0

“Changing mindsets in Consumption Pattern of SOFT DRINK in Rural Market”

Post-Graduate Diploma in Management

By

Ravi Kumar

Roll No.(Pg08-080)

Under the guidance of

Prof. Deepa AgnihotriFaculty, Marketing

Inmantec Business School, Ghaziabad

INMANTEC Integrated Academy of Management and Technology

Ghaziabad

DateOctober 2009

0

Table of ContentAcknowledgements

01

Preface02

Objective of study03

History of the Industry04

Words of Ministry of Food Processing Industry for Soft Drink Industry06

Robust growth continues14

Companies reposition their brands and update product portfolios14

Main Brands of the Industry15

Rural Market Scenario16

Key to success in Rural India17

Literacy Review19

Factors influencing buying behavior22

0

Factors influencing buying behavior23

Rural Branding24

Research Design25

Source of Data collection26

Findings27

Suggestions28

Conclusion29

Bibliography30

Acknowledgements

I am highly indebted to my project mentor Prof. Deepa

Agnihotri for her continuous support, supervision

motivation and guidance through out the tenure of my

project in spite of her hectic schedule who truly remained

0

driving spirit in my project and her experience gave me the

light in handling research project and helped me in clarifying

the abstruse concepts, requiring knowledge and perception,

handling critical situations and in understanding the

objective of my work.

(Ravi Garg)

PrefaceMarket provides a key to gain actual success only to those brands which match best to the current environment i.e." imperative" which can be delivered what are the people needs and they are ready to buy at the right time without any delay. It is perfectly true but this also depends on availability of good quality products and excellent taste and services which further attract and add a golden opportunity for huge sales.

0

This also depends on the good planning approach and provide ample opportunity plus sufficient amount of products for sales in the coming next financial year.

This project introduces study of consumer’s preferences for Soft Drink Industry. After going through a detail analysis of market behavior and future prospect, it may also provide an opportunity to the players those are playing a vital role in the industry to frame a good future plan to satisfy maximum needs of the customers and established its guiding role in throughout the country as a whole. The study report will also provide an opportunity to delineate its market potential business areas, products & services are to be offered by the company to the customers.

This study report also provides the various factors affecting the services. Marketing Division of a soft drink company has to keep in mind various factors specially while preparing a plan for marketing its product or services. Detail description along with analysis of surveyed data is being presented in this report

Aims and Objectives of the study

0

• To study the profile of soft drink consumers.

• To study the behavioral pattern of rural consumer for soft drink products.

• To identify their level of satisfaction in the purchase of various soft drink products.

• To determine the various factors influencing the behavior of soft drink consumer.

History of the Industry

SOFT DRINK INDUSTRIES IN INDIA- A soft drink is a non-alcoholic

beverage. It is artificially flavored and contains no fruit or pulp. India with

0

population of more than 100 crores is potentially one of the largest consumer

markets in the world after China. The consumer market can be defined as the

market for products and services that are purchased by individuals as households

goods for their personal consumption. Soft drink is a typical consumer product

purchased by individuals to quench thirst and secondly for refreshment.

Searching for the point of Indian soft drinks we first document on Gold Spot, this

was the first brand soft drink in India. It was introduced by PARLE during later

part of 40’s.

Cola giant, Coca-Cola was the first foreign soft drink to be introduced in India in

1965, Coca-Cola make a very good beginning and dominated the whole scheme

right from the word go. It (Coca-Cola) faced no competition at that time. COCA

COLA entered India in the year 1993 In collaboration with PARLE INDIA LTD.

The marketing people did not even receive to publicize Coca-Cola for it sold

first like probability not-cakes. This extraordinary success of soft drinks can

be attributed to the following factors:-

• Absence of contemporary competitive brand.

• Euphoric image built up in the Western countries proceeded the

entry into Indian Market; and

• Indians are very found by nature of foreign goods, services etc. due

to prolonged foreign rules.

Parle Exports (P) Ltd, later in 1970 introduced Limca, Lemony Soft drinks.

