thus, a significant gap exists between the general use
and the conceptual meaning of the term FMCG.


Further, difficulties crop up when attempts to devise a definition for FMCG. The problem
arises because the concept has a retail orientation and distinguishes between consumer
products on the basis of how quickly they move at the retailer’s shelves. The moot
question therefore, is what industry turnaround threshold should be for the item to qualify
as an FMCG. Should the 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 population segments. Many low-
income households are forced to buy certain products more frequently because of lack of
liquidity and storage space while relatively high-income households buy the same
products more infrequently. Similarly, the purchase cycle also tends to vary because of
cultural factors. Most Indians, typically, prefer fresh food articles and therefore to buy
relatively small quantities more frequently. This is in sharp contrast with what happens in
most western countries, where the practice of buying and socking foods for relatively
longer period is more prevalent. Thus, should the inventory turnaround threshold be
universal, or should it allow for income, cultural and behavioral nuances?


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Role of sales promotions in FMCG sector
Characteristics of FMCG Products:


• Individual items are of small value. But all FMCG products put together account
for a significant part of the consumer's budget.


• The consumer keeps limited inventory of these products and prefers to purchase
them frequently, as and when required. Many of these products are perishable.


• The consumer spends little time on the purchase decision. Rarely does he/she
look for technical specifications (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.


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Role of sales promotions in FMCG sector
Introduction to the topic


Introduction:


The importance of consumer sales promotion in the marketing mix of the fast moving
consumer goods (FMCG) category throughout the world has increased. Companies spend
considerable time in planning such activities. However, in order to enhance the
effectiveness of these activities, manufacturers should understand consumer and retailer
interpretations of their promotional activities. The study here pertains to consumer’s
perceptions regarding sales promotion. Some past researches have 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, added value, increased
quality and convenience as well as hedonic benefits such as entertainment, 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 strategies are
built on the basis of these criteria.


Promotion is one of the important elements of marketing mix. There are so many
elements of promotion such as …


	
Advertising


	
Direct Marketing


	
Public Relations


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Role of sales promotions in FMCG sector
	
Sales Promotion


Traditionally, marketer to increase sales in the short term has used sales Promotions.
However, in the last few decades this communication tool has evolved and now is
considered from a strategic point of view. For this reason, it is necessary to realize new
studies in this area and study how consumers evaluate sales promotions.


Sales promotions have grown in both importance and frequency over the past few
decades. Although an accurate estimate for total sales promotions expenditures does not
exist, we can be sure that the trend is up.


Sales promotion serves three essential roles: It informs, persuades and reminds
prospective customers about a company and its products. Even the most useful product or
brand will be a failure if no one knows that it is available. As we know, channels of
distribution take more time in creating awareness because a product has to pass through
many hands between a producer and consumers.


	


Therefore, a producer has to inform channel members as well as ultimate consumers
about the attributes and availability of his products. The second purpose of promotion is
persuasion. The cutthroat competition among different products puts tremendous pressure
on their manufacturers and they are compelled to undertake sales promotion activities.
The third purpose of promotion is reminding consumers about products availability and
its potential to satisfy their needs.


From these elements Sales Promotion is the element, which is in the focus of this project.
Further Sales Promotion is quite broad term it includes …


	
Consumer Oriented Sales Promotion


	
Trade Oriented Sales Promotion


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Role of sales promotions in FMCG sector
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Role of sales promotions in FMCG sector
Consumer Oriented Sales Promotion


Consumer Oriented Sales Promotion is the main topic of this project. Here emphasize is
given to motivate consumer to increase sales. Consumer Oriented Sales Promotion
includes Sampling, Couponing, Premiums, Contest, 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 of
incentive tools, mostly short-term designed to stimulate quicker and/or greater purchase
of particular products/services by consumers or the trade.”


Roger Strang has given a more simplistic definition i.e. “sales promotions are short-term
incentives to encourage purchase or sales of a product or service.”


Hence, any forms of incentives (price cut or value added nature) offered for short period
either to trade or consumers are considered as sales promotion activities.


Marketer’s uses consumer oriented sales promotion tools for the following reasons:


• To increase short term sales


• To induce trial


• To reduce inventory


• To establish a brand name


• To make cross selling


• To cope up with competition


• To avoid advertising clutter


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Tools of Consumer Oriented Sales Promotion:


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


1. Coupons


2. Price-Off


3. Freebies


4. Scratch Cards


5. Lucky Draws


6. Bundling Offer


7. Extra Quantity


Let’s have look at each tool…


1. Coupons:


Coupon is the oldest and most widely used way of sales promotion. Coupons have been
used since 1895. Packaged goods mostly use it. It is worthwhile to use coupon as a
promotion tool because data shows that market for packaged goods increased from 16
billion in 1968 to 310 billion in 1994. To boost up the sales not only manufacturer but
retailers personally can also used. A coupon leads to price reductions so as to encourage
price sensitive customers. Non users can try a product which may leads to regular sales.


2. Price-off:


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Role of sales promotions in FMCG sector
A price-off is simply a reduction in the price of the product to increase sales and is very
often used when introduction a new product. A reduction in price always increases sales
but the use of this technique should be carefully considered in the current market
situation.


	
Price-off is the most preferred sales promotion technique because consumers
response very positively to this scheme. Not only that but it also cause large increase in
sales volume. Price-off reductions are typically offered tight on the package through
specially marked price packs. E.g. Krack Jack offers 30% Price-off.


3. Freebies


Freebies are a popular form of modern marketing and are some of the best things about
the Internet. The definition of freebies is products or services given away for free at no
cost to the consumer. Well that’s the definition we came up with. I am a bargain freebie
shopper, 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 is
too good to be true. Often it’s in the pursuit of more customers or a larger fan base and it
often works.


4. Scratch Cards


A 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 of
cardboard, where one or more areas contain concealed information: they are covered by a
substance that cannot be seen through, but can be scratched off.


5. Bundling Offers


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Role of sales promotions in FMCG sector
Product bundling is a marketing strategy that involves offering several products for sale
as one combined product. This strategy is very common in the software business (for
example: bundle a word processor, a spreadsheet, and a database into a single office
suite), in the cable television industry (for example, basic cable in the United States
generally offers many channels at one price), and in the fast food industry in which
multiple items are combined into a complete meal. A bundle of products is sometimes
referred to as a package deal or a compilation or an anthology.


Factors Influencing Consumer Oriented sales promotion:


Mainly four factors should be taken into account while determining the sales promotion
program.
	


	
> Target market


	
> Nature of product


	
> Stage of product life cycle


	
> Budget available for promotion


	


1. Target Market:


	


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


2. Nature of the product:


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Role of sales promotions in FMCG sector
There are various product attributes, which influence sales promotional strategy. When
the unit price is low the manufacturer as well as the customer has low risk but he can get
the benefit of mass marketing. Therefore, mass marketing requires mass sales promotion
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 new
product introduced, prospective buyers must be informed about its existence and its
benefits and middlemen must be convinced to stock it. Later, if a product becomes
successful, competition intensifies and more emphasis is placed on sales promotion to
increase its sales.


4. Budget Available for Promotion:


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


	
Percentage of Sales


	
Fixed funds available for sales promotion


	
Following the competition, and


	
Budgeting by objective.
	


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Role of sales promotions in FMCG sector
Sales Promotion from the Consumers point of view


Willingness to buy on sales promotion offer


Sixty per cent of the sample did not show willingness to buy a brand due to promotion
while 30% showed willingness and 10% were not sure. This indicates that when 30%
showed willingness and 10% consumers who were not sure, these groups might 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 to induce
trial, which reinforces the above inference.


Long-term impact


In order to understand ability of the promotions to increase long-term sales, respondents
were asked about continuity of purchase of a brand after the withdrawal of promotion.
Eighty per cent of the respondents indicated that they would not continue. But 20% said
they would. Thus, it could be inferred that promotions in this category (low involvement
products) might encourage trial and brand switching but not long-term loyalty.


Preference of Schemes:


Price off was the most preferred type of scheme. Maximum customers’ ranked price-offs
as number one or two.


Perceived Quality:


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


Perceptions regarding underlying company motivations


On tapping perceptions’ regarding underlying company motivations for sales promotion,
“to increase sales” was ranked highest followed by “to attract switchers” and “to sell
excess stocks”. While providing value to customers” and


“To reinforce company image” were ranked lowest. This indicates that consumers
believed that companies were undertaking such activities only for their own benefit and
not for the benefit of consumers.


Findings from retailer and consumer perception studies, it is evident that there was a
matching of perceptions regarding nature of scheme (price offs as most preferred type of
scheme mentioned by consumers and retailers’ perceptions about consumer preferences).
Since retailers observe consumers in store behavior were frequently and directly, their
perceptions regarding providing consumer behavior are likely to be accurate. Such inputs
from the retailers would be useful to companies.


The retailers had the perception that those schemes, which were announced through mass
media, had better response. This was reinforced by the consumer survey which showed
that recall in case of heavily promoted schemes on TV was found to be very high.


Retailers’ prediction of companies’ motivation for offering sales promotion was matching
with the consumer perception regarding the same. Thus both viewed that companies were
using sales promotion activities mainly to increase short-term sales or encourage
switching or selling excess stock and not really to give value benefit or enhance/reinforce
brand/company image.


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Role of sales promotions in FMCG sector
Trade Oriented Sales Promotion


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


Sales promotion from the retailer’s point of view:


Perceptions on Scheme Preference


It was found that retailer perceived price offs as a better form of sales promotion activity.
Price offs in their opinion had relatively a greater impact compared to any other form of
sales promotion activity like Bonus packs, Premium, Contests etc. Retailers preferred
price offs the most, then bonus pack, premium, contests, in order of importance.


Perceptions about Buying Roles


Retailers viewed that the person who came to the shop (who may be a maid, son,
daughter, daughter-in-law and child) was the decider of a toilet soap brand and not the
Income provider (e.g. head of the family). It could be inferred that visibility of
information about the sales promotion activity at the point of purchase could result into
the purchase of a promoted brand.


Perceptions about their role in decision-making


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Role of sales promotions in FMCG sector
Retailer had relatively very low influence in affecting choice. It could be inferred that
visibility and awareness about the scheme were the critical success factors so that pull
could be created.


Perceptions about Response to Sales Promotion Offers


They believed that younger age-groups were more experimental in nature, amenable to
trying new brands, and sought/looked for or asked whether there were any) sales
promotion schemes running on any toilet soap at the time of purchase.


Perceptions about Communications of Sales Promotion Schemes


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


Variations in Information Flow


Smaller (non-supermarket, small format store) retailers received relatively less support
compared to supermarkets in terms of servicing, margins, and information about sales
promotion activities from the dealers. Many a times small retailers were only informed
verbally about sales promotion schemes by the dealer salesmen during the scheduled
weekly visits.


Dealer-Retailer Dynamics


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


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Role of sales promotions in FMCG sector
Margins


It was found that in sales promotion schemes margins varied from 6 to15% depending of
the size of the retail outlet, bargaining power of a retailer, quantity ordered by him etc.
Mostly margins were linked to size of the volumes that were ordered.


Perceptions about terms and conditions


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


Nature of POP


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


Servicing during duration of Scheme


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


Problem of left-over


A leftover stock at the end of any scheme was required to be sold by the retailers before
they ordered fresh stocks. In case of bonus packs scheme, leftover stock was often
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Role of sales promotions in FMCG sector
dismantled (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 in
adverse brand image.


Gifts for Retailer motivation


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


Perceptions about mass media announcements


Retailers viewed that whenever sales promotion scheme was announced on TV, it created
pull and they were more than willing to stock such brands. For example Medimix and
Dettol contest was not advertised on TV, hence there was very little awareness leading to
unsold stock till 6 months. While Lux Gold Star, which was heavily promoted on T.V., is
recalled even today.


Post Promotion Behavior


Retailers observed that in most cases sales promotion scheme on a brand might
encourage a buyer to switch a brand temporarily but he would revert back to original
brand after promotion.


Handling Problems


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


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Role of sales promotions in FMCG sector
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Role of sales promotions in FMCG sector
Why do Sales promotion schemes affect sales?


