Rural Markets are defined as those sections of overall market of any economic system, which are distinguishable from the other types of markets like stock market, trade good markets or Labor economic sciences. Rural Markets constitute an of import section of overall economic system, for illustration, in the USA, out of about 3000 states, around 2000 counties are rural, that is, non-urbanized, with population of 55 million. Typically, a rural market will stand for a community in a rural country with a population of 2500 to 30000.
The nose count of India defines rural as any habitation with a population denseness of less than 400 sq.km where at least 75 % of the male working population is engaged in agribusiness and where there exists no municipality. Of the about 6.4 lakhs small towns in India, merely 20,000 small towns have population more than 5000. Leaving aside HUL and ITC most companies in FMCG sector would specify rural as any topographic point with a population up to 20000. Similarly lasting and agri-input companies would see any town with a population at a lower place 50000 as rural.
But, FMCG and consumer lasting companies are sing a district as a rural market which has more than 20,000 and below 50,000 population. Harmonizing to them, class-II and class-III towns are considered as rural. Harmonizing to the nose count of India 2001, there are more than 4,000 towns in the state that are categorized as Class II and III Towns based on the population. Size of rural market is estimated to be 42 million families and rural market has been turning at five times the gait of the urban market.
Harmonizing to
Definitions
Restrictions
Censu
Village: Basic unit for rural countries is the gross small town, might consist several crossroadss demarcated by physical boundaries.
Town: Towns are really rural countries but satisfy the undermentioned standards.
Minimum population & gt ; =5000
Population & gt ; =400 sq. kilometer.
75 % of male population engaged in non-agri activity.
Term ‘rural ‘ is non defined. The definition does non stipulate the population strata.
Term ‘rural ‘ is non defined. The definition does non govern out 5000+ population small towns.
Run batted in
Locations with population up to 10000 will be considered as rural and 10000 to 100000 as semi-urban.
It does non include 10000+ population small towns in rural definition.
In the contrary, the definition includes 5000-10000 population towns in rural.
NABARD
All locations irrespective of small towns or town up to a population of 10000 will be considered as ‘rural ‘ .
Village and town features are non defined.
Planing Commission
Towns with population up to 15000 are considered as ‘rural ‘ .
Town features are non defined.
Sahara
Locations holding stores commercial constitutions ‘ up to 10000 are treated as rural.
Population standards and other features are non taken into consideration.
LG Electronicss
The rural and semi urban country is defined as all other metropoliss than the 7 tubes.
Beginning: Rural selling ( Kashyap,2008 )
Harmonizing to LG Electronics Managing Director Moon B. Shin, “ In footings of population and Numberss of families, rural has become the hereafter. Disposable incomes in rural countries have gone up well, chiefly because the domestic market has maintained a healthy growing rate, despite the recession worldwide. Over the following five old ages, as the economic system continues to turn, we expect disposable incomes to travel up even farther. An mean urban household income is about $ 2,000 yearly, while an mean rural family income is $ 1,000. Rural disbursement is, of class, dominated by necessities, which means disposable income is still little but the figure of families is big. ”
Families and houses over clip in rural parts
Year
No. of families ( In million )
1981
90.9
1991
111.6
2001
138.2
Beginning: -1. Central Stastical Organisation, 2004
2. Census of India,2003
EMERGENCE OF RURAL MARKET
The growing narrative of India is now distributing itself to India ‘s backwoodss. The rural consumer market, which grew 25 per cent in 2008, is expected to make US $ 425 billion in 2010-11 with 720-790 million clients, harmonizing to a white paper prepared by CII-Technopak, in November 2009. The figures are expected to duplicate the 2004-05 market size of US $ 220 billion.
With a population already in surplus of one billion people, our state has caught the oculus of MNCs across the Earth as a topographic point of chance for researching new markets. Whereas India has parts of their population that would be considered affluent or in-between category by Western criterions, a much greater per centum of India ‘s population is low income. They ( Rural Indians ) spend money, live, and usage merchandises otherwise than the states where most transnational corporations originate ( Prahalad Lieberthal, 2003 ) . Rural countries exemplify these differences. Understanding the features and issues that make the people and the market in rural India unique can assist corporations to come in this market with success. The cardinal features define the term rural, find the sum and flow of income, and find the types of merchandises and bundles that are typically used in rural India.
