Project Report

On

Effects of Sales Promotion on the Sales of FMCG

Products

(With Reference to Uncle Chips)

Submitted in the Partial Fulfillment for the Requirement of Post

Graduate Diploma in Management
(PGDM)

PGDM IInd TRIMESTER (A)

SUBMITTED TO: SUBMITTED BY:

Mr. ROHIT KUMAR VAISH SUMIT KOHLI

(EXTERNAL MENTOR) ROLL NO: 52/PGDMA/KJ/2016

PEPSICO PGDM-A

Ms. JYOTI KUKREJA

(INTERNAL MENTOR)

1
 STUDENTS DECLARATION

I hereby declare that this project is my original work and have not been submitted in any
form as a part of any other project.

Information derived from the published and unpublished data of other has been
acknowledged in the list of reference given in the bibliography.

Place: New Delhi

Date: SUMIT KOHLI

2
 MENTORS DECLARATION

I hereby declare that Sumit Kohli, PGDM, JIMS, Kalkaji has done this project and it is
the original work and have not been submitted in any form as a part of any other
project.

Information derived from the published and unpublished data of other has been
acknowledged in the list of reference given in the bibliography.

Place: New Delhi

Date: Mr. ROHIT KUMAR VAISH

3
 MENTORS DECLARATION

I hereby declare that SUMIT KOHLI, PGDM, JIMS, Kalkaji has done this project and it
is the original work and have not been submitted in any form as a part of any other
project.

Information derived from the published and unpublished data of other has been
acknowledged in the list of reference given in the bibliography.

Place: New Delhi

Date: Ms. JYOTI KUKREJA

4
 ACKNOWLEDGEMENT

I would like to express my sincere thanks to Mr. Rohit Kumar Vaish, external mentor of
this project, for his guidance and help that was important for me to finish the project

I would like to say thanks to Dr. J.K. Batra, Director and Ms. Jyoti Kukreja, internal
mentor, for always guiding me.

This project would not have been successful without their support.

SUMIT KOHLI

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 TABLE OF CONTENTS

S.NO. TOPIC PAGE.NO

1. Executive Summary 7

2. Introduction 9

3. Company profile 13

4. Research Methodology 23

5. Data Analysis and Interpretation 41

6. Findings and Conclusion 53

7. Questionnaire 55

8. References 59

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 EXECUTIVE SUMMARY

Sales Promotion increases 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.
Strategy is the game plan to achieve the targets as per planning. 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 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.

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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.

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.

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.

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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. This attracted me to select and study
this topic.

CHAPTER I

INTRODUCTION

Indias food and beverage category constitutes about 40% of its Consumer
Packaged Goods (CPG) industry. This sector was valued at $15 billion in
2012.Food
The packaged food industry comprises of baked goods, convenience food, dairy, and
confectionaries. Biscuits (cookies) are one of the most popular baked goods in India.
India-based Parle is a leader in this category with its biscuit brand Parle-G, an Indian
favorite. Another India-based company Britannia Industries Ltd. specializes in bakery
goods and dairy products.

The convenience food segment includes frozen meals, packaged snacks, and ready-to-
cook foods. India-based Mother Dairys Safal Fruits & Vegetables is the most prevalent
frozen food product. Another Indian company MTR Foods specializes in ready-to-eat
foods allowing working middle-class consumers to conveniently recreate traditional
Indian dishes. Prominent international brands in this segment include Nestls Maggi
instant noodles and ready-to-eat meals, PepsiCos Lays and Kurkure snacks, and
Hindustan Unilever Ltd. s Kissan condiments, juices, and jams.

India is the largest producer and consumer of milk in the world. Local vendors
contribute to the majority of the dairy segment. India-based Amul provides milk-based
products such as ghee, an ingredient used in traditional Indian meals. Nestle is a
popular choice for milk substitutes, buttermilk, and probiotic yogurt.

The confectionary segment includes desserts and sweets. Chicago-based Mondelezs

Cadbury chocolate is very popular in India. India-based Haldirams produces Indian
desserts, snacks, and ice cream.

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Beverages
Cold drinks such as soft drinks and fruit drinks are becoming more common in the
country. Coca-Cola and PepsiCo dominate this category.

Packaged water is increasingly prevalent as the Indian population does not trust the
quality of municipal water.

Parle Argos Bisleri, PepsiCos Aquafina and Coca-Colas Kinley, and Tatas Himalaya
are the most well-known brands. Hundreds, if not thousands of small bottlers also sell
water, some of whom are of dubious quality.

Alcoholic beverages are also popular in India.