There are three mechanisms behind these facts. It is Purchase quantity, Brand switching
and Category expansion.


First, consumer can increase the quantity they buy just because the product is on sale.


Second, consumers are inducing to purchase another brand different from the one they
would have purchased when there is no promotional incentive.


Finally, consumer’s total consumption of the product category is increased by the
promotion. However, in the long term this positive effect may be diluted because a
promotional campaign has no permanent effect in the sales of the firm


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Role of sales promotions in FMCG sector
Sales Promotion Strategy




Sales are the lifeblood of a business, without sales there would be no business in the first
place; therefore it is very important that if a business wants to succeed, it should have a
sales promotion strategy in mind. The primary objective of a sales promotion is to
improve a company’s sales by predicting and modifying your target customer’s
purchasing behavior and patterns.


Sales promotion is very important as it not only helps to boost sales but it also helps a
business to draw new customers while at the same time retaining older ones. There are a
variety of sales promotional strategies that a business can use to increase their sales,
however it is important that we first understand what a sales promotion strategy actually
is and why it is so important.
	


A sales promotion strategy is an activity that is designed to help boost the sales of a
product or service. This can be done through an advertising campaign, public relation
activities, a free sampling campaign, a free gift campaign, a trading stamps campaign,
through demonstrations and exhibitions, through prize giving competitions, through
temporary price cuts, and through door-to-door sales, telemarketing, personal sales
letters, and emails.


The importance of a sales promotion strategy cannot be underestimated. This is because a
sales promotion strategy is important to a business boosting its sales.




When developing a sales promotion strategy for your business, it is important that you
keep the following points in mind.


• Consumer attitudes and buying patterns


• Your brand strategy


• Your competitive strategy


• Your advertising strategy


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Role of sales promotions in FMCG sector
• Other external factors that can influence products availability and pricing.


There are three types of sales promotion strategies:


• A push strategy


• A pull strategy or


• A combination of the two


A Push Strategy:


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


A Pull Strategy:


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


A Combination of Two Strategies:


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Role of sales promotions in FMCG sector
A ‘combination’ sales promotion strategy is just that; it is a combination of a push and a
pull strategy. It focuses both on the distributor as well as the consumers, targeting both
parties directly. It offers consumer incentives side by side with dealer discounts.


The Short term Impact of Promotions:


Let’s have look at the impact of promotions on purchase behavior during the promotional
period i.e. the week or the month when the promotion was being run. The majority of the
empirical studies have focused on the impact of promotions in the short term. The key
findings across the studies 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 of
promoted brand in the short term. Studies have consistently reported high sales effects
and high price elasticity of brands, which are on promotion. The economic rationale for
the promotional response is clear – temporary price cuts increase the value of the product
to the consumer and it leads to immediate action. Sales boost can be quantified on the
basis of brand switching, primary demand expansion and consumer stockpiling during a
promotion.


Sales Promotion leads to brand substitution with the product category:


The sales ‘bump’ during the promotional period into sales due to brand switching
purchase time acceleration and stockpiling. Studies on brand switching have shown that
brand-switching effects within a category are asymmetric such that promotions on higher
quality brands impacts weaker brands disproportionately. During a promotion, higher
quality brands induce a large number of consumers to switch to them as compared to
lower quality brands. One explanation advanced for this finding by researchers is that
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Role of sales promotions in FMCG sector
large share brands have higher brand equity and attract switchers more than low share
brands.


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Role of sales promotions in FMCG sector
Sales Promotion leads to purchase acceleration/stockpiling effects:


In response to a promotion, consumers may buy more quantity of the product category or
buy at an earlier time than usual (purchase acceleration effect). If consumers buy extra
quantity during a promotion or earlier than normal, then they are not in the market to buy
products once the promotion is over. Thus purchase acceleration is demonstrated through


A lengthening of inter purchase times after a promotion. Purchase acceleration was more
likely to be exhibited in increased purchase quantity than in shortened inter purchase
times. Results showed that consumers mostly made up for the large quantity purchased
by waiting longer until purchasing again. Results indicated that heavy users tended to
accelerate purchases more than light users. There was negligible difference in the
acceleration propensities of high versus low-income groups.


Sales Promotion leads to primary demand expansion for a category:


While it was traditionally assumed that consumption rates remain fixed during
and after a promotion, but from this project I came to know that promotions also have a
primary demand expansion effect. When a primary demand expansion occurs, promotion
induced increase in purchase quantities does not significantly extend the time till the next
purchase in the category occurs, thus indicating that there has been an increase in
consumption promotions induced consumers to buy more and consume faster. It is found
that promotion induced inventory temporarily increased consumption rates within the
category e.g. in categories such as bacon, salted snacks, soft drinks and yogurt exhibited
primary demand expansions as a result of promotion while bathroom tissue, coffee,
detergent and paper towels exhibited stockpiling only.


Sales Promotions affect sales in complementary and competitive categories:


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


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Role of sales promotions in FMCG sector
The Long term Impact of Promotions:


Strategies are builds to reap the benefits for longer period of time; it is true in sales
promotion strategies. Let us see impact of promotions effort and study the impact over a
longer time period e.g. 4-6 months or even a few years after a sales promotion campaign.


The result showed that consumer promotions for leading brands of established packaged
products had no after-effects on the brand’s sales or repeat buying loyalty. The extra sales
of a brand while promoted came virtually all from the brand’s existing long-term
customer base for which the experience of buying the promoted brand was nothing new.


It is found that although the short-term effects of promotions are strong; these promotions
rarely exhibit long-term effects. It is observed that each sales component generally lacked
a permanent effect and the effect of promotion was short lived and increase in promotions
affected consumers’ stockpiling decisions in the long run. They found that the combined
short and long-term elasticity of promotions was zero. The stockpiling induced by a
promotion was essentially offset by reduced demand in the long term. Thus increased
sales were more a result of sales borrowed from the future than increased consumption


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Role of sales promotions in FMCG sector
SWOT Analysis of FMCG Sector


!"#$%&"'()*


• Well-established distribution network extending to rural areas.


• Strong brands in the FMCG sector.


• Low cost operations.


+$,-%$(($()*


• Low exports levels.


• Small-scale sector reservations limit ability to invest in technology and achieve
economies of scale.


• Several "me-too’’ products.


.//0#"1%2"2$()*


• Large domestic market.


• Export potential.


• Increasing income levels will result in faster revenue growth.


3'#$,"()*


• Imports.


• Tax and regulatory structure.


• Slowdown in rural demand.


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Role of sales promotions in FMCG sector
DATAANALYSIS


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Role of sales promotions in FMCG sector
Consumers


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Role of sales promotions in FMCG sector
Q1. Which brand of Soap / Detergent do you use?




Interpretation:


Bathing –soaps Respondents
Lux 41
Hamm 3
Lifebuoy 14
Nima 8
Others 34
Bathing soaps
0
10
20
30
40
50
Respondents 41 3 14 8 34
Lux Hamam Lifebuoy Nima Others
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Role of sales promotions in FMCG sector
	


The above question has been formed to know the soaps and detergents at the top of the
mind of the customers. It shows those consumers’ purchase and use of that particular
brand. It will help to the company to know the market scenario and the major brands in
the market.


Form the above result it is clear that out of 100 customers more than 40 are consumers
are having the same brand as the image in their mind, whereas others category is also
showing the higher graph than these 3 major players (Hamam, Lifebuoy, Nima).


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Role of sales promotions in FMCG sector


	
	


Interpretation:


Detergent powder Respondents
Nirma supper 19
Wheel 14
Surf 35
Ariel 18
Others 14
Detergent Powder
0
5
10
15
20
25
30
35
40
Respondents 19 14 35 18 14
Nirma sup Wheel Surf Ariel Othres
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Role of sales promotions in FMCG sector
Form the above result it is clear that out of 100 customers 35 are purchasing the same
brand of detergent, whereas all others are on same level.


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Role of sales promotions in FMCG sector
Q2. Do you always buy the same brand of Soap / Detergent?






Interpretation:


The objective behind the formation of this question is to know the level of brand loyalty
of the consumers towards the brands of soaps available in the market. The above figure
Particulars Respondents
Yes 56
No 44
Brand loyal
0
10
20
30
40
50
60
Respondents 56 44
Yes No
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Role of sales promotions in FMCG sector
shows that on 56% of the respondents are loyal to their brands of detergent/soap. FMCG
are such a market where the level of loyalty remains low and this is because of many
reasons.


Q3. Which factors do you normally consider while purchasing a
particular brand of Soap / Detergents?


Factors
Bathing
soap Det.powder
Fragrance 19 18
Quality 33 36
Company image 16 13
Price 23 19
Packaging 6 11
Others 3 3
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Role of sales promotions in FMCG sector


Interpretation:


The objective behind this question is to know the effect of influencing factors in the
purchase decision of the soaps and detergent powders. It mainly contains the factors like,
quality which players an important role in the purchase decision of the soaps and
detergents both.


If we look at the graph of the soaps and detergent it shows quality as the most influencing
factors in the purchase decision while price is also an important for purchase decision.


Factors affecting purchase behavior
0
10
20
30
40
Bathing soap 19 33 16 23 6 3
Det.powder 18 36 13 19 11 3
Fragrance Quality
Company
image
Price Packaging Others
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Role of sales promotions in FMCG sector
Q4. Do you consider promotional schemes while purchasing a particular
brand of Soap / Detergent?


H0: Promotional schemes have a significant effect on the purchase of brand.


H1: Promotional schemes do not have an effect on the purchase of brand.




Particulars Respondents
Yes 78
No 22
Effect of schemes purchase behavior
0
20
40
60
80
100
Respondents 78 22
Yes No
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Role of sales promotions in FMCG sector
Interpretation:


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


Here H0 is accepted as the graph shows that 78 out of 100 consumers are looking for
such schemes before they make purchase.


Q5. Which of the following promotional schemes you have come across
so far?


Promotional schemes Respondents
Coupons 16
price off 84
Freebies 24
scratch cards 12
lucky draw 9
Bundling 31
extra qty. 44
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Role of sales promotions in FMCG sector


Interpretation:


The above stated question clearly states the awareness of promotional schemes offered in
the market by the marketers to attract more and more consumers.


The results show that price off and extra quantity is the two main offers/schemes which
consumers have came across at the time of purchase. It will help the manufacturers and
marketers too how too launch their new products in the market with which schemes.


Familiarity of promotional Schemes
0
20
40
60
80
100
Respondents 16 84 24 12 9 31 44
Coupons price off Freebies
scratch
cards
lucky draw Bundling extra qty.
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Role of sales promotions in FMCG sector
Q6. Which medium do you feel is suitable to promote the various
promotional schemes?




Source Respondents
Radio 11
TV 69
Newspaper 43
Hoarding 15
Others 12
Mediums to promote the promotional schemes
0
20
40
60
80
Respondents 11 69 43 15 12
Radio TV News.ppr Hoarding Others
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Role of sales promotions in FMCG sector
Interpretation:


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


The above result shows TV as the best media to market the product, which will cover
majority of the viewer ship. On the second place it shows newspapers as the media to
promote the product in the market.


Q7. Is there any existing scheme on the Soap / Detergent you are
currently using?


Particulars Respondents
Yes 58
No 42
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Role of sales promotions in FMCG sector


Interpretation:


The answer of the respondents give idea about the awareness of the promotional schemes
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 idea about
the promotional schemes running into the market.


It shows that people are not much aware of the schemes, which continue in the market it
may be because of the present stock of the product at their place.


Existing scheme on the Soap / Detergent
0
10
20
30
40
50
60
70
Respondents 58 42
Yes No
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Role of sales promotions in FMCG sector


Q8. If yes, please specify?




Interpretation:


This question supports the above question. It enlists the answers of those customers who
are aware of the present schemes offered in the market and also those schemes, which are
more demanded in the market.


Particulars Respondents
3+1/Other
Free 36
Discount 22
No idea 6
No answer 36
0
5
10
15
20
25
30
35
40
Series1 36 22 6 36
3+1/Other Free Discount No idea No answer
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Role of sales promotions in FMCG sector
The result shows that 1+1 or 2+1 or other free schemes are more demanded and more
aware schemes in the market.