Urge TO GO RURAL
Gandhi, the male parent of modern India, believed that the state ‘s future ballad in her small towns. These yearss, every major concern group that plans to travel into the backwoods would hold. There are many grounds that have urged the FMCG companies to come in the chartless district of rural India. Few attractive forces are:
Large POPULATION
The rural Indian population is big and its growing rate is besides high. Over 70 % India ‘s one billion plus population lives in around 640,000 small towns in rural countries.
Therefore it shows the great potency rural India has to convey the much needed volumes and assist the FMCG companies to bank upon the volume goaded growing.
GROWTH IN RURAL MARKET
The buying power in rural India is on steady rise and it has resulted in the growing of the rural market. The market has been turning at 3-4 % per annum adding more than one million new consumers every twelvemonth and now histories for near to 50 % of volume ingestion of FMCG. The growing rates of tonss of FMCGs are higher in rural markets than urban markets.
In merchandise classs like lavatory soaps, talcum pulverization, cooking oil, vanaspati ghee, tea, coffin nails and hair oil, the portion of rural market is more than 505. The tabular array above indicates the jutting market size of FMCG merchandises in 2001 – 02 and 2006 – 07 based on the one-year growing rates.
GOVERNMENT POLICIES
The Union Budget for 2010-11 has hiked the allotment under the National Rural Employment Guarantee Act ( NREGA ) to US $ 8.71 billion in 2010-11, giving a encouragement to the rural economic system.
Industry Overview:
( Beginning: The Analyst, Sep.2010 )
The unwritten attention market can be segregated into toothpaste ( 60 % ) , tooth powder ( 23 % ) and toothbrushes ( 17 % ) . While 60 % of toothpaste is sold on the household platform, around 35 % is sold on decorative propositions. On the other manus, while tooth powder histories for 52 % of the market, ruddy tooth powder histories for 40 % and black tooth powder histories 8 % . The incursion degree of toothpaste/powder in urban countries is 3X that in the rural countries. The unwritten attention market, particularly toothpastes, remains under penetrated in India ( with a incursion degree below 45 % ) – ( IBEF, The great Indian Bazar ) . Traditional stuffs such as nim trees, baccy coal etc. are popular for cleansing in the rural countries.
Frequency of use for toothpaste is merely 1.5 times among other consumers, compared to 2 times in the developed universe.
Per capita ingestion of toothpaste in India is one of the lowest in the universe ; it presently stands at 70 gms as compared to 300 gram in Europe and 150 gram in Thailand and the planetary norm of 362 gms. It is because 74 per centum of our population live in rural countries and are non good versed with personal wellness and hygiene. The incursion degree of this rural section is at a depression of 30 per centum, which means that merely 200 million of our 740 million rural population uses toothpaste ( Equitymaster.com ) .
The industry is really competitory both for organised and smaller regional participants. ( Indian Brand Equity Foundation, The great Indian Bazar ) .
Toothpaste Market In India
Toothpaste market in India is deserving Rs 2200 Crore ( 2006 ) .
In India, per capita toothpaste ingestion stood at 74g in 2005, which is amongst the lowest in the universe, compared to 350g and 300g in Malaysia and Vietnam severally.
Toothpaste have a state broad incursion degree of 50 % .
Rural: 39 %
Urban: 75 %
Oral hygiene continues to be under aggressive competition, with gross revenues increasing by a modest 3 % in current value footings in 2006 to Rs. 2,400 Crores. Toothpaste accounted for a humongous 83 % of value gross revenues.
HLL ‘s market portion in the dental attention market has grown from such a low 5 % in 1979 to an impressive 36 % today, whereas Colgate-Palmolive has been seen its market portion diminution from a ruling 75 % to a fighting 56 % .
Charcoal, neem sticks, chaff, salt and pulverization mixtures have been some of the traditional signifier of unwritten hygiene merchandises used in rural India. But these merchandises are losing favor, particularly due to the attempts of many organisations and companies, foremost among them, Colgate. The company claims to hold persuaded about 300 million people into utilizing unwritten hygiene merchandises in the state for the last 25 old ages ( The COLGATE Case Study, Oct. 2010 ) .
