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A

PROJECT REPORT
ON

“A STUDY OF SALES AND PROMOTION OF


GHARI DETERGENT POWDER WITH SPECIAL
REFERENCE TO SATNA CITY”

SUBMITTED TO

AWADHESH PRATAP SINGH UNIVERSITY, REWA (M.P.)

FOR THE AWARD OF


MASTER OF BUSINESS ADMINISTRATION
MBA (SEMESTER-VI)

BY

MR. DEEPANKAR BHATTACHARYA


UNDER GUIDANCE OF
………………………….

VINDHYA INSTITUTE OF MANAGEMENT & RESEARCH,


SATNA (M.P.)
2014- 2015

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VINDHYA INSTITUTE OF MANAGEMENT & RESEARCH,
SATNA (M.P.)

GUIDE’S CERTIFICATE
This is to certify that MR. DEEPANKAR BHATTACHARYA has satisfactorily

completed the Project work on “A Study of Sales and Promotion of Ghari

Detergent Powder” under my guidance for the partial fulfillment of MBA

(Semester-IV) submitted to Awadhesh Pratap Singh University, Rewa during the


academic year 2014-2015.

To best of my knowledge and belief the matter presented by him is original

work and not copied from any source. Also this report has not been submitted

earlier for the award of any Degree of Awadhesh Pratap Singh University, Rewa.

Place: Satna ……………………..


Date: / / 2015 (Project Guide)

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VINDHYA INSTITUTE OF MANAGEMENT & RESEARCH,
SATNA (M.P.)

DECLARATION

I undersigned, hereby declare that this project report entitled “A Study of

Sales and Promotion of Ghari Detergent Powder” prescribed by AWADHESH

PRATAP SINGH UNIVERSITY, REWA during the academic year 2014-2015 under the

guidance of …………………. is my original work.

The matter presented in this report has not been copied from any source. I

understand that any such copying is liable to be punishable in any way the

university authorities deem to be fit. Also this report has not been submitted

earlier for the award of any Degree or Diploma of Awadhesh Pratap Singh

University, Rewa or any other University.

This work humbly submitted to Awadhesh Pratap Singh University for the

partial fulfillment of Master of Business Administration (Sem-IV).

PLACE: SATNA MR. DEEPANKAR


BHATTACHARYA
DATE: / / 2015

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VINDHYA INSTITUTE OF MANAGEMENT & RESEARCH,
SATNA (M.P.)

ACKNOWLEDGEMENT

Whenever we are standing on most difficult step of the dream of our life,
we often remind about The Great God for His blessings & kind help and he
always helps us in tracking off the problems by some means in our lifetime. I feel
great pleasure to present this project entitled “A Study of Sales and Promotion of
Ghari Detergent Powder”.
I am grateful to those people who help me a lot in preparation of this
project report. It is their support and blessings, which has brought me to write
this project report. I have a deep sense of gratitude in my heart for them.
I would give sincere thanks to Mr. K.P.Tripathi, Asst. Professor, VIMR Satna for
his valuable guidance.
I am very thankful to my project guide ………………….. for his whole-
hearted support and affectionate encouragement without which my successful
project would not have been possible.
Finally, I am very grateful to Mighty God and inspiring parents whose
loving & caring support contributed a major share in completion of my task.

Mr. Deepankar Bhattacharya

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TABLE OF CONTENTS

S.N. Contents Page No.

1 Introduction of Project 6-17

2 Company Profile 18-25

3 Review of Literature 26-31

4 Objectives 32-33

5 Research Methodology 34-37

6 Data Analysis & Interpretation 38-51

7 Findings & Suggestions 52-55

8 Limitations 56-57

9 Conclusion 58-59

10 Bibliography 60-61

Annexure
11 62-64
Questionnaire

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CHAPTER-I

INTRODUCTION OF PROJECT

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INTRODUCTION:

The importance of consumer sales promotion in the marketing mix of the fast moving
consumer goods (FMCG) category throughout the world has increased. Companies spend
considerable time in planning such activities. However, in order to enhance the effectiveness
of these activities, manufacturers should understand consumer and retailer interpretations of
their promotional activities. The study here pertains to consumer’s perceptions regarding
sales promotion. Some past researches have suggested that promotion itself has an effect on
the perceived value of the brand. This is because promotions provide utilitarian benefits such
as monetary savings, added value, increased quality and convenience as well as hedonic
benefits such as entertainment, exploration and self-expression.

Broadly speaking most of the companies using Marketing Mix which includes…

Price
Place (Channel of Distribution)
Product

Promotion

These are the four basic pillar of marketing mix. Most of the marketing strategies are built on
the basis of these criteria.

Promotion is one of the important elements of marketing mix. There are so many elements of
promotion such as …

Advertising
Direct Marketing
Public Relations

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Sales Promotion

Traditionally, sales Promotions have been used by marketer to increase sales in the short
term. However, in the last few decades this communication tool has evolved and now is
considered from a strategic point of view. For this reason, it is necessary to realize new
studies in this area and study how consumers evaluate sales promotions.

Sales promotions have grown in both importance and frequency over the past few decades.
Although an accurate estimate for total sales promotions expenditures does not exist, we can
be sure that the trend is up.

Sales promotion serves three essential roles: It informs, persuades and reminds prospective
customers about a company and its products. Even the most useful product or brand will be a
failure if no one knows that it is available. As we know, channels of distribution take more
time in creating awareness because a product has to pass through many hands between a
producer and consumers.
Therefore, a producer has to inform channel members as well as ultimate consumers about
the attributes and availability of his products. The second purpose of promotion is persuasion.
The cut throat competition among different products puts tremendous pressure on their
manufacturers and they are compelled to undertake sales promotion activities. The third
purpose of promotion is reminding consumers about products availability and its potential to
satisfy their needs.

