Project Report

On
EMERGING TREND IN MORDEN RETAIL FORMAT
WITH SPECIAL REFERENCE TO HUL (SHAKTI), ITC
(E-CHAUPAL) & GODREJ (ADHAAR)

CONTENTS

Chapter 1. Introduction & Background

1.1 Company Profile
1.2 Objective of the Project

Chapter 2. Research Methodology & Design

Chapter 3. Research Findings
Chapter 4. Conclusion
Chapter 5. Limitations
Chapter 6. Suggestion
References
Books
Web sources

Chapter 1

Introduction

Introduction
From the strict marketing point of view, the market structure in India is dichotomous
having rural and urban markets. But many do not concur with this view as they contend
that consumer everywhere is a consumer and hence their needs, aspirations, beliefs and
attitudes will also be the same. The fact, however, remains that there are certain unique
characteristic features which call for separate marketing strategies to be distinctively
developed

to

suit

the

rural

and

urban

market

behaviour.

Conditions existing in urban markets at present can also be analyzed in this context. First,
the urban markets have almost reached a saturation level that further tapping them with a
high profit margin has become difficult. Secondly, competition is becoming tough in
urban markets compelling many firms to incur heavy costs in promotional expenditure.
Thirdly, the awareness level of urban consumers is high and hence product features have
to be changed often. Needless to say this process needs a huge investment which will
have a negative impact on profitability. Thus, except perhaps for easy reach the urban
markets

Significance

have

become

of

Rural

as

oasis.

Markets

The rural markets are estimated to be growing fastly compared to the urban markets. The
potentiality of rural markets is said to be like a 'woken up sleeping giant'. These facts are
substantiated in a study of market growth conducted by various researches. In recent
years, rural markets have acquired significance in countries like China and India, as the
overall growth of the economy has resulted into substantial increase in the purchasing
power of the rural communities. On account of the green revolution in India, the rural
areas are consuming a large quantity of industrial and urban manufactured products. In
this context, a special marketing strategy, namely, rural marketing has taken shape.
Sometimes, rural marketing is confused with agricultural marketing the later denotes
marketing of produce of the rural areas to the urban consumers or industrial consumers,
whereas rural marketing involves delivering manufactured or processed inputs or services

to

rural

producers

or

consumers.

A number of factors have been recognized as responsible for the rural market boom to
come
1.

into
Increase

in

existence:

population

and

hence

increase

in

demand.

2. A marked increase in the rural income due to agrarian prosperity.

3.

Standard

of

living

is

also

increasing

in

rural

areas.

4. Large inflow of investment for rural development programmes from government and
other

sources.

5. Increased contact of rural people with their urban counterparts due to development of
transport

and

wide

communication

network.

6. Increase in literacy and educational level and resultant inclination to sophisticated lives
by

the

rural

folks.

7. Inflow of foreign remittances and foreign made goods into rural areas.
8. Change in the land tenure systems causing a structural change in the ownership
patterns

and

consequent

changes

in

the

buying

behaviour.

9. Rural markets are laggards in picking up new products. This will help the companies to
phase their marketing efforts. This will also help to sell inventories of products out dated
in

urban

markets.

Rural market has following arrived and the following facts substantiate this.

What

makes

742

Estimated
FMCG

Durables

2
In

4
LIC

tractors)

sold

55

the

market
Crores

5,000

Crores

Rs.
of

rural

65,000
Rs.

wheelers

Attractive?
people

of

Rs.
(incl.

2001-02,

size
Rs.

Agri-inputs

Markets

million
annual

Rural

its

45,000
8,000
policies

Crores
Crores

in

rural

India.

* Of two million BSNL mobile connections, 50% in small towns/villages.

* Of the six lakh villages, 5.22 lakh have a Village Public Telephone (VPT)
* 41 million Kisan Credit Cards issued (against 22 million credit-plus-debit cards in

urban) with cumulative credit of Rs. 977 billion resulting in tremendous liquidity.
* Of 20 million Rediffmail signups, 60 % are from small towns. 50% transactions from
these

towns

on

Rediff

online

shopping

site

* 42 million rural HHs availing banking services in comparison to 27 million urban HHs.
* Investment in formal savings instruments: 6.6 million HHs in rural and 6.7 million in
urban

Opportunities: In Rural Marketing

Infrastructure

is

improving

rapidly.

- In 50 years only 40% villages connected by road, in next 10 years another 30%.
- More than 90 % villages electrified, though only 44% rural homes have electric
connections.
- Rural telephone density has gone up by 300% in the last 10 years; every 1000+ pop
is
*

connected
Social

Indicators

by

have

improved

STD.
lot

between

1981

and

2001

- Number of "pucca" houses doubled from 22% to 41% and "kuccha" houses halved
(41%
-

to

Percentage

Rural

of

BPL

Literacy

23%)
families

level

declined

improved

from

from

46%
36%

to
to

27%
59%

* Low penetration rates in rural so there are many marketing opportunities.

Durables

Urban

CTV

Shampoo
Toothpaste

Total

30.4

Refrigerator
FMCGs

Rural

of

4.8
33.5

Urban

(%

Rural
66.3
82.2

HH)

12.1
3.5

Total

rural

(%
35.2
44.9

12.0
of

rural
44.2
55.6

HH)

* Marketers can make effective use of the large available infrastructure

-

Post

offices

Haats

(periodic

Melas

Mandis

Public

1,

markets)

(exhibitions)
(agri

Bank

42,000

markets)

distribution

38,000
25,000
-

shops

branches

7,000
3,

80,000
32,000

* Proliferation of large format rural retail stores which have been successful also.
-

DSCL
M

&

TATA/Rallis

Escorts

Warnabazaar,

Haryali

Maharashtra

stores

Shubh

Labh

stores

Kisan

Kendras

rural

stores

(annual

sale

Rs.

40

crores)

EMERGING TRENDS IN MARKETS

ONLINE

RURAL

MARKET

(INTERNET,

NICNET):

Rural people can use the two-way communication through on line service for crop
information, purchases of Agri-inputs, consumer durable and sale of rural produce
online at reasonable price. Farm information online marketing easily accessible in
rural areas because of spread of telecommunication facilities all over India.
Agricultural information can get through the Internet if each village has small
information

office.

INFORMATION THROUGH LOCAL AGRICULTURE

INPUT

DEALERS

Most of the dealers have direct touch with the local farmers; these farmers need
awareness about pests, decease, fertilizers, seeds, technology and recent
developments. For this information, farmers mostly depend on local dealers. For
development of rural farmers the government may consider effective channel and
keep information at dealers, for farmer education hang notice board and also train the
dealer

recent

changes

and

developments

in

agriculture.

National Chain Stores: large number of stores set up in different rural areas
throughout the country by the same organization for marketing its products. Thus
national chain stores can serve large number of customers in rural area.

COST

BENEFIT

ANALYSIS

Cost benefit can be achieved through development of information technology at the

doorsteps of villagers; most of the rural farmers need price information of agriproduce and inputs. If the information is available farmers can take quick decision
where to sell their produce, if the price matches with local market farmer no need to
go near by the city and waste of money & time it means farmers can enrich their
financial

NEED

strength.

BASED

PRODUCTION

Supply plays major role in price of the rural produce, most of the farmers grow crops
in particular seasons not through out the year, it causes oversupply in the market and
drastic price cut in the agricultural produce. Now the information technology has
been improving if the rural people enable to access the rural communication, farmers
awareness can be created about crops and forecasting of future demand, market taste.

