Research Methodology

Chapter -V

Research Methodology

5.1 Introduction.

5.2 Statement of Problem.

5.3 Significance of Study.

5.4 Research Design.

5.5 Sample Design, Size and Selection.

5.5.1 Universe.
5.5.2 Target Area.
5.5.3 Sampling Area.
5.5.4 Sampling Unit.
5.5.5 Sampling Method.
5.5.6 Size of Sample.
5.6 Pilot Study.

5.7 Respondents Population.

5.8 Procedure.

5.9 Data Collection.

5.10 Data Analysis.

5.10.1 Test for Normality.

5.10.2 Test for Reliability and Validity.
5.10.3 Statistical Tools.
5.10.4 Hypothesis Testing.
5.10.5 Model Specification.
5.11 Limitations of the Study.
5.12 Scope of the Study.

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Chapter -V

______________________Research Methodology _______________

5.1 Introduction:
The attractive and untapped rural market is plagued with low per capita
disposable incomes, large number of daily wage earners and dependence on
monsoon, seasonal consumption, poor road communication, power problems
and inaccessibility to conventional advertising Media. India’s 627,000 villages
are spread over 3.2 million sq. km. Approximately 110 million Indians live in
rural areas, and reaching them is not easy, especially given the poor road
infrastructure. Hence, operations costs increase and sometimes it is even
higher than that in urban markets. Therefore, companies are finding it
increasingly difficult to protect their margins. Companies need effective
marketing strategies in order to tape the rural market. This study was
expioratory-cum-descriptive in nature mainly depended upon the primary
source of information, which was collected with the help of structured
questionnaire. The main objective of this study was to compare rural
marketing strategies of ITC and HUL in terms of consumer appreciation. The
questionnaire was prepared by taking the feedback from villagers and
company's officials in Indore district, during the pilot study. The major
purpose of this research was to find out the different opportunities that the
rural market has in store for different kinds of producers and at the same time
to identify the various challenges the marketers face while promoting their
products in the rural areas. To analyze the different issues as per the objectives
of the research, following methodology has been adopted.

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5.2 Statement of Problem:

Marketing strategy that has worked well in traditional markets, may not be
acceptable to rural consumers if the product functionality is not in line with
their unmet needs. India is home to people speaking several languages and
dialects. Further, the cultural heterogeneity makes it difficult for marketers to
create awareness among rural consumers. FMCG products are substantially
used to enhance and protect the health and physical appearance and also the
dignity of the people among their counterparts. The spending on FMCG
products especially in the rural areas is showing an increasing tendency in the
last five years. This is due to increase in income levels, fascination towards
urban culture, good connectivity to near- by towns & cities, improvement in
sanitary conditions, beauty awareness among teenagers of rural areas
emulating their counterparts in the urban areas led to the increased usage of
FMCG products particularly beauty & health care products in this region.
With this backdrop marketing strategies of FMCG companies like ITC and
HUL in rural areas with reference to FMCG products is thought of.

The study is confined only to villages of Indore district. It is believed that the
findings in these villages are fairly representative of the other parts of the
district and the life style and other parameters were not much different from
what exist in the area of survey. There has been a new buying pattern among
the rural consumer for FMCG products in all price categories in Indore district
for the last five years because of rising price of land and new business
opportunities.

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5.3 Significance of Study:

Any business enterprise has only two basic function; marketing and
innovation (Peter Drucker, the practice of management, 1954). The central
role of marketing in the enteiprise stems from tae fact that marketing is the
process via which a firm creates value for its chosen customer. Value is
created by meeting customer needs. Thus, firm needs to define itself not by
the product it sells, but by the customer benefit provided. The beneficiary
from the study of this topic would be first of all researcher, academicians, and
related managers and prospects researchers. If these parties refer this research
study in future may take advantage of the finding and suggestions.
Academician, practicing managers and research students may take benefits for
academic purpose and on the jobs. The FMCG companies may implement the
suggestions for improvement of sales for achieving sales targets. It can be said
the benefits would be multidimensional for above mentioned parties.

