Amul Project

9457154422

A PROJECT REPORT ON

PROMOTION & PROJECT WORK

ENTITLED AS

‘ADOPTION OF A NEW MARKETING STRATEGY FOR

CREATING BRAND VALUE OF AMUL PRODUCTS’

PREPARED & PRESENTED

S.NO. CONTENTS PAGE NO.

PREFACE 11 ACKNOWLEDGEMENT 32 DECLARATION 43 CERTIFICATE BY GUIDE 54 INTRODUCTION TO THE PROJECT 65 EXECUTIVE SUMMARY 86 INDUSTRY PROFILE 97 CHAPTER 1- INTRODUCTION AND 13

HISTORY OF THE COMPANY8 CHAPTER-2 OBJECTIVE AND SCOPE 259 CHAPTER-3 RESEARCH METHODOLOGY 26

10 CHAPTER-4 DATA ANALYSIS AND 28INTERPRETATION

11 CHAPTER-5 LIMITATIONS 3912 CHAPTER-6 FINDINGS 4013 CHAPTER-7 SUGGESTIONS AND 41

RECOMMENDATIONS14 ANNEXURE 4215 PRODUCT PROFILE 45

PREFACE

The PGDM programme is well structured and integrated course business studies. The main objective of practical training at PGDM level is to develop skill in student by supplement to the theoretical study of business management in general. Industrial training helps to gain real life knowledge about the industrial environment and business practices. The PGDM programme provides student with a fundamental knowledge of business and organizational functions and activities, as well as an exposure to strategic thinking of management.

In every professional course, training is an important factor. Professors give us theoretical knowledge of various subjects in the college but we are practically exposed of such subjects when we get the training in the organization. It is only the training through which I come to know that what an industry is and how it works. I can learn about various departmental operations being performed in the industry, which would, in return, help me in the future when I will enter the practical field.

Training is an integral part of PGDM and each and every student has to undergo the training for 2 months in a company and then prepare a project report on the same after the completion of training.

During this whole training I got a lot of experience and came to know about the management practices in real that how it differs from those of theoretical knowledge and the practically in the real life.

In todays globalize world, where cutthroat competition is prevailing in the market, theoretical knowledge is not sufficient. Beside this one need to have practical knowledge, which would help an individual in his/her carrier activities and it is true that “Experience is best teacher”.

ACKNOWLEDGEMENT

With immense pleasure, I would like to present this project report for Kaira District Co-operative Milk Producers’ Union Ltd., Anand. It has been an enriching experience for me to undergo my summer training at AMUL, which would not have possible without the goodwill and support of the people around. As a student of CHAMELI DEVI INSTITUTE OF MANAGEMENT & RESEARCH, INDORE I would like to express my sincere thanks too all those who helped me during my practical training programme.

Words are insufficient to express my gratitude toward Mr. T.K ROY, the depot Head of AMUL (Indore). I am very thankful to M r. Radheshyam, who helped me at every step whenever needed.

At last but not least my grateful thanks are also extended to M r. Naresh singh (Director’ CIMR INDORE) and my thanks to all my faculty members for the proper guidance and assistance Extended by them.

However, I accept the sole responsibility for any possible error of omission and would be extremely grateful to the readers of this project report if they bring such mistakes to my notice.

DECLARATION

I hereby declare that the project report entitled “ADOPTION OF A NEW MARKETING STRATEGY FOR CREATING BRAND VALUE OF AMUL PRODUCTS” is the produce of my sincere effort. This Summer Internship Project is being submitted by me alone, at CHAMELI DEVI INSTITUTE OF MANAGEMENT & RESEARCH, INDORE for the partial fulfillment of the course PGDM, and the

report has not been submitted to any other educational institutions for any other purpose.

Date: Signature:

CERTIFICATE BY THE GUIDE

This is to certify that the project work entitled “ADOPTION OF A NEW MARKETING STRATEGY FOR CREATING BRAND VALUE OF AMUL PRODUCTS”, at GUJARAT CO-OPERATIVE MILK MARKETING FEDERATION LTD. For INDORE Branch is a piece of work done by Deepak Arora , Chamelidevi Institute Of Management & Research, under my guidance and supervision for the partial fulfillment of the course PGDM, Chamelidevi Institute Of Management & Research , Indore.

