There are several myths about rural consumers that marketers should avoid: 1) Rural consumers are not homogeneous and have diverse tastes and preferences. 2) They seek value for money and quality, not just low prices. 3) They are aware of brands and can differentiate products, due to increased literacy and media access. Some marketers may exploit rural consumers by charging undue high prices, selling fake products, or providing misleading information. Effective rural marketing requires understanding key differences from urban areas, including diverse consumer bases, product usage, and appropriate communication strategies.

1. Myths about Consumers in Rural Areas
There are some myths about the Rural Consumer. Rural marketers
need to know the real picture to develop an effective strategy.
Following are several myths related to the rural consumer:
• Buy only low-priced products
The rural consumer seeks value for money. That doesn’t mean they
only buy low-priced goods. They make purchase decisions based on
quality, functionality, and product availability.
• Homogeneous consumer base
Marketers have a misconception that all rural consumers are
homogeneous. But research reveals that in rural areas consumer
base is diversified. Their taste and preferences differ from one
another.
• Buy whatever the companies offer to them
Consumer brand loyalty makes marketers think that consumers will
buy anything they offer. But, companies must make continuous
initiatives to attract and retain their consumers.

2. 4) No brand awareness
With the increase in literacy rate and widespread
use of the Internet and Broadcast media,
consumers are aware of the products.
Consequently, they can differentiate among various
brands and products available in the market.
5)Many uses of products
It is perceived that rural consumers use a product in
multiple ways. This may be an outcome of the
incomplete information provided to the user about
the products.
The marketer must convey the correct usage and
directions for the use of the products

3. The exploitation of Rural Consumers
Some marketers may even exploit innocent consumers
residing in rural areas in the following ways:
• Wrong measurement of the goods.
• Undue high prices of the products are charged.
• The sale of fake and duplicate products in the rural
markets.
• Misguiding consumers by giving wrong product
information.
• The sale of expired medicines in the market.
• The dominance of the suppliers, producers and
officials by creating groups.

4. Rural Consumer Behaviour
Consumer Buyer Behaviour refers to the buying
behaviour of final consumers – individuals and
households who buy goods and services for
personal consumption.
All of these final consumers combined make up the
consumer market. The consumer market in this
case is Rural India.
About 70% of India’s population lives in rural areas.
There are more than 600,000 villages in the country
as against about 300 cities and 4600towns.

5. Basic concepts
Rural Consumer
Rural consumer profile
• Literacy
• Purchasing power
• Influence
• Occupation
• Culture
• Language

6. Types of Rural Consumers
Household Consumers
Rural Industrial Users
Rural Sellers

7. Rural Consumer according to Buying
Behavior
Habitual
Cognitive
Emotional
Impulsive
New consumers

8. Factors Influencing Buying Behaviour
The various factors that effect buying behaviour of in
rural India are:
1. Environmental of the consumer: The environment
or the surroundings, within which the consumer
lives, has a very strong influence on the buyer
behaviour, e.g.. Electrification, water supply affects
demand for durables.
2. Geographic influences: The geographic location in
which the rural consumer is located also speaks
about the thought process of the consumer.
For instance, villages in South India accept technology
quicker than in other parts of India. Thus, HMT sells
more winding watches in the north while they sell
more quartz watches down south.

9. 3. Influence of occupation: The land owners and service
clan buy more of Category II and Category III durables
than agricultural laborers/farmers.
4. Place of purchase (60% prefer HAATS due to better
quality, variety & price) Companies need to assess the
influence of retailers on both consumers at village
shops and at haats.
5. Creative use of product: For example, Godrej hair
dye being used as a paint to colour horns of oxen,
Washing machine being used for churning lassi. The
study of product end provides indicators to the
company on the need for education and also for new
product ideas.
6. Brand preference and loyalty (80% of sale is branded
items in 16 product categories).

