Big Bazar Final Project Report

8/11/2019 Big Bazar Final Project Report

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SUMMER TRAINING REPORT

ON

CHERRY PICKING OF FMCG PRODUCTS AT BIG BAZAAR

Dissertation sub itte! In Partia" #u"#i"" ent #or t$e

Post Gra!uate Di%"o a in Business Mana&e ent

B'()

Un!er t$e &ui!an*e o#(


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CONTENTS

Acknowledgement

Preface

Executive Summary

Literature Review

Introduction to the industry

Interpretition Management ierarchy

!omparison with other "usiness

#ovt$ policies related to "usiness

A"out the topic %Market Potential&

'indings And Analysis

Limitation

Summary(conclusion

Suggestions(Recommendations

)i"liography


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ACKNO+,EDGEMENT

A work is never a work of an individual$ *e owe a sense of gratitude to the intelligence and

co+operation of those people who had "een so easy to let us understand what we needed from

time to time for completion of this exclusive pro,ect$

*e want to express our gratitude towards Mr$ #irish Pandey- IEM- Lucknow for giving us an

opportunity to do this pro,ect$

Last "ut not the least- we would like to forward our gratitude to our friends . other faculty

mem"ers who always endured us and stood "y us and without whom we could not haveenvisaged the completion of our pro,ect$

Ra -eetBBA)IIn! 'earRo"" No. /0120

PREFACE

MARKETING is designed in such a way that student can grasp maximum

knowledge and can get practical exposure to the corporate world in minimum possi"le time$


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)usiness schools of today reali/e the importance of practical knowledge over the theoretical

"ase$0he research report is necessary as it provides an opportunity to the researcher in

understanding the industry with special emphasis on the development of skills in analy/ing

and interpreting practical pro"lems through the application of management theories and

techni1ues$ It is a new platform of learning through practical experience$

E3ECUTI4E SUMMARY


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0he phenomenon of organi/ed retailing- in spite of its tremendous growth in the last 2+3 years

in India has ,ust seen the tip of the ice"erg$ As giants like Reliance- )harti+*almart and

others enter the fray- the scenario is going to "ecome more competitive and attractive$ 4nder

this "ackdrop- the fruits and vegeta"le sector %'.5& sector has a tremendous potential to take

advantage of this development$ Right now- with less than 67 of the produce "eing marketed

in an organi/ed way and an inefficient supply chain plaguing the system with losses and

wastages- there is a need to evolve a frame+work or a model of retailing that configures an

efficient supply chain to "enefit the retailers- farmers and the customers alike$

8emographics continue to show a positive report to spur retailing growth$ !onsumers aged 29+:;

years is emerging as the fastest growing consumer group and the mean age of Indians is now

pegged at 2


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Marketing is a societal process "y which individuals and groups o"tain what they need and

want through creating- offering and freely exchanging products and services of value with

others or other wise it is the process of planning and executing the conception- pricing-

promotion and distri"ution of ideas- goods- services to create exchanges that satisfy

individual and organi/ational goals$

Mar5etin& Strate&'

Marketing strategy is a set of o",ectives- policies and rules that leads the company=s

marketing efforts$ It is the marketing approach to accomplish the "read o",ective of the

marketing approach to accomplish the "read o",ective of the marketing plan$ 0he various

process of marketing strategy are given "elow$

6$ Selecting largest markets segmentation

2$ Positioning

3$ Product

:$ Price

;$ Place

@$ Promotion


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segments "y looking at consumer characteristicsB geographic- demographic- and

psychographic$ After segmenting the market then target market selected$

6. Positionin&() 0he positioning is a creative exercise donw with an existing product$ the

well known products generally hold a distinctive position in consumer=s minds$ 0he positioning re1uires that every tangi"le aspect of product- price- place and promotion must

support the chosen positioning strategy$ !ompany should develop a uni1ue selling

proposition %4SP& for each "rand and stick to it- PPL consistently promotes its 8AP fertili/er

"y igher yield at lower cost$ As companies increase the num"er of claims for their "rand-

they risk dis"elief and a loss of clear positioning$ In general a company must avoid four

ma,or positioning errors$ 0hose are under positioning over positioning- confused positioning

and dou"tful positioning$/. Pro!u*t() A product is any offering that can satisfy a need or want$ 0he ma,or types of

"asic offerings are goods- services- experiences- events- places- properties- organi/ations-

information and ideas$ 0he company gives more importance in 1uality- packaging- services

etc$ to satisfy the customers$ 0he products has it=s life cycle$ 0he product strategies are

modified in different stages of product life cycle$

7. Pri*e() It is the most important aspect in company=s point of view$ Price of the product will

"e decided "y the company according to the competitor=s price$

8. P"a*e() 0his plays a ma,or role in the entire marketing system$ the company emphasis on

it=s distri"ution network$ Proper distri"ution network gives proper availa"ility of the product$

2. Pro otion() Promotion is the one of the ma,or aspects in marketing strategies$ )y

adopting various promotional activities the company create strong "rand image$ It also helps

in increasing the "rand awareness$ It includes advertising- sales promotioins and pu"lic

relations etc$

9. Resear*$ an! De:e"o% ent() after testing- the new product manager must develop a

preliminary marketing strategy plan for introducing the new product in to the market$ 0he

plan consists of three parts$ 0he first part descri"es the target market=s si/e- structure and

"ehavior$ 0he second part out lines the planned price- distri"ution strategy and marketing

"udget for the first year$ 0he third part of the development descri"es the long run sales and

profit goals and marketing mix strategy over time$


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MARKETING MI3

Tar&et Mar5et

Pro!u*t Pri*e Pro otion P"a*e

Product variety List price Sales promotion !hannels

Cuality 8iscounts Advertising !overage

8esign Allowances Sales forces Assortments

'eatures Payment period Pu"lic relation Locations

)rand name !redit terms 8irect marketing Inventory

Packaging 0ransport

Si/es

Services

*arranties

Returns

INTRODUCTION TO THE INDUSTRY


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Products which have a 1uick turnover- and relatively low cost are known as 'ast Moving

!onsumer #oods %'M!#&$ 'M!# products are those that get replaced within a year$

Examples of 'M!# generally include a wide range of fre1uently purchased consumer

products such as toiletries- soap- cosmetics- tooth cleaning products- shaving products and

detergents- as well as other non+dura"les such as glassware- "ul"s- "atteries- paper products-

and plastic goods$ 'M!# may also include pharmaceuticals- consumer electronics- packaged

food products- soft drinks- tissue paper- and chocolate "ars$

India s 'M!# sector is the fourth largest sector in the economy and creates employment for

more than three million people in downstream activities$ Its principal constituents are

ousehold !are- Personal !are and 'ood . )everages$

0he total 'M!# market is in excess of Rs$ ;-999 !rores$ It iscurrently growing at dou"le

digit growth rate and is expected to maintain a high growth rate$ 'M!# Industry is

characteri/ed "y a well esta"lished distri"ution network- low penetration levels- low

operating cost- lower per capita consumption and intense competition "etween the organi/ed

and unorgani/ed segments$

0he Rs ;-999+crore Indian 'M!# industry is expected to register a healthy growth in the

third 1uarter of 299 +9? despite the economic downturn$ 0he industry is expected to register

a 6;7 growth in C3 299 +9? as compared to the corresponding period last year$ 4nlike other

sectors- the 'M!# industry did not slow down since C2 299 $ the industry is doing pretty

well- "ucking the trend$ As it is meeting the every+day demands of consumers- it will

continue to grow$

Market share movements indicate that companies such as Marico Ltd and >estle India Ltd-

with domination in their key categories- have improved their market shares and outperformed

peers in the 'M!# sector$ 0his has "een also aided "y the lack of competition in the

respective categories$ Single product leaders such as !olgate Palmolive India Ltd and

)ritannia Industries Ltd have also witnessed strength in their respective categories- aided

"yinnovations and strong distri"ution$ !onsumer Products Ltd in soaps and 8a"ur $

In!ustr' Cate&or' an! Pro!u*ts

Household Care


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Persona" +as$()

0he market si/e of personal wash is estimated to "e around Rs$ -399 !r$ 0he personal wash

can "e segregated into three segmentsD Premium- Economy and Popular$ 0he penetration

level of soaps is ?2 per cent$ It is availa"le in ; million retail stores- out of which- irma- enkel and Proctor . #am"le$

