1

Abstract

Occupational changes and the expansion oI media have Iuelled the rise oI a new rural
hinterland and a new rural consumer. Rural India, accounting Ior over 75 oI India`s
population oIIers a tremendous opportunity Ior generating volume-driven growth. FMCG
majors have seen the potential oI rural markets and have worked on their strategies to
penetrate these areas.

Due to the media explosion and increasing literacy levels, people in rural areas are
becoming conscious about their liIestyles and demanding a better liIe. With increasing
disposable incomes, the rural consumer has become more demanding and choosier in his
purchase behaviour than ever beIore. Brand consciousness is on the rise and marketers
have realized this. As urban markets are getting saturated Ior consumer goods (FMCG &
Durables), marketing executives are Ianning out and discovering the strengths oI large
rural markets.

This project contributes to the discussion by providing an analysis oI how FMCG
companies can develop eIIective communication strategies to market their products to the
Indian rural market. Particular Iocus on how to overcome the promotional challenges
which occur when developing communication programs will be addressed. The paper
involves theoretical discussion oI rural marketing in India and a substantial case evidence
oI rural communication programs pertaining to an FMCG Iirm in India, i.e. Hindustan
Lever Ltd. (HLL). A consumer study is also included which provides Ieedback on the
consumers` perceptions oI rural communication.

Through the comparison oI existing theory, the consumer study and the case description,
the model oI Rural Marketing Mix (Gupta, 2000), which Iormed the basis oI this study,
has been explored. Additionally, the challenges oI rural communication have been
discussed. Based on the analysis, recommendations Ior eIIective development oI
communication strategies are provided Ior Hindustan Lever Ltd. and FMCG Iirms.



2
1able o Contents

Abstract............................ Page 1

List oI Tables......................... Page 4

List oI Figures........................ Page 5

Acknowledgements...................... Page 6

Chapter 1 Introduction Page 7

1.1 Overview.................... Page 7
1.2 The Changing Face oI FMCG Marketing......... Page 7
1.3 Research Motivation................. Page 8
1.4 Importance oI Project................ Page 9
1.5 Structure oI Project.................Page 9

Chapter 2 The Rural Industry in India Page 12

2.1 Overview.................... Page 12
2.2 Size and Nature oI the Industry.............Page 12
2.3 PEST Analysis.................... Page 12
2.4 Synopsis..................... Page 16

Chapter 3 Literature Review Page 17

3.1 Overview.................... Page 17
3.2 Rural Marketing and its Characteristics......... Page 17
3.3 The Marketing Mix Ior Rural India..........Page 21
3.4 Rural Communication............... Page 31
3.5 Types oI Rural Media................Page 34
3.6 Challenges oI Rural Marketing............. Page 41
3.7 Synopsis..................... Page 43

Chapter 4 Research Design Page 45

4.1 Overview.................... Page 45
4.2 Research Objectives.................. Page 45
4.3 Research Design- An Introduction........... Page 46
4.4 Selection oI Case Study as the Research Design....... Page 47
4.5 Components oI a Case Study............. Page 49
4.6 Characteristcis oI the Case Study............ Page 49
4.7 Choice oI Case- Hindustan Lever`s LiIebuoy........ Page 51
4.8 Data Collection................... Page 52
4.9 Data Analysis................... Page 55
4.10 Issues oI Data Quality- Reliability and Validity..... Page 56
4.11 Synopsis..................... Page 56

3
Chapter 5 Case Study Findings Page 57

5.1 Overview.................... Page 57
5.2 External Audit.................. Page 57
5.3 Internal Audit................... Page 65
5.4 Synopsis..................... Page 81


Chapter 6 Consumer Study Page 83

6.1 Overview.................... Page 83
6.2 Interview Findings................. Page 83
6.3 Synopsis..................... Page 91

Chapter 7 Discussion Page 92

7.1 Overview.................... Page 92
7.2 Analyzing the Research Objectives..........Page 92
7.3 Limitations oI the Study and Future Research........ Page 98
7.4 Synopsis..................... Page 98

Chapter 8 Recommendations and Implications Page 100

8.1 Overview.................... Page 100
8.2 TOWS Analysis.................. Page 100

Chapter 9 Conclusion Page 106

ReIerences Page 107

Appendices Page 115

1 Six Sources oI Evidence- Strengths and Weaknesses...Page 115
2 Consent Form................... Page 116
3 Interview Guide- Consumers & Organizations Interviews. Page 117
4 About LiIebuoy................... Page 123
5 Project Shakti................... Page 124
6 i-Shakti....................... Page 125









4
List o 1ables

Table 1: Challenges oI Rural Marketing............. Page 41
Table 2: Relevant Situations Ior DiIIerent Research Strategies..... Page 48
Table 3: Growth oI Rural FMCG`s............... Page 58
Table 4: The FMCG Penetration................ Page 59
Table 5: Rural Vs. Urban Consumer............. Page 60
Table 6: Market Segments by Urban Orientation oI India....... Page 61
Table 7: Rural Shares oI FMCG................ Page 61
Table 8: Characteristics oI each oI the DiIIerent Brands oI Soap.. Page 62
Table 9: Advertising Spend by DiIIerent Brands......... Page 64
Table 10: Hindustan Lever`s Employees............Page 67
Table 11: Challenges Iaced by Hindustan Lever Ltd........ Page 80
Table 12: Reasons Ior purchasing Toilet Soap........... Page 84
Table 13: Toilet Soap Consumption Per Month......... Page 84
Table 14: Challenges emerged Irom Consumer Interviews....... Page 91
Table 15: Promotional Challenges Ior Rural Marketing...... Page 92















