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Marketing to Rural India: Making the Ends Meet Published: March 08, 2007 in India Knowledge@Wharton On one side are

the fast-moving consumer goods (FMCG) and the consumer durables companies. On the other are consumers in rural India, potentially the largest segment of the market. Finally, the two are coming together. The fact that this has not happened in the past is not for want of trying. In Mumbai and New Delhi corner offices, executives have long recognized that to build real sales volumes they will have to reach outside the big cities. In several categories, rural India already accounts for the lion's share. According to MART, a New Delhi-based research organization that offers rural solutions to the corporate world, rural India buys 46% of all soft drinks sold, 49% of motorcycles and 59% of cigarettes. This trend is not limited just to utilitarian products: 11% of rural women use lipstick. Other numbers are equally revealing. According to the National Council of Applied Economic Research (NCAER), an independent, non-profit research institution, rural households form 71.7% of the total households in the country. Spending in this segment is growing rapidly and consumption patterns are closing in on those of urban India. Jagmohan Singh Raju, a professor of marketing at Wharton, says: "No consumer goods company today can afford to forget that the rural market is a very big part of the Indian consumer market. You can't build a presence for a brand in India unless you have a strategy for reaching the villages." Several European multinational firms -- and a few U.S. firms -- have been making inroads into rural India for years. Companies such as Unilever, Phillips and Nestle have long been known to India's rustic dukaandaars, or merchants. Among U.S. firms, companies such as Colgate and Gillette have made considerable headway. According to Raju, marketing to rural customers often involves building categories by persuading them to try and adopt products they may not have used before. "A company like Colgate has to build toothpaste as a category, which means convincing people to change to toothpaste instead of using neem twigs to clean their teeth, which was the traditional practice," he says. "This is difficult to do and requires patience and investment by companies. It's not like getting someone to switch brands." Companies that have figured this out are doing better in the villages than in the cities. Soft drinks giant Coca-Cola is growing at 37% in rural markets, compared with 24% in urban areas. According to Hansa Research, a market research firm that has published a Guide to Indian Markets 2006, the penetration of consumer durables has risen sharply in India's villages between 2000 and 2005. In color TVs, sales are up 200%; in motorcycles, 77%. In absolute numbers, however, the penetration is still low. Coke, for instance, reaches barely 25% of the rural market. This means the upside potential is huge for companies that develop effective rural marketing strategies. According to NCAER, the low penetration rates can be attributed to three major factors: low income levels, inadequate infrastructure facilities and different lifestyles. But income levels are going up, infrastructure is improving and lifestyles are changing. Almost a third of the rural population now uses shampoo compared with 13% in 2000, according to Hansa Research. FMCG and consumer durables companies have in the past tried tinkering with all the four 'P's -product, pricing, promotion and place-- of the marketing mix. Hindustan Lever -- which is in the process of changing its name to Hindustan Unilever to reflect the fact that it is the Indian subsidiary of the Dutch conglomerate -- is among India's largest FMCG companies. It has been highly successful in marketing in rural India and has been a pioneer in reaching out to the smallest of villages with innovative products such as single-use packets of shampoo that sell for a penny. (The rural consumer uses shampoo on rare occasions; she does not want to invest in a bottle.) Independent agencies run media vans that show movies in distant villages. They have live promotions and demonstrations during breaks.

