A Dissertation Report On Analysis of Rural Marketing Strategies of Different Tea Brands.

Submitted by: Shikha Agarwal BBA A7006409022 Marketing Under The Guidance Of: Faculty Guide. Mrs. Rashmi Tirpathi

DISSERTATION REPORT IN PARTIAL FULFILLMENT OF THE AWARD OF FULL TIME BACHELORS IN BUSINESS ADMINISTRATION (2009-12)

STUDENTS DECLARATION

I, SHIKHA AGARWAL student of Bachelors of Business Administration from Amity Business School, Amity University Uttar Pradesh hereby declare that I have completed Dissertation on Analysis of Marketing Strategies of Different Tea Brands Analysis Brands as part of the course requirement. I further declare that the information presented in this project is true and original to the best of my knowledge.

Signature SHIKHA AGARWAL Student

Signature Mrs. RASHMI TRIPATHI Faculty Guide

Signature Mr. V.P.SAHI Director ABS

FACULTY CERTIFICATE

I, Mrs. RASHMI TIRPATHI hereby certify that SHIKHA AGARWAL, student of BBA 6th Semester (2009-2012) of Bachelors of Business Administration at Amity Business School, Amity University Uttar Pradesh has completed dissertation on Analysis of Marketing Analysis Strategies of Different Tea Brands, under my guidance. Brands

Mrs. RASHMI TRIPATHI AMITY UNIVERSITY, LUCKNOW CAMPUS UTTAR PRADESH

Acknowledgement
Exchange of ideas generates a new object to work in a better way. Whenever a person is helped and co-operated by other, his heart is bound to pay gratitude and obligation to them. An endeavour is difficult even to initiate without the help of many souls who are always there by the grace of god. I am also grateful to my faculty guide at Amity University, Mrs. RASHMI TIRPATHI for her regular guidance throughout my training program. Finally, this thesis would not have been possible without the confidence, endurance and support of my family. My family has always been a source of inspiration and encouragement.

SHIKHA AGARWAL BBA 6TH SEMESTER

RURAL INDIAa new dawn

India needs creative solutions to start a revolution which can take its villages fast forward in time converting them into economically viable units and growth engines, harnessing the power of the villagers, and opening up new horizons with the promise of a better tomorrow.

SR NO. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 CONCLUSION BIBLIOGRAPHY

Contents
CONTENT EXECUTIVE SUMMARY OBJECTUVES OF THE STUDY RESEARCH METHODOLOGY LITERARTURE REVIEW INTRODUCTION RURAL MARKETING CONCEPT WHAT MAKES RURAL MARKET ATTRACTIVE RURAL CONSUMER INSIGHT SOME MYTHS ABOUT RURAL MARKET WHY DIFFERENT STRATEGIES? NATURE OF RURAL MARKET OPPORTUNITIES FAST MOVING CONSUMER GOODS(FMCG) RURAL CONSUMER BEHAVIOUR COMPANY-1 TATA TEA COMPANY-2 SOCIETY TEA COMPANY-3 PARIVAR TEA

PAGE NO.

EXECUTIVE SUMMARY
India s way is not Europe s. India is not Calcutta and Bombay. India lives in her seven hundred thousand villages said by Mahatma Gandhi, 1926

Marketing in developing countries like India have often been borrowed from the western world. Concepts like Brand identity, Customer relationship management, 4 Ps of the marketing mix, Consumer behavior process; Segmentation, targeting and positioning etc. have often been lifted straight from the marketing Intelligentsia abroad and adopted in Indian conditions, often with minimal success. Reason lies not in the fault of such concepts, but their integration with the Indian ethos and culture. The rural India offers a tremendous market potential. Nearly two-thirds of all middleincome households in the country are in rural India and represents half of India s buying potential. Despite, the strong potential the rural markets are by and large less exploited. Consider the market, out of five lakhs villages in India only one lakh have been tapped so far. According to us if the rural market has to be adequately tapped, there has to be a change in the way marketing concepts learnt in B-schools with adequate adoption according to scenarios prevalent in rural India. The paper thereby presents the modified version of Philip Kotler s famous marketing mix consisting of 4Ps. The focus is on its modification and subsequent customization to Indian rural markets perspective. The 4Ps have to be modified to include 1P i.e. Packaging and 1R i.e. Retailer as special focus areas. Further to ensure the sustainability of the marketing mix two Es i.e. Education and Empowerment has to be at the core as they help in generating widespread Participation from the rural clientele by enhancing their standard of living. The Products in the rural market should essentially operate at the basic and expected level of product classification. They should essentially meet the basic needs of the consumer and should be a no-frill product, as the consumer would not be valuing much any further addition to the product concept. Companies also face a daunting task in communicating about their products to the consumer due to lack of literacy and failure of traditional media to penetrate in the rural households. Hence, the advertising mix has to be more towards non-conventional yet effective medium

