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A

PROJECT REPORT

ON

Impact of Marketing Strategies on Indian

Rural Market wit special reference

To !MC"

Submitted forpartial fulfilment of award of

Bachelor of Business Administration

Submitted By:

Abhey Khosla

PUPINNO: 14213000496

S! "o#e$%me%t olle&e 'udhia%a

(2013)16*

Ta#le of Contents

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C$APTER %&

INTRO'(CTION )))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))) *+

Introduction

Consumer,s Perception

'efinition of Cellular-Mo#ile pone

Te "lo#al Cellular Mo#ile Industr.

Telecom Industr. in India

$istor. of Indian Telecommunications

Introduction of mo#ile companies

O/JECTI0ES O! T$E ST('1 ))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))) 2*

C$APTER%3

RESEARC$ MET$O'O4O"1 ))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))) 23

'efinition

Sampling metodolog.

Researc design

'ata collection

4imitations

C$APTER%2

'ATA ANA41SIS AN' INTERPRETATION ))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))) 25

/ar "raps

C$APTER%6

RES(4TS AN' !IN'IN"S )))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))) 77

S(""ESTIONS )))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))) 75

/I/4IO"RAP$1 ))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))) 7+

8e# Resources9

APPEN'I: )))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))) 5*

'EC4ARATION

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I, Abhey Khosla, a Student of BBA 2013-1 Batch, at S)C)') "o;ernment College< 4udianahereby declare that the pro!ect on the topic =Impact of Marketing Strategies on Indian Rural

Market wit special reference to !MC")> is my ori"inal wor# and that it has not pre$iously

formed the basis for the award of any other %e"ree, %iploma, &ellowship or other similar titles' It

has been done under the "uidance of all my teachers'

(Si"nature)

Student name

CERI!ICATE O! APPRO0A4

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*his is to certify that the pro!ect wor# entitled+Impact of Marketing strategies on Ruaral Marketsin India wit special reference to !MC"s is a bonafide wor# carried out by Mr A#e. ?oslaIn

partial fulfilment for the de"ree of Bachelor of Business Administration at S)C)') "o;ernment

College< 4udiana affiliated to Pan@a# (ni;ersit.< Candigar' *he pro!ect report is appro$ed

here with'

(*eacher.s name)

Assistant /rofessor

S% o$t' olle"e, udhiana

AC?NO84E'"EMENT

hen I embar#ed this pro!ect, it appeared to me as onerous tas#' Slowly as I pro"ressed I did reali4e

that I was not alone after all' 5y sincere than#s to all the faculty members and friends'

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I am deeply indebted to all my teachersfor not only their $aluable and enli"htened, "uidance but also

for the freedom they rendered me durin" this pro!ect wor#'

5y heart "oes out to my parents who bear with me all the trouble I caused them with smile durin"

the entire study period and beyond'

Abhey Khosla

1621300067

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C$APTER %&

INTRO'(CTION

Introduction9

*he rural mar#ets are estimated to be "rowin" $astly compared to the urban mar#ets' *he

potentiality of rural mar#ets is said to be li#e a 8wo#en up sleepin" "iant8' *hese facts are

substantiated in a study of mar#et "rowth conducted by $arious researches' In recent years,

rural mar#ets ha$e ac9uired si"nificance in country li#e India' :n account of the "reen

re$olution in India, the rural areas are consumin" a lar"e 9uantity of industrial and urban

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manufactured products' *he Indian rural mar#et is $ery $ast in si4e and in demand base' It

offers "reat opportunities to mar#eters' About ;62 million of country.s consumers li$e in

rural areas and almost half of the national income is "enerated here' per cent of the male wor#in" population en"a"ed in a"riculture and allied

acti$ities would 9ualify as rural' Accordin" to this definition, there are 3?000 $illa"es in

the country' :f these, only 0'> percent has a population of abo$e 10,000 and 2 per cent

ha$e population between >,000 and 10,000' Around >0 per cent has a population less than

2000'

(N'ERSTAN'IN" R(RA4 CONS(MERS

A comple= set of factors influence rural consumers beha$iour' Social norms, traditions,

caste and social customs ha$e "reater influence in consumer beha$iour in rural areas than

in urban areas' *he seasonality of a"ricultural production influences the seasonality of rural

consumers demand' i$en the fact that the landless labourers and daily wa"e earners

recei$e their income in instalments, their purchasin" is restricted to small 9uantities of

products at a time, mostly on a daily basis or once in two or three days'

/urchase decision process also shows certain characteristics that are 9uite si"nificant

implications' @=hibitions and road shows act as some of the #ey tri""ers for information

search beha$iour' :pinion leaders and people who are percei$ed to be #nowled"eable play

an important role as information pro$iders and ad$isors'

