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INDEX

CHAPTER NO. 1 INTRODUCTION 1.1 Introduction of the study 1.2 Objectives 1.3 Need and importance of the study 1.4 Scope and significance of the study 1.5 Research methodology 1.6 Limitations 2 LITERATURE REVIEW 2.1 Research Review Literature 2.2 Subjective Review Literature 3 COMPANY AND INDUSTRY PROFILE 3.1 Industry profile 3.2 Company profile 4 DATA ANALYSIS Consumers Retailers 5 6 FINDINGS, SUGGESTIONS AND CONCLUSION OF THE STUDY ANNEXURE AND BIBLIOGRAPHY Questionnaire Bibliography CONTENTS PAGE NO 1-6 2 3 4 4 5 6 7-32 8 25 33-47 34 41 48-76 49 61 77-84 85-91 86 91

CHAPTER - 1 INTRODUCTION

INTRODUCTION
Background:
In todays intensely competitive, rapidly changing and highly complex environment characterize by diminishing customer loyalty, the need to be market focused and 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 programs. In this project, an attempt has been made to examine the nature of sales promotion activities in toilet soap category in India, study retailer 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 toilet soap category, followed by price offs. Retailers perceived price offs to have relatively greater impact compared to any other forms of sales promotion. In line with the retailers perceptions, the findings of consumer perceptions indicated that price offs was the most preferred type of sales promotion. Retailers 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 was supported by the consumer unaided recall of sales promotion schemes which were widely advertised. As the retailer 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. The fast-moving consumer goods (FMCG) sector is an important contributor to Indias GDP. It is the fourth largest sector of the Indian economy. The FMCG market is estimated to treble from its current figure in the coming decade. Penetration levels as well as per capita consumption of most product categories like jams, toothpaste, skin care and hair wash in India are low, indicating the untapped market potential. The growing Indian 3

population, particularly the middle class and the rural segments, present an opportunity to makers of branded products to convert consumers to branded products. The Indian rural market with its vast size and demand base offers a huge opportunity for investment. Rural India has a large consuming class with 41 per cent of Indias middle-class and 58 per cent of the total disposable income.

Objectives of study:
The purpose of project is to discover answers to questions through the application of scientific procedures. The main aim of research is to find out the truth which is hidden and which has not been discovered as yet. Though each research study has its own specific purpose, we may think of research objectives as falling into a number of following broad groupings:

1. To study Consumer preferences with respect to sales promotion for Wipro. 2. Tostudy the effective of sale promotion towards Consumer & Retailer in Wipro especially in soaps product line. 3. To study the impact of sales promotional tool in Consumer buying decision and Retailer business decision 4. To analyze tradeoffs, relative importance of different attributes while responding to a sales promotion offer. 5. To evaluate the impact of sales promotional tool on Consumer and Retailer. industry.

6. To suggest the better promotional tool or practices for Wipro Ltd., to improve Soap sales

Product categories under study

TOILETERIES Soaps

Need and Importance of Study:


Sales Promotion acts as a bridge between advertising and personal selling. Due to the diversity of markets, the importance of sales promotion had increased tremendously. Sales promotion helps remove the customers dissatisfaction about a particular product, manufacturer and create brand- image in the minds of consumers and users. The sales promotion devices at the point of purchase stimulate the customers to make purchase promptly on the spot. From the point of view of consumers Sales promotion is important for consumers because I. the consumer gets the product at a cheaper rate; II. it gives financial benefit to the customers by way of providing prizes and sending them to visit different places; III. the consumer gets all information about the quality, features and uses of different products; 5

IV. certain schemes like money back offer creates confidence in the mind of customers about the quality of goods; and V. it helps to raise the standard of living of people. By exchanging their old items they can use latest items available in the market. Use of such goods improves their image in society

Scope and significance of study:


companies are looking to get a competitive edge quick returns are possible for short term profits more consumers are looking for promotions before purchase channel members putting pressure on mf. for promotions advances in tech. make SP easier (ie coupon redemption)

Research Methodology:
Research Design: Research design selected for this project is Descriptive.

Data collection Method:


(a) Primary Data Collection Method: Survey method was used for primary data collection. We used questionnaire as an instrument for survey method. Structured questionnaire. Type of questionnaire: Open ended and closed ended. (b) Secondary Data Collection method: Reference books. Internet. 6

Sampling Detail:
1. Target population: The population for this research study consists of the residence of Hyderabad. 2. Sampling unit:In this study the sampling unit is individual consumer. 3. Sample size: 4. Sampling method: 50 consumers 100 retailers. The sample is selected by using convenience-sampling method.

Limitations of the study:


We considered Hyderabad 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.

CHAPTER 2 LITERATURE REVIEW


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Studies on relevant literature have shown that sales promotion has grown in importance for both manufacturers and retailers worldwide. The use of sales promotions is driven by few factors which include a rise in advertising clutter and pricing, sales promotion has become more respectable, increasing influence of retailers, positive approaches towards micromarketing, decreases on planning time horizons, and the various positive snowball effect of sales promotion activities

TACTICAL MARKETING TOOLS


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. 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 9

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.

INTEGRATED MARKETING COMMUNICATION


Promotion is one of the important elements of marketing mix. There are so many elements of promotion such as Advertising Direct Marketing Public Relations Sales Promotion

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Traditionally, sales Promotions have been used by marketer to increase sales in the short term. However, in the last few decades this communication tool has evolved and now is considered from a strategic point of view. For this reason, it is necessary to realize new studies in this area and study how consumers evaluate sales promotions. Sales promotions have grown in both importance and frequency over the past few decades. Although an accurate estimate for total sales promotions expenditures does not exist, we can be sure that the trend is up. Sales promotion serves three essential roles: It informs, persuades and reminds prospective customers about a company and its products. Even the most useful product or brand will be a failure if no one knows that it is available. As we know, channels of distribution take more time in creating awareness because a product has to pass through many hands between a producer and consumers. Therefore, a producer has to inform channel members as well as ultimate consumers about the attributes and availability of his products. The second purpose of 11

promotion is persuasion. The cut throat competition among different products puts tremendous pressure on their manufacturers and they are compelled to undertake sales promotion activities. The third purpose of promotion is reminding consumers about products availability and its potential to satisfy their needs. From these elements Sales Promotion is the element which is in the focus of this project. Further Sales Promotion is quite broad term it includes Consumer Oriented Sales Promotion Trade Oriented Sales Promotion Consumer promotions Trade Promotions Price cuts Couponing Case allowance Displays Sampling Advertising allowances Feature advertising Price packs/value packs Display Allowances Free goods Refunds Trade coupons Retailer coupons Special events Financing Incentives Contests/premiums Sweepstakes/contests Contests Table : Summary of popular sales promotional tools

Retailer Promotions

Consumer Oriented Sales Promotion


Consumer Oriented Sales Promotion is the main topic of this project. Here emphasize is given to motivate consumer to increase sales. Consumer Oriented Sales Promotion includes Sampling, Couponing, Premiums, Contest, Refunds, Rebates, Bonus Packs, Price-off, Event marketing etc.

