“Changing mindsets in Consumption Pattern of

SOFT DRINK in Rural Market”

Post-Graduate Diploma in Management

By

Ravi Kumar

Roll No.
(Pg08-080)

Under the guidance of

Prof. Deepa Agnihotri

Faculty, Marketing
Inmantec Business School, Ghaziabad

INMANTEC
Integrated Academy of Management and Technology
Ghaziabad
Date
October 2009

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 Table of Content
Acknowledgements
01
Preface
02
Objective of study
03
History of the Industry
04
Words of Ministry of Food Processing Industry for Soft Drink Industry
06
Robust growth continues
14
Companies reposition their brands and update product portfolios
14
Main Brands of the Industry
15
Rural Market Scenario
16
Key to success in Rural India
17
Literacy Review
19
Factors influencing buying behavior
22

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Factors influencing buying behavior
23
Rural Branding
24
Research Design
25
Source of Data collection
26
Findings
27
Suggestions
28
Conclusion
29

Bibliography
30

Acknowledgements

I am highly indebted to my project mentor Prof. Deepa

Agnihotri for her continuous support, supervision

motivation and guidance through out the tenure of my

project in spite of her hectic schedule who truly remained

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driving spirit in my project and her experience gave me the

light in handling research project and helped me in clarifying

the abstruse concepts, requiring knowledge and perception,

handling critical situations and in understanding the

objective of my work.

(Ravi Garg)

Preface
Market provides a key to gain actual success only to those brands
which match best to the current environment i.e." imperative" which
can be delivered what are the people needs and they are ready to
buy at the right time without any delay. It is perfectly true but this
also depends on availability of good quality products and excellent
taste and services which further attract and add a golden opportunity
for huge sales.

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This also depends on the good planning approach and provide
ample opportunity plus sufficient amount of products for sales in the
coming next financial year.

This project introduces study of consumer’s preferences for Soft

Drink Industry. After going through a detail analysis of market
behavior and future prospect, it may also provide an opportunity to
the players those are playing a vital role in the industry to frame a
good future plan to satisfy maximum needs of the customers and
established its guiding role in throughout the country as a whole.
The study report will also provide an opportunity to delineate its
market potential business areas, products & services are to be
offered by the company to the customers.

This study report also provides the various factors affecting the
services. Marketing Division of a soft drink company has to keep in
mind various factors specially while preparing a plan for marketing
its product or services. Detail description along with analysis of
surveyed data is being presented in this report

Aims and Objectives of the study

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 • To study the profile of soft drink consumers.

• To study the behavioral pattern of rural consumer for

soft drink products.

• To identify their level of satisfaction in the purchase of

various soft drink products.

• To determine the various factors influencing the

behavior of soft drink consumer.

History of the Industry

SOFT DRINK INDUSTRIES IN INDIA- A soft drink is a non-alcoholic

beverage. It is artificially flavored and contains no fruit or pulp. India with

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population of more than 100 crores is potentially one of the largest consumer
markets in the world after China. The consumer market can be defined as the
market for products and services that are purchased by individuals as households
goods for their personal consumption. Soft drink is a typical consumer product
purchased by individuals to quench thirst and secondly for refreshment.
Searching for the point of Indian soft drinks we first document on Gold Spot, this
was the first brand soft drink in India. It was introduced by PARLE during later
part of 40’s.
Cola giant, Coca-Cola was the first foreign soft drink to be introduced in India in
1965, Coca-Cola make a very good beginning and dominated the whole scheme
right from the word go. It (Coca-Cola) faced no competition at that time. COCA
COLA entered India in the year 1993 In collaboration with PARLE INDIA LTD.

The marketing people did not even receive to publicize Coca-Cola for it sold
first like probability not-cakes. This extraordinary success of soft drinks can
be attributed to the following factors:-

• Absence of contemporary competitive brand.

