International Journal of Business Administration and Management. ISSN 2278-3660 Volume 7, Number 1 (2017),
© Research India Publications http://www.ripublication.com
Emerging Trends in Sales Promotions in
FMCG Sector in India
Rahul Goel
Ph.D Scholar (Management)
(2014-2017)
K alinga University, Raipu r, C.G.
En r ol l me n t No. 1 5 0 3 1 0 1 4 ( K U0 0 2M MX I V0 2 0 10 7 6 2)
Abstract
Sales Pro mot ions have oft en been used as t he last resort f or market ers t o
liquidat e st ocks t hat are not mo ving. One o f t he purposes o f a consumer
promot io n is t o elicit a dir ect impact on t he purchase behaviour of t he
fir m's. T he object ive o f t his resear ch paper is to obser ve emerging sales
promot io n t ools being adopt ed and t heir e ffect on t he co mpany's sales
vo lume and also t o evaluat e t he nat ure of sales pro mot ion act ivit ies in
Delhi/NCR, T he main aim o f t he st udy t o evaluat e effect of sales
promot io n t ools on sales vo lume, profit abilit y, no of cust o mer s and
overall per for mance o f FMCG Indust r y. As t he dealer s int eract wit h
cust omers regular ly and direct ly t han t he manufact urer, it would be
valuable
for
t he
FMCG
co mpanies
forecast ing sales promot ion st rat egies.
141
to
int egrat e
percept ions
while
International Journal of Business Administration and Management. ISSN 2278-3660 Volume 7, Number 1 (2017),
© Research India Publications http://www.ripublication.com
1. Introduction
Promot io n is t he co mmunicat ion wit h t he cust omers t o pursue t hem t o bu y
t he product . It is t he dut y o f t he ma rket ing manager t o choose t he
co mmunicat ion media and blend t hem int o an effect ive pro mot io n
programme. These are more t han one t ype of t ools used t o promot e sales.
The co mbinat io n o f t hese t ools wit h a view to maint ain and creat e sales is
known as pro mot ion mix. Pro mot io n mix is t he name given t o t he
co mbinat io n o f t echniques used in co mmunicat ing wit h cust omer s. T here
are four t ools o f pro mot ion mi x viz. advert isement , perso nal selling,
publicit y and sales pro mot io n. These ar e called element s o f pro mot io n
mix.
Here is an example how grocer y and FMCG product s beco me saleable
aft er a boo m in t eleco m sect or we have seen consumer s make order on
pho ne t o local ret ailer s (SE AKR, Chennai) and ret ailer s deliver t he order
to t he cust omer. I n t he same fashio n online process will also work [3].
Speaking about online grocer y and FMCG product Dinesh, MD, Pachha. in
said
“Online
grocer y
and
FMCG
product s
have
chall enges
and
opport unit ies t oo.
Promot io n is o ne o f t he ele ment s o f mar ket ing mix. Pro mot io n decisio ns
are t aken simu lt aneously wit h ot her decisio ns like find ing t arget group,
det er mining o bject ives, budget ing for promot io n, launching o f new
product s, dist r ibut ion et c. Promot io n is one o f t he var iables t hrough
which infor mat io n r egarding product s or ser vices is being co mmunicat ed
to cust omers t o change t heir at t it ude and behaviour. Market ers are
concer ned wit h effect ive ut ilizat ion o f promot io n - mix t o increase sales
and market share. Met hods of pro mot ion include advert ising per sona l
selling, public it y, sales pro mot io n and packaging.
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International Journal of Business Administration and Management. ISSN 2278-3660 Volume 7, Number 1 (2017),
© Research India Publications http://www.ripublication.com
Sales Pro mot io n is t he act ivit y t hat aims direct ly t o influence buyer s t o
buy product s and increase sales. In sales promot io n main ly t hree part ies
are invo lved i. e. co nsumers, t raders and sales force. Sales pro mot io n
refer s t o many kinds o f incent ives and t echniques t hat are direct ed
towards co nsumers, t raders and sales for ce wit h t he int ent ion t o increase
sales in short t erm.
2 Objectives and Research Methodology
Objectives: The st udy o f t his t opic has been undert aken wit h fo llowing
object ives:
a. To underst and t he concept of sales pro motio n,
b. To analyse t he E merging Trends o f S ales Pro mot ion in FMCG
sect or in I ndia.