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ord of mouth has more si"nificance in the purchase decisions of rural consumers' As the

percei$ed ris# of buyin" tends to be hi"her, rural consumers e=hibit a "reater in$ol$ement

in the purchasin" process, leadin" to more detailed information search beha$iour' &amily

members, relati$es and friends are consulted before ma#in" purchase decisions by rural

consumers' Since the reach of electronic media and other mass ad$ertisin" is low in rural

areas, dependence on information, ad$ice and su""estions from other people are hi"her'

R(RA4 IN'IA9

*he rural mar#et is an area of dar#ness to Indian entrepreneurs' *he Indian rural mar#et,with its $ast si4e and demand base, offers "reat opportunities to mar#eters' 5ore than ;0

per cent of the country.s consumers are in the rural mar#et and more than half of the

national income is "enerated here' *he rural mar#et is $ery much lar"er than the urban in

the a""re"ate' et, the rural mar#et represents the lar"est potential mar#et in the country'

Its primary acti$ities are a"riculture, animal husbandry, fisheries, forestry etc' *he data

shows that in "rowth rate of the e=penditure too, rural mar#et, has been matchin" the

urban' It contributes to o$er half of India.s %/' It does not la" behind the urban in

"rowth rate of %/ either' If consider "rowth rates in per capita income, rural mar#et has

been more or less matchin" the urban'

*he rise of rural mar#ets has been the most important mar#etin" phenomenon of the

1770.s, pro$idin" $olume "rowth to all leadin" companies' 5any corporates ha$e been

tryin" to "et a "rip on rural mar#et' *he reasons why companies are "oin" rural are

manifold' i"her rural income dri$en by a"ricultural "rowth, increasin" enrolment in

primary schools, hi"h penetration of tele$ision and other mass media ha$e increased the

propensity to consume branded and $alue added products in rural area'

As a result of the +reen

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chan"e in the attitude of the Indian rural people is sweepin" across the countryside' *he

e=pandin" rural mar#et is important to the "rowth of economic de$elopment of India'

ith the chan"e in scenario, the mar#etin" focus is also chan"in" towards $illa"esC +o

rural is the slo"an of mar#etin" "urus'

E0O4(TION O! R(RA4 MAR?ETIN"9

*he total en$ironment in India is under"oin" a massi$e chan"e' *here has been a

si"nificant "rowth in purchasin" power, chan"e in lifestyle, increase in brand

consciousness, chan"e in consumption pattern, impro$ement in infrastructural facilities

and spread of communication networ#' *hese chan"es ha$e resulted in shiftin" the

mar#etin" battlefields from cities to $illa"es' +o

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$ery content of rural mar#ets'

%urin" this phase, apart from con$entional Ea"ricultural mar#etin"., a new area F

Emar#etin" of a"ricultural inputs. F emer"ed' *his period saw the emer"ence of companies

such as 5ahindra D 5ahindra, @scorts, @icher, Sriram &ertili4ers D I&&:'

%urin" this period, the mar#etin" of rural products recei$ed considerable attentions

throu"h a"encies li#e KGI (Khadi D Gilla"e Industries ommission), Bun#er (wea$er)

societies and handicrafts emporiums' *he promotion of $illa"e industries,

supported by the "o$ernment throu"h e=hibitions D Eram Shree 5eals. and EShilpa

5eals., resulted in the inflow in to urban mar#ets on a lar"e scale, of products li#e

handicrafts, handloom te=tiles, lather products etc'

Pase III B&*s % 3***D9

%urin" the fast two phases, the mar#etin" of consumables D durables to the rural

mar#ets was not considered seriously' *he prime reasons for this wereC

*he potential of rural mar#ets was not $isible' *he e=itin" rural mar#ets for these

/roducts were not si4eable enou"h to attract the attention of urban mar#eters'

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mar#ets for lon" ha$e now be"un plannin" to enter the rural mar#et'

*he "o$ernment is ta#in" serious steps to de$elop the rural mar#et' o$ernment

initiati$es li#e farm loan wai$ers and employment and rural infrastructure de$elopment

pro"rammes recei$ed a ma!or thrust after 2000' *hese initiati$es attempt to brid"e the

"ap between the rich and the poor'

'E!ININ" R(RA4 MAR?ETIN"9

Accordin" to the national commission on a"riculturalC E

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effecti$e demand for specific products D ser$ices D mo$in" this products D ser$ices to

the people in rural areas to create satisfaction le$el D a better standard of li$in" D there by

achie$in" or"ani4ational "oals'

REASONS !OR CORPORATE TO "O R(RA49

In the present scenario, companies operatin" in India will ha$e only two options either "o

lobal or "o 0 of total rural incomes' It.s a mar#et that

corporate cannot afford to i"nore' Another reason for the risin" disposable incomes

of $illa"es is that a"ricultural income is not ta=ed'

