FMCG COMPANIES IN RURAL MARKETS

INTRODUCTION Fast Moving Consumer Goods (FMCG), also known as Consumer Packaged Goods (CPG), are products that have a quick turnover, and relatively low cost. Consumers generally put less thought into the purchase of FMCG than other products. The absolute profit made on a FMCG product is less; however they are generally sold in high numbers. Hence profit in FMCG goods generally scales with the number of goods sold, rather than the profit made per item. The classification generally includes a wide range of frequently purchased consumer products including: toiletries, soaps, cosmetics, teeth cleaning products, shaving products, detergents, and other non-durables such as glassware, bulbs, batteries, paper products and plastic goods. The category may include pharmaceuticals, consumer electronics and packaged food products and drinks, although these are often categorized separately. The Indian FMCG sector is the fourth largest sector in the economy with a total market size in excess of US$ 13.1 billion. It has a strong MNC presence and is characterized by a well established distribution network, intense competition between the organized and unorganized segments and low operational cost. Availability of key raw materials, cheaper labor costs and presence across the entire value chain gives India a competitive advantage. The FMCG market is set to treble from US$ 11.6 billion in 2003 to US$ 33.4 billion in 2015. Penetration level as well as per capita consumption in most product categories like jams, toothpaste, skin care, hair wash etc in India is low indicating the untapped market potential. Burgeoning Indian population, particularly the middle class and the rural segments, presents an opportunity to makers of branded products to convert consumers to branded products. Growth is also likely to come from consumer 'upgrading' in the matured product categories. With 200 million people expected to shift to processed and packaged food by 2010, India needs around US$ 28 billion of investment in the foodprocessing industry. NEED OF FMCG IN RURAL AREAS After years of growth derived primarily from the urban markets, the FMCG companies have now realized that India lies in its rural villages. So much so that rural marketing has become the latest marketing mantra of most FMCG majors. With extensive competition not only from MNCs but also from the numerous regional players and the lure of an untapped market has driven the marketers to chalk out bold new strategies for targeting the rural consumer in a big way. To

gauge the extent of shift in focus of the FMCG giants just sample this: recently Godrej Consumer Products Ltd (GCPL) did something that it hadn't done before; it introduced smaller pack sizes of some of its soaps and put them on the market for Rs 5. And FMCG giant HLL has just launched a green variant of Lifebuoy soap, which, it hopes will be a winner in the rural areas. Also, don't be too surprised if you village folk having their hair washed and dyed as they are only taking advantage of the live demonstrations conducted by Chennai-based CavinKare Products. So it is clear that rural markets have caught the eyes of FMCG marketers and it is being targeted through experiments in a big way. Over 70% of India’s 1 billion plus population lives in around 627,000 villages in rural areas. This simply shows the great potentiality rural India has to bring the muchneeded volumes and help the FMCG companies to bank upon the volume–driven growth. Also, the rural market has been growing steadily over the years and is now bigger than the urban market for FMCG’s (53% share of the total market) with an annual size in value terms currently estimated at around 50,000 crores. It is a definite boon in disguise for the FMCG majors who have already reached the plateau of their business curve in urban India and are desperately seeking new ways to increase sales. To drive home the potential of rural India just consider some of these impressive facts about the rural sector. As per the National Council for Applied Economic Research (NCAER) study, there are as many 'middle income and above' households in the rural areas as there are in the urban areas. There are almost twice as many 'lower middle income' households in rural areas as in the urban areas. At the highest income level there are 2.3 million urban households as against 1.6 million households in rural areas. According to the NCAER projections, the number of middle and high-income households in rural India is expected to grow from 80 million to 111 million by 2007. In urban India, the same is expected to grow from 46 million to 59 million. Thus, the absolute size of rural India is expected to be double that of urban India. But despite the high rural share in these categories, the rural penetration rates are low, thus offering tremendous potential for growth. Thus it becomes amply clear that rural India has to be the hot target in future for FMCG companies as it presents a plethora of opportunities, all waiting to be harnessed. Many of the FMCG companies are already busy formulating their rural marketing strategy to tap the potential before competition catches up. All biggies in the industry be it HLL, Marico, Colgate-Palmolive or Britannia, are showing deep interest in rural India. However not everything is all rosy and there exist some gray areas in the rural strategies also. DEVELOPING EFFECTIVE RURAL MARKETING STRATEGY The winning strategy is to focus on the core competency such as technological expertise to design specific products for the rural economy. The most remarkable

The rural market remains quite price-sensitive and thus squeezing costs at every stage is of vital importance. Another very important factor that needs to be looked at is the proliferation of spurious products. a badly-made commercial.example in this context is the launch of sachets which has transformed the rural market considerably as packaging in smaller units and lesser-priced packs increases the product’s affordability. the needs and latent feelings of the rural people have to be well understood before launching products in rural segments. So it becomes very easy for counterfeit products to eat into the market share of established reputed brands. Also companies like HLL and Nestle who have adopted this strategy have benefited tremendously. visuals. powerful input and personalized communication system will help in realizing the goal. pose considerable challenge to rural marketers. The retailer also gets a larger profit on selling the counterfeits rather than the genuine products and hence is biased towards the fakes. Barring a few. which are doing the rounds of rural markets. Rural masses are illiterate people and they identify a product by its packaging (color. A very significant step for change could be an effort to directly tap the haats. notable exceptions. to less than 50. a chocolate flavored biscuit which is based on the consumer insight that rural mothers opt for biscuits rather than chocolates for their children. mandis. Brooke Bond Lipton India Ltd (BBLIL) markets its rural brands through magic shows and skits. Another case is of Britannia with its Tiger brand of low priced and conveniently packaged biscuits becoming a great success story in rural markets.. The traditional media. But then. "rural" means different things to different people: from 500. "Funny & Lovely" etc. Marketers would do well to first understand this and then designing products accordingly. Finally an effective rural strategy for FMCG companies must include the use of traditional media for creating awareness about their products in the rural markets. with its effective reach. Apart from this to acquire further edge in distribution HLL has started Project Shakti in partnership with Self Help groups of rural women. For example.). rural marketing in India is still about a van campaign.000 people for consumer durables. Brands such as "Jifeboy". interest arousal capability is high and minimum cost. it involves more then one sense. melas and local bazaars which provide an opportunity of promoting the brand in front of a large congregation of rural consumers. a few painted walls and the occasional participation in village haats and melas. Some FMCG giants like HLL are in process of enhancing their control on the rural supply chain through a network of rural sub-stockists. who are based in the villages only. "Bonds Talcum". size etc. The advantages of traditional media which make it a powerful marketing communication channel are: accessibility is high. Along with the cultural dynamics.000 . Cadburys has launched ChocoBix.