like Puppetry, Folk Theater Song, Wall Painting, Demonstration, Posters, Agricultural Games, NGOs network, etc. Thus overall either the product or communication or preferably both need to be customized to target the rural customer. In terms of physical distribution due to lack of infrastructure the costs are very exorbitant to reach the rural customer. Thus, mediums like rural marketing vehicles and melas andhaats provide better opportunities to meet customer needs. Also the existing distribution would need a transformation to achieve the required penetration levels as success of Project Streamline of HLL has shown. Since, the value for money concept is more important rural customers, there has to be an approach of treating customer as budget seeking consumer. Here, fitting the consumer needs into an affordable price point is pursued first and then other features of product are fitted in. Similarly, packaging has to meet customer needs of better brand recall and introducing favorable price points. At the same time the importance of retailer has to be recognized where he is one of the most major influences is customers decision making process. He acts as the friend and guide in this process and hence, needs to be managed effectively through promotion programmes and incentives to promote the brand of a company. In order to bridge the gap between Philip Kotler and countryside Indian what is needed the appreciation of unique features of rural India and thus, responding to them by making adequate improvements in the application of the marketing concepts learnt in the class. For achieving the desired results of capturing the rural customer a comprehensive approach to the traditional marketing concepts has to be taken. This marketing mix has to be responsive to customers needs and fit into his life as a tool of self-enhancement. Tobe successful the concept of marketing has to be taken in conjunction with its economic, psychological and social implications.

Objectives Of The Study

Any task without sound objectives is like Tree without roots. Similarly in case of any research study undertaken, initially the objectives of the same are determined and accordingly the further steps are taken on. A research study may have many objectives but all these objectives revolve around one major objective which is the focus of the study. In this study, the focus is on the emergence of rural markets as the most happening market on which every marketer has an eye .And so this study will be based on studying the emergence of rural market in various contexts. The main objective of the study is to analyze and present the marketing of consumer products in rural areas. The following objectives have been set forth. They are to: 1) Present a rural marketing perspective. 2) Present a profile of Indian Rural market. 3) Examine the product and brand penetration in rural markets. 4) Analyze marketing of consumer product in rural markets. 5) Present marketing strategy frame for marketing consumer products in rural areas.

RESEARCH METHODOLOGY
Scope of Study
The study is restricted to selected districts of UTTAR PRADESH. Further, product and brand penetration is examined. As regards marketing of consumer products in rural areas, the study analyzes products from non durable category (tea).

Data Collection
Sample units:1. Working people (including men &women), basically farmers. 2. College students 3. School students 4. Senior citizen Sample Size:1. Working people: 32% 2. College students: 29% 3. School students: 23% 4. Senior citizens: 16%

Sampling Region: 1. I have selected Uttar Pradesh, of Uttar Pradesh as the area of study. 2. I have chose Lucknow, Barabanki as areas of research.

Data Collection Method: . Secondary Data: - It will be collected through newspapers, magazines, journals, research papers and internet.

Literature Review
Rural market is one of the best opportunities for the FMCG sector. In some sense we can say that rural market is future of FMCG. 1. Basu Purba (2004), suggested that the lifestyle of rural consumers is changing. Rural Indian market and the marketing strategy have become the latest marketing buzzword for most of the FMCG majors. She added the strategies of different FMCG companies for capturing rural market like Titan s Sonata watches, Coco Cola s 200mlbottle, different strategies of HUL and Marico etc. She takes into consideration the study of National Council for Applied Economic Research (NCAER).According to the NCAER projections, the number of middle and high-income households in rural area is expected to grow from 140 million to 190 million by 2007.In urban India, the same is expected to grow from 65 million to 79 million. Thus, the absolute size of rural India is expected to be double that of urban India. 2. Tognatta Pradeep (2003), suggested that, the economic growth in India's agricultural sector in last year was over 10%, compared with 8.5%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. 3. Dr. N. Rajendhiran (MBA, PhD)/ Mr. S. Saiganesh (MBA, MA, M.Phil)/ Ms. P. Asha(MBA) Prime Minister Dr. Manmohan Singh recently talked about his vision for rural India: "My vision of rural India is of a modern agrarian, industrial and services economy co- existing side by side, where people can live in well-equipped villages and commute easily to work, be it on the farm or in the non-farm economy. There is much that modern science and technology can do to realize this vision. Rural incomes have to be increased. Rural infrastructure has to be improved. Rural health and education needs have to be met. Employment opportunities have to be created in rural areas." '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.

