PROJECT DISSERTATION

ON

“A STUDY ON THE SEMI- 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 - 11

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 Sample Unit 31-31
2.3.3.2 Sample Size 31-31
2.3.3.3 Sampling Method 31-31
2.3.4 Designing Questionnaire 31-32
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 semi 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 semi 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 semi rural area of Delhi . Semi -rural people from semi
rural area are covered under this survey. The main focus is to determine semi 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 Semi rural
consumers towards Fast Moving Consumer Goods (FMCGs) by asking semi rural people about
there satisfaction level towards the FMCG products . The study used primary data collected from
as sample of 100 semi rural consumers from semi 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 semi 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

Semi rural development implies both the economic betterment of people as well as greater social
transformation. In order to provide the semi rural people with better prospects for economic
development, increased participation of people in the semi 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 semi 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.

2
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 semi rural India compared with urban India. Semi-urban and semi rural segments
are growing at a rapid pace and FMCG products account for 50 per cent of total semi 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 recent

3
developments in the FMCG sector are as follows:

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 semi
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.

4
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

Semi Rural consumption has increased, led by a combination of increasing incomes and higher
aspiration levels; there is an increased demand for branded products in semi rural India. The semi 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 semi 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 semi rural area, the semi rural market
holds a lot of marketing potential. There is a wide spread difference in the standard of living
between urban and semi rural India. In order to launch products and develop advertising for semi
rural market there is a need to understand both the semi rural context and also the consumer very
5
well. Promotion of brands in semi 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 semi rural areas. Intact
the opinion leaders are the most influencing part of promotion strategy of semi 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 semi rural market has a grip of strong country shops, which affect the sale of various products
in semi rural market. The companies are trying to trigger growth in semi rural areas. They are
identifying the fact that semi 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 semi rural people. Marketer should understand the price sensitivity of a consumer
in a semi rural area.
This research paper will be therefore an attempt to study the brand promotion in the semi rural
market and the overall potential of the semi 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 semi rural marketing have two understanding :-
1. The urban metro products and marketing products can be implemented in semi rural markets
with some or no change.
2. The semi 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 semi rural markets are different in so many terms.
 Low priced products can be more successful in semi rural markets because the low
purchasing, purchasing powers in semi rural markets.
 Semi Rural consumers have mostly homogeneous group with similar needs, economic
conditions and problems.

6
  The semi 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 semi rural marketing effects in a
significant manner so than companies can enter in the semi 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 SEMI RURAL MARKET

1. There are nearly 85,000 semi rural haats (Super Markets) in India. In 2015-16, LIC sold
50 percent of its policies in semi rural India with 25% new policies.
2. Out of 354 million internet users 138 million are from semi 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 semi 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.

2. Personifying the Brand: Visual control mechanism plays a vital role in identifying the
brands in terms of personification. People can be identified the brands when seeing the visual

7
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 of
brand strength in setting buy ratings).

f) Provide resilience in times of negative press.

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

8
BRANDING STRATEGY IN SEMI RURAL PLACE

Product
Developme
nt

Database
Creation & Brandin
Manageme g
nt

SEMI-Rural
Branding
Strategy
DM Market
Campaig Resear
ns ch

Communic
Event ati
s on
Campaig

a) Semi Rural Product Development: The semi 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 semi rural markets. Sometimes, existing products might have to be
modified to suit these markets too accordingly. Semi Rural product development has the strong
edifice on a great deal of research like feasibility studies, semi rural aspiration, semi rural profiling
and so on. This paves way for a great deal of infrastructure and expertise in this area.

b) Semi Rural Branding: Semi Rural branding bear’s quite different stand from urban branding.
The first step towards semi rural branding is to research and gain insight into the working of semi
rural markets. Based on this communication campaigns have to be developed with a lot of semi
9
rural sensitivity. Semi Rural branding is attained by way of opting to a greater percentage of local media
and a smaller percentage of the mass media. Semi 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 semi 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) Semi Rural Market Research: Semi Rural markets behave most differently from urban
markets. While many marketers have tried to market their products in semi rural areas, just a
handful of the same only has succeeded. A strong insight into semi rural consumer behavior and
sensitivity to their values and beliefs is essential; to upgrade the semi rural market semi rural
market research encompasses not just gathering data but analyzing them and linking the findings
to promoting your products.

