A Project REPORT ON Study on soaps buying behavior of rural consumers
PROJECT BY: AKHILESH KUMAR UNDER THE GUIDANCE OF PROF. G. M. JAYSHEELAN 2
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)
3
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) 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
4
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 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)
5
INDEX S.n o
Topic
Page no.
1
INTRODUCTION
7
2
SCOPE OF STUDY
8
3
OBJECTIVE AND LIMITATION OF STUDY
12
4
LITERATURE REVIEW
13
5
SWOT ANALYSIS
14
6
RESEARCH METHODOLY
15
7
VILLAGE INFORMATION
15
8
QUESTIONNAIRE
16
9
DATA ANALYSIS
27
10
CONCLUSION
28
11
RECOMMENDATIONS
28
12
ANNEXTURE
30
6
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 f irst FMCG company to initiate and produced goods according to the rural consumer. consumer. In early 1970s, when Nirma Nirma washing powder was introduced in low income income market, HLL reacted in a way way typical of many multinational companies companies . however, Nirma’s 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 like HLL, which were sitting pretty till then, woke woke up to new market realities and noticed the latent rural potential of India. C.K. Rangnathan Rangnathan started selling shampoos in sachet sachet in initial investment investment of Rs 15,000 and dare to take take on multinationals, multinationals, HLL and P&G, the unquestioned unquestioned leader in segment. He targeted rural and small town consumers who used soap to wash their hairs. He introduced sachet sachet at 90 paisa and then then 50 paisa . and that’s 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 f ocusing sector by major MNCs in India. Each and and every company is set to invest invest huge capital to competes in rural market. According According to the FICCI, the number number of rural household household using soaps products has grown grown from 136 million in 2004 to 143millon in 2007, it is clear indication that rural consumers consumers have shifted from commodities commodities to branded products . urban consumer, on other hand could go slow on FMCG expenses , 7
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 consumer’s usage habits are deferent to urban Rural consumer’s buying behavior
PROBLEM DEFINITION:
The study of opportunity of Soaps and Shampoos S hampoos 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 that it is determination of of how much market is captured by different Soap and Shampoo Shampoo companies.
SCOPE OF STUDY: 8
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 expected to rise from 135m in 2002 to 153m in 2010, which which represents largest potential market in the world.
(Rural and Urban potential)
Urban
Rural
Population 2001-02(m household)
53
135
Population 2001-02(m household)
69
153
% distribution (2001-02)
28
72
Market (towns/villages)
3768
627000
Source: Statical outline of India (2001-02), NCAER
9
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 r apid 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 P ER CAPITA CONSUMPTION:
Due to large size of market, penetration 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 household is much lower than their their urban counterpart. Existence of unsaturated market provides excellent opportunity for industry players in form of vastly untapped as the income rises. PENETRATION (%) Category
All India
urban
rural
Deodorant
2.1
5.5
0.6
Toothpaste
48.6
74.9
37.6 10
Skin care
22
31.5
17.8
Shampoo
38
52.1
31.7
Utensil cleaner
28
9.9
14.6
Instant coffee
6.6
15.5
2.8
Washing powder
86.1
90.7
84.1
Detergent war
88.6
91.4
87.4
Toilet soap
91.5
97.4
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 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: 11
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 dr aw 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). 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 Titan’s sonata watches, coca cola’s 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 household In rural India. India is expecting to grow from 80 million to 111 million by 2007. In urban ur ban India same is expecting to grow from fr om 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.
12
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 shampoos are in great demand in rural Indian villages. villages. Britannia with it low priced Tiger biscuits has become success story in rural 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. T he bottom of pyramid marketing strategies and 4 P’s model of of availabilities, affordability, acceptability and awareness provide us with a means of developing strategies to tackle marketing issues to marketing m arketing 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 different from above researches.
SWOT ANALYSIS FOR ITC LTD. Strength Distribution leadership Very deep reach in rural market ➢
Trusted Brand
➢
Extensive consumer research and A very rich product pipeline for the existing category
Weakness ➢
Late entrant in personal care segment
13
Opportunity
➢
Various categories products and services for rural markets.
➢
Agriculture business product for rural markets
➢
Threat
➢
High Competition from global brands like HUL,P&G,DABUR ,CAIVIN CARE etc.
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 14
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 I nternet.
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 r espondent and technical jargons avoided to make it most worthwhile without any confusion to respondents.
