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PROJECT REPORT ON RURAL MARKETING IN ITC: OPPORTUNITIES AND CHALLENGES

Submitted in the partial fulfillment of the requirement for the award of degree of
MASTERS OF BUSINESS ADMINISTRATION SESSION (2011-2013)

SUBMITTED TO : KURUKSHETRA UNIVERSITY , KURUKSHETRA

SUBMITTED BY:Sonu Kumar MBA Final (Marketing) Univ. Roll No.: _______

SETH JAI PARKASH MUKAND LAL INSTITUTE OF ENGINEERING & TECHNOLOGY (JMIT) CHHOTA BAANS, RADAUR,YNR, HARYANA
(Approved by AICTE, Affiliated to Kurukshetra University, Kurukshetra)

CERTIFICATE Dated
It is to certify that Mr. Sonu kumar bearing Roll No. : 2011035 & Univ. Roll No.: _____________ bonafied students of Seth Jai Parkash Mukand Lal Institute of Engineering & Technology (JMIT, RADAUR), during session 2011-13 has completed their research entitled Rural Marketing in ITC: Opportunities and challenges which is compulsory part of the syllabus. I wish him all the success for their future endeavor.

MRS. SUNITA
AP ( MBA) JMIT, RADAUR

DECLARATION

I, Sonu kumar student of MBA-final, studying at SETH JAI PARKASH MUKAND LAL INSTITUTE OF ENGINEERING & TECHNOLOGY (JMIT) CHHOTA BAANS, RADAUR, YNR, hereby declare that the project report on Rural Marketing in ITC : Opportunities and challenges submitted to KURUKSHETRA

UNIVERSITY, KURUKSHETRA in partial fulfillment of Degree of Masters of Business Administration is the original work conducted by me. The information and data given in the report is authentic to the best of my knowledge. This Project report is not being submitted to any other University for award of any other Degree, Diploma and Fellowship.

(SONU KUMAR)

ACKNOWLEDGEMENT

My sincere thanks are due to all the contributors without whose efforts this project would not have been completed. No task of this nature is a single person effort, so I am very thankful to Dr. J.P. Banerji (JMIT, RADAUR) for providing me the opportunity for doing the research work . I successfully completed my research work. Their unfailing interest and support gave a new dimension to my work. They made it possible to collect abundance of material, the relevant portion of which is quoted in this project I am also very grateful to especially Mrs.Sunita (A.P, MBA) whose teaching methodology helped me in completion of my project without any difficulty. This is the effort done by me which brings the result of this research report completion entitled on Rural Marketing in ITC: Opportunities and challenges So, I am very thankful to all of the faculty members for the proper and timely guidance.

SONU KUMAR

PREFACE
The main objective of the project is familiarization with the necessary theoretical inputs and to gain sufficient practical exposure to establish a distant linkage between the conceptual knowledge acquired at the institute and practices those concepts . The Project is concerned with the Rural Marketing in ITC: Opportunities and challenges During my tenure of research , I studied the various development tools and deeply analyzed the functions. Prior to making reference to working of the project prepared, the analysis and feasibility and all other aspect were taken into consideration.

TABLE OF CONTENTS
DESCRIPTION OF CONTENTS Certificate Declaration Acknowledgement Preface INTRODUCTION OF Rural Marketing And ITC OBJECTIVES OF STUDY LITERATURE REVIEW RESEARCH METHODOLOGY
MEANING TYPES OF RESEARCH RESEARCH DESIGN SAMPLING DESIGN DATA COLLECTION SOURCES AREA & SCOPE OF THE STUDY

PAGE NO. i ii ii iv 1-

DATA ANALYSIS AND INTERPRETATIONS FINDINGS LIMITATIONS OF THE STUDY SUGGESTIONS CONCLUSION BIBLIOGRAPHY

ANNEXURE

INTRODUCTION

Introduction
To promote brands in rural markets requires the special dealings. Due to the social and backward condition the personal selling efforts become a challenging role to play. 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 Indian established Industries have the advantages, which MNC don't enjoy in this regard. 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 paper is therefore an attempt to understand opportunities, challenges and strategies in the rural market. Indian Marketers on rural marketing have two understanding (i) The urban metro products and marketing products can be implemented in rural markets with some or no change. (ii) The rural marketing required the separate skills and techniques from its urban counterpart. The Marketers have many facilities to make them believe in accepting the truth that rural markets are different in so many terms.

Realities before the Marketers 70% of the Indian population lives in rural areas. This segment, commonly referred to as the 'bottom of the pyramid', presents a huge opportunity for companies. In recent years, rural markets have acquired significance, as the overall growth of the economy has resulted into substantial increase in the purchasing 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. But often, rural marketing is confused with agricultural marketing Agricultural marketing denotes marketing of goods and services of the rural areas to the urban consumers or industrial consumers, whereas rural marketing involves delivering manufactured or processed goods or services to rural producers or consumers.

Concept
"The future lies with those companies who see the poor as their customers." In recent years, rural markets have acquired significance, as the overall growth of the economy has resulted into substantial increase in the purchasing 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. But often, rural marketing is confused with agricultural marketing - the latter denotes marketing of produce of the rural areas to the urban consumers or industrial consumers, whereas rural marketing involves delivering manufactured or processed inputs or services to rural producers or consumers.

What Makes Rural Markets Attractive?

Rural market has following attributes and the following facts substantiate this: 742 million people Estimated annual size of the rural market

FMCG Durables Agri-Inputs(including tractors) 2 /4 Wheelers

Rs. 65,000 Crore Rs. 5,000 Crore Rs. 45,000 Crore Rs. 8,000 Crore

Source: NCAER(National Council of Applied Economic Research) In 2011-12, LIC sold 55% of its policies in rural India. Of two million BSNL mobile connections, 50% are in small towns / villages. Of the 6.0 lakh villages, 5.22 lakh have a Village Public Telephone (VPT). 41 million Kisan Credit Cards have been issued (against 22 million credit-plusdebit cards in urban), with cumulative credit of Rs. 977 billion resulting in tremendous liquidity. Of the 20 million Rediffmail sign-ups, 60% are from small towns. 50% of transactions from these towns are on Rediff online shopping site. 10

42 million rural households (HHs) are availing banking services in comparison to 27 million urban HHs.

Investment in formal savings instruments is 6.6 million HHs in rural and 6.7 million HHs in urban.

Opportunities
Infrastructure is improving rapidly In 50 years only, 40% villages have been connected by road, in next 10 years another 30% would be connected. More than 90% villages are electrified, though only 44% rural homes have electric connections. Rural telephone density has gone up by 300% in the last 10 years; every 1000+ pop is connected by STD. Social indicators have improved a lot between 1981 and 2012 Number of "pucca" houses doubled from 22% to 41% and "kuccha" houses halved (41% to 23%). Percentage of BPL families declined from 46% to 27%. Rural literacy level improved from 36% to 59%. Low penetration rates in rural areas, so there are many marketing opportunities Proliferation of large format Rural Retail Stores, which have been successful also.

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Rural Consumer Insights

Rural India buys Products more often (mostly weekly). Buys small packs, low unit price more important than economy. In rural India, brands rarely fight with each other; they just have to be present at the right place. Many brands are building strong rural base without much advertising support. Chik shampoo, second largest shampoo brand. Ghadi detergent, third largest brand. Fewer brand choices in rural areas; number of FMCG brand in rural is half that of urban. Buy value for money, not cheap products.

Some Myths Myth 1: Rural Market is a Homogeneous Mass Reality: It's a heterogeneous population. Various Tiers are present depending on the
incomes like Big Landlords; Traders; Small Farmers; Marginal Farmers: Labourers; Artisans. State wise variations in rural demographics are present viz. literacy (Kerala 90%, Bihar 44%) and population below poverty line (Orissa 48%, Punjab 6%).

Myth 2: Disposable Income is Low

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Reality: Number of middle class HHs (annual income Rs. 45,000 - 2,15,000) for rural
sector is 27.4 million as compared to the figure of 29.5 million for urban sector. Rural incomes CAGR was 10.95% compared to 10.74% in urban between 1970-71 and 199394.

Myth 3: Individuals Decide About Purchases Reality: Decision making process is collective. Purchase process - influencer, decider,
buyer, one who pays - can all be different. So marketers must address brand message at several levels. Rural youth brings brand knowledge to Households (HH).

Why Different Strategies?

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 is still in evolving shape, and the sector poses a variety of challenges. Distribution costs and non-availability of retail outlets are major problems faced by the marketers. The success of a brand in the Indian rural market is as unpredictable as rain. Many brands, which should have been successful, have failed miserably. This is because most firms try to extend marketing plans that they use in urban areas to the rural markets. The unique consumption patterns, tastes, and needs of the rural consumers should be analyzed at the product planning stage so that they match the needs of the rural people. Therefore, marketers need to understand the social dynamics and attitude variations within each village though nationally it follows a consistent pattern. The main problems in rural marketing are: Understanding the Rural Consumer Poor Infrastructure Physical Distribution Channel Management 13

Promotion and Marketing Communication

Dynamics of rural markets differ from other market types, and similarly, rural marketing strategies are also significantly different from the marketing strategies aimed at an urban or industrial consumer.

Strategies to be Followed Marketing Strategy

Marketers need to understand the psyche of the rural consumers and then act accordingly. Rural marketing involves more intensive personal selling efforts compared to urban marketing. Firms should refrain from designing goods for the urban markets and subsequently pushing them in the rural areas. To effectively tap the rural market, a brand must associate it with the same things the rural folks do. This can be done by utilizing the various rural folk media to reach them in their own language and in large numbers so that the brand can be associated with the myriad rituals, celebrations, festivals, "melas", and other activities where they assemble.