Before Limca introduce, they had tentatively introduced Cola, Pepino, which they

had to soon withdraw in the face of battering confrontation with Coca-Cola.

Three of four groups of Indians companies who had the required production

capacity started their own brands of Cola, Lemon, Orange, but failed to achieve

0

their goal on a national basis. India always has love and hate relationship with

MNC’s which gave a significant opportunities to soft drink industries in India

when Coca-Cola decided to windup its operation in 1977 rather than bowing to

the Indian government insisting on:-

• Dilution of equity, as the government felt that lots of foreign currency was

being wasted.

• Manufacturing of the top-secret concentration in India.

• Disclose of the chemical composition of the essence.

This left a large vacuum in the popular soft drink market, and a vista was opened

to any company with the requisite, technical, marketing and organizational skills.

The exit of Coca-Cola from India in 1977 accelerated the growth of several

Indian Soft Drink. New soft drink in the form of Tetra pack entered the market

among Frooti, Jump-In and Treetop were the prominent once. Till 1977 their

equipped bottling plants and the distribution network a longing to be of no use. It

took them one year to develop new formula to survive and gradually came up

with Campa, Lemon, Orange and Cola that order.

However Parle, the pioneer in the soft drinks, blazed its way to national

prominence with their product “Thumps Up” bearing the slogan “Happy Days

Are Here Again”. This particular slogan helped to win over the loyalists or

addicts to Coca-Cola, who was in the state of “Cola Shock” or Cola Depression.

Soon the Indian Soft drink industry started at a phenomenal rate, and all Parle

Products Gold Spot, Limca and Thumps Up became the brand leader in their own

segment. In spite of all these, the drink market still has large gap, as claim by soft

drink manufacturers. To fill these gaps there are many soft drinks concentrate and

0

squashes flooded the market. The Indian soft markets basically offered three

flavors i.e. Orange, Lemon and Cola.

Words of Ministry of Food Processing

Industry for Soft Drink Industry

The 50-bn-rupee soft drink industry is growing now at 6 to 7% annually. In

India, Coke and Pepsi have a combined market share of around 95% directly

or through franchisees. Campa Cola has a 1% share, and the rest is divided

among local players. Industry watchers say, fake products also account for a

good share of the balance. There are about 110 soft drink producing units

(60% being owned by Indian bottlers) in the country, employing about

125,000 people. There are two distinct segments of the market, cola and non-

cola drinks. The cola segment claims a share of 62%, while the non-cola

segment includes soda, clear lime, cloudy lime and drinks with orange and

mango flavors.

The per capita consumption of soft drinks in India is around 5 to 6 bottles

(same as Nepal's) compared to Pakistan's 17 bottles, Sri Lanka's 21, Thailand's

73, the Philippines 173 and Mexico 605. The industry contributes over Rs

12 bn to the exchequer and exports goods worth Rs 2 bn. It also supports

growth of industries like glass, refrigeration, transportation, paper and sugar.

The Department of Food Processing Industries had stipulated that 'contains-

no-fruit-juice' labels be pasted on returnable glass bottles. About 85% of the

soft drinks are currently sold in returnable bottles. There was a floating stock

0

of about 1000 mn bottles valued at Rs 6 bn. If the industry were to abide by

the new guidelines, it would have to invest in new bottles, resulting in a cost

outgo of Rs 5 bn. Neither Coke nor Pepsi is in a position to invest such a large

amount.

Around 400,000 tonnes of raw material would be required to replace the

existing stock of bottles. Instead, the soft drink industry suggested that a

seven-year moratorium be extended to the industry so that it can incorporate

the change in a phased manner. There is no such mandatory requirement

anywhere in the world to specifically label the glass surface of returnable

bottles. The government has decided to extend the date for replacing

the bottles to end-march 2006. In the meantime, the producers have shifted

substantially to the use of PET bottles.