Definition:
A sales promotion strategy is an activity that is designed to help boost the sales of a product or service. This can be done through an advertising campaign, public relation activities, a free sampling campaign, a gift campaign, a trading stamps campaign, through 12

demonstrations and exhibitions, through prize giving competitions, through temporary price cuts, and through door-to-door sales, telemarketing, personal sales letters, and emails. The importance of a sales promotion strategy cannot be underestimated. This is because a sales promotion strategy is important to a business boosting its sales. While developing a sales promotion strategy for the product it is important to keep the following points in mind- Consumer attitudes and buying patterns, Brand strategy, Competitive strategy, Advertising strategy, and other external factors that can influence your products, availability and pricing. For the purpose of this study, following definitions of sales promotion were kept in mind. 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 shortterm 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.

Marketers uses consumer oriented sales promotion tools for the following reasons: To increase short term sales To induce trial To reduce inventory To establish a brand name To make cross selling To cope up with competition 13

To avoid advertising clutter

Tools of Consumer Oriented Sales Promotion


There are so many tools or technique available to the marketers for achieving objective of sales promotion. These tools should be used considering all other factors affecting such as cost, time, competitors, availability of goods etc. These tools are as under 1. Coupons 2. Price-Off 3. Freebies 4. Scratch Cards 5. Lucky Draws 6. Bundling Offer 14

7. Extra Quantity Lets have look at each tool

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

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

3. Freebies:
Freebies are a popular form of modern marketing and are some of the best things about the internet. The definition of freebies is products or services given away for free at no cost to the consumer. Well thats the definition we came up with. I am a bargain freebie shopper, pretty much going for any free product and informing everyone about it. 15

At different times, big and small companies often give away prizes and money which is too good to be true. Often its in the pursuit of more customers or a larger fan base and it often works.

3. Scratch Cards
A scratch card (also called a scratch off, scratch ticket, scratcher, scratchie, scratch-it, scratch game, scratch-and-win or instant game) is a small token, usually made of cardboard, where one or more areas contain concealed information: they are covered by a substance that cannot be seen through, but can be scratched off. 4. Bundling Offers: Product bundling is a marketing strategy that involves offering several products for sale as one combined product. This strategy is very common in the software business (for example: bundle a word processor, a spreadsheet, and a database into a single office suite), in the cable television industry (for example, basic cable in the United States generally offers many channels at one price), and in the fast food industry in which multiple items are combined into a complete meal. A bundle of products is sometimes referred to as a package deal or a compilation or an anthology. 5. Frequency of Schemes: Twenty-eight different schemes (Appendix-I; Master Table of the Schemes) on toilet soap brands were identified as seen from Table below.

Table : Segment-wise Scheme Analysis


Soap Segments For 75 gms. Nature of Schemes
Price off Premium (free gift) Bonus Pack

Premium (>Rs. 15) 3 7 1

Popular (Rs.8-15) 3 6 3

Economy (< Rs.8) 2 0 1

Total

8 13 5 16

Contest/Lottery Total

11

1 13

1 4

2 28

6. Segment-wise Frequency of Schemes: Thirteen schemes (47%) announced were found to be on popular segment (Rs.815 for 75 gms.) of toilet soap brands. This was closely followed by 11 schemes (40%) in premium segment (> Rs.15 for 75 gm.). Thus it could be inferred that companies were trying to upgrade consumers of economy/popular brands to popular/premium soap brands respectively.

Factors Influencing Consumer Oriented sales promotion:


Mainly four factors should be taken into account while determining the sales promotion program. Target market Nature of product Stage of product life cycle Budget available for promotion 1. Target Market: While doing sales promotion, marketer must know who their target market is; otherwise there is no use of all effort because it leads to no where. A target market can be

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in any of the stages of buying hierarchy i.e. awareness, knowledge, liking, preferences, conviction and purchase. Each stage defines a possible goal of promotion. 2. Nature of the product: There are various product attributes which influence sales promotional strategy. When the unit price is low the manufacturer as well as the customer has low risk but he can get the benefit of mass marketing. Therefore, mass marketing requires mass sales promotion schemes. Sales promotion scheme differ for products like its durability, perishable goods etc. 3. Stage of product Life Cycle: Sales promotion strategies are influenced by the life cycle of a product. When a new product introduced, prospective buyers must be informed about its existence and its benefits and middlemen must be convinced to stock it. Later, if a product becomes successful, competition intensifies and more emphasis is placed on sales promotion to increase its sales. 4. Budget Available for Promotion: The funds available for promotion are the ultimate determinant of the promotional programme. A business with ample funds can make more effective use of sales promotion programme than a firm with limited financial resources. The budget for sales promotion can be prepared by the following methods Percentage of Sales Fixed funds available for sales promotion Following the competition, and Budgeting by objective.

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Sales Promotion from the Consumers point of view


Willingness to buy on sales promotion offer: Sixty per cent of the sample did not show willingness to buy a brand due to promotion while 30% showed willingness and 10% were not sure. This indicates that when 30% showed willingness and 10% consumers who were not sure, these groups might be lured through innovative and lucrative sales promotion offer. Ability to induce trial: Forty per cent of the respondents had said that sales promotion had the ability to induce trial which reinforces the above inference. Long-term impact: In order to understand ability of the promotions to increase long-term 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. Preference of Schemes: Price off was the most preferred type of scheme. Maximum customers ranked price-offs as number one or two. Perceived Quality: Majority of respondents had a perception that the quality of the promoted brands remained the same during promotion, while some of them felt that it was inferior than before. It can be inferred that promotions were not leading to negative brand quality 20

perceptions. It is found that some customer strongly preferred to buy their regular brand and said that sales promotion would not weaken their loyalty towards the brand. 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. Findings from retailer and consumer perception studies, it is evident that there was a matching of perceptions regarding nature of scheme (price offs as most preferred type of scheme mentioned by consumers and retailers perceptions about consumer preferences). Since retailers observe consumers in store behavior were frequently and directly, their perceptions regarding providing consumer behavior are likely to be accurate. Such inputs from the retailers would be useful to companies. The retailers had the perception that those schemes which were announced through mass media had better response. This was reinforced by the consumer survey which showed that recall in case of heavily promoted schemes on TV was found to be very high. Retailers prediction of companies motivation for offering sales promotion were matching with the consumer perception regarding the same. Thus both viewed that companies were using sales promotion activities mainly to increase short term sales or encourage switching or selling excess stock and not really to give value benefit or enhance/reinforce brand/company image.

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Trade Oriented Sales Promotion


Trade Oriented Sales Promotion aimed to motivate channel member of the company and to encourage them to push companys product. Trade Oriented Sales Promotion includes dealer contest and incentives, trade allowances. Point-of-purchase displays, sales training programs, trade shows, cooperative advertising, and other programs designed to motivate distributors and retailers to carry a product and make an extra effort to push it to their customers

Sales promotion from the retailers point of view:


Perceptions on Scheme Preference: It was found that retailer 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. Perceptions about Buying Roles: Retailers viewed that the person who came to the shop (who may be a maid, son, daughter, daughter-in-law and child) was the decider of a toilet soap 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. Perceptions about their role in decision-making Retailer 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. 22

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 toilet soap at the time of purchase. Perceptions about Communications of Sales Promotion Schemes: Retailers perceived that role of word of mouth and television advertising played an important part in providing information inputs to consumers regarding sales promotion activities.
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Variations in Information Flow: Smaller (non-supermarket, small format store) retailers received relatively less support compared to supermarkets in terms of servicing, margins, information about sales promotion activities from the dealers. Many a times small retailers were only informed verbally about sales promotion schemes by the dealer salesmen during the scheduled weekly visits. Dealer-Retailer Dynamics: At the time of sales promotion activities, dealers 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. Margins: It was found that in sales promotion schemes margins varied from 6 to15% 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. 23

Perceptions about terms and conditions: Retailers were not found to be happy with sales promotion schemes where their margins were cut on the pretext of just fast movement of inventory of the brand being promoted. Also if additional incentive was offered it was subject to minimum performance requirement. Nature of POP: Retailers indicated that most of the POP (Point of Purchase) materials were meant for brand advertisement and not for giving information regarding the schemes. Thus it could be inferred that companys follow up was not adequate. Servicing during duration of Scheme: In stock-out situation during the running of the sales promotion schemes, smaller retailers had to wait for replenishment of stocks till the next scheduled weekly visit by the dealer salesman but big retailers were serviced on telephonic request for replenishment of stocks. This clearly indicated the disparity in treatment. Problem of left-over: A leftover stock at the end of any scheme was required to be sold by the retailers 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 soap. This approach of the company leads to misappropriation which in turn could result in adverse brand image.