To the best of my work knowledge and belief the thesis embodies the work of the candidate himself and has been duly completed. Simultaneously, the thesis fulfills the requirement of the rules and regulation related to the summer internship of the institute and I am assured that the project is up-to the standard both in respect to the contents and language for being referred to the examiner.

Signature of the Faculty Guide:

Name of the faculty guide:

Prof. Amit Kumar

INDUSTRY PROFILE

Dairy is a place where handling of milk and milk products is done and technology refers to the

application of scientific knowledge for practical purposes. Dairy technology has been defined as

that branch of dairy science, which deals with the processing of milk and the manufacture of

milk products on an industrial scale.

The dairy sector in the India has shown remarkable development in the past decade and India

has now become one of the largest producers of milk and value-added milk products in the

world.

The dairy sector has developed through co-operatives in many parts of the State. During 1997-

98, the State had 60 milk processing plants with an aggregate processing capacity of 5.8 million

liters per day. In addition to these processing plants, 123 Government and 33 co-operatives

milk chilling centers operate in the State.

Also India today is the lowest cost producer of per liter of milk in the world, at 27 cents,

compared with the U.S' 63 cents, and Japan’s $2.8 dollars. Also to take advantage of this lowest

cost of milk production and increasing production in the country multinational companies are

planning to expand their activities here. Some of these milk producers have already obtained

quality standard certificates from the authorities. This will help them in marketing their

products in foreign countries in processed form.

The urban market for milk products is expected to grow at an accelerated pace of around 33%

per annum to around Rs.43, 500 crores by year 2005. This growth is going to come from the

greater emphasis on the processed foods sector and also by increase in the conversion of milk

into milk products. By 2005, the value of Indian dairy produce is expected to be Rs 10, 00, 000

million. Presently the market is valued at around Rs.7, 00, 000 mn

Milk Production from 1950 to 2020

1950 – 17 million tonnes

1996 – 70.8 million tonnes

1997 – 74.3 million tonnes

(Projected) 2020 – 240 million tonnes

Expected to reach- 220 to 250 mt – 2020

India contributes to world milk production rise from 12-15 % & it will increase up to 30-35% (year 2020)

W orld's M ajor M ilk P roducers (Million MTs)

Country2002-03 2003-04 (Approx.)

India 81 84.5Brazil 75 77Russia 34 33Germany 27 27France 24 24Pakistan 21 22USA 71 71UK 14 14Ukraine 15 14Poland 12 12New Zealand 11 12Netherlands 11 11Italy 10 10Australia 9 10

Research and Development in Dairy Industry:

The research and development need to the dairy industry to develop and survives for long time

with better status. The various institute and milk dairy companies R&D results provide base for

today’s industry growth and development. The research and development of products of dairy,

like yogurt and cheese market research and company reports provides insights into product and

market trends, analysis opportunities, sales and marketing strategies will help local milk

Unions to develop and spread world wide through obtaining this knowledge. Specific on market

share, segmentation, size and growth in the US and global markets are also helps industry to

expand its market worldwide even small union also.

D evelopment of F ood P rocessing I ndustry :

The food processing industry sector in India is one of the largest in terms of production,

consumption, export and growth prospects. The government of accorded it is a high priority,

with a number of fiscal relieves and incentives, to encourage commercialization and value

addition to agriculture produce, for minimizing harvest wastage, generating employment and

export growth.

Food processing industry is providing backbone support to the milk industry. The

development food products by using milk can give good market opportunities to produces milk.

P roducts and I ndustry S tatus:

Among the products manufactured by organized sector are Ghee, Butter, Cheese, Ice-

Creams, Milk powders, Melted milk food, Infant food, condensed milk etc... Some milk products

like Casein and Lactose are also being manufactured lately. Therefore, there is good scope for

manufacturing these products locally.

Liberalization of the economy has led to a flood of new entrants, including MNCs due to good

prospects and abundant supply.

I nvestment P otential in M ilk P roducts :

At the present rate of growth, India is expected to overtake the US in milk production by

the year 2010, when demand is expected to be over 125.69 ml.tn. Being largely imported,

manufacture of casein and lactose has good scope in the country.

Exports of milk products have been decentralized and export in 2005-2010 is estimated

at 71.875 cr.

