A Project REPORT ON Study on soaps buying behavior of rural consumers

PROJECT BY: AKHILESH KUMAR UNDER THE GUIDANCE OF PROF. G. M. JAYSHEELAN

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A Project REPORT ON

Study on soaps buying behavior of rural consumers

Project BY: AKHILESH KUMAR

UNDER THE GUIDANCE OF PROF. G. M. JAYSHEELAN

KOHINOOR BUSINESS SCHOOL CENTER FOR MANAGEMENT RESEARCH (KBSCMR) KHANDALA (MAHARASHTRA)

DECLERATION

The Live Rural Marketing Project is meant to bridge the gap between the real-life business and academic Knowledge. It is a simulation of the business environment and enables to experience the rigors of Rural Marketing Concept. It provides opportunities to apply the concepts learnt in the class-room to real-life situations. Being a Management Student, It is necessary to apply all concepts learnt in the classroom to Practical situations to analyze things in perfect manner. The Live Rural Marketing Project gave me opportunity to undergo on field practical training to know the awareness among the people for ITC LTD and other SOAPS BRANDS in KHANDKALEY(Pune) in depth. I completed this practical training at Kohinoor Business School Center for Management Research, Khandala.This project report of the work consists of the study of Rural Marketing and various aspects related to Rural Marketing. Full care has been taken to make this report error free yet the responses collected through respondent cannot be 100% error free and I hope I shall be excused for that. Last but not the least I hope this research work will prove to be of some help and it would applicable to ITC LTD. in formulating an effective and efficient marketing & financial strategy.

DATE: SIGNATURE

Abstract

The project study of soaps buying behavior of rural consumer is prepared under the guidelines of PROF. G M JAYSHEELAN (rural marketing faculty, KBS). This project report provides a bunch of knowledge about the demand of different soaps available in rural market as well as it also provides detail knowledge about consumer preference towards different soaps.

The report also provides details about the history of soaps and Shampoos sector in rural India. there is plenty of data analysis and conclusions are given in research paper. On the basis of feedback through questionnaire and observation method, I find out that rural consumer has changed their strategy towards the products and start to purchase them basis on their quality. As the result, there is close competition among the companies. As each of companies are increasing their products, qualities, looks and providing best services each days. Our analysis is based on sample results. It was challenging as well as learning experience to gather the information from respondents by meeting them personally in order to get questionnaire filled .there was a lot of time pressure and unwillingness of respondent to respond.

AKHILESH KUMAR

PROF. GM JAYSHEELAM (SUPERVISOR)

INDEX
S.n o 1 2 3 4 5 6 7 8 9 10 11 12 Topic INTRODUCTION SCOPE OF STUDY OBJECTIVE AND LIMITATION OF STUDY Page no. 7 8 12 13 14 15 15 16 27 28 28 30

LITERATURE REVIEW
SWOT ANALYSIS
RESEARCH METHODOLY

VILLAGE INFORMATION QUESTIONNAIRE DATA ANALYSIS CONCLUSION RECOMMENDATIONS ANNEXTURE

INTRODUCTION
There was time when FMCG companies ignored rural market, they took no interest to produce or sell products in rural market in India. It was initial stage of FMCG companies in India. As per the time had passed, the strategy and marketing style of FMCG companies had changed.

BACKGROUND OF STUDY:

In 1970, Nirma was the first FMCG company to initiate and produced goods according to the rural consumer. In early 1970s, when Nirma washing powder was introduced in low income market, HLL reacted in a way typical of many multinational companies . however, Nirmas entry changed all Indian FMCG as well as soap market scene . it became a great success story and laid the roadmap for others to follow. MNCs like HLL, which were sitting pretty till then, woke up to new market realities and noticed the latent rural potential of India. C.K. Rangnathan started selling shampoos in sachet in initial investment of Rs 15,000 and dare to take on multinationals, HLL and P&G, the unquestioned leader in segment. He targeted rural and small town consumers who used soap to wash their hairs. He introduced sachet at 90 paisa and then 50 paisa . and thats why multinationals sat and noticed him. Sales zoomed from 35,000 sachets to 12 lacks. Initially they took any sachet, but after 3 months they restricted to chik sachets.

