A RESEARCH PROJECT ON

“...............................................................................”

A Project Submitted to

University of Mumbai for completion of the degree of

Masters of commerce

Under the faculty of Commerce

Submitted By

RAKESH THIRUPATHI PULISETTY

M.COM – PART II SEMESTER – III

Roll No :-

Under the Guidance of

Prof. Dipak k. Boricha

SANT GADGE MAHARAJ COLLAGE OF COMMERCE & ECONOMICS

12TH Lane, khetwadi, Mumbai –4000001

December 2021
 DECLARATION
I, the undersigned MR RAKESH THIRUPATHI PULISETTY here by,
declare that the work embodied in this project work title: RURAL
MARKETING FOR FMCG “, forms my own contribution to the research
work carried out under the guidance of prof. Dipak Boricha is a result of
my own research work and has not been submitted previously to any other
university for any other Degree / Diploma to this or any other
university.

Wherever reference has been made to previous work of others it has been
clearly indicated as such and included in the bibliography.

I, here by further declare that all the information of this document has
been obtained and presented in accordance with academic’s rules and
ethical conduct

Name and signature of the learner

(RAKESH THIRUPATHI PULISETTY)

Certified by

Prof. Dipak K. Boricha

 CERTIFICATE

This is to certify that MR RAKESH THIRUPATHI PULISETTY has

worked and duly completed her Project work for the degree of Master in
commerce under the faculty of commerce in the subject in commerce
accountancy and her project is entitled, “ RURAL MARKETING FOR
FMCG ” under my supervision. I further certify that the entire work has
been done by the learner under my guidance and that to no part of it has
been submitted previously for any Degree or Diploma of any university.

It is her own work and facts reported by her personal findings and
investigations.

Name and Signature of Guiding Teacher

(Prof. Dipak Boricha)

Date of Submission:
 CERTIFICATE

I certify that the project entitled “RURAL MARKETING FOR FMCG ”

submitted to Mumbai University for master of Commerce (in advance
Accountancy), is a record of independent research work carried out by
MR RAKESH THIRUPATHI PULISETTY Roll no , student of m.com
part -II, Sant Gadge Maharaj College of Commerce and Economics, under
my supervision and guidance.

The information submitted is true and original to the best of my

knowledge.

(External Examiner) (Internal examiner)

Course co-ordinator Principal

Prof. Dipak k. Boricha Dr. K. Y. Shinde

Place: Mumbai

Date:
SR.No TITLE PAGE.
NO
1 INTRODUCTION 1

2 4 A' S OF RURAL MARKETING 5

FOR FMCG
4 RURAL MARKETING 8
ENVIRONMENT FOR FMCG

5 FEATURES OF RURAL 18
MARKETING FOR FMCG

6 RURAL MARKETING 22
STRATEGIES FOR FMCG

7 SCOPE OF RURAL MARKETING 31

FOR FMCG
8 TYPES OF DISTRIBUTION 34
CHANNELS FOR FMCG
9 TOP 10 FMCG COMPANIES IN 41
INDIA
10 CASH STUDY 51

11 CONCLUSION 54

12 BIBLIOGRAPHY 56
INTRODUCTION

Marketing may be described as the process of defining, anticipating and knowing

customer needs, and managing all the resources of the organizing to satisfy them. The
satisfaction of customer‘s needs and wants provides the existence for the organization.
The consumer‘s behavior comprises the acts, processes and social relationships shown
by individuals, groups and organizations with products and services.

Knowledge and understanding of the motives of consumer behavior helps an

organization in seeking better and more effective ways to satisfy the consumers. It helps
to select appropriate sales and advertising strategies to plan marketing program in a
more efficient manner.

The rural market of India started showing its potential from the 1960s and the 70s and
80s showed its steady development. During 90‘s, there was a steady growth of
purchasing power of rural India, and there are clear indications that the 21st century is
going to see its full blossoming.

In our country, where research on consumer behavior has been limited to names only,
not much synchronized information is available about the rural consumers. Only a few
big companies known for their marketing orientation, for example Hindustan Lever,
Philips India, Asian Paints, Larsen and Toubro, TATA group have made concrete
efforts in this direction.

There are many aspects that affect rural marketing, for instance, the rural buyers are not
very discriminating. Once they are persuaded to buy a particular product, they develop
a strong felling for it, and become brand loyals. As a result, Indian manufacturers
generally prefer selling fewer items at higher prices than selling more items at lower
prices.

Another thing is that the rural buyers are not particularly keen about quality and
packaging because of which consumer research is not accurate for entering the rural
market.

In recent years, the rural sector gives a unique opportunity to expand their market since
the urban segment is showing clear signs of saturation. The nature and characteristics

1
of rural market is quite different than the urban market. Therefore, it is necessary to
understand the rural area characteristics and environment and take action accordingly.

India is a land of diversity and about 70% of the population lives in villages. To a large
extent, villages contribute towards the economic development of the nation through the
production of food grains, vegetables, fruits etc. Export of these agricultural products
generate capital and earnings from foreign exchange.

There are approximately 600,000 big and small villages in India according to rural
market researchers. 25% of villages account for 65% of the total rural population. So
we can calculate 65% of 700 million populations by from only 150,000 villages – which
becomes a huge potential of this market.

If we go by statistics, around 70% of the Indian population lives in the rural areas. This
accounts to almost 12% of the world population.

To expand the market by making inroads into the countryside, more number of MNCs
are getting into India's rural markets. Among those are the bigshot companies like
Hindustan Lever, Coca-Cola, Pepsi, LG Electronics, Britannia, Philips, Colgate
Palmolive and the foreign-invested telecom companies as well.

Rural marketing involves a bunch of processes that includes developing, pricing,

promoting, distributing rural specific product and service which satisfies the consumer
demand and also achieves organizational objectives as expected from the target market.
It is basically a three-way marketing stage where the transactions can be

2
Urban to Rural − It is a process of selling the products and services by urban marketers
in rural areas. These products mostly include pesticides, FMCG products, consumer
durables, etc.

Rural to Urban − It is a process where a rural producer sells his products in urban
market. This may or may not be direct, but mostly there are middlemen, agencies,
government co-operatives etc. who take initiatives in the successful running of the
selling process happen successfully in an appropriate price.

Rural to Rural − It is a process which includes selling or exchange of agricultural

products, tools, cattle, carts and others to another village in its proximity.

There is a saying that the proof of the pudding lies in eating it, like this the proof of all
production lies in consumption or marketing. The speed of technological improvement
increases the buying capacity in people. They prefer more and better goods and services.
The globalization of the Indian economy has given an advantage to production and mass
distribution of goods and services

Taking these into consideration, there may arise a question whether marketers can
concentrate their activities in urban India consisting of metros and large industrial
townships only, or extend their activities to rural India. The heart of India lies in its
rural parts.

Rural market is different from urban market with respect to its economic and functional
characteristics. The characteristics, purchasing and consumption pattern of rural people
are completely different from the urban people. Due to the impact of globalization there
is a fast change in rural environment. The composition of supply and demand has also
changed significantly.

To understand this development process in the rural areas, awareness on current

environment is very necessary. Knowing the exact change in consumption of durables
is also very important for the marketers to deal with rural consumers.

Rural market in India is not a different entity in itself, but it is highly influenced by the
sociological and behavioral factors of the country. The rural market in India brings in

3
bigger revenues for the country, as the rural region consists of a maximum number of
consumers in this country. The rural market in Indian economy generates revenue
almost more than half of the country's annual income.

4 A’S OF RURAL MARKETING FOR FMCG

Whenever a company plans to enter the rural markets, it has to restructure its marketing
strategies to suit the needs and requirements of rural consumers. Since they are mostly
illiterate and belong to a low-income group.

Following are the various components of 4 A, described in the context of rural

marketing:

4
Affordability

In rural areas, the income of the people is meagre. This is the reason for which the
consumers are unable to spend on luxury goods. Moreover, they are mostly concerned
about buying the necessary products.

Keeping in mind the low affordability of rural consumers, marketers must plan for small
packaging of the products at an economical price to capture the attention of price-
sensitive consumers.

