itc project report by akhilesh kumar

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)

DECLERATION

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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

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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

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S.no 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

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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, 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 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 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 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

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products . urban consumer, on other hand could go slow on FMCG expenses , 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 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.

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SCOPE OF STUDY:

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 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

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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.

saving; 4%clothing; 9%

personal care; 8%

grocery; 40%

entertainments; 30%

others; 11%

spendind pattern(%)

savingclothingpersonal caregroceryentertainmentsothers

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.

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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 All India urban rural

Deodorant 2.1 5.5 0.6

Toothpaste 48.6 74.9 37.6

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:

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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:

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:

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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 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 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.

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 P’s 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.

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SWOT ANALYSIS

FOR ITC LTD.

Strength Weakness

Distribution leadership

Very deep reach in rural market

Trusted Brand

Extensive consumer research and A very rich product pipeline for the existing category

Late entrant in personal care segment

Opportunity Threat

Various categories products and services for rural markets.

Agriculture business product for 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

High Competition from global brands like HUL,P&G,DABUR ,CAIVIN CARE etc.

RESEARCH METHODOLY :

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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 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

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Village-at post-KHANDKALEY, District -Pune

No. of households- - around 12000

No. of retail outlets/Mandis- - 400

No. of schools/colleges - 7(8TH STD)/3(12TH STD)

Market day - No

Village functions -

Sarpanch: - Sunita Popat

Finding from (50) respondent

1. Have you heard of a company called I.T.C.? if yes how?A) Yes(9)B) No(41)

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)

3. What are all the soaps u can remember?

1).Lifebuoy (46)

2). Lux (41)

3).Dettol (30)

4). Santoor (10)

16

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)

3). Dettol (3)

4). Santoor (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?

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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)

7) .Sinthol (0)

8). Hamam (1)

9).Nirma (9)

8. How many people in your family use this soap brand?

1) One member (4) 2) two members (10) 3) three members (3) 4) four members (12) 5) 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?

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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?

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)

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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)

b) NEWSPAPER (17)

c) Magazine (2)

d) POP display & advertisements (9)

e) Wall painting (2)

f) Hand out/newspaper inserts ( 0)

g) Radio (7)

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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 Strongly Agree

Agree No opinion Disagree Strongly Disagree

WEIGHT 2 (11) 1(17) 3(15) -1(5) -2(2)

0

5

10

15

20

11

1715

5

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) IV = 35

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19. “BUZZ”: are used as a source of information



WEIGHT 2 (14) 1(13) 3(10) -1(8) -2(5)

05

1015

1413

108

5


IV = ((14*2) +(13*1) - (8-2) + (5-1) IV = 31

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20. ”BUZZ” are used to choose a brand



WEIGHT 2 (12) 1(10) 3(15) -1(8) -2(5)

0

5

10

15 1210

15

8

2


IV = ((12*2) +(10*1) - (5-2) + (8-1) IV = 38

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21. “BUZZ” are reliable for product value



WEIGHT 2 (10) 1(12) 3(14) -1(14) -2(0)

02468

101214

1012

14 14

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 = 2122. “BUZZ” are helpful to avoid risk



WEIGHT 2 (10) 1(13) 3(10) -1(12) -2(5)

02468

101214

1013

1012

5

24


IV = ((10*2) +(13*1) – ((5-2) + (12-1)) IV = 19

23. “BUZZ” are mentors in case of product dissatisfaction



WEIGHT 2(20) 1(13) 3(6) -1(5) -2(6)

strongly Agree Agree No opinion Disagree strong

Disagree

0

5

10

15

2020

13

64 7


IV = ((20*2) +(13*1)) – ((7-2) + (4-1)) IV = 44

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24. Advertisements are not considered for decision making:



WEIGHT 2(7) 1(9) 3(7) -1(11) -2(16)

strongly Agree Agree

No opinionDisagree

strong Disagree

05

101520

7 97

1116


IV = ((7*2) +(9*1)) – ((16-2) + (11-1)) IV = -1

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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:-

LUX LIFEBOUY REXONA ITC' SOAPS others0

5

10

15

20

25

30

35

40

45

5050

30

12

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DEMAND OF SOAP BRAND

BRANDS

PERS

ENTA

GE

As per given in above chart, 90% of soap market share is captured by HUL. 50% consumers prefer HUL’s LUX and 30% lifebuoy.

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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 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

consumer’s 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 GENDER(M/F)

AGE(YEARS)

CONTACT NO.

EDU. QUAL.

OCCUPATION INCOMELacks/year

1. SUNITA POPAT F 35 9272189396 8th SARPANCH 1.5

2. KISHORE GHODEKER M 26 8087806286 10TH TAILOR 0.80

3 POPAT CHAUHAN M 40 9823551114 12TH DECORATOR 2.754 VISHWANATH RAM

CHANRA JIM 54 9823419844 12TH RETIRED FAUJI 1.5

5 NAMDEV KEDARI JI M 33 9637821825 8TH FARMER 1.46 ABHISHEK RAMESH

JAINM 19 8730819797 12TH JWELLERY SHOP 2.7

7 MADHUBALA PARIMAR

F 42 9970825211 8TH CONSUMER DURABLES GOOD’S SHOP

1.5

8 SAMDEEPGAURAV M 24 9272189399 5TH VEGETABLES SELLER 0.559 MAHENDRA M 21 9325239004 10TH MOBILE ENGINEER 1.010 ROHIT SINDHEY M 18 9823598280 B.

COM.STUDENT ----

11 MANOJ CHANDAN MAL JAIN

M 22 9823885259 10TH SHOP KEEPER 1.7

12 MOHAN GANPAT DABADE

M 51 9850296533 8TH RESTAURANT OWNER 4.5

13 OKAJI GAIKWAD M 32 9766064733 4TH FARMER 0.8

14 PANDURANG GAIKWAD

M 51 9767135412 4TH FARMER 0.72

15 DILIP DEVKAR M 32 9823528166 4TH FARMER 0.90

16 JENENDRA APPA GAIKWAD

M 23 9764085645 4TH 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 8TH 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

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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 9TH 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

35 SWAPNIL PADWAR

M 24 9823671021 9TH SERVICE 1.6

36 MAHADEV BOTRE

M 42 - 4TH FARMER 0.7

37 SHRIRANG PANDURANG

M 27 9637545230 4TH 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 4TH 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

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48 RAJU DESHMUKH

M 27 9823481861 4TH SHOP 0.32

49 RAGHUNATH BOTHRE

M 33 9673128588 2TH SHOP 0.35

50 RAJU DESHMUKH

M 17 9823481861 4TH SHOP 0.25

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itc project report by akhilesh kumar

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