Potentiality of Rural - Market a Case of FMCG Product

Potentiality of Rural Market A Case of FMCG Product

Department of Professional Development

Submitted By Tanuj Bansal 06307G, CSE

---------------------------------------------------------------------------------------------------------------------------------------

Jaypee Institute of Engineering & Technology A-B Road, Raghogarh, Guna (M.P.)

Potentiality of Rural Market – A Case of FMCG Prod Pr oduct uct

2009

Index Acknowledgement ………………………………………………………………….. 3 2. Certificate …………………………………………………………………………..... 4 3. Introduction to Indian Rura Rura l Market ……………………...………………………… 5 4. Market Segmentat Segmentat ion of India India n Rural Market ……………………………………..... 6 a. Rural Rural a nd Urban Urba n Potent Potentiial …………………………………………………… 7 5. Fast Moving Consumer Goods ……………………………………………………..... 8 Top 10 FMCG compani compa nies es in India …………………………………...…………...... 9 6. Top 7. Rura Rura l Market a nd FMCG P roducts roducts ………………………………………………… 10 a. Penetratio Penetration n ………………………………………………………………..… 12 Wha t makes Rural Market attractive? ……………………………………………… 13 8. Wha Rural Consumer Consumer Insight …………………………………………………………….. 13 9. Rural MARK Approach Approach to Rural Marketing ………………………………………...……. 14 10. MARK 11. Analysis Analysis of o f FMCG Sector ………………………………………………………….. 15 12. Why Different Strategies ………………………………………………...…………. 16 Opportunities .…...……………………………………………………….…………. 17 13. Opportunities – 1 Tata Ta ta Tea ………….…………………………………………..…….. 18 14. Case Study – 1 a. Company Company Profile Profi le ……………………………………………………………. 18 b. Produc Produc ts and Brands …………………………………………………..……. 18 15. 4 P’s of Marketing of TATA TEA ………………………………………….……… 19 So ciety Tea Tea ………………………………………………………… 21 16. Case Study – 2 Society a. Company Company Profile Profi le ……………………………...…………………………….. 22 b. Mission Statement ……………………………………...…………………... 22 17. Health Be Be nefits of Society Tea ……………………………………..………………. 22 18. 4 P’s of Marketing of Soci Soc iet y Tea ……………………………………..…………… 23 Live Examples of Market Captur ing ……………………………………..………… 25 19. Live 20. Present Position ……………………………………………………………..……… 26 Bibliography ………………………………………………………………….…….. 27 21. Bibliography 1.

Tanuj Bansal, 06307G, 06307G, B-Tech, CSE, JIET, JI ET, GUNA GUNA

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2009

ACKNOWLEDGEMENT There is always a sense of gratitude gratitude which one expresses exp resses and offer for the the helpful and needy services someone renders during all the phases of life. We really wish to express our gratitude gratitude towards al l member memberss of JIET (Guna) who has been helpful to me in the completio c ompletion n of this project. I express my heartfelt and profound gratitude to our guide Mr. Sandeep Srivastava, Sr. Lecturer Department of Professional Development, JIET, Guna (M.P.) whose valuable suggestions and cooperation have encouraged me and provided the impetus to get this project off the ground. I also duly acknowledge all the faculty members of Professional Development department for guiding me in the making of this project and for solving my problem at every stage.

Date: 19/11/2009 19/11/2009

Tanuj Bansal 06307G CSE, JIET


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2009

JAYPEE INSTITUTE OF ENGINEERING & TECHNOLOGY Department of Professional Development

CERTIFICATE This is to certify that project entitled ” Potentiality Potentiality of Rural Market – A Case of

FMCG Product ” submitted by Tanuj Bansal(06307G) student of B-Tech Computer Science Engineering at JIET Guna , in partial fulfillment for award of degree of bachelor of technology, is a bonafide record of work under the supervision of Mr. Sandeep Srivastav Sr ivastava, a, Department Professional Professional Development, Development, Jiet Guna. The matter embodied in this report has not been submitted partially or wholly to any other University or Institute for the award of this or any other degree or diploma.