So manufacturers may go for the same at the time of launching their product.




Q9. If you get an attractive promotional offer in the product other then
of your choice will you switch over?


Particulars Respondents
Yes 73
No 27
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Role of sales promotions in FMCG sector


Interpretation:


It shows the level of brand loyalty among the consumers. The result clearly shows that
out of 100, 73 people are ready to switch over to another brand if they find better
promotional schemes which suits their budget means more qyt + less cost + quality.


Combination of all these schemes will run better in the market.


Switching behavior
0
10
20
30
40
50
60
70
80
Respondents 73 27
Yes No
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Role of sales promotions in FMCG sector
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
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Role of sales promotions in FMCG sector


Interpretation:


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


Reason
0
10
20
30
40
Respondents 16 17 2 5 22 2 36
Cost+qty Quality Satisfaction Brand loyal
More
Benefit/bud
Season
change
No answer
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Role of sales promotions in FMCG sector
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Role of sales promotions in FMCG sector
Q11. Give suggestions about futuristic promotional schemes?


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


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Role of sales promotions in FMCG sector
Retailers


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Role of sales promotions in FMCG sector
Q1. Since how long are you in this business?






Interpretation:


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


Particulars Respondents
1-5 Years 24
5-10 Years 27
More than 10 years 49
0
10
20
30
40
50
60
Series1 24 27 49
1-5 Years 5-10 Years More than 10 years
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Role of sales promotions in FMCG sector
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Role of sales promotions in FMCG sector
Q2. Name the Soap / Detergent (Company) you stock for.




Interpretation:


Companies Respondents
Nirma 96
HUL 100
P&G 90
Godrej 94
Others 68
Soap / Detergent in stock
0
20
40
60
80
100
120
Series1 96 100 90 94 68
Nirma HUL P&G Godrej Others
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Role of sales promotions in FMCG sector
It gives idea about the capacity of the retailers to stock the goods and also the variety of
the products they are stocking. It will also make clear the demand of the goods in their
stores and the selling of the product in market. Most of the retailer stocks all types of
soap and detergent.


Q3. 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 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
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Role of sales promotions in FMCG sector


Bathing Soap
0
10
20
30
40
50
60
70
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
1 2 3 4 5 6
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Role of sales promotions in FMCG sector
Interpretation:


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


In the above result people are more quality and price oriented. On the other hand people
are also conscious about the company image. Because sometimes the consumer
remember that name of the product by the company name and also from the past
performance of that company. Fragrance and packaging are not influencing factor as per
the respondents.


Factors 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 63
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Role of sales promotions in FMCG sector


Interpretation:


Detergent
0
10
20
30
40
50
60
70
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 63
1 2 3 4 5 6
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Role of sales promotions in FMCG sector
It gives an idea about the priority the influencing factors too the consumers and also the
weight age of that factor over other factors.


In the above result people are more quality and price oriented. On the other hand people
are also conscious about the company image. Because sometimes the consumer
remembers that name of the product by the company name and also from the past
performance of that company. Fragrance and packaging are also play important role for
purchasing detergent powder.


Q4. Do you suggest customers to purchase a certain brand?


Particular Respondents
Yes 33
No 67
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Role of sales promotions in FMCG sector


Interpretation:


This could be a very help question to understand the role of retailers in the purchase
decision.


In above graph 67% of retailer are not suggest to purchase particular brand because of
personal relation or that customer are brand loyal. While 33% of the retailer are
suggesting the consumers to buy particular brand. There could be many reasons like,
extra margin, relations with consumers and quality of the products which retailer may get
the benefit of the same.


Suggestion
0
10
20
30
40
50
60
70
80
Series1 33 67
Yes No
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Role of sales promotions in FMCG sector
Q5. If Yes why?


Particular Respondents
High margin 9
Quality 17
Relationship 7
No reason 67
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Role of sales promotions in FMCG sector


Interpretation:


It gives idea about the reasons why retailers suggest the consumers to buy particular
brand.


In above graph and table it is clear that for margin and of better relations with consumers
and too provide quality product to consumers they suggest consumers too bye particular
brand. For the company it may be helpful to target such retailers to sell their product in
the market easily.


If yes
0
10
20
30
40
50
60
70
80
Respondents 9 17 7 67
High margin Quality Relationship No reason
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Role of sales promotions in FMCG sector
Q6. Do customers look for various schemes in the product?




Particular Respondents
Yes 92
No 8
Customers look for various schemes
0
20
40
60
80
100
Respondents 92 8
Yes No
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Role of sales promotions in FMCG sector
Interpretation:


This gives a real helpful data for checking the effect of sales promotions in the market
and how seriously consumers follow the promotions before they go for purchase
particular brand.


The above result shows that only 8 out 0f 100 didn’t go for the promotion otherwise all
are looking for any type of the promotions on the product.


Q7. If yes which schemes?


Promotional
Schemes
Respondents
Coupons 11
Price Off 82
Freebies 35
Scratch Cards 2
Lucky Draws 19
Bundling Offer 65
Extra Quantity 79
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Role of sales promotions in FMCG sector


Interpretation:


The above stated results show the demand of various types of promotional schemes in the
market by the consumers. The consumers in the market are demanding almost all types of
schemes but there are three major schemes, which consumers generally look at the time
of purchase or before that.


Price off, product bundling and extra quantity are more demanded by the consumers over
others schemes.




Which schemes
0
20
40
60
80
100
Respondents 11 82 35 2 19 65 79
Coupons Price Off Freebies
Scratch
Cards
Lucky
Draws
Bundling
Offer
Extra
Quantity
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Role of sales promotions in FMCG sector
Q8. Which Trade Promotions do various companies offer?


H0: Effect of trade promotions for all four brands is similar.


H1: Effect of trade promotions for all four brands is not similar.


NIRMA
Promotions Respondents
Extra Margin 46
Extra Units 34
credit facility 55
Gifts 24
promo. Exp. 8
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Interpretation:


From the above graph shows the trade promotions offered by the NIRMA Ltd to the
retailers to attract them towards stocking their goods and also stop them switching them
too other major players in the market.


NIRMA is mainly offering credit facility, which is offered by all major players it may
differ in the time limit of the credit. It is also providing extra margin, and units with
occasional gift with their schemes.


Trade Promotions by Nirma
0
10
20
30
40
50
60
Series1 46 34 55 24 8
Extra Margin Extra Units credit facility gifts promo. Exp.
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Role of sales promotions in FMCG sector


Interpretation:


HUL
Promotions Respondents
Extra Margin 47
Extra Units 34
Credit facility 58
Gifts 25
Promo. Exp. 22
Trade Promotions by HUL
0
10
20
30
40
50
60
70
Series1 47 34 58 25 22
Extra Margin Extra Units Credit facility Gifts Promo. Exp.
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Role of sales promotions in FMCG sector
The advantage of HLL over NIRMA is that it bare promotional expenses which NIRMA
is not doing. It attracts more consumers through such promotions, such as display of the
product, banners etc.


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


P & G
Promotions Respondents
Extra Margin 40
Extra Units 33
Credit facility 55
Gifts 20
Promo. Exp. 12
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Role of sales promotions in FMCG sector


Interpretation:


P&G is also a big player in the FMCG market. It is also providing all the facilities, which
others are providing to retailers.


Trade Promotions by P&G
0
10
20
30
40
50
60
Series1 40 33 55 20 12
Extra Margin Extra Units Credit facility Gifts Promo. Exp.
ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018
	
	


81
Role of sales promotions in FMCG sector
GODREJ
Promotions Respondents
Extra Margin 46
Extra Units 32
Credit facility 57
Gifts 19
Promo. Exp. 18
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82
Role of sales promotions in FMCG sector


Interpretation:


Godrej is a big player in the FMCG market. It is also providing all the facilities, which
others are providing to retailers. But it is lacking in bearing expenses, which HUL is
providing, to maximum number of retailers.


Trade Promotions by Godrej
0
10
20
30
40
50
60
Series1 46 32 57 19 18
Extra Margin Extra Units Credit facility Gifts Promo. Exp.
ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018
	
	


83
Role of sales promotions in FMCG sector
OTHERS
Promotions Respondents
Extra Margin 30
Extra Units 18
Credit facility 38
Gifts 15
Promo. Exp. 7
ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018
	
	


84
Role of sales promotions in FMCG sector


Interpretation:


Others include local players, as well as we established players like, wipro but their
products are not in demand like other players but still they are providing all the facilities
to retailers to attract towards stocking their products.


Trade Promotions by Others
0
5
10
15
20
25
30
35
40
Series1 30 18 38 15 7
Extra Margin Extra Units Credit facility Gifts Promo. Exp.
ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018
	
	


85
Role of sales promotions in FMCG sector
Anova:	Single	Factor


ANOVA


All 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 effect of
GODREJ NIRMA HUL P&G
Extra	Margin 46 46 47 40
Extra	Units 32 34 34 33
Credit	
facility 57 55 58 55
Gi
ft
s 19 24 25 20
Promo.	Exp. 18 8 22 12
34.4 33.4 37.2 32
SUMMARY
Groups Count Sum Average Variance
Column 1 5 172 34.4 289.3
Column 2 5 167 33.4 339.8
Column 3 5 186 37.2 229.7
Column 4 5 160 32 284.5
S o u r c e o f
Variation
SS df MS F P-value F crit
B e t w e e n
Groups
72.55 3 24.1833
3
0.08460
9
0.96745
7
3.23887
2
Within Groups 4573.2 16 285.825
Total 4645.7
5
19
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86
Role of sales promotions in FMCG sector
trade promotion on various brands and are similar too. As p> 0.05, it is the evidence that
the null hypothesis is accepted


Q9 Give reasons for not stocking a particular brand.


Retailer stocks all types of soap and detergent because of competition.


Q10 Any suggestions.


Retailer suggested that packaging should be further improved and used as promotional
tool, to encourage sales during certain periods the company should provide price off or
extra quantity because that influences directly to the consumer.


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87
Role of sales promotions in FMCG sector
Findings of the report:


Sales Promotion, a short-term inducement, offered to a consumer or trade has gained
momentum as a promotional tool world over. It represents nearly three fourth of the
marketing budget at most consumer product companies. Sales promotions can enhance
consumers’ self-perception of being “smart” or a “good” shopper


• FMCG 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.


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Role of sales promotions in FMCG sector
• Consumer remember that name of the product by the company name and also
from the past performance of that company


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


• Retailers are not suggest to purchase particular brand because of personal relation
or that customer are brand loyal


• Margin and of better relations with consumers and too provide quality product to
consumers they suggest consumers too bye particular brand.


• Customers are looking for any type of the promotions on the product before them
going to purchase.


• Price off, product bundling and extra quantity are more demanded by the
consumers over others schemes.


• NIRMA is mainly offering credit facility, which is offered by all major players it
may differ in the time limit of the credit.


• HUL attracts more consumers through such promotions, such as display of the
product, banners etc.


ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018
	
	


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Role of sales promotions in FMCG sector
Recommendation:


	


The findings of the empirical study indicate that unless the brand to be promoted is in the
consideration set of the consumer, sales promotion by itself is unlikely to have any major
impact. Clearly this shows that managers need to invest into brand building exercise so
that his/her brand appears in the consideration set of the target consumers. Only after this
should he spend time, money and energy on sales promotion activities.


Sales promotion should not be used in isolation but need to be integrated with other tools
and in line with the overall positioning of the brand. Also the importance of the role of
mass media came out clearly in the study.


Companies need to create sufficient awareness about sales promotion schemes through
mass media in order to create awareness. FMCG products are low involvement products
characterized by switching behavior. Also the person going to the shop for the purchase
of soap is the final decision maker of the brand. Hence it is essential that companies need
to design attractive, striking, visible POPs for scheme announcements.


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 have to be appealing and high for the
target consumers.


Repetitive use of the same premium for a prolonged period may have negative effect on
the loyal customers. When the company is giving its own product free as premium, it
needs to ensure the quality of the product from it as it is likely to jeopardize the image of
both its products.


The findings exhibited that both the retailers and consumers perceived that sales
promotion activities carried out by the companies for increasing sales in short term and
ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018
	
	


90
Role of sales promotions in FMCG sector
clearing excess stocks. What it implies is that companies need to use sales promotion
synergistically and communicate so that they provide value to the target audience and
enhance brand quality/image perceptions.