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Gifts for Retailer motivation: Companies at times were rewarding retailers by giving free gifts like thermos flasks or clocks if they sold more than certain quantity in a given period. Companies were making a half-hearted effort to motivate retailers. Perceptions about mass media announcements: Retailers viewed that whenever sales promotion scheme was announced on TV, it created pull and they were more than willing to stock such brands. For example Medimix and Dettol contest was not advertised on TV, hence there was very little awareness leading to unsold stock till 6 months. While Lux Gold Star which was heavily promoted on T.V. is recalled even today. Post Promotion Behavior: Retailers observed that in most cases sales promotion scheme on a brand might encourage a buyer to switch a brand temporarily but he would revert back to original brand after promotion. Handling Problems: Many a times retailers had to handle various sales promotion offers simultaneously in a category and also across categories and there was no formal communication planning either from the dealer or the company. Remembering each offer and handling was a problem especially for a small retailer which was often an as one-man show.

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Why do Sales promotion schemes affect sales?


There are three mechanisms behind these facts. It is Purchase quantity, Brand switching and Category expansion. First, consumer can increase the quantity they buy just because the product is on sale. Second, consumers are inducing to purchase another brand different from the one they would have purchased when there is no promotional incentive. Finally, consumers total consumption of the product category is increased by the promotion. However, in the long term this positive effect may be diluted because a promotional campaign has no permanent effect in the sales of the firm

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Sales Promotion Strategy


Sales are the lifeblood of a business, without sales there would be no business in the first place; therefore it is very important that if a business wants to succeed, it should have a sales promotion strategy in mind. The primary objective of a sales promotion is to improve a companys sales by predicting and modifying your target customers purchasing behavior and patterns. Sales promotion is very important as it not only helps to boost sales but it also helps a business to draw new customers while at the same time retaining older ones. There are a variety of sales promotional strategies that a business can use to increase their sales, however it is important that we first understand what a sales promotion strategy actually is and why it is so important. A sales promotion strategy is an activity that is designed to help boost the sales of a product or service. This can be done through an advertising campaign, public relation activities, a free sampling campaign, a free gift campaign, a trading stamps campaign, through demonstrations and exhibitions, through prize giving competitions, through temporary price cuts, and through door-to-door sales, telemarketing, personal sales letters, and emails. The importance of a sales promotion strategy cannot be underestimated. This is because a sales promotion strategy is important to a business boosting its sales. When developing a sales promotion strategy for your business, it is important that you keep the following points in mind.

Consumer attitudes and buying patterns Your brand strategy Your competitive strategy Your advertising strategy Other external factors that can influence products availability and pricing. 27

There are three types of sales promotion strategies:


A push strategy A pull strategy or A combination of the two

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

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

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cash refunds or rebates, loyalty programs and rewards, contests, sweepstakes, games, and point-of-purchase displays. A Combination of Two Strategies: A combination sales promotion strategy is just that; it is a combination of a push and a pull strategy. It focuses both on the distributor as well as the consumers, targeting both parties directly. It offers consumer incentives side by side with dealer discounts.

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The Short term Impact of Promotions:


Lets have look at the impact of promotions on purchase behavior during the promotional period i.e. the week or the month when the promotion was being run. The majority of the empirical studies have focused on the impact of promotions in the short term. The key findings across the studies are discussed below. Temporary price reductions (price off) substantially increase sales: There is ample evidence to show that promotions lead to dramatic increases in sales of promoted brand in the short term. Studies have consistently reported high sales effects and high price elasticity of brands which are on promotion. The economic rationale for the promotional response is clear temporary price cuts increase the value of the product to the consumer and it leads to immediate action. Sales boost can be quantified on the basis of brand switching, primary demand expansion and consumer stockpiling during a promotion. Sales Promotion leads to brand substitution with the product category: The sales bump during the promotional period into sales due to brand switching, purchase time acceleration and stockpiling. Studies on brand switching have shown that brand switching effects within a category are asymmetric such that promotions on higher quality brands impacts weaker brands disproportionately. During a promotion, higher quality brands induce a large number of consumers to switch to them as compared to lower quality brands. One explanation advanced for this finding by researchers is that large share brands have higher brand equity and attract switchers more than low share brands. Sales Promotion leads to purchase acceleration/stockpiling effects:

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In response to a promotion, consumers may buy more quantity of the product category or buy at an earlier time than usual (purchase acceleration effect). If consumers buy extra quantity during a promotion or earlier than normal, then they are not in the market to buy products once the promotion is over. Thus purchase acceleration is demonstrated through A lengthening of inter purchase times after a promotion. Purchase acceleration was more likely to be exhibited in increased purchase quantity than in shortened inter purchase times. Results showed that consumers mostly made up for the large quantity purchased by waiting longer until purchasing again. Results indicated that heavy users tended to accelerate purchases more than light users. There was negligible difference in the acceleration propensities of high versus low income groups. Sales Promotion leads to primary demand expansion for a category: While it was traditionally assumed that consumption rates remain fixed during and after a promotion, but from this project I came to know that promotions also have a primary demand expansion effect. When a primary demand expansion occurs, promotion induced increase in purchase quantities does not significantly extend the time till the next purchase in the category occurs, thus indicating that there has been an increase in consumption promotions induced consumers to buy more and consume faster. It is found that promotion induced inventory temporarily increased consumption rates within the category e.g. in categories such as bacon, salted snacks, soft drinks and yogurt exhibited primary demand expansions as a result of promotion while bathroom tissue, coffee, detergent and paper towels exhibited stockpiling only. Sales Promotions affect sales in complementary and competitive categories: From this project it is found that promotion not only increases sales of main product but it also lead to increase in sales of complementary categories. Found strong cross relationships between products of the promoted product category indicating brand substitution behavior. They stated that retail price promotions work as a form of implicit price bundling whereby the consumer surplus is transferred from the promoted item to non promoted items. Also found that retail price promotions create significant complementary and substitution effects within the store. 31

The Long term Impact of Promotions:


Strategies are builds to reap the benefits for longer period of time; same is true in sales promotion strategies. Let us see impact of promotions effort and study the impact over a longer time period e.g. 4-6 months or even a few years after a sales promotion campaign. The result showed that consumer promotions for leading brands of established packaged products had no after-effects on the brands sales or repeat buying loyalty. The extra sales of a brand while promoted came virtually all from the brands existing long-term customer base for which the experience of buying the promoted brand was nothing new. It is found that although the short term effects of promotions are strong; these promotions rarely exhibit long term effects. It is observed that each sales component generally lacked a permanent effect and the effect of promotion was short lived and increase in promotions affected consumers stockpiling decisions in the long run. They found that the combined short and long-term elasticity of promotions was zero. The stockpiling induced by a promotion was essentially offset by reduced demand in the long term. Thus increased sales were more a result of sales borrowed from the future than increased consumption

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SWOT Analysis of FMCG Sector

Strengths:

Well-established distribution network extending to rural areas. Strong brands in the FMCG sector. Low cost operations.

