PRICE PROMOTIONS BASED ON BRAND LOYALTY IN FMCG

Saheer Lohith Suraj

Introduction
Brand loyalty

Spurious loyalty
Price promotion Short term success of price promotions

FMCG

Objectives
To study price promotion based on brand loyalty

in FMCG sector. To examine price offs and relative importance of different attributes while responding to a price promotion in brand loyalty. To study the effect of price promotion in Weak and Strong brands.

Methodology
Examining the effect of

Hypothesis
H0: There is no

price promotion used by Stronger brands and the Weaker brands. The data is collected from 127 retailer units of Coimbatore district. Percentage sales method.

significant relationship between price promotion and brand loyalty H1: There is a significant relationship between price promotion and brand loyalty

Comparison
Strong brand
Majority of the people

Weaker brand
Few people know the

know about the brand.

widespread.

brand.
Brand knowledge is

Brand knowledge is

limited.
Explanation at length about

No need of explanation

about the brand . name.

the brand is required.

People cant remember its

Easily remember its

name.

Analysis of brands
(a) Sales & profit
Hindustan Unilever Limited

 The chart indicates that the sales of the HUL for

the year 2009-10 are 18220.27 and for 2010-11 are 20305.54, it shows their sales in the increasing trend. Profit for the year also is high for the year 2010-11 with compare to 2009-10.

Nirma Ltd

 The sales for the year 2009-10 is 5008.72 , but in

2010-11 is decreased to 4831.61.The profit for the year is increased in 2010-11 with comparing to 2009-10, so by studying the sales and profit of both the brands for the three years, it shows that the Nirma is weaker than the HUL.

Characteristics of sample
(a)Brand Stock

Stock
60

60 50 40 30 20 10 0 Nirma Hul P&G others 25 7 Respondents 45

 It gives idea about the capacity of the retailers to

stock the goods and also the variety of the products they are stocking. It will also make clear the demand of the goods in their stores and the selling of the product in market. Most of the retailer stocks all types of soap and detergent.

(b) Factor ranking

70

Fragrance
60

Quality
50

40

Company Image

30

Price

20

Packaging

10

Others
0 1 2 3 4 5 6

 It tells about the priority the influencing factors to

the consumers and also the weight age of that factor over other factors. In the result people are more quality and price oriented. On the other hand people are also conscious about the company image. Because sometimes the consumer remember that name of the product by the company name and also from the past performance of that company Fragrance and packaging are not influencing factor as per the respondents.

(c) Purchasing Pattern

Purchasing Pattern
100 50

42

85

0 Impulsive buying
Expulsive buying

Respondent

Respondent

 The graph shows that many retailers are not

suggested to purchase particular brand because of personal relation or that customer are brand loyal. While 42% of the retailer are suggesting the consumers to buy particular brand. There could be many reasons like, extra margin, relations with consumers and quality of the products which retailer may get the benefit of the same.

(d) Impulsive buying

Respondents
12 22 38 High margin Quality 55 Relationship No reason

 In the graph and table it is clear that for margin

and of better relations with consumers and too provide quality product to consumers they suggest consumers too bye particular brand. For the company it may be helpful to target such retailers to sell their product in the market easily.

(e) Impulsive offers

50 15

33 35 10 5 21 8
Respondents

Respondents

 The chart shows the demand of various types of

promotional schemes in the market by the consumers. Almost all types of schemes are being demanded by the consumers in the market but there are three major schemes which consumers generally look at the time of purchase or before that.

Promotions of Nirma
Nirma
11 30 16

37

Extra Margin Extra Units

33

credit facility

Gifts
Promo. Exp.

 Price promotions offered by the NIRMA Ltd to the

retailers to attract them towards stocking their goods and also stop them switching them too other major players in the market. NIRMA is mainly offering credit facility which is offered by all major players it may differ in the time limit of the credit. It is also providing extra margin, and units with occasional gift with their schemes.

Promotions of HUL
HUL
12

10 8 6 4 2 0 Extra Margin Extra Units 0 Credit facility Gifts Promo. Exp. 10 12 7 11 HUL Respondents

 The chart shows that the HUL is not using the Price

promotions regularly, they using it occasionally. Only few retailers respond to promotions offered by the HUL Finally after comparing both the brands i.e. Nirma & HUL the results predicts that the price promotions are used by the Nirma is more than the HUL. Since the Nirma is the weaker brand hey using more tactics of promotions to cope up with the market situation. On the other hand HUL is building the customer by their brand image and also not using promotions frequently because of their quality in their products

Conclusion
Price Promotion has ceased to be major

differentiator . Price off and Buy one get one free offers. Analysis of results.