chapter six conclusions, findings, suggestions and
TRANSCRIPT
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Chapter Six
Conclusions, Findings, suggestions
and recommendations
6.1 Conclusions and Findings:
The fast moving consumer goods (FMCG) segment is the fourth
largest sector in the Indian economy.1 The FMCG Sector in India
involves a strict competition between the organized and unorganized
sector of consumer durables. India offers an abundance of raw
materials, low-priced labor costs, and also has a presence across the
entire value chain. FMCG industry provides a wide range of
consumables and accordingly the amount of money circulated against
FMCG products is also very high.2
The FMCGs companies have faced tough competition among
themselves over the years which is continuously increasing. This is
due to the increase in per capita income among individuals and also
various developments in rural economy. The FMCG sector has
changed its strategies and has opted for a more well-planned
marketing of the products to penetrate both the rural and urban
markets.
The study concludes that the Fast-moving consumer goods (FMCG)
are products that are sold quickly and at relatively low cost3. Thus
1 01.08.2018_Commerce_Ishankumar.pdf 2 Dynaprassarak Mandal.docx 3 Ibid
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the Fast moving consumer goods (FMCG) manufacturing is very
much high quality products that fly off the production lines as fast as
they fly off supermarket shelves. The example are non-durable goods
such as soft drinks, toiletries, over-the-counter drugs, processed
foods and many other consumables. Typical products include home
cleaning items, personal hygiene goods and foodstuffs, such as crisps
and ready meals. Major players include companies which produce a
wide portfolio of products, while other companies tend to focus on
single product areas.
FMCGs usually have a short shelf life due to high consumer demand
or that the product deteriorates rapidly. Some FMCGs, such as meat,
fruits and vegetables, dairy products, and baked goods, are highly
perishable. Other goods, such as alcohol, toiletries, pre-packaged
foods, soft drinks, chocolate, candies, and cleaning products, have
high turnover rates and therefore the sales are sometimes influenced
by some holidays and season. Thus the consumer daily uses products
are taken for survey. Although noticed that the profit margin made on
such FMCG products is relatively small, they are generally sold in
large quantities which makes the cumulative profit substantial.
Most of the FMCG companies only treat rural sector as adjuncts and
not as target market and focus on brands for rural sector. The winning
strategy instead is to focus on their core competency such as
technological expertise to design specific products for the rural
economy. The most remarkable example in this context is the launch
of sachets which has transformed the rural market considerably as
packaging in smaller units and lesser-priced packs increases the
product‘s affordability. Another case is of Britannia with its Tiger
brand of low priced and conveniently packaged biscuits becoming a
great success story in rural markets. Companies also need to change
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the profile of their brand managers. A step in this direction like hiring
managers from the Institutes of Rural Management could probably go
a long way in improving the situation. Along with the cultural
dynamics, the needs and latent feelings of the rural people have to be
well understood before launching products in rural segments.
Marketers would do well to first understand this and then designing
products accordingly.
The data for the research study was collected from both primary and
secondary sources. Field survey was conducted by intensively
interviewing individuals of different families considering them as the
representative of the household. Primary data regarding socio-
economic characteristics like household size, age, income, gender,
occupation, education, brand preference, purchase behaviour and
consumer loyalty were collected by personally interviewing the
respondents using a structured questionnaire which was pre-tested
and redefined. To identify the mistakes and to check the correctness
of questions included in the questionnaire, a pilot survey had been
conducted by getting the questionnaires filled by hundred persons
from different socio-economic backgrounds. The respondents were
contacted individually and the objectives of the study were clearly
explained to them to ensure their cooperation and accuracy in their
responses. This revealed the shortcomings in it and provided ideas to
include several other important questions which were essentially
required to make the study comparative.
In this research study, Overall India is the sampling frame. India’s
few states ranks top in FMCG marketing and consuming products.
With a population of more than1 billion people, India is a big market
for FMCG companies. Around 70% of the total households in India
reside in the rural areas. The total number of rural households is
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expected to rise more in coming years, which represents the largest
potential market in the world. The e-business or e-marketing has
significantly evolved benefitting rural and urban economy with higher
gains.
The top six towns with highest spending FMCG products are selected
for the study. Indian FMCG industries have higher growth potential
when compared to the world, due to the growth stage of the industries.
The top five towns continue to lead; however, faster growing
categories will soon bring other towns and cities soon to join the race
and provide new avenues for growth.
Districts and union territory covered are Chandigarh
Chandigarh Municipal Corporation, Greater Mumbai, Chennai,
Ahmedabad, and Ludhiana with its most populated villages from
rural side are Raipur Khurd, Ghodegaon, Thiruppukuzhi, Kuha and
Jagirpur
A sample of 100 from rural markets and 100 from urban markets
(total 200 consumers from each district) is taken for the given
research study. One representative city or twon with one
representative highly populated village are selected. Income is also
selected as second base reason because income has a direct positive
effect on buying behavior of consumers. If income rises or falls,
consumer consume more or less accordingly. All districts are
arranged as per high to low per capita income.