10. Cultural Factors Influencing Consumer
Behaviour
1. Product (colour, size, design, shape): There are many
examples that support this point.
For example, the Tata Sumo, which was launched in rural India
in a white colour, was not well accepted. But however, when
the same Sumo was relaunched as Spacio (a different name)
and in a bright yellow colour, with a larger seating capacity
and ability to transport good, the acceptance was higher.
Another good example would be Philips audio systems. Urban
India looks at technology with the viewpoint of ‘the smaller
the better’. However, in rural India, the viewpoint is totally
opposite. That is the main reason for the large acceptance of
big audio systems. Thus Philips makes audio systems, which
are big in size and get accepted in rural India by their sheer
size.

11. 2. Social practices: There are so many different
cultures, and each culture exhibits different
social practices.
For example, in a few villages they have
common bath areas. Villagers used to buy one
Lifebuoy cake and cut it into smaller bars. This
helped lifebuoy to introduce smaller 75-gram
soap bars, which could be used individually

12. 3. Decision-making by male head: The male in
Indian culture has always been given the
designation of key decision maker.
For example, the Mukhiya’s opinion (Head of the
village), in most cases, is shared with the rest of
the village. Even in a house the male head is the
final decision maker. In rural areas, this trend is
very prominent

13. Buying Process
The most effective and therefore usual buying
process involves the following areas:
1. Problem recognition
2. Information search
3. Evaluation of alternatives
4. Purchase decision
5. Post purchase behavior

14. Models of Consumer Behaviour
Marketing offer
Product , Place ,
Price, Promotion
Environment
Socio-culture
Technological
Economic
Political
Stimuli Organism Behaviour
Consequence
Internal
External
Buyer
Chararct
eristics
Decision
making
Action
Satisfaction
Cognitive
dissonance

15. Consumer Buying Behaviour and Brand Loyalty
in Rural Markets: FMCG
B.V.N.G. ChandraSekhar
Academic and Internship Programme Indian
Institute of Management Banagalore
Bannerghatta Road, Bangalore, India

16. Prime Minister Manmohan Singh talked about
his vision for rural India:
"My vision of rural India is of a modern agrarian,
industrial and services economy co-existing side
by side, where people can live in well equipped
villages and commute easily to work, be it on
the farm or in the non-farm economy.

17. Indian Marketers on rural marketing have two understanding
(i) The urban metro products and marketing products can be
implemented in rural markets with some or no change.
(i) The rural marketing required the separate skills and
techniques from its urban counter part. The Marketers
have following facilities to make them believe in
accepting the truth that rural markets are different in so
many terms. (i) The rural market has the opportunity for
many brands. (ii) Low priced products can be more
successful in rural markets because the low purchasing,
purchasing powers in rural markets. (iii) Rural consumers
have mostly homogeneous group with similar needs,
economic conditions and problems. (iv) The rural markets
can be worked with the different media environment as
opposed to press, film, radio and other urban centric
media exposure.

18. Within the broad framework of marketing,
consumer behavior is the most interesting area
and one concerned with understanding why an
individual consumer acts in certain consumption
related ways.
The complexity of behavior, however, varies with
the nature of the product and need. While
buying a product to satisfy an individual need do
the Brand plays an important role or not,
In this regard a study has conducted in rural
areas to know the importance of Brand in
consumer buying behavior of FMCG goods.

19. Objectives of the study
To study on brand loyalty of various brands in
rural markets
To study does the brand play a role in the
purchase behavior of rural customers
To study on which categories/products does
brand play a role
To identify the presence and the importance of
local brands

20. Description Methodology
To study the importance of Brand consumer Buying Behavior of FMCG
goods in rural areas, the primary data was collected with the help of a
structured questionnaire.
First, with an adhoc questionnaire, a study was conducted on a sample
of 60 respondents in the village’s satanapalli, tadipattri and mallapur,
while, redrafting the questionnaire some questions were added,
modifications were made, and the final questionnaire was prepared.
The survey was conducted in the village’s chintulla; Akulamylaram,
Badangpeta and nadergul, selection of these villages were made based
on first study. While doing the survey with the adhoc questionnaire we
found that there is huge difference in the consumer buying behavior
this may of different reasons like nonavailability of brands, brand
awareness, influence, etc. Keeping these things in mind the survey was
conducted in three different areas.

