Attractiveness of rural market The Rural Market Has just arrived

Last year LIC sold 55%of its policies in rural India. Of two million BSNL mobile connections,50%are in small towns/villages Of the six lakh villages 5.22 lakh have a village public telephone 41 million kisan credit cards issued (against 22 million credit plus debit cards in urban ) with cumulative credits of 977 billion resulting in tremendous liquidity. these towns on rediff online shopping sites.

Of 20 million rediffmail signups,60%are from small towns. 50%tranasctions from 42 million rural household availing banking services in comparison to 27 million
urban households.

Investment in formal saving instruments;6.6 million households in rural versus 6.7 million in urban.

1. 2. 3. 4. 5. 6. 7.

Large population Rising prosperity Growth consumption Life cycle changes Market growth rate higher than urban Rural marketing is not expensive Remoteness is no longer a problem

1. Large population: The rural population is larger and its growth rate is also high. Despite the rural urban migration, the rural areas continue to be the place of living majority of Indians

2. Rising rural propensity: 1992-93 Income group Above 1.6 Rs.100,000 Rs.77,0012.7 100,000 Rs.50,001-77,000 8.3
Rs.25,001-50,000

2002-03

2012-13

3.8 4.7 13.0 41.1 37.4

5.6 5.8 22.4 44.6 20.2

26.0

Rs.25000&below 61.4

Thus we see that population between incomes levels of Rs.25, 000-77,000 will increase from 34.3% in 1992-93 to in 1992-93 to 67%in 2012-13. The rural consuming class is increasing by about 3-4% per annum, which roughly translates into 1.2 million new consumers yearly.

Growth in consumption:

Per capita House hold Expenditure (in Rs.)

Level High (above Rs.382)

No.

States Punjab Kerela Rajasthan Gujrat Andhra Pradesh Maharashtra Haryana West Bengal Orrisa Tamil Nadu Uttar Pradesh Karnataka Assam Madhya Pradesh Bihar

Expenditure 614 604 452 416 386 384 546 382 381 381 373 356 338 326 289

Average (Rs.382) 5 Low (Below Rs.382) 3

Distribution Households income wise (Projection in Rs.crore) Income groups 2002-03 2012-13 Rural Total High 0.26 No. 0.07 % 26.9 Rural total 0.52 No. 0.12 % 23.1

Rural Market Senario Most MNCs that came to India after 1999 targeted India upper middle class to
earn more revenues.

According to industry estimates rural India accounts for 74%of population and
58% of Indian rural disposable income.

Rural India is also characterised by growing affluence agricultural output

increasingly to early 215 million tonnes compared to 176 million in 1991.

According to data compiled by the National council of Applied economic

research rural india now accounts for the 70% of toilet soap users, and 38%of two-wheelers purchases come from india.

Atlanta based Coca-Cola company is one of the first global masors to have
spotted the potential spin offs from the countries rural market.

It has perfected a unique supply chain to carter to Indias vast rural markets
hinterland. The result are working aand coca-cola india rural penetration increased from 13 % in 13% to 25% up to now.

Over to this period,the numbers of companys rural distributors increased

from less than 4000 to 5500.

Colas being fast moving consumer goods ,hold enormous potential from a
manufacturer like the Coca-Cola company. The biggest reason for this is the low per capita consumption, which coke estimates at 3.7 bottles person per year compared to 10 bottles per person per year for all India .

The project:
SAMPLING Selection of Sample: Sampling allows us to concentrate our attention upon relatively small number of people and hence devote more energy to ensure that the information collected from them is accurate.

POPULATION: People from the villages of blocks Fatuha, Daniawan,Khusrupur and Punnpun of rural division of Patna.

SAMPLE FRAME: Retailers at Fatuha ,Daniawan,Khusrupur and Punpun blocks

SAMPLE UNIT: Is availability of FMCG outlet, Cold drink outlet, Post office, Bank and School,is there in the particular village of those areas.

SAMPLE METHOD: Stratified Sampling.

RESEARCH DESIGN

The research was divided into two parts they were, 1. 2. Survey Implementation

DATA COLLECION APPROACH:

The Data was collected through two sources, Primary sources: a) Questionnaire b) Personal interaction

DATA COLLECTION METHOD: VISITING THE PARTICULAR VILLAGE RETAILER SURVEY PERSONAL INTREVIEW

DATA COLLECTION TECHNIQUE: QUESTIONAIRE PERSONAL INTERVIEW

Result and findings:

Fatuha division:
No.of villages No.of having villages population>500 having FMCG outlets No.of villages having cold drink outlet NO.of villages having Post office No.of villages having Banks NO.of No.of villages covered villages by having DISTRIBUTOR/AMC/ schools

RAMP

62

21

14

11

62

14

Daniawan division:
No of villages No having villages population>500 having FMCG outlets of NO.of villages having cold drink outlet No.of villages having post office No.of villages having Banks No.of villages Having schools No of villages covered by DISTRIBUTOR/AMC/ RAMP

Khusrupur division:

No.of villages Villages having having population>500 FMCG outlet

Villages having cold drink outlet

Villages having Post office

Villages Villages No of villages covered having having by bank DISTRIBUTOR/AMC/

schools

RAMP

28

19

14

11

28

14

Punpun division: No.of villages Villages Villages having having having population>500 FMCG cold outlet drink outlet
Villages Villages Villages No of villages having having having covered by Post banks schools DISTRIBUTOR office

/AMC/RAMP

56

30

56

21

FINDINGS 1. Few of the outlets are shared.

2. The basic problem is that the supply from the plant to the depot and then to the distributors takes a long time due to which the distributors are not in the position the supply the required quantity to the retailers.

3. The sales people and the distributor have maintained good relationship with retailors 4. On an average the expected visits are weekly twice to the retailors.

5. Many villages dont have cold drink outlet.

CONCLUSION Distribution Channel plays a very important role especially with respect to the soft drink industry because if the product is not available on time the consumes will switch on to other brands and the company will lose its market share and hence an effective distribution channel is the need of this industry. There should be one distributor per block to increase the coverage to remote areas.

ARM format for preparing report:

District name Subdivision Block Village Village population FMCG outlet Cold drink outlet Post office Y/N /AMC/RAMP Bank Y/N School Y/N Coverage Y/N If yes Distributor