PROJECT DISSERTATION

ON

“A STUDY ON THE RURAL CONSUMERS’ PERCEPTION TOWARDS

MARKETING STRATEGIES OF FMCG PRODUCTS”

SUBMITTED IN THE PARTIAL FULFILLMENT FOR THE AWARD OF

THE DEGREE OF MASTER IN BUSINESS ADMINISTRATION

UNDER THE GUIDANCE OF:

Ms. Shuchi Dikshit
Assistant Professor, RDIAS

SUBMITTED BY:
Shubham Agarwal
Enrollment No. 36180303918
MBA, Semester IV
Batch 2018 – 2020

RUKMINI DEVI INSTITUTE OF ADVANCED STUDIES

An ISO 9001:2015 Certified Institute

NAAC Accredited: A+ Grade (2nd Cycle), Category A+ Institution (by SFRC, Govt. of NCT
Delhi)
(Approved by AICTE, HRD Ministry, Govt. of India)
Affiliated to Guru Gobind Singh Indraprastha University, Delhi
2A & 2B, Madhuban Chowk, Outer Ring Road, Phase-1, Delhi-1
 TABLE OF CONTENTS

Page No.

Student Declaration ...................................................…………….. i

Certificate from Faculty Guide ..................................................................................... ii

Acknowledgement.................................................................................................................iii

Executive Summary..............................................................................................................iv

INTRODUCTION Page No.

1.1 About the Topic 2 - 10

1.2 About the Industry or About the Company 12-17
1.3 Literature Review 18-28

RESEARCH METHODOLOGY Page No.

2.1 Purpose of the study 30-30

2.2 Research Objectives of the study 30-30
2.3 Research Methodology of the study
2. 3.1 Research Design 30-30
2.3.2 Method of Data Collection 30-31
2.3.3 Sample Design
2.3.3.1 1 Sample Unit31-31
2.3.3.2 2 Sample Size31-31
2.3.3.3 3 Sampling Method31-31
2.3.4 Designing Questionnaire31-32
2.4 Limitations 33-33

ANALYSIS& INTERPRETATION Page No.

3.1 Analysis & Interpretation 35-55

FINDINGS AND SUGGESTIONS Page No.

4.1 Findings 57-57

4.2 Suggestions 58-58
 CONCLUSION Page No.

5.1 Conclusion 60-60

5.2 Scope for future research 60-60

REFERENCES 61-61

ANNEXURES (if any) 62-63

 Student’s Declaration

This is to certify that I have completed the Project titled “A study on the rural consumers’
perception towards marketing strategies of FMCG products”.under the guidance of
“Ms.Shuchi Dikshit” in the partial fulfillment of the requirement for the award of the
degree of “Masters in Business Administration” from “Rukmini Devi Institute of
Advanced Studies, New Delhi.”

It is also certified that the project of mine is an original work and the same has not been
submitted earlier elsewhere.

Shubham Agarwal
36180303918
MBA 4th Sem Sec – B EVENING

i
 Certificate from Faculty Guide

This is to certify that the project titled “A study on the rural consumers’ perception
towards marketing strategies of FMCG products” is an academic work done by “Shubham
Agarwal” submitted in the partial fulfillment of the requirement for the award of the
degree of “Masters in Business Administration” from “Rukmini Devi Institute of
Advanced Studies, New Delhi.” under my guidance and direction.

To the best of my knowledge and belief the data and information presented by him / her in
the project has not been submitted earlier elsewhere.

Ms. Shuchi Dikshit

Assistant Professor
RDIAS

ii
 ACKNOWLEDGEMENT

I offer my sincere thanks and humble regards to Rukmini Devi Institute of Advanced Studies,
GGSIP University, New Delhi for imparting me valuable professional training in MBA.

I pay my gratitude and sincere regards to Ms. SHUCHI DIKSHIT, my project Guide for
giving me the cream of her knowledge. I am thankful to her as she has been a constant source
of advice, motivation and inspiration. I am also thankful to her for giving her suggestions and
encouragement throughout the project work.

I take the opportunity to express my gratitude and thanks to our computer Lab staff and
library staff for providing me opportunity to utilize their resources for the completion of
the project.

I am also thankful to my family and friends for constantly motivating me to complete the
project and providing me an environment which enhanced my knowledge.

Shubham Agarwal
36180303918
MBA 4th Sem Sec B Evening

iii
 EXECUTIVE SUMMARY

Project study is undertaken at a different rural area of Delhi . Rural people from rural area are
covered under this survey. The main focus is to determine rural consumers’ perception towards
the price , availability , quality and marketing strategies of FMCG products. A consumer sets a
frame of references in his/her mind to choose a FMCG product. Keeping in view the frame of
references the present paper is an attempt to study the perception of Rural consumers towards
Fast Moving Consumer Goods (FMCGs) by asking rural people about there satisfaction level
towards the FMCG products . The study used primary data collected from as sample of 100 rural
consumers from rural area of Delhi with the help of a likert- scale questionnaire .

For conducting this research study , the likert scale questionnaire is planned with respect to the 4
points i.e. price , availability of the product , quality and promotion of the FMCG product .
Various questions are asked from rural people to know the satisfaction level of the FMCG
products.

Research methodology deals with the methodology of the study concerning with Objective of
the study, Data Collection Techniques. In the study descriptive research design has been used
and data have been taken from various secondary sources like: • Internet • Books • Magazines
• Newspapers • Journals. SPSS tool is used . The data analysis and data interpretation is done
Charts.

Findings and Observation are provided and based on these findings certain conclusions are
drawn. The conclusion of the project is given to justify the objectives of the study.

iv
 CHAPTER-1
INTRODUCTION

1.1 About the Topic

1.2 About the Industry or About the Company
1.3 Literature Review
INTRODUCTION

1
 1.1 ABOUT THE TOPIC

INTRODUCTION

Rural development implies both the economic betterment of people as well as greater social
transformation. In order to provide the rural people with better prospects for economic
development, increased participation of people in the rural development programmes,
decentralization of planning, better enforcement of land reforms and greater access to credit are
needed. This section provides complete information on initiatives taken by the government for
bridging the urban-rural divide by upgrading the standard of living of people in rural areas.
Information about programmes, schemes, employment opportunities, Panchayati Raj institutions,
development authorities, drinking water, sanitation, road construction, electrification of villages
and food supply etc. is provided.

Fast-moving consumer goods (FMCG) or consumer packaged goods (CPG) are products that are
sold quickly and at relatively low cost. Examples include non-durable goods such as packaged
foods, beverages, toiletries, over-the-counter drugs and many other consumables.[1][2] In
contrast, durable goods or major appliances such as kitchen appliances are generally replaced
over a period of several years.
Many fast moving consumer goods have a short shelf life, either as a result of high consumer
demand or because the product deteriorates rapidly. Some FMCGs, such as meat, fruits and
vegetables, dairy products, and baked goods, are highly perishable. Other goods, such as pre-
packaged foods, soft drinks, chocolate, candies, toiletries, and cleaning products, have high
turnover rates. The sales are sometimes influenced by holidays and seasons.
Packaging is critical for FMCGs. The logistics and distribution systems often require secondary
and tertiary packaging to maximize efficiency. The unit pack or primary package is critical for
product protection and shelf life and also provides information and sales incentives to
consumers.

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Though the profit margin made on FMCG products is relatively small (more so for retailers than
the producers/suppliers), they are generally sold in large quantities; thus, the cumulative profit on
such products can be substantial. FMCG is a classic case of low margin and high volume
business.

Fast-moving consumer goods (FMCG) sector is the 4th largest sector in the Indian economy with
Household and Personal Care accounting for 50 per cent of FMCG sales in India. Growing
awareness, easier access and changing lifestyles have been the key growth drivers for the sector.
The urban segment (accounts for a revenue share of around 40 per cent) is the largest contributor
to the overall revenue generated by the FMCG sector in India and recorded a market size of
around US$ 29.4 billion in 2016-17. However, in the last few years, the FMCG market has
grown at a faster pace in rural India compared with urban India. Semi-urban and rural segments
are growing at a rapid pace and FMCG products account for 50 per cent of total rural spending.