Now a days, rural market is most lucrative , opportunistic and most focusing sector by major MNCs in India. Each and every company is set to invest huge capital to competes in rural market. According to the FICCI, the number of rural household using soaps products has grown from 136 million in 2004 to 143millon in 2007, it is clear indication that rural consumers have shifted from commodities to branded products . urban consumer, on other hand could go slow on FMCG expenses ,
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thanks for inflation spiral, rise in fuel cost and costlier credit. The evidence shows that first time rural market grow faster than urban market in key product category April- may 2008, the latest month for which information is available , according to the market research firm AC Nielsen.

NEED FOR STUDY

In those days, rural market is one of the best opportunities in FMCG sector in Indian market. It is wider and less competitive market for FMCG. As the income level of rural consumers increasing, the demand of FMCG products is increasing continuously. The various needs of study are follows:

To determine the rising demand of Soaps and Shampoos in rural India Know about the different choices of rural consumers Rural consumers usage habits are deferent to urban Rural consumers buying behavior

PROBLEM DEFINITION: The study of opportunity of Soaps and Shampoos in rural market is sum total of deferent analytical survey of different Soaps and Shampoos in rural market. In one sense, we can say that it is determination of how much market is captured by different Soap and Shampoo companies.

SCOPE OF STUDY:
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With the population of 1 bn people, India is a big market for FMCG companies. Around 70% of total household in India reside in rural area . total number of rural household is expected to rise from 135m in 2002 to 153m in 2010, which represents largest potential market in the world.

(Rural and Urban potential)

Urban Population 2001-02(m household) Population 2001-02(m household) % distribution (2001-02) Market (towns/villages) 53 69 28 3768

Rural 135 153 72 627000

Source: Statical outline of India (2001-02), NCAER

An average Indian spends 40% of his income on groceries and 8% on personal care products . a larger part of total spending pie along with large base(population) makes India largest FMCG market.

CHANGING LIFE STYLE: Rising per capita income, increase literacy and rapid urbanization has caused rapid growth and change in demand pattern. The rising aspiration levels, increase in spending power has led to change in consumption pattern. LOW PANETRATION AND LOW PER CAPITA CONSUMPTION: Due to large size of market, penetration in most product categories like jams, skin care, toothpaste , hair wash etc. in India is low. This is more visible when comparison is done between rural and urban India. The average consumption by rural household is much lower than their urban counterpart. Existence of unsaturated market provides excellent opportunity for industry players in form of vastly untapped as the income rises. PENETRATION (%) Category Deodorant Toothpaste All India 2.1 48.6 urban 5.5 74.9 rural 0.6 37.6
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Skin care Shampoo Utensil cleaner Instant coffee Washing powder Detergent war Toilet soap

22 38 28 6.6 86.1 88.6 91.5

31.5 52.1 9.9 15.5 90.7 91.4 97.4

17.8 31.7 14.6 2.8 84.1 87.4 88.9

Source: HLL investor meet 2006

OBJECTIVES: There are following objectives of the project:

To determine about the rural consumer preference towards soaps and shampoos To know about recent demand of different brands soaps and shampoos in rural India

HYPOTHESIS: I am also citizen of rural area. I used my experience and perceptions as hypothesis towards to make this project.

LIMITATIONS:
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While surveying I encounter with some problems like some people were not ready to respond and few of them who responded were in hurry hence the active participation was lacking. Due to which I faced difficulties in collecting information regarding our questionnaire. Another problem which I face was that people were hesitating to give information about their income. Except it, sample size that I have taken was small (50 respondents) and its difficult task to draw conclusion or reach to exact result on the basis of limited sample size. Time was very limited go into depth. Threats to me were that people were hesitant to give income related information so there is chance to error regarding income.