The area where innovation has moved to center stage is in the fourth P -- place (or distribution). Infrastructure has always been the bugbear of the Indian marketer. Distribution channels can make or break a company's rural marketing efforts. To sell in villages, products must be priced low, profit margins must be kept to the minimum and the marketing message must be kept simple. Empowering Women Consumers Hindustan Lever, whose 2006 revenues were $2.8 billion, has been learning these lessons for nearly a decade. The company's Project Shakti (its name means "strength") was born out of this realization, and it has become a case study for business schools and evolved beyond its original goals. "The objectives of Project Shakti are to create income-generating capabilities for underprivileged rural women by providing a small-scale enterprise opportunity, and to improve rural living standards with greater awareness of health and hygiene," says Dalip Sehgal, executive director of the Shakti initiative. Hindustan Lever's drive into rural India was prompted in part by growing competition. When the Indian economy opened up in early 1990s, multinationals such as Procter & Gamble stepped up their activities, forcing Hindustan Lever to seek higher revenues and growth by reaching into villages with 1,000 or fewer residents. Launched in 2001, Project Shakti was an important part of this strategy. It involved working with rural self-help groups (SHGs) to educate rural women, while also making them part of the company's marketing network. "Women from SHGs become Shakti entrepreneurs -- direct-to-home distributors [of Hindustan Lever products] in rural markets," says Sehgal. "This micro-enterprise offers low risks and high returns. The products distributed include a range of mass-market items especially relevant to rural consumers," such as soap, toothpaste, shampoo and detergent. The Shakti website features a video profile of Rojamma, a young woman from the state of Andhra Pradesh in Southern India, as an example of a typical Shakti distributor. A mother of two who was left to fend for herself and two daughters after her husband abandoned the family, Rojamma initially made ends meet by working in her parents' fields. She then joined the Shakti project and became a distributor of Hindustan Lever products, speaking in village after village to impoverished and often illiterate women about the need to bathe their children and wash their clothes regularly and also selling them soap and detergent. The commission Rojamma earned on her sales helped provide for her family. "Today she is a proud entrepreneur and enjoys not only the money she earns from the project but also the respect of society," says Sehgal. "The lives of thousands of women have changed because of Shakti." A typical Shakti distributor sells products worth Rs 10,000-15,000 (around $250) a month, which provides an income of Rs 700-1,000 (around $25) a month on a sustainable basis. While this may not seem to be a high income, it makes an enormous difference to women who live in remote villages in dire poverty. In many cases, earnings from Shakti help them double their household income. Much of the additional income goes to educating children, and also to purchasing consumer durables such as television sets, which further expands the rural market for such products. Some Shakti distributors -- whom the company calls "entrepreneurs" -- invest the extra money in buying vehicles such as motor scooters that allow them to go into more villages. Indeed, with help from Shakti distributors, Hindustan Lever has been able to reach rural consumers in thousands of remote Indian villages. According to media reports, Shakti distributors now account for 15% of the company's sales in rural India. Meanwhile, the potential for growth is enormous, since studies have shown that just 15% of Indian consumers use products such as shampoo. According to Wharton's Raju, there are behavioural reasons why rural consumers represent a sound bet for companies that are willing to invest in reaching them. "Affluent consumers demonstrate that they have 'arrived' by buying bigger houses or cars. People at lower income levels do so by buying premium brands. This means brand loyalty is very high among less affluent consumers. That is why the rural market is critical for companies. The first-mover advantage is significant."

The Shakti model was piloted in 50 villages of the Nalgonda district in Andhra Pradesh. It has now spread to more than a dozen states, creating 26,000 women distributors covering 80,000 villages. By 2010, the goal is to recruit 100,000 Shakti distributors covering 500,000 of India's more than 600,000 villages. "This initiative has been extremely successful," says Ajay Gupta, CEO of www.ruralnaukri.com, a job site for the rural market. In addition to the distribution network, the Shakti project includes Shakti Vani (or voice), a social awareness program, and iShakti, a community portal. "Desktop computers are set up in the homes of Shakti entrepreneurs," says a Hindustan Lever spokesperson. "These computers are equipped with software developed by Unilever through which users can access content in categories including education, employment, agriculture, health and entertainment. They can also ask questions on any of these subjects and have them answered by experts." iShakti is in its early days; it was launched in November 2004. The Vani project, however, is operational in more than 20,000 villages in states like Madhya Pradesh, Karnataka, Chattisgarh and Andhra Pradesh. Hindustan Lever has also tied up with partners such as Tata Consultancy Services, India's largest software firm, which is actively involved with the iShakti portal, and ICICI, a financial services institution that is involved with providing micro-credit loans. With the network now in place, other companies want to hop on to the Shakti bandwagon. One service that is likely to be added soon is insurance. ITC's eChoupal Initiative Another innovator in rural distribution -- the $3.6 billion, Calcutta-based tobacco-to-hotels conglomerate ITC -- has also been trying to build a platform that others can use. At a recent seminar on rural marketing, ITC chairman Y.C. Deveshwar outlined plans to create a trust that could work as an agency through which companies -- both private and public -- could market goods and services to Indian farmers. The trust route would hopefully make other companies more willing to sign up with their offerings. ITC has the right credentials to launch this trust. Like Hindustan Lever's project Shakti, its eChoupal venture has been the subject of several case studies. ITC's foray into an enhanced distribution network came from the recognition that the existing agriproduce distribution channels were inefficient. The company exports various agricultural products -soybean, rice and wheat, to name a few. It needs to source them from farmers. "In 2000, ITC embarked on an initiative to deploy technology to reengineer the procurement of soybeans from rural India," says S. Sivakumar, CEO of ITC's agri-business division. "Kiosks -called eChoupals -- consisting of a personal computer with Internet access were set up at the villages." He explains that soybean farmers could access this kiosk for information on prices, but had the choice to sell their produce either at the local market or directly to ITC at their hub locations. A hub location services a cluster of eChoupals. By purchasing directly from the farmer, ITC significantly improved the efficiency of the channel and created value for both the farmer and itself. "While the eChoupal network was initiated to facilitate more efficient and effective procurement, the connectivity -- both physical and informational -- between the farmer and the market that it facilitated has allowed ITC to use it for distribution of goods and services from the market to the farmer," says Sivakumar. It has thus evolved into a business platform. The eChoupal infrastructure consists of: A kiosk with Internet access in the house of a trained farmer, called a Sanchalak. This kiosk is within walking distance of target farmers. A warehousing hub managed by the former middleman, called a Samyojak. This is within a tractordriveable distance of target farmers. (The former middlemen were given a role to avoid resistance