Market Size

The Retail market in India is estimated to reach US$ 1.1 trillion by 2020 from US$ 672 billion in
2016, with modern trade expected to grow at 20 per cent - 25 per cent per annum, which is likely
to boost revenues of FMCG companies. In 2016-17, revenue for FMCG sector have reached US$
49 billion and is expected to grow at 9-9.5 per cent in FY18 supported by expectations of the
total consumption expenditure reaching nearly US$ 3,600 billion by 2020 from US$ 1,469
billion in 2015. Direct selling sector in India is expected to reach Rs 159.3 billion (US$ 2.5
billion) by 2021, if provided with a conducive environment through reforms and regulation.

Investments/ Developments

The government has allowed 100 per cent Foreign Direct Investment (FDI) in food processing
and single-brand retail and 51 per cent in multi-brand retail. This would bolster employment and
supply chains, and also provide high visibility for FMCG brands in organised retail markets,
bolstering consumer spending and encouraging more product launches. The sector witnessed
healthy FDI inflows of US$ 13.07 billion, during April 2000 to December 2017. Some of the

3
recent developments in the FMCG sector are as follows:

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The Hershey Co plans to invest US$ 50 million over the next five years in India, its fastest
growing core market outside of US.
As a part of its Rs 25,000 crore (US$ 3.88 billion) investment package, ITC will invest Rs
10,000 crore (US$ 1.55 billion) to expand its food processing segment.
The bottling arm of Coca-Cola India, Hindustan Coca-Cola Beverages (HCCB) is planning to
increase its retail reach by one million new outlets and is targeting a revenue of US$ 2.5 billion
by 2020.
Future Retail will acquire HyperCity, which is owned by Shoppers Stop for Rs 911 crore (US$
139.7 million) to further consolidate its business and have a better footing in the hypermarket
segment.

Government initiatives

Some of the major initiatives taken by the government to promote the FMCG sector in India are
as follows:
In the Union Budget 2017-18, the Government of India has proposed to spend more on the rural
side with an aim to double the farmer’s income in five years; as well as the cut in income tax rate
targeting mainly the small tax payers, focus on affordable housing and infrastructure
development will provide multiple growth drivers for the consumer market industry.
The Government of India’s decision to allow 100 per cent Foreign Direct Investment (FDI) in
online retail of goods and services through the automatic route has provided clarity on the
existing businesses of e-commerce companies operating in India.
With the demand for skilled labour growing among Indian industries, the government plans to
train 500 million people by 2022 and is also encouraging private players and entrepreneurs to
invest in the venture. Many governments, corporate and educational organisations are working
towards providing training and education to create a skilled workforce.
The Government of India has drafted a new Consumer Protection Bill with special emphasis on
setting up an extensive mechanism to ensure simple, speedy, accessible, affordable and timely
delivery of justice to consumers.

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The Goods and Services Tax (GST) is beneficial for the FMCG industry as many of the FMCG
products such as Soap, Toothpaste and Hair oil now come under 18 per cent tax bracket against
the previous 23-24 per cent rate.

Road Ahead

Rural consumption has increased, led by a combination of increasing incomes and higher
aspiration levels; there is an increased demand for branded products in rural India. The rural
FMCG market in India is expected to grow at a CAGR of 14.6 per cent, and reach US$ 220
billion by 2025 from US$ 29.4 billion in 2016.
On the other hand, with the share of unorganised market in the FMCG sector falling, the
organised sector growth is expected to rise with increased level of brand consciousness, also
augmented by the growth in modern retail.
Another major factor propelling the demand for food services in India is the growing youth
population, primarily in the country’s urban regions. India has a large base of young consumers
who form the majority of the workforce and, due to time constraints, barely get time for cooking.
Online portals are expected to play a key role for companies trying to enter the hinterlands. The
Internet has contributed in a big way, facilitating a cheaper and more convenient means to
increase a company’s reach. It is estimated that 40 per cent of all FMCG purchases in India will
be online by 2020, thereby making it a US$ 5-6 billion business opportunity. By the year 2025,
e-commerce will contribute around 10-15 per cent sales of few categories in the FMCG sector*.
Mr Mark Mobius, Executive Chairman, Templeton EM, opined that the Goods and Services Tax
(GST) will lead to mergers and rise of world class consumer companies in India. GST and
demonetisation are expected to drive demand, both in the rural and urban areas, and economic
growth in a structured manner in the long term and improve performance of companies within
the sector.

A BRIEF
In country like India, where the 70% of the people live in rural area, the rural market holds a lot
of marketing potential. There is a wide spread difference in the standard of living between urban

6
and rural India. In order to launch products and develop advertising for rural market there is a
need to understand both the rural context and also the consumer very well. Promotion of brands
in rural markets requires the special measures.
Due to the social and backward condition the personal selling efforts have a challenging role to
play in this regard. The word of mouth is an important message carrier in rural areas. Intact the
opinion leaders are the most influencing part of promotion strategy of rural promotion efforts.
The experience of agricultural input industry can act as a guideline for the marketing efforts of
consumer durable and non-durable companies.
Relevance of Mass Media is also a very important factor. The strong Indian brands have strong
brand equity, consumer demand-pull and efficient and dedicated dealer network which have been
created over a period of time.
The rural market has a grip of strong country shops, which affect the sale of various products in
rural market. The companies are trying to trigger growth in rural areas. They are identifying the
fact that rural people are now in the better position with disposable income. The low rate finance
availability has also increased the affordability of purchasing the costly products by the rural
people. Marketer should understand the price sensitivity of a consumer in a rural area.
This research paper will be therefore an attempt to study the brand promotion in the rural market
and the overall potential of the rural market. Branding correlates with Image Building in an
organization vis-à-vis its products produced/services rendered. In the vicinity of today's
Marketing scenario along with advancement in technology, Brand Management is the order of
the day.

Indian Marketers on rural marketing have two understanding

1. The urban metro products and marketing products can be implemented in rural markets
with some or no change.
2) The rural marketing required the separate skills and techniques from its urban counterpart.
The Marketers have following facilities to make them believe in accepting the truth that rural
markets are different in so many terms.
 Low priced products can be more successful in rural markets because the low
purchasing, purchasing powers in rural markets.
 Rural consumers have mostly homogeneous group with similar needs, economic

7
conditions and problems.

8
  The rural markets can be worked with the different media environment as opposed to

How reality does affect the planning of marketers? Do villagers have same attitude like urban
consumers? The question arises for the management of rural marketing effects in a significant
manner so than companies can enter in the rural market with the definite goals and targets but
not for a short term period but for longer duration. The Research paper will discuss the role of
regard. The strategy, which will be presented in the paper, can be either specific or universally
applicable.

FACTS ABOUT RURAL MARKET

1. There are nearly 85,000 rural haats (Super Markets) in India. In 2015-16, LIC sold 50
percent of its policies in rural India with 25% new policies.
2. Out of 354 million internet users 138 million are from rural areas.
3. Of the 2,00,000 souls that have transacted on Rediff's shopping site, 50 percent are from
small towns.
4. The 42 million Kisan Credit Cards (KCC) issued so far exceed the 25 million credit-plus-
debit cards issued in urban. A whopping Rs. 95,000 crore has been sanctioned under the
KCC scheme.
5. Hindustan Lever, the largest FMCG Company in the country. More than half of its annual
profit of 4,000 crore come from the rural market.
6. The proposed agricultural reforms in 2016, the easy availability of agriculture credit Rs
98,000/- Crore Village road programme introduced recently to connect 2,25,000/- village
and the improved communication network (STD and Mobile).

