SYMBIOSIS CENTER FOR MANAGEMENT STUDIES, NOIDA

Research Project on RURAL MARKETING AND DECISION

INFLUENTIAL FACTORS SUBMITTED TO SYMBIOSIS
INTERNATIONAL UNIVERSITY, PUNE towards Partial Fulfillment of
Requirements of Bachelors of Business Administration

Project Guide:
Dr. V.K.Pandey
(Professor, SCMS)

Submitted By:
Deepak Singh
Arush Singh
Harsh Srivastava
(BBA 5th SEM)

Symbiosis Center for Management Studies, Noida

(Constituent of Symbiosis International University)
Sector 62; Block A, Plot No. 47 & 48, Noida 201301
Tel. +91-120-2405067 | +91-120-2405065, Fax No. +91-120-2405066

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SYMBIOSIS CENTRE FOR MANAGEMENT STUDIES, NOIDA

CERTIFICATE
This is to certify that the project entitled RURAL MARKETING AND DECISION
INFLUENTIAL FACTORS is the bonafide work carried out by Arush Singh Rathour,
Deepak Singh, Harsh Srivastava student of BBA(5th Semester),Symbiosis Centre For
Management Studies, Noida during the year 2012-13, in partial fulfillment of the requirements
for the award of the Degree of Bachelor Of Business Administration

Director:
Prof. Shrirang Altekar

Faculty:
Dr. V.K.Pandey

Date: 22/10/2012
Place: Noida

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ACKNOWLEDGEMENT
Apart from my efforts, the success of any project depends largely on the encouragement and
guidance of many others. I take this opportunity to express my gratitude to the people who
have been instrumental in the successful completion of this project. I would like to show my
greatest appreciation to Dr. V.K.Pandey. I cant say thank you enough for his tremendous
support and help. I feel motivated and encouraged every time I attend his lectures. Without
his encouragement and guidance this project would not have materialized. I would like to
express my gratitude towards my family & friends for their kind co-operation and
encouragement which helped me in completion of this project. I would also like to thank my
classmates for their constant support and people who have willingly helped me out with their
abilities.
Date: 22/10/2012
Arush Singh
Deepak Singh
Harsh Srivastava
(5th Semester)

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DECLARATION
I hereby declare that the project work entitled RURAL MARKETING AND
DECISION INFLUENTIAL FACTORS submitted to the Symbiosis International
University, is a record of an original work done by me under the guidance of Dr. V.K.Pandey
& Dr. Chitra Kasana, Faculty Member, of Symbiosis Center for Management Studies, Noida.

Arush Singh
Deepak Singh
Harsh Srivastava
BBA (5th SEM)

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Index
Chapter

Topic

Page no:

Chapter 1

Introduction
1.1 Conceptual Framework
1.2 Rationale of the Study
1.3 Objectives of the Study

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7
11
12

Chapter 2

Research Methodology
2.1) The Study
2.2) Sample Design
2.2.1) Population
2.2.2) Sample size
2.2.3) Sample Element
2.2.4) Sample Technique
2.3)Tools for Data Collection
2.4)Tools for data analysis

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12
12
12
12
12
12
13
13

Chapter 3

Result and Discussion

3.1)Consistency Measure
3.2)Reliability Measure
3.3)Factor Analysis

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13
13
13

Chapter 4

Limitation of the study & Implication

4.1) Managerial Implication
4.2) Limitations of the study

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Summary and Conclusion

References
Annexure

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17
17

Chapter 5

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INTRODUCTION
Marketing may aptly be described as the process of defining, anticipating and
knowing customer needs, and organizing all the resources of the company to
satisfy them. In fact, satisfaction of customers needs and wants provides the
rationale for the firms existence. Knowledge of consumer behavior, therefore,
is vital for a firm to achieve its marketing goals. The consumers behavior
comprises the acts, processes and social relationships exhibited by individuals,
groups and organizations in searching, obtainment, use of, and consequent
experience with products and services. An understanding and knowledge of the
motives underlying consumer behavior helps a firm in seeking better and more
effective ways to satisfy its customers. It helps to select appropriate sales and
advertising strategies, and to plan marketing programmer in a more efficient
manner. The rural market of India started showing its potential in the 1960s. The
70s and 80s witnessed its steady development. And, there are clear indications
that the 21st century is going to see its full blossoming. In our country, where
research on consumer behavior has been nominal, not much systematized
information is available about the rural consumers. Only a few enlightened
companies, known for their marketing orientation, viz., Hindustan Lever,
Philips India, Asian Paints, Singer and Larsen and Toubro have made concrete
efforts in this direction. But, by and large, we have still to understand the rural
buyer, Many assumptions prevail about rural marketing. For instance, one
assumption is that the rural buyer is not very discriminating. Once he is
persuaded to buy a particular product, he develops a strong affinity for it, and if
satisfied, becomes brand loyal. As a result, Indian manufacturers are generally
known to prefer selling fewer items at higher prices than selling more items at
lower prices. A contrary view is that the rural buyer, being suspicious of the
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marketers hard sell techniques, is quite discriminating, and is not easily