21. To study the urban influence on consumer
buying behavior, the village that is closer to
urban.
A village where there will be an availability of
different brands.
Remote Area where awareness and availability
of brands are less

22. Sample Design
Telangana is one of the three regions of Andhra
Pradesh consisting of 10 districts, except Hyderabad;
capital city of the state, the entire Telangana region is a
backward and more rural in character.
This region represents the average Indian rural
characteristics in terms of sizes of rural population,
agricultural economy, small size village, low density
population, low literacy rate, low per capita income
and consequent lower standard of living of the people.
The ten districts of the region, Ranga Reddy district has
selected for the study as the district has much covered
with the capital city and it is surround the capital city
we thought this is the best area to do survey to meet
the objectives of the project.

23. Data Analysis:
Based on the colleted date in three sample villages, product wise brand awareness, purchase and
loyalty are given below:
• Soaps: In Soap category, awareness will match with purchasing behaviour and brand loyalty is
more in Badangpet and Nadergul region and less in Chintulla.
• Hair Oil: In Hair Oil category, branded products usage is more in Badangpet and Nadergul.
Consumers prefer to buy local brands in Chintulla. Vatika and Navratan dominate in
Badangpet,
Parachute in Nadergul and Gograda local brand and Dabur in chintulla.
• Biscuits: Biscuits consumption is less. In Biscuits category consumers mostly buy in loose
those are available in near by shops like salt biscuits, Osmania biscuits etc.
Parle-g and Tiger are mostly used brands in Badangpet.
• Tea: Tea is purchased in loose, which is available in the local shops. The Popular brands Red
Label, Three Roses and Gemini are used in Badangpet.
• Coffee: Coffee Consumption is very less or no consumption in Nadergul and Chintulla. In
Badangpet we could able to found few consumers and they consume BRU instant Coffee and
also café or hotel we could able to find Instant powder and not filter coffee.
• Washing Powder: In washing powder category, Nirma dominate all the three selected sample
rural markets regions. In Remote area like Chintulla Nirma sell Rs.1 Sachets.
• Washing Soap: In washing soap category Rin, 501, Nirma, and Extra Local Brand dominates all
the three selected rural markets.
• Face Powder: In Face Powder category Pond’s, Chintol, and Santoor dominates the market
and it also need to see in other angle that consumption level is least.
• Cold Cream: In Cold Cream Category Pond’s has dominated the market in consumption in
Badangpet. Less consumption in Nadergul and very less or no consumption in chintulla village
• Fairness Cream: Fairness Cream consumption is high in Nadergul and Badangpet. Fair and
Lovely dominates the market and very less or no consumption in chintulla village.

24. Problems in Rural Marketing:
1. People in villages are subject to traditions, habits,
preferences and socio-cultural pressures.
2. Rural markets are price sensitive. Rural consumers are
price conscious and they purchase simple and low priced
goods.
3. Brand loyalty is very low in rural areas.
4. Communication problems with regard to the marketing
information to the rural consumer because of low literacy.
5. Rural consumers are not exposed to organized advertising.
6. It is difficult to manage and organizing an effective
distribution channel is another hurdle in rural marketing.
7. IMC in rural markets is difficult and makes incur high
promotional costs.
8. Business concerns hesitate to enter to rural markets
based the all the above problems and focus the business
towards Urban and Semi-Urban markets.

