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A
RESEARCH REPORT

ON Impact of sales promotion on consumers, Retailers & Wholesalers-with special reference to Sunsilk shampoo At Bhilai region
Submitted in partial fulfillment for the award of degree of MASTER OF BUSINESS ADMINISTRATION OF SWAMI VIVEKANAND TECHNICAL UNIVERSITY, DURG (C.G)

SESSION : 2006-2008 Submitted by

SUSHMITA YADAV
MBA II Semester, 2007

Approved by
Dr. PRATAP .B. DESHMUKH

DEPARTMENT OF MANAGEMENT BHILAI INSTITUTE OF TECHNOLOGY (AN ISO 9002 Certified Institute) Bhilai House, G.E.Road, Durg-491001 (C.G.), India

Abstract
Understanding perceptions of channel members and

consumers regarding sales promotion activities enhances the effectiveness of these activities. Widespread usage of sales promotion activities in Fast Moving Consumer Goods (FMCG) sector makes it imperative that manufacturers take into account channel member and consumer perceptions before planning such programmes. In this paper, an attempt has been made to examine the nature of sales promotion activities in Sunsilk Shampoo category in Bhilai City, study retailers & wholesalers and wholesaler perceptions with respect to these activities and also get an insight into consumer perceptions of these activities. Our findings indicate that with respect to the nature of the schemes, premiums (free gifts) were found to be the most frequently used in both premium and popular Sunsilk Shampoo category, followed by price offs.

DECLARATION

I SUSHMITA YADAV student of M.B.A. IInd Semester in DEPARTMENT OF MANAGEMENT, Bhilai Institute of

Technology, Durg (C.G.) Here By declare that the research report work entitled The Impact of sales promotion on Consumers, retailers & wholesalers-with special reference to sun silk shampoo at Bhilai Region is the record of original work done by me and the matter enclosed has not been submitted for the award of any other degree of diploma in the university or any where.

DATE: PLACE:

SUSHMITA YADAV (M.B.A. IInd SEMESTER)

DEPARTMENT OF MANAGEMENT BHILAI INSTITUTE OF TECHNOLOGY (An ISO 9002 Certified Institute) Bhilai House, G.E. Road, Durg-491001 (C.G.), India

CERTIFICATE
This is to certify that the research report entitled IMPACT OF SALES PROMOTION ON CONSUMERS,

RETAILERS & WHOLESALERS-WITH SPECIAL REFERENCE TO SUNSILK SHAMPOO AT BHILAI REGION Carried out by SUSHMITA YADAV of, M.B.A. II SEM 2007 is submitted

towards partial fulfillment of the requirements for the award degree of M.B.A. 2006-2008.
DATE: PLACE: Approved by

Dr.P.B.DESHMUKH
[B.E. (MECH), M.B.A., M.E., Ph.d]

H.O.D & Addl. Director

ACKNOWLEDGEMENT
In the beginning I would like to express my immense pleasure in submitting this research report to Bhilai Institute of Technology. I wish to express my Gratitude to Dr.

P.B Deshmukh (Addl. Director & HOD, Deptt. of Management) Who has been kind enough to approve my research report.

I must acknowledge my gratitude to my Research Guide Mr. S. Pandey (Lecturer. Management) for her guidance in understanding the important ingredients of my study.

I shall be failing in my duties if in the end; I do not acknowledge my debt of gratitude to all those who have been helping me from time to time by their in valuable suggestions and constructive comments.

{SUSHMITA YADAV}

CONTENTS
S.No. 01. Description INTRODUCTION OF THE TOPIC
a) INTRODUCTION WHAT IS SALES PROMOTION IMPORTANCE & GROWTH OF SALES PROMOTION IN TODAYS MARKETS COMPANY PROFILE

Page No. 2-17

b) PROBLEM STATEMENT c) RESEARCH OBJECTIVE

02. 03.

LITERATURE SURVEY RESEARCH METHODOLOGY


a) RESEARCH METHODOLOGY MEANING PURPOSE OF THE STUDY POPULATION SAMPLE QUESTIONNAIRE TOOLS & TECHNIQUE OF DATA COLLECTION b) METHODOLOGY MARGIN PRICE (OUTLAY) RATIO WITH FORMULA c) AMOUNT SPENT ON SALES PROMOTION & COMPARISONS WITH OTHER ACTIVITIES

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Contd..2.

:: 2 ::

S.No. 04.

Description FINDINGS & ANALYSIS


a) FINDINGS IMPORTANCE OF SALES PROMOTION

Page No. 33-47

b) ANALYSIS & INTERPRETATION OF DATA c) PERCEPTIONS STUDY ON WHOLESALERS PERCEPTIONS Variations In Information Flow Retailers & Wholesalers Dynamics Margins Perceptions about mass media announcements STUDY ON RETAILERS PERCEPTIONS Perceptions on Scheme preference. Perceptions about buying Roles Perception about their role in decision-making Perception about response to sales promotion offers. Margins Problem of left over Perceptions about mass media announcements. Handling problems.

SUB STUDY ON CONSUMER PERCEPTIONS Willingness to buy on Sales Promotion offer. Ability to induce trial Long term Impact Perceived Quality Perceptions regarding underlying company motivations.

d) LIMITATIONS

:: 3 ::

S.No. 05.

Description CONCLUSION WITH SUGGESTIONS


CONCLUSION SUGGESTIONS Rebates Discounts Refunds or Rebates Premiums or Gifts Quantity Deals Sampling Contests Free in mail premiums. Container premium.

Page No. 49-51

REFERENCE BIBLIOGRAPHY ANNEXURE Questionnaire (Consumer-For Female Group). Questionnaire Wholesalers). (Retailers &

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LIST OF FIGURES
S.No.
01.