HISTORY

As per Ministry of Food Processing of India (MOFPI), the term 'food processing' is
mainly defined as a process of value addition to the agricultural or horticultural produce
by various methods like grading, sorting and packaging. In other words, it is a technique
of manufacturing and preserving food substances in an effective manner with a view to
enhance their shelf life; improve quality as well as make them functionally more useful.
It covers a wide spectrum of products from sub- sectors comprising agriculture,
horticulture, plantation, animal husbandry and fisheries. It also includes other industries
that use agricultural inputs for manufacturing of edible products.

SEGMENTS IN THE FPI

The food processing sector comprises of three segments based on the levels of
processing.

Primary processing of food

Primary processing of food comprises of sorting, grading and packaging of fruits and
vegetables, milk, rice, spices, etc.

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 Secondary Processing of Food
Secondary processing of food comprises of re-shaping of food for ease of consumption.
It includes flour, oil cakes, tea leaf and beverages powder etc.
Together with primary processing, the two segments constitute around 62% of the
processed foods in value terms.

Tertiary Processing of Food (or) Value Added Food Segment

Value added food segment includes processed fruits and vegetables, juices, jam & jelly
etc and holds around 38 % share in the total processed food market.

Growth Drivers For Packaged Food In India

The major factor among others is Convenience without compromising on taste as

packaged food works well for a busy person who wants to eat a balanced meal or for a
person who doesn't like to cook because there's virtually no cooking involved.

Rising disposable incomes and the on-going urbanization of India's population are set
to drive the packaged food market in India. The calories, carbs and protein are
predetermined, making it perfect for health conscious people.

The arrival of food multinationals, rising popularity of quick-service restaurants, modern

retail trade and technological advancements has complicated the issue at hand. The
government plans to open 30 mega Food Parks and much cold Storage by the end of
the 11th five year plan.

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Indian Packaged Food Market

Packaging Of Different FMCG Products

I. Sauces, Dressings and Condiment

Ketchups, Pickles, Mayonnaise, Spreads, Salad Dressings, Jams, Syrups and Cordials.
II. Dairy Products
Yogurt, Plain and Flavored Milk, Butter, Cheese, Ice Cream, Buttermilk
III. Bakery Goods
Breads, Cakes, Croissants, Cookies, Bakery Snacks, Sandwiches
IV. Soup and canned food
Soups, Baked Beans, Fruits and Vegetables, Sweets, Canned Meat, Pulps
V. Snacks and Candy
Wafers, Chocolates and Confectionaries, Namkeens
VI. Processed and Ready to eat Meals
Vegetable and Curry Meals, Rice, Cup Noodles, Cooked Noodles and Pastas

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 CHAPTER II

COMPANY PROFILE

PepsiCo, Inc. is an American multinational food, snack and beverage

corporation headquartered in Purchase, New York. PepsiCo has interests in the
manufacturing, marketing and distribution of grain-based snack foods, beverages and
other products. PepsiCo was formed in 1965 with the merger of the Pepsi Company
and Frito-Lay, Inc. PepsiCo has since expanded from its namesake product Pepsi to a
broader range of food and beverage brands, the largest of which have included an
acquisition of Tropicana Products in 1998 and the Quaker Oats Company in 2001,
which added the Gatorade brand to its portfolio .As of January 26, 2012, 22 of
PepsiCo's brands generated retail sales of more than $1 billion apiece,[2] and the
company's products were distributed across more than 200 countries, resulting in
annual net revenues of $43.3 billion. Based on net revenue, PepsiCo is the second
largest food and beverage business in the world. Within North America, PepsiCo is the
largest food and beverage business by net revenue. Indra Krishnamurthy Nooyi has
been the chief executive of PepsiCo since 2006.

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Products and brands

PepsiCo's product mix as of 2015 (based on worldwide net revenue) consists of 53

percent foods, and 47 percent beverages. On a worldwide basis, the company's current
products lines include several hundred brands that in 2009 were estimated to have
generated approximately $108 billion in cumulative annual retail sales.

The primary identifier of a food and beverage industry main brand is annual sales over
$1 billion. As of 2015, 22 PepsiCo brands met that mark, including: Pepsi, Diet
Pepsi, Mountain Dew, Lay's, Gatorade, Tropicana, 7 Up, Doritos, Lipton Teas,
Brisk,Quaker Foods, Cheetos ,Mirinda, Ruffles, Aquafina, Naked, Kevita, Propel, Sobe,
H2oh, Sabra, Starbucks (ready to Drink Beverages), Pepsi Max, Tostitos, Mist
Twist, Fritos, and Walkers.

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 Product Line

1. Pepsi

2. Mountain Dew

3. Lay's potato chips

4. Gatorade

5. Diet Pepsi

6. Tropicana beverages

7. 7 Up (outside U.S.)