LITRATURE REVIEW: Rural market is one of the best opportunity in India for soaps and shampoo sector. In this sense, I can say that rural market is future of FMCG(soaps and shampoos). As the research of PURBA BASU (FACULTY OF ICFAI, B. SCHOOL), The lifestyle of rural consumers is changing. Rural market and marketing strategy have become latest marketing buzzword for most of FMCG majors. She added the strategies of different FMCG companies for capturing rural market like Titans sonata watches, coca colas 200ml bottles, different marketing strategies of HLL and Marico Ltd. She takes into consideration the study of national council for applied economic research (NCAER). According to the NCEAR projections, the number of middle and high income household In rural India. India is expecting to grow from 80 million to 111 million by 2007. In urban India same is expecting to grow from 46 million to 59million. Thus , absolute size of rural India is expecting to grow double that of urban. increasing demand. Factors like village psyche, strong distribution network, and market awareness.

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This implies that rural market has huge potential for marketer to meet up the are few prerequisites to make dent into rural markets. the model is of the stolid Dutch Anglo conglomerate UnileverGroup, which has enjoyed century long presence in India through its subsidiary Hindustan lever Ltd. It was Hindustan lever Ltd which several years ago popularized Idea of selling its products in tiny packages. Its sachets of detergent and shampoos are in great demand in rural Indian villages. Britannia with it low priced Tiger biscuits has become success story in rural market. The characteristics of rural market in terms of low and spared out population and limited purchasing power make it difficult market to capture. The bottom of pyramid marketing strategies and 4 Ps model of availabilities, affordability, acceptability and awareness provide us with a means of developing strategies to tackle marketing issues to marketing soaps and shampoos in rural India. some successful stories like Garmin phone in Bangladesh . As per concern of my research, it is detail study of soaps and shampoos used by rural consumers. It will provide the detail information about consumer preferences towards soaps and shampoos which is too unique and different from above researches.

SWOT ANALYSIS FOR ITC LTD.

Strength
Distribution leadership Very deep reach in rural market

Weakness
Late entrant in personal care segment

Trusted Brand
Extensive consumer research and

A very rich product pipeline for the existing category

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Opportunity

Threat

Various categories products and

High Competition from global

services for rural markets.

Agriculture business product for

brands like
HUL,P&G,DABUR ,CAIVIN CARE etc.

rural markets Large amount of Brand promotion Growth in disposable income

Hrithik Roshan to endorse the

shampoo
The total shampoo market is

around Rs2,200 crore

RESEARCH METHODOLY : Sample design : sample unit: working people, school students, unemployed and housewives i.e. males and females irrespective of their education level . Sample size: 50 Sample region: Khandkaley village Sampling procedure: Random Sampling (fill up the questionnaire)

DATA COLLECTION METHOD PRIMARY DATA: Primary data collected through self administrated questionnaire. The aim of this questionnaire to gather the information of various branded soaps and shampoos
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reach among the rural consumers and what are the benefits of products and accordingly the perceptions of consumers. SECONDRY DATA: Secondary data was collected through magazines, research papers and Internet.

QUESTINNAIRE DESIGN: As questionnaire is self administered one, the survey is kept simple and user friendly. Words used in questionnaire is easily understandable to all respondent and technical jargons avoided to make it most worthwhile without any confusion to respondents.

VILLAGE DETAIL

Village-at post-KHANDKALEY, District -Pune No. of householdsNo. of retail outlets/MandisNo. of schools/colleges Market day Village functions Sarpanch: - around 12000 - 400 - 7(8TH STD)/3(12TH STD) Sunita Popat No

Finding from (50) respondent

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1.