Introduction
Before gamboling into issues like where the Indian rural market stands and the opportunities for corporate to explore there... let's look at the definition of urban and rural India. The Census defined urban India as - "All the places that fall within the administrative limits of a municipal corporation, municipality, cantonment board etc or have a population of at least 5,000 and have at least 75 per cent male working population in outside the primary sector and have a population density of at least 400 per square kilometer. Rural India, on the other hand, comprises all places that are not urban!" Now for some facts and figures The Indian rural market today accounts for only about Rs 8 billion (53 per cent - FMCG sector, 59 per cent durables sale, 100 per cent agricultural products) 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. Time and again marketing practitioners have waxed eloquent about the potential of the rural market. But when one zeroes in on the companies that focus on the rural market, a mere handful names come to mind. Hindustan Lever Limited (HLL) is top of the mind with their successful rural marketing projects like 'Project Shakti' and 'Operation Bharat'. The lynchpin of HLL's strategy has been to focus on penetrating the market down the line and focusing on price point. Furthermore, activating the brand in the rural market through activities, which are in line with the brand itself, is what sums up HLL's agenda as far as the rural market is concerned informs MindShare Fulcrum general manager R Gowthaman. Amul is another case in point of aggressive rural marketing. Some of the other corporates that are slowly making headway in this area are Coca Cola India, Colgate, Eveready Batteries, LG Electronics, Philips, BSNL, Life Insurance Corporation, Cavin Kare, Britannia and Hero Honda to name a few.

Khaitan fans' ad on a horse cart

Wheel's wall painting

We can safely say that until some years ago, the rural market was being given a stepmotherly treatment by many companies and advertising to rural consumers was usually a hit and miss affair. More often than not, the agenda being to take a short-cut route by pushing urban communication to the rural market by merely transliterating the ad copy. Hence advertising that is rooted in urban sensitivities didn't touch the hearts and minds of the rural consumer. While, this is definitely changing, the process is slow. The greatest challenge for advertisers and marketers continues to be in finding the right mix that will have a pan-Indian rural appeal. Coca Cola, with their Aamir Khan ad campaign succeeded in providing just that. Corporates are still apprehensive to "Go Rural." A few agencies that are trying to create awareness about the rural market and its importance are Anugrah Madison, Sampark Marketing and Advertising Solutions Pvt Ltd, MART, Rural Relations, O&M Outreach, Linterland and RC&M, to name a few. Also, the first four agencies mentioned above have come together to form The Rural Network. The paramount objective of the Network is to get Lifebuoy's painting India Interestingly, the rural market is growing at a far greater speed than its urban counterpart. "All the data provided by various agencies like NCAER, Francis in wall clients who are looking for a national strategy in rural marketing rural and help them in executing it across different regions.

Kanoi etc shows that rural markets are growing faster than urban markets in certain product categories at least. The share of FMCG products in rural markets is 53 per cent, durables boasts of 59 per cent market share. Therefore one can claim that rural markets are growing faster than urban markets," says Sampark Marketing and Advertising Solutions Pvt Ltd managing director R A Patankar. Coca-Cola India tapped the rural market in a big way when it introduced bottles priced at Rs 5 and backed it with the Aamir Khan ads. The company, on its behalf, has also "Yaara da Tashan..." McCann Erickson's been investing steadily to build their ads with Aamir Khan created universal infrastructure to meet the growing needs of appeal for Coca Cola the rural market, which reiterates the fact that this multinational has realised the potential of the rural market is going strength to strength to tap the same. Clearly the main challenge that one faces while dealing with rural marketing is the basic understanding of the rural consumer who is very different from his urban counterpart. Also distribution remains to be the single largest problem marketers face today when it comes to In 2000, ITC took an initiative to develop direct contact with farmers who lived in far-flung villages in Madhya Pradesh. ITC's E-choupal was the result of this initiative. going rural. "Reaching your product to remote locations spread over 600,000 villages and poor infrastructure roads, telecommunication etc and lower levels of literacy are a few hinges that come in the way of marketers to reach the rural market," says MART managing director Pradeep Kashyap.

Citing other challenges in rural marketing, Patankar says, "Campaigns have to be tailor made for each product category and each of the regions where the campaign is to be executed. Therefore a thorough knowledge of the nuances of language, dialects and familiarity with prevailing customs in the regions that you want to work for is essential.

The other challenge is the reach and the available means of reaching out to these markets, hence the video van is one of the very effective means of reaching out physically to the rural consumers." The fact of the matter remains that when compared to the Indian urban society, which is turning into a consumerism society; the rural consumer will always remain driven by his needs first and will therefore be cost conscious and thrifty in his spending habits. "Decision-making is still conscious and deliberated among the rural community. But nevertheless, the future no doubt lies in the rural markets, since the size of the rural market is growing at a good pace. There was a time when market predictions were made on the basis of the state of the monsoon but this trend has changed over the years; there is a large non farming sector, which generates almost 40 per cent of the rural wealth. Hence the growth in the rural markets will be sustained to a large extent by this class in addition to the farmer who will always be the mainstay of the rural economy," affirms Patankar. "Although the melting of the urban - rural divide will take a while, this is not for want of the availability of the means but for want of the rural consumer's mindset to change; which has its own logic, which is driven by tradition, custom and values that are difficult to shed," he points out. Fulcrum's Gowthaman says, "The biggest impending factor or deterrent on rural monies going up is that there is a general sense of trying to benchmark cost per contact (CPC). The television CPC is going to anyways be cheaper to rural CPC and Satellite unless and until the volume - value equation

dish antennas reach rural India

turns the other way round, you will not be able to spend disproportionate monies in the rural market." For HLL, a one rupee or a five rupee sachet or the Kutti Hamam (the small Hamam) helps in giving the