Farmers can equates their produce to demand and supply, they can create farmers
driven market rather than supply driven market. If the need based production system
developed not only prices but also storage cost can be saved. It is possible now a days
the

concept

of

MARKET

global

DRIVEN

village.

EXTENSION

Agricultural extension is continuously going through renewal process where the focus
includes a whole range of dimensions varying from institutional arrangements,
privatization, decentralization, partnership, efficiency and participation. The most
important change that influences the extension system is market forces. There is a
need for the present extension system to think of the market driven approach, which
would

cater

the

demands

PROCESSING

of

farmers.

INDUSTRY

India is the second largest producer of fruits and vegetables in the world with an
annual production of more than 110 million tones of fruit and vegetable only 1.3
percent of the output is processed by the organized sector commercially, the reason
higher consumption in fresh form. However, as the packaging, transportation and
processing capacities increase, the market for processed fruits and vegetables is
projected to grow at the rate of about 20 % per annum. 100 % export oriented units
(EOU) and Joint venture units required improving the processing industry.

APANAMANDI

KISAN

MANDI

RYTHUBAZAAR

There is a need to promote direct agricultural marketing model through retail outlets
of farmer's co-operatives in urban areas. The direct link between producers and
consumers would work in two ways: one, by enabling farmers to take advantage of
the high price and secondly, by putting downward pressure on the retail prices.

RURAL

AGRI-

EXPORT

Rural produce, raw fruits and vegetable, processing goods, have the potential market
in Asian, Europe and western countries. Particularly soudhy countries have
commendable

potential

for

Indian

rural

produce.

Integrated

Marketing

Under this concept, both the supply of inputs and servicing of inputs are undertaken
at the same point or by the same company.

Classification of Customers
India 1

India 2

India 3

Consuming Class

Serving Class

Struggling class

Constitutes only 14 % of

Includes

people

like

It

the countrys population

drivers,

house

hold

existence,

Most of these customers

helpers,

have

liftmen, washer man etc.

good living.

disposable income and

These people make life

Unfortunately

they form part of usually

easier

more

segment will continue to

called

comfortable

the

be on the peripheries of

middle and the lower

consuming class or India

the consumption cycle in

middle class

1.

India, in years to come.

as

substantial

the

upper

office

peons,

and
for

lives

hand-to-mouth
so

can

afford to even aspire for

Research indicates that

for every India one at
least three India Twos are
there, making up approx.
55 % of the population
but due to low income
they have a very little
disposable
spend

income
on

aspirational

to

buying
goods

&

services .
Source: Future Group Research, Published in the Book It Happened in India by
Kishore Biyani, 2007 issue.

not

this

Emerging Trends in Modern Retail Formats:

It is difficult to fit a successful international format directly and expect a similar
performance in India. The lessons from multinationals expanding to new geographies
also point to this. For example, Wal-Mart is highly successful in USA but the story is
different in Asian countries like China. Therefore, it is important for a retailer to look at
local conditions and insights into the local buying behavior before shaping the format
choice. Considering the diversity in terms of taste and preferences prevailing in India, the
retailers may go for experimentation to identify the winning format suited to different
geographies and segments. For example, the taste in south is different from that in north
and this brings challenges to the retailers. Therefore, most of grocery retailers are region
centric at this point in time. The available research findings on retail indicate the
following trends in Modern Retail formats:
1) Trial & Error: Now a number of retailers are in a mode of experimentation
and trying several formats which are essentially the representation of retailing
concepts to fit into the consumer mind space. Apart from geography even rural
and urban divide poses different kind of challenge to the retailer. Pantaloon Retail
India is experimenting with several retail formats to cater to a wide segment of
consumers in the market. Some of the new formats are Fashion Station (popular
fashion), Blue Sky (fashion accessories), aLL (fashion apparel for plus-size
individuals), Collection i (home furnishings), Depot (books & music) and E-Zone
(Consumer electronics).
2) Emergence of Wholesale Clubs: Since retailers are trying to segment the
market with the help of formats, they developed another new format in the form
of Wholesale Club to sell a segment of consumers, who purchase on bulk and
look out for substantial discounts and offers. The new format is going to be a kind
of wholesale club which is likely to be located close to Food Bazaar. Consumers
who are interested to purchase on bulk can take benefit from this format.
Similarly the Land mark group also operates multiple formats such as
hypermarket (Max), departmental store (Lifestyle), Shoe mart and Funcity8 etc.

Such experimentation and identification of an appropriate format for the local

conditions would separate winners from losers in India, possibly implying
multiple formats could be the reality in the long run. Pantaloon Retail India Ltd is
a live example of that in Indian scenario.

3) Increasing Acceptance of Rural Markets: Mall-mania is phenomenal in

India and is spreading fast and entering even the second tier cities in India. Real
estate developers are jumping very fast to take this further from Metro cities to
smaller cities and corporate houses like ITC and Sriram group are making steady
progress to make this phenomena feasible in rural markets as well. There is no
denying that the top notch cities like Mumbai, Delhi, Bangalore, Hyderabad,
Kolkata, Chennai and Pune are leading the way but the second tier cities like
Ludhiana, Chandigarh, Nagpur and Surat are also catching the eye of all retailers.
Retail developers are in such a mood that they may over ride the requirement in a
specific city.
4) Govt. is also promoting the Development of Modern Retail

Formats: Large format malls are increasingly getting prominence with adequate
retail space allocated to leisure and entertainment. Some states like Punjab have
lifted entertainment tax on multiplexes till 2009. This boosted the confidence of
the mall developers to accommodate entertainment players like PVR, Waves,
Adlab and Fun Republic in large malls.
5) Efficient Buying: Increasing Importance of Supermarkets &

Discount Stores: Such a format provides the greatest selection of any general
merchandize and very often serves as the anchor store in shopping mall or
shopping centre. In India, the number of department stores is less as compared to
other retail formats such as supermarkets and discount stores. Shoppers' Stop is
the first one to open a department store in the early 1990s and currently operates
19 stores in 10 different cities in India .The store strongly focuses on lifestyle
retailing and mainly divides into five departments such as apparel, accessories,

home dcor, gift ideas and other services. Shoppers Stop is getting stronger and
stronger year after year. It attracts more than 12 million shoppers every year with
a conversion rate of 38 per cent. In the end of FY2000 this retailer had 5 stores
and is in the process of reaching 39 stores with retail space of 2,502,747 sq ft by
FY08.
Another operator Lifestyle India began operations in 1998 with its first store in
Chennai in 1999 and in March 2006 it opened one of the largest department stores in
the same city. The store spreads over 75,000 sq. ft and store provides customers a
great shopping experience with three floors of apparel, footwear, products for
children, household furniture and decor, health and beauty products.
6) Hypermarkets: The Biggest Crowd Puller: Hypermarkets have emerged
as the biggest crowd pullers due to the fact that regular repeat purchases are a
norm at such outlets. Hypermarkets not only offer consumers the most extensive
merchandise mix, product and brand choices under one roof, but also create
superior value for money advantages of hypermarket shopping. With product
categories on offer ranging from fresh produce and FMCG products to
electronics, value apparels, house ware, do it yourself (DIY) and outdoor
products, the hypermarkets are emerging as one of the popular formats in India..
Number of players operating hypermarket format are increasing day by day. One
of the leading players in this format is Pantaloon Retail India Limited which
operates 32 Big Bazaars in twenty cities. In early 2006, the K. Raheja Corp (C.L.
Raheja Group) has introduced its value retail concept hyper city which is the
countrys largest hypermarket at 118000 sq ft. hyper city Retail plans to open 55
hypermarkets by 2015. As the market is expanding and consumers are in a mood
to accept changes, hypermarkets are getting overwhelming response from
consumer. Currently there are about 40 odd hypermarkets in India but this format
holds a great potential for growth.
7)