persuaded. Yet another assumption is that the rural buyer is not particularly keen
about quality and packaging. Some other assumptions can be quoted. But, all
these need deep probing for arriving at valid and reliable conclusions.
Consumer research, thus, is indispensable for entering the rural segment Of the
market.
Conceptual framework
MEANING AND DEFINITION OF RURAL MARKETING
The term rural marketing used to be an umbrella term for the People who dealt
with rural people in one way or other. This term got a separate meaning and
importance after the economic revaluation in Indian after 1990. So, before
venturing into the other aspects of rural
marketing let us discuss the development of this area in different parts which is
briefly explained here.
Part I (Before 1960): Rural marketing referred to selling of rural Products in
rural and urban areas and agricultural inputs in rural Markets. It was treated as
synonymous to agricultural marketing.
Agricultural produces like food grains and industrial inputs like cotton, oil
seeds, sugarcane etc. occupied the central place of discussion during this period.
The supply-chain activities of firms supplying agricultural inputs and of artisans
in rural areas received secondary attention. The local marketing of products like
bamboo baskets, ropes, window and door frames, small agricultural tools like
ploughs by sellers like black smiths, carpenters, cobblers, and pot makers were
emphasized in general. This was totally an unorganized market where all banias
and mahajans (local business people) dominated this market.

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Part II (1960 to 1990): In this era, green revolution resulted from scientific
farming and transferred many of the poor villages into prosperous business
centers. As a result, the demand for agricultural inputs went up especially in
terms of wheats and paddies. Better irrigation facilities, soil testing, use of high
yield variety seeds, fertilizers, pesticides and deployment of machinery like
powder tillers, harvesters, threshers etc. changed the rural scenario. In this
context, marketing of agricultural inputs took the importance. Two separate
areas of activities had emerged- during this period marketing of agricultural
inputs and
the conventional Agricultural Marketing. During this period, the marketing of
rural products received considerable attention in the general marketing frame
work. The formation of agencies like Khadi and Village Industries Commission,
Girijan Cooperative Societies APCOFabrics, IFFCO, KRIBHCO, etc., and also
the special attention government had paid to promote these products were
responsible for this upsurge. Village industries flourished and products like
handicrafts, handloom textiles, soaps, safety matches, crackers etc. hit the urban
market on a large scale from rural areas.
Part III (After Mid 1990s): The products which were not givenattention so far
during the two earlier phases were that of marketing of household consumables
and durables to the rural markets due to obvious reasons. The economic
conditions of the country were as such that the rural people were not in a
position to buy these kinds of products. Secondly, our market was in a close
shape and we newer allowed companies (foreign) to operate in Indian market.
But we lifted the and opened up economy, consequently companies started
flourishing in India. The small villages/hamlets were widely scattered making
reach difficult and expensive consequently. Rural markets were seen an adjunct
to urban market and conveniently ignored. However, since 1990s, Indias
industrial sector had gained in strength and maturity. Its contribution to GNP
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increased substantially. A new service sector had emerged signifying the