5
List o ligures

Figure 1: Outline oI the Project................ Page 10
Figure 2: Characteristics oI the Indian Rural Market....... Page 18
Figure 3: The Marketing Mix Ior Rural India..........Page 22
Figure 4: Product/Promotion Mix............... Page 24
Figure 5: Retailer- Cog in the Wheel............. Page 30
Figure 6: Message Decisions................. Page 32
Figure 7: Types oI Media Channels............... Page 34
Figure 8: Communicating using Non Conventional Media...... Page 37
Figure 9: A ClassiIication oI Marketing Research Designs...... Page 46
Figure 10: Basic Types oI Research Designs Ior Case Studies...... Page 50
Figure 11: Convergence oI Evidence (Single Study)......... Page 55
Figure 12: The Indian Market................. Page 57
Figure 13: Market Share oI Each Soap Product........... Page 62
Figure 14: ClassiIication oI Rural Consumers who Purchase Soap.. Page 63
Figure 15: Toilet Soap Advertising Spends............Page 64
Figure 16: Corporate Structure oI Hindustan Lever........ Page 66
Figure 17: The i-Shakti Model................ Page 79
Figure 18: Media Channels by Hindustan Lever. .........Page 80
Figure 19: Brand Awareness among Soap Users......... Page 86
Figure 20: Message Decisions Irom Consumer Interviews...... Page 90
Figure 21: A Combination oI Strategies.............. Page 93
Figure 22: LiIebuoy`s Product/Promotion Mix..........Page 104








6
Acknowledgements
Education is learning what vou didnt even know vou didnt know.
Daniel J. Boorstin

I would like to thank all those who helped me through the project phase oI the MA
marketing program. I would like to express my sincere appreciation to my supervisor, Dr.
Deborah Roberts Ior her enlightenment oI my knowledge oI marketing communications,
valuable advice and kind support throughout the process oI dissertation completion.

To my sister, Ms. Preeti Suchanti, marketing executive oI Pressman Advertising and
Marketing Ltd. in particular, who introduced me to the idea oI this project and provided
me with valuable inIormation.

A special thanks to Mr. Harpeeet Singh Tibbs- Manager oI LiIebuoy Soap, Ior his
valuable thoughts and access to inIormation that I needed Ior this project. Also, to the
employees oI Hindustan Lever Ltd. who were extremely patient and helped me to gather
inIormation about the company`s marketing communication actvitites. Additionally a
note oI appreciation Ior those who were interviewed and provided me with insights,
which helped me shape the project.

Most importantly, I would like to thank my parents who were always there to motivate
me. I would also like to thank my close Iriends at Nottingham Ior being around to
discuss my ideas.

Lastly, I would like to thank the academic and library staII at University oI Nottingham
Ior their support throughout this year.







7
Chapter 1: Introduction

1.1 Overview

This section provides a brieI introduction to marketing in the FMCG sector in India. A
summary oI the motivation to do this project is outlined, Iollowed by a short note on the
importance oI this project. The chapter ends by outlining the structure oI the dissertation,
which will lead the reader through the diIIerent sections oI the report.

1.2 The Changing face of FMCG marketing in India

The Indian FMCG sector is the Iourth largest sector in the economy with a total market
size in excess oI $13.1 billion (Crisil, 2006). Not only being recognised as having a
strong MNC presence and a well established distribution network, there exists intense
competition between the organised and unorganised segments and low operational cost.
Availability oI key raw materials, cheaper labour costs and presence across the entire
value chain gives India a competitive advantage. The FMCG market is set to treble Irom
$11.6 billion in 2003 to $33.4 billion in 2015 (Crisil, 2006).

Penetration level as well as per capita consumption in most product categories like jams,
toothpaste, skin care, hair wash etc. in the country is low, indicating the untapped market
potential. The burgeoning Indian population, particularly the middle class and the rural
segments, presents an opportunity to makers oI branded products. Their objective lies in
encouraging consumers to purchase branded products. Growth is also likely to come Irom
consumer upgrading` in the matured product categories.

FMCG marketing is no more the same, due to the changing consumer mindset. More
knowledgeable and discerning customers coupled with changing competition and a
saturated market is giving a tough time to the FMCG marketers. The changed scenario
not only demands a new game plan with a sharp and decisive strategy but also a great
deal oI creativity and insight. Some oI the players in Indian FMCG industry have already
taken a lead and are smartly moving to chart a success story Ior their brands. Departing
Irom the oIt-beaten track oI resorting to heavy advertising, the major spenders oI the
8
FMCG segment are adopting innovative avenues, such as competitive pricing, small
packaging, rural initiatives and personalised promotional strategies, in an eIIort to woo
consumers, while retaining their proIitability.

'You need to drive market growth and give it sufficient amount of tail wind in vour
favour. Advertising and promotion spends are what convert market growth to vour
growth, said D. Sundaram, Director - Finance at HLL (Venkatraman, 2006).

Undoubtedly, all this is beneIicial Ior the consumers, who can now choose a variety oI
products, Irom a number oI companies, at diIIerent price points. However, Ior the players
who cater to the Indian consumer, the Iuture brings a lot more competition. In this
environment, only the innovators will survive. Focus will be the key to proIitability.

From an investor`s point oI view, Indian FMCG companies do oIIer long-term growth
opportunities given the low penetration and usage in most product categories. To choose
the best investment opportunities, companies need to look at the innovators that have
been constantly proactive to market needs and have built strong, eIIicient and intelligent
distribution channels, along with eIIective marketing communication strategies.
Management vision to growth is the key, as consumers going Iorward are likely to
become even more sophisticated in their demand.