Personal Care

S5in Care()

0he total skin care market is estimated to "e around Rs$ 3-:99 !r$ 0he skin care market is at a

primary stage in India$ 0he penetration level of this segment in India is around 29 per cent$

*ith changing life styles- increase in disposa"le incomes- greater product choice and

availa"ility- people are "ecoming aware a"out personal grooming$ 0he ma,or players in this

segment are industan 4nilever with a market share of ;: per cent- fol+lowed "y !avinGare

with a market share of 62 per cent and #odre, with a market share of 3 per cent$

Hair Care()

0he hair care market in India is estimated at around Rs$ 3- 99 !r$ 0he hair care market can "e

segmented into hair oils- shampoos- hair colorants . conditioners- and hair gels$ Marico is

the leader in air Fil segment with market share of 33 per centB 8a"ur occu+pies second position at 6< per cent$


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S$a %oos()

0he Indian shampoo market is estimated to "e around Rs$ 2-


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Co##ee ()

0he Indian "everage industry faces over supply in segments like coffee and tea$ owever-

more than ;9 per cent of the market share is in unpacked or loose form$ 0he ma,or players in

this segment are >estlH- 4L and 0ata 0ea$

Gro;t$ Pros%e*t

,ar&e Mar5et


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India has a population of more than 6$6;9 )illions which is ,ust "ehind !hina$ According to

the estimates- "y 2939 India population will "e around 6$:;9 )illion and will surpass !hina

to "ecome the *orld largest in terms of population$ 'M!# Industry which is directly related

to the population is expected to maintain a ro"ust growth rate$

S%en!in& PatternAn increase is spending pattern has "een witnessed in Indian 'M!# market$ 0here is an

upward trend in ur"an as well as rural market and also an increase in spending in organ+i/ed

retail sector$ An increase in disposa"le incomeof household mainly "ecause of in+crease in

nuclear family where "oth the hus"and and wife are earning- has leads to growth rate in

'M!# goods$

C$an&in& Pro#i"e an! Min! Set o# Consu erPeople are "ecoming conscious a"out health and hygienic$ 0here is a change in the mind set

of the !onsumer and now looking at Money for 5alueJ rather than 5alue for MoneyJ$ *e

have seen willingness in consumers to move to evolved products( "rands- "ecause of

changing lifestyles- rising disposa"le income etc$ !onsumers are switching from economy to

premium product even we have witnessed a sharp increase in the sales of packaged water and

water purifier$ 'indings according to a recent survey "y A$ !$ >ielsen shows a"out


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SourcesD >aukri u"- I)E'- !hennai Fnline

SourcesD Statistical Futline of India %2996+92&- >!AER

Mar5et O%%ortunities

4ast Rura" Mar5et


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Rural India accounts for more than


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0he oral care industry- especially toothpastes- remains under penetrated in India with

penetration rates around ;9 per cent$ *ith rise in per capita incomes and awareness of oral

hygiene- the growth potential is huge$ Lower price and smaller packs are also likely to drive

potential up trading$

Beverages

Indian tea market is dominated "y unorgani/ed players$ More than ;97 of the market share is

capture "y unorgani/ed players highlighting high potential for organi/ed players$

0he Indian 'M!# sector is the fourth largest sector in the economy with a total market si/e

in excess of 4SK 63$6 "illion$ It has a strong M>! presence and is characterised "y a

wellesta"lished distri"ution network- intense competition "etween the organised and

unorganised segments and low operational cost$ Availa"ility of key raw materials- cheaper

la"our costs and presence across the entire value chain gives India a competitive advantage$

0he 'M!# market is set to tre"le from 4SK 66$@ "illion in 2993 to 4SK 33$: "illion in 296;$

Penetration level as well as per capita consumption in most product categories like ,ams-

toothpaste- skin care- hair wash etc in India is low indicating the untapped market

potential$ )urgeoning Indian population- particularly the middle class and the rural segments-

presents an opportunity to makers of "randed products to convert consumers to "randed

products$

#rowth is also likely to come from consumer =upgrading= in the matured product categories$

*ith 299 million people expected to shift to processed and packaged food "y 2969- India

needs around 4SK 2 "illion of investment in the food+processing industry$

Large domestic market

India is one of the largest emerging markets- with a population of over one "illion$ India is

one of the largest economies in the world in terms of purchasing power and has a strong

middle class "ase of 399 million$


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Rural and ur"an potential

Rural+ur"an profile

Population 2996+92 %mn household& ;3 63;

Population 299?+69 %mn household& @? 6;3

7 8istri"ution %2996+92& 2


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SourceD GSA 0echnopak !onsumer Futlook 299:$

SourceD Euro monitor$

!hange in the Indian consumer profileD


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SourceD Statistical Futline of India %2992+93&$

Rapid ur"anisation- increased literacy and rising per capita income- have all caused rapid

growth and change in demand patterns- leading to an explosion of new opportunities$ Around

:; per cent of the population in India is "elow 29 years of age and the young population is set

to rise further$ Aspiration levels in this age group have "een fuelled "y greater media

exposure- unleashing a latent demand with more money and a new mindset$

8emand+supply gap!urrently- only a small percentage of the raw materials in India are processed into value

added products even as the demand for processed and convenience food is on the rise$ 0his

demand supply gap indicates an untapped opportunity in areas such as packaged form-

convenience food and drinks- milk products etc$ In the personal care segment- the low

penetration rate in "oth the rural and ur"an areas indicates a market potential$

INDIA COMPETITI4ENESS AND COMPARISON +ITH THE +OR,D MARKETS


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Materials availa"ility

India has a diverse agro+climatic condition due to which there exists a wide+ranging and large

raw material "ase suita"le for food processing industries$ India is the largest producer of

livestock- milk- sugarcane- coconut- spices and cashew and is the second largest producer of rice- wheat and fruits . vegeta"les$ India also has an ample supply of caustic soda and soda

ash- the raw materials in the production of soaps and detergents India produced 6$@ million

tonnes of caustic soda in 2993+9:$ 0ata !hemicals- one of the largest producers of synthetic

soda ash in the world is located in India$ 0he availa"ility of these raw materials gives

India the locational advantage$

SourceD 8IPP$

Apart from the advantage in terms of ample raw material availa"ility- existence of low+cost

la"our force also works in favour of India$ La"our cost in India is amongst the lowest in

Asian countries$ Easy raw material availa"ility and low la"our costs have resulted in a lower

cost of production$ Many multi+nationals have set up large low cost production "ases in India

to outsource for domestic as well as export markets$

Penetration and per capita consumption

Rural + ur"an penetration %2992&


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SourceD LL- Indian Readership Survey$

Penetration level in most product categories like ,ams- tooth paste- skin care- hair wash etc in

India is low$ 0he contrast is particularly striking "etween the rural and ur"an segments + the


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average consumption "y rural households is much lower than their ur"an counterparts$ Low

penetration indicates the existence of unsaturated markets- which are likely to expand as the

income levels rise$ 0his provides an excellent opportunity for the industry players

in the form of a vastly untapped market$

Moreover- per capita consumption in most of the 'M!# categories %including the high

penetration categories& in India is low as compared to "oth the developed markets and other

emerging economies$ A rise in per capita consumption- with improvement in incomes and

afforda"ility and change in tastes and preferences- is further expected to "oost 'M!#

demand$ #rowth is also likely to come from consumer upgrading - especially in the matured

product categories$

ousehold income distri"ution 2993

ousehold income distri"ution 296;


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8emand for 'M!# products is set to "oom "y almost @9 per cent "y 299< and more than 699

per cent "y 296;$ 0his will "e driven "y the rise in share of middle class %defined as the

clim"ers and consuming class& from @< per cent in 2993 to per cent in 296;$ 0he "oom in

various consumer categories- further- indicates a latent demand for various product segments$

'or example- the upper end of very rich and a part of the consuming class indicate a small "ut

rapidly growing segment for "randed products$ 0he middle segment- on the other hand-

indicates a large market for the mass end products$

0he )RI!s report indicates that India=s per capita disposa"le income- currently at 4SK ;;@

per annum- will rise to 4SK 66;9 "y 296; + another 'M!# demand driver$ Spurt in the

industrial and services sector growth is also likely to "oost the ur"an consumption

demand$

Rise in Indian disposa"le income %4SK(annum&


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MARGE0 FPPFR04>I0IES 'FR I>5ES0ME>0