Research Methodolog y:
It is always import ant to be cr it ical o f t he infor mat io n pr esent ed in
sources, especia lly since t he mat er ial might have been gat her ed t o address
a differ ent problem area. Moreover, many secondar y sources do not
clear ly descr ibe issues such as t he purpos e o f a st udy, how t he dat a has
been gat hered, analysed and int erpr et ed making it difficult for t he
resear cher t o assess t heir usefulness. I n order to address t his proble m I
have
t r ied
to
t riangulat e
t he
seco ndar y
dat a
by
using
numerous
independent sources.
The t opic for t he research st udy is emerging t rends o f sales promot ion, t he
nat ure of t he t opic is t heoret ical and descr ipt ive. So we conduct t he
resear ch st udy t he t ype o f research suit able is descr ipt ive research only.
The dat a are co llect ed fro m I nt ernet , Trade Journals and salesmen o f t he
co mpanies working in FMCG sect or. The descr ipt ive research has met t he
requir ement of research st udy.
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International Journal of Business Administration and Management. ISSN 2278-3660 Volume 7, Number 1 (2017),
© Research India Publications http://www.ripublication.com
The research t ype is descr ipt ive resear ch. A dat a fro m respondent s was
co llect ed wit h t he help o f convenience samp ling met hod. The sa mple has
chosen fro m select super market of Delhi / NCR cit y. T he dat a used was
direct field sur vey dat a and jour nals refer ences. It has t abulat ed, analyzed
and int erpret ed using suit able t ools .
3. Emerging Trends of Sales Promotion in FMCG
“Sales pro mot io ns
include
incent ive
offer ing
and
int erest
creat ing
act ivit ies which are generally short t erm mar ket ing event s ot her t han
advert ising, per sonal selling, publicit y and dir ect market ing. T he purpose
of sales pro mot io n is t o st imulat e, mot iv at e and influence t he pur chase
and ot her desired behavioural responses of t he fir m‟s cust o mer s”. K azmi
and Batra. Rohan Agarwal ment io ned in his art icle about t he emerging
t rends as given below;
i. Buy One Get One Free (BOGOF): T he t rend of giving one it e m
free wit h one purchase o f one it em is beco ming ver y popular not
only in ur ban ar eas but in rural/ sub -ur ban areas t oo. For examp le,
if pack of bread is pr iced at Rs.10 and it s act ual manufact ur ing
cost is Rs.3 and yo u t wo breads for Rs.10, you will be st ill in
profit especia lly if sales incr ease due t o t his BOGOF o ffer. I n
ret ailing t his pract ice is act ually known as a pr emium pro mot io n
t act ic. T he st ores use t his met hod because due t o increased sales
t hey are able t o get benefit because o f econo mies o f scale.
ii. Customer Relationship Management ( CRM): The concept of
CRM is o f t wofo ld: it is a part of retail st rat egy t hat aims at
creat ing cust omers for long -t er m say whole life and on t he ot her
hand, CRM is lar gely t echno logy dr iven. The ma in fo cus o f CRM
is on cust o mers r at her t han product s it o ffer s. Examples ar e
incent ives such as bo nus po int s, co llect ing numbers are ver y
popular. Besides t his, t here are several ot her examp les o f CRM,
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International Journal of Business Administration and Management. ISSN 2278-3660 Volume 7, Number 1 (2017),
© Research India Publications http://www.ripublication.com
fro m
pet rol
pumps
to
malls.
T his
increases
lo ng - last ing
relat ionship wit h t he cu st o mers.
iii. New Media: Wit h t he change in t echno logies, e -ret ail, o nline
buying, and vending machines are t he fashio n o f t he day. SMS, e mails, websit es and mo bile pho nes are used for t he purpose o f
placing orders. For examp le Nest le a S wiss MNC pr int ed so me
individual codes o n KIT -KAT choco lat e packaging, whereby a
cust omer aft er buying it , would ent er the code int o a d ynamic
websit e t o know whet her if he had won a pr ize/gift or not .
