INTRODUCTION

The Indian FMCG sector is the fourth largest sector in the economy with a total market size in excess of US$ 20.1 billion. It has a strong MNC presence and is characterized by a well-established distribution network, intense competition between the organized and unorganized segments and low operational cost. Availability of key raw materials, cheaper labor costs and presence across the entire value chain gives India a competitive advantage. Also, increase inthe urban population, along with increase in income levels and the availability of new categories, would help the urban areas maintain their position in terms of consumption.

At present, urban India accounts for 66% of total FMCG consumption, with rural India accounting for the remaining 34%. However, rural India accounts for more than 40%consumption in major FMCG categories such as personal care, fabric care, and hot beverages. Family income is one of the variables which should be considered while designing sales promotion schemes more specifically cash discount. There is significant difference between consumer preference of cash discount and free gift as sales promotion schemes. It is also very clear that consumers prefer cash discount as a sales promotion schemes compare to free gifts a sales promotion scheme.

It is found that Consumer deal proneness differs according to marital status. Furthermore, it is also proved that married are more deal prone compare to Unmarried. Added to it Brand Equity perception differs according to employment categories. It is concluded that male prefers the newspaper and point of purchase material as a source to know sales promotion schemes over female.

Overall, Sales promotion scheme on international brand, awareness spread out by word of mouth, Scheme is value added type with immediate benefit is preferred by the customers. So while designing sales promotion schemes and its benefits from the perspectives of the customers above mentioned attributes of the sales promotion

schemes should be considered to achieve the objectives of the sales promotion schemes. 5

Chapter II Research Objectives

.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 behavior in purchase of soaps and detergent 2.2 Motivation for the study in the world market. :With the growth of population and spending power of

the consumer has created the opportunities and challenges for the FMCG companies

Simultaneously, competition to win consumers has been increased drastically. World is becoming the small village and Many MNCs have entered in India and other countries. Marketing paradigm is shifting from consumer satisfaction to consumer delight. Enticing consumers with the various sales promotion schemes is the order of the day. If this tool is not used strategically, company has to follow the trend of promotions to maintain the market share. Considering almost universal applications of designing the sales promotion schemes and understanding its impact on business has

motivated to take the steps in the direction to study this crucial aspect of promotion management.

2.3 Research Hypothesis H0: Promotional schemes do not have a significant effect on the purchase of brand . H1: Promotional schemes do have an effect on the purchase of brand.

3.0 Introduction to FMCG Industry 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 term FMCG. Further, difficulties crop up when attempts to devise a definition for FMCG. The problem arises because the concept has a retail orientation and distinguishes between consumer products on the basis of how quickly they move at the retailers shelves. The moot question therefore, is what industry turnaround threshold should be for the item to qualify as an FMCG. Should the turnaround happen daily, weekly, or monthly? 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. Thus, should the inventory turnaround threshold be universal, or should it allow for income, cultural and behavioral nuances?

Characteristics of FMCG Products

Individual items are of small value. But all FMCG products put together account for a significant part of the consumers budget. 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. 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 neighbors/friends. These products cater to necessities, comforts as well as luxuries. They meet the demands of the entire cross section of population. Price and income elasticity of demand varies across products and consumers. 7

The Top 10 companies in FMCG sector 1. Hindustan Unilever Ltd. 2. ITC (Indian Tobacco Company) 3. Nestl India

4. GCMMF (AMUL) 5. Dabur India 6. Asian Paints (India) 7. Cadbury India 8. Britannia Industries 9. Procter & Gamble Hygiene and Health Care

10. Marico Industries

The companies mentioned in Exhibit I, are the leaders in their respective sectors. The personal care category has the largest number of brands, i.e., 21, inclusive of Lux, Lifebuoy,Fair and Lovely, Vicks, and Ponds. There are 11 HUL brands in the 21, aggregating Rs.3,799 crore or 54% of the personal care category. Cigarettes account for 17% of the top 100FMCG sales, and just below the personal care category. ITC alone accounts for 60% volume market share and 70% by value of all filter cigarettes in India. The foods category in FMCG is gaining popularity with a swing of launches by HUL, ITC, Godrej, and others. This category has 18 major brands, aggregating Rs. 4,637 crore. Nestle and Amul slug it out in the powders segment. The food category has also seen innovations like softies in ice creams, chapattis by HUL, ready to eat rice by HUL and pizzas by both GCMMF and Godrej Pillsbury. This category seems to have faster development than the stagnating personal care category. Amul, Indias largest foods company has a good presencein the food category with its icecreams, curd, milk, butter, cheese, and so on. Britannia also ranks in the top 100 FMCG brands, dominates the biscuits category and has launched a seriesof products at various prices. In the household care category (like mosquito repellents), Godrej and Reckitt are two players.Goodknight from Godrej, is worth above Rs 217 crore, followed by Reckitts

