STUDY ON SALE OF FMCG PRODUCTS THROUGH VARIOUS

PROMOTIONAL TECHNIQUES

A CAPSTONE REPORT

Submitted By

BIKRAM MOHIT SUMAN HAFID

DEVGAN KUMAR RAWAT HANEEFA
(11603994) (11606085) (1160) (1160)

Mentored By

PROF.POOJA SHARMA

In partial fulfillment of Capstone Project for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

School of Business
LOVELY PROFESSIONAL UNIVERSITY
Phagwara, Punjab

NOVEMBER,2017
 CERTIFICATE

This is to certify that the declaration statement made by this group of students is correct to the
best of my knowledge and belief. They have completed this Capstone Project under my guidance
and supervision. The present work is the result of their original investigation, effort and study.
No part of the work has ever been submitted for any other degree at any University. The
Capstone Project is fit for the submission and partial fulfilment of the conditions for the award of
MBA degree from Lovely Professional University, Phagwara.

Name of Mentor
Pooja Sharma
(Assistant Professor) Mittal School of Business
 ACKNOWLEDGEMENT
In performing our Project, we had to take the help and guideline of some respected persons, who
deserve our greatest gratitude. The completion of this Project gives us much Pleasure. We would
like to show our gratitude to Prof. Pooja Sharma our mentor for giving us a good guideline for
Project throughout numerous consultations. We would also like to expand our deepest gratitude
to all those who have directly and indirectly guided us in writing this assignment. Many people,
especially our team members itself, have made valuable commitment on this proposal which
gave us an inspiration to improve our Project. We thank all the people for their help directly and
indirectly to complete our assignment.
 Chapter1: INTRODUCTION
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. The customer is found in the
beginning and end of marketing process. In marketing a large number of activities are performed.
For easy understanding these activities are divided in 4 groups for products and 7 groups 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. Promotion is
one of the variables through which information regarding products or services is being
communicated to customers to change their attitude and behaviour. 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 promotion refers to many kinds of incentives and techniques that are directed
towards consumers, traders and sales force with the intention to increase sales in short term.

“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 behavioural responses of the firm’s customers”. Kazmi and Batra

The main objective of sales promotion is to increase the sales of products in short term by
influencing behaviour 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. 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.

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. This attracted me to select and study this topic.
Sales promotions are categorized into two types: trade sales promotions and consumer sales
promotions. Trade promotion includes the schemes, discounts, freebies, commissions and
incentives given to the trade partners like retailers, wholesalers, distributors to stock more, push
more and hence sell more of a product. These are aimed at enticing the trade to stock up more
and hence reduce stock-outs, increase share of shelf space and drive sales through the channels.
Whereas sales promotion activities which are aimed at the final consumer are called consumer
sales promotion. These are pull strategy for the product and are advertised in public media to
seek attention. Mostly these schemes are floated in festival times, like Diwali or Christmas.
Some examples to this are buy soap, get diamond free; buy biscuits, collect runs; buy TV and get
some discount or a free item with it and so on. Consumer sales promotions is taken as a severe
competitive edge and so it becomes very prominent in the 'maturity or decline' stages of a
product life cycle, where companies need to sell their own wares against severe competition.

TRADE SALES PROMOTION

Resellers like wholesalers and retailers who distribute manufacturers’ products to the ultimate
consumers which are targeted as a trade sales promotion. The objectives of sales promotions
aimed at the trade are different from those directed at consumers. The trade sales promotions
hope to accomplish four goals which generally include the following:
Develop in-store merchandising support, as strong support at the retail store level is the key to
closing the loop between the customer and the sale.
Control inventory by increasing or depleting inventory levels, thus helping to eliminate easonal
peaks and valleys.
Expand or improve distribution by opening up new sales areas (trade promotions are also
sometimes used to distribute a new size of the product).
Generate excitement about the product among those who are responsible for selling it. Some of
the more common forms of trade promotions—profiled below—include point-of-purchase
displays, trade shows, sales meetings, sales contests, push money, deal loaders, and promotional
allowances
Point-of-Purchase (POP) Displays
In order to promote a particular brand or group of products Manufacturers provide point-of-
purchase (POP) display units free to the retailers. If the POP is designed in such a way that it is
generating sales to the retailer than there is a probability that reseller will use a POP display. The
basic goal of POP displays is to give an effective and high product visibility. The forms of POP
displays include special racks, display cartons, banners, signs, price cards, and mechanical
product dispensers. In industries such as the grocery field where a shopper spends about three-
tenths of a second viewing a product, anything increasing product visibility is valuable. Because
of POP displays plays a crucial role in reminding consumers about important decision
information, such as the product's name, appearance, and sizes. The theme of the POP display
should coordinate with the theme used in ads and by salespeople.

Trade Shows
Trade shows provides a great opportunity to write orders for products. Along with it also aims at
providing a chance to demonstrate products, disseminate information, answer questions, and be
compared directly to competitors. Sales meetings are sponsored by manufacturers or wholesalers
that are organized at a smaller scale related to trade shows. Whereas these trade shows are open
to all potential customers, sales meetings are targeted toward the company's sales force and/or
independent sales agents. These kinds of meetings are usually conducted regionally and directed
by sales managers. The motive of the meetings is that, it may be used to motivate sales agents,
for explaining the product or the promotional campaign, or simply to answer questions. For
resellers and salespeople, sales contests can also be an effective motivation. There are thousands
of manufacturers who display their wares and take orders at trade shows. In fact, companies Page
spend over $9 billion yearly on these shows. Typically, a prize is also awarded to the
organization or person who exceeds a quota by the largest percentage.
Push Money
Push money (PM) are also known as spiffs which is an extra payment that is given to salespeople
for meeting a specified sales goal that he has been assigned. For instance: there is a manufacturer
of refrigerators who might pay $40 bonus for each unit of model A, and $30 bonus for each unit
of model B which he had sold in between March 1 and September 1. Salesperson at the end of
that period would send evidence of these sales to the manufacturer and receive a check in return.
Many manufacturers offer Push Money which is seen as a kin bribery by some people.
Deal Loaders
A kind of a premium that is given to retailer by a manufacturer if the retailer is ordering a certain
quantity of product from him. There are two types of deal loaders which are most common these
are:

Buying loader: It is given as a gift for making a specified order size.

Display loader: It shows that the retailer is receiving the display after a campaign. For instance,
Bajaj Electricals is having a display that is containing appliances as part of some special program
and as soon as the program is over, the retailer receives all the appliances on the display if he has
achieved the specified order size.

Trade Deals

Trade deals are special price concessions superseding that are for a limited time, it is the normal
purchasing discounts that are given to the trade. To encourage sellers to specially promote a
product these trade deals plays an important role. The marketer might receive special displays,
larger-than-usual orders, superior in-store locations, or greater advertising effort. And in
exchange, the retailer might receive special allowances, discounts, goods, or money. There are
industries where the trades deals are the primary concern for retail support as well as the
marketing funds spent in this area are equally considerable. Buying allowances and
advertising/display allowances are the two major types of trade deals.
Buying Allowances

A bonus is a buying allowance that is being paid by a manufacturer to a reseller when a certain
amount of product is purchased during a specific time period. For instance, a reseller who
purchases at least 20 cases of product might receive a buying allowance of $7.00 off per case,
while a purchase of at least 25 cases would result in $8.00 off per case, and so forth. These kinds
of payment may also take the form of a check or a reduction in the face value of an invoice.
Some retailers also engage themselves in "forward buying" so that they can take advantage of a
buying allowance. Retailers use to order more merchandise than is needed during the deal period
and after that they store that extra merchandise to sell in some future date at regular prices. This
also assumes that the savings gained through the buying allowance is greater than the cost of
warehousing and transporting the extra merchandise. Some marketers try to discourage forward
buying, since it reduces profit margins and tends to create cyclical peaks and troughs in demand
for the product.