metamorphosis of agricultural society into industrial society. Meanwhile, due to
the development programmes of the central and state governments, service
organizations and socially responsible business groups like Mafatlal, Tatas,
Birlas, Goenkas and others, the rural area witnessed an all round socioeconomic progress.
The economic reforms further accelerated the process by introducing
competition in the markets. Steadily, the rural market has grown for household
consumables and durables.
Rural marketing represented the emergent distinct activity of attracting and
serving rural markets to fulfil the needs and wants of persons, households and
occupations of rural people. As a result of the above analysis, we are in a
position to define rural marketing Rural
marketing can be seen as a function which manages all those activities involved
in assessing, stimulating and converting the purchasing power into an effective
demand for specific products and services, and moving them to the people in
rural area to create satisfaction and a standard of living for them and thereby
achieves the goals of the organization.
The Rural Customer: A Profile
A striking feature of India, and not just rural India, is the diverse and varied
profiles of customers. Each of these diverse sections of rural India is embedded
in its customs and traditions, which in turn have a deep impact on the psyche of
the people. Every aspect of their lives from birth, to education, to marriage, to
livelihood is influenced by the deeply imbedded traditions. Rural marketers
have been able to understand and often utilize these diversities and traditions.
Even the level of infrastructure provided in different regions varies a lot. The
diversity in terrain adds to the already varied lifestyle and livelihood of people
there. Therefore no marketer can follow a uniform marketing strategy through
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out India. Indian rural customer is marred largely by illiteracy and poverty.
Illiteracy leads to an inability to identify brand differences and read the basic
text on packages. Poverty and dependence on vagaries of monsoon result into a
low and unpredictable purchasing power. Moreover products are sold lose,
giving high competition to branded sealed products. Ignorance and illiteracy are
accompanied by strong influence leaders like the local panchayat members,
caste and religious leaders etc. Irregular income, dependency on the vagaries of
monsoon induces the rural consumer to buy in small quantities. Small Coke
worth Rs 5, Chick shampoo sachets have been successful in the past. Since rural
population does not have the concept of storing goods and blocking too much
capital into it is important for rural marketers to provide products in small
quantities as well as good credit or EMI systems for larger products. It is also
important to induce first time purchase and trials so that customer is able to
experience products he never has. Credit facility also needs to be extended to
the wholesalers. There is hardly any brand stickiness in rural consumption.
Nirma is simply referred to as the pila powder and surf as the nila powder.
Because of illiteracy the packaging of products plays an important role. It is also
easy for spurious products to find a foothold in rural markets. RC Cola
packaged as Pepsi and Hello Chips a copy of Lays are widely sold. Therefore it
is important that companies give their products shorter names in the local
languages and educate the customer about the significance of their brands.
Pictures and endorsement by local stars will also help in increasing brand
awareness. Over the past few years rural India has witnessed an increase in the
buying power of consumers, accompanied by their desire to upgrade their
standard of living. Host of projects both from the government and the private
companies have changed the rules of the marketing game in rural India. The
NREGA (National Rural Employment Guarantee) schemes, as well as other
rural employment schemes have given the rural population an opportunity to
meet their daily needs. National Rural Employment Guarantee Scheme
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guarantees 100 days employment to any one member of the rural house hold.
Farmers have benefited from loan waver which has again received an extension
in the recent budget. Also the increased demand for labour in the urban projects
has resulted in more money being sent back home by the immigrant labour.
Rural customers have upgraded their lifestyles and as a result are purchasing
lifestyle products like cosmetics, beverages, mobile phones, etc, which have
become necessities for them. Urbanisation has become more of a life style and
is no longer bound to geographical areas.
Changing Face of the Rural Customer
In recent times, rural India has witnessed a wave of change. Dinesh Malhotra,
general manager of Linterland (rural arm of Lintas), points out, media
exposure and increasing literacy levels, people in rural India are now
demanding a better lifestyle. The educated rural yuppie (males in the 15-34 age
groups) is moving out to work in nearby towns and cities, and sending money
home to his family. This has created an indirect increase in disposable incomes
and a surge in demand for consumer goods. The rural youth are slowly evolving
as opinion leaders in influencing brand and product decisions in a market that
was swayed by village elders for centuries. Looking at the challenges and
opportunity that rural markets offer, the future looks promising to those who can
understand the dynamics of the rural markets and exploit them to their best
advantage. A radical change in the attitudes of the marketer towards the vibrant
and ever growing rural market is called for.

Rationale
This study is done for understanding the marketing concept in rural areas. Also
we can know whether peoples of rural area are aware about e-tailing & also to
know the confidence of rural population towards e-tailing. This can also be
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helpful for the FMCG companies to know how they make their product
different in pricing & quantity as compare to urban sector. & this depends on
their personal disposable income.

OBJECTIVES OF THE STUDY

To develop an insight into rural marketing regarding different Concepts and

basic practices in this area.

