hul in rural vs urban markets

FMCG Products In Rural Areas

Industry Profile
Fast Moving Consumer Goods (FMCG), are the products that are sold quickly at relatively low cost. Though the absolute profit made on FMCG products is relatively small, they generally sell in large quantities, so the cumulative profit on such products can be large. FMCG products are generally replaced or fully used up over a short period of days, weeks, or months, and within one year. This contrasts with durable goods or major appliances such as kitchen appliances, which are generally replaced over a period of several years. FMCG is an acronym for Fast Moving Consumer Goods, which refer to things that we buy from local supermarkets on daily basis, the things that have high turnover and are relatively cheaper Some of the best known examples of Fast Moving Consumer Goods companies include Procter & Gamble, MillerCoors, HERO Group, Anheuser-Busch, Clorox, Colgate-Palmolive, General Mills, H. J. Heinz, Cadbury, Reckitt Benckiser, Sara Lee, Nestlé, Unilever, Coca-Cola, Carlsberg, Kimberly-Clark, Kraft, Pepsi, Warburtons, Wilkinson, Wipro Consumer Care, Barilla Group and Mars. FMCG is the fourth largest sector in the Indian Economy .FMCG sector generates employment for three million people, especially in small towns and rural India.

In recent years, rural markets of India have acquired significance, as the overall growth of the Indian economy has resulted into substantial increase in the purchasing
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FMCG Products In Rural Areas

power of the rural communities. On account of green revolution, the rural areas are consuming a large quantity of industrial and urban manufactured products. In this context, a special marketing strategy, namely, rural marketing has emerged. Rural India with its traditional perception has grown over the years, not only in terms of income, but also in terms of thinking Today, rural market occupies a larger part of our economy and it is expected to grow at least four times the existing size. A number of companies in FMCG, consumer durables as well as telecom sector have adapted strategies to expand their base in rural market. Among those who have already taken remarkable initiative in rural market are HLL, Colgate, LG Electronics, Philips, BSNL, LIC, CavinKare, Britannia and Hero Honda. Rural Marketing in simple word is planning and implementation of marketing function for rural areas The purchasing power of rural people is on rise. Rural India buys products more often .The number of FMGC products in rural areas is increasing day by day. Rural India buys value for money, not cheap products. Of the two millions BSNL mobile connections, 50% are in villages. About 55% of LIC policies are sold in rural areas. This shows the increasing number of FMGC products in rural areas. Rural markets are known as future battlegrounds. The significance of competitiveness in the rural marketing was neglected for a long time in India, but now it is being recognized. Marketing Mastermind has given the perspectives in which HLL has approached towards rural markets.. Financial express, June 19, 2000 has published the strategy about FMCG majors, HLL, Marico Industries, Colgate Palmolive have formula had for rural markets

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FMCG Products In Rural Areas

In many villages, one can see today the alternate use of the products other than for their actual purpose. People in the state of Bihar feed the cattle with Horlicks as a health drink to fatten them. Similarly, people in Punjab use washing machine not for washing clothes but to make frothy lassi in huge quantities! Animals are rubbed with Iodex on their skins to relieve them from muscular pains after a day's hard work. Paints meant for houses are used on the horns of cattle for easy identification and theft prevention. "FMCG will be witnessing more than 50 per cent of its growth in the rural and semiurban segments by 2010. FMCG in totality is projected to grow at an annual compounded growth of 10 per cent to carry forward its market size to Rs. 100,000 crore from the present Rs. 48,000 crore,'' the study says. It further observes that the growing penchant and insatiable appetite of rural and semi-urban folds for FMCG products will mainly be responsible for this development and manufacturers would have to deepen their concentration for higher sales volume in such niche areas. In the rural and semi-urban areas, the FMCG market penetration is now less than one per cent, the study says, noting that with 128 million households, the rural population is nearly three times the size of the urban market. However, the study says the rural market may be alluring but is not free of problems like low per capita disposable income (which is half the urban level), a large number of daily wage earners, acute dependence on the weather, seasonal consumption

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FMCG Products In Rural Areas

linked to harvests and festivals, poor infrastructure like roads and power and inaccessibility to conventional advertising media. The Indian FMCG sector with a market size of US$13.1 billion is the fourth largest sector in the economy. A well-established distribution network, intense competition between the organized and unorganized segments characterize the sector. FMCG Sector is expected to grow by over 60% by 2010. That will translate into an annual growth of 10% over a 5-year period. It has been estimated that FMCG sector will rise from around Rs 56,500 crores in 2005 to Rs 92,100 crores in 2010. Hair care, household care, male grooming, female hygiene, and the chocolates and confectionery categories are estimated to be the fastest growing segments, says an HSBC report. Though the sector witnessed a slower growth in 2002-2004, it has been able to make a fine recovery since then. With the presence of 12.2% of the world population in the villages of India, the Indian rural FMCG market is something no one can overlook. Increased focus on farm sector will boost rural incomes, hence providing better growth prospects to the FMCG companies. Better infrastructure facilities will improve their supply chain. FMCG sector is also likely to benefit from growing demand in the market. Because of the low per capita consumption for almost all the products in the country, FMCG companies have immense possibilities for growth. And if the companies are able to change the mindset of the consumers, i.e. if they are able to take the consumers to branded products and offer new generation products, they would be able to generate higher growth in the near future. It is expected that the rural income will rise in 2007, boosting purchasing power in the countryside. However, the demand in urban areas would be the key growth driver over the long term. Also, increase in the urban population, along with increase in income
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FMCG Products In Rural Areas

levels and the availability of new categories, would help the urban areas maintain their position in terms of consumption. At present, urban India accounts for 66% of total FMCG consumption, with rural India accounting for the remaining 34%. However, rural India accounts for more than 40% consumption in major FMCG categories such as personal care, fabric care, and hot beverages. In urban areas, home and personal care category, including skin care, household care and feminine hygiene, will keep growing at relatively attractive rates. Within the foods segment, it is estimated that processed foods, bakery, and dairy are long-term growth categories in both rural and urban areas.

