Rural India.. .

GROUP MEMBERS

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1 2 3 4 5 6

NAMES
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ROLL NO.
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INDEX
SR NO.
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.

TOPICS
Objectives of our project Introduction of rural market Competition in rural market Profile of rural market & consumer Market segmentation FMCG industry Our market study Why shampoo?? & Consumer buying behaviour Product launch 4 Ps of our product Unique Selling Proposition Our logo , print advertisement & Story Board Our tag line and distribution strategy Marketing strategies Conclusion

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1 2 3 4-6 7-8 9-11 12-13 14-16 17 18-29 30 31-33 34 35 36

Objectives of our project

To understand Indian rural dynamics and Indian rural consumer behaviors. To provide a back drop of the Indian Shampoo Market in the rural context. To highlight the successful strategy that our product will employ in the rural market.

Introduction of Rural Market:

Indias vast rural market offers a huge potential for a marketer facing stiff competition in the urban markets. The rural market environment is very different from the familiar surroundings of the urban market. Rural consumers have customs and behaviors that the marketers may find difficult to contend with. The opportunities in the rural market are demonstrated by comparing consumption levels in urban and rural market for different product categories. Their volumes and growth show the importance of the market. Understanding demographic profile of consumers and their response to brand offering is a useful approach to analyses the rural market. The use of an existing network of channels in the rural market is the key to connecting with the rural heartland. Haats and melas that are unique to rural markets, supplement the retailer route to the rural market. The interactions between consumers and these unique institutions provide information for use in marketing decision.

ompetition in Rural Market:

Competition in rural markets is varied in nature and a marketer faces competition not only from other brands but also from substitutes, especially in places where the product is new to the consumer. Such situations are quite common in rural markets. Competition for existing brands can be from other brands, from new players small unorganized sectors, duplicates and imitation. The task for a new player entering in the market is difficult given the advantage that entrenched brands have in rural markets. Entry strategy for a new player, the entry of a new brand in the rural market is a difficult proposition. This is because in rural markets the pioneer creates a lasting impression and loyalty to such brands is higher. In the case of the organization entering in the rural market for the first time the sheer size of the market in geographic terms poses a formidable challenge in accessing retailers. Entry strategy in such situation includes, Efforts to create shelf space for the product to establish a symbiotic relationship with an existing marketer. Consumer pull creates a space for the brand on the retail shelf that is difficult to replace. In such a situation competitive efforts that rely on positioning alone are unlikely to create a sufficient impact.

Profile / Features of Rural Markets:

1 Large and scattered market: The rural market of India is very large and scattered, in the sense that it consists of over 63 crore consumers from 5, 76,000 villages spread throughout the country. 2 Major income from agriculture: Nearly 60% of the rural income is from agriculture. Hence rural prosperity is tied with agricultural prosperity. During the harvest season, the demand for consumer goods in the village goes up. The size of the rural population securing income from the non-agricultural sector is now increasing with the advent of rural development programmes. 3 Low standard of living: The consumers in the village areas do have a low standard of living because of low literacy, low per capita income, social backwardness, etc. 4 Traditional outlook: The rural consumer values old customs and traditions. A change is beginning to take place in their outlook because of growth in literacy rate and mass media in the rural areas. 5 Diverse socio-economic background: Due to this large and scattered rural population, there is great diversity in the socio-economic background as this differs in every part

of the country. This brings diversity among rural customers and market.

Changing demand pattern: The demand pattern of the rural consumers is fast changing.

There is a new and growing demand for toiletries, ready-made garment, cosmetics, packaged foodstuffs, etc. This change is due to the increase in the rural income. 7 Infrastructure facilities: The infrastructure facilities like roads, warehouses,

communication systems, financial facilities are inadequate in rural areas. Hence physical distribution becomes costly due to inadequate facilities. 8 Saving habits: The saving habit of the rural consumer is increasing in the recent years as a result of the efforts put by co-operative and commercial banks.

