RESEARCH PROJECT REPORT On Scope of rural marketing for F.M.C.

G Company

PREFACE

In its broadest sense project report is necessary to make the students of business school familiar with the industrial environment prevailing in the world. To be competitive and work aggressive, students need to know the policies, procedures and the trends going on in the present industrial world. The purpose and objective of this project report is to find out the Where the rural market does offer a vast untapped potential , it should also be recognized that it is not that easy to operate in the rural market because of several attendant problems . Rural marketing is thus time consuming affair and re uires considerable investment in terms of evolving appropriate strategies with a view to tackle the problems .

TABLE OF CONTENTS Preface ... i

Acknowledgement ii

Students Declaration.. . Certificate .

iii iv

1.0 !ynopsis """""""""""""""""""""""""" ## 2.0 Introduction to the Topic... ## 3.0 Introduction to the $rganization%Industry ## 4.0 $bjectives of the !tudy. ## 5.0 !cope of the !tudy ## 6.0 &iterature Review...... ## 7.0 Research 'ethodology 7.1 (niverse of the study. 7.2 !ample !ize............ 7.3 !ampling 'ethod... 7.4 Tools for )ata *ollection... ## ## ## ## ##

8.0 )ata +nalysis , Interpretation. ## 9.0 -indings.. ## 10.0 Recommendations , !uggestions. ## 11.0 *onclusion... ## 12.1 &imitations of the !tudy.. ## 12.2 !cope for further research. ##

Bibliography......

Appendix ./uestionnaire0... iii

SYNOPSIS

Title: Scope Of Rural Marketing For FMCG Companies.

Objective:
Rural marketing of FMCG Companies Present and future. Future growth potential of rural marketing of FMCG Companies in India. ifferent Strategies adopted !" different FMCG companies to increase our rural market share.
Challenges faced !" different FMCG Companies..

#arious opportunities for FMCG Companies in the future.

Rationale: $s now a da"%s market is filled with a num!er of FMCG Companies& '(er" compan" want to increase our market share. ue to lot of competition in the ur!an market and ur!an market is saturated. '(er" compan" want to captured the wide rural market. )ecause a!out *+, of our countr" population li(e in the rural market. #arious FMCG like -../ I0C etc implement our strategies to captured the rural market are discussed. $nd what their impact and also the pro!lems and challenges faced !" the (arious

FMCG companies are discussed. $nd the Opportunities for the FMCG Companies in the future.
.

Research Methodology: 0he non1e2plorator" research methodolog" will !e used for the thesis writing.

Research design: O(er(iew Of Strategies $dopted )" )ig. FMCG Companies. #arious Opportunities for the FMCG Companies.. Comparati(e ata $nal"sis. Of ifferent FMCG Companies Share in

Rural Market.

Research Instruments:0he Secondar" data will !e collected through Internet/ !ooks and the materials maga4ines. pu!lished in 3ournals and

INTRODUCTION

0he rural market of India is fascinating and challenging at the same time. It offers large scope on account of its sheer si4e. $nd/ it is growing steadil". '(en a modest growth pushes up the sales of a product su!stantiall"/ in (iew of the huge !ase. It is attracti(e from "et another angle. 5hereas the ur!an market is highl" competiti(e/ the rural market is relati(el" 6uiet. In fact/ for certain products/ it is totall" (irgin market. Simultaneousl"/ the market also poses se(eral pro!lems and hurdles. 0he firms ha(e to encounter them s6uarel" and put in a great deal of effort/ if the" ha(e to get a si4ea!le share of the market. 'fforts to capture the market with due thought and focus on the constraints with streamlined strategies to o(ercome the same will tend to define the path ahead for rural marketing in India. $ -indi poet has rightl" said/ 7 Bharat mata gram vasini8 which means Mother India li(es in her (illages. $ccording to the 9::9 census/ India%s population was ;<+ million/ of which *< percent li(ed in (illages. 0his are a(erage statistics. 0here are states like =P/ MP/ Ra3asthan/ >erala/ )ihar and Orissa where the rural population (aries from ;+ to :+ percent. 0he spread of population in ?/@++ cities and towns is to the e2tent of @< percent/ and of the remaining *< percent is in

</*A/+++ (illages. 0his sheer !ase defines the (olume and scope of rural marketing.

Marketing in India has for a long time meant ur!an marketing. )ut now rural marketing is !eing widel" researched and discussed. If market potential is considered/ the rural market is !ig with appro2imatel" *+ percent of the population still residing in rural areas and with ?+ percent the Gross Bational Product emanating from agriculture. 0he following transactions/ Cwhich !roadl" outline the landscape of rural marketingD / can !e categori4ed as followsE

Marketing of agricultural inputs like fertili4ers/ pesticides/ farm Marketing of products made in ur!an centers and sold to rural areas Marketing of products made in rural areas sold to ur!an centers like Marketing of products made and sold in rural areas like milk and

machiner" etc&

like soap/ toothpaste/ tele(ision sets/ etc&

khadi cloth/ hand crafted products etc& and

milk products/ locall" manufactured toothpowder/ cloth etc.

OBJECTIVE 0he o(er all o!3ecti(e of the thesis is to throw light on Scope of Rural Marketing for FMCG Compan" in India.

SUB OBJ !TI" :

Rural marketing of FMCG Companies Present and future. Future growth potential of rural marketing of FMCG Companies in India. ifferent Strategies adopted !" different FMCG companies to increase

our rural market share. Challenges faced !" different FMCG Companies. #arious opportunities for FMCG Companies in the future.

SCOPE OF THE STUDY 0he Indian rural market with its (ast si4e and demand !ase offers great opportunities to marketers. 0wo1thirds of countries consumers li(e in rural areas and almost half of the national income is generated here. It is onl" natural that rural markets form an important part of the total market of India. Our nation is classified in around ?<+ districts/ and appro2imatel" AF++++ (illages which can !e sorted in different parameters such as literac" le(els/ accessi!ilit"/ income le(els/ penetration/ distances from nearest towns/ etc. 0he success of a !rand in the Indian rural market is as unpredicta!le as rain. It has alwa"s !een difficult to gauge the rural market. Man" !rands/ which should ha(e !een successful/ ha(e failed misera!l". More often than not/ people attri!ute rural market success to luck. 0herefore/ marketers need to understand the social d"namics and attitude (ariations within each (illage though nationall" it follows a consistent pattern. 5hile the rural market certainl" offers a !ig attraction to marketers/ it would !e nai(e to think that an" compan" can easil" enter the market and walk awa" with si4a!le share. $ctuall" the market !ristles with (ariet" of pro!lems. 0he main pro!lems in rural marketing areE

Ph"sical istri!ution Channel Management Promotion and Marketing Communication

0he pro!lems of ph"sical distri!ution and channel management ad(ersel" affect the ser(ice as well as the cost aspect. 0he e2istent market structure consists of primar" rural market and retail sales outlet. 0he structure

in(ol(es stock points in feeder towns to ser(ice these retail outlets at the (illage le(els. )ut it !ecomes difficult maintaining the re6uired ser(ice le(el in the deli(er" of the product at retail le(el. One of the wa" could !e using compan" deli(er" (ans which can ser(e two purposes1 it can take the products to the customers in e(er" nook and corner of the market and it also ena!les the firm to esta!lish direct contact with them and there!" facilitate sales promotion. -owe(er/ onl" the !igwigs can adopt this channel. 0he companies with relati(el" fewer resources can go in for s"ndicated distri!ution where a tie1up !etween non1competiti(e marketers can !e esta!lished to facilitate distri!ution. $s a general rule/ rural marketing in(ol(es more intensi(e personal selling efforts compared to ur!an marketing. Marketers need to understand the ps"che of the rural consumers and then act accordingl". 0o effecti(el" tap the rural market a !rand must associate itself with the same things the rural folks do. 0his can !e done !" utili4ing the (arious rural folk media to reach them in their own language and in large num!ers so that the !rand can !e associated with the m"riad rituals/ cele!rations/ festi(als/ melas and other acti(ities where the" assem!le. One (er" fine e2ample can !e 6uoted of 'scorts where the" focussed on deeper penetration .In Septem!er1:; the" esta!lished rural marketing sales. 0he" did not rel" on 0.# or press ad(ertisements rather concentrated on focused approach depending on geographical and market parameters like fares/ melas etc. .ooking at the Gkuchha% roads of (illage the" positioned their mo!ike as tough (ehicle. 0heir ad(ertisements showed the" achie(ed whopping sales of :<+++ (ehicles annuall". harmendra riding 'scort with the punch line GHandar Sawari/ Shandar Sawari%. 0hus/

RURAL MARKETING ENVIRONMENT

0he rural market en(ironment need a separate e2amination as it (aries significantl" from that of the ur!an market. 5e shall deal with the su!3ect under the three headings E1 9. 0he rural consumer. @. 0he rural demand. F. Other aspects of the rural market en(ironment. (A)-T#

RUR$% !O&SUM R : $ 'etailed (ro)ile :-

Si*e o) Rural !onsumer +rou, In numerical terms / India%s rural market is indeed a large one & it consists of more than *?+ million consumers. *F, of India%s total population is rural . 0he rural market consists of more than 9@ crorer households/ forming o(er *+,of the total households in the countr".

!haracteristics o) Rural !onsumer +rou,: LOCATION PATTERN :Rural Market of India is a geographicall" scattered market. 0he rural population is scattered across </*+/+++ (illages . $nd/ of them / onl" AF++ (illages / ha(e a population of more than </+++ each . More than F lakh (illages/ are in the categor" of <++ people or less.

SOCIO-ECONOMIC POSITION :Rural Consumers continue to !e marked !" low per capita incomeI low

purchasing power. Similarl"/ the" continue to !e a traditional 1!ound communit"/ with religion/ culture and tradition strongl" influencing their consumption ha!its. Bearl" A+, of rural income comes from agriculture. Rural Prosperit" and discretionar" income with rural consumers are thus linked to a si4ea!le e2tent with agricultural prosperit". LITERACY LEVEL :Rural India has a literac" rate of @;, compared with <<, for the whole countr". 0he adult literac" programmes launched in the rural areas are !ound to enhance the rural literac" rates in the "ears to come . 0he rate is certainl" on the low side. LIFESTYLE :-

0he rural consumers are marked !" a conser(ati(e and tradition1!ound lifest"les. )ut this lifest"le of a si4ea!le segment of rural consumers has alread" changed significantl" in recent "ears .0he changes can !e attri!uted to se(eral factors such asE Growth in income and change in income distri!ution . Growth in education. 'nlarged media reach C particularl" tele(isionD. Growing interaction with ur!an communities. Marketers effort to reach out the rural market.

BU-I&+ B #$"IOUR :-

)u"ing !eha(iour of rural consumers ha(e !een effected !" the following factorsE1

I&.%U &! O. !U%TUR :Rural consumers perception of products are strongl" influenced !" cultural Factors . For e2ample1the preference in respect of
co o!"# $%&' ()* $+(,' %$ -+' "'$! - o. c! -!"( .(c-o"$.

