1
A RESEARCH REPORT
ON “Impact of sales promotion on consumers, Retailers & Wholesalers-with special reference to Sunsilk shampoo At Bhilai region” Submitted in partial fulfillment for the award of degree of
MASTER OF BUSINESS ADMINISTRATION OF SWAMI VIVEKANAND TECHNICAL UNIVERSITY , DURG (C.G)
SESSION : 2006-2008 Submitted by
SUSHMITA YADAV MBA II Semester, 2007
Approved by Dr. PRATAP .B. DESHMUKH
DEPARTMENT OF MANAGEMENT BHILAI INSTITUTE OF TECHNOLOGY (AN ISO 9002 Certified Institute) Bhilai House, G.E.Road, Durg-491001 (C.G.), India
2
Abstract Unde ndersta rstan ndin ding
percep rcepti tio ons
of
cha channel
memb membe ers
and
consumers regarding sales promotion activities enhances the effectiveness of these activities. Widespread usage of sales promotion activities in Fast Moving Consumer Goods (FMCG) sect sector or make makes s it impe impera rati tive ve that that manu manufa fact ctur urer ers s take take into into account channel member and consumer perceptions before plann planning ing such such progra programme mmes. s. In this this paper, paper, an attemp attemptt has has been made to examine the nature of sales promotion activities in Sunsilk Shampoo category in Bhilai City, study retailers & wholesalers and wholesaler perceptions with respect to these activities and also get an insight into consumer perceptions of these activities. Our findings indicate that with respect to the nature of the schemes, premiums (free gifts) were found to be the most frequently used in both premium and popular Sunsilk Shampoo category, followed by price offs.
3
DECLARATION
SUSHMITA TA YADAV YADAV studen M.B.A. IInd Semester in I SUSHMI studentt of M.B.A. DEPA DEPART RTME MENT NT
OF
MANA MANAGE GEME MENT NT,
Bhil Bhilai ai
Inst Instit itut ute e
of
Technology, Durg (C.G.) Here By declare that the research “The Impa Impact ct of sale sales s pr prom omot otio ion n on repo report rt work work entit entitled led “The Consumers, retailers & wholesalers-with special reference to sun silk shampoo at Bhilai Region” is the record of original
work work done done by me and and the the matt matter er encl enclos osed ed has has not not been been submitted for the award of any other degree of diploma in the university or any where.
DATE: PLACE:
SUSHMITA YADAV (M.B.A. II nd SEMESTER)
4
DEPARTMENT OF MANAGEMENT BHILAI INSTITUTE OF TECHNOLOGY (An ISO 9002 Certified Institute) Bhilai House, G.E. Road, Durg-491001 (C.G.), India
CERTIFICATE This is to certify that the research report entitled “IM “IMPACT PACT
OF
SALE SALES S
PROM PROMOT OTIO ION N
ON
CONS CONSUM UMER ERS, S,
RETAILERS & WHOLESALERS-WITH SPECIAL REFERENCE TO SUNSILK SHAMPOO AT BHILAI REGION” Carried out by SUSH SUSHMI MITA TA YADAV YADAV of, M.B. M.B.A. A. II SEM SEM 2007 2007
is submi submitt tted ed
towards partial fulfillment of the requirements for the award degree of M.B.A. 2006-2008. DATE: PLACE: Approved by
Dr.P.B.DESHMUKH [B.E. (MECH), M.B.A., M.E., Ph.d]
H.O.D & Addl. Director
5
ACKNOWLEDGEMENT In the beginning I would like to express my immense pleasure in subm submit itti ting ng this this rese resear arch ch repo report rt to Bhil Bhilai ai Inst Instit itut ute e of Technology. Technology. I wish to express my Gratitude to
Dr.
P.B Deshmukh (Addl. Director & HOD, Deptt. of Management) Who has been kind enough to approve my research report.
I must must ackn acknow owle ledg dge e my gr grat atit itud ude e to my Rese Resear arch ch Guid Guide e Mr. S. Pand Pandey ey (Lectu (Lecture rer. r. Manag Manageme ement) nt) for her her guidan guidance ce in understanding the important ingredients of my study.
I shall be failing in my duties if in the end; I do not acknowledge my debt of gratitude to all those who have been helping me from time to time by their in valuable suggestions and constructive comments.
{SUSHMITA YADAV}
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CONTENTS S.No. 01.
Description
Page No.
INTRODUCTION OF THE TOPIC
2-17
a) INTR INTROD ODUC UCTI TION ON
WHAT IS SALES PROMOTION IMPORTANCE & GROWTH OF SALES PROMOTION IN TODAYS MARKETS COMPANY PROFILE
b) PROB PROBLE LEM M STAT STATEM EMEN ENT T c) RESE RESEAR ARCH CH OBJE OBJECT CTIV IVE E
02.
LITERATURE SURVEY
19-22
03.
RESEARCH METHODOLOGY
24-31
a) RESE RESEAR ARCH CH METHO METHODO DOLO LOGY GY
MEANING
PURPOSE OF THE STUDY
POPULATION
SAMPLE
QUESTIONNAIRE
TOOLS & TECHNIQUE OF DATA COLLECTION
b) METH METHOD ODOL OLOG OGY Y
MARGIN PRICE (OUTLAY) RATIO WITH FORMULA
c) AMOU AMOUNT NT SPENT SPENT ON SALE SALES S PROM PROMOT OTIO ION N & COMPARISONS WITH OTHER ACTIVITIES
Contd…..2….
7
:: 2 ::
S.No.
Description
Page No.
FINDINGS & ANALYSIS
04.
a) FINDINGS IMPORTANCE OF SALES PROMOTION
b) ANALYS ANALYSIS IS & INTER INTERPRE PRETAT TATION ION OF OF DATA DATA c) PERC PERCEP EPT TIONS IONS
STUDY ON WHOLESALERS PERCEPTIONS •
Variations In Information Flow
•
Retailers & Wholesalers Dynamics
•
Margins
•
Perceptions about mass media announcements
STUDY ON RETAILERS PERCEPTIONS • • • •
• • •
•
Perceptions on Scheme preference. Perceptions about buying Roles Perception about their role in decision-making Perception about response to sales promotion offers. Margins Problem of left over Perceptions about mass media announcements. Handling problems.
SUB STUDY ON CONSUMER PERCEPTIONS • • • • •
Willingness to buy on Sales Promotion offer. Ability to induce trial Long term Impact Perceived Quality Perceptions regarding underlying company motivations.
d) LIMI LIMITA TATI TION ONS S
33-47
8
:: 3 ::
S.No. 05. 05.
Description
Page No.
CON CONCLUS CLUSIO ION N WITH WITH SUGGE UGGEST STIO ION NS
CONCLUSION
SUGGESTIONS •
Rebates
•
Discounts
•
Refunds or Rebates
•
Premiums or Gifts
•
Quantity Deals
•
Sampling
•
Contests
•
Free in mail premiums.
•
Container premium.
49-51
REFERENCE
52
BIBLIOGRAPHY
53
ANNEXURE
55-58
Questi Questionn onnair aire e (Consu (Consumer mer-For -For Female Female Group). Questionnaire Wholesalers).
(Retailers
&
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LIST OF FIGURES S.No. 01. 01.
Description
Page No.
ANAL ANALYS YSIS IS & INT INTER ERPR PRET ETAT ATIO ION N OF OF DAT DATA A OF
35
COST PRICE FOR RETAILER & WHOL WHOLE ESALER LER FOR FOR SAC SACHETTE TTE SUNSILK ILK SHAMPOO. (FIGURE-2)
36
COST PRICE FOR RETAILER & WHOL WHOLES ESAL ALER ER FOR FOR BOTT BOTTLE LES S IN SUNS SUNSIL ILK K SHAMPOO (FIGURE –3)
37
MARGIN PRICE RATIO FOR RETAILERS & WHOL WHOLES ESAL ALER ERS S IN SACH SACHET ETTE TE OF SUNS SUNSIL ILK K SHAMPOO. (FIGURE-4)
38
MARGIN PRICE RATIO FOR RETAILERS & WHOL WHOLE ESALER LERS IN BOT BOTTLE OF SUNSILK ILK SHAMPOO. (FIGURE –5)
39
IMPACT OF ADVERTISEMENT ON DIFF DIFFER EREN ENT T AGE AGE GROU GROUPS PS OF CONS CONSUM UMER ERS S (FIGURE-6)
40
PERCENTAGE CONSUMPTION SUNSILK SHAMPOO (FIGURE – 1)
10
LIST OF TABLES S.No. 01. 01.
Description
Page No.
