A RESEARCH PROPOSAL ON STUDY ON RURAL MARKETING -WITH SPECIAL EMPHASIS ON CUSTOMER PREFERENCE FOR HUL IN RURAL INDIA

SUBMITTED LATE.SMT.SHARDABEN GHANSHYAMBHAI MANAGEMENT STUDIES. DHARMAJ. PATEL INSTITUTE TO: OF

AFFILIATED TO GUJARAT TECHNOLOGICAL UNIVERSITY. (BATCH: 2011-2013)

GUIDED BY: Miss. Shweta Patel Enroll No:-117330592008

PREPARED BY: Bhavsar Nirmal M.

ACKNOWLEDGEMENTS
It is a pleasure indeed to have this opportunity to release the feeling of gratitude imprisoned in my heart to a number of helping hands who not only helped me in shaping up this project work but making it a successful one. I am thankful to the Shweta Patel and Priyanka Madam whom I always looked upon for inspiration in difficult times during the project work and who provided me with a congenial and free working environment to shape this project work.

I thank my friends, my Family members and my relatives for bearing me and supporting me throughout the research. They were the source of inspiration whenever I needed. It was just because of their divine love and support that made me work properly and complete my objectives in a splendid manner.

Last but not the least my thanks to all my colleagues and the staff of rural relation Khambhat & Anand for their inspiration and support.

Yours faithfully Nirmal Bhavsar

PREFACE
M.B.A. means Master of Business Administration is an intensive two year full time master degree programme. The practical training at the level of 4th semester of MBA is helpful to develop the student ability and to get familiarize with the corporate environment. Theoretical studies give enough back ground for career development but practical training has equal contribution in the development of career. At this stage we are realizing that EXPERIANCE IS THE BEST TEACHER is a true wording. I feel great pleasure to submit my report on Student Comprehensive Project conducted by Gujarat Technological University, Ahmadabad and which is adopted by Late Smt. Shardaben Ghanshyambhai Patel Institute of management Studies, Dharmaj Practical training will also be helpful to us in future to get jobs in reputed company to make our bright future programme. Practical training related to the different areas like Financial Management provide efficient knowledge about ratio analysis, working capital structure, leverage analysis, cost of capital etc. Human Recourse Management provide knowledge about how to recruitment, selection, training and development, motivate people etc. Marketing Management provide knowledge about how to launch, advertising of our product in the market, customer relationship management, personnel selling, direct marketing etc..

EXECUTIVE SUMMARY

The main objective of the project is to get the full knowledge of the products of the HUL and what are they doing to get the customer loyalty, to maintain their market. This is also to find the preferences of customer and there market knowledge and product information, information about the presence of the rival of HUL and all the other

options they have in the market. What are t h e techniques they adopt to know about the preferences and changing needs of the customer? HUL are also looking to tap the market in rural sector, so they also taking into consideration the needs and wants of the people there. They are also studying the consumption habits of the rural people. Like most of them are daily wage earners or s m a l l peasants, so they are studying the buying patterns of t h e m also. In country like India, where the 70% of the people live in rural area, the rural market holds a lot of marketing potential. There is a wide spread difference in the standard of living between urban and rural India. In order to launch products and develop advertising for rural market there is a need to understand both the rural context and also the consumer very well. Promotion of brands in rural markets requires the special measures. Due to the social and backward condition the personal selling efforts have a challenging role to play in this regard. The word of mouth is an important message carrier in rural areas. Infect the opinion leaders are the most influencing part of promotion strategy of rural promotion efforts. The experience of agricultural input industry can act as a guideline for the marketing efforts of consumer durable and non-durable companies. Relevance of Mass Media is also a very important factor. The strong Indian brands have strong brand equity, consumer demand-pull and efficient and dedicated dealer network which have been created over a period of time. The rural market has a grip of strong country shops, which affect the sale of various products in rural market. The companies are trying to trigger growth in rural areas. They are identifying the fact that rural people are now in the better position with disposable income. The low rate finance availability has also increased the affordability of purchasing the costly products by the rural people. Marketer should understand the price sensitivity of a consumer in a rural area. This research paper will be therefore an attempt to study the brand promotion in the rural market and the overall potential of the rural market. Branding correlates with Image Building in an organization vis--vis its products produced/services rendered. In the vicinity of today's Marketing scenario along with advancement in technology, Brand Management is the order of the day. In the process of branding, the aspect of brand activation at ATL (above the level) and BTL (below the level) makes a vital contribution for the marketing journey. To attain a safe platform in Brand activation, the Marketing Managers pay attention and focus in a diligent manner on the value based credentials of the users in the

Marketing arena. A full- fledged dedicated team with multi focused thoughts only can do the needful for the successful brand management. Good branding strikes a chord with viewers help them relate with the product and reflect their aspirations. The studies suggest that there has been extra-ordinary growth in this sector and the trend is likely to continue over a period of time as the market is in the very initial stages of the life cycle.