Mortein at Rs149 crore. In the shampoo category, HULs Clinic and Sunsilk make it to the top 100,although P&Gs Head and Shoulders and Pantene are also trying hard to be positioned on top.Clinic is nearly double the size of Sunsilk

Dabur is among the top five FMCG companies in India and is the herbal specialist. With turnover of Rs. 19 billion (approx. US$ 420 million) in 2005-2006, Dabur has brands likeDabur Amla, Dabur Chyawanprash, Vatika, Hajmola and Real. Asian Paints is enjoying formidable presence in the Indian sub-continent, Southeast Asia, Far East, Middle East, South Pacific, Caribbean, Africa and Europe. Asian Paints is Indias largest paint company, with turnover of Rs.22.6 billion (around USD 513 million). Forbes Global magazine, USA, rankedAsian Paints among the 200 Best Small Companies in the World

Cadbury India is the market leader in the chocolate confectionery market with a 70% market share and is ranked number two in the total food drinks market. Its popular brands include Cadburys Dairy Milk, 5 Star, Eclairs, and Gems. The Rs.15.6 billion (USD 380 Million)Marico is a leading Indian group in consumer products and services in the Global Beauty and Wellness space.The Rs.85, 000 crore FMCG market in India is growing at a fast pace despite of the economicdowntrend. The increasing disposable income and improved standard of living in most tier IIand tire III cities are spearheading the FMCG growth across the nation. The changing profileand mind set of the consumers has shifted the thought to Value for Money from Moneyfor Value.Over the years companies like HUL, ITC and Dabur have improved performance withinnovation and strong distribution channels. Their key categories have strengthened theirpresence and outperformed peers in the FMCG sector. On the contrary, Colgate Palmoliveand Britannia Industries are strong in single product category i.e. tooth - Pastes and Biscuits.In addition companies have been successful in reviving their presence in the semi-urban andrural market.In 1991, India has opened country to foreign brands. As per this liberalization policy many a foreign players

ventured into our country finding it a lucrative large mass market. This research paper is a theoretical paper studying the coping strategies of Indian players incompetition to the MNC companies. It studies those Indian players who have stood out in thiscompetition and have been successful in doing so. 9

1.3 FMCG category and products:Category : Products:Household Care: Fabric wash (laundry soaps and synthetic detergents); household cleaners (dish/utensil cleaners, floor cleaners, toilet cleaners, air fresheners, insecticides and mosquito repellents, metal polish and furniture polish). Health beverages; soft drinks;Food and Beverages: staples/cereals; bakery products (biscuits, bread, cakes); snack food; chocolates; ice cream; tea; coffee; soft drinks; processed fruits, vegetables; dairy products; bottled water; branded flour; branded Rice; branded sugar; juices etc. Oral care, hair care, skin care, personalPersonal Care: wash (soaps); cosmetics and toiletries; deodorants; Perfumes; feminine hygiene; paper products. 11

Introduction to Retailing & Retail Malls

Retailing in India Retailing in India is one of the pillars of its economy and accounts for 14 to 15 percent of its GDP.The Indian retail market is estimated to be US$ 450 billion and one of the top five retail markets in the world by economic value. India is one of the fastest growing retail market in the world, with 1.2 billion people. Indias retailing industry is essentially owner manned small shops. In 2010, larger format convenience stores and supermarkets accounted for about 4 percent of the industry, and these were present only in large urban centers. Indias retail and logistics industry employs about 40 million Indians (3.3% of Indian population). Most Indian shopping takes place in open markets or millions of small, independent grocery and retail shops. Shoppers typically stand outside the retail shop, ask for what they want, and cannot pick or examine a product from the shelf. Access to the shelf or product storage area is limited. Once the shopper requests the food staple or household product they are looking for, the shopkeeper goes to the container or shelf or to the back of the store, brings it out and offers it for sale to the

shopper. Often the shopkeeper may substitute the product, claiming that it is similar or equivalent to the product the consumer is asking for. The product typically has no price label in these small retail shops; The shopkeeper prices the food staple and household products arbitrarily, and two consumers may pay different prices for the same product on the same day. Price is sometimes negotiated between the shopper and shopkeeper. The shoppers do not have time to examine the product label, and do not have a choice to make an informed decision between competitive products. Indias retail and logistics industry, organized and unorganized in combination, employs about 40 million Indians (3.3% of Indian population). The typical Indian retail shops are very small. Over 14 million outlets operate in the country and only 4% of them being larger than 500 sqft (46 m2) in size. India has about 11 shop outlets for every 1000 people. Vast majority of the unorganized retail shops in India employ family members, do not have the scale to procure or transport products at high volume wholesale level, have limited to no quality control or fake-versus-authentic product screening technology and have no training on safe and hygienic storage, packaging or logistics. The unorganized retail shops source their products from a chain of middlemen who mark up the product as it moves from farmer or producer to the consumer. The unorganized retail shops typically offer no aftersales support or 12

