The document provides an overview of a project report on the role of sales promotion in the fast moving consumer goods (FMCG) sector. It was submitted by Omprakash Yadav to their professor Yogendra Singh in partial fulfillment of an MBA degree. The report includes an acknowledgments section, executive summary, and outlines topics that will be covered such as sales promotion strategies, research methodology, data analysis, findings, and conclusions.

1. A
PROJECT REPORT
ON
“ROLE OF SALES PROMOTION ON FMCG”
(Submitted in partial fulfillment for the Award of Degree of Master of
Business Administration)
(2009-2011)
Submitted By: Submitted To:
Omprakash Yadav Mr. Yogendra Singh
MBA 4th Semester (Assist. Prof.)
SCHOOL OF MANAGEMENT
SOBHASAIRA GROUP OF INSTITUTIONS
GOKULPURA, NH-11, SIKAR (RAJ)

2. PREFACE
In this age of globalization hyper competition has become a regular feature. Today the
markets are no less then battlegrounds and one has to strive very hard for survival and
growth.
Due to very rapid industrialization all over the world the demand for the managerial
personnel and the administrative personnel has increased. The perfect study of
Management involves both the theoretical as well as practical aspects. To survive in this
highly competitive market ―Practical Knowledge‖ is as relevant as the Theoretical.
The significance of MBA Degree is that the Theoretical aspects, which a student learns
throughout the year in the class sessions, can be practically applied through different
projects, which one undertakes. Keeping in tune with this doctrine, we have tried to
apply theoretical aspects through out the project, which we learned under the course of
management.
In this project more emphasize given to the various tools of sales promotion and its
impact on consumers buying decisions. Actually in recent trend to some extent this
technique also become victim of clutter, even though it can be eliminated by generating
innovative and more attractive tools to lure the customers.
Now a day most of the FMCG companies considering sales promotion as an important
part of their marketing strategy. From the analysis of survey it becomes clear that
consumers do response to the sales promotion campaign, but there are customers who
strongly prefer to stick to brand name.
Omprakash Yadav
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3. ACKNOWLEDGEMENT
Every study requires a guidance of someone who is working in that field. Firstly we
would like to thank Dean Sir Prof. Praveen Kumar for providing an opportunity of
preparing a Project Report and allowing us to use the resources of the institution during
this project.
I am extremely thankful to my Project Guide, Mr. Yogendra Singh, faculty of
Sobhasaria Group of Institution his precious guidance regarding the preparation of the
Project Report. His guidance has proved to be useful and without him, the preparation
of this report might not have been possible.
I am also thankful to the other faculty members of Sobhasaria Group of institution for
extending their valuable support for this project.
I also extend my sincere thanks to the Respondents, who helped me during the course
of my project and for their gracious attitude.
I would like to take this opportunity to extend my warm thoughts to those who helped
me in making this project a wonderful experience.
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4. 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.
After then 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.
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5. INDEX
S.No. TOPICS Page
No.
1. Industrial Profile
2. Introduction
3. Introduction to the topic
4. Sales promotion strategies
5. SWOT Analysis
6. Research Methodology of the study
7. Data Analysis of the survey
8. Findings of the report
9. Recommendations
10. Limitations
11. Emerging Trends
12. Conclusion
13. Bibliography
14. Annexure: Questionnaire
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6. -5-

7. Industrial Profile
FMCG are products that have a quick shelf turnover, at relatively low cost and don't
require a lot of thought, time and financial investment to purchase. The margin of profit
on every individual FMCG product is less. However the huge number of goods sold is
what makes the difference. Hence profit in FMCG goods always translates to number of
goods sold.
Fast Moving Consumer Goods is a classification that refers to a wide range of
frequently purchased consumer products including: toiletries, soaps, cosmetics, teeth
cleaning products, shaving products, detergents, and other non-durables such as
glassware, bulbs, batteries, paper products and plastic goods, such as buckets.
‗Fast Moving‘ is in opposition to consumer durables such as kitchen appliances that are
generally replaced less than once a year. The category may include pharmaceuticals,
consumer electronics and packaged food products and drinks, although these are often
categorized separately.
The term Consumer Packaged Goods (CPG) is used interchangeably with Fast Moving
Consumer Goods (FMCG).
Three of the largest and best known examples of Fast Moving Consumer Goods
companies are Nestlé, Unilever and Procter & Gamble. Examples of FMCGs are soft
drinks, tissue paper, and chocolate bars. Examples of FMCG brands are Coca-Cola,
Kleenex, Pepsi and Believe.
The FMCG sector represents consumer goods required for daily or frequent use. The
main segments of this sector are personal care (oral care, hair care, soaps, cosmetics,
toiletries), household care (fabric wash and household cleaners), branded and
packaged food, beverages (health beverages, soft drinks, staples, cereals, dairy
products, chocolates, bakery products) and tobacco.
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8. The Indian FMCG sector is an important contributor to the country's GDP. It is the fourth
largest sector in the economy and is responsible for 5% of the total factory employment
in India. The industry also creates employment for 3 m people in downstream activities,
much of which is disbursed in small towns and rural India. This industry has witnessed
strong growth in the past decade. This has been due to liberalization, urbanization,
increase in the disposable incomes and altered lifestyle. Furthermore, the boom has
also been fuelled by the reduction in excise duties, de-reservation from the small-scale
sector and the concerted efforts of personal care companies to attract the burgeoning
affluent segment in the middle-class through product and packaging innovations.
Unlike the perception that the FMCG sector is a producer of luxury items targeted at the
elite, in reality, the sector meets the every day needs of the masses. The lower-middle
income group accounts for over 60% of the sector's sales. Rural markets account for 56%
of the total domestic FMCG demand.
Many of the global FMCG majors have been present in the country for many decades.
But in the last ten years, many of the smaller rung Indian FMCG companies have
gained in scale. As a result, the unorganized and regional players have witnessed
erosion in market share.
History of FMCG in India
In India, companies like ITC, HLL, Colgate, Cadbury and Nestle have been a dominant
force in the FMCG sector well supported by relatively less competition and high entry
barriers (import duty was high). These companies were, therefore, able to charge a
premium for their products. In this context, the margins were also on the higher side.
With the gradual opening up of the economy over the last decade, FMCG companies
have been forced to fight for a market share. In the process, margins have been
compromised, more so in the last six years (FMCG sector witnessed decline in demand).
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9. Current Scenario
The growth potential for FMCG companies looks promising over the long-term horizon,
as the per-capita consumption of almost all products in the country is amongst the
lowest in the world. As per the Consumer Survey by KSA-Technopak, of the total
consumption expenditure, almost 40% and 8% was accounted by groceries and
personal care products respectively. Rapid urbanization, increased literacy and rising
per capita income are the key growth drivers for the sector. Around 45% of the
population in India is below 20 years of age and the proportion of the young population
is expected to increase in the next five years. Aspiration levels in this age group have
been fuelled by greater media exposure, unleashing a latent demand with more money
and a new mindset. In this backdrop, industry estimates suggest that the industry could
triple in value by 2015 (by some estimates, the industry could double in size by 2010).
In our view, testing times for the FMCG sector are over and driving rural penetration will
be the key going forward. Due to infrastructure constraints (this influences the cost-
effectiveness of the supply chain), companies were unable to grow faster. Although
companies like HLL and ITC have dedicated initiatives targeted at the rural market,
these are still at a relatively nascent stage.
The bottlenecks of the conventional distribution system are likely to be removed once
organized retailing gains in scale. Currently, organized retailing accounts for just 3% of
total retail sales and is likely to touch 10% over the next 3-5 years. In our view,
organized retailing results in discounted prices, forced-buying by offering many choices
and also opens up new avenues for growth for the FMCG sector. Given the aggressive
expansion plans of players like Pantaloon, Trent, Shopper‘s Stop and Shoprite, we are
confident that the FMCG sector has a bright future.