'Nobodv wants to come to these so-called backward regions, not even those who have
migrated to cities from these areas. However, the realitv is that it is in these regions
where the real demand for products, services and manpower is.`
- N J Yasawy- Board oI Governors, ICFAI

1.3 Research Motivation

The inspiration to conduct this research was motivated by Pressman Advertising and
Marketing Ltd, (an advertising and marketing agency in India) who were looking to carry
out research on FMCG products. Hindustan Lever was one oI their main clients, and the
company was involved in designing their advertisements. Additionally, the researcher
was impressed by the change in the rural consumers` purchasing decisions towards
FMCG products.
9
1.4 Importance of Project

The project will add value to the academic community, as it will help companies to
understand how they can develop eIIective marketing communications. The experience
oI undertaking this project enabled the author to gain Iirst hand knowledge on research
methods and processes. Additionally, it will help Hindustan Lever as a company to
realize how to promote and revitalize their LiIebuoy brand.

1.5 Structure of Project

The structure oI the project Iollows what Yin (2003) classiIies as 'linear analytic. In
this kind oI structure, the sequence oI subtopics begins with the issue or the problem
being studied, which in this case has been deIined as the research motivation.

This is Iollowed by a review oI relevant literature written earlier. The subtopics then
proceed to cover the research methodology used, the Iindings Irom the data collected and
analysed, the recommendations, and the conclusions oI the study. Figure 1 highlights
how diIIerent sections connect with each other and a brieI summary oI the contents oI
each chapter.















10

Figure 1: Outline of the Project

















Chapter 1 provides an introduction to the FMCG sector in India. The research motivation
and the importance oI the project are outlined.

Chapter 2 presents a short overview oI the nature oI the rural industry in India. This
section also presents a PEST analysis, which will be useIul in understanding the
regulations, which control the FMCG sector oI the Indian rural industry.

Chapter 3 provides the reader with an overview on the success several FMCG companies
have achieved in leveraging the power oI their brands.

Chapter 4 outlines the research design, i.e. the 'case study method that was used in
conducting the project. The objectives Ior this project are deIined Iollowed by strengths
and weaknesses oI the chosen research design.
2. Industry Overview

3. Literature
review

6. Consumer
Study
Research Question
& Aim
External Audit
Internal Audit
Interview Findings
1. Introduction -
Issue to be studied
4. Research
Methodology
7. Analysis
7. Recommendations
8. Conclusion
Interview Findings
5. Case Study
Organization
11

Chapter 5 presents Hindustan Lever`s LiIebuoy as a case study. The Iindings obtained
Irom diIIerent sources oI the case study method documentation, archival records and
interviews are presented and analyzed.

Chapter is a study oI consumers` perspective which aims to explore their insights about
marketing communications oI FMCG products. Findings Irom interviews are analyzed

Chapter 7 is a discussion oI the Iindings with respect to theories in the literature review.
It is Iollowed by limitations oI the study, with some suggestions Ior Iuture research in this
area.

Chapter 8 provides recommendations to the LiIebuoy brand based on the Iindings and
opportunities in the environment.

Chapter 9 is a conclusion to the entire project.


















12
Chapter 2: 1he Rural Industry in India


2.1 Overview

This section presents a short overview oI the nature oI the rural industry in India. The
size oI the industry is deIined. This section also presents a PEST analysis, which will be
useIul in understanding the regulations, which control the FMCG sector oI the Indian
rural industry.

2.2 Size and nature of the industry

'Rural India offers a tremendous market potential, says Saugata Gupta, marketing head,
Marico Industries Ltd. 'A mere one per cent increase in Indias rural income translates
to a mind-boggling Rs.10,000 crore of buving power. Similarly, a thought is echoed by
S Sridhar, vice president- marketing and sales (2 Wheelers), Bajaj Auto Ltd., who says
that nearly two-thirds oI all middle-income households in the country are in rural India
(Ramakishen & Krishnamachayulu, 2003). 'And, close to half of Indias buving potential
lies in its villages.

As Mahatma Gandhi (1926) said, 'Indias wav is not Europe. India is not Calcutta and
Bombav. India lives in her seven hundred thousand villages. Despite this strong
potential, rural markets have not been successIully exploited.

2.3 PEST Analysis

Presented below is the PEST Iramework, which categorises the environmental inIluences
into political, economic, socio-cultural and technological Iactors. It helps summarise the
key Iorces at work in the macro-environment, in this case the FMCG sector oI the Indian
13
rural industry (Johnson & Scholes, 2002). This will enable the reader to understand the
nature oI the industry.

Political

Since the early 1990`s, the Government has taken a series oI bold initiatives and has
opted to reach Ior trade, Iiscal, marketing and policy measures with a major thrust on
improvement oI competitive eIIiciency oI Indian industries by utilising Ioreign
investment and technology to a greater degree than in the past (Brahmankar & Gupta,
2000). These new reIorm measures ended the regime oI licensing and controls and has
made the industry virtually dependent.

SigniIicantly, this new policy permits the Iree import and export oI virtually all products
with minor exceptions. Imports oI capital goods and raw materials are more liberal.
Introduction oI automatic approvals oI Ioreign technology agreements and Ioreign
investment, and restructuring oI the public sector is observed. Undertakings and the thrust
on export are other measures announced by the government with a view to improve
competitiveness oI Indian industries and promotion oI exports (Brahmankar & Gupta,
2000).

In other words, the Iorce oI this new policy has more Iocus on Iree play oI market Iorces
instead oI state control, in determining the country`s Iuture growth and development. The
government now Iavours outward oriented trade and industrial policies where export
marketing is given prime importance. Under this new policy, industries can expand,
modernize, diversiIy and internationalise their operations with greater Ireedom
(Neelmegham, 2000, p.5).

This has changed the economic scenario, giving Iurther boost to marketing, and motivates
the corporate sector to Iurther stretch out to tap the untapped rural markets` (Dey &
Adhikari, 1998, p.1).

Today, there is a large Ilow oI investment Ior rural development programs Irom the
government and other sources. Moreover, there are changes in the land tenure system
causing a structural change in the ownership pattern and consequent changes in buying
14
behaviour (Agadi & Paramashivaiah, 1997). This in turn has aIIected the FMCG sector
that that has been witnessing high growth Ior the past decade.