14. service. Finally, most transactions at unorganized retail shops are done with cash ,with all sales being final.Until the 1990s, regulations prevented innovation and entrepreneurship in Indian retailing. Some retails faced complying with over thirty regulations such as"signboard licenses" and "anti-hoarding measures" before they could open doors.There are taxes for moving goods to states, from states, and even within states insome cases. Farmers and producers had to go through middlemen monopolies. The logistics and infrastructure was very poor, with losses exceeding 30 percent.Through the 1990s, India introduced widespread free market reforms, including some related to retail. Between 2000 to 2010, consumers in select Indian

cities have gradually begun to experience the quality, choice, convenience and benefits oforganized retail industry

.4.2 Retail Malls in India Our research would be conducted in three retail malls in Thane. A brief background of these retail malls in as under:

DMart Avenue Super Marts Ltd (ASL) owns and operates hypermarkets and supermarkets by the store name D-Mart.D-Mart seeks to be a one-stop shopping destination for the entire family, meeting all their daily household needs. A wide selection of home utility products is offered, including foods, toiletries, beauty products, garments, kitchenware, bed and bathlinen, home appliances and much more.Since DMart first opened its doors in the Mumbai region in 2000, it has grown into a trusted and well-established shopping destination in Maharashtra, Gujarat, AndhraPradesh and Karnataka. D-Mart is now looking forward to growing its stores acrossIndia.

Big Bazaar

Big Bazaar is a chain of hypermarket in India. As of June 2, 2012 there

are 214 stores across 90 cities and towns in India covering around 16 million sq.ft. of retail space.Big Bazaar is designed as an agglomeration of bazaars or Indian markets with clusters offering a wide range of merchandise including fashion and apparels, food products,general merchandise, furniture, electronics, books, fast food and leisure and entertainment sections. Big Bazaar is part of Future Group, which also owns the Central Hypermarket, BrandFactory, Pantaloons, eZONE, HomeTown, futurebazaar.com, KBs Fair Price to namea few and is owned through a wholly owned subsidiary of Pantaloon Retail IndiaLimited (BSE: 523574 523574), that is listed on Indian stock exchanges

.Reliance Fresh Reliance Fresh is the convenience store format which forms part of the retail businessof Reliance Industries of India which is headed by MukeshAmbani.

Reliance plans toinvest in excess of 250 billion in the next 4 years in their retail division. The companyalready has 453 Reliance Fresh outlets across the country. These stores sell freshfruits and vegetables, staples, groceries, fresh juice, bars and dairy products.A typical Reliance Fresh store is approximately 30004000 square feet and caters to acatchment area of 23 km. 14 Introduction to Sales Promotion : Sales Promotion The importance of consumer sales promotion in the marketing mix of the fast moving consumer goods (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. 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 and convenience as well as hedonic benefits such as entertainment, exploration and self-expression. Broadly speaking most of the companies using Marketing Mix which includes Price Place (Channel of Distribution) Product Promotion These are the four basic pillar of marketing mix. Most of the marketing strategies are built on the basis of these criteria. 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 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, 15

channels of distribution take more time in creating awareness because a product has topass through many hands between a producer and consumers.Therefore, a producer has to inform channel members as well as ultimate consumersabout the attributes and availability of his products. The second purpose of promotionis persuasion. The cut throat competition among different products puts tremendouspressure on their manufacturers and they are compelled to undertake sales promotionactivities. The third purpose of promotion is reminding consumers about productsavailability and its potential to satisfy their needs.