Sr. No

Topics

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Abstract

In country like India, where the 70% of the people live in rural area, the rural market holds a lot of marketing potential. There is a wide spread difference in the standard of living between urban and rural India. In order to launch products and develop advertising for rural market there is a need to understand both the rural context and also the consumer very well. Promotion of brands in rural markets requires the special measures. Due to the social and backward condition the personal selling efforts have a challenging role to play in this regard. The word of mouth is an important message carrier in rural areas. Infect the opinion leaders are the most influencing part of promotion strategy of rural promotion efforts. The experience of agricultural input industry can act as a guideline for the marketing efforts of consumer durable and non-durable companies. Relevance of Mass Media is also a very important factor. Rural markets are an important and growing market for most products and services including telecom. The characteristics of the market in terms of low and spread out population and limited purchasing power make it a difficult market to capture. The Bottom of the pyramid marketing strategies and the 4 A's model of Availability, Affordability, Acceptability and Awareness provide us with a means of developing appropriate strategies to tackle the marketing issues for marketing , services in rural areas. Successful cases like the Grameen Phone in Bangladesh and Smart Communications Inc in Philippines also provide us with some guidelines to tackling the issue.

Chapter -1

Introduction

India s way is not Europe s. India is not Calcutta and Bombay. India lives in her seven hundred thousand

villages.....................Mahatma Gandhi, 1926

Marketing in developing countries like India have often been borrowed from the western world. Concepts like Brand identity, Customer relationship management, 4 Ps of the marketing mix, Consumer behavior process; Segmentation, targeting and positioning etc. have often been lifted straight from the marketing intelligentsia abroad and adopted in Indian conditions, often with minimal success. Reason lies not in the fault of such concepts, but their integration with the Indian ethos and culture.

Rural market
India lives in her villages . As described by Adi Godrej, Chairman , Godrej Group The rural consumers is discerning and the rural market is vibrant . At the current of growth , it will soon outstrip the urban market. The rural market is no longer sleeping but we are . Before gamboling into issues like where the Indian rural market stands and the opportunities for corporates to explore there... let's look at the definition of urban and rural India. The Census defined urban India as - "All the places that fall within the administrative limits of a municipal corporation, municipality, cantonment board etc or have a population of at least 5,000 and have at least 75 per cent male working population in outside the primary sector and have a population density of at least 400 per square kilometer. Rural India, on the other hand, comprises all places that are not urban!"

In our country over 70%of the total population live in villages. There are states like U.P, M.P, Bihar, Rajasthan and Orissa where rural population varies from 8 to 9 percent. Agriculture and agriculture related activities contribute to about 75%of the income in rural areas. The general impression is that the rural markets have potential only for agricultural inputs like seeds, fertilizers and pesticides, cattle feed and agricultural machinery. More than 50%of the national income is generated in rural India and there are opportunities to market modern goods and services in rural areas and also market agricultural products in urban areas. Infact it has been estimated that the rural markets are growing at fives times the rate of urban markets. About 70% of bicycles, mechanical watches and radios and about 60%of batteries, sewing machine and table fans are sold in rural India. At the same time the sales of color television, washing machines, refrigerators, shampoos, face cream, mosquito repellent and tooth paste are very low and there is tremendous potential for such products in rural markets.

Rural market for FMCG on upswing - By Business Standard Ruchita Saxena / Mumbai December 27, 2007 Fast moving consumer goods (FMCG) companies can rejoice as the Rs 27,369 crore rural market in the country registered a growth rate of 17 per cent in the first ten months this year. About 34 per cent of the off take for FMCG products came from rural areas. FMCG companies are trying to tap the rural market with more vigor, given the fact that nearly 70 per cent of the countrys population lives in villages. The estimated number of households that are using FMCG products in rural India have grown from 13.6 crore in 2004 to 14.3 crore in 2007. This growth was achieved on an average year- on-year growth of 1.8 per cent in the number of households, which use at least one FMCG product. For some FMCG categories, the penetration levels have remained stagnant over the past three years. In others, the growth has been faster. A study by market research firm IMRB International shows that while the monthly consumption categories comprising detergents and toilet soaps have remained largely stagnant with a 92 per cent penetration, categories such as liquid shampoos have grown from 68 per cent in 2004 to 83 per cent in 2007. Moving to higher-value products seems to have happened across categories, from toothpowder to toothpaste or from unbranded to branded products.