Customers still rely on traditional concepts: A super market normally

sells grocery, fresh, cut vegetables, fruits, frozen foods, toiletries, cosmetics, small
utensils, cutlery, stationery and Gift items. In India Food World, Food Bazaar,
Nilgiri (30 plus stores), and Adani are the leading super market operators .One of

the biggest super market operators in the western India is Adani Retail Limited
which operates Adani super market plans to continue its journey to reach total 19
cities with the store strength of 60 plus in the state of Gujarat. ARL also plans to
expand its operation in the neighboring states of Rajasthan, Madhya Pradesh,
Maharashtra and Chhattisgarh.
Subhiksha is one of the leading super market operators, who largely operates in the
southern part of India is expanding to western India. One more retailer Reliance
Retail is on the move and this retailer opened its Reliance Fresh-a super market chain
with 11 stores in Hyderabad in November 2006 and is planning to enter 70 more
cities within 2 years.
8) Emergence of Private-Label Brands: The private labels are offering
flexibility to both the retailer and the consumer on price front. The objective of
the store is to offer variety at affordable price in each category. Food Bazaar have
made the transition from just a grocery retailer to developing emotional bonding
with shoppers by providing some value added services to the shoppers. Some of
these initiatives include : ( Jo Dikhta Hai wo hi Bikta Hai )
Live chakki: which allows customers to buy fresh wheat and have it grinded there
at the store
Fresh Juice counter: This provides customer to have fresh juices.
Live dairy: This provides customers with fresh milk and milk products.
Live kitchen: Customers have the option of buying vegetables, getting them
chopped, cooked fully or partly. Soups, salads and sandwiches are also available at live
kitchen.
9) Ease of Shopping & Customized Services: Order of the Day: To

activate it a new format has emerged in the name of Convenience

Store. A Convenience store offers locational advantage to the shoppers and
provides ease of shopping and customized service to the shoppers. It charges
average to above average prices, depending on the product category and carries a
moderate number of stock keeping units (SKUs). Normally it remains open for
long hours and shoppers use it for buying fill-in merchandize and emergency

purchases. In India, Convenience stores occupied 23 thousand sq. meter of retail

space with sales of about Rs 1347 million in 2005 and are expected occupy 85
thousand square meter of selling space by 2010 .
10) Magnetic Effect: Discounters not Shopkeepers : Wal-Mart, the largest
retailer in the world is a discounter. Practically the discounters offer several
advantages such as lower price, wider assortment and quality assurance. The
discounters like Wal-Mart and Aldi were able to quickly build scale and pass on
the benefits to the consumer. However, in the long run success depends on the
operational efficiency and consistent value delivery to the consumer. The same
retailer Wal-Mart struggles in Asian countries like China but extremely successful
in USA. It is believed that the average Indian consumer is highly price-sensitive
and looks for savings in term of money in their grocery purchase. So price-value
equation is a critical component in most of the grocery purchases.
11) Category Killer: A New Concept imported from U.S.: The category
killer concept originated in the U.S. due to abundance of cheap land and the
dominant car culture. Category Killer is a kind of discount specialty store that
offers less variety but deep assortment of merchandise. By offering a deep
assortment in a category at comparative low prices, category specialist can be able
to kill that specific category of merchandize for other retailers. Generally such
kind of retailers uses a self service approach. They use their buying power to
negotiate low prices, excellent terms and assured supply when items are scarce. In
India this kind of retail stores are not prevalent at this point of time. But there is
scope for such kind of format. In India, Mega-Mart is one sort of category killer
which sells apparel products.
12) Dollar Stores: Dollar stores have their roots in America's homey five-anddimes, the general stores that offered a range of products at low prices. But
modern dollar-store retailers are having more sophisticated operations; leveraging
their growing buying power to strike special deals with vendors and continuously
striving for unique advantage of both convenience and price. Some chains sell all
their goods at $1 or less. Others offer selected items at higher prices. Most sell a
combination of paper products, health and beauty supplies, cleaning products,

paper and stationery, household goods, toys, food and sometimes clothing. Both
private-label and brand-name goods fill the shelves. They are looking for
employing technology to manage large distribution networks. Store 99 is the
example of it in Indian Scenario.
13) Retail Development in Rural India: A Market with Silver lining :
Chennai based market research firm Francis Kanoi estimated the size of the rural
market to be INR 1, 08,000 crore annually. During the survey in 2002 the firm
took into account four categories - FMCG, durables, agri-inputs, and two- and
four-wheelers for their estimation. Rural incomes are growing steadily as well.
NCAER data shows while the number of middle-class households (with annual
income between Rs 45,000 and Rs 2.15 lakh) is at 16.4 million in urban India, the
figure stands at 15.6 million18 in the rural areas, data from. Largely this rural
market is untapped and there is huge opportunity for retailers.

Recent Developments in Rural Retailing: Therefore, in recent times rural

retailing is witnessing explorations by both corporate houses and entrepreneurs ITC's
Choupal Sagar, HLL's project Shakthi and Mahamaza are some of the models being tried
out. At this juncture there is no conclusive evidence of winning rural retail formats
available. However, corporate forays into rural retail are expected to bring more
experimentation and innovation in term of retail format. The Godrej Adhaar, the rural
retail initiative of Godrej Agrovet Ltd operates a chain of 18 stores providing a host of
services to farmers and their families and is planning to set up at least 1,000 stores19
across rural India in the next five years. Apart from Godrej Adhar and Choupal Sagar
other formats operating successfully in the rural area are, M & M Shubh Labh stores,
Escorts rural stores, Tata Kisan Sansar, and Warnabazaar, Maharashtra (annual sale Rs 40
crore).

DSCL Haryali Kisan Bazaar

Hariyali stores keep wide range of product assortments such as fertilizers, pesticides,
farm implements, seeds, animal feed and irrigation equipment among other agriculture
related products. They also have officers who offer free advices to farmers regarding best
agriculture practices. Offering insurance and financial services to farmers is part of the
business. So far, 22 "Hariyali" Stores have been operational in different states across

North India. Farmer response has been extremely encouraging. A centre is attracting 150
- 200 farmers a day. Hariyali Kisaan Bazaar has plans to rapidly scale up the operations
& create a national footprint covering all the major agricultural markets of the country.

Mahindra & Mahindra Shubh Labh

This is the rural initiative taken by Mahindra & Mahindra group to provide complete
package of products and services related to firm productivity. One of the basic objectives
is to establish market linkage and optimize farm produce supply chain. There are about
franchised Shub Labh store established in ten states in India.