• Euphoric image built up in the Western countries proceeded the
entry into Indian Market; and
• Indians are very found by nature of foreign goods, services etc. due
to prolonged foreign rules.
Parle Exports (P) Ltd, later in 1970 introduced Limca, Lemony Soft drinks.
Before Limca introduce, they had tentatively introduced Cola, Pepino, which they
had to soon withdraw in the face of battering confrontation with Coca-Cola.
Three of four groups of Indians companies who had the required production
capacity started their own brands of Cola, Lemon, Orange, but failed to achieve

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their goal on a national basis. India always has love and hate relationship with
MNC’s which gave a significant opportunities to soft drink industries in India
when Coca-Cola decided to windup its operation in 1977 rather than bowing to
the Indian government insisting on:-
• Dilution of equity, as the government felt that lots of foreign currency was
being wasted.
• Manufacturing of the top-secret concentration in India.
• Disclose of the chemical composition of the essence.
This left a large vacuum in the popular soft drink market, and a vista was opened
to any company with the requisite, technical, marketing and organizational skills.
The exit of Coca-Cola from India in 1977 accelerated the growth of several
Indian Soft Drink. New soft drink in the form of Tetra pack entered the market
among Frooti, Jump-In and Treetop were the prominent once. Till 1977 their
equipped bottling plants and the distribution network a longing to be of no use. It
took them one year to develop new formula to survive and gradually came up
with Campa, Lemon, Orange and Cola that order.
However Parle, the pioneer in the soft drinks, blazed its way to national
prominence with their product “Thumps Up” bearing the slogan “Happy Days
Are Here Again”. This particular slogan helped to win over the loyalists or
addicts to Coca-Cola, who was in the state of “Cola Shock” or Cola Depression.
Soon the Indian Soft drink industry started at a phenomenal rate, and all Parle
Products Gold Spot, Limca and Thumps Up became the brand leader in their own
segment. In spite of all these, the drink market still has large gap, as claim by soft
drink manufacturers. To fill these gaps there are many soft drinks concentrate and

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squashes flooded the market. The Indian soft markets basically offered three
flavors i.e. Orange, Lemon and Cola.

Words of Ministry of Food Processing

Industry for Soft Drink Industry

The 50-bn-rupee soft drink industry is growing now at 6 to 7% annually. In

India, Coke and Pepsi have a combined market share of around 95% directly
or through franchisees. Campa Cola has a 1% share, and the rest is divided
among local players. Industry watchers say, fake products also account for a
good share of the balance. There are about 110 soft drink producing units
(60% being owned by Indian bottlers) in the country, employing about
125,000 people. There are two distinct segments of the market, cola and non-
cola drinks. The cola segment claims a share of 62%, while the non-cola
segment includes soda, clear lime, cloudy lime and drinks with orange and
mango flavors.

The per capita consumption of soft drinks in India is around 5 to 6 bottles

(same as Nepal's) compared to Pakistan's 17 bottles, Sri Lanka's 21, Thailand's
73, the Philippines 173 and Mexico 605. The industry contributes over Rs
12 bn to the exchequer and exports goods worth Rs 2 bn. It also supports
growth of industries like glass, refrigeration, transportation, paper and sugar.
The Department of Food Processing Industries had stipulated that 'contains-
no-fruit-juice' labels be pasted on returnable glass bottles. About 85% of the
soft drinks are currently sold in returnable bottles. There was a floating stock

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of about 1000 mn bottles valued at Rs 6 bn. If the industry were to abide by
the new guidelines, it would have to invest in new bottles, resulting in a cost
outgo of Rs 5 bn. Neither Coke nor Pepsi is in a position to invest such a large
amount.

Around 400,000 tonnes of raw material would be required to replace the

existing stock of bottles. Instead, the soft drink industry suggested that a
seven-year moratorium be extended to the industry so that it can incorporate
the change in a phased manner. There is no such mandatory requirement
anywhere in the world to specifically label the glass surface of returnable
bottles. The government has decided to extend the date for replacing
the bottles to end-march 2006. In the meantime, the producers have shifted
substantially to the use of PET bottles.

Soft and aerated drinks were considered products for the middle class and the
affluent. That segregation is no more valid. Soft and aerated drinks are
consumed by all except those who cannot afford to buy any drink. An NCAER
study says that 91% soft drink sales are made to the lower, middle and upper
middle classes. The soft drink industry has been urging the government to
categorize aerated waters (soft drinks) equitably with other consumer products
of mass consumption and remove special excise duty.
The industry estimates that the beverage market should grow at twice the rate
of GDP growth. The Indian market should have, therefore, grown by at least
12%. However, it has been growing at a rate of about 6%. In contrast, the
Chinese market grew by 16% a year, while the Russian market expanded at
almost four times the rate of growth of the Indian market.

