“PRACTICES AND PROBLEMS OF RURAL MARKETING

IN RESPECT OF FMCG IN UTTARAKHAND”

Thesis submitted to Kumaun University, Nainital (India) in partial

fulfillment of the requirements for award of the degree of

DOCTOR OF PHILOSOPHY
(Ph.D.)
IN
MANAGEMENT

BY

Rizwana Ansari

Supervisor Co-Supervisor

Professor R. C. Mishra Dr. Amit Joshi

Director, Associate Professor,
School of Management Studies Department of
& Commerce Management Studies
Uttarakhand Open University, Kumaun University Campus,
Haldwani, Uttarakhand Bhimtal, Uttarakhand

2014
i
 DECLARATION

I hereby declare that this research work entitled, “Practices and Problems of Rural
Marketing in Respect of FMCG in Uttarakhand”, submitted to the Kumaun University,
Nainital in partial fulfillment of the requirements for award of the degree of Doctor of
Philosophy (Ph.D) in Management is my original work. In this thesis I have incorporated
a lot of publications and works of other researchers/authors and my indebtedness has
been duly acknowledged at the relevant places. Further, this thesis partly/fully has not
been submitted to any other University/Institute for any Degree/Diploma or Certificate.

Date: (Rizwana Ansari)

ii
 ACKNOWLEDGEMENT

My first and foremost devotion is to “The Almighty God” for His graceful blessings at
each and every step of this research work. Without His blessings the accomplishment of
this research work was not possible. Further, I take it to be my privilege to get this
opportunity to express my indebted-ness and thanks to all those who persuaded me to
accomplish this assignment with the best of intensions.

I express my sincere and deep regards for my learned supervisor, Professor R. C. Mishra,
Director, School of Management Studies & Commerce, Uttarakhand Open University,
Haldwani, who has always been kind enough to guide me in each and every aspect of
this research work. He imparted me with all the understanding and advised whenever it
was required during the course of this work. The care and affection, Professor R. C.
Mishra has given in his guidance, is beyond expression and he provided me all his time,
support, guidance, inspiration, and continuous encouragement through-out the
completion of this research. It is beyond my capability to put it all in words.

I am indebted to my Co-supervisor, Dr. Amit Joshi, Associate Professor, Department of

Management Studies, Kumaun University Campus, Bhimtal, Nainital, for providing
constant help and suggestions to complete this research work. His valuable inputs and
critical views proved to be very useful for this work.

It gives me extreme contentment to express my sincere and deep sense of gratitude to

Professor P. C. Kavidayal, Head, Department of Management Studies, University
Campus, Bhimtal, Kumaun University Nainital, for all his support, guidance, inspiration
and affection during the course of this research.

I express my deep regards to officials and to other members of the Research Section of
Kumaun University, Nainital, for providing all flexibilities to come out of the procedural
constraints of this work. The submission of this thesis owes to their support, without
which, it was almost impossible to complete it with in the specified time-limit.

I am very much thankful to Faculty Members and all the staff of the Department of
Management Studies, for providing me all the support and motivation in completing this
research work. I extend my gratitude to all staff/supporting staff of Central Library,
Kumaun University, Nainital, Departmental Library, Department of Management
Studies, Bhimtal, and Library, Uttarakhand Open University, Haldwani for constant help
in this work.
iii
I present my special thanks to Dr. Manjari Agarwal, Assistant Professor, Management
Studies, UOU, Haldwani for her extensive support and efforts in various components of
Data Analysis. I also wish to express all my thanks to Dr Gagan Singh, Dr. R. R. Singh
(VMOU, Kota), Dr. Praveen Kumar Tiwari and Ms Priya Mahajan, (All except Dr. R. R.
Singh, from Uttarakhand Open University, Haldwani) for their constant help as and
when required.

This research work is the result of a lot of contribution and support from people working
in different areas and it is my sincere duty to acknowledge. I owe my special thanks to
Mr. Nafeel Jameel, Economic and Statistical Department, Vikas Bhawan, Bhimal, Distt
Nainital, for providing all the data and support to me. He helped me in getting all the
necessary information for my work from all over the state. I am extremely thankful to
Mr. Arun Sharma, Computer Programmer, Moradabad, Mr. S K Gagneja, Manager,
Syndicate Bank, Regional Office, Faridabad, Mr. B.S. Jangpangi, Sr. Manager,
Syndicate Bank, Haldwani; all my senior colleagues, for providing constant
accommodation, help and support to me through all the stages of this research work and
motivating me for its successful completion.

I am extremely thankful to all the people who gave their valuable time, suggestions, and
advice in my efforts and initiatives for the purpose. I also have a deep sense of gratitude
to all the Government Departments, Private Institutions, Officials of Mandi Samiti, local
Industries, Offices, and people who provided me all the relevant information as and
when it was needed, and I offer my sincere thanks to all the respondents, because,
without their sincere help and responses, the study of this nature could not have been
possible.

The researcher, with all her humility, gratefully acknowledges the work done by the
scholars, prior to this work, from India and abroad, whose research has contributed at
each and every stage of this attempt. Their contribution is individually and collectively
acknowledged with gratitude.

I would like to express my deepest gratitude to my parents and friends for supporting me
through each stage of this research work. They helped, encouraged and cajoled to the
best of their capacity. And at last, I would like to dedicate the success of this research to
God, who always shown the right path even in the darkest of moments.

Rizwana Ansari

iv
 PREFACE

India lives in villages. Rural market constitutes an important segment of overall

economy. More than 70% of the population of this country lives in villages earning their
livelihood from agriculture and allied activities. In the last decade or so, there has been a
drastic change in the rural life, its economy, sociology and even the culture. Education,
awareness, connectivity, living conditions, incomes, and buying-patterns have changed.
Even the industries have moved out to the rural side and the dependence of rural people
on agriculture and allied activities has reduced. Certain new sources of income have been
added. However, agriculture and allied activities still dominate.

With, increased awareness, connectivity, and increased incomes, Indian rural sector is
considered to be the biggest untapped market, hence the unparalleled opportunity.
Corporates and MNCs from across the globe are exceptionally greedy to snatch away
this opportunity. As a result, everything rural has become a subject of keen interest for
the business community, the pro-business NGOs, academicians, and research groups.
Everybody is very eager to jump into this life-time opportunity. This is how, a large
number of NGOs, research groups and academicians, coupled with the corporates have a
renewed interest in the rural market. There are ‘n’-number of studies, estimates and data
available. All this speaks in one voice, with a little deviation of figures and the voice is,
“it is the life-time opportunity, just go rural.” Those who have already entered the rural
market, they have reaped the huge benefits. The rural consumers usually make purchases
against ‘down-cash’ which is a boon to the cash-flows of the industries. In some
prosperous states like Gujarat, Punjab, Haryana, or in the southern states rural consumer
carries the items of daily use and durables in the trolley attached to a tractor, while
returning from the market, having sold the agricultural produce. The corporates operating
in India could not have even dreamt of such a consumer. They are in the state of awe,
surprise, and just mad to exploit this virtuous hen, laying golden eggs.

Accordingly, rural marketing is the buzz-word. There is a beeline of corporates to enter

the rural market. In the last ten years, heavy funding by the Government of India, on its
own through various rural-centric schemes (Bharat Nirman, MNREGA etc), as well as
through state government, and the banking-sector has added to physical connectivity,
tele-connectivity, incomes, purchase-capacity, and awareness. The estimates indicate that
only the FMCG market has the size of about Rs. 70,000 crores, with about 700 millions
consumers constituting about 74% of total population. The expenditure pattern of rural
consumers is changing very fast. The items and the categories of expenditure unheard of

v
earlier dominate their budget, say mobiles, dish-connections, petrol for two and four-
wheelers, including maintenance thereof, health-care, education, housing, and even the
other consumer durables as well as the FMCG. Thus, consumer durables and FMCG
both are very important for the marketers.

To a researcher, FMCG offers a good scope because of many obvious reasons; huge size
of the market, vast range of items, repeat purchases (leading to fast diagnosis of
purchase-behavior), and dominance of these items across the market. Further, rural
market of all the states is not similar. Actually, it has glaring dissimilarities and many
dimensions as well as the areas are still unexplored. Naturally, therefore, it offers a good
opportunity for the researchers working for their doctoral degrees or similar research
efforts.

There exists one more phenomenon which has been not explored till now, i.e., the impact
of rural marketing on the indigenous support-system, as well as its contribution to
fuelling the flames of un-bridled consumerism, which is turning the producers into pure
consumers.

The two reasons mentioned in the proceeding paragraph lead to this research work. It
explores rural marketing of FMCG in hitherto unexplored (in this particular respect)
state of Uttarakhand. Further, in its limited manner, this research attempts to study the
impact of rural marketing on consumerism and the indigenous support-system of the
rural areas.

The study is empirical in nature, based on the analysis of primary data generated through
questionnaire-schedules, prepared for the two sets of respondents, viz, the rural-
consumers and the rural-retailers. The universe is confined to the 4 districts of
Uttarakhand (two from Garhwal, and two from Kumaun) covering 300 respondents
(rural consumers only) selecting 75 from each of the four blocks. Additionally 100 rural-
retailers from the four districts were identified in the second set of respondents. The
method of sampling is different for different sets of respondents, say, for rural consumers
stratified random sampling has been followed but for rural retailers quota sampling has
been resorted to. The tools of analysis applied are three-fold, viz., percentage/cumulative
percentage; factor analysis; and cross-tabs. SPSS package 17 was used to analyze the
data.

Secondary data for the study was collected from various sources say, the offices of the
Mandi, District Offices, Block Offices, Economic-Census and the Department of
Statistics, in addition to libraries, books, journals, reports, and the internet.

vi
The study is divided into seven chapters reasonably attempting to cover all the related
aspects of the study. The first chapter introduces the topic, and the dissertation, in terms
of its organization and the theme. In the second chapter, the Concept of Rural Marketing
and the FMCG has been discussed at length, especially, with regard to the latest trends in
rural marketing. In this chapter, an attempt has also been made to clearly demarcate the
contemporary connotation of rural marketing, as against, agricultural marketing. In the
third chapter the theme of the study has been explored with regard to the universe of the
study, i.e., the state of Uttarakhand. In this process a brief introduction of the state from
various angles has been given. Similarly, the phenomenon of rural marketing in
Uttarakhand has also been studied.

Extensive Review of Literature has been carried out in the fourth chapter. This review
provided the cues which eventually were identified as the objectives of this research. It is
evident from the Review of Literature that the marketing-mix dimensions, including the
logistics of rural marketing are the key-themes. Further, it established that no work of
this nature has been attempted to focus on the impact of rural marketing on indigenous
support-system and consumerism. Accordingly, the objectives and the hypotheses, as
presented in the fifth chapter on Research Methodology, were framed. These objectives
emanated from the Review of Literature only. Further, the Research Methodology, in
terms of the universe, the sample, assumptions, tools and the methodology of analysis
has been detailed in this chapter. The Research Methodology is standard, scientific, un-
biased and replicable by the other researchers.

It is followed by the sixth chapter titled, Analysis and Interpretation. The analysis is
divided into three sections and both the sets of responses have been duly incorporated in
the process. The first part presents the percentage/cumulative percentage based analysis
and interpretation; the second part portrays the factor analysis and the third and the last
section presents the cross-tabs analysis, wherein the hypotheses have been tested with
logical interpretation thereof.

The seventh chapter presents the Conclusions, Findings and research based Suggestions.
The questionnaire-schedules used for this research is appended with this dissertation at
the end.

Rizwana Ansari

vii
 CONTENTS

Chapter Particulars Page No.

Certificate from the Supervisor i

Declaration ii

Acknowledgement iii-iv

Preface v-vii

Content viii-ix

List of Tables x-xiii

List of Figures xiv-xv

Chapter- 1 : INTRODUCTION 1-17

1.1 Evolution of Rural Marketing 1

1.2 Rationale of Selection of the Universe 10

1.3 Significance of the Study 12

1.4 Chapter Planning 15

Chapter- 2 : CONCEPTUAL FRAMEWORK OF

RURAL MARKETING 19-68

2.1 Overview of Rural Marketing 19

2.2 Distinction Between the Urban and the Rural Market 31

2.3 The Fast Moving Consumers Goods (FMCG) 39

2.4 Rural FMCG Market of India- Overview 47

2.5 Problem Areas in Rural Marketing 60

Chapter- 3 : PROFILE OF THE UNIVERSE 69-101

3.1 Profile of Uttarakhand 70

3.2 Economic Profile of Uttarakhand 79

3.3 Structure of Rural Marketing in Uttarakhand 91

viii
Chapter- 4 : REVIEW OF LITERATURE 103-150

Chapter- 5 : RESEARCH METHODOLOGY 151-164

5.1 Objectives of the Study 151

5.2 Major Hypotheses and Assumptions 152

5.3 Selection of the Universe 154

5.4 Sampling Method and Sample Size 156

5.5 Operational Definitions 159

5.6 Method of Data Collection, Tools and Techniques 161

5.7 Data Analysis 162

5.8 Limitations of the Study 163

Chapter- 6 : ANALYSIS AND INTERPRETATION 165-236

6.1 Percentage and Cumulative Percentage Based Analysis 165

6.2 Factor Analysis 196

6.3 Cross-Tab Analysis 204

Chapter- 7 : CONCLUSION AND SUGGESTIONS 237-254

BIBLIOGRAPHY 255-266

ANNEXURES

ix
 LIST OF TABLE

Table No. Title Page No.

1.1 Evolution of Rural Marketing 2

1.2 Comparative Sizes of Rural and Urban Markets 7
1.3 Criteria for Rural-Urban Differentiation 8

2.1 Estimated Annual size of Rural Market 23

2.2 Budget Allocation on Rural Developments in Last Five Years 24
2.3 Tele-Density: 2012-13 (Telecom Subscriptions as on 31 Jan, 2013) 25
2.4 Increase in Literacy Rate- 1951 to 2011 26
2.5 Crude Literacy Rate In India by Sex- 1951 to 2011 28
2.6 Expenditure on Government Sponsored schemes
(Budget Estimated and achieved 2009- 10 to 2013-2014)
2.7 Emerging Categories In Rural Market 36
2.8 Growth In FMCG Market (India) 40
2.9. Household Penetration of Different Companies (India) 51
2.10 Percentage Volume of Local Brands 52
2.11 Segment Wise Penetration of Brands Categorically 52

3.1 Uttarakhand: Summary of Socio-Economic Indicator 70

3.2 Altitude Zones of the State 72
3.3 Land Use Pattern in Uttarakhand 74
3.4 Soil Type Distribution of Uttarakhand 77
3.5 State Domestic Product 81
3.6 Land and Agriculture in Uttarakhand 82
3.7 Operational Holdings in Uttarakhand 83
3.8 Area Used in Principal Crops (Uttarakhand) 83
3.9 Fertilizers Consumption 84
3.10 Irrigation in Uttarakhand 84
3.11 Horticulture in Uttarakhand 85
3.12 Live Stock and Poultry in Uttarakhand 86-87
3.13 Forest and Wildlife 88

x
3.14 Transport and Communication 89
3.15 Tourism 90
3.16 Rural and Small Scale Industries 91
3.17 Factories: Registered and Un-registered 91
3.18 District Wise Literacy Rate and Population in Uttarakhand 92
3.19 Structure of Krishi Utpadan Mandi Samiti in Uttarakhand 98

5.1 Districts and Blocks Division of Uttarakhand. 155

5.2 Selection of Villages: Sampling Method 156
5.3 Sample Selection in Dehradun 157
5.4 Sample Selection in Udham Singh Nagar 158
5.5 Sample Selection in Uttarkashi 158
5.6 Sample Selection in Nainital 159

6.1 Location of the Respondents 166

6.2 Number of the Respondents 166
6.3 Gender of the Respondents 167
6.4 Age of the Respondents 167
6.5 Annual Income of the Respondents 168
6.6 Source of Income 169
6.7 Quality Association 171
6.8 Choice of Soaps 172
6.9 Choice of Toothpastes 172
6.10 Choice of Detergents 172
6.11 Choice of Biscuits 173
6.12 Choice of Beauty Care 173
6.13 Choice of Hair Care 173
6.14 Choice of Beverages 173
6.15 Choice of Hygiene & Personal Care 173
6.16 Summary of Choice for Branded Vs. Unbranded 175
6.17 MNC Vs. Unbranded 176
6.18 Frequency of Purchase 178
6.19 Rural Life Vs. Modern FMCG 180
6.20 FMCG Vs. Budget of Rural Households 180
6.21 Rural Happiness Vs. Modern FMCG 180
xi
6.22 Impact of Modern Marketing 180
6.23 Effectiveness of TV, Radio & Internet 182
6.24 Effectiveness of Print Material, Hoardings & Banners 183
6.25 Effectiveness Point of Purchase Display 184
6.26 Effectiveness Dealers/Retailers’ Recommendations 185
6.27 Effectiveness of Word of Mouth Publicity and References 186
6.28 Purchase Decision Making Factor 189
6.29 Profile of Rural Retailers 192
6.30 Similarity in Buying Behavior of Rural Households 193
6.31 Consumers Preference to Cheaper Goods to Quality 194
6.32 Expectation of Variety of Products 194
6.33 Frequent Purchases of Consumers 195
6.34 Brand Preference 195
6.35 Supply of Goods: Timely Delivery of Products 196
6.36 Factor Analysis: Correlation Matrix 198
6.37 KMO-Barllett’s Test (Factor Analysis) 199
6.38 Total Variance Explained 199
6.39 Component matrix 200
6.40 Rotated Component Matrix 201
6.41 Component Transformation Matrix 201
6.42 Factor-Interpretation (Factor/Variables Interpretation) 203
6.43 Cross-Tab: Consumers’ Quality Association 205
6.44 Cross-Tab: Customized / Differential Products Preference 206
6.45 Cross-Tab: Price in Purchase Decision 208
6.46 Cross-Tab: Price Sensitiveness of Consumers 209
6.47 Cross-Tab: Preference to Cheaper Products 210
6.48 Cross-Tab: Satisfaction with Availability 211
6.49 Cross-Tab: Availability of Preferred Brands 212
6.50 Cross-Tab: Distribution Problem 214
6.51 Cross-Tab: Impact of Promotion 215
6.52 Cross-Tab: Effectiveness of T.V., Radio & Internet 216
6.53 Cross-Tab: Consumer’s Awareness 217
6.54 Summary Testing of Hypothesis-1 218
6.55 Cross-Tab: Product Differentiation 220
xii
6.56 Cross-Tab: Rural Buying Habit 221
6.57 Cross-Tab: Consumers Awareness for Brands and Products 222
6.58 Cross-Tab: Availability of Preferred Brands 223
6.59 Summary Testing of Hypothesis-2 224
6.60 Cross-Tab: Level of Happiness & Modern Marketing 225
6.61 Cross-Tab: Modern Marketing and Village Traditions 227
6.62 Cross-Tab: FMCG Consumption on Rural Budget 228
6.63 Cross-Tab: Dependence on Modern Day Products 229
6.64 Summary Testing of Hypothesis-3 230
6.65 Cross-Tab: Essentiality of FMCG Products for Rural Consumers 231
6.66 Cross-Tab: Popularity of Brands 233
6.67 Cross-Tab: Impact of Modern FMCG on Local Products 234
6.68 Cross-Tab: Growth of FMCG 235
6.69 Summary Testing of Hypothesis-4 236
6.70 Summary Testing of All Major Hypotheses 236

xiii
 LIST OF FIGURES AND DIAGRAMS

Figure No. Title Page No.

1. Growth in FMCG Market (India) 41

2. FMCG Market Segments 41
3. Map of Uttarakhand (All Districts) 69
4. Land Use Pattern in Uttarakhand 74
5. The Physiographic Zones of Uttarakhand Himalayas 76
6. Marketing of FMCG in Uttarakhand 94
(MNCs & Large Corporates)
7. Marketing of FMCG in Uttarakhand 95
(Local Producers to Rural Markets)
8. Marketing of FMCG in Uttarakhand (Rural To Urban) 96
9. Marketing of FMCG in Uttarakhand (Rural To Rural) 96
10. Movement of Agricultural Produce 99
11. Profile of Consumers Respondents-Gender 167
12. Profile of Consumers Respondents-Age 168
13. Profile of Consumers Respondents-Annual Income 169
14. Profile of Consumers Respondents-Source of Income 170
15. Quality Association 171
16. Choice of Branded Vs. Unbranded (Numbers) 174
17. Choice of Branded Vs. Unbranded (Percentage) 174
18. Summary of Choice for Branded Vs. Unbranded 175
19. Choice of MNC Vs. Indian Brands 176
20. Purchase Frequency of Rural Consumers (Numbers) 178
21. Purchase Frequency of Rural Consumers (Percentage) 178
22. Effectiveness of TV, Radio and Internet 182
23. Effectiveness of Print Material, Hoardings & Banners 184
24. Effectiveness of Point of Purchase Display 185
25. Effectiveness of Recommendations of Dealers & Retailers 186
26. Effectiveness of Word of Mouth Publicity & References 187
27. Factors-Purchase Decision 190
28. Scree Plot-Factor Analysis 200

xiv
29. Quality Association of Consumers 206
30. Choice for Customized Products 207
31. Primary Focus-Purchase Decision 208
32. Consumer’s Price-Sensitiveness 209
33. Preference to Cheaper Products 211
34. Satisfaction with Availability (FMCG) 212
35. Satisfaction with Availability (Brands) 213
36. Problem of Distribution Network 214
37. Effectiveness of Promotion 216
38. Effectiveness of TV, Radio and Internet 217
39. Consumers’ Awareness 218
40. Different Requirement of Rural Market 220
41. Buying Behaviour of Rural Consumers 221
42. Awareness about Products & Brands-Consumers 222
43. Availability of Preferred Brands in Villages 224
44. Increase in Level of Happiness 226
45. Modern Marketing Vs. Traditional Villages 227
46. Impact of FMCG on Rural Budget 228
47. Dependence on Modern Marketing 230
48. Essentiality of FMCG for Rural Consumers 232
49. Preference for Branded Products 233
50. Modern FMCG Vs. Local Products 234
51. Growth of FMCG Market. 235

xv
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“It is only when the cities realize the duty of making an adequate return to the
villages for the strength and sustenance which they derive from them, instead of
selfishly exploiting them that a healthy and moral relationship between the two
will spring up.”
-Mahatma Gandhi

Chapter- 1
INTRODUCTION
 INTRODUCTION

"The future of India lies in its villages"

-Mahatma Gandhi

Rural Marketing, over the period of time, has got established a very important area of
studies for the students of business. In fact, it is an addition to the existing branches of
study in marketing. Accordingly, a lot of researches, studies, and surveys have been
carried out to understand this phenomenon. However, it is still evolving and finding
its dimensions. Similarly, it has different features in different states of the country,
like rural marketing in Punjab, Haryana or Gujarat is not similar to marketing in U.P.,
Bihar, Uttarakhand or Himanchal Pradesh. Studies have proved that in view of these
variations, different strategies are being adopted by marketers in different states.
Similarly, rural marketing of FMCG in Uttarakhand is different. It is still a new area
of studies and it has not been seriously studied or researched till now. So it offers
interesting opportunities to researchers.

1.1 EVOLUTION OF RURAL MARKETING

The review of extensive literature carried out for this study (presented later)
establishes this fact. This study is new from many angles, i.e., it tries to discover the
new knowledge about rural marketing of FMCG in Uttarakhand; it explores the
processes of rural marketing, attitudes of rural consumers and marketers.
Simultaneously, this study is an attempt to know the real truth of the story of
marketing in rural areas of Uttarakhand. It, therefore, explores the myths that rural
marketing is totally distinct from the urban marketing. It is not the complete truth, as
proved by this study. Uttarakhand is a state peculiar in many respects; say the
topography, which makes the movements of goods difficult, adds to inaccessibility
and the difficulties related to logistics. The literacy percentage in Uttarakhand is
higher, male-female ratio is slightly better, and even the rural areas are accepting the
urban life-styles very fast. In this study, therefore, there are many new angles and
aspects which have been explored. Additionally, this state comprises two types of
areas, i.e., hilly terrain and plains. The samples have been drawn from both the areas
to find out the elements of commonality and difference. From all these angles this

1
study makes a sincere attempt to discover the new knowledge and study the newer
dimensions in an area, hitherto unexplored.

Rural marketing, as one knows, has evolved over the period of time. Initially it was
the agricultural marketing, i.e., the marketing of agricultural produce, extended to
marketing of agricultural inputs, and finally it has evolved into a full-fledged and
distinct area of rural marketing. These phases of evolution can be described with the
help of a tabular presentation as below:

Table: 1.1
Evolution of Rural Marketing

Major Source Destination

Phase Origin Function
Products Market Market
I Before Mid-1960 (from Agricultural Agricultural Rural Urban
independence Marketing Produce
to green revolution)
II Mid- Sixties (Green Marketing of Agricultural Urban Rural
revolution to Pre- Agricultural Inputs
liberalization period) Inputs
III Mid- Nineties (Post- Rural Consumables Urban Rural
liberalization period on Marketing and Durables For and
20th century) Consumption Rural
and Production

Source: T.P Gopalswami, Rural Marketing, Environment, Problems and Strategies.

These three phases as shown in Table-1 may further be extended by one more phase,
i.e., the latest trends or the developments which took place in the 21st Century. A brief
description of these phases is given below:

1960s/Phase-I (1947 to 1960):1

This time-span refers to the earliest period of pre-take-of stage. India, after getting
independence, had reorganized its political, economic, and educational institutions
and the visible impact of these initiatives couldn’t be found in the initial years.
However, the food-crisis lead the government lay the maximum emphasis on

1
Kashyap Pradeep, Raut Siddhartha, ‘Rural Marketing’ (Text and Practice), 2008, Dream-tech Press,
New Delhi pp. 10-11

2
agriculture, including agricultural education, scientific efforts, innovations, irrigation
facilities, (Dams and Canals), and some innovations in seeds as well as in the area of
manures and pesticides. The cumulative impact of all these efforts could be seen by
nineteen sixties, which is known as the beginning of green revolution. In this phase
marketing of agricultural produce had to be carried out and the systems required for
the purpose were created by the government as well as by the market. During this
phase, very little was known about rural India. The maximum planning was based on
the perception and the raw data available with the planners. Even a concept like
agricultural marketing was not fully developed, but it had started gaining ground.
During this period the agricultural marketing comprised;
i) Sale of Agricultural inputs in rural areas.
ii) Marketing of Agricultural produce.
iii) Selling a few specific products of the urban areas into the rural areas, thorough
nearby or local retailers.

During this period the agriculture was neither mechanized nor the High Yielding
Verities (HYV) existed, nor were the irrigation facilities up to the mark. Further,
manures, pesticides and other treatments were restricted to traditional knowledge and
the crops were largely depended on the monsoon. Similarly, the market was also in its
primitive stage, and actually the organized agricultural marketing, though existed, yet
it was in its initial phase. The co-operative movement had been initiated but the
government had started showing results. However, too much of political and
beaurocratic interventions in co-operatives largely controlled it. Efforts made by the
government in developing agriculture through co-operatives lead to the present status
of this movement. Therefore, whenever one discusses the first phase of agricultural
marketing, the mention of co-operatives cannot be avoided.

It is, thus, evident from the cursory review of this phase that these were the initial
glimpses of agricultural marketing of the second phase and the rural marketing of the
modern time.

Phase-II (1960s to 1990s):

This was actually the take-of stage, particularly in the sense that green revolution had
increased the agricultural production and country’s dependence on others gradually
reduced. The Green Revolution was followed by the White Revolution (Began from
3
Gujarat) and the Yellow Revolution. These two later revolutions gave further
confidence and almost at the same time our production of pulses increased and
commercial processing of sugarcane was also increased in the from of establishment
of many large sugar mills. The main features of agriculture of this period were;
(i) Mechanization in agriculture increased.
(ii) New Verities of seeds, new and advanced practices of agricultural production
developed.
(iii) Irrigation improved.
(iv) External companies manufacturing pesticides etc. entered the market.
Similarly, important changes took place in the field of agricultural marketing. It
started getting organized and it penetrated into the approachable periphery of rural
areas with the newer strategies and approaches. Many new corporate groups entered
into the rural sector for both the purpose, i.e., providing agricultural inputs and buying
the outputs. During this period, the co-operative movements expanded it’s reached
and network, but its loopholes also started surfacing. Another one say Khadi and
Villages Industries Commission (KVIC) was also successful in creating some impact
in increasing the rural incomes. Similarly, the bank credit also started creeping in.

During this phase, marketing got organized and one could often hear this term. Even
in the field of academic researches many Ph. D. desecrations were attempted on
agricultural marketing. So a lot of literature and data started coming in, which opened
the new horizons of knowledge about the rural people, agriculture and, marketing in
these areas.

Phase-III / 1990s to 2000, (Early period of Economic Reforms after the serious
economic downturn):
During this period India decided to deviate from the policies of Nehruvian Era and it
was rather revolutionary to move forward with ‘Liberalization’, ‘Privatization’ and
‘Globalization’ (LPG). Many thinkers believed that perhaps this was the only way
out. The economic growth during this period started rising, and later it reached the
magical figures of about 9%. One can not term this period as post-reforms period
because reforms are continuing even in 2014 and perhaps these may continue even in
future so the pre-reform stage is there, but there can be no post-reforms stage.

4
During this phase marketing in urban areas had properly developed but the modern
retail formats did not exist. Many experiments were being carried out in the rural
areas by the government, the independent agencies, corporates and the NGOs etc.
These days only, the rest of the world had started realizing the volume and value of
the Indian Rural Market. It was seen, though, in the initial stage of estimations, as
very huge market, still untapped.

Marketing in the rural areas during this period changed and it included;
1. Agricultural inputs
2. Agricultural outputs
3. FMCG
4. Consumer Durables
5. Medicines etc.

Thus, Indian companies had started entering into the rural market, but it was not the
rural marketing of the contemporary connotations. Later, the growth rate declined and
the economy started adjusting with the global waves of change. The pressure on crude
oil supply continued to mount and the international developments in the field of the
‘Politics of Agriculture’ continued to adversely impact the Indian economy as well as
Indian agriculture. Later, after 2000 or in the 21st century this international politics of
agriculture became so apparent that all the developing countries raised their combined
voice against this discrimination being practiced by the developed world in the name
of subsidies etc.

Thus, the beginning of rural marketing can be traced back to this period between
1990s and 2000.

Phase IV (2000 onwards):

By this time the rural marketing got established and the focus of the marketers had
shifted from satisfying the needs of the customer to creating newer wants and to
providing quality products to them at affordable prices. The marketers got established
in the rural market and by now evens the other players, watching form the distance
also decided to plunge into the rural market. The issues of logistics related to rural
marketing gained importance and the newer strategies are being devised everyday to
find solutions to the issues related to the logistics. The revolution in terms of

5
telecommunications did actually take place during this period and it metamorphosed
the rural marketing as well. It had a big impact in different ways, say as a new
promotional avenue, or as a new media for creation of wants. Interaction with the
urban life also increased and this added to varying demands from the rural areas. The
whole of the world had realized the potential of the rural market and authors like C.K.
Prahlad made it even more popular. The government also realized the importance of
rural India and the newer avenues of livelihood were generated in these areas as a
result of heavy spending by the government and the corporate world. 2

Thus, on the basis of this division in four time –spans, one may easily understand the
evolution of rural marketing in India. There are many other experiments which were
the important landmarks in this process and some of these can be very briefly
mentioned at this stage itself, say,
(i) HUL’s Operation Shakti
(ii) e-Chaupals of ITC.
(iii) National Chain Stores
(iv) Kisan Mandis
(v) Rural Retail Formats
(vi) Hariyali/Khushhali Stores

The above are just a few renowned experiments but actually many such experiments
are on to tap the rural market. There is a fierce competition amongst corporates to tap
the rural markets.

Facts About the Indian Rural Market

The following facts are gathered from the analysis done by the National Council for
Applied Economic Research (NCAER)
1. Rural India constitutes 70% of India’s total population.
2. It accounts for 56% of national income.
3. It contributes to 1/3rd of India’s total savings
4. It accounts for 64% of total expenditure.
5. Rural economy is estimated to reach a size of Rs. 18 trillion by 2012-2013 as
against Rs 12 trillion in 2007-2008.

2
www.icmrindian.org

6
6. Rural consumer’s share of total ownership of low cost items like bicycles,
pressure cookers and watches during 1995-96 was 60%.
7. The share of rural India in the FMCG market is around 53% and it is expected to
reach to 60% in future.

Table: 1.2
Comparative Sizes of Rural and Urban Markets

PARTICULARS URBAN RURAL

Population 2001-2002 (million households) 53 135
Population 2011-2012 (million households) 69 153
% of all India Population 28 72
Market (Number of town/villages) 3768 638000

Source: Indian Streams Research Journal, Vol - Ii, Issue - Ii [March 2012], Article: ‘A Study Of Consumer Goods Marketing To
Indian Rural Consumers’, Author: Dr.R.L.Laddha And Mr.Rupesh.S.Shah, Issn No: 2230-7850 Rni: Mahmul/2011/38595

Attractions for Going Rural:

There are many reasons which force the marketers to make a bee-line for rural areas,
but the following may be referred to as the most important factors;
1. Vast untapped potential.
2. Increasing rural incomes.
3. Increased literacy.
4. Increased awareness.
5. Better infrastructure etc.

All these factors coupled with some more important motivators have been discussed,
later, but it is sufficient to indicate that there exist very strong drivers/motivators for
going rural. The next important issue is to define the rural market as distinct from the
urban market.3

Rural India vs. Urban India

There are many areas of distinctions which obviously exist, but usually the rural
market is distinguished from the urban on the basis of occupation of the people,
density of population and environment. Gopalswami (2007) in his book has presented

3
Rajgopal, ‘Understanding Rural Market’, Daya Publsihing House, New Delhi

7
the criterion for rural-urban differentiation in a tabular form which is being
reproduced below:
Table: 1.3
Criteria for Rural-Urban Differentiation

Criteria Rural World Urban World

Occupation Majority of people engaged in Totality of people engaged in
agriculture and agriculture related manufacturing, mechanical
activities. pursuits, trade, commerce,
professions, governing and other
non-agricultural occupations.
Environment Direct relationship to nature. Greater isolation to nature.
Predominance of man-made
environment over nature.
Density of In the same country and at the same Greater density than in rural
Population period the density is lower than in communities. Urbanity and
urban community. Generally density density are positively correlated.
and rural world are negatively
correlated.
Heterogeneity Compared with urban population, More heterogeneous than rural
and homogeneity rural communities are more communities (in the same time).
of the population. homogeneous in racial and Urbanity and heterogeneity are
psychological traits (negative positively correlated.
correlation with Heterogeneity).
Mobility Normally the migration current Only in the periods of social
carries more individuals from the catastrophe is the migration
country side to the city. from the city to the country
greater than from the country to
the city.
System of Fewer contacts with outside world. Impersonal casual relations,
Interaction Simplicity in relations. Speaks superficial standardized
through the heart. formality of relations.

Source: Gopalswamy, T.P. (2007), ‘Rural Marketing-Environment, Problems, Strategies’.

The research reports by Earnst & Young indicate that rural India consumes about 60%
of the total national consumption and it amounts to a whopping Rs. 9135 lakh crores
($228 Billion). Similarly, a report by IANS (Indo- Asian News service) substantiate

8
that the consumption in rural India is much higher than that in the urban India and the
purchase capacity of the rural India is many times more than that of the urban India.
According to Ministry of Communications and IT, Tele-density is continuously
increasing in the rural areas and about 46% of the rich people having an income over
of Rs 5 lakh per anum live in the rural areas.

The list of items being purchased by the rural buyers is getting longer everyday and
now they are spending on housing, transport, education, medicines, and life-style
goods increasingly.

FMCG Sector:
The term FMCG (Fast Moving Consumer Goods) doesn’t have a standard and final
definition but usually it denotes the items of everyday use. Alternatively, it is also
referred to as CPG (Consumer Packaged Goods) or as CPG Industry. These items are
normally consumed at regular intervals. Thus, the range of FMCG is very large but
for the shake of de-limitation, this study is confined to eight groups of items, which
are as follows:
1. Soaps (Beauty and Bathing)

2. Biscuits and Confectionary

3. Tooth paste and Powder

4. Personal care products

5. Tea, Coffee and Beverages
6. Detergent and Cakes
7. Hair oil and Shampoo
8. Personal care and Hygiene products

It was assumed that the penetration of these items into the rural areas of Uttarakhand
may through some new light on the emerging trends, strategies and, policies related to
rural market.

The logic for selection of FMCG was again very simple, i.e., the durables have many
limitations and their purchase is also periodic, so it would be difficult to carry out a
study about the attitude of rural consumers towards consumer durables. On the other,
FMCG are purchased in a routine manner and it provides a good database for carrying
out a study of this nature.

9
1.2 RATIONALE OF SELECTION OF THE UNIVERSE:

The universe selected for the study is the state of Uttarakhand. Uttarakhand has a
different topographical landscape and as such it is rather different from the other
states, in view of its hilly terrain and different characteristics of rural life shaped by
the difficult conditions prevailing in the hills. It has some areas of Bhabar* and
Tarai* which have grown and socialized exactly on lines of the other neighboring
locations of Uttar Pradesh. However, the character of rural markets in the state is
different from that of its neighboring state of Uttar Pradesh, or the other states which
do not have the hilly terrains. In this region clusters of some houses at one place are
related to a few other such clusters in the vicinity and put together these are known as
a village. On the other, down below in the plains all the households are close to each
other in the entire periphery and such conglomerations are called the villages.
Similarly, contrary to the dense population of the plains, villages in the hills are
sparsely populated. The road connectivity and the communication network are also
not very good. The local markets have also not developed as the markets of the plains.
All the above may be summarized as follows;
(i) Sparsely populated villages.
(ii) Poor road connectivity
(iii) Poor Tele and internet connectivity
(iv) Primitive rural markets
(v) Agriculture dependent on rains
(vi) Higher rate of literacy
(vii) Natural calamities and disasters are common etc.

The above characteristics place Uttarakhand and its rural markets in a different
category and that rural marketing system of the plains may not exactly apply in this
region.

In the last decade there has been a remarkable change in most of the segments, say
road network, tele and internet network and urbanization of road-side villages.

Uttarakhand is a fast growing state with most of the growth taking place in industrial
and services sectors. Although more than half of the workers are engaged in
agriculture and allied sector, its share in GSDP was 36.90 per cent, while the share of

10
secondary and tertiary sectors was 29 and 44 per cent respectively. This fact has also
been noted by NCAER in their Draft Uttarakhand Development Report.

A second factor to be kept in mind is the existence of sharp regional disparities

amongst different areas of the State, especially the remote and interior hill-areas being
economically quite backward. Thus Nainital or Dehradun account for a very high
per-capita income, while the interior areas of Uttarkashi, Pithoragarh, Chamoli or
Bageshwar are very poor.

Keeping in view the demographics and regional disparities it is assumed that

penetration into the rural market is not up to the mark in the state. In some districts
rural marketing is established while some districts are neglected by the marketers.
Hence, it was decided to make the study more relevant to the prevailing status of rural
marketing in Uttarakhand and to explore the actual situation in the state four districts
were selected from the state. The basis for selecting two districts from each division
of the state is to make this research equally representative and genuine for whole of
the state.

Since the total districts of Uttarakhand can be divided into two geographic zones, i.e.,
hilly areas and the plains, therefore one hilly and one district of plains has been
selected from each division, i.e., Kumaun and Garhwal, to carry out the research more
effectively and accurately.

FMCG are fast moving consumer goods with frequent turnover and low cost. FMCG
sector is the fourth largest sector in the Indian economy having total market size of Rs
60,000 crores approx. A major portion of the house-hold budget is being spent on
these products of use. These products include soaps, toothpastes, hair care, household
care, male-grooming, female-cosmetics and hygiene, biscuits and confectionery and
tea and beverages etc. FMCG sector is floating for further growth because of the
promising opportunities and strong ground realities of the economy. Therefore, there
is a strong need for government interference and support to the players of this market
segment to help the industry to achieve lower cost, and to market improved quality
and better performance of the process in the competitive environment. In the
preceding decade, the FMCG industry has witnessed a consumer rumble. It has been
due to liberalization, urbanization, and increase in the disposable incomes of the rural

11
households, altered lifestyles, and saturation of urban market, particularly a sensitive
level of awareness among the rural masses resulting from information explosion.

Thus, Uttarakhand becomes a unique area for the study of this nature. No such study
has been carried out earlier and from this angle this study is expected to fill the gap.

In view of the reasons enumerated above, the universe of the study was identified.

1.3 SIGNIFICANCE OF THE STUDY:

The vastness of the rural market poses simultaneous challenges and opportunities to
the marketers. The desire to improve the living standards is felt as keenly in the rural
areas as in the urban areas. Rural incomes are rising and the poverty ratio is falling.
With the increase in real income of rural people, a shift has been found to have taken
place in the items consumed by the rural consumers. Today most of the consumers
from rural areas are developing a brand familiarity with national and international
brands. The growth in rural income has been better than the growth of income in
urban areas since the minimum support price for crops, like wheat and paddy has been
substantially hiked. Even the prices of pulses, rice, oilseeds and milk have increased
dramatically over the last one year. The disposable income with the farmer is higher
now, e.g., FMCG growth in Punjab is at 25 per cent in the April-June quarter (over
the corresponding period last year) is higher than earlier years. Hence, this study will
help the marketers to develop marketing strategies by taking into account the attitudes
and socio-psychological characteristics of the rural population and it will help the
marketers to bring in transformation of rural areas by making them aware of the other
latest products.

The products like soaps, shampoos, cosmetics and hair-oil were selected for the study
as these are very common products and if rural consumers would be aware about
these, then more branded FMCG can be launched in the rural markets. This study will
also help the marketers to develop the strategies for rural Uttarakhand as the sample is
ideally representative of the universe.

At the national level, many research-bodies and Institutions are conducting numerous
researches to understand the concept and emerging necessities for going rural as this
is going to be the area of common interest and it is likely to grow in the near future,
especially in the case of Indian Economy. Market and trade information is also

12
increasing on a regular basis. Researches are being conducted by focusing on the
following crucial aspects of Rural Markets:
1. Agriculture and Agri- Products.
2. Consumer Durables.
3. IT, Internet and Telecom.
4. Media and Entertainment.
5. Health care, Water and Sanitation.
6. Nutrition.
7. Population and Family Planning.
8. Agricultural Land Use.
9. Education and Women Empowerment.
10. Environment/Forestry/Natural Resource Management.

With the development of urban India the FMCGs have been able to satisfy the wants
of urban India bringing into a range of FMCG brands accessible and affordable.
Competition in the industry has given customer the best value for his money, as well.
The urban population is continuously increasing, though large potential remains in
rural India with a large population and increasing income of rural households. With
the introduction of schemes likes MNREGA, Right to Education, and Food Security,
the increasing disposable income will be utilized towards the low-priced FMCG
segment which offers them satisfaction of their wants. Once they start using these
products they will never try to be indifferent and the industry can be sure of the huge
demand from 70% of India’s population.

During the review of literature and discussions with the faculty and experts it was
concluded that ample work has been done in the area of rural marketing, covering
different aspects of rural marketing starting from its evolution to modern rural
marketing.

At the same time most of the researches have been done by different scholars and the
rural Uttarakhand has been analyzed from the other angles, such as literacy and
development, economic growth, agricultural and forest produces, but rural marketing
in Uttarakhand has been neglected till now.

13
On top of this, there has hardly been any research into the consumer behavior of the
rural areas, whereas there is a considerable amount of data on the urban consumers
regarding things like - who is the influencer?, who is the buyer?, how do they go and
buy?, how much money do they spend on their purchases?, etc. On the rural front, the
efforts have been started only recently and these will take time to bring out in
substantial results. So the primary challenge is to understand the buyer and his/her
behavior.

Thus, it is obvious that the researches and studies have been reflecting the different
fragmented aspects of rural marketing but not the rural marketing, per-say, so the
purpose of this study is to assess the implications of these researches in context of
attitudinal shifts in the attitude of rural consumers. It is an important area of
performing this research. This study will assess the potential and prospects of rural
marketing with regard to its geographical and cultural diversities from the perspective
of its consumers, marketers and facilitators all put together.

Marketing strategies formulated and discussed at the end of research will be helpful in
many ways to different stake-holders in the rural marketing in Uttarakhand. The
practices of marketers reveal a lot of deviation in their approach to rural India, while
in Uttarakhand there are many areas of districts which are still untouched by the
marketers and people are simply distanced from rural marketing.
In a nut shell the following are expected to be the significant contributions of this
study:
1. The study shall fill in the gap which exists at present in terms of availability of
research-base, and literature on this topic of contemporary interest. From this
angle it will amount to be an addition to knowledge about rural marketing in a
state having hilly terrain as well as the plain areas.
2. This study provides the empirical proof, though in micro segments, about the
tastes and preferences of rural consumers as well as about all the related factors
which help to decide the marketing strategies to be followed by rural marketers.
3. There exist many myths about rural marketing, but this study, supported by its
findings, does away with these myths, say rural consumers are less literate, or
rural consumers don’t buy the brands, or the rural consumers buy only the small
sachets etc.

14
4. This study may be extended further and it may be replicated at the macro level
to study the changes taking place in the milieu of rural consumers.
5. The most important significance of this study is that it tries to explore the
damage being done to the indigenous support-system of the rural areas, as a
result of the mad rush for increasing profits by the corporates operating in the
rural areas. Many respondents have agreed with the hypothesis framed to
explore the aspects of the study and their concern supports the thesis that on one
hand rural marketing is growing, expanding and of course it is a big business
buy now, but on the other the indigenous support-system of the rural areas is
getting destroyed beyond any hopes of repair or restoration.
6. The study has revealed the issues related to physical distribution of goods in
Uttarakhand and it may help the marketers to revise their strategies accordingly.
7. Another interesting finding of this study has been that all the respondents were
literate, which goes to prove that they make decisions very wisely and
promotional strategies should also be planned accordingly.

8. This study will help the researchers who may prefer to work in this area to
explore deeper into the issues raised in this study.
9. The study may help the government to intervene, if it so decides in order to
regulate the proliferation of rural marketing for the sake of bettering only the
health of the corporate sector.
10. Last, but never the least it has provided a wonderful learning opportunity to the
researcher and it might go a long way in further research pursuits of the
researcher.

1.4 CHAPTER PLANNING:

The study is divided in to seven chapters in view of the fairest possible treatment of
the problem. The introduction introduces the topic and provides a glimpse of the
subject of the research. It is followed by the conceptual analysis of the two central
themes, i.e., the rural marketing, as well as the FMCG sector. Chapter Three explores
the universe of the study, i.e., Profile of The Universe and Structure of Rural
Marketing in Uttarakhand, including the system of Mandis, Brokers and the existing
networks. The fourth chapter provides the review of literature which paved the way
for this study. The review of literature provided valuable insights for this work, and it

15
established the identifiable gaps which have been taking care of in this study. The
research methodology followed for this study has been enumerated in the fifth
chapter. It contains the objectives, the hypotheses, tools, processes, sample, schedules
etc.

Sixth chapter presents the analysis of data from various angles using the tools as
enumerated in research methodology. The analysis has been presented through tables,
diagrams, statistical analysis and interpretation thereof. Based on the analysis, the
conclusions and research based findings have been presented.

The organization of the dissertation is strictly in the format suitable for the purpose.
All the work carried on by the earlier scholars has been duly acknowledged in a
standard pattern of referencing given at the end of the chapters. The bibliography has
been appended at the end. It contains the literature surveyed for the purpose and its
organization is in the classified format to facilitate easy location of the relevant
sources. The schedules used for collecting the data are placed in the annexure
appended with the thesis. Other relevant information has also been provided in the
appendices.

16
REFERENCES:

1
Kashyap Pradeep, Raut Siddhartha, ‘Rural Marketing’ (Text and Practice), 2008.
Dream-tech Press, New Delhi pp. 10-11
1
Kashyap Pradeep, Raut Siddhartha, ‘Rural Marketing’ (Text and Practice), 2008.
Dreamtech Press, New Delhi p. 21
1
Singh Awadhesh Kumar and Pandey Satyaprakash, ‘Rural Marketing, Indian
Perspective’, New Age International.
1
Rajgopal, ‘Understanding Rural Market’, Daya Publishing House, New Delhi
5
Gopalaswami, T.P., ‘Rural Marketing: Environment, Problem & Strategies’,
2009, Vikas Publishing Pvt. Ltd.

17
“The blood of the villages is the cement with which the edifice of the cities is
built. I want the blood that is today inflating the arteries of the cities to run once
again in the blood vessels of the villages.”
-Mahatma Gandhi

Chapter- 2
CONCEPTUAL
FRAMEWORK OF
RURAL MARKETING
 CONCEPTUAL FRAMEWORK OF RURAL MARKETING

As discussed earlier, agricultural marketing is a different term referring to marketing

of agriculture rural inputs and outputs. In the strict sense it refers to two-way sale and
purchase of agricultural inputs and outputs only. Thus, rural marketing can easily be
distinguished from agricultural marketing in the sense that it doesn’t refer to the
marketing of agricultural inputs and outputs, rather it is a variant of urban marketing,
say marketing of FMCG, durables and the other items of daily requirements being
marketed through the established channels of urban marketing. Similarly, the
marketing of the same products through a network of supply chain logistics in the
rural areas refers to rural marketing.

2.1 OVERVIEW OF RURAL MARKETING

As we know that marketing is a larger system of many smaller subsystems beginning

with sensing the need, and creation of wants to monitor the after sales relationship
with the customers. Accordingly, rural marketing is also much more as compared to
its earlier versions of Haats and Bazaars. These formats were only the selling points
and these were actually limited to selling only which is just a component of the entire
gamut of activities which constitute marketing. Thus, rural marketing, on one hand,
refers to the locale and on the other it has to have all the elements of the marketing
activities. It has emerged as a result of various forces; say search for new markets
increasing awareness, better infrastructure, in terms of roads and communication etc.
So there are a number of factors which have contributed to the growth of rural
marketing. It is distinct from urban marketing in many ways, e.g., pricing, packaging,
branding, and acceptability. Accordingly, there are many issues related to rural
marketing, but the first and most important aspect is to technically define as to “what
is rural”?

The census of India defines “Rural”, as a habitation where the population density is
less than 400 per sq. km and where at least 75% of the male working population is
engaged in agricultural activities. Thus, there are about 600000 odd villages in
India1§. On this basis, once again, it is obvious that rural marketing also takes in to
account the people who are engaged in agriculture, but it goes beyond the agricultural

§
http://www.taraqram.com/ruralmarketing

19
inputs like seeds, fertilizers, pesticides, irrigation inputs or sale of the processed-
crops, raw-crops, or the other products produced in the rural areas. Thus, rural
marketing refers to the hitherto untapped market of the people living in rural areas and
primarily engaged in agriculture or allied activities.

It has been defined in different ways by National Commission on Agriculture. It

defines “Rural Marketing as, “Decision to produce salable commodities involving all
aspects of the market system or structure, both functional and institutional, based on
technical and economic considerations and includes pre and post harvest operations”
2**
. This definition of the rural marketing includes agricultural marketing in its ambit.
However, in the common parlance rural marketing refers to the marketing of two
broad categories of products, i.e., durables and non-durables. From this angle, the
agricultural marketing and rural marketing get separated as two distinct entities. Some
others define rural marketing as, “function that manages all activities in assessing,
stimulating, and converting the purchase power of rural consumers into effective
demand for a specific product and service, to create satisfaction and better standard of
living for achieving organizational goals”.3†† This definition given by CMIA is very
close to the pure concept of rural marketing as it is being understood in the accepted
sense of the term. On the other hand, some NGOs define rural marketing as products
produced in rural areas into urban areas or marketing of products produced in rural
areas in rural markets itself.

If one thinks little deeper about the growth of rural marketing, one may easily locate
the source of this quandary the growth of rural market over the period of time. In
India in the final phase, agricultural inputs and outputs were being marketed albeit
sold and most of the consumable items required by the rural folks were either
produced locally or supplied by the local shopkeepers. During this period, the concept
of marketing per say was gaining ground in urban areas and agricultural marketing
was getting formally structured with many new entrants. A little later the urban
market started reaching saturation and the marketers started identifying the new
markets. In this process, the concept of rural marketing came into existence. By now
it has got established as a distinct branch of studies and research for the market
players’ and academicians alike.

**
NCAER Report 2011
††
CMIA Report 1997

20
Rural marketing can easily be distinguished from urban marketing in view of the
peculiar socio-cultural conditioning and the physiological frame of the minds of rural
consumers. This issue has been highlighted in some studies4‡‡ that the sociological,
cultural and physiological (behavioral) factors determined the fundamental
characteristics of this particular segment of market. Naturally, therefore, rural
marketing can not be handled with the similar approaches which are true for urban
marketing. It is distinct in many respects; say creating the want approaching the
consumers, packaging the products, the supply-chain-management, market
segmentation and the type of wrapper with the consumers once the sale has been
executed, etc. These are some of the representative aspects, and in no way it can be
taken as the complete list all the parameters distinguishing the two market segments.

Another interesting feature of rural life is that it had a very deep rooted and very well
defined support-system of its own. Such a support-system never existed in the urban
life. This support system in fact has been the source of economic independence of
rural India since ages; say for, e.g., they never needed toothpaste and a toothbrush
manufacturer to clean their teeth or a cold-drink supplier to satisfy their need pf soft-
drinks etc. The local originals in the form of Neem and Babool were known to these
people since times immemorial. Similarly, they never needed cold drinks, hot-drinks,
shampoos, soaps and the like. It is a common knowledge from the older generation
that except salt almost everything was available locally in the villages; say edible oils,
hair oil, body cleaning system, coloring agents, clothes etc. Naturally, therefore, the
level of happiness in the villages was of a very high order. It had shaped the cultural,
behavioral, and physiological-transactional relationship of the village economy. Thus,
it was totally distinct from the urban life. With the entry of the modern form of urban
marketing, the indigenous support-system, which existed in this economy, got very
badly disrupted. These days now even for very small functions, the rural people
depend on the modern products and it has become a matter of prestige to use these
products, e.g., without large bottles of coke (or its substitutes) increases and modern
snacks etc. a function is conceived to be of a poor standard. This is, therefore, a
peculiar feature which has remained largely unattended in the literature on rural
‡‡
as quoted in, “Rural Marketing In India: Some Opportunities and Challenges”, by Anil Kumar S,
International Journal of Exclusive Management Research” Vol-1, Issue-1,2011 and also in “Prospects
and Problems of Indian Rural Markets”, by V.V Deviprasad, Kohli Published in Zenith International
Journal of Business Economics and Management Research, Vol-II, Issue-3, March 2012. ISSN
22498826.

21
marketing. In this study an attempt has been made to analyze the impact of modern
rural marketing on indigenous support-system of the rural society.