HULs association with rural India

Mr Manwani spoke about the importance of rural India for Hindustan Unilever. More than 40% of our products are consumed in the fast growing markets of rural India. We have been pioneers in developing rural markets through affordable brands and an unparalleled distribution reach, he said. Mr Manwani spoke about how HUL is bringing alive the spirit of the Unilever Sustainable Living Plan to holistically contribute to the social, economic and environmental agenda with a significant impact on rural India. He spoke about how the company was working with small holder tomato farmers in Karnataka, Punjab and Maharashtra to help them adopt sustainable agricultural practices. We have initiated work to encourage the adoption of sustainable farming practices by our suppliers of tea, fruits and other vegetables both for India and other Unilever markets, he said. Referring to Project Shakti, Mr Manwani spoke about how it created income generating opportunities for 45,000 rural impoverished women and has also helped to increase the rural distribution of the Company. Project Shakti is an excellent example of doing well by doing good, he said. Speaking about Pureit, Mr Manwani referred to the launch of Pureit sachet and how it would help in a big way to make safe drinking water accessible & affordable to millions of consumers in India.

HUL Product line and its Segmentation in rural market

Product line Brands HUL is the market leader in Indian 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. Seventeen of HULs brands featured in the ACNielsen Brand Equity list of 100 Most Trusted Brands Annual Survey (2011). The company also happens to have the highest number of brands in this list, with six brands featuring in the top 15 list. The company has a distribution channel of 6.3 million outlets and owns 35 major Indian brands. Its brands include: Food brands:

Annapurna salt and atta Bru coffee Brooke Bond (3 Roses, Taj Mahal, Taaza, Red Label) tea Kissan squashes,ketchups, juices and jams Lipton tea Knorr soups & meal makers and soupy noodles Kwality Wall's frozen dessert Modern Bread, ready to eat chapattis and other bakery items

Home Care Brands

ActiveWheel detergent Cif Cream Cleaner Comfort fabric softeners Domex disinfectant/toilet cleaner Rin detergents and bleach Sunlight detergent and colour care

Surf Excel detergent and gentle wash Vim dishwash Magic Water Saver

Personal Care Brands

Aviance Beauty Solutions

Axe deodorant and aftershaving lotion and soap LEVER Ayush Therapy ayurvedic health care and personal care products Breeze beauty soap Clear anti-dandruff hair products Clinic Plus shampoo and oil Close Up toothpaste Dove bar & skin cleansing, hair care range,lotions & Creams and antiperspirant deodorants Denim shaving products Fair & Lovely - fairness products Hamam Lakm beauty products and salons Lifebuoy soaps and handwash range Liril 2000 soap Lux soap, body wash and deodorant Pears soap Pepsodent toothpaste Pond's talcs and creams Rexona soap Sunsilk shampoo Sure anti-perspirant Vaseline petroleum jelly, skin care lotions

Water Purifier Brand:

Pureit Water Purifier

The latest launches for Hindustan Unilever include: Axe soap bar, air and Lovely advanced multi vitamin,Pepsodent Expert protection range, Pepsodent Mouthwashes, Vaseline moisture therapy Heel Cream, Lakme Perfect Radiance range, Kissan sweet and spicy ketchup, New Vanilla Supreme from Kwality Walls, Kwality Walls Selection Range and Pureit Advanced with Double Protection.

Segmentation Of HUL
HUL is the largest FMCG company. HULs products are now in 2 hands out of 3 hands of India. The customer of HUL products is every one. Starting with child, youth to old age as well. Women are fond of the product of HUL. All product are available for womens needs & desires So, HUL is targeting as a whole for its product.

Literature Review

ReviewofLiterature

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 200mlbottle, 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 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. Dr. N. Rajendhiran(MBA, PhD)/ Mr. S. Saiganesh(MBA, MA,M.Phil)/ Ms. P. Asha (MBA)

Prime Minister Dr. Manmohan Singh recently talked about his vision for rural India: "My vision of rural India is of a modern agrarian, industrial and services economy co- existing side by side, where people can live in well-equipped villages and commute easily to work, be it on the farm or in the non-farm economy. There is much that modern science and technology can do to realise 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 socioeconomic changes in villages. The Rural population is nearly three times the urban, so that Rural consumers have become the prime target market for consumer durable and non-durable products, food, construction, electrical, electronics, automobiles, banks, insurance companies and other sectors besides hundred per cent of agri-input products such as seeds, fertilizers, pesticides and farm machinery. The Indian rural market today accounts for only about Rs 8 billion of the total ad pie of Rs 120 billion, thus claiming 6.6 per cent of the total share. So clearly there seems to be a long way ahead. Although a lot is spoken about the immense potential of the unexplored rural market, advertisers and companies find it easier to vie for a share the already dividend urban pie.

