A PROJECT REPORT ON

“FINDING OUT THE NEW BUSINESS OPPORTUNITY IN

RURAL AREA OF GOA FOR DABUR INDIA LTD .”
INTRODUCTION
For quite some time now, the lure of rural India has been
the subject
of animated discussion in corporate suites. And there is a
good reason too.
With urban markets getting saturated for several
categories of consumer
goods and with rising rural incomes, marketing executives
are fanning out
and discovering the strengths of the large rural markets as
they try to enlarge
their markets. Today, the idea has grown out of its infancy
and dominates
discussions in any corporate boardroom strategy session.
Rural India with its traditional perceptions has grown up
over the
years, not only in terms of income, but also in terms of
thinking. The rural
markets are growing at about two time faster pace than
urban markets, not
surprisingly, rural India accounts for 60 per cent of the
total national demand.
'Go Rural' is the slogan of marketing gurus after analyzing
the socioeconomic
changes in villages. The Rural population is nearly three
times the
urban, so that Rural consumers have become the prime
target market for
consumer durable and non-durable products, food,
construction, electrical,
electronics, automobiles, banks, insurance companies and
other sectors
besides hundred per cent of agri- input products such as
seeds, fertilizers,
pesticides and farm machinery. The Indian rural market
today accounts for
only about Rs 8 billion of the total ad pie of Rs 120 billion,
thus claiming 6.6
per cent of the total share. So clearly there seems to be a
long way ahead.
Although a lot is spoken about the immense potential of
the unexplored rural
market, advertisers and companies find it easier to vie for
a share of the
already divided urban pie.
The success of a brand in the Indian rural market is as
unpredictable
as rain. It has always been difficult to gauge the rural
market. Many brands,
which should have been successful, have failed miserably.
More often than
not, people attribute rural market success to luck.
8
Therefore, marketers need to understand the social
dynamics and
attitude variations within each village though nationally it
follows a consistent
pattern looking at the challenges and the opportunities
which rural markets
offer to the marketers it can be said that the future is very
promising for
those who can understand the dynamics of rural markets
and exploit them to
their best advantage. A radical change in attitudes of
marketers towards the
vibrant and burgeoning rural markets is called for, so they
can successfully
impress on the 230 million rural consumers spread over
approximately six
hundred thousand villages in rural India.
Companies face many challenges in tackling the rural
markets. Some of the
more critical being- understanding rural consumer,
reaching products &
services to remote rural location & communicating with
vastly heterogeneous
rural audiences. Sadly, not many companies have invested
sufficient effort &
money in research and nor have they spent enough time
in field to
understand rural consumers, their values, aspirations,
needs and usage
habits. Marketing is all about ‘getting to know your
customer ‘but having
largely ignored this cardinal principle, most corporate in
rural markets find
that success has eluded them.
Rural consumers are fundamentally different from their
urban
counterparts & different rural geographies display
considerable heterogeneity,
calling for rural-specific & region-specific strategies. In the
absence of
marketplaces, shopping complexes, & malls, marketers
will have to abandon
the known and the familiar and instead understand where
rural consumers
buy their rural goods & products.
To meet the wants & needs of selected customers, it is
important to
understand consumer behavior. It is this behavior that
guides & directs the
entire set of activities that constitutes the marketing
programme.Consumer
behavior in the rural markets is even more perplexing
because of a singular
lack of consistency in groups which are homogeneous in
parameters of
demographics- age, occupation, education & income.
9
CONCEPT
In recent years, rural markets have acquired significance,
as the overall
growth of the economy has resulted into substantial
increase in the
purchasing power of the rural communities.
On account of green revolution, the rural areas are
consuming a large
quantity of industrial and urban manufactured products.
In this context, a
special marketing strategy, namely, rural marketing has
emerged.
The census of India defines rural as any habitation with a
population
density of less than 400 per sq.km, where at least
75percent of the male
working population is engaged in agriculture & where
there exists no
municipality or board. Of the nearly 6.4 Lakh villages in
India, only 20000
villages have population more than 5000.Most companies
in the FMCG sector
has defined rural as any place with a population up to
20000.
The rural agricultural production and consumption process
plays a
Predominant role in developing the Indian economy. This
has designed a new
way for understanding a new process called Rural
Marketing. The concept of
rural marketing has to be distinguished from Agricultural
marketing. Rural
marketing basically deals with delivering manufactured or
processed inputs or
services to rural producers, the demand for which is
basically a derived
outcome. Rural marketing scientists also term it as
developmental marketing,
as the process of rural marketing involves an urban to
rural activity, which in
turn is characterized by various peculiarities in terms of
nature of market,
products and processes.
10
Rural marketing differs from agricultural or consumer
products
marketing in terms of the nature of transactions, which
includes participants,
products, modalities, norms and outcomes. The
participants in case of Rural
Marketing would also be different they include input
manufacturers, dealers,
farmers, Opinion makers, government agencies and
traders. The existing
approach to the rural markets has viewed the markets as
a homogeneous
one, but in Practice; there is a significant buyer and user
difference across
regions as well as within that requires a differential
treatment of the
marketing problems. These differences could be in terms
of the type of
farmers, type of crops and other agro-climatic conditions.
Rural marketing is an evolving concept, and as a part of
any economy
has untapped potential; marketers have realized the
opportunity recently.
Improvement in infrastructure and reach, promise a bright
future for those
intending to go rural. Rural consumers are keen on
branded goods nowadays,
so the market size for products and services seems to
have burgeoned. The
rural population has shown a trend of wanting to move
into a state of gradual
urbanization in terms of exposure, habits, lifestyles and
lastly, consumption
patterns of goods and services. There are dangers on
concentrating more on
the rural customers. Reducing the product features in
order to lower prices is
a dangerous game to play.
Gone are the days when rural consumer went to nearby
city to buy
’branded products and services’. The rural consumer is
growing and this is an
opportunity to grab the market share for all the global
players in the market
whether it is into Fast Moving Consumer Goods (FMCG)
sector or retail sector
(either insurance or banking or for that sake any other
sector).
The FMCG sector includes companies like Indian Tobacco
Corporation
(ITC), Godrej, Hindustan Lever Limited (HLL), Gujarat
Cooperative Milk
Marketing Federation (GCMMF-Amul) and Dabur India
Limited. All these have
shown a strong global presence in the rural sector and it
can be said that all
the FMCG companies should target the rural sector.
11
According to a survey conducted by Mckinsey in 2007,
rural India with
a population of 630 million (approximately) would become
bigger than total
consumer market in countries such as South Korea or
Canada in another 20
years and it will grow at least four times from its existing
size.