Profile of Rural Consumer:

1. Low literacy level:

It is estimated that the literacy level in rural India is 45% as compared to 52%for the entire country. The rural literacy in the rural areas on an increase. Due to this the hoardings and print media cannot make a significant impact. The literacy rate has its implication in communication with the rural population. 2. Rural income:

An analysis of the rural income pattern reveals that nearly 60% of the rural income is from agriculture. A large part of the income is spent on meeting the basic needs of life i.e. food, clothing, and shelter leaving a smaller portion for other consumer goods. 3. Rural savings

The commercial banks and the cooperatives have been marketing the saving habit in the rural areas. Today nearly 70% of the rural households are saving a part of their income. 4. Occupation:

In rural areas the main occupation is farming, trading, craft and the other odd jobs like plumbing, electrical work, carpentry etc. The consumption pattern differs according to the level of income. 5. Brand loyalist:

It is not easy to introduce new products for them. They are bigger brand loyalists than their counterparts. 6. Inter-personal communication:

Inter personal communication accounts for 805 of the rural communication process in the villages. This means that word of mouth recommendations by users and sheer familiarity influences rural folk in their purchase decisions.

Market Segmentation in Rural Markets:

Rural market is not a homogeneous market and therefore cannot be served with the same product-price-promotion combination. The marketers have to carry out a thorough and data based market segmentation, select the relevant segment as their target market and develop appropriate marketing-mix and positioning strategies and for the chosen market segment. A company can segment rural markets by using several bases. Some of them are: Geographic segmentation Demographic segmentation Psychographic segmentation Buyer behavioral segmentation.

Among these the Geographic and Demographic segmentations are the important ones. Geographic segmentation: 1. Climate: Regions endowed with favorable climate are usually more prosperous. 2. Irrigation level: Irrigated areas and dry land areas pose different marketing environment 3. Level of agricultural advancement:

In this approach different parameters like adoption level of high yielding varieties, level of fertilizer use and standards of agricultural practices will have to be considered. 4. Nearness to the feeder Town: Studies have also revealed that rural consumers who are located near a feeder town are different from those living in remote areas in terms of exposure and buying habits.

Demographic segmentation: 1. Population: The rural market can be segmented on the basis of different size classes with respect population. 2. Age: Surveys have revealed that the younger generation dominates the purchases in the rural market. This is due to the literacy and changing values and life-styles. 3. Literacy: Though rural India in general is characterized by low literacy there are wide variations in literacy within rural India. 4. Income: Since the income distribution in the rural market is quite uneven the income base can be a useful base for segmenting the rural market. Our market segment is demographic segment Target audience: lower middle class semi-rural females age group of 16 plus

Rural Markets: The Next Frontier for FMCG Companies Introduction:

After years of growth derived primarily from the urban markets, the FMCG companies have now realized that India lies in its rural villages. So much so that rural marketing has become the latest marketing mantra of most FMCG majors. With extensive competition not only from MNCs but also from the numerous regional players and the lure of an untapped market has driven the marketers to chalk out bold new strategies for targeting the rural consumer in a big way.

After all these years with wide arrays of consumer insights at hand for the urban market, why is this urge of FMCG companies to enter the uncharted territory of rural India. To begin with it all about the sheer size of the market, and yes size does matter when it come to FMCG products. Over 70% of Indias 1 billion plus population lives in around 627,000 villages in rural areas. This simply shows the great potentiality rural India has to bring the much-needed volumes and help the FMCG companies to bank upon the Volumedriven growth. Also, the rural market has been growing steadily over the years and is now bigger than the urban market for FMCGs (53% share of the total market) with an annual size in value terms currently estimated at around 50,000 crores. According to one study, if the rural income in India goes up by 1%, there would be a corresponding increase of about Rs. 10,000 crores in the buying power. On the other hand, the urban sector has shown little signs of growth in the last 12 months. It is a definite boon in disguise for the FMCG majors who have already reached the plateau of their business curve in urban India and are desperately seeking new ways to increase sales.