P roduction of Milk in I ndia:

The facts and figures here shown are calculated on the basis of percentage increases pear year.

Year Production in million MT1993-94 61.21994-95 63.51995-96 65.01996-97 68.01997-98 71.01998-99 74.51999-00 78.02000-01 81.512001-02 85.172002-03 89.02003-04 93.02004-05 97.652005-06 102.452006-07 107.58

Major Indian and Overseas Players in the Food industry are:

Hindustan Uni Lever Limited Perfetti India Ltd. MTR foods limited Cadbury India Ltd. Godrej industries Limited PepsiCo India Holdings Amul Nestle India Pvt. Ltd. Dabur India Ltd. Britannia Industries Ltd. ITC Limited Parle Products Pvt. Ltd. Agro Tech Foods

INTRODUCTION AND HISTORY OF THE COMPANY

In the year1946 the first milk union was established. This union was started with 250 liters of milk per day. In the year1955 AMUL was established. In the year 1946 the union was known as KAIRA DISTRICT CO-OPERATIVE MILK PRODUCERS’ UNION. This union selected the brand name AMUL in 1955.

The brand name Amul means “AMULYA”. This word derived form the Sanskrit word “AMULYA” which means “PRICELESS”.

A quality control expert in Anand had suggested the brand name “AMUL”. Amul products have been in use in millions of homes since1946. Amul Butter, Amul Milk Powder, Amul Ghee, Amul spray, Amul Cheese, Amul Chocolates, Amul Shrikhand, Amul Ice cream,Nutramul, Amul Milk and Amulya have made Amul a leading food brand in India. (The total sale is Rs. 6 billion in 2005). Today Amul is a symbol of many things like of the high-quality products sold at reasonable prices, of the genesis of a vast co-operative network, of the triumph of indigenous technology, of the marketing savvy of affirmers' organization. And have a proven model for dairy development (Generally known as “ANAND PATTERN”)

In the early 40’s, the main sources of earning for the farmers of Kaira district were farming and selling of milk. That time there was high demand for milk in Bombay. The main supplier of the milk was Polson dairy limited, which was a privately owned company and held monopoly over the supply of milk at Bombay from the Kaira district. This system leads to exploitation of poor and illiterates farmers by the private traders. The traders used to beside the prices of milk and the farmers were forced to accept it without uttering a single word.

However, when the exploitation became intolerable, the farmers were frustrated. They collectively appealed to Sardar Vallabhbhai Patel, who was a leading activist in the freedom movement. Sardar Patel advised the farmers to sell the milk on their own by establishing a co-operative union, Instead of supplying milk to private traders. Sardar Patel sent the farmers to Shri Morarji Desai in order to gain his co-operation and help. Shri Desai held a meeting at Samar kha village near Anand, on 4th January 1946. He advised the farmers to form a society for collection of the milk.

These village societies would collect the milk themselves and would decide the prices at which they can sell the milk. The district union was also form to collect the milk from such village co-operative societies and to sell them. It was also resolved that the Government should be asked to buy milk from the union.

However, the govt. did not seem to help farmers by any means. It gave the negative response by turning down the demand for the milk. To respond to this action of govt., the farmers of Kaira district went on a milk strike. For 15 whole days not a single drop of milk was sold to the traders. As a result the Bombay milk scheme was severely affected. The milk commissioner of Bombay then visited Anand to assess the situation. Having seemed the condition, he decided to fulfill the farmers demand.Thus their cooperative unions were forced at the village and district level to collect and sell milk on a cooperative basis, without the intervention of Government. Mr.Verghese Kurien showed main interest in establishing union who was supported by Shri Tribhuvandas Patel who lead the farmers in forming the Co- operative unions at the village level. The Kaira district milk producers union was thus established in ANAND and was registered formally on 14th December 1946. Since farmers sold all the milk in Anand through a co-operative union, it was commonly resolved to sell the milk under the brand name AMUL.

At initial stage only 250 liters of milk was collected everyday. But with the growing awareness of the benefits of the cooperativeness, the collection of milk increased. Today Amul collect 11 lakhs liters of milk everyday. Since milk was a perishable commodity it becomes difficult to preserve milk flora longer period .Besides when the milk was to be collected from the far places, there was a fear of spoiling of milk. To overcome this problem the union thought out to develop the chilling unit at various junctions, which would collect the milk and could chill it, so as to preserve it for a longer period. Thus, today Amul has more than 150 chilling centers in various villages. Milk is collected from almost 1073 societies.

