Guru Final Project

Study on effectiveness of sales promotional strategies of FMCG
CHAPTER-1
INTRODUCTION
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Every business organization reaches to the customers through their goods or services. To sell the
products to the customers a number of activities are being performed. This is called marketing and it
is an important function. Marketing is the performance of business activities that directs the flow of
goods and services from producer to the customer. It is the activity that directs to satisfy the human
needs through exchange process. Marketing starts with the identification of a specific need of
customers and ends with satisfaction of that need. For easy understanding these activities are divided
in 4 groups for products and 7groups for services. These elements are product, price promotion,
placement for products and three additional elements for services are process, people and physical
evidence. These are called elements of marketing mix.
Promotion is one of the elements of marketing mix. Promotion decisions are taken
simultaneously with other decisions like finding target group, determining objectives, budgeting for
promotion, launching of new products, distribution etc... Marketers are concerned with effective
utilization of promotion-mix to increase sales and market share. Methods of promotion include
advertising personal selling, publicity, sales promotion and packaging. Sales Promotion is the activity
that aims directly to influence buyers to buy products and increase sales. In sales promotion mainly
three parties are involved i.e. Consumers, traders and sales force. Sales promotions include incentive
offering and interest creating activities which are generally short term marketing events other than
advertising, personal selling, publicity and direct marketing. The purpose of sales promotion is to
stimulate, motivate and influence the purchase and other desired behavioral responses of the firms
customers
The main objective of sales promotion is to increase the sales of products in short term by
influencing behavior of buyers. Sales promotion methods are many and these are selected as per the
target groups. For this purpose, a sales promotion strategy is to be prepared to achieve the objectives
effectively. The strategy is a game plan that is needed to perform the tasks effectively and get
competitive advantages over others in market. Sales promotion strategy directs the manager in
selection of parties, methods of sales promotion, implementation of methods and measuring
effectiveness of whole efforts regarding sales promotion. In competitive situation, it is very difficult
to increase sales or profit. But with sales promotion strategy sales can be increased in short term. It
explains what, when, where, who and how to do so that objectives of the planning are achieved.
Without the strategy the task may not be completed effectively. Sales promotion strategy would help
to neutralize the effective of competition and defend the company in the market in performing the
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sales related tasks. The importance of sales promotion strategy is increasing day by day and in future
higher level of competition it would increase further.
Indian industry is a fast developing industry. Fast Moving Consumer Goods (FMCG) are
more in demand and frequently purchased by customers. These goods include all Consumable goods
(other than pulses and grains) and consumers buy at regular intervals in Small quantities. Main items
in this category are detergents, soaps, shaving products, Shampoos, toothpastes and brushes, packed
food stuffs, household accessories, creams, oils, Tea, coffee etc. The major players in the markets are
HUL .Nestle, P & G, Colgate, ITC, Nirma, Britannia, Amul, Emami, Marico and Dabur. Every family
spends a large portion of Monthly budget on FMCG products. Contribution of FMCG sector in every
economy is Significant. Now, due to globalization, every economy is facing tough competition.
Entries of MNCs and cheaper import have made the situation more difficult. To carry out the Business
in this sector, it has become very difficult. Every company has to spend a large Portion of their budget
on promotional efforts.
Most of the companies have applied various elements of promotion mix. Promotion mix
elements include advertising, publicity, sales promotion, personal selling and packaging. Sales
promotion is one of them and it is our concerned topic. In present competitive situation most of
MNCs had developed sales promotion strategy in selection of parties, techniques and managing sales
promotion techniques effectively and efficiently. This strategy provides competitive advantage to the
companies in the market to grow, stabilize and excel in business performance. Therefore, sales
promotion strategy is very significant for companies to earn bread and butter.
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SALES PROMOTION
Introduction
The importance of sales promotion in the marketing mix of the fast moving consumer goods
(FMCG) category throughout the world has increased. Companies spend considerable time in
planning such activities. However, in order to enhance the effectiveness of these activities,
manufacturers should understand consumer interpretations of their promotional activities. The study
here pertains to consumers perceptions regarding sales promotion. Some past researches have
suggested that promotion itself has an effect on the perceived value of the brand. This is because
promotions provide utilitarian benefits such as monetary savings, added value, increased quality and
convenience as well as hedonic benefits such as entertainment, exploration and self-expression.
Broadly speaking most of the companies using Marketing Mix which includes
Price
Place (Channel of Distribution)
Product
Promotion
Positioning
Packaging
People
Product
To begin with, develop the habit of looking at your product as though you were an outside marketing
consultant brought in to help your company decide whether or not it's in the right business at this
time. Ask critical questions such as, "Is your current product or service, or mix of products and
services, appropriate and suitable for the market and the customers of today?"
Whenever you're having difficulty selling as much of your products or services as you'd like, you
need to develop the habit of assessing your business honestly and asking, "Are these the right
products or services for our customers today?"
Is there any product or service you're offering today that, knowing what you now know, you would
not bring out again today? Compared to your competitors, is your product or service superior in some
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significant way to anything else available? If so, what is it? If not, could you develop an area of
superiority? Should you be offering this product or service at all in the current marketplace?
Prices
The second P in the formula is price. Develop the habit of continually examining and reexamining the
prices of the products and services you sell to make sure they're still appropriate to the realities of the
current market. Sometimes you need to lower your prices. At other times, it may be appropriate to
raise your prices. Many companies have found that the profitability of certain products or services
doesn't justify the amount of effort and resources that go into producing them. By raising their prices,
they may lose a percentage of their customers, but the remaining percentage generates a profit on
every sale. Could this be appropriate for you?
Sometimes you need to change your terms and conditions of sale. Sometimes, by spreading your price
over a series of months or years, you can sell far more than you are today, and the interest you can
charge will more than make up for the delay in cash receipts. Sometimes you can combine products
and services together with special offers and special promotions. Sometimes you can include free
additional items that cost you very little to produce but make your prices appear far more attractive to
your customers.
In business, as in nature, whenever you experience resistance or frustration in any part of your sales or
marketing activities, be open to revisiting that area. Be open to the possibility that your current
pricing structure is not ideal for the current market. Be open to the need to revise your prices, if
necessary, to remain competitive, to survive and thrive in a fast-changing marketplace.
Promotion
The third habit in marketing and sales is to think in terms of promotion all the time. Promotion
includes all the ways you tell your customers about your products or services and how you then
market and sell to them.
Small changes in the way you promote and sell your products can lead to dramatic changes in your
results. Even small changes in your advertising can lead immediately to higher sales. Experienced
copywriters can often increase the response rate from advertising by 500 percent by simply changing
the headline on an advertisement.
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Large and small companies in every industry continually experiment with different ways of
advertising, promoting, and selling their products and services. And here is the rule: Whatever method
of marketing and sales you're using today will, sooner or later, stop working. Sometimes it will stop
working for reasons you know, and sometimes it will be for reasons you don't know. In either case,
your methods of marketing and sales will eventually stop working, and you'll have to develop new
sales, marketing and advertising approaches, offerings, and strategies.
Place
The fourth P in the marketing mix is the place where your product or service is actually sold. Develop
the habit of reviewing and reflecting upon the exact location where the customer meets the
salesperson. Sometimes a change in place can lead to a rapid increase in sales.
You can sell your product in many different places. Some companies use direct selling, sending their
salespeople out to personally meet and talk with the prospect. Some sell by telemarketing. Some sell
through catalogs or mail order. Some sell at trade shows or in retail establishments. Some sell in joint
ventures with other similar products or services. Some companies use manufacturers' representatives
or distributors. Many companies use a combination of one or more of these methods.
In each case, the entrepreneur must make the right choice about the very best location or place for the
customer to receive essential buying information on the product or service needed to make a buying
decision. What is yours? In what way should you change it? Where else could you offer your products
or services?
Packaging
The fifth element in the marketing mix is the packaging. Develop the habit of standing back and
looking at every visual element in the packaging of your product or service through the eyes of a
critical prospect. Remember, people from their first impression about you within the first 30 seconds
of seeing you or some element of your company. Small improvements in the packaging or external
appearance of your product or service can often lead to completely different reactions from your
customers.
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With regard to the packaging of your company, your product or service, you should think in terms of
everything that the customer sees from the first moment of contact with your company all the way
through the purchasing process.
Packaging refers to the way your product or service appears from the outside. Packaging also refers to
your people and how they dress and groom. It refers to your offices, your waiting rooms, your
brochures, your correspondence and every single visual element about your company. Everything
counts. Everything helps or hurts. Everything affects your customer's confidence about dealing with
you.
When IBM started under the guidance of Thomas J. Watson, Sr., he very early concluded that fully 99
percent of the visual contact a customer would have with his company, at least initially, would be
represented by IBM salespeople. Because IBM was selling relatively sophisticated high-tech
equipment, Watson knew customers would have to have a high level of confidence in the credibility
of the salesperson. He therefore instituted a dress and grooming code that became an inflexible set of
rules and regulations within IBM.
As a result, every salesperson was required to look like a professional in every respect. Every element
of their clothing-including dark suits, dark ties, white shirts, conservative hairstyles, shined shoes,
clean fingernails-and every other feature gave off the message of professionalism and competence.
One of the highest compliments a person could receive was, "You look like someone from IBM."
Positioning
The next P is positioning. You should develop the habit of thinking continually about how you are
positioned in the hearts and minds of your customers. How do people think and talk about you when
you're not present? How do people think and talk about your company? What positioning do you have
in your market, in terms of the specific words people use when they describe you and your offerings
to others?
In the famous book by Al Reis and Jack Trout, Positioning, the authors point out that how you are
seen and thought about by your customers is the critical determinant of your success in a competitive
marketplace. Attribution theory says that most customers think of you in terms of a single attribute,
either positive or negative. Sometimes it's "service." Sometimes it's "excellence." Sometimes it's
"quality engineering," as with Mercedes Benz. Sometimes it's "the ultimate driving machine," as with
BMW. In every case, how deeply entrenched that attribute is in the minds of your customers and
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prospective customers determines how readily they'll buy your product or service and how much
they'll pay.
Develop the habit of thinking about how you could improve your positioning. Begin by determining
the position you'd like to have. If you could create the ideal impression in the hearts and minds of
your customers, what would it be? What would you have to do in every customer interaction to get
your customers to think and talk about in that specific way? What changes do you need to make in the
way interact with customers today in order to be seen as the very best choice for your customers of
tomorrow?
People
The final P of the marketing mix is people. Develop the habit of thinking in terms of the people inside
and outside of your business who are responsible for every element of your sales and marketing
strategy and activities.
It's amazing how many entrepreneurs and businesspeople will work extremely hard to think through
every element of the marketing strategy and the marketing mix, and then pay little attention to the fact
that every single decision and policy has to be carried out by a specific person, in a specific way. Your
ability to select, recruit, hire and retain the proper people, with the skills and abilities to do the job
you need to have done, is more important than everything else put together.
In his best-selling book, Good to Great, Jim Collins discovered the most important factor applied by
the best companies was that they first of all "got the right people on the bus, and the wrong people off
the bus." Once these companies had hired the right people, the second step was to "get the right
people in the right seats on the bus."
To be successful in business, you must develop the habit of thinking in terms of exactly who is going
to carry out each task and responsibility. In many cases, it's not possible to move forward until you
can attract and put the right person into the right position. Many of the best business plans ever
developed sit on shelves today because the [people who created them] could not find the key people
who could execute those plans.
These are the seven basic pillar of marketing mix. Most of the marketing strategies are built on the
basis of these criteria.
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7 Ps Of Marketing Mix
Promotion is one of the important elements of marketing mix. There are so many elements of
promotion such as
Advertising
Direct Marketing
Public Relations
Sales Promotion
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Traditionally, sales Promotions have been used by marketer to increase sales in the short term.
However, in the last few decades this communication tool has evolved and now is considered from a
strategic point of view. For this reason, it is necessary to realize new studies in this area and study
how consumers evaluate sales promotions.
Sales promotions have grown in both importance and frequency over the past few decades.
Although an accurate estimate for total sales promotions expenditures does not exist, we can be sure
that the trend is up.
Sales promotion serves three essential roles: It informs, persuades and reminds prospective
customers about a company and its products. Even the most useful product or brand will be a failure if
no one knows that it is available. As we know, channels of distribution take more time in creating
awareness because a product has to pass through many hands between a producer and consumers.
Therefore, a producer has to inform channel members as well as ultimate consumers about the
attributes and availability of his products. The second purpose of promotion is persuasion. The cut
throat competition among different products puts tremendous pressure on their manufacturers and
they are compelled to undertake sales promotion activities. The third purpose of promotion is
reminding consumers about products availability and its potential to satisfy their needs.
From these elements Sales Promotion is the element which is in the focus of this project.
Further Sales Promotion is quite broad term it includes
Sales Promotion
Consumer Oriented Sales Promotion Trade Oriented Sales Promotion
(i) Consumer Oriented Sales Promotion