25. Suggestions and Conclusion:
As per the analysis and information carried out the following
suggestions and conclusions are arrived at:-
1) In the study majority of the respondents are male categories.
2) Male members of the family are alone going to buy consumer
products.
3) Women are not interested in shopping and do not come out from
their houses frequently.
4) Most of the families come under the agriculture category.
5) Family income is very low.
6) Product planning is very important to marketer to enter into rural
market.
7) Non-Availability of brands is another reason which affects
purchasing decision.
8) Packaging should be strong enough to stand rough handling
because of poor infrastructure facilities and pack should be small.
9) Brand names should be simple, small and easy to remember and
pronounce
10) Effective IMC is required to reach remote villages

26. Encouraging Indicators/Initiatives for Rural
Market Growth
Scientific methods – major impetus to Production of food grains
Export on the rise – Increase in agriculture and handicrafts
Initiatives taken by banks for more branches and Kisancredit card to
buy seeds, fertilizers, consumer goods oninstallment basis
Reputed Companies helping in changing lifestyles – Levers Britania ,Dabur, LG, Honda,Videocon
Media creating an impact-creating awareness levels
Government Policies – White Revolution – Milk productsYellow Revolution (poultry and edible
oils)Blue Revolution – Aqua culture
Employment Schemes – JRY(Jawahar Rojgar Yojna,PMRY,Small Industries Training,
Riral Electrification, Spend on Health and Sanitation,Medical and Health, Primary Education,
Credit card for farmers
Waiver of Loans
Initiatives by leading organization in spreading awarenessHindustan Levels Shakti, ITC Reliance etc

27. Move to Rural Market …
Rural India buys Soft Drinks approx 45%
of all soft drinks
Almost 50% motor cycles
Approx 55% of cigarettes
Half the total market for TV,Fans,pressure
cooker,bicyclesWashing
soap,tea,blades,salt,toothpowder

28. Profile of the Rural Consumer
Low Literacy Level
Low Income Level
Massive Geographic Spread
Urban population concentrated 3200 cities town
Rural scattered over 630000 villages >
Reference Group
Health Workers
Doctors
Teachers
Panchayat Members
Rural Bank Managers
District Managers
Occupation – Principal FarmingTrading,HandicraftsCattle & Poultry
Farming,Media Habits Fond of music T.V Radio Video
Films.Generally they have a lot of reservation/inhibitionrigid in their
behaviour

29. Opinion Leadership
The process by which one person (the opinion leader) informally influences the consumption actions or
attitudes of others who may be opinion seekers or opinion recipients.
Strong /weak tie source

30. Opinion Leadership is the process by which the opinion leader informally
influences the actions or attitudes of others, who may be opinion seekers or merely
opinion recipients. Opinion receivers perceive the opinion leader as a highly credible,
objective source of product information who can help reduce their search and analysis
time and percieved risk.
Opinion leaders are motivated to give information or advice to others, in part doing so
enhances their own status and self image and because such advice tends to reduce any
post purchase dissonance that they may have.Other motives include product
involvement, message involvement or any other involvement.
Market researchers identify opinion leaders by such methods as self designation, key
informants, the sociometric method and the objective method.
Studies of opinion leadership indicate that this phenomenon tends to be product
category specific, generally one of their interest. An opinion leader of one product
range can be an opinion receiver for another product category.

31. Generally, opinion leaders are gregarious, self
confident, innovative people who like to talk.
Additionally, they may feel differentiated from others and
choose to act differently (or public individuation).
They acquire information about their areas of interest
through avid readership of special interest magazines and
ezines and by means of new product trials.Their interests
may often overlap into adjacent areas and thus their
opinion leadership may also extend into those areas.

