A role of Sales Promotion in Fast moving consumer goodsINTRODUCTIONIn todays world market the people are more insist for consumer goods. Consumer goods are those goods which are entailing for human life in daily use. So demand for those goods also increasing day by day. These goods are essential for human life. There are many industries those who are like to produce such types of goods which are essential to consumer in his day to day life. Industries or companies however, provides such products are initially known as, Fast Moving Consumer Goods i.e. FMCG industries. These companies produce such types of goods which are require in human day to day life such as bath soap, toothpaste, hair oil, detergent etc. Products which have a quick turnover, and relatively low cost are known as Fast Moving Consumer Goods (FMCG). FMCG products are those that get replaced within a year. FMCG sector is the fourth largest sector in the economy and creates employment for more than three million people in downstream activities. Its principal constituents are Household Care, Personal Care and Food & Beverages. The total FMCG market is in excess of Rs. 85,000 Crores. It is currently growing at double digit growth rate and is expected to maintain a high growth rate.. The Rs 85,000-crore Indian FMCG industry is expected to register a healthy growth in the third quarter of 2010-11 despite the economic downturn. In simple words, the more loyal the customers, the higher the customer equity

OBJECTIVES OF THE STUDY

1. To study the concept of FMCG i.e. Fast Moving Consumer Goods.

2. To study consumer preferences with respect to sales promotion in FMCG sector.

3. To study the sales promotional strategies.

4. To study and analyze FMCG sector with SWOT analysis.

5. To study how the FMCG improves marketing productivity through sales promotion activities.

6. To study the relationship with consumer maintained by FMCG with the help of sales promotional strategies.

7. To study the factors influencing consumer oriented sales promotion.

8. To study the factors influencing Trade oriented sales promotion.

9. To study the effect of sales promotion activities on FMCG sector.

10. To study consumer behaviour in purchase of soaps and detergent.

PRODUCT CATEGORIES UNDER STUDY

DETERGENTS: Washing Powder for Clothes TOILETERIES: Soaps

RESEARCH METHODOLOGY

Primary Data :-

Primary data could be collected through survey method as well as questionnaire method and personal interviews with certain consumers who are likely to use the consumer goods as per company goodwill in their mind. Type of structured questionnaire is open ended and closed ended. Secondary Data :-

Secondary data would be collected from books, newspaper, articles, internet, magazines, journal etc.SAMPLING DETAIL1. Target population: The population for this research study consists of the residence of Kalyan.2. Sampling unit:In this study the sampling unit is individual consumer.3. Sampling method: Sample is selected by using convenience-sampling method.

LIMITATIONS OF THE STUDY

We considered Kalyan region only because of limited time duration. Due to this, our sample size is only 100, 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 behaviour. 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.

CHAPTER SCHEME

1. Introduction Page8-10I. Concept & definitionII. Characteristics of FMCG ProductIII. Objective of the studyIV. Methodology and Sampling details

2. An overview of FMCG Sector and some FMCG companies. Page11 143. An overview of Sales Promotion concept. Page15 264. Sales promotional strategies Page27 305. SWOT Analysis and Impact of Promotions Page31 346. Data Analysis of the survey Page35 657. Finding, Recommendation and Conclusion Page66 718. Annexure, Questionnaire Page72 81Bibliography Page83 CHAPTER - 1

INTRODUCTION

CONCEPT & DEFINITION

The term FMCG (fast moving consumer goods), although popular and frequently used does not have a standard definition and is generally used in India to refer to products of everyday use. Conceptually, however, the term refers to relatively fast moving items that are used directly by the consumer. Thus, a significant gap exists between the general use and the conceptual meaning of the One of the factors on which the turnaround depends is the purchase cycle. However, the purchase cycle for the same product tend to vary across population segments. Many low-income households are forced to buy certain products more frequently because of lack of liquidity and storage space while relatively high-income households buy the same products more infrequently. Similarly, the purchase cycle also tends to vary because of cultural factors. Most Indians, typically, prefer fresh food articles and therefore to buy relatively small quantities more frequently. This is in sharp contrast with what happens in most western countries, where the practice of buying and socking foods for relatively longer period is more prevalent.