Consumer Oriented Sales Promotion emphasizes to motivate consumer to increase sales.
Consumer Oriented Sales Promotion includes Sampling, Couponing, Premiums, Contest, Refunds,
Rebates, Bonus Packs, Price-off, Event marketing etc.
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Definition:
For the purpose of this study, following definitions of sales promotion were kept in mind.
Kotler defines sales promotion as: Sales promotion consists of a diverse collection of incentive
tools, mostly short-term designed to stimulate quicker and/or greater purchase of particular
products/services by consumers or the trade.
Roger Strang has given a more simplistic definition i.e. sales promotions are short-term incentives
to encourage purchase or sales of a product or service.
Hence, any forms of incentives (price cut or value added nature) offered for short period
either to trade or consumers are considered as sales promotion activities.
Marketers uses consumer oriented sales promotion tools for the following reasons:
To increase short term sales
To induce trial
To reduce inventory
To establish a brand name
To make cross selling
To cope up with competition
To avoid advertising clutter
Tools of Consumer Oriented Sales Promotion

There are so many tools or technique available to the marketers for achieving objective of sales
promotion. These tools should be used considering all other factors affecting such as cost, time,
competitors, availability of goods etc. These tools are as under
1.
Coupons
4.
Price-Off
5.
Freebies
4.
Scratch Cards
5.
Lucky Draws
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6.
Bundling Offer
7.
Extra Quantity
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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.
4.
Price-off:
A price-off is simply a reduction in the price of the product to increase sales and is very often
used at the time of introduction of a new product. A reduction in price always increases sales but the
use of this technique should be carefully considered in the current market situation.
Price-off is the most preferred sales promotion technique because consumers response very
positively to this scheme. Not only that but it also cause large increase in sales volume. Price-off
reductions are typically offered tight on the package through specially marked price packs.
E.g. Krack Jack offers 30% Price-off.
5.
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
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A scratch card (also called a scratch off, scratch ticket, scratcher, scratchier, 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),
and in the fast food industry in which multiple items are combined into a complete meal. A bundle of
products is sometimes referred to as a package deal or a compilation or an anthology.
Factors Influencing Consumer Oriented sales promotion:
Mainly four factors should be taken into account while determining the sales promotion
program.
Target market
Nature of product
Stage of product life cycle
Budget available for promotion
1. Target Market:
While doing sales promotion, marketer must know who their target market is; otherwise there is no
use of all effort because it leads to nowhere. A target market can be in any of the stages of buying
hierarchy i.e. awareness, knowledge, liking, preferences, conviction and purchase. Each stage defines
a possible goal of promotion.
4. Nature of the product:

There are various product attributes which influence sales promotional strategy. When the unit
price is low the manufacturer as well as the customer has low risk but he can get the benefit of mass
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marketing. Therefore, mass marketing requires mass sales promotion schemes. Sales promotion
scheme differ for products like its durability, perishable goods etc.
5. Stage of product Life Cycle:

Sales promotion strategies are influenced by the life cycle of a product. When a new product
introduced, prospective buyers must be informed about its existence and its benefits and middlemen
must be convinced to stock it. Later, if a product becomes successful, competition intensifies and
more emphasis is placed on sales promotion to increase its sales.
4. Budget Available for Promotion:

The funds available for promotion are the ultimate determinant of the promotional programme. A
business with ample funds can make more effective use of sales promotion programme than a firm
with limited financial resources. The budget for sales promotion can be prepared by the following
methods
(ii)
Percentage of Sales
Fixed funds available for sales promotion
Following the competition, and
Budgeting by objective.
Trade Oriented Sales Promotion

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

There are three mechanisms behind these facts. It is,
Purchase quantity
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Brand switching and

Category expansion.
First, consumer can increase the quantity they buy just because the product is on sale.
Second, consumers are inducing to purchase another brand different from the one they would have
purchased when there is no promotional incentive.
Finally, consumers total consumption of the product category is increased by the promotion.
However, in the long term this positive effect may be diluted because a promotional campaign has no
permanent effect in the sales of the firm
SALES PROMOTION STRATEGY
Sales are the lifeblood of a business, without sales there would be no business in the first
place; therefore it is very important that if a business wants to succeed, it should have a sales
promotion strategy in mind. The primary objective of a sales promotion is to improve a companys
sales by predicting and modifying your target customers purchasing behavior and patterns.
Sales promotion is very important as it not only helps to boost sales but it also helps a business
to draw new customers while at the same time retaining older ones. There are a variety of sales
promotional strategies that a business can use to increase their sales, however it is important that we
first understand what a sales promotion strategy actually is and why it is so important.
A sales promotion strategy is an activity that is designed to help boost the sales of a product or
service. This can be done through an advertising campaign, public relation activities, a free sampling
campaign, a free gift campaign, a trading stamps campaign, through demonstrations and exhibitions,
through prize giving competitions, through temporary price cuts, and through door-to-door sales,
telemarketing, personal sales letters, and emails.
The importance of a sales promotion strategy cannot be underestimated. This is because a
sales promotion strategy is important to a business boosting its sales.
When developing a sales promotion strategy for your business, it is important that you keep
the following points in mind.
Consumer attitudes and buying patterns

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Your brand strategy

Your competitive strategy
Your advertising strategy
Other external factors that can influence products availability and pricing.
There are three types of sales promotion strategies:

A push strategy
A pull strategy or
A combination of the two
(i)
A Push Strategy
A push sales promotion strategy involves pushing distributors and retailers to sell your
products and services to the consumer by offering various kinds of promotions and personal selling
efforts. What happens here is that a company promotes their product/services to a reseller who in turn
promotes it to another reseller or to the consumer. The basic objective of this strategy is to persuade
retailers, wholesalers and distributors to carry your brand, give it shelf space, promote it by
advertising, and ultimately push it forward to the consumer. Typical push sales promotion strategies
include; buy-back guarantees, free trials, contests, discounts, and specialty advertising items.
(ii)
A Pull Strategy
A pull sales promotion strategy focuses more on the consumer instead of the reseller or
distributor. This strategy involves getting the consumer to pull or purchase the product/services
directly from the company itself. This strategy targets its marketing efforts directly on the consumers
with the hope that it will stimulate interest and demand for the product. This pull strategy is often
used when distributors are reluctant to carry or distribute a product. Typical pull sales promotion
strategies include; samples, coupons, cash refunds or rebates, loyalty programs and rewards, contests,
sweepstakes, games, and point-of-purchase displays.
(iii)
A Combination of Two Strategies
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A combination sales promotion strategy is just that; it is a combination of a push and a pull strategy.
It focuses both on the distributor as well as the consumers, targeting both parties directly. It offers
consumer incentives side by side with dealer discounts.
The Short term Impact of Promotions

Lets have look at the impact of promotions on purchase behavior during the promotional period i.e.
the week or the month when the promotion was being run. The majority of the empirical studies have
focused on the impact of promotions in the short term. The key findings across the studies are
discussed below.
Temporary price reductions (price off) substantially increase sales

Sales Promotion leads to brand substitution with the product category
Sales Promotion leads to purchase acceleration/stockpiling effects
Sales Promotion leads to primary demand expansion for a category
Sales Promotions affect sales in complementary and competitive categories
The Long term Impact of Promotions

Strategies are builds to reap the benefits for longer period of time; same is true in sales promotion
strategies. Let us see impact of promotions effort and study the impact over a longer time period e.g.
4-6 months or even a few years after a sales promotion campaign.
The result showed that consumer promotions for leading brands of established
packaged products had no after-effects on the brands sales or repeat buying loyalty. The extra sales of
a brand while promoted came virtually all from the brands existing long-term customer base for
which the experience of buying the promoted brand was nothing new.
It is found that although the short term effects of promotions are strong; these
promotions rarely exhibit long term effects. It is observed that each sales component generally lacked
a permanent effect and the effect of promotion was short lived and increase in promotions affected
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consumers stockpiling decisions in the long run. They found that the combined short and long-term
elasticity of promotions was zero. The stockpiling induced by a promotion was essentially offset by
reduced demand in the long term. Thus increased sales were more a result of sales borrowed from the
future than increased consumption.
EXECUTIVE SUMMARY
As a part of the study curriculum it is necessary to conduct a grand project. It provides the
researcher an opportunity to understand the particular topic in depth and which leads to thorough to
that topic. The grand project is titled as effectiveness of sales promotional strategies on FMCG with
a special reference to HUL in which emphasis is given to the effect of sales promotion on buying
habits of consumers towards HUL products.
To start with, the researcher will give brief information regarding FMCG sector then moving to
the main topic we will explain what the topic is all about. Promotion is one of the pillars of marketing
mix and same way sales promotion is also one of the elements of promotion.
Based on secondary source certain theoretical aspects are included as a part of study. Then after
concentration is given to the primary research. It includes the analysis and results of survey which
focuses on the effects of sales promotion strategies of HUL. The survey was conducted with the help
of structured questionnaire.
BACKGROUND OF THE STUDY

With the growth of population and spending power of the consumer has created the opportunities and
challenges for the FMCG companies in the world market. Simultaneously, competition to win
consumers has been increased drastically. World is becoming the small village and Many MNCs have
entered in India and other countries. Marketing paradigm is shifting from consumer satisfaction to
consumer delight. Enticing consumers with the various sales promotion schemes is the order of the
day. If this tool is not used strategically, company has to follow the trend of promotions to maintain
the market share.
In present situation not only in one industry but also all sectors are facing tough
competition. It has become very difficult to grow, stabilize and excel in business performance. Over
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and above, business environment is changing drastically. It is very difficult to predict about future.
High degree of risk is involved in it. Sincere and dedicated efforts are needed in marketing to retain
the existing customers and attract the new customers. It is required to influence the attitude and
behavior of buyers. A lot of promotional activities are needed. The leading companies are using
difference techniques for promotion. These are advertising, publicity, sales promotion, personal
selling and packaging. These are serving the difference objectives. Sales promotion is one of them and
gives a great impact on customer buying behavior to increase sales in short term. It contributes to
neutralize the competition effect. To achieve the objective a strategy is needed for effective
application of sales promotion. The contribution of sales promotion strategy is significant in present
time to stay in business in competitive market.
Considering almost universal applications of designing the sales promotion
schemes and understanding its impact on business has motivated to take the steps in the direction to
study this crucial aspect of promotion management.
RESEARCH OBJECTIVES
To study consumer preferences with respect to sales promotion in FMCG sector.
To examine tradeoffs, relative importance of different attributes while responding to a sales
promotion offer.
To study the effect of sales promotions in FMCG sector especially with HUL products
To study consumer behavior in purchase of fast moving consumer goods.
SCOPE OF THE STUDY

The project deals with the effectiveness of sales promotional strategies of the one FMCG Company.
The project involves the analysis of FMCG Company that is Hindustan Unilever. Project will also
involve the analysis of the variety of the products available in the market. Presence the company will
be ascertained by the product portfolio that they have. Another aspect that will be covered in the
project is the consumption pattern of the customers. Which companys product are used maximum by
the consumers, this will show their effectiveness of sales promotional strategies.
For the purpose of analysis various categories of products is selected. The basis of selection
is that these categories of products are provided by the Hindustan Unilever company. The categories
selected are as follows:
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Food brands
Soaps
Shampoos
Cosmetics
perfumes
Further, focus is there on future of sale promotion strategy also. The scope of the study as per
the topic is sufficient enough to meet the requirement of research study.
LIMITATIONS OF THE PROJECT
The scope of the study is limited to Mysore region only Due To Time Constraint.
Due to this, our sample size is only 100, which is not very large.
All the respondents could not fill their questionnaire on their own due to problem of
time and lack of positive behavior.

