Pakistan Tobacco Company: Methods in Business Research Report
Methods in Business Research
Executive Summary
Pakistan Tobacco Company is one of the leading cigarette manufacturers in the country, the company is also one of the largest spenders on promotion. However a question has arisen as to the effectiveness of these promotional activities in increasing the sales of various cigarette brands promoted by the company. This research is a part of the string of researches being conducted by PTC. The research therefore focused towards surveying various cigarette retailers in Karachi to find out their opinion about the effectiveness of the merchandising. The merchandising activities include putting up model shops, facias, tube lights, posters, stickers, modular, panflex, wooden counters, wobblers, buntings, light boxes.
The research came up with very interesting findings, these are summarized as follows:
- Out of the total sample 44% carried some form of merchandising of PTC brands, 36% had merchandising of Lakson brands, and 20% had merchandising.
- It was found out that Gold Leaf was the most heavily merchandised brand, 66 retailers had some form of Gold Leaf merchandising, Red & White, Wills and Morven Gold were the other brands that were heavily merchandised, being merchandised on 36, 34 and 30 retail outlets respectively.
- Facias seem to be the most popular type of permanent merchandising activity, 54 outlets had facias of a particular brand. Tube lights were second in line, 46 retail outlets carried tube lights having printed shades of some cigarette brand
- Among the temporary mediums posters were the most popular, greater visibility as compared to the other temporary mediums was the main reason behind the popularity of posters. 46 outlets had posters of one or more brands placed on them. Stickers were the second most popular with 24 shops having some sort of cigarette stickers.
- 69% of the retailers surveyed had the opinion that customers do note that merchandising carried out at their shops. Only 10% retailers believed that customers do not note the merchandising and do not pay any attention to them.
- 45% of the retailers had the opinion that their customers like the merchandising carried out at their outlets. 32% believed that the customer had a neutral feeling towards the merchandising that is they neither liked it nor disliked it
- 59% retailers said that “yes”, permanent merchandising does increase sales. 41% believed that permanent merchandising does not contribute in increasing sales.
- 48% of the selected retailers said that temporary merchandising activities result in increase sales whereas 52% believed that temporary merchandising does not increase sales,
- An overwhelming majority of the retailers (80%) expressed the significance of temporary merchandising in informing consumers about the various schemes conducted by the various companies.
THE PROPOSAL
Research Objective
The objective of this research is to find out the effect of merchandising carried at various cigarette-selling outlets on the sales volume of cigarettes.
Background
Pakistan Tobacco Company is one of the leading corporate spenders on promotional activities, the main areas being advertising, sponsorships and merchandising at retail outlets. A concern, for long has been the question of the effectiveness of these promotional activities in increasing the sales of various cigarette brands being produced by the company. Especially the heavy merchandising activities are being carefully studied. This research is a part of the string of researches being conducted by PTC. The research will be focused towards surveying various cigarette retailers in Karachi to find out their opinion about the effectiveness of the merchandising. The merchandising activities include putting up model shops, facias, tube lights, posters, stickers, modular, panflex, wooden counters, wobblers, buntings, light boxes. All of these activities would be comprehensively explained in later sections of the report.
Research Approach
A selected sample of retailers in Karachi would be surveyed using a questionnaire, the researchers asking questions to the retailers and noting down their responses will fill the questionnaires. The type of the merchandising carried out at the outlets will be recorded through observation. The number of retailers to be surveyed will be selected by the company.
Time
The time period allocated to complete the research would be two months. The preliminary activities and the survey will be completed in six weeks, two weeks will be reserved to analyze the data and complete the report writing.
INTRODUCTION
Pakistan Tobacco Company Limited is one of the largest manufacturing concerns operating in Pakistan. It is a subsidiary of British American Tobacco Company (BATCO). The Head Office of BATCO is located in London, England. BATCO has about 65% shares in Pakistan Tobacco Company. The Head Office of PTC is situated in Islamabad.
