SYMBIOSIS CENTER FOR MANAGEMENT STUDIES, NOIDA
Research Project on RURAL MARKETING AND DECISION INFLUENTIAL
FACTORS SUBMITTED TO SYMBIOSIS INTERNATIONAL UNIVERSITY, PUNE
towards Partial Fulfillment of Requirements of Bachelors of
Business Administration
Project Guide: Submitted By: Dr. V.K.Pandey Deepak Singh
(Professor, SCMS) Arush Singh Harsh Srivastava (BBA 5th SEM)
Symbiosis Center for Management Studies, Noida(Constituent of
Symbiosis International University)Sector 62; Block A, Plot No. 47
& 48, Noida 201301 Tel. +91-120-2405067 |+91-120-2405065, Fax
No. +91-120-2405066
SYMBIOSIS CENTRE FOR MANAGEMENT STUDIES, NOIDA
CERTIFICATE
This is to certify that the project entitled RURAL MARKETING AND
DECISION INFLUENTIAL FACTORS is the bonafide work carried out by
Arush Singh Rathour, Deepak Singh, Harsh Srivastava student of
BBA(5th Semester),Symbiosis Centre For Management Studies, Noida
during the year 2012-13, in partial fulfillment of the requirements
for the award of the Degree of Bachelor Of Business
Administration
Director: Faculty: Prof. Shrirang Altekar Dr. V.K.Pandey Date:
22/10/2012Place: Noida
ACKNOWLEDGEMENT
Apart from my efforts, the success of any project depends
largely on the encouragement and guidance of many others. I take
this opportunity to express my gratitude to the people who have
been instrumental in the successful completion of this project. I
would like to show my greatest appreciation to Dr. V.K.Pandey. I
cant say thank you enough for his tremendous support and help. I
feel motivated and encouraged every time I attend his lectures.
Without his encouragement and guidance this project would not have
materialized. I would like to express my gratitude towards my
family & friends for their kind co-operation and encouragement
which helped me in completion of this project. I would also like to
thank my classmates for their constant support and people who have
willingly helped me out with their abilities.
Date: 22/10/2012
Arush SinghDeepak SinghHarsh Srivastava(5th Semester)
DECLARATION
I hereby declare that the project work entitled RURAL MARKETING
AND DECISION INFLUENTIAL FACTORS submitted to the Symbiosis
International University, is a record of an original work done by
me under the guidance of Dr. V.K.Pandey & Dr. Chitra Kasana,
Faculty Member, of Symbiosis Center for Management Studies,
Noida.
Arush SinghDeepak SinghHarsh SrivastavaBBA (5th SEM)
IndexChapterTopic Page no:
Chapter 1
Introduction 1.1 Conceptual Framework1.2 Rationale of the
Study1.3 Objectives of the Study671112
Chapter 2
Research Methodology2.1) The Study2.2) Sample Design 2.2.1)
Population 2.2.2) Sample size 2.2.3) Sample Element 2.2.4) Sample
Technique2.3)Tools for Data Collection2.4)Tools for data
analysis121212121212121313
Chapter 3
Result and Discussion3.1)Consistency Measure3.2)Reliability
Measure3.3)Factor Analysis13131313
Chapter 4
Limitation of the study & Implication 4.1) Managerial
Implication4.2) Limitations of the study
16
Chapter 5
Summary and ConclusionReferences Annexure161717
INTRODUCTION
Marketing may aptly be described as the process of defining,
anticipating and knowing customer needs, and organizing all the
resources of the company to satisfy them. In fact, satisfaction of
customers needs and wants provides the rationale for the firms
existence. Knowledge of consumer behavior, therefore, is vital for
a firm to achieve its marketing goals. The consumers behavior
comprises the acts, processes and social relationships exhibited by
individuals, groups and organizations in searching, obtainment, use
of, and consequent experience with products and services. An
understanding and knowledge of the motives underlying consumer
behavior helps a firm in seeking better and more effective ways to
satisfy its customers. It helps to select appropriate sales and
advertising strategies, and to plan marketing programmer in a more
efficient manner. The rural market of India started showing its
potential in the 1960s. The 70s and 80s witnessed its steady
development. And, there are clear indications that the 21st century
is going to see its full blossoming. In our country, where research
on consumer behavior has been nominal, not much systematized
information is available about the rural consumers. Only a few
enlightened companies, known for their marketing orientation, viz.,
Hindustan Lever, Philips India, Asian Paints, Singer and Larsen and
Toubro have made concrete efforts in this direction. But, by and
large, we have still to understand the rural buyer, Many
assumptions prevail about rural marketing. For instance, one
assumption is that the rural buyer is not very discriminating. Once
he is persuaded to buy a particular product, he develops a strong
affinity for it, and if satisfied, becomes brand loyal. As a
result, Indian manufacturers are generally known to prefer selling
fewer items at higher prices than selling more items at lower
prices. A contrary view is that the rural buyer, being suspicious
of the marketers hard sell techniques, is quite discriminating, and
is not easily persuaded. Yet another assumption is that the rural
buyer is not particularly keen about quality and packaging. Some
other assumptions can be quoted. But, all these need deep probing
for arriving at valid and reliable conclusions. Consumer research,
thus, is indispensable for entering the rural segment Of the
market.
