STUDY ON THE DEMAND EXISTING IN THE RURAL MARKET FOR AMRIT WATER PURIFIER

SUBMITTED TO: Dr. P. Sathyapriya

BY GROUP - 3 Vaishnavi P Ankur Verma Anubhav Gupta Ashraf Basarikatti Ashis Ranjan

Study On The Demand For Amrit Water Purifier| Group - 3

EXECUTIVE SUMMARY___________________________
The increase in the number of people becoming conscious of the risks of drinking contaminated water has led to the rapid rising demand for water purifiers. The Indian rural market with its vast size and demand potential offers great opportunities to the marketers. Even though the rural market is large in size and potential, marketers are not able to reap profits out of the opportunities in the rural market because of the obstacles they are facing in the rural areas. The problems like geographic spread and low population density and low purchasing power posed a great challenge to the marketers in taking the product to the rural market. Apart from this the vast display of buying behaviour in rural segment challenges the marketers in understanding the factors influencing the buying decision of the consumers. This study seeks to understand the influence of various factors in the buying decision of the rural consumers which would help to study on the demand for the product AMRIT water purifier of Eureka Forbes. This study is purely based on the primary data collected using questionnaire. The sample size is 50, taken from the village Anekal. The findings from the study indicate that monthly family income has greater influence on the buying decision of the rural consumers in Anekal. The marketing implications to increase the demand for the product is given based on the findings.

Study On The Demand For Amrit Water Purifier| Group - 3

TABLE OF CONTENTS
Serial Number 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13.

CONTENTS

Executive Summary Introduction Literature Review Research Problem Research Objective Hypothesis Research Methodology Data Analysis Findings Limitations Conclusion Appendix References

Page Number 2 4 5 7 8 8 9 9 - 17 17 18 18 19 - 21 22

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INTRODUCTION_____________________________
Pure and safe drinking water has always been a necessity. In the past few years, Indian water purifier industry has witnessed an exponential growth of 22% CAGR. The water purifier industry sales grew dramatically during FY09 as compared to previous fiscals due to improving demand and expanding production capacity. The industry saw high growth of rate 17% during FY08 due to the increasing awareness for safe drinking water. According to Research, Indian Water Purifier industry will continue its growth trajectory and is expected to witness a turnover growth of more than 22% CAGR during the period between FY11 and to FY14. The Indian market has tremendous potential which is more evident from the fact that global majors such as Philips and Hindustan Lever have stepped in and are looking to increase their share of the market. The three principal players today are Eureka Forbes, KENT RO and Ion Exchange (PRLog, 2010). [1] INDIAN RURAL MARKET: India lives in villages, close to 72 percent of Indian population lives in rural areas. In the country we have 6.36 lakh villages out of which only 13 percent have population above 2000. More than 50 percent of the sales FMCG and Durable companies come from the rural areas. The McKinsey report (2007) on the rise on consumer market in India predicts that in twenty years the rural Indian market will be larger than the total consumer markets in countries such as South Korea or Canada today, and almost four times the size of todays urban Indian market and estimated the size of the rural market at $577 Billion. According to NCAER 2002, the number of rural middle class households at 27.4 million is very close to their urban counterpart at 29.5 million. And between, 1981-2001 there has been tremendous improvement in the literacy levels, poverty and rural housing in the villages of the country. Rural literacy
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levels have improved from 36 percent to 59 percent, the number of below poverty houses have declined from close to half to 46 percent and the numbers of well built houses have doubled from 22 percent to 41 percent. These figures provide us with a clear picture that rural India with the increase in agricultural income and improving standards is on the verge of becoming a large untapped market which marketers have been aspiring for a very long period of time. Thus the current status of rural markets makes it an attractive market for marketers (Aithal, Mukhopadhyay). [2]

LITERATURE REVIEW____________________________
Rural markets in India constitute a wide and untapped market for many products and services which are being marketed for the urban masses. The rural market provides vast potential as many new products have already made their entry into the rural consumer basket. In spite of its large size and high potential, many marketing firms are not able to avail the opportunities in rural market because of problems in selling the goods in rural areas (Rao, 2002). This posed many challenges to the marketers; the first is posed by the geographic spread and low population density in the villages in the country. The second challenge is from the low purchasing power and limited disposable incomes in these parts of the country. But this has been changing in the last few decades. [3] The current scenario is that about 70% of Indias population lives in rural areas. Consumers in this segment have displayed vast differences in their purchase decisions and the product use. Understanding the consumer behaviour is vital while marketing the product in the rural segment. (Loya,).[4] In recent years, the rural consumers are discerning and the rural market is more vibrant. Considering the rate of growth in these markets, it will soon become more successful than the urban market. (Adi, Godrej)