The variables used to capture socio economic characteristics of
respondents are age, gender, occupation, size of village, income and
purchase decision. The primary data collected from rural and urban
consumers are quantified and collecting interview schedule, 100 rural
and 100 urban customers in different Districts of overall India.
Multiple-stage sampling has been used for selecting the sample. In
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the research study, probability systematic random sampling has been
used for collecting the data; it is also called an Nth name selection
technique. This method is used because under this procedure each
element in the population has a known and equal probability of
selection. Further, probability random sampling has been used for
giving equal probability to every unit.
The thesis concludes that the F.M.C.G. companies are working on
many different online strategies which will help them to maintain a
better relationship with their existing customers and will help in
brand building and customer loyalty. These strategies are formed in
accordance with these factors so as to increase the customer base as
well as to have a greater market share. The companies should
consistently keep on posting updates and alerts regarding the
brand/products to keep the consumers updated. As consumers
perceive companies using online marketing more reputed than those
using traditional media, companies should bring out more
innovations in their social media campaigns to keep up to their
consumers expectations.
F.M.C.G. companies need to make sure that the information they
provide online is credible to the core because consumers don‘t follow
a brand that showcase false information about itself or its products.
Companies need to consistently track the comments or reviews of
their products on various online platforms so that they can ascertain
any negative word of mouth going on and hence should try to resolve
the issues relating to it.
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6.2 Findings:
The study shows that every consumer in the market has their own
preferences for Branded and Unbranded goods. Consumers will be
looking for certain attributes before purchasing the products. The analysis
and interpretation shows the collected information from sample
respondents, which provide the clear understanding of the respondents‟
attitudes regarding various aspect of consumer behaviour about Fast
Moving Consumer Goods (FMCGs) or non-durable goods - purchase and
their consumption. Analysis of data has done through continuation of the
statistical tools which test the hypotheses. A brief account of the findings
is given below:
1. The study depicted that the households’ purchases a variety of goods
and services to satisfy his and his families wants and he is always
influenced in his purchasing activities by some considerations which
lead him to select a particular commodity or a particular retail store
in preference to others. So, household consumer buying is more
complex. Household purchases are likely to be influenced by
physiological, psychological and sociological, factors.
2. Every family and individual has physiological need such as hunger,
shelter, thirst, etc., which have to be satisfied for survival. In India,
because household consumers are having different characteristics
such as various religious, customers, and speaking different
languages. The study of consumer behavior is really important in the
present scenario because production has become sophisticated with
the advancement of science and new technology. Buying behavior is
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very much influenced by experience of their own and of neighbor
consumers and his family.4
3. The study includes the goods of FMCG of different categories like :
Oral Care, Hair Care, Skin Care, Personal Wash Soaps, Toilet
Cleaners, Dish/Utensil Cleaners, Floor Cleaners, Mosquito
Repellent, Fabric Wash, Food, Health and Beverages Products,
Bakery Products, Dairy Products, Beverages and Chocolates.
4. India's 2018 population is estimated at 1.35 billion based on the most
recent UN data. India, located in South Asia, is bordered by the Bay
of Bengal, the Arabian Sea, the Indian Ocean, Pakistan, Bhutan,
China, Nepal, Burma, and Bangladesh. India is the world's 7th
largest country by area and the 2nd most populous country with more
than 1.3 billion residents. 1 of every 6 people on the planet live in
India, and between the 2001 and 2011 censuses, the country grew by
17.7%, adding 181.5 million people. The country has doubled in size
in just 40 years, and is expected to unseat China as the world's most
populated country in the next couple decades. India's current yearly
growth rate is 1.11%.
5. The country as a whole has a population density of 412 people per
square kilometer, which ranks 31st in the world. In Mumbai, the
population density is 21,000 people per square kilometer
(54,000/square mile).
6. From the selected district of the country, from Chandigarh out of 100
selected urban households only 94 replied and from rural Chandigarh
only 86 out of 100 selected households replied. From Mumbai 90
households from urban out of 100 and 89 households from rural out
of 100 replied to questionnaires. From Chennai urban 92 households
4 Santosh---Ph.D.---GUG----2018---FINAL.doc
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and rural 80 households were selected. From Ahmedabad 93 urban
households and 88 rural households were selected lastly from
Ludhiana 91 out of 100 urban households and 87 out of 100 rural
households were selected.
7. It has been revealed that both, the rural as well as urban are spending
their major source of income on food-items, and then on consumer
items. The distribution of monthly per capita expenditure generally
are the same in the most of selected products, but rural people
concentrate less on education and neither met any expenditure on
rates and rents. It has been observed that the monthly income per
capita expenditure distribution is same to some extent and different to
another extent in rural and urban areas. The rural distribute their
63.70% monthly per capita only on food items. The marketers
therefore attract the consumers towards this by preparing the strategy
like e-marketing or basic rural marketing. The rural areas consumer
are moving towards spending on consumer goods and fuel, clothing
and footwear, and this also attract the multinationals to enter their
brands into the rural market.