A product which caters to the need or want of consumers and is within paying capacity
of the consumer can be sold in rural market. Keeping this in mind LG launched its first
low price T.V in rural market -Sampoorna(at Re 3000) and Cineplus(at Re 4900), Nokia
developed cell phones at affordable prices for its rural consumers. FMCG companies
came up with sachets and small packs because in rural market low price pack is
preferred rather than economy pack. They started selling shampoo sachets priced at Re
1 or Re 2, Pepsodent toothpaste at Re 5, Lifebuoy soap in 50 grams pack at Re 2, Surf-
excel sachet at Re 1.50, Fair & Lovely Cream at Re 5. Most of the FMCG products are
in the range of Re 1 to 10. There is no need to provide sophisticated packaging but value
packs need to be provided.

5
Availability

The regular supply of the products in the remote areas is another challenging task. We
know that rural consumers are usually daily wage earners who spend on the necessities
every day. But, many times, the product is not readily available in the rural markets,
due to which such consumer may shift to another substitute product.

Due to poor access to rural markets, poor infrastructure and irregular or no power supply
to rural areas it is a difficult task for firms to make products available all the time in the
reach of the rural consumers. Therefore Tata tea has started selling its tea through new
channel of distribution.It decided to partner with NGOs, which have greatest reach to
the rural people, acting as the first tier and followed by 2 other tiers from villages. Rural
youth become Mobile Rural Distributor at level 2 and Small Rural Retailer become tier
3. HUL‘s Shakti Amma and Shaktimaan projects are on the same lines. Firms cannot
stick to any one supply chain model. They have to be flexible to use all possible means
of transport according to the terrain‘s requirement to achieve maximum operational
efficiency. Trucks, auto rickshaws, cycle rickshaws and hand carts to even camel carts
in Rajasthan and mules in the hilly areas can be used to deliver products to the market.

Acceptability

The product should be designed in a user-friendly manner such that it satisfies all the
needs of a consumer by deriving them some value. If the rural consumers are willing
to put in extra money for buying the product, it shows their acceptability towards the
brand.

Firms have to understand rural customers‘ need. Automotive, salt, FMCG, telecom,
insurance, soft drinks, cigarettes, TV, fans, pressure cooker, washing soaps, tea, blades,
tooth powder are the goods and services which are excelling in the rural market. Rural
consumers prefer utility oriented products. At the same time product should be
compatible with the infrastructure available in rural areas. Coca-Cola‘s Parivartan
program provided low-cost iceboxes as families could not depend on refrigerators due
to regular power cuts.

Awareness

6
A rural consumer has low accessibility to the media, such as television and smartphones.
Moreover, they have a very different perspective from that of an urban consumer.

Therefore, marketers need to focus on that medium of communication and

entertainment which are commonly available in rural areas. This will help them to
create brand awareness and grab the attention of these potential rural consumers
towards their product.

Rural consumer is not much aware about brands. They rely more on local brands. To
develop reliability factor in them towards new brands it is necessary to publicize the
brand awareness by NGOs working actively in the region. This can be done through
mouth publicity by any known resident of the same village also. E-Chaupal program of
ITC is helping it in making brand image. Illiteracy makes them unable to read basic text
about the brand identification. It is easy to sale spurious products in rural market. RC
Cola and Hello chips, copy of Pepsi and Lays respectively are getting sold widely.
Therefore packaging plays an important role. It is better to give short name of the
product in local language. Pictorial representation on packaging will also help.

RURAL MARKETING ENVIRONMENT FOR FMCG

The environment gives the complete picture of threats and opportunities of the markets.
Environment means external conditions or surroundings, those in which people live or
work and it includes all elements, factors, conditions that have some impact on growth
and development of certain organism.

Marketing cannot take place in isolation. Marketing being a dynamic activity is always
affected by its environment. A successful marketing is customer-centric; it starts from
understanding the customers.

7
Consumer decisions and actions can be properly understood only when the force field
in which they are operating is understood. As such, a study of environmental factors is
essential for marketers.

It is also important for marketer to realize the developments and trends in the
environment. An environment is that which surrounds an organization. It is the sum
totals of internal and external factors where former are controllable and later are
uncontrollable. So, environment also affects rural marketing.

The rural marketing environment is complex and is changing continuously. Rural

marketing is affected by the dynamism and uncertainty of the environment within which
it functions.

Therefore, it is essential to understand the rural marketing environment elements in

detail to meet out the challenges and explore all the opportunities provided by the rural
markets.

Rural marketing environment encompasses the marketing team within an organization

and includes all of outside factors of marketing that affect the marketing team‘s ability
to develop and maintain successful customer relationship with that targeted customer
group.

Features of rural marketing environment:

1. Affected by External Factors –

Main feature of rural marketing environment is that it is greatly affected by external

factors like demographic, economical, political, socio culture etc. It is necessary to
study these external factors from the point of view of rural markets because these factors
are different in rural markets as compared to urban markets

2. Flexibility –

8
Rural marketing environment is not static or rigid. It is highly dynamic and keep
changing as compared to last few decades. Rural markets have shown a greater change
now a days in terms of various factors like income, birth rate, housing pattern etc.

3. Complexity –

Another feature of rural marketing environment is complexity. There is not only one
or two factor which affect rural markets but there are various factors. So, it is not easy
to study all factors and hence, it is complex in nature.

4. Relativity –

Impact of rural marketing environment may differ from company to company or

country to country. Some environmental factors may affect some company a lot while
these factors may have less effect on other company.

5. Uncertainty –

It is very difficult to predict the changes of marketing environment. As environment is

changing very fast. For example, rural markets have great change in term of IT, fashion
revolution etc.

Importance of Rural Marketing Environment.

In modern time, importance of marketing environment is becoming more dynamic and

complex, day by day specially in rural areas. For the successful management and
implementation of marketing activities in rural areas, it is necessary to study and
analyse its environment.

1. To Study the Developments and Complexities of Rural Environment:

Complexities of environment refer to those factors which influence the business. These
factors affect the business in different ways. Marketing environment is studied for
measuring these complexities because in environment, changes occurs regularly like
9
change in interest of consumers, income profile of rural consumers, size, qualities,
availability of goods, occupation etc.

In short, these complexities and changes can be ascertained easily through the study of
marketing environment. Study of rural marketing environmental is also important for
marketers in order to realize the developments and trends in rural markets rather than
to know the static picture of rural market environment.

2. To Make Company Policy:

In order to prepare the company policy, it is responsibility of marketing manager to

change the company‘s policy along with change in environment. Company‘s policy will
be different in rural markets as compared to urban markets. Moreover, he should make
timely changes in these policies and strategies according to changes occurring in the
environment. Success of any business depend on the fact that how fast it can make
changes in the policies and strategies on the basis of change in environment.

3. Help in Taking Various Marketing Decision:

A marketing manager has to take various decisions regarding marketing at different

times. Appropriate decisions can be taken only if marketing manager has integrated
knowledge of marketing environment. On the basis of these decisions, he can establish
proper coordination among marketing departments.

Understanding of rural marketing environment help in taking various marketing

decisions like product decision, price decision, demand estimate decision etc.

Demographic, socio cultural, economic factors in rural areas help in preparing

marketing plan for the marketer.

4. To Recognize New Market Opportunities:

Opportunities are the favourable situations of the business. If a marketing manager has
adequate strength, then he can take benefit of these opportunities. Through environment
analysis, timely knowledge of available opportunities for business is received.
Thus, marketing manager can take benefit of these opportunities by making plans in
suitable time period. Marketing opportunity is an area of buyer need or potential
interests in which a company can perform profitably. Opportunities can be in many

10
forms and marketers must have an ability of spotting them. For this, it is necessary to
study rural marketing environment to tap the potential of rural markets.

5. To Understand Rural Market Conditions:

A marketing manager has to sell his product in the market for which he should have
knowledge about the customers, competitive units, suppliers, etc. Information about
market conditions like change in demand and supply of goods, fashion, taste,
competition, boom, recession in market, etc. is beneficial for the business. A marketing
manager gets all this information through the study of marketing environment.

