July 2013, Volume: 1 Issue: 7
Effects on consumer sales promotion: A major development in
FMCG sector
1
C Muthukrishna, Research Scholar Department of Management Studies, MS University Tirunelveli,
E-mail: Muthu_o35@yahoo.com
2
Dr.P Ravi, Assistant Professor Department of Management Studies, MS University Tirunelveli
E-mail: ravimsu@gmail.com
ABSTRACT
Today the retail sector is the most important addition in Indian economy. Retailing is
the biggest industry of worldwide the company introduce many sales promotion in the market
either consumers oriented or trade oriented which is attracts and stimulates to purchase the
products. The sales promotion scheme frequently changes because the competition among the
companies. The research in this paper tries to identify the consumer is expecting sales
promotions by developing effects on consumer sales promotion a major development in
FMCG sector.
Keywords: consumer, FMCG, Sales promotion, Retail, Trade
I INTRODUCTION
Retail sector is very biggest industry of world wide. Indian retail shops is many of owner
manned small shops. India is fastest growing retail market in the world. Its main reason for
India has many populations. Indian retail is 4th position of world wide. Indian retail sector
pillars of Indian economy for 20 to 22 % of GDP. Two kinds of retail shops are available in
the market. 1. Organised retail shops2. Unorganised retail shops.
An Organised retail shop is licensed retail shops it’s provided for sales tax, income
tax and publicly traded. An organised retail shops is street corner small shops. Now the
Indian retail business innovation such as wall mart and Tesco
The retail shops can’t run business without fast moving consumer goods as well as
people can’t live without FMCG products.
Today the fast moving consumer goods are fulfilling with consumers needs and
wants. This sector product used to people at every day or every month etc… the market
available of many FMCG products because FMCG companies face the competition. So
competition faced FMCG companies introduce many promotional activities like
advertisement, pop, price off etc… FMCG companies such as HUL, ITC, NESTLE, P&G,
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July 2013, Volume: 1 Issue: 7
GSK, Marico, Heinz are 70% of FMCG revenues in the country. Most FMCG companies
spent 15 to 20% of their total turnover on advertisement and brand promotion.
The FMCG is many more companies’ product available in the market. This
companies competition faced operate many sales promotions such as consumer oriented or
trade oriented.
II REVIEW OF LITERATURE
Paragi kuntal shah and Bijalnishantmethta (2012) in their article “effect of sales
promotion and their availability on consumers buying behaviour: a perspective on personal
care products” opined that today’s personal care customers are greatly influence of
advertisement. The sales promotions immediately hit the sales volume and face the
competitions. The sales promotion stimulate to consumers buying behaviour in such as sales
promotions advertisement, buy one get one free and store communications.
Gopal das (2011) in his study “effect of retail sales promotion on buying behaviour of
customers: an empirical study” said that price promotions are increasing consumers buying
behaviours. This paper highlighted sales promotion such as direct price discount, buy one get
one free, buy one get another product free, media advertisement, store publicities are
stimulate consumers buying decision in FMCG products.
Abhigyan bhattacharjee (2011) described FMCG products influenced to Medias are both
visual and print medias. Advertisement and Medias as well as publicities are creating new
demand of products. It is suitable for both rural and urban areas.
Garima malik (2011) in his study indicate that strong distribution and affordability also road
shows are use of customer retention and stimulate to buy dabur products in rural market.
Robert P.Hamlin and Andreainshch (2011) in their article “Retailer branding of consumers
sales promotion” this article indicate that food industry customers are like price promotions.
The price cut immediate hit the sales as well as create demand in food products. The
researcher said that manufactures and retailers are may have power relationships. This paper
maximum highlighted promotions are coupons, price discount and 20 percentage price offers
III STATEMENT OF THE PROBLEM
Today Indian market has many FMCG companies and products. FMCG companies
have introduced many sales promotions to consumers. The companies and consumers can’t
identify for which promotions is suitable for them. This research finds out which kind of
promotions satisfied with consumers and companies.