RESEARCH PROBLEM AND ITS

BACKGROUND

RESEARCH PROBLEM

HUL is facing the problem rather challenges from Large number of players in the market tinuous changes in the taste and preferences of the customers such problems were identified as Research Problems and the objective statement was formed on its basis. The research problem is that of study of rural market with special emphasis on Customer preference for HUL in rural India through Rural relation. And understanding the process of rural marketing and the underlying problems within and measures taken thereof. Research to find out following Acceptability among the customers motional analysis Rural relation is an organization which is working in rural market for various companies. Who helps them for provide information about product with helps of market research? and helps in companies as end to end users for establish in rural market. Rural relation worked on project for leading companies like ICICI prudential, HLL, Rasana, and hutch. Rural relation building relationships in rural India with key influencers.

Statistical Glance A glance at the following statistics will help to get a fair idea of the consumers in Rural India: 1. 46 percent of soft drinks. 2. 49 percent of motorcycles. 3. 59 percent of cigarettes. 4. 18 million TV Sets. 5. 50 percent of 2 million BSNL mobile connections. 6. 53 percent of FMCG products. 7. 59 percent of consumer durables are sold in rural India. Rural markets, as part of any economy, have untapped potential. There are several difficulties confronting the effort to fully explore rural markets. The concept of rural markets in India, as also in several other countries, like China, is still in evolving shape, and the sector poses a variety of challenges, including understanding the dynamics of the rural markets and strategies to supply and satisfy the rural consumers.

Myth-1: Indian rural market is a homogeneous mass. Reality- its a heterogeneous mass. Various tires are present depending on the income like big land lords, Traders small farmers: labor artisans. People belonging to deferent social classes stay in concentric area. So the available product suffice the consumption for everyone.

Myth-2: disposable income is low. Reality- number of middle class HHs people(annual income Rs 50,000-2,50,000)for rural sector is 27000000 compared to urban sector 29400000.Rural income CAGR was10.95% compared to 10.74%in urban India between 1970-71 and 1993-94, the disposable income is slightly higher in rural market. Myth-3: Individual decides about the purchases. Reality- decision making process is collective. Purchase processinfluencer decider and buyer. One who can pay all its different. Marketers must address brand message at all levels. Rural youth bring brand knowledge to Households (HH). Basic awareness about the product brand has to be there in market. This can be done by putting small advertising sheets at the mandis and where the regular mass meets regularly.

Research Methodology

Primary data & Secondary data

Primary data has been collected through personal contact. For this purpose both Questionnaire and one-on-one interview was considered with the consumers, shop Owners, distributors & suppliers of the company. Secondary data has collected from magazines, newspaper, company literature and Websites.

OBJECTIVES

PRIMARY OBJECTIVE

Customer preference and brand relationship for FMCG product (HUL) in rural India. And make people more brand loyal. 1) To analyze the present promotion strategy of rural brands(HUL) in rural markets. a. To study the modes of communications used and their effectiveness. b. To find out the role of promotion in rural sales. c. To find out the promotional strategies of different players in the market. 2) To measure the success of rural marketing campaign of the brands(HUL)interms of consumer appreciation. a. To study the determinants of specification factors which decide the success of rural promotional strategy? 3)To evaluatethe effectsofadoptingthespecific brand ambassadors in the rural marketing context.

4) To analyze the market opportunity and potential for existing and newentrants in the rural market. a. To find the growth of rural market over a period of 5 yrs. b. To find the behavioral changes in the rural consumers.

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

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

A) Research Design:
Research design of this study is Descriptive and Analytical .

B) Research Tools:
Questionnaire:
From the above theories and preference of consumer towards brand of HUL in rural areas and the perception towards brand of HUL, as per requirement I will develop questionnaire that contain different questions for checking out behavior aspect of consumer in rural areas .

C) Sampling Plan:
Target Sample:
The person who is user of HUL product or Like to have an HUL brand product is target sample.

Sampling Size:
Here I take the sample size of 100 investors who do the transaction in share market.

Sampling Techiqunies:
The sampling techiqunies of this study is Random Sampling.