Respondent may give biased answer due to some lack of information about the brands.
There is Frequent Changes In The Market Trend And Consumer Preferences
Respondents May Not Provide Full And Accurate Information During Survey
Findings of the study are based on the assumption that the respondents have given
correct information.
However, to overcome the limitations and maintain the effectiveness of research
work sincere efforts were put.
EXPECTED CONTRIBUTION FROM THE STUDY

It is expected the study of this topic would contribute in clarifying the all concepts relating to
marketing communication, promotion mix, sales promotion, and strategy relating to sales promotion,
impact of sales promotion strategy on sales, profit and profitability of companies market share and
goodwill of the companies. After study of the topic in depth the fundamental concepts have been
made very clear. The beneficiary from the study of this topic would be first of all self-researcher,
academicians, practicing managers and the prospect researchers. If these parties refer this research
study in future may take advantage of the finding and suggestions. Academician, practicing managers
and research students may take benefits for academic purpose and on the jobs. The FMCG companies
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may implement the suggestions for improvement of sales for achieving sales targets. It can be said the
benefits would be multidimensional for above mentioned parties.
CHAPTER-2
LITERATURE REVIEW
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LITERATURE REVIEW
BarboraVincenecova (2006) in his dissertation investigates the marketing strategy techniques within
the cosmetic company operating in the Czech market. It begins with a brief look at the political
background in the Czech Republic. Then there is an outline of the current Czech cosmetic market,
followed by the introduction of the company that took part in the research, Avon CR. Thereafter, there
is a review of literature to examine various techniques and methods relating to marketing strategies.
The research for this dissertation uses qualitative methods of investigation and secondary data
collection techniques are employed. The study took form of interview accompanied by a
questionnaire, which complemented the data acquired from the secondary investigation. Finally,
major findings of this dissertation emerge and are discussed. Avon CR seems to have understood the
trends in the Czech cosmetic marketplace, when concerning advertising, sales promotion and public
relations. The company specializes itself in direct selling therefore, the vast majority of its sales
promotion techniques and advertising takes part in the catalogue. There is evidence that the PR
activities regarding relationships with employees seem to be well organized. It was hoped that this
study will encourage further investigation in this particular area, which may help Czech cosmetic
companies to improve their marketing strategies in order successfully to compete with firms from
abroad.
Bobby Anderson (2009) thesis purpose was to provide a better understanding on how sales
promotion is used in B2B setting. In order to reach this purpose, research question focusing on the
objective if sales promotion as well as which sales promotion tools that were used were stated. Based
on these research questions, a review of the relevant literature was conducted, resulting in a
conceptual framework, which was used to guide this studys data collection. A qualitative case study
approach was used using interviewing at an industrial company in Sweden as the primary data
collection tool. The findings indicate that, although the individuals objective of the tool can be
different they can still be used overall goals. It was also found that the focus is not generating sales.
But to improve relationships. As for the tools used, it was found that there are commonly used sales
promotional tools in B2B settings. More specifically, gift giving can be deemed inappropriate in
certain contests and should be used carefully.
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Naachimuthu, K. P. (2011) study aims to analyze "Effectiveness of sales promotion in FMCG retail
stores in Coimbatore city. The objective of this study was to find out the effectiveness of the sales
promotion provided by FMCG retail stores. The type of research used for this study was descriptive
research design. A well structured questionnaire was designed and data was collected from major
FMCG retail stores of Coimbatore. Customers were questioned about their awareness level, frequency
of shopping, attitude towards sales promotion and their preferred scheme. Proportionate stratified
random sampling technique was used to select the samples due to the availability of number of stores
in different retail formats. The sample size was 106. The study reveals that price discounts and buy
one and get one provided by these stores are most effective. It was found that customers are highly
loyal and they do not prefer to the switch stores based on the promotion. This study will help the
retailers to evaluate their promotion strategies to give a better promotion which would attract the
customers.
Binod (2012) in his research study examined consumers' perceptions of products they purchased
under sales promotion offers, and their effects on repurchase intentions of the same products after the
end of the offers. The research was initiated with an exploratory study of marketers' observations of
the effectiveness of consumer sales promotion programs, and consumers' opinions regarding the
products. The findings of this exploratory research were used to develop hypotheses and survey
instrument. A consumer survey was carried out to empirically test the effectiveness of sales promotion
offers on three perceptual dimensions viz. quality, price and fun; and the impact of these perceptions
on repurchase intentions. The research revealed that consumers perceived that they receive quality
and price benefits but not hedonic benefits from the products purchased under product and prize based
sales promotion offers. The sales promotion offers neither encouraged repurchase intentions nor
substantial short term brand switching. Offering a gift attached to the product appeared to reward
loyal consumers only. These findings have implications for marketers' decisions to offer consumer
sales promotions.
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Kamau (2013) dissertation was an exploratory survey on the evaluation of the effectiveness of sales
promotion in the fast moving consumer goods (FMCG) industry in Kenya whose key objectives were;
to establish how firms allocated marketing budgets, what objectives they sought to achieve through
sales promotions as well as whether and how these firms in Kenya evaluated the effectiveness of sales
promotion as a marketing strategy and the challenges faced in the process. A comprehensive literature
review was conducted before collection of qualitative and quantitative primary data from 19 FMCG
companies that were derived from the list of top 100 advertising spenders in 2007. The target
respondents were senior and mid level managers who had great influence, or were final decision
makers in developing, implementing and evaluating marketing strategies for their companies. The
most important conclusion was that, while all companies claimed to be evaluating the effectiveness of
their sales promotion, the evaluation seemed superficial or less than objective owing to the fact that
majority did not have well established tools or systems to carry out adequate detailed analysis. This
was partly due to what was highlighted as the biggest challenge
Ashok Yakkaldeviin his study attempts to explore the effect of consumer sales promotion on loyal
and non loyal consumers in fast moving consumer goods (FMCG) companies. [Detergent and
Shampoo brands] Consumers were classified into two categories by their degree of loyalty towards
the brand. 1. Brand loyal customers. 4. Brand switchers. Sales promotion is one of the effective tools
for establishment and development of the brand. The sales promotion is very essential tool to speed
up the sales of brands. Consumer sales promotions requires large share of the total marketing
expenditures. Increase in the sales because of the consumer sales promotions is generally an increase
short term sales. The study found that consumer sales promotions have more influence on the brand
switchers compare to the loyal customers. Also among the various forms of consumer sales
promotions free gifts have more influence on the brand switching behavior of the consumers. Further
it was found that economy status wasnt a defining factor effecting consumers brand loyalty. This
research paper was an attempt to examine the effect of consumer sales promotion on brand loyal and
brand switching segment in todays Indian fast moving consumer goods (FMCG) markets. The need
to study the consumer perspectives and observe consumer loyalty, switchover Pattern and washing
habits which will help further to develop effective marketing strategies to build brand loyalty.
Komal Nagar1says Sales promotions are generally looked at as tools that undermine the brand; yet a
tool that is necessarily meant to speed up sales. Consumer sales promotion take up a large share of the
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total marketing expenditure despite which it remains an area that still attracts attention as an essential
component of the promotion mix meant to increase short term sales. It is therefore not surprising that
most of the marketers resort to sales promotions to attract the competitor's market share. This paper
reports the results of the effects of consumer sales promotions on 427 consumers. This study has
attempted to explore the effect of consumer sales promotions on loyal and non-loyal consumers in
two Fast Moving Consumer Goods- washing powders and shampoos. Consumers were classified into
two categories by their degree of loyalty towards the brand: brand loyal consumers and non-loyal
consumers (also known as brand switchers). The study found that consumer sales promotions have
more influence on the brand switchers as compared to the loyal consumers. Also, among the various
forms of consumer sales promotions, free gifts have more influence on the brand switching behavior
of consumers. Further, it was found that economic status was not a defining factor effecting
consumer's brand loyalty.
KureshiSonalin his paper, an attempt has been made to examine the nature of sales Promotion
activities in toilet soap category in India, to study retailer perceptions with respect to these activities
and also get an insight into consumer perceptions of these activities. The researchers Findings indicate
that with respect to the nature of the schemes, premiums (free gifts) were found to be the most
frequently used in both premium and popular toilet soap category, followed by price offs. Retailers
perceived price offs to have relatively greater impact compared to any other forms of sales promotion.
In line with the retailers perceptions, the findings of consumer Perceptions indicated that price offs
were the most preferred type of sales promotion. Retailers stated that role of word of mouth and
television advertising was very important in providing Information inputs to the consumers regarding
sales promotion activities. This perception of Retailers was supported by the consumer unaided recall
of sales promotion schemes which were widely advertised. As the retailer interacts and observes
consumers more frequently and closely than the manufacturer, it would be useful for the companies to
incorporate perceptions while planning sales promotion strategies.
M. RampiersaysSales promotions in FMCG involve some form of coordination / cooperation

between manufacturer and retailer. They speaks that todays intensely competitive, rapidly changing
and highly complex environment characterize by diminishing customer loyalty, the need to be market
focused and customer centric is more critical hand any other time in past. It is highly imperative
Consumer preferences for the sales promotion are becoming complicated because of the changing
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attitudes and trends of the customers. The basic aim of this paper is to build the strategic base to
analyze the sales promotion for the fast moving consumer products in the local markets of
Kumbakonam
OyeniyiOmotayostates that, in todays competitive business world customers are considered to be the
kings. Customers have several choices to make among alternative products and they exercised a high
level of influence in the market with respect to produce size, quality and price. Hence, it is important
for producers to meet the needs of customers in order to stay competitive. One of the marketing
communication tools that are used in attracting the attention of the customer and build their loyalty in
sales promotion. The aim of this paper therefore is to determine the effect sales promotion on
customer loyalty in the telecommunication industry. In this study, the survey method was used in
gathering information from the respondents. Sample size of 310, while descriptive and inferential
statistical analyses were conducted with the aid of SPSS software. Producers spend a large part of
their total marketing communication expenses on sales promotion. Hence, this paper attempts to find
the effect of sales promotion on customers of mobile telecommunication services. This paper found
that there is positive relationship between sales promotion and customers loyalty. More importantly,
it was discovered that non-loyal customers are more prone to switch to competing products as a result
of sales promotion than loyal customers.
Samuel Olatunderesearch study is designed to find out the role of effective sales promotion of
consumer products in a competitive economy in Nigeria. The study attempts to find out the
effectiveness of sales promotion activities on sales volume and the consumer buying behavior. The
study also dwells on opportunities and limitations of sales promotion activities in Nigeria and its
implication for marketing and broad economic policies, using Cadbury Nigeria, Plc, and Kaduna as a
case study. The researcher employed both primary and secondary sources of data collection. The main
instrument of data collection was a consumer opinion survey questionnaire and personnel interview
with the company sales and marketing personnel. A total of 200 hundred questionnaires were
administered and the researcher used Kaduna State selecting the major towns to represent much
broader areas. .After the statistical tests, the first hypothesis was accepted based on the observed
significant correlation of sales promotion activities with the sales per unit of volume. This implies to
some extent that the two variables are dependent. The study was concluded with some
recommendations.
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This article provides us an opportunity to understand the particular topic in depth and which leads to
through to that topic. The researcher has thrown lights on Study of consumer oriented sales
promotion in FMCG sector in which emphasis given to the effect of sales promotion on buying
habits of consumers. To start with the researcher has given brief information regarding FMCG sector
then moving to the main topic they have explained what topic is all about. Promotion is one of the
pillars of marketing mix and same way sales promotion is also one of the elements of promotion.
With respect to consumer oriented sales promotion there are certain theories narrated as operant
conditioning and projective theory. Based on secondary source certain theoretical aspects are also
included as a part of study. Then after concentration is given to the primary research. It includes the
analysis and results of survey which was focuses on consumers behavior towards sales promotion
campaign. The survey was conducted with the help of structured questionnaire. At last conclusion of
report, findings and suggestions was given based on study of secondary source as well as primary
research.
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CHAPTER-3
RESEARCH METHODOLOGY
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RESEARCH METHODOLOGY
Research methodology process includes a number of activities to be performed. These are arranged in
proper sequence of timing for conducting research. One activity after another is performed to
complete the research work. Research methodology includes following steps:
1. Type of Research
The topic for the research study is sales promotion strategy and the nature of the topic is theoretical
and descriptive. So to conduct the research study the type of research suitable is descriptive research
only. The data are collected from customers and with the help of secondary data. The descriptive
research has met the requirement of research study.
4. Sources of Data
For the study purpose both primary and secondary data are used. The primary data are collected from
customers. The secondary data are collected through articles and internet. The primary and secondary
data have been collected to cover every aspect of the study. The primary data are related to behavior
and response of customers. The secondary data shows the theoretical aspects of the project title.
Considering merits and demerits of both sources of data these have been used in combination to meet
the requirements of the research work.
5. Instruments for data collection

