PROJECT REPORT

ON

“STUDY ON RURAL MARKETING -“WITH SPECIAL EMPHASIS ON

CUSTOMER PREFERENCE FOR “HUL” IN RURAL INDIA”

AT

RURAL RELATIONS PUNE

BY

ARUN BISHNOI

FOR THE PARTIAL FULFILLMENT OF THE COURSE

PGDM [AGRIBUSINESS MANAGEMENT]

MITCON INSTITUTE OF MANAGEMENT

BALEWADI, PUNE – 411045

2008 – 2010
 ACKNOWLEDGEMENTS

It is a pleasure indeed to have this opportunity to release the feeling of gratitude imprisoned
in my heart to a number of helping hands who not only helped me in shaping up this project
work but making it a successful one.

I am thankful to the Dean Prof. Sanju Davis(Dean) and Director Dr. Vidyadhar
Vedak(Director) Santosh Mahajan(Registrar) whom I always looked upon for inspiration in
difficult times during the project work and who provided me with a congenial and free
working environment to shape this project work.

I am deeply indebt to my company guide and Mr. Depender, HR coordinator Enola Braganza,
miss Kadembari whose inspiring leadership skills coupled with innovation which helped me
in dealing with the problems on and off the project work.

My sincere gratitude goes to Prof. Jeevan Nagarkar, my mentor who helped me in the various
stages of the project work with her experience and positive criticism.

My sincere gratefulness to Mr. Nikhil, Marketing head of ICICI bank. who helped me with
the formatting of the report. The project would have been incomplete without the much
needed help from Miss kadembari., Prdeep Arora, SCHD in ICICI Prudential Sriganganagar.
I always discussed my problems with them and was never let down.

2
I would do injustice if I do not mention the names of my colleagues, Pradeep bhambhu and
Pramod gupta, who were always there with me during the hard fieldwork in summers.

I would certainly miss out if I do not mention the support, moral and financial; form my
family which was so important during the duration of the project.

I thank my friends and my roommates for bearing me and supporting me throughout the
research. They were the source of inspiration whenever I needed. Above all I thank my
family, especially Mum, Ashok for their constant motivation and support. It was just
because of their divine love and support that made me work properly and complete my
objectives in a splendid manner.

Last but not the least my thanks to all my colleagues and the staff of rural relation Pune for
their inspiration and support.

ARUN BISHNOI

(PGDM AGRIBUSINESS)

3
 INDEX
Sr. No. Topics Page No

1 Executive Summary 4

2 Industry Profile 7

3 Company profile. 13

4 Research Problem and its background 18

4
5 Review of Literature. 22

6 Objectives and Scope 31

7 Research Methodology 34

8 Data Presentation and Analysis 39

9 Findings 61

10 Suggestion 67

11 Conclusion 72

12 Limitations and scope for further studies 69

13 Annexure 69
a) References
b) Questionnaire, pie charts, graphs

5
EXECUTIVE SUMMARY

6
The main objective of the project is to get the full knowledge of the products of
the HUL and what are they doing to get the customer loyalty, to maintain their
market. This is also to find the preferences of customer and there market
knowledge and product information, information about the presence of the rival
of HUL and all the other options they have in the market. What are the
techniques they adopt to know about the preferences and changing needs of the
customer?

HUL are also looking to tap the market in rural sector, so they also taking into
consideration the needs and wants of the people there. They are also studying
the consumption habits of the rural people. Like most of them are daily wage
earners or small peasants, so they are studying the buying patterns of them
also.

In country like India, where the 70% of the people live in rural area, the rural market holds a
lot of marketing potential. There is a wide spread difference in the standard of living between
urban and rural India. In order to launch products and develop advertising for rural market
there is a need to understand both the rural context and also the consumer very well.
Promotion of brands in rural markets requires the special measures. Due to the social and
backward condition the personal selling efforts have a challenging role to play in this regard.
The word of mouth is an important message carrier in rural areas. Infect the opinion leaders
are the most influencing part of promotion strategy of rural promotion efforts. The experience
of agricultural input industry can act as a guideline for the marketing efforts of consumer
durable and non-durable companies. Relevance of Mass Media is also a very important
factor. The strong Indian brands have strong brand equity, consumer demand-pull and

7
efficient and dedicated dealer network which have been created over a period of time. The
rural market has a grip of strong country shops, which affect the sale of various products in
rural market. The companies are trying to trigger growth in rural areas. They are identifying
the fact that rural people are now in the better position with disposable income. The low rate
finance availability has also increased the affordability of purchasing the costly products by
the rural people. Marketer should understand the price sensitivity of a consumer in a rural
area. This research paper will be therefore an attempt to study the brand promotion in the
rural market and the overall potential of the rural market. Branding correlates with Image
Building in an organization vis-à-vis its products produced/services rendered. In the vicinity
of today's Marketing scenario along with advancement in technology, Brand Management is
the order of the day. In the process of branding, the aspect of brand activation at ATL (above
the level) and BTL (below the level) makes a vital contribution for the marketing journey. To
attain a safe platform in Brand activation, the Marketing Managers pay attention and focus in
a diligent manner on the value based credentials of the users in the Marketing arena. A full-
fledged dedicated team with multi focused thoughts only can do the needful for the successful
brand management. Good branding strikes a chord with viewers help them relate with the
product and reflect their aspirations. The studies suggest that there has been extra-ordinary
growth in this sector and the trend is likely to continue over a period of tie as the market is in
the very initial stages of the life cycle.

8
9
 INDUSTRY PROFILE

Rural relation an market base company who working in rural market. Who helps companies
to provide helps for penetrate and develop their business circle and make brand relationship
with customer in rural market. many other companies working for pan network in rural

10
market and helps companies to make rural market more loyal to that companies. And helps
by market research in rural market for helps them to increase in market share.

Why Direct Marketing and relationship marketing?

• Reaches the consumer individually
• Consumers have the privilege to touch & feel the product
• First hand information to the consumer
• Direct interaction which generates on spot feedback Sampling
• At low cost gives larger impact & reach
• The literacy level being low this is the best medium to reach
• Sizeable rural consumers cannot be reached both by TV as well as the print medium
• Personalized communication
• Can be customized

Mainly market research companies work for corporate prospective and social prospective

✔ Sampling activities in villages

✔ Social-led activities

✔ Identifying franchisees

✔ Lead-generation activities
✔ Customer profiling activity

✔ Information-led services on sms

✔ Organize training programs

✔ Direct mailing activities

11
 ✔ Media, PR and on-ground support

✔ Corporate Social Responsibility (CSR)

✔ Exhibitions

There are many companies who are doing market research in rural market
1) Rural relation

2) Ndc india

3) Anugrah Madison

4) MART

5) Sampark public relation,

6) Ogilvy Activation

7) Linterland

8) RC&M

9) Impact Communications

10) Kripa Outdoor Publicity

11) Indian Agribusiness Systems

12) Rural Eight.

2) Ndc India working in rural India for helps for-

✔ Rural branding

12
 ✔ Rural market research

✔ Rural communication campaign

✔ Rural events

✔ Rural DM campaigns

✔ Db creation and Management

3) Mart

Established in 1993, MART is a pioneer in the rural domain and over the years has
emerged as the Leading Rural Consultancy Organization.

For both development and corporate sectors, rural marketing was little more than a black box.
This huge knowledge gap motivated our founder to create MART in the year 1993. The aim
was to equip both players with relevant rural solutions.

They started by providing handholding services to NGOs and development projects. Today,
our range of services includes research, strategy formulation, implementation and capacity
building, which has helped us emerge as the only one-stop rural solutions provider of its kind
not just in the country but in the subcontinent.

What Mart do

13
MART’s expertise lies in its understanding of the Indian rural way of life. An understanding
that has been built over years of interaction and engagement with rural India. An
understanding that is constantly being revitalized and renewed as Rural India evolves in an
ever-so-dynamic manner. Today, Rural India is as much about unchanging traditions as it is
about changing lifestyles and evolving value systems. In such a dynamic environment, our
clients have come to rely on us to provide them with accurate, insightful and contemporary
knowledge. They place their trust in us and partner us in their search for relevant solutions.

MART enjoys a unique position as a rural-solutions facilitator for both the corporate and
development sectors. We bring to the table expertise and experience that have been garnered
by handling mega assignments. We have handled such mega projects for the corporate sector
as well as the development sector and non-governmental agencies.

3) RURAL EIGHT

MISSION

Rural Eight is the foremost pan India provider of audio visual van promotions. A marketing
partner with an extensive awareness of the Indian terrain and consumer behavior.

VISION

To get pan India recognition as a one stop shop providing innovative brand solutions for all
avenues of rural advertising

4) AGRI WATCH.

14
 ✔ Prices at major national & international markets

✔ Demand supply analysis

✔ Price Trend forecasting
✔ Export/Import trade flows & Port Statistics
✔ Crop Forecasting
✔ News Analysis
✔ Freight Market information
✔ Weather News & its impact
✔ Expert opinion
✔ Other topics of commercial interest
4)Indian Agribusiness Systems Private Limited (IASL) is an information service
provider in Agriculture, Food Processing, Social Development and allied sectors. Started in
March 2000, IASL provides services in Commodity Research, Trading, Publishing,
Consulting and Manpower recruitment. IASL consulting division comprises of consultants
with background in business consulting, market research and agri-business specializationOur
Consulting team works with clients to build sustainable, profitable growth through superior
market understanding. We help clients stimulate growth through a comprehensive approach
to business processes and systems that covers strategic issues, tactics, and organizational
choices. We work with the not-for-profit sector in India to enhance execution skills in rural
and agri-sector intervention areas

15
Demographic details of Indian Rural Markets:
• About 285 million live in urban India whereas 742 million reside in rural areas,
constituting 72% of India's population resides in its 6, 27,000 villages.
• The number of middle income and high income households in rural Indian is expected
to grow from 46 million to 59 million.
• Size of rural market is estimated to be 42 million households and rural market has
been growing at five times the pace of the urban market.
• More government rural development initiates.
• Low literacy rate
• Increasing agricultural productivity leading to growth of rural disposable income.
• Lowering of difference between taste of urban and rural customers

Rural Initiators

"Going rural" the new marketing mantra-all corporate companies agreed that the rural market
the key to survival in India. The real India lives in villages-6, 38,365 villages to be precise.
This is where the fortunes of many of Indian biggest corporations are likely to be shaped. To
expand the market by tapping the countryside, more and more MNC`s are foregoing into
rural markets. Among those that have made some headway are HLL, Coca-cola, LG
Electronics, Britannia, Standard life, Philips, Colgate Palmolive, ITC and the foreign-
invested telecom companies. Gone are the days when a rural consumer went to a nearby city
to but branded Products and services`. Time was when only a select household consumed

16
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.