GEOGRAPHIC LOCATION:Rural consumer !eha(iour is also influenced !" the geographical location of the consumers. For e2ample / nearness to feeder towns and industrial pro3ects influenced the !u"ing !eha(iour of the consumers in respecti(e cluster of (illages. E/POSURE TO URBAN LIFESTYLES:'2tent of e2posures of rural consumers to ur!an lifest"les also influences their !u"ing !eha(iour.

T# /$- T# !O&SUM R US S T# (RO'U!T:0he situation in which the consumers utili4e their the product also their !u"ing !eha(iour.For e2ample .ack of electricit" automaticall" increase the purchase of !atteries !" rural consumers.E since the rural consumers cannot use washing powders Idetergents powders that much/ as the" wash their clothes in streams or ponds / the" go is more for washing !ars and detergents cakes.

PLACE OF PURCHASE:ifferent segments of rural !u"ers !u" their re6uirements from different places J outlets. Some !u" from the (illage / shopkeepers& some

from (illage marketsI meals& other !u" from the town that ser(es as the feeder to the rural area.

M$R0 T RS1 ..ORT TO R $!# OUT T# RUR$% M$R0 T :Man" corporate ha(e !een tr"ing hard to de(elop a market their products in rural areas / in(esting su!stainll" in these areas. e(elopmental marketing has created discriminating !u"ers demand in the rural market. 0his has !rought a!out some change in the wa" !u"ers purchase different product.

(B)- T# RUR$% ' M$&' :$ 'etailed (ro)ile :Steady gro2th Rural demand has grown steadil" o(er the "ears. Bot onl" has the market grown in 6uantitati(e terms / !ut 6ualitati(e terms too it has undergone a significant change. !hange in the com,osition o) Rural 'emand 0he composition of rural demand has also !een changing significantl" in recent "ears Man" new products ha(e entered the consumption !asket of the rural consumers. and the relati(e shares of the different categories of products in the consumption !asket .0he upper segments/ in particular / ha(e started !u"ing and using a (ariet" of modern consumer products/ which were till recentl" unknown in the rural market.

Several ,roducts already 2ell established in the rural mar3et

Marketers cannot now assumes that rural India consumes onl" certain traditionalI essential products and that its share in other product categor" is meager. It is perhaps well known that products like packaged tea / !ath soaps and washing products/ including detergentsIdetergents cakes / are popular items of consumption in rural market .Products like shampoo /toothpaste and talcum powder / and dura!les like electric irons / !ic"cles / mopeds/ scooters and motorc"cles ha(e 3oined this categor" in recent "ears. 0he rural demand for electric irons / mopeds and motorc"cles ha(e note !etween F+ and <+ percent of the all1India demand.

In many ,roducts 4 rural consum,tion accounts )or a larger share than urban:In man" products / rural consumption now accounts for a larger share than ur!an . In washing soaps CcakesI!ars D/ the rural share is o(er A+ per cent . In popular !ath soaps / it is more than <+ per cent and in !atterie?s /it is more than <A per cent .similar is the case with packed tea and hair oils. $mong dura!le/ the rural market now accounts for a larger share of the total sales in Sewing machines. RadioI transistors. 0ape Recorders. 5rist watches. )lack and 5hite 0ele(ision sets. Cassette recorders. )ic"cles. 0a!le Fans. Pressure Cookers.

In Many (roducts4 the rural mar3ets has overta3en the urban in gro2th rate:$ sur(e" !" BC$'R shows that the rural market is growing faster than the ur!an market se(eral products . 0hese includes packaged tea/ detergent powder / washing shop/ and detergent cake. Growth of motorc"cle too has !een more in the rural market than the ur!an market.

(osition o) durables
$ccording to BC$'R sur(e" / Rural India%s market for consumer dura!les is estimated at Rs . ?<++ crore / with an annual growth rate ; per cent . O0NERSHIP OF DURABLES BY RURAL CONSUMERS P"o*!cNo. o. o1)'" ,'" 233 +o!$'+o *$ )ic"cles <F Fan CceilingD 9: Fan Cta!leD 9F 0#C)K5D 9A Pressure cooker 9F 5ristwatchCmechanicalD *A RadioI0ransistors ?@ It can !e seen from a!o(e ta!le that now e(er" other other rural household has a !ic"cle/ e(er" third households has a fan / e(er" si2th has a !lack and white tele(isions set/ and e(er" se(enth a pressure cooker. $lso / nearl" ;+ per cent of rural holds own a mechanical wrist watch and ?@ per cent a radioItransistor .Rural India now purchase a third of the colour tele(ision sets/ a fourth of the mi2ersI grinders and fifth of the refrigerators sold in the countr". .actors Behind the gro2th and 'iversi)ication in Rural 'emand:#ariet" of factors / acting in concert / ha(e !rought a!out the !ig growth and welcome changes in the rural demand/ a few of them such as growth in income / changes in income distri!ution / changes in lifest"les/ and the e2pectation.

&e2 income due to agricultural 5rural develo,ment:0he technological !reak through /popularl" known as the GR''B R'#O.=0IOB/ which took place in Indian agriculture from the mid 9:*+ onwards/ has added to the prosperit" of rural India considera!l". Moreo(er/ in recent "ears / as part of the new farm polic" / high support prices are offered for farm products. $s a result / there is now more mone" in the hands of the owner1farmers in the rural areas.

The e6,ectation revolution:0he Grising e2pectations% of the rural people ha(e greatl" influenced the rural market en(ironment . It has enlarged the desire as well as awareness of the rural people & it has strengthen their moti(ation to work /earn and consume. 0he rise income pro(ide su!stance to the aspiration.

Rural 'emand is More Seasonal:Rural demand is more seasonal compared to ur!an demand .0he pre1 dominance of agriculture in the income pattern is one main reason for this. 0he relati(el" greater influence of marriages and festi(al on the purchase pattern is the another. $fter all/ agriculture in man" parts of India is still depends on the (agaries of the monsoon.

T$((I&+ T# RUR$% M$R0 TS :5hile rural India does constitute an attracti(e and si4ea!le market/ firm ha(e to stri(e hard for securing a share of it. Practicall" in e(er" task of marketing / rural marketing poses some uni6ue pro!lems. 0he ma3or tasks that need uni6ue handling in rural marketing areE Segmentation and targeting. Product management.

Ph"sical distri!ution. Channel management. Marketing communications.

A. S +M &T$TIO& $&' T$R+ TI&+ :0he rural consumers are not a homogeneous lot in economic conditions/ or literac"/ or lifest"les/ or !u"ing !eha(iour. It would/ therefore/ firm to assume that the rural market as a whole can !e ser(ed !" a single offer or a single product 1price1promotion com!ination. firm ha(e to anal"ses the consumers in depth/ carr" out thorough market segmentation and select rele(ant segments as target markets. $nd the" ha(e to de(elop a distincti(e positioning and a distincti(e marketing mi2 for each target segment.

+eogra,hical Segmentation:0he rural market can !e segmented geographicall"/ using different geographical !ases.

!limate and level o) irrigation:Climate can !e one of them& regions endowed with fa(ora!le climate are usuall" more prosperous compared with climaticall" handicapped region. .e(el of irrigation can !e another !ase& irrigated areas and dr" land areas pose different economic and marketing en(ironments.

&earness to a )eeder to2n:Firms can also segment the rural market using Gnearness to a feeder town% as the !ase. Consumers located close to a feeder town (isit it at least once a

month to sell their product andIor to !u" their re6uirements/ and in !u"ing ha!its / the" differ from those li(ing in the interior areas. It will thus !e meaningful to segment the rural market in to consumers located closer to a feeder town and consumers located awa" from them . 'emogra,hic segmentation:0he rural market can !e segmented demographicall" too. In fact/ there are man" possi!ilities of segmenting the rural market demographicall".

(o,ulation concentration:It can !e one !ase. $!out ?+ percent of the rural population li(e in * percent of the (illages in the countr" and remaining A+ percent in the other :F per cent of the (illages. 0hus/ the market can !e segmented on the !asis of different si4e classes with regard to population.

$ge:In particular/ the "outh in the rural areas can !e picked up as a separate market. 0here is a population of more than @+ crore in the age group of 9A1 F+ "ears in the rural market. Sur(e"s ha(e re(ealed that the "ounger generation dominates the purchase in the rural market. 0he rural "outh differ from their elders in their !u"ing !eha(iours .It will thus !e meaningful to segment the rural "outh as a separate market.

%iteracy level:It can !e another demographic !ase for segmenting the rural market. 0hough rural India/ is characteri4ed !" low literac" /there are wide (ariations in the matter of literac" within rural India . for e2ample1 0he rural literac" rate in >erela is ;+ Per cent / that in )ihar is onl" 9< per cent.

 Income:0he rural consumers can !e segmented in to different income classes. 0he rural consumers can also !e segmented into regular income and demand .$ll rural consumers are not characteri4ed !" seasonalit" of income .0here is a si4ea!le salaried class in the rural areas . 0here is also a si4ea!le self1 emplo"ed group/ consisting of shopkeepers and ser(ice pro(iders. 0here is nothing seasonal a!out the income of such people .O!(iousl"/ those with regular income will differ in !u"ing ha!its compared with those whose income is seasonal.

Buying behaviour segmentation:Rural consumer differ in their !u"ing !eha(iour from their ur!an counterparts as well as among themsel(es. 0his fact too could !e factored in to segmentation e2ercise . firms should /howe(er / generate rele(ant data on the rural consumers and their !u"ing !eha(iour / perception and attitudes /and then segment them using their !u"ing !eha(iour as the !ase.

Thom,son rural inde6:-

-industan 0hompson $ssociates ha(e de(eloped the 7Thom,son rural mar3et inde6% !ased on @A (aria!les / including area of the concerned district / demographic pattern occupational pattern / agriculture related data / rural electrification data and commercial !ank data . 0he inde2 can !e used in segmentation.
B. (RO'U!T STR$T +- :0he first decision to !e made in product strateg" in the rural conte2t is whether the product that is sold in the rural conte2t is whether the Product is sold in the ur!an market can !e supplied to the rural market as it is / or whether it must !e adapted . it depends on the situation and the nature of

the product .)asicall" / the firm must find out what kind of product is actuall" re6uired !" the rural consumer and then decide if it should make an altogether distinct product or adapt the e2isting product. 'conomic and income realities of the market should certainl" !e considered while de(eloping the product strateg" for the rural market . when products are designed reflecting !oth these influences /the chance of success is greater. .ower priced product (ersions do help in man" cases in the rural market /!ut no generali4ation can !e made in this regard . Man" companies tr" to reduce the prices of their products for the rural market !" creating smaller si4e /m or !" decreasing the 6ualit" . 0he approach works sometimes and with some products/ !ut not all times/ with all products.

S,eci)ically 8 'esigned (roducts:Specificall" designed product to help in man" cases

TRACTOR 4TRAILEIER : 0he tractor Itrailer is an apt e2ample. It is a product specificall" designed for the rural market. It is designed as a replacement for the plough as well as a (ehicle for transporting !oth men an d material in rural areas.