Thus it becomes amply clear that rural India has to be the hot target in future for FMCG companies as it presents a plethora of opportunities, all waiting to be harnessed. Many of the FMCG companies are already busy formulating their rural marketing strategy to tap the potential before competition catches up. All biggies in the industry be it HLL, Marico, Colgate-Palmolive or Britannia, are showing

deep interest in rural India. However not everything is all rosy and there exist some gray areas in the rural strategies also. So it is clear that rural markets have caught the eyes of FMCG marketers and it is being targeted through experiments in a big way. But is it a right marketing strategy? Or will it prove to be an expensive mistake?

Shampoo market of urban/rural

Urban market of shampoos accounts for 65% of the market and is growing at 10%. Rural market of shampoos accounts for 35% of the market and is growing at 16%.

Sachets contribute roughly 65% of the total volumes with bottle making up to the balance 35%.

Our Market Study

For our market study on Shampoos, we visited Kanhore. It is located 5kms away from Badlapur station. The person, we interviewed Anil Shinde and the sarpanch of the village.

Profile of the Kanhore village:

1. Occupation The major occupation of people in this area is Farming, Dairy business and other agricultural business. There are also people working in Ordnance factory (Ambernath) 2. Population and literacy:

It is a place with approximate population of about 2000. About 30 % of adult population here is literate whereas the literacy rate of children is about 65%. 3. Income of the people: Income of the people is generally through agriculture so it is stable and the people working in ordnance have a increasing level of income.

4. Demand for shampoos: The demand for the shampoos in this area is moderate and people are expecting good shampoo with reasonable price.

Key Factors in rural purchase

Factors influencing purchase of shampoo in rural markets Looking at the wrapper Retailer recommends Looking at the price Logo identification Doesnt bother to check % of respondents 60 25 4 2 9

We have selected shampoos which fall under the category of FMCG products. Before we go any further, let us look at what FMCG products are? FMCG basically refers to those consumer non-durable goods which are required for daily or frequent use. Typically, a consumer buys these goods more frequently as compared to consumer durables.

Shampoos in rural india

Shampoos: o Clinic Plus o Lux o Chik o Sunsilk o Ayur o Nyle etc. Rs.2/Re.1/Re.1/Rs.2/Rs.2/Rs.2/-

Why shampoo.??
In the era of cutthroat competition every company searches for new market and new product. A year round tropical climate makes it difficult to maintain hair softness and shine. Tangled hair common complaint in girls and women. Softness and manageability key maintenance and nourishment of hair. issue is the

As the study shows only 35% of the rural people use Shampoos so there is a wider scope for volume expansion by converting the non users.

SOAPS:

Disadvantage of soap for hair wash:

Even though soaps have been traditionally used, there are various reasons why they are not effective cleansers like shampoos:

They leave behind fine granule-like deposits of calcium and magnesium, leading to an unhealthy scalp. In hard water they leave behind a deposit on your hair, making it dull and difficult to comb. This results in hair breakage. Soaps are harsh on your hair because they strip the hair of its natural oil, making it dry, coarse and rough to touch. Whats more, youll find that your hair gets easily tangled and looks dull and lifeless.

Shampoos Vis--Vis Soaps:

Shampoos are better cleaning agents because...

They are made from detergents which cut through grease more easily. They lather and spread more easily than soaps. This also makes them easier and convenient to use. Unlike soap, shampoo is pH balanced and cleans hair gently, without leaving behind residue.

Shampoo lifts off excessive oil, sebum, pollutants, sweat, dust and dandruff.