14: e-Retailing: The importance of internet retailing is growing all over the world.
Some internet retailers such as e Bay and rediff.com are providing a platform to vendors
to sell their products online and they do not take the responsibility of delivering the
product to buyer. They provide virtual shopping space to the vendors. On the other hand
online retailers like amazon.com and walmart.com have to maintain their warehouse to
stock products and take the responsibility of delivering products to the buyer. So, most of
the brick and mortar stores are entering into online retailing as they have physical
infrastructure and they can use that to capture additional consumer wallet. All the big
retailers like Target, Sears and Kmart are operating online shop and some manufactures
also operate online.
For example Apple Inc. operates through apple.com and Dell Inc. sells its products online
Through dell.com.
In India internet retailing is growing by 29% CAGR and Euro-monitor report estimates
that the a CAGR 48 per cent and in value term it going to touch INR 27 billion by 2010
from INR 4 billion in 2005. The report also predicts that the contribution of internet
retailing to non-store retailing to is likely to be 46 per cent by 2010.
Emerging recent developments in the Indian Mall Development scenario include the
coming up of so called Gen X Malls and Central which is a Seamless Mall. Gen X
Malls have been defined Chesterton Megharaj as greater than 5, 00,000 sq.ft and
incorporate large entertainment area with enough space for parking and excellent
infrastructural benefit that shall be passed on to the retailer . The target audience for
the Gen X malls is tourist /out of town visitor and the person from the city looking for

entertainment options. So, we can say that we are moving from a nation of Dukandars
to a Nation that loves to shop.

After 1991: This post-economic reform period evidenced both setbacks and progress.
Rural income poverty increased from 34% in 1989-90 to 43% in 1992 and then fell to
37% in 1993-94. Urban income poverty went up from 33.4% in 1989-90 to 33.7% in
1992 and declined to 32% in 1993-94 Also, NSS data for 1994-95 to 1998 show little or
no poverty reduction, so that the evidence till 1999-2000 was that poverty, particularly
rural poverty, had increased post-reform. However, the official estimate of poverty for
1999-2000 was 26.1%, a dramatic decline that led to much debate and analysis. This was
because for this year the NSS had adopted a new survey methodology that led to both
higher estimated mean consumption and also an estimated distribution that was more
equal than in past NSS surveys. The latest NSS survey for 2004-05 is fully comparable to
the surveys before 1999-2000 and shows poverty at 28.3% in rural areas, 25.7% in urban
areas and 27.5% for the country as a whole, using Uniform Recall Period Consumption.
The corresponding figures using the Mixed Recall Period Consumption method was
21.8%, 21.7% and 21.8% respectively. Thus, poverty has declined after 1998, although it
is still being debated whether there was any significant poverty reduction between 198990 and 1999-00. The latest NSS survey was so designed as to also give estimates roughly,
but not fully, comparable to the 1999-2000 survey. These suggest that most of the decline
in rural poverty over the period during 1993-94 to 2004-05 actually occurred after 19992000.

In summary, the official poverty rates recorded by NSS are:

Year

Round

Uniform Poverty
Rate (%)

Poverty
Mixed (%) Reduction
year(%)

1977-78

32

51.3

1983

38

44.5

1.3

1987-88

43

38.9

1.2

1993-94

50

36.0

0.5

1999-00

55

2004-05

61

per

Mixed
Reduction (%)

26.9

27.5

21.8

0.8

1.0

HUL (SHAKTI)

Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods
Company, touching the lives of two out of three Indians with over 20 distinct categories
in Home & Personal Care Products and Foods & Beverages. The companys Turnover is
Rs. 20, 239 crores (for the 15 month period January 1, 2008 to March 31, 2009).
HUL is a subsidiary of Unilever, one of the worlds leading suppliers of fast moving
consumer goods with strong local roots in more than 100 countries across the globe with
annual sales of 40.5 billion in 2008. Unilever has about 52% shareholding in HUL.
Hindustan Unilever was recently rated among the top four companies globally in the list
of Global Top Companies for Leaders by a study sponsored by Hewitt Associates, in
partnership with Fortune magazine and the RBL Group. The company was ranked
number one in the Asia-Pacific region and in India.
The mission that inspires HUL's more than 15,000 employees, including over 1,400
managers, is to add vitality to life". The company meets everyday needs for nutrition,
hygiene, and personal care, with brands that help people feel good, look good and get
more out of life. It is a mission HUL shares with its parent company, Unilever, which
holds about 52 % of the equity.
Heritage
HULs heritage dates back to 1888, when the first Unilever product, Sunlight, was
introduced in India. Local manufacturing began in the 1930s with the establishment of
subsidiary companies. They merged in 1956 to form Hindustan Lever Limited (The
company was renamed Hindustan Unilever Limited on June 25, 2007). The company
created history when it offered equity to Indian shareholders, becoming the first foreign
subsidiary company to do so. Today, the company has more than three lakh resident
shareholders.
HULs brands -- like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Sunsilk,
Clinic, Close-up, Pepsodent, Lakme, Brooke Bond, Kissan, Knorr, Annapurna, KwalityWalls - are household names across the country and span many categories - soaps,
detergents, personal products, tea, coffee, branded staples, ice cream and culinary
products. They are manufactured in over 35 factories, several of them in backward areas
of the country. The operations involve over 2,000 suppliers and associates.HUL's
distribution network covers 6.3 million retail outlets including direct reach to over 1
million.

HUL has traditionally been a company, which incorporates latest technology in all its
operations. The Hindustan Lever Research Centre (now Hindustan Unilever Research
Centre) was set up in 1958.
Doing Well by Doing Good
HUL believes that an organisations worth is also in the service it renders to the
community. HUL focuses on hygiene, nutrition, enhancement of livelihoods, reduction of
greenhouse gases and water footprint.It is also involved in education and rehabilitation of
special or underprivileged children, care for the destitute and HIV-positive, and rural
development. HUL has also responded in case of national calamities / adversities and
contributes through various welfare measures, most recent being the relief and
rehabilitation of the people affected by the Tsunami disaster, in India.
Project Shakti was launched in the year 2001 in the Nalgonda district situated in
Andhra Pradesh.HULs Project Shakti is a rural initiative that targets small villages
populated by less than 5000 individuals. Through Shakti, HUL is creating microenterprise opportunities for rural women, thereby improving their livelihood and the
standard of living in rural communities. Shakti also provides health and hygiene
education through the Shakti Vani programme.The program now covers 15 states in
India and has over 45,000 women entrepreneurs in its fold, reaching out to 100,000
villages and directly reaching to over three million rural consumers.
HUL also runs a rural health programme, Lifebuoy Swasthya Chetana. The programme
endeavours to induce adoption of hygienic practices among rural Indians and aims to
bring down the incidence of diarrhoea. It has already touched 120 million people in
approximately 50, 676 villages across India.
If Hindustan Unilever straddles the Indian corporate world, it is because of being singleminded in identifying itself with Indian aspirations and needs in every walk of life.
The recruitment of a Shakti Entrepreneur or Shakti Amma (SA) begins with the
executives of HUL identifying the uncovered village. The representative of the
company meets the panchayat and the village head and identify the woman who
they believe will be suitable as a SA. After training she is asked to put up Rs
20,000 as investment which is used to buy products for selling. The products are
then sold door-to-door or through petty shops at home. On an average a Shakti
Amma makes a 10% margin on the products she sells.
It is the association between the company and the self help groups and financial
institutions.
The Shakti Entrepreneur programme creates income- generating capabilities for
underprivileged rural women by providing them with a sustainable microenterprise
opportunity.

* The Shakti Vani programme improves rural quality of life by spreading

awareness
of
best
practices
in
health
and
hygiene.
* The iShakti community portal tries to empower rural communities by creating
access to relevant information.
Objective of Shakti program
The Shakti entrepreneur program
underprivileged rural women.

creates

livelihood

opportunities

for

The Shakti Vani program works to improve the quality of life in rural India, by
spreading awareness of best practices in health and hygiene.
They are also studying the consumption habits of the rural people.

