39043935 Changing Indian Rural Consumer Behaviour Soaps and Detergents 1

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Changing Indian rural consumer behaviour-soaps and detergents

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1Shri Chinai College of Commerce and EconomicsProject source URL http://www.mbaguys.net/t625/



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hereb y declare that I have completed this project on

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academic year This information submitted is true and original to best of my

knowledge.

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has completed the project

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the academic year . The information submitted is true and original to the best

of my knowledge.




I EXPRESS MY SINCERE THANKS TO FOR

VALUABLE GUIDANCE IN DOING THIS PROJECT.

I WISH TO TAKE THE OPPORTUNITY TO EXPRESS MY DEEP SENCE OF

GRATITUDE TO FOR THEIR INVALUABLE

GUIDANCE AND SUPPORT IN THIS ENDEAVOUR. THEY HAVE BEEN A

CONSTANT SOURCE OF INSPIRATION.

FINALLY IT IS THE FOREMOST DUTY TO THANK ALL MY RESPONDENTS,

FAMILY & FRIENDS WHO HAVE HELPED ME DIRECTLY OR INDIRECTLY IN

COMPLETING MY FIELD WORK, WITHOUT WHICH THIS PROJECT WOULD

NOT HAVE BEEN SUCCESSFUL.




1.1-introduction1.2-need for studying consumer behavior

2.1-different segments2.2-increasing awareness2.3-changing trends in Indian rural consumer

3.1-Impulse to go rural3.2-Impact of globalization3.3-rural v/s urban consumer3.4-branding positioning3.5-branding strategy in rural place

4.1-HLL v/s NIRMA4.2-SWOT analysis4.3-pricing strategy4.4-companies in rural India




This study on Indian consumer behavior is aimed to get a better understanding of the

Indian market place thus enabling them to embark on selected strategies to effectively

reach the Indian RURAL consumers.

India is a big country with 28 states, over one billion people and 120 dialects/languages.

From the market perspective, people of India comprise different segments of consumers,

based on class, status, and income.

An important and recent development in India’s consumerism is the emergence of the

rural market for several basic consumer goods. Three-fourths of India’s population lives

in rural areas, and contribute one-third of the national income.

India is a lucrative market even though the per capita income in India is low and it

remains a huge market, even for costly products.

This project report focuses on changing behaviour of rural consumers. However I have

restricted report finding and analysis to detergent and soap category. This is done in-order

to draw boundary lines of project and make the report specific. Moreover the study

includes primary analysis of survey done in rural area on detergent and toilet soaps. The

survey focuses on understanding consumer behaviour towards toilet soaps and detergents.

I hope this report of mine will be useful for further learning.




Analyzing consumer behavior is perceived as cornerstone of a successful marketing

strategy. Consumer behavior is ‘the mental and emotional processes and the observable

behavior of consumers during searching purchasing and post consumption of a product

and service. Similarly consumer behavior as the action and decision process of people

who purchase goods and services for personal consumption.

There are four different views related to consumer decision making process and behavior.

It is argued that first of them is ‘economic view’ that consumers are primarily facing

imperfect competition and they are always expected to make rational decision on the

basis of assumptions that they are aware of all product alternatives, they can rank benefits

and limitation of each alternative and are able to identify one best alternative. Second

‘Passive View’ is absolutely opposite to economic view and suggests that consumers are

irrational and impulsive as they are submissive to self-centered interests of marketers and

got influenced by marketing tools. Similarly third, ‘ Emotional View’ is related to

perceive consumer’s decision making based on their emotional association or feeling

about some products and services. For instance, a person loosing red color specific pen

neither go for rational decision by evaluating alternatives ( economic view) nor will the

person get influenced by marketers ( passive view). Rather the person will try to purchase

any pen closely resembled with his favorite possession. Fourth and arguably most

acknowledged view is ‘Cognitive View’ where consumers are considered as “thinking

problem solver’ which are receptive as well as actively searching for the products and

services that can fulfill their need. Consumer’s behavior under this view is based on

information seeking and processing attributes usually directed by a goal. For instance,

buying a tooth paste from shop can have a certain goal of choosing product that can taste

good. Despite of critiques for each viewpoint, it can be considered a valid argument, that

all four types of decision making behavior exist and provide marketer guidelines to

analyze consumer accordingly. Based on general perception about most acknowledged

and common ‘cognitive view’, asserts broader stages of a consumer’s decision making

process that includes problem identification , information search, evaluation of

alternatives , outlet selection and purchase and post-purchase action




Consumer behaviour can be said to be the study of how individuals make decisions on

how to spend their available resources (time, money, effort) on various consumption-

related items. This simple definition of consumer behaviour tells marketers to resolve

every activity around the ultimate consumer and gauge their behaviour by specifically

focusing on:

• Who buys the products or service?

• How do they buy products or services?

• How often do they buy them?

• When do they buy them?

• Why do they buy them? And

• How often do they use them?

This questions will help in understanding better what factor influence the decision

making process of the consumers. The decision making process identifies the number of

people who are involved in this process and ascribes a role to them – like the users,

decider, influencer, and buyer.

It is believed that consumers or customers make purchase decision on the basis of receipt

of a small number of selectively chosen pieces of information. Thus it will be very

important to understand what and how much information is required by the customer to

help them to evaluate the goods and services offerings.

The involvement of the customer in the decision making process will vary with the type

of purchase involved – like incase of complex product there will be high involvement and

so on. Thus it is very important to understand what customers feels will help them to able

to evaluate goods and services.




The consumer decision making process goes beyond the facets such as what features or

the product design will be acceptable to consumers, what benefits are they seeking from

their products, what price will be suitable etc. Today consumer behaviour also includes

the post purchase satisfaction or dissatisfaction behaviour. Because the post purchase

behaviour will have repercussions on the communication (word of mouth) they have with

the firm’s prospective customers. Usually there are two types of customers – the personal

consumer and organizational consumer.

Right from the stimuli till the consumer response, there are many individual and

environment influencing the consumer purchase decisions.

The type of buying situation will be different but the categorization in terms of low

involvement and high involvement purchases made by individual is similar.

The marketers look into the decision-making unit in both the cases i.e. personal purchases

as well as the industrial purchases. Then depending upon the ‘role’ of the person who is

most likely to influence the decision they decide to more of the promotional efforts at

them.