India offers a large and growing market of 1 billion people of which 300 million are
middle class consumers. India offers a vibrant market of youth and vigor with 54% of
population below the age of 25 years. These young people work harder, earn more,
spend more and demand more from the market, making India a dynamic and aspiration
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10. society. Domestic demand is expected to double over the ten-year period from 1998 to
2007. The number of households with "high income" is expected to increase by 60% in
the next four years to 44 million households.
India is rated as the fifth most attractive emerging retail market. It has been ranked
second in a Global Retail Development Index of 30 developing countries drawn up by A
T Kearney. A.T. Kearney has estimated India's total retail market at $202.6 billion, is
expected to grow at a compounded 30 per cent over the next five years. The share of
modern retail is likely to grow from its current 2 per cent to 15-20 percent over the next
decade, analysts feel.
The Indian FMCG sector is the fourth largest sector in the economy with a total market
size in excess of US$ 13.1 billion. The FMCG market is set to treble from US$ 11.6
billion in 2003 to US$ 33.4 billion in 2015. Penetration level as well as per capita
consumption in most product categories like jams, toothpaste, skin care, hair wash etc
in India is low indicating the untapped market potential. Burgeoning Indian population,
particularly the middle class and the rural segments, presents an opportunity to makers
of branded products to convert consumers to branded products.
India is one of the world‘s largest producers for a number of FMCG products but its
FMCG exports are languishing at around Rs 1,000 crore only. There is significant
potential for increasing exports but there are certain factors inhibiting this. Small-scale
sector reservations limit ability to invest in technology and quality up gradation to
achieve economies of scale. Moreover, lower volume of higher value added products
reduce scope for export to developing countries.
The FMCG sector has traditionally grown at a very fast rate and has generally out
performed the rest of the industry. Over the last one year, however the rate of growth
has slowed down and the sector has recorded sales growth of just five per cent in the
last four quarters.
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11. The outlook in the short term does not appear to be very positive for the sector. Rural
demand is on the decline and the Centre for Monitoring Indian Economy (CMIE) has
already down scaled its projection for agriculture growth in the current fiscal. Poor
monsoon in some states, too, is unlikely to help matters. Moreover, the general
slowdown in the economy is also likely to have an adverse impact on disposable
income and purchasing power as a whole. The growth of imports constitutes another
problem area and while so far imports in this sector have been confined to the premium
segment, FMCG companies estimate they have already cornered a four to six per cent
market share. The high burden of local taxes is another reason attributed for the
slowdown in the industry
At the same time, the long term outlook for revenue growth is positive. Give the large
market and the requirement for continuous repurchase of these products, FMCG
companies should continue to do well in the long run. Moreover, most of the companies
are concentrating on cost reduction and supply chain management. This should yield
positive results for them.
The profile of major leading FMCG Market Players is as follows:
1. NESTLE INDIA
Nestlé India is a subsidiary of Nestlé S.A. of Switzerland. With six factories and a large
number of co-packers, Nestlé India is a vibrant Company that provides consumers in
India with products of global standards and is committed to long-term sustainable
growth and shareholder satisfaction.
The Company insists on honesty, integrity and fairness in all aspects of its business and
expects the same in its relationships. This has earned it the trust and respect of every
strata of society that it comes in contact with and is acknowledged amongst India's
'Most Respected Companies' and amongst the 'Top Wealth Creators of India'.
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12. Nestlé‘s relationship with India dates back to 1912, when it began trading as The Nestlé
Anglo-Swiss Condensed Milk Company (Export) Limited, importing and selling finished
products in the Indian market.
Brief History
After India‘s independence in 1947, the economic policies of the Indian Government
emphasized the need for local production. Nestlé responded to India‘s aspirations by
forming a company in India and set up its first factory in 1961 at Moga, Punjab, where
the Government wanted Nestlé to develop the milk economy. Progress in Moga
required the introduction of Nestlé‘s Agricultural Services to educate advice and help
the farmer in a variety of aspects. From increasing the milk yield of their cows through
improved dairy farming methods, to irrigation, scientific crop management practices and
helping with the procurement of bank loans. Nestlé set up milk collection centre that
would not only ensure prompt collection and pay fair prices, but also instill amongst the
community, a confidence in the dairy business. Progress involved the creation of
prosperity on an on-going and sustainable basis that has resulted in not just the
transformation of Moga into a prosperous and vibrant milk district today, but a thriving
hub of industrial activity, as well. For more on Nestlé Agricultural Services,
Nestlé has been a partner in India's growth for over nine decades now and has built a
very special relationship of trust and commitment with the people of India. The
Company's activities in India have facilitated direct and indirect employment and
provides livelihood to about one million people including farmers, suppliers of packaging
materials, services and other goods.
The Company continuously focuses its efforts to better understand the changing
lifestyles of India and anticipate consumer needs in order to provide Taste, Nutrition,
Health and Wellness through its product offerings. The culture of innovation and
renovation within the Company and access to the Nestlé Group's proprietary
technology/Brands expertise and the extensive centralized Research and Development
facilities gives it a distinct advantage in these efforts. It helps the Company to create
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13. value that can be sustained over the long term by offering consumers a wide variety of
high quality, safe food products at affordable prices.
Nestlé India is a responsible organization and facilitates initiatives that help to improve
the quality of life in the communities where it operates. Beginning with its first
investment in Moga in 1961, Nestlé‘s regular and substantial investments established
that it was here to stay. In 1967, Nestlé set up its next factory at Choladi (Tamil Nadu)
as a pilot plant to process the tea grown in the area into soluble tea. The Nanjangud
factory (Karnataka), became operational in 1989, the Samalkha factory (Haryana), in
1993 and in 1995 and 1997, Nestlé commissioned two factories in Goa at Ponda and
Bicholim respectively. Nestlé India is now putting up the 7th factory at Pant Nagar in
Uttaranchal
Products
Brands
Product Category
NESTLÉ EVERYDAY Dairy Whitener
NESTLÉ EVERYDAY Ghee
NESTLÉ Curds
NESTLÉ CEREMEAL
Milk Products NESTLÉ Jeera Raita
NESTLÉ Fresh 'n' Natural Dahi
NESTLÉ Fruit 'N Dahi
NESTLÉ Milk
NESTLÉ Slim Milk
NESCAFÉ CLASSIC
NESCAFÉ SUNRISE
Beverages NESTLÉ MILO
NESCAFÉ 3 in 1
NESCAFÉ Koolerz
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14. Prepared Dishes MAGGI 2-MINUTE Noodles
MAGGI Healthy Soups
MAGGI Dal Atta Noodles
MAGGI MAGIC Cubes
Chocolates &
NESTLÉ Milk Chocolate
Confectionaries
NESTLÉ KIT KAT
NESTLÉ MUNCH
NESTLÉ MILKYBAR
NESTLÉ MILKYBAR CHOO
NESTLÉ BAR-ONE
POLO
NESTLÉ Eclairs
NESTLÉ ACTI-V
POLO Powermint
Hindustan Lever Limited (HLL)
The Global arm of Hindustan Levers Limited is Unilever's and its mission is to add
Vitality to life. Their products meet everyday needs for nutrition, hygiene, and personal
care with brands that help people feel good, look good and get more out of life.
HLL has deep roots in local cultures and markets around the world which gives them a
strong relationship with their consumers, which are the foundation for their future
growth. They benefit from there wealth of knowledge and international expertise to the
service the local consumers - a truly multi-local multinational.
Brief History
In the summer of 1888, visitors to the Kolkata harbour noticed crates full of Sunlight
soap bars, embossed with the words "Made in England by Lever Brothers". With it,
began an era of marketing branded Fast Moving Consumer Goods (FMCG). In 1931,
Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing Company,
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15. followed by Lever Brothers India Limited (1933) and United Traders Limited (1935).