According to a study by the Chennai-based Francis Kanoi Marketing Planning Services, estimated annual size of market is

FMCG Consumer Durables Agri Inputs (e.g., Tractors) 2/4 Wheelers Total

Rs. 65,000 Crore Rs. 5000 Crore Rs. 45,000 Crore Rs. 8,000 crore Rs. 1,23,000 Crore

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FMCG Products In Rural Areas

FMCG Products and Categories. - Personal Care, Oral Care, Hair Care, Skin Care, Personal Wash (soaps); - Cosmetics and toiletries, deodorants, perfumes, feminine hygiene, paper products; - Household care fabric wash including laundry soaps and synthetic detergents; household cleaners, such as dish/utensil cleaners, floor cleaners, toilet cleaners, air fresheners, insecticides and mosquito repellents, metal polish and furniture polish; - Food and health beverages, branded flour, branded sugarcane, bakery products such as bread, biscuits, etc., milk and dairy products, beverages such as tea, coffee, juices, bottled water,snack food, chocolates, etc. - Frequently replaced electronic products, such as audio equipments, digital cameras, Laptops, CTVs; other electronic items such as Refrigerator, washing machines, etc. coming under the category of White Good sin FMCG

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FMCG Products In Rural Areas

Company profile Hindustan Unilever Limited
HUL at glance Hindustan Unilever Limited (HUL) (BSE: HUL) is India's largest Fast Moving Consumer Goods Company, touching the lives of two out of three Indians with over 20 distinct categories in Home & Personal Care Products and Foods & Beverages. The company’s Turnover is Rs. 20, 239 crores (for the 15 month period – January 1, 2008 to March 31, 2009). HUL is a subsidiary of Unilever, one of the world’s leading suppliers of fast moving consumer goods with strong local roots in more than 100 countries across the globe with annual sales of €40.5 billion in 2008. Unilever has about 52% shareholding in HUL. Hindustan Unilever was recently rated among the top four companies globally in the list of “Global Top Companies for Leaders” by a study sponsored by Hewitt

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FMCG Products In Rural Areas

Associates, in partnership with Fortune magazine and the RBL Group. The company was ranked number one in the Asia-Pacific region and in India. The mission that inspires HUL's more than 15,000 employees, including over 1,400 managers, is to “add vitality to life". The company meets everyday needs for nutrition, hygiene, and personal care, with brands that help people feel good, look good and get more out of life. It is a mission HUL shares with its parent company, Unilever, which holds about 52 % of the equity. HUL is India's largest fast moving consumer goods company, touching the lives of two out of three Indians with over 20 distinct categories in home & personal care products and food & beverages. They endow the company with a scale of combined volumes of about 4 million tonnes and sales of over Rs. 13,000 crores. HUL is also one of the country's largest exporters; it has been recognised as a Golden Super Star Trading House by the Government of India. HUL was formed in 1933 as Lever Brothers India Limited and came into being in 1956 as Hindustan Lever Limited through a merger of Lever Brothers, Hindustan Vanaspati Mfg. Co. Ltd. and United Traders Ltd.. It is headquartered in Mumbai, India and has an employee strength of over 15,000 employees and contributes for indirect employment of over 52,000 people. The company was renamed in June 2007 to “Hindustan Unilever Limited”. In 2007, Hindustan Unilever was rated as the most respected company in India for the past 25 years by Businessworld, one of India’s leading business magazines
[2]

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The rating was based on a compilation of the magazines annual survey of India’s Most Reputed Companies over the past 25 years. HUL is the market leader in Indian

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FMCG Products In Rural Areas

consumer products with presence in over 20 consumer categories such as soaps, tea, detergents and shampoos amongst others with over 700 million Indian consumers using its products. It has over 35 brands. Sixteen of HUL’s brands featured in the ACNielsen Brand Equity list of 100 Most Trusted Brands Annual Survey (2008). According to Brand Equity, HUL has the largest number of brands in the Most Trusted Brands List. It’s a company that has consistently had the largest number of brands in the Top 50 and in the Top 10 (with 4 brands).

Hindustan Unilever's distribution covers over 1 million retails outlets across India directly and its products are available in over 6.3 million outlets in India, i.e., nearly 80% of the retail outlets in India. It has 39 factories in the country. Two out of three Indians use the company’s products and HUL products have the largest consumer reach . Over than a hundred years ago, Hindustan Unilever launched a soap called Lifebuoy in India.The brand, which saw unparalleled success, promised to protect users from germs. In the next 114 years, the brand has never moved away from its original positioning and sales pitch. More importantly, it has given the Anglo-Dutch maker of fastmoving consumer goods a strong hold over the rural markets. Then, around four years ago, the company brought out Brooke Bond Natural Care, a tea that used five natural ingredients and promised good health.

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FMCG Products In Rural Areas

The success of the product prompted the company to sit up and take notice. Having covered the popular segment with a thrust on health, HUL felt that great potential lay in the vastly untapped economy segment which makes up a whopping 45-50 per cent in terms of volume as well as value. Hindustan Unilever Limited (HUL) is India's largest fast moving consumer goods company, and estimates that two out of three Indians use its products. It has over 35 factories across India. HUL is also one of the country's largest exporters; it has been recognised as a Golden Super Star Trading House by the Government of India.