WHY RURAL MARKET?

The Indian rural market has a huge demand base and
offers great
opportunities to marketers. Two-thirds of Indian
consumers live in rural areas
and almost half of the national income is generated here.
The reasons for heading into the rural areas are fairly
clear. The urban
consumer durable market for products like color TVs,
washing machines,
refrigerators and air conditioners is growing annually at
between 7 per cent
and 10 per cent.
The rural market is zooming ahead at around 25 per cent
annually.
"The rural market is growing faster than urban India
now," says Venugopal
Dhoot, chairman of the Rs 989 - crore (Rs billion)
Videocon Appliances. "The
urban market is a replacement and up gradation market
today," adds
Samsung's director, marketing, Ravinder Zutshi.

WHAT RURAL MARKET BUYS?

Rural India buys small packs, as they are perceived as
value for
money. There is brand stickiness, where a consumer buys
a brand out of
habit and not really by choice. Brands rarely fight for
market share; they just
have to be visible in the right place. Even expensive
brands, such as Close-
Up, Marie biscuits and Clinic shampoo are doing well
because of deep
distribution, many brands are doing well without much
advertising support —
Ghadi, a big detergent brand in North India, is an
example.
REASONS OF IMPROVEMENT OF BUSINESS IN
RURAL AREA
Socio-economic changes (lifestyle, habits and tastes,
economic status)
Literacy level (25% before independence – more than
65% in 2001)
Infrastructure facilities (roads, electricity, media)
Increase in income
Increase in expectations
MART, the specialist rural marketing and rural
development
consultancy has found that 53 per cent of FMCG sales lie
in the rural areas, as
do 59 per cent of consumer durable sales, said its head
Pradeep Kashyap at
the seminar. Of two million BSNL mobile connections, 50
per cent went to
small towns and villages, of 20 million Rediffmail
subscriptions, 60 per cent
came from small towns, so did half the transactions on
Rediff's shopping site.

SPECIAL FEATURES OF RURAL MARKET

Unlike urban markets, rural markets are difficult to
predict and possess
special characteristics. The featured population is
predominantly
illiterate, have low income, characterized by irregular
income, lack of
monthly income and flow of income fluctuating with the
monsoon
winds.
Rural markets face the critical issues of Distribution,
Understanding the
rural consumer, Communication and Poor infrastructure.
The marketer
has to strengthen the distribution and pricing strategies.
The rural
consumer expects value for money and owing to has
unsteady and
meager status of weekly income; increasing the household
income and
improving distribution are the viable strategies that have
to be adapted
to tap the immense potential of the market.
Media reach is a strong reason for the penetration of
goods like
cosmetics, mobile phones, etc., which are only used by
the urban
people. Increasing awareness and knowledge on different
products and
brands accelerate the demand. The rural audience are
however critical
of glamorous ads on TV, and depend on the opinion
leaders who
introduce the product by using it and recommending it.
13
Opinion leaders play a key role in popularizing
products and influence
in rural market. Nowadays educated youth of rural also
influences the
rural consumers. Rural consumers are influenced by the
life style they
watch on television sets. Their less exposure to outside
world makes
them innocent and fascinated to novelties. The reach of
mass
television media, especially television has influenced the
buying
behaviour greatly.