Have you heard of a company called I.T.C.? if yes how? A) Yes(9) B) No(41) Through 2)Arshibaad Atta (1) 3) Soaps wrapper (1)

1) cigarette wrapper(7)

2. Are you aware Vivel/Superia soaps? Yes(35- Vivel and 8superia ) b) No (7)
a)

3. What are all the soaps u can remember? 1).Lifebuoy 2). Lux 3).Dettol 4). Santoor 5).breez 6).godrej 7) .Sinthol 8). Hamam 9).Nirma 10)Vivel (46) (41) (30) (10) (33) (12) (16) (10) (36) (7)

4. What soap do you use? 1). Lifebuoy 2). Lux (19) (20)
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3). Dettol 4). Santoor 5). Breez 6). Godrej 7) . Sinthol 8). Hamam 9). Nirma 10) Vivel

(3) (1) (0) (1) (0) (1) (5) (0)

5. since when you are using this soap?

1)

1-6 months

2) 6months-1 year 2). (9)

3)1- 2 years 3) (17)

4) above 2 years 4) (21)

1). (5)

7. What soap did u use prior to this? 1).Lifebuoy 2). Lux 3).Dettol 4). Santoor 5).Breez 6).Godrej (16) (8) (9) (3) (3) (1)
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7) .Sinthol 8). Hamam 9).Nirma

(0) (1) (9)

8. How many people in your family use this soap brand? One member (4) 2) two members (10) 3) three members (3) 4) four members (12) 5) Above four members (21)
1)

9. How many times in a day you use the soap? 1). One time (31) 2).Two times (17) 3). Three times (2)

10. What do you consider while buying the soap?

a)

Quality (9)

b) color and size (8)

c) Brand name (11) e) Price(5) h). BUZZ (0)

d) Discounts/offers/free gifts (15) f) Retailers recommendation (3)

11. During which week of month do you buy the soap? a).week 1(38) b) week2(2) c) week3 (0) d) week4(10) 12. Where do you buy soap?
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a) Retail (39) b) Haats (2) c) Mandis (0) d) Melas (0) e) Nearby village/town( 6) f).others (3) 13. Rank the quality preference while buying the soap? a) Fairness (10) b) Freshness(31) c) Softness(4) d) Beauty and young skin(5) e) others specify(0)

14. How much money(in Rs.) you spend to buy the soap? a) Less than 5 (0) b) 5> 10 (32) (18)

c) More than 10

15. What do you like in soap? a)Smell(17) b)fume(22) c) color(11)

15. Have you seen ad of Vivel/Superia? if yes where/how? a) TV (23)

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b) NEWSPAPER (17) c) Magazine (2) d) POP display & advertisements (9) e) Wall painting (2) f) Hand out/newspaper inserts ( 0) g) Radio (7)

The 50 respondents in a village are studied using the following scale for question nos. 18-24 18. Local influential persons are the best source for awareness of FMCG product
OPINION WEIGHT Strongly Agree 2 (11) Agree 1(17) No opinion 3(15) Disagree -1(5) Strongly Disagree -2(2)

IV = ((Points in strongly agree X 2) + (Points in agree X 1)) ((Points in strongly disagree X -2) + (Points in disagree X -1)) IV = ((11*2) +(17*1) - (2-2) + (5-1)
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IV = 35

19. BUZZ: are used as a source of information

OPINIO N WEIGH T

Strongly Agree 2 (14)

Agree 1(13)

No opinion 3(10)

Disagree -1(8)

Strongly Disagree -2(5)

IV = ((Points in strongly agree X 2) + (Points in agree X 1)) ((Points in strongly disagree X -2) + (Points in disagree X -1)) IV = ((14*2) +(13*1) - (8-2) + (5-1) IV = 31

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20. BUZZ are used to choose a brand

OPINIO N WEIGH T Strongly Agree 2 (12) Agree 1(10) No opinion 3(15) Disagree -1(8) Strongly Disagree -2(5)

IV = ((Points in strongly agree X 2) + (Points in agree X 1)) ((Points in strongly disagree X -2) + (Points in disagree X -1)) IV = ((12*2) +(10*1) - (5-2) + (8-1) IV = 38