The Hindustan Unilever Research Centre (HURC) was set up in 1958, and now has facilities in Mumbai and Bangalore. HURC and the Global Technology Centres in India have over 200 highly qualified scientists and technologists, many with postdoctoral experience acquired in the US and Europe. HUL also renders services to the community, focusing on health & hygiene education, empowerment of women, and water management. It is also involved in education and rehabilitation of underprivileged children, care for the destitute and HIV-positive, and rural development. HUL has also responded to national calamities, for instance with relief and rehabilitation after the 2004 tsunami caused devastation in South India. History

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FMCG Products In Rural Areas

In the summer of 1888, visitors to the Kolkata harbour noticed crates full of Sunlight soap bars, embossed with the words "Made in England by Lever Brothers". With it, began an era of marketing branded Fast Moving Consumer Goods (FMCG). Soon after followed Lifebuoy in 1895 and other famous brands like Pears, Lux and Vim. Vanaspati was launched in 1918 and the famous Dalda brand came to the market in 1937. In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing Company, followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). These three companies merged to form HUL in November 1956; HUL offered 10% of its equity to the Indian public, being the first among the foreign subsidiaries to do Unilever now holds 52.10% equity in the company. The rest of the shareholding is distributed among about 360,675 individual shareholders and financial institutions. The erstwhile Brooke Bond's presence in India dates back to 1900. By 1903, the company had launched Red Label tea in the country. In 1912, Brooke Bond & Co. India Limited was formed. Brooke Bond joined the Unilever fold in 1984 through an international acquisition. The erstwhile Lipton's links with India were forged in 1898. Unilever acquired Lipton in 1972, and in 1977 Lipton Tea (India) Limited was incorporated. Pond's (India) Limited had been present in India since 1947. It joined the Unilever fold through an international acquisition of Chesebrough Pond's USA in 1986.

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FMCG Products In Rural Areas

Since the very early years, HUL has vigorously responded to the stimulus of economic growth. The growth process has been accompanied by judicious diversification, always in line with Indian opinions and aspirations. The liberalisation of the Indian economy, started in 1991, clearly marked an inflexion in HUL's and the Group's growth curve. Removal of the regulatory framework allowed the company to explore every single product and opportunity segment, without any constraints on production capacity. Simultaneously, deregulation permitted alliances, acquisitions and mergers. In one of the most visible and talked about events of India's corporate history, the erstwhile Tata Oil Mills Company (TOMCO) merged with HUL, effective from April 1, 1993. In 1996, HUL and yet another Tata company, Lakme Limited, formed a 50:50 joint venture, Lakme Unilever Limited, to market Lakme's market-leading cosmetics and other appropriate products of both the companies. Subsequently in 1998, Lakme Limited sold its brands to HUL and divested its 50% stake in the joint venture to the company. HUL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in 1994, Kimberly-Clark Lever Ltd, which markets Huggies Diapers and Kotex Sanitary Pads. HUL has also set up a subsidiary in Nepal, Unilever Nepal Limited (UNL), and its factory represents the largest manufacturing investment in the Himalayan kingdom. The UNL factory manufactures HUL's products like Soaps, Detergents and Personal Products both for the domestic market and exports to India. The 1990s also witnessed a string of crucial mergers, acquisitions and alliances on the Foods and Beverages front. In 1992, the erstwhile Brooke Bond acquired Kothari

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FMCG Products In Rural Areas

General Foods, with significant interests in Instant Coffee. In 1993, it acquired the Kissan business from the UB Group and the Dollops Icecream business from Cadbury India. As a measure of backward integration, Tea Estates and Doom Dooma, two plantation companies of Unilever, were merged with Brooke Bond. Then in 1994, Brooke Bond India and Lipton India merged to form Brooke Bond Lipton India Limited (BBLIL), enabling greater focus and ensuring synergy in the traditional Beverages business. 1994 witnessed BBLIL launching the Wall's range of Frozen Desserts. By the end of the year, the company entered into a strategic alliance with the Kwality Icecream Group families and in 1995 the Milkfood 100% Icecream marketing and distribution rights too were acquired. Finally, BBLIL merged with HUL, with effect from January 1, 1996. The internal restructuring culminated in the merger of Pond's (India) Limited (PIL) with HUL in 1998. The two companies had significant overlaps in Personal Products, Speciality Chemicals and Exports businesses, besides a common distribution system since 1993 for Personal Products. The two also had a common management pool and a technology base. The amalgamation was done to ensure for the Group, benefits from scale economies both in domestic and export markets and enable it to fund investments required for aggressively building new categories. In January 2000, in a historic step, the government decided to award 74 per cent equity in Modern Foods to HUL, thereby beginning the divestment of government equity in public sector undertakings (PSU) to private sector partners. HUL's entry into Bread is a strategic extension of the company's wheat business. In 2002, HUL acquired the government's remaining stake in Modern Foods.
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FMCG Products In Rural Areas