Consumer buying behaviour for shampoos:

The frequency of shampoo usage is very low. Most consumers use shampoo only once or twice in a week. In many cases, these

products are used on special occasions such as weddings, parties etc. Some customers use shampoo only to address a specific problem such as dandruff or when they need to condition their hair. About 50% of consumers use ordinary toilet soaps to wash their hair Brand loyalties in shampoo are not very strong. frequently look for a change, particularly in fragrance Consumers attribute lathering to the act of cleaning Major expectations from the product are improvement in texture and manageability, giving softness and bounce to hair, curing and avoiding damage to the hair Most consumers do not use shampoo daily Most of the consumers prefer shampoo sachets compared to shampoo bottles. Urban areas - 90 %, accounting for 80 % of shampoo sold in the country Rural areas - 80 %, accounting for 20 % of shampoo sold in the country Shampoo penetration:Consumers

All India Shampoo - 14 % Urban - 40 % Rural - 10 %

Average shampoo growth has been 20% in the last few years and it is expected to be about 25% in the coming years.

Product Launch
Rural Care India Ltd. is our company where our prime focus is to give the goodness of ayurveda to rural consumers.

About CHAMPI Shampoo

The word Shampoo is derived from the Hindi word Champi. For long ,black and silky hair, free from dust and dirt, we give you the goodness of Shikakai, Reetha, Amla, Coconut milk, curd, Neem, Aloevera, lemon. Champi is an all rounder shampoo as it has been prepared to take care of all major hair problems.

Four Ps

Product
'Champi' is formulated with herbal Conditioners that condition the hair and makes hair soft and helps keep it more manageable. Shampoo with ayurvedic herbs Coconut milk acts as a natural moisturizer and neem will do the job of an anti-dandruff shampoo.

Key Contents: Shikakai Reetha Amla Coconut milk Curd Neem Aloevera Lemon

Range of products champi1. Aloe Vera champi

2. Nimbu champi ( anti dandruff)

3. Amla champi

Price

The study conducted by us also revealed that though the aspiration to use shampoo was there, the need to spend more did not appeal to the rural consumers. Though pricing is important, rural
consumers favor quality as well. For rural consumers, a purchase is a bigger investment than it is for the urban consumer. Hence, a particular brand will be rewarded only if it earns the rural consumers trust through consistent product quality.

To arrive at a solution for this situation, we introduced the 50 Paise shampoo sachet, which easily satisfied a single wash. This innovative move the rural customer an opportunity to try the product at a very low price. It will do wonders for the brand and Champi has an opportunity to be sold out like hot cakes. Champi is prices as Sachets for .50 paise Bottle for Rs.5/- 5ml 50 ml +( 2 ml free)

To offer the consumer value for money we have come up with the concept that bottles will be cheaper than the sachets. We have to

be innovative and economize on the cost of bottle, packaging and other things and so, we came out with a 50 ml bottle of Champi for Rs.5 with 2ml more in the bottle when costs are compared. This move will result in a huge volume of sales and help the growth of Champi. This will show that the rural consumer will buy a product only if he sees enough value for money. Recruiting customers is the key issue as the rural consumer is rational and value conscious.

Special offers: Along with Champi bottles combs will be provided during special occasions.

Promotion

The main objective for RURAL CARE is to develop Champi shampoo as a brand. Marketing is all about reaching the right place before the competition does, and this is where rural care has its biggest advantage as, with Champi Shampoo it is bang on target.

Promotional tools:
By presenting live demos of the actual usage of the shampoo

Product (trails)

Shampoos getting encouraging trail from rural consumers from extremely low penetration levels. Many people have no clue how to use a shampoo. To encourage trails, rural cases team traveled extensively in rural pockets. Trails on school boys to demonstrate how to lather and wash, comb hair and show the difference.

We were as thrilled and excited as the volunteers during the demonstrations. This exercise had a significant impact in breaking ice and made people comfortable with the concept.

By paintings on walls, bullock carts etc

Wall Paintings are an effective and economical medium for advertising in rural areas. They are silent unlike traditional theatre .A speech or film comes to an end, but wall painting stays as long as the weather allows it to. Rural households shopkeepers and panchayats do not except any payment, for their wall to be painted with product messages.