Distribution Strategy
One of the ways could be using company delivery van which can serve two purposes - it can take the products to the customers in every nook and corner of the market, and it also enables the firm to establish direct contact with them, and thereby facilitate sales promotion. However, only the bigwigs can adopt this channel. The companies with relatively fewer resources can go in for syndicated distribution where a tie-up between non-competitive marketers can be established to facilitate distribution. Annual "melas" organized are quite 14

popular and provide a very good platform for distribution because people visit them to make several purchases. According to the Indian Market Research Bureau, around 8000 such melas are held in rural India every year. Rural markets have the practice of fixing specific days in a week as Market Days (often called "Haats') when exchange of goods and services are carried out. This is another potential low cost distribution channel available to the marketers. Also, every region consisting of several villages is generally served by one satellite town (termed as "Mandis" or Agri-markets) where people prefer to go to buy their durable commodities. If marketing managers use these feeder towns, they will easily be able to cover a large section of the rural population.

Promotional Strategy
Firms must be very careful in choosing the vehicle to be used for communication. Only 16% of the rural population has access to a vernacular newspaper. So, the audio visuals must be planned to convey a right message to the rural folk. The rich, traditional media forms like folk dances, puppet shows, etc., with which the rural consumers are familiar and comfortable, can be used for high impact product campaigns.

Some Live Examples

One very fine example can be quoted of Escorts where they focused on deeper penetration. They did not rely on TV or press advertisements, but rather concentrated on focused approach depending on geographical and market parameters like fares, melas, etc. Looking at the 'kuchha' roads of village, they positioned their bike as tough vehicle. Their advertisements showed Dharmendra riding Escort with the punch line 'Jandar Sawari, Shandar Sawari'. Thus, they achieved whopping sales of 95000 vehicles annually. 15

HLL started 'Operation Bharat' to tap the rural markets. Under this operation, it passed out low-priced sample packets of its toothpaste, fairness cream, Clinic plus shampoo, and Ponds cream to twenty million households.

ITC is setting up e-Choupals, which offers the farmers all the information, products and services they need to enhance farm productivity, improve farmgate price realization and cut transaction costs. Farmers can access latest local and global information on weather, scientific farming practices as well as market prices at the village itself through this web portal - all in Hindi. It also facilitates supply of high quality farm inputs as well as purchase of commodities at their doorstep.

BPCL introduced Rural Marketing Vehicle (RMV) as their strategy for rural marketing. It moves from village to village and fills cylinders on the spot for the rural customers. BPCL considered low-income of rural population, and therefore introduced a smaller size cylinder to reduce both the initial deposit cost as well as the recurring refill cost.

CONTRIBUTION OF RURAL MARKETING IN INDIAN ECONOMY

The concept of Rural Marketing in India Economy has always played an influential role in the lives of people. In India, leaving out a few metropolitan cities, all the districts and industrial townships are connected with rural markets. The rural market in India is not a separate entity in itself and it is highly influenced by the sociological and behavioral factors operating in the country. The rural population in India accounts for around 627 million, which is exactly 74.3 percent of the total population. 16

The rural market in India brings in bigger revenues in the country, as the rural regions comprise of the maximum consumers in this country. The rural market in Indian economy generates almost more than half of the country's income. Rural marketing in Indian economy can be classified under two broad categories. These are:

The market for consumer goods that comprise of both durable and non-durable goods The market for agricultural inputs that include fertilizers, pesticides, seeds, and so on

The concept of rural marketing in India is often been found to form ambiguity in the minds of people who think rural marketing is all about agricultural marketing. However, rural marketing determines the carrying out of business activities bringing in the flow of goods from urban sectors to the rural regions of the country as well as the marketing of various products manufactured by the non-agricultural workers from rural to urban areas. To be precise, Rural Marketing in India Economy covers two broad sections, namely:

Selling of agricultural items in the urban areas Selling of manufactured products in the rural regions

Some of the important features or characteristics of Rural Marketing in India Economy are being listed below:

With the initiation of various rural development programmes there have been an upsurge of employment opportunities for the rural poor. One of the biggest cause behind the steady growth of rural market is that it is not exploited and also yet to be explored.

The rural market in India is vast and scattered and offers a plethora of opportunities in comparison to the urban sector. It covers the maximum population and regions and thereby, the maximum number of consumers.

The social status of the rural regions is precarious as the income level and literacy is extremely low along with the range of traditional values and superstitious beliefs that have always been a major impediment in the progression of this sector. 17

The steps taken by the Government of India to initiate proper irrigation, infrastructural developments, prevention of flood, grants for fertilizers, and various schemes to cut down the poverty line have improved the condition of the rural masses.

RURAL MARKETING - CHALLENGES

Prime Minister 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 socio-economic changes in villages. The Rural population is nearly three times the urban, so that Rural consumers have become the prime target market for consumer durable and non-durable products, food, construction, electrical, electronics, automobiles, banks, insurance companies and other sectors besides hundred per cent of agri-input products such as seeds, fertilizers, pesticides and farm machinery. The Indian rural market today accounts for only about Rs 8 billion of the total ad pie of Rs 120 billion, thus claiming 6.6 per cent of the total share. So clearly there seems to be a long way ahead. Although a lot is spoken about the immense potential of the unexplored rural market, advertisers and companies find it easier to vie for a share of the already divided urban pie. The success of a brand in the Indian rural market is as unpredictable as rain. It has always been difficult to gauge the rural market. Many brands, which should have been successful, have failed miserably. More often than not, people attribute rural market success to luck. Therefore, marketers need to understand the social dynamics and attitude variations within each village though nationally it follows a consistent pattern looking at the challenges and the opportunities which rural markets offer to the marketers it can be 18

said that the future is very promising for those who can understand the dynamics of rural markets and exploit them to their best advantage. A radical change in attitudes of marketers towards the vibrant and burgeoning rural markets is called for, so they can successfully impress on the 230 million rural consumers spread over approximately six hundred thousand villages in rural India.

What rural market buys?

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

Why Rural Market?

The Indian rural market has a huge demand base and offers great opportunities to marketers. Two-thirds of Indian consumers live in rural areas and almost half of the national income is generated here. The reasons for heading into the rural areas are fairly clear. The urban consumer durable market for products like colour TVs, washing machines, refrigerators and air conditioners is growing annually at between 7 per cent and 10 per cent. The rural market is zooming ahead at around 25 per cent annually. "The rural market is growing faster than urban India now," says Venugopal Dhoot, chairman of the Rs 989 -crore(Rs billion) Videocon Appliances. "The urban market is a replacement and up gradation market today," adds Samsung's director, marketing, Ravinder Zutshi.

Reasons for improvement of business in rural area

Socio-economic changes (lifestyle, habits and tastes, economic status) Literacy level (25% before independence more than 65% in 2001) 19

Infrastructure facilities (roads, electricity, media) Increase in income Increase in expectations

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

Special features of rural market

Unlike urban markets, rural markets are difficult to predict and possess special characteristics. The featured population is predominantly illiterate, have low income, characterized by irregular income, lack of monthly income and flow of income fluctuating with the monsoon winds. Rural markets face the critical issues of Distribution, Understanding the rural consumer, Communication and Poor infrastructure. The marketer has to strengthen the distribution and pricing strategies. The rural consumer expects value for money and owing to has unsteady and meager status of weekly income; increasing the household income and improving distribution are the viable strategies that have to be adapted to tap the immense potential of the market. Media reach is a strong reason for the penetration of goods like cosmetics, mobile phones, etc., which are only used by the urban people. Increasing awareness and knowledge on different products and brands accelerate the demand. The rural audience are however critical of glamorous ads on TV, and depend on the opinion leaders who introduce the product by using it and recommending it. Opinion leaders play a key role in popularizing products and influence in rural market. Nowadays educated youth of rural also influences the rural consumers. Rural consumers 20

are influenced by the life style they watch on television sets. Their less exposure to outside world makes them innocent and fascinated to novelties. The reach of mass television media, especially television has influenced the buying behaviour greatly

Creating brands for rural India

Rural markets are delicately powerful. Certain adaptations are required to cater to the rural masses; they have unique expectation and warrant changes in all four parameters of product, price, promotion and distribution. A lot is already emphasized on adapting the product and price in terms of packaging, flavouring, etc and in sachets, priced to suit the economic status of the rural India in sizes like Rs.5 packs and Re.1 packs that are perceived to be of value for money. This is a typical penetration strategy, that promises to convert the first time customers to repeated customers. The promotion strategies and distribution strategies are of paramount importance. Ad makers have learnt to leverage the benefits of improved infrastructure and media reach. The television airs advertisements to lure rural masses, and they are sure it reaches the target audience, because majority of rural India possesses and is glued to TV sets! Distributing small and medium sized packets thro poor roads, over long distances, into deep pockets of rural India and getting the stockiest to trust the mobility is a Herculean task. Giving the confidence those advertisements will support. Sales force is being trained to win the confidence of opinion leaders. Opinion leaders play an important role in popularizing the brand. They sometimes play the role of entry barriers for new products. The method of promotion needs to be tailored to suit the expectations of the market. Techniques that have proved to be successful are Van campaigns, edutainment films, generating word of mouth publicity through opinion leaders, colourful wall paintings. The Wide reach of television has exposed the other wise conservative audience to westernization. Panchayat televisions in Tamilnadu carries message that are well received and contribute to community development. 21

Dynamics of rural markets differ from other market types, and similarly rural marketing strategies are also significantly different from the marketing strategies aimed at an urban or industrial consumer. This, along with several other related issues, have been subject matter of intense discussions and debate in countries like India and China and focus of even international symposia organized in these countries. Rural markets and rural marketing involve a number of strategies, which include: * Client and location specific promotion * Joint or cooperative promotion * Bundling of inputs * Partnership for sustainability Client and Location specific promotion involves a strategy designed to be suitable to the location and the client. Joint or co-operative promotion strategy involves participation between the marketing agencies and the client. 'Bundling of inputs' denote a marketing strategy, in which several related items are sold to the target client, including arrangements of credit, after-sale service, and so on. Media, both traditional as well as the modern media, is used as a marketing strategy to attract rural customers. Partnership for sustainability involves laying and building a foundation for continuous and long lasting relationship. Innovative media can be used to reach the rural customers. Radio and television are the conventional media that are reaching the rural audience effectively. But horse cart, bullock cart and wall writing are the other media, which can carry the message effectively to the rural customers. Rural marketing is an evolving concept, and as a part of any economy has untapped potential; marketers have realized the opportunity recently. Improvement in infrastructure and reach, promise a bright future for those intending to go rural. Rural consumers are 22

keen on branded goods nowadays, so the market size for products and services seems to have burgeoned. The rural population has shown a trend of wanting to move into a state of gradual urbanization in terms of exposure, habits, lifestyles and lastly, consumption patterns of goods and services. There are dangers on concentrating more on the rural customers. Reducing the product features in order to lower prices is a dangerous game to play.