8. Doritos tortilla chips

9. Lipton tea (PepsiCo/Unilever

partnership)

10. Quaker foods and snacks

11. Cheetos

12. Mirinda

13. Ruffles potato chips

14. Aquafina bottled water

15. Pepsi Max

16. Tostitos tortilla chips

17. Mist Twist

18. Fritos corn chips

19. Walkers potato crisps

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 PepsiCo SWOT Factors

Strengths

1. Comprehensive product portfolio with more than 100 brands serving nearly every
niche in the beverage, food and snack industries.

Commencing operations in 1965, PepsiCo has become the second largest food and
Beverage Company in the world today. The company earned US$63.056 billion in 2015,
second only to Nestl S.A... PepsiCo was able to achieve this via strengthening its
product portfolio and offering as many different beverages and foods as possible.

The company sells around 100 different brands, of which 22 have each generated more
than US$1 billion dollars in 2015. In addition, more than 10 brands have generated
between US$500 million and US$1 billion in revenue.

Figure 1. Brand portfolio by worlds largest food and beverage companies.

Source: The respective companies official websites and financial reports

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Figure 2. PepsiCos top earning brands (in US$ billions)

PepsiCos brand portfolio is highly diversified and only The Coca-Cola Company has
more brands in the beverage, food and snack industries. No competitor has as many
high earning brands as PepsiCo. They each rely on a few main products to earn the
majority of their revenue. This makes them very vulnerable to any changes in their core
products markets.

PepsiCo is better equipped to satisfy the needs of its customers with its wide variety of
successful products. The company offers nearly every type beverage or snack and its
brands can often be substituted for each other. For example, Lays can be replaced with

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Doritos, Cheetos, Ruffles, Tostitos or Fritos, so if one product doesnt satisfy a
consumers needs, PepsiCo can offer many more choices.

2. Brand recognition and reputation

PepsiCo owns and markets some of the most recognizable global brands, including
Pepsi, Tropicana, Gatorade, Mountain Dew, Aquafina, Lays, Doritos, Cheetos and
many other popular brands. According to Inter brand [7] and Forbes [8], the Pepsi brand is
respectively the 24th and 29th most valuable brand in the world, worth US$19 billion in
both rankings lists. Forbes also identified Frito-Lay as the 38th most valuable brand in
the world, worth US$13.1 billion. Except for Coca-Cola and Sprite, no other non-
alcoholic beverage brand besides Pepsi has been recognized as being one of the top
100 most valuable brands in the world. Euro monitor measured the most popular U.S.
snack brands in 2013 and 6 of the 10 most popular brands were owned by PepsiCo

Figure 3. Top 10 Global Snack Brands by Share, based On Retail Value in

2016

Ranking Brand % Share Owner

1. Lay's 7 owned by PepsiCo

2. Doritos 3.6 owned by PepsiCo

3. Cheetos 2.7 owned by PepsiCo

4. Pringles 2.3

5. Ruffles 1.9 owned by PepsiCo

6. Tostitos 1.6 owned by PepsiCo

7. Want Want 1.4

8. Walkers 1.3 owned by PepsiCo

9. Planters 1.2

10. Jack Links 1

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 Uncle Chips

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Uncle Chips is a brand of potato chips that is marketed in India. It was launched
on 1992 by Amrit Agro Ltd. which was later taken over by Frito Lay(owned by PepsiCo),
India in 2000.

Ingredients

Uncle Chips is made of Potato, Edible Vegetable Oil, Salt (Rock Salt) Spices & other
added Condiments according to their flavours.

Flavours
Bombaat Chilli Masala

PaapriChaat(An Indian Dish)

SendhaNamak(Rock Salt)

Jhakaas Tomato Twist

Plain Salted

Spicy Treat

Pepsi Looks to boost the brands national presence

PepsiCo India is set to give a leg-up to its acquired brand Uncle Chips. In terms of
national presence, the company plans to get the brand at par with its largest selling
potato chips brand Lays.

Uncle Chips continues to dominate in the northern and eastern markets, but is
perceived as a regional brand.

We are bringing in more flavors for Uncle Chips which are relevant to the western and
southern regions. Region-specific flavors will help the brand build distribution, said
Gaurav Mehta, Category Director, Western Snacks, PepsiCo India Foods.

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Uncle Chips was the market leader in the 1990s and was acquired by Frito-Lay,
PepsiCo's snacks division, in October 2000.

However, Lays (launched in 1995) continues to rule the snacks category. Being a
global offering, it has been positioned as an aspiration-driven brand with everyday
flavors while Uncle Chips has relied on Indian ingredients to cater to regional palates.

