Research Methodology
Research Methodology
SEM-III 2013-2014
In partial fulfillment of requirement for the award of degree in Master of Business management
Submitted By:
Shaikh Sanober
Roll No. 03 Under The Guidance of:
Prof. HINDUJA
SMT. CHANDIBAI HIMATHMAL MANSUKHANI COLLEGE ULHASNAGAR, 421001
CERTIFICATE
DECLARATION
I, SHAIKH SANOBER THE STUDENT OF SMT. CHANDIBAI HIMATHMAL MANSUKHANI COLLEGE, STUDYING IN MASTER OF BUSINESS MANAGEMENT (SEM I) HEREBY DECLARE THAT, I HAVE COMPLETED THIS PROJECT ON SALES PROMOTION IN FMCG IN THE ACADEMIC YEAR 2013-2014. THE INFORMATION IS TRUE AND ORIGINAL TO BEST OF MY KNOWLEDGE.
ACKNOWLEDGEMENT
Success is an amalgam of dedication. Hard work and able guidance of people around us I am indebted to my teachers and gurus who molded at this junction of my career from where I can take off better in the competitive scenario of todays world .Working on this project has been a great pleasure & a stimulating experience. Firstly I would like to express our deep gratitude to God all mighty for his blessings, which provided me strength & patience to complete my term paper. I would also like to convey my thanks to Mr. Bill Gates who have developed the Ms Office without his contribution we would not able to make this type of attractive & in a printed way. I would also like to thanks my friends who helped me in all possible ways.
I am also thankful to Prof. HINDUJA who provided me needed information about their department and guided my term in the right direction.
1. To study the concept of FMCG i.e. Fast Moving Consumer Goods. 2. To study consumer preferences with respect to sales promotion in FMCG sector.
3. To study the sales promotional strategies. 4. To study and analyze FMCG sector with SWOT analysis. 5. To study how the FMCG improves marketing productivity through sales promotion activities.
6.
To study the relationship with consumer maintained by FMCG with the help of sales promotional strategies.
7. To study the factors influencing consumer oriented sales promotion. 8. To study the factors influencing Trade oriented sales promotion. 9. To study the effect of sales promotion activities on FMCG sector. 10. To study consumer behaviour in purchase of soaps and detergent.
RESEARCH METHODOLOGY
Primary Data :Primary data could be collected through survey method as well as questionnaire method and personal interviews with certain consumers who are likely to use the consumer goods as per company goodwill in their mind. Type of structured questionnaire is open ended and closed ended. Secondary Data :Secondary data would be collected from books, newspaper, articles, internet, magazines, journal etc.
SAMPLING DETAIL
1. Target population: The population for this research study consists of the residence of Kalyan. 2. Sampling unit: In this study the sampling unit is individual consumer.
CHAPTER SCHEME
Page8-10
II. Characteristics of FMCG Product III. Objective of the study IV. Methodology and Sampling details
2. An overview of FMCG Sector and some FMCG companies. 3. An overview of Sales Promotion concept. 4. Sales promotional strategies
5.
Page11 14
Page15 26
Page27 30
Page31 34
Page35 65
Page66 71
Annexure, Questionnaire
Page72 81
Bibliography
Page83
CHAPTER - 1
INTRODUCTION
CONCEPT & DEFINITION
The term FMCG (fast moving consumer goods), although popular and frequently used does not have a standard definition and is generally used in India to refer to products of everyday use. Conceptually, however, the term refers to relatively fast moving items that are used directly by the consumer. Thus, a significant gap exists between the general use and the conceptual meaning of the One of the factors on which the turnaround depends is the purchase cycle. However, the purchase cycle for the same product tend to vary across population segments. Many low-income households are forced to buy certain products more frequently because of lack of liquidity and storage space while relatively highincome 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.
Individual items are of small value. But all FMCG products put together account for a significant part of the consumer's budget. The consumer spends little time on the purchase decision. Rarely does he/she look for technical specifications (in contrast to industrial goods). Brand loyalties or recommendations of reliable retailer/dealer drive purchase decisions. Trial of a new product i.e. brand switching is often induced by heavy advertisement, recommendation of the retailer or neighbours/friends.