5.4 Research Design:

The study is combination of descriptive and exploratory in nature. The
researcher made an attempt to describe the various concepts of rural
marketing, distribution channel, pricing, promotional strategies. The study
needed more theoretical and fundamental analysis on existing rural marketing
practices. The current study, on one hand, considered many issues related to
marketing strategies of ITC and HUL in Indore district, which required
exploration of ideas and flexibility of research design but on the other hand, it
required accurate description of association of some variables. Hence the
study was exploratory-cum-descriptive in nature.
On the basis of above researcher has administered the following tools of
collecting data:
(a) Focus Group Study
(b) Questionnaire

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As far as sampling technique is concerned, researcher has adapted

Convenience sampling for collection of Primary Data.

5.5 Sample Design, Size and Selection:

Multistage sampling (stratified) was employed to select the samples. Sampling
has been done in two stages and each stage is described in detail. The study
area covered 49 villages from three (Depalpur, Indore and Mhow) selected
tehsils of Indore districts in Madhya Pradesh.

Stage 1:
The first stage of sampling was of selec:ion of the villages for carrying out the
study. Villages of study district present are given below. (Table - 5.1).

(Table 5.1 Details of Villages in Indore District)

Tehsils/ Taluk in Indore District Villages Percentage

Depalpur 149 22
Sanwer 128 19
Indore 161 24
Mhow 177 26
Hatod 62 9
Total 677 100
(Source: As per the survey of Department of Planning & Statistics
District Indore and Census of India, 2011)

At this stage, through proportionate sampling based on the number of villages

in the tehsil of Indore district, three tehsils were selected, namely Indore tehsil
(accommodating 24 percent of the villages in the Indore district), Mhow tesil
(26 percent) and Depalpur tehsil (22 percent). These three tehsils represent 72
percent of the villages in the Indore district.

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Stage 2:
The next step in the sampling design was to select the villages from the tehsils
of the study district based on the proportion of villages in each tehsils (Table -
5.2).

Table 5.2: Sampling Plan of Number of Villages from each Tehsils

Tehsils/ Taluk in Villages Sample villages (10%
Indore District sample)
Depalpur 149 15
Indore 161 16
Mhow 177 18

Total 487 49
(Source: As per the survey of Department of Planning & Statistics
District Indore and Census of India, 2011)

From the tehsils of, 10 per cent of the villages were selected for the study.
Villages and the sample selection have been summarized in (Table-5.3).
Finally, a total sample of 49 villages was selected for the study.

Table 5.3: Demographic indicators of rural families and selection of

respondents from the selected villages
Tehsils/ Villages Sample No of rural Sample Final
Taluk in villages Households (10%) Sample
Indore (10%
District sample)
Depalpur 149 15 2953 295.3 295

Indore 161 16 7041 704.1 704

Mhow 177 18 6373 637.3 637

Total 487 49 16367 1636.7 1636
(Source: As per the survey of Department of Planning & Statistics
District Indore and Census of India, 2011)

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From the villages so selected, 10 percent of the households were selected for
the study. Villages and the sample selection has been summarized in (Table-
5.3). Finally a total sample of 1,636 respondent households was selected for
the study.

5.5.1 Universe: The sample of study comprises of individuals, having stake

in the HUL and 1TC. When the population is of such a large size
consideration of time and cost almost invariably leads to the selection of
respondents i.e. selection of items. The selected respondents have
represented of total population.

5.5.2 Target Area: Villages in Indore District.

5.5.3 Sampling Area: The respondents were selected from the authorized
managers, sales executives and dealers/retailers list of Indore district of both
the companies from their websites or by internal source. The respondents
were also selected from the selected villages of the Indore district.

5.5.4 Sampling Unit: The unit of analysis was the chief executive
officer/managing director or marketing/sales executives of the companies,
distributors/retailers and customers situated in rural area of Indore district.

