PROJECT REPORT On TO ANALYZE THE MARKETING OF CONSUMER PRODUCTS IN RURAL AREAS

Submitted for the partial fulfillment of the Award Of

Master of Business Administration DEGREE

Session: 2011 2012 SUBMITTED BY
GEETIKA MADHUR 1003270015

UNDER THE GUIDANCE OF

Internal Guide: Ms. ANSHIKA SANGAL School of Management

ABES ENGINEERING COLLEGE GHAZIABAD

AFFILIATED TO MAHAMAYA TECHNICAL UNIVERSIRTY, NOIDA

TO ANALYZE THE MARKETING OF CONSUMER PRODUCTS IN RURAL AREAS

Candidates Declaration / Certificate

I, Geetika Madhur, hereby declare that the work which is being presented in this report titled TO ANALYZE THE MARKETING OF CONSUMER PRODUCTS IN RURAL AREAS is an authentic record of my own work carried out under the supervision of Ms. Anshika Sangal

The matter embodied in this report has not been submitted by me for the award of any other degree.

Dated:

GEETIKA MADHUR M.B.A. Department

This is to certify that the above statements made by the candidate are correct to the best of my knowledge.

Prof. Rakesh Passi (Head of Department) Date: Department: MBA

Mr. Anshika Sangal (Name of Supervisor) Designation: Asst. Professor Date:

ACKNOWLEDGEMENT
Completing a task is never a one man effort. It is often the result of valuable contributions of a number of individuals in a direct or indirect manner, which helps in shaping and achieving an objective. Here we cannot resist expressing our heartful thanks to those who have contributed greatly accomplishing this task. I take immense pleasure in thanking Prof.Rakesh Passi (HOD) - ABES Engineering College, Ghaziabad for having permitted me to carry out this project work. I wish to express my deep sense of gratitude to my Internal Guide Ms. Anshika Sangal for her able guidance and useful suggestions, which helped me in completing the project work, in time. Finally, yet importantly, I would like to express my heartfelt thanks to my beloved parents for their blessings, my friends/classmates for their help and wishes for the successful completion of this project. Last but not the least I would thank Almighty for showering his blessings And helping me at each step.

DATE: _ _ /_ _ /_ _ _ _ PLACE: ____________

GEETIKA MADHUR

CONTENTS Cover Page Title Page Candidates Declaration Certificate from supervisor & Head of Department Acknowledgement CHAPTER I Introduction Need of Study Scope of Study Objection of Study CHAPTER II Research Methodology Limitation CHAPTER III Descriptive Work On Subtopic CHAPTER IV Data Analysis & Interpretation CHAPTER V Conclusion & Suggestion CHAPTER VI Bibliography CHAPTER VII Appendices

CHAPTER - I
SECTION 1.1 - Introduction SECTION 1.2 - Need of Study SECTION 1.3 - Scope of Study SECTION 1.4 - Objective of Study

CHAPTER - I 1.1: INTRODUCTION RURAL DEVELOPMENT PROJECTS AND PRODUCTS

INTRODUCTION:Marketing can be defined as identifying the needs of customers and potential customers, providing products/services that satisfy these needs and developing efficient processes or systems to deliver your product/service to the market when, where and how consumers want it. Rural marketing could be defined in terms of the location (villages) and occupation (mainly farming). A large variety of transactions are considered a part of rural marketing. Rural marketing includes marketing of: 1. Agricultural inputs like fertilizers, pesticides and farm equipment etc. 2. Products made in urban centers and sold to rural areas like soaps, toothpastes, TVs etc. 3. Products made in rural areas sold to urban centers like khadi cloth, handcrafted products etc. 4. Products made and sold in rural areas like milk and milk products, locally manufactured toothpowder, cloth etc.

In our country over 70% of the total population live in villages. There are states like U.P, M.P, Bihar, Rajasthan and Orissa where rural population varies from 80 to 90 per cent. Agriculture and agriculture related activities contribute to about 75% of the income in rural areas.

The general impression is that the rural markets have potential only for agricultural inputs like seeds, fertilizers and pesticides, cattle feed and agricultural machinery. More than 50% of the national income is generated in rural India and there are opportunities to market modern goods and services in rural areas and also market agricultural products in urban areas. In fact it has been estimated that the rural markets are growing at five times the rate of urban markets. About 70% of bicycles, mechanical watches and radios and about 60% of batteries, sewing machine and table fans are sold in rural India. At the same time the sales of color television, washing machines, refrigerators, shampoos, face cream, mosquito repellent and tooth paste are very low and there is tremendous potential for such products in rural markets

While rural markets offer big attractions to the marketers, it is not easy to enter the market and take a sizeable share of the market within a short period. This is due to low literacy, low income, seasonal demand and problems with regards to transportation, communication and distribution channel. Further there are different groups based on religion, caste, education, income and age. There is a need to understand the rural markets in terms of buyer behavior, attitudes, beliefs and aspirations of people.

PROFILE/FEATURES OF RURAL MARKETS Large and scattered market:

The rural market of India is very large and scattered, in the sense that it consists of over 63 crore consumers from 5, 76,000 villages spread throughout the country.

Major income from agriculture:

Nearly 60% of the rural income is from agriculture. Hence rural prosperity is tied with agricultural prosperity. During the harvest season, the demand for consumer goods in the village goes up. The size of the rural population securing income from the non-agricultural sector is now increasing with the advent of rural development programmes.

Low standard of living:

The consumers in the village areas do have a low standard of living because of low literacy, low per capita income, social backwardness, etc.

Traditional outlook:
The rural consumer values old customs and traditions. A change is beginning to take place in their outlook because of growth in literacy rate and mass media in the rural areas.

 Diverse socio-economic background:

Due to this large and scattered rural population, there is great diversity in the socio-economic background as this differs in every part of the country. This brings diversity among rural customers and market.

Changing demand pattern:

The demand pattern of the rural consumers is fast changing. There is a new and growing demand for toiletries, ready-made garment, cosmetics, packaged foodstuffs, etc. This change is due to the increase in the rural income.

Infrastructure facilities:
The infrastructure facilities like roads, warehouses, communication systems, financial facilities are inadequate in rural areas. Hence physical distribution becomes costly due to inadequate facilities.

Saving habits:
The saving habit of the rural consumer is increasing in the recent years as a result of the efforts put by co-operative and commercial banks.

1.2 NEED OF STUDY

Rural Marketing is defined as any marketing activity in which one dominant participant is from a rural area. This implies that rural marketing consists of marketing of inputs (products or services) to the rural as well as marketing of outputs from the rural markets to other geographical areas. Rural areas of the country or countryside are areas that are not urbanized, though when large areas are described country towns and smaller cities will be included. They have a low population density, and typically much of the land is devoted to agriculture

So the main reasons which give rise to the Need of rural marketing are: Market potential: Market Size of the Rural Market is Very Large because 70% of the Indian population lives in rural Areas. Purchasing power: of Consumer is high so they are an attractive target segment Major players: only few major players are tapping this potential Rising Income & Demographic Shifts Focus on Innovation and Price Segmentation Mounting Aspirations and an upbeat Economy herald a bright Future

WHY RURAL MARKET IS DIFFERENT?

The purchasing power of rural India is more than half for fast moving consumer goods [US$17 billion]. The durables and automobile sectors contribute US$2.5 billion each, and agro-inputs (including tractors) about US$1 billion. Some 42 million rural households use banking services against 27 million urban households. There are 41 million Kisan credit cardholders [credit cards issued to farmers for purchase of agricultural goods] against some 22 million card users in urban markets. Be it automobile, telecom, insurance, retail, real estate or banking, the future drivers of growth are rural. No marketer can afford to ignore the possibilities of rural India.

There are 7 differentiators identified: 1. Intra community influences are relatively more important than inter-community ones. Wordof-mouth in close knit communities is more powerful.

2. Scarcity of media bandwidth. Rural individual's access to media channels is limited and in the case of broadband the comparable upload and download speed may be slower. Online shopping is seen as a solution by many but will be dependent on broadband speed.

3. Slow to adopt brands. Slow to give them up. Rural consumers will be slower to pick up trends or brands but will remain loyal when accepted.

4. Expenses are yearlong; income is seasonal. Many rural areas rely on seasonal tourism peaks when income will be high and to a lesser extent agricultural incomes from seasonal crops. This means there will be more disposable income at certain times with rural businesses and employees

5. Information hungry; but entertainment starved. Rural Communities have limited entertainment options, which make it easier for marketing communications to generate higher levels of involvement by making their communications more entertaining. Packaging brand information in a very entertaining manner not only makes the communication more involving, but can also, if well designed, improve understanding and absorption of key brand information.

Edutainment is a proven model for rural markets. Nokia has successfully used a highly engaging radio drama to communicate its one year warranty in South Africa, and has deployed a series of ;slice of life films to sell the category benefits of mobility to first time buyers in India.

6. Higher receptivity to experience advertising. Retail outlets in rural areas have many demonstration areas along with markets for tasting.

7. Commercially profitable; and socially acceptable. Brands with demonstrable local, rural, environmental and/or social credibility stand a better chance

1.3 SCOPE OF THE STUDY

Producers and sellers in India focus their selling attention upon the consumers in urban areas instead of focusing their attention on rural areas where 75% of our population lives. Therefore there is a vast scope for developing market in rural areas.

Higher purchasing power:

There has been an increase in purchasing power of the rural population. There has been an overall increase in economic activities because during the planned rural development, heavy outlay of resources on irrigation, fertilizers, agricultural equipment and agro processing industry has been made. Saving habits in rural people also has increased. This also contributes in higher purchasing powers.

Change in rural market:

There has been increase in demand for durables and non-durables like tables, fans, radio, soaps, etc. by rural consumers. This provides the producers with a ready market. Hence the rural market is now expanding.

Media exposure:
Unlike earlier, today information about new products is given through indoor as well as outdoor media.

Decision making units:

Studies reveal that 72.3% decisions are taken jointly in a family. With education and mass media role of children is also changing.

 Better understanding of rural requirements:

Marketers can now introduce products designed especially for rural consumers as there is a better understanding of rural consumers and his habits.

Infrastructure facilities:
Substantial increase is also seen in the improvement of infrastructure facilities.

Rise of alert buyers:

Literacy level of rural India has being steadily increasing with the launching of various literacy schemes. Now rural consumers can defend themselves with the help of increased awareness.

Opinion leaders:
Educated people have taken up the role of being opinion leaders. Friends and relatives who have some experience in buying the product act as User Endorsers and provide the necessary information. However, in spite of this wide scope for marketing, there are several problems which marketers have to face while trying to promote their products.

TO RURAL

TO URBAN

1. Consumable & durable agriculture input. FROM URBAN 2.Consumables 3.Consumer durable Not concerned

1.Agricultureand allied 1. Rural Marketing, services FROM RURAL product production 2.Rural assistance and rural industry product.

Therefore, rural market is a distinct specialist field of the marketing discipline which encompasses customized a application of the marketing tools and strategies to understand the behavior of the rural consumer in terms of needs, tailoring the products to meet such needs and effectively delivering them to enable profitable exchange of goods and services to and fro from the rural market thus, the key factor for succeeding in the rural marketing lies in comprehending the rural psyche and what the rural consumer is.

1.4 Objectives of Study

The overall objective of the thesis is to throw light on scope of Rural Marketing of consumer goods in India. SUB OBJECTIVES: Rural marketing of Companies Present and future Future growth potential of in India. Rural marketing Different Strategies adopted by different FMCG companies to increase their rural market share. opportunities & threads in India for rural market

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 main objective of this study is to analyze and present the marketing of consumer products in rural areas. The following objective has been set forth. They are to: Present a rural marketing perspective Present a profile of Indian rural market Study & analyze the consumer behavior in rural areas Examine the product & brand penetration in rural markets

Analyze marketing of consumer product in rural markets

CHAPTER II
SECTION 2.1 SECTION 2.2 Research Methodology Limitation

Chapter- 2 2.1 Research Methodology

What is research?
The general perspective of research is that some scientists taking part in laboratory testing or presenting the results in scientific discovery to the world-actually this was my view of research when I was young. Simply speaking the purpose of research is to find a solution to a particular type of problem or showing the problem a direction towards solution or putting some light in the unknown areas of knowledge for your enlightenment to that particular area of knowledge-thus research actually help us to understand our reality more clearly as well as help us to enjoy better living standard. So, research is kind of a project to find out some answers or solutions for a particular arearesearch is kind of project because every project has its scope of work, time-line and resources, thats why you may easily interrelate research work with a project-in fact every research work works on based on a well-devised project plan.

How Research Works?

Like every system of this world, research also follow certain rules and take the help of certain organized procedures in order to get the intended result. In a word, a research works on its methods to serve its true purpose in any area of the knowledge domains. So, for working of a research project, you need to approach your study area in a systematic way, which is also recognized and familiar with the rest of the world-what I mean by this is that your research method must be recognized by all over the world or at least by the majority of the scientific community.

What is the value of Research?

1. Every research works either identify new opportunities for us or give us novel ideas. 2. Research helps us to diagnosing any known problems or opportunities; 3. Help us to establish a standard of taking action on any chosen area of the knowledge domain. 4. Evaluate and develop the current technologies and systems.

Types and Methods of Research

Every Research needs lots of dedication from the researchers part-the amount of dedication mainly depends on the subject matter of the research. Before undertaking any research in any subject areas one must be sure about the intended purpose of the research-this purpose determines what type of research one is going to undertake. Any scientific research may fall into the following three broadly categories:

Exploratory research-This type of research may generate any novel idea in the domain of knowledge. It is primarily done for the purpose of finding anything new in any subject arena and always tries to shed some light in the unknown domain of knowledge. This kind of research also Help us to generate new discipline in sciences and help us to identify problems of those particular research areas.