The slotting allowance is a controversial form of buying allowance. Slotting allowances are fees
that retailers charge manufacturers for each space or slot on the shelf or in the warehouse that
new products will occupy. Many times it happens that the allowance amounts to little more than
paying a bribe to the retailer to convince him or her to carry your company's products. But there
are many marketers who are willing to pay extra to bring their products to the attention of
consumers who are pressed for time in the store. Slotting allowances sometimes buy marketers
prime spaces on retail shelves, at eye level or near the end of aisles.
The final type of buying allowance is a free goods allowance. In buying allowance the retailers
or wholesalers are provided with certain amount of product at no cost if they purchase a stated
amount of the same or a different product by the manufacturers. These allowances take the form
of free merchandise rather than money.

Advertising Allowances

Dividend paid by a marketer to a reseller for advertising its product is popularly known as
advertising allowance. The money can only be used to purchase advertising for example, to print
flyers or run ads in a local newspaper. But there are some resellers who take advantage of the
system that’s why now a day there are many manufacturers require verification. There are some
manufacturers who tend to pay retailers some extra to highlight their display from the many
available every week and the payment can be made in form of cash or goods. Retailers are
required to furnish written certification of compliance with the terms of the contract before they
are paid
and they are the ones who are most likely to select displays that yield high volume and are easy
to assemble.

VARIOUS CONSUMER SALES PROMOTIONS

Price Deals
They are those sales promotion in which temporary reduction in the price of a product or service
is given to the customers, e.g. 30% flat off. It enables a consumer to save the money when a
product is purchased. The main types of price deals include discounts, bonus pack deals, refunds
or rebates, and coupons.
These are usually used to encourage trial use of a new product, to retain the buyers for a mature
product, or to convince existing customers to increase their purchases, accelerate their use, or
purchase multiple units. Price deals work most effectively when price is the consumer's foremost
criterion or when brand loyalty is low.
Price discounts are especially common in the food industry, where local supermarkets run
weekly specials. It may be initiated by the manufacturer, the retailer, or the distributor. For
instance, a manufacturer may "pre-price" a product and then convince the retailer to participate
in this short-term discount through extra incentives. For price reduction strategies to be effective,
they must have the support of all distributors in the channel. Existing customers perceive
discounts as rewards and often respond by buying in larger quantities. Price discounts alone,
however, usually do not induce first-time buyers.
Another type of price deal is the bonus pack or banded pack. In a bonus pack, an extra amount of
the product is given on the purchase of standard size of the product at the regular price. A bonus
pack has little appeal to users of competitive brands. A banded pack offer is when two or more
units of a product are sold at a reduction of the regular single-unit price. Sometimes the products
are physically banded together, such as in toothbrush and toothpaste offers.
A refund or rebate promotion is when a certain amount of money is refunded back to the
consumer. Refund’s main aim is to increase the quantity or frequency of purchase, to encourage
customers to "load up" on the product. This strategy has many benefits like it
weakenscompetition as it temporarily taking consumers out of the market, also stimulates the
purchase of post-ponable
goods such as major appliances, and creates on-shelf excitement by encouraging special displays.
Refunds and rebates are generally viewed as a reward for purchase, and they appear to build
brand loyalty rather than diminish it.
Coupons are legal certificates offered by manufacturers and retailers. They grant specified
savings on selected products when presented for redemption at the point of purchase. In this all
the cost is bared by the manufacturers. Retailers who offer double or triple the amount of the
coupon shoulder the extra cost. Retailers who offer their own coupons incur the total cost,
including paying the face value. In this way, retail coupons are equivalent to a cents-off deal.
Now talking about the dissemination of coupons then manufacturers disseminate coupons in
many ways. It can be done through mail, dropped door to door, or distributed through a central
location such as a shopping mall. Coupons may also be distributed through the media—
magazines, newspapers, Sunday supplements, or free-standing inserts (FSI) in newspapers.
Coupons can be inserted into or printed on a package, or they may be distributed by a retailer
who uses them to generate store traffic or to tie in with a manufacturer's promotional tactic.
Retailer-sponsored coupons are typically distributed through print advertising or at the point of
sale. Sometimes, though, specialty retailers or newly opened retailers will distribute coupons
door to door or through direct mail.

Contests/Sweepstakes

Contests require entrants to perform a task or demonstrate a skill and that is judged, while
sweepstakes involve a random drawing or chance contest that may or may not have an entry
requirement. The use of sweepstakes as a promotional tactic has grown dramatically in recent
decades, partly because of legal changes and partly because of their lower cost. Administering a
contest once cost about $350 per thousand entries, compared to just $2.75 to $3.75 per thousand
entries in a sweepstakes. Furthermore, participation in contests is very low compared to
sweepstakes, since they require some sort of skill or ability.

Special Events

Special events marketing is having number of advantages. First, events tend to attract a huge
audience that are very enthusiasts so single pitch will address all at once and the impact of the
sales promotion will be high. Second, event sponsorship often builds customer connectivity
increases OTS of the brand. Finally, compared to produce a series of ads, event management is
relatively simple. Many elements of event sponsorship are prepackaged and reusable, such as
booths, displays, and ads. Special events marketing is available to small businesses, as well,
through sponsorship of events on the community level.

Loyal Reward Program

In this type of sales promotion consumers have collect points, miles, or credits for purchases and
redeem them for rewards, e.g. Runs collection through Britannia Biscuits.

Cents-off deal

In some sales promotion, original price (MRP) quoted on the package is crossed and new but
discounted MRP is printed which offers a brand at a lower price. Price reduction may be in
percentage is marked on the package.

Price-pack/Bonus packs deal

This is another type of sales promotion in which customers are offered more of the product for
the same price for example, 25 percent extra. A sales company may offer their consumers a
bonus pack in which they can receive two products for the price of one. In these scenarios, this
bonus pack is framed as a gain because buyers believe that they are obtaining a free product, e.g.
pack of 4 soaps at price of 3.

Coupons

These days coupons have become a standard mechanism for sales promotions in which incentive
to be given depends on the offer printed in the coupons.

Loss leader
In this type of consumer sales promotion, the price of a popular product is temporarily reduced
below cost in order to stimulate other profitable sales.

Free-standing insert (FSI)

A coupo/booklet is inserted into the local newspaper for delivery.
Checkout dispensers

On checkout/point of sales, the customer is given a coupon based on products purchased or the
billing amount, e.g. coupons on purchase on or above Rs.3000.

Rebates

In this type of consumer sales promotion, consumers are offered money back if the receipt and
barcode are mailed to the producer.

Point-of-sale displays: -

Aisle interrupter: A sign that juts into the aisle from the shelf.

Dangler: A sign that sways when a consumer walks by it. It is hung with the ceiling.

Dump bin: A bin full of products dumped inside. In most of the case we see such bins full of
cheap socks or other cheap products.

Glorifier: A small stage that elevates a product above other products.

Wobbler: A sign that jiggles.

Necker: A coupon placed on the 'neck' of a bottle.

Electroluminescent: Solar-powered, animated light in motion.