d) Semi Rural Communication Campaigns: Communication for semi 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 semi rural areas. Besides mass
and outdoor media, semi rural extravaganza like temple festivals, melas and other events where the
villagers come together can be used for promotions.

e) Semi Rural Events: In the semi rural context, one of the best ways to capture the attention of the
audience is through Event-management. Since semi rural areas have limited venues for
entertainment, conducting an event in semi 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. Semi rural public are the target audience
and hence the portfolio of event management has to be handled professionally with diligent care
and broad perspective.

10
f) Semi 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 semi
rural markets. In the area of Direct Marketing, semi rural team has to be trained, to be sensitive to
semi 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
semi 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 semi 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 semi 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.

11
 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 semi
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.

12
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 semi 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.

13
 ADVANTAGES TO FMCG SECTOR IN SEMI 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 Semi Rural Market
Semi 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 s e m i
rural population is approximately 400 Millions. And an average citizen in semi rural India has
14
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 semi rural
market share. The market for FMCG products in semi 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 growth
potential is huge. Lower price and smaller packs are also likely to drive potential up trading.

15
 (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 SEMI 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

16
toothpastes have also posted market share improvement, with revived growth in semi-urban and
semi rural markets.

SWOT ANALYSIS OF FMCG

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

Opportunities
• Untapped semi 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 semi rural demand
• Tax and regulatory structure

17
 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 semi rural India. Semi Rural marketing has
become the hottest marketing arena for most of the FMCG companies. The semi 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 semi rural market and are making new
strategies for targeting the semi rural consumer. The Indian FMCG companies are now busy in
formulating new competitive strategies for this untapped potential market. Therefore, a

18
comparative study is made on growth, opportunity, and challenges of FMCG companies in semi
rural market. One of the most attractive reasons for companies to tap semi rural consumers is that
an individual‘s income is rising in semi 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 semi rural market and aims to discuss about customer attitude towards better purchasing
decision for FMCG products in semi rural market with growing awareness and brand
consciousness among people across various socio-economic classes in semi rural market. The level
of avaibility of FMCG products among semi 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 semi rural
area’s when they buy FMCG products. To attain this objective a survey was developed and
administered across some part of semi rural areas.
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 semi rural India is a profitable and
potential market for FMCG producers. Semi 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 semi rural consumers. In this process they need to
understand the semi rural consumer buying behaviour which may differ geographically. . The
study emphasizes on the factors which influence the purchasing pattern of semi 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 merchandising, effective

19
price strategy etc., on customer buying behaviour have been analyzed. The study is based on the
primary data collected from semi 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 semi rural area. The study reveals that,
the consumer purchases the convenience goods in semi rural market was mostly did once a week
and it is monthly for daily consumption goods . With the increase in real income of semi rural
people, a shift was found to have taken place in the items consumed by the semi rural consumers.
The buying behaviour in general and buying decisions in particular in semi 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 semi 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

20
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 semi 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 semi 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 semi rural market and heterogeneity of
population which the retailers ought to meet for satisfying the needs of consumers.

21
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,
semi rural India has become a massive consumer goods market. FMCG has emerged as a major
product category in semi rural consumption. Companies marketing FMCG to semi rural consumers
cannot merely extend their general marketing strategies to semi rural markets. Instead, they need
to devise semi rural specific strategies. In this process, they need to understand crucial issues
relating to semi rural consumer behaviour and more specifically relating to different geographic
regions of the country. This paper focuses on understanding factors that affect the semi 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, semi 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
22
the importance of promotional tools in semi rural areas. He suggested that FMCG companies must
enter and tap the semi 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 semi rural consumer is through organized media. More number of semi rural
consumer (~70%) listen to radio and many go to cinema. Semi 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.