CREATING BRANDS FOR RURAL INDIA

Rural markets are delicately powerful. Certain adaptations
are required
to cater to the rural masses; they have unique expectation
and warrant
changes in all four parameters of product, price,
promotion and distribution.
A lot is already emphasized on adapting the product and
price in terms
of packaging, flavouring, etc and in sachets, priced to suit
the economic
status of the rural India in sizes like Rs.5 packs and Re.1
packs that are
perceived to be of value for money. This is a typical
penetration strategy that
promises to convert the first time customers to repeated
customers.
The promotion strategies and distribution strategies are of
paramount
importance. Ad makers have learnt to leverage the
benefits of improved
infrastructure and media reach. The television
advertisements to lure rural
masses, and they are sure it reaches the target audience,
because majority of
rural India possesses and is glued to TV sets!
Distributing small and medium sized packets through poor
roads, over
long distances, into deep pockets of rural India and
getting the stockiest to
trust the mobility is a Herculean task. Giving the
confidence those
advertisements will support. Sales force is being trained to
win the confidence
of opinion leaders. Opinion leaders play an important role
in popularizing the
brand. They sometimes play the role of entry barriers for
new products.
14
The method of promotion needs to be tailored to suit the
expectations
of the market. Techniques that have proved to be
successful are Van
campaigns, edutainment films, generating word of mouth
publicity through
opinion leaders, colourful wall paintings. The Wide reach
of television has
exposed the otherwise conservative audience to
westernization. Panchayat
televisions in Tamilnadu carries message that are well
received and contribute
to community development.
Dynamics of rural markets differ from other market types,
and similarly
rural marketing strategies are also significantly different
from the marketing
strategies aimed at an urban or industrial consumer. This,
along with several
other related issues, have been subject matter of intense
discussions and
debate in countries like India and China and focus of even
international
symposia organized in these countries.
Rural markets and rural marketing involve a number of
strategies,
which include:
Client and location specific promotion
Joint or cooperative promotion
Bundling of inputs
Partnership for sustainability
Client and Location specific promotion involves a strategy
designed to
be suitable to the location and the client. Joint or co-
operative promotion
strategy involves participation between the marketing
agencies and the client.
'Bundling of inputs' denote a marketing strategy, in which
several related
items are sold to the target client, including arrangements
of credit, after-sale
service, and so on. Media, both traditional as well as the
modern media, is
used as a marketing strategy to attract rural customers.
Partnership for sustainability involves laying and building a
foundation for
continuous and long lasting relationship. Innovative media
can be used to
reach the rural customers. Radio and television are the
conventional media
that are reaching the rural audience effectively. But horse
cart, bullock cart
and wall writing are the other media, which can carry the
message effectively
to the rural customers.

STRATEGY
Dynamics of rural markets differ from other market types,
and similarly
rural marketing strategies are also significantly different
from the marketing
strategies aimed at an urban or industrial consumer. This,
along with several
other related issues, have been subject matter of intense
discussions and
debate in countries like India and China and focus of even
international
symposia organized in these countries.

Rural markets and rural marketing involve a

number of strategies,
which include:-
Client and location specific promotion
Joint or cooperative promotion..
Bundling of inputs
Management of demand
Developmental marketing
Unique selling proposition (USP)
Extension services
Business ethics
Partnership for sustainability
Client and Location specific promotion involves a
strategy designed to
be suitable to the location and the client.
Joint or co-operative promotion strategy involves
participation between
the marketing agencies and the client.
Bundling of inputs denote a marketing strategy, in
which several related
items are sold to the target client, including arrangements
of credit, after-saleservice, and so on.
Management of demand involve continuous market
research of buyer’s
needs and problems at various levels so that continuous
improvements and
innovations can be undertaken for a sustainable market
performance.
Developmental marketing refer to taking up marketing
programmers
keeping the development objective in mind and using
various managerial and
other inputs of marketing to achieve these objectives.
Media both traditional as well as the modern media, is
used as a marketing
strategy.
Unique Selling Propositions (USP) involves presenting
a theme with the
product to attract the client to buy that particular product.
For examples,
some of famous Indian Farm equipment manufacturers
have coined catchy
themes, which they display along with the products, to
attract the target
client that is the farmers. English version of some of such
themes would read
like:
The heartbeats of rural India
With new technique for a life time of company
For the sake of progress and prosperity
Extension Services denote, in short, a system of
attending to the missing
links and providing the required know-how.
Ethics in Business. Form, as usual, an important plank
for rural markets
and rural marketing.
Partnership for sustainability involves laying and
building a foundation for
continuous and long lasting relationship.

WHY DIFFERENT STRATEGIES?