Socialites belong to the upper class. They prefer to shop in specialty stores, go to clubs on

weekends, and spend a good amount on luxury goods. They are always looking for

something different. They are the darlings of exclusive establishments. They go for high

value, exclusive products. Socialites are also very brand conscious and would go only for

the best known in the market.

The Conservatives belong to the middle class. The conservative segment is the reflection

of the true Indian culture. They are traditional in their outlook, cautious in their approach

towards purchases; spend more time with family than in partying and focus more on

savings than spending. Slow in decision making, they seek a lot of information before

making any purchase. They look for durability and functionality but at the same time is

also image conscious.

They prefer high value consumer products, but often have to settle for the more

affordable one. These habits in turn affect their purchasing habits where they are tr ying to

go for the middle and upper middle level priced products




About three quarters of the Indian population are in the rural areas and with the growing

middle class, especially in the Indian cities; the spill over effect of the growing urban

middle class is also felt in the rural areas.

The Indian rural market has been growing at 3-4% per annum, adding more than 1

million new consumers every year and now accounts for close to 50% of the volume

consumption of fast-moving consumer goods (FMCG) in India. The market size of the

fast moving consumer goods sector is projected to more than double to US$ 23.25 billion

by 2010 from the present US$ 11.16 billion. As a result, it is becoming an important

market place for fast moving consumer goods as well as consumer durables.

Over the years, as a result of the increasing literacy in the country, exposure to the west,

satellite television, foreign magazines and newspapers, there is a significant increase of

consumer awareness among rural consumers.

Today more and more rural consumers are selective on the quality of the

products/services.

This awareness has made the Indian rural consumers seek more and more reliable sources

for purchases such as organized retail chains that have a corporate background and where

the accountability is more pronounced. The consumer also seeks to purchase from a place

where his/her feedback is more valued. Indian rural consumers are now more aware and

discerning, and are knowledgeable about technology, products and the market and are

beginning to demand benefits beyond just availability of a range of products that came

from ‘trusted’ manufacturers.

The Indian rural consumers are price sensitive and prefer to buy value for money

products.




Urbanization is taking place in rural India at a dramatic pace and is influencing the life

style and buying behaviour of the consumers. The rural consumers are depending more

on fast and ready-to-serve food, they take less pain in traditional method of cooking and

cleaning.

Bulk purchases seems to be the trend these days with purchasing becoming more of a

once-a-week affair, rather than frequent visits to the neighborhood market/store/vendor.

The popular growing shopping trend is purchasing from malls to supermarkets.

The current Indian rural consumer bu ying behaviour to a large extent has urbanize

influence. There is an increase in positive attitude towards trends. The Indian rural

consumer has become much more open-minded and experimental in his/her perspective.

There is now an exponential growth of trend reaching the Indian consumer by way of the

media and other mediums.

Indian rural consumers have also developed lifestyles which have emerged from

changing attitudes and mind sets; exposure to western influences and a need for self-

gratification. Beauty parlors, eateries, designer wear, watch, hi-tech products are a few

instances which reflect these changes.

The sellers’ market is slowly moving towards becoming the buyers’ market.

Since, India’s economic liberalization policies were initiated in 1991, many new product

offerings have entered the Indian market and product variety has also increased manifold.

Import licensing restrictions are being eliminated and tariffs significantly reduced and

this has led to large range of consumer goods made available in India.




The Indian consumer spending has increased from US$ 133.60 in 1992-93 to US$ 350.74

in 2002-03, a compound annual growth of 10.13 per cent at current prices.

The way Indian consumers are spending their money on various items has changed in

recent years. The share being spent on the basis (food and beverages) has fallen from

54.07 per cent in 1992-93 to 44.8 per cent in 2002-03. Other items have increased in

importance, for example, medical and healthcare spending has increased from 3.5 per

cent to 8.5 per cent of total expenditure over the same period, a compound growth rate of

19.71 per cent. Similarly spending on transport and communication has grown at 13.2 per

cent.

While the Compound Annual Growth Rate (CAGR) in total consumer spending has been

around 12 per cent a year over the past decade, there have been sharp ups and downs.

Consumer expenditure has been in tandem with the annual GDP growth.

For the urban sector, average Monthly Per Capita Consumer Expenditure (MPCE) of

US$ 23.53 was split up into US$ 10.00 for food and US$ 13.53 for non-food. Of food

expenditure, US$ 2.37 went towards cereals and cereal substitutes while US$ 3.67 was

spent on milk, milk products, vegetables and edible oil and US$3.96 on other food items.

US$ 2.11 was spent per person per month on fuel and light, and US$ 1.65 on clothing and

footwear and US$9.77 on other non-food items.




Non-food expenditure per person in the urban sector was more than double of that for the

rural sector, where it was about US$ 5.55.

In India, the higher income group (>US$2,465) spends more amount of their income on

luxury goods and trendy products than fact moving consumer products.

The middle income group (US$1,162 – US$1,190) spends more on consumer

expendables than the rich.

Combined the middle and the lower income group provide 60 per cent of the value of the

Indian market.




The Indian rural Fast Moving Consumer Goods (FMCG) industry began to shape during

the last fifty odd years. The FMCG sector is a cornerstone of the Indian economy. This

sector touches every aspect of human life. Indian FMCG market has been divided for a

long time between the organized sector and the unorganized sector. Unlike the US market

for FMCG which is dominated by a handful of global players, India’s Rs. 460 billion

FMCG market remains highly fragmented with roughly half the market going to

unbranded , unpackaged home made products.

This presents a tremendous opportunity for makers of branded products who can convert

consumers to buy branded products. Globally, the FMCG sector has been successful in

selling products to the lower and middle income groups, and the same is true in India.

Over 70% of sales is made to middle class households today and over 50% is in rural

India. The sector is excited about a burgeoning rural population whose incomes are rising

and which is willing to spend on goods designed to improve lifestyle. Also with a near

saturation and cut throat competition in urban India , many producers of FMCGs are

driven to chalk out bold new strategies for targeting the rural consumer in a big way.

MART, the specialist rural marketing and rural development consultancy, has found that

53 per cent of FMCG sales and 59 per cent of consumer durable sales lie in the rural

areas. 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. According to a study by Chennai-

based Francis Kanoi Marketing Planning Services Pvt Ltd, the rural market for FMCG is

worth Rs.65,000 crore, for durables Rs 5000 crore, for tractors and agri-inputs Rs.45,000

crore and two- and four-wheelers, Rs.8000 crore. In total, a whopping Rs.123,000 crore.