And don't forget Nirma. Meera Herbal Powder. which included interactive product oriented game. COLGATE PALMOLIVE INDIA LTD. clients' reluctance to spend big money for bigger results in rural markets is because there are no standard performance yardsticks for judging the efficacy of the rural marketing efforts. at least. According to estimates by the Rural Marketing Agencies Association of India. COLGATE PALMOLIVE . an edutainment film using well know TV stars of Karnataka. Ghadi detergent powder and Power soap are proof that regional brands can become brands to reckon with. sales and placement Result Awareness for the brand has increased multifold and is reflected in the spontaneous increase in sales.or. the total budget for rural marketing is only about Rs 500 crore (Rs 5 billion). Of course. TOOTHPASTE MARKET PICKING UP . Still. Companies like Cavin Kare (Chik Shampoo. This is grossly inadequate to cover the huge potential for different products in rural markets.CIBACA TOOTHPASTE Client: Colgate Palmolive Product: Toothpaste Brand: Cibaca COMMUNICATION STRATEGY Pitched against low priced products using Colgate lineage and the resultant global quality assurance at the same price point A well planned mobile marketing activity. of companies wanting to move beyond urban boundaries. Fairever Cream and so on).for fast-moving consumer goods. Anchor (100 per cent vegetarian toothpaste). besides product sampling. the most enduring example of a brand that began as a regional player and is now a giant.000 crore (Rs 130 billion) allotted to mass media. it is heartening to note the increasing awareness of the importance of rural markets . compared to the over Rs 13.

Despite the lower value growth due to price reductions. These reductions affected about 65% of the sales in FY04. The growth trend in first five months of 2004 reveal a robust 7. While this is small segment. The future strategy of the company in Oral Hygiene Products for 2006-07 on the basis of 4 P's would be: 1. Over the long term. Babool.1% decline during the same period.The company had undertaken a 17% price cut in flagship toothpaste brand Colgate Dental Cream (CDC) in the first quarter and a substantial price reduction of Colgate Cibaca in the second half. • The company plans to build preference for Colgate Cibaca by leveraging on ‘Colgate’ equity and matching prices of competitors to aggressively to counter LPP threat. Personal products currently account for 7% of revenues. Successful launches The company launched ‘Colgate Herbal White’ in the toothpaste range and ‘Colgate Motion Kids’ India’s first battery powered toothbrush for kids in the Toothbrush category during the year. with a 51% market share in the toothpaste segment. New launches in the personal care portfolio include Palmolive Aroma range of Toilet Soap. Shower Gel and Talcum Powder. Toothpaste volumes grew by 3. Strategy • Colgate plans to focus on strengthening dominance and reignite growth in core oral care business.3% decline in FY03. the company expects the category to grow sharply over the next 5-10 years and it would emerge as an important business in future. These have also contributed to the volume growth. The strategy would be to defend and grow base business and improve share in fast growing LPP segment.9% growth in volumes as against a 5. Colgate plans build a strong presence in emerging PCP (Personal Care Products) liquids categories. Anchor ) and other MNC's such as Smithkline (Acquafresh ). 2 player HLL and more recently from small local players (Meswak. The company plans expand market by using local press to communicate value and through micro targeting within key LPP states.5% during the year as against an 8. Colgate has been able to grow volumes in the toothpaste segment in FY04. Liquid Hand Wash. Products: Colgate-Palmolive will provide the public with safe and effective products and will strive to produce products that have the lowest practical impact on the . 48% market share in the toothpowder market and a 30% share in the toothbrush market. Presently it is facing competition from no. MARKETING MIX FOR COLGATE PALMOLIVE INDIA LTD Colgate Palmolive is the market leader in the Indian oral care market.

4.g.. we will work to improve the environmental compatibility of all our packaging materials. Most of the promotional expenses would be T. Promotion: CP would be positioning Colgate dental white crème and toothpowder towards rural rich segment. CP would expand Colgate Herbal brand to herbal clove flavor. E. 5. I would charge higher premium than the generic dental white crème that would be focused on consuming and lower income classes. Price: The price would largely be based on the competitor's price. For toothbrush. 6. For urban population hoarding on national highways outside the metros would provide better eye catch.V. incineration. FM radio for urban population and MW and SW radio would also be used for promotion towards rural population. From the niche products e.environment. For rural consuming class CP would be endorsing Cibaca toothpaste. In toothpowder. CP would come up with the products on the basis of functional benefits. media as it would have better reach to both urban and rural population by 2006-07. Apart from T. CP would try to increase the wholesalers to smaller towns and would track the distribution path so that they are covering all the village areas around the towns. Colgate herbal.g. Colgate Blue etc. and land filling. CP woulc concentrate on functional benefits and would launch different toothbrushes for different age groups. CP would come up with another strong brand name other than Colgate and Cibaca. it would endorse the development of ‘Colgate Ayurvedic Toothpowder' focused toward rural rich and consuming class. For Urban rich and consuming class. Colgate endorses the worldwide hierarchy of solid waste management: source reduction. recycling (including reuse). Facilities: . They should come up sachets of these tooth powder and position toward rural population who buy in smaller lots. CP should also try to position some innovative toothpaste with a brand name other than Colgate but under the umbrella of Colgate Palmolive.V. Packaging: To reduce the impact of our product packaging on the environment. 3. The pricing would be done on the basis of price points and the packaging would be customized on the basis of price points. 2. I would also launch a special toothpaste and toothbrush for kids in the age group from 4-10 years. herbal lime and mint flavor etc. Place: CP would try to increase product penetration to rural population as by 2006-07 the rural population who is rich and consuming class would be 209Mn which is not much lesser than urban rich and consuming population of 253Mn people.

parents and educators to come together to emphasize the importance of oral health as part of a child's overall physical and emotional development. Colgate’s performance and company’s strategy for the business. divestitures. We will also act in a responsible manner with respect to the environmental protection of the lands under our management and ownership. including samples. as well as the protection of the environment. The Colgate top management met up with the Analyst community in Mumbai yesterday to discuss FY03 results. SLOWDOWN IN INDUSTRY The oral care market degrew by 9% in 2002-03 in value terms. and entry into joint ventures. conducted regularly across the country to promote preventive dental health care. 7. Education is imparted with the aid of audio-visuals and printed literature created by the company.8% decline. An analysis of the degrowth trend revealed that almost 69% of the drop in urban consumption was due to decline in consumption of toothpaste. In the . India children in primary schools receive instructions in dental care from members of the dental profession nominated by the Indian Dental Association.2%. while 31% was attributed to partial shift of consumers from toothpaste to toothpowder. are also distributed by the company to encourage the practice of oral hygiene.Colgate also has launched its first-ever online school curriculum featuring fun and entertaining activities. health and safety issues in all significant business transactions.Colgate-Palmolive is committed to the health and safety of our employees and the communities in which we operate. civic leaders and most importantly. BRIGHT FUTURES” The Colgate Bright Smiles. We will establish and maintain programs for the operation and design of our facilities that meet or exceed applicable environmental. Under this Program conducted by Colgate-Palmolive. Business: Colgate-Palmolive will consider environmental. Free dental health care packs. Managing Director Graeme Dalziel made a detailed presentation on the oral care category. This Program also encourages dental professionals. Teachers Training Program is an integral part of the School Dental Health Program. health and safety laws and regulations. Bright Futures Oral Health Educational Program worldwide was developed to teach children positive oral health habits of basic hygiene. The urban toothpaste market witnessed a 3. diet and physical activity. public health officials. “COLGATE'S BRIGHT SMILES. discontinuance of operations. including acquisitions. while the rural market degrew by 6.