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It may be recalled that Coca-Cola, the world's number one player, was present
in India for a long time in collaboration with an Indian producer but was
thrown out in the late 1970s. It reappeared in India following the economic
liberalization era - but after its rival, world's number two, had already entered
in a big way following a long and tough fight against the opposition from the
domestic producers. When Coca-Cola re-entered, it installed a new milestone.
It acquired the well flourishing India's top player, Parle. Since then it is
basically a fight between the two American giants. Others are playing a
peripheral role, as adjuncts to the two MNCs. World's third biggest player,
Cadbury Schweppes, had also made an entry but was gobbled up by Coca-
Cola. When Coca-Cola acquired Parle brands, it was, in fact, buying the
bottling facilities, the marketing network, and the established consumer
preference during the market build-up. The brands were a drag on the global
brand. Since Coca-Cola was not interested in brands (like Thumps Up), it did
not promote them. The result, at least, in the short run was a loss of the market
to the competitor. Coca-Cola decided to market more effectively the Parle
brands. It had in its armoury Coke, Thumps Up, Limca and Fanta. The latest to
enter market was Parle’s erstwhile Rimzim, alongside Portello, a black currant
flavoured drink, very popular in Srilanka.

Coca-Cola operates through 35 plants and 16 franchisees throughout the

country, while PepsiCo has 20 plants, but it has 7 more franchisees at 23 to 16
of its rival. Coca-Cola claims a market share of 51%, while Pepsi has a share
of 46%. The claims, however, remain disputed. The other smaller players like
Pure Drinks Ltd claim the rest of the market. The shares of the two lead

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players are consolidated figures, which include the respective bottlers. Coca-
Cola had approached the government for a five year extension for divesting
49% equity in its bottling subsidiary, Hindustan Coca-Cola Holdings. It had
set up the marketing subsidiary as part of its strategy to integrate all its bottling
operations, both company-owned and franchisee bottlers, apparently keeping
in line with its global policy. All together, it had bought initially over 38
franchisee bottlers.

Kandhari Beverages, coke bottlers for north have been eyeing to lift a stake in
Coca-Cola India. Coca-Cola had filed an application to offload 49% stake of
its bottling operations in favour of their Indian operators. Besides Kandhari,
three other bottlers, one each from Uttar Pradesh, Gujarat and Jammu,
were lined up to invest in Hindustan Coca-Cola Holding. Kandhari has already
invested Rs 300 mn in 1999 and 2000 to upgrade its capacity. The total
investment by all the four was expected to be Rs 1000 mn. Both Coca-
Cola and PepsiCo planned for the launch of lemon-flavored versions of their
products. Both have been expanding their non-carbonated drink line-ups, as
consumers seem to be shifting away from carbonated soft drinks. PepsiCo is
deliberating whether to come out with Pepsi Twist, a cola mixed with lemon.
But while both companies have juice sports drinks, bottled water and other
such drinks in their line-ups, neither coke nor Pepsi has launched a new
national variety of a cola-flavoured carbonated soft drink in years.

PepsiCo had achieved Rs 3 bn worth of exports, which include processed

foods, basmati rice, guar gum and soft drinks concentrate. PepsiCo completed
the second phase of its expansion and with this expansion, PepsiCo was

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to explore the possibility of expanding the export of concentrates to more
countries in addition to the exports to Russia and other South Asian countries.
Pepsi India has entered into a marketing tie up with Hindustan Lever to
promote sales of soft drinks through Pepsi-HLL network of vending machines
and fountains. The major soft drink brand in the Pepsi stable are Pepsi,
7UP, Mirinda, Tropicana and Acquafina.