With the financial help from UNICEF, assistance from the govt. of New Zealand under the Colombo plan, of Rs. 50 millions for factory to manufacture milk powder and butter was planned. Dr. Rajendra Prasad, the president of India laid the foundation on November 15, 1954. Shri Pandit Jawaharlal Nehru, the prime minister of India declared it open at Amul dairy on November 20, 1955.

The system succeeded mainly because it provides an assured market at remunerative prices for

producers' milk besides acting as a channel to market the production enhancement package.

What's more, it does not disturb the agro-system of the farmers. It also enables the consumer

an access to high quality milk and milk products. Contrary to the traditional system, when the

profit of the business was cornered by the middlemen, the system ensured that the profit goes

to the participants for their socio-economic upliftment and common good.

Looking back on the path traversed by Amul, the following features make it a pattern and model for emulation elsewhere.

Amul has been able to:

• Produce an appropriate blend of the policy makers farmers board of management and the professionals: each group appreciating its rotes and limitations,

• Bring at the command of the rural milk producers the best of the technology and harness its fruit for betterment.

• Provide a support system to the milk producers without disturbing their agro-economic systems,

• Plough back the profits, by prudent use of men, material and machines, in the rural sector for the common good and betterment of the member producers.

• Even though, growing with time and on scale, it has remained with the smallest producer members. In that sense. Amul is an example par excellence, of an intervention for rural change.

The Union looks after policy formulation, processing and marketing of milk, provision of

technical inputs to enhance milk yield of animals, the artificial insemination service, veterinary

care, better feeds and the like - all through the village societies. Basically the union and

cooperation of people brought Amul into fame i.e. AMUL (ANAND MILK UNION LIMITED), a

name which suggest THE TASTE OF INDIA.

GCMMF Overview:

GCMMF is the India’s largest food products marketing organization. It is a state level apex body

of milk co-operatives in Gujarat, which aims to provide remunerative returns to the farmers and

also serves the interest of consumers by providing quality products, which are good value for

money.

VISION:

The vision of AMUL is as follows:

To serve the interests of the milk producers

To provide quality products that offer the best value to consumers for money spent.

SALES TURNOVER:

Sales turnover of GCMMF

Year Rs. (in millions) US $ (in millions)

1995-96 13790 400

1996-97 15540 450

1997-98 18840 455

1998-99 22192 493

1999-00 22185 493

2000-01 22588 500

2001-02 23365 500

2002-03 27457 575

2003-04 28941 616

2004-05 29225 672

2005-06 37740 839

GRAPHICAL REPRESENTATION OF SALES TURNOVER OF GCMMF:

1994

-95

1995

-96

1996

-97

1997

-98

1998

-99

1999

-00

2000

-01

2001

-02

2002

-03

2003

-04

2004

-05

2005

-060

100200300400500600700800900

335 400 450 455 493 493 500 500 575 616 672839

Sales

AREAS OF OPERATIONS

Besides India, AMUL has entered overseas markets such as Mauritius, UAE, USA, Bangladesh,

Australia, China, Singapore, Hong Kong and a few South African nations. Other potential

markets being considered include Sri Lanka.

SOME FACTS :

Annual Revenues : $1.33 billion USD

Members : 13 district cooperative milk producers` union

No of Employees : 2.7 million

No of village societies : 13,141

Total Milk handling capacity : 10.21 million liters per day

Annual Milk Collection : 2.69 billion liters

Daily Milk Collection : 7.4 million liters

Milk Drying Capacity : 626 Mts. Per day

Cattle feed Manufacturing Capacity : 3090 Mts. Per day

ACHIEVEMENTS

AMUL has achieved the following landmarks.

AMUL is the largest food brand in India.

AMUL is the world`s largest pouched milk brand.