RURAL MARKET - OPPORTUNITY

GONE ARE the days when a rural consumer went to a nearby city to buy``branded products and services". Time was when only a select household consumed branded goods, be it tea or jeans. There were days when big companies flocked to rural markets to establish their brands. Today, rural markets are critical for every marketer - be it for a branded shampoo or an automobile. Time was when marketers thought van campaigns, cinema commercials and a few wall paintings would suffice to entice rural folks under their folds. Thanks to television, today a customer in a rural area is quite literate about myriad products that are on offer in the market place. An Indian farmer going through his daily chores wearing jeans may sound idiotic. Not for Arvind Mills, though. When it launched the Ruf & Tuf kits, it had created quite a sensation among the rural folks as well within few months of their launch. Trends indicate that the rural markets are coming up in a big way and growing twice as fast as the urban, witnessing a rise in sales of hitherto typical urban kitchen gadgets such as refrigerators, mixer-grinders and pressure cookers. According to a 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. At the highest income level there are 2.3 million urban households as against 1.6 million households in rural areas. According to Mr. D. Shivakumar, 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. 23

As per NCAER projections, the number of middle and high income households in rural India is expected to grow from 80 million to 111 million by 2007. In urban India, the same is expected to grow from 46 million to 59 million. Thus, the absolute size of rural India is expected to be double that of urban India. The study on ownership of goods indicates the same trend. It segments durables under three groups - (1) necessary products - Transistors, wristwatch and bicycle, (2) Emerging products - B&W TV and cassette recorder, (3) Lifystyle products - CTV and refrigerators. Marketers have to depend on rural India for the first two categories for growth and size. Even in lifestyle products, rural India will be significant over next five years. At a recent seminar in Chennai on 'rural marketing for competitive advantage in globalised India', organised by Anugrah Madison Advertising Pvt Limited, marketing pundits have echoed that a sound network and a thorough understanding of the village psyche are a SINE QUO NON for making inroads into rural markets. The pricesensitivity of a consumer in a village is something the marketers should be alive to. Rural income levels are largely determined by the vagaries of monsoon and, hence, the demand there is not an easy horse to ride on. Apart from increasing the geographical width of their product distribution, the focus of corporates should be on the introduction of brands and develop strategies specific to rural consumers. Britannia Industries launched Tiger Biscuits especially for the rural market. It clearly paid dividend. Its share of the glucose biscuit market has increased from 7 per cent to 15 per cent.

Effective communication
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", says Mr. R.V Rajan, CMD, Anugrah Madison Advertising. 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. 24

There is a need to differentiate the brand according to regional disparities. The differentiation may not necessarily be in terms of product content. It may also be in terms of packaging, communication or association with the brand. The brand has to be made relevant by understanding local needs. Even offering the same product in different regions with different brand names could be adopted as a strategy. At times it is difficult to pass on an innovation over an existing product to the rural consumer unlike his urban counterpart - like increased calcium or herbal content or a germ-control formula in toothpaste. According to Mr. Shivakumar, HLL, the four factors which influence demand in rural India are - access, attitude, awareness and Affluence. HLL has successfully used this to influence the rural market for its shampoos in sachets. The sachet strategy has proved so successful that, according to an ORG - MARG data, 95 per cent of total shampoo sales in rural India is by sachets. The company had developed a direct access to markets through wholesale channel and created awareness through media, demonstration and on ground contact. This changed the attitude of the villagers. Today, the young and the educated in the villages are already large in number. And this number is increasing. Already, 40 per cent of all those graduating from colleges are rural youth. They are the decision makers and are not very different in education, exposure, attitudes and aspirations from their counterparts at least in smaller cities and towns.

District marketing
Since marketing is to target the growing segments, Mr. Francis Xavier, Managing Director, Francis Kanoi Marketing Research, wants to see the urban-like village dweller as an urbanized person from the districts. The village then becomes a location or a suburb of a district. And the district becomes the basic geographical entity. Since the urban-like populations in the villages are taken as a part of the district, they will represent the dominant part of the market in most of the districts. This will compel the kind of attention that it deserves. A districts perspective removes the complexities, heterogeneity, access and targetability that have hindered rural marketing initiatives. He feels that rural 25

marketing requires every element of marketing including product, pricing, packaging, advertising, and media planning to have the rural customer as the target. And, this becomes possible when we have districts marketing as a separate entity.

IMPACT OF GLOBALISATION
The impact of globalisation will be felt in rural India as much as in urban. But it will be slow. It will have its impact on target groups like farmers, youth and women. Farmers, today 'keep in touch' with the latest information and maximise both ends. Animal feed producers no longer look at Andhra Pradesh or Karnataka. They keep their cell phones constantly connected to global markets. Surely, price movements and products' availability in the international market place seem to drive their local business strategies. On youth its impact is on knowledge and information and while on women it still depends on the socio-economic aspect. The marketers who understand the rural consumer and fine tune their strategy are sure to reap benefits in the coming years. In fact, the leadership in any product or service is linked to leadership in the rural India except for few lifestyle-based products, which depend on urban India mainly.

RURAL BRANDING IS DISTINCTLY DIFFERENT FROM URBAN MARKETING

In rural India, the branding rules are distinctly different from urban markets. Not only does the cultural landscape differ, the factors that influence purchasing decisions differ too. Price and value for money are high on their list. Rural branding calls for a greater component of local media and less of the mass media. Since these markets have specialized forums of their own like like temple festivals, melas, cinema halls, these can be leveraged to promote brands. Direct Marketing and events like road shows, film shows, melas, street theatre can also be used to promote brands. Since the literacy rate is not so high, branding activities move more towards symbols, visuals and audio and video campaigns. 26

Source: India today Magzine In a market where life has revolved around deep rooted community values, joint families, and social customs and taboos (women, for example, are not allowed to wear trousers), marketers realize that the traditional routes of market entry and brand building employed in urban India are often not feasible. As Adi Godrej, Chairman of the Godrej Group, says, The challenge [for brands] is to understand the [psyche] of the rural consumer, create better distribution, and [appreciate] the heterogeneity. In recent times, rural India has witnessed a wave of change. Dinesh Malhotra, general manager of Linterland (rural arm of Lintas), points out, With media exposure and increasing literacy levels, people in rural India are now demanding a better lifestyle. The educated rural yuppie (males in the 15-34 age group) is moving out to work in nearby towns and cities, and sending money home to his family. This has created an indirect increase in disposable incomes and a surge in demand for consumer goods. The rural youth are slowly evolving as opinion leaders in influencing brand and product decisions in a market that was swayed by village elders for centuries.

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When building a brand in rural India, word-of-mouth is a huge motivator. Focused brandbuilding initiativeslike participation at community events such as melas (village fairs), haats (markets), street theater, van campaigns, and puppet showsgenerate positive word-of-mouth and influence buying decisions. Cholayil Ltd., a purveyor of the herbal soap Medimix, campaigned in mobile vans to promote its brand. We run a van campaign which visits the interior villages where there are no distributors. We halt the van at specific points [where village folks congregate and watch videos shown on these vans] and give out product samples. However, contrary to claims of Medimixs success, Malhotra believes that van campaigns can be very expensive. [Alternatively, promoting ones brand] in large congregation points like village markets and fairs has a far wider reach, and is more cost effective. Direct media promotions have helped build knowledge of product categories and change long-entrenched living habits. Colgate-Palmolive, a leading oral hygiene product manufacturer, entered the rural market at a time when Neem twigs (the Neem tree has herbal properties) and non-dentifrice products like ash, charcoal, or salt were the norm for brushing teeth (in fact in some rural pockets, this tradition still continues). In 2001, Colgate-Palmolive launched Operation Jagruti to educate villagers about oral hygiene and its benefits vis--vis traditional products like Neem. Through product trials and free samples, the company was able to generate awareness in this new market. On a similar note, CK Ranganathan, managing director of Cavin Kare, notes, When we entered the rural areas in South India, people used to wash their hair with soap. When we launched the Chik brand of shampoo we educated the people on how to use it through live touch and feel demonstrations and also distributed free sachets at fairs. This strategy worked wonders in the rural areas of Tamil Nadu and Andhra Pradeshtwo important states in India. Colgate and Cavin Kare have shown that communication is key when it comes to building brands in rural markets. As R. V. Rajan, managing director of the Anugrah Advertising Agency, adds, To communicate effectively, it is important to understand the

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fears, aspirations, and hopes of the rural consumer. Not to mention the traditions and stereotypes that have governed their lives for centuries.