BRANDING AND PROMOTION

Branding is the creation of an image of the product which personifies the characteristics and the
value deliverables of the particular product being delivered at a particular time and place. The
research approaches to get at brand objective.
1. Word Associations: While using the logo, hoardings and exhibits, suitable jargons have to be
deployed in the word association. People can be asked what strikes in their mind when they hear
the brand's name.

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2. Personifying the Brand: Visual control mechanism plays a vital role in identifying the brands

1
in terms of personification. People can be identified the brands when seeing the visual pictures
described.

3. Laddering up to find the brand essence: Brand essence relates to the deeper, more abstract
goals consumer and trying to satisfy with the brand. The attribute, a functional benefit and an
emotional benefit brand essence constitute a technique known as laddering up. Brands are
increasingly getting more entwined with our lives. The debate today is not as much about 'why
branding' as above defining a meaningful role for a brand in the consumer's life.

Need of Branding
a) Separate a brand from other competitors in a unique way.

b) Relevant and motivating to a target group of customers.

c) Prospects and channels-it gives a value and make the product special.
d) Enhance the perceived value, there by supporting premium pricing, sheltering the product
from low price competition.
e) Contributing to share holder value. (Companies like Monsanto, HUL look to evidence ofbrand
strength in setting buy ratings).

f) Provide resilience in times of negative press.

g) Enables to launch new products more quickly and cost effectively

1
BRANDING STRATEGY IN RURAL PLACE

Product Developme

Database Creation & Manageme

Brandin

Rural Branding

DM Market Resear
Campaig

Communic ati
Event on

a) Rural Product Development: The rural market is a fast growing one and has a huge
population with a great level of disposable income. To encase this, products have to be
specifically developed to meet the needs of rural markets. Sometimes, existing products might
have to be modified to suit these markets too accordingly. Rural product development has the
strong edifice on a great deal of research like feasibility studies, rural aspiration, rural profiling
and so on. This paves way for a great deal of infrastructure and expertise in this area.

b) Rural Branding: Rural branding bear’s quite different stand from urban branding. The first
step towards rural branding is to research and gain insight into the working of rural markets.
Based on this communication campaigns have to be developed with a lot of rural sensitivity.

1
Rural

1
branding is attained by way of opting to a greater percentage of local media and a smaller
percentage of the mass media. Rural gatherings like temple festivals, melas, and cinema halls and
so on can be used as venues to promote brands. Direct Marketing and events like road shows;
film shows, melas, street theatre can also be used to promote brands. A well-planned rural
branding campaign cannot just create brand awareness but help your target relevant to your
brand and promote sales. A long-term campaign will keep your brand at the top-of-the-mind and
build brand loyalty. So the brands are in safe hands.

c) Rural Market Research: Rural markets behave most differently from urban markets. While
many marketers have tried to market their products in rural areas, just a handful of the same only
has succeeded. A strong insight into rural consumer behavior and sensitivity to their values and
beliefs is essential; to upgrade the rural market rural market research encompasses not just
gathering data but analyzing them and linking the findings to promoting your products.

d) Rural Communication Campaigns: Communication for rural markets calls for a different
kind of outlook. There must be a strong accent on helping the target relate to the message. The
entire communication and media strategy has to devise a system based on research findings.
These have to be developed in the regional vernacular languages and set in the local culture for
easier acceptance and reach. Unlike communication campaigns in urban areas that rely greatly on
the mass media, the strategy will be of crying in the wilderness in rural areas. Besides mass and
outdoor media, rural extravaganza like temple festivals, melas and other events where the
villagers come together can be used for promotions.

e) Rural Events: In the rural context, one of the best ways to capture the attention of the
audience is through Event-management. Since rural areas have limited venues for entertainment,
conducting an event in rural areas can bring a good response. A well-planned event can get the
product the mileage that we want. Some of the interesting events that can be conducted are Road
Shows, Melas, Street-Theatre, and Film Shows and so on. These make a visually strong impact
and build long term brand recall. Rural public are the target audience and hence the portfolio of
event management has to be handled professionally with diligent care and broad perspective.

1
f) Rural DM Campaigns: Direct Marketing (DM) is one of the most powerful ways to meet the
target on their turf and build product awareness as well as promotion. The success of any DM
campaign depends on the field workers and their sensitivity and emotional connectivity to rural
markets. In the area of Direct Marketing, rural team has to be trained, to be sensitive to rural
culture and beliefs. They can handle activities like Door-to-Door sampling, marketing and
product promotion. These activities can also be carried out innovatively at places like local
cinema halls, melas and festivals, in the midst of cross-cultural gatherings and conglomerations.

g) Database Creation & Management: Marketing, branding and promotional activities in the
rural context can be highly effective and thereafter have to create a database of prospects. The
question is how will you source this critical data? The data will contain details of your target
segments at the village level / town-level. This data is essential for us to reach our target
accurately and helps our marketing plan and communication strategies. Management Information
System along with Database management paves ways for a congenial rural marketing through
the information and data available for effective interpretations and use.
h) Categorize: the Company’s should outline very exact specifications of what they hope to
accomplish. The company has to invest often in emerging technologies and services simply
because what all the customers earnestly believe will eventually set a standard. The company can
predict the outcome, should do professional services and introspection, long term vision, and
initiate steps to dedicate for the customers. Virtually speaking, "categorize", the seventh step will
be the gate-way for customers as well the marketer in the journey of brand positioning.

PROMOTION OF BRANDS
The rural brand promotion is very different from the urban brand promotion. The direct contact
and visual aids play a very important medium of promotion. The most important medium is the
campaigns and the public meetings; the purchase behavior is finalized only when any influence
leader proposes for it. Most of the promotions are done via jeep campaigns and meetings. The
communication used for the local promotion uses local language and dialect.

1
 1.2 ABOUT THE INDUSTRY

INDUSTRY CATEGORY AND PRODUCTS

A. HOUSEHOLD CARE
Personal Wash:-
The market size of personal wash is estimated to be around Rs. 8,900 Cr. The personal wash can
be segregated into three segments: Premium, Economy and Popular. The penetration level of
soaps is ~92 per cent. It is available in 5million retail stores, out of which, 75 per cent are in the
rural areas.

Detergents:-
The size of the detergent market is estimated to be Rs. 15,000 Cr. Household care segment is
characterized by high degree of competition and high level of penetration. With rapid
urbanization, emergence of small pack size and sachets, the demand for the household care
products is flourishing. The demand for detergents has been growing but the regional and small
unorganized players account for a major share of the total volume of the detergent market.

B. PERSONAL CARE
Skin Care:-
The total skin care market is estimated to be around Rs. 3,800 Cr. The skin care market is at a
primary stage in India. The penetration level of this segment in India is around 20 per cent. With
changing life styles, increase in disposable incomes, greater product choice and availability,
people are becoming aware about personal grooming.

Hair Care:-
The hair care market in India is estimated at around Rs. 4,500 Cr. The hair care market can be
segmented into hair oils, shampoos, hair colorants & conditioners, and hair gels.

1
Shampoos:-
The Indian shampoo market is estimated to be around Rs. 3,200 Cr. It has the penetration level of
only 13 per cent in India. Sachet makes up to 40 per cent of the total shampoo sale. It has low
penetration level even in metros.

Oral Care:-
The oral care market can be segmented into toothpaste - 60 per cent; toothpowder - 23 per cent;
toothbrushes - 17 per cent. The total toothpaste market is estimated to be around Rs. 3,900 Cr.
The penetration level of toothpowder/toothpaste in urban areas is three times that of rural areas.

C. FOOD & BEVERAGES

Food Segment:-
The foods category in FMCG is gaining popularity with a swing of launches by HUL, ITC,
Godrej, and others. This category has 18 major brands aggregating Rs. 5,200 Cr. The food
category has also seen innovations like softies in ice creams, ready to eat rice by HUL and pizzas
by both GCMMF and Godrej Pillsbury.

