Hul - Fmcg Customer Preference and Brand Relationship

SUMMER Training

On

“Customer Preference and Brand Relationship for FMCG PRODUCTS (HUL)”

A Report submitted towards partial fulfillment of the reqirement of Degree of Master of Business Administration
GGSIP University, DELHI

Submitted To Submitted By
Ms. RAMANDEEP SINGH
Faculty Guide BBA-2011-2014 Roll No.11821101711

INSTITUTE OF INFORMATION TECHNOLOGY & MANAGEMENT
D-29, INDUSTRIAL AREA, JANAKPURI, NEW DELHI
DECLARATION

I, Ramandeep Singh, student of Bacholar of Business Administration from IITM, D-29, Industrial Area, Janakpuri, New Delhi hereby declare that I have completed Report on “Customer Preference & Brand Relationship for FMCG Products” as part of the course requirement.

RAMANDEEP SINGH

ACKNOWLEDGEMENT

My sincere thanks to my faculty Guide Mrs who has been a constant source of inspiration at every stage of the project and has encouraged me with his valuable suggestions.

I would also like to thank mr. Shashank Shekhar, Branch Head, HUL, Gurgaon for his valuable guidance and support. I also thank the people from HUL who gave me proper knowledge about the company.

I have put in my best efforts to make this project so informative and understandable as possible. Every effort has been made to enhance the quality of work. However, I owe the sole responsibility of the shortcomings if any, in the study.

RAMANDEEP SINGH

PREFACE

The success of any business entity solely depends on how effectively does it utilizes its optimum resources and how soon does it make arrangements for the removal of the customer’s grievances. Moreover, the company should always be ready to make necessary changes according to the requirement in order to attract more customers so as to maintain a substantial growth in the market. The topic given to me was:

“Customer Preference and brand relationship for fmcg products”

I have tried to put my best efforts to complete this task on the basis of skill that I have achieved during my studies in the institute.

I have tried to put my maximum effort to get the accurate statistical data. If there is any error or any mistake in collecting the data, please ignore it.

Contents

|Sr. No. |Topics |
|1 |Executive Summary |
|2 |Industry Profile |
|3 |Company profile. |
|4 |Research Problem and its background |
|5 |Review of Literature. |
|6 |Objectives and Scope |
|7 |Research Methodology |
|8 |Data Presentation and Analysis |
|9 |Findings |
|10 |Suggestion |
|11 | Conclusion |
|12 | Limitations and scope for further studies |
|13 | Annexure |
| |References |
| |Questionnaire, pie charts, graphs |

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The main objective of the project is to get the full knowledge of the products of the HUL and what are they doing to get the customer loyalty, to maintain their market. This is also to find the preferences of customer and their market knowledge and product information, information about the presence of the rival of HUL and all the other options they have in the market. What are the techniques they adopt to know about the preferences and changing needs of the customer?

HUL are also looking to tap the market in rural sector, so they also taking into consideration the needs and wants of the people there. They are also studying the consumption habits of the rural people. Like most of them are daily wage earners or small peasants, so they are studying the buying patterns of them also.

In country like India, where the 70% of the people live in rural area, the rural market holds a lot of marketing potential. There is a wide spread difference in the standard of living between urban and rural India. In order to launch products and develop advertising for rural market there is a need to understand both the rural context and also the consumer very well. Promotion of brands in rural markets requires the special measures. Due to the social and backward condition the personal selling efforts have a challenging role to play in this regard. The word of mouth is an important message carrier in rural areas. Infact the opinion leaders are the most influencing part of promotion strategy of rural promotion efforts. The experience of agricultural input industry can act as a guideline for the marketing efforts of consumer durable and non-durable companies. Relevance of Mass Media is also a very important factor. The strong Indian brands have strong brand equity, consumer demand-pull and efficient and dedicated dealer network which have been created over a period of time. The rural market has a grip of strong country shops, which affect the sale of various products in rural market. The companies are trying to trigger growth in rural areas. They are identifying the fact that rural people are now in the better position with disposable income. The low rate finance availability has also increased the affordability of purchasing the costly products by the rural people. Marketer should understand the price sensitivity of a consumer in a rural area. This research paper will be therefore an attempt to study the brand promotion in the rural market and the overall potential of the rural market. Branding correlates with Image Building in an organization vis-à-vis its products produced/services rendered. In the vicinity of today 's Marketing scenario along with advancement in technology, Brand Management is the order of the day. In the process of branding, the aspect of brand activation at ATL (above the level) and BTL (below the level) makes a vital contribution for the marketing journey. To attain a safe platform in Brand activation, the Marketing Managers pay attention and focus in a diligent manner on the value based credentials of the users in the Marketing arena. A full-fledged dedicated team with multi focused thoughts only can do the needful for the successful brand management. Good branding strikes a chord with viewers help them relate with the product and reflect their aspirations. The studies suggest that there has been extra-ordinary growth in this sector and the trend is likely to continue over a period of tie as the market is in the very initial stages of the life cycle.

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TOR

Products which have a quick turnover, and relatively low cost are known as Fast Moving Consumer Goods (FMCG). FMCG products are those that get replaced within a year. Examples of FMCG generally include a wide range of frequently purchased consumer products such as toiletries, soap, cosmetics, tooth cleaning products, shaving products and detergents, as well as other non-durables such as glassware, bulbs, batteries, paper products, and plastic goods. FMCG may also include pharmaceuticals, consumer electronics, packaged food products, soft drinks, tissue paper, and chocolate bars.
India’s FMCG sector is the fourth largest sector in the economy and creates employment for more than three million people in downstream activities. Its principal constituents are Household Care, Personal Care and Food & Beverages. The total FMCG market is in excess of Rs. 85,000 Crores. It is currently growing at double digit growth rate and is expected to maintain a high growth rate. FMCG Industry is characterized by a well established distribution network, low penetration levels, low operating cost, lower per capita consumption and intense competition between the organized and unorganized segments.

The Rs 85,000-crore Indian FMCG industry is expected to register a healthy growth in the third quarter of 2008-09 despite the economic downturn. The industry is expected to register a 15% growth in Q3 2008-09 as compared to the corresponding period last year. Unlike other sectors, the FMCG industry did not slow down since Q2 2008. the industry is doing pretty well, bucking the trend. As it is meeting the every-day demands of consumers, it will continue to grow. In the last two months, input costs have come down and this will reflect in Q3 and Q4 results. Market share movements indicate that companies such as Marico Ltd and Nestle India Ltd, with domination in their key categories, have improved their market shares and outperformed peers in the FMCG sector. This has been also aided by the lack of competition in the respective categories. Singleproduct leaders such as Colgate Palmolive India Ltd and Britannia Industries Ltd have also witnessed strength in their respective categories, aided by innovations and strong distribution. Strong players in the economy segment like Godrej Consumer Products Ltd in soaps and Dabur in toothpastes have also posted market share improvement, with revived growth in semi-urban and rural markets.
FG SECTOR
Industry Category and Products
Household Care
Personal Wash:- The market size of personal wash is estimated to be around Rs. 8,300 Cr. The personal wash can be segregated into three segments: Premium, Economy and Popular. The penetration level of soaps is ~92 per cent. It is available in 5 million retail stores, out of which, 75 per cent are in the rural areas. HUL is the leader with market share of ~53 per cent; Godrej occupies second position with market share of ~10 per cent. With increase in disposable incomes, growth in rural demand is expected to increase because consumers are moving up towards premium products. However, in the recent past there has not been much change in the volume of premium soaps in proportion to economy soaps, because increase in prices has led some consumers to look for cheaper substitutes.
Hindustan Unilever
Lim- the biggest
Detergents:-
The size of the detergent market is estimated to be Rs. 12,000 Cr. Household care segment is characterized by high degree of competition and high level of penetration. With rapid urbanization, emergence of small pack size and sachets, the demand for the household care products is flourishing. The demand for detergents has been growing but the regional and small unorganized players account for a major share of the total volume of the detergent market. In washing powder HUL is the leader with ~38 per cent of mar-ket share. Other major players are Nirma, Henkel and Proctor & Gamble.

Personal Care
Skin Care:-
The total skin care market is estimated to be around Rs. 3,400 Cr. The skin care market is at a primary stage in India. The penetration level of this segment in India is around 20 per cent. With changing life styles, increase in disposable incomes, greater product choice and availability, people are becoming aware about personal grooming. The major players in this segment are Hindustan Unilever with a market share of ~54 per cent, fol-lowed by CavinKare with a market share of ~12 per cent and Godrej with a market share of ~3 per cent.

Hair Care:-
The hair care market in India is estimated at around Rs. 3,800 Cr. The hair care market can be segmented into hair oils, shampoos, hair colorants & conditioners, and hair gels. Marico is the leader in Hair Oil segment with market share of ~ 33 per cent; Dabur occu-pies second position at ~17 per cent.

Shampoos:-
The Indian shampoo market is estimated to be around Rs. 2,700 Cr. It has the penetration level of only 13 per cent in India. Sachet makes up to 40 per cent of the total shampoo sale. It has low penetration level even in metros. Again the market is dominated by HUL with around ~47 per cent market share; P&G occupies second position with market share of around ~23 per cent. Antidandruff segment constitutes around 15 per cent of the total shampoo market.
The market is further expected to increase due to increased marketing by players and availability of shampoos in affordable sachets.
The Skin Care expected to
FMCG SECT OR
Oral Care:-
The oral care market can be segmented into toothpaste - 60 per cent; toothpowder - 23 per cent; toothbrushes - 17 per cent. The total toothpaste market is estimated to be around Rs. 3,500 Cr. The penetration level of toothpowder/toothpaste in urban areas is three times that of rural areas. This segment is dominated by Colgate-Palmolive with market share of ~49 per cent, while HUL occupies second position with market share of ~30 per cent. In toothpowders market, Colgate and Dabur are the major players. The oral care market, es-pecially toothpastes, remains under penetrated in India with penetration level ~50 per cent.

Food & Beverages
Food Segment :-
The foods category in FMCG is gaining popularity with a swing of launches by HUL, ITC, Godrej, and others. This category has 18 major brands aggregating Rs. 4,600 Cr. Nestle and Amul slug it out in the powders segment. The food category has also seen innovations like softies in ice creams, ready to eat rice by HUL and pizzas by both GCMMF and Godrej Pillsbury.

Tea :-
The major share of tea market is dominated by unorganized players. More than 50 per cent of the market share is capture by unorganized players. Leading branded tea players are HUL and Tata Tea.

Coffee :-
The Indian beverage industry faces over supply in segments like coffee and tea. However, more than 50 per cent of the market share is in unpacked or loose form. The major players in this segment are Nestlé, HUL and Tata Tea.