As a major strategic departure, both MNCs were expanding their brand range.
Consequent to some diversifying moves, at present, the sales ratio of Coca-
Cola between soft drinks and other beverages is 95.5. The company
intended to change this to 80:20 in the next three years. Its juice brand, Maaza
- acquired from Parle a few years ago - is being given a major thrust. It has
plans to go in for canned coffee, iced tea and purified categories under
expansion schemes. It has already launched its bottled water brand, Kinley, in
the Indian market. Besides, it is intending to acquire domestic brands in the
non-carbonated beverages segment.

The global deal between Coca-Cola and P&G to form a snacks and
beverages joint venture company was reported to have slipped into rough
weather. The P&G brand of potato wafer, Pringles, seemed to be faced with
distribution problems in India. P&G had globally tied up with Coca-Cola to
form a stand-alone juice and snacks company. The new firm is focused on
developing and marketing new juices, juice based beverages and snacks on a
global basis. The Sharjah-based Allied Beverages was pushing its Ahlan brand
in India, having entered the market in mid-2000. Its target was carbonated
drinks market in PET bottles. Its plans were to launch a PET bottle in the

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popular 300 ml category. Ahlan expected to gain a 12% share of the total PET
bottle market in northern India. Of the total market, PET bottle segment is
approximately 12%. Presently, Allied Beverages has a manufacturing unit at
Dharuhera in Haryana. The product range includes carbonated drinks - cola,
orange, lemon and soda in three pack sizes - 500 ml, 1500 ml and 2000 ml.
Allied Beverages sells non-carbonated drinks in 200 ml foodgrade cups priced
at Rs 7 in its portfolio, available in four different flavors. The company's
future plans include pulp-based fruit drinks in flavors, which will be available
in 200 ml non-returnable glass bottles.

IFB Agro Industries has handed over the distribution rights of Cadbury
Schweppes in favour of Coco-Cola India, following the global takeover of
Schweppes beverages by Coke. The company still retains the bottling rights
for the beverages.

It was noticed for the first time during the summer of 2004 that soft drink
companies were registering a slower growth in the sale of bottled water at 20%
compared to 35% in case of drinks.

Lead Players & Alliances

Company Share (%)
Aradhana 34

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Varun Beverages 15
Devyani Beverages 9
Kandhari Beverages 7
Ludhiana Beverages 7
Sri Sarvarya Sugars 6
Pearl Drinks 5
Pearl Beverages 6

Leading Brands

Coca Cola, Thums Up, Limca, Fanta, Gold Spot, Rim Zim, Maaza, Pepsi,
Mirinda, 7'UP, Mangola, Slice, Duke's, Lemonada, Crush, Canada Dry,
Campa.

Market Growth Rates

1990-91 - 1996-97 9.4%
1996-97 - 2001-02 7.8%
2001-02 - 2006-07 6.5%

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2004-05 - 2009-10 5.4%
2009-10 - 2014-15 3.5%
Sensitivity Coefficient 5.2%
Market Segmentation
Segment Share (%)
North 24
East 18
West 32
South 26
Rural 30
Urban 70

Market Structure

Product Variation
Company Share (%)
Cola Drinks:
Thums Up 29
Coca Cola 25
Pepsi 18
Non Cola Drinks:
Gold Spot 2
Fanta 9

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Mirinda 8
Limca 9
Overall Colas 62
Lemon:
Cloudy 7
Clear 3
Orange 17
Mango 3
Soda 8

(www.mofpi.nic.in)

Robust growth continues

The soft drinks industry continued on its path to recovery from the low growth
seen between 2005 and 2006, with higher volume growth in 2008 than that
seen in 2007. The mature sectors of bottled water, fruit/vegetable juice and
carbonates saw a dynamic year, with companies refreshing their products’
brand image and packaging to attract new consumers. Emerging product
categories, such as energy drinks and reconstituted 100% juice, saw high
double-digit growth rates, as companies increased their products’ penetration
in India. Off-trade volume growth was slightly higher than on-trade volume
growth, as convenient on-the-go packaging, company sponsored chillers in

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 kiranas and attractive supermarket displays fuelled off-trade sales across the
market.