5.2 Sales Promotion Tools Exchange Offer ---This promotion is seen mainly in the consumer durable product category. This promotion requires the consumer to exchange an old product for a new one and get some benefit, usually a price reduction. For example, in case of cars, the schemeoffers the consumer a price reduction of Rs. 10,000 on the new car in exchange for anold car. For pressure cooker, the scheme offers a price reduction of 40% on exchanging an old cooker for a new cooker. In case of household durables, the scheme usually requires the consumer to exchange an old model of a product (e.g.AC, refrigerator, music system, mixer grinder, gas stove) to get a price reduction onthe new model. Apart from exchanging an old durable good, the scheme also involves exchanging a small TV for a big TV. Most exchange schemes provide an incentive topurchase in the form of a price reduction. One exchange scheme involved returning anold washing machine for a new one and getting an electric iron as gift.The purpose of the exchange scheme appears to be upgrade existing users of durable products to newer and larger sized models of a product. Free

Gift Offer ---This promotion is popular across a range of product categories. It offers the consumeran incentive to purchase in the form of a free product/service. For example, in case ofa car purchase, the consumer is offered a free product such as a music system oraccessories. The consumer may also be offered a free service such as extended 3-yearwarranty or free insurance. Often the product offered free is a complement to theoriginal purchase. This is illustrated by instances of the following types of free gift offers: a free stabilizer with an AC purchase free pillows with a mattress purchase free petrol on a 2 wheeler purchase free toothbrush with toothpaste free shaving blade with shaving gel/foam.At times, the product offered as a free gift constitutes an upgrade to the originalpurchase. For example in case of Computer Printers, a free Internet connection,Internet telephony kit, software titles and multimedia package is offered along withthe printer. Or in case of notebook computer/PC, the consumer is offered a FreeInternet upgrade and 20 GB, Web Camera, Printer, Britannica CDs, software. In caseof fast food restaurants, the free products are items such as soft drink, bread stick,pineapple fudge, garlic bread, ice cream cookies. Here the free products appear to beuse complements to the original product.At other times the free product may be a related product or product used in a similarcontext e.g. cooking or cleaning or personal care or eating. For kitchen products, thefree product are items used in the kitchen such as plastic containers, metal spoon,tawa, non stick pan, idli stand, serving bowl, table mat and OTG. Buy more and save/get ---This type of promotion requires a consumer to buy two or more products to avail ofthe promotional advantage. The promotional benefit is usually in the form of moneysaved as a result of buying two ore more products at the same time. In certain cases,the promotion requires the consumer to buy additional units of the same product toavail of the promotional advantage. For example, in case of bath soaps and detergent cakes, this promotion requires the consumer to buy three bath

soaps/detergent cakesand get one soap/detergent cake free. In case of fruit juice the consumer is required to buy 5 packs of fruit juice and get one pack of fruit juice free. This promotion seems tobe popular in categories where the extra units of the product offered on the promotioncan be stored for future consumption. When different products are bundled together on this promotion, there is usually relationship between the products. For example in case of computer printers, this scheme requires the consumer to buy a printer and scanner together and get a pricereduction. In case of consumer durables, this scheme attempts to induce the consumerto buy greater number of products from the same company

20. Contest offers Contest offers are seen mostly in products targeted at children. In case of Fast Food restaurant, this promotion requires the consumer to fill up a coupon and get a chanceto meet a film star such as Hrithik Roshan. In case of soft drinks, the contest offer requires the consumer to answer a question in an ad and get a chance to meet a moviestar. In other product categories, the prizes offered on this promotion are similar to those on the sweepstake promotion. The consumer is offered the chance to win a car or a flat or various household durable appliances.

Extra Product Offers Most of the extra product promotions (65%) are seen in the FMCG category where the extra units of product serve as additional consumption units for the consumer. There are no extra product promotions seen in the durables product category. InFMCG, the specific products on which the extra product promotion is launched include Talcum Powder, Detergent Cake, Soaps, Fruit Juices and Hair Oil. In case of toothpaste the promotion requires the consumer to buy one toothpaste and get the second toothpaste free. In a talcum powder extra product promotion, the consumer is offered 20% extra in the same pack. This promotion is also seen in the Services sector. In case of Internet service provider, this promotion offers extra hours on the Internet and free Internet access on Sunday. In case of fast Food restaurants, the

promotion offers a second pizza free along with the original pizza or a slice free along with the original pizza. Yet other types of promotions require an investment of both money and effort from the consumer in order to avail of the promotional benefit. For example, a soft drink promotion requires the consumer to collect crowns and put in some money to get a price discount on the soft drink. In case of ice cream the consumer is required to collect three ice cream wrappers to get a scratch card which gives him the opportunity to win lakhs of prizes. In case of chocolates, the promotion requires a consumer to exchange empty chocolate wrappers to get movie tickets or bunny stickers free

Purpose of Sales Promotion The ultimate aim or purpose of sales promotion is that of increasing the volume ofsales and profits but it differs from advertising and personal selling both in approachand techniques. Personal selling involves face to face contact with specificindividuals, while advertising is directed at a large number of potential customers.Sales promotion serves as a link between two by focusing selling efforts on selectedsmall groups of people. Sales promotion usually involves non-recurring and no-routine methods, in contrast with the routine and recurring nature of advertising andpersonal selling. Under advertising, the media is not owned and controlled by theadvertiser except in direct mail advertisings. But sales promotion methods arecontrolled by the advertiser. Sales promotion covers various stimulants directed to theconsumers and dealers that is why it is of two types-consumers sales promotion anddealers sales promotion. The former stimulates consumers buying at the point ofsale, and latter improves dealers effectiveness at the retail outlets.