SourceD Panel data


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According to estimates "ased on !hina=s current per capitaconsumption- the Indian 'M!#

market is set to tre"le from4SK 66$@ "illion in 2993 to 4SK 33$: "illion in 296;$ 0he

dominanceof Indian markets "y un"randed products- change in eating ha"its and the

increased afforda"ility of the growing Indian population presents an opportunity to makers of

"randed products- who can convert consumers to "randed products$


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CONSUMER SA,ES PROMOTINA, ACTI4ITIES

0he importance of consumer sales promotion in the marketing mix of the fast moving

consumer goods %'M!#& category throughout the world has increased$ !ompanies spend

considera"le time in planning such activities$ owever- in order to enhance the effectiveness

of these activities- manufacturers should understand consumer and retailer interpretations of

their promotional activities$ 0he study here pertains to consumerNs perceptions regarding

sales promotion$ Some past researches have suggested that promotion itself has an effect on

the perceived value of the "rand$ 0his is "ecause promotions provide utilitarian "enefits such

as monetary savings- added value- increased 1uality and convenience as well as hedonic

"enefits such as entertainment- exploration and self+expression$

)roadly speaking most of the companies using Marketing Mix which includesO

Price

Place %!hannel of 8istri"ution&

Product

Pro otion

0hese are the four "asic pillar of marketing mix$ Most of the marketing strategies are "uilt on

the "asis of these criteria$

Promotion is one of the important elements of marketing mix$ 0here are so many elements of

promotion such as O

Advertising

8irect Marketing

Pu"lic Relations

Sa"es Pro otion

0raditionally- sales Promotions have "een used "y marketer to increase sales in the short

term$ owever- in the last few decades this communication tool has evolved and now is


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considered from a strategic point of view$ 'or this reason- it is necessary to reali/e new

studies in this area and study how consumers evaluate sales promotions$

Sales promotions have grown in "oth importance and fre1uency over the past few decades$

Although an accurate estimate for total sales promotions expenditures does not exist- we can

"e sure that the trend is up$

Sales promotion serves three essential rolesD It informs- persuades and reminds prospective

customers a"out a company and its products$ Even the most useful product or "rand will "e a

failure if no one knows that it is availa"le$ As we know- channels of distri"ution take more

time in creating awareness "ecause a product has to pass through many hands "etween a

producer and consumers$

0herefore- a producer has to inform channel mem"ers as well as ultimate consumers a"out

the attri"utes and availa"ility of his products$ 0he second purpose of promotion is persuasion$

0he cut throat competition among different products puts tremendous pressure on their

manufacturers and they are compelled to undertake sales promotion activities$ 0he third

purpose of promotion is reminding consumers a"out products availa"ility and its potential to

satisfy their needs$

'rom these elements Sales Promotion is the element which is in the focus of this pro,ect$

'urther Sales Promotion is 1uite "road term it includes O

Tra!e Oriente! Sa"es Pro otion

Consu er Oriente! Sa"es Pro otion

Tra!e Oriente! Sa"es Pro otion(

0rade Friented Sales Promotion aimed to motivate channel mem"er of the company

and to encourage them to push companyNs product$ 0rade Friented Sales Promotion includes

dealer contest and incentives- trade allowances$ Point+of+purchase displays- sales training

programs- trade shows- cooperative advertising- and other programs designed to motivate


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distri"utors and retailers to carry a product and make an extra effort to push it to their

customers

Consu er Oriente! Sa"es Pro otion(

!onsumer Friented Sales Promotion is the main topic of this pro,ect$ ere emphasi/e

is given to motivate consumer to increase sales$ !onsumer Friented Sales Promotion includes

Sampling- !ouponing- Premiums- !ontest- Refunds- Re"ates- )onus PackNs- Price+off- Event

marketing etc$

De#inition(

'or the purpose of this study- following definitions of sales promotion were kept in mind$

Gotler defines sales promotion asD Sales promotion consists of a diverse collection of

incentive tools- mostly short+term designed to stimulate 1uicker and(or greater purchase of

particular products(services "y consumers or the trade$J

Roger Strang has given a more simplistic definition i$e$ sales promotions are short+term

incentives to encourage purchase or sales of a product or service$J

ence- any forms of incentives %price cut or value added nature& offered for short period

either to trade or consumers are considered as sales promotion activities$

Mar5eter?s uses *onsu er oriente! sa"es %ro otion too"s #or t$e #o""o;in& reasons(

0o increase short term sales

0o induce trial

0o reduce inventory

0o esta"lish a "rand name

0o make cross selling

0o cope up with competition

0o avoid advertising clutter


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Too"s o# Consu er Oriente! Sa"es Pro otion(

0here are so many tools or techni1ue availa"le to the marketers for achieving o",ective of

sales promotion$ 0hese tools should "e used considering all other factors affecting such as

cost- time- competitors- availa"ility of goods etc$ 0hese tools are as underO

6$ Sampling

2$ !ouponing

3$ Price+Fff

:$ Premium

;$ !ontest

@$ )onus Pack

LetNs have look at each toolO

@. Sa %"in&(

Sampling is an important and very fre1uently used sales promotion tool$ In sampling

consumers are given some 1uantity of a product for no charge to induce trial$ Sampling is the

most effective way to generate trial- at the same time it is most expensive tools$ Sampling is

also used for esta"lished product$ Marketers of packaged+goods products such as food- health

care items- cosmetics- and toiletries are heavy users of sampling$

Bene#its o# Sa %"in&(

'rom the consumers point of view Sampling is risk free way to try new

product$

*ith the help of sampling scheme consumer can experience directly which is

not possi"le in any kind of advertisement$

Sampling is "est way to induce trial when product feature are very difficult to

descri"e through advertisement$


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,i itation o# Sa %"in&(

0he main draw"ack of sampling is of cost$ *hile giving free sample itre1uires financial soundness "ecause otherwise company canNt afford it$

*hile giving free sample it is necessary that "rand have some uni1ue 1uality$

0here is some product which re1uires long time to show result due to that it is

possi"le that the sampling scheme may not give "enefit as expected$ E$g$ Skin

cream re1uires time to show result in this case it is possi"le that customer

might not respond when there is no such scheme$

Distribution o# Sa %"es(

Door)to)!oor sa %"in&( ere product is directly delivered to the prospects

residence$ 0his distri"ution method is very expensive "ecause of la"our cost$

)ut it can "e cost effective if marketer has exact information of target market$

Sa %"in& t$rou&$ t$e ai"( 0his method can "e used when product is

compara"le small- lightweight- and nonperisha"le$ In this method marketer

has control over where and when the product will "e distri"uted$ 0he main

draw"ack is of postal restrictions and increasing postal rates$

In)store sa %"in&( 0his method re1uires great support from retailers$ 0his

method is more used in product like food- perfume- etc$ ere ta"le or "oothset+up in the store$ In this method consumer can directly taste and than can

purchase$

On)%a*5a&e sa %"in&( In this method free sample is attached to another

product$ 0his is cost effective method "ut it is also not free from draw"ack as

it is distri"uted only to consumers who purchase the item to which it is

attached the sample will not reach nonusers of the carrier "rand$


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Ot$er Met$o!s( 0o distri"ute free sample- methods like newspaper-

maga/ine are used$ Send sample to those who call tall free num"er$ 0horough

internet free sample can "e distri"uted like film clip$

6. Cou%onin&(

!ouponing is the oldest and most widely used way of sales promotion$ !oupons have "een

used since 6 ?;$ It is mostly used "y packaged goods$ It is worthwhile to use coupon as a

promotion tool "ecause data shows that market for packaged goods increased from 6@ "illion

in 6?@ to 369 "illion in 6??:$ 0o "oost up the sales not only manufacturer "ut retailers

personally can also used$

Bene#its o# Cou%onin&(

!ouponing leads to price reductions so as to encourage price sensitive

customers$

>on users can try a product which may leads to regular sales$

Reduction in price reduces the consumerNs perceived risk associated with new

product such as financial risk- social risk- psychological risk etc$

!oupons can "e used not only for newly launched product "ut it can also use

for already esta"lished "rand$

,i itations o# Cou%onin&(

It is very difficult to estimate num"er of "uyers$

!ost of coupon and reduction given as per scheme leads to reduction in

over all profit of the firm$

It may to target towards actual "uyers- some other may got "enefit of it

who are actually not interested$

It can "e manipulated "y retailers and company may not get the resultexpected$


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Distribution o# *ou%ons(

0he use of newspaper and maga/ine as a vehicle for distri"uting coupon was

used 1uite freely$ >ewspaper and maga/ine gives advantage of marketselectivity- shorter lead time and cost efficiency$ )ut now a day these media is

not so much effective$

5ery widely used method for distri"uting coupon is placing coupons either

inside or on the outside of the package$

8istri"ution through newspaper freestanding insertsN is "y far the most

popular method for delivering coupons to consumers$

/. Pri*e)o##(

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 "ut the use

of this techni1ue should "e carefully considered in the current market situation$