Economic

There has been an increase in population, and hence increase in demand. There is a
market increase in the rural incomes due to agrarian prosperity (Agadi & Paramashivaiah,
1997). Increased contact oI rural people with their urban counterparts due to
development oI transport and a wide communication network has been observed.

Moreover, a boost in literacy rates and the educational level among rural Iolks, and the
resultant inclination to lead sophisticated lives is seen (Agadi & Paramashivaiah, 1997).
Economic reIorms have enabled GDP to grow at an average annual rate oI about 6.4
between 1992-93 and 1999-2000. ThereIore, consumption of FMCG products has
increased (Brahmanakar and Gupta, 2000).

According to the National Council Ior Applied Economic Research (NCAER)
projections, the number oI middle income and high income households in rural India is
expected to grow Irom 80 million to 111 million by 2007. Faced with intense competition
in their urban markets, where high media spends and expensive consumer promotions are
the order oI the day, marketers oI FMCG companies are giving up to milk this great rural
opportunity (Mishra and Gupta, 1999).

Social

The rural society is a tradition-bound community in which culture and religion play a
strong inIluence in buying behaviour. It comprises oI halI a dozen religions, 33
languages, 1,650 dialects and diverse subcultures (Seshan, 1998, p.126). Women have
extensive work loads with dual responsibility Ior Iarm and household production. They
have an active role and extensive involvement in livestock production, Iorest resource use
and Iishery processing.

15
Discrimination in education is a major issue. A girl may be deprived oI schooling and
literacy Ior no other reason than that she is Iemale. 70 oI poor women in India cannot
read or write (Seshan, 1998).

Illiteracy oIten excludes people Irom written knowledge and decision-making (Naik,
1997). 'The tvpe of work thev do is limited bv their low education levels, states the Rural
Poverty Report (2001) on the subject oI rural women. Cultural norms mean that in many
countries women are excluded Irom participating in decisions aIIecting both their
households and communities.

Companies are now looking at the empowerment oI women as it involves many issues -
economic opportunity, social equality, and personal rights. Women are deprived oI these
human rights, oIten as a matter oI tradition. In rural areas, women are generally not
perceived to have any meaningIul income generation capacity, and hence, they are
relegated mainly to household duties and cheap labor. Without the power to work and
earn a good income, their voices are silenced. Even in matters oI sex and child bearing,
women oIten do not have the ability to oppose the wishes oI their men (Sahoo & Panda,
1997). FMCG companies are now carrying out various programs to educate these
women and provide them with jobs to market and sell their products.

1echnological

With the cost oI technology Ialling day by day, several companies are attempting to
create virtual bazaars or agri-portals akin to weekly mandis`
1
. The most notable virtual
mandis` are the e-choupal created by ITC
2
, India Agriline by EID Parry
3
and Dairy
Portal by Amul
4
(Kashyap, 2003, p.10).


1
commodity market, where buyers and sellers meet and transact business.
2
ITC Welcomgroup is amongst India`s Iinest and Iastest growing hotel chains, it consists oI over 65 hotels
across more than 50 destinations in India.
3
Indiagriline is an eIIort to provide an end-to-end solution addressing the needs oI the Iarming community in
South India. Has Internet kiosks in 16 villages around a sugar Iactory in Nellikuppam. These kiosks are
called Parry's Corners are a one-stop shop that acts as a storeIront Ior buying Iarm inputs, a market Ior
selling goods, and an Internet caIe Ior communication and inIormation services.
4
The Dairy Portal is designed to provide an interactive dairy inIormation and education channel to the
Iarmers and others in the dairy sector.

16
The e-choupal project, launched in June 2000, has become the largest Internet-based
Corporate Intervetion in rural India. E-choupal`s network reaches out to more than a
million Iarmers in over 11,000 villages through 2,100 kiosks that ITC has set up across
Iour states- Madhya Pradesh, Karnataka, Andhra Pradesh and Uttar Pradesh (Sivakumar,
2003, p.35). ITC has planned to extend the e-choupal initiative to 11 more states across
India over the next seven years (Ibid, p.38). Thus, FMCG companies are now trving to
involve information technologv in an attempt to market their products to the rural
consumer.

2.4 Synopsis

This chapter summarises that the Indian rural industry has seen signiIicant growth in the
past Iew years. Several Iactors mentioned above have led to greater number oI rural
consumers treating themselves to FMCG products. This leads us into the next chapter,
which will analyse prior literature that has been written speciIically on marketing
communications oI the Indian rural market.











17
Chapter 3: Literature Reiew
'Close to half of Indias buving potential lies in its villages. Thus, for the countrvs
marketers, small and big, rural reach is on the rise and is fast becoming their most
important route to growth.`
S Sridhar
Jice President- Marketing & Sales
Bafaf Auto Ltd.
5


3.1 Overview

The literature review gives an evaluation oI the role oI companies in promoting their
products among rural consumers, and the strategies oI past researchers to eIIectively
communicate their product image. The review is divided into Iour sections. Section 3.2
provides an introduction to rural marketing and its characteristics. Section 3.3 presents
The Marketing Mix model with speciIic adaptations to cater to the rural market. Section
3.4 Iocuses on the notion oI rural communication and how it can be developed. Section
3.5 projects the types oI rural media. Moreover, the concept oI conventional and
unconventional media is discussed. Section 3.6 introduces the challenges oI rural
marketing. Since, the aim oI this project is to analyse how FMCG (Iast moving consumer
good) companies can develop eIIective marketing communication by overcoming the
challenges oI rural marketing (with Iocus on promotional challenges), this section is
useIul in making the connection. The last section is a synopsis oI the review.

3.2 Rural Marketing and its characteristics

Rural marketing is the process of developing, pricing, promoting, distributing rural
specific goods and services leading to exchanges between urban and rural markets,
which satisfv consumer demand and also achieve organi:ational obfectives (Singh, 2001,
p.8).