to the project. They joined because they could see that their traditional business was in jeopardy.) A collaborative network of companies orchestrated by ITC with a pan-India presence. This is, of course, a simplified structure. And there has been a stream of new initiatives. For instance, in August 2004, ITC introduced the Choupal Sagar, a rural retail outlet at the hub. The first was set up at Sehore in Madhya Pradesh. "This 7,000 sq. ft. mall sells consumer goods as well as agri-products," says Sivakumar. The benefits to the farmer are obvious. And ITC itself gains. Apart from the more efficient channel, there is money to be made from the reverse flow. In 2005-06, ITC generated $23 million selling chemicals and fertilisers. That may not sound like much, but it's early yet. In a recent move, ITC has set up its first urban outlet, the other end of the eChoupal chain, to retail fresh fruit and vegetables. What about other companies? Does it make sense for them to climb on the bandwagon? Sivakumar gives the example of PI Industries, which has increased its market share in Madhya Pradesh from 12.3% in 2003 to 33% in 2005 after partnering with ITC to sell through the eChoupal. "The eChoupal project is already benefiting more than 3.5 million farmers," says Sivakumar. "Over the next decade, the eChoupal network will cover more than 100,000 villages, representing onesixth of rural India, and create more than 10 million e-farmers." Room for All Both Project Shakti and eChoupal have been around for less than a decade. Which is likely to succeed? Observers say there is place for both; the Indian rural market is huge. According to Wharton's Raju, while Shakti and eChoupal are different in orientation -- one focuses on individuals while the other is corporate-based -- each has been very successful in its own way. "You can't think of success just in financial terms," he says. "Both projects have created tremendous goodwill for Hindustan Lever and ITC." That is no small asset, especially for ITC, whose initials once stood for Indian Tobacco Company. Sivakumar claims the ITC model is superior because it involves two-way traffic. "We are starting with raising rural incomes," he says. "The level of affordability in rural India is low. For consumers to buy products, you have to first put more money in their pockets. We are creating a virtuous circle of higher income, higher productivity and higher consumption." He adds that there is a distinction between the commission paid to Shakti entrepreneurs and the micro-credit arranged for them, and the eChoupals' efforts to raise rural incomes by improving agricultural efficiency for the whole community. At Hindustan Lever, company officials are equally confident about Project Shakti. They say they are in the business of creating entrepreneurs and arranging micro-credit for them. This, too, has a catalyzing effect on the whole community. Raju believes that the drive to gain access to rural retailers is, in some ways, as critical as the one to reach consumers. "If you look at rural retail in India, the outlet size is very small. Merchants will often stock just one brand in a category; they do not have the resources to stock multiple brands. They will stock the brand that sells the most." This lesson has hardly been lost on Indian-owned companies. Over the coming months, the battle for rural wallets will include not just European and U.S. multinationals but also fast-growing Indian companies. A retail initiative by the $22.6 billion Reliance Industries is a case in point. The Mukesh Ambani-led group plans to pump in $5.5 billion over the next few years to create a farm-tostorefront infrastructure for a pan-India retail network. (Only part of this money is for the rural component.) Mukesh Ambani has company. Brother Anil Ambani, who parted ways with him in 2005, is connecting rural India through Reliance Infocomm, a mobile services provider. Its network now encompasses 240,000 towns and villages, accounting for 42% of the rural population. It plans to double the rural coverage to 400,000 villages, making up 50% of the rural population.

There are many others. The rural initiative of the Mumbai-based $1.3 billion House of Godrej -Godrej Aadhaar -- plans to set up 1,000 stores across India in the next five years. Delhi-based telecom major Bharti Airtel chairman Sunil Mittal has tied up with Wal-Mart, which will need its supply chain. From the Goenkas to the Gulabchands, from the Tatas to the Thapars, every major Indian business group has plans to move into the hinterland. Like Thoreau and Tolstoy, Gandhi, revered as the father of modern India, believed that the country's future lay in her villages. These days, every marketer would agree.

Rural marketing... Selling in Rural India
The Indian rural market with its vast size and demand base offers a huge opportunity that MNCs cannot afford to ignore
TO expand the market by tapping the countryside, more and more MNCs are foraying into India's rural markets. Among those that have made some headway are Hindustan Lever, Coca-Cola, LG Electronics, Britannia, Standard Life, Philips, Colgate Palmolive and the foreign-invested telecom companies. Opportunity The Indian rural market with its vast size and demand base offers a huge opportunity that MNCs cannot afford to ignore. With 128 million households, the rural population is nearly three times the urban. As a result of the growing affluence, fuelled by good monsoons and the increase in agricultural output to 200 million tonnes from 176 million tonnes in 1991, rural India has a large consuming class with 41 per cent of India's middle-class and 58 per cent of the total disposable income. The importance of the rural market for some FMCG and durable marketers is underlined by the fact that the rural market accounts for close to 70 per cent of toilet-soap users and 38 per cent of all twowheeler purchased. The rural market accounts for half the total market for TV sets, fans, pressure cookers, bicycles, washing soap, blades, tea, salt and toothpowder, What is more, the rural market for FMCG products is growing much faster than the urban counterpart. The 4A approach The rural market may be alluring but it is not without its problems: Low per capita disposable incomes that is half the urban disposable income; large number of daily wage earners, acute dependence on the vagaries of the monsoon; seasonal consumption linked to harvests and festivals and special occasions; poor roads; power problems; and inaccessibility to conventional advertising media. However, the rural consumer is not unlike his urban counterpart in many ways. The more daring MNCs are meeting the consequent challenges of availability, affordability, acceptability and awareness (the so-called 4 As) Availability The first challenge is to ensure availability of the product or service. India's 627,000 villages are