Remittances from A#road 9

5any household in rural India ha$e one of their family members abroad, mostly in

ulf countries' /eople wor#in" there send their sa$in"s to their families in India,

which is an additional source of income'

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&)F PRO/4EMS IN R(RA4 MAR?ETIN" 9

Althou"h the rural mar#et does not offer $ast potential, it should also be reco"ni4ed that it

not easy to operate there'

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for of the country.s rural retail outlets, the total number of which is placed at around

3'; million' %istrict fairs are periodic and occasional in nature' 5anufacturer

and retailers prefers such occasions as they allow "reater $isibility and capture the

attention of the tar"et audience for lar"er span of time'

4ow Per Capita Income9

@$en thou"h about 2 of %/ is "enerated in rural areas, it is shared by ;6 of

the population, so per capita incomes are low' 5oreo$er demands for "oods in rural

mar#ets depend upon the a"ricultural situation, as a"riculture is the main source of

income and it depends upon the monsoon to a lar"e e=tent' *herefore, demand is

not stable or re"ular'

4ow 4e;els of 4iterac.9

iteracy rates are low in rural areas compared to urban areas' *his leased to the

problem of communication' *he print medium is ineffecti$e in rural areas since its

reach is poor'

Pre;alence of Spurious /rands And Seasonal 'emand9

&or any branded product there are a multitude of local $ariants, which are cheaperand therefore, more desirable for $illa"ers'

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%emo"raphic factors are ta#en into detailed consideration for mar#et

se"mentation of consumer "oods and fast mo$in" consumer "oods (&'5''')' In case

of rural mar#etin" i'e', to sell outside "oods in rural areas, demo"raphy comes into the

picture' owe$er, the cate"ories are much reduced' ere economic le$el, e=posure to

awareness of modern life and socio-economic features co file into the picture' Some of

the se"mentations are as underC

1' Occupational SegmentationC *his a"ain leads to economy wise cate"ori4ation' *his

reflects the purchase power of a fanner and therefore the purchase power of his

family' *hey areC

Artisans, farm labourers

Small farmers, tenant farmers

5edium le$el farmers

ar"e farmers and

Gery lar"e farmers i'e' 4amindars'

2' Sociological SegmentationC *here are si= cate"ories in this type of se"mentation'

*his leads to socio-economic representation of the se"ment'

andlordsC Lamindars, rich money lenders and businessmen who own bi" si4e

lands, plantations and maintain lar"e si4e farm labour' Hormally they spend time in

nearby urban area and hobnob with politicians'

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A"ricultural labourers

ross cropped area

ross irri"ated area

Area under non-food crops

/ump sets

&ertili4er consumption

*ractors

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culti$ators and

&ertili4er consumption

MAR?ETIN" MI: !OR R(RA4 MAR?ETS

In order to utili4e the immense potential in rural mar#ets companies need to de$elop

specific mar#etin" mi= and action plans, ta#in" into consideration the comple= set of factors

that influence consumer beha$iour' Inno$ati$e companies which adopted an inte"rated

approach ha$e succeeded in utili4in" mar#etin" opportunities that rural areas offer'

B&D PRO'(CT STRATE"IES9

&or the rural se"ment and rural consumers, many 5Hs and Indian companies ha$e

done mar#et sur$eys to understand the product strate"y to be adopted' *he rural mar#et

is much different than the urban mar#et and the studies ha$e helped to achie$e results

rather than ma#in" mere presence and attempts' "m and >0 "m

pac#ets J tubes' Soap powders are a$ailable for "m and >0 "m in addition to the standard ;> "m

si4es'

@$en Gic#s ointment and tablets ate a$ailable in small bo=es and small pac#ets'

*oothpowder is also a$ailable in small paper pac#ets for easy saleability'*he companies

are somehow doin" it to push the "oods as the brand ima"e is to be established' @$en

full costs may not be co$ered but if sales "row, later on price can be increased'

Basically all companies are busy to establish their brands in the rural mar#ets'

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4ow%Priced Package and Product9Bi" and small companies ha$e adopted an unwritten policy to dump second "rade

9uality to sell at lower prices in the rural mar#et' /roducts li#e "hut#a, cold drin#s,

beedis, ci"arettes, tea and coffee powders came to the rural areas in smaller pac#ets and

lower rates than those sold in cities' *he 9uality will be medium or lower le$el, loose

tea is pac#ed and sold in different brand names suitin" the rural public' *he established

brands cannot do this and hence they try to sell the 9uality product in $ery small

pac#a"es' *hey can always ma#e up mar"inal losses in rural areas by sellin" hi"h-

priced products in cities'