In other words, rural marketing involves developing manuIactured or processed inputs or
services to rural producers or consumers. . The concept oI rural` and marketing` though
used Irequently in various Iorms, has eluded a precise and clear-cut deIinition. When one
reads them together, the resulting concept rural marketing` conveys diIIerent things to

5
Bajaj Auto is the world`s Iourth largest two and three-wheeler manuIacturer.
18
diIIerent people. Jha (1998) says that this conIusion may lead to a distorted understanding
oI problems oI rural marketing, poor diagnosis and thereIore, a Iaulty prescription. To
understand the rural market better, it is important to look at its characteristics. This is
demonstrated in Figure 2 below.



















Source: Bansal, 2004

As Bansal (2004) says, many rural areas are characterised by seasonal variations and
fluctuations in income generating activities and employment. He says that a large
proportion oI the rural people are engaged in activities relating to agriculture.
Ramakishnan and Krishnamacharyulu (2003) Iurther claim that Indian agriculture is still
subject to the vagaries oI monsoon, and has a dual impact on demand, thus aIIecting the
income oI the rural people.

For example, poor monsoons may cause hardening oI soil and weakening oI Iarm
animals, leading to a greater need Ior the use oI tractors. It may leave the Iarmer with low
Figure 2: Characteristics of the Indian Rural Market
RURAL
MARKET

Low income influenced
by seasonal fluctuations
Quality conscious Low risk taking ability
Low literacy
Price
sensitive
High brand
loyalty
Resistant to change
Influenced
by traditions
Moderate
aspiration
levels
Diverse customs, languages
& social structures
19
purchasing power. Thus, rural consumers are oIten prone to Iluctuations in seasons, in
turn aIIecting their labour and income generation. Moreover, during harvest and Iestival
seasons, demand Ior products oIten increases, leading to an alteration oI income
generation.

In terms oI the literacy level, Bansal (2004) proposes that an estimation of rural Indias
literacv rate of 28 compared with 55 of the whole countrv portravs a great amount
of uneducated consumers. He claims that a large proportion oI the rural consumers
unconsciously buy products without having any prior knowledge about it. However, he
states that adult literacy programmes are now being launched in the rural areas oI India
which are bound to enhance the literacy rate.

A third characteristic oI the rural consumer is his/her low resistance to change. Bansal
(2004) proposes that a customer Irom the rural segment is oIten unwilling to alter his/her
product purchase as not only does it involve complications, but also eIIort. Consumers
oIten rely on the retailer Ior inIormation regarding quality oI the product, suitable price,
quantity, promotional schemes, inIluences oI adverts, consumer Ieedback etc. Most rural
consumers are unable to decipher which product is best suited Ior their needs. Moreover,
a rural consumer is rarely attracted by the packaging or the brand name oI the product.

'The Indian user is verv unique, extremelv value-conscious and a super bargain hunter
with precious little brand lovaltv,` says Sridhar T. Pai, Iounder and CEO oI the
Bangalore-based telecom research Iirm Tonse Telecom (Business Week, 2006). Thus,
Bansal (2004) concludes that rural consumers possess a low resistance to change and
rarely indulge in new or innovated products.

A Iourth and important characteristic oI rural consumers is their sensitivity to price. A
winning Iormula Ior any brand to succeed in the rural market is to oIIer an aIIordable
price and match the expected quality. In other words, the value Ior money is an important
concept that will diIIerentiate a successIul brand Irom the other players in the market. A
consumer in the rural market is need driven and, hence, cost-conscious. His decisions are
deliberate and demand value Ior each paisa paid. The rural consumer earns on a daily
basis and spends too on a daily basis. He has his own daily liIestyle, and preIers going
with it, and has no urgency about changing trends, liIestyle oI attitude (USP Age, 2006).
20
Bansal (2004) and Singh (2001) contradict Sridhar Pai`s statement oI the low precious
brand lovaltv of the rural consumer. They pose an argument that it was traditionally
believed that the rural consumers largely purchase unbranded products oI simply accept
the brands that are oIIered to them. However, an ORG-MARG survey showed a high
preIerence oI rural Iolk purchasing branded products, thus proving high brand loyalty.
Toothbrushes, soaps, washing powders, shaving blades and shampoos were categorized
as the most popular branded` purchases.

Another important characteristic shown in Bansal`s (2004) literature portrays the
influence of traditions in rural purchasing power. Being a tradition bound and
conservative community, culture, religion and superstitions strongly inIluence their
purchasing decision, say Dey and Adhikari, (1998). This is clearly evident in the way
religious Iestivals, such as Dussehra
6
, Durga Puja
7
, Holi
8
, and Deepawali
9
, celebrated in
rural India (See pictures below).






In addition, lavish spending on weddings and dowry is a reality and is expected to
continue Ior a number oI years. The pace oI liIe is slow resulting in the tendency to stick
to old principles and thoughts.

Bansal (2004) asserts that the aspiration level oI the rural people when compared to their
urban counterparts is moderate, but slowly rising. Environmental changes are driving
aspiration. Better connectivity and communication, and the literacy leap, are together
increasing the aspiration oI the Indian rural consumers at every level.

The reason why these changes drive aspiration is lucidly explained by the well-known
anthropologist, Arjun Appadurai, oI Yale University. 'Imagination is not about

6
One oI the most important Iestivals celebrated in Southern India. Celebrations are unique ranging Irom
worshipping goddess Chamundeshwari (Durga) to exhibiting colorIul toys.
7
The biggest annual Iestival in Bengal and eastern India, celebrated over a period oI 9 days.
8
A Iestival oI colours.
9
A Iestival oI lights.
21
individual escape, it is a collective social activitv. Informational resources are needed for
people to even imagine a possible life, weave a storv and a script around themselves, and
place products in emerging sequences. Imagination mav not alwavs lead to action, but it
is a prelude to action. (Bijapurkar 2001, Business World).