Companies need to systematize information flow regarding sales promotion activities
particularly at dealer and retailer level. The companies should consider ensuring proper
information flow and devising checks and measures to reduce misappropriations and
implementation flows critical aspects for the success of sales promotion activities. As
retailing is fragmented, direct reach by companies is next to impossible. Through dealers
and proper feedback mechanism, companies keep in touch with the market.


From the study it was found that smaller retailers felt neglected and not enthused to
implement the schemes, particularly when additional handling, stocking, accounting was
required on the part of a retailer without compensatory margins. It can be seen that the
retailer and consumer perceptions matched with respect to preferences of schemes,
underlying motivations and role of mass media. This implies that the retailer would be a
rich source of information about the consumer and the likely response to sales promotion
activities.


Developing a system to tap such responses from time to time both at retailer and
consumer level would be helpful for planning future sales promotion activities. In order
to build trust and commitment companies should tap preferences, perceptions of retailers
as well as consumers.


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91
Role of sales promotions in FMCG sector
Limitations of the study


• We considered Gurgaon 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 language
problem and also problem of time and lack of positive behavior.


• Respondent may give biased answer due to some lack of information about other
brands.


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


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92
Role of sales promotions in FMCG sector
Emerging Trends


So far as FMCG market is concern there is new trend is emerging known as Joint sales
promotion. Actually it is old concept but it was more prevailing in durable products now
it is coming intro non-durable goods also. When any sales promotion scheme either for
trade or consumer is announced by more than one company and /or more than one brand
of the same company, it is referred as joint sales promotion or horizontal co-operative
sales promotion or cross promotion or umbrella sales promotion.


Classification of joint sales promotion:


• Use complementarily due to natural use


• New use catering complementary relationships


• Commonality of need due to use 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


ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018
	
	


93
Role of sales promotions in FMCG sector
Conclusion of the Survey


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


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


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


With the Increasing number of supermarket, the branded packaged goods work as silent
sales person. So in such stores, sales promotion plays a more effective role in stimulating
consumers’ demands.


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94
Role of sales promotions in FMCG sector
One of the very important facts we came to know from this project is that sale of goods
which contain large quantity and having big packaging e.g. detergent are stagnating
because consumer prefer to buy small pack goods, the reasons are: small pack goods
reduce risk of bad quality, It had low cost or say price, and last but important factor i.e.
mentality to purchase just to try first. Sales of small pack goods are quite high, but from
the company’s point of view small pack goods are less profitable compare to large pack
goods.


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


Bibliography


BOOKS


➢ 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


ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018
	
	


95
Role of sales promotions in FMCG sector
Annexure


ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018
	
	


96
Role of sales promotions in FMCG sector
Questionnaire


Customers


I am a student of MBA studying in ANSAL UNIVERSITY, GURGAON and carrying out a
survey for our academic project to “Role of sales promotions in FMCG”. So please fill this
questionnaire. Your identity would not be revealed and information will only be used for
academic purpose.


Q1. Which brand of Soap / Detergent do you use?


Q2. Do you always buy the same brand of Soap / Detergent?


Q3. Which factors do you normally consider while purchasing a particular brand of
Soap / Detergents?


Detergent powder Respondent
Nirma supper
Wheel
Surf
Ariel
Others
Bathing –soaps Respondent
Lux
Hamam
Lifebuoy
Nirma
Others
Particulars Respondent
Yes
No
Factors
Bathing
soap Det.powder
ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018
	
	


97
Role of sales promotions in FMCG sector
Q4. Do you consider promotional schemes while purchasing a particular brand of Soap /
Detergent?


Q5. Which of the following promotional schemes you have come across so far?


Q6. Which medium do you feel is suitable to promote the various promotional schemes?


Fragrance
Quality
Company image
Price
Packaging
Others
Particulars Respondent
Yes
No
Promotional
schemes Respondent
Coupons
Price off
Freebies
Scratch cards
Lucky draw
Bundling
Extra qty.
Source Respondent
Radio
TV
Newspaper
Hoarding
Others
ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018
	
	


98
Role of sales promotions in FMCG sector
Q7. Is there any existing scheme on the Soap / Detergent you are currently using?


Q8. If yes, please specify?


Q9. If you get an attractive promotional offer in the product other than of your choice will
you switch over?


Q10. Give reason for the same?


Particulars Respondent
Yes
No
Particulars Respondent
3+1/Other
Free
Discount
No idea
No answer
Particulars Respondent
Yes
No
Particulars Respondent
Cost + Quantity
Quality
Satisfaction
Brand loyal
More benefit/budget
Season change
ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018
	
	


99
Role of sales promotions in FMCG sector
Q11. Give suggestions about futuristic promotional schemes.


Retailers


I am a student of MBA studying in ANSAL UNIVERSITY, GURGAON and carrying out a
survey for our academic project “Role of sales promotions in FMCG”. So please fill this
questionnaire. Your identity would not be revealed and information will only be used for
academic purpose.


Q1. Since how long are you in this business?


Q2. Name the Soap / Detergent (Company) you stock for.


Q3. Rank the following factors that customers look for in the purchase of Soap /
Detergent. (Rank from 1 to 6)


No answer
Particulars Respondent
1-5 Years
5-10 Years
More than 10 years
Companies Respondent
Nirma
HUL
P&G
Godrej
Others
Factors 1 2 3 4 5 6
Fragrance
Quality
Company
Image
ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018
	
	


100
Role of sales promotions in FMCG sector
Q4. Do you suggest customers to purchase a certain brand?


Q5. If Yes why?


Price
Packaging
Others
Particular Respondent
Yes
No
Particular Respondent
High margin
Quality
Relationship
No reason
ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018
	
	


101
Role of sales promotions in FMCG sector
Q6. Do customers look for various schemes in the product?


Q7. If yes which schemes?


Q8. Which Trade Promotions do various companies offer?


Particular Respondent
Yes
No
Promotional
Schemes
Respondent
Coupons
Price Off
Freebies
Scratch Cards
Lucky Draws
Bundling Offer
Extra Quantity
NIRMA
Promotions Respondent
Extra Margin
Extra Units
Credit facility
Gifts
Promo. Exp.
HUL
Promotions Respondent
Extra Margin
Extra Units
Credit facility
Gifts
ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018
	
	


102
Role of sales promotions in FMCG sector
	












Promo. Exp.
P & G
Promotions Respondent
Extra Margin
Extra Units
Credit facility
Gifts
Promo. Exp.
GODREJ
Promotions Respondent
Extra Margin
Extra Units
Credit facility
Gifts
Promo. Exp.
OTHERS
Promotions Respondent
Extra Margin
Extra Units
Credit facility
ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018
	
	


103
Role of sales promotions in FMCG sector
Q9 Give reasons for not stocking a particular brand.


Q10 Any suggestions?
Gifts
Promo. Exp.
ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018
	
	


104

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“ROLE OF SALES PROMOTION ON FMCG”

  • 1. A DISSERTATION PROJECT REPORT ON “ROLE OF SALES PROMOTION ON FMCG” A Dissertation Project report submitted in Partial Fulfillment of award of MBA Degree ANSAL SCHOOL OF MANAGEMENT ANSAL UNIVERSITY GURGAON SUBMITTED TO SUBMITTED BY DR. KIRTI DUTTA Pooja Deswal 160MBAGEN 