6. Helpful in Providing Information Regarding Threats:

Threats refer to adverse situations which increase the risk of business. This risk can be
due to technical changes, increase in competition, change in fashion, economic changes
and lack of material. Thus knowledge of marketing environment is necessary for getting
the timely information regarding problems, challenges and possible threats of
marketing

7. Helpful in Facing the Competition and to Get Information Regarding New

Challenges and Problems:

Study of marketing environment is necessary for keeping the products of the

organization in existence for long period. For this, marketing manager has to regularly
study the products of competitive units, their cost, marketing strategies, promotion
plans, etc. A marketer can get the information about new challenges and problems with
the help of marketing environment.

8. Importance in Studying Rural Consumer Behaviour.

Rural consumers are very different from urban consumers in terms of thinking, lifestyle,
culture, behaviour etc. Consumer decisions and actions of rural consumers can be
properly comprehend only when the factors in which they are operating is understood.

9. To Protect Themselves from the Effect of External Factors:

External factors like, economic, demographic, socio-cultural etc., keeps changing.

These factors are uncontrollable and their effect is unbearable. These factors provide
threat as well as opportunities. So, in order to protect themselves and to exploit

11
opportunities, it is important for the marketers to study these external environment
factors.

Environmental Factors: Internal and External Environment

Organizational environment means the forces (commonly known as opportunities and

threats) which can make an impact on organizational activities. Organizations do not
exist in isolation. It works with the overall environment.

These environmental factors are majorly divided into two parts like internal and
external:

(i) Internal Environment:

It refers to those elements which influence the internal activities of an organization such
as – Money, Material, Machine and Labour.

(ii) External Environment:

It refers to those elements which influence the outside activities of an organization like
– Demographic, Physical, Socio-Cultural, Technological, Political and Legal influences.

So, an organization has its own internal strength and weaknesses as well as common
external opportunities and threats. They have to play effectively to convert their hurdles

12
into suitable aid which can be controlled by them. In the following sessions, we will
discuss about the major external factors which influence the organization‘s activity.

Rural Marketing Environment means the opportunities and threats available in front of
the marketers while promoting their sales very particularly in the rural areas. If the
marketers are concentrating both in rural as well as urban markets, they can mutually
tackle rural and urban environmental threats in a positive manner. For example, while
paying tax, Government is giving tax benefits or sometimes tax holidays (i.e., exempted
to pay tax) to the corporate that are starting their production unit in rural areas.

This is just because to improve rural employment opportunities, their income and
overall rural prosperity. If a manufacturer constructs or shifts their production place to
rural area, he/she can avail the tax benefit. In this way, one of the major environmental
threats (i.e., liability to pay huge corporate tax) can be overcome and will reflect in the
reduced production cost. At the same time, rural environmental threat such as – low
literacy level, reach of media, etc., can be tackled by targeting urban consumers.

In real situation, it is very difficult to conduct Strength, Weaknesses, Opportunities and

Threats (SWOT) analysis in this environment because of the frequent occurrences of
changes. Marketers, who are ready to take effective steps to change their marketing
plans and strategies, will prosper in this changing environment.

13
Rural Marketing Environment – Structures

Rural marketing structure includes the various types of environments which are very
important and to be understood by the marketers who want to sell their products in the
rural areas.

1. Demographic Environment:

Growing population is not a sign for growing market unless they have considerable
purchasing power. Generally, people between the age group of 15-35 are the largest
consumption group for many goods. More particularly, consumers who falls in the age
group of 20-35, accounts almost 25% of India‘s total consumption. If the corporate gear
up their marketing policies to attract the people below the age group of 35, they can
easily tap nearly 70% of rural potential.

2. Education and Literacy Level of Rural Women and Youth:

Fortunately, here also, the change is taking place and the rural literacy rate is risen
nearly 25% over the last two decades. The improved literacy rate naturally leads to the
growth of demand for education oriented products like – pen, pencil, notebooks and
electronic goods such as – digital diaries, calculators, etc. It also increases the rural
employment opportunities, disposable income and finally rural purchasing power for
several products in the sectors of consumer durables as well as FMCG. So, the growth
in rural literacy level, results in noticeable change for the improvement of rural people‘s
socio-economic status.

3. Density of Population:

14
Although the rural population has come down over the years, there has been
considerable increase in real terms of total number of rural population. If we compare
the rural proportion to total population in the past three decades, it is slightly decreasing.
But still the total number of rural population is increasing in a considerable manner.

4. Rural Housing:

One can easily assess the economic status and growth of any sector with the help of
housing pattern they have. Over the decades, there has been spectacular change in the
trend of housing pattern.

5. Rural Household Pattern:

Rural household pattern consists of family structure and housing pattern. In rural areas
also, Indian tradition joint family system is slowly goes down and the nuclear family
culture is spreading alike in the urban areas.

6. Family Structure:

Different types of family structures are existing in the demographic India. These can
broadly be classified based on the number of households in a family under two groups
namely; Joint family and Nuclear family.

Again following the same classification pattern, nuclear family can be divided into two
types such as – nuclear family with elders and without elders.

7. Joint Family:

Group of people (grand-parents, parents, their brothers and sisters, their children) living
together and using common property and dwelling house. Generally, the elder person
is the head of the family and he is responsible to make decisions in all issues.
8. Nuclear with Elders:

It is a shrieked form of big joint family. It consists of grand-parents, parents and their
children alone (not living with parent‘s brothers and sisters‘ family). Here, also final

15
decision is taken by the senior person. This lack of individual decision making capacity
is one of the major marketing hurdles for the marketers while promoting their products
in villages.

9. Nuclear without Elders:

This is the exact nuclear family which is commonly seen in urban sector Father, mother
and their children (nowadays, not even children only with single child) is the total
family members and they can take individual decisions in all matters.

Recently, one more different type of nuclear family system is emerging in India. In this
system, all are living in a big common house but, having separate kitchens, savings,
assets/properties, etc.

10. Occupational Patterns:

Agricultural and allied activities are the main occupation for the rural people. An allied
activity includes Horticulture, Forestry, Fishery, Animal Husbandry (dairy, poultry, and
goat), Floriculture etc., the everyday needs of the villagers are also met by many other
types of occupations. In rural sector, agri-based occupation can be different types.

16
FEATURES OF RURAL MARKETING FOR FMCG

The main reason why the companies are focusing on rural market and developing
effective strategies is to tap the market potential, that can be identified as follows:

1. Large and scattered population:

According to the 2001 census, 740 million Indians forming 70 per cent of India‘s
population live in rural areas. The rate of increase in rural population is also greater
than that of urban population. The rural population is scattered in over 6 lakhs villages.
The rural population is highly scattered, but holds a big promise for the marketers.

2. Higher purchasing capacity:

Purchasing power of the rural people is on rise. Marketers have real-ized the potential
of rural markets, and thus are expanding their operations in rural India. In recent years,
rural markets have acquired significance in countries like China and India, as the overall
growth of the economy has resulted into substantial increase in purchasing power of
rural communities.

3. Market growth:

The rural market is growing steadily over the years. Demand for traditional products
such as bicycles, mopeds and agricultural inputs; branded products such as toothpaste,
tea, soaps and other FMCGs; and consumer durables such as refrigerators, TV and
washing machines has also grown over the years.

4. Development of infrastructure:

There is development of infrastructure facilities such as con-struction of roads and

transportation, communication network, rural electrification and public service projects
in rural India, which has increased the scope of rural marketing.

17
5. Low standard of living:

The standard of living of rural areas is low and rural consumers have diverse
socioeconomic backwardness. This is different in different parts of the country. A con-
sumer in a village area has a low standard of living because of low literacy, low per
capita income, social backwardness and low savings.

6. Traditional outlook:

The rural consumer values old customs and traditions. They do not prefer changes.
Gradually, the rural population is changing its demand pattern, and there is demand for
branded products in villages.

7. Marketing mix:

The urban products cannot be dumped on rural population; separate sets of prod-ucts
are designed for rural consumers to suit the rural demands. The marketing mix elements
are to be adjusted according to the requirements of the rural consumers.

Major Income of Rural Consumers is from Agriculture:

Rural prosperity is tied with agriculture prosperity. Major part of income of rural people
comes from agriculture. In the event of crop failure, the income of rural masses is
directly affected. However, the recent past has seen a gradual reduction in the sole
dependence on agriculture, as other sectors have started playing significant role in the
rural economy.

