This action might not be possible to undo. Are you sure you want to continue?
A PROJECT REPORT ON
“FINDING OUT THE NEW BUSINESS OPPORTUNITY IN SUNDERGARH DISTRICT OF RURAL ORISSA FOR DABUR INDIA LTD.”
PROJECT REPORT SUBMITTED AT
REGIONAL COLLEGE OF MANAGEMENT,
BHUBANESWAR UNDER BIJU PATTANAIK UNIVERSITY OF TECHNOLOGY TOWARDS PARTIAL FULFILLMENT OF REQUIREMENT FOR THE AWARD OF THE DEGREE OF
‘MASTER OF BUSINESS ADMINISTRATION’
JITENDRA KUMAR NAYAK
UNDER GUIDANCE OF
SENIOR LECTURER R C M, BHUBANESWAR
DABUR INDIA LIMITED
I, Jitendra Kumar Nayak hereby declare that the summer project entitled “TO FIND OUT NEW BUSINESS OPPORTUNITY IN SUNDERGARH DISTRICT OF RURAL ORISSA FOR DABUR INDIA LTD.” submitted by me in partial fulfillment of Degree in Business Administration, Regional College of Management, under Biju Pattanaik University of Technology(BPUT), is my own. This work has not been submitted to any other university nor has been published ever before.
I would like to declare that the information provided in the project report is authentic to best of my knowledge, as it has been obtained through market survey done entirely by me and verified by the concerned authority.
DATE: 22.10.09 PLACE: BHUBANESWAR
JITENDRA KUMAR NAYAK REGD. NO: 0806247076 MBA (2008-2010) RCM.
IT IS MORE A LIABILITY FOR ME TO OWE MY DEEP SENSE OF ACKNOWLEDGEMENT AND GRATITUDE TO THE FACULTY OF MY DEPARTMENT, WHO HAS LENT ME ESTEEMED SUPPORT IN HIS ENDEAVOR. I WOULD LIKE TO PAY MY GRATITUDE TO MR.MUKESH MISHRA (SR. LECTURER) FOR HELPING THROUGH THROUGHOUT THE COURSE CURRICULUM FOR THE SUCCESS OF THE EVENT.
I am deeply indebted as, every stands on its own nerves, which lies beneath the skin. And his work is no exception; the person who is constantly seen into my success, is my guide MR. DHEEMAN BHATTACHARYA. [A.S.M. DABUR INDIA LTD.] He is not only my guide but also a constant motivator. Lastly, I have the pleasure of presenting this seminar report to my Department of M.B.A (RCM) and thankful to them for their kind consideration and timely responses.
JITENDRA KUMAR NAYAK Regn. No: 0806247076 M.B.A. (RCM)
I. II. III. IV.
5 6 7 27 30 35 38 39 41 42 43 44 45 46 47 48 49 50 52 53 55 56 60 64 65 68 69
V. VI. VII. VIII. IX. X.
XI. XII. XIII. XIV.
To whom it may concern Certificate of training Introduction Company profile a. Dabur business structure b. Manufacturing facility in India c. Distribution network d. Sustainability report e. Technology absorption f. Strategic intent Objective of the study Research methodology Sampling technique Tools to analysis Method of data collection Data analysis a. Analysis based on availability b. Analysis based on coverage c. Analysis based on mod e of transportation d. Analysis based on market share e. Analysis based on availability of different product f. Village status i. Villages having high sale ii. Villages having low sale Findings Suggestion Conclusion Bibliography
This is to certify that the work entitled “TO FIND OUT NEW BUSINESS OPPORTUNITY IN SUNDERGARH DISTRICT OF RURAL ORISSA FOR DABUR INDIA LTD.” is a piece of term project done by JITENDRA KUMAR NAYAK of M.B.A (4th trimester) under my Guidance and supervision for partial fulfillment of MBA curriculum Of Regional college of management ,Bhubaneswar. To the best of my knowledge and belief the term project Report:1) Embodies the work of the candidates them self. 2) Has been duly completed. 3) Is up to the standard both in respect to contents and language for being referred to the examiner.
DHEEMAN BHATTACHARYA AREA SALES MANAGER DABUR INDIA LTD.
This is to certify that the work entitled “TO FIND OUT NEW BUSINESS OPPORTUNITY IN SUNDERGARH DISTRICT OF RURAL ORISSA FOR DABUR INDIA LTD.” is a piece of term project done by JITENDRA KUMAR NAYAK of M.B.A (4th trimester) under my Guidance and supervision for partial fulfillment of MBA curriculum Of Regional College of Management, Bhubaneswar. To the best of my knowledge and belief the term project Report; 1) Embodies the work of the candidates them self. 2) Has been duly completed. 3) Is up to the standard both in respect to contents and language for being referred to the examiner.