8. Among the urban respondents, the top priority 36% is for money
making and spending while among the rural respondents is 44% for
food and welfare of family members. Notable is the higher priority
accorded for imparting professional education of children among
both semi urban and rural respondents.
9. The study revealed that large majority of urban respondents used
internet and social media as a medium of advertisement; newspaper,
magazine, television and outdoor media stood at second, third, fourth,
and fifth position. It is important to note that the sample respondents
of rural area were indifferent to urban sample respondents. Radio and
television was the important media for rural sample respondents as a
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source of advertisement or media. Analysis of the data also confirmed
that residential status of respondents has effect on the use of different
media of advertisement. The level of education and occupation of
respondents significantly affected the use of media.
10. It is observed that the 60.00% urban household consumers are
agreeing & 28.04% are strongly agreed that E-marketing is
necessary to catch the consumer’s attraction. The survey noticed that
as Colgate and Coca-Cola have shown that the hub-and-spoke model
works well for FMCG products because it addresses the inventory
cost and transportation infrastructure issues that are associated with
distributing products in rural emerging markets while also providing
for good product availability at the small-village level.
11. It is seen that there is a significant difference in the role of persons
influencing the decisions for buying Personal Care5, Cosmetic and
Toiletry Care; Household Care products except Food, Health and
Beverages.
12. It is revealed that there is a significant difference in the role of final
maker/s for buying Personal Care, 6 Cosmetic and Toiletry Care;
except Household Care products; and Food, Health and Beverages.
13. About the finalization of purchase decisions, it was observed that for
buying Personal Care; Cosmetic Care and Toiletry Care; and
Household Care products most of the people make final decision due
to their inner instinct. They were not influenced by anyone. They
themselves are decision makers‟. Role of children or spouse and
father or mother is almost same for taking final decisions for buying
products in rural and urban areas. And very less number of decisions
5 Maria-Joseph.pdf 6 Ibid
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is taken by family members jointly. But for buying Food, Health and
Beverages, rural and urban consumers took maximum decisions by
themselves. Father or mother, children or spouse have contributed
equally in rural and urban areas. But father or mother plays a major
role in rural areas where as children or spouse play/s a major role in
urban areas for buying the above mentioned goods. On the other
hand, family members together play a less role in buying products. It
is concluded that residential status of respondent has effect on the
finalization of purchase decisions by different members of family, as
well as level of education, occupation, and level of income of
respondents significantly affect the finalization of purchase decisions.
14. The study revealed that rural and urban areas, are influenced by
himself or herself, children or spouse and father or mother were also
influenced to respondents in purchase followed by influence of
friends/neighbours and relatives, whereas the shopkeeper was
considered the least significant factor. It is also concluded that
residential status has no bearing on the consideration of the
respondents as an influencing factor but the level of education,
occupation and level of income significantly affected the
consideration of the respondents.
15. From the study rural household consumers 54.18 disagree that e-
marketing encourage them to purchase household products but 25.11
also believe that e-marketing plays important role in stimulation but
to particular products like electronics like television, mobiles.
16. Factors motivating to total sample respondents towards the purchase
of Personal Care; Cosmetic and Toiletry Care; and Household Care
products viz. quality, size, more features, long lasting and company
brand image stood first, second, third, fourth and fifth position among
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the other factors. However, reasonable price and free offers were also
considered important factors in comparison to others.
17. Factors motivating to total sample respondents towards the purchase
of Food, Health and Beverages, viz. flavor, taste, freshness, protein
content/nutrition value/quality, size and company/brand image stood
at first, second, third, fourth and fifth position among the other
factors. However, reasonable price and free offers were also
considered important factors in comparison to others.
18. It is revealed that rural consumers buy same product again and again
due to its reasonable price for buying unbranded product/s as their
mean value is high in comparison to other factors of influencing.
Secondly, they are influenced by popularity of product and hygienic
packaging. Good quality is the least influencing factor for them for
buying unbranded product/s because they are inclined towards
buying products at a reasonable price. On the other hand, popularity
plays an important role for influencing the urban consumers because
mean value is high. The reason can be they have better market
knowledge which might be gained by social media and advertisement
and the advice of family members and relatives. Hygienic packaging,
reasonable price are next influencing factors for urban consumers.
The urban respondents are so much quality conscious. This showed
that they are less inclined towards the quality of unbranded products.
It is concluded that, there is a significant difference between the
preference of rural and urban consumers for buying unbranded
product/s because mean values of factors influencing them are
different.
19. It is observed that rural consumers buy the same product again and
again due to popularity of branded product/s as their mean value is
high in comparison to other factors of influencing. Secondly, they are
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influenced by hygienic packaging and easy availability. Reasonable
price and continuous use in the past are the least influencing factors
for them for buying branded product/s. On the other hand, good
quality and popularity play an important role for influencing urban
consumers to buy branded product/s because means value is high.
Hygienic packaging and easy availability are almost next important
factors for influencing the urban consumers. Continuous use in the
past is least important factor for them. It is concluded that, there is a
significant difference between the preference of rural and urban
consumers for buying branded product/s because mean values of
factors influencing them are different.