From these elements Sales Promotion is the element which is in the focus of this project.
Further Sales Promotion is quite broad term it includes …

Consumer Oriented Sales Promotion


Trade Oriented Sales Promotion

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Consumer Oriented Sales Promotion

Consumer Oriented Sales Promotion is the main topic of this project. Here emphasize is
given to motivate consumer to increase sales. Consumer Oriented Sales Promotion includes
Sampling, Couponing, Premiums, Contest, Refunds, Rebates, Bonus Pack’s, Price-off, Event
marketing etc.

Definition:

For the purpose of this study, following definitions of sales promotion were kept in mind.
Kotler defines sales promotion as: “Sales promotion consists of a diverse collection of
incentive tools, mostly short-term designed to stimulate quicker and/or greater purchase of
particular products/services by consumers or the trade.”

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.”

Hence, 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.

Marketer’s uses consumer oriented sales promotion tools for the following reasons:

 To increase short term sales


 To induce trial
 To reduce inventory
 To establish a brand name
 To make cross selling
 To cope up with competition
 To avoid advertising clutter

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Tools of Consumer Oriented Sales Promotion:

There are so many tools or technique available to the marketers for achieving objective of
sales promotion. These tools should be used considering all other factors affecting such as
cost, time, competitors, availability of goods etc. These tools are as under…

1. Coupons
2. Price-Off
3. Freebies
4. Scratch Cards
5. Lucky Draws
6. Bundling Offer
7. Extra Quantity

1. Coupons:
Coupon is the oldest and most widely used way of sales promotion. Coupons have been used
since 1895. It is mostly used by packaged goods. It is worthwhile to use coupon as a
promotion tool because data shows that market for packaged goods increased from 16 billion
in 1968 to 310 billion in 1994. To boost up the sales not only manufacturer but retailers
personally can also used. A coupon leads to price reductions so as to encourage price
sensitive customers. Non users can try a product which may leads to regular sales.

2. Price-off:
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 but the use
of this technique should be carefully considered in the current market situation.

Price-off is the most preferred sales promotion technique because consumers response very
positively to this scheme. Not only that but 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. Krack Jack offers 30% Price-off.

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3. Freebies
Freebies are a popular form of modern marketing and are some of the best things about the
internet. The definition of freebies is products or services given away for free at no cost to
the consumer. Well that’s the definition we came up with. I am a bargain freebie shopper,
pretty much going for any free product and informing everyone about it.

4. Scratch Cards
A scratch card (also called a scratch off, scratch ticket, scratcher, scratchie, scratch-it, scratch
game, scratch-and-win or instant game) is a small token, usually made of cardboard, where
one or more areas contain concealed information: they are covered by a substance that cannot
be seen through, but can be scratched off.

5. Bundling Offers
Product bundling is a marketing strategy that involves offering several products for sale as
one combined product. This strategy is very common in the software business (for example:
bundle a word processor, a spreadsheet, and a database into a single office suite), in the cable
television industry (for example, basic cable in the United States generally offers many
channels at one price), and in the fast food industry in which multiple items are combined
into a complete meal. A bundle of products is sometimes referred to as a package deal or a
compilation or an anthology.

Factors Influencing Consumer Oriented sales promotion:

Mainly four factors should be taken into account while determining the sales promotion
program.

> Target market


> Nature of product
> Stage of product life cycle
> Budget available for promotion

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1. Target Market:
While doing sales promotion, marketer must know who their target market is; otherwise there
is no use of all effort because it leads to no where. A target market can be in any of the stages
of buying hierarchy i.e. awareness, knowledge, liking, preferences, conviction and purchase.
Each stage defines a possible goal of promotion.

2. Nature of the product:


There are various product attributes which influence sales promotional strategy. When the
unit price is low the manufacturer as well as the customer has low risk but he can get the
benefit of mass marketing. Therefore, mass marketing requires mass sales promotion
schemes. Sales promotion scheme differ for products like its durability, perishable goods etc.

3. Stage of product Life Cycle:


Sales promotion strategies are influenced by the life cycle of a product. When a new product
introduced, prospective buyers must be informed about its existence and its benefits and
middlemen must be convinced to stock it. Later, if a product becomes successful,
competition intensifies and more emphasis is placed on sales promotion to increase its sales.

4. Budget Available for Promotion:


The funds available for promotion are the ultimate determinant of the promotional
programme. A business with ample funds can make more effective use of sales promotion
programme than a firm with limited financial resources. The budget for sales promotion can
be prepared by the following methods…

Percentage of Sales
Fixed funds available for sales promotion
Following the competition, and
Budgeting by objective.

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Sales Promotion from the Consumers point of view

Willingness to buy on sales promotion offer

Sixty per cent of the sample did not show willingness to buy a brand due to promotion while
30% showed willingness and 10% were not sure. This indicates that when 30% showed
willingness and 10% consumers who were not sure, these groups might be lured through
innovative and lucrative sales promotion offer.

Ability to induce trial

Forty per cent of the respondents had said that sales promotion had the ability to induce trial
which reinforces the above inference.

Long-term impact

In order to understand ability of the promotions to increase long-term sales, respondents were
asked about continuity of purchase of a brand after the withdrawal of promotion. Eighty per
cent of the respondents indicated that they would not continue. But 20% said they would.
Thus, it could be inferred that promotions in this category (low involvement products) might
encourage trial and brand switching but not long term loyalty.

Preference of Schemes:

Price off was the most preferred type of scheme. Maximum customers’ ranked price-offs as
number one or two.

Perceived Quality:

Majority of respondents had a perception that the quality of the promoted brands remained
the same during promotion, while some of them felt that it was inferior than before. It can be
inferred that promotions were not leading to negative brand quality perceptions. It is found
that some customer strongly preferred to buy their regular brand and said that sales
promotion would not weaken their loyalty towards the brand.
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Sales promotion from the retailer’s point of view:

Perceptions on Scheme Preference


It was found that retailer perceived price offs as a better 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 Bonus packs, Premium, Contests etc. Retailers preferred price offs the
most, then bonus pack, premium, contests, in order of importance.