8. Low Standard of Living

Rural population is employed in small-scale agricultural and related occupations. This

unreliability factor in case of rural income makes the rural consumers extremely
conscious in their purchase behaviour as they are not confident about their future
earnings. Majority of the rural population lives below poverty line and have low literacy
rate, low per capita income, social backwardness etc.

18
9. Traditional Outlook:

Villages develop slowly and have a traditional outlook. Change is continuous process
but most rural people accept changes gradually. They mostly resist to change. This is
gradually changing due to literacy especially in the youth who have begun to change
the outlook in the villages.

10. Infrastructure Facilities:

Inadequate infrastructure is the single most important factor that distinguishes urban
and rural markets. The infrastructure facilities like cemented road, warehouses,
communication system and financial facilities are inadequate in rural areas. Promotion
and physical distribution thus becomes very difficult in the rural areas because of
inadequate infrastructural facilities, which has increased the scope of rural marketing.

11. Market Growth:

The rural market is growing steadily over the years. Demand for traditional products,
such as bicycles, agricultural inputs, FMCG Products etc. has also grown over the years.
The growth has not been only quantitative but also qualitative.

This was the result of new employment opportunities and new sources of income made
available through rural development programmes which have resulted in green and
white revolutions and a revolution in rising expectations of rural masses. Demand for
products such as bicycles, agricultural inputs, farm products etc., has also grown over
the years. This result into the increasing the potential of rural areas.

12. Diverse Socio-Economic Background:

Due to dispersion of geographical areas and uneven land fertility, rural people have
separate socioeconomic background, which ultimately affects the rural market.
Villagers belong to different religions, culture, and social groups. Socio-cultural
background influence consumer willingness to accept innovations and new products in
different areas.

13. Literacy in Rural Area:

19
The literacy rate is low in rural areas as compared to urban areas and leads to the
problem of communication for promotion purposes. With low literacy rates, print
medium become inefficient and to an extent irrelevant in rural areas since its reach is
poor.

The dependence is more on electronic media – cinema, radio and television but the rural
literacy level has improved in the rural past. Rural people have started to go to urban
areas for higher education. Even government has introduced various schemes for rural
education

14. Purchasing Capacity:

The purchasing power of the people in rural areas in dependent on several direct and
indirect factors related to the rural economy. Marketing agricultural surplus and rural –
urban terms of trade are the main sources of purchasing power for rural consumers.
To a large extent, Indian agriculture is dependent on rainfall.

15. Heterogeneous Market:

The people living in the villages belong to different religion, culture, social and
economic backgrounds, linguistics, etc. and therefore have disparate perspective and
demands.

RURAL MARKETING STRATEGIES FOR FMCG

20
When we talk about 4 P‘s of marketing mix of a product, the first thing that strikes us
is the combination of product, price, place and promotion. This is what we will be
discussing under rural marketing strategies.

Rural Marketing is promotion of company‘s product or services to rural customers by

using strategies best suited for rural markets. Rural market is price sensitive but also
appreciates quality product, thus techniques designed by rural customers may differ
from their urban counterpart.

Indian industry is a fast developing industry. Fast Moving Consumer Goods (FMCG)
are more in demandand frequently purchased by customers. These goods include all
consumable goods (other than pulses and grains) and consumers buy at regular intervals
in small quantities. Main items in this category are detergents, soaps, shaving products,
shampoos, toothpastes and brushes, packed food stuffs, household accessories, creams,
oils, tea, coffee etc. The major players in the markets are HUL .Nestle, P & G, Colgate,
ITC, Nirma, Britania, Amul, Emami, Marico and Dabur and Patanjali.

Every family spends a large portion of monthly budget on FMCG products.

Contribution of FMCG sector in every economy is significant. Now, due to
globalization, every economy is facing tough competition. Entries of MNCs and
cheaper import have made the situation more difficult.

Let us now discuss these four components of the marketing mix concerning the product
being introduced in the rural market:

21
Product Strategies

The company first needs to analyze the requirements and demand of the rural consumers.
Since whatever products are being sold in the urban areas may not be acceptable in the
villages also.

Following are some of the factors which are taken into consideration while framing the
product strategies Product Strategies

Product Strategies

22
Product Launch: The rural consumers earn a lump sum amount two times a year
according to the crop cycle. Therefore the product must be launched only in these
harvesting seasons, i.e., rabi and kharif.

New Product Design: The product design for an urban market may not perform well
in the rural market too. Thus, the company must plan for a robust model of the product
(especially of durable goods) while launching it for rural consumers.

Brand Name: Brands are gaining significance in the rural markets as the people are
becoming aware and informed. However, in these markets, brands are recognized by
the simplicity of their name, visual logos, taste and colour of the products.

Small Unit Low Price Packaging: Considering the daily wage earners who have less
disposable income; the product should be packed in small units with a minimal price to
serve the requirements of the rural consumers.

Product Launch: The rural consumers earn a lump sum amount two times a year
according to the crop cycle. Therefore the product must be launched only in these
harvesting seasons, i.e., rabi and kharif.

New Product Design: The product design for an urban market may not perform well
in the rural market too. Thus, the company must plan for a robust model of the product
(especially of durable goods) while launching it for rural consumers.

23
Brand Name: Brands are gaining significance in the rural markets as the people are
becoming aware and informed. However, in these markets, brands are recognized by
the simplicity of their name, visual logos, taste and colour of the products.

Small Unit Low Price Packaging: Considering the daily wage earners who have less
disposable income; the product should be packed in small units with a minimal price to
serve the requirements of the rural consumers.

Pricing Strategies

In rural markets, consumers are less brand conscious and more responsive to the price
of the products. The company‘s pricing decision is dependant upon the
consumers‘ occupation and income pattern.

Let us now understand the various strategies followed by marketers while planning for
the product pricing in rural markets:Pricing Strategies

Differential Pricing: The pricing strategy for the rural markets should be different from
that in urban markets. The product should be priced slightly cheaper to grab the
attention of rural consumers.

Psychological Pricing: The psychological pricing is a tactic used to make the deal
appealing to the consumers. A product is priced at odd amounts like ₹9, ₹59, ₹99, etc.

24
which seems less than ₹10, ₹60 and ₹100 respectively. It is a fruitful strategy in rural
marketing.

Create Value for Money: The rural consumers are more concerned about the durability
of the products, i.e., the value it generates to the customer. They tend to pay a slightly
higher amount for a better product with additional features.

Pricing on Special Events: In the rural areas, occasions and festival are highly valued
and celebrated. Therefore, companies make use of these special events to attract rural
consumers by giving them various offers and discounts.

Simple Packing: Rural consumers have a basic living standard. They don‘t like to
spend much on the products which have fancy packaging; instead, they look for the
utility of the product. So it would be a waste of time and money if the brand spends on
sophisticated product packaging.

Low Price Points: A consumer belonging to the rural area have limited resources out
of which he or she needs to buy various daily utility products. Therefore, a product must
be priced quite low to make it affordable for such consumers.

Schemes for Retailers: Rural retailers are the most significant medium of sales in the
village. The companies must come up with cash discounts, gift schemes, offers and
quantity discounts to build the loyalty of such retailers towards the brand and increase
product sales.

Bundle Pricing: A bundle is a mix of different products in a single pack available to

the consumer for a reasonable price. The marketers must plan for a product bundle
pricing to make the offer appealing to the consumers and survive in the competitive
rural market.

Distribution Strategies

To create a regular demand for the product, the marketer must ensure the uninterrupted
supply of the goods in the rural markets. The product availability can be achieved by
implementing the following strategies:Distribution Strategies

25
Local Markets: In rural areas, local markets exist in the form of fares, farmers‘ market,
Sunday market and feeder market. Here, rural people gather to buy goods and
communicate with each other.

Company Depots: The company owns warehouses and depots in some major rural
areas to make the goods readily available to the native consumers and that of nearby
cities.

Public Distribution System: The government runs fair price shops in the villages to
sell the daily utility and durable products at a nominal price. In India, one such PDS is
the ration shops.