spread over 3.2 million sq km; 700 million Indians may live in rural areas, finding them is not easy. However, given the poor state of roads, it is an even greater challenge to regularly reach products to the far-flung villages. Any serious marketer must strive to reach at least 13,113 villages with a population of more than 5,000. Marketers must trade off the distribution cost with incremental market penetration. Over the years, India's largest MNC, Hindustan Lever, a subsidiary of Unilever, has built a strong distribution system which helps its brands reach the interiors of the rural market. To service remote village, stockists use autorickshaws, bullock-carts and even boats in the backwaters of Kerala. Coca-Cola, which considers rural India as a future growth driver, has evolved a hub and spoke distribution model to reach the villages. To ensure full loads, the company depot supplies, twice a week, large distributors which who act as hubs. These distributors appoint and supply, once a week, smaller distributors in adjoining areas. LG Electronics defines all cities and towns other than the seven metros cities as rural and semi-urban market. To tap these unexplored country markets, LG has set up 45 area offices and 59 rural/remote area offices. Affordability The second challenge is to ensure affordability of the product or service. With low disposable incomes, products need to be affordable to the rural consumer, most of whom are on daily wages. Some companies have addressed the affordability problem by introducing small unit packs. Godrej recently introduced three brands of Cinthol, Fair Glow and Godrej in 50-gm packs, priced at Rs 4-5 meant specifically for Madhya Pradesh, Bihar and Uttar Pradesh — the so-called `Bimaru' States. Hindustan Lever, among the first MNCs to realise the potential of India's rural market, has launched a variant of its largest selling soap brand, Lifebuoy at Rs 2 for 50 gm. The move is mainly targeted at the rural market. Coca-Cola has addressed the affordability issue by introducing the returnable 200-ml glass bottle priced at Rs 5. The initiative has paid off: Eighty per cent of new drinkers now come from the rural markets. Coca-Cola has also introduced Sunfill, a powdered soft-drink concentrate. The instant and ready-to-mix Sunfill is available in a single-serve sachet of 25 gm priced at Rs 2 and mutiserve sachet of 200 gm priced at Rs 15. Acceptability The third challenge is to gain acceptability for the product or service. Therefore, there is a need to offer products that suit the rural market. One company which has reaped rich dividends by doing so is LG Electronics. In 1998, it developed a customised TV for the rural market and christened it Sampoorna. It was a runway hit selling 100,000 sets in the very first year. Because of the lack of electricity and refrigerators in the rural areas, Coca-Cola provides low-cost ice boxes — a tin box for new outlets and thermocol box for seasonal outlets. The insurance companies that have tailor-made products for the rural market have performed well. HDFC Standard LIFE topped private insurers by selling policies worth Rs 3.5 crore in total premia. The company tied up with non-governmental organisations and offered reasonably-priced policies in the nature of group insurance covers. With large parts of rural India inaccessible to conventional advertising media — only 41 per cent rural households have access to TV — building awareness is another challenge. Fortunately, however, the rural consumer has the same likes as the urban consumer — movies and music — and for both the urban and rural consumer, the family is the key unit of identity. However, the rural consumer expressions differ from his urban counterpart. Outing for the former is confined to local fairs and festivals and TV viewing is confined to the state-owned Doordarshan. Consumption of branded products is treated as a special treat or indulgence. Hindustan Lever relies heavily on its own company-organised media. These are promotional events organised by stockists. Godrej Consumer Products, which is trying to push its soap brands into the interior areas, uses radio to reach the local people in their language. Coca-Cola uses a combination of TV, cinema and radio to reach 53.6 per cent of rural households. It doubled its spend on advertising on Doordarshan, which alone reached 41 per cent of rural households. It has also used banners, posters and tapped all the local forms of entertainment. Since price is a key issue in the rural areas, Coca-Cola advertising stressed its `magical' price point of Rs 5 per bottle in all media.LG Electronics uses vans and road shows to reach rural customers. The company uses local language advertising. Philips India uses wall writing and radio advertising to drive its growth in rural areas.