Kids eat free specials: In this type of sales promotion, consumers get offers like a discount on the
total dining bill by offering 1 free kids meal with each regular meal purchased.

Premiums

Targeting consumers with a premium promotion is an ideal way to increase sales and enhance
brand image. A premium is tangible compensation that is given as incentive for buying a product
as a motivation factor of the consumer. The premium may be given for free, or may be offered to
consumers for a significantly reduced price. Premium promotions also stimulate consumer
participation in the brand. Premiums are playing an important role as the prize that spurs
consumers to collect points for merchandise, register on a Web site, or listen to a promotional
message. Incentives that are given for free at the time of purchase are called direct premiums.
Indirect premiums like mail premiums require the customers’ involvement where customers have
to perform some act in order to obtain a premium through return mail. The premium is still
valuable to the consumer because he or she cannot readily buy the item for the same amount, e.g.
HP laptops
provide premiums where a customer has to send laptop box with the proof of purchase and just
by giving INR 1200/- customers are entitled with a canon digital camera having market price
INR 8500/-.

Continuity Programs
These sales promotions retain brand users over a long time period. It motivates the consumers
which makes the consumers keep buying the product in order to get the premium in the future.
Trading stamps, popularized in the 1950s and 1960s, are prime examples. Today, airlines'
frequent-flyer clubs, hotels' frequent-traveler plans, retailers' frequent-shopper programs, and
bonus-paying credit cards are common continuity programs. These continuity programs also
enable the companies to take competitive advantage as it is highly beneficial to retain the
customers for the longer period of time and hence making loyal customers. Continuity programs
also reduce the threat of new competitors entering into the market.

Free Sample

In this consumer get one sample for free, after their trial and then could decide whether to buy or
not. Successful marketer always tries to place the product into the hands of the consumer.
Sometimes, particularly when a product is new or is not a market leader, an effective strategy is
giving a sample product to the consumer, either free or for a small fee.

Samples may be given through the mail, but increase in postage costs and packaging
requirements have made this method less attractive. Other method of sample distribution is door-
to-door distribution, particularly when the items are bulky and when reputable distribution
organizations exist. This method permits selective sampling of neighbourhoods, dwellings, or
even people. Direct sampling can be achieved through prime media using scratch-and-sniff cards
and slim foil pouches, or through retailers using special displays or a person hired to hand out
samples to passing customers. Though this last technique may build goodwill for the retailer,
some retailers resent the inconvenience and require high payments for their cooperation.

A final form of sample distribution deals with specialty types of sampling. For instance, some
companies specialize in packing samples together for delivery to homogeneous consumer
groups, such as newlyweds, new parents, students, or tourists. Such packages may be delivered
at hospitals, multiplexes, hotels, or dormitories and include a number of different types of
products.

Product sampling is one of the expensive methods of generating sales; the ROI from free
sampling and is growing in popularity with each passing day. At a recent family festival in the
Isle of White, Persil handed out 1500 sample bottles of Persil 2in1 with Comfort washing
detergent to parents with their children. Of those who received the free sample, 70% enquired
further about the product. Most importantly, two-thirds said they would consider ditching their
current detergent in favor of Persil.

The main criticism of free sampling is that is does not have that much of volume reach of
traditional media. After receiving a sample, the likelihood to purchase ranges in between 20% t
90%. In was noticed that for every consumer who picks up a free sample at an event or shopping
centre they tend to go on to recommend the product to a further four people.

Over the years sampling has grown in popularity with marketing professionals. A study reveals
that Marketing Week back in 1997, up to 84% of adults had experienced some type of free
sampling in the previous 6 months. In 2006, spending on free sampling increased by 9%. The
growth can be attributed to the fact that it delivers results and is a measurable marketing tool.

Now a day’s retailers are also embracing sampling to the same degree as manufacturers. By
targeting the right customers at the right time retailers have an opportunity to increase the size of
certain categories by encouraging customers to try a new product that they may have not
considered previously or have tried in their past.

Product sampling can have a long lasting impact on sales as compared to other promotional
methods. For instance, up to 52 weeks after the initial sampling period, the positive impact on
sales can still be measured whereas on the other hand promotions such as coupons, the effects on
sales only last up to 12 weeks. If the marketers are feeling pressures to deliver long term growth
sampling is just one stop solution to this.

It may happen that sampling may have a limited impact on established products, as the numbers
of people who have not tested the product are limited. By using a method of sampling marketer
can build brand loyalty and develop a positive brand image among customers unfamiliar with the
product. It’s being revealed in the previous studies that consumers are more receptive to
sampling new products compared to more established brands.

Marketers should consider sampling outside the shopping environment for attaining the
maximum return on investment. By targeting the customers who would most likely to use the
product via magazine inserts or letter drops, brands can avoid some of the high costs involved
with sampling in store or at festivals.
 CHAPTER 2: RESEARCH LIMITATIONS

1. The samples were confined to 100 respondents who located in Jalandhar.

2. The responses are based on knowledge and experience of the respondents sometime may
subject to bias.
3. Our study is restricted to FMCG industry only.
4. The time period for survey was less as it is very big concept

CHAPTER 3: RESEARCH METHODOLOGY

The methodology followed for conducting the study includes the specification of research
design, sample design, questionnaire design, data collection and statistical tools used for
analyzing the collected data.

Sample Size:

A sample size of 100 respondents is selected from the total strength of customers who have used
free sample, Discount, Loyalty Card & Coupons of the products being provided by the FMCG
companies.

The samples are selected on the basis of convenience and respondents are taken from shopping
malls and households.

Sampling Techniques

The sampling technique used for the study is conveyance sampling. The sample is collected from
the respondents on the basis of accessibility and proximity.

Data Collection:

 Primary Data: The primary data was collected by using questionnaires through survey
method on respondents. A personal interaction is done with them. The questionnaire has
34 questions. A 5 point likert scale is used.

Tools of Analysis:

 Descriptive analysis
 Factor Analysis
 Reliability and Validity

This consideration bring about whether or not the indicators that make up the scale or index are
consistent, that means respondents‟ scores on any one indicator tend to be related to their scores
on other indicators. Cronbach‟s alpha coefficient is a commonly used test of internal reliability.
It essentially calculates the average of all possible split- half reliability coefficients. A computed
alpha coefficient varies between 1 (Denoting perfect internal reliability) and 0 (Denoting no
internal reliability). The figure 0.80 is normally assumed as a rule of thumb to denote an
acceptable level of internal reliability. Table 2 showed the computation result of Cronbach‟s α of
the variables used to measure the small city consumer‟s belief about the luxurious branded
consumption. The value of Cronbach‟s α do obtained is .894, which is more than the acceptable
level of internal reliability.
 Fig1:Pilot Study Sample Size

N %

Valid 100 99.0

Cases Excludeda 1 1.0

Total 101 100.0

Source: computer

Fig2:Reliability Statistics

Cronbach's Alpha N of Items

.894 33
Source:computer

Internal Reliability

This consideration bring about whether or not the indicators that make up the scale or index are
consistent, that means respondents‟ scores on any one indicator tend to be related to their scores
on other indicators. Cronbach‟s alpha coefficient is a commonly used test of internal reliability.
It essentially calculates the average of all possible split- half reliability coefficients. A computed
alpha coefficient varies between 1 (Denoting perfect internal reliability) and 0 (Denoting no
internal reliability). The figure 0.80 is normally assumed as a rule of thumb to denote an
acceptable level of internal reliability. Table 2 showed the computation result of Cronbach‟s α of
the variables used to measure the small city consumer‟s belief about the luxurious branded
consumption. The value of Cronbach‟s α do obtained is .894, which is more than the acceptable
level of internal reliability.