Typical shop in rural India stocked with sachets, etc

consumers a trial opportunity. While it does help in generate volume but not in terms of values. "Till the time that volume - value equation is managed better, the CPC is preventing anybody to look at rural at a large scale activation programme," reiterates Gowthaman. Ultimately, the ball lies in the court of rural marketers. It's all about how one approaches the market, takes up the challenge of selling products and concepts through innovative media design and more importantly interactivity. Anugrah Madison's chairman and managing director RV Rajan sums up,"There is better scope for language writers who understands the rural and regional pulse better. I also see great scope for regional specialists in the areas of rural marketing - specialists like Event Managers, Wall painters, folk artists, audio visual production houses. In fact all those people who have specialised knowledge of a region are bound to do well, thanks to the demands of the rural marketers." So the fact remains that the rural market in India has great potential, which is just waiting to be tapped. Progress has been made in this area by some, but there seems to be a long way for marketers to go in order to derive and reap maximum benefits. Moreover, rural India is not so poor as it used to be a decade or so back. Things are sure a changing!

Rural Marketing - Concept

In recent years, 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 industrial and urban manufactured products. In this context, a special marketing strategy, namely, rural marketing has emerged. But often, rural marketing is confused with agricultural marketing the latter denotes marketing of produce of the rural areas to the urban consumers or industrial consumers, whereas rural marketing involves delivering manufactured or processed inputs or services to rural producers or consumers.

Classification of rural consumers The rural consumers are classified into the following groups based on their economic status: The Affluent Group: They are cash rich farmers and a very few in number. They have affordability but not form a demand base large enough for marketing firms to depend on. Wheat farmers in Punjab and rice merchants of Andhra Pradesh fall in this group. The Middle Class: This is one of the largest segments for manufactured goods and is fast expanding .Farmers cultivating sugar cane in UP and Karnataka fall in this category. The Poor: This constitutes a huge segment. Purchasing power is less, but strength is more. They receive the grants from government and reap the benefits of many such schemes and may move towards the middleclass. The farmers of Bihar and Orissa fall under this category.

What makes Rural Market Attractive?

Rural market has following arrived and the following facts substantiate this: 742 million people

 Estimated annual size of the rural market o FMCG Rs 65,000 Crore o Durables Rs 5,000 Crore o Agri-inputs (incl. tractors) Rs 45,000 Crore o 2 / 4 wheelers Rs 8,000 Crore In 2001-02, LIC sold 55 % of its policies in rural India. Of two million BSNL mobile connections, 50% in small towns/villages Of the six lakh villages, 5.22 lakh have a Village Public Telephone (VPT) 41 million Kisan Credit Cards issued (against 22 million credit-plus-debit cards in urban) with cumulative credit of Rs 977 billion resulting in tremendous liquidity. Of 20 million Rediffmail signups, 60 % are from small towns. 50% transactions from these towns on Rediff online shopping site 42 million rural HHs availing banking services in comparison to 27 million urban HHs. Investment in formal savings instruments: 6.6 million HHs in rural and 6.7 million in urban

Nature of Rural Market

Large, Diverse and Scattered Market: Rural market in India is large, and scattered into a number of regions. There may be less number of shops available to market products. Major Income of Rural consumers is from Agriculture: Rural Prosperity is tied with agriculture prosperity. In the event of a crop failure, the income of the rural masses is directly affected. Standard of Living and rising disposable income of the rural customers: It is known that majority of the rural population lives below poverty line and has low8 literacy rate, low per capital income, societal backwardness, low savings, etc. But the new tax structure, good monsoon, government regulation on pricing has created disposable incomes. Today the rural customer spends money to get value and is aware of the happening around him. Traditional Outlook: Villages develop slowly and have a traditional outlook. Change is a continuous process but most rural people accept change gradually. This is gradually changing due to literacy especially in the youth who have begun to change the outlook in the villages. Rising literacy levels: It is documented that approximately 45% of rural Indians are literate. Hence awareness has increases and the farmers are well-informed about the world around them. They are also educating themselves on the new technology around them and aspiring for a better lifestyle. Diverse socioeconomic background: Due to dispersion of geographical areas and uneven land fertility, rural people have disparate socioeconomic background, which ultimately affects the rural market. Infrastructure Facilities: The infrastructure facilities like cemented roads, warehouses, communication system, and financial facilities are inadequate in rural areas. Hence physical distribution is a challenge to marketers who have found innovative ways to market their products.