Cust o mers also had opt ion t o check t hese pr int ed t ext codes via
t heir cellu lar pho nes. I n I ndia, so me companies have also st art ed
use o f such t echniques as exper iment al met hod.
iv. Customers
Expectation s:
The
onslaught
of
sales
pro mot ion
act ivit y o ver t he last several decades has eroded t he value o f t he
short -t erm r equirement t o act o n sales promot io ns. Many cust o mers
are condit io ned t o expect a promot ion at t he t ime o f pur chase
ot herwise t hey ma y wit hho ld or even alt er t heir purchase if a
promot io n is not present .
For inst ance, food shoppers ar e inundat ed on a weekly basis wit h
such a wide var iet y o f sales pro mot io ns t hat t heir lo yalt y t o cert ain
product s has been replaced by t heir lo ya lt y t o current value it ems
( i.e., product s wit h a sales pro mot ion). For market ers, t he challenge
is t o balance t he advant ages o f short -t erm pro mot ions o ffer ver sus
t he pot ent ial t o erode lo ya lt y t o t he product .
v. E-Retai ling: Sales pro mot ions are delivered to customers in many
ways such as by mail, in -person or wit hin pr int media. However,
t he Int er net and mo bile t echno logies, such as cell phones, present
market ers wit h a number o f new deliver y opt io ns. For example, t he
co mbinat io n
of
mo bile
devices
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and
geographic
posit io ning
International Journal of Business Administration and Management. ISSN 2278-3660 Volume 7, Number 1 (2017),
© Research India Publications http://www.ripublication.com
t echno logy will soon per mit market ers t o t arget promot io ns t o a
cust omer‟s phys ical lo cat ion. This will allow ret ailer s and ot her
businesses t o issue sales pro mot ions such as elect ronic coupons, t o
a cust o mer ‟s mo bile device when t hey ar e near t he locat io n where
t he coupon can be used.
vi. Trackin g: As we discussed in our coverage o f advert ising,
t racking cust o mer‟s response t o market ers‟ pr o mot ional act ivit y is
cr it ical for measur ing success o f an advert isement . I n sales
promot io n, t racking is also used. For inst ance, grocer y ret ailer s,
whose cust omer s are in possessio n o f lo yalt y cards have t he abilit y
to mat ch cust omer sales dat a t o coupon use. T his infor mat io n ca n
t hen be so ld t o coupon market ers who may use t he infor mat ion t o
get a bet t er pict ure of t he buying pat t erns o f t hose r espo nding t o
t he coupon.
vii.
t he
Merch andising Additions: Buy one lit re get 200 ml free wit h
pack,
buy one
kg
pay
for
750
gms
are
examples
of
mer chandis ing addit io n. Under addit io n schemes, so me st ores o ffer
sche mes like buy big pack and t ake smalle r one at no ext ra cost .
Bes ides t his, so met imes so me co mpany offer s you a card for
six/eight spaces for past ing st icker s w it h t he purchase o f each
art icle. When t he card‟s spaces are full, t he consumer is given a
free it em abso lut ely fr ee of cost . In India, t he popular example is
Subway chain o f sandwiches t hat co mes under addit io n sche me.
viii.
Discount ed Prices: As t he ver y name implies, under t his
promot io nal
scheme,
co mpanies
o ffer
pr ice
discount s
to
it s
cust omers. So me o f t he budget air lines such as Air Deccan, Go
Airways and Kingfisher, infor m t heir regular and lo yal cust omer s
t hrough e- ma il regarding any lat est low -pr ice dea ls once new
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International Journal of Business Administration and Management. ISSN 2278-3660 Volume 7, Number 1 (2017),
© Research India Publications http://www.ripublication.com
flight s
are
int roduced
or
so me
addit io nal
dest inat io ns
are
announced wit hin or out side I ndia.
ix. Merch ants wi ll adopt in -store mobi le devices: In 2016, it is
ant icipat ed t he cont inued adopt ion o f mo bile devices such as mPOS
syst ems and in-st ore t ablet s. One example of a merchant using
mo bile t echno logy well is cookware r et ailer Borough Kit chen,
which runs Vend on t heir iP ads. Having a t ablet -based POS syst em
enables t hem t o improve t he cust o mer exper ience and speed up
checkout . For inst ance, founde r s David Caldana & Just in Kowbel
say t hat all t hey have t o do dur ing t heir peak hours and t he ho liday
season is add new t ills by swit ching on addit io nal iP ads. This
allows t hem t o reduce lines and r ing up sales much fast er.