Companies reposition their brands and

update product portfolios

With the industry back on the upward growth curve, companies refreshed their
brands by introducing new and more premium packaging designs, pack sizes
and communication campaigns. In 2008, bottled water was especially
dynamic, with all the major national brands following the cue of Bisleri’s
rebranding in late 2007. Carbonates and juice drinks were also reinvigorated
with new pack sizes that targeted on-the-go consumption by young adults.
With “naturally healthy” becoming a key focus for consumers and
manufacturers, fruit/vegetable drinks companies focused their efforts on
highlighting their products’ fresh fruit content and health attributes.
Companies put in motion plans to extend their product portfolios to emerging
categories such as 100% juice, energy drinks and flavoured water.

Indian Product Range

Flavour Ingredients Pack Product Company

Cola Cola Flavour 200Ml. Coke, Coca-Coal
carbonated water 300Ml. Thumsup
sugar 500Ml. RC RC cola
1 Litre
1.5 Litre Pepsi Pepsi
2 Litre

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Orange Orange Flavour + 200Ml. Fanta Coca-Cola
Carbonated Water+ 300Ml.
Sugar 500Ml.
1 Litre
1.5 Litre Mirinda Pepsi
2 Litre
Fruit Juice Mango Pulp+ Treated 250 ML Maaza Coca-Cola
water+ sugar Minute Maid Pullpy
Orange Pepsi
Slice
Tropicana
Appy Fizz Appy Fizz
Dabur
Real
Cloudy Lemon Flavour + 200Ml. Limca Coca-Cola
Lemon Carbonated Water+ 300Ml. LMN Parle agro
Sugar 500Ml.
1 Litre Mirinda Lemon
1.5 Litre Nimbooz Pepsi
2 Litre
Clear Lemon Lemon Flavour+ 200Ml. Sprite Coca-Cola
Carbonated Water + 300Ml.
Sugar 500Ml.
1 Litre 7’Up
1.5 Litre Dew Pepsi
2 Litre

Rural Market Scenario

Indian Rural Market

The Indian growth story is now spreading itself to India's hinterlands. Rural
India, home to about two-thirds of the country’s 1 billion population, is not

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just witnessing an increase in its income but also in consumption and
production. The interim Budget's focus on extending the National Rural
Employment Guarantee Act (NREGA) to all states with a US$ 5.83 billion
outlay for 2009-10 would benefit the rural economy. The rural economy got a
further boost with the farmer loan waiver of US$ 13.86 billion and the
ambitious Bharat Nirman Programme with an outlay of US$ 34.84 billion for
improving rural infrastructure. Additionally, the rural economy has not been
impacted by the global economic slowdown, according to a recent study by the
Rural Marketing Association of India (RMAI). The study found that the rural
and small town economy which accounts for 60 per cent of India’s income has
remained insulated from the economic slowdown. Moreover, rural incomes are
on the rise driven largely due to continuous growth in agriculture for four
consecutive years. According to a McKinsey survey conducted in 2007, the
rural India market would grow almost four times from its existing size in 2007,
which was estimated at US$ 577 billion. Furthermore, high-end brands like
Tommy Hilfiger are also bullish on small towns. Small towns currently
contribute around 20 per cent of the brand’s sales. This could go up to one-
third in two years’ time.

• ‘Rural’ – 75% population engaged in agriculture related activity.

• According to industry estimates 70% of population engaged in
agricultural activity.
� 700 million people (Aug. 2002)
� 1/3rd of country’s GNP
� 450 districts, 6,30,000 villages approx.

Rural India is also characterized by growing affluence:

agricultural output increasingly to early 215 millions tones in 2004
compared to 176 millions in 1991.

Key to success in Rural India

• Physical Distribution

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 • Channel Management
• Promotion and Marketing Communication

Rural Marketing Key Strategy

Three As

Availability:
• Capacity expansion – 25 prod. lines and doubled bottle
capacity.
• Unique and different distribution strategy – hub & spoke
distribution.
• Coverage of 1,58,342 villages by Aug. 2003 (81,383 in 2001).
• 2,00,000 refrigerators to rural retailers.

Affordability
• Introduction of 200ml bottle Priced at Rs. 7, closed the gap
between Coke and basic refreshments.

Acceptability
• Mass media marketing.
• Launched TVCs targeted at rural consumers.