Rural Consumer Insight

Rural India buys: o Products more often (mostly weekly) o Buys small packs, low unit price more important than economy 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 advertising support o Chik shampoo, second largest shampoo brand o Ghadi detergent, third largest brand Fewer brand choices in rural: number of FMCG brand in rural is half that of urban Buy value for money, not cheap products

Some Myths about Rural Markets

I. Myth-1: Rural Market Is a Homogeneous Mass Reality: Its a heterogeneous population. Various Tiers are present depending on the incomes like Big Landlords; Traders, small farmers; Marginal farmers: Labors, artisans. State wise variations in rural demographics are present viz. Literacy (Kerala 90%, Bihar 44%) and Population below poverty line (Orissa 48%, Punjab 6%) II. Myth-2: Disposable Income Is Low Reality: Number of middle class HHs (annual income Rs 45,000- 2, 15,000) for rural sector is 27.4 million as compared to the figure of 29.5 million for urban sector. Rural incomes CAGR was 10.95% compared to 10.74% in urban between 1970-71 and 1993-94. III. Myth-3: Individuals Decide About Purchases Reality: Decision making process is collective. Purchase process- influencer, decider, buyer, one who pays can all be different. So marketers must address brand message at several levels.Rural youth brings brand knowledge to Households (HH).

Why Different Strategies?

Rural markets, as part of any economy, have untapped potential. There are several difficulties confronting the effort to fully explore rural markets. The concept of rural markets in India is still in evolving shape, and the sector poses a variety of challenges. Distribution costs and non availability of retail outlets are major problems faced by the marketers. The success of a brand in the Indian rural market is as unpredictable as rain. Many brands, which should have been successful, have failed miserably. This is because, most firms try to extend marketing plans that they use in urban areas to the rural markets. The unique consumption patterns, tastes, and needs of the rural consumers should be analyzed at the product planning stage so that they match the needs of the rural people. Therefore, marketers need to understand the social dynamics and attitude variations within each village though nationally it follows a consistent pattern. The main problems in rural marketing are: Understanding the rural consumer Poor infrastructure Physical Distribution Channel Management Promotion and Marketing Communication Dynamics of rural markets differ from other market types, and similarly rural marketing strategies are also significantly different from the marketing strategies aimed at an urban or industrial consumer.

Opportunities

Infrastructure is improving rapidly. o In 50 years only 40% villages connected by road, in next 10 years another 30% o More than 90 % villages electrified, though only 44% rural homes have electric connections o Rural telephone density has gone up by 300% in the last 10 years; every 1000+ pop is connected by STD Social Indicators have improved a lot between 1981 and 2001 o Number of pucca houses doubled from 22% to 41% and kuccha houses halved (41% to 23%) o Percentage of BPL(Below Poverty Line) families declined from 46% to 27% o Rural Literacy level improved from 36% to 59% Low penetration rates in rural so there are many marketing opportunities

Durables Urban Rural Total (% of rural HH) CTV 30.4 4.8 12.1 Refrigerator 33.5 3.5 12.0 FMCGs Shampoo 66.3 35.2 44.2 Toothpaste 82.2 44.9 55.6

Marketers can make effective use of the large available infrastructure o Post offices 1,38,000 o Haats (periodic markets) 42,000

o Melas (exhibitions) 25,000 o Mandis (agri markets) 7,000 o Public distribution shops 3,80,000 o Bank branches 32,000 Proliferation of large format rural retail stores which have been successful also. o DSCL Haryali stores o M & M Shubh Labh stores o TATA/Rallis Kisan Kendras o Escorts rural stores o Warnabazaar, Maharashtra (annual sale Rs 40 crore)

Fast Moving Consumer Goods

There was a time when the FMCG companies ignores rural market, they took no any interest to produced or sell products in rural market in India. It was the initial stage of FMCG companies in India. As per as the time had passed, the strategy and marketing style of FMCG companies had been changed. The rural market is the one of the best opportunity for the FMCG sector in the India. It is wider and less competitive market for the FMCG.As the income level of the rural consumers increasing, the demand of FMCG is increasing continuously.

Top Players in FMCG Sector: 1. Hindustan lever limited (HLL) 2. ITC (Indian Tobacco Company) 3. Nestle India 4. GCMMF (AMUL) 5. Dabur India 6. Asian Paints (India) 7. Cadbury India 8. Britannia Industries 9. Procter&Gamble Hygiene &Health Care 10. Marico Industries Secondary Players: 1. Colgate-Palmolive (India) Ltd. 2. Godrej Consumers Product Ltd. 3. Nirma Ltd. 4. Tata Tea Ltd. 5. Parle Agro

Rural consumers spend around 13 per cent of their income, the second highest after food (35 per cent), on fast moving consumer goods (FMCG), as per a RMAI study. The FMCG industry in India was worth around US$ 16.03 billion in August 2008 and the rural market accounted for a robust 57 per cent share of the total FMCG market in India. The FMCG sector saw rural markets post 20 per cent growth, ahead of the 17-18 per cent growth from urban India, aided by three years of good monsoon, higher prices of farm produce and farm-loan waiver. Most FMCG companies are now working on increasing their distribution in smaller towns and focusing on marketing and operations programmed for semi-urban and rural markets. For instance, Godrej Consumer Products intends to increase revenue from rural areas from 38 per cent to 55 per cent in the next three years by increasing its distribution network substantially. The products will reach out to 50,000 villages in the next couple of years from the present 18,000 villages while the number of towns covered will double from 3,300 to almost 6,500 in a year.