For collection of data the instrument been used is Questionnaire. This has been used for collection of
data from respondents. The data have been collected from respondents residing in Mysore. So
according to suitability of instrument for data collection, these data have been used.
4. Research Methods
For collection of primary data for this research work survey and observation methods have been used.
Experimental method is not found suitable for this study because the topic is a theoretical topic and
there is no need to have experiments.
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5. Sampling Detail
Target population: The population for this research study consists of the residence of
Mysore.
Sampling unit: In this study the sampling unit is individual respondent.
Sample size: 100 respondents.
6. Time Duration
The permitted time by the university for completion of research study for Masters degree is six
months. Continuous efforts have been put to work on this research. It has been completed and
submitted within the permitted time period.
7. Research Design
Research design selected for this project is Descriptive.
8. Data collection Method

Primary Data Collection Method
Survey method was used for primary data collection.
Researcher used questionnaire as an instrument for survey method.
Structured questionnaire.
Closed ended type of questionnaire is used.
Secondary Data Collection method
Reference books.
Internet.
Articles
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CHAPTER-4
THEORETICAL ASPECTS OF FMCG
4.1 FMCG CONCEPT

Products which have a quick turnover, and relatively low cost are known as Fast Moving
Consumer Goods (FMCG). FMCG products are those that get replaced within a year. Examples of
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FMCG generally include a wide range of frequently purchased consumer products such as toiletries,
soap, cosmetics, tooth cleaning products, shaving products and detergents, as well as other nondurables such as glassware, bulbs, batteries, paper products, and plastic goods. FMCG may also
include pharmaceuticals, consumer electronics, packaged food products, soft drinks, tissue paper, and
chocolate bars.
Subsets of FMCGs are Fast Moving Consumer Electronics which include innovative
electronic products such as mobile phones, MP3 players, digital cameras, GPS Systems and Laptops.
These are replaced more frequently than other electronic products. White goods in FMCG refer to
household electronic items such as Refrigerators, T.Vs, Music Systems, etc.
4.2 THE FMCG INDUSTRY

The Indian FMCG sector is the fourth largest sector in the economy with a total market size in excess
of US$ 15.1 billion. It has a strong MNC presence and is characterized by a well established
distribution network, intense competition between the organized and unorganized segments and low
operational cost. Availability of key raw materials, cheaper labor costs and presence across the entire
value chain gives India a competitive advantage. The FMCG market is set to treble from US$ 11.6
billion in 2003 to US$ 35.4 billion in 2015. Penetration level as well as per capita consumption in
most product categories like jams, toothpaste, skin care, hair wash etc in India is low indicating the
untapped market potential. Burgeoning Indian population, particularly the middle class and the rural
segments, presents an opportunity to makers of branded products to convert consumers to branded
products. Growth is also likely to come from consumer 'upgrading' in the matured product categories.
With 200 million people expected to shift to processed and packaged food by 2010, India needs
around US$ 28 billion of investment in the food-processing industry. Automatic investment approval
(including foreign technology agreements within specified norms), up to 100 per cent foreign equity
or 100 per cent for NRI and Overseas Corporate Bodies (OCBs) investment, is allowed for most of
the food processing sector.
FMCG industry, alternatively called as CPG (Consumer packaged goods) industry primarily
deals with the production, distribution and marketing of consumer packaged goods. These are
products that have a quick turnover, and relatively low cost. Consumers generally put less thought
into the purchase of FMCG than they do for other products. Though the absolute profit made on
FMCG products is relatively small, they generally sell in large numbers and so the cumulative profit
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on such products can be large. Some of the prime activities of FMCG industry are selling, marketing,
financing, purchasing, etc. The industry also engaged in operations, supply chain, production and
general management. FMCG industry provides a wide range of consumables and accordingly the
amount of money circulated against FMCG products is also very high. The competition among
FMCG manufacturers is also growing and as a result of this, investment in FMCG industry is also
increasing, specifically in India, where FMCG industry is regarded as the fourth largest sector with
total market size of US$15.1 billion. FMCG Sector in India is estimated to grow 60% by 2010.
4.3 FMCG INDUSTRY ECONOMY

FMCG industry provides a wide range of consumables and accordingly the amount of money
circulated against FMCG products is also very high. The competition among FMCG manufacturers is
also growing and as a result of this, investment in FMCG industry is also increasing, specifically in
India, where FMCG industry is regarded as the fourth largest sector with total market size of US$15.1
billion. FMCG Sector in India is estimated to grow 60% by 2010. FMCG industry is regarded as the
largest sector in New Zealand which accounts for 5% of Gross Domestic Product (GDP).
4.4 GROWTH PROSPECTS

With the presence of 14.2% of the world population in the villages of India, the Indian rural FMCG
market is something no one can overlook. Increased focus on farm sector will boost rural incomes,
hence providing better growth prospects to the FMCG companies. Better infrastructure facilities will
improve their supply chain. FMCG sector is also likely to benefit from growing demand in the
market. Because of the low per capita consumption for almost all the products in the country, FMCG
companies have immense possibilities for growth. And if the companies are able to change the
mindset of the consumers, i.e. if they are able to take the consumers to branded products and offer
new generation products, they would be able to generate higher growth in the near future.
It is expected that the rural income will rise in 2007, boosting purchasing power in the
countryside. However, the demand in urban areas would be the key growth driver over the long term.
Also, increase in the urban population, along with increase in income levels and the availability of
new categories, would help the urban areas maintain their position in terms of consumption.
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At present, urban India accounts for 66% of total FMCG consumption, with rural India
accounting for the remaining 34%. However, rural India accounts for more than 40% consumption in
major FMCG categories such as personal care, fabric care, and hot beverages. In urban areas, home
and personal care category, including skin care, household care and feminine hygiene, will keep
growing at relatively attractive rates. Within the foods segment, it is estimated that processed foods,
bakery, and dairy are long-term growth categories in both rural and urban areas.
4.5 COMMON FMCG PRODUCTS

Some common FMCG product categories includes
Food and dairy products

Glassware
Paper products
Pharmaceuticals
Consumer electronics
Packaged food products
Plastic goods
Printing and stationery
Household products
Photography
Drinks etc.
Some of the examples of FMCG products are
Coffee
Tea
Dry cells
Greeting cards
Gifts
Detergents
Tobacco and cigarettes
Watches
Soaps etc.
4.6 MARKET POTENTIALITY OF FMCG INDUSTRY

Some of the merits of FMCG industry, which made this industry as a potential one, are low
operational cost, strong distribution networks, presence of renowned FMCG companies. Population
growth is another factor which is responsible behind the success of this industry.
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4.7 LEADING FMCG COMPANIES

Some of the well known FMCG companies are
Sara lee
Nestl
Reckitt Benckiser
Unilever
Procter & Gamble
Coca-cola
Carlsberg
Kleenex
General Mills
Pepsi
ITC etc.
4.8 CHARACTERISTICS OF FMCG PRODUCTS

Products belonging to the FMCG segment generally have the following characteristics:
They are used at least once a month

They are used directly by the end-consumer
They are non-durable
They are sold in packaged form
They are branded
4.9 FMCG INDUSTRY ANALYSIS
Rivalry among competing firms

In FMCG sector, rivalry among competing firms is very fierce. There are scares customers
because the industry is highly saturated and the competitors try to snatch the market shares. market
players use all sorts of tactics and activities from intensive advertising campaigns to promotional
stuffs price wars etc.Hence the intensively of rivalry is high.
Potential entry of new competitors
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FMCG industry does not have any measures which can control the entry of new
firms. The resistance is very low and the structure of the industry is so complex that new firms can
easily enter and also offer tough competition due to cost effectiveness. Hence potential entry of new
firm is highly viable.
Potential development of substitute products
There are complex and never ending consumer needs and no firm can satisfy all sorts of needs
alone. There are plenty of substitute goods available in the market that can be replaced if the
consumers are not satisfied with one. The wide range of choice and needs give a sufficient room for
new product development that can replace existing goods. This leads to higher consumers
expectation.
Bargaining power of suppliers
The Bargaining power of suppliers of raw materials and intermediate goods is not very high. There
are ample numbers of substitute suppliers available and the raw materials are also readily available
and most of the raw materials are homogeneous. There is no monopoly situation in the supplier side
because the suppliers are also competing among themselves.
Bargaining power of consumers

Bargaining power of consumers is also very high. This is because in FMCG industry the switching
costs of most of the goods is very low and there is no threat of buying one product over other.
Customers are never reluctant to buy or try new things off the shelf.
4.10 INDUSTRY SEGMENTS

The main segments of the FMCG sector are
Personal Care
Personal care includes the followings
Oral care
Hair care
Skin care
Personal wash (soaps)
Cosmetics and toiletries
Deodorants
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Perfumes
Paper products (tissues, diapers, sanitary)
Shoe care.
Household Care
fabric wash (laundry soaps and synthetic detergents);
household cleaners (dish/utensil cleaners, floor cleaners, toilet cleaners, air fresheners,
insecticides and mosquito repellants, metal polish and furniture polish).
Branded and Packaged Food and Beverages
Health beverages
Soft drinks
Staples/cereals
Bakery products (biscuits, bread, cakes);
Snack food
Chocolates
Ice cream
Tea
Coffee
Processed fruits
Vegetables and meat
Dairy products
Bottled water
Branded flour
Branded rice
Branded sugar
Juices etc.
Spirits and Tobacco
4.11 THE TOP 10 COMPANIES IN FMCG SECTOR AS PER 2013 SURVEY
PRESENT RANK
1
2
3
4
5
6
7
8
9
PREVIOUSRANK
1
3
2
N/A
5
N/A
7
6
16
COMPANIES
Procter & Gamble
Unilever
LOreal
LVMH
Kimberly-Clark
Colgate-Palmolive
Johnson & Johnson
Reckitt Benckiser
Nestle HealthCare Nutrition
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Avon
4.12 SWOT ANALYSIS OF FMCG SECTOR

Strengths
Well-established distribution network extending to rural areas.