COMPANY PROFILE
17
RURAL RELATION is a premier integrated rural consumer Relationship based
Organization. Rural relation is working in more than 10 states of India. It is India’s largest
rural relationship based company. Rural relation has base with 28000 villages, It have
collected data of around 20000 villages, and over 300 village developers who assist us in
their projects. These village developers are local youth, handpicked and trained from that
region and most are well-connected by cell phones and emails. Some of them have handy
cams to record data and for other useful information. Rural relations have more than 14 years
of experience. Rural relation building relationships in rural India with key influencers.

18
PRADEEP LOKHANDE (DIRECTOR) says that

Some dreams are big. Only mine was a far simpler one and yet a
mission of sorts. I quite simply wanted to reach out to rural India and contribute to its
development. I set out on this mission 15 years back.

I embarked on a journey of discovery, to find out what makes the most of our India. Though I
myself hail from a village, I knew that deep down there’s more to life than what I had seen or
lived myself. I wanted to know the essence of the various traditions, cultures and soak in its
thinking. It was a journey of 40,000 villages of which I had personally visited 4000 of them
across the country. I tried to understand rural India’s administration methodologies, markets
or the bazaar-haat systems and the process of the education system.

In the process of my journey, I established direct contact with opinion makers in villages and
started recording obscure details of the local economy. And in 1996, I made my first
customers, Tata Tea and Parle to delve in the data that I had collected. Since then there has
been no turning back.

One key area of my interest was Information Technology. Many world names have taken
various steps to take the age information to rural India.

Yet I thought there could be more concrete ways to do more in this area. The intention was
not to make computer literates of people but at least to get them to touch, feel and try
computers.

I began to install used computers in villages, particularly in secondary schools, where the
interest and inquisitive levels were very high. When I personally could not find the means

19
and finance to progress, I appealed to individuals, organizations and corporate to contribute
used machines.

Today I have succeeded in installing 600 computers across 540 villages.

This inspired me to initiate yet another movement called the Non-Resident Villagers.

Rural relation NETWORK PAN-India-

Presence in the following states –

1) Maharashtra.
2) Gujarat.
3) Madhya Pradesh.
4) Utter Pradesh.
5) Chhattisgarh.
6) Tamil Nadu.
7) Uttatarkhand.
8) Karnataka.
9) Rajasthan.
10) Andhra Pradesh.

SOCIAL PROSPACTIVE
Search for your village and notice the changes there in the Changing villages section. View
video recordings to see the places of action and meet professionals in villages in happening
places.

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CORPORATIVE PROSPACTIVE

Check out our work for clients like Reliance Money, HLL, P&G, ICICI Bank, Telco,
HPCL, and many more, learn about our latest offerings … The Rural Barometer (TRB) (first-
hand information on leading brands) and Rural Talent (recruitment services division)
...more

The Rural Barometer (TRB)

'It's your own brand showcase to rural India.' Welcome to the glimpses on availability,
distribution, shelving, servicing and reaction on various other brands present in rural India.

Market visits particularly to rural areas have become an absolute essentiality in the world of
sales and marketing. Visits like these mean planning, travel time and cost. It is much more
than a mere market visit. In fact this page will take you way beyond the market visit. It is a
comprehensive tour of the village you’re looking to visit on your desktop through streaming
videos.

The rural barometer is India’s first subscription-based information service which will help
you to explore rural India. This is possible through video-recordings made by our village
developers TM. The rural barometer will act as your Knowledge Partner and help you gain
valuable insights. Simultaneously it lets you learn about other leading players in your
segment. There are different attractive packages available on The Rural Barometer,
categories of which are listed below.

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Rural relation provide facts & figures for: -

Promotion
Distribution • Pop/pos
• Innovation
• Product Availability.
• Recall of promotion
• Reach of product.
• Effectiveness
• Procurement Source.
• Frequency of product delivery.
• Shelf space of brands.

Media partners

• TV/Radio habits of the family

• Ad recall
• Effectiveness of ads
• Outdoor media recall
• Program preference

Rural champion

Another social initiative from rural relations is rural champions - identifying and recognizing
individuals and groups of people who are tirelessly working for their village or bringing
about a change despite limitations. They are the motivated, self-starters who need to

22
be encouraged. You can hear them and see them through the many video recordings on our
site, covering various contributions made by them. From solution for water problem to
building awareness on Right to Information to adopting eco friendly methods of farming or
even in eradication of the perennial alcohol problem, their stories are unique and inspiring.
You can contact them and support them directly or through us.

Gyan-key

Motivating students in villages of India to develop reading and learning...

Gyan-Key is working towards opening a library in a secondary school in key villages across
states of India. It is a unique concept – a library of the students, for the students and by the
students.

The library will be run by one of the girls (Gyan-Key monitor) from that village studying in
class VI. Each library to start with will have minimum 150-200 books in that local language
covering various subjects. To instill a sense of ownership, students will be encouraged to
donate books, (regardless of their value) for ‘their’ library on their birthday. This will create a
feeling of belonging.

You too can participate in our movement. At just Rs. 5000/- you have a chance to contribute
for a worthy cause - provide an opportunity to instill learning to approx 150-200 students of
8-10 villages. To build transparency, the money will be collected in the form of cheque
drawn directly in favor of the publisher. We will provide you with letters from the schools

17
and some reactions from students once the library is established besides regular updates on
the progress.

17
RESEARCH PROBLEM AND ITS
BACKGROUND

18
RESEARCH PROBLEM

HUL is facing the problem rather challenges from

✔ Large number of players in the market

✔ Continuous changes in the taste and preferences of the customers such problems were
identified as Research Problems and the objective statement was formed on its basis.

The research problem is that of study of rural market– with special emphasis on Customer
preference for HUL in rural India through Rural relation. And understanding the process of
rural marketing and the underlying problems within and measures taken thereof.

Research to find out following

✔ Acceptability among the customers

✔ Promotional analysis
Rural relation is an organization which is working in rural market for various companies.
Who helps them for provide information about product with helps of market research? and
helps in companies as end to end users for establish in rural market.

17
Rural relation worked on project for leading companies like ICICI prudential, HLL, Rasana,
and hutch. Rural relation building relationships in rural India with key influencers.

Abstract

In country like India, where the 70% of the people live in rural area, the rural market holds a
lot of marketing potential. There is a wide spread difference in the standard of living between
urban and rural India. In order to launch products and develop advertising for rural market
there is a need to understand both the rural context and also the consumer very well.
Promotion of brands in rural markets requires the special measures. Due to the social and
backward condition the personal selling efforts have a challenging role to play in this regard.
The word of mouth is an important message carrier in rural areas. Infect the opinion leaders
are the most influencing part of promotion strategy of rural promotion efforts. The experience
of agricultural input industry can act as a guideline for the marketing efforts of consumer
durable and non-durable companies. Relevance of Mass Media is also a very important
factor.

Rural markets are an important and growing market for most products and services including
telecom. The characteristics of the market in terms of low and spread out population and
limited purchasing power make it a difficult market to capture. The Bottom of the pyramid
marketing strategies and the 4 A's model of Availability, Affordability, Acceptability and
Awareness provide us with a means of developing appropriate strategies to tackle the
marketing issues for marketing , services in rural areas. Successful cases like the Grameen
Phone in Bangladesh and Smart Communications Inc in Philippines also provide us with
some guidelines to tackling the issue

17
Statistical Glance

A glance at the following statistics will help to get a fair idea of the consumers in Rural India:

1. 46 percent of soft drinks.

2. 49 percent of motorcycles.

3. 59 percent of cigarettes.

4. 18 million TV Sets.

5. 50 percent of 2 million BSNL mobile connections.

6. 53 percent of FMCG products.

7. 59 percent of consumer durables are sold in rural India.

Rural markets, as part of any economy, have untapped potential. There are several difficulties
confronting the effort to fully explore rural markets. The concept of rural markets in India, as
also in several other countries, like China, is still in evolving shape, and the sector poses a
variety of challenges, including understanding the dynamics of the rural markets and
strategies to supply and satisfy the rural consumers.

Myth-1: Indian rural market is a homogeneous mass.

Reality- it’s a heterogeneous mass. Various tires are present depending on the income like
big land lords, Traders small farmers: labor artisans. People belonging to deferent social

16
classes stay in concentric area. So the available product suffice the consumption for
everyone.

Myth-2: disposable income is low.

Reality- number of middle class HH”s people(annual income Rs 50,000-2,50,000)for rural

sector is 27000000 compared to urban sector 29400000.Rural income CAGR was10.95%
compared to 10.74%in urban India between 1970-71 and 1993-94, the disposable income is
slightly higher in rural market.

Myth-3: Individual decides about the purchases.

Reality- decision making process is collective. Purchase process- influencer decider and
buyer. One who can pay all its different. Marketers must address brand message at all levels.
Rural youth bring brand knowledge to Households (HH). Basic awareness about the product
brand has to be there in market. This can be done by putting small advertising sheets at the
mandis and where the regular mass meets regularly.

17
REVIEW OF LITERATURE

18
Rural Marketing - A Critical Review:

Dr. N. Rajendhiran(MBA, PhD)/ Mr. S. Saiganesh(MBA, MA, M.Phil)/ Ms. P. Asha(MBA)

Prime Minister Dr. Manmohan Singh recently talked about his vision for rural India: "My
vision of rural India is of a modern agrarian, industrial and services economy co-existing side
by side, where people can live in well-equipped villages and commute easily to work, be it on
the farm or in the non-farm economy. There is much that modern science and technology can
do to realize this vision. Rural incomes have to be increased. Rural infrastructure has to be
improved. Rural health and education needs have to be met. Employment opportunities have
to be created in rural areas."

18
'Go rural' is the slogan of marketing gurus after analyzing the socio-economic changes in
villages. The Rural population is nearly three times the urban, so that Rural consumers have
become the prime target market for consumer durable and non-durable products, food,
construction, electrical, electronics, automobiles, banks, insurance companies and other
sectors besides hundred per cent of agri-input products such as seeds, fertilizers, pesticides
and farm machinery. The Indian rural market today accounts for only about Rs 8 billion of
the total ad pie of Rs 120 billion, thus claiming 6.6 per cent of the total share. So clearly there
seems to be a long way ahead. Although a lot is spoken about the immense potential of the
unexplored rural market, advertisers and companies find it easier to vie for a share of the
already divided urban pie.