Pakistan Tobacco Company is one of most recognized companies of Pakistan as it is the market leader (value wise) in the Cigarette Industry. Major brands produced by Pakistan Tobacco Company are
- John Players Gold Leaf
- Benson & Hedges
- Wills Kings
- Capstan
- Gold Flake
- Embassy
John Players Gold Leaf is by far the most recognized cigarette brand in the country and is the market leader in the premium brands. Pakistan Tobacco Company also imports duty paid Benson & Hedges cigarettes with Urdu warning printed on the packs. This step was taken by Pakistan Tobacco Company in order to curb smuggling of Benson & Hedges which is a world-renowned brand.
Being present in a very sensitive industry Pakistan Tobacco Company is faced with several restrictions. With growing awareness about smoking several restrictions have been imposed by the Government. For instance it is highest “TAXED” industry in Pakistan.
Pakistan Tobacco Company maintains the highest standards of quality so it imports most of its raw materials from abroad. The continuing devaluation and the week economic conditions of the country is also one of the most important reasons for the bad performance of Pakistan Tobacco Company.
Pakistan Tobacco Company has got two cigarette manufacturing facilities located at
- Jehlum
- Akora Khattaq
The facility at Karachi was disbanded due to the fact that most of the Tobacco leaf used in the manufacturing of cigarette is produced in upper Punjab and NWFP.
The management of Pakistan Tobacco Company decided that relying on only one business might prove harmful for the company in the coming years. So a decision about the diversification of the company was taken in 1993. A detailed evaluation and feasibility analysis was conducted for several consumer goods industries. Edible oil industry was chosen as the most feasible and Pakistan Tobacco Company launched “SUNDROP” as the most refined and the most pure sunflower cooking oil in Pakistan. Edible oil Division was established to handle the responsibilities of manufacturing and distributing edible oil in Pakistan. The head office of edible oil division is in Lahore and the manufacturing facility is in Sheikhopura. The raw material used in the production of SUNDROP is purely indigenous making SUNDROP as 100 % pure sunflower oil “Made in Pakistan”. The edible oil division has divided Pakistan in to strategic units to increase the availability of SUNDROP throughout Pakistan.
As cigarette Industry is very competitive, every organization has to rigorously promote its brands. The Merchandising and Promotion Department plays an important role in increasing awareness & creating the demand for the products. The department has to continually come up with innovative and creative ideas for marketing and promoting the brands. The basic purpose of such activities is to create brand loyalty and brand equity.
METHODOLOGY
Population Definition
“The total population consists of all the cigarette retailers in Karachi”.
The retailers include kiosks, pan shops, general stores, kiryana stores and convenience stores.
The population is constituted by
Element All Retail outlets
Sampling unit that sells any brand of locally merchandised cigarettes
Extent in Karachi
Time from mid September to the end of October.
Sampling Frame
The sampling frame was determined by a list of retail outlets determined by a previous research conducted by Aftaab Associates and PTC. The purpose of that research was to identify and categorize all the retail outlets selling cigarettes in Pakistan in to a database.
Sample Unit
Since the research required the opinions of cigarette retailers, the sample unit taken was each retail outlet selling cigarettes.
Sample Method
A judgement sampling method was used on the basis of the previous research conducted by Aftaab Associates and PTC. The research concluded that to get a representative sampling population of Karachi, where the variable and selection errors can be minimized a samples from the following areas would be required Gulshan-e-Iqbal, Nazimabad, Saddar, Clifton, Defense, Bahadurabad
Sample Size
The sample size of 200 retail outlets was selected by PTC.
Rationale
The rationale behind selecting retailers to be surveyed as given by PTC was that retailers understand the behavior of the consumers, they know the buying habits of the consumers so their opinion about the effectiveness of merchandising would be an effective reflection of the consumers’ point of view.
The Prerequisites
The questionnaire was designed with the help of PTC. Specific areas to be surveyed were also selected by PTC but which retailers should be interviewed from each area, was left to the personal judgement of the researchers. The areas identified by PTC were Gulshan-e-Iqbal, Nazimabad, Saddar, Clifton, Defense, and Bahadurabad.
The retailers were divided into five categories depending upon the products being offered:
- Kiosk
- Pan Shop
- Kiryana Store
- Convenience Store
- General Store
| Type of Outlet | Total |
| Convenience Store | 12 |
| General Store | 50 |
| Kiosk | 78 |
| Kiryana Store | 2 |
| Pan Shop | 58 |
| Grand Total | 200 |
Difference Between Kiosk and Pan Shop
Kiosk refers to separately standing, small wooden cabins either constructed by the retailer or in some cases by PTC or Lakson Tobacco. These Kiosks are used for selling cigarettes and pan.