Strong brands in the FMCG sector.
Low cost operations.
Weaknesses
Low export levels.

Small-scale sector reservations limit ability to invest in technology and achieve
economies of scale.
Several "me-too products.
Opportunities
Large domestic market.

Export potential.
Increasing income levels will result in faster revenue growth.
High consumer goods spending.
Threats
Tax and regulatory structure.
Slowdown in rural demand.
Removal of import restrictions resulting in replacing of domestic brands
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4.13 INDIAN COMPETITIVENESS AND COMPARISON WITH THE WORLD

MARKETS
The following factors make India a competitive player in FMCG sector
Availability of raw materials

Because of the diverse agro-climatic conditions in India, there is a large raw material base suitable for
food processing industries. India is the largest producer of livestock, milk, sugarcane, coconut, spices
and cashew and is the second largest producer of rice, wheat and fruits &vegetables. India also
produces caustic soda and soda ash, which are required for the production of soaps and detergents.
The availability of these raw materials gives India the location advantage.
Labor cost comparison

Low cost labor gives India a competitive advantage. India's labor cost is amongst the lowest in the
world, after China & Indonesia. Low labor costs give the advantage of low cost of production. Many
MNC's have established their plants in India to outsource for domestic and export markets. Presence
across value chain Indian companies have their presence across the value chain of FMCG sector, right
from the supply of raw materials to packaged goods in the food-processing sector. This brings India a
more cost competitive advantage. For example, Amul supplies milk as well as dairy products like
cheese, butter, etc.
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4.14 DISTINGUISHING FEATURES OF INDIAN FMCG BUSINESS

FMCG companies sell their products directly to consumers. Major features that distinguish this sector
from the others include the following
1. Design and Manufacturing

Low Capital Intensity
Most product categories in FMCG require relatively minor investment in plant and machinery and
other fixed assets. Also, the business has low working capital intensity as bulk of sales from
manufacturing take place on a cash basis.
Technology
Basic technology for manufacturing is easily available. Also, technology for most products has been
fairly stable. Modifications and improvements rarely change the basic process.
Third-party Manufacturing
Manufacturing of products by third party vendors is quite common. Benefits associated with third
party manufacturing include
Flexibility in production and inventory planning

Flexibility in controlling labor costs and
Logistics - sometimes its essential to get certain products manufactured near the market.
4. Marketing and Distribution

Marketing function is indispensible in case of FMCG companies. Major features of the marketing
function include the following
High Initial Launch Cost
New products require a large front-ended investment in product development, market research, test
marketing and launch. Creating awareness and develop franchise for a new brand requires enormous
initial expenditure on launch advertisements, free samples and product promotions. Launch costs are
as high as 50-100% of revenue in the first year. For established brands, advertisement expenditure
varies from 5 - 12% depending on the categories. *limited mass media option the challenge
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associated with the launch and building initiatives is that the few number of media option.tv reaches
67% of urban consumers and 35% of rural consumers. Alternatives like wall paintings, theaters,
special packages and consumer promotions becomes an expensive but required actively associated
with the successful FMCG.
Huge distribution network
India is home to six million retail outlets including two million in 5260 towns and four million in
627000 villages. A super market virtually does not exist in India. This makes logistics particularly for
new players extremely difficult. It also makes new product launches difficult since retailers are
reluctant to allocate resources and time to slow moving products.
5. Competition
Significant Presence of Unorganized Sector
Factors that enable small, unorganized players with local presence to flourish include thefollowing
Basic technology for most products is fairly simple and easily available.
The small-scale sector in India enjoys exemption/ lower rates of excise duty, sales tax
etc. This makes them more price competitive vis--vis the organized sector.
A highly scattered market and poor transport infrastructure limits the ability of MNCs
and national players to reach out to remote rural areas and small towns.
Low brand awareness enables local players to market their spurious look-alike brands.
Lower overheads due to limited geography, family management, focused product lines
and minimal expenditure on marketing.
4.15 OUTLOOK
There is a huge growth potential for all the FMCG companies as the per capita consumption of almost
all products in the country is amongst the lowest in the world. Again the demand or prospect could be
increased further if these companies can change the consumer's mindset and offer new generation
products. Earlier, Indian consumers were using non-branded apparel, but today, clothes of different
brands are available and the same consumers are willing to pay more for branded quality clothes. It's
the quality, promotion and innovation of products, which can drive many sectors.
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CHAPTER-5
COMPANY PROFILE
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5.1 BACKGROUND
Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods Company,
touching the lives of two out of three Indians with over 20 distinct categories in Home & Personal
Care Products and Foods & Beverages. They endow the company with a scale of combined volumes
of about 4 million tones and sales of nearly Rs.13718 crores. HUL is also one of the country's largest
exporters; it has been recognized as a Golden Super Star Trading House by the Government of India.
The mission that inspires HUL's over 15,000 employees, including over 1,300 managers, is to "add
vitality to life." HUL meets every day needs for nutrition, hygiene, and personal care with brands that
help people feel good, look good and get more out of life. It is a mission HUL shares with its parent
company, Unilever, which holds 54.10% of the equity. The rest of the shareholding is distributed
among 360,675 individual shareholders and financial institutions.
HUL's brands - like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond's, Sunsilk,
Clinic, Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, Knorr-Annapurna, Kwality Wall's are
household names across the country and span many categories - soaps, detergents, personal products,
tea, coffee, branded staples, ice cream and culinary products. They are manufactured over 37 factories
across India. The operations involve over 2,000 suppliers and associates. HUL's distribution network
comprises of about 2,500 redistribution stockiest, covering 6.3 million retail outlets reaching the
entire urban population, and about 250 million rural consumers.
HUL has traditionally been a company, which incorporates latest technology in all its
operations. The Hindustan Unilever Research Centre (HURC) was set up in 1958, and now has
facilities in Mumbai and Bangalore. HURC and the Global Technology Centers in India have over
200 highly qualified scientists and technologists, many with post-doctoral experience acquired in the
U.S and Europe. HUL believes that an organizations worth is also in the service it renders to the
community. HUL is focusing on health & hygiene education, women empowerment, and water
management. It is also involved in education and rehabilitation of special or underprivileged children,
care for the destitute and HIV-positive, and rural development. HUL has also responded in case of
national calamities / adversities and contributes through various welfare measures, most recent being
the village built by HUL in earthquake affected Gujarat, and relief & rehabilitation after the Tsunami
caused devastation in South India. In 2007, Hindustan Unilever was rated as the most respected
company in India for the past 25 years by Business world, one of Indias leading business magazines.
The rating was based on a compilation of the magazines annual survey of Indias Most Reputed
Companies over the past 25 years. HUL is the market leader in Indian consumer products with
Page43
HUL
presence in over 20 consumer categories such as soaps, tea, detergents and shampoos amongst others
with over 700 million Indian consumers using its products. It has over 35 brands. Sixteen of HULs
brands featured in the ACNielsen Brand Equity list of 100 Most Trusted Brands Annual Survey
(2008).
According to Brand Equity, HUL has the largest number of brands in the Most Trusted Brands
List. Its a company that has consistently had the largest number of brands in the Top 50 and in the
Top 10 (with 4 brands). Hindustan Unilever's distribution covers over 1 million retails outlets across
India directly and its products are available in over 6.3 million outlets in India, i.e., nearly 80% of the
retail outlets in India. It has 39 factories in the country. Two out of three Indians use the companys
products and HUL products have the largest consumer reach being available in over 80 per cent of
consumer homes across India.
5.2 PRODUCT PORTFOLIO
Home and Personal Care

Personal Wash
Lux
Lifebuoy
Liril
Hamam
Breeze
Dove
Pears
Rexona
Laundry
Surf Excel
Rin
Wheel
Hair Care
Sunsilk
Clinic Plus
Skin Care
Fair & Lovely
Ponds
Vaseline
Aviance
Oral Care
Page44

Pepsodent
Close Up
Deodorants
Axe
Rexona
Color Cosmetics
Lakme
Ayurvedic Personal and Health Care
Ayush
Food
Tea
Brooke Bond
Lipton
Coffee
Brooke Bond
Bru
Foods
Kissan
Annapurna
Knoor
Ice Cream
Kwality Walls
5.3 BCG Matrix for Hindustan Unilever Limited
Page45
HUL
HUL
Stars
It is the first column in the matrix suggests that it is a High Growth Industry and likewise it
has a High Market Share. In this category following appears from the HUL brand:
Axe
Vim
Lakmie
Wheel
Surf excel
Lifebuoy
Kissan
Jam,
Kwallitywalls
,knorsoup
Ponds
Fair & Lovely
Lux
Cash Cow
Page46
HUL
It is the second column which states that there is High Market Share and Low growth Industry. In
this category following appears:
Clinic plus
Sunsilk
Red label
Vaseline
Dog
It is the third column which states that it has a Low Market Share and it is Low Growth
Industry. Following appears in this category
Taaza
Brooke bond
Bru
Question Mark
It is the fourth column, which states that it has a Low Market Share and a High Growth
Industry. Following appears in this category:
Close up
Pepsodent
Domex
Breeze
Fair & lovely mens active
Tajmahal tea bags
Kissan ketchup
Knor meal maker
Rin
5.4 SWOT Analysis of Hindustan Unilever Limited
Strengths
Strong company image

Strong brand portfolio
Success of the slogan
Page47
Quantity & variety

Effective & attractive packaging
High quality man power
Solid base of the company
Innovative aspects
Corporate behavior
Health & personal care products
Help people getting more out of life
Weaknesses
High prices of products

Substitutes products
Policy of spending for the social responsibility
Lack of control in the market
Dual leadership
Decrease in revenues
Reduced spending for research & development
Opportunities
Changing life style of people

New markets
Increase the volume of production
Focus on R&D
Low income consumers
Help in improving people diet & daily lives
Threats
Competitors(P&G,)
Political effects
Legislative effect
Environmental effect
Economic crises
Obstacle faced
Change in life style of people
Chance for price war
Increase in production & labor cost.
Page48
HUL
CHAPTER-6
DATA ANALYSIS AND INTERPRETATION
Page49
HUL
HUL
Table 6.1 shows the gender of the respondents
GENDER
Particulars
Frequency
Percent
Male
59
59
Female
41
41
Total
100
100
Source: Field Survey
Page50
HUL
GENDER
41%
59%
Male
Female
INTERPRETATION
Out of 100 respondents 59 (59%) respondents are male and 41 (41%) respondents are female.
Majority of the respondents are male and they perceive HUL products when compared to females.
Table 6.2shows the age of the respondents
AGE
Particulars
Frequency
Percent
Below 20years
21-25years
26-30years
Above 30years
Total
6
51
20
23
100
6
51
20
23
100
Page51
HUL
AGE
23%
6%
Below 20years
21-25years
20%
51%
26-30years
Above 30years
INTERPRETATION
Out of 100 respondents 51 (51%) respondents belongs to the age group of 21-25 years, 23 (23%)
respondents belongs to the age group of above 30 years, 20 (20%) respondents belongs to the age
group of 26-30 years and 6 (6%) respondents belongs to the age group of below 20 years. Majority of
the respondents are youths.
Page52
HUL
Table 6.3shows the marital status of the respondents
MARITAL STATUS
Particulars
Frequency
Percent
Married
53
53
Unmarried
47
47
Total
100
100
MARITAL STATUS
47%
53%
Married
Unmarried
INTERPRETATION
Out of 100 respondents 53 (53%) respondents are married and 47(47%) respondents are unmarried.
Majority of the respondents are married. This shows that majority of the respondents using HUL
products are married ones hence the company has to concentrate more on their perceptions.
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HUL
Table 6.4shows the qualificationof the respondents
EDUCATION
Particulars
Frequency
Percent
School level
Puc level
Diploma or graduation level
Pg level
Professionals
Total
19
14
18
43
6
100
19
14
18
43
6
100
EDUCATION
6%
School level
19%
Puc level
14%
43%
Diplomo or Graduation level