The success of a brand in the Indian rural market is as unpredictable as rain. It has always
been difficult to gauge the rural market. Many brands, which should have been successful,
have failed miserably. More often than not, people attribute rural market success to luck.
Therefore, marketers need to understand the social dynamics and attitude variations within
each village though nationally it follows a consistent pattern 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.

What rural market buys?

16
Rural India buys small packs, as they are perceived as value for money. There is brand
stickiness, where a consumer buys a brand out of habit and not really by choice. Brands
rarely fight for market share; they just have to be visible in the right place. Even expensive
brands, such as Close-Up, Marie biscuits and Clinic shampoo are doing well because of deep
distribution, many brands are doing well without much advertising support — Ghadi, a big
detergent brand in North India, is an example.

Why Rural Market?

The Indian rural market has a huge demand base and offers great opportunities to marketers.
Two-thirds of Indian consumers live in rural areas and almost half of the national income is
generated here. The reasons for heading into the rural areas are fairly clear. The urban
consumer durable market for products like color TVs, washing machines, refrigerators and air
conditioners is growing annually at between 7 per cent and 10 per cent.

The rural market is zooming ahead at around 25 per cent annually. "The rural market is
growing faster than urban India now," says Venugopal Dhoot, chairman of the Rs 989
-crore(Rs billion) Videocon Appliances. "The urban market is a replacement and up gradation
market today," adds Samsung's director, marketing, Ravinder Zutshi.

Reasons for improvement of business in rural area?

• Socio-economic changes (lifestyle, habits and tastes, economic status)

• Literacy level (25% before independence – more than 65% in 2001)
• Infrastructure facilities (roads, electricity, media)

16
 • Increase in income
• Increase in expectations
MART, the specialist rural marketing and rural development consultancy has found that 53
per cent of FMCG sales lie in the rural areas, as do 59 per cent of consumer durable sales,
said its head Pradeep Kashyap at the seminar. Of two million BSNL mobile connections, 50
per cent went to small towns and villages, of 20 million Rediffmail subscriptions, 60 per cent
came from small towns, so did half the transactions on Rediff's shopping site.

Special features of rural market:

Unlike urban markets, rural markets are difficult to predict and possess special
characteristics. The featured population is predominantly illiterate, have low income,
characterized by irregular income, lack of monthly income and flow of income fluctuating
with the monsoon winds.

Rural markets face the critical issues of Distribution, Understanding the rural consumer,
Communication and Poor infrastructure. The marketer has to strengthen the distribution and
pricing strategies. The rural consumer expects value for money and owing to has unsteady
and meager status of weekly income; increasing the household income and improving
distribution are the viable strategies that have to be adapted to tap the immense potential of
the market.

Media reach is a strong reason for the penetration of goods like cosmetics, mobile phones,
etc., which are only used by the urban people. Increasing awareness and knowledge on
different products and brands accelerate the demand. The rural audience are however critical
of glamorous ads on TV, and depend on the opinion leaders who introduce the product by
using it and recommending it.

16
Opinion leaders play a key role in popularizing products and influence in rural market.
Nowadays educated youth of rural also influences the rural consumers. Rural consumers are
influenced by the life style they watch on television sets. Their less exposure to outside world
makes them innocent and fascinated to novelties. The reach of mass television media,
especially television has influenced the buying behavior greatly.

Creating brands for rural India

Rural markets are delicately powerful. Certain adaptations are required to cater to the rural
masses; they have unique expectation and warrant changes in all four parameters of product,
price, promotion and distribution.

A lot is already emphasized on adapting the product and price in terms of packaging,
flavoring, etc and in sachets, priced to suit the economic status of the rural India in sizes like
Rs.5 packs and Re.1 packs that are perceived to be of value for money. This is a typical
penetration strategy that promises to convert the first time customers to repeated customers.

The promotion strategies and distribution strategies are of paramount importance. Ad makers
have learnt to leverage the benefits of improved infrastructure and media reach. The
television airs advertisements to lure rural masses, and they are sure it reaches the target
audience, because majority of rural India possesses and is glued to TV sets!

Distributing small and medium sized packets thro poor roads, over long distances, into deep
pockets of rural India and getting the stockiest to trust the mobility is a Herculean task.

16
Giving the confidence those advertisements will support. Sales force is being trained to win
the confidence of opinion leaders. Opinion leaders play an important role in popularizing the
brand. They sometimes play the role of entry barriers for new products.

The method of promotion needs to be tailored to suit the expectations of the market.
Techniques that have proved to be successful are Van campaigns, edutainment films,
generating word of mouth publicity through opinion leaders, colorful wall paintings. The
Wide reach of television has exposed the otherwise conservative audience to westernization.
Panchayat televisions in Tamilnadu carries message that are well received and contribute to
community development.

Dynamics of rural markets differ from other market types, and similarly rural marketing
strategies are also significantly different from the marketing strategies aimed at an urban or
industrial consumer. This, along with several other related issues, have been subject matter of
intense discussions and debate in countries like India and China and focus of even
international symposia organized in these countries. Rural markets and rural marketing
involve a number of strategies, which include:

• Client and location specific promotion.

• Joint or cooperative promotion.
• Bundling of inputs.
• Partnership for sustainability.

Client and Location specific promotion involves a strategy designed to be suitable to the
location and the client. Joint or co-operative promotion strategy involves participation

17
between the marketing agencies and the client. 'Bundling of inputs' denote a marketing
strategy, in which several related items are sold to the target client, including arrangements of
credit, after-sale service, and so on. Media, both traditional as well as the modern media, is
used as a marketing strategy to attract rural customers. Partnership for sustainability involves
laying and building a foundation for continuous and long lasting relationship.

Innovative media can be used to reach the rural customers. Radio and television are the
conventional media that are reaching the rural audience effectively. But horse cart, bullock
cart and wall writing are the other media, which can carry the message effectively to the rural
customers.

Rural marketing is an evolving concept, and as a part of any economy has untapped potential;
marketers have realized the opportunity recently. Improvement in infrastructure and reach,
promise a bright future for those intending to go rural. Rural consumers are keen on branded
goods nowadays, so the market size for products and services seems to have burgeoned. The
rural population has shown a trend of wanting to move into a state of gradual urbanization in
terms of exposure, habits, lifestyles and lastly, consumption patterns of goods and services.
There are dangers on concentrating more on the rural customers. Reducing the product
features in order to lower prices is a dangerous game to play.

References:

1. Rural Marketing, Ravindranath V. Badi and Naranyansa V. Badi, Himalaya Publishing,

2004

2. The Hindu - Business Line

17
3. www.deccanherald.com

4. www.indiantelevision.com

Rural market for FMCG on upswing - By Business Standard

Ruchita Saxena / Mumbai December 27, 2007

Fast moving consumer goods (FMCG) companies can rejoice as the Rs 27,369 crore rural
market in the country registered a growth rate of 17 per cent in the first ten months this year.
About 34 per cent of the off take for FMCG products came from rural areas. FMCG
companies are trying to tap the rural market with more vigor, given the fact that nearly 70 per
cent of the country‘s population lives in villages.

The estimated number of households that are using FMCG products in rural India have grown
from 13.6 crore in 2004 to 14.3 crore in 2007. This growth was achieved on an average year-
on-year growth of 1.8 per cent in the number of households, which use at least one FMCG
product.
For some FMCG categories, the penetration levels have remained stagnant over the past three
years. In others, the growth has been faster.

A study by market research firm IMRB International shows that while the monthly
consumption categories comprising detergents and toilet soaps have remained largely stagnant
with a 92 per cent penetration, categories such as liquid shampoos have grown from 68 per
cent in 2004 to 83 per cent in 2007. Moving to higher-value products seems to have happened
across categories, from toothpowder to toothpaste or from unbranded to branded products.

16
Manoj K Menon, senior project director, IMRB International (media and panel group), says,
“One of the most significant changes includes growing preference towards branded products.
For example, in the food and beverages segment, penetration of branded atta has gone up
year-on-year by 8 per cent and branded salt by 3 per cent. The penetration of unbranded atta
has decreased by 1 per cent and salt by 3 per cent.
FMCG companies Hindustan Unilever and ITC have worked on increasing rural penetration
through corporate social responsibility projects such as Project Shakti and e-Choupal,
respectively.
According to Vijay Sharma, head, Project Shakti, the growth in sales from the rural market

has been both in value and volume terms.

Speaking about his experience of the rural market, he said, ―Through Project Shakti, the
company has been implementing programmers that aim at building the market by increasing
usage of the categories it is present in. The key here is to educate consumers about improving
their lifestyle and our brands play a role in enabling this. For example, Lifebuoy Swasthya
Chetana is a rural health and hygiene educational programme. Our Shakti network is growing
and the company expects to cover 600 million consumers across 5 lakh villages through one
lakh Shakti entrepreneuers by 2010. Currently, Shakti has 45,000 entrepreneurs in the
country.

Suchitra Potnis, associate director, Client Solutions (a Nielsen company), said,”Store density
in rural India is 5.4 stores per thousand persons compared with 10.1 in urban areas. The top-
20 categories account for around 70 per cent of the FMCG market. Categories such as

16
batteries and iodised salt have gained a slot among the top-20 in the rural market since the
consumption of these categories is higher in rural than urban India.”

Rural markets beat cities in FMCG sales growth – The Economic Times, December 8,
2008.

Rural consumers are displaying considerable resilience in spends on fast-moving consumer

goods (FMCG) despite the economic slowdown, say top industry officials. While overall
consumer spends (urban+rural) on FMCG are showing smart rates of growth, the growth in
rural markets at 20% plus has overtaken urban markets, which is growing at 17-18%,
according to industry estimates. Industry watchers attribute the growth to rise in rural
disposable incomes, following three consecutive years of good agricultural growth. Also, top
industry officials said the government has pumped in a lot of investments into rural areas.

In recent years, FMCG companies have invested significantly in effective distribution and
tailoring their products and prices to geographic nuances to increase their return on
investment (RoI) geographically. These efforts may now be paying off. AC Nielsen numbers
for the April-September 2008 period show that across a wide range of sectors, including skin
creams and solotions, hair oils, toothpaste and candies, volume and value growth in rural
markets have been significantly higher than urban markets. Skin creams and lotions, for
example, grew 26.3% by volumes in rural markets compared with 12.5% in urban markets for
the April-September period. In value terms also, rural markets grew faster than their urban
counterparts in skin creams and lotions, according to Nielsen numbers.