Toothpowder (+1.2%).3% in FY03. Over 9% of decline in volumes was attributed to consumers exiting from the category itself and moving back to traditional dentrifices. 6% of decline was due to partial shift to tooth powder. COLGATE IMPROVES MARKET SHARE Despite the slow down Colgate has managed to improve market share in all the three categories viz.1%) and Toothbrush. This is a major strategy change as compared to the promotion driven marketing being undertaken previously.85bn. Toothpaste (+1. Usage of hair oil is an everyday habit with 50% of the population out of which some perceive that massaging the head with hair oil has a cooling impact. reflecting that category ad spend have gone down significantly. More importantly. 67% of the decline was attributed to drop in consumption.4%) CHANGE IN MARKETING STRATEGY Colgate has taken an average price cut of 17% on its toothpaste brand portfolio. faster and better growth. The major positioning platforms for hair oil are purity. in a bid to spur volume growth in the category. Usage of hair oil is a typical Indian traditional habit. HLL'S NIHAR COCONUT OIL INTRODUCTION The hair oil market is huge. It is perceived to offer benefits of nourishment. Hair oil is a very Indian phenomenon. hair strengthening. where coconut oil and edible oil are interchangeably used. Although adspend in absolute terms has been lowered by 20% at Rs1. the size of the market is likely to be higher than estimated.1% in FY03 to 51. (+0. coconut oil and non-greasy perfumed oil. the market is growing at an impressive 6-7% in volume terms despite the high penetration level. hair . valued at Rs 6 bn. Coconut oil comprises 2/3 rd of the total market and the balance comprises the non-greasy perfumed oil. Colgate has managed to up its share of voice in the toothpaste category from 43.rural markets. and reduce the problem of falling hair. while almost 18% of decline was due to total shift to Toothpowder. The penetration of hair oil is fairly high at around 87% and evenly distributed among the urban and rural areas. There are two types hair oil available in the market. which failed to generate the anticipated growth. It is used as a conditioner and nourisher. Due to the varied consumption habits of consumers across the country.

Loose oils are priced on the basis of input costs and availability. it is still far from being crowned the all-India leader in coconut oils.000 tonne. The total volume of the rural coconut oil market is around 54.4 per cent in volumes in October. As per market research firm ORG-Marg's retail audit for the rural coconut oil market. Even as HLL has managed to scrape through the leadership position of the rural coconut oil market. Coconut oil and perfumed oil accounts for about 65% and 35% of market in volume terms. HLL's Nihar coconut oil achieved a market leadership in the rural coconut oil market in October 2000. by displacing all-time leader Parachute of Marico Industries. Therefore. KEY OBJECTIVE The main objective of Nihar coconut oil is to overtake the loose oil consumers in rural areas. Coconut oil is a relatively new area for the multinational. this is one product where the major players do not have to fight either monetary or psychological barriers to usage.300-crore hair oils market is easy. while that of Parachute was at 23. . NIHAR DISPLACES PARACHUTE IN RURAL COCONUT OIL MARKET It is a quiet conquest by Hindustan Lever Ltd (HLL) in the rural coconut oil market. Nihar's market share stood at 25. non-greasy look.6 per cent.4 per cent in volumes in October. Since branded players have to grow at the expense of the ubiquitous unorganised segment and a host of regional and local brands.nourishing and more recently. the usage of hair oil is a deeply ingrained habit with Indian consumers.000 tonne. HLL's Nihar coconut oil achieved a market leadership in the rural coconut oil market in October 2000. by displacing all-time leader Parachute of Marico Industries. while that of Parachute was at 23. The total volume of the rural coconut oil market is around 54. Unlike shampoos or hair colors. It also aims at being the market leader in rural market by overcoming other brands. it is difficult to shield margins and selling prices from the vagaries of loose oil prices. and HLL unleashed significant aggression in this market in the last two-three years. It is a quiet conquest by Hindustan Lever Ltd (HLL) in the rural coconut oil market. Nihar's market share stood at 25. As per market research firm ORG-Marg's retail audit for the rural coconut oil market. which are products relatively new to the Indian psyche. But this does not necessarily mean that being a branded player in the Rs 1. both of which are notoriously volatile. Branded players account for just over a third of the total hair oil market. growing at 6-7 per cent annually. Players in the plain coconut oil segment operate in a category where there are few entry barriers in place. growing at 6-7 per cent annually.6 per cent.

such as Rs 5. Nihar's all-India share at the end of 1999. one of the first players to milk the herbal category through aggressive advertising. Thus. this makes valueadded hair oils less vulnerable to price competition from cheaper alternatives. establishing a brand identity is easier. light hair oils. Two. Third. Pricing is a critical issue in the branded coconut hair oil market where the consumption of low-priced loose oils is huge. So as to tackle the pricing issue. and lately. HLL's portfolio of brands in this sector comprise Nihar and Cococare. An entry into the value-added hair oils segment appears to offer quite a few benefits to the branded players. value addition helps players command a price premium over the no-frills coconut oil brands. HLL believes that low-unit price packs will lead to substantial conversions of the loose oil consumers to packaged and branded oils. This. HLL's Clinic Plus non-sticky hair oil (which combines coconut oil and mineral oil) has also been an unqualified success. Both herbal oils and non-sticky hair oils have been quite successful as product concepts. with easier differentiation from the regional and local brands. the multinational feels. Marico's flagship brand Parachute is the all-India market leader with a share of about 53 per cent. non-sticky oils.5 per cent. Rs 10 for 100 ml and Rs 20 for 200 ml. it is still far from being crowned the all-India leader in coconut oils. One. dandruff solution hair oil. since this gain in share has not really impacted Parachute's all-India market share. The brand's share in the beginning of 1999 stood at 9. The Nihar low-price pouches launched early this year seem to have performed the trick.hair oils with herbal ingredients. VALUE-ADDED HAIR OILS Given the limited differentiation possibilities in the coconut oil segment. stood at 12 per cent. would also enable the company to gain a higher share of the market. These together command a market share of about 20 per cent share of all-India coconut oil market. registered a growth rate of 74 per cent in 1998-99. even as HLL has managed to scrape through the leadership position of the rural coconut oil market. as per ORG-Marg retail audit for the rural plus urban market. major players in the branded hair oils market have been training their sights on valueadded hair oils. the share has been garnered through conversion of loose oil consumers. While Parachute continued to .The multinational's strategy is simple: to upgrade loose oil consumers by offering low-unit price packs. This has spawned a range of product innovations -. Dabur's hair oils business continued to grow at around 18 per cent in 1999-2000. Rural and urban markets contribute equally to the overall Rs 500 crore coconut oil market. However. HLL launched Nihar and Cococare in various price points in pouches.50 for 50 ml. Dabur India's Vatika hair oil.