Fig3:Pilot Study Sample Size

N %
 Valid 100 99.0

Cases Excludeda 1 1.0

Total 101 100.0

Source:computer

a. Listwise deletion based on all variables in the procedure.

Fig4:Reliability Statistics

Cronbach's Alpha N of Items

.894 33

Source:computer

Validity refers to whether a questionnaire is measuring what it is supposed to measure,

regardless of the responder. Valid questionnaire helps to collect better quality data with high
comparability which reduces the effort and increase the credibility of data. It measures the
arrangement of items and point out either item are in a required sequence or needed replacement
or needed to be deleted from the tool. Therefore, to collect the accurate and concise information
research tool should be made valid before using it in a study.alidity refers to whether a
questionnaire is measuring what it is supposed to measure, regardless of the responder. Valid
questionnaire helps to collect better quality data with high comparability which reduces the effort
and increase the credibility of data. It measures the arrangement of items and point out either
item are in a required sequence or needed replacement or needed to be deleted from the tool.
Therefore, to collect the accurate and concise information research tool should be made valid
before using it in a study.
 CHAPTER 4: DATA ANALYSIS

The data is analysed by taking the samples collected,5 likert skale has been used namely:
Disagree, Strongly Disagree, Neutral , Agree and Strongly Disagree.
The following is the data collected

Fig 4: TABLE OF RESPONSES

S.No. Questions: Disagree Strongly Neutral Agree Strongly

Disagree agree

1 I prefer promotional schemes before purchasing a 17 26 15 26 16

product.

2 I prefer to use samples or try the product before 30 23 24 17 6

purchasing it.

3 I feel that free samples give a fair idea about the 18 28 26 20 8

product quality and properties

4 I go for a repeat purchase if I am having a good 26 24 12 28 10

experience by using the free sample.

5 I do recommend the product to others if I like the 24 21 20 18 17

sample of it.

6 Considering my experience, I use products for more 14 34 18 20 14

than a year or two after using its sample

7 I feel that free sample as a sales promotion schemes 22 20 24 25 9

 makes the product favourite.

8 If I see people purchasing products after using its 14 31 21 20 14

free sample, I think they are rational

9 Free sample is an effective tool to the marketing of 22 27 21 16 14

FMCG products.

10 I think sales promotion schemes create the image of 33 19 15

the product.
18 15

11 I normally buy a brand which offers free samples. 13 26 25 26 10

12 I prefer to wait to take the advantage of the schemes. 18 23 25 27 7

13 I am not really curious about using a free sample. 17 27 26 22 8

14 I think customer should not pay attention to free 10 23 24 27 16

sample schemes while purchasing the product

15 I feel that company provides free sample when it is 9 30 26 24 11

not able to sell.

16 I have often found that sales promotion schemes are 23 22 18 22 15

available on not so good products.

17 I feel that free sample mislead customers from 17 22 20 26 15

purchasing the good products.

18 I have found that knowing about sales promotion 11 26 25 23 15

schemes don‘t make difference in purchase.

19 I have found that knowing about free sample 12 22 20 31 15

schemes don‘t make difference in my purchase.

20 I feel that it’s good to use a product as a free sample 14 41 18 19 8

only, rather than investing money on buying it.

21 I have been a part of many loyalty program 10 32 23 21 14

22 I use loyalty cards frequently. 20 16 23 28 13

23 Loyalty cards is the only reason i go for a particular 18 25 21 23 13

brand

24 Is there any effect on your purchase decision with 16 30 14 30 10

your loyalty membership program
25 I think that loyalty programs are best way to find 17 26 21 25 11
what is customer requirement?

26 I may buy fake products just because their prices are 13 28 22 21 16

lower than originals

27 Low prices of products increases my willingness to 20 27 21 18 14

buy them

28 I prefer to buy my needs during sales seasons 17 29 18 27 9

29 I always drive a bargain when buying a product 14 33 20 26 7

30 I use coupons to get discounts on products I have to 19 21 20 26 14

purchase.

31 I prefer to use coupons rather than asking for 20 22 25 24 9

discount.

32 I suggest coupons to friends and relatives before 19 25 25 21 10

they make the purchase.

33 I have found knowing that coupons are making only 17 22 27 19 15

a slight difference on price of the product.

34 I prefer to use coupons for high cost products. 25 21 16 27 11

Source :Computer

The analysis has done

Out of total 100 respondents that we have approached, most of them (62.6 %) belongs to the age
group of 20-30 as they are more conscious and visited malls and retail outlets very frequently.
29.3% respondents belong to the age group of 30-40 and rest 8.1% are from the age group of 40-
50. People above the age group of 50 generally not prefer to go malls and shopping centers and
so they are also not experienced free sampling which are majorly offered in organized retail
outlets and some shopping malls

For our study, we have categorized our respondents in 4 baskets as per their income. As most of
our respondents are from 20-30 years and are student so most of them fall in the income basket
of less than INR 20000 whereas 19 respondents are earning INR 20000 – 40000, 20 respondents
are earning 40000-60000 where as some of our respondents (8) earning more than 60000 per
month.
 Fig I prefer promotional schemes before purchasing a product.

Samples
30

25
No. Of Sample

20

15

10

0
1 2 3 4 5
Ratings

Our study also reveals that most of the customers prefer promotional schemes before purchasing
a product. It is supported by our survey where 16 respondents said that they are strongly agree
with it and 26 respondents said that are agree with it. Overall 42 out of 100 respondents
supported this statement. However, 26 disagrees with it and only 17 respondents highly
disagreed with the statement.
Fig. I prefer to use samples or try the product before purchasing it.
 Samples
35
30
25
No. Of Sample

20
15
10
5
0
1 2 3 4 5
Ratings

As per our survey, 17 out of 100 respondents said that they are inclined towards using free
samples before purchasing of a product whereas 6 said that they are highly agree to it. On the
contrary, just 30 respondents said that they never try any free samples before purchasing it and
53 are disagree with the statement.

Fig I feel that free samples give a fair idea about the product quality and Properties

Samples
30

25
No. Of Sample

20

15

10

0
1 2 3 4 5
Ratings
While studying our project we come to find that 8 respondents strongly agrees that free samples
give them fair idea about the products’ quality and property also 20 agrees to it. On the other
hand, 28 respondents were disagreed to it and only 18 were strongly opposed the statement.

Fig I go for a repeat purchase if I am having a good experience by using the free sample.
 Samples
30

25
No. Of Sample
20

15

10 Samples

0
1 2 3 4 5
Ratings

8 respondents strongly agreed that they go for repeat purchase if they have good experience by
using the free samples also 28 respondents agreed to it. This proves, those who believe that free
sampling gives fair idea and are satisfied by it will go on the repeat purchase. On the other hand
only 26 respondents strongly disagreed that they don’t go for repeat purchase even if they have
good experience. 24 respondents were disagreeing to the statement.
 Fig I do recommend the product to others if I like the sample of it.