In 2003, HUL acquired the Cooked Shrimp and Pasteurised Crabmeat business of the Amalgam Group of Companies, a leader in value added Marine Products exports. HUL launched a slew of new business initiatives in the early part of 2000’s. Project Shakti was started in 2001. It is a rural initiative that targets small villages populated by less than 5000 individuals. It is a unique win-win initiative that catalyses rural affluence even as it benefits business. Currently, there are over 45,000 Shakti entrepreneurs covering over 100,000 villages across 15 states and reaching to over 3 million homes. In 2002, HUL made its foray into Ayurvedic health & beauty centre category with the Ayush product range and Ayush Therapy Centres. Hindustan Unilever Network, Direct to home business was launched in 2003 and this was followed by the launch of ‘Pureit’ water purifier in 2004. In 2007, the Company name was formally changed to Hindustan Unilever Limited after receiving the approval of share holders during the 74th AGM on 18 May 2007. Brooke Bond and Surf Excel breached the the Rs 1,000 crore sales mark the same year followed by Wheel which crossed the Rs.2,000 crore sales milestone in 2008. On 17th October 2008 , HUL completed 75 years of corporate existence in India. Doing Well by Doing Good HUL believes that an organisation’s worth is also in the service it renders to the community. HUL focuses on hygiene, nutrition, enhancement of livelihoods, reduction of greenhouse gases and water footprint. It is also involved in education and rehabilitation of special or underprivileged children, care for the destitute and

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FMCG Products In Rural Areas

HIV-positive, and rural development. HUL has also responded in case of national calamities / adversities and contributes through various welfare measures, most recent being the relief and rehabilitation of the people affected by the Tsunami disaster, in India. HUL’s Project Shakti is a rural initiative that targets small villages populated by less than 5000 individuals. Through Shakti, HUL is creating micro-enterprise opportunities for rural women, thereby improving their livelihood and the standard of living in rural communities. Shakti also provides health and hygiene education through the Shakti Vani programme.The program now covers 15 states in India and has over 45,000 women entrepreneurs in its fold, reaching out to 100,000 villages and directly reaching to over three million rural consumers. HUL also runs a rural health programme, Lifebuoy Swasthya Chetana. The programme endeavours to induce adoption of hygienic practices among rural Indians and aims to bring down the incidence of diarrhoea. It has already touched 120 million people in approximately 50, 676 villages across India. If Hindustan Unilever straddles the Indian corporate world, it is because of being single-minded in identifying itself with Indian aspirations and needs in every walk of life.

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FMCG Products In Rural Areas

PRODUCT PROFILE Lux:
A delight to the senses Everything about the brand – from the look and feel of the products and packaging to the subtle fragrances – is a delight to the senses. In fact, Lux has been making waves since 1924, when it launched the world's first mass-market beauty soap at a fraction of the cost of some expensive brands. How it all started
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Lux was first introduced as a toilet soap in 1925. Produced by Lever Brothers, it arrived in the UK in 1928, offering people a chance to pamper themselves for a modest price. From the 1930s right through to the 1970s, Lux soap colours and packaging were altered several times to reflect fashion trends. In 1958 five colours made up the range: pink, white, blue, green and yellow. People enjoyed matching their soap with their bathroom colours. In the early 1990s, Lux responded to the growing trend away from traditional soap bars by launching its own range of shower gels, liquid soaps and moisturising bars. Lux beauty facial wash, Lux beauty bath and Lux beauty shower were launched in 1992.

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FMCG Products In Rural Areas
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In 2004, the entire Lux range was relaunched in the UK & Ireland to include five shower gels, three bath products and two new soap bars. 2005 saw the launch of three exciting new variants with dreamy names such as “Wine & Roses” bath cream, “Glowing Touch” and “Sparkling Morning” shower gels.

Did you know?
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Since the 1930s, over 400 of the world’s most stunning and sensuous women have been proudly associated with Lux advertisements. Marilyn Monroe, Brigitte Bardot, Demi Moore and, more recently, our own Catherine Zeta-Jones, have all been part of the Lux glamour story. The name Lux means ‘light’ in Latin, however the name was chosen for its play on the word ‘luxury’.

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Advertising
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In 2004, Sarah Jessica Parker featured in the Lux 'Brings Out the Star in You’ advertising campaign. Best known for her über-stylish and spirited character as Carrie from Sex & The City, Sarah Jessica Parker epitomises the modern Lux woman: comfortable and confident in her femininity, experienced in the ways of the world and understands how style and beauty really work.

Lux wants to help our customers improve the quality of their lives. In keeping with our commitment to helping you, develop the cleanest, most comfortable home possible, we have developed 5 specific product lines - products that reflect the holistic Lux for Life approach that we are offering our customers, and your foundation for building a healthy home environment, no matter where you live.
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FMCG Products In Rural Areas

Those 5 specialised product lines meet the requirements for a hygienic and healthy home as well as for an effective and easy to use cleaning in trade industry. The innovative development of those products is based on over 100 years of advanced technical research. Our products are manufactured to highest European quality standards, are recommended by various allergy and asthma associations and are certified by prestige independent institutes like the German TÜV Nord.
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Lux products are exclusive and unique The Lux product range is made of a refined high quality Lux products differentiate through patents, design and innovation Lux offers superior after sale service and support

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FMCG Products In Rural Areas

Dove
Dove is a personal care brand owned by Unilever. Dove is primarily made from synthetic surfactants, as well as some vegetable oil based soap ingredients, such as sodium palm kernelate. Dove is formulated to be pH neutral, with a pH that is usually between 6.5 and 7.5. Dove products are manufactured in the Netherlands, United States, Germany, Ireland, Australia, and Brazil. The Dove trademark and brand name is currently owned by Unilever. Dove's logo is a silhouette profile of a dove, the color of which often varies. Hindustan unilever limited offers dove. Dove soap, which was launched by unilever, has been available in india since 1995. It provides a refreshingly real alternative for women who recognize that beauty is not simply about how you look, it is about how you feel. The skin`s natural ph is slightly acidic 5.5-6. Ordinary soaps tend to be alkaline, with ph higher than 9. Dove is formulated to be ph neutral [ph between 6.5 and 7.5] and to be mild on skin. This makes it suitable for all skin types for all seasons. While dove

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FMCG Products In Rural Areas

soap bar is widely available across the country, dove body wash is available in select outlets. Dove's products include: antiperspirants/deodorants, body washes, beauty bars, lotions/moisturizers, hair care and facial care products. In the US, Dove bar soap is currently produced in the cool moisture, exfoliating, sensitive skin unscented, nutrium nourishing, white, pink, calming night, pro-age, and energy glow versions.