This could be doubled if corporate understood the rural buying behaviour and got their

distribution and pricing right.




There are many reasons that has urged the FMCG companies to enter the uncharted

territory of rural India. Some of the attractions are discussed below;

The rural Indian population is large and its growth rate is also high. Over 70% India’s

one billion plus population lives in around 627,000 villages in rural areas. This simply

shows the great potentiality rural India has to bring the much needed volumes and help

the FMC G companies to bank upon the volume driven growth.

India is now seeing a dramatic shift towards prosperity in rural households. To drive

home the potential of rural India just consider some of these impressive facts about the

rural sector. As per the National Council for Applied Economic Research (NCAER)

study, there are as many ‘middle income and above’ households in the rural areas as there

are in the urban areas. There are almost twice as many ‘lower middle income’ households

in rural areas as in the urban areas.

According to NCAER projections, by 2006 – 07, the lowest income class (i.e.Rs.2500

and below) will shrink by more than 60%. The higher income classes are likely to double




by 2006 – 07. This apparently is the result of development work, which happened under

the five years plans and other special programmes such as land reforms, rural

electrification rural communication, and rural credit facilities, etc. The absolute size of

the rural market is thus expected to double that of urban India. But despite the high rural

share in these categories, the rural penetration rates are low, thus offering tremendous

potential for growth.

According to Mr. D. Shiva Kumar, Business Head (Hair), Personal Products Division,

Hindustan Lever Limited, the money available to spend on FMCG (Fast Moving

Consumer Goods) products by urban India is Rs. 49,500 crores as against is Rs. 63,500

crores in rural India.

The purchasing power in rural India is on stead y rise and it has resulted in the growth of

the rural market. The market has been growing at 3-4% per annum adding more than one

million new consumers every year and now accounts for close to 50% of volume

consumption of FMCG. The growth rates of lot of FMCG are higher in rural markets than

urban markets. In product categories like toilet soaps, talcum powder, cooking oil,

vanaspati ghee, tea, cigarettes and hair oil, the share of rural market is more than 505.

The estimated annual business from rural markets was Rs 1,23,000 crore, comprising Rs

65,000 crore of FMCG, Rs 5,000 crore of durables, Rs 45,000 crore of agricultural inputs

including tractors and Rs 8,000 crore of two-wheelers and four wheelers.

Twenty nine per cent of the rural people own cars, 27 per cent own colour televisions, 24

per cent own refrigerators and 10 per cent own washing machines, which points to the

untapped potential in the rural areas. Companies therefore have to look at the rural

market very seriously for future expansion.




An important tool to reach out to the rural audience is through effective communication.

A rural consumer is brand loyal and understands symbols better. This also makes it easy

to sell look -alike. The rural audience has matured enough to understand the

communication developed for the urban markets, especially with reference to FMCG

products. Television has been a major effective communication system for rural mass

and, as a result, companies should identify themselves with their advertisements.

Advertisements touching the emotions of the rural folks, it is argued, could drive a

quantum jump in sales.

Today there are over 15 million villagers in India who are aware of the Internet and over

300,000 villagers have used it! Ten years back, history was created with Public Call

Office phone booths (essentially manually operated payphone facilities), opening in

every corner of the country. This experiment was an instant success and contributed to

hundreds of thousands of jobs. Over the next two years, WorldTel is expected to provide

1000 centers in Tamil Nadu with 2 to 20 terminals in each centre. If successful, this

experiment can be replicated easily to all 27 states leading to over half a million Internet

users through this experiment alone! The existing 600,000 public call offices in India will

soon be transformed into public 'tele-info-centres' offering a variety of multimedia

information services. The rural consumers spend time and money to access higher level




information. Studies have indicated that if the content has direct relevance and will result

in commercial gains, people in rural areas are willing to pay for information services.

Consumerism has altered rural buying behavior in recent years. Spending patterns of

those who spend are now adapting to face the technology bug. Today's rural children and

youth will grow up in an environment where they have 'information access' to education

opportunities, exam results, career counseling, job opportunities, government schemes

and services, health and legal advice and services, worldwide news and information, land

records, mandi prices, weather forecasts, bank loans, livelihood options. If television

could change the language of brand communication in rural India, affordable Web

connectivity through various types of communication hubs will surely impact the

currency of information exchange. As the electronic ethos and IT culture moves into rural

India, the possibilities of change are becoming visible.




The rural-urban divide does exist. In many cases, the rural consumer, unlike the urban

one, can't appreciate ads that are clever, gimmicky, suggestive or hi-tech

• The rural consumer is very conscious about getting value for money.

• He understands symbols and colors better, and looks for endorsement b y local leaders

or icons.

• He doesn't like to pay extra for frills he cannot use.

• He has his daily routine, and there is no sense of urgency in his lifestyle.

• He has a very high involvement in any product purchased, especially when he decides

to buy high-end products, which cost a few hundreds or thousands of rupees.

Divisions based on caste, community and other hierarchical factors continue to exist in

rural areas. Perceptions, traditions and values vary from State to State and, in some cases,

from region to region within a State.

The case of a well-known brand of shampoo. When it entered the Rajasthan market some

decades ago, with a theatre commercial that showed a beautiful model featuring bouncing

hair, the product bombed. Post-research showed that it was considered indecent for a girl

to show off her hair, and the audience refused to connect with the brand.




Similarly, MRF bullock cart tyres, there was glaring differences between Western UP and

Eastern UP. While bullock carts in Western UP were smaller vehicles with single

buffalos, in Eastern UP, they were bigger vehicles pulled by two bullocks. In Western

UP, villagers spoke Hindustani whereas in Eastern UP, they spoke Bhojpuri. When we

developed the communication package, we had to keep the above factors in mind.

The first step in the development of any communication package is the in-depth study of

the mindset of consumers of each region for each product category. Remember, it is

suicidal to blindly extend the experience of one product category to another.

While the importance of conceptualizing in the local languages (to capture the local spirit

in the communication aimed at specified rural audiences) is known, what is very often

overlooked is that a rural consumer is not in a hurry and you can take your time to

communicate a message. The quickies beamed on television media, which very often go

over his head, are not for him. In fact, commercials or short tele-films of two minutes or

more do much better.

• Rural folks do not understand clever, gimmicky, quick (fast-paced), suggestive and

hi-tech films.

• Use of unrelated symbols, characters and icons confuse and distance them.

• They want a clear connection between the problem and the solution offered by a

brand.