Samples
30

25
No. Of Sample

20

15

10

0
1 2 3 4 5
Ratings

35 out of 100 respondents are on the positive side that they do recommend the product if they
like the sample of it. Which means, if sample is giving fair idea and customers are satisfied with
it, then they go for the positive word of mouth about the product. Only 45 respondents are on the
contrary to this statement where 24 respondents are highly disagreed and 21 are disagreed to it.
Fig Considering my experience, I use products for more than a year or two after using its
sample.
 Samples
40
35
No. Of Sample 30
25
20
15 Samples
10
5
0
1 2 3 4 5
Ratings

In our survey, 14 respondents strongly agreed that they continued to use the products for one or
more years if they use the free sample and if they are satisfied with it. Also 20 supported with as
they agree. Whereas 14 respondents strongly disagreed to it and 34 disagree with the statement.

Fig I feel that free sample as a sales promotion schemes makes the product favourite.

Samples
30

25
No. Of Sample

20

15

10 Samples

0
1 2 3 4 5
Ratings
In our field survey, 9 respondents out of 100 said that they strongly agree with the statement that
free sample as a sales promotion schemes makes the product favorite also 25 respondents are
agreeing with this. This means if they are satisfying with the sample and if they have good
experience then it will be beneficial for the company as customers start liking it and put those
products in their consideration set. 22 respondents said that they are strongly disagree with it
and 20 said that they are disagree with it.

Fig If I see people purchasing products after using its free sample, I think they are rational.

Samples
35
30
25
No. Of Sample

20
15
Samples
10
5
0
1 2 3 4 5
Ratings

Also 14 respondents are strongly agreeing that those people who use free samples before
purchasing of a product are rational where 20 are agreeing to it. This shows that rational people
go for the use of free sampling before purchasing of a product. 14 respondents are strongly
disagreeing to it and 31 are disagree to it. Overall we can say that free sampling does effect the
buying behavior of the customers.

FigFree sample is an effective tool to the marketing of FMCG products.

 Samples
30

25
No. Of Sample
20

15

10 Samples

0
1 2 3 4 5
Ratings

We all are seeing that FMCG market is flooded with 1000s of products and brands. So
companies these days are trying to differentiate themselves and offer free samples. This has also
been proved by our survey. 14 respondents are strongly agreeing that free sampling is an
effective tool to the marketing of FMCG Products. 16 respondents said they are agreeing to it.
22 said that they are strongly disagree to it whereas 27 respondents said they don’t agree to it

Fig I think sales promotion schemes create the image of the product.

Samples
35
30
25
No. Of Sample

20
15
Samples
10
5
0
1 2 3 4 5
Ratings
The above shown bar graph says that out of 100 respondents 19 are agreeing to the statement that
they think sales promotion schemes create the image of the product. 15 are neither agreeing nor
disagreeing with the statement, 15 are strongly agreeing, 33 are disagreeing and 18 are strongly
disagreeing with the above said statement. Therefore, we can say that sales promotion schemes
being offered by the FMCG companies help in creating positive brand image of the product.

Fig I normally buy a brand which offers free samples.

Samples
30

25
No. Of Sample

20

15

10 Samples

0
1 2 3 4 5
Ratings

The above displayed chart shows that out of 100 respondents being surveyed 25 of the
respondents are neither agreeing nor disagreeing to the statement that they normally buy a brand
which offers free sample. 26 of the respondents are agreeing, 26 are disagreeing, 15 are strongly
agreeing whereas the rest 13 of the respondents are strongly disagreeing to the above said
statement.

FigI prefer to wait to take the advantage of the schemes.

 Samples
30

25
No. Of Sample
20

15

10

0
1 2 3 4 5
Ratings

The above graph shows that out of 100 respondents 27 are agreeing to the statement that they
prefer to wait to take the advantage of the schemes. Therefore, we can say that the major part of
the respondents likes to wait and take the advantage of the schemes that is being given by the
FMCG companies for their products. 25 of the respondents are neither agreeing nor disagreeing,
10 are strongly agreeing, 23 are disagreeing and the rest 18 are strongly disagreeing with the
above said statement.

Fig I am not really curious about using a free sample.

Samples
30

25
No. Of Sample

20

15

10

0
1 2 3 4 5
Ratings
From the above shown bar graph out of 100 respondents 22 agreed that they are not really
curious about using a free sample. It means that they feel that they are not so curious and excited
to use free sample of a FMCG product before purchasing it. There may be some other
promotional schemes that are being preferred by the customers while they are going for a
purchase. 26 of the respondents are neither agreeing nor disagreeing, 27 of them are disagreeing,
only a single one is strongly agreeing and the rest 17 are strongly disagreeing with the statement.

Fig I think customer should not pay attention to free sample schemes while purchasing the
product

Samples
30

25
No. Of Sample

20

15

10 Samples

0
1 2 3 4 5
Ratings

From the above shown bar graph 23 respondents out of 100 are disagree with the statement that
they think customer should not pay attention to free sample schemes while purchasing the
products. Major part of the respondents feels that sometimes customer should pay attention to
free sample schemes when they are going to purchase FMCG product. 24 of the respondents are
neither agreeing nor disagreeing to the statement, 27 are agreeing, only 8 are strongly agreeing
and the rest 10 respondents are strongly disagreeing with the above said statement.

Fig I feel that company provides free sample when it is not able to sell.
 Samples

35
30
25
No. Of Sample

20
15
10
5
0
1 2 3 4 5
Ratings

From the above shown bar graph out of 100 respondents 26 says that they are neither agreeing
nor disagreeing with the statement that they feel that company provides free sample when it is
not able to sell. Respondents may feel that sometimes company use to provide free sample when
it is not able to sell its product and sometimes for the reason of promoting their product. 24
respondents are agreeing, 30 are disagreeing, 16 are strongly agreeing and 9 are strongly
disagreeing to the statement.

Fig I have often found that sales promotion schemes are available on not so good products.
 Samples
25

No. Of Sample 20

15

10 Samples

0
1 2 3 4 5
Ratings

The above shown figure, shows that out of 100 respondents 18 neither agrees nor disagree with
the statement that they have often found that sales promotion schemes are available on not so
good products. 22 respondents disagree, 22 are agree, 11 are strongly agree and 23 are strongly
disagree with the above stated statement.
 Fig I feel that free sample mislead customers from purchasing the good products.

Samples
30

25
No. Of Sample

20

15

10 Samples

0
1 2 3 4 5
Ratings

In the above presented data, 20 respondents out of 100 are neither agreeing nor disagreeing to the
statement that they feel that free sample mislead customers from purchasing the good products.
22 of the respondents are disagreeing, 26 are agreeing, 15 strongly agree whereas 17 are strongly
disagreeing to the statement.

I have found that knowing about sales promotion schemes don‘t make difference in
purchase.
 Samples
30

25
No. Of Sample

20

15

10

0
1 2 3 4 5
Ratings

The bar graph being shown above says that out of 100 respondents 25 respondents are neither
agreeing nor disagreeing to the statement that they have found that knowing about sales
promotion schemes don’t make difference in purchase. Therefore, we can say that majorly the
respondents feel that knowing about the sales promotion schemes sometimes trigger them to go
for a purchase and makes some difference in their purchase whereas sometimes it’s not. 23 of
the respondents agreeing, 26 are disagreeing, 15 are strongly agreeing whereas the rest 11 are
strongly disagreeing to the above said statement.

FigI have found that knowing about free sample schemes don‘t make difference in my
purchase.

Samples
25

20
No. Of Sample

15

10 Samples

0
1 2 3 4 5
Ratings
The above displayed figure says that there are 23 respondents out of 100 who are agreeing to the
statement that, they found that knowing about free sample schemes don’t make difference in
their purchase. They believe that whenever they are going for purchasing a FMCG product,
knowing about free sample hardly makes any difference in their purchase. 22 respondents
disagree, 20 are neutrally agreeing, 15 strongly agree and there are only 12 respondents who are
strongly disagree to the above said statement.