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21. BUZZ are reliable for product value

OPINIO N WEIGH T Strongly Agree 2 (10) Agree 1(12) No opinion 3(14) Disagree -1(14) Strongly Disagree -2(0)

IV = ((Points in strongly agree X 2) + (Points in agree X 1)) ((Points in strongly disagree X -2) + (Points in disagree X -1 IV = ((10*2) +(12*1) ((0-2) + (14-1)) IV = 21

22. BUZZ are helpful to avoid risk

OPINIO N WEIGH T Strongly Agree 2 (10) Agree 1(13) No opinion 3(10) Disagree -1(12) Strongly Disagree -2(5)

IV = ((Points in strongly agree X 2) + (Points in agree X 1)) ((Points in strongly disagree X -2) + (Points in disagree X -1)) IV = ((10*2) +(13*1) ((5-2) + (12-1)) IV = 19

23. BUZZ are mentors in case of product dissatisfaction

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OPINIO N WEIGH T

Strongly Agree 2(20)

Agree 1(13)

No opinion 3(6)

Disagree -1(5)

Strongly Disagree -2(6)

IV = ((Points in strongly agree X 2) + (Points in agree X 1)) ((Points in strongly disagree X -2) + (Points in disagree X -1)) IV = ((20*2) +(13*1)) ((7-2) + (4-1)) IV = 44

24. Advertisements are not considered for decision making:

OPINIO N WEIGH T Strongly Agree 2(7) Agree 1(9) No opinion 3(7) Disagree -1(11) Strongly Disagree -2(16)

IV = ((Points in strongly agree X 2) + (Points in agree X 1)) ((Points in strongly disagree X -2) + (Points in disagree X -1))
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IV = ((7*2) +(9*1)) ((16-2) + (11-1)) IV = -1

DATA ANALYSIS: After a good deal of consumer survey and marketing research, I have collected worthwhile data to make it valuable information in conclusion. The analysis of those datas is given below :-

DATA ANALYSIS FOR THE PREFERENCE FOR THE SOAPS AND THEIR BUYING INFLUENCING FACOTRS IN RURAL MARKET: In survey of preference of my target consumers towards soap, I had found different preferences and different choices of consumers. On the bases of their choices I had get following data:-

As per given in above chart, 90% of soap market share is captured by HUL. 50% consumers prefer HULs LUX and 30% lifebuoy.
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While other companies contribute only 8% in which ITCs all soaps brands(de wills, vivel and superia) contribut only 2%to 3% that is very less compare to HUL.

CONCLUSION: In this analysis I found that a vast majority of rural consumers prefer LUX and LIFEBUOY most trusted brands. But all these brands are costlier and entrance of ITCs soaps with vast of soaps varieties i.e. Superia for mass and de wills for high income group population with competitive prices attracting rural consumers to use ITCs soaps.

Advertisement(TV ad) most influences buying behavior of rural consumers Local influential persons are the best source for awareness of FMCG product BUZZ are used to choose a brand Low price with good quality products have makeable sales result Company should do UMBRELLA BRANDIND to set brand name in consumers mind like HUL,DABUR,NIRMA etc.

RECOMMENDATIONS:
1) Company should held awareness campaign about ITC. 2) There should be oil ingredient in soap to replace external oil usage

DATABASE OF RESPONDENT COLLECTED THROUGH SURVEY

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ANNECTURE

S. NO .

NAME

GEND ER (M/F)

AG E (YEAR S) 35 26

CONTAC T NO.

EDU . QUA L. 8th 10TH

OCCUPATION

INCOME Lacks/ye ar

1. 2.