EVEREADY5S JEEVAN SATHI TORCH:'(eread" Gs Hee(an Sathi !rass torch is another e2ample of suucesssful rural specific product strateg". Initiall" '(eread"%s !rass torch was not picking up well in the rural areas . =nion car!ide launched a market research stud" for locating the reasons. 0he stud" !" the ad agenc" O)M found that the

rural folks re3ected the torch since all of its parts are not made of !rass .the design / de(eloped a!road/ had gi(en the product certain plastic parts/ like the reflector. 0he Indian rural consumer felt that the plastic parts would not dura!le . O)M also found that the rural people were prepared to pa" high prices for the same torch if it were made %all !rass%. '(eread" then introduced for the rural market the all !rass torch designed to last life long and positioned it GHee(an Sathi% as a Glife long G companion.

MODEL VARIANT:Models de(eloped specificall" for the rural market ha(e found more takers in the market . For instance/ Motorc"cles that are designed to take on the rig ours of rural roads ha(e succeeded more in the rural market.

COLOUR VARIANT :0he rural consumer differ from their ur!an cousins in colour preference . in case of some products / colour ma" matter (ar" much . firms can e2ploit this fact to their ad(antage . For e2ample / $SI$B P$IB0S understood the su!stantial difference !etween the rural !u"er in the colour preference . $sian Paints introduced paints with !right colours for the rural markets . $sian Paints also communicated the feature well through its communication campaigns.

'i))erent ,roducts5 models 4 'i))erent brands4 ,ac3ing4 ,ricing and di))erent ,ositioning:-

)" and large/ the rural market can !e tapped !etter through different products I models / different !rands/ different packaging and different positioning.

PACKAGE DESIGN AND PACK SI6E:In some case / the product can !e the same / !ut the package and pack si4e ma" ha(e to !e different for the rural target group. Package design and colour help identification of !rands !" rural !u"ers . Man" rural consumers are not 6uite con(ersant with (arious !rands .$ll the same/ the" manage to pick the !rand that the" want . 0he" recogni4e the !rands !" its packaging . 0his the reason wh" a num!er of local !rands in rural areas imitate the packaging of !ig national !rands. $s regard pack si4e / as a general / it can !e stated that smaller packs are more suited to the rural areas . .ow purchasing power and limited a(aila!ilit" of cash for shopping force the rural consumer to go in for smaller packs with low unit price. In some cases /the" also prefer small packs so that the" can make a !eginning on small scale and after trial and satisfaction go in for regular purchases. In recent "ears / sale of shampoo !rands were priced at Re 9 or !elow per sachet helped the trail and adoption. 0he <1gram #icks #apour! tin and the small si4e .ife!uo" soap are other such e2amples. -../ has deepened co(erage of man" of its products in the rural market through such com!ination. It has come up with a series of small pack si4esIsaches that speciall" cater to low end consumers.

%ogo 4 Symbols and Mnemonics :Image is far more potent the rural market / which in man" cases is an uninitiated market. S"m!ols/ therefore / add (alue to !rand recall and !rand personalit" in the rural market.

$sian (aints1 +attu:$sian Paints Gattu though e6uall" well known in ur!an and rural market / has greater effecti(eness as an identit" tool in the rural market .$ctuall" in man" rural parts of India / $sian Paints is referred to as the bahahawala or chokrawala compan". The &irma +irl:0he Birma Girl in Frock on the packs of Birma washing powder has !ecome the mnemonic for effecti(e and good (alue in washing powders. The 'ettol S2ord and the Mortein +enie: For the same reason / ReckittK Colman has !een focusing on the Sword and the Mortein genie in its rural communication. ettol

Brand 'ecisions :)randing too needs skillful handling in the rural market. 0he rural consumers ha(e alread" graduated from generic products to !randed products. 0oda"/ the !rand name is the surest means of con(e"ing 6ualit" to rural consumers. In other words/ !rand is the ke" to confidence !uilding among the rural consumers. )esides 6ualit"/ it con(e"s that the manufacturer is going to show sustained interest in those products ands

markets. 5hether the same !rand is used in !oth ur!an and rural market/ or appropriate (ariants of the !rand must !e adopted for the rural market / is a matter for conscious decisions !" the indi(idual firms depending on the conte2t. In 6uite afew cases / the Gsame !rand% is pro(iding right and cost effecti(e . In some cases/ howe(er/ the !rand name that is suited to the ur!an market ma" not !e 6uite suita!le to the rural market. .ow priced (ariants seem to work !etter in ma3orit" of cases in the rural market. It will/ howe(er / !e incorrect to assume that rural consumers prefer local !rands to national !rands.

Sell "alue Brands4 &ot !hea, Brands75hile !rands specificall" de(eloped for the rural market and low priced (ariants ma" work !etter in man" cases / the strateg" should !e one of selling (alue !rands . -..%s .ife!uo"/ for e2ample/ is a low priced car!olic soap that is often the first choice of !ath soap !" a rural consumer .-../ howe(er / does not sell it as a cheap soap. Instead/ sell it as a h"giene !rand. It communicates the (alue of the !rand to the target market. It also tries to enhances the (alue of the offer !" gi(ing suita!le Gadd1ons% .for e2ample/ while targeting rural students for the soap / it distri!uted height charts along with the soap and con(e"ed its concern for their health and well !eing . Rural marketers would do well to add some (alue to their products in this fashion if the" are keen to secure the lo"alt" of the consumers.

C. (#-SI!$% 'ISTRIBUTIO& :-

0he pro!lems faced !" the marketer in the Ph"sical distri!ution in rural conte2t are as followsE1

The (roblems in Trans,ortation and /arehousing :It is well known that transportation infrastructure s 6uite poor in rural India . 0hough the countr" has the fourth largest railwa" s"stem in the world / man" parts of rural India remain outside the rail network . $s regards Road transport / nearl" <+ per cent of the <*+/+++ odd (illages in the countr" are still not connected !" proper roads . 5hile some impro(ement is taking place on account of the (arious rural de(elopment programmes/ man" areas still ha(e onl" >$C-$ roads and most of the interiors ha(e hardl" an" roads worth mentioning .$s regards transport carriers / the most common ones are deli(er" (ans and the animal drawn carts. )ecause of the difficult" in accessi!ilit"/ deli(er" of products and ser(ices continues to !e difficult in rural areas. In warehousing too/ there are special pro!lems n rural conte2t. )usiness firms find it 6uite difficult to get suita!le godowns in man" part of rural India.

!ost 8service 'ilemma Becomes more $cute :0he firms can not simpl" rel" on Gtrickle down of stocks Gto the rural !u"ers. 0he" need a network of clearing and forwarding CcKfD agents and distri!utors at strategic locations for facilitating proper distri!ution of the products in the rural market. 0he" ha(e to commit themsel(es to ser(icing the (illages will help not onl" the a(aila!ilit" of the product/ !ut product promotion as well.

In the matter of transportation/ com!ining different modes can !e cost effecti(e. 0rucks for medium distance mo(ement and deli(er" (ans and !ullock carts for local haulage ma" ser(e the purpose !etter. 5ater transport too has a role in specific areas )ullock carts ha(e a special role on rural distri!ution/ especiall" in tertiar" transport. 0he" are cheaper& the" are a(aila!le in plent" and are ideal for the rural roads.

The 'elivery "an 70he deli(er" (an has a ke" role in rural distri!ution 0he companies concerned and their C K F agents Istockist I distri!utors operates these (ans. Companies like -industan le(er and I0C / who are pioneers in rural marketing in India/ ha(e a fleet of compan" deli(er" (ans for rural distri!ution . 0he (an take the products to the retail shops in e(er" nook and corner of the rural market . It ena!les the firms to esta!lish direct contact with rural dealers and consumers. It also help the firm in promotion . )ut the cost of operating such (ans is 6uite high . Firms like -.. and I0C had the resources as wells the wisdom to consider (an as initial in(estment in the market. 0hrough the (an / the" were not onl" sol(ing their transportation pro!lem of the rural market/ !ut were also de(eloping the market for their products.

D. !hannel Management :Organi4ing marketing channels is the second part of the distri!ution task .

Multi,le tier add to the cost :-

0he distri!ution chain in rural conte2t usuall" re6uires more tiers/ compared with he ur!an distri!ution chain . 0he distance !etween the production points and the rural market / and the scattered location of the consumer make it necessar" . $t the minimum/ the distri!ution chain in the rural conte2t need three tiers i.e. 0he (illage shopkeeper/ the distri!utor / and the 5hole sellerI stockistI CKF agent in the town .in addition it in(ol(es the manufactures% !ranch office operations in the territor". Producers who can reach the customers through the shortest distri!ution chain can do !etter in this market.

&on-$vailability o) 'ealers :Firms find that a(aila!ilit" of dealers is limited and the scope for appointment fresh I e2clusi(e dealers of the compan" is e6uall" limited in (iew of the low demand and non1a(aila!ilit" of suita!le candidates.

(oor viability o) the outlets :$ good num!er of retail outlets in the rural market suffer from poor (ia!ilit" . $ familiar parado2 in rural distri!ution is that on the one hand the manufacturer incurs additional e2panses on distri!ution and on the other hand / the retail outlets find that the !usiness is un remunerati(e to them. 0he additional funds the manufacturers pumps into the s"stem are used !" the scattered nature of the market and the multiplicit" tiers in the distri!ution chain.

Inade9uate ban3ing and credit )acilities :-

istri!ution in rural markets is also capped due to the lack of ade6uate !anking and credit facilities. It is estimated that there is onl" one !ank !ranch for e(er" <+ (illages. Rural outlets need !anking support for two important purposesE C9D1 For remittances to principals and to get fast replenishment of stocks . C@D1 For securing credit. Firms ha(e !een in search of a low1 cost s"stem of distri!ution with the wholesaler ser(ing all the retailers / including the ones at the tail end / and the latter ser(icing the consumer . 0his is the strateg" followed !" Birma to compete with -... Birma relies on the wholesaler network . -.. is tr"ing to get around the pro!lem !" gi(ing credit to the distri!utors.

E. Mar3eting !ommunication:In marketing communication and promotion too/ rural markets pose man" pro!lems. 0he literac" rate among the rural consumers !eing low/ the scope for using the printed word is rather limited. 0he traditional !ound nature of the people and heir cultural !arriers add to difficult" of the communication task. Marketing communication in the rural areas has to !e necessaril" in the local language and idiom. Rural communication is 6uite e2pansi(e. Rural communication has to go through the time consuming stages of creating awareness/ altering attitudes and changing !eha(ior. In addition/ it has to !reak the deep1 rooted !eha(iour pattern.

Managing the communication tas3:-

0he rural communicator will do well to choose a com!ination of formal and non formal media. 0he possi!ilities are indicated in !elow ta!leE1

POSSIBLE MEDIA MI/ IN THE RURAL CONTE/T Fo"8( 4 o"9()%$'* 8'*%( No)-.o"8( 4R!"( -S,'c%.%c M'*%( 0# $udio1#isualIPu!licit" #ans Cinema Rural specific art forms like puppet show and -$RI>-$0-$. Radio emonstrations Meeting /$nnouncements/ Print Media1Press Other Print Media Processions Caparisoned elephants and decorated !ullock carts carr"ing ad(ertisement panels Music records.