ANAL ANALYS YSIS IS & INT INTER ERPR PRET ETAT ATIO ION N OF OF DAT DATA A PERC PERCENT ENTAGE AGE OF CONSUM CONSUMER ERS S USIN USING G SUNSILK SHAMPOO (TABLE NO. 1)
35
COST COST PRIC PRICE E FOR FOR WHOL WHOLES ESAL ALER ER FOR FOR SUNSILK SHAMPOO (TABLE NO. 2)
36
COST PRICE FOR RETAILER SUNSILK SHAMPOO (TABLE NO. 3)
FOR
36
MARGIN PRICE RATIO FOR WHOLESALER IN SUNSILK SHAMPOO (TABLE NO. 4)
37
MARGIN PRICE RATIO FOR RETAILER IN SUNSILK SHAMPOO (TABLE NO. 5)
38
IMPACT OF ADVERTISEMENT ON DIF DIFFER FERENT AGE AGE GRO GROUP OF CONSU NSUMER (TABLE NO. 6)
39
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12
A)
Introduction:
The importance of consumer sales promotion in the marketing mix of the fast moving consumer goods (FMCG) category throughout the world has increased. Companies spend considerable time in planning such activit activities ies.. In order order to enha enhance nce the effect effective ivenes ness s of these these activi activitie ties, s, manufac manufacture turers rs should should underst understand and consume consumer, r, retailers retailers & wholesal wholesalers ers interpretations interpretations of their promotional promotional activities. Retailers & wholesalers perceived price offs to have relatively greater impact compared to any other forms forms of sales promotion. promotion. In line with the the retailers & wholesalers wholesalers perceptions, the findings of consumer perceptions indicated that price offs offs was the most prefe preferre rred d type type of sales sales promot promotion ion.. Retaile Retailers rs
&
wholesalers stated that role of word of mouth and television advertising was very important in providing information inputs to the consumers regard regarding ing sales promot promotion ion activiti activities. es. This perce percept ption ion of retai retailer lers s
&
wholesalers was supported by the consumer unaided recall of sales promotion schemes which were widely advertised. As the retailer & whole wholesal saler er intera interacts cts and and obser observes ves consum consumers ers more more frequ frequent ently ly and and closely than the manufacturer, it would be useful for the companies to incorporate perceptions while planning sales promotion strategies.
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A stud study y of thes these e perc percep epti tion ons s will will reve reveal al thei theirr pref prefer eren ence ces, s, thei their r knowledge knowledge,, and motivati motivations. ons. The study study here pertains pertains to consume consumers rs perceptions as well as retailer & wholesaler perceptions regarding sales promotion. Some past researches have suggested that promotion itself has an effect on the perceived value of the brand (Cotton and Bobb 1978, Dodson, Tybout and Sternthal, 1978, Guadagni and Little 1983, Jones and Zufryden 1980, Rothschild and Gaidis 1981, Shoemaker and Shoaf Shoaf 1977). 1977). This is because because promoti promotions ons provide provide utilitaria utilitarian n benefits benefits such such as monet onetar ary y savi saving ngs, s, adde added d valu value, e, incr increa ease sed d qual qualit ity y and and conv conven enie ienc nce e as well well as hedo hedoni nic c bene benefi fits ts such such as ente entert rtai ainm nmen ent, t, explor explorati ation on and self-e self-expr xpress ession ion (Chan (Chandon don,, Laure Laurent, nt, and and Waen Waensin sink k 1997).
In Bhila Bhilaii City City fast fast movi moving ng cons consum umer er good goods s (FMC (FMCG) G) cate catego gory ry has has witn witnes esse sed d an outb outbur urst st of sale sales s prom promot otio ion n acti activi viti ties es in the the post post-liberalization era. Very little literature has focused on sales promotion perceptions. This study is an attempt to address the gap in literature by providing providing empirical empirical support support through through explorat exploration. ion. In the U.S. context several aspects of consumer perceptions of deal frequency and deal prices have been studied (Aradhna Krishna, Imran S. Curriuun and Robe Robert rt W. Shoe Shoema make kerr 1991 1991). ). Wher Wherea eas s Page Page More Moreau au,, Arad Aradha hana na Krishna, Bari Harlam (2001) studied differing perceptions with respect
14
to price promotion from the point of manufacturers, retailer & wholesaler and and cons consum umer ers. s. Effe Effect cts s of prom promot otio ions ns on vari variet ety y seek seekin ing g and and reinforce reinforcement ment behaviour behaviour has also been studied. studied. (Barbara Khan and Jagmohan Raju 1991).
All the above researches have focussed on price promotions and their response. Our study though exploratory has considered perceptions for price as well as non-price promotions in Sunsilk Shampoo category. The reasons for the study were: i)
The The wide widespr spread ead use of sale sales s prom promot otion ions s in Sunsil Sunsilk k Sham Shampoo poo category.
ii)
Historicall Historically, y, whenever whenever there there was a downwa downward rd trend trend in growth, growth, sales promotion activities took the front seat of promotional mix.
iii)
Comp Compan anies ies plann planned ed these these activit activities ies with with inward inward looking looking view view henc hence e it was was felt felt that that it woul would d be usef useful ul to unde unders rsta tand nd the the perce percepti ption ons s of consumer consumers, s, retail retailers ers
& wholes wholesale alers rs regard regarding ing
sales promotion activities to improve the effectiveness of these activities.
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01. What is Sales Sales Promoti Promotion on ? 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 desig designed ned to stimu stimulat late e quick quicker er and/o and/orr greate greaterr purch purchase ase of partic particula ular r products/services products/services by consumers consumers or the trade.”
Roge Rogerr Stra Strang ng has has give given n a more more sim simplis plisti tic c defi defini niti tion on i.e. i.e. “sal “sales es promotions promotions are short-term incentives to encourage purchase or sales of a product or service.”
Hence, any forms of incentives i ncentives (price cut or value added nature) offered for short period either to trade or consumers are considered as sales promotion activities.
1.1 Deale Dealers rs and and Reta Retaile ilers rs Most of producers do not sell their goods directly to the final users; between them stands a set of intermediaries performing a variety of funct function ions. s. These These marke marketin ting g interm intermed ediar iaries ies consti constitu tute te a marke marketin ting g chann channel. el. Forma Formally lly marke marketin ting g chann channels els are sets sets of inter interdep depend endent ent organization involved in the process of making a product or services
16
available for use or consumption. They are the pathway a product or services follows after production, culminating in purchase and use by the final end user.
In FMCG FMCG Prod Produc ucts ts gene genera rally lly ther there e are are two two chan channe nell memb member ers s or intermediaries intermediaries i.e. Dealers and Retailers.
A marketing channel system is the particular set of marketing channels employed by a firm. One of the chief roles of marketing channels is to convert potential buyers into profitable orders. Marketing channels must not only serve the markets, they must also make markets.
The The chan channe nels ls chos chosen en affe affect ct all all othe otherr marke arketi ting ng deci decisi sion ons. s. The The company’s pricing depends on whether it uses mass merchandisers or high-quality boutiques. The firm’s sales force and advertising decisions depends on how much training and motivation dealer boutiques need.
If the firm is successful, it might branch into new markets and use diffe differen rentt chann channels els in diffe differen rentt marke markets. ts. In small smaller er marke markets, ts, the the firm firm might sell directly to retailers; in larger markets, it might sell through distributors. In rural areas, it might work with general-goods merchants; in urban areas, with limited-line merchants.
17
a) Channel Levels: -
Suns Sunsilk ilk sham shampo poo o pref prefer er oneone-le leve vell and and twotwo-le leve vell chan channe nell for for the the distri distribu butio tion n of its produ products cts.. One-le One-level vel channe channell conta contains ins one one sellin selling g inte interm rmed edia iari ries es such such as Reta Retaililer er.. TwoTwo-le leve vell chan channe nell cont contai ains ns two two intermediaries intermediaries i.e. Dealers→Retailers.
b) Dealer :–
“A person whose business is buying and selling a particular product” (Oxford Advanced Learner’ Dictionary, 7.1).
c) Retailer :–
“A person or business that sells goods to the public” (Oxford Advanced Learner’ Dictionary, 7.1). “A retailer or retail store is any business enterprise whose sales volume comes primarily from retailing. Any organiza ization selling ing to final consumer – whether it is a manu manufa fact ctur urer er,, whol wholes esal aler er,, or reta retaile ilerr- is doin doing g reta retaililin ing. g. Reta Retaili iling ng includes all the activities involved in selling goods or services directly to final consumers for personal, non-business use.
18
1.2 Cust Custome omers rs The distinguishing character of Sales promotion is that is that they draw stro strong nger er and and quic quicke kerr resp respon onse se from from the the targ target et audi audien ence ce..