Source: India today Magzine While communicating the brand message, marketers must realize that language plays a prime role. Though a large part of urban India is well versed in English (thanks to the British and modern television), in rural India, heritage plays a powerful role and regional languages are predominant. There are 15 regional languages, and 1600 dialects in India, and as one moves into the countryside, English is replaced with regional tongues. V. S. Sitaram, Dabur India executive director, explains, Often people treat India as one big market, but the reality is that India is more like the European Uniona mix of different cultures, habits and languages. Dabur is also considering the use of South Indian celebrities to propagate the brand message in South India. Marketing companies not only need to customize their communication, but in some cases they must also change their product names to match regional differences. Take toothpaste, for example: Daburs Lal Dant Manjan (red toothpowder in Hindi) was rechristened as Dabur Sivappu Pal Podi (red toothpowder in Tamil, the local language) for the South Indian market. Affordability of the product is also a critical success factor when building brands. A spokesperson from Tata Group, which retails the Sonata brand of watches to rural India, says, [rural folks] think of a purchase in terms of how it serves their needs and how well its suits the family, rather than the individual. Products must be affordable and immensely practical. Furthermore, since the rural consumer often survives on daily wages, he engages in daily purchases. Several companies like Cavin Kare, Godrej, and 29

Dabur adopted the single use sachet strategy, which has worked in their favor. As Byas Anand, Senior Manager, Corporate Communications, Dabur India, claims, We introduced one-rupee sachets (2.5 cents) for Dabur Vatika shampoo which resulted in doubling of volumes in the rural market. Though pricing is important, rural consumers favor quality as well. For rural consumers, a purchase is a bigger investment than it is for the urban, veteran consumer. Hence, a particular brand will be rewarded only if it earns the rural consumers trust through consistent product quality. As R.V. Rajan says, the rural consumer is conscious of value for money, and it might be difficult to convert him to a new brand. However, once converted he is fiercely loyal to the brand. This issue will be a challenging one for corporations when they strategize their brand entry and decide how to balance pricing with brand quality.

Source: India today Magzine The challenge doesnt end with just building brand awareness. While television and direct marketing activities help rural consumers learn about different brands, ensuring product availability is even more critical. Marketers in rural India claim that setting up a supply chain that reaches the remotest rural areas is extremely arduous given the infrastructure in the country. According to Harish Manwani, chairman of Hindustan Unilever Limited (HUL), The rural market [centers] are scattered over large areas and 30

[their] connectivity to the urban centers is poor. To overcome the distribution challenge and increase penetration in rural hinterlands, HUL launched a unique operation called Project Shakti in 2001 (Shakti is a Hindi word which means strength). The project targeted rural women from existing self-help groups to work as direct-to-home distributors for HUL products, and helped the company break into a market they were unfamiliar with. Malhotra (Linterland) believes that, While Project Shakti might have worked for HUL, it is not an established channel. Reasons like relatively high capital investment, gender roles, and taboos could present an upper limit to those sales numbers. According to Malhotra, a hub and spoke model of distribution is the future. As he explains, We successfully adopted the hub and spoke model for Dabur India and it has worked very well. Here, feeder towns, primarily on the highways serve as hubs, where companies can rent a warehouse and stock their products. [Spokes are comprised of] cyclist salesmen [who] then distribute products to small retail outlets in nearby rural pockets. In short, customized and affordable products, effective distribution, and focused marketing initiatives are essential factors in building credibility for a brand in rural India. Brand awareness and trust will play a key role in combating the blitz of local copycat brands that are formidable competition. If marketers tailor make their brand building initiatives according to the dynamics of the rural market, it may no longer come as a surprise to see the rural Indian consumer sitting before a Samsung television, enjoying a bag of Frito-Lay potato chips, and drinking a bottle of Coke.

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INTRODUCTION TO HISTORY OF ITC

ITC was incorporated on August 24, 1910 under the name of 'Imperial Tobacco Company of India Limited'. Its beginnings were humble. A leased office on Radha Bazar Lane, Kolkata, was the centre of the Company's existence. The Company celebrated its 16th birthday on August 24, 1926, by purchasing the plot of land situated at 37, Chowringhee, (now renamed J.L. Nehru Road) Kolkata, for the sum of Rs 310,000. This decision of the Company was historic in more ways than one. It was to mark the beginning of a long and eventful journey into India's future. The Company's headquarter building, 'Virginia House', which came up on that plot of land two years later, would go on to become one of Kolkata's most venerated landmarks. The Company's ownership progressively Indianised, and the name of the Company was changed to I.T.C. Limited in 1974. In recognition of the Company's multi-business portfolio encompassing a wide range of businesses - Cigarettes & Tobacco, Hotels, Information Technology, Packaging, Paperboards & Specialty Papers, Agri-Exports, Foods, Lifestyle Retailing and Greeting 32

Gifting & Stationery - the full stops in the Company's name were removed effective September 18, 2001. The Company now stands rechristened 'ITC Limited'. Though the first six decades of the Company's existence were primarily devoted to the growth and consolidation of the Cigarettes and Leaf Tobacco businesses, the Seventies witnessed the beginnings of a corporate transformation that would usher in momentous changes in the life of the Company. ITC's Packaging & Printing Business Division, was set up in 1925 as a strategic backward integration for ITC's Cigarettes business. It is today India's most sophisticated packaging house. In 1975 the Company launched its Hotels business with the acquisition of a hotel in Chennai which was rechristened 'ITC-Welcomgroup Hotel Chola'. The objective of ITC's entry into the hotels business was rooted in the concept of creating value for the nation. ITC chose the hotels business for its potential to earn high levels of foreign exchange, create tourism infrastructure and generate large scale direct and indirect employment. Since then ITC's Hotels business has grown to occupy a position of leadership, with over 65 owned and managed properties spread across India. In 1979, ITC entered the Paperboards business by promoting ITC Bhadrachalam Paperboards Limited, which today has become the market leader in India. Bhadrachalam Paperboards amalgamated with the Company effective March 13, 2002 and became a Division of the Company, Bhadrachalam Paperboards Division. In November 2002, this division merged with the Company's Tribeni Tissues Division to form the Paperboards & Specialty Papers Division. ITC's paperboards' technology, productivity, quality and manufacturing processes are comparable to the best in the world. It has also made an immense contribution to the development of Sarapaka, an economically backward area in the state of Andhra Pradesh. It is directly involved in education, environmental protection and community development. In 2004, ITC acquired the paperboard manufacturing facility of BILT Industrial Packaging Co. Ltd (BIPCO), near Coimbatore, Tamil Nadu.

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The Kovai Unit allows ITC to improve customer service with reduced lead time and a wider product range. In 1985, ITC set up Surya Tobacco Co. in Nepal as an Indo-Nepal and British joint venture. Since inception, its shares have been held by ITC, British American Tobacco and various independent shareholders in Nepal. In August 2002, Surya Tobacco became a subsidiary of ITC Limited and its name was changed to Surya Nepal Private Limited (Surya Nepal). In 1990, ITC acquired Tribeni Tissues Limited, a Specialty paper manufacturing company and a major supplier of tissue paper to the cigarette industry. The merged entity was named the Tribeni Tissues Division (TTD). To harness strategic and operational synergies, TTD was merged with the Bhadrachalam Paperboards Division to form the Paperboards & Specialty Papers Division in November 2002. Also in 1990, leveraging its agri-sourcing competency, ITC set up the International Business Division (IBD) for export of agri-commodities. The Division is today one of India's largest exporters. ITC's unique and now widely acknowledged e-Choupal initiative began in 2000 with soya farmers in Madhya Pradesh. Now it extends to 7 states covering over 3.5 million farmers. ITC's first rural mall, christened 'Choupal Saagar' was inaugurated in August 2004 at Sehore. The year 2006 witnessed the ramping up of the Company's rural retailing network with 10 'Choupal Saagars' being operational in three states of Madhya Pradesh, Maharashtra and Uttar Pradesh. Nine more 'Choupal Saagars' are in an advanced stage of construction and will be launched shortly. In 2000, ITC's Packaging & Printing business launched a line of high quality greeting cards under the brand name 'Expressions'. In 2002, the product range was enlarged with the introduction of Gift wrappers, Autograph books and Slam books. In the same year, ITC also launched 'Expressions Matrubhasha', a vernacular range of greeting cards in eight languages and 'Expressions Paperkraft', a range of premium stationery products. In 2003, the company rolled out 'Classmate', a range of notebooks in the school stationery segment. 34

ITC also entered the Lifestyle Retailing business with the Wills Sport range of international quality relaxed wear for men and women in 2000. The Wills Lifestyle chain of exclusive stores later expanded its range to include Wills Classic formal wear (2002) and Wills Clublife evening wear (2003). ITC also initiated a foray into the popular segment with its men's wear brand, John Players, in 2002. In December 2005, ITC introduced Essenza Di Wills, an exclusive line of prestige fragrance products, to select 'Wills Lifestyle' stores. In 2006, Wills Lifestyle became title partner of the country's most premier fashion event - Wills Lifestyle India Fashion Week - that has gained recognition from buyers and retailers as the single largest B-2-B platform for the Fashion Design industry. To mark the occasion, ITC launched a special 'Celebration Series', taking the event forward to consumers. In 2000, ITC spun off its information technology business into a wholly owned subsidiary, ITC Infotech India Limited, to more aggressively pursue emerging opportunities in this area. In a short span of 5 years, ITC Infotech has already crossed over US$ 60 million in revenues. It also has a joint venture with ClientLogic, a top five global Business Process Outsourcing (BPO) provider. ITC's foray into the Foods business is an outstanding example of successfully blending multiple internal competencies to create a new driver of business growth. It began in August 2001 with the introduction of 'Kitchens of India' ready-to-eat Indian gourmet dishes. In June 2002 ITC entered the confectionery, staples and snack foods segments. In just five years, the Foods business has grown to a significant size with 100 differentiated products, five distinctive brands, an enviable distribution reach, a rapidly growing market share and a solid market standing. In 2002, ITC's philosophy of contributing to enhancing the competitiveness of the entire value chain found yet another expression in the Safety Matches initiative. ITC now markets popular safety matches brands like iKno, Mangaldeep, VaxLit, Delite and Aim. ITC's foray into the marketing of Agarbattis (incense sticks) in 2003 marked the manifestation of its partnership with the cottage sector. ITC's popular agarbattis brands 35

include Spriha and Mangaldeep across a range of fragrances like Rose, Jasmine, Bouquet, Sandalwood, Madhur, Sambrani and Nagchampa.

