Introduction

Rural marketing is a process of delivering better standard of living and quality

of life to the rural environment taking into consideration the prevailing rural
milieu. The rural market with its vast size and demand base offers great
opportunities to marketers. Two-thirds of Indian consumers live in the rural
areas and almost half of the national income is generated in rural market. Rural
marketing has a scenario which is entirely different from that of the urban
market. According to National Council for Economic Research, the market
penetration of Fast-Moving Consumer Goods (FMCG) in rural India is on
increase. The products which have the quick turnover and relatively low cost
are known as fast-moving consumer goods that have replaced already existing
similar products within a year.
The rural markets are estimated to be growing fast compared to the urban
markets. The potentiality of rural markets is said to be like a ‘woken-up
sleeping giant’. The words on everybody’s lips are ‘the real India lives in the
villages’. All smart marketers, Indian as well as MNCs have revered this gospel.
Companies such as Hindustan Lever, Godrej, Colgate Palmolive, Parle Tools,
Malhotra Marketing and Nirma are on the rise in marketing their products in the
rural areas and they are paving their unbelievable route to unimaginable growth
and development. New approaches, new strategic alternatives and new
operational techniques are being evolved to gain competitive advantage. ‘The
rural population is also aspiring for better lifestyles, especially with the
increasing disposable incomes accruing to a significant section of them. About
280 million people live in urban India, whereas 742 million people who reside
in rural areas comprise 72 per cent of India’s population from 6,27,000
villages.- Source ???/
The size of the rural markets is estimated to be 42 million
households and rural market has been growing at five times the pace of the
urban market due to more government rural development initiatives, low
literacy rates, increasing agricultural productivity leading to growth of rural
disposable income and lowering the difference between taste of urban and rural
customers. The FMCG category is also witnessing severe competition like US
markets. A number of sales promotion offers are made ranging from simple
price-offs to innovative contests and gift offers to lure deal-prone consumers. 2
All kinds of brands (international, national, regional and local) in a given
category design innovative sales promotion offers to attract consumers.
The rise of rural market has been the most important marketing
phenomenon of 1990, providing volume growth to all leading companies. Many
corporate have been trying to get a grip on the rural markets, but the challenges
are many i.e. how to make the product affordable, how to penetrate villages
with small population, connectivity, communication, language barriers, spurious
brands etc.
The reasons why companies are going rural are manifold. Higher rural
income driven by agricultural growth, increasing enrolment in primary schools,
high penetration of TV, and other mass media have increased the propensity to
consume standard and value added products in rural areas. Most fast-moving
consumer goods companies (FMCG) in India are introducing customised
products especially for rural areas. Thus, the sales of FMCG products in rural
markets is growing at a fast pace. Even faster than that in urban markets.
Marketers and manufactures are increasing the awareness of the burgeoning
purchasing power vast size and demand base of the once neglected Indian
hinterland. Efforts are now on to understand the attitude of rural consumer, and
to walk their walk and talk their talk.
While entering the rural market companies are also resorting to corporate social
responsibility activities. Thus helping the poor not only to augment their
income but also prompt their product. For example, Hindustan Unilever Project
Shakthi not only brings revenues to the company but also assists poor rural
woman to become income earners by selling the company’s product in the rural
hinterland. It provides entrepreneurial opportunity and thus improves the living
standard of rural women. It is a winning partnership deal between the company
and the consumers.
LG electronics, Coca Cola, Hindustan Unilever, Britannia, Philips,
Colgate, ITC, and LIC are among these companies which have a very
significant presence in the Indian Rural Market- source??

Statement of the Problem

The FMCG sector has been successful in selling products to the lower and
middle income groups and the same is true in India. The core problems of the
study were constructed on the basis of the low income group and middle income
group customers. This sector is a cornerstone of the Indian economy. This
sector touches upon every aspect of human life. Indian FMCG market has been
divided for a long time between the organized sector and the unorganized
sector. Over 70 per cent of sales are made to middleclass households today and
over 50per cent is in rural India. The sector is excited about a mushrooming
rural population whose income is rising and who are willing to spend on goods
designed to improve their lifestyle. At present there is a tremendous opportunity
for manufacturing branded products and consumers can be persuaded to buy
branded products. the new entrants in this market have highlighted a stiff
competition in key segments like cheese products, bottled water, juices,
cookies, pain relievers, soaps, tooth paste and pens the foreign companies,
which directly affects the profitability position of Indian brands. On the other
hand, a large part of the branded market is continuously threatened by spurious
goods and illegal foreign goods. The consumption level of the FMCGs highly
fluctuates depending upon the product price increasing trend, inflationary
condition and low financial inclusion of the rural people. Demand and supply of
the FMCG in the rural area mostly depend on agricultural income. An obvious
change is observed from saving culture to spending culture among the rural
population. It has shown a positive sign in consuming more FMCGs. But the
rural sector has affected rural India. This speaks for itself, highlighting the
expectation and growth of FMCGs. At this juncture, it is necessary to study the
rural buyer behaviour of FMCGs in the study area.
(categorise the products )