Constructive research- This is mainly done by many technological corporate in order to find new/alternative solutions to any particular crisis or problems. For example-renewable energy research or development of the capacity of optical fiber may fall into this category of research.

Empirical research-This is very impressive observational type of research, where one observes or test on real-life data or analysis the pattern of some specific events in order to identify the nature or the class of trend that specific phenomenon maintains. Based on the test result, researchers try to draw lines in order to predict the result of that type of incidents with certain level of confidence.

THEORITICAL CONCEPTS

HOW RESEARCH IS DONE 1) The knowledge of methodology provides good training especially to the new research work and enables him to do better research. It helps him to develop disciplined thinking or a bent of mind to observe the field objectively. Hence for making a career in research we must develop the skill of using research techniques and must thoroughly understand the logic behind them. 2) Knowledge of how to do research will inculcate the ability to evaluate and use research result with reasonable confidence. In other words we can state that the knowledge of research methodology is helpful in various fields such as government or business administration and social work where person are increasingly called upon to evaluate and use research results for action.

3) When one knows how research is done, then one may have the satisfaction of acquiring a new intellectual tool, which can become a way of looking at the world and of judging every day

experience. Accordingly it enables us to make intelligent decisions concerning Problems facing us in practical life at different points of time. Thus the knowledge of research methodology provides tools to look at things in life objectively.

4) In this scientific age, all of us are in many ways consumers of research results and we can use them intelligently provided we are able to judge the adequacy of the methods by which they have been obtained. The knowledge of methodology helps the consumer of research results to evaluate them and enables him to take rational decisions.

RESEARCH PROCESS

1) Formulating the research problem: - The first step in research is formulating a research problem. It is most important stage in applied research as poorly defined problems will not yield useful results. It is rightly said that: a problem well defined is half solved. Poorly defined problems cause confusion and do not allow the researcher to develop a good research design. 2) Extensive Literature Survey: - Once the problem is formulated, the next step is to write down a brief summary. For this the researcher should undertake extensive literature survey connected with the problem. For this the researcher should undertake extensive literature survey connected with the problem. For this purpose the abstracting and indexing journals and published or unpublished bibliographies are the first place to go to. Academic journals, conference, government reports, books etc must be taped depending on the nature of the problem.

3) Development of working hypotheses: - Now the researcher should state in clear terms the working hypotheses. Working hypothesis is tentative assumption made in order to draw out and test its logical or empirical consequences. Working hypotheses can be developed by using the following: I. Discussion with colleagues and experts about the problem its origin and the objectives in seeking a solution. II. Examination of data and records. III. Review of similar studies in the area or the studies on similar problems.

4) Preparing the Research Design: - Research Design is the conceptual Structure within which research should be conducted. A research design specifies the methods and procedures for conducting a particular study. The research should specify the approach he intends to use with respect to the proposed study. The function of research design is to provide for the collection of relevant evidence with minimal expenditure of effort, time and money. 5) Collection of data: - The next step is to determine the sources of data to be used. The researcher has to decide whether he has to collect primary data or depend exclusively on secondary data. Sometimes the research study is based on both secondary and primary data. There are two methods available for collecting the data. 1. Observational method. 2. Survey method.

Observation: This method implies the collection of information by way investigator own observation, without interviewing the respondents. While the observational method may be suitable in case of some studies, several things of interest such as attitudes, opinions, motivation and other tangible state of mind cannot be observed.

Surveys: In marketing research field survey are commonly used to collect primary data from the respondents.

Surveys can be: Through personal interviews: Through telephone interview: By mailing of questionnaires: Through schedule:

6) Execution of the project: - The researcher should see that the project is executed in a systematic manner and in time. A careful watch should be kept for unanticipated factors in order to keep the survey as much realistic as possible. This means that steps should be taken to ensure that the survey is under statistical control so that the collected information is in accordance with the pre-defined standard of accuracy. 7) Analysis of data: - After the data have been collected, the researcher turns to the task of analyzing them. The analysis of data require a number of closely related operation such as establishment of categories, the application of these categories to raw data through coding, tabulation and then drawing statistical inferences. 8) Hypothesis testing: - After analyzing the data the researcher has to test the hypothesis, various test such as, Chi square test, t-test, F-test, have been developed by statisticians for the purpose. 9) Generalization and interpretation: - If a hypothesis is tested and upheld several times, it may be possible for the researcher to arrive at generalization, i.e., to build a theory. If the researcher had no hypothesis to start with, he might seek to explain findings on the basis of

some theory. It is known as interpretation. The process of interpretation may quite often trigger of new questions, which in turn may lead to further researcher. RESEARCH METHODOLOGY Research methodology is a way to systematically solve the research problem. It may be understood as a science of studying how research is done scientifically. In it we study the various steps that are generally adopted by a researcher in studying his research problem along with the logic behind them. It is necessary for the researcher to know not only the research method / technique but also the methodology. The data used in this project report is both Primary data and Secondary data. I have collected these data by the means of Personal Interviews, and Published Sources. PRIMARY DATA: - Primary data may be described as those data that have been observed and recorded by the researchers for the first time to their knowledge. The objectives of primary data are formulated on the basis of research objectives. Objectives set the guidelines and directions of research planning. Formulating the objectives offers the best feasible means of solution .The research study should yield measurement related to the research objectives as the measurement will provide directions for a decisions. SECONDARY DATA: - Secondary data are statistics not gathered for the immediate study at hand but for some other purposes. They may be described as those data that have been compiled by some agency other than the user. 1) INTENAL SECONDARY DATA: - Data that originate within the firm for which the research is being conducted are internal data. If they are collected for some other purposes they are internal secondary data.

2) EXTERNAL SECONDARY DATA: - The second forms of secondary data are external sources which are generally published and are available in different forms and form different sources.

COLLECTION OF PRIMARY DATA

1) PERSONAL INTERVIEW: - A personal interview is face to face communication with the respondent. The interviewer gets in touch with the respondent, asks the questions, and records the answers obtained. It is the interviewers` responsibility to record the answers either during the interview or after the interview. The interview may be conducted at any place, but it is appropriate to meet the respondent at his place of work. The main purpose of this consideration is that the answer must be recorded clearly and correctly. The personal interview may be structured or unstructured.

2) QUESTIONNAIRE: - The questionnaire is a list of questions to be asked from the respondents. It also contains a suitable space where the answers can be recorded. A questionnaire is a method of obtaining specific information about a defined problem so that the data after analysis and interpretation results in a better appreciation of the problem. In preparing a questionnaire, the professional marketing researcher carefully chooses the questions and their form, wording, and sequence. The form of the question asked can influence the response. Marketing researchers distinguish between closed-end and open-end questions. Closed-end questions pre specify all the possible answer. Open end-questions provide answers that are easier to interpret and tabulate. Open-end questions often reveal more because they do not constrain respondents, answers. Finally, the questionnaire designer should exercise care in the wordings and Sequencing of questions. The questionnaire should use simple, direct, unbiased wording and

should be pre tested with a sample of respondents before it is used. The lead question should attempt to create interest.

COLLECTION OF SECONDARY DATA

1) Brochures: - The brochures are the tool used for collecting secondary data was used to know the facility provided by competitors. 2) Internet: - The different websites were visited to collect detailed information about companies and the services provided by them. 3) Books: - For the research and marketing concept some books on research and marketing has been referred.

RESEARCH DESIGN RESEARCH TYPE -Exploratory research METHOD USED- Survey method INSTRUMENT USED- Questionnaire TYPE OF SURVEY- Interview SAMPLE SIZE- 100 SAMPLE TYPE- Convenience sampling DATA USED- Both primary and secondary Questionnaire was used to collect primary data consisting of number of questions based on likert scale and other different techniques. Open ended questions were also used in order to avoid biased responses. Primary data has been collected in the form of interviews from the various product users in Different region. This method has been advantageous as with the use of close-ended questions. The managers have been able to communicate all the information that they could have provided to enhance the efficiency

Secondary Data: Secondary data was collected from journals, annual reports, website etc. Companys annual report: - previous years report has been studied to get the necessary information. Company profile: - as provided by the organization and internet site

Software tools used for data analysis: MS Excel, MS POWERPOINT

DATA COLLECTION- Data collection is an important aspect of any type of research study inaccurate data collection can impact the results of a study and ultimately lead to invalid results Data collection methods for impact evolution vary along a continuum. At the one end of this continuum are quantitative methods and at the other end of the continuum is qualitative method for data collection

2.2 Limitations of the study

Questionnaire used for data collection are subject to errors. Sample size taken was small. We cannot generalize the findings for the rural market. Unwillingness to respond by top management officials owing to their busy schedule. Inability of some of the customers to answer as they could not understand the questions asked.

The study is restricted to selected districts of UTTAR PRADESH. Further, product and brand penetration is examined. As regards marketing of consumer products in rural areas, the study analyzes products from non durable category (a bathing soap, detergents, tea, coffee, shampoo) and from durable category (a wrist watch, television, refrigerator, fan and bicycle).

Rural market is one of the best opportunities for the FMCG sector. In some sense we can say that rural market is future of FMCG

Authentic marketing is the art of identifying and understanding customer needs and creating solutions that deliver satisfaction to the customers, profits to the producers and benefits for the stakeholders. ................... Philip Kotler

CHAPTER III Descriptive Work on Subtopic.

Rural Marketing

In a diverse market like India, having second largest population in the world, the urban-rural divide is quite significant. According to various studies, around 12.2 per cent of the worlds population lives in rural India. Considering this as an untapped potential, a special marketing strategy, namely, rural marketing has emerged. It involves delivering manufactured or processed inputs or services to rural producers or consumers.

The future lies with those companies who see the poor as their customers." - C. K. Prahalad

Another reason that rural market is gaining importance is due to competition in the urban market, the market is reaching towards saturation level as higher capacity of the purchasers have been targeted by the marketers. So the marketers are looking for extending their product offerings to an unexplored market i.e. the rural market. This has also led to the CSR activities being done by the corporate to help the poor people attain some wealth to spend on their product categories. Here we can think of HUL initiatives in rural India. One of such project is the Project Shakti, which is not only helping their company earn revenues but also helping the poor women of the village to earn money which is increases their purchasing power. Also this will increase their brand loyalty as well as recognition in that area.

Rural market can be segmented using the concept of urban orientation. Urban orientation is defined as the degree to which a rural consumer would like to replicate the urban lifestyle. The

higher the urban orientation, the higher will be the requirements for goods and services consumed in urban India and vice-versa. Broadly, the market can be segmented into three segments. Also an interesting fact, most of the Indian villages have a population of less than 1,000, while there are only a few villages where more than 10,000 people live. With such a widespread market, marketers have been finding it difficult to penetrate this vast audience. For a rural marketer, it may not be commercially viable to reach out to villages that have a population of less than 2,000 people which constitutes 87% of the villages in India. Most of the rural audience in the smaller villages come to shop at a nearby haat or travel to a nearby bigger village. Hence, if the marketer is focusing on those 13% (75000) villages, it is possible to cover almost all of the Indian rural audience.

In spite of attraction, it is not easy to enter the market and grab a sizeable share of the market, in the short time. Some of the reasons could be:

Low Literacy and Communication: There are not enough opportunities for education in rural areas. The literacy level is as low (36%) when compared to all- India average of 52%. Due to this, the consumers cannot understand the message that has been communicated through advertisement of the products and services.

Seasonal Demand: Demand for goods in rural markets depends upon agricultural situation, as agriculture is the main source of income. Agriculture to a large extent depends upon monsoon and, therefore, the demand or buying capacity is not stable or regular. Transportation: Many rural areas are not connected by rail transport. Kacha roads become unserviceable during monsoons and interior villages get isolated.

Distribution: An effective distribution system requires village-level shopkeeper, Mandal/ Taluka- level wholesaler or preferred dealer, distributor or stockiest at district level and company-owned depot or consignment distribution at state level. The presence of too many tiers in the distribution system increases the cost of distribution. Keeping these difficulties in mind and to meet the objectives of Rural Marketing, the traditional four P's of marketing - Product, Price, Place and Promotion have been replaced by a different framework for analysis. A number of companies have worked on various elements of the marketing mix to improve the four A's - Affordability, Awareness, Availability and Acceptability for rural markets. FMCG companies innovated on package sizes to introduce low price points. They have customized promotional strategies for rural markets using local language and talent. Some FMCG players continue to expand rural penetration (Tata Tea's Gaon Chalo). Coca-Cola's Parivartan program has trained more than 6,000 retailers to display and stock products. Dabur has created a training module ASTRA (advanced sales training for retail ascendance) in several regional languages. A number of auto companies have launched rural-specific campaigns.

Definitely there is huge untapped potential in rural India. But there are hindrances at the same time. The greatest hindrance is that the rural market is still evolving and there is no set format to understand consumer behavior. Lot of study is still to be conducted in order to understand the rural consumer. Only FMCGs with deeper pockets, unwavering rural commitment and staying power will be able to stay longer on this rural race and hence should venture into this territory.

THE RURAL MARKET ENVIRONMENT:-

The rural market environment need a separate examination as it varies significantly from that of the urban market. We shall deal with the subject under the three headings :1. The rural consumer. 2. The rural demand. 3. Other aspects of the rural market environment.