To discuss the challenges and opportunities in the field of rural marketing
To study the impact of E marketing.
To understand the awareness of rural people toward rural market

Research Methodology
The Study: - The study was Causal in nature with survey was used as the
method to complete the study.
SAMPLE DESIGN
Population: The populations of the study were all the employees working
in Private Sector.
Sample Size: The sample size was of 50 respondents.
Sample Element: The sampling elements were the individual employees
working in Public and Private Sector.
Sampling Technique: Convenience Sampling Technique was used for
collection of data.

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Tools for Data Collection

Data is collected through both Primary & Secondary data. Data is collected
from various employees working in Public and Private Sector through
personal interaction. Structured questionnaire is prepared for collecting data.
The Data was collected on a scale of 1 to 5, where 1 indicated minimum
agreement and 5 indicated maximum agreement with the statement. Data is
collected with mere interaction and formal discussion with different
employees. Some other relevant information collected from secondary data.
Tools for data analysis
Item to total correlation: It helps in measuring the internal consistency each
item should be correlated with the total if it is not correlated that item will be
deleted.
Reliability test: It is conducted to measure the reliability of the Questionnaire.
the valve should not be lessor than (0.7).
Factor Analysis: It is conducted to identify the underlying factors.

Result and Discussion

Internal Consistency Test
Consistency of the questionnaire was checked through item to total correlation.
Under this correlation of every item with total was measured and the computed
value was compared with the standard value (i.e. 0.1942). Out of 21 statements,
1 statement was found to be inconsistent.

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Table 1: Showing result of Internal Consistency

S.No.

Statements

Computed Value Accepted /

Dropped

My satisfaction level for the products

provided by FMCGs company to me
I prefer for multiple packaging items

0.382522

Accepted

0.463064

Accepted

0.318853

Accepted

My satisfaction level with the service

provided by online market
I am influenced by the advertisements

0.492365

Accepted

My E-shopping experience

0.438326

Accepted

I am getting influenced by the

purchasing habits of others
My satisfaction level with the
ambience of general store
My satisfaction level with life cycle of
a product
My level of satisfaction with rural
marketing done for selling the product
by FMCG company
My rating towards active CRM of a
store in terms of satisfaction
My family members are concerned
about shopping when I am going for
shopping
I think the E-shopping has taken place
of door to door selling in rural sector
My satisfaction level towards price
conscious or scheme influential or
discount schemes
I am hesitated or feeling risk in buying
a new product

0.393981

Accepted

0.300219

Accepted

0.352721

Accepted

0.309123

Accepted

0.272271

Accepted

0.466554

Accepted

0.408349

Accepted

1
2
3

7
8
9
10
11
12
13
14
15
16
17
18
19

My satisfaction level with first take of

the product that shopkeeper offered
me
I am rating the FMCG product in
terms of value
I am satisfied with the substitute
products provided by storekeeper
My satisfaction level of trust towards
advertisement
My satisfaction level in terms of

0.318481

0.279887
0.113022
0.102773

Accepted
Accepted
Dropped
Dropped

0.212966

Accepted

0.257196

Accepted

0.305939

Accepted
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online security provided by E-stores

Reliability Test
Reliability test was carried out using SPSS software and the reliability test
measure is given below:

Table 2: Showing result of Reliability Statistics

Cronbach's Alpha
.545

Number of item
19

It is considered that the reliability value more than 0.7 is good and it can be seen
that the reliability value of Cronbachs Alpha was found higher than the standard
value.
Factor Analysis
Principle component factor analysis with Varimax rotation was applied. The
factor analysis resulted in 6 factors for Comparative study of public sector and
private sector banks. The details about factors, the factor name, variable number
and convergence and their Eigen value are given in the annexure.

Table 3: Showing Results of Factor Analysis

Factor
name
Factor 1

Eigen value
Tota % Of
l
Variance
2.22
13.881
1

Variable convergence
I am getting influenced by the purchasing
habits of others
My satisfaction level with the service
provided by online market

Loading
Value
0.678
0.675

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Factor 2

Factor 3
Factor 4
Factor 5
Factor 6

2.08
7

1.67
8
1.53
8
1.38
4
1.30
6

My satisfaction level with first take of the

product that shopkeeper has offering me
My E-shopping experience

0.566
0.674

13.045

10.487

9.614

8.650

8.163

My family members are concerned about

shopping when I am going for shopping
I am getting influenced by the
advertisements
My rating towards the CRM of a store in
terms of satisfaction
I am concern towards price conscious or
scheme influential or discount schemes
My satisfaction level for the products
provided to you by FMCGs
My preference over multiple packaging
items
Role of children in influencing the buying
decision
My satisfaction level with the ambience
of general store
My satisfaction level with life cycle of a
product
I think the E-shopping has taken place of
door to door selling in rural sector
My level of satisfaction with rural
marketing done for selling the product by
FMCG company
I am hesitated or feeling risk in buying a
new product