Conceptual framework
MEANING AND DEFINITION OF RURAL MARKETINGThe term rural
marketing used to be an umbrella term for the People who dealt with
rural people in one way or other. This term got a separate meaning
and importance after the economic revaluation in Indian after 1990.
So, before venturing into the other aspects of ruralmarketing let
us discuss the development of this area in different parts which is
briefly explained here.
Part I (Before 1960): Rural marketing referred to selling of
rural Products in rural and urban areas and agricultural inputs in
rural Markets. It was treated as synonymous to agricultural
marketing.Agricultural produces like food grains and industrial
inputs like cotton, oil seeds, sugarcane etc. occupied the central
place of discussion during this period. The supply-chain activities
of firms supplying agricultural inputs and of artisans in rural
areas received secondary attention. The local marketing of products
like bamboo baskets, ropes, window and door frames, small
agricultural tools like ploughs by sellers like black smiths,
carpenters, cobblers, and pot makers were emphasized in general.
This was totally an unorganized market where all banias and
mahajans (local business people) dominated this market.
Part II (1960 to 1990): In this era, green revolution resulted
from scientific farming and transferred many of the poor villages
into prosperous business centers. As a result, the demand for
agricultural inputs went up especially in terms of wheats and
paddies. Better irrigation facilities, soil testing, use of high
yield variety seeds, fertilizers, pesticides and deployment of
machinery like powder tillers, harvesters, threshers etc. changed
the rural scenario. In this context, marketing of agricultural
inputs took the importance. Two separate areas of activities had
emerged- during this period marketing of agricultural inputs andthe
conventional Agricultural Marketing. During this period, the
marketing of rural products received considerable attention in the
general marketing frame work. The formation of agencies like Khadi
and Village Industries Commission, Girijan Cooperative Societies
APCOFabrics, IFFCO, KRIBHCO, etc., and also the special attention
government had paid to promote these products were responsible for
this upsurge. Village industries flourished and products like
handicrafts, handloom textiles, soaps, safety matches, crackers
etc. hit the urbanmarket on a large scale from rural areas.
Part III (After Mid 1990s): The products which were not
givenattention so far during the two earlier phases were that of
marketing of household consumables and durables to the rural
markets due to obvious reasons. The economic conditions of the
country were as such that the rural people were not in a position
to buy these kinds of products. Secondly, our market was in a close
shape and we newer allowed companies (foreign) to operate in Indian
market. But we lifted the and opened up economy, consequently
companies started flourishing in India. The small villages/hamlets
were widely scattered making reach difficult and expensive
consequently. Rural markets were seen an adjunct to urban market
and conveniently ignored. However, since 1990s, Indias industrial
sector had gained in strength and maturity. Its contribution to GNP
increased substantially. A new service sector had emerged
signifying the metamorphosis of agricultural society into
industrial society. Meanwhile, due to the development programmes of
the central and state governments, service organizations and
socially responsible business groups like Mafatlal, Tatas, Birlas,
Goenkas and others, the rural area witnessed an all round
socio-economic progress.The economic reforms further accelerated
the process by introducing competition in the markets. Steadily,
the rural market has grown for household consumables and
durables.Rural marketing represented the emergent distinct activity
of attracting and serving rural markets to fulfil the needs and
wants of persons, households and occupations of rural people. As a
result of the above analysis, we are in a position to define rural
marketing Ruralmarketing can be seen as a function which manages
all those activities involved in assessing, stimulating and
converting the purchasing power into an effective demand for
specific products and services, and moving them to the people in
rural area to create satisfaction and a standard of living for them
and thereby achieves the goals of the organization.