THE RURAL CONSUMER : A Detailed Profile :Size of Rural Consumer Group In numerical terms, Indias rural market is indeed a large one; it consists of more than 740 million consumers. 73% of Indias total population is rural. The rural market consists of more than 12 crore households, forming over 70%of the total households in the country.

CHARACTERISTICS OF RURAL CONSUMER GROUP Location Pattern :-

Rural Market of India is a geographically scattered market. The rural population is scattered across 5, 70,000 villages. And, of them, only 6300 villages have a population of more than 5,000 each. More than 3 lakh villages are in the category of 500 people or less. Socio-Economic Position :power.

Rural Consumers continue to be marked by low per capita income/ low purchasing

Similarly, they continue to be a traditional -bound community, with religion, culture and tradition strongly influencing their consumption habits. Nearly 60% of rural income comes from agriculture. Rural Prosperity and discretionary income with rural consumers are thus linked to a sizeable extent with agricultural prosperity.

Literacy Level :-

Rural India has a literacy rate of 28% compared with 55% for the whole country. The adult literacy programmes launched in the rural areas are bound to enhance the rural literacy rates in the years to come . The rate is certainly on the low side.

Lifestyle :-

The rural consumers are marked by a conservative and tradition-bound lifestyle. But this lifestyle of a sizeable segment of rural consumers has already changed significantly in recent years .The changes can be attributed to several factors such as: Growth in income and change in income distribution. Growth in education. Enlarged media reach ( particularly television). Growing interaction with urban communities. Marketers effort to reach out the rural market.

Buying Behaviour :-

Buying behavior of rural consumers has been effected by the following factors:-

Changing Profile of Rural Marketing

The position in the rural market was totally different some twenty years ago. At present there is a demand for certain articles like T. V., fans, radio, engine oil, readymade garments, detergents, medicines, etc. New product like toiletries, baby care products and consumer durables are now getting good support in the rural market.

Parle Agro is marketing 80% of its sale in the rural areas. Batliboi and Co. Ltd. is a leading marketer in agricultural implements. Hindustan Lever sells its products like soaps, shampoos, face cream, etc. in all rural markets on a large scale. Kirloskar and Crompton are leading rural marketers in diesel engines and agricultural machinery. In the service sector the Central Bank and Canara Bank are the largest banks in rural India. More and more manufacturers are turning towards rural markets because the urban are getting saturated.

The Indian rural markets have turned out to be gold mine for the marketers in the nineties.

Factors contributing to the growth of rural market:

1. New Employment Opportunities: The income from new employment and rural development efforts launched in the rural areas has increased the purchasing power among the rural people. Self employment policy with the assistance from the bank has become a great success in the rural areas.

2. Green Revolution: A technological breakthrough has taken place in Indian agriculture. Rural India derived considerable benefit from green revolution. Today, rural India generates 185 million tons of food grains per year and substantial output of various other agricultural products.

3. Expectation Revolution among Rural Masses: More than the green revolution, the revolution of rising expectation of the rural people influenced the marketing

environment of rural India. It brought about a powerful change in the environmental dynamics. It enlarged the desires as well as the awareness of the rural people.

4. Favorable Government Policies: As a part of the process of planned economic d e v e l o p m e n t , the government has been making concerted efforts towards rural development. The massive investment in the rural India has generated new employment, new income and new purchasing power. In the recent years as a part of new farm policy, high support prices are offered for farm products.

Various measures like tax exemption in backward areas, subsidy, concessions, incentives, assistances, literacy drive in rural areas has brought rapid growth of rural markets.

5. Literacy Growth: The literacy rate is on the increase in the rural areas. This brings about a social and cultural change in the buying behaviour of the rural consumer. They are exposed to mass media which create new demand for goods and services.

6.

Growth in Income: The rise in the income resulting from the new farming strategy is

adding meaning and substance to the growing aspirations of the rural people. Remittances from Indians working abroad have also made a sizeable contribution to the growing rural income and purchasing power.

7. Attraction for Higher Standard of Living : The rural consumers have been motivated to change their consumptions habits enjoy a higher standard of living by the growing awareness about better living and easy availability of information about the goods.

8. Marketing Efforts: Firms like Bajaj, HLL, etc., have started penetrating the rural market realizing the rising expectations and the demand revolution in the rural India

In this section, various ideas are provided on how to market the program to specific targeted audiences by developing a marketing plan. This research is important because it will confirm who your customers are, what they want and where and when they want it. It can also identify problems in the current operation and find new ways to meet your customers needs. Based on the information you gather about your school and your target audience, you can execute a successful marketing plan.

Difference between rural customer & urban customer: Not only today - but there has been a vast difference between the two markets for a long time now. The difference is not only between urban and rural but also within the rural areas -between regions, states and districts. There is a difference in the media reach, the education levels, in the culture and the type of products that the two markets are exposed to and this leads to a difference in the two markets.

The difference is in things like -- how do you celebrate New Year, how do you celebrate birthdays? Small things like these are celebrated in a completely different manner when the rural and the urban customers are concerned. There is a vast difference in the lifestyles of the people in the two regions.

The kind of choices of brands that a urban customer enjoys is different from the choices available to the rural counterparts. The rural customer usually has 2 or 3 brands to choose from

whereas the urban one has multiple choices. The difference is also in the way of thinking. The rural customer has a fairly simple thinking as compared to its urban counterpart.

The biggest thing is that there is lack of any research into the consumer behavior of the rural areas. There is considerable amount of data on the urban consumer regarding things like -- who is the influencer, who is the buyer, how do they go and buy, how much money do they spend on their purchases, etc. but on the rural front - the effort has started to happen now. So we need to understand the buyer.

Also, whatever little understanding we have is not for the entire industry. There is no collective effort. Some people have spent time in the rural markets, carried out studies and have understood the rural behavior, but their works have not been passed or known to the rest of the industry.

So, an in depth understanding of the consumer is one key area that the industry needs to work on. Second is -- what appeals to him, what is the right kind of products for him. For example can I sell the same Lux or the same Tata Tea that I sell to the urban customer to the rural as well? What needs to be the difference in the marketing mix when we try to sell the same commodity to the 2 different sections? There are vast differences in the rural areas as well. There are some 5, 60,000 villages and some 525 districts and each one is different from the other. The geographical spread is not as homogeneous as it is with the urban areas owing to vast cultural differences

THE WAY THE CONSUMER USES THE PRODUCT:The situation in which the consumers utilize their product also their buying behavior. For example Lack of electricity automatically increase the purchase of batteries by rural consumers. Since the rural consumers cannot use washing powders /detergents powders that much, as they wash their clothes in streams.

Amazing innovator With a queer psychology of purchase and usage, Indian rural market is still a puzzle to marketers. In many a case, it stretches its imagination to find surprisingly different uses of some of the products. And the red-faced marketers admit that they actually sell their products in areas they would otherwise find difficult, simply because there are other uses for them. For instance, in parts of Northern India, condoms are used by weavers as gloves on their fingers to weave fine threads. Lubrication on condoms allows them fine control on threads and protects their sensitive fingers. Buffaloes displayed at the haats for sale are dyed an immaculate black with Godrej hair dye. Horlicks is used as a health beverage to fatten up cattle in Bihar. In villages of Punjab, washing machines are being used to make frothy lassi in bulk. Paints meant for coloring up the rich-smooth walls are used to paint the horns of cattle to make identification easier and to achieve a long-term protection from theft. Iodex is rubbed into the skins of animals after a hard days work to relieve muscular pain. The organizations in question might not be pleased with such usage. However, their moneybags keep on jingling.

Quality consciousness It will be unjustified to think that rural consumers are less bothered about product quality. Even the village buyers desire to buy a quality product and upgrade their quality of life. Marico, an Indian edible oil company, has found the rural consumers in the interior of India willingly pay

a reasonable price premium for branded cooking oil, over community oil, because they are certain of its consistent quality. Unbranded products are often considered by some of them to be adulterated.

An urban area is an area with an increased density of human-created structures in comparison to the areas surrounding it. Urban areas may be cities, towns or conurbations...Unlike an urban area, a metropolitan area includes not only the urban area, but also satellite cities plus intervening rural land that is socio-economically connected to the urban core city, typically by employment ties through commuting, with the urban core city being the primary labor market. In fact, urbanized areas agglomerate and grow as the core population/economic activity center within a larger metropolitan area or envelope. People living there are open, they choose their cultures and their beliefs and share them and that's what makes them a very modern society. They care most about technology, communication, economy, etc and always look forward to develop and extend markets, diversificate products.

TECHNIQUES USED FOR RURAL MARKETING

1. Rural Market Strategies

(Development strategies for rural marketing in India)

An appropriate segmentation of highly heterogeneous rural market and identification of the needs and wants of different segments will form the very basis for rural marketing strategies. The strategies of the 4 Ps of the marketing mix would be an ideal one for the rural market.

A. PRODUCT STRATEGIES
The following are the product strategies for the rural market and rural consumers: 1. Small Unit Packing: This method stands a good chance of acceptance in rural markets. The advantage is that the price is low and is easily affordable by the rural consumer. Products like shampoos, pickles, biscuits, etc have tested this method.

2. New Product Designs: The manufacturer and the marketing men can think in terms of new product designs, keeping in view the rural life style. E.g. P.V.C. shoes and chappals can be considered suited ideally for rural consumers due to adverse working conditions. The price of P.V.C items is also low and affordable.

3. Sturdy Products: Sturdiness of the product either in terms of weight or appearance is an important criterion for rural consumers. For the rural consumers, heavier weight means that the product is more durable, e.g. the experience of torch light dry battery cell manufacturers supports this because rural consumers preferred dry battery cells which are heavier than the lighter ones. 4. Utility Oriented Products: Rural consumers are more concerned with the utility of the product and its appearance. Phillips India Ltd. developed and introduced BAHADUR (a low cost medium wave receiver) during the early seventies. Initially the sales were good but declined subsequently, on investigation it was found that the rural consumers chose to purchase radios for entertainment purposes, not only for news & information. 5. Brand Name: The rural consumers do give their own brand name on the name of an item. A brand name or logo is very important for a rural consumer for identification purposes.

b. PRICING STRATEGIES
Pricing strategies are linked to product strategies. The product packaging and presentation also keeps the price low to suit the rural consumer. 1. Low Cost/Cheap Products: This is a common strategy widely adopted by manufacturing and marketing concerns wherein the price can be kept low by low unit packing like paisa pack of tea, shampoo sachets, etc

2. Refill Packs/Reusable Packaging: Health drinks available in the urban areas. The containers can be put to multipurpose uses, which can have a significant impact in the

rural market. E.g. tea, coffee & many other consumer goods re available in refill or reusable packages. 3. Application of Value Engineering: In the food industry, Soya protein is being used nstead of milk protein. The nutrition content of both being the same, Milk protein is expensive whereas Soya protein is cheaper. The basic aim being to reduce the value of the product so it becomes affordable to a larger segment, thus expanding its market.

c. PHYSICAL DISTRIBUTION STRATEGIES

While it is necessary to formulate specific strategies for distribution in rural areas, the characteristics of the product - whether it is consumable or durable, the life of the product and other factors have to be kept in mind. 1. Coverage of Villages with 2000 & Above Population : Coverage of villages with up to 2000 and above population could be the break even point for a distribution setup. By doing so the percentage of villages covered comes to only 10% of all the villages but the rural population covered will be substantial. 2. Use of Co-operative Societies: Co-operatives have an arrangement for centralized procurement and distribution through their respective state level federation. Such state level federations can be motivated to procure & distribute consumable items and low value items to the members of the society for selling to the rural consumer

3. Utilization of Public Distributor System: The PDS in the country is fairly well organized, whose effective utilization should be explored by the manufacturing and marketing men. Its purpose is to make available essential commodities like food grains, sugar, kerosene etc. to the consumers at a reasonable price. Fair price shops are run by the state civil supplies corporation, co-operatives etc. Who have an arrangement for centralized for procurement and distribution

4. Utilization of Multipurpose Distribution Centers by Petroleum/Oil Companies: Petroleum/oil companies have evolved a concept of multipurpose distribution centers in rural areas. These outlets can be profitably used for selling consumable & durable items. In addition to petrol, diesel etc. fertilizers, seeds, etc. can be stocked at these outlets. 5. Distribution upto Feeder Markets/Mandi Towns: Keeping in view the hierarchy of markets for the rural consumers, the feeder markets and the mandi towns offer excellent scope for distribution. From the feeder towns and the mandi towns the stockist or the wholesaler can arrange for distribution to the village shops in the interior places. 6. Shandies/Haats/Jathras/Melas: These are the places where the consumers congregate as a rule. Shandies/Haats are held on a particular day every week, Jathras and Melas are held once or twice a year for longer durations, normally timed with religious festivals. 7. Agricultural Input Dealers: Fertilizers should be made available to the farmers within the range of about four to five km. from their residence, as per the essential commodities Act. There are about 2 lakh fertilizer dealers in the country both in cooperative & private sector. E.g. Varana-Nagar in Maharashtra, where sugar & milk co-operatives have totally changed the life styles of people. The supermarket in Varana- Nagar caters to exclusively to rural consumer. d. PROMOTION STRATEGIES:

The promotion measure should be cost effective. Word of mouth is an important message carrier in the rural areas and opinion leader play a significant role in influencing the prospective rural consumers about accepting or rejecting a product or a brand. Other attributes are explained as under: 1. Mass Media: Mass media is a powerful medium of communication. The mass media generally used are:

a. Television b. Cinema c. Radio d. Print Media: handbills, booklets, posters, banners, etc 2. Personal Selling and Opinion Leaders: In personal selling it is required that the potential users are identified and awareness is created among them. A highly motivated sales person can achieve this. Word of Mouth holds a lot of validity in the rural areas. This is the reason why opinion leaders are thriving among rural consumers. 3. Special Campaigns: These should be undertaken during harvest & marketing seasons in rural areas. E.g. Tractors owners meet (toner) conducted by MRF.