Price+off is the most preferred sales promotion techni1ue "ecause consumers response very

positively to this scheme$ >ot only that "ut it also cause large increase in sales volume$ Price+

off reductions are typically offered tight on the package through specially marked price

packs$ E$g$ Grack Qack offers 397 Price+off$

#enerally Price+offs given from 69 to ;9 percent of the regular price$ ere reduction is

coming out from manufacturerNs profit margin- and not the retailerNs$

Bene#its o# Pri*e)o##(

Since marketers "are the pro"a"le reduction in price at cost of his own profit

so he can control over the price+off scheme$

Price+off can "e a strong influence at the point of purchase when price

comparisons are "eing made$

Price+off promotion can also encourage consumers to purchase larger

1uantities$


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,i itation o# Pri*e)o##(

Retailers may create pricing and inventory pro"lems "ecause retailers will not

accept packages with a specific price shown$ 0o the company it is very expensive tool of sales promotion

7. Pre iu (

Premium is an offer of an item either free or at a low price $*ith consumer spending more-

companies will look to incentive programs as a way to maintain customer loyalty and capturea greater share of the market$ !reative and will+constructed premium promotions are known

delivering "rand enhancing and sales "uilding results$

!urrently marketers ask themselves how to select a premium$ 0here are some guidelines for

choosing a premiumD Fffer a "rand that enhances your "rand- and capitali/e on the e1uity of

the "rands logo "y incorporating it into the premium item$

T;o basi* t'%e o# %re iu (

@. Free Pre iu ( 'ree premiums are small gifts included in the product

package or sent to consumers who mail in a re1uest along with a proof or

purchase$ 'ree Premium includes toys- "alls- trading card or other items$ 'ree

premium have high impulse value and can provide an extra incentive to "uy

the product$ Even though it is also facing some pro"lems like cost factor-

which results from the premium itself as well as from extra packaging that

may "e needed$ Again retailers can manipulate with customer and with the

free premium scheme$

6. Se"#),i ui!atin& Pre iu s( In Self+Li1uidating Premiums consumers are

re1uires to pay some or all of the cost of the premium plus handling and

mailing costs$ 0his tool is more useful to the retailers to gain extra profit as he


34/84

can purchase from manufacturer and than can sale it to final user at lower cost$

ere the aim is not to make profit on the premium item "ut rather ,ust to cover

costs and offer a value to the consumer$ Fffering values to consumers through

the premium products can create interest in the "rand and goodwill that

enhances the "rands image$

Self+Li1uidating Premiums also has some limitation$ It has very low

redemption rate$ !onsumers are not always responds to this type of sales

promotion scheme$

8. Contest(

A contest is a promotion where consumers compete for pri/es or money on the "asis of skills

or a"ility$ 0o the customers contest is more attractive "ecause they have mentality that they

can win "ig pri/es "eing offered$ !ontest usually provide

a purchase incentive "y re1uiring a proof of purchase to enter or an entry form that is

availa"le from a dealer or advertisementB some contest re1uire consumers to read an ad or

package or visit a store display to gather information needed to enter$ Marketers must "e

careful not to make their contests too difficult to enter- as doing so might discourage

participation among key prospects in the targets audience$

0here is another term called =S;ee%sta5es> which is promotion where winners are

determined purely "y chanceB it does not re1uire a proof of purchase as condition for entry$

Entrants need only su"mit their names for the pri/e drawing$ It is easier to enter thatNs why

sweepstakes more customers than contest$

Bene#its o# Contest(

!ontest and sweepstakes can get the customers involved with a "rand "y

making the promotion product relevant$


35/84

Marketers can use contests and sweepstakes to "uild "rand e1uity "y

connecting the pri/es to the lifestyle- needs or interests of the target audience$

!onsumers can know more a"out the product as well as a"out company as

direct involvement increases$

,i itation o# Contest(

In contest and sweepstakes winners are given pri/es randomly so customers

reluctant to pay more attention towards it$

Marketers have cut "ack the uses of these promotional tools due to its lower

effectiveness and fears that consumers might "ecome dependent on them$ A ma,or pro"lem in contest and sweepstakes is that of participation "y

professionals or ho""yists who su"mit many entries "ut have no intention of

purchasing the product$

'urther- for marketers it increases so many other activities like managing all

the entries and selecting winner from them and delivering pri/e to them which

also re1uires so many time and it also increase cost$

2. Bonus Pa*5(

)onus packs offer the consumer an extra amount of a product at the regular price "y

providing larger containers or extra units$ )onus is also fre1uently used sales promotion tool

"ecause consumer response towards "onus pack is very positive$ 0he additional value of a

"onus pack is generally o"vious to the consumer and can have a strong impact on the

purchase decision at the time of purchase$

Bene#its #ro Bonus Pa*5(

It gives a direct way to provide extra value without having to get involved

with complicated coupons or refund offers$

)onus can "e a good answer to competitorNs promotion or introduction of a

new "rand$


36/84

)onus packs result in larger purchase orders and favora"le display space in the

store if the relationships with retailers are good$

,i itation o# Bonus Pa*5(

It re1uires additional space so retailers or distri"utors may create pro"lem if

the relation with distri"utors are not good as it does not give any extra "enefit

to them$

Another pro"lem is that "onus packs may appeal primarily to current users

who pro"a"ly would have purchase the "rand anyway or to promotion

sensitive consumers who may not "ecome loyal to the "rand$ A common limitation is of cost$ As marketers giving extra 1uantity it makes

cost to the company$

0hese are the main consumer oriented sales promotion tools Marketers use any of them or

more then one at a time depending on the sales promotion strategy$ 0here are some other

sales promotion tools like Refunds and Re"ates- 're1uency Programs- Event Marketing etc to

name a few- "ut these tools are used very less compared to earlier noted main tools$

0he evaluation of sales promotion tools is measured in terms of their a"ility to accomplish

specific o",ectives and consider whether the impact of the promotion will "e immediate or

delayed$


37/84

Fa*tors In#"uen*in& Consu er Oriente! sa"es %ro otion(

Mainly four factors should "e taken into account while determining the sales promotion

programme$

0arget market

>ature of product

Stage of product life cycle

)udget availa"le for promotion

@. Tar&et Mar5et(

*hile doing sales promotion- marketer must know who their target market is-

otherwise there is no use of all effort "ecause it leads to no where$ A target market can "e in

any of the stages of "uying hierarchy i$e$ awareness- knowledge- liking- preferences-

conviction and purchase$ Each stage defines a possi"le goal of promotion$

6. Nature o# t$e %ro!u*t(

0here are various product attri"utes which influence sales promotional strategy$ *hen

the unit price is low the manufacturer as well as the customer has low risk "ut he can get the

"enefit of mass marketing$ 0herefore- mass marketing re1uires mass sales promotion

schemes$ Sales promotion scheme differ for products like its dura"ility- perisha"le goods etc$

/. Sta&e o# %ro!u*t ,i#e C'*"e(

Sales promotion strategies are influenced "y the life cycle of a product$ *hen a new

product introduced- prospective "uyers must "e informed a"out its existence and its "enefits

and middlemen must "e convinced to stock it$ Later- if a product "ecomes successful-

competition intensifies and more emphasis is placed on sales promotion to increase its sales$

7. Bu!&et A:ai"ab"e #or Pro otion(


38/84

0he funds availa"le for promotion are the ultimate determinant of the promotional

programme$ A "usiness with ample funds can make more effective use of sales promotion

programme than a firm with limited financial resources$ 0he "udget for sales promotion can