The Rural Customer: A Profile A striking feature of India, and
not just rural India, is the diverse and varied profiles of
customers. Each of these diverse sections of rural India is
embedded in its customs and traditions, which in turn have a deep
impact on the psyche of the people. Every aspect of their lives
from birth, to education, to marriage, to livelihood is influenced
by the deeply imbedded traditions. Rural marketers have been able
to understand and often utilize these diversities and traditions.
Even the level of infrastructure provided in different regions
varies a lot. The diversity in terrain adds to the already varied
lifestyle and livelihood of people there. Therefore no marketer can
follow a uniform marketing strategy through out India. Indian rural
customer is marred largely by illiteracy and poverty. Illiteracy
leads to an inability to identify brand differences and read the
basic text on packages. Poverty and dependence on vagaries of
monsoon result into a low and unpredictable purchasing power.
Moreover products are sold lose, giving high competition to branded
sealed products. Ignorance and illiteracy are accompanied by strong
influence leaders like the local panchayat members, caste and
religious leaders etc. Irregular income, dependency on the vagaries
of monsoon induces the rural consumer to buy in small quantities.
Small Coke worth Rs 5, Chick shampoo sachets have been successful
in the past. Since rural population does not have the concept of
storing goods and blocking too much capital into it is important
for rural marketers to provide products in small quantities as well
as good credit or EMI systems for larger products. It is also
important to induce first time purchase and trials so that customer
is able to experience products he never has. Credit facility also
needs to be extended to the wholesalers. There is hardly any brand
stickiness in rural consumption. Nirma is simply referred to as the
pila powder and surf as the nila powder. Because of illiteracy the
packaging of products plays an important role. It is also easy for
spurious products to find a foothold in rural markets. RC Cola
packaged as Pepsi and Hello Chips a copy of Lays are widely sold.
Therefore it is important that companies give their products
shorter names in the local languages and educate the customer about
the significance of their brands. Pictures and endorsement by local
stars will also help in increasing brand awareness. Over the past
few years rural India has witnessed an increase in the buying power
of consumers, accompanied by their desire to upgrade their standard
of living. Host of projects both from the government and the
private companies have changed the rules of the marketing game in
rural India. The NREGA (National Rural Employment Guarantee)
schemes, as well as other rural employment schemes have given the
rural population an opportunity to meet their daily needs. National
Rural Employment Guarantee Scheme guarantees 100 days employment to
any one member of the rural house hold. Farmers have benefited from
loan waver which has again received an extension in the recent
budget. Also the increased demand for labour in the urban projects
has resulted in more money being sent back home by the immigrant
labour. Rural customers have upgraded their lifestyles and as a
result are purchasing lifestyle products like cosmetics, beverages,
mobile phones, etc, which have become necessities for them.
Urbanisation has become more of a life style and is no longer bound
to geographical areas.
Changing Face of the Rural Customer In recent times, rural India
has witnessed a wave of change. Dinesh Malhotra, general manager of
Linterland (rural arm of Lintas), points out, 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 groups) 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. Looking at the challenges and
opportunity that rural markets offer, the future looks promising to
those who can understand the dynamics of the rural markets and
exploit them to their best advantage. A radical change in the
attitudes of the marketer towards the vibrant and ever growing
rural market is called for.
RationaleThis study is done for understanding the marketing
concept in rural areas. Also we can know whether peoples of rural
area are aware about e-tailing & also to know the confidence of
rural population towards e-tailing. This can also be helpful for
the FMCG companies to know how they make their product different in
pricing & quantity as compare to urban sector. & this
depends on their personal disposable income.