Evolution of Rural Marketing

PHASE ORIGIN Before midI 1960(from independence to green revolution Mid-sixties (Green II revolution to Pre-liberalization period) Mid-1960s (PostIII liberalization period on 20 century) IV 21st century Developmental marketing
th

FUNCTION

MAJOR PRODUCTS Agricultural produce

SOURCE

DESTINATION MARKET

Agricultural marketing

Rural

Urban

Marketing of Agricultural Inputs

Agricultural Inputs

Urban

Rural

Consumable & Rural Marketing Durables for consumption and production All products and services Urban &Rural Urban & Rural Urban & Rural Rural

Phase I

Before the advent of the Green revolution, the nature of rural market was altogether different. Rural marketing then referred to the marketing of rural products in rural &urban products

Phase II
During these times, due to the advent & spread of the Green Revolution, rural marketingr e p r e s e n t e d m a r k e t i n g o f a g r i c u l t u r e i n p u t s i n r u r a l m a r k e t s & m a r k e t i n g o f r u r a l produce in urban areas

Phase III
The third phase of rural marketing started after the liberalization of the Indian economy. In this period, rural marketing represented the emerging, distinct activity of attracting &serving rural markets to fulfill the need & wants of rural households, peoples & their occupations

Phase IV
Learning from its rural marketing experiences after the independence, the corporate world has finally realized the quick-fix

solutions & piecemeal approaches will deliver only limited results in the rural markets. And, if an organization wants to tap the real potential of the rural market, it needs to make a long-term commitment with this market. Its approach & strategies must not focus in just selling products & services, but they should also aim at creating an environment for this to happen.

The objective of rural marketing in the current phase is the improvement of the quality of life by satisfying the needs & wants of the customers, not through at and-alone products or services, but by presenting comprehensive & integrated solutions which might involve a set of inter- related products & services.

Companies (MNCs) like Pepsi, Coca Cola, L.G., Philips, Cavin Kare are all eyeing rural markets to capture the large Indian market.

BOTTOM OF PYRAMID BY-C.K PRAHALAD

What is bottom of pyramid? The bottom of the (economic) pyramid consists of the 4 billion living on less than$2 per day.for more than 50 years , the world , donor nations , various aid agencies , national governments, and lately ,civil society organisation have all done their best , but thet were unable to eradicate poverty. Prahalad suggests that 4 billion poor can be the engine of the next round of global trade and prosperity and can be a source of innovations . serving the bottom of pyramid customer requires that large firm works collaboratevily with civil society organisation and local governments. Furthermore market development at the bottom of pyramid will also create millions of new entreprneur at the grass root level . Prahalad presents his new view regarding solving the problem of poverty as co-creation solution towards economic development and social transformation of which the parties involved are Private enterprise Development and aid agencies

Bottom of pyramid consumers Bottom of pyramid entrepreneurs Civil society organisations and local government

APPLICATION OF BOTTOM OF PYRAMID This framework provides an impetus for a more active involvement of the private sector in building the marketing ecosystem for transforming the bottom of pyramid . Helps to reconsider and change long held belifes , assumptions and ideologies. Provide clues on developing product and services for bottom of pyramid consumers

ASSUMPTION OF BOTTOM OF PYRAMID The poor can not paticipate in the benefits of globalisation without an active involvement of the private sector and without access to product and services that represent global quality standars.

The bottom of the pyramid market provides a new growth opportunity for the private sector and o forum for innovations . old and tried solutions can not create markets at the bottom of pyramid.

Bottom of pyramid markets must become an integral part of the work of the core business of the private sector . bottom of pyramid markets can not merely be left to the releam of corporate social responsibility (CSR) innitiatives.

Rural media Formal media

It includes Press and print, TV, Cinema, Radio, and Point of purchase and Outdoor advertisement. Reach of formal media is low in rural households (Print: 18%, TV: 27%, Cinema: 30%, and Radio: 37%) and therefore the marketer has to consider the following points:

Newspapers and magazines:

English newspapers and magazines have negligible circulation in rural areas. However local language newspapers and magazines are becoming popular among educated facilities in rural areas. Examples: Newspapers: Eenadu in A.P., Dina Thanthi in Tamil Nadu, Punjab Kesari in the North, Loksatta in Maharashtra and

Tamil magazine Kumudam are very popular in rural areas.

Television:

It has made a great impact and large audience has been exposed to this medium. HLL has been using TV to communicate with the rural masses. Lifebuoy, Lux, Nihar oil etc are some of the products advertised via television. Regional TV channels have become very popular especially in Southern states. Examples: SUN TV is very popular even in rural areas in Tamil Nadu and Asia net is a preferred regional channel in Kerala. Many consumer goods companies and fertilizer companies are using these TV channels to reach the rural customer.

Radio:
Radio reaches large population in rural areas at a relatively low cost. Example: Colgate, Jyoti Labs, Zandu Balm, Zuari industries are some of the companies using radio communication programme. There are specific programmes for farmers like Farm and Home/Krishi Darshan in regional languages. The farmers have a habit of listening to regional news/agricultural news in the morning and the late evening. The advertisement has to be released during this time to get maximum coverage in rural areas. Another advantage is that the radio commercial can be prepared at short notice to meet the changing needs of the rural folk. Example: Release of a pesticide ad at the time of outbreak of a pest or disease in crops.

Cinema:
About 65% of the earnings from cinema are from rural markets. Film viewing habits is high in certain states like Tamil Nadu, Karnataka and Andhra Pradesh. Village theatres do roaring business during festivals by having four shows per day. The

monthly charge for showing an ad film is within Rs.500. Local distributor or dealer who has good contacts with cinema houses in villages can easily monitor this activity. Examples: Films on products like Vicks, Lifebuoy and SPIC fertilizers are shown in rural cinema halls. Apart from films, Ad slides can also be screened in village theatres.

Outdoor advertisements:
This form of media, which includes signboards, wall painting, hoarding, tree boards, bus boards, dealer boards, product display boards etc, is cost effective in rural areas. Symbols, pictures and colors should be used in POPs meant for rural markets so that they can easily identify the products. Generally rural people prefer bright colors and

the marketer should utilize such cues.

Point of purchase:
Display of hangings, festoons and product packs in the shops will catch the attention of prospective buyers. However a clutter of such POP materials of competing companies will not have the desired effect and is to be avoided.

 Direct mail advertising:

It is a way of passing on information relating to goods or services for sale, directly to potential customers through the medium of post. It is a medium employed by the advertiser to bring in a personal touch. In cities lot of junk mail is received by all of us and very often such mails are thrown into the dustbin whereas a villager get very few letters and he is receptive to such mailers.

Wall paintings:
It is an effective and economical medium for communication in rural areas, since it stays there for a long time depending upon the weather conditions. The cost of painting one square foot area is just Rs.10. Retailers welcome painting of their shops so that the shop will look better. Walls of farm houses, shops and schools are ideal places for painting and the company need not have to pay any rent for the same. The walls have to be painted at least one or two feet from ground level. It is better to take permission of the owner. Very often the owner takes responsibility for taking care of the wall painting. Painting to be avoided during election time and rainy season. The

matter should be in the form of pictures, slogans for catching the attention of people. Companies marketing TV, fans, branded coffee/tea, toothpaste, pesticides, fertilizers etc. use wall painting as promotion medium in rural areas.

Tree boards:
These are painted boards of about two square feet in dimension having the picture or name or slogan of the product painted on it. The cost of such a painted board is about Rs.80. These boards are fixed to the trees on both sides of the village road at a height of about 10 feet from ground level. These boards attract the attention of slow moving vehicles like cycles, bullock carts and tractors and people walking on the road. Considering the poor condition of roads, even the buses move at slow speed through village road. Fertilizer and pesticide companies in rural areas extensively use tree boards. These are low priced promotion items and can be used by consumer goods companies too.

Informal/Rural specific media

These media with effective reach and personalized communication will help in realizing the promotional objectives. Companies to suit the specific requirements of rural communication are using a variety of such media effectively and some of the more important media and methods are given below.

 Farm-to-Farm/House-to-House visit:

Rural people prefer face-to-face communication and farm visits facilitate two-way communication. The advantage is that the sales person can understand the needs and wants of the rural customer by directly discussing with him and answer his queries on products and services. Potential customers in the village are identified and the companys/distributors representative makes farm-to-farm visits and highlight the benefits of the products. The person carries with him literature in local language and also samples of products. The person does not sell the product but only promotes the use of the product. Very often the local dealer also joins the representative in making farm-tofarm visits. The dealer clarifies the terms and conditions of sale and also makes independent follow up visits for securing orders. Example: This approach has been found to be very effective for agricultural machinery, animal health products and agricultural inputs. Many LIC agents and companies dealing with high value consumer durables have tried this method with success in rich rural areas.

Group meeting:

Group meetings of rural customers as well as prospects are an important part of interpersonal media. The company is able to pass on the message regarding benefits of the products to a large number of customers through such meetings. Group meeting of key customers are conducted by banks, agricultural inputs and machinery companies in

rural areas. The bankers visit an identified village, get the village people in a common place and explain the various schemes to the villagers. Such meetings could be organized in prosperous villages for promoting consumer durables and two wheelers also. Example: MRF Tyres conduct tractor owners meet in villages to discuss repairs and maintenance of tractors.

Opinion leaders:

Villagers place more emphasis on the experience of others who have used a product/brand to make purchase decision. Opinion leader is a person who is considered to be knowledgeable and is consulted by others and his advice is normally followed. Such opinion leaders could be big landlords, bank official, panchayath-president, teachers, extension workers etc. Examples: a) Mahindra Tractors use bankers as opinion leaders for their product. b) Asian Paints promoted its Utsav brand of paint by painting the village Sarpanchs house a few months prior to the launch if the branch to demonstrate that the paint does not peel off.

The Melas:

Melas are of different types i.e. commodity fairs, cattle fairs and religious fairs and may be held only for a day or may extend over a week. Many companies have come out with creative ideas for participating in such melas. Examples: a) Britannia promotes Tiger Brand Biscuits through melas. b) The mahakumbh at Allahabad is the biggest mela in

India. HLL has put up 14 stalls in the mela grounds for promoting Lifebuoy. Handcarts have been deployed for increasing access.

The Haats:
Traditionally on certain days of week, both the sellers and buyers meet in the village to buy and sell goods and services. These are the haats that are being held regularly in all rural areas. The sellers arrive in the morning in the haat and remain till late in the evening. Next day they move to another haat. The reason being that in villages the wages are paid on weekly basis and haat is conducted on the day when the villages get their wages. For the marketer, the haat can be an ideal platform for advertising and selling of goods. By participating in haats and melas, the company can not only promote and sell the products but also understand the shared values, beliefs and perceptions of rural customers that influence his buying behaviour.

Folk dances:
These are well-appreciated form of entertainment available to the village people. The folk dance Kuravan Kurathi is popular in Tamil Nadu. The troupe consists of dancers, drummers and musicians and they move in a well-decorated van from one village to another village singing and dancing. In a day the troupe covers about 8-10 villages. As soon as the van reaches a village, film songs are played to attract the attention of the villages. This is followed by folk dances. Mike announcement is made about the companys products and leaflets are distributed. After the dance

programme, queries, if any, about the products are answered by the sales person. Folk dance programme costs about Rs.5000 per day and therefore these programmes are conducted during the peak season in selected villages. Examples: Fertilizer and pesticide companies organize folk dance programmes during peak season in selected markets. Thumps Up has sponsored Lavnis, the folk dance programme of Maharashtra and over 30 programmes have been arranged in selected rural markets

Audio Visual Publicity Vans (AVP Vans):

AV unit is one of the effective tools for rural communication. The van is a mobile promotion station having facilities for screening films slides and mike publicity. The sales person makes a brief talk about situation in the village, the products and the benefits. The ad film is screened along with some popular film shots and this continues for about 30 minutes. At the end of the film show, he distributes handbills and answers queries of the customers. The whole operation takes about 1-2 hours depending upon the products under promotion, number of participants in the meeting and time taken for question and answers. The vans move to the next village for the second show. The cost of running a fully equipped AVP unit is about Rs.4000 per day and AVP van operation has to be considered as an investment for business development in rural areas. Example: Companies such as HLL, Colgate, and Phillips have made effective use of AVP vans for popularizing their products in rural areas.

 Product display contests:

Package is an integral part of the product. Its main purpose is to protect the product during transit, to preserve the quality and to avoid any loss in quality and quantity. The main purpose of this contest is to remind the customer to buy the product as soon as he enters the shop. Another objective is to influence the dealer to stock the product and support the company in increasing the sales. The display contest has to be announced well in advance and promotional materials to be distributed to all the selected dealers in a geographical area. Prizes for best displays are announced to motivate the dealers; the contest lasts for about a month. A well-planned product display contest not only increases the involvement of dealers in the companys products but also increases the sales during the contest period. This is used for promoting consumer goods such as shampoos, soaps and toothpaste.