Roug< Toug and 4oud9

Gilla"e people belie$e that ru""ed loo#s, tou"h or robust loo#s and bri"ht colours last

lon"er' *his is the reason why EPawa. motorcycle was sold more in rural areas'

Similarly loud noise ma#in" transistors, radios, bri"ht coloured clothes, banians,

underwears or turbans sell better' ea$y furniture with attracti$e and fast colours sell

better than li"ht type with decent colours' *hey e=pect most of the products bou"ht toser$e them for a lon"er period or lifelon"'

Product 'esign9

*he inno$ation in product desi"n will be appreciated by the rural people only if it leads

to price reduction' *he chan"es made should suit their tastes and li#es' Simple to use

and handle are specific re9uirements' 5aterial substitutions need to be adopted

for price reduction' All this is worth doin" due to the mar#et potential'

(sa#le Products9

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cells are called +red battery and many products are identified by symbols and specially

symbols related to the indu diety' 5any manufacturers use symbols li#e EBala!i.,

E/ancha!anya., ESwasti#. and E:m. etc', to ma#e it easy to remember by the rural

masses' Bein" od fearin" the rural people "et easily attached to diety related symbols'

*his is the reason why small scale producers brand their products as Eanuman

*oothpowder. or ESriram A"arbatti. etc'

In brief, the product strate"y should co$er low pricin", small pac#ets, ru""ed build and

easy to remember names so that slowly the rural mar#et can be de$eloped' ater on, it

can "row with popularity of products and increase in usa"e'

B3D PRICIN" STRATE"IES9

It is natural that pricin" strate"y for rural se"ments must be in tune with the pac#a"in"

and product strate"y' onsiderin" inhibitions, low income le$els and poor cash flow in

rural sector pricin" has to be on the lower side' ence, pac#a"in" has been made to suit

low $alue purchases by rural people'

4ow Pricing 9

Smaller pac#ets of tea, toothpowder, shampoo, deter"ent powder, soap ca#es, arecanut

pac#ets, "hut#a pac#ets some standard 9uality and some low 9uality are sold at prices

with $ery low mar"ins' *his strate"y is followed by all manufacturers and traders at the

all India le$el'

A;oid Sopisticated Packing9

&or sellin" in rural areas, producers ha$e resorted to use of cheap 9uality or ordinary

pac#in"s so that to some e=tent, price reduction is possible' @atables li#e biscuits, su"ar

candies and others are pac#ed in sin"le plastic ba"s so that it is !ust enou"h to carry and

handle' 5oreo$er, rural people are not interested in sophisticated pic#in"s' *hey loo#

for price and utility'

Refill Packs - Reusa#le Packaging 9

In urban mar#et, most of health drin#s (Bourn$ita and Boost) are a$ailable in refill

pac#s' *he contents of the refill pac# need to be stored properly' *his has been

benefited the consumers in terms of price' Such measures can ha$e a si"nificant impact

in the rural mar#et, since the price can be considerably reduced to the ad$anta"e of

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rural consumers' In addition, the pac#a"in" material used should preferably lend itself

for reuse in rural areas' An ideal e=ample in this direction is the pac#in" of fertili4ers'

*oday many companies pac# fertili4ers in %/@ or %/@ sac#s which are not only

tamper proof but also reusable' *hese sac#s can be washed well and reused' 5any

farmers as# for fertili4ers pac#ed in such ba"s' *he rural consumer feels that they ha$e

"ot a free reusable sac# with e$ery purchase'

B2D'ISTRI/(TION STRATE"19

Some of the studies re$eal that the bi""er $illa"es of abo$e >000 population are fairly

co$ered by the mar#etin" people of $arious companies manufacturin" consumable

and durable products' *he smaller $illa"es are not fully touched due to $arious reasons

li#e accessibility, small mar#ets and far distances from towns and $illa"es'

Strate"ies for distribution to $arious rural se"ments are discussed as underC

Small 0illages9

In order to reach smaller $illa"es, two types of strate"ies ha$e to be adopted i'e', reach

all $illa"es abo$e 2000 population and reach all those within >0 #m radius of bi"

towns and cities' *his will help co$er about >0 of the rural population and e$en this

e=tent of co$era"e means appro=imately 3>0 million populations and this is a massi$e

co$era"e' Gery small $illa"es below >00 populations can be i"nored at this sta"e as the

output will not compensate the input' *here should be distribution $ans to co$er

$illa"es on fi=ed period (at least once a wee#) so that the shop#eepers us well as the

public are sure of supplies from the feeder centre, which will be nearby a town or

city' *he $illa"e shop #eeper of 2000 population in towns should be used as a

distribution channel for shop #eepers of $ery small $illa"es around it' *his is essential

as some of the smaller $illa"es are not ha$in" motorable roads'