SUNITA POPAT KISHORE GHODEKER POPAT CHAUHAN VISHWANATH RAM CHANRA JI NAMDEV KEDARI JI ABHISHEK RAMESH JAIN MADHUBALA PARIMAR SAMDEEPGAUR AV MAHENDRA ROHIT SINDHEY M

9272189 396 8087806 286 9823551 114 9823419 844 9637821 825 8730819 797 9970825 211 9272189 399 9325239 004 9823598 280

SARPANCH TAILOR

1.5 0.80

3 4 5 6 7

M M M M F

40 54 33 19 42

12TH 12TH 8TH 12TH 8TH

DECORATOR RETIRED FAUJI FARMER JWELLERY SHOP CONSUMER DURABLES GOODS SHOP VEGETABLES SELLER MOBILE ENGINEER STUDENT

2.75 1.5 1.4 2.7 1.5

8 9 10

M M M

24 21 18

5TH 10TH B. COM . 10TH

0.55 1.0 ----

11

MANOJ CHANDAN MAL JAIN MOHAN

22

9823885 259 9850296

SHOP KEEPER

1.7

12

51

8TH

RESTAURANT

4.5 27

GANPAT DABADE 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 OKAJI GAIKWAD PANDURANG GAIKWAD DILIP DEVKAR JENENDRA APPA GAIKWAD MOHAN DEVKAR SHANKAR MANE HEMCHAND DESHMUKH MANOHAR SHRIKANT SHILONE SUNIL NIKAM SACHIN PUJARI TULSIDAS BHIKARI UMESH PAWAR VIJAY GHARE VIJAY GAIKHE DINESH PADWARKAR DATTARE PAWAR SUNIL KHADKI DHNANJAY SATHE SANTOSH DEVIDAS SUDAM SOPAN DEVKAR M M M M M M M M M M M M M M M M M M M M M M 32 51 32 23 30 27 19 29 28 18 18 26 21 24 31 17 24 25 21 26 36 26

533 9766064733 9767135412 9823528166 9764085645 9823847923 9673931211 9665623757 9049532451 9503847062 9765982678 9823885037 9623136832 9823396552 9923608505 9049373069 9823851524 9664911242 9637394305 9673767551 9765943213 4TH 4TH 4TH 4TH 7TH 8TH 5TH 7TH 8TH 12TH 10TH 10TH 12TH 12TH 12TH 10TH 10TH 7TH 9TH 10TH 8TH 4TH

OWNER FARMER FARMER FARMER FARMER SHOP SHOP SHOP FARMER SERVICE SRVICE SERVICE FARMER SHOP SERVICE SERVICE SHOP SHOP SHOP SERVICE SHOP FARMER FARMER 0.8 0.72 0.90 0.45 1.0 0.75 0.80 0.50 2.0 1.75 2.25 0.55 0.90 1.5 1.2 0.45 0.36 0.45 2.0 0.35 0.30 0.55

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35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50

SWAPNIL PADWAR MAHADEV BOTRE SHRIRANG PANDURANG VISHAL YAWLE SANTOSH PADWAR SHANKAR TAPE YASHWANT TAPE THANTARAM GAIKWAD MADHURAM PADWADE SANTOSH KASHIRAM ARUN THAKARKAR DASHRATH PADWAR PRAKASH DESHMUKH RAJU DESHMUKH RAGHUNATH BOTHRE RAJU DESHMUKH

M M M M M M M M M M M M M M M

24 42 27 25 25 29 22 29 45 25 35 26 24 27 33 17

9823671021 9637545230 9960855291 9765421663 9923457909

9TH 4TH 4TH 8TH 9TH 5TH 4TH 6TH 4TH 10TH 10TH 4TH 4TH

SERVICE FARMER FARMER SERVICE SERVICE SHOP SHOP FARMER SHOP SHOP FARMER FARMER SHOP SHOP SHOP SHOP

1.6 0.7 0.35 0.90 0.65 0.45 0.22 0.25 0.35 0.35 0.65 0.70 0.40 0.32 0.35 0.25

9823481861 9673128588 9823481861

4TH 2TH 4TH

29

30

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