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 LITERATURE REVIEW:
1-A study of factors responsible for brand preference in fmcg
sector”

The purpose of this paper is the study of factors responsible for brand
preference in fmcg products, increasing competition, more due to
globalization, is motivating many companies to base their strategies almost
entirely on building brands. Brand preference means to compare the different
brands and opt for the most preferred brand. This brand preference is
influenced by various factors.
According to this study many factors were find out for preferring a brand like
Brand persona
Brand constancy

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Brand loftiness
Brand value.
In the identification of factors affecting the brand preference, it was concluded
that brand persona is the most effective factor that affects the brand
preference. This brand persona deals with the personality aspects or the
external attributes of brand, thus it can be said that consumer prefer any brand
by looking at the external attributes of a brand.

-journal of ims vol 5 no.1, jan-june 2008

2-Colour and flavour rule consumer preferences: Study

The intensity of colour and the flavour are the key drivers behind consumer
acceptance of beverages, says a new study involving DANONE. But
packaging and labelling are not as important for winning over
consumers, according to findings published in the journal Food Quality
and Preference, The study involved consumers at different stages of
development and highlights the importance of adopting a “sensory
marketing approach,” said the researchers from French research
organisation Adriant, the University of Rennes 1, DANONE R&D, and
Institute Paul Bocuse.
“Companies need to continuously innovate to maintain market leadership,”
wrote the researchers. “When the market is overloaded the challenge consists
in creating innovative products able to attract and satisfy consumers.” “This
experiment showed the feasibility of the proposed multi-sensory design
method based on mixed qualitative and quantitative approaches.” The study
also demonstrates the importance of flavour and colour selection for new
products.
The global flavours market was been valued at some US$18bn in 2006
(Business Insights). Meanwhile, the value of the international colourings
market was estimated at around $1.15bn in 2007 (€731m), up 2.5 per cent
from $1.07bn (680m) in 2004, according to Leatherhead Food International
(LFI). Natural colours now make up 31 per cent of the colourings market,
compared with 40 per cent for synthetics, according to LFI.

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Bombarding the senses

By choosing to formulate a new beverage, the researchers noted that the new
product would need to be differentiated by improving the sensory
characteristics.
Four factors were identified for the formulation: four colour intensities), three
flavourings, two label types (soft versus hard), and two pack sizes (standard
versus oversize). By using both quantitative (hedonic testing) and qualitative
(focus groups) approaches, the researchers found that “the main factors which
drive consumer preference for this concept are colour intensity and
flavouring”. Indeed, colour intensity accounted for 43 per cent and flavour 32
per cent of the consumers’ overall liking. “Pack size and label type are taken
into account by the consumer to a lesser extend,” they added. “This
methodology of a qualitative screening associated to a conjoint analysis on
relevant sensory attributes has shown good performances to fit consumers’
expectation: it has now to be reproduced, as every brand, concept and product
is a unique combination designed for a specific consumer group,” concluded
the researchers

Source: Food Quality and Preference

Volume 19, Issue 8, Pages 719-726
By Stephen Daniells, 07-Oct-2008

3- Taste or health: A study on consumer acceptance of cola

drinks
This study examined the relative contributions of taste and health
considerations on consumer liking and purchase intent of cola drinks. Eight
types of commercial cola drinks were evaluated by 305 adult consumers who
also completed a brief questionnaire on food habits. Data were analyzed using
factor analysis. Results revealed that purchase intent of cola drinks was

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strongly related to degree of liking and to several key sensory attributes
including saltiness, drinks flavor and greasiness. These variables emerged as
the first factor in the analysis, suggesting that consumers perceive these
characteristics as being most important in their choice of cola drinks. Factor 2
described a health dimension and was related to respondents' attitudes toward
fat in the diet. Factor 3 comprised two remaining sensory attributes (color and
crunchiness), which apparently were of minor importance to the respondents.
These data suggest that in spite of current concern about reducing dietary fat,
health remains secondary to taste in the selection of cola drinks for consumers
in this population.

