CHAPTER VI FINDINGS, SUGGESTIONS & CONCLUSION 6.1 Findings of the Study 6.2 Suggestions 6.3 Limitations of the Study 6.4 Scope for Further Research 6.5 Conclusion 314
CHAPTER-VI FINDINGS, SUGGESTIONS & CONCLUSION INTRODUCTION : This chapter is derived to present (i) Findings of the Study, (ii) Suggestions of the study, (iii) Scope of future research and (iv) Conclusion of the study. The evaluation of the result obtained after the analysis of data and ethnographic analysis is discussed in this section. 6.1 Findings of the Study : The results are evaluated vis-a-vis the objectives have been justified with the support of data and ethnographic analysis. Therefore the objectives of the study are highlighted once again before the discussion of the results. To examine the brand loyalty of various income groups for different products of FMCGs. To establish the rural marketing potentials. To examine the causes of failures in rural marketing by FMCGs producing Companies. To understand the buying consumer behavior in rural areas pertaining to FMCGs by using ethnographic analysis. 315
Rural marketing of FMCGs comprises of various thoughtful planning and activities and the bunch of all those are known as strategies. Although it is a fact various companies manufacturing FMCGs takes different ways (strategies/marketing plan to capture the rural areas) but observing the rural marketing industry as discussed in Chapter 2, it is clear the various companies are still struggling to capture the rural market. Mainly in rural marketing of FMCGs 4P's are considered as marketing mix. The combination of various P's namely Product, Price, Place and Promotion are being used effectively to get the maximum favourable results by FMCG companies additionally in the rural areas there are 4A's as like 4P's, namely Availability, Awareness, Affordability and Acceptability. So all the company needs to consider the 4A's and design their strategies accordingly to get more success specifically in rural market at the village level. Rural marketing of FMCGs involves multiple specialized fields of study. Disciplines like Economics, Psychology, Sociology, Anthropology, Chemistry and Law jointly provide the basis for concluding any appropriate findings. Findings on the basis of respective disciplines are given below :- On the basis of Economics Subject Matter : The law of Economics partially covers the issues in rural marketing of FMCGs. The factors like income and price of the products plays most important role. Followed by quantity and quality of the product. Table 5.8 clearly shows that how 316
various income groups consume the FMCGs products while maintaining the brand loyalty. Higher income clearly depicts that the consumer is able to spend more on higher priced goods while vice-versa prevails. The subject matter of Economics also deal with the issues of personal, Table 5 clearly shows that how various income groups are influenced by personal factors.87 % consumers are influenced by the personal factors, i.e., age, socio-economic condition, lifestyle and status of the consumer. However from the table 5.8 it is also evident particularly lower income group prefers lower priced products compare to higher price products, reason for this consumer behavior in the lower income group is due to low disposable income. If we analyse further Table 5.8 we also finds that products which are marketed for the longer period at the village level always attracts the consumers specifically lower income group along with others. For example, Clinic Plus Shampoo sachet, Rin washing soap marketed by HUL, Colgate Toothpaste marketed by Colgate-Palmolive, Parle-G Biscuits marketed by Parle Products Company are some of the oldest products which are being marketed in rural areas and therefore enjoys greater market share in all the income groups at village level. During the tenure of ethnographic analysis of selected samples (selected villages/selected tehsils) it is also observe 317
that the change in price of various products, the substitution affect was negligible. Due to reduction in the prices of the FMCG products the brand loyalty of rural consumers is maintained, also quality of the products was improved over the period of time. On the basis of Psychology subject Matter - In selected villages/tehsils consumers are rigid in terms of trying/adapting new products due to brand loyalty and also their belief system in the consumption of regular products. Some of the old traditions are still prevalent in the selected villages/tehsils during the ethnographic analysis it was observed at financially weaker segment of consumers are not treated equally as rich consumers are treated. Credit facility is only available to higher and middle income group while lower income group need to fulfill their demand on cash basis only. Every rural consumer is very sensitive to price-quality relationship. Younger generation influence the consumption of FMCGs to a large extent. Younger generation is much aware about the various FMCG products due to better education facilities. For example female respondents mentioned that due to information (awareness) gained from the family members, 318
friends and physicians, they have started using sanitary pads (Whisper) for dignity and maintaining personal hygiene. On the basis of Sociology subject Matter - From the Table 5.5 it is evident that the rural marketing of FMCGs is affected due to social factors i.e. Gram Panchayats, Aanganwadi workers, Sarpanch and elderly people of the villages influences the perception, notion and social environment which influence the consumer behavior by 3%. From the Table 5.7 (Ethnographic Analysis based on the photographs response) it is also evident that all the income groups i.e. higher, middle and lower income group respectively present the fact that rural people are less aware about the various FMCG products which are marketed in urban areas. This proves that village level consumers are not covered exhaustively under the marketing strategies by many companies. Moreover Table 5.5 and Table 5.7 if further correlated awareness of product and knowledge of price proves that only 1% of total samples (500 consumers) are only aware about price and product details of FMCGs. On the basis of Cultural Anthropology subject Matter - From the Table 5.5 it is evident that cultural factors like religion, caste and old traditions/culture influences the 319