Soft and aerated drinks were considered products for the middle class and the

affluent. That segregation is no more valid. Soft and aerated drinks are

consumed by all except those who cannot afford to buy any drink. An NCAER

study says that 91% soft drink sales are made to the lower, middle and upper

middle classes. The soft drink industry has been urging the government to

categorize aerated waters (soft drinks) equitably with other consumer products

of mass consumption and remove special excise duty.

The industry estimates that the beverage market should grow at twice the rate

of GDP growth. The Indian market should have, therefore, grown by at least

12%. However, it has been growing at a rate of about 6%. In contrast, the

Chinese market grew by 16% a year, while the Russian market expanded at

almost four times the rate of growth of the Indian market.

0

It may be recalled that Coca-Cola, the world's number one player, was present

in India for a long time in collaboration with an Indian producer but was

thrown out in the late 1970s. It reappeared in India following the economic

liberalization era - but after its rival, world's number two, had already entered

in a big way following a long and tough fight against the opposition from the

domestic producers. When Coca-Cola re-entered, it installed a new milestone.

It acquired the well flourishing India's top player, Parle. Since then it is

basically a fight between the two American giants. Others are playing a

peripheral role, as adjuncts to the two MNCs. World's third biggest player,

Cadbury Schweppes, had also made an entry but was gobbled up by Coca-

Cola. When Coca-Cola acquired Parle brands, it was, in fact, buying the

bottling facilities, the marketing network, and the established consumer

preference during the market build-up. The brands were a drag on the global

brand. Since Coca-Cola was not interested in brands (like Thumps Up), it did

not promote them. The result, at least, in the short run was a loss of the market

to the competitor. Coca-Cola decided to market more effectively the Parle

brands. It had in its armoury Coke, Thumps Up, Limca and Fanta. The latest to

enter market was Parle’s erstwhile Rimzim, alongside Portello, a black currant

flavoured drink, very popular in Srilanka.

Coca-Cola operates through 35 plants and 16 franchisees throughout the

country, while PepsiCo has 20 plants, but it has 7 more franchisees at 23 to 16

of its rival. Coca-Cola claims a market share of 51%, while Pepsi has a share

of 46%. The claims, however, remain disputed. The other smaller players like

Pure Drinks Ltd claim the rest of the market. The shares of the two lead

0

players are consolidated figures, which include the respective bottlers. Coca-

Cola had approached the government for a five year extension for divesting

49% equity in its bottling subsidiary, Hindustan Coca-Cola Holdings. It had

set up the marketing subsidiary as part of its strategy to integrate all its bottling

operations, both company-owned and franchisee bottlers, apparently keeping

in line with its global policy. All together, it had bought initially over 38

franchisee bottlers.

Kandhari Beverages, coke bottlers for north have been eyeing to lift a stake in

Coca-Cola India. Coca-Cola had filed an application to offload 49% stake of

its bottling operations in favour of their Indian operators. Besides Kandhari,

three other bottlers, one each from Uttar Pradesh, Gujarat and Jammu,

were lined up to invest in Hindustan Coca-Cola Holding. Kandhari has already

invested Rs 300 mn in 1999 and 2000 to upgrade its capacity. The total

investment by all the four was expected to be Rs 1000 mn. Both Coca-

Cola and PepsiCo planned for the launch of lemon-flavored versions of their

products. Both have been expanding their non-carbonated drink line-ups, as

consumers seem to be shifting away from carbonated soft drinks. PepsiCo is

deliberating whether to come out with Pepsi Twist, a cola mixed with lemon.

But while both companies have juice sports drinks, bottled water and other

such drinks in their line-ups, neither coke nor Pepsi has launched a new

national variety of a cola-flavoured carbonated soft drink in years.

PepsiCo had achieved Rs 3 bn worth of exports, which include processed

foods, basmati rice, guar gum and soft drinks concentrate. PepsiCo completed

the second phase of its expansion and with this expansion, PepsiCo was

0

to explore the possibility of expanding the export of concentrates to more

countries in addition to the exports to Russia and other South Asian countries.

