Term paper

ON

RURAL MARKETING
TOPIC- RURAL MARKETING (ASSAM)

SUBMITTED TO –
Mr. Krishan Gopal
(LECT.) SUBMITTED
BY-
RAJIV KUMAR
RT180
2A10
 10805347
M.B.A 4(semester)

Acknowledgement
First of all I would like to take this opportunity to thank the Lovely
University for having term paper as a part of the M.B.A. Many
people have influenced the shape and content of this term paper, and
many supported me through it. I express my sincere gratitude to
Professor Mr. krishan Gopal SIR for assigning me a term paper

on “Rural marketing (ASSAM)”This is an interesting and

exhaustive subject.
He has been an inspiration and role model for this topic. HIS guidance
and active support has made it possible to complete the assignment.

I also would like to thank my Friends who have helped and encouraged
me throughout the working of the term paper.

Last but not the least I would like to thank the Almighty for always
helping me.

RAJIV KUMAR
 TABLE OF CONTENTS
• INRODUCTION
• Fast Moving Consumer Goods (FMCG)

• Rural Market and FMCG Products

• ASSAM LUANCH TO THE MEHAK TEA

• MISSION& VISION

• 4 P’s of Marketing of MEHAK TEA

• Benefits of MEHAK tea Health Benefits
• Market Segmentation of Indian Rural Market
• Opportunities in Assam rural area

• Media mix:

• Budgeting Electronic Media

• Bibliography.
 Introduction
Assam State which is consisting of 23 Districts and a population of 266, 38,407, 88% of which is
inhabitant over approximately 25000 villages spread over an area of 78438 Sq. kms is one of the
most disadvantaged States in terms of infrastructure development in the country. Almost 20% of
its geographical area is hilly, it gets very heavy rain fall and recurring floods cause extensive
damage to the road infrastructure. Agriculture is the main livelihood of the majority of the
population of the State where almost 75% of the total work force is taking agro-based activities
for livelihood. Other than agriculture, a very small percentage of the work force is engaged in
livestock, forestry and fishery etc. while few more are engaged in mining and manufacturing
processes. Rural roads network has been in a very bad shape in the State. Poor kutcha roads or
even no roads to a large number of habitations have restricted communities from participating in
the benefits of development and have caused acute socio-economic isolation.

A programme like PMGSY was an urgent need of the rural people of the State. Under the
programme 1574.97 kms of roads have been approved, which covers 2589 habitations and for
which Rs 304.92 Crore has been released. The State Rural development department is the nodal
department for the programme and the State PWD is the executing agency.

The Ministry of Rural Development decided to undertake a Rapid assessment of the socio-
economic impact of PMGSY on the habitations/villages connected so far under PMGSY. The
study aimed at assessing that, up to what extent the rural roads under PMGSY have been able to
achieve:

• Socio-economic transformation.
• Breaking the isolation of village communities.
• Elimination of the disparity between rural and urban population and bringing about urban
- rural integration.sparity between rural and urban population and bringing about urban
� rural integration.

It also was aimed at finding out the benefits of such roads in terms of providing easy access
during all seasons to markets, education facilities, health services and increase in employment
opportunities and productivity of such areas.
Fast Moving Consumer Goods (FMCG)

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. FMCG’s constitute a large part of consumers’ budget in all
countries. The retail sector for FMCG’s in India is in the process of a drastic transformation. The
transformation of the retail market is likely to have a long-lasting impact on wholesale trade and
the distribution of FMCG’s as well. Traditional wholesalers are the most likely losers, because
large retailers tend to buy directly from suppliers. The Indian FMCG sector is the fourth largest
sector in the economy, with a total market size in excess of US$ 13.1 billion. It has a strong
MNC presence and is characterized by a well established distribution network, intense
competition between the organized and unorganized segments and low operational cost.
Availability of key raw materials, cheaper labor costs and presence across the entire value chain
gives India a competitive advantage.