Perceptions about Buying Roles


Retailers viewed that the person who came to the shop (who may be a maid, son, daughter,
daughter-in-law and child) was the decider of a toilet soap brand and not the Income provider
(e.g. head of the family). It could be inferred that visibility of information about the sales
promotion activity at the point of purchase could result into the purchase of a promoted
brand.

Perceptions about their role in decision-making

Retailer had relatively very low influence in affecting choice. It could be inferred that
visibility and awareness about the scheme were the critical success factors so that pull could
be created.

Perceptions about Response to Sales Promotion Offers


They believed that younger age-groups were more experimental in nature, amenable to trying
new brands, and sought/looked for or asked whether there were any) sales promotion
schemes running on any toilet soap at the time of purchase.

Perceptions about Communications of Sales Promotion Schemes

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.

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Margins

It was found that in sales promotion schemes margins varied from 6 to15% depending
of the size of the retail outlet, bargaining power of a retailer, quantity ordered by him etc.
Mostly margins were linked to size of the volumes that were ordered.

Perceptions about terms and conditions

Retailers were not found to be happy with sales promotion schemes where their
margins were cut on the pretext of just fast movement of inventory of the brand being
promoted. Also if additional incentive was offered it was subject to minimum performance
requirement.

Nature of POP

Retailers indicated that most of the POP (Point of Purchase) materials were meant for
brand advertisement and not for giving information regarding the schemes. Thus it could be
inferred that company’s follow up was not adequate.

Servicing during duration of Scheme

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 by the
dealer salesman but big retailers were serviced on telephonic request for replenishment of
stocks. This clearly indicated the disparity in treatment.

Problem of left-over

A leftover stock at the end of any scheme was required to be sold by the retailers
before they ordered fresh stocks. In case of bonus packs scheme, leftover stock was often
dismantled (cut open buy one get one free) and sold them individually as a regular soap. This

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

Gifts for Retailer motivation

Companies at times were rewarding retailers by giving free gifts like thermos flasks
or clocks if they sold more than certain quantity in a given period. Companies were making a
half-hearted effort to motivate retailers.

Perceptions about mass media announcements

Retailers viewed that whenever sales promotion scheme was announced on TV, it
created pull and they were more than willing to stock such brands. For example Medimix and
Dettol contest was not advertised on TV, hence there was very little awareness leading to
unsold stock till 6 months. While Lux Gold Star which was heavily promoted on T.V. is
recalled even today.

Post Promotion Behavior

Retailers observed that in most cases sales promotion scheme on a brand might
encourage a buyer to switch a brand temporarily but he would revert back to original brand
after promotion.

Handling Problems

Many a time’s 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. Remembering each offer and handling was a problem
especially for a small retailer which was often an as one-man show.

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Why do Sales promotion schemes affect sales?

There are three mechanisms behind these facts. It is Purchase quantity, Brand switching and
Category expansion.

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

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CHAPTER-II

COMPANY PROFILE

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COMPANY PROFILE:

 Ghari Detergent powder is manufactured by Rohit Surfactants Private Limited


(RSPL), a Kanpur based 3000 crore diversified conglomerate in India.
The detergent brand was founded by Muralidhar and Bimal Kumar Gyanchandani in
1987.

 It came to limelight in late 2012 when it beat HUL's Wheel detergent and grabbed the
top spot in terms of market share. After 25 years of its inception, it took the top spot
in the detergent market. In November 2012, Ghari was the market leader with a
17.4% share compared with Wheel's 16.9% and Tide’s 13.5%.

 The product was low priced and targeted at the rural customers, middle class and
lower-middle class customers. A 1 kg pack of Ghari detergent is priced at Rs 35 and a
2.5 kg pack is priced Rs 85 only.

 Two years ago, RSPL flagged off the 'Ghari Detergent Express', a train whose
exteriors are painted with Ghari branding that ran between Lucknow and Guwahati
for two months.

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 Ghari has spread its distribution network to more states now and directly reaches rural
markets, which is its biggest audience. It has 21 manufacturing units, 15 of which
were added since 2006.

 The tagline “Pehle istemaal karein fir vishwaas karein” (Use it and then believe it)
which encourages trial and prompts repeat purchase.

 Promotions are done through roadside shows, magic shows and exhibitions in smaller
towns and cities.

 Ghari is for common man and usually it targets household wives. To live in that spirit
Ghari brand has avoided using any celebrity to endorse it unlike wheel (endorsed
by Salman Khan), Rin (Kajol), and Ariel Oxybin (Kiran Bedi).

SWOT ANALYSIS

Strength:-

1. Market leader in the tier-3 & tier-4 segment of detergent market in India.

2. Strong reach to the rural consumer.

3. The tagline ‘Pehle istemaal kare fir wishwaas kare’ has struck a chord amongst the
price-sensitive mass market.

4. High push by retailers and high word-of-mouth amongst consumers.

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5. Good branding through TVCs and print ads.

6. Indigenous brand name which is very associative with the rural masses as well as
those at the bottom-most segment.

7. Home market UP with population 167 million constitutes over 12% of the
country’s FMCG sales.

8.Affordable pricing.

Weakness:-

1. Limited export market as compared to international brands.

2. Unable to completely penetrate in premium segment because of image.

3. Quality not very superior.

Opportunity:-

1. Entered western & southern India recently where a huge market opportunity lies.

2. Further penetrate the rural market by collaborating with various NGOs.

Threats:-

1.Low profit margins in detergent sector.

2.Threat from existing and new players in the market.

3.Huge conglomerates (HUL and P&G) with a large capital base and strong presence
in the detergent market to compete with.

