ACHIEVEMENT OF FMCG’S IN RURAL INDIA

Pratima Pawar=91

Dinesh Phadtare=92

Shailesh Ranade=93

Neha Raswalkar=94

RURAL INDIA: A BREIF PROFILE

• Villages are the heart of India. Approximately 75% of India’s population(equaling 12.2% of the world’s population)lives in 6,38,365 villages spread over 32 lakh square kilometers.

• As per the census (2001) rural segments comprises 13.5 crore household which constitute 72% of total households in India with 48 crore adults individuals.

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Distribution of Population by Age Group (2001)

Age Groups Rural Urban0-4 11.5 8.95-14 25.7 21.815-19 9.5 10.620-34 23.1 26.835-54 19.7 22.555+ 10.5 9.4Total 100 100Source: Census of India , 2001

Education in India

Education Level Rural UrbanBelow Primary 31.7 18

Primary but below Middle

29.5 22.9

Middle but below matriculation

16.9 16.3

Matriculation but below Graduates

18.4 29.6

Graduates and Above 3.5 13.2

Source: Census of India , 2001

Per capita income in rural and urban areas.

68867740

9665

37954478

6070

0

2000

4000

6000

8000

10000

12000

1989-90 1994-95 2001-02

Urban

Rural

Nature And Characteristics of the Rural market

• Large & Scattered market• Heterogeneous Market• Income from Agriculture• Standard of living• Infrastructure Facilities

Large & Scattered market

• It consist approximately 75 crore rural consumers who live approximately 6, 38,365 villages.

• Abut 1,45,098 villages or 23% of the total number of village in India have population less than 200 and another 21% have population between 200 and 500 .

• But on the other hand 13% villages have 50% rural population and they posses 60% rural wealth

Heterogeneous Market

• As many as 20,000 ethnic groups are present rural India and this poses a formidable challenges to the marketer.

• There are 24 languages and 1,642 dialects (boli) varies ever 100 km or so it extremely difficult to develop a uniform promotional message.

Income from Agriculture

• Nearly 55% of rural income comes from the agricultural hence rural prosperity is tied with agricultural prosperity to a great extent.

Standard of living

• Over 70% of the rural population is employed in small scale agricultural and related occupations. This dependence on agricultural and natural factors.

• This unreliability factor in case of rural income makes the rural consumers extremely conscious in their purchase behavior,

Infrastructure Facilities

• The infrastructural facilities like road, warehouse , communication system and financial facilities are inadequate in rural areas. Road do not connect nearly 50% village in the country.

• Over 50% rural household have access to electricity as main source of lighting but 46% use kerosene for lighting.

FMCG

• Fiscal 2007-08 is likely to witness a hike of 10% and 6% respectively in FMCG’s rural and semi-urban market size due to heavy doses of advertisements that have been pouring into regional and national media, helping FMCG products penetrate successfully in this segment.

• Market for FMCG products in rural India is estimated at 52%

• Domestic FMCG total size in terms of volume is currently $15 billion, of which $7.9 billion is rural contribution as against $4.2 billion of urban and metros while $2.85 billion is semi-urban FMCG market

• Over 70% sale of FMCG products is made to middle class households and over 50% of middle class is in rural India.

• The sector is excited about burgeoning rural population whose incomes are rising and which is willing to spend on goods designed to improve lifestyle. Also with near saturation and cut throat competition in urban India, many producers of FMCG are driven to chalk out bold new strategies for targeting rural consumers in a big way.

List Of FMCG CompaniesS NO COMPANY

1 Hindustan Unilever Ltd.

2 ITC (Indian Tobacco Company)

3 Nestlé India

4 GCMMF (AMUL)

5 Dabur India

6 Asian Paints (India)

7 Cadbury India

8 Britannia Industries

9 Procter & Gamble Hygiene and Health Care

10 Marico Industries

4 A’s

• AFFORDABILITY• AVAILABILITY• AWARENESS• ACCEPTABILITY

Affordability

• Affordibility does not mean that cheaper products should be made & marketed,meaning is to reach customer by satisfying their needs.The customer should not think that they cannot buy it,that means it should be their in their buying capacity.The income earned in rural markets is from different ways,so by keeping in this mind most of the companies should design the product in such a way that it reaches the customer.

Availability

• The greatest problem in rural market is to reach the customer or retailer.Its the logistic way to make the product available there.Once it reaches retailers shelf then there will not be any problem.This is because there will be lesser no. of brands available at market.Most of the products are promoted well but by the time it reaches the customer it gets late. So reching the market should be considered.