• It is important to be clued to the region-specific requirements and cater to the typical

tastes of the regional consumers, both in terms of product offerings and

communication packages."

• Creating brands for rural India is a science that will require many ardent students who

are willing to participate in this great big task of doing the different thing altogether

in Branding




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 research approaches to get at brand objective.

While using the logo, hoardings and exhibits, suitable jargons have to be deployed in the

word association. People can be asked what strikes in their mind when they hear the

brand's name.




Visual control mechanism plays a vital role in identifying the brands in terms of

personification. People can be identified the brands when seeing the visual pictures

described.

Brand essence relates to the deeper, more abstract goals consumer and trying to satisfy

with the brand. The attribute, a functional benefit and an emotional benefit brand essence

constitute a technique known as laddering up.

Brands are increasingly getting more entwined with our lives. The debate today is not as

much about 'why branding' as above defining a meaningful role for a brand in the

consumer's life.




1. Separate your brand from your competitors in a unique way

2. Relevant and motivating to your customers

3. Prospects and channels-it gives you value and make you special.

4. Enhance your perceived value, there by supporting premium pricing, sheltering you

from low price competition.

5. Contributing to share holder value.

6. Provide resilience in times of negative press.

7. Enable you to launch new products more quickly and cost effectively

As branding can make or break a product, marketer should handle it with the same

concern as the artisans show in their work. All the activities that are taken under the

umbrella of a brand add to or subtract from the value. The customer's evaluation of a




brand is a result of all the consumer experiences he has had with the brand. Consumer

experience includes product, services, personal contacts, advertising, promotions, word of

mouth, etc.

This mix of memories, which are built up over a long time, makes the brand potentially

the most powerful liver of the intangible perceived values. After all the first thought that

comes to the mind of the customer prior to the purchase of the product is 'who has made

it', if that brand has good reputation, it raises the level of confidence on the part of the

customer to buy the product.

India is shining then! India is Unique in many ways. A population that is large,

heterogeneous, largely English speaking and a cultural heritage that runs back to

thousands of years. India is young. India is vibrant. The major segmentation of mass

population is located in rural area. So, the market potential is large in number. So we can

expect the market strength in rural area. Now, the educational Institutions are also

concentrating on rural marketing and doing market research in rural places. Rural

markets are rapidly growing in India but have often been ignored by marketers. Most of

them are remote-fully ignorant due to the reason of diversification of products produced

thereby slitting into disposable income.

The rural market is a fast growing one and has a huge population with a great level of

disposable income. To encash this, products have to be specifically developed to meet the

needs of rural markets. Sometimes, existing products might have to be modified to suit

these markets too accordingly.




Rural product development has the strong edifice on a great deal of research like

feasibility studies, rural aspiration, rural profiling and so on. This paves way for a great

deal of infrastructure and expertise in this area.

Rural branding bears quite different stand from urban branding. The first step towards

rural branding is to research and gain insight into the working of rural markets. Based on

this communication campaigns have to be developed with a lot of rural sensitivity.

Rural branding is attained by way of opting to a greater percentage of local media and a

smaller percentage of the mass media. Rural gatherings like temple festivals, melas, and

cinema halls and so on can be used as venues to promote brands. Direct Marketing and

events like road shows; film shows, melas, street theatre can also be used to promote

brands.

A well-planned rural branding campaign cannot just create brand awareness but help your

target relevant to your brand and promote sales. A long-term campaign will keep your

brand at the top-of-the-mind and build brand loyalty. So the brands are in safe hands.

Rural markets behave most differently from urban markets. While many marketers have

tried to market their products in rural areas, just a handful of the same only has

succeeded. A strong insight into rural consumer behavior and sensitivity to their values

and beliefs is essential; to upgrade the rural market rural market research encompasses

not just gathering data but analyzing them and linking the findings to promoting your

products.

Communication for rural markets calls for a different kind of outlook. There must be a

strong accent on helping the target relate to the message.




The entire communication and media strategy has to devise a system based on research

findings. These have to be developed in the regional vernacular languages and set in the

local culture for easier acceptance and reach. Unlike communication campaigns in urban

areas that rely greatly on the mass media, the strategy will be of crying in the wilderness

in rural areas. Besides mass and outdoor media, rural extravaganza like temple festivals,

melas and other events where the villagers come together can be used for promotions.

In the rural context, one of the best ways to capture the attention of the audience is

through Event-management. Since rural areas have limited venues for entertainment,

conducting an event in rural areas can bring a good response.

A well-planned event can get the product the mileage that we want. Some of the

interesting events that can be conducted are Road Shows, Melas, Street-Theatre, Film

Shows and so on. These make a visually strong impact and build long term brand recall.

Rural public are the target audience and hence the portfolio of event management has to

be handled professionally with diligent care and broad perspective.

Direct Marketing (DM) is one of the most powerful way to meet the target on their turf

and build product awareness as well as promotion. The success of any DM campaign

depends on the field workers and their sensitivity and emotional connectivity to rural

markets.

In the area of Direct Marketing, rural team has to be trained, to be sensitive to rural

culture and beliefs. They can handle activities like Door-to-Door sampling, marketing

and product promotion. These activities can also be carried out innovatively at places like

local cinema halls, melas and festivals, in the midst of cross-cultural gatherings and

conglomerations.




The consumer product industry consists of personal care, cosmetics and home products.

The sector is sub divided into dental care, soaps, detergents, surface cleaning products,

skin care and hair care products.

Segments Market Size Penetration

Rs bn Urban Rural

Hair Color 2.4 20 % 10.0%

Skin Care 7 40% 10.0%

Oral Care 21 75% 20.0%

FMCG products like detergents are of low value but the cumulative budget allocated to

FMCG products by consumers is significant. The price and income elasticity of demand

varies across products. FMCG products are backed by heavy advertising and sales

promotion to induce consumers to buy. FMCG products are neither capital intensive nor

technology intensive. That is, technology is easily available and stable. One of the key

features of the FMCG industry is third party manufacturing (TPM). TPM used to offer

fiscal advantages, especially excise- duty, that has now been rationalized. It provides

other benefits like:

Allowing the company (say HLL) to concentrate on marketing and liberate

manufacturing and the associated overheads & inventory.

Reduction in labor costs. Third party manufacturers are usually small because of

which overheads and labor costs are low. These companies do not have the problems

arising out of unionization that big companies face.