Growth Prospect
Large Market
India has a population of more than 1.150 Billions which is just behind China. According to the estimates, by 2030 India population will be around 1.450 Billion and will surpass China to become the World largest in terms of population. FMCG Industry which is directly related to the population is expected to maintain a robust growth rate.
According to[pic] of India, the
SECTOR
Spending Pattern
An increase is spending pattern has been witnessed in Indian FMCG market. There is an upward trend in urban as well as rural market and also an increase in spending in organ-ized retail sector. An increase in disposable income, of household mainly because of in-crease in nuclear family where both the husband and wife are earning, has leads to growth rate in FMCG goods.

Changing Profile and Mind Set of Consumer
People are becoming conscious about health and hygienic. There is a change in the mind set of the Consumer and now looking at “Money for Value” rather than “Value for Money”. We have seen willingness in consumers to move to evolved products/ brands, because of changing lifestyles, rising disposable income etc. Consumers are switching from economy to premium product even we have witnessed a sharp increase in the sales of packaged water and water purifier. Findings according to a recent survey by A. C. Nielsen shows about 71 per cent of Indian take notice of packaged goodsʹ labels containing nutritional information compared to two years ago which was only 59 per cent.

Advantages To The Sector
Governmental Policy
Indian Government has enacted policies aimed at attaining international competitiveness through lifting of the quantitative restrictions, reducing excise duties, automatic foreign in-vestment and food laws resulting in an environment that fosters growth. 100 per cent ex-port oriented units can be set up by government approval and use of foreign brand names is now freely permitted.
India is second largest
OR
Central & State Initiatives
Recently Government has announced a cut of 4 per cent in excise duty to fight with the slowdown of the Economy. This announcement has a positive impact on the industry.
But the benefit from the 4 per cent reduction in excise duty is not likely to be uniform across FMCG categories or players. The changes in excise duty do not impact cigarettes (ITC, Godfrey Phillips), biscuits (Britannia Industries, ITC) or ready-to-eat foods, as these prod-ucts are either subject to specific duty or are exempt from excise. Even players with manu-facturing facilities located mainly in tax-free zones will also not see material excise duty savings. Only large FMCG-makers may be the key ones to bet and gain on excise cut.

Foreign Direct Investment (FDI)
Automatic investment approval (including foreign technology agreements within specified norms), up to 100 per cent foreign equity or 100 per cent for NRI and Overseas Corporate Bodies (OCBs) investment, is allowed for most of the food processing sector except malted food, alcoholic beverages and those reserved for small scale industries (SSI).
There is a continuous growth in net FDI Inflow. There is an increase of about 150 per cent in Net Inflow for Vegetable Oils & Vanaspati for the year 2008.
FMCG SECTOR[pic]

Market Opportunities
Vast Rural Market
Rural India accounts for more than 700 Million consumers, or ~70 per cent of the Indian population and accounts for ~50 per cent of the total FMCG market. The working rural population is approximately 400 Millions. And an average citizen in rural India has less then half of the purchasing power as compare to his urban counterpart. Still there is an untapped market and most of the FMCG Companies are taking different steps to capture rural market share. The market for FMCG products in rural India is esti-mated ~ 52 per cent and is projected to touch ~ 60 per cent within a year. Hindustan Unilever Ltd is the largest player in the industry and has the widest market coverage.

Export - “Leveraging the Cost Advantage”
Cheap labor and quality product & services have helped India to represent as a cost ad-vantage over other Countries. Even the Government has offered zero import duty on capital goods and raw material for 100% export oriented units. Multi National Companies out-source its product requirements from its Indian company to have a cost advantage.
India is the largest producer of livestock, milk, sugarcane, coconut, spices and cashew apart from being the second largest producer of rice, wheat, fruits & vegetables. It adds a cost advantage as well as easily available raw materials.

Sectoral Opportunities
Major Key Sectoral opportunities for Indian FMCG Sector are mentioned below:

Dairy Based Products
India is the largest milk producer in the world, yet only around 15 per cent of the milk is processed. The organized liquid milk business is in its infancy and also has large long-term growth potential. Even investment opportunities exist in value-added products like desserts, puddings etc.

Packaged Food
Only about 10-12 per cent of output is processed and consumed in packaged form, thus highlighting the huge potential for expansion of this industry.

Oral Care
The oral care industry, especially toothpastes, remains under penetrated in India with penetration rates around 50 per cent. With rise in per capita incomes and awareness of oral hygiene, the growth potential is huge. Lower price and smaller packs are also likely to drive potential up trading.

Beverages
Indian tea market is dominated by unorganized players. More than 50% of the market share is capture by unorganized players highlighting high potential for organized players.

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2009
F

MCG SECTOR
Company Prospects
Hindustan Unilever Limited
• Unilever is lowering its expenditure on packaging across its portfolio of food brands as part of a wider cost-cutting drive. HUL has pared down the colour palette used for print-ing across many products. The system has been used to reduce printed packaging costs for Unileverʹs products. It is also eco-friendly because it reduces waste in the printing process. HUL is taking different steps to reduce the cost and increase the margin.

• Hindustan Unilever’s product - Pureit (a water purifier) has received the UNESCO Water Digest Water Award 2008-2009 in the category of best domestic non-electric water puri-fier. Pureit received the award for outstanding contribution in the field of water in India. The product is available across 21 Indian states and has reached more than 1 million homes in India giving them access to microbiologically safe drinking water. Pureit’s performance has been tested by leading international & national medical, scien-tific & public health institutions and meets the germ-kill criteria of the Environmental Pro-tection Agency, the drinking water regulatory agency in the USA.

Procter & Gamble Hygiene & Health Care Limited (P&G)
• The Company has 21 product categories out of which only 8 product have presence in India. The company is planning to launch the rest 13 product in India. The company expects to see a growth in other categories.

• The company has an aggressive plan to set up 20 new factories across the World out of which 19 is expected to come in emerging markets and most of them would be seen in Brazil, Russia, India, and China (BRIC) nations.

• Whisper which is one of the company’s power brands has recorded 50 per cent market share in urban India.

Godrej Consumer Products Limited (Godrej)
• The Board of Directors of Godrej Consumer Products Limited (GCPL) has approved the acquisition of 50 per cent stake of its joint venture partner SCA Hygiene Products’ stake in Godrej SCA Hygiene Limited. After the transaction, the Joint Venture which owns the ‘Snuggy’ brand of baby diapers will become a 100 per cent subsidiary of GCPL.

• Godrej Consumer Products Limited has acquired 100 per cent stake in the Kinky Group Limited, South Africa. Kinky is among one of the largest brand into hair segment with product portfolio.
2009
FMCG SECTOR
Dabur India Limited (Dabur)
• Dabur has entered into the malted food drink market with the launch of a new health drink “Dabur Chyawan Junior”. According to the company, they expect to capture a market share of 10 per cent of the Rs. 1,900 Crores malted food drink market over the next two years.

• Dabur has acquired 72.15 per cent of Fem Care Pharma Ltd (FCPL), a leading player in the women’s skin care products market, for Rs 203.7 Crores in an all-cash deal. The Company is expected to create synergy by this deal.

• Dabur got approval from Government of Himachal Pradesh to set up another medicine manufacturing unit. The project has an expected investment of Rs. 130 Crores.

Colgate-Palmolive (India) Limited
• Colgate Palmolive (India) Ltd, which is currently holding 75 per cent of the share capital of SS Oral Hygiene Products Private Ltd, Hyderabad, has acquired the remaining 25 per cent share capital from the local shareholders at an aggregate price of Rs 77.70 lakh. Consequently, SS Oral Hygiene Products has become a wholly owned subsidiary of the company. Nestle India Limited
• Nestle is planning to invest Rs 6 billion in India in 2009 for expansion of its business in the country.The company which has allotted an investment of Rs 3 billion in the Indian market in 2008, would be doubling the investment in 2009 as part of its business strategy. Nestle
International is reinvesting and expanding in India and Nestle India will have all the financial resources to expand and grow from the parent company.

• Nestle India reported a good increase in its standalone net profit for the second quarter.During the quarter, the profit of the company rose 26.54% to Rs 1,210.90 million from Rs 956.90 million in the same quarter, last year. The company posted earnings of Rs 12.56 a share during the quarter, registering 26.61% growth over prior year period. Net sales for the quarter rose 23.45% to Rs 10,356.30 million, while total income for the quarter rose 23.78% to Rs 10,423.40 million, when compared with the prior year period.

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Hindustan Unilever Limited (HUL) is India 's largest Fast Moving Consumer Goods Company, touching the lives of two out of three Indians with over 20 distinct categories in Home & Personal Care Products and Foods & Beverages. They endow the company with a scale of combined volumes of about 4 million tonnes and sales of Rs.10,000 crores.

HUL is also one of the country 's largest exporters; it has been recognized as a Golden Super Star Trading House by the Government of India.

HUL 's brands - like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond 's, Sunsilk, Clinic plus, Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, Knorr-Annapurna, Kwality Wall 's – are household names across the country and span many categories - soaps, detergents, personal products, tea, coffee, branded staples, ice cream and culinary products. They are manufactured over 40 factories across India. The operations involve over 2,000 suppliers and associates. HUL 's distribution network comprising about 4,000 redistribution stockists, covering 6.3 million retail outlets reaching the entire urban population, and about 250 million rural consumers. HUL has traditionally been a company, which incorporates latest technology in all its operations. The Hindustan Unilever Research Centre (HLRC) was set up in 1958, and now has facilities in Mumbai and Bangalore. HLRC and the Global Technology Centers in India have over 200 highly qualified scientists and technologists, many with post-doctoral experience acquired in the US and Europe. HUL believes that an organization’s worth is also in the service it renders to the community. HUL is focusing on health & hygiene education, women empowerment, and water management. It is also involved in education and rehabilitation of special or underprivileged children, care for the destitute and HIV-positive, and rural development. HUL has also responded in case of national calamities / adversities and contributes through various welfare measures, most recent being the village built by HUL in earthquake affected Gujarat, and relief & rehabilitation after the Tsunami caused devastation in South India. In 2001, the company embarked on an ambitious programme, Shakti. Through Shakti, HUL is creating micro-enterprise opportunities for rural women, thereby improving their livelihood and the standard of living in rural communities. Shakti also includes health and hygiene education through the Shakti Vani Programme, and creating access to relevant information through the iShakti community portal. The program now covers 15 states in India and has over 31,000 women entrepreneurs in its fold, reaching out to 100,000 villages and directly reaching to 150 million rural consumers. By the end of 2010, Shakti aims to have 100,000 Shakti entrepreneurs covering 500,000 villages, touching the lives of over 600 million people. HUL is also running a rural health programme – Lifebuoy Swasthya Chetana. The programme endeavors to induce adoption of hygienic practices among rural Indians and aims to bring down the incidence of diarrhea. It has already touched 70 million people in approximately 15000 villages of 8 states. The vision is to make a billion Indians feel safe and secure. If Hindustan Unilever straddles the Indian corporate world, it is because of being single-minded in identifying itself with Indian aspirations and needs in every walk of life.