Agro Input 'ealers9

A"ricultural input dealers ha$e #now how and scope to deal with rural public as they

are already in touch with them for essential inputs li#e fertili4ers, seeds and chemicals'

In their transactions they are already mana"in" credit arran"ements and hence are

in a better position to ta#e care of consumer "oods also' *his method needs to be triedseriously' Some of the farmers from a"riculturally well off states li#e /un!ab, aryana,

estern Q/ ha$e impro$ed their per capita income to the le$el of urban people and can

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afford to buy more and more consumer "oods' ith affluence, their awareness of

modern "oods and facilities also has increased' In addition to this, the areas where

cooperati$es of su"ar and dairy are stron"er, the farmers ha$e better income le$el and

cash flow is steady' It is in such places that the efforts to sell consumer "oods "i$e

results' *hese farmers will set a trend for other farm communities'

Acti;ating Co%operati;e Societies 9

*hou"h cooperati$es ha$e been started mainly for input and output of rural produce,

there is scope and possibility to use these premises and offices for mar#etin" of

consumer "oods to rural people throu"hout India, there are about three la#h

cooperati$e offices wor#in" in different names li#e Emar#etin" cooperati$es.,

Ecredit cooperati$e society., Efarmers. ser$ice cooperati$e societies and $arious local

le$el cooperati$es' *here are or"ani4ations, some acti$e and some not so acti$e' *he

premises and manpower can be better utili4ed by introducin" the consumer, durables

and consumables re9uired by the rural population' *he approach has an institution

bac#in" the mar#etin" e=ecuti$es can feel safe 10 #eep "oods and "i$e credit on

institution and hence basis than on the indi$idual basis' *he premises of cooperati$es is

also a "ood place to #eep hoardin"s and display of items #ept for sale'

(tiliing P'S Stores and Petrol Pumps9

*hese are two une=plored areas to de$elop mar#et' /ublic %istribution Systems (/%S)

are a$ailable throu"hout the country and e$en in $illa"es' Similarly petrol pumps are

a$ailable on all hi"hways, state hi"hways and lin# roads to towns and bi" $illa"es' *hese

are two places which are not fully utili4ed' In cities, the petrol pumps are $ery busy and

cannot do anythin" other than "i$in" petrol and diesel to hundreds of $ehicles comin" to

them day and ni"ht' In urban and rural areas and less busy roads the petrol pumps ha$e

ade9uate spare time to attend additional functions' Similarly /%S stores which are in

pri$ate hands ha$e ample time three wee#s in a month'

Towns as !eeder Centers9

*owns are fre9uently $isited by rural people for education, cinema, dramas, purchases,

medical treatment and $arious functions' It will be con$enient if the town mar#et is used

as a distribution channel for $arious $illa"es surroundin" towns' :ne or two traders in

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town need to be used as feeders to $illa"e stores and also to sell directly to $illa"ers

comin" to towns' *his method is already wor#in" in many places and can be further

stren"thened'

*he distribution strate"y can be chan"ed based on the chan"in" life style, communication

and con$eyance facilities' *he strate"ies discussed thus far are the possibilities for the

current situation'

B6D PROMOTION STRATE"IES9

Garious types of promotion methods wor# as inte"rati$e systems between producers

and consumers' In case of consumer "oods, this is done on lar"e scale whereas

for rural products, it is on small scale or specific tar"et wise done' *he producers and

processors thin# in terms of +ow to reach our customers and +ow our customer can

reach us'

%ue to technolo"ical inno$ations people can now communicate throu"h both traditional

and newer methods of media' Both mass communication and J or tar"et

communications can be used as per re9uirements' Gery commonly used media of

communication are newspapers ma"a4ines, radio, *G, telephone, computers, fa=,

pa"ers and mobile phones' *hese usa"e proportions differ from product to product'

&or fi$e mar#etin" related functions li#e (1) Ad$ertisin" (2) Sales promotion (3) /ublic

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media li#e *G, cinema and radio ad$ertisements' In print media, mostly hoardin"s and

wall paintin"s will help more' *hese promotional strate"ies are co$ered as underC

Cinema9

&or the last 0 years, cinema continues to be influencin" factors in style, tastes, dress

materials and total Indian culture' *he effect of cinema is much more in Southern India

than elsewhere' In the South, ; rural people $iew cinema re"ularly whereas

elsewhere it is around 2> ' *his !ustifies why *amil Hadu and Andhra /radesh had

cinema actors as hief 5inisters for a lon" time' %espite *G bein" parallel popular, the

hold of cinema on rural sector and urban middle class and labour class continues'

/roduct ad$ertisements before a mo$ie and durin" inter$als "et "ood publicity' All the

theaters do this with the help of slides and 1 or 2 minutes mo$ie type ad$ertisements to

hi"hli"ht the product performance and utility' *his method will continue to be popular

as many $illa"ers li#e to see mo$ies in theatres than on *G'