consumer behavior by 3% though few issues related to caste, status, sub-sect within each caste also plays important role in consumption pattern. Correlating Table 5.8 and Table 5.5 it is evident that lower income group does not consume any beverages at all, this characteristic is related to traditions and culture which certain groups still follows at village level. In selected Tehsils/Villages it is also observed that rural economy still have well structured commodity market which reduces the opportunities of food segment in the FMCG industry. Rural consumers fulfill their needs of food grains, milk, curd and cereals at their respective villages. This characteristic is common for all the villages due to the reason rural people maintains cows, goats and buffalos, while the surplus produce is sold to villagers or supplied to Milk producing Dairy/Factory. On the basis of Law subject Matter - Rural consumers are very much aware about the issue of MRP which is printed on the products they buy. Although many rural consumers are illiterate still, as a matter of fact being a old customer they are familiar about the price of certain FMCG products like Soap, Hair oil and washing soap. Any excessive charge over the MRP is being denied to be paid by the rural consumers. Moreover all the companies are providing their products on the basis of branding criteria in 320
order to prevent fake products to imitate branded products by using company's logo, name, bar-coding, registered address of the company, quantity offered and period for consumption i.e. time bound duration of consumption is mentioned on the product packaging from the date of manufacturing. The households (rural consumers) having the young educated family members clearly prevent their elders from buying any spurious FMCG products. Moreover younger generation are aware about the consumer rights which creates the liability for various FMCG companies to comply with the rules, regulations and byelaws of Consumer Protection Act-1986, governed by the Ministry of Consumer Affair, India. On the basis of Chemistry subject Matter - One of the important characteristics of FMCG industry (i.e. all the segmentations in FMCG industry, home care, personal care and food and beverages respectively) is that without the subject matter of chemistry it could not have come into existence. If we analyze various products/brands of various companies it is evident that various chemicals mixtures/properties are used in producing the FMCG products. None of the FMCG product is purely herbal, rather herbal products are also using the certain degree of chemicals properties to preserve the content of product. Few examples are soap, detergent, cleaning products (toilet cleaners) and 321
shampoo used the chemical properties like sodium hydroxide, potassium, magnesium and calcium. Other important findings are : As per Table 5.5 major factors (sub-factors) influencing consumer behavior in rural areas/tehsils relate to personal factors i.e. it affects it influence 87% rural consumers in total. This phenomena is operational in all the Tehsils/villages in all the income groups. It is in summer time only when sales of beverages are high, PepsiCo India and Coca Cola company are only two major players in beverages segment of FMCGs, but recently Lotus, Amul and Saras (Milk and its allied products are marketed by these companies/co-operative societies) have started penetrating the village level market which has reduced the consumption of branded products like Thumps Up and Coca Cola. Moreover the influence of the religious teachers likes Baba Ramdev and Gurus of rural people (spiritual teachers which villagers/rural consumers choose to guide them) have affected the minds of rural consumers in such a way that they are adopting herbal ways of living, thereby showing a trend of non consuming beverages offered by Coca Cola and PepsiCo. 322
Rural consumers particularly in the lower income group still uses mustard oil as body lotion, hair oil and antiseptic remedy for personal maintenance. Using of mustard oil on body parts including hair is age old tradition which is still prevalent in the lower income group consumers. From Table 5.8 can be clearly observe that lower income group only uses 3% (i.e. out of 125 households/consumers only 4 households) uses Parachute oil and Dabur Amla hair oil. This characteristic substantiate that still some of the villagers are rigid in their consumption pattern along with additional factor related to low level income. Rural society is having a special characteristic particularly at the village level and that is they leave their home for work by 8 AM in the morning with lunch box, all the respondents revealed that only home cooked food they prefer, at the most they take tea during work hours. This leaves no scope for food and drink segment to prosper in villages. Many rural villages are witnessing urbanization at nearby places, specifically in Sanganer Tehsil, villages like Watika, Bagru Khurd and Dahmi Khurd which have provided the rural consumers with the opportunity of rental income along with the agricultural income. Food products which are in unbranded segment and sold on gram or kilogram bases a purchase more than package food 323