Objectives
1. To study the factors determining the pre purchase decision of ??
2. To access the awareness of people about the various factors and brands in the
market. – questions not included in connection with the awareness
3. To analyse the pattern of purchase of FMCG products. – not clear
4. To know the credibility of the products among the customers.- no question
relating to this

Scope of the study

In the present study, the consumers of processed foods , prepared meals,
Beverages, Baked goods, medicines, cleaning products, office suppliers and
cosmetic and toiletries are selected as respondents from a Thazhakara grama
panchayath of alappuzha district . Thus, the study gives due representation to
different products of FMCG. It is generally accepted by all the corporate
companies that the rural market is the key for their survival, and they have
firmly taken the mantra “GO RURAL” in order to keep the business instinct
afloat. There can be no doubt that a real India lives in its villages. It is the
place where all Multi-National Corporations can hope to pitch for their
competition and survival. 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.
Source ??
Limitations of the study
The present study is subject to the following limitations:
1. The present study is limited to FMCG companies and products at cheese
products, bottled water, juices, cookies, pain relievers, soaps, tooth paste and
pens
2. The sample groups have been restricted to the rural areas of Thazhakara
grama panchayath only.
3. The findings of the study may be generalized to the Thazhakara grama
panchayath only.
4. The sample size is restricted to 60 respondents.