AMUL is the world`s largest vegetarian cheese brand

CRISIL has assigned its highest ratings of “AAA” to the various bank facilities of GCMMF

LOGISTICS:

GCMMF’S SUPPLY CHAIN

AMUL has the largest cold chain network in India (i.e. 18000 refrigerators) as compared to any other company. The chemical components of milk are water, SNF and solids. Milk is very perishable product so it has to be consumed within 24 hours. In order to avoid wastage AMUL converts the milk in to SNF and milk solids by evaporating the water, which comprises up to 60-70% of milk contents. This is possible only if the distribution channel right from the producer to the consumer is well organized. It will be surprising to know that AMUL makes even the ‘Sarpanch’ to eat pizza i.e. it supplies pizzas even to rural market.

Last year, they are divided the retail market into 14 specific segments to achieve further distribution efficiency. This year our focus was on inducting distributors having expertise in servicing such Specific market segments. This initiative is yielding results by way of ensuring wider availability of our product range.

The role of distributors in our business process has never been more diverse or more important, as it is today. As a matter of fact, we consider our Distributor to be the real “Marketing Manager” of our organization. To enhance business performance of our Distributors, a workshop on Marketing and Sales Management was designed in collaboration with a premier business school. The objective of the entire initiative was to upgrade the knowledge of our Distributors in terms of contemporary Business Management Practices, so that they can perform well not only as our business partner but also as Marketing Managers. During the year, 659 Distributors have undergone this programme in 39 locations. Cold Storage is an extremely essential component in the Federation’s distribution process.

Unfortunately, availability of efficient cold storage facilities is grossly inadequate in our country. To cope up with the increasing need of suitable cold stores closer to our markets, we have continued our endeavour of creating the Federation’s own cold stores this year in various locations across the country. We now own 24 state of the art cold rooms of different sizes.

COMPETITORS PROFILE

CHITALE DAIRY

Chitale Dairy bears the quality tag of the Chitale Group.The company manufactures and markets highly functional products. These cutting edge products are manufactured using state-of-the-art technology and find applications in day-to-day transactions. Chitale dairy annual turn over of over Rs. 500 crores.

KATRAJ DAIRY

Katraj was incorporated in 1960 with an intension of providing an organized facility of milk collection for the village level farmers situated in Pune district. Katraj Dairy started with milk collection of about 0.30 lakh (30.000) litres in the first year of operation and today, has steadily grown to over 3.25 lakh (0.32million) litres per day and has a financial turnover of over Rs.150 crores (Rs.1500 million / US$ 33 million) against Amul’s annual turnover of over Rs. 52554 million / US$ 1325 million.

GOKUL

The Kolhapur District Co-operative Milk producers Union Ltd., Kolhapur was established on 16th March 1963 under the Co-operative Act. It made a moderate beginning by collecting 700 liters of Milk per day from 22 societies. Most success stories have a humble begining & so have been with Kolhapur Zilla Sahakari Dudh Utpadak Sangh Ltd.

On 16th March 1963 a spark stormed a fire to help the White Revolution revolt heavily, when on this day came into being the “Kolhapur Zilla Sahakari Dudh Utpadak Sangh Ltd” with the introduction of its popular brand of Gokul Milk & its wide range of Dairy products in to the market. Gokul milk has 6, 05,000 litres average sales per day.

ORGANIZATION STRUCTURE

Organization Structure is divided into two parts:

External Organization Structure

Internal Organization Structure

External Organization Structure

External Organization Structure is the organization structure that affects the organization

from the out side.

State Level Marketing Federation

District Milk Product Union Ltd.

Village Milk Product Union Ltd.

Villagers

As we know, GCMMF is unit of Gujarat Milk Marketing Federation, which is a co-

operative organization. The villagers of more than 10000 villages of Gujarat are the

bases of this structure. They all make village milk producers union, district level milk

producers union and then a state level marketing federation is established. The

structure is line relationship, which provides easy way to operation. It also provides

better communication between two stages.

Internal Organization Structure:

The following is internal organization chart of Amul:

Organization Structure Chart

Chairman

Managing Director

General Manager

Asst. General Manager

Finance Production Marketing Sales & Purchase Personnel

Dept. Dept. Dept. Dept. Dept.

A systematic & well-defined organizational structure plays a vital role & provides accurate

information to the top-level management. An organization structure defines a clear-cut line of

authorities & responsibilities among the employees of GCMMF. The Organization structure of

Amul is well-arranged structure. At a glance a person can completely come to know about the

organization structure.