MARKETING MIX (4 P’S)

 Product:-

i. Ghari detergent is a mediocre brand.

ii. Significant features are resistance against moth and shrinkage, no toxic chemicals
present and it leaves a pleasant fragrance in clothes.
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iii. It is formulated in accordance with the well-defined parameters of the industry. To
ensure flawlessness and accurate results, it is thoroughly inspected before dispatching
to the customers' premises.

iv. Variants are:-

• Detergent cake - 340 Gms, 190 Gms, 95 Gms

• Detergent powder - 3 Kg, 1 Kg, 500 Gms, 210 Gms, 90 Gms, 15 Gms

 Price:-

i. Pricing is inspired by Nirma’s low-cost model. Ghari followed Nirma’s strategy of


keeping low price and targeting customers at the bottom of the market.

ii. Keeping in mind its target market, i.e. the lower end of economy, the company has, as
far as possible, avoided passing on the burden of rising raw material costs on to the
customers.

iii. Ghari provides a profit margin of 9% to its dealers, which is substantially lower than
the standard 12-13% for premium brands, and at the same time, higher than the 6-7%
being offered by the competitors in the same segment. Thus the company has been
working towards creating a strong dealer base while keeping its prices low.

iv. It took the bold step of pricing at a 10% premium over HUL’s Wheel and Nirma - Rs
35 a kg as against Rs 30. It’s a brilliant gap that Ghari has found as it is priced above
mass brands like Wheel and Nirma but much below mass premium brands such as
Tide and Surf.

 Place:-

i. Before going national which would have spread its resources very thin, RSPL focused
on Uttar Pradesh to begin with, which has a population of 167 million and accounts
for over 12 per cent of the country’s FMCG sales.

ii. It focused on developing an intense distribution network to reach the customers


effectively, which is evident from the fact that out of 3000 dealers in India, 900

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dealers are in UP and 25 of them are in Kanpur alone. It has almost 50% of its 21
manufacturing units in UP.

iii. Ghari has spread its distribution network to more states now and directly reaches rural
markets, which is its biggest audience. In the past 3-4 years, Ghari added 10 states to
its distribution reach. The brand is now present in 19 states. A regional brand had
suddenly gone national, reaching out to millions of new customers. To complete this
push effect, the company added over 1,000 dealers and now has a total network of
3,500. The next target is to cover the remaining 15-odd regions (states and union
territories) in the next two years .

iv. Ghari now has some 21 units, 15 of which were added since 2006. With the company
now looking to enter more markets, especially in southern India, at least four more
plants are expected to be set up as early as possible.

v. Promotion:-

RSPL has attempted to prove that you can be innovative without splurging and
without hiring anyone from the IIMs, either. Ghari spends under 2% of sales on A&P
- as against 12-14% spent by its MNC peers – which helps it sustain its low margin,
high-volume strategy.

All advertisements are centered on the tagline ‘Pehle istemaal karein fir vishwaas
karein’ (Use it and then believe it) which encourages trial and prompts repeat
purchases. Ghari is for common man and usually it targets household wives. To live
in that spirit Ghari has avoided using any celebrity to endorse it unlike Wheel
(endorsed by Salman Khan), Rin (Kajol), and Ariel Oxybin (Kiran Bedi). They
believe that Ghari doesn’t need any celebrity so let consumers use it and then trust the
brand.

Ghari has been very innovative in reaching the customers. With only 35 crores
allotted for marketing and promotional activities, it has used trains for initial
campaigns to promote the product. The first campaign was the Ghari Detergent
Express (a summer special) in 2008 that ran between Lucknow and Guwahati for 2
months. Its exteriors were painted with Ghari branding. Taking the cue from there, it
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then advertised in Pushpak Express that runs between Lucknow and Mumbai. .
Advertisements were also displayed inside the bogies of Swarna Jayanti Express
(from Trivandrum to Hazrat Nizamuddin in Delhi) that cuts across 3-4 states in south
India in 2009. The brand can also be seen on railway crossings in West Bengal and
Uttar Pradesh.

Porter’s five force model

 Rivalry among existing competitors

The major competitors are Wheel and Nirma in the popular segment and Surf and
Tide in the overall market.

Currently, Ghari is the market leader with a market share of 17.3%, Wheel is at
number 2 with a share of 16.9% and Tide is 3rd with a market share of 13.5%. Nirma
has market share of less than 6% now.

HUL gives tough competition in the detergent market as it has one product for each
segment viz. Surf (premium segment), Rin (mid-scale) and Wheel (popular).

Ghari competes mainly on its affordable pricing, target market segment, distribution
reach (especially to rural areas), size of its home market UP (which contributes over
12% to the country’s FMCG sales) and novel, innovative and effective promotional
tactics.

 Threat of new entrants

As Ghari is not a very high quality product, entry of detergents with better quality but
affordable pricing can be a serious threat. Entry is easy as there are low barriers of
entry in the FMCG sector and economies of scale exist here.

 Threat of substitute products

In today’s fast life, even women do not have the time and patience for manual
washing of clothes. This is the age of highly innovative washing machines. Ghari is a
bucket-wash detergent which can be threatened by sophisticated detergents meant for
effective as well as gentle washing of clothes in washing machines.
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Detergents with properties to protect the hands from roughness, dryness and allergic
reactions in the process of washing can also be a threat.

Bargaining power of Suppliers-

Suppliers tend to have a low bargaining power as Ghari is not of a very superior
quality, and the basic ingredients are easily available since there are numerous
suppliers in the market, switching costs for the raw materials is also not very high.

• Bargaining power of buyers

Buyers do possess a strong bargaining power as Ghari is the major contributor to the
turnover of RSPL (it ended fiscal 2011 with net sales of 2,200 crore — Ghari
contributed 2,083 crore), mostly buyers have full information about the products and
market even in rural areas, products are more or less undifferentiated in terms of
features(major distinguishing factor is the price) and the switching costs are
low(Ghari is priced at 10% premium over Wheel and Nirma at Rs 35 a kg).

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CHAPTER-III

REVIEW OF LITERATURE

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Review of Literature:

Variant techniques are used to increase sales by providing free samples. Despite of sales
promotion plays significant role in the marketing mix this method seems to be less regarded
than other parts (direct marketing, advertising) as Srinivassan, and Anderson (1998)
postulate. There is evidence that more than in other areas of marketing managerial positions
in sales male executives dominate (Harmon, 1997). In this chapter, several topics are
described. First, its function, benefits and limitations are discussed. Next, objectives and
finally, techniques of sales promotion are represented.