Pg level
18%
Professionals
INTERPRETATION
Out of 100 respondents 43(43%) respondents have completed pg level, 19 (19%) respondents have
completed school level, 18(18%) respondents have completed degree, 14(14%) respondents have
completed puclevel and 6 (6%) respondents are professionals. Majority of the respondents are well
qualified.
Table 6.5shows the occupation of the respondents

Page54
HUL
OCCUPATION
Particulars
Frequency
Percent
Private
Government
Self employed
Student
Others
Total
28
22
7
40
3
100
28
22
7
40
3
100
OCCUPATION
3%
28%
private
government
40%
self employed
7%
22%
student
others
INTERPRETATION
Out of 100 respondents 40(40%) respondents are students, 28(28%) respondents belongs to private
sectors, 22(22%) respondents belongs to government sector, 7(7%) respondents are self employed and
3(3%) respondents belongs to other occupation. Hence majority of the respondents taken for survey
are employed (60%) and only few respondents are students.
Table 6.6shows the income of the respondents
INCOME
Page55
HUL
Particulars
Frequency
Percent
Below 10000pm
37
37
10000-15000pm
28
28
15000-20000pm
27
27
Above 20000pm
Total
100
100
Frequency
Below 10000pm
10000-15000pm
Above 20000pm
Total
15000-20000pm
19%
50%
14%
4%
14%
INTERPRETATION
Out of 100 respondents 37(37%) respondents monthly income are below 5000 rupees, 28(28%)
respondents monthly income ranges between 5000-10000 rupees, 27(27%) respondents monthly
income ranges between 10000-15000 rupees and 8(8%) respondents monthly income are above 15000
rupees. As per this survey majority of the respondents monthly income falls below 5000 rupees. This
shows that most of the respondents belong to middle income group.
Table 6.7shows the data that has been taken from the customers to know their believes
in brand name
Page56
HUL
BELIEF IN BRAND NAME

Particulars
Frequency
Percent
Yes
97
97
No
Total
100
100
BELIEF IN BRAND NAME
3%
yes
no
97%
INTERPRETATION
Out of 100 respondents 97(97%) respondents believes in brand name and 3(3%) respondents does not
believes in brand name. Majority of the respondents believes in brand name by this we can say that
most of the respondents are aware of HUL products.
Table 6.8depicts how frequently the consumers patronize HUL food brands
FREQUENTLY PATRONISING HUL PRODUCTS

Page57
HUL
(I) FOOD BRANDS

Frequency
Percent
16
28
39
17
100
16
28
39
17
100
Kissan
Annapurna
Bru
Brooke Brond
Total
FOOD BRANDS
17%
16%
kissan
annapurna
bru
brooke brond
28%
39%
INTERPRETATION
Out of 100 respondents 39(39%) respondents patronize Bru frequently, 28(28%) respondents
patronize Annapurna frequently, 17(17%) respondents patronize BrookeBrond frequently and
16(16%) respondents patronize Kissan frequently. As per this survey every respondents are
patronizing HUL food brands frequently, among them bru is most patronized one.
Table 6.9depicts how frequently the consumers patronize HUL soaps
(II) SOAPS
Page58

Particulars
None of these
Lux
Lifebuoy
Dove
Pears
Total
Frequency
7
13
38
30
12
100
HUL
Percent
7
13
38
30
12
100
SOAPS
12%
7%
13%
none of these
lux
lifebuoy
dove
30%
pears
38%
INTERPRETATION
Out of 100 respondents 38(38%) respondents patronize lifebuoy frequently, 30(30%) respondents
patronize dove frequently, 13(13%) respondents patronize lux frequently, 12(12%) respondents
patronize pears frequently and 38(38%) respondents patronize none of them.As per this survey every
respondents except 7(7%) respondents are patronizing HUL soaps frequently, among them lifebuoy is
most patronized one.
Table 6.10depicts how frequently the consumers patronize HUL shampoos
(III) SHAMPOOS
Particulars
Frequency
Page59
Percent
HUL
None of these
Sunsilk
28
28
Clinic plus
Dove
33
33
All clear
31
31
Total
100
100
SHAMPOOS
2%
31%
28%
none of these
sunsilk
clinic plus
dove
all clear
6%
33%
INTERPRETATION
Out of 100 respondents 33(33%) respondents patronize dove frequently, 31(31%) respondents
patronize all clear frequently, 28(28%) respondents patronize sunsilk frequently , 6(6%) respondents
patronize clinic plus frequently and 2(2%) respondents patronize none of them.As per this survey
every respondents except 2(2%) respondents are patronizing HUL shampoos frequently, among them
dove is most patronized one.
Table 6.11depicts how frequently the consumers patronize HUL cosmetics
(IV) COSMETICS
Page60
HUL
Particulars
Frequency
Percent
None of these
Lakme
Ponds
Fair and lovely
Vaseline
Total
11
26
18
23
22
100
11
26
18
23
22
100
COSMETICS
11%
22%
none of these
lakme
26%
ponds
fair and lovely
vaseline
23%
18%
INTERPRETATION
Out of 100 respondents 26(26%) respondents patronize lakme frequently, 23(23%) respondents
patronize fair & lovely frequently, 22(22%) respondents patronize Vaseline frequently, 18(18%)
respondents patronize ponds frequently and11(11%) respondents patronize none of them. As per this
survey every respondents except 11(11%) respondents are patronizing HULcosmetics frequently,
among them lakmeis most patronized one.
Table 6.12depicts how frequently the consumers patronize HUL perfume
(V) PERFUME
Page61
HUL
Particulars
Frequency
Percent
None of these
18
18
Axe
50
50
Rexona
14
14
Dove
18
18
Total
100
100
PERFUME
18%
18%
none of these
axe
rexona
14%
dove
50%
INTERPRETATION
Out of 100 respondents 50(50%) respondents patronize axe frequently, 18(18%) respondents
patronize dove frequently, 18(18%) respondents patronize none of them and 14(14%) respondents
patronize rexona frequently. As per this survey every respondents except 18(18%) respondents are
patronizing HUL perfumes frequently, among them axe is most patronized one.
Table 6.13depicts the factors influencing buying decision of the respondents
FACTORS INFLUENCING BUYING DECISION
Page62
HUL
Particulars
Frequency
Percent
Price
Quality
45
45
Brand
Publicity
41
41
Total
100
100
FACTORS INFLUENCING BUYING DECISION
9%
price
41%
quality
45%
brand
publicity
5%
INTERPRETATION
Out of 100 respondents 45(45%) respondents says quality influence their buying decision, 41(41%)
respondents says publicity influence their buying decision, 9(9%) respondents says price influence
their buying decision and 5(5%) respondents says brand influence their buyingdecision. Majority of
the respondents says that the quality influence their buying decision hence the company has to give
more importance to the quality.
Table 6.14depicts whether the respondents are always aware when HUL is promoting
their products
Page63
HUL
PROMOTION AWARENESS
Particulars
Frequency
Percent
Yes
69
69
No
31
31
Total
100
100
PROMOTIONAL AWARENESS
31%
yes
69%
no
INTERPRETATION
Out of 100 respondents 69(69%) respondents are aware of promotional strategies of HUL and
31(31%) respondents are not aware of promotional strategies of HUL. Majority of the respondents are
always aware of promotional strategies of HUL. This says that most of the respondents are aware
whenever the company is conducting promotional strategies.
Table 6.15depicts the media through which company is conducting sales promotion
Page64
HUL
MEDIA THROUGH WHICH COMPANY IS CONDUCTING SALES

PROMOTION
Particulars
Television
Newspaper
Magazine
Posters
Point of purchase display
Total
Frequency
90
2
2
1
5
100
Percent
90
2
2
1
5
100

MEDIUM OF COMMUNICATION
2%
2%
1%
5%
television
newspaper
magazine
posters
90%
point of purchase display
INTERPRETATION
Out of 100 respondents 90(90%) respondents feels television as the best media for conducting sales
promotion, 5(5%) respondents feels point of purchase as the best media for conducting sales
promotion, 2(2%) respondents feels newspaper as the best media for conducting sales promotion,
2(2%) respondents feels magazine as the best media for conducting sales promotion and 1(1%)
respondents feels posters as the best media for conducting sales promotion. Majority of the
respondents feel television as the best media for conducting sales promotion hence the company must
treat television as the basic media for conducting sales promotion.
Table 6.16depicts whether the benefits of sales promotion scheme reach customers properly
Page65
HUL
DO THE BENIFITS OF SALES PROMOTION SCHEME REACH

CUSTOMERS PROPERLY
Particulars
Frequency
Percent
Always
17
17
Often
22
22
Sometimes
52
52
Rarely
Total
100
100

BENIFICIARIES
9%
17%
always
22%
52%
often
sometimes
rarely
INTERPRETATION
Out of 100 respondents 52(52%) respondents are sometimes benefited out of sales promotion
schemes, 22(22%) respondents are often benefited out of sales promotion schemes, 17(17%)
respondents are always benefited out of sales promotion schemes and 9(9%) respondents are rarely
benefited out of sales promotion schemes. As per the survey been conducted states that most of the
respondents are not benefited out of sales promotion schemes hence the company must treat this as a
serious issue and must work on it.
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HUL
Table 6.17depicts whether the sales promotion activities change respondents attitude towards
products
DO SALES PROMOTION ACTIVITES CHANGE ATTITUDE

TOWARDS PRODUCTS
Particulars
Frequency
Percent
Very often
51
51
Not often
43
43
Never
Total
100
100

CHANGES IN ATTITUDE
6%
51%
43%
very often
not often
never
INTERPRETATION
Out of 100 respondents 51(51%) respondents feels that sales promotion activities very often change
attitude towards products, 43(43%) respondents feels that sales promotion activities not often change
attitude towards products and 6(6%) respondents feels that sales promotion activities never change
attitude towards products. Majority of the respondents feels that sales promotion activities very often
change their attitude towards products so the company has to increase the sales promotion activities.
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HUL
Table 6.18depicts more effective sales promotion as per respondents view
MORE EFFECTIVE SALES PROMOTION

Particulars
Frequency
Percent
Free gift
25
25
Price off
17
17
Buy one get one free
54
54
Others
Total
100
100
EFFECTIVE SALES PROMOTION
4%
25%
free gift
price of
54%
17%
buy one get one free

others
INTERPRETATION
Out of 100 respondents 54(54%) respondents feels buy one get one free as more effective sales
promotion, 25(25%) respondents feels free gift as more effective sales promotion, 17(17%)
respondents feels price off as more effective sales promotion and 4(4%) respondents feels others as
more effective sales promotion. Majority of the respondents feels buy one get one free as more
effective sales promotion so the company has to increase such kinds of offers.
Table 6.19depicts the shopping pleasure of the respondents during sales promotion offers
Page68
HUL
SHOPPING PLEASURE DURING SALES PROMOTION OFFERS

Particulars
Frequency
Percent
Yes
93
93
No
Total
100
100
SHOPPING PLEASURE
7%
yes
no
93%
INTERPRETATION
Out of 100 respondents 93(93%) respondents feels pleasure while shopping during sales promotion
offers and 7(7%) respondents do not feels pleasure while shopping during sales promotion offers.
Majority of the respondents feels pleasure while shopping during sales promotion offers so the
company has to provide more sales promotion offers to retain the customers.
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HUL
Table 6.20depicts on what point advertiser mainly focus in his message
ON WHAT POINT ADVERTISER MAINLY FOCUS IN HIS

MESSAGE
Particulars
Frequency
Percent
Detailed information
Functions or benefits of the product
Price
Comparison with other products
Others
Total
19
34
14
29
4
100
19
34
14
29
4
100