Mr. A. Sivakumar, ChieI Executive oI ITC states that 'our experience has shown that the
aspirations of rural Indians are not verv different from ours- thev want a better qualitv of
life for themselves and better future for their children (USP Age, 2006).

Thus, companies should not Iorget that a rural consumer has an aspirational urban
consumer in him. They have to provide products with a mix oI both utilitarian and
aspirational Ieatures. Rural purchasing propensity is no less than urban. However, what
diIIers is the price at which the products are oIIered, and under what circumstances
(Bapna, 2005).

In terms oI quality consciousness, rural consumers do not get inIluenced by a lower
price. However, this is mostly in the case oI consumer durables, and not FMCG products.
Consumers oIten consult their Iriends or relatives beIore purchasing any durable product.
In the case oI an FMCG product, price still remains the most important criteria while
making a purchase (Bansal, 2004).

Rural people prove to be economically backward and poverty being one oI the main
problems in India, these consumers portray a low level of risk taking while making
purchases says Singh (2001). Bansal (2004) adds that there exists a multiplicity of
languages, social structures and customs, which may add to complexity oI marketing
communication programmes.

3.3 The Marketing Mix for Rural India

Having learnt about the meaning oI rural marketing, it is vital to analyze the rural market
Iurther. It can be said that tapping this market requires a change in the marketing concept
(Gupta, 2000). Various marketing practitioners state that the marketing concept is based
on the philosophy that Iirms should analyze the needs oI their customers and then make
decisions to satisIy those needs, better than the competition. In order to achieve these
22
marketing objectives, one needs to have a strategy that includes diIIerent elements - the
various parts oI the marketing mix, says Gupta.

Philip Kotler, a leading marketing philosopher introduced the concept oI the 4Ps-
product, price, promotion and place (distribution). This notion can be customized to
meet the needs oI the Indian market. Gupta (2002) claims that The 4 Ps need to include
Packaging` and :Retailer' as special Iocus areas. Further, to ensure the sustainability oI
the marketing mix, :Education' and :Empowerment' are required to be at the base oI the
mix, as they help in generating widespread participation Irom the rural clientele by
enhancing their standard oI living. Thus, the modiIied marketing mix is shown in Figure
3.


Source: Gupta (2000)

Philip Kotler stated that Authentic marketing is the art of identifving and understanding
customer needs and creating solutions that deliver satisfaction to the customers, profits
to the producers and benefits to the stakeholders.`

The product oIIerings have to be signiIicantly customized Ior the rural consumers
(Gupta, 2000). Also, due to the low level oI income and literacy level, it is imperative
that the basic needs oI the consumer are met (Gupta, 2000).

For example, in India, 70 oI the rural consumers who buy shampoo preIer sachets.
Sachets are plastic pouches that contain approximately 20 millilitres (.68 oz.) oI products
Retailer
Packaging
Product, Promotion, Place (Distribution), Price
EDUCATION EMPOWERMENT
CUSTOMISATION
Figure 3: The Marketing Mix for Rural India
23
(Bailey, 2003). Sachets were Iirst introduced in India in the 1990`s by an Indian company
selling a 10-millilitre sachet oI Velvette shampoo. BeIore the introduction oI sachet,
shampoo in India was available only in larger bottles, thereby making it unaIIordable
with small income (Moorthi, 2002). Sachets meet the needs oI the rural consumer in
several ways. They are inexpensive, occupy a small amount oI space, and they allow
consumers to experiment with new products that they may never have tried beIore
(Bailey, 2003).

Colgate has Iollowed the very successIul sachet route by introducing toothpowder in 10
gm. sachets oI Rs.1.50 each and the toothpaste with SuperShakti in 15 gm. packs oI Rs. 3
each. The aIIordable price has increased the sales in rural India and there have been many
who have graduated Irom toothpowder to tooth-paste in the process (Krishnamurthy,
2002).

Similarly Coca-Cola has Iound success by thinking small. In a packaging change aimed
directly at the rural and lower-income markets, Coca-Cola launched a new 200 mL (6.8
oz.) bottle Ior the equivalent oI 10 cents in 2001 (Kriplani, 2003). AIter introducing the
smaller size bottle, sales increased by as much as 34 per cent by the end oI the Iirst
quarter in 2002 (Kriplani, 2002).

Packaging in smaller units clearly helps to increase the aIIordability oI products Ior rural
Indian consumers. HLL has also responded to low price with its own version oI Lux
shampoo. The company claims the recently launched 30ml bubble pack Ior Clinic Plus
(Rs.8), is an innovative and cost-eIIective alternative Ior sachet users.

According to David Oglivy (1981), 'If voure trving to persuade people to do something,
it seems to me vou should use their language, the language in which thev think.
(http://thinkexist.com).

In terms oI promotion, companies cannot rely on conventional advertising techniques in
India`s rural areas, where only on in every three households owns a television, and more
than halI oI the villagers are illiterate. Instead, companies need to adopt more innovative
methods oI advertising to reach their potential customer base. A product that appeals to
24
the urban consumer, may not appeal to one who is rural, due to varying liIestyles. Thus,
even iI the media reach him/her, there is no guarantee oI having an impact.

Few oI the available options in traditional media include puppetry, Iolk and theatre songs,
wall paintings, posters and agricultural games. These innovative means oI
communication are oIten successIul.

For example, billboards displayed on hand pumps and ponds helped in selling soaps to
rural consumers. The rural people in India use wells, handpumps and ponds Ior washing
and taking a bath. For the Iirst time in the history oI advertising, these were branded.
Special stickers were put on the handpumps, the walls oI the wells were lined with
advertising tiles and tinplates were put on all the trees surrounding the ponds. The idea
was to advertise not only at the point oI purchase, but also at points where the products
are consumed. Consumers who bought these brands got a sense oI satisIaction aIter
seeing their choice being advertised in these places. Those who bought other brands
might well be thinking why they hadn`t bought this brand.