Retailers: The most straightforward way a rural consumer can acquire a product is
through a retail shop located in the village. Therefore, companies must plan their supply
chain management in such a way that the goods are regularly made available to these
retailers.

Redistribution Stockists and Clearing Agents: The redistribution stockists and the
clearing agents are the intermediaries between the companies and rural consumers.
They supply goods to the retailers from where it reaches the consumers.

26
Delivery Vans, Traders, Sales Person NGO: The company must run its van for
delivering goods in the remote areas where there is lack of proper transportation
facility.

Promotion Strategies

Promotion is the stage where the product is introduced in the market. In rural markets,
the promotion mix should be planned in such a way that rural consumers can easily
understand the product features.

Following promotional strategies are used by the marketers:

Mass Media: The villages have limited means of entertainment which include tv, radio,
press and cinema. The companies advertise their products through these popular mass
media.

Personalised Media: It can be seen as hiring a salesperson for performing door to door
sales and collecting information and queries related to the product and the brand.

Local Media: As we have already discussed in the distribution strategy, local media
includes audiovisual vans, animal parades, fares, folk programmes, etc. Displaying
advertisements, video clippings, short films, posters and paintings at these places is also
useful promotional activity.

27
Hiring Models and Actors for Promotion: Rural people are fascinated by the
television actors and models and consider them as their role models. Therefore the
marketers must engage famous faces in their tv commercials to promote the brand.

Advertise Through Paintings: The rural consumers are attracted towards the bright
colours and the pictorial representation of the products; hence, wall paintings are a good
idea in the rural markets.

Other Marketing Strategies to Conquer Rural Markets

The rural markets function diversely from the urban markets. Therefore, marketers need
to customize a whole set of different strategies to penetrate the rural market.

Being updated with the traditions and values of the rural consumers and planning the
marketing strategies accordingly, like a promotion campaign targeting a festival is
another suitable option.

Rural marketing should not be used as a means of demoting under-performing managers.

Instead, an enthusiastic person belonging to the rural background having the willingness
to work in villages must be appointed.

The marketers can introduce new business models and programmes with a social
concern like promoting education or empowering women for overall growth.

To understand the market in a better way, the company can hire a rural marketing
specialist agency which has prior knowledge and experience in the field and is
wellversed with the regional language.

To estimate the feasibility of expenditure in rural marketing, the organization should

determine its per capita sales in advance. The company must time the marketing cycle
of products by the sowing, growing and harvesting seasons of the crops.

Rural consumers are slowly upgrading to technology with the help of smartphones and
computers. The companies must make use of simple and easy to access technological
means to create awareness about the products in rural areas.

As a means of digital marketing in the villages, marketers can opt for mobile messaging,
internet ads, applications and interactive voice response to promote their products.

28
The companies must invest in rural marketing with a long-term perspective and should
have the patience to achieve the desired results.

To develop a sharp brand image and loyalty in a rural market, the best way is the word
of mouth publicity by the locals.

SCOPE OF RURAL MARKETING FOR FMCG

Due to stiff competition in domestic as well as global markets, companies are now
moving from urban areas to rural areas. Companies are establishing themselves in rural
areas by developing and upgrading the knowledge of their products and creating a
segment of necessity for their products among customers. The rural areas had negligibly
been tapped, but increasing globalization, has forced marketers to connect with the rural
markets.
29
Rural marketing is a compilation of the developed product, reasonable price,
appropriate placing and right awareness. The marketing rule sates that, the right product,
at the right price, at the right place, at the right time, through the right medium should
reach the right customer. This same rule stands good for rural marketing also.

Over the last few decades, the Indian rural market has become prominent due to growth
in the purchasing power of rural population. The rural areas consume a large quantity
of products manufactured in urban areas; therefore, the rural market is getting more
importance than urban market. Nowadays, the marketers are looking for expansion in
the untapped rural market.

The majority of Indian population lives in rural areas; therefore, there is a vast scope
for marketing in rural India

An organization follows rural marketing for the following reasons:

a. Rural Population –

Consists of more than 720 million people and forms a huge market for organizations.

b. Rural Economy –

Contributes significantly in the country‘s GDP. Rural India has a large number of
households who are aware about the branded products and willing to buy them.

c. Relation between Rural and Urban Economy –

Refers to economic connectivity between rural and urban areas.

1. Large Population:

According to 2001 census rural population is 72% of total population and it is scattered
over a wide range of geographical area

2. Rising Rural Prosperity:

Average income level has improved due to modern farming practices, contract farming,
industrialization, migration to urban areas and remittance of money by family members
settled abroad.

30
3. Changing Lifestyle:

Lifestyle of rural consumer changed considerably.

4. Life Cycle Advantage:

The products, which have attained the maturity stage in urban market, is still in growth
stage in rural market. E.g. popular soaps, skin cream, talcum powder, etc.

5. Market Growth Rate Higher than Urban:

As per the survey made by NCAER the growth rate of FMCG market and durables
market is higher in rural areas. The rural market share is more than 50% for products
like body talcum powder, toilet soaps cooking oil, hair oil etc.

6. Rural Marketing is not Expensive:

To promote consumer durables inside a state costs Rs one crore while in urban areas it
will costs in millions.

If we go by statistics, roughly around 70% of the Indian population lives in the rural
areas. That is almost 12 % of the world population. To expand the market by tapping
the countryside, more and more MNCs are foraying into India‘s rural market.

7. Rising Rural Prosperity

Average income level has unproved due to modern farming practices, contract farming
industrialization, migration to urban areas etc. There has been an overall increase in
economic activities because during the planned rural development heavy outlay of
resources on irrigation, fertilizers, agricultural equipment‘s and agro processing
industry has been made. Saving habits in rural people also has increased. This too
contributes in higher purchasing power

8. Growth in consumption

31
There is a growth in purchasing power of rural consumers. But, the average per capita
house hold expenditure is still low compared to urban spending

9. Change in life style and Demands

Life style of rural consumer changed considerably. There has been increase in demand
for durables and non-durables like table fans, radios, mopeds, soaps, etc. by rural
consumers. This provides a ready market for the producers. Rural market is expanding
day after day.

10. Decision-making Units

Women in rural areas are beginning to make fast decisions for purchases. Studies reveal
that 72.3% decisions are taken jointly in a family. With education and mass media, role
of children in decision making is also changing

If we go by statistics, roughly around 70% of the Indian population lives in the rural
areas. That is almost 12 % of the world population. To expand the market by tapping
the countryside, more and more MNCs are foraying into India‘s rural market.

TYPES OF DISTRIBUTION CHANNELNS FOR FMCG

A distribution strategy is a method of disseminating goods or services to end-users.

Implementing the most efficient distribution method for your business is key to
obtaining revenue and retaining customer loyalty. Some companies opt to use multiple
distribution methods to adhere to different consumer bases. For example, if you‘re
selling a leather futon and want to cater to people ages 60 and above, you might choose
to directly sell products via catalog. For a younger customer base, you might decide to
indirectly sell products by working with a retailer such as Walmart.

32
At its core, distribution strategy should be based on your ideal customer — how does
the average client buy goods? How could you, as a producer, make the purchasing
process easier? Is it an extensive purchase where buying the item directly from the
manufacturer could be worth the potential hassle, or is it a routine item where the
customer would rather receive the product quickly and on-demand through a retailer?
The role that an item will play in a client‘s life and the type of purchase decision
associated with a product are important aspects to consider when determining a strategy.

As mentioned above, the two main types of distribution strategies are direct and indirect.
There are also more nuanced types of distribution that fall into these categories —
intensive, selective and exclusive distribution. But what exactly do these methods
entail? Let‘s examine some of the factors that go into each of these cutting edge
distribution strategies so you can determine which practice is best for your primary
customer base.

Direct Distribution

Direct distribution is a strategy where manufacturers directly sell and send products to
consumers. There are a few different ways to implement this method. Some
organizations may opt to take a more modern approach and use an e-commerce website
where users can make a purchase online. This is an effective option for companies with
a client base that‘s moderately knowledgeable about technology, requests a specific
solution to meet needs or is devoted to a particular brand.

Another direct distribution method is through catalogs or phone orders. This option may
target an older customer base or users in specific industries that are attuned to placing
orders this way.