32. The Needs of Opinion Leaders
• Self involvement
• Social involvement
• Product involvement
• Message involvement
• Opinion leaders are four times more likely to be
asked about political issues, three times more likely to be
asked about computers or investments, and twice as likely
to be asked about restaurants
• Information seekers seek a ―strong-tie‖ source
when they know little about a topic, and ―weak-tie‖
sources when they have some knowledge

33. Reasons for the Effectiveness of Opinion
Leadership
• Credibility
• Positive and Negative Product Information
• Information and Advice
• Opinion Leadership Is Category-Specific
• Opinion Leadership Is a Two-way Street

34. Brand loyalty
Brand loyalty can be defined as the strength of preference for a brand
compared to other similar available options. This is often measured in
terms of repeat purchase behaviour or price sensitivity.
FACTORS OF BRAND LOYALTY
Lau et al. (2006) in his article mentioned that there were seven factors that
influenced consumers‘ brand loyalty towards certain spo product quality, price,
style, store environment, promotion and service quality.
Brand Name
Famous brand names can disseminate product benefits and lead to higher
recall of advertised benefits than non-famous brand names (Keller, 2003).
There are many unfamiliar brand names and alternatives available in the
market place. Consumers may prefer to trust major famous brand names.
These prestigious brand names and their images attract consumers to
purchase the brand and bring about repeat purchasing behaviour and
reduce price related switching behaviours (Cadogan and Foster, 2000).
Furthermore, emotional and self-expressive benefits for differentiation. This is
important for brands which have only minor physical differences and are
consumed in a social setting where the brand can create a visible image about
the consumer itself.
Patanjali, Dabur, HUL, Britannia, Nestle

35. Product Quality
Product Quality encompasses the features and characteristics of a product
or service that bears on its ability to satisfy stated or implied needs. In other words,
product quality is defined as ―fitness for use‖ or ‗conformance to requirement‖.
Consumers may repeat the purchase of single brands or switch around several
brands due to the tangible quality of the product sold.
According to Frings (2005), the components of product quality of fashion
merchandise include size measurement, cutting or fitting, material, colour, function
and the performance of the merchandise.
Fitting is a crucial aspect in garment selection because some fitted garments
such as swimsuits and aerobic wear can ideally enhance its importance in product
quality because it affects the hand feel, texture and other performance aspects of the
product. Further, consumers relate personally to colour, and could select or reject a
fashion because of colour. If the colour does not appeal to them or flatter their own
colour, they will reject the fashion.
Different FMCG products, fertilizers related to agriculture, automobiles.

36. Functional attributes in sportswear include quick-dry,
breathable, waterproof, odour-resistant, lightweight, and
antimicrobial and finally, durability which is the use life of
garments.
For instance, some consumers wear their sportswear for heavy
work and some for leisure and sports, as they need a lot of
movement, while durability is an important consideration in
purchasing sportswear.
Perfectionist or quality consciousness is defined as an
awareness of and desire for high quality products, and the need
to make the best or perfect choice versus buying the first
product or brand available (Sproles and Kendall, 1986). This
indicates that quality characteristics are also related to
performance.

37. Price
According to Cadogan and Foster (2000), price is probably the most important
consideration for the average consumer. Consumers with high brand loyalty are
willing to pay a premium price for their favoured brand, so, their purchase
intention is not easily affected by price.
In addition, customers have a strong belief in the price and value of their
favourite brands so much so that they would compare and evaluate prices with
alternative brands (Evans et al.,
1996; Keller, 2003). Consumers‘ satisfaction costs and values. If the perceived
values of the product are greater than cost, it is observed that consumers will
purchase that product.

38. Loyal customers are willing to pay a premium even if the price has increased
because the perceived risk is very high and they prefer to pay a higher price to
avoid the risk of any change (Yoon and Kim, 2000).
Basically, long-term relationships of service loyalty make loyal customers more
price tolerant, since loyalty discourages customers from making price comparison
with other products by shopping around.
Price has increasingly become a focal point in consumers‘entsofoffer
valuejudgmaswell as their overall assessment of the retailer (De Ruyter et al.,
1999).
According to Bucklin et al. (1998), price significantly influences consumer choice
and incidence of purchase. He emphasized that discount pricing makes
households switch brands and buy products earlier than needed. Price is
described as the quantity of payment or compensation for something. It indicates
price as an exchange ratio between goods that pay for each other.
Price also communicates to the market the company‘s intended value its product or
brand. Price consciousness is defined as finding the best value, buying at sale prices
or the lowest price choice (Sproles and Kendall, 1986). Additionally, consumers
generally evaluated market price against an internal reference price, before
they decide on the attractiveness of the retail price.
Soaps, Candies, Snacks, Beauty Products, Sanitary Pads, and Electrical
Products