Dove has been positioned throughout its history without referring to it as "soap", but as a "beauty bar" with one-fourth cleansing cream; they stress its moisturizing of skin while washing in contrast to the drying effects of regular soaps (which their advertising calls simply "soap").

Advertisements reinforced the message by Bossing the cream being poured into the beauty bar. In 1979, the phrase "cleansing cream" was replaced with "moisturizer cream". In 1979, a Pennsylvania dermatologist showed that Dove dried and irritated skin significantly less than ordinary soaps. As a result of this study, Unilever started aggressive marketing and won more than 24% of the market by 2003.

Marketing campaigns

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FMCG Products In Rural Areas

In 2006, Dove started the Dove Self-Esteem Fund. It purports to be "an agent of change to educate and inspire girls on a wider definition of beauty and to make them feel more confident about themselves". To this day, Dove have created a number of largely online-only short films.

Lifebuoy
Popular for over 100 years, the light red soap is still available in the United States, in specialty shops that import it through Jupiter Imports (UK) in England. Though Lifebuoy has ceased to be produced in the U.S. and the UK, it is still being mass produced by Unilever in Cyprus (for the UK, EU and USA). In India, it is the main value brand there as well as in some other South Asian and South East Asian countries like Malaysia, Singapore, India, Pakistan, Sri Lanka, Bangladesh and Indonesia. The Lifebuoy Swasthya Chetna programme was initiated in 2002 as a rural health and hygiene initiative in India.

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FMCG Products In Rural Areas

In India, over 600,000 children under the age of five die annually from diarrhoea. Studies have shown that almost half these deaths could have been prevented by simply washing hands with soap. In partnership with local government bodies, the Lifebuoy Swasthya Chetna programme is designed to spread awareness about the importance of washing hands with soap. It also promotes general hygiene in rural areas that are difficult to reach through usual marketing campaigns such as television, press or in-store advertising and promotions. Communication: Swasthya Chetna, which means 'Health Awakening', is a multi-phased activity that works towards effecting hand washing behaviour change in rural communities. The main message of the campaign is "Visibly clean is not really clean".

The campaign has three communication tasks:
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To establish the presence of germs, even on clean hands, through the use of a 'glow germ demo kit' that has been developed by Unilever for use in Lifebuoy Swasthya Chetna. The simple and powerful tool makes unseen germs visible. To establish the consequences of these hidden germs, which when ingested, can cause stomach infections and diarrhoea, or be transferred to eyes causing painful eye infections, or infecting wounds.

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FMCG Products In Rural Areas
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To establish how current practice is not enough to fight these germs by using the glow germ demo kit to demonstrate that washing with water is not enough, and that it is necessary to wash hands with soap for germ protection.

Tools used to communicate the central Swasthya Chetna message are adapted according to the specific audience. Engagement Lifebuoy teams visit each village several times, engaging all segments of the community and ensuring the formation of local 'self-help communities' that can sustain the message. School children, being initiators of change, make excellent ambassadors of communication, provided they find it fun and engaging. The element of Lifebuoy Swasthya Chetna that involves children focuses on fun, using stories, games, songs and quizzes. Efforts are made to ensure that the learning does not fade over time. Additionally, these visits also include a meeting with the Panchayat (village elders). Covering 130 million people in 30,000 villages since 2002, the Lifebuoy Swasthya Chetna programme has made its mark as the single largest private hygiene education project in the world. The Swasthya Chetna programme will be re-launched in 2009, and will cover even more villages in India as part of the Lifebuoy brand's crusade. The Original Red “Lifebuoy” Soap (sometimes called “Carbolic Soap”)is one of the most famous soaps in the world. It has been on the market for over 100 years. “Red

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FMCG Products In Rural Areas

Lifebuoy Soap” is still manufactured in many countries by Unilever and it’s subsidiaries. In most of these countries “Lifebuoy” soap is the market leader.

Our “Original Red Lifebuoy Soap” is a very clean, healthy, “carbolic” soap. It is a pure anti-bacterial soap with excellent skin cleaning and cleansing properties and is suitable for the whole body. These days, this is essential with MRSA and all the superbugs, e-coli, salmonella, and other viruses around. You cannot have too much protection. “Lifebuoy Soap” also used to be available in the White Toilet and the Red Lifebuoy Household Soap Twin Pack versions. These have now been discontinued. Now there is only the “Red Lifebuoy Soap” available, (used to be known as the ‘Toilet Soap’ version.)

Hamam

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FMCG Products In Rural Areas

Hamam is a brand of soap made in India and marketed by Hindustan Unilever, the Indian unit of Unilever. The name comes from the Arabic/Persian/Hindi word Hammam which refers to a public bathing establishment in the middle-eastern countries. It was launched in 1934 and is a leading product in its category. The hamam is a pure and gentle soap for a family to use. This is an ordinary soap, which has not much features or qualities, but it is very soft and gentle soap, which serves best. This soap is an ideal soap even to use it for kids, as it does not contain strong chemicals and strong colors. This soap is the choice of all our family members. We normally don’t change the brand of the soap, which we have been using since a long time and for us the Hamam soap is the best choice. The cost of this soap also fits in our monthly budget and gives the best results.

