ROLE OF SALES

PROMOTION IN
FMCG : SOAP &
DETERGENT
INDUSTRY

Ankur Jain
128070592004

Ajaysinh Parmar
128070592076


Introduction - FMCG

The term FMCG (fast moving consumer goods) , Frequently used and is
generally used in India to refer to products of everyday use.

However, the term refers to relatively fast moving items that are used
directly by the consumer.

Characteristics of FMCG Products:
Individual items are of small value
The consumer keeps limited inventory of these products and prefers to
purchase them frequently, as and when required.
Many of these products are perishable.
The consumer spends little time on the purchase decision
Trial of a new product
These products cater to necessities, comforts as well as luxuries



Well-established distribution network
extending to rural areas.

Strong brands in the FMCG sector.

Low cost operations.


Low export levels.

Small-scale sector reservations limit ability
to invest in technology and achieve
economies of scale.

Several identical products.
Large domestic market.

Export potential.

Increasing income levels will result in
faster revenue growth..
Imports.

Tax and regulatory structure.

Slowdown in rural demand.
SWOT
SWOT ANALYSIS OF FMCG SECTOR

Introduction to the topic


The importance of consumer sales promotion in the marketing mix of the
(FMCG) category throughout the world has increased.

Companies spend considerable time in planning such activities.

However, in order to enhance the effectiveness of these activities,
manufacturers should understand consumer and retailer interpretations of
their promotional activities.

The study here pertains to consumers perceptions regarding sales
promotion.


Introduction to the topic

Some past researches have suggested that promotion itself has an
effect on the perceived value of the brand.

This is because promotions provide utilitarian benefits such as :

Monetary savings,
Added value
Increased quality
Convenience as well as hedonic benefits such as entertainment,
exploration
Self-expression.


4 Ps Of Marketing
Product Place
Price
Promotion

Promotion is one of the important elements of marketing mix.

There are so many elements of promotion such as

Advertising
Direct
Marketing
Public
Relation
Sales
Promotion

Sales promotion serves three essential
roles
informs persuades reminds

Informs


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.

Therefore, a producer has to inform channel members as well as
ultimate consumers about the attributes and availability of his
products.

Persuades


The second purpose of promotion is persuasion.

The cut throat competition among different products puts
tremendous pressure on their manufacturers and they are
compelled to undertake sales promotion activities.





The third purpose of promotion is reminding consumers about
products availability and its potential to satisfy their needs.



Reminds

Types Of Sales Promotion
Sales
Promotion
Customer
oriented
Trade
oriented


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 is targeted to the ultimate
user of a product or service and includes

Consumer Oriented Sales Promotion includes

Sampling
Couponing
Premiums
Contest
Refunds
Rebates
Bonus Packs
Price-off
Loyalty Programs
Event marketing
Point of Purchase

Marketers uses consumer oriented sales promotion
tools for the following 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



Factors Influencing Consumer Oriented sales
promotion:


Target market

Nature of product

Stage of product life cycle

Budget available for promotion



Sales Promotion from the Consumers point
of view

Willingness to buy on sales promotion offer

Ability to induce trial

Long-term impact

Preference of Schemes

Perceived Quality



Perceptions regarding underlying company
motivations

On tapping perceptions regarding underlying company motivations
for sales promotion :

to increase sales was ranked highest followed by to attract
switchers and to sell excess stocks. While providing value to
customers

To reinforce company image were ranked lowest. This indicates
that consumers believed that companies undertake such activities
only for their own benefit and not for the benefit of consumers.

Findings from retailer and consumer perception studies, it is evident
that there was a matching of perceptions regarding nature of
scheme (price offs as most preferred type of scheme mentioned by
consumers and retailers.)


Perceptions regarding underlying company
motivations

Since retailers observe consumers in-store behavior frequently and directly,
their perceptions regarding providing consumer behavior are likely to be
accurate. Such inputs from the retailers would be useful to companies.

The retailers had the perception that those schemes which were announced
through mass media had better response. This was reinforced by the
consumer survey which showed that recall in case of heavily promoted
schemes on TV was found to be very high.

Retailers prediction of companies motivation for offering sales promotion
were matching with the consumer perception regarding the same.

Thus both viewed that companies were using sales promotion activities
mainly to increase short term sales or encourage switching or selling excess
stock and not really to give value benefit or enhance/reinforce
brand/company image.





Trade Oriented Sales Promotion


Trade oriented sales promotion is targeted toward marketing
intermediaries such as wholesalers, distributors, and retailers.