Mukesh Kumar Mishra SR. LECTURER RCM [BHUBANESWAR]
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.
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.
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.
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.
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 CloseUp, 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.
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.
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-sale service, 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.
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.
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 strategyAnnual "meals" organized are quite popular and provide a very good platform for distribution because people visit them to make several purchases.
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 Durables Agri-Inputs (including tractors) 2 / 4 Wheelers Rs. 65,000 Crore Rs. 5,000 Crore Rs. 45,000 Crore Rs. 8,000 Crore
In 2001-02, LIC sold 55% of its policies in rural India.
Of two million BSNL mobile connections, 50% are in small towns / villages.
Total (% of Rural HH)
Total (% of Rural HH)
Marketers can make effective use of the large available infrastructure Post Offices Haats (periodic markets) Melas (exhibitions) Mandis (agri markets) Public Distribution Shops Bank Branches 1,38,000 42,000 25,000 7,000 3,80,000 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.
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.
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.
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.
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.
• • • • • • •
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 List of “20 Stocks You Must own”, Prepared by Forbes India
Dabur ranked 28th in ETBrand Equity Most Trusted Brands 2009 list
NDTV profit Business Leadership awards2008 for FMCG
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 International Business 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.
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
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.
Market Size- 21 Billion Dabur Brands- 1.3 Billion
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.
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.
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
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.
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
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.
C. DISTRIBUTION NETWORK USED BY DABUR INDIA LTD.
Shoppers & Consumer
Dabur is using four branches distribution network to reach its target section.
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.
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 1.4 INSTITUTIONAL 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.
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.
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 Sundergarh district of rural Orissa
SECONDARY OBJECTIVE Availability & Visibility analysis of Dabur in rural market of Sundergarh district of Orissa Coverage analysis of Dabur in rural market of Sundergarh district of Orissa To find out the feasibility of new sub stockiest in rural market of Sundergarh district of Orissa
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 the analysis.
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
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 Orissa
VIII. TOOLS TO ANALYSIS
The major tools used in this project for the analysis are1. Bar chart (Bar charts are used for comparing two or more values that were taken over time or on different conditions, usually on small data set ) 2. Pie-chart (Circular chart divided into sectors, illustrating relative magnitudes or frequencies) As the datas collected are various types of datas such as comparing based on value as well as the relative comparison, hence both the tools are to be used for the proper analysis of the datas collected.
IX. METHOD OF DATA COLLECTION
My Survey is conducted on two sources of data collection:a) b) a) Primary data Secondary data
PRIMARY DATA Looking into the objectives and information needed, I have chosen following two methods as per the response of the subject:i) ii) Schedules Personal Interview.
Scheduler Method Schedules (Performa containing a set of questions) are being filled in by the enumerators who are specially appointed for the purpose.
Personal Interview I have taken the opportunity to take personal interview wherever it was essential. The strategy was adopted to avoid the biased information and to spill out the required data from the respondent. This has supplemented the Schedules in a purposive manner.
SECONDARY DATA The Secondary data were mainly collected from different books, magazines, Journals, company’s Literature, Newspapers, Internet and from the company personnel.
X. DATA ANALYSIS
ANALYSIS BASED ON AVAILABILITY
Availability Available Not available Total
No Outlet 85 19 104
of % 82 19 100
The above chart shows that from 104 it is observed that Dabur products are available in 82 %( 85) shops & 18 %( 19) shops are not having Dabur products. So this indicates that Dabur has the maximum brand prevalence among all the other brands. In case of absence of Dabur brands in 19 shops shows that this patch of outlet is lacking distributors’ attention, brand awareness among retailers or consumers.
ANALYSIS BASED ON THE MODE OF COVERGE
Mode Coverage Not Covered Stockiest Sub-stockiest wholesale Total
of No of Outlets 19 35 12 38 104
% 18 34 11 37 100
I’ve visited around 104 retail outlets in Sundergarh District, which are present in 16 villages. My survey tells that among them 37% (38) outlets are covered through the Wholesaler, besides it 11% (12) shops are covered by Sub-stockiest & 34% (35) shops are covered by stockiest.
