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This sector touches every aspect of human life. The FMCG producers now realize that there is a lot of opportunity for them to enter into the rural market. The sector is excited about the rural population whose incomes are rising and the lifestyles are changing. There are as many middle income households in the rural areas as there are in the urban. Thus the rural marketing has been growing steadily over the years and is now bigger than the urban market for FMCGs. Globally , the FMCG sector has been successful in selling products to the lower and middle income groups and the same is true in India. Over 70% of sales is made to middle class households today and over 50% of the middle class is in rural India. The sector is excited about a burgeoning rural population whose incomes are rising and which is willing to spend on goods designed to improve lifestyle. Also with a near saturation and cut throat competition in urban India, many producers of FMCGs are driven to chalk out bold new strategies for targeting the rural consumers in a big way. But the rural penetration rates are low. This presents a tremendous opportunity for makers of branded products who can convert consumers to buy branded products. Many companies including MNCs and regional players started developing marketing strategies to lure the untapped market. While developing the strategies, the marketers need to treat the rural consumer differently from their counterparts in urban because they are economically, socially and psycho-graphically different to each other. This paper covers the attractions for the FMCG marketers to go to rural, the challenges, the difference between the rural and the urban market and the suitable marketing strategy with the suitable example of companies and their experience in going rural.
ABOUT THE PROJECT
This project report provides a bunch of knowledge about demand of different FMCG products in rural areas as well it also provides a detail knowledge about the consumer preference towards different FMCG products. The report also provides the details about the history of FMCG sector in rural India. There is a plenty of data analysis and conclusions are given in the research paper. On the basis of feedback through questionnaire and observation method, I find out that the rural consumer has changed their strategy towards the products and starts to purchase them on the basis of their quality. As the result, there is close competition between the companies. As each of them are increasing their products, qualities, looks and providing better services everyday. Our analysis is based on sample results. It was a difficult task to gather the information from respondents by meeting them personally in order to get questionnaire filled. There was a lot of time pressure and sometimes unwillingness of respondents to respond.
1. INTRODUCTION 2. LITERATRE REVIEW RESEARCH METHODOLOGY DATA ANALYSIS
5. SWOT ANALYSIS 6. CONCLUSION 7.REFERENCES 8. APPENDIX
strong branding characterizes the sector. He introduced the sachet at 90 paise and then reduced it to 50-paise.It became a great success story and laid the roadmap for others to follow.000 sachets to 12 lakhs. low operating cost. A well-established distribution network. Background of the study:In 1970. 1983. which could manage a growth of 41% only. And that’s when the multinationals sat up and noticed him. The Fast Moving Consumer Goods Sector is the fourth largest sector of Indian economy with total market size of more than 60000 crore.000 crore by 2010 from Rs 93. He targeted rural and small-town consumers who used soaps to wash their hair.5%. Nirma was the first FMCG Company to initiate and produced goods according to rural consumers. during the last one year.000 crore at present. It was the initial stage of FMCG companies in India. However. intense competition between the organized and unorganized segments. In the early 1970s. .Sales zoomed from 35. outperformed the Sensex. Hindustan Lever Limited reacted in a way typical of many multinational companies. C K Ranganathan started selling shampoos in a sachet with an investment of Rs 15.43. the unquestioned leaders in that segment. The FMCG sector in India is expected to grow at a compounded annual growth rate (CAGR) of 9% to a size of Rs 1. they took no any interest to produced or sell products in rural market in India. the strategy and marketing style of FMCG companies had been changed. which were sitting pretty till then.000 and dared to take on the multinationals. the BSE FMCG Index has. when Nirma washing powder was introduced in the low-income market. MNC’s like HLL. Initally they took any sachet. As per as the time had passed. 4 . Lever and P&G. but after three months they restricted to Chik sachets. Nirma’s entry changed the whole Indian FMCG scene . woke up to new market realities and noticed the latent rural potential of India. With a growth of 52.There was a time when the FMCG companies ignores rural market.
rise in fuel cost and costlier credit. the number of rural households using FMCG products has grown from 136 million in 2004 to 143 million in 2007. the latest months for which such information is available. on other hand. the rural market is the one of the best opportunity for the FMCG sector in the India. Know about the different choices of rural consumers. rural market is one of the best opportunity and focusing sector for the major FMCG companies in India. we can say that it is determination of how much market captured by different FMCG companies. Need for the Study:In those days. the demand of FMCG is increasing continuously. The various need of the study is given as follows: To determine the raising demand of FMCG products in rural area. a clear indication that rural consumers are shifting from commodities to branded products. In one sense.Now at the present time. According to the Federation of Indian Chambers of Commerce and Industry. according to market research firm AC Nielsen. Urban consumers. thanks for inflation spiral. It is more wide and less competitive market for the FMCG. could go slow on FMCG expenses. Scope of study:- 5 . the rural market has grown faster than the urban market in key product categories in April-May 2008. Evidence suggests that for the first time. Definition of the Problem:The study of opportunity for FMCG products in the rural market is a sum total of different analytical survey of different FMCG products in the rural area. Each and every company is set to invest a huge capital for competition in rural market. As the income level of the rural consumers increasing.
India is a big market for FMCG companies. The total number of rural households is expected to rise from 135 m in 2002 to 153 m in 2010. The rising aspiration levels. Rural and urban potential Urban Rural Population 2001-02 (m household) Population 2009-10 (m household) % Distribution (2001-02) Market (Towns/Villages) 53 69 28 3. NCAER An average Indian spends around 40% of his income on groceries and 8% on personal care products. which represents the largest potential market in the world.With a population of 1 bn people. Changing lifestyles: Rising per capita income. increased literacy and rapid urbanisation have caused rapid growth and change in demand patterns. A larger part of the total spending pie along with a large base (in terms of population) makes India one of the largest FMCG markets. Low penetration and low per capita consumption: 6 . Around 70% of the total households in India reside in the rural areas.768 135 153 72 627.000 Source: Statistical Outline of India (2001-02). increase in spending power has led to a change in the consumption pattern.
4 88.Due to the large size of the market.5 90. hair wash etc.5 97. Objectives:There are following objectives of the project: To determine about the rural consumers preference towards FMCG products. in India is low.6 17.6 86.4 0.9 91. Penetration % Category Deodorants Toothpaste As per given in Skin Cream Shampoo the above chart. detergent bar.7 91. Utensil Cleaner rural market Instant Coffee shows a good Washing Powder improvement. 7 .4 In the presence Toilet Soap of some product Source: HLL investor meet 2006 categories like.6 22 38 28 6. The average consumption by rural households is much lower than their urban counterparts. it is same as in the urban level.1 87.1 59.9 14. This is more visible when comparison is done between the rural and the urban areas.6 2. washing powder etc.8 31. penetration level in most product categories like jams.1 88.1 48.8 84.9 15.5 74.6 37.6 5. Rural market is also improving in the other products category.5 52. Detergent Bar All India % Urban % Rural % 2. toothpaste. Existence of unsaturated markets provides an excellent opportunity for the industry players in the form of a vastly untapped market as the income rises. skin care. toilet soap.9 31.
Threats to us are that. Limitations:While surveying I encounter with some problems like some people were not willing to respond and few of them who responded were in hurry hence the active participation was lacking. the sample size we have taken for survey was small and it’s a difficult task to draw accurate conclusion or reach to an exact result on the basis of limited sample size. To know about the recent demand of FMCG products in rural area. Due to which we faced difficulties in collecting information regarding our questionnaire. Except it. our investment was limited and time was also less to go in depth. Hypothesis:I am also a citizen of rural area.as people were hesitating to give their income details so there is chance of error regarding income. Another problem which we face was that people were hesitating to give information about their income. Moreover. Literature review:- 8 . I uses my experiences and perceptions as hypothesis towards to made this project.