Mr. Sandeep Srivastava

PROJECT GUIDE Jiet, guna


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2009

Introduction to Indian Rural Market

The rural India has 75 percent of the population living in 5,72,000 villages speaking 33 languages lang uages,, 1652 dialects dial ects and have diverse sub cultures and diverse require requirement ments. s. More More than 80 percent of the rural consumers depend upon agriculture and allied activities for their their liveliho liveli hood. od. The rural market has has been growing growing steadily since the 1980s and, is now bigger than the urban market for both fast moving consumer goods (53 percent share of the total marke market) t) and consumer consume r dura dura bles (59 ( 59 percent). An analysis anal ysis of the National National Samples Survey (NSS) data reveals that 75 percent of the expenditure on manufactured goods is account acc ounted ed b byy rural India. India. Tec Technologica hnologicall developments are taking place in rural rural areas at a rapid fast rate as is in the urb urban an areas. The disposable income in rur rural al India has increased increas ed manifold in the the last las t five years years than the the urban urban area. All these thes e paved way for rural rural marketing. marketi ng.


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Market Segmentation of Indian Rural Market

The Indian rural market can be segmented on the following basis:

Rural Rich Consumers: The rural rich consumers can be estimated on the basis of land owne owne d by by them. They occupy occupy major portion portion of the the land (in acres) in their their locality. They engage in i n agricultur agriculture e and allied activities. They hold hold important important positions positions in their places plac es.. They may may be a member of political politic al party or may be having the support of politica poli ticall party. They give gi ve employment employment opportunities opportunitie s in i n their their field for for other other peo peoples ples in their locality. loca lity. They enjoy huge surplus of disposable dis posable income. They mostly mostly use the disposable income for purchasing purchas ing jewels for their family member members. s. They also deposit consistent consis tent portion of of their amount in the the nationalized banks. Some Some of the the rural rural rich consumers cons umers also als o invest their money in small-scale businesses, land and buildings and act as moneylenders of their their locality. locali ty. They have television, refrigerator, refrigerator, VCD/VCR/VCD, two-wheeler (prefe (preferr to have have bike), tractor, tractor, and car. Their childre childre n are sent to the nearby re re pute pute d educational institutions for their studies. They prefer to use all leading brands available in the market. middle class c lass peoples peoples Rural Consumers above Poverty Line: They are identified as the middle residing in rural rural areas. There are are 50 million households households that live above the the pove pove rty line in rural areas of India. India. When comparing comparing to the rural rural rich consumers consume rs they own few acres of land. They mostly mostly engage in agric agriculture ulture and few other allied alli ed activities. acti vities. They have only only less less disposable income income and deposit deposit in i n local banks. They also invest invest their disposable surpluses surpluses if i f any in jewels for their daughters' marriage. Most of them have two-wheelers like Bajaj M80 or TVS 50 and only few of them prefer to have bikes (bullets) and use these vehicle for multip multipurpose. urpose. Only few of them them have tractors tractors and they send se nd their their children to the the nearby government government educational institu ins titution tionss that charge fewer fees. They prefer prefer to have bra bra nds, which gives them value for money spent.


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Rural Consumers below Poverty Line: There are 260 million Indians who live below poverty line and most of them are located in rural areas. They occupy minimum portion of land in their l ocality. Some Some of them not e ven have have any land in their locality. locali ty. They survive survive their family by working working in i n the farm farm of of rich persons in their locality. loca lity. They work for daily dail y wages and a nd sometimes they are compensated for their their work work with food grains. grains . They live in hut or in the farm of rich persons. When they don’t have work in their village they migrate to the the nearby villag e for work. work. They also involve in i n temporary temporary seas se asonal onal business business for their survival. survival . They mostl mostlyy purchas purchase e local brands or fake brands for their usa usage ge because beca use of of its its less pricing .