 The greatest advantage of the medium is the power of the picture completed with its local touch.

Our company will paint its advertisements near: Schools Colleges Market areas Buses And other transport modes.

Haats & Melas

The countries oldest tradition holds the key to rural penetration. The average daily sale at a Haat is about Rs.2.25 Lacs while the annual sales at melas amount to Rs.3, 500 crore.

In rural India, annual melas organized with a religious or festive significance are quite popular and provide a very good platform for distribution. Rural markets come alive at these melas and people visit them to make several purchases. According to the Indian Market Research Bureau, around 8000 such melas are held in rural India every year. Rural markets have the practice of fixing specific days in a week as Market Days when exchange of goods and services are carried out. This is another potential low cost distribution channel available to the marketers. Haats serve a good opportunity for promotion after brand building has been done at Mela. Also, one satellite town where people prefer to go to buy their durable commodities generally serves every region consisting of several villages. If marketing managers use these feeder towns they will easily be able to cover a large section of the rural population. Melas are organized after harvest season, so the villager has enough money, which he will be ready to spend. Demonstration at Haat is essential to convert customers at haats since their attitude is far more utilitarian than that of visitors to a fair. Traditional media (skits)

 Puppet Shows

Audio Visuals Radio

Language used on the packages is in Hindi also.

Place
The place covered is the villages of the Thane suburbs (villages in thane districts).

Mainly in the grocery shops(kirana)

 Kumbh Melas

Weekdays Bazaar(mandi)

Unique Selling Proposition (Usp)

DEFINITION: USP i.e. Unique Selling Proposition can be defined as the distinctive benefit or advantage a producer provides to his/her customers over his/her competitors. The concept of "USP" is credited to Rosser Reeves, chairman of the Ted Bates & Co. advertising agency in the 1950s. He was one of the first to develop a technique for communicating in an overcrowded marketplace. The USP can be of different kinds like: Low price, higher quality, free gifts, or any other kind of advantages.

USP of product Low price A wider choice

EXAMPLE Tide washing powder of Sunsilk

product Superior level of customer service Higher quality

Maruti udyog ltd. Pepsodent

In order to successfully market its product every manufacturer needs to focus on whats special & unique about his/her product , this sets him/her apart from his/her competition & allows the owner to stand out from the crowd.

Unique selling proposition of Champi:

Herbal conditioner

LOGO:

PRINT ADVERTISEMENT:

Balon ko deni ho pyaar ki jhappi, toh unhe lagao shampoo Champi..

Tagline: Champi lagale aur Aaja nachle... Distribution strategy:

The distribution of our products will be done through retailers then to the rural customers. Manufacturer- retailer- rural consumer

Champi Manufacturer

Retailers

Rural Customer

CHAMPI DISTRIBUTION CHANNEL

Marketing strategies

 The launch of sachets which has transformed the rural market considerably as packaging in smaller units and lesser-priced packs increases the products affordability. The winning strategy instead is to focus on their basic needs by providing it at a low-cost rather than focusing on technology. Hired managers from rural management institution for the overall progress of rural markets. Products are design keeping in mind the cultural dynamics, the needs and latent feelings of the rural consumers. Rural illiterate masses can easily identify our product by its packaging through color, visuals, size etc. Proper sales and distribution network.

Conclusion

In the end it is certain that FMCG companies will have to really gain inroads in the rural markets in order to achieve double digit growth targets in future. There is huge potential and definitely there is lot of money in rural India but the smart thing would be to weigh in the roadblocks as carefully as possible. The companies entering rural market must do so for strategic reasons and not for tactical gains as rural consumer is still a closed book and it is only through unwavering commitment that the companies can make a dent in the market. Ultimately the winner would be the one with the required resources like time and money and also with the much needed innovative ideas to tap the rural markets.

Story Board

Champi ka Chamatkar