Functions of Sales Promotion

The sales promotion techniques influence customers, resellers and producers as well (Fill,
1999). Dawes (2004) points out that the growing trend of utilization of this marketing tool
could be observed in recent years. According to his survey, sales promotion makes the
purchasing procedure significantly easier. Also due to rising range of products offered, the
sales promotion helps the producers to gain more space on the retail shelves and the resellers
could lure customers to their stores as the author says. However, sales promotion does not
provide economies of scale compared to advertising, so it is more likely to be utilized by
companies with lesser market share (Low and Mohr, 2000).

Benefits of Sales Promotion

Sales promotions have a doubtless impact on the process of production as it enables to settle
the fluctuation of consumer demand; moreover, its changeability to the amount produced
fosters the small businesses’ financial situation towards greater competitors in the
marketplace as larger enterprises have usually less limited financial sources (Yeshin, 1998).
Sales promotion can be considered as a great tool for growing the sales in short period of
time (Alvarez and Cassielles, 2005). Launching new products connected with effort to
convince the customers to try avoids outdating; mounting the merchandise offered extends
the customers’ selection can be stated as other benefits of sales promotion (Dawes, 2004).

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Limitations of Sales Promotion

However, not only advantages can be seen when explaining the role of sales promotion. It
indubitably underpins brand switching which causes bad perception of the brand (Yeshin,
1998). Even some of the loyal consumers start buying the promoted product on the certain
occasion only (when the sales promotion is running) or they may start thinking that the
promoted brand encounters sales problems as Peattie and Peattie (1995) demonstrate. Alvarez
and Cassielles (2005) proclaim that exaggerated use of sales promotion jeopardises the brand
profitability at all. Finally, d'Astous and Landreville (2003) state that despite of extensive
exploitation of sales promotion in the marketing mix there is a scarce of academic research in
this particular field.

When sales promotion works

To evaluate the efficiency of the sales promotion campaign several criteria have to be met.
Yeshin (1998) introduces the idea as follows:

 Setting the objectives must be done in a proper way in terms of obviousness and
conciseness

 Measurement of the targets is commonplace

 Placing unrealistic aims has no sense

 Financial covering of the campaign must be sufficient

Alvarez and Cassielles (2005) highlight that sales promotion cannot be realised as an
extemporisation, conversely, detailed devices should be worked out.

Sales promotion objectives


There are two types of sales promotion objectives. These are consumer objectives and trade
objectives and both of them will now be considered in turn.
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Consumer objectives

Consumer objectives focus on the final user. There are a number of aspects that fall into this
category. Firstly, there is the increasing use of customer registers, both current and
prospective, by firms (Yeshin, 1998). Then, there is the persuasion of consumers to try new
or current merchandise which Rowley, (1998) identifies a main objective of sales promotion.
The success of such a campaign is also dependent on the nature of the promoted product and
the consumers’ involvement in the purchase (Fill, 1999). For more facts, see Figure 3.4.

Figure 3.4: A sales promotion objectives grid


Involvement

High Low

New Without sales Use sales promotion


product or promotion to stimulate trial
market

Established Non-loyals – use for Non-loyals – use


product or switching sales promotion to
market attract for trial
Loyals – use carefully
Loyals – use sales
promotion to reward
for increased usage

From the figure above several issues can be observed. For current merchandise or services,
the strategy is apparently either to boost the usage or to persuade new customers to purchase
a product. Thereafter, the levels of usage and trial for the particular market segment have to
be approved (Fill, 1999).

A further consumer objective is product re-purchase/loyalty. The aim of this objective is to


create repeated shopping in the short-term strategy and for the long term to originate the
consumer loyalty (Alvarez and Cassielles, 2005). Increase rate/frequency of purchase has
suchlike objectives as the former one; the achievement may be reached by showing new
29
utilisation of the current product (Yeshin, 1998). Trading up is another consumer objective.
Fill (1999) describes trading up as a technique where the producer prepares the promoted
product in small quantities and gives it in the consumers’ disposal in order to persuade them
to buy larger amounts later. Parsons (2003) summarises that because of its quick operation
sales promotion is useful when launching a new product or when the producer’s intention is
to overcome the difficulties connected with some periods of the product life cycle.

Trade objectives

There are a number of trade objectives which the manufacturers may seek to meet. Resellers
frequently use traffic building to lure the customers to visit the store where the particular
promoted merchandise can be purchased (Dawes, 2004). This means profit for both partners
of the distribution channel – the producer and the retailer as well. The other trade objective
is inventory building. Because of the producer wants the customer to buy greater amounts of
the goods he or she also wants to convince of extensive inventory is available (Närhinen,
Nissinen and Puska, 2000). On the other hand, as Yeshin (1998) suggests, the producer may
develop new product so he wants the reseller to diminish his or her inventory. Parsons (2003)
assumes that sales promotion is due to its ability to react quickly could be used to decrease
the effect of competitive doings, which is another type of trade objectives. There is another
option how to support the trade. In congruence with Yeshin (1998), many aims of support to
trade could be observed: in-store sampling, seasonal production (swimming suits, ski, and
many others), impetus to try new products and so on. Lucas (1996) presumes that in-store
promotion appears to be not very profitable. Närhinen, Nissinen and Puska (2000) add that
the company might seek to rejuvenate decreased sales with proper sales promotion.

Sales Promotion Techniques


Basically, there are three members of the distribution chain, all of them having distinct
objectives. In this part, all the aims will be shown in more depth. First, techniques that
manufacturers use to cooperate with resellers, second, the methods of maintaining the
relations between resellers and consumers will be mentioned and third, the main attention
will focus on techniques used by manufacturers to attract consumers. To illustrate the
possible channels of distribution, see Figure 3.5. The company investigated in this research is

30
presented as manufacturer dealing with final consumers therefore, we will focus on
objectives connected with manufacturers and resellers in more depth.