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SCOPE OF STUDY

The scope of study will sample the people of the rural area of Vangni. The study will include a sample a few personal care products of HUL namely: Hamam, Dove, Lifebouy, and Lux.

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STATEMENT OF PROBLEM
HUL is facing the problem rather challenges from ✔ Large number of players in the market ✔ Continuous changes in the taste and preferences of the customers such problems were identified as Research Problems and the objective statement was formed on its basis. The research problem is that of study of rural market– with special emphasis on Customer preference for HUL in rural India.

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OBJECTIVE
The objective of the study is to discover the relationship between higher end products (specifically soaps and shampoos of HUL) and the disposable income of a person living in a rural area.

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STATEMENT OF HYPOTHESIS Null Hypothesis:
Based on current economic situations, with people living in rural areas having a higher disposable income, the demand for HUL’s high end soaps and shampoos will not have a significant impact in the rural market.

Alternative Hypothesis:
Based on current economic situations, with people living in rural areas having a higher disposable income, the demand for HUL’s high end soaps and shampoos will show steady growth in the rural market.

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LIMITATIONS
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The limitation of the project is that it is restricted to only one village of the Mumbai in that also only to the 100 people. Also I have taken into consideration only one company’s products in the rural areas. The research is restricted to soaps of HUL .

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REVIEW OF LITERATURE
Rural market is one of the best opportunities for the FMCG sector. In some sense we can say that rural market is future of FMCG. 1. Basu Purba (2004), suggested that the lifestyle of rural consumers is changing. Rural Indian market and the marketing strategy have become the latest marketing buzzword for most of the FMCG majors. She added the strategies of different FMCG companies for capturing rural market like Titan’s Sonata watches, Coco Cola’s 200ml bottle, different strategies of HUL and Marico etc. She takes into consideration the study of National Council for Applied Economic Research (NCAER). According to the NCAER projections, the number of middle and highincome households in rural area is expected to grow from 140 million to 190 million by 2007. In urban India, the same is expected to grow from 65 million to 79 million. Thus, the absolute size of rural India is expected to be double that of urban India.

2. Tognatta Pradeep (2003), suggested that, the economic growth in India's agricultural sector in last year was over 10%, compared with 8.5% in the industrial sector. This implies a huge market potentiality for the marketer to meet up increasing demand. Factors such as village psyche, strong distribution network and market awareness are few prerequisites for making a dent in the rural markets. The model is
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of the stolid Anglo-Dutch conglomerate Unilever Group, which has enjoyed a century-long presence in India through its subsidiary Hindustan Lever Ltd. It was Hindustan Lever that several years ago popularized the idea of selling its products in tiny packages. Its sachets of detergent and shampoo are in great demand in Indian villages. Britannia with its low priced Tiger brand biscuits has become some of the success story in rural marketing.

3. Aithal, K Rajesh (2004), suggested that rural markets are an important and growing market for most products and services including telecom. The characteristics of the market in terms of low and spread out population and limited purchasing power make it a difficult market to capture. The Bottom of the pyramid marketing strategies and the 4 A's model of Availability, Affordability, Acceptability and Awareness provide us with a means of developing appropriate strategies to tackle the marketing issues for marketing telecom services in rural areas. Successful cases like the Grameen Phone in Bangladesh and Smart Communications Inc in Philippines also provide us with some guidelines to tackling the issue. As per my concern of the research, it is a detail study of different FMCG products used by rural consumers. It will provide detail information about consumer preferences towards a good number of FMCG products which is too unique and different from those above researches. Sri Sarada College for Women (Autonomous), 16. Prime Minister Manmohan Singh talked about his vision for rural India: “My vision of rural India is of a modern agrarian, industrial and services economy co-existing

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side by side, where people can live in well-equipped villages and commute easily to work, be it on the farm or in the non-farm economy. There is much that modern science and technology can do to realize this vision. rural incomes have to be increased rural infrastructure has to be improved .Rural health and education needs have to be met. Employment opportunities have to be created in rural areas.” ‘Go rural’ is the slogan of marketing gurus after analyzing the socio-economic changes in villages. The rural population is nearly three times the urban, so that rural consumers have become the prime target market for consumer durable and nondurable, food ,product construction, electrical, electronics, automobiles, banks, insurance companies and other sectors besides hundred per cent of agri-input product such as seeds, fertilizers, pesticides and farm machinery. The Indian rural market today accounts for only about Rs 8 billion of the total ad pie of Rs 120 billion, thus claiming 6.6 per cent of the total share. So clearly there seems to be a long way ahead. Although a lot is spoken about the immense potential of the unexplored rural market, advertisers and companies find it easier to vie for a share of the already divided urban pie. The success of a brand in the Indian rural market is as unpredictable as rain. It has always been difficult to gauge the rural market. Many brands, which should have been successful, have failed miserably. More often than not, people attribute rural market success to luck. Therefore, marketers need to understand the social dynamics and attitude variations within each village though nationally it follows a consistent pattern looking at the challenges and the opportunities which rural markets offer to the marketers it can be said that the future is very promising for those who can understand the dynamics of rural markets and exploit them to their best advantage. A radical change in attitudes of marketers towards the vibrant and burgeoning rural
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markets is called for, so they can successfully impress on the 230 million rural consumers spread over approximately six hundred thousand villages in rural India. AC Nielsen According to fast moving consumer goods (FMCG) companies, an increase in farm prices has resulted in an increased inflow of wealth into rural India, thus increasing the purchasing power of the people. The Federation of Indian Chambers of Commerce and Industry revealed that in 2007, 143 million rural households used FMCG products, compared to 136 million in 2004. This is suggestive of the fact that rural Indians are increasingly turning to branded products. Sunil Duggal, CEO of Dabur, said: "Rural demand is intrinsic to our growth story. We believe that over the next few quarters at least there could be a sharp rise in rural demand." In 2007, sales of Dabur's rural toothpaste brand Babool grew 35%. Nestle India also said that rural sales have picked up. Anand Shah, a sector analyst with Angel Broking, said: "Though rural markets are growing from a smaller base, the numbers can be stark in some categories. Mass products like soaps, detergents, hair oil and biscuits have good sales in the rural market and almost all companies are now re-looking their strategy for this market." On the other hand, the continuous rise in inflation and fuel costs coupled with costlier credit may force the urban Indian consumer to spend less on FMCG products, the report noted. The ASSOCHAM President, Mr. Sajjan Jindal said, FMCG sector in rural areas is expected to grow by 40% as against 25% in urban areas. The factors such as rising rural incomes, healthy agriculture growth, boost in demand, rising consumerism across India, better penetration of FMCG products in the rural market contributes to high growth and rapid expansion of FMCG industry in rural India.