COMPANY PROFILE
ITC is one of India's foremost private sector companies with a market capitalization of over US $ 13 billion and a turnover of US $ 3.5 billion. Rated among the World's Best Big Companies by Forbes magazine and among India's Most Respected Companies by Business World, ITC ranks third in pre-tax profit among India's private sector corporations. ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business, Packaged Foods & Confectionery, Information Technology, Branded Apparel, Greeting Cards, Safety Matches and other FMCG products. While ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel and Greeting Cards. As one of India's most valuable and respected corporations, ITC is widely perceived to be dedicatedly nation-oriented. Chairman Y C Deveshwar calls this source of inspiration "a commitment beyond the market". In his own words: "ITC believes that its aspiration to create enduring value for the nation provides the motive force to sustain growing shareholder value. ITC practises this philosophy by not only driving each of its businesses towards international competitiveness but by also consciously contributing to enhancing the competitiveness of the larger value chain of which it is a part." ITC's diversified status originates from its corporate strategy aimed at creating multiple drivers of growth anchored on its time-tested core competencies: unmatched distribution reach, superior brand-building capabilities, effective supply chain management and acknowledged service skills in hoteliering. Over time, the strategic forays into new

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businesses are expected to garner a significant share of these emerging high-growth markets in India. ITC's Agri-Business is one of India's largest exporters of agricultural products. ITC is one of the country's biggest foreign exchange earners (US $ 2.4 billion in the last decade). The Company's 'e-Choupal' initiative is enabling Indian agriculture significantly enhance its competitiveness by empowering Indian farmers through the power of the Internet. This transformational strategy, which has already become the subject matter of a case study at Harvard Business School, is expected to progressively create for ITC a huge rural distribution infrastructure, significantly enhancing the Company's marketing reach. ITC's wholly owned Information Technology subsidiary, ITC Infotech India Limited, is aggressively pursuing emerging opportunities in providing end-to-end IT solutions, including e-enabled services and business process outsourcing. ITC's production facilities and hotels have won numerous national and international awards for quality, productivity, safety and environment management systems. ITC was the first company in India to be rated for Corporate Governance by ICRA, an associate of Moody's Investors Service, which accorded it the second highest rating, signifying "a high level of assurance on the quality of corporate governance." ITC employs over 20,000 people at more than 60 locations across India. Ranked among India's most valuable companies by the 'Business Today' magazine, ITC continuously endeavors to enhance its wealth generating capabilities in a globalising environment to consistently reward more than 4,60,000 shareholders, fulfill the aspirations of its expressively captured in its corporate positioning statement: "Enduring Value. For the nation. For the Shareholder."

THE ITC VISION

Sustain ITCs position as one of Indias most valuable corporations through world class performance, creating growing value for the Indian economy and companys stakeholders. 37

THE ITC MISION

To enhance the wealth generating capability of the enterprise in a globalizing environment, delivering superior and sustainable stakeholder value. THE ITC CORE VALUES ITC's Core Values are aimed at developing a customer-focused, high-performance organisation which creates value for all its stakeholders:

TRUSTEESHIP :As professional managers, we are conscious that ITC has been
given to us in "trust" by all our stakeholders. We will actualise stakeholder value and interest on a long term sustainable basis.

CUSTOMER FOCUS
We are always customer focused and will deliver what the customer needs in terms of value, quality and satisfaction.

RESPECT FOR PEOPLE

We are result oriented, setting high performance standards for ourselves as individuals and teams. We will simultaneously respect and value people and uphold humanness and human dignity. We acknowledge that every individual brings different perspectives and capabilities to the team and that a strong team is founded on a variety of perspectives. We want individuals to dream, value differences, create and experiment in pursuit of opportunities and achieve leadership through teamwork.

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EXCELLENCE
We do what is right, do it well and win. We will strive for excellence in whatever we do.

INNOVATION
We will constantly pursue newer and better processes, products, services and management practices.

NATION ORIENTATION
We are aware of our responsibility to generate economic value for the Nation. In pursuit of our goals, we will make no compromise in complying with applicable laws and regulations at all levels.

PREAMBLE :Over the years, ITC has evolved from a single product company to a multi-business corporation. Its businesses are spread over a wide spectrum, ranging from cigarettes and tobacco to hotels, packaging, paper and paperboards and international commodities trading. Each of these businesses is vastly different from the others in its type, the state of its evolution and the basic nature of its activity, all of which influence the choice of the form of governance. The challenge of governance for ITC therefore lies in fashioning a model that addresses the uniqueness of each of its businesses and yet strengthens the unity of purpose of the Company as a whole. Since the commencement of the liberalisation process, India's economic scenario has begun to alter radically. Globalisation will not only significantly heighten business risks, but will also compel Indian companies to adopt international norms of transparency and good governance. Equally, in the resultant competitive context, freedom of executive management and its ability to respond to the dynamics of a fast changing business environment will be the new success factors.

POLICY OF HUMAN RIGHTS

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ITC believes that all its employees must live with social and economic dignity and freedom, regardless of nationality, gender, race, economic status or religion. In the management of its businesses and operations therefore, ITC ensures that it upholds the spirit of human rights as enshrined in existing international standards such as the Universal Declaration and the Fundamental Human Rights Conventions of the ILO.

Policy
ITC upholds international human rights standards, does not condone human rights abuses, and creates and nurtures a working environment where human rights are respected without prejudice.

Implementation
The Corporate Human Resources function of ITC is responsible for the Human Rights Policy design, implementation and updation. The policy is implemented at all locations of ITC through a set of separate policies and procedures covering each of the main constituents of human rights applicable at the workplaces.

Monitoring & Audit

The assessment procedures for different constituents of this policy are defined against each specific policy.

ITC-FMCG Cigarettes
ITC is the market leader in cigarettes in India. Its highly popular portfolio of brands includes Insignia, India Kings, Classic, Gold Flake, Silk Cut, Navy Cut, Scissors, Capstan, Berkeley, Bristol and Flake.

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ITC's cigarettes are produced in its state-of-the-art factories at Bangalore, Munger, Saharanpur and Kolkata. These factories are known for their high levels of quality, contemporary technology and work environment. ITC's has presence in overseas markets as well. In the extremely competitive US market, ITC offers high-quality, value-priced cigarettes and Roll-your-own solutions. In West Asia, ITC has become a key player in the GCC markets through growing volumes of its brands.

Foods
ITC made its entry into the branded & packaged Foods business in August 2001 with the launch of the Kitchens of India brand. A more broad-based entry has been made since June 2002 with brand launches in the Confectionery, Staples and Snack Foods segments. The Foods business strives to deliver quality food products to the consumer. All products of ITC's Foods business available in the market today have been crafted based on consumer insights developed through extensive market research. ITC's state-of-the-art Product Development facility is located at Bangalore.

The Foods business is represented in 4 categories in the market. These are:

Ready To Eat Foods Staples Confectionery Snack Foods

ITCs six brand of food include:

Kitchens of India Aashirvaad

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Sun feast mint-o Candyman

Bingo!

Lifestyle retailing
ITCs ventured into Lifestyle Retailing Business Division through its Wills Lifestyle chain of exclusive specialty stores. Wills Lifestyle, the fashion destination, offers a tempting choice of Wills Classic work wear, Wills Sport relaxed wear, Wills Club life evening wear, fashion accessories and Essenza Di Wills an exclusive range of fine fragrances and bath & body care products and Fiama Di Wills - a range of premium shampoos and shower gels. Wills Lifestyle has also introduced Wills Signature designer wear, designed by the leading designers of the country. With a distinctive presence across segments at the premium end, ITC has also established John Players as a brand that offers a complete fashion wardrobe to the male youth of today.

Education & Stationary

ITC made its entry into the stationery business in the year 2002 with its premium range of notebooks. ITC's Education and Stationery Products are marketed under the brands "Classmate" and "Paperkraft". The Classmate range of products is targeted at satisfying education & stationery needs of students & young adults. The product range includes Notebooks, Math Instruments, Scholastic Products as well as Writing Instruments.

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The Paperkraft range of products aims at satisfying the stationery needs & office consumables need of office executives & working professional. The continuously expanding product range under Paperkraft includes Premium Business Paper, Paper Stationery, Markers & Highlighters.

Safety Matches
ITCs range of Safety matches include popular brands like i Kno, Mangaldeep, Aim, Aim Mega and Aim Metro. With differentiated product features and innovative value additions, these brands effectively address the needs of different consumer segments. The Aim brand is the largest selling brand of Safety Matches in India. ITC also exports regular and premium safety matches brands to markets such as Middle East, Africa and the USA. ITC aims to enhance the competitiveness of the small and medium scale sectors through its complementary R&D based product development and marketing strengths, especially the breadth and depth of the Company's trade marketing and distribution.

Aggarbattis
ITC commenced marketing Agarbattis (Incense Sticks) sourced from small-scale and cottage units in 2003. Mangaldeep Agarbattis are available in a wide range of fragrances like Rose, Jasmine, Bouquet, Sandalwood, Madhur, Durbar, Tarangini, Anushri, Ananth and Mogra.Durbar Gold is a new offering from Mangaldeep launched in Andhra Pradesh and has received wide consumer acceptance. The premium range from ITC, Mangaldeep Spriha has two offerings, Pratiti and Sarvatra and is specially hand rolled by Cottage Industries, Sri Aurobindo Ashram, Pondicherry.