The Pan Shops are small shops also selling pans and cigarettes but they are attached to building having various shops.
.
Each category was then further subdivided in terms of the profile of the shop, the profile was based on factors such as the size, products being offered, the layout of the shop etc. Four categories were developed for ranking the outlets in terms of profile:
- Premium
- Sub-Premium
- Medium
- Low
| Profile of Outlets | Total |
| Low | 94 |
| Medium | 68 |
| Premium | 22 |
| Sub Premium | 16 |
| Grand Total | 200 |
Deciding on which category (in terms of profile) an outlet belongs to was on the personal judgement of the researchers.
Type of Merchandising
The merchandising activities carried out at various outlets were divided into two broad categories i.e. Permanent Merchandising and Temporary Merchandising:
| Merchandising | No of Shops |
| Model Shop | 30 |
| Facia | 54 |
| Panaflex | 28 |
| Tube Lights | 46 |
| Light Box | 6 |
| Modular | 10 |
| Woodwork / Counter | 28 |
| Posters | 46 |
| Buntings | 4 |
| Mobiles | 0 |
| Wobblers | 6 |
| Stickers | 24 |
| Other | 12 |
Permanent Merchandising
Permanent merchandising activities consist of those components which have a relatively long live usually measured in the number of years. The activities that constitute permanent merchandising are given below:
Model Shops
These are small kiosks constructed by the cigarette companies and all four sides display the name or logo of a particular brand.
Tin Facias
These are the large tin boards that are placed in the front-top of the shop
Panaflex
These are thin sheets of either plastic or other materials, which are placed in the front-bottom of the shop.
Tube Lights
Tube lights having shades, which display the names and logos of various brands
Light Boxes
Plastic boxes displaying the name or logo of a brand and having a bulb or tube light inside it.
Modular
A swinging flap behind which cigarettes are placed
Woodwork / Counter
A wooden counter having the brand name or logo.
Temporary Merchandising
These activities have short life calculated in days, weeks or at the most months. The activities included in this category are following:
Posters
Stickers
Banners
Buntings
Small leaflets usually connected with a string
Wobblers
These are large size custom made cigarette pack shaped boxes.
Selected Brands
The brands, whose merchandising was to be studied were named by PTC, these are listed below:
- Benson & Hedges
- Gold Leaf
- Three Castles
- Wills
- Red & White
- K2
- Morven Gold
- Diplomat
- Embassy
- Other
THE SURVEY
A schedule was prepared to carry out the actual survey. Each day the three of us went to a particular area and then divided the retailers to be surveyed into three. The retailers were selected on personal judgment. Kiosks and Pan Shops were given more emphasis, as they constituted the most heavily merchandised segments.
As per company instructions the name of PTC was not disclosed to the retailers, except for extreme cases where the retailer was not willing to co-operate at all, so that retailer bias towards the company could not distort the response. Initially the merchandising that was carried out at a particular retailer was observed and relevant spaces were ticked on the questionnaire. Secondly we introduced ourselves as students and described the purpose of the survey so a Direct Interview Technique was used. After that the retailer was asked the questions which basically revolved around finding out his opinion about the impact of merchandising on sales. The questions were framed in Urdu, to get more detailed information and to clarify certain things, additional questions were asked. Thus the interviews were not completely structured but rather mixed.
A database was prepared in Microsoft Access that was regularly updated as more retailers were interviewed.
Sample Selection
207 interviews were completed of a desired 100, the extra were carried out so that questionnaires carrying insufficient data could be eliminated without reducing the pre-set sample size.
Analysis
One of the main criteria of analyzing the collected data was to compare the sales of a particular brand of cigarette on the shop at which it was merchandised against the sales of the same brand on a shop where it hasn’t been merchandised. Another main consideration was to compare the general level of sales of cigarettes on shops that carry some sort of merchandising against those which do not carry any merchandising. Relevant graphs were generated from the data using Microsoft Excel. The analysis of the data is based on the graphs that would be presented in the later stages of the report.
