1. Marketing
Management Project
On Rural Marketing
Submitted on: 16th Oct ‘12
Submitted to:
Dr. Preeti Rajpal Singh
(Teacher in-charge, Marketing
Management)
By:
Dhruv Narula
(50255)
Kanika Suri
(50275)
1
2. Marketing Management
Contents
ACKNOWLEDGEMENT .................................................................................................................... 3
PREFACE ........................................................................................................................................... 4
How is Urban Market different from Rural Market? ...................................................................... 5
The market is a place where buyers and Sellers Exchange Things. In lay man terms "It is a place
where buyers and sellers exchange goods/Service for some value in return such as Money". So the
Market is same everywhere. But, the difference is in the consumer behavior. There will be different
buyers in each market. This is because of different factors which Influence them. So the same ......... 5
BASIS OF DIFFERENCE ................................................................................................................... 5
IMPULSE TO GO RURAL .................................................................................................................... 7
GROWTH IN MARKET ....................................................................................................................... 8
General Strategies by FMCG Majors for Rural market ..................................................................... 9
HINDUSTAN UNILEVER LIMITED ..................................................................................................... 10
Rural Markets ............................................................................................................................. 10
Marketing Strategies .................................................................................................................. 10
RURAL MARKETING CAMPAIGNS ............................................................................................... 11
Khushiyon ki Doli .................................................................................................................... 11
Project Shakti.......................................................................................................................... 12
BrookeBond Sehatman strategy for a healthy initiative in Rural India .................................. 13
LIFEBOUY SWASTHYA CHETNA PROGRAMME ....................................................................... 13
PROCTER & GAMBLE ...................................................................................................................... 15
Strategies .................................................................................................................................... 15
SANGEETA BHABHI AND KAMYAB JODI INITIATIVE................................................................ 15
AMBITIOUS STRATEGIES OF SOME OF THE MAJOR COMPETITORS ............................................... 16
CavinKare ........................................................................................................................................ 16
Growth Highlights ....................................................................................................................... 16
Strategy ...................................................................................................................................... 16
DABUR ............................................................................................................................................ 18
Strategies .................................................................................................................................... 18
Project Astra ........................................................................................................................... 18
Events and Contests ............................................................................................................... 18
BIBLIOGRAPHY ................................................................................................................................ 19
2
3. Marketing Management
ACKNOWLEDGEMENT
We owe a great many thanks to a great many people who helped and
supported us during this project. Our deepest thanks to Ms. Preeti Rajpal Singh
(Subject teacher- Marketing Management) for guiding and correcting various
documents with attention and care. She has taken pain to go through the
details and make necessary correction as and when needed. We express our
thanks to the Principal of Shaheed Sukhdev College of Business Studies
for extending her support and giving such an opportunity to do this project.
We also extend our heartfelt thanks to our family and well wishers for cooperating with us during the time period.
Ms. Preeti Singh
__________________
3
4. Marketing Management
PREFACE
This project highlights the role of urban and rural campaigning all over India.
We have chosen HUL, P&G, Dabur and ITC. The project highlights the various
campaigns the companies undertake to promote their brands.
Up until recently, large part of the marketing that was done in this country
was done, targeting the urban population of the country. Now the marketing
potential of the rural part of the country is rapidly growing.
Let us get an understanding of the urban and rural breakup of the country.
26% of the population lives in the cities or in urban India. The remaining 74%
lives in the villages or in rural India. The population of the country is spread
over the villages but is very concentrated in the cities. India has six of the
largest cities in the world. These are - Calcutta, Bombay, Delhi, Madras,
Bangalore and Hyderabad. Besides these cities, there are six other cities that
are growing at a very rapid rate and have a huge concentration of the
population. These are - Ahmedabad, Kanpur, Pune, Nagpur, Lucknow and
Jaipur.
As the standard of living in the villages also improves, many modern facilities
are available in almost every house hold in the villages too. The country is
growing, and is a place where business will thrive in the near future. To
understand this better consider the following favourable shifts that have taken
place in the consumer patters of buying.
4
5. Marketing Management
How is Urban Market different from Rural Market?