Product: Packaging innovations Nihar. • Wide mouth jar available in 200 ml and 500 ml . convenient and vibrant. Nihar is at 25 per cent as compared to Parachute at 24 per cent. The range of double filtered Nihar coconut oil includes: • Flip top tin. the company has already established rural leadership. India's only double filtered coconut oil has made a change in packaging and logo. While Parachute's growth rate fell from 14 to 6 percent in the first half of 2000-01. & 500 ml with grooves on the side for an easy hold when oily. available in 100ml. to exploit opportunities in this segment of hair oil. Nihar Amla Oil was also launched around the end of the year. which is innovative. NIHAR’S MARKET SHARE For Nihar coconut oil. The 200 ml bottle is much sleeker and contemporary. Nihar Perfumed Coconut Oil continued to grow well. The logo lettering is now in a fresh green color and sports a leaf over the brand name. HLL's Clinic All Clear hair oil and Parachute Dandruff Solution has also entered the fray. The essence of the new packaging is to bring about practicality in daily usage of the Nihar coconut oil. In December 99. To increase urban penetration. available in 200 ml and 500 ml • Tamper proof cap. The flip top tin has been designed for convinience in pouring out the oil. 200ml. while Clinic All Clear Dandruff Oil registered substantial growth of more than 50 %. According to ORG-Marg figures for market share in rural areas for 0ct 2000. the wide mouth jar can be used in different climatic conditions. it was the first to introduce the wide mouth jar and pouches packaging. MARKETING MIX FOR NIHAR COCONUT OIL 1. The tamper proof jar has been introduced with grooves on the side for a firmer grip giving the jar a more feminine aspect. Hair and Care's growth rates improved from around 7 per cent to 23 per cent in the same period. In keeping with Nihar heritage. it was the value-added hair oils. Nihar has consistently been bringing innovations to its consumers. which clocked higher growth rates of late. Parachute was at 28 per cent as against Nihar at 15 per cent. the new packaging is part of Nihar’s constant endeavors on improvising and providing quality to our consumers. such as Hair and Care. the company is changing the imagery of the product by changing the product packaging.remain the lynchpin of Marico's hair care business.

Process of preparing the Double filtered Nihar coconut oil The double Filtration process involves the production of filtered coconut oil from copra. The copra is then crushed at a higher pressure. In the second stage the filtered coconut oil is mixed with special quality silica and recirculated. HLL has launched 100 ml pouches of Nihar priced at less than Rs 10. such as Rs 5. This is done by downsizing the copra. 4. Hindustan Lever has leveraged the microcredit model to expand its rural market from its present 40 per cent penetration. the 100 ml pouches are cheaper on a per ml basis than the larger bottles and flip top packs. has been a key factor determining the fortunes of the major players in this segment.• Pouches available in 50 ml. Rs 10 for 100 ml and Rs 20 for 200 ml. This is likely to bring in new users from the loose oil segment. there appears to be no near term cause for worry. The final step in this stage involves sieving the oil and parts of the crushed copra through a screen. The continuation of the present price trends in copra would probably determine the near term financial performance of the large players in the plain hair oils business. the key input in coconut based hair oils. Leveraging the micro-credit model to expand its rural market. This still murky oil is allowed to partially settle in flat-bottomed collection tanks. A large part of the decline in copra prices is due to the substitution of copra by cheaper imported palmolein. HLL has launched Nihar and Cococare in various price points in pouches. HLL believes that the low-unit price packs will result in upgradation of the loose oil consumer to this brand. Apart from making the product more affordable to mass market consumers. The company feels there is enough room for brands to gain share by upgrading loose oils users. which is then passed through a cooker and steam heated for facilitating oil release. . Nihar's small packs in AP has led to the brand's market share gain in this state from a marginal 2% in April to 35 %. For example. This filtered oil with adequate purity finally goes to the packaging line.This example is being replicated by the company in each of the states where Nihar and Cococare draw large consumption.its five-month-old marketing initiative involving women belonging to micro-credit self-help groups (SHGs) in the Nalgonda district of Andhra Pradesh. Pricing To tackle the pricing issue. The price of copra. and enable the company to gain a higher share of the market. it is piloting `Project Shakti' -. Place ( Distribution) HLL has a very good distribution network.50 for 50 ml. 3. On this count. this continues until the required clarity is achieved. Nihar has also migrated to low unit packs to rope in new users. 100ml and 200 ml 2.

the project has had several interesting spin-offs. with an obvious `win-win' partnership potential. HLL feels. it means income generation without the headache of starting their own venture and becoming vegetable vendors. Great emphasis is laid on the price factor and so they advertise keeping in mind the price. Nihar's "kudrat ki shakti" ad clicked in the market place as it was distinctly different to the usual hair oil ads. fish vendors. The investment opportunity is relatively risk-free and high on return. Rajasthan. But that is also not on a large scale as the T. HLL is committed to providing the necessary training inputs to these groups on the basics of enterprise management which the groups can then use to enlarge their initiatives. Andhra Pradesh and Bengal. thus helping the company expand its rural market from its existing 40 per cent penetration in villages with population of over 2000. which act as semi-distributors in the project. MACTS. Andhra Pradesh was obviously chosen for the pilot project as 20 per cent of its rural population is covered by the micro-credit model. pan shop owners.V hasn’t yet reached the interiors of rural areas. which generally consist of 14 to 15 SHGs. 5. These are covered by three Mutually-Aided Credit Thrift Societies (MACTS). The micro-credit concept. Madhya Pradesh. Uttar Pradesh.The project. which has generally been the microcredit model to date. involves women from SHGs turning into direct-to-home distributors for HLL in their area. etc. For the women. They do use advertising through T. .33 SHGs in the State. creates wealth for the members of the groups and helps them better their lives and alleviate poverty. are federated into a co-operative and work in close tandem with the SHGs. The customers in the rural area are very price sensitive. For the project.V. is around a whopping Rs 800 crore. Promotional activities are regionspecific and locally flavored to suit the brand's requirement in its area of strength. The micro-finance collected in the State. Promotion Nihar attracts a large consumer preference in Bihar. A lot of emphasis is given on the price and they also compare the product with the local brands and how it is superior in quality from the other available local brands. while another is shortly purchasing a vehicle for its distribution network. Nihar does advertise in the rural area but they don’t use much of newspaper as there is a very high level of illiteracy in the rural area. One of the MACTs distributing HLL products has started its own supermarket. that impacts 45 lakhs women belonging to 3.. through savings as well as institutional loans. 50 SHGs closest to the highway in Nalgonda district were identified. In fact.