Tea:-
The major share of tea market is dominated by unorganized players. More than 50 per cent of the
market share is capture by unorganized players

Coffee:-
The Indian beverage industry faces over supply in segments like coffee and tea. However, more
than 50 per cent of the market share is in unpacked or loose form.
An increase in disposable income, of household mainly because of in-crease in nuclear family
where both the husband and wife are earning, has leads to growth rate in FMCG goods.

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 ADVANTAGES TO FMCG SECTOR IN RURAL MARKET

a) Governmental Policy
Indian Government has enacted policies aimed at attaining international competitiveness through
lifting of the quantitative restrictions, reducing excise duties, and automatic foreign in-vestment
and food laws resulting in an environment that fosters growth. 100 per cent ex-port oriented units
can be set up by government approval and use of foreign brand names is now freely permitted.

b) Central & State Initiatives

Recently Government has announced a cut of 4 per cent in excise duty to fight with the
slowdown of the Economy. This announcement has a positive impact on the industry. But the
benefit from the 4 per cent reduction in excise duty is not likely to be uniform across FMCG
categories or players. The changes in excise duty do not impact cigarettes (ITC, Godfrey
Phillips), biscuits (Britannia Industries, ITC) or ready-to-eat foods, as these products are either
subject to specific duty or are exempt from excise. Even players with manufacturing facilities
located mainly in tax- free zones will also not see material excise duty savings. Only large
FMCG-makers may be the key ones to bet and gain on excise cut.

c) Foreign Direct Investment (FDI)

Automatic investment approval (including foreign technology agreements with in specified
norms), up to 100 per cent foreign equity or 100 per cent for NRI and Overseas Corporate Bodies
(OCBs) investment, is allowed for most of the food processing sector except malted food,
alcoholic beverages and those reserved for small scale industries (SSI). There is a continuous
growth in net FDI Inflow.

MARKET OPPORTUNITIES
a) Vast Rural Market
Rural India accounts for more than 850 Million consumers, or ~70 per cent of the Indian
population and accounts for ~50 per cent of the total FMCG market. The working rural

1
population is

1
approximately 400 Millions. And an average citizen in rural India has less than half of the
purchasing power as compare to his urban counterpart. Still there is an untapped market and
most of the FMCG Companies are taking different steps to capture rural market share. The
market for FMCG products in rural India is estimated ~ 52 per cent and is projected to touch ~
60 per cent within a year. Hindustan Unilever Ltd is the largest player in the industry and has the
widest market coverage.

b) Export - “Leveraging the Cost Advantage”

Cheap labor and quality product & services have helped India to represent as a cost ad-vantage
over other Countries. Even the Government has offered zero import duty on capital goods and
raw material for 100% export oriented units. Multi National Companies out-source its product
requirements from its Indian company to have a cost advantage. India is the largest producer of
livestock, milk, sugarcane, coconut, spices and cashew apart from being the second largest
producer of rice, wheat, fruits & vegetables. It adds a cost advantage as well as easily available
raw materials.

c) Sectoral Opportunities
Major Key Sectoral opportunities for Indian FMCG Sector are mentioned below:
(i) Dairy Based Products
India is the largest milk producer in the world, yet only around 15 per cent of the milk is
processed. The organized liquid milk business is in its infancy and also has large long-term
growth potential. Even investment opportunities exist in value-added products like desserts,
puddings etc.

(ii) Packaged Food

Only about 10-12 per cent of output is processed and consumed in packaged form, thus
highlighting the huge potential for expansion of this industry.

(iii) Oral Care

The oral care industry, especially toothpastes, remains under penetrated in India with penetration
rates around 50 per cent. With rise in per capita incomes and awareness of oral hygiene, the

2
growth potential is huge. Lower price and smaller packs are also likely to drive potential up
trading.

2
 (iv) Beverages
Indian tea market is dominated by unorganized players. More than 50% of the market share is
capture by unorganized players highlighting high potential for organized players.

FMCG SCOPE IN RURAL INDIA

Products which have a quick turnover, and relatively low cost are known as Fast Moving
Consumer Goods (FMCG). FMCG products are those that get replaced within a year. Examples
of FMCG generally include a wide range of frequently purchased consumer products such as
toiletries, soap, cosmetics, tooth cleaning products, shaving products and detergents, as well as
other non-durables such as glassware, bulbs, batteries, paper products, and plastic goods. FMCG
may also include pharmaceuticals, consumer electronics, packaged food products, soft drinks,
tissue paper, and chocolate bars.
India’s FMCG sector is the fourth largest sector in the economy and creates employment for
more than three million people in downstream activities. Its principal constituents are Household
Care, Personal Care and Food & Beverages. The total FMCG market is in excess of Rs. 95,000
Crores. It is currently growing at double digit growth rate and is expected to maintain a high
growth rate. FMCG Industry is characterized by a well established distribution network, low
penetration levels, low operating cost, lower per capita consumption and intense competition
between the organized and unorganized segments.
Unlike other sectors, the FMCG industry did not slow down since 2013. The industry is doing
pretty well, bucking the trend. As it is meeting the every-day demands of consumers, it will
continue to grow. Market share movements indicate that companies such as Marico Ltd and
Nestle India Ltd, with domination in their key categories, have improved their market shares and
outperformed peers in the FMCG sector. This has been also aided by the lack of competition in
the respective categories.
Single product leaders such as Colgate Palmolive India Ltd and Britannia Industries Ltd have
also witnessed strength in their respective categories, aided by innovations and strong
distribution. Strong players in the economy segment like Godrej Consumer Products Ltd in soaps
and Dabur in

2
toothpastes have also posted market share improvement, with revived growth in semi-urban and
rural markets.

SWOT ANALYSIS OF FMCG

Strengths
• Low operational costs
• Presence of established distribution
networks in both urban and rural areas
• Presence of well-known brands in
FMCG sector
Weaknesses
• Lower scope of investing in technology and
achieving economies of scale, especially in
small sectors
• Low exports levels
• "Me-too products, which illegally mimic
the labels of the established brands. These
products narrow the scope of FMCG products
in rural and semi-urban market.

Opportunities
• Untapped rural market
• Rising income levels, i.e. increase
in purchasing power of consumers
• Large domestic market- a population of over
one billion.
• Export potential
• High consumer goods spending
Threats
• Removal of import restrictions resulting
in replacing of domestic brands
• Slowdown in rural demand
• Tax and regulatory structure

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 1.3 LITERATURE REVIEW

Marketing of non-durable goods or Fast Moving Consumer Goods (FMCG) is a subject that has
not received the attention it deserves. While there are several good books and articles on the
subject that largely concentrates either on the marketing of industrial goods or on the marketing
of durable goods likes T.V., Car and Scooter etc.
In India, specific studies consumable non-durable goods have received little attention from
researchers. So, while reviewing the literature, interest is entirely focused on studies conducted
in India dealing not only with product under study and/or other consumer non-durables, but to
generate some understanding of analogous nature.
It was essential to present a review of literature in order to formulate the research problem
succinctly and to highlight the importance of undertaking this study. Conceptual framework and
some empirical studies on the topic have a direct or indirect bearing on the present study.
In this chapter, research work done in FMCG Products regarding factors Availably, Price and
promotion, factors have been reviewed and presented under the following subheadings:

1 Availability among consumers about branded products

2 Price affecting purchasing behavior of consumers
3 Promotion for FMCG Product
4 Quality of FMCG Product

1. AVAILABLITY AMONG CONSUMERS ABOUT FMCG PRODUCTS

FMCG sector is a vital contributor to India‘s Gross Domestic Product. It has been contributing
to the demand of lower and middle income groups in India. Over 73% of FMCG products are
sold to middle class households in which over 52% is in rural India. Rural marketing has become
the hottest marketing arena for most of the FMCG companies. The rural India market is huge and
the opportunities are unlimited. After saturation and cutthroat competition in urban areas, now
many FMCG companies are moving towards the rural market and are making new strategies for
targeting the rural consumer. The Indian FMCG companies are now busy in formulating new
competitive strategies for this untapped potential market. Therefore, a comparative study is

2
made on growth,

2
opportunity, and challenges of FMCG companies in rural market. One of the most attractive
reasons for companies to tap rural consumers is that an individual‘s income is rising in rural
areas and purchasing power of lower and middle income groups is also rising and they are eager
to spend money to improve their lifestyle. This research paper provides detailed analysis about
the contribution of FMCG industry in growth of Indian rural market and aims to discuss about
customer attitude towards better purchasing decision for FMCG products in rural market with
growing awareness and brand consciousness among people across various socio-economic
classes in rural market. The level of avaibility of FMCG products among rural consumers was
high .
Study is aimed to know avaibility of FMCG Products , and thus studied the avaibility factors of
different products among consumer and producer . For this, questions regarding avaibility of
products are asked from people who responded to the survey.