The market is a place where buyers and Sellers Exchange Things. In lay man
terms "It is a place where buyers and sellers exchange goods/Service for some
value in return such as Money". So the Market is same everywhere. But, the
difference is in the consumer behavior. There will be different buyers in each
market. This is because of different factors which Influence them. So the same
way there is a difference between Rural and Urban Market. The companies
which have understood the phenomena of rural market have succeeded in the
market, For Ex: HUL, ITC, Colgate, Rajdoot Motorcycle.
BASIS OF DIFFERENCE
The Differences can be Infrastructure, Economy, Lifestyle, Socio- Cultural
Background,
Availability
or
reach,
Habits,
and
Competition.
1. Infrastructure: The facilities like Electricity, Internet, Roads and Buildings,
Educational Institutions, Financial Institutions, Communication and Organized
Market, Other Facilities differs in urban and rural market. In urban everything
gets implemented soon and Availability is also there. Whereas, in rural market
everything
takes
a
good
amount
of
time.
2. Economy: Here the Economy means, the earning Capacity in a rural Market.
The cost of Living always depends upon their way of earning. So, the Income
levels are unreliable, as Most of them are depended upon the seasons and
Agriculture. So the Income levels cannot be a fixed one.
3. Lifestyle: The lifestyle, that is living pattern of both the markets differ a lot.
This can be important factor which influences the companies to think of when
they
approach
rural
market.
4. Socio- Cultural Background: Due to the illiteracy level, and Culture
adaptability from long time the rural market always gets differ than the urban
market. The superstition and other belief as well as the way of thinking
towards products and goods differ in these two markets.
5
6. Marketing Management
5. Availability or Reach: Due to the areas which are diverted Geographically
and Heterogeneous market the reach is very difficult. The logistics for rural
market is a tough task than to reach the Urban Market.
6. Habits: The daily routine of the people makes them to cultivate different
habits. Apart from due to the awareness is low in Media terms there will be a
difference
in
the
habits.
Competition: The competition in the market for brands and Companies always
differ. As in rural markets it is always the channel Partner and Retailer plays a
vital role. But where as in Urban Market Brand Plays a great role.
6
7. Marketing Management
IMPULSE TO GO RURAL
There are many reasons that have urged the FMCG companies to enter the
uncharted territory of rural India. Some of the attractions are discussed below:
1. Large Population
The move underscores the point that rural market is important considering
rural India comprises 12.2 % of the world population.
The rural Indian population is large and its growth rate is also high. Over 70%
India’s one 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
volume driven growth.
Table : Percentage Distribution of Households and Income
Area
Households Population
Rural
72.6
74.6
Urban
27.4
25.4
All-India
100
100
Table 1 Rural-Urban Market Profile
Urban
Population 2001-02 (mn
53
household)
Population 2009-10 (mn
69
household)
% Distribution
28
Market (towns/villages)
3,786
Universe of outlets
1
Rural
135
153
72
627,000
3.3
2.Rising Rural Prosperity
India is now seeing a dramatic shift towards prosperity in rural households. To
drive home the potential of rural India just consider some of these impressive
facts about the rural sector. As per the National Council for Applied Economic
Research (NCAER) study, there are as many ‘middle income and above’
households in the rural areas as there are in the urban areas. There are almost
7
8. Marketing Management
twice as many ‘lower middle income’ households in rural areas as in the urban
areas.
3. Distribution of people income-wise
The Indian middle class, target consumers for many companies, is expected to
swell up to 267 million people in the next five years, up 67 percent from the
current levels, thus providing a great market opportunity for firms, according
to NCAER. A report by National Council for Applied Economic Research's
(NCAER) Centre for Macro Consumer Research said by 2015-16, India will be a
country of 53.3 million middle class households, translating into 267 million
people falling in the category. As per the study, which uses 'household income'
as the criterion, a family with an annual income between Rs 3.4 lakh to Rs 17
lakh (at 2009-10 price levels) falls in the middle class category. NCAER also said
with increase in village incomes and growing urbanisation, the percentage of
rural population in the total middle class of the country will reach 48.8 percent
by 2025-26 from 37.4 percent at present. This apparently is the result of
development work, which happened under the five years plans and other
special programmes such as land reforms, rural electrification rural
communication, and rural credit facilities, etc. The absolute size of the rural
market is thus expected to double that of urban India. But despite the high
rural share in these categories, the rural penetration rates are low, thus
offering tremendous potential for growth. According to Mr. D. Shivakumar,
Business Head (Hair), Personal Products Division, Hindustan Lever Limited, the
money available to spend on FMCG (Fast Moving Consumer Goods) products
by urban India is Rs. 49,500 crores as against is Rs. 63,500 crores in rural India.