Communication has really made the company grow to what it is today. The company's aggressive communication strategy has been one of the key factors behind the growth.PROBLEMS FACED BY NIHAR • Strong competition from other players in the market. urban and young brand. This is because it has takers among older consumers who have seen through the myth of instant and cosmetic results. It had a good product. With the help of its strong distribution and its continuous innovations to match the consumers’ choice it can continue to maintain its leadership in rural market. • Pricing is a critical issue in the branded coconut hair oil market where the consumption of low-priced loose oils is huge. They know the long-term benefits of Ayurveda. especially Parachute of Marico industries. STRENGTH OF NIHAR • Nihar can gain market share from conversion of loose oil consumers. but they managed to spread awareness and widen its . CHENNAI-BASED CHOLAYIL GROUP “THE MEDIMIX SOAP” INTRODUCTION Medimix has a large user base among the SEC B and C segments and in rural areas in the 30-plus age group. They want to make it a mass. But this needs to be communicated to a younger audience and they have succeeded in doing that with the recent campaigns. The strategy is to upgrade the loose oil use to Cococare/Nihar by offering small pack forms. They are trying to widen its usage by bringing the SEC A segment into their fold. so it can reach more rural areas with its help and cover the market. • Nihar has a very strong distribution network. CONCLUSION In a very short period of time Nihar has been successful in gaining control over the urban market as well as the rural market. which are affordable.

Today they have 1. For instance. Coca-Cola is using their distribution network to distribute its soft drink concentrate brand Sunfill in the south.000-crore entity in the next five years. from the Chennai-based Cholayil group. is the maverick marketer that got its product and marketing mix just right.200 distributors across the country. their penetration in the south is as high as 80 per cent. they have further broadened this plank to include the whole family and they are saying the soap offers total health protection and addresses each of your individual needs. They have been very meticulous in their approach and they research all their ads by getting their agencies to test them on various focus groups before launching them. they used to spend nearly 25 per cent of the turnover on communication and marketing. Thereafter. It was then a single product company with one brand. Today it stands at Rs 200 crore. Medimix. Medimix is second only to Hindustan Lever's Hamam. today it is a national entity. they have always talked about holistic healthcare. When VS Pradeep took over the reins of this company in 1983. In fact. All other players are talking of a complete health platform today. Six years ago they headed west by tapping Maharashtra and two years ago they went completely national. THE RIGHT MIX MEDIMIX AYURVEDIC SOAP FROM THE CHENNAI-BASED CHOLAYIL GROUP. they widened the strategy by placing the soap on a value-for-money platform and said that this soap was a one-stop-cure for a range of health-related problems. But it would continue to follow a communication-led strategy. Their financial targets would be to build their organisation to a Rs 1. BUILDS ITS SUCCESS ON A MEDICAL PLATFORM Soap maker Medimix. Today it has 12 brands in their portfolio. they started off by talking about how the soap tackled the problem of prickly heat in summer as well as pimples and dandruff. Now this has settled to around 15 per cent. in terms of penetration alone. It was only a south-based company. it had a turnover of less than Rs 1 crore. they concentrated on each problem separately and communicated the benefits of the soap. Though they were small then. They widened our user base through our communication strategy. Thus. They started off by telling users of solutions to their specific problems. In Tamil Nadu alone. That is because its own network reaches only those places where soft drinks are retailed and not to those small kirana stores in the interiors where they reach.use in the early nineties when the cable and satellite television arena opened up. This will be done by growing in the categories they are present in and eventually by getting into new areas of growth. Now. The company's success .

Medimix soap was born.H. .000 cases per month and establish a supply beachhead to serve the northern market. Lux International skin care. it got an ORG rating of number nine. 500 as seed capital and lots of goodwill from the medical fraternity and chemists network. to cater exclusively to hotel bulk orders. a family lineage of ayurvedic vaidyans. Vice-President. distribution and marketing. packaging." says Manian. Most important. defied allopathic remedies and post retirement. There are five plants. His medical experience showed that chronic ailments.50. The story of Medimix is the evolution of a home-grown product. 50 crore four years ago to Rs. 9." says K. sales at the company. no sexy packaging. among soap categories on a national basis with minimal high decibel advertising. Sidhan had trained for his DMS at the Kilpauk Medical College and so ayurveda took a back-seat until his retirement. So. Sidhan (who traces his bloodline to the Cholayil Tarawad of Kerala. Nirma. "We priced it at 85 paise at the time and today it sells for Rs. one in Pondicherry. Manian. especially skin conditions.S. His work with Viparthy Oil (extract of wild ginger) and its efficacy in treating skin diseases yielded promising results. Sidhan launched the Medimix brand as a total ayurvedic skin-care soap with just Rs. Liril and Dettol. V. Besides. Sidhan's soap and its efficacy spread through actual-user endorsements. The soaps are made manually. all done by a family proprietary concern. Six plants of the Cholayil group make 1. from idea to research to manufacture. Now all he needed was a better vehicle to overcome the oil mess as an applicator. The firm was incorproated in the name of Sidhan's wife Sowbhagyam. In the south zone alone it is the sixth-highest seller with 1. two in Chennai. followers of saint Narayana Guru). who served as assistant medical officer with the Southern Railways. However. Pears. the company plants to set up a state-of-the-art unit in Goa. no glamorous film star endorsements and no compromise on its shape. Margo. each weighing 75 gm and 30 lakh cakes of the 125 gm variety.873 tonnes.is reminiscent of Nirma's in the west. Cinthol Fresh. the company has managed to developed a brand on its own terms. "Once production starts there we will make 1. Medimix at 2625.. without the use of power and even the cutting of the bars into cakes is done by hand-operated hydraulic cutters.P. he focused on finding cures through ayurveda. Jai. perfume or colour in order to bag bulk orders from hotels. one in Bangalore and one in Viilupuram. Its revenue rose metroically from Rs..S. one in Tada in Andhra Pradesh. It all started with Dr. Sidhan's soap was made with 18 herbs in a coconut oil base in the backyard of his Chennai Cuoolamedu house." According to the July-September 2001 ORG figures of volume in tonnes of the top 25 brands of soap on a national basis.3 tonnes is way above Mysore Sandal. 200 crore last year (2001) on sales of its ayurvedic soap.5 crore cakes of soap. She also doubled up as chief manufacture! In 1969.