These three companies merged to form HLL in November 1956; HLL offered 10% of its
equity to the Indian public, being the first among the foreign subsidiaries to do so.
Unilever now holds 51.55% equity in the company. The rest of the shareholding is
distributed among about 380,000 individual shareholders and financial institutions.
Pond's (India) Limited had been present in India since 1947. It joined the Unilever fold
through an international acquisition of Chesebrough Pond's USA in 1986.
The liberalization of the Indian economy, started in 1991, clearly marked an inflexion in
HLL's and the Group's growth curve. Removal of the regulatory framework allowed the
company to explore every single product and opportunity segment, without any
constraints on production capacity.
Simultaneously, deregulation permitted alliances, acquisitions and mergers. In one of
the most visible and talked about events of India's corporate history, the erstwhile Tata
Oil Mills Company (TOMCO) merged with HLL, effective from April 1, 1993. In 1995,
HLL and yet another Tata company, Lakme Limited, formed a 50:50 joint venture,
Lakme Lever Limited, to market Lakme's market-leading cosmetics and other
appropriate products of both the companies. Subsequently in 1998, Lakme Limited sold
its brands to HLL and divested its 50% stake in the joint venture to the company.
HLL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in 1994,
which markets Huggies Diapers and Kotex Sanitary Pads. HLL has also set up a
subsidiary in Nepal, Nepal Lever Limited (NLL), and its factory represents the largest
manufacturing investment in the Himalayan kingdom. The NLL factory manufactures
HLL's products like Soaps, Detergents and Personal Products both for the domestic
market and exports to India.
The 1990s also witnessed a string of crucial mergers, acquisitions and alliances on the
Foods and Beverages front. In 1992, the erstwhile Brooke Bond acquired Kothari
General Foods, with significant interests in Instant Coffee. In 1993, it acquired the
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16. Kissan business from the UB Group and the Dollops Icecream business from Cadbury
India.
As a measure of backward integration, Tea Estates and Doom Dooma, two plantation
companies of Unilever, were merged with Brooke Bond. Then in July 1993, Brooke
Bond India and Lipton India merged to form Brooke Bond Lipton India Limited (BBLIL),
enabling greater focus and ensuring synergy in the traditional Beverages business.
1994 witnessed BBLIL launching the Wall's range of Frozen Desserts. By the end of the
year, the company entered into a strategic alliance with the Kwality Icecream Group
families and in 1995 the Milkfood 100% Icecream marketing and distribution rights too
were acquired.
In January 2000, in a historic step, the government decided to award 74 per cent equity
in Modern Foods to HLL, thereby beginning the divestment of government equity in
public sector undertakings (PSU) to private sector partners. HLL's entry into Bread is a
strategic extension of the company's wheat business. In 2002, HLL acquired the
government's remaining stake in Modern Foods.
In 2003, HLL acquired the Cooked Shrimp and Pasteurised Crabmeat business of the
Amalgam Group of Companies, a leader in value added Marine Products exports.
Present Stature
Hindustan Lever Limited (HLL) is India's largest Fast Moving Consumer Goods
company, touching the lives of two out of three Indians with over 20 distinct categories
in Home & Personal Care Products and Foods & Beverages. They endow the company
with a scale of combined volumes of about 4 million tonnes and sales of Rs.10,000
crores.
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17. HLL is also one of the country's largest exporters; it has been recognised as a Golden
Super Star Trading House by the Government of India.
HLL's brands - like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond's, Sunsilk,
Clinic, Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, Knorr-Annapurna, Kwality
Wall's – are household names across the country and span many categories - soaps,
detergents, personal products, tea, coffee, branded staples, ice cream and culinary
products. They are manufactured in close to 80 factories. The operations involve over
2,000 suppliers and associates. HLL's distribution network, comprising about 7,000
redistribution stockists, directly covers the entire urban population, and about 250
million rural consumers.
HLL believes that an organization‘s worth is also in the service it renders to the
community. HLL is focusing on health & hygiene education, women empowerment, and
water management. It is also involved in education and rehabilitation of special or
underprivileged children, care for the destitute and HIV-positive, and rural development.
HLL has also responded in case of national calamities / adversities and contributes
through various welfare measures, most recent being the village built by HLL in
earthquake affected Gujarat, and relief & rehabilitation after the Tsunami caused
devastation in South India.
Products
Brands
Product Category Product Name
Lux
Pears
Lifebuoy
Personal Care Soap Liril
Hamam
Breeze
Dove
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18. Rexona
Pond‘s
Skin Care
Fair & Lovely
Sunsilk
Hair Care: Naturals
Clinic
Pepsodent
Oral Care
CloseUp
Axe
Deodorant
Rexona
Color Cosmetics Lakme
Ayurvedic Healthcare Aysh
Fabric Care Laundry Surf Excel
Rin
Wheel
Tea Brooke Bond
Beverages Lipton
Coffee Bru
Salt Knnor Annapurna
Foods Sauces Kissan
Ice Creams Kwality Walls
GLAXO SMITHKLINE
GlaxoSmithKline is a leader in the worldwide consumer healthcare market. With nearly
$5 billion in sales, over ten $100 million brands and present in 130 markets, the
consumer healthcare business brings an added dynamic dimension to GSK.
Operating in the fiercely competitive environment of retail and consumer marketing
GlaxoSmithKline Consumer Healthcare brings oral healthcare, over-the-counter
medicines and nutritional healthcare products to millions of people.
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19. Brand names such as Panadol the analgesic, Aquafresh toothpaste, Lucozade the
nutritional and Nicorette/ Niquitin smoking cessation products are household names
around the world. In one year GSK Consumer Healthcare produces - among many
others - nine billion tablets to relieve stomach upsets, six billion tablets for pain relief
tablets and 600 million tubes of toothpaste.
But the driving force behind GlaxoSmithKline's consumer healthcare business is
science. With four dedicated consumer healthcare R&D centres and consumer
healthcare regulatory affairs, the business takes scientific innovation as seriously as
marketing excellence and offers leading-edge capability in both.
The Company
The company has a challenging and inspiring mission: to improve the quality of human
life by enabling people to do more, feel better and live longer. This mission gives them
the purpose to develop innovative medicines and products that help millions of people
around the world. In fact, they are the only pharmaceutical company to tackle the World
Health Organization‘s three ‗priority‘ diseases – HIV/AIDS, tuberculosis and malaria.
Headquartered in the UK and with operations based in the US, it is one of the industry
leaders, with an estimated 7% of the world's pharmaceutical market.
As a company has a emphasized more on research & development, estimated every
hour they spend more than £300,000 (US$562,000) to find new medicines. The
medicines produced are mainly in six major disease areas – asthma, virus control,
infections, mental health, diabetes and digestive conditions. In addition, it is a leader in
the important area of vaccines and are developing new treatments for cancer.
GSK at a glance
Mission is to improve the quality of human life by enabling people to do more, feel
better and live longer
Research-based pharmaceutical company
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20. It is the only pharmaceutical company to tackle the three "priority" diseases identified
by the World Health Organization: HIV/AIDS, tuberculosis and malaria
Its business employs over 100,000 people in 116 countries
They make approximately four billion packs of medicines and healthcare products
every year
Over 15,000 people work in the research teams to discover new medicines
We supply one quarter of the world's vaccines and by the end of 2005 we had 25
vaccines in clinical development
In 2005 we donated 136 million albendazole tablets to help elimitate lymphatic
filariasis (elephantiasis)
In 2005 we shipped 126 million tablets of preferentially-priced Combivir and Epivir
(our HIV treatments) to developing countries
Almost 100 countries benefitted from our humanitarian product donations in 2005
We sold 23 million bottle of Lucozade Sport Hydro Active in 2005
History
1976
 The H2 blocker Tagamet (cimetidine) is introduced in the UK by the SmithKline
Corporation, and in the US in the following year.
 The treatment will revolutionise peptic ulcer therapy.
