DETERGENT MARKET IN RURAL INDIAThe demand for detergents has been growing at an annual growth rate of 10 to 11 per cent during the past five years. Where an urban consumer prefers washing powder and detergents, a rural consumer is more inclined towards washing cakes and bars. But, over the last few years, we have seen that rural consumers are gradually shifting their preferences from detergent bar to detergent powders.The market leader in the popular (low priced) detergent category, Nirma, created a revolution in the market by pioneering the concept of low-cost detergents. The Indian rural market is extremely price sensitive. Keeping this factor in mind, a number of companies followed the strategy of launching a wide range of package sizes and prices to suit the purchasing preferences of India’s varied consumer segments.Targeting on the price factor, P&G introduced Tide Naturals at a lower price unit which further helped the company to gain a bigger share of the detergent pie in the year 2010. Another strong Rural India is rapidly becoming target market for most of the brands in the country. The contribution of rural markets in the FMCG sector is growing faster than urban markets. Powered with an incremental increase with better employment opportunities, rural consumers are upgrading their lifestyle with shifting preferences from non-branded and local product to the branded ones.At present, the size of the Indian FMCG market is estimated to be Rs 125,000 crore and is growing at the rate of 12 per cent yearly. According to an industry reports, the sector is expected to grow by up to 17 per cent annually to touch Rs 400,000 crore by 2020.

Consumption of detergent in rural IndiaThe per-capita consumption rate of detergents in India is 2.7 kg per annum and this market is expected to grow at the rate of 7 to 9 per cent per annum in terms of volume. The penetration level of detergent bars and powder in India is higher as compared to the urban market. According to the research conducted by Equitymasters.com, HUL, Nirma and P&G are the major players in the market with 40 per cent, 30 per cent and 12 per cent shares respectively. Further, the detergent market in India can be classified into premium, economic and popular segments. While HUL dominates the premium segment, Nirma is the leader in the popular segment.

Low cost to rule rural Indiaregional player in the category, Jyothy Laboratories, launched another detergent, Ujala Techno Bright, under its Ujala brand in the market. The new product was priced 15-30 per cent lower than other brands in the categories. The product is an addition to Jyothy’s portfolio in the laundry detergents space, which earlier comprised only the hand wash detergent, Ujala Washing Powder.These price-warriors, small in turnover figures but large in numbers, are said to be gnawing at the market shares of leading national detergent brands, forcing companies to rethink pricing strategies. Most brands are luring consumers with propositions like superior wash at affordable prices.Generally detergents in pack sizes of 500 gm to 20 gm are highly available in the stores with price ranging from Rs 50 to as low as Rs 2 and Re 1. Dalip Jolly, Director, Fena India Pvt Ltd, says, “We have seen an increase in the purchasing capacity of village people. For example, the demand for 100 gm pack is growing as compared to the 

previous 20 gm pack. With the help of national rural employment initiatives, village consumers are able to upgrade their lifestyle and shopping behaviour.” More than 70 per cent of these low price detergent packs are sold through kirana, or mom-and-pop stores constituting almost 95 percent of the total retail market. Though organised retail is showing double digit growth, it has very little influence in rural India.

Unexplored product categoriesThough detergents have been  in India for a long time, many product categories within these categories were still unexplored until 2010. Product categories, such as washing machine detergents, had slow growth in India because of the low penetration of washing machine in India. The reason could be ignorance towards the functional difference between hand wash and automatic detergents, which further limits the product use over the historic period. Another emerging category, Fabric Softeners and Conditioners, is estimated to reach $13.3 billion globally by 2015, says market research firm, Global Industry Analysts Inc. (GIA). As per the report, current demand for fabric softeners in developing markets, such as India, is growing at a higher rate owing to the economic growth as compared to developed markets, which are relatively mature. But both these categories have shown low penetration in rural areas. Thus, in spite of hand wash detergents enjoying appreciable penetration in both rural and urban areas, there have not been much trading up within the category.

Future penetration in rural areaAccording to the research firm, Euromonitor, “A laundry detergent as a whole is expected to reach a degree of saturation in terms of volume growth rates in the forecast period. Thus, the shift from bar to hand wash detergents and from hand wash to automatic detergents is pivotal to the category.” The future value growth of the category may also be adversely affected by the consistently high inflation rates since 2010. During the end of 2010, two leading players, HUL and P&G, hiked their detergent prices up to 8 to 12 per cent. Rising product prices may discourage consumers from switching to relatively premium products, or investing in the value-added category of laundry aids. The national firms also get tough competition from regional and small unorganised players who account for a major share of the total volume of the detergent market in rural India due to low pricing. “Increasing rural distribution network, value for money positioning and smaller packs are the three success keys for companies to strength their position in rural India,” says Jolly. Today, brands are investing heavily on innovation, R&D and distribution so that their offering becomes more localised, accessible and affordable to consumers.            

Rural Marketing is defined as any marketing activity in which the one dominant participant is from a rural area. This implies that rural marketing consists of marketing of inputs (products or services) to the rural as well as marketing of outputs from the rural markets to other geographical areas.