Source-Beverly J. Tepper and Amy C. Trail Journal of Food Science and

Technology, 15 September 1998

Rural Consumer Behavior

Consumer Buyer Behavior refers to the buying behavior of final consumers –
individuals and households who buy goods and services for personal
consumption. All of these final consumers combined make up the consumer
market. The consumer market in this case is Rural India. About 70% of India's
population lives in rural areas. There are more than 600,000 villages in the
country as against about 300 cities and 4600 towns. Consumers in this huge
segment have displayed vast differences in their purchase decisions and the
product use. Villagers react differently to different products, colors, sizes, etc.
in different parts of India. Thus utmost care in terms of understanding
consumer psyche needs to be taken while marketing products to rural India.
Thus, it is important to study the thought process that goes into making a
purchase decision, so that marketers can reach this huge untapped segment.

Factors influencing buying behavior

The various factors that affect buying behavior of in rural India are:

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1. Environmental of the consumer - The environment or the
Surroundings, within which the consumer lives, has a very strong
Influence on the buyer behavior, egs. Electrification, water Supply
affects demand for durables.

2. Geographic influences - The geographic location in which the rural

consumer is located also speaks about the thought process of the
consumer. For instance, villages in South India accept technology
quicker than in other parts of India. Thus, HMT sells more winding
watches in the north while they sell more quartz watches down south.

3. Influence of occupation – The land owners and service clan buy More
of Category II and Category III durables than agricultural
Laborers/farmers.

4. Place of purchase (60% prefer HAATS due to better quality, Variety &
price) Companies need to assess the influence of retailers on both
consumers at village shops and at haats.

5. Creative use of product ex Godrej hair dye being used as a paint to

color horns of oxen, Washing machine being used for churning lassi.
The study of product end provides indicators to the company on the
need for education and also for new product ideas.

6. Brand preference and loyalty (80% of sale is branded items in 16

product categories)

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 Cultural factors influencing consumer
behavior
Cultural factors exert the broadest and deepest influence on consumer
Behavior. The marketer needs to understand the role played by the Buyer’s
culture. Culture is the most basic element that shapes a Person’s wants and
behavior. In India, there are so many different cultures, which only goes on to
make the marketer's job tougher. Some of the few cultural factors that
influence buyer behavior are:

1. Product (color, size, design, shape): There are many examples

that support this point. For example, the Tata Sumo, which was launched in
rural India in a white color, was not well accepted. But however, when the
same Sumo was re-launched as Spacious (a different name) and in a bright
yellow color, with a larger seating capacity and ability to transport good, the
acceptance was higher. Another good example would be Philips audio
systems. Urban India looks at technology with the viewpoint of ‘the smaller
the better’. However, in rural India, the viewpoint is totally opposite. That is
the main reason for the large acceptance of big audio systems. Thus Philips
makes audio systems, which are big in size and get accepted in rural India by
their sheer size.

2. Social practices : There are so many different cultures, and each culture
exhibits different social practices. For example, in a few villages they have
common bath areas.
Villagers used to buy one Lifebuoy cake and cut it into smaller bars. This
helped lifebuoy to introduce smaller 75-gram soap bars, which could be used
individually.

3. Decision-making by male head : The male in Indian culture has always

been given the designation of key decision maker. For example, the
Mukhiya’s opinion (Head of the village), in most cases, is shared with the rest
of the village. Even in a house the male head is the final decision maker. In
rural areas, this trend is
very prominent.

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4. Changes in saving and investment patterns From gold, land, to
tractors, VCR’s, LCV’s

Rural Branding

It is the process of creating and disseminating the brand name so that it is

instantly

understood by the customer. It is different from branding in rural areas as there

people don’t understand English names of brands. They rather associate the

product with the picture on the package. E.g. “Laal sabun or red soap for
lifebuoy.”

Creating an Identity – under this process an identity is created in the minds of

the

customer. E.g. ‘TATA Namak – Desh Ka Namak’ here what TATA has done
is

they have given the salt a national image. They have associated it with the
country

and as a result rural consumers tend to connect with it and trust it more & they
also

remember it well. Enhance Recognition – The brand should be recognizable to

the

consumer and create top of the mind (TOM) consumer recall. E.g. Fevicol

‘majboot jod’. Building a brand Image – The brand should have a personality
of its

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own. E.g. Mahindra & Mahindra has built its brand image in the tractor sector.