"e prepared "y the following methodsO

Percentage of Sales

'ixed funds availa"le for sales promotion

'ollowing the competition- and

)udgeting "y o",ective$

+$' !o Sa"es %ro otion s*$e es a##e*t sa"es

0here are three mechanisms "ehind these facts$ It is Purchase 1uantity- )rand switching and

!ategory expansion$

'irst- consumer can increase the 1uantity they "uy ,ust "ecause the product is on sale$

Second- consumers are inducing to purchase another "rand different from the one they would

have purchased when there is no promotional incentive$

'inally- consumerNs total consumption of the product category is increased "y the promotion$

owever- in the long term this positive effect may "e diluted "ecause a promotional

campaign has no permanent effect in the sales of the firm


39/84

Sa"es Pro otion Strate&'(

Sales are the life"lood of a "usiness- without sales there would "e no "usiness in the first

placeB therefore it is very important that if a "usiness wants to succeed- it should have a sales

promotion strategy in mind$ 0he primary o",ective of a sales promotion is to improve a

companyNs sales "y predicting and modifying your target customerNs purchasing "ehavior and

patterns$

Sales promotion is very important as it not only helps to "oost sales "ut it also helps a

"usiness to draw new customers while at the same time retaining older ones$ 0here are a

variety of sales promotional strategies that a "usiness 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 "oost the sales of a product

or service$ 0his can "e done through an advertising campaign- pu"lic relation activities- a free

sampling campaign- a free gift campaign- a trading stamps campaign- through demonstrations

and exhi"itions- through pri/e giving competitions- through temporary price cuts- and through

door+to+door sales- telemarketing- personal sales letters- and emails$

0he importance of a sales promotion strategy cannot "e underestimated$ 0his is "ecause a

sales promotion strategy is important to a "usiness "oosting its sales$

*hen developing a sales promotion strategy for your "usiness- it is important that you keep

the following points in mind$

!onsumer attitudes and "uying patterns

our "rand strategy

our competitive strategy

our advertising strategy

Fther external factors that can influence products availa"ility and pricing$


40/84

T$ere are t$ree t'%es o# sa"es %ro otion strate&ies(

A push strategy

A pull strategy or A com"ination of the two

A Pus$ Strate&'(

A pushN sales promotion strategy involves pushingN distri"utors and retailers to sell your

products and services to the consumer "y offering various kinds of promotions and personal

selling efforts$ *hat 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$ 0he "asic o",ective of

this strategy is to persuade retailers- wholesalers and distri"utors to carry your "rand- give it

shelf space- promote it "y advertising- and ultimately pushN it forward to the consumer$

0ypical push sales promotion strategies includeB "uy+"ack guarantees- free trials- contests-

discounts- and specialty advertising items$

A Pu"" Strate&'(

A pullN sales promotion strategy focuses more on the consumer instead of the reseller or

distri"utor$ 0his strategy involves getting the consumer to pullN or purchase the

product(services directly from the company itself$ 0his strategy targets its marketing efforts

directly on the consumers with the hope that it will stimulate interest and demand for the

product$ 0his pull strategy is often used when distri"utors are reluctant to carry or distri"ute a

product$ 0ypical pull sales promotion strategies includeB samples- coupons- cash refunds or re"ates- loyalty programs and rewards- contests- sweepstakes- games- and point+of+purchase

displays$

A Co bination o# T;o Strate&ies(


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A com"inationN sales promotion strategy is ,ust thatB it is a com"ination of a push and a pull

strategy$ It focuses "oth on the distri"utor as well as the consumers- targeting "oth parties

directly$ It offers consumer incentives side "y side with dealer discounts$

Sa"es Pro otion an! !i##erent t$eories(

0here are certain theories which can "e considered "y the marketers while deciding sales

promotion strategies$ It should "e noted that these theories are not final conclusion "ut it

helps in making "etter decisions$ ere I will try to ela"orate on two theory i$e$ theory of

attitude and theory of prospects$

Sa"es Pro otion an! t$eor' o# Attitu!e(

Multi attri"ute models of attitude %'ish"ein and A,/en- 6?


42/84

Some marketers applied the theory of reasoned action to understand consumerNs decision to

use coupons$ As per the model- "ehavior towards coupons would "e influenced "y consumer

intentions to use coupons$ !onsumersN intention to use coupons would "e determined "y their

attitudes and su",ective norms$ !onsumersN attitudes would "e formed through their "eliefs in

the rewards and costs of using coupons while su",ective norms would "e formed through

consumersN perception of whether important others think they should expend the effort to

clip- save and use coupons$ It is found that "eliefs in the rewards of using coupons had high

positive correlation with attitude while inconveniences and encum"rances had weak negative

correlation with attitude

Although attitude models provide important insights into the consumer decision+making

process- researchers have found discrepancies "etween stated attitudes and actual "ehavior$ in

several studies %Perry and #illespie- 6?


43/84

the purchase price of a product and not lead to a reduction of internal reference price$ Results

showed that price promotions led to a lower internal reference price while non price

promotions did not affect internal reference price$

As per prospect theory to predict that price promotions would "e viewed as reduced losses

and chosen less often than non price promotion which would "e viewed as gains$ owever it

is shown that an almost e1ual num"er of su",ects chose the non price promotion %a premium

offer& as compared to the price promotion %a price discount&$ 0he reasoning that price

promotions would "e viewed as reduced losses and preferred less as compared to non price

promotions which would "e viewed as gains was not supported "y the results of the study$

Prospect theory "ased prediction that consumers will perceive non+price promotions as

gainsN and price promotions as reduced lossesN is not "ased on a precise application of the

theory$ !ontrary predictions can "e derived from the theory$ It can "e argued that consumers

will perceive a price promotion as a gain as the price reduction offered reduces the lossN

experienced "y the purchase price$


44/84

Sa"es %ro otion #ro t$e retai"er?s %oint o# :ie;(

Per*e%tions on S*$e e Pre#eren*e

It was found that retailer perceived price offs as a "etter 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 )onus packs- Premium- !ontests etc$ Retailers preferred price

offs the most- then "onus pack- premium- contests- in order of importance$

Per*e%tions about Bu'in& Ro"es

Retailers viewed that the person who came to the shop %who may "e a maid- son-

daughter- daughter+in+law and child& was the decider of a toilet soap "rand and not the

Income provider %e$g$ head of the family&$ It could "e inferred that visi"ility of information

a"out the sales promotion activity at the point of purchase could result into the purchase of a

promoted "rand$

Per*e%tions about t$eir ro"e in !e*ision) a5in&

Retailer had relatively very low influence in affecting choice$ It could "e inferred that

visi"ility and awareness a"out the scheme were the critical success factors so that pull could

"e created$

Per*e%tions about Res%onse to Sa"es Pro otion O##ers

0hey "elieved that younger age+groups were more experimental in nature- amena"le

to trying new "rands- and sought(looked for or asked whether there were any& sales

promotion schemes running on any toilet soap at the time of purchase$


45/84

Per*e%tions about Co uni*ations o# Sa"es Pro otion S*$e es

Retailers perceived that role of word of mouth and television advertising played an

important part in providing information inputs to consumers regarding sales promotion

activities$

4ariations in In#or ation F"o;

Smaller %non+supermarket- small format store& retailers received relatively less

support compared to supermarkets in terms of servicing- margins- information a"out sales

promotion activities from the dealers$ Many a times small retailers were only informed

ver"ally a"out sales promotion schemes "y the dealer salesmen during the scheduled weekly

visits$

Dea"er)Retai"er D'na i*s

At the time of sales promotion activities- dealers had tendency to push unwanted

stocks onto the smaller retailers$ In fact these retailers preferred to stock variety of "rands and

wanted payment for shelf and window display to increase traffic into their store$ owever-

supermarkets and "ig retailers were pampered and given special services and given "etter

margins and "etter allowances$

Mar&ins

It was found that in sales promotion schemes margins varied from @ to6;7 depending

of the si/e of the retail outlet- "argaining power of a retailer- 1uantity ordered "y him etc$

Mostly margins were linked to si/e of the volumes that were ordered$

Per*e%tions about ter s an! *on!itions

Retailers were not found to "e happy with sales promotion schemes where their

margins were cut on the pretext of ,ust fast movement of inventory of the "rand "eing

promoted$ Also if additional incentive was offered it was su",ect to minimum performancere1uirement$