Products and Categories –

Personal Care, Oral Care, Hair Care, Skin Care, Personal Wash (soaps); - Cosmetics and
toiletries, deodorants, perfumes, feminine hygiene, paper product; - Household care fabric wash
including laundry soaps and synthetic detergents, household cleaners, such as dish/utensil
cleaners, floor cleaners, toilet cleaners, air fresheners, insecticides and mosquito repellents,
metal polish and furniture polish – Food.

Top 10 FMCG Companies in India

1. Hindustan Unilever Ltd.
2. ITC (Indian Tobacco Company)
3. Nestlé India
4. GCMMF (AMUL)
5. Dabur India
6. Asian Paints (India)
7. Cadbury India
8. Britannia Industries
9. Procter & Gamble Hygiene and Health Care
10. Marico Industries

Rural Market and FMCG Products

Rural market is getting an importance because of the saturation of the urban market. As due to
the competition in the urban market, the market is more than or as saturated as most of the
capacities of the purchasers have been targeted by the marketers. So the marketers are looking
for extending their product categories to an unexplored market i.e. the rural market. This has also
led to the CSR activities being done by the corporate to help the poor people attain some wealth
to spend on their product categories. Here we can think of HLL (now, HUL) initiatives in the
rural India. One of such project is the Project Shakti, which is not only helping their company
attain some revenue but also helping the poor women of the village to attain some money which
is surely going to increase their purchasing power. Also this will increase their brand loyalty as
well as recognition in that area. Similarly we can think of the ITC E-Chaupal, which is helping
the poor farmers get all the information about the weather as well as the market price of the food
grains they are producing. In other view these activities are also helping the companies increase
their brand value. So as it is given above the significance of the rural market has increased due to
the saturation of the urban market as well as in such conditions the company which will lead the
way will be benefited as shown by the success of HUL and ITC initiatives. There was a time
when the FMCG companies ignored rural market, they took no any interest to produced or sell
products in rural market in India. It was the initial stage of FMCG companies in India. As per as
the time has passed, the strategy and marketing style of FMCG companies has changed. In 1970,
Nirma was the first FMCG Company to initiate and produce goods according to rural
consumers. In the early 1970s, when Nirma washing powder was introduced in the low-income
market, Hindustan Lever Limited (HLL) reacted in a way typical of many multinational
companies. However, Nirma’s entry changed the whole Indian FMCG scene. It became a great
success story and laid the roadmap for others to follow. MNC’s like HLL, which were sitting
pretty till then, woke up to new market realities and noticed the latent rural potential of India. In
1983, C K Ranganathan started selling shampoos in a sachet with an investment of Rs 15,000
and dared to take on the multinationals, Lever and P&G, the unquestioned leaders in that
segment. He targeted rural and small-town consumers who used soaps to wash their hair. He
introduced the sachet at 90 paise and then reduced it to 50-paise. And that’s when the
multinationals noticed him. Sales zoomed from 35,000 sachets to 12 lakhs. Initially they took
any sachet, but after three months they restricted to Chik sachets.

Low penetration and low per capita consumption:

Due to the large size of the market, penetration level in most product categories like jams,
toothpaste, skin care, hair wash etc. in India is low. This is more visible when comparison is
done between the rural and the urban areas. The average consumption by rural households is
much lower than their urban counterparts. Existence of unsaturated markets provides an
excellent opportunity for the industry players in the form of a vastly untapped market as the
income rises.

Launching of mehak tea in Assam

Tag line- nai subah ki shuruat ‘mehak tea’ ke sang
MISSION

Build branded food business to improve quality of life by offering tasty, affordable and highly
nutritional product to our consumer. While maximizing stakeholder value.