and then spread through the hub format. 'But when S. The product is exported to Brazil and Italy. A firm decisions were taken that Medimix would aggressively market to over 3." While Medimix has done well. according to Manian. We conducted an ayurveda Congress in Hyderabad and got an impressive response." says Manian. Medimix was pitched in the villages first.30 crore. As Chandrika soap was following the monopoly of direct distribution. of which we have 3 per cent. where he believes Medimix can command loyal customers. When he was convinced. People are turning to ayurveda in a big way. as well. "From 1969 to 1990 growth was slow. Pradeep joined the company as managing director the firm took off in just four years." . The only alternative was Chandrika soap. Medimix decided to woo the stockiest and distributors and claims there are 25-year-old loyalties here. our best friend and local influencer of decisions so far as buying habits go. "While FMCG (fast moving consumer goods) products usually take off in the urban centres. no inducements. No offers.000 small hotels all over India. What's more. the company's brand extension. of the three lakh tonnes of soap sold. "Even in the Indian market. even in small towns. which had adopted a direct marketing approach. "We have plans for sandal soap. Today." It is Pradeep's idea to target hotels." he says. He accepted the merits of Medimix as an ayurvedic product. and a herbal Ziva shave cream.What is the strategy that worked for Medimix in a bubble-filled soap arena in which multinational companies such as Hindustan Lever Limited tower above the rest of the market? Manian unabashedly says that his group had to run all existing and considered marketing wisdom on its head." Medicated soap that is 100 per cent handmade is exempt from tax and rural consumers seem to be attracted to the medical qualities of the soap far more than they are to the same qualities in a cosmetic. ayurvedic soap comprises 7 percent. Viha. We went all over India only two years ago. In the past five years our adspend has grown to Rs. Manian is focusing on the Indian community in the Middle East.” "We have the research and knowledge capabilities to turn out more ayurvedic products and build on our current marketing strength. there is a 50 per cent untapped potential. He says that when a villager visits a city he asks for Medimix soap by name. so we supply at cost. no schemes. we even manage the inventory for them. his customers got convinced. Pradeep says he was pleasantly surprised to find that even foreign tourists to places such as Pondicherry were impressed by the medicated quality of Medimix. Hotels will never buy at the maximum retail price (MRP). "We targeted the village kirarmiuala. "We decided that we would not compromise on the packaging or appearance or the perfume or colour of the soap to gain entry into five-star hotels. Vrinda Tulisi Soap failed and is being relaunched with a changed perfume and translucent appearance. Meanwhile. We used to attend numerous village melas and talk to the people." says Manian.

Nirma also dared to break the "rule" that a packaged. THE 4PS OF MARKETING During that period the detergent powder category belonged almost entirely to Unilever's Surf. Planning: .6% in 1987.. distribution and organisational arrangements. Instead. approach not just in the product formulation and cost elements. and sales representatives in order carry it through a wide and complicated network.Medimix has proved that it is not always glitz and glamour that sells products. Surf grew in the market and became the benchmark in the eyes of both the housewife and competition (which was then limited to three wholly Indian manufacturers Godrej. Karsanbhai had his finger on the pulse of the people as he realized the need for a cheaper detergent. he sold the detergent for Rs.. but also in the all-important sales. Common opinion prevailed that a quality detergent. 6. a 25-year-old chemist manufactured detergents at his home in Ahmedabad. had to be a blue powder packed in a colourful carton. Price: Soon the brand began to sell like hotcakes and Nirma's market share grew from 0% in 1976 to 61. At the fag end of the sixties. one-fourth of the price of similar products then available. with no colour or design sophistication on the pack. packed in pouches sealed at the top. was cycled to retail outlets. NIRMA MODEST BEGINNING A brand that was to become a model for other budding entrepreneur had very humble beginnings. Since its very inception. 3. especially advertised brand needed the paraphernalia of branch offices. 1. It soon pushed HLL over the top. Tata and Swastik). Packaging: The attractive feature was to be the price-around 35% of Surf! 2. Hence. area managers. But Nirma was launched as a white coloured product. Launched in 1959. Nirma went in for what the West would have called a 'no-frills'. Karsanbhai Patel. a back-to-your-roots plank that espouses natural products appeals to the average Indian. The detergent named Nirma. after his daughter Nirupama.

" SETTING THE PACE By the early 1980s the burgeoning sales of Nirma reached a rate of growth that was nearly thrice the industry average. Understanding the economics and rules of the rural game. Nirma shattered the myth of "economy at the cost of quality. In the past few years while the industry had been growing at the rate of 15 per cent annually. In the early 1980's despite the fact that 70% of India's 750 million lived in rural areas. They said that Nirma would stay successful only as long as it remained within the confines of economy priced detergents. 4. Nirma reached into the very heart of India. It has built up a 30% market share in the premium detergent segment and also achieved greater than 20% share. you instantly know what it is talking about.most distributed brands. iske jhaag ne jaadu kar diya).With one of the most comprehensive and widespread distribution network. it pioneered rural marketing in India-another reason for its astounding success. As the first step it changed to a soaps & detergent company. in cakes and detergents turned out to be a repeat success story. Nirma's policy of manufacturing a low cost "value for money" product was also aided by the fact that Nirma operated in the smallscale sector. This stood up to Surf's Lalitaji's "samajhdari. Nirma's success in rural India also dispelled the myth that rural consumers are poor and do not have the disposable income to buy consumer goods. When you hear the all too-familiar tune Washing Powder Nirma. In the process. single move. Nirma's growth had been at least 30-35 per cent. big MNC's avoided them for the simple reason that it was difficult to penetrate. the bulk segments for Nirma sales. This helped it save an enormous amount of excise duty that multinationals had to pay on every kilo of detergent produced. This prevented MNCs from pulling down prices to a level attractive enough for the middle and lowermiddle classes. which still generates instant recall. Nirma's foray into the premium brand segment. The title 'Nirma Girl' going round and round on her feet and her white dress rising fluff too made for a strong mnemonic for the brand. in less than two years." SUCCESSFULLY DIVERSIFYING INTO PREMIUM BRANDS Once it had positioned itself as the largest selling detergent. Nirma identified that expensive advertising had no place in a market where the buyer was too price-sensitive. Nirma is today ranked among India's top 20 . . a fact borne by its jingle (Nirma Detergent tikia. In a swift. It was also one of the first major advertisers on the National Network. But that was not to be. Promotion: Nirma used radio. in the premium soaps market. posters. Nirma moved on to becoming an FMCG. banners and mobile vans among others as better media options.

