Summer internship in the furniture republic

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its a project report completed by me on the furniture republic during my summer internship

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Summer internship in the furniture republic

  1. 1. “Impact of promotional activity on the sales of TFR products” A Project report on Impact of promotional activity on the saleof TFR products Study conducted under guidance of Mr.Aditya Gupta (Industrial mentor) Dr.Shrutijain (Faculty mentor)Report submitted to NIILM-CMS Greater Noida for partial fulfilment of therequirement for PGDM (2011-13) Submitted by:Vikramsinghchauhan Roll no. – 2011139 Batch – (2011-13) Declaration1|Page
  2. 2. “Impact of promotional activity on the sales of TFR products”I, the undersigned, hereby declare that the Project Report entitled “Impact ofpromotional activity on the sales of TFR products”written and submitted by me toNIILM-CMS, Greater Noida in partial fulfillment of the requirements for theaward of degree of Post Graduate Diploma in Management under the guidance ofDr. Shruti Jain .My original work and the conclusions drawn therein are based onthe material collected by myself.Place: Vikram Singh ChauhanGreater NoidaStudent of NIILM-CMS2|Page
  3. 3. “Impact of promotional activity on the sales of TFR products” Certificate of Completion of InternshipThis is to certify that Summer Project Report on “Impact of promotional activityon the sales of TFR products” prepared by “Vikram Singh Chauhan” Roll No.“2011139” of PGDBM 2011-13 batch is his genuine effort under my guidance andsupervision.Dr. Shruti Jain Vikram Singh ChauhanFaculty Guide Student of NIILM-CMS3|Page
  4. 4. “Impact of promotional activity on the sales of TFR products”INFORMATION SHEET :-Name of the company – THE FURNITURE REPUBLICAddress of the company – A-32, Sec.63, Noida (off. NH-24, Opp. Indrapuram)Phone No of company – (91) 801-020-3263Date of commencement – 20th day of april 2012Date of completion – 21th day of June 2012Name of Industry Guide – Mr Adityagupta (Founder & CEO)Student‟s Roll No. – 2011139Student‟s E-mail ID – Vikrams099@hotmail.comStudent‟s GSM – (91) 901-545-11814|Page
  5. 5. “Impact of promotional activity on the sales of TFR products”ACKNOWLEDGEMENT:-A summer internship project is a golden opportunity for learning and self-development. I consider myself very lucky and honored to have so manywonderful people lead me through in completion of this project. Then I wouldlike to thank my College presidentDr. S. Neelamegham for providing me with this opportunity of having such awonderful company for my summer training.My grateful thanks to Mr.Aditya Gupta, CEO “THE FURNITUREREPUBLIC” who in spite of being extraordinarily busy with his duties, took timeout to hear, guide and keep me on the correct path. I do not know where I wouldhave been without him. A humble „Thank you‟ to Prof. Ms.Shruti Jainwhose patience I have probably tested to the limit. She was always so involved inthe entire process, shared her knowledge, and encouraged me to think. I would liketo thanks Ms.Meetu NIILM-CMS for her efforts and help provided to me to getsuch an excellent opportunity. Last but not the least there were so many whoshared valuable information that helped in the successful completion of thisproject.5|Page
  6. 6. “Impact of promotional activity on the sales of TFR products”EXECUTIVE SUMMARYThe basic concept of my project “Impact of promotional activities on sales of TFRproducts” was based on sales promotion and in store selling.For this I got the training from TFR about product material such as leather,leatherite ,type of wood.Consumer retention is the key success factor for any competitive market. An effortwas made to ascertain and analysis customer views and preferences for the productthrough process of Brand Recall. Also, a detailed study was made to understandthe performance pattern of major competitors of TFR.In doing so, it was possible to assess the competition in the market, hence enablingus to position ourselves more effectively and strategize on a long term basis.During the course of this project, I was also fortunate enough to be able to studythe promotional campaigns carried out by the company.This report contains the findings arrived after detailed analysis of the data receivedafter questionnaires. The study was also carried out to find out how to increase sellof brands. We did many promotional activities such as ATL, BTL, TTL activityand I went to various societies, corporate offices,majormetro stations for creatingbrand awareness.The promotional activities like canopy shows and broachers distribution werecarried out at greater noida. In this activity we have given live demo of householdfurniture in our company demo flat at vasundhra olive county to the end user i.e.the customers; this activity was mainly done in the indirapuram andvasundharaandec.At sec.63. Giving them demo, and broachers, and handling therequeries regarding the Products .6|Page
  7. 7. “Impact of promotional activity on the sales of TFR products”TABLE OF CONTENT:-Table of ContentsDeclaration .................................................................................................................................................. 1INFORMATION SHEET :- ................................................................................................................................ 4Chapter 1 – Introduction to the topic ........................................................................................................... 9 1.2 Objectives of my project .......................................................................................................................... 9 1.3 Structure of my project ............................................................................................................................ 9Chapter 2 – Literature Review .................................................................................................................... 11 2.1 BRIEF HISTORY OFINDIAN FURNITURE INDUSTRY ................................................................................. 11 2.2 Furniture industry composition:- .................................................................................................. 11 Household furniture comprises of ............................................................................................................... 12 2.3 Market Capitalization............................................................................................................................. 13 2.4 Top leading Companies .......................................................................................................................... 14 2.5 Carrier opportunities ............................................................................................................................. 16 Chapter 3 – Companies profile .................................................................................................................... 17 3.1 Company: -THE FURNITURE REPUBLIC .................................................................................................. 17 3.1.1 MD’s message ............................................................................................................................ 17 3.1.3 MISSION .............................................................................................................................................. 183.2 4- P’s of furniture industry .................................................................................................................... 18 3.2.1 Products .............................................................................................................................................. 18 Household Furniture ........................................................................................................................... 19 Office Furniture ................................................................................................................................... 19 3.2.2 Price .................................................................................................................................................... 19 3.2.3 Place .................................................................................................................................................... 19 3.2.4 Promotions.......................................................................................................................................... 19 3.3 Key success factor of the company ........................................................................................................ 20 3.4 Build the brand.............................................................................................................................. 20 3.5 Understand the market................................................................................................................. 20Chapter – 4: Milestones of company .......................................................................................................... 21 4.1 Sharda exports ................................................................................................................................. 227|Page
  8. 8. “Impact of promotional activity on the sales of TFR products” ..................................................................................................................................................................... 22 4.2 IHDP (international home deco park) .................................................................................................... 23 4.3 The furniture republic (TFR) ..................................................................................................................................................................... 24 Below the line (BTL) / Above the line(ATL) / Through the line (TTL) Advertising ....................................... 40Chapter 5 – Research Methodology ............................................................................................................ 47Chapter 5: FINDINGS AND CONCLUSIONS .................................................................................................. 61 5.1 FINDINGS AND CONCLUSIONS ............................................................................................................... 61Chapter 6: Limitations ................................................................................................................................. 62 Limitations ................................................................................................................................................... 62Biblography................................................................................................................................................. 638|Page