The key dilemma for MNCs eager to tap the large and fast-growing rural market is whether they can do so without hurting the company's profit margins. Mr Carlo Donati, Chairman and ManagingDirector, Nestle, while admitting that his company's product portfolio is essentially designed for urban consumers, cautions companies from plunging headlong into the rural market as capturing rural consumers can be expensive. "Any generalisation" says Mr Donati, "about rural India could be wrong and one should focus on high GDP growth areas, be it urban, semi-urban or rural." I hope this will be usefull

Soft Drinks in Rural Market in India
NON-ALCOHOLIC BEVERAGES IN INDIA. In India, the Coca-Cola and Pepsi soft drink brands suffered a setback in August of last year due to a product contamination scare. Both have cut profit margins to the bone in order to fend off competition from lowpriced local fruit drinks. Indian consumers are accustomed to drinking a variety of locally-produced soft drinks that are sold in small stands throughout the country. Rural India is still a highly price-sensitive marketplace, so the major soft drink companies are forced to cut profit margins in order to compete there. India's purchasing power parity per capita of US$2,850 is representative of a nation in which the average consumer has insufficient income to engage in discretionary spending. Nevertheless, during the hot season, spur-of-the-moment beverage sales are commonplace. In order to position themselves for sales growth, the major soft drink companies priced a 200-milliliter bottle at the equivalent of 11 U.S. cents. Although that price is not sustainable beyond the short term, management hopes that it will be enough to wrest market share away from local products and substantially increase sales volume in 2004. Beverage companies cannot afford to ignore India's rural consumers if they wish to expand market share. According to data release by the PRB, only 28 percent of India's population lived in urban areas in 2003. On average, rural consumers have a lower income level than their urban counterparts and demand lower-cost beverage options. In order to remain cost competitive, soft drink companies have to contain the transportation costs involved in expanding their distribution network into widespread towns and villages. Faced with high fuel and vehicle costs, companies are turning to less expensive means of transportation including ox carts and rickshaws. Another challenge facing the major soft drink companies is regaining consumer confidence in the aftermath of a well- publicized scandal over the...

Article: RURAL BUYER BEHAVIOUR: A STUDY WITH REFERENCE TO SOFT DRINKS Author: Dr. K.SINGARAVELU and K.R.KAVITHA
Abstract: The rural market in India is not a separate entity in itself and it is highly influenced by the sociological and behavioural factors operating in the country. The rural population in India accounts for around 627 million, which is exactly 74.3 percent of the total population. 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. But often, rural marketing is confused with agricultural marketing - the latter 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. This article is attempted to identify the consumer behaviour of soft drinks in the rural areas. Introduction Studies on consumer behaviour have become increasingly important as the consumers are becoming more heterogeneous and discerning. A firm must understand and buyer’s behaviours specifically is must understand how the buyers decide in favour of one brand or product. What motivates him or her to select an alternative and who influence him or her to buy the brand. Soft drink is fast moving consumer goods usually refer to non-durable products. The present study is an attempt to delve into the brand preference for soft drinks. The soft drinks include all types of the soft drinks taken to the study i.e., fruit drinks synthetic drinks. been undergoing much transformation It comes in a variety of with changing consumer flavours and are artificially sweetened. The soft drinks industry has demands, government policy and innovation in the packing. Many centuries back people selected something other than water to quench their thirst. They used gruel (Neeragaram), which is obtained by keeping cooking rice in water through night. Since it was not suitable to carry it out they started using natural drinks like tender coconut, palm cola (theluvu) is obtained from palm i.e., other than toddy, sugar cane juice etc. Due to be increase in population, people

living in be soft drinks like synthetic drinks and fruit juices, which include tetra pack drinks and bottle drinks. It was quite convenient for them to carry more bottles and tetra packs wherever they went people loved them a lot. People started having these artificial drinks not Some only in summer seasons but also in other through out the year.

people think that, drinking such type of drinks is prestige to them. The people who do not like tea and coffee started sing these drinks. This resulted the increase of the importance given to it. All type of people in society either rich or poor started liking these drinks. We can find some people who do not drink tea or coffee but now a day it is difficult to see people who don’t like these soft drinks. It has also become for time passing. People also used it for digestion of food and they also started to mixing these drinks with alcoholic beverages. The manufacturers of these drinks caught the attention of people through attractive advertisement to earn more profit in their business. Leading companies have started releasing drinks with numerous name brands in the market. At present Pepsi Cola and CocaCola companies have taken over the Indian market. There is heavy competition between these who companies in Coimbatore. In this situation there is a question of what the people would like to have or desire to have in rural areas. So the study is an attempt to know the consumers behaviour on soft drinks. Objectives of the study • • • To identify the reasons for consuming the soft drinks. To study the most preferred package of soft drinks. To find out the factors influencing the consumers for brand preference. Scope of the study

The main aim of the study is to find out preferred brand of soft drinks by the consumers in the rural areas, especially in and around the areas of kovaipudur. This study is helpful to the manufactures to identity the consumer perception, taste, beliefs, and behaviour for improving them to introduce new strategies and increase in sales. Sample size The sample size is 50 respondents taken from in and around the areas of Kovaipudur. Sampling technique The random sampling technique is being used for this study. A random sample is obtained by selecting consumer in shops, bakeries and fruit stalls. Sources of data The data has been collected from both primary and secondary sources. The primary data are collected from the respondents directly. The secondary data was collected from the textbooks, journals, magazines and newspapers. Table No. 1 SOURCES OF INFORMATION FOR THE PRESENT BRAND AND VARIOUS CLASSES OF BUYERS Various classes of buyers S.No Sources