One important factor to consider when implementing a direct distribution strategy is the
amount of investment required. For example, manufacturers will need to add
warehouses, vehicles and delivery staff to their portfolio to effectively distribute goods
on their own.

Indirect Distribution

The term ―middleman‖ often gets a bad reputation, but in the case of distribution, these
organizations can be helpful in getting goods to consumers. Indirect distribution

33
strategies involve intermediaries that assist in the logistics and placement of products
so that they reach customers swiftly and in an optimal location based on consumer
habits and preferences.

We will discuss the different types of intermediaries and their specific benefits later in
this article, but business needs, targeted clients and type of product are typically behind
the reasoning for using this strategy. Low commitment or routine purchases are often
something that customers grab absentmindedly in a department store without any
specific brand loyalty. A tube of toothpaste is a good example of a routine purchase.
For these types of products, an indirect distribution method that places a large number
of items in multiple retail locations may be a company‘s best bet.

Intensive Distribution

Products are put into as many retail locations as possible with the intensive distribution
strategy. For example, gum is a product that typically uses this strategy. You can find
gum at gas stations, grocery stores, in vending machines and at retail locations like
Target. This method hinges on making a large number of goods available in multiple
locations. These items don‘t typically necessitate an involved purchase decision where
the customer does research before making a purchase.
Rather, these items are routine purchases that involve very minimal effort to sell.

Exclusive Distribution

When manufacturers opt for exclusive distribution, they make a deal with a retailer to
sell a product through that specific storefront only. Businesses may also sell goods
directly through their own branded stores, which is another example of exclusive
distribution. For example, customers can‘t buy a Lamborghini at any location — they
need to go to a Lamborghini dealership to purchase new luxury vehicles.

An example of an exclusive distribution deal where a manufacturer and a retailer

teamed up is the previous agreement that Apple had with AT&T in distributing iPhones.
This agreement caused people to forgo their phone plans with other companies so they

34
could get their hands on this exclusive product. This distribution strategy works
especially well for highly coveted, exclusive items.

Selective Distribution

Selective distribution is a middle-ground option between intensive and exclusive

distribution. With this strategy, products are distributed in more than one location, but
not as many as with an intensive distribution strategy. For example, clothing from
different brands may be offered selectively. A brand like Gucci may choose to distribute
its items to its own stores in addition to a few selected department stores rather than
placing its products in a range of locations such as Walmart or Target. This can help
craft an implicit high-end brand message while also increasing the opportunity for
shoppers to purchase one of its products.

For companies that do opt to go with an indirect distribution method, there are a variety
of ways to get products into the hands of customers. Here are some of the intermediaries
that businesses use to fulfill distribution strategies.

Wholesaler

The role of a wholesaler is to source products in bulk from manufacturers and then sell
them to retailers. They usually seek to obtain items for a relatively low cost so that they
can mark them up and gain profit when selling them to retailers, who then further mark
up item cost to make their own revenue. Wholesalers generally have their own
warehouses and a catalog of purchased items that retailers can select from when making
purchasing decisions. Many wholesalers also require retailers to buy a set amount of
product, meaning that goods are obtained in bulk.

Retailer

With the indirect distribution strategy, retailers are the final step in the distribution
channel before customers purchase an item. Retailers can buy goods either directly from
a manufacturer or from a wholesaler. Retailers typically purchase products at a low
price that is then marked up to gain a profit. Retailers aren‘t always storefronts — they
can also operate through the phone, online and even via catalog. With the proliferation
of the internet, many retailers decide to manage an e-commerce website instead of a
brick and mortar store to make sales.

35
Franchisor

Franchising is an entirely different way of distributing products. You‘re likely familiar

with the idea of franchising — your local McDonald‘s restaurant may be owned by a
franchisor who is licensed by the McDonald‘s corporation to sell goods in the
company‘s name. A 2016 study from FRAN data and the IFA found 732,800 franchises
operating in the United States. These individually owned businesses can use company
branding to gain sales and, in exchange, pay a flat fee and ongoing royalties to enter an
agreement.

Organizations and manufacturers with brand recognition benefit from this strategy by
gaining revenue without having to manage the granular day-to-day tasks associated
with a brick and mortar shop.

Distributor

The role of a distributor is to obtain and transport items from manufacturers to retailers
or other endpoint locations. The benefit of using a dedicated distributor is that
manufacturers don‘t have to deal with the logistics of transport or the cost of
maintaining shipping staff and materials. Distributors may also be able to package
diverse goods into one entity for sale to a retailer. For example, your company may
produce television remotes, while a different organization creates batteries. By
packaging these items together, the distributor can create a more attractive,
comprehensive product and improve the likelihood of a sale.

Item Type

Depending on the type of purchase decision that customers make when deciding to buy
a produced item, the recommended distribution method may be different. There are
three types of purchase decisions: routine, limited and extensive. A routine purchase is
something that customers spend relatively little time selecting and is generally low
priced, such as hand soap or paper towels. With these items, an extensive distribution
strategy might work best as customers aren‘t necessarily devoted to specific brands and
expect products to be accessible at various locations.
For these products, a high number of available items can lead to higher sales.

Customer Base

36
We already touched on how targeted customer demographics can inform distribution
strategy. However, to get more detailed about which distribution strategies most
effectively apply to different customers, we need to drill down to some of the ways
companies use indirect and direct distribution.

Some of the methods of direct distribution include e-commerce, direct mail and
manufacturer-run storefronts. You might remember the days where corporations sent
catalogs of their items directly to customers, and you had to call the company to place
an order. Nowadays, distribution through direct mail is less common due to
technological advances, but some companies that have a user base that is used to
purchasing goods in this manner may continue to opt for this distribution method.

Warehouse Capabilities and Logistics

Whether your company uses a direct or indirect distribution strategy depends on

whether you are willing or able to invest in aspects such as a transportation fleet,
shipping personnel and a warehouse for storing goods. This isn‘t something that a
manufacturer should enter into blindly — acquiring these necessary factors involves a
considerable upfront investment.

Your business will need to weigh the pros and cons of conducting your own distribution
versus using an intermediary when deciding on a distribution method.

Automation

Automation capabilities can increase the speed at which work is completed and free up
employee time. This ability is offered for various tasks, and specific functionality
differs based on the distribution software vendor that you go with. An example of how
this might look in practice is through the automatic assignment of items to a vehicle
based on where the other materials in that vehicle are going and its planned route.

Cloud-Based System

The proliferation of cloud-based distribution software enables users to access solutions

anytime and anywhere. This is especially helpful in the distribution industry where
employees may need to look at data not just when they‘re seated at their desks, but also

37
when they‘re working hands-on in a distribution center. This option enables flexibility
and accessibility.

Sales Order Management

Sales order management functionality often includes the ability to input orders and then
transmit them to manufacturing so that items can be produced to meet customer needs.
Some programs enable this process to occur automatically and can receive customer
information from different touchpoints.

CRM

CRM tools can assist users in looking at customer information in real time to see
historical purchasing information, products that are currently being waited on and
payment method. This can improve the customer experience along with keeping
distributors knowledgeable of varied customer expectations.

Inventory Management

Inventory management features include the ability for employees to look at capacity,
shortages and on-hand stock. This assists with planning and review of demand
processes. Some distribution programs can use inventory information and demand
planning to automatically reorder materials needed to meet anticipated needs.

E-Commerce

E-commerce features assist companies in developing an online shopping platform to

manage and coordinate sales with customers. These tools often contain support for web
analytics so that organizations can track the products that clients are most interested in
along with other relevant data points.

Logistics Management

These features enable transportation management and route planning. This may include
selecting which items should be shipped together for the most efficient shipping process
along with helping delivery drivers optimize their driving hours.

38
TOP 10 FMCG COMPANIES IN INDIA

India is the best destination for the big players and so is a big hub for FMCG companies
as more than 100 crore people of this country depend on FMCG companies for their
daily products. FMCG or Fast-Moving Consumer Goods companies manufacture
products which are sold quickly and at a relatively low cost. They sell packaged foods,
toiletries, consumables and personal care brands. FMCG is the 4th largest sector of the
Indian economy.

Below is the list of top 10 FMCG Companies in India based on sales.