Outdoor POPs

Selecting The Media Mi6 :T" :5ith he increase in co(erage and increase in 0# ownership in rural areas / 0# is graduall" !ecoming the prime media for rural communication .

!inema :0he cinema is a useful medium in rural conte2t . most large and medium (illages ha(e one or more cinema house. $lso/ more than one1third of all rural people do see cinema as a matter of regular lifest"le. $d(ertisement

films / short feature films/ with disguised ad(ertisement message/ and documentaries that com!ine knowledge and ad(ertisements/ can !e emplo"ed for rural communication. It has !een estimated that FF per cent of the total cinema earnings in the countr" come from rural India.

Radio:0he radio is well 1esta!lished medium in rural areas. $ !ig e2pansion in !roadcasting facilities has taken place in the countr" o(er the "ears. 0he a(aila!ilit" of radio sets has also e2panded. 5hile radio as a medium cannot match 0# in potenc" and effecti(eness/ in the e2isting conte2t /it can certainl" pla" a significant role in rural communication.

(rint media too has some sco,e :0he role of print media is certainl" limited in the rural conte2t. '(en the remotest rural parts ha(e a small group/ which is literate. Moreo(er/ while the group ma" !e numericall" small / its mem!er usuall" happen to !e the opinion leaders / influencing the purchasing !eha(iour of the large segment of the rural consumers. so/ it would !e unwise to assume that the print media has no scope at all in the rural areas . Moreo(er/ the "ounger generation in the rural areas is comparati(el" more literate. 5ith the new trend of increasing rural literac" / the scope for using print media in rural communication will increase further.

Outdoor:-

0he outdoors / which include hoardings/ wall paintings/ illumination and other displa"s/ also lend well for rural communication . In fact / man" companies are using the outdoors in the rural communication mi2.

(O(s: ,rint o) ,urchase; :0he POPs Point of purchase promotional tools1 are also 6uite useful in the rural markets. 0he POPs meant for the rural market should !e speciall" designed to suit the rural re6uirements. S"m!ols/ Pictures/ and colours must !e li!erall" in POPs meant for the rural market. Colour is of particular significance . $s a general rule /the rural people lo(e !right colours. 0he effecti(e Communicator utili4e such cues.

$udio-visual 5 ,ublicity vans :0he $# unit or the pu!licit" (an is (er" useful for the rural communication .0he (an is a comprehensi(e mo!ile promotion station at the e2clusi(e command of the concerned firm. 0he firm can e2hi!it its films and other audio1(isual presentations/ such as slide shows/ sound and sight presentations/ puppet shows etc. from the instant promotion station. $ pota!le shamiana or Platform often forms a part of the (an. '(en pu!lic meeting can !e organised using the pota!le shamiana . 0he (an can also !e used for the sale campaign. It can also !e used for Product demonstration. Baturall"/ the $# (ans are 6uite popular with rural marketing firms% .Practicall" all firms in the agri inputs !usiness ha(e their own $# (ans followed !" those marketing consumer dura!les. Colgate1Palmoli(e has suppl" (ans that offer the free samples and screen (ideo films on oral h"giene. It has an on going rural (an

programme/ which co(er on an a(erage ;+ million rural consumers per "ear. #ans are supplemented with !ic"cle (endors/ who go to (illages not accessi!le !" the (ans. Godre3 has (ans that pla" music and announce free gifts in the (illage s6uare. 0he (an than goes to few shops in the (illages to sell the product.

Syndicated $" vans :In recent "ears/ rural $# (ans ha(e !ecome a shara!le ser(ice. Firms which can not afford to operate (ans of their own/ utili4e s"ndicated $# (an ser(ice offered !" independent agencies.

Multi-,ur,ose vans: Jain T"1s "ideo -on-2heels :Recent "ears ha(e witnessed the emergence of tools that are more inno(ati(e than the $# (an. Han 0#Gs #ideo on1 wheels is one of them.

(u,,et sho2s4 #ari3hatha :Popular entertainment programmes like puppet show / dance/ dramas/ and Harikathas / speciall" de(eloped for the product1 promotion purpose / are now !eing used in rural markets. 0he traditional art forms readil" render for communication with rural societ" . #illage fairs / festi(als and melas are ideal (enues for pro3ecting these programmes. In certain cases / pu!lic meeting too man" !e used for rural promotion.

Music !assettes :-

Music cassettes are another effecti(e medium for rural communication. It can !e reached is an appealing and a comparati(el" ine2pensi(e medium. ifferent language groups can !e reached with low !udget. 0he" can !e pla"ed in cinema houses or in other places where rural people assem!le.

#%% rural s,eci)ic communication )or Sur) :For propagating GSurf%/ -industan .e(er !rought out separate ad(ertisement films for the ur!an and rural audience. In the film meant for the rural audience/ the compan" took particular care to demonstrate step1!"1step the method to !e adopted in washing with surf for getting the !est whitening effect. 0he compan" knew that an ela!orate demonstration was essential for the rural audience.

RESEARCH
METHODOLOGY

In order to carr" out an" research in(estigation there is a need of a

S"stematic method and to adopt a well defined procedure for each and e(er" research there is also a need of methodolog" . Methodolog" of an" research constitutes the selection of representati(e sample of the uni(erse or the general population /application of the appropriate research tools and the techni6ues. 0here is an old sa"ing in Spain 70O )' $ )=..FIG-0'R LO= M=S0 .'$RB 0O )' )=..8 means "ou ne(er reall" understand a Person until "ou consider things from his point of (iew . In the same wa" to meet and satisf" the target customer the stud" of customers !eha(iour of crucial important !ecause he is king. Customer !eha(iour studies / how indi(iduals / groups and organi4ations selected !u" use and dispose of goods / ser(ices/ ideas or e2periences to satisf" their needs and desires. $ccording to H$M'S F. F=G$./ 7Customers !eha(iour consists of the acts of indi(iduals in o!tain and using goods and ser(ices including the decision process that precede and determine these acts.

0he research in(ol(es the following stepsE1

2. DEFINE THE PROBLEM AND RESEARCH OBJECTIVE:-

If the pro!lem is clearl" defined /it is half sol(ed .0he pro!lem IO!3ecti(e here to assess the scope of rural marketing for FMCG sector. : - COLLECT THE INFORMATION :0he information is collected from secondar" sources1 we!sites / maga4ines / newspapers / and maga4ines. ;- ANLAY6E THE INFORMATION :0he ne2t step in the marketing research process is to e2act findings from the collected data . <-PRESENT THE FINDINGS AND CONCLUSIONS :$s the last step /the findings and conclusion of whole research are presented in the end . .

INTERPRETATION

Rural Mar3eting Becomes $ttractive To !or,orate :-

$ (ariet" of factors ha(e rendered the rural market 6uite attracti(e to corporate in recent "ears. 0he growing opportunit" in the rural market is no dou!t the prime factor. 0he rural demand has !een growing rapidl" and its composition has !een changing for the !etter in the recent "ears. 0he increased incomeI purchasing power of the rural consumer and the impro(ed income distri!ution has enhanced rural demand for se(eral products. )etter access to man" modern productsI!rands has added to this growth. 0he heat of competition in the ur!an market actuall" ser(es as the stronger dri(er !ehind the growing interest of cooperates in the rural market. 0he fact that the rural market is still largel" an untapped as well as the earl" entrants can tap it without ha(ing to face intense competition as in the case of the ur!an market/ makes the rural market all the more attracti(e to them. Corporate ha(e !een finding the going increasingl" tough in the ur!an market / especiall" for the products in respect of which penetration le(els are alread" high . For e2ample penetration le(el for the toothpaste in the ur!an market has now reached close to ;+ per cent. In contrast/ it is !elow F+ per cent in the rural market. Moreo(er in the ur!an market man" consumers ha(e !een using a toothpaste for 6uite some time and ha(e settle down to the !rand/ its fla(our / and other characteristics .0he" can not !e e2pected to switch their !rand (er" easil" . In contrast/ in rural markets/ there a lot of first time users of toothpaste whom the compan" can tap from the scratch.

Corporate find that the highl" penetrated ur!an markets allow little room for (olume growths for most of what are called/% necessit" products% Ctoothpaste/ !ath soap/ washing products/ tea etcD. Growth opportunit" for man" of the Gemerging products% Ccoffee/ shampoo/ talcum powder etcD too is rather low in the ur!an market . 0he rural market thus !ecomes essential for companies with strong aspirations. Bot comprising in the rural market keep them out of a!out half of the countr"%s market for the Gnecessit" products% and the one1third for the Gemerging products% !" (alue .It is !ut natural that in these circumstances/ corporate set their sights on the rural market

Many com,any have already ta3en to the mar3et in a Big /ay :E/TENT OF RURAL SALES BY SELECTED COMPANIES Co8,()= -.. CO.G$0' GO R'H C$ )=RL SMI0->.IB' )''C-$B -'IBM G.$NO CIP.$ R$B)$NL -'RO -OB $ >IB'0IC SO=RC'EEco)o8%c -%8'$ R!"( S( '$(> $+("') <+ <+ FF @< @< @+ @< 9; 9* ?+ F+

E/TENT OF RURAL SALES BY SELECT INDUSTRIES Co8,()= $= IO R'FRIG$0ORS C0#s P-$RM$ C'M'B0 P$IB0S 5$S-BG M$C-IB'S SOURCE:Eco)o8%c -%8'$ $!o(e ta!les shows that the e2tent of rural sales !" select R!"( S( '$ ?+, @?, @@, @+, 9+1@+, 9+19@, :,

companiesIIndustries. Man" companiesI Industries ha(e alread" taken to the rural market in a !ig wa". It can !e shown from a!o(e ta!le that in the FMCG Categor"/ half of the re(enue of -IB =S0$B .'#'R and Colgates Come from the rural market . In the case of another companies too/ the countr"side accounts for a su!stantial part C@<1F+D per cent of the total sales. It can also !e seen that a!out One1Fifth of Pharma sales occur in rural India . >inetic sells a!out F+ per cent of its scooters. -ero -onda ?+ percent of its !ikes.

