MBA PROJECT FREE: ROLE OF SALES PROMOTION IN FMCG SECTOR

Executive Summary


As a part of our study curriculum it is necessary to conduct a grand project. It provides us an opportunity to understand the particular topic in depth and which leads to through to that topic. My topic for the grand project is titled as “Study of consumer oriented sales promotion in FMCG sector” in which emphasis given to the effect of sales promotion on buying habits of consumers.


To start with we will give brief information regarding FMCG sector then moving to the main topic we will explain what is topic is all about. Promotion is one of the pillars of marketing mix and same way sales promotion is also one of the elements of promotion.

                  

With respect to consumer oriented sales promotion there are certain theories narrated as operant conditioning and projective theory. Based on secondary source certain theoretical aspects are also included as a part of study.


Then after concentration is given to the primary research. It includes the analysis and results of survey which was focuses on consumer’s behavior towards sales promotion campaign. The survey was conducted with the help of structured questionnaire.

At last conclusion of report, findings and suggestions was given based on study of secondary source as well as primary research.



Introduction

FMCG Concept and Definition:

The term FMCG (fast moving consumer goods), although popular and frequently used does not have a standard definition and is generally used in India to refer to products of everyday use. Conceptually, however, the term refers to relatively fast moving items that are used directly by the consumer. Thus, a significant gap exists between the general use and the conceptual meaning of the term FMCG.

Further, difficulties crop up when attempts to devise a definition for FMCG. The problem arises because the concept has a retail orientation and distinguishes between consumer products on the basis of how quickly they move at the retailer’s shelves. The moot question therefore, is what industry turnaround threshold should be for the item to qualify as an FMCG. Should the turnaround happen daily, weekly, or monthly?

One of the factors on which the turnaround depends is the purchase cycle. However, the purchase cycle for the same product tend to vary across population segments. Many low-income households are forced to buy certain products more frequently because of lack of liquidity and storage space while relatively high-income households buy the same products more infrequently. Similarly, the purchase cycle also tends to vary because of cultural factors. Most Indians, typically, prefer fresh food articles and therefore to buy relatively small quantities more frequently. This is in sharp contrast with what happens in most western countries, where the practice of buying and socking foods for relatively longer period is more prevalent. Thus, should the inventory turnaround threshold be universal, or should it allow for income, cultural and behavioral nuances?


Characteristics of FMCG Products:

· 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.

· 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.

· These products cater to necessities, comforts as well as luxuries. They meet the demands of the entire cross section of population. Price and income elasticity of demand varies across products and consumers.

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