Promotional and merchandising allowances, price deals, sales
contests, and trade shows are some of the promotional tools
used to encourage the trade to stock and promote a companys
products.



Sales promotion from the retailers point of
view:


Perceptions on Scheme Preference
Perceptions about Buying Roles
Perceptions about their role in decision-making
Perceptions about Response to Sales Promotion Offers
Variations in Information Flow
Dealer-Retailer Dynamics
Margins



Sales promotion from the retailers point of
view:


Perceptions about terms and conditions
Nature of POP
Servicing during duration of Scheme
Problem of left-over
Gifts for Retailer motivation
Post Promotion Behavior
Perceptions about mass media announcements
Handling Problems



Why do Sales promotion schemes
affect sales?

There are three mechanisms behind these facts.


Category
expansion
Brand
switching
Purchase
quantity


Why do Sales promotion schemes affect
sales?

First, consumer can increase the quantity they buy just because the
product is on sale.

Second, consumers are inducing to purchase another brand
different from the one they would have purchased when there is no
promotional incentive.

Finally, consumers total consumption of the product category is
increased by the promotion. However, in the long term this positive
effect may be diluted because a promotional campaign has no
permanent effect in the sales of the firm

sales promotion strategy
A sales promotion strategy is an activity that is designed to help
boost the sales of a product or service.

This can be done through :

advertising campaign
public relation activities
free sampling campaign
free gift campaign
Through prize giving
competitions
exhibitions
through demonstrations
a trading stamps campaign
telemarketing
door-to-door sales temporary price cuts
personal sales letters/e-mails
When developing a sales promotion strategy for your business, it is
important that you keep the following points in mind :

Consumer attitudes and buying patterns

Your brand strategy

Your competitive strategy

Your advertising strategy

Other external factors that can influence products availability and
pricing

Types Of Sales Promotion Strategies
Push
Strategy
Pull Strategy
Combination
of Two

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.

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.

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.

The Short term Impact of Promotions:

Temporary price reductions (price off) substantially increase sales.

Sales Promotion leads to brand substitution with the product
category.

Sales Promotion leads to purchase acceleration/stockpiling effects.

Sales Promotion leads to primary demand expansion for a category.

Sales Promotions affect sales in complementary and competitive
categories.



The Long term Impact of Promotions:

Strategies are builds to reap the benefits for longer period of time;
same is true in sales promotion strategies

Impact of promotions effort over a longer time period e.g. 4-6
months or even a few years after a sales promotion campaign :

The result showed that consumer promotions for leading brands of
established packaged products had no after-effects on the brands
sales or repeat buying loyalty.

It is found that although the short term effects of promotions are
strong; these promotions rarely exhibit long term effects.



The Long term Impact of Promotions:

It is observed that each sales component generally lacked a
permanent effect and the effect of promotion was short lived and
increase in promotions affected consumers stockpiling decisions in
the long run.

We found that the combined short and long-term elasticity of
promotions was zero.

The stockpiling induced by a promotion was essentially offset by
reduced demand in the long term.

Thus increased sales were more a result of sales borrowed from the
future than increased consumption

RESEARCH METHODOLOGY

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 :

We have used Conclusive research design. Under conclusive
research design our research falls under Descriptive Research.

Descriptive design consists of two parts:
Cross sectional design
Longitudinal design




Our research comes under the category of Cross sectional
design, its a type of research design which involves
collection of information from any given sample of population
elements only once.

Cross sectional design consist of two parts:
Single cross sectional design
Multiple cross sectional design
We have used multiple cross sectional design, in which
there are two samples of respondents, and information from
each sample is obtained only once.


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
residence of Ahmedabad.

Sample size: 100 consumers 100 retailers.

Sampling method: The sample is selected by using convenience-
Sampling method


SOAP
DETERGENT
RESULTS AND FINDINGS OF CONSUMERS
From the above result it is clear that 92% of customers use Lux,
whereas 8% use Dettol. Lifebuoy and Nirma are way out of competition.

From the above result it is clear that 81% of customers use Surf,
whereas 19% use Ariel. Wheel and Nirma are way out of
competition.
The above figure shows that 22% 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.


Result Of The Soaps And Detergent Shows Company Image As The
Most Influencing Factors In The Purchase Decision While Fragrance Is
Also An Important For Purchase Decision.

Consumers look most in the product before they make final decision.
From our study we can say that Sales Promotion is the need of time.
As 100% respondent consider promotional scheme while purchasing
particular brand of soap / detergent.
The results show that price off and freebies are the two main
offers/schemes which consumers have come across at the time of
purchase. It will help the manufacturers and marketers to launch
their new products in the market with such schemes.