In my view the graph shows the poor coverage pattern of Dabur India Ltd. This is becauseI. II. III. Wholesalers are playing major role in coverage as they are doing the indirect coverage. The direct coverage points like the Stockiests or the Sub stockiests are covering the rural mass after the wholesalers. Retailers don’t bring huge stock volume rather than they prefer to keep the stocks according to the demand of the consumers & purchase the next lot when the old one exhausted. Stockiests cover only those places which are nearer to town or within 20 kms radius of distribution point. Unavailability of profitable schemes to the retailers. Presence of local brands which are used as the alternatives of Dabur. Local Brands give attractive schemes so the retailers do push marketing for local brands. ANALYSIS BASED ON MODE OF TRANSPORT
IV. V. VI. VII.
Mode of transport Not Covered Van Order Booking Self Total
No of Outlets 19 7 30 48 104
% 18 7 29 46 100
From the datas collected it has found thatTransportation done by the Outlets itself- 46%,Sub-stockiest cover by Order booking- 29%, Stockiest provide Van bit- 7% & Uncovered market- 18%. So theses datas draw our attention to following pointsMost of the rural consumers preffer to bring the required goods from distribution points by their own convenience. The distributors are not providing sufficient privilege of transportation to their distant retailers because they think that this will affect their profit margin. Distant consumers or retailers don’t show interest in purchasing from one wholesaler or stockist as they also keep in mind that which distributor will give them highest profit margin. So the retailers don’t show loyalty to a particular distributor & hence the distributor does not think for the transportation mode. Distributors also seek a considerable no of outlets present in a particular village who are interested to purchase his goods, then only he could think about arranging the transportation for them. Due to improper road condition & hilly areas also some distributors are unwilling to provide transportation in remote villages.
ANALYSIS BASED ON MARKET SHARE
Company Dabur HUL Any other Total
Sales (in Rs) 273500 361600 222700 857800
% 32 42 26 100
From the market studied for the business opportunity it was found that HUL is the market leader of the market enjoying 42% of the market share alone, where as Dabur is approaching near to it with 32%. From the survey it is found that Dabur is closely competing with HUL with a market share difference of 10%.My research work regarding market share saysIn this rural patch though HUL is the market leader but there is presence of some other local players who have captured the market by motivating the retailers for push sale. The other brands have somewhere dominated the sale of HUL in Biscuits, Chocolates, Confectionery, Personal, Health, Homecare, Detergent and Foods as the local companies provide hefty margins & offers. The rural consumers consider price more than quality so their purchase intent always bents towards the low cost products as they lack brand awareness.
There is a positive sign to Dabur that it has the market share close to HUL as its distribution network may not be effective but there are less no of local companies who substitute its products as it has got ayurvedic background. ANALYSIS BASED ON AVAILABILITY OF DIFFERENT PRODUCTS
Products Tooth paste Lal Dant Manjan Shampoo Amla Dabur lal tel Vatika Oil Hajmola Honey Glucose Anmol Chyawanprash Gulabari Pudin Hara Home made Odonil Odomos My analysis tells that-
Available (in no of outlets) 72 85 85 55 83 33 41 13 25 18 9 7 16 13 3 1
% 69.23 81.73 81.73 52.88 79.81 31.73 39.42 12.5 24.04 17.31 8.65 6.73 15.38 12.5 2.88 0.96
Dabur Lal Dant Manjan & Shampoo leads the rural market with 85% availability. Next to these Dabur Lal Tel & Toothpaste is available in most of the retail outlets including Medicine store, Grocery store as well as the betel shop. Products like Amla, Hajmola & Vatika are available in a moderate range in all shops Anmol, Pudin Hara, Glucose & Honey are the products which are present in the shops in a considerable amount because consumers prefer Local honey as it is cost effective. Odomos, Odonil, Chyawanprash & Gulabari are showing less availability in rural shops as they are priced very high & sophisticated in nature. 54
VILLAGE STATUS The villages so chosen for the research work can be divided into two categories according to the sales of Dabur in the particular villages. 1- Villages having High Sale (sale above Rs 15000) 2- Villages Having Low Sale (Sale below 15000) According to the above mentioned need classification of villages we can group the villages as followsVillages Having High sale Villages Having Low Sale
Village Balishankara Birikera Kutra Tumulia Karamdihi Khatkhurbahal Kinjirikela
Sale 16800 23300 29300 17000 32500 88000 41400
Village Alanda Balanda Jolongbira Katang Kukuda Lulkidihi Puruna Bisra Tunmura Suruda
Sale 2200 4000 6800 1800 3400 1400 3500 1600 500
In the above cases we noted that there are some markets having higher Sales as Balishankara, Birikera, Kutra, Tumulia, Karamdihi, Khatkhurbahal, Kinjirikela, we can appoint sub-stockist. Whereas in the other cases we can give spoke connection from the nearby market that either have or we going to have a direct covering point (Sub-stockist)
VILLAGES HAVING HIGH SALE
[N.B.-The sale of HUL & other products are considered to be the benchmark for the comparison] By analyzing the datas available about the sales figure it can be notedAs you can see HUL is having highest sales in these villages followed by Dabur & other companies. The proportionate of Dabur is not same throughout the area selected for the study. The village Khatkhurbahal is showing the highest sales & it is the most appropriate proposed Sub-stockist point.