Flavors

considering traditional flavors work equally well in the snacks category, Uncle Chips will
now sharpen its positioning to appeal to a pan-India audience. Mehta said: Uncle
Chips has always had a broader target audience, which has not been sharply defined
unlike Lays which is targeted at the youth. With more India-specific flavors, Uncle
Chips is now expected to gain a national foothold.

PepsiCo also has ethnic brands such as Kurkure and Lehar in the puffed snacks
segment, but potato chips is the largest selling category in the snacks segment for the
company.

The two dominant segments in snacks are potato chips and namkeens. Being the
market leader in potato chips, we need to drive the segment and flavors have been our
biggest differentiator, he added. Lays has recently added two new flavors (Thai Sweet
Chili and grilled cheese) to its existing seven.

PepsiCo is also strengthening brand Lays due to intense competition in the market. It
has decided to rope in Ranbir Kapoor apart from continuing with Saif Ali Khan, to make
sure it continues to appeal to its youthful target audience.

While there is competition from new players such as ITC and Parle, being the market
leader, we have to drive the category, build on our competitive strengths and tap into
new opportunities, Mehta said.

There is also speculation that the company is trying to acquire more regional players to
strengthen its snacks portfolio.

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 CHAPTER III

RESEARCH METHODOLOGY

Literature Review
Sales promotions have become a vital tool for marketers and its importance
has been i n c re a si n g si g n i f i ca n t l y o ve r th e ye a r s . In India, sa l e s
p ro m o t i o n s e xp e n d i t u r e b y various marketing c o mp a n i e s i s e st i m a t e d to b e
R s 5 ,0 0 0 c ro re s a n d t h e e m p h a si s o n sa l e s p ro mo ti o n activities by the
Indian industry has increased by 500 to 600 percent during the last 3 to 5years
(Economic Times, June 15, 2003). In the year 2001, there were as many as
2,050 promotional schemes in the Rs 80,000 crore FMCG Industry (Dang et. al, 2005).
Given the growing importance of sales promotion, there has been considerable interest
in t h e e f f e c t o f s a l e s p r o m o t i o n o n d i f f e r e n t d i m e n s i o n s s u c h a s
c o n s u m e r s p r i c e perceptions, brand choice, brand switching behavior, evaluation
of brand equity, and effect on brand perception and so on. One of the purposes of a

22
consumer promotion is to elicit a direct impact on the purchase behavior of the firms
customers (Kotler, 1998; Blat berg and Neslin, 1990). Research evidence
suggests that sales promotions positively affect shot-term sales (Priya, 2004).
Research on price promotion has consistently reported high sales effect and high price
elasticity for brands which are on promotion (Blattberg, Briesch and Fox, 1995).
Studies have shown that price promotions enhance brand substitution within a
product category (Dodson et al, 1978), affect aggregate sales (Gupta, 1998),
and significantly affect stock piling and purchase acceleration (Blattberg,
Epping and Lieberman, 1981, Neslin, Henderson and Quelch, 1985).

However, there have also been studies that suggest that sales promotion
affects brand perceptions. Researchers have found out that promotions,
especially price promotions, have negative effect on brand equity (Mela et
al, 1997).

In another study, Schultz (2004) argues that over dependence on promotions can
erode consumers price-value equation. The results of a study by Jedidiet. Al
(1999) indicates that in the long term, advertising has a positive effect on brand
equity whereas price promotions have a negative effect. Similarly, al (2000), based on
structural equation model, suggests that frequent price promotions, such as price deals
are related to low brand equity, where as high advertising spending, high price,
good store image and high distribution intensity are related to high brand
equity.

There is also a managerial belief that if a brand is supported with frequent

promotional offers, the equity of the brand tends to get diluted. On the
contrary, there have also been studies that indicate b r a n d s b e n e f i t f r o m
promotions. Amongst the elements of marketing mix,
s a l e s p ro m o t i o n s h a ve l o n g -t e r m i n fl u e n c e o n b ra n d e q u i t y ( Yo o e t. a l ,
2 0 0 0 ) . Ma ri o l a & Elina, (2005), based on a sample of 167 buyers suggest that
monetary and non-monetary promotions are useful to create brand equity

23
because of their positive effect on brand knowledge structures. The
researchers in this study propose to explore whether the phenomenal growth
of sales promotion as a promotional tool in marketing products in India is
perceived favorably by the consumers and examine the differential effect, if any, o f t wo
t yp e s o f s a l e s p ro m o t i o n n a m e l y ca sh d i s co u n t a n d f re e g i f t o n
c o n s u me rs perception.

Scope of the Study

This study is relating to promotion-mix elements out of total marketing efforts. It will
cover mainly sales promotion, methods for sales promotion, parties involved for sales
promotion, combination of promotion methods with sales promotion, sales promotion
strategy and its related concepts. This topic has studied in FMCG sector in world and
Indian industry.