Tele;ision 9

Since the last two decades, *G $iewin" has been a re"ular pastimefor all Indian public'

*he *G serials li#e E5ahabharat., E

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istenin" to of the

rural population listens occasionally' Both local lan"ua"e stations and EGi$idha Bharati.

stations are popular and hence ad$ertisin" throu"h these channels ser$es the purpose'

Print Media 9

%ue to low literacy rate and poor readin" habits, this is not a popular promotion strate"y'

owe$er, some ad$ertisements are made throu"h the local lan"ua"e low priced dailies'

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!AST MO0IN" CONS(MER "OO'S (!)M)C)"))

INTRO'(CTION9

/roducts which ha$e a 9uic# turno$er, and relati$ely low cost are #nown as &ast 5o$in"

onsumer oods (&'5''')' &'5''' products are those that "et replaced within a year'

@=amples of &'5''' "enerally include a wide ran"e of fre9uently purchased consumer

products such as toiletries, soap, cosmetics, tooth cleanin" products, sha$in" products

and deter"ents, as well as other non-durables such as "lassware, bulbs, batteries,paper products, and plastic "oods' &'5''' may also include pharmaceuticals, consumer

electronics, pac#a"ed food products, soft drin#s, tissue paper, and chocolate bars' India.s

&'5''' sector is the fourth lar"est sector in the economy and creates employment for

more than three million people in downstream acti$ities' Its principal constituents are

ousehold are, /ersonal are and &ood D Be$era"es' *he total &'5''' mar#et

is in e=cess of

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S8OT ANA41SIS9 IN'IA RETAI4 /(SINESS

EN0IRONMENT9

*he recent +India 3 year-on year increase'

A cheap, s#illed, @n"lish-spea#in" wor#force can do the !obs of estern wor#ers

for a fraction of the wa"es paid in Horth America or @urope'

A$era"e annual %/ "rowth of ;'0 is predicted by B5I throu"h to 201;' ith

the population e=pected to increase from 1'2?bn in 2012 to 1'36bn by 201;, %/

per capita is forecast to rise ?6'6 by the end of the forecast period, reachin"

QSR3,07'

*he $alue of the retail se"ment is e=pected to "row from an estimated

IHbn) in 2013 to IH0'0'

8EA?NESSES9

*he competiti$eness of local firms is undermined by official red tape, from

forei"n in$estment restrictions to infle=ible labour laws'

Intellectual property ri"hts are poorly protected in India, one of 12 countries on

the 2007 priority watch list compiled by the QS *rade

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*he $alue of the :* dru" sector is forecast to "row by almost 72 by 201;,

when it will be worth an estimated QSR;'>6bn'

T$REATS9

*he arri$al of estern players, includin" mana"ement consultancy Accenture

and technolo"y company IB5, is raisin" local wa"es in the outsourcin" sector'

International retailers are restricted by India8s strict &%I re"ulations, althou"h

laws were rela=ed in Panuary 2012 to allow forei"n in$estors to own up to 100

of sin"le-brand retail tradin" companies in the country' owe$er, they must source

30 of the "oods they sell in India from small and medium enterprises (pre$iously

they could own no more than a >1 ma!ority sta#e in a !oint $enture with a local

partner)' 5ulti-brand retailers must still operate throu"h a franchise or cash-and-carry

wholesale model'

S8OT ANA41SIS9 IN'IA ECONOMIC9

STREN"T$S9

India has a $ery lar"e domestic mar#et, and risin" domestic demand is a ma!or

dri$er of economic "rowth'

A $ast supply of ine=pensi$e but s#illed labour has turned India into the bac#

office of the world' Around half of the population is youn"er than 2>'

8EA?NESSES9

%espite rapid economic "rowth, India remains a $ery poor country' Accordin" to

B5Iestimates, India8s %/ per capita was rou"hly QSR1,>00 in 2011, a third

that of hina8s'

A"riculture remains inefficient, and poor monsoon rains can slash rural incomes

and consumption'*wo-thirds of the population depend on farmin" for

li$elihood'

India runs chronic trade and fiscal deficits, both of which are near historic hi"hs'

*he "o$ernment spends a si"nificant part of its re$enue on interest payments, subsidies,

salaries and pensions' *his limits the amount of money a$ailable for infrastructural

impro$ements'

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OPPORT(NITIES9

India8s emer"in" middle class will continue to dri$e demand for new "oods and

ser$ices' A wealthier society, combined with ta= reforms, would ser$e to boost

re$enue receipts, relie$in" fiscal pressure'