Field demonstration:
This is based on the extension principle seeing is believing and is one of the most effective methods to show the superiority of the companys products to the customers. A progressive farmer who is an opinion leader is selected and the demonstration is conducted in his field in the presence of a group of farmers in the village. The farmers observe the results in the field and the local dealer calls on them in their farms and persuades them to buy the particular brand of pesticide or fertilizer. Examples: a) Spraying a particular brand of an insecticide against insect pests and showing the farmer how effectively the insects are controlled. b) Demonstrating the use of tractor/implements

for different agricultural operations. c) Hawkins pressure cooker has demonstration representatives who carry out demos in rural households. The representative receives 1% commission for every customer who approaches the dealer via demonstrations. e) Similarly effectiveness of detergents, pressure cookers, vaccum cleaners and mosquito coils could be promoted by demonstrations in selected markets.

Field days:
These are extension of field demonstrations. One of the main objectives of following modern agricultural practices is to increase the yield. The company organizes demonstrations in a piece of land belonging to progressive farmers. All the fertilizers, pesticides, nutrients etc. are applied after making field observations. Just before harvest, all the important farmers are invited to see demonstration plot and see for themselves how the yields are better in the plot compared to other fields. Field demonstrations/field days consume lot of time and efforts and therefore have to be planned well.

Information centers:
They provide latest information on cultivation of crops, fertilizer application, weed, management and control of pests and diseases. Experienced agricultural graduates who make frequent visits to the field and advice farmers on modern agricultural practices manage the centers. They also provide information on farm implements, seeds, fertilizers, pesticides, diesel engines, sprayers and tractors etc. Many consumer goods companies have opened show rooms in prosperous rural areas. Example: Hero Honda has opened extension counters with show room facilities in major rural markets.

Strategies opted by different companies

Thanda goes to rural

"Yaara da Tashan..." McCann Erickson's ads with Aamir Khan created universal appeal for Coca Cola

In early 2002, Coca-Cola India (CCI) (Refer Exhibit I for information about CCI) launched a new advertisement campaign featuring leading bollywood actor - Aamir Khan. The advertisement with the tag line - 'Thanda Matlab Coca-Cola ' was targeted at rural and semi-urban consumers. According to company sources, the idea was to position Coca-Cola as a generic brand for cold drinks. The campaign was launched to support CCI's rural marketing initiatives. CCI began focusing on the rural market in the early 2000s in order to increase volumes. This decision was not surprising, given the huge size

of the untapped rural market in India (Refer Exhibit II to learn about the rural market in India). With flat sales in the urban areas, it was clear that CCI would have to shift its focus to the rural market. Nantoo Banerjee, spokeswoman - CCI, said, "The real market in India is in the rural areas. If you can crack it, there is tremendous potential." However, the poor rural infrastructure and consumption habits that are very different from those of urban people were two major obstacles to cracking the rural market for CCI. Because of the erratic power supply most grocers in rural areas did not stock cold drinks. Also, people in rural areas had a preference for traditional cold beverages such as lassi and lemon juice. Further, the price of the beverage was also a major factor for the rural consumer. Godrej to launch small unit packs for soap brands in Bimaru States

IN a bid to make rural inroads, Godrej Consumer Products Ltd (GCPL) has decided to introduce small unit packs of its soap brands in Bihar, Madhya Pradesh and Uttar Pradesh. Introducing its three power brands Cinthol, Fair Glow and Godrej No. 1 in 50-gm SKUs (stock keeping units), Godrej is attempting to reach out to the poor masses in these States. The price of these brands has been pegged between Rs 5 and Rs 4.

Mr Hoshi Press, Executive Director & President, GCPL, told Business Line, "We have decided to target the States with low per capita incomes through our small unit packs. This will be a great opportunity to grow since consumption levels of soap are still low in these States. In fact, these small pack sizes will not be made available nationally and are meant specifically for these three Bimaru States." . However, only certain variants of its three soap brands will be made available. Cinthol Lime Fresh and Godrej No.1 ayurvedic and rose and sandal variants will be sold as lowpriced SKUs in these parts. While the basic Fair Glow Soap will be sold as low-priced SKUs in these States, the company may not do so with the saffron variant. "We expect these brands to get a boost and help make inroads for the company into these States," said Press. Using local radio stations already prevalent in these parts, GCPL hopes to reach out to the locals through AIR. "We will be using radio as a medium to reach out to the local people in their language," he added. By pushing its three soap brands into the interiors of these States, Godrej hopes to build volumes for its power brands. "At the moment, we are learning and trying to understand these markets. Once we feel these brands have been accepted, we will make it a permanent feature in these States," said Press. In the recent past, HLL also introduced Rs 2 packs of 50 gm of its Lifebuoy Active Red variant to build volumes in the sluggish FMCG industry. In 2002-03, toilet soaps accounted for 58 per cent of GCPL's branded sales. Sales in this category grew by 9 per cent over 2001-02. The company's soap brands grew at 11 per cent in volume and 9 per cent by value in 2002-03.

Philips in rural market Consumer electronics major Philips India Limited has embarked upon a paradigm shift in its marketing strategy to arrest falling market share of color televisions by tapping the rural and semi-urban areas.

Announcing this here today, Senior General Manager of Philips India Suresh Sukumaran told reporters the company has created a sub-brand Vardaan' for its CTVs after a long gap of 10 years targeting rural and semi-urban markets.

He said that Philips has drawn up separate communication, pricing and product strategies for marketing CTVs in rural areas.

Quoting statistics, the Philips official said that small screen CTVs (14", 20", 21", and 21" flat) contributed more than 97 per cent of total CTV market in the country.

Deciding to play the volume game now, Philips would launch a series of small screen CTVs under the Vardaan' sub-brand to cater the rural and semi-urban markets.

The official said that Philips, whose CTV market share was stagnant around six per cent for the last two years pan-India, was expecting to take that to ten per cent in the current financial year.

Last year, the company sold four lakh units, which was expected to rise to 5.5 lakh in the current fiscal. He said major portion of the jump was expected from rural areas.

HLL launched project for rural market

SHAKTI-EMPOWERING WOMEN IN RURAL INDIA

FMCG major Hindustan Lever will take its Project Shakti, the rural direct-to-home distributor model, national and reach out to 100 million people in four years' time. Addressing a press conference, M S Banga, chairman HLL, said the project is at present on in Andhra Pradesh but will be soon be rolled out to other remote villages across the nation. The target is to establish access with 100 million people in 3-4 years' time. Banga was in the city to address the Infocom 2003. Emphasising the importance of the project, Banga said the rural economy had immense potential and they were the consumers of tomorrow. Supported by micro-credit, the women from self-help groups were HLL's rural direct-tohome distributors. The idea behind Project Shakti was to help the company reach, penetrate and communicate with rural consumers. The initiative benefited women in more than 4,750 villages.The vision was to change the lives of women in 100,000 villages by making them Shakti dealers. This would provide economic opportunities for the underprivileged while creating a distribution and communication channel for brands to access untapped rural markets with a consumer base of 100 million rural Indians.

Banga said that the model could also be extended for sourcing raw materials for HLL products. When asked whether HLL was open to partnerships, the chairman said the company could take on partner companies in non-competitive businesses if it brought synergies. While maintaining that HLL's power brands also catered to the mass, Banga said that if the need arose the company would consider customising some of its brands to cater to the rural market. Earlier in the day, addressing Infocom 2003, Banga brought out the utility of IT in driving business forward. With the help of IT the company planned to introduce daily planning and operating cycle to provide ready stocks to consumers and also streamline its supply chain management. HLL plans rural thrust for toothpaste brands HINDUSTAN Lever Ltd (HLL) is rejigging its oral care portfolio to arrive at a 50:50 sales turnover ratio between its rural and urban sales for its two toothpaste brands, Closeup and Pepsodent. After removing Aim from its portfolio recently, the FMCG major plans to put all its additional resources behind its two power brands to divide its sales turnover equally between the urban and the rural markets. Speaking to Business Line, Mr Pradeep Banerjee, Category Head, Oral Care, said, "Today we want 50 per cent of our sales from our rural turnover." HLL hopes to increase its sales in the rural market and get at least an additional two per cent penetration.As of now, 60 per cent of HLL's oral division's turnover is from the urban markets while rural sales comprise the rest. The company is now attempting to tilt the balance towards the rural markets to achieve an equal sales turnover ratio between the two. Although it was

Aim which was supposed to drive rural penetration, the company decided to withdraw support to the brand soon after launching it in spite of the brand managing to garner a two per cent share within five months of its launch. Explains Mr Banerjee, "We decided not to fragment our resources and learnt to make choices." With Aim out of its portfolio, HLL now intends putting all its might behind Close-up and Pepsodent to penetrate rural markets. Says an analyst tracking the FMCG sector, "HLL compromised on quality for Aim. Considering Colgate compromised on its profits by relaunching its Cibaca variant at the same price but with a superior product to counter Aim, HLL lost out in the race." According to market research agency ORG-MARG, HLL has a combined market share of 36 per cent in the oral care category, while Colgate still reigns on top with a 46.6 per cent value share. The company also intends increasing the presence of its two brands in some select markets. As Mr Banerjee says, "We believe that Close-up has a strong equity down South so the idea is to reach out to the deep heartlands of this region. Since Pepsodent enjoys equity in the North, we will reach out to the interiors of this region with the brand." HLL has also withdrawn the green variant of Close-up from the market after having removed the Close-up Oxyfresh variant earlier. Instead, it has decided to introduce its red variant with a `Tingly Red' tag and treat it as its flagship brand. Flanking it will be its blue variant called `Eucalyptus Waves' to increase growth in the gel category where growth has stagnated. Meanwhile, yet another variant, Close-up Whitening, which was recently relaunched (with a shade card thrown in) continues to be in the Close-up franchise along with a toothbrush under the same name. Pepsodent Germi Check, the flagship brand flanked by

Pepsodent 2-in-1(devised specifically for the Indian market) and Pepsodent G have also been relaunched in the recent past on the premise of protection from germs. According to Mr Banerjee, Pepsodent's rural shares are lower than its urban shares while Close-up has higher rural shares. However, according to ORG-MARG, both the brands enjoy an equal value share of almost 18 per cent each. While tooth powder and gel have been facing flat growth rates, white paste has been growing at a meager rate of 3-4 per cent in the Rs 1,900-crore oral category. Increasing the growth by extending the brands' franchise is a possibility that HLL is constantly exploring. Says Mr Banerjee, "Our ambitions are high and we are constantly looking at new variations." Considering Colgate, its main competitor, has already launched an electronic toothbrush, HLL may look at brand extensions with a `whitening' proposition. For instance, Unilever already has an array of whitening-based technology-driven products such as whitening strips, tablets and whitening kits. Extending the franchise of Pepsodent and Close-up to these categories is a possibility, according to the company.

Tata Chemicals chalks out plans for Tata Salt: Tata Chemicals has chalked out an aggressive plan including a new positioning for its flagship brand Tata Salt to further increase its market share in the Rs 2000-crore salt market and will use its fertilizer distribution network to reach the rural consumer. "We are positioning 'Tata Salt' as a fast moving consumer good (FMCG) brand despite being a manufacturing company," Prasad Menon, managing director, Tata Chemicals,

said here. He said the company, a market leader in the branded salt market which was about 30 per cent of the Rs 2000-crore salt market, had decided to use its fertilizer distribution network to penetrate the rural market. In line with its new positioning, the company has also spruced up its marketing network which is being set up on the lines of an FMCG company. Mr Menon said that the company was also setting up its own distribution channel. (PTI)

Evereadys Jeevan Sathi Torch:

Evereadys

Jeevan

Sathi brass torch is another example of successful rural specific product strategy. Initially Evereadys brass torch was not picking up well in the rural areas. Union carbide launched a market research study for locating the reasons. The study by the ad agency OBM found that the rural folks rejected the torch since all of its parts are not made of brass .the design, developed abroad, had given the product certain plastic parts, like the reflector. The Indian rural consumer felt that the plastic parts would not durable. OBM also found that the rural people were prepared to pay high prices for the same torch if it were made all brass. Eveready then introduced for the rural market the all brass torch designed to last lifelong and positioned it Jeevan Sathi as a life long companion

LG intend to strengthen its reach in rural India Its a twin-pronged strategy that has worked brilliantly for LG Electronics, India. Two years ago the company's top brass was debating how to reach out to rural India. At one level, the company figured it needed new cheaper products to lure the rural buyer. At another level, it figured that more offices in smaller towns and cities were the need of the hour. LG moved quickly on both fronts. At one level, it has introduced cheaper products like it Sampoorna television range. At another it has gone on an office-opening spree in India's smaller towns. Currently, it has 40 branch offices. That will climb to 150 by year end.

The rural market is going to be the main focus of LG for 2004, which includes marketing activities and other initiatives in the form of surveys and the like. So for that, we are opening many more branches across the country. In September 02 we had only eighteen branches; now we have forty branches.

Additionally, we have 112 area offices, which were not there at all last year; these area offices have been opened in the district-level areas. Below these area offices, we have remote area offices, which we call raos. Currently we have eighty raos, which we are planning to expand to two hundred raos by next year so that we can reach out to the rural market in a better way and feel the pulse of all the consumers and the dealers there.