The mission that inspires HUL 's 36,000 employees, including over 1,350 managers, is to "add vitality to life." HUL meets everyday needs for nutrition, hygiene, and personal care with brands that help people feel good, look good and get more out of life. It is a mission HUL shares with its parent company, Unilever, which holds 51.55% of the equity. The rest of the shareholding is distributed among 380,000 individual shareholders and financial institutions.

Over the last three years the company has embarked on an ambitious programme, Shakti. Through Shakti, HUL is creating micro-enterprise opportunities for rural women, thereby improving their livelihood and the standard of living in rural communities. Shakti also includes health and hygiene education through the Shakti Vani Programme, and creating access to relevant information through the iShakti community portal. The programme now covers about 50,000 villages in 12 states. HUL 's vision is to take this programme to 100,000 villages impacting the lives of over a 100 million rural Indians.

HUL is also running a rural health programme – Lifebuoy Swasthya Chetana. The programme endeavtheirs to induce adoption of hygienic practices among rural Indians and aims to bring down the incidence of diarrhoea. It has already touched 70 million people in approximately 15000 villages of 8 states. The vision is to make a billion Indians feel safe and secure. If Hindustan Lever straddles the Indian corporate world, it is because of being single-minded in identifying itself with Indian aspirations and needs in every walk of life.

HINDUSTAN UNILEVER LIMITED INDIA’S LARGEST FMCG COMPANY

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PRESENT MARKETING STRATEGY:

Mission:

Hindustan Unilever Limited mission is to add Vitality to life. We meet everyday needs for nutrition, hygiene, and personal care with brands that help people feel good, look good and get more out of life.

Policy:

HUL has earned a reputation for conducting its business with integrity and with respect for the interests of those their activities can affect. This reputation is an asset, just as real as their people and brands.

Their first priority is to be a successful business and that means investing for growth and balancing short-term and long-term interests. It also means caring about their consumers, employees and shareholders, their business partners and the world in which we live.

From HUL Spokesperson “To succeed requires the highest standards of behavior from all of us. The general principles contained in this Code set out those standards. More detailed guidance tailored to the needs of different countries and companies will build on these principles as appropriate, but will not include any standards less rigorous than those contained in this Code.

We want this Code to be more than a collection of high-sounding statements. It must have practical value in their day-to-day business and each one of us must follow these principles in the spirit as well as the letter”.ref: business world magazine.

Obeying the Law

HUL companies and employees are required to comply with the laws and regulations of the countries in which they operate.

Employees

• HUL is committed to diversity in a working environment where there is mutual trust and respect and where everyone feels responsible for the performance and reputation of the company. HUL will recruit, employ and promote employees on the sole basis of the qualifications and abilities needed for the work to be performed.

• HUL are committed to safe and healthy working conditions for all employees. We will not use any form of forced, compulsory or child labour.

• HUL are committed to working with employees to develop and enhance each individual 's skills and capabilities.

• HUL respect the dignity of the individual and the right of employees to freedom of association.

• HUL will maintain good communications with employees through company based information and consultation procedures.

Consumers
HUL is committed to providing branded products and services which consistently offer value in terms of price and quality, and which are safe for their intended use. Products and services will be accurately and properly labelled, advertised and communicated.

Shareholders
HUL will conduct its operations in accordance with internationally accepted principles of good corporate governance. They will provide timely, regular and reliable information on their activities, structure, financial situation and performance to all shareholders.

Business Partners

HUL is committed to establishing mutually beneficial relations with their suppliers, customers and business partners.

In their business dealings they expect their partners to adhere to business principles consistent with their own.

Community Involvement

HUL strives to be a trusted corporate citizen and, as an integral part of society, to fulfill their responsibilities to the societies and communities in which they operate.

Public Activities

HUL companies are encouraged to promote and defend their legitimate business interests. HUL will co-operate with governments and other organisations, both directly and through bodies such as trade associations, in the development of proposed legislation and other regulations which may affect legitimate business interests.

HUL neither supports political parties nor contributes to the funds of groups whose activities are calculated to promote party interests.

The Environment

HUL is committed to making continuous improvements in the management of their environmental impact and to the longer-term goal of developing a sustainable business.

HUL will work in partnership with others to promote environmental care, increase understanding of environmental issues and disseminate good practice.

Innovation
In their scientific innovation to meet consumer needs they will respect the concerns of their consumers and of society. They will work on the basis of sound science, applying rigorous standards of product safety.

Competition
HUL believes in vigorous yet fair competition and supports the development of appropriate competition laws. Their companies and employees will conduct their operations in accordance with the principles of fair competition and all applicable regulations.

Business Integrity

HUL does not give or receive, whether directly or indirectly, bribes or other improper advantages for business or financial gain. No employee may offer, give or receive any gift or payment which is, or may be construed as being, a bribe. Any demand for, or offer of, a bribe must be rejected immediately and reported to management.

HUL accounting records and supporting documents must accurately describe and reflect the nature of the underlying transactions. No undisclosed or unrecorded account, fund or asset will be established or maintained.

Conflicts of Interests

All HUL employees are expected to avoid personal activities and financial interests which could conflict with their responsibilities to the company.

HUL employees must not seek gain for themselves or others through misuse of their positions.

Compliance – Monitoring – Reporting

Compliance with these principles is an essential element in their business success. The Unilever Board is responsible for ensuring these principles are communicated to, and understood and observed by, all employees.

Day-to-day responsibility is delegated to the senior management of the regions and operating companies. They are responsible for implementing these principles, if necessary through more detailed guidance tailored to local needs.

Assurance of compliance is given and monitored each year. Compliance with the Code is subject to review by the Board supported by the Audit Committee of the Board and the Corporate Risk Committee.

Any breaches of the Code must be reported in accordance with the procedures specified by the Joint Secretaries. The Board of Unilever will not criticise management for any loss of business resulting from adherence to these principles and other mandatory policies and instructions.

The Board of Unilever expects employees to bring to their attention, or to that of senior management, any breach or suspected breach of these principles.

Provision has been made for employees to be able to report in confidence and no employee will suffer as a consequence of doing so.

In this Code the expressions 'Unilever ' and 'Unilever companies ' are used for convenience and mean the Unilever Group of companies comprising Unilever N.V., Unilever PLC and their respective subsidiary companies. The Board of Unilever means the Directors of Unilever N.V. and Unilever PLC’.ref:THE NEWS

Envoirment policy

Hindustan Unilever Limited (HUL) supplies high quality goods and services to meet the daily needs of consumers and industry. In doing so, the Company is committed to exhibit the highest standards of corporate behaviour towards its consumers, employees, the societies and the world in which we live.

The company recognises its joint responsibility with the Government and the Public to protect environment and is committed to regulate all its activities so as to follow best practicable means for minimising adverse environmental impact arising out of its operations.

The company is committed to making its products environmentally acceptable, on a scientifically established basis, while fulfilling consumers ' requirements for excellent quality, performance and safety.

The aim of the Policy is to do all that is reasonably practicable to prevent or minimise, encompassing all available knowledge and information, the risk of an adverse environmental impact arising from processing of the product, its use or foreseeable misuse.

This Policy document reflects the continuing commitment of the Board for sound Environment Management of its operations. The Policy applies to development of a process, product and services, from research to full-scale operation. It is applicable to all company operations covering its plantations, manufacturing, sales and distribution, research & innovation centres and offices. This document defines the aims and scope of the Policy as well as responsibilities for the achievement of the objectives laid down.

The Vision

Their vision is to continue to be an environmentally responsible organisation making continuous improvements in the management of the environmental impact of their operations.

HUL will achieve this through an Integrated Environment Management approach, which focuses on People, Technology and Facilities, supported by Management Commitment as the prime driver.

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RESEARCH PROBLEM

HUL is facing the problem rather challenges from

✓ Large number of players in the market

✓ Continuous changes in the taste and preferences of the customers such problems were identified as Research Problems and the objective statement was formed on its basis.

The research problem is that of study of rural market– with special emphasis on Customer preference for HUL in rural India through Rural relation. And understanding the process of rural marketing and the underlying problems within and measures taken thereof.

Research to find out following

✓ Acceptability among the customers ✓ Promotional analysis
Rural relation is an organization which is working in rural market for various companies. Who helps them for provide information about product with helps of market research? and helps in companies as end to end users for establish in rural market.

Rural relation worked on project for leading companies like ICICI prudential, HUL, Rasana, and hutch. Rural relation building relationships in rural India with key influencers.

Abstract

In country like India, where the 70% of the people live in rural area, the rural market holds a lot of marketing potential. There is a wide spread difference in the standard of living between urban and rural India. In order to launch products and develop advertising for rural market there is a need to understand both the rural context and also the consumer very well. Promotion of brands in rural markets requires the special measures. Due to the social and backward condition the personal selling efforts have a challenging role to play in this regard. The word of mouth is an important message carrier in rural areas. Infect the opinion leaders are the most influencing part of promotion strategy of rural promotion efforts. The experience of agricultural input industry can act as a guideline for the marketing efforts of consumer durable and non-durable companies. Relevance of Mass Media is also a very important factor.

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

Statistical Glance

A glance at the following statistics will help to get a fair idea of the consumers in Rural India:

1. 46 percent of soft drinks.

2. 49 percent of motorcycles.

3. 59 percent of cigarettes.

4. 18 million TV Sets.

5. 50 percent of 2 million BSNL mobile connections.

6. 53 percent of FMCG products.

7. 59 percent of consumer durables are sold in rural India.

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, as also in several other countries, like China, is still in evolving shape, and the sector poses a variety of challenges, including understanding the dynamics of the rural markets and strategies to supply and satisfy the rural consumers.

Myth-1: Indian rural market is a homogeneous mass.

Reality- it’s a heterogeneous mass. Various tires are present depending on the income like big land lords, Traders small farmers: labor artisans. People belonging to deferent social classes stay in concentric area. So the available product suffice the consumption for everyone.

Myth-2: disposable income is low.

Reality- number of middle class HH”s people(annual income Rs 50,000-2,50,000)for rural sector is 27000000 compared to urban sector 29400000.Rural income CAGR was10.95% compared to 10.74%in urban India between 1970-71 and 1993-94, the disposable income is slightly higher in rural market.

Myth-3: Individual decides about the purchases.

Reality- decision making process is collective. Purchase process- influencer decider and buyer. One who can pay all its different. Marketers must address brand message at all levels. Rural youth bring brand knowledge to Households (HH). Basic awareness about the product brand has to be there in market. This can be done by putting small advertising sheets at the mandis and where the regular mass meets regularly.