VISION

The strategic priorities of MEHAK TEA are focuses on delivering shareholder

Value through the achievement of sustainable, capital efficient and profitable long
Term growth. Improvements in profitability will be achieved while respecting quality and safety
standards at all times. In line with this objective, we envision Nestlé milk india to grow in the
shortest possible time into the number one food company in India with unique ability to meet the
needs of consumers of every age group- from infancy to old age, for nutrition and pleasure,
through development of a large variety of food categories of the highest quality. We envision the
company to develop an extremely motivated and professionally trained Innovation and
renovation. We aspire, as a respected corporate citizen, to continue playing a significant role in
the social and environmental sectors of the country. Most innovative and fastest growing food
company offering Products enjoyed in “Every home every day”

Objectives
The objectives of the MEHAK TEA

To meet the everyday needs of people everywhere – to anticipate the aspirations of consumers
and customers and to respond creatively and competitively with branded products and services,
which raise the quality of life?

Total commitment to exceptional standards of performance and productivity, to working

together effectively and to a willingness to embrace new ideas and learn continuously.
4 P’s of Marketing of MEHAK TEA
Product:
Bulk Tea
All grades of CTC Teas
All grades of Orthodox Teas
Organic Tea - Orthodox grades Teas

Are supplied in packaging as per ISO norms as well as customer requirements viz. 4-ply Kraft
Paper Sacks, Multiwall Paper Sacks, Rigid T--Sacks, Polywoven Sacks, Corrugated Fiber
Carlos, and Polyclinic Jute Bags etc.

Instant Tea Instant Tea Division caters to customer specific product and is used for light density
100% Teas, Iced Tea Mixes and in the preparation of Ready to Drink (RTD) beverages. Instant
Tea powder is packed in bulk packages of 20/25/35 kg each.

• Intant tea powder - heavy

density
 • Instant tea powder -
institutional density

• Instant tea powder - grocery

density

• Micro milled instant tea

powder

Price:

Marketers need to understand the psyche of the rural consumers and then
act accordingly. Rural marketing involves more intensive personal selling
efforts compared to urban marketing. Firms should refrain from designing
goods for the urban markets and subsequently pushing them in the rural
areas. To effectively tap the rural market a brand must associate it with the
same things the rural folks do. This can be done by utilizing the various rural
folk media to reach them in their own language and in large numbers so that
the brand can be associated with the myriad rituals, celebrations, festivals,
“melas” and other activities where they assemble. All the prices of the
products depend upon the package i.e., 50gms or 100gms. Normally a
Penetrating Strategy is used frequently.

Place: (Distribution)
One of the ways could be using company delivery vans which can serve two purposes- it can
take the products to the customers in every nook and corner of the market and it also enables the
firm to establish direct contact with them and thereby facilitate sales promotion. However, only
the bigwigs can adopt this channel. The companies with relatively fewer resources can go in for
syndicated distribution where a tie-up between non-competitive marketers can be established to
facilitate distribution. Annual “melas” organized are quite popular and provide a very good
platform for distribution because people visit them to make several purchases. According to the
India n Market Research Bureau, around 8000 such melas are held in rural India every year.
Rural markets have the practice of fixing specific days in a week as Market Days (often called
“Haats’) when exchange of goods and services are carried out. This is another potential low cost
distribution channel available to the marketers. Also, every region consisting of several villages
is generally served by one satellite town (termed as “Mandis” or Agri-markets) where people
prefer to go to buy their durable commodities. If marketing managers use these feeder towns
they will easily be able to cover a large section of the rural population.

Promotion:
Firms must be very careful in choosing the vehicle to be used for communication. Only 16% of
the rural population has access to a vernacular newspaper. So, the audio visuals must be planned
to convey a right message to the rural folk. The rich, traditional media forms like folk dances,
puppet shows, etc with which the rural consumers are familiar and comfortable, can be used for
high impact product campaigns.

MEHAK TEA

"Time for you and time for me, And time yet for a hundred in decisions, And for a hundred
visions and revisions,, Before the taking of a cup of tea “An Aromatic Story It's happening
slowly, surely and smoothly. People of the world are now waking up To the pleasures of
MEHAK TEA It comes from the people who have been giving the World some of the finest
blends of tea, since 1933 - Hasmukhrai & Co. The Company launched MEHAK tea to meet the
ever-increasing demands from distant shores such as yours. Wherever tea is a tradition, MEHAK
tea Is always welcome, because here is a blend of such fine flavor, freshness and consistency
that meets your expectations. It's everything your cup of tea should be.