1. Hindustan Unilever Ltd.

39
Hindustan Unilever Limited is India‘s largest FMCG company with its historical
presence in India for over 80yrs. This company has over 40 brands across 12 distinct
categories and nine out of ten Indian households use one or more of HUL brands. It has
revenue of around Rs 40,500+ Cr. HUL products include Fabric Wash, Household Care,
Purifiers, Personal Wash, Hair Care, Skin Care, Colour Cosmetics, Oral Care,
Deodorants, Beverages, Ice Cream & Frozen Desserts and Foods. These products are
part of the daily life of millions of consumers.

2. ITC (Indian Tobacco Company)

40
ITC, earlier known as Imperial Tobacco Company, was changed to Indian Tobacco
Company as the Company‘s ownership progressively Indianized. It was established in
1910. ITC is the second largest in the list of top 5 FMCG companies of India. It has
revenue of around Rs 51,000+ Cr. ITC is a diversified conglomerate with businesses
spanning. Its products comprises of Foods, Personal Care, Cigarettes and Cigars,
Branded Apparel, Education & Stationery Products, Incense Sticks and Safety Matches;
Hotels, Paperboards, and Packaging, Agri-Business and Information Technology.

ITC is the country's leading FMCG marketer, the clear market leader in the Indian
Paperboard and Packaging industry, a globally acknowledged pioneer in farmer
empowerment through its wide-reaching Agri Business, a pre-eminent hotel chain in
India that is a trailblazer in 'Responsible Luxury'. ITC's wholly-owned subsidiary, ITC
Infotech, is a specialized global digital solutions provider.

3. Nestlé India

41
Nestlé is the world‘s largest beverage and food company having more than 2000 brands
ranging from global icons to local favorites. They are present in 191 countries around
the world. In India, it stands the third largest in top 5 FMCG companies with revenue
of 12,000+ Cr. The Head Office of Nestlé company is located in Gurgaon, Haryana,
while 4 branch offices are located at Delhi, Mumbai, Chennai and Kolkata respectively
facilitating the sales and marketing activities.

There are opportunities that the company sees, whether it is in immunity products, better
nutrition products, more convenient products, more efficacious products, products
addressing specific health needs and health requirements. The company has strong
support and access to all possible technology and assistance from Nestle Group, he said.

4. Dabur India Ltd

42
Dabur India Ltd. is world‘s most trusted, largest and leading Ayurvedic and Natural
Health Care company with 135 years of rich heritage and experience. It has strong
presence across the globe which creates a unique product based on natural ingredients.
Its business is divided into three Strategic Business Units which includes Consumer
Care Business, Foods Business, and International Business. Dabur India Ltd. has
revenue of Rs 8,813 Cr. Its products include Hair Oils, Hair Creams, Hair Gels,
Shampoos, Dental Care and Skin Care.

Dabur India Ltd is one of the leading FMCG Companies in India.

The company operates through three business units, namely consumer care division
(CCD), international business division (IBD) and consume health division (CHD).
Their CCD business is divided into four key portfolios: healthcare, personal care, home
care and foods. Their IBD business includes brands, such as Dabur Amla and Vatik.

5. Britannia Industries Ltd.

Britannia Industries is another among India‘s most trusted food brands and
manufactures, leading Top FMCG Companies with a 100-year legacy. It has biscuits

43
brands which are India‘s most favourite and household names like Good Day, Tiger,
NutriChoice, Milk Bikis and Marie Gold. Britannia Industries Ltd. includes products
like Biscuits, Bread, Cakes, Rusk, and Dairy products including Cheese, Beverages,
Milk, and Yoghurt with a revenue of 11,200+ Cr.

Britannia takes pride in having stayed true to its credo, ‗Eat Healthy, Think Better‘.
Having removed over 8500 tonnes of Trans Fats from products, Britannia became
India‘s first Zero Trans Fat Company. Over 50% of the Company‘s portfolio is enriched
with essential micro- nutrients which nourish the body.

The company set up the Britannia Nutrition Foundation in 2009, and began working on
public private partnership to address malnutrition amongst under-privileged children
and women.

6. Godrej Consumer Products Ltd

44
Godrej Consumer Products is a leading emerging markets company. As part of the over
122-year young Godrej Group. Godrej Consumer Products Ltd enjoys the patronage of
1.15 billion consumers globally, across different businesses. Godrej Consumer
Products Ltd has revenue of 10,156 Cr. It is sixth in the list of top 10 FMCG companies
in India.

The products offered by the company include soaps, hair colour, liquid detergents, room
fresheners, hand wash, mosquito and pest repellent products. Some of the brands of this
company are Cinthol, Godrej expert, Godrej No. 1, Hit, Good Knight, Ezee, Aer,
Protekt, Godrej Fair Glow, etc. The company is a leader in hair colour, household
insecticides and liquid detergents and number two player in soaps in India.

7. Marico Ltd.

Marico Limited is one of Top FMCG Companies in India in the beauty and wellness
sector. It is seventh in the list of top 10 FMCG companies in India 2020. Over the last
26 Years, Marico has established itself as a leading consumer goods company with a

45
product portfolio spanning across Haircare, Skincare, Edible oils, healthy foods, Male
Grooming and fabric care. Brands such as Parachute, saffola, Hair& Care, Nihar
Naturals, true roots, Livon, Set Wet, Coco Soul, kaya Youth. Marico Ltd has revenue
of 7,465 Cr.

Marico Limited is one of India's leading consumer goods companies[5] providing

consumer products and services in the areas of health, beauty and wellness. With its
headquarters in Mumbai, Maharashtra, India, Marico is present in over 25 countries
across emerging markets of Asia and Africa. It owns brands in categories of hair care,
skin care, edible oils, health foods, male grooming, and fabric care.

8.Varun Beverages Ltd

Second largest franchisee in the world (outside US) of carbonated soft drinks

46
(―CSDs‖) and non-carbonated beverages (―NCBs‖) sold under trademarks owned by
PepsiCo and a key player in the beverage industry. It is 8th in the list of top 10 FMCG
companies in India 2020. PepsiCo CSD brands sold by Varun Beverages include Pepsi,
Diet Pepsi, Seven-Up, Mirinda Orange, Mirinda Lemon, Mountain Dew, Seven-Up
Nimbooz Masala Soda, Evervess Soda, Duke‘s Soda and Sting.

Food and beverages major PepsiCo is "cautiously optimistic" about the future and feels
that the worst due to the coronavirus pandemic is behind, buoyed by revival signs led
by strong rural demand and in-home consumption in urban markets, according to its
India President Ahmed ElSheikh. As the festive season peaks, the company expects
enhanced demand in categories like snacks, juices and other carbonated beverages led
by the sentiment of celebration.

9. GlaxoSmithKline Consumer Healthcare Ltd

GSK Consumer Healthcare Ltd is an associate of GlaxoSmithKline plc. of U.K, one of

the world‘s largest consumer healthcare companies. one of the world‘s leading over-

47
the-counter (OTC) medicines company. The company holds the number one position
in OTC medicines across 36 markets and is market leaders in specialist oral care. The
company has a sales of Rs 4869 Cr. It is ninth in the list of top 10 FMCG companies in
India 2020. It has revenue of 4,942 Cr.

GlaxoSmithKline Consumer Healthcare Ltd is one of the largest players in the Health
Food Drinks industry in India. The company is an Indian associate of GlaxoSmithKline
plc UK one of world's largest consumer healthcare companies. The company's principal
activities are to manufacture and distribute a wide range of healthcare foods drugs
pharmaceuticals and dairy products. The products include malted milk food malted
foods biscuits energy and protein foods milk powders ghee milk fluid and milk cream.

10. Hatsun Agro Product Ltd

Hatsun manufactures and markets products that cater to both cooking and consumption,
like milk, curd, ice creams, dairy whitener, skimmed milk powder, ghee, paneer and
lots more. Brands have become household names in over one million Indian houses.
Arun Icecreams, Arokya Milk, Hatsun Curd, Hatsun Paneer, Hatsun Ghee, Hatsun
Dairy Whitener, Ibaco and have become popular choices across the country. Hatsun
Agro Product Ltd has Rs 4760 Cr.