0.580
0.579
0.551
0.502
0.797
0.746
0.813
0.639
0.720
0.551
0.820
0.682

Managerial Implications
Low cost product must be produced by the company.
Proper rural survey.
Consumer buying behavior.
Limitations & Suggestions of the Study
The research is covering only the certain areas & aspect of marketing.
The secondary data is based on internet & books related to marketing.
The research is containing only one example of HULs.
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 The study is based on descriptive study.

Conclusion
Rural Marketing in India Economy has always played an influential role in the
lives of people. In India, leaving out a few metropolitan cities, all the districts
and industrial townships are connected with rural markets. India has a
population that is large, heterogeneous, largely English speaking and a cultural
heritage that runs back to thousands of years. The common binding factor being
the historical background, over two hundred years of subjugation and the
democratic republic it has developed into. Yet the most common factor is the
lives of more than seventy percent of its population that lives in the rural areas
and has similar economic and social circumstances. The major segmentation of
mass population is located in rural area. The market potential is huge in rural
areas. It is this market strength in rural area that needs to be tapped. Now days
even the educational Institutions are concentrating on rural marketing, have
developed special management programmes to cater to rural marketing and are
doing market research in rural places. Rural markets are rapidly growing in
India but have often been ignored by marketers. The following statistics is
enough to throw light on the relevance of rural markets: forty six percent of soft
drinks are sold in rural markets, forty nine percent of motorcycles and fifty nine
percent of cigarettes are also consumed by rural and small town consumers.
Apart from this fifty three percent of Fast Moving Consumer Goods and fifty
nine percent of consumer durables have market in the rural belts. There are
nearly 42,000 rural haats (markets) in India. LIC sells more than 50 percent of
its policies in rural India. Of the 20 millions who have signed up for Rediff
mail, 60 percent are from small towns The 30 million Kisan Credit Cards
(KCC) issued so far exceed the 25 million credit-plus-debit cards issued in
urban. These statistics clearly show a trend where the rural consumers are not
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only buying to fulfil their bare necessities but are also taking care of higher
needs of comfort and socialization. Moreover they have turned highly
technology savvy as demonstrated through the success of ITCs echaupals and
Rediffs rural success. As Paul Mazur defines,' Marketing's role is delivery of a
higher standard of living to people in the society.'
References

1)http://en.allexperts.com/q/Management-Consulting-2802/2012/8/ruralmarketing-ms611.htm
2)http://b1dcity.com/index.php?
option=com_k2&view=item&id=4224:success-mantras-for-ruralmarketing-in-india&Itemid=340&lang=en
3)http://www.factormarkets.eu/content/rural-labour-market
4)http://www.studymode.com/subjects/factor-affecting-rural-marketpage5.html
5)http://ruta.org:8180/xmlui/bitstream/handle/123456789/512/RN52.pdf?
sequence=1

Annexure
Questionnaire for rural area which will help us to study how they make decision
in shopping of FMCGs product.
Name:
Age:
Gender: a) Male B) female
Occupation:
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Questions

Ratings (1.5)
Unsatisfiedneutralextremely
satisfied

My satisfaction level for

the products provided by
FMCGs company to me
I prefer for multiple
packaging items
My satisfaction level with
the service provided by
online market
I am influenced by the
advertisements
My E-shopping experience
I am getting influenced by
the purchasing habits of
others
My satisfaction level with
the ambience of general
store
My satisfaction level with
life cycle of a product
My level of satisfaction
with rural marketing done
for selling the product by
FMCG company
My rating towards active
CRM of a store in terms of
satisfaction
My family members are
concerned about shopping
when I am going for
shopping
I think the E-shopping has
taken place of door to door
selling in rural sector
My satisfaction level
towards price conscious or
scheme influential or
discount schemes
I am hesitated or feeling
risk in buying a new
product
My satisfaction level with
first take of the product that
shopkeeper offered me
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I am rating the FMCG

product in terms of value
I am satisfied with the
substitute products
provided by storekeeper
My satisfaction level of
trust towards advertisement
My satisfaction level in
terms of online security
provided by E-stores

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