Rural and Urban Potential Urban Rural

Population 2001-02 (m household) household) 53

135

Population 2009-10 (m household) household) 69

153

% Dis tribution tribution (2001-02) (2001-02)

28

72

Market (Towns/Villages)

3,768 627,000

Source: Statistical Outline of India (2001-02), NCAER

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


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Fast Moving Consumer Goods (FMCG)

We regularly talk about things like butter, potato chips, toothpastes, razors, household care products, packaged food and beverages, etc. But do we know under which category these things come? They are called FMCGs. FMCG is an acronym for Fast Moving Consumer Goods, which refer to things that we buy from local supermarkets on daily basis, the things that have high turnover and are relatively cheaper. FMCG’s constitute a large part of consumers’ budget in all countries. The retail sector f or FMCG’s in India is in the process of a drastic transformation. The transformation of the retail

market is likely to have a long-lasting impact on wholesale trade and the distribution of FMCG’s as well. Traditional wholesalers are the most likely losers, because large retailers tend to buy directly from suppliers. The Indian FMCG sector is the fourth largest sector in the economy, with a total market size in excess of US$ 13.1 billion. It has a strong MNC presence and is characterized by a well established distribution network, intense competition between the organized and unorganized segments and low operational cost. Availability of key raw materials, cheaper labor costs and a nd presence presence across the entire entire value val ue chain gives India a competitive competitive advantage.

Products and Categories Categ ories -Personal -Personal Care, Oral O ral Care, Care, Hair Hai r Care, Care, Skin Care, C are, Personal Wash (soaps); - Cosmet C osmetics ics and a nd toiletries toiletries,, deodorants, deodorants, perfumes perfumes,, feminine hygiene, paper pape r product; product; - Household care fabr fa bric ic wash including including laundry laundry soaps s oaps and synthetic synthetic detergen detergents, ts, household cleaners, such as dish/utensil dish/utensil clean cl eaners, ers, floor cleaners, toilet cleaners, air fresheners, fresheners, insecticides and mosquito mosquito repellents, metal metal polish and furniture furniture polish p olish - Food Food and health beverages , branded branded flour, branded sugarcane, s ugarcane, bakery products s uch as bread, bread, biscuits, bis cuits, etc., milk and dairy produ producc ts, beverages beverages such as tea, coffee, juices, bottled bottled water etc, etc, snack s nack food, chocolates, chocolates, etc. Tanuj Bansal, 06307G, 06307G, B-Tech, CSE, JIET, JI ET, GUNA GUNA

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2009

Top 10 FMCG Companies in India 1.

Hindustan Unilever Ltd.

2.

ITC (Indian Tobacco Company)

3.

Nestlé India

4.

GCMMF (AMUL)

5.

Dabur India

6.

Asian Paint Pai ntss (India)

7.

Cadbury India

8.

Britannia Industries

9.

Procter & Gamble Hygiene and Health Care

10.

Marico Industries


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2009

Rural Market and FMCG Products ‘The future f uture lies lies with those companies who see the poor poor as their customers’