GROWTH IN MARKET
The purchasing power in rural India is on steady rise and it has resulted in the
growth of the rural market. The market has been growing at 3-4% per annum
adding more than one million new consumers every year and now accounts for
close to 50% of volume consumption of FMCG. The growth rates of lot of
FMCG are higher in rural markets than urban markets. In product categories
like toilet soaps, talcum powder, cooking oil, vanaspati ghee, tea, cigarettes
and hair oil, the share of rural market is more than 50%. The estimated annual
business from rural markets was Rs 1,23,000 crore, comprising Rs 65,000 crore
of FMCG, Rs 5,000 crore of durables, Rs 45,000 crore of agricultural inputs
including tractors and Rs 8,000 crore of two-wheelers and fourwheelers.
8
9. Marketing Management
Twenty nine per cent of the rural people own cars, 27 per cent own colour
televisions, 24 per cent own refrigerators and 10 per cent own washing
machines, which points to the untapped potential in the rural areas.
Table 2 : Rural FMCG Market Projections
Year
2011
2020
Turnover (in lakh crores)
1.25
4.00
Fast Moving Consumer Goods (FMCG) will be witnessing more than 50% of
growth in its Rural and Semi Urban Segments by 2012 which in totality is
projected to grow at an CAGR of 10% to carry forward its market size to over
Rs.1,06,300 crore from present level of Rs. 87,900 crore, according to an
analysis carried out by the Associated Chambers of Commerce and Industry of
India (ASSOCHAM).
General Strategies by FMCG Majors for Rural market
More product variants
More product categories
Attractive price points
Different marketing and distribution channels
9
10. Marketing Management
HINDUSTAN UNILEVER LIMITED
Rural Markets
While general trade encompasses both urban and rural markets, serving
customers in more remote areas of India poses unique challenges. Rural
markets are scattered over large areas with low per capita consumption rates.
While the aggregate potential of rural markets is large, the potential of each of
the 600+ dispersed markets is very low. As well, rural markets are not
connected to urban centers by air or rail, with road connectivity poor at best.
Accessing these markets, even when feasible, means additional logistics costs
to HUL.
Despite the roadblocks, conquering the rural markets is a must for HUL. One
out of every eight people on this planet lives in an Indian village. In comparison
to the urban market, which consists of roughly 250 million people, the rural
market is 775 million people across 638,000 villages. Within ten years, per
household consumption in rural India is forecasted to equal today’s urban
levels.
To penetrate the rural markets, HUL launched a unique four tier distribution
system. Markets were segmented based on their accessibility and business
potential.
Marketing Strategies
Direct Coverage: HUL appointed a common stockist to service all outlets
within a town and sell a limited selection of the brand portfolio. Towns
consisted of populations of under 50,000 people.
Indirect Coverage: HUL targeted retailers in accessible villages close to
larger urban markets. Retail stockists were assigned a permanent route
to ensure that all accessible villages in the vicinity were served at least
once a fortnight.
Streamline: Streamline leveraged the rural wholesale channel
to reach markets inaccessible by road. Star Sellers were
appointed among wholesalers in a particular village. Star
Sellers would purchase stock from a local distributor and
10
11. Marketing Management
then distribute stock to retailers in smaller villages using local means of
transport (e.g. motorcycles, rickshaws).
RURAL MARKETING CAMPAIGNS
Khushiyon ki Doli
Hindustan Unilever (HUL) new
target for 2010 is to reach – the
most happening part of India –
the rural India. The latest brand
building initiative by the HUL in
the rural India is “Khushiyon Ki
Doli”.The main motto behind
the campaign is to create
awareness with the use of
technology and engaging the
common mass. And Hardaurpur
is the first destination.
There are four set of dolis or palkis being moved all around the village.
Equipments like LCD TV, a DVD Player and a small generator is there in each of
these dolis or palkis. The village housewives are the main target of audience.
The wide ranges of HUL’s products commercials are being shown in these
LCD’s. as a common human habit it has been observed that the rural masses
always look upon the urban mass and what about the urban mass? They tend
to look upon the metro lot.