Rural markets, as part of any economy, have untapped
potential.
There are several difficulties confronting the effort to fully
explore rural
markets. The concept of rural markets in India is still in
evolving shape, and
the sector poses a variety of challenges. Distribution costs
and non-availability
of retail outlets are major problems faced by the
marketers.
17
The success of a brand in the Indian rural market is as
unpredictable
as rain. Many brands, which should have been successful,
have failed
miserably. This is because most firms try to extend
marketing plans that they
use in urban areas to the rural markets. The unique
consumption patterns,
tastes, and needs of the rural consumers should be
analyzed at the product
planning stage so that they match the needs of the rural
people.
Therefore, marketers need to understand the social
dynamics and
attitude variations within each village though nationally it
follows a consistent
pattern. The main problems in rural marketing are: -
Understanding the Rural Consumer
Poor Infrastructure
Physical Distribution
Channel Management
Promotion and Marketing Communication
Dynamics of rural markets differ from other market types,
and
similarly, rural marketing strategies are also significantly
different from the
marketing strategies aimed at an urban or industrial
consumer
Examples
HLL started 'Operation Bharat' to tap the rural
markets. Under this
operation, it passed out low-priced sample packets of its
toothpaste,
fairness cream, Clinic plus shampoo, and Ponds cream to
twenty
million households.
ITC is setting up e-Choupals, which offers the farmers
all the
information, products and services they need to enhance
farm
productivity, improve farm-gate price realization and cut
transaction
costs. Farmers can access latest local and global
information on
weather, scientific farming practices as well as market
prices at the
village itself through this web portal - all in Hindi. It also
facilitates
supply of high quality farm inputs as well as purchase of
commodities
at their doorstep.
18
BPCL introduced Rural Marketing Vehicle (RMV) as
their strategy for
rural marketing. It moves from village to village and fills
cylinders on
the spot for the rural customers. BPCL considered low-
income of rural
population, and therefore introduced a smaller size
cylinder to reduce
both the initial deposit cost as well as the recurring refill
cost.
STRATEGIES TO BE FOLLOWED
Marketing Strategy
Marketers need to understand the psyche of the rural
consumers and then act accordingly. Rural marketing
involves more
intensive personal selling efforts compared to urban
marketing. Firms
should refrain from designing goods for the urban markets
and
subsequently pushing them in the rural areas. To
effectively tap the
rural market, a brand must associate it with the same
things the rural
folks do. This can be done by utilizing the various rural
folk media to
reach them in their own language and in large numbers so
that the
brand can be associated with the myriad rituals,
celebrations, festivals
and other activities where they assemble.
Distribution Strategy
One of the ways could be using company delivery van
which can
serve two purposes - it can take the products to the
customers in every
nook and corner of the market, and it also enables the
firm to establish
direct contact with them, and thereby facilitate sales
promotion.
Promotional strategy-
Annual "meals" organized are quite popular and provide a
very
good platform for distribution because people visit them to
make
several purchases.
19
According to the Indian Market Research Bureau, around
8000 such
meals are held in rural India every year. Rural markets
have the practice of
fixing specific days in a week as Market Days (often called
‘Haats’) when
exchange of goods and services are carried out. This is
another potential low
cost distribution channel available to the marketers. Also,
every region
consisting of several villages is generally served by one
satellite town (termed
as "Mandis" or Agri-markets) where people prefer to go to
buy their durable
commodities. If marketing managers use these feeder
towns, they will easily
be able to cover a large section of the rural population.
Firms must be very careful in choosing the vehicle to be
usedfor
communication. Only 16% of the rural population has
access to a vernacular
newspaper. So, the audio visuals must be planned to
convey a right message
to the rural folk. The rich, traditional media forms like folk
dances, puppet
shows, etc., with which the rural consumers are familiar
and comfortable, can
be used for high impact product campaigns.

WHAT MAKES RURAL MARKET ATTRACTIVE?

Rural market has following attributes and the following
facts substantiate this
742 million people
Estimated annual size of the rural market -
FMCG Rs. 65,000 Crore
Durables Rs. 5,000 Crore
Agri-Inputs (including tractors) Rs. 45,000 Crore
2 / 4 Wheelers Rs. 8,000 Crore
20
In 2001-02, LIC sold 55% of its policies in rural India.
Of two million BSNL mobile connections, 50% are in
small
towns / villages.
Durables Urban Rural Total (% of Rural HH)
CTV 30.4 4.8 12.1
Refrigerator 33.5 3.5 12.0
FMCGs Urban Rural Total (% of Rural HH)
Shampoo 66.3 35.2 44.2
Toothpaste 82.2 44.9 55.6
21
Marketers can make effective use of the large
available
infrastructure -
Post Offices 1,38,000
Haats (periodic markets) 42,000
Melas (exhibitions) 25,000
Mandis (agri markets) 7,000
Public Distribution Shops 3,80,000
Bank Branches 32,000
Proliferation of large format Rural Retail Stores, which
have been successful also -
DSCL Haryali Stores
M & M Shubh Labh Stores
TATA / Rallis Kisan Kendras
Escorts Rural Stores
Warnabazaar, Maharashtra (Annual Sale Rs. 40 crore)
Of the 6.0 lakh villages, 5.22 lakh have a Village
Public Telephone (VPT).
41 million Kisan Credit Cards have been issued
(against 22 million creditplus-
debit cards in urban), with cumulative credit of Rs. 977
billion
resulting in tremendous liquidity.
Of the 20 million Rediffmail sign-ups, 60% are from
small towns. 50% of
transactions from these towns are on Rediff online
shopping site.
42 million rural households (HHs) are availing banking
services in
comparison to 27 million urban HHs.
Investment in formal savings instruments is 6.6
million HHs in rural and
6.7 million HHs in urban.

RURAL CONSUMER INSIGHTS

Rural India buys -
Products more often (mostly weekly).
Buys small packs, low unit price more important than
economy.
In rural India, brands rarely fight with each other;
they just have to be
present at the right place.
Many brands are building strong rural base without
much advertising
support-
Chik shampoo, second largest shampoo brand.
Ghadi detergent, third largest brand.
Fewer brand choices in rural areas; number of FMCG
brand in rural is half
that of urban.
Buy value for money not cheap products

OPPORTUNITIES
Infrastructure is improving rapidly -
In 50 years only, 40% villages have been connected by
road, in
next 10 years another 30% would be connected.
More than 90% villages are electrified, though only 44%
rural
homes have electric connections.
Rural telephone density has gone up by 300% in the last
10
years; every 1000+ pop is connected by STD.
23
Social indicators have improved a lot between 1981
and 2001 -
Number of "pucca" houses doubled from 22% to 41%
and
"kuccha" houses halved (41% to 23%).
Percentage of BPL families declined from 46% to 27%.
Rural literacy level improved from 36% to 59%.
Low penetration rates in rural areas, so there are
many marketing
opportunities .

FACTORS AFFECTING RURAL MARKETING

Reach
For a product to reach six lakh villages, one need to know
that 700
million villages are spread over 3.2 million sq. metre of
area. The road
conditions are usually poor. It is, therefore, important for
the marketer to
have a good distribution system.
Pricing
Pricing of... a product needs to be low and affordable. For
example,
FMCGs have creams and soaps@ Rs 5, hair oil and
shampoo sachets @ Re 1
and small Coke @ Rs 5. To develop a product to suit the
rural scenario, the
focus should be on items of necessity.