Amul is leaded by the director under him five branches viz. Factory, Marketing, Accounts,

Purchase, Human Resources Department.

Factory department has a separate general manager under him there are six

braches viz. Production, Stores, Distribution, Cold Storage, Quality, and Deep-freezing.

This department takes care of the factory work.

Marketing department has regional senior marketing manager and under him there is a

regional manager. This department takes care of the marketing aspects of Amul.

Accounts department takes care regarding accounts i.e. day-to-day work. Under the

accountant there is one clerk.

Purchase department takes care regarding the purchase of raw materials and many other things.

FIRST PLANT is at ANAND, which engaged in the manufacturing of milk, butter, ghee, milk powder, flavored milk and buttermilk.

SECOND PLANT is at MOGAR, which engaged in manufacturing chocolate, nutramul,Amul Ganthia and Amul lite.

Third plant is at Kanjari, which

produces cattelfeed.

FOURTH PLANT is at KHATRAJ, which engaged in producing cheese.

Today, twelve dairies are producing different products under the brand name Amul. Today Amul dairy is no. 1 dairy in Asia and no. 2 in the world, which is matter of proud for Gujarat and whole India.

MARKETING RESEARCH

Marketing research plays an important role in the process of marketing. Starting with market component of the total marketing talks. It helps the firm to acquire a better understanding of the consumers, the competition and the marketing environment.

DEFINITION

“Marketing research is a systematic gathering, recording and analysis marketing problem to facilitate decision making.”

- Coundiff & Still.

“Marketing research is a systematic problem analysis, model building and fact finding for the purpose of important decision making and control in the marketing of goods and services.

- Phillip Kotler.

MAIN STEPS INVOLVED IN MARKETING RESEARCH

Defining the Marketing Problem to be tackled and identifying the market research problem involved in the task.

(1) Define the problem and its objectives.(2) Identify the problem.(3) Determine the information needed.(4) Determine the sources of information.(5) Decide research methods.(6) Tabulate, Analyze and interpret the data.(7) Prepare research report.(8) Follow-up the study.

(1) Define the problem and its objectives :- This includes an effective job in planning and designing a research project that will provide the needed information. It also includes the establishment of a general framework of major marketing elements such as the industry elements, competitive elements, marketing elements and company elements.

(2) Identify the problem :- Identifying the problem involves getting acquainted with the company, its business, its products and market environment, advertising by means of library consultation and extensive interviewing of company’s officials.

(3) Determining the specific Information needed :- In general the producer, the manufacturer, the wholesaler and the retailer try to find out four things namely :-(1) What to sell(2) When to sell(3) Where to sell(4) How to sell

(4) Determine the sources of information :-

(a) Primary Data: - Primary datas are those which are gathered specially for the project at hand, directly – e.g. through questionnaires & interviews. Primary data sources include company salesman, middleman, consumers, buyers, trade association’s executives & other businessman & even competitors.

(b) Secondary Data: - These are generally published sources, which have been collected originally for some other purpose. Source are internal company records, government

publication, reports & publication, reports & journals, trade, professional and business associations publications & reports.

(5) Decide Research methods for collecting data :- If it is found that the secondary data cannot be of much use, collection of Primary data become

necessary. Three widely used methods of gathering primary data are

A) Survey

B) Observation

C) Experimentation

A) Survey Method :- In this method, information gathered directly from individual respondents, either through personal interviews or through mail questionnaires or telephone interviews.

B) Observation Method :- The research data are gathered through observing and recording their actions in a marketing situation. This technique is highly accurate. It is rather an expensive technique.

C) Experimental Method :- This method involves carrying out a small scale trial solution to a problem, while at the same time, attempting to control all factors relevant to the problem. The main assumption here is that the test conditions are essentially the same as those that will be encountered later when conclusions derived from the experiment are applied to a broader marketing area.

D) The Panel Research :- In this technique the same group of respondents is contacted for more then one occasion; and the information obtained to find out if there has been any in their taste demand or they want any special quality, color, size, packing in the product.

a) Preparation of questionnaire b) Presetting of questionnaire c) Planning of the sample

(6) Tabulate, Analysis and Interpret the Data :-

The report must give/contain the following information:- a) The title of research

b) The name of the organization for which it has been conducted

c)The objectives of research.d) The methodology used.e) Organization and the planning of the reportf) A table of contents along with charts and diagrams used in the reports.g) The main report containing the findingsh) Conclusion arrived at end recommendations suggestedi) Appendices (containing questionnaire / forms used sample design, instructions.)

