The document discusses sales promotion strategies for fast moving consumer goods (FMCG) companies in India, specifically those related to soap and detergent products. It provides an overview of the FMCG industry in India, including key product categories and major players. It then discusses various factors that influence demand for FMCG products like price, place of distribution, product characteristics, and promotion strategies. Specific promotion techniques used in the industry like coupons, discounts, and bundling offers are also outlined. PESTEL and SWOT analyses are provided to discuss macroenvironmental influences and strengths/weaknesses of FMCG companies.
1. “A challenges and opportunity of sales
promotion in FMCG sector
w.r.t.(soap&detergent)”
SUBMITTED TO:
PROF. PARASH RUGHANI
NOV,2014
MARWADI EDUCATION FOUNDATION
GUJRAT TECHNICAL UNIVERSITY
RAJKOT.
PRE.BY : RASIK MOLIYA
(138270592107)
2. INTRODUCE OF FMCG Industry in
India
• Individual items are of small value. But all FMCG
products put together account for a significant
part of the consumer's budget.
• The consumer keeps limited inventory of these
products and prefers to purchase them
frequently, as and when required. Many of these
products are perishable.
3. CONT……
• The consumer spends little time on the
purchase decision. Rarely does he/she look for
technical specifications (in contrast to
industrial goods). Brand loyalties or
recommendations of reliable retailer/dealer
drive purchase decisions.
• Trial of a new product i.e. brand switching is
often induced by heavy advertisement,
recommendation of the retailer or
neighbors/friends.
4. • The term Fast moving consumer goods (FMCG) refers to those retail
goods that are generally used or replaced in short period of time i.e. a
day, a week, a month, & within one year. FMCG is also known as
Consumer Packaged Goods (CPG). These products are relatively sold at
low cost.
•
• FMCGs have a short life, either as a result of high consumer demand or
because the value of product deteriorates gradually. It comprises
consumer non-durable products that include food, beverages, personal
care, & household care. Goods such as meat, fruits & vegetables, daily
products & baked goods – are highly perishable.
•
• Among all the sectors FMCGs industry is one of the fourth largest sector
in the country & growing at a booming rate over the years. The Indian
FMCG industry is mainly classified as organised & disorganise. The
FMCG sector is highly segmented as different products are made for
different segments in the society.
5. Industry Classification:-
• The FMCG industry is characterised by low margins. The
FMCG segment can be classified under two segments –
• (a)Premium segment:- Premium segment covers mostly to
higher / upper class which is not price sensitive but brand
conscious.
• (b)Popular segment:- The popular or mass segment
consists of consumers belonging to the semi-urban or
rural areas who are not brand conscious. Products sold in
the popular segment have lower prices than premium
segment.
7. Demand determination of the FMCG
Industry
Sales Promotion
• Price
• Place (Channel of Distribution)
• Product
• Promotion
• Advertising
• Direct Marketing
• Public Relations
9. Why do Sales promotion schemes
affect sales?
• First, consumer can increase the quantity they
buy just because the product is on sale.
• Second, consumers are inducing to purchase
another brand different from the one they would
have purchased when there is no promotional
incentive.
• Finally, consumer’s total consumption of the
product category is increased by the promotion.
However, in the long term this positive effect
may be diluted because a promotional campaign
has no permanent effect in the sales of the firm
10. Major Players in the FMCG Industry
• Hindustan Unilever Ltd.
• Procter & Gamble Hygiene and Health Care
• Marico Industries
• ITC (Indian Tobacco Company)
• Nestlé India
• GCMMF (AMUL)
• Dabur India
• Asian Paints (India)
• Cadbury India
• Britannia Industries
11. three types of sales promotion
strategies
• A Push Strategy:
A ‘push’ sales promotion strategy involves
‘pushing’ distributors and retailers to sell your
products and services to the consumer by offering
various kinds of promotions and personal selling
efforts.
A Pull Strategy
• A ‘pull’ sales promotion strategy focuses more
on the consumer instead of the reseller or
distributor. This strategy involves getting the
consumer to ‘pull’ or purchase the product/services
directly from the company itself.
12. Cont…..
• A Combination of Two Strategies:
• A ‘combination’ sales promotion strategy is just
that; it is a combination of a push and a pull
strategy. It focuses both on the distributor as well
as the consumers, targeting both parties directly.
It offers consumer incentives side by side with
dealer discounts.
13. Pestel Analysis On FMCG's Industry
• Political Factors-
• Political stability
• Taxation policy
• Government intervenes
• Trading policies
• Labour law
15. Cont….
• Socio – Cultural Factors
• Demographics
• Distribution of income
• Changes in life style
• Consumerism
• Education levels
• Technological Factors –
• Advancement in technology
• Discoveries & innovation
• Competitive forces
• Automation
• Research & development
17. • Political Factors-
•
• Political stability : Political stability is one of the important most factor which
influence the growth of business directly. If Political stability is higher, then it
leads to perfection in business & on the other hand if there is an instability the
business will have to suffer.
