Saheer LohithSuraj

PRICE PROMOTIONS BASED ON BRAND LOYALTY IN FMCG

IntroductionBrand loyalty Spurious loyaltyPrice promotionShort term success of price promotionsFMCG

ObjectivesTo study price promotion based on brand

loyalty in FMCG sector.To examine price offs and relative

importance of different attributes while responding to a price promotion in brand loyalty.

To study the effect of price promotion in Weak and Strong brands.

Methodology

Examining the effect of price promotion used by Stronger brands and the Weaker brands.

The data is collected from 127 retailer units of Coimbatore district.

Percentage sales method.

H0: There is no significant relationship between price promotion and brand loyalty

H1: There is a significant relationship between price promotion and brand loyalty

Hypothesis

Strong brand

Majority of the people know about the brand.

Brand knowledge is widespread.

No need of explanation about the brand .

Easily remember its name.

Few people know the brand.

Brand knowledge is limited.

Explanation at length about the brand is required.

People can’t remember its name.

Comparison

Weaker brand

Hindustan Unilever Limited

Analysis of brands(a) Sales & profit

The chart indicates that the sales of the HUL for the year 2009-10 are 18220.27 and for 2010-11 are 20305.54, it shows their sales in the increasing trend. Profit for the year also is high for the year 2010-11 with compare to 2009-10.

Nirma Ltd

The sales for the year 2009-10 is 5008.72 , but in 2010-11 is decreased to 4831.61.The profit for the year is increased in 2010-11 with comparing to 2009-10, so by studying the sales and profit of both the brands for the three years, it shows that the Nirma is weaker than the HUL.

Characteristics of sample

0

10

20

30

40

50

60

Nirma Hul P&G others

25

60

45

7

Stock

Respondents

(a)Brand Stock

It gives idea about the capacity of the retailers to stock the goods and also the variety of the products they are stocking. It will also make clear the demand of the goods in their stores and the selling of the product in market. Most of the retailer stocks all types of soap and detergent.

(b) Factor ranking

1 2 3 4 5 60

10

20

30

40

50

60

70

Fragrance

Quality

Company Image

Price

Packaging

Others

It tells about the priority the influencing factors to the consumers and also the weight age of that factor over other factors.

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

(c) Purchasing Pattern

Respondent0

50

100

Impulsive buying Expulsive buying

4285

Purchasing Pattern

Respondent

The graph shows that many retailers are not suggested to purchase particular brand because of personal relation or that customer are brand loyal. While 42% of the retailer are suggesting the consumer’s to buy particular brand. There could be many reasons like, extra margin, relations with consumers and quality of the products which retailer may get the benefit of the same.

(d) Impulsive buying

38

55

2212

Respondents

High margin

Quality

Relationship

No reason

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

(e) Impulsive offers

Respondents

0

50

1533

105 8

2135

Respondents

The chart shows the demand of various types of promotional schemes in the market by the consumers. Almost all types of schemes are being demanded by the consumers in the market but there are three major schemes which consumers generally look at the time of purchase or before that.

Promotions of Nirma

37

3316

30

11

Nirma

Extra Margin

Extra Units

credit facility

Gifts

Promo. Exp.

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

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

Promotions of HUL

0

2

4

6

8

10

12

Extra Margin

Extra Units

Credit facility

Gifts Promo. Exp.

1012

0

7

11

HUL

HUL Respondents

The chart shows that the HUL is not using the Price promotions regularly, they using it occasionally. Only few retailers respond to promotions offered by the HUL

Finally after comparing both the brands i.e. Nirma & HUL the results predicts that the price promotions are used by the Nirma is more than the HUL. Since the Nirma is the weaker brand hey using more tactics of promotions to cope up with the market situation. On the other hand HUL is building the customer by their brand image and also not using promotions frequently because of their quality in their products

Conclusion Price Promotion has ceased to be major

differentiator .Price off and Buy one get one free offers.Analysis of results.