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Rural Marketing - A Critical Review:

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.

The success of a brand in the Indian rural market is as unpredictable as rain. It has always been difficult to gauge the rural market. Many brands, which should have been successful, have failed miserably. More often than not, people attribute rural market success to luck. Therefore, marketers need to understand the social dynamics and attitude variations within each village though nationally it follows a consistent pattern looking at the challenges and the opportunities which rural markets offer to the marketers it can be said that the future is very promising for those who can understand the dynamics of rural markets and exploit them to their best advantage. A radical change in attitudes of marketers towards the vibrant and burgeoning rural markets is called for, so they can successfully impress on the 230 million rural consumers spread over approximately six hundred thousand villages in rural India.

What rural market buys?

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

Why Rural Market?

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

The rural market is zooming ahead at around 25 per cent annually. "The rural market is growing faster than urban India now," says Venugopal Dhoot, chairman of the Rs 989 -crore(Rs billion) Videocon Appliances. "The urban market is a replacement and up gradation market today," adds Samsung 's director, marketing, Ravinder Zutshi.

Reasons for improvement of business in rural area?

• Socio-economic changes (lifestyle, habits and tastes, economic status)

• Literacy level (25% before independence – more than 65% in 2001)

• Infrastructure facilities (roads, electricity, media)

• Increase in income

• Increase in expectations

MART, the specialist rural marketing and rural development consultancy has found that 53 per cent of FMCG sales lie in the rural areas, as do 59 per cent of consumer durable sales, said its head Pradeep Kashyap at the seminar. Of two million BSNL mobile connections, 50 per cent went to small towns and villages, of 20 million Rediffmail subscriptions, 60 per cent came from small towns, so did half the transactions on Rediff 's shopping site.

Special features of rural market:

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

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

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

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

Creating brands for rural India

Rural markets are delicately powerful. Certain adaptations are required to cater to the rural masses; they have unique expectation and warrant changes in all four parameters of product, price, promotion and distribution.

A lot is already emphasized on adapting the product and price in terms of packaging, flavoring, etc and in sachets, priced to suit the economic status of the rural India in sizes like Rs.5 packs and Re.1 packs that are perceived to be of value for money. This is a typical penetration strategy that promises to convert the first time customers to repeated customers.

The promotion strategies and distribution strategies are of paramount importance. Ad makers have learnt to leverage the benefits of improved infrastructure and media reach. The television airs advertisements to lure rural masses, and they are sure it reaches the target audience, because majority of rural India possesses and is glued to TV sets!

Distributing small and medium sized packets thro poor roads, over long distances, into deep pockets of rural India and getting the stockiest to trust the mobility is a Herculean task. Giving the confidence those advertisements will support. Sales force is being trained to win the confidence of opinion leaders. Opinion leaders play an important role in popularizing the brand. They sometimes play the role of entry barriers for new products.

The method of promotion needs to be tailored to suit the expectations of the market. Techniques that have proved to be successful are Van campaigns, edutainment films, generating word of mouth publicity through opinion leaders, colorful wall paintings. The Wide reach of television has exposed the otherwise conservative audience to westernization. Panchayat televisions in Tamilnadu carries message that are well received and contribute to community development.

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. This, along with several other related issues, have been subject matter of intense discussions and debate in countries like India and China and focus of even international symposia organized in these countries. Rural markets and rural marketing involve a number of strategies, which include:

• Client and location specific promotion.

• Joint or cooperative promotion.

• Bundling of inputs.

• Partnership for sustainability.

Client and Location specific promotion involves a strategy designed to be suitable to the location and the client. Joint or co-operative promotion strategy involves participation between the marketing agencies and the client. 'Bundling of inputs ' denote a marketing strategy, in which several related items are sold to the target client, including arrangements of credit, after-sale service, and so on. Media, both traditional as well as the modern media, is used as a marketing strategy to attract rural customers. Partnership for sustainability involves laying and building a foundation for continuous and long lasting relationship.

Innovative media can be used to reach the rural customers. Radio and television are the conventional media that are reaching the rural audience effectively. But horse cart, bullock cart and wall writing are the other media, which can carry the message effectively to the rural customers.

Rural marketing is an evolving concept, and as a part of any economy has untapped potential; marketers have realized the opportunity recently. Improvement in infrastructure and reach, promise a bright future for those intending to go rural. Rural consumers are keen on branded goods nowadays, so the market size for products and services seems to have burgeoned. The rural population has shown a trend of wanting to move into a state of gradual urbanization in terms of exposure, habits, lifestyles and lastly, consumption patterns of goods and services. There are dangers on concentrating more on the rural customers. Reducing the product features in order to lower prices is a dangerous game to play.

References:

1. Rural Marketing, Ravindranath V. Badi and Naranyansa V. Badi, Himalaya Publishing, 2004

2. The Hindu - Business Line

3. www.deccanherald.com

4. www.indiantelevision.com

| Rural market for FMCG on upswing - By Business Standard |
|Ruchita Saxena / Mumbai December 27, 2007 |
|Fast moving consumer goods (FMCG) companies can rejoice as the Rs 27,369 crore rural market in the country registered a growth rate of 17 |
|per cent in the first ten months this year. About 34 per cent of the off take for FMCG products came from rural areas. FMCG companies are |
|trying to tap the rural market with more vigor, given the fact that nearly 70 per cent of the country‘s population lives in villages. |
|The estimated number of households that are using FMCG products in rural India have grown from 13.6 crore in 2004 to 14.3 crore in 2007. |
|This growth was achieved on an average year-on-year growth of 1.8 per cent in the number of households, which use at least one FMCG |
|product. |
| |
|For some FMCG categories, the penetration levels have remained stagnant over the past three years. In others, the growth has been faster. |
|A study by market research firm IMRB International shows that while the monthly consumption categories comprising detergents and toilet |
|soaps have remained largely stagnant with a 92 per cent penetration, categories such as liquid shampoos have grown from 68 per cent in |
|2004 to 83 per cent in 2007. Moving to higher-value products seems to have happened across categories, from toothpowder to toothpaste or |
|from unbranded to branded products. |
| |
|Manoj K Menon, senior project director, IMRB International (media and panel group), says, “One of the most significant changes includes |
|growing preference towards branded products. For example, in the food and beverages segment, penetration of branded atta has gone up |
|year-on-year by 8 per cent and branded salt by 3 per cent. The penetration of unbranded atta has decreased by 1 per cent and salt by 3 per|
|cent. |
|FMCG companies Hindustan Unilever and ITC have worked on increasing rural penetration through corporate social responsibility projects |
|such as Project Shakti and e-Choupal, respectively. |
|According to Vijay Sharma, head, Project Shakti, the growth in sales from the rural market |
|has been both in value and volume terms. |
|Speaking about his experience of the rural market, he said, ―Through Project Shakti, the company has been implementing programmers that |
|aim at building the market by increasing usage of the categories it is present in. The key here is to educate consumers about improving |
|their lifestyle and our brands play a role in enabling this. For example, Lifebuoy Swasthya Chetana is a rural health and hygiene |
|educational programme. Our Shakti network is growing and the company expects to cover 600 million consumers across 5 lakh villages through|
|one lakh Shakti entrepreneuers by 2010. Currently, Shakti has 45,000 entrepreneurs in the country. |
|Suchitra Potnis, associate director, Client Solutions (a Nielsen company), said,”Store density in rural India is 5.4 stores per thousand |
|persons compared with 10.1 in urban areas. The top-20 categories account for around 70 per cent of the FMCG market. Categories such as |
|batteries and iodised salt have gained a slot among the top-20 in the rural market since the consumption of these categories is higher in |
|rural than urban India.” |
|Rural markets beat cities in FMCG sales growth – The Economic Times, December 8, 2008. |
|Rural consumers are displaying considerable resilience in spends on fast-moving consumer goods (FMCG) despite the economic slowdown, say |
|top industry officials. While overall consumer spends (urban+rural) on FMCG are showing smart rates of growth, the growth in rural markets|
|at 20% plus has overtaken urban markets, which is growing at 17-18%, according to industry estimates. Industry watchers attribute the |
|growth to rise in rural disposable incomes, following three consecutive years of good agricultural growth. Also, top industry officials |
|said the government has pumped in a lot of investments into rural areas. |
|In recent years, FMCG companies have invested significantly in effective distribution and tailoring their products and prices to |
|geographic nuances to increase their return on investment (RoI) geographically. These efforts may now be paying off. AC Nielsen numbers |
|for the April-September 2008 period show that across a wide range of sectors, including skin creams and solotions, hair oils, toothpaste |
|and candies, volume and value growth in rural markets have been significantly higher than urban markets. Skin creams and lotions, for |
|example, grew 26.3% by volumes in rural markets compared with 12.5% in urban markets for the April-September period. In value terms also, |
|rural markets grew faster than their urban counterparts in skin creams and lotions, according to Nielsen numbers. |

Godrej group chairman Adi Godrej said, ―The overall FMCG market, both urban and rural, have recorded robust growth rates. Urban markets have been relatively weaker in some segments because the growth of certain sectors has been affected lately. But good agricultural growth and government focus on these markets have led to higher disposable incomes with rural consumers. Consumer spends on FMCG in urban markets, through both traditional trade and modern trade, have been upbeat in recent months. But modern trade footfalls in Mumbai have been listless in the past few days, owing to the terror attack. However, kiranas, or traditional formats, continue to report robust numbers. Traditional trade contributes over 90-95% of the total FMCG business. Modern trade (formats like Food Bazaar or Spencer‘s) contributes 10% to total FMCG business in metros and around 5% to total industry sales.

CavinKare CMD CK Ranganathan said, “We have been surprised by strong consumer undertones at a time when inflationary trends would have otherwise hit demand. There are no signs of downtrading. Consumer purchases in rural India have been quite impressive in recent months.” Rural India clocked 19.1% growth for hair oils in April-September against 11.4% in urban markets by volume. Similarly, among toothpaste, the all-India rural volume growth was a healthy 17% compared with just 6% in all-India urban markets. The gap in growth rates was even wider among candies. In the April-September period, rural markets registered 26.5% growth against a minuscule 3.6% growth in urban India. It was the same story with value growth.

Dabur CEO Sunil Duggal said, “Everyday products, which are priced at popular price points, have not seen any drop in consumer demand, whether it is urban or rural. But rural market seems to have actually done better, growing at a much faster pace. While the rural growth story has remained completely intact and has even accelerated a bit, the urban market has been affected by lower off takes in modern trade. But we believe the traditional trade should take up the slack.” Companies are now working on stepping up distribution in smaller towns and increasing focus on marketing and operations programme for semi-urban and rural markets. Seventy per cent of the total households in India is in rural areas. Industry watchers say the increased consumption is also the result of a growing middle class base in these markets. The total number of rural household is expected to rise to 153 million in 2009-10 from 135 million in 2001-02, suggesting a huge market.