Tea is a tradition in our country. As, no doubt, it is in yours as well. But slowly, surely, people
all over are being a little more conscious about the tea that they drink. Slowly but surely, tea is
being referred to as MEHAK TEA. Surely, one more delightful indication of the world growing
smaller. And in a way, of people coming closer. Now let's raise our cups, to this cheerful
tradition and to our little world of big-tasting teas.

MISSION STATEMENTS

• The objective is to create new blends for the world.

• Teas of a superlative quality that taste buds had never known
• To extend its reach, cross geographical and cultural boundaries and reaching the hearts of
the people.

Benefits of MEHAK tea Health Benefits

Drink tea, every few hours a day, says recent findings by Unilever Research Laboratories. After
much experiment with combinations of various kinds of drugs that supposedly enhanced
memory power, the findings seek to subtly suggest that the most affordable remedy, without
medical expenses involved, was already available and yet ignored. Findings by Unilever point to
a strong link between tea and an increase in mental alertness and other mental and physical
attributes. Drinking tea every few hours can help prevent a decline in mental alertness and
performance throughout the day. Tea is a rich source of flavonoids. The flavonoids in tea are
found to be effective in improving blood circulation and skin health. Research in Japan and
Netherlands also indicate that tea prevents strokes and heart attacks, certain cancers, check
cholesterol levels and inhibit formation of dental plaque. Studies have shown that black tea
consumption reduces the risk of heart disease and stroke. It maintains a healthy circulatory
system of arteries and veins. Today researchers are finding that a steaming cup of tea can relieve
more than just the stress of a harried day. Drinking the brew has been linked with a lowered risk
of everything from tooth decay to heart disease to stroke. In a study of more than 1000 Indian
men, the more green tea they drank, the lower their concentrations of blood cholesterol dropped.
And recently, University of Minnesota researchers found a link between tea consumption and a
decreased risk for cancers of digestive and urinary tract organs in women. Study on humans on
tea and heart health, revealed that drinking more than five cups of black tea had the lowest risk
of severe atherosclerosis.

Market Segmentation of Indian Rural Market the

Indian rural market can be segmented on the following
basis:

Rural Rich Consumers:

The rural rich consumers can be estimated on the basis of land owned by them. They occupy
major portion of the land (in acres) in their locality. They engage in agriculture and allied
activities. They hold important positions in their places. They may be a member of political party
or may be having the support of political party. They give employment opportunities in their
field for other peoples in their locality. They enjoy huge surplus of disposable income. They
mostly use the disposable income for purchasing jewels for their family members. They also
deposit consistent portion of their amount in the nationalized banks

Rural Consumers above Poverty Line:

They are identified as the middle class peoples residing in rural areas. There are 50 million
households that live above the poverty line in rural areas of India. When comparing to the rural
rich consumers they own few acres of land. They mostly engage in agriculture and few other
allied activities. They have only less disposable income and deposit in local banks. They also
invest their disposable surpluses if any in jewels for their daughters' marriage. Most of them
have two-wheelers like MEHAK TEA and only few of them prefer to have TEA and use this
TEA. Only few of them have tractors and they send their children to the nearby government
educational institutions that charge fewer fees. They prefer to have brands, which gives them
value for money spent.
Rural Consumers below Poverty Line:
There are 260 million Indians who live below poverty line and most of them are located in rural
areas. They occupy minimum portion of land in their locality. Some of them not even have any land
in their locality. They survive their family by working in the farm of rich persons in their locality.
They work for daily wages and sometimes they are compensated for their work with food grains.
They live in hut or in the farm of rich persons. When they don’t have work in their village they
migrate to the nearby village for work. They also involve in temporary seasonal business for their
survival. They mostly purchase local brands or fake brands for their usage because of its less pricing.