Rural areas of the country or countryside are areas that are not urbanized, though when large areas are described country towns and smaller cities will be included. They have a low population density, and typically much of the land is devoted to agriculture. Defra have a working definition, The Rural/Urban Definition, that was

introduced in 2004 as a joint project between a number of Government Departments and was delivered by the Rural Evidence Research Centre at Birkbeck College (RERC).

Marketing strategies that worked for urban markets do not necessarily work for the rural ones. There are 7 differentiators identified in Why the rural market is different, JWT, 2009

1. Intra community influences are relatively more important than inter-community ones. Word-of-mouth in close knit communities is more powerful.

2. Scarcity of media bandwidth. Rural individual's access to media channels is limited and in the case of broadband the comparable upload and download speed may be slower. Online shopping is seen as a solution by many but will be dependent on broadband speed

3. Slow to adopt brands. Slow to give them up. Rural consumers will be slower to pick up trends or brands but will remain loyal when accepted.

4. Expenses are year long; income is seasonal. Many rural areas rely on seasonal tourism peaks when income will be high and to a lesser extent agricultural incomes from seasonal crops. This means there will be more disposable income at certain times with rural businesses and employees.

5. Information hungry; but entertainment starved. Isolation from entertainment centres has led to companies trying edutainment to get their message across.

6. Higher receptivity to experience advertising. Retail outlets in rural areas have many demonstration areas along with markets for tasting.

7. Commercially profitable; and socially acceptable. Brands with demonstrable local, rural, environmental and/or social credibility stand a better chance.

Rural Marketing meant different in 3 different periods. Part1(before 1960):It was a completely an unorganized market,where “baniyas and mahajans” dominated the market.Rural marketing was another word for agricultural marketing because agricultural produces like food grains and industrial like food grains and industrial like cotton,oil seeds,sugarcane etc occupied primary attention and the supply chain activities of firm supplying agricultural inputs and of artisans in the rural areas received secondary attention. Part 2(1960 to 1990):The greatest thing which happened in this period was green revolution which led to farming involving scientific and technological methods and many poor villages became prosperous business centers .With better irrigation facilities, soil testing, use of high yield variety seeds ,fertilizers, pesticides and deployment of machines like power tillers, harvesters ,threshers etc,the output increased especially wheat and paddies. Due to this marketing of agricultural inputs was also now there a new potential market. Now marketing of rural marketing meant “marketing of agricultural inputs” and “agricultural marketing”. Agencies like Khadi and Village Industries Commission, Girijan Cooperatie Societies APCO Fabrics, IFFCO,KRIBHCO Company bloomed and government paid special attention to promote these products. Sale of handicrafts, handloom textiles, soaps ,safety matches and crackers increased on large scale in urban areas. Part 3(after mid 1990):Since 1990 ,India’s industrial sector had gained strength and maturity. It’s contribution to GNP

increased substantially.There was metamorphosis of agricultural society to industrial society.With support and development programmes of central and state governments,service organizations and socially responsible business groups like Mafatlal,Tatas,Birla,Goenkas and others the rural areas progressed socially and economically.

The economic reforms further increased competition in the market,the rural market grew steadily for household consumables and durables. A few other companies known for their marketing orientation –Hindustan Lever,Philip India,Asian Paints,Singer and Larsen and Turbo have also taken great efforts in this direction.

Hindustan Unilever(HUL) started successful rural marketing projects like “Project Shakti” and “Operation Bharat” in India.Hindustan Unilever began the first home to home operation in rural areas in personal products in 1998 which was known as “Operation Bharat”.By 1999 “Bharat Operation” covered 13 million rural household.During the course of operation, there were HUL vans which visited villages across the country distributing sample packs comprising a low unit price pack each of shampoo,talcum powder ,toothpaste and skincream priced at 15rs.This was to create awareness of the company’s product categories and of the affordability of the product. Coca Cola also explored the market by introducing bottles at rs.5,backed with Aamir Khan advertisement .Amul is another case in point of aggressive rural marketing .In 2000,ITC tried developing direct contact with farmers in remote villages in Madhya Pradesh.ITC E-choupal was a result of this initiative.

Rural Marketing is growing at a far greater speed than its urban counterpart .Multinationals have realized the potential and are ready to tap rural markets .To name a few Colgate, Everyday batteries ,LG Electronics ,Phillips ,BSNL, Life Insurance Corporation, Britannia and Hero Honda are trying to seep in rural markets.

Problems in Rural Marketing Communication: The literacy rate among rural consumers is very low there print media has very little scope in the rural areas .In India there are 18 languages which are recognized,these languages and many dialects are spoken in rural India. English and Hindi are not understood by many people. Due to this rural consumers do not get exposure to new products. Transportation: The transportation infrastructure is extremely poor in rural India.In India there are six lakh villages.Almost 50 per cent of them are not connected by road also.India has second largest railway system in the world,many parts in India are not connected through railways. Availability of appropriate media:The radio network in theory covers 90 per cent,but people who actually listen is less.T.V is not available in every house in rural areas.Therefore opportunities are very low in rural areas. Warehousing: There are many agricultural products which are produced in a particular seoson but is demanded throughout. Due to lack of adequate and scientific storage facilities in rural areas, stocks are being maintained in towns only.