1978
 Through the acquisition of Meyer Laboratories Inc, Glaxo‘s business in the US is
started, to become Glaxo Inc from 1980.
 The broad-spectrum injectable antibiotic Zinacef (cefuroxime) is introduced by
Glaxo.
1981
 The anti-ulcer treatment Zantac (ranitidine) is launched by Glaxo and is to
become the world‘s top-selling medicine by 1986. Augmentin (amoxicillin /
- 19 -

21. clavulanate potassium), to combat a wide range of bacterial infections in children
and adults, is launched by Beecham.
 The antiviral Zovirax (aciclovir) is launched by Wellcome for herpes infections
1982
 SmithKline acquires Allergan, an eye and skincare business, and merges with
Beckman Instruments Inc, a company specialising in diagnostics and
measurement instruments and supplies.
 The company is renamed SmithKline Beckman. John Vane of the Wellcome
Research Laboratories is awarded the Nobel Prize, with two other scientists, "for
their discoveries concerning prostaglandins and related biologically active
substances."
1983
 Glaxo Inc moves to new facilities in Research Triangle Park and Zebulon, North
Carolina. The broad-spectrum injectable antibiotic Fortum (ceftazidime) is
launched.
 Wellcome launches Flolan (epoprostenol) for use in renal dialysis.
1986
 Beecham acquires the US firm Norcliff Thayer, adding Tums antacid tablets and
Oxy skin care to its portfolio.
1987
 The AIDS treatment Retrovir (zidovudine) is launched by Wellcome. Glaxo
introduces the oral antibiotic Zinnat (cefuroxime axetil).
1988
 SmithKline BioScience Laboratories acquires one of its largest competitors,
International Clinical Laboratories, Inc, increasing the company's size by half and
establishing SmithKline BioScience Laboratories as the industry leader.
- 20 -

22.  The Nobel Prize for medicine is awarded to George Hitchings and Gertrude Elion,
of Burroughs Wellcome Inc, and to Sir James Black, who had worked at the
Wellcome Foundation and Smith Kline and French Laboratories, "for their
discoveries of important principles for drug treatment."
1989
 SmithKline Beckman and The Beecham Group plc merge to form SmithKline
Beecham plc. Engerix-B hepatitis B vaccine (recombinant), a genetically
engineered hepatitis B vaccine, is launched in the US and France.
1990
 The synthetic lung surfactant Exosurf and the anti-epileptic drug Lamictal
(lamotrigine) are launched by Wellcome.
 Glaxo introduces long-acting Serevent (salmeterol) for asthma, the inhaled
corticosteroid Flixotide (fluticasone propionate) and Zofran (ondansetron) anti-
emetic for cancer patients.
1991
 Glaxo launches its novel treatment for migraine, Imigran (sumatriptan), Lacipil
(lacidipine) for high blood pressure, and Cutivate (fluticasone propionate) in the
US for skin diseases.
 SmithKline Beecham moves its global headquarters to New Horizons Court at
Brentford, England. SmithKline Beecham‘s Seroxat/Paxil (paroxetine
hydrochloride) is launched in the UK, its first market.
1992
 Mepron (atovaquone) for AIDS-related pneumonia is introduced by Burroughs
Wellcome in the US.
 SmithKline Beecham‘s Havrix hepatitis A vaccine, inactivated, the world‘s first
hepatitis A vaccine, is launched in six European markets.
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23. 1993
 SmithKline Beecham and Human Genome Science negotiate a multi-million-
dollar research collaboration agreement for identifying and describing the
functions of the genes in the human body.
 Glaxo introduces Flixotide (fluticasone propionate) for bronchial conditions.
1994
 SmithKline Beecham purchases Diversified Pharmaceutical Services, Inc, a
pharmaceutical benefits manager.
 Sterling Health also is acquired, making SmithKline Beecham the third-largest
over-the-counter medicines company in the world and number one in Europe and
the international markets.
 With the intention of focusing on human healthcare, SmithKline Beecham sells its
animal health business.
1995
 Glaxo and Wellcome merge to form Glaxo Wellcome.
 Glaxo Wellcome acquires California-based Affymax, a leader in the field of
combinatorial chemistry.
 Glaxo Wellcome‘s Medicines Research Centre opened at Stevenage in England.
 Valtrex (valaciclovir) is launched by Glaxo Wellcome as an anti-herpes successor
to Zovirax (acyclovir).
 SmithKline Beecham acquires Sterling Winthrop's site in Upper Providence,
Pennsylvania, to fulfil US R&D expansion needs.
1996
 Community Partnership is established by SmithKline Beecham to focus
philanthropy on community-based healthcare.
 SmithKline Beecham Healthcare Services is formed by combining the clinical
laboratories, disease management and Diversified Pharmaceutical Services
businesses.
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24. 1997
 SmithKline Beecham‘s research centre, New Frontiers Science Park, opens at
Harlow in England.
 SmithKline Beecham and Incyte Pharmaceuticals create a joint venture -
diaDexus - to discover and market novel molecular diagnostics based on the use
of genomics.
1998
 SmithKline Beecham and the World Health Organization announce a
collaboration to eliminate lymphatic filariasis (elephantiasis) by the year 2020.
 The largest pharmaceutical company in Poland is created with the acquisition of
Polfa Poznan by Glaxo Wellcome.
1999
 The 30th anniversary of the launch of Ventolin (albuterol) is marked as
respiratory becomes Glaxo Wellcome‘s largest therapeutic area.
 Sharpening its focus on pharmaceuticals and consumer healthcare, SmithKline
Beecham divests SmithKline Beecham Clinical Laboratories and Diversified
Pharmaceutical Services.
GSK Products
Product name: Aquafresh
Major Markets
North and South America
Europe
East and South Africa
Middle East
Asia
Australia and New Zealand
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25. Aquafresh is one of the world's largest and fastest growing toothpaste and toothbrush
brands. The unique red, white and blue stripes of the toothpaste make the product not
only visually attractive, but also underline the triple benefits of strong teeth, healthy
gums and fresh breath – whole mouth protection. The Aquafresh range of manual and
electric toothbrushes not only clean teeth effectively, they are also gentle on gums
because of their flexible necks. Their flexible heads and brush tips have been designed
for cleaning even the hardest-to-reach parts of the mouth. The Aquafresh range also
includes whitening, sensitive, tartar control and children's toothpaste, children's
toothbrushes, dental lozenges and dental gum.
Product name: ENO
Major Markets
India
Brazil
South Africa and Thailand
ENO is the most global of GSK's gastrointestinal brands with sales of £29 million. The
fast-acting effervescent fruit salts, used as an antacid and reliever of bloatedness, was
invented in the 1850s by James Crossley ENO
Product name: Horlicks
Major Markets
India and UK
Horlicks, 'The Great Family Nourisher,' is a nutritional drink made from wheat, milk and
malted barley and is sold in powdered form. The brand is such an enormous success in
its key market, India, that alongside the traditional family formula, there is a special
formulation for children between one and three years of age and another for breast-
feeding mothers.
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26. COLGATE PAMOLIVE INDIA LIMITED
From a modest start in 1937, when hand-carts were used to distribute Colgate
Dental Cream, Colgate-Palmolive (India) today has one of the widest distribution
networks in India – a logistical marvel that spans around 3.5 million retail outlets across
the country, of which the Company services 9.40,000 outlets directly. The Company has
grown to a Rs. 9600 million plus with an outstanding record of enhancing value for its
strong shareholder base.
Colgate's tight focus in Oral Care in India while building its Personal Care business
coupled with a simple, but sound worldwide financial strategy, has helped deliver
consistent shareholder value. Colgate consistently increases gross margin while at the
same time reducing overhead expenses. The increase in gross margin and the
reduction in overhead expenses provide the money to invest in advertising to support
the launch of new products, while at the same time increasing operating profit.