20. It is depicted that poor quality of product was considered the main
reason of switching over to another product by rural and urban
consumers because consumers‟ are now become more health
conscious. That’s why, for maintaining good health they do not want
to compromise with the quality of product. Another reason of
switching over to another product is non availability of
branded/unbranded products by urban consumers but here rural
percentage is low as compared to other reasons. It showed that urban
consumers are more inclined towards brand loyalty. Just like above,
availability of free gift / discount with new branded/unbranded
products, losing popularity, just for a change and friends experience
with new branded/ unbranded products are also considered effective
reasons of shifting for urban respondents as compared to rural
respondents. Higher price of branded/unbranded products, lack of
extra quantity and impressed by the advertisements of new branded/
unbranded products are considered effective reasons for rural
consumers as compared to urban consumers. The reason behind this
might be rural consumers are more price conscious. That’s why; they
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want to require some extra quantity at a same price or even at a less
price. Sometimes, they are more impressed after seeing the
advertisement of new branded/unbranded products which can satisfy
their above requirements. Manufacturing defects are the least
important reason of shifting from the particular product for both rural
and urban areas.
21. It is concluded that there is a significant difference between rural and
urban consumers in shifting from the particular branded and
unbranded FMCG products.7
22. The survey undertaken includes personal interview too of the urban
and rural household living in selected district under survey. The
interview of these household consumers gave the understanding that
even in these days most of people follow traditional marketing
methods to know the price, choice, usage of product. The best method
mentioned by consumer was advertising in television. Below graph
gives the attitudes of the consumers towards advertisements, here the
data in taken in general that is urban and rural household interview
information about the advertising affecting their preferences and
choices. One can clearly make out that urban consumers perceive
advertisements as a source of information and awareness, be it
general or towards TV commercials.
23. The survey noticed that almost 90 percent of the people from urban
sector uses social media for various reason but almost 96% of urban
consumers agreed that they use it for finding information about the
products, services and brands available in market. When compared
to rural consumers only 59% of rural consumers use social media for
finding about products and brands. Rural consumers were mostly
7 Maria-Joseph.pdf
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using social media for listening music and watching videos that is
74%. It is noticed that rural consumers usage of social is limited to
watching videos or listening music and for urban it’s mostly used for
finding products available online or brands available. Very few rural
household use social media for getting in touch with others or for
exchanging documents and files but in case of urban household
consumers almost all use social media for some or the other reason.
24. E-marketing or Internet marketing allows global marketing as it is
less expensive, makes marketing easier, can be sold and encash bills
anywhere, increases the choice of products and has vast availability.
Influencers influence the decision making process of a potential
consumer. The information and facilities are found to be limited to
only urban and semi urban areas only. Both sector survey consumers
find that Influencers can be advertisements, friends, relatives, third
party or it can be self-motivated also. In most of rural sector of
selected districts friends and relatives are the major influencers
behind decision making.
25. it can be concluded that E-marketing is the new entrant in the modern
marketing world of rural sector and therefore it is observed that over
all share of E- marketing is only 19 % in which 9 % is through online
marketing and remaining 10 % through Social media blogs, On-line
Forums and Social networking sites and traditional marketing tools
such TV commercials, print media and word of mouth marketing such
as family- friends- relatives accounts to major percentage in rural
areas. Traditional marketing has its deep roots in rural area
compared to urban consumers. The present rural sector customers
are curious about online marketing and wide range of products and
more discounts.
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26. It was revealed from the personal interview that out of selected rural
and urban respondents, 55 % feel that convenient of online
marketing or shopping is the important factor while only 45%
respondents in total consider it least important and agree with
shopping at selected shop. Saving of time, money and energy could be
played an important role behind this factor. This showed that there is
no significant difference between rural and urban consumers for the
consideration of this factor in selecting the shop.
27. It was revealed that urban respondents as compared to rural
respondents feel that reasonable price is not very important factor for
the consideration of the final selection of product. And only few rural
respondents as compared to urban respondents feel that reasonable
price is important and not so important factor. It showed that there is
a significant difference between rural and urban consumers for the
consideration of this factor in selecting the product.
28. It was showed that maximum number of rural respondents and urban
respondents admit that availability of credit facility is very important,
important and somewhat important factor for selecting the products.
But very few rural respondents as compared to urban respondents
admit that it is least important and not so important factor. It
concluded that there is a significant difference between urban and
rural consumers for the consideration of this factor in selecting the
products.