PER CAPITA SALE
From the above data we can find out that:The per capita sale of HUL is higher in comparison to Dabur in Khatkhurbahal, Kinjirikela, Kutra, Balishankara & Birikera. The per capita sale of HUL is nearly same to Dabur in Karamdihi & Tumulia. Per capita sale is highest in Khatkhurbahal. The markets like Khatkhurbahal, Kinjirikela, Kutra, Balishankara, Karamdihi are having their own markets & they also distribute the products in nearby small markets.
MODE OF COVERAGE
The above figure reflects:Mode of direct coverage is higher in the markets as compared to that of indirect coverage. Markets like Khatkhurbahal, Kutra, Kinjirikela & Balishankara are mainly covered by Stockist. Markets like Tumulia, Karamdihi are less stockist influenced & Birikera shows absence of stockists. Birikera shows absence of sub-stockist & Balishankara, Kinjirikela & Kutra show fully covered. Hence, it will better to appoint direct coverage point at these set of villages.
MODE OF TRANSPORTATION
From the datas collected regarding transport it is obtained that:Some villages like Khatkhurbahal, Kutra, Karamdihi, Kinjirikela & Balishankara are getting transportation facility highly from the direct point of distribution. In case of Birikera & Tunmura they have got high indirect coverage.
VILLAGES HAVING LOW SALE
This chart shows usThe villages having low sales show an astonishing thing that other brands besides HUL & Dabur is sold in a higher volume. The sale of other brands is more in Jolongbira, Alanda, Katang & Tunmura. We must consider the Alanda, Katang & Tunmura because there the sale of HUL is low as compared to Dabur & Other brands.
PER CAPITA SALE
As we discussed above the sale of the market is very low, so ultimately it results in a very low Per Capita sale in the villages. My findings regarding this low sales volume say thatHalf of the villages coming under this segment shows high per capita sale of Dabur. Requirement of consumers may be so less that they could not go for buying the products in a large volume. Or it may be the case that people are poorer to afford the product.
MODE OF COVERAGE
From the figure presented above we get that:In the low sales segment, indirect coverage is found highest in most cases. Most of the Outlets depending upon the Wholesalers to avail the products which result to :• Higher indirect mode of coverage than that of the direct mode of coverage. • Market is mostly affected by the decision of the Outlet owner. Sub-stockists don’t contribute much to the distribution to this segment.
MODE OF TRANSPORTATION
Above Chart shows:Most of the Outlet owners have to move to the market to collect the product. Sales of the market are Very low. Van & Order booking seem very poor in this segment. Outlets preferring the Wholesaler to get the Product & they always switch over the distribution point according to their requirement. These factors results in availability of the products at high demand
All the surveyed shops & the facts generated stress on the following findingsDabur is a well known & widely appreciated brand in rural Orissa (Sundergarh Dist).Because from the 104 outlet surveyed Dabur was found to be available at 85outlets, i.e. it has a presence of around 82%. There is the presence of Sub Stockiest, but more people & retailers prefer to purchase the products from other channels. Those may be either a Stockiest who provide them the van to transport the products or a Wholesaler who is providing them the products with good margin. Customers & Outlets have complained about the less number of schemes available to them & the frequent price variation from person to person in the same distribution. Sub-Stockiest also functions like other retail outlets & doesn’t hire required number of staff. Credit facility is wide spread in the rural market, so the consumers prefer the retail outlet that gives them goods on credit. Low product line available to the rural consumers & the rural market does not show a clear boundary. I’ve found another strange thing that the distributors who have been entrusted with the task of covering a particular area are not completely accessible by the consumers or the outlets. There are some lapses on the part of distributors, may be due to the remoteness. When promotion comes into picture I’ve perceived that• The rural people are lacking brand awareness. • Their buying behaviour or purchasing decision is influenced by the peer group. • Consumers get to know about different products through the Advertisements shown on T.V., & wall paintings, point of purchase displays, & radio ads.
I want to suggest the following things for enhancing the market opportunities & extract enermous profitI. Direct coverage points (Sub-stockiests) should be assigned to the villages having higher Sales those are Balishankara, Birikera,
Kutra, Tumulia, Karamdihi, Khatkhurbahal, and Kinjirikela.