Today, Colgate is a household name in India with one out of two consumers using a
modern dentifrice. Consistently superior quality, innovation and value for money
products emerging out of advanced technology employed, has enabled Colgate to be
voted ‗The Most Trusted Brand‘ in India across all brands and categories for the third
consecutive year in the Brand Equity AC Nielson ORG-MARG 2005 survey. Colgate
has been the only brand to be ranked in the top three for all the five surveys and to hold
the premier position for three consecutive years. This is a true measure of the trust and
confidence that generations of consumers have placed in Colgate for their oral care
needs.
History
1975: - Caprice hair care launches in Mexico. Today, hair care products are sold in over
70 countries, with variants to suit every type of hair need.
1976: - Colgate-Palmolive acquires Hill's Pet Nutrition. Today Hill's is the global leader
in pet nutrition and veterinary recommendations.
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27. 1983:- Colgate Plus toothbrush is introduced. Today over 1.6 billion Colgate tooth
brushes are sold annually worldwide. If you lined them up end to end, they would circle
the globe 16 times.
1985:- Protex bar soap is introduced, and today offers all-family antibacterial protection
in over 56 countries. Colgate-Palmolive enters into a joint venture with Hong Kong-
based Hawley & Hazel, a leading oral care company, which adds strength in key Asian
markets.
1986:- The Chairman's You Can Make A Difference Program is launched, recognizing
innovation and executional excellence by Colgate people.
1987 :- Colgate acquires Softsoap liquid soap business from the Minnetonka
Corporation. Today, Colgate is the global leader in liquid hand soap.
1989:- Annual Company sales surpass the $5 billion mark.
1991:- Colgate acquires Murphy Oil Soap, the leading wood cleaner in the U.S. Today,
its product portfolio has expanded to include all-purpose cleaners, sprays and wipes.
1992:- Colgate acquires the Mennen Company. Today, Mennen products are sold in
over 52 countries.
1995:- Colgate enters Central Europe and Russia, expanding into fast-growing markets.
Colgate acquires Kolynos Oral Care business in Latin America and launches market-
leading Sorriso toothpaste.
1996:- Bright Smiles, Bright Futures oral health education program expands to reach 50
countries with in-school programs and mobile dental clinics.
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28. 1997:- Colgate Total toothpaste is introduced and quickly becomes the market leader in
the U.S. Only Colgate Total, with its 12-hour protection, fights a complete range of oral
health problems.
2004: - Colgate acquires the GABA oral care business in Europe, with its strength in the
important European pharmacy channel and its ties with the dental community.
2006:- Today, with sales surpassing $10 billion, Colgate focuses on four core
businesses: Oral Care, Personal Care, Home Care and Pet Nutrition. Colgate now sells
its products in 222 countries and territories worldwide.
Products
Oral Care:
Colgate – Toothpaste, Tooth Powder, Whitening Products
Pamolive - Shower Gel, Shower Cream, Bar Soap, Liquid Hand Wash, Shave
Preps, Skin Care
Household Care:
Axion Surface Clean
BRITANIA
The story of one of India's favorite brands reads almost like a fairy tale. Once upon a
time, in 1892 to be precise, a biscuit company was started in a nondescript house in
Calcutta (now Kolkata) with an initial investment of Rs. 295. The company we all know
as Britannia today.
The beginnings might have been humble-the dreams were anything but. By 1910, with
the advent of electricity, Britannia mechanized its operations, and in 1921, it became the
first company east of the Suez Canal to use imported gas ovens. Britannia's business
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29. was flourishing. But, more importantly, Britannia was acquiring a reputation for quality
and value. As a result, during the tragic World War II, the Government reposed its trust
in Britannia by contracting it to supply large quantities of "service biscuits" to the armed
forces.
As time moved on, the biscuit market continued to grow and Britannia grew along with it.
In 1975, the Britannia Biscuit Company took over the distribution of biscuits from Parry's
who till now distributed Britannia biscuits in India. In the subsequent public issue of
1978, Indian shareholding crossed 60%, firmly establishing the Indianness of the firm.
The following year, Britannia Biscuit Company was re-christened Britannia Industries
Limited (BIL). Four years later in 1983, it crossed the Rs. 100 crores revenue mark.
On the operations front, the company was making equally dynamic strides. In 1992, it
celebrated its Platinum Jubilee. The Wadia Group acquired a stake in the company and
became an equal partner with Groupe Danone in Britannia. The subsequent year saw
sales cross landmark 100,000 tones of biscuits or 1 billion packs of 100g.
Britannia strode into the 21st Century as one of India's biggest brands and the pre-
eminent food brand of the country. It was equally recognized for its innovative approach
to products and marketing: the Lagaan Match was voted India's most successful
promotional activity of the year 2001 while the delicious Britannia 50-50 Maska-Chaska
became India's most successful product launch. In 2002, Britannia's New Business
Division formed a joint venture with Fonterra, the world's second largest Dairy Company,
and Britannia New Zealand Foods Pvt. Ltd. was born. In recognition of its vision and
accelerating graph, Forbes Global rated Britannia 'One amongst the Top 200 Small
Companies of the World', and The Economic Times pegged Britannia India's 2nd Most
Trusted Brand.
Today, more than a century after those tentative first steps, Britannia's fairy tale is not
only going strong but blazing new standards, and that miniscule initial investment has
grown by leaps and bounds to crores of rupees in wealth for Britannia's shareholders.
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30. The company's offerings are spread across the spectrum with products ranging from the
healthy and economical Tiger biscuits to the more lifestyle-oriented Milkman Cheese.
Having succeeded in garnering the trust of almost one-third of India's one billion
populations and a strong management at the helm means Britannia will continue to
dream big on its path of innovation and quality. And millions of consumers will savour
the results, happily ever after.
1975:- Britannia Biscuit Company takes over biscuit distribution from Parry's
1979: - Re-christened Britannia Industries Ltd. (BIL).
1989:- The Executive Office relocated to Bangalore
1992:- BIL celebrates its Platinum Jubilee
1993:- Wadia Group acquires stake in ABIL, UK and becomes an equal partner with
Groupe Danone in BIL
1997:- Re-birth - new corporate identity 'Eat Healthy, Think Better' leads to new mission:
'Make every third Indian a Britannia consumer'
1999:- "Britannia Khao World Cup Jao" - a major success! Profit up by 37%
2000:- Forbes Global Ranking - Britannia among Top 300 small companies
2001:- BIL ranked one of India's biggest brands
No.1 food brand of the country
Britannia Lagaan Match: India's most successful promotional activity of the year
Maska Chaska: India's most successful FMCG launch
- 29 -

31. 2002:- BIL launches joint venture with Fonterra, the world's second largest dairy
company
Britannia New Zealand Foods Pvt. Ltd. is born
Rated as 'One amongst the Top 200 Small Companies of the World' by Forbes Global
Economic Times ranks BIL India's 2nd Most Trusted Brand
Pure Magic -Winner of the Worldstar, Asiastar and Indiastar award for packaging
2003:- 'Treat Duet'- most successful launch of the year
Britannia Khao World Cup Jao rocks the consumer lives yet again
2005:- Re-birth of Tiger - 'Swasth Khao, Tiger Ban Jao' becomes the popular chant!
Britannia launched 'Greetings' range of premium assorted gift packs
The new plant in Uttaranchal, commissioned ahead of schedule.
The launch of yet another exciting snacking option - Britannia 50-50 Pepper Chakkar
PRODUCTS
Britannia Treat proffers a wide variety of flavours, such as the classic favourites
Bourbon & Elaichi, the Fruit Flavoured Creams such as Orange, Pineapple,
Mango, and Strawberry, the Jam Filled Centres under the Jim Jam range, and
the Duet Range
Tiger, launched in 1997, became the largest brand in Britannia's portfolio in the
very first year of its launch and continues to be so till today. Tiger has grown from
strength to strength and the re-invigoration.