Videocon with new product Videocon, which sells about 40 per cent of its products in the rural areas, has just begun a fresh thrust to boost sales outside the metros. It's hoping that by year end about 55 per cent of total sales will come from the rural areas. But it isn't designing new products for rural customers. So an entry level 14-inch Videocon CTV will sell for Rs 7,000, both in the cities and the villages. "The thrust is on CTVs, tape recorders, refrigerators, DVD/VCD players as demanded by rural India today," says Dhoot. Opportunities in rural market: Those were the days when a rural consumer went to a nearby city to buy branded products and services. Time was when only a select household consumed branded goods, be it tea or jeans. There were days when big companies flocked to rural markets to establish their brands. Today, rural markets are critical for every marketer - be it for a branded shampoo or an automobile. Time was when marketers thought van campaigns, cinema commercials and a few wall paintings would suffice to entice rural folks under their folds. Thanks to television, today a customer in a rural area is quite literate about myriad products that are on offer in the market place. An Indian farmer going through his daily chores wearing jeans may sound idiotic. Not for Arvind Mills, though. When it launched the Ruf & Tuf kits, it had created quite a sensation among the rural folks as well within few months of their launch. Trends indicate that the rural markets are coming up in a big way and growing twice as fast as the urban, witnessing a rise in sales of hitherto typical urban kitchen gadgets such

as refrigerators, mixer-grinders and pressure cookers. According to a National Council for Applied Economic Research (NCAER) study, there are as many 'middle income and above' households in the rural areas as there are in the urban areas. There are almost twice as many 'lower middle income' households in rural areas as in the urban areas. At the highest income level there are 2.3 million urban households as against 1.6 million households in rural areas. According to Mr. D. Shiva kumar, Business Head (Hair), Personal Products Division, Hindustan Lever Limited, the money available to spend on FMCG (Fast Moving Consumer Goods) products by urban India is Rs. 49,500 crores as against is Rs. 63,500 crores in rural India. As per NCAER projections, the number of middle and high income households in rural India is expected to grow from 80 million to 111 million by 2007. In urban India, the same is expected to grow from 46 million to 59 million. Thus, the absolute size of rural India is expected to be double that of urban India. The study on ownership of goods indicates the same trend. It segments durables under three groups - (1) necessary products - Transistors, wristwatch and bicycle, (2) Emerging products - B&W TV and cassette recorder, (3) Lifestyle products - CTV and refrigerators. Marketers have to depend on rural India for the first two categories for growth and size. Even in lifestyle products, rural India will be significant over next five years. At a recent seminar in Chennai on 'rural marketing for competitive advantage in globalised India', organized by Anugrah Madison Advertising Pvt. Limited, marketing pundits have echoed that a sound network and a thorough understanding of the village psyche are a SINE QUO NON for making inroads into rural markets. The pricesensitivity of a consumer in a village is something the marketers should be alive to. Rural

income levels are largely determined by the vagaries of monsoon and, hence, the demand there is not an easy horse to ride on. Apart from increasing the geographical width of their product distribution, the focus of corporates should be on the introduction of brands and develop strategies specific to rural consumers. Britannia Industries launched Tiger Biscuits especially for the rural market. It clearly paid dividend. Its share of the glucose biscuit market has increased from 7 per cent to 15 per cent.

RURAL AND URBAN CONSUMER A DETAILED PROFILE

1. Size of rural and urban consumer group-rural population is about 73% and urban population is 27% of the total population of india 2. A scttered market the comparision below shows the same urban population is spread over 3200 cities rural population is spread across 5,70,000 villages

REASONS FOR SELECTING MARKET

1. RURAL MARKETING Size of the market Largely untapped Income on the rise/disposable income Income from other than agriculture Income from urban/abroad

GREAT SUCCESS STORIES OF SOME FAMOUS COMPANIES

ASIAN PAINTS DABUR VIDEOCON COLGATE 60% 40% 40% 50%

2. URBAN MARKETING
Large no. of cuctomers Awareness about the product Effective distribution channel

GREAT SUCCESS STORIES OF SOME FAMOUS COMPANIES

FUTURE GROUP DMART GLOBUS 80% 65% 59%

Myth about rural market: Companies harbor a lot of myths too about the rural market. It is a diverse population spread across a vast country, speaking different languages, with different levels of literacy (and now, new literacy, conferred by TV) and composed of big landlords, traders, small farmers, marginal farmers, laborers and artisans.

Disposable income is not low. Per capita annual income in rural areas is Rs 9,481; in urban, Rs 19,407, but remember, in the rural areas, hardly anybody pays home rent, spends money on drinking water or on primary health care, so the disposable surplus is really high, said Kashyap. And the number of middle-class households is 15.6 million in rural areas, and 16.4 million in urban, which is not such a big difference. It's also not true that individuals decide about purchases, it's a collective decision though the influencer, decision-maker, buyer are often different, so marketers would do well to address themselves to several levels.

Impact of globalization

The impact of globalization will be felt in rural India as much as in urban. But it will be slow. It will have its impact on target groups like farmers, youth and women. Farmers, today 'keep in touch' with the latest information and maximise both ends. Animal feed producers no longer look at Andhra Pradesh or Karnataka. They keep their cell phones constantly connected to global markets. Surely, price movements and products' availability in the international market place seem to drive their local business strategies. On youth its impact is on knowledge and information and while on women it still depends on the socio-economic aspect. The marketers who understand the rural consumer and fine tune their strategy are sure to reap benefits in the coming years. In fact, the leadership in any product or service is linked to leadership in the rural India except for few lifestyle-based products, which depend on urban India mainly.

Under penetrated rural market India is the second largest consumer market in the world. With over 1 billion potential customers, it comes as no surprise why consumer goods companies see India as fertile ground for expansion and growth The National Council for Applied Economic Research (NCAER) published a` study on consumer behavior and purchasing power in India. The NCAER classified Indian consumers by their propensity to consume. At the lower end of the scale (the Destitute and Aspirants) are consumers who are in the market for manufactured essential consumables and basic durables. At the top end of the scale (the Very Rich and a part of the Consumers) is a relatively small but rapidly growing segment for branded international products ranging from automobiles and electronics to cosmetics and garments, often at international prices. The middle segment (majority of the Consumers and the Climbers) is in itself highly differentiated, depending on the product, and is price sensitive, requiring a targeted approach to product design and pricing. Over the years, the bottom layer is expected to narrow further while the top level is expected to expand. The 4A approach The rural market may be alluring but it is not without its problems: Low per capita disposable incomes that is half the urban disposable income; large number of daily wage earners, acute dependence on the vagaries of the monsoon; seasonal consumption linked to harvests and festivals and special occasions; poor roads; power problems; and inaccessibility to conventional advertising media. However, the rural consumer is not unlike his urban counterpart in many ways.

The more daring MNCs are meeting the consequent challenges of availability, affordability, acceptability and awareness (the so-called 4 As) Availability The first challenge is to ensure availability of the product or service. India's 627,000 villages are spread over 3.2 million sq km; 700 million Indians may live in rural areas, finding them is not easy. However, given the poor state of roads, it is an even greater challenge to regularly reach products to the far-flung villages. Any serious marketer must strive to reach at least 13,113 villages with a population of more than 5,000. Marketers must trade off the distribution cost with incremental market penetration. Over the years, India's largest MNC, Hindustan Lever, a subsidiary of Unilever, has built a strong distribution system which helps its brands reach the interiors of the rural market. To service remote village, stockiest use auto rickshaws, bullock-carts and even boats in the backwaters of Kerala. Coca-Cola, which considers rural India as a future growth driver, has evolved a hub and spoke distribution model to reach the villages. To ensure full loads, the company depot supplies, twice a week, large distributors which who act as hubs. These distributors appoint and supply, once a week, smaller distributors in adjoining areas. LG Electronics defines all cities and towns other than the seven metros cities as rural and semi-urban market. To tap these unexplored country markets, LG has set up 45 area offices and 59 rural/remote area offices. Affordability The second challenge is to ensure affordability of the product or service. With low disposable incomes, products need to be affordable to the rural consumer, most of whom are on daily wages. Some companies have addressed the affordability problem by

introducing small unit packs. Godrej recently introduced three brands of Cinthol, Fair Glow and Godrej in 50-gm packs, priced at Rs 4-5 meant specifically for Madhya Pradesh, Bihar and Uttar Pradesh the so-called `Bimaru' States. Hindustan Lever, among the first MNCs to realise the potential of India's rural market, has launched a variant of its largest selling soap brand, Lifebuoy at Rs 2 for 50 gm. The move is mainly targeted at the rural market. Coca-Cola has addressed the affordability issue by introducing the returnable 200-ml glass bottle priced at Rs 5. The initiative has paid off: Eighty per cent of new drinkers now come from the rural markets. Coca-Cola has also introduced Sunfill, a powdered soft-drink concentrate. The instant and ready-tomix Sunfill is available in a single-serve sachet of 25 gm priced at Rs 2 and mutiserve sachet of 200 gm priced at Rs 15. Acceptability The third challenge is to gain acceptability for the product or service. Therefore, there is a need to offer products that suit the rural market. One company which has reaped rich dividends by doing so is LG Electronics. In 1998, it developed a customized TV for the rural market and christened it Sampoorna. It was a runway hit selling 100,000 sets in the very first year. Because of the lack of electricity and refrigerators in the rural areas, CocaCola provides low-cost ice boxes a tin box for new outlets and thermocol box for seasonal outlets. The insurance companies that have tailor-made products for the rural market have performed well. HDFC Standard LIFE topped private insurers by selling policies worth Rs 3.5 crore in total premia. The company tied up with non-governmental organisations and offered reasonably-priced policies in the nature of group insurance covers. With large

parts of rural India inaccessible to conventional advertising media only 41 per cent rural households have access to TV building awareness is another challenge. Fortunately, however, the rural consumer has the same likes as the urban consumer movies and music and for both the urban and rural consumer, the family is the key unit of identity. However, the rural consumer expressions differ from his urban counterpart. Outing for the former is confined to local fairs and festivals and TV viewing is confined to the state-owned Doordarshan. Consumption of branded products is treated as a special treat or indulgence. Hindustan Lever relies heavily on its own company-organised media. These are promotional events organised by stockists. Godrej Consumer Products, which is trying to push its soap brands into the interior areas, uses radio to reach the local people in their language. Coca-Cola uses a combination of TV, cinema and radio to reach 53.6 per cent of rural households. It doubled its spend on advertising on Doordarshan, which alone reached 41 per cent of rural households. It has also used banners, posters and tapped all the local forms of entertainment. Since price is a key issue in the rural areas, Coca-Cola advertising stressed its `magical' price point of Rs 5 per bottle in all media.LG Electronics uses vans and road shows to reach rural customers. The company uses local language advertising. Philips India uses wall writing and radio advertising to drive its growth in rural areas. The key dilemma for MNCs eager to tap the large and fast-growing rural market is whether they can do so without hurting the company's profit margins. Mr Carlo Donati, Chairman and Managing-Director, Nestle, while admitting that his company's product

portfolio is essentially designed for urban consumers, cautions companies from plunging headlong into the rural market as capturing rural consumers can be expensive. "Any generalisation" says Mr Donati, "about rural India could be wrong and one should focus on high GDP growth areas, be it urban, semi-urban or rural." Problems in rural marketing; Where the rural market does offer a vast untapped potential , it should also be recognized that it is not that easy to operate in the rural market because of several attendant problems. rural marketing is thus time consuming affair and requires considerable investment in terms of evolving appropriate strategies with a view to tackle the problems. The major problems faced by manufacturing and marketing men in rural areas are described below

1. Underdeveloped people and underdeveloped market; The agriculture technology has tried to develop the people and market in rural areas . Unfortunately, the impact of the technology is not felt uniformly throughout the country .while there are pockets- some districts in Punjab .Haryana or western utter Pradesh where a rural consumer is somewhat comparable to his urban counterpart, there are lager areas and groups of people who have remained beyond the technogial break through. Even today about 75 districts in country are drought prone and no new technology worth the name has percolated to increase in the standard of living of these people in addition, the small agricultural land holdings have enable to take advantage of new technological breakthrough. The number of people below poverty line has not decreased in any

appreciable manner. Thus the rural markets, by large number, by and large are characterized by underdeveloped market. A vast of the rural people image old customs tradition habits, taboos and practices

2. Lack of proper physical communication facilities; Nearly 50% of the villages is the country does not have villages in the country do not have all weather roads. Physical communication to these villages is highly expensive . even today ,most villages is in eastern part today inaccessible during monsoon season. hence, distribution put in by manufacturer prove expensive and some times of no consequences .to be effective the products have to be physically moved to places of consumption or places to purchase.

3. Media for rural communication; Among the mass media, at some point of time, say in late 50s or early 60s ,radio was considered to be a potential ,medium for communication to the rural families . Now the advent and expansion of telecast network appears for easy communication with rural masses. The question is how many people access viewing television? There is a need to examine the ownership pattern of television sets in rural areas to judge the potential reach of this medium. Another Mass Medias Cinema. It has been observed that cinema viewing is fairly satisfactory, where available. Mobile theaters are also good medium but very expansive companies like HLL using these vans found 10 to12 times higher in rural areas than urban areas due to bad roads in areas

4. Hierarchy of markets. Rural consumer has identified market places for different items of their requirements. So there cannot be uniform distribution pattern for all products. It has been seen that 90% of farmers visited the nearest town, where an agricultural produces assembling market is situated at least once a quatter for either selling the produce or for purchase of there requirements . so town/ mandi centers with large hinterland villages become the focal point thus depending upon the purchase habit of rural people. The distribution netwpork for different commodities has to be different.

5. Low level of literacy: The literacy rate is low in rural areas as compare to urban areas. This again leads to the problem of communication for promotion purposes. Print medium becomes in effective and to an extent irrelevant in rural areas since ita reach is poor and so is the level of literacy. The dependent should be more on electronic media cinema, radio and television. While the excess to cinema and radio appears to be fairly easy and common. in not so in case of television. Television advertising is very expensive. Probably it will be prudent to take advantage of such professional rural advertising agencies. The promotion of product along with distribution is also being resorted to by many.