Description
ANALYSIS & INTERPRETATION OF DATA PERCENTAGE CONSUMPTION SUNSILK SHAMPOO (FIGURE 1) OF

Page No.
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COST PRICE FOR RETAILER & WHOLESALER FOR SACHETTE SUNSILK SHAMPOO. (FIGURE-2) COST PRICE FOR RETAILER & WHOLESALER FOR BOTTLES IN SUNSILK SHAMPOO (FIGURE 3) MARGIN PRICE RATIO FOR RETAILERS & WHOLESALERS IN SACHETTE OF SUNSILK SHAMPOO. (FIGURE-4) MARGIN PRICE RATIO FOR RETAILERS & WHOLESALERS IN BOTTLE OF SUNSILK SHAMPOO. (FIGURE 5) IMPACT OF ADVERTISEMENT ON DIFFERENT AGE GROUPS OF CONSUMERS (FIGURE-6)

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LIST OF TABLES
S.No.
01.

Description
ANALYSIS & INTERPRETATION OF DATA PERCENTAGE OF CONSUMERS USING SUNSILK SHAMPOO (TABLE NO. 1) COST PRICE FOR WHOLESALER FOR SUNSILK SHAMPOO (TABLE NO. 2) COST PRICE FOR RETAILER SUNSILK SHAMPOO (TABLE NO. 3) FOR

Page No.
35 36 36 37

MARGIN PRICE RATIO FOR WHOLESALER IN SUNSILK SHAMPOO (TABLE NO. 4) MARGIN PRICE RATIO FOR RETAILER IN SUNSILK SHAMPOO (TABLE NO. 5) IMPACT OF ADVERTISEMENT ON DIFFERENT AGE GROUP OF CONSUMER (TABLE NO. 6)

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A)

Introduction:

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. In order to enhance the effectiveness of these activities, manufacturers should understand consumer, retailers & wholesalers interpretations of their promotional activities. Retailers & wholesalers perceived price offs to have relatively greater impact compared to any other forms of sales promotion. In line with the retailers & wholesalers perceptions, the findings of consumer perceptions indicated that price offs was the most preferred type of sales promotion. Retailers &

wholesalers stated that role of word of mouth and television advertising was very important in providing information inputs to the consumers regarding sales promotion activities. This perception of retailers &

wholesalers was supported by the consumer unaided recall of sales promotion schemes which were widely advertised. As the retailer & wholesaler interacts and observes consumers more frequently and closely than the manufacturer, it would be useful for the companies to incorporate perceptions while planning sales promotion strategies.

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A study of these perceptions will reveal their preferences, their knowledge, and motivations. The study here pertains to consumers perceptions as well as retailer & wholesaler perceptions regarding sales promotion. Some past researches have suggested that promotion itself has an effect on the perceived value of the brand (Cotton and Bobb 1978, Dodson, Tybout and Sternthal, 1978, Guadagni and Little 1983, Jones and Zufryden 1980, Rothschild and Gaidis 1981, Shoemaker and Shoaf 1977). 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 (Chandon, Laurent, and Waensink 1997).

In Bhilai City fast moving consumer goods (FMCG) category has witnessed an outburst of sales promotion activities in the postliberalization era. Very little literature has focused on sales promotion perceptions. This study is an attempt to address the gap in literature by providing empirical support through exploration. In the U.S. context several aspects of consumer perceptions of deal frequency and deal prices have been studied (Aradhna Krishna, Imran S. Curriuun and Robert W. Shoemaker 1991). Whereas Page Moreau, Aradhana Krishna, Bari Harlam (2001) studied differing perceptions with respect

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to price promotion from the point of manufacturers, retailer & wholesaler and consumers. Effects of promotions on variety seeking and reinforcement behaviour has also been studied. (Barbara Khan and Jagmohan Raju 1991).

All the above researches have focussed on price promotions and their response. Our study though exploratory has considered perceptions for price as well as non-price promotions in Sunsilk Shampoo category. The reasons for the study were: i) The widespread use of sales promotions in Sunsilk Shampoo category. ii) Historically, whenever there was a downward trend in growth, sales promotion activities took the front seat of promotional mix.

iii)

Companies planned these activities with inward looking view hence it was felt that it would be useful to understand the perceptions of consumers, retailers & wholesalers regarding

sales promotion activities to improve the effectiveness of these activities.

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01. What is Sales Promotion ?


For the purpose of this study, following definitions of sales promotion were kept in mind. Kotler defines sales promotion as: Sales promotion consists of a diverse collection of incentive tools, mostly short-term designed to stimulate quicker and/or greater purchase of particular products/services by consumers or the trade.

Roger Strang has given a more simplistic definition i.e. sales promotions are short-term incentives to encourage purchase or sales of a product or service.

Hence, any forms of incentives (price cut or value added nature) offered for short period either to trade or consumers are considered as sales promotion activities.

1.1 Dealers and Retailers


Most of producers do not sell their goods directly to the final users; between them stands a set of intermediaries performing a variety of functions. These marketing intermediaries constitute a marketing channel. Formally marketing channels are sets of interdependent organization involved in the process of making a product or services

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available for use or consumption. They are the pathway a product or services follows after production, culminating in purchase and use by the final end user.

In FMCG Products generally there are two channel members or intermediaries i.e. Dealers and Retailers.

A marketing channel system is the particular set of marketing channels employed by a firm. One of the chief roles of marketing channels is to convert potential buyers into profitable orders. Marketing channels must not only serve the markets, they must also make markets.

The channels chosen affect all other marketing decisions. The companys pricing depends on whether it uses mass merchandisers or high-quality boutiques. The firms sales force and advertising decisions depends on how much training and motivation dealer boutiques need.

If the firm is successful, it might branch into new markets and use different channels in different markets. In smaller markets, the firm might sell directly to retailers; in larger markets, it might sell through distributors. In rural areas, it might work with general-goods merchants; in urban areas, with limited-line merchants.

