Rural India..

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INDEXINDEX

SR NO. TOPICSPAGE

NO.

1. Objectives of our project 1

2. Introduction of rural market 2

3. Competition in rural market 3

4. Profile of rural market & consumer 4-6

5. Market segmentation 7-8

6. FMCG industry 9-11

7. Our market study 12-13

8.Why shampoo…?? &

Consumer buying behaviour14-16

9. Product launch 17

10. 4 P’s of our product 18-29

11. Unique Selling Proposition 30

12.Our logo , print advertisement & Story

Board31-33

13. Our tag line and distribution strategy 34

14. Marketing strategies 35

15. Conclusion 36

Objectives of our project

To understand Indian rural dynamics and Indian rural consumer behaviors.

To provide a back drop of the Indian Shampoo Market in the rural context.

To highlight the successful strategy that our product will employ in the rural market.

Introduction of Rural Market:

India’s vast rural market offers a huge potential for a marketer facing stiff competition in the urban markets. The rural market environment is very different from the familiar surroundings of the urban market. Rural consumers have customs and behaviors that the marketers may find difficult to contend with. The opportunities in the rural market are demonstrated by comparing consumption levels in urban and rural market for different product categories. Their volumes and growth show the importance of the market.

Understanding demographic profile of consumers and their response to brand offering is a useful approach to analyses the rural market. The use of an existing network of channels in the rural market is the key to connecting with the rural heartland. Haats and melas that are unique to rural markets, supplement the retailer route to the rural market. The interactions between consumers and these unique institutions provide information for use in marketing decision.

Competition in Rural Market:

Competition in rural markets is varied in nature and a marketer faces competition not only from other brands but also from substitutes, especially in places where the product is new to the consumer. Such situations are quite common in rural markets. Competition for existing brands can be from other brands, from new player’s small unorganized sectors, duplicates and imitation. The task for a new player entering in the market is difficult given the advantage that entrenched brands have in rural markets.

Entry strategy for a new player, the entry of a new brand in the rural market is a difficult proposition. This is because in rural markets the pioneer creates a lasting impression and loyalty to such brands is higher. In the case of the organization entering in the rural market for the first time the sheer size of the market in geographic terms poses a formidable challenge in accessing retailers.

Entry strategy in such situation includes, • Efforts to create shelf space for the product • to establish a symbiotic relationship with an existing marketer. Consumer pull creates a space for the brand on the retail shelf that is difficult to replace. In such a situation competitive efforts that rely on positioning alone are unlikely to create a sufficient impact.

Profile / Features of Rural Markets:

1 Large and scattered market:

The rural market of India is very large and scattered, in the sense

that it consists of over 63 crore consumers from 5, 76,000 villages

spread throughout the country.

2 Major income from agriculture:

Nearly 60% of the rural income is from agriculture. Hence rural

prosperity is tied with agricultural prosperity. During the harvest

season, the demand for consumer goods in the village goes up. The

size of the rural population securing income from the non-agricultural

sector is now increasing with the advent of rural development

programmes.

3 Low standard of living:

The consumers in the village areas do have a low standard of

living because of low literacy, low per capita income, social

backwardness, etc.

4 Traditional outlook:

The rural consumer values old customs and traditions. A change

is beginning to take place in their outlook because of growth in literacy

rate and mass media in the rural areas.

5 Diverse socio-economic background:

Due to this large and scattered rural population, there is great

diversity in the socio-economic background as this differs in every part

of the country. This brings diversity among rural customers and

market.

6 Changing demand pattern:

The demand pattern of the rural consumers is fast changing.

There is a new and growing demand for toiletries, ready-made

garment, cosmetics, packaged foodstuffs, etc. This change is due to

the increase in the rural income.

7 Infrastructure facilities:

The infrastructure facilities like roads, warehouses,

communication systems, financial facilities are inadequate in rural

areas. Hence physical distribution becomes costly due to inadequate

facilities.

8 Saving habits:

The saving habit of the rural consumer is increasing in the recent

years as a result of the efforts put by co-operative and commercial

banks.