• Taxation policy : Tax policy of government will affect the price of inputs & it
ultimately affect the prices of final products & it will directly affect the sale of
product.
• Government intervenes : This indicates that at what level the government
intervences in the economy. If the government intervence is more sometimes
it helps the organization at large extent.
• Subsidies : The subsidies which are provided by government to different
organisation at different level also help it to grow at faster rate & helps the
organisation in reducing the finance which is to be funded from outside & it
directly reduces interest amount paid in favour of fund raised from outside.
• Trading policies : This indicates the policies related to import & export of
goods and services from different nations. If the policies are favourable more
goods & services will be imported & exported, & on the other hand if policies
are unfavourable it will restricts the import & export.
• Labour law : Labour law also affect the organisation, for example- child labour,
a child below 14 year of age can not work In factory or any hazardous place.
18. • Economic Factors –
• Interest rates : Interest rate directly affect the cost of capital, if the interest rate is
higher the cost of capital will increase & if it is lower then cost of capital will be
lower. This directly affect the profit of the organization & it’s growth.
• Tax charges : If the tax charged by the government is lower then it will reduce the
product price & if it is higher then it will increase the prices of the products.
• Exchange rates : This shows that what is the exchange rate or foreign currency
rate. If exchange rate is higher more amount is paid on import of goods & if it
lowers less amount is to be paid & on the other hand if it is higher the amount
received will be more & if it is lower the amount received will be low.
• National income : National income is important factor as if affect the growth of
the organisation. If per capita income is more the amount spend will be more & if
it will be lower the amount spent will be less.
• Economic growth : Economic growth is important factor in the development of
the organization. If economy grows at a higher speed it will directly affect the
growth of the organization.
• Inflation rate : Inflation means the rise in the value of all the product in the
economy, if inflation rate is higher the cost of products will be higher & if inflation
rate is lower the cost of product will be lower. This directly affect the growth of
the organization.
19. • Socio – Cultural Factors –
• Demographics : Demographics is the study of human population in the economy. It helps
the organization to divide the markets in different segments to target a large of customers.
For Example-according to race, age, gender, family, religion, & sex.
• Distribution of income : This shows that how income is distributed in the economy. It
directly affect the purchasing power of the buyers. And ultimately leads to increase or
decrease in the consumption level of the products.
• Changes in life style : Change in life style also leads to increase or decrease in the demand
for different commodities. For example- presently LCD & LED TV’s have replaced Digital
displayed TV set, this shows that the changes in life style of consumers.
• Consumerism : This indicates that a large number of options are available while purchasing
of goods to consumers, so the choice becomes easy & quality products can be choose by
consumers. So while purchasing a consumer have different choices to select product
according to his needs.
• Education levels : Education is one of the most important factor which influence the buying
power of consumer, while selecting a particular good a consumer should know all it’s
features so it can differentiate them with another products.
•
• Law affect social behaviour : Different laws are made by the government to safe guard the
rights of consumers. For example- Consumer protection act, this law indicates that a
consumer can file a case against a seller if he finds that he is cheated.
20. • Technological Factors –
• Advancement in technology : New technology helps in economising the scale of
production, this means that new technology helps in increasing the level of production,
& reducing the costs of inputs, & maximising the level of profits.
• Discoveries & innovation : Advancement in technology will leads to discoveries &
innovations & further improvements in technology so as to improve perfections in the
production process.
• Competitive forces : Advancement in technology will also leads to competition in the
markets, more quality products will be provided to consumers to cover a large number
of market.
• Automation : Change in technology will leads to automation, this means that with new
technology labour required is less as machines are automatic. All the works are done
automatically by the machines as earlier it is labour oriented. Now all the work is
machine oriented.
• Obsolete rate : Day-by-day new inventions are made so the rate of obsolete is higher, as
in Computer LAPTOPS have replaced the PC. This shows that the technology becomes
obsolete very fast.
• Research & development : This department plays a vital role in the development of the
organization. As this department always do research that what are the demand of the
markets & how to make advancements so the organization can survive in the
competitive world.
21. • Environmental Factors –
• Ecological : The ecological and environment aspects such as
weather, climate, & climate changes, which may especially
affect industry such as tourism, farming, & insurance. In
FMCG Air conditioner’s demand increase in summer season.
• Environmental issues : Global warming is one of the major
issue now-a-days as external factor is becoming a significant
issue for firms to consider. Many remedies have been taken
to reduce Global warming.
• Environmental regulations : Various regulations have been
declared by government to safe guard the environment. For
example- no company should through it’s waste in rivers.
22. • Legal Factors –
• Employment law : Employment law provides equal
opportunities to every citizen to work & earn his livelihood.
It provides equal opportunities to every citizen.
• Consumer protection : This law helps to protect the rights
of consumers & he can file a case agains seller if he fined
that he is cheated.
• Industry-specific regulations : These laws are related to
industry for example- no industry can establish in between
cities i.e. it should be outside the cities.