According to an NCAER report, the numbers belonging to lower middle income‘ group in rural areas is almost double compared with urban areas. This is a large consuming class, constituting 41% of the Indian middle class and having 58% of the total disposable income.

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PRIMARY OBJECTIVE

Customer preference and brand relationship for FMCG product (HUL) in rural India. And make people more brand loyal.

1) To analyze the present promotion strategy of rural brands (HUL) in rural markets.

a. To study the modes of communications used and their effectiveness.

b. To find out the role of promotion in rural sales.

c. To find out the promotional strategies of different players in the market.

2) To measure the success of rural marketing campaign of the brands (HUL) in terms of consumer appreciation.

a. To study the determinants of specification factors which decide the success of rural promotional strategy?

3) To evaluate the effects of adopting the specific brand ambassadors in the rural marketing context.

4) To analyze the market opportunity and potential for existing and new entrants in the rural market.

a. To find the growth of rural market over a period of 5 yrs.

b. To find the behavioral changes in the rural consumers.

The main objective of this project is to find, what are the steps Hindustan Unilever Ltd. is adapting to be market leader and to differentiate itself from its competitors.

What is the steps company is utilizing to find current trend in the market?

Most of the product of HUL comes in the category of convenience products. They are frequently used and bought by the customers. There is large no. of players in the market, who are supplying similar product to the customers. Now, customers have become smart, they have great knowledge of market, product and suppliers. So, they are looking for the product which is providing something extra. HUL has a wide range of product in FMCG sector, covering almost every needs and wants of the customers. It has products for child, young & adult, male & female, etc. So it has to differentiate its products taking into account the needs and demands of all the sectors of the society. Not, only product but it has to look upon the services and feedback from customers also. It should do something to give after sales service and collect feedback from the Customers. The basic objective of this project is as mentioned above to find ways so that HUL remain market leader by considering all the needs & wants and fulfilling their demand.

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Sampling Procedure

A. probability Sample

Stratified random sample: The samples were classified as follow-

Hariyali Kisan bazaar and other big retailers shop

Haat market, taluka bazaar

Village choupal

Village fair &function

General stores

Personal Interview: Shopkeeper and customers, were asked questioned by using questionnaires and recorded additional information.

Analysis Methods

Percentage method: The entire questions in the questionnaire are analyzed from the collected data and they were converted in to percentages with explanations. Percentages were useful in comparing two series of data. During analysis it was difficult in interpreting the difference in the actual counts. But with the use of relative differences, percentages it can be more clearly seen.

Cross Tabulation: It is applicable to data in which both the dependent and in dependent variable appear in categorical form. In a cross tabulation the percentages are usually shown, as well as the actual counts of the number of responses falling in to the different cells of the table. To interpret the cross tabulation analysis the pattern of percentage mentioned across the each row separately.

Methods of research data presentation

Tabular forms: Observations and inferences after each analysis is presented in a table with numerical values. Tables make it easy to understand the findings at a glance than going through the lengthy description.

Graphs: Each finding was presented graphically in the form of pie charts, bar diagrams after analysis for easy references. The main features of frequency distribution are conveniently communicated by representing the frequency distribution in the form of a diagram,

Description: After the analysis of the collected data, interpretations are given at the bottom of the tables. On the basis of the analysis, major findings and suggestions were made.

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For the analysis of data collected through survey work, a series of steps were followed
Which are given in a chronological order:- ➢ Each question of the questionnaire was assigned codes (coding) ➢ Each questionnaire was punched into ms-excel sheet thus forming a data base
Punching)
➢ Further the data was analyzed by using diagrams, graphs, charts etc. ➢ The graphic rating scale and ranking method was used to measure the response and attitude of the customer. ➢ Finally, an effort was made to extract meaningful information from analyzed data, which acted as a base for the recommendations.

MAJOR FINDINGS
The Crisis of Declining Markets
Through the nineties, the FMCG markets grew at almost 15% per annum in value. Suddenly, in 2000, FMCG market growth stalled and then declined for the next four years. It is important to understand why this happened.
The rapid opening up of the economy resulted in many new avenues of expenditure for the consumer’s growing income. A sharp drop in interest rates from 18% to 8% led to explosive demand for consumer durables like white goods, two-wheelers and automobiles. After all, one could drive out of a car showroom in a Maruti 800 with a down payment of only Rs. 2000. The home ownership market grew exponentially as the average age of a home loan borrower dropped from 50 in 1999 to 30 in 2004. Mobile phone ownership and usage exploded due to its amazing lifestyle and convenience benefits as well as lower prices. Entertainment, Leisure and Travel sectors also boomed. The lure of new avenues of expenditure in products and services led to consumers restricting their expanse on FMCG. It is not that they bathed less often or brushed their teeth less often or indeed washed their clothes less often. But they did downtrade to lower priced substitutes from higher quality brands. For example, a consumer buying six tablets of Lux in a month went to buying three of Lux and three cheaper brands. Or a consumer buying Surf Excel for her clothes mixed it with a cheaper powder. As a result of this shift in spending patterns, the FMCG market declined in value in the last four years creating a major challenge for growth.

The new Hindustan Lever: Focused on FMCG

In 2000, 75% of our sales came from FMCG businesses. The rest came from several non-FMCG businesses which were not profitable, and did not offer prospects for long-term leadership. Besides, they were a drain on the core FMCG business, both in terms of resource and focus.
Hindustan Unilever Limited is a part of the €40 billion Unilever Group. The Group has more than 400 brands spanning 14 categories of home, personal care and food products. It has presence in over 100 countries and employs more than 174,000 people
Worldwide.
Over 700 million consumers Covers over 6.3 million retail outlets including direct reach to over 1 million. Over 2000 suppliers and associates.

They decided to disengage from all non-FMCG or commodity businesses. In all, we have divested and discontinued 15 businesses including Animal Feeds, Speciality Chemicals, Nickel Catalyst, Adhesives, Thermometers, Seeds, Mushrooms etc. with sales of Rs.1,750 crores as in 1999.

Today they are a focused on FMCG company with our branded business accounting for over 90% of sales, consisting of 35 brands across 20 categories. These will be their main engines of growth, with higher levels of resource concentration, be it technology, people talent or media spend.

Building blocks of a strong Foods business
In Foods, there is enormous growth potential in leading the evolution of consumers to branded and processed foods. Over the last few years they have focused on putting in place the building blocks of a strong Foods business. Historically their Foods business was fragmented and lacked scale. It was often commoditized with low margins. They recognized that changing food habits would require considerable investment, which the current business simply could not afford. Therefore they divested the non-value added parts like Vanaspati. They have consolidated their portfolio and improved the gross margins by over 13% through product mix and cost reduction. They have also cleared the supply chain of all old stock and geared up for fresh availability on shelf. Today, their Foods business has a healthy gross margin and a supply chain driven by freshness. The Foods business will now invest for growth through relevant innovation.

FMCG still offers enormous potential
As the largest FMCG player it was up to them to reverse the downtrading to realize its true growth potential. They could achieve this by raising the bar and becoming world class in what their brands offered and how they worked. Nothing less would do.

Penetration levels in several of the categories and consumption levels in all of the categories is low by any comparison. Across the world, they are seeing a strong correlation between income levels and the size of FMCG markets. Over the next 10 years, per capita income in India is likely to touch China’s current levels. At those levels, the FMCG market will be over Rs.100,000 crores from a current value of Rs.40,000 crores. This is an opportunity that they have to seize.

Portfolio of Strong Brands
Their main challenge was to reverse the downtrading in the categories and re-establish the relevance of their brands in the mind of the consumer. In 2000, they had 110 brands, many undifferentiated and lacking scale. They chose to focus on 35 power brands covering all consumer appeal and price segments. They are already seeing the benefits. Six brands – Brooke Bond, Lifebuoy, Lux, Fair & Lovely, Rin and Wheel –have emerged as mega brands in the last five years, each with sales of more than Rs.500 crores.

Better Value
The first step was to ensure that they offer world class quality and real differentiation backed by technology to give them the advantage over low priced competition. They have invested over Rs.400 crores, or 5% of sales, in the last three years to upgrade the brands.In several cases they reduced prices to make the brands more affordable. Better quality and more affordable prices have increased the value to the consumer. They have also launched several low unit size and price packs for single use to make the brands more accessible to all income groups. For example, they are the first to introduce a branded toothpaste in a tube at Rs.5 and a branded quality shampoo in a bottle at Rs.5.

Bigger Role in Consumers’ Lives
Perhaps the most significant change has been to move the brands beyond merely making functional claims to playing a bigger and deeper role in the lives of consumers. They had to move from selling a soap or a detergent to something far more important and central to the consumer’s life. How often have we heard someone say, “A soap is a soap is a soap!” Or indeed, “All detergents clean clothes as well”.

In the case of Lifebuoy, it was only when they associated it with the promise of health and protection against disease that it claimed a larger space in the consumer’s mind. It moved from being a mere soap to a health essential. Today Lifebuoy, their oldest brand, has grown at over 15% for the last three years.

Similarly, in the laundry market, Surf Excel went well beyond the benefit of ‘great clean’ by saving two buckets of water with every wash. Imagine the importance of that benefit to consumers in cities, who often get running water for only a couple of hours a day. Surf Excel is one of their fastest growing brands today.

Both Lifebuoy and Surf Excel have succeeded because they are relevant to two key concerns of the Indian housewife: family health and the scarcity of water.

In addition to the growing consciousness of health, consumers today are looking for ways to look good and feel good so that they can get much more out of life. In short, consumers are seeking Vitality in their lives. Their portfolio of 35 power brands is uniquely positioned to offer nutrition, hygiene and personal care benefits and thereby deliver Vitality.

Technology, the Key Differentiator
Their brands and sound understanding of the local consumer are supported by a world class Research and Development capability. They have over 200 of the brightest scientists and technologists based in India.

Their recent reorganization leverages the talent pool from across 16 global technology centers, of which four are in India. In all, they have over 4,000 high quality minds across Unilever working relentlessly to provide new benefits that make a real difference to the consumers.

Winning with Customers
Hindustan Lever has historically had a strong bond with its customers. They have strengthened this and reinvented the way they manage their distribution channels and their customers. The sales structure has been transformed to leverage scale and build expertise in servicing Modern Trade and Rural Markets. They have also de-layered their sales force to improve the response times and service levels.

Their customers are serviced on continuous replenishment. This is possible because of
IT connectivity across the extended supply chain of about 2,000 suppliers, 80 factories and 7,000 stockiest. They have also combined backend processes into a common Shared Service infrastructure, which supports the units across the country. All these initiatives together have enhanced operational efficiencies, improved the service to the customers and have brought us closer to the marketplace.