Profile of Rural Consumer:

1. Low literacy level:

It is estimated that the literacy level in rural India is 45% as compared to 52%for the entire country. The rural literacy in the rural areas on an increase. Due to this the hoardings and print media cannot make a significant impact. The literacy rate has its implication in communication with the rural population.

2. Rural income:

An analysis of the rural income pattern reveals that nearly 60% of the rural income is from agriculture. A large part of the income is spent on meeting the basic needs of life i.e. food, clothing, and shelter leaving a smaller portion for other consumer goods.

3. Rural savings

The commercial banks and the cooperatives have been marketing the saving habit in the rural areas. Today nearly 70% of the rural households are saving a part of their income.

4. Occupation:

In rural areas the main occupation is farming, trading, craft and the other odd jobs like plumbing, electrical work, carpentry etc. The consumption pattern differs according to the level of income.

5. Brand loyalist:

It is not easy to introduce new products for them. They are bigger brand loyalists than their counterparts.

6. Inter-personal communication:

Inter personal communication accounts for 805 of the rural communication process in the villages. This means that word of mouth recommendations by users and sheer familiarity influences rural folk in their purchase decisions.

Market Segmentation in Rural Markets:

Rural market is not a homogeneous market and therefore cannot be served with the same product-price-promotion combination. The marketers have to carry out a thorough and data based market segmentation, select the relevant segment as their target market and develop appropriate marketing-mix and positioning strategies and for the chosen market segment.

A company can segment rural markets by using several bases. Some of them are:

Geographic segmentation Demographic segmentation Psychographic segmentation Buyer behavioral segmentation.

Among these the Geographic and Demographic segmentations are the important ones.

Geographic segmentation:

1. Climate:

Regions endowed with favorable climate are usually more prosperous.

2. Irrigation level:

Irrigated areas and dry land areas pose different marketing environment

3. Level of agricultural advancement:

In this approach different parameters like adoption level of high yielding varieties, level of fertilizer use and standards of agricultural practices will have to be considered.

4. Nearness to the feeder Town:

Studies have also revealed that rural consumers who are located near a feeder town are different from those living in remote areas in terms of exposure and buying habits.

Demographic segmentation:

1. Population:

The rural market can be segmented on the basis of different size classes with respect population.

2. Age:

Surveys have revealed that the younger generation dominates the purchases in the rural market. This is due to the literacy and changing values and life-styles.

3. Literacy:

Though rural India in general is characterized by low literacy there are wide variations in literacy within rural India.

4. Income:

Since the income distribution in the rural market is quite uneven the income base can be a useful base for segmenting the rural market.

Our market segment is demographic segment

Target audience: lower middle class semi-rural females age group of 16 plus

Rural Markets: The Next Frontier for FMCG CompaniesRural Markets: The Next Frontier for FMCG Companies

Introduction:

After years of growth derived primarily from the urban markets,

the FMCG companies have now realized that India lies in its rural

villages. So much so that rural marketing has become the latest

marketing mantra of most FMCG majors. With extensive competition

not only from MNCs but also from the numerous regional players and

the lure of an untapped market has driven the marketers to chalk out

bold new strategies for targeting the rural consumer in a big way.

After all these years with wide arrays of consumer insights at

hand for the urban market, why is this urge of FMCG companies to

enter the uncharted territory of rural India. To begin with it all about

the sheer size of the market, and yes size does matter when it come to

FMCG products. Over 70% of India’s 1 billion plus population lives in

around 627,000 villages in rural areas.

This simply shows the great potentiality rural India has to bring

the much-needed volumes and help the FMCG companies to bank upon

the

Volume–driven growth. Also, the rural market has been growing

steadily over the years and is now bigger than the urban market for

FMCG’s (53% share of the total market) with an annual size in value

terms currently estimated at around 50,000 crores.

According to one study, if the rural income in India goes up by

1%, there would be a corresponding increase of about Rs. 10,000

crores in the buying power. On the other hand, the urban sector has

shown little signs of growth in the last 12 months.

It is a definite boon in disguise for the FMCG majors who have

already reached the plateau of their business curve in urban India and

are desperately seeking new ways to increase sales.