Personal care
ITC forayed into the Personal Care business in July 2005. In the short period since its entry, ITC has already launched an array of brands, each of which offers a unique and superior value proposition to discerning consumers. Anchored on extensive consumer

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research and product development, ITC's personal care portfolio brings world-class products with clearly differentiated benefits to quality-seeking consumers. ITC's Personal Care portfolio under the 'Essenza Di Wills', 'Fiama Di Wills', 'Vivel Di Wills' 'Vivel UltraPro', 'Vivel' and 'Superia' brands has received encouraging consumer response and is being progressively extended nationally. ITC's state-of-the-art manufacturing facility meets stringent requirements of hygiene and benchmarked manufacturing practices. Contemporary technology and the latest manufacturing processes have combined to produce distinctly superior products which rank high on quality and consumer appeal. Bingo! :: Snack foods

Bingo! was launched in March 2007 with a wide range of exciting packaged salted snacks. The range includes multiple flavor variants of Potato Chips & Finger Snacks. The brand is associated with youth, fun and excitement. It fulfills the consumers need for variety and novelty in snacks. At present Bingo! has 3 sub-brands in its portfolio, each of which have unique values based on product differentiators. Bingo! Potato Chips the crunchiest potato chips:

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Source: India today Magzine Bingo! Potato Chips are all about irresistible combinations. They are a combination of crunchy potato chips along with yummy flavors. These flavors range from traditional favorites like Salted to innovative ones such as Red Chilli & Lime Pickle

Whats new? Bingo! Pickle Tickle: Some lemons remain lemons, the tastier ones become lime
pickle. But the naughty pickled lemons escape the jar, mix with crunchy potato chips to tickle your taste buds! A bite of the mouth watering Bingo! Pickle Tickle Potato Chips with just the right spicy and sour flavor of pickled lime in crunchy potato chips. It will surely make the taste buds crave for more! Pickle Tickle is currently being launched in the Southern parts of India.

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Source: India today Magzine

Bingo! Mad Angles "har angles se Mmmm"

One of the biggest successes from the Bingo! portfolio, Bingo! Mad Angles has carved a niche for itself in the consumers mind and is synonymous with the perfect triangular snack.

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A combination of innovative flavours on a traditional khakra base, Mad Angles is a snack that is true to taste and perfect flavour delivery as well as shape, making it a snack thats truly "har angles se Mmmm"

What's new?
Bingo! brings you the chaat flavour that you can savour without having to stop by the "gali ka chaatwala". Let your fingers dive in to the perfect combination of the taste of fresh pudina, tangy tamarind, creamy yogurt and of course, the crunchiness of khakra triangles. Available in packs of Rs.5, Rs. 10 and Rs. 20, the new Bingo! Mad Angles Masti Chaat now adds to the excitement of Mad Angles range from Bingo!

Source: India today Magzine

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Bingo! Tedhe Medhe A twist in every stick

Bingo! Tedhe Medhe is the popular spindle shaped format from Bingo! that is a delicious blend of handpicked spices with an aroma that makes one crave for more. The taste of fiery sparks which masalas leave on ones tongue is an experience with savouring! Just like no two things in life are the same, Bingo! Tedhe Medhe provides a unique experience to the consumer each time he consumes it from the pack, making him go beyond stereotypes and celebrating the eccentricities in life!

Bingo! ITC turns around foods business

ITC, the paper to hotels conglomerate, which saw its non-FMCG cigarette business revenues rise by 24 per cent in the quarter ended December 2010, has managed to turn around its foods business.Chitranjan Dar, divisional chief executive, ITC said the division was now profit-making and he expected it to remain profitable despite a steep rise in input as well as transport costs. ITC, whose pre-tax profits for the quarter ending December 2010 grew 19.4 per cent to cross the Rs 2,000-crore mark has been investing in a raft of businesses from hotels, paper board to FMCGs. It aims to utilise revenues from its tobacco business to build up a profitable franchise in other areas. The Bingo! range of potato chips saw sales growing by 48 per cent during the December 2010 quarter. In the biscuits category, sales of Sunfeast grew by 28 per cent during the quarter driven by product mix improvement led by significant growth in the sales of value-added variants of cookies and creams. Snacks and biscuits are the major driver of the foods business growth, said Dar. 48

While sales are rising at a rapid clip so are costs such as those of packaging that have gone up between a fifth to a quarter. The foods business has been using levers such as product mix enrichment, higher net realisation, smart commodity sourcing and active cost management across the supply chain to get into the black. Ultimately, increasing our share in a growing market will help ameliorate some of the costs pressures. We are therefore focussed on internal efficiencies so that we only have to pass on between half to 60 per cent of the cost price increases to our end customers, said Dar. ITCs Foods Division said Dar is now big enough to invest in new categories every year without relying on the parent for funds. This kind of a calibrated approach will allow us to remain profitable, he said. In September 2010 the company had launched Sunfeast Yippee! Noodles,while selling Aashirvaad atta and branded spices.ITC claims that post the launch of some combo offers on noodles and pasta, sales in both these categories are doing well. Our distribution today is almost 70 per cent of HULs food business and we are constantly working to grow that, said Dar.

SWOT ANALYSIS OF ITC

Strengths
ITC leveraged it traditional businesses to develop new brands for new segments. ITC is a diversified company trading in a number of business sectors including cigarettes, hotels, paper, agriculture, packaged foods and confectionary, branded apparel, personal care, greetings cards, Information Technology, safety matches, incense sticks and stationery. Weaknesses To fund its cash guzzling FMCG start-up, the company is still dependant upon its tobacco revenues. Cigarettes account for 47 per cent of the company's turnover, and that in itself is responsible for 80% of its profits. So there is an argument that ITC's move into FMCG (Fast Moving Consumer Goods) is being subsidised by its tobacco operations. Its Gold Flake tobacco brand is the largest FMCG brand in India - and this single brand alone 49

holds 70% of the tobacco market. Unrelated diversification is also a major weakness of ITC.

Opportunities
Core brands such as Aashirwad, Mint-o, Bingo! And Sun Feast (and others) can be developed using strategies of market development, product development and marketing penetration.ITC is moving into new and emerging sectors including Information Technology, supporting business solutions. e-Choupal is a well thought of initiative that could be used in other sectors in many other parts of the world. It is also an ambitious project that has a goal of reaching 10 million farmers in 100,000 villages Per capita consumption of personal care products in India is the lowest in the world offering an opportunity for ITC's soaps, shampoos and fragrances under their Wills brand.

Threats
The obvious threat is from competition, both domestic and international. ITC's opportunities are likely to be opportunities for other companies as well. Therefore the dynamic of competition will alter in the medium-term. Then ITC will need to decide whether being a diversified conglomerate is the most competitive strategic formation for a secure future.

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OBJECTIVES OF STUDY

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OBJECTIVE OF THE STUDY

To study the Rural marketing , its opportunities and challenges. To know the Important factors that influence rural consumer buying behaviour of ITC products. To know the visibility and availability of ITC brand in rural areas.

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LITERATURE REVIEW

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LITERATURE REVIEW
Sarangapani & Mamtha, (2008) With the increase in purchasing power and demand for a wide variety of products by the rural consumers, the rural markets offer new and greater opportunities to manufacturers of several FMCG products in India. To tap the vast and expanding market, companies are developing effective marketing and strategies based on their study and understanding of rural consumer behaviour. There are certainly significant differences in the buying behaviour of the rural consumers from the stand point of product development, pricing policies, distribution and after sales services, which create differences in requirements for marketing strategies in rural India. Mathursuch,( 2008) The concept Rural and Marketing, though used very frequently in various forums, have eluded any precise and non- controversial definitions. When we join them, the resulting concept Rural Marketing means different things to different persons. This confusion leads to distorted understanding of the problems of rural marketing poor diagnosis and, more often than not, poor prescriptions. The Indian rural market with its vast size and demand base offers great opportunities to marketers. Two thirds of countries consumers live in rural areas and almost half of the national income is generated here. It is only natural that rural markets form an important part of the total market of India. Our nation is classified in around 450 districts, and approximately 630000 villages, which can be sorted in different parameters such as literacy levels, accessibility, income levels, penetration, distances from nearest towns, etc. Mckinsey, (2008), rural India with a population of 630 million (approximately) would become bigger than total consumer market in countries such as South Korea or Canada in another 20 years and it will grow at least four times from its existing size. 70% of Indias population lives in 627000 villages in rural areas. As per the National Council for Applied Economic Research (NCAER) study, there area as many middle 54

income and above households in the rural areas as there are in the urban areas. At the highest income level there are 2.3 million urban households as against 1.6 million households in rural areas. According to NCAER projections, the number of middle & high income households in rural India is expected to grow 80 million to 111 million by 2007.However, myths abound. Indias rural markets are often misunderstood. A clear distinction needs to be made with regard to the reality versus the image of rural India. If such a distinction is not made, we will be unable to distinguish between the serpent and the rope. Arjiea,(2009) : 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. Pravin Tripathi,(2009) Nirma was the first FMCG Company which initiated and produced goods according to the rural consumers in 1970. Nirmas entry changed the whole Indian FMCG scene. It became a great success story and laid the road map for others to follow. Luv2maan,(2009) The rural market has changed drastically in the past one decade. A decade ago, the rural market was more unstructured and was not a prioritised target location for corporates. Very few companies, mainly the agro-based ones, were concentrating in these markets. Their were no innovative strategies and promotional campaigns. A distribution system did exist, but was feeble. Illiteracy and lack of technology were the other factors leading to the poor reach of products and lower level of awareness amongst villagers. Gradually, corporates realised that there was saturation, stiff competition and clutter in the urban market, and a demand was building up in rural areas. Seeing the vast potential 55

of 75 per cent Indians living in rural areas, they started focusing on these unexplored, high-potential areas. Shuchitiwari, (2010) The rural market is not homogeneous. The individual sections of this market are not too big, although the overall size is large. There are Geographical, demographical, statistical and logistical differences. Positioning and realities regarding the potential of each of these market segments differ and lie at the very core of forming the strategy for the rural markets. Gone are the days when rural consumer went to nearby city to buy branded products & services.