ThereIore, it would be vital to stress upon the need to concentrate on both product
development and communication in order to attract the rural consumer. A popular
concept practiced by the marketing gurus regarding product and promotion strategies in
international markets. This is illustrated in Figure 4 below.
Source: Gupta (2000)
Straight Extension
Communications
Adaptation
Product
Adaptation
Dual Adaptation
Product
Invention
Do not change Product Adapt Product Develop New Product
Do not change
Promotion
Adapt
Promotion
PROMOTION
PRODUCT
Figure 4: Product/Promotion Mix
25
In order to be successIul, companies should avoid straight extension. Straight extension
involves selling the same product to new markets. Rather than changing their Iocus to the
urban market, Iirms should continue Iocussing on the rural market. Bansal (2004) claims
that about 285 million live in urban India whereas 742 million reside in rural areas,
constituting 72 oI India`s population residing in villages. Moreover, an increase in
agricultural productivity, growth in rural disposable income and lowering oI diIIerence
between that oI urban and rural consumers make these markets attractive, he says.

According to Bansal (2004), marketers are Iorever seeking Iresh challenges and scouting
Ior more and more clientele to be drawn into their sphere oI inIluence. The urban
consumer has always been pampered with the most dazzling array oI goods and services
Irom every industry. But the urban market is Iast shrinking due to saturation caused by
the competition and the growth rate over the past years has shown a declining trend.

As Adi Godrej says, 'It is not the rural markets, but us who are sleeping (Business
India). Thus, Figure 4 shows, some Iorm oI adaptation, preIerably product or
communication or both may be necessary.

According to Sandip Bansal, Country Head oI Xpanse Asia, 'No companv can succeed
bv communicating with consumers with a single message. Each region in India offers its
own unique challenge. So, a one message fits all will not work here (USP Age, 2006).

This reIers to the strategy oI developing new products by modiIying or improving on the
product innovations oI others contrasting, with the strategies oI pioneering and imitation,
Iormally known as product adaptation.

While it is true that rural consumers are not quick to adapt to new products or technology,
they are not against being educated on new things. However, this should be
communicated to them in a language and style they understand, with clear logic and
conviction (Shashidhar, 2006), explaining the need Ior dual adaptation. Product
inventions may also be suitable as they may generate more returns rather than simply
duplicate the strategy used Ior urban markets.

26
It is well known that marketers who take the trouble oI developing communication
strategies which connect better with rural audience always succeed, provided the rural
customers perceive value Ior money in the product or service (Shashidhar, 2006), proving
the need Ior communication adaptation.

MRF is a good example oI communication adaptation, when the company decided to
introduce bullock cart tyres with nylon. The company
decided to call it 'Pahelwan Chap Buggv Gadi Tvres
(Bullock cart tyres as strong as a wrestler). To make
the local consumer gain an understanding oI the brand,
the company came up with a nylon thread breaking
contest. The company thereIore communicated the
message- that MRF tyres are as strong as nylon thread, since nylon thread doesn`t break.
They aimed at communicating a speciIic solution Ior their vehicles, that oI 'strength.
According to a company spokesperson, the reason they adopted this unique method was
that Kushti (a game oI wrestling, see picture on the right) is a well known and enjoyable
sport in rural areas, and villagers weigh strength by playing this game. Thus, as Galla
(2006) says 'Connect with his heart, to connect with his wallet.

It has to be kept in mind that distribution (place) networks tend to be unique and oIten
times disjointed (Dawar and Chattopadhyay, 2002). India is no exception. BeIore a
company even considers entering the rural market, it is important to Iirst get an
understanding oI the current distribution system characteristics as well as the ways that
the system is likely to change over time (Prahlad and Lieberthal, 2003). In doing so, a
company can asses whether or not accurate and timely product distribution can be
achieved with-out Iirst investing in the distribution networks.

Some oI the characteristics unique to rural India`s distribution networks include the
modes oI transportation used as well as the point oI sale. Over 3 million retail outlets in
India are reached by companies that produce packaged goods. Methods oI transportation
used include camels, bull-drawn carts, bicycles, trucks and trains (Prahlad and Lieberthal,
2003).

27
In terms oI point oI sale, it is important to be aware that
most rural consumers purchase their day-to-day goods at a
kirana or street shop (See picture on the right). These
small open stalls line the streets and are approximately the
size oI an average living room. People buy everything
Irom bananas to razors here. With over 2.5 million kiranas throughout India`s rural towns
and villages, keeping the shelves stocked is one oI the main challenges Ior manuIacturers
(Bullis, 1997). In order to reach these local shops and establish a brand presence,
companies need substantial amount oI working capital and a large committed sales Iorce
(Dawar and Chattopdhyay, 2002).

Villagers also purchase goods Irom Haats and
Melas
10
(picture on the leIt), village retailers, hawkers
and also Irom nearby towns, in addition to making
occasional purchases Irom cities. Out oI all these sources
oI purchase, it is estimated that Iirstly, villagers preIer to
buy goods Irom Haats`.

'A studv on Haats indicates that despite the same product being available in a village
shop, 58 of the rural consumers visiting the Haats bought goods due to better prices,
qualitv and varietv (Kashyap, 1998) (Velayudhan, 2002, p. 44). It will be unjustiIied to
say that rural consumers are less bothered about product quality.

Marico, an Indian edible oil company has Iound that the rural consumers in the interior or
India willingly pay a reasonable price premium Ior branded cooking oil, over community
oil, because they are certain oI its consistent quality. Unbranded products are oIten
considered by some oI them to be adulterated.