Employee 1 Family members / relatives 2 Friends / 3 4

%

Businessman

%

Students

%

Total

28 36

2 3

10 15

3 6

16 32

8 13

neighbours 3 Dealers/ Sales person 4 5 Advt. in dailies Advt. in TV / Cinema Total 1 1 2 11 9 9 18 100 2 3 10 20 10 15 50 100 4 3 19 3 16 20 16 100 6 8 15 50

It is observed from the table no.1 that 3 employees respondents constitution 28% information for the present brand from the family members / relatives, 4 respondents constituting 36% friends / neighbour. It is observed that 2 business man respondents constituting 10% information for the present brand for the family members / relative , 3 of the respondents constituting 15% friends / neighbour. It is observed that 6 of the respondents constituting 32% friends / neighbour. 4 of the respondent constituting 20% advertisement in daily magazines. It is observed from the table no.2 35% of employees are aware of Pepsi, 18% of Miranda, 29% of Slice, 6% of Fanta, 12% of 7-up. 28% of Business man are aware of Pepsi, 33% of Miranda, 22% of Slice, 11% of Fanta and 6% of 7-up. 33% of Student are aware of Pepsi, 13% of Miranda, 27% of slice, 20% of Fanta, and 7% of 7-up. It may be concluded that the majority of the respondents aware of Pepsi.

Table No. 2 AWARENESS OF BUYERS ABOUT VARIOUS BRANDS Various classes of buyers S. No soft drink Employee 1 2 3 4 5 PepsiCola Miranda CocaCola Fanta 7-up Total % Business man 6 3 5 1 2 17 35 18 29 6 12 100 5 6 4 2 1 18 28 33 22 11 6 100 5 2 4 3 1 15 33 13 26 20 7 100 16 11 13 6 4 50 32 22 26 12 8 100 % Students % Total %

Table No.3 USING THE SOFT DRINKS BY VARIOUS CLASSES OF BUYERS

Sl.N o

soft drinks Employ ee %

Various Classes of buyers Busine ss men 7 39 8 35 % Stude nt 4 44 % Tot al 19 38 %

1 2

When thirst While

travelli ng 3 In functio n After 4 sports/ walk Total

4 5

22 28

6 7

26 30

2 2

22 22

12 14

24 28

2

11

2

9

1

12

5

10

18

10 0

23

10 0

9

10 0

50

10 0

From the above table, 39% of Employee use the soft drinks when they feel thirst, 22% of them use their soft drinks while travelling, 28% of respondents says that use the soft drinks in the function, and 11% of them use after sports or walk. 35% of business men use the soft drinks when they feel thirst, 26% of them use their soft drinks while travelling, 30% of respondents says that use the soft drinks in the occasion of function, 9% of them use after sports. 44% of the students use the soft drinks when they feel thirsty, 22% of them use their soft drinks while travelling, 22% of respondents says that use the soft drinks in the occasion of function, 12% of them use after sports. Majority of the respondents used soft drinks when they are in thirsty. Table No.4 THE OPINION ABOUT THE COST OF SOFT DRINKS Sl.No Openion Employee % 1 Very much 1 5 Various classes of buyers Business % man 1 7 2 11 4 8 Student % Total %

2 3 4

High Reasonable Low Total

6 10 1 18

33 56 6

7 5 1

50 36 7 100

4 10 2 18

22 56 11

17 25 4

34 50 8

100 14

100 50

100

5% of the employees feel the price of soft drinks are very high, 33% feel the prices are high, 56% of respondents feel the prices are reasonable, and remaining 6% of respondent feel the price are low. 7% of the business man feel the price of soft drinks are very high, 50% feel the prices are high, 36% of respondents feel the prices are reasonable, and remaining 7% of the respondent feel the price are low. 11% of the students feel the price of soft drinks are very high, 22% feel the prices are high, 56% of respondents feel the prices are reasonable, and remaining 11% of the respondent feel the price are low. It may concluded that majority of respondents to price is reasonable FINDINGS • • • • • The majority respondents have got brand awareness through friends and relatives. The majority of respondents have memorized the slogans the advertisement. Most of the respondents opinion that the attractive media of advertisement is video. Majority of the respondents feel that the price of soft drinks should be reduced Most of the people like flavour drinks while youngsters prefer cock and pepsi.