Leading companies have been selected on the basis of their market share for the
research study and their comparative study has been carried
Out.

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

24
relating to sales promotion, impact of sales promotion strategy on sales, profit and
profitability of companies, market share and goodwill of the companies.

The beneficiary from the study of this topic would be first of all self-researcher,
academicians, practicing managers, prospects researchers and the banks. 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 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.

Techniques of Consumer Sales Promotion

Consumer sales promotions encompass a variety of short-term promotional techniques

designed to induce customers to respond in some way.

The most popular consumer sales promotions are directly associated with product
purchasing. These promotions are intended to enhance the value of a product purchase
by either reducing the overall cost of the product (i.e., get same product but for less
money) or by adding more benefit to the regular purchase price (i.e., get more for the
money).

While tying a promotion to an immediate purchase is a major use of consumer sales

promotion, it is not the only one. As researchers noted above, promotion techniques
can be used to achieve other objectives such as building brand loyalty or creating
product awareness.

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Consequently, a marketers promotional tool box contains a large variety of consumer
promotions.

The following techniques are followed in general that are

Coupons

Price off

Freebies

Scratch Card

Bundling Offer

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

2. Price-off:
A price-off is simply a reduction in the price of the product to increase sales and is very
often used when introduction a new product. A reduction in price always increases sales
but the use of this technique should be carefully considered in the current market
situation.

Price-off is the most preferred sales promotion technique because consumers response
very positively to this scheme. Not only that but it also cause large increase in sales
volume. Price-off reductions are typically offered tight on the package through specially
marked price packs. E.g. Krack Jack offers 30% Price-off.

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

4. Scratch Cards
A scratch card (also called a scratch off, scratch ticket, scratcher, scratchie, scratch-it,
scratch game, scratch-and-win or instant game) is a small token, usually made of
cardboard, where one or more areas contain concealed information: they are covered
by a substance that cannot be seen through, but can be scratched off.

5. Bundling Offers

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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.

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2. Nature of the product:

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

3. Stage of product Life Cycle:

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

4. Budget Available for Promotion:

The funds available for promotion are the ultimate determinant of the promotional
programme. A business with ample funds can make more effective use of sales
promotion programme than a firm with limited financial resources. The budget for sales
promotion can be prepared by the following methods

Percentage of Sales

Fixed funds available for sales promotion

Following the competition, and

Budgeting by objective

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Sales Promotion from the Consumers point of view

Willingness to buy on sales promotion offer

Sixty per cent of the sample did not show willingness to buy a brand due to promotion
while 30% showed willingness and 10% were not sure. This indicates that when 30%
showed willingness and 10% consumers who were not sure, these groups might be
lured through innovative and lucrative sales promotion offer.

Ability to induce trial

Forty per cent of the respondents had said that sales promotion had the ability to induce
trial which reinforces the above inference.

Long-term impact

In order to understand ability of the promotions to increase long-term sales,

respondents were asked about continuity of purchase of a brand after the withdrawal of

30
promotion. Eighty per cent of the respondents indicated that they would not continue.
But 20% said they would. Thus, it could be inferred that promotions in this category (low
involvement products) might encourage trial and brand switching but not long term
loyalty.

Preference of Schemes:

Price off was the most preferred type of scheme. Maximum customers ranked price-offs
as number one or two.

Sales promotion from the retailers point of view

Perceptions on Scheme Preference

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

Perceptions about Buying Roles

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

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Perceptions about their role in decision-making

Retailer had relatively very low influence in affecting choice. It could be inferred that
visibility and awareness about the scheme were the critical success factors so that pull
could be created.

Perceptions about Response to Sales Promotion Offers

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

Margins

It was found that in sales promotion schemes margins varied from 6 to15% depending
of the size of the retail outlet, bargaining power of a retailer, quantity ordered by him etc.
Mostly margins were linked to size of the volumes that were ordered.

Perceptions about terms and conditions

Retailers were not found to be happy with sales promotion schemes where their
margins were cut on the pretext of just fast movement of inventory of the brand being
promoted. Also if additional incentive was offered it was subject to minimum
performance requirement.

Problem of left-over

32
A leftover stock at the end of any scheme was required to be sold by the retailers before
they ordered fresh stocks. In case of bonus packs scheme, leftover stock was often
dismantled (cut open buy one get one free) and sold them individually as a regular
soap. This approach of the company leads to misappropriation which in turn could result
in adverse brand image.

Gifts for Retailer motivation

Companies at times were rewarding retailers by giving free gifts like thermos flasks or
clocks if they sold more than certain quantity in a given period. Companies were making
a half-hearted effort to motivate retailers.