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a) Channel Levels: Sunsilk shampoo prefer one-level and two-level channel for the distribution of its products. One-level channel contains one selling intermediaries such as Retailer. Two-level channel contains two intermediaries i.e. DealersRetailers.

b) Dealer : A person whose business is buying and selling a particular product (Oxford Advanced Learner Dictionary, 7.1).

c) Retailer : A person or business that sells goods to the public (Oxford Advanced Learner Dictionary, 7.1). A retailer or retail store is any business enterprise whose sales volume comes primarily from retailing. Any organization selling to final consumer whether it is a manufacturer, wholesaler, or retailer- is doing retailing. Retailing includes all the activities involved in selling goods or services directly to final consumers for personal, non-business use.

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1.2 Customers
The distinguishing character of Sales promotion is that is that they draw stronger and quicker response from the target audience. Sales

promotion includes tools for consumer promotion (samples, coupons, cash refund offers, prices off, premiums, prizes, patronage rewards, free trials, warranties, tie-in promotions, cross-promotions, point-ofpurchase, displays and demonstrations. Sales promotion tools vary in their specific objectives. A free sample stimulates consumer trial.

Sellers use incentive-type promotions to attract new triers, to reward loyal customers and to increase the repurchase rates of occasional users. Sales promotions often attract brand switchers, who are Sales

primarily looking for low price, good value, or premiums.

promotions generally are unlikely to turn them into loyal users, although they may be induced to make some subsequent purchases. Sales

promotions used in markets of high brand similarity can produce a high sales response in the short run but little permanent gain in market share. In markets of high brand dissimilarity, sales promotions may be able to alter market shares permanently. In addition to brand switching, consumers may engage in stockpiling purchasing earlier than usual

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(purchase acceleration) or purchasing extra quantities. But sales may then hit a post-promotion dip. A number of sales promotion benefits flow to consumers.

Manufacturers induce consumers to try new products instead of never straying from current ones. They lead to more varied retail formats, such as the everyday-low-price store and promotional-pricing store. Retailers promote greater consumer awareness of prices. Consumers themselves enjoy some satisfaction from being smart shoppers when they take advantage of price specials. Service marketers also employ sales promotions to achieve marketing objectives. Some service firms use promotions to attract new customers and establish loyalty. Selecting consumer promotion Tools :The promotion planner should take into account the type of market, sales promotion objectives, competitive conditions, and each tools cost-effectiveness. We can distinguish between manufacturer

promotions and retailer promotions. The former are illustrated by the auto industrys frequent use of rebates, gifts to motivate test-drives and purchases, and high-value trade-in credit. The latter include price cuts, feature advertising, retailer coupons and retailer contests or premiums.

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02.

Importance & Growth of Sales Promotion in todays markets.

Those promotions are directed at channel members like distributors, wholesalers, retailers who play critical role in moving the products f the marketers to the final customers. If anyone doubts the importance or prevalence of sales promotion today, they need only pop to their local supermarket or pub, take a look in a national or local newspaper, or open the direct mail sent to their home or business address and they will instantly be given irrefutable proof of the volume and diversity of sales promotion activity in todays markets.

An American marketing academic, Philip Kotler, estimated that even as short a time ago as 10 years the ratio of advertising expenditure to sales promotion spending was roughly 60:40.

(1)

By 1997, the ratio had altered dramatically.

Now, sales

promotion is spending something in the region of 65-70% of the total. In real terms, sales promotion expenditure has been growing rapidly over the past 20 years. More proof of the importance of the function and versatility of sales promotion is forthcoming in the oft-quoted Harris International Marketing Week survey, which showed that well over 70% of the

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population had participated in competitions or games relating to products or services. (2) Over a third had done so within the last month, over 40% had sent off a packet top or token for a free gift within the last four weeks, and an amazing 54% had used a money-off coupon. Although this survey is dated 1986, there is little reason to suggest that participation in any form of sales promotion has in any way diminished, even though the style or some of the techniques employed today may have different emphases placed upon them. Indeed, if the above figures are taken

together, then as many as 60% of the population actively participate in some form of promotional activity in any one month.

This makes sales promotion one of the biggest leisure activities or pastimes in the UK today. To put sales promotion into even sharper focus as to its importance, it is as extensive as visiting a pub once a month or more. From these comparisons, one can therefore gauge the size and extent of promotional activity.

The FMCG industry had witnessed many innovative sales promotion activities in the recent past. Numerous factors were responsible for

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such a phenomenon.

One of the reasons being that the market

being sluggish, companies were trying to increase market share in stagnant to declining (volume terms) market in order to retain consumers, to encourage switching, to induce trials and liquidate excessive inventories. Another reason possible was that with the presence of so many brands the competition had increased severally leading to fight for market share and shelf space. Inflationary trend had made both the consumer as well as trade deal prone. Hence sales promotion activities in Shampoo industry posed a very interesting study and consumer, retailer & wholesaler perceptions thereof.

03. COMPANY PROFILE :Hindustan Lever Limited (HLL) drummed up a millennium resolution: to align its resources behind 30 of its strongest brands the power brands from a portfolio that consisted 100-odd brands. Sunsilk, the Rs 160-plus crore shampoo brand, was part of this select list. Of late, slowing consumer demand has led to dwindling fortunes for most FMCG companies. HLL has been no exception. Consider Sunsilk: its current market share is a shade above 20 per cent in the Rs 850-crore branded shampoo market, but barely a year ago it was pegged at 22 per cent. After Clinic Plus (HLLs biggest shampoo brand with a market

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share of 28 per cent), Sunsilk played a significant role in shoring up fortunes for the company in the category.