23
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 semi 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.

PRICE AVAIBILITY

PROMOTION QUALITY

FACTORS EFFECTING SEMI RURAL

CONSUMERS’ PERCEPTION TOWARDS
MARKETING STRATEGIES OF FMCG PRODUCTS

Model Of factor Effecting consumer Perception Towards marketing Strategies Of FMCG

Product

24
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 semi rural
India: "My vision of semi 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. Semi Rural incomes have to be increased. Semi Rural infrastructure
has to be improved. Semi Rural health and education needs have to be met. Employment
opportunities have to be created in semi rural areas." 'Go semi rural' is the slogan of marketing
gurus after analyzing the socio- economic changes in villages. The Semi Rural population is nearly
three times the urban, so that Semi 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 semi 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 semi 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
semi rural market is as unpredictable as rain. It has always been difficult to gauge the semi rural
market. Many brands, which should have been successful, have failed miserably. More often than
not, people attribute semi 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 semi rural markets offer to the
marketers it can be said that the future is very promising for those who can understand the
dynamics of semi rural markets and exploit them to their best advantage. A radical change in
attitudes of marketers towards the vibrant and burgeoning semi rural markets is called for, so they
can successfully impress on the 230 million semi rural consumers spread over approximately six
hundred thousand villages in semi rural India.

25
What semi rural market buys?

Semi 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 Semi Rural Market?

The Indian semi rural market has a huge demand base and offers great opportunities to marketers.
Two- thirds of Indian consumers live in semi rural areas and almost half of the national income is
generated here. The reasons for heading into the semi 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 semi rural market is
zooming ahead at around 25 per cent annually. "The semi 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 semi 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 semi rural marketing and semi rural development consultancy has found that
53 per cent of FMCG sales lie in the semi 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

26
from small towns, so did half the transactions on Rediff's shopping site.

TRENDS IN SEMI 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 semi 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. Semi Rural India is not as illiterate as expected.
3% of 1,066 lakhs semi rural households have at least one graduate. 16% have at least one member
who has passed SSC, HSC levels. Keeping these figures in mind, Semi 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 SEMI RURAL MARKETS

1. Focus beam strategy - Marketers can aim to penetrate the semi 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 semi
semi 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 ―Semi 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.

27
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

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.

28
 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

29
 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 semi rural market and also to find out the potential
of semi rural market .

2.2 Research objectives of the study

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

 To evaluate semi rural consumers’ perception towards FMCG product.

 To find out the promotion strategy of FMCG companies in the semi 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

30
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 : semi 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.

31
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 semi 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 semi 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 semi rural consumer with different occupations.

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

32
2.4 Limitation

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

2. For a detailed study on semi 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.

33
 CHAPTER- 3

ANALYSIS
AND INTERPRETATION

34
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

35
 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 .

36
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 .

37
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 .

38
 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 .

39
 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 .

40
 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 .

41
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 .

42
 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 .

43
 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

44
 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 .

45
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

46
 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 .

47
 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 .

48
 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 .

49
 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.

50
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

51
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 .

52
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 .

53
 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

54
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 semi rural consumer with different occupations and with different
education qualification.

55
 CHAPTER- 4
FINDINGS AND
SUGGESTIONS

4.1 Findings

4.2 Suggestions

56
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
semi 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 semi 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 semi 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 semi rural people .
 Painting - A picture is worth thousand words. The message is simple and clean. Semi 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

58
 CHAPTER- 5
CONCLUSION

5.1 Conclusion

5.2 Scope for further research

59
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
semi 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 semi rural market,
because such study will help them in understanding the buying behavior of the customers living in the semi
rural areas.
 Finding of the present research may be very useful in designing the marketing mix strategies, in other semi
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 .

60
 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

61
ANNEXURES (if any)

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

FMCG Products

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

Q1. Gender

Q2. Occupation

Q3. Education

62
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?
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64