5.5.5 Sampling Method: The stratified random sampling method was used.

5.5.6 Size of Sample: A survey method was used to collect the data required
to carry out the research efficiently and effectively. This survey was based on
samples of over 2000 respondents in Indore district including distributors,
retailers, villagers and company' officials and executives. A study of this type

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may be useful for both the companies and the companies engaged in FMCG
for developing future marketing strategies for rural areas.

5.6 Pilot Study: To ensure that questionnaire was administered well and
results was correct, a pilot study was earned out by administering to 10
management faculties, 20 literary villagers and 2 managers of FMCG
companies that gave us direction to modify the questions and explanations of
technical words.

5.7 Procedure: Physically filling up of questionnaire, in person, mail survey,

Interview and Internet (negligible response, only two respondent sent e-mails
out of 100 contacts). Majority of them were got filled and collected personally
from the villagers of Indore district, to ensure authenticity and correctness.

5.8 Data Collection: The primary data was collected through the use of a
structured questionnaire. The questionnaire was reviewed by ten people and
changes suggested by them are incorporated in the questionnaire. In order to
collect the information, the two person at the level of chief executive
officer/managing director or marketing/sales manager, 50 executives and 200
distributors/retailers of both the companies and 2,000 villagers from the
Indore district were targeted. The secondary data was also collected from
various sources like published articles, research papers, business magazines,
journals, periodicals and Internet.

5.9 Respondents Population: Total targeted population was 2.000 (response

sheets received 1,796 and selected 1,650 on judgment basis), as 146 of them
were found incomplete or facts appeared to be tilled up casually with
irrelevant information, hence not considered.

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5.10 Data Analysis: The collected data has been transcribed in tables and
further analyzed with the help of a wide range of appropriate statistical
technique such as: Mean. Standard Deviation, correlation and coefficient of
variance. The data was analyzed using suitable parametric statistical technique
of tabulation, graphs, Chi- Square test were used to analyze the data and
hypothesis testing. Later on, Kaiser-Meyer-OIkin and Bartlett's tests were
conducted to test sample adequacy and sphericity of collected data. To
diagnose the problem of multi-co linearity degree of correlation has been
estimated. As the results have shown problem of co-linearity, factor analysis
has been done as a tool of dimension reduction. The results have further been
analyzed through t-test to compare the marketing strategies of ITC and HUL.
The data was analyzed using suitable statistical technique and tabulated to
analyze the data and hypothesis testing. This choice of methodology and
stance was also influenced by a view that there were gaps in the literature. The
current marketing strategy literature also often fails to examine what rural
people actually wanted and what their expectations towards the FMCG
companies were?

5.10.1 Test for Normality: Among the most important statistical tests
necessary before conducting parametric tests is to confirm the normality tests
of the data employed in the study. In view of this, the result of the normality
test established that the data have normal distribution. The test was conducted
using skewness and kurtosis measurement. A value between +/-2.0 for both
skewness and kurtosis is acceptable for showing normality of data (George,
et.al., 2011). In both the cases, values fall within the acceptable range of +/-
2.0. The values of standard error for kurtosis (.112) and skewness (.061) found
significantly small, which were indicating greater stability of data. It is thus
concluded that the data is symmetric because the skewness and kurtosis values
are both less than -/2.0 for all the dimensional constructs of the study. Hence,

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the data for this study is normally distributed Skewness and Kurtosis as the
measures of deviation from normality were calculated.