Rural market is getting an importance because of the saturation of the urban market. As due to the competition in the urban market, the market is more than or as saturated as most of the capacities of the purchasers have been targeted by the marketers. So the marketers are looking for extending their product categories to an unexplored market i.e. the rural market. This has also led to the CSR activities being done by the corporate to help the the poor people attain som s ome e wealth to s pend on their their product categories. categorie s. Here we can think of HLL (now, HUL) initiatives in the rural India. One of such project is the Project Shakti , which is not only helping their company attain some revenue but also helping the poor women of the village to attain some money which is surely going to increase their purchasing power. Also this will increase their brand loyalty as well as recognition in that area. Similarly we can think of the ITC E-Chaupal, which is helping the poor farmers get all the the information information about the weathe weathe r as well as the market market price of the food grains they are producing. In other view these activities are also helping the companies increase their brand value. So as it is given above the significance of the rural market has increased due to the saturation of the urban market as well as in such conditions the company which will lead the way will be benefited as shown by the success of HUL and ITC initiatives. There was a time when the FMCG companies ignored rural market, they took no any interest interest to produced or sell s ell products products in rural rural market in India. It was the initial stage of FMCG FMCG companies companies in i n India. As per as the time time has passed, passed, the strategy and marketing marketing style of FMCG companies has changed. In 1970, Nirma was the first FMCG Company to initiate and produce goods according to rural consumers. In the early 1970s, when Nirma washing powder was introduced in the low-income market, Hindustan Lever Limited (HLL) reacted in a way typical of many multinational multinational companies. However, However, Nirma’s entry chan ged the whole Indian FMCG scene. It became a great success story and laid the roadmap for others to follow. MNC’s like HLL, which were sitting pretty till then, woke up to new market realities and noticed the latent rural potential of India. In 1983, C K Ranganathan started selling shampoos in a sachet with an investment of Rs 15,000 and dared to take on the multinationals, Lever and P&G, the unquestioned leaders in that segment. He targeted rural and small-town consumers who used soaps to wash their hair. He introduced the sachet at 90 paise and then reduced it to 50-paise. And that’s when the multinationals noticed him. Sales zoomed from 35,000 sachets to 12 lakhs. Initially they took any sachet, but after three months they restricted to Chik sachets.


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Now at the present time, rural market market iiss one of the the best oppor o pportunity tunity and a nd focusing focusing sector for the major FMCG companies in India. Each and every company is set to invest a huge capital for competition in rural market. According to the Federation of Indian Chambers of Commerce and Industry, the number of rural households using FMCG products has grown from 136 million in 2004 to 143 million in 2007, a clear indication that rural consumers are shifting from commodities to branded products. Urban consumers, on other hand, could go slow on FMCG expenses, thanks for inflation spiral, rise in fuel cost and costlier credit. Evidence suggests that for the first time, the rural market has grown faster than the urban market in key product categories in April-May 2008. Time and again marketing practitioners have waxed eloquent about the potential of the rural market. But when one zeroes in on the companies that focus on the rural market, a mere handful names come to mind. Hindustan Lever Limited (HLL) is top of the mind with their successful rural marketing projects like 'Project Shakti' and 'Operation Bharat'. The lynchpin of HLL's strategy has been to focus on penetrating the market down the line and focusing on price point. Furthermore, activating the brand in the rural market through activities, which are in line with the brand itself, is what sums up HLL's agenda as far as the rural market is concerned informs MindShare Fulcrum general manager R Gowthaman. Amul Amul is another cas e in point of of aggressive ag gressive rural marketing. Some of the other co rporate that are slowly making headway in this area are Coca Cola India, Colgate, Eveready Batteries, LG Electronics, Philips, BSNL, Life Insurance Corporation , Cavin Kare, Britannia and Hero Honda to name a few. We can safely say that until some years ago, the rural market was being given a stepmotherly treatment by many companies and advertising to rural consumers was usually a hit and miss affair. More often than not, the agenda being to take a short-cut route by pushing urban communication to the rural market by merely transliterating the ad copy. Hence advertising that is rooted in urban sensitivities didn't touch the hearts and minds of the rural consumer. While, this is definitely changing, the process is slow. The greatest challenge c hallenge for advertisers advertisers and marketers marketers continues continues to be in finding the right mix that will have a pan-Indian rural appeal. Coca Cola, with their Aamir Khan Ad campaign succeeded in providing just that. Coca-Cola India tapped tapped the the rural market in a big way when it introduced bottles priced at Rs 5 and backed it with the Aamir Khan ads. The company, on its behalf, has also been investing steadily to build their infrastructure to meet the growing needs of the rural market, which reiterates the fact that this multinational has realized the potential of the rural market is going strength to strength to tap the same. So the fact remains that the rural market in India has great potential, which is just waiting to be tapped. Progress has been made in this area by some, but there seems to be a long way for marketers to go in order to derive and reap maximum benefits. Moreover, rural India is not so poor as it used to be a decade or so back. Things are sure a changing!