Weaknesses:

Low export levels. Small-scale sector reservations limit ability to invest in technology and achieve economies of scale. Several "me-too products

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Opportunities:

Large domestic market. Export potential. Increasing income levels will result in faster revenue growth..

Threats:

Imports. Tax and regulatory structure. Slowdown in rural demand.

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CHAPTER - 3 INDUSTRY AND COMPANY PROFILE

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Industry profile
FMCG Concept and Definition:

The term FMCG (fast moving consumer goods), although popular and frequently used does not have a standard definition and is generally used in India to refer to products of everyday use. Conceptually, however, the term refers to relatively fast moving items that are used directly by the consumer. Thus, a significant gap exists between the general use and the conceptual meaning of the 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?

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FMCG Category and Products: Category Household care Products Fabric Wash (laundry soaps and synthetic detergents); Household cleaners (dish/utensil cleaners, floor cleaners, toilet cleaners, air fresheners, insecticides and mosquito repellents, Food and Beverages metal polish and furnisture polish). Health beverages; soft drinks; staples/cereals; bakery products (biscuits,bread,cakes); snack food; chocolates; ice cream; tea; coffee; vegetables; dairy products; bottled water; branded rice; Personal Care branded sugar; juices etc.. Oral care, hair care, skin care, personal wash(soaps); cosmetics and toiletries; deodorants perfumes; femine hygiene; paper products. Characteristics of FMCG Products: Individual items are of small value. But all FMCG products put together account

for a significant part of the consumer's 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. Definition of Sales promotion: For the purpose of this study, following definitions of sales promotion were kept in mind. 37

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. - Kotler sales promotions are short-term incentives to encourage purchase or sales of a product or service. - Roger Strang

Sales promotion includes several communications activities that attempt to provide added value or incentives to consumers, wholesalers, retailers, or other organizational customers to stimulate immediate sales. These efforts can attempt to stimulate product interest, trial, or purchase. Examples of devices used in sales promotion include coupons, samples, premiums, point-of-purchase (POP) displays, contests, rebates, and sweepstakes.

Toilet Soaps Industry- Introduction

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The toilet soaps market is estimated at 530,000 tonnes per annum including small imports. Hindustan Lever is, of course, the market leader. The market is littered over with several, leading national and global brands and a large number of small brands, which have limited markets. The popular and premium brands include Wipro,Santoor, Lifebuoy, Lux, Cinthol, Pearsl, and No.1 .

39

There were 45 leading national brands. None of the national brands had more than 5% market share and many more regional and unorganised sector/local brands. Hindustan Lever was the market leader with about 30(number) of toilet soap brands with a total market share of 67% in 2009-10 in an organised sector as seen from Table below, which gives the lead players and their respective market share.

Table: The Lead Players and their Market Share


Company HLL Godrej Wipro Nirma P&G Colgate Palmolive Others Percentage of Market Share 67 10 9 8 3 1 2

Soaps form the largest pie of the FMCG Market with bathing & toilet soaps accounting for around 30% of the soap market, by value. Currently, the soap industry is divided into three segments namely Premium, Popular and Economy/ Sub popular

Table: Price Segments of Toilet Soaps


Segment
Premium Popular Economy

Price
> Rs.15 Rs.8-15 < Rs.8

Weight
75 gm. 75 gm. 75 gm.

The brands in popular segments were found to be frequently promoted as there was intensive price competition in this segment. The brands could also be classified based on medicinal benefits, cosmetic benefits, perfumes, natural/herbal properties. For the purpose of this study, only price segments were considered To fight competition, major players Hindustan Unilever Ltd (HUL), Godrej Consumer Products Ltd (GCPL) and Wipro Consumer Care & Lighting(WCCL) are now drawing up fresh game plans. And the accent is clearly on innovation to gain mind share as well as market share in this overcrowded category. WIPRO 40

Wipro Consumer Care is yet another principal player enjoying a five per cent market share. After lying dormant for a decade, Wipro Consumer Care promises moving into top gear. Wipro has three important brands of soap in its portfolio: Santoor, Milk and Roses, Chandrika. Santoor soap The magic of Sandal & Turmeric comes together in Santoor - a soap that nourishes your skin with Sandal and Turmeric to make you look much younger. Santoor offered a combination of sandal and turmeric. Wipro later introduced a new variant of Santoor - a sandal and besan variant. The new variant offered the combined benefits of sandal and besan. Santoor's market share is around three per cent. But its low market share, the company argues, has to be seen in the context of its regional presence. This, an outcome of limited resources, happened around mid-1990s, as the first round of revival began. Around this time, the company took a conscious decision to follow a stateoriented strategy Santoor Chandan A premium soap manufactured with extracts of Sandalwood oil, Santoor Chandan has a strong lingering fragrance and is a favourite of discerning customers. Santoor, India's third-highest selling soap brand, and South India's second biggest soap brand has been built assiduously with advertising that has presented the Santoor Woman in a 'mistaken identity' situation. The campaign, which is in its 20th year, keeps getting refreshed every two years. Women want their skin to lie about their age. The image managers of Santoor, which has become the largest selling soap brand in South India, has made that the main selling point of their promotion campaign over the years. Previously in tune with the mood of the country Santoor came out with a film that shows the Santoor 41

woman entering a voting booth, to cast her vote, only to be stopped for 'age proof'. Again a new interpretation of the mistaken identity theme Ageless skin campaign Over the years pricing obviously played a crucial part. Santoor was originally launched in 1985 as an ordinary soap with sandalwood and turmeric being its main ingredients. Though Moti and Mysore Sandal soap were the other brands which had sandal as main ingredient, they were available for a premium. Wipro tried to position the soap in the skincare segment at a popular pricing. However, when the company realised that by banking on ingredients may not bring good results for long, it decided to reposition the brand from being ingredient-oriented to benefit-oriented on a platform of younger looking skin. The theme of ageless skin, captured first in a TV advertisement 20 years back, has remained constant over the years. And the company intends to keep it that way as long as its bringing the right results. While the theme has remained constant, the Santoor woman has evolved. In the first two years, the Santoor woman was at a wedding ceremony; she was buying bangles; she was buying a book etc. After that she began going to aerobics classes, and then after four-five years we took her to do dress designing. Interestingly Santoor had come out with a cricket film in time for the World Cup. As a result of the campaign women see themselves in every single Santoor soap ad. That may not be an exaggeration as women are surely buying the soap in large numbers. In the first quarter of the last fiscal, Santoor became the largest brand in its category in South India in value market share, though the company has just 7.5 per cent share in the Indian personal care soap market worth around Rs 8,000 crore.