STRATEGIES ADOPTED BY DIFFERENT FMCG COMPANIES IN RURAL MARKETING

Strategies ado,ted )or rural mar3eting by di))erent .M!+ !om,anies :-

IT!<s e-chou,al :I0COs e1choupal initiati(e is changing the li(es of farmers on a scale no other (enture has e(er done. 0he compan" is entering more than F+ new (illages a da"/ e(er" single da" of the week/ FA< da"s a "ear. . 0ake a remote (illage. Go to the smallest farmer there. 'ducate him in the !est farming techni6ues. Inform him of dail" weather conditions and price mo(ements in the market. Make a(aila!le to him at his doorsteps the !est

possi!le seeds/ pesticides and fertili4ers at the most competiti(e prices. $nd when his crop is read"/ help him find the !est !u"er. Imagine doing all of this in F+/+++ (illages across si2 states season after season/ "ear after "ear. (erdict to such a proposal. Logesh Chander e(eshwar/ chairman of Rs 9@/+++ crore I0C/ said when S. Si(akumar/ chief e2ecuti(e of its agri1!usiness/ approached him with an e6uall" am!itious idea in @+++. >nowing that he was asking for the moon/ Si(akumar initiall" re6uested Rs <+ lakh to test the idea among so"a farmers in Madh"a Pradesh. e(eshwar granted him Rs 9+ crore. 0he rest/ as the" sa"/ is histor". I0COs e1choupal network has alread" reached F.9 million farmers/ and is e2panding into F+ new (illages a da"1making it corporate IndiaOs most am!itious rural initiati(e e(er. Partnering I0C in the network are F* companies/ BGOs and state go(ernments/ together creating a new ecos"stem for (illages and esta!lishing a direct link !etween what consumers eat and what farmers grow. oing it at no cost to the farmer and "et making mone" for "ourself. Impossi!le/ would !e the most o!(ious

T# (O/ R O. <e<
0he e1choupal redefines choupal/ the -indi word for (illage s6uare where elders meet to discuss matters of importance. 0he all1important letter in the word is PeP. It stands for a computer with an Internet connection for farmers to gather around and interact not 3ust among themsel(es !ut with people an"where in the countr" and e(en !e"ond. It !egins with I0C installing a

computer with solar1charged !atteries for power and a #S$0 Internet connection in selected (illages. 0he computerOs functioning is freed from the notorious power and telecom facilities at the (illage le(el. $ local farmer called sanchalak CconductorD operates the computer on !ehalf of I0C/ !ut e2clusi(el" for farmers. 0he e1choupal offers farmers and the (illage communit" fi(e distinct ser(ices. Farming methods specific to each crop and region/ soil testing/ e2pert ad(ice1mostl" sourced from agriculture uni(ersities1all for free. PurchaseE Farmers can !u" seeds/ fertilisers/ pesticides and a host of other products and ser(ices ranging from c"cles and tractors to insurance policies. O(er F< companies ha(e !ecome partners in the e1choupal to sell their products through the network. SalesE Farmers can sell their crops to the I0C centres or the local market/ after checking the prices on the Bet. e(elopment workE BGOs working for cattle !reed impro(ement and water har(esting/ and women self1help groups are also reaching (illages through e1 choupal. In some states farmers can e(en access their land records online/ sitting in their (illage. $ccess to health and education ser(ices through e1 choupal !egins ne2t month. In man" (illages e1choupals ha(e !ecome the a2is around which the local communit" re(ol(es. )e it for accessing newspapers online in the mornings Cman" (illagers ha(e discontinued their newspaper su!scriptionsD or checking the suppl" of products the" ordered on the Bet/ or watching mo(ies on farming techni6ues in the e(enings/ farmers fre6uent e1choupal at all times of the da". 'ach e1choupal co(ers !etween fi(e and si2 (illages.

M(O/ RI&+ T# SM$%% ST

Indian farmers t"picall" !u" at retail prices and sell their produce at wholesale prices/ losing out on !oth ends of the deal. )" (irtuall" aggregating them/ e1choupal !rings the power of scale to the smallest of farmers. I0C ensures that there are at least two suppliers of all products sold through the e1choupal. Farmers can pool their demand/ compare prices and place orders on the Bet. )argain and choice1two ke" (irtues of competition1 are deli(ered to the farmers right on their doorstep. 5hen it is time to sell the produce/ e1choupal helps the farmers !" !reaking the monopol" of local markets that are controlled !" trade cartels. In most mandis/ farmers are cheated at se(eral stages1ar!itrar" pricing/ under weighing/ dela"ed pa"ments. In =ttar Pradesh/ farmers lose !etween 9+ and F+ per cent of their income to such malpractices. I0C is setting up its own purchase centres in the si2 states co(ered !" e1choupals. 0he farmersO response has !een o(erwhelming. In @++91@/ the compan" purchased A+/+++ metric tonnes of crop through e1choupal. )" @++F1? the purchase increased to @/9+/+++ tonnes and in four months of @++?1</ the compan" picked up 9/;+/+++ tonnes of farm produce. For farmers it is a win1win situation. Sitting in their (illage/ the" can check the pre(ailing purchase price at the mandi and the I0C centre through e1 choupal and sell where(er the" wish to. I0COs entr" into crop purchase in(aria!l" means a rise in mandi rates too/ !enefiting e(en those farmers who canOt sell to I0C. In places where I0C rates arenOt higher than the mandi rates/ farmers are drawn to I0C centres !ecause the compan" uses electronic weighing/ !etter 6ualit" testing and ensures spot pa"ment. IT!<S

- chou,al achievement

ItOs achie(ement E1 C9D1 </+<+ choupals/ @:/<++ (illages/ F.9 million farmers. C@D1 =sing e1choupal to source a range of farm produce Cfoodgrains/ oilseeds/ coffee/ shrimpsD. CFD1 Marketing a (ariet" of goods and ser(ices though e1choupalCagri1inputs/ consumer goods/ insurance/ market researchD. C?D10ransactionsEQ9++ in C@++FD.

STR$T +- $'O(T ' B- #%% #industan %ever to e6,and (roject Sha3ti reachthe rural mar3et:FMCG ma3or -industan .e(er will take its Pro3ect Shakti/ the rural direct1 to1home distri!utor model/ national and reach out to 9++ million people in four "earsO time. 0he pro3ect is at present on in $ndhra Pradesh !ut will !e soon !e rolled out to other remote (illages across the nation. 0he target is to esta!lish access with 9++ million people in F1? "earsO time.0he importance of the pro3ect is rural econom" had immense potential and the" were the consumers of tomorrow. Supported !" micro1credit/ the women from self1help groups were -..Os rural direct1to1home distri!utors. 0he idea !ehind Pro3ect Shakti was to help the compan" reach/ penetrate and communicate with rural consumers. 0he initiati(e !enefited women in more than ?/*<+ (illages.

"ISIO& O. T# (ROJ !T:0he (ision was to change the li(es of women in 9++/+++ (illages !" making them Shakti dealers. 0his would pro(ide economic opportunities for the underpri(ileged while creating a distri!ution and communication channel for !rands to access untapped rural markets with a consumer !ase of 9++ million rural Indians.

STR$T +- $'O(T ' B- !O!O-!O%$

Coca1Cola India dou!led the num!er of outlets in rural areas from ;+/+++ in @++9 to 9A+/+++ in @++F/ which increased market penetration from 9F per cent to @< per cent. It !rought down the a(erage price of its products from Rs 9+ to Rs </ there!" !ridging the gap !etween soft drinks and other local options like tea/ !utter milk or lemon water. It dou!led the spend on cent. It also tapped local forms of entertainment like annual haats and fairs and made huge in(estments in infrastructure for distri!ution and marketing. ResultE the rural market accounts for ;+ per cent of new Coke drinkers and F+ per cent of its (olumes. 0he rural market for Coca1Cola grew at F* per cent o(er the last "ear/ against a @? per cent growth in ur!an areas. Per capita consumption in rural areas has dou!led in the last two "ears. oordarshan/ increased price compliance from F+ per cent to <+ per cent in rural markets and reduced o(erall costs !" ?+ per

0he launch of the Rs < pack has reaped rich di(idends in terms of sales and the !ottles are e2pected to account for <+ per cent of the compan"Os sales in @++F. Coca1Cola is 3ust one e2ample. $ lot of fast1mo(ing consumer goods and consumer electronic companies are aggressi(el" targeting rural consumers. 0he necessit" arose !ecause the growth rates of consumer products were slowing down not !ecause the markets were getting saturated in terms of penetration. 5hile o(erall (olumes continue to grow reasona!l" well/ there are too man" pla"ers eating into each otherOs market share. 0he companies/ therefore/ reduce prices in ur!an areas and in(est hea(il" in sales promotion/ intensif"ing the !attle for market share. 0he companies/ therefore/ reduce prices in ur!an areas and in(est hea(il" in sales promotion/ intensif"ing the !attle for market share. Operating margins come under pressure and new growth markets ha(e to !e e2plored. 0his is where the rural markets pla" an important role. 0he rural market was tempting since it comprised *? per cent of the countr"Os population/ ?9 per cent of its middle class/ <; per cent of its disposa!le income and a large consuming class/ Coca1Cola India C'O San3i( Gupta said. 0oda"/ real growth is taking place in the rural1ur!an markets/ or in the 9F/99F (illages with a population of more than </+++. Of these/ :/:;; (illages are in se(en states 11 =ttar Pradesh/ )ihar/ 5est )engal/ Maharashtra/ $ndhra Pradesh/ >erala and 0amil Badu.

For manufacturers of consumer goods/ these are the markets to look out for. 5hile the 9:;+s saw a !oom in Class I towns with the spread of tele(ision/ the Class II towns showed strong growth in the :+s propelled !" reforms. $ccording to the Bational Council for $pplied 'conomic Research/ the millennium !elongs to the Class III and I# rural1ur!an towns. It estimates that an a(erage rural Indian household will ha(e fi(e ma3or consumer appliances !" @++A/ almost dou!le of what it had fi(e "ears ago. In order to efficientl" and cost1effecti(el" target the rural markets/ the companies will ha(e to co(er man" independent retailers since in these areas/ the retailer influences purchase decisions and stock a single !rand in a product categor". In such an en(ironment/ !eing first on the shelf and de(eloping a pri(ileged relationship with the retailer is a source of competiti(e ad(antage to consumer good companies. Most of the companies ha(e started tinkering with pack si4es and creating new price points in order to reach out to rural consumers since a significant portion of the rural population are dail" wage workers. 0hus/ sachets and miniature packs/ as in the case of shampoo sachets priced at Re 9 and Rs @ or toothpaste at Rs 9+/ ha(e !ecome the order of the da" in hinterland India and help impro(e market penetration. Let/ dri(ing consumption of goods in rural areas is not 3ust a!out lowering prices and increasing (olumes !ut also a!out product inno(ation and de(eloping indigenous products to cater to their demands. For e2ample/ soap makers use ad(anced technolog" to coat one side of the soap !ar with plastic to pre(ent it from wearing out 6uickl". $lso/ the companies need to turn to inno(ati(e methods of ad(ertising like fairs or haats to reach their potential customer !ase.

0wo "ears ago/ man" companies congregated at the Ganges ri(er for the >um!h Mela festi(al/ where a!out F+ million people/ mostl" from rural areas/ were e2pected to come o(er the span of a month. 0he companies pro(ided Otouch and feelO demonstrations and distri!uted free samples. 0his pro(ed to !e e2tremel" effecti(e in ad(ertising to the rural market.

SWOT ANALYSIS FOR THE COLGATE IN RURAL AREAS:

The swot analysis is very important tool for knowing the competitor strategy. The swot analysis for the *olgate in rural areas is given.

STRENGTH:
123 The ualified staff4as company is today dealing with best available staff having good selling techni ues. 153 !trong financial backup. 163 White gel4it provides ma7imum freshness in the mouth and also helps in fighting against bacterial action. 183 White crystals provide instant freshness help in removal of plague. 193 It provides 25 hour protection help in prevention of tender germs.