Figure: Consumer marketing channels

Manufacture Consumer
r

Retailer

Wholesaler Retailer

Source: Adapted from Kotler (1994, p. 529)

Fill (1999) emphasises that manufacturers who try to persuade retailers to stock their
merchandise frequently use these kinds of concessions:

 buying allowances – the retailer is enabled to keep particular amount of goods in


recurred for certain orders

 merchandise allowance – the reseller is entitled to keep arranged amount of goods


without paying for it

 competition for the retailers – aimed to underpin the retailers’ accomplishment

 further training for the resellers without charging

31
CHAPTER-IV

OBJECTIVES OF THE STUDY

32
OBJECTIVES

1. To study consumer preferences with respect to sales promotion in FMCG sector.

2. To examine tradeoffs, relative importance of different attributes while responding to a

sales promotion offer.

3. To study the effect of sales promotions in FMCG sector esp. in soaps and detergent

industry.

4. To study consumer behavior in purchase of soaps and detergent

33
CHAPTER-V

RESEARCH METHODOLOGY

34
Research Methodology:

This project is prepared with the help of theoretical knowledge as well as practical
knowledge & a crumb of advises & suggestions from the concerned professors. As far as
practical is concerned, all the information about the companies information available on
internet. The theoretical pert taken from the various books & magazines available on this
subject. And other recent happing in marketing is taken from magazines & news paper.
Overall this mission has been completed with the combination of all those things & it had
been with the best of my facts & information.

Research methodology refers to search for knowledge. Redman and Mory define research as
a “Systematized effort to gain new knowledge. Research is an academic activity and such the
term should be used in technical sense. According to Clifford Woody, Research comprises
defining and redefining problem, formulating hypothesis or suggested solutions; collecting,
organizing and evaluating data; making deductions and research conclusions; and at last
carefully testing the conclusions to determine whether they fit the formulating hypothesis.

Research is thus an original contribution to the existing stock of knowledge making for its
advertisement. It is pursuit of truth with the help of study, observation, comparison and
experiment. In short the search for knowledge through objective and systematic method of
finding solution to problem is research.

RESEARCH DESIGN

A Research design is the arrangement of conditions for collection and analysis of data in a
manner that aims to combine relevance to the Research purpose with economy in procedure.
In fact the Research design is the conceptual structure within which Research is conducted: it
constitutes the blueprint for the collection measurement and analysis of data.

35
It must be able to define clearly what they want to measure and must find adequate methods
for measuring it along with a clear cut definition of population wants to study. Since the aim
is to obtain complete and accurate information in these studies, the procedure to be used must
be carefully planned. The research design must make enough provision for protection against
bias and must maximize reliability with due concern for the economical completion of the
search study.

Descriptive research is adopted for this study. It includes surveys and fact finding
enquires of different kinds. The major purpose of descriptive research is description of the
state affairs as it exists at present. The main characteristic of this method is that the
researcher has no control over the variables. He can only report what has happened or what is
happened.

SAMPLING DESIGN

A sample design is a definite plan for obtaining a sample from the sampling frame, it refers to
the technique or procedure the researcher would adopt in selecting some sampling units from
which interferences about the population is drawn. Sampling type used is Simple Random
sampling technique.

POPULATION AND SAMPLE SIZE

A decision has to be taken concerning sampling unit before selecting sample. The population
for this study includes the Customers and retailers from Satna City. 100 employees were
undertaken for the study.

DATA COLLECTION

For achieving the specific objectives of this study, data were gathered from both primary and

36
secondary sources.

1. Primary Data Collection Method:

o Survey method was used for primary data collection.

o We used questionnaire as an instrument for survey method.

o Structured questionnaire.

o Type of questionnaire: Open ended and closed ended.

2. Secondary Data Collection method:

o Reference books.

o Internet.

Sampling Detail

1. Target population: The population for this research study consists of the residence of

Satna.

2. Sampling unit: In this study the sampling unit is individual consumer.

3. Sample size: 100 consumers 100 retailers.

4. Sampling method: The sample is selected by using convenience-sampling method.

37
CHAPTER-VI
DATA ANALYSIS & INTERPRETATION

38
DATA ANALYSIS AND INTERPRETATION

Consumers

Q.1 Which brand of detergent do you use?

Detergent powder Respondents


Ghari 19
Wheel 14
Surf 35
Ariel 18
Others 14
Total 100

Interpretation:

39
Form the above chart it is clear that out of 100 customers 35 are purchasing Surf detergent

then 19 are using Ghari Detergent powder.

40
Q2. Do you always buy the same brand of Detergent?

Particulars Respondents
Yes 56
No 44

Interpretation:

From the above chart it is clear that out of 100 customers, 56 are using the same brand of

detergent while rest of the customers is using the other brand.

41
Q3. Which factors do you normally consider while purchasing a particular brand of

Detergents?

Factors Det. powder


Fragrance 18
Quality 36
Company image 13
Price 19
Packaging 11
Others 3
Total 100

Interpretation:

From the above chat it is clear that out of 100 customers, 36 like the quality of the product.

42
Q4. Do you consider promotional schemes while purchasing a particular brand of

Detergent?

Particulars Respondents
Yes 78
No 22

H0: Promotional schemes have a significant effect on the purchase of brand.

H1: Promotional schemes do not have an effect on the purchase of brand.

Interpretation:

Answer of this question will give idea about the effect of promotional schemes in the

purchase decisions. Such types of schemes always attract more and more consumers towards

particular brand. Simultaneously it gives idea about the factors which consumers look most

in the product before they make final decision.

Here H0 is accepted as the graph shows that 78 out of 100 consumers are looking for such

schemes before they make purchase.

43
Q5. Which of the following promotional schemes you have come across so far?

Promotional schemes Respondents


Coupons 16
price off 84
Freebies 24
scratch cards 12
lucky draw 9
Bundling 31
extra qty. 44

Interpretation:

The above stated question clearly states the awareness of promotional schemes offered in the

market by the marketers to attract more and more consumers.

The results show that price off and extra quantity is the two main offers/schemes which

consumers have came across at the time of purchase. It will help the manufacturers and

marketers too how too launch their new products in the market with which schemes.