6. Seasonal demand: the distribution of any product in rural areas either agricultural inputs , consumables or durable should necessarily follow a seasonal pattern. Since 75% of the rural income is generated through agricultural operation which is seasonal so the demand pattern is also seasonal. A typical example is that of fertilizers. The demand of fertilizers is always high during the start of kharif and rabi system the fertilizers manufacturers have evolved a distribution pattern so that the seasonal demand can be met. Likewise the demand for consumables and durable will be high during the pek crop harvesting and marketing season. . This is the time at which the rural people have substantial cash inflows. Hence the distribution should be fairly intensive. During harvesting season this arrangement would result in adequate sales realization vise versa in summer months the demand will be very low festivals seasons like sankranti, poangal, vaisakhi or depawali are also demand seasons. So the distribution of rural areas should be more and frequent during the harvest and festival seasons as opposed to a fairly uniform demand pattern in urban areas.

7. Many languages and dialects: Even assuming that media are available for communication or the company commotions its own media vans the large number of languages and dialects very wildly from state to state and reason to reason. The messages have to be delivered in local; languages and dialects. Even though the number of recognized languages is only 16, the number of dialects is estimated to be around 850.

8. Low per capita income: Even though about 33 to 35 percent of gross domestic product is generated by rural areas. It is shared 75% of population hence the per capita income is low compared to urban areas. This apart the distribution of income is highly is qued. Since the land holding patterned itself is esqued thus the rural population present a highly heterogeneous seen. given the low percapita incomes and population spared in the villages, what wiill be the off take of any product by rural consumer, say from avillage shop? What should be the inventory levels to be maintained by the rural shopkeeper and how long will it take for the rural areas shopkeeper to liquidate his stock? if the n company Challenges in rural marketing Around 700 million people, or 70% of India's population, live in 6,27,000 villages in rural areas. 90% of the rural population is concentrated in villages with a population of less than 2000. The statistics is daunting. Particularly for companies, such as ours, which market Packaged Mass Consumer Goods (PMCG) of everyday use, the size of the rural market makes it essential to tap. Indeed, we have traditionally focused on the rural market. Several of our company's major business categories, such as Fabric Wash, Personal Wash and Beverages, already get over 50% of their sales from rural areas. Our distribution system is the best amongst PMCG companies. But we also recognize that there is much more that needs to be done. To service rural markets, the key issues that need to be addressed are availability, awareness and overcoming prevalent attitudes and habits.

CHAPTER IV
DATA ANALYSIS AND INTERPRETATION

Q.1 Which Soap do you prefer to use? a) Lux b) Dettol c) Lifebuoy d) Other

INTERPPETATION:In this survey , it could easily be Conducted that Lux, the product of HUL was highly in demand. Lux the Product of HUL covers 36% of the Market Share. After Lux, the other brands (EXCEPT DETTOL, LIFEBUOY) cover 24% of the market share. Then it is followed by LIFEBUOY, the product of HUL with a market share of 22% which is then followed by DETTOL, the product of RECKITT BENCKISER with a market share of 18%

Q.2 Which Pack do you Prefer to use? a) Single b) Family Pack

INTERPRETATION:In this Survey, the Differentiate was made amongst people with Below Average Household Income and above household income. This classification can be done on the basis of daily expenditure that people make 56% consumer demands single pack 44% consumers demand family packs i.e. 3 in 1

Q.3 Which Tea You Prefer to Use? a) Tata Tea b) Brooke Bond c) Taj Mahal d) Others

INTERPRETATION:In this survey it could easily be conducted that TATA TEA the product of TATA has a market share of 32%. This is followed by BROOKE BOND, with a market share of 28% followed by other brands (EXCEPT TATA TEA, BROOKE BOND, TAJ MAHAL) with a market share of 22%. This is finally followed by TAJ MAHAL, the product of HUL which holds 18% of market share.

Q.4 Which toothpaste do you prefer to use? a) Pepsodent b) Colgate c) Closeup d) Others

INTERPRETATION:In this Survey the Researcher conducted a search in which it could easily be seen that COLGATE, the product of COLGATE PALMOLIVE is the market leader, which covers 35% of the total market. After that, PEPSODENT the product of HUL is demanded by the customers. Which covers 27%of the market share followed by CLOSEUP, the product of HUL is demanded by customers, which covers 22% of the Market Share. This is then followed by others Brands (EXCEPT PEPSODENT, COLGATE, and CLOSEUP) which covers 16% of total market share.

Q.5 Which Coffee do you Prefer to use? a) Bru b) Nestle c) Nescafe d) Others

INTERPRETATION:In the survey, it can be easily concluded that all the brands are facing tough competition . NESTLE, the product of NESTLE S.A&NESCAFE , another product of NESTLE S.A, shares equal market share of 32% each. This means that they are in a very tough competition. This is followed by BRU, the product of HUL which holds , 26% of market share. While the other brands hold only 10% of market share.

Q.6-Which cream u prefer to use? a) Ponds b) Fair & lovely c) Ayur d) Others

INTERPRETATION:In the survey, that conducted, it can easily be concluded the FAIR & LOVELY , the product of HUL holds the major market with a share of 32%. This is followed by , PONDS , another product of HUL , which holds 28% of the market share. This is followed by other brands (EXCEPT, PONDS, FAIR & LOVELY & AYUR) which captures 26% of the market share. This is followed by AYUR the brand of AYUR.

Q.7 Which hair oil do you refer to use? a) Parachute b) Dabur Amla c) Dabur Vatika d) Others

INTERPRETATION:In this Survey, it can easily be concluded that PARACHUTE, the product of MERICO captures 37% of the total market share. This is followed by DABUR AMLA, the product of DABUR which captures 29% of the total market share. This is followed by DABUR VATIKA, another product of DABUR which captures 19% of the market. And after that, followed by other brands (EXCEPT PARACHUTE, DABUR AMLA, DABUR VATIKA) captures 15% of the market share.

Q.8 which biscuits do you prefer to use? a) Marie Gold b) Good Day c) Parle G d) Others

INTERPRETATION:In this survey, it can easily be concluded that PARLE G, the product of PARLE, holds a major market share of 38% this is followed by MARIE GOLD, a product of BRITANNIA which holds 24% of market share. After that, GOOD DAY, another product of BRITANNIA, holds 21% of the market share. This is followed by other brands(EXCEPT MARIE GOLD, GOOD DAY, PARLE G) which hold a market share of 17%.

Q.9 which detergents do you prefer to use? a) Surf b) Rin c) Tide d) Others

INTERRETATION:In this survey, it could be easily concluded that RIN, the product of HUL captures 35% of the total market share. This followed by SURF, the product of HUL which has a market share of 27%. This is followed by TIDE, the product of PROCTER & GAMBLE which has a market share of 27%. This is finally followed by other brand (EXCEPT SURF, RIN, and TIDE) which captures 16% of market share.

Q.10 Which bicycle do you prefer? a) Atlas b) Hero c) Avon d) Others

INTERPRETATION:In this survey, it can easily be concluded that the BICYCLE of ATLAS, captures the major portion of the market with a market share of 37%. This is followed by HERO, which holds 33% of the market share. This is followed by AVON, which holds 22% of the market share. Finally followed by other brands (EXCEPT ATLAS, HERO, AVON) with a market share of 8%

Q.11 which fan does you prefers to use? a) Local Fans b) Polar c) Khaitan d) Crompton

INTERPRETATION:In this survey, it can easily be concluded that the FANS of LOCAL COMPANIES, captures the major portion of the market with a market share of 32%. This is followed by POLAR, which holds 28% of the market share. This is followed by KHAITAN, which holds 22% of the market share. Finally followed by CROMPTON with a market share of 18%

CHAPTER V
5.1 CONCLUSIONS & 5.2 SUGGESTIONS

5.1 Conclusion

Thus looking at the Challenges and the Opportunities which Rural Markets offer to the Marketers it can be said that the future is very promising for those who can understand the dynamics of rural markets and exploit them to their best advantage. A radical change in attitudes of marketers towards the vibrant and burgeoning rural markets is called for, so they can successfully impress on the 230 million rural consumers spread over approximately six hundred thousand villages in rural India.

The rural market is very large in compare to the urban market as well as it is more challenging market. The consumer wants those products which are long lasting, good, easy to use and cheaper. The income level of rural consumers is not as high as the income level of urban consumers thats why they want low price goods. It is one of the reasons that the sale of sachet is much larger in the rural areas in all segments. It is necessary for all the major companies to provide those products which are easy available and affordable to the consumers.

It is right that profit margin is very low in the FMCG products, but at the same time the market size is much large in the rural areas. The companies can reduce their prices by cutting the costs on the Packaging, Application of 4A* is also a major task for the major companies in these areas.

Like:In case of TOOTHPASTE, COLGATE PALMOLIVE holds a major share. Consumers are very concerned about their health, so if any product suits them they prefer sticking to that product. And this product is also available in various packs, so rural consumers can see it accordingly to their buying capacity

As in the case of BISCUIT, PARLE G holds the major market share. Rural consumers favor PARLE G because it is an old organization and it has gained a lot of BRAND EQUITY which finally creates BRAND LOYALTY. In case of BISCUITS, consumers do get brand loyal, because they do not want to take a risk with their tastes. So they prefer sticking to one brand. Though it is the cheapest BISCUIT but still the taste is same and unique. ACHA, SASTA AUR TIKAU

And in case of durable goods like TV FAN, etc in rural areas people generally dont buy the company products, they prefer to buy local products because of lack of knowledge and the main factor is because of income factor, which is quite low in rural areas. Illiteracy is also a main factor. For them there is no such thing Status Symbol. Although, there is a brand loyalty but the percentage is very low.

5.2 Suggestions & recommendations

As a Researcher I would like to suggest the following points, so that the organization can easily sell their products to their customers.

1. However, the demand of a product is also affected by its lifecycle. If the product is in the introduction stage, then it will definitely take some time to capture the market, because in the introduction stage, consumers are not much aware about the product to create awareness amongst the consumers. 2. They should adapt rigorous marketing strategies in order to sustain in the market. 3. There is immense competition in this sector. Therefore, the organization should try to gain competitive advantage against their competitors 4. They should try to reach as many people as Possible. 5. For the organizations that are not much popular amongst the consumers should adopt sales promotion, as their Marketing Strategies 6. Application of 4As has also become an important task for all the organizations ( *4A, Availability, Affordability, Acceptability, Awareness)

CHAPTER VI
bibliography

a. books
1. Dogra Balram, Ghuman Karminder. Rural Marketing. Tata Mc Graw Hill Education, New Delhi: 2008 2. Kumar Awadhesh, Pandey Prakesh Satya. Rural Marketing Indian Perspective. New Age International Publishers, New Delhi: 2005 3. Prahalad C.K, The Fortune at the Bottom of the Pyramid. Pearson Education Inc, New Jersey: 2010 4. Prahalad C.K & Hamel Gary Competing for the Future. Harvard Business School Press in Hardcover, United States: 1994

b. Journal Articles
L.K Vaswani, Rajesh Aithal, G. Sridhar Rural Marketing in the Development Paradigm International Journal of Rural Management: 91-104 (2009) BUSINESS MAGAZINES: INTERNET: Business Today, RMAI www.Indiainfoline.com www.Google.com www. Censusindia.com www.HLL.com Marketing Management- Philip kotler Marketing Management- v s Ramaswamy S Namakumari.

STUDY BOOKS:

http://www. ibef.org/economy/ruralmarket.aspx http://www.indiamba.com/facult_coloum/fc213/fc213.htm http://www.slideshare.net/hemanthcrpatna/a-report-on-toanalyze-the-marketing-of-consumer-products-both-durable-andnon-durable-products-in-rural-areas

CHAPTER VII
APPENDICES

RURAL INDIAa new dawn India needs creative solutions to start a revolution which can take its villages fast forward in time converting them into economically viable units and growth engines, harnessing the power of the villagers, and opening up new horizons with the promise of a better tomorrow.

Significance of Distribution No matter how well devised a companys product, pricing or promotion strategy, the most crucial link in ensuring the success of rural marketing efforts is distribution. Distribution must be strengthened and this would raise investment cost barriers for new entrants. In Rural India, the selection and use of distribution channels is a nightmare. The reason for this is very clear when we consider that on an average, Urban and Rural India both have approximately 3 million retail outlets. However, Urban India has only 4,000 towns where these outlets are located. On the other hand, Rural Indias 3 million outlets are located in 6.3 lakh villages. Thus, marketers are faced with the problem of feeding 3 million shops located in vastly diverse areas each of which records an average sale of only Rs.5,000 per outlet. Further compounding this problem is the fact that even this meagre sale is mostly on credit. The diversity in the distribution of shops is the selflimiting factor in terms of servicing the rural distribution network.

The distribution of outlets however shows that a marketer need not be present in all markets at all times. Being present in 6 lakh villages is virtually impossible for an organization of any size. Rural wealth and demand is concentrated typically at satellite towns, district headquarters, assembly markets and such central locations. Rural distribution has a rigid hierarchy of markets that make channel decisions relatively structured.