Hatsun Agro Product (HAP), India‘s leading private sector dairy company has
expanded its portfolio in the milk segment with the launch of ‗Hatsun Cow Milk‘ in

48
Chennai today. The product is a new offering that would provide farm fresh cow milk
to Indian households.

Hatsun Cow Milk is launched with an aim to meet the evolving requirements of
customers. Farm fresh milk is pasteurised and packed at state-of-the-art milk plants of
HAP and is certified before reaching the customers. Pasteurisation is a process of
heating milk to a specific temperature to kill harmful bacteria and nothing is added or
removed from the milk during the process. This process ensures the safety of milk.

CASE STUDY

Marketers today define rural as people living a different lifestyle as opposed to that of
those who have settled in the bigger cities and towns. Rural is basically, a mindset.
Those who possess it are rural and those who do not, are urban.

FMCG recognize rural India by certain characteristics. These are: low population
numbers, low median income, poor infrastructure [roads, electricity, communications],
and agrarian rather than industrial activity. Such rural areas are within the sphere of
influence of neighboring cities and metros. This influence determines their aspiration
levels and their viability as markets for many FMCG companies.

We regularly talk about things like butter, potato chips, toothpastes, razors, household
care products, packaged food and beverages, etc. But do we know under which category
these things come? They are called FMCGs. FMCG is an acronym for Fast Moving
Consumer Goods, which refer to things that we buy from local supermarkets on daily
basis, the things that have high turnover and are relatively cheaper.

Fast Moving Consumer Goods (FMCG) goods are popularly named as consumer
packaged goods. Items in this category include all consumables (other than
groceries/pulses) people buy at regular intervals. The most common in the list are toilet
soaps, detergents, shampoos, toothpaste, shaving products, shoe polish, packaged
foodstuff, and household accessories and extends to certain electronic goods. These
items are meant for daily use of frequent consumption and have a high return.

49
The sector is divided into two distinct segments - the premium segment catering mostly
to the urban upper middle class and the popular segment with prices as low as 40% of
the premium segment, catering to mass segments in urban and rural markets.
The premium segment is less price-sensitive and more brand conscious.

The industry is volume driven and is characterized by low margins. The products are
branded and backed by marketing, heavy advertising, slick packaging and strong
distribution networks. Also, raw material prices play an important role in determining
the pricing of the final product.

FMCG's growth story started following the deregulation of Indian economy in early
1990s which saw dismantling of the 'license raj', resulting in a spurt in new companies
and entry of a number of foreign brands. With relatively lesser capital and technological
requirements, a number of new brands emerged domestically as well while the relaxed
FDI conditions led to induction of many global players in the segment. Both these
factors resulted in leading to rapid development of the FMCG market in India. Riding
on a rapidly growing economy, increasing per-capita incomes, and rising trend of
urbanization, the FMCG market in India is expected to further expand to Rs 1,80,000
crore by 2015.

Despite the strong presence of MNC players, the unorganized sector has a significant
presence in this industry. Availability of key raw materials, cheaper labor costs and
presence across the entire value chain has provided Indian companies with a key
competitive advantage in the twenty-first century. In most categories, the unorganized
sector is almost as big if not bigger as the organized sector. Unorganized players offer
higher margins to stockiest in order to gain market share.

Within the foods segment, it is estimated that processed foods, bakery, and dairy are
long-term growth categories in both rural and urban areas. The growing incline of rural
and semi-urban folks for FMCG products will be mainly responsible for the growth in
this sector, as manufacturers will have to deepen their concentration for higher sales
volumes.

Major Players in this sector include HUL (Hindustan Unilever Ltd.), ITC (Indian
Tobacco Company), Nestl� India, GCMMF (AMUL), Dabur India, Asian Paints

50
(India), Cadbury India, Britannia Industries, Procter & Gamble (P&G) Hygiene and
Health Care, Marico Industries, Nirma, Coca-Cola, Pepsi and others.

As per the analysis by ASSOCHAM, Companies like Hindustan Unilever Ltd and
Dabur India originates half of their sales from rural India. While Colgate Palmolive
India and Marico constitutes nearly 37% respectively, however Nestle India Ltd and
GSK Consumer drive 25 per cent of sales from rural India.

With factors like rapid urbanization, increase in demands, presence of large number of
young population, etc., a large number of opportunities are available in the FMCG
sector.

With the presence of 12.2% of the world population in the villages of India, the Indian
rural FMCG market is something no one can overlook. Increased focus on farm sector
will boost rural incomes, hence providing better growth prospects to the FMCG
companies. Better infrastructure facilities will improve their supply chain. FMCG
sector is also likely to benefit from growing demand in the market. Because of the low
per capita consumption for almost all the products in the country, FMCG companies
have immense possibilities for growth. And if the companies are able to change the
mindset of the consumers, i.e. if they are able to take the consumers to branded products
and offer new generation products, they would be able to generate higher growth in the
near future.

It is expected that the rural income will rise in future, boosting purchasing power in the
countryside. However, the demand in urban areas would be the key growth driver over
the long term. Also, increase in the urban population, along with increase in income
levels and the availability of new categories, would help the urban areas maintain their
position in terms of consumption. At present, urban India accounts for 66% of total
FMCG consumption, with rural India accounting for the remaining 34%. However,
rural India accounts for more than 40% consumption in major FMCG categories such
as personal care, fabric care, and hot beverages. In urban areas, home and personal care
category, including skin care, household care and feminine hygiene, will keep growing
at relatively attractive rates. Within the foods segment, it is estimated that processed
foods, bakery, and dairy are long-term growth categories in both rural and urban areas.

51
CONCLUSOIN

We have seen about rural market, a small village and we saw about their lifestyles and
their behavior.

By looking at the challenges and the opportunities which rural markets offer to the
marketers it can be said that the future is very promising for those who can understand
the dynamics of rural markets and exploit them to their best advantage. A radical change
in attitudes of marketers towards the vibrant and burgeoning rural markets is called for,
so they can successfully impress on the 230 million rural consumers spread over
approximately six hundred thousand villages in rural India.

The rural market is very large in compare to the urban market as well as it is more
challenging market. The consumer wants those products which are long lasting, good,
easy to use and cheaper. The income level of rural consumers is not as high as the
income level of urban consumers that‘s why they want low price goods. It is one of the
reasons that the sell of sachet is much larger in the rural area in all segments.

It is necessary for all the major companies to provide those products which are easy to
available and affordable to the consumers. It is right that the profit margin is very low
in the FMCG products, but at the same time the market size is much large in the rural
area. The companies can reduce their prices by cutting the costs on the packaging
because the rural consumers don‘t need attractive packaging. Application of 4A* is also
a major task for the major companies in this area.

Rural market has an untapped potential like rain but it is different from the urban market
so it requires the different marketing strategies and marketer has to meet the challenges
to be successful in rural market.

52
Ideally, you should do a benchmark study before the start of the campaign to check on
specific parameters. Further, conduct post studies to find out if the desired objectives
have been achieved . Do not judge a campaign, only by the cost per contact approach.
Results vary depending on the task and support given to the efforts. And in assessing
the cost per contact, remember to include the approximate number of eyeballs and ears
that your campaign may be getting, while going around a village or enroute to a market.

Many companies do not have a system of archiving case studies in rural marketing– the
lessons learnt from various efforts in the form of reports must be available for future
brand managers so that past mistakes are not repeated. Or else, the experience gained
by a manager on the job, is lost to the company, when he moves on to another job. This
is particularly true of large professionally managed organizations.

Rural Marketing is a marriage, which to be successful, needs sustained efforts and long
term investments in terms of company‘s resources, to keep it going. If it is treated as a
flirtation or a one-night stand, the results will be temporary and unsustainable.

If you really believe that your company has a bright future in rural markets, or if you
would like to target the rural market for better results, then do make the necessary
investments today. In case you have an early mover advantage in relation to your
competitors, then your investments in marketing will ensure that you reap rich rewards
in the future. However, do not be impatient and expect miracles overnight, and equally
do not lose hope easily at the first small setback.

53
BIBLIOGRAPHY

https.ruralmarketing.com

economoicsdiscussion.net

businessmanagementides.com

theinvestorsbook.com mbaskool.com

54
55