29. It can be concluded from the survey interview that rural consumers
whose family monthly income is below Rs. 5,000 have increased their
consumption for Personal Care products has increased their
consumption in last three years. The reason behind may be that
consumers are now influenced by the marketing strategies which is
adopted by marketers for improving their sales volume. Due to
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various programmes have been introduced by the government of India
for improving the standard of living and reducing the illiteracy rates,
this type of change has been observed. Those consumers who are
earning between Rs. 20,000 to Rs. 50,000, they are buying these
products since long. The reason behind this may be they have the
capacity to spend the money. Consumers‟ whose monthly income is
above Rs. 50,000 are less in numbers but they have been using
products from last 3 to 7 years. Out of 890 consumers few household
consumers have given their responses. This might be due they are low
family monthly income earners or they are having less awareness
regarding such type of products. In urban areas, almost all
respondents have given their responses i.e. 248. Consumers‟ whose
family monthly income is less than Rs. 5,000 are very less in number
for consuming these products and consumers whose family monthly
income is above Rs. 5,000 have increased their consumption since 8
to 10 years. This showed that urban consumers are more aware about
Personal Care products as compared to rural consumers. It meant
that there is a significant difference between rural and urban
consumers towards the longevity in using the Personal Care products.
30. It was revealed that respondents of rural areas have increased their
consumption since less than 3 years for Cosmetic and Toiletry Care
products. It is seen that respondents who have different family
monthly income are lying maximum in the range of less than 3 years,
which again focused that this could be due to more stressed imposed
by marketers towards marketing function.
31. It was revealed that 44.0% of rural respondents have no comment
upon the statement i.e. Brand recognition is the only Guarantee of
Quality as compared to 31.2% of urban respondents. 20.4% and
16.0% of rural respondents disagree and strongly disagree
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respectively this statement as compared to 29.6% and 21.6% of urban
respondents respectively. It shows that urban respondents are more
in numbers who are not agreed upon this statement. The reason might
be they think that there are various other factors existed that can
evaluate the quality of the product. It showed that there is a significant
difference between rural and urban respondents on believing the
above statement.
32. The personal interviews of the selected 890 household consumers
from rural and urban areas exhibited that almost 660 percent of the
total respondents prefer eco-friendly packaging because it is a well-
known fact that pollution has increased many times and to check upon
it or to control it, this is the best way to overcome such kind of serious
problem of our environment. Also very few persons in rural areas,
prefer to have only convenient packaging, might be the reason is all
other categories are much more important; like protective packaging
is provided by seller then there is a less chances of spoilage, damage,
evaporation etc. or even packing is more eco-friendly which is good
for everyone rather than to be more convenient packaging.
33. Thus, social networks have a role in influencing the behavior of
consumers in the virtual environment, particularly when the degree
of exposure of messages and the relation created between the variety
of information given and the consumer who is about to make a
purchase. It is strongly consider that the above generated factors are
very much responsible for influencing the consumers for trusting
online or social media platforms before considering buying an
F.M.C.G. product. These factors also have a substantial impact on
the perception of the customers towards F.M.C.G. brands as it has
come out that customers consider companies using online marketing
strategies as more innovative and reputed than others.
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6.3 Summarization:
The research thesis noticed that the technological revolution that has
occurred in recent years has impacted our daily life within a household in
a variety of different ways. New media technologies or E-marketing has
now become embedded in society and has resulted in major societal
changes. One of the very important social sectors that have been affected
most is the household. The goal of this study was to investigate if and how
new e-marketing of FMCGs have impacted on social and economic life of
a household. My main focus was centered on the household and if e-
marketing have the ability to bring the positive change in the behavior of
the household members. Firstly, my investigation process confirmed that
e-marketing of FMCGs are now an intrinsic part of family and household
life. This was evident as each household was immersed with a variety of
different digital technologies, everything from mobile phones to home
computers in searching new FMCGs products and its discounted prices
and even new brands. It was clear that they play a fundamental role in
daily life. My research shows that new media technologies and e-
marketing are having a negative impact on social interaction within the
household in terms of “time allocation patterns, in the choice of social
functions, in the transmittal of cultural values, and in overall human
behaviour”.
Although my study provides important and very interesting findings
regarding the impact of e-marketing of FMCGs on social and economic
life of rural and urban household, there are a number of limitations in this
study. My data was obtained by focusing my attention on five selected
highest expenses on FMCG products districts from India. Rural and urban
talukas were selected randomly and questionnaires were distributed and
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interviews were conducted in each household. While a greater
understanding and in-depth knowledge was attained, expanding the
sample would yield a greater range of findings. If there were no time or
cost restraints in conducting the investigations, a greater range of
households could be investigated. A number of direct observations could
be conducted in each household over a longer period of time. This would
allow me to observe a larger number of individuals within each household,
beyond the family unit. Initially, this is what I set out to investigate,
however, in each household there were no other individuals present apart
from the family. More direct observations would allow me to obtain a
clearer picture and to see how e-marketing and social media technologies
impact on friends and other social actors outside of the family unit.
Additionally, this would permit me to build up a better relationship with
each participant and I could gain more from them over a longer period of
time. I could also interview each participant, instead of being confined to
just few selected rural and urban sectors from each district.
6.4 Suggestions:
In the light of the above findings, the following suggestions are offered:
1. Usually rural consumer markets are mainly influenced by the
traditional marketing practices when compared to urban markets. It is
observed that rural consumer behavior depends on age old beliefs and
easy accessibility with the local retailers and wholesalers markets. The
rural consumers think local markets are hassle free and dependable
than E-marketing. The E-marketing companies needs to focus more on
educating rural consumers about the benefits of online marketing and
door step deliveries with fast response for grievances. In the county
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like India the rural FMCG markets are more prices sensitive. The rural
marketing methods require different branding strategies which include
low cost manufacturing and cost effective promotional campaigns
along with efficient distribution channels.