44
Q6. Which medium do you feel is suitable to promote the various promotional schemes?

Source Respondents
Radio 11
TV 69
Newspaper 43
Hoarding 15
Others 12

Interpretation:

This question gives stress on the media habit of the people and through which the product

should be launch or they think it would be better than other Medias.

The above result shows TV as the best media to market the product which will cover

majority of the viewer ship. On the second place it shows news papers as the media to

promote the product in the market.

45
Retailers

Q.1 Since how long are you in the business?

Particulars Respondents
1-5 Years 24
5-10 Years 27
More than 10 years 49

Interpretation:

This question gives idea about the benefit to the retailers who are on the market from long

period of time and the benefits they are getting more as compare to others. It also shows their

experience in the field and the services they are providing too their new and regular

customers. It also gives idea about the benefits they are gaining for wholesalers and direct

from the company.

46
Q2. Name the Detergent (Company) you stock for.

Companies Respondents
Ghari 96
HUL 100
P&G 90
Godrej 94
Others 68

Interpretation:

It gives idea about the capacity of the retailers to stock the goods and also the variety of the

products they are stocking. It will also make clear the demand of the goods in their stores and

the selling of the product in market. Most of the retailer stocks all types of soap and

detergent.

47
Q3. Rank the following factors that customers look for in the purchase of Detergent.

(Rank from 1 to 6)

Factors 1 2 3 4 5 6
Fragrance 11 17 41 21 7 3
Quality 43 34 16 6 1 0
Company Image 13 16 27 26 11 7
Price 27 28 14 9 6 16
Packaging 6 5 2 33 43 11
Others 0 0 0 5 32 63

Interpretation :

It gives an idea about the priority the influencing factors too the consumers and also the

weight age of that factor over other factors.

In the above result people are more quality and price oriented. On the other hand people are

also conscious about the company image. Because sometimes the consumer remembers that

name of the product by the company name and also from the past performance of that

company. Fragrance and packaging are also play important role for purchasing detergent

powder.

48
Q4. Do you suggest customers to purchase a certain brand?

Particular Respondents
Yes 33
No 67

Interpretation:

This could be a very help question to understand the role of retailers in the purchase decision.

In above graph 67% of retailer are not suggest to purchase particular brand because of

personal relation or that customer are brand loyal. While 33% of the retailer are suggesting

the consumers to buy particular brand. There could be many reasons like, extra margin,

relations with consumers and quality of the products which retailer may get the benefit of the

same.

49
Q5. If Yes why?

Particular Respondents
High margin 9
Quality 17
Relationship 7
No reason 67

Interpretation:

it gives idea about the reasons why retailers suggest the consumers to buy particular brand.

In above graph and table it is clear that for margin and of better relations with consumers and

too provide quality product to consumers they suggest consumers too bye particular brand.

For the company it may be helpful to target such retailers to sell their product in the market

easily.

Q6. Which Trade Promotions do various companies offer?


50
GHARI
Promotions Respondents
Extra Margin 46
Extra Units 34
credit facility 55
Gifts 24
promo. Exp. 8

H0: Effect of trade promotions for all four brands is similar.

H1: Effect of trade promotions for all four brands is not similar.

Interpretation:

From the above graph shows the trade promotions offered by the GHARI Ltd to the retailers

to attract them towards stocking their goods and also stop them switching them too other

major players in the market.

GHARI is mainly offering credit facility which is offered by all major players it may differ in

the time limit of the credit. It is also providing extra margin, and units with occasional gif

with their schemes.


OTHERS
Promotions Respondents
51
Extra Margin 30
Extra Units 18
Credit facility 38
Gifts 15
Promo. Exp. 7

Interpretation:

Others include local players, as well as we established players like, wipro but their products

are not in demand like other players but still they are providing all the facilities to retailers to

attract towards stocking their products.

52
CHAPTER-VII
FINDINGS & SUGGESTIONS

53
FINDINGS

It has been found that:

Sales Promotion, a short-term inducement, offered to a consumer or trade has gained


momentum as a promotional tool world over. It represents nearly three fourth of the
marketing budget at most consumer product companies. Sales promotions can enhance
consumers’ self-perception of being “smart” or a “good” shopper

 Quality as the most influencing factors in the purchase decision while price is also an
important for purchase decision.
 Schemes always attract more and more consumers towards particular brand.
Simultaneously it gives idea about the factors which consumers look most in the
product before they make final decision.
 Price off and extra quantity is the two main offers/schemes which consumers have
came across at the time of purchase.
 TV is the best media to market the product which will cover majority of the viewer
ship. On the second place it shows news papers as the media to promote the product
in the market.
 People are not much aware of the schemes which continue in the market it may be
because of the present stock of the product at their place.
 Retailer stocks all types of detergent because of competition.
 People are more quality and price oriented.
 Consumer remembers that name of the product by the company name and also from
the past performance of that company.
 Consumer remembers that name of the product by the company name and also from
the past performance of that company.
 Margin and of better relations with consumers and too provide quality product to
consumers they suggest consumers too bye particular brand.

54
 Customers are looking for any type of the promotions on the product before them
going to purchase.

55
Recommendation:
The findings of the empirical study indicate that unless the brand to be promoted is in the
consideration set of the consumer, sales promotion by itself is unlikely to have any major
impact. Clearly this shows that managers need to invest into brand building exercise so that
his/her brand appears in the consideration set of the target consumers. Only after this should
he spend time, money and energy on sales promotion activities.

Sales promotion should not be used in isolation but need to be integrated with other tools and
in line with the overall positioning of the brand. Also the importance of the role of mass
media came out clearly in the study.

Companies need to create sufficient awareness about sales promotion schemes through mass
media in order to create awareness. FMCG products are low involvement products
characterized by switching behavior. Also the person going to the shop for the purchase of
soap is the final decision maker of the brand. Hence it is essential that companies need to
design attractive, striking, visible POPs for scheme announcements.