HUL new campaign can easily grasp the rural housewives and children. Soon
the LCD’s are on these rural crowds stands awe keeping close view of the video
with full concentration as its something new for them. They hardly get the
chance to have a view to all these. In the urban people hardly look at the
commercials. Here makes the final difference. These commercials of Surf Excel,
Close Up toothpaste to Huggies diapers etc all have enchanted the rural lot. It’s
more effecting to them.
To make the campaign more interesting HUL has also organised few games at
the end with prizes. And again there is commercialisation. The winners are
given with special offers on bundles products few sachet as prizes.
11
12. Marketing Management
Next move by the HUL is to the local retailers big or small. Brand building is the
main target for HUL. HUL tried to engage these retailers with new purchase of
the merchandize and new sale of the stock to them.
Project Shakti
Project Shakti is a rural distribution initiative of
Hindustan Unilever Limited (HUL) that targets
small villages populated by less than 5,000
individuals. It is a unique win-win initiative that
catalyses rural affluence even as it benefits
business. Project Shakti benefits business by
significantly enhancing HUL's direct rural reach,
and by enabling HUL's brands to communicate
effectively in media-dark regions. It also impacts
society by creating livelihood opportunities for
underprivileged rural women. Project Shakti
impacts society in two ways - the Shakti Entrepreneur programme creates
livelihood opportunities for underprivileged rural women.
As competition is increasing day by day, its difficult to maintain the leader
position & to further strengthen the distribution network HUL made the
project called Project Shakti which will serve the following purpose:
1. To Reach
Small scattered settlements and poor infrastructure make
distribution difficult.
Over 5,00,000 villages not reached directly by villages.
2. To Communicate
Low literacy hampers effectiveness of print media.
Poor media reach – 500 million Indian lack TV & Radio.
3. To Influence
Low category penetration, consumption.
4. Awareness
Per capita consumption is 33% of Urban level.
12
13. Marketing Management
BrookeBond Sehatman strategy for a healthy initiative in Rural India
Thus began extensive research using the company's internal tracker called
Living Standards Measure (LSM) to determine the success of the product. LSM
can range anywhere between one and 18 - a higher score shows a
higher living standard. For Sehatmand, HUL needed to target LSM 14 individuals (those who cannot afford their own mode of transport)
the bulk of who reside in rural areas.
Research reiterated what HUL felt. India has over 200 million
undernourished people, the largest in any country. Nearly 70 per cent of the
population is deficient in iron, vitamins and minerals. But with growing
awareness, research showed that these people were concerned about their
access to supplements.
"Tea is a widely consumed product with 95 per cent penetration."
Differentiating factors
Taste too has been given priority based on geographic preferences. "Taste
palates vary across the country, which is why tea has largely been a regional
product. So, Sehatmand in Uttar Pradesh will not taste the same as in
Maharashtra," Srinivas says, thus, for each region the company has come out
with a unique taste, colour and aroma. For instance, South India has a strong
preference for strong and dark tea, while North India is inclined towards taste
and aroma rather than colour. HUL has paid close attention to these nuances.
Restructuring Distribution Channels
HLL has also established a single distribution channel by consolidating
categories. The channel seeks to build a network of sub-stockists. In 2003,
about 6000 such sub stockists were appointed to service 50,000villages with a
total population of 250 million.
LIFEBOUY SWASTHYA CHETNA PROGRAMME
13
14. Marketing Management
Lifebuoy's “Swasthya Chetna” (LSC) was a five-year health and hygiene
education program initiated by Hindustan Lever Limited (HLL), the Indian arm
of the fast moving consumer goods (FMCG) major, Unilever. The program was
formally launched in 2002, in eight states across India.
The objective of this program was to educate around 200 million people in
rural and urban areas about the importance of adopting good 'health and
hygiene practices. The program spread awareness about germs and their
adverse effects on health, and how proper 'health and hygiene practices, such
as bathing and washing hands with soap could prevent diseases like
diarrhoea.
According to HLL, LSC was not a philanthropic activity, but a marketing
program with a social benefit. HLL sought to grow the Lifebuoy brand in India
by attracting those consumers who never used soap. In the process, the
company sought to bring about a behavioral change by convincing people to
use soaps more frequently, thus creating more users for its brand. This
program was also seen as a successful case for public-private partnership.