Why do Sales promotion schemes affect sales?

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

First, consumer can increase the quantity they buy just because the product is on sale.

Second, consumers are inducing to purchase another brand different from the one they
would have purchased when there is no promotional incentive.

Finally, consumers total consumption of the product category is increased by the

promotion. However, in the long term this positive effect may be diluted because a
promotional campaign has no permanent effect in the sales of the firm

33
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

34
temporary price cuts, and through door-to-door sales, telemarketing, personal sales
letters, and emails.

When developing a sales promotion strategy for your business, it is important that you
keep the following points in mind.

Consumer attitudes and buying patterns

Your brand strategy

Your competitive strategy

Your advertising strategy

Other external factors that can influence products availability and pricing.

There are three types of sales promotion strategies:

A push strategy

A pull strategy or

A combination of the two

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

A Pull Strategy:

35
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.

A Combination of Two Strategies:

A combination sales promotion strategy is just that; it is a combination of a push and a

pull strategy. It focuses both on the distributor as well as the consumers, targeting both
parties directly. It offers consumer incentives side by side with dealer discounts.

Objectives of the study

The study of this topic has been undertaken with a number of objectives.

Following are the objectives of this study:

(a)To understand the concept of promotion, methods of promotion in markets, sales
promotion, need, objectives, importance in competitive situation, and relation with
various promotional methods.

(b)To study the tools or techniques of sales promotion, impact on sales, parties involved
in sales promotion, management of sales promotion measures, need for sales
promotion ,strategy and its importance, and role of sales promotion strategy in progress
of number of customers, sales volume, profits and progress of the business as a whole.

(c)To understand Indian FMCG sector and find out the practices adopted by the leading
companies regarding sales promotion strategy, their effects and difficulties faced in it by
the selected companies.

36
(d)On the basis of study, to summaries the findings and give suggestions for further
improvement in sales promotion strategy practices and its contribution in achieving
objectives of sales promotion. 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 the conduct the research study the type of research suitable is
descriptive research only.

The data are collected from sales records, dealers, customers and
Salesmen of the companies performing in FMCG sector
The descriptive research has met
The requirement of research study

2. Sources of Data

For the study purpose both primary and secondary data are used. The primary data
collected from sales men of the companies, customers and dealers dealing in the
products of the company.

37
The secondary data collected from records of the company, retailers and dealers.

The data of past sales also have been collected.

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 employees, dealers and
customers.
The secondary data shows the sales of the company product wise. Considering merits
and demerits of both sources of date, these have been used in combination to meet the
requirements of the research work.

3. Instruments for data collection

(a) For collection of data the instruments have been used are; Questionnaire,
Telephone, mobile phone and facsimile Mail, Interview etc.

These have been used for collection of data from respondents. The data have been
collected fromres pondents from different places.

So according to suitability of instruments 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.

Limitations of the Study

38
To carry out the research study the following limitations were expected and faced during
the research study:

(a)Availability of secondary data from sales records of the companies was difficult.

(b)Salesmen, customers, dealers and retailers were reluctant or hesitant to share data.

(c)Management may not like to share their views on the topic.

(d)Time, cost and location factors become major difficulties in completion of research.

(e)Sample size may not be exact representative of the universe. There is possibility of
some error to a limited extent.
REVIEW OF LITERATURE

Paragi kuntalshah and Bijalnishantmethta (2012) in their article effect of sales

promotion and their availability on consumers buying behavior: A perspective on
personal care products opined that todays personal care customers are greatly
influence of advertisement.

The sales promotions immediately hit the sales volume and face the competitions. The
sales promotion stimulate to consumers buying behavior in such as sales promotions
advertisement, buy one get one free and store communications
.
Gopal das (2011) in his study effect of retail sales promotion on buying behavior of
customers: An empirical study said that price promotions are increasing consumers
buying behaviors. This paper highlighted sales promotion such as direct price discount,
buy one get one free, buy one get another product free, media advertisement, store
publicities are stimulate consumers buying decision in FMCG Products.

39
Abhigyan bhattacharjee (2011) described FMCG products influenced to Medias are
both visual and print medias. Advertisement and Medias as well as publicities are
creating new demand of products. It is suitable for both rural and urban areas.

Garimamalik (2011) in his study indicate that strong distribution and affordability also
road shows are use of customer retention and stimulate to buy dabur products in rural
market.

Robert P.Hamlin and Andreainshch (2011) in their article Retailer branding of

consumers sales promotion this article indicate that food industry customers are like
price promotions.