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2009


Low penetration and low per capita consumption: Due to the large size of the market, penetration level in most product categories like jams, toothpaste, skin care, hair wash etc. in India is low. This is more visible when comparison is done between the rural and the urban areas. The average consumption by rural households is much lower than their urban urban counterparts. cou nterparts. Exis tence of unsaturated unsaturated markets provides an excellent excel lent opportunity opportunity for the industry players in the form of a vastly untapped market as the income rises.

Penetration % Category

All India % Urban % Rural %

Deodorants Deodorants

2.1

5.5

0.6

Toothpas Toothpas te

48.6

74.9

37.6

Skin Cream

22

31.5

17.8 17.8

Shampoo

38

52.1

31.9

Utensil Cleaner

28

59.9

14.6

Ins tant Coffee

6.6

15.5

2.8

Washi ng Powder Powder 86.1

90.7

84.1

Detergent Detergent Bar

88.6 88.6

91.4

87.4

Toil et Soap

91.5

97.4

88.9

Source: HLL investor investor m eet 2006

As per given in the above chart, rural market shows a good improvement. In the presence of some product categories like, toilet soap, detergent bar, washing powder etc., it is same as in the urban level. Rural market is also improving in the other products category.


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What makes Rural Market attractive? ural market market has following arrived and tthe he following facts fac ts substantiate this: this: Rural 

742 million people



Estimated annual size of the rural market FMCG Rs R s 65,000 Crore Crore  FMCG 

Durables Rs 5,000 Crore  Agri-inputs (incl. tractors) Rs 45,000 Crore 

2 / 4 wheelers Rs 8,000 Crore  In 2001-02, LIC sold 55 % of its policies in rural India. 

Of two milli million on BSNL mobile mobile conn c onnections, ections, 50% in small s mall towns/villages towns/villages  Of the six lakh villages, 5.22 lakh have a Village Public Telephone (VPT) 

41 million Kisan Credit Cards issued (against 22 million credit-plus-debit cards in urban) with cumulative credit of Rs 977 billion resulting in tremendous liquidity.



Of 20 million Rediffmail signups, 60 % are from small towns. 50% transactions from these towns towns on Rediff online s hopping hopping site s ite  42 million rural HHs availing banking services in comparison to 27 million urban HHs. 

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

Rural Consumer Insight 

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 sham s hampoo poo,, second s econd largest shampoo brand  Ghadi detergent, third largest brand  

Fewer brand choices in rural: number of FMCG brand in rural is half that of urban Buy value for money, not cheap products


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MARK Approach to Rural Marketing

Rural India has problems quite unique in nature. The major error people make while marketing to the rural market is that they apply the same theories as learned from the urban context. The underlying myth among the marketers that the rural consumer is similar to an urban consumer except for the constraint of money has been proved wrong. It is in MARK’ (Money , Acceptability, Reach and Knowledge) this regard that we have identified ‘ MARK’ as the major challenges faced by a rural marketer. Each of these factors has been discussed in detail. Money: Products need to be within the affordable range. Sachetisation (selling in sachets)

was used to overcome this barrier and thereby sell to the rural consumer. This strategy backf ired ired and was found that sachet’s have in fact cannibalized the sales of the larger volume packaged products manufactured by the same company. Acceptability: There is a need to offer products that suit the rural market. Customizing

products to suit the needs of the rural folk will help it gain wider acceptability and thereby lead to increased penetration penetration within within these t hese rural rural markets. E.g. E .g. A rural rural consumer will will never ne ver be willing to accept Kellogg’s cornflakes cornflakes as a s ubstitute ubstitute to his breakfast breakfast of Paratha Paratha and a nd curd but if the Kellogg’s is able to communicate the message that Kellogg’s since it is full of nutrients vital to a growing child the can be used to supplement h is child’s daily meal then he would be ready to buy Kellogg’s for his child.