ADVERTISER FOCUS
4%
detailed information
19%
29%
functions or benifits of the

product
price
14%
34%
comparison with other

products
others
INTERPRETATION
Out of 100 respondents 34(34%) respondents feels that theadvertiser mainly focus on functions or
benefits of the product in his message, 29(29%) respondents feels that the advertiser mainly focus on
comparison with other products in his message, 19(19%) respondents feels that the advertiser mainly
focus on detailed information in his message, 14(14%) respondents feels that the advertiser mainly
focus on price in his message and 4(4%) respondents feels that the advertiser mainly focus on other
things in his message. Majority of the respondents feels that the advertiser mainly focuses on
functions or benefits of the product in his message.
Table 6.21depicts the effective media to communicate the consumers
Page70
HUL
EFFECTIVE MEDIA TO COMMUNICATE THE CONSUMERS

Particulars
Frequency
Percent
Television
69
69
Newspaper
All the above
30
30
Total
100
100
EFFECTIVE MEDIA TO COMMUNICATE
30%
television
newspaper
1%
69%
all the above
INTERPRETATION
Out of 100 respondents 69(69%) respondents perceive television as effective media to communicate,
30(30%) respondents perceive television,newspaper, radio as effective media to communicate and
1(1%) respondents perceive newspaper as effective media to communicate. Majority of the
respondents perceive television as effective media to communicate so the company has to give more
importance towards that medium of communication.
Table 6.22depicts the objectives of sales promotion schemes
Page71
HUL
OBJECTIVES OF SALES PROMOTION SCHEMES

Particulars
Frequency
Percent
To increase sales
58
58
To neutralize competition effect
To push sales in off season
16
16
To increase sales of product out of demand
17
17
Total
100
100
OBJECTIVE
to increase sales
17%
16%
58%
9%
to neutralise competition
efect
to push sales in of season
to increase sales of product
out of demand
INTERPRETATION
Out of 100 respondents 58(58%) respondents feels that the objectives of sales promotion schemes is
to increase sales, 17(17%) respondents feels that the objectives of sales promotion schemes is to
increase sales of product out of demand, 16(16%) respondents feels that the objectives of sales
promotion schemes is to push sales in off season and 9(9%) respondents feels that the objectives of
sales promotion schemes is to neutralize competition effect. Majority of the respondents feels that the
objectives of sales promotion schemes are to increase sales.
Table 6.23depicts the opinion of respondents about hul products
Page72
HUL
OPINION ABOUT HUL PRODUCTS

Particulars
Frequency
Percent
Average
21
21
Good
62
62
Excellent
17
17
Total
100
100
OPINION ON HUL PRODUCTS
17%
21%
average
good
excellent
62%
INTERPRETATION
Out of 100 respondents 62(62%) respondents perceive HUL products as good, 21(21%) respondents
perceive HUL products as average and 17(17%) respondents perceive HUL products as excellent.
Majority of the respondents perceive HUL products as good so the company must work hard to turn it
as excellent.
Table 6.24depicts the opinion of respondents on pricing strategy
Page73
HUL
OPINION ON PRICING STRATERGY

Particulars
Frequency
Percent
Reasonable
38
38
Competitive
62
62
Total
100
100
OPINION ON PRICING STRATERGY
38%
reasonable
competitive
62%
INTERPRETATION
Out of 100 respondents 62(62%) respondents feels HUL pricing strategy as competitive and
38(38%) respondents feels HUL pricing strategy as reasonable. Majority of the respondents feels
HUL pricing strategy as competitive so the company has to make its price as reasonable.
Table 6.25depicts the opinion of respondents on opinion on advertising strategy
Page74
HUL
OPINION ON ADVERTISING STRATERGY

Particulars
Frequency
Percent
Average
13
13
Good
85
85
Excellent
Total
100
100
OPINION ON ADVERTISING STRATEGY
2%
13%
average
good
excellent
85%
INTERPRETATION
Out of 100 respondents 85(85%) respondents feels HUL advertising strategy as good, 13(13%)
respondents feels HUL advertising strategy as average and 2(2%) respondents feels HUL advertising
strategy as excellent. Majority of the respondents says as good, further the company must try to come
out with new and innovative advertisements.
Page75
HUL
Table4.26depicts whether the respondents like to influence their friends and relatives to buy HUL
products
WOULD YOU LIKE TO INFLUENCE YOUR FRIENDS AND

RELATIVES TO BUY HUL PRODUCTS
Particulars
Frequency
Percent
Yes
96
96
No
Total
100
100
WILLING TO INFLUENCE FRIENDS AND RELATIVES
4%
yes
no
96%
INTERPRETATION
Out of 100 respondents 96(96%) respondentslikes to influence their friends and relatives to buy HUL
products and 4(4%) respondents do not like to influence their friends and relatives to buy HUL
products. Here majority of the respondents are willing to influence their friends and relatives to buy
HUL products and this shows how the company has withstand over the market.
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HUL
Table 6.27depicts how the respondents have rated the quality of HUL products
RATING THE FEATURES OF HUL PRODUCTS

(I) QUALITY RATING
Particulars
Frequency
Percent
Excellent
25
25
Good
75
75
Total
100
100
QUALITY
25%
excellent
good
75%
INTERPRETATION
Out of 100 respondents 75(75%) respondents rates the quality as good and 25(25%) respondents rates
the quality is excellent. That is majority of the respondents feel that the company is providing quality
goods.
Page77
HUL
Table 6.28depicts how the respondents have rated the price of HUL products
(II) PRICE RATING

Particulars
Frequency
Percent
Excellent
Good
57
57
Average
39
39
Total
100
100
PRICE
4%
excellent
39%
good
average
57%
INTERPRETATION
Out of 100 respondents 57(57%) respondents rates price as good, 39(39%) respondents rates price as
average and 4(4%) respondents rates price as excellent. Majority of the respondents perceive the price
of the HUL product as reasonable.
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HUL
Table 6.29depicts how the respondents have rated the packaging of HUL products
(III) PACKAGE RATING

Particulars
Frequency
Percent
Excellent
26
26
Good
61
61
Average
10
10
Poor
Total
100
100
PACKAGE
10%
3%
26%
excellent
good
average
poor
61%
INTERPRETATION
Out of 100 respondents 61(61%) respondents rates package as good, 26(26%) respondents rates
package as excellent, 10(10%) respondents rates package as average and 3(3%) respondents rates
package as poor. That is majority of the respondents are satisfied with the companies packaging.
Table 6.30depicts how the respondents have rated the advertisement of HUL products
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HUL
(IV) ADVERTISMENT RATING

Particulars
Frequency
Percent
Excellent
20
20
Good
67
67
Average
13
13
Total
100
100
ADVERTISMENT
13%
20%
excellent
good
average
67%
INTERPRETATION
Out of 100 respondents 67(67%) respondents rates advertisement as good, 20(20%) respondents rates
advertisement as excellent and 13(13%) respondents rates advertisement asaverage. Majority of the
respondents are satisfied with the HUL advertising strategy.
Table 6.31depicts how the respondents have rated the fragrance of HUL products
Page80
HUL
(V)FRAGRANCE RATING
Particulars
Frequency
Percent
Excellent
27
27
Good
40
40
Average
31
31
Poor
Total
100
100
FRAGRANCE
2%
27%
excellent
31%
good
average
poor
40%
INTERPRETATION
Out of 100 respondents 40(40%) respondents rates fragrance as good, 31(31%) respondents rates
fragrance as average, 27(27%) respondents rates fragrance as excellent and 2(2%) respondents rates
fragrance as poor. Majority of the respondents are happy with the fragrance of HUL products.
Table 6.32depicts whether the respondents always buy same brand
Page81
HUL
DO YOU ALWAYS BUY SAME BRAND

Particulars
Frequency
Percent
Yes
69
69
No
31
31
Total
100
100
BUYING SAME BRAND
31%
yes
no
69%
INTERPRETATION
Out of 100 respondents 69(69%) respondents always buy the same brand and 31(31%) respondents do
not buy the same brand. This survey reveals that majority of the respondents are stick on to HUL
brand.
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HUL
Table 6.33depicts whether the respondents switch over if attractive promotion offers are offered other
than their choice
IF ATTRACTIVE PROMOTION OFFERS ARE OFFERED OTHER

THAN YOUR CHOICE WILL YOU SWITCH OVER
Particulars
Frequency
Percent
Yes
70
70
No
30
30
Total
100
100
SWITCH OVER
30%
yes
no
70%
INTERPRETATION
Out of 100 respondents 70(70%) respondents switch over if attractive promotion offers are offered
other than their choice and 28(28%) respondents will not switch over if attractive promotion offers
are offered other than their choice. This survey states that majority of the respondents switch over if
attractive promotion offers are offered so the company must be always be aware of other companies
sales promotion strategies and must frequently add up new offers in the mean while.
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Table 6.34depicts respondentsreasons for switch over
REASON FOR SWITCH OVER

Particulars
Frequency
Percent
No
Cost
Quality
Satisfaction
Seasonal change
More benefits
Total
30
4
23
12
18
13
100
30
4
23
12
18
13
100

REASONS FOR SWITCH OVER
13%
30%
18%
no
cost
quality
4%
12%
23%
satisfaction
seasonal change
more benifits
INTERPRETATION
Out of 100 respondents 30(30%) respondents says that they will not switch over ,23(23%)
respondents says that they switch over due to quality, 18(18%) respondents says that they switch over
due to seasonal change, 13(13%) respondents says that they switch over due to more benefits,
12(12%) respondents says that they switch over due to satisfaction and 4(4%) respondents says that
they switch over due to cost. This survey shows that most of the respondents will switch over either
for one or the other reasons so the company must make its sincere effort to overcome its loop wholes.
Table 6.35depicts whether during sales promotion do the respondentspurchase more than what
required
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DURING SALES PROMOTION DO YOU PURCHASE MORE THAN

WHAT REQUIRED
Particulars
Frequency
Percent
Yes
33
33
No
25
25
Sometimes
42
42
Total
100
100
MORE QUANTITY OF PURCHASE
33%
42%
yes
no
sometimes
25%
INTERPRETATION
Out of 100 respondents 42(42%) respondents says that sometimes they will purchase more than what
required during sales promotion , 33(33%) respondents says that they will purchase more than what
required during sales promotion and 25(25%) respondents says that they will not purchase more than
what required during sales promotion. Here majority of the respondents purchasing plans mainly
depends on sales promotion so the company has to make its sales promotion strategies more effective
which in turn will induce the customers buying decisions.
Table 6.36depicts whether the respondents wait for offers from retail malls
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DO YOU WAIT FOR OFFERS FROM RETAIL MALLS?