5.4 How Sales Promotion Objectives are set Sales promotion has dual objective: (A) Basic objectives and (B) Other objectives.(A) Basic objectives of sales promotion are:(i) Increasing the buying response of ultimate consumers.(ii) Increasing the selling efforts and intensity by dealers as well as bysales personnel.(iii) Supplementing and co-coordinating the efforts of advertising and personalselling(B) The other objectives

are:(i) Calling attention to new products and product improvements.(ii) Informing buyers of new brand and new packaging.(iii) Improving market share.

. (iv) Obtaining dealer outlets.(v) Meeting competition.These objectives are set on the basis of following criteria.

(i) Cost of reaching an audience member. (ii) Acceptability of the tools to be used.These criteria are developed taking into consideration the following variables/factors:(i) Kinds of product:The product is one of the factors determining the form of promotion. Toys, toiletsoaps and cosmetics are effectively shown on television. Mass selling consumergoods can be easily promoted through radio and television. Industrial and specialtygoods should be promoted through technical journals and through sales engineers.

(ii) The buyer:If the marketers are to provide realistic solutions to the problem of buyers, they mustknow their customers, their needs and desires, their attitude, values, aspirations andexpectations. Hence marketers must have up-to-date information about customerdemand and customer behaviour. If the buyers are educated then demonstrations orinstructions can be used as sales promotion technique. Similarly, contests and quizzescan be used if buyers are of young age and educated

. Nature and size of market:The number, geographical location and purchasing power of potential customers exercise a significant impact on the sales promotion. Sampling, coupon, money refund orders, premium offer, price-off and trading stamps etc., are suitable for sales promotion in local markets. On the other hand, fairs, exhibitions and fashion shows are more appropriate for sales promotion on the national level particularly for garments, books and electronic items.

. Stages in product life cycle: This is an important managerial tool in sales promotion. A product life cycle consists of four stages.(a) Introduction of the product requires lot of

energy to create awareness ,acceptance and demand for the product. Introducing a new product for most companies is a costly and difficult exercise that is why they mostly depend on middlemen,(b) Growth. It includes a fast growth both in sales volume and profit.(c) Maturity (Saturation).This stage is longer. But the speed in achieving sales volume reduces during this stage. Profit also starts declining much faster than the sales.

Declining. This is the last stage in product life cycle. After a period of stability, the buyers lose interest on the product, and sales start falling more quickly.At this stage either high cost sales promotion technique may be used or existing product may be improved.

Management policy:In the management policy, first of all, sales promotion objectives are set, then communication tools required to achieve these objectives are designed, and the third step is to determine the cost required to execute promotional activities and programmes. In short sales promotion expenditure is directly related to the objectives to be achieved.

Budget allocation available: The decision on how much to spend on promotion is externally difficult on account of multitude of promotion tools, on the one hand, and varieties of products and market son the other. For example, the greater the geographical dispersion of a target market, the greater the communication expenditure required. Similarly, if an offering is in its early life cycle, there is a greater need of expenditure. But promotion budget should always justify the tasks to be undertaken. A basic principle would be the cost and returns of sales promotion tools to be adopted. Hindustan Lever has its well-drawn up sales promotion budget. If any business house does not have its promotion budget fixed, then promotion programmes will have to be designed to support the marketing plan.

Government regulations: Government has passed various laws and made rules to protect the consumer interest ,such as the prevention of Food Adulteration Act, the Drugs and Magic Remedies(Objectionable Advertisements) Act, and Drugs and Cosmetics Act etc. Sales promotion policy must take into consideration the government regulations relating to the particular product, e.g. the commodity rates must be specified on the package and in case of medicines drug contents and date of manufacturing, date of expire, and price must be specified.

Promotion format: Discount vs. Free Gifting addition to promotion framing, price promotions come in different formats such as discount, coupon, rebate, and purchase with free gift, etc. While most promotion forms involve monetary savings, some promotions are non-monetary. One type of on-monetary promotion often used is offering consumers a free product or gift instead of a price discount.