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July 2013, Volume: 1 Issue: 7
IV OBJECTIVES
 To understand the consumer behaviour towards the sales promotion activities
followed by FMCG in Tirunelveli city
 To find out effective consumer sales promotions
 To find out consumer expecting consumer sales promotion
V RESEARCH METHODS AND SAMPLES
The research type is descriptive research. A sample of 120 respondents was selected
with the help of convenience sampling method. The sample has chosen from Arasan, Aryas,
Anantha and Pothys supermarket purchasers in Tirunelveli city. The data was used direct
field survey data and journals references. Data was collected with the help of the interview
schedules. It has tabulated, analyzed and interpreted using suitable statistical tools including t
test, simple percentages and chi square tests.
VI ANALYSIS AND RESULTS
This section presents the analysis and interpretation of the collected data from the sample
(size120) responds spread throughout the area of Tirunelveli major four supermarkets. The focus of
analysis is exploring the components of customer behaviours towards the consumer sales promotions
in FMCG
Table 1: Demographic Profile of Respondents
S.NO
1
Factor
Gender
2
Age
3
Education
4
Monthly income
5
Occupation
Category
Male
Female
Total
Below 20 years
20 to 30 years
30 to 40 years
Above 40 years
Total
Below HSC
Graduate
Post graduates
Others
Total
Below 7000
7001 to 14000
14001 to 24000
Above 24000
Total
Business
Students
No. of. Respondents
44
76
120
21
37
48
14
120
18
44
38
20
120
13
18
46
43
120
27
26
3
Percentage
36.7
63.3
100
17.5
30.8
40
11.7
100
15
36.7
31.7
16.6
100
10.8
15
38.4
35.8
100
22.5
21.7
Employees
Households
Total
25
42
120
July 2013, Volume: 1 Issue: 7
20.8
35
100
Source: primary data
From the table 1 it can be seen that most of the Supermarket purchasers were female
and they have worked homemakers also their age between 30to40.Most of the purchasers
have graduated and their monthly family income level is Rs 14000 to 24000. The
supermarket purchasers’ income and education is very vital role. It has most influenced to
product selection.
Table 2: Purchase decision factors
Purchase
decision
Advertisement
Consumer offer
Availability
Others
Total
Table3: Stimulated to purchase decision
No. Of
Percentage
respondents
39
32.5
68
56.7
10
8.3
3
2.5
120 100
Stimulated for purchase No of
Percentage
Respondents
Attractive package
41
34.2
Brand name
25
20.8
Availability
28
23.3
Others
26
21.7
Total
120
100
Table 4: The Customers Expects Percentages
Percentage
of offers
Below 10
10 to 20
20 to 30
above 30
Total
No. of
respondents
36
57
12
15
120
Table 5: Creating to Brand Image
Percentage
Creating Brand image No. of
Respondents
Advertisement
27
Availability
30
Product quality
52
Others
11
Total
120
30
47.5
10
12.5
100
4
Percentage
22.5
25
43.3
9.2
100
July 2013, Volume: 1 Issue: 7
Table 6: Effective Sales Promotions and this is Ranks
Expect promotions
Media advertisement
Print advertisement
Demonstration
Free trails
Free samples
Pop materials
Store display
Price offer
Quantity offer
Buy one get one free
Cross promotion
Total
no of respondents
9
7
1
3
5
2
22
28
34
5
4
120
Percentage
7.5
5.8
0.8
2.5
4.2
1.6
18.4
23.4
28.3
4.2
3.3
100
Rank
4
5
10
8
6
9
3
2
1
6
7
Sources: primary data
From the table 2 prove that most of the consumers has taken purchase decision through
consumer offers and Advertisements. The effective consumer offer is quantity offers and
Advertisement is store displays.The table 3 indicate that most of the consumer opinion to
attractive package stimulates to purchase the products and the green practice package had
attracted with other packages. Many consumers has been expecting for ten to twenty
percentage of free offers from manufacturers. The consumers say product quality is important
to creating brand images and repeatedly purchase those products. The consumers are
expecting top five consumer promotion is ranked as quantity offer, price offer, store display,
media advertisement and print advertisements.