Given the low per capita ingestion and incursion rates, toothpaste demand is chiefly being driven by the overall market growing ( which is 8-10 % ) . Toothpowder growing is besides being driven by the rural section.
Sections:
As per India Infoline Sector study, approximately 60 % of toothpaste in India is sold on household platform ; there is individual toothpaste for the full household. Specialized toothpaste such as for kids has been available in India merely in last 2-3 old ages ( chiefly imported merchandises ) and use is highly low. About 35 % of toothpaste is sold on decorative propositions. These are targeted chiefly at immature consumers and upper urban category on the proposition of fresh breath, white dentitions and functional benefits of commanding plaque, forestalling pit etc. There is a niche market ( 5 % of entire ) for toothpaste with curative benefits. Toothpaste is besides segmented based on merchandise properties as White, Gel, Herbal, etc. Some merchandises are besides available as a combination of both Whites and Gel.
Popular Section: – Colgate Dental Cream, Pepsodent Declining
Low Price Battalions: – Cibaca, Babool Turning
Niche Merchandises: – Ayurvedic and Sensitive toothpastes Stagnant
Freshness Section: – Colgate MaxFresh, Close Up, Anchor Gel Turning
Price-Based Sections: –
Regular Section: 100 gram: Rs 25-30
Low Price Section: 100 gram: Rs 14-20
The Lower Price Point section histories for around 25 % of entire class volumes. Regional and little trade names from the low priced section are expected to execute good because they are frequently near to the market, respond faster to alterations and are willing to larn from their errors.
Merchandise
Colgate
Colgate has been present in the domestic unwritten attention market ( of India ) for the last 70 old ages.
A dominant place in the toothpaste section with a 48 % market portion in the domestic market.
1.5 times the 2nd largest participant.
Was acquired by Colgate in 1994 from Ciba Geigy.
Today the company has two chief trade names in the toothpaste section ‘ Colgate and Colgate Cibaca.
Colgate Cibaca has risen to go the 4th largest toothpaste trade name in the state in volume footings after Colgate Dental Cream, Pepsodent and Close-Up.
Pepsondent
Brand of Hindustan Unilever Ltd ( HUL, once HLL )
In a worsening toothpaste market, HUL has managed to turn its trade names and this has been attributed to Pepsodent ‘s value proposition being redefined.
Pepsodent ‘s portion has been mounting steadily from 15.5 per cent in the last one-fourth of 2002 to 16.3 per cent in the one-fourth stoping June 2006.
HUL ‘s Dental insurance strategy, being launched through a partnership with the New India Assurance, offered a dental insurance of Rs 1,000 on purchase of any battalion of Pepsodent.
Anchor
Anchor belongs to Anchor Health and Beauty Care ( AHBC ) , a portion of the Anchor Group ( shapers of Anchor Electrical switches ) .
Anchor White Toothpaste was positioned as India ‘s first British Dental Health Society certified 100 per cent vegetarian toothpaste, in 1997.
Anchor and Ajanta monetary value their offerings at more than 40 % price reduction, giving the market leaders a tally for their money. These low priced rivals accounted for more than 80 per cent of the turning ‘discount section ‘ .
Close UP
Unlike the typical opaque, mint-flavored toothpaste of the clip, Close Up debuted in 1967 as a clear ruddy gel with a spicy cinnamon gustatory sensation and gargle right in the toothpaste.
A alone trade name individuality was developed, with Close-Up positioned as the toothpaste that gives people assurance in those really “ up near and personal ” state of affairss.
First toothpaste in US to unite gargle and toothpaste in one expression
First gel toothpaste in the universe the flouride in Close Up called monofluorophospate, makes the full tooth construction more immune to detain.
Top 5 Brands – Market Share ( 2006 )
Colgate Dental Cream 34 %
Close-Up 14 %
Pepsodent Complete 10 11 %
Colgate Cibaca Top 5.7 %
Colgate Fresh Energy Gel 3 %
Other Brands 32.3 %
a. Anchor, Babool, Ajanta, etc
Market Share Of Major Players:
Company
Market Share
Colgate Palmolive Ltd
52 %
HLL
26 %
Dabur
13 %
Beginning: The Analyst, Sep 2010
LITERATURE REVIEW:
Consumer behavior is a set of actions straight involved in obtaining, devouring, and disposing of merchandises and services including the determination processes that precede and follow these actions ( CONSUMER BEHAVIOUR, Engel & A ; Blackwell, Sixth edition, Pg.No.3 ) . Consumer behavior refers to the grounds why clients buy, their pick standards, when, how and where they buy. It is the behavior of persons when purchasing goods and services for their ain usage or for private ingestion.