46/84

Nature o# POP

Retailers indicated that most of the PFP %Point of Purchase& materials were meant for

"rand advertisement and not for giving information regarding the schemes$ 0hus it could "e

inferred that companyNs follow up was not ade1uate$

Ser:i*in& !urin& !uration o# S*$e e

In stock+out situation during the running of the sales promotion schemes- smaller

retailers had to wait for replenishment of stocks till the next scheduled weekly visit "y the

dealer salesman "ut "ig retailers were serviced on telephonic re1uest for replenishment of

stocks$ 0his clearly indicated the disparity in treatment$

Prob"e o# "e#t)o:er

A leftover stock at the end of any scheme was re1uired to "e sold "y the retailers

"efore they ordered fresh stocks$ In case of "onus packs scheme- leftover stock was often

dismantled %cut open "uy one get one free& and sold them individually as a regular soap$ 0his

approach of the company leads to misappropriation which in turn could result in adverse

"rand image$

Gi#ts #or Retai"er oti:ation

!ompanies at times were rewarding retailers "y giving free gifts like thermos flasks

or clocks if they sold more than certain 1uantity in a given period$ !ompanies were making a

half+hearted effort to motivate retailers$

Per*e%tions about ass e!ia announ*e ents

Retailers viewed that whenever sales promotion scheme was announced on 05- it

created pull and they were more than willing to stock such "rands$ 'or example Medimix and

8ettol contest was not advertised on 05- hence there was very little awareness leading to


47/84

unsold stock till @ months$ *hile Lux #old Star which was heavily promoted on 0$5$ is

recalled even today$

Post Pro otion Be$a:iour

Retailers o"served that in most cases sales promotion scheme on a "rand might

encourage a "uyer to switch a "rand temporarily "ut he would revert "ack to original "rand

after promotion$

Han!"in& Prob"e s

Many a timeNs retailers had to handle various sales promotion offers simultaneously in

a category and also across categories and there was no formal communication planning either

from the dealer or the company$ Remem"ering each offer and handling was a pro"lem

especially for a small retailer which was often an as one+man show$


48/84

Sa"es Pro otion #ro t$e Consu ers %oint o# :ie;(

+i""in&ness to bu' on sa"es %ro otion o##er

Sixty per cent of the sample did not show willingness to "uy a "rand due to promotion

while 397 showed willingness and 697 were not sure$ 0his indicates that when 397 showed

willingness and 697 consumers who were not sure- these groups might "e lured through

innovative and lucrative sales promotion offer$

Abi"it' to in!u*e tria"

'orty per cent of the respondents had said that sales promotion had the a"ility to

induce trial which reinforces the a"ove inference$

,on&)ter i %a*t

In order to understand a"ility of the promotions to increase long+term sales-

respondents were asked a"out continuity of purchase of a "rand after the withdrawal of

promotion$ Eighty per cent of the respondents indicated that they would not continue$ )ut

297 said they would$ 0hus- it could "e inferred that promotions in this category %low

involvement products& might encourage trial and "rand switching "ut not long term loyalty$

Pre#eren*e o# S*$e es D

Price off was the most preferred type of scheme$ Maximum customersN ranked price+

offs as num"er one or two$

Per*ei:e! ua"it' D

Ma,ority of respondents had a perception that the 1uality of the promoted "rands

remained the same during promotion- while some of them felt that it was inferior than "efore$It can "e inferred that promotions were not leading to negative "rand 1uality perceptions$ It is


49/84

found that some customer strongly preferred to "uy their regular "rand and said that sales

promotion would not weaken their loyalty towards the "rand$

Per*e%tions re&ar!in& un!er"'in& *o %an' oti:ations

Fn tapping perceptionsN regarding underlying company motivations for sales

promotion- to increase salesJ was ranked highest followed "y to attract switchersJ and to

sell excess stocksJ$ *hile providing value to customersJ and

to reinforce company imageJ were ranked lowest$ 0his indicates that consumers "elieved

that companies were undertaking such activities only for their own "enefit and not for the

"enefit of consumers$

'indings from retailer and consumer perception studies- it is evident that there was a

matching of perceptions regarding nature of scheme %price offs as most preferred type of

scheme mentioned "y consumers and retailersN perceptions a"out consumer preferences&$

Since retailers o"serve consumers in store "ehaviour were fre1uently and directly- their

perceptions regarding providing consumer "ehaviour are likely to "e accurate$ Such inputs

from the retailers would "e useful to companies$

0he retailers had the perception that those schemes which were announced through mass

media had "etter response$ 0his was reinforced "y the consumer survey which showed that

recall in case of heavily promoted schemes on 05 was found to "e very high$

RetailersN prediction of companiesN motivation for offering sales promotion were matching

with the consumer perception regarding the same$ 0hus "oth viewed that companies were

using sales promotion activities mainly to increase short term sales or encourage switching or

selling excess stock and not really to give value "enefit or enhance(reinforce "rand(company

image$


50/84

C$err' Pi*5in&

Merriam+*e"ster 8ictionary defines cherry picking as selecting the "est or most desira"leJ

or to descri"e one idiom with another taking the pick of the litter$J 0he term cherry picking

is used to descri"e the "ehavior of "oth sellers and "uyers in a variety of settings$ Sometimes

the phrase is used to descri"e a seller who is selective a"out which customers they wish to

serve$

'or example- Southwest Airlines cherry picks price sensitive travelers who place little

premium on standard airline perks and 8ell !omputer cherry picks customers who are

capa"le of "uying over the Internet and are savvy enough to make the necessary

customi/ation choices without much hand holding$ )oth of these firms choose not to serve

other customers with a higher willingness to pay "ecause it would re1uire significant changes

to efficient operating models$

0he !am"ridge International 8ictionary of Idioms defines cherry picking as choosing onlythe "est people or things in a way that is not fairJ- as when financial institutions and

insurance companies are vilified "ecause they refuse to serve high+risk populations$ 0he term

also descri"es "ehavior of "uyers who are selective a"out which products or services they

purchase at what locations and prices$ In "oth the seller and "uyer contexts- the essential

meaning of cherry picking is the sameT take the "est and leave the rest$

Instead of going to the same outlet each week- every week- to complete their groceryshopping- %ri*e)*ons*ious *onsu ers o#ten :isit ore t$an one store in sear*$ o# s%e*ia"

%ri*es a bar&ain)$untin& %ra*ti*e 5no;n in t$e in!ustr' as *$err')%i*5in&.? J

%Mogelonsky 6??:&

Consumer Reports recommends that smart shoppers s*rutini e t$e #oo!)!a' a!s an!

*$err' %i*5? t$e s%e*ia"s -J noting that 297 of its readers show little loyalty among

supermarkets %!onsumer Reports 6? &


51/84

)4 ER SI8E ! ERR PI!GI>#

*I0 I> S0FRE

Levy and *it/ %299:& define cherry pickers who visit the store and only "uy

merchandise sold at "ig discounts$

)E0*EE> S0FRES

0he typical shopper visits the supermarkets 2$2 times per week "ut shops 3+: different

chains on a regular "asis- creating plenty of opportunities to cherry pick$

! ERR PI!GI># S0RA0E#IES

S*I0! S0FRES A!RFSS *EEGS

8ominickNs one week ,ewel the next

S*I0! S0FRES *I0 I> A 8A FR *EEG

8ominickNs and ,ewel the same day or week

F4R FPERA0IF>ALIUA0IF>

5isit two or more stores on the same shopping dayReduces the likelihood of confusing true cherry picking with fill in trips


52/84

C"assi#i*ation o# S$o%%er T'%es

RE'D Research paper on cherry picking "y Edward !ox and Stephen och


53/84

KEY FINDINGS

Q.1 Do you purchase the same brand every time?