Problems & Limitations
Non-Response Error
The most major problem that was encountered during the survey was that the retailers were not very willing to co-operate, often the retailers’ main concern was if whether we were from the tax department. This problem was more evident among the owners of kiosks and pan shops whose main revenue was from cigarettes.
In some cases the retailers were quite busy and they did not want to spend much time answering questions.
Some retailers were willing to answer all the questions but were not willing to disclose their daily sales of various cigarette brands, this meant that we were left with incomplete questionnaires. The technique used to get rid of this problem and estimate the sales of such retailers was to take figures close to the sales of other retailers in the same area.
Measurement Error
Exaggeration and Undermining of the sales figures was also another concern, PTC had already warned us that some retailers might exaggerate their sales as they think that it is a criteria against which the company will judge those retailers when deciding about putting new merchandising. It was also believed that a lot of retailers would tell lesser sales than that they actually have, the technique to counter this problem was once again to judge the variation among the sales figures of various retailers in the same area.
Maturation Error
To some extent the maturation error was present as these retailers were surveyed during the afternoon, the effectiveness of interviewing the last few retailers in a day would have been comparatively low as factors such as excessive heat would have had their impact on the researchers.
Rationale of Questionnaire
The Questionnaire had two purposes, one was to determine the effect of merchandising on sales, the second purpose was to determine various consumer and retailer attitudes towards the merchandising carried out their outlets. Therefore this required both open ended and closed ended questions.
The research required that both the actual effect of merchandising on sales as well as the retailer’s opinion be measured. This meant that retailers had to be questioned in depth. However most of the cigarette retailers in Karachi are barely literate and there fore are not able to read the questionnaire. Also the retailers do not have the time to sit down and fill in a questionnaire. This meant that the questionnaire would have to be explained to each of the retailers in detail. Thus the questionnaire was basically designed for the researchers convenience in conducting the research.
The first part of the questionnaire deals with the identification of the retail outlet. This is necessary as all the data is to be checked with PTC’s Retailer Census Survey (RCS). This is to check the validity of their previous survey, and the accuracy of this research. The identification consists of the name of the shop, its owner, the location and the profile of the shop.
The second part of the questionnaire consists of the actual data to be collected in the field. This include the merchandising carried out at the shop, this is to be observed by the researchers. Also determination of the most recent type of merchandising would help in determining its effect on the sales
The third part of the questionnaire consists of the retailers opinions regarding how the consumer and the retailer feel about the various types of merchandising. What the retailer’s opinion is about the various types of merchandising. Also direct questions about the effectiveness about the various merchandising has been included. Since the retailer is in direct contact with the customer, he is more capable to observe the attitudes of the consumers regarding the various merchandising and promotions. Therefore his opinion is invaluable in deciding the effectiveness of the various promotions.
The questionnaire also asks the retailers for their sales figures per day of four specific brands i.e. Gold Leaf, Red and White, Wills Kings and K2. This information is invaluable in analyzing the data provided by the retailer, with respect to the location of the retail outlet, the profile and the merchandizing carried out at the retail outlet.
The questionnaire ends with the complaints and suggestions about the retailers regarding the merchandise installed at their outlets.
FINDINGS
Company-wise Merchandising
Out of the total sample 44% carried some form of merchandising of PTC brands, 36% had merchandising of Lakson brands, and 20% had merchandising of other brands such as K2, Gold Street, Melburn, Aspen etc. The higher percentage of PTC merchandising shows the popularity of its merchandising among retailers and the company’s emphasis towards promoting its brands through retailers. It was observed that most of the retailers carried merchandising of multiple brands, thus a retailer that had PTC merchandising may also have Lakson’s merchandising.
Brand-wise Merchandising
It was found out that Gold Leaf was the most heavily merchandised brand, 66 retailers had some form of Gold Leaf merchandising. A major reason behind this number was the recently launched “Titanic” theme promotion, during which countless Gold Leaf posters were put on retail outlets, these posters were basically designed to inform people about the possibility of winning tickets to the movie “Titanic” which were placed in limited cigarette packs.