  9. 9. “Impact of promotional activity on the sales of TFR products”Chapter 1 – Introduction to the topic1.2 Objectives of my projectThe Report will highlight the effectiveness and applicability factor of salespromotion and advertisement techniques (BTL activity). The research study is ofempirical in nature. It has the following objectives: o To investigate the effectiveness of sales promotion technique on purchase decision. o To study the effectiveness of advertising (BTL activity ) on purchase decision. o To understand and evaluate the scope of BTL activity and its significance in driving the sales and the comparative study between the sales generated from the BTL and ATL activity. o Comparison b/w the no. of footfalls in the store due to ATL and BTL activity and the analysis of the same. o Understanding the needs of customers for new furniture and to facilitate THE FURNITURE REPUBLIC to plan their future strategies accordingly. o To increase the no of conversion of the customers visiting the OLIVE COUNTY flat as well as The TFR by calling them and taking their feedback so as to make them recognize and recall brand, thus enhancing the brand equity. o To increase the no of footfalls and the conversion ratio by making them see the fully designed and furnished flat at Olive County which was done by TFR.9|Page
  10. 10. “Impact of promotional activity on the sales of TFR products”1.3 Structure of my projectI have divided my project report into well-defined chapters. The first chapter is anintroductory chapter that provides a background for the start of the project. Ithighlights the objectives of my study & details the project structure.The second Chapter is an overview of the India Market for past years whichinclude Indian stock market along with Gold ETF.Chapter 3 gives an insight of the literature on Portfolio analysis/management. Ihave included a small part explaining the basics of Portfolio management, risk v/sreturnChapter 4 describes the different methods for evaluating the portfolios such asSharpe method, Treynor method, and the significance of beta. This chapter alsospecifies the method used for this researchChapter 5 states the research methodology, selection of different portfolios, andtheir evaluation with the interpretationChapter6 another two portfolios based on systematic and unsystematic selection isshown inChapter 7 is an extension from here, as it gives the concluding remarks of theentire study along with the primary limitations of this study.10 | P a g e
  11. 11. “Impact of promotional activity on the sales of TFR products”Chapter 2 – Literature Review2.1 BRIEF HISTORY OFINDIAN FURNITURE INDUSTRYAs of 2011, the Indian furniture market is estimated to be worth US$ 307,922million. Of this, wooden furniture accounts for US$ 109,358 million. About 13.5 percent (US$ 41569 million) of this (wooden furniture) is imported and imports aregrowing at 60 to 70 per cent every year. India was the largest furniture importer inthe world in 2010-11, with a 27 percent share in the furniture imports worldwide. Atotal of 1,15,476 importers shipped furniture to India during this period, mainly fromItaly, Germany, Spain, China, Korea, Malaysia, Indonesia, Philippines and Japan.The furniture sector in India makes a marginal contribution to the Gross DomesticProduct (GDP), representing about 0.8 per cent of the total GDP. The major part ofthis industry, approximately 85 per cent is in the unorganized sector. The remaining15 per cent comprises of large manufacturers, such asGodrej & Boyce Manufacturing Co. Ltd., BP Ergo, Featherlite, Haworth, Style Spa,Yantra, Renaissance, Millennium Lifestyles, Durian, Kian, Tangent, FurnitureConcepts, Furniturewala, Zuari, Truzo, N R Jasani& Company, V3 Engineers, PSLModular Furniture etc.The range of indigenous furniture available in India includes both residential andcontract system furniture. Manufacturers in India usually use a three-tier sellingand distribution structure, comprising of the distributor, wholesaler and retailer.The market is mainly concentrated in tier A, B and C category cities (the top 589cities).Tier A and B type cities together constitute 43 per cent of the total market.With a healthy economy and increased household and institutional spending, the2.2 Furniture industry composition:-As with the global market, household furniture is the largestsegment in the Indian furniture market, accounting for about 65 percent offurniture sales. This is followed by, the office furniture segment with a 20 percentshare and the contract segment, accounting for the remaining15 percent.market is11 | P a g e
  12. 12. “Impact of promotional activity on the sales of TFR products” Market Share Household furniture Office furniture Contract Segment 20% 15% 15% 65%Household furniture:-Household furniture in India is available in a wide range, to cater to differentcustomer needs. A typical middle class urban Indian home has five rooms(including kitchen and bathroom). About 25 percent of the urban populations livein homes with five rooms or more, while 45 percent live in houses with threerooms or less. About 16 percent is estimated to live in single-room homes. The richand upper middle class is typically very attentive to design and quality, so price israrely a determining factor. In general, European style furniture is only found inhomes of the urban upper class. Demand for furniture of international standards islimited to the larger cities. It is also estimated that the wealthier classes do notchange furniture very frequently. The average life of a piece of furniture is about20 years and some craftsmen‟s pieces are used for as long as 50-70 years. Colonialfurniture is still very common in India.Household furniture comprises of Living Room Furniture Bedroom Furniture Kitchen Furniture12 | P a g e
  13. 13. “Impact of promotional activity on the sales of TFR products” Drawing Room Furniture Dining Room Furniture Entryway Furniture Office Furniture:- The office furniture segment caters to the commercial and office space. This segment has witnessed rapid growth in recent years, in line with the growth in the Indian economy and subsequent demand for office space. The thrust on real estate and office construction is expected to sustain in the near future, indicating continued growth for the furniture industry. Contract segment:- The contract segment caters primarily to hotels and its growth is consequently linked to growth in tourism and development of new hotels. There are around 1,400 hotels in India in the organized sector. More than 12 per cent of these are in the 5-star and above categories. 2.3Market CapitalizationThe Indian wooden furniture industry is able to generate approximately a turnover ofRs 3,500 crore annually. The market of wooden furniture solely owns the share ofnearly Rs 60 crore. And as per one of the survey done recently, the industry isexpected to grow by 20 percent in coming times. 13 | P a g e
  14. 14. “Impact of promotional activity on the sales of TFR products”2.4 Top leading CompaniesGodrej & Boyce Manufacturing Co. Ltd.• It is a part of the Godrej Group and was incorporated in 1932. The Godrej Grouprecorded revenues of around US$ 813 million in FY‟11• It mainly manufactures consumer products, office equipment, consumerappliances, chemicals, agro products, security equipment, industrial products andoffer office automation and storage solutions• The company‟s manufacturing facility is located in Mumbai, Maharastra• The company has exclusive showrooms and dealer outlets across IndiaFeatherlite• Featherlite is one of India‟s largest furniture manufacturingcompanies and was started in 1965• Featherlite has been retailing furniture for the past 20 years and the first outletwas opened in Bangalore in 1987• The company has a state-of-the-art manufacturing plant and is engaged incontinuous R&D• The company‟s manufacturing plants are located in Bangalore and Hosur. It has apresence in 22 locations across India• It has around 25 exclusive showrooms in Mumbai, Chennai,Bangalore, Delhi, Kolkata and Hyderabad. It manufacturesaround 20, 000 chairs and 3, 400 workstations per month.35 per cent of the total production is sold through retail outlets• The company has an employee strength of 500, which includes architects, interiordesigners and othersStyle Spa• Style Spa Furniture Limited is promoted by the Zuari-Chambal Group.Established in India in 1997, to manufacture and retail furniture, the company isheadquartered in Chennai• The US$ 15 million manufacturing facility at Kakkalur, nearChennai, in the state of Tamil Nadu, is a sophisticated and fully automated plant,which is one of Asia‟s most modern and largest manufacturing facilities. The ISO-certified plant produces around 0.2 million furniture pieces annually14 | P a g e