Greater control over logistics. It is often necessary to get the product manufactured

near the market to control logistics. A company may enter into agreements with many

third party manufacturers instead of setting up plants all over the country.

The market for detergents is dominated by HLL and Procter & Gamble with four other

companies in the organized sector - Godrej Soaps, Shaw Wallace, Colgate Palmolive and

Nirma. In addition there are numerous players in the unorganized sector. In 1995 the

detergent market was estimated at Rs 6500 cr. Exhibit 10-3 presents a snapshot of the

detergents market. The soaps and detergents industry does not face shortages of raw

material as major ingredients like soda ash, vegetable oils; Linear Alkyl Benzene and

Sodium Triphosphate are available. s.




Product Company Price Per Kg.

Ariel Green P&G Super Nirma NIRMA

180 50

Ariel Front O Mat P&G Ariel Gain Super Soaker P&G

175 49

Ariel Power Compact P&G Rin Shakti HLL

155 37

Tide Detergent P&G Mr White HENKEL SPIC

85 35

Surf Excel Matic HLL

160

Surf Excel HLL

135

Surf Washing Powder HLL Nirma Washing powder NIRMA

82 18

Rin Supreme HLL Nima Green NIRMA

75 18

Henko Compact HENKEL SPIC Wheel Blue HLL

135 22

Henko Matic HENKEL SPIC OK detergent HLL

95 18

Henko Stain Champion HENKEL SPIC Wheel Green HLL

81 18




Overall Market Share

OthersHLL5%35%Small

Scale30%

Nirma30%

The major players are: HLL, Nirma,

Henkel Spic (included in others), P & G

(included in others), Small-scale players

Region Wis e Sales Of WashingPowder

eastsouth17%14%

west23%

nort h46%

Detergents are used by every

household throughout the

country

North India is the largest detergent market in India while south India is the

smallest detergent powder market across the country




Consumer habits, practices & perceptions

Most Indian urban

housewives do a system wash

ie they first soak the clothes

in a bucket with powder for

some time followed by

scrubbing with bars

Laundry soaps and synthetic

detergent Bars are relatively

more popular in the rural

areas as tap water is not

easily available in many

villages.

In Synthetic Detergents, bars are also more popular than powders due to cheaper

pricing.

Fragrance is one of the key benefits sought after by consumers, as it connotes

freshness and newly washed clothes.

Consumers attribute greatest importance to whiteness while washing.

Many consumers in lower and lower middle class feel that daily washing of

clothes leads to faster and higher wear and tear of clothes

Washing powders are more popular in the western and northern regions whereas

cakes/bars are more popular in the South.

There is widespread use of detergent powder for other purposes such as washing

utensils and cleaning floors.

Liquid detergents are still not widely used. Usage is restricted for special fabrics

and expensive clothes.

Niche products like fabric softeners, stain removers; color fixers are not widely

used.

Homemade remedies such as application of kerosene/lemon for stain removal,

Salt as color fixer etc are popular.




Product range (wide)

Pricing

Packaging (sachet)

Place in world

Turnover

Profits

Backward integration on the Weak financial position

manufacturing process High interest cost on new projects

Focused on mass market mainly Minimal focus on urban market

rural India - household name

Low price high quality

Distribution network

Introduce detergents in the Price wars among detergents in the

premium segment premium and economy segments

Markets abroad like Bangladesh, Competition from HLL

Nepal & parts of Africa Unorganized sector proving products

Acquiring global market share at the same or lower price




Market leader Finding funds for long term growth

Distribution network without depressing margins further

Caters to all the 3 segments of Declining sales and profits

detergent market

Strong brand equity

Expanding in out-of-home A repricing strategy in detergents has

segment eroded HLL’s profitability.

HLL operates in all the three segments of the market segment wherein the

premium segment includes detergents falling in the price range of Rs. 75 to Rs.

160 per kg, the economy segment includes Rin Shakti at Rs. 37 per kg and the

popular segment includes detergents falling in the price range of Rs. 18 to Rs. 22

per kg

HLL has incurred losses in the last quarter due to their price reduction under its

competitive price war. Earlier it was incurring profits through its detergents

having high prices and maintaining its leadership.

Nirma operates in the popular and economy segment whrein the economy

segment includes super Nirma at Rs. 50 per kg and the popular segment includes

detergents at Rs. 18 per kg

P&G operates in the premium and economy market wherein the premium

segment includes detergents falling in the price range of Rs. 85 to Rs. 180 per kg,

the economy segment includes Ariel Gain Super Soaker at Rs. 49 per kg




Price

Place

Product

Promotion

Nirma detergent powder launched in the mid- Seventies at one-third the price of its

competitor HLL’s Surf. It proved to be hugely successful. To counter Nirma, HLL

brought in its own low-priced detergent powder called Wheel, which also emerged

successful. Launching such low priced variants might mean diluting a premium brand’s

quality and more importantly equity. MNCs are therefore wary of doing this.

Nirma products are usually priced at a lower rate while HLL uses mid range or high

prices

The reach of Nirma and HLL is listed in the table. HLL promotes its products heavily

leading to increased customer awareness and it also has a wider product range, which

differentiates it from Nirma.




Flagship Brand – Surf

Positioning - Premium

Other brands – Rin, Wheel, Sunlight, OK, 555, Ala, Comfort

Surf Excel has been positioned as detergent which has excellent stain removing

capability. However surveys revealed that consumers worried that colored clothes

might wear off faster due to regular use of such high powered detergents. HLL

has therefore changed its advertising theme line from ‘ Surf Excel Hai Na’ to ‘

Daag Hataye, Rang Nahin’.

HLL has adopted a flanking strategy with its brands catering to every customer

segment. Rin and its variants cater to economy segment and premium segments.

Wheel was launched to fight Nirma in the popular end of the market.

Project Shakti

Reinventing the distribution channel

Health and beauty services like Lakme beauty Saloon & Ayush Therapy Centers.

Flagship Brand – Nirma

Positioning - Popular

Other brands – Nima, Super Nirma

Nirma follows the ‘Value for Money’ strategy for all its products and both its

brands cater to the popular segment of the market. Super Nirma, its brand in the

high end of the economy segment is not a focus area for growth.