Rural Consumer Behaviour

Consumer Buyer Behaviour refers to the buying behaviour of final consumers - individuals and households who buy goods and services for personal consumption. All of these final consumers combined make up the consumer market. The consumer market in this case is Rural India. About 70% of Indias population lives in rural areas. There are more than 600,000 villages in the country as against about 300 cities and 4600 towns. Consumers in this huge segment have displayed vast differences in their purchase decisions and the product use. Villagers react differently to different products, colours, sizes, etc. in different parts of India. Thus utmost care in terms of understanding consumer psyche needs to be taken while marketing products to rural India. Thus, it is important to study the thought process that goes into making a purchase decision, so that marketers can reach this huge untapped segment.

Factors influencing buying behavior

The various factors that affect buying behavior of in rural India are: 1. Environmental of the consumer - The environment or the surroundings, within which the consumer lives, has a very strong influence on the buyer behaviors. Electrification, water supply affects demand for durables. 2. Geographic influences - The geographic location in which the rural consumer is located also speaks about the thought process of the consumer. For instance, villages in South India accept technology quicker than in other parts of India. Thus, HMT sells more winding watches in the north while they sell more quartz watches down south. 3. Family it is an important buying decision making organization in consumer markets. Family size & the roles played by family members exercise considerable influence on the purchase decisions. Industry observers are increasingly realizing that at times, purchase of durable has less to do with income, but has more to do with the size of the family & thats where rural India with joint family structures, becomes an attractive proposition. 4. Economic factors The quantum of income & the earning stream are one of the major deciding factors, which determine to a great extent, what the customer will be able to buy.

Many people in the rural market are below poverty line & for large number of people, agriculture is the primary occupation. More than 70% of the people are in small-scale agricultural operation. These factors affect the purchase decision. 5. Place of purchase (60% prefer HAATS due to better quality, variety & price) Companies need to assess the influence of retailers on both consumers at village shops and at haats. 6. Creative use of product ex Godrej hair dye being used as a paint to colour horns of oxen, Washing machine being used for churning lassi. The study of product end provides indicators to the company on the need for education and also for new product ideas. 7. Brand preference and loyalty (80% of sale is branded items in 16 product categories) Cultural factors influencing consumer behaviour Cultural factors exert the broadest and deepest influence on consumer behaviour. The marketer needs to understand the role played by the buyers culture. Culture is the most basic element that shapes a persons wants and behaviour. In India, there are so many different cultures, which only goes on to make the marketers job tougher. Some of the few cultural factors that influence buyer behaviour are: 1. Product (colour, size, design, and shape): There are many examples that support this point. A. For example, the Tata Sumo, which was launched in rural India in a white colour, was not well accepted. But however, when the same Sumo was re-launched as Spacio (a different name) and in a bright yellow colour, with a largerseating capacity and ability to transport good, the acceptance was higher.

Company Profile

Set up in 1964 as a joint venture with UK-based James Finlay and Company to develop value-added tea, the Tata Tea Group of Companies, which includes Tata Tea and the UKbased Tetley Group, today represent the world's second largest global branded tea operation with product and brand presence in 40 countries. Among India's first multinational companies, the operations of Tata Tea and its subsidiaries focus on branded product offerings in tea but with a significant presence in plantation activity in India and Sri Lanka. The consolidated worldwide branded tea business of the Tata Tea Group contributes to around 86 per cent of its consolidated turnover with the remaining 14 per cent coming from Bulk Tea, Coffee, and Investment Income. The Company is headquartered in Kolkata and owns 27 tea estates in the states of Assam and West Bengal in eastern India, and Kerala in the south.

Products & Brands

The company has five major brands in the Indian market - Tata Tea, Tetley, Kanan Devan, Chakra Gold and Gemini -- catering to all major consumer segments for tea. The Tata Tea brand leads market share in terms of value and volume in India and the Tata Tea brand is accorded "Super Brand" recognition in the country. Tata Tea's distribution network in the country with 38 C&F agents and 2500 stockist caters to over 1.7 million retail outlets (ORG Marg Retail Audit) in India.

The company has a 100% export-oriented unit (KOSHER & HACCP certified) manufacturing Instant Tea in Munnar, Kerala, which is the largest such facility outside the United States. The unit's product is made from a unique process, developed in-house, of extraction from tea leaves, giving it a distinctive liquoring and taste profile. Instant Tea is used for light density 100% Teas, Iced Tea Mixes and in the preparation of Ready-to- drink (RTD) beverages.

With an area of approx 15,900 hectares under tea cultivation, Tata Tea produces around 30 million kg of Black Tea annually.

4Ps of Marketing of TATA TEA

1# Product:

Bulk Tea All grades of CTC Teas All grades of Orthodox Teas Organic Tea - Orthodox grades Teas are supplied in packaging as per ISO norms as well as customer requirements viz. 4-ply Kraft Paper Sacks, Multiwall Paper Sacks, Rigid T--Sacks, Polywoven Sacks, Currugated Fibre Carlons, Polylined Jute Bags etc.