  • 2. Role of sales promotions in FMCG sector This is to certify that Mr. the student of MBA 2nd year of Ansal University, Gurgaon have completed their Dissertation Project “Role of sales promotions in FMCG” in the year 2016-2018 in partial fulfillment of Ansal University requirements for the award of the degree of Master of Business Administration. Dissertation Project Guide Dr.Kirti Dutta Date: CERTIFICATE ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 2
  • 3. Role of sales promotions in FMCG sector PREFACE In this age of globalization hyper competition has become a regular feature. Today the markets are no less then battlegrounds and one has to strive very hard for survival and growth. Due to very rapid industrialization all over the world the demand for the managerial personnel and the administrative personnel has increased. The perfect study of Management involves both the theoretical as well as practical aspects. To survive in this highly competitive market “Practical Knowledge” is as relevant as the Theoretical. The significance of MBA Degree is that the Theoretical aspects, which a student learns throughout the year in the class sessions, can be practically applied through different projects, which one undertakes. Keeping in tune with this doctrine, we have tried to apply theoretical aspects through out the project, which we learned under the course of management. In this project more emphasize given to the various tools of sales promotion and its impact on consumers buying decisions. Actually in recent trend to some extent this technique also become victim of clutter, even though generating innovative and more attractive tools to lure the customers can eliminate it. Now a day most of the FMCG companies considering sales promotion as an important part of their marketing strategy. From the analysis of survey it becomes clear that consumers do response to the sales promotion campaign, but there are customers who strongly prefer to stick to brand name. ANSAL SCHOOL OF MANAGEMENT YOGESH SINGLA ANSAL UNIVERSITY ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 3
  • 4. Role of sales promotions in FMCG sector GURGAON . ACKNOWLEDGEMENT Every study requires a guidance of someone who is working in that field. Firstly we would like to thank the institution for providing an opportunity of preparing a Grand Project Report and allowing us to use the resources of the institution during this project. We are extremely thankful to our Project Guide, Dr. Kirti Dutta of Ansal University for their precious guidance regarding the preparation of the Project Report. Their guidance has proved to be useful and without them, the preparation of this report might not have been possible. We are also thankful to the other faculty members of Ansal University for extending their valuable support for this project. We also extend our sincere thanks to the Respondents, who helped us during the course of our project and for their gracious attitude. We would like to take this opportunity to extend our warm thoughts to those who helped me in making this project a wonderful experience. Last but not the least; we would also like to thank our family for their support and encouragement. ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 4
  • 5. Role of sales promotions in FMCG sector ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 5
  • 6. Role of sales promotions in FMCG sector Executive Summary As a part of our study curriculum it is necessary to conduct a Dissertation project. It provides us an opportunity to understand the particular topic in depth and which leads to through to that topic. My topic for the Dissertation project is titled as “Study of consumer oriented sales promotion in FMCG sector” in which emphasis given to the effect of sales promotion on buying habits of consumers. To start with we will give brief information regarding FMCG sector then moving to the main topic we will explain what is topic is all about. Promotion is one of the pillars of marketing mix and same way sales promotion is also one of the elements of promotion. With respect to consumer oriented sales promotion there are certain theories narrated as operant conditioning and projective theory. Based on secondary source certain theoretical aspects are also included as a part of study. Then after concentration is given to the primary research. It includes the analysis and results of survey, which were focuses on consumer’s behavior towards sales promotion campaign. The survey was conducted with the help of structured questionnaire. At last conclusion of report, findings and suggestions was given based on study of secondary source as well as primary research. ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 6
  • 7. Role of sales promotions in FMCG sector INDEX Sr. No. TOPICS Page No. 1. Research Methodology of the study 6 2. Introduction 8 3. Introduction to the topic 10 4. Sales promotion strategies 24 5. SWOT Analysis 29 6. Data Analysis of the survey 30 7. Findings of the report 61 8. Recommendations 63 9. Limitations 65 10. Emerging Trends 66 11. Conclusion 67 12. Bibliography 68 13. Annexure: Questionnaire 69 ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 7
  • 8. Role of sales promotions in FMCG sector ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 8
  • 9. Role of sales promotions in FMCG sector RESEARCH METHODOLOGY 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 detergent Product categories under study DETERGENTS: Washing Powder for Clothes TOILETERIES Soaps Research Design Research 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. (b) Secondary Data Collection method: ➢ Reference books. ➢ Internet. ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 9
  • 10. Role of sales promotions in FMCG sector ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 10
  • 11. Role of sales promotions in FMCG sector Sampling Detail 1. Target population: The population for this research study consists of the residence of Gurgaon. 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. ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 11
  • 12. Role of sales promotions in FMCG sector Introduction FMCG Concept and Definition: The term FMCG (fast moving consumer goods), although popular and frequently used does not have a standard definition and is generally used in India to refer to products of everyday use. Conceptually, however, the term refers to relatively fast moving items that are used directly by the consumer. Thus, a significant gap exists between the general use and the conceptual meaning of the term FMCG. Further, difficulties crop up when attempts to devise a definition for FMCG. The problem arises because the concept has a retail orientation and distinguishes between consumer products on the basis of how quickly they move at the retailer’s shelves. The moot question therefore, is what industry turnaround threshold should be for the item to qualify as an FMCG. Should the 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 population segments. Many low- income households are forced to buy certain products more frequently because of lack of liquidity and storage space while relatively high-income households buy the same products more infrequently. Similarly, the purchase cycle also tends to vary because of cultural factors. Most Indians, typically, prefer fresh food articles and therefore to buy relatively small quantities more frequently. This is in sharp contrast with what happens in most western countries, where the practice of buying and socking foods for relatively longer period is more prevalent. Thus, should the inventory turnaround threshold be universal, or should it allow for income, cultural and behavioral nuances? ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 12
  • 13. Role of sales promotions in FMCG sector Characteristics of FMCG Products: • Individual items are of small value. But all FMCG products put together account for a significant part of the consumer's budget. • The consumer keeps limited inventory of these products and prefers to purchase them frequently, as and when required. Many of these products are perishable. • The consumer spends little time on the purchase decision. Rarely does he/she look for technical specifications (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. ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 13
  • 14. Role of sales promotions in FMCG sector Introduction to the topic Introduction: The importance of consumer sales promotion in the marketing mix of the fast moving consumer goods (FMCG) category throughout the world has increased. Companies spend considerable time in planning such activities. However, in order to enhance the effectiveness of these activities, manufacturers should understand consumer and retailer interpretations of their promotional activities. The study here pertains to consumer’s perceptions regarding sales promotion. Some past researches have 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, added value, increased quality and convenience as well as hedonic benefits such as entertainment, 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 strategies are built on the basis of these criteria. Promotion is one of the important elements of marketing mix. There are so many elements of promotion such as … Advertising Direct Marketing Public Relations ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 14
  • 15. Role of sales promotions in FMCG sector Sales Promotion Traditionally, marketer to increase sales in the short term has used sales Promotions. However, in the last few decades this communication tool has evolved and now is considered from a strategic point of view. For this reason, it is necessary to realize new studies in this area and study how consumers evaluate sales promotions. Sales promotions have grown in both importance and frequency over the past few decades. Although an accurate estimate for total sales promotions expenditures does not exist, we can be sure that the trend is up. Sales promotion serves three essential roles: It informs, persuades and reminds prospective customers about a company and its products. Even the most useful product or brand will be a failure if no one knows that it is available. As we know, channels of distribution take more time in creating awareness because a product has to pass through many hands between a producer and consumers. Therefore, a producer has to inform channel members as well as ultimate consumers about the attributes and availability of his products. The second purpose of promotion is persuasion. The cutthroat competition among different products puts tremendous pressure on their manufacturers and they are compelled to undertake sales promotion activities. The third purpose of promotion is reminding consumers about products availability and its potential to satisfy their needs. From these elements Sales Promotion is the element, which is in the focus of this project. Further Sales Promotion is quite broad term it includes … Consumer Oriented Sales Promotion Trade Oriented Sales Promotion ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 15
  • 16. Role of sales promotions in FMCG sector ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 16
  • 17. Role of sales promotions in FMCG sector Consumer Oriented Sales Promotion Consumer Oriented Sales Promotion is the main topic of this project. Here emphasize is given to motivate consumer to increase sales. Consumer Oriented Sales Promotion includes Sampling, Couponing, Premiums, Contest, 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 of incentive tools, mostly short-term designed to stimulate quicker and/or greater purchase of particular products/services by consumers or the trade.” Roger Strang has given a more simplistic definition i.e. “sales promotions are short-term incentives to encourage purchase or sales of a product or service.” Hence, any forms of incentives (price cut or value added nature) offered for short period either to trade or consumers are considered as sales promotion activities. Marketer’s uses consumer oriented sales promotion tools for the following reasons: • To increase short term sales • To induce trial • To reduce inventory • To establish a brand name • To make cross selling • To cope up with competition • To avoid advertising clutter ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 17
  • 18. Role of sales promotions in FMCG sector Tools of Consumer Oriented Sales Promotion: There are so many tools or technique available to the marketers for achieving objective of sales promotion. These tools should be used considering all other factors affecting such as cost, time, competitors, availability of goods etc. These tools are as under… 1. Coupons 2. Price-Off 3. Freebies 4. Scratch Cards 5. Lucky Draws 6. Bundling Offer 7. Extra Quantity Let’s have look at each tool… 1. Coupons: Coupon is the oldest and most widely used way of sales promotion. Coupons have been used since 1895. Packaged goods mostly use it. It is worthwhile to use coupon as a promotion tool because data shows that market for packaged goods increased from 16 billion in 1968 to 310 billion in 1994. To boost up the sales not only manufacturer but retailers personally can also used. A coupon leads to price reductions so as to encourage price sensitive customers. Non users can try a product which may leads to regular sales. 2. Price-off: ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 18
  • 19. Role of sales promotions in FMCG sector A price-off is simply a reduction in the price of the product to increase sales and is very often used when introduction a new product. A reduction in price always increases sales but the use of this technique should be carefully considered in the current market situation. Price-off is the most preferred sales promotion technique because consumers response very positively to this scheme. Not only that but it also cause large increase in sales volume. Price-off reductions are typically offered tight on the package through specially marked price packs. E.g. Krack Jack offers 30% Price-off. 3. Freebies Freebies are a popular form of modern marketing and are some of the best things about the Internet. The definition of freebies is products or services given away for free at no cost to the consumer. Well that’s the definition we came up with. I am a bargain freebie shopper, 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 is too good to be true. Often it’s in the pursuit of more customers or a larger fan base and it often works. 4. Scratch Cards A 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 of cardboard, where one or more areas contain concealed information: they are covered by a substance that cannot be seen through, but can be scratched off. 5. Bundling Offers ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 19