However, rural market is distinct from the urban market in many respects. Some of
these have been found to be as follows§§:
1. Monsoon dependent seasonal inflows of sale proceeds (income).
2. Difficult to reach locations.
3. Lower level of education and even literacy.
4. Varying income inflows.
5. Sparsely populated inhabitations.
6. Infrastructural problems.
7. Preference for lower priced goods.
8. Heterogeneous market.
9. Inadequate credit facilities

The above mentioned issues are some of the distinguishing features between the urban
market and rural market. It shall be explored further in this chapter.

Further, there are some distinguishing characteristics of rural market which make it
very special for the marketers roaring to enter the rural market.

Vast Potential

This market is really very huge and largely untapped. In many studies it has been
referred that about 72% of India’s population resides in rural areas. Obviously,
therefore, their requirements are also varied and vast. As per NCAER report,
estimated annual size of rural market for FMCG is Rs. 65000 Crores. Similarly, for
the other sectors, it is immense. Table-1 shows the estimated annual size of the rural
market.

§§
Dogra Balram, Ghuman Karminder (2008), Rural Marketing: Concepts and Practices, Tata Mc
Graw Hill publishing company, New Delhi, Pg-8

22
 Table- 2.1
Estimated Annual Size of the Rural Market

1 FMCG Rs. 65000 Crore

2 Durables Rs. 5000 Crore
3 Agri-Inputs (Including Tractors) Rs. 45000 Crore
4 2/4 Wheelers Rs. 8000 Crore

Source: NCEAR Report, 2011.

Apart from the above estimate, many other estimates have been put-fourth by
different groups. As per Nielsen, demand for personal care products is growing at a
faster rate in rural areas as compared to urban areas, say the demand in rural areas
increased by 10.7% in terms of value, but in urban areas it was only 6.8%. Similarly,
in the toothpaste category, sales in rural areas grow by 9.5%, but it was only 4.4% in
the urban markets. According to a whitepaper prepared by CII-Techno, the market
size of the rural market is expected to double to US$ 400 billion. All this has made the
FMCG companies, like HUL, Dabur, Godrej to increase their presence in rural India.
For them even the services sector like insurance and banking, telecommunications and
IT, the rural market is a lucrative market in terms of its vast potential. The
automobiles sector and the retail have also entered the rural markets in a big way. For
automobiles, Hero-Honda, Mahindra and Mahindra and even the other companies
have increased their sales in the rural areas. It is noteworthy that the rural consumers
buy goods against down-payments which is always preferred by business inclusind
the marketers.

The rural retail formats have also come-up in many shapes and patterns, viz, Hariyali,
Khush-hali, Subh-Labh and Kisan Kendras etc. These all formats have become very
popular and sales are increasing every year. They sell not only the agricultural inputs
but they present a vast range of FMCG and even the durables. In view of this
emerging potential of rural markets, the Government of India has also regularly hiked
the allocation for rural areas in its budget proposals, in the last 10 years.

In addition to the vast expanse of rural market, it is also noteworthy that rural market
is not homogenous rather it is a heterogeneous market in different rural areas. Some
of the states are rich, level of education and awareness is high and it has resulted in
the different tastes and demand. Even women and children have a stake in the

23
purchase decision of the family, in contrast to the states which are the poor ones
leaving restricted freedom to women and children. Punjab, Haryana, Gujarat and
Maharashtra are comparatively prosperous states as compared to Uttara Pradesh,
Bihar, Rajasthan, Jharkhand and West Bengal. Similarly, southern states have a better
exposure to education, awareness as well as growth. Naturally, therefore, the threes
sets of rural population are different and heterogeneous***. One can not afford to
market the same products in all the above mentioned sets of markets. It explains
another feature of vast potential of Indian rural market.

Thus the vast untapped potential of rural market is a source of big attraction for
marketers from India and abroad.

Budget Allocation

As referred to earlier, budget allocation fro rural development has continuously

increased. From 2009-10 to 2013-14, continuous increases is visible in table: 2.2

Table: 2.2
Budget Allocation on Rural Developments in Last Five Years (in Crores)

2009-10
PLAN 2010-11 (A) 2011-12 (A) 2012-13 (A) 2013-14 (E)
(A†††)
Department of
Rural 62160 56598 76338 72071 67139 64245.1 73175 N.A. 74429 N.A.
Development
Department of
2020 2018.5 2660 2613.9 2425 2420.94 3201 N.A. 5765 N.A.
Land Resources
Department of
Drinking Water 9199 9195.7 10580 10565 9350 N.A. 13000 N.A. 15260 N.A.
Supply
73379 67813 89578 85250 78194 66666.1 89376 N.A. 95454 N.A.

Source: Ministry of Rural Development, Government of India

Changing Levels of Education and Lifestyle

In the last decade, educational composition of rural areas has got metamorphosed.
They prefer to educate their children, who in turn develop a new life and new tastes. It
has made them to go in for the new lifestyles of urban India. They are demanding all
those products which were never demanded in the rural markets. Increasing awareness
on account of increased communication through TV channels, Internet and mobiles

***
Hundekar S. G. (1995) Management of rural sector, Mittal Publications, pg-164
†††
(A): Actual, (E): Estimates

24
has changed the shape of the rural market‡‡‡. Now communication is faster, reliable
and easily accessible. Thus communication has become much easier. A brief profile
of telecommunication density and increasing educational attainments is given in the
tables that follow:

Table: 2.3
Tele-Density, 2012-13 (Telecom Subscription as on 31 Jan. 2013)

Particulars Wireless Wire Line Total

Total Subscribers (Millions) 862.62 30.52 893.15
Total Net Monthly Addition (Millions) -2.10 -0.27 -2.36
Monthly Growth (%) -0.24% -0.86% -0.26%
Urban Subscribers (Millions) 528.88 23.66 552.55
Urban Subscribers Net Monthly Addition (Millions) -4.24 -0.17 -4.41
Monthly Growth (%) -0.80% -0.73% -0.79%
Rural Subscribers (Millions) 333.74 6.86 340.60
Rural Subscribers Net Monthly Addition (Millions) 2.14 -0.09 2.05
Monthly Growth (%) 0.65% -1.33% 0.61%
Overall Tele-density* 70.57 2.50 73.07
Urban Tele-density* 142.10 6.36 148.46
Rural Tele-density* 39.26 0.81 40.07
Share of Urban Subscribers 61.31% 77.54% 61.87%
Share of Rural Subscribers 38.69% 22.46% 38.13%

*Based on the population projections from Census data published by the Office of Registrar General
and Census Commissioner of India.
Source: http://www.trai.gov.in/WriteReadData/WhatsNew/Documents/PR-TSD-Jan2013.pdf

Table 2.3 reveals that a net monthly addition of urban subscribers is (-) 4.41 million,
but for rural subscribers, it is 2.05 which denotes a monthly growth of 0.61%,
contrary to (-0.79) for urban areas. Similarly, rural tele-density is 40.07 with a share
of 38.13%

These figures available on the website of TRAI substantiate the statements regarding
increased levels of awareness amongst rural people.

‡‡‡
Ganesh usha (2009), Retailing in Rural India-Markets and Oppurtunities, Chilibreeze,pg-3

25
Educational Attainment (2009-10 to 2013-14)

If one looks at the data related to the levels of literacy, one finds that by 2011, it has
gone up to 74.04, with an increased share of female literacy as well. Though literacy
rate is never a conclusive measure of any judgment because it is a very crude and
unreliable tool in view of its ultimate efficacy, et it is some measure and it goes to
substantiate, at least some positivities in terms of awareness. Tables 2.5 and 2.6,
exhibit the literacy rate in India.
Table: 2.4
Increase in Literacy Rate- 1951 to 2011

Census Male-Female gape in literacy

Persons Male Female
Year rate
1951 18.33 27.16 8.86 18.30
1961 28.3 40.4 15.35 25.05
1971 34.45 45.96 21.97 23.08
1981 43.57 56.38 29.76 26.62
1991 52.21 64.13 39.21 24.84
2001 64.83 75.26 53.67 21.59
2011 74.04 82.14 65.46 16.68
Source: Registrar of Census, population table

Table: 2.5
Crude Literacy* Rate in India by Sex- 1951 to 2011

Census Year Persons Male Female

1951 16.67 24.95 7.93
1961 24.02 34.44 12.95
1971 29.45 39.45 18.69
1981 36.23 46.39 24.82
1991 42.84 52.74 32.17
2001 54.51 63.24 45.15
2011 64.32 71.22 56.99
* Crude Literacy Rate = Number of literate person x 100 / Total population
Source: http://raijmr.com/wp-content/uploads/2013/12/4_12-16-Dr.-Navinchandra-R.-Shah.pdf

Improved Infrastructure
Rural Infrastructure in terms of roads, electrification, telephony and transportation has
changed a lot. It is a common knowledge that more and more villages are now
connected to mettled roads. Similarly, in villages there are very few homes with

26
thatched roofs, and these are being replaced by the homes of bricks, iron and cement
barring exceptional extreme poverty in some states and especially in the tribal areas.
These days it is cheaper and easier to construct a home of bricks and cement as
compared to a roof made of grass and bamboos (woods) . Over 44% of rural houses
have electric connections. In the last decade ending in 2010 telephone density had
gone up by 300% and the % of BPL homes has drastically come down. All this has
created newer avenues for rural marketing companies to reach out to the market
hitherto untapped.

27
 Table: 2.6
Expenditure on Government Sponsored Schemes
Budget Allocation and Achieved Budget in Various Rural Development Schemes Sponsored by Government since 2009-10 TO 2013-14
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 TOTAL
Target Achieved Target Achieved Target Achieved Target Achieved Target Achieved Target Achieved Target Achieved
Swarjayanti Swarojgar
1 Yojna/ Aajivika- National 2350 2338 2350 2228.1 2984 2664.63 2681.3 2391.6 2600 1767.85 4000 N.A. 16965.3 11390
Rural livlihood Mission
Sampoorna Gramin
2 7500 7500 RESTRUCTURED/WITHDRWAN WITH MNREGA 7500 7500
Rojgar Yojna
National Rural Employ-
3 30000.2 30000 39100 33538 40100 35840.7 31000 29213 29387 26004 33000 N.A. 202587 154596
ment Guarantee Scheme
Rural Housing/Indira
4 8800 8800 8800 8799 10338 10337.5 10000 9872.1 10000 7404.88 15184 N.A. 63121.5 45213
Awas Yojna
Pradhan Mantri Gram
5 7780.15 7780.15 11340 11339.9 22000 22399.95 19981.3 19342.3 10000 6825.76 21700 N.A. 92801.4 67688
Sadak Yojna
6 DRDA administration 250 292 250 385 405 484.73 550 550 410 262.53 250 N.A. 2115 1974.3
Grants to National
7 Institute of rural 16.81 16.81 15 30 105 97 81 81 47 23.5 50 N.A. 314.81 248.31
development
8 Assistance to CAPART 60 58.54 50 50 100 50 35 0 12 0 15 N.A. 272 158.54
Provision for Urban
9 Amenities in Rural Area 30 0.01 30 0 74 66.2 90 90 0 0 50 N.A. 274 156.21
PURA
Management support to
RD programs and
10 75 71.81 75 73.97 120 119.79 120 119.71 145 89.35 120 N.A. 655 474.63
strengthening district
planning process
11 BPL Survey 0 0 150 149.85 112 60 2600 2559.37 375 247.04 59 N.A. 3296 3016.3
TOTAL 56862.2 56858 62160 56594 76338 72120.5 67139 64219 52976 42625 74428 N.A. 389902 292416
* Aajeevika-National rural livelihood mission- is shared scheme of central as well as state, here only central contribution is shown in the table
** CAPART is under restructuring phase-revised estimates yet to be issued.

Source: Ministry of Rural Department, Govt. of India

28
Increased Income and Enhanced Awareness

During the last five years incomes in rural India have constantly increased. It is not
purely because of increased productivity from agriculture rather it is the cumulative
result of many factors.

1. Changing pattern and composition of rural income.

2. Increased government expenditure on rural development schemes.

3. Improvement in productivity from agriculture and allied activities.

4. Rising prices of agricultural resources and land.

5. Newer avenues of credit sourcing.

6. Mass media exposure and increased contact with urban India.

All the above factors have contributed to increase in rural income and awareness in
different ways. The available data goes to prove that between 2009 and 2012;
percentage increase in monthly per capita expenditure of rural consumers has been
higher as compared to that of urban consumers. To be precise, for urban consumers it
has increased by 17.25%, whereas in case of rural consumers, it has gone up by
19.2%.12 It shows that the per capita monthly expenditure of rural consumers is up by
2% vis a vis that of the urban consumers.

Nielsen’s estimates indicate that FMCG market in rural India will be of the size of
US$100 billion by 202513.

These two indications coupled with many others establish that rural incomes are
changing and increasing very fast. Now the rural GDP doesn’t comprise of income
from agriculture and allied activities only. Presently, about 55% of manufacturing
GDP is rural. It is because of establishment of new factories and industries recently
created in the rural areas. It has resulted in secure jobs to rural folks adding to their
incomes. Thus, the consumption of rural income has totally changed and it is on the
positive side giving a boost to rural income. This additional income is being used as
expenditure in creating new demand from the rural market. Further;

12
as quoted in Accenture’s report, the NSSO data, 2012
13
as quoted in Accenture’s report

29
• During the last decade government of India has pumped in huge sums of money
into the rural development schemes like MNREGA, Bharat Nirman etc. giving a
quantum jump to the income of rural people. This enhanced budgetary outlay has
resulted in creating new income generating sources, notwithstanding all its
pitfalls.

• In the last decade, though there is an overall decline in the total contribution of
agriculture and allied sector to GDP, yet there are distant signs of improvement in
different areas. Even the credit facilities available from the banks have given a
boost to agricultural productivity.

• Though the rising prices of agricultural land is not a direct contributor and it is
only an assumed contributor to rise in incomes of rural consumers, but in many
cases it has given the huge purchasing power to land owners, who, till now, were
surviving on low productivity and lower incomes. With the additional revenues,
they have been able to create new wealth and in many cases the additional and
continuous income generating sources.

• Another important factor adding to the purchasing capacity of rural consumers is

the enhanced availability of credit in the form of consumer loan, vehicle loan, and
priority sector lending schemes, kisan credit card and other such schemes.

• All the above and possibly some other related reasons have added to increase the
purchasing power for the rural consumers.

Increased Contact with Urban Lifestyles

In view of the improvement in telecommunications, penetration of information

technology, television channels, better commuting facilities and temporary
movements of younger population to cities for education, employment and other
reasons, much better contact of rural people with the urban has happened. It has
resulted in the similar lifestyle in the rural areas as well. In so many cases, television
has been found to be a very strong source of information and it has strongly
influenced the attitudes of the people. As a result, demand for the similar products,
somewhat closer to the products available in the urban market has come into
existence.

30
In this case, the marketers did not have to make an extra effort to create the want or
the desire; rather they hammered upon the latest desires which had already generated
and got positioned in the minds of the rural people. So, it was easier for them to
establish a market for their products which never existed earlier.

The above mentioned reasons have actually made everyone to look at the rural market
and now the buzzword is “Go Rural”. The urban markets are saturated and the newer
possibilities of growth of sales are there in the vast rural market. It has the large size,
purchasing capacity, and the effective desire to change its pattern of living. Some
success stories of early-movers like those of HUL and ITC, followed by those of Hero
Motors and the like have shown the way. There is severe competition amongst
entrepreneurs and business-houses to create separate set of strategies, pricing,
packaging and everything else related to rural markets. The most attractive feature for
the marketers is the vast size of this segment and its excellent capacity to pay.

It does not mean that there is absolute prosperity is rural area, but it goes to prove that
in a large segment of rural population these features do exist. There may be some
other reasons to highlight the importance of rural market, but in the preceding analysis
an attempt has been made to present the major features based on the extensive review
of available literature and trends.

2.2 DISTINCTION BETWEEN THE URBAN MARKET AND THE RURAL

MARKET:

The two markets are different from each other in many respects. As discussed earlier,
the behavioral pattern, their cultural conditioning and their aptitude distinguish rural
markets from the urban markets. These distinctions lead to the evolution of different
marketing strategies adopted by different companies for effective penetration into the
rural market. Some of these are given below:
1. Price
2. Product (Packaging/Branded Products)
3. Promotion

• The pricing strategy for the rural market has to be different because it is the most
sensitive element of purchase decision. Some of the consumers do prefer brands

31
 and they do not care about the price but majority of rural consumers (even urban)
go by the price. In urban markets also price plays an important role for most of the
buyers but the dictum of “the costlier the better”, does hold good in the urban
markets. This is how the lower pricing strategy may bring-in more revenues for
the firms14.

• The second issue of packaging (product) is also related to the first, i.e., price.
Thus, small packets, sachets, and pouches have dominated the rural market. It is in
contrast with urban consumers who go in for the large economy packs. The rural
consumers prefer to buy the items of FMCG in smaller quantities and by shelling
out smaller sums of money. In view of these peculiar features different packaging
strategies are adopted by most FMCG firms.

• Another issue of peculiarity is very important, because some of the items may not
have any market in the rural area, whereas others are much sought after, say milk,
milk-products, fresh-vegetables and the other such items may not find favor with
the rural buyer, but emergency lights, inverters and electrical appliances capable
of being operated with the help of alternative sources of energy created a niche-
market for their own. Because of erratic nature of electric-supply, the electronic
equipments needed to be designed in a manner specifically suited for such
conditions.

• Similarly, the branded products are not the items of mass appeal for rural
consumers. Honda’s grand success in sales of its two-wheelers is attributed to the
fact that it made difficult commuting very easy. Thus, a product plays a very
important role in defining the demand in the rural market.

• Lastly, in terms of promotion one needs to understand that the same set of
promotional tools may work in the two markets. However, advertising for rural
areas has to be designed specifically and the message should be worded in such a
manner so to instantly appeal the peculiar psyche of the consumers. Distribution
of free samples and advertisement through short films may help to convey the
message. The other promotional strategies are almost common in both the
environments, because level of awareness in rural areas is very high.

14
Vashisht Kujnish, (2005), ‘A Practical Approach to Marketing Management’, Atlantic Publishers
p-373

32
From the angle of marketers, the distinction may extend to many other critical areas,
but from the angle of rural consumers these are the beginning points of 3600
distinctions in some other cases. In marketing language, especially from the angle of
the marketers these are known as the 4 ‘A’s of Rural Marketing, i.e.,;
1. Availability
2. Affordability
3. Acceptability
4. Awareness

The earlier analysis captures the three of these, excepting the availability factor which
refers to the logistics, supply-chain, warehousing, and the means of transportation. It
is, rather marketer’s specific concern, but the other three, i.e., affordability has direct
reference to price, acceptability is related to product-type and awareness relates to
promotion. However, separate analysis of these 4 A’s of rural marketing is relevant.

Availability: Given the condition of roads and the vast size of area to be covered, say
6, 38, 000 villages spread over 3.2 million sq km, with 700 million potential
consumers is a real challenge. It has a direct relationship with the cost of
transportation, distribution-network including channels partners, supply-chain and
warehousing. The majority of surveys point out that distribution costs are a major
hindrance. There are different models of reaching out to rural consumers and the
companies are making ‘trial and error’, efforts in order to pin-point a particular
strategy, say Hindustan Unilever follows the ‘hub and spoke’ model to ensure
availability; whereas others have followed hybrid models to compete and grow. One
of the hybrid model is ‘feet-on-streets’ model in which they have developed the
village entrepreneurs as middlemen. Some are leveraging ‘e-commerce’ to reach out
and to ensure availability. But, 50% of the marketers opined that high cost to serve the
rural markets existed as the number one challenge.15

Accordingly, therefore, making goods available in rural market is a big challenge for
all the companies engaged in rural market. Their target is to take their products to as
many people as possible to the extent that the ‘last mile’ in the technical sense is
nearer.

15
Accenture’s survey on rural marketers, 2010.

33
Simultaneously, expression, of reach is also equally important to derive substantial
profits. For this purpose, proper market-survey, segmentation and targeting have to be
applied. Additionally, sustainable supply-chain needs to be maintained either through
its own depots or through responsible channels-partners. If once the goods are made
available and the next time the same are not available, the element of trust can not be
established.

Reaching the un-reached population is a challenge for the established players,

expanding corporates and new entrants alike. It is only the degree of inconvenience
which is different for all the three types of rural marketers but making the goods
available, keeping the continuous supplies, arranging logistics, finding channels
partners and creating trust are the key issues in this group of the concept known as
‘Availability’.

Thus, it is a wide ranging concept incorporating a gamut of activities which are not
such a big hurdle in the urban areas.

Affordability: Being able to afford the product or service is the most important. In
order to understand the exact dimensions of the aspect one needs to understand the
income-pattern of the rural people. Their income-generation, its accrual and receipt is
different for different segments. There is a large chunk of buyers who are daily or
weekly wage-earners. These people do not have the capacity to afford big-packs,
costly-packs or branded items. This is how an early mover in the rural market. HUL
launched some low cost variants of its largest selling soap ‘Lifebouy’. Similarly,
Coca-Cola, Godrej and many others followed the suit and came up with small value
packs or sachets which could be afforded by the daily or weekly wage-earners.

Even, middle class farmers, who have a good economic status do not have continuous
flows of income, rather their income is lump-sum and seasonal. These consumers also
fall in the category of buyers of smaller packs in the routine. There are rich farmers
having many sources of income, like agriculture and supporting activities. They can
afford to buy the branded items, value-packs or exactly the same items demanded by
the urban consumers. Finally, there is a new group of income earners from industrial
and manufacturing activities in the form of salaries. Though they work in
manufacturing units or service centers, yet their base is the rural milieu. These people
occupy a large segment of continuous income-earners in the rural areas. Their demand

34
for goods is comparatively closer to their urban counterparts and they prefer to buy
the standard and in some of cases the branded products.

Thus, in the rural market there are four above mentioned segments of customers, i.e.,
the daily wage-earners, middle class farmers, the big and affluent and the salaried
rural consumers. The marketers have to adjust the affordability of their products
accordingly.

The services marketing to rural consumers is rather different as compared to rural

marketing for product, say a mobile repairing shop, a two wheeler-repairing shop or a
TV repairing shop is more in demand as compared to a beauty parlor or a call centre
or an insurance service provider. Gradually, the demand for the services is increasing
say, the ATM’s, the general insurance service, life insurance or the other modern
service providers are also lined up in the rural market. In this segment also
affordability is a very important criterion. One can not charge the same amount of
money for the bridal make-up as an urban beauty parlor may get. The insurance
products have to be suited to their needs, and flows of income, e.g., annual premium
mode will be preferred by rural buyers of insurance policies as compared to monthly,
quarterly or half yearly premium plans.

In a nutshell affordability is a key factor while planning rural marketing; the strategy
needs to be desired to suit the convenience and ease of consumers.

Acceptability: It refers to the typical nature of requirement and the prevailing

conditions in the rural areas. As electricity supply is erratic in the rural areas, one can
not afford to find a market for products purely dependent on electric supply.
Similarly, products making the living conditions easy and comfortable are demanded
more in this segment, e.g., as compared to a rechargeable torch, they prefer battery
operated torch. Many companies have followed this strategy and reaped good
dividends. The customized TV ‘Sampoorna’ sold 1 lakh sets in the rural markets. In
view of the shortage of electricity, Coca-Cola came out with smaller ice-boxes to keep
the bottles cold. Standard Life earned a premium of Rs. 3.5 crores by selling
reasonably priced policies. Recently the solar inverters are a big hit with the wealthy
farmers in the rural areas.

35
These examples indicate the acceptability of the products or services in the rural
markets. At this point itself, one may ponder over the two dimensional nature of
‘acceptability’ in the rural markets, say one is need-based and the other one is the
created set of wants. Many items, which in the earlier stage of penetration of
marketing, were not in demand in the rural areas are now entering the rural markets in
a big way, e.g., noodles, coffee and many other such items including durables are
attracting a good demand in rural markets. Mobile penetration in the rural areas is
growing very fast, e.g., in the rural market percentage of rural subscribers was 29%
from 2010 to 2011 in the third quarter, whereas in the urban areas it was only 23%.
Similarly, tele-density during the same period in the urban areas was up by 21%,
whereas in the rural areas it was up by 28%.16

The following table provides a ‘bird’s eye view’ of the volume of growth in meeting
acceptability of the rural markets.17

Table: 2.7
Emerging Categories in Rural Market

Universe 154.9 million Penetration Households Volume

(India) Jan-Oct’11 % Growth % Growth
Milk Food Drinks 11.3 34 44
Coffee 15.1 2 10
Noodle/Macroni 39 5 9
Toilet/Bathroom Cleaner 6 19 24
Bottled soft drinks 11.2 33 31
Insecticides 27.7 14 23
Rubs/balms 29.9 16 21
Any sharing preparation 3.5 35 40
Skin/Antiseptic creams 76.4 6 14

Source: IMRB Survey 2011.

The table 2.7 is a sufficient proof of the acceptability by creation of newer wants in
the rural India.

16
Data obtained from TRAI and reported by MART in its research titled “Rural Growth Story” March
by 2012.
17
ABHINAV, National Monthly Journal of Research in Commerce and Management, Vol-1, Issue No-
04, ISSN-2277.1166, P-48 (Website: www.abhinavjournal.com)

36
Accordingly, acceptability is an important dimension, and infact it is a
multidimensional feature of Indian rural market. One may take any category, and one
will find that, though different from the urban market, the pattern of ‘acceptability’ is
changing very fast. The items which never existed on the horizon of rural market are
now the emerging potential revenues earners.

Awareness: Many active agents of ‘awareness’ have contributed to ‘enhanced

awareness’ in the minds of the rural consumers. Some of the major components of
awareness are as follows:

1. Massive expansion of mass media.

2. Enhanced level of educational achievements.
3. Many channels of effective interface with the urban life.
4. Corporate initiatives.
5. Improved Infrastructure.

The above list regarding awareness is, again, not exhaustive, rather it may include
some other factors as well.

Mass media is, for sure, the most important critical agent of change of awareness. It is
a wide concept and it includes television, newspapers, mobiles and even internet
through mobiles, to a limited extent. Out of all these components television is the
strongest influencer and it impacts all the members of the family, including women
and children, who in many cases, act as the catalyst in the purchase-decision of the
family. During the last few years, there has been exponential growth of mass-media,
including the increased tele-density and the internet enabled mobiles. It has given a lot
of power in the form of information to the ignorant people living in the rural areas.
Eventually, this enhanced awareness has led to the growth of rural marketing.

Many products are peculiarly the outcome of awareness through media only in the
rural markets. These have become popular due to TV ads’, say, Coca-Cola, Maggie,
Noodles, and nay other consumers-products in different categories. In this process,
sometimes, innovative media vehicles are also employed by the corporates to
advertise at the point of purchase, say screening of a popular film at the purchase
point and showing strong advertisements of their products, in-between. Such
innovative media approaches were successful in many cases even radio has been

37
employed to convey the ad-messages to the prospective customers. About 50% of
rural households have access to TV sets and, as such, it emerged as the strongest
medium to carry the message.

Educational enhancement has led to ‘enhanced awareness’ in many ways; say,

interaction of the rural youngsters with their urban-counterparts, and use of mobile
and internet by the younger generation are some of the important components which
have, led to triggering-effect on ‘multiplying awareness’. This factor has already been
discussed in the preceding pages.

Interaction with the urban population has increased through many routes, say rural
people going for jobs or shopping to urban areas, insistence of school and college
going children on their families for purchasing many items of urban-life and visits of
rural people to urban areas for the other purpose, like marriages and other functions.

Some of the corporates who ventured into the rural marketing tried to establish their
own awareness campaigns. In this category one is easily reminded of ITC and HUL.
These corporates came up with the famous experiments like ‘E-Chaupal’ and project
‘Shakti’ which proved to be very successful leading models, being quoted too often.

E-Chaupal- In the year 2000, ITC decided to re-engineer the procurement of soy-
beans from rural India. They established ‘kiosks’, called ‘E-Chaupals’. The kiosk had
a personal computer with internet access and farmers could access information on
prices prevailing in different markets, with the option of selling their produce to ITC
at their hub locations. Warehousing hub in this case was managed by a middleman
who was also a farmer. Very soon their experiments became successful and in 2005-
06 ITC generated $23 million, selling chemicals and fertilizers. Thus, they created a
2-way channel, wherein on one hand, farmers could get the information, be aware and
sell their produce through these arrangements, and on the other, the money which
came to the farmers could be utilized for buying different utility-items like chemicals
and fertilizers, and it was managed to grow and expand through newer interventions.

Project Shakti: HUL’s ‘Project Shakti’, meaning strength, created the income
generating capabilities for underprivileged rural women by providing a small-scale
enterprise-opportunity to improve their living standards and increased their awareness
about health and hygiene. This experiment of creating micro-enterprises was also very

38
successful. It was launched in 2001, and involved working with rural self-help-groups
to educate rural women and also to make them a part of the marketing network of the
company.

Some other experiments in this category were taken up by HUL like the Annapurna
salt, which is the case of spreading the awareness regarding prevention of IDD and
goiters through Io-dised salt. Similarly, Amul, Godrej’s ‘Perfect Drwaers’, Hariyali
Kisan Bazar by DCM Shriram and Triveni, Khush-hali Bazaar by Triveni Engineering
industries limited are such initiatives.

All these corporate-initiatives were directly aimed at creating awareness in the minds
of rural people and creating market for their products. So, when it comes to
awareness, the role played by these corporate-initiatives is also very important.
Recently, many new organizations like MART, Accenture, NCAER etc., are working
in this direction.

Improvements in the connectivity, as a result of improved roads and

telecommunication network, have bridged the gap with regard to reach from rural to
urban, and there have been an increasing flow of 2-way traffic through this
improvement in infrastructure. Earlier, small 4-wheelers could not reach the village,
but now it has become much easier. So, improvement in the flows of information,
awareness, goods and people has become very easy and continuous. Similarly,
improved telecom infrastructure and electricity supply has helped this process of
‘Awareness’.

Thus, awareness has been highly impacted on account of various reasons and it has
played a great role in the acceptability of FMCG, services and consumer durables in
the rural market.

2.3 THE FAST MOVING CONSUMERS GOODS (FMCG):

This category represents the items which are non-durable and which are required for
everyday use. The purchase cycle of these items may be different but the truth is that
these items are frequently purchased for daily use. This group represents the items
which have the high volume and in many cases these are brand-dependent. So,
marketing is very important in case of FMCG because there are many competing

39
players and the competition is very fierce, about 60% of the FMCG market is
unorganized and the remaining 4% is dominated by the global companies like, Uni-
Lever, Proctor and Gamble, Gillette, Nestle, Colgate etc. Some of the Indian
companies like, ITC, Dabur, Nirma Godrej, Parle etc. are also the national players to
recon with. The size of FMCG market is very-very huge, say in 2007-08, it was
estimated to be of around Rs. 83000 crores and the rate of growth was anticipated to
be 15-16% per year.

FMCG sector in India is the fourth largest sector in the economy. It has well-
established distribution networks and strong presence of MNCs through the entire
value chain. It is estimated that by 2015 the FMCG market in India will reach to Rs.
20,040, 000 lakhs (33.4 $ Billion) from 6,960,000 Lakhs ($ 11.6 billion) in 2003. The
diagrams given below show the estimated average size:

Table: 2.8
Growth in FMCG Market in India:

US$ Billion Year In ,000 Lakhs*

11.6 2003 6960
14.6 2006 8760
18 2010 10800
33.4 2015 20040

* 1 US$=Rs. 60.

Source: http://www.ibef.org/industry/research-development-india.aspx

40
 Growth in FMCG Market

25000
20040

20000
in 000, Lakhs

15000
10800
8760
10000 6960

5000

2003 2006 2010 2015

Source: http://www.ibef.org/industry/research-development-india.aspx

Figure: 1

Market Segments in FMCG Sector

2
12
22
Baby Care
Fabric Care
Food Products
Hair Care
5
Household
4 OTC Products
4 43 Personal Care
Others
8

Source: http://www.cii.in/sectors

Figure: 2

This industry is marked by low operational cost strong distribution networks and
growth of population is an active agent in helping the growth of this industry.

Characteristics of FMCG:

• Individual items carrying small value, but all items put together account for a
significant part of the consumer’s budget.

41
• Usually stock of these products is not maintained but these are purchased as and
when required. Many items in FMCG are perishable

• Purchase decision of these products doesn’t take a long time. Contrary to the
industrial goods for which technical specifications are seriously checked.

• Brand loyalties or recommendations of reliable retailers/dealers drive purchase

decisions.

• A new product finds its place after a lot of efforts, i.e., heavy advertisements,
recommendations of retailers or neighbors/ friends.

FMCG cater to necessities, comforts as well as luxuries. Almost every person in the
society needs these products.

Categories of FMCG:

There exist many products and many categories across the industry. Some of the
major groups are as follows:

• Personal Care: Includes Oral Care, Hair Care, Skin Care, Personal Wash
(soaps).

• Cosmetics and toiletries: Deodorants, perfumes, female-hygiene, paper

products.

• 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.

• Packaged food Products: Branded flour, branded sugar, bakery products such
as bread, biscuits, etc.., ready to eat food products, snacks, noodles, ready to
cook products, chocolates, ice cream, cheese, wafers.

• Beverages: Tea, milk, dairy products, coffee, juices, carbonated drinks, bottled
water, squash, and health supplements.

• Apparel: Readymade garments (western and traditional, formal and informal)

for men and women, fabric for men and women, accessories such as ties, belts
etc.

42
The personal care category has the largest number of brands, i.e., 21, inclusive of Lux,
Lifebuoy, Fair and Lovely, Vicks, and Ponds. There are 11 HLL brands in the 21,
aggregating Rs. 3,799 crore or 54% of the personal care category. Cigarettes account
for 17% of the top 100 FMCG sales, and just below the personal care category. ITC
alone accounts for 60% volume market share and 70% by value of all filter cigarettes
in India.

The foods category in FMCG is gaining popularity with a swing of launches by HLL,
ITC, Godrej, and others. This category has 18 major brands, aggregating Rs. 4,637
crore. Nestle and Amul slug it out in the powders segment. The food category has also
seen innovations like softies in ice creams, chapattis by HLL, ready to eat rice by
HLL and pizzas by both GCMMF and Godrej Pillsbury. This category seems to have
faster development than the stagnating personal care category. Amul, India's largest
foods company has a good presence in the food category with its ice-creams, curd,
milk, butter, cheese, and so on. Britannia also ranks in the top 100 FMCG brands,
dominates the biscuits category and has launched a series of products at various
prices.

In the household care category (like mosquito repellents), Godrej and Reckitt are two
players. Goodknight from Godrej, is worth above Rs 217 crore, followed by Reckitt's
Mortein at Rs 149 crore. In the shampoo category, HLL's Clinic and Sunsilk make it
to the top 100, although PandG's Head and Shoulders and Pantene are also trying hard
to be positioned on top. Clinic is nearly double the size of Sunsilk.

Dabur is among the top five FMCG companies in India and is a herbal specialist.
With a turnover of Rs. 19 billion (approx. US$ 420 million) in 2005- 2006, Dabur has
brands like Dabur Amla, Dabur Chyawanprash, Vatika, Hajmola and Real. Asian
Paints is enjoying a formidable presence in the Indian sub-continent, Southeast Asia,
Far East, Middle East, South Pacific, Caribbean, Africa and Europe. Asian Paints is
India's largest paint company, with a turnover of Rs.22.6 billion (around USD 513
million). Forbes Global magazine, USA, ranked Asian Paints among the 200 Best
Small Companies in the World.

Cadbury India is the market leader in the chocolate confectionery market with a 70%
market share and is ranked number two in the total food drinks market. Its popular
brands include Cadbury's Dairy Milk, 5 Star, Eclairs, and Gems. The Rs.15.6 billion

43
(USD 380 Million) Marico is a leading Indian group in consumer products and
services in the Global Beauty and Wellness space.

India’s GDP unlike that of other emerging developing countries has a bigger
consumer percentage than investment. This is because India’s economic growth
model has not followed the traditional export growth model of the other countries in
Asia like China. This makes India more resilient to external shocks like the Lehman
crisis and provides a more domestic orientation to growth. India has one of the fastest
growing economics in the world and as the per capita income increase; consumer
companies in India are reaping outsized rewards. India has a competitive consumer
goods market with a number of domestic and international companies competing in
multiple markets and segments. Some of the companies like HLL which is a
subsidiary of the global consumer giant Unilever has become an Indian company all
but in ownership. Fast Moving Consumer Goods (FMCG) companies are different
from Consumer Durables companies. FMGC companies are what are known as
Consumer Non-Discretionary Group of Companies. These Companies sell products of
everyday use and are recession proof in the sense that the products sold by FMCG
Manufacturers can’t be ignored even in times of economic recessions.

Fast Moving Consumer Goods Companies have been expanding rapidly in the Indian
market and are set to grow to the next level as India’s middle class grows bigger and
bigger and the existing middle class becomes richer. India’s Fast Moving Consumer
Goods Stocks form a great defensive investment class. They not only have
“defensive” characteristics but also growth as well. India’s FMCG sector is expected
to grow by more than 100% in the next 5-6 years as more and more consumers move
from unorganized part of the industry to the organized industry. Though competition
has been fierce in India’s Non Discretionary Consumer Goods Industry with the
PandG and Unilever Price War in the Detergent Segment, the Industry has seen its
share of winners with Nestle, Colgate being multiage’s in the last 10 years giving
huge returns to investors. These stocks trade at high multiples justified with their very
high returns, strong brands and low investment requirements.

ITC Ltd. – With a market capitalization of Rs.137, 000 crores, ITC is one of India’s
foremost private sector companies. While ITC is an outstanding market leader in its
traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-

44
Exports, it is rapidly gaining market share even in its nascent businesses of Packaged
Foods and Confectionery, Branded Apparel, Personal Care and Stationery. ITC is one
of the country’s biggest foreign exchange earners (US $ 3.2 billion in the last decade).
The Company’s ‘e- Choupal’ initiative is enabling Indian agriculture significantly
enhance its competitiveness. It earned revenues of Rs.5, 000 crores and a net profit
margin of 25% in December 2010.

Hindustan Unilever Ltd. - HUL is India’s largest Fast Moving Consumer Goods
Company with categorized business like soaps, detergents, shampoos, skin care,
toothpastes, deodorants, cosmetics, tea, coffee, packaged foods, ice cream, and water
purifiers. With a market capitalization of Rs. 61,000 crores, the Company is a part of
the everyday life of millions of consumers across India. The company earned
revenues of Rs. 5,000 crores with a net profit margin 12%. Its parent company is
Unilever, which holds about 52 % of the equity. Its portfolio includes leading
household brands such as Lux, Lifebuoy, Surf Excel, Rin, Wheel, Fair and Lovely,
Pond’s, Vaseline, Lakmé, Dove, Clinic Plus, Sunsilk, Pepsodent, Closeup, Axe,
Brooke Bond, Bru, Knorr, Kissan, Kwality Wall’s and Pureit.

Nestle Ltd. – Nestle India is a subsidiary of Nestle S.A. of Switzerland. With a market
cap of Rs.35, 000 crores it operates with seven factories and a large number of co-
packers. The main business includes manufacture of Milk products. It specializes in
infant food, while the other products in this range are ghee, dahi and dairy whitener. It
also has a diversified product chain like prepared dishes and cooking aids – the major
one being Maggi, others are sauces, pasta, beverages like coffee and iced and instant
tea. Nestle is also known for its chocolate and confectionery range the major brands
being Kitkat, polo and bar-one. The sale is not only limited to India but also abroad.
The company marked a steady growth in 2010 with Rs. 1,000 crores as revenues and
a net profit margin of 15%. It has been acknowledged amongst India’s ‘Most
Respected Companies’ and amongst the ‘Top Wealth Creators of India’.

United Spirits Ltd. - The Company was earlier known as the McDowell and Co. The
market cap of the company is Rs 13,000 crores with revenues of Rs.1,000 crores and
6% net profit margin in Dec 2010. United Spirits Limited (USL) is the largest spirits
company in India and second largest spirit company in the world. It enjoys a strong
59% market share for its first line brands in India. The company has 20 millionaire

45
brands (selling more than a million cases per annum) with Whyte and Mackay and
Bouvet Ladubay being its 100% subsidiaries. The leading brands are Antiquity, Black
Dog, Royal Challenge, Signature, Bagpiper, Mc’Dowell’s No.1. The company is
known for creating new benchmarks in blends and packaging in the global spirits
industry.

Dabur India – Dabur India Limited is the fourth largest FMCG Company in India with
Market Capitalization of Rs.16,000 crores. Dabur operates in key consumer products
categories like Hair Care, Oral Care, Health Care, Skin Care, Home Care and Foods.
For the past 125 years, the company has been dedicated to providing nature-based
solutions for a healthy and holistic lifestyle. They touch the lives of consumers, in all
age groups, across all social boundaries. Dabur specializes in Ayurvedic products.
Some well known in the category are Chyawanprash, baby medicines – Janam-Ghutti
and gripe water, Hajmola, Glucose-D and Pudinhara. It earned revenue of Rs.900
crores and a net profit margin of 14% in Dec’10.

Colgate Palmolive (India) Ltd. – With Rs.11,000 crores as the market capitalization
and Rs.500 crores revenues with a net profit margin of 11% in December 2010,
Colgate Palmolive Ltd. is a truly global company serving hundreds of millions of
consumers worldwide. Started as a small soap and candle company, the company is
now 200 years old. Colgate is well known for its Oral care products like toothpastes
and toothbrushes. Lately introduced – Colgate sensitive toothpaste takes care of the
sensitive teeth. It has also diversified its business into personal care and home care,
professional care – trusted by dentists across the country.

Godrej Consumer Products Ltd. - Rs.350 crores 18%.is a leader among India’s Fast
Moving Consumer Goods (FMCG) companies, with leading Household and Personal
Care Products. The major brands are Good knight, Cinthol, Godrej No. 1, Expert, Hit,
Jet, Fairglow, Ezee, Protekt and Snuggy are household names across the country.
With Rs. 11,000 crores as the market capitalization, the company is largest marketers
of toilet soaps in the country and is also leaders in hair colors and household
insecticides. The ‘Good knight’ brand has been placed continues to be the most
trusted household care brand in the country in Brand Equity’s Most Trusted Brands
Survey 2012.

46
The company has an emerging presence in markets outside India. With the acquisition
of Keyline Brands in the UK, Rapidol and Kinky Group, South Africa and Godrej
Global Mideast FZE, Godrej owns international brands and trademarks in Europe,
Australia, Canada, Africa and the Middle East. Godrej has also recently acquired
Tura, a leading medicated brand in West Africa, Megasari Group, a leading household
care company in Indonesia and Issue Group and Argencos, two leading hair colorant
companies in Argentina.

TATA Global Beverages Ltd.- With Rs.6,000 crores as its market capitalization
TATA beverages are No.2 in Tea worldwide. It is a part of the Tata Group. With the
inception of TATA tea in 1983, there is no looking back. The company acquired the
Tetley group UK in 2000 and in 2010 TATA global beverages corporate announced
formation of Pepsi JV. Its famous brands are TATA tea, Tetley, Himalayan water,
Good earth.

Marico Ltd. - Marico is a leading Indian Group in Consumer Products and Services in
the Global Beauty and Wellness space. Marico’s Products and Services in Hair care,
Skin Care and Healthy Foods generated a turnover of about Rs. 26.6 billion during
2009-10. The company has a market capitalization of Rs.8,000 crores. Marico
markets well-known brands such as Parachute, Saffola, Sweekar, Hair and Care,
Nihar, Shanti, Mediker, Revive, Manjal, Kaya, Aromatic, Fragrance, HairCode,
Caivil, Code 10 and Black Chic. Marico’s brands and their extensions occupy
leadership positions with significant market shares in most categories- Coconut Oil,
Hair Oils, Post wash hair care, Anti-lice Treatment, Premium Refined Edible Oils,
niche Fabric Care etc. Marico is also present in the Skin Care Solutions segment
through Kaya Skin Clinics in India, Middle East and Bangladesh.

2.4 RURAL FMCG MARKET OF INDIA - OVERVIEW

The Rural FMCG Market of India is still unexplored and it provides tremendous
growth opportunities. The loan waiver announced in the Union Budget 2008, would
certainly facilitate further growth of the India agriculture sector.

The Rural FMCG Market of India is on the verge of registering substantial expansion
across the country. The Indian Rural FMCG market is mostly unorganized and it is
generally dominated by small time retailers. The organized FMCG market is only

47
confined to the urban areas of India. Rural India mostly depends on agriculture,
directly or indirectly for livelihood. Further, almost 70% of Indian population lives in
rural India in around 6,38,000 villages.

Rural India offers tremendous growth prospects for the FMCG industry. Facilitation
of better rural infrastructure like roads, telecommunication, electricity, supply chain,
and transportation would propel the growth of Rural FMCG Market of India. Further,
very low per capita consumption of FMCG also provide tremendous opportunity for
the growth of Rural FMCG markets in India18.

The FMCG sector, which offers tremendous growth prospects are Food and beverage
sector, health care and personal care. Presently, rural India accounts for 34% of total
FMCG consumption, but it accounts for more than 40% consumption in major FMCG
categories like as personal care, hot beverages, and fabric care.

The government of India new road map for the development of Indian agricultural
sector will facilitate growth of rural FMCG industry. The Government of India's latest
decision to waive-off loan (Union Budget 2008- 2009) to the tune of ` 60,000 crores
would help better crop production in India, which in turn would definitely help the
Indian Rural FMCG market grow to new heights.

The rural market is not homogeneous. The individual sections of this market are not
too big, although the overall size is large. There are Geographical, demographical,
statistical and logistical differences. Positioning and realities regarding the potential
of each of these market segments differ and lie at the very core of forming the strategy
for the rural markets. Gone are the days when rural consumer went to nearby city to
buy ‘branded products and services’. The rural consumer is growing and this is an
opportunity to grab the market share for all the global players in the market – whether
it is into Fast Moving Consumer Goods (FMCG) sector or retail sector (either
insurance or banking). Insurance sector has one of the biggest potential in the
upcoming scenario and the fact lies in the statement that only eight to ten percent of
the rural households are covered by life insurance.

18
Dogra Balram, Ghuman Karminder (2008), Rural Marketing: Concepts and Practices, Tata Mc
Graw Hill publishing company, New Delhi, Pg-16

48
Several companies trying to reach out to rural consumers are exploring alternative
cost effective channels. Direct selling through company delivery vans, syndicated
distribution between non-competitive marketers, setting up of temporary stalls in
rural melas / haats are few successful examples. Use of stockiest and their staff for
effecting direct sales to rural consumers have also been found to be successful by
companies like Hindustan Unilever/ITC/Colgate/Godrej. Rural markets/mandis are
emerging as the target centers for direct sales. BPCL introduced specially designed
Rural Marketing Vehicle, which moved from villages to villages to fill cylinders on
spot.

Another innovative distribution model that merits mention is the HLL’s Shakti
project, which connects Self-Help Groups (SHGs) with business opportunities.
Hindustan Lever promotes and uses the SHGs network present in the villages for
increasing its sales in the rural areas. The SHGs are offered chance to become
company’s local small scale distributor in the rural areas. The groups, typically of 15
to 20 people, buy a small stock of items such as soap, detergent or shampoo and then
sell directly to consumers in their homes.

Lower prices/smaller packaging has been the most common strategies adopted by
FMCG companies to penetrate rural markets. HLL initiated Operation Bharat to tap
rural market by rolling out low priced sample packets of its toothpaste, fairness
cream, shampoo, cream and other products. Similarly LPG companies have
introduced small sized cylinders ensuring that price remains in the affordable range
for its rural consumers. When developing products in any category, marketers must
identify the typical rural specific needs. Urban products cannot be dumped into rural
markets without modifications. The rural audience better receives tailor-made
products as the consumers feel empowered and tend to identify with the offering. For
instance, shampoos or soaps with distinctive, strong rose or jasmine perfumes are very
with the rural women in South India. The urban women do not identify as strongly
with these perfumes.

Every marketer must realize that the rural consumer is not a miser. He is not simply
looking for the cheapest product in every category. He understands and demands
value for money in every purchase that he makes. Pricing therefore is a direct function
of factors including cost-benefit advantage and opportunity cost. Pricing offered to

49
consumers should be for value offerings that are affordable. Price sensitivity is
extremely high and comparison with competitive prices is common.

It must be remembered that the rural consumer does not have a budget problem. He
has a cash flow problem. This is because the village folk receive funds only twice a
year. At these times, he is capable of making high volume purchases. At all times,
however, the unit price is critical and so is the pack size. Because of this, in the lean
season when there is a cash flow crunch, marketers need to provide financial
products, schemes or solutions that suit the needs of the rural population.

Different target segments require different marketing approach and rural market is no
exception to it. Experience suggests that mere extension of urban marketing strategies
in rural India will fail unless they are customized to the needs, ethos of rural India. In
the rural context, one of the best ways to capture the audience is through Event
Management. Since rural areas have limited venues for entertainment, conducting an
event in rural areas can bring a good response. Some of the interesting events that can
be conducted are Road Shows, Melas, Street Theatre, and Film Shows and so on.
Several Agrochemical companies such as Rallis India Limited, Wock-hard and tractor
companies like Escort, Mahindras have successfully employed melas, local
communication to get higher sales.

The classic conundrums of reach and coverage of the media are shattered several
creative communication media have been used by various companies to tackle the
problem of having to use visual communication and non-verbal communication to
reach the rural audience. This is required because a large proportion of the rural
population cannot read or write. Getting together with small industries, dharmasalas,
post offices or other rural outlets for advertising and marketing purposes can be quite
useful. Word of mouth is a big advantage in rural India.

Rural Marketing is an evolving concept, and as a part of any economy has untapped
potential; marketers have realized the opportunity recently. Improvement in
infrastructure and reach promise a bright future for those intending to go rural. Any
macro-level strategy for these markets should focus on availability, accessibility and
affordability. Constant scanning and sieving of ideas and plans is essential at all
times. Focused attention needs to be paid to market research that goes on to reduce the
uncertainly in dealing with these markets. More specifically, in relation to rural areas,

50
demand is seen to a very highly price elastic. To break the price barrier is essential.
Only this can keep the grey area local brands in check.

There is no doubt that divides do exist between urban India and Rural Bharat.
However, with a silent revolution that has already begun, a seamless integration of
rural and urban markets is underway. Once this happens the gulf that divides the two
markets will become bridges. For this, change needs to be engaged and managed. The
overall marketing mix framework for rural markets must therefore focus around
plugging the segments with the right product, using value for money pricing, selecting
the most appropriate channel of distribution, building long term relationships with the
customers and finally, using the power of emotional brands.

The FMCG market is set to treble from US$ 11.6 billion in 2003 to US$ 33.4 billion
in 2015. Penetration level as well as per capita consumption in most product
categories like jams, toothpaste, hair oil, skin care, hair wash etc. in India is low
indicating the untapped market potential. Burgeoning Indian population, particularly
the middle class and the rural segments, presents an opportunity to makers of branded
products to convert consumers to branded products. Growth is also likely to come
from consumer 'upgrading' in the matured product categories. With 200 million
people expected to shift to processed and packaged food by 2010, India needs around
US$ 28 billion of investment in the food-processing industry (Bansal, 2009).

Organizations like Hindustan Lever Ltd., Nirma Chemical Works, Colgate Palmolive,
Parle foods and Malhotra Marketing have carved inroads into the heart of rural
markets. Various categories of products have been able to spread their tentacles deep
into the rural market and achieved significant recognition in the country households.
And, in the process, the regional brands, local brands and the other unbranded
offerings got displaced by the leading brands.

Table: 2.9
Household Penetration of Different Companies (India)

Company Household penetration

HUL 88%
Nirma Chemical Works 56%
Colgate Palmolive 33%
Parle Foods 31%
Source: ‘Rural Marketing: Strategies’, T.P. Gopalswamy

51
 Table: 2.10
Percentage Volume of Local Brands

Category % volume of local brands

Washing cakes/bars 88%
Tea 56%
Salt 33%

Source: ‘Rural Marketing: Strategies’, T.P.Gopalswamy

Of the expenditure on consumer goods in rural household, approximately, 44% is on

food articles such as biscuits, tea, coffee and salt, 20% on toiletries, 13% on washing
material, 10% on cosmetics, 4% on OTC products and 9% on other consumables. A
number of category products have established themselves firmly in the rural
households. It is evident that in the villages low-priced brands are well accepted and
one might feel that a larger proportion of the purchases made in rural market can be
attributed to local/unbranded players. Surprisingly, however, the unbranded/local
component contributes to a substantial portion of the volume of only a few of the
highly penetrated categories.

Table: 2.11
Segment Wise Penetration of Brands Categorically

Category Category Penetration Brand with highest Penetration

Toilet Soap 91% Lifebuoy
Washing cakes/Bars 88% Wheel
Edible oil 84% Double Iran mustard
Tea 77% Lipton Taaza
Washing powder / liquid 70% Nirma
Salt 64% Tata Salt
Biscuits 61% Parle G
Source: ‘Rural Marketing: Strategies’, T.P. Gopalswamy

Retail In Rural India

Retailers are increasingly eyeing hinterlands to give a boost to their revenue and sales.
They are not only exploring new markets, but are even ready to alter their businesses
and products to suit the rural population of India. Identifying the 700 million-people-
strong rural India as a 'huge opportunity', global beverages major Coca-Cola has

52
decided to alter its business to suit the preferences of people residing in rural areas.
The company would work on packaging, pricing, accessibility and availability of the
products to achieve the stated target.

The Kishore Biyani-led Future Group has stated that it will launch a rural wholesale
and distribution business under the 'Aadhar' brand. The company already operates a
retail chain under this brand. India's largest retailer would spend up to (US$ 19.76
million) over 2011-14 to build 65 'Aadhar Wholesale' outlets across India and expects
the business to generate revenues of (US$ 790.3 million) by the end of 2014.

Fast Moving Consumer Goods in Rural India:

Higher disposable income in the hands of rural households along with massive
advertisements by the market players, would take rural FMCG market from current
(US$ 17.37 billion) to a market size of over (US$ 21 billion) by 2012, according to a
study by a leading industry body. This entails a compounded annual growth rate
(CAGR) of 10 per cent in totality for rural and semi-urban areas.

FMCG players like HUL and ITC have already established their foothold in
hinterlands. A recent study has revealed that lesser developed eastern states such as
Bihar, Orissa, Chhattisgarh and Assam are leading rural sales in India. The analysis
has strengthened the fact that rural markets are driving consumption of FMCG. In
these eastern states, the rural FMCG sales to the total, accounts for more than 50 per
cent, whereas states like Punjab contribute 40 per cent.19

• Automobiles

Rural India has been the propeller for automobile companies, especially in the two
wheeler segment. The two-wheeler market derives about 45-50 per cent of its sales
from the rural market. Hero Moto Corp has recently stated that sales (in its two-
wheeler segment) from rural areas have increased from 38 per cent in 2009 to over 46
per cent currently. Also, as part of its initiative to emancipate the poor, Hero Cycles
may soon tie-up with insurance firms to provide health cover to its rural customers.
The company is contemplating over the provision under which it would pay health
insurance premium for the poor customers on purchase of its bicycles.