  15. 15. “Impact of promotional activity on the sales of TFR products”• The company manufactures home and office furniture that is retailed throughabout 92 exclusive retail outlets, spread across the country• The company also provides after sales services throughits showroomsMillennium Lifestyle• Millennium Lifestyle is a family owned enterprise incorporated in 1999. Thefamily had nearly 75 years of experience in retailing Indian art and antiques• Millennium Lifestyle offers a one-stop solution to cater to the customers‟complete furniture requirements, as it offers a wide range of furniture from aroundthe world under one roof• A number of brands across various product categories are sold from thecompany‟s retail stores - ArteM, Divani, Loddenkemper, RioArt, Sauder,Sherwood and Softplus. Millennium Lifestyle has its showrooms spread across thetwo southern Indian cities of Bangalore and Hyderabad• The company also provides the „designing your own interior sitting at home‟service with the help of an online interactive room designerDurian• Durian is a major player in imported furniture, offering living, bedroom, diningroom and office furniture• The company has been set up by the Dokania Group, which has been involved inplywood manufacturing for about 25 years• Durian has over 40 imported furniture showrooms in the country• The company also offers free interior design consultancy and free delivery andfurniture installationNilkamal• Nilkamal Group of Companies has a turnover of over US$ 125 million. It is theleader in plastic moulded furniture• The company has diversified into the lifestyle furniture business by launching@home, which is a complete home solution store offering contemporaryreadymade wooden furniture. The company has eight manufacturing locationsin India. It also has joint ventures in Bangladesh and Sri Lanka• It provides services like design solutions, professional guidance and interest freeloans, besides furniture and accessories• The main strengths of the Group are a 350-member wide direct sales network, a350-plus strong dealer network, 33 regional offices in all major Indian industrial15 | P a g e
  16. 16. “Impact of promotional activity on the sales of TFR products”cities and 24 warehouses all over India and a warehousing facility along with amarketing office in the UAE.2.5Carrier opportunitiesThere are numerous opportunities in India for business of Furniture as thehousehold has increased its income while the economy is reaching to new horizonsof developments. There are opportunities like start up a business or work as aninterior decorator of furniture, or the supplier of the furniture to the local marketfrom the national market. Minimum qualification is required for any candidate tostart up the job in this industry.16 | P a g e
  17. 17. “Impact of promotional activity on the sales of TFR products”Chapter 3 – Companies profile3.1 Company: -THE FURNITURE REPUBLICA brand for furniture that gives every customer a right to good furniture, the rightto make an informed decision, the right to the best I value, quality and service.TFR is one of the leading manufacturers of superior quality laminates range thatcan only be limited by the imagination. With the stringent quality check, highmanufacturing standards and modern infrastructure, it offers top quality decorativelaminates, door skins, metal foil, dry wipe marker board, chalk board, postforming, compact, digital and screen printed laminates with Borer, Fungus andTermite (BFT) guard on all its laminates. Realistic natural textures paired withveneer prints and creative abstract textures, metallic foils and fancy prints enablesyou use Durian Laminates to express your individuality in a myriad of ways. Frombeing the pioneers in plywood and veneer business to being the leading lifestylebrand in India, our journey has been a memorable one. A journey that has beenevent fully marked by numerous pioneering achievements in the InteriorsInfrastructure Industry. Today we touch the lives of so many of Indians everydaywith our range of innovative laminates, sturdy doors and world class home andOffice & Home furniture. And this has been possible because of our passion forexcellence in everything that I do. In fact at Durian, excellence is an attitude. Anattitude that has been taken to heart by our strong and committed customer-centricteam of professionals across pan India. Store is among the select few in India to beawarded with the internationally acclaimed Forest Stewardship Council (FSC)certification apart from the prestigious ISO 9001 and 14001certifications. In ourpursuit of excellence I will always be committed to enrich your lifestyles withnewer and innovative products.17 | P a g e
  18. 18. “Impact of promotional activity on the sales of TFR products”3.1.1 MD’s messageMr.Aditya GuptaAs you might have read: LIVE SMART, BUY RIGHT-is our simple but strongmessage to the customer. It is also our credo. Unless we buy smart and right fromour factories, we won‟t be able to deliver delight to our customers .Our customerare design conscious, value seeking and have several demands on their time. Wetotally support their desire to buy smart things, with good quality and genuinevalue. It is time to declare freedom from boring interiors, it‟s your republic.3.1.3 MISSIONThis mission statement reflects our proud past and our desire for the future. This isthe mantrathat drives us in everything that we do. From design through fulfilment,we continuously striveto provide the best product at the best prices accompaniedby the best service in the industry. Being the best and bringing the best to you isour relentless pursuit3.1.4 VISION"Through positive energy, faith and passion, providing the best possible productand service inthe market and therefore creating dynamic growth and prosperity.”3.2 4- P’s of furniture industry3.2.1 ProductsUnder this heading a marketer needs to consider the thing that is being sold. This isnot just the physical product itself, but also anything related to how it is made,packaged and named. Under this heading the marketer also needs to considerproduct/service options, the after-sales service, warranties, and servicing. Forexample, look at all the options available on a major car manufacturers website.You might also consider all the choices you might have to make for a simple flight:18 | P a g e
  19. 19. “Impact of promotional activity on the sales of TFR products”Household FurnitureSofa, Lounger, Dining, Bed Room, Home office, Side &Center Table, Storage,Miscellaneous, Computer Table etc.Office FurnitureDesks, Conference Table, Chair, Miscellaneous and etc.Contract segmentIn this segment we include all the furniture which is used to build hotels.3.2.2 PriceThis heading refers to decisions about how much to charge for goods and services.It may be easy for you as a manager to neglect this aspect of the mix in favors ofthe more glamorous promotion and product areas, but ultimately decisions overprice affect the viability of a brand and the profitability of an organization. Pricingis also much more complex than you might think.3.2.3 PlaceThis heading refers to distribution. This means all aspects related to how goods andservices are moved from the producers to the end user. This means thecoordination of retailers and/or wholesales and in the case of products the logisticsinvolved in moving from factory/warehouse/head office, to the end user. Mostgoods are sold through intermediaries, (for example, retailers). Marketers musttherefore consider the type, size and location of retailers and possibly also thetraining of retail staff3.2.4 PromotionsThis heading refers to all types of communication that relate to a specificmarketing campaign. This includes communication with retailers and distributors,communication with purchasers and end users and also internal communicationwith the sales force and other employees. Promotion is an area with considerableinnovation. Marketers put great efforts into finding new ways to communicate withconsumers. When people think, or talk about marketing they are often onlyconsidering promotions. This is because t is the most visible part of the marketingprocess after the product itself. But it would be a mistake to focus only on19 | P a g e
  20. 20. “Impact of promotional activity on the sales of TFR products”promotions. Promotions work best when they are considered alongside decisionsabout products, pricing and place.•Direct Marketing•Sponsorship•Public Relations•Personal Selling•Advertising•Sales Promotions3.3 Key success factor of the companyWhile the Indian furniture market is growing rapidly and can yield sustainedadvantages, an assessment of the sector and the key trends driving it throw up afew key take-aways for potential investors. These are:3.4 Build the brandIndia being a price and value-conscious market, consumers typically look for cuesthat indicate assurance of value. A strong brand is important for furnituremanufacturers in this respect, to increase customer awareness and trust.Participation in furniture trade shows, organizing seminars, etc., could thereforeprove to be useful means to build a brand.3.5 Understand the marketPotential investors would also need to concentrate on specific regions customersegments initially, to establish themselves and test the market before investing in anational distribution network. Establishing a liaison Office & Home to study themarket extensively and identifying investment opportunities will also prove to besteps that will enable investors to firm up their India operations20 | P a g e
  21. 21. “Impact of promotional activity on the sales of TFR products”Chapter – 4: Milestones of companyAditya Gupta, ChairmanAditya is co-founder and Chairman of Sharda exports,GlocalEdge and Thefurniture republic. He is companys strategic advisor and a visionary entrepreneurwho has created corporations worth $150M.Aditya and his brother Ashish started Sharda Exports and ihdp Business Park andthe Furniture republic. Under their leadership, Sharda Exports became the fastestgrowing floor covering manufacturer and exporter in India. Due to its creativedesigns and quality-driven approach, Sharda Exports has become a leading floorcovering exporter in India and has won consecutive national awards since 1997.It exports products to 350 world-renowned brands, retail stores, and design housesin 57 countries. They pioneered ihdp, a first of its kind business park in Asia. Thisbusiness park brings together home fashion exporters, provides temporary displayopportunities for global buyers, and is a first class corporate park with offices ofseveral multinational corporations. Adityas extensive global travels andrelationships bring tremendous value to the companys wealth of network andknowledge.Mr.Aditya holds an MBA from Faculty of Management Studies (FMS) and a BE inMechanical Engineering from Indian Institute of Technology Roorkee (IITR).Aditya is an avid photographer, squash player, and adventure sports enthusiast.21 | P a g e
  22. 22. “Impact of promotional activity on the sales of TFR products”4.1 Sharda exports22 | P a g e
  23. 23. “Impact of promotional activity on the sales of TFR products”4.2 IHDP (international home deco park)23 | P a g e