Hindustan Lever Ltd (HLL) has introduced in the market a complete new range of Sunsilk shampoos focusing on `hair benefits'. The new variants of Sunsilk - Black Shine, Bouncy Volume, Silky Strength and Natural Nourishment - are based on well-researched consumer needs and hair types. Says Mr. Shiva Kumar, Business Unit head, Hair care, HLL, The new Sunsilk range aims to position Sunsilk as the `hair expert' that has identified the consumers' different hair needs and offers them a shampoo in line with the clear benefit that is desired.'' The new range has variants that are harmonised in terms of product mix -- fragrance, colour and ingredients. The packaging has been designed to bring across the essence of mildness and fashion to the brand. Sunsilk Black Shine Shampoo consists of active sunflower extracts, there are lotus flower extracts in Sunsilk Silky Strength Shampoo, fruitamins in Sunsilk Bouncy Volume Shampoo and green tea extracts in Sunsilk Natural Nourishment Shampoo. Sunsilk will be available across the country and is priced from Rs 75 for 200 ml to Rs 2 for the sachet pack. The company claims that the new Sunsilk shampoo provides hair which women desire instead of providing a shampoo for their existing hair type. For example, the new variants like Bouncy Volume promise

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bounce to limp hair. The agency has also created a common identity for the brand with a baseline of Baalon mein dhadkan, dil mein shararat with Sunsilk in your hair, mischief in the air playing a part of the English print advertisements. Also the S-shaped strap-line which vertically flows through the extreme right corner of the print and television campaign for both the shampoo and colourant

advertisements is another bond. A website called Tips4me.com, which claims to be building communities of users in high-involvement categories such as beauty, fitness, finance, etc, conducted an online poll for shampoo brands in the country, recently. Hindustan Lever Limiteds Sunsilk brand emerged as the most preferred brand among the people polled. Besides Sunsilk, brands

featured in the poll were Pantene, Clinic, Head & Shoulders, Halo and others. In the most preferred category, Head & Shoulder turned out to be number two.

Since then, Sunsilk has been at the forefront of HLLs experiments with extensions, variants, pricing strategies, and large-scale advertising and promotional campaigns. As HLL chose to extract more out of its select few, it reinvented Sunsilks shampoo range and followed it up with the brands extension into hair colour. Significantly, India is the only market other than Thailand where Sunsilk is sold as a hair colour. Hindustan

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Lever Ltd (HLL) hopes to increase the growth of the Rs 40-crore hair colour market in India from the current 20 percent to 23 percent, with the launch of Sunsilk Pro-Colour its new hair colour product. The product is a brand extension of HLLs leading shampoo brand Sunsilk. Sunsilk Pro-Colour is a range of seven hair colours specially suited for the dark Indian hair and skin tone. The launch is a bid to spur the hair colour market. Hairstylist Jawed Habib is the brand ambassador for Sunsilk Pro-Colour. Says Mr. Shiva Kumar: The main challenge for us is to deliver a product that is safe, affordable and easy to use for the Indian consumer. Hindustan Lever Limited Background :Hindustan lever limited (HLL) is one of Indias oldest and most efficiently run companies. Their brands are the strongest in their

respective categories with over 2/3 of the Indian population using HLL products everyday. HLL follows its mission to add vitality to life. They strive to meet everyday needs of nutrition, hygiene, and personal care products that help people feel good, look good, and get more out of life.

In 1956,the three companies; Hindustan Vanaspati Manufacturing Company, Lever Brother India Limited and United Traders Limited

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merged to form the company HLL, the first foreign subsidiary to offer a percentage of its equity to the Indian public. Over the years, HLL have partenered with or acquired the following companies : Brooke Bond Lipton Ponds Tata Oils Mills Company Kimberly Clark Corporation Kothari General Foods Cadbury India Lamke Limited (another Tata Company) Kwality Icecream Group Modern Foods Cooked Shrimp and Pasteurized Crabmeat (Amalgam Group of Companies) Pepsi Today, HLL is Indias largest Fast Moving Consumer Goods (FMCG) Company. Their businesses are comprised of over 20 distinct

categories in Home & Personal Care Products and Foods & Beverages.

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B) Problem Statement :
In todays world every Company is striving hard to maintain its position in the market. In my research I am trying to reflect the strategies which the company must take to enhance its sales volume and profit figure in case of Sunsilk Shampoo.

C)
i)

Research Objective :
To get an insight into retailers & wholesalers views regarding the schemes being offered in Sunsilk Shampoo category, and consumer perceptions.

The main objectives of the study are:

ii)

To study consumer perceptions regarding various schemes in this category and responses toward them.

iii)

To get an insight into the preferences of the consumers of sales promotion schemes in the category.

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A)
1.

LITERATURE SURVEY
The details of the topic Nature of promotion was taken by the literature Sales Management Decisions, Strategies & Cases, whose authors are Richard R. Still, Edward W. Cundiff & Norman A.P. Govoni. Nature of promotion - The marketing mix activities of product planning, pricing and distribution are performed mainly within a business or between a business and the members of its distribution channels. However, through its promotional activities a firm communicates directly with potential customers. And as we will see, it is not a simple process. attempt to influence. a) Promotional Methods There are five forms of promotions Personal selling, advertising, sales promotion, public relations and publicity. b) Personal Selling It is the direct presentation of a product to a prospective customer by a representative of the organization selling it. Basically promotion is an

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Personal selling takes place face to face or over the phone, and it may be directed to a middleman or a final consumer. c) Advertising It is impersonal mass communication that the sponsor has paid for an in which the sponsor is clearly identified. The most familiar forms of ads are found in the broadcast (TV & Radio) and print (news papers & magazines) Media. d) Sales Promotion It is demand stimulating activity designed to supplement advertising and facilitate personal selling. It is paid for by the sponsor and frequently involves a temporary incentive to encourage a purchase. directed at consumers. Many Sales promotions are The majority, however, are

designed to encourage the companys sales force or other members of its distribution channel to sell its products more aggressively. promotion. e) Public Relations This latter category is called Trade

It encompasses a wide variety of communication efforts to contribute to generally favourable attitudes and opinions

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toward an organization and its products.

Unlike most

advertising and personal selling it does not include a specific sales message. The targets may be customers

stock holders, a government agency, or a special interest group. Public relations can take many forms, including

news letters, annual reports, lobbying, and sponsorship of charitable or civic events.
2.

The details of the topic The promotional budget was taken by the literature Fundamentals of Marketing whose authors are William J. Stanton, Michael J. Etzel, & Bruce J. Walky. The Promotional Budget - Establishing promotional Budgets is extremely challenging because management lacks reliable standards for determining how much to spend altogether on advertising or personal selling, and how much of the total budget to allocate to each promotional mix element. A firm may have the alternative of adding seven sales people or increasing its trade show budget by $200,000 a year, but it cannot determine precisely what increase in sales or profits to expect from either expenditure.