Awareness

• The main way of reaching the customer is through commercials on media like TV, Radio & outdoor. The awareness programs should be conducted at the area where the village heads meet at the villages.It should contain some message to audience,there should be some concern for them & their place.Apart from this company should think of colour of product ,packaging ,logo ,slogan & so on.

• This should be in such a way that by looking at the product only the customer should feel that they can go for that , & they should be in such a position to differentiate the product from the copy cat one.

Acceptability

• The customer should think that they can buy the product by putting an extra money on that.They should feel that the product is designed as per their needs & it should deliver a great solution to customer.They should think that the product give some value to them,&it should serve the purpose what they are planning to buy for.The customer should feel the comfort with the product & there should not be any hesitation to go for it.

TOOTHPASTEIn the initial years, the rural consumers preferred tooth powers, datoons etc. but from the last decade, the preference of rural consumers towards toothpaste has been changed. A huge number of toothpastes of different companies are sell in rural market. Colgate, Pepsodent are the most popular toothpaste brands in rural market. The rural consumers preference towards the different toothpaste brands are given in following pie chart. As per analyses of above pie chart, we has found that Hindustan Uniliver’s Pepsodent leads the market with 35% rural market share. 30% of rural consumers prefers colgate as their favorite toothpaste brand, once again Hindustan Uniliver’s close up occupies third position with 15% market share.10% of the rural consumers prefers Dabur’s babool toothpaste and 10% consumers uses other toothpaste brands.

As per given in the above table, the 90% of the soap market is coverd by the products of Hindustan Uniliver.50% of rural consumers prefers HUL’s Lux, where as 30% goes towards HUL’s Lifeboy third position is also acquired by a HUL product where 15% of the market captured by Rexona. 8% of rural consumers prefers some other soap brands.CONCLUSION:- In this analysis , I fonnd that a vast majority of rural consumers prefers Lux as their more faithful brand.

SOAPSIn the survey of preference of my target consumers towards soap, I had found the different preference and different choice of the consumers. On the basis of their choice, I has get the following data given in following table:-

SHAMPOOAs per concern of shampoo , total 31.9% shampoo uses in rural market. It shoes a good number of consumers preference towards shampoo in rural area. From the last few years , the demand of shampoo sashes as well as medium size bottles has increased in rural area. Peoples of every age are interested to use shampoo at regular interval. The preference of consumers towards shampoo is given in following table. The consumers preference towards shampoo are as follows:- 42% prefers clinic plus.30% consumers prefers sunsilk.10% consumers go through Calvin Care’s Chick.8% consumers prefers other shampoos or non shampoo users.

Preference of shampoo in saches:-32% of consumers uses Heads & Shoulders.28% goes through Pantene.18% prefers sunsilk.12 % prefers clinic plus.10% includes non shampoo users or users of some other brands,CONCLUSION:- This analysis shows that a vast majority of rural consumers prefers HUL’s clinic plus and Sunsilk in high and medium size sample. But on the other hand, in sachet sample there is different story. More than 50% of the rural consumers prefers the brands of P&G (Heads & Shoulders and Pantene).

DETERGENTS

• Detergent is another more preferencable product for rural consumers. Approx 87.4% penetration level of detergent is gone to rural consumers. The preference of rural consumers towards detergents is given in following table

• As per given in above 2 table , the consumers preference towards detergents are as follows:-

• 42% consumers prefers HUL’s wheel in mediam or large sample , but consumers not prefer it in sachet.

• 34% consumers prefers ghari detergent in medium or large size sample, but not in sachet.

• 13 % consumers prefers P&G’s Tide in medium or large size sample but it is leading brand in sachet category with 43%.

• Surf excel of HUL is second leading brand in sachet category with 35% consumer preference which is prefers only 6% in large samples due to it’s price.

• 5% consumers prefers other local detergents for their personal use.

• CONCLUSION:-

As given in the above table, lump sum the half of the detergent market is covered by HUL and P&G products. Nirma which was the initiator of introduction of detergent in rural market, is currently out of the market. this condition shows that the rural consumers are also want to quality products, only price is a factor in front of them.

CLEANER

• Utensil cleaner is one of the basic need of the consumers, because consumers uses it at regular interval. Couple of months ago, the rural consumers does not uses any utensil cleaner rather they use primary products like ash, mud or other things. But at the present time the popularity of utensil cleaners has been developed in rural market in high penetration level.