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As far as auto sector is concerned, the ASSOCHAM Chief said, traditional market for this in rural areas has been largely restricted to tractors and two-wheelers. The two wheeler penetration in villages is only 10% as compared to 25% in urban areas. High investment involved, poor conditions of rural roads, lack of finance facility, lack of service network have limited the scope of passenger cars in countryside. The study on Rural Retail says that rural retail market constitutes around 40 per cent of the total size of the retail market of India. According to ASSOCHAM, the size of retail market in India is $280 billion. So the size of rural retail market works out to be $112 billion which is Rs. 5,00,000 crore and is growing around 10 per cent of the size of Indian GDP. This is expected to double in next 4-5 years because of potential factor. Rural India provides a highly unexplored market for the expansion of retail activity. The penetration of the organized retail specifically is very low. Approximately ten thousand out of six lakh villages in India have access to organized retail services. Conventionally the retailing in rural India was characterized by multiple tiers leading to high costs, low density of shops per village and uneven concentration of shops. The investment capacity of retailers in villages is low resulting in restricted range and variety of products. Poor connectivity of villages through roads result in delayed replenishment of stocks. Restricted media reach in rural areas have resulted in adequate communication of the offers and schemes. The market is largely ridden by poor quality, spurious and fake products. It is large dominance of local and regional brands. The sales volume per outlet is low.

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Periodic haats, the mobile markets with around 200-300 stalls, spread around 2-3 acres of land selling miscellaneous products is another feature of conventional rural retailing. In view of the large investments made by the government in rural infrastructure pushing income and demand level, the prospects for organized retail are seen bright for rural India. With empowerment of rural people with education, employment, higher purchasing power, better media exposure, better connectivity with outside world, they provide a massive unexplored pool of consumers.

RESEARCH DESIGN
 Research design is a systematic planning, organizing, and executing a research project within specified time limit and resource allocation.  Research design expresses both the structure of the research problem- the framework organization, a configuration of the relationships among variables of a study- and the plan of investigation used to obtain empirical evidence on those relationships.  Research design constitutes the blueprint for the collection, measurement, and analysis of data.

 Research design includes:

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FMCG Products In Rural Areas

• An activity and time based plan. • A plan always based on research question. • A guide for selecting sources and types of information. • A framework for specifying the relationships among the studies variables. • A procedural outline for every research activity.

RESEARCH DESIGN of the project is as follows:• The study is about FMCG products in rural areas. • To find out relationship between disposable income and demand for high end products in rural areas. • The study will be carried out in Vangni a village near Badlapur. • Primary data(questionnaire) is required for research. • The data will be found by conducting survey in Vangni.
•

Survey technique for data collection will be used.

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RESEARCH INSTRUMENTS

QUESTIONNAIRE DESIGN: As the questionnaire is self administrated one, the survey is kept simple and user friendly. Words used in questionnaire are readily understandable to all respondent. Also technical jargons are avoided to ensure that there is no confusion for respondents.

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SOURCES OF DATA Primary data:
Primary data was collected through a self administrated questionnaire. This questionnaire aims to gather information related to FMCG products used in rural areas

Secondary data:
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Secondary data was collected through magazines, research papers, internet etc.

SAMPLE SIZE
Size of sample refers to the number of items to be selected from the universe to constitute a sample. The decision on sample size needs to be made before selecting the method of sampling. The size of the sample should neither be excessively large nor too small it should be fair or optimum. An optimum sampling size is one which fulfills the requirements of efficiency, representativeness, reliability and flexibility

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Sample size should always be appropriate, it depends on the size of population and the nature of study undertaken

Sample size: The sample size of the project is 100

SAMPLING UNIT
A decision has to be taken concerning a sampling unit before selecting sampling. Sampling unit may be a geographical one such as state, district, village etc. , or a construction unit such as house, flat, etc. ,or it may be a social unit such as family, club, school, etc. ,or it may be an individual. The researcher will have to decide one or more of such unit that he has to select for his study.
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Sample unit: All rural people are included both the genders i.e. males and females irrespective of their education level.