HOW IT WORKS

Villages with a population of about 20003000 are selected

Personnel from HUL approach SHGs

Selection of the Shakti Amma

HUL vouches for Shakti Ammas with banks for credit

one Shakti entrepreneur

is appointed for one village &

Villages that are about 2 kilometres
apart from her village
(satellite villages ).

The Shakti dealer places initial orders worth Rs. 15,000/(principal customer of
HUL)
Finance : Self+SHG+micro credit

Training by the Rural sales promoter.

The Shakti dealer organizes, a Shakti Day in the village (display of products &
free gifts )

Core Brands: Lifebuoy, Wheel, Pepsodent, Annapurna salt, Clinic Plus, Lux,
Ponds, Nihar and 3 Roses tea.

Vision 2010
100,000

Entrepreneurs

500,000 villages
600 million Consumers
Shakti shall reach every home in every village, create sustainable livelihood
opportunities, and enhance the quality of life in rural India
Future plans

Project Shakti plans to extend to the states of West Bengal, Punjab and Rajasthan.
Partnership with other non-competitor companies to sell their products through
the Shakti network.

Nippo, TVS Motor for mopeds, insurance companies for LIC policies.

ITC E-chupal
ITC was incorporated on August 24, 1910 under the name Imperial Tobacco Company of
India Limited. As the Company's ownership progressively Indianised, the name of the
Company was changed from Imperial Tobacco Company of India Limited to India
Tobacco Company Limited in 1970 and then to I.T.C. Limited in 1974. In recognition
of the Company's multi-business portfolio encompassing a wide range of businesses Cigarettes & Tobacco, Hotels, Information Technology, Packaging, Paperboards &
Specialty Papers, Agri-business, Foods, Lifestyle Retailing, Education & Stationery and
Personal Care - the full stops in the Company's name were removed effective September
18, 2001. The Company now stands rechristened 'ITC Limited'.
ITC is one of India's foremost private sector companies with a market capitalisation of
nearly US $ 19 billion and a turnover of over US $ 5 billion.* ITC is rated among the
World's Best Big Companies, Asia's 'Fab 50' and the World's Most Reputable Companies
by Forbes magazine, among India's Most Respected Companies by BusinessWorld and
among India's Most Valuable Companies by Business Today. ITC ranks among India's
`10 Most Valuable (Company) Brands', in a study conducted by Brand Finance and
published by the Economic Times. ITC also ranks among Asia's 50 best performing
companies compiled by Business Week.
ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers,
Packaging, Agri-Business, Packaged Foods & Confectionery, Information Technology,
Branded Apparel, Personal Care, Stationery, Safety Matches and other FMCG products.

While ITC is an outstanding market leader in its traditional businesses of Cigarettes,

Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining market share even
in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel, Personal
Care and Stationery.
As one of India's most valuable and respected corporations, ITC is widely perceived to be
dedicatedly nation-oriented. Chairman Y C Deveshwar calls this source of inspiration "a
commitment beyond the market". In his own words: "ITC believes that its aspiration to
create enduring value for the nation provides the motive force to sustain growing
shareholder value. ITC practices this philosophy by not only driving each of its
businesses towards international competitiveness but by also consciously contributing to
enhancing the competitiveness of the larger value chain of which it is a part."
ITC's diversified status originates from its corporate strategy aimed at creating multiple
drivers of growth anchored on its time-tested core competencies: unmatched distribution
reach, superior brand-building capabilities, effective supply chain management and
acknowledged service skills in hoteliering. Over time, the strategic forays into new
businesses are expected to garner a significant share of these emerging high-growth
markets in India.
ITC's Agri-Business is one of India's largest exporters of agricultural products. ITC is one
of the country's biggest foreign exchange earners (US $ 3.2 billion in the last decade).
The Company's 'e-Choupal' initiative is enabling Indian agriculture significantly enhance
its competitiveness by empowering Indian farmers through the power of the Internet. This
transformational strategy, which has already become the subject matter of a case study at
Harvard Business School, is expected to progressively create for ITC a huge rural
distribution infrastructure, significantly enhancing the Company's marketing reach.
ITC's wholly owned Information Technology subsidiary, ITC Infotech India Ltd, provides
IT services and solutions to leading global customers. ITC Infotech has carved a niche for
itself by addressing customer challenges through innovative IT solutions.

ITC's production facilities and hotels have won numerous national and international
awards for quality, productivity, safety and environment management systems. ITC was
the first company in India to voluntarily seek a corporate governance rating.
ITC employs over 26,000 people at more than 60 locations across India. The Company
continuously endeavors to enhance its wealth generating capabilities in a globalising
environment to consistently reward more than 3,47,000 shareholders, fulfill the
aspirations of its stakeholders and meet societal expectations. This over-arching vision of
the company is expressively captured in its corporate positioning statement: "Enduring
Value.

For

the

nation.

For

the

Shareholder."

Rural market E CHUPAL

Before ITC introduced us to e-Choupal, we were restricted to selling our produce in the
local mandi. We had to go through middlemen and prices were low. ITC trained me to
manage the Internet kiosk and I became the e-Choupal Sanchalak in my village. Today
we are a community of e-farmers with access to daily prices of a variety of crops in India
and abroad this helps us to get the best price. We can also find out about many other

important things weather forecasts, the latest farming techniques, crop insurance, etc. eChoupal has not only changed the quality of our lives, but our entire outlook.

e-Choupal

Now

States covered

10

Villages covered

40,000

No. of e-Choupals

6,500

Farmers e-empowered

4 million

A powerful illustration of corporate strategy linking business purpose to larger societal

purpose, e-Choupal leverages the Internet to empower small and marginal farmers who
constitute a majority of the 75% of the population below the poverty line.
By providing them with farming know-how and services, timely and relevant weather
information, transparent price discovery and access to wider markets, e-Choupal enabled
economic capacity to proliferate at the base of the rural economy.
Today 4 million farmers use e-Choupal to advantage bargaining as virtual buyers
co-operatives, adopting best practices, matching up to food safety norms. Being
linked to futures markets is helping small farmers to better manage risk. e-Choupal
has been specially cited in the Government of Indias Economic Survey of 2006-07,
for its transformational impact on rural lives.The network of 6,500 e-Choupal
centres spread across 40,000 villages has emerged as the gateway of an expanding
spectrum of commodities leaving farms wheat, rice, pulses, soya, maize, spices,
coffee, aqua-products. The reverse flow carries FMCG, durables, automotives and
banking services back to villages

ITC has continued to build new infrastructure by supplementing the farmgate presence of
e-Choupal with new physical infrastructure rural marketing hubs called Choupal
Saagars, positioned within tractorable distance of 30 e-Choupal centres and their user
communities.
The e-Choupal Choupal Saagar hub and spoke combination is unprecedented grassroots
click and mortar infrastructure transporting rural local economies to a new level of
productivity and consumption.
Choupal

Saagars

offer

combination

of

services

to

rural

India.