Red & White, Wills and Morven Gold were the other brands that were heavily merchandised, being merchandised on 36, 34 and 30 retail outlets respectively. Diplomat merchandising was present in 18 shops of the sample generally low profile shops. Benson & Hedges and K2 were merchandised at 6 shops each. Merchandising of various other brands was present on 50 outlets out of the total 200 sampled.
| Brand | Total |
| B & H | 6 |
| Gold Leaf | 66 |
| Three Castles | 0 |
| Wills | 34 |
| R & W | 36 |
| K 2 | 6 |
| Morven Gold | 30 |
| Diplomat | 18 |
| Embassy | 0 |
| Others | 50 |
Type of Merchandising
Permanent
Facias seem to be the most popular type of permanent merchandising activity, 54 outlets had facias of a particular brand. The reason for this popularity as given by the retailers was that these facias are comparatively more visible than other type of merchandising activities, people can see them from quite far away and know that the shop is a cigarette selling outlet. Another benefit of facias is that the name of the shop could also be placed on the facias therefore making them a very desirable medium for the retailers.
Tube lights were second in line, 46 retail outlets carried tube lights having printed shades of some cigarette brand. The minimum relative simplicity in putting up tube lights and the small amount of space they take make them very popular among both the retailers and the cigarette manufacturers. These tube lights are more visible in the night and help lighten up the shop.
Model-shops are popular among those retailers who do not have enough finances to rent a shop. The usefulness of this medium is due to the presence of the brand name or logo on all sides of the model shop. There were 30 model shops in the total sample.
Panflex and wooden counters were present in 28 outlets each, the inability of these mediums to be sighted from a distance is the major reason behind the lack of popularity of these two among the retailers.
Light Boxes were the least used medium for merchandising, only 3 of the total surveyed outlets had light boxes, the reason for the unpopularity of light boxes was due to the fact that the same purpose was served by tube lights plus the light boxes did not contribute much in the lightening of the shop.
| Merchandising | No of Shops |
| Model Shop | 30 |
| Facia | 54 |
| Panaflex | 28 |
| Tube Lights | 46 |
| Light Box | 6 |
| Modular | 10 |
| Woodwork / Counter | 28 |
Temporary Merchandising
Among the temporary mediums posters were the most popular, greater visibility as compared to the other temporary mediums was the main reason behind the popularity of posters. 46 outlets had posters of one or more brands placed on them. Stickers were the second most popular with 24 shops having some sort of cigarette stickers. The major problem with stickers was their lack of visibility. Other temporary mediums were almost non-existent mainly due to their ineffectiveness in being noticed by the customers.
Among posters the most popular were the Gold Leaf posters, this was due to the titanic theme presented and the colorful nature of the posters. Most of the posters observed referred to some temporary form of promotion carried out by a company, in the form of sales promotions or promotional schemes.
A major problem with posters was the fact that posters were easily perishable, and also sales people of each tobacco company, would either tear down the posters of their competitors, or would stick their posters on their competitors posters. This is why whenever posters were observed as a form of merchandising at shops, posters of only one company were found. The same fact applies to stickers and buntings etc, unless the retailer specifically objected to the destruction of the merchandising it was destroyed by the competitor.
| Merchandising | No of Shops |
| Posters | 46 |
| Buntings | 4 |
| Mobiles | 0 |
| Wobblers | 6 |
| Stickers | 24 |
| Other | 12 |
The Retailers’ Opinion
Consumers attitude towards merchandising
The response to the question put to the retailers that “Do the consumers actually note merchandising?” was heavily positive. 69% of the retailers surveyed had the opinion that customers do note that merchandising carried out at their shops. These retailers were further asked a question (not present in the questionnaire) whether if their customers ever comment about the merchandising, the retailers said that it is very rare that a customer talks about the merchandising and when they do its usually about the temporary ones such as posters. They said that the customer may ask about a scheme that is being promoted through posters, mainly they inquire about how they can win or if anybody else has won something from the scheme.
Only 10% retailers believed that customers do not note the merchandising and do not pay any attention to them. They said that the customers are only interested in buying the cigarettes and leaving and they do not have the time to stand and chat.