Britannia Good Day was launched in 1986 in two delectable avatars - Good Day
Cashew and Butter. Over the years, new variants were introduced - Good Day
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32. Pista Badam in 1989, Good Day Chocochips in 2000 and Good Day Choconut in
2004.
Britannia 50-50 is the leader in its category with more than one-third of market
share. The versatile and youthful brand constantly aims to provide a novel and
exciting taste experience to the consumer.
Britannia's oldest brand enjoys a heritage that spans the last 50 years - and
going strong., Britannia Marie Gold has maintained its stronghold. It is the #1
brand in its category by a long shot
In 1996, Milk Bikis launched a variant called Milk Cream. These round biscuits
come with smiley faces and are full of milk cream that makes them very popular
with children.
To offer something to consumers who cherish healthy living, Britannia introduced
Nutri-Choice biscuits. In 1998, Nutri-Choice Thin Arrowroot was morphed from
Jacob's Thin Arrowroot (a popular brand in East India).
Before Timepass, Britannia's offering in the salted cracker category was Snax.
Launched in 1999, Snax was promoted as a tastier base for toppings through
edgy advertising.
Little Hearts was launched in 1993 and targeted the growing youth segment. A
completely unique product, it was the first time biscuits were retailed in pouch
packs like potato wafers.
Britannia Nice Time was the pioneer of sugar sprinkled biscuits in India. This
unique product managed to create such a strong consumer pull that soon there
was a rush of pretender products in the market, clearly indicative of the success
of the concept.
Till 1958, there were no breads in the organised sector and bread consumption was a
habit typified by the British. Then, a mechanised bread unit was set up in Delhi with the
name "Delbis" which produced sliced bread and packed it under the Britannia name.
Thus, Britannia was not only the pioneer, but also inculcated in the people of Delhi the
habit of eating white sliced bread. The Mumbai unit came up in 1963, and there again
Britannia was the first branded bread in the city
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33. DABUR INDIA
Dabur India Limited is a leading Indian consumer goods company with interests in
health care, Personal care and foods. Over more than 100 years we have been
dedicated to providing nature-based solutions for a healthy and holistic lifestyle.
Through our comprehensive range of products we touch the lives of all consumers, in all
age groups, across all social boundaries. And this legacy has helped us develop a bond
of trust with us
History
1979 Sahibabad factory / Dabur Research Foundation
1986 Public Limited Company
1992 Joint venture with Agrolimen of Spain
1993 Cancer treatment
1994 Public issues
1995 Joint Ventures
1996 3 separate divisions
1997 Foods Division / Project STARS
1998 Professionals to manage the Company
2000 Turnover of Rs.1,000 crores
2003 Dabur demerges Pharma Business
2005 Dabur aquires Balsara
2006 Dabur announces Bonus after 12 years
2006 Dabur crosses $2 Bin market Cap, adopts US GAAP
GODFREY PHILLIPS
Godfrey Phillips is a company driven by passion - the passion to excel, innovate and
win, a passion to be the leader, to emerge as the most respected company in the
tobacco industry, not just in India but all over the world.
Godfrey Phillips is today the second largest player in the Indian cigarette industry with
an annual turnover of over US$ 265 million.
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34. Incorporated in India in 1936, the Company established its own manufacturing facilities
in 1944. Today, the operations span the entire northern and western part of the country,
with two manufacturing facilities located in Ghaziabad (near Delhi) and in Andheri
(Mumbai), a state of the art R&D centre in Mumbai and a tobacco-buying unit in Guntur
(Andhra Pradesh). Headquartered in Delhi, the Company has its sales offices across
the country at Ahmedabad, Mumbai, Delhi, Chandigarh and Hyderabad.
The Company today is the proud owner of some of the most popular cigarette brands in
the country like Red and White, Four Square, Jaisalmer, Cavanders, Tipper and Prince.
Its products are distributed through an extensive India wide network comprising 484
exclusive distributors and over 800,000 retail outlets.
Over the years, Godfrey Phillips has emerged as a professionally managed, highly
efficient corporate entity. Today, the Company has one of the highest productivity rates
of workers in the entire country and an enviable organisational structure. Over the years
the Company has also become an active player in overseas markets, with significant
export volumes.
Godfrey Phillips has two major stakeholders, one of India's leading industrial houses -
the K.K. Modi Group and one of the World's largest tobacco companies, Philip Morris.
Godfrey Phillips has the strong backing of over 15,000 shareholders in the Country and
is today, through the sheer determination & passion of every employee of the
organization, growing from strength to strength.
From its modest beginning in London way back in 1844, Godfrey Phillips, a major player
in the Indian tobacco industry, has come a long way.
The history of the Company reflects the strong determination and passion amongst the
founders & the employees of the Company to establish itself as a leader of the tobacco
industry in the Country.
Mr. Godfrey Phillips, founder of Godfrey Phillips & Sons commenced business in the
Barbican (London), as a Cigar manufacturer in 1844. From the Barbican he moved to
- 33 -

35. Primrose Street and after that to Commercial Street London. B.D.V, the packet tobacco
with which the name of Godfrey Phillips was intricately connected, is practically
contemporary with Mr. Phillips embarkation in tobacco cutting in the year 1887.
At that time packet tobaccos were in their infancy. After B.D.V. came "Marigold" and
Guinea Gold. Mr. Phillips, a splendid judge of tobacco himself, looked for appreciation
of quality in his customers and stuck to his belief that quality will ultimately determine
success, something that is still the strongest belief in the Company. Messrs Godfrey
Phillips, D.H. Wilmer and H.C. Water incorporated GODFREY PHILLIPS INDIA as a
Private Ltd. Co. on 3rd December 1936. The Company imported cigarettes from
Godfrey Phillips Ltd. U.K.
In the year 1942, plans for setting up a manufacturing facility in Calcutta were made,
however it got shelved due to World War II. In 1944, after the war, GODFREY
PHILLIPS bought Master Tobacco Co., Chakala, Andheri (Mumbai) thereby establishing
its first factory in the Country. In October 1946, GODFREY PHILLIPS became a Public
Ltd. Co. with its manufacturing operations in Mumbai.
GODFREY PHILLIPS was then primarily a manufacturing company and made cigarette
brands like Cavanders, Abdulla No. 7, DERESKE, Marcovich, Red & White. In 1951/52
Godfrey Phillips UK bought out George Dobie & Son's, famous Four Square brand.
In 1967, D. Macropolo & Co., which was the sole selling agent for GODFREY PHILLIPS,
opened a subsidiary company called "International Tobacco Co.", with its manufacturing
facility in Ghaziabad (near Delhi) to manufacture cigarettes for GODFREY PHILLIPS.
In 1967-68, Philip Morris acquired substantial holding in Godfrey Phillips Ltd., U.K. and
Godfrey Phillips Investment Corporation which was holding substantial shares of
Godfrey Phillips India Ltd. It also acquired a large share holding interest in George
Dobie & Sons. Thus in 1968, Godfrey Phillips Ltd., U.K., George Dobie & Sons, and
GODFREY PHILLIPS became affiliates of Philip Morris
- 34 -

36. Philip Morris is a large professionally managed multinational with diversified business
interests. It has a wide range of tobacco and other products, with "Marlboro" being its
leading brand in the world. It took major initiatives in 1968 for GODFREY PHILLIPS to
re-organise its operations. A major thrust was given to marketing & sales and it was
decided to merge D. Marcopolo & Co. with Godfrey Phillips, a process, which began in
1969. The merger was finally completed on 31st December 1975, bringing the four
sales branches and "International Tobacco Co." under its fold.
In 1973 GODFREY PHILLIPS, successfully launched Four Square Kings, India 's first
King Size filter cigarette. It was the sheer passion to be close to the consumer that
helped the Company recognize the demands of the emerging consumer long before
anyone in the cigarette industry.