Our Acorns: Investing in our Future
In the pursuit of growth, they have also begun to nurture some acorns for the future.
These are both new businesses and new ways of engaging with consumers. Their entry into Water Purifiers, through Pureit, shows great promise. Pureit delivers 100% protection against all water-borne diseases. It provides water which is as safe as boiled water, without needing electricity or continuous tap water supply. At 17 paise per litre, it is extremely affordable for the common man. They have launched it in Tamil Nadu and are fine-tuning all aspects of the business system before a phased national launch.In urban India, Hindustan Lever Network (HLN) is their direct selling initiative selling a special range of products. It already reaches 1,400 towns with over 3 lakh consultants. Besides reach, HLN enables direct interaction with consumers and customizes solutions for them to give them a complete brand experience.

Our People & Organization
They have restructured the company, integrating eight Profit Centres into two Divisions – Home and Personal Care (HPC) and Foods. The result is a simpler and leaner organisation, less hierarchical with fewer levels and greater empowerment. This has eliminated complexity and speeded up decision making. Today the company is far more youthful in attitude and spirit. There is greater openness and transparency.

The Transformation: Investment in the Future
To ensure that Hindustan Lever remains competitive in the long-term, they have made significant investments in product quality, pricing and marketing. As mentioned earlier, the investment in product quality alone has been in excess of Rs. 400 crores, or 5% of our sales.
In addition there has been the cost of defending their market position. Recently an international competitor attacked their laundry business led by a price reduction of as much as 50%. They acted with speed and determination leveraging all their past experience in India and internationally. They have been able to fully protect their market leadership and share, albeit sacrificing short-term profit. They made this necessary trade-off as market share is the best means of sustaining future profit. Over time, their stronger market positions will surely lead to greater long-term profit.

Despite these significant investments to strengthen the long-term competitiveness and the costs of defending the strong market position, they still remain one of the most profitable companies in the country.

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Modes of promotions

It was found in the survey that most of the companies use Campaigns (37%) as the mode of communication for the promotion of their products. About 65% of the total respondents suggested that Campaigns and Direct Contacts were the most prominent modes.

Thus we can interpret that although the penetration of media (audio and video) has increased but the companies rely on other modes and want the rural consumers to be aware at their door step. This increases the trust for the brand and generates the need which otherwise remains latent due to lack of awareness and enthusiasm. This also gives the touch-and-feel experience and increases the sense of satisfaction among the rural mass.

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Modes used in print medium

The table shows the responses for the mostly used modes in the print medium by the companies in the rural areas for their product promotion.

|VARIABLES | |AREA |TOTAL |
| |AREA(raj.) |(pb) | |
| |

Reasons for Rating the Promotional Activities.

The most important reason reflected by the respondents while rating the promotional activities was “On the spot” by 31% respondents. Second most important reason was “Better realization” of the product by 28% respondents. Third most important reason was “Understandability” by 21% respondents. The most important finding is that all these reasons correspond to Direct Contact and Campaigns. Thus, these two modes are the most important promotional modes.

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Focus of companies in Promotions.

Striking results regarding the promotions were obtained for this question. It was found that only 9% of the respondents said the promotions focused on the need of the product. The maximum of 35% flatly responded that the companies focused only the brand ambassadors and nothing else. Respondents gave examples of Sachin Tendulkar, Amitabh Bacchan, Shahrukh Khan, Aishwarya Rai and Irfan Pathan. 25% respondents said the promotions targeted the competitors and only 12% respondents replied that the promotions featured the utility of the product. Only 19% of the respondents confirmed that the promotions featured the pricing of their products. Although they responded that pricing was involved in the promotions but only to highlight how their price was more economical and better as compared to other players in the market.

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AREA OF FOCUS OF PROMOTION?

It was found that almost 3/4th of the respondents wanted a complete change in the format currently followed by the companies. 26% of the respondents wanted the promotions to focus on communication that too in the local language. An equal number of 25% respondents wanted the promotion to focus on the utility of the product
Rather than just pushing it into the life cycle of rural people. 24% of the respondents wanted fair price to be declared on the promotions so that they could decide upon the purchase and also prevent them from being cheated by dealers. Only 13% respondents wanted high class ambassadors in the promotions.

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Lifebuoy – Success Story (As per HUL)

Introduction:- When we talk about HUL the first name that comes to our mind is Lifebuoy. It is the world‘s largest selling soap and offers a stronger health benefit to the entire family Launched in the year 1895, Lifebuoy, for over a 100 years, has been synonymous with health and value. The brick red soap, with its perfume and popular Lifebuoy jingle have carried the Lifebuoy message of health across the length and breadth of the country, making it the largest selling soap brand in the world. In 2002 Lifebuoy was relaunched, marking a new turning point in its history. The new mix includes a new formulation and a repositioning of the brand to make it more relevant to both new and existing consumers.

“Lifebuoy is no longer a carbolic soap with cresylic perfume. It is now milled toilet soap with a new health fragrance”. The new formulation has an ingredient, Active-B, which offers protection against germs, which can cause stomach infection, eye infection and infections in cuts and bruises. The new health perfume has been selected after one of the most extensive perfume hunts in the industry. The new milled formulation offers a significantly superior bathing experience and skin feel. The new formulation, new health perfume and superior skin feel, along with the popular red colour, have registered conclusive and clear preference among existing and new users. The new Lifebuoy is targeted at today‘s discerning housewife with a more inclusive “family health protection for my family and me” positioning. Lifebuoy has made a deliberate shift from the male, victorious concept of health to a warmer, more versatile, more responsible benefit of health for the entire family. The new Lifebuoy range now includes Lifebuoy Active Red (125gm, 100 gm and 60 gm) and Lifebuoy Active Orange (100gm). Lifebuoy Active Orange offers the consumer a differentiated health perfume while offering the health benefit of Lifebuoy. At the upper end of the market, Lifebuoy offers specific health benefits through Lifebuoy International (Plus and Gold). Lifebuoy International Plus offers protection against germs which cause body odour, while Lifebuoy International Gold helps protect against germs which cause skin blemishes.

Repositioning of Lifebuoy

FMCG major Hindustan UNI Lever (HUL) embarked on a massive rural campaign using the concept of hygiene as a platform to reposition its leading brand, Lifebuoy. Lifebuoy was the single largest soap brand — with 20 lakh soaps sold every day and an estimated value of Rs 500 crore (600 million users annually). HUL has identified 8-9 key States for commencing its rural contact programme wherein the concept of hygiene will be highlighted. The relaunch of the 107-year-old Lifebuoy has been done in a bid to drive growth in a sluggish soap market. It is expected to propel the growth to double-digit levels during 2002. Lifebuoy has been declining by 15-20 per cent in volume terms until HUL launched Lifebuoy Active during the second half of 2001. The new Lifebuoy is a completely new product with a new formulation, fragrance, lather profile and a shift in positioning from being a male soap to a family soap. The carbolic segment, under which Lifebuoy fell, shrunk in the process giving way to an explosive growth in the discount segment in which HUL 's Breeze is positioned. Seventy per cent of the Lifebuoy sales were from rural India. Rural consumers ' query `why do I need Lifebuoy when all soaps clean ' was indicative of the decline of the brand, prompting HUL to launch Lifebuoy Active and Lifebuoy Extra Strong in mid 2001. "These launches led to a marginal turnaround, but 2002 is the year of growth. Lifebuoy is no longer a carbolic soap with cresylic perfume, it is a toilet soap with a different `health ' fragrance.

With this launch, the carbolic segment has been wiped out as Lifebuoy accounted for 95 per cent of this segment previously. In the process of change, HUL challenged everything that Lifebuoy stood for - perfume, formulation, size and shape. "Every element of communication was changed" The first phase of communication was to tell consumers that Lifebuoy has changed. From an earlier focus on men, the focus has shifted to family with the message that Lifebuoy is for effective protection from germs that cause health problems. The new range includes Lifebuoy Active Red, Lifebuoy Active Orange, Lifebuoy International Plus and Lifebuoy International Gold. In 2001, HUL 's soaps and detergents turnover was at Rs 4,295 crore, accounting for 39 per cent of its total net turnover of Rs 10,972 crore. Hindustan Lever Ltd (HUL) is attempting to give a new lease of life to its 107-year-old heritage brand by extending it to talcum powder and also testing a herbal variant of this power brand. While the upper-end consumers would use deodorants, a Lifebuoy powder could work for consumers in the lower strata who are already familiar with the soap."

Promotion

Media 's strategy for Lifebuoy soap 's re-launch:

Lifebuoy contributed 30 per cent to the Hindustan Lever detergent business turnover and hadn 't undergone a major restructuring and repositioning in 107 years. However, the sales were declining as the consumers were moving away from the carbolic based soaps to beauty soaps - perceived to be superior; with better fragrance and lather; aspirational image. The agency devised a strategy to ensure that it advocated family health rather than personal hygiene. There were large chunks of the users who were in "unreachable areas" - rural markets. Through TV and print campaigns, the agency team focused attention on the family health themes, conducted consumer education exercise using "Germ tests" through multimedia; and established the brand 's credentials as an authority in a credible manner. The agency also explored the communication options during important days such as World Health Day. For rural markets, it created the Lifebuoy Swashthya Chetana project wherein 450 teams of health officers tapped 8000 villages in 11 states. Nearly 40 million people in rural areas were covered. The brand registered a 30 per cent increase in volumes and the share of contribution to HUL 's detergent division turnover increased to 55 per cent. HUL was also offering cross company product mixes - a 200 gm Bru packet comes with one Cadbury 's Dairy Milk; Red Label tea packet comes with Cadbury 's Five Star depending on the size; 100 gm Lifebuoy comes with a small Amrutanjan. HUL used Mahakumbh mela as an opportunity to change hand-washing and bathing habits in rural India. "The Mahakumbh” at Allahabad is the biggest mela in India and, with its focus on `cleansing ' is a good fit for the `Lifebuoy for health ' message of the brand". innovative communication tools were used at the mela to communicate the importance of health and hygiene. The company had 14 stalls at various points in the mela grounds. Some hand-carts have also been deployed for increasing access. The numbers of both was increased based on response. ―The activity aims to build awareness in the target audience about hygiene and health through product demonstration”. People in Mela were asked to put there hands below some special camera where they could see the germs on their hands and were asked to wash their hands with lifebuoy and then see the difference. These types of promotional activities worked in these melas.

Cinema van operations: These are typically funded by the Redistribution Stockists. Cinema Van Operations have films and audio cassettes with song and dance sequences from popular films, also comprising advertisements of HUL products. Operation Harvest: The reach of conventional media and, therefore, awareness of different products in rural markets is weak. It was also not always feasible for the Redistribution Stockist to cover all these markets due to high costs involved. Yet, these markets are important since growth opportunities are high.