2. PRICE AFFECTING PURCHASING BEHAVIOUR OF CONSUMERS

Price- Price is a sensitive factor for buying a product.

A Consumer behaviour research is the scientific study of the processes consumers use to select,
secure, use and dispose of products and services that satisfy their needs. Firms can satisfy those
needs only to the extent they understand their customers. The main objective of this paper is to
study the demographic differences in consumers‘ buying behaviour of persons living in rural
area’s when they buy FMCG products. To attain this objective a survey was developed and
administered across some part of rural area’s.
In India more than 72% population lives in villages and FMCG companies are famous for selling
their products to the middleclass households; it implies that rural India is a profitable and
potential market for FMCG producers. Rural consumers‘ incomes are rising and now they are
more willing to buy products which improve their lifestyle. Producers of FMCG have to craft
unique marketing strategies exclusively for rural consumers. In this process they need to
understand the rural consumer buying behaviour which may differ geographically. . The study
emphasizes on the factors which influence the purchasing pattern of rural consumers.
Study is attempted to find the variables/factors that affect customer impulsive buying behaviour
regarding price in FMCG sector considering retail market in India. The impact of various
impulse buying factors like sales and promotions, placement of products, window

2
merchandising, effective

2
price strategy etc., on customer buying behaviour have been analyzed. The study is based on the
primary data collected from rural area’s with the help of structured questionnaire on Likert scale.
Buying behavior regarding price is very much influenced by experience of their own and of
neighbour consumers and his family. Above all, the quality of the product and its easy
availability were the primary and the vital determinants of his buying behaviour. Consumers
were influenced by touch and feel aspect of any promotional activity.
A study on the emerging dimensions of buyer behaviour in rural area. The study reveals that, the
consumer purchases the convenience goods in rural market was mostly did once a week and it is
monthly for daily consumption goods . With the increase in real income of rural people, a shift
was found to have taken place in the items consumed by the rural consumers. The buying
behaviour in general and buying decisions in particular in rural area is influenced by the factors
like price, availability of products. It also conducts that majority of the customers get the new
product information from the shop keeper as against the television and price is the most
influencing factor, which influences the purchasing decision as compared to quality.
Price, quality and weight of the products were the important factors considered by both rural and
urban respondents while purchasing of food items.
The preference to obtain information about the store for purchasing toothpaste from personal
sources was quite limited in all social class, the amount of interpersonal search about the store to
be patronized for purchasing toothpaste generally declined. However, the buyers in the lower
uppers social class did not engage in any interpersonal search. In both the lower lowers and
upper lowers social class, among various personal sources of information about the store,
neighbours followed by friends was the most significant source of information. In the lower
middle social class also, friends and neighbours were the major sources of information, though
friends were consulted more often than the neighbours. In the upper middle social class, unlike
other social classes, spouse was an important provider of information about the store. In the
upper uppers social class, friends were the only provider of information about the store.
A study on shopping behaviour of consumers and revealed that Indian consumers had no special
choice in choosing his particular shop for making a purchase. In most of the families, the male
head makes the purchases, restricting the choices of other members of the family to limited
variety of goods. He generally selects a shop, which is near to his residence and where he goes
on feet and

2
occasionally uses a bicycle. Generally the average consumers prefer to buy from the shop, where
a credit facility is available and which is easily approachable.
A consumer acquires greater experience in buying a product, he may rely less on price
information and suggested that price was not of sufficient importance to be the primary
determinant of brand choice.
Direct observation of purchasing behaviour at the time of purchasing the products. It was found
that plenty of shopping behaviour takes place without fixed intention to buy specific brands.
Attitudes measures can never be more than rough indicates of purchases. Urban shoppers show
somewhat greater concern with price than rural shoppers, but many in both groups pay no
attention at all on prices marked on packages. Price consciousness seems to be slightly more
characteristic of women than of men. It was also concluded that women do more of the family
shopping than men and when they try to purchase the product, husbands accompanying wives
almost always influence purchase decisions.
Every purchase made by a consumer represents an ultimate decision influenced by vast number
of factors. The consumer‘s selection of a product rests upon the comparative net balances of all
influences, both favourable and unfavourable that bears upon each FMCG Product to which he is
exposed.
Consumer behaviour assumes much importance in the present consumer oriented marketing
system with particular reference to 'gender attention'. The FMCG sector consists of four product
categories such as Household Care; Personal Care; Food and Beverages; and Tobacco each with
its own hosts of products that have relatively quick turnover and low costs. Every consumer is
purchasing a particular product due to the influence of many factors. The influencing factors
differ from one consumer to another and from product to product also. There is a different ways
and means to exhaust and to distribute abundantly produced Personal Care FMCGs products in
markets, but the consumers in the market are influenced generously by responding to selling
habits of retailers both in urban and rural market. In markets the consumers usually purchase
what is available at the retail outlet. Therefore the producers of personal care FMCGs should
progressively strengthen their distribution reach in the market. At the same time, there are some
challenges such as poor distribution system, fragmented rural market and heterogeneity of
population which the retailers ought to meet for satisfying the needs of consumers.

2
The consumer behaviour plays an important role in marketing. This is influenced by various
factors. In the changing global scenario we find that consumers needs and wants to buy a product
also changes with it.
Study reveals that quality was an important factor that draws consumer towards products.
products were accepted as good quality products. People do not mind paying extra for branded
products, as they get value for money. Media is a key constituent in promoting and influencing
brand. A child's insistence affects family's buying behaviour. Children are highly aware and
conscious of branded items. Although unbranded products sometimes give same satisfaction as
branded products, customers would still prefer to purchase a branded product.
3 Promotion for FMCG products

Study revealed with more than six hundred thousand villages and more than 70% of the
population, rural India has become a massive consumer goods market. FMCG has emerged as a
major product category in rural consumption. Companies marketing FMCG to rural consumers
cannot merely extend their general marketing strategies to rural markets. Instead, they need to
devise rural specific strategies. In this process, they need to understand crucial issues relating to
rural consumer behaviour and more specifically relating to different geographic regions of the
country. This paper focuses on understanding factors that affect the rural purchase of FMCG .

Today, companies focus on consumer to reach success in the global competitive environment. In
new marketing approaches, focus on consumer activities take place of focused on product/service
activities. The companies analyse consumer qualifications and form their marketing strategies
based on them. The consumers are affected from some individual and environmental factors,
such as motivation, personality, perception, learning, values, beliefs, attitudes, life style, personal
influence, reference group, family influence, social class and culture in their buying decision
process. The aim of this study is to focus on affecting factors on the consumer buying behaviour
in teenager consumer market, because teenager consumers are one of the important market
segments of companies.

Study found that, rural consumers prefer to buy the goods in small packets at lower price. They
want the more products at reasonable price, in other words value for money. He also explains the

3
importance of promotional tools in rural areas. He suggested that FMCG companies must enter
and tap the rural market in phase manner.

It was found that since income of each individual is increasing and more and more people are
moving towards western culture in dressing sense, in eating etc., so the purchasing power of
people has really gone up and thus the impulsive buying of commodities is on a high trend
mainly due to pricing strategies of retail players and full festival offers throughout the year.