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

Intant tea powder - heavy density Instant tea powder - institutional density Instant tea powder - grocery density Micro milled instant tea powder 2#

Price:
Marketers need to understand the psyche of the rural consumers and then act accordingly. Rural marketing involves more intensive personal selling efforts compared to urban marketing. Firms should refrain from designing goods for the urban markets and subsequently pushing them in the rural areas. To effectively tap the rural market a brand must associate it with the same things the rural folks do. This can be done by utilizing the various rural folk media to reach them in their own language and in large numbers so that the brand can be associated with the myriad rituals, celebrations, festivals, melas and other activities where they assemble. All the prices of the products depend upon the package ie 50gms or 100gms. Normally a Penetrating Strategy is used frequently 3#

Place: (Distribution)
One of the ways could be using company delivery vans which can serve two purposes- it can take the products to the customers in every nook and corner of the market and it also enables the firm to establish direct contact with them and thereby facilitate sales promotion. However, only the bigwigs can adopt this channel. The companies with relatively fewer resources can go in for syndicated distribution where a tie-up between non-competitive marketers can be established to facilitate distribution. Annual melas organized are quite popular and provide a very good platform for distribution because people visit them to make several purchases. According to the India n Market Research Bureau, around 8000 such melas are held in rural India every year. Rural markets have the practice of fixing specific days in a week as Market Days (often called Haats) when exchange of goods and services are carried out. This is another potential low cost distribution channel available to the marketers. Also, every region

consisting of several villages is generally served by one satellite town (termed as Mandis or Agri-markets) where people prefer to go to buy their durable commodities. If marketing managers use these feeder towns they will easily be able to cover a large section of the rural population. 4#

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

SOCIETY TEA

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

Mission Statement

The objective is to create new blends for the world. Teas of a superlative quality that taste buds had never known To extend its reach, cross geographical and cultural boundaries and reaching the hearts of the people.

Benefits of Society Tea Health Benefits

Want the least expensive answer to memory problem? Drink tea, every few hours a day, and say recent findings by Unilever Research Laboratories. After much experiment with combinations of various kinds of drugs that supposedly enhanced memory power, the findings seek to subtly suggest that the most affordable remedy, without medical expenses involved, was already available and yet ignored.

Findings by Unilever point to a strong link between tea and an increase in mental alertness and other mental and physical attributes. Drinking tea every few hours can help prevent a decline in mental alertness and performance throughout the day. Tea is a rich source of flavonoids. The flavonoids in tea are found to be effective in improving blood circulation and skin health. Research in Japan and Netherlands also indicate that tea prevents strokes and heart attacks, certain cancers, check cholesterol levels and inhibit formation of dental plaque. Studies have shown that black tea consumption reduces the risk of heart disease and stroke. It maintains a healthy circulatory system of arteries and veins. Today researchers are finding that a steaming cup of tea can relieve more than just the stress of a harried day. Drinking the brew has been linked with a lowered risk of everything from tooth decay to heart disease to stroke. In a study of more than 1000 Japanese men, the more green tea they drank, the lower their concentrations of blood cholesterol dropped. And recently, University of Minnesota researchers found a link between tea consumption and a decreased risk for cancers of digestive and urinary tract organs in women. Study on humans on tea and heart health, revealed that drinking more than five cups of black tea had the lowest risk of severe atherosclerosis.

SOCIETY TEA

4Ps of Marketing of SOCIETY TEA

1#

Product:
Available in 50, 100, 250 & 500 grams respectively.

SOCIETY TEA

SOCIETY TEA - PET JAR

Available in 250, 500 grams and 1 Kg. only.

SOCIETY TEA BAGS

In Packs of 25, 50 & 100 respectively.

SOCIETY PREMIUM

Available in 250 grams Jars on Request. only.

T - TOWN TEA

Available in 250 & 500 grams Jar only.

Available on request only.

SOCIETY PURE DARJEELING TEA

2#

Price:
The Pricing strategy used by Society Tea is somewhere in between penetrating and skimming, but the major part is occupied by Penetrating. Prices of Tea are as per the product packages.

Eg;- 100 gms are @ Rs.20/-

3#

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

4#

Promotion:

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

Parivar Tea Limited

Company Profile:

A newly established company in the tea & coffee industry Board of Directors are the group members and is a partnership firm Manufacturing Plant is at Vashi and head office is at Malad

Why go Rural? Little has changed in the villages of India in the past decades. Schools have been built, but many still lack teachers and appropriate teaching methods. There are phone lines in many villages, but getting a dial tone is still a challenge. Electricity supply is at best intermittent. Health care is still limited in its availability.

Indias villages are dependent on agriculture for much of their sustenance. Drought is a common occurrence across much of India. As a result, villagers, for the most part, remain a poor lot - the per capita income of Indias villages is perhaps no more than Rs 12-18,000 (USD 240-360, USD1 = INR50) per annum, as compared to the national average of Rs 25,000 (USD 500).