Product Awareness
This is very important for the marketer to induce a trial.
Rural
consumers visit high congregation areas like haats/fairs
etc. where product
awareness can be created. Therefore, the right product
needs to reach the
right person at the right time and place.

Hurdles
The rural population is spread over a large area where
reach is
expensive and the mass is heterogeneous. The spending
power of rural
population fluctuates with the agri-yield. Hence, demand
is not consistent.
Besides this, low level of product exposure, poor standard
of living, spurious
products with high margins for retailers and lack of
infrastructure leads to low
penetration.
Strategies
The base work should be extremely clear — distribution,
visibility and
the right communication can make a product. One needs
to educate the
target audience and pick up self-help groups/villages
between
entrepreneurs/literate unemployed youth for sustainable
distribution channel.

Consumer Behaviour
Over the years, the attitude and lifestyle of rural folk has
changed due
exposure through TV and awareness through an increase
in literacy level.
Also, consumers are becoming brand loyal.
With the constant invasion of corporates, the rural
customer has
started taking in “what was educated to him”, the media,
newspaper, cable,
IT developments, mobiles have lead to increased
awareness. Besides, due to
increase in purchasing power and literacy level of a
section, the rural
consumer has become more receptive. S/he is highly
influenced by “word of
mouth” and has started looking at value for money.
With the changing market scenario, introduction of new
products,
increasing awareness amongst customers and the overall
development in
rural sector, required a change in corporate marketing
strategies, and this
was done. The sales team was asked to be more
aggressive. With distribution
in place, communication was simpler and had a regional
flavour.
25
The strategy to tap the rural market has to be more
customized,
simpler and based on one-to-one communication. One has
to reach the
doorstep of the rural consumer to educate him on brands.
It is said that
brand loyalty is higher in the rural customer. S/he might
not be able to read
but would ask Parle ka glucose biscuit dena or would
recognize the pack by...

SIGNIFICANCE
In recent years, rural markets have acquired significance
in countries
like China and India, as the overall growth of the economy
has resulted into
substantial increase in the purchasing power of the rural
communities. On
account of the green revolution in India, the rural areas
are consuming a
large quantity of industrial and urban manufactured
products. In this context,
a special marketing strategy, namely, rural marketing has
taken shape.
Sometimes, rural marketing is confused with agricultural
marketing – the later
denotes marketing of produce of the rural areas to the
urban consumers or
industrial consumers, whereas rural marketing involves
delivering
manufactured or processed inputs or services to rural
producers or
consumers. Also, when we consider the scenario of India
and China, there is
a picture that comes out, huge market for the developed
products as well as
the labor support. This has led to the change in the
mindset of the marketers
to move to these parts of the world.
Also rural market is getting an importance because of the
saturation of
the urban market. As due to the competition in the urban
market, the market
is more or as saturated as most of the capacity of the
purchasers has been
targeted by the marketers. So the marketers are looking
for extending their
product categories to an unexplored market i.e. the rural
market. This has
also led to the CSR activities being done by the corporate
to help the poor
people attain some wealth to spend on their product
categories.
26
Here we can think of HLL (now, HUL) initiatives in the
rural India. One
of such project is the Project Shakti, which is not only
helping their company
attain some revenue but also helping the poor women of
the village to attain
some money which is surely going to increase their
purchasing power. Also
this will increase their brand loyalty as well as recognition
in that area.
Similarly we can think of the ITC E-Chaupal, which is
helping the poor farmers
get all the information about the weather as well as the
market price of the
food grains they are producing. In other view these
activities are also helping
the companies increase their brand value. So as it is given
above the
significance of the rural market has increased due to the
saturation of the
urban market as well as in such conditions the company
which will lead the
way will be benefited as shown by the success of HUL and
ITC initiatives.
Conclusion
Thus, looking at the challenges and the opportunities,
which rural
markets offer to the marketers, it can be said that the
future is very promising
for those who can understand the dynamics of rural
markets and exploit them
to their best advantage. A radical change in attitudes of
marketers towards
the vibrant and burgeoning rural markets is called for, so
they can
successfully impress on the 230 million rural consumers
spread over
approximately six hundred thousand villages in rural India.
 COMPANY PROFILE
The evolution of Dabur is quite interesting and its root
takes us back to the 19th century where it all started in
Bengal by a visionary
by name Dr. S.K Burman, a physician by profession. His
mission was to
provide effective and affordable cure for ordinary people
in far-flung villages.
With missionary zeal and fervour, Dr. Burman undertook
the task of preparing
natural cures for the killer diseases of those days, like
cholera, malaria and
plague. Soon the news of his medicines travelled, and he
came to be known
as the trusted 'Daktar' or Doctor who came up with
effective cures. And that
is how his venture Dabur got its name - derived from the
Devanagri rendition
of Daktar Burman. The name is formed by joining the first
half of Daktar and
Burman.
28
Largest Herbal & Natural Portfolio
4000 Distributors in India
Retail Reach 2,500,000
5 Umbrella Brands
350+ products
4000 employees15 Manufacturing Plants
JOURNEY SO FAR . . .