OVERVIEW OF WIPRO

42

Vision : To offer services based on world-class infrastructure, industry expert skills, proven process-oriented service operations that are backed by principals to ensure the world's best way of delivering IT infrastructure management solution. Mission: "To serve customers with integrity through innovative, value for money solutions, by applying thought day after day" Values: Human values , integrity, Innovation drives us

Wipro started as a vegetable oil company in 1947 from an old mill founded by Azim Premji's father. When his father died in 1966, Azim, a graduate in Electrical Engineering from Stanford University, took on the leadership of the company at the age 21. He repositioned it and transformed Wipro (Western India Vegetable Products Ltd) into a consumer goods company that produced hydrogenated cooking oils/fat company, laundry soap, wax and tin containers and later set up Wipro Fluid Power to manufacture hydraulic and pneumatic cylinders in 1975. At that time, it was valued at $2 million. In 1977, when IBM was asked to leave India, Wipro entered the information technology sector. In 1979, Wipro began developing its own computers and in 1981, started selling the finished product. This was the first in a string of products that would make Wipro one of India's first computer makers. The company licensed technology from Sentinel Computers in the United States and began building India's first 43

mini-computers. Wipro hired managers who were computer savvy, and strong on business experience. In 1980 Wipro moved in software development and started developing customized software packages for their hardware customers. This expanded their IT business and subsequently invented the first Indian 8086 chip. Since 1992, Wipro began to grow its roots off shore in United States and by 2000 Wipro Ltd ADRs were listed on the New York Stock Exchange. With over 25 years in the Information Technology business, Wipro Technologies is the largest outsourced R & D Services provider and one of the pioneers in the remote delivery of IT services. Being a global provider of consulting, IT Services, outsourced R&D, infrastructure outsourcing and business process services, we deliver technologydriven business solutions that meet the strategic objectives of our Global 2000 customers. Wipro today employs 96,000 people in over 50 countries. A career at Wipro means to learn and grow continuously, opportunities to work on the latest technologiealongside the finest minds in the industry, competitive salaries, stock options and excellent benefits.

WIPROs Strategic Business Units (SBUs):


Wipro Infrastructure Engineering - Wipro Infrastructure Engineering offers worldclass hydraulic cylinders and truck hydraulic components and represents the Kayaba, Kawasaki, Sun Hydraulics and Teijin Seiki range of hydraulic products in India. With state-of-the-art manufacturing facilities and extensive product development and testing facilities, Wipro Infrastructure Engineering has emerged leader in the hydraulic cylinders and truck tipping systems market in India. Wipro Infotech India - Wipro Infotech is the IT services, solutions and products division of Wipro. It operates in the geographies of Asia-Pacific and the Middle-East. Wipro Infotech is one of the leading manufacturers of computer hardware and a provider of systems integration services in India. The company manufactures a popular line of 44

desktops, notebook PCs, data servers and offers a range of technology services. Wipro infotech, the companys middle east and Asia Pacific IT services and products business, recorded revenues of Rs 2.70 billion, an increase of 68 per cent over the same period last year. Its PBIT grew by 48 per cent to Rs 135 million. Wipro infotech accounted for 15 per cent of revenue and three per cent of PBIT for the quarter ending June 30, 2004. Wipro Lighting Vision: innovative range of cleanroom luminaries, clean & pure Wipro Lighting manufactures and markets the Wipro brand of luminaires, lamps and accessories. Wipro Lighting caters to both institutional and retail consumers, offering lighting solutions across various application areas such as commercial lighting for modern work spaces, manufacturing and pharmaceutical companies, designer petrol pumps and outdoor architecture. Wipro consumer care Products - At WIPRO, the consumer care and lighting division, which precedes the mainstay IT services, made news recently with its aggressive moves. It gobbled up Hindustan Lever's dormant brand Glucovita in the glucose drinks segment and then upstaged Marico Industries to take up the distribution of Chandrika soap. And there are no pauses, as Vineet Agrawal, President of Wipro's Consumer Care and Lighting division, is betting on further acquisitions to help the business leapfrog to new highs. Wipro Technologies: Wipro Technologies is the No.1 provider of integrated business, technology and process solutions on a global delivery platform. Wipro Technologies is a global services provider delivering technology-driven business solutions that meet the strategic objectives of our clients. Wipro has 40+ Centers of Excellence that create solutions around specific needs of industries. Wipro delivers unmatched business value to customers through a combination of process excellence, quality frameworks and service delivery innovation. Wipro is the World's first CMMI Level 5 certified software services company and the first outside USA to receive the IEEE Software Process Award

45

WIPRO GROUP COMPANIES: Business


Wipro Technologies

Products
IT Services Product Engineering Solutions Services Technology Infrastructure Business Process Outsourcing Consulting Services

Wipro Infotech ltd

Notebooks Desktops Servers Enterprise Products Sun Servers IBM Servers Business Application and Development Data Warehousing Technology Integration

Wipro Customer Care & Lighting Wipro Infrastructure Engineering Wipro GE Medical System Ltd Wipro Biomed

Fast Moving Consumer Goods Construction, Mining, Agriculture Ports Medical Systems Specially Products Life Sciences Diagnostic Medical Systems Managed Services

WIPRO OVER THE YEARS


1945 Incorporation as Western India Vegetable Products Limited 1947 Establishment of an oil mill at Amalner, Maharashtra, India 1960 Manufacture of laundry soap 787 at Amalner 46

1970 Manufacture of Bakery Shortening Vanaspati at Amalner 1975 Diversification into engineering and manufacture of hydraulic cylinders as WINTROL (now called Wipro Fluid Power) division in Bangalore. 1977 Name of the Company changed to Wipro Products Limited 1980 Diversification into Information Technology under Information Technology Division 1981 Launched India's first minicomputer. 1982 Name of the Company changed to Wipro Limited 1983 Formation of Wipro Information Technology Limited and Wipro Systems Limited. 1984 Production of toilet soaps with a capacity of 4000 tones per year. 1986 Launch of Santoor brand toilet soap. 1987 Manufacture of fatty acid and glycerin at Amalner. 1988 New Business Unit, Wipro BioMed started to market and service bioanalytical and diagnostic instruments. 1990 Incorporation of Wipro GE Medical Systems, a joint venture with GE Medical Systems. 1991 Diversification into Lighting and launch of Baby Care products 1995 Wipro InfoTech and Wipro Systems merged with Wipro Limited 1996 Registered Office of Wipro shifted from Mumbai to Bangalore 1997 Six Sigma Quality journey begins 1998 Wipro launches its repositioned Corporate Identity (Rainbow Flower and Applying Thought) and rearticulates its externally reoriented values 1998 Wipro branded computers and systems launched 47

1998 Achieved SEI-CMM Level 5, highest global software quality ranking in all Software Services offered by Wipro 1999 Wipro becomes # 1 in market capitalization in the country 2000 Wipro listed on New York Stock Exchange. 2001 Becomes the first company to be assessed at PCMM Level 5. 2002 Acquisition of GEMSIT, Spectramind and the R & D services of Ericsson in India. 2003 Acquisition of Nerve wire 2004 Start of Total Outsourcing business 2005 Acquisition of 3D networks 2006 Launch of GSMC- Global Service Management Centre for remote service delivery 2007 Wipro Arabia Joint Venture found

2008 Launch of Wipro Egypt Development Center 2009 Closure of the Wipro New Logic R&D Sophia Antipolis Center, experienced in WIFI, BT integrated circuit design. 2009 Relaunch of Santoor. WCCLG Revenues cross Rs. 2000 Cr. 2010 Wipro Technologies announced the inauguration of its new development centre in Melbourne. 2011 Relaunch of Glucovita

Management Committee
Our Chairman Azim H. Premji, senior executives of Wipro and external members who are global leaders and visionaries, form the Wipro Board of Directors which provides direction and guidance to the organization. 48

Azim H. Premji Executive Directors

Girish S. Paranjpe

Suresh C. Senapaty

Suresh Vaswani

Independent Directors

Ashok S. Ganguly

B. C. Prabhakar

Dr. Henning Kagermann Jagdish N. Sheth

N. Vaghul

P. M. Sinha

William Arthur Owens

Shyam Saran

CHAPTER 3 DATA ANALYSIS

49

Consumers

50

Q1. Which brand of Soap do you use?