Fig I feel that it’s good to use a product as a free sample only, rather than investing money
on buying it.
 Samples
45
40
No. Of Sample 35
30
25
20
15
10
5
0
1 2 3 4 5
Ratings

From the above shown bar graph, 18 of the respondents out of 100 are neutrally accepting that
they feel that it’s good to use a product as a free sample only, rather than investing money on
buying it. Whereas 15 of them strongly agree, 41 are disagreeing, 19 are agreeing and 14 are
strongly disagreeing to the above said statement.

Fig I have been a part of many loyalty programs.

 Samples
35
30
25
No. Of Sample

20
15
10
5
0
1 2 3 4 5
Ratings

From the above figure, it has found that 29 of the respondents have being the part of any loyalty
program. On the other hand, 42 of the respondents were not been the part of any of the loyalty
program. Therefore, we can analyze that majority of our respondent dislikes the loyalty program.
They are not influenced by any loyalty program.

Fig I use loyalty cards frequently

Samples
30

25
No. Of Sample

20

15

10 Samples

0
1 2 3 4 5
Ratings

From the given figure, we have found that 36 of the respodents do not use their loyalty cards
frequently. On the other hand, 41 of the respondents are frequently use their loyalty cards.
 Loyalty cards is the only reason you go for a particular brand

Samples
30

25
No. Of Sample

20

15

10

0
1 2 3 4 5
Ratings

From the given figure, it shows that 36 of the respondents are agree with the statement in which
23 are simply agreeing and 13 are strongly agreed that loyalty cards are the only reasons that
they go for a particular brand. On the contrary, 43 of the respondents does not agree with the
above statement.

Fig Is there any effect on your purchase decision with your loyalty membership program
 Samples
35
30
25
No. Of Sample

20
15
10
5
0
1 2 3 4 5
Ratings

From the given data, it has showed that 10 respondents are strongly agree with the statement and
30 respondents are also agree with the statement that loyalty membership program does effect
their purchasing decision. On the other hand, 46 of the total respondents are disagreed with the
above statement, in 16 are strongly disagreed and 30 are simply disagreed.

Fig I think that loyalty programs are best way to find what is customer requirement

Samples
30

25
No. Of Sample

20

15

10 Samples

0
1 2 3 4 5
Ratings
From the given figure, we can analysed that 35(10 ‘strongly agree’, 25 ’agree’) of the total
respondents are in the favour that loyalty cards are the best way to find what the customer
actually wants. On the other hand, 43 of the respondents are against the above statement. Rest of
the 21 respondents are neutral I.e., they are neither favouring nor against of the statement.

Fig I may buy local products just because their prices are lower than top branded
products.

Samples
30

25
No. Of Sample

20

15

10 Samples

0
1 2 3 4 5
Ratings

From the graph, it has shown that 21 respondents are agree and 11 respondents are strongly
disagree with the statement that they go with the local products due to cheap prices. But 28
respondents are disagreed with this and 13 are highly disagreed with the above statement. On the
other hand, 22 of the respondents are neutrals.

Fig Low prices of products increases my willingness to buy them

 Samples
30

25
No. Of Sample
20

15

10 Samples

0
1 2 3 4 5
Ratings

From the above figure, it has shown that 34 of the total respondents show their willingness in
low prices of the products out of which 16 are mostly buy the products that are generally having
low prices. On the contrary, 47 of the respondents are not influenced with the decrease in price.

Fig I prefer to buy my needs during sales seasons

Samples
35
30
25
No. Of Sample

20
15
10
5
0
1 2 3 4 5
Ratings

From the given figure, it has shown that out of 100 respondents, 31 are agree with the statement
that they prefer to buy their needs mostly in sales seasons. But on the other side, 46 of the
respondents are disagree with this, that they can buy their requirements any of the time.
Fig I always drive a bargain when buying a product
 Samples
35
30
25
No. Of Sample

20
15
Samples
10
5
0
1 2 3 4 5
Ratings

Out of the total 100 respondents, 26 respondents are agree with the statement and 7 respondents
are strongly agree that they usually bargain when buying a product. On the other hand, 47 (14 are
strongly disagree and 33 are disagree) of the respondents are disagree with the above statement.
They generally not bargain when buying a product.

Fig I use coupons to get discounts on products I have to purchase.

 Samples
30

25
No. Of Sample
20

15

10

0
1 2 3 4 5
Ratings

From the above data, 26 respondents are agree with the statement and 14 respondents are
strongly agree that they use coupons to get discounts on products they have to purchase. 40 of
the respondents are disagree with the statement, i.e., they generally not use coupons. Rest 20
respondents are neutrals.

Fig I prefer to use coupons rather than asking for discount.

 Samples
30

25
No. Of Sample

20

15

10 Samples

0
1 2 3 4 5
Ratings

Out of the total 100 respondents, 38 of the respondents are agree with the statement that they
prefer to use coupons rather than asking for discount. On the other hand, 42 respondents are
disagree with the above statement.

Fig I suggest coupons to friends and relatives before they make the purchase.

Samples
30

25
No. Of Sample

20

15

10 Samples

0
1 2 3 4 5
Ratings
From the above figure, it has shown that 30 respondents out of which 21 are simply agree and 9
are strongly agree that they suggest coupons to friends and relatives before making of purchase.
On the other side, 34 respondents are disagree with the statement. They don’t suggest coupons to
their near ones.

Fig I have found knowing that coupons are making only a slight difference on price of the
product.

Samples
30

25
No. Of Sample

20

15

10

0
1 2 3 4 5
Ratings

Out of the total respondents, 19 respondents are agree and 10 are strongly with this statement
that they have found knowing that coupons are making only small difference on price of the
products. But 22 respondents have different thinking they are disagreed with the above
statement. Rest of the 27 respondents are neutrals.

Fig I prefer to use coupons for high cost products.

 Samples
30

25
No. Of Sample
20

15

10

0
1 2 3 4 5
Ratings

From the given figure, it has shown that 27 respondents are agree and 15 are strongly agree that
they prefer to use coupons for high cost products. On the other hand, 21 respondents are disagree
and 25 are highly disagree with the above statement.

ANALYSIS OF THE PROVIDED DATA

Factor Analysis

100 respondents were surveyed (Selected by convenient sample from the target population) and
they were given self-completion questionnaire. In fact, the desirability of piloting such self-
completion instruments is not solely to do with trying to ensure that survey questions operate
well but piloting also has a role in ensuring that the research instrument as a whole functions
well.
100 questionnaires were obtained for the pilot study (See Table 1). This trial-run was of great
advantage to see - if there is any ambiguity, if the respondents have any difficulty in responding
and if there are any inappropriate, misleading or redundant questions. The problem emerged after
filling the questionnaire by few respondents had been carried out and addressed before final
study. Through pilot study those questions are identified for which everyone replies in the same
way, the resulting data was unlikely to be of interest because they did not form a variable
Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy: - The Kaiser-Meyer-Olkin (KMO)
measure of sampling adequacy is an index used to examine the appropriateness of factor
analysis. High values (Between 0.5 and 1.0) indicate factor analysis is appropriate. Values below
0.5 imply that factor analysis may not be appropriate.