19
FMCG Markets to Contribute in Indian Rural Economy Perspective in Global era, by Suresh
Bhagwat and Sahebrao Chavan, Vision Research Review Vol-I, Issue-I June 2011 to Nov 2011, ISSN
2250-169X, retrieved on 03/05/2014

53
• Consumer Durables

India's consumer durables market is anticipated to expand by 40 per cent in 2011-12,

according to a study 'Rise of Consumer Durables in Rural India'. With an intention to
empower rural India with better lighting solution, Luminous Power Technologies
Limited has launched light emitting diode (LED)-based Solar Lighting Solution that
would be a low cost option for rural home lighting requirements. Luminous Power
Technologies Limited is a provider of power backup solutions for home, commercial,
telecom towers and renewable energy systems.

• Internet

The total number of active internet users in rural areas is projected to rise by 98
percent to touch 24 million by December 2011 from 12.1 million in December 2010,
according to a research study, titled 'Internet in Rural India', by Internet and Mobile
Association of India (IAMAI) and IMRB International. Rural India, along with tier-II
and tier-III towns, is also catching up with the urban population in e-commerce. The
fourth edition of e-bay census has revealed that women in these areas are increasingly
becoming net-savvy to purchase lifestyle and electronics products online. It also
stated that online trading, through eBay, in rural India has jumped up to 9 per cent of
total sales in 2011 from 5 per cent in 2010.

• Services
Services sector is anticipating big boost from the rural India in the years to come. For
instance, a report titled 'Gateway to the defining decade' by McKinsey expects rural
and semi-urban regions to generate (US$ 15.41 billion) in revenue by 2015 for the
banking industry. Certain other developments relating to services in hinterlands are as
under-

1. HUL's management has approved an alliance with Tata Teleservices and Tata
Teleservices (Maharashtra) for distribution of telecom products. The latter intends
to leverage the HUL's deeply entrenched distribution network in rural markets in
India.

2. Similarly, drug-makers Ranbaxy Laboratories and Pfizer have tied up with ITC
for distributing their over-the-counter (OTC) products across 6,500 e-Choupal
centres spread across 40,000 Indian villages. E-Choupal is an ITC initiative that

54
 helps rural farmers procure agricultural and aqua-cultural products directly
through the internet.

3. State Bank of India (SBI) has also partnered with both HUL and ITC, to endorse
financial inclusion among rural Indians.

4. With an aim to strengthen its distribution network and reach out to the rural
masses across India, Max Bupa Health Insurance Company Ltd is in talks with
regional rural banks, co-operative banks and post offices to distribute its health
insurance products. The company, major relying on the model of 'Bancassurance',
is in talks with Insurance Regulatory and Development Authority (IRDA) for the
same.

The Profile of Rural Demand

Modern cultivation practices have increased the yield of crops. Favorable trade terms
for agricultural produce have led to rise in agricultural income. A higher income (tax
exempted) makes a family with moderate income wealthy in relation to its urban
counterpart. Low cost of living in rural areas creates a higher disposable income with
rural consumer. Expansion of TV network and developments in packaging has
exposed the rural population to a variety of consumer goods.

1) Size of Rural demand: It has been estimated that the size of the rural market for
food and non-food items including agricultural inputs is about Rs. 1,00,000 crores
and the rural markets are growing at five times the rate of urban markets.

2) Composition of Rural demand: The composition of demand for products and

services is changing in rural areas as per details given below:

a) Products that are well established in rural market: Examples: Bicycles, motor-
cycles, agricultural inputs and machinery such as fertilizers, pesticides, seeds,
tractors and farm implements, radios, non-alcoholic beverages such as coffee, tea,
tobacco products, cooking utensils, bathing and washing soaps and textiles.
b) Products that have entered the rural market in recent years: Examples: Readymade
garments, baby care products, packaged foodstuffs, modern consumer durables,
cosmetics and toiletries.
c) Products where the rural consumption is more than urban: Examples: Bicycles,
mechanical watches, tailoring machines.

55
d) Products where rural consumption growth rate is higher than urban markets:
Examples: Packaged tea, bathing and washing cake

Profile of Rural Consumer

The rural markets are scattered and also the consumers. There are barriers of religion,
caste, income, language and culture. The features of rural consumers are given below:

1) Buying Decisions: Rural consumers are cautious in buying goods and services.
They check and re-check the prices of new products. They have lot of free time
and therefore decision-making is slow and delayed.

2) Cultural Factors: Culture is a system of shared values, beliefs, and perceptions

that influence the behavior of consumers. There are different groups based on
religion, caste, occupation, income, age, education and each group exert influence
on the behavior of the people in the village.

3) Traditional Life: In villages, life is governed by customs and traditions. They do

not adopt new practices. Even rich people do not go for branded shoes/shirts and
modern cars.

4) Traditional Occupation: They follow traditional occupation. In most cases,

children of farmers continue to do farming and they follow traditional methods of
cultivation.

5) Traditional Belief: There is belief among rural people that experience is more
important than education. Very often people depend on fate than any other thing.
People still believe that certain diseases such as jaundice and chicken pox can be
cured by mantras and tantras.

6) Family Values: Great stress is laid on fulfillment of the family obligations and
responsibilities and the family influences needs and wants of individual members.
Joint families are more important in rural areas than urban areas

7) Rural Income: Rural income level is less than urban level. 60% of rural income is
from agriculture and income from agriculture depends upon monsoon. Therefore
rural income is seasonal.

56
8) Festivals and Functions: They are celebrated on a grand scale in villages. Most
of the purchases may be done during festivals like Onam, Pangal, Diwali, Eid,
Gudi Padwa etc.

9) Low Level of Education: Due to low level of literacy, their exposure to print
media and awareness and knowledge about technological changes is very low.
The marketer has to make use of rural specific media and methods to reach rural
population.

10) Influence of banks: Growth of commercial as well as cooperative banks have

instilled saving habits in rural consumers.

Rural Market Environment

Untapped Potential: Rural markets offer a great potential for marketing branded
goods and services for two reasons:

The large number of consumers. A pointer to this is the larger volume of sales of
certain products in rural areas as compared to the sales of the same products in
urban areas.

Largely untapped markets. The penetration levels for many products are low in
rural areas.

Market Size and Penetration: The estimated size of India’s rural market stated as
the percentage of world population is 12.2 percent. This means 12.2 percent of the
world’s consumers live in rural India. In numbers, this works out to about 120 million
households. In India, the rural households form about 72 percent of the total
households. This is a huge market by world standards.

Rural consumers own only 52 percent of available consumer durables, even though
they form 72 percent of the total households in India. On an average, rural household
own three consumer durables as compared to seven consumer durables owned by an
average urban household (NCAER, 1998).

The gap clearly indicates the untapped potential among the large number of rural
households.

Increasing Income and Purchasing Power: The agricultural development programs

of the government have helped to increase income in the agricultural sector. These in
turn have created greater purchasing power in rural markets. Households in the lower

57
income group have reduced while there is a strong growth in the number of
households in upper middle and higher income households.

Accessibility of Markets: The attraction of a market depends not only on its potential
but also on its accessibility. A market that cannot be exploited is a case of “sour
grapes”. Development of infrastructural facilities and marketing institutions has
increased the accessibility of these markets.

The road network has facilitated a systemized product distribution system to villages.
In the past, companies relied on a ‘trickle down’ of stocks to the buyer in interior
villages that resulted from the active participation of channel members. In this system,
the village retailer made fortnightly purchase visits to a bigger retailer in the nearest
tehsil (sub-division of a district) level town. The large retailer in the tehsil town
procures goods from district headquarters. The district headquarters were therefore
the terminal point of the company distribution channel.

Today, an increasing number of companies are supplying village markets directly.

Increasing direct contacts to villages helps product promotion and availability of the
product in the village shop. Marketers of durable goods use direct contacts as a means
to promote and attract rural consumers to dealer points in large feeder villages or
towns. Feeder villages or towns are locations from where a large number of interior
villages get their products. Delivery cum-promotion vans traversing 8 to 10 villages a
day and covering Haats or Mandis, is the widely used method of direct control in
rural areas20.

Competition in Urban Markets: Intensified competition in urban markets increases

costs and reduces market share. The rural markets are therefore increasingly attractive
in relation to urban markets. The automobile market brings this out clearly. Rajdoot
motorcycles, Bajaj scooters or Ambassador Cars find ready acceptance in rural
markets as compared to urban markets where there is a proliferation of brands21.

Consumer Behavior Changes: Increased literacy and greater awareness in rural

markets create new demands and discriminating buyers. This is observed more in the
younger generation. In villages today, this segment of buyers consumes a large variety

20
Pelle Stefano,(2013,) ‘When not in Rome, Don’t do as the Romans do’: A Candy D Italian in
Emerging Markets, Sage Publications India, p-82
21
Panda Kumar Tapan, (2006), ‘Contemporary Marketing: The Changing Face of Marketing in 21st
Century’, p-147, ICFAI.

58
of products, both durables and non-durables. There is a visible increase in the
consumption and use of a variety of products, which is easily observed. The younger
generations appears to seek variety and are more discriminating buyers. The young
adult in a village likes to sport a fashionable watch. The preferred brand of toilet soap
for the youth is not necessarily Lifebuoy, the brand preferred by the elders22.

Major Factors Contributing To the Growth of Rural Markets

A number of factors have contributed to the growth and development of rural markets
and the major ones are:

1) Favorable Government Policies: The Government has taken the initiative for
economic development of rural areas and through five year plans have invested
heavily in development of agriculture, animal husbandry, irrigation, electricity,
dairy, and khadi and village industries. Some of the important programmes are: a)
Integrated rural development programme, b) Marginal farmers and agricultural
labors development programme, c) Drought prone area programme, d) Small
farmers’ development agency, and e) Intensive agricultural development
programme. These initiatives have helped in increasing income and purchasing
power of rural people. Examples: Providing Irrigation facilities through canals,
power supply to farms at concessional rates, financial facilities for farmers
through banks for farm operations and land development, subsidies for agriculture
inputs/machinery, development of poultry and dairy, development of industries
like ginning and paddy processing plants and development of facilities such as
hospitals, schools, banks, roads, radio, TV etc.

2) Agricultural education and research: Establishment of agricultural colleges and

research stations has ensured availability of technical manpower and technological
developments in agriculture.

3) The Green revolution: during late 60s and early 70s focused on increasing, the
yield of crops through modern cultivation practices. Use of high yielding varieties
of seeds increase in use of fertilizers and modern pest management practices have
resulted in higher yields. From a food deficit nation in mid 60s, our country
became self sufficient in food production in 1971 and we are now exporting

22
Sarangpani A.(2009), ‘ A textbook on Rural Consumer behavior in India’-A study of FMCG’s,
Laxmi Publications, p-32

59
 agricultural produce to other countries. There has been an increase in disposable
income of rural people.

4) Private initiatives: Private agencies have contributed to growth and development

of agriculture through village level educational programmes for the benefit of
farmers and supply of high yielding varieties of seeds, fertilizers, and plant
protection chemicals. Companies like HUL and Colgate have carried out
development activities and have been able to establish their products in rural
areas.

5) Rising aspirations of rural people and attraction for high standard of living: The
rise in income coupled with increased awareness and the need for possessing
modern goods have influenced the rural marketing environment in our country.
The mobility towards higher income group has in fact been much higher in rural
areas than urban. This provides tremendous opportunities for marketing modern
goods and services in rural areas.

6) Literacy level: It has been estimated that the rural literacy level is 36% compared
to 62% in urban areas. Literacy is one of the important factors in developing
awareness and knowledge about technological changes. As many as 16 major
languages are spoken adding to the complexities in rural communication.

7) Higher level of education: Literacy level as well as percentage of people opting

for higher education has also increased. This has changed the consumption
pattern. Example: growth in consumer durables like home computers, fridge, air
conditioner etc.

8) Growth in income: The average income level has improved due to modern
farming practices, Industrialization of rural area, migration of rural people into
cities and remittance of their money, remittance of money by family members
settled abroad and higher income through contractual farming. Example:
McDonald's is making handsome payments to the contractual lettuce growers.

2.5 THE PROBLEM AREAS IN RURAL MARKETING:

Where the rural market does offer a vast untapped potential, it should also be
recognized that it is not that easy to operate in rural market because of several
attendant problems. Rural marketing is thus a time consuming affair and requires

60
considerable investments in terms of evolving appropriate strategies with a view to
tackle the problems.

Underdeveloped People and Underdeveloped Markets: The number of people

below poverty line has not decreased in any appreciable manner. Thus
underdeveloped people and consequently underdeveloped market by and large
characterize the rural markets. Vast majorities of the rural people are tradition bound,
fatalistic and believe in old customs, traditions, habits, taboos and practices.

Vastness and Uneven Spread: The number of villages in India is more than 6 lacs.
Again, the villages are not uniform in size. Nearly 50% of the villages have a
population of less than 500 persons which account for 20% of the rural population.
This type of distribution of population warrants appropriate strategies to decide the
extent of coverage of rural market.

Lack of Proper Physical Communication Facilities: Nearly fifty percent of the

villages in the country do not have all weather roads. Physical communication of
these villages is highly expensive. Even today most villages in the eastern parts of the
country are inaccessible during the monsoon. Moreover, 3, 00,000 villages in the
country have no access to telephones. Local telecom companies are working with the
Department of Telecommunications (DOT) to provide service in rural areas at local
costs which could be a costly affair considering the underdeveloped infrastructure.

Low Growth Rate: The slowdown in the economy is of serious concern to everyone
in Government, industry and every other sector of the economy. Our GDP growth
target for the Tenth Plan is 7.7%, rising to 8.1% in the subsequent one. Today we are
at a 6% level, which is itself below the current Plan. Even more worrying is the fact
that our growth rate has been trending down for the last 3 years. The sectoral
components of this slowdown are very telling. Agricultural growth has dropped to
0.9% from an average of 3.9% in the 1980's and 3.3% in the 90's. Industrial growth
too has slowed to below 6% from 6.6% in the last decade. We believe there is an
urgent need to lift overall GDP growth sustainable by addressing a central issue - the
slowdown in rural incomes.

Low Per Capita Income: Even though about 33-35% of gross domestic product is
generated in the rural areas it is shared by 74% of the population. Hence the per
capita incomes are low compared to the urban areas. High costs in finance is a

61
stumbling block while higher purchase is unheard of, the small town culture works
against financing of products. The sprawling unorganized market offers prices that the
organized industry finds difficult to match. Many existing product lines continue to be
too expensive or irrelevant.

Many Languages and Dialects: The number of languages and dialects vary widely
from state to state, region to region and probably from district to district. Messages
have to deliver in local languages and dialects. Even though the number of recognized
languages is only 16, the dialects are estimated to be around 850.

Low levels of Literacy: Literacy rate is low in rural areas as compared to urban areas.
This again leads to problem of communication. Print medium becomes ineffective and
to an extent irrelevant in rural areas since its reach is poor.

Different way of Thinking: There is a vast difference in the lifestyles of the people.
The rural customer usually has 2 or 3 brands to choose from whereas the urban one
has many more choices. The rural customer has fairly simple thinking as compared to
his urban counterpart. Life in rural areas is still governed by customs and traditions
and people do not easily adopt new practices.

Transport: Many rural areas are not connected by rail transport. Around 68% of the
rural roads have been poorly surfaced, and many are totally destroyed or severely
damaged by the monsoon and remain unserviceable leaving interior villages isolated.
Though it would be desirable to connect all villages by all-weather roads, use of
bullock carts is inevitable for many years.

Distribution Problem: Rural markets typically signify complex logistical challenges

that directly translate into high distribution cost. Coupled with relatively slower
growth of incremental demand and lack of adequate institutional mechanism for retail
operations, margins are squeezed to the utmost. Infrastructure also poses a major
problem when a marketer thinks of targeting the rural markets.

Market Organization and Staff: The size of the market organization and staff is
very important, to have an effective control. Comparatively, catering to rural market
will involve large marketing organization and staff. Most of the manufacturers cannot
effort huge investments in terms of personnel and also keep an effective control on it.

Media for Rural Communication: Among the mass media at some point of time in
the late 50's and 60's radio was considered to be a potential medium for
62
communication to the rural people. Another mass media is television and cinemas it
has been observed that cinema viewing habits in rural areas is very satisfactory were
ever available. Again statistics indicate that the rural areas account for hardly 2000 to
3500 mobile theatres, which is far less when compared to the number of villages.

Types of Rural Market

Various companies and organization, dissect rural market as per the nature and the
sector of the business they are in. Broadly, for convenience of administration, rural
market could be classified as –

Weekly bazaars/ Haats.

Occasional markets like melas ( Pushkar mela etc. ).

Rural Conventional Markets.

Mandies/ A.P.M.C for Agro products.

Specific Regional Markets.

Door to door market (ferry).

Go rural' is the slogan of marketing gurus after analyzing the socio-economic changes
in villages. The Rural population is nearly three times the urban, so that Rural
consumers have become the prime target market for consumer durable and non-
durable products, food, construction, electrical, electronics, automobiles, banks,
insurance companies and other sectors besides hundred per cent of agri-input products
such as seeds, fertilizers, pesticides and farm machinery. The Indian rural market
today accounts for only about Rs 8 billion of the total ad pie of Rs 120 billion, thus
claiming 6.6 per cent of the total share. So clearly there seems to be a long way ahead.
Although a lot is spoken about the immense potential of the unexplored rural market,
advertisers and companies find it easier to vie for a share of the already divided urban
pie.

The success of a brand in the Indian rural market is as unpredictable as rain. It has
always been difficult to gauge the rural market. Many brands, which should have been
successful, have failed miserably. More often than not, people attribute rural market
success to luck. Therefore, marketers need to understand the social dynamics and
attitude variations within each village though nationally it follows a consistent pattern
looking at the challenges and the opportunities which rural markets offer to the

63
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.

What Rural Market Buys?

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

Why Rural Market?

The Indian rural market has a huge demand base and offers great opportunities to
marketers. Two-thirds of Indian consumers live in rural areas and almost half of the
national income is generated here. The reasons for heading into the rural areas are
fairly clear. The urban consumer durable market for products like color TVs, washing
machines, refrigerators and air conditioners is growing annually at between 7 per cent
and 10 per cent. The rural market is zooming ahead at around 25 per cent annually.

Reasons For Improvement Of Business In Rural Area

 Socio-economic changes (lifestyle, habits and tastes, economic status);
 Literacy level (25% before independence – more than 65% in 2001);
 Infrastructure facilities (roads, electricity, media);
 Increase in income;
 Increase in expectations

MART, the specialist rural marketing and rural development consultancy has found
that 53 per cent of FMCG sales lie in the rural areas, as do 59 per cent of consumer
durable sales, said its head Pradeep Kashyap at the seminar. Of two million BSNL
mobile connections, 50 per cent went to small towns and villages, of 20 million

64
rediffmail subscriptions, 60 per cent came from small towns, so did half the
transactions on Rediff's shopping site.

Special Features Of Rural Market

Unlike urban markets, rural markets are difficult to predict and possess special
characteristics. The featured population is predominantly illiterate, have low income,
characterized by irregular income, lack of monthly income and flow of income
fluctuating with the monsoon winds.

Rural markets face the critical issues of Distribution, Understanding the rural
consumer, Communication and Poor infrastructure. The marketer has to strengthen
the distribution and pricing strategies. The rural consumer expects value for money
and owing to has unsteady and meager status of weekly income; increasing the
household income and improving distribution are the viable strategies that have to be
adapted to tap the immense potential of the market.

Media reach is a strong reason for the penetration of goods like cosmetics, mobile
phones, etc., which are only used by the urban people. Increasing awareness and
knowledge on different products and brands accelerate the demand. The rural
audience are however critical of glamorous ads on TV, and depend on the opinion
leaders who introduce the product by using it and recommending it.

Opinion leaders play a key role in popularizing products and influence in rural
market. Nowadays educated youth of rural also influences the rural consumers. Rural
consumers are influenced by the life style they watch on television sets. Their less
exposure to outside world makes them innocent and fascinated to novelties. The reach
of mass television media, especially television has influenced the buying behavior
greatly.

Consumer Space in Rural Markets

The rural urban divide is getting blurred with the faster economic growth and rising
awareness of consumer goods because of TV Exposure. So, the companies are now
shifting their focus from the saturated urban market to the untapped potential rural
market. The chief reason behind this is the increase in the disposable income of
individual in rural areas.

65
Reasons
Two thirds of the country’s 1200 million consumers live in rural India, where almost
half of the national income is generated. A survey by Techno pack Consultant and
Confederation of Indian Industries estimates that the country’s rural consumer market
generated $425 billion of revenue, up from previous year. The big reason for the
growth is India’s rural consumers increasing spending power.

The rural consumer today has more money in their pockets due to rising commodity
prices, employment generation schemes and sops announced by the Government. For
example: the allocation for national Rural Employment Guarantee Act (NREGA- A
job guarantee that ensures one hundred days employment in every financial year)in
the Union Budget increased from Rs. 240 billion in FY 2009 to Rs. 410 billion in FY
2011. The social sector is pegged at Rs. 1,380 billion which experts believe would
boost rural disposable income hence rural demand.

It is reported that the sales of FMCG companies in the rural market have grown from
a mere one percent in 2005 to 18 percent in 2009, while on the other hand sales of
FMCG companies in urban markets have fallen from around nine percent in 2005 to
11 percent in 2009. Thus pace of growth has become one of the compelling reasons
for these companies in the consumer space to look at the rural market with renewed
vigor and enthusiasm

66
REFERENCES:

1
http://www.taraqram.com/ruralmarketing
2
NCAER Report, 2011
3
CMIA Report, 1997
4
as quoted in, “ Rural marketing In India: Some opportunities and challenges”, by
Anil Kumar S, International Journal of Exclusive Management Research” Vol-1,
Issue-1,2011 and also in ‘Prospects and Problems of Indian Rural Markets’, by
V.V Deviprasad, Kohli, Published in Zenith International Journal of Business
economics and management research, Vol-II, Issue-3, March 2012. ISSN
22498826.
5
Dogra Balram, Ghuman Karminder(2008), ‘Rural Marketing: concepts and
Practices’, Tata Mc Graw Hill Publishing Company, New Delhi, P-8
6
Hundekar S. G. (1995), ‘Management of Rural Sector’, Mittal Publications, p-164
7
Ganesh Usha (2009), ‘Retailing in Rural India-Markets and Opportunities’, Chili
breeze Publication, p-3
8
As quoted in Accenture’s report, the NSSO data, 2012
9
As quoted in Accenture’s report, 2010.
10
Vashisht Kujnish,(2005), ‘A Practical Approach to Marketing Management’,
Atlantic Publishers, p-373
11
Accenture’s survey on Rural Marketers.
12
Data obtained from TRAI and reported by MART in its research titled “Rural
Growth Story” March by 2012.
13
ABHINAV, National Monthly Journal of Research in Commerce and Management,
Vol-1, Issue No-04, ISSN-2277.1166, p-48 (Website: www.abhinavjournal.com)
14
Dogra Balram, Ghuman Karminder(2008), ‘Rural Marketing: Concepts and
Practices’, Tata Mc Graw Hill Publishing Company, New Delhi, p-16
15
‘FMCG Markets to Contribute in Indian Rural Economy Perspective in Global
Era’, by Suresh Bhagwat and Sahebrao Chavan, Vision Research Review Vol-I,
Issue-I June 2011 to Nov 2011, ISSN 2250-169X, retrieved on 03/05/2014

67
16
Pelle Stefano, (2013) ‘When Not in Rome, Don’t do as the Romans Do’, A Candy
D, ‘Italian in Emerging Markets’, Sage Publications India, p-82
17
Panda Kumar Tapan, (2006) Contemporary Marketing: The Changing face of
Marketing in 21st Century p-147, ICFAI.
18
Sarangpani A, (2009), ‘A textbook on Rural Consumer Behavior in India’-A study
of FMCG’s, Laxmi Publications p-32

68
“Village life must not become a copy of appendage of city life. The cities have to
adopt the pattern of village life and subsist for the villages.”
-Mahatma Gandhi

Chapter- 3
PROFILE OF THE
UNIVERSE
 PROFILE OF THE UNIVERSE

Uttarakhand is situated between latitudes of 28o 43' – 31o 27' N and longitudes of 77o
34' – 81o 02' E. In the North West Uttarakhand is separated from Himanchal Pradesh
by the river Tons and in the east the river Kali separates it from Nepal. The Greater
Himalayas form the northern boundary of the State. Uttarakhand shares an
international border with China (Tibet). Foot-hills, in the south are adjoined by Uttar
Pradesh. Starting from the foot hills in the south, the State extends up to the snow-
clad peaks of Himadri making the Indo-Tibetan boundary. Uttarakhand became the
27th state of the Republic of India on 9th November 2000.Uttarakhand is known the
rich tradition of knowledge and it is believed that many great sages of ancient India
wrote the classical texts in this region. 23

Source: http:mapsofindia.com

Figure: 3

23
‘Uttarakhand Economy, at a glance’, State domestic product and other aggregates (2004-05 series).
Ministry of Statistics and Program Implementation, 1st August 2012, Retrieved on 3rd August, 2012.

69
3.1: PROFILE OF UTTARAKHAND

Table: 3.1
‐Economic Indicators
Summary of Socio‐

State Capital Dehradun

Area (Sq. km) 53,483 Sq KM
Population (Census 2011) 1.01 Crore
Population Density(Sq. Km) Census 2011 189
No. of Districts 13
Important Rivers Ganga and Yamuna
Mountains The Great Himalayas
GSDP at Current Prices (2011‐12) 60898 crore 40,159 crore
Growth of GSDP at Constant Prices
8.67%
(FY-08‐09)
Per capita Income GSDP (2011‐12) Rs. 82, 193/-
24
Fiscal Deficit (FY12) 3.18% of GSDP
Poverty (FY2004‐05) 39.60%
National Highway length (2009‐10) 1375 Kms.
Rail Length (2005‐06) 345 Kms.
Domestic Airport Dehradun, Pant Nagar
Govt.. Medical Institutions (2009‐10) 3236
Per Capita Health Expenditure (2004‐05) Rs. 818
Literacy Rate (2011 Census)25 79.6%
Sex Ratio (2011 Census) 963
Tourism, Agro and food processing
Key Industries
and hydropower
IT, ITES, Biotechnology, Pharmaceuticals
Prospective Industries
and Automobile
Main Industrial Cities Haridwar, Pantnagar, Sitarganj and Dehradun
Investment environment 2nd rank
Composite ranking of the state 11th rank
Agriculture 11th rank
Macro economy 12th rank
Labour laws (2009) 15th rank
Infrastructure 18th rank
Source: PHD Research Bureau, Compiled from Directorate of Economics and Statistics Uttarakhand,RBI, Economic Survey of
India 2010, India Today, 29th Nov 2010, an article by Laveesh Bhandari, Bibek Debroy and Swaminathan Aiyar, Economic Free
dom of the States of India 2011, (Annual Report to People on Health 2010).

24
Advance Estimates- 2011-12
25
Literacy rate for Population aged 7 years and above

70
Having completed about 14 years as a separate state, Uttarakhand is now poised to
embark on a new era of rapid and inclusive growth and all round development with
the following major characteristics:

Divisions : Two; Kumaun and Garhwal.

Districts : 13; Almora, Bageshwar, Nainital, Udhamsinghnagar,

Champawat and Pithoragarh (6 Districts in Kumaun
Division)
Uttarkashi, Chamoli, Rudraprayag, Tehri Garhwal,
Dehradun, Haridwar and Pauri ( 7 in Garhwal Region)

These 13 districts contain 78 Tehsils, 95 Development Blocks and 16793 revenue

villages in its administrative set-up. 65% of the total area i.e. 34651 sq km of the State
is under forest with 12 protected zones in an area of 6479 sq. km.26

Land & Population:

The State is strategically located and it forms part of the northern boundary of the
country. It is spread over 53483 sq. kms. of land which is 1.69 percent of country’s
total Area. The population of the state according to 2011 census was 10.11 million of
which 5.54 million were males and 4.93 million were females. The decadal growth
rate of population is 19.17% (All India-17.64%). The sex-ratio in Uttarakhand stands
at 963 females per 1000 males. The density of population is 189 persons per sq. km
(All India-382). However the spread of population is fairly uneven, e.g., the district of
Haridwar and Dehradun together account for roughly 36% of the State’s population,
whereas district Champawat accounts for only 2.56%.27

The average annual rainfall, as per record is 1,547 mm. With an altitudinal variation
ranging from 200m to more than 8,000m above the mean sea level, the climate of the
State is quite harsh particularly in winters when temperature goes occasionally below
the freezing point in many of the subdivisions. The two divisions of Kumaon and
Garhwal have a geographical area of about 53,485 sq. km. it supports a human
population of 1, 01, 16,752 (Census 2011) persons. There are 13 districts, viz.,
Dehradun, Uttarkashi, Chamoli, Dehradun, Pauti Garhwal, Tehri Garhwal,

26
Directorate of Economics and Statistics, 100/06 Neshvilla Road, Dehradun
27
Census of India-2011 (Press release- Directorate of census, Uttarakhand)

71
Rudraprayag, Haridwar (in Garhwal Division), Almora, Pithoragarh, Nainital,
Bageshwar, Champawat and Udham Singh Nagar (in Kumaon Division). It is further
divided into 46 Tehsils, 73 towns, and 95 development blocks, 7541 gram sabhas, and
671 Nyaya Panchayats and 16826 inhabited villages28. The population constitutes
0.83% and 21.40% of the total population of the country and of the Indian Himalayan
Region (IHR), respectively. The State comprises five lithotectonically and
physiographically distinct sub-divisions viz., the Outer Himalayas comprising Tarai
and Bhabar, Sub-Himalayan belt-2 of the Shiwalik, the Lesser Himalayas, the Great
Himalayas and the Trans-Himalayas or Tethys. Human habitation is found up to an
altitude of 3500 m above mean sea level (msl). However, the zone between 1200 -
2000 m, largely falling in the Lesser Himalayas (1500 – 2500 meter above mean sea
level), is densely populated. The decennial growth rate of the population of the state
for the decade 2001-2011 was 19.17%29 in this region, the human population is
continually increasing and the region is experiencing major difficulties in sustaining
its growing population on its squeezing environmental resources, i.e., availability of
land, forests, and grasslands, water resources, etc. Much of the environmental
degradation of resources is governed by mountainous specificities, viz.,
inaccessibility, fragility, marginality, diversity (heterogeneity), niche (natural
suitability) and adaptability (human adaptation) apart from the growing population.
These result in limited external linkages and replication of external experiences, slow
pace of development, intra-regional imbalances and under-utilization of regional
potential.

Table: 3.2
Altitude Zones of the State*

Altitudinal Zone Percentage of Area

Below 1000 meters 26.00
1000 to 2000 meters 33.00
2000 to 3000 meters 13.00
Above 3000 meters 28.00
100.00

* Source http://www.phdcci.in/admin/userfiles/file/Research-Bureau/Uttarakhand.pdf

28
CII, (Confederation of Indian Industry), Report supported by Birla Institute of Management and
Technology, Greater Noida. PP. 10-13
29
Directorate of Census, (2011) Uttarakhand, Govt. of India, Home Ministry, Dehradun

72
The State has a large altitudinal variation which ranges from 200 msl to more than
8000 msl. The state contains 5 lithotechtonically and physiographically distinct sub-
divisions, the extreme Himalayas consist of Tarai and Bhabar, and the Sub-
Himalayan Belt of the Shiwalik, the Lesser Himalayas, the Great and the Trans-
Himalayas. Human habitation is normally found only up 3500 msl; the most densely
populated altitudinal range is 1200-2000 msl, which falls in the Lesser Himalayas.
The population of the State is continuously increasing and the decennial growth rate is
19.17%. Currently the State is facing major difficulties is sustaining its ever
increasing population on its squeezing environmental resources, availability of land,
forests, water-resources etc. It has resulted in small linkages and replication of
external experiences and slows the development progress, intra-regional imbalances
and under-utilization of State’s potential.

The main occupation of State’s population is agriculture; (approx 70% of the

population is earning its livelihood directly or indirectly from agricultural and allied
activities). The contribution of the secondary or tertiary sectors in livelihood is very
low. Though, 70% of the population is engaged in agriculture but the contribution of
this sector in GSDP is 37.5% only. This concludes that it does not provide sufficient
incomes to the people, who are engaged in this sector.

The State is also sheltering about 4.5 million livestock population. Out of the total
livestock, approx 21.3 lakhs are cattles, buffaloes 11 lakh, sheeps 3.60 lakh, and goats
10.97 lakhs. 36.50% of State population is below the poverty line. A big part of
Below Poverty Line population (45%) comes from three districts, i.e., Chamoli,
Tehri-Garhwal and Uttarkashi. Another aspect of poverty-distribution is that poverty
is more visible in some backward groups of the society, as Scheduled-Castes,
Scheduled-Tribes, i.e., 44% of total SC & ST population is below the poverty-line.
Inequalities in literacy and nutrition-levels are also some of the indicators of
increasing poverty among these disadvantaged groups. The State’s literacy rate is
79.63% out of this the male-literacy rate is 88.33% while the female-literacy rate is
70.70%. It is comparatively lower in case of rural areas with figures of 82.74% for
males and 55.52% for females which is even lower in case of scheduled castes
literacy rate, i.e., 63.40% in which male-percentage is 77.30% and female-literacy

73
rate is 48.70% as per census detail 2011 of economic and statistical division,
Uttrakahand. 30

Table: 3.3
Land Use Pattern in Uttarakhand

1 Barren Land 5%
2 Non Agricultural Use 3%
3 Wasteland 5%
4 Trees Bushes Garden etc 4%
5 Pastures 4%
6 Fallows 1%
7 Net Shown Area 14%
8 Forest 64%
Total 100%
* Source: http://www.phdcci.in/admin/userfiles/file/Research-ureau/Uttarakhand.pdf

Land Use Pattern in Uttarakhand

5% 3%
5%
4%
4%
1%

14%
64%

Barren Land No n A gricultural Use Wasteland Trees B ushes Garden etc

Pastures Fallo ws Net Shown A rea Fo rest

Source: http://www.phdcci.in/admin/userfiles/file/Research-ureau/Uttarakhand.pdf

Figure: 4

Climate:
The State of Uttarakhand can be categorized into two climatic zones, i.e., hills and
plains. The climatic conditions vary from extreme hot to extreme cold. The climate is
sharply demarcated in case of its two distinct divisions: the predominant hilly terrain
and the lower region of plains. Some places in the Higher Himalayas become
30
CII, (Confederation of India Industry), Report supported by Birla Institute of Management and
Technology, Greater Noida. PP. 11-12

74
inaccessible in winters due to sub-zero temperatures and prolonged snowfall. The
plains of Uttarakhand seem to be at their best in terms of climate in winters, when the
weather is pleasant.

Summers are exceedingly hot and humid with temperatures crossing the 40°C mark.
Winters are cold with temperatures going below 5°C at times. The climate in the
northern part of Uttarakhand is typically Himalayan. This mountain range exerts an
appreciable extent of influence on the monsoon and rainfall patterns.31 Within the
Himalayas, the climate differs depending on altitude and location. Climate ranges
from sub-tropical in the southern foothills, averaging summer temperatures of about
30° C (about 86° F) and winter temperatures of about 18° C (about 64°F).Warm
temperate conditions prevail in the Middle Himalayan valleys, with summer
temperatures usually hovering about the mark of 25° C (about 77° F) and cooler
winters. Cool temperate conditions dominate the higher areas of the Middle
Himalayas, where the summer temperatures are usually around 150 to 18° C (59 to
64° F) and winters drop below the freezing point. You will encounter a cold
alpine climate at higher reaches where summers are cool and winters are harsh. At
altitudes over 4880 meters (16,000 feet), the climate is bitterly cold with temperatures
consistently below the freezing point and the area perennially shrouded in snow and
ice. The eastern flanks of the Himalayan ranges are subject to heavy rainfall while the
western section is relatively dry.

Soil and Geology:

The Himalayan mountain chain creates a complex classification of the geology and
soil patterns of the State. On the basis of State’s physiographic zones the geology of
the state can be divided into two distinct non-montane and montane zones.

1) Non- montane zone comprises of Bhabar and Tarai, where Bhabar is a level
surface of the foothills of the Himalayas and it is 34 km wide belt where the sharp
slopes of Himalayas rush down in big stones and gravels and meets with the edge of
Tarai. Whereas, Tarai is a surface level, which starts where Bhabar ends. Tarai is
comparatively more muddy and moist, retains water in a good capacity.

2) Montane zones again can be categorized in four sub-zones.

31
Kharakwal S.K., ‘Physio Cultural Environment & Development in UP Himalayas’ 1993, Nootan
Publicatio, Kotdwara, Page 30.

75
i) Sub-Himalayas are known as such because these zones have the least of Himalayan
attributes and are known as Shivalik chains and Doons, with comparatively warmer
climate.

ii) Mid Himalayas are the Zones varying in the width of 60-90 km in rushed rise in
elevation.

3) The Greater Himalayas comprise of almost 40-60 km width and altitude varies
from 3000 to 7000 msl. This zone is always covered with snow therefore called
Himadri.

4) Trans-Himalayas are the surface that can be called as cold desert which is
shadowed by Greater Himalayas and the Indo-Tibetan Plateau.32

The Physiographic Zones of Uttarakhand Himalayas

*Source: http://www.mapsofindia.com/maps/uttaranchal/

Figure: 5

On the basis of different physiographic zones the state comprises of different soil-
types, agri-produce along with the rainfall distribution in different zones and these are
depicted in the table below:

32
Kharakwal S.K., ‘Physio Cultural Environment & Development in UP Himalayas’, 1993, Nootan
Publication, Kotdwara, PP- 30, 42-43.

76
 Table: 3.4
Soil Type Distribution of Uttarakhand

Sl
Soil Zone Altitude (m) Climate Zone Type of Soil
No.
I Shiwalik and Doon Area 300-900 Moist-Dry Jalod soil
II Lower Himalayas 900-1800 Dry Temperate Grey Forest Soil
III Upper Himalayas 1800-3000 Moist Temperate Grey Deciduous soil

IV Alpine Areas 3000 and above Moist Temperate Himani Soil

Source: http://www.phdcci.in/admin/userfiles/file/Research-ureau/Uttarakhand.pdf

Forest Wealth:

Uttarakhand forest report 2011 revealed that an area of 34662 sq km of the State, i.e.,
64.79% of the total geographic area of the State is under forest cover but by legal
status reserve forests contain an area of 71.08%, out of which 28.51 is
protected/prohibited forest area and .41% is unclassified forest area of the total forest
area, of the Uttarakhand. The forest of Uttarakhand comprises of Tropical Moist
Deciduous, Tropical Dry Deciduous, Sub Tropical Pine, Himalayan Moist Temperate,
Sub-Alpine and Alpine Forests. Major part of this contains many types’ conifers and
Sal (Teakwood). There are six National Parks and 6 Wildlife Sanctuaries comprising
an area of .71 million hectares or 13.35% of the State’s geographic area.

Deforestation and degradation is caused by commercialization in the state. Cleaning

of forest for settlement and agriculture, requirement of fuel-wood, overgrazing etc.
reduced the forest wealth to a very large extent. Increase in population led to
additional area for human beings, which has resulted deforestation and at the same
time construction requirements and demand for railway sleepers also caused unusual
deforestation. For Uttarakhand the forest-policy has always remained a key issue and
it has attracted administrative actions many times, but it has remained un-resolved and
ineffective. This kind of rigid policy was a quick response to ‘Chpko Andolan’. By
1980’s the Central Government began incorporating public opinion in the five year
plans.

Uttarakhand is very rich in forest wealth which needs to be protected, as the State has
a number of wood-based industries; such as paper mills, ply-wood industries, Katha
production, rasin and many other micro and small industries based on wood like saw-

77
mills, carpentry, packing cases, sports-items, furniture, construction of homes etc. An
increase in population resulted in direct increase of demand for all these purposes and
this increased demand put an extra burden on the existing forests. In the absence of an
appropriate and rational policy, sound management of forest wealth has not been
possible.

To meet this gap of demand and all the stakeholders must take an active part in
afforestation or new plantation. It will require active participation of all the
stakeholders. Keeping in view the deforestation, as well as industry-demand are the
major considerations. On the other plantation is being done in other districts of the
state. Accordingly, Poplar, Eucalyptus, Bamboo, Jatropha, Khair. Chyura and Sisal
have been recommended. A special focus has also been given by the Government to
the plantation of Bamboos, and Jatropha. The government proposed to cover 2 lakh
hectares of area under each of these plant species in the state.33

Water Resources:
The State of Uttarakhand is primarily a hilly state and it has a number of hydro-
geological setups, which can be categorized into two distinct hydro-geological parts,
namely the Gangetic alluvial plain and the Himalayan mountain belt. The Gangetic
alluvial plain comprises of huge span of alluvium and unconsolidated sedimentary
material in different fractions and it is a certain zone of ground water development,
while the Himalayan Mountain belt is hilly in nature and it has less potential for the
considerable development of ground water. In the hilly region, ground water comes
out in the forms of either fissures or fractures and emerges as springs.

Water resources in Uttarakhand play a very important role in the lives of millions of
people living in the hills or in the plains. Many important rivers originating from the
Himalayas help the plain by bringing fertile silt and plenty of water for irrigation.
This important work of these rivers plays an important role in the development of
rural economy of the Tarai area along with the whole northern plains.

A lot of changes have been seen in the pattern of snowfall and these changes have a
severe impact on monsoon regime. The melting spell of snow corresponds with the
monsoon. This coincidence has led to many disasters in the State.

33
Joshi, Amit, “Economy of Uttarakhand, with special reference to Uttarakhand Tourism” pg. 18-36

78
Mineral Wealth:
The state has a fragile ecology and the exploitation of the minerals can cause the
damage beyond expectations. Hence there is a ban on the mining of minerals.

The mineral wealth of Uttarakhand includes Magnesite, Graphite, Soapstone,

Limestone, Copper, Sulphur, Asbestos, Silajeet, Marble and Iron Ore. Though, the
State is not very rich in the mineral deposits, and whatever little minerals wealth state
possesses, it is being exploited unscientifically for commercial purposes.

Limestone and gypsum are found in Dehradun and Tehri Garhwal. Copper is being
exploited in Almora District at the bank of river Saryu near Diravli Village. Soap-
stone is available in huge quantities in Almora district, specially in Bageshwar region.
Gypsum in insignificant quantity is also available in nearby places of Massoorie.

Thus, there exist mineral wealth in Uttarakhand, but the state needs a scientific policy
for exploiting it. The quick-fix approach may simply not work.

3.2 ECONOMIC PROFILE OF UTTARAKHAND:

The demand for a separate state of Uttaranchal was a result of several factors.
Unfortunately, it was the result of poor economic management of its resources,
followed by political and cultural reasons.

The reasons for the demand of a separate state were further compounded by the fact
that this part of the State was rich in natural and human resources and a lot of
potential existed in terms of forests, water, agriculture, dairy, animal husbandry and
many other small and cottage industries based on traditional skills and labour. The
opportunities for development in the areas of Hydel Power, tourism and traditional
industries were overlooked despite a lot of potential in these areas. The most
significant reason to support the movement was the lop-sided development of its
different regions and poor concern for its growth–potential.

Eventually, the separate Hill State of Uttaranchal came into existence on November 9,
2000. Later the name of this state was changed to Uttarakhand. The State domestic
product of Uttarakhand can be categorized into three major sectors i.e., Primary
sector, Secondary Sector and Tertiary Sector.

79
The State of Uttarakhand is one of the fastest growing economies of India. It is
evident from the State’s gross state domestic product (GSDP), which at the constant
prices is more than twice from 24,786 crores in F.Y. 2005 to 60,898 crores in F.Y.
2012. The actual GSDP grew at 13.7% during the F.Y. 2005 to F.Y. 2012. The part of
the tertiary services sector to the state’s GSDP was around 50% during F.Y. 2012. the
per capita income of Uttarakhand was 82,193 for the financial year 2012 which is
much higher than the national average income of 60,603 (in F.Y. 2012).19 As per a
report published by the Reserve Bank of India, the total amount of foreign direct
investment in the state for the period from April 2000 to October 2009 was US$ 46.7
million and have an increasing potential in future prospects. 34

All the three major sectors are further sub-divided into thirteen sub sectors; the
detailed contribution of these sectors into the economy of State is explained below;

A) Primary Sector
1. Agriculture and allied.
2. Forestry and Logging.
3. Livestock & Fishing.
4. Mining and Quarrying.

B) Secondary Sector
1. Manufacturing.
2. Construction.
3. Electricity, Gas and Water Supply.

C) Tertiary Sector
1. Transport, Storage and Communication (Railway, Transport by other
means, Storage, Communication).
2. Tourism, Trade, Hotel and Restaurants.
3. Banking and Insurance.
4. Real Estate, Ownership of Dwellings, Business and Legal Services.
5. Public Administration.
6. Other Services.

34
Re-organization Bill passed by UP Govt.. The Indian Express, 24 September 1998.

80
 Table: 3.5
State Domestic Product

(A)Gross State Domestic Product (Advance) Current Constant

At Current Prices 2011-12 Lakh 9316172 5856073
(i) Primary Sector 2011-12 Lakh 1306950 698192
(ii) Secondary Sector 2011-12 Lakh 3187796 2019061
(iii) Tertiary Sector 2011-12 Lakh 4821426 3138820
Per Capita GSDP 2011-12 Lakh 92911 58403
(B) Net State Domestic Product (Advance)
At Current Prices 2011-12 Lakh 8015565 5018032
(i) Primary Sector 2011-12 Lakh 1167854 610241
(ii) Secondary Sector 2011-12 Lakh 2379250 1500953
(iii) Tertiary Sector 2011-12 Lakh 4468461 2906838
Per Capita NSDP/Income 2011-12 Lakh 79940 50045
Source: Directorate of Economics and Statistics, Uttarakhand.

On reviewing these sectors of the economy of Uttarakhand and to align these sectors
with the objectives of this study, the major sectors have been formulated. These are
relevant in context of this study. Only the following sectors, in view of their
relevance, for the purpose, are being discussed below;

Agriculture: Direct and Indirect Agriculture and Allied Activities:

Almost 80% population of the state is dependent on the primary sector, i.e.,
agricultural and allied activities. The contribution of this sector in the GDP/NDDP is
only 37.5% which indicates that it doesn’t provide sufficient incomes to the people.

i) Agriculture: Uttarakhand is an agrarian state; about 80% of the state population is

engaged in agriculture; directly or indirectly, for their livelihood. 12% of the total area
of the State’s land is irrigated and 64% is fed by natural water resources. The soil of
Uttarakhand is characterized by sandy soil which is not considered as good as the soil
of the northern Gagnatic plains for retaining water for long time. At the same time,
availability of moisture in the soil and the crop productivity is not comparable to the
northern plains and its fertility. Many other geographical and topographical reasons
like different rainfall also affect the agriculture in the State to a very large extent.

81
 Table: 3.6
Land and Agriculture

(A) Land-use
Total Reported Area 2010-11 Hectare 5672636
1. Forest Area 2010-11 Hectare 3484803
2. Culturable Waste Land 2010-11 Hectare 310390
3. Fallow Land 2010-11 Hectare 127793
(i) Current Fallow 2010-11 Hectare 43295
(ii) Fallow Land other than Current Fallow 2010-11 Hectare 84498
4. Barren & Un-cultivable Land 2010-11 Hectare 224764
5. Land under Non-agricultural Uses 2010-11 Hectare 217648
6. Permanent Pasture & Other Grazing Land 2010-11 Hectare 198526
7. Land under Misc., Tree Crops and Groves not
2010-11 Hectare 385548
included in Net Area Sown
8. Net Area Sown 2010-11 Hectare 723164
Source: Uttarakhand at a Glance, Govt. Of Uttarakhand Directorate of Economics and Statistics 100/6
NESHVILLA ROAD, Dehradun 2012-13

Uttarakhand with different agro-climatic endowments, the plains, and the hills present
a varied scenario for agriculture in the state. It is not in practice to promote the
commercial agriculture like in the plains. The farmers are mainly engaged in the
practice survival-farming. General and mixed cropping is in practice with the
dominance of growing the single crop. People do not go in for multiple crops in one
particular season.

Irrigated land is easily available in the plains of Uttarakhand, as almost 87% of

agriculture land is irrigated in plains but just a 10% in the hilly region. At the same
time in consideration of qualitative seeds sown, replacement rate of quality seeds in
plains is 15-20 per cent, while this rate for hill area is on a very low side, i.e., 3-4 per
cent. Within the State, the productivity for the same crops differs very abnormally
between the hills and the plains. In Uttarakhand, more than 80% of the population
depends on agriculture for livelihood. The holding size of a farmer is approx 0.98
hectare on an average basis. One important issue of Uttarakhand’s agriculture is the
traditional hill farming which has the small and scattered land-holdings owned by the
marginal farmers. 50% of the total cultivated holding is sub-marginal, and 21%
measures between 0.5–1 hectares in holding sizes. 27%t of the total cultivated area
comprises of fields smaller than 1 hectare in size, another 26% comes between the
sizes of 1 to 4 hectares, and all these account for 51% of the total cultivated area. 22%
82
of the total cultivated land contains of area more than 4 hectares each, and accounts
for 3 percent of the land holdings in the State.

Table: 3.7
Operational Holdings in Uttarakhand

No. of Marginal Holdings (<1.0 Hect.) 2011-12 '000 No. 672

No. of Small Holdings (1.0 - 2.0 Hect.) 2011-12 '000 No. 157
No. of Semi Medium and Medium Holdings (2-10 Hect.) 2011-12 '000 No. 82
No. of Large Holdings (>10 Hect.) 2011-12 '000 No. 1
Area under marginal Holdings 2011-12 '000 Hectare 296
Area under Small Holdings 2011-12 '000 Hectare 225
Area under Semi Medium and Medium Holdings 2011-12 '000 Hectare 270
Area under Large Holdings 2011-12 '000 Hectare 25
Source: Uttarakhand at a Glance, Govt. of Uttarakhand Directorate of Economics and Statistics,
Dehradun 2012-13
Table: 3.8
Area Used in Principal Crops (Uttarakhand)

1. Cereals 2011-12 Hectare 896774

Rice 2011-12 Hectare 280108
Wheat 2011-12 Hectare 369209
Barley 2011-12 Hectare 22508
Maize 2011-12 Hectare 28038
Manduwa 2011-12 Hectare 125163
Sanwan 2011-12 Hectare 63002
Other 2011-12 Hectare 8746
2. Pulses 2011-12 Hectare 55690
(i) Urad 2011-12 Hectare 12980
(ii) Masoor 2011-12 Hectare 12295
(iii) Peas (Mattar) 2011-12 Hectare 3451
(iv) Gahat (Kulthi) 2011-12 Hectare 12033
(v) Rajma 2011-12 Hectare 4614
(vi) Gram 2011-12 Hectare 766
(vii) Bhatt (Black Soyabean) 2011-12 Hectare 5734
(viii) Other pulses 2011-12 Hectare 3817
3. Oil Seeds 2011-12 Hectare 29705
(i) Rape and Mustard 2011-12 Hectare 14294
(ii) Seasum (Tik) 2011-12 Hectare 2020
(iii) Groundnut 2011-12 Hectare 1112
(iv) Soyabean 2011-12 Hectare 12279
4. Other Crops 2011-12 Hectare 110608
(i) Sugarcane 2011-12 Hectare 108255
(iii) Onion 2011-12 Hectare 2353
Source: Uttarakhand at a Glance, Govt. of Uttarakhand Directorate of Economics and Statistics,
Dehradun 2012-13

83
 Table: 3.9
Fertilizer Consumption

Nitrogen (N) 2011—12 M.T. 123246

Phosphorus (P) 2011—12 M.T. 29329
Potash (K) 2011—12 M.T. 9930
Source: http://agriculture.uk.gov.in/

Major crops grown in Uttarakhand are rice, wheat, sugarcane, maize, soybean,
pulses and oilseeds. Farmers or primary producers face many challenges, of both
technical and economic nature. Further, all these crops in the hilly-region are mostly
rain-fed.

Table: 3.10
Irrigation in Uttarakhand

(A) Net and Gross Irrigated Area

Canals 2011-12 Hectare 83687
Tube Wells 2011-12 Hectare 216100
Other Wells 2011-12 Hectare 11519
Tanks 2011-12 Hectare 83
Other Sources 2011-12 Hectare 24747
Net Irrigated Area (NIA) 2011-12 Hectare 336136
Gross Irrigated Area (GIA) 2011-12 Hectare 561733
(B) Irrigation Infrastructure
Length of Canals 2011-12 Km 11588
Length of Lift Canals 2011-12 Km 242
Tube Wells (State) 2011-12 No 1110
Pump Sets (Boring/ Free Boring) 2011-12 No 54642
Hauj 2011-12 No 32850
Gool 2011-12 Km 26365
Hydrum 2011-12 No 1547
C.C.A. Under State Canal 2011-12 Lakh Hect 3.302
Revenue Collection by Irrigation 2011-12 Hect 252.27
* Source: Uttarakhand at a Glance, Govt. of Uttarakhand Directorate of Economics and Statistics,
Dehradun 2012-13

ii) Horticulture:
Distinct agro-climatic conditions of Uttarakhand are suitable for the development of
Horticulture. The soil conditions are good for the production of fruits and vegetables.

84
The climatic and soil conditions allow growing sub-tropical and temperate fruits,
vegetables and ornamentals. The various fruits grown in the State include mangoes,
citrus, litchi, guava and jackfruit etc. The crop productivity is also very low hence, it
does not substantially to GSDP. Therefore, the Government of Uttarakhand is taking a
lot of initiatives to promote the cultivation of some selected crops like basmati rice,
aromatic and medicinal plants, vegetables cultivation, flower cultivation, litchi
production etc.

Major fruits grown in Uttarakhand are mangoes, litchi, guava, apricots etc., while
major vegetables grown in Uttarakhand are potato, tomato, green-peas, cauliflower
and capsicum etc.

Table: 3.11
Horticulture in Uttarakhand

Infrastructure
(i) Horticulture Mobile Teams 2011-12 No 285
(ii) Fruit Preservation Centers 2011-12 No 49
(iii) State Nurseries/Orchards 2011-12 No 95
(B) Coverage and Production
Fruits
(i) Area 2011-12 Hectare 200727
(ii) Production 2011-12 MT 802124
Vegetables
(i) Area 2011-12 Hectare 62956
(ii) Production 2011-12 MT 624121
Potato
(i) Area 2011-12 Hectare 25034
(ii) Production 2011-12 MT 433821
(iii) Productivity 2011-12 MT 17.33
Source: Department of Horticulture, Dehradun

Approximately, 2.72 lakh hectares area is under horticulture production and nearly
70.15% area is rain-fed. Total fruit production is rain-fed while the production of
vegetables is marginally irrigated. The production of fruits is 53.26 qntl per hectare.