As per research of Purba Basu. (faculty of ICFAI business school). the same is expected to grow from 46 million to 59 million.different strategies of HUL and Marico etc. the absolute size of rural India is expected to be double that of urban India. In some sense we can say that rural market is future of FMCG. Factors such as village psyche. The characteristics of the market in terms of low and spread out population and limited purchasing power make it a difficult market to capture. She takes into consideration the study of National Council for Applied Economic Research (NCAER). Thus. (former vice president of LG) The economic growth inIndia's agricultural sector in last year was over 7%. Britannia with its low priced Tiger brand biscuits has become some of the success storyin rural marketing. compared with 3% in the industrial sector. According to Pradeep Tognatta. The Bottom of the pyramid marketing strategies and the 4 A's model of 9 . In urban India. Coco Cola’s 200ml bottle. It was Hindustan Lever that several years ago popularized the idea of selling itsproducts in tiny packages. Its sachets of detergent and shampoo are in great demand in Indian villages.Operational Research Rural market is one of the best opportunity for the FMCG sector. The model is of the stolid Anglo-Dutch conglomerate UnileverGroup. She added the strategies of different FMCG companies for capturing rural market like Titan’s Sonata watches. the number of middle and high-income households in rural area.This implies a huge market potentiality for the marketer to meet up increasing demand. which has enjoyed a century-long presence in India through its subsidiary HindustanLever Ltd. the lifestyle of rural consumers is changing. Rajesh K Aithal of IIM(L) had done his research on rural telecome in India . India is expected to grow from 80 million to 111 million by 2007. Rural Indian market and the marketing strategy have become the latest marketing buzzword for most of the FMCG majors. strong distribution network and market awareness are few prerequisites for making a dent in the rural markets. According to the NCAER projections.He explain that Rural markets are an important and growing market for most products and services including telecom.
it is a central activity in organizing things. Another way of looking at an operation is to consider it as a transformation process. Acceptability and Awareness provide us with a means of developing appropriate strategies to tackle the marketing issues for marketing telecom services in rural areas. sit on. Everything you wear. use. Successful cases like the Grameen Phone in Bangladesh and Smart Communications Inc in Philippines also provide us with some guidelines to tackling the issue. Operations as a Transformation Process Inputs ⇒ Transformation ⇒ Output Operations management is about the way organizations produce goods and services. Affordability. every treatment you receive at the hospital. every service you expect in the shops and every lecture you attend at university all have been produced. it is a detail study of different FMCG products used by rural consumers. This definition reflects the essential nature of Operations Management. As per concern of my research. Every book you borrow from the library.Availability. read or knock about on the sports field comes to you courtesy of the operations managers who organized its production. eat. 10 . It will provide a detail information about consumers preferences towards a good number of FMCG products which is too unique and different from those above researches.
information. To study variations in the preferences across different demographic variables. These resources are transformed into the final goods or services by way of other 'transforming' resources .Operations are a transformation process. place. relative importance of different attributes while responding to a sales promotion offer with conjoint design.the facilities and staff of the operation. quality. timing. or the customer itself. performance. price. You survive by giving customers with what they want Every Product or Service is really a bundle of different attributes. Product. they convert a set of resources (INPUTS) into services and goods (OUTPUTS). Objectives The present study is planned with the following objectives • • • • To study consumer preferences with respect to sales promotion in FMCG category To examine tradeoffs. To understand the media habits of the consumers. Customers are looking for a bundle of characteristics Total bundle provides the level of value customers deem appropriate 11 . These resources may be raw materials. Operations Management is all about providing customers with products and services. service. etc.
Buying products with the attributes they want at the lowest price possible • • • • • • • • Attributes Price Quality Image Performance Safety Place – distribution Time – delivery. availability How do you decide which product to produce? How do you find out what attributes your product should have? How do you get those attributes into your product? • • • What process? What resources do you need? Where do you get those resources? 12 .
Rather. data must be collected and analyzed.Marketing Research Managers need information in order to introduce products and services that create value in the mind of the customer. the value of information is determined by: The ability and willingness to act on the information. The reaction of competitors to any decision improved by the information. and what customers value this year may be quite different from what they value next year. The accuracy of the information. those who use it need to understand the research process and its limitations. As such. The amount of variation in the possible results. While it may involve market research. Market Research Market research deals specifically with the gathering of information about a market's size and trends. To maximize the benefit of marketing research. The goal of marketing research is to provide the facts and direction that managers need to make their more important marketing decisions. The level of indecisiveness that would exist without the information. The level of risk aversion. Marketing Research vs. Marketing research covers a wider range of activities. the attributes that create value cannot simply be deduced from common knowledge. marketing research is a more general systematic process that can be applied to a variety of marketing problems. but what determines its real value to the organization? In general. The Value of Information Information can be useful. But the perception of value is a subjective one. 13 .
Thus. To ensure that the true decision problem is addressed. the decision problem is translated into a research problem. The objective of the research should be defined clearly. The use of such scenarios can ensure that the purpose of the research is agreed upon before it commences. The corresponding research problem might be to assess whether the market would accept the new product. The cost of the information in terms of time and money. it is useful for the researcher to outline possible scenarios of the research results and then for the decision maker to formulate plans of action under each scenario. For example. a decision problem may be whether to launch a new product. 14 . most marketing research projects involve these steps: Define the problem Determine research design Identify data types and sources Design data collection forms and questionnaires Determine sample plan and size Collect the data Analyze and interpret the data Prepare the research report Problem Definition The decision problem faced by management must be translated into a market research problem in the form of questions that define the information that is required to make the decision and how this information can be obtained. The Marketing Research Process Once the need for marketing research has been established.
In other words. focus groups. the who. eliminating impractical ideas. When surveying people. people surveyed. Case studies can include contrasting situations or benchmarking against an organization known for its excellence. but in other cases different phases of the same research project will fall into different categories. or predict future demand for a product. why. and case studies. clarifying concepts. Such preparation allows one the opportunity to make any required changes before the costly process of data collection has begun. As opposed to exploratory research. and forming hypotheses. but it does not seek to test them. Exploratory research can be performed using a literature search. gaining insight. gathering explanations. seek to interview those who are knowledgeable and who might be able to provide insight concerning the relationship among variables. Exploratory research is characterized by its flexibility. but rather. and the method of analysis prior to beginning data collection. when. Exploratory research has the goal of formulating problems more precisely. descriptive research should define questions. 15 . determine the proportion of the population that uses a product. Descriptive research is more rigid than exploratory research and seeks to describe users of a product. what. exploratory research studies would not try to acquire a representative sample. Exploratory research may develop hypotheses. In some cases the research will fall into one of these categories.Research Design Marketing research can classified in one of three categories: Exploratory research Descriptive research Causal research These classifications are made according to the objective of the research. and how aspects of the research should be defined. surveying certain people about their experiences. where.
Because errors can occur and important explanations may be missing in 16 . longitudinal studies are not necessarily representative since many people may refuse to participate because of the commitment required. Cohort analyses are useful for long-term forecasting of product demand. A special type of cross-sectional analysis is a cohort analysis. Secondary data may be internal to the firm. Causal research seeks to find cause and effect relationships between variables. which tracks an aggregate of individuals who experience the same event within the same time interval over time. Crosssectional studies sample the population to make measurements at a specific point in time. Data Types and Sources Secondary Data Before going through the time and expense of collecting primary data. one should check for secondary data that previously may have been collected for other purposes but that can be used in the immediate study. The government census is a valuable source of secondary data. It accomplishes this goal through laboratory and field experiments. thus allowing one to monitor behavior such as brand-switching. or may be external to the firm such as published data or commercially available data. However. The disadvantages are that the data may not fit the problem perfectly and that the accuracy may be more difficult to verify for secondary data than for primary data. Longitudinal studies are time series analyses that make repeated measurements of the same individuals. Some secondary data is republished by organizations other than the original source. Secondary data has the advantage of saving time and reducing data gathering costs. such as sales invoices and warranty cards.There are two basic types of descriptive research: longitudinal studies and cross-sectional studies.
purchase intentions. and relationships examined. Behavior 17 . brand awareness Intentions . Whether the data is useful in the research study. so motive is a better predictor of future behavior than is past behavior.whether the data is dependable and can be verified. quality and analysis of the data. Motivation . and questionnaire design. Objective of the original data collection. response rate. units of measure. Some common types of primary data are: Demographic and socioeconomic characteristics Psychological and lifestyle characteristics Attitudes and opinions Awareness and knowledge . secondary data must be supplemented by primary data originated specifically for the study at hand. Errors and accuracy . including definition of variables. one should obtain secondary data directly from its source. There are several criteria that one should use to evaluate secondary data.for example. Primary Data Often. including data collection method.a person's motives are more stable than his/her behavior. Presence of bias in the data. intentions are not a reliable indication of actual future behavior. sample size and sampling technique. Nature of the data. categories used. While useful. Specifications and methodologies used.republished data. How current the data is and whether it applies to time period of interest. One also should consider who the source is and whether the results may be biased.for example.
such as attitudes. however. Observation is less versatile than communication since some attributes of a person may not be readily observable. Observation also might take longer since observers may have to wait for appropriate events to occur. and motivation. intentions. Industrial Segment Personal Care Household Care Branded and Packaged Food and Beverages Spirits and Tobacco Branding Distribution Network Contract manufacturing Large Unorganized Sector 18 . knowledge. Observation typically is more accurate than communication. since one needs only to ask for the information. the response may not be accurate. awareness. Communication usually is quicker and cheaper than observation. For example. in a personal interview the respondent's perception of the interviewer may affect the responses. This method is versatile.Primary data can be obtained by communication or by observation. Personal interviews have an interviewer bias that mail-in questionnaires do not have. Observation involves the recording of actions and is performed by either a person or some mechanical or electronic device. though observation using scanner data might be quicker and more cost effective. Communication involves questioning respondents either verbally or in writing.