The question was not applicable to 21% of the retailers, as they did not have any sort of merchandising at their shops.
| Do Consumers Note Merchandising | Total |
| Yes | 138 |
| No | 20 |
| N/A | 42 |
| Grand Total | 200 |
Consumers preferences towards merchandising
45% of the retailers had the opinion that their customers like the merchandising carried out at their outlets. 32% believed that the customer had a neutral feeling towards the merchandising that is they neither liked it nor disliked it. 23% had no opinion regarding whether their customers liked the merchandising, disliked it or were indifferent. None of the surveyed retailer said that the consumers disliked the merchandising.
| Consumers Opinion | Total |
| Like | 90 |
| Neutral | 64 |
| Dislike | 0 |
| No Opinion | 46 |
| Grand Total | 200 |
Retailers Preferences Towards Merchandising
In response to the above mentioned question 56% of the retailers said that they liked the merchandising carried out at their outlets, 22% were indifferent and 22% had no opinion. Once again there was no retailer who said that they dislike the merchandising carried out at their shops, although some retailers at certain complaints regarding the merchandising.
Within the brand categories Gold Leaf’s merchandising was the most liked followed by Wills and Red & White.
Most of the retailers desired having merchandising carried out at their shop, as they felt that it enhances the image of the shop. This is especially true of the shopkeepers who wanted branded model shops. Others desired facias on which the name of the retail outlet would be highlighted. Tube Lights and light boxes were also very popular among the retailers as they felt that they are extremely visible at night as well as looking good in the day.
Most retailers did not express much desire of a special brand, although after further probing most wanted either Gold Leaf or Morven Gold. They felt that the merchandising of these brands is the best.
| Retailers Opinion | Total |
| Like | 112 |
| Neutral | 44 |
| Dislike | 0 |
| No Opinion | 44 |
| Grand Total | 200 |
Effect Of Permanent Merchandising On Sales
The retailers were asked to give their opinion whether permanent merchandising help boost their sales or not, in response to which 59% retailers said that “yes”, permanent merchandising does increase sales. 41% believed that permanent merchandising does not contribute in increasing sales. Those who answered in affirmative said that people prefer going to the shops where merchandising has been carried out because they think that such outlets would not be selling fake cigarettes, this in turn helps in increasing overall sales of the shop.
| Do Permanent Merchandising
Increase Sales |
Total |
| Yes | 118 |
| No | 82 |
| Grand Total | 200 |
Effect Of Temporary Merchandising On Sales
48% of the selected retailers said that temporary merchandising activities result in increase sales whereas 52% believed that temporary merchandising does not increase sales, the main reason being that cigarette smokers are brand loyal and are not affected by merchandising in deciding which cigarette to buy. Further the temporary merchandising activities are relatively less visible unless they are out of the ordinary like the Titanic theme posters of Gold Leaf.
| Do Temporary Merchandising
Increase Sales |
Total |
| Yes | 96 |
| No | 104 |
| Grand Total | 200 |
Significance Of Temporary Merchandising
An overwhelming majority of the retailers (80%) expressed the significance of temporary merchandising in informing consumers about the various schemes conducted by the various companies. Among posters the most popular were the Gold Leaf posters, this was due to the titanic theme presented and the colorful nature of the posters. Most of the posters observed referred to some temporary form of promotion carried out by a company, in the form of sales promotions or promotional schemes.
The retailers felt that temporary merchandising had a great effect in increasing the awareness of various schemes. The most popular was the Titanic theme of Gold Leaf. The recall for this scheme was the largest, in fact most retailers requested getting more of these posters as they said that posters like these increase the beauty of the shop.
A major problem however with the posters was the fact that posters were easily perishable, and also sales people of each tobacco company, would either tear down the posters of their competitors, or would stick their posters on their competitors posters. Therefore a promotion is liable to fail if the sale people of a company do not make adequate arrangements for the maintenance of their posters.
| Does Temporary Merchandising
Inform Consumers |
Total |
| Yes | 160 |
| No | 40 |
| Grand Total | 200 |
Complaints About Merchandising
The various complaints the retailers had about the merchandising are listed as follows.
- The company people do not come and regularly maintain the permanent merchandising.
- People steal the various panaflex and counters.
- The counters and other plastic merchandising are easily breakable.
- The companies do not install the permanent merchandising of the brand requested by the retailer. Instead they go for the brand of their own choice.
- The model shops are not secure, and get broken into easily.