OBJECTIVES OF THE STUDY To develop an insight into rural
marketing regarding different Concepts and basic practices in this
area. To discuss the challenges and opportunities in the field of
rural marketing To study the impact of E marketing. To understand
the awareness of rural people toward rural market
Research MethodologyThe Study: - The study was Causal in nature
with survey was used as the method to complete the study.Sample
Design Population: The populations of the study were all the
employees working in Private Sector. Sample Size: The sample size
was of 50 respondents. Sample Element: The sampling elements were
the individual employees working in Public and Private Sector.
Sampling Technique: Convenience Sampling Technique was used for
collection of data.
Tools for Data CollectionData is collected through both Primary
& Secondary data. Data is collected from various employees
working in Public and Private Sector through personal interaction.
Structured questionnaire is prepared for collecting data. The Data
was collected on a scale of 1 to 5, where 1 indicated minimum
agreement and 5 indicated maximum agreement with the statement.
Data is collected with mere interaction and formal discussion with
different employees. Some other relevant information collected from
secondary data.Tools for data analysis Item to total correlation:
It helps in measuring the internal consistency each item should be
correlated with the total if it is not correlated that item will be
deleted. Reliability test: It is conducted to measure the
reliability of the Questionnaire. the valve should not be lessor
than (0.7). Factor Analysis: It is conducted to identify the
underlying factors.
Result and Discussion
Internal Consistency TestConsistency of the questionnaire was
checked through item to total correlation. Under this correlation
of every item with total was measured and the computed value was
compared with the standard value (i.e. 0.1942). Out of 21
statements, 1 statement was found to be inconsistent.
Table 1: Showing result of Internal
ConsistencyS.No.StatementsComputed ValueAccepted / Dropped
1My satisfaction level for the products provided by FMCGs
company to me0.382522
Accepted
2I prefer for multiple packaging items0.463064
Accepted
3My satisfaction level with the service provided by online
market0.318853
Accepted
4I am influenced by the advertisements0.492365
Accepted
5My E-shopping experience0.438326
Accepted
6I am getting influenced by the purchasing habits of others
0.393981
Accepted
7My satisfaction level with the ambience of general
store0.300219
Accepted
8My satisfaction level with life cycle of a product0.352721
Accepted
9My level of satisfaction with rural marketing done for selling
the product by FMCG company0.309123
Accepted
10My rating towards active CRM of a store in terms of
satisfaction0.272271
Accepted
11My family members are concerned about shopping when I am going
for shopping0.466554
Accepted
12I think the E-shopping has taken place of door to door selling
in rural sector0.408349
Accepted
13My satisfaction level towards price conscious or scheme
influential or discount schemes 0.318481
Accepted
14I am hesitated or feeling risk in buying a new product
0.279887
Accepted
15My satisfaction level with first take of the product that
shopkeeper offered me 0.113022
Dropped
16I am rating the FMCG product in terms of value 0.102773
Dropped
17I am satisfied with the substitute products provided by
storekeeper0.212966
Accepted
18My satisfaction level of trust towards
advertisement0.257196
Accepted
19My satisfaction level in terms of online security provided by
E-stores 0.305939
Accepted
Reliability TestReliability test was carried out using SPSS
software and the reliability test measure is given below:
Table 2: Showing result of Reliability Statistics
Cronbach's AlphaNumber of item
.54519
It is considered that the reliability value more than 0.7 is
good and it can be seen that the reliability value of Cronbachs
Alpha was found higher than the standard value.
Factor Analysis Principle component factor analysis with Varimax
rotation was applied. The factor analysis resulted in 6 factors for
Comparative study of public sector and private sector banks. The
details about factors, the factor name, variable number and
convergence and their Eigen value are given in the annexure.
Table 3: Showing Results of Factor Analysis Factor nameEigen
value Variable convergenceLoading Value
Total% Of Variance
Factor - 1 2.22113.881I am getting influenced by the purchasing
habits of others0.678
My satisfaction level with the service provided by online market
0.675
My satisfaction level with first take of the product that
shopkeeper has offering me 0.566
Factor - 2
2.087 13.045 My E-shopping experience0.674
My family members are concerned about shopping when I am going
for shopping0.580
I am getting influenced by the advertisements0.579
My rating towards the CRM of a store in terms of
satisfaction0.551
I am concern towards price conscious or scheme influential or
discount schemes0.502
Factor - 3 1.678 10.487My satisfaction level for the products
provided to you by FMCGs0.797
My preference over multiple packaging items0.746
Factor - 41.538 9.614Role of children in influencing the buying
decision0.813
My satisfaction level with the ambience of general
store0.639
Factor - 51.384 8.650My satisfaction level with life cycle of a
product0.720
I think the E-shopping has taken place of door to door selling
in rural sector0.551
Factor - 61.306 8.163My level of satisfaction with rural
marketing done for selling the product by FMCG company0.820
I am hesitated or feeling risk in buying a new product0.682
Managerial Implications
Low cost product must be produced by the company.Proper rural
survey.Consumer buying behavior.