Company HUL Wipro Godrej ITC Others Bathing soaps Lux Pears Lifebuoy Santoor No.1 Cinthol Fair Glow Fiama Vivel Others Respondents 6 8 5 3 2 3 2 2 2 17

Interpretation:
The above question has been formed to know the soaps at the top of the mind of the customers. It shows those consumers purchase and use of that particular brand. It will help to the company to know the market scenario and the major brands in the market. Form the above result it is clear that out of 50 customers more than 15 are consumers are having the same brand as the image in their mind, whereas others category is also showing the higher graph than these 3 major players(Wipro, Godrej, ITC).

51

Q2. Do you always buy the same brand of Soap?


Particulars Yes No Respondents 28 22 percentage 56 44

Interpretation: 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 soap. FMCG are such a market where the level of loyalty remains low and this is because of many reasons.

52

Q3. Which factors do you normally consider while purchasing a particular brand of Soap?
Factors Fragrance Quality Company image Price Packaging Others Bathing soap 9 17 8 11 3 2 Percentage 18 34 16 22 6 4

Interpretation:
The objective behind this question is to know the effect of influencing factors in the purchase decision of the soaps. It mainly contains the factors like, quality which players an important role in the purchase decision of the soaps. If we look at the graph of the soaps it shows quality as the most influencing factors in the purchase decision while price is also an important for purchase decision.

53

Q4. Do you consider promotional schemes while purchasing a particular brand of Soap?
Particulars Yes No Respondents 39 11 Percentage 78 22

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

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 H0 is accepted as the graph shows that 39 out of 50 consumers are looking for such schemes before they make purchase.

54

Q5. Which of the following promotional schemes you have come across so far?
Promotional schemes Coupons price off Freebies scratch cards lucky draw Bundling extra qty. Respondents 4 19 5 3 2 7 10 Percentage 8 38 10 6 4 14 20

Interpretation:
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 quantity is the two main offers/schemes which consumers have came across at the time of purchase. It will help the manufacturers and marketers too how too launch their new products in the market with which schemes.

Q6. Which medium do you feel is suitable to promote the various promotional schemes?
55

Source Radio TV Newspaper Hoarding Others

Respondents 3 18 14 7 8

percentage 6 36 28 14 16

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 news papers as the media to promote the product in the market.

Q7. Is there any existing scheme on the Soap you are currently using?
Particulars Respondents Percentage

56

Yes No

29 21

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. In this situation more then 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 may be because of the present stock of the product at their place.

Q8. If yes, please specify?


Particulars Respondents Percentage

57

3+1/Other Free Discount No idea No answer

18 14 6 12

36 28 12 24

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 then of your choice will you switch over?
58

Particulars Yes No

Respondents 36 14

Percentage 72 28

Interpretation:
It shows the level of brand loyalty among the consumers. The result clearly shows that out of 100, 73 people are ready to switch over to another brand if they find better promotional schemes which suits their budget means more qyt + less cost + quality. Combination of all these schemes will run better in the market.

Q10. Give reason for the same?


Particulars Respondents Percentage

59

Cost+qty Quality Satisfaction Brand loyal More benefit/budget Season change No answer

8 9 2 3 11 2 15

16 18 4 6 22 4 30

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.

60

Q11. Give suggestions about futuristic promotional schemes?

This show the consumers future expectations from the whether company to come with new schemes or continue with present one. It shows consumers demand which the manufacturers have to meet.

61

Retailers

62

Q1. Since how long are you in this business?


Particulars 1-5 Years 5-10 Years More than 10 years Respondents 24 27 49

60 50 40 30 20 10 0 Series1

1-5 Years 24

5-10 Years 27

More than 10 years 49

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

63

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


Companies ITC HUL WIPRO Godrej Others Respondents 96 100 90 94 68

Soap in stock
120 100 80 60 40 20 0 Series1 ITC 96 HUL 100 WIPRO 90 Godrej 94 Others 68

Interpretation:
It gives idea about the capacity of the retailers to stock the goods and also the variety of the products they are stocking. It will also make clear the demand of the goods in their stores and the selling of the product in market. Most of the retailer stocks all types of soap.

64

Q3. Rank the following factors that customers look for in the purchase of Soap. (Rank from 1 to 6)
Factors Fragrance Quality Company Image Price Packaging Others 1 3 66 9 17 4 1 2 24 23 18 28 5 2 3 33 7 34 24 2 0 4 22 3 24 16 27 8 5 10 1 11 6 38 34 6 8 0 4 9 24 55

Bathing Soap
70 60 50 40 30 20 10 0 Fragrance Quality Company Image Price Packaging Others 1 3 66 9 17 4 1 2 24 23 18 28 5 2 3 33 7 34 24 2 0 4 22 3 24 16 27 8 5 10 1 11 6 38 34 6 8 0 4 9 24 55

Interpretation: It gives an idea about the priority the influencing factors too the consumers and also the weight age of that factor over other factors. In the above result people are more quality and price oriented. On the other hand people are also conscious about the company image. Because sometimes the consumer remember that name of the product by the company name and also from the past performance of that company. Fragrance and packaging are not influencing factor as per the respondents. 65

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


Particular Yes No Respondents 33 67

Suggestion
80 70 60 50 40 30 20 10 0 Series1 Yes 33 No 67

Interpretation:
This could be a very help question to understand the role of retailers in the purchase decision. In above graph 67% of retailer are not suggest to purchase particular brand because of personal relation or that customer are brand loyal. While 33% of the retailer are suggesting the consumers to buy particular brand. There could be many reasons like, extra margin, relations with consumers and quality of the products which retailer may get the benefit of the same.

Q5. If Yes why?


66

Particular High margin Quality Relationship No reason

Respondents 9 17 7 67

If yes
80 70 60 50 40 30 20 10 0 Respondents High margin 9 Quality 17 Relationship 7 No reason 67

Interpretation:
it gives idea about the reasons why retailers suggest the consumers to buy particular brand. In above graph and table it is clear that for margin and of better relations with consumers and too provide quality product to consumers they suggest consumers too bye particular brand. For the company it may be helpful to target such retailers to sell their product in the market easily.

Q6. Do customers look for various schemes in the product?


67

Particular Yes No

Respondents 92 8

Customers look for various schemes


100 80 60 40 20 0 Respondents Yes 92 No 8

Interpretation:
This gives a real helpful data for checking the effect of sales promotions in the market and how seriously consumers follow the promotions before they go for purchase particular brand. The above result shows that only 8 out 0f 100 didnt go for the promotion otherwise all are looking for any type of the promotions on the product.

Q7. If yes which schemes?