39. Store Environment
Omar (1999) emphasised that the store environment was the
single most important factor in retail marketing success and
store longevity. Positive attributes of the store, which include
store location, store layout, and in-store stimuli, affect brand
loyalty to some extent.
Store location and number of outlets are crucial in altering
consumer shopping and purchasing patterns. If consumers find
the store to be highly accessible during their shopping trip and
are satisfied with the store‘s assortment and ser (Evans et al.,
1996). Thus, a store‘sfactors thatatmospherecouldinfluence is
consumer‘s decision making

40. Style
Consumers‘ judgment depends on the judgment will be
conditioned by their opinion of what is currently fashionable.
Brands that supply stylish sportswear attract loyal consumers who
are fashion conscious. Fashion leaders or followers usually purchase
or continue to repeatedly purchase their fashion garments in stores
that are highly fashionable. They gain satisfaction from wearing the
latest fashion and style which also satisfies their ego.
Fashion consciousness is generally defined as an awareness of
new styles, changing fashions, and attractive styling, as well as the
desire to buy something exciting and trendy.

41. The stimuli in the store, such as the characteristic of other shoppers and
salespeople, store layout, noises, smells, temperature, shelf space and displays, sign,
colours, and merchandise, affect consumers
On the other hand, background music played in the stores affects attitudes and
behaviour.The slow-beat musical selection leads to higher sales volume as
consumers spend more time and money in a conducive environment.
customer loyalty could yield a favourable operating cost advantage for retailers.
Furthermore, they stressed that obtaining new customers cost five to six times as
much as retaining current customers. Loyal customers can increase their purchase
spending, they are low cost for retailers as compared to obtaining new customers;
they accept price premiums and they have customer longevity.
channel convenience of the brands had significant influence on buying behaviour.
This means that the accessibility to this product/brand in the store is important
when purchasing low involvement products. Consumers will not go to another store
just to find the brand. Instead, they will stay put and choose another brand.

42. Promotion
Promotion is a marketing mix component which is a kind of communication with
consumers. Promotion includes the use of advertising, sales promotions, personal
selling and publicity.
Advertising is a non-personal presentation of information in mass media about a
product, brand, company or store. Promotion is an important element of a firm‘s
marketing strategy.
Promotion is used to communicate with customers with respect to product
offerings, and it is also a way to encourage purchase or sales of a product or
service.
Sales promotion tools are used by most organisations in support of advertising and
public relations activities, and they are targeted toward consumers as final users.
She also states that promotion has a key role in determining profitability and
market success and is one of the key elements of the marketing mix which includes
advertising; direct marketing; sales promotion; public relations and publicity;
personal selling and sponsorship

43. Service Quality
A common definition of service quality is that the service should correspond to
the customers‘ expectations and satisfy’s,1990). Service quality is a kind of personal
selling, and involves direct interactions between salespeople and potential buyers.
Consumers like to shop at specific stores because they like the services provided and
are assured of certain service privileges.
The impact of salespeople-consumer relationships will generally result in long
term orientation of consumers towards the store or brand. Trust in salespeople
appears to relate and results in the consumer being totally satisfied with the stores in
the end.
Additionally, personalization (i.e. reliability, responsiveness, personalization
and tangibles) significantly influence consumers‘ experience brand loyalty of
consumers.
Quality of a service as perceived by customers had three dimensions:
functional (or process) dimension, technical (or outcome) dimension, and image.
Furthermore, Richard and Allaway (1993) argued that utilizing only functional
quality attributes to explain misspecification of service quality and had low
predictive validity

44. Personal Selling
It is a process of face to face interaction
between the salesperson and the prospective
customer. Through a proper training and guide,
a salesman can be a valuable medium between
the marketer and the prospective customer.