CHARACTERISTICS OF FMCG PRODUCT

Individual items are of small value. But all FMCG products put together account for a significant part of the consumer's budget. The consumer spends little time on the purchase decision. Rarely does he/she look for technical specifications (in contrast to industrial goods). Brand loyalties or recommendations of reliable retailer/dealer drive purchase decisions. Trial of a new product i.e. brand switching is often induced by heavy advertisement, recommendation of the retailer or neighbours/friends.

OBJECTIVE OF THE STUDY

1. To study consumer preferences with respect to sales promotion in FMCG sector.

2. To examine tradeoffs, relative importance of different attributes while responding to a sales promotion offer.

3. To study the effect of sales promotions in FMCG sector esp. in soaps and detergent industry.4. To study consumer behaviour in purchase of soaps and detergent

METHODOLGY AND SAMPLING DETAILS

Research design selected for this project is Descriptive.

Data collection Method:

(a) 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.

(b) Secondary Data Collection method:

Reference books.

Internet.

Articles, Magazines and Journals

Sampling Detail1. Target population: The population for this research study consists of the residence of Kalyan.2. Sampling unit:In this study the sampling unit is individual consumer.3. Sampling method: Sample is selected by using convenience-sampling method.

CHAPTER - 2AN OVERVIEW OF FMCG SECTOR AND SOME FMCG COMPANIES. FMCG SECTOR

Individual require goods which are require daily in their life. Those goods are called as consumer goods which can be produce by FMCG companies. These companies produce consumer goods, sell those goods into consumer market and makes huge amount of profit. These goods include such goods which the people required in their day to day life for e.g. hair oil, toothpaste, shaving cream, soap, detergent etc.FMCG stands for Fast Moving Consumer Goods which is also known as consumer packaged goods (CPG). FMCG products are relatively small but in generally include a wide range of frequently purchased consumer products such as soap, cosmetics etc. as well as other non-durable such as glassware, bulbs, batteries, paper product and plastic goods. FMCG may also include pharmaceuticals, consumer electronic, packaged food products and drinks, although these are often categorized separately.. In short, FMCG provides such goods or consumer market sells those goods which are daily required in human life. Broadly speaking most of the companies using Marketing Mix which includesPrice, Place (Channel of Distribution)Product Promotion.

SOME TOP TEN FMCG COMPANIES

Hindustan Unilever Ltd.:It is a leading name in India in producing personal and healthcare products. The company was awarded the Golden Super Star Trading Company status from the Government of India. Dabur India Ltd.:Dabur India produces a variety of healthcare products and enjoys a turnover of approximately INR 1899 crores. Indian Tobacco Company:ITC is in existence since 1910 and has diversified its business in producing a variety of consumer goods. The company is known for ensuring the highest level of employee satisfaction. Nestle India:It started its journey in 1912 as an Anglo-Swiss collaboration for condensed milk export. It produces a variety of dairy products of international standard. Amul:This is the first co-operative milk marketing initiative in India. Currently, it is the market leader in producing milk, butter, cheese, ghee, chocolates, ice cream and other dairy items.

Cadbury India:Cadbury is synonymous with chocolates in India. But apart from chocolates, the company also manufactures other food and health drink products like Bourn-vita. Procter & Gamble Hygiene and Health Care:The product range of P&G comprises personal care products, pet foods and variety of domestic cleaners. Britannia Industries:Britannia is known for manufacturing varieties of biscuits, cookies and also milk, cheese, butter, ghee etc and enjoys all India market. Colgate Palmolive:It is a trusted name in India for personal care, home care, pet care and oral care products. Colgate is named as Indias Most Trusted Brand in 2011 in the survey conducted by Nielson.

CHAPTER - 3

AN OVERVIEW OF SALES PROMOTION CONCEPT

CONCEPT OF SALES PRMOTION

Traditionally, sales Promotions have been used by marketer to increase sales in the short term. However, in the last few decades this communication tool has evolved and now is considered from a strategic point of view. For this reason, it is necessary to realize new studies in this area and study how consumers evaluate sales promotions. Sales promotions have grown in both importance and frequency over the past few decades. Although an accurate estimate for total sales promotions expenditures does not exist, we can be sure that the trend is up. Sales promotion serves three essential roles: It informs, persuades and reminds prospective customers about a company and its products. Even the most useful product or brand will be a failure if no one knows that it is available. As we know, channels of distribution take more time in creating awareness because a product has to pass through many hands between a producer and consumers.