VILLAGE DETAIL
Village-at post-KHANDKALEY, District -Pune
No. of households-
- around 12000
No. of retail outlets/Mandis-
- 400
No. No. of scho school ols/ s/co coll lleg eges es
- 7(8 7(TH 8 STD)/3(12TH STD)
Market day
-
Village functions
-
Sarpanch:
-
No
Sunita Popat
Finding indi ng from f rom (50) ( 50) respo r esponden ndentt 15
1. Have you heard of a company called I.T.C.? if yes how?
A) Yes(9 Yes(9)) B) No(4 No(41) 1) ➢ Through 1) cigarette wrapper(7)
2)Arshibaad Atta (1) 3) Soap’s wrapper (1)
2. Are you aware Vivel/Superia soaps? a) Yes(35- Vivel and 8superia )
b) No (7 (7) 3. What are all the soaps u can remember? 1).Lifebuoy
(46)
2). Lux
(41)
3).Dettol
(30)
4). Santoor
(10)
5).breez
(33)
6).godrej
(12)
7) .Sinthol
(16)
8). Hamam
(10)
9).Nirma
(36)
10)Vivel
(7)
4. What soap do you use? 1). Lifebuoy
(19)
2). Lux
(20) 16
3). Dettol 4). Santoor
(3) (1)
5). Breez
(0)
6). Godrej
(1)
7) . Sinthol
(0)
8). Hamam
(1)
9). Nirma
(5)
10) Vivel
(0)
5. since when you are using this soap? 1) 1-6 months
2) 6months-1 year
3)1- 2 years
4) above 2 years
1). (5)
2). (9)
3) (17)
4)
(21)
7. What soap did u use prior to this? 1).Lifebuoy
(16)
2). Lux
(8)
3).Dettol
(9)
4). Santoor
(3)
5).Breez
(3)
6).Godrej
(1) 17
7) .Sinthol
(0)
8). Hamam
(1)
9).Nirma
(9)
8. How many people in your family use this soap brand? 1) One member 2)
3) 4) 5)
(4) two members (10) three three memb members ers (3) (3) four four membe members rs (12) (12) Above four members (21)
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)
d) Discounts/offers/free gifts (15)
e) Price(5)
f) Retailer’s recommendation (3)
h). BUZZ (0)
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? 18
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)
c) More than 10
(18)
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) 19
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 influential persons are the best source for awareness of FMCG product OPINION ION
Strongly Agree
Agree
No opinion
Disagree
Strongly Disagree
WEIGHT
2 (11)
1(17)
3(15)
-1(5)
-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) 20
IV = 35
19. “BUZZ”: are used as a source of information
OPINIO N WEIGH T
Strongly Agree
Agree
No opinion
Disagree
Strongly Disagree
2 (14)
1(13)
3(10)
-1(8)
-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
21
20. ”BUZZ” are used to choose a brand OPINIO N WEIGH T
Strongly Agree
Agree
No opinion
Disagree
Strongly Disagree
2 (12)
1(10)
3(15)
-1(8)
-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
22
21. “BUZZ” are reliable for product value value OPINIO N WEIGH T
Strongly Agree
Agree
No opinion
Disagree
Strongly Disagree
2 (10)
1(12)
3(14)
-1(14)
-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 risk OPINIO N WEIGH T
Strongly Agree
Agree
No opinion
Disagree
Strongly Disagree
2 (10)
1(13)
3(10)
-1(12)
-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 mentors in case of product dissatisfaction 23
OPINIO N WEIGH T
Strongly Agree
Agree
No opinion
Disagree
Strongly Disagree
2(20)
1(13)
3(6)
-1(5)
-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
Agree
No opinion
Disagree
Strongly Disagree
2(7)
1(9)
3(7)
-1(11)
-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)) 24
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 data’s 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 HUL’s LUX and 30% lifebuoy. 25
While other companies contribute only 8% in which ITC’s 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 ITC’s 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 ITC’s soaps. •
• • • •
Advertisement(TV ad) most influences buying behavior of rural consumers Local influential persons persons are the best best source for awareness awareness of FMCG product “BUZZ” are used to choose choose a brand Low price with good quality products have makeable sales result r esult Company should do “UMBRELLA BRANDIND” to set brand name in consumer’s mind like HUL,DABUR,NIRMA etc.
RECOMMENDATIONS: 1) Company Company should should held awareness awareness campaig campaign n about about ITC. ITC. 2) There should should be oil oil ingred ingredient ient in soap soap to replace replace external external oil usage usage
DATABASE OF RESPONDENT COLLECTED THROUGH SURVEY
26
ANNECTURE
S. NO .
NAME
1.
SUNITA POPAT
2.
KISHORE GHODEKER
3
GEND ER
CONTAC T NO.
EDU . QUA L.