Price sensitivity--- One of the most discussed negative effects concerns consumer price sensitivity. Findings show that SP tends to increase consumer price sensitivity, due to the formation of reference prices. When consumers buy a product, they start to compare the price to the reference price, as opposed to the actual one. If a consumer is used to buying two coffees for the price of one, when the SP is removed, the actual price of the coffee suddenly seems more expensive. However, this implies that, in order for consumers to become too price sensitive, promotions would have to happen frequently, since consumers do not tend to always remember prices. Naturally, different consumers react differently to prices and SP, depending on their own predispositions and preferences. For instance, customers loyal to a specific brand will perhaps not switch even when presented with the most tempting offer while others actively search for the best offer available. Promotions can, however, lead to a greaternumber of people becoming offer-seekers as, Mela et al., (1997) found that, lookinglong-term, price promotions do make both loyal and non-loyal customers more sensitive to price 39

Chapter III Research Methodology

Research Design A research design is a framework or blue print for conducting the

research project. It details the procedures necessary for obtaining the information need to structure and/or solve research problems. The research design lays the foundation for conducting the project. The descriptive research design is being used to study the formulated problem. Primary and secondary data has been collected according to the need of the study. For collecting primary data, structured questionnaire has been prepared considering objectives of the study. More over important factors has been considered to measure the interested variable of the study. 7.2 Product categories under study DETERGENTS: Washing Powder for Clothes TOILETERIES: Soaps

7.3 Sampling Design & Data Collection The universe of the study consists of the retail consumers in thane

Sample Size: 100 Sampling Method: Convenient Sampling Method Data Type: Primary Data & Secondary Data Data Collection Tool: Structured Questionnaire Scope of Research: 3 Retails Malls in Thane city ---. DMart , Big Bazaar & Reliance Fresh

Method:Questionnaire is one of the tools of the primary data collection. In this research consumer responses have collected through questionnaire.

Chapter IV Data Analysis

Data Collection & Interpretation from filled questioneer

Q1. Which brand of Soap / Detergent do you use? Bathing soaps Respondents Lux 41 Hamam 3 Lifebuoy 14 Pears 8 Others 34 Bathing soaps 50 40 30 20 10 0 Lux Hamam Lifebuoy Pears Others Respondents 41 3 14 8 34Interpretation: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. From the above result it is clear that out of 100 customers more than 40 are consumers are having the same brand as their preferred brand, whereas Others category is also showing higher numbers than the other 3 major players (Hamam, Lifebuoy, Nirma).

43. Detergent powder Respondents Tide 19 Rin 14 Surf 35 Ariel 18 Others 14 Detergent Powder 40 35 30 25 20 15 10 5 0 Tide Rin Surf Ariel Others Respondents 19 14 35 18 14Interpretation --:From 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. 42

. Q2. Do you always buy the same brand of Soap / Detergent? Particulars Respondents Yes 56 No 44 Brand loyal 60 50 40 30 20 10 0 Yes No Respondents 56 44Interpretation: 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 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? Bathing Factors soap Det.powder Fragrance 19 18 Quality 33 36 Company image 16 13 Price 23 19 Packaging 6 11 Others 3 3 Factors affecting purchase behavior 40 30 20 10 0 Company Fragrance Quality Price Packaging Others image Bathing soap 19 33 16 23 6 3 Det.powder 18 36 13 19 11 3

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.

Q4. Do you consider promotional schemes while purchasing a particular brand of Soap/ Detergent? Particulars Respondents Yes 78 No 22H0: Promotional schemes do not have a significant effect on the purchase of brand.H1: Promotional schemes do have an effect on the purchase of brand. Effect of schemes purchase behavior 100 80 60 40 20 0 Yes No Respondents 78 22

Interpretation: Answer of this question will give idea about the effect of promotional schemes in the purchase decisions. Such types of 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. Here H1 is accepted as the graph shows that 78 out of 100 consumers are looking for such schemes before they make purchase.

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

promotional Schemes 100 80 60 40 20 0 ------scratch Coupons price off Freebies lucky draw Bundling extra qty. cards Respondents 16 84 24 12 9 31 44Interpretation:

The above stated question clearly states the awareness of promotional schemes offered in the market by the marketers to attract more and more consumers.The results show that price off and extra quantities are the two main offers/schemes which consumers have come across at the time of purchase. It will help the manufacturers and marketers too how to launch their new products in the market with which schemes.