Pepsi India has entered into a marketing tie up with Hindustan Lever to

promote sales of soft drinks through Pepsi-HLL network of vending machines

and fountains. The major soft drink brand in the Pepsi stable are Pepsi,

7UP, Mirinda, Tropicana and Acquafina.

As a major strategic departure, both MNCs were expanding their brand range.

Consequent to some diversifying moves, at present, the sales ratio of Coca-

Cola between soft drinks and other beverages is 95.5. The company

intended to change this to 80:20 in the next three years. Its juice brand, Maaza

- acquired from Parle a few years ago - is being given a major thrust. It has

plans to go in for canned coffee, iced tea and purified categories under

expansion schemes. It has already launched its bottled water brand, Kinley, in

the Indian market. Besides, it is intending to acquire domestic brands in the

non-carbonated beverages segment.

The global deal between Coca-Cola and P&G to form a snacks and

beverages joint venture company was reported to have slipped into rough

weather. The P&G brand of potato wafer, Pringles, seemed to be faced with

distribution problems in India. P&G had globally tied up with Coca-Cola to

form a stand-alone juice and snacks company. The new firm is focused on

developing and marketing new juices, juice based beverages and snacks on a

global basis. The Sharjah-based Allied Beverages was pushing its Ahlan brand

in India, having entered the market in mid-2000. Its target was carbonated

drinks market in PET bottles. Its plans were to launch a PET bottle in the

0

popular 300 ml category. Ahlan expected to gain a 12% share of the total PET

bottle market in northern India. Of the total market, PET bottle segment is

approximately 12%. Presently, Allied Beverages has a manufacturing unit at

Dharuhera in Haryana. The product range includes carbonated drinks - cola,

orange, lemon and soda in three pack sizes - 500 ml, 1500 ml and 2000 ml.

Allied Beverages sells non-carbonated drinks in 200 ml foodgrade cups priced

at Rs 7 in its portfolio, available in four different flavors. The company's

future plans include pulp-based fruit drinks in flavors, which will be available

in 200 ml non-returnable glass bottles.

IFB Agro Industries has handed over the distribution rights of Cadbury

Schweppes in favour of Coco-Cola India, following the global takeover of

Schweppes beverages by Coke. The company still retains the bottling rights

for the beverages.

It was noticed for the first time during the summer of 2004 that soft drink

companies were registering a slower growth in the sale of bottled water at 20%

compared to 35% in case of drinks.

Lead Players & AlliancesCompany Share (%)

Aradhana 34

0

Varun Beverages 15Devyani Beverages 9Kandhari Beverages 7Ludhiana Beverages 7Sri Sarvarya Sugars 6Pearl Drinks 5Pearl Beverages 6

Leading Brands

Coca Cola, Thums Up, Limca, Fanta, Gold Spot, Rim Zim, Maaza, Pepsi,

Mirinda, 7'UP, Mangola, Slice, Duke's, Lemonada, Crush, Canada Dry,

Campa.

Market Growth Rates

1990-91 - 1996-97 9.4%1996-97 - 2001-02 7.8%2001-02 - 2006-07 6.5%

0

2004-05 - 2009-10 5.4%2009-10 - 2014-15 3.5% Sensitivity Coefficient 5.2%Market SegmentationSegment Share (%)North 24East 18West 32South 26Rural 30Urban 70

Market Structure

Product Variation

Company Share (%)Cola Drinks: Thums Up 29Coca Cola 25Pepsi 18Non Cola Drinks: Gold Spot 2Fanta 9

0

Mirinda 8Limca 9Overall Colas 62Lemon: Cloudy 7Clear 3Orange 17Mango 3Soda 8

(www.mofpi.nic.in)

Robust growth continues

The soft drinks industry continued on its path to recovery from the low growth seen between 2005 and 2006, with higher volume growth in 2008 than that seen in 2007. The mature sectors of bottled water, fruit/vegetable juice and carbonates saw a dynamic year, with companies refreshing their products’ brand image and packaging to attract new consumers. Emerging product categories, such as energy drinks and reconstituted 100% juice, saw high double-digit growth rates, as companies increased their products’ penetration in India. Off-trade volume growth was slightly higher than on-trade volume growth, as convenient on-the-go packaging, company sponsored chillers in

0

kiranas and attractive supermarket displays fuelled off-trade sales across the market.