Limitations & Suggestions of the Study The research is
covering only the certain areas & aspect of marketing. The
secondary data is based on internet & books related to
marketing. The research is containing only one example of HULs. The
study is based on descriptive study.
ConclusionRural 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. India has a population that is
large, heterogeneous, largely English speaking and a cultural
heritage that runs back to thousands of years. The common binding
factor being the historical background, over two hundred years of
subjugation and the democratic republic it has developed into. Yet
the most common factor is the lives of more than seventy percent of
its population that lives in the rural areas and has similar
economic and social circumstances. The major segmentation of mass
population is located in rural area. The market potential is huge
in rural areas. It is this market strength in rural area that needs
to be tapped. Now days even the educational Institutions are
concentrating on rural marketing, have developed special management
programmes to cater to rural marketing and are doing market
research in rural places. Rural markets are rapidly growing in
India but have often been ignored by marketers. The following
statistics is enough to throw light on the relevance of rural
markets: forty six percent of soft drinks are sold in rural
markets, forty nine percent of motorcycles and fifty nine percent
of cigarettes are also consumed by rural and small town consumers.
Apart from this fifty three percent of Fast Moving Consumer Goods
and fifty nine percent of consumer durables have market in the
rural belts. There are nearly 42,000 rural haats (markets) in
India. LIC sells more than 50 percent of its policies in rural
India. Of the 20 millions who have signed up for Rediff mail, 60
percent are from small towns The 30 million Kisan Credit Cards
(KCC) issued so far exceed the 25 million credit-plus-debit cards
issued in urban. These statistics clearly show a trend where the
rural consumers are not only buying to fulfil their bare
necessities but are also taking care of higher needs of comfort and
socialization. Moreover they have turned highly technology savvy as
demonstrated through the success of ITCs echaupals and Rediffs
rural success. As Paul Mazur defines,' Marketing's role is delivery
of a higher standard of living to people in the society.'
References
1)http://en.allexperts.com/q/Management-Consulting-2802/2012/8/rural-marketing-ms611.htm2)http://b1dcity.com/index.php?option=com_k2&view=item&id=4224:success-mantras-for-rural-marketing-in-india&Itemid=340&lang=en3)http://www.factormarkets.eu/content/rural-labour-market4)http://www.studymode.com/subjects/factor-affecting-rural-market-page5.html5)http://ruta.org:8180/xmlui/bitstream/handle/123456789/512/RN52.pdf?sequence=1
AnnexureQuestionnaire for rural area which will help us to study
how they make decision in shopping of FMCGs
product.Name:Age:Gender: a) Male B) female Occupation:
Questions Ratings (1.5)Unsatisfiedneutralextremely satisfied
My satisfaction level for the products provided by FMCGs company
to me
I prefer for multiple packaging items
My satisfaction level with the service provided by online
market
I am influenced by the advertisements
My E-shopping experience
I am getting influenced by the purchasing habits of others
My satisfaction level with the ambience of general store
My satisfaction level with life cycle of a product
My level of satisfaction with rural marketing done for selling
the product by FMCG company
My rating towards active CRM of a store in terms of
satisfaction
My family members are concerned about shopping when I am going
for shopping
I think the E-shopping has taken place of door to door selling
in rural sector
My satisfaction level towards price conscious or scheme
influential or discount schemes
I am hesitated or feeling risk in buying a new product
My satisfaction level with first take of the product that
shopkeeper offered me
I am rating the FMCG product in terms of value
I am satisfied with the substitute products provided by
storekeeper
My satisfaction level of trust towards advertisement
My satisfaction level in terms of online security provided by
E-stores
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