4 P’s of Marketing of MEHAK tea

Product:

MEHAK TEA -Available in 50, 100, 250 & 500 grams

respectively

MEHAK TEA - Available in 250, 500

PET JAR grams and 1 Kg. only

MEHAK TEA BAGS - In Packs of 25, 50 & 100

respectively
 SOCIETY PREMIUM - Available in 250 grams Jars on
request only

T - TOWN TEA - Available in 250 & 500 grams Jar

only

Price:

The Pricing strategy used by MEHAK tea is somewhere in between penetrating and skimming,
but the major part is occupied by Penetrating. Prices of Tea are as per the product packages. E.g.,
- 100 gms are @ Rs.20/-.

Place (Distribution):
Rural markets have the practice of fixing specific days in a week as Market
Days (often called “Haats’) when exchange of goods and services are carried
out. This is another potential low cost distribution channel available to the
marketers. Also, every region consisting of several villages is generally
served by one satellite town (termed as “Mandis” or Agri-markets) where
people prefer to go to buy their durable commodities. If marketing managers
use these feeder towns they will easily be able to cover a large section of the
rural population. Distribution of Society is all around the Urban and Rural
Market. The Manufacturer gives it to the wholesaler, wholesaler in turn gives
it to the retailer and then finally to the customers.

Promotion:
They arrested the eyes. There was something different about them. Something fresh. Something
elegant. Little wonder then, that tea-lovers felt persuaded to pick them up and take them home.
Yes, we're talking about the package. As a matter of fact, everything was designed to appeal to
the senses. From the packaging to the point-of-sales of attractions, from the press advertisements
to the posters, from radio jingles to TV commercials. The jingle "Tea. Tea. Tea…………."
caught on so much that people we heard humming it, while walking into stores, waiting for
trains, watching a cricket-match or generally to ease out their boredom. Even children were
heard singing it. One felt freshness, newness, a sense of contentment similar to the feeling one
gets after each sip of Hasmukhrai & Co.'s teas. You couldn't expect any less from them. After
all, they take so much trouble to create such exquisite blends of tea. Each of these pieces of
communication was an invitation in every sense of the word. In fact, the first ad for MEHAK tea
said "Welcome to the Society…” It was an invitation well accepted, for the society of tea lovers
is growing larger, day by day. We're tempted to say “Tea cheers for the design."

Opportunities in Assam rural area

Infrastructure is improving rapidly.
 In 50 year’s only 40% villages connected by road, in next 10 years another 30%
 More than 90% villages electrified, though only 44% rural homes have electric connections
 Rural telephone density has gone up by 300% in the last 10 years; every 1000+ pop is
connected by STD
 Number of houses doubled from 22% to 41% and houses halved (41% to 23%)
 Rural Literacy level improved from 36% to 59%
 Low penetration rates in rural so there are many marketing opportunities

Media mix:
Newspapers and magazines:
English newspapers and magazines have negligible circulation in rural areas. However local
language newspapers and magazines are becoming popular among educated facilities in rural areas.
Examples: Newspapers: Eenadu in A.P., Dina Thanthi in Tamil Nadu, Punjab Kesari in the North,
Loksatta in Maharashtra and Tamil magazine Kumudam are very popular in rural areas.
 Television:
It has made a great impact and large audience has been exposed to this medium. HLL has been using
TV to communicate with the rural masses. Lifebuoy, Lux, Nihar oil etc are some of the products
advertised via television. Regional TV channels have become very popular especially in Southern
states. Examples: SUN TV is very popular even in rural areas in Tamil Nadu and Asianet is a
preferred regional channel in Kerala. Many consumer goods companies and fertilizer companies are
using these TV channels to reach the rural customer.
  Radio:
Radio reaches large population in rural areas at a relatively low cost. Example: Colgate, Jyoti Labs,
Zandu Balm, Zuari industries are some of the companies using radio communication programme.
There are specific programmes for farmers like Farm and Home/Krishi Darshan in regional
languages. The farmers have a habit of listening to regional news/agricultural news in the morning
and the late evening. The advertisement has to be released during this time to get maximum
coverage in rural areas. Another advantage is that the radio commercial can be prepared at short
notice to meet the changing needs of the rural folk. Example: Release of a pesticide ad at the time of
outbreak of a pest or disease in crops.