*he "o$ernment has implemented some ta= reforms' A uniform "oods and

ser$ices ta= to be implemented in the near future should help boost compliance,

thereby raisin" "o$ernment re$enue'

ith hinese labour costs risin" a""ressi$ely, India may well en!oy a

manufacturin" boom in the comin" years as multinational loo# to ta#e ad$anta"eof a youn", competiti$e wor#force and ma!or transport networ# impro$ements'

T$REATS9

India8s dependency on oil imports is problematic' *his undermines the trade

balance and ma#es India $ulnerable to ener"y price-dri$en inflation'

India is at ris# of se$ere en$ironmental problems' 5any of its cities8 air and ri$ers

are hea$ily polluted, raisin" 9uestions about the sustainability of the economy8s rapid

"rowth

!)M)C)") IN'(STR1 ECONOM19

&'5''' industry pro$ides a wide ran"e of consumables and accordin"ly the amount of

money circulated a"ainst &'5''' products is also $ery hi"h' *he competition amon"

&'5''' manufacturers is also "rowin" and as a result of this, in$estment in &'5'''

industry is also increasin", specifically in India, where &'5''' industry is re"arded as

the fourth lar"est sector with total mar#et si4e of QSR20'1 billion' &'5''' Sector in

India is estimated to "row 0 by 2011' &'5''' industry is re"arded as the lar"est

sector in Hew Lealand which accounts for > of ross %omestic /roduct (%/)'

ommon &'5''' /roductsC

Some common &'5''' product cate"ories include food and dairy products,

"lassware, paper products, pharmaceuticals, consumer electronics, pac#a"ed food

products, plastic "oods, printin" and stationery, household products, photo"raphy, drin#s

etc' and some of the e=amples of &'5''' products are coffee, tea, dry cells,

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"reetin" cards, "ifts,

deter"ents, tobaccoand ci"arettes, watches, soaps etc'

MAR?ET POTENTIA4IT1 O! !)M)C)") IN'(STR19

Some of the merits of &'5''' industry, which made this industry as a potential one,

are low operational cost, stron" distribution networ#s, presence of renowned &'5'''

companies' /opulation "rowth is another factor which is responsible behind the success

of this industry'

'

O/JECTI0ES O! T$E ST('1 ARE 9

& % To eGamine te current rural marketing scenario

3 % To identif. te factor affecting te adoption of ;arious marketing strategies

2 To stud. te impact of marketing strategies

O#@ecti;es9

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*oday, the mar#eters ha$e reali4ed the bur"eonin" purchasin" power, $ast si4e demand base of

the once ne"lected Indian hinterland' It would be totally na$e to thin# that any firm can easily

enter the mar#et and wal# away with a si4eable share of it' :n the contrary, any corporation

that see#s a si4eable share of mar#et has to wor# hard for it, and the mar#et bristles with a

$ariety of challen"es' @fforts are on to accentuate the attitude of the rural customer and to wal#

their wal# and tal# their tal#' *he study aims at brin"in" a holistic understandin" of the rural

mar#ets' *he ob!ecti$es of this study include e=aminin" the current mar#et scenario of Indian

rural mar#et, and pro$idin" in-depth-analysis of the challen"es faced by the mar#eters while

operatin" in the rural en$ironment, and identify rural mar#etin" opportunities' *he study also

concentrates on the problems faced by rural mar#ets and finally offerin" su""estions to

o$ercome the problems and tappin" the potentiality of the rural mar#ets at ma=imum le$el' *he

present study mainly attempts to e=amine the followin" issues *o understand why we need

rural mar#etin"'

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A/*@

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RESEARC$ MET$O'O4O"1

'efinition

*he research methodolo"y e=plains the methods followed in carryin" out the research,

methods of collectin" information, population, research instruments used as well as the

limitations of the present study' It is the way of systematically sol$e the research

problem' *he main process of research methodolo"y is "i$en below -C

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SAMP4IN" MET$O'O4O"19

Sample SieT100 respondents

Sample (nit- /eople ran"in" from a"e 1?->> a"e ha$e been ta#en as sample unit'

Sampling Area F Hearby rural areas of udhiana li#e Ahmed"arh (mandi) and

$illa"e Ayali

Sampling TecniKueF /urposi$e

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4IMITATIONS

A small sample si4e of 100 people is ta#en, so we cannot draw inferences about the

population from this sample si4e'

*ime period is short and resource constraints'

*he scope of the pro!ect is limited to the city of Q%IAHA' So, we cannot say that

the same response will e=ist throu"hout India'

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C$APTER%2

'ATA ANA41SIS AN'

INTERPRETATION

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H&D wat is .our "ender

+able: 1

/articulars Humber

5ale ?2

&emale 1?

*otal 100

,2

1,

Number

-ale

.emale

Interpretation

*he abo$e table and fi"ure shows that out of the 100

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H3D 8at is .our age group

+able: 2

/articulars Humber

ess than 2> years 1?