17
Godrej group chairman Adi Godrej said, ―The overall FMCG market, both urban and
rural, have recorded robust growth rates. Urban markets have been relatively weaker in some
segments because the growth of certain sectors has been affected lately. But good agricultural
growth and government focus on these markets have led to higher disposable incomes with
rural consumers. Consumer spends on FMCG in urban markets, through both traditional trade
and modern trade, have been upbeat in recent months. But modern trade footfalls in Mumbai
have been listless in the past few days, owing to the terror attack. However, kiranas, or
traditional formats, continue to report robust numbers. Traditional trade contributes over 90-
95% of the total FMCG business. Modern trade (formats like Food Bazaar or Spencer‘s)
contributes 10% to total FMCG business in metros and around 5% to total industry sales.

CavinKare CMD CK Ranganathan said, “We have been surprised by strong consumer
undertones at a time when inflationary trends would have otherwise hit demand. There are no
signs of downtrading. Consumer purchases in rural India have been quite impressive in recent
months.” Rural India clocked 19.1% growth for hair oils in April-September against 11.4% in
urban markets by volume. Similarly, among toothpaste, the all-India rural volume growth
was a healthy 17% compared with just 6% in all-India urban markets. The gap in growth
rates was even wider among candies. In the April-September period, rural markets registered
26.5% growth against a minuscule 3.6% growth in urban India. It was the same story with
value growth.

Dabur CEO Sunil Duggal said, “Everyday products, which are priced at popular price
points, have not seen any drop in consumer demand, whether it is urban or rural. But rural
market seems to have actually done better, growing at a much faster pace. While the rural
growth story has remained completely intact and has even accelerated a bit, the urban market

17
has been affected by lower off takes in modern trade. But we believe the traditional trade
should take up the slack.” Companies are now working on stepping up distribution in smaller
towns and increasing focus on marketing and operations programme for semi-urban and rural
markets. Seventy per cent of the total households in India is in rural areas. Industry watchers
say the increased consumption is also the result of a growing middle class base in these
markets. The total number of rural household is expected to rise to 153 million in 2009-10
from 135 million in 2001-02, suggesting a huge market.

According to an NCAER report, the numbers belonging to lower middle income‘ group in
rural areas is almost double compared with urban areas. This is a large consuming class,
constituting 41% of the Indian middle class and having 58% of the total disposable income.

18
OBJECTIVES

17
PRIMARY OBJECTIVE

Customer preference and brand relationship for FMCG product (HUL) in rural India. And
make people more brand loyal.

1) To analyze the present promotion strategy of rural brands (HUL) in rural markets.

a. To study the modes of communications used and their effectiveness.

b. To find out the role of promotion in rural sales.

c. To find out the promotional strategies of different players in the market.

2) To measure the success of rural marketing campaign of the brands (HUL) in terms of
consumer appreciation.

a. To study the determinants of specification factors which decide the success of rural
promotional strategy?

3) To evaluate the effects of adopting the specific brand ambassadors in the rural marketing
context.

17
4) To analyze the market opportunity and potential for existing and new entrants in the rural
market.

a. To find the growth of rural market over a period of 5 yrs.

b. To find the behavioral changes in the rural consumers.

The main objective of this project is to find, what are the steps Hindustan Unilever Ltd. is
adapting to be market leader and to differentiate itself from its competitors.

What is the steps company is utilizing to find current trend in the market?

Most of the product of HUL comes in the category of convenience products. They are
frequently used and bought by the customers. There is large no. of players in the market, who
are supplying similar product to the customers. Now, customers have become smart, they
have great knowledge of market, product and suppliers. So, they are looking for the product
which is providing something extra. HUL has a wide range of product in FMCG sector,
covering almost every needs and wants of the customers. It has products for child, young &
adult, male & female, etc. So it has to differentiate its products taking into account the needs
and demands of all the sectors of the society. Not, only product but it has to look upon the
services and feedback from customers also. It should do something to give after sales service
and collect feedback from the Customers. The basic objective of this project is as mentioned

17
above to find ways so that HUL remain market leader by considering all the needs & wants
and fulfilling their demand.

17
RESEARCH METHODOLOGY

18
1. PHASES OF THE PROJECT:

There is large number of FMCG companies in the market, to find the defining marketing
strategies of different companies.

Used, the methodology used is interview and survey method. The duration of the project was
of two months and divided into the following phases:

The basic knowledge about the brands and their promotion has to be gathered thorough the
secondary data available on the internet and the documents available in the institute library.
The quantum of information on this subject matter is enormous and updated. The secondary
sources such as internet and news articles cover almost all sections and geographic locations.
Although the project does not entitle for a primary research but for the validity and reliability
of the research and better perception of the subject a primary research was undertaken in the
selected regions in Rajasthan and few area of Punjab &Haryana state. The primary survey
was conducted in the selected regions to get some idea of the subject matter. The following
sites had been identified and surveyed:

1. Rajasthan (Sriganganagar District) c) Raisinghnagar

a) Gajsinghpur d) Muklava

b) Padampur e) Sadhuwali.

17
 f)Goluwala d) Kamrani
e) Nandram ki dhani
f) Tandurwali
2. Hanumangarh Districts)
g) Masani
a) Tibbi
h) Salemgarh
b) Sherekan
c) Jhamber

3. Haryana a) Abohar
b) Khuban
a) Alenabad c) Sito guno
b) Talwada ghil d) Himatpura
c) Rampura e) bjitpura

4. Punjab

17
Random sampling was done for interview of the respondents in every village. A sample of 8
respondents per village was interviewed. The research was carried out for a period of 30 days
from 25th April to 24 June 2009. The total sample collected was 165 respondents (non-
overlapping).

Data Collection

Primary Data has been collected through personal contact. For this purpose both

Questionnaire and one-on-one interview was considered with the consumers, shop

Owners, distributors & suppliers of the company.

Secondary data has collected from magazines, newspaper, company literature and

Websites.

Data Analysis and Findings

Analyzing codes to each question were awarded. Thereafter every questionnaire was written.
After which the data were analyzed. The data analysis is to be done using statistical tools and
techniques. The result is to be critically analyzed and every aspect of the objectives to be
dealt with great detail. The findings are to be reported with the help of suitable graphs and
diagrams where ever required. The comparative analytical findings are to be reported for
most aspects of the objectives.

Secondary Research –

1) Case Study Findings

Nirma case study- Rural success story

Secondary sources comprised of reports from journals, magazines, company website,

institutional websites of government and company reports.

36
Research Approaches:

The approaches for primary data collection are as follows

Survey Research: Mostly the research was done by developing a survey instrument, a
questionnaire, based on that respondents were interviewed. This research helped us to find
potential business areas in city, details of existing dealers, retailers. and market demand.

Observational Research: Fresh data was collected by observing in the relevant places, this
can be the buying behavior of consumer in the shops while standing and interacting with the
retailers and customers.

Open-end questions: these are:-

Completely unstructured (question that respondents can answer in an almost unlimited

number of ways-like what is your opinion on),

Word association ( words are presented like which Company brand you sell more HUL,
NIRMA ,Procet&Gramble , Henkel, or local brand and respondent mention the first word
that comes to mind).

Sampling Procedure

A. probability Sample

Stratified random sample: The samples were classified as follow-

Hariyali Kisan bazaar and other big retailers shop

Haat market, taluka bazaar

38
Village choupal

Village fair &function

General stores

Personal Interview: shopkeeper and customers, were asked questioned by using

questionnaires and recorded additional information about cold drink

Analysis Methods

Percentage method: The entire questions in the questionnaire are analyzed from the
collected data and they were converted in to percentages with explanations. Percentages were
useful in comparing two series of data. During analysis it was difficult in interpreting the
difference in the actual counts. But with the use of relative differences, percentages it can be
more clearly seen.

Cross Tabulation: It is applicable to data in which both the dependent and in dependent
variable appear in categorical form. In a cross tabulation the percentages are usually shown,
as well as the actual counts of the number of responses falling in to the different cells of the
table. To interpret the cross tabulation analysis the pattern of percentage mentioned across the
each row separately.

Methods of research data presentation

Tabular forms: Observations and inferences after each analysis is presented in a table with
numerical values. Tables make it easy to understand the findings at a glance than going
through the lengthy description.

Graphs: Each finding was presented graphically in the form of pie charts, bar diagrams after
analysis for easy references. The main features of frequency distribution are conveniently
communicated by representing the frequency distribution in the form of a diagram,

36
Description: After the analysis of the collected data, interpretations are given at the bottom
of the tables. On the basis of the analysis, major findings and suggestions were made.

38
 DATA
PRESENTATION
AND ANALYSIS

For the analysis of data collected through survey work, a series of steps were followed
Which are given in a chronological order
➢ Each question of the questionnaire was assigned codes (coding)
➢ Each questionnaire was punched into ms-excel sheet thus forming a data base
Punching)
➢ Further the data was analyzed by using diagrams, graphs, charts etc.
➢ The graphic rating scale and ranking method was used to measure the response
and attitude of the customer.

36
 ➢ Finally, an effort was made to extract meaningful information from analyzed data,
which acted as a base for the recommendations.

MAJOR FINDINGS
The Crisis of Declining Markets
Through the nineties, the FMCG markets grew at almost 15% per annum in value. Suddenly,
in 2000, FMCG market growth stalled and then declined for the next four years. It is
important to understand why this happened.
The rapid opening up of the economy resulted in many new avenues of expenditure for the
consumer’s growing income. A sharp drop in interest rates from 18% to 8% led to explosive
demand for consumer durables like white goods, two-wheelers and automobiles. After all,
one could drive out of a car showroom in a Maruti 800 with a down payment of only Rs.
2000. The home ownership market grew exponentially as the average age of a home loan
borrower dropped from 50 in 1999 to 30 in 2004. Mobile phone ownership and usage
exploded due to its amazing lifestyle and convenience benefits as well as lower prices.
Entertainment, Leisure and Travel sectors also boomed.
The lure of new avenues of expenditure in products and services led to consumers restricting
their expanse on FMCG. It is not that they bathed less often or brushed their teeth less often
or indeed washed their clothes less often. But they did downtrade to lower priced substitutes
from higher quality brands. For example, a consumer buying six tablets of Lux in a month
went to buying three of Lux and three cheaper brands. Or a consumer buying Surf Excel for
her clothes mixed it with a cheaper powder. As a result of this shift in spending patterns, the
FMCG market declined in value in the last four years creating a major challenge for growth.