Study On The Demand For Amrit Water Purifier| Group - 3

The factors influencing the rural consumer behaviour are: 1. socio-economic environment of the consumer 2. education/literacy level 3. occupation 4. exposure to urban lifestyles and media 5. involvement of others in the purchase decision 6. marketers effort to reach out the rural markets (Rao, 2008) Socio-economic environment of the consumer influences the buying decision to a greater extent. The income level and the standard of living have a major role to play. Rural segments are ignored by few companies because of the low income level and the conservative attitude of the people in rural areas. Literacy level of the consumers in the rural market in turn explains the awareness of the consumers on health issues. Educated people tend to be more health conscious. Consumers with low-literacy level might want the product if proper awareness is given about water borne diseases and the importance of purified water. Consumers in rural market might be self-employed or employed in other firms. Consumers depending on monthly income will be more conservative. Their perceptions and the buying decisions might be influenced by the occupation factor. Rural consumers prefer to stay in the village rather visiting nearby towns except for markets. They may not have exposure to the urbanized life. This might influence their acceptance for a product. Also, the exposure to media influence on the perceptions and the buying decision of the rural consumers.

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Involvement of others in the purchase decision is yet another factor in this regard. There has been a change in the recent years. In the past, the head of the family used to make the purchase decision all by himself. In contrast, the involvement of the other members of the family has been growing in recent years. An increase in literacy coupled with greater access to information has resulted in this development. The consumers in the rural segments are ignored by most of the companies because of the infrastructure and the cost of reaching out. It is marketers responsibility to find the selling practice which would make the consumers comfortable and get awareness about the product. The method of selling might influence the buying decision of the consumer. [5]

RESEARCH PROBLEM____________________________
In view of the above discussion, this study cites the problem whether Amrit water purifier of Eureka Forbes will be accepted by the rural consumers in Anekal. The rural consumers have been displaying vast buying behaviour. The factors influencing the buying decision in rural segments differ from place to place. This study attempts to study on the consumer behaviour in Anekal market where Eureka Forbes intends to penetrate.

Study On The Demand For Amrit Water Purifier| Group - 3

RESEARCH OBJECTIVE__________________________
The objective is to make a study on the demand for the product Amrit water purifier of Eureka Forbes in the rural market Anekal. In order to make a study on the demand for the product, the marketer should understand the factors influencing the buying behaviour of the rural consumers in Anekal. We consider the factors mentioned in the previous study on the consumer behaviour in the rural market and determine the factor which has most significant influence on the demand for the product in Anekal market.

HYPOTHESIS_____________________________________
The null hypothesis for the influencing factors considered: H1: there is no significant influence of the socio-economic factor on the demand for the product H2: there is no significant influence of the educational factor on the demand for the product H3: there is no significant influence of the occupation factor on the demand for the product H4: there is no significant influence of the exposure to urban lifestyles and media on the demand for the product H5: there is no significant influence of the involvement of others in the purchase decision on the demand for the product H6: there is no significant influence of the marketers effort to reach out the rural markets on the demand for the product
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RESEARCH METHODOLOGY_____________________
In order to understand the perceptions and the buying behaviour of the consumers in Anekal, a descriptive research has been carried out to describe the data and the characteristics about the observations, seeking better understanding about the buying behaviour of the rural consumers. This study is based upon the primary data collected from the sample population in Anekal. The population of this study is taken from Anekal, a rural area quite far from the city zone. The sample size is 50 using simple random sampling out of the whole population available in Anekal. The data was collected using questionnaire comprising of the consumers demographic profile and questions probing the factors influencing the buying behaviour will be developed as follows; What is your occupation? What is your income level? Do you think purifying water will avoid health issues to some extent? What method would you prefer to purify the water? How often you visit cities? Who makes the buying decision in your family? Have you heard about the product amrit water purifier? Would you like to prefer Amrit water purifier?

Study On The Demand For Amrit Water Purifier| Group - 3

DATA ANALYSIS_________________________________
In this study the dependent variable is the demand for the product in Anekal and the influencing factors are the independent variables. The influencing factors considered in this study might not have a significant relationship with the dependent variable because it varies from place to place. Correlation test will be conducted to verify if there exist a significant relationship between the dependent and the independent variables. ANOVA will be conducted to validate and get the values for regression model Regression analysis will be done to determine the coefficients of correlation in order to understand to what extent each factor influences the dependent variable demand for the product. STATISTICAL REPRESENTATION OF MARKET SURVEY : CORRELATION:

Mont Buyin Educa Occ tion level Education level Pearson Correla tion Sig. (2tailed) N 50 50 50 50 50 50 50 50 .224 .008 .098 .037 .118 .313 .279 1 hly g Visit Exposu to city re to Type of Dem and

upati Inco Decisi on me - .372** .175 on

media selling .224

.237 .296*

-.146 -.156

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Occupation

Pearson Correla tion Sig. (2tailed) N

-.175

1 -.159

-.160

.073

-.131

.328*

.088

.224

.269

.268

.615

.366

.020

.545

50

50 .159

50 1

50

50

50 .259

50 -.114

50 .598*
*

Monthly Income

Pearson .372** Correla tion Sig. (2tailed) N 50 .237

.297* .382**

.008 .269

.036

.006

.069

.431

.000

50

50

50 1

50 .276

50 .288*

50 .041

50 .298*

Buying Decision

Pearson Correla tion Sig. (2tailed) N

- .297* .160

.098 .268

.036

.052

.043

.776

.036

50

50

50

50 .276

50 1

50 .209

50

50

Visit to city

Pearson Correla tion Sig. (2tailed) N

.296* .073 .382**

.072 -.252

.037 .615

.006

.052

.146

.618

.077

50 .224

50 .131

50 .259

50 .288*

50 .209

50 1

50

50

Exposure to media

Pearson Correla tion

.182 -.181

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Sig. (2tailed) N Type of selling Pearson Correla tion Sig. (2tailed) N Demand Pearson Correla tion Sig. (2tailed) N

.118 .366

.069

.043

.146

.205

.210

50

50

50

50 .041

50 .072

50 .182

50 1

50 .020

-.146 .328* -.114

.313 .020

.431

.776

.618

.205

.892

50

50

50 .598**

50

50

50 -.181

50 .020

50 1

-.156 .088

- -.298* -.252

.279 .545

.000

.036

.077

.210

.892

50

50

50

50

50

50

50

50

**. Correlation is significant at the 0.01 level (2-tailed). *. Correlation is significant at the 0.05 level (2-tailed). FINDINGS: There is a significant relationship between the following variables. Educational level and Monthly Income. Educational level and Visit to city. Occupation and Type of selling. Monthly Income and Buying Decision. Monthly Income and Visit to city. Monthly Income and Demand. Buying Decision and Exposure to media. Buying Decision and Demand.
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REGRESSION:

Variables Entered/Removed Variable s Variables Model 1 Entered Type of selling, Buying Decision, Visit to city, Exposure to media, Education level, Occupation, Monthly Income a. All requested variables entered. b. Dependent Variable: Demand Remove Metho d d . Enter

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Model Summary Std. Error Mod el 1 R .619a R Square .383 Adjusted R Square .280 of the Estimate .519

a. Predictors: (Constant), Type of selling, Buying Decision, Visit to city, Exposure to media, Education level, Occupation, Monthly Income

FINDINGS: R2 value shows that the independent variables are related to an extent of 38.3%. ANOVAb Sum of Model 1 Regressio n Residual Total 11.310 18.320 42 49 .269 Squares 7.010 Df 7 Mean Square 1.001 F 3.719 Sig. .003a

a. Predictors: (Constant), Type of selling, Buying Decision, Visit to city, Exposure to media, Education level, Occupation, Monthly Income b. Dependent Variable: Demand

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Coefficientsa Standardize d Unstandardized Coefficients Model 1 (Constant) Education level Occupation Monthly Income Buying Decision Visit to city Exposure to media Type of selling -.033 .173 -.025 -.189 .851 -.012 -.001 .108 .119 -.015 -.002 -.106 -.012 .916 .991 -.090 .086 -.140 -1.047 .301 -.002 -.453 .117 .109 -.003 -.590 -.019 -4.140 .985 .000 B 2.418 .083 Std. Error .406 .116 .097 Coefficient s Beta t 5.952 .710 Sig. .000 .481

a. Dependent Variable: Demand **. Coefficient is significant at the 0.01 level . *. Coefficient is significant at the 0.05 level .

FINDINGS: There is a significant impact of Monthly Income on Demand of the product with less than 1% significant level.
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 INDEPENDENT VARAIBLE : 1. Educational Level 2. Occupation. 3. Monthly Income. 4. Buying Decision 5. Visit to City. 6. Exposure to Media. 7. Type of Selling. DEPENDENT VARIABLE Demand for the product. HYPOTHESIS :

H0: There is no significant influence of Educational level, Occupation, Monthly Income, Buying Decision, Visit to City, Exposure to Media and Type of Selling on Demand of the product. REGRESSION LINE : Y = ^ + ^x1+ ^x2+ ^x3+ ^x4+ ^x5+ ^x6+ ^x7 Where, Y= 2.418 - 0.453 x (Monthly Income) ^ = constant value of the dependent variable. ^= Beta value of the variables. X1-X7 = independent variables.