Nirma follows the backward integration strategy to become the lowest cost

detergent manufacturer in the world

The company has set up a parallel distribution and sales channel for Nima. This

consists of 2000 distributors and an independent sales force. A two-tier network

(as against the traditional three tier), the Nima distribution channel is 'flat'

enabling swift market response

Initiative to expand business in Bangladesh & Pakistan




Nirma will employ effective marketing strategies & continue to reduce cost to

counter increasing price competition

Flagship Brand – Ariel Compact

Positioning - Premium

Other brands – Ariel Super Soaker, Tide

Ariel is positioned in the premium category and is among the most expensive

hand available in the Indian market. The company has launched mid priced

brands like Ariel Super Soaker to cater to the lower income group consumer,

which forms a significant potion of the Indian market.

Tide prices have been slashed b y 30% to Rs85 per kg. The company hopes that a

semi premium price positioning will enable it to grow its market share, which has

been stagnating since the last 2-3 years. The price reduction has been possible due

to the company being able to save significantly on distribution costs through

supply chain initiatives and a successful distribution-restructuring project called

the Golden Eye

.7

1. Surf was launched in 1959.

2. In 1996, Surf redefined this completely when it launched Surf Excel.

3. A pioneer in the Indian detergent powder market.

4. Surf Excel is available in 3 variants:




Various Schemes & Contests-

1. Bucket Scheme

2. 10/10 Contest

Benefits to Distributors & Retailers

1. Distributors-3%

2. Retailers -10%

1. Ariel was introduced in India in 1991.

2. Ariel gives you impeccable cleaning in stain removal.

3. Ariel contains unique ingredients that cannot be found in other detergents.

4. Ariel is available in 3 variants:

Promotions

1. Tie-Up With Companies

2. Shiksha Programme

3. Advertisement




The toilet soaps market is estimated at 530,000 tpa including small imports. Hindustan

Lever is, of course, the market leader.

The market is littered over with several, leading national and global brands and a large

number of small brands, which have limited markets. The popular and premium brands

include Lifebuoy, Lux, Cinthol, Liril, Rexona, and Nirma.

Toilet soaps, despite their divergent brands, are not well differentiated by the consumers.

It is, therefore, not clear if it is the brand loyalty or experimentation lured by high volume

media campaign, which sustain them. A consequence is that the market is fragmented. It

is obvious that this must lead to a highly competitive market. Toilet soap, once only an

urban phenomenon, has now penetrated practically all areas including remote rural areas.

The incremental demand flows from population increase and rise in usage norm impacted

as it is by a greater concern for hygiene. Increased sales revenues would also expand

from up gradation of quality or per unit value.

As the market is constituted now, it can be divided into four price segments: premium,

popular, discount and economy soaps. Premium soaps are estimated to have a market

volume of about 80,000 tones. This translates into a share of about 14 to 15%. However,

by value it is as much as 30%.

Price is the most important factor which effects the buying behavior of consumer, by

which a consumer goes for the various segment of soap like premium, popular, sub-

popular and carbolic which are basically decided by the cost factor and fat content in the

soap.

The buying frequency is either monthly that is done by the families or in case of

bachelors it is more than once in a month. The occasions when premium soaps are




purchased are usually when there are festivals and ceremonies. Moti Soaps are usually

presented during festivals and occasions for presents and gifts.

The promotional techniques help to boost sales. Various tactics like the price off’s, buy

one get two free, free gifts and other schemes help boost sales in short run and also help

in clearing stocks.

One of the important points a soap marketer should note is that the soaps are usually

purchased by women in urban areas as most of the day to day consumption of personal

care products are made by women. A point to note is that women use more personal care

product than men do and hence premium soaps are mostly targeted at them. Men

normally make purchase decisions in rural areas. Hence the marketer has to adopt

different strategy for such a market.

Demand

1999-00

r 1996-97aeY Tonnes

1993-94

1990-91

0 200 400 600

Tonnes

The market shows a seasonal behavior for some brands, i.e. the brands change as per the

customers' need for that particular season. For e.g. in summer - running brand popular

and sub-popular most of the buyer take bath twice in a day specially in northern belt, in

monsoon - running brand antiseptic and medicated soap, in winter running brand

premium (moisturizer and creamy soap).




1. Beauty - Lux

2. Freshness – Liril, Cinthol

3. Natural – Medimix, Margo

4. Baby – Johnson & Johnson, Doy

5. Cream – Dove, Doy Care (moisturizing)

6. Medicated – Dettol, Savlon,

7. Glycerin – Pears, Emami

One of the factors, which affect the demand of soaps, is the penetration, which the

products have in market. In case of soaps this has not been a major issue as the

penetration in the rural area is as high as 97% and that for urban area is around 99%.

Thus the approximately the penetration is around 99% for overall India.

Market Sh are

srey

O th er s 14. 8alP

4 .4

1 6.8

H LL 6 4

0 1 0 2 0 3 0 40 50 6 0 7 0

% S ha r e

In terms of market share, the data indicates that HLL had a market share of 64 per cent in

the soap mar ket, followed by Nirma at 16.8 per cent and Godrej at 4.4 per cent. However,

when contacted by ET, Nirma officials said their market share was in the region of 21 per

cent.




Hindustan Lever is the largest contributor to the toilet soaps market of India. It enjoys

almost a two-thirds share, with the second ranked Nirma Soaps placed at a distantly low

share of 16.8%. Lux and Lifebuoy have held the sway of the market for almost fifty

years. While the former brand remained the preserve of the high-end rich consumers,

Lifebuoy ruled the roost with health-conscious users as a hygienic soap. The products

underwent up-gradations with the introduction of versions like International Lux and

Lifebuoy Personal. In between came brands like Nirma Rose, Nirma Beauty Soap,

Breeze, Caress, and LeSancy. In 1993 came Dove. Earlier, Liril made waves with its

lemon touch and bathing acrobatics.

At the medium and lower rungs, brands like Hamam, Moti, Jai, Rexona (third largest

brand) were well supported by OK and later by OK NSD Bar.

While Pears has dominated as high profile specialty soap, HLL undertook, in 1992, a

project to manufacture the product for the world market at Khamgaon in Maharashtra.

Commercial production commenced in 1993.

To provide a sound base to its toilet soaps operations, HLL has also branched out into

other toiletries like shampoos and related products like glycerin, fatty acids.

Godrej Soaps had a disappointing experience in forging an alliance with Procter &

Gamble (P&G). Infact P&G is withdrawing itself from the premium soap segment like

Camay.

P & G has now a fully-owned subsidiary in India and now it is concentrating more on

personal care products..