Perhaps, most importantly, the opportunities available to villagers are not dramatically different from what they were many years ago. Villages in India are where you live if you have no other option. And yet, India is in its villages. 70% of Indians live there. Even as one India races ahead with optimism towards the future, there is another India which seems to be stuck in the past. If India as a nation has to progress, there is little doubt that Indias villages too have to progress.

Parivar Tea Limited 4Ps of Marketing of PARIVAR TEA

1#

Product:
There are 2 types of tea: General Tea Herbal Tea

2#

Price:
Prices are set according to the rural market / village. Prices are set after considering whether it is a general tea or a herbal tea. Prices will be a bit high for herbal tea, as It contains herbs which are costlier. Also as per the packages of tea

3#

Place:
The distribution pattern of our product will be different form the usual pattern. The first this is that the company will have a company outlet in each and every village which will eliminate the problem releting with middlemen. Along with this tea pouches will be available at every shop in villages.

4#

Promotion:
Initially we will be giving free sampling for the first user, thereby promoting the brand Wall painting at different places Mouth to Mouth Publicity Mobile Publicity with the use of vans and bicycles Free tea at festivals and other occasion and also at our outlets

S T P of Parivar Tea Limited

Segmenting / Targeting / Positioning 1. Segmenting: Buyers behavioral segmentation All variables are in some way or the other related to buyers behavior, which vary often confuses marketers. There is a difference between the buyers characteristics reflected in there geographic, demographics and psychographic profiles, and there buying behavior. Buyer behavior involves many elements like purchasing occasion benefits, user status, rate of product usage, loyalty rate, and attitude towards the product 2. Targeting: The company targets the whole family ie anyone in the family can drink the tea. Also special for farmers as it also contains herbs which will refresh farmers 3. Positioning A Marketer can position his product in various ways to develop or enhance its value to the consumer. He also do it according to : Product Characteristics / Consumer Benefits Price Quality Use or Application Product User Product Class Culture Symbols Competitors

Your company positions its products as a Quality product at fare prices and consumer benefits which is a herbal tea

Examples from The Industry

1. One very fine example can be quoted of Escorts where they focused on deeper penetration. They did not rely on T.V or press advertisements rather concentrated on focused approach depending on geographical and market parameters like fares, melas etc. Looking at the kuchha roads of village they positioned their bike as tough vehicle. Their advertisements showed Dharmendra riding Escort with the punch line Jandar Sawari, Shandar Sawari. Thus, they achieved whopping sales of 95000 vehicles annually.

2.

HLL started Operation Bharat to tap the rural markets. Under this

operation it passed out lowpriced sample packets of its toothpaste, fairness cream, Clinic plus shampoo, and Ponds cream to twenty million households.

3.

ITC is setting up e-Choupals which offers the farmers all the information,

products and services they need to enhance farm productivity, improve farm-gate price realization and cut transaction costs. Farmers can access latest local and global information on weather, scientific farming practices as well as market prices at the village itself through this web portal - all in Hindi. It also facilitates supply of high quality farm inputs as well as purchase of commodities at their doorstep.

4.

BPCL Introduced Rural Marketing Vehicle (RMV) as their strategy for

rural marketing. It moves from village to village and fills cylinders on the spot for the rural customers. BPCL considered low-income of rural population and therefore introduced a smaller size cylinder to reduce both the initial deposit cost as well as the recurring refill cost.

Conclusion:
The researcher would like to suggest the following points, so that the organizations can easily sell their products to their consumers: 1. However, the demand of a product is also affected by its life cycle. If the product is in the introduction stage, then it will definitely take some time to capture the market, because in the introduction stage, consumers are not much aware about the product. Therefore, it is the responsibility of the organization to create awareness amongst the consumers. 2. They should adapt rigorous marketing strategies, in order to sustain in the market. 3. There is immense competition in this sector. Therefore, the organizations should try to gain competitive advantage against their competitors. 4. They should try to reach as many people as possible. 5. For the organizations that are not much popular amongst the consumers should adopt Sales Promotion, as their marketing strategies. Thus looking at the challenges and the opportunities which rural markets offer to the marketers it can be said that the future is very promising for those who can understand the dynamics of rural markets and exploit them to their best advantage. A radical change in attitudes of marketers towards the vibrant and burgeoning rural markets is called for, so they can successfully impress on the 230 million rural consumers spread over approximately six hundred thousand villages in rural India.

BIBLIOGRAPHY

1.www.thehindubusinessline.com/nic/073/index.htm 2.www.coolavenues.com/know/mktg/ 3.www.indianmba.com/Faculty_Column/FC658/fc658.html 4.business.mapsofindia.com/rural-economy/statedevelopment/marketing.html 5.www.icmrindia.org/casestudies/catalogue/M arketing /MKTG081.htm 6. www.scribd.com 7. www,Wikipedia.com