2. The most attractive price plank can atomically promote the FMCG
products in rural areas. But sometimes urban consumers are not
worried about pricing when it comes to brands and superior quality of
the goods. The rural consumers primary concern will be value for
money for the products they intend to purchase, feel good experience
with consumer services and quality of the products. The brand building
exercise and promotions should ensure rural consumers to trust the
new products launched in the market and they should feel the products
they trying to buy are not inferior products at low price. The rural
consumers may be not be very much particular about branded products
when compared to urban consumers, yet end of the day every consumer
be it urban or rural consumer wants to purchase products with good
performance, quality and reliability.
The key for successful rural marketing strategies involve quality of
products with low price. The E-Marketing might have little advantage
in rural markets when it comes to providing the goods with competitive
pricing because they are surpassing all the middle men and retailers in
the marketing chain. This kind of direct and door step E-marketing
needs effective distribution channels and awareness of changing rural
marketing trends.
3. The FMCG companies should provide more durable products to rural
consumers with quality and more quantity with competitive pricing to
sustain in the consumer markets for long haul. The resent trends
showed that rural consumers are also getting more awareness in terms
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of brands, usability, safety and packing because of print media,
Television and Online information through internet. The market
research programs and surveys will help FMCG companies to develop
better products and marketing strategies to cater the rural consumer
needs along with strengthening the distribution system will ensure more
market penetration.
4. More Innovative ways of marketing and promotions could help in the
increase rural market share. Putting up little stalls in market weekly
bazars will help to reach more rural consumers. Distribution of sample
products to consumers in the rural areas to try out of the products will
help the rural consumers to identify with the products more. The
demonstration of product services will help rural consumers have
firsthand experience. The feedback on the sample products will help
FMCG companies to develop more appealing pricing, packaging and
promotional strategies that are targeted to increase rural sales. All
these ground work will help the FMCG E-marketing companies in
longer when a consumer becomes comfortable with product
identification and eventually they will get used to ordering online.
5. India is witnessing the new digital revolution with the help of Indian
government initiatives aiming to strengthen the E- commerce and
encouraging rural population to be the part of Digital India campaign.
There are two segments of rural consumers we can identify in the rural
consumer markets. One segment of people is above thirty five years
who are still comfortable with traditional purchasing practices. Most
of them are having very little literacy rate. This makes the E - commerce
and E –marketing companies to depend on more audio visual methods
to educate the customers and promotion of the products. For this kind
of segment of people print media promotions might not be more
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effective. The other segment of rural consumers are more young
consumers and comfortable with the changing technological trends.
The young rural consumers are slowly adapting to the E-marketing
practices. The low price smart phones and availability of good band
width of internet at affordable prices propelling the digital dream of
Indian e-marketing arena.
6. The rural consumers mostly depend on agrarian income. The spending
capacity of rural customers comparatively less when compared to
urban consumers because the agrarian income of rural consumers are
usually seasonal and fluctuating as it also depends on crop eliding.
During the crop season more cash flow can be observed in the rural
markets. Majority of the rural consumers having low per capita of
income. This emphasis the need for developing and designing low
priced products with more durability, capable for rough handling and
specifically suitable to the rural markets. The brand names of the
products sold in rural markets should be easy to remember and
pronounce. The FMCG companies should focus more on maximizing
the seasonal sales and make the rural consumers to stretch their buying
capacity. The agriculture products are two types one is perishable
products and nonperishable products with little longer duration. When
it comes to rural agriculture E-marketing farmer needs proper
planning and distribution channels to market their products for various
segments of consumers. The formers can advertise their products on
social media or on online product trading web sites. Tenders can be
collected though online and supply and demand can be balanced. The
governments are proving seller and buyer market yards to remove
middle men. This will maximize the profits of the farmers. With the help
of online marketing and smart phone applications the farmers can
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directly do business with FMCG companies. Later those FMCG
companies can cater the needs of end users and consumers by their
direct selling or by E-marketing methods.
7. The corporate FMCG companies need to identify the rural consumer
needs and rural consumer behavior. Most of the times rural consumers
are not loyal to brands unless they find them more durable, useful and
affordable. Rural consumers depends on word of talk and mouth
publicity about the products. The local resellers and fellow consumers
influence the buying trends in rural area. Print media is not much
effective in rural areas because of low literacy rates and this makes
FMCG companies to find other alternative methods to influence the
rural consumer behavior along with educating the consumers to make
them understand that they have other choices of products they can trust
and buy rather than just blindly following tier old buying habits. Again
this can be backed up with brand building exercises and keeping the
quality of the products at par with affordable price along with better
service support. The traditional retailer selling having competitions
with online E-marketing. Online E-marketing companies are expanding
their revenue share in rural areas with direct door to door delivery with
competitive pricing with lot choice for consumers to choose from the
long list of brands. The price has started among the E-marketing
companies and local whole and retailers. The E-marketing able to
provide banded products to low cost because of their modus of
operations by removing middle men in the supply chain. To withstand
this the local retailers should focus on maximizing more consumer
satisfaction and try to retain old customers with little discounts,
attractive schemes, and door deliveries to provide easy and happy
buying experience. The local wholesalers and retailers should
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strengthen their customer service team for more quick service support
and deal the consumer grievances effectively. The local wholesalers
and retailers can also take orders on phone or through any customized
android applications like Whatsapp or other Applications to reach
more local customers with the help of technology. This will help local
retailers to be in the game and cope up with changing consumer needs.