Companies reposition their brands and update product portfolios

With the industry back on the upward growth curve, companies refreshed their brands by introducing new and more premium packaging designs, pack sizes and communication campaigns. In 2008, bottled water was especially dynamic, with all the major national brands following the cue of Bisleri’s rebranding in late 2007. Carbonates and juice drinks were also reinvigorated with new pack sizes that targeted on-the-go consumption by young adults. With “naturally healthy” becoming a key focus for consumers and manufacturers, fruit/vegetable drinks companies focused their efforts on highlighting their products’ fresh fruit content and health attributes. Companies put in motion plans to extend their product portfolios to emerging categories such as 100% juice, energy drinks and flavoured water.

Indian Product Range

Flavour Ingredients Pack Product Company

Cola Cola Flavour carbonated water sugar

200Ml.

300Ml.

500Ml.

1 Litre

1.5 Litre

2 Litre

Coke,

Thumsup

RC

Pepsi

Coca-Coal

RC cola

Pepsi

0

Orange Orange Flavour + Carbonated Water+ Sugar

200Ml.

300Ml.

500Ml.

1 Litre

1.5 Litre

2 Litre

Fanta

Mirinda

Coca-Cola

Pepsi

Fruit Juice Mango Pulp+ Treated water+ sugar

250 ML Maaza

Minute Maid Pullpy Orange

Slice

Tropicana

Appy Fizz

Real

Coca-Cola

Pepsi

Appy FizzDabur

Cloudy Lemon

Lemon Flavour + Carbonated Water+ Sugar

200Ml.

300Ml.

500Ml.

1 Litre

1.5 Litre

2 Litre

Limca

LMN

Mirinda Lemon

Nimbooz

Coca-Cola

Parle agro

Pepsi

Clear Lemon Lemon Flavour+ Carbonated Water + Sugar

200Ml.

300Ml.

500Ml.

1 Litre

1.5 Litre

2 Litre

Sprite

7’Up

Dew

Coca-Cola

Pepsi

Rural Market Scenario

Indian Rural Market

The Indian growth story is now spreading itself to India's hinterlands. Rural India, home to about two-thirds of the country’s 1 billion population, is not

0

just witnessing an increase in its income but also in consumption and production. The interim Budget's focus on extending the National Rural Employment Guarantee Act (NREGA) to all states with a US$ 5.83 billion outlay for 2009-10 would benefit the rural economy. The rural economy got a further boost with the farmer loan waiver of US$ 13.86 billion and the ambitious Bharat Nirman Programme with an outlay of US$ 34.84 billion for improving rural infrastructure. Additionally, the rural economy has not been impacted by the global economic slowdown, according to a recent study by the Rural Marketing Association of India (RMAI). The study found that the rural and small town economy which accounts for 60 per cent of India’s income has remained insulated from the economic slowdown. Moreover, rural incomes are on the rise driven largely due to continuous growth in agriculture for four consecutive years. According to a McKinsey survey conducted in 2007, the rural India market would grow almost four times from its existing size in 2007, which was estimated at US$ 577 billion. Furthermore, high-end brands like Tommy Hilfiger are also bullish on small towns. Small towns currently contribute around 20 per cent of the brand’s sales. This could go up to one-third in two years’ time.

• ‘Rural’ – 75% population engaged in agriculture related activity.• According to industry estimates 70% of population engaged in

agricultural activity.� 700 million people (Aug. 2002)� 1/3rd of country’s GNP� 450 districts, 6,30,000 villages approx.

Rural India is also characterized by growing affluence:agricultural output increasingly to early 215 millions tones in 2004 compared to 176 millions in 1991.

