A Presentation on Role Of Sales Promotion in FMCG

Presented By:Name : Krunal R. Patel Maulik N. Patel Madhusudan K. Patel Enrollment No: 107390592046 107390592018 107390592024

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

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

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.

Marketers uses consumer oriented sales promotion tools for the following reasons:
To To To To To To To increase short term sales induce trial reduce inventory establish a brand name make cross selling cope up with competition avoid advertising clutter

Tools of Consumer Oriented Sales Promotion: Coupons Price-Off Freebies Scratch Cards Lucky Draws Bundling Offer Extra Quantity

 1. 2. 3. 4.

Factors Influencing Consumer Oriented sales promotion: Target market Nature of product Stage of product life cycle Budget available for promotion Research Objectives: To study consumer preferences with respect to sales promotion in FMCG sector. To examine tradeoffs, relative importance of different attributes while responding to a sales promotion offer. To study the effect of sales promotions in FMCG sector esp. in soaps and detergent 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.

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: 1.Sampling unit: 2.Sample size: Sampling method: The population for this research study consists of the residence of Unjha. In this study the sampling unit is individual consumer. 100 consumers 100 retailers. The sample is selected by using conveniencesampling method and random sampling.

DATA ANALYSIS Consumers:

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

Bathing soaps Lux Hamam Lifeboy Nima Others Bathing soaps

50 40 30 20 10 0 Respondents Lux Hamam Lifebuoy

Respondents 41 3 14 8 34

Nima

Others

41

14

34

Detergent powder Nirma supper Wheel Surf Ariel Others

Respondents 19 14 35 18 14

Detergent Powder
40 35 30 25 20 15 10 5 0 Respondents Nirma sup 19 Wheel 14 Surf 35 Ariel 18 Othres 14

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

Particulars Yes No

Respondents 56 44

Brand loyal
60 50 40 30 20 10 0 Respondents Yes 56 No 44

Q3. Which factors do you normally consider while purchasing a particular brand of Soap / Detergents?
Factors Fragrance Quality Company image Price Packaging Others Bathing soap 19 33 16 23 6 3 Det.powder 18 36 13 19 11 3

Factors affecting purchase behavior

40

30
20 10 0 Fragrance Bathing soap 19 18 Quality 33 36 Company Image 16 13

Price 23 19

Packaging 6 11

Others 3 3

Det.powder

Q4. Do you consider promotional schemes while purchasing a particular brand of Soap / Detergent?
Particulars Yes No Respondents 78 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

100
80 60 40 20 0 Respondents Yes 78 No 22

Q5. Which of the following promotional schemes you have come across so far?
Promotional schemes Coupons price off Freebies scratch cards lucky draw Bundling extra qty. Respondents 16 84 24 12 9 31 44

Familiarity of promotional Schemes

100 80 60 40 20 0 Coupons Respondents 16 Price off 84 Freebies 24

Scratch Cards
12

Lucky draw Bundling 9 31

Extra qty. 44

Q6. Which medium do you feel is suitable to promote the various promotional schemes?
Source Radio TV Newspaper Hoarding Others Respondents 11 69 43 15 12

Mediums to promote the promotional schemes

80 60 40 20

0 Respondents

Radio 11

TV 69

News.ppr 43

Hoarding 15

Others 12

Q7. Is there any existing scheme on the Soap / Detergent you are currently using?
Particulars Yes No Respondents 58 42

Existing scheme on the Soap / Detergent

70 60 50

40
30 20 10 0 Respondents Yes 58 No 42

Q8. If yes, please specify?

Particulars 3+1/Other Free Discount No idea No answer Respondents 36 22 6 36

40 35 30 25 20 15 10 5 0 Series1 3+1/Other Free 36 Discount 22 No idea 6 No answer 36

Q9. If you get an attractive promotional offer in the product other then of your choice will you switch over?
Particulars Yes No Respondents 73 27

Switching behavior
80 70 60 50 40 30 20 10 0 Respondents Yes 73 No 27

Q10. Give reason for the same?