68

Promotional Schemes Coupons Price Off Freebies Scratch Cards Lucky Draws Bundling Offer Extra Quantity

Respondents

11 82 35 2 19 65 79

Which schemes
100 80 60 40 20 0 Coupons Respondents 11 Price Off 82 Freebies 35 Scratch Cards 2 Lucky Draws 19 Bundling Offer 65 Extra Quantity 79

Interpretation:
The above stated results show the demand of various types of promotional schemes in the market by the consumers. Almost all types of schemes are being demanded by the consumers in the market but there are three major schemes which consumers generally look at the time of purchase or before that. Price off, product bundling and extra quantity are more demanded by the consumers over others schemes.

Q8. Which Trade Promotions do various companies offer?


69

WIPRO
Promotions Extra Margin Extra Units credit facility Gifts promo. Exp. Respondents 46 34 55 24 8

H0: Effect of trade promotions for all four brands is similar. H1: Effect of trade promotions for all four brands is not similar.

Trade Promotions by WIPRO


60 50 40 30 20 10 0 Series1 Extra Margin 46 Extra Units 34 credit facility 55 gifts 24 promo. Exp. 8

Interpretation:
From the above graph shows the trade promotions offered by the WIPRO Ltd to the retailers to attract them towards stocking their goods and also stop them switching them too other major players in the market. WIPRO is mainly offering credit facility which is offered by all major players it may differ in the time limit of the credit. It is also providing extra margin, and units with occasional gift with their schemes.

70

HUL
Promotions Extra Margin Extra Units Credit facility Gifts Promo. Exp. Respondents 47 34 58 25 22

Trade Promotions by HUL


70 60 50 40 30 20 10 0 Series1 Extra Margin 47 Extra Units 34 Credit facility 58 Gifts 25 Promo. Exp. 22

Interpretation:
The advantage of HUL over WIPRO is that it bare promotional expenses which WIPRO is not doing. It attracts more consumers through such promotions, such as display of the product, banners etc. So this may help it to attract more retailers. It may because of its less cost of production in other segments in which wipro is not operating.

71

ITC
Promotions Extra Margin Extra Units Credit facility Gifts Promo. Exp. Respondents 40 33 55 20 12

Trade Promotions by ITC


60 50 40 30 20 10 0 Series1 Extra Margin 40 Extra Units 33 Credit facility 55 Gifts 20 Promo. Exp. 12

Interpretation: ITC is also a big player in the FMCG market. It is also providing all the facilities which others are providing to retailers.

72

GODREJ
Promotions Extra Margin Extra Units Credit facility Gifts Promo. Exp. Respondents 46 32 57 19 18

Trade Promotions by Godrej


60 50 40 30 20 10 0 Series1 Extra Margin 46 Extra Units 32 Credit facility 57 Gifts 19 Promo. Exp. 18

Interpretation:
Godrej is a big player in the FMCG market. It is also providing all the facilities which others are providing to retailers. But it is lacking in bearing expenses which HUL is providing to maximum number of retailers.

73

OTHERS
Promotions Extra Margin Extra Units Credit facility Gifts Promo. Exp. Respondents 30 18 38 15 7

Trade Promotions by Others


40 35 30 25 20 15 10 5 0 Series1 Extra Margin 30 Extra Units 18 Credit facility 38 Gifts 15 Promo. Exp. 7

Interpretation:
Others include local players, as well as we established players like, wipro but their products are not in demand like other players but still they are providing all the facilities to retailers to attract towards stocking their products.

Extra

GODREJ 46

WIPR O 46

HUL 47

ITC 40

74

Margin Extra Units Credit facility Gifts Promo. Exp.

32 57 19 18 34.4

34 55 24 8 33.4

34 58 25 22 37.2

33 55 20 12 32

Anova: Single Factor SUMMARY Groups Column 1 Column 2 Column 3 Column 4 ANOVA Source Variation Between Groups Within Groups Total of SS 72.55 4573.2 4645.7 5
All the big players provide promotion to the retailers due to cut throat competition; Interpretation: from the one factor anova analysis, it is clearly seen that there is a effect of trade promotion on various brands and are similar too. As p> 0.05, it is the evidence that the null hypothesis is accepted

Count 5 5 5 5

Sum 172 167 186 160

Average 34.4 33.4 37.2 32

Variance 289.3 339.8 229.7 284.5

df 3 16 19

MS 24.1833 3 285.825

F 0.08460 9

P-value 0.96745 7

F crit 3.238872

75

Q9 Give reasons for not stocking a particular brand. Retailer stocks all types of soap because of competition.

76

Q10 Any Suggestions. Retailer suggested that packaging should be further improved and used as promotional tool, to encourage sales during certain periods the company should provide priceoff or extra quantity because that influences directly to the consumer.

77

CHAPTER 4 FINDINGS, RECOMMENDATIONS AND CONCLUSION

78

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 are such a market where the level of loyalty remains low and this is because of many reasons. Quality as the most influencing factors in the purchase decision while price is also an important for purchase decision. Schemes always attract more and more consumers towards particular brand. Simultaneously it gives idea about the factors which consumers look most in the product before they make final decision Price off and extra quantity is the two main offers/schemes which consumers have came across at the time of purchase TV as the best media to market the product which will cover majority of the viewer ship. On the second place it shows news papers as the media to promote the product in the market People are not much aware of the schemes which continue in the market it may be because of the present stock of the product at their place. 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 qyt + less cost + quality. Extra quantity with less or same price, more satisfaction, quality and other factors influence consumers to switch over too other brands. Retailer stocks all types of soap and detergent because of competition. People are more quality and price oriented. Consumer remember that name of the product by the company name and also from the past performance of that company 79

Consumer remembers that name of the product by the company name and also from the past performance of that company Retailers are not suggest to purchase particular brand because of personal relation or that customer are brand loyal Margin and of better relations with consumers and too provide quality product to consumers they suggest consumers too bye particular brand. 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. WIPRO is mainly offering credit facility which is offered by all major players it may differ in the time limit of the credit. HUL attracts more consumers through such promotions, such as display of the product, banners etc.

80

Recommendation
The findings of the empirical study indicate that unless the brand to be promoted is in the consideration set of the consumer, sales promotion by itself is unlikely to have any major impact. Clearly this shows that managers need to invest into brand building exercise so that his/her brand appears in the consideration set of the target consumers. Only after this should he spend time, money and energy on sales promotion activities. 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 its products.

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Sr.No.
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Appendix-I A list of some offers during the period (Year 2009 - 10) Brand Size Offer
Pears Dettol Dettol Dettol Mysore Sandal Mysore Sandal (Bath Tablet round soap) Pears Mysore Sandal Gold Lux Lux Cinthol International Santoor White Fair & Lovely Godrej All Care Fa Savlon Denim Cinthol Medimix Breeze Palmolive Natural Dove Lux with Honey Nirma Nivea Imperial Leather Ponds Dove 75 gm. 75 gm. 75 gm. 75 gm. 125 gm. 75 gm. 75 gm. Rs.5 off Buy2, get Dettol 80 gm talc free worth Rs.25 same brand Buy2, get 2 Eveready batteries free worth Rs.16 Scratch Card Buy2, get 20 gm. Mysore Sandal Talc free worth Rs.8 Buy1, get Bodhisalva Agarbatti free worth Rs.8 Buy1, get 2 saches Sunsilk shampoo free Buy2, get woman Gillette razor Satin care free worth Rs.30 Buy2, win Gold coin offer Save Rs.9 Buy 3 get 1 free Buy 3 get 1 free Buy one get one free Buy 3, get 1 free Buy 3 get 1 free Rs.3 off Buy 3, get mens razor free Buy 2, get 1 Promise Get free Free sachet of cough syrup Buy 2, get 1 free Buy 2, get soap dish free worth Rs.5 Rs.10 off Rs.2 off Super saver pack Rs.6 (pack of 3) Rs.10 off Rs.2 off Give a soap wrapper and get Rs.5 off on Ponds moisturising face wash Buy 2 soap and get Lakme deep skin Cleansing milk free worth Rs.29

75 gm. 75 gm. 75 gm. 115 gm. 75 gm. 75 gm. 75 gm.