Sale Sales s
promotion includes tools for consumer promotion (samples, coupons, cash refund offers, prices off, premiums, prizes, patronage rewards, free trials, trials, warrant warranties, ies, tie-in tie-in promotion promotions, s, cross-pro cross-promoti motions, ons, point-ofpoint-ofpurchase, displays displays and demonstrat demonstrations. ions. Sales promotion promotion tools vary vary in their specific objectives. objectives. A free sample sample stimulates consumer consumer trial.
Sellers use incentive-type promotions to attract new triers, to reward loyal customers and to increase the repurchase rates of occasional user users. s.
Sale Sales s prom promot otio ions ns ofte often n attr attrac actt bran brand d swit switch cher ers, s, who who are are
prim primar arily ily look lookin ing g for for low low pric price, e, good good valu value, e, or prem premiu iums ms..
Sale Sales s
promotions generally are unlikely to turn them into loyal users, although they they may be induced induced to make some subseq subseque uent nt purchas purchases. es. Sales Sales promotions used in markets of high brand similarity can produce a high sales response in the short run but little permanent gain in market share. In markets markets of high brand brand dissimilarity, sales promotions promotions may be able to alter market market shares permanently. permanently. In addition to brand brand switching, consumers may engage in stockpiling – purchasing earlier than usual
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(purchase acceleration) acceleration) or or purchasing extra quantities. quantities. But sales may may then hit a post-promotion post-promotion dip. A
number
of
sales
promotion
benefits
flow
to
consumers.
Manufacturers induce consumers to try new products instead of never straying straying from current current ones. ones. They They lead to more varied varied retail formats, formats, such as the everyday-l everyday-low-p ow-price rice store store and promotion promotional-pr al-pricing icing store. store. Retailers promote promote greater greater consumer consumer awareness awareness of prices. Consumers Consumers themselves enjoy some satisfaction from being smart shoppers when they take advantage advantage of of price specials. Service marketers marketers also employ employ sales promotions promotions to achieve achieve marketing marketing objectives. objectives. Some service firms use promotions to attract new customers and establish loyalty. Selecting consumer promotion Tools :-
The promotion planner should take into account the type of market, sales sales prom promoti otion on objec objectiv tives, es, compe competit titive ive condit condition ions, s, and each each tool’s tool’s cost cost-e -eff ffec ecti tive vene ness ss..
We can can
dist distin ingu guis ish h
betw betwee een n
manu manufa fact ctur urer er
promotion promotions s and retailer retailer promotion promotions. s. The former former are illustrated illustrated by the auto industry’s frequent use of rebates, gifts to motivate test-drives and purchases, and and high-value trade-in trade-in credit. The latter include include price cuts, feature advertising, retailer coupons and retailer contests or premiums.
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02.
Importance & Growth of Sales Promotion in todays markets.
Those promotions are directed at channel members like distributors, wholesalers, retailers who play critical role in moving the products f the marketer marketers s to the final custome customers. rs. If anyone anyone doubts the importan importance ce or prevalence of sales promotion today, they need only pop to their local supermarket or pub, take a look in a national or local newspaper, or open the direct mail sent to their home or business address and they will instantly be given irrefutable proof of the volume and diversity of sales promotion activity in today’s markets.
An American marketing academic, Philip Kotler, estimated that even as short a time ago as 10 years the ratio of advertising expenditure to sales promotion spending was roughly 60:40.
(1)
By 1997, the ratio had had alte ltered dramatically. ly.
Now, sales
promotion is spending something in the region of 65-70% of the total. In real terms, sales sales promotion expenditure expenditure has been been growin growing g rapidly rapidly over the past past 20 years. years. More More proof proof of the importance of the function and versatility of sales promotion is forthcoming in the oft-quoted Harris International Marketing Week Week surv survey ey,, whic which h show showed ed that that well well over over 70% 70% of the the
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population had participated in competitions or games relating to products or services. (2) (2)
Over Over a thir third d had had don done e so with within in the the last last mon month th,, over over 40% 40% had had sent off a packet top or token for a free gift within the last four weeks, and an amazing 54% had used a money-off coupon. Although this survey is dated 1986, there is little reason to suggest that participation in any form of sales promotion has in any way diminished, even though the style or some of the techn techniqu iques es emplo employed yed toda today y may may have have diffe differen rentt emph emphase ases s placed placed upon upon them. them. Inde Indeed, ed, if the the above above figure figures s are taken taken toget together her,, then then as many many as 60% 60% of the populat population ion activ actively ely participate in some form of promotional activity in any one month.
This makes sales promotion one of the biggest leisure activities or pastimes in the UK today. today. To put sales promotion promotion into even sharper sharper focus as to its importance, it is as extensive as visiting a pub once a month or more. more. From these comparisons, comparisons, one can therefore therefore gauge gauge the size and extent of promotional activity.
The FMCG industry had witnessed many innovative sales promotion promotion activities in the recent recent past. Numerous Numerous factors were responsible for
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such such a phenom phenomeno enon. n. One of the reason reasons s being being that that the market market being sluggish, companies were trying to increase market share in stag stagna nant nt to decli declini ning ng (vol (volum ume e term terms) s) mark market et in orde orderr to reta retain in consumers, to encourage switching, to induce trials and liquidate excessive excessive inventor inventories. ies. Another Another reason reason possible possible was that with the presence of so many brands the competition had increased severally leading to fight fight for market market share and shelf space. Inflationary trend trend had made made both the consume consumerr as well as trade deal prone. prone. Hence Hence sale sales s prom promot otion ion acti activi viti ties es in Sham Shampo poo o indu indust stry ry pose posed d a very very interesting study and consumer, retailer & wholesaler perceptions thereof.
03.
COMPANY PROFILE :-
Hindustan Lever Limited (HLL) drummed up a millennium resolution: to align its resources behind 30 of its strongest brands — the “power brands” — from a portfolio that consisted 100-odd brands. Sunsilk, the
Rs 160-plus crore shampoo shampoo brand, was was part of this this select list. Of late, slowin slowing g consum consumer er dema demand nd has led to dwind dwindlin ling g fortu fortune nes s for for most most FMCG companies. companies. HLL has been no exception. exception. Consider Sunsilk: Sunsilk: its current market share is a shade above 20 per cent in the Rs 850-crore branded shampoo market, but barely a year ago it was pegged at 22 per cent. After Clinic Plus (HLL’s biggest shampoo brand with a market
23
share of 28 per cent), Sunsilk played a significant role in shoring up fortunes for the company in the category.
Hindustan Lever Ltd (HLL) has introduced in the market a complete new range of Sunsilk shampoos focusing on `hair benefits'. The new variants of Sunsilk - Black Shine, Bouncy Volume, Silky Strength and Natural Nourishment - are based on well-researched consumer needs and hair types. types. Says Mr. Shiva Kumar, Kumar, Business Unit Unit head, Hair care, HLL, The new Sunsilk range aims to position Sunsilk as the `hair expert' that has identified the consumers' different hair needs and offers them a shampoo in line with the clear benefit that is desired.'' The new range has variants that are harmonised in terms of product mix -- fragrance, colou colourr and and ingred ingredien ients. ts. The The packa packagin ging g has has been been design designed ed to bring bring across the essence of mildness and fashion to the brand. Sunsilk Black Shine Shampoo consists of active sunflower extracts, there are lotus flower extracts in Sunsilk Silky Strength Shampoo, fruitamins in Sunsilk Bouncy Volume Shampoo and green tea extracts in Sunsilk Natural Nourishm Nourishment ent Shampoo Shampoo.. Sunsilk Sunsilk will be available available across the country country and is priced from Rs 75 for 200 ml to Rs 2 for the sachet pack. The company claims that the new Sunsilk shampoo provides hair which women desire instead of providing a shampoo for their existing hair type. For example, the new variants like “Bouncy Volume” promise
24
bounce bounce to limp hair. The agency agency has also created created a common identity identity “Baalon mein dhadkan, dhadkan, dil mein for the brand with a baseline of “Baalon shararat” with “Sunsilk in your hair, mischief in the air” playing a
part of the English print advertisements. Also the ‘S’-shaped strap-line which which vertically vertically flows through the extreme right corner of the print and television
campaign
for
both
the
shampoo
and
colourant
advertisements is another bond. A website called Tips4me.com, which claims to be building communities of users in high-involvement high-involvement categories such as beauty, fitness, finance, etc, etc, cond conduc ucte ted d an onli online ne poll poll for for sham shampo poo o bran brands ds in the the coun countr try, y, recently. Hindustan Lever Limited’s Sunsilk brand emerged as the most preferred preferred brand brand among among the people polled. polled.