Particulars Cost+qty Quality Satisfaction Brand loyal More benefit/budget Season change No answer Respondents 16 17 2 5 22 2 36

Reason
40 30 20 10 0 Cost+qty Respondents 16 Quality 17 Satisfaction Brand loyal 2 5

More Benefit/bud 22

Season Change 2

No answer 36

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

Particulars 1-5 Years 5-10 Years More than 10 years Respondents 24 27 49

60 50 40 30 20 10 0 Series1

1-5 Years 24

5-10 Years 27

More than 10 years 49

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

Companies Nirma HUL P&G Godrej Others Respondent s 96 100 90 94 68

Soap / Detergent in stock

120 100 80 60 40 20 0 Series1 Nirma 96 HUL 100 P&G 90 Godrej 94 Others 68

Q3. Rank the following factors that customers look for in the purchase of Soap / Detergent. (Rank from 1 to 6)
Factors Fragrance Quality Company Image Price Packaging Others 1 3 66 9 17 4 1

2 24 23 18
28 5 2

3 33 7 34
24 2 0

4 22 3 24
16 27 8

5 10 1 11
6 38 34

6 8 0 4
9 24 55

Bathing Soap
70 60 50 40 30 20 10 1 3 Fragrance 66 Quality Company Image 9 17 Price 4 Packaging 1 Others 0 2 24 23 18 28 5 2 3 33 7 34 24 2 0 4 22 3 24 16 27 8 5 10 1 11 6 38 34 6 8 0 4 9 24 55

Factors Fragrance Quality Company Image Price Packaging Others

1 11 43 13 27 6 0

2 17 34 16 28 5 0

3 41 16 27 14 2 0

4 21 6 26 9 33 5

5 7 1 11 6 43 32

6 3 0 7 16 11 63

Detergent
70 60 50

40
30 20 10 0 Fragrance Quality Company Image Price Packaging Others 1 11 43 13 27 6 0 2 17 34 16 28 5 0 3 41 16 27 14 2 0 4 21 6 26 9 33 5 5 7 1 11 6 43 32 6 3 0 7 16 11 63

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

Particular Yes No Respondents 33 67

Suggestion
80
70 60 50 40 30 20 10 0 Series1 Yes 33 No 67

Q5. If Yes why?

Particular High margin Quality Relationship No reason Respondents 9 17 7 67

If yes
80
70 60 50 40 30 20 10 0 Respondents High margin 9 Quality 17 Relationship 7 No reason 67

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

Particular Yes No Respondents 92 8

Customers look for various schemes

100 80 60 40 20 0 Respondents

Yes 92

No 8

Q7. If yes which schemes?

Promotional Schemes Coupons Price Off Freebies Scratch Cards Lucky Draws Bundling Offer Extra Quantity Respondents 11 82 35 2 19 65 79

Which schemes
100

80
60 40 20 0 Coupons Respondents 11 Price Off 82 Freebies 35 Scratch Cards 2 Lucky Draws 19 Bundling Offer 65 Extra Quantity 79

Q8. Which Trade Promotions do various companies offer?

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

60 50 40 30 20 10 0 Series1 Extra Margin 46 Extra Units 34 credit facility 55 gifts 24 promo. Exp. 8

HUL Promotions Extra Margin Extra Units Credit facility Gifts Promo. Exp. Respondents 47 34 58 25 22

Trade Promotions by HUL

70 60 50 40 30 20 10 0 Series1 Extra Margin 47 Extra Units 34 Credit facility 58 Gifts 25 Promo. Exp. 22

P&G Promotions Extra Margin Extra Units Credit facility Gifts Promo. Exp. Respondents 40 33 55 20 12

Trade Promotions by P&G

60 50 40 30 20 10 0 Series1 Extra Margin 40 Extra Units 33 Credit facility 55 Gifts 20 Promo. Exp. 12