  24. 24. “Impact of promotional activity on the sales of TFR products”4.3 The furniture republic (TFR)24 | P a g e
  25. 25. “Impact of promotional activity on the sales of TFR products”25 | P a g e
  26. 26. “Impact of promotional activity on the sales of TFR products”1. IntroductionNow a days, even if we are at home, on the street or in the cinema, we can noticehow many Companies are speaking to us all the time. Information is comingfrom numerous different sources, and can reach us in our bed, and which is sopersonal, even in the toilet. Tailored information always reaches its target, andthen everything will depend on the individual‟s decision. The goal is to makecustomers loyal once they have decided to purchase one brand‟s product. We canalso observe ourselves as well as others feeling some kind of satisfactionduring shopping, which is because of the „good decision‟ we made aboutthe purchased products. What does this „good decision‟ mean actually? I think thatnobody can tell us what a good decision exactly is. There are too many differentview point, as everybody is different in the world. That is the same situation whencompanies try to persuade people that they are the best possible choice in aparticular market. They use numerous ways of marketing communication, by thehelp of BTL and ATL tools, but then they also have to decide which form ofcommunication to choose, which will be the most suitable for their targetgroup. However, it is for sure that in many cases BTL communication canestablish personal relationship between products and customers, so it can bemore efficient.In my thesis my objective is to find out what the current advertisingtendencies Whether there are more companies using BTL today or there will bemore using in the future.I have prepared my thesis in a BTL activity. I got lots of help from my mentor,and also got the chance to get involved in projects, such as the BTL activityof THE FURNITURE REPUBLIC. So, I mainly prepared my report based on my collected personal experiences.In my Report, I analyse the concept of BTL, and examined the effect ofBTL activities on consumers by the help of some case studies experiencedduring my internship.the question: „What will be the future of BTL marketing?‟26 | P a g e
  27. 27. “Impact of promotional activity on the sales of TFR products”2. BTL – Below TheLineThe expression Below-the-line is coming from practice. The world‟s biggestcosmetic- and domestic-chemical-products-producing company, Procter andGamble classified its costs in two different groups: for its traditional massmedia and for the non-traditional elements. In traditional mass media, agenciesare receiving commission. Procter andGamble wanted to know how much thiscommission was, so they wrote those costs for non-traditional mediumsin a different column of the company‟s bookkeeping – so the agencies‟commission started to be counted separately.Therefore, every advertising and commercial tool, which does not containagency commission, is in the category of BTL. It has to be clarified whatgoes under the agency commission concept since it would not be concrete.The aim of BTL communication is to develop private relationship with thecustomer, and to inspire them to speak to us. We can introduce novelties in a verypleasant way, so we are able to present specific information to our clients.2.1. Concept of below-the-lineThere are many definitions of below-the-line. Basically, these definitions can bedivided into two groups. According to the first one, every kind of non-classicaladvertising tool, that is not press release, TV, cinema, radio-spot or publicadvertisement, can be mentioned among below-the-line tools. The second oneputs the emphasis on agency commission, and declares that every kind ofmarketing activity that does not contain commission is part of marketingbelow the line. It is important to note that each explanation highlights thosemarketing tools that are not part of the below-the-line group. However, thecharacteristics of these definitions can easily picture the variety and great numberof possibilities of below the line marketing We can examine marketing tools in away that whose property the applied mediums are. In this case, we candifferentiate three groups. Above-the-line media: the applied media duringthe communication is private property. Meaning TV commercial, radio spots,press release, billboards, and other public place tools. Provisional media: theadvertising tool is publicproperty, meaning direct marketing (DM). Below-the-line media: medium is theproperty ofthe advertiser, meaning point-of-sales/point-of-purchase (POS/POP) tools,coupons, etc.27 | P a g e
  28. 28. “Impact of promotional activity on the sales of TFR products”2.3. Advantages of using BTLThere are some cases, where the below-the-line tools are more effective than thetraditional advertisements. Reasons for this can be: Easier selection, more accuratereaching of the target group More controllable hence cost effective Createsopportunity to meet directly with the product/service ( sampling, eventmarketing)Interactive, meaning that it makes customers act. Determining the exacttarget group makes communication more personal Effectiveness can be measuredeasier by BTL Gives unique opportunities in making differences from competitorsBrand-supporting In case of certain products (ex: tobacco), the target marketcannot be reached – or just partly – through traditional media because of the lawforbidding it. Then the importance of tools below the line increases.2.4. The position of BTL in marketing communicationNowadays more advertisers are choosing mass media tools for their productsor services. They do not use below the line activities. However, it is not alwaysbeneficial to use intense television, radio, newspapers or billboards advertisingin case of purpose of selling or introducing products. Applying othermarketing tools is only possible if the ATL campaign has not used up all theavailable financial resources for advertising. At the same time, many companiesconsider ATL tools a better option, because they cannot reach the necessaryadvertising frequency required for the desired effect. Lots of people thinkthat another „advantage‟ of ATL communication is that more customers can bereached during a campaign therefore the cost of 1 contact is absolutely less thanthat of a BTL campaign. This can be true in general, but an important differenceis that ATL communication has bigger number of standard deviation while inthe case of BTL media the target is substantially more accurately reached. Also atbelow-the-line the customer encounters the tools where the purchasing decisionis actually made. People can easily look through those advertisings on TV,radio,press or in public area billboards, so tools appearing in shops withreminding effects can highly contribute make a positive purchasing decision.At the same time, it is worth to mention that patronizing a below-the-linecampaign with traditional ones can make it even more effective. Nowadays inHungary, companies spend only 3 per cent of their marketing budget on below-28 | P a g e
  29. 29. “Impact of promotional activity on the sales of TFR products”the-line activities; this ratio in the US is more than 50 per cent. The reason of thisconsiderable difference is that the significance of below-the-line marketing isnot recognized yet, and the experienced experts are missing as well.2.5. Parts of BTLClassifying the areas and tools of below-the-line reflects its complexity andvariability:a.) Public Relationb.) Direct marketingc.) Sales Promotiond.) Advertising in-store (POS, POP)e.) Fairs and exhibitionsf.) Event marketingg.) Sponsoringh.) Personal selling2.5.1 - Public RelationPR is a planned and continuous set of activities, of which the target are thecustomers of the company, its public opinion, the understanding between itstighter and broader environment and building of trust. We can also talk aboutcompany image and internal PR meaning the company‟s internalcommunication. In both cases, there is considerably much more thanmarketing communication. In case of many companies PR concentrates on press-relations, is an important but not the only element. Good press relationship canimprove the situation of the company; can help change its image. According to thedirection of Public Relation we cantalk about internal and external PR. The previous one means the informationflows between leaders – employees, organizations, while the latter one isabout the communicational relationship built with the outside businessenvironment.Characteristics of PR:• Organizational, mostly corporate point of view, success is based on goodrelationship with employees and the public• The tool of forming public opinion, indirect influence, nurtures trust.29 | P a g e
  30. 30. “Impact of promotional activity on the sales of TFR products”• Endeavours mutual understanding, from acoordin -ating point of view,itconsiders environmental problems.• An overall group of activities,• Employees of the company are the executives of PR activities.• Informing of the public and feedback are done during the communicationalprocess.• It has an effect on various fields through the employees, like on lives, way ofthinking, relations, market performance of the economy, demand and supplyand sometimes even on price policies.• Is enriching human resources: builds personal, human relations.2.5.2-Direct marketing According to the broadest expressionDirect marketing means all the possible tools of marketing andcommunication in setting up direct consumer relationship. According tothetighter expression, direct marketing constitutes of tools of marketingcommunication. According to the American Direct Marketing Association,direct marketing is a kind of interactive method in the field of marketing thatcan be used anywhere and which – by using one or more advertising media – canhave an effect which can be measured by replies andNumber of purchases made.Characteristics of DM:• Puts human being in the centre,• Can be measured by concrete enquiries and purchases,• Fosters dialogue,• Communication with the buyer can be more accurate and personalized,• Addressed character, message is customized to the customers needs and wants:segmentedspecific content, tailored to size according to the consumers profile,• Feedback can be registered, direct measuring,• Necessity of computerized database.30 | P a g e