CONCLUSION At present the companies face a huge competition to market their brands. In that situation they use different promotional activity for promoting their brands in the market. Many leading companies have started sponsoring events such as tournaments and cultural activities etc. This study reveals that the type of soft drinks preferred in and around Kovaipudur is Pepsi and Miranda it is due to it’s taste, price and availability. refreshment. Refrences: 1. Philip Kotler – Principles of Marketing prenctice- Hall of india (pvt) Ltd New Delhi (1991) Fifth Edition 2. Carevan,hills&wooderful Richard D.Irwinn Inc, delhi 3. James E. Mauch & Jack W.Birch – Guide to the successful thesis and dissertation- marcell dekkes inc. New yark. – Marketing Management – The awareness of soft drinks is enhanced through videomedia. Pepsi is being preferred than any soft drinks due to its taste and

Marketing

Rs 59 billion carbonated drinks market hots up to meet summer challenge
Tuesday,
Irum

April
Khan,

17,

2012
Mumbai

The cola companies are experimenting with new flavours for the summer season. Leading players like the Coca-Cola and PepsiCo along with regional players like Kalimark have launched new flavours in the market.

For instance, PepsiCo has rolled out two new variants for its orange drink - Mirinda and plans to launch more new flavours under its brand 7Up.

Kalimark, the popular soft drink manufacturer from the south, has launched a lemonadeflavoured carbonated drink called Solo. However, the company is more excited to launch its another offering called paneer soda which is a rosewater carbonated drink with demand. The company intends to sell a 500 ml PET bottle for Rs 25.

Coca-Cola too has launched Schweppes 300 ml cans in two variants - ‘Tonic Water’ & ‘Soda Water.’ “Our endeavour is to make these products available in all metros and large towns across India,” said a spokesperson from the Coca-Cola.

Carbonated drinks account for the second biggest chunk (28%) of the non-alcoholic beverage market in India. It is growing at a rate of 10-12% annually.

Having huge population base and assorted age groups, supporting the carbonated drinks market has led the market to be of worth around Rs 59 billion in 2011, informed Shushmul Maheshwari, chief executive, RNCOS, a market research firm.

“Though rising health awareness among the young and educated population has led consumers shift more towards fruit-based drinks but the demand for fruit juice will not overtake the carbonated drinks market,” he said. Owing to the growing young population (aged between 16-30 years) that still prefer carbonated drinks over fruit juice, the demand for the same seems to lead the market.

The spokesperson for the Coca-Cola said, “The per capita consumption of our products is only 11. Contrast this to a global average of 89, 32 in China and 675 in Mexico. This just presents us with the challenge of tapping on to this opportunity and making sure that we are the consumer’s choice of beverage every day, every time.”

The company has already announced its plans to invest $2 billion over the next five years

starting 2012 to further capture the opportunity in the Indian non-alcoholic ready-to-drink (NARTD) beverage market. It will be investing in innovation, consumer marketing and brand building, expansion of distribution and cold drink equipment placement as well as further development of manufacturing capacity to meet growing consumer demand.

Distribution

plan

Along with innovation in flavours summers is also the time to change its distribution strategy as the demand for soft drink increases by more than the double. “The beverage companies are focussing to push their sales through innovative distribution strategies across India. They are constantly building wide distribution network by installing several vending machines in malls, food courts, etc. to reach to masses. Moreover, these companies are creating an independent business channel to innovate, sell and distribute its juices, energy drinks and niche products,” informed Maheshwari.

The Coca-Cola spokesperson agreed with Maheshwari. He said, “We follow an OBPPC (Occasion, brand, price, pack, and channel) strategy, which involves making available our soft drink brands in the right pack at the right price, sold through the right channel and driving consumption by linking it with right occasion. Our products are available pan-India and the pack alternatives being made available to consumers really depends on the channel where a consumer is looking for a soft drink. If the need arises, we will surely introduce a new SKU, depending on the consumer’s demand and feedback from the retailers.”

Pricing

strategy

The summer anticipates a cola war with both PepsiCo and both Coca-Cola and Pepsi planning to reduce prices for its 200 ml returnable glass bottle just in time for the summer season. The price reduction, together with good marketing and advertising, could help them sustain their position in the market.

“We are now offering our entry level pack for brand Coca-Cola – the 200 ml returnable glass bottle (RGB) - at a special promotional price of Rs 8.The 200 ml pack being the entry point into

the category, will recruit new consumers into the cola segment since it is an innovative and a very attractive price point. The promotional offer is being rolled out in phases across select markets and we have a strong communication program to better optimise the proposition. This initiative neatly dovetails into our Open Happiness consumer proposition and in our belief that happiness multiplies when you share it and touch more people,” said Coca-Cola.

Rural

area

penetration

One of the biggest challenges in rural market is getting more number of people introduced to consuming packaged beverages. In-addition, distribution of soft drink beverages including making them available in a chilled form is also a challenge.

Hence Coca-Cola India has been continuously thinking about newer and innovative ways to reach out to rural consumers. It has also now created a new vertical called Emerging Markets & Franchise Leadership to drive growth in rural markets.

One of the first products that it has introduced for the BOP segment is the 'Fanta Fun Taste' powder sachet for Rs 5 targeting the lower end of the market. It has been launched in a powdered ready to drink segment and is selling successfully in 1,500 retail outlets in Maharashtra and Gujarat.