Thus it becomes amply clear that rural India has to be the hot

target in future for FMCG companies as it presents a plethora of

opportunities, all waiting to be harnessed. Many of the FMCG

companies are already busy formulating their rural marketing strategy

to tap the potential before competition catches up. All biggies in the

industry be it HLL, Marico, Colgate-Palmolive or Britannia, are showing

deep interest in rural India. However not everything is all rosy and

there exist some gray areas in the rural strategies also.

So it is clear that rural markets have caught the eyes of FMCG

marketers and it is being targeted through experiments in a big way.

But is it a right marketing strategy? Or will it prove to be an expensive

mistake?

Shampoo market of urban/rural

Urban market of shampoos account’s for 65% of the market and is growing at 10%.

Rural market of shampoos account’s for 35% of the market and is growing at 16%.

Sachets contribute roughly 65% of the total volumes with bottle making up to the balance 35%.

Our Market StudyOur Market Study

For our market study on Shampoos, we visited Kanhore. It is

located 5kms away from Badlapur station.

The person, we interviewed Anil Shinde and the sarpanch of the

village.

Profile of the Kanhore village:

1. Occupation

The major occupation of people in this area is Farming, Dairy business

and other agricultural business.

There are also people working in Ordnance factory (Ambernath)

2. Population and literacy:

It is a place with approximate population of about 2000. About 30 % of

adult population here is literate whereas the literacy rate of children is

about 65%.

3. Income of the people:

Income of the people is generally through agriculture so it is stable and

the people working in ordnance have a increasing level of income.

4. Demand for shampoos:

The demand for the shampoos in this area is moderate and people are

expecting good shampoo with reasonable price.

Key Factors in rural purchase

Factors influencing purchase of shampoo in rural markets

% of respondents

Looking at the wrapper 60Retailer recommends 25Looking at the price 4Logo identification 2Doesn’t bother to check 9

We have selected shampoos which fall under the category of FMCG

products. Before we go any further, let us look at what FMCG products

are?

FMCG basically refers to those consumer non-durable goods which are

required for daily or frequent use. Typically, a consumer buys these

goods more frequently as compared to consumer durables.

Shampoos in rural india

Shampoos:

o Clinic Plus Rs.2/-

o Lux Re.1/-

o Chik Re.1/-

o Sunsilk Rs.2/-

o Ayur Rs.2/-

o Nyle etc. Rs.2/-

Why shampoo….??

In the era of cutthroat competition every company searches for new

market and new product. A year round tropical climate makes it

difficult to maintain hair softness and shine.

Tangled hair – common complaint in girls and women.

Softness and manageability – key issue is the maintenance and nourishment of hair.

As the study shows only 35% of the rural people use Shampoo’s so there is a wider scope for volume expansion by converting the non users.

SOAPS:

Disadvantage of soap for hair wash:

Even though soaps have been traditionally used, there are various reasons why they are not effective cleansers like shampoos:

They leave behind fine granule-like deposits of calcium and magnesium, leading to an unhealthy scalp.

In hard water they leave behind a deposit on your hair, making it dull and difficult to comb. This results in hair breakage.

Soaps are harsh on your hair because they strip the hair of its natural oil, making it dry, coarse and rough to touch. What’s more, you’ll find that your hair gets easily tangled and looks dull and lifeless.

Shampoos Vis--Vis Soaps:

Shampoos are better cleaning agents because...

They are made from detergents which cut through grease more easily.

They lather and spread more easily than soaps. This also makes them easier and convenient to use. 

Unlike soap, shampoo is pH balanced and cleans hair gently, without leaving behind residue.

Shampoo lifts off excessive oil, sebum, pollutants, sweat, dust and dandruff.

Consumer buying behaviour for shampoos:

The frequency of shampoo usage is very low. Most consumers

use shampoo only once or twice in a week. In many cases, these

products are used on special occasions such as weddings, parties

etc.

Some customers use shampoo only to address a specific problem

such as dandruff or when they need to condition their hair.