• The consumers preference towards utensil cleaner is given in following table:-

• As per given in the table, vim is the leading brand in the utensil cleaner segment. 85% of the rural market is covered by vim , 10% consumers prefers other brands where as 5% consumer are those who does not uses any utensil cleaner.

FAIRENESS CREAM

As per fairness cream is concern, there is not more brands are in the competition. Only few brands of HUL and emami captures the market.a brief description is given in the following table.

The HUL’s Fair & Lovely is most popular brand in the rural market most of the consumers specially female consumers uses this brand. Approx 65% of rural consumers uses Fair & Lovely as their best trusted brand. Second position is also occupied by HUL’s product (Ponds) which is preferred by 23% of consumers, 10% consumers prefers Vicco and 2% uses some other brands.

SHAVING CREAM

Generally in the rural areas the consumers prefers barbers for the purpose of saving or other relevant purpose. But in the semi-urban areas and some of the rural areas, consumers are started to depend on their own saving kit. So what from the few years, the demand of different savin creams of different companies has been increased.

A brief analysis of different brands of different companies is given in following table:-

The preference of consumers towards saving cream is described as follows:-

42% of the consumers prefers Palmolive as their best choice.

30% consumers prefers Vjohn.

Gillete which is most demandable brand in urban areas has very low market share in the rural market due to it’s little bit high price.

After saving gel is generally not popular in the rural market.

CONCLUSION:-

The analysis of consumer preference toward saving cream shows that such a vast area of market covered by Palmolive and Vjohn.

BISCUITS Biscuit is one of the major beverage category brand of the

FMCG products for the rural areas. Consumers prefers it for the many reasons like taking with tea, giving to guests, baby food etc. there are many companies exists in this segment. A brief overview of consumers preference towards biscuits is given in following table:-

Parle-G is very old and most trusted biscuit brand for the rural consumers. From many years , consumers prefers it due to it’s low price, good taste, and availability. At the present time, it captures approx 62% of total rural market share. From the few years ITC’s Sun feast creats a good demand among the rural consumers. 23% of rural consumers prefers sunfeast and also it’s demand is increasing due to it’s taste and good publicity and distribution. Consumers prefer 10% Britaania brands and 5% consumers prefers other brands.

TEA BRANDS In the segment market, generally consumers had prefer

local tea , but from the few years they starts to use some brands of the different tea companies because of the avaibility of tea in small sachets. The following table provides a brief details about the different tea brands popular in the rural market.

The data analysis of consumers preference towards tea is discussed as follows:-

32% consumers prefers taza as their best choice.

26% of the rural consumers prefers tata tea.

21% of the rural consumers prefers double diamond.

11% consumers prefers taj mahal tea.

10% consumers are among those who prefers some other tea nrands.

CONCLUSION:-

As per given in the above table taza and tata tea are the leading tea brands in the rural market.

HAIR OIL BRANDS The rural consumer preferences towards different hair oil

brands are given in the following table:-

Rural consumers prefers mostly herbal/cool oils, e.g- Navratna, himtaj, Himgange,etc. 31% of the rural consumers prefers herbal oils because of their multipurpose use. They use these oils as medicine also. 25% of the rural consumers prefers dabur amla, third place occupied by Maico’s Paraschut which is prefers by 21% of rural consumers. 18% consumers prefers Bajaj Almond and 5% prefers some other hair oil brands.

Advertising & Sales promotional strategies in rural market

Dabur uses Astra to boost rural sales

Shopkeepers selling Dabur India's consumer products would now learn marketing through role-plays staged by professional actors at their shops. As part of a recent initiative titled Astra, advanced sales training for retail ascendance, FMCG major has recruited 75 sales and HR managers across the country who would educate over 2,000 distribution channel partners of the firm about the complexities of sales and distribution through the audio-visual medium

Dabur has a distribution reach of 25 lakh retail outlets across the country. About 75 per cent of the company's sales come form rural areas, hence, it has created the Astra training consultancy module in five vernacular languages, Bengali, Tamil, telungu, Malayalam and Kannada

Brooke Bond Lipton India Ltd (BBLIL)

Brooke Bond Lipton India Ltd (BBLIL) markets its rural brands through magic shows and skits. Reckitt and Colemen uses NGO's in rural areas to educate customers about product benefits which establishes one to one communication channels.

HLL's ‘Operation Bharat’ to tap the rural markets. Under this operation it passed out low–priced sample packets of its toothpaste, fairness cream, Clinic Plus shampoo, and Ponds cream to twenty million households. Today, these brands have a flourishing market in rural India.