ORTUNITIES:
123 &arge investment ; as they are easily available with large investment due to their past sales, they can easily fulfill their financial needs or can make huge investment. 153 Intensive distribution ; product they are producing , of nature or the daily usable commodity so the company is using intensive distribution which provides opportunities for the company. 163 !table economic condition ; company is having stable economic condition which helps in boosting the growth of the product.

183 The technology factor being used by *olgate *ompany is at its <+=>. 193 Today the world is becoming a global village ; so taking it is an opportunities.

WEA!NESS:
123 >iant competitors like pepsodent and close up".The company has been facing immense competition from organized as well as unorganized players. ?&& is the closest rival of *olgate with a share of 68@ with its pepsodent and *olgate. 153 ?igh ta7es ; due to highly ta7ation policy the prices of the tube rises which sometimes creates a hurdle in the growth of the company.

THREATS:
123 *hance of failure ; as the company produce different types of paste in *olgate brand like in gel form or in crystal form or the orange gel, so the product is new to the market may be the people accept .the new taste in the toothpaste field or maybe they may reject it . *ompany has no idea of success. 153 'any companies are there to compete the same product in the market. There are high rate of the competition in the market. 163 !ometimes due unstable political condition as the different government provides different subsidies.

RECOMMENDATION ? SUGGESTION 9. $d(ertisements on rural media like radio/ press media has !een increased . @. Ph"sical istri!ution channel must !e made strong. F. $wareness a!out the product must !e increased among the peoples. ?. Profit margin percentage of the product for the retailers should !e increased. <. 0he rural customers are usuall" dail" wage earners and the" don%t ha(e monthl" incomes like the ones in the ur!an areas ha(e. So the packaging is in smaller units and lesser1priced packs that the" can afford gi(en their kind of income streams. colour that attracts him is also important. A. $ difference in the kind of media mi2 that is used to con(e" the messages to the rural customers. 5e need to use different models and 0hen a thing like the

means to reach them as what appeals to the ur!an appeal to him due to (ar"ing lifest"les. 0he So again/ e(en if as it ma" fail to !eing different. the

customer ma" not

communication and the design

of it are also different as what attracts one need not attract the other as well. media reaches him/ there might not !e an impact attract him as fails to connect to it due to the lifest"les

*. Infrastructure like1 road/ electricit" facilit" must !e impro(ed !ecause most of the MBC%s tap the rural market due to such difficulties. ;. In ad(ertising local languages can !e used to attract more and more (iewers. THE CHANGING FACE OF FMCG MARKETING IN RURAL SECTOR FMCG CFast Mo(ing Consumer GoodsD marketing is no more going to !e the same againR 0he changing consumer mindset thanks to more knowledgea!le and discerning customers coupled with changing competition and saturated market is gi(ing a tough time to the FMCG marketers. 0he changed scenario not onl" demands a new game plan with a sharp and decisi(e strateg" !ut also a lot of creati(it" and insight. Some of the pla"ers in Indian FMCG industr" ha(e alread" taken a lead and are smartl" mo(ing to chart a success stor" for their !rands. Some !rands that reaped magnificent di(idend from adopting a new strateg" are Fairever, Ujala, Ghadi detergent/ Chik/ and Dandi namak. 0he greatest challenge for managers is to (isuali4e an acti(e market when what e2ists is a!3ect po(ert". 0hese successful !rands are 3ust doing that1

focusing on untapped markets. 0ake the e2ample of Dandi namak. 5ho would ha(e ad(ised them to enter the !randed salt market when 0ata and -.. (irtuall" share the whole market among themS )ut the" entered this categor" when con(entional wisdom said no. $nd the" !ecame a success stor" o(ernight. .0he" entered the market not to compete with 0ata and -../ !ut with the focus to take !randed salt to rural and semi1ur!an areas. 5ith this narrow focus/ the" not onl" captured a large rural and semi1ur!an market !ut also got some share of the ur!an market due to ru! off effect. Moreo(er/ these small pla"ers full" reali4e that in toda"%s world/ marketing needs mone". So the" don%t sh" awa" from in(esting in marketing. $gain take the e2ample of Dandi namak. 0he" splashed out mone" on their length" 0# commercials to ensure that the message gets ingrained in the mind of the prospect. Fairever and Ujala adopted the same strateg". Of course the" don%t spend as much as the MBCs do !ut the" do spend enough to get attraction. One of the important aspects of the strateg" !eing adopted is effecti(e communication a!out product. . 0ake the case of Dandi namak. 0he 0# ad(ertisement was !land and uninteresting. -owe(er/ without an" glit4/ it was a!le to connect to its target customers !ecause it talked in the language of its target customers. 0hese !rands send a powerful message to their target customers that the" are made for each other.

ADVERTISING IN RURAL INDIA

$dvertising in Rural India: $ dramatic change is in progress. #illagers who used to crack open peanut M K M candies/ eat the nut and throw awa" the shell are now demanding chocolate candies that will melt in their mouths/ not in their hands. Charcoal1cleaned teeth are a rare sight& so is the case with twigs of niim CneemD and bab l C!a!oolD tree. 0oda"/ the ultra !right shine of Colgate or some other international !rand of toothpaste holds more appeal than the traditional methods of cleaning teeth. '(en the nati(e e2pressions of cleaning teeth/ such as daat n karnaa and m saag lagaanaa/ are endangered to !eing replaced !" new e2pressions such as paste karnaa/ Oto !rush teeth with pasteO.

#illages and small towns/ which were once inconse6uential dots on maps/ are now getting the attention of glo!al marketing giants and media planners. 0hanks to glo!ali4ation/ economic li!erali4ation/ I0 re(olution/ Indian female power/ and impro(ing infrastructure/ middle class rural India toda" has more disposa!le income than ur!an India. Rural marketing is gaining new heights in addition to rural ad(ertising !ecause of the following reasonE1 #arious rural media Ccon(entional and non1con(entionalD and integrated

marketing communication. In addition to rural market discourse/ media forms such as wall paintings/ calendar ad(ertising/ outdoor ad(ertising/ print/ radio and tele(ision ad(ertising In particular/ uni6uel" Indian media forms such as (ideo (an technolog"/ which has changed the face of not onl" marketing !ut also political campaigning. Rural markets ChaatD which are the mo!ile Mc onaldOs or 5almarts of India. 0argeting women and religious groups in addition to rural population. Marketing ta!oo products such as O!idiO/ cigarettes/ sanitar" supplies/ and Glo!ali4ation and its effects on product naming/ product monitoring/

other such products

rural discourse and media forms. Creati(it" and deception/ together with guidelines for ad(ertisers and Information structures and logic of rural ads. $ds as a social !arometer of changing relationships and (alue s"stems. marketers.

CONCLUSION 5here the rural market does offer a (ast untapped potential / it should also !e recogni4ed that it is not that eas" to operate in the rural market !ecause of se(eral attendant pro!lems . Rural marketing is thus time consuming affair and re6uires considera!le in(estment in terms of e(ol(ing appropriate strategies with a (iew to tackle the pro!lems . 0he ma3or pro!lems faced !" manufacturing and marketing men in rural areas are descri!ed !elowE1

=> Underdevelo,ed ,eo,le and underdevelo,ed mar3et:0he agriculture technolog" has tried to de(elop the people and market in rural areas . unfortunatel" /the impact of the technolog" is not felt uniforml" through out the countr" .while there are pockets1 some districts in pun3a! / -ar"ana or western =ttar Pradesh where a rural consumer is some what

compara!le to his ur!an counterpart / there are lager areas and groups of people who ha(e remained !e"ond the technological !reak thorough . '(en toda" a!out *< districts in count" are drought prone and none technolog" worth the name has percolated to in crease in the standard of li(ing of these people in addition /the small agricultural land holdings ha(e una!le to take ad(antage of new technological !reakthrough . the num!er of people !elow po(ert" line has not decreased in an" apprecia!le manner. 0hus the rural markets/ !" large num!er/ !" and large are characteri4ed !" underde(eloped market... a (ast of the rural people image old customs tradition ha!its/ ta!oos and practices

?> %ac3 o) ,ro,er ,hysical communication )acilities:Bearl" <+, of the (illages is the countr" do not ha(e (illages in the countr" don%t ha(e all weather roads. Ph"sical communication to these (illages is highl" e2pensi(e. e(en toda" /most (illages is in eastern part toda" inaccessi!le during monsoon season .hence/ distri!ution put in !" manufacturer pro(e e2pensi(e and some times of no conse6uences .to !e effecti(e the products ha(e to !e ph"sicall" mo(ed to places of consumption or places to purchase.

@> Media )or rural communication:$mong the mass media/ at some point of time/ sa" in late <+s or earl" A+s /radio was considered to !e a potential /medium for communication to the rural families . now the ad(ent and e2pansion of telecast network appears for eas" communication with rural masses. 0he 6uestion is how man" people access (iewing tele(isionS 0here is a need to e2amine the ownership pattern

of tele(ision sets in rural areas to 3udge the potential reach of this medium. $nother e mass media is cinema. It has !een o!ser(ed that cinema (iewing is fairl" satisfactor"/ where a(aila!le. Mo!ile theaters are also good medium !ut (er" e2pansi(e companies like -.. using these (ans found 9+ to9@ times higher in rural areas than ur!an areas due to !ad roads in areas.

A> #ierarchy o) mar3ets:Rural consumer has identified market places for different items of their re6uirements. So there can not !e uniform distri!ution pattern for all products. It has !een seen that :+, of farmers (isited the nearest town / where an agricultural produces assem!ling market is situated at least once a 6uarter for either selling the produce or for purchase of there re6uirements. So townI mandi centers with large hinterland (illages !ecome the focal point thus depending upon the purchase ha!it of rural people. 0he distri!ution network for different commodities has to !e different.

@. %o2 level o) literacy:0he literac" rate is low in rural areas as compare to ur!an areas. 0his again lead to the pro!lem of communication for promotion purposes. Print medium !ecomes in effecti(e and to an e2tent irrele(ant in rural areas since its reach is poor and so is the le(el of literac". 0he dependent should !e more on electronic media cinema/ radio and tele(ision. 5hile the e2cess to cinema and radio appears to !e fairl" eas" and common. in not so in case of tele(ision. 0ele(ision ad(ertising is (er" e2pensi(e. Pro!a!le it will !e prudent to take ad(antage of such professional rural ad(ertising agencies.

0he promotion of product along with distri!ution is also !eing resorted to !" man".

A. Seasonal demand:
0he distri!ution of an" product in rural areas agricultural inputs/ consuma!les or dura!le should necessaril" follow a seasonal pattern. Since *<, of the rural income is generated through agricultural operation which is seasonal so the demand pattern is also seasonal. $ t"pical e2ample is that of fertili4ers. 0he demand of fertili4ers is alwa"s high during the start of kharif and Ra!i s"stem the fertili4ers manufacturers ha(e e(ol(ed a distri!ution pattern so that the seasonal demand can !e met. .ike wise the demand for consuma!les and dura!le will !e high during the peek crop har(esting and marketing season. . 0his is the time at which the rural people ha(e su!stantial cash inflows. -ence the distri!ution should !e fairl" intensi(e. uring har(esting season this arrangement would result in ade6uate sales reali4ation (ise (ersa in summer months the demand will !e (er" low festi(als seasons like sankranti/ poangal/ (aisakhi or depawali are also demand seasons. So the distri!ution of rural areas should !e more and fre6uent during the har(est and festi(al seasons as opposed to a fairl" uniform demand pattern in ur!an areas.