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The details of the topic Conventional Wholesale Retail Trade continues to dominate the Scene was taken by the literature Marketing Management Planning, Implementation and control whose authors are V.S. Ramaswamy & Namakumari. Conventional Wholesale Dominate the scene Retail Trade continues to S.

In total contrast with the Western Countries, where for mats like super markets/retail chains dominate the distribution system, conventional wholesale retail trade dominates the scene in India. Again, unlike the west, where a handful of apex distribution chains service the millions of retail shops, in India, stand-alone wholesalers/retailers dominate the scene. Some experts believe that before long, India too will see the massive growth of distributing companies, retail chains. Many others, however, feel that in India, large distribution outfits will not replace traditional distributors in the near future.

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A)
1.

RESEARCH METHODOLOGY
MEANING:The process of developing the objective statement, deciding modes of data collection and the means of analysis the date and the final presentation leading a logical interpretation is known as methodology.

In 1stchapter to the topic was introduced by the Introduction of Sales Promotions, What is Sales Promotion and also in respect of dealer, retailer and customer, Importance of Sales promotion and also company profile. In 2nd chapter the Literature Survey of Study is given.

2.

PURPOSE OF THE STUDY

a) To Study the Impact Of Sales Promotion on Retailers and Wholesalers in Bhilai Region. b) To study the Impact of Sales Promotion on Consumers in Bhilai region.

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3.

POPULATION Population is the total area, number of person or group of person, who are the subject of the study. To determine the population is the first step of any research, it defines the boundaries of research. To achieve the objectives of this study, the region of Bhilai was selected.

4.

SAMPLE A sample is a finite number of units taken for purpose of study out of the Universe. The sample is selected for the convenient

study. For this optimum Sample should be selected sample should represent whole Universe. It neither feasible nor desirable to go to each and everyone so sampling is done. The sample size is 50 in all the three cases of consumers, retailers and wholesalers and the sample units are the people of Bhilai.

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5.

QUESTIONNAIRE A questionnaire is a device for collection data from large, diverse and widely scattered group of people. It can be a most useful

tool for gathering information from respondent. Keeping in mind the objective of study questionnaire are prepared. 6. TOOLS AND TECHNIQUE OF DATA COLLECTION Data is collected by the help of questionnaire. It was collected in all the hours of the day. And for the analysis the data PERCENTAGE METHOD has been used.

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B) METHODOLOGY
In order to address the above questions an exploratory study was conducted. The idea was to probe and get deeper insight into sales promotion scenario in Sunsilk Shampoo market and to tap perceptions of retailers & wholesalers and consumers. In order to address above mentioned objectives :(i) (ii) (iii) (iv) (v) Study of secondary sources was carried out. In-depth interview of 50 retailers was undertaken In depth Interview of 50 Wholesalers was undertaken. In depth Interview of 50 Consumers was undertaken. Structured questionnaire was designed to seek consumer responses. (vi) Structured questionnaire was designed to seek retailers responses. (vii) Structured questionnaire was designed to seek

Wholesalers responses. Convenience sampling was used for both retailers & wholesalers as well as consumer studies. 50 retailers ranging from small

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kirana store to supermarket were approached. All the retailers & wholesalers were located in the different markets of Bhilai Region. The respondents for consumer study were female group of the age group between 15-50 and above belonging to middle and upper middle and upper class. The total respondents were 50 in number. They were residing in different parts of Bhilai City hence sole decision-makers for this category. Also the age group of 15 to 25 being more experimental and likely to be more deal prone, so their perceptions, preferences would give some insights to companies planning sales promotions targetted at them. In-depth interviews and questionnaires being filled by retailers & wholesaler and conducted the study with the help of interview guide. Inferences were drawn from that. In case of consumer study with the help of structured questionnaire, simple frequency analysis were carried out and inferences were drawn.

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Margin Price (Outlay) Ratio The margin price ratio was calculated by taking the monetary value of the margin offered to the wholesaler and retailer and dividing it by the amount of money he needs to spent in order to purchase the product. The ratio varied from 0.03 to 0.025 among various varieties (Table - 4&5) . For Example in case of Rs. 1 and Rs. 2 Sachette the margin ratio was for wholesaler is 0.03 and 0.025 respectively and in case of retailer it is 0.07 and in case of bottles of Rs.10, Rs. 45, & Rs.75 the margin ratio for whole saler is 0.021 in all type of bottles and in part of retailer it is 0.07. With this level of margin neither retailers will feel rewarded or get attracted, nor the wholesalers will be motivated to purchase.

FORMULA :: Margin Price Ratio = Profit Margin . MRP of the FMCG product

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C) AMOUNT SPENT ON SALES PROMOTION & COMPARISONS WITH OTHER ACTIVITIES.


What does it all add up to in terms of money budgeted and spent? It is almost impossible to put a figure on the exact amount that businesses and other organizations spend because the task falls down when deciding on definitions of sales promotion and ways of measuring the physical amounts. It is a relatively simple

matter to discover how much has been spent on television and press advertising and it is feasible to get a fair estimate of spending on direct mail. Sales promotion, however, does not lend itself to any easy way of estimating its annual expenditure, as it extends to such a wide variety of activities. Even the

European promotional Marketing Association has tried to come up with a clearer picture, but the old problem still crops up categorization. Many promotions use advertising, direct mail,

telesales literature, price cuts (lost income or promotion cost?) or other media. And what about pack alterations to Whose budget do these come

accommodate special deals? under?