2> to 3> years 22

3> to 6> years 30

6> to >> 10

>> abo$e 20

*otal 100

0

/10

1/

20

2/

30

3/

1,

22

30

10

20

Number

Numbe$

Interpretation

*he abo$e table and fi"ure shows that out of the 100 to 3> years, 30 belon"s to 3> to 6> years,10 belon"s to 6> to >> years

and 20 belon"s to abo$e >> years'

*o conclude, the ma=imum respondents belon"in" to 3>-6> years cate"ory(30) mostly

purchasin" the &'5'' products and most of people ha$in" salary ran"in" from ,000

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H2D 8at is .our Hualification

+able: 3

/articulars Humber

Ho schoolin" 0

10th 62

12th 26

raduation 36

*otal 100

No shooli%& 10th 12th &$aduatio%

0

/

10

1/

20

2/

30

3/

40

4/

0

42

24

34

Number

Numbe$

Interpretation

*he abo$e table and fi"ure shows that out of the 100

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+able: 4

Particulars Num#er

Self F @mployment In A"riculture 0

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+able: /

0 to /000 /000)10000 10000)20000 -o$e tha% 20000

0

/

10

1/

20

2/

30

3/

40

4/

/0

10

44

2,

1,

Number

Numbe$

/articulars Humber

0 to >,000 10

>000-10,000 66

10,000-20,000 2?

5ore than 20000 1?

*otal 100

/articulars Humber

Point 1?

Huclear ?2

*otal 100

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Interpretation

*he abo$e table and fi"ure shows that out of the 100 respondents, 10 respondents belon" 0 to

>,000,000-10,000

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Interpretation

*he abo$e table and fi"ure show that out of the 100 -; 3?

?-11 12

12 or more 02

*otal 100

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1 ) 4 / ) , ) 11 12 o$ mo$e

0

10

20

30

40

/0

60

4,

3,

12

2

Number

Numbe$

Interpretation

*he abo$e table and fi"ure shows that out of the 100 respondents, 6? respondents belon"s to

1 - 6 members , 3?were from > F ; members, 12 were from the ? - 11 members and 2 were

from 5ore than 12'

*o conclude, the ma=imum respondents belon"s to the family ha$in" 1- 6 members'

HFD 8ic of te !ollowing Is te Main Source of "eneral Information and ?nowledge

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o$d O5 -outh Nes7a7e$ +ele#isio% I%te$%et

0

10

20

30

40

/0

60

0

,0

140 4 0

6

0 6

Number

Numbe$

Interpretation

*he abo$e table and fi"ure shows that out of the 100 respondents, ; respondents belon"s to

word of mouth cate"ory , 0 respondent belon"s to wall paintin"Jposter cate"ory , 0 belon"s

to radio cate"ory , ; respondents belon" to tele$ision cate"ory , 0 respondents belon"s to

computer cate"ory and respondents belon"s to internet cate"ory'

*o conclude, the ma=imum respondents "et the "eneral information from the tele$ision'

HD A;aila#ilit. Of Te !ollowing In (r !amil. BTick More Tan OneD

+able: 9

/articulars Humber

ord :f 5outh16

/osterJ all /aintin"00

Hewspaper06

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S no Particulars Num#er Bout of &**D Rank 1 5obile onnecti$ity 100 1

? Air onditioner 32 ;7 *wo heeler

?23

10 &our heeler

30

?

11 and :wnership;

6

024

6,

10

Rank

8a%

Interpretation

*he abo$e table and fi"ure shows that out of the 100 respondent,

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90

, 2

Number

Nea$est Sho7

aat

Nea$est ity

Peddle$s

Interpretation

*he abo$e table and fi"ure shows that out of the 100 respondents, 70 respondents buy the

product from nearest shop, ? respondents buy the product from the haat, 2 respondents buy

the product from the nearest city and 0 respondents buy the product from the peddlers'

*o conclude, the ma=imum respondents buy the product from the nearest shop'

H&&D $ow Important Are Te !ollowing !actors 8ile /u.ing A Particular Product B Rank

Tem D

Particulars Rank I Rank II Rank III Rank I0 Rank 0 Total

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/rice20 >? 1? 06 00 100

Muality;? 1? 02 02 00 100

Muantity02 12 36 22 30 100

A$ailability00 10 20 20 >0 100

ood oo#s00 02 2 >2 20 100

+able: 11

P$ie ;uality ;ua%tity A#aliability "ood 'oo9s

0

10

20

30

40

/0

60

0

,0

20

,

2

0 0

/,

1,

1210

2

1,

2

34

20

26

42

2220

/2

0 0

30

/0

20

8a%9 I

8a%9 II

8a%9 III

8a%9 I