SAMPLING FRAME
It is also known as source list, from which sample is to be drawn. It contains the name of all items of a universe. If source list is not available, researcher has to prepare it. Such a list should be comprehensive, correct, reliable and appropriate. It is extremely important for the sampling frame to be as representative of the population as possible

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Sample region:

-

Vangni, near Badlapur

SAMPLING PROCEDURE
Finally the researcher must decide the type of sample he will use that is he must decide about the technique to be used in selecting the items for the sampling. In fact this technique or procedure stands for the sample design itself. There are several sample designs out of which the researcher must choose one for his study. He must

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select the design which, for a given sample sixe, and for a given cost, has a smaller sampling error.

Sampling method:The sampling method used is area sampling.

Because a geographically dispersed population can be expensive to survey, greater economy than simple random sampling can be achieved by treating several respondents within a local area

STATISTICAL TOOLS USED
 Statistical tools used for calculation is Chi-square test.  Chi-square test is used
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FMCG Products In Rural Areas 

The chi-square test is used to determine whether there is a significant difference between the expected frequencies and the observed frequencies in one or more categories. Chi square test is an important test amongst the several tests of significance developed statistician. Chi square, symbolically written as χ2 , is a statistical measure used in the context of sampling analysis for comparing a variance to a theoretical variance. As a non-parametric test it can be used to determine if categorical data shows dependency or the two classification are independent. It can be also used to make comparisons between theoretical population and actual data when categories are used. Thus the chi-square test is applicable in large number of problem.



 The test is, in fact a technique through the use of which it is possible for all researchers to
o o o

Test the goodness of fit Test the significance of association between two attribute Test the homogeneity or the significance of population variance

DATA ANALYSIS

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Lifebouy 500 – 1000 1000 – 1500 1500 – 2000 Above 2000 TOTAL 19 1 1 7 28

Dettol 7 10 4 1 22

Lux 10 5 9 14 38

Dove 0 1 5 6 12 36 17 19 28

TOTAL

100

H0 :-There is no relationship between disposable income and demand for high end products in rural areas. H1 :-There is relationship between disposable income and demand for high end products in rural areas.

Observatio

Observed

Expected

(O-E)2/E
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500 – 1000

1000 – 1500 1500 – 2000 Above 2000

n Lifebouy Dettol Lux Dove Lifebouy Dettol Lux Dove Lifebouy Dettol Lux Dove Lifebouy Dettol Lux Dove

Frequency 19 7 10 0 1 10 5 1 1 4 9 5 7 1 14 6

Frequency 10.08 7.92 13.68 4.32 4.76 3.74 6.46 2.04 5.32 4.18 7.22 2.28 7.84 6.16 10.64 3.36

7.89 0.10 0.98 4.32 2.97 10.47 0.32 0.53 3.50 0 0.43 3.24 0 4.32 1.06 2.07 ∑(χ)2 = 42.2

Degrees of Freedom = (r-1) (c-1) = (4-1)(c-1) =3x3 =9 @ 5% Level of Significance (LoS) χ 2(table value) = 16.92

Since (χ)2 > χ 2(table value) Therefore we reject H0 and accept H1 Hence There is relationship between disposable income and demand for high end products in rural areas.

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TABLES AND CHARTS

Product Choice of Respondants
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Disposable income of respondants

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Disposable income and product selection of respondants (Total respondants 100)

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FINDINGS
 It has been found that there is a significant relationship between disposable income and demand of high end products in rural areas.  It has been found that people in rural areas choose their product on quality basis.  People in rural areas go for branded product and not for local products irrespective of their income.

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SUGGESTIONS
The rural market is very large in compare to the urban market as well as it is more challenging market. The consumer wants those products which are long lasting, good, easy to use and cheaper. The income level of rural consumers is not as high as the income level of urban consumers that’s why they want low price goods. Though price is an important factor people in rural areas tend to buy quality products

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CONCLUSION
As I have analyzed the various data based on questionnaire, a fact has came into light that HUL’s products are the most known and popular Brand in context of home FMCG products in rural market. Because of huge product line, cheaper cost, brand loyalty, good publicity and advertisement, the rural consumers generally prefers the products of HUL in all segments. Except it, people firstly prefer for good quality and comparatively low prices. Rural markets, as part of any economy, have untapped potential. There are several difficulties confronting the effort to fully explore rural markets. However it is found that people in rural areas prefer to buy products with better quality and would stick to it even if their prices increase in future as they are satisfied with the product.

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QUESTIONNAIRE
I the student of LaLa Lajpat Rai College is working on a project and conducting a survey on FMCG Products in Rural areas, this is a part of my project for this purpose the following Question are needed to be answer. The information collected will be used only for our research work and will be kept confidential.

Name Education Age Gender ccupation 1)

O

Which soap do you use ? o Lifebuoy o Hamam o Lux o Dove

2) Do you use Local product ?

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o YES
o

No

3) If your income increase will you switch to high end products ? o YES o NO

4) Are you satisfied with the product you use ? o YES o NO 5) Do you think that higher prices gives better quality products ? o YES o NO 6) What is your disposable income ? o 500 – 1000 o 1000 – 1500 o 1500 – 2000
o

Above 2000

7) On what parameter do you chose the product ? o PRICE o QUALITY o AVAILABILITY

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8) Does price influence your buying behavior ? o YES o NO

BIBLOGRAPHY
      

TYBMS Research Methodology - Vipul Prakashan TYBMS Research Methodology - C. R. Kothari www.marketresearchworld.net www.indianmba.com www.scribd.com www.en.wikipedia.com www.encyclopedia.brittanica.com

 Indian marketing of May 2009

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