CONSUMER ORIENTED SALES PROMOTION

Consumer Oriented Sales Promotion is the main topic of this project. Here emphasize is given to motivate consumer to increase sales. Consumer Oriented Sales Promotion includes Sampling, Couponing, Premiums, Contest, Refunds, Rebates, Bonus Packs, Price-off, Event marketing etc.Definition: 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.Tools of Consumer Oriented Sales Promotion:There are so many tools or technique available to the marketers for achieving objective of sales promotion. These tools should be used considering all other factors affecting such as cost, time, competitors, availability of goods etc. These tools are as under1. Coupons2. Price-Off3. Freebies4. Scratch Cards5. Lucky Draws6. Bundling Offer7. Extra Quantity

Lets have look at each tool1. Coupons:Coupon is the oldest and most widely used way of sales promotion. Coupons have been used since 1895. It is mostly used by packaged goods. It is worthwhile to use coupon as a promotion tool because data shows that market for packaged goods increased from 16 billion in 1968 to 310 billion in 1994. To boost up the sales not only manufacturer but retailers personally can also used. A coupon leads to price reductions so as to encourage price sensitive customers. Non users can try a product which may leads to regular sales.2. Price-off:

A price-off is simply a reduction in the price of the product to increase sales and is very often used when introduction a new product. A reduction in price always increases sales but the use of this technique should be carefully considered in the current market situation. Price-off is the most preferred sales promotion technique because consumers response very positively to this scheme. Not only that but it also cause large increase in sales volume. E.g. Krack Jack offers 30% Price-off.3. Freebies:

Freebies are a popular form of modern marketing and are some of the best things about the internet. The definition of freebies is products or services given away for free at no cost to the consumer. Well thats the definition we came up with. I am a bargain freebie shopper, pretty much going for any free product and informing everyone about it. At different times, big and small companies often give away prizes and money which is too good to be true. Often its in the pursuit of more customers or a larger fan base and it often works.

4. Scratch Cards

A scratch card (also called a scratch off, scratch ticket, scratcher, scratchie, scratch-it, scratch game, scratch-and-win or instant game) is a small token, usually made of cardboard, where one or more areas contain concealed information: they are covered by a substance that cannot be seen through, but can be scratched off.

5. Bundling Offers

Product bundling is a marketing strategy that involves offering several products for sale as one combined product. This strategy is very common in the software business (for example: bundle a word processor, a spreadsheet, and a database into a single office suite), in the cable television industry (for example, basic cable in the United States generally offers many channels at one price),.*******************

CHAPTER - 4

SALES PROMOTION STRATEGY

CONCEPT

Sales promotions are specific efforts that are designed to have an immediate impact on sales. It refers to many kinds of incentives and techniques directed towards consumers and traders with the intention to produce immediate or short-term sales effects. For example, buy one get on free, introductory offers etc. There are three types of sales promotion strategies: Push Strategy:

A push sales promotion strategy involves pushing distributors and retailers to sell your products and services to the consumer by offering various kinds of promotions and personal selling efforts. What happens here is that a company promotes their product/services to a reseller who in turn promotes it to another reseller or to the consumer. The basic objective of this strategy is to persuade retailers, wholesalers and distributors to carry your brand, give it shelf space, promote it by advertising, and ultimately push it forward to the consumer. Typical push sales promotion strategies include; buy-back guarantees, free trials, contests, discounts ,and specialty advertising items. Pull Strategy:

A pull sales promotion strategy focuses more on the consumer instead of the reseller or distributor. This strategy involves getting the consumer to pull or purchase the product/services directly from the company itself. This strategy targets its marketing efforts directly on the consumers with the hope that it will stimulate interest and demand for the product. This pull strategy is often used when distributors are reluctant to carry or distribute a product. Typical pull sales promotion strategies include; samples, coupons, cash refunds or rebates, loyalty programs and rewards, contests, sweepstakes, games, and point-of-purchase displays.

A Combination of Two Strategies:

A combination sales promotion strategy is just that; it is a combination of a push and a pull strategy. It focuses both on the distributor as well as the consumers, targeting both parties directly. It offers consumer incentives side by side with dealer discounts.