Review of Literature
Gerad J.Tellis (1988) in his article, “The Price Elasticity of Selective Demand;
An analysis of Economic Models of sales” reported that, after making in-depth
analysis of 3678 brands available in the market that appeared in the academic
literature from 1961 to 1985, a high level of average price elasticity, -1.76
which means the 10 per cent price reduction would boost sales by 17.6 per cent.
P.Prushotham Rao (1990) in his Doctoral Thesis titled “Rural Urban and
Socio-Economic Variation in Consumer Behaviour”, has covered a number of
models of consumer behaviour and discussed their relevance to the Indian
Context. He has attempted a comparative analysis of brand awareness between
rural and urban consumer. He has also studied the factors influencing the
purchase decision of the consumer. He found that there is a close association
between income and brand awareness. Relatively, the brand awareness is higher
in urban areas compared to rural areas because of the greater penetration of
media and advertising.
Blattber Robert and Neslin Scott (1990) in their study entitled “Sales
promotions concepts, methods and strategies”, showed that majority (more than
60 per cent) of the brands have increased its sales owing to their innovative
strategies.
Soman Dilip (1998) in his study entitled “The Illusion of Delayed Incentives
Evaluating Future Effort-Money Transactions” described the consumer
response to promotions where incentives are delayed and the level of effort
which varies depending on the nature of the offer required availing incentives.
In a study by Kopalle, Pravin and Carl (1999) the dynamic effect of
discounting and sales was studied and normative pricing implications were
discussed. They suggest that managers can increase profit by as much as 7 to
31 percentage through innovative sales promotions efforts. These findings
indicate that it is important to balance the trade-off between increasing sales and
the current period from a given discount, and the corresponding effect reducing
(balancing) sales in future periods in market.
Raghubir Priya and Coffman Kim (1999) have studied the role of price
promotions in affecting pre-trail brand evaluations in the service context. A
price promotion is theorised to be informative about brand quality when it
stands out, because it deviates from either its own past behaviour or industry
norms. With past promotional behaviour, distinctiveness in terms of how
common it is to promote in an industry and consumer expertise are important
variables that moderate when price promotions have an unfavourable effect on
brand valuation product category experts, who have alternative sources of
information to make quality judgements, are expected to make less use of price
promotions as a quality cue than novices.
A study by Nowlis Stephen M, and Simonson, Itamar (2000) identified
moderators of switching between brands in different price quality tiers. The
authors propose that the likelihood of switching between particular brand tiers
to the price promotions could be predicted based on the choice set
compositions. They propose that consumers tend to trade up in a higher price
quality tier if promotions are offered by a premium brand but would not trade
down if a lower price / quality tier brand offers promotions.
Claire Tracey (2002) focuses in his studies, that the latest in a series on global
payments highlights the strategic importance of payments and the benefits of
developing an overarching view of the payments business. It provides a
checklist of actions of financial institutions to develop and implement a
payment strategy and it investigates the potential value to be realised from
payments and the value at risk in to the absence of a strategic perspective.
C. Mahdhavi and John William Fells (2002) focus on the level of perception
and experience of product value with reference to refrigerators. The study was
undertaken with 150 randomly selected consumers and the values taken were
quality, durability, availability, technology, economic service, status, physical
characteristics and guarantee and resale value. The study points out that the
comparison of the value priority of perceived and experience level, economy
was the only value that had fifth level perception and was experienced at the
third level.
Buyers are very sure of the price before they buy and in general there is no
chance of having negative experience in the case of economy. They suggest that
the manufacturers should indentify such gaps existing in different values and
magnitude of difference. Based on this they must take steps to match the
perception and experience. If this attempt is not made, there will be many
dissatisfied buyers and in the long run the manufacturers will be kept away from
the market.
Dr.K.Mallikarjuna Reddy (2002) studied consumers’ behaviour models and
their relevance to consumer electronic industry, linkages of buyer behaviour
with marketing strategies of consumer electronics firms and concluded that
consumers’ behaviours provide sound basis for indentifying and understanding
consumer needs.
Michael J.Silverstein, Harold L. Sirkin and Peter Stanger (2002) they have
stated that the retailing online Volume 5.0 is part of a series of in-depth studies
conducted by – BCG (Boston Counselling Group) in partnership with shaping,
the trade association for online retailers. This instalment reports Web-based and
store-based retailers are approaching breakeven profitability and catalogue-
based retailers are already profitable as a group. Multi-channel retailers are
taking the lead by leveraging existing brands and business systems. The online
market grew 21 per cent in 2001 and is expected to increase 41 per cent in 2002
reaching $ 72.1 billion.
According to Kumar (2002) 8000 annual melas are held in rural India every
year. Besides these melas, rural markets have the practice of fixing specific
days in a week as Market Days when exchange of goods and services is carried
out.
Every region consisting of several villages is generally served by one satellite
town where people refer to go to buy their durable commodities. If marketing
managers use these feeder towns, they will easily be able to cover a large
section of the rural population.
Only 16 per cent of the rural population has access to a vernacular newspaper.
Although the television is undoubtedly a powerful media, the audiovisuals must
be planned to convey a right message to the rural folk.
A radical change in attitudes of marketers towards the vibrant and burgeoning
rural markets is needed to impress the 230 million rural consumers spread over
approximately six thousand and hundred villages in rural India.
Dr.Rajamani Singh and A.S.Yasso (2000) have undertaken a study to know
the consumption pattern of toilet soap in Imphal City and consumer behaviour
towards the toilet soap. The study found that the toilet soaps produced in India
is not giving full satisfaction to all sections of the consumers. The people are
not satisfied in one or other way with regard to price, quality, colour, smell, etc.
of the product. The study further states that entry of foreign brands is increasing
which results in slow capturing of Indian Markets, posing a danger of
repositioning the Indian product in order to face the challenge.
Dr.I.Francis Gnana Sekar (2003) has written an article highlighting the
culture as the major factor that influences the buying behaviours in Canada and
India. He made a comparative analysis relating to religious composition, race,
occupation, income group, communications, education and reference group
types between the people in India and Canada and concludes that these factors
influence the buyer behaviours in Canada and India.
Dr.V.S.Ganesamurthy, Dr.M.K.Radhakrishnan and S.Bhuvaneshwari
(2003) have taken a research to find out the brand loyalty and level of
awareness about the consumers in the rural areas of Erode and Gobi Taluk. The
researchers made a deep study into the buying behaviour of the rural public by
analysing their products of preference like soap and powder, biscuits, tea, and
salt. As many as 50 respondents were selected for the study.
The study was conducted from retailers’ and consumers’ point of views. The
study reveals that due to improvement in media and transportations the products
were made easily available in all areas. Increasing awareness among rural
consumers has led to significant changes in buying behaviours and consumption
habits.
James P. Andrew and Andreas Maurer (2003) explain very clearly that
despite industrial companies’ deep investments in innovation, most new
products fail to generate the expected returns. Some companies are boosting the
odds of success by taking a different approach to product development and
commercialisation. Rather than conducting the entire innovation to cash process
themselves, they are playing the role of ‘orchestrator’ retaining some aspects of
the process under their direct control and delegating others to suppliers. The
orchestrator approach makes sense for certain kinds of products under specific
circumstances; Whirlpool’s Gladiator product line and Chrysler’s Crossfire cars
are excellent examples.
The literature are all quite old- Include studies which are latest . Where are
studies from Rural India market?
QUESTIONNAIRE

1. Name...........................
2. Gender
a. Male b. Female
3. Age of the respondents
a. Below 20 years b. 21- 30 years
c. 31- 40 years d. 41- 50 years
e. Above 50 years
4. Occupational status
a. Self employed b. Business
c. House wife d. Student
e. Agriculture f. Private employee
g. Government employee
5. Monthly income
a. Below 25000 b. Rs. 25000- 50000
c. RS. 50000-75000 d. 75000- 100000
e. Above Rs. 100000
6. Number of earning members in the family
a. 1 member b. Two c. Three
d. Four e. More than four
7. How did you come to know about the FMCG products?
a. By friends/family b. Direct mailer
 c. Press ads d. Reference website
e. T.V Ads