Consumers make merchandise picks based on which combination of merchandise attributes best suits their demands based on dimensions of value, cost, and anterior satisfaction ( Kotler, 1997 ) .
Keller ( 1993 ) has classified trade name associations into properties, benefits and attitudes. Attribute is defined as descriptive characteristics that characterise a merchandise or service ( e.g. physical features or merchandise packaging ) , benefits may be defined as the personal value consumers attach to a merchandise or service and attitude refers to consumers ‘ overall rating of the trade name i.e. his/her wishing or disliking.
There is an effectual impact of merchandise and service quality on Customer Satisfaction, trueness and committedness. ( Hazra May 2010 ) .
After carry oning a little research in the rural countries COLGATE concluded with five things that were common in all their rural consumers across India, they were: –
Rural consumers are trade name loyal. They have disposal income ( i.e. because their demands are limited, so lesser range to pass. )
Literacy degree is on an addition.
Aged individual in the household have the determination authorization.
If a trade name is turned down in a family in a small town, the whole small town Oklahoman or subsequently boycotts the trade name.
Several comprehensive theories/models have been developed in the field of consumer behaviour ( Engel et al. , 1968 ; Engel et al. , 1995 ; Howard and Sheth, 1969 ; Nicosia, 1966 ) . Models have been developed for specific contexts, such as for information processing ( Bettman, 1979 ) and household determination devising ( Sheth, 1974 ) .
Consumer behavior in rural market: ABCD Paradigm ( Rani, S.Sakthaivel, Jan2010 ) proposed that there are four phases of purchase and ingestion procedure. These are
Entree
Buying behavior
Consumption features
Disposal
The first measure which provides Access to the products/service for consumer within rural countries. It is related to physical entree every bit good as economic entree.
Economic Access refers o the issue of affordability of products/services for the rural market.
Although the per capita national income in India is merely $ 270 per twelvemonth ( Aswathappa, 1991 ) yet there is besides a booming group of upper and upper-middle category consumers ( Gandhi, 1985 ) . The big population base and higher disposable income would decidedly be an advantage to sellers. Deriving physical entree to rural consumers is by and large a map of the distribution system within the rural market and the substructure of the rural. It is a well-known fact that distribution systems in rural India.
The 2nd phase which is “ Buying behaviour ” encompasses all factors impacting on determination devising and pick within the market. These factors include attitudes, perceptual experiences and consumer responses such as trade name trueness.
The 3rd phase “ Consumption features ” says that specific products/services that are purchased and consumed may be different.
The 4th phase “ Disposal ” refers to the behavior of consumer after purchasing and devouring the merchandise. Most consumers, including the rural consumers, are going more environmentally witting and traveling off from throw-away merchandises. Hence sellers need to plan systems to ease the safe disposal, resale, recycling or remanufacturing of merchandises. They must besides run into their societal duties particularly in relation to public safety and environmental pollution.
Aim OF THE STUDY:
The followers are the chief aims of the survey ;
To determine the factors impacting purchase determination.
To analyze the trade name trueness of toothpaste consumers.
Hypothesis
RQ: To determine the factors impacting purchase determination.
H1: Purchase is non influenced by any external enforcement.
H2: Properties of the toothpaste is positively related with purchase.
RQ: To analyze the trade name trueness of toothpaste consumers.
H3: Rural consumers are non trade name loyal.
H4: Rural consumers are store loyal.
Methodology:
Methodology is based upon the primary informations. The information is to be collected with the aid of questionnaire. Questionnaire will include two chief subdivisions relevant to the dimensions of the survey. The first subdivision will mean to determine the factors impacting purchase determination of toothpaste in rural market ( Dimension 1 ) . The 2nd subdivision will be designed for understanding the trade name trueness towards toothpaste consumers in rural market. The questionnaire would be based upon likert graduated table.
The sample of about 100 respondents would be selected. The graded sample would dwell of about all the aspects of rural consumers.