products. This leads to poor demand or no demand for packaged goods. So far companies are using only feeder town nearby the villages to distribute their products no attempt have been made by any of the companies to operate at village level. Furthermore in the selected Tehsils various FMCG companies have played no positive role to remove the poverty and help the rural people in increasing their income level. One sided approach of profiteering adopted by the companies has violated the principles of Corporate Social Responsibility (CSR). Maggi (instant noodles) still remains the king in foods segment of FMCG in rural areas. Patanjali products are capturing rural market; various other companies treat Patanjali products as biggest threat in FMCG sector. But Patanjali products are priced higher, hence higher income and middle and group only gets attracted and that to limited extent, but due to taste, preference and habit among rural consumers, companies like P&G, Amul, Nestle, H.U.L., Dabur, Godrej, Bajaj, Saras and etc. still command the FMCG rural market share. Many Villages have their own Aataa Chakki (Wheat Grinding Machine) and Mustard oil making machine, this 324
also removes the scope of cooking food oil segment to capture rural consumers. Almost all the villages except few villages in Sanganer Tehsil namely Watika, Dahmi Khurd and Bagru Khurd has no proper retail outlet for distribution of FMCG products. Moreover few outlets which are there at the village level do not have any credit facility from the FMCG companies except Coca Cola India and PepsiCo India (both the companies provide refrigerators to stock cold drinks), therefore cost of operating retail outlet at the village level is an expensive affair which have been so far not addressed by any FMCG company barring Coca Cola India and PepsiCo India. 6.2 Suggestions : The various companies of FMCG industry have attempted to capture the rural market, yet exploring the full potential of the village level marketing is almost unexplored. Over the period of time FMCG companies reduced the quantity and price of various products it has benefited to some extent lower income group in availing the products but still Low enterprising ability on the part of companies is the biggest loophole in rural marketing of FMCGs. Furthermore Social barriers and mix cultural values along with no alternative rural marketing channel hinder the growth of rural marketing of FMCGs at village level/tehsil level. Though infrastructural development in rural areas 325
has improved and facilitated various socio economic factors to prosper, like education, electricity, housing, sanitation and MNREGA (employment guarantee programme for rural population) which provided the opportunities for unemployed villagers to generate income and better standard of living. But the fundamental problems of rural economy/tehsil level are still persisting, i.e. low level of disposable income still prevails, unemployment & under employment, poor quality of education and technical skill development schemes are some critical issues to be addressed on priority basis. Moreover low level of consumer behavior analysis prevails in rural marketing. No doubt, quantitative methods of analysis are important but more thrust should be given on qualitative methods in understanding rural consumer behavior. Some of the suggestions of the study are given below :- 1. FMCG companies must ensure that village level awareness among the consumers be ensured. The younger generation is the prospective consumer for the future of FMCG products, therefore FMCG companies should actively participate with the government agencies in enhancing the education sector prevailing at village level, this will in the long run will provide a better consumer base, due to good education, younger generation can avail better job opportunities thereby employment nature will be transformed gradually from agrarian and wage employment to salary employment. 326
2. Rural marketing of FMCGs must be based on media mix approach i.e. along with the T.V., Radio should be used for spreading the information among rural consumers. 3. The marketers should design and develop a product taking into consideration the price factor which rural consumer can afford without compromising any quality of the product. Pricing is the most crucial factor in rural marketing of FMCGs. 4. Rural marketers must provide discount periodically. Discount attracts the rural consumers and this enhances the sale of FMCG products. Though many companies have attempted this strategy and are partially successful, but rural consumer in present scenario duly understand the approach taken by the various FMCG companies by reducing the quantity this has resulted in negative impact for the long run business in rural areas. 5. Introductory pricing is very important to understand the rural consumer behavior. A company can offer its product on low price and once the consumer base is created companies can used the STP process for addressing the needs of rural consumers accordingly and as per brand profile. 6. It is the irony of villages/tehsils that despite best efforts made by the Government of India as well Government of Rajasthan rural population (in selected Tehsils) has poorly developed so far and FMCG companies must ensure proper coordination with the 327
government agencies in order to overcome the poverty issues, unemployment and education. Apart from the profiteering motive FMCG industry should formulate strategies to promote human development on qualitative aspect so that the base provided by the Government of India (developmental schemes and programmes) and state government must be properly channelized to ensure creation of structured market in rural areas. 7. Rural consumers particularly from lower income groups who are marginal workers or wage laborers who have low level of disposable income are compelled to buy FMCG product on cash bases must be given credit facility (rural retailers are treated here has rural consumers), hence credit facility must be provided atleast for more than two months in rural areas. 8. FMCG companies must channelize the unemployed male and female who are younger in age for distribution of FMCG product nearby villages on commission basis, this will help the FMCG companies to create long term relationship which will also help in creating brand loyalty/goodwill for the products. 9. Gram Panchayat and Cooperative societies (Dairy societies and Agricultural cooperative societies) in every village should be used for selling FMCG products. 328