In 1979, Philip Morris. joined hands with the K.K. Modi Group and in the following
year the Modi Enterprises took over the management of GODFREY PHILLIPS with a
substantial financial stake. Modi enterprise was new to the cigarette business, but an
area in which they saw a huge potential for growth. They took on this new challenge
with a lot of passion, vigour and confidence.
The business was given a fresh look in all its areas of operation. Professional managers
were inducted to head the various functions to bring about change and vigor in the
organization to meet the challenges of the eighties. The existing brand franchises were
rejuvenated, each brand was modernized with the prime objective of growing their
brand equity. Modernization of the factories was initiated; product development and
research activities were stepped up. Aggressive marketing and sales strategies were
drawn up and implemented and each employee was empowered to bring about the
desired change. Everything was restarted with renewed passion and determination.
Godfrey Phillips is best known by the brands it manufactures and today the Company is
the proud owner of some of the best FMCG brands of the country. At least 3 of our
cigarette brands today feature in the top 50 FMCG list. They are: Four Square Special,
Red & White and Cavanders.
- 35 -

37. Apart from these champions, the Company also has other cigarette brands that cater to
a large and varied range of consumer segments.
The year 2002 also saw the Company re-launch some of its brands, by giving them an
entirely new look & positioning, while some new, innovative products were also
introduced. These brands are already making their presence felt in the industry. They
are: Jaisalmer (re-launched in 2003), Tipper & Piper (new innovative products
introduced in 2002) and Prince (another re-launch for the year 2002).
Prepared with utmost dedication and passion, to deliver the customer with the most
satisfying smoke, each cigarette going out into the market bears the Godfrey Phillips
stamp of quality and assurance.
Cigarette
Four Square
Jaisalmer
Red & White
Cavanders
Tipper
North Pole
Prince
Cigars - Brands
Don Diego
Hav-a-tampa
Phillies
Santa Damiana H-2000 Rothschild
- 36 -

38. GODREJ
The foods division of Godrej Industries produces and markets edible oils, vanaspati,
fruit drinks, fruit nectar and bakery fats.
The division has two state-of-the-art manufacturing facilities: at Wadala in Mumbai, the
capital of the western Indian state of Maharashtra; and at Mandideep near Bhopal in the
northern Indian state of Madhya Pradesh. It has a national distribution network
consisting of 800 distributors and 24 consignment agents.The plants are equipped with
the best of modern equipment for the processing and packaging of a wide variety of
food products. These include:
The 'Jumpin' range of fruit drinks, which come in flavors such as mango, apple,
pineapple and orange. The 'Xs' range of fruit nectar (mango, litchi, and sweet orange
and pineapple flavors). Tomato Puree (under the Godrej brand). Fruit pulps and juices
in bulk aseptic packaging. Health and dietetic foods. Refined edible oils of low color in
different varieties of groundnut, sunflower and soyabean. Processed hydrogenated fats
for edible purposes such as vanaspati and bakery shortenings.
Godrej Industries, in keeping with the philosophy of the Godrej Group, believes that
quality is the product of a combination of man and machine. The foods division has
people of outstanding caliber to go with the modern technologies it uses. The result: the
ability to deliver outstanding products.
Soymilk is the rich creamy milk of whole soybeans. With its unique nutty flavor and rich
nutrition, soymilk can be used in a variety of ways.
Plain, unfortified soymilk is an excellent source of high-quality protein, B-vitamins and
iron. Some brands of soymilk are fortified with vitamins and minerals and are good
sources of calcium, vitamin D and vitamin B-12.
Soymilk is free of the milk sugar lactose and is a good choice for people who are
lactose intolerant. Also, it is a good alternative for those who are allergic to cow's milk.
Children can enjoy homemade or commercially prepared soymilk after the age of 1
year. Infants under 1 year of age should be fed breast milk, commercially prepared
infant formula or commercial soymilk infant formula.
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39. Soymilk is available as a plain, unflavored beverage or in a variety of flavors including
apple, mango, malt and plain. Soymilk can be used in almost any way that cow's milk is
used.
Godrej Industries Limited is India's leading manufacturer of oleochemicals and makes
more than a hundred chemicals for use in over two dozen industries. It also
manufactures edible oils, vanaspati and bakery fats. Besides, it operates businesses in
medical diagnostics and real estate.
GIL is a member of the Godrej Group, which was established in 1897 and has since
grown into a Rs 6,000 crore conglomerate. The company was called Godrej Soaps
Limited until March 31, 2001. Thereafter, the consumer products division got de-merged
into Godrej Consumer Products Limited, and the residual Godrej Soaps became Godrej
Industries Limited. This led to the formation of two separate corporate entities: Godrej
Consumer Products and Godrej Industries.
Besides its three businesses, Godrej Industries also runs four divisions — Corporate
Finance, Corporate HR, Corporate Audit and Assurance and Research and
Development — which operate on behalf of the entire Godrej Group.
GIL has built a strong manufacturing base capable of delivering international quality
products at competitive prices. It operates two plants, one at Valia in the Indian state of
Gujarat and a second at Vikhroli in suburban Mumbai. The company's products are
exported to 40 countries in North and South America, Asia, Europe, Australia and Africa,
and it leads the Indian market in the production of fatty acids, fatty alcohols and AOS
NIRMA
Nirma is one of the few names - which are instantly recognized as a true Indian brand,
which took on mighty multinationals and rewrote the marketing rules to win the heart of
princess, i.e. the consumer.
Nirma, the proverbial ‗Rags to Riches‘ saga of Dr. Karsanbhai Patel, is a classic
example of the success of Indian entrepreneurship in the face of stiff competition.
Starting as a one-man operation in 1969, today, it has about 14, 000 employee-base
and annual turnover is above Rs. 25, 00 crores.
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40. India is a one of the largest consumer economy, with burgeoning middle class pie. In
such a widespread, diverse marketplace, Nirma aptly concentrated all its efforts towards
creating and building a strong consumer preference towards its ‗value-for-money‘
products.
It was way back in ‗60s and ‗70s, where the domestic detergent market had only
premium segment, with very few players and was dominated by MNCs. It was 1969,
when Karsanbhai Patel started door-to-door selling of his detergent powder, priced
at an astonishing Rs. 3 per kg, when the available cheapest brand in the market was
Rs. 13 per kg. It was really an innovative, quality product – with indigenous process,
packaging and low-profiled marketing, which changed the habit of Indian housewives‘
for washing their clothes. In a short span, Nirma created an entirely new market
segment in domestic marketplace, which is, eventually the largest consumer pocket
and quickly emerged as dominating market player – a position it has never since
relinquished. Rewriting the marketing rules, Nirma became a one of the widely
discussed success stories between the four-walls of the B-school classrooms across
the world.
The performance of Nirma during the decade of 1980s has been labeled as ‗Marketing
Miracle‘ of an era. During this period, the brand surged well ahead its nearest rival –
Surf, which was well-established detergent product by Hindustan Lever. It was a
severing battering for MNC as it recorded a sharp drop in its market share. Nirma
literally captured the market share by offering value-based marketing mix of four P‘s, i.e.
a perfect match of product, price, place and promotion.
Now, the year 2004 sees Nirma‘s annual sales touch 800,000 tones, making it one of
the largest volume sales with a single brand name in the world. Looking at the FMCG
synergies, Nirma stepped into toilet soaps relatively late in 1990 but this did not deter it
to achieve a volume of 100,000 per annum. This makes Nirma the largest detergent and
the second largest toilet soap brand in India with market share of 38% and 20%
respectively.
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41. It has been persistent effort of Nirma to make consumer products available to masses at
an affordable price. Hence, it takes utmost care to provide finest products at the most
affordable prices. To leverage this effort, Nirma has gone for massive backward
integration along with expansion and modernization of the manufacturing facilities.