Reach: The first step towards gaining sales within the rural space is to see to it that the reach of the product be wide enough. Unless the product is available there is no point whether we overcome the other challenges or not as we will not finally derive any sales at all. Marketers must trade off the distribution cost with incremental market penetration. Over the years, MNC’s have tried out various tactics to reach out to the ru ral markets from using auto rickshaws, bullock-carts and even boats in the backwaters of Kerala. Over the years the hub and spoke distribution model has evolved as the one most suited to reach out to the the rural villages. vill ages.

Knowledge: Knowledge or awareness about the product depends on how effective market communication is. It is extremely important to choose the right channel for market communication. It is a commonly held misconception by marketers and ad-agencies that TV is the best medium medium to communicate to these thes e rural rural masses. masses . TV reaches 36% only and the the re is a substantial media dark area of 2405 million in Bihar, Orissa, East UP, MP and Rajasthan. Another important factor from the rural point of view is that during sowing and harvest time there is electricity for agriculture but no time to watch TV, after the harvest when farmers are free, electricity otherwise given to them is now diverted to the industry.


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Analysis of FMCG Sector Strengths: 1. Low operati operational onal costs 2. Presence of established distribution networks in both urban and rural areas 3. Presence of well-kno well -known wn brands brands in FMCG sector

Weaknesses: 1. Lower scope of investing in i n technology technology and achieving economies economies of scale, sc ale, especially in small sector s ectorss 2. Low exports levels 3. "Me-too" products, which illegally mimic the labels of the established brands, narrow the scope of FMCG products in rural and semi-urban market.

Opportunities: 1. Untapped rural market 2. Rising Risi ng income income levels l evels i.e. increase increase in purchasi purchasing ng power power of consumers 3. Large domestic market - a population of over one billion 4. Export potential 5. High consumer goods spending

Threats: 1. Removal of import restrictions resulting in replacing of domestic brands 2. Slowdown in rural demand 3. Tax Ta x and regulatory regulatory structure s tructure


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2009

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 success ful, have failed miserably. This is bec because, ause, most firms try to 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 planning stage s tage so that they they match the needs of the rural people. Ther T herefore, efore, marketers 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: 

Unde Unde rstanding rstanding the rural consumer  Poor infrastructure 

Physical Distribut Distribution ion  Channel Management  Promotion and Marketing Communication Dynamics of rural markets differ from other market types, and similarly rural marketing strategies are also significan s ignificantly tly different from the marketing str s trategies ategies aimed at an urban urban or industrial consumer.


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Opportunities 

Infrastructure is improving rapidly. 

In 50 years only 40% villages connected by road, in next 10 years another 30%  More than 90% villages 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 2001  Number of “pucca” houses doubled from 22% to 41% and “kuccha” houses halved

(41% to 23%) 

Percentage of BPL(Below Poverty Line) families declined from 46% to 27%  Rural Literacy level improved from 36% to 59% 



Low penetration rates in rural so there are many marketing opportunities Durables

Urban

Rural Total (% of rural HH)

CTV Refrigerator FMCGs Shampoo Shampoo Toothpas Toothpaste te

30.4 33.5

4.8 3.5

12.1 12.0

66.3 82.2

35.2 44.9

44.2 55.6

Marketers can make effective use of the large available infrastructure 

Post offices 1,38,000 (periodic markets) markets) 42,000  Haats (periodic 

Melas (exhibitions) (exhibitions) 25,000 Mandis (agri markets) markets) 7,000  Mandis 