8. Companies would also do well to have a proper sales and distribution
network. In terms of sheer reach the companies can gain significant
competitive advantages as the rural market is highly fragmented and a
brand needs to be on the shop shelf before it can be sold. Companies
should also make sure that the prices of their products are not pushed
up because of a channel of middlemen who are neither required nor
add any value to the product. The rural market remains quite price-
sensitive and thus squeezing costs at every stage is of vital importance.
Some FMCG giants like HLL are in process of enhancing their control
on the rural supply chain through a network of rural sub-stockists, who
are based in the villages only. Apart from this to acquire further edge
in distribution HLL has started Project Shakti in partnership with Self
Help groups of rural women.8
9. Finally an effective rural strategy for FMCG companies must include
the use of traditional media for creating awareness about their
products in the rural markets. The need for unconventional media
arises as the mass media is too glamorous, interpersonal and
unreliable for a rural consumer. The traditional media on the other
hand with its effective reach, powerful input and personalized
communication system will help in realizing the goal. Besides this when
8
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the advertisement is couched in entertainment it goes down easily with
the villager.
10. In rural areas local retailers and wholesalers at times provide credit
to consumers. The personal repo build between wholesalers and
retailers over the period of time with the local consumers on person to
person basis influence the credit policies and buying habits. The main
issues related with rural markets are malpractices involved in
businesses practices and exploitation of uneducated consumers by few
wholesalers and retailers. But the accurate information of price list,
quality of products, guarantees, quick customer services and mainly
confidence in the good business practices of the retailers and
wholesalers will build more loyal consumer base over the period of
time. The retail marketers should adopt unique promotional methods,
strategies those are specific and suitable to that region to compete with
E-marketing companies. The local consumer sensibilities, buying
habits, changing consumer behaviors and the cash flow in the markets
will help in developing the business plans for rural retailers,
wholesalers as well as online FMCG E-marketing companies. The
consumer surveys, product feedbacks and audio visuals promotion
methods will help the shake holders of the rural markets be it rural
retailers or E-marketing FMCG companies to know the pulse of the
consumers and they can adjust their plans and goals according the
consumer needs. Good ambience, proper lighting systems, better
advertisements, customer friendly staff and good location of the shops
will attract more customers in rural setup. In rural areas the impact of
word of mouth publicity is more. So it is advised to all retailers to adopt
good business practices and that will help in the business growth.
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When it comes to E-marketing FMCG companies they are also proving
EMI schemes to online consumers with credit cards. It also like
advance credit to online consumers provided by the E-marketing
FMCG companies. The FMCG E-marketing companies always focus
on costing on the end user products with by passing various distribution
channels and more proactive and cost effective promotional methods.
The E-marketing companies are trying to provide more transparency,
fair price policy, quality of products with good range of branded
products to choose. It is encouraging rural consumers to move towards
online shopping. The rural India slowly getting comfortable with online
shopping with the ongoing online digital revolution in India. The urban
consumers are already taking the advantage of online shopping and
they experiencing the ease of doing business with FMCG E-marketing
companies. A low unit price is always a desirable factor in selling and
promoting products in the rural markets. The E-marketing FMCG
companies are trying to maintain centralized depots for stocking the
inventory at nearby satellite villages which reduces the retailing costs
and distribution costs.
11. Form the government side they should ensure to develop and execute
efficient regulatory, monitoring mechanisms such as Consumer Forums
to protect consumer interests, establishment of government and
private Forensic Food Laboratories to check adulteration in the
products and policies directed to support manufacturing sector. All
these regulatory systems are responsible to protect the interests of all
the shareholders such a FMCG companies who are responsible for the
production of the products, the traditional wholesalers and retailers
markets, E-marketing companies and consumers. The governments
should concentrate on developing better infrastructure facilities such
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as roads and marketing yards and transportation channels to help the
manufacturing sectors, FMCG companies and E-marketing companies.
The current Indian government simplified the rules to attract more
foreign investors to boot the cash inflow in the manufacturing sector.
The Make in India initiative taken by the Indian government directed
towards strengthening the small scale manufacturing sectors and
startups. Other initiatives like Mudra Scheme to encourage the small
scale woman entrepreneurs, supporting the Anganvadi groups with low
interest rate loans aims to improve the woman empowerment rate in the
country. The Government should encourage rural marketing by giving
tax relief and providing crop insurance to framers. The establishment
of low rental storage and warehousing facilities in rural areas will
improve the rural marketing share and maximizes the profits to rural
producers by capturing other than the local markets. The resulting
ripple effects include the rural consumers having the befit of getting
local products for more affordable prices and more urban markets can
be captured by the rural product producers.