The FMCG sector is witnessing rapid growth in rural areas and is estimated to grow by 40 per cent compared to the growth of 25 per cent in urban areas.Market Players Domestic Players:ITC Limited Marico Nirma Limited Foreign Players:Cadbury India Limited Cargill Coca Cola Colgate Palmolive India Hindustan Unilever Limited Nestle India Limited PepsiCo Trends in Sectors The FMCG sector has been registering double-digit growth in sales since the last couple of years. 74 billion. with annual revenues of US$ 14. 19 . it is the one of the most promising sectors. FMCG companies have acquired about 15 companies and have spread their presence in more than a dozen countries. PepsiCo has announced a US$ 500 million investment in India over the next three years. Currently.
Market size (Source: IBEF FMCG Analysis) 20 .
21 .Cellular telephone is also define as a type of short-wave analog or digital telecommunication in which a subscriber has a wireless connection from a mobile telephone to a relatively nearby transmitter. packet switching for access to the Internet. cellular telephone service is available in urban areas and along major highways. Generally. and MMS for sending and receiving photos and video. In addition to the standard voice function of a telephone. portable electronic device used for mobile communication. As the cellular telephone user moves from one cell or area of coverage to another. current mobile phones can support many additional services such as SMS for text messaging. the telephone is effectively passed on to the local cell transmitter. The transmitter's span of coverage is called a cell. which is in turn interconnected to the public switched telephone network (PSTN) (the exception is satellite phones. email. Most current mobile phones connect to a cellular network of base stations (cell sites).Product Review Cellular/Mobile phone The Cellular telephone (commonly "mobile phone" or "cell phone" or "handphone") is a long-range. A newer service similar to cellular is personal communications services (PCS). A cellular telephone is not to be confused with a cordless telephone (which is simply a phone with a very short wireless connection to a local phone outlet).
1992).Usually the consumer uses their attitude towards the ad (Aad) in brand choice equaled that of attitude towards the brands (AB). mainly from friends and families. 2003. even though consumers may like the ad that they see. Ads for less popular brands may be less successful even though the content may be good. However according to study by Biehal. Stephens and Curlo (1992) whether consumers like or dislike an ad does not necessarily lead to brand acceptance or rejection.Moutinho & Van Raaj. (2002) were easier for customer to remember than ordinary ads by increasing attention to it.Brand preferences and advertisement Students leant about cellular phone from many sources. This thus increased attention to the brand being advertised. it does not necessarily mean that they will go out and buy the brand advertised. Exposure of an ad is crucial to be effective in changing consumer knowledge. it must grab the attention of its target audience. Gupta & Lehman. ads for brand leaders are more successful due to the influence of the brand (Simon.Prevoius study have proven that females were more 22 . Putrevu. Whether a promotion and advertising hurt or help a brand is under-researched (Mela.However. Best & Coney. Advertisers must remember that advertising messages are interpretend differently between different genders (Maldonando. 1996). ‘Ads originality’ as defined from Pietes. 2003. 2001). Liking towards the brand itself can influence liking for the brand (Hawkins. attitude and behaviour (Evans. Hogg & Garrow. 1997). So. Tansuhaj & Muehling. regardless of the content. through advertisement and from their own experience. advertisement help brands by making consumer less price sensitive and more loyal. 1970). In the long-run. Warlop and Wedel. And for the ad to be seen.
likely to engagae in elaboration than men (Maldonado & Muehling, 2003). Hogg and Garrow (2003) found that women paid more intention about the details of the characters of an ad when asked to analyze advertising messages. They said that this may be explained by the fact that females have a greater tendency than men to consider external information and information related to others. Women are ‘comprehensive processors’ who try to gather all available information about the product.
In building brand preferences, Alreck and Settle (1999) proposed six strategies: 1) Need association- the product/brand linked to need through repeated messages. 2) Mood associations- brands should be associated with good feelings through slogans,songs. 3) Subconscious motivation-use of symbol to excite consumers’ subconscious motives. 4) Behaviour modification-consumers are conditioned to buy the brand by controlling cues and rewards. 5) Cognitif processing-penetrating perceptual and cognitive barriers to create favourable attitudes towards the brand/product. 6) Model emulation- portraying idealized lifestyles for consumers to imitate.
However, this study focused only on the symbolic or tangible elements in influencing brand preference. It did not discuss tangible aspects (i.e product characteristics) of influencing brand preference. Advertisement can change consumer’s
perception of a product in terms of attributes content and proportion and also influence consumer’s taste for attributes ( Gwin & Gwin, 2003)
Brand preference and product attribute Attributes are the characteristic or features that an object may or may not have and includes both intrinsic and extrinsic (Mowen & Minor, 1998) .Benefits is the positive outcomes that come from the attributes.People seek products that have attributes that will solve their problems and fulfills their needs (Mowen & Minor, 1998). Understanding why a consumer choose a product based upon its attributes helps marketers to understand why some consumers have preferences for certain brands (Gwin & Gwin, 2003). In the study by Gwin and Gwin (2003), the Lancaster model of consumer demand (1966, 1979), also referred to as the product attributes model, was used to evaluate brand positioning.This model assumes that consumer choice is based on the characteristics (or attributes) of a brand.Each product is abundle of attributes and that choice is based on maximizing utility/satisfaction from the attritubes subject to budget constraints. However there were two limitataions of the model: (1) the model is static and deterministic and (2) the model does not explain how the preferences for attributes were formed.This article also also didi not mention if experience with the product played a part in influencing attributes preferences. Both tangible nad intangible attributes of a product are equally important in choosing a product or brand (Myers, 2003). There is no evidence that certain attributes
are more related to customer loyalty than others (Romariuk & Sharp, 2003). It was, found though, that the more attributes (non-negative) associated with a brand, the more loyal the customer (Romariuk & Sharp,2003).Romariuk and Sharp (2003) suggested that marketers should focus more on how many attributes the brand should be associated with and not what attributes. However, this study did not specify what sort of attributes marketers should associate the brand with; i.e. whether they should be relevant or irrelevant attributes, tangible or intangible etc.This is because it is important that consumer accurately lean about product attribute performances since it would influence their interpretations of product performance by causing memory encode and retrieval bias.Unfounded product attribute relationship beliefs can mislead them into expecting something that is not there.(Mason & Bequette, 1998). Hence if products fall short of customer expectataions,then dissactisfaction would result.Nevertheless, it was found that through irrelevant, some attributes may still be important in influencing consumer choice.Persistent preferences for product attribute soccurs when there is low ambiguity in the initial potential choice for salient attributes coupled with experience,although those attributes maybe irrelevant (i.e. an attributes usually not associated with favourable brand outcomes (Muthukrishnan & Kardes, 2001). Consequently, Mason and Bequette (1998) also said that perceptions on product performance based on salient attributes are more important in influencing the consumer purchase behaviour than actual product attribute performances. Similarly, Myers (2003) concluded that brand equity may be more influenced by attribute knowledge more than consumer preference. For low-involvement products, consumers have more objective view of the nature of the attrinutes (eg. food, cosmetics) because they are constantly being
Human values influence the importance of the product’s tangible attribute importances that are already important to consumers. 1998).Similarly Rioo.tangible/intangible attribute importance). self-direction. Different consumer groups place different importance on different attributes (Warrington & Shim.Retailers need to be knowledgeable of the product attributes perceived as the most important by each individual consumer group in order to build and maintain market share (Warrington & Shim.).It was found that consumers categoriez as LP/SB (low product involvement/strong brand commitment) placed greater importance on product attributes and product orientataions than LP/WB (weak brand commitment) consumers. However perception of product performance on the salient attributes are more important than actual performance (Mason & Bequette. 2000). In his study on the relationship between human values and consumer purchases. product preference and tangible attribute importance with how consumers perceive the product (i. hedonistic.2000). or images added to the product due to its brand names). Vasquez and Iglesias (2001) sugggeated that consumer evaluation of a product can be broken down into evaluation related to product (tangible or physical attributes) and brand name (intangible attributes. which placed the most importance on price.Mowen and Minor (1998) suggested that marketing managers should know the attributes that consumers expect in a product and how positively or negatively they rate these attributes to help develop and promote a successful product. security etc. conformity. It is the consumer who determines which attributes matter to them. Allen (2001) found there was a significant association between human values (eg. achievement.e symbolic meaning.advertised and promoted.e tangible attributes) and how they evaluate the product (i. 26 .
as mention earlier. Mason and Bequette (1998) suggested that perceived product performance is more important than actual attribute performance. 2001). Howevwer. usage effectiveness. The purchase and consumption of products is increasing regarded by consumers as an indirect way of communication to improve their self image and deliver certain impressions to other people in their environment (del Rio. which may play a role in making attributee important to consumers that might not have been considered before (Gwin & Gwin.Vasquez & Iglesiaz. This may be due to consumer biasness and prejudice.Vasquez & Iglesiaz. On the product related benefit side. 2001).Romariuk & Sharp (2003) suggested two objectives of short-term and long-term brand building. consumer evaluate product performance based on its capabilities. 2003). 2001).In the long-run. The biasness can 27 . The brand name of the product itself is an important attribute. managers need to identify a specific attributes to be communicated to the market. Big brand means a better image and a better product (del Rio. Brands have both functional (product-related) and symbolic dimensions (del Rio. Consumers’ product evaluations are influenced by memory.The key aim is to develop likeable advertisement. value for money and reliability. Similarly Myers (2003) concluded that brand equity might be influenced by attribute knowledge more than consumer preference. Therefore the brand name benefits perceived by consumers is highly interrelated to the product-based benefits.Vasquez & Iglesiaz. 2003).based on which message gave the best execution.managers need to build up a ‘bank’ of consumer perception about the brand to make it the one most often thought of and make it difficult for competitors to have access to the minds of consumers (Romariuk & Sharp.Markerters should consider using advertisement. In the short term.