The focal objective behind modernization plan is of up gradation with resource-savvy
technology to optimize capabilities. Nirma‘s six production facilities, located at different
places, are well equipped with state-of-art technologies. To ensure regular supply of
major raw materials, Nirma had opted for backward integration strategies. These
strategic moves allowed Nirma to manage effective and efficient supply-chain.
Nirma has always been practiced ‗value-for-money‘ plank. Nirma plans to extend the
same philosophy in categories as commodity food products, personal care products and
packaged food. Distinct market vision and robust infrastructure allowed Nirma to have
cost leadership. Apart from this, lean distribution network, umbrella branding and low
profile media promotions allowed it to offer quality products, at affordable prices.
In present scenario, an inspiring 59-year-old persona, Dr. Karsanbhai K. Patel, leads
Nirma, playing role of key strategic decision-maker, whereas his next generation has
already skilled management capabilities. Shri Rakesh K Patel – a qualified management
graduate, is spearheading the procurement, production and logistic functions, whereas
Shri Hiren K Patel – a qualified Chemical engineer and management graduate, heads
the marketing and finance functions of the organization. Shri Kalpesh Patel, Executive
Director, leads the professional organizational structure.
Products
Nirma Bath Soap
Nirma Beauty Soap
Nirma Lime Fresh Soap
Nima Rose
Nima Sandal
Nirma Washing Powder
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42. Nirma Detergent Cake
Super Nirma Washing Powder
Super Nirma Detergent Cake
Nirma Popular Detergent Powder
Nirma Popular Detergent Cake
Nirma Shudh Iodized Salt
Nirma Clean Dish Wash Bar
Nima Bartan Bar
ITC
ITC is one of India's foremost private sector companies with a market capitalization of
over US $ 13 billion and a turnover of US $ 3.5 billion. Rated among the World's Best
Big Companies by Forbes magazine and among India's Most Respected Companies by
Business World, ITC ranks third in pre-tax profit among India's private sector
corporations.
ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers,
Packaging, Agri-Business, Packaged Foods & Confectionery, Information Technology,
Branded Apparel, Greeting Cards, Safety Matches and other FMCG products. While
ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels,
Paperboards, Packaging and Agri-Exports, it is rapidly gaining market share even in its
nascent businesses of Packaged Foods & Confectionery, Branded Apparel and
Greeting Cards.
As one of India's most valuable and respected corporations, ITC is widely perceived to
be dedicatedly nation-oriented. Chairman Y C Deveshwar calls this source of inspiration
"a commitment beyond the market". In his own words: "ITC believes that its aspiration to
create enduring value for the nation provides the motive force to sustain growing
shareholder value. ITC practices this philosophy by not only driving each of its
businesses towards international competitiveness but by also consciously contributing
to enhancing the competitiveness of the larger value chain of which it is a part."
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43. ITC's diversified status originates from its corporate strategy aimed at creating multiple
drivers of growth anchored on its time-tested core competencies: unmatched
distribution reach, superior brand-building capabilities, effective supply chain
management and acknowledged service skills in hoteliering. Over time, the strategic
forays into new businesses are expected to garner a significant share of these emerging
high-growth markets in India.
Products
Cigarettes
ITC is the market leader in cigarettes in India. With its wide range of invaluable brands,
it has a leadership position in every segment of the market. Its highly popular portfolio of
brands includes Wills, Insignia, India Kings, Gold Flake, Navy Cut, Scissors, Capstan, Berkeley, Bristol and
Flake.
Foods
ITC made its entry into the branded & packaged Foods business in August 2001 with
the launch of the Kitchens of India brand. A more broad-based entry has been made
since June 2002 with brand launches in the Confectionery, Staples and Snack Foods
segments.
The packaged foods business is an ideal avenue to leverage ITC's proven strengths in
the areas of hospitality and branded cuisine, contemporary packaging and sourcing of
agricultural commodities. ITC's world famous restaurants like the Bukhara and the Dum
Pukht, nurtured by the Company's Hotels business, demonstrate that ITC has a deep
understanding of the Indian palate and the expertise required to translate this
knowledge into delightful dining experiences for the consumer.
The Foods business is today represented in 4 categories in the market. These are:
Ready To Eat Foods
Staples
Confectionery
Snack Foods
Lifestyle Retailing
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44. Over the last six years, ITC's Lifestyle Retailing Business Division has established a
nationwide retailing presence through its Wills Lifestyle chain of exclusive specialty
stores. Beginning with its initial offering of Wills Sport relaxed wear from the first store at
South Extension, New Delhi in July 2000, it has expanded its basket of offerings to the
premium consumer with Wills Classic work wear, Wills Clublife evening wear and a
tempting range of designer accessories that complete the Look.
Greeting, Gifting & Stationery
ITC's stationery brands Paper Kraft & Classmate are the most widely distributed brands
across India. ITC's Greeting & Gifting products include Expressions greeting cards and
gifting products like autograph books, slam books, party invitations, pop up & mini
books. The business also markets Expressions Regalia, a collection of premium greeting
cards & social cause cards & desk calendars in association with SOS Children's Villages of
India. Expressions greetings & gifting products are available in multi brand retail outlets
across India.
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45. 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?
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46. 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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47. Introduction to the topic
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
Sales Promotion
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48. 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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49. 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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50. 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
Let‘s have look at each tool…
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.
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51. 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.
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.
At different times, big and small companies often give away prizes and money which is
too good to be true. Often it‘s in the pursuit of more customers or a larger fan base and
it often works.
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.
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52. 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
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.
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53. 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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54. 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
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55. 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.
Perceptions regarding underlying company motivations
On tapping perceptions‘ regarding underlying company motivations for sales
promotion, ―to increase sales‖ was ranked highest followed by ―to attract switchers‖ and
―to sell excess stocks‖. While providing value to customers‖ and
―To reinforce company image‖ were ranked lowest. This indicates that consumers
believed that companies were undertaking such activities only for their own benefit and
not for the benefit of consumers.
Findings from retailer and consumer perception studies, it is evident that there
was a matching of perceptions regarding nature of scheme (price offs as most preferred
type of scheme mentioned by consumers and retailers‘ perceptions about consumer
preferences). Since retailers observe consumers in store behavior were frequently and
directly, their perceptions regarding providing consumer behavior are likely to be
accurate. Such inputs from the retailers would be useful to companies.
The retailers had the perception that those schemes which were announced through
mass media had better response. This was reinforced by the consumer survey which
showed that recall in case of heavily promoted schemes on TV was found to be very
high.
Retailers‘ prediction of companies‘ motivation for offering sales promotion were
matching with the consumer perception regarding the same. Thus both viewed that
companies were using sales promotion activities mainly to increase short term sales or
encourage switching or selling excess stock and not really to give value benefit or
enhance/reinforce brand/company image.
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56. Trade Oriented Sales Promotion
Trade Oriented Sales Promotion aimed to motivate channel member of the
company and to encourage them to push company‘s product. Trade Oriented Sales
Promotion includes dealer contest and incentives, trade allowances. Point-of-purchase
displays, sales training programs, trade shows, cooperative advertising, and other
programs designed to motivate distributors and retailers to carry a product and make an
extra effort to push it to their customers
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.
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57. 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.
Variations in Information Flow
Smaller (non-supermarket, small format store) retailers received relatively less support
compared to supermarkets in terms of servicing, margins, information about sales
promotion activities from the dealers. Many a times small retailers were only informed
verbally about sales promotion schemes by the dealer salesmen during the scheduled
weekly visits.
Dealer-Retailer Dynamics
At the time of sales promotion activities, dealers had tendency to push unwanted stocks
onto the smaller retailers. In fact these retailers preferred to stock variety of brands and
wanted payment for shelf and window display to increase traffic into their store.
However, supermarkets and big retailers were pampered and given special services
and given better margins and better allowances.
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.
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58. 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 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.
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59. 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.
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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