Once these points have been taken on board and understood, it becomes apparent that sales promotion is not one of the also-

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rans in terms of the business or the overall marketing program but one of the most important planks in the structure of each. As has already been shown, it is also one of the most pervasive aspects of all our lives. And it will remain so. The pace of

change is accelerating in most areas of our lives. We have only to look back even a few years to see what has happened with regard to the electronic media, the opening up of new markets with new or vastly improved products, and the increasing availability of services to wider audiences who can be reached more rapidly than ever. More people with more disposable

income and aspirations to match will mean more, not less, promotional activity in the future as companies vie with each other to ensure that they get more than their fair share of that disposable expenditure. This means that every organization, whether trading for profit or not for profit will need to study, understand, create, and implement sales promotion in all its multifarious facets if they are to stay around, let alone succeed, in such a tough business environment. What follows is a route map or guide to help those unfamiliar with the sales promotion terrain to devise the right type

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of promotional activity and get the biggest bang from the drum for minimal effort.

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A) Findings :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. 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. With respect to nature of scheme, the finding suggested that premium (free gift) was popular with companies. While both retailer & wholesaler 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.

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The findings exhibited that both the retailer & wholesaler 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.

Importance of Sales Promotion :Also the importance of the role of mass media came out clearly in both the studies. Companies need to create sufficient awareness about sales promotion schemes through mass media in order to create awareness The role of retailers & wholesalers in influencing consumer in brand choice decision in a Sunsilk Shampoo was found to be insignificant which also supports the above observations. Sunsilk Shampoo are low involvement products characterised 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 ( Point of purchases) for scheme announcements.

B) Analysis and Interpretation of Data

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TABLE NO. 1 Percentage of Consumers using Sunsilk shampoo.

Consumers using Sunsilk Shampoo YES NO TOTAL

No. of Respondents 40 10 50

Percentage 80 20 100

20%

Yes No

80%

FIGURE 1 PERCENTAGE CONSUMPTION OF SUNSILK SHAMPOO INTERPRETATION :From the above table it is clear that % consumption of Sunsilk shampoo by majority of the respondents is maximum i.e. by 80% where as 20% of them are not consuming it.

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TABLE NO. 2 COST PRICE FOR WHOLESALER FOR SUNSILK SHAMPOO. MRP Sachette Rs.1 Rs. 2 Bottles Rs. 10 Rs. 45 Rs. 75 Cost Price for Wholesaler (Rs.) 0.90 1.81 9.09 40.90 68.18

TABLE NO. 3 COST PRICE FOR RETAILER FOR SUNSILK SHAMPOO. MRP Sachette Rs.1 Rs. 2 Bottles Rs. 10 Rs. 45 Rs. 75
2

Cost Price for Retailer (Rs.) 0.93 1.86 9.30 41.85 69.75

Cost price for retailers & wholesalers in Sachette.

1.5 1 0.5 0 0.5 1 Retailer Wholesaler

M.R.P

1.5

FIGURE 2 COST PRICE FOR RETAILER & WHOLESALER FOR SACHETTE IN SUNSILK SHAMPOO INTERPRETATION :From the above table it is clear that cost price for retailer & wholesaler for Sachette in Sunsilk Shampoo by majority of the respondents is in between 0.90P. to Rs.1.86 in different MRPs of Sachettes.

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70 60
Cost price for Cost price for retailers & wholeretailers & wholesalers in bottles. salers in bottles.

50 40 30 20 10 0 10 15 30 45 60 75 Retailer Wholesaler

M.R.P M.R.P

FIGURE 3 COST PRICE FOR RETAILER & WHOLESALER FOR BOTTLE IN SUNSILK SHAMPOO INTERPRETATION :From the above table it is clear that cost price for Retailer and wholesaler for bottle in Sunsilk shampoo by majority of the respondents is in between from Rs.9.09 to Rs.69.75 in different MRPs of Bottles.

TABLE NO. 4 MARGIN PRICE RATIO FOR WHOLESALER IN SUNSILK SHAMPOO M.R.P. (Rs.) Sachette 1.00 2.00 Bottle 10.00 45.00 75.00 Margin for Whoesaler (Rs.) 0.03 0.05 0.21 0.95 1.57 Margin Price Ratio 0.03 0.025 0.021 0.021 0.021

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TABLE NO. 5 MARGIN PRICE RATIO FOR RETAILER IN SUNSILK SHAMPOO M.R.P. (Rs.) Sachette 1.00 2.00 Bottle 10.00 45.00 75.00
0.08 0.07 0.06 0.05 0.04 0.03 0.02 0.01 0 0.5

Margin for Retailer (Rs.) 0.07 0.14 0.7 3.15 5.25

Margin Price Ratio 0.07 0.07 0.07 0.07 0.07

Margin Price Ratio

Retailer Wholesaler

M.R.P. OF Sachette

1.5

FIGURE 4 MARGIN PRICE RATIO FOR RETAILERS & WHOLESALERS IN SACHETTE OF SUNSILK SHAMPOO

INTERPRETATION :From the above table it is clear that Margin Price ratio for Retailers and Wholesalers in Sachette of Sunsilk shampoo by majority of the respondent lies between 0.03 to 0.025 in different rates of Sachette .

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Margin Price Ratio

0.08 0.07 0.06 0.05 0.04 0.03 0.02 0.01 0 10 45 75

Retailer Wholesaler

M.R.P. of Bottle

FIGURE 5 MARGIN PRICE RATIO FOR RETAILERS & WHOLESALERS IN BOTTLE OF SUNSILK SHAMPOO INTERPRETATION :From the above table it is clear that the margin price ratio for Retailers & Wholesalers in bottle of Sunsilk Shampoos by majority of Respondents, in case of Retailers it is 0.07 and 0.021 in case of wholesalers in all rates of the bottles.

TABLE NO. 6 IMPACT OF ADVERTISEMENT ON DIFFERENT AGE GROUP OF CONSUMER No. of Observer 15 12 8 4 Age group 15-19 20-30 30-50 50 & Above Effect Significant Insignificant Insignificant Insignificant %age 90% 90% 80% 86% Advertisement Advertisement Advertisement Advertisement Advertisement

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14

Impact of Advertisement on 10 Consumers 8


6 4 2 0 15-19 20-30 30-50 50 & above

12

Age Group

FIGURE 6 IMPACT OF ADVERTISEMENT ON DIFFERENT AGE GROUPS OF CONSUMERS

INTERPRETATION :From the above table it is clear that impact of advertisement on different age groups of consumers by majority of the respondents (90%) is maximum in case of age group between 15 to 19 and minimum (14%) in case of age group between 50 and above.