100 gm. 75 gm. 75 gm. 75 gm

Companies need to systematize information flow regarding sales promotion activities particularly at dealer and retailer level. Ensuring proper information flow and devising 82

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.

Emerging Trends

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So far as FMCG market is concern there is new trend is emerging known as Joint sales promotion. Actually it is old concept but it was more prevailing in durable products now it is coming intro non durable goods also. When any sales promotion scheme either for trade or consumer is announced by more than one company and /or more than one brand of the same company, it is referred as joint sales promotion or horizontal co-operative sales promotion or cross promotion or umbrella sales promotion. Classification of joint sales promotion:

Use complementarily due to natural use New use catering complementary relationships Commonality of need due to use time Tie-up of a new /slow moving brand with an established brand Target market commonality Seasonal demand Distribution commonality Targeting new segment Derived demand Countering competitive joint sales promotions

Conclusion of the Survey

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The study reflects that the use of sales promotion undeniably has increased over the years in India. Future holds lot of promise for such schemes across wider range of product-markets. Sales Promotion has ceased to be major differentiator at least in the metros, with almost all companies offering similar freebies and gifts. As a result now marketers have to find out some innovative ways of sales promotion to differentiate from competitors. 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 sales person. So in such stores, sales promotion plays a more effective role in stimulating consumers demands. One of the very important facts we came to know from this project is that sale of goods which contain large quantity and having big packaging e.g. soap 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.

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Annexure

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Questionnaire Customers
I am a student of MBA studying in GRIET HYDERABAD and carrying out a survey for my academic project to Effectiveness of Sales Promotional Practices of Consumer and Retailer towards WIPRO Ltd. So please fill this questionnaire. Your identity would not be revealed and information will only be used for academic purpose. 1. (a) (b) (c) Demographic Information Name :- .. Phone Number :- .. Age group:- 5-19 [ ] 20-30 [ ] Married [ ] 30-50[ ] Unmarried [ ]
Post-Graduate [ ] Selfemployed [ ]

50 & above [ ]

(d) Marital Status:(e) (f)


(g)

Educational qualification :Undergraduate [ ] Graduate [ ] Unemployed [ ]

Employment Status:Employed [ ]

Monthly personal income : <10,000[ ] 10k 20k[ ] 20k-30k [ ] >30,000[ ]

Q1. Which brand of Soap do you use?


Company HUL WIPRO Bathing soaps Lux Pears Lifebuoy Santoor Wipro No.1 Cinthol Fair Glow Fiama Vivel Respondents

Godrej ITC Others

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Q2. Do you always buy the same brand of Soap?


Particulars Yes No Respondents percentage

Q3. Which factors do you normally consider while purchasing a particular brand of Soap?
Factors Fragrance Quality Company image Price Packaging Others Bathing soap Percentage

Q4. Do you consider promotional schemes while purchasing a particular brand of Soap?
Particulars
Yes No

Respondents

Percentage

Q5. Which of the following promotional schemes you have come across so far?
Promotional schemes Coupons price off Freebies scratch cards lucky draw Bundling extra qty. Respondents Percentage

Q6. Which medium do you feel is suitable to promote the various promotional schemes? Source
Radio TV Newspaper Hoarding Others

Respondent s

percentage

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Q7. Is there any existing scheme on the Soap you are currently using? Particulars Yes No Respondent percentage

Q8. If yes, please specify? Particulars 3+1/Other Free Discount No idea No answer Respondent
Percentage

Q9. If you get an attractive promotional offer in the product other than of your choice will you switch over? Particulars Yes No Q10. Give reason for the same? Particulars Cost+qty Quality Satisfaction Brand loyal More benefit/budget Season change No answer Respondent
Percentage

Respondent Percentage

Q11. Give suggestions about futuristic promotional schemes.

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Retailers

I am a student of MBA studying in GRIET HYDERABAD and carrying out a survey for my academic project to Effectiveness of Sales Promotional Practices of Consumer and Retailer towards WIPRO Ltd. So please fill this questionnaire. Your identity would not be revealed and information will only be used for academic purpose. (a) Type of store : .. (b) Phone Number :-
(c) Area : Q1. Since how long are you in this business? Particulars Respondent 1-5 Years 5-10 Years More than 10 years Q2. Name the Soap / Detergent (Company) you stock for?
(

Companies ITC HUL WIPRO Godrej Others

Respondents

Q3. Rank the following factors that customers look for in the purchase of Soap (Rank from 1 to 6) Factors 1 2 3 4 5 6 Fragrance Quality Company Image Price Packaging Others Q4. Do you suggest customers to purchase a certain brand? Particula r Yes No Q5. If Yes why? Particular Respondent High margin Quality Relationship No reason Q6. Do customers look for various schemes in the product? 90 Respondent

Particula r Yes No Q7. If yes which schemes?

Respondent

Promotional Schemes Respondent Coupons Price Off Freebies Scratch Cards Lucky Draws Bundling Offer Extra Quantity Q8. Which Trade Promotions do various companies offer? HUL WIPRO Promotions Respondent Promotions Respondent Extra Margin Extra Margin Extra Units Extra Units Credit facility credit facility Gifts Gifts Promo. Exp. promo. Exp.

ITC Promotions Respondent Extra Margin Extra Units Credit facility Gifts Promo. Exp.

GODREJ Promotions Respondent Extra Margin Extra Units Credit facility Gifts Promo. Exp. O THERS Promotions Respondent Extra Margin Extra Units Credit facility Gifts Promo. Exp. 91

Q9 Give reasons for not stocking a particular brand. Q10 Any Suggestions.

Bibliography
BOOKS
Philip Kotler, Marketing Management, 11th edition, Pearson education C.R.Kothari, Research Methodology methods & techniques,New Age Report on Study of Sales Promotion Activities in Toilet Soap

Asia Publication. International(p)ltd.publishers,2nd edition. Category, page 1, prepared by Kureshi Sonal and Vyas Preeta IIM, Ahmedabad.July 2001. Report on Product Mix Strategies:FMCG in Indian Market., page 39 54, prepared by Mohankumar T.P. and Shivaraj B., SCMS Journal of Indian Management, April-June, 2010. Report on A Benefit Congruency Framework of Sales Promotion Effectiveness, page 65 - 81, prepared by Pierre Chandon, Brian Wansink, & Gilles Laurent. Journal of Marketing vol.64(October 2000).

WEBSITES
http://www.wipro.com o http://www.wipro.com/products/index.htm http://www.pg-india_files http://www.godrej_files 92

http://www.gfk.be/ProductsAndServices/ConsumerDiagnosticTools/SpecialAnaly ses/BrandHealthCheckUp http://en.wikipedia.org/wiki/wipro

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