57 crores. 1998.be reduced by having current information. Dabur International. it’s not surprising that brands that consumers believe offer superior value are most preferred brands chosen often (Myers. 2002). Consumers perceive that a higher price can be attributed to the higher cost of quality control (Siu & Wong. Price is another form of attribute used by consumers to evaluate a product. is the fourth largest FMCG Company in India. The market penetration of Dabur is of about 1. Dabur India Dabur India Ltd. Dabur deals in Health care and Personal care products.5 million retail outlets all over India with 47 C& F agents and more than 5000 distributors. Today. Dabur Foods 2.Further divided into Asian Consumer Care in Bangladesh. Brands with higher equity resulted in greater preferences and high market shares. Siu & Wong. Dabur India is divided into 2 major strategic business units: Consumer Care Division Consumer Health Division Dabur has 3 subsidiary group companies: 1. 28 . Dabur has a turnover of Rs. 2002). Therefore. experience and knowledge (Mason and Bequette . Therefore price can have a positive or negative influence on customers. with a higher price indicating higher quality (Mowen & Minor.1998). 2003).Price can sometimes be an indicator of quality. Some consumers are highly price sensitive (elastic demand).1899. 1998). Dabur Nepal 3.whereby a high prices may shift consumers to competitive brands (Mowen & Minor. African Consumer Care in Nigeria and Dabur Egypt.
4 189.) 03-04 04-05 05-06 1148 11.2 3.1 136.5 FMCG (Rs.0 148 5.3*** Sales Other Income Earnings before Tax Profit before Tax Profit after Tax EPS (Rs) Exports to 29 .1 113.0 72 2.5 187. In Cr.5 0 4.9 109.6 80.9 165.1 3.70 5.2 1369.5 1268.4 243.Dabur has 13 ultra-modern manufacturing units in: Jammu & Kashmir Uttar Pradesh Himachal Pradesh Madhya Pradesh Rajasthan Uttaranchal West Bengal Silvassa Nepal Dabur's Brands Vatika Anmol Hajmola Dabur Amla Dabur Chyawanprash Dabur Lal Dant Manjan Financial for Past 4 Years 02-03 1048.7 0 11.3 214.4 101.
Today Dabur is marketing its products in more than 50 countries. Far East. Dabur also exports herbal products to Middle East. Africa. and other Asian countries. It exports Active Pharmaceutical Ingredients to Latin America. United Kingdom Egypt Bangladesh Dubai Nigeria Nepal Dabur has its offices and representatives in America. Europe. Europe. 30 . and several European countries. and Africa.
Sahibabad Region. Gorakhpur SAMPLING PROCEDURE: .Random Sampling Research design: The primary research was exploratory in nature. Exploratory research is appropriate since it helps in identifying the opportunities present in the decision situation and it also serves as a step towards further research activity.RESEARCH METHODOLOGY SAMPLE DESIGN SAMPLE UNIT: All working people are included both the genders i.100 SAMPLE REGION: . Sampling: 31 . males and females irrespective of their education level.e. SAMPLE SIZE: . The study aimed at identifying the functional gap between selection and utilization of FMCG products in Institutional Markets with specific reference to Hotel Industry and Flight Catering establishments and hence primary research was most appropriate for meeting the needs of the objective in view is Exploratory research.
Now in a bear market scenario. the FMCG did not match the Index equivalently but managed to follow the trend by almost 3. During last 52 weeks the SENSEX has lost by around 53%.5 times gain for the same period. Product Research In this year when almost all the stocks have been tumbled heavily on the Dalal Street. Under probability sampling. but is growing with healthy pace. Sensex witnessed strong bull market journey with almost 7 fold gains from 3000 in 2003 to 21000 in 2008. while BSE FMCG has just lost by below 10%. the one sector which completely outperformed the market is FMCG. During the July-September quarter the aggregate revenues increased by 22% despite cost inflation and aggregate net profit grew by almost 20% on yearly basis. the FMCG sector is not witnessing any visible sign of demand destruction. As the economy is facing the slowdown in demand. Simple random sample was undertaken because the population from which the sample is to be chosen is homogenous. better product mix and organic and inorganic expansion has shown consistent growth for the industry and is expected to continue the drive the growth further. the FMCG is bucking the trend which is a big sign of relief for investors. appropriate pricing polices by companies. Hence we believe FMCG is strong and defensive sector and one should consider this sector for his portfolio and allocate some portion for it. Simple random sampling technique was undertaken since there was a definite sampling frame and prior information on the objects or sampling units were available before the sampling process. The data was collected through questionnaire and the research was designed to employ appropriate statistical tools.Probability sampling method has been used in this study and all catering establishments had equal chances of being included in the sample size. 32 . The bunch of factors like increased spending power in rural markets.
while the loan waiver changes sentiment substantially. where 50% of FMCG sales come from. The country has been blessed with good monsoons and good agricultural production. has been quite strong. so slowdown in demand is not expected for FMCG. while higher and middle class urban consumers demand is inelastic for the goods and services that FMCG companies offer. A lot of money is being spent in rural India through employment generation schemes. The food inflation has also helped farmers with rise in income. These help FMCG companies with more revenues. 33 .SENSEX v/s BSE FMCG INDEX Buoyant rural spending Growth in rural India. Hence the purchase power in rural areas has increased and spending behaviour is also changing.
The government had also supported with decrease in peak import duty for raw materials and also excise cut in packaging material. However the companies made forward purchases or built up additional inventories in the latter part of 2007 and in the first quarter of 2008. had covered most of its requirements for the June quarter through forward purchases in the March quarter itself. Dabur India. for which packaging is a key input. where prices bear clear linkages to crude oil. as a range of inputs palm oil. for instance. to guard against a further rise.Favourable Pricing Strategies With the cost of almost every input ranging from palm oil and milk to packaging material zooming upwards. which have taken price increases on their products. For raw materials such as palm oil and packaging material. it has been big relief for FMCG companies.Hindustan Unilever and Dabur . had increased prices by 3-4% earlier this year while Dabur had upped prices of hair oil. 34 . FMCG companies had increased the price smoothly to mange cost escalation. packaging plastics and petroleum derivatives have seen a 20-30% price correction. the companies. Companies with large product portfolios and a presence across price points . Uttarakhand will be significant benefit for FMCG companies. Jammu and Kashmir. FMCG makers may have less to worry about on the raw material front over the next few months. Decrease in Raw Material Prices During the second quarter the crude price has fell to almost $60 from record high of $ 147. Marico had increased prices of Parachute hair oil by 5-6% while Hindustan Lever too had upped prices of a few brands by about 1 to 28%. tracking the meltdown in crude oil prices which will recover the operating margins. The tax holiday at Himachal Pradesh. are likely to benefit in the forthcoming quarters. Though to match rising cost the companies had increased product pricing.managed to offset margin pressures through shifts in the product mix. Now. Colgate. which will also continue to improve bottom lines. With inflation showing signs of easing. chyawanprash and toothpaste by 4% and shampoos by 7%. the operating margin has shrunk by 150-200 bps. after this challenging phase.
the FMCG majors are going ahead with expansion plans organically and inorganically. to meet the increasing demand for its products. expected to be operationalised by 2010. further pushing up the FMCG sales. 90 crore.Better Product mix The companies are improving its product mix with changing dynamics of consumer behaviour.7 crores in an all-cash deal. the Indian rural regions too are witnessing change in lifestyle.15% of women’s skin-care company Fem Care Pharma (FCPL) for Rs 203. • • Nestle India is also considering more acquisition in the country. Besides. ITC is to increase its Food Products to tap more market. • After earlier brand acquisitions in Egypt and South Africa the Marico group is looking at more African acquisition to service new markets across Africa and other countries in nearby region. 35 . As consumers are becoming health conscious. • Dabur India acquired 72. the manufacturers are ready to woo them by offering more Ayurvedic and Herbal products. Change in life-style affluent Indians have also spurred the growth for FMCG products with increasing ‘premiumisation’ of portfolios and categories like anti-aging solutions. hair colors etc. • Emami is planning to set up a manufacturing facility in Africa with an investment of Rs. Expansion to continue Though the news of plant shut down and expansion project getting delayed of the major Indian companies are getting more space in Indian media. as it looks to strengthen its hold in the continent. It is also set to start production of personal care products from its new plant in UAE by December 2008.