The importance of packaging design as a vehicle for communication for packaged FMCG
products. This research utilized a focus group methodology to understand consumer behaviour
towards such products. The challenge for researchers is to integrate packaging into an effective
purchasing decision model, by understanding Consumer‘s behaviour towards the packaging of
FMCG products. When consumers search for the process information in-store, the product's
package can contain relevant and useful information for the consumer. Product packaging forms
the end of the 'promotion-chain' and is close in time to the actual purchase and may therefore
play an important role in predicting consumer outcomes. Packages also deliver brand
identification and label information like usage instructions, contents, and list of ingredients or
raw materials, warnings for use and directives for care of product.
The study shows that major source of product was word of mouth followed by advertisements,
family members, relatives and friends.
New products require a large frontended investment in product development, market research,
test marketing and launch. Creating awareness and develop franchise for a new brand requires
enormous initial expenditure on launch advertisements, free samples and product promotions.
Launch costs are as high as 50-100% of revenue in the first year. For established brands,
advertisement expenditure varies from 5 - 12% depending on the categories.
Communication to rural consumer is through organized media. More number of rural consumer
(~70%) listen to radio and many go to cinema. Rural communication can be through
Conventional media or through a nonconventional media. The most common conventional media
include: Print, Cinema, Television and Print. The Non-conventional media include: Theatre,
Posters, Haats and Melas.

3
4. Quality of FMCG products
The study also found that the factors influencing the purchase decision of the respondents,
consumers buying are influence the most by the product factor due to design, quality, durability,
made from safe environment and product range but few respondents are not satisfied with the
packaging, image and size of the product. The study found that rural consumers are more
concerned about the quality . - It is a strong input to competition . Product quality has its own
importance in long – run, for gaining trust of customers. Customers are oriented towards quality
as basic requirement for purchasing product.

PRIC E AVAIBILIT Y

PROMOTIO N
QUALIT Y

FACTORS EFFECTING RURAL

Model Of factor Effecting consumer
CONSUMERS’ Perception Towards
PERCEPTION TOWARDSmarketing Strategies Of FMCG
Product MARKETING STRATEGIES OF FMCG

3
According to Dr. N. Rajendhiran (MBA, PhD)/ Mr. S. Saiganesh (MBA, MA, M.Phil)/ Ms. P.
Asha (MBA) Prime Minister Dr. Manmohan Singh recently talked about his vision for rural
India: "My vision of rural India is of a modern agrarian, industrial and services economy co-
existing side by side, where people can live in well-equipped villages and commute easily to
work, be it on the farm or in the non-farm economy. There is much that modern science and
technology can do to realize this vision. Rural incomes have to be increased. Rural infrastructure
has to be improved. Rural health and education needs have to be met. Employment opportunities
have to be created in rural areas." 'Go rural' is the slogan of marketing gurus after analyzing the
socio- economic 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.

3
What rural market buys?

Rural India buys small packs, as they are perceived as value for money. There is brand
stickiness, where a consumer buys a brand out of habit and not really by choice. Brands rarely
fight for market share; they just have to be visible in the right place. Even expensive brands, such
as Close-Up, Marie biscuits and Clinic shampoo are doing well because of deep distribution,
many brands are doing well without much advertising support — Ghadi, a big detergent brand in
North India, is an example.

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 colour 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.

Reasons for 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.

3
 TRENDS IN RURAL MARKETS
The joint family is not the standard unit. Nuclear families are the rule rather than the exception.
In poor households, it is seen that 71% of households are nuclear families. The joint family
influence increases as affluence increases. Even then, only 56% of affluent families live in joint
families. Women are not housebound in rural India. 36% of women work outside the house
either full or part time. This figure is as high 50% in West India and 45% in South India going
down to 28% in the North and 21% in the East of the country. Rural India is not as illiterate as
expected. 3% of 1,066 lakhs rural households have at least one graduate. 16% have at least one
member who has passed SSC, HSC levels. Keeping these figures in mind, Rural India has 5
times the population of Singapore and a little less than the population of Australia who have
already attained minimum educational qualifications.

STRATEGIES FOR RURAL MARKETS

1. Focus beam strategy - Marketers can aim to penetrate the rural outback by carrying the
campaign planning to micro levels. This would involve moving from planning for a region to
planning for a State or district head quarters, or taluka headquarters or even to the level of rural
agglomerations. In fact, the deeper you go the more successful and focused your strategy will be.

2. Pincer communication grid - In this form of strategy, a company can take Talukas or
Districts on a map and decide on a minimum population cut off per area to be covered. Once this
is done, concentric circles can be drawn on the map. A media plan can be made for each
concentric circle thus plotted. Initially, focus should be laid on the innermost circle. Because,
word of mouth is a powerful medium, the message delivered here will trigger responses even in
surrounding talukas. Indeed ―Rural India talks and travels a lot‖.

3. Innovation – Innovative media must be used in order to deliver "double-duty" messages.

These are messages in which more than one job is done using the same message and different
responses are generated at different localities or with different audiences.

4. Monitoring -Publicity using press campaigns or Point of contact material can be monitored by
issuing a direct coupon or response coupon along with the message that readers of the message

3
can be induced to return. In case of van campaign, a systematic taluka itinerary must be
formulated including a house by house record format which includes travel schedule, area
covered and publicity material distributed. It must also contain reports of audience feedback.
Research and media feedback forms must be developed and regularly used. At all times, local
campaigns must proceed with required validation and the local supervisor should ensure that
interactivity is maintained at all times.

3
 CHAPTER-2
RESEARCH
METHODOLGY

2.1 Purpose of the study

2.2 Research Objectives of the study
2.3 Research Methodology of the study
2. 3.1 Research Design
2.3.2 Method of Data Collection
2.3.3 Sample Design
2.3.3.1 Sample Unit
2.3.3.2 Sample Size
2.3.3.3 Sampling Method
2.3.3.4 Designing Questionnaire
2.4 Limitations

3
 RESEARCH METHODOLGY

2.1 Purpose of the study

The problem at hand is to study about the availability of FMCG products and satisfaction of price
and quality and promotion of FMCG products in rural market and also to find out the potential of
rural market .

2.2 Research objectives of the study

 To find out satisfaction level of rural people towards FMCG products.

 To evaluate rural consumers’ perception towards FMCG product.

 To find out the promotion strategy of FMCG companies in the rural India.

2.3 Research methodology of the study

Research methodology may be understood to study how research is done scientifically. Research
methodology is a purposeful, precise and systematic search for new knowledge, skills, attitude,
and value, or for the re-interpretation of existing knowledge, skilled, attitudes and values.

2.3.1 Research Design

A Research design is the specification of methods and procedures for acquiring the information needed to
structure or solve the problem. Descriptive design is used in this research .Descriptive research design is
typically concerned with describing problem and its solution. It is more specific and purposive study.
Before rigorous attempts are made for descriptive study, the well-defined problem must be on hand.
Descriptive study rests on one or more hypotheses

2.3.2 Data Collection Method

3
For any research to succeed raw facts must be collected in a form which helps in effective
production of results and meeting the objectives of study. There are basically two sources of data
collection:

 Primary Data: The primary data is collected by way of a non-disguised primary survey
in the selected areas.
The survey is done with the help of a semi structured questionnaire having MCQs for fact
based responses and Open ended questions for opinion based responses.
 Secondary Data: The basic knowledge about the brands and their promotion has to be
gathered thorough the secondary data available on the internet and the documents
available in the institute library.
The secondary sources such as internet and news articles cover almost all sections and
geographic locations.

2.3.3 Sample Design

 2.3.3.1 Sampling Unit : rural people living in the rural area
 2.3.3.2 Sample size : 100
 2.3.3.3 Sampling method : Random sampling
 2.3.3.4 Designing questionnaire
Questionnaires are commonly used to gather first-hand information from a large
audience, in the form of a survey. There are different types of questionnaires in practice
and the type of questionnaire to be used usually depends on the purpose of the survey and
the type of data that has to be collected.