17 billion-umbrella brand offering consumers a broad portfolio of products at multiple price points in the Detergents. Soaps & Personal Care market. was set up in minimum time and cost once again showing astute management skills. Unilever and P & G and now plans to export detergents to Russia and the Middle East. Nirma was a phosphate-free detergent. daily! ECO-FREINDLY AND ENVIRONMENTALLY SAFE At the very outset. Nirma sold more volumes than the others had in 25 years! In international markets too.2 million polythene bags and 6 million wrappers. Spent acid. in the form of Linear Akyl Benzene (LAB) and Soda ash. Nirma has left behind both.SWOT ANALYSIS Strengths: Strong Brand equity.000 trees can be found on a 125 acre campus. 4.000 tonnes of detergent and over 80. toothpaste and has also launched the Nirma brand of iodised salt. The Rs. It also has the largest soap manufacturing facility in the country. NIRMA-PROFITS AND POSITION (AT HOME AND ABROAD) Nirma's products over 800. through a wide network of 400 distributors and about a million retail outlets. Nirma offers more value to its buyers. Beauty Shampoo. A state-of-the-art packaging plant (another first in Gujarat) catering to a staggering 1. alone. A detergent by-product. Produces a range of industrial chemical products which primarily serve as raw material or intermediates for Soaps and Detergents business. MOVING FORWARD THROUGH BACKWARD INTEGRATION By manufacturing their own raw material.5 billion LAB manufacturing plant at Savli (the most modern in India and the second best in the world). such as Bangladesh. in just seven years of marketing soaps.2 in toilet soaps. but used as raw material in the SSP fertiliser unit. NIRMA . under a single roof. making it eco-friendly. 1. Market leadership in detergents and fabric wash and second largest player in toilet soaps. It ranks No. At the Mandali complex. but mainly.000 tonnes of toilet soaps annually are consumed by over 250 million customers. .00.Today Nirma has diversified into personal care market with Shikakai. is not released into the environment. Nirma is a Rs.

The result being one of the most comprehensive and widespread distribution . Weakness: High interest burden.Wide distribution network. from scratch.K. K. from the very beginning. Better Living! THE MAN BEHIND THE BRAND A man of exemplary vision and extraordinary courage. K. took it from strength to strength and. Mr. Mr. K. to India particularly in Toilet and Soap industry. but has also successfully moved on into newer products. Patel had his finger on the proverbial pulse of the rural India. Nirma. A marketing wizard. set up in 1979. detergents. a brand that has lived up to its catch line. in the process. Opportunities: Exports Acquisitions for strengthening its distribution tie-ups. Lacks global tie-ups and thus finding it hard to tap export markets. Better Products. Nirma as a brand has been able to etch a niche for itself in the face of intense MNC competition. Patel firmly believes that a person who has received a lot out of life needs to give something back. Threats: MNCs coming. One among the many contributions has been the Nirma Memorial Trust that takes care of deprived women in Gujarat. pioneered rural marketing in India. Less presence in premium segment. his marketing expertise forms the basis for case studies at Business Schools. He is the stuff that legends are made of. as he often says continues to be "the smile on the face of a satisfied buyer. The best reward of all for Mr. humanitarian and entrepreneur par excellence. Nirma's achievement is surely something about which an Indian can be proud of. Discover India and the Economic Review have all featured him at some time or the other. The Nirma Foundation. Patel. temples and social institutions. toothpastes and fabric whiteners. has donated millions.K. The Wall Street Journal. It has not only emerged victorious in its core competency. K. Emergence of small but strong regional players. colleges. within the state & outside. for schools. The Economist. Better Value. Entry into other categories like shampoos." He built the brand.

K. unfailingly. Good Day. The company has rationalised its product portfolio. in every sense of the term. Britannia Industries Ltd (BIL) plans to increase its manufacturing capacity through outsourced contract manufacturing and a greenfield plant in Uttaranchal to expand its share in the domestic biscuit and confectionery market. Nirma has arrived and has truly become a household name. Pure Magic. Fifty-Fifty. Housewives swear by it. and brand loyalty continues to increase.networks in the country. . In 1998. 1988. According to a survey conducted by ORG-MARG and A&M. BIL is a dominant player in the Indian biscuit industry. Mariegold. Currently. The Economist wrote: "Rarely does a small manufacturer in a developing country take on a big multinational and win. so that it can devote greater attention to key businesses.1 per cent of BIL's turnover. taking three-quarters of Hindustan Lever's potential market from it. TIGER. Mr. The company holds a 40 per cent market share in the overall organised biscuit market and has a capacity of 300." BRITANNIA INDIA LTD (BIL) INTRODUCTION Britannia India Ltd was incorporated in 1918 as Britannia Biscuit Company Ltd and currently the Groupe Danone (GD) of France (a global major in the food processing business) and the Nusli Wadia Group hold a 45. with major brands such as Tiger glucose. pruning the number of brands from 35 to 25. The company reported net sales of US$ 280 million in 2002-03. superior quality products and an enviable distribution network had helped BIL become the market leader with 40% share in the Indian biscuit market. Patel has done it in India. Britannia was the fifth most popular brand in India in 1997 and was the only brand belonging to the food category to figure in the top 10.000 tonne per annum. Bourbon etc. A strong brand name. the company moved into the mass market for biscuits introducing lowpriced varieties under the umbrella brand. K. retailers stock it. Commenting on his success the in September 10. the bakery product business accounts for 99.3 per cent equity stake in BIL through AIBH Ltd (a 50:50 joint venture). Britannia Industries Limited (BIL) has emerged as one of the largest food companies in India by 1999.

In fact. It has made the ongoing Kumbh Mela a major promotion and sales outlet. Apart from stockists and sub-stockists. there are as many 'middle income and above' households in the rural areas as there are in the urban areas. Research Manager. they ensure that their brand is stocked in large quantities. Its share of the glucose biscuit market has increased from 7% to 15%. A.The success of this brand has enabled Britannia expand its market share in the "Glucose" biscuit market from 10% to over 20%. Whenever they come to know of a major mela or haat. Mr Srivastava. ``Corporates who want accurate rural market research to be done need to be aware that the costs arehigh. It clearly paid dividend. with its two previous glucose biscuit brands -. larger areas under electrification and higher literacy levels. Bakemans-11% and others 13%. At the highest income level there are 2. the time taken is more and productivity is low.A WORLD OF OPPORTUNITY According to a National Council for Applied Economic Research (NCAER) study. RURAL MARKET . low cost distribution channels are one of the main challenges in rural marketing as extensive and sparsely populated areas have to be covered for the desired results. who has been involved in rural market research in North as well as South India.it had only 10 per cent of the market-share. Britannia Industries launched TIGER biscuits especially for the rural market. BRITANNIA PLANS TIGER VARIANT BRITANNIA Industries Ltd to planning add another flavour to its existing Tiger brand of products following its success story in the rural areas Earlier.6 million households in rural areas. But the single-minded effort of conceiving and promoting Tiger in the mass rural market has paid dividends. Nielsen. There are almost twice as many 'low middle income' households in rural areas as in the urban areas.Glucose D and Circus -. Parle-33%.3 million urban households as against 1. While growth rates in the midpriced and premium biscuits have flagged. Having grown at 25% to 30% in the past growth is fast slowing down. . Mr Tiwari spoke about the distribution channels that have brought results in the rural market.'' said Mr Diwakar Srivastava. Britannia has used traditional haats and melas to promote the Tiger brand. believed that penetration of products was higher in the South due to better road infrastructure. Today TIGER is a Rs.C. it is TIGER which has kept Britannia's biscuit business roaring. 200 crore brand with a market share of 24%. Market share: Britannia-43%.