  • 20. Role of sales promotions in FMCG sector Product bundling is a marketing strategy that involves offering several products for sale as one combined product. This strategy is very common in the software business (for example: bundle a word processor, a spreadsheet, and a database into a single office suite), in the cable television industry (for example, basic cable in the United States generally offers many channels at one price), and in the fast food industry in which multiple items are combined into a complete meal. A bundle of products is sometimes referred to as a package deal or a compilation or an anthology. Factors Influencing Consumer Oriented sales promotion: Mainly four factors should be taken into account while determining the sales promotion program. > Target market > Nature of product > Stage of product life cycle > Budget available for promotion 1. Target Market: While doing sales promotion, marketer must know who their target market is; otherwise there is no use of all effort because it leads to nowhere. A target market can be in any of the stages of buying hierarchy i.e. awareness, knowledge, liking, preferences, conviction and purchase. Each stage defines a possible goal of promotion. 2. Nature of the product: ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 20
  • 21. Role of sales promotions in FMCG sector There are various product attributes, which influence sales promotional strategy. When the unit price is low the manufacturer as well as the customer has low risk but he can get the benefit of mass marketing. Therefore, mass marketing requires mass sales promotion 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 new product introduced, prospective buyers must be informed about its existence and its benefits and middlemen must be convinced to stock it. Later, if a product becomes successful, competition intensifies and more emphasis is placed on sales promotion to increase its sales. 4. Budget Available for Promotion: The funds available for promotion are the ultimate determinant of the promotional programme. A business with ample funds can make more effective use of sales promotion programme than a firm with limited financial resources. The budget for sales promotion can be prepared by the following methods… Percentage of Sales Fixed funds available for sales promotion Following the competition, and Budgeting by objective. ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 21
  • 22. Role of sales promotions in FMCG sector Sales Promotion from the Consumers point of view Willingness to buy on sales promotion offer Sixty per cent of the sample did not show willingness to buy a brand due to promotion while 30% showed willingness and 10% were not sure. This indicates that when 30% showed willingness and 10% consumers who were not sure, these groups might 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 to induce trial, which reinforces the above inference. Long-term impact In order to understand ability of the promotions to increase long-term sales, respondents were asked about continuity of purchase of a brand after the withdrawal of promotion. Eighty per cent of the respondents indicated that they would not continue. But 20% said they would. Thus, it could be inferred that promotions in this category (low involvement products) might encourage trial and brand switching but not long-term loyalty. Preference of Schemes: Price off was the most preferred type of scheme. Maximum customers’ ranked price-offs as number one or two. Perceived Quality: Majority of respondents had a perception that the quality of the promoted brands remained the same during promotion, while some of them felt that it was inferior than ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 22
  • 23. Role of sales promotions in FMCG sector before. It can be inferred that promotions were not leading to negative brand quality perceptions. It is found that some customer strongly preferred to buy their regular brand and said that sales promotion would not weaken their loyalty towards the brand. Perceptions regarding underlying company motivations On tapping perceptions’ regarding underlying company motivations for sales promotion, “to increase sales” was ranked highest followed by “to attract switchers” and “to sell excess stocks”. While providing value to customers” and “To reinforce company image” were ranked lowest. This indicates that consumers believed that companies were undertaking such activities only for their own benefit and not for the benefit of consumers. Findings from retailer and consumer perception studies, it is evident that there was a matching of perceptions regarding nature of scheme (price offs as most preferred type of scheme mentioned by consumers and retailers’ perceptions about consumer preferences). Since retailers observe consumers in store behavior were frequently and directly, their perceptions regarding providing consumer behavior are likely to be accurate. Such inputs from the retailers would be useful to companies. The retailers had the perception that those schemes, which were announced through mass media, had better response. This was reinforced by the consumer survey which showed that recall in case of heavily promoted schemes on TV was found to be very high. Retailers’ prediction of companies’ motivation for offering sales promotion was matching with the consumer perception regarding the same. Thus both viewed that companies were using sales promotion activities mainly to increase short-term sales or encourage switching or selling excess stock and not really to give value benefit or enhance/reinforce brand/company image. ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 23
  • 24. Role of sales promotions in FMCG sector Trade Oriented Sales Promotion Trade Oriented Sales Promotion aimed to motivate channel member of the company and to encourage them to push company’s product. Trade Oriented Sales Promotion includes dealer contest and incentives, trade allowances. Point-of-purchase displays, sales training programs, trade shows, cooperative advertising, and other programs designed to motivate distributors and retailers to carry a product and make an extra effort to push it to their customers Sales promotion from the retailer’s point of view: Perceptions on Scheme Preference It was found that retailer perceived price offs as a better form of sales promotion activity. Price offs in their opinion had relatively a greater impact compared to any other form of sales promotion activity like Bonus packs, Premium, Contests etc. Retailers preferred price offs the most, then bonus pack, premium, contests, in order of importance. Perceptions about Buying Roles Retailers viewed that the person who came to the shop (who may be a maid, son, daughter, daughter-in-law and child) was the decider of a toilet soap brand and not the Income provider (e.g. head of the family). It could be inferred that visibility of information about the sales promotion activity at the point of purchase could result into the purchase of a promoted brand. Perceptions about their role in decision-making ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 24
  • 25. Role of sales promotions in FMCG sector Retailer had relatively very low influence in affecting choice. It could be inferred that visibility and awareness about the scheme were the critical success factors so that pull could be created. Perceptions about Response to Sales Promotion Offers They believed that younger age-groups were more experimental in nature, amenable to trying new brands, and sought/looked for or asked whether there were any) sales promotion schemes running on any toilet soap at the time of purchase. Perceptions about Communications of Sales Promotion Schemes Retailers perceived that role of word of mouth and television advertising played an important part in providing information inputs to consumers regarding sales promotion activities. Variations in Information Flow Smaller (non-supermarket, small format store) retailers received relatively less support compared to supermarkets in terms of servicing, margins, and information about sales promotion activities from the dealers. Many a times small retailers were only informed verbally about sales promotion schemes by the dealer salesmen during the scheduled weekly visits. Dealer-Retailer Dynamics At the time of sales promotion activities, dealers had tendency to push unwanted stocks onto the smaller retailers. In fact these retailers preferred to stock variety of brands and ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 25
  • 26. Role of sales promotions in FMCG sector wanted payment for shelf and window display to increase traffic into their store. However, supermarkets and big retailers were pampered and given special services and given better margins and better allowances. ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 26
  • 27. Role of sales promotions in FMCG sector Margins It was found that in sales promotion schemes margins varied from 6 to15% depending of the size of the retail outlet, bargaining power of a retailer, quantity ordered by him etc. Mostly margins were linked to size of the volumes that were ordered. Perceptions about terms and conditions Retailers were not found to be happy with sales promotion schemes where their margins were cut on the pretext of just fast movement of inventory of the brand being promoted. Also if additional incentive was offered it was subject to minimum performance requirement. Nature of POP Retailers indicated that most of the POP (Point of Purchase) materials were meant for brand advertisement and not for giving information regarding the schemes. Thus it could be inferred that company’s follow up was not adequate. Servicing during duration of Scheme In stock-out situation during the running of the sales promotion schemes, smaller retailers had to wait for replenishment of stocks till the next scheduled weekly visit by the dealer salesman but big retailers were serviced on telephonic request for replenishment of stocks. This clearly indicated the disparity in treatment. Problem of left-over A leftover stock at the end of any scheme was required to be sold by the retailers before they ordered fresh stocks. In case of bonus packs scheme, leftover stock was often ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 27
  • 28. Role of sales promotions in FMCG sector dismantled (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 in adverse brand image. Gifts for Retailer motivation Companies at times were rewarding retailers by giving free gifts like thermos flasks or clocks if they sold more than certain quantity in a given period. Companies were making a half-hearted effort to motivate retailers. Perceptions about mass media announcements Retailers viewed that whenever sales promotion scheme was announced on TV, it created pull and they were more than willing to stock such brands. For example Medimix and Dettol contest was not advertised on TV, hence there was very little awareness leading to unsold stock till 6 months. While Lux Gold Star, which was heavily promoted on T.V., is recalled even today. Post Promotion Behavior Retailers observed that in most cases sales promotion scheme on a brand might encourage a buyer to switch a brand temporarily but he would revert back to original brand after promotion. Handling Problems Many a time’s retailers had to handle various sales promotion offers simultaneously in a category and also across categories and there was no formal communication planning either from the dealer or the company. Remembering each offer and handling was a problem especially for a small retailer, which was often an as one-man show. ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 28
  • 29. Role of sales promotions in FMCG sector ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 29
  • 30. Role of sales promotions in FMCG sector Why do Sales promotion schemes affect sales? There are three mechanisms behind these facts. It is Purchase quantity, Brand switching and Category expansion. First, consumer can increase the quantity they buy just because the product is on sale. Second, consumers are inducing to purchase another brand different from the one they would have purchased when there is no promotional incentive. Finally, consumer’s total consumption of the product category is increased by the promotion. However, in the long term this positive effect may be diluted because a promotional campaign has no permanent effect in the sales of the firm ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 30
  • 31. Role of sales promotions in FMCG sector Sales Promotion Strategy 
 Sales are the lifeblood of a business, without sales there would be no business in the first place; therefore it is very important that if a business wants to succeed, it should have a sales promotion strategy in mind. The primary objective of a sales promotion is to improve a company’s sales by predicting and modifying your target customer’s purchasing behavior and patterns. Sales promotion is very important as it not only helps to boost sales but it also helps a business to draw new customers while at the same time retaining older ones. There are a variety of sales promotional strategies that a business can use to increase their sales, however it is important that we first understand what a sales promotion strategy actually is and why it is so important. A sales promotion strategy is an activity that is designed to help boost the sales of a product or service. This can be done through an advertising campaign, public relation activities, a free sampling campaign, a free gift campaign, a trading stamps campaign, through demonstrations and exhibitions, through prize giving competitions, through temporary price cuts, and through door-to-door sales, telemarketing, personal sales letters, and emails. The importance of a sales promotion strategy cannot be underestimated. This is because a sales promotion strategy is important to a business boosting its sales. 
 