Particulars
Frequency
Percent
Yes
18
18
No
29
29
Sometimes
53
53
Total
100
100
WAITING FOR OFFERS
18%
yes
53%
29%
no
sometimes
INTERPRETATION
Out of 100 respondents 53(53%) respondents sometimes wait for offers from retail malls, 29(29%)
respondents will not wait for offers from retail malls and 18(18%) respondents wait for offers from
retail malls. So most of the respondents waits for offers from retail malls hence the companies must
stretch its sales promotion strategies to retail malls too.
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Table 6.37depictsthebest retail mall offering sales promotion tools as per respondents view
BEST RETAIL MALL OFFERING SALES PROMOTION TOOLS

Particulars
Frequency
Percent
Big bazaar
Easy day
More mega store
Reliance mart
Others
Total
40
11
23
16
10
100
40
11
23
16
10
100

BEST RETAIL MALL
10%
16%
40%
big bazaar
easy day
more mega store
23%
reliance mart
11%
ohers
INTERPRETATION
Out of 100 respondents 40(40%) respondents ranks big bazaar asbest retail mall in offering sales
promotion tools, 23(23%) respondents ranks more mega store as best retail mall in offering sales
promotion tools, 16(16%) respondents ranks reliance mart as best retail mall in offering sales
promotion tools, 11(11%) respondents ranks easy day as best retail mall in offering sales promotion
tools and 10(10%) respondents ranks others as best retail mall in offering sales promotion tools.
Majority of the respondents ranks big bazaar as best retail mall in offering sales promotion tools.
Hence forth the company can easily promote its product using big bazaar.
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CHAPTER-7
FINDINGS, SUGGESTIONS AND CONCLUSION
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HUL
FINDINGS
Majority of the respondents belongs to the age group of 21-25 years

Majority of the respondents are male
Majority of the respondents are married
Majority of the respondents have completed pg level
Majority of the respondents are students
Majority of the respondents monthly income are below 10000 rupees
Majority of the respondents believes in brand name
Majority of the respondents patronize Bru frequently
Majority of the respondents patronize lifebuoy frequently
Majority of the respondents patronize lakme frequently
Majority of the respondents patronize axe frequently
Majority of the respondents says quality influence their buying decision
Majority of the respondents are aware of promotional strategies of HUL
Majority of the respondents feels television as the best media for conducting sales promotion
Majority of the respondents are sometimes benefited out of sales promotion schemes
Majority of the respondents feels that sales promotion activities very often change attitude
towards products
Majority of the respondents feels buy one get one free as more effective sales promotion
Majority of the respondents feels pleasure while shopping during sales promotion offers
Majority of the respondents feels that the advertiser mainly focuses on functions or benefits
of the product in his message

Majority of the respondents perceive television as effective media to communicate
Majority of the respondents feels that the objectives of sales promotion schemes is to increase
sales
Majority of the respondents perceive HUL products as good
Majority of the respondents feels HUL pricing strategy as competitive
Majority of the respondents feels HUL advertising strategy as good
Majority of the respondents likes to influence their friends and relatives to buy HUL products
Majority of the respondents rates the quality as good
Majority of the respondents rates price as good
Majority of the respondents rates package as good
Majority of the respondents rates advertisement as good
Majority of the respondents rates fragrance as good
Majority of the respondents always buy the same brand
Majority of the respondents switch over if attractive promotion offers are offered other than
their choice
Majority of the respondents says that they will not switch over
Majority of the respondents says that sometimes they will purchase more than what required
during sales promotion
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Majority of the respondents sometimes wait for offers from retail malls
Majority of the respondents ranks big bazaar as best retail mall in offering sales promotion
tools
SUGGESTIONS
On the basis of the above findings these can be some suggestions for Hindustan Unilever
Limited
Hindustan Unilever Limited should launch new products and should expand their distribution
network.
Hindustan Unilever Limited will have to consistently widen its portfolio with new benefits,
variants and formats to cater to affluent people who have the propensity to spend.
As per the survey that has been conducted for the study we have found out that people likes to
shop during sales promotion offers, so the company should offer attractive offers to the
retailers to capture the greatest shelf space.
The company has to come out with more attractive and innovative offers to sustain in market.
This is because most of the respondents say that they will switch over to other brands if
attractive promotion offers are offered.
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The company has to give its attention towards pricing strategy because majority of the
respondents feels its competitive.
The company should use television as the basic media to communicate customers because as
per this survey we found that majority of the respondents feels television as the best media of
communication.
EMERGING TRENDS
So far as FMCG market is concern there is new trend is emerging known as Joint sales promotion.
Actually it is old concept but it was more prevailing in durable products now it is coming into non
durable goods also. When any sales promotion scheme either for trade or consumer is announced by
more than one company and /or more than one brand of the same company, it is referred as joint sales
promotion or horizontal co-operative sales promotion or cross promotion or umbrella sales promotion.
Classification of joint sales promotion
Use complementarily due to natural use

New use catering complementary relationships
Commonality of need due to use time
Tie-up of a new /slow moving brand with an established brand
Target market commonality
Seasonal demand
Distribution commonality
Targeting new segment
Derived demand
Countering competitive joint sales promotions
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CONCLUSION
Consumer goods are those goods that are used widely by the consumers in their day to day
life. So a major task is to make these products available to the consumers .The study was on
the analysis of FMCG giant focusing upon the sales promotion awareness of the consumers.
Under the project a study was done by taking the leading FMCG Company working in India.
The company was Hindustan Unilever Limited. The company have a wide portfolio of
products.. Hindustan Unilever Limited is the number one company in India in FMCG
category. It has a presence in laundry, skin care, hair care and oral care.
The study was focused on Food brands, Soaps, Shampoos, Cosmetics and perfumecategories,.
Further the study moves around the consumption patterns of the consumers, the type of
products they are using, advertising, quality, price and packaging strategy of the company,
awareness of companies sales promotion schemes ,to determine their satisfaction levels.
To conclude HUL is one of the leading FMCG Company and its products are reaching every
customer through its effective sales promotional strategies.
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BIBLIOGRAPHY
ARTICLES AND JOURNALS
Effectiveness Of Sales Promotion In Fmcg Retail Stores In Coimbatore City by Sathish,

M.; Naachimuthu, K. P. - Published on August 2011 - Source: Global Management Review;
2011, Vol. 5 Issue 4, P84 - Source Type: Academic Journal
The Impact Of Sales Promotion On Organization Effectiveness In Nigerian

Manufacturing Industry - Universal Journal of Marketing and Business Research (ISSN:
2315-5000) Vol. 1(4) pp. 123-131, October, 2012
BOOKS
Business Research Methods byWilliams G Zikmund 8th edition.
Marketing Management by Philip Kotler (pgno.185-187) 12th edition.
Principles of Marketing by Philip Kotler and Armstrong (pgno.142-144).
Page93
HUL
WEB SITES
www.google.com
www.hul.com
www.scribd.com
www.hul.com
ANNEXURE
Name:
Age:
above
a) Below 20yrs
Gender:
b) 21-25yrs
c) 26-30yrs
d) 31yrs and
a) Male b) Female
Marital status:
a) Married
Education:
d) pg level
a) school level
e) Professionals
f) Others
Occupation:
e) others
a) private
Income:
15000
b) Unmarried
b) puc level
b) government
c) diploma / graduate level
c) self employed
d) students
a) below 5000 b) 5000-10000 c) 10000-15000 d) above
1. Do you believe in brand name?

a) Yes
b) no
2. Which of the HUL products do you frequently or particularly patronize?

FOOD
BRANDS
Kissan
Annapurna
Bru
Brooke Bond
SOAPS
SHAMPOOS
COSMETICS
PERFUME
Lux
Lifebuoy
Dove
Pears
Sun silk
Clinic Plus
Dove
All Clear
Lakme
Ponds
Fair & Lovely
Vaseline
Axe
Rexona
Dove
3. What influence you for buying decision of the products marked above?
a) Price b)quality c)brand d)publicity d)all the above
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HUL
4. Are you always aware when HUL is promoting their products?

a) Yes b)no
5. Through which media do you normally know that the company is
conducting sales promotion?
a) Television
of purchase display
b) Radio
c) Newspaper
d) Magazine
e) Posters
f) Point
6. Do the benefits of sales promotion schemes reach to you properly?

a) Always b)often c)sometimes d)rarely e)never
7. Do sales promotion activities change your attitudes towards their products?
a) Very often b)not often c)never
8. What type of sales promotion do you consider more effective?
a) Free gift b)cash prize c)price off d)buy one get one free
e)others
9. Do you enjoy shopping during sales promotion offers?

a) Yes b)no
10.
On which point does the advertiser give focus mainly in this message?
a) Detailed information b)functions/benefits of the product c)price
d)availability
e) Comparison with other products
f) others
11.
Which medium of advertising is more effective to communicate the
consumers as per your perception?
a) Television b)radio c)newspaper d)all the above
12.
According to you what is the objective of the company to launch sales
promotion schemes?
a) To increase sales b)to neutralize competition effect c)to push sales in
off-season
d) To increase sales of product out of demand
13.
What is your opinion about HUL products?

a) Poor b)average c)good d)excellent
14.
Your opinion on overall pricing strategy of HUL products?

a) Comparatively low b)reasonable c)competitive d) Comparatively high
Page95

15.
HUL
What is your opinion on the advertising strategy of HUL?

a) Poor
b) average
c) good
d) excellent
16.
Would you like to influence your friends and relatives to buy HUL
products?
a) Yes b)no
17.
Rate the following features of HUL products
PARTICULARS EXCELLENT
Quality
Price
Package
Advertisement
Fragrance
18.
GOOD
AVERAGE
POOR
Do you always buy the same brand?

a) Yes b)no
19.
If you get an attractive promotion offers in the product other than of your
choice, will you switch over?
a) Yes
b) no
If yes, for what reason?
a) Cost quality
more benefits
b) quality
c) satisfaction
d) seasonal change
e)
20.
During sales promotion do you purchase more than what required?

a) Yes b)no c)sometimes
21.
Do you wait for sales promotion offers by retail malls?

a) Yes b)no c)sometimes
22.
According to you which retail mall offer best sales promotion tools?
a) Big bazaar b)Easy day c)More mega store d)Reliance mart e)others
Page96
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HUL

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Study on effectiveness of sales promotional strategies of FMCG

Study on effectiveness of sales promotional strategies of FMCG

Study on effectiveness of sales promotional strategies of FMCG

Study on effectiveness of sales promotional strategies of FMCG

Study on effectiveness of sales promotional strategies of FMCG

Study on effectiveness of sales promotional strategies of FMCG

Study on effectiveness of sales promotional strategies of FMCG

Study on effectiveness of sales promotional strategies of FMCG

Study on effectiveness of sales promotional strategies of FMCG

Study on effectiveness of sales promotional strategies of FMCG

Consumer Oriented Sales Promotion Trade Oriented Sales Promotion

(i) Consumer Oriented Sales Promotion

Study on effectiveness of sales promotional strategies of FMCG

Tools of Consumer Oriented Sales Promotion

Study on effectiveness of sales promotional strategies of FMCG

Lets have look at each tool

Study on effectiveness of sales promotional strategies of FMCG

4. Nature of the product:

Study on effectiveness of sales promotional strategies of FMCG

5. Stage of product Life Cycle:

4. Budget Available for Promotion:

Trade Oriented Sales Promotion

Why do Sales promotion schemes affect sales?

Study on effectiveness of sales promotional strategies of FMCG

Brand switching and

SALES PROMOTION STRATEGY

Consumer attitudes and buying patterns

Study on effectiveness of sales promotional strategies of FMCG

Your brand strategy

There are three types of sales promotion strategies:

A Combination of Two Strategies

Study on effectiveness of sales promotional strategies of FMCG

The Short term Impact of Promotions

Temporary price reductions (price off) substantially increase sales

The Long term Impact of Promotions

Study on effectiveness of sales promotional strategies of FMCG

BACKGROUND OF THE STUDY

Study on effectiveness of sales promotional strategies of FMCG

SCOPE OF THE STUDY

Study on effectiveness of sales promotional strategies of FMCG

the topic is sufficient enough to meet the requirement of research study.

LIMITATIONS OF THE PROJECT

time and lack of positive behavior.

work sincere efforts were put.

EXPECTED CONTRIBUTION FROM THE STUDY

Study on effectiveness of sales promotional strategies of FMCG

Study on effectiveness of sales promotional strategies of FMCG

Study on effectiveness of sales promotional strategies of FMCG

Study on effectiveness of sales promotional strategies of FMCG

Study on effectiveness of sales promotional strategies of FMCG

M. RampiersaysSales promotions in FMCG involve some form of coordination / cooperation

Study on effectiveness of sales promotional strategies of FMCG

Study on effectiveness of sales promotional strategies of FMCG

Study on effectiveness of sales promotional strategies of FMCG

Study on effectiveness of sales promotional strategies of FMCG

5. Instruments for data collection

Study on effectiveness of sales promotional strategies of FMCG

8. Data collection Method

Study on effectiveness of sales promotional strategies of FMCG

4.1 FMCG CONCEPT

Study on effectiveness of sales promotional strategies of FMCG

4.2 THE FMCG INDUSTRY