76 802. The companies are having almost negligible debt proportion in their balance-sheet.00 1351.company Market Cap Rs.09 20.87 52 week price High 524.00 1200.00 131.82 26.0 0 239. Hence.6 7 699.50 Low 342.50 456.15 18.15 DebtEquity Ratio 0.00 11.04 0. Among heavyweights HUL has strong presence in the Indian FMCG market so one can hold the stock or buy at decline.10 430. change in lifestyle and with established distribution system across the country this sector is also growing with new market horizons and also seize sustained growth in coming years. Cr 5235 52142 13218 64914 CMP Net Sales Rs Cr % Growth 18.50 1880.30 Dabur 6497 India P/E Ratio High Low Debt- Future Outlook Indian FMCG sector is fourth largest sector in the economy.13 18.17 4110.82 % Growth 16.12 P/E Ratio 20. ITC is still having major part of revenues from cigarette business. Over a period of time with growth in GDP. Cr 63.63 13.6 0 172.95 236.02 0.3 7 3862.02 Net Profit Rs. Indian FMCG market experienced 16% growth in FY 07-08 and expected to grow by roughly 20% in FY 08-09. 36 .18 4. In the Industry all the major players are growing consistently. one should add these stocks in his portfolio.82 18.02 0. It makes very safe and strong case for anyone to invest.22 21. Marico is also the leader in hair care market and aggressively increasing its presence in overseas market organically and inorganically.02 0.97 26.05 60.90 265.15 75.9 1 1110.0 0 132. Colgate is the market leader in the oral care segment with consistently holding significant market share in the segment.04 Colgate Hind.00 14. Dabur is diversifying in to many segments with increasingly adding presence in global market as well. P&G is increasing penetration in Indian markets especially in health care and feminine hygiene.08 22. Unilever Nestle ITC 384.40 133. Its FMCG business is still in the investment phase. which can give good returns inlong term.72 107.30 169. We believe these stocks can outperform in bearish market scenario.
the FMCG market potential has always been very big. In that sense. Their strategy has become two-pronged in the 37 . Nirma’s entry changed the whole Indian FMCG scene.7% 11. Post liberalisation not only saw higher number of domestic choices.9% 14. woke up to new market realities and noticed the latent rural potential of India. The government’s relaxation of norms also encouraged these companies to go out for economies of scale in order to make FMCG products more affordable. Private Consumption Expenditure Trends CACR FY81 FY91 FY01 Food. However.4% 11. At the time. which were sitting pretty till then. from the 1950’s to the 80’s investments in the FMCG industry were very limited due to low purchasing power and the government’s favouring of the small-scale sector. Tobacco 11. There too. today soaps and detergents have almost 90% penetration in India.0% 11.India has always been a country with a big chunk of world population. but also imported products. Rising standards of living urban areas coupled with the purchasing power of rural India saw companies introduce everything from a low-end detergent to a high-end sanitary napkin. Hindustan Lever Limited (HLL) was probably the only MNC company that stuck around and had its manufacturing base in India.8% MNC’s like HLL. The lowering of the trade barriers encouraged MNC’s to come and invest in India to cater to 1bn Indians’ needs. The company focused on the ‘value for money’ plank and made FMCG products like detergents very affordable even to the lower strata of the society. be it the 1950’s or the twenty first century. Consequently. the consumers had limited choices. the focus of the organised players like HLL was largely urbane. However. Beverages.9% Personal Care 13. Nirma became a great success story and laid the roadmap for others to follow.
However.1% 12. biscuit companies. So you could see all companies be it HLL. companies that have taken to rural India like chalk to cheese have seen their sales and profits expanding.7% 25.3% Net Profit 53. even these companies have looked to reach consumers at the slightly lower end. trying to outdo each other in getting to the rural consumer first. Henkel. In the last 3 years. For example.6% 9. One. Godrej Consumer.3% 16. One of the biggest changes to hit the FMCG industry was the ‘sachet’ bug. Each of them has seen a significant expansion in the retail reach in mid-sized towns and villages. in the last couple of years. like Nestle. Consequently. detergent companies. The company’s focus in the last decade has largely been on value added products for the upper strata of society.3% 19. Reckitt Benckiser and Colgate.0% 4. it is one the biggest beneficiaries of this (see table). shampoo companies. have piggy backed on other FMCG major’s distribution network (P&G-Marico). and consequently. which have till date catered mostly to urban India but have still seen good growth in the last decade.4% 9. currently 50% of all HLL sales come from rural India.9% 19.2% 33. chocolate companies and a host of others. have introduced products in 38 .last decade. upgrade existing consumers to value added premium products and increase usage of existing product ranges. Marico. invest in expanding the distribution reach far and wide across India to enable market expansion of FMCG products. Some who could not do it on their own.0% 13.9% 2.7% Cadbury Colgate HLL Marico Nestle P&G Hygiene Reckit & Benckiser There are others. hair oil companies. CAGR growth in last 10 years… Sales 16. Secondly.5% 25.
which walks away with spoils when two monkeys fight (HLL and Colgate). Focus will be the key to profitability (ala HLL). and finally. There are numerous other examples of this. Indian FMCG companies do offer long-term growth opportunities given the low penetration and usage in most product categories. innovators) that have been constantly proactive to market needs and have built strong. soaps and oral care in rural India. efficient and intelligent distribution channels. only the innovators will survive. at different price points. which are posing a threat to bigger FMCG companies like HLL. which has become synonymous with ‘cat’. the ‘Ghari’ detergent. from a number of companies. This is the single big innovation to reach new users and expand market share for value added products in urban India. the future brings a lot more competition.e.smaller package sizes. and for general FMCG products like detergents. Management vision to growth is the key. What does all this mean for the future of FMCG industry in India? Undoubtedly. the rise of ‘Anchor’ in oral care. To choose the best investment opportunities look at the shapers (i. 39 . which has given sleepless nights to Reckitt Benckiser. as consumers going forward are likely to become even more sophisticated in their demand. Another interesting phenomenon to have hit the FMCG industry is the mushrooming of regional companies. who can now choose a variety of products. that has slowly but surely built itself to take on Nirma and HLL in detergents. But for the players who cater to the Indian consumer. at lower price points. In this environment. For example. From an investor’s point of view. all this is good for the consumers. the rise of Jyothi Laboratories.
the data is tabulated to count the number of samples falling into various categories. A codebook is created to document how the data was coded. The data must then be coded. Cross tabulation is the most commonly utilized data analysis method in marketing research. raw data must be transformed into the right format. it must be edited so that errors can be corrected or omitted. cross tabbing more than two variables is difficult to visualize since more than two dimensions would be required. Finally. treats two or more variables simultaneously. This technique divides the sample into sub-groups to show how the dependent variable varies 40 . Simple tabulations count the occurrences of each variable independently of the other variables. However. since the variables are in a two-dimensional table.DATA ANALYSIS Before analysis can be performed. Many studies take the analysis no further than cross tabulation. Cross tabulations. Cross tabulation can be performed for nominal and ordinal variables. also known as contingency tables or cross tabs. this procedure converts the edited raw data into numbers or symbols. First.
Conjoint Analysis The conjoint analysis is a powerful technique for determining consumer preferences for product attributes. 41 . In the case of sampled data. the information set cannot be complete. The null hypothesis in an experiment is the hypothesis that the independent variable has no effect on the dependent variable. research. Hypothesis Testing A basic fact about testing hypotheses is that a hypothesis may be rejected but that the hypothesis never can be unconditionally accepted until all possible evidence is evaluated. This hypothesis is known as the alternative. There are two types of errors in evaluating a hypotheses: Type I error: occurs when one rejects the null hypothesis and accepts the alternative. The alternative to the null hypothesis is the hypothesis that the independent variable does have an effect on the dependent variable.from one subgroup to another. when in fact the null hypothesis is true. So if a test using such data does not reject a hypothesis. The null hypothesis is expressed as H0. Type II error: occurs when one accepts the null hypothesis when in fact the null hypothesis is false. This hypothesis is assumed to be true unless proven otherwise. This alternative hypothesis states that the relationship observed between the variables cannot be explained by chance alone. the conclusion is not necessarily that the hypothesis should be accepted. A third variable can be introduced to uncover a relationship that initially was not evident. or experimental hypothesis and is expressed as H1.