14
15. Marketing Management
PROCTER & GAMBLE
Strategies
SANGEETA BHABHI AND KAMYAB JODI INITIATIVE
Bhabhi is no relation to her infamous online
character, but an icon created by consumer goods
major Procter & Gamble to hardsell its stuff in rural
India.
After a two year long push into the hinterland, P&G
has come up with a new addition to its marketing
strategy in the form of a character called Sangeeta
Bhabhi, a dedicated housewife. The personality was
conceived to push P&G’s leading brands, Tide and
Head & Shoulders as a dual proposition called ‘kamyab jodi’ in rural areas of
the country. After much deliberation over the eight to nine categories that
P&G operates in, marketers picked the detergent brand Tide and shampoo
Head & Shoulders as the focus in this particular rural initiative.
Last March, more than 100 villages in central UP were
covered as part of the pilot stage of the ‘kamyab jodi’
initiative. The exercise involved teams narrating Sangeeta
Bhabhi’s story, an educated married woman, who highlights
the benefits of using the two brands. Sandeep Bansal,
country head - Xpanse, the agency handling the particular
rural activation, says the particular style was used to
communicate the value add proposition of the brands. “Tide is a value added
brand priced higher than the regular brands. The challenge was to
communicate it to the target audience on the benefits of using a brand
superior in quality,” explains Bansal.
15
16. Marketing Management
AMBITIOUS STRATEGIES OF SOME OF THE MAJOR COMPETITORS
CavinKare
Growth Highlights
Chennai-based CavinKare Limited has launched the Fairever skincare
cream. taking the dominant. HLL's Fair & Love!)' by surprise. Fair &
Lovely had a 97% market share but Fairever
has already garnered a good 14%share of the
roughly Rs. 650 crore fairness cream market.
The company has also entered the toilet soap
market with the launch of Meera herbal soap.
It is planning to introduce a range of other
soap brands as well as detergents. Thus
directly competing with Nirma. Procter and
Gamble (P&G) and HLL.
In the hair care segment too. It launched its Chik brand through the
small packaging sachet route and has picked up a sizeable market sharerough!)' 15%of the RS.840 crore shampoo market - in just two years.
Strategy
ACQUISITION STRATEGY - It has decided that apart from an organic
growth. it would even take to the brand
acquisition route.
PRODUCT INNOVATION - CavinKare is
also trying innovations in pricing and
packaging areas. For example, In May
2001 it launched a single-use perfume
Spinz Singlez priced at Rs. 1.50 per
sachet. This is expected to drive usage
16
17. Marketing Management
and volumes by expanding the Rs. 66 crore category. Current. It is
estimated that only one percent of the population use perfumes. Chik's
shampoo sachets priced at 50 paise have already created waves in the
market. Within ayear of its launch. the shampoo penetration in the
country grew from 17.90% to 19.4%.
R&D and BUDGET ALLOCATION – Today, the company spends around 4%
of its turnover on R&D and close to 25% on advertising and marketing
while constant upgrading its offerings based on consumer feedback.
LEARNING FROM PAST - It has employee forums like 'cross functional
teams' which discuss and plan new product developments while sharing
learning and insights from its successes and failures. The company also
records its brand histories on compact disks for the benefit of new
employees.
17
18. Marketing Management
DABUR
Strategies
Project Astra
Shopkeepers selling Dabur India's consumer products would now learn
marketing through role-plays staged by professional actors at their shops. As
part of a recent initiative titled Astra,
advanced sales training for retail
ascendance, FMCG major has recruited 75
sales and HR managers across the country
who would educate over 2,000 distribution
channel partners of the firm about the
complexities of sales and distribution
through the audio-visual medium in 5
vernacular languages since 75% of its sales
comes from Rural market only, they are
Bengali, Tamil, Telugu, Malayalam and Kannada. Dabur needed to bring
awareness among the distributors and a standardisation into our system across
India and so Astra was created.
Events and Contests
India's largest hair oil brand
Dabur Amla Hair Oil is hosting
the first-ever Dabur Asli Amla
Star Ki Khoj – a unique contest
to identify the girl with the best
hair across India. The winner of
this contest in each city round
will be featured in an advertising
campaign along with Bollywood
celebrity and Dabur Amla Hair
Oil Brand Ambassador Rani Mukherjee.
18