  31. 31. “Impact of promotional activity on the sales of TFR products”Advantage of direct marketing enables:• Handling a number of consumer groups and the segmentation of the market,• Identification of target markets, unlike segmentation and grouping of “niche-product” of bidders on the mass market.• Improving relations with partners and with the supplier background,• Regular and up-to-date information about needs, requirements and aboutchanges of demand,• Elimination/dampening of the so called noises, the lose of information byeliminating mediation• Reducing „standard deviation‟ of the applied communicational tools,• Building brand loyalty,• Reducing costs,• Accelerates cash-flow,• Comparison of expenditures and outputs, the concrete measurement ofeffectiveness.2.5.3 - Sales Promotion = SPSales Promotion refers to all the tools of which objective is the immediate increaseof sales by providing price-incentives through a given period of time to customers /retailers. According to the definition of the American Marketing Association:„Sales Promotion refers to all the marketing activities that stimulates customerpurchase and the effectiveness of merchandising activity, but does not relate tothe concept of personal selling, advertising nor to Public.Relation, like forexample: visits, exhibitions and fairs, demonstrations and the various, nottraditional activities and not standardized sales efforts.‟The system of Sales Promotion:PUSH – instructions and its effects: producers stimulate wholesalers and retailersto order.PULL – instructions and its effects: demand of consumers is created by thestimulation of producers, merchandisers and different advertisements.Objectives of customer sales promotion:•Raises interest about products and services,• Forming direct relation between the customer and the product,• Emphasizes product characteristics,31 | P a g e
  32. 32. “Impact of promotional activity on the sales of TFR products”• Exercise auxiliary inspiration.Objectives of merchandise sales promotion:• Primary aspect is to take business into focus,• According to this to lure the customer into the shop,• Passing storing costs on to the customer,• Increase turnover,• Increase turnover speed,• Clean-out the shelves.Methods of stimulating customers:• Presenting the product by assembling, sampling and try-out,• Price reduction,• Continuous sales discounts (POS)• Services during selling secure appropriate usage. Its tools are manuals, try-out,delivery service, installation and tutorial• Gifts, free bags, prizes.Gifts and prizes are subject to the purchase of a particular product or to a particularsum of money spent. The easiest form of these is when customers get somecomplimentary items besides the purchased product. A little more difficultbut also more stimulating is when customers have to send the receipt of thepurchase to the rewarding company so then they willget the gift by post.• Purchasing voucher, couponPurchasing vouchers are mainly given by manufacturing companies to thecustomers. Thesecan be used instead of cash when buying. As a rule it is used when a new productis launched.• Consumer competitions, prize-winning games, draw.• Refund, redeeming discount, guarantee conditions.• Sample try-out, sampling.32 | P a g e
  33. 33. “Impact of promotional activity on the sales of TFR products”2. 5.4 – Point Of Sales advertisement (POS, POP)There are many factors justifying the increasing importance of point of salesadvertisements.Most of them are confirmed by scientific researches as well:• Mass communicational campaigns flood customers with immense amounts ofinformation that cannot be stored in their memory in the long run. Thereforereminding advertisements in the sales location can mean a significant competitiveedge.• During the mass communicational advertisements the product is presented by thehelp of a photo or illustration, so the customer can neither see nor experience thecharacteristics of the product that could influence him/her in the purchasingdecision (package, surface,flavour). She/he would only have this possibility in theshop.• By the spreading of self-service businesses with decreased staff numbers,purchasing isbecoming more impersonal. Then the buyer will make his/her decision of whichproductto buy and how many of it with lack of information.• The aim of shops and of network of shops is to let people living closeto them becomeloyal customers in a greater number. Hence, it is indispensable to letpotential buyersknow their assortment and range of services.• Besides the appearance of new products, the variety of substitute andsupplementarygoods is increasing. Their advantages can be presented mainly in the shop itself,since thecustomer can get into direct touch with the product there.• It was recognized and acknowledged that an environment in which purchasing isjoy andpleasure for the customer has to be established at the sales locations. This could bedoneby inner and outer tools of the merchandiser and by the tools ofadvertisement of theproducer. It is necessary to provide opportunities for continous sales promotionsand other33 | P a g e
  34. 34. “Impact of promotional activity on the sales of TFR products”sales-stimulating activities (sampling, price discount). However, in order towork out allthese efficiently, there is an absolute need for a continuous, mutually trust-basedcooperation of the producer and of the merchandise.Psychological characteristics of sales location advertisements:Psychology differentiates active and passive memory. We mean the followingunder activememory: if a human being sees an advertisement could he recall actual events byhimself orby answering a question? Usually this memory is inaccurate and cloudy. Passivememory getsinto work automatically according to the stored information of a seenadvertisement. Noticinga familiar face in the crowd will calm and make the man happy in case the relationbetweenthe two is good. Therefore, when the mass – communication advertisementhas alreadyestablished a positive (at least not negative) attitude to the product, a new meetingwith it atthe spot of sales can generate an even stronger effect of the customer. Thatis whyadvertisements at the spot of sales play an important role in activating passivememory.There are some examples for tools building on Psychological effects:- Configuring and placing display (it is important that the display matches themessage of mass-communication)- Placing daily consuming goods at not too busy spots, goods generating impulsehaveto be in the front of the store or near the cashier.- Showing the product on more types of visual and34 | P a g e
  35. 35. “Impact of promotional activity on the sales of TFR products”Audiovisual aids.- Daily products should be placed on the lower shelves of the stand whileproducts generating impulse have to be on eye-level-shelves.Organizing guidelinesThe carrier of sales spot advertisement is practically the whole store and thoseinner and outer tools, methods that result the increase of turnover of thestore. The design of the on-spot-sales-advertisement is affected by the shopslocation, type, system of sales.Configuring sales spotWhen configuring the inner space of the store there are important aspectsthat have to be considered: the customer should purchase in a civilisedenvironment, let her feel comfortable, and let her go home with the feeling andexperience that make the return of that customer sure.When configuring the inside of the store, it is basic to provide enough space forcomfortable purchasing and for using the services. Also, have to pay attention toprovide sufficient space for executing sampling, placing displays and prizewinning games. Wide and clear passageways let customers look aroundproperly in the store. Nurseries, shops in the store (shop in the shop) makepurchasing even easier and more comfortable.Placing the products35 | P a g e
  36. 36. “Impact of promotional activity on the sales of TFR products”Purchasing has two types: planned in advance and impulse purchasing.Taking these into consideration goods should be placed in a way that dailyproducts are in the inner side of the store, preferably at a constant place, whilethose products generating impulse purchasing are near to cashiers.Since some points of the store are not equal customer-traffic-wise whenconfiguring the dual-base sales activities the traffic of certain spots must be takeninto consideration.The first spot is the constant, regular place of the product. The second salesspot is the surrounding of the cashiers, entrance, exit and the displays,baskets, pallets placed at the end of the stands. Generally, easy-to-sell productswith eye-catching price labelling occupy these places. Also important toconsider the frequency of purchasing and the weight of the product (products withmore weight should be placed near to the exit). More surveys confirmed thatplacing products in a symmetrical way or in different geometrical shapes restrainpurchasing activity, because customers do not like to break down those forms.Considering these, placing products in soldier-like order is not practical.Roles of temperature, colours and light. Temperature experienced in the storecan also be decisive: nobody likes purchasing in a cold shop. The idealtemperature is about 20°C. According to some observations, fairs organized inwintertime can have a bigger number of visitors than those in august; probablytemperature also played an important role in it. The colour of the store‟s inside isnot defined. By all means, it is a fact that products wrapped in white or in pastelcolours are the most adequate. We must not forget that positive associationsby the help of colours relate to the packaging mainly. The lighting of the inside isbasically made by accidental lighting. However it is important that theselights should be adequate to natural light, be pleasant, eye-friendly and not to bedisturbing. The well-designed lighting highlights order,tidiness and also assist toshape a positive image of the store.Advertisement with sound Experiences obtained in the industry (surveys ofTaylor) confirm that music can decrease the feeling of tiredness for a while andincrease productivity. Applying it in commerce, not only the sales staff butcustomers can also enjoy the refreshing effect of music. The well-chosen musicthat fits into the place of sales creates a pleasant atmosphere. The read-outprogram placed in the musical environment gives information about discounts,services and products.36 | P a g e