In addition to staple foods, the hill districts of Uttarakhand produce spices like
Chilies, Garlic, Turmeric, Ginger etc. These spices need high land in terms of
temperature like that of district Almora, Champawat and Pithoragarh. The area being

85
used in production of spices in these districts is 2275, 1098 and 962 hectares
respectively.

iii) Animal Husbandry, Fisheries and Live Stock

Livestock farming is an essential part of Uttarakhand’s rural economy and it
contributes considerably amount to household incomes and family nutrition, along
with providing the much needed essentials like biomass etc. This activity is also
providing a lot of employment to millions of households across the state and
contributes in income generation of the marginal and landless farmers.

Significant increase in the population of cattle is a result of direct influence of State

Government Crossbred Cattle Development and Breed-Improvement Programs being
carried out. The percentage of decline in milch buffaloes is negligible, due to the
census being carried out in the lean period, but at the same time there has been a
regular fall in the population of sheeps since 1997 to 2007. Increase in goat
population is remarkable since 1997, while no direct support is being given by the
Government due to environmental concerns. The demand for goat-meat is
continuously increasing, hence the growth is demand driven as local people treat this
as cheaper and less time consuming. Similarly the production of poultry which is
more fashioned in meat consumption trends of poultry meat and eggs is also growing
to very fast.

Table: 3.12
Livestock and Poultry

(A) Veterinary Services

Infrastructure
(i) Veterinary Hospitals 2011-12 No 308
(ii) 'D' Category Veterinary Hospitals 2011-12 No 12
(iii) Livestock Centers 2011-12 No 744
(iv) A. I. Centers/Sub Centers 2011-12 No 610
(B) Livestock
1. a) Cattle 2007 No 2235116
(i) Indigenous 2007 No 1895689
(ii) Exotic and crossbreed 2007 No 339427
b) Buffalo 2007 No 1219518
2. Yak 2007 No 50

86
 3. Other Livestock 2007 No
(i) Sheep (Desi & Cross Breed ) 2007 No 290411
(ii) Goats 2007 No 1335306
(iii) Horses, Mules, Ponnies, Donkeys and camel 2007 No 40788
(iv) Pig (Desi & Cross Breed ) 2007 No 19822
(v) Other Animals (Dogs & Rabbits) 2007 No 256958
Total Livestock [Excluding cat. 3 (v)] 2007 No 5141011
(C) Poultry 2007 No 2601852
Hen/ Cock/ Chicks 2007 No 643430
Other Birds 2007 No 1958422
Source: Uttarakhand at a Glance, Govt. of Uttarakhand Directorate of Economics and Statistics,
Dehradun 2012-13

iv) Forest Produce and Medicinal Plants:

Keeping in view the economic profile of Uttarakhand it can be said that people in
Uttarakhand are getting a lot of contribution from its forests in terms of employment
and income opportunities. The State is rich enough in availability of various
expensive timber wealth, medicinal plants and herbs. It is an exclusive advantage that
30 percent of such species of this state are not found anywhere else. Uttarakhand is
also very rich in wild relative of cultivated plants, which are requiring for future crop
improvement.

An increase in the area under cultivation of aromatic and medicinal plants has been
seen for last few years. The reason for this increase is the changed attitude of farmers
for the cultivation of aromatic and medicinal plants. Growing medicinal plants with
food grains is very much popular among the farmers. It ultimately results in increased
incomes. Farmers are availing huge benefits through this diversification in cultivation
of medicinal and aromatic plants.

There is a vast scope of commercial value in the oil and extracts of aromatic and
medicinal plants, The Herbal Research and Development Institute (HRID) is helping
the farmers to generate unlimited benefits from this cultivation. Medicinal plants like
Lemon-Grass, Palmarosa, Chamomilla, Tulsi, Naramotha, Khuasare being
extensively used in cosmetic industry at a very high scale but it is getting affected by
high cost of processing, and the constraints of getting buyers for the produce. The
buyers do not get attracted because production and supplies are in very small
quantities. Further, the processing is costlier and irregular. To boost the production of

87
spices cluster agriculture approach may be followed. Once the production goes up
processing unit will also come-up, and naturally the buyers will also establish regular
contacts.
Table: 3.13
Forest and Wildlife

(A) Classification of Forest Area According to Legal Status

1. Reserved Forests 2011-12 Sq Km 24643
(a) Reserved Forests under the Control/
2011-12 Sq Km 24261
Management of Forest Department
(b) Reserved Forests which is Completely
2011-12 Sq Km 348
Recorded in Van Panchayats
(c) Reserved Forests under the Control/
2011-12 Sq Km 34
Management of other Government Agencies
2. Protected Forests 2011-12 Sq Km 9885
(a) Protected Forests Under the Control/
2011-12 Sq Km 99
Management of Forest Department
(b) Unclassified and Vested Forests under the
control/Management of Forest Department, 2011-12 Sq Km 55
which have Legal Status of Protected Forest
(c) Civil and Soyam Forests Under the Control
2011-12 Sq Km 4769
of Revenue Department
(d) Under the Control of Forest Panchayats as
2011-12 Sq Km 4962
Village Forests
3. Private Forest (Municipal & Cantonment etc.) 2011-12 Sq Km 124
(B) Growing Stock & Forest Produce Statistics, 2011-12
Estimated Growing Stock 2011-12 000 Cu m. 249939
Timber Production 2011-12 Cu. m. Round 235236
Fire Wood Production 2011-12 Cu. m. Stack 39383
Resin (NTFP) Production 2011-12 Quintals 161417
Source: Uttarakhand at a Glance, Govt. of Uttarakhand Directorate of Economics and Statistics,
Dehradun 2012-13

v) Tourism
State is rich in natural beauty and it finds place in the priority list of tourists, with
Nainital, Almora, Mussoorie, Landsdown, Chakrata, Ranikhet and Ramnagar being
the most visited places in the country. This State is exclusively positioned for
religious tourism because the four sacred pilgrimage centres known as Char Dham,
i.e., Shri Badri Nath, Shri Kedar Nath, Gangotri and Yamunotri in addition to the

88
other religious shrines of Sikhs and Muslims are located in the Sate. The two sacred
and important rivers; the Ganga, and Yamuna originate from glaciers in the State.

The state has historic importance which goes down to the stone-age. There are many
proofs of stone-age and pre-stone-age at different places in the state. Many evidences,
fossils, and other engravings found on rocks and are the proofs to it. There were found
in Lakhu Udyar (Almora), Kimni village and Gyarkhya Gufa in Chamoli districts. The
arts and paintings unearthed fit-in with the mesolithic period. Similarly, some items of
archaeological importance were found in the Malari village of Chamoli district of the
State confirming to the existence of early Vedic (1500 BC) culture in Uttarakhand.35

Uttarakhand has many evidences of arrivals of great pilgrims, scholars, hermits and
great kings, like Kushanas, Kudinas, Kanishka, Samudragupta, Katuria, Palas,
Chandras and Pawaras, and this has been revealed in the historic literature mentioned
in many scriptures as well as in the epics of Mahabharta and Ramayna, that many
sages and kings visited this region for its heavenly natural beauty and peace of mind.36

Table: 3.14
Transport and Communication
(A) Motor Roads Maintained by PWD
(i) National Highways 2011-2012 Km 1375.76
(ii) State Highways 2011-2012 Km 3788.2
(iii) Major District Roads 2011-2012 Km 3289.74
(iv) Other District Roads 2011-2012 Km 2945.04
(v) Rural Roads 2011-2012 Km 14543.89
(vi) L.V. Roads 2011-2012 Km 858.22
(B) Motor Roads Maintained by BRTF
(i) Total Length of roads 2011-2012 Km 1281.32
( C Motor Roads Maintained by Local Bodies
(i) District Panchayats 2011-2012 Km 862.45
(ii) Urban Local Bodies & Others(Revised) 2011-2012 Km 1974.3
(D) Roads Maintained by Other Departments
(i) Irrigation 2011-2012 Km 741
(ii) Cane Development 2011-2012 Km 885
(iii) Forest 2011-2012 Km 3257
(iv) Others 2011-2012 Km 1685
Source: Uttarakhand at a Glance, Govt. Of Uttarakhand Directorate of Economics and Statistics,
Dehradun 2012-13

35
Saklani, D. P., ‘Ancient Communities of the Himalaya’. New Delhi: Indus Pub. Co. (1998)
36
http://en.wikipedia.org/wiki/Tourism_in_Uttarakhand, accessed on 31/05/2014 at 12.10 pm

89
Uttarakhand is very well known as the Land of Gods or “Devbhoomi”, as it is the
place where people from all over the world come for char-dham yatra, i.e., Shri
Kedarnath, Shri Badrinath, Yamunotri, Gangotri which are very- very important in
the Hindu culture. Shri Badrinath the abode of Lord Vishnu, Shri Kedarnath the
abode of Lord Shiva, Gangotri the originating source of the holy river, Ganga,
similarly, Reetha Sahib is the sacred place for Sikhs, and Peeran Kaliyar is the
venerated by Muslims and by the people belonging to other religions.

Table: 3.15
Tourism

(A) Infrastructure
Tourist Places 2011-12 No 264
Tourist Rest Houses 2011-12 No 185
Raien Basera (Night Shelters) 2011-12 No 36
Beds in T.R.H. 2011-12 No 6857
Beds in Raien Basera 2011-12 No 1960
Hotels & paying guest Houses (as on 31-12-2012) 2011-12 No 3676
Dhramshala (as on 31-12-2012) 2011-12 No 864
(B) Tourist Arrival
In Tourist Places (including Pilgrims) 2012 No Lakh 284.34
(i) Indian Tourist 2012 No Lakh 282.93
(ii) Foreign Tourist 2012 No Lakh 1.41
Important National Parks and Wild Life Sanctuaries 2011-12 No 284908
(i) Indian Tourist 2011-12 No 271579
(ii) Foreign Tourist 2011-12 No 13329

Source: Uttarakhand at a Glance, Govt. Of Uttarakhand Directorate of Economics and Statistics,

Dehradun 2012-13

vi) Industry- Manufacturing, Service and Other

In order to promote the Industrial development in Uttarakhand, the State Government

endows with financial assistance in the form of debt, subsidy, equity, and venture-
capital, develop infrastructure and help the private concerns in Industry and
Infrastructure. The State also assists in implementation, say it approves the projects
and gives dedicated financial support, consultancy and all other support to promote
industries and develop industrial infrastructure in the State, directly or through special
assistance.

90
During the year 2005–2006, the state has successfully developed three Integrated
Industrial Estates (IIEs) at Haridwar, Pantnagar in district Nainital, and Sitarganj in
district Udham Singh Nagar, while pharma industries at Salaqui Dehradun;
Information Technology Park at Sahasradhara in district Dehradun and a growth
centre at Siggadi (Kotdwar). Uttarakhand Government has also devloped, 20
industrial sectors in public private partnership mode in the year 2006.

Table: 3.16
Rural and Small Scale Industries

Khadi Udhyog/Gramodhyog Units 2011-12 No 859

Small Scale Industries (SSIs) 2011-12 No 40049
Total Employees of Khadi Units 2011-12 No 4011
Total Employees of SSIs 2011-12 No 177615

Table: 3.17
Factories [Registered and Un-Registered as Factory Act-1948]

No. of Factories 2010-11 No 2739

No of Workers 2010-11 No 234332
Total Persons Engaged 2010-11 No 289957
Value of Product & by Product 2010-11 Lakh 10516211
Net Value Added 2010-11 Lakh 2996017
Value of Output 2010-11 Lakh 10950453
Gross Fixed Capital Formation 2010-11 Lakh 390972
Profits 2010-11 Lakh 2370811
Source: Directorate of Economics & Statistics, Planning Department, Government of Uttarakhand.

3.3 STRUCTURE OF RURAL MARKETING IN UTTARAKHAND:

It is a challenge for the marketers to establish the relative influence of the various
factors, marketing techniques and to incorporate these in an effective manner to
develop the best marketing-mix. As the behavior of human beings can not be
predicated and in the event of consumerism it can be changed at any stage of decision
making, so it can not be presumed that any specific marketing-mix will always leads
to positive contribution for the marketers.37

37
Samsudin & M Rehman, “Cooperative Sector in India”, S. Chand and Co, New Delhi.

91
The existing marketing network in Uttarakhand is the result of the following
characteristics:
• High rate of literacy.
• Potential for hydropower generation.
• Potential for adventure, rural and religious tourism.
• Rich cultural heritage.
• Rich source of biodiversity.
• Presence of centers of excellence like IIT Roorkee, GBPUAT, FRI etc.
• Excellent network of schools in Dehradun and Nainital.
• Enabling policies for industrial development and attracting investment.
• Harmonious and peaceful social and industrial environment.
• High unemployment and low per capita income.
• Absence of avenues for employment and livelihood options.
• Migration of men from hills to other states for employment.

Level of education is better in Uttarakhand as compared to Undivided U.P. and

among the other hilly states of the country. The reason could be the continuous
tradition of learning since the ancient times.

Table: 3.18
District-wise Literacy and Population in Uttarakhand, 2011

Literate Population % of Literate Population

District
Total Male Female Total% Male% Female%
Uttarkashi 216322 129289 87033 75.98 89.26 62.23
Chamoli 284118 157013 127105 83.48 94.18 73.20
Rudraprayag 169626 91016 78610 82.09 94.97 70.94
Tehri Garhwal 401040 227423 173617 75.10 89.91 61.77
Dehradun 1280462 712934 567528 85.24 90.32 79.61
Pauri 499212 263853 235359 82.59 93.18 73.26
Pithoragarh 350844 192237 158607 82.93 93.45 72.97
Champawat 179844 103170 76674 80.73 92.65 68.81
Almora 440918 233748 207170 81.06 93.57 70.44
Bageshwar 181713 98693 83020 80.69 93.20 69.59
Nainital 706750 391234 315516 84.85 91.09 78.21
Udhamsingh Nagar 1060739 611229 449510 74.44 82.48 65.73
Haridwar 1225845 718335 507510 74.62 82.26 65.96
Source: Directorate of Economics & Statistics, Dehradun

92
Topography and the other sources like income, working conditions, land-use and life-
patterns are also considered to be better by the marketers. Because of the absence of
disparities in living-patterns and consumption-habits, marketers do not require the
specific marketing strategies for this state’s rural regions.
The existing rural marketing pattern in Uttarakhand can be categorized in three
sections i.e.,
1. Marketing of FMCG
2. Marketing of Consumer Durables
3. Marketing of agricultural- products

Marketing of FMCG:

On the basis of observation and discussion with the marketers’ representatives, the
wholesalers, and dealers in the FMCG companies, it could be concluded that there is
exist no special strategies for the rural areas of Uttarakhand, even on part of the giant
players in the FMCG sector. Similar marketing-mix and similar marketing strategies
are being followed for the rural areas and the urban areas.

It is very well known that inn Uttarakhand, most of the farmers have smaller
operational holdings and they are simultaneously engaged in some other activities to
earn their livelihood. Interaction between the rural and urban people on account of
migration, on account of job or livelihood is of very high level. It also makes the
marketers to promote the same offerings in rural areas.

Most of the products in FMCG sector are being induced in the same manner in rural
Uttarakhand as in urban Uttarakhand, except that they are being supplied in smaller
packs and sizes. People prefer frequent purchases rather that storing large packs so
that they spend smaller price to meet their requirements and it also provides them the
value for money. Usually, the customers only want to spend money on their perceived
values or the specific attributes in the products.38

Most of the branded goods are being produced out of the State and these are being
transported by the company owned warehouse to the big super-stockiest or exclusive
warehouses of the companies in the state. These warehouses supply goods to dealers,

38
Deepak Mohanty, Executive Director, Reserve Bank of India, Deepak Mohanty, ‘Economic and
financial development in Uttarakhand’, (Extract of speech delivered at the G. B. Pant, University of
Agricultural Technology, Pantnagar, on 31 st August 2012)

93
also known as super-stockiest in various centers or nearby towns. Finally, these super-
stockiest moves the good to the small retailers in the villages, and sometimes the
retailers themselves approach these stockiest for supplies of FMCG for further sale in
their villages. In Uttarakhand, consumers are mostly induced by the television in their
buying decisions, so they ask for the specific products or brands from the retailers and
if the retailers are not able to meet this demand at that time, the only option for them
is to assure supplies very soon. In this process the buyer switches over to some
substitute or the local products.

Marketing of FMCG in Uttarakhand

URBAN TO RURAL

Company/Producer/Marketer

Company owned
warehouse

Warehouse in the state

(Uttarakhand)

Company Owned Main Super stockiest

Super stockiest/Dealers
(In the nearby towns)

Small Retailer in the villages

Figure:

Figure: 6

About 90% of the daily requirements of rural areas in Uttarakhand are being met by
the multinationals or popular Indian brands. Though the corporate reach is limited to
feeding towns only, i.e., the well-connected cities or towns of the state, and as such
the supply is concentrated in the hands of super-stickiest or the super-dealers in the
feeding towns.

94
 Supply From Nearby Towns to Rural

URBAN TO RURAL

Local Producer/Marketer
(Nearby Towns or Cities)

Super stockiest/Dealers
(In local towns)

Small Retailer in Villages

Figure: 7

Flow of FMCG which are being produced locally and are also being sold locally are
very much in demand and a lot of public transport is being used by the producers to
sell their products in each and every village of Uttarakhand. In this marketing-
structure, there is no requirement of storage of goods at different stages of
distribution, hence it is perceived as cheaper providing value for money.

Some of the local offerings of FMCG, such as spices, tea, bakery and confectionery,
milk and milk products and many other items are being made in the nearby towns and
are directly being supplied to the retailers in the villages. The market for these local
offerings comprises a considerable part of rural Uttarakhand, though the size and
potential is low in view of the population of the state.

95
Marketing of Rural Produce to Urban Markets

RURAL TO URBAN

RURAL PRODUCERS/MARKETERS

NEAR BY COLLECTING CENTRE

NEAR BY MARKET OR SELLING

CENTRE

CONSUMERS/RETAILERS
(RURAL/URBAN)

Figure: 8

In order to promote the supplies to urban areas from the rural areas many channels
exist, but the channels for the reverse flow are very limited. Further, the local
movement of local products is also very common. This system is not the barter
system; rather it is the network of smaller intermediaries or rural to rural marketing.

Marketing of Rural Produce to Rural Markets

RURAL TO RURAL

LOCAL VILLAGE VILLAGE

PRODUCER/ INTERMEDIARY CONSUMER/
CONSUMER /RETAILER PRODUCER

Figure: 9

96
Marketing of Durables in Rural Uttarakhand

In rural Uttarakhand, no separate network for the supply of durable products exists.
Normally, the villages are very small and some of villages are so small that only four
or five families live there. In such cases producers can not supply their products to
each village. Hence, all the famous brands and products are available in nearby towns
where companies or producers are directly supplying their products to tap the
maximum potential. Comparatively low-priced durables are in high demand in rural
Uttarakhand (especially in the villages of the hills).

Marketing of Agricultural Inputs/Outputs:

The agricultural products in Uttarakhand can be categorized in two groups;

1: Agricultural Inputs- Seeds, Fertilizers, Pesticides, Insecticides, Pharmaceuticals,
Tractors, Water pumps etc,
2: Agricultural Output- Agricultural Produce, Vegetables, Fruits, Handicrafts etc.

In order to market these items, the State requires a strong marketing network to match
the potential. Presently in Uttarakhand these agri-products are being marketed through
small retailers or retailers in nearby towns, including some Non Government
Organizations, Self Help Groups and Co-operative societies. These are facilitating the
marketing of these products. The producers sell their products to nearest Bania (Local
collector of produce) and these Banias supply the collected produce to nearby Aaraht
or the Mandi town. Finally these Aaraht and Mandis supply these produces to the
demand areas, which demand these.

Many co-operative societies perform all the functions of helping the farmers in the
areas of agricultural produce, inputs, marketing, and processing of agricultural
produce. These activities are undertaken by the societies working in villages and it is
the basis of co-operative marketing in Uttarakhand. The structure of Mandi Samiti is
given in the table which is as follows:

97
 Table: 3.19
Structure of ‘Krishi Utpadan Mandi Samiti’ in Uttarakhand
S. Principal Weekly
District Phone No Submarkets
No Markets Markets
1 Nainital 1-Haldwani 05946-245973 1-Mukhani 1-Kaladungi
2-LamaChod
3-Lalkuwaon
4-Bhowali
5-Kaladungi
2-Ramnagar 05947-254700 1-Shankarpur 1-Halduwa
2-Peerumadara 2-Tanda
3-Peerumadara
4-Shankarpur
2 Udham 3-Rudrapur 05944-241710 1-Bhurarani -
Singh Nagar 2-Bhamraula -
3-Bagwala -
4-Bhainsiya -
4-Kashipur 05947-275179 - 1-Pratappur
- 2-Kunda
3-Kundeshwari
5-Jaspur 05947-222434 4-Mahuwakheda
6-Sitarganj 05948-254097 1-Bhudiya 1-Shaktifarm
2-Nanakmatta
7-Khatima 05943-250084 - 1-Satarahmil
2-MelaGhat
8-Kichha 05944-264392 - -
9-Gadarpur 05949-271159 1-Chandayan 1-Dineshpur
2-Gularbhoj
3-Gadarpur
10-Bazpur 05949-281008 1-Sultanpur Patti 1-Kilakheda
2-Kilakheda 2-Sultanpur Patti
3 Champawat 11-Tanakpur 05943-266281 1-Banbasa --
2-Champawat --
3-Lohaghat --
4 Dehradun 12-Dehradun 0135-2620253 1-Doiwala 1-Selkuyi
2-Mussorrie --
13-Vikashnagar 01360-250880 - 1-Raiwala
2-Chhidarwala
3-I.D.P.L.
14-Chakrata - 1-Sahiya 1-Rani Pokhari
2-Baniyawala
3-Shyampur
15-Rishikesh 0135-2436011 - 1-Ganganagar
5 Haridwar 16-Manglore 01332-222250 1-Jhabreda
2-Narsan
17-Lakshar 01332-255410 1-Landora
2-Rayasi

98
 3-Govardhanpur
18-Haridwar 01344-25031 4-Bheekampur
Union 1-Bahadarabad 1-Bahadarabad
2-Shahpur
19-Roorkee 01332-26303 1-Bhagwanpur
6 Paudi 20-Kotdwar 01382-222170 1-Dugadda
7 Chamoli 21-Chamoli Not yet functional
8 Uttarkashi 22-Uttarkashi Not yet functional
9 Tehri 23-Tehri Not yet functional
Garhwal Garhwal
10 Almora 24-Almora Not yet functional
11 Pithoragarh 25-Pithoragarh Not yet functional
Source: Directorate, Uttarankhand Krishi Utpadan Mandi Parishad, Mandi Bhavan, Rudrapur
(Uttarakhand), Tel. No. 91-5944-250055-57 Fax- 91-5944-250059,
e-mail : uamandi@rediffmail.com

Uttarakhand Agricultural Produce Marketing Board (UKAPMB)

For the effective agricultural marketing, Uttarakhand Agricultural Produce Marketing
Board (UKAPMB) was set up under the same Act. This board has been given the
responsibility of effective regulation of marketing of agricultural produce,
establishment and development of appropriate network. It also promotes the modern
marketing system, promotion of agricultural processing, and agricultural export,
superintendence, and control of markets in the state of Uttarakhand.

Movement of Agricultural Produce in Uttarakhand

PRODUCER

MANDI VILLAGE BANIYA VILLAGE CONSUMER

ARHTIYA CONSUMERS

WHOLESALER

MANDI MANUFECTURER EXPORTER

CONSUMERS

Figure: 10
Source: Samsudin & M Rehman, “Cooperative Sector in India, “S. Chand and co, New Delhi.

99
Cooperative Societies: In Uttarakhand the concept of Co-operatives is also very
important a lot of rural assistance is being given rural Uttarakhand through these
societies. Many farmers and retailers of the villages are members of these societies.
Presently a four tier cooperative marketing federation system is exists in
Uttarakhand. 39

I-State Level : Uttarakhand Marketing Federation

II-District Level : District Cooperative Societies

III-Local/Ground Level : Marketing Societies (Producers are the members)

Accordingly, in rural Uttarakhand, for the marketing of FMCG, there exists need
based system and no formal set-up has emerged till now. However, for agricultural
marketing the proper set-up of Mandis and Co-operatives is in place, of course with
its inherent weakness, as well.

39
Sharma, Sudeepa. “Marketing of agricultural and forest produces through cooperative societies”,
2007 pg. 74-86

100
REFERENCES:

1
Ministry of Statistics and Programme Implementation. "Uttarakhand Economy at
a Glance". State Domestic Product and other aggregates (2004–05 series). 1
August 2012. Retrieved 3 August 2012.
2
‘Uttarakhand Vison, 2022, Towards Robust Growth and Inclusive Development’,
by, CII, (Confederation of Indian Industry), report supported by Birla Institute of
Management and Technology, Greater Noida. pp. 10-13
3
Mehta, G.S. ‘Development of Uttarakhand: Issues and Perspectives’, APH
Publishing Jan 2009, p.47
4
Kharakwal S.K., ‘Physio-Cultural Environment & Development in UP
Himalayas’, 1993, Nootan Publication, Kotdwara, PP- 30, 42-43.
5
Pande, B. D. (1993). “History of Kumaun”, English version of "Kumaun ka
Itihas", Almora, U.P., India: Shyam Prakashan: Shree Almora Book Depot.
6
. Joshi, Amit, “Economy of Uttarakhand, with special reference to Uttarakhand
Tourism” pp. 18-36
7
Saklani, D. P. (1998), ‘Ancient communities of the Himalaya, New Delhi: Indus
Pub. Co.

8
Samsudin & M Rehman, “Cooperative Sector in India”, S. Chand and Co, New
Delhi.
9
Deepak Mohanty, Executive Director, Reserve Bank of India, Deepak Mohanty,
‘Economic and Financial Development in Uttarakhand’, (Extract of speech
delivered at the G. B. Pant, University of Agricultural Technology, Pantnagar, on
31 st August 2012).
10
Sharma, Sudeepa, “Marketing of Agricultural and Forest Produces Through
Cooperative Societies”, 2007 pp. 74-86.

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“Almost half of the population of the world lives in rural regions and mostly in a
state of poverty. Such inequalities in human development have been one of the
primary reasons for unrest and, in some parts of the world, even violence.”
-Dr. A. P. J. Abdul Kalam

Chapter- 4
REVIEW OF
LITERATURE
 REVIEW OF LITERATURE

On the basis of a careful review of the existing published literature available in

libraries or displayed on internet as well as the empirical studies or researches
carried out by individuals, institutions and companies, it can be said that a lot
of work in the area of rural marketing has been done. Though the scope of rural
marketing is very wide and it cannot be concluded in a single review conducted
for a Ph.D. dissertation. Researchers and analysts have undertaken researches
and analysis to understand the enormous concept of rural marketing. Some
studies have focused on the perspectives of rural consumers, i.e., understanding
the behavioral aspects of rural consumers and its impact on their buying habits
and purchasing decisions, but on the other, some studies have been conducted
on the perspective of marketers with regard to the strategies to tap the rural
potential, development of the product and service, specially targeting rural
people.

Regarding the review of empirical research and archives available in the central
library of Kumaun University, Nainital it was found that some work has
indirectly been done to describe the rural dilemma but not exactly about the
rural marketing and the aspects related to it. A research entitled ‘The Impact of
IRDP ( Integrated Rural Development Programs) on the Weaker Sections of
Kumaun Mandal’, carried out by Chandra Prakash in 1993 to evaluate the
impact of national schemes like; National Rural Development Scheme, Rural
women and Child Development Programs, Group Insurance, Jawahar Rojgar
Yojana and Rural Employment Guarantee programs. Similarly, a research
work on ‘Economic Profile of Rural Areas of Kumaun and Developmental
Prospects’ by Suresh Chandra Bhatt was carried out in the year 2003 to analyze
the prospects of Rural development of Kumaun division with regard to various
government schemes on rural society. In his study he analyzed the aspects such
as agriculture, migration and habits of alcohol and tobacco etc in rural families.

Some studies other than the doctoral dissertations have been conducted on
different aspects of rural marketing. These studies are briefly reviewed in order
to present a broad framework for this research. The studies deal with brand

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awareness of rural consumers, self-image, attitude of rural consumers, purchase
behavior of rural consumers, and preferences of rural consumers.

Kannan1 (2001) studied the rural marketing prospects in selected areas of Tamil
Nadu with a view to examine the potential of selected products in the areas
under consideration. 100 respondents were selected in this survey and
multistage random sampling was used. He concluded that the rural markets are
coming up in a big way and growing twice as fast as the urban, witnessing a
rise in sales of typical urban kitchen gadgets such as refrigerators, mixer
grinders and pressure cookers. For successful marketing in rural areas, an
integration of traditional and modern methods of selling is required. To
communicate effectively with the prospective rural consumers and to ensure
effective distribution and prompt delivery, organizations must understand the
specific requirements and needs of the villagers and then plan their strategy to
convert the prospective consumers into active consumers.1

Aggarwal2 (2003) found out that an efficient marketing system leads to the
optimization of resource-use and output-management. A well designed system
of marketing can effectively distribute the available stocks of modern inputs
and thereby sustain a faster rate of growth in agricultural production. An
efficient marketing system ensures higher level of income to the farmers by
reducing the number of market middleman, regulating marketing services,
providing better prices for the products by having competitive conditions for
marketing. 2

A new situation is emerging in India. Governments have been emphasizing

economic development by ensuring growth rates of seven-eight percent
annually, enhancing the welfare of farmers and workers and unleashing the
creativity of entrepreneurs and marketers. [Singh and Bhagat (2004)] 3.

The strengthening of rural communication services is an important ingredient

for the welfare and development of rural India as it gives timely information on
business, price, market and demands within a few minutes and that too at a
very low cost. (Patnaik and Rao, 2006) 4

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The open and transparent franchise policy for rural areas must be worked out to
enable the franchisees to provide telecom facility on a revenue sharing basis.
The rural-literacy and road-length, in particular, and other rural infrastructure
in general are considered essential for the growth of rural non-farm sectors and
for enhancing their employment-generation potential, policy measures should
be directed towards strengthening these support systems which in turn would
lead to the growth of rural India and the Indian economy as a whole. (Pradhan,
2005)5

Kaptan (2004)6 studied the rural marketing for HDPE pipes in rural areas of
Maharashtra with a view to examine the dealers awareness and perception
towards their respective HDPE pipes and to identify the major competitors and
their market share in the agricultural segment. The area of the study was
confined to three districts of the three regions in Maharashtra. The size of
sample was 45 dealers who sold agricultural implements like pumps, pipes,
starters etc. He concluded that rural marketing is changing constantly.
Continuous marketing research should be conducted periodically and a
database should be developed by all the companies. By contributing towards
reduction in the cost of distributing goods from producers to farmers,
marketing research makes it possible for the farmers to enjoy better products at
lower prices.

Lokhande (2004) 7 in his study “Rural marketing- A Study of Consumer

Behavior” observed the consumption pattern, purchase behavior and
preferences of rural consumers. His study was confined to two villages of
Aurangabad and 150 respondents were selected on random sampling basis. He
concluded that Rural India, having more than 70% population living in 6.27
lakh villages, is a huge market. Obviously, a number of FMCG companies are
trying their best to harness the business opportunities in rural India. Electronic
media, efficient transportation system, increasing income levels and strategic
marketing policies are the major contributing factors to enhance the scope of
rural marketing. Rural consumer is changing his consumption habits to suit the
changing environment.

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A farmer in rural Punjab is more progressive than his counterpart in Bihar; a
farmer in Karnataka is far more educated that the one in Rajasthan, and so on.
In an urban family, the husband, the wife and often even the children are
involved in the buying process. But in a village, because of the lack of mobilit y
among women and their little contact with the market, it is the men who make
the purchase decisions. Further, while an urban individual is free to take
independent purchase decisions, but in a village, because of the strong social
levels, community-decision-making is quite common. Companies that took the
trouble to understand these needs and peculiarities have tested success.
(Kashyap Pradeep, 2005)8

Kumar and Madhavi (2006) 9 in their study “Rural Marketing for FMCG”
evaluated the level of satisfaction and brand preference of FMCG consumers.
Multistage random sampling technique was adopted. Ten villages were selected
from Cuddalore district and a sampling of ten from each village was selected
resulting in two hundred as sample-size. He revealed that rural marketing is not
fully encashed by marketers. FMCG could significantly increase their market
share by extending attention to rural areas. More generic products with
different advertisement campaigns surely attract non-users. This untapped
source could be easily reached by manufactures FMCG. Most of the consumers
are influenced by the quality of the product, so the FMCG companies should
strictly adhere to the quality standards.

Timmer C. Peter (2006)10 concluded that in the rice-based food system in Asia,
greater investment in rural human capital, more efficient rural financial
markets, and opening of the world rice market to free trade would ensure a
more prosperous future for the farmers and greater food security for the
consumers.

The rural markets have acquired significance, as the overall growth of the
economy has resulted into substantial increase in the purchasing power of the
rural communities. On account of green revolution, the rural areas are
consuming a large quantity of products which are industrial and urban, in
nature. (Sadangi, 2004)11

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The rural markets offer great opportunities to the marketers. The need of the
hour is correct profiling of rural consumers detailed study of rural buying
behavior, and purchasing patterns in rural markets. (Jain and Rathod, 2005) 12

Companies need to design proper communication and marketing strategies to

prevent initiation and counterfeiting of their products. The marketers have to
depend on rural India for growth and size. Even in lifestyle products, rural
India will be significant over next five years. Rural India markets promise to be
very lucrative for the Indian incorporation Prateek, (2006)13.

Ganeshamurthy (2003)14 in his study “A Survey of Selected Consumer Products

in Rural Market Areas,” examined the brand loyalty, awareness and influence
of mass media on rural consumers. The area of study was Erode district of
Tamil Nadu and the sample taken was 50 respondents. Simple random sampling
was adopted. He concluded that nowadays products are flowing from rural to
urban areas and urban to rural areas. Even premium brands are gaining wide
acceptance in the rural bastions. Increasing awareness has led to significant
changes in buying behavior and consumption habits. The urban market is
getting increasingly competitive and saturated. There is less scope for growth
in the urban markets, especially for the already established categories. Today,
the rural market is blooming with increase in the disposable incomes of the
households.

Nandagopal and Chinnaiyan (2003)15 in their study “Brand Preference of Soft-

Drinks in Rural Tamil Nadu,” identified the popular brands of soft-drinks and
the factors that contribute to the purchase of soft-drinks in the rural areas of
Tamil Nadu. Pollachi Taluk of Coiambatore district in Tamil Nadu was
purposively selected for the study. 200 rural consumers of soft-drinks were
selected at random. The primary data were collected from the rural consumers
using well structured and presented interview schedule. Percentage analysis
was used to study the general characteristics of the consumers and sources of
brand awareness. They concluded that the level of awareness among the rural
consumers about the brand of soft-drinks is high, which was indicated by the
mode of purchase of the soft-drinks by “Brand Name.” Major sources of brand-
awareness found to be the word-of-mouth publicity followed by

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advertisements. A factor that influenced the purchases of a brand of soft-drinks
was product-quality, i.e., quality perception was supreme in the minds of the
consumers.

Raman (2003) 16 in his study “Strategies of Multi-National Companies in Rural

Marketing,” analyzed the strategies of MNCs to enter into rural areas for the
introduction of new products. He examined the areas like automobiles,
telecommunications and services-sector where, strategies like joint-ventures
were used to enter into the rural areas. He concluded that the growth and
success of the MNCs in rural areas depends on how they adopt different
strategies in marketing of their products. The strategies to be adopted by the
MNCs may be based on the cultural, sociological, economic and psychological
background along with the strategies related to 4Ps in that area. Further, these
strategies have to be changed over a period of time to meet the varied demands
of the consumers. After a decade of experimentation the multinationals have
settled on a strategy “think small and keep the product simple”. This strategy is
identified and implemented by many MNCs in the rural areas.

Naidu, (2004)17 evaluated the consumer awareness in rural markets with a view
of studying the awareness of the consumers regarding consumer movement and
to study the awareness of the consumers towards cosmetics, shampoos and
toothpaste. The study was an empirical research based on survey method.

Ranga Reddy district in Andhra Pradesh was chosen for the study. Ten villages
were selected for this purpose. Agriculturists, Businessmen, Professionals,
Housewife’s were included in the sample. Altogether sample of 125
respondents had been selected for the study. He concluded that awareness of
the rural consumers about the consumers movements are qualitative in
character and cannot be measured directly in quantitative terms. There is no
fixed value or scale which will help to measure the awareness. But the
awareness has been studied with the help of their responses to various
questions. Little wonder then that success has eluded most corporate in rural
markets but with urban markets getting saturated and fiercely competitive, they
have to look at rural markets due to the emerging potentiality in these markets.

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Ozha (2004)18 in his study “Where the FMCG market is sizzling- A Study of
Rural Markets,” examined the rural consumer’s psyche for FMCG. The survey
was conducted with a sample size of 200 in villages of Baroda. Convenience
sampling was used. He concluded that using easily available technology, strong
local area knowledge, a short supply chain and quality raw material regional
players are giving big brands a run for their money. The regional brands are
making their aggressive presence in smaller towns by participation in melas
and exhibitions. They are giving distributors and retailers better margins in
rural areas.

Jamal and Goode (2001) 19 in their study “Effect of self image on purchase
decision of rural consumers,” examined the relation of self image with product
preferences. They covered various rural areas in Maharashtra with the sample
size of 100 respondents and the sampling technique used was random sampling.
They revealed that the self-image/product image congruity (commonly known
as self-image congruence) can effect product preference and purchasing
decision of the consumers. It suggests that purchase behavior can be reversed
depending on factors such as price, quality, quantity, shape, color, and
promotional schemes etc.

Sakkthivel (2005)20 in his study “Effectiveness of Sachets in Modifying Rural

Consumer’s buying behavior and their Consumption Pattern,” examined the
effectiveness of small sachets in modifying consumer’s buying behavior and
found out the quantity and frequency of purchase of products by rural
consumers. The purposive survey was conducted among 150 consumers who
resided in Tumkur district in Karnataka and the sampling technique used was
judgment sampling. He concluded that sachet is a bold move by FMCG
conglomerates to motivate rural consumers to try new products. It is a positive
step towards the modification of buying behavior and consumption pattern of
rural consumers who are long neglected and hidden in shells. This new avenue
would positively create more demand and would bring more money to
companies as it introduces new products to rural consumers. The study revealed
that only some selected products like shampoo, fairness cream, spices,
mosquito repellant etc. could create impact among the rural consumers and rest
of them could not. Hence, the companies need to focus on the reasons behind

109
the modification in consumers’ buying behavior and consumption pattern
toward the products expected in medium or large containers. Yet, the study
indicates that these sachets facilitated rural consumers to try new products and
also played a vital role in modifying their buying behavior and above all, a
major change in their life styles. Hence sachets may be viewed as a promotion
tool for modifying buying behavior rather than a yet another innovative form of
packaging.

Vanniarajan (2005)21 in his study “Comparative Analysis of Rural and Urban

Consumers” on milk consumption evaluated the consumption pattern of rural
and urban consumers. The purposive sampling method had been adopted to
collect data from the consumers of milk. Madurai district was chosen for the
present study. 150 samples were randomly selected in Madurai city and 150
respondents were selected from the three different blocks in Madurai District-
Tamil Nadu. Thus the total number of sample households was 300. He
concluded that consumers in rural areas fall behind the consumers in urban
areas in per capita milk consumption and this is due to the fact that the food
habits of rural consumers are different that of urban consumers. The urban
consumers prefer branded milk whereas the rural consumers prefer mostly
unbranded milk as most of the rural households have an easy excess to milk
diaries in the villages.

Gupta (2006) 22 in his study “Factors affecting the buyer behavior of customers
- A case study of New Generation Bikes in rural market,” examined the
awareness and purchase behavior of rural consumers. Simple random sampling
was done and 125 respondents from the selected rural areas of Kanpur, U.P.
were taken into consideration. He concluded that factor affecting customers
who prefer to purchase a new generation bike by putting more emphasis on fuel
efficiency, easy finance and whose price is within their affordable range may
be labeled as economic benefit factor, they are ready to compromise with
luxury to some extent at the cost of economic benefit. On the other hand
customers of second type are of aristocrat class who are least concerned with
fuel efficiency and price of the bike. They seek benefits of luxury, safety and
dignity from a new generation bike at any cost. Factor affecting customers of
this class may be labeled as social benefit factor. Though change is common,

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some changes seem peculiar and paradoxical. Today Indian economy is
witnessing one such bifurcated change- a change from national to global on one
side and urban to rural on the other. Keeping in mind the above facts and
opinions this research is undertaken, as the rural markets possess a vast
potential, which remains untapped by the marketers. The objectives of the
research were kept in order to understand the marketing pattern of FMCG
branded products in rural areas.

Sayulu and Reddy (1996) 23 suggest that the rural market offers a very
promising future. But this market has certain characteristics that hinder
marketers from exploiting the opportunities. These include low literacy level,
ignorance of right consumers, indifference to quality standards and lack of
cooperative spirit.

Rao (1997)24 observes that the boom in rural areas is caused by such factors as
increased discretionary income, rural development schemes, improved
infrastructure, increased awareness, expanding private TV channel coverage
and emphasis on rural market by companies.

Rao (2002) the study of product penetration in rural market shows that different
products have different product penetration rates. Some of the products such as
soaps, detergents and hair oil in the non durable category have shown high
penetration rates. There is a need for creating mass awareness towards
increasing the quality of life, standard of living in rural areas. Low penetration
rates may not imply un-affordability factor rather it could also be due to
indifference and consumers not perceiving the value of a product.

Patel & Prasad, (2005)25 in his study examines the efforts of suppliers and
retailers in the FMCG channels to adopt more efficient consumer base. He
examined the relationship between the channels and the customers. People
understand the local dialect and prefer to be informed in their local language
and dialect. Therefore it can be useful for promotion of brands in rural markets
by major players.

Sakkthivel (2006)26 has gauged that companies intended to attract the rural
consumers ought to very courteous in their approach and should try to develop

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the personal rapport by offering better products and supportive services. Once
this is done, they don’t have to worry about promotion as word of mouth will
take care of it.

Mahapatra (2006) 27 claimed that once the marketer creates a positive attitude
for the brand/ service then it is very difficult to deviate the rural consumers.
They not only seek comfort in their brand but also from the person who is
selling them the brand. Kumar & Madhavi (2006) brings out that rural
consumers are quality conscious but with reasonable price offers.

Ananda, Raj & Madha (2007)28, in their studies titled, “Where FMCG market is
sizzling”, concluded that, India's rural markets have seen a lot of activity in the
last few years. Rural marketing has become the latest marketing mantra of most
FMCG majors. To gain advantage of this, the Indian FMCG sector is busy
putting in place a parallel rural marketing strategy. FMCG majors are
aggressively looking at rural India since it accounts for 70% of the total Indian
households. The annual consumption of detergents in India ranges to thousands
of tonnes. Each brand claims to clean whiter, boasting of technologically
dubious terms such as fighting granules, power pearls, etc. Their study aims at
finding the factors influencing the rural customers to prefer a particular brand
in detergent soaps. This study concludes with suggesting the strategic
framework for marketers to win over the hearts of the rural customers.

Sharma (2009)29 has gauged the importance of Dabur India Products in rural
India. The rural India is becoming aware about the branded products as the
literacy rate is rising. NRI’s also playing a vital role in rural India. They also
affect the decision process of buying branded products in rural India.

Garga Pawan (2009)30, in his study concluded that, instead of smaller packages,
medium packages were reported to be the most preferred with only exception of
shampoo. From testing of hypothesis relationship was observed to be existing:
between consumer’s purchase decisions on the basis of price and the select
FMCG categories; consumer opinion about inferior quality of loose products
and district of respondents; consumer’s opinion about the quality of products
stocked by rural retailer and district to which they belong; rural consumer’s
trust on the matter of the advertisements and the different districts. It is

112
recommended that neither rural Punjab should be treated as single
homogeneous market nor different FMCG categories be planned in a similar
manner. Specific marketing strategies based on the different elements of
Marketing Mix have also been developed in the paper.

In this research paper based on primary data examines the domain of Rural
Marketing for the select FMCG for the state of Punjab with an objective to
develop an insight into the buying behaviour of rural consumers. Instead of
smaller packages, medium packages were reported to be the most preferred
with only exception of shampoo. The quality of goods stocked by the rural
retailer was reported to be average and majority of respondents reported lack of
trust in the matter of the advertisement with significant variations across the
different districts. From testing of hypothesis relationship was observed to be
existing: between consumer’s purchase decisions on the basis of price and the
select FMCG categories; consumer opinion about inferior quality of loose
products and district of respondents; consumer’s opinion about the quality of
products stocked by rural retailer and district to which they belong; rural
consumer’s trust on the matter of the advertisements and the different districts.
It is recommended that neither rural Punjab should be treated as single
homogeneous market nor different FMCG categories be planned in a similar
manner. Specific marketing strategies based on the different elements of
Marketing Mix have also been developed in the paper.

The rural market in India is vast and scattered and offers a plethora of
opportunities in comparison to the urban sector. It covers the maximum
population and regions and thereby, the maximum number of consumers
(Shamim 2008). 31

Bijapurkar (2010) 32, in its article titled, “ Rural India” has remarked that
consumer behavior in rural India has attracted a lot of discussion and theories,
but there has been holistic and structured framework within which to
understand it and use it for marketing decision making.

Corporate and rural India has entered into collaborative partnerships through
vertical coordination. A common thread among these is integration and
tightening the supply chain (Hans (2006)33 . The agri-initiatives taken by Indian

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corporate will play an important part in the dissemination of the right
information and knowledge. Corporate can act both as buyers of agri-produce
as well as providers of resources for producing the same.

Nagaraja B. (2004) 34 in his study “Market potential of durable products in rural

areas” examined the awareness and potential of durable products in rural areas
of Gujarat. His study was conducted in the villages nearby Ahmedabad and
judgmental sampling was used on 100 respondents. He revealed that the Indian
rural market with its vast size and demand base offers a huge opportunity that
MNC’s cannot afford to ignore. With 128 million households, the rural
population is nearly three times the urban. To expand the market by tapping the
countryside, more and more MNC’s are foraying into India's rural markets. The
rural market accounts for half the total market for TV sets, fans, pressure
cookers, bicycles, washing soap, blades, tea, salt and toothpowder, What is
more, the rural market for FMCG is growing much faster than the urban
counterpart.

Malhotra (2003)35 conducted the study on cosmetic industry in rural areas of

India which described the main reasons for boom in cosmetic industry in rural
areas as increasing fashion and beauty consciousness coupled with rising
incomes and focus on health and fitness.

According to Pradeep Tognatta, (former vice president of LG) The economic growth
in India's agricultural sector in last year was over 7%, compared with 3% in the
industrial sector. This implies a huge market potentiality for the marketer to meet up
increasing demand. Factors such as village psyche, strong distribution network and
market awareness are few prerequisites for making a dent in the rural markets. The
model is of the stolid Anglo-Dutch conglomerate Unilever Group, which has enjoyed
a century-long presence in India through its subsidiary Hindustan Lever Ltd. It was
Hindustan Lever that several years ago popularized the idea of selling its products in
tiny packages. Its sachets of detergent and shampoo are in great demand in Indian
villages. Britannia with its low priced Tiger brand biscuits has become some of the
success story in rural marketing.36

Rajesh K Aithal of IIM (L) had done his research on rural telecom in India. He
explains that rural markets are an important and growing market for most products

114
and services including telecom. The characteristics of the market in terms of low and
spread out population and limited purchasing power make it a difficult market to
capture. The Bottom of the pyramid marketing strategies and the 4 A's model of
Availability, Affordability, Acceptability and Awareness provide us with a means of
developing appropriate strategies to tackle the marketing issues for marketing telecom
services in rural areas. Successful cases like the Grameen Phone in Bangladesh and
Smart Communications Inc in Philippines also provide us with some guidelines to
tackling the issue. 37

A study on “ Rural Marketing- Understanding the consumers behaviour and decision

process”, by Mandar Naresh Dhumal, Avishkar Tayade, Ankita Khandkar, published
in ‘Marketing to rural consumers-understanding and tapping the rural market
Potential, 3,4,5, April-2008, insisted upon the different characteristics of rural market
and the profile and decision making process of Rural Consumers. Study was carried
out in a small district of Maharashtra named ‘Satara’ near Pune. Study concluded on
effects of TV and Print Media on rural mass, also stated the quantum effect of these
mediums on rural consumers.38

Study also revealed the decision maker concept while making decision for FMCG,
i.e., the head of the family was the ultimate decision maker in the district
administered. Study also suggested that marketer should adopt multi-level marketing
channels, like social gatherings of same rural communities, kitty parties etc to
encourage positioning and awareness of a particular brand. Study also emphasized on
aggressive marketing by print media and TV advertisement as the researchers found
that these were the most effective medium in influencing the rural buying decision.

In the above research paper it is reviewed that the study was based the perspective of
the marketer and suggested how rural market can be tapped effectively by using
communication tools and understanding the rural consumers. Hence the proposed
study shall reveal the perception of consumer and their specific needs to balance the
concept of rural marketing.

One important research paper on ‘Changing Rural Market and Role of Marketer’ by
Prof. (Dr.) G.L Pedhiwal, Prof Pankaj Arora and Prof (Dr) J H Vyas, presented that
rural India offer a bigger growth opportunity through bigger penetration and
consumption. The attitude of marketers towards rural market should are of investor

115
not the sole profit maker. It also revealed that various solution to market having
different characteristics such as geographically, occupationally and difference of
cultural factors.39

Research paper also considered the perspective of marketer or rural markets, and did
not analyze the rural consumer’s expectations to a very good extent. Study analyzed
the distributions problems and different characteristics of rural market such as
preference to small packs instead of buying large packs which require comparatively
more money to dispose for a single product or quantity, effect of absolute prices and
unique positioning of the products and services by identifying their unmet needs.
Paper also revealed the concept o value adding in the process o rural marketing.

After reviewing the above paper it can be concluded that it explained the perspective
of marketer to a very good extent but at the same time it excluded the effect of
electronic media, internet, although it has been observed that in many studies that
nowadays these mode of promotion having most effective role in rural mass and
people are getting influence through these channels and are also very cheaper
compare to other mode of communication. It also concluded that the next big
revolution the rural sector could happen in rural sector and when it happen the
marketer should have already studied the lay of land and thought of strategies and
tactics of the victory.

An analytical paper was published in Zenith International Journal of business

economic and management research, Vol-1, Issue-2, Nov 2011, ISSN 2249 8826,
under the title of ‘Understanding potential of rural marketing in India- An analytical
study conducted by Md. Rafiuddin and Dr. Badiuddin Ahmed to understand the rural
market and to unleash the potential of rural market, which revealed that almost all
products of FMCG group become an essential part of rural households and a
considerable part of their family income is being absorbed by FMCG sector. This
study identified the effective mode of communication, their purchase practice and
marketing strategy, effect of languages; purchase influences and many other
characteristics and concluded that rural consumers mostly do not take chance with a
new product until and unless they get some word of mouth publicity to influence.
They are becoming brand loyal as well as price and discounts and said that there is

116
high potential exists in rural India but the level of rural marketing has to be
improved.40

On review of the above paper it is fond that it explains the habits and preferences of
rural consumers but did not exactly the facts which shows that in what terms the
potential of rural market exists and what are the indicators of showing potential in
rural India as exists in urban market.

One research paper published in Gurukul Business Review (GBR), Vol-7 (Spring-
2011), pp 125-130, in the caption of Dr. Sunil Shukla and Dr. Neena Tondon, in the
title of ‘Rural Marketing- Exploring new possibilities in the rural India’, in which the
role of IT in developing rural market was analyzed. In this paper several references
cases were highlighted as how they could have a success story in rural India, for
example, Britannia, Nestle, LG, TATA etc. and also explained the importance of
Melas, Mandis, Chaupals to promote the products.41

On review of this paper it was found that the paper was entirely based on the cases,
explanations and success events of the marketers but did not actually explained the
core of topic i.e., role of IT in developing rural markets.

One important study on ‘Impact of organized retailing on un-organized sector, By

Mathew Joseph, Nirupama Sounsararajan, Manisha Gupta and Sanghmitra Sahu,
published in Indian Council for research on international economic relations, in May
2008, estimated the total retail potential to grow at 13% annually and concluded in the
study on the basis of solid facts and data the following findings as unorganized
retailers in the vicinity of organized are declining their business and profit and is
having an adverse impact on sales and profit and on the other hand it also assessed its
impact on customers and concluded that consumers are being benefited more by
organized retailers have significant competitive strength that include consumer
goodwill, credit sales, amenability to bargain, ability to sell loose items, convenient
timings and home delivery. 42

This study also analyzed the impact of organized sector on intermediaries and
revealed that there is some adverse impact on sale and margin of the intermediaries
dealing in products such as fruits, vegetables, and apparels but did not revealed that is
there any adverse impact of organized retail on intermediaries.

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A paper named ‘ Prospects and Problems on Indian Rural Markets’ published in
zenith international journal of business economics and management research, Vol-2,
Issue-3, March 2012, ISSN 249 8826 by V V Deviprasad Kotni analyzed the potential
of rural market in various sectors. Author analyzed the prospects in different segment
in rural India such as FMCG sector, Automobiles, Retail, Agri-Inputs and durables
etc. it also analyzed the opportunities exist in rural segment, because of improved
infrastructure, increase in disposable income, rural consumers are buying more of
products as consumed by the urban customers. This study also identified the problem
areas of rural marketing such as it needs development of appropriate communication
system which is much costlier than developing in urban market. Also the problem of
physical distribution and channel management adversely affect the service as well as
the cost aspect. Rural consumers are cautious in buying and decision are slow and
delayed they like to give a trial and only after being personally satisfied they do buy
products.43

Paper also highlighted the concept of culture and defined culture as a system of shared
values, belief and perception that influence the behavior of consumers. There are
different groups based on religion, caste, occupation, income, age, education and
politics and each group exerts influence on the behavior of people in village. And life
in rural areas is still governed by customs and traditions and people do not easily
adopt new practice for example even rich and educated class of farmers do not wear
jeans and branded shoes.