Q6. Which medium do you feel is suitable to promote the various promotional schemes? Source Respondents Radio 11 TV 69 Newspaper 43 Hoarding 15 Others 12 Mediums to promote the promotional schemes 80 60 40 20 0 Radio TV News.ppr Hoarding Others Respondents 11 69 43 15 12

Interpretation:This question gives stress on the media habit of the people and through which the product should be launch or they think it would be better than other Medias.The above result shows TV as the best media to market the product which will cover majority of the viewer ship. On the second place it shows newspapers as the media to promote the product in the market.

Q7. Is there any existing scheme on the Soap / Detergent you are currently using? Particulars Respondents Yes 58 No 42 Existing scheme on the Soap / Detergent 70 60 50 40 30 20 10 0 Yes No Respondents 58 42

Interpretation:The answer of the respondents give idea about the awareness of the promotional schemes offered in the market on their existing soaps and detergents.In this situation more than 40% of the people are not aware or having vague idea about the promotional schemes running into the market.It shows that people are not much aware of the schemes which continue in the market it maybe because of the present stock of the product at their place.

. Q8. If yes, please specify? Particulars Respondents 3+1/Other Free 36 Discount 22 No idea 6 No answer 36 40 35 30 25 20 15 10 5 0 3+1/Other Free Discount No idea No answer Series1 36 22 6 36

Interpretation:This question supports the above question. It enlists the answers of those customers who are aware of the present schemes offered in the market and also those schemes which are more demanded in the market.The result shows that 1+1 or 2+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.

Q9. If you get an attractive promotional offer in the product other than of your choicewill you switch over? Particulars Respondents Yes 73 No 27 Switching behavior 80 70 60 50 40 30 20 10 0 Yes No Respondents 73 27

Interpretation:It shows the level of brand loyalty among the consumers. The result clearly shows that out of100, 73 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. Combination of all these schemes will run better in the market. 50

Q10. Give reason for the same? Particulars Respondents Cost+qty 16 Quality 17 Satisfaction 2 Brand loyal 5 More benefit/budget 22 Season change 2 No answer 36 Reason 40 30 20 10 0 More Season Cost+qty Quality Satisfaction Brand loyal No answer Benefit/bud change Respondents 16 17 2 5 22 2 36

Interpretation:Above question it gives specific reasons for switching too other products. It shows that extra quantity with less or same price, more satisfaction, quality and other factors influence consumers to switch over too other brands.

Retailer Interview/questionnaire

Following are the excerpts from an interview with Mr. G Sakpal Store Manager,DMart Pokharan 2 ,Thane. This interview highlighted the retailers side view on sales promotion tools and their effectiveness:

Q.1. Tell us something about DMart and what do you think makes DMart different from other similar malls?

Ans. DMart is a retail supermarket and we deal with all kind of consumer products falling in the categories of FMCG and Consumer Durables. We are known for our large-scale of operations that also allows us to get good deals from our suppliers. The same benefit is passed on to our customers in form of price discounts. DMart is having a competitive advantage on giving price discounts on each of the products on the shelves. This is not offered by many other retail malls.

Q.2. So you think consumers are only looking for a price discount and do not get influenced by other kind of sales promotions?

Ans. There are two kinds of promotions; one is supplier side and the other is retailer side. Suppliers do not tend to offer price discounts. They would go for things like bundling, which would force the sales of a product that is not doing so well in the market. Retailer side promotions depend on the inventory and the cash benefits derived from the supplier. If we have a choked inventory, we would put them on offer. The cash benefits received is offered to consumer in face of price discounts. So, you see, we try to create a win-win offer for everyone involved. As far as consumers are concerned, we always see a happy smile on our consumer faces when they see the amount of savings they made as mentioned on their invoices. So, yes, consumers are always looking for a better deal and price discounts rate as number one promotion tool from retailer side. From supplier side, it is the free product or bundling offer that does well

.Q.3. Do you think consumers switch brands depending on the deals they receive?

Ans. The answer is a big yes. Indian consumers loyalty is becoming fickle. There are many switchers now than they were earlier. This is mainly due to the number of choices on offer. If a FMCG manufacturer can bring out a good promotional scheme,it will attract consumers to their products. It is also a good product launch tool.

Q.4. So sales promotions do well with new products rather than with an established brand?

Ans. Sales promotions would do well with any kind of product. A manufacturer is always trying to gain maximum sales and market share. With promotional offers, they ensure that they get maximum visibility and word of mouth publicity from consumers. We have observed that whenever the sales are down, the manufacturer come up with promotional offer, and then it helps them boost sales. A new product finds it tough to make a holding in the market. The manufacturer mostly adopts a penetrative pricing strategy and plays on prices. Then comes bundling and then free products and then the other forms like scratch cards and coupons.