  37. 37. “Impact of promotional activity on the sales of TFR products”The sales spot advertisement needs to put emphasis on the following factorsin order to succeed: o Proportion of text and music o Creativeness of the text o Quality of technological equipment that transmit the program o Safe operation of equipment. i.e. Fairs, exhibitionsFair is a periodical event held from time to time at the same location, whichobjectives are to establish and to improve relations between producer, retailer andthe costumer, to foster sales and the dissemination of information. Exhibitions showcase the achievements of a particular field.Types of Fairs:1. The range and types of displayable products at an ordinary fair do notfall under any restrictions.2. Professional fair – most commonly multi-profession-fairs. Wecan differentiate producing-goods and consumer goods fairs.3. Vertical professional fair only introduces one or two groups ofproducts. Its visitors are professionals and concerned traders. Primarilyserves marketing objectives, sales stay in the background.4. The characteristic of the horizontal or representational professionalfair is the high-level specialization. Users and end-consumers canalso visit, depending on their interests. It is suitable for executingprofessional objectives as well as satisfying the needs of consumers forinformation.Event marketing, fairsAn event is an organized meeting for a community (sometimes has an entertainingfunction).The process of organizing events can be divided into 4 parts:- Planning- Preparing- Execution- Follow-ups, evaluation37 | P a g e
  38. 38. “Impact of promotional activity on the sales of TFR products”The difference between fairs and event marketing is: while the primary objectiveof a fair is informing, the main aspect at event marketing is let the visitorsenjoy themselves. The objective of event marketing is to give the brand/companya pleasant, entertaining experience. In its centre, we can see the vivid transmissionof the message and direct informing, exchange of information. Its aim is tocreate a positive image in the customers mind; several times direct sale is notthe primary aspect. There is a possibility for consumers as well as for partners atthese events to see and try the products. It is a key element at event marketingthat certain events give special and unique experience since catching the interestof the target group can only be made sure this way. The turnover increasing effectof event marketing The effect of outdoor programs cannot be measuredaccurately; only the number of visitors can be quoted. Besides this, the value ofone or two events can be weighted through press releases. The importance ofevents is given by those people who take part in those and who are important fromthe companies or from trade locations point of view. So if we can achievesomething memorable during the event it can be a bigger success thantrying to reach potential customers by the conventional media. Earlier brands orproducts were more in the centre of the popularity increasing programmeswhile nowadays banks, broadcasting and technical companies, so serviceproviders are using event marketing as well.SponsoringSponsoring is a kind of contribution by money or by any form, by which theinvestor gains trade potential in connection with the activity.Characteristics of sponsoring:• It is a bilateral business, where both parties – from the beginning – hasto be aware of what they expect from the co-operation, what compromises theyare to make in order to mutually gain advantages.• Sponsors are classified by the degree of financial contribution.• Reaches customers in non-commercial surroundings.• Makes skirting of advert restriction possible.• Neither falls into the field of advertisement, nor into of Public Relation. It is acomplex tool of marketing communication that highly beneficial on the long run.• Sponsoring is usually financial, and its effectiveness can be measured by thechange in market share and in image judgement.38 | P a g e
  39. 39. “Impact of promotional activity on the sales of TFR products”• It is important when choosing sponsorship that the target market should be thesame for the sponsor as well as for the sponsored person, that it shapes thecompany‟s reputation and image and that the sponsor would have favourablecommunicational tools by the sponsored person.• The success and reputation of the sponsored person are to be adapted to thecompany‟scommunication.2.5. 7 – Personal sellingPersonal communication means substantially more than the sheer sale of theproduct. There isan opportunity for maintaining and improving customer relations andmanaging customercomplaints, which help keeping customers and also motivate them for furtherpurchase.Personal selling is a kind of marketing tool where there is direct andinteractivecommunication between the seller and the buyer. Its characteristic is directconnection, thepossibility of immediate response. At the same time, it is important to mention thatthe contactcost/customer is high and it is possible to reach only a narrow target group.Fields of personal selling:• customer based• business based (business to business)In the market of consumers, personal selling comes in existence when thebuyer needs tomake a difficult decision, purchasing is of high-value, if theobject of the purchase is anexclusive product and if the product is of service-nature.The presence of trade representatives is crucial in the relationship of retailer andwholesalerand of producer and commerce. The advantage of keeping goodrelationship with therepresentative is that the information does not getdistorted and is personalized. Since thevolume of purchasing is quite big on themarket of producing/investing assets and generallythe decision-making process39 | P a g e
  40. 40. “Impact of promotional activity on the sales of TFR products”is quite difficult, it is important for the representative to haveenough informationabout both the market and the customer.Below the line (BTL) / Above the line(ATL) / Through the line (TTL)AdvertisingIn organisational business and marketing communications, Below the line (BTL)is an advertising technique. It uses less conventional methods than the usualspecific channels of advertising to promote products, services, etc. than Above theline (ATL) strategies. These may include activities such as direct mail, publicrelations and sales promotions for which a fee is agreed upon and charged upfront.Above the line(ATL)is a type of advertising through media such as TV,cinema,radio, print, banners and search engines. Below the line advertisingtypically focuses on direct means of communication, most commonly direct mailand e-mail, often using highly targeted lists of names to maximize response rates.In addition, Above the line is much more effective, when the target group is verylarge and difficult to define. But, if the target group is limited and specific, it isalways advisable to use Below the line promotions for efficiency and cost-effectiveness.Say, for example, if a manufacturer of pen is going to promote its product, it maytake the ATL route, but if a company manufactures computer UPS, it willcertainly take the BTL route, as the target group is very limited and specific.More recently, agencies and clients have switched to an IntegratedCommunication Approach. BTL is a common technique used for "touch and feel"products (consumer items where the customer will rely on immediate informationrather than previously researched items). BTL techniques ensures recall of thebrand while at the same time highlighting the features of the product.40 | P a g e
  41. 41. “Impact of promotional activity on the sales of TFR products”Through the line (TTL)refers to an advertising strategy involving both aboveand below the line communications in which one form of advertising points thetarget to another form of advertising thereby crossing the line. An example wouldbe a TV commercial that says come into the store to sample XYZ product. In thisexample, the TV commercial is a form of above the line advertising and once inthe store, the target customer is presented with below the line promotionalmaterial such as store banners, competition entry forms etc.Promotion can be loosely classified as "above the line" and "below the line"promotion. The promotional activities carried out through mass media liketelevision, radio, newspaper etc. is above the line promotion.The terms below-the-line promotion or communications, refers to forms of non-media communication, even non-media advertising. Below-the-line promotionsare becoming increasingly important within the communications mix of manycompanies, not only those involved in fmcg products, but also for industrialgoods.Some of the ways by which companies do BTL (below the line) promotions are byexhibitions, sponsorship activities, public relations and sales promotions likegiving freebies with goods, trade discounts given to dealers and customers,reduced price offers on products, giving coupons which can be redeemed later etc.Below the line sales promotionBelow the line sales promotions are short-term incentives, largely aimed atconsumers. With the increasing pressure on the marketing team to achievecommunication objectives more efficiently in a limited budget, there has been aneed to find out more effective and cost efficient ways to communicate with thetarget markets. This has led to a shift from the regular media based advertising.A definition of below-the-line sales promotion given by RohanSalvi:An immediate or delayed incentive to purchase, expressed in cash or in kind, andhaving only a short term or temporary duration.41 | P a g e