An e-paper published at www.indianmba.com in the title of ‘Opening the Rural eye’

by Dr. Satish Chandra and Ms. B Sowmya Shankar, assessed the potential of rural
India. This articles provides the opportunity to explore consumers and the type of
marketing programs emphasized the size of advertising patterns on consumers
dividend that has been successful in emerging and more specifically in rural India and
analyzed the major players contribution in FMCG Sector in Rural India. The
challenge in rural advertising is the reach of message and the available means of
reaching most of these markets. The fact of the matter remains that when compared to
the Indian urban society is turning in to a consumerism society the rural consumer
will always remain driven by the his needs therefore will be cost conscious and thrifty
in his spending habits. 44

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This study was conducted jointly by MART and Anugrah MADISON surveyed
regular Television viewers of age group 18-50 years, men and women, to reveal the
difference in rural and urban comprehension, as it has been perceived in the study that
is several cases advertising expressed confusion, in comprehension and did not
persuaded in the expected manner.45

A large majority of the rural folk has a mindset that is different from the urban
viewers and hence there is a need to tackle them differently. Marketers aiming to
target their band commercials to both urban and rural audience will do well to pre-test
the spots and that the spots communicate what is intended for the targeted viewers.
The companies should explore the key opportunities and challenges of advertising
rural India. To be successful, these companies need to be innovative, dogged and
culturally sensitive in developing advertising message strategies.

A small study carried by Mr. Praveen Tripathi, on ‘Opportunities for FMCG in rural
area’ to tried to reveal the rural consumer preferences towards FMCG. This study also
focused on trend of rural demand. In this study the researcher concluded that the
preferences of rural consumers are very uneven as they are showing buying more of
Uni Lever’s products in bottle of containers while buying of sachet or tetra pack of P
& G or any other company’s products.46

Jagjit Singh, from the University of South Pacific conducted a study named ‘A
survey of market vendors in a rural township, could more schooling assist rural
market vendor?’ assessed whether there is any relationship between education and
earning of intermediaries. This survey was published in journal of pacific studies, Vol
19, 1996 and analyzed the variations in the earnings of petty middlemen entrepreneurs
in an informal sector in context of human capital theory and concluded that literate
intermediaries were able to earn more than the illiterate intermediaries.47

One important analysis on Rural Brand Preference Determinants in India, by Sandeep

Anand and Rajneesh Krishna, assessed the preference determinants for FMCG,
Durables and Agro Inputs on 5 point Likert scale and concluded that FMCG brand has
to get established in rural market of India and have to differentiate themselves in
terms of quality, sense of belongingness and value for money. Similarly in case of
consumer durables they have to differentiate on the basis of warranty, guarantee and

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shopkeeper’s recommendations and in agro-inputs they only have to differentiate on
Value for money.48

One empirical research done by km Basanti Rani assessed the efficiency of

agricultural marketing engaged in cooperative society was aimed to trace out the role
of cooperative organizations to improve the present conditions of agricultural
marketing, reducing the market charges and influencing the market structure. This
work analyzed problems and weaknesses of cooperative marketing societies and the
members. Her research analyzed 5 blocks- Rudrapur, Kashipur, Kichcha, Gadarpur
and Sitarganj and highlighted the following objectives:

1. Co-operative movement in India.

2. Cooperative marketing in Udham Singh Nagar District.

3. Examined the existing marketing mechanism of agricultural produce with special

emphasis on cooperative system.

In the analysis of the above objectives the study was having limitations of newly born
district of Udham Singh Nagar such as researcher was unable to collect secondary
data from the apex level organizations that were still in Uttar Pradesh.

Research revealed that there was a crucial need to have a properly managed
cooperative marketing and processing system in order to make the proper marketing
channels and processing facilities available to farmers.49

One important research work’ Economic profile of Rural Areas of Kumaun and
development prospects’ by Sh. Suresh Chandra Bhatt highlighted economic factors of
Kumaun Division and analyzed the potential and prospects of development of rural
Kumaun, with respect of various governmental plans executed. In this research the
scholar analyzed several aspects such as agriculture status, migration, status of drinks,
tobacco and cigarettes etc in rural families. The whole research was based on
secondary data and revealed several factor of growth such as Agriculture and allied
activities, and other related profession as dairy, small and cottage industries milk and
related products, fruits and cash crops and they are also getting incentives and several
aids from government to enhance the production of cash crops like fruits. And as a
result the farmers have improved his life style and standards by growing cash crops
instead of traditional farming.50

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In this research chapter -5, he also analyzed the industrial development of Kumaun
and also the development of small cottage and large industries and concluded that the
region is declared backward in the area of industrial development and it was
incorporated in five year plans that the geographically and climatic disparities were
heading towards different areas of development like hydro projects etc.

In chapter – 8 of the same research researcher classified the potential of economic

development in following categories:
Small and cottage industry.
Tourism
Animal Husbandry and related profession
Floriculture and cash crops.
Horticulture
Agricultural diversities

Further concluded that still the economy of Kumaun is very backward and that
resulted more of below poverty line people and the talent is migrating to other states
or cities to earn bread for their family and this type of economy is known as money
order economy as the money sent by the person who is working outside starts the
livelihood for rest of the people in his family.

Study conducted by Haripuram et. al. in 1987 in Hyderabad and Secunderabad that
40-6-% of consumers buy biscuits twice or more in a week and 43% of consumers
prefer to buy small packs of biscuits. Study revealed that taste, freshness, crisp bite
and brand name were the factor influenced the decision making process in case of
biscuits.51

Result of the study carried by Joshi-1993, in Dharwad on food purchasing habits and
consumer awareness among rural and urban housewives indicated that majority of the
urban respondents purchased the fast moving consumer goods in different
periodicities like they buy cereals on monthly basis while perishable good like fruits.
Eggs and meat were bought at once in a week and milk was purchased daily. In this
research outcome showed that 99% of rural consumers buy cereals from fair price
shops and on the other side 83% of urban consumers buy their cereals from fair price

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shops. Price quality and weight of the product were the important factors considered
by both rural and urban respondents while purchasing of food items.52

Consumers purchasing practices were discussed in a research work done by Kulkarni

and Murali in Parbhani 1996 and research revealed that 83.50% of consumers were
seeking information from television regarding the products availability and this source
of information was followed by word of mouth and newspapers. Consumers were
preferring local retail stores for the purchase of FMCG, milk and milk products,
vegetables, fruits and snacks and the most common mode of payment was cash
payment.53

Sayulu and Reddy in 1998 studied a socio economic influence of rural consumer
behaviors and concluded that frequency of purchase of commodities by rural
consumers was highly influenced by the type and nature of the products and price of
the goods was considered to be the most important factor by more than 88% of the
respondents followed by easy availability and neighbors.54

On the equillent pattern of Syulu, Hugar et. al. 2001, propounded a study on dynamics
of consumer behavior in vegetables marketing in Dharwad city. This study revealed
the relative quantity of purchase with the income level of the consumers.55

Another study of Gaur and Waheed, 2002 concluded buying behavior on branded fine
rice in Chennai and Coimbatore districts and indicated that retailers were ranked as
the prime source of information and the family members as the next important source
of information about the branded fine rice.56

Thanulingham and Kochadai, 1989 conducted a study in Madurai city and resulted
that most of the consumers were aware of the importance of good labels, trade marks,
packaging etc. but a very few consumers know the procedure of filing complaints
about adulterated products.57

Similar study was carried by Hasalkar and Ashalata in 1998 in Dharwad district and
accounted the impact of instruction on labels and packaged foods with their action. It
also disclosed the awareness of direction method of adulterated food while
purchasing.58

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Gambhir, in 2002, conducted a study in Chandigarh revealed that 63.47% bought
packed goods and out of this only 36.53% satisfied and 67.59% were not satisfied
with the quality of packed products.59

Ms. Deepti Srivastava, analyzed the profile of rural people in her research paper
entitled “Marketing to rural India, A changing Paradigm”.60

One research paper by Prof. Pankaj Arora, Lecturer DIMAT, Raipur ( Chattisgarh)
thrown light on Indian rural market and analyzed a creative approach towards rural
market in which researcher analyzed the impact of technology in commercialization
along with the impact on rural development. This paper emphasized on the emerge of
technology on domestic consumers and concluded the increase in the technology
given to rural consumer will result in betterment of the society on one side by serving
people with updated market knowledge and latest developmental news and
organization and on other side by creating more market opportunities for the rural
people.*61

One article published in the Economic Times under the caption of ‘Rural Market
provides solace to FMCG companies” by Rajeev Banerjee, ET Bureau Mar 25, 2009
highlighted the inducement of a public character and exampled Sangeeta Bhabhi as a
substitute effect of Savita Bhabhi, adopted by P & G in the caption of ‘Har Nari ki
Kamyab Jodi’, in this tagline P & G promoted detergent Tide and shampoo Head &
Shoulders by the character of Sangeeta Bhabhi narrating story of educated married
woman who highlights the benefits of using the two brands.62

Considering that rural market has been a battle field with national players like HUL,
Dabur and even regional players like Ghari looking to penetrate further. The move
underscore the point that rural market is important considering rural India comprises
of 12.2%of the worlds population.†63

Research paper, published in International Journal of Management and Social Science

Research, (IJMSSR- ISSN-2319-4421, Volume-2 No-1, January 2013), by Chintan
Shah Astt. Prof. Bahgwan Mahavir College of Business Administration, Surat India
discussed the factors of Indian rural market and the reason for opening opportunities

* www.brandchannel.com522_2011_03_india_ruralmarketing_pdf
† 29* articles.economictimes.indiatimes.com/2009.03.25/news/27639094

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for the marketers. In this paper the scholar explained the facts of growing investment
i.e., direct government expenditure in agriculture and allied activities that resulted rise
in the capital formation in rural areas. Paper also highlighted the implementation of
national rural employee guarantee act which guarantees the 100 days of employment
to every adult in rural people boosting their purchasing habits and powers.64

After explaining the nature and future of Indian rural market scholar also explained
the 4 As approach in rural marketing, however the rural consumers are not unlike
their urban counterparts in many ways and multinational corporations are meeting the
consequent challenges of availability, affordability, acceptability and awareness.

This research paper concluded that slowdown in urban market that is more or less
saturated, directed marketers to foray in to rural market and a large untapped market
exists there, which gives a good potential to not only for the consumers durables but
for FMCG too. Increasing rate of literacy, increase in longevity, economic
development of rural areas and the growth in standard of living of the rural people and
these are resulted lot of opportunities for marketer to sell their products and services
in rural areas.

Mr K C Behira and Mr J K Panda published their paper in VSRD, International

Journal of Business and Management research, VSRS-IJBMR-VOL-2(2), 2012,-6574,
ISSN NO 2231248X under the captioned of “Rural Marketing of FMCG Companies
in India” discussed about the potential of fast moving consumer goods in Indian Rural
market. In this paper author discussed the reasons for going rural as the Indian rural
part comprises of large population- approx 70% Indian population resides in villages
and this simply indicates a big potentiality for FMCG .65

This paper also explained the attractions for the marketer to go to rural, the
challenges, the difference between the rural and the urban market and the suitable
example of companies and their experiences in going rural. Further the paper
analyzed the reasons of rural charm by exploring the facts such as large population,
rising rural prosperity, income distribution, potential growth in rural market
effectiveness of communication, IT Penetration in rural India and impact of
globalization.

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The prosperity of Indian rural mass is increasing day by day. As per the national
council for applied economic research (NCAER) study, there are as many middle
income and above’ household in the rural areas as there are in the urban areas. There
are almost twice as many ‘lower middle income’ households in rural areas as in the
urban areas.1*

One research paper of International Journal of Research in Management titled “Rural

Marketing- A paradigm shift in Marketing” by Ms. Poonam Bassi and Ms. Bhawna
Sharma reveled the evolution of rural marketing, factors contributing to the growth in
rural marketing and problems concerned with the growth of rural marketing. This
paper also highlighted the changing pattern of rural market, strategies for rural
marketing and the emerging trends in India. The whole paper explained the facts that
are playing a vital role in the growth and harmony of Indian rural market such as new
employment opportunities that caused increase in purchasing power and made rural
mass self employed and success oriented in the rural areas.66

Green revolution resulted many considerable benefits to rural folk and driven people
to rising expectations, which influenced the marketing environment of rural market in
India. The scholar also revealed the impact of government policies for even economic
development of the country and more investment in rural India has generated lot of
employment, income and purchasing power that simultaneously resulted increase in
literacy level. Also the rural have been motivated to upgrade their living standard by
changing their habits and consumption patterns.

This research paper also highlighted the difference between rural and urban market
and concluded that some factors like intra community influences are relatively more
important than intercommunity influences and their lateness in accepting or rejecting
and brand or products differentiate the rural mass from the urban and their long
lasting purchase habit and seasonal income these were some of the main factors
which differentiate the rural consumers from urban people as per the opinion of the
scholars in this research paper.

One essay published at www.ukessay.com/essay/marketing/thefast-moving-consumer

-ggods-marketing-essay.php analyzed the contribution of FMCG sector in rural
marketing and discussed the challenges faced by the companies in penetrating the

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rural markets. This paper also analyzed the growth prospects of the rural market for
the multinational corporations.67

One empirical research on ‘Factors influencing purchase of FMCG by rural

consumers in south India’ by Mohd Abbas Ali, Venkat Ram Raj Thumiki and Naseer
Khan revealed the factors which influence the purchase of Fat moving consumer
goods by Rural consumers in south Indian Perspective. This survey was limited to a
region called Telangana in South India. In this research a sample size of 1080, the
whole research was based upon 24 variables, i.e., shopkeepers recommendations,
friends recommendations, low price, affordability, long lasting, more features offering
more benefits, need based, brand awareness, relationship marketing, promotions,
dignity, availability, packaging, product education and demonstrations, brand
endorsements, quality, government promotions, life style, brand loyalty, size shelf
display, intended benefits, free offers/sales promotions, brand visibility, these all 24
variables categorized in future five factors i.e., promotion factor, Life Style factor,
Trust Factor, Value Factor and product factor and on the basis of this classification
this research identified the underlying factors influencing the purchase of rural
consumers with reference to purchase of FMCG, these twenty four variables were
influencing the rural purchase of FMCG. this study concluded that rural customer
trust retailers in their villages and rural marketers should design the innovative
promotional strategies for rural markets and insisted upon the retailers and sellers in
the villages because rural customers keeps trust on them but they (Seller/Retailers )
are not aware about the effectiveness of their recommendations.68

Mr. S Dinesh Babu, Astt. Professor, A. Peer Mohammed Ariff, Chief Account M.
Ravi Chandaran, Liabrariran of Mahamed Sathak Enginnering college, Kilakarai
explained ‘Emerging trends in rural marketing” in this paperthey analysed the
significance of rural marketing and why it needs separate treatment than urban
marketing. They also discussed the factors responsible for boom in rural marketing
such as increase in population hence increase in demand, agrarian prosperity resulted
increase in rural income and because of high per capita rural income living standard
of rural society have been enhanced. Also government initiated lot of rural
development programs that caused large inflow of investment, improved mode of
communication and transport resulted exchange and acceptance of ideas between rural
and urban masses.69

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This paper also highlighted the problems related to rural marketing such as barter
system, underdeveloped people and underdeveloped markets, lack of proper physical
communication facilities, inadequate media coverage for rural communication, many
languages and dialects, limited market availability and people to market things and
services.

In her article Ms. Susan Span CAO of market directions Inc focused on marketing to
the rural lifestyles under the captioned ‘connecting with the consumers’, in this article
she revealed the importance of rural segment in the era of economic uncertainty, the
rural life style being a growing trend and it enables the world of marketer to expand
their market opportunities without considerable change in their existing strategies i.e.,
a lot of potential exists in rural market and this all can be easily achieved by the
marketers but the only thing is to penetrate with full swing and passion as for urban
market.70

Research paper on changing rural market and role of marketers, by Prof Dr. G.L
Pedhiwal and Prf. Pankaj Arora and Prof J.H Vyas, published in International referred
research Journal, April-2011, ISSN 0975-3486 RNI: Rajbill 2009/30097 Vol-II Issue
19, focused on the changing rural India from the eyes of marketers perspective and
discussed about the tools which marketers are using to make their presence felt and it
also find the modern way for marketing implementation and value addition.
According to this paper researchers identified that India as roughly fifty percent of its
population under 27 years of age and it is confirmed that consumer India is thriving
but Indian consumers is rigid in o his traditions and this is what called as ‘the Indian
way’.71

On occupation income culture and attitude of rural consumers researchers revealed

that marketer should keep attitude of investor and they must have information system
that track sales to different market and help to identify market opportunities. They
also accepted the facts that rural market differs in a number of ways such as
geographic terms occupational patterns social and cultural adoptions and these
differentials influence the product design, promotions, pricing and use of channels
and also helps to develop positioning and product variants according to geography
and social grouping and the segment of rural India accepts the products attributes and
features should reflect the environment of that consumers.

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Research paper also focused on values, care and affection of Indian rural consumers
as shampoos are positioned for effective cleaning and convenience, replacement of
soap nut or soaps available in rural market, hence product has to satisfy rural need and
should offer value for money.

In this paper researchers revealed that problem of distribution. As the most of the
popular rural marketers especially FMCG companies used to distribute goods up to
block level, so as to reach the all rural mass other that the villagers coming there at
block level to buy things of their need, marketers should come forward in analyzing
the rural side and exploring the rural India and its traditional selling system HAAT and
MELAS.

On pricing issue paper analyzed that absolute pricing is more effective than a
conditional price and it is advisable to decrease the volume rather than increase in
price. As Hindustan Liver found that retailers in villages were cutting 100 gms life-
boy soap into smaller pieces to make I affordable hence I introduced a new pack of 75
gms soap and a 100 gms of Wheel Detergent pack. It is also not true that only cheap
brands will get success in rural markets as USHA found that the sale of its economy
models were falling sharply in rural areas. Farmers prefer USHA’s premier century
brand though it was priced 20% higher (Das Gupta and Menon, 1990).

The paper concluded with the idea that the next big revolution could happen in rural
sector, when it happens the marketers must have already studied the lay of land and
thought of the strategies and tactics for victory. The only way for existence is
application of Darwin principal: survival of the fittest, the time to prepare tomorrow is
today.

Sh. Krishnamacharyulu, C.S.G. and Lalitha Ramkrishnan explained the 4’A approach
in their book ‘Rural Marketing Text and cases, 2/E, companies aiming at selling in
rural areas have to go one step beyond normal transactional marketing. The marketing
mix should be tested in terms of the 4 A’s, acceptable products, affordable price,
accessible purchase, and awareness-creating promotions are essentials. The
development of product with in an affordable range requires small packs at low price
points. The development of product with in an affordable range requires overcoming
barriers such as water or power scarcity. A shining example is ULL detergent that
requires less of water than other detergent. Promotion aim should not only at creating

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awareness but also at seeking to develop, transform and involve rural consumers to
secure sustainable sales. Designing wider distribution network and training channel
members to read the consumers are other vital points in creating accessibility to
consumers.72

On rural support system-marketing strategies require focusing on this social goal

along with other competing goals like environmental protection. Marketers should be
ready to offer products and services to the marketing which women have an
egalitarian role in decision making and where they possess the purchasing power to
buy products of their choice.

In this book the authors highlighted on the key areas of marketers in the phenomenon
of Rural Marketing in four clauses:

A: Profitability-, i.e., Sales revenue maximization/ cost minimization.

Profitability- to make operation of an enterprise profitable. This implies keeping the
market cost low and sales revenue high. Penetration strategies and cost effective
marketing programs are to be employed. The goals of marketer are hence cost
minimization and sales revenue maximization.

B: Growth- Sales Growth Maximization

Product Development
Market Penetration
Market Development
Diversification

Growth- Companies grow in terns of sales and assets. The goal of the marketer is
maximization of growth in sales. Sales growth is possible by proper marketing
strategies like penetration, market development and diversification.

C: Market Standing- Innovation

Market Leadership
Consumer Satisfaction

Market Standing- Market leadership is the goal of a marketer. A commanding share in

market calls for creativity besides hard work. Innovation is important to attract and
retain consumers. Special focus on consumer satisfaction is also necessary as it is a

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valuable concept, while it is a decisive factor for the success of an enterprise as a goal,
it is also elusive.

D: Image- Brand Image

Company Image

Image- for survival and success, company needs an image. Also its brand requires an
image. Image building requires developmental and socially responsible marketing.
The goal of marketing is creating and fostering brand image as well as company
image.

A book titled ‘Marketing Management’-Text and cases by C.S. Chandershekhar,

TATA MC Graw Hill Education- Page-385 says that the Indian rural market with is
vast size and demand base, offers a huge opportunity that MNC’s can not afford to
ignore, with 128 millions household, the rural population is nearly three times the
urban. The rural market accounts for half the total market for television sets, fans,
pressure cookers, bicycles, washing soaps, blades, tea, salt and tooth powder-what is
more the rural market for FMCG is growing much faster than the urban counterparts.
This is where rural retailing really takes off. Study on buying behavior of rural
consumer indicates that the rural retailers influence 35% of purchase decision;
therefore sheer products availability can affect decision of brand choice, volume and
market share.73

India offers a huge sustainable and growing rural market which can be tapped
effectively through innovative distribution channels with retailing being the most
critical element of this strategy as it is the final touch point and the actual touch point
with the customer, which can be the most critical influence in the buying process.

Some of the myths associated with rural consumers are brand awareness, rural
consumers buy lower priced goods, rural consumers will buy what we sell to them,
rural India has common taste, an innovative use of the products, and rural consumers
buy products more often. In rural India brands rarely fight with each other, they just
have to be present at the right place, many brands are building strong rural base
without much adverting support.

An article published by Institute for the study of languages and culture of Asia and
Africa, Tokyo University of foreign studies, Tokyo Press, Tokyo, Japan 2000, by Mrs.

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Mdhulika Dutta and Mrs Megha Bhatia, Astt. Prof/Sr Lecturer, department of
Management Studies, Institiute of Foregn trade and management explained the
promotion phenomenon and said that 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. Firm should refrain from
designing goods for the urban markets and subsequently pushing then in the rural
market, a brand must associate it wit 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 number so that the brand can be associated with the myriad rituals,
celebrations, festivals, meals and other activities where they assemble.

Rural consumers have a very high level of ethos so all the care should be taken not to
hurt them in any form of advertising. Moreover every efforts should be made by the
companies to promote the “my brand” feel in the minds of consumers. This can be
achieved by connecting the local industries of that place and if possible use it in
packaging as graphics of the product.

Dr. A Sarangpani, in his book named, A text book on rural consumer behavior in
India- A study of FMCG’s thrown light on behavior of rural consumers. And revealed
that rural consumers posses peculiar characteristics which include, that they live in an
environment of their own. Majority of them and are not in a position to understand the
implications of trade and price policies followed by the marketers. Secondly they are
mostly disorganized and do not create enough pressure on traders or government to
bother for their interest, third that they have very low level of literacy, they are
ignorant of their rights as customer, they have low purchasing power, most of them
are least bothered about quality or standard, if the prices are out side the capacity of
rural consumers, goods will be discarded, seasonal buying is also one of the important
habits of the rural consumers because important festivals like Dushera, Diwali,
Sankranti and Holi etc. coincide with the crop seasons, rigid and social religious
customs, climatic considerations, dual ownership due to prevalence of the joint family
systems etc also influence the buying habits of the rural consumers.74

Dr Manjula Jain Director and professor, DMS, IFTM explains that rural market are
estimated to be growing fast compared to the urban market, in recent years rural
markets have acquired significance in countries like China and India, as the overall

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growth of the economy has resulted in to substantial increase in the purchasing power
of the rural communities, rural India with its traditional perception has grown over the
year not only in terms of income but also in term of income thinking. Te rural markets
are growing at above two times faster pace than urban market, not surprisingly, rural
India accounts for 60% of the total national demand. The bottom of the pyramid
marketing strategies and the 4’A’s model of Availability, Affordability, acceptability
and awareness provide us with a means of developing appropriate strategies to tackle
the marketing issues for marketing services in rural areas. The paper also discussed
the challenges limitations and opportunities that are necessary to understand the rural
markets develop strategies to supply and satisfy the rural customers.75

A paper published in India Knowledge @ Wharton on March 8, 2007 in the captioned

of Marketing to Rural India: Making the ends meet, explained about the potential
exists in Rural India. On one side are the fast moving consumer goods (FMCG) and
the consume durables companies. On the other are consumers in rural India,
potentially the largest segment of the market. Finally, the two are coming together.‡

The real fact behind the emerging potential in rural India is not only to build real sales
volumes but the big players recognized the long prospects of having all time, all
dimensions growth in the market. According to MART, organization that offers rural
solutions to the corporate world, says that rural India purchases 46% of all soft drinks,
49% Motorcycles, and 59%Cigarettes and the trend is not limited to basic things but
to luxurious and durables too as 11% of rural females use lipstick.

As per concern of this research, it is a detail study of different FMCG used by rural
consumers. It will provide detail information about consumer’s preferences towards a
good number of FMCG which is too unique and different from those above
researches.

Other Literatures from Internet

Rural marketing is any marketing activity in which one dominant participant is
from a rural area. For the purpose of defining the domain of rural marketing,
“rural” and “urban” can be visualized on a continuum, consisting of three broad

‡
India knowledge@wharton-March 8, 2007. Wharton school of the Univirsity of Pennsylvania.

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groups, namely, rural, rurban and urban. The construct called rurban is the
overlap between rural and urban, with physical features closer to urban areas
and proximity to large urban centers, but with deep rural sociological
moorings. The domain of rural marketing, thus can be seen in a two
dimensional space as a flow of goods, services, and ideas from one area to
another, except in the case of urban to urban flow. A complex set of factors
influence rural consumer’s behavior. Social norms, traditions, caste, and social
customs have greater influence on the consumer behavior in rural areas than in
urban areas. The seasonality of agricultural production influences the
seasonality of rural consumer’s demand. Given the fact that the landless
laborers and daily-wage earners get their income in installments, their
purchasing is restricted to small quantities of products at a time, mostly on a
daily basis or once in tow or three days. (Jha Mithileshwar, 2007)

Tulli (2006) revealed that the rural consumers are very satisfied from price and
quality factors and satisfied from the factors like color, packaging, fragrance,
discount offers etc. The rural consumers are influenced by the electronic media
and print media also. Affordability, local language, simplicity, value pricing
are the factors that are influencing rural markets and have to be taken care by
the marketers (Ramakrishan, 2006)

Chaturvedi (2007) revealed that rural people prefer brand name although price
is also the leading factor that affects the purchase decision of rural consumers.
Durability also attracts the rural customers.

Balaji (2007) the study explores the differences in the consumer’s evaluation of
FMCG brands. Advertisements are very useful in increasing of sales and
majority of respondents have purchased the brand first time on account of
massive TV advertisements. Discounts and sales promotion schemes are one of
the major points of attraction for huge sales. Singh (2007)

Shinde Rajesh (2007), in his studies titled, “Recent Facets of Consumer

Behaviour: A Case of Rural Market”, concluded that, India’s total population is
102 crore of which 71.89crore was of rural India, constituting 70% of the total
population. Inspite of this fact, marketers earlier concentrated on the urban
markets and scheduled their strategy accordingly. But now marketers found

133
different strategies to penetrate in the rural segment. The pioneer corporate was
HLL. Various surveys reveal that average rural household spends almost 60%
of their income on the food, which is reasonably a high amount. The demand
for FMCG in that way was going rapidly high as compared to the urban market.
The market for FMCG is estimated at around Rs. 50,000 crore.

Garg Bhawna (2007), in his studies concluded that, rural markets are growing
rapidly because of social, political and economic changes. Rural consumers are
fundamentally different from their urban counter part. In present scenario hair
oils is one of the many products, which is consumed by the rural consumer
more than their counterpart. The rural consumers consume hair oils as essential
goods. Many companies are marketing their hair oils under different brand
names. This has made it essential to probe in to and analyse the impact of
socio-economic influences in rural consumer behaviour in terms of their buying
practices, brand loyalty and behaviour changes of rural consumers.

India is an agro-based economy and the growth of most of the other sectors of
economy is driven by rural demand. Urban market is reaching towards the
saturation point, thus bringing in and urgent need to focus on rural
development. (Viswanathan 2008)

Banerjee (2009) though there are number of road-blocks in the path of proper
distribution in rural markets, by designing and adopting effective strategies and
proper use of resources, marketers can overcome these barriers and explore the
opportunities lying untapped in rural market to achieve the organizational goal
- profit maximization.

Rajshekar M (2009), in his study titled, “Quest for rural rest” had searched
about the potential of Indian rural market about different toiletry products.
Rural market in India accounts for more than 70 million consumers or 70 % of
Indian population and accounts for 50% of FMCG market. The working rural
population is approximately 400 million and average citizen in rural India has
less than half of purchasing power as compared to urban counterpart. Still there
is an untapped market and most of FMCG companies taking different steps to
capture the different market share.

134
Bijoor (2009), in his article titled, “The Fakes Market” has remarked that fakes
are rampant in rural India. There are spurious brands present in the market. For
Example Bond’s (for Ponds), Fare & Lovely (for Fair & lovely), Likeboy (for
Lifebuoy), etc.

Balsara (2009), in his article titled, “ Brand Loyalty vs. Stickiness” has
concluded that low level of literacy and awareness make rural People less
likely to switch brands as they do not have the required knowledge or
information to exercise a choice. They feel more comfortable in purchasing
tried and tested brands. They are, therefore, ‘brand sticky’ rather than ‘brand
loyal’.

Jain (2009), in his article titled, “Issues related to rural marketing” has
remarked that rural marketing must find its own distinct perspective before
theory construction can begin in the field. After reviewing the literature on
marketing and economic development, it is proposed that development of rural
people should be the perspective of rural marketing.

Rajendhiran (2009), in his report titled, “Rural Marketing – A critical review”

has remarked that the method of promotion needs to be tailored to suit the
expectations of the market. Techniques that have proved to be successful are
Van campaigns, edutainment films, generating word of mouth publicity through
opinion leaders, colorful wall paintings.

R. Piraktheeswar (2010), in his study concluded that, rural market buy small
packs as they are perceive for value of money. There is brand stickiness where
consumers buy a brand out of habit and not really buy choice. Brand rarely
fight for market, they just have to be visible in right place. Even expensive
brand such as close up, marigold biscuit and clinic shampoo are doing well
because of deep distribution many brands are doing well without much
advertising spot Khadi a big detergent brand in north India is in example.

Kashyap (2010), in his book titled, “The Rural Marketing” has said that
villages with clear surveyed boundaries not having a municipality, corporation
or board, with density of population not more than 400 sq. km and with at least
75 percent of the whole working population engaged in agriculture and allied

135
activities would qualify as rural markets. According to this definition, there are
585, 764 villages in the country. Of these, only 0.5 percent has a population
above 10,000. Around 50 percent of the villages have population between 200
and 1,000 and another 18 percent have a population less than 200.

Kashyap (2010), in his book titled, “The Rural Marketing” has remarked that a
number of variables come into play when while trying to map consumer
behavior in rural India. The differences of behavior to the same stimulus
between two localities in the village, between two villages, between districts
and between states, are so large that no single model can be applied blindly to
the whole of rural India.

Authority of rural Development (2010), in its report titled, “Rural Economy”

has said that the rural consumer market, which grew 25 per cent in 2008, is
expected to reach US$ 425 billion in 2010-11 with 720-790 million customers.
The Union Budget for 2010-11 has hiked the allocation under the National
Rural Employment Guarantee Act (NREGA) to US$ 8.71 billion in 2010-11,
giving a boost to the rural economy.

The Economic Times (2010), in its news titled, “Companies eye the purchasing
power of rural youth” has remarked that high degree of awareness facilitated by
communication devices has empowered the youth in the villages. And now
youth has grown to be more aware about the branded products and wants high
quality products.

Purohit (2010), In his study he concluded that Brand names become more
important in some categories but not in others depending on the extent of
information available to customers-brand names are more valuable when
information on fewer attributes is available. Sensory search attributes,
particularly visual cues about the product packaging and design also have
impact on choices. Price sensitivity is higher, but this is due to promotion
campaigns being stronger signals of price discounts.

Radhakrishna (2010), in his article titled, “Rural markets” has remarked that,
India Inc. is witnessing an emerging paradigm shift in rural marketing. India
has traditionally been an agrarian economy. Rural sector was the only one

136
which withstood the global economic down turns and continues to grow. For
many companies, rural market contributed almost 50% of their total sales
revenue. Companies have well realized that if growth is the only option, rural
market is the only way to grow ahead. And the organizations who that take
initial steps and leaps in the approach will benefit from the first mover
advantage, gain brand loyalty and better business growth.

Ramanujan (2010) in his study explores the suitability of Gandhian model as a

possible remedy for the various socio-economic problems in rural India.
Uncontrolled, unplanned and un-regulated industrialization and urbanization
have led to many disastrous consequences. Gandhian vision of village republic
therefore, seems to provide a credible alternative for rural India. It is high time
that policy makers and intellectuals of India look seriously at the issues relating
to rural development. In his another study “Gandhian Thought on Rural
Development” he concluded that It is time to solve rural problems first in order
to solve our national problems. Relevance of Gandhian thought has increased
with the passage of time. Gandhian vision of village republic therefore, seems
to provide a credible alternative for rural India. It is high time that policy
makers and intellectuals of India look seriously at the issues relating to rural
developemt. Gandhi’s message of “back to the village” is still relevant for us
because “India begins and ends in the villages.”

Business and Management Chronicle (2011), in its article titled Consumer

Space in Rural Markets stated that the dynamic trend of consumerism in India
is gradually shifting from urban to rural India. Gone are the days when
companies in the consumer space would be content with the huge number of
consumers in fact they are leveraging on their product portfolio. In the past few
years the growth in sales of products for companies in the consumer space in
rural markets has been faster than urban markets.

Bhattacharjee (2011) in his study revealed that influence of media in the

purchase of FMCG seems to be similar for both the rural as well as the urban
households in different income classes and types. It is found that media has
considerable influence upon the rural folks. With the increasing rate of literacy,
print media in the form of newspapers, magazines etc are also gaining

137
popularity in the rural context. It is for the marketers to understand the
implications of the influence of the various media and utilize the appropriate
media applicable for marketing their products, especially to the rural areas.

MNCs in Rural India: At a Turning Point (2010) yet now there's a shift in how
MNCs look at their entire rural India investments beyond CSR. With growth
drying up in developed markets and their center of gravity shifting to emerging
markets, MNC businesses in India are under pressure to prove that their rural
strategies aren't just about doing well from a CSR perspective. They also need
to show head office that these strategies are doing well from a business
perspective. In short, the strategies must start delivering top- and bottom-line
results. In fast-moving consumer goods, for example, MNC products are
capturing a sizable portion of rural consumer spending in a number of areas,
with year-on-year increases in rural spending in 2009 on MNC shampoos
(70%), washing powder (60%) and toothpaste (112%), say researchers at
IMRB. What's more, they say, the average spending on these products is
growing faster in rural than in urban markets. In rural areas, finding the magic
price points that don't eat into margins yet boost volume is an ongoing battle,
with a lot hinging on distribution. The rural incubation work of multinationals
is part of their business. The companies need to be less focused on [year-on-
year] success and spend more energy on building innovative solutions and
business models for this segment.

Winning over India's Rural Consumers (2010), That is a question many

multinationals have been asking since rural India emerged as an important
market not just for local companies but for global firms seeking new sales
opportunities amid the global economic slump. Multinationals such as Coca-
Cola Co. and Cadbury (now part of Kraft Foods Inc.) are trying to crack this
market with television advertisements specifically targeted at rural consumers.
Yet product consumption remains low in rural India despite the fact that the
area is home to half of the country's total disposable income, according to 2008
report from FICCI-Price water house Coopers. There are televisions in an
estimated 26% of India's 145 million rural households, according to a recent
NSSO survey.

138
LG Electronics: Rural Is the Future (2010): Not only in India, in all emerging
markets the rural sector has been very important. In terms of population and
numbers of households, rural has become the future. It has become very critical
for LG to grab mindshare by catering to all segments. About 73% of India's
population lives in rural areas [and] 35% of the rural population own a color
television set, 5% own refrigerators and 1% own a washing machine.
Disposable incomes in rural areas have gone up considerably, primarily
because the domestic market has maintained a healthy growth rate, despite the
recession worldwide. Over the next five years, as the economy continues to
grow, we expect disposable incomes to go up even further.

Winning over India's Rural Consumers (2010): Multinationals such as Coca-

Cola Co. and Cadbury (now part of Kraft Foods Inc.) are trying to crack this
market with television advertisements specifically targeted at rural consumers.
Yet product consumption remains low in rural India despite the fact that the
area is home to half of the country's total disposable income, according to 2008
report from FICCI-PricewaterhouseCoopers. There are televisions in an
estimated 26% of India's 145 million rural households, according to a recent
NSSO survey. Effectively pitching a global brand to a rural household requires
more than just a catchy phrase or a Bollywood face.

Consumers in Rural Areas Care for Value (2010): More than Price Colgate and
Philips have invested right from the beginning in rural India, saw the value of
the market, developed products that were useful for the rural market, went into
the rural markets with their distribution systems, and were very successful. In
fact, the rural market always provided them with a nice buffer they could bank
on. A significant part of their sales came from the rural market. These
companies have been in rural markets for more than 50 years now.

Rural Calling: Can Nokia Sustain Its First-mover Advantage? (2010): Nokia's
first mover advantage in rural India is being chipped away. Both home-grown
and foreign rivals are muscling in on Nokia's rural territory, beating it down on
price. All eyes now are on Nokia, as it rolls out innovative services that can be
sold alongside its handsets through a range of partnerships. Nokia was the first
mobile phone maker to set up a satellite R&D center in India as it began

139
tailoring products for the rural terrain. The phones look as sleek as high-end
models, but are also sturdy to withstand rough usage. They have seamless
keypads to protect them from dust and special grips to make them easier to
hold in India's humidity. Some phones – Nokia 1200 and Nokia 1208 -- also
double up as flashlights because of rural India's frequent power outages. Nokia
has also embraced the country's plethora of languages, with interfaces in Hindi,
Marathi, Kannada, Telugu and Tamil.

Dutta (2011) his study leads to the conclusion that in order to utilize the
immense potential of rural markets in India, companies need to develop
specific marketing strategies and action plans, taking into account the complex
set of factors that influence consumers’ behavior. Rural Marketing cannot
succeed if the marketing strategy and action plans are only an extrapolation of
urban marketing strategies. Innovative companies who adopted an integrated
approach have succeeded in utilizing marketing opportunities that rural areas
offer.

Neelmani (2011) in his findings stated that Consumer’s attitude to the Private
Labels has been a very important research area in the modern consumer
behavior study. Private Label Brands in India is in early phase and is all set to
grow by leaps and bounds. The market size of private label brands will expand
and therefore a lot of innovativeness and competition will creep in this
segment. All these developments in the Private Labels segment would render
the consumers with more choices.

Malik Garima (2011), In her book titled, “Introduction to rural marketing”

remarked that, the Indian rural market is witnessing a boom of late, all very
thanks to the saturation being witnessed by the urban counterparts and with the
advent of economic slowdown in the economy, the corporates are now on a
hunch to look out for greener pastures where it can sell their offerings at
reasonable profits. There is an intense competition in the market and none of
the corporate wants to lose the golden opportunity offered by the great Indian
rural market.

140
Memon (2011) in his study revealed that The Indian rural market is known to
all the International FMCG Brands but sometimes rural consumers are very
choosy in selecting the brands especially in the consumable sector.

Muthukumaran (2011) concluded that the Indian Restaurant industry has come
of age by diversifying its services and trying to cater to Indian rural taste buds
and is staying in the competitive arena amongst international giants and is able
to provide better services to the customers.

Pallavi (2011), in her research concluded that companies across different

sectors are now approaching rural markets with attractive incentives to ensure
targeted sales. The income of Rural Population in India and their purchasing
power has augmented in recent years. The companies have to ascertain their
needs and desires in order to exploit vast potentials of rural markets with
suitable marketing strategies. Overall backwardness, preference for
conventional way of life of the rural people etc. are some factors, which must
be tackled aptly, as these have been hindering the growth of companies in the
rural regions. Companies have to find ways to cater to the rural markets by
taking into account the 4 As i.e., affordability, awareness, availability and
acceptability.

Rita (2011) stated that People in urban areas have various sources to get the
knowledge about the investment avenues but the rural still stick to the
traditional investment avenues. The rural people must be motivated and given
wider information on investment opportunities in India so as to change their
attitudes and preferences. By doing so the rural people will be more educated
and the economy growth will also be effected.

Vani (2011) in her study concluded that consumer behavior models are
essential for companies and researchers to analyze the rural consumer behavior
perfectly. The decision making for buying process have to be analyzed properly
to study the behavior of rural consumers towards the products they purchase.

This opportunity must be fully utilized to bridge the rural urban divide, using
knowledge as a tool. As such, there is a need to focus on Empowering Rural

141
India and one of the ways that this can happen is through a strong and
transforming agri-marketing. (Kalam 2005)

The studies reviewed in this chapter provide very useful clues about rural
marketing, as well as, about different aspects related to it. One may easily get
newer insights; say the importance of marketing-mix and the issues related to
4-As of rural marketing etc.

Accordingly, for this study the objectives and the hypotheses were largely the
outcome of this review. Further, the issue of indigenous support-system
emerged on the basis of discussions with the supervisor. This is how the
methodology was chosen and the survey was carried out.

Of course, no studies related to rural marketing in Uttarakhand were available,

so the maximum reliance had to be placed on the primary data.

142
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care_industry_guide_2011?productid=0787E99D-9BBF-4CF1-81B2-
B56A0CFFE08B

http://www.ctfa.org/global-strategies/expanding-india%E2%80%99spersonal-
care-market

http://www.chemexcil.gov.in/IndianScenario.aspx

http://www.greenworldinvestor.com/2011/04/04/fast-moving-consumergoods-
fmcg-manufacturers-in-india-defensive-with-growthcharacterizes-
indias-non-discretionary-consumer-stocks-
fmcgcompaniesbrandsindustry

http://www.rncos.com/Press_Releases/Indian-Hair-Care-Market-Shows-
Enormous-Growth-Prospects.htm

http://www.rncos.com/Report/IM192.htm

http://www.thehindubusinessline.com/industryandeconomy/marketing/article1
684908.ece

http://articles.timesofindia.indiatimes.com/2011-02-
03/indiabusiness/28379619_1_rural-sales-rural-consumers-urban-
markets

http://www.indianmirror.com/indian-industries/soap.html

http://www.ibef.org/artdispview.aspx?in=78&art_id=30474&cat_id=938&pag
e2

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http://creativeworld9.blogspot.com/2011/03/abstract-on-ruralmarketing-in-
india.html

http://vrittivaani.wordpress.com/2011/04/11/trends/

http://www.oppapers.com/essays/Rural-Marketing-Of-Dabur/755694

The Wall street Journal: MNCs in Rural India: At a Turning Point (2010):
http://online.wsj.com/article/SB127296168752486467.html

The Wall street Journal: Winning over India's Rural Consumers:

http://online.wsj.com/article/SB127297096640586523.html

The Wall street Journal: LG Electronics: Rural Is the Future:

http://online.wsj.com/article/SB127313731105787137.html

The Wall street Journal: Winning over India's Rural Consumers:

http://online.wsj.com/article/SB127297096640586523.html

The Wall street Journal http: Consumers in Rural Areas Care for Value
http://online.wsj.com/article/SB127314501148487449.html

The Wall street Journal: Rural Calling: Can Nokia Sustain Its First mover
Advantage http://online.wsj.com/article/SB127296947929886511.html

www.thehindubusinessline.com/nic/073/index.htm

www.coolavenues.com/know/mktg/

www.indianmba.com/Faculty_Column/FC658/fc658.html

business.mapsofindia.com/rural-economy/statedevelopment/marketing.html

www.icmrindia.org/casestudies/catalogue/Marketing/MKTG081.htm

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“I have believed and repeated times without number that India is to be found not in its
few cities but in its 700000 villages.”
-Mahatma Gandhi

Chapter- 5
RESEARCH
METHODOLOGY
 RESEARCH METHODOLOGY

This chapter of the study describes in detail the methodology used to carry out this
research. This research can be categorized as exploratory-research; hence, it is the
foremost task of the researcher to explore the rural marketing in a number of ways,
such as in terms of its Marketing-mix, Promotion-mix, and the Physical Distribution
network in respect of FMCG and its penetration. The chapter also includes the
description of techniques and tools used for data collection and statistical analysis of
data collected through these tools and techniques. The whole chapter comprises the
following sections:

5.1. Objectives of the study.

5.2. Major Hypotheses, including assumptions.

5.3. Selection of Universe.

5.4. Sampling method and sample size.

5.5. Operational Definitions.

5.6. Designing of tools and techniques.

5.7. Analysis of Data.

5.8. Limitations of the study.

5.1 OBJECTIVES OF THE STUDY

The study is focused on to explore various aspects of Rural Marketing in

Uttarakhand, in terms of its practices and problems in respect of FMCG. Therefore,
the objectives of the study are framed in a manner that both the major components of
rural marketing in Uttarakhand, rural consumers and rural retailers can be analyzed.

In view of the above, the following objectives of the study have been framed;

1. to explore the marketing-mix (i.e. Product, Price, Place and Promotion) with
regard to rural marketing;

2. to identify the problem-areas with regard to rural marketing in Uttarakhand with

special reference to destruction of the indigenous support-system.

3. to explore the significance of FMCG among rural households in Uttarakhand.

151
4. to propose a prospective plan of action with regard to rural marketing in
Uttarakhand.

5.2 MAJOR HYPOTHESES

In order to attain objectives of the study, the following hypotheses have been framed;

Hypothesis 1: ‘Rural consumers are equally induced by urban dimensions of

marketing-mix, i.e., the ‘4 Ps’ of marketing’.
Hypothesis 2: ‘The current marketing approach of marketers is balanced with regard
to penetration of FMCG in rural markets’.
Hypothesis 3: ‘The current marketing approach doesn’t strengthen the indigenous
support-system of the rural society and economy’.
Hypothesis 4: ‘The FMCG have become an essential part of rural households’.

Further, these hypotheses have been elaborated with certain assumptions;

HYPOTHESIS-1
H0: Rural Consumers are equally induced by the urban dimensions of marketing-mix,
i.e., the ‘4 Ps’ of marketing.
H1: Rural Consumers are not equally induced by the urban dimensions of marketing-
mix, i.e., the ‘4 Ps’ of marketing.

In the above hypothesis, the following four assumptions have also been hypothesized
to test it:
1. Assessment of influence of product on rural consumers with regard to FMCG may
measure its impact in rural market;
i) Quality doesn’t affect the buying behavior of rural consumers.
ii) Customized/Modified/Altered products are not accepted in rural market.
2. Assessment of influence of price on rural consumers with regard to FMCG may
measure its impact in rural market;
i) Price doesn’t affect buyer behavior/decision making of rural consumers.
ii) Rural consumers are not price-sensitive.
iii) Rural consumers prefer cheaper products.

152
3. Assessment of Place (Distribution) in rural market with regard to FMCG may
measure its impact on rural consumers;
i) Consumers are satisfied with the availability of FMCG in the villages.
ii) All preferred brands are available to rural consumers.
iii) Distribution is the major problem in rural market.
4. Assessment of promotion or promotion-mix in rural market with regard to FMCG
may measure its impact on the behavior of rural consumer.
i) Promotion has no impact on buying behavior of rural-consumer.
ii) Television, Radio and Internet are not effective in promotion amongst rural
consumers.
iii) Rural Consumers are aware about the products and brands.

HYPOTHESIS 2:
H0: “the current marketing approach of marketers is balanced with regard to
penetration of FMCG in rural market”
H1: “the current marketing approach of marketers is not balanced with regard to
penetration of FMCG in rural market”
To test this hypothesis, following four assumptions have been hypothesized:
i) Firms offer different products to rural consumers.
ii) Buying pattern of rural households is different as that of the urban consumers.
iii) Rural consumers are not aware about the products and brands.
iv) All preferred brands are available at local shops.

HYPOTHESIS 3:
H0: “The current marketing approach doesn’t strengthen the indigenous support-
system of the rural society and economy”
H1: “The current marketing approach is favorable to the indigenous support-system
of the rural society”
In order to test this hypothesis the following four assumptions have also been
hypothesized:
i) Modern marketing has significantly improved the life of rural consumers.
ii) Modern FMCG have no negative impact on customs, traditions and patterns of
villages.

153
iii) Consumption of Modern FMCG has disturbed the economic independence of
villages.
iv) Modern marketing is making rural consumers its slaves.

HYPOTHESIS 4:
H0: “The FMCG have become an essential part of rural households.”
H1: “The FMCG are not required in rural households”
In order to test this hypothesis, the following four assumptions have also been
hypothesized:
i) FMCG are not essential for rural households.
ii) Branded products are more popular in rural market.
iii) FMCG are the substitute to local options.
iv) Growth of FMCG is insignificant in rural areas.

5.3 SELECTION OF THE UNIVERSE:

Uttarakhand is a fast growing state with most of the growth taking place in the
industrial and services sectors. Although more than half of the workers are engaged in
agriculture, its share in GSDP was 27.01 per cent only while the share of secondary
and tertiary sectors was 29 and 44 per cent respectively. This fact has also been noted
by NCAER in their Uttarakhand Draft Development Report.
For selection of the universe various other factors were assumed to be relevant and
effective for the proposed research. These are relevance to whole Uttarakhand, equal
representation of both the administrative divisions of the state as well as equal
representation of rural people living in plains and hilly villages, as Uttarakhand
comprises both types of topography, i.e., plain areas as well as, the hilly areas.

Another factor to be kept in mind was related to the existence of sharp regional
disparities between different areas of the State, especially the more remote and
interior hill areas being economically quite backward. Thus, Nainital or Dehradun
account for a very high per capita income, while the interior areas of Uttarkashi,
Pithoragarh, Chamoli or Bageshwar have wide ranging poverty.

Therefore, the selection of Nainital and Udham Singh Nagar districts was done, as
Nainital is a completely hilly district and treated as a complex district in Uttarakhand
by the marketers and it is also less populated. On the other, Udham Singh Nagar

154
represents a network of well-connected villages and it has comparatively the most
developed villages. Both these districts represent the Kumaun Division as well.

Table: 5.1
Districts and Blocks in Uttarakhand

Garhwal Division Kumaun Division

S.N. District Blocks S.N. District Blocks

1 Dehradun 6 8 Almora 11
2 Haridwar 6 9 Bageshwar 3
3 Chamoli 9 10 Champawat 3
4 Rudraprayag 3 11 Nainital 8
5 Tehri Garhwal 9 12 Pithoragarh 7
6 Uttarkashi 6 13 Udham Singh Nagar 7
7 Pauri Garhwal 15
Total 13 Districts, 93 Blocks
Source: Deputy Director, Money and Statistics, Uttarakhand (as per census 20011).

Out of these 13 districts, the study restricted to four districts only, i.e., Dehradun,
Uttarkashi, Nainital and Udham Singh Nagar. The reasons for selecting these four
districts for study are:

i) Deharadun and Udham Singh Nagar are the districts having plains and hills both.
Both the districts are the most developed in Uttarakhand. Therefore, an analysis of
these two districts was surely expected to give the relevant results, say, to what extent
rural marketing is able to penetrate the villages of these two districts, and the ways
through which rural marketing is affecting the living standards of the residents of
these villages. In other words, it refers to the potential of these two districts for the
purpose of this research.

ii) Nainital and Uttarkashi districts represent the socio-economic life and culture of
Uttarakhand and have the villages which are very developed and the ones which are
located in the remotest parts of the state so much so that their distance is more than 15
kms from the main road. Therefore, considering these districts as difficult locations of
Uttarakhand, the study has been carried out.

155
Therefore, taking into account the above facts, it considered logical to study these
districts. Study of these districts was expected to offer a comparative analysis of the
villages which are easily accessible with the villages which are difficult to approach.

In above table 4.1, it is depicted that, in Kumaun Division, Nainital and Udham Singh
Nagar districts were selected to collect the data, while in Garhwal Division Dehradun
and Uttarkashi districts were selected to collect the sample. The selection of blocks
from these districts was as follows:

I. Nainital District : Bhimtal Block

II. Udham Singh Nagar : Rudrapur Block

III. Dehradun District : Vikas Nagar Block

IV. Uttarkashi District : Chinyali Saud Block

5.4 SAMPLING METHOD AND SAMPLE SIZE:

To carry out this research in the chosen manner and to get the ideally representative
results, selection of villages from all the four districts was done on the basis of
stratified judgmental sampling, in which the list of all revenue villages was taken
from the Block Development Office of the respective block of the district and it was
matched with the list of villages available from the Directorate of Economics and
Statistics, of the respective district headquarter.

Selection of the villages is done through stratified judgmental sampling. Below is the
tabular presentation of the sampling method applied for the study:

Table: 5.2
Selection of villages: Sampling Method

Total Total
Sr. Selected Block in Basis of
Division Villages in Villages
N. Districts District Selection
the block Selected
1 Nainital Bhimtal 110 1 out of each 10 11
Kumaun
2 U. S. Nagar Rudrapur 89 1 out of each 10 9
3 Uttarkashi Chinyali Saud 101 1 out of each 9 11
Garhwal
4 Dehradun Vikasnagar 59 1 out of each 7 9
Total 4 Districts 4 Blocks 359 40

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The main objective of the research was to identify and to analyze the Practices and
Problems of Rural Marketing in respect of Fast Moving Consumer Goods, hence it
was imperative to know the expectations and requirements of the rural consumers and
at the same time to understand the functioning and the ways of the marketer, to meet
the expectations and requirements of the rural masses. Keeping these facts in view, it
was identified that there were the three main parties involved in Rural Marketing, i.e.,
Consumers, Marketers and the Intermediaries. So to carry out this research these were
being grouped in two sections; i.e., ‘Rural Consumers’ and ‘Marketers and the
Intermediaries’.

The total sample size was 400 and 300 respondents were the consumers taken in the
first section, out of which 75 Consumers are selected randomly from each selected
block of each district. Here, consumers refer to a rural family and head of the family
was contacted for survey. In the Second section of Rural Marketers and
Intermediaries total 100 respondents were selected, i.e., 25 respondents from each
selected block from each district. Selection of the block/villages was based on the
population, infrastructural facilities and the marketing potential in selected blocks.