CHAPTER IV

DATA ANALYSIS AND INTERPRETETION

We did a Market survey on Uncle Chips

Following are the Results of it:

1. Do you prefer chips?

Frequency Percent Valid Percent Cumulative

Percent

YES 32 80.0 80.0 80.0

Valid NO 8 20.0 20.0 100.0
Total 40 100.0 100.0

40
 80% of the sample market population prefers chips.

2. Which chips do you prefer?

Frequency Percent Valid Percent Cumulative Percent

0 6 15.0 18.8 18.8

1 13 32.5 40.6 59.4
2 9 22.5 28.1 87.5
Valid
3 3 7.5 9.4 96.9
4 1 2.5 3.1 100.0
Total 32 80.0 100.0
Missing System 8 20.0
Total 40 100.0

41
Uncle chips is the most preferred chips among bingo, lays and others

3. What is the most loved thing about uncle chips?

Frequency Percent Valid Percent Cumulative Percent

0 27 67.5 84.4 84.4

1 1 2.5 3.1 87.5
Valid 2 3 7.5 9.4 96.9
3 1 2.5 3.1 100.0
Total 32 80.0 100.0
Missing System 8 20.0
Total 40 100.0

42
84.4% of the sample market population loves the taste and flavor of uncle
chips.

9.4% of the sample market population loves the packaging of uncle chips.

4. Sample markets rating about uncle chips?

Frequency Percent Valid Percent Cumulative Percent

0 13 32.5 40.6 40.6

1 17 42.5 53.1 93.8
Valid
2 2 5.0 6.3 100.0
Total 32 80.0 100.0
Missing System 8 20.0
Total 40 100.0

43
53.1% of the sample market population rates uncle chips as an excellent
product.

40.6% of the sample market population rates uncle chips as a good

product.

5. How often uncle chips is consumed by the sample market population?

Frequency Percent Valid Percent Cumulative Percent

0 5 12.5 15.6 15.6

1 10 25.0 31.3 46.9
Valid 2 16 40.0 50.0 96.9
3 1 2.5 3.1 100.0
Total 32 80.0 100.0
Missing System 8 20.0
Total 40 100.0

44
50% of the sample market population sometimes consumes uncle chips .

31.3% of the sample market population often consumes uncle chips .

15.6% of the sample market population very often consumes uncle chips .

5. Uncle chips famous in market or not?

Frequency Percent Valid Percent Cumulative Percent

YES 10 25.0 31.3 31.3

NO 2 5.0 6.3 37.5
Valid
Cant say 20 50.0 62.5 100.0
Total 32 80.0 100.0

Missing System 8 20.0

Total 40 100.0

45
31.3 % of the sample market population beliefs uncle chips is famous in the
market.

62.5 % of the sample market population does not have any say on
popularity of uncle chips in the market .

6. Among which age group uncle chips is consumed the most?

Frequency Percent Valid Percent Cumulative Percent

Children 12 30.0 37.5 37.5

Valid Adolescent 20 50.0 62.5 100.0
Total 32 80.0 100.0
Missing System 8 20.0
Total 40 100.0

46
62.5%of adolescents in the sample market population consumes uncle
chips.

37.5 % of childrens in the sample market population consumes uncle chips.

7. How many people in the sample market population will or may

recommend uncle chips to others ?

Frequency Percent Valid Percent Cumulative Percent

YES 28 70.0 87.5 87.5

Valid Cant say 4 10.0 12.5 100.0
Total 32 80.0 100.0
Missing System 8 20.0
Total 40 100.0

47
87.5 % of the sample market population will recomment others to consume uncle chips.

9. should uncle chips focus on advertisements ?

Frequency Percent Valid Percent Cumulative Percent

Valid YES 32 80.0 100.0 100.0

Missing System 8 20.0

Total 40 100.0

48
100 % of the sample market population beliefs uncle chips should focus
on advertisements .

8. How many people in the sample market population will

continue to consume uncle chips even after knowing it is a junk
food?

Frequency Percent Valid Percent Cumulative Percent

YES 23 57.5 71.9 71.9

Valid NO 9 22.5 28.1 100.0
Total 32 80.0 100.0
Missing System 8 20.0
Total 40 100.0

49
71.9 % of the sample market population will continue to consumes uncle chips even
after knowing it is a junk food.

CHI SQUARE TEST

Case Processing Summary

Cases
Valid Missing Total
N Percent N Percent N Percent
Gender * What do
you love the most 32 80.0% 8 20.0% 40 100.0%
about uncle chipps.