Likert Scale
The degree to which respondents agree to a specific statement can be ascertained using Likert
questions. Customers' feelings about a topic, product or service can be easily gauged by asking
them these questions in this project the likert scale has been used in the project to know the
effectiveness of performance appraisal.

3
HYPOTHESIS FORMULATION

Following are hypothesis formed in this project :

Hypothesis 1
Null Hypothesis – There is no significant difference in perception towards price, Quality, Availability and Promotion
for FMCG products between the rural consumer with different education qualification.

Alternate Hypothesis – There is a significant difference perception towards price, Quality, Availability and Promotion
for FMCG products between the rural consumer with different education qualification.

Hypothesis 2
Null Hypothesis: There is no significant difference perception towards price, Quality, Availability
and Promotion for FMCG products between the rural consumer with different occupations.

Alternate Hypothesis -There is a significant difference perception towards price, Quality, Availability and Promotion
for FMCG products between the rural consumer with different occupations.

4
2.4 Limitation

1. Time is major constraint. The duration of the project was short.

2. For a detailed study on rural India in a very short span of time is quite difficult.
3. The research study is confined to only few dimensions.
4. The findings of the study are based on the information retrieved by the selected population.

4
 CHAPTER- 3
DATA INTERPRETATION
AND
ANALYSIS

4
Data Analysis and Interpretations

1. Occupation

INTERPRETATION
From the above pie chart it seems that 30 % are Farmers 20 % are students and others 15
% are businessman and 10 % are serviceman who responded to the questionnaire

4
 2. Education

INTERPRETATION

From the above pie chart it seems that out of 100 - 35 % are 10+2 students , 25% are others ,
17% are 10th students , 14% are graduates and 9% are post graduates who responded to
questionnaire .

4
INTERPRETATION

From the above graph it seems that 42% of the respondents are disagreed with statement that they
stick to same product if the price goes high, 35% of respondents strongly disagree with the statement,
15 % of respondents are neutral . Whereas , 3 % of the respondent strongly agree to the statement that
they will stick to the same product even if price goes high, & 5% also agrees with it to some extent.

It can be concluded that majority of the respondent that is 42% disagrees to the statement .

4
INTERPRETATION

From the above graph it seems that 54% of the respondents are strongly agreed with
statement that price of FMCG product are reasonable , 38% of respondents agree with the
statement, 4% of respondents are neutral . Whereas , 2% of the respondent disagree to the
statement .

It can be concluded that majority of the respondent that is 54% strongly agrees to the
statement .

4
 INTERPRETATION

From the above graph it seems that 45% of the respondents are strongly agreed with statement
that lower priced product are preferred over high product , 40% of respondents agreed with the
statement, 6% of respondents are neutral . Whereas , 2 % of the respondent strongly disagree to
the statement.

It can be concluded that majority of the respondent that is 45% strongly agrees to the statement .

4
 INTERPRETATION

From the above graph it seems that 48% of the respondents are strongly agreed with statement
that price of product should not be changed often , 35% of respondents disagree with the
statement, 7
% of respondents are neutral . Whereas , 2 % of the respondent strongly disagree .
It can be concluded that majority of the respondent that is 48% strongly agrees to the statement .

4
 INTERPRETATION

From the above graph it seems that 45% of the respondents are strongly agreed with statement
that quality product are expensive , 37% of respondents agree with the statement, 8% of
respondents are neutral . Whereas , 2% of the respondent disagree to the statement .
It can be concluded that majority of the respondent that is 45% strongly agrees to the statement .

4
INTERPRETATION
From the above graph it seems that 45% of the respondents are strongly agreed with
statement, 37% of respondents agree with the statement, 11 % of respondents are neutral .
It can be concluded that majority of the respondent that is 45% strongly agrees to the
statement .

5
 INTERPRETATION

From the above graph it seems that 50% of the respondents are disagreed with statement need
for quality improvement of product that they are using , 19% of respondents strongly disagree
with the statement, 4 % of respondents are neutral .
It can be concluded that majority of the respondent that is 50% disagrees to the statement .

5
 INTERPRETATION

From the above graph it seems that 47% of the respondents are disagreed with statement that they
product is easily available to them , 21% of respondents strongly disagree with the statement, 23
% of respondents are neutral . Whereas , 5% of the respondent strongly agree to the statement.

It can be concluded that majority of the respondent that is 47% strongly disagrees to the statement

5
 INTERPRETATION

The above graph it seems that 53% of the respondents are disagreed with statement ,
It can be concluded that majority of the respondent that is 53% disagrees to the statement .

5
INTERPRETATION
The above graph it seems that 81% of the respondents are neutral with statement , 11% of
respondents disagree with the statement, 2 % of respondents are strongly agree .

It can be concluded that majority of the respondent that is 81% disagrees to the statement

5
 INTERPRETATION

From the above graph it seems that 46% of the respondents are disagreed with statement , 38% of
respondents strongly disagree with the statement, 7 % of respondents are neutral . Whereas , 6 %
of the respondent strongly agree to the statement.
It can be concluded that majority of the respondent that is 46% disagrees to the statement .

5
 INTERPRETATION

From the above graph it seems that 53% of the respondents are strongly agreed with statement
promotional scheme affects purchasing decision , 41% of respondents agreed with the statement,
2% of respondents are neutral .

It can be concluded that majority of the respondent that is 53% strongly agrees to the statement .

5
 INTERPRETATION

From the above graph it seems that 52% of the respondents are strongly agreed with statement
that attractive packaging motivates customers to buy products , 4% of respondents are neutral .
Whereas , 7 % of the respondent strongly disagree to the statement
It can be concluded that majority of the respondent that is 52% strongly agrees to the statement .

5
 INTERPRETATION

From the above graph it seems that 44% of the respondents are strongly disagreed with
statement, of respondents strongly disagree with the statement, 20% of respondents are neutral .
Whereas , 19% of the respondent strongly agree to the statement.
It can be concluded that majority of the respondent that is 44% strongly disagrees to the statement.

5
INTERPRETATION

From the above graph it seems that 63% of the respondents are strongly disagreed with
statement, ,5 % of respondents are neutral . Whereas , 3 % of the respondent strongly
agree to the statement that they will stick to the same product even if price goes high, &
5% also agrees with it to some extent.

It can be concluded that majority of the respondent that is 42% disagrees to the statement

5
INTERPRETATION

From the above graph it seems that 61% of the respondents are strongly agreed with
statement that presence of celebrity in advertisement influence buying decesion, 1% of
respondents strongly disagree with the statement, 4 % of respondents are neutral .
It can be concluded that majority of the respondent that is 61% strongly agrees to the
statement .

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INTERPRETATION
From the above graph it seems that 60% of the respondents are strongly agreed with
statement, 9% of respondents strongly agree with the statement, 1% of respondents are
neutral .

It can be concluded that majority of the respondent that is 60% strongly agrees to the
statement .

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 ANOVA
Sum of Squares df Mean Square F Sig.