Besides Besides Sunsilk, Sunsilk, brands brands
featured in the poll were Pantene, Clinic, Head & Shoulders, Halo and others. In the most preferred category, Head & Shoulder turned out to be number two.
Since then, Sunsilk has been at the forefront of HLL’s experiments with extensions, variants, pricing strategies, and large-scale advertising and promotional campaigns. As HLL chose to extract more out of its select few, it reinvented Sunsilk’s shampoo range and followed it up with the brand’s extension into hair colour. Significantly, India is the only market other other than Thailand Thailand where Sunsilk Sunsilk is sold as a hair colour. colour. Hindustan Hindustan
25
Lever Ltd (HLL) hopes to increase the growth of the Rs 40-crore hair colour market in India from the current 20 percent to 23 percent, with the launch launch of Sunsilk Sunsilk Pro-Colour Pro-Colour — its new hair colour colour product product.. The product is a brand extension of HLL’s leading shampoo brand Sunsilk. Sunsilk Pro-Colour is a range of seven hair colours specially suited for the dark Indian hair and skin tone. The launch is a bid to spur the hair colou colourr marke market. t. Hairs Hairstyl tylist ist Jawed Jawed Habib Habib is the brand brand amba ambassa ssador dor for Sunsilk Pro-Colour. Says Mr. Shiva Kumar: “The main challenge for us is to deliver a product that is safe, affordable and easy to use for the Indian consumer.”
Hindustan Lever Limited Background :-
Hind Hindus usta tan n leve leverr limi limite ted d (HLL (HLL)) is one one of Indi India’ a’s s olde oldest st and and most ost effic efficien iently tly run compani companies. es.
Their Their brands brands are the the stron stronge gest st in their
respective categories with over 2/3 of the Indian population using HLL products products everyd everyday. ay. HLL follows follows its its mission mission to “add vitality to life.” They strive to meet everyday needs of nutrition, hygiene, and personal care products that help people “feel good, look good, and get more out of life.”
In 1956 1956,th ,the e three three compa companie nies; s; Hindu Hindusta stan n Vanasp Vanaspati ati Manuf Manufact acturi uring ng Comp Compan any, y, Lever Lever Brothe Brotherr India India Limite Limited d and and United United Trader Traders s Limite Limited d
26
merged to form the company HLL, the first foreign subsidiary to offer a percentage of its equity equity to the Indian Indian public. Over the years, HLL have have partenered with or acquired the following companies :-
•
Brooke Bond
•
Lipton
•
Pond’s
•
Tata Oils Mills Company Company
•
Kimberly Clark Corporation
•
Kothari General Foods
•
Cadbury India
•
Lamke Limited (another Tata Company)
•
Kwality Icecream Group
•
Modern Foods
•
Cooked Shrimp and Pasteurized Crabmeat (Amalgam Group of Companies)
•
Pepsi
Today, HLL is India’s largest Fast Moving Consumer Consumer Goods (FMCG) Compan Company. y.
Their Their busine businesse sses s are compri comprised sed of over 20 distinct distinct
cate catego gori ries es in Home Home & Pers Person onal al Care Care Prod Produc ucts ts and and Food Foods s & Beverages.
27
B) Probl roble em St Statem tement ent : In todays world every Company is striving hard to maintain it’s position in the market. market. In my research I am trying to reflect the strategies which the company must take to enhance it’s sales volume and profit figure in case of Sunsilk Shampoo. Shampoo.
C)
Research Objective :
The main objectives of the study are: i)
To get get an an ins insig ight ht into into reta retaililer ers s & who whole lesa sale lers rs view views s reg regar ardi ding ng the schemes being offered in Sunsilk Shampoo category, and consumer perceptions.
ii) ii)
To stu study dy con consu sum mer per perce cept ptio ions ns reg regar ardi ding ng var vario ious us sch schem emes es in in this category and responses toward them.
iii) iii)
To get an insi insig ght into into the the pref refere erences ces of the con consum sumers of sales promotion schemes in the category.
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A) 1.
LITERATURE SURVEY promotion” was taken by the The details of the topic “Nature of promotion”
literature “Sales Management – Decisions, Strategies & Cases”, whose authors are Richard R. Still, Edward W. Cundiff & Norman A.P. Govoni. Nature of promotion - The marketing mix activities of product
planning, pricing and distribution are performed mainly within a busine sines ss or betwe tween a busin siness ess and the members ers of its its distribution channels. channels. However, through its promotional promotional activities a firm communicates communicates directly with potential potential customers. customers. And as we will will see, it is not a simple simple process process..
Basica Basically lly promo promotio tion n is an
attempt to influence. a)
Promotional Methods
There There are are five five forms forms of prom promoti otion ons s – Person Personal al sellin selling, g, advertising, sales promotion, public relations and publicity. b)
Personal Selling
It is the direct presentation of a product to a prospective customer by a representative of the organization selling it.
29
Personal selling takes place face to face or over the phone, and it may be directed to a middleman or a final consumer. c)
Advertising
It is impersonal mass communication that the sponsor has paid for for an in which the sponsor sponsor is clearly clearly identified. identified. The most familiar forms of ads are found in the broadcast (TV & Radio) and print (news papers & magazines) Media. d)
Sales Promotion
It is demand stimulating activity designed to supplement advertisin advertising g and facilitate facilitate personal personal selling. selling. It is paid for by the sponsor and frequently involves a temporary incentive to encou encourag rage e a purchas purchase. e. dire direct cted ed at consu consume mers rs..
Many Many Sales Sales promoti promotion ons s are The The majo majori rity ty,, howe howeve ver, r, are are
designed to encourage the company’s sales force or other members of its distribution channel to sell its products more aggr aggres essi sive vely ly..
This This latt latter er cate catego gory ry is call called ed Trade
promotion.
e)
Public Relations
It enco encomp mpas asse ses s a wide wide vari variet ety y of comm commun unic icat atio ion n effo effort rts s to contribut contribute e to general generally ly favourab favourable le attitudes attitudes and opinions opinions
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towar toward d an organi organizat zation ion and its produ products cts..
Unlike Unlike most most
adve advert rtis ising ing and and pers person onal al selli selling ng it does does not not incl includ ude e a specific specific sales sales message. message. The target targets s may be customer customers s stock holders, a government agency, or a special – interest group. group.
Public Public relatio relations ns can take take many forms, forms, includ including ing
news letters, annual reports, lobbying, and sponsorship of charitable or civic events.
2.
The details of the topic “The promotional budget” was taken by the litera literatur ture e “Fund “Fundam ament entals als of Market Marketing ing”” whose whose auth authors ors are William J. Stanton, Michael J. Etzel, & Bruce J. Walky. The Promotional Budget - Establishing promotional promotional Budgets Budgets is
extr extrem emel ely y chal challe leng ngin ing g beca becaus use e mana manage geme ment nt lack lacks s relia reliabl ble e stan standa dard rds s for for dete determ rmin inin ing g how how much much to spen spend d alto altoge geth ther er on advertising or personal selling, and how much of the total budget to allocate to each each promotional promotional mix element. A firm may have the the alternative of adding seven sales people or increasing its trade show show budg budget et by $200 $200,0 ,000 00 a year year,, but but it cann cannot ot dete determ rmin ine e precisely what increase in sales or profits to expect from either expenditure.
31 3.
“Conventional Wholesale – Retail Trade The details of the topic “Conventional continues to dominate the Scene” was taken by the literature
“Marketing Management – Planning, Implementation and control” whose whose auth authors ors are V.S. V.S. Ramasw Ramaswam amy y &
S.
Namakumari. Conv onventi ention ona al Who Wholes lesale Dominate the scene
–
Retai tail
Trad rade
conti ontinu nue es
to
In total contrast with the Western Countries, where for mats like super super marke markets/ ts/ret retail ail chains chains domin dominate ate the the distri distribu butio tion n syste system, m, conven conventio tiona nall wholes wholesale ale – retai retaill trade trade domin dominate ates s the the scene scene in India. Again, unlike the the west, where where a handful handful of apex distribution distribution chains service the millions of retail shops, in India, stand-alone wholesalers/retailers wholesalers/retailers dominate dominate the scene. Some experts experts believe that that befo before re long long,, Indi India a too too will will see see the the mass massiv ive e grow growth th of distributing companies, companies, retail retail chains. Many others, others, however, however, feel that in India, large distribution outfits will not replace traditional distributors in the near future.
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33
A)
RESEARC ARCH MET ETHO HOD DOLOGY OGY
1.
