Roll of Sales Promotion In FMCG

7/30/2019 Roll of Sales Promotion In FMCG

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A

Presentation

on

Role Of Sales Promotion in FMCG

Presented By:-

Name : Enrollment No:

Krunal R. Patel 107390592046

Maulik N. Patel 107390592018

Madhusudan K. Patel 107390592024


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Introduction of FMCG

Fast-moving consumer goods (FMCG) or consumer packaged goods

(CPG) are products that are sold quickly and at relatively low cost.Examples include non-durable goods such as soft drinks, toiletries, and

grocery items. Though the absolute profit made on FMCG products is

relatively small, they generally sell in large quantities, so the cumulative

profit on such products can be substantial.

The following are the main characteristics of FMCGs:

From the consumers' perspective:

Frequent purchase

Low involvement (little or no effort to choose the item products with

strong brand loyalty are exceptions to this rule)

Low price


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From the marketers' angle:

High volumes

Low contribution margins

Extensive distribution networks

High stock turnover

Introduction to the topic

Promotion is one of the important elements of marketing mix. There are

so many elements of promotion such as

Advertising

Direct Marketing

Public Relations

Sales Promotion


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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

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.


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Marketers uses consumer oriented sales promotion tools for thefollowing 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

Tools of Consumer Oriented Sales Promotion:

Coupons

Price-Off

Freebies

Scratch Cards

Lucky Draws

Bundling Offer

Extra Quantity


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Factors Influencing Consumer Oriented sales promotion:

1. Target market

2. Nature of product

3. Stage of product life cycle

4. Budget available for promotion

Research Objectives:

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

To examine tradeoffs, relative importance of different attributes whileresponding to a sales promotion offer.

To study the effect of sales promotions in FMCG sector esp. in soaps anddetergent industry.

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 exploratory.


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Data collection Method:

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.

Secondary Data Collection method:

Reference books.Internet.

Sampling Detail

Target population: The population for this research study consists ofthe residence of Unjha.

1.Sampling unit: In this study the sampling unit is individual

consumer.2.Sample size: 100 consumers 100 retailers.

Sampling method: The sample is selected by using convenience-sampling method and random sampling.


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Bathingsoaps Respondents

Lux 41

Hamam 3

Lifeboy 14

Nima 8

Others 34

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

Bathing soaps

0

10

20

30

40

50

Respondents 41 3 14 8 34

Lux Hamam Lifebuoy Nima Others


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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


Nirma sup Wheel Surf Ariel Othres


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

Particulars RespondentsYes 56

No 44

Brand loyal

0

10

20

30

40

50

60

Respondents 56 44

Yes No


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

Factors Bathing soap Det.powder

Fragrance 19 18Quality 33 36

Company image 16 13

Price 23 19

Packaging 6 11

Others 3 3

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 CompanyImagePrice Packaging Others


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Q4. Do you consider promotional schemes while purchasing aparticular brand of Soap / Detergent?


No 22

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.

Effect of schemes purchase behavior

0

20

40

60

80

100

Respondents 78 22

Yes No


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

Promotional schemes Respondents

Coupons 16price off 84

Freebies 24

scratch cards 12

lucky draw 9

Bundling 31

extra qty. 44

Familiarity of promotional Schemes

0

20

40

60

80

100

Respondents 16 84 24 12 9 31 44

Coupons Price off FreebiesScratch

CardsLucky draw Bundling Extra qty.


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

Source RespondentsRadio 11

TV 69

Newspaper 43

Hoarding 15

Others 12

Mediums to promote the promotional schemes

0

20

40

60

80


Radio TV News.ppr Hoarding Others


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

Particulars Respondents

Yes 58

No 42

Existing scheme on the Soap / Detergent

0

10

20

30

40

50

6070

Respondents 58 42

Yes No


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Q8. If yes, please specify?


3+1/Other Free 36

Discount 22No 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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Q9. If you get an attractive promotional offer in the productother then of your choice will you switch over?


No 27

Switching behavior

0

10

20

30

40

50

60

70

80

Respondents 73 27

Yes No


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Q10. Give reason for the same?


Cost+qty 16

Quality 17Satisfaction 2

Brand loyal 5

More benefit/budget 22

Season change 2

No answer 36

Reason

0

10

20

30

40

Respondents 16 17 2 5 22 2 36

Cost+qty Quality Satisfaction Brand loyalMore

Benefit/bud

Season

ChangeNo answer


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Retailers:-Q1. Since how long are you in this business?


1-5 Years 245-10 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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Q2. Name the Soap / Detergent (Company) you stock for.

Companies Respondent

s

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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Q3. Rank the following factors that customers look for in the purchaseof 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 0Company Image 9 18 34 24 11 4

Price 17 28 24 16 6 9

Packaging 4 5 2 27 38 24

Others 1 2 0 8 34 55

Bathing Soap

0

10

20

30

40

50

60

70

Fragrance 3 24 33 22 10 8Quality 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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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

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

Particular Respondents

Yes 33

No 67

Suggestion

0

10

20

30

40

50

60

70

80

Series1 33 67

Yes No


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Q5. If Yes why?