The above result shows TV as the best medium to market the
product which will cover majority of the viewer ship. On the second
place it shows Social Media Marketing as the other media to
promote the product in the market.

It shows that 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.

The result shows that 3+1 or other free schemes are more
demanded and more aware schemes in the market. So
manufacturers may go for the same at the time of launching their
product.
It shows the level of brand loyalty among the consumers. The result
clearly shows that out of 100, 76% people are ready to switch over
to another brand if they find better promotional schemes which suits
their budget means more qty + less cost + quality. Combination of all
these schemes will run better in the market.
Above question it gives specific reasons for switching too other
products. It shows that extra quantity with less or same price, more
benefit, quality, satisfaction and other factors influence consumers to
switch over to other brands.
RESULTS AND FINDINGS OF RETAILERS
Above question show that we have taken our most of
responses from that retailer who are in the same business
from more than 10 years, our 49% respondents are in the
same business from more than 10 years.

From the above chart we can see that 41% of the retailer store
Nirma in there shop regularly and second one in the particular
category is HUL with 35%.

Above question shows that the most of the retailer does not
recommend any of the brand to the customer so we can say that the
companies are not providing such motivation to the retailer that they
recommend their brand to the customers.

Above question shows that the most of 92% of the customer who
came to buy the particular product will always look for various
schemes in the particular product.

From the above question we can see that the most of the customer
are always looking for getting price off on the particular product
which they are going to buy.


Nirma is providing more percentage of promotional expenses as a
trade promotion to the retailer and such promotional expenses are
account for 27% of all the promotion.
HUL is providing highest percentage of Extra Margin as a trade
promotion to the retailer and such Extra Margin s are account for
25% of all the promotions.
P&G is providing more percentage of Gifts as a trade promotion to
the retailer and such Gifts are account for 27% of all the promotion.

Godrej is providing more percentage of credit facility as a trade
promotion to the retailer and such credit facility are account for 27%
of all the promotion.


Others players in the same segment is also providing more percentage of
Extra Margins as a trade promotion to the retailer and such more
percentage of Extra Margins are account for 26% of all the promotions.




H0 = There is no Significant association between Number Of years retailer is in
particular business and Brand of soap or Detergent he Stock most.

H1= There is Significant association between Number Of years retailer is in
particular business and Brand of soap or Detergent he Stock most.





The Pearson Chi-Square statistic is used to determine whether there
is a Significant Relationship between Numbers Of years retailer is in
particular business and Brand of soap or Detergent he Stock most.
The Pearson Chi-Square value is statistically significant, 2 (df = 8)
= 20.242, p > 0.05. So it can be concluded that there is no
significant relationship between Age and vehicle owned in Family


Value df Asymp. Sig. (2-sided)
Pearson Chi-Square-

20.242
a
8

.009



H0 = There is no Significant Association between Age and Factors consider
while purchasing particular brand of soap.
H1= There is Significant Association between Age and Factors consider while
purchasing particular brand of soap.






The Pearson Chi-Square statistic is used to determine whether
there is a Significant Association between Age and Factors
consider while purchasing particular brand of soap. The Pearson
Chi-Square value is statistically significant, 2 (df = 15) = 6.412,
p < 0.05. So it can be concluded that there is no Significant
Association between Age and Factors consider while purchasing
particular brand of soap.


















Value df Asymp. Sig. (2-sided)
Pearson Chi-
Square
6.421
a
15 .972



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. 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.

People are ready to switch over to another brand if they find better
promotional schemes which suits their budget means more qyt + 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

Retailers do not suggest to purchase particular brand because of
personal relation or that customer are brand loyal

Margin and of better relations with consumers and to provide quality
product to consumers they suggest consumers too buy particular brand.




Sales promotion should not be used in isolation but need to be
integrated with other tools and in line with the overall positioning of
the brand. Also the importance of the role of mass media came out
clearly in the study.

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.

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.

Companies need to systematize information flow regarding sales
promotion activities particularly at dealer and retailer level.




From the study it was found that smaller retailers felt neglected
and not enthused to implement the schemes, particularly when
additional handling, stocking, accounting was required on the part of
a retailer without compensatory margins.

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.




The study is confined to Ahmedabad Region only

Due to this, our sample size is only 200, 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.



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.

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

WEBSITES

http://www.nirma.co.in_files
http://www.hul.co.in_files
http://www.pg-india_files
http://www.godrej_files