 When developing a sales promotion strategy for your business, it is important that you keep the following points in mind. • Consumer attitudes and buying patterns • Your brand strategy • Your competitive strategy • Your advertising strategy ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 31
  • 32. Role of sales promotions in FMCG sector • Other external factors that can influence products availability and pricing. There are three types of sales promotion strategies: • A push strategy • A pull strategy or • A combination of the two A Push Strategy: A ‘push’ sales promotion strategy involves ‘pushing’ distributors and retailers to sell your products and services to the consumer by offering various kinds of promotions and personal selling efforts. What happens here is that a company promotes their product/ services to a reseller who in turn promotes it to another reseller or to the consumer. The basic objective of this strategy is to persuade retailers, wholesalers and distributors to carry your brand, give it shelf space, promote it by advertising, and ultimately ‘push’ it forward to the consumer. Typical push sales promotion strategies include; buy-back guarantees, free trials, contests, discounts, and specialty advertising items. 
 A Pull Strategy: A ‘pull’ sales promotion strategy focuses more on the consumer instead of the reseller or distributor. This strategy involves getting the consumer to ‘pull’ or purchase the product/ services directly from the company itself. This strategy targets its marketing efforts directly on the consumers with the hope that it will stimulate interest and demand for the product. This pull strategy is often used when distributors are reluctant to carry or distribute a product. Typical pull sales promotion strategies include; samples, coupons, cash refunds or rebates, loyalty programs and rewards, contests, sweepstakes, games, and point-of-purchase displays. A Combination of Two Strategies: ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 32
  • 33. Role of sales promotions in FMCG sector A ‘combination’ sales promotion strategy is just that; it is a combination of a push and a pull strategy. It focuses both on the distributor as well as the consumers, targeting both parties directly. It offers consumer incentives side by side with dealer discounts. The Short term Impact of Promotions: Let’s have look at the impact of promotions on purchase behavior during the promotional period i.e. the week or the month when the promotion was being run. The majority of the empirical studies have focused on the impact of promotions in the short term. The key findings across the studies 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 of promoted brand in the short term. Studies have consistently reported high sales effects and high price elasticity of brands, which are on promotion. The economic rationale for the promotional response is clear – temporary price cuts increase the value of the product to the consumer and it leads to immediate action. Sales boost can be quantified on the basis of brand switching, primary demand expansion and consumer stockpiling during a promotion. Sales Promotion leads to brand substitution with the product category: The sales ‘bump’ during the promotional period into sales due to brand switching purchase time acceleration and stockpiling. Studies on brand switching have shown that brand-switching effects within a category are asymmetric such that promotions on higher quality brands impacts weaker brands disproportionately. During a promotion, higher quality brands induce a large number of consumers to switch to them as compared to lower quality brands. One explanation advanced for this finding by researchers is that ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 33
  • 34. Role of sales promotions in FMCG sector large share brands have higher brand equity and attract switchers more than low share brands. ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 34
  • 35. Role of sales promotions in FMCG sector Sales Promotion leads to purchase acceleration/stockpiling effects: In response to a promotion, consumers may buy more quantity of the product category or buy at an earlier time than usual (purchase acceleration effect). If consumers buy extra quantity during a promotion or earlier than normal, then they are not in the market to buy products once the promotion is over. Thus purchase acceleration is demonstrated through A lengthening of inter purchase times after a promotion. Purchase acceleration was more likely to be exhibited in increased purchase quantity than in shortened inter purchase times. Results showed that consumers mostly made up for the large quantity purchased by waiting longer until purchasing again. Results indicated that heavy users tended to accelerate purchases more than light users. There was negligible difference in the acceleration propensities of high versus low-income groups. Sales Promotion leads to primary demand expansion for a category: While it was traditionally assumed that consumption rates remain fixed during and after a promotion, but from this project I came to know that promotions also have a primary demand expansion effect. When a primary demand expansion occurs, promotion induced increase in purchase quantities does not significantly extend the time till the next purchase in the category occurs, thus indicating that there has been an increase in consumption promotions induced consumers to buy more and consume faster. It is found that promotion induced inventory temporarily increased consumption rates within the category e.g. in categories such as bacon, salted snacks, soft drinks and yogurt exhibited primary demand expansions as a result of promotion while bathroom tissue, coffee, detergent and paper towels exhibited stockpiling only. Sales Promotions affect sales in complementary and competitive categories: From this project it is found that promotion not only increases sales of main product but it also lead to increase in sales of complementary categories. Found strong cross relationships between products of the promoted product category indicating brand substitution behavior. They stated that retail price promotions work as a form of implicit price bundling whereby the consumer surplus is transferred from the promoted item to ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 35
  • 36. Role of sales promotions in FMCG sector non-promoted items. Also found that retail price promotions create significant complementary and substitution effects within the store. ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 36
  • 37. Role of sales promotions in FMCG sector The Long term Impact of Promotions: Strategies are builds to reap the benefits for longer period of time; it is true in sales promotion strategies. Let us see impact of promotions effort and study the impact over a longer time period e.g. 4-6 months or even a few years after a sales promotion campaign. The result showed that consumer promotions for leading brands of established packaged products had no after-effects on the brand’s sales or repeat buying loyalty. The extra sales of a brand while promoted came virtually all from the brand’s existing long-term customer base for which the experience of buying the promoted brand was nothing new. It is found that although the short-term effects of promotions are strong; these promotions rarely exhibit long-term effects. It is observed that each sales component generally lacked a permanent effect and the effect of promotion was short lived and increase in promotions affected consumers’ stockpiling decisions in the long run. They found that the combined short and long-term elasticity of promotions was zero. The stockpiling induced by a promotion was essentially offset by reduced demand in the long term. Thus increased sales were more a result of sales borrowed from the future than increased consumption ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 37
  • 38. Role of sales promotions in FMCG sector SWOT Analysis of FMCG Sector !"#$%&"'()* • Well-established distribution network extending to rural areas. • Strong brands in the FMCG sector. • Low cost operations. +$,-%$(($()* • Low exports levels. • Small-scale sector reservations limit ability to invest in technology and achieve economies of scale. • Several "me-too’’ products. .//0#"1%2"2$()* • Large domestic market. • Export potential. • Increasing income levels will result in faster revenue growth. 3'#$,"()* • Imports. • Tax and regulatory structure. • Slowdown in rural demand. ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 38
  • 39. Role of sales promotions in FMCG sector DATAANALYSIS ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 39
  • 40. Role of sales promotions in FMCG sector Consumers ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 40
  • 41. Role of sales promotions in FMCG sector Q1. Which brand of Soap / Detergent do you use? Interpretation: Bathing –soaps Respondents Lux 41 Hamm 3 Lifebuoy 14 Nima 8 Others 34 Bathing soaps 0 10 20 30 40 50 Respondents 41 3 14 8 34 Lux Hamam Lifebuoy Nima Others ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 41
  • 42. Role of sales promotions in FMCG sector The above question has been formed to know the soaps and detergents at the top of the mind of the customers. It shows those consumers’ purchase and use of that particular brand. It will help to the company to know the market scenario and the major brands in the market. Form the above result it is clear that out of 100 customers more than 40 are consumers are having the same brand as the image in their mind, whereas others category is also showing the higher graph than these 3 major players (Hamam, Lifebuoy, Nima). ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 42
  • 43. Role of sales promotions in FMCG sector Interpretation: Detergent powder Respondents Nirma supper 19 Wheel 14 Surf 35 Ariel 18 Others 14 Detergent Powder 0 5 10 15 20 25 30 35 40 Respondents 19 14 35 18 14 Nirma sup Wheel Surf Ariel Othres ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 43
  • 44. Role of sales promotions in FMCG sector Form the above result it is clear that out of 100 customers 35 are purchasing the same brand of detergent, whereas all others are on same level. ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 44
  • 45. Role of sales promotions in FMCG sector Q2. Do you always buy the same brand of Soap / Detergent? 
 Interpretation: The objective behind the formation of this question is to know the level of brand loyalty of the consumers towards the brands of soaps available in the market. The above figure Particulars Respondents Yes 56 No 44 Brand loyal 0 10 20 30 40 50 60 Respondents 56 44 Yes No ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 45
  • 46. Role of sales promotions in FMCG sector shows that on 56% of the respondents are loyal to their brands of detergent/soap. FMCG are such a market where the level of loyalty remains low and this is because of many reasons. Q3. Which factors do you normally consider while purchasing a particular brand of Soap / Detergents? Factors Bathing soap Det.powder Fragrance 19 18 Quality 33 36 Company image 16 13 Price 23 19 Packaging 6 11 Others 3 3 ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 46
  • 47. Role of sales promotions in FMCG sector Interpretation: The objective behind this question is to know the effect of influencing factors in the purchase decision of the soaps and detergent powders. It mainly contains the factors like, quality which players an important role in the purchase decision of the soaps and detergents both. If we look at the graph of the soaps and detergent it shows quality as the most influencing factors in the purchase decision while price is also an important for purchase decision. Factors affecting purchase behavior 0 10 20 30 40 Bathing soap 19 33 16 23 6 3 Det.powder 18 36 13 19 11 3 Fragrance Quality Company image Price Packaging Others ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 47
  • 48. Role of sales promotions in FMCG sector Q4. Do you consider promotional schemes while purchasing a particular brand of Soap / Detergent? H0: Promotional schemes have a significant effect on the purchase of brand. H1: Promotional schemes do not have an effect on the purchase of brand. Particulars Respondents Yes 78 No 22 Effect of schemes purchase behavior 0 20 40 60 80 100 Respondents 78 22 Yes No ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 48
  • 49. Role of sales promotions in FMCG sector Interpretation: 
 Answer of this question will give idea about the effect of promotional schemes in the purchase decisions. Such types of schemes always attract more and more consumers towards particular brand. Simultaneously it gives idea about the factors, which consumers look most in the product before they make final decision. Here H0 is accepted as the graph shows that 78 out of 100 consumers are looking for such schemes before they make purchase. Q5. Which of the following promotional schemes you have come across so far? Promotional schemes Respondents Coupons 16 price off 84 Freebies 24 scratch cards 12 lucky draw 9 Bundling 31 extra qty. 44 ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 49
  • 50. Role of sales promotions in FMCG sector Interpretation: The above stated question clearly states the awareness of promotional schemes offered in the market by the marketers to attract more and more consumers. The results show that price off and extra quantity is the two main offers/schemes which consumers have came across at the time of purchase. It will help the manufacturers and marketers too how too launch their new products in the market with which schemes. Familiarity of promotional Schemes 0 20 40 60 80 100 Respondents 16 84 24 12 9 31 44 Coupons price off Freebies scratch cards lucky draw Bundling extra qty. ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 50
  • 51. Role of sales promotions in FMCG sector Q6. Which medium do you feel is suitable to promote the various promotional schemes? Source Respondents Radio 11 TV 69 Newspaper 43 Hoarding 15 Others 12 Mediums to promote the promotional schemes 0 20 40 60 80 Respondents 11 69 43 15 12 Radio TV News.ppr Hoarding Others ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 51
  • 52. Role of sales promotions in FMCG sector Interpretation: This question gives stress on the media habit of the people and through which the product should be launch or they think it would be better than other Medias. The above result shows TV as the best media to market the product, which will cover majority of the viewer ship. On the second place it shows newspapers as the media to promote the product in the market. Q7. Is there any existing scheme on the Soap / Detergent you are currently using? Particulars Respondents Yes 58 No 42 ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 52
  • 53. Role of sales promotions in FMCG sector Interpretation: The answer of the respondents give idea about the awareness of the promotional schemes 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 idea about the promotional schemes running into the market. It shows that people are not much aware of the schemes, which continue in the market it may be because of the present stock of the product at their place. Existing scheme on the Soap / Detergent 0 10 20 30 40 50 60 70 Respondents 58 42 Yes No ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 53
  • 54. Role of sales promotions in FMCG sector Q8. If yes, please specify? Interpretation: This question supports the above question. It enlists the answers of those customers who are aware of the present schemes offered in the market and also those schemes, which are more demanded in the market. Particulars Respondents 3+1/Other Free 36 Discount 22 No idea 6 No answer 36 0 5 10 15 20 25 30 35 40 Series1 36 22 6 36 3+1/Other Free Discount No idea No answer ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 54
  • 55. Role of sales promotions in FMCG sector The result shows that 1+1 or 2+1 or other free schemes are more demanded and more aware schemes in the market. So manufacturers may go for the same at the time of launching their product. Q9. If you get an attractive promotional offer in the product other then of your choice will you switch over? Particulars Respondents Yes 73 No 27 ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 55
  • 56. Role of sales promotions in FMCG sector Interpretation: It shows the level of brand loyalty among the consumers. The result clearly shows that out of 100, 73 people are ready to switch over to another brand if they find better promotional schemes which suits their budget means more qyt + less cost + quality. Combination of all these schemes will run better in the market. Switching behavior 0 10 20 30 40 50 60 70 80 Respondents 73 27 Yes No ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 56
  • 57. Role of sales promotions in FMCG sector 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 ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 57
  • 58. Role of sales promotions in FMCG sector Interpretation: Above question it gives specific reasons for switching too other products. It shows that extra quantity with less or same price, more satisfaction, quality and other factors influence consumers to switch over too other brands. Reason 0 10 20 30 40 Respondents 16 17 2 5 22 2 36 Cost+qty Quality Satisfaction Brand loyal More Benefit/bud Season change No answer ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 58
  • 59. Role of sales promotions in FMCG sector ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 59
  • 60. Role of sales promotions in FMCG sector Q11. Give suggestions about futuristic promotional schemes? This show the consumers’ future expectations from the whether company to come with new schemes or continue with present one. It shows consumers demand which the manufacturers have to meet. ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 60
  • 61. Role of sales promotions in FMCG sector Retailers ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 61
  • 62. Role of sales promotions in FMCG sector Q1. Since how long are you in this business? Interpretation: This question gives idea about the benefit to the retailers who are on the market from long period of time and the benefits they are getting more as compare to others. It also shows their experience in the field and the services they are providing too their new and regular customers. It also gives idea about the benefits they are gaining for wholesalers and direct from the company. Particulars Respondents 1-5 Years 24 5-10 Years 27 More than 10 years 49 0 10 20 30 40 50 60 Series1 24 27 49 1-5 Years 5-10 Years More than 10 years ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 62
  • 63. Role of sales promotions in FMCG sector ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 63
  • 64. Role of sales promotions in FMCG sector Q2. Name the Soap / Detergent (Company) you stock for. Interpretation: Companies Respondents Nirma 96 HUL 100 P&G 90 Godrej 94 Others 68 Soap / Detergent in stock 0 20 40 60 80 100 120 Series1 96 100 90 94 68 Nirma HUL P&G Godrej Others ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 64
  • 65. Role of sales promotions in FMCG sector It gives idea about the capacity of the retailers to stock the goods and also the variety of the products they are stocking. It will also make clear the demand of the goods in their stores and the selling of the product in market. Most of the retailer stocks all types of soap and detergent. Q3. 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 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 ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 65
  • 66. Role of sales promotions in FMCG sector Bathing Soap 0 10 20 30 40 50 60 70 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 1 2 3 4 5 6 ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 66
  • 67. Role of sales promotions in FMCG sector Interpretation: It gives an idea about the priority the influencing factors too the consumers and also the weight age of that factor over other factors. In the above result people are more quality and price oriented. On the other hand people are also conscious about the company image. Because sometimes the consumer remember that name of the product by the company name and also from the past performance of that company. Fragrance and packaging are not influencing factor as per the respondents. Factors 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 63 ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 67
  • 68. Role of sales promotions in FMCG sector Interpretation: Detergent 0 10 20 30 40 50 60 70 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 63 1 2 3 4 5 6 ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 68