1884 The birth of Dabur

1972 The company shifts base to Delhi from Kolkata
1986 Registered as Public Limited Company
1994 Listed on the Bombay Stock Exchange
1998 Professional team inducted to run the company
2000 Crosses Rs 1000 Crore Turnover
2003 Pharmaceutical Business de-merged to focus on
core FMCG
2004 Profit exceeds Rs.100 Crore
2005 Acquires Balara strengthening Oral care &
provided entry into Home care segment
2006 Dabur Figures in Top 10 Great Places To Work
2007 Dabur ranked among 'Asia's best under a Billion'
enterprises by Forbes
2008 Acquired Fem Care Pharma entering the
mainstream Skin care segment
2009 Strong growth momentum continued in spite of
general economic downturn

AWARDS & ACHIEVEMENTS (2008-09)

Dabur India Ltd placed in the Dabur ranked 28th in ET-
NDTV profit Business
List of “20 Stocks You Must Brand Equity Most Trusted
Leadership awards2008
own”, Brands 2009 list for FMCG
Prepared by Forbes India
Dabur At-a-Glance
Dabur India Limited has marked its presence with
significant achievements and today commands a market
leadership status.
Our story of success is based on dedication to nature,
corporate and process
hygiene, dynamic leadership and commitment to our
partners and
stakeholders. The results of our policies and initiatives
speak for themselves.
Leading consumer goods company in India with a
turnover of Rs.
2834.11 Crore (FY09)

3 major strategic business units

(SBU) - Consumer Care Division

(CCD), Consumer Health Division (CHD) and
InternationalBusiness Division (IBD)

3 Subsidiary Group companies - Dabur International,

Fem Care
Pharma and newu and 8 step down subsidiaries: Dabur
Nepal Pvt
Ltd (Nepal), Dabur Egypt Ltd (Egypt), Asian
Consumer Care
(Bangladesh), Asian Consumer Care (Pakistan),
African
Consumer Care (Nigeria), Naturelle LLC (Ras Al
Khaimah-UAE),
Weikfield International (UAE) and Jaquline Inc.
(USA).
17 ultra-modern manufacturing units spread around
the globe
Products marketed in over 60 countries
Wide and deep market penetration with 50 C&F agents,
more than
5000 distributors and over 2.8 million retail outlets all
over India

a. Dabur’s Business Structure

Dabur operates through three focused Strategic Business
Units:

Consumer Care Division

Consumer Care Division (CCD) addresses consumer needs
across the entire
FMCG spectrum through four distinct business portfolios
of
Personal Care, Health Care, Home Care & Foods.
Master brands:
Dabur - Ayurvedic healthcare products
Vatika - Premium hair care
Hajmola - Tasty digestives
Real - Fruit juices & beverages
Fem - Fairness bleaches & skin care products
9 Billion-Rupee brands: Dabur Amla, Dabur
Chyawanprash, Vatika, Réal, Dabur Red
Toothpaste, Dabur Lal Dant Manjan, Babool,
Hajmola and Dabur Honey
Strategic positioning of Honey as food product,
leading to market leadership (over 75%) in branded
honey market
Dabur Chyawanprash the largest selling Ayurvedic
medicine with over 65% market share.
Vatika Shampoo has been the fastest selling
shampoo brand in India for three years in a
row
Hajmola tablets in command with 60% market share
of digestive tablets category.
31
Consumer Health Division
Consumer Health Division (CHD) offers a range of
classical Ayurvedic
medicines and Ayurvedic OTC products that deliver the
age-old benefits of
Ayurveda in modern ready-to-use formats
Has more than 300 products sold through
prescriptions as well as over the counter
Major categories in traditional formulations include:
- Asav Arishtas
- Ras Rasayanas
- Churnas
- Medicated Oils
Proprietary Ayurvedic medicines developed by Dabur
include:
- Nature Care Isabgol
- Madhuvaani
- Trifgol
Division also works for promotion of Ayurveda
through organized community of traditional
practitioners and developing fresh batches of
students

International Business Division

International Business Division (IBD) caters to the
health and personal
care needs of customers across different international
markets, spanning the
Middle East, North & West Africa, EU and the US with its
brands Dabur &
Vatika
Growing at a CAGR of 33% in the last 6 years and
contributes to about 20% of total sales
Leveraging the 'Natural' preference among local
consumers to increase share in personal care
categories
Focus markets:
- GCC
- Egypt
- Nigeria
- Bangladesh
- Nepal
- US
High level of localization of manufacturing and sales
& marketing
Customer Health Division
CHD STRUCTUREOTC
(57%)
Generics
Branded Products
ETHICAL (43%)
Tonics
Classical
Branded Ethical
ı
CHD registered strong 19% growth during FY09
Investments in brand building and new OTC launch driving
growth
Janma Ghunti, Hingoli, Sat Isabgol & Gripe
Water transferred to CHD from CCD for greater focus.

Shampoos
Market Size- 21 Billion
Dabur Brands- 1.3 Billion
33
Shampoos continued its strong performance recording
31.5% growth
for FY09.
Vatika continues to be fastest growing shampoo brand in
the country
with volume growth of 37.5% for FY09 vs. 14.4% for the
category as
per AC Neilsen April-March, 09 update.
The Vatika range gained market share which went up to
6.8% vs.
5.7% in the previous year.

