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CURRENT STATUS OF THE RURAL MARKET

The real India lives in the village. Rural marketing is the new buzzword as the new marketing mantra for the survival and the growth of and the success forcing companies to go rural. This statement speaks about the importance of rural marketing for the survival and the growth of any marketers and is supported by the facts given below. The total FMCG market is in excess of US$16.4 billion and is set to treble from US$11.6 billion in 2003 to US$33.4 billion in 2015. It is currently growing at 14%. With 12.2% of the worlds population living in the villages of India, the Indian rural FMCG market is something no one can overlook. With village folks in India up for a grab on branded FMCG ranging from hair care to oral care products, the rural market seems to give their urban counterparts a run for their money. FMCG sector in India is the fourth largest sector in the national economy with a size of USD 13 billion of which 67 per cent i.e. 8.71 billion has been in rural areas with 627,000 villages are spread over 3.2 million sq km, finding them is not easy, but business in rural India is showing average annual growth of about 11per cent per annum over the last decade. FMCG Sector is growing and estimated to be USD 33 billion industry by 2015, which means 22.1 billion in rural areas. The 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. It has come to light that over 500 new brands of laundry bars and over 200 washing powders have mushroomed in the last one year in local and regional markets. 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. If market share numbers of the two leading detergent makers Hindustan Unilever (HUL) and Procter & Gamble (P&G) are anything to go by, the local and regional factor seems to have already made a dent. In July 2009, HUL's detergent market share has declined to 37% from 39% in July '08, while P&G's market share declined from 15.6% in July 2008 to 14.5% in July 2009. The 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.

PRICING AND PROMOTIONAL STRATEGIES ADOPTED BY COMPANIES


Nirma: Nirma entered the detergent market of India at a time when Hindustan Lever Limited (HLL), an FMCG giant, with its Surf, had established a near monopoly in the business. Nirma succeeded through its price-led strategy. HLL marketed Surf, taking to the differentiation route; the differentiation theme was Surf washes whitest. Nirma had built cost leadership right from the beginning. It was this cost leadership built early on that enabled Nirma to follow the price-based marketing strategy. Taking advantage of the concessions as an SSI unit and choosing the price conscious segment as its market, Nirma Chemicals offered a low price brand and promoted it aggressively. Surf was sold at a price of over Rs. 32 per kg. Nirma priced its detergent at Rs. 10.50 per kg. It relied on low cost technology, process and raw materials. Nirma kept growing in both volume and market share. HLL had to defend Surf with all its might; the company stepped up its promotion of Surf, relying heavily on the differentiation theme. But this was not enough to check the growth of Nirma had chosen. HLL had been operating as a matter of policy, a differentiation-led strategy, highlighting the distinctive merits of Surf as a detergent and marketing it as premium product. HLL was successful for two decades, and it had to change its strategies. It has decided to enter the low priced segment, Wheel which is positioned against Nirma. Wheel was priced at Rs. 11 per kg. In just about 10 years, Nirma became a Rs. 1,000 crore business. The conclusion is that Nirmas price-led strategy was so successful that even the market leader, who was all along following the differentiation-led route, was forced to review its strategy. Nirma's advertising has always focused on the value-for-money angle. Brand Nirma has never believed in showing a clichd animated product demo/ or comparison of stain/ dirt, which is used by 80 per cent of the players in the category. Its simple and catchy jingle - Dudh si safedi Nirma se aye, rangin kapda bhi khil khil jaye - has continued to echo in the drawing rooms of middle-class Indian homes through the decades. While the jingle stresses on the product, it also salutes the savvy and budget-conscious Indian housewife. The jingle, which was first aired on radio in 1975, was broadcast on television in 1982. It is one of the longest running jingles and the spot has seen very few changes since the time it was first aired. For the re-launch of Nirma, the company has developed new spots but they are variations of the old favourite. Once the re-launch is complete, the company plans to go back to the original advertisement. Nirma's promotion strategy, too, has many firsts to its credit. The company pioneered product sponsorship through the electronic media. Besides, the company has developed a unique advertising strategy - new products are launched with no advertising support. Once the distribution glitches are sorted out and the product reaches the shelves of retailers, the company begins to advertise it. The umbrella branding strategy helps to give new products instant recall without increasing the advertising expense.

Ghari: The low price of Nirma brought an evolution among laundry soap users who gradually switched from soap to detergent power. Slowly detergent powders substituted laundry soaps within overall fabric wash category. Ghari followed Nirmas strategy of keeping low price and targeting customers at the bottom of the market. "We have been inspired by Nirma's low-cost model," said Muralidhar, the 66-year-old co-founder of Rohit Surfactants Pvt. Ltd. If there's one glaring difference between Nirma and Ghari, it is that the latter has not fought a battle on the price front. In fact, Ghari took the bold step of pricing at a 10% premium over HUL's Wheel and Nirma - Rs 35 a kg as against Rs 30. "It's a brilliant gap that Ghari has found. It is priced above mass brands like Wheel and Nirma but much below mass premium brands such as Tide and Surf," says Jagdeep Kapoor, chairman, Samsika Marketing. The transformation from a regional to a mainstream brand is complete when you consider that Ghari's dealer margins are on a par with most national competitors, at 5-6%. Regional brands are known to dole out higher margins to woo dealers for an extra push. RSPL spends 2% of sales for marketing and promotional activities. All advertisements are centered on the tagline Pahle istemal karein fir vishwaas karein (Use it and then believe it) which encourages trial and prompts repeat purchase. Ghari is for the common man and usually it targets household wives. To live in that spirit Ghari brand has avoided using any celebrity to endorse it unlike wheel (endorsed by Salman Khan), Rin (Kajol), and Ariel oxybin (Kiran Bedi). Ghari detergent has gone to advertise in train too. The first train campaign was launched in 2008 and was called the Ghari Detergent Express. That train campaign ran between Lucknow and Guwahati for two months. Then it advertised in Pushpak Express and Swarna Jayanti Express. Apart from advertisements in train, RSPL promotes Ghari through roadside shows, magic shows and exhibitions in smaller towns and cities. On the advertising and promotions (A&P) front, RSPL has attempted to prove that you can be innovative without splurging - and without hiring anyone from the IIMs, either. The company participates in exhibitions, melas and road shows mostly in rural India. That Ghari spends under 2% of sales on A&P - as against 12-14% spent by its MNC peers - helps it sustain its low-margin, high-volume strategy. Two years ago, RSPL flagged off the 'Ghari Detergent Express', a train whose exteriors are painted with Ghari branding that ran between Lucknow and Guwahati for two months. Other such trains connecting northern regions with both west and south of India, in line with the companys geographical ambitions, followed this. "We have roped in Madhuri Dixit and Vidya Balan for our other brands but for Ghari we don't need any celebrity. Let consumers use it and then trust the brand is something that we believe not just in our advertising but in reality too," says Sushil Kumar Bajpai, president (corporate affairs) & company secretary, RSPL.