Table: 5.3
Dehradun

Distt. Block Strata Village Consumers Marketers

1 Dehradun Vikas Nagar 1 to 8 Jeewan Garh 8 3
2 Dehradun Vikas Nagar 9 to 16 Badamawala 8 3
3 Dehradun Vikas Nagar 17 to 24 Bulaki Wala 8 3
4 Dehradun Vikas Nagar 25 to 32 Jassowala 8 2
5 Dehradun Vikas Nagar 33 to 40 Chandpur Khurd 9 2
6 Dehradun Vikas Nagar 41 to 48 Tipar Pur 8 3
7 Dehradun Vikas Nagar 49 to 56 Khuhaad 9 3
8 Dehradun Vikas Nagar 57 to 64 Babu Garh 9 3
9 Dehradun Vikas Nagar 65 to 72 Rasoolpur 8 3
75 25

157
 Table: 5.4
Udham Singh Nagar

Distt. Block Strata Village Consumers Marketers

1 U.S. Nagar Rudrapur 1 to 9 Bhoora Rani 8 3
2 U.S. Nagar Rudrapur 10 to 19 Rampura 11 3
3 U.S. Nagar Rudrapur 20 to 29 Bhamraula 7 3
4 U.S. Nagar Rudrapur 30 to 39 Lalpur 8 3
5 U.S. Nagar Rudrapur 40 to 49 Jawahar nagar 7 2
6 U.S. Nagar Rudrapur 50 to 59 Bhoora Gauri 9 3
7 U.S. Nagar Rudrapur 60 to 69 Khurpia 9 3
8 U.S. Nagar Rudrapur 70 to 79 Bakhpur 7 2
9 U.S. Nagar Rudrapur 80 to 89 Bari 9 3
75 25

Table: 5.5
Uttarkashi

Distt. Block Strata Village Consumers Marketiers

1 Uttarkashi Chinyali Saud 1 to 9 Ban Gaon 7 2
2 Uttarkashi Chinyali Saud 10 to 18 Mathali 7 2
3 Uttarkashi Chinyali Saud 19 to 27 Bagi 5 3
4 Uttarkashi Chinyali Saud 28 to 35 Kandi 6 2
5 Uttarkashi Chinyali Saud 36 to 45 Shrikot 7 3
6 Uttarkashi Chinyali Saud 46 to 54 Nagri Bari 7 2
7 Uttarkashi Chinyali Saud 55 to 63 Chinyali 7 3
8 Uttarkashi Chinyali Saud 64 to 72 Khand 7 2
9 Uttarkashi Chinyali Saud 73 to 81 Tulyara 8 2
10 Uttarkashi Chinyali Saud 82 to 90 Bagori 7 2
11 Uttarkashi Chinyali Saud 91 to 104 Gadwal Garh 7 2
75 25

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 Table: 5.6
Nainital

District. Block Strata Village Name Consumers Marketers

1 Nainital Bhimtal 01 to 10 Bajoon 4 2
2 Nainital Bhimtal 11 to 20 Mangoli 7 3
3 Nainital Bhimtal 21 to 30 Jeoli 7 2
4 Nainital Bhimtal 31 to 40 Jeolikote 8 3
5 Nainital Bhimtal 41 to 50 Mehragaon 8 3
6 Nainital Bhimtal 51 to 60 Bharatpur 5 0
7 Nainital Bhimtal 61 to 70 Jangalia Gaon 9 3
8 Nainital Bhimtal 71 to 80 Dolmar 9 2
9 Nainital Bhimtal 80 to 90 Amritpur 8 3
10 Nainital Bhimtal 91 to 100 Okhal Dunga 5 2
11 Nainital Bhimtal 101 to 110 Pinrao 5 2
75 25

5.5. OPERATIONAL DEFINITIONS:

The major emphasis was given to the perspective of rural consumers and rural
marketers as well as the intermediaries from the nearby feeder towns supplying these
products to the villagers. In this research following are the operational definitions;

Rural: In this research, researcher has accepted the definition of rural or as it is

defined by the Directorate of Census Department, Uttarakhand, the directorate decides
rural areas and defines these from time to time. In its records the inhabitations
referred to as rural were accepted. People living together at place whose total
population is less than 500 and the administrative radius is 1 km. is treated as village
in Nainital and Uttarkashi districts, while in Dehardun and in Rudrapur districts this
limit is up by 1000 people and 1 km respectively.

FMCG and their Categories: Fast moving consumers goods are also known as
packaged goods in modern marketing. These are the items of daily use consumed and
budget on a regular basis. The present research also accepts the same meaning of
FMCG in all its aspects. Since the range of FMCG is a vast, hence in order to limit the
range from out of the various categories of FMCG categories were made to meet the
objectives of this research. These are as follows:

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1. Soaps (Beauty & Bathing)
2. Biscuits & Confectionary
3. Tooth paste & Powder
4. Personal care products
5. Tea, Coffee & Beverages
6. Detergent and Cakes
7. Hair oil & Shampoo
8. Personal & Hygiene products

Consumer: In this research consumer represents a single respondent from a family,

whether it is nuclear or a joint family. All the responses were collected on this basis
only and the assumption for this decision was that in rural Uttarakhand, in most of the
cases, the purchase decisions are taken by head of the family as and when required. In
order to arrive at the more accurate and relevant information it is decided to consider
the experienced and responsible person of the family to be interviewed who could
provide the maximum information to the researcher.

Marketer: the established concept of the marketer does not apply to rural retail
shops. These are just the selling points, though somewhat of a permanent nature.
Thus, in this research the expression ‘Marketer’ is restricted to a person who is has
any type of shop/stall/establishment in the village and is engaged in selling the
products of daily-need. Small intermediaries supplying goods to next lower level of
sellers have also been taken as marketers. All the information regarding rural
marketing in Uttarakhand from the perspective of the marketers is provided by these
people.

Others: apart from the consumers and marketers who were the source of primary data
collection, many other key persons were contacted and interviewed to understand the
dimensions of rural marketing to support the primary data. These people were usually
the super-stockiests of nearby feeder towns, Departmental Heads of many government
organizations, Villages Developments Officers and many others. Reponses of these
persons were collected through interviews and discussion on different aspects of rural
Uttarakhand and incorporated as and where needed in the analysis.

160
5.6 METHODS OF DATA COLLECTION, TOOLS AND TECHNIQUES:

As the research is exploratory in nature, in view of the objectives of the research,

interview-schedule for consumers and marketers was developed. These schedules
were peer-reviewed, pre-tested and standardized with the help of experts, peers and
supervisors.

To attain the objectives of the research in a qualitative manner, it was felt that a
structured schedule is the best way to get timely response in terms of quality as well
quantity. Use of structured schedules also eliminated the risk of misunderstanding of
the questions and the responses, as well. Therefore, two structured schedules were
designed to explore the correct responses from both the sets of respondents.

On the basis of respondents’ nature, two separate schedules were developed, to

collect data separately from consumers and marketers because rural marketing is
more practical and behavioral. The responses also tend to deviate with each span of
time hence, all the data was collected in a span of 4 months from November 25, 2013
to March, 2014.

Schedule-I (Rural consumers):

The interview schedule for rural consumers had 28 questions, which were classified
in five sections. Section-1 contains the background information of the respondents,
viz., age, educational qualification, annual income, family size and source of income.
The other four sections included questions covering all the aspects of buying behavior
of rural people, existing patterns, purchase-motivators, consumption-patterns and the
other related aspects included in the objectives of research.

The answers were recorded in the form of exclusive responses, coded responses,
rating scale and in dichotomous responses.

Schedule-II: (Marketers and Intermediaries): The schedule for marketers and

intermediaries is divided in four sections. Section-I included personal details of the
respondents, and the remaining three sections had questions related to different
aspects of rural marketing to be covered as per the objectives of research. Rating,
value and coded responses were noted during execution of the schedule. Also, a few
informal open ended questions were incorporated to know the opinion of the
respondents, and to understand their viewpoint.
161
Apart from the primary data collected through interview schedules, secondary data
was also used to support the analysis as and where needed. In the research, secondary
data was collected though various published/unpublished reports of various
public/private departments, Institutes, NGOs, Journals, Magazines, Newspapers and
internet to support the facts and results obtained through primary data.

5.7 DATA ANALYSIS:

After completion of data collection, the variables and values were identified and a
structure was prepared on excel sheets for depiction of responses collected through
schedules. In all, two structures were developed, one for the consumers and the other
for the marketers.

Data collected through primary sources was presented in the detailed structure data
sheet and processed through SPSS 17. The classification of data was produced by the
SPSS in tabular forms. Later, further statistical processing is done with the help of;
1. Frequencies/Cumulative Frequencies
2. Factor Analysis
3. Cross Tabulation (Chi Square)
4. Percentage/Average Percentage
5. Ranking method
6. Correlation

Initially, the justification for use of factor-analysis as established and it is duly

recorded in the chapter on analysis. It revealed the factors which have some
meaningful bearing on the analysis.

Similarly, chi-square was used to test the hypotheses with the help of relevant
hypothesized assumptions. In the end s summary was prepared to decide whether a
hypothesis could be accepted or otherwise.

All these techniques were used to identify the linkages amongst various variables.
Presentation in the form of tables, graphs, figures and pie charts was also made to
ensure proper exhibition of the analysis.

162
5.8 LIMITATIONS OF THE STUDY:

Though, utmost care has been taken before and during the progress of this research to
achieve the proposed objectives in scientific manner, but some of the constraints were
spontaneous which, become limitations of this research. Accordingly, some of the
limitations can be summarized as below:

1. This study is restricted to the state of Uttarakhand state only which is different in
a number of ways viz., topographically, geographically, culturally and
demographically. Hence, the relevance of this study and the results obtained
through this research may not be equally applicable to rest of the states or it can
not be applied at the national level.

2. Again, this research tried to evaluate the rural marketing practices only in the
FMCG sector, and it has not analyzed any other aspect of rural marketing like
marketing of agri-produce, crop-marketing, and marketing of durables.

3. Though, the sample size is appropriate, but it is limited to a total number of 400
respondents only, and the districts, blocks as well as the villages were also limited
in view of the nature and size of this work.

4. Though the rural consumers were aware about the products, ad-campaigns, ad-
messages but they did not know anything about rural marketing. Instead they
were more interested in revealing their problems either due to marketing or the
other reasons. Some of the problems revealed by them have been used in this
dissertation. So no-understanding of the respondents was the general limitation. It
did not limit the quality of responses or the analysis.

5. Local language of the people was sometimes a constraint during the conduction of
responses, because in some cases people were unable to understand what exactly
the researcher meant but it was also a non-influencing limitation.

6. Time is the major limitation for any activity of this nature since rural marketing is
a wide subject to explore unlimited prospects but due to time constraint this
research was based on a selected few.

Barring the above limitations, the research is free from any other such limitations
restricting the quality of analysis. The research made all the possible efforts to
minimize the impact of limitations, the above mentioned or otherwise.
163
REFERENCES

1.
http://en.wikipedia.org/wiki/Uttarakhand dt 03/05/4014 map of Kumaun and
Garhwal
2.
"Uttarakhand: The State Profile", PHD Chamber of Commerce and Industry,
Retrieved 17 July 2012.
3.
Saunders, M. Lewis, P and Thornmill, A. (2000), ‘Research Methods for Business
Students’, Third Edition, Essex, Pearson Education Limited.
4.
Graziao, A.M. and Raulin, M.L. (1997), ‘Research Methods- A Process of
Inquiry’. 3rd edition, New York: Addison-Wesley Educational Publisher Inc.
5.
Kothari, C.R., ‘Research Methodology-Methods and Technique’, (2004), New
Age International.
6.
Banerjee Shobhit, Roy Ramendu, ‘Fundamentals of Research Methodology’,
(2008), Published by Kitab Mahal Agencies, Allahabad.

164
“I would say that, if the village perishes, India will perish too. India will be no
more India. Her own mission in the world will get lost. The revival of the villages
is possible only when it is no more exploited. Industrialization on a mass scale
will necessarily lead to passive or active exploitation of the villagers as the
problems of competition and marketing come in.”
-Mahatma Gandhi

Chapter- 6
ANALYSIS AND
INTERPRETATION

151
 ANALYSIS AND INTERPRETATION

The study is an attempt to look into the minds of rural consumers in Uttarakhand.
Extensive surveys, for this research, were carried out in two districts of Kumaun and
two of Garhwal region. Rural markets in the state are important for the marketers
because more than 70% of the people in Uttarakhand live in villages. Disposable
incomes of rural consumers has gone-up significantly in the recent past and the entry
of digital media and the internet in villages is likely to enhance the scope of business
in rural markets. The study seeks to highlight the significant issues related to the
buying behavior of rural consumers. The results may help marketers in designing their
strategies for rural markets. Uttarakhand’s market largely depends for its supply on a
few major destinations in foothill areas, these are Haldwani and Ramnagar, in
Kumaun Region; Kotdwar, Rishikesh, and Dehradun in Garhwal Region. There exist
a few more small towns which act as the feeding towns, but they are not so
significant. This character highlights an important fact that whatever is supplied by
these dealers located in these feeding towns the same is available for the rural
consumers up the hill.

Keeping in view this characteristic, this study was spread into two dimensions, i.e.,
from the angle of marketers and from the angle of the rural consumers. Accordingly,
two sets of questionnaire-schedules were prepared; one for the rural consumer, and
the other one for the marketers. Both the questionnaire-schedules have been
separately analyzed to highlight their relative and individual impact.

6.1 PART-A: PERCENTAGE AND CUMULATIVE PERCENTAGE BASED

ANALYSIS

i) Analysis of the Responses of Rural Consumers

In this section the responses of rural consumers have been analyzed. In all, 40 villages
were selected from out 359 villages existing in 4 blocks of 4 districts in Kumaun and
Garhwal division. The location of villages is equally divided between the two
divisions, i.e., 20 villages were selected from the Kumaun Division and 20 from the
Garhwal division. Again, the representation of hilly areas was that of 22 villages (11
each from Kumaun and Garhwal) and 18 from the plains (9 each from Kumaun and

165
Garhwal). The profile of the villages identified for the study is given below in table
6.1;

Profile of the Villages

Table: 6.1
Location of Respondents

Selected Total Total

S. Selected Basis of
Division Block in Villages in Selected
N. Districts Selection
District block Villages
1 out of each
1 Nainital Bhimtal 110 11
10
Kumaun
1 out of each
2 U. S. Nagar Rudrapur 89 9
10
Chinyali
3 Uttarkashi 101 1 out of each 9 11
Garhwal Saud
4 Dehradun Vikasnagar 59 1 out of each 7 9
4 Districts 4 Blocks 359 40

One block each was selected for each of the four districts of Dehradun, Uttarkashi,
Nainital and Rudrapur. One village for every ten villages in each block was selected
for data collection and 75 respondents were interviewed in each district making the
total to 300 respondents. Thus, the sample-size was adequate to arrive at the
conclusions. The sample is enumerated in table 6.2.

Table: 6.2
Number of Respondents

Valid Cumulative
Frequency Percent
Percent Percent
Valid Dehradun 75 25.0 25.0 25.0
Rudrapur 75 25.0 25.0 50.0
Uttarkashi 75 25.0 25.0 75.0
Nainital 75 25.0 25.0 100.0
Total 300 100.0 100.0

Demographic Profile of Respondents:

Out of the total 300 respondents there were 86.3% males and the ratio of females was
only 13.7%. Similarly, the majority of respondents were in the age group of 25 to 30

166
years, which shows that the actual decision makers have been interviewed for the
study. The demographic profile of these respondents is given in tables 6.3 and 6.4

Table: 6.3
Gender of Respondents

Frequency Percent Valid Percent Cumulative Percent

Male 259 86.3 86.3 86.3
Valid Female 41 13.7 13.7 100.0
Total 300 100.0 100.0

Gender
13.67%

86.33%

Male Female

Figure: 11

Table: 6.4
Age of the Respondents

Frequency Percent Valid Percent Cumulative Percent

Below 25 years 32 10.7 10.7 10.7
25-30 years 197 65.7 65.7 76.3
Valid
Above 50 years 71 23.7 23.7 100.0
Total 300 100.0 100.0

167
 Age

11%
24%

65%

Below 25 years 25-30 years Above 50 years

Figure: 12

On the basis of the gender and age it can be concluded that mostly the male members
in the age group of 25 to 30 years constitute the majority of respondents for this study.
If one keeps into consideration the social structure of the people, one realizes that
actually this is the group, which makes purchase-decisions in families.

Annual Income and Source of Income

The range of annual income was found to be in the range of less than Rs. 2 lakh. In
all, three categories were made and it was found that most of the respondents fall in
the first category, i.e., below Rs 2 lacs. This percentage goes to 74%. It validates the
argument that rural consumers usually fall in low income groups. But some of them,
say about 25% of the respondents are in higher income regions of 2 to 5 lacs. It is
clarified, at this stage itself that this income data relates to the families and not to the
individuals. Perhaps it is attributed to the fact that the families of rural areas of
Kumaun and Garhwal hills are marginal farmers and their sources of livelihood do not
give them the returns usually expected in the rich farming zones down below in the
plains of Uttar-Pradesh, Punjab, Haryana or even the Tarai region of Uttarakhand.

Table: 6.5
Annual Income

Frequency Percent Valid Percent Cumulative Percent

Below Rs. 2 lakhs 222 74.0 74.0 74.0
Rs. 2 to 5 lakhs 74 24.7 24.7 98.7
Valid
Above Rs. 5 lakhs 4 1.3 1.3 100.0
Total 300 100.0 100.0

168
 Annual Incom e
1%
25%

74%

Below Rs. 2 lakhs Rs. 2 to 5 lakhs Above Rs. 5 lakhs

Figure: 13

Further, analysis of the sources of income confirms the arguments furnished in the
proceding paragrpahs. Table 6.6 reveals that 40.6% of the respondents are dependent
on agriculture, in one way or the other, whereas another 30.7%, though engaged in
non-agriculture, but their nature of work shows that they are also depnednet on
income generated largley through agrcultural activies in the area. Similarly, the
portion of services sector is also siginficant because it is to the extent of 24.7%. This
analysis reveals that the incomes of the respondents is in the lower segments only.

Table: 6.6
Source of Income

Valid Cumulative
Frequency Percent
Percent Percent
Self employed in agriculture 67 22.3 22.3 22.3
Self employed in non-agriculture 92 30.7 30.7 53.0
Agricultural Labour 55 18.3 18.3 71.3
Govt. Service 38 12.7 12.7 84.0
Valid
Pvt. Service 30 10.0 10.0 94.0
Pensioner 6 2.0 2.0 96.0
Other 12 4.0 4.0 100.0
Total 300 100.0 100.0

169
 Sources of Income

2% 4%
10% 22%

13%

18% 31%

Self emp in agri Self emp in non-agri Agri Labour Govt. Service
Pvt. Service Pensioner Other

Figure: 14

The six tables and four figures provided earlier establish the profile of respondents ,
i.e., the rural consumers. At this stage it can be said that in a survey of three hundred
individuals across forty villages of blocks of four districts who are the rural
consumers truly reflect the characterstics usually identified by researchers earlier.

FMCG Groups Selected For The Study:

As discussed in the earlier chapters, it is a known fact that the range of FMCG is very
large. Since the study had to be confined to some controllable limit, only eight
categories were identified for the study? These are as below;
9. Soaps (Beauty And Bathing)
10. Biscuits And Confectionary
11. Tooth paste And Powder
12. Personal care products
13. Tea, Coffee And Beverages
14. Detergents and Cakes
15. Hair oil And Shampoo
16. Personal And Hygiene products

All the categories mentioned above are the items of daily use in the rural areas (even
in the sample), and these items reflect the true characteristics of FMCG as well.

The analysis of above eight groups was further extended to quality, brand (Indian vs.
MNCs), duration of purchases, and factors influencing purchase-decisions. All these
are presented sequentially as follows:

170
Respondents’ Perception of Quality

The major question was regarding the perception of quality for the respondents, i.e.,
what do they associate quality with? Is it that price refers to quality, fulfillment of
expectation refers to quality or the brand refers to quality? The responses to these
questions lead to some basic perception of the respondents. About 50 % of
respondents believe that quality is associated with price, and only about 23%
respondents believe that brand is an indicator of quality. These response are analyzed
in table 6.7

Table: 6.7
Quality Association

Frequency Percent Valid Percent Cumulative Percent

Price 150 50.0 50.0 50.0
Expectation
80 26.7 26.7 76.7
fulfillment
Valid Brand or Co. 68 22.7 22.7 99.3
Other 2 .7 .7 100.0

Total 300 100.0 100.0

Quality Association
160 150

140

120

100
80
80 68

60 50

40 26.7
22.7
20
2 0.7
0
Numbers Percentage

Price Meeting Expectation Brand or Co. Other

Figure: 15

171
The common belief that ‘higher the price, better the quality’, is the usual perception of
50% of respondents. It may not be absolutely true, but this is what people believe in.
It doesn’t mean that they are not aware of the brands, but perhaps they believe that
branded goods which fall in the costlier zone obviously refer to quality.

The concept of brands for majority of respondents’ comprised Indian as well as

foreign brands operating in India and believed to be of Indian origin by majority.
Now, on one hand they associate quality with price, but on the other, when it comes to
purchase-decision, they go in for the branded products only. It is reflected in table 6.8
to 6.15. These tables are presented in a continuous sequence.

Choice of Respondents: Branded v/s Unbranded

Table: 6.8
Choice of Soaps

Frequency Percent Valid Percent Cumulative Percent

Valid Branded 272 90.7 90.7 90.7
Unbranded 28 9.3 9.3 100.0
Total 300 100.0 100.0

Table: 6.9
Choice of Toothpastes

Frequency Percent Valid Percent Cumulative Percent

Valid Branded 261 87.0 87.0 87.0
Unbranded 39 13.0 13.0 100.0
Total 300 100.0 100.0

Table: 6.10
Choice of Detergents

Frequency Percent Valid Percent Cumulative Percent

Valid Branded 202 67.3 67.3 67.3
Unbranded 98 32.7 32.7 100.0
Total 300 100.0 100.0

172
 Table: 6.11
Choice of Biscuits

Frequency Percent Valid Percent Cumulative Percent

Valid Branded 153 51.0 51.0 51.0
Unbranded 147 49.0 49.0 100.0
Total 300 100.0 100.0

Table: 6.12
Choice of Beauty Care

Frequency Percent Valid Percent Cumulative Percent

Valid Branded 252 84.0 84.0 84.0
Unbranded 48 16.0 16.0 100.0
Total 300 100.0 100.0

Table: 6.13
Choice for Hair Oil

Frequency Percent Valid Percent Cumulative Percent

Valid Branded 198 66.0 66.0 66.0
Unbranded 102 34.0 34.0 100.0
Total 300 100.0 100.0

Table: 6.14
Choice for Beverages

Frequency Percent Valid Percent Cumulative Percent

Valid Branded 118 39.3 39.3 39.3
Unbranded 182 60.7 60.7 100.0
Total 300 100.0 100.0

Table: 6.15
Choice for Personal Hygiene

Frequency Percent Valid Percent Cumulative Percent

Valid Branded 202 67.3 67.3 67.3
Unbranded 98 32.7 32.7 100.0
Total 300 100.0 100.0

173
 Choice for Branded Vs. Unbranded

300
28 39 48

250
98 102 98
147
182
200

150
272 261 252

100 202 198 202

153
118
50

0
So aps To o thpastes Detergent Biscuits Beauty care Hair Oil B everages Perso nal
Hygiene

BR FREQ UB FREQ

Figure: 16

Choice for Branded Vs. Unbranded (%)

100
9.3 13 16
90
32.7 34 32.7
80
49
70 60.7

60

50
90.7 87 84
40
67.3 66 67.3
30
51
20 39.3

10

0
So aps Detergent Biscuits B eauty care Hair Oil B everages Perso nal
To o thpastes Hygiene
BR PERCENTAGE UB PERCENTAGE

Figure: 17

In all the eight categories of FMCG selected for the study, the result is largely in favor
of branded products with the single exception of beverages where unbranded products
dominate the market. If all these choices are summarized then the cumulative score of
branded goods goes to 69.08% which shows a clear preference for branded items in
seven from out of the eight categories. In the category of biscuits, the local bakery
products were used in large quantity so in this category 49% share for unbranded

174
products was found. Local bakery products are available fresh, immediately after
production but the branded items take longer to reach the consumers. Thus, for a large
number of consumers local items are important.

Table: 6.16
Summery of Choice for Branded Vs Unbranded

Choice for Beauty

Personal Hygiene
Choice for Soap

Choice for Hair

Toothpaste

Percentage
Choice for

Choice for

Choice for

Choice for

Choice for
Beverages
Detergent

Average
Biscuits

care

(%)
Oil
272 261 202 153 252 198 118 202
Branded 69.08
(90.70) (87.00) (67.30) (51.00) (84.00) (66.00) (39.30) (67.30)
28 39 98 147 48 102 182 98
Unbranded 30.93
(9.30) (13.00) (32.70) (49.00) (16.00) (34.00) (60.70) 32.7)
300 300 300 300 300 300 300 300
Total 100
(100) (100) (100) (100) (100) (100) (100) (100)

BRANDED VS. UNBRANDED

30.925

69.075

Branded Unbranded

Figure: 18

Further, there is no significant difference between the choices made by male and
female respondents towards the above product categories. Similarly, respondents of
all age groups (> 25 Yrs, 25- 30 yrs, 50< years) were almost unanimous in their
choice for branded products.

175
Choice of MNC vs. Indian Brands

Table: 6.17
MNCs Vs. Indian Brands

Personal hygiene
Beauty care (%)
Toothpaste (%)

Percentage (%)
Detergent (%)
Beverage (%)

Hair oil (%)

Biscuit (%)
Soap (%)

Average
(%)
173 8 178 48 3 67 39 121
MNC 26.54
(57.67) (2.67) (59.33) (16) (1) (22.33) (13) (40.33)
127 206 120 246 186 158 231 159
Indian 59.70
(43.33) (68.67) (40.00) (82) (62) (52.67) (77) (53.00)
0 86 2 6 111 75 30 20
Unbranded 13.75
(0.00) (28.67) (.67) (2) (37) (25) (10) (6.67)
300 300 300 300 300 300 300 300
Total 100
(100) (100) (100) (100) (100) (100) (100) (100)

The respondents have shown clear preference for Indian brands in all the chosen
categories except soap and toothpastes, where MNC dominate Indian brands. The
responses are similar for all age groups and there seems no difference in choices of
men and women. People from different income levels have given similar responses.

CONSUMERS BRAND PREFERENCES

13.75
26.54

59.71

MNC Indian Unbranded

Figure: 19

The share of MNCs in the category of soaps and toothpastes is also dominated by
Colgate, Pepsodents, Close-Up, Lux, and Lifebuoy etc. In India, these brands are
established as Indian brands. Majority of people do not know that these are owned by
the foreign based multinationals. Thus, unknowingly 26.54% goes to MNCs. So far as

176
the Indian brands are concerned, they dominate with the share of 59.70%. In the
category of beverages, it was found that there is a clear preference for local brands. It
is perhaps, attributed to the fact that in Uttarakhand, the production of fruits of
different types is comparatively higher and as such juice concentrates, squash, and
other drinks made from these fruits were found to be popular. In this category
Buransh (Juice Concentrate made of Rodo-Dondron flowers) is very popular. Further
Lassi, and Chach, other Sharbats (all the three are local drinks made indigenously)
are being popularly used. Thus, in the category of beverages the unbranded items
have a share of 37% which is the maximum for any category in the group of items
studied. Incidentally, it was found that the sachets of some premium brands like dove,
Pantene, Head & Shoulders were found to be very popular in the rural areas.

It goes to prove that, there is a clear preference for brands in the minds of the rural
consumers.

Purchase Behavior of Respondents-Time of Purchase:

Table 6.18 analyses the frequency of purchases by the rural consumers. In this
category, it was found that most of the purchases of the items under study were on
weekly basis, closely followed by the monthly cycle. One may infer from this analysis
that soaps, biscuits, toothpastes, beauty care items, detergents, hair oil and the items
of personal hygiene usually last for a week, even in the small packs. On the other,
some items outside the eight categories studied like, flour, rice, edible oil and spices
were found to be purchased on daily basis. The shopkeepers did not store the large
and economy packs because the demand in the areas under study was mostly on
weekly basis. The average share of about 43% goes to monthly purchases. Therefore,
it doesn’t denote that these are the large or economy packs. Infact, one soap cake or a
small bottle of hair oil lasts for a month. This is how the monthly purchases record an
average score of about 43%. But researcher’s experience confirms that usually the
purchases are either on daily basis or on weekly basis but in the specific categories
studied the weekly as well as daily purchases do not denote purchases of large
economy packs at all.

177
 Table: 6.18
Frequency of Purchase

Beauty care (%)

Toothpaste (%)

Detergents (%)
Beverage (%)
PURCHASE

Biscuits (%)

hygiene (%)
Hair oil (%)
Soaps ((%)

Percentage
FRQ OF

Personal

Average
5 24 2 3 3 6 30 99
DAILY (1.67) (8.00) (0.67) (1.00) (1.00) (2.00) (10.00) (33.00) 7.17
216 231 85 142 139 184 104 98
WEEKLY (72.00) (77.00) (28.33) (47.33) (46.33) (61.33) (34.67) (32.67) 49.96
79 45 213 155 158 110 166 103
MONTHLY (26.33) (15.00) (71.00) (51.67)) (52.67) (36.67) (55.33) (34.33) 42.88
300 300 300 300 300 300 300 300
TOTAL (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) 100.00

Purchase Frequency of Rural Consumers

250
231
216 213
200
184
166
155 158
150 142 139

110
104
100 99 98103
85
79

50 45
30
24
5 2 3 3 6
0
So aps To o thpastes Detergent B iscuits B eauty care Hair Oil Beverages P erso nal
Hygiene

Daily Weekly Monthly

Figure: 20

Purchase Frequency of Rural Consumers (%)

7%

44%

49%

Daily Weekly Monthly

Figure: 21

178
Most of the product categories in the study are purchased on a monthly basis except
for soaps, biscuits and detergents.

Respondents’ Perception Regarding the 21st Century Modern Consumer Goods:

This question was framed to study the hypothesis no 3 and 4, i.e., the indigenous
support-system of rural society s being destroyed by increasing penetration of the
modern items in the identified categories of FMCG and that the FMCG have become
an essential part of rural households.

Responses received for the following four questions are enumerated in tables 6.19 to
6.22. They (69%) opined that their life would not be difficult without these products.
They (76.7%) agreed that consumption of these items forces them to go beyond their
budgets and it is, rather, ironical that they (63%) admit that they have been the victims
of marketing gimmicks. Thus, knowingly they have got into the cycle of purchasing
these items.

It is rather strange that answers to one of the questions, i.e., whether life is happier
with the modern day products? They (64.7%) replied in affirmation. It goes to prove
that they have become the victims of the convenience of availability, carriability and
hassle-free use of the modern items. It can easily be inferred that the indigenous
support-system is getting destroyed, and in future they (people) will not be
contributing to its restoration. It is so, because, on one hand, they know that they are
the victims of the marketing gimmicks, they exceed their budget‡‡‡‡‡‡‡‡‡‡‡ by making
purchases (which might create problems for them later), and they agree that life will
not be difficult without theses items but still if one asks them whether life is happier
with these products, and about 65% answer in affirmative.

The analysis of responses using simple percentage and cumulative percentage is given
ahead which are enumerated in tables 6.19 to 6.22

‡‡‡‡‡‡‡‡‡‡‡
Mahatma Gandhi, one- once said that ‘Buying from outside the list prepared for the
purpose was a sin’.

179
• Whether life would be difficult without these modern products?

Table: 6.19
Rural Life Vs. Modern FMCG

Frequency Percent Valid Percent Cumulative Percent

No 207 69.0 69.0 69.0
Valid Yes 93 31.0 31.0 100.0
Total 300 100.0 100.0

• Whether Consumption of these products has extended your budget?

Table: 6.20
FMCG Vs. Budget of Rural Households

Frequency Percent Valid Percent Cumulative Percent

No 70 23.3 23.3 23.3
Valid Yes 230 76.7 76.7 100.0
Total 300 100.0 100.0

• Whether life is happier with the modern day products?

Table: 6.21
Rural Happiness Vs. Modern FMCG

Frequency Percent Valid Percent Cumulative Percent

No 106 35.3 35.3 35.3
Valid Yes 194 64.7 64.7 100.0
Total 300 100.0 100.0

• Whether the respondents have become victims of modern marketing gimmicks:

Table: 6.22
Impact of Modern Marketing

Frequency Percent Valid Percent Cumulative Percent

No 111 37.0 37.0 37.0
Valid Yes 189 63.0 63.0 100.0
Total 300 100.0 100.0

180
Answers to these questions analyzed in the earlier four tables refer to another
important issue of unbridled consumerism, i.e., people go on consuming even though
it exceeds their budgets. They can happily live without these items and they know that
are becoming the victims of marketing gimmicks. During visits to sample villages the
strange discovery was that in order to meet their requirements of these items, and in
order to cater to the other such habits induced by consumerism, they are selling even
the land and other the assets.∗

It is really shocking that in a country where in the rural areas have been the safest
repositories of the ages-old value system are getting polluted by the cruel shocks of
modern day consumerism. The Indian philosophy as contained in the ancient text
(ISHA-VAASY-UPNISHAD) preaches the concept of “consumption with sacrifice”
(Ten Tyakten Bhujjitha), which is rather unique and one doesn’t find its parallel in
any scriptures of the world. On the other, the very repositories of this value system are
being destroyed and polluted by the t-sunami of marketing. This is the permanent
damage. And the generations to follow will realize its impact in a couple of decades.
By then the damage caused will become irreparable.

Another revelation was that the acquisition of farms in Tarai Region of Kumaun (in
Jawaharngar and Khurpia, villages of Rudrapur Block) had a very bad impact on the
poor rural population of the local area. The government acquired these farms for
industrial purposes, the industries never came up, the fertile land continued to remain
uselessly abandoned and the rural people were deprived of their livelihood. They find
it difficult to migrate to the nearby towns because cumulative cost of living in the
towns will be more than what they could possibly earn. It has made their lives
miserable and during the field visits they requested the researcher to highlight their
plight.

In a nutshell it can be inferred that;

1. Rural marketing and undue rush for consumerism have made the lives of rural
consumers actually difficult, though apparently happier.
2. The local support-system is largely destroyed in the spate of the t-sunami of
consumerism, and
∗
In Amritpur, Ambia and Pinarao villages in Bhimtal Block, many such instances were found by the
researcher.

181
3. The government policies toward industrialization are also responsible for turning
producers into pure consumers only.

Factors Influencing Purchase Decision

The questions in the following sections relate to the first hypothesis, i.e., rural
consumers are equally induced by marketing-mix dimensions. In this category, it was
tried to explore as to what influences their purchase decisions say, television, Radio,
Internet, or whether the print material, hoardings and banners influence the purchase
decisions and the like. In a nutshell, the analysis was carried out from the following
angles;
i. What leads to successful promotion?
(Television, Radio, Internet/Print Material, Hoardings, Banners, Point of
purchase display/ word of mouth publicity)
ii. What is the impact of the other most active ‘P’, i.e., Price?

Effectiveness of Promotion Through TV, Radio and Internet:

Table: 6.23
Effectiveness of Television, Radio & Internet
Frequency Percent Valid Percent Cumulative
Percent
Least Effective 47 15.7 15.7 15.7
Ineffective 19 6.3 6.3 22.0
Moderately Effective 17 5.7 5.7 27.7
Valid
Effective 14 4.7 4.7 32.3
Most Effective 203 67.7 67.7 100.0
Total 300 100.0 100.0

Effectiveness of TV, Radio & Intenet

250

203
200

150

100
67.7
47
50
15.7 19 17 14
6.3 5.7 4.7
0
Least Ineff ective Moderately Ef fective Most
Eff ective Ef fective Eff ective

Frequency Percent

Figure: 22

182
In table 6.23 TV/Radio and Internet were not considered separately rather all the three
mediums were presented as one group of visual media. So the responses and the
analysis don’t refer to three different categories. But it refers to just one category.
The analysis of answers received in response to this question reveals that about 68%
of consumers find it most effective. The graphic following the table very clearly
depicts the effectiveness of visual media vis a vis the other mediums.

Effectiveness of Print-Material, Hoardings and Banners

This category included the entire medium of print in three forms, i.e., as print material
in the forms of advertisement, by hoardings, and banners. These are expected to
contain the visuals but their visibility is not as live as that of TV and internet. In this
category the impact was found to be less effective as compared to the first mode of
promotion. If the first two categories, i.e., least effective and ineffective are added, it
constitutes the cumulative percentage of 60, which substantiates the analysis given in
the earlier table (6.23)

Table: 6.24
Effectiveness of Print Material, Hoardings And Banners

Cumulative
Frequency Percent Valid Percent
Percent
Least Effective 94 31.3 31.3 31.3
Ineffective 86 28.7 28.7 60.0
Moderately Effective 47 15.7 15.7 75.7
Valid
Effective 41 13.7 13.7 89.3
Most Effective 32 10.7 10.7 100.0
Total 300 100.0 100.0

183
 Effectiveness of Print Material, Hoardings & Banners

100 94
90 86
80
70
60
50 47
41
40 31.3 32
28.7
30
20 15.7 13.7 10.7
10
0
Least Effective Ineffective Moderately Effective Most Effective
Effective

Frequency Percent

Figure: 23

Effectiveness Point of Purchase Display:

In this category the point of purchase display refers to display of items in the shops,
either in a general manner or under various promotional schemes. It was found, as
given in Table 6.25, that it is an effective medium of communication. If all the three
categories that is moderately effective, effective and most effective are clubbed, it
comes to about 80%. It is, perhaps, the frontal attack on the psyche of the consumers
and they land up buying items without any plan or budget for the same.

Table: 6.25
Effectiveness of Point of Purchase Display

Cumulative
Frequency Percent Valid Percent
Percent
Least Effective 20 6.7 6.7 6.7
Ineffective 39 13.0 13.0 19.7
Moderately Effective 80 26.7 26.7 46.3
Valid
Effective 143 47.7 47.7 94.0
Most Effective 18 6.0 6.0 100.0
Total 300 100.0 100.0

184
 Effetiveness of Point of Purchase Display

160
143
140

120

100
80
80

60 47.7
39
40
26.7
20 18
20 13
6.7 6
0
Least Ineffective Moderately Effective Most Effective
Effective Effective

Frequency Percent

Figure: 24

Effectiveness of Dealers and Retailers:

Table 6.26, refers to the effectiveness of the recommendation of dealers and retailers.
Under the earlier customs and patterns of purchases, it was found that the dealer’s
recommendation mattered a lot, but today’s consumer is more aware and determined
with the modern means of information. So in this category, it was found that the
recommendation of dealers and retailer was not so effective. This category of items
(FMCG) is a matter of individual preference and likings, so people are usually not
influenced by the recommendations. Table 6.26 is presented below:

Table: 6.26
Effectiveness Dealers/Retailers’ Recommendations

Cumulative
Frequency Percent Valid Percent
Percent
Least Effective 17 5.7 5.7 5.7
Ineffective 85 28.3 28.3 34.0
Moderately Effective 109 36.3 36.3 70.3
Valid
Effective 66 22.0 22.0 92.3
Most Effective 23 7.7 7.7 100.0
Total 300 100.0 100.0

185
 Effectiveness of Dealer's and Retailer's Recommendation

120 109
100
85
80
66
60

40 36.3
28.3
22 23
17
20
5.7 7.7
0
Least Ineffective Moderately Effective Most Effective
Effective Effective

Frequency Percent

Figure: 25

Effectiveness of Word of Mouth Publicity And References

In this category also the word of mouth publicity by friends and references through
peers relatives and friends was also not found to be very effective, It is rather strange,
because in majority of cases, people are influenced by the advice of friends, peers and
relatives. However, the analysis of responses shows that it has not proved to be
effective in this survey.

Table: 6.27
Effectiveness of Word of Mouth Publicity and References

Cumulative
Frequency Percent Valid Percent
Percent
Least Effective 122 40.7 40.7 40.7
Ineffective 72 24.0 24.0 64.7
Moderately Effective 48 16.0 16.0 80.7
Valid
Effective 36 12.0 12.0 92.7
Most Effective 22 7.3 7.3 100.0
Total 300 100.0 100.0

186
 Effectivenss of Word of Mouth Publicity & References

140

122
120

100

80 72

60
48
40.7
40
36
24 22
16
20 12
7.3
0
Least Ef f ect ive Inef f ect ive Moder at ely Ef f ect ive Ef f ect iv e Most Ef f ect ive

Frequency Percent

Figure: 26

Television radio and internet were found to be the most effective medium of
promotion followed by point of purchase display, and print material hoardings and
banners. Word of mouth came to be the least effective form of promotion.

Thus out of the five modes of promotion if one ranks, one finds that TV and internet
coupled with point of purchase display are the most effective, whereas the print
media, recommendations of dealers, and word of mouth publicity is not so effective.
These are ranked as follows:
1st—T.V Internet and Radion-72.4%∗
2nd- Point of Purchase Display-53.7%*
3rd—Recommendation of Dealers and Retailer- 29.7%*
4th- Print Material hoardings and Banners- 24.4%*
5th- Word of Mouth publicity and References- 19.30*

Impact of Price on Purchase Decision

Price was found to be a very important factor in purchase decisions. On an average,

52.21% of respondents ranked price to be a very important factor. However it needs to
be kept in mind that 13% of the respondents rated availability as important. If some
particular low priced items are not available to consumers, they do not have any
choice but to purchase a costlier item or a branded item. Brand, however, was the
main factor for 20.42 % of the respondents. It is very interesting to note that though

∗
After combining the two categories , i.e., effective and most effective

187
the companies spend a lot on celebrity endorsement, colour, packaging, tag-line or
dialect, yet these factors did not matter for rural consumers in the sample while
making purchase decisions. The percentage of respondents preferring these elements
is very low or negligible say 0.75% for celebrity endorsement, 0.17% for colour or
packing and 0.17 for dialect/language or tagline. They value the quality of the
product, its brand and its availability. It limits their decisions. So, as expected, price is
a major factor in purchase decision for the rural consumers, as well. It is a major
factor for the majority of Indians excepting the Noveu-riche. The rating across all the
eight items and average percentage is given below in Table 6.28.

188
 Table: 6.28
Purchase Decision Marking Factors

Soap Biscuit Toothpaste Beauty care Beverage Detergent Hair oil Perso0l Average
(%) (%) (%) (%) (%) (%) (%) hygiene (%) Percentage (%)
185 184 158 169 114 155 149 139
PRICE/ DISCOUNT 52.21
(61.67) (61.33) (52.67) (56.33) (38.00) (51.67) (49.67) (46.33)
BRAND/ 88 36 88 88 33 48 67 42
20.42
COMPANY (29.33) (12.00) (29.33) (29.33) (11.00) (16.00) (22.33) (14.00)

3 1 0 3 0 0 10 1
CELEB ENDORSE 0.75
(1.00) (0.33) (0.00) (1.00) (0.00) (0.00) (3.33) (0.33)

0 1 1 1 1 0 0 0
LANG/ TAGLINE 0.17
(0.00) (0.33) (0.33) (0.33) (0.33) (0.00) (0.00) (00)

CONTENT/PRODU 18 51 20 25 108 33 24 25
12.67
CTS (6.00) (17.00) (6.67) (8.33) (36.00) (11.00) (8.00) (8.33)

COLOUR/ 0 1 0 0 1 0 0 2
0.17
PACKING (0.00) (0.33) (0.00) (0.00) (0.33) (0.00) (0.00) (0.67)

6 25 33 14 43 64 50 77
AVAILABILITY 13.00
(2.00) (8.33) (11) (4.67) (14.33) (21.33) (16.67) (25.67)

0 1 0 0 0 0 0 14
WORD OF MOUTH 0.63
(0.00) (0.33) (0.00) (0.00) (0.00) (0.00) (0.00) (4.67)
TOTAL
300 300 300 300 300 300 300 300
100.00
(100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00)

189
 PURCHASE DECISION FACTOR

13.00 0.63
0.17
12.67

0.17 52.21
0.75
20.42
PRICE/DEISCOUNT B RAND/COM PANY CELEB INDORSE LANG/TAGLINE
CONTENT/PRODUCTS COLOR/PACKING A VAILA BILITY WORD OF M OUTH

Figure: 27

Thus, the analysis of the responses of the rural consumers, collected through a
schedule, has the following main features:

1. The sample was taken from four districts of Uttarakhand that of Nainital,
Udhamsingh Nagar, Uttarkashi and Dehradun.

2. One block each from these four districts was selected.

3. Selection of villages in each block was based on the random sampling (1/10, 1/9,
1/7), taking the total of villages to 40.

4. 75 respondents from each block, from out of the randomly selected villages
constituted the sampled, The total number of respondents, thus, was 300

5. Most of the respondents were males in the age group of 25-30 years.

6. Their average annual income was below Rs 2,00,000/- and the source of their
income is mainly agriculture and allied activities.

7. Eight Categories of FMCG were framed out to carry-out the analysis.

Results:

1. Respondents consider the costlier items to be related to quality.

2. They prefer branded items in most of the identified categories of FMCG except
the beverages and local bakery products. In all other categories, there is a clear
preference for branded items.

190
3. Indian brands dominate the Rural market (Even the foreign brands preferred are
considered to be Indian because these name have been amongst the masses since a
long time and rarely they realize that these are the products of the MNCs)

4. Purchase frequency was mostly found to be weekly and daily. Monthly purchase
was also common because even the smaller packs of FMCG last a month.

5. Regarding the modern consumer goods, it obvious that they realize the frivolity of
these items but it has become a part of their routine.

6. Purchase decision is basically influenced by TV, Internet, point of purchase

display and print media. Word of mouth publicity doesn’t seem to affect the
purchase decision and so is the recommendation of dealers.

7. Lastly, the price prevails as the major factor in buying decisions.

ii) Analysis of the Responses of Rural Retailers

The role of retailers operating in the rural areas is also very critical because they are
the main facilitating agents on the ground. Sometimes the business tricks of the
retailers force the consumers to buy the items offered. Their margins are a very
important factor in deciding their strategies for promoting the particular products as
better or otherwise. Thus, in this section, analysis of the responses given by rural
retailers has been attempted;

The sample comprised 100 respondents, with 25 retailers from each block. For this
purpose, non-probabilistic quota-sampling was used because the sampling-frame, i.e.,
the actual number of shopkeepers in the villages was not known.
The brief profile of these retailers is indexed in table 6.29.

191
 Table: 6.29
Profile of Rural Retailers

Demo- KUMAUN GARHWAL UTTARAKHAND

CATEGORY
graphics Male Female Total Male Female Total Male Female Total
Below 25 9 0 9 4 0 4 13 0 13
Age
25 TO 50 24 2 26 39 2 41 63 4 67
50 and Above 14 1 15 4 1 5 18 2 20
TOTAL 47 3 50 47 3 50 94 6 100

Annual Up to 50000 41 3 44 38 3 41 79 6 85
Income
50000 to 200000 6 0 6 9 0 9 15 0 15
TOTAL 47 3 50 47 3 50 94 6 100
No Assistant 33 3 36 15 0 15 48 3 51
No of
Assistants One 10 0 10 27 3 30 37 3 40
Two 4 0 4 5 0 5 9 0 9
TOTAL 47 3 50 47 3 50 94 6 100
Type of Owned 44 3 47 31 0 31 75 3 78
Shop
Rented 3 0 3 16 3 19 19 3 22
TOTAL 47 3 50 47 3 50 94 6 100

192
In this sample, there were 94 males and 6 females, and the majority of these
respondents were in the age group of 25 to 50 years. Similarly, the majority of
respondents had an annual income of up to Rupees 50,000 only. 51% of the retailers
did not have any assistance. Thus, it can be inferred that the level of outlets was very
small. 78% of the shops were owned, i.e., most of the people were having their
businesses in their own homes.

On the basis of their responses, some aspects were analyzed; say buying behavior of
rural households, preference for the price range, preference for variety, frequency of
purchases, and demand by brands etc. all these aspects explained the behavior of rural
buyers, as understand by the retailers.

Buyer Behavior
The retailers were asked about the buyer behavior, and 74% of the respondents said
that all households have the same buying pattern. It means, the buying habits are
almost similar since a long period of time. It is given in table 6.30

Table: 6.30
Similarity in Buying Behavior of Rural Households

Frequency Percent Valid Percent Cumulative Percent

No 26 26.0 26.0 26.0
Valid Yes 74 74.0 74.0 100.0
Total 100 100.0 100.0

Cheaper Goods vs. Quality Goods

When asked about the preference of consumers for cheaper-goods or quality-goods

the answer is nearly, though not equally divided, i.e., 59% say that it is not true,
which means they go in for quality. But 41% said that they prefer the cheaper-goods
as compared to quality goods, it can, therefore, be inferred that on this issues, the
response is divided. In other words, some of the consumers prefer quality, and some
prefer the cheaper goods.

193
 Table 6.31
Consumers Prefer Cheaper Good to Quality Goods

Frequency Percent Valid Percent Cumulative Percent

No 59 59.0 59.0 59.0
Valid Yes 41 41.0 41.0 100.0
Total 100 100.0 100.0

Customer Want Retailer to Provide a Wide Variety of Products

Regarding the varieties to be store by the shopkeepers they give the opinion that
customers want the shopkeeper to keep variety of all the products. It shows that rural
consumers are also choosy about the products. Everybody may not accept the same
products.

Table: 6.32
Expectation for Variety of Products

Frequency Percent Valid Percent Cumulative Percent

No 21 21.0 21.0 21.0
Valid Yes 79 79.0 79.0 100.0
Total 100 100.0 100.0

Consumers Make Frequent Purchases

Table 6.18 presented earlier exhibits that the majority of purchases are either on
monthly basis or on weekly basis and the items of daily use are usually purchased on
daily basis. The same issue was put to the retailers and they also gave similar
responses, 33% strongly agreed and 13% agreed that the purchases are frequent. If we
these two figures are put together, it comes to 46%. So the answers given earlier by
the consumers, in the sample, are substantiated by the retailers. It is depicted in the
following table 6.33

194
 Table 6.33
Consumers Prefer Frequent Purchases

Valid Cumulative
Frequency Percent
Percent Percent
Strongly disagree 18 18.0 18.0 18.0
Disagree 15 15.0 15.0 33.0
Indifferent 21 21.0 21.0 54.0
Valid
Agree 13 13.0 13.0 67.0
Strongly Agree 33 33.0 33.0 100.0
Total 100 100.0 100.0

Preference for Brand

59% of the respondent-retailers agreed that there is a very high preference for brand
and another 10% felt that the preference for brand is high. If the two figures are
added, 69% of respondents accept this fact that preference for brand is high. Almost
similar results were obtained in table 6.16, incidentally the figures in both the surveys
is 69% only.

Table: 6.34
Consumers’ Brand Preference

Frequency Percent Valid Percent Cumulative Percent

Very Low 7 7.0 7.0 7.0
Low 5 5.0 5.0 12.0
Medium 19 19.0 19.0 31.0
Valid
High 10 10.0 10.0 41.0
Very High 59 59.0 59.0 100.0
Total 100 100.0 100.0

Timely Supply of Goods to Rural Retailers

This is the problem area, in rural marketing, encountered by all the corporates
operating in the rural markets. Supply of goods, in time, in the opinion of retailers, in
sample, is also a major problem, because 67% say that goods are not supplied in a
timely manner. Thus, logistics arrangements are a problem element with the sample
rural retailers as well.

195
 Table: 6.35
Do You Get the Products Timely?

Frequency Percent Valid Percent Cumulative Percent

No 67 67.0 67.0 67.0
Valid Yes 33 33.0 33.0 100.0
Total 100 100.0 100.0

In all there were 28 questions in the schedules prepare for the retailers but in the
proceeding paragraph only 6 questions have individually been analyzed. Answers to
the other questions have been used for cross-reference in the testing of hypotheses.

So, in the proceeding analysis of the responses of retailers, 5 dimensions were

analyzed and incidentally the answers given by the consumers were nearly supported
by the retailers also. To some extent, it validates the results of the analysis as given in
part-I.

Having presented the percentage and cumulative percentage based analysis of the two
questionnaire- schedules, i.e., for the rural consumers, as well as for the rural retailers,
factor analysis and Cross- Tab have been applied

Factor analysis reveals the relevance of various factors substantiating the analysis
attempted earlier. Similarly, Cross- Tab has been applied to study the impact of
answers of different questions on all four hypothesis framed for the analysis. Before
applying the Cross- Tab certain assumptions contained in the hypotheses were
discussed in Chapet-5 on Research Methodology. Thus, cross-tab analysis needs to be
ideally considered in correlation with the discussion related to assumptions made
about the hypotheses in Chapter-5.

6.2 PART- B: FACTOR ANALYSIS

To measure the relative importance of factors that may be considered significant

while marketing FMCG in rural markets, the factor analysis was undertaken. Since,
customers related marketing not only to help companies in establishing their brands in
the rural market but may also assist them in providing excellent support services to
the consumers at large. Therefore, major drivers of the marketing of FMCG in the
rural markets depend upon the aggregate, as well as, the selected values of the buying

196
behavior of rural consumers and marketers attitude in this regard. Hence, for
identifying the factors that affect the rural marketing of FMCG in Uttarakhand, the
factor analysis was performed on 12 interrelated key variables of the survey
instrument for marketers so that the minimum number of factors may be assessed
which may help marketers in formulating the marketing-strategies for rural
consumers.

Methodology:

These small numbers of main components or factors account for the maximum
variance in the data collected. The Principal Component Method was considered for
extraction of factors. The data is analyzed by using SPSS version 21. The output of
the Factor Analysis comprises of six tables and one Scree Plot. Six main components
/factors were extracted through the study. Only factors with Eigen Value greater than
1 were retained and others were ignored. Further, Component Matrix, Rotated
Component Matrix, and Component Transformation Matrix were also computed to
have a better clarity in interpretation of results so derived through SPSS. To support
the analysis, Scree Plot was also developed to identify the optimum number of factors
that could be extracted.

Adequacy

The output of the factor analysis undertaken didn’t satisfy one of the adequacy tests
for performing this analysis. But, for inferring the factors that may influence the
marketers’ strategies in penetrating and positioning their brands in the rural markets,
the test was attempted and analyzed. The Kaiser-Meyer-Olkin (KMO) Test and
Bartlett Test were performed for interpreting the adequacy of the data for factor
analysis. As per the results so derived the p-value of Barlett’s test of Sphericity was
found to be less than 0.05, which denotes that the factor analysis can be undertaken
using this dataset. However, for this data the value of KMO test is less than the
minimum acceptable limit of 0.5, thus the variables couldn’t meet the necessary
threshold of sampling adequacy.

But, in order to have a broad insight of customer-marketer relationship of rural

consumers of FMCG in Uttarakhand, the test was performed.