The new Hindustan Lever: Focused on FMCG

In 2000, 75% of our sales came from FMCG businesses. The rest came from several non-
FMCG businesses which were not profitable, and did not offer prospects for long-term

36
leadership. Besides, they were a drain on the core FMCG business, both in terms of resource
and focus.
Hindustan Unilever Limited is a part of the €40 billion Unilever Group. The Group has more
than 400 brands spanning 14 categories of home, personal care and food products. It has
presence in over 100 countries and employs more than 174,000 people
Worldwide.
Over 700 million consumers Covers over 6.3 million retail outlets including direct reach to
over 1 million. Over 2000 suppliers and associates.

They decided to disengage from all non-FMCG or commodity businesses. In all, we have
divested and discontinued 15 businesses including Animal Feeds, Speciality Chemicals,
Nickel Catalyst, Adhesives, Thermometers, Seeds, Mushrooms etc. with sales of Rs.1,750
crores as in 1999.

Today they are a focused on FMCG company with our branded business accounting for over
90% of sales, consisting of 35 brands across 20 categories. These will be their main engines
of growth, with higher levels of resource concentration, be it technology, people talent or
media spend.
Building blocks of a strong Foods business
In Foods, there is enormous growth potential in leading the evolution of consumers to
branded and processed foods. Over the last few years they have focused on putting in place
the building blocks of a strong Foods business. Historically their Foods business was
fragmented and lacked scale. It was often commoditized with low margins. They recognized
that changing food habits would require considerable investment, which the current business
simply could not afford. Therefore they divested the non-value added parts like Vanaspati.
They have consolidated their portfolio and improved the gross margins by over 13% through
product mix and cost reduction. They have also cleared the supply chain of all old stock and
geared up for fresh availability on shelf. Today, their Foods business has a healthy gross

37
margin and a supply chain driven by freshness. The Foods business will now invest for
growth through relevant innovation.

FMCG still offers enormous potential

As the largest FMCG player it was up to them to reverse the downtrading to realize its
true growth potential. They could achieve this by raising the bar and becoming world
class in what their brands offered and how they worked. Nothing less would do.

Penetration levels in several of the categories and consumption levels in all of the categories
is low by any comparison. Across the world, they are seeing a strong correlation between
income levels and the size of FMCG markets. Over the next 10 years, per capita income in
India is likely to touch China’s current levels. At those levels, the FMCG market will be over
Rs.100,000 crores from a current value of Rs.40,000 crores. This is an opportunity that they
have to seize.

Portfolio of Strong Brands

Their main challenge was to reverse the downtrading in the categories and re-establish
the relevance of their brands in the mind of the consumer. In 2000, they had 110 brands,
many undifferentiated and lacking scale. They chose to focus on 35 power brands covering
all consumer appeal and price segments. They are already seeing the benefits. Six brands –
Brooke Bond, Lifebuoy, Lux, Fair & Lovely, Rin and Wheel –have emerged as mega brands
in the last five years, each with sales of more than Rs.500 crores.

Better Value
The first step was to ensure that they offer world class quality and real differentiation backed
by technology to give them the advantage over low priced competition. They have invested

37
over Rs.400 crores, or 5% of sales, in the last three years to upgrade the brands.In several
cases they reduced prices to make the brands more affordable. Better quality and more
affordable prices have increased the value to the consumer. They have also launched several
low unit size and price packs for single use to make the brands more accessible to all income
groups. For example, they are the first to introduce a branded toothpaste in a tube at Rs.5 and
a branded quality shampoo in a bottle at Rs.5.
Bigger Role in Consumers’ Lives
Perhaps the most significant change has been to move the brands beyond merely making
functional claims to playing a bigger and deeper role in the lives of consumers. They had to
move from selling a soap or a detergent to something far more important and central to the
consumer’s life. How often have we heard someone say, “A soap is a soap is a soap!” Or
indeed, “All detergents clean clothes as well”.

In the case of Lifebuoy, it was only when they associated it with the promise of health and
protection against disease that it claimed a larger space in the consumer’s mind. It moved
from being a mere soap to a health essential. Today Lifebuoy, their oldest brand, has grown
at over 15% for the last three years.

Similarly, in the laundry market, Surf Excel went well beyond the benefit of ‘great clean’ by
saving two buckets of water with every wash. Imagine the importance of that benefit to
consumers in cities, who often get running water for only a couple of hours a day. Surf Excel
is one of their fastest growing brands today.

Both Lifebuoy and Surf Excel have succeeded because they are relevant to two key concerns
of the Indian housewife: family health and the scarcity of water.

In addition to the growing consciousness of health, consumers today are looking for ways to
look good and feel good so that they can get much more out of life. In short, consumers are

37
seeking Vitality in their lives. Their portfolio of 35 power brands is uniquely positioned to
offer nutrition, hygiene and personal care benefits and thereby deliver Vitality.

Technology, the Key Differentiator

Their brands and sound understanding of the local consumer are supported by a world
class Research and Development capability. They have over 200 of the brightest
scientists and technologists based in India.

Their recent reorganization leverages the talent pool from across 16 global technology
centers, of which four are in India. In all, they have over 4,000 high quality minds across
Unilever working relentlessly to provide new benefits that make a real difference to the
consumers.

Winning with Customers

Hindustan Lever has historically had a strong bond with its customers. They have
strengthened this and reinvented the way they manage their distribution channels and their
customers. The sales structure has been transformed to leverage scale and build expertise in
servicing Modern Trade and Rural Markets. They have also de-layered their sales force to
improve the response times and service levels.

Their customers are serviced on continuous replenishment. This is possible because of

IT connectivity across the extended supply chain of about 2,000 suppliers, 80 factories and
7,000 stockiest. They have also combined backend processes into a common Shared Service
infrastructure, which supports the units across the country. All these initiatives together have
enhanced operational efficiencies, improved the service to the customers and have brought us
closer to the marketplace.

Our Acorns: Investing in our Future

37
In the pursuit of growth, they have also begun to nurture some acorns for the future.
These are both new businesses and new ways of engaging with consumers. Their entry into
Water Purifiers, through Pureit, shows great promise. Pureit delivers 100% protection against
all water-borne diseases. It provides water which is as safe as boiled water, without needing
electricity or continuous tap water supply. At 17 paise per litre, it is extremely affordable for
the common man. They have launched it in Tamil Nadu and are fine-tuning all aspects of the
business system before a phased national launch.In urban India, Hindustan Lever Network
(HLN) is their direct selling initiative selling a special range of products. It already reaches
1,400 towns with over 3 lakh consultants. Besides reach, HLN enables direct interaction with
consumers and customizes solutions for them to give them a complete brand experience.

Our People & Organization

They have restructured the company, integrating eight Profit Centres into two Divisions –
Home and Personal Care (HPC) and Foods. The result is a simpler and leaner organisation,
less hierarchical with fewer levels and greater empowerment. This has eliminated complexity
and speeded up decision making. Today the company is far more youthful in attitude and
spirit. There is greater openness and transparency.

The Transformation: Investment in the Future

To ensure that Hindustan Lever remains competitive in the long-term, they have made
significant investments in product quality, pricing and marketing. As mentioned earlier, the
investment in product quality alone has been in excess of Rs. 400 crores, or 5% of our sales.
In addition there has been the cost of defending their market position. Recently an
international competitor attacked their laundry business led by a price reduction of as much
as 50%. They acted with speed and determination leveraging all their past experience in India
and internationally. They have been able to fully protect their market leadership and share,
albeit sacrificing short-term profit. They made this necessary trade-off as market share is the
best means of sustaining future profit. Over time, their stronger market positions will surely
lead to greater long-term profit.

36
Despite these significant investments to strengthen the long-term competitiveness and
the costs of defending the strong market position, they still remain one of the most profitable
companies in the country.

HLL is out performance

Q2FY 09 result highlights

Company Revenu Growt OPM(% Inc(Dec.) Net Growt

e h ) (bps) profit(R h
s mn yoy(%)
(Rs mn) yoy(%)

36
Britannia 8,385 27.3 8.0 240 597 15.6

Colgate 4,125 13.4 12.4 300 635 16.0

Dabur 6,912 18.3 18.1 180 1,074 12.2

GLSM 4225 20.2 14.9 430 530 4.9

Godreg(cp) 3,465 26.4 11.5 680 347 6.3

HUL 40,279 19.7 11.8 150 4,379 6.9

ITC 37,633 15.1 29.7 190 8,027 4.1

MARICC 6,035 30.1 12.22 170 471 11.6

O
NESTLE 11,076 22.2 18.7 270 1326 9.9
TOTAL 122,134 19.3 18.2 230 17,386 6.5

Modes of promotions

ItRise
wasinfound in the survey that most of the companies use Campaigns (37%) as the mode of
Disposable
income
communication for the promotion of their products. About 65% of the total respondents
suggested that Campaigns and Direct Contacts were the most prominent modes.

36
Thus we can interpret that although the penetration of media (audio and video) has increased
but the companies rely on other modes and want the rural consumers to be aware at their door
step. This increases the trust for the brand and generates the need which otherwise remains
latent due to lack of awareness and enthusiasm. This also gives the touch-and-feel experience
and increases the sense of satisfaction among the rural mass.

Modes used in print medium

The table shows the responses for the mostly used modes in the print medium by the companies
in

the rural areas for their product promotion.

VARIABLES AREA TOTAL

AREA(raj.) (pb)

V1 V2 V3 V4 V5 V1 V2 V3 V4 V5

Poster/banner 4 3 4 4 3 4 3 3 3 3 34
Newspaper 3 2 2 1 3 2 3 2 3 3 24
magzines 1 2 2 4 2 1 2 2 2 2 20

36
Pamplets 2 3 2 1 2 3 2 3 2 2 22
Total 10 10 10 10 10 10 10 10 10 10 100

RATING OF PROMOTION ACTIVITIES

Reasons for Rating the Promotional Activities.

The most important reason reflected by the respondents while rating the promotional
activities was “On the spot” by 31% respondents. Second most important reason was “Better
realization” of the product by 28% respondents. Third most important reason was
“Understandability” by 21% respondents. The most important finding is that all these reasons
correspond to Direct Contact and Campaigns. Thus, these two modes are the most important
promotional modes.