Sampling Detail
1. Target population: residence of Kalyan. 2. Sampling unit: In this study the sampling unit is individual consumer. The population for this research study consists of the
CHAPTER - 2
Hindustan Unilever Ltd.: It is a leading name in India in producing personal and healthcare products. The company was awarded the Golden Super Star Trading Company status from the Government of India.
Dabur India Ltd.: Dabur India produces a variety of healthcare products and enjoys a turnover of approximately INR 1899 crores.
Indian Tobacco Company: ITC is in existence since 1910 and has diversified its business in producing a variety of consumer goods. The company is known for ensuring the highest level of employee satisfaction.
Nestle India: It started its journey in 1912 as an Anglo-Swiss collaboration for condensed milk export. It produces a variety of dairy products of international standard.
Amul: This is the first co-operative milk marketing initiative in India. Currently, it is the market leader in producing milk, butter, cheese, ghee, chocolates, ice cream and other dairy items.
Cadbury India: Cadbury is synonymous with chocolates in India. But apart from chocolates, the company also manufactures other food and health drink products like Bourn-vita.
Procter & Gamble Hygiene and Health Care: The product range of P&G comprises personal care products, pet foods and variety of domestic cleaners.
Britannia Industries: Britannia is known for manufacturing varieties of biscuits, cookies and also milk, cheese, butter, ghee etc and enjoys all India market.
Colgate Palmolive: It is a trusted name in India for personal care, home care, pet care and oral care products. Colgate is named as Indias Most Trusted Brand in 2011 in the survey conducted by Nielson.
CHAPTER - 3
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. E.g. Krack Jack offers 30% Price-off. 3. Freebies: Freebies are a popular form of modern marketing and are some of the best things about the internet. The definition of freebies is products or services given away for free at no cost to the consumer. Well thats the definition we came up with. I am a bargain freebie shopper, pretty much going for any free
product and informing everyone about it. At different times, big and small companies often give away prizes and money which is too good to be true. Often its in the pursuit of more customers or a larger fan base and it often works.
4. Scratch Cards
A scratch card (also called a scratch off, scratch ticket, scratcher, scratchie, scratch-it, scratch game, scratch-and-win or instant game) is a small token, usually made of cardboard, where one or more areas contain concealed information: they are covered by a substance that cannot be seen through, but can be scratched off.
5. Bundling Offers Product bundling is a marketing strategy that involves offering several products for sale as one combined product. This strategy is very common in the software business (for example: bundle a word processor, a spreadsheet, and a database into a single office suite), in the cable television industry (for example, basic cable in the United States generally offers many channels at one price), .*******************
CHAPTER - 4
CONCEPT
Sales promotions are specific efforts that are designed to have an immediate
impact on sales. It refers to many kinds of incentives and techniques directed towards consumers and traders with the intention to produce immediate or short-term sales effects. For example, buy one get on free, introductory offers etc. There are three types of sales promotion strategies:
Push Strategy:
A push sales promotion strategy involves pushing distributors and retailers to sell your products and services to the consumer by offering various kinds of promotions and personal selling efforts. What happens here is that a company promotes their product/services to a reseller who in turn promotes it to another reseller or to the consumer. The basic objective of this strategy is to persuade retailers, wholesalers and distributors to carry your brand, give it shelf space, promote it by advertising, and ultimately push it forward to the consumer. Typical push sales promotion strategies include; buy-back guarantees, free trials, contests, discounts ,and specialty advertising items.
Pull Strategy:
A pull sales promotion strategy focuses more on the consumer instead of the reseller or distributor. This strategy involves getting the consumer to pull or purchase the product/services directly from the company itself. This strategy targets its marketing efforts directly on the consumers with the hope that it will stimulate interest and demand for the product. This pull strategy is often used when distributors are reluctant to carry or distribute a product. Typical pull sales promotion strategies include; samples, coupons, cash refunds or rebates, loyalty programs and rewards, contests, sweepstakes, games, and point-of-purchase displays.