It is essential for rural marketing companies to understand this hierarchy. Rural folk are habituated to travelling once a week for their weekly purchases to a satellite town. They do not expect such items to be present in every village. For durables where the outlay involved is typically large, the purchase would be made in an assembly market for reasons of choice and availability of adequate cash flow. This is due to the fact that it is at assembly markets that auction yards are present where the farmers congregate to sell their output. After such sale of produce, they are cash rich and can afford to make such purchases. It is therefore not necessary for a marketer of TV sets to take their distribution channel all the way down to the village shop. A TV will not be sold there as the cash flow does not exist at that point in the hierarchy of markets. A television distributor must be present at assembly markets which are much smaller in number, more controllable, easier to reach and service. Keeping the hierarchy in mind will help decide the optimum level of penetration required to reach a critical mass of rural consumers. Haats Haats are the nerve centre of Rural India. They are a readymade distribution network embedded in the fabric of rural society for over 1000 years. They have been held on a regular basis across the length and breadth of the country for over 1000 years. Right from the time of Chandragupta Maurya, Haats are seen as a place for social, cultural and economic interchange. One in every five villages with a population of over 2000 has a haat. In villages with less than 2000 people this figure reduces to 1 in 20 villages. Typically, an average haat will have close to 300 stalls. A haat usually serves around 5000 visitors. Considering

that the average population of an Indian village is approximately 1000, each haat serves 5 villages. A study estimates that 47,000 haats are conducted in rural India. These rural super markets are much larger than all the world's K-marts and Wal-marts put together. A lot of re-distribution also occurs through haats. This is because, a large number of retailers and sub-wholesalers buy from haats for their village stores. What is most attractive to marketers is that 90% + of sales in haats are on cash basis. Traditionally, in village shops a lot of credit sales occur due to the fact that in a small geographic area of a village, everybody knows everybody. Considering that over 5000 visit a haat from 5 villages, the system gets derelationalised. Apart from the 90% cash sale, 5 to 7% is conducted on barter system and the rest 3 to 5% is on credit. Also attractive to companies wishing to use the system is the low selling overheads. Participation fees at haats are a flat Re.1 to Rs.5 per stall and this rate is common to a giant like Hindustan Lever and the smallest local seller. Distribution costs must be reduced through optimum utilization of the network. Thus, incorporating haats in the distribution strategy of a rural marketing organization selling consumer goods and FMCG products (typically once a week purchase items) is a tremendous opportunity. Perhaps the other most important factor to consider while developing rural distribution strategy is that the move from transactional marketing to relationship marketing is most evident in the village market. A strong bond needs to be created with every consumer even in the remotest village and the smallest town. Marketing in Rural India is undoubtedly a long-haul exercise and one that involves great expense. Only those with a strong mind, a tough heart and stiff hands survive. There is also a need to realise that the dealer is the company's "unpaid" sales force. It is essential to educate and involve him as he is the local company representative and is the only member in the channel of distribution that is in direct contact with the final consumer. The dealers' feedback needs to be obtained as the direction for future strategy emanates here. MARKETING STRATEGIES TO CAPTURE RURAL INDIA SEGMENTATION OF RURAL MARKET The first step is to develop & implement any strategy for the rural market should include the appropriate segmentation of the rural market. The important thing is that appropriate segmentation basis need to be applied. Different product categories have different rural markets to cater to & these can be selected by applying different criteria of segmentation. The organization can do the following thing to start with: Focus on select markets. Focus on select villages.

 BY COMMUNICATING AND CHANGING QUALITY PERCEPTION Companies are coming up with new technology and they are properly communicating it to the customer. There is a trade of between Quality a customer perceives and a company wants to communicate. Thus, this positioning of technology is very crucial. The perception of the Indian about the desired product is changing. Now they know the difference between the products and the utilities derived out of it. As a rural Indian customer always wanted value for money with the changed perception, one can notice difference in current market scenario.

BY PROPER COMMUNICATION IN INDIAN LANGUAGE The companies have realized the importance of proper communication in local language for promoting their products. They have started selling the concept of quality with proper communication. Their main focus is to change the Indian customer outlook about quality. With their promotion, rural customer started asking for value for money. BY TARGET CHANGING PERCEPTION If one go to villages they will see that villagers using Toothpaste, even when they can use Neem or Babool sticks or Gudakhu, villagers are using soaps like Nima rose, Breeze, Cinthol etc. even when they can use locally manufactured very low priced soaps. Villagers are constantly looking forward for new branded products. What can one infer from these incidents, is the paradigm changing and customer no longer price sensitive? Indian customer was never price sensitive, but they want value for money. They are ready to pay premium for the product if the product is offering some extra utility for the premium. BY UNDERSTANDING CULTURAL AND SOCIAL VALUES Companies have recognized that social and cultural values have a very strong hold on the people. Cultural values play major role in deciding what to buy. Moreover, rural people are emotional and sensitive. Thus, to promote their brands, they are exploiting social and cultural values.

 BY PROVIDING WHAT CUSTOMER WANT The customers want value for money. They do not see any value in frills associated with the products. They aim for the basic functionality. However, if the seller provides frills free of cost they are happy with that. They are happy with such a high technology that can fulfil their need. As "Motorola" has launched, seven models of Cellular Phones of high technology but none took off. On the other hand, "Nokia" has launched a simple product, which has captured the market. BY PROMOTING PRODUCTS WITH INDIAN MODELS AND ACTORS Companies are picking up Indian models, actors for advertisements as this helps them to show themselves as an Indian company. Diana Hyden and Shahrukh Khan are chosen as a brand ambassador for MNC quartz clock maker "OMEGA" even though when they have models like Cindy Crawford. BY ASSOCIATING THEMSELVES WITH INDIA MNCs are associating themselves with India by talking about India, by explicitly saying that they are Indian. M-TV during Independence Day and Republic daytime make their logo with Indian tri-colour. Nokia has designed a new cellular phone 5110, with the India tri-colour and a ringing tone of "Sare Jahan se achcha".

BY PROMOTING INDIAN SPORTS TEAM Companies are promoting Indian sports teams so that they can associate themselves with India. With this, they influence Indian mindset. LG has launched a campaign "LG ki Dua, all the best". ITC is promoting Indian cricket team for years; during world cup they have launched a campaign "Jeeta hai jitega apna Hindustan India India India". Similarly, Whirlpool has also launched a campaign during world cup. BY TALKING ABOUT A NORMAL INDIAN Companies are now talking about normal India. It is a normal tendency of an Indian to try to associate him/her with the product. If he/she can visualize himself/herself with the product, he /she become loyal to it.

That is why companies like Daewoo based their advertisements on a normal Indian family. BY DEVELOPING RURAL-SPECIFIC PRODUCTS Many companies are developing rural-specific products. Keeping into consideration the requirements, a firm develops these products. Electrolux is working on a made-for India fridge designed to serve basic purposes: chill drinking water, keep cooked food fresh, and to withstand long power cuts.

BY GIVING INDIAN WORDS FOR BRANDS Companies use Indian words for brands. Like LG has used India brand name "Sampoorna" for its newly launched TV. The word is a part of the Bengali, Hindi, Marathi and Tamil tongue. In the past one year, LG has sold one lakh 20-inch Sampoorna TVs, all in towns with a population of around 10,000. BY ACQUIRING INDIAN BRANDS As Indian brands are operating in India for a long time and they enjoy a good reputation in India. MNCs have found that it is much easier for them to operate in India if they acquire an Established Indian Brand. Electrolux has acquired two Indian brands Kelvinator and Allwyn this has gave them the well-established distribution channel. As well as trust of people, as people believe these brands. Similarly Coke has acquired Thumps up, Gold Spot, Citra and Limca so that they can kill these brands, but later on they realized that to survive in the market and to compete with their competitor they have to rejuvenate these brands. BY EFFECTIVE MEDIA COMMUNICATION Media Rural marketing is being used by companies. They can either go for the traditional media or the modern media. The traditional media include melas, puppetry, folk theatre etc. while the modern media includes TV, radio, and e-chaupal. LIC uses puppets to educate rural masses about its insurance policies. Govt of India uses puppetry in its campaigns to press ahead social issues. Brook

Bond Lipton India ltd used magicians electively for launch of Kadak Chap Tea in Etawah district. In between such a show, the lights are switched of and a torch is flashed in the dark (EVEREADYs tact).

BY ADOPTING LOCALISED WAY OF DISTRIBUTING Proper distribution channels are recognized by companies. The distribution channel could be big scale Super markets; they thought that a similar system can be grown in India. However, they were wrong; soon they realized that to succeed in India they have to reach the nook and the corner of the country. They have to reach the "local Paan wala, Local Baniya" only they can succeed. MNC shoe giants, Adidas, Reebok, and Nike started with exclusive stores but soon they realized that they do not enjoy much Brand Equity in India, and to capture the market share in India they have to go the local market shoe sellers. They have to reach to local cities with low priced products. BY ASSOCIATING THEMSELVES WITH INDIAN CELEBRITIES MNCs have realized that in India celebrities enjoyed a great popularity so they now associate themselves with Indian celebrities. Recently Luxor Writing Instruments Ltd. a JV of Gillette and Luxor has launched 500 "Gajgamini" ranges of Parker Sonnet Hussain special edition fountain pens, priced at Rs. 5000. This pen is signed by Mr. Makbul Fida Hussain a renowned painter who has created "Gajgamini" range of paintings. Companies are promoting players like Bhaichung Bhutia, who is promoted by Reebok, so that they can associate their name with players like him and get popularity. MELAS Melas are places where villagers gather once in a while for shopping. Companies take advantage of such events to market their products. Dabur uses these events to sell products like JANAM GHUTI (Gripe water). NCAER estimates that around half of items sold in these melas are FMCG products and consumer durables. Escorts also display its products like tractors and motorcycles in such melas.

 PAINTINGS A picture is worth thousand words. The message is simple and clean. Rural people like the sight of bright colors. COKE, PEPSI and TATA traders advertise their products through paintings.

1. Some Facts about the rural market 70 % of Indias population lives in 627000 villages in rural areas. 90 % of the rural population is concentrated in villages with a population of less than 2000. According to the NCAER projections, the number of middle and high-income households in rural India is expected to grow from 80 million to 111 million by 2007. In urban India, the same is expected to grow from 46 million to 59 million. Packaged consumer products: More than Rs. 2000 crores Market for Non-food items: Rs. 20000 crores growing at 2.5% p.a. Consumption of pesticides: 68,000 tonnes, growing at 12%p.a. Share of Rural market in overall consumption Toiletries Safety Razor Blades Premium Soaps Tooth Paste Hair Oil OTC products Medicated dress Cold Analgesic Antiseptic Creams 48% 24% 20% 20% 25% 42% 28%

2.) Product Adoption: Hair products were introduced to rural India in an attempt to capitalize on a culture where hair grooming is taken extremely seriously by women. While rural women may wear faded saris and little jewelry, few step out without ensuring that their hair is in place. Consumer goods companies introduced a transplanted product from developed markets, the 2-in-1 shampoo/conditioner. Companies thought that women would be attracted to this product because it was cost-effective; however, initial sales were dismal. What companies failed to recognize is that most rural consumers had previously never used shampoo and did not value or understand the full benefits of conditioner. However, several years back, Hindustan Lever focused on product development strategies for rural consumers who still did not use shampoo in India. Their research indicated that a prevailing consumer habit in rural India was to use soap for hair and body care. Rather than try to change instilled consumer behavior, product developers focused on creating an opportunity. Consumers wanted a product that was convenient and low-cost. The result was a new 2-in-1 soap, a product that cleans the hair and body, and is targeted towards consumers in rural areas.

SOME STRANGE FACTS

Amazing innovator With a queer psychology of purchase and usage, Indian rural market is still a puzzle to marketers. In many a case, it stretches its imagination to find surprisingly different uses of some of the products. And the red-faced marketers admit that they actually sell their products in areas they would otherwise find difficult, simply because there are other uses for them. For instance, Buffaloes displayed at the haats for sale are dyed an immaculate black with Godrej hair dye. Horlicks is used as a health beverage to fatten up cattle in Bihar. In villages of Punjab, washing machines are being used to make frothy lassi in bulk. Iodex is rubbed into the skins of animals after a hard day's work to relieve muscular pain. 3.) Communication Adaptation: Both, washing and for taking bath - one requires water. Now for rural markets there are three sources of water - wells, handpumps and ponds. For the first in the history of advertising - these were branded. Special stickers were put on the handpumps, the walls of the wells were lined with advertising tiles and tinplates were put on all the trees surrounding the ponds. The idea was to advertise not only at the point of purchase but also at the time of consumption. This case shows that the brand was some how relating to the consumer. It was right there when the consumer wants it and responds to his needs when wanted. So the customer could also see the advertising when he was bathing or washing. Now, the customers who bought these brands got a sense of satisfaction by seeing their choice being advertised in these places while a question was put in the minds of the customers who had bought other brands.

Questionnaire
Q.1 Which Soap do you prefer to use? a) Lux b) Dettol c) Lifebuoy d) Other Q.2 Which Pack do you Prefer to use? a) Single b) Family Pack Q.3 Which Tea You Prefer to Use? a) Tata Tea b) Brooke Bond c) Taj Mahal d) Others Q.4 Which toothpaste do you prefer to use? a) Pepsodent b) Colgate c) Closeup d) Others

Q.5 Which Coffee do you Prefer to use? a) Bru b) Nestle c) Nescafe d) Others Q.6-Which cream u prefer to use? a) Ponds b) Fair & lovely c) Ayur d) Others Q.7 Which hair oil do you refer to use? a) Parachute b) Dabur Amla c) Dabur Vatika d) Others Q.8 which biscuits do you prefer to use? a) Marie Gold b) Good Day c) Parle G d) Others

Q.9 which detergents do you prefer to use? a) Surf b) Rin c) Tide d) Others Q.10 Which bicycle do you prefer? a) Atlas b) Hero c) Avon d) Others Q.11 which fan does you prefers to use? a) Local Fans b) Polar c) Khaitan d) Crompton