Made-to-design agri-business hubs, they function as:

1. ITC agri-sourcing centres providing farmers a transparent best price sales
window,
2. shopping centres bringing a range of products comparable to urban levels of
choice, and
facilitation centres delivering a host of farm-related services training, soil testing,
product quality certification, medical and clinical services, cafeteria and fuel station. 24
Choupal Saagar hubs are already in operation in 3 states, to grow to 100 by 2010
ITCs strategic intent is to develop e-Choupal as a significant two-way multidimensional
delivery channel, efficiently carrying goods and services out of and into rural India. By
progressively linking the digital infrastructure to a physical network of rural business

hubs and agro-extension services, ITC is transforming the way farmers do business, and
the way rural markets work
e Choupal is an initiative of ITC Limited (a large multi business conglomerate in India)
to link directly with rural farmers for procurement of agricultural / aquaculture produce
like soybeans, wheat, coffee, and prawns. eChoupal was conceived to tackle the
challenges posed by the unique features of Indian agriculture, characterized by
fragmented farms, weak infrastructure and the involvement of numerous intermediaries

Springboard for competitive farming

The digital and physical infrastructure has a third dimension. It galvanises ITCs constant
agency for propagating adoption of best practices in farming and soil and water
management.
In 2006-07, ITCs unique paid Choupal Khet Pradarshan farm extension service
conducted over 15,000 Field demonstrations in 9 states. This continuous interaction
sustains the rising tide of productivity channeled by the click and mortar infrastructure.
The 1 million tons of wheat sourced by ITC over e-Choupal strategically supporting its
packaged foods business makes e-Choupal robust and open, a successful application of
business logic to serve a larger cause.

Effects of eChoupal
ITC Limited has now established computers and Internet access in rural areas across
several agricultural regions of the country, where the farmers can directly negotiate the
sale of their produce with ITC Limited. The PCs and Internet access at these centres
enable the farmers to obtain information on mandi prices, good farming practices and
place orders for agricultural inputs like seeds and fertilizers. This helps farmers in
improving the quality of produce, and also helps in realizing a better price. Each ITC
Limited kiosk having an access to Internet is run by a sanchalak a trained farmer. The
computer housed in the sanchalaks house is linked to the Internet via phone lines or by a
VSAT connection and serves an average of 600 farmers in the surrounding ten villages
within about a 5 km radius. The sanchalak bears some operating cost but in return earns

service fee for the e-transactions done through his eChoupal. The warehouse hub is
managed by the same traditional middle-men, now called samyojaks, but with no
exploitative power due to the reorganised role. Indeed these middlemen make up for the
lack of infrastructure and fulfill critical jobs like cash disbursement, quantity aggregation
and transportantion.
Due to the eChoupal services, farmers have seen a rise in their income levels because of
rise in yields, improvement in quality of output and a fall in transaction costs. Even small
farmers have gained from the initiative. Customized and relevant knowledge is offered to
the farmers despite heterogeneous cultures, climates and scales of production. Farmers
can get real-time information despite their physical distance from the "mandis". The
system saves procurement costs for ITC Limited. The model is quite different from the
other models, as the farmers do not pay for the information and knowledge they get from
eChoupals. The principle of the eChoupals is to inform, empower and compete. At the
same time ITC Limited also has extracted value in four steps to make the model
sustainable and scalable:
1. elimination of non-value added activities
2. differentiated product through identity preserved supply chains
3. value added products traceable to farm practices
4. e-market place for spot transactions and support services to futures exchange
One of the factors leading to eChoupal's success is ITC's managerial expertise in
executing complex projects and managing costs. ITC Limited adopted a flexible project
management approach called "roll out, fix it, and scale up" to deal with uncertainties in a
pioneering model.
There are 6,500 eChoupals today. ITC Limited plans to scale up to 20,000 eChoupals by
2012 covering 100,000 villages in 15 states, servicing 15 million farmers.

Critical problem

Mission Sunehra Kal, ITCs rural capacity building programme, now

active

in

11

States,

empowers

rural

communities

to

adopt

sustainable changes that make them economically competitive and socially secure.
In the rural communities where the mission has put down roots there is a new spirit of
optimism and confidence. People have augmented and diversified their livelihoods.
Education for children, employment for women, sanitation and family health have taken
on a new urgency. Every family and every farm has resources to build a better future.
Stagnation and deterioration have given way to change and improvement.
To accomplish this change, ITC targets four problems, which it believes are the
fundamental obstacles to productivity and growth in the farm sector :
1. Loss of productivity through soil erosion caused by intensification of land use and
decline of water tables and forest resources.
2. Dependence on out-moded farm practices and inferior inputs.

3. Loss and disruption of farm incomes and non-availability of alternative

livelihoods.

ITCs mission is to build community based capacity to remove these

adverse

conditions

and create the basis for renewed agrarian prosperity:

help farmers to achieve higher farm productivity,

enable communities to develop and manage water, soil and forest resources for
long term ecological security,

empower rural men and women by creating new non-farm livelihoods,

facilitate development of infrastructure for primary education, health

ITC enables farmers to implement solutions that are sustainable because they are
1. mutually reinforcing,
2. based on knowledge transfer and co-operative application of technology,
3. dependent on mobilisation and optimisation of local resources.
The delivery model mobilises a four-way partnership between village communities,
specialist NGOs, the Government and ITC, bringing to every initiative the best relevant
management and technical expertise.
ITC has also worked with State Governments in pioneering public-private partnerships.
In Andhra Pradesh, 3,596 hectares of wasteland have been developed so far through a
collaboration with the State Governments rural poverty reduction project, Indira Kranthi
Padham, and its Comprehensive Land Development programme. ITC has also signed a
landmark agreement with the Government of Rajasthan to bring 5,000 hectares under soil
and moisture conservation in the drought-prone Bhilwara district.
By augmenting water resources and forest cover and fostering organic soil management,
ITC has enhanced farm productivity. It has simultaneously opened up new avenues of
non-farm income and employment to reduce pressure on land.

Godrej Aadhar
Godrej Group is one of the largest conglomerates based in Mumbai, India, involved in
various industries that include appliances, precision equipment, machine tools, furniture,
healthcare, interior solutions, office equipment, food-processing, security, materials
handling and industrial storage solutions, construction and information technology. Its
products include security Systems and Safes, Typewriters and Word processors, Rocket
Launchers, Refrigerators and Furniture, Outsourcing Services, Machine Tools and
Process Equipment, Cosmetics and Detergents, Engineering Workstations, Medical
Diagnostics and Aerospace Equipment, Edible Oils and Chemical, Mosquito Repellents,
Car perfumes, Chicken and Agri-products, Material Handling Equipments Like
FORKLIFT Trucks, Stackers, Tyre handlers, Sweeping machines, access equipments etc.
The Group is headed by Mr. Adi Godrej & Mr. Jamshyd Godrej.
Traditionally, Vikhroli, a suburb to the Northeast of Mumbai has been Godrej's
manufacturing base, but increasingly the group have moved significant production
facilities away from Mumbai. The Godrej group also owns vast land in Vikhroli,
occupying 3500 acres (14 sq km) of land on both sides of the Vikhroli section of the LBS
marg. That makes the Godrej group the biggest private land owner in Mumbai by far[citation
needed]

. Such vast land can, in theory, be used to create at least 1500 acres of residential

floor space, which, at very modest rates (Rs.10000/sq ft), can be sold for USD 16 billion .
Thus, the Godrej group is sitting on an invisible cashpile that is envy of other Indian
conglomerates.