  • 69. Role of sales promotions in FMCG sector It gives an idea about the priority the influencing factors too the consumers and also the weight age of that factor over other factors. In the above result people are more quality and price oriented. On the other hand people are also conscious about the company image. Because sometimes the consumer remembers that name of the product by the company name and also from the past performance of that company. Fragrance and packaging are also play important role for purchasing detergent powder. Q4. Do you suggest customers to purchase a certain brand? Particular Respondents Yes 33 No 67 ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 69
  • 70. Role of sales promotions in FMCG sector Interpretation: This could be a very help question to understand the role of retailers in the purchase decision. In above graph 67% of retailer are not suggest to purchase particular brand because of personal relation or that customer are brand loyal. While 33% of the retailer are suggesting the consumers to buy particular brand. There could be many reasons like, extra margin, relations with consumers and quality of the products which retailer may get the benefit of the same. Suggestion 0 10 20 30 40 50 60 70 80 Series1 33 67 Yes No ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 70
  • 71. Role of sales promotions in FMCG sector Q5. If Yes why? Particular Respondents High margin 9 Quality 17 Relationship 7 No reason 67 ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 71
  • 72. Role of sales promotions in FMCG sector Interpretation: It gives idea about the reasons why retailers suggest the consumers to buy particular brand. In above graph and table it is clear that for margin and of better relations with consumers and too provide quality product to consumers they suggest consumers too bye particular brand. For the company it may be helpful to target such retailers to sell their product in the market easily. If yes 0 10 20 30 40 50 60 70 80 Respondents 9 17 7 67 High margin Quality Relationship No reason ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 72
  • 73. Role of sales promotions in FMCG sector Q6. Do customers look for various schemes in the product? Particular Respondents Yes 92 No 8 Customers look for various schemes 0 20 40 60 80 100 Respondents 92 8 Yes No ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 73
  • 74. Role of sales promotions in FMCG sector Interpretation: This gives a real helpful data for checking the effect of sales promotions in the market and how seriously consumers follow the promotions before they go for purchase particular brand. The above result shows that only 8 out 0f 100 didn’t go for the promotion otherwise all are looking for any type of the promotions on the product. Q7. If yes which schemes? Promotional Schemes Respondents Coupons 11 Price Off 82 Freebies 35 Scratch Cards 2 Lucky Draws 19 Bundling Offer 65 Extra Quantity 79 ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 74
  • 75. Role of sales promotions in FMCG sector Interpretation: The above stated results show the demand of various types of promotional schemes in the market by the consumers. The consumers in the market are demanding almost all types of schemes but there are three major schemes, which consumers generally look at the time of purchase or before that. Price off, product bundling and extra quantity are more demanded by the consumers over others schemes. Which schemes 0 20 40 60 80 100 Respondents 11 82 35 2 19 65 79 Coupons Price Off Freebies Scratch Cards Lucky Draws Bundling Offer Extra Quantity ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 75
  • 76. Role of sales promotions in FMCG sector Q8. Which Trade Promotions do various companies offer? H0: Effect of trade promotions for all four brands is similar. H1: Effect of trade promotions for all four brands is not similar. NIRMA Promotions Respondents Extra Margin 46 Extra Units 34 credit facility 55 Gifts 24 promo. Exp. 8 ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 76
  • 77. Role of sales promotions in FMCG sector Interpretation: From the above graph shows the trade promotions offered by the NIRMA Ltd to the retailers to attract them towards stocking their goods and also stop them switching them too other major players in the market. NIRMA is mainly offering credit facility, which is offered by all major players it may differ in the time limit of the credit. It is also providing extra margin, and units with occasional gift with their schemes. Trade Promotions by Nirma 0 10 20 30 40 50 60 Series1 46 34 55 24 8 Extra Margin Extra Units credit facility gifts promo. Exp. ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 77
  • 78. Role of sales promotions in FMCG sector ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 78
  • 79. Role of sales promotions in FMCG sector Interpretation: HUL Promotions Respondents Extra Margin 47 Extra Units 34 Credit facility 58 Gifts 25 Promo. Exp. 22 Trade Promotions by HUL 0 10 20 30 40 50 60 70 Series1 47 34 58 25 22 Extra Margin Extra Units Credit facility Gifts Promo. Exp. ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 79
  • 80. Role of sales promotions in FMCG sector The advantage of HLL over NIRMA is that it bare promotional expenses which NIRMA is not doing. It attracts more consumers through such promotions, such as display of the product, banners etc. So this may help it to attract more retailers. It may because of its less cost of production in other segments in which nirma is not operating. P & G Promotions Respondents Extra Margin 40 Extra Units 33 Credit facility 55 Gifts 20 Promo. Exp. 12 ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 80
  • 81. Role of sales promotions in FMCG sector Interpretation: P&G is also a big player in the FMCG market. It is also providing all the facilities, which others are providing to retailers. Trade Promotions by P&G 0 10 20 30 40 50 60 Series1 40 33 55 20 12 Extra Margin Extra Units Credit facility Gifts Promo. Exp. ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 81
  • 82. Role of sales promotions in FMCG sector GODREJ Promotions Respondents Extra Margin 46 Extra Units 32 Credit facility 57 Gifts 19 Promo. Exp. 18 ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 82
  • 83. Role of sales promotions in FMCG sector Interpretation: Godrej is a big player in the FMCG market. It is also providing all the facilities, which others are providing to retailers. But it is lacking in bearing expenses, which HUL is providing, to maximum number of retailers. Trade Promotions by Godrej 0 10 20 30 40 50 60 Series1 46 32 57 19 18 Extra Margin Extra Units Credit facility Gifts Promo. Exp. ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 83
  • 84. Role of sales promotions in FMCG sector OTHERS Promotions Respondents Extra Margin 30 Extra Units 18 Credit facility 38 Gifts 15 Promo. Exp. 7 ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 84
  • 85. Role of sales promotions in FMCG sector Interpretation: Others include local players, as well as we established players like, wipro but their products are not in demand like other players but still they are providing all the facilities to retailers to attract towards stocking their products. Trade Promotions by Others 0 5 10 15 20 25 30 35 40 Series1 30 18 38 15 7 Extra Margin Extra Units Credit facility Gifts Promo. Exp. ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 85
  • 86. Role of sales promotions in FMCG sector Anova: Single Factor ANOVA All 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 effect of GODREJ NIRMA HUL P&G Extra Margin 46 46 47 40 Extra Units 32 34 34 33 Credit facility 57 55 58 55 Gi ft s 19 24 25 20 Promo. Exp. 18 8 22 12 34.4 33.4 37.2 32 SUMMARY Groups Count Sum Average Variance Column 1 5 172 34.4 289.3 Column 2 5 167 33.4 339.8 Column 3 5 186 37.2 229.7 Column 4 5 160 32 284.5 S o u r c e o f Variation SS df MS F P-value F crit B e t w e e n Groups 72.55 3 24.1833 3 0.08460 9 0.96745 7 3.23887 2 Within Groups 4573.2 16 285.825 Total 4645.7 5 19 ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 86
  • 87. Role of sales promotions in FMCG sector trade promotion on various brands and are similar too. As p> 0.05, it is the evidence that the null hypothesis is accepted Q9 Give reasons for not stocking a particular brand. Retailer stocks all types of soap and detergent because of competition. Q10 Any suggestions. Retailer suggested that packaging should be further improved and used as promotional tool, to encourage sales during certain periods the company should provide price off or extra quantity because that influences directly to the consumer. 
 ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 87
  • 88. Role of sales promotions in FMCG sector Findings of the report: Sales Promotion, a short-term inducement, offered to a consumer or trade has gained momentum as a promotional tool world over. It represents nearly three fourth of the marketing budget at most consumer product companies. Sales promotions can enhance consumers’ self-perception of being “smart” or a “good” shopper • FMCG 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. ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 88
  • 89. Role of sales promotions in FMCG sector • Consumer remember that name of the product by the company name and also from the past performance of that company • Consumer remembers that name of the product by the company name and also from the past performance of that company • Retailers are not suggest to purchase particular brand because of personal relation or that customer are brand loyal • Margin and of better relations with consumers and too provide quality product to consumers they suggest consumers too bye particular brand. • Customers are looking for any type of the promotions on the product before them going to purchase. • Price off, product bundling and extra quantity are more demanded by the consumers over others schemes. • NIRMA is mainly offering credit facility, which is offered by all major players it may differ in the time limit of the credit. • HUL attracts more consumers through such promotions, such as display of the product, banners etc. ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 89
  • 90. Role of sales promotions in FMCG sector Recommendation: The findings of the empirical study indicate that unless the brand to be promoted is in the consideration set of the consumer, sales promotion by itself is unlikely to have any major impact. Clearly this shows that managers need to invest into brand building exercise so that his/her brand appears in the consideration set of the target consumers. Only after this should he spend time, money and energy on sales promotion activities. Sales promotion should not be used in isolation but need to be integrated with other tools and in line with the overall positioning of the brand. Also the importance of the role of mass media came out clearly in the study. Companies need to create sufficient awareness about sales promotion schemes through mass media in order to create awareness. FMCG products are low involvement products characterized by switching behavior. Also the person going to the shop for the purchase of soap is the final decision maker of the brand. Hence it is essential that companies need to design attractive, striking, visible POPs for scheme announcements. 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 have to be appealing and high for the target consumers. Repetitive use of the same premium for a prolonged period may have negative effect on the loyal customers. When the company is giving its own product free as premium, it needs to ensure the quality of the product from it as it is likely to jeopardize the image of both its products. The findings exhibited that both the retailers and consumers perceived that sales promotion activities carried out by the companies for increasing sales in short term and ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 90
  • 91. Role of sales promotions in FMCG sector clearing excess stocks. What it implies is that companies need to use sales promotion synergistically and communicate so that they provide value to the target audience and enhance brand quality/image perceptions. Companies need to systematize information flow regarding sales promotion activities particularly at dealer and retailer level. The companies should consider ensuring proper information flow and devising checks and measures to reduce misappropriations and implementation flows critical aspects for the success of sales promotion activities. As retailing is fragmented, direct reach by companies is next to impossible. Through dealers and proper feedback mechanism, companies keep in touch with the market. From the study it was found that smaller retailers felt neglected and not enthused to implement the schemes, particularly when additional handling, stocking, accounting was required on the part of a retailer without compensatory margins. It can be seen that the retailer and consumer perceptions matched with respect to preferences of schemes, underlying motivations and role of mass media. This implies that the retailer would be a rich source of information about the consumer and the likely response to sales promotion activities. Developing a system to tap such responses from time to time both at retailer and consumer level would be helpful for planning future sales promotion activities. In order to build trust and commitment companies should tap preferences, perceptions of retailers as well as consumers. ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 91
  • 92. Role of sales promotions in FMCG sector Limitations of the study • We considered Gurgaon 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 language problem and also problem of time and lack of positive behavior. • Respondent may give biased answer due to some lack of information about other brands. • Findings of the study are based on the assumption that the respondents have given correct information. ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 92
  • 93. Role of sales promotions in FMCG sector Emerging Trends So far as FMCG market is concern there is new trend is emerging known as Joint sales promotion. Actually it is old concept but it was more prevailing in durable products now it is coming intro non-durable goods also. When any sales promotion scheme either for trade or consumer is announced by more than one company and /or more than one brand of the same company, it is referred as joint sales promotion or horizontal co-operative sales promotion or cross promotion or umbrella sales promotion. Classification of joint sales promotion: • Use complementarily due to natural use • New use catering complementary relationships • Commonality of need due to use 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 ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 93
  • 94. Role of sales promotions in FMCG sector Conclusion of the Survey The study reflects that the use of sales promotion undeniably has increased over the years in India. Future holds lot of promise for such schemes across wider range of product- markets. Sales Promotion has ceased to be major differentiator at least in the metros, with almost all companies offering similar freebies and gifts. As a result now marketers have to find out some innovative ways of sales promotion to differentiate from competitors. Currently Price off and Bye one get one free offers are very effective to attract the consumers towards the products. We have noted that these kinds of promotional tools are useful for short-term increase in sales and to induce first trial. These types of promotional schemes should be consistent and changed from time to time depending upon season and competitor’s schemes. With the Increasing number of supermarket, the branded packaged goods work as silent sales person. So in such stores, sales promotion plays a more effective role in stimulating consumers’ demands. ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 94
  • 95. Role of sales promotions in FMCG sector One of the very important facts we came to know from this project is that sale of goods which contain large quantity and having big packaging e.g. detergent are stagnating because consumer prefer to buy small pack goods, the reasons are: small pack goods reduce risk of bad quality, It had low cost or say price, and last but important factor i.e. mentality to purchase just to try first. Sales of small pack goods are quite high, but from the company’s point of view small pack goods are less profitable compare to large pack goods. So here marketer tries to increase sales of large pack goods by using sales promotion tactics like price off and percentage extra. Bibliography BOOKS ➢ 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 ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 95
  • 96. Role of sales promotions in FMCG sector Annexure 
 ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 96
  • 97. Role of sales promotions in FMCG sector Questionnaire Customers I am a student of MBA studying in ANSAL UNIVERSITY, GURGAON and carrying out a survey for our academic project to “Role of sales promotions in FMCG”. So please fill this questionnaire. Your identity would not be revealed and information will only be used for academic purpose. Q1. Which brand of Soap / Detergent do you use? Q2. Do you always buy the same brand of Soap / Detergent? Q3. Which factors do you normally consider while purchasing a particular brand of Soap / Detergents? Detergent powder Respondent Nirma supper Wheel Surf Ariel Others Bathing –soaps Respondent Lux Hamam Lifebuoy Nirma Others Particulars Respondent Yes No Factors Bathing soap Det.powder ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 97
  • 98. Role of sales promotions in FMCG sector Q4. Do you consider promotional schemes while purchasing a particular brand of Soap / Detergent? Q5. Which of the following promotional schemes you have come across so far? Q6. Which medium do you feel is suitable to promote the various promotional schemes? Fragrance Quality Company image Price Packaging Others Particulars Respondent Yes No Promotional schemes Respondent Coupons Price off Freebies Scratch cards Lucky draw Bundling Extra qty. Source Respondent Radio TV Newspaper Hoarding Others ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 98
  • 99. Role of sales promotions in FMCG sector Q7. Is there any existing scheme on the Soap / Detergent you are currently using? Q8. If yes, please specify? Q9. If you get an attractive promotional offer in the product other than of your choice will you switch over? Q10. Give reason for the same? Particulars Respondent Yes No Particulars Respondent 3+1/Other Free Discount No idea No answer Particulars Respondent Yes No Particulars Respondent Cost + Quantity Quality Satisfaction Brand loyal More benefit/budget Season change ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 99
  • 100. Role of sales promotions in FMCG sector Q11. Give suggestions about futuristic promotional schemes. Retailers I am a student of MBA studying in ANSAL UNIVERSITY, GURGAON and carrying out a survey for our academic project “Role of sales promotions in FMCG”. So please fill this questionnaire. Your identity would not be revealed and information will only be used for academic purpose. Q1. Since how long are you in this business? Q2. Name the Soap / Detergent (Company) you stock for. Q3. Rank the following factors that customers look for in the purchase of Soap / Detergent. (Rank from 1 to 6) No answer Particulars Respondent 1-5 Years 5-10 Years More than 10 years Companies Respondent Nirma HUL P&G Godrej Others Factors 1 2 3 4 5 6 Fragrance Quality Company Image ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 100
  • 101. Role of sales promotions in FMCG sector Q4. Do you suggest customers to purchase a certain brand? Q5. If Yes why? Price Packaging Others Particular Respondent Yes No Particular Respondent High margin Quality Relationship No reason ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 101
  • 102. Role of sales promotions in FMCG sector Q6. Do customers look for various schemes in the product? Q7. If yes which schemes? Q8. Which Trade Promotions do various companies offer? Particular Respondent Yes No Promotional Schemes Respondent Coupons Price Off Freebies Scratch Cards Lucky Draws Bundling Offer Extra Quantity NIRMA Promotions Respondent Extra Margin Extra Units Credit facility Gifts Promo. Exp. HUL Promotions Respondent Extra Margin Extra Units Credit facility Gifts ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 102
  • 103. Role of sales promotions in FMCG sector 
 Promo. Exp. P & G Promotions Respondent Extra Margin Extra Units Credit facility Gifts Promo. Exp. GODREJ Promotions Respondent Extra Margin Extra Units Credit facility Gifts Promo. Exp. OTHERS Promotions Respondent Extra Margin Extra Units Credit facility ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 103
  • 104. Role of sales promotions in FMCG sector Q9 Give reasons for not stocking a particular brand. Q10 Any suggestions? Gifts Promo. Exp. ANSAL UNIVERSITY, GURGAON /M.B.A-2nd Year/Marketing/2016-2018 104