MEANING:-
The The proce process ss of devel develop oping ing the the objec objectiv tive e statem statemen ent, t, decid deciding ing modes of data collection and the means of analysis the date and the final presentation leading a logical interpretation is known as methodology.
In 1stchapter to the topic was introduced by the Introduction of Sales Promotions, What is Sales Promotion and also in respect of dealer, retailer and customer, Importance of Sales promotion and also also company company profile. profile. In 2nd chapter the Literature Survey of Study is given.
2.
PURPOSE OF THE STUDY
a) To Study Study the Impac Impactt Of Sales Sales Promo Promoti tion on on Reta Retaililer ers s and and Wholesalers in Bhilai Region. b) To study study the Impa Impact ct of Sale Sales s Prom Promot otio ion n on Consu Consume mers rs in Bhilai region.
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3.
POPULATION
Population is the total area, number of person or group of person, who are the subject of the study. To determine the population is the the firs firstt step step of any any rese resear arch ch,, it defi define nes s the the boun bounda dari ries es of research. To achieve the objectives of this study, the region of Bhilai was selected. 4.
SAMPLE
A sample is a finite number of units taken for purpose of study out of the
Universe. Universe. The sample sample is selected selected for the convenie convenient nt
stud study. y. For For this this opti optimu mum m Samp Sample le shou should ld be sele select cted ed samp sample le should represent whole Universe. It neither feasible nor desirable to go to each and everyone so sampling is done. The The samp sample le size size is 50 in all all the the thre three e case cases s of cons consum umer ers, s, retailers and wholesalers and the sample units are the people of Bhilai.
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5.
QUESTIONNAIRE
A questionnaire is a device for collection data from large, diverse and
widely widely scatter scattered ed group group of people. people. It It can be a most most usefu usefull
tool for gathering information from respondent. Keep Keepin ing g in mind mind the the obje object ctiv ive e of stud study y ques questi tion onna nair ire e are are prepared. 6.
TOOL TOOLS S AND AND TECH TECHNI NIQU QUE E OF OF DATA DATA COLL COLLEC ECTI TION ON
Data is collected by the help of questionnaire. It was collected in all the hours of the day. And for the analys lysis the data “PERCENTAGE METHOD” has been used.
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B) METHODOLOGY In order to address the above questions an exploratory study was conducted. The idea was to probe and get deeper insight into sales promotion scenario in Sunsilk Shampoo market and to tap tap perce percepti ption ons s of retail retailers ers & whole wholesal salers ers and and consum consumers ers.. In order to address above mentioned objectives :(i) (i)
Stud Study y of of sec secon onda dary ry sou sourc rces es was was carr carrie ied d out out..
(ii) (ii)
In-d In-dep epth th inte interv rvie iew w of 50 50 reta retaile ilers rs was was unde undert rtak aken en
(iii) (iii)
In dep depth th Inte Intervi rview ew of of 50 Wholes Wholesale alers rs was was und undert ertake aken. n.
(iv) (iv)
In dep depth th Inte Intervi rview ew of of 50 Con Consum sumers ers was was unde underta rtaken ken..
(v) (v)
Stru Struct ctur ured ed ques questi tion onna nair ire e was desig designe ned d to seek seek consu consume mer r responses.
(vi) (vi)
Stru Struct ctur ured ed quest questio ionn nnai aire re was desig designe ned d to seek seek reta retaile ilers rs responses.
(vii) Structured
questionnaire
was
designed
to
seek
Wholesalers responses. Convenience Convenience sampling was used used for both retailers retailers & wholesalers as well well as consum consumer er studie studies. s. 50 retail retailers ers rangi ranging ng from from small small
37
kirana store to supermarket supermarket were were approached. approached. All the retailers retailers & whol wholes esal aler ers s were were loca locate ted d in the the diff differ eren entt mark market ets s of Bhila Bhilaii Region. The respondents for consumer study were female group of the age group between 15-50 and above belonging to middle and upper middle and upper class. The total respondents were 50 in number. They were residing in different parts of Bhilai City hence sole decision-makers for this category. Also the age group of 15 to 25 being more experimental and likely to be more deal pron prone, e, so thei theirr perc percep epti tion ons, s, pref prefer eren ence ces s woul would d give give some some insights insights to compani companies es planning planning sales sales promoti promotions ons targette targetted d at them. In-depth interviews and questionnaires being filled by retailers & wholesaler and conducted the study with the help of interview guide. Inferences were drawn from that. In case of consumer study with the help of structured questionnaire, simple frequency analysis were carried out and inferences were drawn.
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Margin Price (Outlay) Ratio
The margin price ratio was calculated by taking the monetary value of the margin offered to the wholesaler and retailer and dividing it by the amount of money he needs to spent in order to purchase the product. The ratio varied from 0.03 to 0.025 among various various varietie varieties s (Table (Table - 4&5) . For Examp Example le in case case of of Rs. 1 and Rs. 2 Sachette the margin ratio was for wholesaler is 0.03 and 0.025 respectively and in case of retailer it is 0.07 and in case of bottle bottles s of Rs.10, Rs.10, Rs. 45, & Rs.75 Rs.75 the margin margin ratio ratio for whole saler is 0.021 in all type of bottles and in part of retailer it is 0.07. With this level of margin neither neither retailers will feel rewarded rewarded or get get attr attrac acte ted, d, nor nor the the whol wholes esal aler ers s will will be motiv otivat ated ed to purchase.
FORMULA ::
Margin Price Ratio =
Profit Margin . MRP of the FMCG product
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C) AMOU AMOUNT NT SPENT SPENT ON SALE SALES S PROM PROMOT OTIO ION N & COMPARISONS WITH OTHER ACTIVITIES. What does it all add up to in terms of money budgeted and spent? It is almost impossible to put a figure on the exact amount that businesses and other organizations spend because the task falls down when deciding on definitions of sales promotion and ways of measur measuring ing the physic physical al amounts amounts..
It is a relat relative ively ly simple simple
matter to discover how much has been spent on television and pres press s adve advert rtis ising ing and and it is feas feasib ible le to get get a fair fair esti estima mate te of spending spending on direct direct mail. Sales promo promotion tion,, however, however, does not lend itself to any easy way of estimating its annual expenditure, as it exte extend nds s to such such a wide wide varie variety ty of acti activi viti ties es..
Even Even the the
European promotional Marketing Association has tried to come up with a clearer picture, but the old problem still crops up – categoriz categorizatio ation. n.
Many Many promotions promotions use advertisin advertising, g, direct mail, mail,
telesales literature, price cuts (lost income or promotion cost?) or other media.
And what about pack alte lterations to
accommo accommodate date specia speciall deals?
Whose Whose budget budget do these these come
under? Once these points have been taken on board and understood, it becomes apparent that sales promotion is not one of the also-
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rans in terms of the business or the overall marketing program but one of the the most important important planks in the structure of of each. As has already been shown, it is also one of the most pervasive aspe aspect cts s of all our our lives. lives. And And it will will remai remain n so. The The pace pace of change is accelerating accelerating in most most areas of of our lives. We have only to look back even a few years to see what has happened with regard to the electronic media, the opening up of new markets with with new new or vast vastly ly impr improv oved ed prod produc ucts ts,, and and the the incr increa easi sing ng availability of services to wider audiences who can be reached more more rapidly rapidly than than ever. ever.
More More peop people le with more more disposab disposable le
inco income me and and aspi aspira rati tion ons s to matc match h will will mean mean more more,, not not less less,, promotional activity in the future as companies vie with each other to ensure that they get more than their fair share of that disposable expenditure. This means that every organization, whether trading for profit or “not “not for for prof profit it”” will will need need to stud study, y, unde unders rsta tand nd,, crea create te,, and and implement sales promotion in all its multifarious facets if they are to stay around, let alone succeed, in such a tough business environment. environment. What follows is a route map or or guide to help help those unfamiliar with the sales promotion terrain to devise the right type
41
of promotional activity and get the biggest bang from the drum for minimal effort.
42
43
A) Findings
:-
The findings of the empirical study indicate that unless the brand to be promoted is in the consideration set of the consumer, sales promotion by itself is unlikely to have any major impact. Clearly this this shows shows that that mana manager gers s need need to invest invest into into brand brand buildi building ng exercise so that his/her brand appears in the consideration set of the the targe targett consum consumers ers.. Only Only after after this this should should he spend spend time, time, money and energy on sales promotion activities. Sales promotion should not be used in isolation but need to be integrated with other tools and in line with the overall positioning of the brand. With respect to nature of scheme, the finding suggested that prem premium ium (free (free gift) gift) was was popu popular lar with with compa companie nies. s. While While both both retailer & wholesaler and consumers consumers preferred price offs. offs. So it is nece necess ssar ary y that that the the perc percei eive ved d valu value e of a free free gift gift has has to be appealing and and high for for the target target consumers. consumers. Repetitive use of the same premium for a prolonged period may have negative effect on the loyal customers. When the company is giving its own product free as premium, it needs to ensure the quality of the product from it as it is likely to jeopardize the image of both its products.