Statistics

SOAP TOOTHPASTE

PACKED

MASALA PICKLE

MOSQUITO

REPELLENT

HOUSE

CLEANING

PRODUCTS

N Valid 80 60 45 35 30 65

Missin !! 4! 5" 6" "! 3"

Frequency Table

SOAP

#$%&'%n() P%$(%n* Valid P%$(%n*

C','la*i-%

P%$(%n*

Valid )%s !0 ./ 6 !5 0 !5 0

n1 60 58 8 "5 0 .00 0

T1*al 80 "8 4 .00 0

Missin 00 !0 ./ 6

S)s*%, ! ! 0

T1*al !! !. 6

T1*al .0! .00 0


54/84

TOOTHPASTE

#$%&'%n() P%$(%n* Valid P%$(%n*

C','la*i-%

P%$(%n*

Valid )%s 35 34 3 58 3 58 3

n1 !5 !4 5 4. " .00 0

T1*al 60 58 8 .00 0

Missin 00 40 3/ !

S)s*%, ! ! 0

T1*al 4! 4. !

T1*al .0! .00 0

PACKED MASALA

#$%&'%n() P%$(%n* Valid P%$(%n*

C','la*i-%

P%$(%n*

Valid )%s !0 ./ 6 44 4 44 4

n1 !5 !4 5 55 6 .00 0

T1*al 45 44 . .00 0

Missin 00 55 53 /

S)s*%, ! ! 0

T1*al 5" 55 /

T1*al .0! .00 0


55/84

PICKLE

#$%&'%n() P%$(%n* Valid P%$(%n*

C','la*i-%

P%$(%n*

Valid )%s !0 !0 0 5" . 5" .

n1 .5 .5 0 4! / .00 0

T1*al 35 35 0 .00 0

Missin 00 65 65 0

T1*al .00 .00 0

MOSQUITO EPELLENT

#$%&'%n() P%$(%n* Valid P%$(%n*

C','la*i-%

P%$(%n*

Valid )%s !5 !4 5 83 3 83 3

n1 5 4 / .6 " .00 0

T1*al 30 !/ 4 .00 0

Missin 00 "0 68 6

S)s*%, ! ! 0

T1*al "! "0 6

T1*al .0! .00 0


56/84

HOUSE CLEANIN! P ODUCTS

#$%&'%n() P%$(%n* Valid P%$(%n*

C','la*i-%

P%$(%n*

Valid )%s 30 !/ 4 46 ! 46 !

n1 35 34 3 53 8 .00 0

T1*al 65 63 " .00 0

Missin 00 35 34 3

S)s*%, ! ! 0

T1*al 3" 36 3

T1*al .0! .00 0


57/84

INTERPRETATION:

SoapD


58/84

0he consumer "ehaviour related to "rand switching varies a lot across different products with


59/84

Q.2 Why do you change your brand?

Case Pr"cessin# Su$$ary

Cas%s

Valid Missin T1*al

N P%$(%n* N P%$(%n* N P%$(%n*

2 ) ( an % s1a in(1,% "5 "3 5 !5 !6 5 .00 .00 0

2 ) ( an % *11* as*%

in(1,%

60 58 8 40 4. ! .00 .00 0

2 ) ( an % a(7%d ,asala

in(1,%

46 45 . 54 54 / .00 .00 0

2 ) ( an % i(7l% in(1,% 35 34 3 65 65 " .00 .00 0

2 ) ( an % ,1s&'i*1 $% %ll%n*

in(1,%

30 !/ 4 "0 "0 6 .00 .00 0

2 ) ( an % (l%anin $1d'(*s

in(1,%

65 63 " 35 36 3 .00 .00 0


60/84

%&y c&an#e s"a' ( inc"$e Cr"ss tabulati"n

C1'n*

in(1,%

T1*all%ss * an !5000 !6000 50000 5.000 "5000 ,1$% * an "5000

2 ) ( an % s1a s( %,%s .0 .0 4 5 !/

*$ial 0 0 0 0 5

9%**%$ &'ali*) .0 .5 .. .0 4.

T1*al !0 !5 .5 .5 "5


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%&y c&an#e t""t&'aste ( inc"$e Cr"ss tabulati"n

in(1,%

T1*all%ss * an !5000 !6000 50000 5.000 "5000

,1$% * an

"5000

: )( an %*11* as*% s( %,%s 6 .8 . 0 !5

*$ial 0 3 3 0 6

9%**%$

&'ali*)

4 4 .. .0 !/

T1*al .0 !5 .5 .0 60


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PACKED MASALA ( inc"$e Cr"ss tabulati"n

C1'n*

in(1,%

T1*all%ss * an !5000 !6000 50000 5.000 "5000 ,1$% * an "5000

PACKED MASALA s( %,%s .. 3 4 0 .8

*$ial " 0 0 5 .!

9%**%$ &'ali*) ! 3 6 5 .6

T1*al !0 6 .0 .0 46


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PICKLE ( inc"$e Cr"sstabulati"n

C1'n*

in(1,%

T1*all%ss * an !5000 !6000 50000 5.000 "5000 ,1$% * an "5000

PICKLE s( %,%s .0 5 . 0 .6

*$ial 3 0 0 0 3

9%**%$ &'ali*) ! 5 4 5 .6

T1*al .5 .0 5 5 35


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%&y c&an#e $"squit" re'ellent ( inc"$e Cr"ss tabulati"n

C1'n*

in(1,%

T1*all%ss * an !5000 !6000 50000 5.000 "5000

: )( an %,1s&'i*1 *$ial 5 0 0 5

9%**%$ &'ali*) .0 .0 5 !5

T1*al .5 .0 5 30


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%&y c&an#e cleanin# ( inc"$e Cr"ss tabulati"n

C1'n*

in(1,%

T1*all%ss * an !5000 !6000 50000 5.000 "5000 ,1$% * an "5000

: )( an %(l%anin s( %,%s .0 5 .5 0 30

*$ial .0 0 0 5 .5

9%**%$ &'ali*) 5 5 0 .0 !0

T1*al !5 .0 .5 .5 65


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INTERPRETATION:

Soap: The cross tabulation of the reason of changing a brand ith the

income of the respondent in the soap category sho s that there is a

change in the reason ith increasing income of the respondent. ! out of

1" respondents of income less than 2#$""" say the they change brand

due to the promotional schemes hile only # out of 1# respondents of

more than %#$""" category claim so.

Toothpaste: The cross tabulation of the reason of changing a brand ith

the income of the respondent in the toothpaste category sho s that there

is a change in the reason ith increasing income of the respondent. ! out

of 1" respondents of income less than 2#$""" say the they change brand

due to the promotional schemes hile only " out of 1" respondents of

more than %#$""" category claim so.

&ac'ed (asala: The cross tabulation of the reason of changing a brand

ith the income of the respondent in the pac'ed masala category sho s

that there is a change in the reason ith increasing income of the

respondent. 11 out of 2" respondents of income less than 2#$""" say the

they change brand due to the promotional schemes hile only " out of 1"

respondents of more than %#$""" category claim so.

&ic'le: The cross tabulation of the reason of changing a brand ith the

income of the respondent in the pic'le category sho s that there is a


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change in the reason ith increasing income of the respondent. 1" out of

1# respondents of income less than 2#$""" say the they change brand

due to the promotional schemes hile only " out of # respondents of more

than %#$""" category claim so.

(os)uito *epellent: The cross tabulation of the reason of changing a

brand ith the income of the respondent in the mos)uito repellent

category sho s that there is a change in the reason ith increasing

income of the respondent. 1" out of 1# respondents of income less than

2#$""" say the they change brand due to the better )uality hile all #

respondents of more than %#$""" category claim so.

+ouse ,leaning &roducts: The cross tabulation of the reason of changing

a brand ith the income of the respondent in the house cleaning products

category sho s that there is a change in the reason ith increasing

income of the respondent. 1" out of 2# respondents of income less than

2#$""" say the they change brand due to the promotional schemes hile

only " out of 1# respondents of more than %#$""" category claim so.

+ence$ a gradual shift to ards better )uality rather than

promotional schemes as a reason for changing a brand is seen as the

income slab increases. Though the shift varies from product to product but

a general trend to ards better )uality is seen as income increases.


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Q.- Was there any promotional scheme ith this brand?