(7) Follow-up the study: - The researchers, in the last stage, should follow up this study to find if his recommendation are being implemented and if not, why?

WHAT IS PROMOTION:-

Promotion is one out of four basic instruments of marketing that has the purpose to inform about other instruments of marketing mix and to contribute to sales increase on the long term. The promotion is always serving to specific goal. These goals can be public informing, demand increasing, product differentiation, and product value increasing or sales stabilizing. Usually the promotion is targeting more than one goal.

Promotion is the process of communication between the company that sells the product and the potential customer, with the purpose of influencing the attitudes and behavior. There are specific promotional tool that are supporting chosen promotional goal. The promotion mix represents a combination of different promotional tools. The basic elements of promotional mix are Advertising, Public Relationship, Personal Sales and Sales Promotion.

Advertising is communication with current and potential customers and consumers, done through paid mass media. The channels of communication can be TV, radio, Internet, billboards, etc.

Public Relationship (PR) is communication toward public, but is turned more to reputation and image of the company, than to its products. The PR activity can be a press conference, TV interview with company representative, press article about donation of the company to charity or about latest environmental project.

Personal Sales is a way of promotion activity where sales representative is directly contacting the customer. This person-to-person contact has the goal of direct promotion of the product and conclusion of sales.

Sales Promotion represents a set of different promotional activities that has the goal of animating customers for purchasing. This can be value offer (discount), quantity offer (2+1), prize drawings, merchandising, direct contact by animators in retail outlet, etc.

The approach to promotion can be different. The push strategy is transferring the supply pressure downstream through sales channels.

Setting the Promotion Mix

When deciding how to properly utilize the marketing communications mix to meet your marketing objectives, it is important to consider the relative strengths and weaknesses of each component of the mix. Further, you must always define your total budget first (generally defined in the Marketing and/or Business Plan) and then decide upon the best way to leverage the different elements of the mix to maximize the return on your investment. You will balance the various parts of the mix to not only create an integrated approach to your marketing communications but you must also devote enough resources for each component to be successful.

Here are some things to keep in mind:

Reaches large, geographically dispersed audiences, often with high frequency; Low cost per exposure, though overall costs are high; Consumers perceive advertised goods as more legitimate; Dramatizes company/brand; Builds brand image; may stimulate short-term sales; Impersonal, one-way communication; Expensive

Most effective tool for building buyers’ preferences, convictions, and actions; Personal interaction allows for feedback and adjustments; Relationship-oriented; Buyers are more attentive; Sales force represents a long-term commitment; Most expensive of the promotional tools

May be targeted at the trade or ultimate consumer; Makes use of a variety of formats: premiums, coupons, contests, etc.; Attracts attention, offers strong purchase incentives, dramatizes offers, boosts sagging sales; Stimulates quick response; Short-lived; Not effective at building long-term brand preferences.

Highly credible; Very believable; Many forms: news stories, news features, events and sponsorships, etc.; Reaches many prospects missed via other forms of promotion; Dramatizes company or product; Often the most under used element in the promotional mix; Relatively inexpensive (certainly not 'free' as many people think--there are costs involved)

Many forms: Telephone marketing, direct mail, online marketing, etc.; Four distinctive characteristics: Nonpublic, Immediate, Customized, Interactive; Well-suited to highly-targeted marketing efforts.

When deciding upon your unique marketing communications mix, you should also consider the Product Life Cycle. Here are some general guideline as to how and when to emphasize different parts of the mix according to the stages of a typical product life cycle:

Product Life Cycle

Pre-Introduction: Light advertising, pre-introduction publicity

Introduction: Heavy use of advertising, public relations for awareness, sales promotion for trial

Growth: Advertising, public relations, branding and brand marketing, personal selling for distribution

Maturity: Advertising decreases, sales promotion, personal selling, reminder & persuasion

Decline: Advertising and public relations decrease, limited sales promotion, personal selling for distribution

Next let's briefly walk through each of the various parts of the marketing communications mix.

RESEARCH DESIGN