Digestives
Market Size-5 Billion
Dabur Brands- 1.5 Billion
The Digestives category witnessed a growth of 11.8%
during
FY09 resulting from an excellent growth of 31% witnessed
in
Q4FY09.
New variants and innovative consumer activations added
to the
momentum.
Pudin Hara brand has been shifted to CHD for increased
focus
on distribution through chemists Q4FY09 onwards.
34
FOODS
Market Size-5 Billion
Dabur Brands- 2.5 Billion
Foods category growth of 14.4% for FY09.
Brand growth in FY09
Real Fruit Juices: 14.9%
Homemade: 19.6%
Real franchise growing at a healthy rate with Ad
campaigns
establishing its superiority over competition.
Activ Brand received a boost in Q4 with the ‘No Added
Sugar’
campaign.
Consumer Care Division
Market Size-33 Billion
Dabur Brands- 5.6 Billion
Dabur Amla Hair Oil witnessed one of the strongest years
reporting
20.4% growth during the year driven by on ground
activations and
marketing support.
Vatika Hair Oil had a resurgent year with a growth of
12.2% during
FY09 backed by a brand re-launch, new packaging and
communication
Anmol Coconut Oil recorded a growth of 42.2% for FY09
with gains in
key markets.
Dabur Mustard Amla Hair oil grew at 22.7% followed by
re-staging
under the Dabur brand

b. Manufacturing Facilities in
India
PERSONAL INSIGHT
As far as our project is concerned we are assigned to find
the business
opportunity in the rural Orissa. So we’ve to study &
analyse the distribution
channel through which the rural consumers & retailers can
avail the huge
product line of Dabur India Ltd.
Chains of intermediaries, each passing the product down
the chain to
the next organization, before it finally reaches the
consumer or end-user. This
process is known as the 'distribution chain' or the
'channel.' Each of the
elements in these chains will have their own specific
needs, which the
producer must take into account, along with those of the
all-important enduser.
Channels
A number of alternate 'channels' of distribution may be
available:
Distributor, who sells to retailers
Retailer (also called dealer or reseller), who sells to end
customers
Advertisement typically used for consumption goods

Channel membership
1. Intensive distribution - Where the majority of resellers
stock the
'product' (with convenience products, for example, and
particularly the
brand leaders in consumer goods markets) price
competition may be
evident.
2. Selective distribution - This is the normal pattern (in
both consumer
and industrial markets) where 'suitable' resellers stock the
product.
3. Exclusive distribution - Only specially selected resellers
or authorized
dealers (typically only one per geographical area) are
allowed to sell
the 'product'.

Channel motivation
It is difficult enough to motivate direct employees to
provide the necessary sales and service support.
Motivating the owners and employees of the independent
organizations in a distribution chain requires even greater
effort.There are many devices for achieving such
motivation. Perhaps the
most usual is `incentive': the supplier offers a better
margin, to tempt the
owners in the channel to push the product rather than its
competitors; or a
competition is offered to the distributors' sales personnel,
so that they are
tempted to push the product
Monitoring and managing channels
In much the same way that the organization's own sales
and
distribution activities need to be monitored and managed,
so will those of the
distribution chain.
In practice, many organizations use a mix of different
channels; in
particular, they may complement a direct sales force,
calling on the larger
accounts, with agents, covering the smaller customers and
prospects.

Bases on which the datas are analyzed

I’ve collected numerous datas regarding-
Sales promotion
Consumer buying behaviour
Availability of various brands
Accessibility of the distribution sources to the distant
rural population
Mode of transport the rural consumers opting for
purchasing the
products.
38
C. DISTRIBUTION NETWORK USED BY DABUR
INDIA LTD.
Dabur is using four branches distribution network to reach
its target section.
1.1 URBAN DISTRIBUTION CHANNEL [STOCKIEST]
This is divided into two parts, viz: above 5 lakhs of
population and
between 1 to 5 lakhs of population. This segment is totally
covered by the
direct stokist. In the segment of above 5 lakhs there are
three ways of
covering the market, viz: Beat wise, Line wise & Channel
wise distribution
while in the segment of 1 to 5 lakhs of population there
are two ways, viz:
Channel wise & Beat wise.
Factory D.C.
Stockiest Super stockiest
Wholesaler
Substockiest
Semi-wholesaler
Retail Trade Retail Trade
Institution
Modern Trade
Shoppers & Consumer
39
CHANNEL WISE DISTRIBUTION
Here the total product is divided into different channels
like, Health
care product, Personal care products, Home products &
etc.
LINE WISE DISTRIBUTION
Here the total product is divided into different lines like,
hair care, body
wash, coconut oil, nutrition food and etc.
BEAT WISE DISTRIBUTION
Here total market is divided into different areas where the
total
products are served to all the outlets exist in that area.
1.2 RURAL DISTRIBUTION NETWORK [SUPER
STOCKIEST]
Under rural distribution network, the whole market is
served by three
parties, viz: Substokist, Rural Direct Stockiest and by the
Dabur network itself.
The Substokist get the required product through the super
stockist which
again covers the Dabur itself segment. The Rural Direct
Stock segment is
covered by the direct stockiest who serves the whole
urban distribution. The
Substokist uses the Sub van mode of transportation while
the Rural direct
stockiest uses the Direct Van to cover his area. (See the
picture above).
Dabur is continuously monitoring its channel members to
ensure the speed
and accuracy in its service to its ultimate customers. The
key customers for
Dabur are Whole seller, Small Outlets and the Chemist.
Dabur has
continuously focusing on these key customers and tried to
satisfy them over
the years to sustain in this industry.
1.3 INSTITUTIONAL
1.4 MODERN TRADE
d. Sustainability Report
At Dabur, environment and nature is the
lifeline of our business.
With a portfolio of Ayurveda and nature-based
products, conservation of
nature & natural resources is deep rooted in
our organizational DNA,
and in every aspect of our ever-growing business.
We, at Dabur, have not merely incorporated the
concept of sustainability
into the core of our business but have, in fact,
expanded it to encompass our
aspirations and responsibilities to the society and
to the environment. It is
this concept that inspires us to optimize our
business performance to tackle
the new and growing challenges of environment
and technology.
It is a concept on which we aspire to build an
organization that will
continue to increase value for all our stakeholders
for generations to come,
through intensive focus on Conservation of
Energy and Technology
Absorption, along with Health, Safety and
Environment Protection.