which are put up by the company in the rural areas. The hoardings are mostly put up with complete information regarding the product. The campaign is still being carried out by the company and is one of the successful ones. The high nutritional value includes carbohydrates. proteins. West Bengal and Karnataka on the flagship "TIGER". It has become a social responsibility of the company. etc. Britannia has been able to derive more than 30% of their revenues from rural market. Pack of TIGER biscuits for which you will get a special "Britannia Lagaan Booklet". The TIGER brand currently has four variants including TIGER Cashew Badam. 2. Thus.5 erodes to ensure the success of this promotional offer. The children were selected from a village in Rajasthan. etc. MP. TIGER Coconut and now Chai Biscoot. HOARDINGS There are hoarding. Analysts say that there was an incremental 20% jump in sales when the scheme was on. There is also the possibility of being selected in the team that will play against the "Lagaan XI" team. THE BRITANNIA TIGER BACHAO AANDOLAN This was conducted by Britannia Industries with a view to reach its rural customer and also the target segment.TIGER has been positioned as a nutritional product with the new logo being "EAT HEALTHY THINK BETTER". This promotion was done in both the rural and urban areas. TIGER Protein. Britannia pumped in around Rs. The product has been launched in Maharashtra. 10000 early birds will win a prize. calcium. This took place in the year 1998 when the company undertook the responsibility of protecting the tiger community hand in hand with the forest department of Gujarat. The company's latest offering is "Britannia Tiger Chai Biscoot". thus it not only gave the company an increase in the sales but also gave the brand and the company recognition. THE BRITANNIA TIGER LAGAAN MATCH This was how the campaign took place: You needed to purchase a 100 gm. This was done by selecting 12 kids who were interested in the campaign. Britannia with its TIGER brand of biscuits with its low priced and convenient package products designed for the rural masses have been other pioneers in rural marketing. The information is given in the local language in order to let people know about the .

V. The various ad campaigns throughout the country are done by preparing a single advt but the language in which it features is according to the regional language of that state. A complete plant product. Britannia TIGER has been able to meet both the norms as mentioned above and has met with roaring success in rural areas. School children in rural areas are often given small packs at a confessional rate and at times they are distributed as free samples.product. An entry into the market was made only after studying the complete details and profile of the market and the result was a total success. T. P’s OF TIGER BISCUITS 1. packaging date. The important feature is the energetic tiger shown on the pack. As the definition goes. 5 The product is priced very low giving equal importance to quantity and price both of which are important features for the success of a product in the rural market. which emphasises good health. it is denoted by the green dot. which catches the eye and is an important feature to market a product in rural areas. The ads mainly focus on the children and emphasise a strong diet for a healthy mind and body. 10 100 gms Rs. The packaging also gives complete details of the price. Packing Price 250 gms Rs. ingredients and the nutritional value. 4 75 gms – coconut Rs. . The ads include famous personalities like Saurav Ganguly. Packaging: The products are packed in airtight plastic wrappers in an attractive bright red and yellow colour. 2. Pricing & packaging: The product is specially designed for the rural market and the economy class. This is very true in case of TIGER biscuits. comes your way with Britannia TIGER. the amount that the consumer is ready to pay for the service granted is what is price. The hoardings also have the mascot tiger which emphasises a strong healthy individual.

Place: The distribution network is very strong. “BRITANNIA LOOKS BEYOND BISCUITS” Bakery major Britannia Industries is planning to "go beyond biscuits'' Nusli Wadia. Mr. 100 crore in sales. BIL has a presence in biscuits. said. Chairman. She said exports and rural marketing were the two thrust areas and BIL. Wadis said the company's future growth could be either through acquisitions or through an organic growth. breads and cakes mainly with a 37 per cent market share. the main feature is thai Britannia TIGER also features the product name in Hindi. Its new manager Vinita Bali said BIL would ramp up its distribution network by tapping the malls. Thus a decline is possible in the near future resulting in decline of the company share of the whole. which penetrated the rural . think better". Positioning: Positioned mainly for the rural segment and with a new slogan "Eat healthy. PROBLEMS FACED BY TIGER Competition: From local players in many states who infringe with low quality products and similar packaging. Outsourced to Oasis Enterprises C & F Agent: At district level in various states of India Wholesaler: At taluka levels in various states Retailer: Retailers in villages are supplied by the wholesaler at the taluka level Final Customer 4. as a brand of premium quality with factors pertaining to health and needs of the consumer being the main factor. 3.Since the targut is the economy class and the rural segment. Manufacturing Plant Location: Andheri. She said Britannia now had six power brands each exceeding Rs. Saturation: Experts have said that TIGER has reached saturation in its PLC. it is easy for competitors to sneak in the market affecting the market share of TIGER. Since the rural customer depends mainly on the packaging available.

on the other hand. let's take a look at the distribution networks of three leading FMCG companies in India . Ultimately the winner would be the one with the required resources like time and money and also with the much needed innovative ideas to tap the rural markets. does not hold true in the case of a few fast moving consumer goods (FMCG) companies that have over the years been giving their rural operations a renewed thrust. Alongside. Colgate and Britannia now derive 35% and 30% respectively of their turnover from rural markets. Hindustan Lever.market riding the Tiger brand. Wadia said amid steep increases in prices of agroproducts. Colgate. A mention of rural India may conjure up an image of abject poverty in the minds of many people. Britannia. These three companies are market leaders in their core areas and much of their success has to do with the intricate marketing networks they have developed over the years. as would be expected. has the largest reach in terms of the markets serviced. was now planning to take its upmarket biscuits and tiffin cakes into rural areas.Hindustan Lever Limited. Colgate Palmolive and Britannia. There is huge potential and definitely there is lot of money in rural India but the smart thing would be to weigh in the roadblocks as carefully as possible.500 workforce. it had launched a strategy of forward buying of commodities through commodity exchanges as a hedging mechanism. bettering recipes and toning up logistics. . the main raw materials. however. A further VRS was proposed to trim the 2. Addressing shareholders. compared to the first two. it was also implementing 14 projects aimed at improving productivity. has a much smaller reach. This. The companies entering rural market must do so for strategic reasons and not for tactical gains as rural consumer is still a closed book and it is only through unwavering commitment that the companies can make a dent in the market. has adopted a concentrated approach by focusing on fewer markets. Why would these companies be tapping into the rural markets in the first place? First. Mr. CONCLUSION In the end it is certain that FMCG companies will have to really gain inroads in the rural markets in order to achieve double digit growth targets in future.

while Colgate has been attempting to woo the rural masses by offering low priced products in convenient packaging. Britannia on the other had launched Tiger to take on the existing economy brands in the market. apart from Hindustan Lever. for example. Britannia has rejuvenated its rural thrust by the launch of Tiger biscuits. extended its strategy of volume driven growth into rural markets and met with much success.Britannia and Colgate. are the only FMCG companies in India that derive over 30% of their revenues from rural markets. The success of these companies has as much to do with understanding the psyche of the rural family as it have to do with a rural distribution network. A typical rural family is a price conscious consumer and this is where the key to success lies. Hindustan Lever. .

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