“Given the challenges of rural marketing, one has to be innovative and think out of the box. Coca-Cola India is continuously thinking about newer ways of reaching out to the rural consumers and introducing them to ready-to-drink packaged beverages,” said the spokesperson.

The rural market in India poses several challenges to beverage companies in terms of expanding their footprint, one of which is the availability of chilled products. One of the biggest challenges in rural market is getting more number of people introduced to consuming beverages in a ready to drink packaged form. In addition, distribution of soft drink beverages including making them available in a chilled form is also a challenge.

Soft drink companies switch focus to rural markets
12 Oct 2010 A key trend being witnessed in the Indian soft drinks market is the increasing focus on rural and semi-urban areas. This was stated in a recent Datamonitor report titled “Product Insights: Soft Drinks in India”. “The highly competitive nature of the market within cities has seen rural centres grow in prominence as an attractive consumer segment,” says Amit Srivastava, Datamonitor Analyst and author of the report. This has led soft drink manufacturers to launch products in smaller, competitively priced packs, designed to appeal to the rural consumer. “Soft drink manufacturers are developing and launching products suited to specific consumer requirements,” says Srivastava. Another key trend shaping the Indian soft drinks market is the increasing preference for healthy products. The urban Indian consumer is becoming health conscious as can be seen from the growth of health and functional foods and beverages, and the proliferation of gyms across major cities. To cater to this demand, more and more players are launching products that have less or no sugar, calories and preservatives. “Consumers have become increasingly aware of health- and fitness-related issues. Additionally, due to greater disposable incomes, particularly in urban areas, consumers are seeking healthier beverages even if they are relatively more expensive,” says Srivastava. This trend is so far restricted to urban consumers, while for the rural consumer, manufacturers continue to focus on offering economy pack sizes. Rising disposable incomes and fitness consciousness, particularly among young Indians, have provided tremendous impetus to the growth of the soft drinks market in India. “A number of young Indians indulge in outdoor sports and exercise regularly, which has increased the demand for sports drinks,” Srivastava says. Environment has also become a critical success factor for soft drinks manufacturers. A callous attitude towards environmental responsibility can lead to unpleasant consequences. Environmental impetus to conserve natural resources and reduce pollution is gaining momentum in India, with government bodies and civil society groups increasingly forcing companies to be environmentally responsible. Products such as soft drinks, which consume large amounts of critical resources such as water, have been subject to boycotts, bans and high taxation. This has prompted manufacturers to minimise their environmental footprint and portray an environment-friendly image.

Coke’s new strategy in India
Jan 8, 2010Tags: COCA-COLA,COKE, INDIA,PARIVARTAN PROGRAM, RURAL MARKET, TRAINING Business Strategy – India – Training – Retailing – November 2008

With slowdown in developed markets, companies like PepsiCo and Coca-Cola are looking at emerging markets like India and China for growth. PepsiCo is aiming to triple its businesses in India over the next five years (and also setting up a new leadership structure in India). The Coca-Cola Company (Coke), the world’s largest nonalcoholic beverage company, is not one to be left behind. Coke has a new strategy and has renewed its focus on semi-urban and rural markets in India.

Market Focus – Targeting rural India
The soft drink consumption market in India is mainly concentrated in urban cities. Even, market research data suggests that consumers in urban cities spend ten times more than consumers in semi-urban and rural markets. However, Coca-Cola has renewed its focus on the rural market in India and believes there is huge opportunity with vast growth potential in these markets. Coke is targeting small towns (tier II and III towns like Agra, Bilaspur and Lucknow) and rural markets in India.

The ‘parivartan’ program – Training small town retailers
Coke’s new strategy involves training retailers (around 6,000 of them) in a program launched by the Coca-Cola University. [In 2007, the company launched Coca-Cola University — a virtual, global university for all learning and capability-building activities.] The company calls this the “parivartan” program (meaning “Change” in English). Shop owners (traditional retailers) are given training on displaying and stocking products well. The goal of the innovative training program is to provide traditional Indian retailers with the skills, tools and techniques required to succeed in a constantly changing retail scenario. Presentations (including audio/visual technology) in local Hindi language help small retailers (with stores less than 200 square feet in average size) to better understand the concepts involved. Each retailer also receives a Coca-Cola “Certified Retailer” certificate at the conclusion of the program.

Adapting to local culture and taste
Last year, PepsiCo set up a research facility in India. Last month, Coke too set up an R&D faculty in India to develop beverages that suit local taste and increase focus on localizing its portfolio of beverages. Earlier, Coca-Cola India had been outsourcing all R&D functions from its facility in Shanghai. Some examples of local flavors include Maaza aam panna by CocaCola and Pepsi has locally-produced flavors under its Tropicana juice brand (with nimbu pani (lemon water) in the pipeline).

Moving from a price strategy to stepping up distribution
In the past (in 2002-03), Coke had already targeted rural consumers by bringing down the entry price (Rs 5 a bottle) for its product. Now, it has stepped up distribution of its 200-ml (priced at Rs 7 and Rs 8 ) returnable-glass-bottles.