CHAPTER - 5

SWOT ANALYSIS AND IMPACT OF PROMOTIONS

SWOT ANALYSIS OF FMCG SECTOR

Strengths: Well-established distribution network extending to rural areas. Strong brands in the FMCG sector. Low cost operations. Weaknesses: Low export levels. Small-scale sector reservations limit ability to invest in technology and achieve economies of scale. Several "me-too products. Opportunities: Large domestic markets. Export potential. Increasing income levels will result in faster revenue growth.. Untapped rural market High consumer goods speding

Threats: Removal of import restrictions resulting in replacing of domestic brands. Tax and regulatory structures. Slowdown in rural demand.

CHAPTER - 6

DATA ANALYSIS OF THE SURVEYDATA ANALYSIS OF CONSUMER

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

Bathing soapsRespondents

Lux41

Hamm3

Lifebuoy14

Nima8

Others34

Bathing soaps01020304050Respondents41314834LuxHamamLifebuoyNimaOthersInterpretation: The above question has been formed to know the soaps and detergents at the top of the mind of the customers. It shows those consumers purchase and use of that particular brand. It will help to the company to know the market scenario and the major brands in the market. Form the above result it is clear that out of 100 customers more than 40 are consumers are having the same brand as the image in their mind, whereas others category is also showing the higher graph than these 3 major players(Hamam, Lifebuoy, Nima).Detergent powderRespondents

Nirma supper19

Wheel14

Surf35

Ariel18

Others14

Detergent Powder0510152025303540Respondents1914351814Nirma supWheelSurfArielOthresInterpretation:Form the above result it is clear that out of 100 customers 35 are purchasing the same brand of detergent, whereas all others are on same level. Q2. Do you always buy the same brand of Soap / Detergent?

ParticularsRespondents

Yes56

No44

Brand loyal0102030405060Respondents5644Yes NoInterpretation:The objective behind the formation of this question is to know the level of brand loyalty of the consumers towards the brands of soaps available in the market. The above figure shows that on 56% of the respondents are loyal to their brands of detergent/soap. FMCG are such a market where the level of loyalty remains low and this is because of many reasons.Q3. Which factors do you normally consider while purchasing a particular brand of Soap / Detergents?

FactorsBathing soapDet.powder

Fragrance1918

Quality3336

Company image1613

Price2319

Packaging611

Others33

Factors affecting purchase behaviour 010203040Bathing soap1933162363Det.powder18361319113FragranceQuality Company Image Price Packaging Others Interpretation: The objective behind this question is to know the effect of influencing factors in the purchase decision of the soaps and detergent powders. It mainly contains the factors like, quality which players an important role in the purchase decision of the soaps and detergents both. If we look at the graph of the soaps and detergent it shows quality as the most influencing factors in the purchase decision while price is also an important for purchase decision. their new products in the market with which schemes.

DATA ANALYSIS OF RETAILERS Q1. Since how long are you in this business?

ParticularsRespondents

1-5 Years24

5-10 Years27

More than 10 years49

0102030405060Respond2427491-5 Years5-10 YearsMore than 10 yearsInterpretation:

This question gives idea about the benefit to the retailers who are on the market from long period of time and the benefits they are getting more as compare to others. It also shows their experience in the field and the services they are providing too their new and regular customers..

Q 2. Name the Soap / Detergent (Company) you stock for.CompaniesRespondents

Nirma96

HUL100

P&G90

Godrej94

Others68

Soap / Detergent in stock020406080100120Series196100909468NirmaHULP&GGodrejOthersInterpretation:

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.Q3. Rank the following factors that customers look for in the purchase of Soap / Detergent. (Rank from 1 to 6)Factors123456

Fragrance3243322108

Quality66237310

Company Image9183424114

Price1728241669

Packaging452273824

Others12083455

Bathing Soap010203040506070Fragrance3243322108Quality66237310Company Image9183424114Price1728241669Packaging452273824Others12083455123456Interpretation:

It gives an idea about the priority the influencing factors to the consumers and also the weight age of that factor over other factors.In the above result people are more quality and price oriented. On the other hand people are also conscious about the company image because sometimes the consumer remembers 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.