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The findings findings exhibite exhibited d that both the the retailer retailer & wholesaler wholesaler and consumers perceived that sales promotion activities carried out by the companies for increasing sales in short term and clearing excess stocks. What it implies is that companies need to use sales promotion synergistically and communicate so that they prov provid ide e valu value e to the the targ target et audi audien ence ce and and enha enhanc nce e bran brand d quality/image quality/image perceptions. perceptions.
Importance of Sales Promotion :-
Also the importance of the role of mass media came out clearly in both both the the stud studie ies. s. Com Compani panies es need need to crea create te suff suffic icie ient nt awareness about sales promotion schemes through mass media in order to create awareness The role of retailers & wholesalers in influencing consumer in brand choice decision in a Sunsilk Shampoo was found to be insignificant which also supports the above above obser observat vation ions. s. Sunsilk Sunsilk Shamp Shampoo oo are low involv involvem emen entt products characterised by switching behaviour. Also the person going to the shop for the purchase of soap is the final decision maker of the brand. Hence it is essential that companies need to design attractive, striking, visible POPs ( Point of purchases) for scheme announcements.
B) Anal Analys ysis is and and Int Inter erpr pret etat atio ion n of Data Data
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TABLE NO. – 1 Percentage of Consumers using Sunsilk shampoo.
Consumers using Sunsilk Shampoo
No. of Respondents
Percentage
YES
40
80
NO
10
20
TOTAL
50
100
20%
Yes No
80%
FIGURE – 1 PERCENTAGE CONSUMPTION OF SUNSILK SHAMPOO
INTERPRETATION :-
From the above table it is clear that % consumption of Sunsilk shampoo by majority of the respondents is maximum i.e. by 80% where as 20% of them are not consuming it.
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TABLE NO. – 2 COST PRICE FOR WHOLESALER FOR SUNSILK SHAMPOO. MRP Sachette
Cost Price for Wholesaler (Rs.)
Rs.1 Rs. 2
0.90 1.81
Bottles
Rs. 10 Rs. 45 Rs. 75
9.09 40.90 68.18
TABLE NO. – 3 COST PRICE FOR RETAILER FOR SUNSILK SHAMPOO. MRP Sachette
Cost Price for Retailer (Rs.)
Rs.1 Rs. 2
0.93 1.86
Bottles
Rs. 10 Rs. 45 Rs. 75
9.30 41.85 69.75 2
Cost price for retailers & wholesalers in Sachette.
1.5 Retailer
1
Wholesaler 0.5 0 0.5
1
1.5
2
M.R.P
FIGURE – 2 COST PRICE FOR RETAILER & WHOLESALER FOR SACHETTE IN SUNSILK SHAMPOO INTERPRETATION :-
From the above table it is clear that cost price for retailer & whol wholes esal aler er for for Sach Sachet ette te in Suns Sunsililk k Sham Shampo poo o by major ajorit ity y of the the respo responde ndents nts is in betwe between en 0.90P. 0.90P. to Rs.1.8 Rs.1.86 6 in differ different ent MRPs MRPs of Sachettes.
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70 60
Cost price for Cost price for retailers & wholeretailers & wholesalers in bottles. salers in bottles.
50 40 Retailer 30
Wholesaler
20 10 0 10
15
30
45
60
75
M.R.P M.R.P
FIGURE – 3 COST PRICE FOR RETAILER & WHOLESALER FOR BOTTLE IN SUNSILK SHAMPOO INTERPRETATION :-
From From the the abov above e tabl table e it is clea clearr that that cost cost pric price e for for Reta Retaililer er and and wholesaler for bottle in Sunsilk shampoo by majority of the respondents is in between from Rs.9.09 to Rs.69.75 in different MRPs of Bottles.
TABLE NO. – 4 MARGIN PRICE RATIO FOR WHOLESALER IN SUNSILK SHAMPOO
M.R.P. (Rs.)
Margin for Whoesaler (Rs.)
Margin Price Ratio
0.03 0.05
0.03 0.025
0.21 0.95 1.57
0.021 0.021 0.021
Sachette
1.00 2.00 Bottle
10.00 45.00 75.00
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TABLE NO. – 5 MARGIN PRICE RATIO FOR RETAILER IN SUNSILK SHAMPOO
M.R.P. (Rs.)
Margin for Retailer (Rs.)
Margin Price Ratio
0.07 0.14
0.07 0.07
0.7 3.15 5.25
0.07 0.07 0.07
Sachette
1.00 2.00 Bottle
10.00 45.00 75.00 0.08 0.07 0.06
Margin Price Ratio
0.05
Retailer
0.04 Wholesaler
0.03 0.02 0.01 0 0.5
1
1.5
2
M.R.P. OF Sachette
FIGURE – 4 MARGIN PRICE RATIO FOR RETAILERS & WHOLESALERS IN SACHETTE OF SUNSILK SHAMPOO
INTERPRETATION :-
From the above table it is clear that Margin Price ratio for Retailers and Whol Wholes esal aler ers s in Sach Sachet ette te of Suns Sunsililk k sham shampo poo o by majo majori rity ty of the the respondent lies between between 0.03 to 0.025 in different different rates of Sachette Sachette .
49
0.08 0.07 0.06
Margin Price Ratio
0.05
Retailer
0.04 Wholesaler
0.03 0.02 0.01 0 10
45
75
M.R.P. of Bottle
FIGURE – 5 MARGIN PRICE RATIO FOR RETAILERS & WHOLESALERS IN BOTTLE OF SUNSILK SHAMPOO
INTERPRETATION :-
From the above table it is clear that the margin price ratio for Retailers & Who Wholes lesale alers in bottle tle of Sun Sunsilk silk Sha Shampoos by major jority ity of Resp Respon onde dent nts, s, in case case of Reta Retaile ilers rs it is 0.07 0.07 and and 0.02 0.021 1 in case case of wholesalers in all rates of the bottles.
TABLE NO. – 6 IMPACT OF ADVERTISEMENT ON DIFFERENT AGE GROUP OF CONSUMER No. of Observer
Age group
Effect
%age
Advertisement
15 12 8 4
15-19 20-30 30-50 50 & Above
Significant Insignificant Insignificant Insignificant
90% 90% 80% 86%
Advertisement Advertisement Advertisement Advertisement
50
14 12
Impact of Advertisement on 10 Consumers 8 6 4 2 0 15-19
20-30
30-50
50 & a bove
Age Group
FIGURE – 6 IMPACT OF ADVERTISEMENT ON DIFFERENT AGE GROUPS OF CONSUMERS
INTERPRETATION :-
From the above table it is clear that impact of advertisement on different age age groups groups of consum consumers ers by major majority ity of the respo responde ndent nts s (90%) (90%) is maximum in case of age group between 15 to 19 and minimum (14%) in case of age group between 50 and above.
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C) Perceptions
:-
01. 01.
Stud Study y on on Who Whole lesa sale lers rs Perc Percep epti tion ons s
1.1 1.1
Vari Variat atio ions ns in Info Inform rmat atio ion n Flo Flow w
Smal Smalle lerr (non (non-s -sup uper erma mark rket et,, smal smalll form format at stor store) e) whol wholes esal aler ers s receiv received ed relati relativel vely y less less suppo support rt compar compared ed to superm supermark arkets ets in terms of servicing, margins, information about sales promotion activities from the agencies. Many a times small wholesalers were only only inform informed ed verba verbally lly about about sales sales promo promotio tion n schem schemes es by the the agency salesmen during the scheduled weekly visits. 1.2 1.2
Reta Retail iler ers s & whol wholes esal aler ers s Dyna Dynami mics cs
At the the tim time of sale sales s prom promot otio ion n acti activi viti ties es,, whol wholes esal aler ers s had 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. Howev However er,, superm supermark arket ets s and and big retail retailers ers were were pamp pampere ered d and and give given n spec specia iall serv servic ices es and and give given n bett better er marg margin ins s and and bett better er allowances.
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1.3
Margins
It was found that in Sunsilk Shampoo category margins varied from from 2 to 5% depe depend ndin ing g of the the size size of the the whol wholes esal ale e outl outlet et,, bargaining power of a wholesaler, quantity ordered by him etc. Most Mostly ly marg margin ins s were were link linked ed to size size of the the volu volume mes s that that were were ordered. 1.4
Perceptions about mass media announcements
Forty Forty Nine out of fifty wholesa wholesalers lers viewed viewed that whenever whenever sales sales promotion scheme was announced announced on TV, it created pull and they were more than willing to stock such brands.