Conservation of Energy
Dabur has been undertaking a host of energy
conservation measures.
Successful implementation of various energy
conservation projects have resulted
in a 13.8% reduction in the Company’s energy
bill in the 2008-09 fiscal
alone. What was noteworthy was the fact that this
reduction has come despite an
8-9% volume increase in manufacturing, and an
average 11.7% increase in cost
of key input fuels.
The host of measures – key among them being use
of bio-fuels in boilers,
generation of biogas and installation of energy
efficient equipment – helped lower
the cost of production, besides reduce effluent and
improve hygiene conditions &
productivity.
Health Safety & Environmental
Review
Renewing the commitment to Health Safety and
Environment, Dabur has
formulated a policy focusing on People, Technology
and Facilities. A dedicated
“Safety Management Team” has also been put
in place to work towards the
prevention of untoward incidents at the corporate
and unit level, besides educate
& motivate employees on various aspects of
Health, Safety and Environment.
The Company is also continuously monitoring
its waste in
adherence with the pollution control norms.
In pursuance of its commitment
towards the society, efforts have also been
initiated to conserve and maintain the
ground water level. The efforts include
implementation of rainwater harvesting,
which has delivered encouraging results and has
put the company on the path
to becoming a Water-Positive Corporation.
Dabur also initiated a Carbon Foot Print Study
at the unit level with
an aim to become a carbon positive Company
in years to come.
At Dabur, we are committed to sustainable
development throughout our
diverse operations. And, we will strive to
translate the good intentions into
concrete and lasting results, contributing to
the ultimate good of the
society.
41
e. Technology Absorption
Dabur has also made continuous efforts towards
technology absorption
and innovation, which have contributed towards
preserving natural resources.
These efforts include:
Minimum use of water in process by pre-
concentration of herbal extract
and reduction in concentration time.
Uniform heating in VTDs by hot water as against
steam earlier, resulting in
30% reduction in bulk wastage by using non-stick
coating and formulation
change.
Improvement in water treatment plant through
introduction of RO
(Reverse Osmosis) system for DM water,
reutilization of waste water from
pump seal cooling and RO reject waste-water
management.
Introduction of water efficient CIP system with
recycling of water in fruit
juice manufacturing
Development of in-house technology to convert
fruit waste into organic
manure by using the culture Lactobacillus burchi
The Company has achieved a host of significant
benefits in terms of
product improvement, cost reduction, product
development, import substitution,
cleaner environment and waste disposal, amongst
others.
42
f. Strategic Intent
We intend to significantly accelerate profitable
growth. To do this, we will:
Focus on growing our core brands across
categories, reaching out to new
geographies, within and outside India, and improve
operational efficiencies
by leveraging technology
Be the preferred company to meet the health and
personal grooming
needs of our target consumers with safe,
efficacious, natural solutions by
synthesizing our deep knowledge of ayurveda and
herbs with modern
science
Provide our consumers with innovative products
within easy reach
Build a platform to enable Dabur to become a
global ayurvedic leader
Be a professionally managed employer of choice,
attracting, developing
and retaining quality personnel
Be responsible citizens with a commitment to
environmental protection
Provide superior returns, relative to our peer
group, to our shareholders
V. OBJECTIVE OF THE STUDY

PRIMARY OBJECTIVE
To find out the new business opportunity in rural Goa

SECONDARY OBJECTIVE
Availability & Visibility analysis of Dabur in rural
market of Goa
Coverage analysis of Dabur in rural market of Goa
To find out the feasibility of new sub stockiest in rural
market of Goa

VI. RESEARCH METHODOLOGY

TYPES OF RESEARCH
Research are categorized into four major category
First is descriptive & Analytical
Second Applied & Fundamental
Third Quantitative & Qualitative
Fourth Conceptual & Empirical
The project Presented is based on
Descriptive Research type – As it includes Survey and fact
finding enquiries of different
kinds of Quantitative figures like sales are taken as the
most important feature for theanalysis.

VII. SAMPLING TECHNIQUE

Sampling techniques can be broadly classified into two
types viz.
1) Probability Sampling (here the every item in the
universe have the equal
chance of inclusion in the sample)
2) Non Probability Sampling (Here the item in the sample
are deliberately
selected by the researcher)
Again both are classified as follows
Probability Sampling
Simple Random sampling
Complex random Sampling
Cluster Sampling
Systematic Sampling
Stratified sampling
Area Sampling
Multi-stage Sampling
Sampling with probability proportional to the size
46
Non-probability Sampling
Haphazard or convenience sampling
Purposive sampling
Quota Sampling
Judgment Sampling
The project done here is based on the Non-probability,
purposive, Quota sampling
As in the given project the sample considered is specific to
a predetermined area of Goa