Categorisation and order not proper 8 to 15

8. Which Brand of cheese you are using?

Amul Britannia sunfeast

Gowardhan GO choudhery
cheese

flanders La Freme passion

9. Which Brand of bottled water you are using?

Rail neer Himalayan Hilly

Aqua

kinley Bisleri Aquafina

10. Which Brand of Toothpaste you are using?

colgate Pepsodent

Close up cibaca

patanjali sensodyne
 11. Which Brand of cookies you are using?

Good day Dark fantasy

nestle Oreo

Bour bon Hide & seek

12. Which Brand of pain relievers you are using?

ibuprofen fentanyl

oxycodone morphine

Paracetamol aspirin
 13. Which Brand of juices you are using?

Pepsi Miranda

coca cola maaza

frooti 7 up

14. Which Brand of soaps you are using?

Hammam Lux

chandhrika pears

patanjali santhoor

15. Which Brand of pens you are using?

lexi Reynolds

Pin point Nataraj classic

Cello Roritto
 16. Level of influence of cheese

Sl. Attributes Very High Neutral Low Very

No. High Influence Influence Low
Influence Influence

1 Price

2 Superior
Quality

3 Brand Image

4 Availability

5 Health Reasons

6 Advertisements

17. Level of influence of bottled water

Sl. Attributes Very High Neutral Low Very

No. High Influence Influence Low
Influence Influence

1 Price

2 Superior
Quality

3 Brand Image

4 Availability

5 Health Reasons

6 Advertisements
 18. Level of influence of juices

Sl. Attributes Very High Neutral Low Very

No. High Influence Influence Low
Influence Influence

1 Price

2 Superior
Quality

3 Brand Image

4 Availability

5 Health Reasons

6 Advertisements

19. Level of influence of cookies

Sl. Attributes Very High Neutral Low Very

No. High Influence Influence Low
Influence Influence

1 Price

2 Superior
Quality

3 Brand Image

4 Availability

5 Health Reasons

6 Advertisements
 20. Level of influence of pain relievers

Sl. Attributes Very High Neutral Low Very

No. High Influence Influence Low
Influence Influence

1 Price

2 Superior
Quality

3 Brand Image

4 Availability

5 Health Reasons

6 Advertisements

21. Level of influence of soaps

Sl. Attributes Very High Neutral Low Very

No. High Influence Influence Low
Influence Influence

1 Price

2 Superior
Quality

3 Brand Image

4 Availability

5 Health Reasons

6 Advertisements
 22. Level of influence of Tooth paste

Sl. Attributes Very High Neutral Low Very

No. High Influence Influence Low
Influence Influence

1 Price

2 Superior
Quality

3 Brand Image

4 Availability

5 Health Reasons

6 Advertisements

23. Level of influence of pens

Sl. Attributes Very High Neutral Low Very

No. High Influence Influence Low
Influence Influence

1 Price

2 Superior
Quality

3 Brand Image

4 Availability

5 Health Reasons

6 Advertisements
 25. Are you satisfied with the quality of the products?

a. Yes b. No

Categorise and mark the satisfaction in scale

26. Do you think the price of FMCG products is high /low compared to
competitor’s products? - no sequence or coherence

a. Low b. High c. Average

d. Same

27. How often do you buy this product of FMCG?- make more specific and
relate it to category

a. Daily b. Monthly
c. Weekly d. Occasionally

28. Do the various schemes or promotional activities affect your purchase?-

repeat type question 28 and 29 , either rephrase or avaoid

a. Yes b. No

29. If yes, influence of scheme for the purchase

a. Discount offer b. Free offer

c. Extra quantity d. Others (specify).......................

30. What is your opinion about the performance of the FMCG products?
repeat , avoid

a. Outstanding b. Excellent
c. Good d. Average

31. Do you face any problems in purchasing FMCG products?- avoid this

a. Yes b. No
 32. If ‘yes’ Mention the problems - make it as statements and scale the
question

a. Poor quality b. High price

c. Health problems d. Others (specify).........................
33. Place of purchasing - bring it to initial sections
a. Nearby shop b. Supermarket
c. Departmental store d. Grocery
e. Others (specify).........................

34. Mode of purchasing bring it to initial sections

a. cash b. Credit

35. What is the most important factor that matter while buying an FMCG?
Avoid

a. Quality b. price c. Service

Factors considering while purchasing

FMCG products with special reference
to Thazhakkara grama panchayath
Rephrase the title