Godrej is promoting a number of brands, Cinthol, Ganga, Shikakai, Fairglow, No.1 and

Crowning Glory, while it has others to bother about such as Vigil and Fresca. Cinthol

ranks third and accounts for 60% of all Godrej Soap's brands. It is an old brand launched

about five decades ago in early 1950s. New Cinthol Lime and Cologne gave it a new look

in 1985. Two variants were introduced in 1989 placing an added emphasis on their brand

of soaps. Its deodorant and complexion soap is styled as Cinthol Spice. Cinthol is




perceived largely as a male soap, as Lux is a lady's soap. Ganga did well and a new

version Doodh Ganga has been introduced. Ganga had notched up a 5% market share but

declined to 2% later with sales at Rs 350 mn. Godrej wants to revive it.

Even Nirma has achieved a significant penetration and has notched up an impressive

60,000 tones sale in just three years. Nirma Ltd has been putting up a backward

integration plant to produce soda ash and linear alkyl benzene (LAB).

It seems Indians have sacrificed hygiene at the altar of thrift. If numbers are anything to

go by, Indians do seem to be washing themselves, as well as their clothes, rather less.

Data collated by industry certainly points to this rather unpleasant conclusion. The

consumption of soaps and detergents has shrunk substantially with volumes declining by

11.5 per cent and consumption of detergents declining by 4.1 per cent in the year.

The evidence of this decline in consumption is somewhat perplexing in a country with a

growing population as the consumption of soap and detergents should logically be

directly proportional to population growth. "Soaps and detergents are at the back of the

house and are not status products like TVs or refrigerators. It’s possible that consumers

may be economizing on their use or buying cheaper brands during a downturn," explains

an official at a leading FMCG firm.

One possible reason could be . For

instance, besides detergents sold as powders and bars, which is produced by organized

players, a large quantum of detergents are sold in the form of laundry soaps, which are

used for washing clothes. Production of laundry soaps are reserved for the small-scale

sector and data is not readily available. There is also a large cottage industry producing

cheap soap, used for personal wash, for which reliable numbers are not available.

Another possible reason for the apparent decline in consumption could be the free

samples of soap which have been handed out as part of , say industr y

sources. “The quantum of such samples may not be picked up in the data,” said the

official.




There is another whacky hypothesis. Many households earlier used soaps for twin

purposes: for bod y wash as well as shampoo substitutes.

However,

A detailed analysis of the data shows that sale of premium soaps, the likes of HLL’s Lux

or Godrej’s Cinthol, declined by 13.1 per cent. But even the carbolic or discount soaps —

the likes of HLL’s Lifebuoy or Nirma — saw volumes decline by 9.9 per cent. Even

though the market has shown de-growth in t

3 to 4 per cent especially in the premium category, which was

previously looking attractive. This can be attributed to factors like excessive dependent of

Indian rural sector on monsoon, which can be uncertain. Also due to high excise duty

prices have remained high enough to keep the huge middle class chunk away from this

market. Thirdly 80% of the raw materials used in premium soap are imports, which

attract high import duty. All this factors lead to increase in cost, which deters the players

to provide value for money product to the middle class consumer.

Price segments of toilet soaps

Segment Price/weight

Premium > Rs. 15 / 75 gms

Popular Rs. 8-15/75 gms

Economy < Rs. 8 /75 gms




Nirma Since the early nineties, Nirma has been challenging the hegemony of Hindustan

Lever, which holds over 54 per cent share of the toilet soaps market. Nirma has so far

managed to snatch 9 per cent share of market.

Almost as an answer to the general perception of low quality, Nirma had invested in the

latest soap manufacturing plant in the world the first of its kind in India. While leading

manufacturers like HLL and Godrej continue to rely on batch manufacturing, Nirma had

sourced the latest Italian technology from Binacchi and CMB and set up a finish line that

produces 500 toilet soaps per minute, wrapped and carton sealed for dispatch.

With its market promise to offer “Better Products, Better Value, Better Living,” Nirma

introduced ‘Nirma Beauty Soap’ in the year 1992. Available in three different variants

and pack sizes, this soap has a TFM content of 70%. Due to its admirable perfume and a

higher TFM content, this brand, within a short span of five years, had achieved the status

of the third largest selling toilet soap brand and still continues its outstanding

performance




This product had created a sensational marketing history in the Indian Toilet soaps

market, when it was launched in 1997. Seventeen million packs of Nirma Lime Fresh

soap were sold in the very first month of its soft launch. Packed in a poly coated 75 gm

carton, which is printed on the world’s best Cerruti 8-colour printing machine, this soap

is available in green colour. With a lime aroma that tingles in one’s sensory buds for a

long time.The product launch of Nirma Lime Fresh had been extremely successful, being

ranked as the Seventh Most Successful Brand Launch for the year 1998.

The remarkable and phenomenal market response received by Nima Rose soap within

just two months of its launch once again proved the merits of Nirma’s commitment

towards its consumers. Nima Rose soap has got an exceptionally soft rose fragrance –

which remains around body for a long time even after bath. The high TFM content of this

product allows a consumer to have pleasant bath. This brand had carved a niche in its

segment by achieving leadership position just within two months of its launch. It is

available in 100g and 150g pack sizes.

.

Over the period, Indian toilet soap market has fragmented & has seen emergence of

prominent floral fragrance segments as Sandal, Rose, Jasmine, etc. Nima Sandal is a one

of such product in floral segment. This toilet soap has 80% TFM content, with rich &

exotic fragrance. It promises benefits of Sandal oil & Turmeric powder. It is a premium

product from Nima stable and is available in 100g and 150g packs.




When Lever made an assault on Nirma Beauty Soap with its Breeze, the Patels quickly

hit back at Levers fr eshness plank. Nirma Lime Fresh was positioned against Levers Liril

Lime Fresh, but while Liril sold for Rs 12.50, Nirma Lime Fresh sold for Rs 8.

Breaking away from tradition, Nirma introduced a new soap brand, Nima Lime, in the

key markets of Gujarat and Maharashtra. The launch was significant because it was the

first time since the company's inception that Nirma had chosen to move away from its

umbrella branding strategy by adopting a new brand name. With a wrapper price of Rs

6.50 and a total fatty matter (TFM) content of 70 per cent, Nima Lime Fresh was aimed

at the popular segment of the toilet soaps market.

This is Nirma's fourth brand launch in the toilet soaps market. It marked its foray in the

early nineties by launching Nirma beauty soap to take on Lever's best selling brand; Lux.