High margin 9

Quality 17

Relationship 7No reason 67

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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Q6. Do customers look for various schemes in the product?


Yes 92

No 8

Customers look for various schemes

0

20

40

60

80

100

Respondents 92 8Yes No


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Q7. If yes which schemes?

Promotional Schemes Respondents

Coupons 11Price Off 82

Freebies 35

Scratch Cards 2

Lucky Draws 19

Bundling Offer 65

Extra Quantity 79

Which schemes

0

20

40

60

80

100

Respondents 11 82 35 2 19 65 79

Coupons Price Off FreebiesScratch

Cards

Lucky

Draws

Bundling

Offer

Extra

Quantity


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Q8. Which Trade Promotions do various companies offer?

NIRMA

Promotions Respondents

Extra Margin 46

Extra Units 34

credit facility 55

Gifts 24

promo. Exp. 8

H0: Effect of trade promotions for all four brands is similar.H1: Effect of trade promotions for all four brands is not similar.

Trade Promotions by Nirma

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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HUL


Extra Margin 47

Extra Units 34

Credit facility 58

Gifts 25Promo. 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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P & G


Extra Margin 40

Extra Units 33

Credit facility 55Gifts 20

Promo. Exp. 12

Trade Promotions by P&G

0

10

20

30

40

50

60

Series1 40 33 55 20 12



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GODREJ


Extra Margin 46

Extra Units 32Credit facility 57

Gifts 19

Promo. Exp. 18

Trade Promotions by Godrej

0

10

20

30

40

50

60

Series1 46 32 57 19 18



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OTHERS


Extra Margin 30

Extra Units 18

Credit facility 38

Gifts 15

Promo. Exp. 7

Trade Promotions by Others

0

5

10

15

20

25

30

35

40

Series1 30 18 38 15 7



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Findings of the report:

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

Schemes always attract more and more consumers towards particularbrand. Simultaneously it gives idea about the factors which consumerslook most in the product before they make final decision

Price off and extra quantity is the two main offers/schemes whichconsumers have came across at the time of purchase

TV as the best media to market the product which will cover majority ofthe viewer ship. On the second place it shows news papers as the mediato promote the product in the market

People are not much aware of the schemes which continue in the marketit 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 awareschemes in the market.


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People are ready to switch over to another brand if they find betterpromotional schemes which suits their budget means more quantity +less cost + quality.

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

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

People are more quality and price oriented.

Consumer remember that name of the product by the company name andalso 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 ofpersonal relation or that customer are brand loyal


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

Customers are looking for any type of the promotions on the productbefore them going to purchase.

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

NIRMA is mainly offering credit facility which is offered by all majorplayers it may differ in the time limit of the credit.

HUL attracts more consumers through such promotions, such as displayof the product, banners etc.


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Recommendation:

Companies need to create sufficient awareness about sales promotion

schemes through mass media in order to create awareness. FMCGproducts are low involvement products characterized by switchingbehavior. Also the person going to the shop for the purchase of soap isthe final decision maker of the brand. Hence it is essential that companiesneed to design attractive, striking, visible POPs for schemeannouncements.

With respect to nature of scheme, the finding suggested thatpremium (free gift) was popular with companies. While both retailers andconsumers preferred price offs. So it is necessary that the perceived valueof a free gift has to be appealing and high for the target consumers.

Repetitive use of the same premium for a prolonged period may

have negative effect on the loyal customers. When the company is givingits own product free as premium, it needs to ensure the quality of theproduct from it as it is likely to jeopardize the image of both its products.


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The findings exhibited that both the retailers and consumers perceivedthat sales promotion activities carried out by the companies for increasingsales in short term and clearing excess stocks. What it implies is thatcompanies need to use sales promotion synergistically and communicate

so that they provide value to the target audience and enhance brandquality/image perceptions.

Developing a system to tap such responses from time to time both atretailer and consumer level would be helpful for planning future salespromotion activities. In order to build trust and commitment companiesshould tap preferences, perceptions of retailers as well as consumers.


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Limitations of the study

We considered Unjha region only because of limited time duration.

Due to this, our sample size is only 100 in both, which is not very large.

All the respondents could not fill their questionnaire on their own due tolanguage problem and also problem of time and lack of positive behavior.

Respondent may give biased answer due to some lack of informationabout other brands.

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


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Conclusion

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

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

towards the products.

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

With the Increasing number of supermarket, the branded packaged goodswork as silent sales person. So in such stores, sales promotion plays amore effective role in stimulating consumers demands.


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Bibliography

BOOKS

Philip Kotler, Marketing Management, 11th edition, Pearson educationAsia Publication.

C.R.Kothari, Research Methodology methods & techniques, New AgeInternational (p) ltd. publishers, 2nd edition.

WEBSITES http://en.wikipedia.org/wiki/Fast-moving_consumer_goods

http://www.nirma.co.in

http://www.nirma.co.in/pdf/ar_07_08.pdf

http://www.hul.co.in


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ThankYou...

Roll of Sales Promotion In FMCG

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