45. Personal Selling in Rural Region
• Familiarity with the Rural Area − It is difficult for the salesperson to be familiar
with rural area. As the population of rural region is scattered, it becomes a lot
more important for the salesperson to have sufficient knowledge about rural area
which he is supposed to cover.
• Proficiency in Local Language − Fluency in the local language is another key skill
that must be present in the salesperson. It acts as a major communication point in
converting prospective customer into an actual one.
• Acquaintance with the Rural Folks − It is a common tendency among rural people
that they only pay attention to those people whom they can consider as a part of
their social group. Thus, if the salesperson belongs to the particular rural district,
in that case his job not only becomes easy but also chances of success in achieving
his sales target increase strongly.
• Be Persuasive but not Pushy − A good salesperson is one who is persuasive but
not pushy in nature. Rural people are always skeptical in nature about the new
product and strongly hesitate to purchase it due to lack of faith.
Here a salesperson needs to remove the doubts of the prospective customer and
make him believe to purchase the product. But being too pushy in his approach can
ruin the chances of sale of the product.
• Public Relations − Public relations in case of marketing promotions in case of rural
areas are highly important so as to create the formal relationship with the newly
acquired customers. Also, dissemination of information concerning the rural folk is
possible only through effective public relations.

46. Sales Promotion
It is a short term tool adopted by the marketer to
increase the sales of the particular product / service
in a particular area for a particular period of time.
Push-up Sales Promotion
• It is the technique where marketers persuade
third parties i.e. intermediaries like dealers,
retailers etc. to stock the products of the
respective company and push them towards the
ultimate customers.

47. • Free display materials − Free display materials like banners, sign boards,
neon lights etc. are distributed among dealers to attract and inform the
customers about the products.
• Storage materials − Storage materials like racks, shelves, refrigerators etc.
are distributed among shopkeepers who help in visual merchandising and
also aid in storing the product.
• Demonstrations − Important technique of push-up sales promotion, free
demos at dealers’ shops inform the consumers about the handling of the
product.
• Incentives to dealers − Under the push-up sales promotion special
incentives are provided to dealers on the number of units sold to the
ultimate consumers.
• Lucky draw contest − It is to motivate dealers to stock the company’s
products and promote sales, and lucky draw contest are organized among
dealers.
• Free gifts − It is a common strategy adopted by the companies and free
gifts are often distributed among dealers during festive seasons to
increase the consumer base.
• Pull-up sales promotion − As the name suggests, pull-up sales promotion
is the tool where marketer pulls the customers towards their product
through various promotional strategies and advertising.

48. Village Haats
• Haats are the weekly markets from where rural
people buy the items of daily necessities,
garments, farm inputs etc. They are the source
for rural people and a place of social get together.
The existence of haats can be traced back to
ancient times — the times of Chandragupta
Maurya.
• Haats provide to the marketers an opportunity to
display their products. Consumers are ready to
try the product by overcoming all inhibitions and
can get the touch and feel of the product and this
will further generate sales as most of the people
come to the haats with an intention to buy.

49. Melas
• Melas are again the essential element of India’s culture
and pull masses. In a trade mela, one can find variety
of products. Melas are held usually in festive seasons
like Dussehra, Diwali, Holi, Eid etc.
• During melas, marketers get to interact with a large
number of consumers and encourage for trial
purchase. These melas help the marketers target large
audience.
Mandis
• Mandis are the place for agricultural produce and
inputs. Mandis can be a good platform for
manufacturers of agri-inputs ─ both durables and non-
durables. Durable are tractors, pump sets, threshers
etc. Non-durable includes seeds, fertilizers etc.