Key to success in Rural India

• Physical Distribution

0

• Channel Management• Promotion and Marketing Communication

Rural Marketing Key Strategy

Three As

Availability:• Capacity expansion – 25 prod. lines and doubled bottle

capacity.• Unique and different distribution strategy – hub & spoke

distribution.• Coverage of 1,58,342 villages by Aug. 2003 (81,383 in 2001).• 2,00,000 refrigerators to rural retailers.

Affordability• Introduction of 200ml bottle Priced at Rs. 7, closed the gap

between Coke and basic refreshments.

Acceptability• Mass media marketing.• Launched TVCs targeted at rural consumers.

0

0

LITERATURE REVIEW:

1-A study of factors responsible for brand preference in fmcg sector” The purpose of this paper is the study of factors responsible for brand preference in fmcg products, increasing competition, more due to globalization, is motivating many companies to base their strategies almost entirely on building brands. Brand preference means to compare the different brands and opt for the most preferred brand. This brand preference is influenced by various factors.According to this study many factors were find out for preferring a brand likeBrand persona Brand constancy

0

Brand loftinessBrand value.In the identification of factors affecting the brand preference, it was concluded that brand persona is the most effective factor that affects the brand preference. This brand persona deals with the personality aspects or the external attributes of brand, thus it can be said that consumer prefer any brand by looking at the external attributes of a brand.

-journal of ims vol 5 no.1, jan-june 2008

2-Colour and flavour rule consumer preferences: Study

The intensity of colour and the flavour are the key drivers behind consumer acceptance of beverages, says a new study involving DANONE. But packaging and labelling are not as important for winning over consumers, according to findings published in the journal Food Quality and Preference, The study involved consumers at different stages of development and highlights the importance of adopting a “sensory marketing approach,” said the researchers from French research organisation Adriant, the University of Rennes 1, DANONE R&D, and Institute Paul Bocuse.

“Companies need to continuously innovate to maintain market leadership,” wrote the researchers. “When the market is overloaded the challenge consists in creating innovative products able to attract and satisfy consumers.” “This experiment showed the feasibility of the proposed multi-sensory design method based on mixed qualitative and quantitative approaches.” The study also demonstrates the importance of flavour and colour selection for new products.

The global flavours market was been valued at some US$18bn in 2006 (Business Insights). Meanwhile, the value of the international colourings market was estimated at around $1.15bn in 2007 (€731m), up 2.5 per cent from $1.07bn (680m) in 2004, according to Leatherhead Food International (LFI). Natural colours now make up 31 per cent of the colourings market, compared with 40 per cent for synthetics, according to LFI.

0

Bombarding the senses

By choosing to formulate a new beverage, the researchers noted that the new product would need to be differentiated by improving the sensory characteristics.

Four factors were identified for the formulation: four colour intensities), three flavourings, two label types (soft versus hard), and two pack sizes (standard versus oversize). By using both quantitative (hedonic testing) and qualitative (focus groups) approaches, the researchers found that “the main factors which drive consumer preference for this concept are colour intensity and flavouring”. Indeed, colour intensity accounted for 43 per cent and flavour 32 per cent of the consumers’ overall liking. “Pack size and label type are taken into account by the consumer to a lesser extend,” they added. “This methodology of a qualitative screening associated to a conjoint analysis on relevant sensory attributes has shown good performances to fit consumers’ expectation: it has now to be reproduced, as every brand, concept and product is a unique combination designed for a specific consumer group,” concluded the researchers

Source: Food Quality and PreferenceVolume 19, Issue 8, Pages 719-726By Stephen Daniells, 07-Oct-2008

3- Taste or health: A study on consumer acceptance of cola drinks

This study examined the relative contributions of taste and health considerations on consumer liking and purchase intent of cola drinks. Eight types of commercial cola drinks were evaluated by 305 adult consumers who also completed a brief questionnaire on food habits. Data were analyzed using factor analysis. Results revealed that purchase intent of cola drinks was

0

strongly related to degree of liking and to several key sensory attributes including saltiness, drinks flavor and greasiness. These variables emerged as the first factor in the analysis, suggesting that consumers perceive these characteristics as being most important in their choice of cola drinks. Factor 2 described a health dimension and was related to respondents' attitudes toward fat in the diet. Factor 3 comprised two remaining sensory attributes (color and crunchiness), which apparently were of minor importance to the respondents. These data suggest that in spite of current concern about reducing dietary fat, health remains secondary to taste in the selection of cola drinks for consumers in this population.