OCCUPATION
35
9272189 396
8th
SARPANCH
M
26
8087806 286
10TH
TAILOR
0.80
POPAT CHAUHAN
M
40
9823551 114
12TH
DECORATOR
2.75
4
VISHWANATH RAM CHANRA JI
M
54
9823419 844
12TH
RETIRED FAUJI
1.5
5
NAMDEV KEDARI JI
M
33
9637821 825
8TH
FARMER
1.4
6
ABHISHEK RAMESH JAIN
M
19
8730819 797
12TH
JWELLERY SHOP
2.7
7
MADHUBALA PARIMAR
F
42
9970825 211
8TH
CONSUMER DURABLES GOOD’S SHOP
1.5
8
SAMDEEPGAUR AV
M
24
9272189 399
5TH
VEGETABLES SELLER
9
MAHENDRA
M
21
9325239 004
10TH
MOBILE ENGINEER
1.0
10
ROHIT SINDHEY
M
18
9823598 280
B.
STUDENT
----
11
MANOJ CHANDAN MAL JAIN
M
22
9823885 259
10TH
SHOP KEEPER
1.7
12
MOHAN
M
51
9850296
8TH
RESTAURANT
4.5
(M/F) F
AG E (YEAR S)
INCOME Lacks/ye ar 1.5
0.55
COM .
27
GANPAT DABADE
533
OWNER
13
OKAJI GAIKWAD
M
32
9766064733
4TH
FARMER
0.8
14
PANDURANG GAIKWAD
M
51
9767135412
4 TH
FARMER
0.72
15
DILIP DEVKAR
M
32
9823528166
4TH
FARMER
0.90
16
JENENDRA APPA GAIKWAD
M
23
9764085645
4 TH
FARMER
0.45
17
MOHAN DEVKAR
M
30
9823847923
7TH
SHOP
1.0
18
SHANKAR MANE
M
27
9673931211
8TH
SHOP
0.75
19
HEMCHAND DESHMUKH
M
19
-
5TH
SHOP
0.80
20
MANOHAR
M
29
9665623757
7TH
FARMER
0.50
21
SHRIKANT SHILONE
M
28
9049532451
8 TH
SERVICE
2.0
22
SUNIL NIKAM
M
18
9503847062
12TH
SRVICE
1.75
23
SACHIN PUJARI
M
18
9765982678
10TH
SERVICE
2.25
24
TULSIDAS BHIKARI
M
26
9823885037
10TH
FARMER
0.55
25
UMESH PAWAR
M
21
9623136832
12TH
SHOP
0.90
26
VIJAY GHARE
M
24
9823396552
12TH
SERVICE
1.5
27
VIJAY GAIKHE
M
31
9923608505
12TH
SERVICE
1.2
28
DINESH PADWARKAR
M
17
9049373069
10TH
SHOP
0.45
29
DATTARE PAWAR
M
24
9823851524
10TH
SHOP
0.36
30
SUNIL KHADKI
M
25
9664911242
7TH
SHOP
0.45
31
DHNANJAY SATHE
M
21
9637394305
9 TH
SERVICE
2.0
32
SANTOSH DEVIDAS
M
26
-
10TH
SHOP
0.35
33
SUDAM SOPAN
M
36
9673767551
8TH
FARMER
0.30
34
DEVKAR
M
26
9765943213
4TH
FARMER
0.55
28
35
SWAPNIL PADWAR
M
24
9823671021
9 TH
SERVICE
1.6
36
MAHADEV BOTRE
M
42
-
4TH
FARMER
0.7
37
SHRIRANG PANDURANG
M
27
9637545230
4 TH
FARMER
0.35
38
VISHAL YAWLE
M
25
9960855291
8TH
SERVICE
0.90
39
SANTOSH PADWAR
M
25
-
9TH
SERVICE
0.65
40
SHANKAR TAPE
M
29
-
5TH
SHOP
0.45
41
YASHWANT TAPE
M
22
-
4TH
SHOP
0.22
42
THANTARAM GAIKWAD
M
29
-
6TH
FARMER
0.25
43
MADHURAM PADWADE
M
45
9765421663
4 TH
SHOP
0.35
44
SANTOSH KASHIRAM
M
25
9923457909
10TH
SHOP
0.35
45
ARUN THAKARKAR
M
35
10TH
FARMER
0.65
46
DASHRATH PADWAR
M
26
4TH
FARMER
0.70
47
PRAKASH DESHMUKH
M
24
4TH
SHOP
0.40
48
RAJU DESHMUKH
M
27
9823481861
4 TH
SHOP
0.32
49
RAGHUNATH BOTHRE
M
33
9673128588
2 TH
SHOP
0.35
50
RAJU DESHMUKH
M
17
9823481861
4 TH
SHOP
0.25
29
30
31