With respect to nature of scheme, the finding suggested that premium (free gift) was popular
with companies. While both retailers and consumers preferred price offs. So it is necessary
that the perceived value of a free gift has to be appealing and high for the target consumers.

Repetitive use of the same premium for a prolonged period may have negative effect on the
loyal customers. When the company is giving its own product free as premium, it needs to
ensure the quality of the product from it as it is likely to jeopardize the image of both its
products.

The findings exhibited that both the retailers and consumers perceived that sales promotion
activities carried out by the companies for increasing sales in short term and clearing excess
stocks. What it implies is that companies need to use sales promotion synergistically and
communicate so that they provide value to the target audience and enhance brand
quality/image perceptions.

56
Companies need to systematize information flow regarding sales promotion activities
particularly at dealer and retailer level. Ensuring proper information flow and devising
checks and measures to reduce misappropriations and implementation flows should be
considered critical aspects for the success of sales promotion activities by the companies. As
retailing is fragmented, direct reach by companies is next to impossible. Through dealers and
proper feedback mechanism, companies keep in touch with the market.

From the study it was found that smaller retailers felt neglected and not enthused to
implement the schemes, particularly when additional handling, stocking, accounting was
required on the part of a retailer without compensatory margins. It can be seen that the
retailer and consumer perceptions matched with respect to preferences of schemes,
underlying motivations and role of mass media. This implies that the retailer would be a rich
source of information about the consumer and the likely response to sales promotion
activities.

Developing a system to tap such responses from time to time both at retailer and consumer
level would be helpful for planning future sales promotion activities. In order to build trust
and commitment companies should tap preferences, perceptions of retailers as well as
consumers.

57
CHAPTER-VIII
LIMITATIONS

58
LIMITATIONS:

 We considered Satna region only because of limited time duration.

 Due to this, our sample size is only 100, which is not very large.

 All the respondents could not fill their questionnaire on their own due to language

problem and also problem of time and lack of positive behavior.

 Respondent may give biased answer due to some lack of information about other

brands.

59
CHAPTER-IX
CONCLUSION

60
Conclusion:

The study reflects that the use of sales promotion undeniably has increased over the years
in India. Future holds lot of promise for such schemes across wider range of product-
markets.

Sales Promotion has ceased to be major differentiator at least in the metros, with almost
all companies offering similar freebies and gifts. As a result now marketers have to find
out some innovative ways of sales promotion to differentiate from competitors. Currently
Price off and Bye one get one free offers are very effective to attract the consumers
towards the products.

We have noted that these kind of promotional tools are useful for short term increase in
sales and to induce first trial. These types of promotional schemes should be consistent
and changed from time to time depending upon season and competitor’s schemes.

With the Increasing number of supermarket, the branded packaged goods work as silent
sales person. So in such stores, sales promotion plays a more effective role in stimulating
consumers’ demands.

One of the very important facts we came to know from this project is that sale of goods
which contain large quantity and having big packaging e.g. detergent are stagnating
because consumer prefer to buy small pack goods, the reasons are: small pack goods
reduce risk of bad quality, It had low cost or say price, and last but important factor i.e.
mentality to purchase just to try first. Sales of small pack goods are quite high, but from
the company’s point of view small pack goods is less profitable compare to large pack
goods.

61
So here marketer tries to increase sales of large pack goods by using sales promotion
tactics like price off and percentage extra.

CHAPTER-X
REFERENCES

62
REFERENCES

BOOKS

1. Philip Kotler, “Marketing Management”, 11th edition, Pearson education Asia

Publication.

2. C.R.Kothari, “Research Methodology methods & techniques”, New Age

International (P) Ltd. publishers, 2nd edition.

WEBSITES

 http://www.nirma.co.in_files

 http://www.hul.co.in_files

 http://www.pg-india_files

 http://www.godrej_files

63
CHAPTER-XI
ANNEXURE

64
Questionnaire

RESEARCH SURVEY QUESTIONNAIRE ON SALES & PROMOTION OF GHARI


DETERGENT

I am a student of A.P.S University, Rewa pursuing B.B.A. with Marketing Specialization.


I am currently doing a survey regarding “A Study of Sales and Promotion with
reference to Ghari Detergent”. Please spend your precious time by filling up this
questionnaire. Your feedback will be kept confidential. Your answers are valuable to my
research. Thank you for your kind cooperation.

Consumers

Q.1 Which brand of detergent powder do you use?

(a) Ghari (b) Wheel (c) Surf (d) Ariel (e) Others

Q.2 Do you always buy the same brand of detergent?

(a) Yes (b) No

Q3. Which factors do you normally consider while purchasing a particular brand of

Detergents?

(a) Fragrance (b) Quality (c) Company image (d) Price

(e)Packaging (f) Others

Q4. Do you consider promotional schemes while purchasing a particular brand of

Detergent?

(a) Yes (b) No

Q5. Which of the following promotional schemes you have come across so far?

65
(a) Coupons (b) price off (c) Freebies (d) scratch cards

(e) Lucky draw (f) Bundling (g) extra qty.

Q6. Which medium do you feel is suitable to promote the various promotional schemes?

(a) Radio (b) TV (c) Newspaper (d) Hoardings

(e) Others

Retailers

Q.1 Since how long are you in the business?

(a) 1-5 Years (b) 5-10 Years (c) More than 10 years

Q.2 Name the Detergent (Company) you stock for.

(a) Ghari (b) HUL (c) P&G (d) Godrej (e) Others

Q3. Rank the following factors that customers look for in the purchase of Detergent.

(Rank from 1 to 6)

(a) Fragrance (b) Quality (c) Company image (d) Price

(e)Packaging (f) Others

Q4. Do you suggest customers to purchase a certain brand?

(a) Yes (b) No

Q5. If Yes why?

(a) High margin (b) Quality (c) Relationship (d) No reason

Q6. Which Trade Promotions do various companies offer?

(a) Extra Margin (b) Extra units (c) Credit facility (d) Gifts

(e) promo exp.

Q.7 Give reasons for not stocking a particular brand.

66
Q.8 Any Suggestions.

THANK YOU!

67