Source-Beverly J. Tepper and Amy C. Trail Journal of Food Science and Technology, 15 September 1998

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

Factors influencing buying behaviorThe various factors that affect buying behavior of in rural India are:

0

1. Environmental of the consumer - The environment or the Surroundings, within which the consumer lives, has a very strong Influence on the buyer behavior, egs. Electrification, water Supply affects demand for durables.

2. Geographic influences - The geographic location in which the rural consumer is located also speaks about the thought process of the consumer. For instance, villages in South India accept technology quicker than in other parts of India. Thus, HMT sells more winding watches in the north while they sell more quartz watches down south.

3. Influence of occupation – The land owners and service clan buy More of Category II and Category III durables than agricultural Laborers/farmers.

4. Place of purchase (60% prefer HAATS due to better quality, Variety & price) Companies need to assess the influence of retailers on both consumers at village shops and at haats.

5. Creative use of product ex Godrej hair dye being used as a paint to color horns of oxen, Washing machine being used for churning lassi. The study of product end provides indicators to the company on the need for education and also for new product ideas.

6. Brand preference and loyalty (80% of sale is branded items in 16 product categories)

0

Cultural factors influencing consumer behavior

Cultural factors exert the broadest and deepest influence on consumer Behavior. The marketer needs to understand the role played by the Buyer’s culture. Culture is the most basic element that shapes a Person’s wants and behavior. In India, there are so many different cultures, which only goes on to make the marketer's job tougher. Some of the few cultural factors that influence buyer behavior are:

1. Product (color, size, design, shape): There are many examplesthat support this point. For example, the Tata Sumo, which was launched in rural India in a white color, was not well accepted. But however, when the same Sumo was re-launched as Spacious (a different name) and in a bright yellow color, with a larger seating capacity and ability to transport good, the acceptance was higher. Another good example would be Philips audio systems. Urban India looks at technology with the viewpoint of ‘the smaller the better’. However, in rural India, the viewpoint is totally opposite. That is the main reason for the large acceptance of big audio systems. Thus Philips makes audio systems, which are big in size and get accepted in rural India by their sheer size.

2. Social practices : There are so many different cultures, and each culture exhibits different social practices. For example, in a few villages they have common bath areas.Villagers used to buy one Lifebuoy cake and cut it into smaller bars. This helped lifebuoy to introduce smaller 75-gram soap bars, which could be used individually.

3. Decision-making by male head : The male in Indian culture has always been given the designation of key decision maker. For example, the Mukhiya’s opinion (Head of the village), in most cases, is shared with the rest of the village. Even in a house the male head is the final decision maker. In rural areas, this trend isvery prominent.

0

4. Changes in saving and investment patterns From gold, land, totractors, VCR’s, LCV’s

Rural Branding

It is the process of creating and disseminating the brand name so that it is instantly

understood by the customer. It is different from branding in rural areas as there

people don’t understand English names of brands. They rather associate the

product with the picture on the package. E.g. “Laal sabun or red soap for lifebuoy.”

Creating an Identity – under this process an identity is created in the minds of the

customer. E.g. ‘TATA Namak – Desh Ka Namak’ here what TATA has done is

they have given the salt a national image. They have associated it with the country

and as a result rural consumers tend to connect with it and trust it more & they also

remember it well. Enhance Recognition – The brand should be recognizable to the

consumer and create top of the mind (TOM) consumer recall. E.g. Fevicol

‘majboot jod’. Building a brand Image – The brand should have a personality of its

0

own. E.g. Mahindra & Mahindra has built its brand image in the tractor sector.