Frequencies

Statistics

SOAP TOOTHPASTE

PACKED

MASALA PICKLE

MOSQUITO

REPELLENT

HOUSE

CLEANING

PRODUCTS

N Valid 80 60 45 35 30 65

Missin !! 4! 5" 6" "! 3"

Frequency Table

SOAP

#$%&'%n() P%$(%n* Valid P%$(%n*

C','la*i-%

P%$(%n*

Valid )%s 60 58 8 "5 0 "5 0

n1 !0 ./ 6 !5 0 .00 0

T1*al 80 "8 4 .00 0

Missin 00 !0 ./ 6

S)s*%, ! ! 0

T1*al !! !. 6

T1*al .0! .00 0


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TOOTHPASTE

#$%&'%n() P%$(%n* Valid P%$(%n*

C','la*i-%

P%$(%n*

Valid )%s 60 58 8 .00 0 .00 0

Missin 00 40 3/ !

S)s*%, ! ! 0

T1*al 4! 4. !

T1*al .0! .00 0

PACKED MASALA

#$%&'%n() P%$(%n* Valid P%$(%n*

C','la*i-%

P%$(%n*

Valid )%s 30 !/ 4 66 " 66 "

n1 .5 .4 " 33 3 .00 0

T1*al 45 44 . .00 0

Missin 00 55 53 /

S)s*%, ! ! 0

T1*al 5" 55 /

T1*al .0! .00 0


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PICKLE

#$%&'%n() P%$(%n* Valid P%$(%n*

C','la*i-%

P%$(%n*

Valid )%s !0 ./ 6 5" . 5" .

n1 .5 .4 " 4! / .00 0

T1*al 35 34 3 .00 0

Missin 00 65 63 "

S)s*%, ! ! 0

T1*al 6" 65 "

T1*al .0! .00 0

MOSQUITO EPELLENT

#$%&'%n() P%$(%n* Valid P%$(%n*

C','la*i-%

P%$(%n*

Valid )%s .5 .4 " 50 0 50 0

n1 .5 .4 " 50 0 .00 0

T1*al 30 !/ 4 .00 0

Missin 00 "0 68 6

S)s*%, ! ! 0

T1*al "! "0 6

T1*al .0! .00 0


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HOUSE CLEANIN! P ODUCTS

#$%&'%n() P%$(%n* Valid P%$(%n*

C','la*i-%

P%$(%n*

Valid )%s 60 58 8 /! 3 /! 3

n1 5 4 / " " .00 0

T1*al 65 63 " .00 0

Missin 00 35 34 3

S)s*%, ! ! 0

T1*al 3" 36 3

T1*al .0! .00 0

Research Methodology

F)QE!0I5ES F' 0 E S048

6$ 0o profile the cherry pickers$2$ 0o study the cherry picking sales pattern$


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3$ 0o find out whether !herry pickers increases the "asket si/e$

:$ 0o find out whether cherry pickers increase the retail turnover$

RESEAR! C4ES0IF>S

V *ho are the cherry pickersW

V ow do these customers cherry pick productsW

*hat are the implications on the total spending of these customersW 8o such consumers increase the retail turnover "y "uying more 1uantity for availing

the promotional schemesW

PF0 ESIS

Ho( 0he amount spent more to avail the scheme is not dependent on the income of the "uyer$

H@( 0he amount spent more to avail the scheme is dependent on the income of the "uyer$

0 PE F' RESEAR! 8ESI#>

8escriptive research was used for the pro,ect$

C4A>0I0A0I5E RESEAR!

A survey of customers leaving )ig )a/aar was done so that all details of the shopping trip

were fresh in their minds and hence accurate price data could "e collected$ 0he survey was

done "y 1uestionnaire which comprised of closed ended 1uestions$

SF4R!ES F' 8A0A

Primary data was collected through survey of customers at )ig )a/aar$

Secondary data was collected from previous research "y various authors on this topic- retail

"i/ maga/ine and articles and reports on the internet$


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ME0 F8FLF#

0he method used for survey was structured 1uestionnaire$

RESEAR! 0FFL

Cuestionnaire

C4ES0IF>>AIRE 8ESI#>

0he 1uestionnaire comprised of *"ose! en!e! uestions $

SAMPLE 8ESI#>SAMPLE SIUED 699 samples

SAMPLI># 0E! >IC4ED !onvenience sampling$

PILF0 S048

A pilot survey of ; customers at )ig )a/aar had "een done to ensure that the 1uestionnaire is

correct and relevant of research o",ectives$

S4R5E

Fnce pilot study is over- actual survey will "e conducted$

8A0A A>AL SIS

0he researcher has used inferential statistics %through SPSS& in order to draw a conclusion$

Result of the study has "een put in ta"les and graphs for easy understanding of the findings of

the research$

EXPE!0E8 !F>0RI)40IF> F' 0 E S048

0his pro,ect will help in giving a fresh insight on this topic on which research has "een done

very rarely in India$ It will help to understand the overall pattern of this activity and its


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impact on the marketing strategies of various 'M!# products$ Also the profiling of this set of

consumers can help in framing the strategies accordingly$

REASF> 'FR 0AGI># 4P 0 E PRFQE!00he researcher has done his )!A and currently pursuing his M)A$ 0his topic has not "een

researched upon extensively in India and hence promises uni1ue exposure and experience to

the researcher and hence this pro,ect has "een undertaken$


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CONC,USIONS

More than half of the population of consumers switch "rands of 'M!# products due to some

reason or the other$ %;27 of the consumers agreed that they switch "rands regularly$&

0he percentage of consumers switching "rands varies across different 'M!#

products$ %


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that they had to "uy more than intended to avail the scheme "ut only


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RECOMMENDATIONS

0he "rands should come up with promotional activities which give instant cash "enefit to the consumers as such promotions are preferred "y them$

0he consumers do not mind "uying more 1uantity to avail the offers hence the "rands

can come up with schemes wherein the consumers need to "uy more 1uantity to avail

the schemes offered$

0he amount spent more to avail schemes with 'M!# has association with the incomeof the "uyer and hence the target set of consumers should "e studied "efore coming

up with the promotions$

0he reason of switching "rands does tend towards "etter 1uality "ut even higher

income groups indulge into cherry picking and hence the scope should not "e limited

to lower income groups$

0he retailers can come up with their own promotion schemes if not offered "y "rands$

Such schemes will increase foot falls at the store and hence the retailerNs sales$


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ANNE3URE

PERSF>AL!A

RE PA!GE8 'FF8

F4SE FL8

PRF84!0S

C4ES0IF>S

PAR0I!4L

ARS SFAP

0FF0

PAS0E

PA!GE8

MASAL

A

PI!GL

E

MFSC4I0F

REPELL

E>0

F

!LEA

PRF

*hich of these products

did you "uy todayW +

*hich "rand did you "uytodayW

8o you purchase the

same "rand every timeW ES

>F

*hy do you change your

"randW S! EMES0RIAL

)E00ER

C4ALI0LF*ER

PRI!E


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*as there any

promotional scheme with

this "randW ES

>F

If - yes which one W

Price

Promotion!oupons

'ree #ifts

RefundsLoyalty

Incentiveow much did you save "y availing this scheme W

9+; Rs$

% I> RS$& ;+69 Rs$69+6; Rs$6;+29 Rs$

MFRE 0 A>29

8id you have to "uy more1ty than intended to avail

the schemeW

ES

>F

8id you spend more thanintended to avail the

schemeW

ES

>F

If yes how much W 9+; Rs$

%I> RS$& ;+69 Rs$69+6; Rs$6;+29 Rs$

MFRE 0 A>29

*hich promotionalactivities

PricePromotion

do you prefer W %Rank the top : preferred

activities +!oupons

Rank 6 for the mostf d d f l

'ree #ifts


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PERSF>AL I>'FRMA0IF>D

F!!4PA0IF> D ouse *ife Employed Self Employed Retired

>o$ of mem"ers in the familyD OOOOOOOOOOOOO

MF>0 L I>!FMED Y 2;-999 2@-999+;9-999 ;6-999+


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BIB,IOGRAPHY

httpD((www$in"ics$co$kr(english(reference('inalZReports(I>)I!SZ'M!#ZReport$pdf

httpD((www$assocham$org(ar"(afp(299?(A'PZFct299?ZProspectsZinZtheZ'M!#Zsect

or$pdf

httpD((www$indiain"usiness$nic$in("usiness+news(news+"ulletin(oct63+6?729Z9?$pdf

httpD((www$moneycontrol$com(newsZhtmlZfiles(newsZattachment(299 ('M!#

729Sector729Report6$pdf

httpD((www$fddiindia$com(pu"lications(newsletter(299?(99


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Big Bazar Final Project Report

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