197
 Table: 6.36
Correlation Matrix

Customer retention
Trust And Loyalty
Consumers show
Consumers price

Consumers lack

Responsibility
Earning Profit
urban attitude

Market Share

Commitment

Competitive
Satisfaction

Objective -

Objective -
awareness

advantage
Influence
sensitive

Social
Consumers price
1 -0.295 -0.215 0.035 -0.174 -0.111 0.22 -0.09 -0.03 0.039 0.079 0.128
sensitive
Consumers lack
-0.295 1 -0.278 -0.04 -0.06 0.182 -0.02 0.148 0.04 -0.01 -0 -0.183
awareness
Consumers
-0.215 -0.278 1 -0.03 0.071 -0.006 -0.17 0.03 0.06 0.17 0.036 0.04
show urban attitude
Earning Profit 0.035 -0.04 -0.03 1 -0.31 -0.111 0.01 0.182 -0.28 0.129 0.036 0.133

Market Share -0.174 -0.06 0.071 -0.31 1 -0.285 -0.22 -0.282 0.13 0.014 0.012 -0.093
Correlation

Social Responsibility -0.111 0.182 -0.006 -0.11 -0.285 1 0.08 -0.089 0.22 0.08 0.026 -0.084

Satisfaction 0.22 -0.017 -0.174 0.012 -0.221 0.082 1 -0.202 -0.02 -0.17 -0.08 -0.035

Trust And Loyalty -0.09 0.148 0.03 0.182 -0.282 -0.089 -0.2 1 -0.36 -0.15 -0.14 -0.016

Commitment -0.032 0.037 0.061 -0.28 0.133 0.217 -0.02 -0.359 1 -0.35 0.022 -0.086

Influence 0.039 -0.013 0.17 0.129 0.014 0.08 -0.17 -0.145 -0.35 1 0.081 0.032
Objective - Customer
0.079 -0.004 0.036 0.036 0.012 0.026 -0.08 -0.143 0.02 0.081 1 -0.221
retention
Objective -
0.128 -0.183 0.04 0.133 -0.093 -0.084 -0.04 -0.016 -0.09 0.032 -0.22 1
Competitive advantage

198
 Table: 6.37
KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .376

Approx. Chi-Square 176.884
Bartlett's Test of Sphericity Df 66
Sig. .000

Communalities Initial Extraction

Consumers price sensitive 1.000 .657
Consumers lack awareness 1.000 .755
Consumers show urban attitude 1.000 .762
Earning Profit 1.000 .482
Market Share 1.000 .819
Social Responsibility 1.000 .801
Satisfaction 1.000 .531
Trust And Loyalty 1.000 .790
Commitment 1.000 .729
Influence 1.000 .886
Customer retention 1.000 .764
Competitive advantage 1.000 .617
Extraction Method: Principal Component Analysis.

Table: 6.38
Total Variance Explained
Extraction Sums of Squared Rotation Sums of Squared
Initial Eigen values
Component

Loadings Loadings
Variance

Variance

Variance
ative %

ative %

ative %
Cumul

Cumul

Cumul
Total

Total

Total
% of

% of

% of

1 1.881 15.677 15.677 1.881 15.677 15.677 1.765 14.706 14.706

2 1.62 13.502 29.18 1.62 13.502 29.18 1.574 13.121 27.826
3 1.571 13.094 42.273 1.571 13.094 42.273 1.37 11.414 39.241
4 1.308 10.898 53.171 1.308 10.898 53.171 1.352 11.27 50.51
5 1.187 9.894 63.064 1.187 9.894 63.064 1.302 10.85 61.36
6 1.025 8.544 71.608 1.025 8.544 71.608 1.23 10.249 71.608
7 0.858 7.149 78.758
8 0.801 6.674 85.432
9 0.611 5.088 90.52
10 0.515 4.288 94.808
11 0.376 3.135 97.943
12 0.247 2.057 100
Extraction Method: Principal Component Analysis.

199
 Figure: 28

Table: 6.39
Component Matrixa

Component
1 2 3 4 5 6
Consumers price sensitive 0.242 0.237 0.697 0.102 -0.199
Consumers lack awareness -0.104 0.378 -0.678 -0.202 -0.316
Consumers show urban attitude -0.59 0.147 0.522 0.337
Earning Profit 0.664 0.143 0.141
Market Share -0.545 -0.532 -0.219 -0.349 -0.254
Social Responsibility -0.201 0.434 -0.252 0.468 0.531
Satisfaction 0.604 0.393
Trust And Loyalty 0.546 -0.513 -0.345 0.33
Commitment -0.728 0.212 0.114 0.288 0.224
Influence 0.261 -0.41 0.641 -0.489
Customer retention -0.137 0.607 -0.394 0.464
Competitive advantage 0.333 -0.137 0.352 -0.283 0.438 -0.302
Extraction Method: Principal Component Analysis.
a. 6 components extracted

200
 Table: 6.40
Rotated Component Matrixa

Component
1 2 3 4 5 6
Consumers price sensitive 0.762 0.203 -0.154
Consumers lack awareness -0.266 -0.791 0.227
Consumers show urban attitude -0.479 0.712 0.149
Earning Profit 0.651 0.117 0.191
Market Share -0.64 -0.289 -0.56 0.101
Social Responsibility -0.108 0.879
Satisfaction 0.661 -0.155 0.214 -0.125
Trust And Loyalty 0.741 -0.349 -0.13 -0.112 -0.291
Commitment -0.594 0.15 0.32 -0.495
Influence 0.93
Customer retention 0.16 0.13 0.844
Competitive advantage 0.142 0.289 0.134 -0.697

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 8 iterations.

Table: 6.41
Component Transformation Matrix

Component 1 2 3 4 5 6
1 .900 .186 .040 -.118 .281 -.246
2 .099 .560 -.520 .499 -.397 .008
3 -.270 .767 .511 -.229 .055 -.151
4 -.007 .128 .123 .479 .632 .582
5 -.008 -.211 .468 .675 -.076 -.524
6 .327 -.052 .483 .013 -.596 .550

Extraction Method: Principal Component Analysis

Rotation Method: Varimax with Kaiser Normalization.

Interpretation of Factor Analysis

The factor analysis reveals that according to the marketers, the rural consumers of
FMCG are price-sensitive, and they also depict urban-attitude. The ‘Total Variance

201
Explained’ table displays the total variance, percentage variance and cumulative
percentage variance for both un-rotated and rotated components. The factor loading
pattern and percentages of variance for each of the factor have been derived by using
‘Varimax Rotation’. The first factor accounted for 15.67% of the variance explained
as compared to 14.70% in the rotated matrix. The cumulative variance for both the
rotated and un-rotated components is 71.60%. Component-1 accounts for 14.7% of
the total variance, Component-2 accounts for 13.12%, Component-3 accounts for
11.41%, Component-4 accounts for 11.27%, Component-5 accounts for 10.85% and
Component-6 accounts for 10.24% of the total variance in the model.

To support the above, Scree Plot was also discerned and it was found that these six
components lie on the steeper side of the line depicted in the plot. Hence, Scree Plot
also suggests that there are six optimal numbers of the components of the study.

On the basis of the results, so generated, it was ascertained that the market-share of
the companies and social responsibilities depicted by the Companies were found to be
important factors while functioning for rural masses. Moreover, Trust and Loyalty,
Commitment and Influence were also found to be significant for studying different
aspects of marketing expected by the companies from their customers.
Comprehensively, customer retention and loyalty were found to be significant factors
while dealing with rural consumers of FMCG.

By analyzing the communalities, it was found that the factor loading for Earning
Profits and Satisfaction of Consumers were comparatively low to the level of 48.2%
and 53.1% of the variance. However, the other variables were explained reasonably
well as evident from high factor loadings of above 0.6.

Thus, it can be noted that the Component/ Factor 1 has two significant loadings while
only two variables are included in Factor/ Component 2 and only one variable is
included in Factor/Component 3, 4 5 and 6.

The factors extracted explain that the important aspects of marketing associated with
FMCG are further elaborated in the order of importance for marketers;

202
 Table: 6.42
Factors/Variables Interpretation

Component/ Factor Factor Interpretation Variables included in the factors

Marketer’s Value/ Brand
Factor 1 Trust and Loyalty and Earning Profits
Building
Price Sensitiveness of the Consumers
Factor 2 Delivering Customer Value
and Satisfaction of the Customers
Urban attitude of
Factor 3 Urban attitude of Consumers
Consumers
Factor 4 Social Awareness Social Responsibility
Factor 5 Influence of Brand Influence
Factor 6 Customer Retention Customer Retention

The first factor extracted indicates that the marketers of FMCG in rural areas of
Uttarakhand may position their brands by winning trust and loyalty of consumers in
these areas. Ultimately, this generous attempt on part of the marketers will contribute
in earning profits, thereby resulting into a win-win situation both for the marketers as
well as for the consumers.

The Second factor extracted indicates that consumers are price-sensitive, and hence
the marketers and executives of the FMCG companies should devise strategies
considering this factor for penetrating into the rural markets of Uttarakhand. Further,
satisfaction level of customers in terms of quality, quantity, utility etc. with regard to
FMCG should also be given priority by marketers. Thus, this holistic approach will
help the marketers in tapping the untapped potential of rural markets in Uttarakhand.

The Third factor extracted depicts that knowledge and understanding of ‘pre’ and
‘post’ purchase behavior should be analyzed by marketers. In Uttarakhand purchase
behavior of consumers is similar to the buying behavior of consumers in urban areas.
The knowledge and understanding of this urban attitude of consumers can help in
making a dent in to rural areas by adopting effective marketing practices.

The Fourth factor extracted signifies that for maintaining harmonious relationship
with the rural consumers, intermediaries or marketers should also a pay genuine and
honest attention to the principles of social responsibility. Thus, marketers should
attempt in crafting and implementing rural development programs for maintaining
long term relationship with the rural masses.

203
The fifth factor denotes that rural consumers are influenced a lot by the brand-name,
promotion strategies, including display of producers etc. Hence, selling products
through Haats, Mela, Demonstrations, Weekly Bazaars, Mahotasvas etc. may help in
influencing rural community for purchasing the FMCG.

The Sixth Factor pays attention to the Customer Retention Strategies. Marketers,
retailers and intermediaries should adopt innovative marketing practices on the basis
of the circumstances and understanding of the needs of the consumers in their
respective rural areas. They should also solicit suggestions of the rural consumers for
improvements in goods and services as part of customer retention practices.
Accordingly, the factor-analysis substantiate the earlier analysis, i.e.,
i) Rural consumers are influenced by brands (they are well aware about it)
ii) Rural consumers in Uttarakhand have the urban-attitude. In the sample, all the
respondents were educated and they were aware about most of the happenings in
the market.
iii) Rural consumers are price-sensitive.

Naturally, therefore, to encash the factors, the companies need to;

i) Build trust and loyalty;
ii) Retain the consumers;
iii) Deliver value;
iv) Treat them as aware consumers, and
v) Invest in social responsibility.
Thus, factor analysis has been quite revealing for the analysis and interpretation.

6.3 PART-C: CROSS-TAB ANALYSIS

Testing of Hypotheses And Validation of Results

Before taking up the testing of hypotheses, the hypotheses are detailed and presented
in a manner, so as to establish the impact of cross-connectivity amongst the different
questions placed in the questionnaire-schedules. In the first part, the hypotheses have
been presented with all the assumptions which were discussed through different
questions and later by applying Cross- Tab the results have been summarized.

204
HYPOTHESIS-1

H0: “Rural consumers are equally induced by the urban dimensions of

marketing mix, i.e., the ‘4 Ps’ of marketing”.

H1: “Rural consumers are not equally induced by the urban dimensions of
marketing mix, i.e., the ‘4 Ps’ of marketing”.

Accordingly, hypothesis-1 is discussed, by applying Cross- Tab on;

a) Product
b) Price
c) Place
d) Promotion
Hypothesis-1 is tested as follows:

a) Product: It means that assessment of influence of product on rural consumers with

regard to FMCG may measure its impact on rural market; the following two
assumptions have been hypothesized. These are discussed below, one-by-one;

1. Quality doesn’t affect the buying behavior of rural consumers. (C-6)

Table: 6.43
Quality Association of Rural Consumers

Cross tab
Quality Association Total
Count
Price Expectation fulfillment Brand or Co. Other
65 35 48 2 150
85 45 20 0 150
Total 150 80 68 2 300

Chi-Square Test
Value Df Asymp. Sig. (2-sided)
Pearson Chi-Square 17.446a 3 0.001
Likelihood Ratio 18.58 3 0
Linear-by-Linear Association 13.1 1 0
N of Valid Cases 300

a. 2 cells (25.0%) have expected count less than 5. The minimum expected count is 1.00.

205
 QUALITY ASSOCIATION
150
150

100 80
68

50
2
0

Price Expectation fulfillment Brand or Co. Other

Figure: 29

Associating quality with products the value of Chi-square is .001, which indicates the
rejection of null hypothesis and acceptance of alternate hypothesis. It indicates that
quality has significant relationship with the buying behavior of rural consumers and
they are quality conscious in their purchase of FMCG.

2. Customized/modified/altered products are not accepted in rural market. (M-8)

Table: 6.44
Consumers Require the Exact Product of Their Choice

Cross-Tab
Customers asks for the exact product
Count of their choice Total
No Yes
3 47 50

6 44 50
Total 9 91 100

206
 Chi-Square Tests
Asymp. Sig. Exact Sig. Exact Sig.
Value df
(2-sided) (2-sided) (1-sided)
a
Pearson Chi-Square 1.099 1 0.295
Continuity Correctionb 0.488 1 0.485
Likelihood Ratio 1.118 1 0.29
Fisher's Exact Test 0.487 0.243
Linear-by-Linear Association 1.088 1 0.297
N of Valid Cases 100
a. 2 cells (50.0%) have expected count less than 5. The minimum expected count is 4.50.
b. b. Computed only for a 2x2 table

CHOICE FOR EXACT PRODUCT

91
100

80

60

40
9
20

No Yes

Figure: 30

The association of rural consumer need with the exact product/brand/Special products
is significant which is being indicated by the chi-square value of .295 that means the
null hypothesis is accepted while the alternate is rejected at significance level of 5%.

B) Price: Assessment of influence of price on rural consumers with regard to FMCG

may measure its impact on rural market in terms of the following;
iv) Price doesn’t affect buyer behavior/decision making of rural consumers.
v) Rural consumers are not price-sensitive.
vi) Rural consumers prefer cheaper products.

207
Testing of these assumptions is as follows:
3. Price doesn’t affect buyer behavior/decision making of rural consumers. (C: 10)

Table: 6.45
Price in Purchase Decision Making

Cross tab
PRIMARY FOCUS OF RURAL CONSUMERS Total
Count
Quality Low price Brand or Company Availability
52 38 43 17 150
73 55 20 2 150
Total 125 93 63 19 300

Chi-Square Tests
Value Df Asymp. Sig. (2-sided)
a
Pearson Chi-Square 26.874 3 0.000
Likelihood Ratio 28.817 3 0.000
Linear-by-Linear Association 20.825 1 0.000
N of Valid Cases 300
a. 0 cells (0.0%) have expected count less than 5.
b. The minimum expected count is 9.50

PRIMARY FOCUS OF RURAL CONSUMERS

140 125
120
100 93

80 63
60
40
19
20
0
Quality Low price Brand or Easy
Company Availability

Figure: 31

The critical value of the chi-square at α= 0.05 is .000, indicates that the null
hypothesis is rejected and alternate hypothesis is accepted which means price is the
prime consideration of rural consumers though they consider the other factors also.

208
Theses other factors like quality, brand and Easy and nearby availability are also
considered, while making their purchase decisions.

4. Rural consumers are not price-sensitive. (M 20)

Table: 6.46
Consumer Are Price Sensitive

Cross tab
Consumers are price sensitive
Count Total
Very Low Low Medium High Very High
18 9 6 10 7 50
5 14 12 5 14 50
Total 23 23 18 15 21 100

Chi-Square Tests
Value Df Asymp. Sig. (2-sided)
Pearson Chi-Square 14.435a 4 0.006
Likelihood Ratio 15.012 4 0.005
Linear-by-Linear Association 4.192 1 0.041
N of Valid Cases 100
a. 0 cells (0.0%) have expected count less than 5. The minimum expected count is 7.50.

CONSUMER'S PRICE SENSITIVENESS

25 23 23
21

20 18
15
15

10

0
Very Low Low Medium High Very High

Figure: 32

The Asymptotic Significance of Chi-square is .006, which indicates that there is

significant relationship between the price-sensitiveness and the buying behavior of the
rural consumers, hence the null hypothesis is rejected at α 0.05, level and alternate

209
hypothesis is accepted. It indicates that 54% (Medium, High and Very high taken
together) retailers revealed that consumers were price sensitive in purchases of the
items of their daily requirements.

5. Rural consumers prefer cheaper products (M-12)

Table: 6.47
Preference to Cheaper Products

Cross tab
Customers do not prefer cheaper products
Count Total
No Yes
28 22 50
31 19 50
Total 59 41 100

Chi-Square Tests
Asymp. Sig. Exact Sig. Exact Sig.
Value df
(2-sided) (2-sided) (1-sided)
Pearson Chi-Square .372a 1 0.542
b
Continuity Correction 0.165 1 0.684
Likelihood Ratio 0.372 1 0.542
Fisher's Exact Test 0.685 0.342
Linear-by-Linear
0.368 1 0.544
Association
N of Valid Cases 100
a. 0 cells (0.0%) have expected count less than 5. The minimum expected count is 20.50.
b. b. Computed only for a 2x2 table

210
 PREFERNCE TO CHEAPER PRODUCTS
59

60

50 41

40

30

20

10

0
No Yes

Figure: 33

At significance level of 5% the chi-square value is .542, which indicates that the null
hypothesis is accepted and it reveals that consumers prefer cheaper products in their
demand for FMCG.

C) Place: Assessment of Place (or distribution in this case) in rural market with
regard to FMCG may measure its impact on rural consumers. The following
assumptions were taken for this purpose;
iv) Consumers are satisfied with the availability of FMCG in the villages.
v) All preferred brands are available to rural consumers.
vi) Retailers get timely delivery of products from the super-stockists/companies.

6. Consumers are satisfied with the availability of FMCG in the villages. (C15)

Table: 6.48
Satisfaction with the Availability of FMCG

Cross-Tab
Satisfaction with the availability of the aforesaid categories/brands.
Count
Very dissatisfied Dissatisfied Indifferent Satisfied Very Satisfied TOTAL
46 98 2 3 1 150
28 78 42 1 1 150
Total 74 176 44 4 2 300

211
 Chi-Square Tests
Asymp. Sig.
Value Df
(2-sided)
Pearson Chi-Square 44.015a 4 0.000
Likelihood Ratio 52.472 4 0.000
Linear-by-Linear Association 19.228 1 0.000
N of Valid Cases 300
a. 4 cells (40.0%) have expected count less than 5. The minimum expected count is 1.00

SATISFACTION WITH AVAILABILITY OF FMCGs

176
180
160
140
120
100
74
80
60 44
40
20 4 2
0
Very Dissatisfied Indiff erent Satisfied Very Satisfied
dissatisf ied

Figure: 34

The value of the chi-square is .000, which depicts the rejection of null hypothesis and
acceptance of alternate hypothesis. That means that there is significant difference
between the availability of the products and satisfaction of the rural consumers.

7. All preferred brands are available to rural consumers. (C21)

Table: 6.49
Availability of Preferred Brands in the Local Shops of Villages

Cross-Tab
Availability of preferred brand in the local shops
Count Total
Yes No
36 114 150
17 133 150
Total 53 247 300

212
 Chi-Square Tests

Asymp. Sig. Exact Sig. Exact Sig.

Value Df
(2-sided) (2-sided) (1-sided)

Pearson Chi-Square 8.273a 1 0.004

Continuity Correctionb 7.425 1 0.006
Likelihood Ratio 8.428 1 0.004
Fisher's Exact Test 0.006 0.003
Linear-by-Linear Association 8.245 1 0.004
N of Valid Cases 300

a. 0 cells (0.0%) have expected count less than 5. The minimum expected count is 26.50.
b. b. Computed only for a 2x2 table

BRANDS AVAILABILITY

247

250

200

150

100 53

50

0
YES NO

Figure: 35

At 5% significance level the null hypothesis is rejected, hence alternate hypothesis is

accepted, which is depicted by the chi-square value at .004. It indicates that the
preferred brands and their availability have no relationship in the rural areas of
Uttarakhand and they are not available in the market.

213
8. Distribution Network is the Major Problem. (M-26)

Table: 6.50
Problem of Distribution Network

Cross tab
Main problem – weak distribution network
Count Total
Very Low Low Medium High Very High
5 8 9 4 24 50
Region
4 10 13 10 13 50
Total 9 18 22 14 37 100

Chi-Square Tests
Value Df Asymp. Sig. (2-sided)

Pearson Chi-Square 6.902a 4 0.141

Likelihood Ratio 7.042 4 0.134

Linear-by-Linear Association 1.341 1 0.247

N of Valid Cases 100

a. 2 cells (20.0%) have expected count less than 5. The minimum expected count is 4.50.

PROBLEM OF DISTRIBUTION NETWORK

40 37
35
30
25 22
20 18
14
15
9
10
5
0
Very Low Low Medium High Very High

Figure: 36

Value of chi-square is 0.141, which indicates the acceptance of null hypothesis and
rejection of alternate hypothesis at 5% significance level. It indicates that the
distribution is the major problem in rural areas which needs the immediate attention

214
of the marketers and the corporates to improve the distribution network for the growth
of FMCG.

D) Promotion: Assessment of promotion-mix in rural market with regard to FMCG

may measure its impact on behavior of rural consumer.
iv) Promotion has no impact on buying behavior of rural consumers.
v) Television, Radio and Internet are not effective in promotion amongst rural
consumers.
vi) Rural Consumers are aware about the products and brands.
Testing of these assumptions, to validate the major hypothesis 2, is as follows;

a. Promotion has no impact on buying behavior of rural consumers. (C9)

Table: 6.51
Impact of Promotion on Consumer’s Behavior

Cross-Tab
Purchase Motivation
Television Availability of the Recommendation
Count References Total
ads product of shopkeeper
101 1 28 20 150

119 1 9 21 150
Total 220 2 37 41 300

Chi-Square Tests
Value Df Asymp. Sig. (2-sided)
Pearson Chi-Square 11.254a 3 0.01

Likelihood Ratio 11.737 3 0.008

Linear-by-Linear Association 3.808 1 0.051

N of Valid Cases 300

a. 2 cells (25.0%) have expected count less than 5. The minimum expected count is 1.00.

215
 EFFECTIVENESS OF PROMOTION

250
220

200

150

100

37 41
50

2
0
Television References Product Availability Recom of Retailers

Figure: 37

The chi-square value of .010 indicates the rejection of null hypothesis and the
acceptance of alternate hypothesis. That means rural consumers are highly induced by
the promotional activities of the marketers. On the basis of percentage it can be said
that the television advertisements are the most effective in promotions of FMCG in
rural areas.

10. Television, Radio and Internet are not effective in promotion amongst rural
consumers. (C-11)
Table: 6.52
Effectiveness of Television, Radio & Internet

Cross-Tab
Effectiveness of Television, Radio And Internet
Count Total
Lowest Low Medium High Highest
44 11 2 3 90 150
3 8 15 11 113 150
Total 47 19 17 14 203 300

Chi-Square Tests
Value Df Asymp. Sig. (2-sided)
a
Pearson Chi-Square 53.358 4 0.000
Likelihood Ratio 62.041 4 0.000
Linear-by-Linear Association 26.789 1 0.000
N of Valid Cases 300
a. 0 cells (0.0%) have expected count less than 5. The minimum expected count is 7.00.

216
 EFFECTIVENESS OF TV RADIO & INTERNET

250
203
200

150

100

47
50
19 17 14

0
Low est Low Medium High Highest

Figure: 38

Null hypothesis is rejected at 5% significance level and the alternate hypothesis is

accepted. It indicates that adverting through television have a significant impact on
buying behavior of rural consumers.

11. Rural Consumers are aware about the products and brands. (M-16)

Table: 6.53
Consumer Awareness About Products and Brands

Cross-Tab
Rate your consumer awareness and expertise
Count
Very High High Indifferent Low Very Low
4 27 8 7 4
10 31 4 1 4
Total 14 58 12 8 8

Chi-Square Test
Value Df Asymp. Sig. (2-sided)
a
Pearson Chi-Square 8.681 4 0.05
Likelihood Ratio 9.354 4 0.053
Linear-by-Linear Association 4.146 1 0.042
N of Valid Cases 100
a. 4 cells (40.0%) have expected count less than 5.
b. The minimum expected count is 4.00.

217
 AWARENESS OF RURAL CONSUMERS

58
60

50

40

30

20 14
12
8 8
10

0
Very High High Indifferent Low Very Low

Figure: 39

In validation of this assumption the null hypothesis is accepted at chi-square value of

.05 and at the significance level of 5%. It indicates that there exists proper awareness
among the rural folks of the universe about the products and brands available for their
daily requirements. The reason for this awareness could be the increasing literacy,
increasing incomes, and a continuous touch with urban lifestyle and trends.

Table: 6.54
Summary: Testing of Hypothesis- 1

Hypothesis-1: (H0) Rural consumers are equally induced by urban dimensions of

marketing-mix, i.e., the 4P's of Marketing.
NULL ALTERNATE
PARAMETERS RESULT
(H0) (H1)
Quality Product Rejected Accepted
PRODUCT
Customized Product Accepted Rejected
Price Consideration Rejected Accepted
PRICE Price Sensitiveness Rejected Accepted
Cheaper Products Accepted Rejected
Satisfaction with Availability Rejected Accepted Null
hypothesis
PLACE Preferred Brands Rejected Accepted
is rejected
Distribution Network Accepted Rejected
Impact of Promotion of Buying
Rejected Accepted
Behavior
PROMOTI Effectiveness of Television/Radio
ON Rejected Accepted
and Internet
Awareness of Rural Consumers Accepted Rejected

218
The above summary based on analysis of the eleven parameters as enumerated in the
table 6.54, proves that null hypothesis has been rejected on seven parameters, whereas
the alternate hypothesis is rejected only on four parameters.

It can, therefore, be inferred that the null hypothesis is rejected and alternate
hypothesis is accepted. It indicates that rural consumers are not equally induced by the
marketing mix dimensions, i.e., 4P’s of marketing. In other words, it proves that
separate strategies, with regard to marketing mix need to be applied by the marketers
operating in rural markets of the universe.

HYPOTHESIS- 2
This hypothesis has been discussed with regard to the following parameters;
i) Product Differentiation
ii) Buying Pattern of Rural Households
iii) Awareness among the rural consumers
iv) Availability of FMCG
Hypothesis 2 is as follows;

H0: “The current marketing approach of marketers is balanced with regard to

penetration of FMCG in rural markets”.
H1: “the current marketing approach of marketer is not balanced with regard to
penetration of FMCG in rural markets”.

Accordingly, for this purpose, following three assumptions have also been
hypothesized:
v) Firms offer different products to rural consumers.
vi) Buying patterns of rural households is the same as that of urban consumers.
vii) Rural Consumers are not aware about the products and brands.
iv) All preferred brands are available at local shops.

219
Testing of these assumptions is as follows:

1. Firms offer different products to rural consumers. (M-12)

Table: 6.55
Providing Different Products in Rural Market

Cross tab
Marketers are able to meet rural specific
Count needs Total
No Yes
26 24 50
Region
35 15 50
Total 61 39 100

Chi-Square Tests
Asymp. Sig. Exact Sig. Exact Sig.
Value df
(2-sided) (2-sided) (1-sided)
Pearson Chi-Square 3.405a 1 0.065

Continuity Correctionb 2.69 1 0.101

Likelihood Ratio 3.428 1 0.064

Fisher's Exact Test 0.1 0.05

Linear-by-Linear Association 3.371 1 0.066

N of Valid Cases 100

a. 0 cells (0.0%) have expected count less than 5. The minimum expected count is 19.50.
b. Computed only for a 2x2 table

DIFFERENT PRODUCT TO RURAL MARKETS

61
70
60
39
50
40
30
20
10
0
No Yes

Figure: 40

220
At 5% significance level the value of χ2 is .065, which indicates that the null
hypothesis is accepted and the alternate is rejected. It means there is significant
association between product differentiation and rural buying behavior.

2. Buying pattern of rural households is different as that of urban consumers.

(M-6)

Table: 6.56
Rural Buying Pattern is Different From Urban Customers

Cross tab
Buying habit is different from urban consumer
Count Total
No Yes
16 34 50
Region
11 39 50
Total 27 73 100

Chi-Square Test
Asymp. Sig. Exact Sig. Exact Sig.
Value df
(2-sided) (2-sided) (1-sided)
Pearson Chi-Square 1.268a 1 0.26
Continuity Correctionb 0.812 1 0.368
Likelihood Ratio 1.274 1 0.259
Fisher's Exact Test 0.368 0.184
Linear-by-Linear 1.256 1 0.262
Association
N of Valid Cases 100
a. 0 cells (0.0%) have expected count less than 5. The minimum expected count is 13.50.
b. Computed only for a 2x2 table

DIFFERENT BUYING HABITS OF RURAL CONSUMERS

73
80
70
60
50
27
40
30
20
10
0
No Yes

Figure: 41

221
Value of chi-square is 0.26, and the significance level is 5%, which says that the null
hypothesis is accepted and the alternate hypothesis is rejected. It indicates that there is
significant difference between the buying habits of rural consumers and urban
consumers, hence, rural consumers require different marketing treatment.

3. Rural Consumers are not aware about the products and brands. (M20)

Table: 6.57
Consumers’ Awareness and Expertise About Products and Brands

Cross-Tab
Rate your consumer awareness and expertise
Count Very Very Total
High Indifferent Low
High Low
4 27 8 7 4 50
Region
10 31 4 1 4 50
Total 14 58 12 8 8 100

Chi-Square Test
Value Df Asymp. Sig. (2-sided)
a
Pearson Chi-Square 8.681 4 0.04
Likelihood Ratio 9.354 4 0.053
Linear-by-Linear Association 4.146 1 0.042
N of Valid Cases 100
a. 4 cells (40.0%) have expected count less than 5.
b. The minimum expected count is 4.00.

CONSUMERS AWARENESS

58
60

50

40

30

20 14
12
8 8
10

0
Very High High Indifferent Low Very Low

Figure: 42

222
In validation of this assumption the null hypothesis is rejected at chi-square value of
.04 and at the significance level of 5%. It indicates that there is good awareness
among the rural folks of the universe about the products and brands available for their
daily needs. The reason for this awareness can be of higher literacy, increasing
incomes, and a continuous touch with urban lifestyle and trends.

4. All preferred brands are available at local shops. (C-21)

Table: 6.58
Availability of Preferred Brands

Cross tab
Is your favorite brand available in the local shops?
Count Total
Yes No
36 114 150
Region
17 133 150
Total 53 247 300

Chi-Square Tests
Asymp. Sig. Exact Sig. Exact Sig.
Value df
(2-sided) (2-sided) (1-sided)
Pearson Chi-Square 8.273a 1 0.004
Continuity
7.425 1 0.006
Correctionb
Likelihood Ratio 8.428 1 0.004

Fisher's Exact Test 0.006 0.003

Linear-by-Linear
8.245 1 0.004
Association
N of Valid Cases 300

a. 0 cells (0.0%) have expected count less than 5. The minimum expected count is 26.50.
b. Computed only for a 2x2 table

223
 BRAND AVAILABILITY AT VILLAGE

247

250

200

150

100 53

50

0
Yes No

Figure: 43

Chi-square vale of 0.004, at α .05, indicates that the all preferred brands are not
available in the village shops and hence distribution is the major problem in the
current marketing approach.

Table: 6.59
Summary: Testing of Hypothesis- 2

Hypothesis-2: (H0) The Current Marketing approach of marketer is balanced with

regard to penetration of FMCG in rural market.
NULL ALTERNAT
PARAMETERS Result
(H0) ATE (H1)
1 Rural Specific Marketing Accepted Rejected
2 Buying Pattern of Rural Households Accepted Rejected Null
Hypothesis
3 Consumers Awareness Rejected Accepted is Rejected
4 Availability of preferred brand Rejected Accepted

In the summary given in Table 6.59 based on the four parameters, analyzed in
questionnaire schedules, shows that the null hypothesis is rejected on two parameters
while the alternate hypothesis is also rejected on two parameters. The acceptance of
second assumption supports the statement that the buying patterns of rural consumers
is not similar to their urban counterparts, hence it requires different marketing
strategies. It explains that the marketing practices of the marketers are not as per the
expectation of the rural consumers of the universe. Though the tally of acceptance and

224
rejection is evenly distributed, there are strong reasons, based on the internal analysis,
to count it as rejected. In testing of these assumptions the significance level is taken at
5%.

HYPOTHESIS 3:

H0: “The current marketing approach doesn’t strengthen the indigenous

existing support-system of the rural society and economy”

H1: “The current marketing approach is favorable to the existing support-

system of the rural society and economy”

For this analysis the following four assumptions have also been hypothesized:
v) Modern marketing has significantly improved the life style of rural consumers.
vi) Modern FMCG have negatively impacted on customs, traditions and patterns of
villages.
vii) Consumption of modern FMCG has disturbed the economic independence of
villages.
viii) Modern marketing is making rural consumers its slaves.

The testing of these assumptions is as follows:

1. Modern marketing has significantly improved the life style of rural

consumers. (C-25)

Table: 6.60
Level of Happiness and Modern Marketing

Cross tab

Do you feel that level of happiness after

Count introduction of modern marketing has gone up?
Yes No Total
92 58 150
Region
102 48 150
Total 194 106 300

225
 Chi-Square Tests
Asymp. Sig. Exact Sig. Exact Sig.
Value df
(2-sided) (2-sided) (1-sided)
Pearson Chi-Square 1.459a 1 0.227

Continuity Correctionb 1.182 1 0.277

Likelihood Ratio 1.46 1 0.227

Fisher's Exact Test 0.277 0.138

Linear-by-Linear
1.454 1 0.228
Association
N of Valid Cases 300

a. 0 cells (0.0%) have expected count less than 5. The minimum expected count is 53.00.
b. Computed only for a 2x2 table

Level of Happiness after Modern Marketing

194

200
180
160
140 106
120
100
80
60
40
20
0
Yes No

Figure: 44

The assumption that modern day products have resulted in improvement in rural life
style is being proved with the chi-square value of .227 at significance level of 5%. It
means null hypothesis about the statement is accepted while the alternate is rejected.

226
2. Modern FMCG have no negative impact on customs, traditions and patterns
of villages. (C-16)

Table: 6.61
Modern Marketing and Village Traditions

Cross tab
How do you feel about the replacement of village traditions And
customs with modern products
Count Total
Strongly Somewhat Strongly
Indifferent Agree
Disagree Disagree Agree
41 31 42 15 21 150
40 62 23 15 10 150
Total 81 93 65 30 31 300

Chi-Square Test

Value df Asymp. Sig. (2-sided)

Pearson Chi-Square 19.803a 4 0.001
Likelihood Ratio 20.171 4 0
Linear-by-Linear Association 5.373 1 0.02
N of Valid Cases 300

a. 0 cells (0.0%) have expected count less than 5. The minimum expected count is 15.00.

Modern Marketng Vs. Tradtional Village

100 93
90 81
80
70 65
60
50
40 30 31
30
20
10
0
Strongly Somew hat Indifferent Agree Strongly
Disagree Disagree Agree

Figure: 45

For this assumption the value of chi-square is .001 at 5% significance level, which
rejects the validity of statements and accepts the alternate hypothesis, i.e.,

227
consumption of modern day products has negatively impacted the customs, traditions
and patterns of rural life.

3. Consumption of FMCG has disturbed the economic independence of villages.

(C-24)

Table: 6.62
FMCG Consumption and Rural Budget

Cross tab
Do you think that these products have put extra And unnecessary
Count burden on your budget?
No Yes Total
58 164 222
12 62 74
0 4 4
Total 70 230 300

Chi-Square Tests
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 4.281a 2 0.118
Likelihood Ratio 5.343 2 0.069
Linear-by-Linear Association 4.195 1 0.041
N of Valid Cases 300
a. 2 cells (33.3%) have expected count less than 5. The minimum expected count is .93.

Impact of FMCG on Rural Budget

230
250

200

150
70
100

50

0
No Yes

Figure: 46

228
The value of chi-square is .118, which leads to acceptance of null hypothesis and
rejection of alternate hypothesis; therefore it indicates that modern FMCG have put an
extra burden on the budget of rural households and disturbed the economic
independence of the rural society.

4. Modern marketing making consumers its slaves? (C 26)

Table: 6.63
Dependence on Modern Day Products

Cross tab

Modern marketing has made you its slave?

Count Total
No Yes

93 166 259

18 23 41

Total 111 189 300

Chi-Square Tests

Asymp. Sig. Exact Sig. Exact Sig.

Value Df
(2-sided) (2-sided) (1-sided)

Pearson Chi-Square .971a 1 0.325

Continuity
0.658 1 0.417
Correctionb
Likelihood Ratio 0.953 1 0.329

Fisher's Exact Test 0.384 0.208

Linear-by-Linear
0.967 1 0.325
Association
N of Valid Cases 300

a. 0 cells (0.0%) have expected count less than 5. The minimum expected count is 55.50.
b. Computed only for a 2x2 table

229
 Dependence on Modern Marketing

189

200

150 111

100

50

0
No Yes

Figure: 47

The critical value of chi-square at α .05 level, which is .325 indicates that the null
hypothesis is accepted and the alternate hypothesis is rejected, which supports that the
rural people agree that the use of these modern FMCG have destroyed their
independence and now they have become habitual of this consumerism.

Table: 6.64
Summary: Testing of Hypothesis- 3

Hypothesis-3: (H0) The current marketing approach doesn’t strengthen the

indigenous support-system of the rural society and economy.
NULL ALTERNATA
PARAMETERS
(H0) TE (H1)
Life Style Improvement Accepted Rejected

Customs/Traditional pattern Rejected Accepted Null

Hypothesis is
Budget/Economic Independence Accepted Rejected Accepted

Dependency on FMCG/Slaves Accepted Rejected

In the above summary, based on the analysis of the four parameters as presented in
table 6.64, it emerges that the null hypothesis has been accepted on three parameters
and the alternate hypothesis is accepted at one parameter only, and the interestingly
even in the rejected parameter the major null hypothesis is supported.

230
The distribution of the results indicates that null hypothesis is accepted and the
alternate is rejected. It means that the existing marketing system is not favorable to
the indigenous support-system of the rural society in Uttarakhand.

HYPOTHESIS 4:

Hypothesis no- 4 has been analyzed on the following parameters as contained in the
questionnaire schedule:
i) Consumption/ Essentiality of FMCG.
ii) Popularity of Branded products.
iii) Substitutes of Local products.
iv) Growth of FMCG.

Hypothesis -4 is as follows:

H0: “The FMCG have become an essential part of rural households.”

H1: “The FMCG are not an essential part of rural households.”

It refers to hypothesization of the following assumptions as well;

v) FMCG are not essential for rural households.
vi) Branded products are more popular in rural market.
vii) FMCG are the substitute to local options.
viii) Growth of FMCG is significant in rural areas.

1. FMCG are not essential for Rural Consumers. (C-20)

Table: 6.65
Essentiality of FMCG to Rural Consumers
Cross tab
FMCG are not essential for Rural Consumers
Count Strongly Somewhat Strongly Total
Indifferent Agree
Disagree Disagree Agree

42 72 7 26 3 150
Region
23 56 42 28 1 150

Total 65 128 49 54 4 300

231
 Chi-Square Test
Asymp. Sig. Exact Sig. Exact Sig.
Value Df
(2-sided) (2-sided) (1-sided)
Pearson Chi-Square 6.105a 1 0.013
Continuity Correctionb 5.479 1 0.019
Likelihood Ratio 6.149 1 0.013
Fisher's Exact Test 0.019 0.009
Linear-by-Linear
6.085 1 0.014
Association
N of Valid Cases 300
a. 0 cells (0.0%) have expected count less than 5. The minimum expected count is 40.50.
b. Computed only for a 2x2 table

Essentiality of FMCG to Rural Consumers

219
250

200

150
81
100

50

0
No Yes

Figure: 48

The assumption that the FMCG are not essential is rejected at α level .05, when the
computed value of chi-square is .013. It indicates that rural consumers are now used
to of these products and it has become a part of their habit to use FMCG for their
daily requirements.

232
2. Branded products are more popular in rural market. (C-24)

Table: 6.66
Popularity of Brands

Cross tab
Customers ask to have the preferred brand /product
Count
No Yes Total
3 47 50
Region
6 44 50
Total 9 91 100

Chi-Square Tests
Asymp. Sig. Exact Sig. Exact Sig.
Value df
(2-sided) (2-sided) (1-sided)
a
Pearson Chi-Square 1.099 1 0.295
Continuity Correctionb 0.488 1 0.485
Likelihood Ratio 1.118 1 0.29
Fisher's Exact Test 0.487 0.243
Linear-by-Linear Association 1.088 1 0.297
N of Valid Cases 100
a. 2 cells (50.0%) have expected count less than 5. The minimum expected count is 4.50.
b. Computed only for a 2x2 table

Preference for Branded Products

91
100

80

60

40
9
20

0
No Yes

Figure: 49

Chi-square value of 0.295 indicates that the assumption, i.e., the null hypothesis is
accepted at 5% significance level. It says that there is more preference for branded
products instead of local products or unbranded products among the rural consumers.

233
3. FMCG are the substitutes to local options. (M13)

Table: 6.67
FMCG and Local Village Products
Cross tab

Rural people buy only if no other option exists

Count
No Yes Total
31 19 50
Region
36 14 50
Total 67 33 100

Chi-Square Test
Asymp. Sig. Exact Sig. Exact Sig.
Value Df
(2-sided) (2-sided) (1-sided)
Pearson Chi-Square 1.131a 1 0.288
Continuity Correctionb 0.724 1 0.395
Likelihood Ratio 1.134 1 0.287
Fisher's Exact Test 0.395 0.198
Linear-by-Linear Association 1.119 1 0.29
N of Valid Cases 100

a. 0 cells (0.0%) have expected count less than 5. The minimum expected count is 16.50.
b. b. Computed only for a 2x2 table

Modern FMCG Vs. Local Products

67

70

60

50
33
40

30

20

10

0
No Yes

Figure: 50

234
The null assumption is being accepted at chi-square value of 0.288 at significance
level of 5%, which means that it is not true that the purchase of FMCG is only done
when people have no local options to meet their needs, but these have become their
routine requirement and they are regularly using these products.

4. Growth of FMCG is significant in rural areas. (M-18)

Table: 6.68
FMCG Growth:
Cross- Tab

Growth of FMCG in rural market

Count
Low Steady Fast Very Fast Total
6 30 7 7 50
Region
8 23 12 7 50
Total 14 53 19 14 100

Chi-Square Tests

Value Df Asymp. Sig. (2-sided)

Pearson Chi-Square 2.526a 3 0.471
Likelihood Ratio 2.545 3 0.467
Linear-by-Linear Association 0.114 1 0.736
N of Valid Cases 100

a. 0 cells (0.0%) have expected count less than 5. The minimum expected count is 7.00.

FMCG Grow th

60 53

50

40

30
19
20 14 14

10

0
Low Steady Fast Very Fast

Figure: 51
235
 Table: 6.69
Summary: Testing of Hypothesis- 4

Hypothesis-4 : (H0) The FMCG have become an essential part of Rural households
ALTERNAT
PARAMETERS NULL (H0) Result
E (H1)
1
Essentiality of FMCG Rejected Accepted
2
Popularity of Branded Products Accepted Rejected Null
Hypothesis
3
FMCG used only in absence of local products Accepted Rejected is Accepted
4
Growth of FMCG Accepted Rejected

In the summary presented in table 6.69, based on analysis of the four parameters as
indxed in the table, it emerges that the null hypothesis is accepted on three parameters
and alternate hypothesis has been rejected. Further, the rejected statement also
substatiate the validity of acceptence of remaining assumptions. It prooves that the the
FMCG have become an essential part of rural life.

Table: 6.70
Summary Testing of Major Four Hypotheses
Statement NULL (H0) ALTERNATE (H1)
Rural Consumers are equally induced by the
H0 urban dimensions of marketing mix, i.e., the ‘4Ps’ Rejected Accepted
of Marketing.
The current marketing approach of marketers is
H0 balanced with regard to penetration of FMCG in Rejected Accepted
rural markets.
The current marketing approach doesn’t
H0 strengthen the indigenous support-system of the Accepted Rejected
rural society and economy.
The FMCG have become an essential part of rural
H0 households.
Accepted Rejected

236
“Human greed, which takes no account of the health or wealth of the people who
come under its heels, is responsible for the hideous rice mills one sees in all the
rice-producing tracts. If public opinion was strong, it will make rice mills and
impossibility by simply insisting on unpolished rice and appealing to the owners
of rice-mills to stop a traffic that undermines the health of a whole nation and
robs the poor of an honest means of livelihood."
-Mahatma Gandhi

Chapter- 7
CONCLUSION
AND SUGGESTIONS
 CONCLUSION AND SUGGESTIONS

“Social-consciousness-driven enterprises can be formidable competitors for the

greed-based enterprises.” -Dr. Mohd. Yunus

The significance of rural market in India can not be underestimated. Almost 70% of
Indians still live in villages. Significant changes have been witnessed in rural areas
with improvements in infrastructure, transport and communications. Rural
Uttarakhand is the home to almost 70 lakh people. Barring a few villages in remote
mountainous areas, almost all are connected with roads and telephones. Penetration of
FMCG in these areas is also related to availability and use of consumer-durables, like;
television, washing machines, and refrigerators. Television was found to be the most
effective medium of awareness and a very strong medium of promotion of FMCG.
Almost 70% of the respondents were influenced by television advertising, ( Zee TV,
Star Plus and Colors were the most popular TV channels for most of the rural
families).

The research indicates that a convergence of tastes and preferences of Indian

consumers is happening. Rural consumers are watching the same programs as being
watched by their urban counterparts. These rural consumers are commuting to nearby
towns and cities on a regular basis. They were found to be keen observers regarding
fashion trends and patterns of consumption of urbanites. Disposable incomes in rural
areas have gone-up significantly. Armed with newly earned incomes these rural
consumers are in no mood to compromise and buy the best, the latest and the items in
fashion.

Almost 70% of disposable income of the affluent rural families is spent on FMCG.
The survey gives a very clear indication that almost all rural consumers are familiar
with the known and popular brands. They can easily distinguish branded from local
products. Local brands that used to be very popular in the past are now getting
competition from the well known brands of multinational corporations.

A very important revelation was that a big majority of rural consumers are willing to
put in that extra effort to buy the products of convenience. People were found to
travel, as much as 15 to 20 kms, to buy the branded soaps, toothpastes and beauty-

237
products. The collection of goods by some retailers in rural parts of Kumaun was an
eye-opener for the researcher. Almost all the branded products were available.
Bharatpur, Bajoon, Mangoli, Pinaro (Nainital district) and Shrikot, Baghori, Mathali,
Kandi ( Uttarkashi District) were only some of the villages where the distribution of
these products was almost negligible.

Marketing-mix

The results of the research indicate that the elements of marketing-mix do require re-
orientation, though the buyer-behavior is quite similar to that of urban consumers.
Rural consumers are buying essentially the same products. Some firms in the past did
try to modify their products for rural consumers but the results were not very
encouraging. The researcher in her efforts to read the minds of the rural consumers
observed that the rural consumer will not accept any offering from a firm that is
different from that available for urban consumers. Most of rural people considered
this as ‘second grade treatment’. With sufficient disposable incomes, they love to buy
the best that the company has to offer. It is, therefore, very clear that ‘Product’
element of marketing-mix must be exactly the same for all consumers.

Price is an important factor that influences buying behavior of rural consumers.

Though, in some cases the respondents are more than willing to pay a premium for
their preferred branded products. Like their urban counterparts, rural consumers also
associate good quality with high price. The primary reason for buying FMCG is the
‘Brand’ that is also popular with urban consumers. Thus, regarding price, different
strategies have to be followed because they are really price-sensitive and purchase-
decision is influenced by price.

Similarly, if one considers the third ‘P’, i.e., Place, it was found that in this case also
the existing approach of the urban marketing may not serve the purpose because the
availability of preferred brands needs to be ensured. Purchase decision is influenced
by the availability of goods in particular areas. Finally, regarding promotion it was
found that no specific or new promotional strategies are required for the rural areas
and that TV and internet are playing their roles since these have reached very deep
into the rural areas of Uttarakhand.

238
The buyer behavior of these people is characterized by frequent purchases in small
quantities of even the highly priced brands. This clearly indicates that marketers must
take into account the component of packaging. It is possible to create new packets of
varying quantities to meet the demand of rural markets. Such packaging may not be
prevalent in urban markets but it is important for rural-markets. Packaging constitutes
an integral part of marketing-mix. Some experts may not consider it as a fifth ‘P’ of
marketing, and may consider it as an extension part of the product itself. Taking the
traditional view of 4Ps, it is suggested that the marketer/firm must not interfere with
the core qualities of the product, so that it is exactly the same which is being
consumed by their urban counterparts. Packaging needs to be modified to suit the
purchase behavior of rural consumers. This inference is further strengthened from the
analysis of the responses of retailers in village markets. Retailers, especially in hilly
villages, were not satisfied with the supply-arrangements of firms. Small retailers in
remote areas were ignored at times by providers. Even the consumers complained of
non-availability of their favorite brands on a regular basis. Some of the loyal
consumers in villages were found to travel up to 15-20 kms to nearby towns or cities
in search of their favorite brands. However, most of the, ‘not so loyal’ consumers
were found to switch brands and replace it by the products of their second preference,
provided by the competing brands. The distribution network in rural markets is not
well developed leading to frequent shortages of desired commodities. ‘Pull’ factor
seems to be dominant in rural areas. Demand for FMCG comes from these
consumers, but the retailers, quite often fail to meet their demand. There is an urgent
need for marketers to overhaul their distribution network.

It is suggested that marketers/firms be very careful to include and give due

importance to the distribution element of marketing-mix. To retain good existing
customers, firms must ensure that their products are available even in the smallest
retail outlets in the remotest of the villages.

Therefore, from the angle 4Ps of marketing the marketers need to follow a mixed
approach i.e., in some cases the similar strategies may work, but in some of the cases,
particularly related to distribution and price, different strategies need to be adopted.

239
The 4As of Rural Marketing

If one reviews the 4As of rural marketing, i.e., availability, affordability, acceptability
and awareness, as reported by many scholars, reports, and referred to in the second
chapter of this dissertation. In many studies, it was found that availability and
affordability are the critical areas of consideration, whereas acceptability and
awareness are not such big issues.

Interestingly, the findings of this research also reveal the same phenomenon. Thus,
only two ‘A’s, i.e., affordability and availability need to be emphasized.

The reasons for such a trend are rather simple. Because of the increased channels of
communication (TV, Internet, Mobile) and increased contact with urban lifestyle ( on
account of many circumstantial reasons), ‘awareness’ has gradually increased in all
parts of rural society, including amongst the rural people of Uttarakhand. Similarly,
acceptability has very easily been possible on account of increased awareness. In fact,
acceptability follows awareness in a very rational manner.

The issues which remain; are affordability and availability. Though, rural incomes are
growing, but so are the items of expenditure. Naturally, therefore, rural consumers can
not afford to spend all their new earnings on FMCG alone. As a result, affordability is
an issue of substance. Similarly, the logistics of rural marketing is difficult in whole
of the country and this problem gets compounded in the hills. It becomes more
difficult and costlier to make goods available regularly at the same prices. Thus,
affordability’ and ‘availability’ are the critical factors to be seriously considered by
the marketers in Uttarakhand.

Traditions, Values, Culture Vs. Indigenous Support-System

The traditional is gradually yielding to the modern. The phenomenon is evident

everywhere. It is almost universal. “The old order changeth yielding place to new”.
The only permanent thing in the world is ‘change’. The issue that is often debated is
whether the change is positive? Many people associate development with improved
accessibility in terms of construction of roads in remote areas, satisfying the basic
needs of water and electricity, basic educational facilities, basic medical facilities, and
ensuring basic hygiene and sanitation. If these elements are considered to be the
symbols of development, then there are clear signs of development in the areas under

240
observation. It is often argued that traditions and culture should be preserved. If one
believes in preserving the traditional way of doing things it would mean that people in
villages should still use wood for cooking, using reetha for washing hair and clothes
and ‘answering natural calls’ in the open. Is it advisable to hold on to these traditional
ways of living? Should they not adopt more environment-friendly ways of cooking
and using toilets? Should they not bypass “Tantra and Mantra”, to address their
health-issues or take advantage of modern medicines? Science and technology have,
without any doubt, enriched the human life in a variety of ways, and the change must
be accepted by each and every society; be that urban or rural or tribal.

In the name of traditions and culture, therefore, the undue load of the past should not
be carried forward, because it is not healthy for the society. In this study, therefore,
the above-mentioned approach and angle was followed, it was explored whether the
indigenous support-system is getting destroyed, and whether the dependence of rural
areas on supplies from the modern marketers is continuously increasing? With regard
to this particular aspect, it was found that, it is true. It has been quoted earlier in the
analysis that about 69% of the respondents had the opinion that their life would not be
difficult without the modern products, commonly knows as FMCG. They also
admitted in response to another question of the questionnaire-schedule that they knew
that they were the victims of modern marketing gimmicks. Simultaneously, it is very
important to understand that the indigenous support-system was the backbone of
economic independence, and the resultant happiness for the rural people. But,
somehow, with the popularization of the FMCG in the rural areas, the indigenous
support-system is on the brink of collapse. The consumerism is on the rise, and it may
provide false satisfaction of being modern and urbane, but it can never give the
happiness which they had earlier. It is rather strange that in their mad-rush to buy the
FMCG, people usually exceed their budgets, and in order to meet their requirement of
these items, they are selling even the land or the other assets. It was revealed to the
researcher, during survey, in ‘Amirtpur’, ‘Ambia’, and ‘Pinrao’ villages in Bhimtal
Block. Many such instances were found by the researcher.

It is really shocking that in a country wherein the rural areas, having been the safest
repositories of the ages-old value-system, are getting polluted by the cruel shocks of
modern day consumerism. The Indian philosophy as contained in the ancient text
(ISHA VAASYO UPNISHAD) preaches the concept of “consumption with sacrifice”

241
(Ten Tyakten Bhujjitha), which is rather unique, and one doesn’t find its parallel in
any scriptures of the world. But on the other, the very repositories of this value-
system are being destroyed and uprooted by the‘t-sunami’ of consumerism. This is the
permanent damage, and the generations to follow will realize its impact in a couple of
decades.

Another revelation was that the acquisition of farms in Tarai Region of Kumaun (in
Jawaharngar and Khurpia, villages of Rudrapur Block) had a very bad impact on the
poor rural population of the local area. The Government acquired these farms for
industrial purposes, but the industries never came up, the fertile land continued to
remain uselessly abandoned and the rural people were deprived of their livelihood.
They find it difficult to migrate to the nearby towns because cumulative cost of living
in the towns will be more than what they could possibly earn. It has made their lives
miserable and during the field-visits, they requested the researcher to highlight their
plight.