 Cinema:
About 65% of the earnings from cinema are from rural markets. Film viewing habits is high in
certain states like Tamil Nadu, Karnataka and Andhra Pradesh. Village theatres do roaring business
during festivals by having four shows per day. The monthly charge for showing an ad film is within
Rs.500. Local distributor or dealer who has good contacts with cinema houses in villages can easily
monitor this activity. Examples: Films on products like Vicks, Lifebuoy and SPIC fertilizers are
shown in rural cinema halls. Apart from films, Ad slides can also be screened in village theatres.

 Outdoor advertisements:
This form of media, which includes signboards, wall painting, hoarding, tree boards, bus boards,
dealer boards, product display boards etc, is cost effective in rural areas. Symbols, pictures and
colours should be used in POPs meant for rural markets so that they can easily identify the products.
Generally rural people prefer bright colours and the marketer should
Utilize such cues.

 Point of purchase:
Display of hangings, festoons and product packs in the shops will catch the attention of prospective
buyers. However a clutter of such POP materials of competing companies will not have the desired
effect and is to be avoided.

 Direct mail advertising:

It is a way of passing on information relating to goods or services for sale, directly to potential
customers through the medium of post. It is a medium employed by the advertiser to bring in a
personal touch. In cities lot of junk mail is received by all of us and very often such mails are thrown
into the dustbin whereas a villager get very few letters and he is receptive to such mailers.

 Wall paintings:
It is an effective and economical medium for communication in rural areas, since it stays there for a
long time depending upon the weather conditions. The cost of painting one square foot area is just
Rs.10. Retailers welcome painting of their shops so that the shop will look better. Walls of farm
houses, shops and schools are ideal places for painting and the company need not have to pay any
rent for the same. The walls have to be painted at least one or two feet from ground level. It is better
to take permission of the owner. Very often the owner takes responsibility for taking care of the wall
painting. Painting to be avoided during election time and rainy season. The matter should be in the
form of pictures, slogans for catching the attention of people. Companies marketing TV, fans,
branded coffee/tea, toothpaste, pesticides, fertilizers etc. use wall painting as promotion medium in
rural areas.

 Tree boards:
These are painted boards of about two square feet in dimension having the picture or name or slogan
of the product painted on it. The cost of such a painted board is about Rs.80. These boards are fixed
to the trees on both sides of the village road at a height of about 10 feet from ground level. These
boards attract the attention of slow moving vehicles like cycles, bullock carts and tractors and people
walking on the road. Considering the poor condition of roads, even the buses move at slow speed
through village road. Fertilizer and pesticide companies in rural areas extensively use tree boards.
These are low priced promotion items and can be used by consumer goods companies too.

Budgeting
Electronic Media

Cost of TV Ad

Prime Time: 6-11pm

Channels: Top e.g., Geo, AAJ, PTV
Cost in Prime Time: Rs. 70,000/min
Cost in Off-peak time: Rs. 25,000-30,000/min

Cost of Billboard

Size: 2700 Sq. ft

Skin: Rs. 54,000
Rent for 1 month in Cat-A1 area: 600,000-1,000,000

Cost of Hanging Hoardings

Size: 5ft x 2 ft
Cost: Rs. 150/hoarding
Rent in Cat-A1: 1,350/week

Cost of Poster

Paper weight: 135 gram

Size: 18inch x 23inch
Quantity: 3000 @ Rs. 4.15/poster

Bibliography

• http://www.oppapers.com/essays/Fmcg-Sector-
India/176985

• http://insightory.com/view/175/rural_marketing_in_ind
ia

• http://www.oppapers.com/essays/Conterfrid-
Brands/188985