50. Fairs and Exhibitions
• Fairs are a part of rural people’s life. For the rural
people, they are the source of entertainment and
a good opportunity to launch their products for
the marketers in the rural market. It has mass
appeal as several villagers come to fairs.
• Customers may be attracted by using the mass
media like organizing folk songs competition, folk
dances, magic shows, puppetry shows, street
theatre, acrobatic skills, juggler, etc.
• Another important thing is the use of vibrant
colors in the company’s stalls. This pulls the
crowd towards buying the prod

51. Unilever in India: Hindustan Levers Project Shakti
1. How is HUL placed in the Indian Consumer market?
• HUL had introduced low unit price packs (LUPs) which made low
penetration products
affordable for low-income group people.
• Another extension of Project Shakti was Project Vani where in a local
woman was appointed as Vani, trained in matters of health and hygiene.
This Project was a communication program aimed at spreading
awareness of health and hygiene practices in rural India.
• Providing better margins to women entrepreneurs of the bottom line
by allowing them to sell directly to consumers and also making them self-
sustained.
• iShakti was another Project Shakti initiative implemented to bring
Internet connection to the villages that had never seen a computer.
• Build communication channels in media dark regions
Project Shakti helped develop a customer base for HUL that has a self-
motivated team of sales representatives who can penetrate into the
untapped rural markets

52. 2. What was the motivation for the Shakti initiative? Was it a
CSR initiative?
• Increase in the standard of living of people in rural India. It
led to an increase in the disposal income of rural households
by almost 50%
• Increase in the health and hygiene awareness in rural
households
• iShakti- empowering the local community by providing
access to information
• Empowerment of women by making them entrepreneurs
• The connection between community and business is
important as it develops customers for a lifetime. HUL did the
same which also enhanced their image as a socially
responsible company.
Shakti Project was not a corporate social responsibility
program; it was a business initiative with social benefits.

53. 3. How will Project Shakti influence distribution in rural markets?
• The team at HUL had to figure out a way to double the number of entrepreneurs without
significantly increasing the number of people who managed them.
• In 12 states where Shakti now operated, the Shakti model had received varying degrees of
support from the different state governments, with very close cooperation in five of them, as
compared to Andhra Pradesh where the state government had actively endorsed it.
• Prosperity levels varied widely across different states, and this affected the viability of Shakti
entrepreneurs.
• The level of infrastructure impacted accessibility to villages.
• The status of women in rural society differed across states. For example, women in Andhra
Pradesh were far more independent than those in some northern states.
In some districts, it was almost impossible for a woman to venture out of her home and try to
sell products to other homes or to male retailers in the village.
• Wide differences in the dialects prevalent in neighboring districts made it difficult for a rural
sales promoter to work effectively across a state.
• Also, they had to deal with the challenge of developing self-confidence and enterprise among

54. barely literate underprivileged women in a severely male-
dominated society to prevent them from getting
demoralized after a few initial rejections.
• They realized they needed a formal training program to
equip the Shakti entrepreneurs with the skills and
confidence required to manage a viable business.
• They also faced a challenge in finding a brand manager
to invest in the Project. They had to convince the brand
managers to pick up much of Shakti’s promotion and
brand-building costs.
• Also, women had unsold stocks worth thousands of
rupees stacked up in their homes and they were also to
pay back the loan they had availed of to buy these stocks.
Women who had never
undertaken any independent economic activity regretted
their decision of becoming Shakti.

55. 4. If Shakti cannot become profitable, should HUL continue the
program? Why?
The benefits of Project Shakti were: -
• It empowered women by improving their social status
• Gave people access to hygienic products and thus improved health
conditions
• It enabled women to acquire education and entrepreneur skills in the
process
• HUL earned profits through Project Shakti as it taped the Below
Poverty Line market,
which was an untapped market earlier.
• HUL through this project was able to manage its CSR goals by
empowering people to come out of poverty
Had the project not been profitable revenue wise, HUL should
continue with it, as the social benefits resulting from this profit
outweigh the costs involved in it. The development of the sachet
revolutionized the FMCG industry. Products that had suffered very low
penetration among lower- income groups were now affordable to
these consumers.