In a nutshell, it can be inferred that;

1. Rural marketing and undue rush for consumerism have made the life of rural
consumers actually difficult, though apparently (on the face of it/at surface level)
happier (in a so-called manner).
2. The local support-system is largely destroyed in the spate of the ‘t-sunami’ of
consumerism. and
3. The Government policies towards industrialization are also responsible for turning
producers into pure consumers only.

Revisiting Objectives of the Study:

The study was proposed with four objectives. These are as follows:
1. to explore the marketing-mix (i.e., Product, Price, Place and Promotion) with
regard to rural marketing;
2. to identify the problem areas with regard to rural marketing in Uttarakhand with
special reference to destruction of basic support-system.
3. to explore the significance of FMCG among rural households in Uttarakhand.
4. to propose a prospective plan of action with regard to rural marketing in
Uttarakhand.

242
From the angle of realization of these objectives the study has reasonable been
successful. It is discussed as follows;

1. Regarding the study of marketing-mix, it was found that with regard to product
and promotion the urban-strategies work, to a certain extent, with the rural
consumers also, but regarding the price and place, the different strategies need to
be applied. Further, another ‘P’, i.e., packaging also emerged as a very important
factor but without disturbing the original 4Ps, it may be included with product and
studied with it. However, packaging is very important in rural marketing.

The distribution network is a weak link in rural marketing, and particularly in

Uttarakhand; distribution-network is a real problem. So, in the category of ‘place’,
new strategies shall have to be adopted. Accordingly, this first objective is
reasonably achieved through this dissertation.

2. The second objective related to identification of problem-areas with regard to

rural marketing in Uttarakhand and the study reveals that there exist some real
problem areas. These are as follows;
i) Distribution-network is the biggest challenge.
ii) Though, rural consumers in Uttarakhand are using the branded products, but
brand-loyalty was not found in the sample. It is due to the irregular supply of the
preferred brands in local rural markets.
iii) People are highly literate, so they are much aware, and as such, they demand
better-quality and branded products. Rural marketers need to address this issue.
iv) Villages in the hills are slightly different from the villages down below in the
plains, so similar strategies may not work.

v) Purchases of FMCG are in small quantities, so smaller packs with the same
quality need to be brought out.
vi) Female respondents in the sample were very few and their role in purchase-
decision did not matter. If it is taken to be an indicator, it is obvious that purchase-
decision is usually influenced by the younger male members of the family.

The second part of this objective related to identification of the problem areas with
regard to destruction of the basic support-system. This objective was difficult to

243
achieve, but different questions of the questionnaire-schedules proved to be the ideal
instruments to elicit answers, and it was very cleared revealed that;
i) Indigenous basic support-system is getting destructed;
ii) The elderly respondents were more concerned about it;
iii) Even the majority comprising all respondents agreed that they are the victims of
modern-day marketing gimmicks, and that they could do without these products;
iv) 69% of respondents said that their life will not be difficult without the modern
FMCG, and
v) About 77% of there respondents agreed that they exceeded their budget to manage
the purchases of FMCG.

All the above prove that unbridled consumerism is sweeping the rural areas of
Uttarakhand, and the ever-evolving strategies of rural marketers are adding to the
pace of this mad-rush for consumerism.

Thus, indigenous basic support-systems existing in rural areas are getting destroyed. It
is bound to have far-reaching effects, because the indigenous support-system was the
key to economic independence of the villages, and eventually the basis of happiness.

3. The third objective was related to exploring the significance of FMCG among
rural households in Uttarakhand. This objective has been fully achieved because
many tables given in the chapter, tilted ‘Analysis’, prove that the FMCG have
become very-very significant in daily lives of rural households of Uttarakhand.
This conclusion may be supported by the following;
i) 69% of the people have a preference for branded items.
ii) They purchase these items usually on a weekly basis, which means these items
have become very-very significant for them.
iii) They (about 65%) feel that their life is happier with these modern day products.
iv) The survey based on the questions from retailers also substantiates these findings
Thus, it may be inferred that the third objective of the study has also been reasonably
achieved.

4. The fourth objective related to propose a prospective plan of action with regard to
rural marketing in Uttarakhand. In this regard, the research-based findings go to

244
 prove that the prospective plan needs to be prepared, wherein the following must
be given the top priority.
i) Distribution network needs to be re-aligned.
ii) Even the local people may be involved in working as the local retailers.
iii) Packaging has to be different, especially to meet the weekly or fortnightly
requirements of the consumers.
iv) The price has emerged as the critical factor so low-priced penetration model
should be adopted.
v) The marketer must follow the ethical policies in rural marketing. It refers to
meeting the needs profitably without creating undue wants or without disturbing
the social fabric of the simple people of hills.
vi) The TV and Internet have entered the rural market in Uttarakhand at a fast pace
and these should be accepted as the medium of promotion. In other words only the
screening of films at corners or quadrangles may not work very profitably in
Uttarakhand.
vii) The local beverages, dairy-products, and bakery-products, as well as, water are
available in abundance in rural market of Uttarakhand, so rural-marketers should
avoid, and must refrain from pushing these items in the rural market.

Thus, the prospective plan of action of the marketers must contain the above
mentioned elements, which have emerged out of this study.

This fourth objective has not been achieved directly, but it is the end- product or the
output of the analysis carried out to meet the first three objectives. So, in a way, it is
the result of this research, whereby a prospective plan of rural marketing is suggested
to the rural marketers.

Accordingly, this study has reasonably been successful in meeting the objectives set
for the study.

Results of Factor Analysis:

The factor analysis was attempted to arrive at the factors which explain the important
aspects of rural marketing, based on the survey, associated with FMCG. Though the
factor analysis did not satisfy one of the adequacy tests for performing this analysis,

245
but to have a broader insight of customer-marketer relationship in the rural markets
the test was performed. The KMO test and the Bartlett test denoted that the factor
analysis could be undertaken using the available data-set. Accordingly, this analysis
was carried out and its results, by way of conclusion, are reported below;

i) Trust and loyalty of rural consumers has to be won. It can be done by providing
quality products in the required packaging and by ensuring the availability of
these products in the rural markets of Uttarakhand. The last aspect refers to
strengthening of distribution network. So, the analysis of the first factor reveals
the following related factors;
a) Quality Products
b) Affordable Packaging
c) Distribution network.

ii) The second factor identified was price-sensitiveness of the consumers. It goes to
prove that rural consumers in Uttarakhand are price-sensitive, which, in turn,
refers to different pricing strategies for the rural consumers of Uttarakhand. It is,
perhaps, due to low-incomes of the people and resultant weaker affordability. No
doubt, rural incomes are rising but so is the multiplicity of its applications.
Moreover, no great revolution has actually happened with the incomes in rural
areas. It is the normal and gradual increase.

iii) The third factor clearly indicated that the rural consumers have accepted almost
the urban attitude. It indicates that no compromise with regard to quality or
branded products can be made while delivering products to rural consumers of
Uttarakhand.

iv) The fourth factor was related to awareness of consumers and the resultant
responsibility of the marketers. It proves that the rural consumers are aware about
the products, brands, marketing-gimmicks and the value delivered to them. Thus,
considering the higher level of awareness, it is the social responsibility of the
marketer to deliver value in terms of product, packaging, brand and price to the
consumers. Further, it proved that considering the level of awareness of
consumers, the urban-pattern of promotion may be followed. It has been validated
in testing of the first hypothesis through cross-tabs as well as in the percentage
based analysis.

246
v) The fifth factor related to the revealation that rural consumers are influenced more
by the brand-name, so urban promotional-strategies including display of products
and convenient packaging etc., should be followed when it comes to display, one
may opt for demonstrations in weekly Haats, Melas and Social Functions.

vi) The sixth factor related to the retention of the customers. It is increasingly difficult
in view of non-availability of the choicest brands. Thus, if distribution strategy is
improved, customer-retention is possible, and it may ensure customer loyalty as
well. In order to retain the customer, the cumulative impact of the factors
enumerated above can also not be denied.

Thus, the factors emerging out of the factor analysis re-affirm the analysis carried out
with the help of percentage analysis, cumulative percentage analysis and cross tabs.

Summary Testing of the Hypotheses

The hypotheses have been tested in the chapter titled ‘Analysis and Interpretation’,
preceding this chapter, but a summary analysis of these hypotheses is given as below;

1. The first hypothesis related to the equal impact of marketing-mix dimensions on

the rural and urban consumers. The results indicate that regarding product
(excepting packaging) and promotion, somewhat similar approach may be
followed, but with regard to price and place (distribution network/logistics)
different strategies need to be adopted.

2. The second hypothesis related to testing the existing approach of marketers

regarding penetration of FMCG in rural markets. This hypothesis has been
discussed with regard to the following parameters;
i) Consumer’s understanding of quality and brands.
ii) Retailers providing different products to rural consumers.
iii) Buying pattern of rural households.

By applying cross-tab the results received for these parameters proved that the
hypothesis was rejected, but on one parameter, i.e., consumer-oriented rural
marketing, it was found that the marketers approach is balanced. However, in the
overall analysis, this hypothesis was rejected; which means that marketers need to
revise their approach with regard to quality and brand and also in view of the buying
pattern of rural households.

247
3. The third hypothesis related to check whether the current marketing approach
strengthens the existing support-system of rural society? In order to test this
hypothesis four parameters were used;
i) Buying habits.
ii) Improvement in the life style.
iii) Replacement of traditional pattern of life.
iv) Becoming slaves of modern marketing.
This null hypothesis was accepted on all the four parameters, which goes to prove that
the existing pattern of rural marketing doesn’t support the indigenous support-system
of the rural society. This is a very important conclusion and the earlier researchers
have somehow ignored this aspect, because in the literature review no such examples
were found wherein this aspect was studied.

4. The fourth hypothesis was aimed at checking the status of FMCG for rural
households. It was studied with regard to four parameters, i.e.,
i) Essentially of FMCG for rural house holds;
ii) FMCG becoming a part of habit of rural consumers;
iii) Buying of FMCG takes place in the absence of local options, and

iv) Availability of FMCG at local shops.

In this case, the null hypothesis was accepted on three parameters, but it was
rejected on one parameter only, which related to the distribution part. It has
already been discussed that availability of products in the rural areas (distribution)
was found to be a problem element, say the people buy FMCG in the absence of
local products. Thus, it is proved that FMCG have become an essential part of
rural households.

Accordingly, the results of the study are;

i) a different approach is required with regard to marketing-mix for rural

marketing;

ii) the current approach of marketing is not effective with regard to penetration of
FMCG in rural markets of Uttarakhand;

iii) the current marketing practices negatively impact the indigenous support-system
of the rural society, and

248
iv) the FMCG, over the period of time, have become an essential part of the rural
households.

The above four are the major conclusions. But as a corollary to these, a large number
of minor conclusions have also been drawn in the study.

Though, the income and employment opportunities in Rural Uttarakhand have not
improved significantly, the survey indicates that disposable incomes have gone up
significantly. Property prices in rural areas, specially closure to town and cities have
shot-up unreasonably in the recent past. The quick and easy money generated by rural
folk has suddenly lead to an increase in demand of branded luxury products, including
FMCG. The potential for both durables and non-durables appears to be immense at
the moment. Whether or not this demand can be sustained, is yet to be seen. There is
another possibility that these adjoining rural areas may be encouraged by the rapidly
expanding towns and cities. It could be just a matter of time before these villages
become part of town or cities. NCR and Bangalore are the examples where villages
have become parts of cities. Similar results were found during the research that in the
nearby villages of Dehradun city, many villages are having the same amenities and
living-patterns as it exists for the people living in Dehradun. The villages, in the
outskirts of Rudrapur city also exhibited no difference between the urban and rural.
Though, there was a significant difference between the rural and urban people in the
district of Nainital.

Adopting the ‘New’ doesn’t necessarily mean rejecting or condemning the ‘Old’.
Development, in simple words, means improvement, refinement or betterment. The
lifestyles of the people in research area have improved significantly in the recent past.
Most of the respondents understudy appeared to justify it.

The researcher put in a lot of efforts to understand whether “happiness” may be a

criterion to evaluate growth and development. Informal discussions and observation,
in addition to being with them, provided valuable inputs to understand that happiness
may not be very much dependent on development and consumption of branded luxury
products. Some respondents argued that they were happier even without consuming
the kind of products that are available today. But, again, satisfaction is derived only
when aspirations are fulfilled. The urban consumers are the sensitive ‘aspirational
group’ for most of rural consumers. There is a very clear message for the marketer to

249
treat rural consumers as they treat the urban consumers, but it must be done truly in an
ethical manner.

SUGGESTIONS:

Though, in this chapter, suggestions have been dealt with the conclusion itself. But for
the sake of clarity, the research-based suggestions are reiterated below;

1. On the basis of the research, it can be suggested that the marketers must revise their
strategies related to pricing, quality, distribution-network, and promotional-strategies,
because education in rural areas is continuously increasing and the attitude of rural
consumers is almost similar to that of the urban consumer. If all the above-mentioned
aspects are jotted down individually, it can be said that;

i) The rural consumers are conscious about the quality and the brand so the marketers
can not afford to follow the old approach of treating rural consumers as ignorant.
Naturally, therefore, there should be no compromise in terms of quality of the
product.

ii) When it comes to price, it has been established through the research that the rural
consumers are very price-sensitive. Thus, to penetrate into the rural market, low
pricing strategy could be followed.

iii) Regarding the packaging, it needs to be emphasized, that it is one of the most
important aspects of rural marketing because the shopping habits and their routine of
income-earning doesn’t allow them large or economy packs. So, they prefer to go in
for the weekly, or monthly purchases of the FMCG (for other items of daily needs like
flour, edible-oil, spices etc., their shopping pattern is mostly daily).

iv) The distributions-logistics has emerged as the biggest issue, because;

a. Local distributors are not very reliable and the truth of the matter is that the local
distribution network from outside that too from distant locations is a costly affair.
It is, therefore, required that local distributors must be encouraged to participate.

b. If the product is not regularly available to the customer, loyalty can not be
achieved, and it is well known that to create a customer is a costly affair, than to
retain an existing customer.

250
c. It is, therefore, suggested that local distribution network must be developed on
PPP basis. The young un-employed men and women may be attracted to work in
PPP mode with the provider-companies.

v) The promotional policies required for the rural areas need to be re-looked at;
because rural people are educated, they have a good exposure to TV, Internet (even
through mobiles) and through their increased contact with urban life. Thus, on one
hand, some of the old tricks like display-vans, display in Haats, Bazars and Melas
may work, but celebrity-endorsement may not yield substantial results. It has to be
attempted with a lot of caution, because there are no blind takers for the endorsement
by players or film stars. It means regarding the promotional strategies only two crtical
mediums emerge, i.e., display of products, and logical advertisements through TV and
internet.

vi) It has been proved that the current approach of marketers is not balanced. It may,
therefore, be inferred that their approach in terms of 4Ps and 4As needs to be
revisited. In this case, some of the urban strategies may work, but some new strategies
need to devised, e.g., for promotion, the urban tricks may work; for quality of product,
again the urban tricks may work; but for packaging, for availability, and for
affordability etc., new policies need to be devised.

vii) While promoting their own products and increasing their profits, the marketing
companies must pause and re-think about their strategy of making everything
available in the rural areas. They need to respect the indigenous rural support-system.
One must refrain from selling drinking water, milk, or ghee, or even vegetables to
rural customers. In longer run, it will have the devastating effects, say if rural people
get dependent on the supplies and stop producing milk or vegetables, the prices of
these item will sky-rocket and no-one will eventually be spared. Even at present, the
impact of the destruction of indigenous support-system is clearly visible; say, prices
of vegetables and milk are increasing everyday and no Government is able to control
it. It is a clear case of disturbed relationship between the demand and the supply. The
market-mechanism can not be challenged or controlled through any restrictions, fair-
price shops or dual-pricing. All these experiments have failed even in the past. Even
subsidies, we all know by now, act as the injections of morphine only.

251
Exploration of this unique aspect (hitherto unexplored) is a major contribution of this
research, and as concerned citizens everyone must respect these findings because it is
likely to have a serious impact on our future.

viii) Consumerism, and truly speaking unbridled consumerism, is a sword cutting on

both the sides. Initially, it cuts the users but eventually the propagators of
consumerism also get damaged because they are also the components of the same
society. The impact of consumerism in the West has come to a stage, where people
are turning to Indian way of living. It is the established maxim that “the world has
enough for everybody’s need, but it doesn’t have enough for anybody’s greed”

ix) The MNCs dealing in FMCG and pushing their products in the Indian rural market
need to be regulated by regulatory authorities. For that matter, even the Indian
corporates need to be regulated, if the need arises. In FMCG, our indigenous products
and our capacity is much better and the MNCs may not provide anything extra to this
country; rather they will be gaining more than us. Thus, we must not allow our
exploitation by the MNCs operating in the area of FMCG. Everyone needs to read and
understand the ‘HIND SWARAJ’ by Mahatma Gandhi.

x) Ihe best strategy for rural marketers would be to devise new products according to
the specific needs of the rural areas, e.g., re-chargeable torches, solar lights, and the
other such products which make the rural life comfortable. These products will be
able to counter the problem of electricity supply and these will make the life easier
and comfortable. Thus, it is suggested that innovations in terms of products must be a
regular feature.

xi) The products developed for the rural areas must be sustainable. In other words the
marketers and the regulators need to work on ‘sustainable rural marketing.
Sustainable rural marketing refers to the marketing, which doesn’t believe in
creating undue needs, which is eco-friendly and based on the natural sources of
energy as well as the other indigenous sources’.

xii) Rural people do have every right to lead the life of comfort and to enjoy all the
modern items but this race must not cross the limit of penetration. A story may help to
substantiate the point; ‘a person was revolving his stick freely on the ‘Liberty Sqaure’
in London, but the other person objected to it. The person revolving the stick said, “it

252
is the ‘Liberty Square’, and I am at the liberty to do what I like”. The other person
quipped “your liberty ends, where the tip of my nose begins”. The moral of the story
is that the MNCs and the India Inc are at the liberty to push their products in to the
rural markets as well but, their liberty must end where the tip of our essential
indigenous support-system begins.

xiii) Increased CSR in the rural areas may bring-in rich dividends for the corporates.
So, they must learn to live with the rural life with a sense of empathy and not apathy.

xiv) Last, but never the least, while rural market is the huge un-tapped market, and it
must be tapped with healthy ethical and moral considerations by the MNCs as well as
the India Inc. Even the research agencies, and NGOs engaged in carrying out research
on rural market should not be only and only pro-marketers. They have an obligation
towards the rural society as well the rural consumers, and of course towards the future
of this country.

Scope for Further Research:

This research has shown some indications, which may be explored further by the
researchers. In this research, it has been proved that with regard to the 4Ps of
marketing or the 4As of rural marketing further exploration should ideally be done to
understand the true response of rural consumers.

Similarly, further researches may be done on the distributional aspects, rural

warehousing, rural and local distributors in the PPP-mode, and the other challenges of
logistics. Even during the Review of Literature for this research, it was found that,
distribution logistics is a major problem in rural marketing and it has been re-
confirmed through this research. Since it was a micro-aspect of this research, due
attention could not be given to this single aspect, which is the biggest challenge of
rural marketing. Thus, separate research efforts may be dedicated to study the
problem of distribution network.

The unique contribution of this research has been to fill-in the vacuum regarding
sustainability of rural marketing vis-à-vis the indigenous support-system of rural
areas. Even in the extensive Review of Literature, the researcher did not find any
research work paying attention to this particular aspect. On the other, this particular
aspect is going to decide the future of reckless marketing, reckless development and

253
reckless aping of the consumerist society of the West, or that of the urban areas of our
own country. This is a very interesting and a very useful aspect of further research.

Research must fundamentally serve some purpose, and a research not leading to some
useful purpose may lead to an academic degree but not the true contentment, either
for the researcher or for the academia. The researchers my either choose to become
the nuts and bolts in the money-churning machines of the marketers or they may
prefer to focus on the future life of rural India and its economic, social and cultural
continuity leading to self-pride and independence of sorts.

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lkSai nks mUgsa viuh NksVh&NksVh tehusa
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Thus, there is a lot of scope for further research as is evident from this dissertation.

254
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Prof. Dr.Pedhiwal G.L. , Prof. Arora Pankaj and Prof Dr. Vyas J.H., “Changing rural
market and sale of marketer”

Ramaswamy, V.S.”Effective Distribution in Rural Markets”, Unpublished paper

Rural growth story”, MART knowledge center, MART, March 12, 2012

Sadangi Amitabh (2004) “Integrating the Poor into Market Systems (IPMAS): a
Blueprint”; Academic Foundation, ed 1st , New Delhi : p 17-50

Sakkithivel, A.M. (2006). Designing Integrated Promotion Mechanism to Influence

Indian Rural Consumer Buying Behaviuor. Advertising Express, 36-42.

Sayulu and Reddy, 1998, ‘Socio Economic Influence of Rural Consumer Behavior’.

Sayulu, Hugar et.al. 2001, ‘Dynamics of Consumers Behaviour in Vegetables

Marketing in Dharwad City.

Sayulu, K., & Reddy Ramana , V.V. (1996). Socio-Economic Influences on Rural
Consumer Behaviour- An Empirical study. Management Researches, 3, 41-51.

264
Several Published Information on National Council of Applied Economic Research
(NCAER), India.

Singh Jagjit , ‘A study of Market Vendors in Rural Township Could More Assist
Rural Market Vendor?’ published in Pacific studies, Vol-19, 1996.

Singh Rakesh, Bhagat Kapil (2004), “Corporate Initiative in Indian Agriculture,”

Indian Mangement, Vol. 43, Issue 2(Feb), p72-79

Srivastava Deepti , ‘Marketing to Rural India, a Changing Paradigm

Thanulingham and Kochadai, 1989, Survey in Madurai District.

The ‘Bird of gold’; The Rise of Indian Consumer Market, Mckinsey Report,
Mckinsey Global Institute 2007

The Hindu - Business Line.

Tripathi Praveen , ‘Oppurtunites for FMCG Products in Rural Area’.

Vegneshwar Varmudy (22nd May 1992) “Rural Growth Hinges on Efficient

Marketing”, Financial Express, p.6

Websites

http://creativeworld9.blogspot.com/2011/03/abstract-on-ruralmarketing-in-india.html

http://vrittivaani.wordpress.com/2011/04/11/trends/

http://www.blonnet.com/2010/01/22/stories/2010012250661300.htm

http://www.chemexcil.gov.in/IndianScenario.aspx

http://www.ctfa.org/global-strategies/expanding-india%E2%80%99spersonal-care-
market

http://www.datamonitor.com/store/Product/india_personal_hygiene_personal_care_in
dustry_guide_2011?productid=0787E99D-9BBF-4CF1-81B2-
B56A0CFFE08B

http://www.greenworldinvestor.com/2011/04/04/fast-moving-consumergoods-fmcg-
manufacturers-in-india-defensive-with-growthcharacterizes-indias-non-
discretionary-consumer-stocks-fmcgcompaniesbrandsindustry

265
http://www.ibef.org/artdispview.aspx?in=78&art_id=30474&cat_id=938&page2

http://www.indianmirror.com/indian-industries/soap.html

http://www.oppapers.com/essays/Rural-Marketing-Of-Dabur/755694

http://www.rncos.com/Press_Releases/Indian-Hair-Care-Market-Shows-Enormous-
Growth-Prospects.htm

http://www.rncos.com/Report/IM192.htm

http://www.slideshare.net/rajeshaithal/rural-marketing-in-india-beyondtactics

http://www.thehindubusinessline.com/2010/01/25/stories/2010012553010400.htm

http://www.thehindubusinessline.com/industryandeconomy/marketing/article1684908
.ece

www.cmie.com/database/?service=database-products/state-analysis-
service/Uttarakhand.htm

www.coolavenues.com/know/mktg/

www.coolavenues.com/mba-journal/marketing/rural-marketingchallenges-
opportunities-strategies

www.domain-b.com.

www.financialexpress.com

www.icmrindia.org/casestudies/catalogue/Marketing/MKTG081.htm

www.indianmba.com/Faculty_Column/FC658/fc658.html

www.indiantelevision.com

www.indiaruralstat.com

www.indiastat.com

www.mapsofindia.com/uttarakhand/government/economy.html

www.ncear.org

www.ruralindia.nic.in

www.thehindubusinessline.com/nic/073/index.htm

266
SCHEDULES
 Schedule I (Rural Consumer)
Research Supervisor: Research Scholar:
Professor R. C. Mishra Rizwana Ansari
Director & Head
Uttarakhand Open University,
Haldwani, Uttarakhand

Dear Respondent,
This Schedule is a part of my research for Ph.D. programme. Kindly spare some time
to answer the following questions, with reference to Rural Marketing of FMCG
products. The information collected through this schedule, will be used only for the
above mentioned academic research and will be kept confidential.

Village:………………………Block:………………….District:………………………
Name: (Optional) ……………………………Gender ……………… Contact No…….

PART-I: PERSONAL PROFILE OF THE RESPONDENTS

Place a tick in appropriate:
1. Age Group (Yrs):
• Below 25
• 25 to 50
• 50 and above
2. Educational level
• School
• Gradate & Postgraduate
• Professional or Technical
3. Annual Income (Rs.)
• Below 2,00,000
• 2,00, 000- 5, 00,000
• 5,00,000 and above
4. Number of members in the family
• Earning Members
• Dependent Members
• Total

i
5. Sources of Income:
• Self employed in agriculture
• Self employed in non agricultural profession
• Agricultural Labor
• Other
i. Service (Government)
ii. Service (Non Government)
iii. Other (Specify)

PART-II

Place a tick in appropriate box:

6. In your knowledge, quality is associated with.
• Price i.e. higher price means quality
• Fulfillment of your expectation
• Brand or Company
• Other (Specify)

7. What is your choice while buying the following goods: State 1 for Branded and 2
for Unbranded?
• Soaps (Beauty & Bathing)
• Tooth paste & Powder
• Detergent and Cakes
• Biscuits & Confectionary
• Beauty care products
• Hair oil & Shampoo
• Tea, Coffee & Beverages
• Personal & Hygiene Products

ii
8. State your preferred brand or product name (at least two) in the following
categories of FMCGs?
FMCG Category Brand or Product name
Soaps (Beauty & Bathing)
Biscuits & Confectionary
Tooth paste & Powder
Personal care products
Tea, Coffee & Beverages
Detergent and Cakes
Hair oil & Shampoo
Personal & Hygiene products

9. What motivates you to buy aforesaid brands?

• By television ads
• By references
• By newspaper, magazines
• By checking availability of the product
• By recommendation of shopkeeper
• By Hoardings

10. Primary focus of your purchase decision of FMCG is on:

• Quality
• Low price
• Brand or Company
• Easy or nearby availability
• Other (Specify)

iii
 PART- III
You are required to rate the 5 alternatives in 5 points rating scale, as per significance
you attach with each where 1 presents least and 5 to most.
11. Rate the effectiveness of the following means of promotion
• Television, Radio & Internet
• Print Material, Hoardings & Banner
• Point of Purchase display
• Dealer & Retailers
• Mouth publicity & References

12. Pattern of your disposable income on family expenditure

• Daily need Products
• Agriculture
• Health & Care
• Education
• House Holds/Durables & Maintenance

13. The most convenient place to buy FMCG Products:

• Shop in Village
• Retail Shop in Near by Town
• Nearest Wholesale Market
• Fair Price Shop
• Other (Specify)

14. What is the frequency of your purchase in all categories: Tick the appropriate?
Frequency of Purchasing Mode of
FMCG Category Purchasing
Daily Weekly Monthly Cash Credit
Soaps (Beauty & Bathing)
Biscuits & Confectionary
Tooth paste & Powder
Personal care products
Tea, Coffee & Beverages
Detergent and Cakes
Hair oil & Shampoo
Personal & Hygiene
products

iv
 PART-IV
Rate the each statement in 1 to 5 scale where;
5-Very Satisfied, 4- Satisfied, 3- Indifferent, 2- Dissatisfied and 1- Very Dissatisfied.
5-Strongly Agree 4- Agree 3- Indifferent, 2- Somewhat agree 1- Strongly Disagree.

15. You are satisfied with the availability of the FMCG products/brands.

16. Modern Marketing has negatively affected the village pattern, traditions, and
customs.

17. Effectiveness of local language rural marketing.

18. Rural habitants are now used to FMCG products and these are essential for them.

19. Criteria for making ultimate purchase:

Word
Price/ Brand/ Celebrity/ Language/ Content/ Color/
FMCG Category Availability of
Disc. Company Endorsement Tagline Product Packing
Mouth
Soaps (Beauty
& Bathing)
Biscuits &
Confectionary
Tooth paste &
Powder
Personal care
products
Tea, Coffee &
Beverages
Detergent and
Cakes
Hair oil &
Shampoo
Personal &
Hygiene
products

v
 PART-V
Give 1 to your answer if it is, YES and 2, if it is NO.

20. Do you think modern day FMCG products are very essential for people living in
villages?

21. Is your favorite brand available in the local shops?

22. Would you consider buying another company’s products if your favorite brand is
not available?

23. Do you think that your life would be more difficult without the modern day
products?

24. Do you think that these products have put extra & unnecessary burden on your
budget?

25. Do you feel that level of happiness and life style has gone up after the introduction
of modern marketing>

26. Do you feel that modern marketing has made you its slave?

27. If you are supposed to be a retailer then what will be your primary activities? State
at least three.

• ………………………………………………………………………………………
………………………………………………………………………………………

28. State major problems faced by you in your daily need products and solution to it.

• …………………………………………………………………………………........
…………………………………………………………………………………........

Date: Signature:

vi
 Schedule II (Marketers /Intermediaries)
Research Supervisor: Research Scholar:
Professor R. C. Mishra Rizwana Ansari
Professor & Head
Uttarakhand Open University,
Haldwani, Uttarakhand

Dear Respondent,
This questionnaire is a part of this research for my Ph.D. programme. Kindly
spare some time to answer the following questions, with reference to Rural
Marketing of FMCG products. The information collected through this schedule,
will be used only for the above mentioned academic research and will be kept
confidential.

Village: …………………… Block: …………………. District: ……………………

Name: (Optional) …………………………Gender ………… Contact No……..……
1) Age of the respondents
2) Number of Assistants.
3) Income from profession (Annual)
• < 50,000
• 50,000- 2, 0 0,000
• 200,000 - 4, 00,000
• > 400,000
4. Nature of shop owned by you:
• Owned
• Rented
5. Shop type:
• Whole seller
• Dealer
• Retailer
• NGO
• SHG (Cooperative concern)
• Others (Specify)

i
 PART-II
Give 1 to your answer if it is, YES and 2, if it is NO.
Is buying habit of rural consumer is the same as that of urban
6
consumers?
Do you plan your marketing methods especially keeping the rural
7
population in mind?
Customized/ Modified or Rural Specific Products in terms of content,
8
packaging or color, are more preferred.
Do the customers expect that your outlet must have everything for
9
their daily needs?

10 Consumers do not prefer cheaper products?

11 Do you get timely delivery form the company, dealer or wholesaler?

Do you think that marketers are able to meet rural specific need, in the
12
same manner as they are supposed to?

13 Rural Consumers buy things only if they don’t have any local option.

PART –III

Please answer the questions given below in such a way where,

1- Very Satisfied, 2- Satisfied, 3- Indifferent, 4- Dissatisfied and 5- Very Dissatisfied.

or

1- Strongly Agree 2- Agree 3- Indifferent, 4- Somewhat agree 5- Strongly Disagree.

14 With the incentives and rewards given by the companies to sell their
products in your outlet.
15 Customer need and satisfaction are given priority over all the other
interests, relevance and profitability of the marketer.
16 Consumers are well aware and have knowledge about products and
brands

ii
 PART-IV

17. In General, what are your two largest selling brands in following categories of
FMCG:

PRODUCT BRAND PRODUCER

Soaps (Beauty & Bathing)
Tooth paste & Powder
Detergent and Cakes
Biscuits & Confectionary
Sanitary & Hygiene products
Hair oil & Shampoo
Personal care and cosmetics
Tea, Coffee & Beverages

18. Please state the growth of FMCG products in your locality:

• Very Fast
• Fast
• Steady
• Low

19. As per your opinion what is the primary focus of rural consumers in their daily
needs.
• On Quality
• On Price
• On Availability
• On Packaging
• On Brand or company
• On other (specify)

20. Rate the following aspects which present rural consumers’ attitude at 1 to 5 point
scale where 1 means the most and 5 represents the least:
They are price sensitive
They prefer frequent purchases
They have lack of awareness for the products
They prefer spurious products
They show urban consumer attitude

iii
21. Rate the following points, keeping in mind the importance of the factors, while
functioning for rural mass. Give 1 to most important and 5 to least important.
Profit earning
Customer retention
Market share or growth
Social responsibility
Any other (Specify)

22. Following are some marketing aspects desired by a company from its customers;
please rate these as per their significance in a way where 1 is for most important
and 5 is for least important.

Satisfaction
Trust & Loyalty
Commitment
Influence
Any other (Specify)

23. What is your primary objective while dealing with rural mass- give priority to
followings:

Customer retention & Loyalty

Competitive advantage
Increased market share and presence
Lower the cost
Any Other (Specify)

24. How does your customer ask for daily need products?
• By Brand name
• By Telling its uses
• By disclosing the need
• By Packaging
• By telling the celebrity name
25. If marketer’s approach is defective then what should be preventive approach?
Give priority.
• It should stop the activities which are causing in disturbances in rural
harmony.

iv
 • Local people must avoid the things which are harmful for rural society and
raise the voice.
• Marketer must provide the tailored products as per rural specific needs.

26. The main problems in selling to rural consumer are:, Assign priority 1- the most
5- the least:
• Small choices for single use
• Lack of awareness
• Dominance of spurious products or brands
• Weak distribution network
• Low sale

27. Describe your expectations from your customers

…………………………………………………………………………………………
…………………………………………………………………………………………

28. Describe your expectations from the marketer or the Company

…………………………………………………………………………………………
…………………………………………………………………………………………

Date: Signature:

v
ANNEXURES
 Block- Vikas Nagar, District- Dehradun
S.N Village Code NAME Status Total Male Female
1 044972 Ambadi Rural 2292 1225 1067
2 044971 Ambadi T K Jaungle Rural 95 46 49
3 N.A. T K Jungle Rural 0 0 0
4 044969 Dumet Rural 3774 2007 1767
5 N.A. Chiliya Rural 0 0 0
6 N.A. Baadwala Rural 0 0 0
7 044970 Enfield Jungle Rural 778 392 386
8 045110 Jeewangarh Rural 11870 6172 5698
9 044973 Mehuwala Khalsa Rural 3844 2006 1838
10 044974 Danda Jungle Rural 209 112 97
11 044985 Prithvipur Rural 430 236 194
12 044976 Prithvipur Jungle Rural 113 89 24
13 044984 Bahadur Garh Rural 117 66 51
14 044986 Khera Pachua Rural 1176 593 583
15 044983 Badamawala Rural 5054 2605 2449
16 044987 Jaaman Khata Rural 4158 2148 2010
17 044988 Jamnipur Rural 6126 3181 2945
18 044989 Atan Bagh Rural 3269 1710 1559
19 044994 Dhakrani Dehat Rural 12757 6644 6113
20 044990 Dhumipur Gagmewa Rural 123 66 57
21 044977 Bulaki Wala Rural 1866 965 901
22 044995 Mirzapur Dhalipur Rural 3218 1657 1561
23 045004 Langha Rural 1802 955 847
24 045005 Tauli Rural 1881 883 998
25 044997 Katapatthar Rural 702 365 337
26 044992 Fatehpur Rural 3221 1694 1527
27 045019 JassoWala Rural 2894 1524 1370
28 045011 Sorna Rural 2116 1083 1033
29 045007 Rudrpur Rural 2136 1145 991
30 N.A. Dhartawala Khalsa Rural 0 0 0
31 045008 Badwa Rural 1273 667 606
32 045009 Dhalani Rural 535 285 250
33 045010 Koti Rural 270 134 136
34 045015 Kedarawala Rural 2867 1462 1405
35 045016 Baluwala Rural 1492 767 725
36 045012 Horawala Rural 2050 1037 1013
37 045013 Chandpur Khurd Rural 183 87 96
38 045013 Chandpur Kalan Rural 227 117 110
39 045033 Sabhawala Rural 4872 2543 2329
40 045029 Majri Rural 2044 1071 973

i
41 045030 Jaatowala Rural 1639 845 794
42 045031 Tiparpur Rural 3226 1698 1528
43 045032 Peerwala Rural 230 126 104
44 045034 Kalyan Pur Rural 627 336 291
45 045035 Hasan Pur Rural 2000 1042 958
46 045028 Mednipur Badripur Rural 3803 2021 1782
47 045036 Sherpur Rural 3900 2043 1857
48 045037 Sheeshambada Rural 2989 1659 1330
49 045021 Dharmawala Rural 2232 1139 1093
50 045022 Shahpur Kalyan Pur Rural 2546 1329 1217
51 045020 Pratitpur Kalyan Pur Rural 1393 711 682
52 045025 Kunja Rural 2364 1222 1142
53 045026 Kulhaad Rural 2042 1033 1009
54 045023 Aanduwala Rural 2224 1164 1060
55 045017 Bairagiwala Rural 2357 1254 1103
56 045018 Lakhanwala Khas Rural 747 381 366
57 045996 Lakhanwala Newat Rural 1767 964 803
58 045027 Timli Rural 2725 1439 1286
59 045024 Kunja Grant Rural 2149 1110 1039
60 044082 Babu Garh Rural 3035 1614 1421
61 044979 Bheemawala Rural 2397 1252 1145
62 044991 Mandi Gagmewa Rural 198 104 94
63 044993 Betwali Mandi Rural 93 56 37
64 044980 Nawabgarh Rural 6747 3577 3170
65 044981 Rasoolpur Rural 7055 3615 3440
66 044978 Dakpatthar Rural 9897 5182 4715
67 045002 Bawandhar Rural 591 305 286
68 045000 Bhaler Rural 713 390 323
69 045001 Madarsu Rural 373 201 172
70 044998 Pashta Rural 625 344 281
71 044999 Papdiyan Rural 756 394 362
72 045003 Matogi Rural 389 212 177

ii
 Block- Rudrapur, District- Udham Singh Nagar

S.N Village Code NAME Status Total Male Female

1 01588200 Bagwala Rural 906 504 402
2 01588300 Kolaria Rural 1538 819 719
3 01588400 Bindu Khera Rural 2148 1103 1045
4 01588500 Mat Kota Rural 732 391 341
5 01588600 Chhatarpur Rural 967 513 454
6 01588700 Kalyanpur Rural 4124 2230 1894
7 01588800 Bhoora Rani Rural 2857 1490 1367
8 01588900 Danpur Rural 1115 592 523
9 01589000 Kolara Rural 950 503 447
10 01589100 Jagatpura Rural 1184 634 550
11 01589200 Lamara Rural 137 73 64
12 01589300 Simla Bahadur Rural 479 269 210
13 01589400 Rudrapur Rural 565 299 266
14 01589500 Rampura Rural 2658 1426 1232
15 01589600 Fajalpur Mahraula Rural 1201 633 568
16 01589700 Phoolbag Rural 3381 1862 1519
17 01589800 Fulsunga Rural 1036 542 494
18 01589900 Fulsungi Rural 462 237 225
19 01590000 Bigbara Rural 1432 755 677
20 01590100 Bhamraula Rural 1246 656 590
21 01590200 Malsi Rural 1447 747 700
22 01590300 Loharri Rural 652 356 296
23 01590400 Gangapur Patia Rural 1055 546 509
24 01590600 Pratappur Rural 559 286 273
25 01590700 Indarpur Rural 867 467 400
26 01590800 Anandpur Rural 687 382 305
27 01590900 Sripur Rural 139 77 62
28 01591000 Kanakpur Rural 738 401 337
29 01591100 Loharra Rural 279 150 129
30 01591200 Kotha Rural 539 282 257
31 01591300 Shimala Pistore Rural 1294 723 571
32 01591400 Rameswarpur Rural 1469 743 726
33 01591500 Maharajpur Rural 1431 767 664
34 01591600 Lalpur Rural 2334 1222 1112
35 01591700 Chukati Rural 1421 733 688
36 01591800 Deoria Rural 1239 680 559

iii
S.N Village Code NAME Status Total Male Female
37 01591900 Pandari Rural 682 350 332
38 01592000 Malsagirdharpur Rural 844 444 400
39 01592100 Khamaria Rural 785 415 370
40 01592200 Badaura Rural 497 272 225
41 01592300 Kuraiya Rural 2954 1580 1374
42 01592400 Saijani Rural 561 303 258
43 01592500 Rahpura Rural 159 88 71
44 01592600 Saijana Rural 1749 893 856
45 01592700 Darau Rural 3987 2089 1898
46 01592800 Chhinaki Rural 3443 1843 1600
47 01592900 Virunagala Rural 581 327 254
48 01593000 Jawahar Nagar Rural 1484 780 704
49 01593100 Khamia Block No2 Rural 2068 1037 1031
50 01593200 Khamia Block No1 Rural 1104 550 554
51 01593300 Turka Gori Rural 1168 622 546
52 01593400 Gadaria Bang Rural 527 286 241
53 01593500 Khamia Block No3 Rural 872 461 411
54 01593700 Khamia Block No4 Rural 1757 893 864
55 01593800 Noorpur Rural 140 80 60
56 01593900 Rajpura Rural 82 44 38
57 01594000 Bahara Boj Rural 10 9 1
58 01594100 Gauri Kala Rural 279 148 131
59 01594200 Bhoora Gauri Rural 134 74 60
60 01594300 Pantpura Rural 30 19 11
61 01594400 Kanman Rural 70 69 1
62 01594500 Laxmipur Rural 5 3 2
63 01594600 Gangoli Rural 185 95 90
64 01594700 Khurpia Rural 1180 647 533
65 01594800 Kishanpur Rural 647 354 293
66 01594900 Sirauli Kalan Rural 6731 3604 3127
67 01595000 Sonera Rural 1734 893 841
68 01595100 Pateri Rural 833 413 420
69 01595200 Dopaharia Rural 1307 728 579
70 01595300 Anjania Rural 349 195 154
71 01595400 Kot Kharra Rural 561 312 249
72 01595500 Gangapur Chamran Rural 127 69 58
73 01595600 Nazimabad Rural 3705 1977 1728

iv
S.N Village Code NAME Status Total Male Female
74 01595700 Rudrapur Sani Rural 341 186 155
75 01595800 Bakhpur Rural 1208 639 569
76 01595900 Katharra Rural 2045 1055 990
77 01596000 Dhadha Rural 101 63 38
78 01596100 Chachar Rural 310 181 129
79 01596200 Pipalia Rural 201 114 87
80 01596300 Bhanga Rural 2161 1176 985
81 01596400 Sirauli Khurd Rural 431 241 190
82 01596500 Sutuiya Rural 995 534 461
83 01596600 Gaughat Rural 137 77 60
84 01596800 Shahdaura Rural 3638 1940 1698
85 01596900 Firojpur Rural 2958 1575 1383
86 01597000 Baheri Rural 290 170 120
87 01597100 Ajitpur Rural 1581 817 764
88 01597200 Bara Rural 2916 1504 1412
89 01597300 Bari Rural 1818 942 876

v
 Block- Chinyali Saud, District- Uttarkashi
S.N Village Code NAME Status Total Male Female
1 040602 Ban Gaon Rural 1068 493 575
2 040603 Badli Rural 516 250 266
3 040604 Kawadha Rural 283 138 145
4 040605 Chhijula Rural 635 309 326
5 040606 Pujyar Gaon Rural 210 101 109
6 040607 Murogi Rural 328 159 169
7 040608 Kaprara Rural 357 175 182
8 040609 Kamda Rural 382 187 195
9 040610 Banot Palla Rural 142 64 78
10 040611 Tandola Rural 659 328 331
11 040612 Banota Walla Rural 42 25 17
12 040613 Mathali Rural 477 255 222
13 040614 Kyari Rural 267 135 132
14 040615 Jibya Rural 452 227 225
15 040616 Rikhar Gaon Rural 249 123 126
16 040617 Danda Gaon Rural 79 39 40
17 040618 Mangar Gaon Rural 93 43 50
18 040619 Sigar Gaon Rural 60 28 32
19 040620 Ramoli Rural 213 105 108
20 040621 Bagi Rural 104 52 52
21 040622 Badalda Rural 304 149 155
22 040623 Dargad Rural 124 54 70
23 040624 Suri Rural 250 128 122
24 040625 Tarakot Rural 513 250 263
25 040626 Khadara Rural 578 286 292
26 040627 Udkhola Rural 222 122 100
27 040628 Tipri Rural 607 316 291
28 040629 Dharkot Rural 1310 668 642
29 040630 Banari Rural 586 283 303
30 040631 Sira Rural 315 163 152
31 040632 Gadoli Rural 346 170 176
32 040633 Garat Rural 413 205 208
33 040634 Jokhoni Rural 614 310 304
34 040635 Jestwari Rural 1175 587 588
35 040636 Kandi Rural 194 99 95
36 040637 Kainthogi Rural 277 143 134
37 040638 Chiloth Rural 638 300 338
38 040639 Bamnati Rural 310 141 169
39 040640 Shrikot Rural 615 301 314
S.N Village Code NAME Status Total Male Female

vi
 40 040641 Kuthaldi Rural 296 151 145
41 040642 Dharasu Rural 157 79 78
42 040643 Morgi Rural 432 193 239
43 040644 Baret Rural 302 139 163
44 040645 Indra Gaon Rural 401 200 201
45 040646 Tipri Rural 467 224 243
46 040647 Matholi Rural 438 216 222
47 040648 Maugh Rural 183 98 85
48 040649 Badethi Rural 1110 568 542
49 040650 Kandla Rural 138 66 72
50 040651 Hidhara Rural 157 79 78
51 040652 Bhunyara Rural 217 118 99
52 040653 Dhanpur Rural 505 215 290
53 040654 Nagri Chhoti Rural 98 49 49
54 040655 Nagri Bari Rural 640 325 315
55 040656 Bagi Rural 296 150 146
56 040657 Kansi Rural 583 275 308
57 040658 Kot Rural 396 205 191
58 040659 Chinyali Rural 6430 3305 3125
59 040660 Mar Gaon Rural 519 266 253
60 040661 Chamiyari Rural 93 47 46
61 040662 Ular Rural 77 39 38
62 040663 Pipal Khanda Rural 219 100 119
63 040664 Gamari Rural 323 170 153
64 040665 Chand Pur Rural 58 30 28
65 040666 Rautal Rural 784 367 417
66 040667 Jaspur Rural 312 151 161
67 040668 Kotgari Rural 29 14 15
68 040669 Adni Rural 521 251 270
69 040670 Kot Rural 104 50 54
70 040671 Khand Rural 623 284 339
71 040672 Pujyar Gaon Rural 183 92 91
72 040673 Neri Rural 398 224 174
73 040674 Tulyara Rural 792 405 387
74 040675 Katkhan Rural 152 77 75
75 040676 Badsi Rural 415 184 231
76 040677 Gailari Rural 92 48 44
77 040678 Bharkot Rural 663 322 341
78 040679 Anol Rural 454 222 232
79 040680 Hadiyari Rural 192 98 94
80 040681 Badhar Gaon Rural 257 119 138
S.N Village Code NAME Status Total Male Female

vii
 81 040682 Malli Rural 387 184 203
82 040683 Bagori Rural 832 384 448
83 040684 Kawagadi Rural 594 257 337
84 040685 Kumrada Rural 1148 577 571
85 040687 Baldogi Rural 284 150 134
86 040688 Bankot Rural 526 223 303
87 040689 Jagar Gaon Rural 619 303 316
88 040690 Thati Dichli Rural 694 336 358
89 040691 Kyari Rural 331 150 181
90 040692 Bhengwal Gaon Rural 334 157 177
91 040693 Shreekot Rural 11 6 5
92 040694 Sarph Rural 295 141 154
93 040695 Khalsi Rural 1731 803 928
94 040696 Jogat Malla Rural 972 470 502
95 040697 Jogat Bichlla Rural 388 195 193
96 040698 Jogat Talla Rural 1006 457 549
97 040699 Gadwalgad Rural 1172 538 634
98 040700 Barol Rural 343 158 185
99 040701 Mani Chhoti Rural 485 207 278
100 040702 Bhald Gaon Rural 239 116 123
101 040703 Mani Bari Rural 334 150 184
102 040704 F-1 (P-1) Rural 27 17 10
103 040706 Dharasu Range (P-2) Rural 56 38 18
104 040707 Dharasu Range (P-3) Rural 579 300 279

viii
 Block- Bhimtal, District- Nainital
S.N Village Code NAME Status Total Male Female
1 01469300 Sonkhmari Rural 76 40 36
2 01469500 Aghora Rural 713 368 345
3 01469600 Abbaltani Rural 44 26 18
4 01469700 Raukher Rural 170 86 84
5 01469800 Faguniakhet Rural 88 48 40
6 01469900 Jalal Gaon Rural 241 129 112
7 01470000 Faguniakhet Gwal Bagoon Rural 133 59 74
8 01470100 Bajoon Rural 307 156 151
9 01470200 Kurpankha Rural 1413 724 689
10 01470400 Gahlna Rural 310 161 149
11 01470500 Bhela Rural 96 49 47
12 01470600 Mangoli Rural 486 255 231
13 01470700 Khamari Rural 392 202 190
14 01470800 Thapla Rural 412 220 192
15 01471000 Nalni Rural 234 124 110
16 01471100 Ling Lagga Mangoli Rural 20 10 10
17 01471200 Kanal Gaon Rural 153 69 84
18 01471300 Ghatgar Rural 114 58 56
19 01471400 Thapliya Ganja Rural 89 48 41
20 01471500 Moti Bang Rural 17 8 9
21 01471600 Devidhura Rural 817 411 406
22 01471700 Beluwakhan Rural 3955 2019 1936
23 01471800 Jeoli Rural 300 155 145
24 01471900 Chopra Rural 1103 582 521
25 01472100 Lvechusani Rural 140 75 65
26 01472300 Bohra Gaon Rural 91 48 43
27 01472400 Naisela Rural 265 136 129
28 01472500 Bel Rural 285 146 139
29 01472600 Anrori Rural 32 19 13
30 01472700 Bhawanipur Rural 349 242 107
31 01472800 Kuriya Gaon Rural 2067 1057 1010
32 01473000 Gethiya Rural 1408 759 649
33 01473100 Vargoment Rural 123 68 55
34 01473200 Dagal Saital Rural 73 45 28
35 01473300 Sariatal Rural 298 156 142
36 01473400 Jeolikote Rural 876 383 493
37 01473500 Maluti Rural 463 224 239
38 01473600 Kalahpeera Rural 538 285 253
S.N Village Code NAME Status Total Male Female

ix
 39 01473700 Lvesaal Rural 774 402 372
40 01473800 Nagri Gaon Rural 1339 671 668
41 01473900 Bhagtpura Rural 216 117 99
42 01474000 Mahargaon Rural 1812 961 851
43 01474100 Hairiya Gaon Rural 481 247 234
44 01474300 Baheri Gaon Rural 516 263 253
45 01474500 Gair Banelia Rural 49 27 22
46 01474700 Saun Gaon Rural 406 206 200
47 01474800 Alchaunaa Rural 1539 784 755
48 01474900 Chakseruwa Rural 54 30 24
49 01475000 Sagurigaon Rural 386 194 192
50 01475100 Aanu Rural 5 3 2
51 01475200 Bharatpur Rural 114 70 44
52 01475300 Joonstate Rural 446 228 218
53 01475500 Jantuwal Gaon Rural 950 513 437
54 01475600 Harinagar Chanddeva Rural 238 136 102
55 01475700 Salri Rural 488 248 240
56 01475800 Dungsilrawat Rural 88 46 42
57 01475900 Pandeygaon Rural 1281 657 624
58 01476000 Vijraula Rural 263 142 121
59 01476100 Thaplia Mahara Gaon Rural 420 220 200
60 01476200 Naula Rural 232 116 116
61 01476300 Maluatal Rural 436 210 226
62 01476500 Jangalia Gaon Ganja Rural 993 522 471
63 01476600 Harnagar Jangalia Gaon Rural 300 164 136
64 01476700 Bohragaon Rural 273 140 133
65 01476800 Saikhola Rural 73 40 33
66 01476900 Dungsil Malla Rural 73 38 35
67 01477000 Dungsil Shah Rural 53 27 26
68 01477100 Dungsil Talla Rural 384 195 189
69 01477200 Siloti Pandey Rural 79 41 38
70 01477300 Siloti Pant Rural 258 141 117
71 01477400 Chanoti Rural 193 95 98
72 01477500 Khairaulapant Rural 210 101 109
73 01477600 Kheraula Pandey Rural 251 122 129
74 01477700 Kharki Rural 131 70 61
75 01477800 Purani Haat Rural 133 67 66
76 01477900 Duhra Rural 161 79 82
77 01478000 Amiya Rural 535 282 253
S.N Village Code NAME Status Total Male Female

x
 78 01478100 Dolmar Rural 239 124 115
79 01478200 Dogra Rural 379 194 185
80 01478300 Suriyagaon Rural 754 402 352
81 01478500 Amritpur Rural 1922 1019 903
82 01478700 Ranibagh Rural 1918 989 929
83 01478800 Balueti Rural 39 21 18
84 01478900 Hairi Rural 132 74 58
85 01479100 Bhadueni Rural 174 96 78
86 01479200 Pasauli Rural 488 259 229
87 01479300 Rausil Rural 952 493 459
88 01479400 Gumalgaon Rural 189 104 85
89 01479600 Paniya Mahtar Rural 239 117 122
90 01479700 Paniya Bor Rural 112 57 55
91 01479800 Khamari Rural 100 50 50
92 01479900 Ganrar Rural 46 24 22
93 01480000 Okhal Dunga Rural 350 178 172
94 01480100 Dungsira Rural 21 11 10
95 01480200 Tilwari Rural 266 135 131
96 01480300 Murkariya Rural 619 335 284
97 01480400 Gagar Rural 185 96 89
98 01480500 Baniya Rural 95 47 48
99 01480600 Baret Talla Rural 133 73 60
100 01480700 Sirori Rural 96 48 48
101 01480800 Dida Rural 42 24 18
102 01480900 Baret Malla Rural 157 79 78
103 01481000 Mursele Rural 75 36 39
104 01481100 Suera Rural 302 145 157
105 01486000 Pinshela Rural 212 117 95
106 01486500 Pinrao Rural 678 368 310
107 01486600 Bhauvasa Rural 580 301 279
108 01486800 Pashtola Rural 350 177 173
109 01486900 Uduwa Rural 331 175 156
110 01485900 Banana Rural 1002 532 470

xi
Administrative Division of Uttarakhand Samiti

Centre of Krishi Utpadan Mandi Samiti

RURAL UTTARAKHAND- RETAIL OUTLETS
RURAL UTTARAKHAND- VILLAGES