36
Focus of companies in Promotions.

Striking results regarding the promotions were obtained for this question. It was found that
only 9% of the respondents said the promotions focused on the need of the product. The
maximum of 35% flatly responded that the companies focused only the brand ambassadors
and nothing else. Respondents gave examples of Sachin Tendulkar, Amitabh Bacchan,
Shahrukh Khan, Aishwarya Rai and Irfan Pathan. 25% respondents said the promotions
targeted the competitors and only 12% respondents replied that the promotions featured the
utility of the product. Only 19% of the respondents confirmed that the promotions featured
the pricing of their products. Although they responded that pricing was involved in the

36
promotions but only to highlight how their price was more economical and better as
compared to other players in the market.

AREA OF FOCUS OF PROMOTION?

It was found that almost 3/4th of the respondents wanted a complete change in the format
currently followed by the companies. 26% of the respondents wanted the promotions to focus
on communication that too in the local language. An equal number of 25% respondents
wanted the promotion to focus on the utility of the product
Rather than just pushing it into the life cycle of rural people. 24% of the respondents wanted
fair price to be declared on the promotions so that they could decide upon the purchase and
also prevent them from being cheated by dealers. Only 13% respondents wanted high class
ambassadors in the promotions.

37
 Competitive pressure Brand relevance

Ability to call shots/pricing power

Resource employment and Appetite to take risk Ability to involve and enter
excess cash generation and stay invested new business

36
Lifebuoy – Success Story (As per HUL)
Introduction When we talk about HUL the first name that comes to our mind is Lifebuoy. It
is the world‘s largest selling soap and offers a stronger health benefit to the entire family
Launched in the year 1895, Lifebuoy, for over a 100 years, has been synonymous with health
and value. The brick red soap, with its perfume and popular Lifebuoy jingle have carried the
Lifebuoy message of health across the length and breadth of the country, making it the largest
selling soap brand in the world. In 2002 Lifebuoy was relaunched, marking a new turning
point in its history. The new mix includes a new formulation and a repositioning of the brand
to make it more relevant to both new and existing consumers.

“Lifebuoy is no longer a carbolic soap with cresylic perfume. It is now milled toilet soap
with a new health fragrance”. The new formulation has an ingredient, Active-B, which
offers protection against germs, which can cause stomach infection, eye infection and
infections in cuts and bruises. The new health perfume has been selected after one of the most
extensive perfume hunts in the industry. The new milled formulation offers a significantly
superior bathing experience and skin feel. The new formulation, new health perfume and
superior skin feel, along with the popular red colour, have registered conclusive and clear
preference among existing and new users. The new Lifebuoy is targeted at today‘s discerning
housewife with a more inclusive “family health protection for my family and me”
positioning. Lifebuoy has made a deliberate shift from the male, victorious concept of health
to a warmer, more versatile, more responsible benefit of health for the entire family. The new
Lifebuoy range now includes Lifebuoy Active Red (125gm, 100 gm and 60 gm) and
Lifebuoy Active Orange (100gm). Lifebuoy Active Orange offers the consumer a
differentiated health perfume while offering the health benefit of Lifebuoy. At the upper end
of the market, Lifebuoy offers specific health benefits through Lifebuoy International (Plus
and Gold). Lifebuoy International Plus offers protection against germs which cause body

38
odour, while Lifebuoy International Gold helps protect against germs which cause skin
blemishes.

Repositioning of Lifebuoy

FMCG major Hindustan UNI Lever (HUL) embarked on a massive rural campaign using the
concept of hygiene as a platform to reposition its leading brand, Lifebuoy. Lifebuoy was the
single largest soap brand — with 20 lakh soaps sold every day and an estimated value of Rs
500 crore (600 million users annually). HUL has identified 8-9 key States for commencing its
rural contact programme wherein the concept of hygiene will be highlighted. The relaunch of
the 107-year-old Lifebuoy has been done in a bid to drive growth in a sluggish soap market.
It is expected to propel the growth to double-digit levels during 2002. Lifebuoy has been
declining by 15-20 per cent in volume terms until HUL launched Lifebuoy Active during the
second half of 2001. The new Lifebuoy is a completely new product with a new
formulation, fragrance, lather profile and a shift in positioning from being a male soap
to a family soap. The carbolic segment, under which Lifebuoy fell, shrunk in the process
giving way to an explosive growth in the discount segment in which HUL's Breeze is
positioned. Seventy per cent of the Lifebuoy sales were from rural India. Rural
consumers' query `why do I need Lifebuoy when all soaps clean' was indicative of the decline
of the brand, prompting HUL to launch Lifebuoy Active and Lifebuoy Extra Strong in mid
2001. "These launches led to a marginal turnaround, but 2002 is the year of growth. Lifebuoy
is no longer a carbolic soap with cresylic perfume, it is a toilet soap with a different
`health' fragrance.

With this launch, the carbolic segment has been wiped out as Lifebuoy accounted for 95 per
cent of this segment previously. In the process of change, HUL challenged everything that

39
Lifebuoy stood for - perfume, formulation, size and shape. "Every element of communication
was changed" The first phase of communication was to tell consumers that Lifebuoy has
changed. From an earlier focus on men, the focus has shifted to family with the message that
Lifebuoy is for effective protection from germs that cause health problems. The new range
includes Lifebuoy Active Red, Lifebuoy Active Orange, Lifebuoy International Plus and
Lifebuoy International Gold. In 2001, HUL's soaps and detergents turnover was at Rs 4,295
crore, accounting for 39 per cent of its total net turnover of Rs 10,972 crore. Hindustan Lever
Ltd (HUL) is attempting to give a new lease of life to its 107-year-old heritage brand by
extending it to talcum powder and also testing a herbal variant of this power brand. While the
upper-end consumers would use deodorants, a Lifebuoy powder could work for consumers in
the lower strata who are already familiar with the soap."

Promotion

Media's strategy for Lifebuoy soap's re-launch:

Lifebuoy contributed 30 per cent to the Hindustan Lever detergent business turnover and
hadn't undergone a major restructuring and repositioning in 107 years. However, the sales
were declining as the consumers were moving away from the carbolic based soaps to beauty
soaps - perceived to be superior; with better fragrance and lather; aspirational image. The
agency devised a strategy to ensure that it advocated family health rather than personal
hygiene. There were large chunks of the users who were in "unreachable areas" - rural
markets. Through TV and print campaigns, the agency team focused attention on the family
health themes, conducted consumer education exercise using "Germ tests" through
multimedia; and established the brand's credentials as an authority in a credible manner. The
agency also explored the communication options during important days such as World Health
Day. For rural markets, it created the Lifebuoy Swashthya Chetana project wherein 450
teams of health officers tapped 8000 villages in 11 states. Nearly 40 million people in rural
areas were covered. The brand registered a 30 per cent increase in volumes and the share of

40
contribution to HUL's detergent division turnover increased to 55 per cent. HUL was also
offering cross company product mixes - a 200 gm Bru packet comes with one Cadbury's
Dairy Milk; Red Label tea packet comes with Cadbury's Five Star depending on the size; 100
gm Lifebuoy comes with a small Amrutanjan. HUL used Mahakumbh mela as an
opportunity to change hand-washing and bathing habits in rural India. "The Mahakumbh”
at Allahabad is the biggest mela in India and, with its focus on `cleansing' is a good fit for
the `Lifebuoy for health' message of the brand". innovative communication tools were
used at the mela to communicate the importance of health and hygiene. The company had 14
stalls at various points in the mela grounds. Some hand-carts have also been deployed for
increasing access. The numbers of both was increased based on response. ―The activity
aims to build awareness in the target audience about hygiene and health through product
demonstration”. People in Mela were asked to put there hands below some special camera
where they could see the germs on their hands and were asked to wash their hands with
lifebuoy and then see the difference. These types of promotional activities worked in these
melas.

Cinema van operations: These are typically funded by the Redistribution Stockists. Cinema
Van Operations have films and audio cassettes with song and dance sequences from popular
films, also comprising advertisements of HUL products. Operation Harvest: The reach of
conventional media and, therefore, awareness of different products in rural markets is weak.
It was also not always feasible for the Redistribution Stockist to cover all these markets due
to high costs involved. Yet, these markets are important since growth opportunities are high.

Operation Harvest: endeavoured to supplement the role of conventional media in rural India
and, in the process, forge relationships and loyalty with rural consumers. Operation Harvest
also involved conducting of product awareness programmes on vans.

37
Hindustan Lever Limited's Lifebuoy, recently announced the launch of Lifebuoy Swasthya
Chetna, the first single largest rural health and hygiene educational program. Lifebuoy will
make multiple repeat contacts in nearly 15,000 villages in 8 states across rural India. The
campaign aims to educate children and the community about the threat of unseen germs and
basic hygiene practices. Lifebuoy has already successfully conducted pilot studies in Madhya
Pradesh, Chhattisgarh, Uttar Pradesh, West Bengal, Orissa and Bihar. This campaign teaches
people about maintaining good health through practice of basic hygienic habits including the
hand wash habit. Lifebuoy is among HUL's power brands, which the company is focusing on,
selected on the basis of their absolute size, brand strength, brand relevance, competitive
advantage and potential for growth. The new Lifebuoy range now includes Lifebuoy Active
Red (125 gm, 100 gm, and 60 gm) and Lifebuoy Active Orange (100 gm). Lifebuoy Active
Orange offers the consumer a differentiated health perfume while offering the health benefit
of Lifebuoy. At the upper end of the market, Lifebuoy offers specific health benefits through
Lifebuoy International (Plus and Gold). Lifebuoy International Plus offers protection against
germs which cause body odour, while Lifebuoy International Gold helps protect against
germs which cause skin blemishes.

Price

Hindustan Lever Ltd (HUL) currently on a price discount include 150 gm Lifebuoy
Gold (Rs 3 off),TRYING to match prices with the smaller players, large FMCG companies
have been on a price-cutting spree. Of late, Hindustan Lever have announced `new' prices for
their various brands to beat sluggish sales, combined with the introduction of lower-sized
packs to get volumes. HUL is also expected to follow suit with its Surf sachets with the
obvious purpose of gaining volumes at the lower end of the market. HUL managers describe
the exercise as that of dropping price barriers to induce growth for their brands rather
than trying to beat the smaller players with their pricing. More than benchmarking
competition, dropping prices is all about triggering growth and this has always been an

38
integral part of their strategy. Straddling almost every price segment with its SKUs, HUL has
also been trying to upgrade its consumers, even at the cost of cannibalising its own brands.
Besides, freebies and promotions have finally been replaced by direct price reductions to lure
consumers. Observes Sujoy Mishra, an analyst at Kotak Securities.