Operation Harvest: endeavoured to supplement the role of conventional media in rural India and, in the process, forge relationships and loyalty with rural consumers. Operation Harvest also involved conducting of product awareness programmes on vans.

Hindustan Lever Limited 's Lifebuoy, recently announced the launch of Lifebuoy Swasthya Chetna, the first single largest rural health and hygiene educational program. Lifebuoy will make multiple repeat contacts in nearly 15,000 villages in 8 states across rural India. The campaign aims to educate children and the community about the threat of unseen germs and basic hygiene practices. Lifebuoy has already successfully conducted pilot studies in Madhya Pradesh, Chhattisgarh, Uttar Pradesh, West Bengal, Orissa and Bihar. This campaign teaches people about maintaining good health through practice of basic hygienic habits including the hand wash habit. Lifebuoy is among HUL 's power brands, which the company is focusing on, selected on the basis of their absolute size, brand strength, brand relevance, competitive advantage and potential for growth. The new Lifebuoy range now includes Lifebuoy Active Red (125 gm, 100 gm, and 60 gm) and Lifebuoy Active Orange (100 gm). Lifebuoy Active Orange offers the consumer a differentiated health perfume while offering the health benefit of Lifebuoy. At the upper end of the market, Lifebuoy offers specific health benefits through Lifebuoy International (Plus and Gold). Lifebuoy International Plus offers protection against germs which cause body odour, while Lifebuoy International Gold helps protect against germs which cause skin blemishes.

Price

Hindustan Lever Ltd (HUL) currently on a price discount include 150 gm Lifebuoy Gold (Rs 3 off),TRYING to match prices with the smaller players, large FMCG companies have been on a price-cutting spree. Of late, Hindustan Lever have announced `new ' prices for their various brands to beat sluggish sales, combined with the introduction of lower-sized packs to get volumes. HUL is also expected to follow suit with its Surf sachets with the obvious purpose of gaining volumes at the lower end of the market. HUL managers describe the exercise as that of dropping price barriers to induce growth for their brands rather than trying to beat the smaller players with their pricing. More than benchmarking competition, dropping prices is all about triggering growth and this has always been an integral part of their strategy. Straddling almost every price segment with its SKUs, HUL has also been trying to upgrade its consumers, even at the cost of cannibalising its own brands. Besides, freebies and promotions have finally been replaced by direct price reductions to lure consumers. Observes Sujoy Mishra, an analyst at Kotak Securities.

"Promotions have shifted to the trade while freebies have been replaced by price cuts." Considering almost every FMCG brand was doling out a freebie, it was time for FMCG players to differentiate themselves. Observes A. Sundarajan, Managing Director of market research firm, Market Search, "The round of freebies has already been played out by the FMCG companies. They are now coming back to their core brands at a lower price." In spite of the slowdown in rural demand, FMCG companies continue to focus on the rural markets in the hope of salvaging their sales turnover. Majors such as HUL have deliberately introduced small pack sizes. Lifebuoy, HUL 's largest selling soap brand, recently introduced a Rs 2 SKU of 18 gm targeted at the rural market in the BIMARU States.

Place

70% of India 's population resides in villages. Penetrating the rural markets is, therefore, one of the key challenges for any marketer. While rural markets present a great opportunity to companies, they also impose major challenges. At HUL, they have been at the forefront of experimenting with innovative methods to reach the rural consumer.

Single Distribution Channel

For rural India, HUL has established a single distribution channel by consolidating categories. In a significant move, with long-term benefits, HUL has mounted an initiative, Project Streamline, to further increase its rural reach with the help of rural sub-stockists. It has already appointed 6000 such sub-stockists. As a result, the distribution network directly covers about 50,000 villages, reaching about 250 million consumers. Distribution will acquire a further edge with Project Shakti, HUL 's partnership with Self Help Groups of rural women. The project, started in 2001, already covers over 5000 villages in 52 districts of Andhra Pradesh, Karnataka Madhya Pradesh and Gujarat, and is being progressively extended. The vision is to reach over 100,000 villages, thereby touching about 100 million consumers. The SHGs have chosen to adopt distribution of HUL 's products as a business venture, armed with training from HUL and support from government agencies concerned and NGOs. A typical Shakti entrepreneur conducts business of around Rs.15000 per month, which gives her an income in excess of Rs.1000 per month on a sustainable basis. As most of these women are from below the poverty line, and live in extremely small villages (less than 2000 population), this earning is very significant, and is almost double of their past household income. For HUL, the project is bringing new villages under direct distribution coverage. Plans are being drawn up to cover more states, and provide products/services in agriculture, health, insurance and education. This will both catalyse holistic rural development and also help the SHGs generate even more income. This model creates a symbiotic partnership between HUL and its consumers, some of whom will also draw on the company for their livelihood, and helps build a self-sustaining virtuous cycle of growth.

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FINDINGS:

With the present secondary data and primary survey following results were generalized. The result has been discussed on objective wise basis and represents the opinion of the various authors on the subject as well as the point of view of the respondents of the selected villages.

Objective 1-To analyze the present promotion strategy of rural brands (HUL) in rural markets.

a. To study the modes of communications used and their effectiveness.

b. To find out the role of promotion in rural sales.

c. To find out the promotional strategies of different players in the market.

Finding: It was found that mostly four modes of communications were used by the companies in the rural areas. The most prominent mode was campaigns, other modes were electronic and print media along with direct contact. It was also found out in the survey that promotions played a very important role in rural sales; they increased the penetration of the products along with increasing the awareness of the rural people. It was found in the primary survey that people wanted to have the promotions which made them aware about the utility of the product in their daily life. This identified the need of the product in the life-cycle of rural people. Thus promotions played a very important role in generating the sales. It was found that most of the companies focused on the brand ambassadors and their products in their promotions, few of them also focused on the price and affordability. It was found that the basic strategy of the companies is to allure the rural mass of its product and generate sales. The customers reported the glamour and usage of sex-appeal in all the promotions of FMCG.

Objective 2- To measure the success of rural marketing campaigns of the brands (HUL) in terms of consumer appreciation.

To study the determinants of specification factors which decide the success of rural promotion strategy?

Finding: It was found in the survey that rural people wanted the promotion to be more focused on the usage and need of the product. Although the people wanted promotions but they did not liked the way promotions are done these days. They wanted informative promotions.

Objective 3-To evaluate the effects of adopting the specific brand ambassadors for different products in the rural marketing context.

Finding: Brand Ambassadors are the most important part of promotions, in the FMCG promotions by celebrities is very common.

Objective4- To analyze the market opportunity and potential for existing as well as new entrants in the rural market for HUL.

a. To find the growth of rural market over a period of 5 yrs.

| b. To find the behavioral changes in the rural consumers. | |
|Finding: It was found for the various sources of secondary data the rural India has that huge potential market that can drive the | |
|whole nation. NCAER survey reflects that by 2015. The proportion of the consuming class will be more than 50%. This is shown in the | |
|table below. | |
|Very rich | |
|5% | |
| | |
|Consuming class | |
|54% | |
| | |
|Climbers | |
|34% | |
| | |
|Aspirants | |
|4% | |
| | |
|Destitute | |
|3% | |
| | |
| | |
| | |
|Thus with lesser penetration in the rural areas, the companies are fighting hard to reach the remotest areas to gain the advantage of | |
|capturing the market first and having an impact on the customers mind which is till date unoccupied. The population drain form the villages | |
|have dropped by some percent and people have found new ways to sustain their livelihoods in the villages. Government is helping to maintain | |
|this sustainability. The increase educational status in the villages, high propensity to consume and high per capita income has forced the | |
|companies to penetrate into the untapped rural market. This untapped market would server 70% of the Indian population. The results from the | |
|secondary data suggest that the companies like HUL, Dabur, P&G, ITC have extensively started to tap this market. . | |
|FINDING | |
|In In recent years, the FMCG sector declined due to downtrading. Also because of presence of large number of companies trying to resize this| |
|opportunity, this force the old HLL for the change and thus, their transformation has resulted in a new HLL, which has successfully faced | |
|this challenge and reversed this trend. It has done so by substantially strengthening their brands and building capabilities. This has | |
|already begun to yield benefits and they are returning to growth. Volume growth is being followed by value growth, which in turn is bringing| |
|profit growth. India is one of the most exciting markets offering great potential. Over the next 10 years, the per capita income in India is| |
|likely to double. In FMCG, there is an opportunity to catalyze penetration, increase usage, and upgrade consumers. As a result, the FMCG | |
|market is expected to grow to over Rs.100, 000 crores from its current base of Rs.40,000 crores. The new Hindustan Lever see an exciting | |
|opportunity for growth. They have 35 powerful brands covering all segments, with leading market positions in most. Today, these are stronger| |
|and more relevant to the consumer than ever. The people are energized by the scale of the opportunity and determined to seize it. The scale | |
|of the business and operations gives them the resources needed. They are delivering good services and the changes they brought in the | |
|products are well taken by the customers, by this they are generating sustainable profitable growth. | |
|The rural India harbors 70% of the total population. This vast population has now a high propensity to consume and they have much more | |
|per-capita income than earlier. With higher education and better sense of things they can rule the world in a much better way. The various | |
|local languages and the dialects make the promotion in far interiors very difficult but these are the most potent areas that are still | |
|untapped, so it is a daunting but rewarding task for the companies to make a move and to understand the needs and the requirements of the | |
|rural people. The companies have started to follow this track and exploit the market. | |
|The Indian growth story is now spreading itself to India 's hinterlands. With rising incomes, both consumption and production have increased | |
|significantly. Food grain production was in excess of 227.3 million tones in 2007–08 which was an increase of an increase of 4.6 per cent | |
|over the previous year. In 2008, the rural market has grown at an impressive rate of 25 per cent compared to the 7–10 per cent growth rate | |
|of the urban consumer retail market. | |
| | |
|In most of the rural areas in different parts of the country, there is considerable awareness on various latest products that are available | |
|in the market. This has been possible due to the penetration of cable and satellite channels that have brought down the world at the finger | |
|tips of the common man. The media influenced the mindset of the rural consumer to such an extent that people who had money started | |
|purchasing the products unmindful of the costs, just to satisfy their needs as well as their ego. But the growth of rural market could be | |
|attributed to many other reasons that in one way increased the sales as well as the profits of the companies. Some of the important causes | |
|for the growth of rural markets are – | |
| | |
| | |
| | |
| | |
|The rise in disposable income of the rural families | |
|The economic boom | |
|Timely rains | |
|Rural population involved themselves in business other than agriculture | |
|Increase white-collar jobs in nearby towns | |
|Commercialization of agriculture | |
|Saturation of the urban markets | |
|Media penetration in rural areas (particularly satellite channels) | |
|Globalization | |
|Economic liberalization | |
|Revolution in the Information Technology | |
|Women empowerment | |
|Improving infrastructure | |
|However, there was a significant role of the corporate enterprises simultaneously in the development of rural market. Their timely | |
|intervention into the rural areas, their appropriate planning, their perception and identification about the growth of rural markets and the| |
|use of marketing strategies all have equally contributed for the progress of rural markets. Even though corporate houses were hedged with so| |
|many problems in the rural areas, they saw a galore of opportunities in the rural market and converted all the pessimistic characteristics | |
|of the rural market into affirmative attributes. They satisfied themselves with the availability of limited infrastructure; saw a sign of | |
|prosperity rather than fear during the entry of competitors into the rural markets, showed excitement at the availability of satellite | |
|channels in the rural households, visualized their cash bells ringing with the increase in purchasing power of the rural masses that came | |
|equivalent to their urban counterparts. They traced a constant rise in the demand for those products that were once confined mostly to the | |
|urban houses. But, blame it on the kind of awareness created by the companies – people started using the products for other purposes as seen| |
|earlier. | |
|In many villages, it is seen today the alternate use of the products other than for their actual purpose. People in the state of Bihar feed | |
|the cattle with Horlicks as a health drink to fatten them! Similarly, people in Punjab use washing machine not for washing clothes but to | |
|make frothy lassi in huge quantities. Animals are rubbed with Iodex on their skins to relieve them from muscular pains after a day 's hard | |
|work. Paints meant for houses are used on the horns of cattle for easy identification and theft prevention. The weavers in North India wear | |
|condoms on their fingers as gloves to weave fine threads while its lubrication allows them fine control on threads and protect their | |
|sensitive fingers. If companies felt happy with their increased sales and profits through this means and thought that they captured the | |
|rural markets, then it is time for them to review their marketing strategies. They should understand that these results do not coincide with| |
|the application of the marketing tools and the technical expertise that are generally used to satisfy the customers as well as the company | |
|objectives. The implications of 4 Ps of marketing mix or the use of 4 As for successful rural marketing have sometimes produced wrong | |
|results. All companies usually claim that they provide the right product at the right place at right price with right kind of promotion. Yet| |
|there are differences in the opinions and beliefs of rural people. There was something missing in the marketing strategies of the companies | |
|while serving the rural markets. Otherwise, the results should have been more astonishing where the sales turnover or the balance sheet | |
|would have shown much more than what is presently achieved. Though, only few products were used by the consumers in this way, that use might| |
|be the result of the accidental or wrongful application by the rural consumers. The marketer 's planning about the product and the | |
|communication with the target customers should be perfect that produces the desired results. Thus it is important to understand the nature | |
|and behavior of the consumers and to communicate them through the right set of modes. It is only promotions that matter a lot for generation| |
|of sales at these levels. | |
| | |
| | |