Public Public distribution distribution shops 3,80,000  Bank branches 32,000 Proliferation of large format format rural rural retail retail stor st ores es which have also been succes s uccessful sful  Proliferation 

DSCL Haryali stores stores  M & M Shubh Labh stores 

TATA/Rallis Kisan Kisan Kendras Kendras  Escorts rural stores 

Warnabazaar, Maharashtra (annual sale Rs 40 crore)


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CASE STUDY - 1

Company Profile Set up in 1964 as a joint venture with UK-based James Finlay and Company to develop value-added tea, the Tata Tea Group of Companies, which includes Tata Tea and the UKbased Tetley Group, today represent the world's second largest global branded tea operation with product and brand presence in 40 countries. Among India's first multinational companies, the operations of Tata Tea and its subsidiaries focus on branded product offerings in tea but with a significant presence in plantation activity in India and Sri Lanka. The consolidated worldwide branded tea business of the Tata Tea Group contributes to around 86 per cent of its consolidated turnover with the remaining 14 per cent coming from Bulk Tea, Coffee, and Investment Income. The Company is headquartered in Kolkata and owns 27 tea estates in the states of Assam and West Bengal in eastern India, and Kerala in the south s outh..

Products & Brands The company has five major brands in the Indian market - Tata Tea, Tetley, Kanan Devan, Chakra Gold and Gemini -- catering to all major consumer segments for tea. The Tata Tea brand leads market share in terms of value and volume in India and the Tata Tea brand is accorded "Super Brand" recognition in the country. Tata Tea's distribution network in the country with 38 C&F agents and 2500 stockiest caters to over 1.7 million retail outlets (ORG Marg retail Audit) in India. The company has a 100% export-oriented unit (KOSHER & HACCP certified) manufacturing Instant Tea in Munnar, Kerala, which is the largest such facility outside the United States. The unit's product is made from a unique process, developed in-house, of extraction from tea leaves, giving it a distinctive liquoring and taste profile. Instant Tea is used for light density 100% Teas, Iced Tea Mixes and in the preparation of Ready-to- drink (RTD) beverages. With an area of approx 15,900 hectares under tea cultivation, Tata Tea produces around 30 million kg of Black Tea ann a nnually. ually.


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4 P’s of Marketing of TATA TEA Product: Bulk Tea

All grades of CTC Teas All grades of Orthodox Teas o Organic Tea - Orthodox Orthodox grades Teas T eas o are supplied in packaging as per ISO norms as well as customer requirements viz. 4-ply Kraft Paper Sacks, Multiwall Paper Sacks, Rigid T--Sacks, Polywoven Sacks, Corrugated Fiber Fiber Carlons, and Polylined Jute Jute Bags Bag s etc.

Instant Tea

Instant Tea Division caters to customer specific product and is used for light density 100% Teas, Iced Tea Mixes and in the preparation of Ready to Drink (RTD) beverages. Instant Tea powder powder is packed in bulk packages of 20/25/35 kg each.

Intant tea powder - heavy density Instant tea powder - institutional density Instant tea powder - grocery density Micro milled instant tea powder


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2009

Price: 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 myri ad rituals, celebrations, festivals, “melas” and other activities where they assemble. All the prices of the products depend upon the package i.e., 50gms or 100gms. Normally a Penetrating Penetrating Strategy Strategy is i s used frequently. frequently.

Place: (Dis tribution) One of the the ways could be using compa compa ny delivery delivery vans which can serve two 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 to establish establis h direct contact contact with them and there there by facilitate facili tate sales sa les 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 popular and provide a very good platform for distribution because people visit them to make several purchases. According to the India n Market Research Bureau, around 8000 such melas are held in rural India every year. Rural markets markets have the practice p ractice of fixing fix ing specific days in a week as Market Days (often (often called cal led “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.

Promotion: 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, comfortable, can be used for high impact produc produc t campaigns.


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Potentiality of Rural - Market a Case of FMCG Product

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