roll of sales promotion in fmcg
TRANSCRIPT
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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
Respondents 19 14 35 18 14
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?
Particulars RespondentsYes 78
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
Respondents 11 69 43 15 12
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?
Particulars Respondents
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?
Particulars RespondentsYes 73
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?
Particulars Respondents
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?
Particulars Respondents
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?
Particular Respondents
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?
Particular Respondents
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
Promotions Respondents
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
Promotions Respondents
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
Extra Margin Extra Units Credit facility Gifts Promo. Exp.
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GODREJ
Promotions Respondents
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
Extra Margin Extra Units Credit facility Gifts Promo. Exp.
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OTHERS
Promotions Respondents
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
Extra Margin Extra Units Credit facility Gifts Promo. Exp.
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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...