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 ANOVA TEST :

Since the Significance value is less than 1%(0.01) we reject the Null hypothesis (H0) , which states that there is a significance influence of Educational level, Occupation, Monthly Income, Buying Decision, Visit to City, Exposure to Media and Type of Selling on Demand of the product. RESULT :

Monthly Income has a significance level of impact on Demand for the product with less than 1% (0.01) level of significant, but the Beta value of Monthly Income is negative which means that if Monthly Income increases the Demand of the product will decrease.

FINDINGS________________________________________
The study on the demand for Amrit water purifier gives a brief idea about the market scenario of the rural market Anekal. The study shows how different factors influence the buying behaviour of the consumers in the rural market. These factors change with demographics and geographies which show huge diversity of buying behaviour in rural and urban market. The finding which we got from the study is that the Monthly Income has a great influence on the demand of the product, as the income level rises the demand of the product goes down and vice versa.

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LIMITATIONS____________________________________
Although all the efforts have been made to make the results as accurate as possible, yet the survey suffers from some limitations. Following are some of the limitations of the study. The purpose of mentioning these limitations is not to dilute or decrease the quality of results rather to enable the reader to judge the validity of the result regarding the study. Following are some limitation of the study. Sample size is limited due to cost constraint. Geographical area is limited to Anekal area Bangalore. Most of the users don't know about water purifier so they might assume the answers. Many respondents were not interested to give the required time to fill the questionnaire.

CONCLUSION____________________________________
This study revealed the insights about the factors influencing the buying behaviour of the rural consumers. The findings are made by using the responses provided by 50 rural consumers. This study suggests the marketers to focus on the promotional activities since the result of the test indicates that the monthly family income factor influences the buying decision to a greater extent compared to the other factors.

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APPENDIX_______________________________________
The questionnaire used for collecting the primary data. CUSTOMER QUESTIONNAIRE Dear respondent, We, students of Alliance University would like you to fill up this questionnaire which would help us to make study on the demand for the product- AMRIT water purifier of EUREKA FORBES. We request you to fill in the questionnaire with at most accuracy. The information provided by you will be used only for the academic purpose.

1. Name 2. Gender 3. Education : a) Nil d) Post graduate

:_________________________________ : a) Male b) Female

b) High school

c) Graduate

4. occupation : a) Business 5. Monthly family Income : a) Upto Rs 10,000 c) Above Rs 25,000

b) Employee

c) Others__________

b) Rs 10,000- Rs 25,000

6. How many members are there in your family? a) 2 b) 2-4 c) >4

7. Who makes the buying decision in your family? a) Man b) woman c) consult with everyone

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8. How often you visit city in a month? a) 1-2 b) 2-5 c) more than 5 times

9. What level of importance do you give for purified water in your daily life? Very high High Medium Low Very low

10. Do you agree that purifying water will help in avoiding health issues to some extent? a) Yes b) No

11. How do you purify your water? a) Cloth b) Boil c)Water purifiers d) Others_______

12. Do you think water purifier is important? a) Yes b) No

13. What do you expect in a water purifier? a) Ease of use b) Durability c) Quality

d) Others ____________ 14. What kind of water purifier would you prefer? a) Electrical b) Non-electrical

15. How much would you spend on Water purifier? a) Rs 1000 b) Rs 1000 Rs 1500 c) Rs 1500- Rs 2000

16. Have you heard of the product AMRIT EUREKA FORBES? a) Yes b) No

17. If yes, how did you come to know about the product? a) TV d) Friends b) Newspaper Ad c) Local magazine

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18. If from friends, what feedback you have received about the product? a) Bad b) Good c) Very good d) Excellent

19. Do you think AMRIT is affordable for you? a) Yes b) No

20. What type of selling makes it comfortable for you to buy? a) Personal selling b) Retailers c) self-groups

21. Would you prefer to buy AMRIT water purifier? a) Yes b) No

22. Your expectations from a water purifier? . . . THANK YOU FOR YOUR COOPERATION. . .

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REFERENCES____________________________________
[1] PRLog(press release) - Oct 2010 India water purifier market outlook 2014 http://www.prlog.org/10978400-india-water-purifier-market-has-tremendousgrowth-potential.html [2] Rajesh k Aithal and Arunabha Mukhopadhyay http://www.csi-sigegov.org/3/32_319_3.pdf [3] Consumer behaviour in rural market http://books.google.co.in/books [4] Prof. Arpit Loya consumer behaviour and rural marketing http://www.sapientindore.org/sm/mba/semiv/405m/rural%20consumer%20beha vior.pdf [5] V S Rama Rao, Feb 2008 http://www.citeman.com/2777-buying-behaviorof-rural-consumers/

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