II. The area of operation by the Sub-stockiests/Stockiests should be located properly. Sub-stockiests should be directed to cover the nearby rural market at least once in a month or a fortnight to the village offering low sales. They should be clear cut directed to which area they can cover and to which they shouldn’t. Sales of Can be covered Status of the covering point Dabur from 6800 4000 3500 3400 2200 1800 1600 Karamdihi Birikera Rourkela Khatkhurbahal Kutra Kutra Rajgangpur Sub-stockiest (proposed) Sub-stockiest (proposed) Stockiest Sub-stockiest (proposed) Sub-stockiest (proposed) Sub-stockiest (proposed) Stockiest
Name of the Villages Jolongbira Balanda Puruna Bisra Kukuda Alanda Katang Tunmura
Company should provide financial assistance to the person involved in the direct coverage, for example ROI (Return on Investment). An optimized ROI can encourage the Stockiests or Sub-stockiests to go forProviding credit to the Retailer/Wholesaler. Cover some extra Outlet May move for greater frequency of Visit to the Outlets While appointing Sub-stockiests the characteristics which should be taken into account are:Personal Characteristics • • • Behavior of the person Goodwill of the person Proprietor involvement Financial Characteristics Capacity to invest Infrastructure available
• • • If a person is having the financial aspects more than the behavioural aspects then he will not succed in attracting customers or reinforce sales volume.
Besides all these the Organization should keep its eye on:1. As in the rural market most of the outlets are managed by women, they should be properly empowered & acknowledged about the product & services. 2. Using value-based pricing strategy. Rural people always have a tendency to buy things which give more satisfaction in comparison to price. So we must design the product which gives the rural customers value for money. 3. The changing perception of rural mass should be kept in track, as gradually they want to change their change taste & preferences. 4. The distribution channels should be localized. 5. Closely monitor the Stockiest points & encourage the Substockiest to sell the products with a remarkable margin to the rural customers & retail outlet. 6. Use backward and forward integration. 7. World-of-mouth communication strategy works better in rural markets as these markets enjoy limited reach of media. Once people become familiar with these products, they would perceive them as necessities. 8. Be careful on retail margins otherwise they promote local brands.
To succeed in the rural market, companies will need to adopt the 4Ps of Marketing to the 4As in their strategy- Awareness, Acceptability, Availability, and Affordability. Access and availability are equally important as the mantra for success in rural is “Jo dikhta hai wohi bikta hai”.
An income dispersal project by NCAER (National Council for Applied Economic Research) for 2006-07 shows that the no of poor household will shrink by half to 28 million from 61 million in 1997-98, whereas the middle income household will double & the rich household will treble over the decade in rural india. This upward push taking rural people from poverty to prosperity will lead to greatly increased purchasing power. Today’s non consumers comprising the rural poor will enter the market as first time buyers in large numbers.
To claim a larger share of growing rural pie will call for a radical shift in management thinking- From gross margins to high profit, from high value unit sales to a game of high volumes of capital efficiency, from the one-solutionfits-all mandatory to market innovations. Therefore the time to prepare for tomorrow is today.
WEB LINKS:www.dabur.com www.irmaindia.org www.wikipedia.co.in www.deccanherald.com www.indiantelevision.com
BOOKS REFFERED:Rural Marketing:R.V.Badi and N.V. Badi Cases in Rural Marketing:C S G Krishnamacharyulu & Lalita Ramakrishnan The Hindu: Business Line
1) 2) 3) 4)
District:-………………………………………………….. Village Name:-…………………………………………. Population:-…………………………………………….. Name of the outlet:………………………………………………………………………………………………... 5) Retailer’s Name & Address:-……………………………………………………… …………………………………………………………………………………………………. 6) Availability of Dabur (Yes/No):-………………… 7) Turnover of Dabur (If Yes):-………………………. 8) Turnover of HUL (Yes/No):-………………………. 9) Turnover of HUL (If Yes):-…………………………. 10) Turnover Of others:-…………………………………. 11) Total Sales per Month:-…………………………….. 12) Mode of coverage:A) B) C) Sub-Stockist Stockist Wholesaler
13) Covered By (Name of the Person):-……………………………………………. 14) Covered From (Name of the Place):-…………………………………………… 15) Mode of Transportation:-…………………………………………………………… A) Order Booking B) Van C) Self 16) Brands Available:-……………………………………………………………………… ……………………………………………………………………… ………………………………………………………………………
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue listening from where you left off, or restart the preview.