Choose the appropriate test. Tests of Statistical Significance The chi-square ( c2 ) goodness-of-fit test is used to determine whether a set of proportions have specified numerical values.Because their names are not very descriptive. reject or do not reject the null hypothesis. It often is used to analyze bivariate cross-tabulated data. a Type II error has occurred. these types of errors sometimes are confused. To illustrate the difference. on the other hand. it is useful to consider a trial by jury in which the null hypothesis is that the defendant is innocent. Some examples of situations that are well-suited for this test are: A manufacturer of packaged products test markets a new product and wants to know if sales of the new product will be in the same relative proportion of package sizes as sales of existing products. Determine the probability of the observed value of the test statistic under the null hypothesis given the sampling distribution that applies to the chosen test. Based on the comparison. Gather the data and calculate the test statistic. Compare the value of the test statistic to the rejection threshold.determine the rejection region. the jury declares a truly guilty defendant to be innocent. Hypothesis testing involves the following steps: Formulate the null and alternative hypotheses. Make the marketing research conclusion. Choose a level of significance (alpha) . a test of statistical significance can be run. Some people jokingly define a Type III error to occur when one confuses Type I and Type II. If the jury convicts a truly innocent defendant. a Type I error has occurred. If. 42 . In order to analyze whether research results are statistically significant or simply by chance.
one uses a chi-square table.A company's sales revenue comes from Product A (50%).Ei )2 / Ei where Oi = the number of observed cases in category i. ANOVA 43 . the null hypothesis is rejected. Knowing the expected number of cases falling in each category. This is done by dividing the number of samples by the number of cells in the table.05 normally is used. Ei = the number of expected cases in category i. To use the output of the chi-square function. Product B (30%). The firm wants to know whether recent fluctuations in these proportions are random or whether they represent a real shift in sales. k = the number of categories. If the calculated output value from the function is greater than the chi-square look-up table value. one can define chi-squared as: c2 = å ( Oi . one needs to know the number of degrees of freedom (df).1 ) This is equal to the number of categories minus one. the number of degrees of freedom is equal to ( number of columns .1 ) ( number of rows . For chi-square applied to cross-tabulated data. The chi-square test is performed by defining k categories and observing the number of cases falling into each category. one needs to determine the expected frequency for each cell. the summation runs from i = 1 to i = k. To do so. The conventional critical level of 0. Before calculating the chi-square value. and Product C (20%).
To run a one-way ANOVA. use the following steps: Identify the independent and dependent variables. 44 . The test is called an F-test. The total variation (SStotal) is the sum of the squares of the differences between each value and the grand mean of all the values in all the groups. and the portion that is between groups (or among groups for more than two groups). This F-test assumes that the group variances are approximately equal and that the observations are independent.the total variation. Interpret the results. ANOVA is needed to compare three or more means. Describe the variation by breaking it into three parts . the portion that is within groups. It also assumes normally distributed data. The variation between group means (SSbetween) is the total variation minus the ingroup variation (SStotal . the probability of a TYPE I error (rejecting a true null hypothesis) increases as the number of comparisons increases. One-way ANOVA examines whether multiple means differ. The in-group variation (SSwithin) is the sum of the squares of the differences in each element's value and the group mean.SSwithin). since this is a test on means the Central Limit Theorem holds as long as the sample size is not too small. While ANOVA was designed for comparing several means. ANOVA calculates the ratio of the variation between groups to the variation within groups (the F ratio). Perform a significance test on the differences. The primary purpose of ANOVA is to test for differences between multiple means. Two-way ANOVA allows for a second independent variable and addresses interaction. Measure the difference between each group's mean and the grand mean. Whereas the t-test can be used to compare two means. If multiple t-tests were applied. it also can be used to compare two means.Another test of significance is the Analysis of Variance (ANOVA) test. however.
Test the significance of the discriminant function. Since some variables will not be independent from one another. discriminant analysis is used. A discriminant analysis consists of the following steps: Formulate the problem. Note that regression can perform a similar analysis to that of ANOVA.ANOVA is efficient for analyzing data using relatively few observations and can be used with categorical variables. and then uses that variable to predict new cases of group membership. essentially a weighted sum of the variables. To determine which variables discriminate between two or more naturally occurring groups. 45 . Determine the discriminant function coefficients that result in the highest ratio of between-group variation to within-group variation. One such test is to construct a linear combination. Determine the validity of the analysis. one needs a test that can consider them simultaneously in order to take into account their interrelationship. Discriminate Analysis Analysis of the difference in means between groups provides information about individual variables. It determines which groups differ with respect to the mean of a variable. the discriminant function problem is a one-way ANOVA problem in that one can determine whether multiple groups are significantly different from one another with respect to the mean of a particular variable. it is not useful for determine their individual impacts when the variables are used in combination. Discriminant analysis can determine which variables are the best predictors of group membership. Essentially. Interpret the results.
only factors for which the eigenvalue is greater than one are used. The square of this correlation represents the proportion of the variation in the variable explained by the factor. Factor 1 Variable 1 Variable 2 Variable 3 Column's Sum of Squares: Each cell in the matrix represents correlation between the variable and the factor associated with that cell. An example matrix is shown below. The technique identifies underlying structure among the variables. whereas factor analysis and cluster analysis address the interdependency among variables. a factor is a linear combination of variables. Factor analysis combines variables to create a smaller set of factors. A factor loading matrix is a key output of the factor analysis. Other Factor 2 Factor 3 46 . it is inferred from the variables. Factor analysis studies the entire set of interrelationships without defining variables to be dependent or independent. Factor Analysis Factor analysis is a very popular technique to analyze interdependence. A factor is not directly observable. The factor loading can be defined as the correlations between the factors and their underlying variables. A rule of thumb for deciding on the number of factors is that each included factor must explain at least as much variance as does an average variable. The sum of the squares of the factor loadings in each column is called an eigenvalue. reducing the number of variables to a more manageable set. Mathematically. An eigenvalue represents the amount of variance in the original variables that is associated with that factor. Factor analysis groups variables according to their correlation. The communality is the amount of the variable variance explained by common factors. Discriminant analysis analyzes the dependency relationship. In other words.
it is more of a collection of algorithms for grouping objects. Cluster analysis is useful in the exploratory phase of research when there are no a-priori hypotheses. buffs. Cluster analysis steps: Formulate the problem. The most common is the Euclidean distance. Cluster Analysis Market segmentation usually is based not on one factor but on multiple factors. or in the case of marketing research. Chebychev distance. each variable represents its own cluster. the axis can be rotated. Initially. collecting data and choosing the variables to analyze. etc. Varimax attempts to force the column entries to be either close to zero or one. nodal. The challenge is to find a way to combine variables so that relatively homogenous clusters can be formed. or factor procedures). Such clusters should be internally homogenous and externally heterogeneous. A commonly used rotation strategy is the varimax rotation. 47 . grouping people. city-block (Manhattan) distance. Choose a clustering procedure (linkage. They should be well separated and ideally they should be distinct enough to give them descriptive names such as professionals.criteria for determining the number of factors include the Scree plot criteria and the percentage of variance criteria. Choose a distance measure. power distance. Other possibilities include the squared Euclidean distance. Determine the number of clusters. Rotation of the axis is equivalent to forming linear combinations of the factors. Rather than being a statistical test. Cluster analysis is one way to accomplish this goal. and percent disagreement. To facilitate interpretation.
The analyses of those data’s are given as follows:- 48 . After a good deal of consumer survey and marketing research. Also technical jargons are avoided to ensure that there is no confusion for respondents. RESEARCH INTRUMENTS QUESTIONNAIRE DESIGN: As the questionnaire is self administrated one. Profile the clusters. I has collect a good collection of data. research papers. the survey is kept simple and user friendly. DATA COLLECTION METHOD PRIMARY DATA: Primary data was collected through a self administrated questionnaire. Assess the validity of the clustering. internet etc. SECONDARY DATA: Secondary data was collected through magazines. Words used in questionnaire are readily understandable to all respondent. This questionnaire aims to gather information related to various Branded Electronic Home Appliances.
30% of rural consumers prefers colgate as their favorite toothpaste brand. A huge number of toothpastes of different companies are sell in rural market. datoons etc. Consumers preference towards different toothpastes DEMANDS OF DIFFERENT TOOTHPASTE BRANDS 10% 10% 35% PEPSODENT COLGATE 15% CLOSE UP BABOOL OTHERS 30% As per analyses of above pie chart.10% of the rural consumers prefers Dabur’s babool toothpaste and 10% consumers uses other toothpaste brands. the rural consumers preferred tooth powers. we has found that Hindustan Uniliver’s Pepsodent leads the market with 35% rural market share. The rural consumers preference towards the different toothpaste brands are given in following pie chart. the preference of rural consumers towards toothpaste has been changed. Pepsodent are the most popular toothpaste brands in rural market. 49 . once again Hindustan Uniliver’s close up occupies third position with 15% market share. but from the last decade. Colgate.DATA ANALYSES FOR PREFERENCE FOR TOOTHPASTE IN RURAL MARKET:In the initial years.