TABLE 3: KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. 0.761

Bartlett's Test of Approx. Chi-Square 1.474E3

Sphericity
df 561

Sig. .000

In our study, the index is used to compare the magnitudes of the observed correlation coefficients
to the magnitudes of the partial correlation coefficients. The value of the KMO statistics is .761
which is good. Thus, after applying both the tests and calculating appropriate statistics it was
clear that factor analysis may be considered as an appropriate technique for analysing the
correlation matrix. Once it has been determined that factor analysis is suitable for analysing the
data, it is important to select the appropriate method. To reduce the scale items of variables
factor analysis using the principal component analysis has been applied.

Total Variance Explained

Extraction Sums of Squared Rotation Sums of Squared

Initial Eigenvalues Loadings Loadings
Com
pone % of Cumulativ % of Cumulativ % of Cumulativ
nt Total Variance e % Total Variance e % Total Variance e %

1 8.482 24.949 24.949 8.482 24.949 24.949 5.394 15.864 15.864

2 2.935 8.634 33.582 2.935 8.634 33.582 4.092 12.036 27.899

3 2.395 7.045 40.628 2.395 7.045 40.628 3.362 9.888 37.787

4 1.697 4.992 45.620 1.697 4.992 45.620 2.663 7.832 45.620

5 1.546 4.547 50.167

6 1.451 4.268 54.435

7 1.265 3.720 58.155

8 1.137 3.344 61.499

9 1.097 3.226 64.725

10 1.033 3.040 67.765

11 .980 2.881 70.646

12 .905 2.662 73.309

13 .866 2.549 75.857

14 .736 2.166 78.023

15 .694 2.042 80.065

16 .659 1.939 82.004

17 .631 1.856 83.860

18 .572 1.683 85.543

19 .559 1.643 87.186

20 .495 1.457 88.643

21 .483 1.419 90.062

22 .452 1.328 91.390

23 .386 1.135 92.525

24 .371 1.091 93.616

25 .332 .975 94.591

26 .295 .869 95.460

27 .275 .810 96.270

28 .242 .713 96.983

29 .227 .667 97.650

30 .198 .582 98.232

31 .174 .513 98.744

32 .171 .504 99.248

33 .141 .415 99.664

34 .114 .336 100.000

Extraction Method: Principal

Component Analysis.

In principal component analysis, the total variance in the data is considered. This is applied to
determine the minimum number of factors that will account for maximum variance in the data
for use in subsequent multivariate analysis. The factors so obtained are called principal
components. The column labelled „initial eigenvalues‟ gives the eigenvalues. The eigenvalues
for the factors are as expected in decreasing order of magnitude as we go from factor 1 to factor
33. The eigenvalue for a factor indicates the total variance attributed to that factor. The
percentage (%) variance accounted by all thirty-three factors is 100 per cent.
We have reduced thirty-three (33) variables into fixed four (4) factors and these first four factors
account for 45.620 per cent of the total variance. There are other factors which we have not
considered.

Component Matrixa

Component

1 2 3 4

Low prices of products

increases my willingness .730
to buy them.

I prefer promotional
schemes before purchasing .701
a product.
I go for a repeat purchase
if I am having a good
.647
experience by using the
free sample.

Is there any effect on your

purchase decision with
.634
your loyalty membership
program.

I feel that free samples

give a fair idea about the
.627
product quality and
properties.

I think sales promotion

schemes create the image .621
of the product.

I feel that free sample as a

sales promotion schemes
.619
makes the product
favourite.

Considering my
experience, I use products
.597
for more than a year or
two after using its sample .

I have been a part of many

.591
loyalty program.

Free sample is an effective

tool to the marketing of .579
FMCG products.

I prefer to wait to take the

.574
advantage of the schemes.

I always drive a bargain

.574
when buying a product.
I prefer to use samples or
try the product before .559
purchasing it.

I do recommend the
product to others if I like .555 -.438
the sample of it.

I think that loyalty

programs are best way to
.537
find what is customer
requirement

I use loyalty cards

.537 -.520
frequently.

I use coupons to get

discounts on products I .520
have to purchase.

I prefer to buy my needs

.520
during sales seasons.

I prefer to use coupons for

.492 .421 -.406
high cost products.

loyalty cards is the only

reason you go for a .469
particular brand.

I prefer to use coupons

rather than asking for .465
discount.

I normally buy a brand

.438
which offers free samples.

I feel that it’s good to use

a product as a free sample
.433
only, rather than investing
money on buying it.
I have found knowing that
coupons are making only a
.420
slight difference on price
of the product.

I may buy fake products

just because their prices
are lower than originals.

I feel that free sample

mislead customers from
.669
purchasing the good
products.

I have found that knowing

about sales promotion
.616
schemes don‘t make
difference in purchase.

I have found that knowing

about free sample schemes
.511
don‘t make difference in
my purchase.

I have often found that

sales promotion schemes
.470 .419
are available on not so
good products.

I feel that company

provides free sample when .460
it is not able to sell.

I think customer should

not pay attention to free
sample schemes while
purchasing the product.

I suggest coupons to
friends and relatives
.509
before they make the
purchase.
I am not really curious
.567
about using a free sample.

If I see people purchasing

products after using its
.425 .487
free sample, I think they
are rational.

Extraction Method: Principal Component Analysis.

a. 4 components extracted.
TABLE 5

After the extraction of four factors, factor matrix was generated. Factor matrix, also called as
factor pattern matrix is an important output from factor analysis. The factor matrix contains the
coefficients which were used to express the standardized variables in terms of the factors. These
coefficients, factor loadings, represent the correlations between the factors and the variables. In
the above table, only those factor loading are shown whose value is more than |0.3| and values
less than |0.3| are eliminated from the table. A coefficient with the large absolute value indicates
that the factor and the variables are closely related. Further, these coefficients of the factor
matrix were used to interpret the factors. Above table represents the correlation between the four
factors and the variables. The coefficients so obtained were used to interpret the factors.
Interpretation was facilitated by identifying the variables that have large loadings on the same
factor. The most correlated factors were defined and saved as new variables or regression factor
scores. Above table was used to interpret the factors. After interpreting the results, four factors
were labelled, as shown in above table.

Factors

Positive impact of promotional

Factor 1 activity

Negative impact of promotional

Factor 2 activity

Factor 3 Recommendation

Factor 4 Perception

Regression

Model Summary
 R Adjusted Std. Error of the
Model R Square R Square Estimate

1 .744a .554 .535 .92973

TABLE 6

a. Predictors: (Constant), REGR factor score 4 for analysis 1, REGR factor score 3 for
analysis 1, REGR factor score 2 for analysis 1, REGR factor score 1 for analysis 1

The Value of R is considered to be one of the methods to measure the quality of the
prediction of the depended variable. Here value of R is 0.744 which indicates good level
of prediction.

R square is also called coefficient of determination. It is the proportion of variance in the

dependent variable which can be explained by the independent variables. The value of R
square is 0.554 which implies that the independent variables explain 55.4% of the
variability of our dependent variable.

ANOVA

Sum of Mean
Model Squares df Square F Sig.

1 Regressi
101.842 4 25.460 29.454 .000a
on

Residual 82.118 95 .864

Total 183.960 99

TABLE 7

a. Predictors: (Constant), REGR factor score 4 for analysis 1, REGR factor score 3 for
analysis 1, REGR factor score 2 for analysis 1, REGR factor score 1 for analysis 1

b. Dependent Variable: I prefer promotional schemes before purchasing a product.

F ratio in the ANOVA table indicates that the overall regression model is a good fit for the data
or not. The ANOVA table shows that the independent variables statistically significantly predict
the dependent variable, F(4, 95) = 29.454.