02. 02.
Stud Study y on Reta Retail iler er Perc Percep epti tion ons s Perceptions on Scheme Preference
It was found that retailers perceived price offs as a better form of sales promotion activity. Price offs in their opinion had relatively a greater impact compared to any other form of sales promotion acti activi vity ty like like Bonu Bonus s pack packs, s, Prem Premiu ium, m, Cont Contes ests ts etc. etc. Reta Retaile ilers rs pref prefer erre red d pric price e offs offs the the most, ost, then then bonu bonus s pack pack,, prem premiu ium, m, contests, in order of importance.
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2.2 2.2
Perc Percep epti tion on abou aboutt Buy Buyin ing g Rol Roles es
Retailers viewed that the the person who came came to the shop (who (who may be a maid, son, daughter, daughter-in-law, child) was the decider of a Sunsilk Shampoo brand and not the income provider (e.g. head of the family). It could be inferred that visibility of information about the sales promotion activity at the point of purchase could result into the purchase of a promoted brand. brand. 2.3
Perceptions about their role in decision-making
Retailers had relatively very low influence in affecting choice. It could be inferred that visibility and awareness about the scheme were the critical success factors so that pull could be created. 2.4
Perceptions about Response to Sales Promotion Offers
They believed that younger age-groups were more experimental in nature, amenable to trying new brands, and sought/looked for or asked asked wheth whether er there there were were any) any) sales sales promo promotio tion n schem schemes es running on any Sunsilk Shampoo at the time of purchase. 2.5
Margins
It was found that in Sunsilk Shampoo category margins varied from 4 to 10% depending of the size of the retail outlet, bargaining power of a retailer, quantity ordered by him etc. Mostly margins were linked to size of the volumes that were ordered.
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2.6
Problem of left-over
Leftover stocks at the end of any scheme was required to be sold by the retailer retailer & wholesaler before before they ordered ordered fresh stocks. 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 regu regula larr sham shampo poo. o. This This appr approa oach ch of the the comp compan any y lead leads s to misap misappro propr priat iation ion,, which which in turn turn could could result result in adver adverse se brand brand image. 2.7 2.7
Perc Percep epti tion ons s abou aboutt mass mass med media ia ann annou ounc ncem emen ents ts
Fort Forty y Nine Nine out out of fift fifty y reta retaile ilers rs view viewed ed that that when whenev ever er sale sales s promotion scheme was announced announced on TV, it created pull and they were more than willing to stock such brands. 2.8
Handling Pro Problems
Many a times retailers had to handle various sales promotions offers simultaneously in a category and also across categories and there was no formal communication planning either from the whol wholes esal aler er or the the comp compan any. y. Reme Rememb mber erin ing g each each offe offerr and and hand handliling ng was was a prob proble lem m espe especi cial ally ly for for a smal smalll reta retaililer ers s & wholesalers which was often a as one-man show.
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3
Sub-Study on Consumer Perceptions:
3.1 3.1
Will Willin ingn gnes ess s to buy buy on sale sales s prom promot otio ion n offe offer r
Sixty-three per cent of the sample did not show willingness to buy a brand due to promotion while 27% showed willingness and 10% 10% were were not not sure sure.. This This indi indica cate tes s that that when when 27% 27% show showed ed willi willing ngne ness ss,, and and 10% 10% cons consum umer ers s who who were were not not sure sure,, thes these e grou groups ps might might be lured lured throu through gh innova innovativ tive e and and lucrat lucrative ive sales sales promotion offer. 3.2
Abili bility ty to induce duce trial ial
Forty per cent of the respondents had said that sales promotion had the ability to induce trial. 3.3
Long-term impact
In order to understand ability of the promotions to increase longterm sales, respondents were asked about continuity of purchase of a brand after the withdrawal of promotion. Eighty per cent of the respondents indicated that they would not continue. But 20% said they would. Thus, it could be inferred that promotions in this category (low involvement products) might encourage trial and brand switching but not long term loyalty.
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3.4
Perceived Qu Quality:
Ninety-three per cent of the respondents had a perception that the quality of the promoted brands remained the same during promotion, while 7% felt that it was inferior than before. It can be infer inferred red that that promot promotion ions s were were not not leadin leading g to nega negativ tive e brand brand quality perceptions. It was further reinforced when 53% of the respondents said that sales promotion would not weaken their loyalty towards the brand. 3.5
Perceptions regarding underlying company motivations
On
tap tapping ing
perce rception ions
reg regardin rding g
unde nderlyin lying g
com company any
motivations 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 company image” image” were were rank ranked ed lowe lowest st.. This This indi indica cate tes s that that
consum consumers ers belie believed ved that that compa companie nies s were were unde underta rtakin king g such such activities only for their own benefit and not for the benefit of consumers. The retailers had the perception that those schemes which were announced through mass media had better response. This was reinforced by the consumer survey which showed that recall in case of heavily promoted schemes on TV was found to be very high.
57
Retai Retailer ler predic predictio tion n of compa companie nies’ s’ motiv motivati ation on for for offer offering ing sales sales promotion were matching with the consumer consumer perception regarding the same. Thus both viewed that companies were using sales prom promot otio ion n acti activi viti ties es main mainly ly to incr increa ease se shor shortt-te term rm sale sales s or encourage switching or selling excess stock and not really to give value benefit or enhance/reinforce brand/company image.
D) Limitations 1.
:-
The The geog geogra raph phic ical al scop scope e of the the stu study dy was was res restr tric icte ted d to the the Bhilai Region due to time and resource constraints.
2.
The The stu study dy bein being g exp explo lora rato tory ry in in nat natur ure, e, the the samp sample le siz size e was was restricted to 50 consumers (female group) and 50 retailers & wholesalers.
3.
Focus
being
generali raliza zati tio ons
mainly draw rawn
on
in-depth
are only
probing,
indi indica cattive ive
and
the not
conclusive. 4.
Gene Genera raliz lizat ation ion of find findin ing g of the the subj subjec ectt cann cannot ot app apply ly on on the the total universe.
58
59
CONCLUSION Comp Compan anies ies need need to system systemat atise ise inform informati ation on flow flow regard regarding ing sales sales promotion activities particularly at wholesaler retailer level. Ensuring proper information flow and devising checks and measures to reduce misap misappro propri priati ation ons s and implem implemen entat tation ion flows flows should should be consid considere ered d critic critical al aspect aspects s for the succes success s of sales sales prom promoti otion on activit activities ies by the companies. As retailing and wholesaling is fragmented, direct reach by compan companies ies is next next to imposs impossibl ible. e. Throu Through gh whole wholesal salers ers and and prope proper r feedback mechanism, companies keep in touch with the market. From the study it was found that smaller retailers & wholesalers felt neglected and and not not enth enthus used ed to impl implem emen entt the the sche scheme mes, s, part partic icul ular arly ly when when additional handling, stocking, accounting was required on the part of a retailer & wholesaler without compensatory margins. It can be seen that the the retail retailer er & whole wholesal saler er and and consum consumer er percep perceptio tions ns match matched ed with with respect to preferences of schemes, underlying motivations and role of mass media. This implies that the retailer & wholesaler would be a rich source of information about the consumer and the likely response to sales promotion activities. Developing a system to tap such responses from time to time both at retailer & wholesaler and consumer level would be helpful for planning future sales promotion activities. In order to build build trust trust and and commit commitme ment nt compan companies ies should should tap prefe preferen rences ces,, perceptions of retailers & wholesalers wholesalers as well as consumers. consumers.
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SUGGESTIONS It refers to short term use of incentives or other promotion activities that seek to stimulate interest, trial or purchase. The distinguishing character of sales promotion is that they draw stronger and quicker response from the target audience. They create some sense of immediacy or urgency to respond. Some of the sales promotion activities commonly used by the marketeers are: (i)
Rebates: Price promotions involve some kind of tinkering with the
price of the product to make it attractive to the buyers to buy on urgent basis. (ii)
Discounts: Discounts are like price promotions, in which certain
percentage of price is reduced as discount from the list price. (iii)
Refunds or Rebates: In these the seller offers to refund a part of
price paid by the customer on the production of some proof of purchase. (iv)
Premiu Premiums ms or Gifts: Gifts: The The cust custom omer er is give given n a gift gift alon along g the the
produ product ct like like condit condition ioner er sache sachette tte with with the the pack pack of sache sachette tte of shampoo. (v)
Sometime imes s seller sellers s devis devise e specia speciall packa package ge,, Quantity Quantity Deals: Deals: Somet which gives extra quantity of the product to the buyer at less price or no price.