Bhumiputra series of tractors, Sarpanch series have done very well in the rural

areas. Brand name has connected well with villagers.

RESEARCH DESIGN

A research design is a framework or blueprint for conducting the

marketing research project. It specifies the details of the procedures necessary
for obtaining the information needed to structure and/or solve marketing
research problem.
On the basis of fundamental objectives of the research we can classify research
design into two general types:

CONCLUSIVE RESEARCH
Conclusive research is designed to assist the decision maker in determining
evaluating and selecting the best course of action to take in a given situation.
Conclusive research can be further divided into two types:-
• Descriptive
• Experimental

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The research design used in this project is a DESCRIPTIVE DESIGN.

Descriptive study as the name implies is designed to describe something-for

example the characteristics of users of a given product, the degree to which the
product use the varies with income, age, etc.

SOURCES OF DATA COLLECTION:

Research will be based on only one source i.e. Secondary data.

SECONDARY DATA:

Secondary data will consist of different literatures like books which are
published, articles, internet and websites.

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 Findings

Following are the findings taken into consideration after the completing this
research study:
• An important finding that emerged out of the study was that 57%of
people like to have soft drinks while 43% go for juices. (Economics Times,
17th march2009)
• Through the research it was conveyed that weekly consumption of soft
drinks is higher than the weekly consumption of juices.
• A majority of Indian consumers consume soft drinks and fruit juices at
the time of parties & celebrations.
• Most of the consumers in rural India consume soft drinks because of its
taste and price.
• Most of the consumers consume fruit juices because it is healthy.

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• As it is seen that canned Juices enjoys the largest market share though
they do contain some preservatives but majority of the consumers
consider it healthy.
• Most of the respondents (77%) were of the strong view that
advertisements affect their purchases and the rest (23%) were not at all
affected by the advertisements.(http://www.foodindustryindia.com)

SUGGESTIONS
• With the changing lifestyle, people have started becoming more health
conscious. Therefore, the company should use more appropriate
marketing techniques to promote their fruit juice products like Mazza,
Minute maid pulpy orange, Slice, Tropicana etc. so that they can grab
more market share.
• The study shows that parties/celebrations are the places where these
drinks are consumed mostly. The company’s must try to increase the
sales by creating and focusing on more utilities so that their product is
used more frequently.
• As it is seen that people consider canned juices to be healthy with
preservatives. This shows that awareness level of the people is low and

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 needs to be corrected. Therefore, various methods like campaigns by
government, help by media, etc can be taken to change this.
• It has been observed that people prefer to have canned soft drink for
showing their styles but the price is slightly out of their reach (In rural
market) therefore it is suggested to the companies to reduce the price of
canned soft drink up to affordable level which is identified Rs. 15.
• Companies should also use time to time some more and new attractive
system of word of mouth advertisement to keep alive the general
awareness in the rural market as a whole.
• Kids constitute the second largest segment of the soft drink market. So,
more & more fun based advertisement for the brands should be
necessary. Some life style based advertisement is also necessary.

Conclusion

India is a primarily a rural country where more than 72% people resides in
rural area where main occupation is agriculture, Which is the bottom of the
Indian economic system Earlier Indian farmers where known for their
poorness and resurceless but now a days when government has their prime
focuses in rural area backed by the huge planed expenditure to improve the
rural economy of the country. In the last 50 year Indian farmers has improved
a lot, their life style expenditure pattern income level, taste and preferences has
seen a sea change. Many urban enmities are now a day’s present in the rural
area. We can easily find the goods and services that were earlier present only
in urban vicinity.

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 Today, economy is conformed to two major and far-reaching; change
from domestic to global and a change from the global to rural economy. Both
these changes are evolutionary. Corporate sector has already realized the vast
opportunity, existing in the rural sector and are trying to harness these
strategies specially aimed at rural markets.

Bibliography

www.cocacola.com

www.theeconomictimes.com

www.mofpi.nic.in

Food Quality and Preference Volume 19

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Indian Journal Of Marketing

Journal of ims

www.foodindustryindia.com

www.rediff.com

www.google.com