8% of rural consumers prefers some other soap brands. the 90% of the soap market is coverd by the products of Hindustan Uniliver.DATA ANALYSIS FOR THE PREFERENCE FOR SOAP IN RURAL MARKET:In the survey of preference of my target consumers towards soap. where as 30% goes towards HUL’s Lifeboy third position is also acquired by a HUL product where 15% of the market captured by Rexona. I fonnd that a vast majority of rural consumers prefers Lux as their more faithful brand. I had found the different preference and different choice of the consumers. CONCLUSION:In this analysis .50% of rural consumers prefers HUL’s Lux. 50 . On the basis of their choice. I has get the following data given in following table:- DEMAND OF SOAP BRANDS 60 50 PECENTAGE 40 30 20 10 0 LUX LIFEBOY REXONA OTHERS BRANDS 30 50 LUX LIFEBOY REXONA 12 OTHERS 8 As per given in the above table.
From the last few years . Peoples of every age are interested to use shampoo at regular interval. DEMAND OF SHAMPOO BRANDS 45 40 PERCENTAGE 35 30 25 20 15 10 5 0 CLINIC PLUS SUNSILK CHICK OTHERS PRODUCTS 16 6 42 36 CLINIC PLUS SUNSILK CHICK OTHERS 51 . It shoes a good number of consumers preference towards shampoo in rural area. the demand of shampoo sashes as well as medium size bottles has increased in rural area.9% shampoo uses in rural market. total 31. The preference of consumers towards shampoo is given in following table.DATA ANALYSIS FOR PREFERENCE FOR SHAMPOO IN RURAL MARKET:As per concern of shampoo .
10% includes non shampoo users or users of some other brands. U LD ER PA S N TE N E SU N SI C LI LK N IC PL U S O TH ER S H O BRANDS 52 .DEMAND OF SHAMPOO IN SACHE CATAGORY 35 30 25 20 15 10 5 0 PERCENTAGE 32 28 18 12 10 HEADS &SHOULDERS PANTENE SUNSILK CLINIC PLUS OTHERS . CONCLUSION:This analysis shows that a vast majority of rural consumers prefers HUL’s clinic plus and Sunsilk in high and medium size sample. More than 50% of the rural consumers prefers the brands of P&G (Heads & Shoulders and Pantene). But on the other hand. 8% consumers prefers other shampoos or non shampoo users. 18% prefers sunsilk. H EA D S &S The consumers preference towards shampoo are as follows: 42% prefers clinic plus. in sachet sample there is different story. 30% consumers prefers sunsilk. Preference of shampoo in saches: 32% of consumers uses Heads & Shoulders. 10% consumers go through Calvin Care’s Chick. 12 % prefers clinic plus. 28% goes through Pantene.
4% penetration level of detergent is gone to rural consumers. D EM AN D OF D E TER GEN TS 45 40 35 30 25 20 15 10 5 0 42 34 W HEE L G HA RI TID E 13 6 5 S U R F E XE L O TH E R S PERCENTAGE W HE EL G HA RI TID E BRANDS S U R F O TH E R S E XE L 53 . The preference of rural consumers towards detergents is given in following table . Approx 87.DATA ANALYSIS OF CONSUMERS PREFERNCE TOWARDS DETERGENTS Detergent is another more preferencable product for rural consumers.
but not in sachet. 13 % consumers prefers P&G’s Tide in medium or large size sample but it is leading brand in sachet category with 43%. 5% consumers prefers other local detergents for their personal use.DEMAND OF DITERGENTS IN SACHE 10% 12% 43% TIDE SURF EXEL ARIAL OTHERS 35% As per given in above table . 54 . 34% consumers prefers ghari detergent in medium or large size sample. Surf exel of HUL is second leading brand in sachet category with 35% consumer preference which is prefers only 6% in large samples due to it’s price. but consumers not prefer it in sachet. the consumers preference towards detergents are as follows: 42% consumers prefers HUL’s wheel in mediam or large sample .
Nirma which was the initiator of introduction of detergent in rural market. lump sum the half of the detergent market is covered by HUL and P&G products. the rural consumers does not uses any utensil cleaner rather they use primary products like ash. DATA ANALYSIS OF CONSUMERS PREFERENCE TOWARDS UTENSIL CLEANER:Utensil cleaner is one of the basic need of the consumers. The consumers preference towards utensil cleaner is given in following table:- DEMAND OF CLEANER BRANDS 100 90 80 70 60 IN (%) 50 40 30 20 10 0 VIM OTHERS NO CLEANER VIM OTHERS BRANDS NO CLEANER 55 . mud or other things. this condition shows that the rural consumers are also want to quality products. is currently out of the market. Couple of months ago. only price is a factor in front of them. But at the present time the popularity of utensil cleaners has been developed in rural market in high penetration level.CONCLUSION:As given in the above table. because consumers uses it at regular interval.
DEMAND OF FAIRNESS CREAM 70 60 PERCENTAGE 50 40 30 20 10 0 FAIR & LOVELY PONDS VICCO OTHERS 23 10 2 FAIR & LOVELY PONDS VICCO OTHERS 65 BRANDS The HUL’s Fair & Lovely is most popular brand in the rural market most of the consumers specially female consumers uses this brand. Second position is also occupied by HUL’s product (Ponds) which is preferred by 23% of consumers.a brief description is given in the following table. 85% of the rural market is covered by vim .As per given in the table. 56 . there is not more brands are in the competition. vim is the leading brand in the utensil cleaner segment. Approx 65% of rural consumers uses Fair & Lovely as their best trusted brand. DATA ANALYSIS FOR RURAL CONSUMERS PREFERENCE TOWARDS FAIRNESS CREAM:As per fairness cream is concern. 10% consumers prefers other brands where as 5% consumer are those who does not uses any utensil cleaner. 10% consumers prefers Vicco and 2% uses some other brands. Only few brands of HUL and emami captures the market.
Gillete which is most demandable brand in urban areas has very low market share in the rural market due to it’s little bit high price. But in the semi-urban areas and some of the rural areas. CONCLUSION:- 57 . After saving gel is generally not popular in the rural market. consumers are started to depend on their own saving kit. A brief analysis of different brands of different companies is given in following table:- DEMANDOF SAVING CREAMS 45 40 35 30 25 20 15 10 5 0 42 30 12 16 PALMOLIVE VJHON OLD SPICE OTHERS PERCENTAGE PALMOLIVE VJHON OLD SPICE OTHERS BRANDS The preference of consumers towards saving cream is described as follows: 42% of the consumers prefers Palmolive as their best choice. So what from the few years. 30% consumers prefers Vjohn. the demand of different savin creams of different companies has been increased.RURAL CONSUMERS PREFERENCE TOWARDS SAVING CREAM:Generally in the rural areas the consumers prefers barbers for the purpose of saving or other relevant purpose.
At the present time. there are many companies exists in this segment. and availability. From many years .The analysis of consumer preference toward saving cream shows that such a vast area of market covered by Palmolive and Vjohn. consumers prefers it due to it’s low price. good taste. 23% of rural consumers prefers sunfeast and also it’s demand is increasing due to it’s taste and 58 . baby food etc. giving to guests. A brief overview of consumers preference towards biscuits is given in following table:- D E MAN D OF B IS C U IT B R AN D S 70 60 PERCENTAGE 50 40 30 20 10 0 P A RLE -G S UNF E A S T B RITA NNIA BRANDS O THE RS 23 10 5 P A RLE -G S UNF E A S T B RITA NNIA O THE RS 62 Parle-G is very old and most trusted biscuit brand for the rural consumers. it captures approx 62% of total rural market share. Consumers prefers it for the many reasons like taking with tea. PREFERENCE OF CONSUMERS TOWARDS BISCUITS:Biscuit is one of the major beverage category brand of the FMCG products for the rural areas. From the few years ITC’s Sun feast creats a good demand among the rural consumers.
The following table provides a brief details about the different tea brands popular in the rural market. 11% consumers prefers taj mahal tea. 21% of the rural consumers prefers double diamond. 26% of the rural consumers prefers tata tea. 59 . but from the few years they starts to use some brands of the different tea companies because of the avaibility of tea in small sachets.good publicity and distribution. CONSUMERS PREFERENCE TOWARDS DIFFERENT TEA BRANDS:In the segment market. generally consumers had prefer local tea . DEMANDOF TEA DIFFERENT BRANDS 10% 11% 32% TAZA TATA TEA DOUBLE DIMOND TAJ MAHAL 21% OTHERS 26% The data analysis of consumers’ preference towards tea is discussed as follows: 32% consumers prefers taza as their best choice. Consumers prefer 10% Britaania brands and 5% consumers prefers other brands.
25% of the rural consumers prefers dabur amla. himtaj.etc.Navratna. Himgange. third place occupied by Maico’s Paraschut which is prefers by 21% 60 . CONCLUSION:As per given in the above table taza and tata tea are the leading tea brands in the rural market. 10% consumers are among those who prefers some other tea nrands. DATA ANALYSIS OF CONSUMERS PREFERENCE TOWARDS DIFFERENT HAIR OIL BRANDS:The rural consumer preferences towards different hair oil brands are given in the following table:- DEMAND 5% 18% 31% HERBAL OILS DABUR AMLA PARASUIT BAJAJ ALMOND 21% 25% OTHERS rural consumers prefers mostly herbal/cool oils.g. e. 31% of the rural consumers prefers herbal oils because of their multipurpose use. They use these oils as medicine also.