- The model shops are very heavy and are not easily moveable.
RECOMMENDATIONS
Adequate Maintenance Of Permanent Merchandising
The primary responsibility of maintenance of permanent merchandising is on the company, it should ensure that any broken merchandising is replaced and the installed merchandising is periodically cleaned, as the quality of merchandising will reflect on the image of the brand and the company. If these activities are not carried out the purpose of merchandising is defeated, as the company won’t be able to positively promote their brands.
Preservence Of Temporary Merchandising
The main problem with temporary merchandising is that either people tear it off or put other merchandising over it. The company should ensure that the retailer does his best to save this merchandising from being torn off and does not allow other merchandising to be put over it for a certain time period. This will help in increasing the life of the merchandising and thus increasing the probability that more people will notice these activities.
More Focused Merchandising
The company should allocate its resources towards the more effective merchandising activities out of the total pool. Putting up of Facias and Posters that are more effective is advised as compared to putting up of light boxes or wobblers, which are not that well noticed.
Using Merchandising To Push Brands
The company should use its merchandising as a tool to make retailers push its brands, for example if the company decides to put up certain merchandising at a particular outlet it should ask the owner of that outlet to encourage people to try out that particular brand which has been merchandised or other brands of the company.
Thematic Merchandising
Thematic activities such as the posters of “Titanic” have proved to be very successful in attracting the attention of consumer, such campaigns should be carried out in the future as well.
Newer Methods Of Merchandising
The company should search for newer and more innovative merchandising activities. Recently the company has put up blinds in one or two outlets, though the effectiveness of such measures is yet to be seen but the company should keep on researching to come up with new methods.
CONCLUSION
The results of the research do not clearly establish a pattern of whether the merchandising directly increases sales or not but. Still majority of the retailers believed that indirectly merchandising helps in increasing their sales as people note the merchandising and come to buy cigarette from their shops. According to retailers consumers are very brand loyal specially the smokers of premium brands. But the segment consisting of the lower quality cigarette smokers is not that brand loyal and often switch brands due to various reasons, this fact can be a useful application for PTC to step up merchandising of the lower quality brands to increase their share of the pie of this segment.
Another trend that was depicted while observing the relationship between the sales of a particular brand from the outlet that it has been merchandised, it was seen that the sales of Red & White and K2 were relatively higher in the outlets where they have been merchandised. Whereas Gold Leaf and Wills did not have considerably higher sales in the outlets where they were merchandised. Although the retailers having K2 merchandising were located in areas where the consumers consisted of lower quality cigarette consumers but the trend in Red & White sales is something that should be researched further. The relevant graphs depicting this information are given in Appendix-2.
Another factor that the company has to look over is the quantity of competitor’s merchandising as it can not just cut back on merchandising in isolation and risk losing its sales to the competitor.
Table of Contents
EXECUTIVE SUMMARY 3
THE PROPOSAL 5
Research Objective 5
Background 5
Research Approach 5
Time 5
INTRODUCTION 6
METHODOLOGY 8
Population Definition 8
Sampling Frame 8
Sample Unit 8
Sample Method 8
Sample Size 8
Rationale 8
The Prerequisites 9
Type of Merchandising 11
Permanent Merchandising 12
Temporary Merchandising 12
Selected Brands 13
THE SURVEY 14
Sample Selection 14
Analysis 14
Problems & Limitations 14
Rationale of Questionnaire 15
FINDINGS 17
Company-wise Merchandising 17
Brand-wise Merchandising 17
Type of Merchandising 18
Permanent 18
Temporary Merchandising 20
The Retailers’ Opinion 22
Consumers attitude towards merchandising 22
Consumers preferences towards merchandising 23
Retailers Preferences Towards Merchandising 24
Effect Of Permanent Merchandising On Sales 25
Effect Of Temporary Merchandising On Sales 26
Significance Of Temporary Merchandising 27
Complaints About Merchandising 28
RECOMMENDATIONS 29
Adequate Maintenance Of Permanent Merchandising 29
Preservence Of Temporary Merchandising 29
More Focused Merchandising 29
Using Merchandising To Push Brands 29
Thematic Merchandising 29
Newer Methods Of Merchandising 29
CONCLUSION 29
APPENDIXES 32