Nirma followed it up with Nirma Premium, Nir ma Lime Fresh.

Godrej Consumer Products Ltd.(GCPL) is a major player in the Indian FMCG market

with leadership in personal, hair, household and fabric care segments. The compan y

employs 950 people and has three state-of-the-art manufacturing facilities at Malanpur

(M.P.) Guwahati (Assam) and Silvassa (U.T.).

Godrej is among the largest marketer of toilet soaps in the country with leading brands

such as CINTHOL, FAIRGLOW, and GODREJ NO 1. Their FAIRGLOW brand, India's

first Fairness soap, has created marketing history as one of the most successful

innovation.

Market share in Toilet soaps grows to 8.0% in FY 2004-05 from 6.8% in FY 2003-04.

All three Power brands have begun to perform strongly. However, GCPL is a relatively




small player compared to HLL, in toilet soaps, with a market share of around 8 per cent.

Once the archrival of HLL, it now occupies the number three rank, after HLL (54%

market share) and Nirma (9% market share).

Godrej No.1 Beauty Soap stands for True Natural Beauty. Godrej No.1 is available in

five variants enriched with natural ingredients, specially formulated to cater to special

skin types. Sandal, Rose, Jasmine, Natural and Ayurvedic packed with the goodness of

natural ingredients.

The Godrej FairGlow fairness soap contains a powerful fairness ingredient ' Natural Oxy-

G ', which makes you fairer by reducing the dark melanin without changing the skin's

natural balance. In addition, it also removes blemishes to give you a clear, glowing

complexion. Godrej FairGlow Soap was India's first and is the largest selling fairness

soap

With the extracts of real lime, Cinthol Lime Fresh provides deep cleansing along with

active freshness and vitality. This makes for an invigorating bath that kick starts and gets

you ready for the day.




The soap has an excellent long-lasting lime fragrance that keeps you feeling fresh

throughout the day.

Wipro Consumer Care is yet another principal player enjo ying a five per cent market

share. After lying dormant for a decade, Wipro Consumer Car e promises moving into top

gear. Wipro has three important brands of soap in its portfolio: Santoor, Milk and Roses,

Chandrika.

The magic of Sandal & Turmeric comes together in Santoor - a soap that nourishes

your skin with Sandal and Turmeric to make you look much younger.

Santoor offered a combination of sandal and turmeric. Wipro later introduced a new

variant of Santoor - a sandal and besan variant. The new variant offered the combined

benefits of sandal and besan. Santoor's market share is around three per cent. But its low

market share, the company argues, has to be seen in the context of its regional presence.

This, an outcome of limited resources, happened around mid-1990s, as the first round of

revival began. Around this time, the company took a conscious decision to follow a state-

oriented strategy




The world’s first Ayurvedic soap brings you the goodness of nature to give you healthy

and glowing skin. Chandrika, the 65-year-old brand, now marketed by Wipro Consumer

Care and lighting, sports contemporary packaging, a new shape and has many new

additions to the host of Ayurvedic ingredients it is made of.

. - the marketer of personal care products, offers ‘ultra

modern’ line of Transparent Palmolive Natural skincare soaps. Palmolive has been the

pioneer in introducing soaps for different skin types (example Palmolive Extra Care for

Dry Skin, for Oily Skin and for Normal Skin). Its latest range is a combination of

moisturizing glycerin, essential oils and a mixture of premium natural herbs and flowers.

It is available in two variants – ‘Relaxing’ and ‘Soothing’. Long-lasting and refreshing,

the floral fragrance is aimed at making the user feel cared-for and looked-after. The price

is Rs.17 for a 100-gm cake.

- a niche player in the Indian soap market owns the well known brand

‘Dettol’. It had launched a new product - Dettol Extra Soap. The Dettol Extra Soap is an

extension of the company's existing range of soaps under Dettol brand. It has a

formulation that provides Dettol protection and also contains moisturizes that prevent

skin dryness. The soap has a pleasant new fragrance and a convenient saddle shape,

making it easy to hold. A 75 g bar is priced at Rs.15.




In the end it is certain that FMCG companies will have to really gain inroads in the rural

markets in order to achieve double digit growth targets in future. There is huge potential

and definitely there is lot of money in rural India but the smart thing would be to weigh in

the roadblocks as carefully as possible. The companies entering rural market must do so

for strategic reasons and not for tactical gains as rural consumer is still a closed book and

it is only through unwavering commitment that the companies can make a dent in the

market. Ultimately the winner would be the one with the required resources like time and

money and also with the much needed innovative ideas to tap the rural markets.

The Fast Moving Consumer Goods (FMCG) sector is a corner stone of the Indian

economy. This sector touches every aspect of human life. The FMCG producers now

realize that there is a lot of opportunity for them to enter into the rural market. The sector

is excited about the rural population whose incomes are rising and the lifestyles are

changing. There are as many middle income households in the rural areas as there are in

the urban. Thus the rural marketing has been growing steadily over the years and is now

bigger than the urban market for FMCGs. Globally, the FMCG sector has been successful

in selling products to the lower and middle income groups and the same is true in India.

Over 70% of sales is made to middle class households today and over 50% of the middle

class is in rural India. Also with a near saturation and cut throat competition in urban

India, many producers of FMCGs are driven to chalk out bold new strategies for targeting

the rural consumers in a big way.

But the rural penetration rates are low. This presents a tremendous opportunity for

makers of branded products who can convert consumers to bu y branded products. While

developing the strategies, the marketers need to treat the rural consumer differently from

their counterparts in urban because they are economically, socially and psycho-

graphically different to each other. This paper covers the attractions for the FMCG

marketers to go to rural, the challenges, the difference between the rural and the urban

market and the suitable marketing strategy with the suitable example of companies and

their experience in going rural.




1. Marketing Management by Philip Kotler – 11E.

2. Advertising Express ICFAI Journal Jan 2006 – Branding India.

3. Indian Management – May 2007.

4. "Positioning" – A1 Ries and Jack trint by Warner Books.

5. The Power of Branding praxis – Business line's Journal on Management – May 2005.

6. The Marketing White Book-2006 by business world 2E.

7. "The future of competition" by Prof.Venkat Ramasamy Co-author with C.K.

prahalad.

8. http://www.indianmba.com/Articles_on_Management/AOM35/aom35.html


39043935 Changing Indian Rural Consumer Behaviour Soaps and Detergents 1

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