Bhumiputra series of tractors, Sarpanch series have done very well in the rural

areas. Brand name has connected well with villagers.

RESEARCH DESIGN

A research design is a framework or blueprint for conducting the

marketing research project. It specifies the details of the procedures necessary

for obtaining the information needed to structure and/or solve marketing

research problem.

On the basis of fundamental objectives of the research we can classify research

design into two general types:

CONCLUSIVE RESEARCH

Conclusive research is designed to assist the decision maker in determining

evaluating and selecting the best course of action to take in a given situation.

Conclusive research can be further divided into two types:-

• Descriptive

• Experimental

0

The research design used in this project is a DESCRIPTIVE DESIGN.

Descriptive study as the name implies is designed to describe something-for

example the characteristics of users of a given product, the degree to which the

product use the varies with income, age, etc.

SOURCES OF DATA COLLECTION:

Research will be based on only one source i.e. Secondary data.

SECONDARY DATA:

Secondary data will consist of different literatures like books which are

published, articles, internet and websites.

0

Findings

Following are the findings taken into consideration after the completing this

research study:

• An important finding that emerged out of the study was that 57%of people like to have soft drinks while 43% go for juices. (Economics Times, 17th march2009)

• Through the research it was conveyed that weekly consumption of soft

drinks is higher than the weekly consumption of juices.

• A majority of Indian consumers consume soft drinks and fruit juices at

the time of parties & celebrations.

• Most of the consumers in rural India consume soft drinks because of its

taste and price.

• Most of the consumers consume fruit juices because it is healthy.

0

• As it is seen that canned Juices enjoys the largest market share though

they do contain some preservatives but majority of the consumers

consider it healthy.

• Most of the respondents (77%) were of the strong view that

advertisements affect their purchases and the rest (23%) were not at all

affected by the advertisements.(http://www.foodindustryindia.com)

SUGGESTIONS

• With the changing lifestyle, people have started becoming more health

conscious. Therefore, the company should use more appropriate

marketing techniques to promote their fruit juice products like Mazza,

Minute maid pulpy orange, Slice, Tropicana etc. so that they can grab

more market share.

• The study shows that parties/celebrations are the places where these

drinks are consumed mostly. The company’s must try to increase the

sales by creating and focusing on more utilities so that their product is

used more frequently.

• As it is seen that people consider canned juices to be healthy with

preservatives. This shows that awareness level of the people is low and

0

needs to be corrected. Therefore, various methods like campaigns by

government, help by media, etc can be taken to change this.

• It has been observed that people prefer to have canned soft drink for

showing their styles but the price is slightly out of their reach (In rural

market) therefore it is suggested to the companies to reduce the price of

canned soft drink up to affordable level which is identified Rs. 15.

• Companies should also use time to time some more and new attractive system of word of mouth advertisement to keep alive the general awareness in the rural market as a whole.

• Kids constitute the second largest segment of the soft drink market. So, more & more fun based advertisement for the brands should be necessary. Some life style based advertisement is also necessary.

Conclusion

India is a primarily a rural country where more than 72% people resides in rural area where main occupation is agriculture, Which is the bottom of the Indian economic system Earlier Indian farmers where known for their poorness and resurceless but now a days when government has their prime focuses in rural area backed by the huge planed expenditure to improve the rural economy of the country. In the last 50 year Indian farmers has improved a lot, their life style expenditure pattern income level, taste and preferences has seen a sea change. Many urban enmities are now a day’s present in the rural area. We can easily find the goods and services that were earlier present only in urban vicinity.

0

Today, economy is conformed to two major and far-reaching; change from domestic to global and a change from the global to rural economy. Both these changes are evolutionary. Corporate sector has already realized the vast opportunity, existing in the rural sector and are trying to harness these strategies specially aimed at rural markets.

Bibliography

www.cocacola.com

www.theeconomictimes.com

www.mofpi.nic.in

Food Quality and Preference Volume 19

0

Indian Journal Of Marketing

Journal of ims

www.foodindustryindia.com

www.rediff.com

www.google.com