B. Many languages and dialects: '(en assuming that media are a(aila!le for communication or the compan" commit its own media (ans the large num!er of languages and dialects (er" wildl" from statue to state and reason to reason. 0he messages ha(e to !e deli(ered in local& languages and dialects. '(en though the num!er of

recogni4ed languages is onl" 9A/ the num!er of dialects is estimated to !e around ;<+.

C. %o2 ,er ca,ita income:

'(en though a!out FF to F< percent of gross domestic product is generated !" rural areas. It is shared *<, of population hence the per capita income is low compared to ur!an areas. 0his apart the distri!ution of income is highl" is skewed. Since the land holding patterned itself is skewed thus the rural population present a highl" heterogeneous seen. .Gi(en the low per capita incomes and population spread in the (illages/ what will !e the off take of an" product !" rural consumer/ sa" from a (illage shopS 5hat should !e the in(entor" le(els to !e maintained !" a rural shopkeeper and how long will it take for the rural areas shopkeeper to li6uidate his stockS If a compan" opts to distri!ute the products up to (illage these aspects re6uire (er" careful consideration while e(ol(ing distri!ution strategies for rural markets.

O((ORTU&ITI S .OR 'I.. R &T .M!+ M&!1s The Indian rural mar3et 2ith its vast si*e and demand base o))ers a huge o,,ortunity that M&!s cannot a))ord to ignore :0O e2pand the market !" tapping the countr"side/ more and more MBCs are fora"ing into IndiaOs rural markets. $mong those that ha(e made some headwa" are -industan .e(er/ Coca1Cola/ .G 'lectronics/ )ritannia/ Standard .ife/ Philips/ Colgate Palmoli(e and the foreign1in(ested telecom companies.

O,,ortunity :0he Indian rural market with its (ast si4e and demand !ase offers a huge opportunit" that MBCs cannot afford to ignore. 5ith 9@; million households/ the rural population is nearl" three times the ur!an. $s a result of the growing affluence/ fuelled !" good monsoons and the increase in agricultural output to @++ million tons from 9*A million tonnes in 9::9/ rural India has a large consuming class with ?9 per cent of IndiaOs middle1class and <; per cent of the total disposa!le income. 0he importance of the rural market for some FMCG and dura!le marketers is underlined !" the fact that the rural market accounts for close to *+ per cent of toilet1soap users and F; per cent of all two1wheeler purchased. 0he rural market accounts for half the total market for 0# sets/ fans/ pressure cookers/ !ic"cles/ washing soap/ !lades/ tea/ salt and toothpowder/ 5hat is more/ the rural market for FMCG products is growing much faster than the ur!an counterpart.

The A$ a,,roach
0he rural market ma" !e alluring !ut it is not without its pro!lemsE .ow per capita disposa!le incomes that is half the ur!an disposa!le income& large num!er of dail" wage earners/ acute dependence on the (agaries of the monsoon& seasonal consumption linked to har(ests and festi(als and special occasions& poor roads& power pro!lems& and inaccessi!ilit" to con(entional ad(ertising media. -owe(er/ the rural consumer is not unlike his ur!an counterpart in man" wa"s. 0he more daring MBCs are meeting the

conse6uent challenges of a(aila!ilit"/ afforda!ilit"/ accepta!ilit" and awareness Cthe so1called ? $sD

$vailability
0he first challenge is to ensure a(aila!ilit" of the product or ser(ice. IndiaOs A@*/+++ (illages are spread o(er F.@ million s6 km& *++ million Indians ma" li(e in rural areas/ finding them is not eas". -owe(er/ gi(en the poor state of roads/ it is an e(en greater challenge to regularl" reach products to the far1 flung (illages. $n" serious marketer must stri(e to reach at least 9F/99F (illages with a population of more than </+++. Marketers must trade off the distri!ution cost with incremental market penetration. O(er the "ears/ IndiaOs largest MBC/ -industan .e(er/ a su!sidiar" of =nile(er/ has !uilt a strong distri!ution s"stem which helps its !rands reach the interiors of the rural market. 0o ser(ice remote (illage/ stockiest use auto rickshaws/ !ullock1 carts and e(en !oats in the !ackwaters of >erala. Coca1Cola/ which considers rural India as a future growth dri(er/ has e(ol(ed a hu! and spoke distri!ution model to reach the (illages. 0o ensure full loads/ the compan" depot supplies/ twice a week/ large distri!utors which who act as hu!s. 0hese distri!utors appoint and suppl"/ once a week/ smaller distri!utors in ad3oining areas. .G 'lectronics defines all cities and towns other than the se(en metros cities as rural and semi1ur!an market. 0o tap these une2plored countr" markets/ .G has set up ?< area offices and <: ruralIremote area offices.

$))ordability

0he second challenge is to ensure afforda!ilit" of the product or ser(ice. 5ith low disposa!le incomes/ products need to !e afforda!le to the rural consumer/ most of who are on dail" wages. Some companies ha(e addressed the afforda!ilit" pro!lem !" introducing small unit packs. Godre3 recentl" introduced three !rands of Cinthol/ Fair Glow and Godre3 in <+1gm packs/ priced at Rs ?1< meant specificall" for Madh"a Pradesh/ )ihar and =ttar Pradesh T the so1called U)imaruO States. -industan .e(er/ among the first MBCs to reali4e the potential of IndiaOs rural market/ has launched a (ariant of its largest selling soap !rand/ .ife!uo" at Rs @ for <+ gm. 0he mo(e is mainl" targeted at the rural market. Coca1Cola has addressed the afforda!ilit" issue !" introducing the returna!le @++1ml glass !ottle priced at Rs <. 0he initiati(e has paid offE 'ight" per cent of new drinkers now come from the rural markets. Coca1 Cola has also introduced Sun fill/ a powdered soft1drink concentrate. 0he instant and read"1to1mi2 Sun fill is a(aila!le in a single1ser(e sachet of @< gm priced at Rs @ and mutiser(e sachet of @++ gm priced at Rs 9<.

$cce,tability
0he third challenge is to gain accepta!ilit" for the product or ser(ice. 0herefore/ there is a need to offer products that suit the rural market. One compan" which has reaped rich di(idends !" doing so is .G 'lectronics. In 9::;/ it de(eloped a customi4ed 0# for the rural market and christened it Sampoorna. It was a runwa" hit selling 9++/+++ sets in the (er" first "ear. )ecause of the lack of electricit" and refrigerators in the rural areas/ Coca1 Cola pro(ides low1cost ice !o2es T a tin !o2 for new outlets and thermocol !o2 for seasonal outlets.

0he insurance companies that ha(e tailor1made products for the rural market ha(e performed well. - FC Standard .IF' topped pri(ate insurers !" selling policies worth Rs F.< crore in total preemie. 0he compan" tied up with non1go(ernmental organi4ations and offered reasona!l"1priced policies in the nature of group insurance co(ers.

$2areness:5ith large parts of rural India inaccessi!le to con(entional ad(ertising media T onl" ?9 per cent rural households ha(e access to 0# T !uilding awareness is another challenge. Fortunatel"/ howe(er/ the rural consumer has the same likes as the ur!an consumer T mo(ies and music T and for !oth the ur!an and rural consumer/ the famil" is the ke" unit of identit". -owe(er/ the rural consumer e2pressions differ from his ur!an counterpart. Outing for the former is confined to local fairs and festi(als and 0# (iewing is confined to the state1owned oordarshan. Consumption of !randed products is treated as a special treat or indulgence. -industan .e(er relies hea(il" on its own compan"1organi4ed media. 0hese are promotional e(ents organi4ed !" stockiest. Godre3 Consumer Products/ which is tr"ing to push its soap !rands into the interior areas/ uses radio to reach the local people in their language. Coca1Cola uses a com!ination of 0#/ cinema and radio to reach <F.A per cent of rural households. It dou!led its spend on ad(ertising on oordarshan/ which alone reached ?9 per cent of rural households. It has also used !anners/ posters and tapped all the local forms of entertainment. Since price is a ke" issue in the rural areas/ Coca1Cola ad(ertising stressed its UmagicalO price point of Rs < per !ottle in all media..G 'lectronics uses (ans and road shows to reach rural customers. 0he compan" uses local

language ad(ertising. Philips India uses wall writing and radio ad(ertising to dri(e its growth in rural areas. 0he ke" dilemma for MBCs eager to tap the large and fast1growing rural market is whether the" can do so without hurting the compan"Os profit margins. Mr. Carlo onati/ Chairman and Managing1 irector/ Bestle/ while admitting that his compan"Os product portfolio is essentiall" designed for ur!an consumers/ cautions companies from plunging headlong into the rural market as capturing rural consumers can !e e2pensi(e. P$n" generali4ationP sa"s Mr. onati/ Pa!out rural India could !e wrong and one should focus on high G P growth areas/ !e it ur!an/ semi1ur!an or rural.

LIMITATIONS OF THE STUDY 7 0he stud" is !ased totall" on the primar" data as well as secondar" data and such data relates to something of the past and not the e2act present scenario. -ence totall" depending on such gi(en data could at times !e misleading/ that is no matter how good the report is one has to do certain amount of homework !efore 3umping to conclusions on the !asis of such stud". Marketing acti(it" is something that is ne(er sta!le and is constantl" changing with the changing circumstances/ e(er changing rules and regulations that control these acti(ities. -ence something which is (er" up1 to1date as of now might !ecome o!solete in a (er" short span of time. One has to !e (er" cautious !efore taking an" decision !ased on such data and has to think !e"ond what is gi(en. Bo amount of data can !e accurate enough to gi(e the desired results.

$nother ma3or draw!ack with respect to the stud" of Scope Of Rural Marketing For FMCG Compan" In India is that it is something that has !een here for the past few "ears onl" and hence tr"ing to get much information regarding it is also difficult/ and whate(er little that is a(aila!le has to !e taken note of and !elie(ed into. Onl" a few studies on the topic are a(aila!le and hence (er" few facets of it can !e seen. $ lot more can !e known a!out it !ut at a later stage when it has grown in proportions and is more fre6uentl" used !" the (arious MBC%s for increasing their market share and lot of competition increases among the MBC%s and the ur!an market is saturated. SCOPE OF THE FURTHER RESEARCH

0he rural India offers a tremendous market potential. $ mere one percent increase in India%s rural income translates to a mind1!oggling Rs 9+/+++ crore of !u"ing power. Bearl" two1thirds of all middle1income households in the countr" are in rural India. $nd close to half of India%s !u"ing potential lies in its (illages. 0hus for the countr"%s marketers/ small and !ig/ rural reach is on the rise and is fast !ecoming their most important route to growth. Reali4ing this Corporate India is now in(esting a si4ea!le chunk of its marketing !udget to target the rural consumers.