The business of management today is characterized by complex issues and continuous change. what’s on the verge of breaking down. Frequently the related decisions and actions are characterized by trying to understand the complexity of the issues involved so that an appropriate decision can be made. SWOT analysis is internationally known as a method of understanding the issues which are involved. or what’s already broken and needs replacement--so that you can keep the business humming—even better than it has in the past. Think of your SWOT as a tune-up that every business needs periodically to diagnose and fix what’s a bit worn. ideas can be shared between managers and even integrated into a wider picture for subsequent analysis. It can not find the solution for you. SWOT offers professional managers an effective evaluative technique to aid the decision making process. Opportunities. 18% consumers prefers Bajaj Almond and 5% prefers some other hair oil brands. showing the problem in terms of key underlying issues. In doing so. but it will ensure that issues are: identified. and Threats) is a tool used to provide a general or detailed snapshot of a company's health. or by yourself if you are a one-person shop. You can develop the basic analysis in a brainstorming session with members of your company. Decision makers can then see the answer. 61 . While this kind of applied decision making is not an exact science. classified and prioritized clearly.of rural consumers. SWOT ANALYSIS A SWOT (Strengths. All four aspects must be considered to implement a long-range plan of action. It's a four-part approach to analyzing a company's overall strategyor the strategy of its business units. Weaknesses.
with many future opportunitiesfor success Our local council wants to encourage local businesses with work where possible Our competitors may be slow to adopt new technologies Threats: Will developments in technology change this market beyond our ability to adapt? A small change in focus of a large competitor might wipe out anymarket position we achieve 62 .Strengths: We are able to respond very quickly as we have no red tape. leaving. Our cash flow will be unreliable in the early stages Opportunities: Our business sector is expanding. no need for higher management approval. We are able to give really good customer care. etc. etc. as the current small amount of work means we have plenty of time to devote to customers Our lead consultant has strong reputation within the market We can change direction quickly if we find that our marketing isnot working We have small overheads. so can offer good value to customers Weaknesses: Our company has no market presence or reputation We have a small staff with a shallow skills base in many areas We are vulnerable to vital staff being sick.
Such an analysis of the strategic environment is referred to as a SWOT analysis. The SWOT analysis provides information that is helpful in matching the firm's resources and capabilities to the competitive environment in which it operates. The consultancy should keep up-to-date with changes in technology where possible. to get the greatest possible market presence for a set advertising budget. good value services to local businesses. As such. A scan of the internal and external environment is an important part of the strategic planning process. Examples of such strengths include: patents strong brand names 63 . The following diagram shows how a SWOT analysis fits into an environmental scan: SWOT Analysis FrameworkEnvironmental Scan Internal Analysis Strengths Weaknesses SWOT Matrix Strengths External Analysis Opportunities Threats A firm's strengths are its resources and capabilities that can be used as a basis for developing a competitive advantage. and those external to the firm can be classified as opportunities (O) or threats (T). it is instrumental in strategy formulation and selection. Marketing would be in selected local publications. Environmental factors internal to the firm usually can be classified as strengths (S) or weaknesses (W). The consultancy might therefore decide to specialize in rapid response.
it also may be a considered a weakness if the large investment in manufacturing capacity prevents the firm from reacting quickly to changes in the strategic environment. Some examples of such opportunities include: an unfulfilled customer need arrival of new technologies loosening of regulations removal of international trade barriers 64 . good reputation among customers cost advantages from proprietary know-how exclusive access to high grade natural resources favorable access to distribution networks Weaknesses The absence of certain strengths may be viewed as a weakness. For example. Take the case in which a firm has a large amount of manufacturing capacity. Opportunities The external environmental analysis may reveal certain new opportunities for profit and growth. a weakness may be the flip side of a strength. each of the following may be considered weaknesses: lack of patent protection a weak brand name poor reputation among customers high cost structure lack of access to the best natural resources lack of access to key distribution channels In some cases. While this capacity may be considered a strength that competitors do not share.
the firm can overcome a weakness in order to prepare itself to pursue a compelling opportunity. W-O strategies overcome weaknesses to pursue opportunities.Threats Changes in the external environmental also may present threats to the firm. S-T strategies identify ways that the firm can use its strengths to reduce its vulnerability to external threats. In some cases. 65 . a matrix of these factors can be constructed. Some examples of such threats include: shifts in consumer tastes away from the firm's products emergence of substitute products new regulations increased trade barriers The SWOT Matrix A firm should not necessarily pursue the more lucrative opportunities. it may have a better chance at developing a competitive advantage by identifying a fit between the firm's strengths and upcoming opportunities. The SWOT matrix (also known as a TOWS Matrix) is shown below: SWOT / TOWS Opportunities Threats Strengths S-O strategies S-T strategies Weakness W-O strategies W-T strategies S-O strategies pursue opportunities that are a good fit to the company's strengths. To develop strategies that take into account the SWOT profile. Rather.
W-T strategies establish a defensive plan to prevent the firm's weaknesses from making it highly susceptible to external threats. Limitations • Skill set shortage • Maintaining high quality standards • Lack of talent pool • Unable to do primary research • Confidentiality • Enhanced risk management • Time constraint 66 .
cheaper cost. people firstly prefer for good quality and comparatively low prices products. brand loyalty. ITC and P&G.CONCLUSION: As I has analyzed the various data based on questionnaire. Because of huge product line. 67 . Except it. a fact has came into light that HUL’s products are the most known and popular Brand in context of home FMCG products in rural market followed by DABUR. good publicity and advertisement. the rural consumers generally prefers the products of HUL in all segments.
Application of 4A* is also a major task for the major companies in this area. easy to use and cheaper. It is right that the profit margin is very low in the FMCG products. 68 . good. The companies can reduce their prices by cutting the costs on the packaging because the rural consumers don’t need attractive packaging. but at the same time the market size is much large in the rural area. The consumer wants those products which are long lasting. It is one of the reason that the sell of sachet is much larger in the rural area in all segments. The income level of rural consumers is not as high as the income level of urban consumers that’s why they want low price goods. It is necessary for all the FMCG major companies to provide those products which are easy to available and affordable to the consumers.SUGGESTIONS The rural market is very large in compare to the urban market as well as it is more challenging market.
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com http://www. Chapter 13.com http://www. Section 1. Monika Bhatt.C.org http://www.com http://www. First Edition.m B) 6000 TO 12000 C) MORE THAN 12000 ADDRESS:- 70 .co. Chapter1.International edition. Page 7-19.google. page 113-140.com http://www.com Appendix QUESTIONAIRE: ------NAME:OCCUPATION:TOTAL INCOME: A) BELOW 6000 p. Consumer behavior in Indian Context (S Chand and company limited. page 17. Chapter2.imcri.just-food. 1999 ).itcportal. 2003. page 1-6.in/ http://www. http://www. • Jain P.blonnet.thehindubusinessline. New Delhi 110055).scribd.
DIST. 4) WHICH SHAMPOO USES BY YOU? A) SUNSILK__ B) HEADS &SHOULDERS__ C) PANTENE__ D) OTHERS__.:STATE. 10)WHICH BLADE YOU USES FOR SAVING? A)555__ B) 7 ‘O’ CLOCK__ C)WILKINSON__ D) OTHERS__. A) AXE__ B) REXONA__ C)Fa__ D) OTHERS__.PHONE NO. 2) WHICH DETERGENT YOU USE? A) SURF EXCEL__ B) TIDE__ C) NIRMA__ D) OTHERS__. 5) WHICH UTENSIAL CLEANER USE BY YOU? A) VIM__ B) OTHERS__ C) NO CLEANER USES__ 6) WHICH TYPE OF SAVING USE BY YOU? A) GILLETE__ B) PALMOLIVE__ C)OLD SPICE__ D) OTHERS__. 3) WHICH SOAP DO YOU USE? A) LUX__ B) LIFEBOY__ C) REXONA__ C) OTHERS__. 71 . 7) WHICH FAIRNESS CREAM USES BY YOU? A) FAIR & LOVELY __ B)POND’S__ C)VICCO__ D) OTHERS__ 8) WHICH TYPE OF TALC YOU PREFER? A) DENIM__ B) PONDS__ C)BORO PLUS__ D) OTHERS__ 9) ANY DEODERENT USE BY YOU…………….:1) WHICH TYPE OF TOOTHPASTE YOU USE? A) PEPSODENT__ B) COLGATE__ C) CLOSE UP__ D) OTHERS__.
11) WHICH BISCUIT YOU PREFER? A) PARLE-G__ B) SUNFIST__ C)BRITANNIA__ D) OTHERS__ 72 .