PHILIPS INDIA LTD. - ELECTRONIC ENTERTAINMENT EQUIPMENT

Objective - promote Phillips Electronic Entertainment products, viz., Stereos and CTVs, among the rural population of Tamil Nadu.

Communication Strategy - Based on information regarding buyer behavior.

'Philips Super Shows' were conducted in five district headquarters with the intention of motivating dealers as well as opinion leaders to generate word-of mouth publicity, as a first step.

This was followed by extensive van operation in 5000+ population areas with audience participation techniques for mouthing the brand, supported by mass media campaign in regional press (district wise edition), rural cinemas, radio, wall painting and intensive merchandising activities.

Marico Industries - Parachute Coconut Oil Pouches

With the objective of creating awareness for Parachute Coconut Oil pouches in towns with less than 20,000 population in Tamil Nadu, and in order to convert loose oil buyers into Parachute pouch customers, Marico Industries launched a van campaign. The communication Strategy focused on getting women out of their homes to participate in the van campaign, which was aimed exclusively for them and for the first time conducted by women.

Result - A study by Marico showed a 25per cent conversion from loosecoconut oil usage to Parachute Pouch Pack, post van campaign and asubstantial increase in sales from the campaign areas

ACC Limited - ACC Suraksha Cement

In a market dominated by graded cements in the semi urban/rural areas of Karnataka, ACC Cement ventured out to

establish the superiority of ACC Suraksha blended cement and build an image of a Premium Cement for the brand.To reach the opinion leaders viz. Architects, Engineers, Contractors, etc.,the assistance of the regional local press was sought and other Direct Marketing efforts such as field meetings with small groups of masons & customers were used.

Result - A post-campaign study initiated by ACC revealed tangible improvement in off-take in the state of Karnataka andan extremely positive response from dealers, who believed that the campaign helped in strengthening their hands.

Source: Anugrah MadisonAdvertising Pvt. Ltd.

Success Stories in Rural Market

• Lever's Breeze soap • A1 Tea, • Britannia's Tiger biscuits, • LG's Sampoorna• 502 Pataka Chai, the tea brand.

Rural Promotion

Promotion is the process of marketing communication to inform, persuade, remind and influence consumers or users in favour of your products and service .

The Product

The Company

Buyer

Channel

The Promotion Media

• Newspaper : Eenadu(A.P), Dina Thanthi ( Tamil Nadu), Punjab Kesari (North), Loksatta (Maharashtra), Anand Bazaar Patrica (West Bengal), Daink Baskar (North)

• Television: Sun TV (Tamilnadu), Asianet (Kerla), Eenadu( AP), Aplha Punjabi (North), Aplha Mararthi (Maharashtra).

• Radio: Radio reach is highest in Kerla (62%) followed by Tamil Nadu (35%) and Karnataka (32%). Example : Colgate, Jyoti Labs, Zandu Balm are some of the company using radio communication programme.A ten second spot in Regional station would cost only about Rs. 2000/-

• Cinema :1. Films on products like Vicks, Lifeboy, Colgate and Shampoos are shown in rural cinemas halls.2.LIC and Private insurance companies have been showing short movies in rural theatres to create awareness about life insurance

Outdoor AdvertisementForm of media which includes signboard, wall

painting, hoardings, tree boards, bus boards etc.

• Direct Mail Advertising: Mailers for seed and pesticides to be sent as per

agricultural season.Direct mailers on consumer durables to be sent

during the harvesting season so that the farmers will,. have money for purchasing the same.

Farm to Farm / House to House

• Many LIC agents and companies dealing with high value consumer durables have tried this approach with success in rich rural areas.

• ACC representatives retailers make house-to house visit and give information about product stability.

Group Meeting

• The Banker once in a week visit a village get the villagers in school hall or Panachyat office and explain to the villagers the various financial facilities offered by the bank

• MRF conduct tractor owners meet in association with local distributors.

Opinion Leaders

• Asian Paints promoted its Utasv brand of paint by painting the village Sarpanch’s house a few months prior to the launch to demonstrate that the paint does not peel off and is an ideal replacement of chuna.

• The health development assistant of HUL regularly meets school teachers to promote Lifebuoy soap in Villages.

Audio Visual Van(The van is a mobile promotion station having facilities for screening films, slides and mike publicity.

• Nippo promotes batteries through specially designed vans called melavans. The van are equipped with TV/VCR for showing products awareness films.

• Colgate India makes extensive use of VANs.• ITC’s mobile Vans take the message of e-

choupal to new village.