5.10.2 Test for Reliability and Validity: Again, it was of importance to state
that the data for this study also satisfied the reliability test, which is highly
necessary for the findings of any research of this nature to be valid and
reliable. In view of this, the Cronbactfis Alpha value of .743 was attained.
However, Pallant (2007) noted that alpha values of .7 above are considered
acceptable while values of .8 above are preferable to demonstrate a high level
of internal consistency in the data. Therefore, in order to enhance the
reliability test, item 36 was deleted. Thus, a new Cronbach’s alpha value of
.804 was achieved as shown in (Table-5.4). This is considered a good alpha
value according to George and Mallery (2006) because it gave the study
more validity in its findings. In view of the fact that the data for this study
satisfied the reliability tests, parametric tests and non-parametric tests applied
for the testing of the hypotheses. The table below presents the details of the
reliability test. Same procedure was adopted for other part of the
questionnaire.

Table -5.4: Reliability Statistics for Manager’s and Sales Executives for
HUL

Cronbach's Alpha Based

Cronbach's Alpha on Standardized Items No. of Items

.804 .816 43

(Source: Researcher’s Computation)

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Table - 5.5: Reliability Statistics for Manager’s and Sales Executives for
ITC

Cronbach's Alpha Based

Cronbach's Alpha on Standardized Items No. of Items

.816 .841 43

(Source: Researcher’s Computation)

Table - 5.6: Reliability Statistics for Customers Responses on Marketing

Mix

Cronbach's Alpha Based

Cronbach's Alpha on Standardized Items No. of Items

.765 .787 19

(Source: Researcher’s Computation)

5.10.3 Statistical Tools: Following statistical tools are used for analyzing the
data:

1. Mean: Mean of given set of observations is their sum divided by the

number of observations.
2. Standard Deviation: Standard deviation is defined as the positive

square root of the arithmetic mean of the squares of the deviations of

the given observations from their arithmetic mean.

5.10.4 Hypothesis Testing: For testing the hypothesis, the following tools

were used:
1. Chi-square Test: Chi-square is a statistical test commonly used to

compare observed data with data we would expect to obtain according

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to a specific hypothesis. It is used to determine whether there is a

significant difference between the expected frequencies and the
observed frequencies in one or more categories.
2. T-test: A t-test is any statistical hypothesis test in which the test
statistic follows a Student's t distribution if the null hypothesis is
supported. It can be used to determine two sets of data are significantly
different from each othbr, and is most commonly applied when the test
statistic would follow a normal distribution.

5.10.5 Model Specification: To analyze the data collected as per the

objectives of the research, the following methodology has been applied:
1. The comparison of marketing strategies of ITC and HUL in Indore
district is done by using t-test.
2. To study the factor affecting the satisfaction level on various marketing
mix adopted by ITC and HUL in the study district is done by using
factors analysis and test of significance is done by Chi-Square test.
3. To work out the growing challenges and opportunities for ITC and HUL
in the study district, extensive literature review is done and results are
based on it.
4. To study and suggest the best effective strategies for the rural market
on the basis of results and discussions.
5. SPSS 17V was used for factor analysis. To find out standard deviation
and other relevant data analysis and standardized statistical tools were
applied.

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5.11 Limitations of the Study: The following are limitation of study:

1. The sample is selected conveniently and in single phase so as the
perception is influenced by time in which data was collected and the
context in which the respondents were at the time of data collection.
2. The primary data and observational methods of research has its owm
limitations and based on respondent the study is limited to selected
villages of Indore District.
3. The study is limited to selected fmcg companies and selected villages
of the Indore district and there for the findings cannot be generalize to
whole industries.
4. There are many other approaches to study on marketing strategy of
fmcg sector; there is no unanimous opinion among the experts. So the
researcher has taken appropriate approaches, which might be suitable
for the study.
5. The availability of the time and limited knowledge of researcher in the
area is also to be considered.

5.12 Scope of the Study: This study is relating to marketing-mix elements. It

has cover 4p’s of marketing, the concept of marketing strategy, marketing
element, marketing mix, marketing communication mix, various marketing
tools and techniques used by ITC and HUL in rural area of Indore district. It
has also discussed the consumer's perception about the marketing strategies of
ITC and HUL in rural area of Indore district. Leading companies have been
selected on the basis of their market share for the research study and their
comparative study has been carried out.

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