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1) Suggestion: It is recommended that the HUL should focus more on the utility of the products while promoting in the rural areas. The life-style of these people is different from those in the urban areas. These people want value for their money, so they want the promotions to be more informative rather being more glamorous. The “value-for-money” means that people will definitely buy, but they will buy only that product which suits their needs. If once they purchase a wrong product they will never purchase it again. This word-of-mouth may spread across and company might lose in the long run.

2) Suggestion: The HUL should provide full information in the rural promotions starting for the need, utility, availability, price and the pack sizes available. It is recommended that the pack sizes should be small and the pricing should be done in coinage system example: Re.1, Rs.2, Rs.5, Rs.10 etc. This increases the affordability among the rural consumers.

3) Suggestion: It is recommended that the brand ambassadors should be relevant to the product and must look like he/she would be using the product in the daily life style. Merely promoting the product by glamorous model may generate sales in urban areas but for rural areas, information is of prime importance than glittering dances and models. The companies should be very specific for choosing the brand ambassadors for the rural areas as it may either boost up the sales or completely wash them out of the market.

4) Suggestion: It is recommended that the HUL should have separate strategies for rural as well as urban markets and should take care of addressing the needs of the rural people in their promotions. They need information so they should be provided with it. The rural promotions should use high profile celebrities but only to an extent and not in all products. The rural mass is very specific and may discard the product completely if not satisfied. For new entrants in this market it is recommended to have a start from a small portion and then increase gradually. This is because rural people purchase mostly by word-of-mouth promotions among themselves. Thus, if success is achieved at one place then it becomes easy to expand as market is already awaiting you. Thus the promotions should be simple and loaded with information and not with glamour.

SCOPE FOR FURTHER STUDY

The scope of the research has been limited to the Sriganganagar and near by areas. Keeping in mind the objective stated, questionnaire was designed for the people. Subsequently a research was conducted.

The study will provide some basic ideas regarding the brand promotional measures and the market potential of rural sector in and around some villages of Sriganganagar in Rajasthan and a few [22] selected villages in Abhor, Hanumangarh, Sirsa, and Bikaner . The scope of the project is limited to the study of consumer perception regarding the selected brands of FMCG such as soaps, toothpastes, washing powder, hair oil in the selected areas. The study has limited exposure to the market due to time, mobility and budget constraints.

LIMITATIONS OF STUDY

1. The sample size may not adequately represent the national market. 2. This study has not been conducted over an extended period of time, it do not consider any hangs due to changes in the sudden needs of the customer because of some seasonal change or any kind of festivals.

3. The duration of the project work was short enough to allow the full exposure. 4. The process of lead identification to the final completion of the documentation requires more than just two months of time. 5. Thus the project was limited to either negotiation of the deals or carrying on with an existing lead.

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REFERENCES

|1. Marketing Management by Kotler, Keller, Koshy and Jha. | | |
|2. 'Advertising Express ' ICFAI Journal Jan 2006 – Branding India. | | |
|3. Indian Management – May 2007. | | |
|4. The Power of Branding praxis – Business line 's Journal on Management – May 2005. | | |
|5. T. P. Gopal Swamy," Rural Marketing, Environment-Problems and strategies, Wheeler Publishing, 1997. | | |
|6. www.hill.com | | |
|7. www.indiainfoline.com | | |
|8. The Marketing Mastermind Case study HLL- Rural Marketing Initiatives ICFAI Press, PP. 62, Feb 2003 | | |
|9. B2B Brand Management – Philip Kotler and Waldemar Pfoertsch. | | |
|10. Adesara, Hetal (2004). "Making In Roads In The Hinterlands" Indiantelevision.com Perspectives, editorials, | | |
|http://www.indiantelevision.com/perspectives/y2k4/rural_marketing.htm | | |
|11. Lakshman, Nandini (2003). "India Inc Eyes Rural Market". Rediff.com Business, special | | |
|http://www.rediff.com/money/2003/oct/25spec2.htm | | |
|12. Mehra, Preeti (2003). "Advertisement Perception Varies Among Urban Rural Audiences". Business line (September) | | |
|Internet edition, The Hindu group of publication, | | |
|http://www.thehindubusinessline.com/2003/09/02/stories/2003090201640600.ht | | |
|13. Rajan R. V. (2004). "The Rural – Urban Divide Is It Melting?‖. Bangalore, Published in MICA Communications | | |
|Review, Vol. 1 (3). | | |
|14. Tan, Jacqui (2004). "Opportunities, Challenges And Innovations In Marketing Consumer Goods to Rural Indian an | | |
|Observation of a First Time Visitor". http://scannergroup.mit.edu/IndiaTrip/Papers/Tan.pdf | | |
|15. www.indianmba.com | | |
|16. www.en.wikipedia.com | | |
|17. www.encyclopedia.brittanica.com | | |
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QUESTIONNARIE

FOR CUSTOMERS

Ques 1 How do u select the product for shopping?

a. Brand b. Quality c. Price d. Service

Ques 2 How do u get the information about the product?

a. Posters b. Neighbors c. Advertisement d. Shopkeeper

Ques 3 How often u go for shopping?

A. Daily b. 3-4 days c. Weekly d. Monthly

Ques 4 How much part of income do you spent on FMCG product ?

A 80%

Ques 5 Which company brand you would like most to purchase?

a. HUL b. Nirma c Emami d Godrej

Ques 6 How much are you satisfied with use of these brand?

A Fully b Partially c Not at all

Ques 7 Do you find HUL products are eco-friendly?

a) YES b) NO

Ques 8 Which product do you prefer of HUL?

a) Dish wash products b) Beauty products c) Laundry detergents d) Deo sprays

Ques 9 In beauty products which product do you like most?

a) Fair & lovely b) Fair one c) Fairever d) Vicco turmeric e) None

Ques 10 To which product of skin category do you give priority?

a) Lakme b) Ponds c) Vaseline d) Pond’s white beauty e) Other

Ques 11)Which product is better?

a) Pond’s age miracle b) Olay c) Any Other

Ques 12 .Do u think that HUL fulfils the requirements ?

a) YES b) NO

ques 13 Which soap do you like most?

a. Lux b. Dove c. hamam d. Breeze e. lifebuoy f. pears

Ques 14 Which brand do you like most?

A Taj mahal b Red label cTaaza d Brooke Bond

For shopkeeper and dealers

1) For how many days you store product at shop?

A. 3-4 days

B. 1 week

C. 1 month

2) After how many days you got supply after order?

A. Within day

B. 1 day

C. Within week

3) Which type of product you like to store more on shop?

A. HUL

B. NIRMA

C. PRO.& GAMBLE

D. LOCAL BRAND

4) Do you convince customer to purchase any special product?

A. Yes

B. No

C. Some time when the customer in confusion.

5) Why you using store that product more?

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

1) 2) 3) 4) 5) 6) 7) 8) 9) 10) 11) 12) 13) 14) 15) 16) 17) 18) 19) 20) 21) 22) 23) 24)

6)How much is the consumption of HUL’s product with respect to the Products of other companies? ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..
7)Do you think customers are satisfied with the products and services you are offering? ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
8)What are the ways to get the feedback from customers? ………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
9)On which part customers are really not satisfied? ………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………. 10How do you find the changing tastes and preferences in customers? ………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

11) What is HUL is doing to tackle this problem?

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..

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Rise in Disposable income

Brand relevance

Competitive pressure

Ability to call shots/pricing power

Ability to involve and enter new business

Appetite to take risk and stay invested

Resource employment and excess cash generation

References: 1. Rural Marketing, Ravindranath V. Badi and Naranyansa V. Badi, Himalaya Publishing, 2004 2 | Rural market for FMCG on upswing - By Business Standard | |Ruchita Saxena / Mumbai December 27, 2007 | |Rural markets beat cities in FMCG sales growth – The Economic Times, December 8, 2008. | |Rural consumers are displaying considerable resilience in spends on fast-moving consumer goods (FMCG) despite the economic slowdown, say |