Increasing brand a2areness

In the rural families/ studies indicate a slow !ut determined shift in the use of categories. 0here is a remarka!le impro(ement in the form of products used. For instance/ households are upgrading from indigenous teeth1cleaning ingredients to tooth powder and tooth1pastes/ from traditional mos6uito

repellant to coils and mats. 0here is also a (isi!le shift from local and un!randed products to national !rands. From low1priced !rands to premium !rands.

(rice ,romotion
In an occasional effort to capture (olume sale/ multinational !rands use price promotions that often "ield dramatic/ if temporar"/ sales increases in the rural areas. 0heir large (olume increases re(eal a potentiall" large market in the (illages that remains untapped/ 3ust !elow the actual price points. 0o penetrate this market and generate sustaina!le (olume sales/ a permanent product entr" at the lower price point is re6uired. Failure to recogni4e the potentiall" huge market of the (illages that lies !elow the surface of international price points can e(en place the premium !randed !usiness at risk

.M!+ consum,tion
Organi4ations like -industan .e(er .td./ Birma Chemical 5orks/ Colgate Palmoli(e/ Parle foods and Malhotra Marketing ha(e car(ed inroads into the heart of rural markets. #arious categories of products ha(e !een a!le to spread their tentacles deep into the rural market and achie(ed significant recognition in the countr" households. $nd/ in the process/ the regional !rands/ local !rands and the other un!randed offerings got displaced !" the leading !rands.

Co8,()= HLL N%"8( c+'8%c( 1o"D$ Co 9(-' P( 8o %E' P(" ' Foo*$

Ho!$' +o * ,')'-"(-%o) CA> @A> ;;> ;2>

C(-'9o"= 0($+%)9 c(D'$4F("$

> Eo !8' o. oc( F"()*$4!)F"()*'* CA>

T'( S( -

@@> ;;>

Of the e2penditure on consumer goods in rurahousehold/ appro2imatel"/ ??, is on food articles such as !iscuits/ tea/ coffee and salt/ @+, on toiletries/ 9F, on washing material/ 9+, on cosmetics/ ?, on O0C products and :, on other consuma!les. $ num!er of categor" products ha(e esta!lished themsel(es firml" in the rural households. It is e(ident that in the (illages low1priced !rands are well accepted and one might feel that a larger proportion of the purchases made in rural market can !e attri!uted to localI un!randed pla"ers. Surprisingl"/ howe(er/ the un!randedIlocal component contri!utes to a su!stantial portion of the (olume of onl" a few of the highl" penetrated categories. C(-'9o"= To% '- So(, 0($+%)9 c(D'$4B("$ E* F ' o% T'( 0($+%) ,o1*'" 4 C(-'9o"= P')'-"(-%o) B"()* 1%-+ +%9+'$,')'-"(-%o) G2>L%.'F!o= CC>0+'' C<>Do!F ' I"() M!$-("* BB>L%,-o) T(&&( B3>N%"8(

%H!%* S( B%$c!%-$ A<>T(-( S( A2>P(" ' G

.ocus on urban categories

0hough the commodit" products ha(e greater penetration/ traditionall" ur!an categories such as skin creams and talcum powder ha(e also made a mark. 5hile the ur!an talcum powder market suffered a de1growth/ the rural talcum powder market darted ahead. Similarl"/ growth of rural skin cream market was at par with that of ur!an skin cream market. 0his clearl" indicated that after !eing considered ur!an for a long time/ some categories are now wearing a rural face. $nd/ in man" a case/ it is the rural market that is actuall" dri(ing the growth of categor".

(remium brands
Pond%s is the leader in the talcum powder categor" with a penetration of A<, and (olume contri!ution of <A,. Its ri(als (i4. B"cil and .iril are trailing far !ehind. Moreo(er/ A+, of the Pond%s users ha(e purchased no other !rand i.e. the" are 9++, !rand lo"al. 0his reflects the strength of the !rand in rural !a4aar

C(-'9o"= SD%) C"'(8 T( co8 Po1*'"

Ho!$'+o * P')'-"(-%o) 2C> 2@>

In the skin care categor"/ Fair K .o(el" fairness cream/ with a penetration of *<,/ accounts for A+, of the skin care market in rural India. It also en3o"s t he undistinguished patronage of <;, of its user households. )oth Pond%s and Fair K .o(el" are en3o"ing a monopol" in the rural markets In their respecti(e categories. Rural India is not a(erse to tr"ing out the premium !rands at high prices. $ stud" indicated that a ma3orit" of the premium !rand users are using the !rand for the first time. Similarl" +.:, of the talcum powder1using families ha(e started using enim talc and +.*, of the shampoo using households started using Pantene. Sur(e"s also re(eal that trials are not restricted to the more affluent echelon of the (illages. 0he e2perimenting households are more1or1less e(enl" spread across the (arious socio1economic clusters of the rural market. 0his should further encourage the marketers to focus their attention on rural !u"ers. )rand Surf $riel Pantene Penetration of Categor" users A.@+, ?.<+, 9.;+,

enim

9.;+,

0he rural "ouths are more open to fresh concepts as against their elderl" famil" mem!ers. 0heir difference in choice of productsI!rands with the seniors of the households often leads to a 7dual1usage8 of product categories. $s an instance/ @+, of the households using tooth powder also use tooth paste. Similarl"/ man" of the households using premium !rands also use mass market !rands. For e2ample/ while 9<, of Surf and 9@, of $riel using families also use Birma detergent/ F, of enim users use Pond%s ream flower talc and 9;, of Pantene using households use Clinic shampoo as well.

Income gro2th goes into consum,tion

In ur!an households there are a num!er of competing demands for ones mone". In rural households/ the" hardl" change their house or go out on a (acation. 0he" sa(e onl" a small fraction of his mone" and spend the rest. $nd when there is a growth in their income/ the mone" goes straight into consumption.

Rural media

=r!an consumers shop dail" and ha(e FA< opportunities a "ear to switch !rands while the rural purchasers who !u" their goods in weekl" haats ha(e onl" <?. $ttempts to reach rural consumers/ e(en once during the purchase c"cle to ensure repeat purchase/ make point of purchase ad(ertising and trade push indispensa!le. 0his re6uires a significant reorientation in the allocation of funds across media. For e2ample/ outdoor ad(ertising accounts for o(er *, of all media e2penditures in India. Rural !u"ers li(ing in small isolated groups distri!uted across (ast distances ha(e limited access to the !roadcast media. 0he e2istence of a multiplicit" of languages and (ar"ing le(el of illiterac" complicates the task of communication further. 0o o(ercome some of these challenges/ =nile(er pioneered the concept of (ideo (ans that tra(el from (illage to (illage screening films in the local language/ interspersed with ad(ertisements for =nile(er%s pack ma" products. 0he compan" also pro(ides product usage demonstrations to the capti(e audience !ecause written instructions on the

Buality consciousness
It will !e un3ustified to think that rural consumers are less !othered a!out product 6ualit". '(en the (illage !u"ers desire to !u" a 6ualit" product and upgrade their 6ualit" of life. Marico/ an Indian edi!le oil compan"/ has found the rural consumers in the interior of India willingl" pa" a reasona!le price premium for !randed cooking oil/ o(er communit" oil/ !ecause the" are certain of its consistent 6ualit". =n!randed products are often considered !" some of them to !e adulterated.

Travails in distribution
In spite of recogni4ing the potential of this (ast market of *++ million/ marketers are often una!le to cater to it !ecause of lack of ade6uate infrastructure. 0he distances !etween (illages/ the terrain and the lack of pucca roads connecting the places act as impediments for them to reach their customers. )ut once if the" o(ercome these hassles and reach those remote !a4aars to !e first on the shelf in the product categor"/ the" de(elop a pri(ileged relationship with the retailer that offers them a tremendous competiti(e ad(antage. Rural retailers are far less speciali4ed than their ur!an counterparts and carr" a wider range of products. Since fre6uent deli(er" is not possi!le in their part of the world/ the" tend to carr" onl" a single !rand in each product categor". $nd/ usuall"/ the !rands that are first on the rural shel(es !ecome s"non"mous with product categor" and are difficult to dislodge. For instance/ Maggie noodles/ the !rand that created the categor" of instant noodles/ reached the rural shel(es !efore an"one else and remained the market leader e(er since. 0hus/ a dri(e down the rugged countr"side/ sans electricit" and other modern facilities/ is/ surel"/ torturous. )ut the pain is worth !earing.

(re)erence )or %o2 Unit (ac3s :%U(;

0rial is often encouraged !" .ow =nit Packs C.=PD or sachets. 0he sachet packaging strateg" caught the popular FMCG imagination in the earl" 9::+s and it was considered as a !reakthrough in the ps"che of the rural consumers. 0oda"/ the sachets are increasingl" dominant on shel(es. Shampoo/ for instance/ has in(aded the rural households with sachets at low

afforda!le prices. Sachets of tea/ !lues and washing powder are !eing launched in a !ig wa" in the (illage hats !" leading manufacturers. Companies like -.. and Marico are making concrete efforts to create and then meet the demand of rural consumers !" launching products in small afforda!le packs.

!hannel ,o2er
0he rural consumers interact directl" with their retail salespersons who has a strong con(iction power and whose recommendations carr" weight. 0he owners% relationship with customers is !ased on an understanding of their needs and !u"ing ha!its and is cemented !" the retailer e2tending credit. Some of the successful manufacturers creati(el" de(elop new re(enue acti(ities for the rural retailer. =nited Phosphorous .imited C=P.D/ an Indian crop protection compan"/ reali4ed that in its rural markets small farmers were not appl"ing pesticide at all/ or appl"ing it inappropriatel" due to the lack of application e6uipment. 0he capital cost of the e6uipment Cmounted pumps and dispensers that cost up to QF+++D was placed out of reach of small farmers and most rural retailers. =P. designed a program in which it arranged for !ank loans for its rural retailers to purchase application e6uipment and demonstrated to their retailers the additional re(enue possi!ilities from renting this e6uipment to small farmers. 0he result was an added re(enue stream for rural retailers.

/ider com,etition )or a ,roduct

Man" of the rural !u"ers tend to ha(e little stock of mone"/ onl" a flow. Conse6uentl"/ the" tend to make purchases onl" to meet their dail" needs and ha(e little capacit" to !uild in(entor". 0he marketing implications of this are far1reaching. Bot onl" are pack si4es and price points affected/ !ut in turns out that consumers ha(e to make a selection from a much wider arra" of product categories. 0hus the nature of competition for an" gi(en product is much !roader. For instance/ in a (illage hat/ Coca Cola competes not 3ust with Pepsi/ !ut with a !road set of purchases that the rural consumers consider as 7treats8.

BIBLIOGRAPHY

)usiness maga4inesE InternetE

)usiness 0oda" www.Indiainfoline.com www.Google.com www. Censusindia.com www.-...com

)usiness ailiesE

0he 'conomic 0imes )usiness Standard

Stud" !ooksE Ramaswam"

Marketing Management1 Philip kotler Marketing Management1 ( s

S Bamakumari.

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