Since the significance value is less than 0.05 hence all the above value shows that the regression
model is good fit for our data

Coefficients

Standardized
Model Unstandardized Coefficients Coefficients t Sig.
 B Std. Error Beta

1(Constant) 2.980 .093 32.052 .000

Factor score 1 for analysis

.860 .093 .631 9.204 .000
1

Factor score 2 for analysis

.413 .093 .303 4.421 .000
1

Factor score 3 for analysis

.334 .093 .245 3.572 .001
1

Factor score 4 for analysis

-.083 .093 -.061 -.888 .377
1

TABLE 8

a. Dependent Variable: I prefer promotional schemes before purchasing a product.

The above table shows the Regression equation of dependent variable and independent variable.
Value of B indicates the intercept point. We can clearly see that the significance value of all first
three factors is 0.00 which is less than 0.05. But the significance value of fourth factor is .377
which is greater than common alpha level. Hence we can conclude that for fourth factor changes
in the predictor are not associated with changes in the response.
FINDINGS AND SUGGESSTIONS

Promotional scheme is highly preferred by the customers of Jalandhar, Punjab before

purchasing a FMCG product. In which price off is the most preferred one followed by
free samples. Most of the organized retail outlets in Jalandhar used to sell their floor
space to the companies to give free samples to the customers.

8.2. Even customers prefer to try the sample before purchasing of a product. As per our
study, if people like the sample then they go for the purchase. 22 out of 100 respondents
supported this. Even we can see that, these days’ companies are producing trail packs of
many cosmetics and body care products. Because customers are aware and they want to
know the effect and their satisfaction level without investing much so they are preferring
samples.

8.3. From our study we came to know that free sample usually gives fair idea about the
product quality. 28 out of 100 respondents supported this. So we say that companies go
with the mind set of customers and they also try to position the quality of their products
through trials packs or through the free samples.

8.4. With the support of 36% respondents, it is true that if customers are having good
experience with the free samples then they like to go for the repeat purchase. As the mean
difference is tending to 12 so we can say that people agree with this factor of repeat
purchase because of the good experience through free sample.

8.5. We also come to know that people do recommend the products if they like the sample of
it. 35% of the respondents supported it as our mean difference comes out 20. So we can
say that liking of the sample and positive spread of mouth is directly related.

8.6. It is also the outcome of our study that those people who like and have good experience
with free sample like to use the product for a longer period of time. So if samples succeed
to satisfy the customers then it will lead to the brand loyalty.
8.7. We can say that free samples are used by the companies to make their products into the
consideration set of customers’ mind. 34 respondents directly supported this with their
inputs. So free samples effect the products in making them favorite.

8.8. 23 respondents agreed that, they go for the trial of the products and then invest in it for
the longer period of time then they feel that those customers are rational.
8.9. As customers are agreeing that they go for positive word of mouth if they are satisfied,
so we can say that free sample is effective in the marketing of such products. 30% of our
respondents agreed to it.

8.10. As sales promotion schemes create positive word of mouth and supports the marketing
of the product, this all leads to enhance the brand image of that product. 34 respondents
also supported this by agreeing to it.

8.11. Through our study, we came to know that 41% customers prefer to go for the purchase
of those products which they have encountered with the free samples.

8.12. 37% of our respondents agreed that they like to wait to take the advantage of the
schemes. Even we see that the sales of FMCG goes higher during the time of sales. So
impulsive buying of the products gets effected by sales promotions.

8.13. 23 out of 100 respondents agree that they are curious about using free sample also 26
respondents responded to neutral about the statement. Overall we can say that as the sales
are going higher because of the schemes so people are curious about free sample.

8.14. Earlier we came to know that free samples affect the purchase decision so we can say
that customers are paying attention to the free samples schemes. So before purchasing of
FMCG products, customers used to see whether they are getting samples of it or not.

8.16. As per our study, we came to know that those products which are inferior in the quality
used to promote through the free samples. Even those products which are about to expire
and are having less shelf life used to be promoted through free samples.

8.17. As per our research, we came to know that sales promotion affects the purchase
decision of customers.

Through our study, most of the people donot like loyalty program of any of the FMCG
product only 29% are part of the loyalty program. 41% are using it frequently.

. According to our research, we found that loyalty cards does make some help to customers in
choosing particular brand.

. from this we came to know that respondents are not majorly affected by the discounts
on the FMCG products

As per the results being revealed by the research, the customers prefer free sample, discounts,
coupons and loyalty cards before purchasing or investing in the FMCG product for
knowing it attributes and qualities. Therefore, the companies which are new to the market
and also the existing companies may go for distributing free sample for making people
aware about their brand or product.

9.2. The quality of the FMCG products being offered as a free sample, discounts, loyalty
cards to the customers should be similar to the products being sold by the companies. The
products to be sold and free sample should have same attributes and property.

9.3. There are customers who go for purchasing product after using its free sample but them
switch to some other brand after a year or two. Therefore, FMCG companies need to
focus on their regular product development to retain their existing customers for
comparatively longer period of time because it is easy and economical for the companies
to maintain their customer base instead of making new customers.

9.4. Building brand image is one of the most challenging jobs for any FMCG company so to
be there in the consideration set and sales promotion is used to seek the attention of the
customers which fulfils the motive of being in the consideration set. In order to move
ahead from the competitors FMCG companies need to come up with various sales
promotion schemes at regular interval of time.

9.5. As FMCG products are low involvement products so instead of focusing on price
customers go for the known brands and giving free samples instead of price offs will be
 more effective as a consumer sales promotion. Therefore, giving demonstrations which
may give better experience to the customers will have dual benefits:

Direct impact the buying behavior

Makes customers loyal

9.6. The perishable products which are about to expire can be distributed as free samples so
that the potential customers can be converted into profitable customers which is cost
effective in the long run.

9.7. If companies would offer coupons on high cost products, then majority of the customers
will prefer to buy.

9.8. Loyalty cards would play a significant role in influencing customers buying behavior, so
companies should offer focus on providing more loyalty rewards to their loyal customers.

9.9. Discounts are one of the important factor that can change the purchasing behavior of
customers. According to our study, we have analyse that customers are willing to buy
more if discounts are offered by the companies.
CONCLUSION

In our research “Study on sale of FMCG products through various promotional techniques in
Jalandhar, Punjab” we started with the dual objective of studying the impact of free sample on
the purchase decision and its impact on the brand image in FMCG industry among the customers
of Jalandhar Punjab. We carried out our research on 100 sample size through convenience
sampling by going through shopping malls, retail outlets, households and college students in
Jalandhar.

We have made our questionnaire on a 5 point Likert scale where we have termed 1 as strongly
agree whereas 5 as strongly disagree. Through the 20 questions that are there in the questionnaire
we have tried to analyse some factors like purchase decision, brand image, loyalty of customers,
free sample as a marketing tool and quality of products.

Later we have used SPSS software where we have applied factor analysis on all our 34 questions
and have formed separate hypothesis for. After applying factor analysis we came to know that
promotional schemes are highly preferred and even customers prefer to use free sample before
purchasing of FMCG product as it gives fair idea about the product. Though we have found that
sometimes free samples mislead customers from purchasing of some good products as some of
the customers said that the product they get as sample is of better quality than what they actually
pay for. But if customers will be satisfied then it will have positive impact on the brand image of
that particular product.
CHAPTER 5: REFRENCES AND ANNEXURE