Factors123456

Fragrance1117412173

Quality433416610

Company Image

13

16

27

26

11

7

Price2728149616

Packaging652334311

Others00053263

Detergent010203040506070Fragrance1117412173Quality433416610Company Image13162726117Price2728149616Packaging652334311Others00053263123456

Interpretation : It gives an idea about the priority the influencing factors to the consumers and also the weight age of that factor over other factors.In the above result people are more quality and price oriented. On the other hand people are also conscious about the company image because sometimes the consumer remembers that name of the product by the company name and also from the past performance of that company. Fragrance and packaging are also play important role for purchasing detergent powder.

CHAPTER 7FINDING, RECOMMENDATION AND CONCLUSION FINDINGS

Sales Promotion, a short-term inducement, offered to a consumer or trade has gained momentum as a promotional tool world over. It represents nearly three fourth of the marketing budget at most consumer product companies. Sales promotions can enhance consumers self-perception of being smart or a good shopper FMCG are such a market where the level of loyalty remains low and this is because of many reasons. 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. 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. Customers are looking for any type of the promotions on the product before them going to purchase. NIRMA is mainly offering credit facility which is offered by all major players it may differ in the time limit of the credit. RECOMMENDATION

The findings of the empirical study indicate that unless the brand to be promoted is in the consideration set of the consumer, sales promotion by itself is unlikely to have any major impact. Clearly this shows that managers need to invest into brand building exercise so that his/her brand appears in the consideration set of the target consumers. Only after this should he spend time, money and energy on sales promotion activities. 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 behaviour. 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. The findings exhibited that both the retailers and consumers perceived that sales promotion activities.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 consumer. 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.. Currently Price off and buy one get one free offers are very effective to attract the consumers towards the products. 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.One of the very important facts we came to know from this project is that sale of goods which contain large quantity and having big packaging e.g. detergent are stagnating because consumer prefer to buy small pack goods, the reasons are: small pack goods reduce risk of bad quality, It had low cost or say price, and last but important factor i.e. mentality to purchase just to try first. Sales of small pack goods are quite high, but from the companys point of view small pack goods is less profitable compare to large pack goods.So here marketer tries to increase sales of large pack goods by using sales promotion tactics like price off and percentage extra.******************CHAPTER 8ANNEXURE QUESTIONNAIRE FOR CUSTOMERI am student of M.com (Semester III) studying in SMT. CHM COLLEGE, ULHASNAGAR and carrying out a survey for our academic project to Role of sales promotions in FMCG. So please fill this questionnaire. Your identity would reveale and information will only be used for academic purpose.Q1. Which brand of Soap / Detergent do you use? Detergent powderRespondent

Nirma

Wheel

Surf

Ariel

Others

Bathing soapsRespondent

Lux

Hamam

Lifebuoy

Nirma

Others

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

Yes/No

Q3. Which factors do you normally consider while purchasing a particular brand of Soap / Detergents?FactorsBathing soapDet.powder

Fragrance

Quality

Company image

Price

Packaging

Others

Q4. Do you consider promotional schemes while purchasing a particular brand of Soap / Detergent?ParticularsRespondent

Yes

No

Q5. Which of the following promotional schemes you have come across so far?Promotional schemesRespondent

Coupons

price off

QUESTIONNAIRE FOR RETAILERSQUESTIONNAIRE

I am student of M.com. (Semester III) studying in SMT. CHM COLLEGE, ULHASNAGAR and carrying out a survey for our academic project to Role of sales promotions in FMCG. So please fill this questionnaire. Your identity would not be revealed and information will only be used for academic purpose.Q1. Since how long are you in this business?

ParticularsRespondent

1-5 Years

5-10 Years

More than 10 years

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

CompaniesRespondent

Nirma

HUL

P&G

Godrej

Others

Q3. Rank the following factors that customers look for in the purchase of Soap / Detergent. (Rank from 1 to 6)Factors123456

Fragrance

Quality

Company Image

Price

Packaging

Others

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

Yes

No

Q5. If Yes why?ParticularRespondent

High margin

Quality

Relationship

No reason

BIBLIOGRAPHY

BIBLIOGRAPHY

1) Reference BooksMarketing Management by Philip Kotler, Parling Kindersley (India) pvt ltd. I. Industrial Marketing by C.S.G. Krishnamachatyula and Lalitha R., Jaico Publishing

2) Journal Special Issue on Customer Equity Management

3) MagazinesBusiness Today

4) News PapersThe Times of IndiaDNA

5) Web Siteswww. wikipedia. Comwww.nirma.co.in_fileswww.godrej_files