  42. 42. “Impact of promotional activity on the sales of TFR products” Methods of below the line sales promotion 1. Price promotions Price promotions are also commonly known as" price discounting". These can be done in two ways: A discount to the normal selling price of a product, or More of the product at the normal price. Alt Price promotions however can also have a negative effect by spoiling the brand reputation or just a temporary sales boost (during the discounts) followed by a lull when the discount would be called off. 2.Coupons 3.Gift with purchase 4.Competitions and prizesThis is an important tool to increase brand awareness amongst the target consumer. It can be used to boost up sales for temporary period and ensure usage amongst first time users. 5. Money refunds Here, a customer receives a money refund after submitting a proof of purchase to the manufacturer. Customers often view these schemes with some suspicion – particularly if the method of obtaining a refund looks unusual or onerous. 6. Frequent user/loyalty incentives 7. Point-of-sale displays 42 | P a g e
  43. 43. “Impact of promotional activity on the sales of TFR products”Shopping habits are changing for the people living in metropolitan cities. Peopleprefer big retail outlets like Big Bazaar to local kirana stores. Most of thedecisions of buying are taken by the virtue of point-of-sale displays in these retailoutlets.Examples of BTL promotionMost of the big brands are following the suit of BTL promotion because of risingprices of media based promotion, advertising clutter and increased impulsepurchasing.Some of the interesting examples are:Most of the educational institutes like career launcher, Time and PT are holdinginformative workshops and free tests for students which give a direct interactionof these institutes with the target customer and hence a suitable platform to sellthemselves.Ring tones and music videos on cell phones are helping the entertainment industryto promote for a music video or a movie for dirt-cheap rate as compared to mediapromotion.Various companies sponsor sport events to promote their brand, but nowadaysmedia companies like Hindustan Times are holding weekly events throughout thecountry in which companies can put up their stalls, display banners and postersand arrange for some fun activities. These events give the companies a platform atvery low price to promote their brand and increase visibility among targetconsumer. These companies also give discount coupons to winners in the games,which in turn boost the sales of the products and ensure that first time users trythese products as well.Pepsi organized an inter school cricket event for 425 schools across 14 citieswhich did wonders for the company by promoting the brand amongst the righttarget customer for almost no cost.Most of the pharmacy companies do BTL promotion by getting shelf spacethrough doctors to display their products or by giving away free calcium tabletsagain through doctors, knowing that for a patient a personal advise from a doctorwould hold more value as compared to a commercial advertisement.43 | P a g e
  44. 44. “Impact of promotional activity on the sales of TFR products”Another interesting BTL promotion was by NIKE. An athlete dressed up in Nikesportswear could be seen jogging on an elevated treadmill for the whole day onNational Highway 8, Delhi.Tata Shaktee is a strong rural brand from Tata Steel, for roofing products, hasBTL activity in the form of Haat participation. By having a stall at Haat, TataShaktee engages potential consumers in interactive games around differentiatingattributes of the product. Also, discount coupons are given for interested buyers,with details of nearby retailers.BTL promotions are gaining popularity among all big companies nowadaysconsidering their effectiveness because of the "individual customer promotion" ata price, which is much lesser than the normal media promotions.ATL - Above the line activities are those that the agency receive a income from the( i.e. Commission) media company . E.g. : Advertisements on Newspaper,magazines , TV & Radio BTL - Below the line activities are the other type ofactivities in the promotional mix Like : Sales promotions , Personal selling .Directmarketing & PR activities.Sales promotionSales promotion is the process of persuading a potential customer to buy theproduct. Sales promotion is designed to be used as a short-term tactic to boostsales – it is not really designed to build long-term customer loyalty.Some sales promotions are aimed at consumers. Others are targeted atintermediaries (such as agents and wholesalers) or at the firm‟s sales force.When undertaking a sales promotion, there are several factors that a business musttake into account:• What does the promotion cost?44 | P a g e
  45. 45. “Impact of promotional activity on the sales of TFR products”Will the resulting sales boost justify the investment?• Is the sales promotion consistent with the brand image?A promotion that heavily discounts a product with a premium price might do somelong-term damage to a brand•Will the sales promotion attract customers who will continue to buythe product?once the promotion ends, or will it simply attract those customers who are alwayson the look-out for a bargain?There are many methods of sales promotion, including:• Money off coupons –customers receive coupons, or cut coupons out ofnewspapers or a products packaging that enables them to buy the product next timeat a reduced price• Competitions– buying the product will allow the customer to take part in achance to win a prize•Discount vouchers– a voucher (like a money off coupon)•Free gifts– a free product when buy another product•Point of sale materials– e.g. Posters, display stands – ways of presenting theproduct in its best way or show the customer that the product is there.• Loyalty cards– e.g. Nectar and Air Miles; where customers earn points forbuying certain goods or shopping at certain retailers – that can later be exchangedfor money, goods or other offersLoyalty cards have recently become an important form of sales promotion. Theyencourage the customer to return to the retailer by giving them discounts based onthe spending from a previous visit. Loyalty cards can offset the discounts theyoffer by making more sales and persuading the customer to come back. They alsoprovide information about the shopping habits of customers – where do they shop,45 | P a g e
  46. 46. “Impact of promotional activity on the sales of TFR products”when and what do they buy? This is very valuable marketing research and can beused in the planning process for new and existing products.The main advantages and disadvantages of sales promotion are:AdvantagesEffective at achieving a quick boost to sales Encourages customers to trial aproduct or switchbrandsDisadvantagesSales effect may only be short-term Customers may come to expect or anticipatefurther promotions May damage brand image46 | P a g e
  47. 47. “Impact of promotional activity on the sales of TFR products” Chapter 5 – Research MethodologyResearch objectiveTo investigate the effectiveness of sales promotion technique on purchase decision.The research exercise has been accomplished with the sample size of 100respondents. The questionnaire method was applied for this exercise. The Researchdesign was a blend of descriptive and exploratory research design. The researchhas investigated the effect of sales promotion. The study involved a field surveyconducted across different malls, offices in the Noida region and in retail storealso.SOURCE OF DATAThere are two main source of data collection i.e. through primary data collectionare secondary data collection method. I have adopted primary data collectionmethod for the survey. Under this method the method of survey was best suitedwith my sample size and requirement of data.The respondents from different malls and survey included :Personal interviews:The investigator follows a rigid procedure and seeks answerto a set of pre-conceived questions through personal interview. This method ofcollecting data is usually carried out in structured ways were output depend uponthe ability of interviewer to a large extent.Mailing of questionnaires:The researcher and respondent do not come incontact with each other if this method of survey adopted. Questionnaires aremailed to the respondent with a request to return after completing the same.Through these survey was done and the required data was collected from therespondents. Respondents were not easy to tackle as many of them soundeduninterested in even listening to me .I collected the required information from therespondents depending upon their reaction only.As a type of survey, questionnaires also many of the same problems relating toquestion construction and wording that exist in other type of opinion polls: QUESTIONNAIRE47 | P a g e
  48. 48. “Impact of promotional activity on the sales of TFR products”o What is your perception about promotional schemes of TFR?o Are you interested in promotional schemes of TFR?o Which is beneficial for you?o Whether promotional schemes will be recommended by you?o What is reason for not recommending?o Will you go to other brand with promotional schemes or your regular brand without scheme?o Do you wait for promotional schemes for purchasing products and services for your household?o Do you wait for promotional schemes for purchasing luxury and non- necessity products and services?o Products offered in promotional schemes often have low quality?48 | P a g e
  49. 49. “Impact of promotional activity on the sales of TFR products”Strongly Disagree May be Agree StronglyDisagree Agreeo Sales promotion increase your volume of product and services purchased?Strongly Disagree May be Agree StronglyDisagree Agreeo Reasons for purchasing the products?PromotionsProduct SatisfactionGood PackagingNon availability of other brandsRecommendation to purchaseNo particular reasonJust picked it off the shelfLiked what I read about the product on thepackagingLiked the advertisement of the producto Considering your consumption of the product and the purchase of the product due to promotional scheme, which sentence best describes your purchase decision?49 | P a g e