Aadhar Retailing

agri-services to direct sourcing from farmers, Aadhar Retailing is now getting into the
business of output management with farmers across the country. With the Future Group
owing a 70 per cent stake in Godrej Aadhar, the newly formed company, Aadhar, would
now serve as a procurement hub for the Future Groups retail formats such as Food
Bazaar and KBs Fair Price and even become supplier to other retailers across the
country.
Mr Arvind Chaudhary, Chief Executive Officer, Aadhar Retailing, told Business Line,
We have now started buying the farmers produce and getting into the business of output
management. With the intention of selling the farmers produce to other retailers, we
would be adding one crop after another and help them in managing their produce, stated
Mr Chaudhary.
Reaching out to 50,000 farmers every month, the company has already employed 300
people to directly access the produce of farmers across 2,000-odd villages in the country.
The States where farmers are being approached include Punjab, Haryana, Maharashtra
and Gujarat.
With the Future Groups cash-and-carry format on the backburner, sourcing from farmers
and helping them sell their produce to other retailers is being seen as an extension of the
same format by analysts.
Not wanting to be compared with ITCs e-Choupal, Aadhar Retailing believes it would
operate in the business of providing solutions for farmers. We would operate on a
different model from e-Choupal as we would be advising farmers on what to produce and
giving services such as soil testing and weather prediction facilities. The purpose is to
become a one-stop-shop in the rural areas, says Mr Chaudhary.

Fresh inputs
Meanwhile, the existing 66 Godrej Aadhar outlets would also be stocking the Future
Groups private labels and financial products to extend its current portfolio. New brands

such as Koryo (for consumer durables) and food brands such as Tasty Treat and Fresh N
Pure would be making an appearance at the Aadhar outlets.
Besides, with the Future Group having forged strategic alliances with players such as
GlaxoSmithKline to develop the Gopika brand of ghee, its outlets would also see the
brand making an appearance at Aadhar outlets. Financial products, such as insurancebased products of Future Generalli, would also get sold at the outlets.
Besides, there is also a possibility of the Future Card (the Future Groups loyalty cum
credit card) being introduced.

Corporate details
Adi Godrej is the current Chairman of the Godrej Group. Godrej & Boyce Mfg. Co. Ltd.
is headed by Mr. Jamshyd Godrej. The Group revenue was approximately US$ 1.7 billion
in financial year 06/07. Godrej Interio is the flagship company of the group.
The Godrej group can be broadly divided into two major holding companies, working
independently:
1. Godrej Industries Ltd.
2. Godrej & Boyce Mfg. Co. Ltd.
The Major Companies, subsidiaries and affiliates are

Chemical & Commodities

Godrej Industries
Chemicals
Veg Oils

FMCG
Godrej Consumer Products

 Keyline Brands UK
Rapidol South Africa
Godrej Global Mideast FZE
Godrej SCA Hygiene Limited
Godrej Hershey Foods & Beverages Limited

Nutrine

Godrej Sara Lee

AGRI
Godrej Agrovet
Animal Feeds
Goldmohur Foods and Feeds
Golden Feed Products
Higashimaru Feed Products
Oil Palm
Agri Inputs
Godrej Aadhaar
Nature's Basket
Integrated Poultry Business
Plant Biotech

Services

Godrej HiCare (Pest Management Services)

Godrej Global Solutions (ITES)

Godrej Properties

Achievement

In 1897, Godrej Introduced the first lock with lever technology in India.

In 1902, Godrej made the first Indian safe.

In 1920, Godrej made soap using vegetable oil, which was a huge hit with the
vegetarian community in India

In 1955, Godrej produced India's first indigenous typewriter

In 1989, Godrej became the first company to introduce PUF ( Polyurethane

Foam)

Introduced India's first and only 100% CFC, HCFC, HFC free refrigerators

Godrej Agrovet

Godrej Agrovet (GAVL) is a diversified agribusiness company with interests in animal

feed, oil palm plantations, agrochemicals and poultry.It is headquartered at Vikhroli,
Mumbai India. The business was set up in 1971. GAVL today has 45 manufacturing
facilities across India, a network of over 10,000 rural distributors, dealers & agents
and over 1900 employees committed to improving the lives of Indian farmers. The
company has a presence in 21 states.Under the guidance of Chairman, noted
industrialist Nadir Godrej and its Cheif Executive Officer Balram Singh Yadav ,
GAVL today occupies the position of India's largest animal feed company, producing
over 750,000 tons of nutritionally balanced feed for diary cattle, poultry &
aquaculture every year.
Its oil palm plantation business is the market leader in India, with over 35,000 hectares of
smallholder cultivation across Andhra Pradesh, Karnataka, TamilNadu, Orissa,
Goa,

Gujarat

&

Mizoram.

With the intend of radically improving farmer economics, the agrochemicals

business focuses on innovative and environmentally sensitive products.It has
dominant market share in plant growth promoters & soil conditioners.
GAVL has introduced fresh, chilled chicken to Indian consumer over the past decade, and
now has a 20% market share in processed poultry. Its Real good chicken brand is
the best known fresh poultry product in India, with a consumer loyalty about 80%.
The Rs 900 crore Godrej Agrovet Ltd, a unit of the $1 billion Godrej Industries Ltd, will
open 1,000 'hub-and- spoke' centres in rural and semi-urban areas across the country in
the next five years.
These centres will also provide technical services like farm management, soil micronutrient analyses to farmers. The hub would cover about 10,000 sq ft and spoke 3,000 sq
ft, each costing about Rs 75 lakh and Rs 30 lakh respectively.
These outlets will sell agro-products like seeds, pesticides, fertilisers and grocery,
apparel, footwear, home appliances, furniture and kitchen appliances. It will also house
banks, insurance offices, pharmacies, post offices and petrol pumps.

R S Vijan, executive vice-president, Godrej Agrovet, said: "We have decided to expand in
rural and semi-urban markets. We will open 100-120 stores in the country in this financial
year and these centres would be funded and managed by the company itself."
Godrej Agrovet posted a turnover of Rs 900 crore in 2005-06 and is expecting revenues
of Rs 3,500-4,000 crore from these stores in the next five years.
At present, it has 24 Aadhaar centres in Maharashtra, Punjab, West Bengal, Orissa and
Tamil Nadu. It has earmarked Rs 750 crore to train technical and marketing staff.
Godrej Agrovet is a key player in the farm segment with a large presence in cattle and
poultry feed. It covers the whole spectrum of poultry business -- from breeding and
hatching broilers to the marketing of its branded chicken. The company also has foothold
in animal feeds, agricultural inputs and palm oil, and retail presence in urban areas
through Nature's Basket. The animal feed segment constitutes about 75% of the
company's revenues; almost 10% comes from poultry and the remaining from the rest of
the businesses.
Recently, the firm signed a deal with Apollo Pharmacy, part of the Apollo Hospitals
group and the country's largest retail pharmacy chain, to give medical support to the
farming community.Earlier in January, in a bid to strengthen its hold on the farmer,
Godrej Aadhaar had launched two new formats. The large format stores have been
opened at Mancher and Alephata on the Pune-Nashik highway in Maharashtra, taking the
Aadhaar tally to 18 nationally.
To increase its rural reach, Godrej Agrovet, which set up Aadhaar a year ago, is now
moving away from being a standalone outlet to hub and spoke model.