About 50% of consumers use ordinary toilet soaps to wash their

hair

Brand loyalties in shampoo are not very strong. Consumers

frequently look for a change, particularly in fragrance

Consumers attribute lathering to the act of cleaning

Major expectations from the product are improvement in texture

and manageability, giving softness and bounce to hair, curing

and avoiding damage to the hair

Most consumers do not use shampoo daily

Most of the consumers prefer shampoo sachets compared to

shampoo bottles.

Urban areas - 90 %, accounting for 80 % of shampoo sold in the

country

Rural areas - 80 %, accounting for 20 % of shampoo sold in the

country

Shampoo penetration:-

All India Shampoo - 14 %

Urban - 40 %

Rural - 10 %

Average shampoo growth has been 20% in the last few years

and it is expected to be about 25% in the coming years.

Product LaunchProduct Launch

Rural Care India Ltd. is our company where our prime focus is to

give the goodness of ayurveda to rural consumers.

About “CHAMPI” Shampoo

The word ‘Shampoo’ is derived from the Hindi word “Champi”.

For long ,black and silky hair, free from dust and dirt, we give

you the goodness of Shikakai, Reetha, Amla, Coconut milk, curd,

Neem, Aloevera, lemon.

Champi is an all rounder shampoo as it has been prepared to

take care of all major hair problems.

Four P’sFour P’s

Product

'Champi' is formulated with herbal Conditioners that condition the hair

and makes hair soft and helps keep it more manageable.

• Shampoo with ayurvedic herbs

• Coconut milk acts as a natural moisturizer and neem will do the

job of an anti-dandruff shampoo.

Key Contents:

Shikakai

Reetha

Amla

Coconut milk

Curd

Neem

Aloevera

Lemon

Range of products champi-

1. Aloe Vera champi

2. Nimbu champi ( anti dandruff)

3. Amla champi

Price

The study conducted by us also revealed that though the

aspiration to use shampoo was there, the need to spend more did

not appeal to the rural consumers. Though pricing is important, rural

consumers favor quality as well. For rural consumers, a purchase is a bigger

investment than it is for the urban consumer. Hence, a particular brand will

be rewarded only if it earns the rural consumer’s trust through consistent

product quality.

To arrive at a solution for this situation, we introduced the 50

Paise shampoo sachet, which easily satisfied a single wash. This

innovative move the rural customer an opportunity to try the product

at a very low price. It will do wonders for the brand and Champi has an

opportunity to be sold out like hot cakes.

Champi is prices as –

Sachets for .50 paise - 5ml

Bottle for Rs.5/- 50 ml +( 2 ml free)

To offer the consumer value for money we have come up with

the concept that bottles will be cheaper than the sachets. We have to

be innovative and economize on the cost of bottle, packaging and

other things and so, we came out with a 50 ml bottle of Champi for

Rs.5 with 2ml more in the bottle when costs are compared. This

move will result in a huge volume of sales and help the growth of

Champi.

This will show that the rural consumer will buy a product only if

he sees enough value for money.

Recruiting customers is the key issue as the rural consumer is

rational and value conscious.

Special offers:

• Along with Champi bottle’s combs will be provided during special

occasions.

Promotion

The main objective for RURAL CARE is to develop “Champi”

shampoo as a brand.

Marketing is all about reaching the right place before the

competition does, and this is where rural care has its biggest

advantage as, with Champi Shampoo it is bang on target.

Promotional tools:

• By presenting live demos of the actual usage of the

shampoo

Product (trails)

Shampoos getting encouraging trail from rural consumers from extremely low penetration levels.

Many people have no clue how to use a shampoo.

To encourage trails, rural case’s team traveled extensively in rural pockets.

Trails on school boys to demonstrate how to lather and wash, comb hair and show the difference.

“We were as thrilled and excited as the volunteers during the demonstrations. This exercise had a significant impact in breaking ice and made people comfortable with the concept.”

• By paintings on walls, bullock carts etc

Wall Paintings are an effective and economical medium for

advertising in rural areas. They are silent unlike traditional

theatre .A speech or film comes to an end, but wall

painting stays as long as the weather allows it to. Rural

households’ shopkeepers and panchayats do not except

any payment, for their wall to be painted with product

messages.

The greatest advantage of the medium is the power of the

picture completed with its local touch.