Serene,(2010) Rural marketing is the much talked subject for the business
establishment. A decade ago rural market was seem to be unstructured and this was not found to be a target location of the corporate. This is due to the hurdles such as illiteracy, lack of technology and other factors leading to the poor reach of products. But now Go Rural is the slogan of marketing gurus after analyzing the socio economic changes in villages. With the changing marketing scenario, the corporate marketing strategies need to be reshaped in order to have an increased awareness among consumers and the overall development in the rural sector. The 4 Ps of rural marketing which is a hit in the cities might not work in the rural areas. To promote brands in rural markets require special dealings. Consumers have graduated to branded products with increased affordability as a result of increasing rural income. Rural market is one of the best opportunity for sector in India.. In this study the focusing is on the strategic issues of FMCG companies in rural marketing. Abhirami, (2011) 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 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. The rural markets are growing at above two times 56

faster pace than urban markets; not surprisingly, rural India accounts for 60% of the total national demand. Today, rural market occupies a larger part of our economy and it is expected to grow at least four times the existing size. Another contributing factor for rural push was growing saturation in urban markets.

Madhulikagupta, (2012) The rural markets are estimated to be growing fastly compared to the urban markets. In recent years, rural markets have acquired significance in countries like China and India, as the overall growth of the economy has resulted into substantial increase in the purchasing power of the rural communities. Rural India with its traditional perception has grown over the years, not only in terms of income, but also in terms of thinking. The rural markets are growing at above two times faster pace than urban markets; not surprisingly, rural India accounts for 60% of the total national demand. 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. The paper discusses the challenges, limitations, and opportunities that are necessary to understand the rural markets and develop strategies to supply and satisfy the rural customer.

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RESEARCH METHODOLOGY

58

RESEARCH METHODOLOGY
MEANING Research in common parlance refers to a search for knowledge. One can also define research as a scientific and systematic search for pertinent information in a specific topic. The advanced learners dictionary of current English lays down the meaning of research as a careful investigation or inquiry specially through search for new facts in any branch of knowledge. Redman and Mory defines research as a Systematized effort to gain new knowledge. Research is an academic activity and as such the term should be used in a technical sense. According to Clifford woody research comprises defining and redefining problems, formulating hypothesis or suggested solutions; and collecting, organizing and evaluating data; making deductions and reacting conclusions; and at last carefully testing the conclusions to determine whether they fit the formulating hypothesis. Research is thus, an original contribution to existing stock of knowledge making for its advancement. It is pursuit of truth with the help of study, observation, comparison and experiment.

TYPES OF RESEARCH

Research Design:A research is the arrangement of the conditions for the collections and analysis of the data in a manner that aims to combine relevance to the research purpose with economy in relationship procedure. In fact, the research is design is the conceptual structure within which research is conducted; it constitutes the blue print of the collection, measurement and analysis of the data. As search the design includes an outline of what the researcher will does relationship office relationship manager writing the hypothesis and its operational implication to the final analysis of data?

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Exploratory Research Design: This research design is preferred when researcher has a vague idea about the problem the researcher has to explore the subject. Descriptive Research Design It seeks to determine the answers to who, what, where, when and how questions. It is based on some previous understanding of the matter.

Descriptive Vs. Analytical: Descriptive Research includes survey and fact finding Enquiries of different kinds. The major purpose of descriptive research is decryption of the state of affairs as it exists at present. In social science and business research we quit open use the term as fast facto research for descriptive research studies. Applied Vs. Fundamental: Research can either be applied research or fundamental research. Applied Research aims at finally a solution for an immediate problem facing a society or an industrial/business organization. Whereas fundamental research is mainly concerned with generalization and with the formulation of a theory. Quantitative Vs Qualitative: Quantitative research is based on the measurement of quantity of amount. It on the other and is concerned with qualitative Phenomena. Conceptual Vs. Empirical: Conceptual research is that related to some abstract ideas or theory. It is generally used by Philosopher and thinkers to develop new concepts or to reinterpret existing ones. On the other hand empirical research realize on experience or observation alone , often without due regards for system and theory . is applicable to phenomena that can be expressed in terms of quantity. Qualitative research

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TYPES OF RESEARCH USED IN STUDY In this study descriptive research design has been used. The major purpose of descriptive research is description of the state of affairs. As it exist at present. In this study the information collected about the product from rural consumers by using interviews and questionnaires. Design regarding what where when how much by what means concerning an enquiry for research study constitutes research design. A Research design is the arrangement of conditions for collection and analysis of data is a manner that aims to combine relevance to the research purpose with economy in procedure. Questionnaire and interview method was designed and administered to the respondents for the objective of the study. SAMPLING DESIGN: Sample random probability sampling is used and sample is selected on the basis of the draw of lots. I have also mention likert type scale in questionnaire for rating. Sample Size : 100 Respondents of rural areas of Yamuna Nagar.

DATA COLLECTION In dealing with any real life problem is often found that data at hand are in adequate and hence it becomes necessary to collect data that are appropriate. There are several ways of collecting the appropriate data which differ considerable in context of money cost time and other resources at the disposable of Researcher. The data sources used in this project report is secondary as well as primary: Primary Data:

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Primary Data can be collected either through experiments or through surveys it. If the researcher conducts and experiments, he observes some Quantitative experiments, or the data with the help of which he examines the truth contained in his hypothesis. But in the case a survey data can be collected by anyone or more of the followings way. By observation: The method implies the collection of Information by way of investigators own observation. Without interviewing the respondents the information obtained relates to that is currently happening and is not complicated by either the past behavior or future intentions or attitudes of Respondents. Through personal interview: The investigator follows a rigid procedure and seeks answers to a set off preconceived Questionnaire through personal interviews. Through Telephone Interviews: This method of collecting information includes contacting the respondents on telephone itself. This is not a very widely used method but it place an important role in industrial survey. In developed reasons particularly, when the survey has to be accomplished in a very limited time. Through Scheduled: Under this method the enumerators are appointed given training. They are provided with schedules containing relevant questions. These enumerators go to respondents with the schedules. Data are collected by filling up the schedule by enumerators on the bases of replies given by Respondents. Secondary Data: The Secondary Data on the other hand are those which have already been collected someone else and which have already been passed through the statically process. When the researcher utilized secondary data then he has to look into various sources from he 62

can obtained them. For e.g.: Books, Magazines, Newspapers, Internet, Publications and Reports. AREA OF STUDY In primary source the data consist of original information gatherered for the specific purpose. The group sampling technique is decided to collect the data from customer in rural area of Yamuna Nagar.

SCOPE OF THE STUDY The scope of this study is very wide because in present era rural market is big tool to boost the sale volume. Every company wants to increase its sale volume. In this study I surveyed rural marketing, opportunities and its challenges.

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DATA ANALYSIS AND INTERPRETATIONS

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DATA ANALYSIS AND INTERPRATAION

Table No.1:

Are You Satisfied With The Food Products of ITC?

SATISFACTION LEVEL Satisfied Highly satisfied Neutral Chart:1

% OF RESPONDENTS 75 % 5 % 20%

Source: Primary data INTERPRETATION : Most of the rural Respondents i.e 75% said that they are satisfied with the ITC Food Products, 20% are neutral and rest of 5% are highly satisfied with ITC food Products. 65

Table No.2:

Which Category of Products is more Demanded?

CATEGORY VIVEL SUPERIA FIAMA D IWILLS SANTOOR Chart No. 2

% OF RESPONDENTS 30 % 25 % 5% 40%

Source: Primary data INTERPRETATION : Out of 100 Respondents 30 % said that Vivel is more demanded other than 25 % said Superia is more demanded and then 25 % said that Santoor is more demanded and 5% in favour of Fiama Di Wills is more demanded . So concluded Santoor,Superia and vivel is main product in soap of ITC which are demanded by the rural market .

Table No. 3:

Which Factor Is More Important For The Rural Customer Focus

To Increase The Sale Of ITC Products?

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FACTOR FOR THE CUSTOMER FOCUS Price Quality Packaging Branding Easily available 30 % 20 % 30 % 10% 10%

% OF RESPONDENTS

Chart No. 3

Source : Primary data

INTERPRETATION : As the above Table shows that every factor is necessary either it is rural customer needs , Quality or satisfaction but today is competitive rural market so Satisfaction is more important term which is conducted by the ITC at different levels . According to Respondents in favor of Satisfaction factor .

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Table No. 4: Factor Work In The Competitive Market For The Rural Customer
Satisfaction

FACTOR FOR RURAL CUSTOMER SATISFACTION Emotional factor Price Service Quality Product Quality Access to product & Service 2 % 10 % 25 % 55 % 8 %

% OF RESPONDENTS

Chart No. 4

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Suitable Factor which better works for the customer satisfaction Emotional factor 2% 8% 10% Price 25% 55% Service Quality Product Quality Access to product & Service
Source : Primary data INTERPRETATION : After survey it was found that Product Quality Factor is basically work but rather than other factor also work at different levels. But mainly most of Prefer Product Quality similarly Service Quality also .

Table No.5:

Do You Have Knowledge About ITC Products ?

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FACTOR YES NO Chart No. 5

RESPONDENTS 76% 24%

Source : Primary data

INTERPRETATION: As seen above in the graph approximately 76% of customer have knowledge of ITC Food Products . This indicates high level of awareness among customer regarding ITC Food Products .

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Table No.6:
FACTOR Yes No

Do You Think Aggressive Advertising Will Increase ITC Sales? RESPONDENTS 65% 35%

Chart No. 6

Source : Primary data INTERPRETATION As seen in the above graph approximately 65% of retailers feel that aggressive advertising will increase sale of ITC Food Products. This indicates high need of aggressive advertising for ITC Food Products.

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Table No. 7:

Celebrities Advertisement Effect Brand Choice

FACTOR Yes No Cant say

RESPONDENTS 80% 10% 10%

Chart No. 7

10% 10% Yes No Cant say 80%

Source : Primary data INTERPRETATION: From the above Table we can say Maximum part of the rural consumer decision affected by the different personalities i.e. 80% of the consumer is effected by brand choice, 10% are not effected by brand choice, rest of the 10% are those who cant say any proper answer.