x. Mobile wi ll p lay a bigger role i n click-and-collect initiatives:
Tradit io nal click-and-co llect programs t ypically invo lve people
shopping online t hen picking up it ems in - st ore. In 2016 t hough, we
can expect mobile t o play a bigger role in t his process. Ret ailer s
are incr easingly exper ime nt ing wit h mo bile t o facilit at e click - andco llect . So me mer chant s, such as Ko hl‟ s depart ment st ore, now
enable cust omer s t o buy via mo bile and pick up in - st ore, while
ot hers, such as Sam‟s Club [ Walmart ], are using mo bile t o send
not ificat ions whenever an order is ready for in-st ore pickup.
Nordst rom is also looking int o using mo bile t o streamline t he in st ore pickup exper ience. In May 2015, t he ret ailer st art ed t est ing a
ser vice t hat let s cust o mers t ext or call t heir Nordst rom associat e as
t hey near t he st ore. The st ore emplo yee will t hen head down and
meet t he cust o mer out side, so t hey won‟t even have t o get out of
t heir car.
xi. Free Samp les: For example, t ast ing o f fo od and dr ink at sampling
point s in super market s, t rade fair s and exhibit io ns like „Good
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International Journal of Business Administration and Management. ISSN 2278-3660 Volume 7, Number 1 (2017),
© Research India Publications http://www.ripublication.com
Liv ing‟, „Art of Living‟ annual fairs at Pragat i Maiden in New
Delhi. For example, Milk Mix (a flavored fizzy dr ink) was give n
away t o pot ent ial co nsumers at super mar ket s, Int ernat io nal Trade
Fair and at in Delhi.
4. Conclusion
Indian FMCG mar ket is t he 4T h largest sect or in t he econo my having a
tot al market size of US $ 13.1 billio n and mor e. It has a major MNC
exist ence and consider ed a well reco gnized supply net work, st rong
co mpet it io n a mo ng t he unorganized and organized segment s and wit h lo w
funct io ning cost . Accessibilit y o f input raw mat er ia ls, cheaper labor
expenses and exist ence across t he co mplet e significance net works gives
India a reaso nable benefit .
Market ers who emplo y sales pro mot ion as a ke y co mponent in t heir
promot io nal st rat egy should be aware o f how t he climat e for t hese t ypes
of pro mot io ns is changing. For inst ance, the onslaught of sales pro mot io n
act ivit y over t he last several decades has eroded t he value of t he short t erm requir ement t o act on sales promot io ns. Many cust omers ar e
condit io ned t o expect a pro mot ion at t he t ime o f purchase ot herwise t he y
ma y wit hho ld or even alt er t heir purchase if a pro mot ion is not present .
It is evident in t he t rends o f t he st udy t he fut ure o f sales pro mot io ns lie s
in mo bile t echno logy and a lot is t o be don e yet .
5. References
i. Abhinna Sr ivast ava and Vineet S ingh ( 2015), “ Augment at io n o f
Promot io n Sensit ivit y For FMCG in I ndia”, I nt ernat io nal Journa l
of Advanced Resear ch in Management , Vol 6, No 1, , pp. 28 -37
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International Journal of Business Administration and Management. ISSN 2278-3660 Volume 7, Number 1 (2017),
© Research India Publications http://www.ripublication.com
ii. Majeed & Jasmeene (2016), “A St udy on T he E ffec t s o f Sales
Promot io n Tools o n Brand S wit ching o f FMCG I n Kerala”, EPRA
Int ernat ional Jour nal o f Econo mic and Business Review, Vo l4
No.7, pp. 52-59.
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Promot io n Tools amo ng I ndian Co nsumers: An E mpir ical St udy.
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v. Rao, Venu Gopal. "E ffect of Sales P romot io ns on Consumer
Preferences-T he Moderat ing Ro le o f Pr ice Percept io ns and Deal
Proneness ( A St udy o f FMCG Product s )." Vilakshan: T he XIMB
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vi. Rohan Agarwal (2016), “Sales Promotion Trends: Top 9 Trends in Sales
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http://www.yourarticlelibrary.com/sales/sales-promotion-
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vii. Shukla Paurav (2013), “Emerging trends for marketing in Asia”, Asia Pacific
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viii.
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