50
 1. Gender * What do you love the most about Uncle Chips? Cross
tabulation
Count
What do you love the most about Uncle Chips? Total
Taste and Packaging Pricing Any Other
Flavor
Male 17 0 3 0 20
Gender
Female 10 1 0 1 12
Total 27 1 3 1 32

Chi-Square Tests
Value Df Asymp. Sig. (2-
sided)
Pearson Chi-Square 5.136a 3 .162
Likelihood Ratio 6.746 3 .080
Linear-by-Linear Association .014 1 .907
N of Valid Cases 32
a. 6 cells (75.0%) have expected count less than 5. The minimum expected
count is .38.

Hypothesis testing:

H(0): Most people love uncle chips because of its taste and flavor.

H(1): Most people doesnt love uncle chips because of its taste and flavor.

Inference: Since the level of significance of the Chi Square is more than 0.05, we
accept the null hypothesis and reject the alternate hypothesis. Therefore, it can be said
that most people love uncle chips because of its taste and flavor.

51
 CHAPTER V

FINDINGS & CONCLUSION

After our Data collection and market survey on uncle Chips .

We have reached to the following conclusion:

80% of the sample market population prefers chips.

Uncle chips is the most preferred chips among bingo , lays and
others

84.4% of the sample market population loves the taste and flavor of
uncle chips.

9.4% of the sample market population loves the packaging of uncle

chips.

52
 53.1% of the sample market population rates uncle chips as an
excellent product.

40.6% of the sample market population rates uncle chips as a good

product,

50% of the sample market population sometimes consumes uncle

chips .

31.3% of the sample market population often consumes uncle chips .

15.6% of the sample market population very often consumes uncle

chips .

31.3 %of the sample market population beliefs uncle chips is famous
in the market.

62.5 % of the sample market population does not have any say on
popularity of uncle chips in the market .

37.5 % of childrens in the sample market population consumes uncle

chips.

100 % of the sample market population beliefs uncle chips should

focus on advertisements .

71.9 % of the sample market population will continue to consumes

uncle chips even after knowing it is a junk food.

In order to sustain and gain a larger market share uncle chips must
focus on advertisements.

53
 APPENDICES

Questionnaire for Brand Repositioning of

Uncle Chips

Name:

54
Age:

Qualification:

Gender:

Instructions: Please tick the number next to answer of your choice.

1. Do you prefer chips?

1) Yes

2) No

2. Which chips do you prefer?

1) Uncle chips

2) Bingo

3) Lays

4) Any other3. What do you love the most about uncle chips?

1) Taste and Flavor

2) packaging

3) Price

4) Any other

55
4. How would you rate uncle chips as a product?

1) Excellent

2) Good

3) Average

4) Poor

5. How often do you consume it?

1) Very often

2) Often

3) Sometimes

4) Rarely

5) Never

6. Do you think uncle chips is famous in market ?

1) Yes

2) No

3) Cant say

7. Who among your family members is most fond of uncle Chips?

1) Children

56
 2) Adolescent

3) Middle aged

4) Elders

8. Would you suggest other person to buy uncle Chips?

1) Yes

2) No

3) Cant say

9. Do you think uncle chips should introduce new flavors?

1) Yes which flavor : _______________

2) No

10. Should uncle chips spend on TV advertisements?

1) Yes

2) no

11. Uncle chips come in junk food. Do you think it is healthy to consume it?

1) Yes

2) No

57
Thank You for filling up the form and giving your valuable
time to us.

58
 CHAPTER VI

BIBLIOGRAPHY & REFERENCES

SOURCES

PepsiCo financial report 2016

Companies official websites and financial reports

Companies retail sales data

Secondary data through online sites

Data collected through questionnaire on market survey of uncle chips

www.pepsicoindia.co.in/brands/uncle-Chips.html

www.pepsicoindia.co.in/

59
REFERENCES

Kotler, P., & Armstrong, G. (2010). Principles of marketing. Pearson education

Aaker, D. A., Kumar, V., & Day, G. S. (2008). Marketing research. John Wiley &Sons.
Jain, S. C. (1989). Standardization of international marketing strategy: some research
hypotheses. The Journal of Marketing,

Paragi kuntal shah and Bijal nishant Mehta (Nov 2012) effect of sales promotions and
their availability on consumer buying behavior Indian journal of marketing.

Gopal das (July 2011) effect of retail sales promotion

On buying behavior of customer Indian journal of marketing.

Abhigyan Bhattacharjee (June 2011) media influence on FMCG

A comparative study among rural and urban households, Indian journal of marketing

Garima malik (July 2011) sales promotion of dabur India limited in Indian rural market ,
Indian journal of marketing.

Robert p Hamlin and Andreainshch (2011) retail branding of consumer sales promotion
Indian journal of marketing.

Philip Kotler marketing management twelfth edition (2007) a south Asian perspective.

S p Gupta, statistical methods (2011) sultan Chand & sons New Delhi

60