Wheel: In 1988, HUL launched Wheel to take on Nirma. In early 2000's Wheel beats Nirma and takes the No.1 spot. Currently, Wheel is at number 2 with a share of 16.9%. HUL is still the overall market giant with Wheel, Rin and Surf (one product for each segment) doing well. Wheel is a detergent brand that caters to the laundry needs of the mass market. The brand is intended in the popular range segment, which consists of powders sold in for Rs.18-22 per kg. The popular segment was founded as a result of the launch and subsequent success of Nirma. Wheel is positioned as a tough fighter of dirt and offers value for money. The Lalitaji advertisement was created to identify the brand with common class. Wheel is targeted at the mass market and at people moving up the economy ladder from the lower-middle to middle-class segment

Rin Detergent: 1969 Rin Bar was launched in India with the iconic lightening mnemonic. 1994 Rin Detergent Powder was launched. This was the first product extension from the iconic brand that stood for whiteness in laundry. 2007 The brand made an addiction in its portfolio with the introduction of Bleach another whiteness solution for the Indian household. It even added the Rin Matic, a specialist washing machine powder, based on the insight that ordinary powders do not deliver performance in a machine wash thus leading to an unsatisfied consumer need. Rin promised to position itself as a Surf with Whitening ability, but, it could not find a tagline that was powerful enough to convey the brand promise. In the year 2008, the brand adopted the punch line Duguni Safedi, Duguni Chamak. The ad was catchy, but it could not establish a connection. So, Rin came up with the famous tagline-Chamakte Rehna. It gives the brand new opportunities to communicate with the consumers and has immense potential and possibilities for new campaigns. The tagline itself is making Rin a strong brand and helped it make an aggressive approach. Recently, Rin released a new campaign- Rin Challenge which was endorsed by Kajol. In the advertisement, Kajol challenges a group of women to join TEAM RIN, highlighting the brands core competency Whiteness.

Hindustans Unilevers Rin and Proctor Gambles Tide are at loggerhead over a latest advertisement by HUL where it puts an offer to the consumers to choose 1kg of Rin pack with an Extra 100gm powder priced at Rs.67 over a 950gm pack of Tide priced at Rs.80. HUL justifies it by saying that the advertisement is a factual representation of the price of the two brands and helps consumers make an informed choice. It was although not the first time that HUL had directly compared Rin with Tide. In 2010, it used the tagline, Rin offers better whiteness than Tide as a promotional tool to be used by the brand.

Ujala Washing Powder: 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 Jyothys portfolio in the laundry detergents space, which earlier comprised only the hand wash detergent, Ujala Washing Powder.

CONCLUSION
Consumption of detergent in rural India The 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. Future penetration in rural area According 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.

REFERENCES
http://www.ruralmarketing.org/conquering-rural-india/ http://www.indianretailer.com/magazine/2011/july/Small-is-big_47-2-3/ http://articles.timesofindia.indiatimes.com/2009-09-15/indiabusiness/28071090_1_market-share-detergent-nirma http://www.icmrindia.org/casestudies/catalogue/Marketing1/Detergent%20Wars% 20in%20India-Marketing.htm http://www.saching.com/Articles/Story-of-Nirma-III-2837.html http://ad-mad-club.blogspot.in/2009/08/advertising-strategies-nirma.html http://www.exchange4media.com/brandspeak/brandspeak_FS.asp?section_id=42& news_id=35840&tag=31646 http://marketing-and-brands.blogspot.in/2009/01/nirma.html http://articles.economictimes.indiatimes.com/2011-05-06/news/29517095_1_gharidetergent-brand-nirma/2 http://ankitmarketing.blogspot.in/2012/01/detergent-wars-nirma-wheel-andghari.html http://www.digitalimpulse.in/insights/rin-detergent-marketing-strategy-inindia/#.USo9duspZQI http://www.docstoc.com/docs/37615539/Detergent-Powder-Market-in-India http://suranjanmktg.blogspot.in/2011/10/check-out-retailer-magazine-july2011.html http://www.authorstream.com/Presentation/subhajitsanyal-1237240-unit5-ruralmarketing/

ELUCIDATE THE PRICING AND PROMOTIONAL STRATEGIES ADOPTED BY COMPANIES TO POSITION THEIR DETERGENT PRODUCTS IN RURAL MARKET

NAME: SIDHESH GANERIWALA ROOM NO.14, ROLL N O.273 SEMESTER VI SUBJECT: RURAL MARKETING AND SERVICES MARKETING