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C) Perceptions :01.
1.1

Study on Wholesalers Perceptions


Variations in Information Flow Smaller (non-supermarket, small format store) wholesalers received relatively less support compared to supermarkets in terms of servicing, margins, information about sales promotion activities from the agencies. Many a times small wholesalers were only informed verbally about sales promotion schemes by the agency salesmen during the scheduled weekly visits.

1.2

Retailers & wholesalers Dynamics At the time of sales promotion activities, wholesalers had tendency to push unwanted stocks onto the smaller retailers. In fact these retailers preferred to stock variety of brands and wanted payment for shelf and window display to increase traffic into their store. However, supermarkets and big retailers were pampered and given special services and given better margins and better allowances.

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1.3

Margins It was found that in Sunsilk Shampoo category margins varied from 2 to 5% depending of the size of the wholesale outlet, bargaining power of a wholesaler, quantity ordered by him etc. Mostly margins were linked to size of the volumes that were ordered.

1.4

Perceptions about mass media announcements Forty Nine out of fifty wholesalers viewed that whenever sales promotion scheme was announced on TV, it created pull and they were more than willing to stock such brands.

02.

Study on Retailer Perceptions


Perceptions on Scheme Preference It was found that retailers perceived price offs as a better form of sales promotion activity. Price offs in their opinion had relatively a greater impact compared to any other form of sales promotion activity like Bonus packs, Premium, Contests etc. Retailers preferred price offs the most, then bonus pack, premium, contests, in order of importance.

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2.2

Perception about Buying Roles Retailers viewed that the person who came to the shop (who may be a maid, son, daughter, daughter-in-law, child) was the decider of a Sunsilk Shampoo brand and not the income provider (e.g. head of the family). It could be inferred that visibility of information about the sales promotion activity at the point of purchase could result into the purchase of a promoted brand.

2.3

Perceptions about their role in decision-making Retailers had relatively very low influence in affecting choice. It could be inferred that visibility and awareness about the scheme were the critical success factors so that pull could be created.

2.4

Perceptions about Response to Sales Promotion Offers They believed that younger age-groups were more experimental in nature, amenable to trying new brands, and sought/looked for or asked whether there were any) sales promotion schemes running on any Sunsilk Shampoo at the time of purchase.

2.5

Margins It was found that in Sunsilk Shampoo category margins varied from 4 to 10% depending of the size of the retail outlet, bargaining power of a retailer, quantity ordered by him etc. Mostly margins were linked to size of the volumes that were ordered.

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2.6

Problem of left-over Leftover stocks at the end of any scheme was required to be sold by the retailer & wholesaler before they ordered fresh stocks. In case of bonus packs scheme, leftover stock was often dismantled (cut open buy one get one free) and sold them individually as a regular shampoo. This approach of the company leads to misappropriation, which in turn could result in adverse brand image.

2.7

Perceptions about mass media announcements Forty Nine out of fifty retailers viewed that whenever sales promotion scheme was announced on TV, it created pull and they were more than willing to stock such brands.

2.8

Handling Problems Many a times retailers had to handle various sales promotions offers simultaneously in a category and also across categories and there was no formal communication planning either from the wholesaler or the company. Remembering each offer and handling was a problem especially for a small retailers & wholesalers which was often a as one-man show.

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3
3.1

Sub-Study on Consumer Perceptions:


Willingness to buy on sales promotion offer Sixty-three per cent of the sample did not show willingness to buy a brand due to promotion while 27% showed willingness and 10% were not sure. This indicates that when 27% showed willingness, and 10% consumers who were not sure, these groups might be lured through innovative and lucrative sales promotion offer.

3.2

Ability to induce trial Forty per cent of the respondents had said that sales promotion had the ability to induce trial.

3.3

Long-term impact In order to understand ability of the promotions to increase longterm sales, respondents were asked about continuity of purchase of a brand after the withdrawal of promotion. Eighty per cent of the respondents indicated that they would not continue. But 20% said they would. Thus, it could be inferred that promotions in this category (low involvement products) might encourage trial and brand switching but not long term loyalty.

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3.4

Perceived Quality: Ninety-three per cent of the respondents had a perception that the quality of the promoted brands remained the same during promotion, while 7% felt that it was inferior than before. It can be inferred that promotions were not leading to negative brand quality perceptions. It was further reinforced when 53% of the respondents said that sales promotion would not weaken their loyalty towards the brand.

3.5

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

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Retailer 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.

D) Limitations :1. The geographical scope of the study was restricted to the Bhilai Region due to time and resource constraints. 2. The study being exploratory in nature, the sample size was restricted to 50 consumers (female group) and 50 retailers & wholesalers. 3. Focus being mainly drawn on are in-depth only probing, and the not

generalizations conclusive. 4.

indicative

Generalization of finding of the subject cannot apply on the total universe.

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CONCLUSION
Companies need to systematise information flow regarding sales promotion activities particularly at wholesaler 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 and wholesaling is fragmented, direct reach by companies is next to impossible. Through wholesalers and proper feedback mechanism, companies keep in touch with the market. From the study it was found that smaller retailers & wholesalers felt neglected and not enthused to implement the schemes, particularly when additional handling, stocking, accounting was required on the part of a retailer & wholesaler without compensatory margins. It can be seen that the retailer & wholesaler and consumer perceptions matched with respect to preferences of schemes, underlying motivations and role of mass media. This implies that the retailer & wholesaler 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 & wholesaler 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 & wholesalers as well as consumers.