CHAPTER - 5
Weaknesses:
Low export levels. Small-scale sector reservations limit ability to invest in technology and achieve economies of scale. Several "me-too products.
Opportunities:
Large domestic markets. Export potential.
Increasing income levels will result in faster revenue growth.. Untapped rural market High consumer goods speding
Threats:
Removal of import restrictions resulting in replacing of domestic brands. Tax and regulatory structures. Slowdown in rural demand.
CHAPTER - 6
Respondents 41 3 14 8 34
Bathing soaps
50 40 30 20 10 0 Respondents Lux 41 Hamam 3 Lifebuoy 14 Nima 8 Others 34
Interpretation: The above question has been formed to know the soaps and detergents at the top of the mind of the customers. It shows those consumers purchase and use of that particular brand. It will help to the company to know the market scenario and the major brands in the market. Form the above result it is clear that out of 100 customers more than 40 are consumers are having the same brand as the image in their mind, whereas others category is also showing the higher graph than these 3 major players(Hamam, Lifebuoy, Nima). Detergent powder Nirma supper Wheel Surf Ariel Others
Respondents 19 14 35 18 14
Detergent Powder
40 35 30 25 20 15 10 5 0 Respondents Nirma sup 19 Wheel 14 Surf 35 Ariel 18 Othres 14
Interpretation: Form the above result it is clear that out of 100 customers 35 are purchasing the same brand of detergent, whereas all others are on same level. Q2. Do you always buy the same brand of Soap / Detergent?
Particulars Yes No
Respondents 56 44
Brand loyal
60 50 40 30 20 10 0 Respondents Yes 56 No 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 detergent/soap. FMCG are such a market where the level of loyalty remains low and this is because of many reasons. Q3. Which factors do you normally consider while purchasing a particular brand of Soap / Detergents?
Bathing soap 19 33 16 23
Det.powder 18 36 13 19
Packaging Others
6 3
11 3
Price 23 19
Packaging 6 11
Others 3 3
Interpretation: The objective behind this question is to know the effect of influencing factors in the purchase decision of the soaps and detergent powders. It mainly contains the factors like, quality which players an important role in the purchase decision of the soaps and detergents both. If we look at the graph of the soaps and detergent it shows quality as the most influencing factors in the purchase decision while price is also an important for purchase decision. their new products in the market with which schemes.
Respondents 24 27 49
60 50 40 30 20 10 0 Respond
1-5 Years 24
5-10 Years 27
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..
Q 2. Name the Soap / Detergent (Company) you stock for. Companies Nirma HUL P&G Godrej Others Respondents 96 100 90 94 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 and detergent.
Q3. Rank the following factors that customers look for in the purchase of Soap / Detergent. (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 Other 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 to the consumers and also the weight age of that factor over other factors. In the above result people are more quality and price oriented. On the other hand people are also conscious about the company image because sometimes the consumer remembers that name of the product by the company name and also from the past performance of that company. Fragrance and packaging are not influencing factor as per the respondents.
Factors
Fragrance
11
17
41
21
Quality
43
34
16
Company Image
13
16
27
26
11
Price
27
28
14
16
Packaging
33
43
11
Others
32
63
Detergent
70 60 50 40 30 20 10 0 Fragrance Quality Company Image Price Packaging Others 1 11 43 13 27 6 0 2 17 34 16 28 5 0 3 41 16 27 14 2 0 4 21 6 26 9 33 5 5 7 1 11 6 43 32 6 3 0 7 16 11 63
Interpretation : It gives an idea about the priority the influencing factors to the consumers and also the weight age of that factor over other factors. In the above result people are more quality and price oriented. On the other hand people are also conscious about the company image because sometimes the consumer remembers that name of the product by the company name and also from the past performance of that company. Fragrance and packaging are also play important role for purchasing detergent powder.