Aadhaars Structure
(Agri. section)

Store In-Charge (S I)

Technical Service Incharge (T S I)

Field Service Assistance (F S A)

Farmer (Target Customer)

Benefit of Multinational companies in Rural Market

RURAL INDIA with its traditional perceptions has grown up over the years, not only in
terms of income, but also in terms of thinking. The rural markets are growing at about
two time faster pace than urban markets, not surprisingly, rural India accounts for 60 per
cent of the total national demand.
According to a survey conducted by Mckinsey in 2007, rural India with a population of
630 million (approximately) would become bigger than total consumer market in
countries such as South Korea or Canada in another 20 years and it will grow at least four
times from its existing size.
Gone are the days when rural consumer went to nearby city to buy branded products and
services. The rural consumer is growing and this is an opportunity to grab the market
share for all the global players in the market -- whether it is into Fast Moving Consumer
Goods (FMCG) sector or retail sector (either insurance or banking or for that sake any
other sector).
The FMCG sector includes companies like Indian Tobacco Corporation (ITC), Godrej,
Hindustan Lever Limited (HLL), Gujarat Cooperative Milk Marketing Federation
(GCMMF-Amul) and Dabur India Limited. All these have shown a strong global
presence in the rural sector and it can be said that all the FMCG companies should target
the rural sector.
Some FMCGs products like toothpaste, hair oil and other like shampoos have done much
better in the rural areas than the urban and the semi urban areas. It has been a
phenomenon that the sales of many companies have gone up; Coca-Cola, Nestle and
Godrej too have also reported better sales in rural areas.
The retail sector has a huge potential for growth as a study shows that opportunities in
rural retail sector were estimated to be over $34 billion in the year 2007, which is
expected to touch $43 billion by the year 2010. It can be seen from the market that
companies like Reliance, Subhiksha are expanding in the rural market. ITC has launched
its first rural mall Chaupal Sagar, which offers products ranging from FMCG to
electronic appliance to automobiles. Indian Oil is planning to invest $ 189.10 in the rural
areas during the financial year 2009.
Insurance sector has one of the biggest potential in the upcoming scenario and the fact
lies in the statement that only eight to 10 per cent of the rural households are covered by

life insurance. Rural investments are limited to their available option -- post offices and a
few limited commercial banks rural extension counters. The remaining 90 per cent offer a
huge potential as such for the insurance companies. The rural market is vibrant and holds
tremendous potential for growth of insurance business, particularly because of the strong
saving habits. LIC has a target of selling four million policies in the current financial
year.

OBJECTIVE

OBJECTIVE
"Any task without sound objectives is like Tree without roots". Similarly in case of any
research study undertaken, initially the objectives of the same are determined and

accordingly the further steps are taken on. A research study may have many objectives
but all these objectives revolve around one major objective which is the focus of the
study. In this study, the focus is on the emergence of Rural markets as the most happening
market on which every marketer has an eye. And so this study will be based on studying
the emergence of rural market in various contexts.
The following are the objectives of this research study : To study the emergence of Rural markets in the context of India.
To study the present scenario of rural marketing in India.
To study the future prospects of rural markets and their scope for the MNCs and
Indian companies, in India.
To

study

the

challenges

faced

by

rural

marketers

in

India.

To study the reasons of popularity of rural markets in India.

To measure the success of rural marketing campaign of few brands in Terms of
consumer appreciation.
To study the determinants of specification factors which can decide the success the
rural promotion strategy.
To evaluate the effects of adopting the specific brand ambassadors in the rural
marketing context.
.

Chapter 2
RESEARCH
METHODOLOGY
&
DESIGN

RESEARCH METHODOLOGY
RESEARCH METHODOLOGY

Research Methodology is a way to systematically solve the research problem. In it we study

the various steps that are generally adopted by a researcher in studying his research problem
along with logic behind them.

TYPE OF RESEARCHTo Study on emerging trend in modern retail format. I have gone through various news
papers, magazines, websites and collected information and data. And my study based on
exploratory research.

DATA COLLECTION:In data collection method we shall collect the secondary data from the following sources.
News paper
Magazine
Internet

PARAMETERS OF RESEARCH
Business process
Service
Satisfaction

RESEARCH DESIGN:
The study is a cross sectional study because the data were collected from many sources. For
the purpose of present study a related sample of population was selected on the basis of
convenience.

RESEARCH INSTRUMENT:
This work was carried out through Secondary data based.

TOOLS TO BE USED:
MS Excel
MS word

Chapter 3

RESEARCH
FINDINGS

FINDINGS

There are very big opportunity in rural market thats why many big giants are move to
rural market .they made serious efforts to tap the potential ,initially, innovation were

confined to product or services offering, or to packaging (SKUs),price (point) and

communication strategy by brands.

Companies are concentrated on low cost product

5 Rs product are very famous in rural market
They use communication in local medium ( folk media ,haats,melas)
They make small size /quantity products for rural India
There are a change in rural people lifestyle.
Rural peoples are aware with urban market.
Lots of job opportunities are coming in rural market.
Growth of employment .
Rural people are aware with information technology with help of these
Companies.
Farmers are benefited with ITC E chupal & Godrej Aadhar & hul shakti .
Increase the productivity of rural India.

Chapter 4

CONCLUSION

CONCLUSION

Marketers make consistent attempt to innovate tools and strategy to overcome the
challenges they face in the business arena .business innovation are broadly classified
under two heads ,namely product/service innovation and process innovation .marketers
need to design creative solution to overcome challenges typical of the rural environment
such as physical distribution channel management and promotion and communication.
Corporate India and govement bodies alike have made several efforts to bridge the gap
between rural and urban India .the ICT-drive value chain and the organized retail format
have been found to be the best innovation for rural India.
ITC e-Choupal, Godrej Aadhar & HUL Shakti, an innovative strategy which is
elaborative and extensive in rural markets so far. Critical factors in the apparent success
of the venture are they provide extensive knowledge of agriculture, the & has made to
retain many aspects of the existing production system, including retaining the integral
importance of local partners, the companies commitment to transparency, and the respect
and fairness with which both farmers and local partners are treated.
The concepts, which are becoming more important in every market, include color,
product attractiveness visibility, and display quality. In addition, availability (meeting
local demand by increasing production locally), acceptability (building brand equity), and
affordability (pricing higher than local brands, but adapting to local conditions) are the
key factors.

Chapter 5

LIMITATIONS

LIMITATIONS

Problems related to rural marketing

Barter system.
Underdeveloped people and underdeveloped markets
Lack of proper physical communication facilities.
Many language and Dialects.
Dispersed population and trade.
Poor road connectivity.
poor availability of dealers.
low destiny of shops per village and high variation in their concentration.
poor storage system,leading to inadequate stocking .
Inadequate Media coverage for rural communication.

 Highly credit driven market and low investment capacity of retailers.

Chapter 6

SUGGESTION

SUGGESTION
PRICING
Pricing is the major element for rural marketing so cheaper price product are affordable
for rural people.

IMPROVEMENT IN TECHNOLOGY
Technology is the major part of the rural area without nothing is possible
through media and electrification we improve the lifestyle of rural people.
MAINTAIN THE QUALITY STANDARD
Quality standard is also very important part of rural market because some people are
quality oriented customer.

ESTABLISHMENT OF DISTRIBUTION CHANNELS

Rural market certainly offer a big attraction to marketers, it would be nave to think that
any company can enter the market without facing any problem and walk away with
sizable share .but there are large number of small marketers .
Make a good distribution channel.
Underdeveloped people and underdeveloped markets
Lack of proper physical communication facilities so trained people.
Make an opinion leader for every village.
Increase the communication strategy in villages
Many language and Dialects
Make the idol distribution channel in the villages .
Improve the electrification in the villages.
Provide the training program for rural people.

 Motivate to increase investment capacity of retailers.

REFERENCES

BIBLIOGRAPHY
BOOKS:

Marketing Research Paneerselvam

Research Methodology C.R Kothari
Principles of Marketing Philip Kotler
Rural Marketing

-Pradeep kashyap

WEB RESOURCES:
www.godrej.com
www.google.com
www.hul.co.in
www.itcportal.com

MAGAZINE:
Outlook Express
Business today
Money Outlook
NEWS PAPER:
Business standard
Times of India
Economic times