61
(vi)
Sampling: Sampling means giving free sample of product to the
customer. (vii) Contests: Contests : Consumer contests are another form of commonly use
promotions. (viii) Free Free in mail mail premiu premiums: ms: Rathe Ratherr the the custom customer er is requir required ed to
correspond with the marketeer by sending, for example a wrapper or some proof of purchase or multiple purchases to claim the benefit. (ix)
Container premium : The marketeer devises special containers
for packaging the product which could be used by the customer for some use.
62
REFERENCE
1.
Aradhna Krishna, Imran S. Curriuun and Robert W. Shoemaker, Shoemaker, Journa nall of “Consu “Consume merr Percep Perceptio tions ns of Promo Promotio tiona nall Activi Activity, ty,”” Jour Marketing , Vol.55 (April 1991), pp.4-16.
2.
Page Moreau, Aradhna Krishna, Bari Harlam, “The ManufacturerManufacturerretail retailers ers & whole wholesal salers ers-co -consu nsume merr triad triad:: Differ Differing ing perce percept ption ions s Journall of Reta Retaili iling ng , 77 (200 regarding regarding price promotio promotions,” ns,” Journa (2001) 1),,
pp.547- 569.
3.
Kotler Kotler Philli Phillip, p, “Marke “Marketin ting g Managem Management ent : Analysi Analysis, s, Plannin Planning, g, Implementation and Control,” 9 th ed., Prentice Hall of Bhilai City, 1997.
4.
India infoline.com
5.
Agencyfaqs.com Agencyfaqs.com (web site)
63
BIBLIOGRAPHY 1.
Aradhna Krishna, Imran S. Curriuun and Robert W. Shoemaker, Shoemaker, Journa nall of “Consu “Consume merr Percep Perceptio tions ns of Promo Promotio tiona nall Activi Activity, ty,”” Jour Marketing , Vol.55 (April 1991), pp.4-16.
2.
Adve Advert rtis isin ing g Asso Associ cia ation ion (19 (1997), Mark Marke eting ing Pock Pocke et book NTC Publications, Henley-on-Thames. Henley-on-Thames.
3.
Page Moreau, Aradhna Krishna, Bari Harlam, “The ManufacturerManufacturerretail retailers ers & whole wholesal salers ers-co -consu nsume merr triad triad:: Differ Differing ing perce percept ption ions s Journall of Reta Retaili iling ng , 77 (200 regarding regarding price promotio promotions,” ns,” Journa (2001) 1),, pp.547- 569.
4.
The Times, March 2, 2001. 5. Kotler Kotler Phillip, Phillip, “Marketin “Marketing g Managem Management ent : Analysis, Analysis, Planning Planning,,
Implementation and Control,” 9 th ed., Prentice Hall of Bhilai City, 1997. 6. Sale Sales s Mana Manage geme ment nt deci decisio sions ns,, stra strate tegi gies es and and case cases, s, Fift Fifth h edition, By Author Richard R. Still, Edward W. Cundiff & Norman A.P. Govoni. 7. Fund Fundam amen enta tals ls of Mark Market etin ing, g, Tent Tenth h Edit Editio ion, n, McGr McGraw aw-h -hililll International editions, Marketing & Advertising series by Author William J. Stanton, Michael J. Etzel & Bruce J. Walkey. 8. Marketing Marketing Managem Management, ent, Planning Planning Implementa Implementation tion and Control Control in Global perspective, Indian Context, Third Edition by Macmillan Business Books by Author V.S. Ramaswamy and S. Namakumari. URL
1.
India infoline.com
2.
Agencyfaqs.com (web site)
3.
Search on www.google.com
64
65
Questionnaire (Consumer-For Female Group) Respected Madam, I am condu conductin cting g a survey survey entitl entitled ed “ Impact of sales promotio promotion n on Consume Consumer, r, Retailer Retailer & Wholesa Wholesaler ler – With special special reference reference to Sunsilk Sunsilk Shampoo Shampoo at Bhilai Bhilai Region” . I need your help
in conducting this study. Kindly provide me your valuable opinion to fill this questionnaire. Your information will be kept confidential and will be exclusively used for academic purpose.
Sushmita Yadav M.B.A 2nd Sem . B.I.T. Durg (C.G.)
(a)
1. Demogra ograp phic In Infor formatio tion Name :- …… ………………………………………….……………………….
(b) (b)
Addr Addres ess s :- ………… ……………… ………… ………… ………… ………… …….. ...… .……. …... .... .... .... .... .... .... .... .... .... .... .... .... .... ………………………………………………………………………...
(c) (c)
Pho Phone Num Number ber :- ………………………………………………………..
(d)
Age group:15-19 [ ]
20-30 [ ]
(e) Marital Status:(f)
30-50[ ]
Married [ ]
Educational qualification :Undergraduate [ ] Graduate [ ]
50 & above [ ]
Unmarried [ ] Post-Graduate Post-Graduat e [ ]
(g) Employment Status:Employed [ ] (h) (h)
Unemployed [ ]
Selfemployed Selfemploy ed [ ]
Mont Monthl hly y per perso sona nall inc incom ome… e……… ………… ………… ………… ………… ………… ………… …… 2.
List List of of bra brand nded ed sham shampo poo o you you are are awa aware re of: of:-……………………………………………………………………………. …………………………………………………………………………….
66
3.
Do you prefer sunsilk shampoo over other? Yes [ ] No [ ]
4.
If yes yes the then n men menti tion on your your prio priori riti ties es in choo choosi sing ng it. it. Price []
5.
Quality
[]
Advertisement Advertisement
[]
Quantity
[]
Discounts
[]
Others
[]
If the com company any withd ithdrraws all promotio tional stra strate teg gies ies from from the the market, will you still prefer sunsilk over the rest of the shampoos? Yes [ ]
6.
No [ ]
If Yes then why:…………………………………………………………………………… …………………………………………………………………………… 7. If no then then why: why:-…………………………………………………………………………… …………………………………………………………………………… 8. Which Which one one do do you you pref prefer? er? Sachet [ ]
Bottle[ ]
Date : ___________ ( Signature )
67
Questionnaire (Retailers and Wholesalers) Respected Sir, I am condu conductin cting g a survey survey entitl entitled ed “ Impact of sales promotio promotion n on Consume Consumer, r, Retailer Retailer & Wholesa Wholesaler ler – With special special reference reference to Sunsilk Sunsilk Shampoo Shampoo at Bhilai Bhilai Region” . I need your help
in conducting this study . Kindly provide me your valuable opinion to fill this questionnaire . Your information will be kept confidential and will be exclusively used for academic purpose . Sushmita Yadav M.B.A 2nd Sem . B.I.T. Durg (C.G.)
1.
Demogra ograp phic In Infor formatio tion
a)
Name Name :- ………… ……………… ………… …….… .……… ………… ………… ………… ………… ………… ………… ………… ……..
b)
Addres Address s :- ………… ……………… ………… ………… ………… ………… ………… ……... ...... ...... ...... ...... ...... ...... ...... ...... ..... ……………………..……………………………………………………...
c)
Phon Phone e Numbe Numberr :- ………… ……………… ………… ………… ………… ………… ………… ………… ………… …….. ..
d)
Age group:20-30 [ ]
e)
30-40 [ ]
40-50 [ ]
50&above [ ]
Educ Educat atio iona nall Qual Qualif ific icat atio ions ns::Under Graduate [ ]
Graduate [ ]
Post Graduate [ ]
2 . Is sunsil sunsilk k sham shampoo poo availa available ble in you yourr shop shop? ? Yes [ ]
No [ ]
3.
If yes, reasons for keeping the sunsilk stock:…………………………………………………………………………… ……………………………………………………………………………
4.
How How muc much h mar margi gin n do do you you enjo enjoy y on on sun sunsi silk lk? ? Sachet ………………………………………………………………….. Bottle……………………………………………………………………
68
5.
Which ich is more in deman emand d? Sachet [ ]
Bottle [ ]
6.
Why Why do do you you keep keep suns sunsilk ilk sham shampo poo o in in you yourr sho shop? p? ……………………………………………………………………………. …………………………………………………………………………….
7.
How mu much do yo you buy buy in bulk? lk? In case of sachet ………………………….……………………………. In case of Bottle…………………………………………………….……
8.
Do prom promot otion ional al strate strategie gies s undert undertake aken n by comp company any have have any any effe effect ct on the demand of sunsilk shampoo? …………………………………………………………………………. …………………………………………………………………………… ……………………………………………………………………………
Date : ___________ ( Signature )