10. Public Distribution System (PDS) is a well organized distribution system in rural areas which can become distribution point for FMCG products also. 11. FMCG companies apart from the CSR must invest in research and development programmes at the village level, particularly for the weaker section and weaker gender so that they can be used as distributing agents and promoter of company's product. 12. At every feeder town i.e. Tehsil level dedicated team of distributor for villages must be maintained by FMCG companies, specifically companies like P&G, Dabur, Bajaj, Marico and Nestle should follow the model adopted by the HUL in order to overcome the distribution problems. 13. In rural areas it has been found that availability of brands are not ensured. Interior village marketing is almost neglected by all the companies having low population density and this should be duly addressed by formulating appropriate marketing strategies keeping in mind economical distribution system. 14. In rural areas camel, bullock cart and private transportation system can be effectively used for advertising (hoardings, posters, pictures) the products of companies. These transport mode cover interior villages, thereby illiterate villagers can also been influenced. 329
15. Rural income generation is the subject matter of good crop produce. Companies must use appropriate timing to launch new product; both on the basis of introductory price as well as to test consumer test and preference. 16. Although it is not possible to advertise in local language but companies must ensure that brand ambassadors, film stars and big colorful posters should be used so that companies message clearly reaches out to the rural consumers. 17. Commodity market at Tehsil level attracts many rural consumers; hence companies should also use Tehsil level, shopkeepers & salesman to complete the process of communication by getting the feedback about the products from village consumers periodically. 6.3 Limitations of the Study : 1. Rural consumers were reluctant to reveal their true income, therefore only classification of samples were done on the basis of Higher, Middle and Lower Income Group. Hence, study does not analyzes the Income-Expenditure pattern. 2. Only 4 selected Tehsils (25 villages - 500 rural consumers/ households) of Jaipur district are selected, hence findings of the study may or may not be valid in other rural regions of Rajasthan or any other rural part of India pertaining to FMCGs. 330
6.4 Scope for Further Research : The scope for further research are as mentioned below : The study has been restricted to 4 Tehsils (25 villages) in Jaipur district, State of Rajasthan only. So further study can be done by considering more Tehsils and other districts of Rajasthan and may be other regions, state and national level study can be conducted. The sample size for this research study has been limited to 500 rural respondents. So further study can be done taking more samples and qualitative research methodology can be used. The study has included those products which are being consumed in 4 Tehsils of Jaipur district (25 villages) and three income groups are classified under this study. So further study can be done by considering more products which will enhance the knowledge about rural marketing of fast moving consumer goods. The study uses the ethnographic analysis (photo response methodology) and convenience sampling method was used to study the 25 villages (4 Tehsils) of Jaipur district only. The further study can be done considering ethnographic analysis and with appropriate research methodology and larger sample size. Future studies could focus on the reasons why consumer behavior changes over the time period and how prospective rural 331
consumer can be targeted to increase the market share of FMCG product of any company. This study has been restricted to some most backward villages, having greater unemployment ratio, low level of disposable income and rigidity in terms of consumption pattern. So further study can be done by considering developing villages and under developed villages/interior villages. 6.5 Conclusion : The present study has been selected because of the reason that rural market remains untapped despite having high potentials. FMCG companies largely rely on savvy entrepreneurs who trawl the rural hinter-land. It is worth mentioning that FMCG market is more in rural areas than compared to urban areas. Few FMCG giants like HUL and ITC are able to capture rural market and able to build long term relationship with the rural consumers through project Shakti and E- Chaupal respectively. But other companies like P&G, Dabur, Marico and Godrej are still not able to capture rural market fully. It is true that the settlement at the village level remains scattered, having low density of population and low level of disposable income. Changes in rural areas are taking place, i.e. rising incomes, focus on value, change in employment pattern (increasing in nonfarm employment), change in consumer behavior and increase in educational standards of rural people are some of the positive features 332
which are being witnessed in rural areas and FMCG industry must device appropriate strategies, marketing models, marketing mix in accordance with the needs of time and rural consumers. The FMCG companies must ensure that proper marketing mix is used for rural areas separate from urban areas, any FMCG company can only succeed in rural areas through proper planning and implementing right kind of marketing mix and must focus on 4A's (Awareness, Affordability, Availability and Acceptability). ****** 333