Q.5. Do sales promotions always work in boosting the salesmans? Not always. Some fail miserably, while some succeed a lot. Q.6. Can you give us some examples of such successes and failures? Ans. Nestle Milk came up with a bundled offer with Maggi noodles. It did well. But it got more success when they reduced Rs.15 from their retail price. Recently, McCain was offering a smaller packet of their aloo tikkis with their big packets. It was not catching up as the consumers preferred French fries as their big pack choice. Also, once we had to clear off huge stock of Kiwi shoe polish. We blundered by offering itwith Lizol. Both products faced loss of sale. Milo never achieved high sales figures,in spite of running several free product offers. Overall, I would say, price discounts do very well with any kind of product.

Q.7. Now we will be having big giants like Walmart in India, who can get better deals from the suppliers. How do you plan to cater this challenge?

Ans. Walmart is a large size retail format and they can face issues with getting realestate for their space. So, we will see them coming up on city outskirts. Actually, we are still threatened by local kiranas only because of their reach. I feel, Indias retail space would be divided in to three spaces in the future. First one will be the unorganized retailing, which is the local kirana shops. Second would be the organized retail space with Indian retailers like DMart and Big Bazaar. Third would be the organized foreign retailers. I personally feel all three formats can co-exist peacefully.

Q.8. My final question is what does the future holds? Ans. The future is bright for the Indian consumers and they can look forward to whole lot of deals and offers from both the suppliers and the retailers.

Chapter V Findings of the report

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 is 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 come across at the time of purchase TV is the best media to market the product which will cover majority of the viewer ship. On the second place it shows newspapers 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 to 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

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

Recommendations

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. 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.

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. 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.

systematize information flow regarding sales promotion activities particularly at dealer and retailer level. Ensuring proper information flow and devising checks and measures to reduce misappropriations and implementation flows should be considered critical aspects for the success of sales promotion activities by the companies. As retailing is fragmented, direct reach by companies is next to impossible. Through dealers and proper feedback mechanism, companies keep in touch with the market. 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. It can be seen that the retailer and consumer perceptions matched with respect to preferences of schemes, underlying motivations and role of mass media. This implies that the retailer would be a rich source of information about the consumer and the likely response to 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 consumers.8.5Limitations of the study

We considered Thane 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 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.

Demographic analysis Age I met mostly young consumers because their frequency of visit is generally more than others and also young consumers know how to interpret advertisements.

Gender Male to Female ratio in this survey is 35:65. Generally, females shop more than males in retail mall.

Occupation Majority of the surveyed consumers were home makers. Next were the salaried employees and businessperson.

Family Type I surveyed about nearly same number of consumers of the three family types. So it helped to find, analyze and remove biasness of error.

Family income I have surveyed consumers in almost every income group. The locations of the three selected malls allowed me to cover all such income groups. 61

Conclusion of the Survey

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 outcome innovative ways of sales promotion to differentiate from competitors. Currently Price off and Bye 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 salesperson. 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 I - IV Source of data

Web References 1]http://www.indiamart.com/atds/services.htm 2] http://taurusindia.in/fmcg.htm http://www.fmcg.nl/english/promo.htm http://en.wikipedia.org/wiki/Sales_promotion http://www.marketingteacher.com/lesson-store/lesson-sales-promotion.html http://hubpages.com/hub/consumer-sales-promotion-marketing-mix-strategy http://www.businesswireindia.com/PressRelease.asp?b2mid=24770 http://www.nios.ac.in/srsec319/319-24.

Chapter I - III
CONSUMER SURVEY FORM

Name: ______________________________________________________________________Gender: _____________ Age: _________________ Monthly Income: ___________________Occupation: ________________ Family Type: ________________ Mall: _________________

1) Which brand of soap & detergent to you use?____________________________________________________________________________

2) Do you always buy the same brand of soap & detergent?___________________________________________________________________________

3) Which factors do you normally consider while purchasing a particular brand of Soap /Detergents? Fragrance Price Quality Packaging Company Image Others_______________________

4) Do you consider promotional schemes while purchasing a particular brand of Soap /Detergent? Yes No

5) Which of the following promotional schemes you have come across so far? Coupons Price Off Freebies Scratch Cards Lucky Draw Bundling Extra Quantity Others ______________________

6) Which medium do you feel is suitable to promote the various promotional schemes? Radio TV Newspaper Hoardings Others_________________

7) Is there any existing scheme on the Soap / Detergent you are currently using? Yes No 8) If yes, please specify_____________________________________________________________________________

9) If you get an attractive promotional offer in the product other than of your choice will youswitch over? Yes No 10) Give reason for the same?____________________________________________________________________________