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SUGGESTIONS
It refers to short term use of incentives or other promotion activities that seek to stimulate interest, trial or purchase. The distinguishing character of sales promotion is that they draw stronger and quicker response from the target audience. They create some sense of immediacy or urgency to respond. Some of the sales promotion activities commonly used by the marketeers are: (i) Rebates: Price promotions involve some kind of tinkering with the price of the product to make it attractive to the buyers to buy on urgent basis. (ii) Discounts: Discounts are like price promotions, in which certain percentage of price is reduced as discount from the list price. (iii) Refunds or Rebates: In these the seller offers to refund a part of price paid by the customer on the production of some proof of purchase. (iv) Premiums or Gifts: The customer is given a gift along the product like conditioner sachette with the pack of sachette of shampoo. (v) Quantity Deals: Sometimes sellers devise special package, which gives extra quantity of the product to the buyer at less price or no price.

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(vi)

Sampling: Sampling means giving free sample of product to the customer.

(vii) Contests: Consumer contests are another form of commonly use promotions. (viii) Free in mail premiums: Rather the customer is required to correspond with the marketeer by sending, for example a wrapper or some proof of purchase or multiple purchases to claim the benefit. (ix) Container premium : The marketeer devises special containers for packaging the product which could be used by the customer for some use.

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REFERENCE

1.

Aradhna Krishna, Imran S. Curriuun and Robert W. Shoemaker, Consumer Perceptions of Promotional Activity, Journal of Marketing, Vol.55 (April 1991), pp.4-16.

2.

Page Moreau, Aradhna Krishna, Bari Harlam, The Manufacturerretailers & wholesalers-consumer triad: Differing perceptions regarding price promotions, Journal of Retailing, 77 (2001), pp.547- 569.

3.

Kotler Phillip, Marketing Management : Analysis, Planning, Implementation and Control, 9th ed., Prentice Hall of Bhilai City, 1997.

4.

India infoline.com

5.

Agencyfaqs.com (web site)

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BIBLIOGRAPHY
1. Aradhna Krishna, Imran S. Curriuun and Robert W. Shoemaker, Consumer Perceptions of Promotional Activity, Journal of Marketing, Vol.55 (April 1991), pp.4-16. Advertising Association (1997), Marketing Pocket book NTC Publications, Henley-on-Thames. Page Moreau, Aradhna Krishna, Bari Harlam, The Manufacturerretailers & wholesalers-consumer triad: Differing perceptions regarding price promotions, Journal of Retailing, 77 (2001), pp.547- 569. The Times, March 2, 2001.
5. Kotler Phillip, Marketing Management : Analysis, Planning,

2. 3.

4.

Implementation and Control, 9th ed., Prentice Hall of Bhilai City, 1997. 6. Sales Management decisions, strategies and cases, Fifth edition, By Author Richard R. Still, Edward W. Cundiff & Norman A.P. Govoni. 7. Fundamentals of Marketing, Tenth Edition, McGraw-hill International editions, Marketing & Advertising series by Author William J. Stanton, Michael J. Etzel & Bruce J. Walkey. 8. Marketing Management, Planning Implementation and Control in Global perspective, Indian Context, Third Edition by Macmillan Business Books by Author V.S. Ramaswamy and S. Namakumari. URL 1. 2. 3. India infoline.com Agencyfaqs.com (web site) Search on www.google.com

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65

Questionnaire (Consumer-For Female Group)


Respected Madam, I am conducting a survey entitled Impact of sales promotion on Consumer, Retailer & Wholesaler With special reference to Sunsilk Shampoo at Bhilai Region . I need your help in conducting this study. Kindly provide me your valuable opinion to fill this questionnaire. Your information will be kept confidential and will be exclusively used for academic purpose.

Sushmita Yadav M.B.A 2nd Sem . B.I.T. Durg (C.G.) (a) (b) 1. Demographic Information Name :- .. Address :- ............................... ... (c) (d) Phone Number :- .. Age group:15-19 [ ] (e) Marital Status:(f) 20-30 [ ] Married [ ] 30-50[ ] 50 & above [ ]

Unmarried [ ] Post-Graduate [ ]

Educational qualification :Undergraduate [ ] Graduate [ ]

(g) Employment Status:Employed [ ] (h) 2. Unemployed [ ] Selfemployed [ ]

Monthly personal income List of branded shampoo you are aware of:. .

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3. 4.

Do you prefer sunsilk shampoo over other? Yes [ ] No [ ] If yes then mention your priorities in choosing it. Price [] Quality Advertisement Quantity Discounts Others [] [] [] [] []

5.

If the company withdraws all promotional strategies from the market, will you still prefer sunsilk over the rest of the shampoos? Yes [ ] No [ ]

6.

If Yes then why: 7. If no then why: 8. Which one do you prefer? Sachet [ ] Bottle[ ]

Date : ___________ ( Signature )

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Questionnaire (Retailers and Wholesalers)


Respected Sir, I am conducting a survey entitled Impact of sales promotion on Consumer, Retailer & Wholesaler With special reference to Sunsilk Shampoo at Bhilai Region . I need your help in conducting this study . Kindly provide me your valuable opinion to fill this questionnaire . Your information will be kept confidential and will be exclusively used for academic purpose . Sushmita Yadav M.B.A 2nd Sem . B.I.T. Durg (C.G.) 1. a) b) c) d) e) Demographic Information Name :- .. Address :- ............................ ..... Phone Number :- .. Age group:20-30 [ ] 30-40 [ ] 40-50 [ ] Graduate [ ] No [ ] 50&above [ ] Post Graduate [ ]

Educational Qualifications:Under Graduate [ ] Yes [ ]

2 . Is sunsilk shampoo available in your shop?

3.

If yes, reasons for keeping the sunsilk stock: How much margin do you enjoy on sunsilk? Sachet .. Bottle

4.

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5. 6.

Which is more in demand? Sachet [ ]

Bottle [ ]

Why do you keep sunsilk shampoo in your shop? . . How much do you buy in bulk? In case of sachet .. In case of Bottle.

7.

8.

Do promotional strategies undertaken by company have any effect on the demand of sunsilk shampoo? .

Date : ___________ ( Signature )