CHAPTER 7
RECOMMENDATION
The findings of the empirical study indicate that unless the brand to be promoted is in the consideration set of the consumer, sales promotion by itself is unlikely to have any major impact. Clearly this shows that managers need to invest into brand building exercise so that his/her brand appears in the consideration set of the target consumers. Only after this should he spend time, money and energy on sales promotion activities. Companies need to create sufficient awareness about sales promotion schemes through mass media in order to create awareness. FMCG products are low involvement products characterized by switching behaviour. Also the person going to the shop for the purchase of soap is the final decision maker of the brand. Hence it is essential that companies need to design attractive, striking, visible POPs for scheme announcements.With respect to nature of scheme, the finding suggested that premium (free gift) was popular with companies. While both retailers and consumers preferred price offs. So it is necessary that the perceived value of a free gift has to be appealing and high for the target consumers. The findings exhibited that both the retailers and consumers perceived that sales promotion activities.Developing a system to tap such responses from time to time both at retailer and consumer level would be helpful for planning future sales promotion activities. In order to build trust and commitment companies should tap preferences, perceptions of retailers as well as consumer.
CONCLUSION
The study reflects that the use of sales promotion undeniably has increased over the years in India. Future holds lot of promise for such schemes across wider range of product-markets. Sales Promotion has ceased to be major differentiator at least in the metros, with almost all companies offering similar freebies and gifts.. Currently Price off and buy one get one free offers are very effective to attract the consumers towards the products. With the Increasing number of supermarket, the branded packaged goods work as silent sales person. So in such stores, sales promotion plays a more effective role in stimulating consumers demands. One of the very important facts we came to know from this project is that sale of goods which contain large quantity and having big packaging e.g. detergent are stagnating because consumer prefer to buy small pack goods, the reasons are: small pack goods reduce risk of bad quality, It had low cost or say price, and last but important factor i.e. mentality to purchase just to try first. Sales of small pack goods are quite high, but from the companys point of view small pack goods is less profitable compare to large pack goods. So here marketer tries to increase sales of large pack goods by using sales promotion tactics like price off and percentage extra. ******************
CHAPTER 8
ANNEXURE
QUESTIONNAIRE FOR CUSTOMER
I am student of M.com (Semester III) studying in SMT. CHM COLLEGE, ULHASNAGAR and carrying out a survey for our academic project to Role of sales promotions in FMCG. So please fill this questionnaire. Your identity would reveale and information will only be used for academic purpose. Q1. Which brand of Soap / Detergent do you use? Bathing soaps Lux Hamam Lifebuoy Nirma Others Respondent
Respondent
Q2. Do you always buy the same brand of Soap / Detergent Particulars Respondent Yes/No
Q3. Which factors do you normally consider while purchasing a particular brand of Soap / Detergents? Factors Fragrance Quality Company image Price Packaging Others Bathing soap Det.powder
Q4. Do you consider promotional schemes while purchasing a particular brand of Soap / Detergent? Particulars Yes No Respondent
Q5. Which of the following promotional schemes you have come across so far? Promotional schemes Coupons price off Respondent
I am student of M.com. (Semester III) studying in SMT. CHM COLLEGE, ULHASNAGAR and carrying out a survey for our academic project to Role of sales promotions in FMCG. So please fill this questionnaire. Your identity would not be revealed and information will only be used for academic purpose. Q1. Since how long are you in this business?
Respondent
Respondent
Q3. Rank the following factors that customers look for in the purchase of Soap / Detergent. (Rank from 1 to 6) Factors Fragrance Quality Company Image Price Packaging Others 1 2 3 4 5 6
Q4. Do you suggest customers to purchase a certain brand? Particular Respondent Yes No
Q5. If Yes why? Particular High margin Quality Relationship No reason Respondent
BIBLIOGRAPHY
BIBLIOGRAPHY 1) Reference Books
Marketing Management by Philip Kotler, Parling Kindersley (India) pvt ltd. I. Industrial Marketing by C.S.G. Krishnamachatyula and Lalitha R., Jaico Publishing
2) Journal
Special Issue on Customer Equity Management
3) Magazines
Business Today
4) News Papers
The Times of India DNA
5) Web Sites
www. wikipedia. Com www.nirma.co.in_files www.godrej_files