  50. 50. “Impact of promotional activity on the sales of TFR products”I have purchased much more than what I needI have purchased somewhat more than what I needI have purchased some quantity of what I needI have purchased somewhat less than what I needI have purchased much less than what I needo Given below is some common types of promotions that are used by marketers to sell their products. Considering everything, can you please rank these in the order of your preference? Give a rank of 1 to the most preferred, 2 to next most preferred and so on?Different Promotional Schemes RankDirect Price discountBuy 1 get 1 freeBuy 1 get discount on anotherRedeemable discount couponsContests and sweepstakesExchange offersProduct warrantiesBonus packsampleso Considering the product that you have purchased, can you tell how do you come to know about the promotional scheme?From newspaper adFrom television adFrom radio/FM channelsCame to know when visited the storeFrom friends/neighborsFrom the displaysOthers (please specify)o Can you tell the reasons for purchasing the same brand again?Promotions50 | P a g e
  51. 51. “Impact of promotional activity on the sales of TFR products”Product SatisfactionGood PackagingNon availability of other brandsRecommendation to purchaseNo particular reasonJust picked it off the shelfLiked what I read about the product on thepackagingLiked the advertisement of the product DATA ANALYSIS51 | P a g e
  52. 52. “Impact of promotional activity on the sales of TFR products”o What is your perception about promotional schemes of TFR? perception 15% genuine 53% not genuine 32% doubtfulInterpretation: - The sample size is 100. Data collected by these people indicatethe perception about sales promotion in the real consumer mind and finally it‟sreflecting in its purchasing behavior. According to data, 53% confirm the geniusesof sales promotion scheme. 32% goes other way and rest 15% are not sure aboutsales promotion scheme. The total percentage which is around 47% of consumerare either not confirm or sure that this sales promotion scheme actually fooling andmisleading the consumer.o Are you interested in promotional schemes of TFR?52 | P a g e
  53. 53. “Impact of promotional activity on the sales of TFR products” Interest 40 49 yes no depend on scheme 11Interpretation: - Promotional scheme are made for creating interest in consumermind to attract attention of consumer and generate new consumer. This data showthat 49% are attracted and 40% are dependent on the nature of scheme. Thisindicates that if you give fair deal to consumer they are ready to increase theirpurchase. Only 11% are against to the scheme, which is very less in number anddoes not effect to analysis.o Which is beneficial for you? beneficial 37 cash discount free gift 63Interpretation: - According to most of the consumer cash discount is morebeneficial than free gift. 63% goes with cash discount and rest with gift. Cashdiscount gives direct saving option to consumer, but whether gift is useful toparticular consumer or not it‟s a big question?53 | P a g e
  54. 54. “Impact of promotional activity on the sales of TFR products”o Whether promotional schemes will be recommended? recommendation 24 yes no 76Interpretation: - The main purpose of promotional scheme is to generateawareness and interest in consumer. And recommendation is the best tool for this,and this is proved by this survey in which 76% are agree to recommend thepromotional scheme.54 | P a g e
  55. 55. “Impact of promotional activity on the sales of TFR products”o What is reason for not recommending TFR? reasons for not recommending 13 34 product quality sfter sales service genuineness 36 durability 17Interpretation: - Promotional scheme can go either way. So better, we find mainreason for not getting that amount of recommendation. According to data,credibility of scheme and product quality is the highest factor which force forrecommendation. After sale service and durability of product are one of the factorswhich force the recommendation.o Will you go to other brand with promotional schemes or your regular brand without scheme? switching 21 36 regular brand depend on scheme other brand 43Interpretation: - This data indicate that switching to other brand is highlydepending on the nature of scheme. 43% and 21% are ready to change their brandpreference. Only 36% are brand loyal.55 | P a g e
  56. 56. “Impact of promotional activity on the sales of TFR products”o Do you wait for promotional schemes for purchasing products and services for your household? wait for promotional scheme 18 34 yes no depend on scheme 48Interpretation: - For households items as expected, almost half of population i.e.48% is not wait for promotional scheme. 34% decision is depend on the schemeand only 18% can wait.56 | P a g e
  57. 57. “Impact of promotional activity on the sales of TFR products”o Do you wait for promotional schemes for purchasing luxury and non- necessity products and services? wait for promotional schemes for luxury iten 26 yes no 9 depend on scheme 65Interpretation: - Some data show exact opposite result, 65% are going to wait forpurchasing luxury item. Only 9% can‟t wait rest 26% will depend on scheme.o Reasons for purchasing the products- reason for purchasing 39 40 34 35 29 30 25 20 13 11 15 5 10 0 0 0 5 0 reason for purchasingInterpretation: - the data show the actual reason for buying the products.Promotion and product satisfaction are the main reasons for buying behavior.Advertisement also plays a part in deciding consumer buying behavior.57 | P a g e
  58. 58. “Impact of promotional activity on the sales of TFR products”o Considering your consumption of the product and the purchase of the product due to promotional scheme, which sentence best describes your purchase decision- purchase decision 0 3 17 more than needed somewhat more than needae same smount 27 53 less than needed much less than neededInterpretation: - according to this data, more than half agree with increase in theconsumption. 27% say that their consumption is as same as before scheme. 17%their demand decreases with promotional schemes.o Given below are some common types of promotions that are used by marketers to sell their products. Considering everything, can you please rank these in the order of your preference? Give a rank of 1 to the most preferred, 2 to next most preferred and so on.58 | P a g e
  59. 59. “Impact of promotional activity on the sales of TFR products” rank 25 25 20 18 20 15 15 10 10 7 5 5 0 0 0 rankInterpretation: - according to the data, consumer prefer direct price discount thengetting two product for the price of one and warrantee is third largest acc. to thesample.o Considering the product that you have purchased, can you tell how do you come to know about the promotional scheme? promotional medium 34 35 30 25 16 17 20 13 13 15 8 10 0 5 0 promotional mediumInterpretation: - a television ad is the most effective medium for sales promotion.Other mediums accepted by consumer are newspaper, radio advertisement.59 | P a g e
  60. 60. “Impact of promotional activity on the sales of TFR products”o Can you tell the reasons for purchasing the same brand again? reasons for repurchasing 80 72 70 60 50 40 30 17 20 7 4 10 0 0 0 0 0 0 reasons for repurchasingInterpretation: - according to the data for repurchasing of any brand product isthe most demanding aspect in any purchasing decision by consumers. Otheraspects are promotion and advertisement.60 | P a g e
  61. 61. “Impact of promotional activity on the sales of TFR products”Chapter 5: FINDINGS AND CONCLUSIONS5.1 FINDINGS AND CONCLUSIONSo Most of the consumers give green signal to the sales promotional activities. Majority of consumer believe the genuineness of sales promotional scheme.o Consumer is interested in promotional scheme and if companies provide quality scheme which is suited for consumer, they will go for their product. Means type of promotional scheme is important for generating interest.o Consumer prefers cash discount more rather than gift.o Most of the consumers are ready for recommending the scheme. Product quality and genuineness of scheme is the main reason for recommending any promotional scheme.o Promotional scheme if presented in beneficial form can change the brand preference of the consumero For household items, consumers are not going to wait for promotional scheme but for luxury item they are ready to wait. Therefore companies have to focus more on luxury item promotional schemeo Promotional schemes are given on the cost of quality. Quality of the product must be maintained for gaining more customer confidence. And if it is maintained then the volume of the purchase will increase at very fast rate.o Consumer purchasing decision is most influenced by promotional activities, product quality and advertisement for first time purchasing. For repurchasing of products, promotional activities go to the back seat. Only product quality and genuineness can result in repurchasing. So companies have to focus in the quality as well as genuinenesso promotional schemes increase the volume of purchase61 | P a g e
  62. 62. “Impact of promotional activity on the sales of TFR products”o Direct price discount, warranty and buy 1 get 1 offers are the most accepted sales promotion by consumers. In addition, contest and discount coupons are the least trusted sales promotion schemeo Television advertisement is the most effective medium of sales promotion along with radio and newspaper advertisement. Advertisement material displayed outside store is the last influential medium of sales promotion Chapter 6: LimitationsLimitations In every project work there is some kind of limitations which affect the accuracyof work. Same in this project work has been carried out under the followinglimitations:TIME CONSTARINTS: time has been a major limitation while undergoing thestudy.AREA BOUND: since the study was conducted only in NCR so accurate resultwas not obtained.COST CONSTRAINTS: costs involved for the study was also a major limitationfor the project.BIASED APPROACH: the result obtained might be based on the biased approachof the respondents.UNAWARENESS AMONG THE INVESTORS: unawareness among therespondents about the contemporary investment options and their relative benefitsof different brands acted as a major limitation for the project.62 | P a g e
  63. 63. “Impact of promotional activity on the sales of TFR products”BiblographyKotler Philip, Marketing Management, 11th edition. Pearson EducationMarketing ResearchDilipSarvateICMR PublicationsKothari C.R. Research Methodology, Edition 2005 New Age International (p) ltd.New Delhi.www.google.comwww.marketresearce.comhttp://www.economywatch.com/business-and-economy/furniture-industry.htmlhttp://www.furniture-republic.comhttp://www.ihdp-india.com63 | P a g e

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