1. Would you stick to same Between Groups 22.340 5 4.468 5.626 .000

product if the price goes high ? Within Groups 74.650 94 .794

Total 96.990 99

2. Do you think price of FMCG Between Groups 1.183 5 .237 .333 .892

product are reasonable ? Within Groups 66.817 94 .711

Total 68.000 99

3. Do you think lower priced Between Groups 14.423 5 2.885 3.434 .007

product are preferred over high Within Groups 78.967 94 .840

priced product ? Total 93.390 99

4. Do you think price of the Between Groups 17.890 5 3.578 4.028 .002

product should not be changed Within Groups 83.500 94 .888

often ? Total 101.390 99

5. Do you think quality product are Between Groups 16.200 5 3.240 3.602 .005

expensive ? Within Groups 84.550 94 .899

Total 100.750 99

6. Do you think quality of a Between Groups 9.200 5 1.840 1.773 .126

product matters while purchasing Within Groups 97.550 94 1.038

? Total 106.750 99

7. Is there any need for quality Between Groups 29.190 5 5.838 5.885 .000

improvement of product that you Within Groups 93.250 94 .992

are using currentely ? Total 122.440 99

8. Is required product available Between Groups 26.710 5 5.342 5.877 .000

easily to you ? Within Groups 85.450 94 .909

Total 112.160 99

9. Is product available in different Between Groups 7.240 5 1.448 1.870 .107

varieties ? Within Groups 72.800 94 .774

Total 80.040 99

10. Is product available in your Between Groups 2.573 5 .515 1.388 .236

location ? Within Groups 34.867 94 .371

Total 37.440 99

11. If product is not available in Between Groups 5.793 5 1.159 1.040 .399

market ,do you prefer buying it Within Groups 104.717 94 1.114

online ? Total 110.510 99

12. Do you think promotional Between Groups 5.090 5 1.018 1.619 .163

scheme affects purchasing Within Groups 59.100 94 .629

decision ? Total 64.190 99

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13. Do you think attractive Between Groups 4.000 5 .800 .667 .649

packaging motivates customers to Within Groups 112.750 94 1.199

buy product ? Total 116.750 99

14. Do you think visual Between Groups 11.940 5 2.388 1.591 .170

advertisment on television are Within Groups 141.050 94 1.501

more effective than audio Total 152.990 99

advertisment on radio ?

15. Do you think small package of Between Groups 18.350 5 3.670 5.357 .000

FMCG products is bought more in Within Groups 64.400 94 .685

respect to bigger package ? Total 82.750 99

16. Does presence of celebrity in Between Groups 5.843 5 1.169 1.923 .098

advertisment influence your Within Groups 57.117 94 .608

buying decision ? Total 62.960 99

17. Dou you think in-store Between Groups 43.007 5 8.601 8.459 .000

advertisment affects purchasing Within Groups 95.583 94 1.017

decision ? Total 138.590 99

INTERPRETATION

On the basis of the above observation it is noticed that the null hypothesis is accepted. As F>0.05 this
shows that there is no significant difference perception towards price, Quality ,Availability and Promotion
for FMCG products between the rural consumer with different occupations and with different education
qualification.

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 CHAPTER- 4
FINDINGS AND
SUGGESTIONS

4.1 Findings

4.2 Suggestions

6
4.1 Findings

 With the present secondary and primary survey following results are
generalized . The result represents the opinion and there point of view
of the respondent of the selected village .

 In survey it is found that promotional scheme affects the purchasing

decision.

 It is found that attractive packaging motivates customers to buy the

product.

 It is found that audio advertisement on radio is more effective then

visual advertisement .

 Presence of celebrity influences people’s buying decesions.

 In the survey it is found that people prefer lower priced product over
high priced .

 People think that quality product are expensive .

 In the survey it is found that FMCG products are not easily available
to rural area

 In survey it is found that person not prefer to buy product online .

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4.2 Suggestion

 It is recommended that the companies should focus more on the utility of the products while
promoting in the rural areas. The life-style of these people is different from those in the urban
areas. These people want value for their money, so they want the promotions to be more
informative rather being more glamorous.
 The companies should provide full information in the rural promotions starting for the need, utility,
availability, price and the pack sizes available.
 FMCG Companies should improve there quality and quantity of the various products
 .Prices should be reasonable so that people can buy the products.
 FMCG Companies should focus more on various variety of the FMCG product .
 FMCG product must available easily to the rural people .
 Painting - A picture is worth thousand words. The message is simple and clean. Rural people like the sight of
bright colours. COKE, PEPSI and TATA traders advertise their products through paintings.
 Melas are places where villagers gather once in a while for shopping. Companies take advantage of such
events to market their products. Dabur uses these events to sell products like JANAM GHUTI (Gripe water).
NCAER estimates that around half of items sold in these melas are FMCG products and consumer durables.
Escorts also display its products like tractors and motorcycles in such melas.
 FMCG companies must aware there consumers about there different products that are available in the market

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 CHAPTER- 5
CONCLUSION

5.1 Conclusion

5.2 Scope for further research

6
5.1 Conclusion

The table conclude that there is no significant difference between perception towards price , quality ,
availability and promotion of FMCG product and education qualification . As there is a price satisfaction of
FMCG product ,the effective quality products are available . Product is easily available to people and
promotion enhance the sale . We also conclude that various promotional scheme affetcs the purchasing
decision , this help in increasing the sale . Consumer prefer to buy small package in respect to bigger
package

5.2 Scope for future research

 A similar study may be conducted for the other psychological factors which influence he buying
behavior of the customers while the consumers decide to buy FMCG product.
 Such research can be very useful for the marketers in designing the marketing mix strategies especially in the
rural areas with reference to FMCG Product .
 The finding of this research is of great importance for the companies who want to enter in the rural market,
because such study will help them in understanding the buying behavior of the customers living in the rural
areas.
 Finding of the present research may be very useful in designing the marketing mix strategies, in other rural
area state .
 The similar study may be conducted for other categories of FMCG products.
 The further research can help the one to know the perception of various people regarding FMCG products ,
FMCG brands .

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 REFERENCES

References

Books / Journals

 Bhatia, Tej K. (2014). "Advertising in Rural India: Language, Marketing Communication, and
Consumerism". New Delhi, India, Press ISBN 4-87297-782-3.

 Verma, Tripti (2000). "Rural consumer perception towards FMCG Goods ". Press ISBN 4-87297-782-3.

 Customers’ Perception towards the Fast Moving Consumer Goods in Rural Market:An AnalysisDr. Surinder
Singh Kundu Assistant Prof. & Incharge, Department Of Commerce, Chaudhary Devi Lal University, Sirsa

Magazines & Newspapers

 Business World

 Business Today

 India Today

 The Hindustan Times

 The Hindu Business Standard Line

Websites

 www.fmcg.com

 www.ruralmarketing.com

 www.promotionalstrategies-fmcg.com

 www.ruralmkt.fmcg.com

 www.ruralindia-fmgc.com

 www.googlesearchengine.com

 http://shodhganga.inflibnet.ac.in/bitstream/10603/54582/10/10_chapter%202.pdf

 http://irjcjournals.org/ijmssr/oct2013/6.pdf

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ANNEXURES (if any)

A Study On Rural Consumer’s Perception Towards Marketing Strategies Of FMCG

Products

Name:- ------------------------------

Q1. Gender
Male Female

Q2. Occupation

Student
Housewife
Businessman

Farmer

Others

Q3. Education

10+2
Graduate
Post Graduate

Others

7
Please read the following statements related to your job and express your opinion in terms of 5 =
Strongly Agree, 4 = Agree, 3 = Neither Agree Nor Disagree, 2 = Disagree and 1=Fully Disagree
PRICE
1. Would you stick to same product if
the price goes high?
2. Do you think price of FMCG
products are reasonable?
3. Do you think lower priced product
are preferred over high-priced
product ?
4. Do you think that Price stable
should be prefer ?
QUALITY
5. Do you think quality product are
expensive ?
6. Do you think quality of a product
matters while purchasing ?
7. Is there any need for quality
improvement of the product that
you are using currently?
AVAILABILITY
8. Is required product available easily
to you?
9. Is product available with different
variety ?
10. Is product available in your
locality ?
11. If product is not available in
market do you prefer buying it
online ?
PROMOTION
12 Do you think promotional scheme
affects purchasing decision ?
13 Do you think attractive packaging
motivates customers to buy
product ?
14 Do you think visual advertisement
on television are more effective
then audio advertisement on radio
?
15 Do you think small package of
FMCG products is bought more
respect to bigger package ?
16 Does presence of celebrity in
advertisement influence your
buying decision ?
17 Do you think in-store
advertisement effects purchasing
decision?

7
7