Table No. 8:

Rural Customer Visit The Market 72

FACTOR ONCE IN A WEEK TWICE IN A WEEK FORTNIGHTLY ONCE IN A MONTH Chart No. 8

RESPONDENTS 40% 25% 20% 15%

Source : Primary data INTERPRETATION : According to survey maximum no. of rural customer i.e 40% of customer weekly purchase the product then 25% of customer purchase twice in a week then 20% of them buy fortnightly and rest of them i.e. 15% purchase once in a month.

Table No. 9: Rural Customer Willing To Purchase Any Product Which Is Recently Advertised? 73

FACTOR YES NO Chart No. 9

RESPONDENTS 38% 62%

Source : Primary data INTERPRATATION: According to above chart shows 62% respondents are not willing to purchase any recently advertised product. This clearly shows the trend of customer, as they are not willing to change the brand in hurry and solely on the basis of advertisement. And 38% Respondents dont want to purchase that product in hurry. Table No. 10: Source Make Them Aware Of The Products

FACTOR ADVERTISMENT FRIENDS SHOPKEEPAR WORD OF MOUTH

RESPONDENTS 42% 22% 16% 20%

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Chart No. 10

Source : Primary data INTERPRATATION: The above table reveals that 42% respondent rely on the advertisement 22% rely on friends and 16% rely on the shopkeepers advice for product awareness and rest of them i.e 20% rely on mouth to mouth awareness of the product.

Table No. 11:

Why The Tapping Of Rural Customer Is Important? 45% 25% 30%

COMPANY GROWTH SATISFY THE CUSTOMER NEEDS OVERALL DEVELOPMENT Chart No. 11

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Source : Primary data INTERPRATATION: Above data shows that rural customer is tapped for the company growth i.e 45% ,some of the customer shows the company satisfied their needs i.e 25% and rest of them i.e 30% think they are done only for the overall development

FINDINGS

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FINDINGS
Most of the rural Respondents said that they are satisfied with the ITC Food Products. By the opinion of the respondents all the forms of measurement are important but mainly feedback form and CRM is more important which can easily measures rural customer satisfaction . Out of 100 Respondents 30% said that Vivel is more demanded other than 25 % said Superia is more demanded and then 25% said that Santoor is more 77

demanded and 5% in favour of Fiama Di Wills is more demanded . So concluded Santoor,Superia and vivel is main product in soap of ITC by which they are demanded by the rural market . Every factor is necessary either it is rural customer needs , Quality or satisfaction but today is competitive rural market so Satisfaction is more important term which is conducted by the ITC at different levels .

After survey I found Product Quality Factor is basically work but rather than other factor also work at different levels. But mainly most of the respondents Preferred Product Quality similarly Service Quality also.

75% of customers have knowledge of ITC Food Products . This indicates high level of awareness among customer regarding ITC Food Products . 65% of customers feel that aggressive advertising will increase sale of ITC Products. This indicates high need of aggressive advertising for ITC Products. Maximum part of the rural consumer decision affected by the different personalities i.e. celebrities. . As seen above in the graph approximately 76% of customer have knowledge of ITC Food Products . This indicates high level of awareness among customer regarding ITC Food Products. 42% respondent rely on the advertisement 22% rely on friends and 16% rely on the shopkeepers advice for product awareness and rest of them rely on mouth to mouth awareness of the product.

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 62% respondents are not willing to purchase any recently advertised product. This clearly shows the trend of customer, as they are not willing to change the brand in hurry and solely on the basis of advertisement. Rural customer is tapped for the company growth i.e 45% ,some of the customer shows the company satisfied their needs i.e 25% and rest of them are think they are done only for the overall development. Maximum no. of rural customer i.e 40% of customer weekly purchase the product then 25% of customer purchase twice in a week then some of them buy fortnightly and rest of them purchase once in a month.

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LIMITATIONS OF THE STUDY

LIMITATIONS OF THE STUDY

1. Sampling error may creep in i.e. sample selected may not be a true representative of the population. 2. There was no method to check if the respondents are providing the true and consistent information.

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3.

The ranking done by respondents may be affected by their perception & the other external facts like food brand etc. rather than their experience with the interior products.

4.

Although the identity of the analyzer was not to reverted for getting fair responses, but respondents may still request and not thus, provide the true responses.

5.

An element of personal bias of the dealer while recommending promoting and brand is always there due to many reasons, which cannot be quantified & measured.

6.

While conducting this study, unavoidable errors crept in such as nonresponse error & responsive style error.

7.

Since respondents have been interviewed on personal values & behaviors the responses may not have exactly same.

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SUGGESTIONS

SUGGESTIONS

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Source: India todayMagzine Bringing technology to Rural Market: The entire technology commercialization process, from idea to market. Today as technology drives innovation and companies seek more effective way to exploit the intellectual property they create. Technology is different from any other type of new product. For one thing, the market respond differently to technology; customer are slow to accept a new technology with which they are not familiar. New technologies are commercialized in a variety of ways, but the underlying commonalities is an entrepreneurial approach that seek to create new value.

SOME VALUABLE SUGGESTIONS 83

1. Low pricing 2. Less quantity packing 3. No brands 4. Educating rural people 5. Understanding their needs & requirements 6. Easy accessibility 7. Identify the need 8. Study and analyze demographics to arrive at the best possible selling price 9. Work backwards and develop a scalable prototype to fit the above 2 10. Rope in opinion leaders for introducing the product among the target segment 11. Ensure proper feedback to make changes, if any 12. Replicate and distribute 13. Ensure a strong servicing and replenishment mechanism

84

CONCLUSION

CONCLUSION 85

Thus, looking at the challenges and the opportunities, which rural markets offer to the marketers, it can be said that the future is very promising for those who can understand the dynamics of rural markets and exploit them to their best advantage. A radical change in attitudes of marketers towards the vibrant and burgeoning rural markets is called for, so they can successfully impress on the 230 million rural consumers spread over approximately six hundred thousand villages in rural India. Now we can say that most of the people of the rural area they are aware regarding the ITC Products and they are continuously using the ITC Product. Now the scenario of the rural area changed due to increase of literacy level and their curiosity regarding the product. Rural area People are more conscious about the quality, quantity, price, packaging, colors etc. of the product. Our 70% population is living in the rural area and 30% population living in the urban area and by tapping urban area we are generating good amount of money. So future is prospective if we tape rural area. Most of the companies are trying to focus on the rural area like HUL, P&G, Parle, Dalda, Cargill, Perfiti, PepsiCo etc.

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BIBLIOGRAPHY

BIBILOGRAPHY

87

1. Ramanand,V.S., Mass communication for Rural Marketing, Indian Journal of Marketing, Vol.2, No.5, Jan. 2000, pp.22-25 2. Praveen Tripathi., Rural Marketing of Consumer Products, Economic and political weekly, 1973, 7(34), pp. Feb. 2009 3. Jha, M., Rural Marketing:Some Conceptual Issue ,Economic and Political weekly, February 27, 2008. 4. Balaratnam, N.K.,Rural Marketing: A Growing Challenge, Yojana, 2005, pp. 701-704 5. Gupta, V.K., An Approach to rural Marketing, India Today Magazine, Vol. 2, No. 5 Jan. 2003, pp.12-20. 6. Kumar, P., Marketing Strategy for Rural India. Indian Journal of Agriculture Economics, 52(2067), 2000, pp.293-302. 7. Mckinsey, V.M, Some aspects of Rural Market in India, The economic Times, May 2008. 8. Sarangapani & Mamtha, Rural Market in India: A Weakness and a Challenge, Sep.2008. 9. Serene, Rural Marketing Strategy: Attempts to explore New Areas, Vol. 111, No. 2,June 2010 10. The Hindu - Business Line 11. www.indiantelevision.com 12. www.scribed.com

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89

ANNEXURE

ANNEXURE
QUESTIONNAIRE FOR THE RURAL CUSTOMER

NAME:. AGE:. SEX:. 90

AREA: OCCUPATION:

Q:1 ARE YOU SATISFY WITH THE FOOD PRODUCTS OF ITC ? 1. Satisfied 2. Highly Satisfied 3. Dissatisfied 4. Neutral

Q: 2

WHICH CATEGORY OF PRODUCTS IS MORE DEMANDED?

1. Vivel 2. Superia 3. Fiama Di Wills 4. Santoor

Q.3

WHICH

FACTOR

IS

MORE

IMPORTANT

FOR

THE

RURAL

CUSTOMER FOCUS TO INCREASE THE SALE OF ITC PRODUCTS? 1. Price 2. Quality

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3. Packaging 4. Branding 5. Easy available

Q: 4 WHICH FACTOR WORK IN THE COMPETITIVE MARKET FOR THE RURAL CUSTOMER SATISFACTION? 1. Emotional Factor

2. Price 3. Service quality 4. Product Quality 5. Access to Product &Service

Q.5 DO YOU HAVE KNOWLEDGE ABOUT ITC PRODUCTS? 1. Yes 2. No

Q.6

DO YOU THINK AGRESSIVE ADVERTISING WILL INCREASE ITC

SALES? 1. Yes 2. No 92

Q.7

DO CELEBRITIES ADVERTISMENT EFFECT YOUR BRAND CHOICE ?

1.

Yes

2. No 3. Cant say Q:8 WHEN THE RURAL CUSTOMER VISIT THE MARKET ? 1. Once in a week

2. Twice in a week 3. Fortnightly 4. Once in a month

Q:9

IS RURAL CUSTOMER WILLING TO PURCHASE ANY PRODUCT

WHICH IS RECENTLY ADVERTISED? 1. Yes 2. No

Q:10 WHICH SOURCE MAKE THEM AWARE OF THE PRODUCTS ? 1. Advertisement 93

2. Friends 3. Shopkeeper 4. Word of Mouth

Q:11 WHY THE TAPPING OF RURAL CUSTOMER IS IMPORTANT ? 1. Company Growth

2. Satisfy the Customer needs 3. Overall Development

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95