Our company will paint its advertisements near:

Schools

Colleges

Market areas

Buses

And other transport modes.

Haats & Melas

The countries oldest tradition holds the key to rural penetration.

The average daily sale at a Haat is about Rs.2.25 Lacs while the

annual sales at melas amount to Rs.3, 500 crore.

In rural India, annual melas organized with a religious or festive

significance are quite popular and provide a very good platform for

distribution. Rural markets come alive at these melas and people visit

them to make several purchases.

According to the Indian Market Research Bureau, around 8000

such melas are held in rural India every year.

Rural markets have the practice of fixing specific days in a week

as Market Days when exchange of goods and services are carried out.

This is another potential low cost distribution channel available to the

marketers. Haats serve a good opportunity for promotion after brand

building has been done at Mela.

Also, one satellite town where people prefer to go to buy their

durable commodities generally serves every region consisting of

several villages. If marketing managers use these feeder towns they

will easily be able to cover a large section of the rural population.

Melas are organized after harvest season, so the villager has enough

money, which he will be ready to spend. Demonstration at Haat is

essential to convert customers at haats since their attitude is far more

utilitarian than that of visitors to a fair.

• Traditional media (skits)

• Puppet Shows

• Audio Visuals

• Radio

• Language used on the packages is in “Hindi” also.

Place

The place covered is the villages of the Thane suburbs

(villages in thane districts).

• Mainly in the grocery shops(“kirana”)

• Kumbh Mela”s

• Weekdays Bazaar(“mandi”)

Unique Selling Proposition (Usp)

       DEFINITION: USP i.e. Unique Selling Proposition can be defined as the distinctive benefit or advantage a producer provides to his/her

customers over his/her competitors.

The concept of "USP" is credited to Rosser Reeves, chairman of the Ted Bates & Co. advertising agency in the 1950s. He was one of the first to develop a technique for communicating in an overcrowded marketplace.

      The USP can be of different kinds like: Low price, higher quality, free gifts, or any other kind of advantages.

 USP of product EXAMPLE

Low price Tide washing powderA wider choice of product

Sunsilk

Superior level of customer service

Maruti udyog ltd.

Higher quality Pepsodent

      In order to successfully market its product every manufacturer needs to focus on what’s special & unique about his/her product , this sets him/her apart from his/her competition & allows the owner to stand out from the crowd.

Unique selling proposition of “Champi”:

“Herbal conditioner”

LOGO:

PRINT ADVERTISEMENT:

Balon ko deni ho pyaar ki jhappi,toh unhe lagao shampoo “Champi”..

Tagline: “Champi lagale aur Aaja nachle”...

Distribution strategy:

The distribution of our products will be done through retailers then to the rural customers.

Manufacturer- retailer- rural consumer

CHAMPI DISTRIBUTION CHANNELCHAMPI DISTRIBUTION CHANNEL

Champi Champi ManufacturerManufacturer

RetailersRetailers

Rural CustomerRural Customer

Marketing strategiesMarketing strategies

The launch of sachets which has transformed the rural market

considerably as packaging in smaller units and lesser-priced

packs increases the product’s affordability.

The winning strategy instead is to focus on their basic needs by

providing it at a low-cost rather than focusing on technology.

Hired managers from rural management institution for the

overall progress of rural markets.

Products are design keeping in mind the cultural dynamics, the

needs and latent feelings of the rural consumers.

Rural illiterate masses can easily identify our product by its

packaging through color, visuals, size etc.

Proper sales and distribution network.

ConclusionConclusion

In the end it is certain that FMCG companies will have

to really gain inroads in the rural markets in order to

achieve double digit growth targets in future. There is

huge potential and definitely there is lot of money in

rural India but the smart thing would be to weigh in the

roadblocks as carefully as possible. The companies

entering rural market must do so for strategic reasons

and not for tactical gains as rural consumer is still a

closed book and it is only through unwavering

commitment that the companies can make a dent in

the market. Ultimately the winner would be the one

with the required resources like time and money and

also with the much needed innovative ideas to tap the

rural markets.

Story Board Story Board

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“Champi ka Chamatkar”