GODREJ Promotions Extra Margin Extra Units Credit facility Gifts Promo. Exp. Respondents 46 32 57 19 18

Trade Promotions by Godrej

60 50 40 30 20 10 0 Series1 Extra Margin 46 Extra Units 32 Credit facility 57 Gifts 19 Promo. Exp. 18

OTHERS Promotions Extra Margin Extra Units Credit facility Gifts Promo. Exp. Respondents 30 18 38 15 7

Trade Promotions by Others

40 35 30 25

20
15 10

5
0 Series1 Extra Margin 30 Extra Units 18 Credit facility 38 Gifts 15 Promo. Exp. 7

Findings of the report: Quality as the most influencing factors in the purchase decision while price is also an important for purchase decision.

Schemes always attract more and more consumers towards particular brand. Simultaneously it gives idea about the factors which consumers look most in the product before they make final decision Price off and extra quantity is the two main offers/schemes which consumers have came across at the time of purchase

TV as the best media to market the product which will cover majority of the viewer ship. On the second place it shows news papers as the media to promote the product in the market
People are not much aware of the schemes which continue in the market it may be because of the present stock of the product at their place. 1+1 or 2+1 or other free schemes are more demanded and more aware schemes in the market.

People are ready to switch over to another brand if they find better promotional schemes which suits their budget means more quantity + less cost + quality.
Extra quantity with less or same price, more satisfaction, quality and other factors influence consumers to switch over too other brands. Retailer stocks all types of soap and detergent because of competition. People are more quality and price oriented.

Consumer remember that name of the product by the company name and also from the past performance of that company
Consumer remembers that name of the product by the company name and also from the past performance of that company Retailers are not suggest to purchase particular brand because of personal relation or that customer are brand loyal

Margin and of better relations with consumers and too provide quality product to consumers they suggest consumers too bye particular brand.
Customers are looking for any type of the promotions on the product before them going to purchase.

Price off, product bundling and extra quantity are more demanded by the consumers over others schemes. NIRMA is mainly offering credit facility which is offered by all major players it may differ in the time limit of the credit.

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

Recommendation:
Companies need to create sufficient awareness about sales promotion schemes through mass media in order to create awareness. FMCG products are low involvement products characterized by switching behavior. Also the person going to the shop for the purchase of soap is the final decision maker of the brand. Hence it is essential that companies need to design attractive, striking, visible POPs for scheme announcements. With respect to nature of scheme, the finding suggested that premium (free gift) was popular with companies. While both retailers and consumers preferred price offs. So it is necessary that the perceived value of a free gift 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 giving its own product free as premium, it needs to ensure the quality of the product from it as it is likely to jeopardize the image of both its products.

The findings exhibited that both the retailers and consumers perceived that sales promotion activities carried out by the companies for increasing sales in short term and clearing excess stocks. What it implies is that companies need to use sales promotion synergistically and communicate so that they provide value to the target audience and enhance brand quality/image perceptions. Developing a system to tap such responses from time to time both at retailer and consumer level would be helpful for planning future sales promotion activities. In order to build trust and commitment companies should tap preferences, perceptions of retailers as well as consumers.

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 to language problem and also problem of time and lack of positive behavior. Respondent may give biased answer due to some lack of information about other brands. Findings of the study are based on the assumption that the respondents have given correct information.

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

Sales Promotion has ceased to be major differentiator at least in the metros, with almost all companies offering similar freebies and gifts. As a result now marketers have to find out some innovative ways of sales promotion to differentiate from competitors. Currently Price off and Buy one 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 short term increase in sales and to induce first trial. These types of promotional schemes should be consistent and changed from time to time depending upon season and competitors schemes.

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

Bibliography
BOOKS

Philip Kotler, Marketing Management, 11th edition, Pearson education Asia Publication. C.R.Kothari, Research Methodology methods & techniques, New Age International (p) ltd. publishers, 2nd edition.

WEBSITES http://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

Thank You...