"Promotions have shifted to the trade while freebies have been replaced by price cuts."
Considering almost every FMCG brand was doling out a freebie, it was time for FMCG
players to differentiate themselves. Observes A. Sundarajan, Managing Director of market
research firm, Market Search, "The round of freebies has already been played out by the
FMCG companies. They are now coming back to their core brands at a lower price." In
spite of the slowdown in rural demand, FMCG companies continue to focus on the rural
markets in the hope of salvaging their sales turnover. Majors such as HUL have deliberately
introduced small pack sizes. Lifebuoy, HUL's largest selling soap brand, recently introduced
a Rs 2 SKU of 18 gm targeted at the rural market in the BIMARU States.

Place

70% of India's population resides in villages. Penetrating the rural markets is, therefore, one
of the key challenges for any marketer. While rural markets present a great opportunity to
companies, they also impose major challenges. At HUL, they have been at the forefront of
experimenting with innovative methods to reach the rural consumer.

Single Distribution Channel

For rural India, HUL has established a single distribution channel by consolidating
categories. In a significant move, with long-term benefits, HUL has mounted an initiative,
Project Streamline, to further increase its rural reach with the help of rural sub-stockists. It
has already appointed 6000 such sub-stockists. As a result, the distribution network directly
covers about 50,000 villages, reaching about 250 million consumers. Distribution will
acquire a further edge with Project Shakti, HUL's partnership with Self Help Groups of rural

39
women. The project, started in 2001, already covers over 5000 villages in 52 districts of
Andhra Pradesh, Karnataka Madhya Pradesh and Gujarat, and is being progressively
extended. The vision is to reach over 100,000 villages, thereby touching about 100 million
consumers. The SHGs have chosen to adopt distribution of HUL's products as a business
venture, armed with training from HUL and support from government agencies concerned
and NGOs. A typical Shakti entrepreneur conducts business of around Rs.15000 per month,
which gives her an income in excess of Rs.1000 per month on a sustainable basis. As most of
these women are from below the poverty line, and live in extremely small villages (less than
2000 population), this earning is very significant, and is almost double of their past
household income. For HUL, the project is bringing new villages under direct distribution
coverage. Plans are being drawn up to cover more states, and provide products/services in
agriculture, health, insurance and education. This will both catalyse holistic rural
development and also help the SHGs generate even more income. This model creates a
symbiotic partnership between HUL and its consumers, some of whom will also draw on the
company for their livelihood, and helps build a self-sustaining virtuous cycle of growth.

37
 FINDINGS AND
CONCLUSION

FINDINGS:

With the present secondary data and primary survey following results were generalized. The
result has been discussed on objective wise basis and represents the opinion of the various
authors on the subject as well as the point of view of the respondents of the selected villages.

Objective 1- To analyze the present promotion strategy of rural brands (HUL) in rural
markets.

36
a. To study the modes of communications used and their effectiveness.

b. To find out the role of promotion in rural sales.

c. To find out the promotional strategies of different players in the market.

Finding: It was found that mostly four modes of communications were used by the
companies in the rural areas. The most prominent mode was campaigns, other modes were
electronic and print media along with direct contact. It was also found out in the survey that
promotions played a very important role in rural sales; they increased the penetration of the
products along with increasing the awareness of the rural people. It was found in the primary
survey that people wanted to have the promotions which made them aware about the utility of
the product in their daily life. This identified the need of the product in the life-cycle of rural
people. Thus promotions played a very important role in generating the sales. It was found
that most of the companies focused on the brand ambassadors and their products in their
promotions, few of them also focused on the price and affordability. It was found that the
basic strategy of the companies is to allure the rural mass of its product and generate sales.
The customers reported the glamour and usage of sex-appeal in all the promotions of FMCG.

Objective 2- To measure the success of rural marketing campaigns of the brands (HUL) in
terms of consumer appreciation.

To study the determinants of specification factors which decide the success of rural
promotion strategy?

Finding: It was found in the survey that rural people wanted the promotion to be more
focused on the usage and need of the product. Although the people wanted promotions but

36
they did not liked the way promotions are done these days. They wanted informative
promotions.

Objective 3-To evaluate the effects of adopting the specific brand ambassadors for different
products in the rural marketing context.

Finding: Brand Ambassadors are the most important part of promotions, in the FMCG
promotions by celebrities is very common.

Objective4- To analyze the market opportunity and potential for existing as well as new
entrants in the rural market for HUL.

a. To find the growth of rural market over a period of 5 yrs.

b. To find the behavioral changes in the rural consumers.

Finding: It was found for the various sources of secondary data the rural India has that
huge potential market that can drive the whole nation. NCAER survey reflects that by
2015. The proportion of the consuming class will be more than 50%. This is shown in the
table below.
Very rich 5%
Consuming class 54%
Climbers 34%
Aspirants 4%
Destitute 3%

Thus with lesser penetration in the rural areas, the companies are fighting hard to reach the
remotest areas to gain the advantage of capturing the market first and having an impact on the
customers mind which is till date unoccupied. The population drain form the villages have
dropped by some percent and people have found new ways to sustain their livelihoods in the

36
 villages. Government is helping to maintain this sustainability. The increase educational status in
the villages, high propensity to consume and high per capita income has forced the companies to
penetrate into the untapped rural market. This untapped market would server 70% of the Indian
population. The results from the secondary data suggest that the companies like HUL, Dabur,
P&G, ITC have extensively started to tap this market. .

FINDING

In In recent years, the FMCG sector declined due to downtrading. Also because of presence
of large number of companies trying to resize this opportunity, this force the old HLL for
the change and thus, their transformation has resulted in a new HLL, which has
successfully faced this challenge and reversed this trend. It has done so by substantially
strengthening their brands and building capabilities. This has already begun to yield
benefits and they are returning to growth. Volume growth is being followed by value
growth, which in turn is bringing profit growth. India is one of the most exciting markets
offering great potential. Over the next 10 years, the per capita income in India is likely to
double. In FMCG, there is an opportunity to catalyze penetration, increase usage, and
upgrade consumers. As a result, the FMCG market is expected to grow to over Rs.100,
000 crores from its current base of Rs.40,000 crores. The new Hindustan Lever see an
exciting opportunity for growth. They have 35 powerful brands covering all segments,
with leading market positions in most. Today, these are stronger and more relevant to the
consumer than ever. The people are energized by the scale of the opportunity and
determined to seize it. The scale of the business and operations gives them the resources
needed. They are delivering good services and the changes they brought in the products
are well taken by the customers, by this they are generating sustainable profitable growth.

The rural India harbors 70% of the total population. This vast population has now a high
propensity to consume and they have much more per-capita income than earlier. With
higher education and better sense of things they can rule the world in a much better way.
The various local languages and the dialects make the promotion in far interiors very

37
difficult but these are the most potent areas that are still untapped, so it is a daunting but
rewarding task for the companies to make a move and to understand the needs and the
requirements of the rural people. The companies have started to follow this track and
exploit the market.

The Indian growth story is now spreading itself to India's hinterlands. With rising
incomes, both consumption and production have increased significantly. Food grain
production was in excess of 227.3 million tones in 2007–08 which was an increase of an
increase of 4.6 per cent over the previous year. In 2008, the rural market has grown at an
impressive rate of 25 per cent compared to the 7–10 per cent growth rate of the urban
consumer retail market.

In most of the rural areas in different parts of the country, there is considerable awareness
on various latest products that are available in the market. This has been possible due to
the penetration of cable and satellite channels that have brought down the world at the
finger tips of the common man. The media influenced the mindset of the rural consumer
to such an extent that people who had money started purchasing the products unmindful
of the costs, just to satisfy their needs as well as their ego. But the growth of rural market
could be attributed to many other reasons that in one way increased the sales as well as
the profits of the companies. Some of the important causes for the growth of rural markets
are –

The rise in disposable income of the rural families

✔ The economic boom

✔ Timely rains

38
 ✔ Rural population involved themselves in business other than agriculture
✔ Increase white-collar jobs in nearby towns
✔ Commercialization of agriculture
✔ Saturation of the urban markets
✔ Media penetration in rural areas (particularly satellite channels)
✔ Globalization
✔ Economic liberalization
✔ Revolution in the Information Technology
✔ Women empowerment
✔ Improving infrastructure
However, there was a significant role of the corporate enterprises simultaneously in the
development of rural market. Their timely intervention into the rural areas, their
appropriate planning, their perception and identification about the growth of rural markets
and the use of marketing strategies all have equally contributed for the progress of rural
markets. Even though corporate houses were hedged with so many problems in the rural
areas, they saw a galore of opportunities in the rural market and converted all the
pessimistic characteristics of the rural market into affirmative attributes. They satisfied
themselves with the availability of limited infrastructure; saw a sign of prosperity rather
than fear during the entry of competitors into the rural markets, showed excitement at the
availability of satellite channels in the rural households, visualized their cash bells ringing
with the increase in purchasing power of the rural masses that came equivalent to their
urban counterparts. They traced a constant rise in the demand for those products that were
once confined mostly to the urban houses. But, blame it on the kind of awareness created
by the companies – people started using the products for other purposes as seen earlier.

In many villages, it is seen today the alternate use of the products other than for their
actual purpose. People in the state of Bihar feed the cattle with Horlicks as a health drink
to fatten them! Similarly, people in Punjab use washing machine not for washing clothes
but to make frothy lassi in huge quantities. Animals are rubbed with Iodex on their skins

36
to relieve them from muscular pains after a day's hard work. Paints meant for houses are
used on the horns of cattle for easy identification and theft prevention. The weavers in
North India wear condoms on their fingers as gloves to weave fine threads while its
lubrication allows them fine control on threads and protect their sensitive fingers. If
companies felt happy with their increased sales and profits through this means and
thought that they captured the rural markets, then it is time for them to review their
marketing strategies. They should understand that these results do not coincide with the
application of the marketing tools and the technical expertise that are generally used to
satisfy the customers as well as the company objectives. The implications of 4 Ps of
marketing mix or the use of 4 As for successful rural marketing have sometimes produced
wrong results. All companies usually claim that they provide the right product at the right
place at right price with right kind of promotion. Yet there are differences in the opinions
and beliefs of rural people. There was something missing in the marketing strategies of
the companies while serving the rural markets. Otherwise, the results should have been
more astonishing where the sales turnover or the balance sheet would have shown much
more than what is presently achieved. Though, only few products were used by the
consumers in this way, that use might be the result of the accidental or wrongful
application by the rural consumers. The marketer's planning about the product and the
communication with the target customers should be perfect that produces the desired
results. Thus it is important to understand the nature and behavior of the consumers and to
communicate them through the right set of modes. It is only promotions that matter a lot
for generation of sales at these levels.