VII HYPOTHESIS TESTING
Income and brand image
To find out consumers income is creating brand image, the chi-square test was tested
H0: The consumers income do not influence to creating brand image
H1: The consumer income is influence to creating brand image.
Level of significance: 5%
Since sig (p) > 0.05
The calculated value of chi-square (17.2) is greater than the table value (0.05). The hypothesis
is rejected. Hence there income has influenced to create product brand image.
Income and extra percentage of offers
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July 2013, Volume: 1 Issue: 7
To find out respondent income is relevant to extra percentage of free offers, the chi square
test was tested
H0: The respondent income level is related to different percentage of free promotions.
H1: The respondent income level do not relate to different percentage of free promotions
Level of significance: 5%
Sig (p) < 0.05 (5.64 < 16.9)
The chi-square test results indicate that, the calculated value (5.64) is less than the table
value (16.9). The null hypothesis is accepted. Hence the respondent income level is related to
different percentage free promotions
Education and product purchase decision
To find out respondent education is important of products purchase, the chi square test was
tested.
H0: The respondent education does not influence to purchase the products.
H1: the respondent educations are influence to purchase the products.
Level of significance: 5%
Sig (p) > 0.05
The chi square test indicates that, the calculated value (18.93) is greater than the table
value (16.9). The null hypothesis is rejected. Hence the consumers’ education is influence to
purchase the products.
Consumer offers and advertisement is satisfying to customers
To find out quantity offers and quality offers are equally beat the sales or not equally increase
the sales, the t test was tested.
H 0: Consume offers and Advertisement differs significantly satisfy with customers.
H 1: Consumer offers and Advertisement do not differ significantly satisfy with customers.
Level of significance 5%
Sig (p) < 0.05
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July 2013, Volume: 1 Issue: 7
The t test indicates that the calculated value (0.96) is less than the table value (.05). The
null hypothesis is true. Hence consumer offers and advertisements are differently satisfy to
consumers
VIII Discussion
The research was found that effective consumer sales promotions and consumers
behaviours towards the promotions. Consumer demographical factor is very important to
promotions. Income and education is vital role of choose the stores and promotions. Most of
the supermarket purchasers were female and they have home makers
The customer has taken purchase decision from consumer offers. It has been
bettered with Advertisement and other sales promotions. Peoples are easily visible the
product to store display and it has been helping to consumers for chose the products. It was
more effectiveness with media and other Advertisements. The quantity offer is fulfilling to
consumers expectations. Attractive package was stimulated to purchase the products. Many
consumers are expecting 10 to 20 percentages of free offers were manufacturer. The product
quality is creating brand images and repeatedly purchases those products. The top three
effective and consumers are expecting sales promotions are quantity offers, price offer and
store displays.
IX Conclusion
Consumers have an opinion that they are expecting different kind of sales promotions.
This sales promotion has been related to their income and educations. Most super market
purchasers are females and they have home makers because they have come to supermarket
and purchase the products that time they are showing many products also bought those
products and many consumers like consumer offers. More percentage offers have been
creating negative impact of product quality that time consumers are not believe the product
quality so branded product manufacturer avoid high percentage free offers. Today many
home maker women’s are watching television programmes for free times so the manufacturer
will present advertisement through televisions and can improve their sales. This research
results only suitable for modern trade sales promotions.
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July 2013, Volume: 1 Issue: 7
REFERENCE
Paragi kuntal shah and Bijal nishant Mehta (Nov 2012) effect of sales promotions and their
availability on consumer buying behaviour Indian journal of marketing.
Gopal das (July 2011) effect of retail sales promotion on buying behaviour of customer
Indian journal of marketing
Abhigyan Bhattacharjee (June 2011) media influence on FMCG a comparative study among
rural and urban households, Indian journal of marketing
Garima malik (July 2011) sales promotion of dabur India limited in Indian rural market
Indian journal of marketing.
Robert p Hamlin and Andreainshch (2011) retail branding of consumer sales promotion
Indian journal of marketing.
Philip kotler marketing management twelfth edition (2007) a south Asian perspective
S p Gupta, statistical methods (2011) sultan Chand & sons Newdelhi
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