12. The market variables like age, gender, income, social factors,
emotional factors and consumer behaviors and global trends and
product promotion factors can influence the marketability of the
products. The sales for the products can be increased by creating
positive shopping environment; attractive discounts can pull the rural
as well as urban to consumers to the shops or to the malls to buy the
products. By having efficient, smart and hardworking sales team can
stimulate buying behavior of the consumers and in turn it helps to
trigger the impulse buying with the walk in consumers. Both traditional
FMCG companies and Online E-marketing FMCG companies are
going for promotional activities such as buy 1 get 1 free offers, seasonal
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discount sales and clearance sales. Local Online FMGC companies
like Flipcart, Snapdeal Bigbasket and Global Online companies like
Amezon, Alibaba are increasing their urban makert share as well as
rural market share with their cost effective distribution channels along
with innovative methods promotion and in India. These Online FMCG
companies are giving stiff competition to traditional sellers. Credit
cards, Debit cards, ATMS and 24/7 customer services can also
influence the consumer behaviors. In recent time’s Indian government
under took the project to create zero balance bank accounts for the
farmers and other rural people in order to bring them into the digital
stream of emerging India. They are also provided with RUPAY credit
cards to encourage them move towards digital transactions. India
witnessed a historic event in 2016 that is demonetization. It also pushed
the rural public towards online shopping. The E-Valets like PAYTM,
SBI BUDDY and MOBIVIK also becoming handy tools for consumers
when it’s comes to secure online shopping. Just recently India
undergone biggest tax reforms and had major policy changing.
Recently a GST (GOODS SERVICES TAX) was introduced in India to
support the cause one India and one tax. It’s aimed to help the
manufactures, sellers and consumers with simplified tax returns
procedure like on stop payment for all taxes. All the economic reforms
make India as one the economically developing country in the world
with a large consumer base. Many local and global companies are
trying to invest in Indian manufacturing sector because of ease of doing
business initiatives. The resent reports showed that ease of doing
business index of India phenomenally improved that making India is
one the lucrative and safe business destination in the world.
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6.5 Recommendations for further Research:
The present research study was limited to selected districts of India
selected on the base of top 5 town and cities with highest expenses on
FMCG products. The study can be extended further by identifying
other districts of country or other states of India.
An in-depth study can be done by taking all categories of FMCG
products as the research is done only taking few FMCGs in mind.
The branded products were also limited in study.
The comparison can also be made for top leading companies of FMCG
products.
According to the field survey it is noted that 73% of urban and 23% of
rural follow FMCG brands on internet and social media. The latest
internet boom in India and smart phones getting cheaper casing ripple
effect in the rural e- marketing. Slowly the rural market consumers are
more interested to explore e-marketing practice. This is good sign for
all FMCG companies and they can expand their market share in the
rural markets. It is advised to all FMCG companies to focus more on
rural markets and adapt with the changing consumer habits of rural
consumer when it comes to new product design or launching or
marketing. The FMCG companies can balance between traditional
marketing as well as E-marketing.
From the field survey the effect of TV commercial medium accounts
to 31% and marketing influenced by friends and relatives counts to 35
%. Whereas marketing though print medium such as papers and
magazines attracts a share of 15 % only in rural areas. We can say that
E-marketing is the new entrant in the modern marketing world of rural
sector and therefore it is observed that over all share of E- marketing is
only 19 % in which 9 % is through online marketing and remaining 10
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% through Social media blogs, On-line Forums and Social networking
sites and traditional marketing tools such TV commercials, print media
and word of mouth marketing such as family- friends- relatives
accounts to major percentage in rural areas. This shows more for more
scope for E-marketing in the rural area for FMCG companies. The
change in the rural consumer habits and availability of cheaper smarts
phones and cheaper internet data plans making the rural consumers to
explore the E-marking facilities provide by the FMCG companies. The
secure online banking systems and online wallets like PAYTM or
PhonePe making the online tractions and online buying made easy and
secure. The Digital India moment gave a push to the Indian E-
marketing practices and digital tractions. The rural consumers are
encouraged to be part of the Digital moment and they are educated
about ease of doing business online
There is still traditional marketing has its deep roots in rural area
compared to urban consumers. The present rural sector customers are
curious about online marketing because of wide range of products and
more discounts available online with Monthly installment schemes
with credit cards and debit cards. The online E-marketing companies
like Amazon and Flipcart and Walmart coming with up more
diversified strategies to reach rural consumers with strengthening their
supply chain mechanisms along with branding strategies. It observed
with the filed study that rural consumers getting ready to take the
advantages of E-marketing and ease of doing business online. We can
recommend to all FMCG companies to explore the new rural markets
with the tools of E-marketing because this is the right time for the
FMGC companies to expand their market share in rural areas.