37
SUGGESTIONS

38
1) Suggestion: It is recommended that the HUL should focus more on the utility of the
products while promoting in the rural areas. The life-style of these people is different
from those in the urban areas. These people want value for their money, so they want
the promotions to be more informative rather being more glamorous. The “value-for-
money” means that people will definitely buy, but they will buy only that product which
suits their needs. If once they purchase a wrong product they will never purchase it again.
This word-of-mouth may spread across and company might lose in the long run.

2) Suggestion: The HUL should provide full information in the rural promotions starting
for the need, utility, availability, price and the pack sizes available. It is recommended
that the pack sizes should be small and the pricing should be done in coinage system
example: Re.1, Rs.2, Rs.5, Rs.10 etc. This increases the affordability among the rural
consumers.

3) Suggestion: It is recommended that the brand ambassadors should be relevant to the

product and must look like he/she would be using the product in the daily life style.
Merely promoting the product by glamorous model may generate sales in urban areas but
for rural areas, information is of prime importance than glittering dances and models. The
companies should be very specific for choosing the brand ambassadors for the rural areas
as it may either boost up the sales or completely wash them out of the market.

4) Suggestion: It is recommended that the HUL should have separate strategies for rural
as well as urban markets and should take care of addressing the needs of the rural people
in their promotions. They need information so they should be provided with it. The rural
promotions should use high profile celebrities but only to an extent and not in all
products. The rural mass is very specific and may discard the product completely if not
satisfied. For new entrants in this market it is recommended to have a start from a small
portion and then increase gradually. This is because rural people purchase mostly by
word-of-mouth promotions among themselves. Thus, if success is achieved at one place

36
 then it becomes easy to expand as market is already awaiting you. Thus the promotions
should be simple and loaded with information and not with glamour.

SCOPE FOR FURTHER STUDY

The scope of the research has been limited to the Sriganganagar and near by areas. Keeping
in mind the objective stated, questionnaire was designed for the people. Subsequently a
research was conducted.

The study will provide some basic ideas regarding the brand promotional measures and the
market potential of rural sector in and around some villages of Sriganganagar in Rajasthan
and a few [22] selected villages in Abhor, Hanumangarh, Sirsa, and Bikaner . The scope of
the project is limited to the study of consumer perception regarding the selected brands of
FMCG such as soaps, toothpastes, washing powder, hair oil in the selected areas. The study
has limited exposure to the market due to time, mobility and budget constraints.

LIMITATIONS OF STUDY

1. The sample size may not adequately represent the national market.
2. This study has not been conducted over an extended period of time, it do not consider
any hangs due to changes in the sudden needs of the customer because of some
seasonal change or any kind of festivals.

3. The duration of the project work was short enough to allow the full exposure.
4. The process of lead identification to the final completion of the documentation
requires more than just two months of time.
5. Thus the project was limited to either negotiation of the deals or carrying on with an
existing lead.

37
ANNEXURE

37
REFERENCES
1. Marketing Management by Kotler, Keller, Koshy and Jha – 12E.
2. 'Advertising Express' ICFAI Journal Jan 2006 – Branding India.
3. Indian Management – May 2007.
4. "Positioning" – A1 Ries and Jack trint by warner Books.
5. The Power of Branding praxis – Business line's Journal on Management –
May 2005.
6. The Marketing White Book-2006 by business world 2E.
7. "The future of competition" by Prof.Venkat Ramasamy Co-author with C.K.
Prahalad.
8. Monish Bali, "The rural market likes it strong", The Economic Times,
[Interview by An Awasthi], August 23, 2000.
9. Neeraj Jha, "Gung-ho on rural marketing", The Financial Express, June 19,
2000.
10. T. P. Gopal Swamy," Rural Marketing, Environment-Problems and
strategies, Wheeler Publishing, 1997.
11. www.hill.com

38
12. www.indiainfoline.com
13. The Marketing Mastermind Case study HLL- Rural Marketing Initiatives
ICFAI Press, PP. 62, Feb 2003
14. B2B Brand Management – Philip Kotler and Waldemar Pfoertsch.
15. Adesara, Hetal (2004). "Making In Roads In The Hinterlands"
Indiantelevision.com Perspectives, editorials,
http://www.indiantelevision.com/perspectives/y2k4/rural_marketing.htm
16. Bhatia, Tej K. (200). "Advertising In Rural India: Language, Marketing
Communication, and Consumerism". Tokyo, Japan Tokyo Press ISBN 4-
87297-782-3.
17. Lakshman, Nandini (2003). "India Inc Eyes Rural Market". Rediff.com
Business, special http://www.rediff.com/money/2003/oct/25spec2.htm
18. Mehra, Preeti (2003). "Advertisement Perception Varies Among Urban
Rural Audiences". Business line (September) Internet edition, The Hindu group
of publication,
http://www.thehindubusinessline.com/2003/09/02/stories/2003090201640600.ht
19. Rajan R. V. (2004). "The Rural – Urban Divide Is It Melting?‖. Bangalore,
Published in MICA Communications Review, Vol. 1 (3).
20. Tan, Jacqui (2004). "Opportunities, Challenges And Innovations In
Marketing Consumer Goods to Rural Indian an Observation of a First Time
Visitor". http://scannergroup.mit.edu/IndiaTrip/Papers/Tan.pdf
21. www.indianmba.com
22. www.scribd.com
23. www.en.wikipedia.com
24. www.encyclopedia.brittanica.com

39
 QUESTIONARIE
NAME- AGE-
OCCUPATION-
MARITAL STATUS- DATE-

For customer

1) How you select the product for shopping?

A. Brand
B. Quality
C. Price
D. service
1) How you get information about product?

40
 A. Posters
B. Neighbor
C. Advertising
D. shopkeeper
1) How often you are used to go for shopping?
A. Daily
B. After 3-4 days
C. Weekly
D. Monthly
1) From which area you are belonging?
A. Rural
B. Semi urban
C. Urban
D. District head quarters

1) Your annual income?

A. 45000 to 100000 Rs.
B. 100000 to 150000 Rs.
C. 150000 to 250000 Rs.
D. 250000 or above
1) How much do you invest on consumption?
a. <30%
b. 30-60%
c. 60-80%
d. >80%
2) During purchase what in influence your purchase?
a. Price
b. Quality
c. Packaging
d. Experiment
e. Influence by others
3) Do you prefer any particular brand? ( If ‘yes’ which brand )
a. Yes
b. No

36
4) Do you know about the presence of different products of
different Companies in the same category?
a. Yes
b. No
5) Have you ever tried them?
a. Yes
b. No
6) Are you satisfied with the products you are using?
a. Yes
b. No
7) . Do you want any changes in the product?
a. Yes
b. No
8) Who are used to go for shopping?
A. Husband
B. Wife
C. Servant
D. Other
1) How you pay the bill of shopping?
A. Credit
B. Cash
C. Debit card
1) How much quantity you purchase for shopping?
A. On daily basis
B. In bulk
1) Where else you used to go for shopping?
A. Haat
B. Stall
C. Village fair
D. Toluca & district headquarter
1) Which company brand you would like most to purchase?
A. Procter &gamble
B. HUL
C. Nirma

36
 D. Local brand
1) Who more convince you to buying that brand or product?
A. Shopkeeper
B. T.V. adv.
C. Neighbor
D. Other
1) Why are you more loyal to that product?
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………
…………………………………………

For shopkeeper and dealer

2) For how many days you store product at shop?
A. 3-4 days
B. 1 week
C. 1 month
1) After how many days you got supply after order?
A. Within day
B. 1 day
C. Within week
1) Which type of product you like to store more on shop?
A. HUL
B. NIRMA
C. PRO.& GAMBLE
D. LOCAL BRAND
1) Are you convince customer to purchase any special product?
A. Yes
B. No
C. Some time when the customer in confusion.
1) Why you using store that product more?

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 ……………………………………………………………………………
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1)
2)
3)
4)
5)
6)
7)
8)
9)
10)
11)
12)
13)
14)
15)
16)
17)
18)
19)
20)
21)
22)
23)
24)
25)What is the market share of HUL?
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26)How much is the consumption of HUL’s product with respect to
the
Products of other companies?
………………………………………………………………………………
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……………..
27) Do you think customers are satisfied with the products and
services you are offering?
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……
28)What are the ways to get the feedback from customers?
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29)On which part customers are really not satisfied?
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30)How do you find the changing tastes and preferences in
customers?
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31) What is HUL is doing to tackle this problem?
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 RURAL TOOTS
Category Market penetration (in %)

2004 2005 2006 2007

Household Care

Detergent/soap 93 92 92 92

Washing 95 96 96 97
powder/liquid

Insecticide 17 20 21 21

Personal Care

Toilet soap 98 98 98 99

Shampoo 68 77 80 83

Hair oil and dressings 84 85 85 86

Skin cream 64 71 71 72

Food and Beverages

Tea 92 93 93 93

Coffee 14 15 15 15

Milk food drink 7 8 8 8

Oil/ghee/vanaspati 98 97 98 98

HH Universe (000s) 136043 138682 141321 143855

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RURAL RELATION CLINTS

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Projects handleds Clients

Sampling activities in
villages
Asian
HLL P&G Tata Tea
Paints

Social-led activities

hygiene care for oral care for HPCL

Lifebuoy Pepsodent

Identifying
franchisees/Remizer
Reliance Money Onida TV Microsoft

Lead-generation
activities
Mahindra &
Tata Sumo Reuters
Mahindra

Customer profiling
activity
ICICI Bank Hutch TVS Kisan

Information-led
services on sms
Reuters TVS Kisan

Organize training
programs DSP Merill
Reliance Money Asian Paints ICICI Bank
Lynch

37

Direct mailing activities

Mission Mahindra &
Onida TV Kisan
Biofuel Mahindra
 Tata Tea Tata Steel Cavinkare Asian Paints L&T HLL

Corporate Social
Responsibility (CSR)
HPCL Mahindra &
Mahindra

Exhibitions
Crompton Greaves Kisan

Wet Sampling

Tata Tea Rasana

38