Low prices attract the rural consumer, as seen in the example oI Britannia`s Tiger
biscuits. This product became an instant success when the company innovated its
distribution channels, retained the ply chain eIIiciencies and passed on the beneIits to the
consumer in the Iorm oI reduced prices (Pradhan, S. 2005, USP Age).


10
Temporary open-air market; generally held at Iixed site or on Iixed day or at Iestival time.
28
Looking at pricing, it must be noted that a signiIicant portion oI the rural population is
paid daily wages. Daily wage earners are not expected to have surplus, money, and
thereIore, they make purchases only to satisIy their everyday needs. The implication is
that pack sizes and price points are critical to sales, and importantly, rural consumers
view the purchase-trade oII dilemma across a much wider range oI product categories.
This is commonly known as the product-attribute Iixation trap, which happens Ior several
reasons (Aaker, 1996).

Firstly, the attributes are the most important part oI the purchase decision and companies
oIten Iocus on delivering immediate needs. Secondly, the attributes are more visible to
customers and they are more comIortable talking about it. It is somewhat tedious to
delve into the underlying belieIs oI consumers. Thirdly, Aaker (1996) mentions that
attribute-oriented beneIits are relatively easy to copy.

'A rural consumer is brand loval and understands svmbols better. This also makes it easv
to sell look alikes, says Mr. R.V Rajan, CMD, Anugrah Madison Advertising.

An example is the case oI Marico Industries Ltd.`s Parachute hair oil. The company
introduced a small bottle oI hair oil which was copied by many local manuIacturers who
sold spurious oil in a package that was startlingly similar to Parachute. To counter this,
the company introduced a new Ilip top packaging and jars with lids (Singh, 2001).

According to Regis McKenna, the Silicon Valley brand guru, a company will get 'out-
specd and a competitor may announce a product with superior technical speciIications.
This could result in an inIerior position Ior the company. As a result, the nature oI
competition is much greater.

For example, a beverage manuIacturer is not only competing with other manuIacturers in
its category, but also with other products that consumers may consider a one-oII luxury
purchase such as a chocolate bar. ThereIore, the marketer will have to establish a way in
which the product can be made aIIordable.

At a seminar in Chennai, on rural marketing for competitive advantage in globalised
India`, marketing pundits echoed that a sound network and a thorough understanding oI
29
the village psyche are a SINE QUO NON
11
Ior making inroads intro the rural market
(Singh, 2001). Thus, the price sensitivity oI a consumer in a village is something the
marketers should be alive to.

Moving on Irom the base oI the pyramid, it is appropriate to discuss the 5
th
P` oI the
rural marketing mix, namely packaging. The reason Ior excluding packaging out oI the
product as a special Iocus area is that due to the low literacy levels oI the rural masses,
the importance oI symbols and packaging become more important in having a high brand
recall.

Taking the example oI Asian Paints` Iamous mascot Gattu
12
` (see
picture on right), one oI the most Iamous characters in the Indian
marketing history, the company was able to help the illiterate people
in identiIying their brand. It became popularly known as the
Ladkewala Paint and the brand soon had a high brand recall because
oI the mascot on its packaging. In addition, rural consumers are daily wage earners and
preIer smaller sized packages with aIIordable price tags. This concept has already been
discussed in the earlier part oI this literature.

Progressing towards the top oI the pyramid is the retailer, also known as the cog in the
wheel`. Figure 5 on the Iollowing page illustrates this.











11
Indispensable condition or qualiIication; a pre-condition.
12
A lovable, mischievous little boy with a lopsided grin, originally created in 1954 by cartoonist RK
Laxman.
30















Source: Gupta (2000)

Data on rural consumer buying behaviour indicates that the rural retailer inIluences 35
per cent oI purchase decisions. ThereIore, sheer product availability can determine brand
choice, volumes and market share. Thus, the role oI the retailer is important in rural
markets, as he/she would be the one who provides inIormation regarding quantity,
promotional schemes, inIluences oI adverts, consumer Ieedback etc. to the company.

Rural consumers will go to the shops themselves to see and buy goods; hence a strong
bonding in terms oI trust between the customer and the retailer. This relationship is
termed Jvavahar`, which is largely present in social dealings (Singh, 2001). The buying
behaviour is also such that the customer doesn`t ask Ior the things by brand, but by price,
like, 'paanch rupev waali chave dena (tea Ior 5 rupees, please). Thus, it is up to the
retailer which brand he/she wants to sell. ThereIore, there exists a need to get the
retailer`s support through proper trade promotion activities. It is this Jvavahar` that the
retailer enjoys, builds and strengthens. This helps in acquiring more space on retail shelI
and convincing the customer to buy the brand (Gupta, 1995).
Product Price Place Promotion
Marketing Factors
InIormation
Search
Evaluation
oI
Alternatives
Post-purchase
Evaluation
Purchase Problem
Recognition
Figure 5: Retailer- The cog in the wheel
Product Price Place Promotion
Psychological Personal Social Cultural
Retailer
Personal & Environmental Factors
31

The two biggest problems that rural India Iaces are illiteracy and unemployment. To
integrate them in one`s marketing mix; one must ensure that the product oIIered gains
wider participation and better chances oI success. This gives rise to the concept oI the
two E`s, Education and Empowerment, that Iorm the core oI the rural marketing mix.
This concept presents an opportunity to improve the liIe oI rural Indians and thus ensure
that they actively patronize the company`s products.

Since the vast majority oI rural India lacks basic education and a modern outlook, it is
important that company while introducing a new product should look towards building
quality and not just selling products. It is important to consistently keep in mind that the
customers` liIe is going to be enhanced aIter product consumption (Gupta, 2000). There
are huge disguised unemployment levels in agriculture and lack oI employment in other
sectors. Thus, any concept which causes income generation would be Iavoured, more that
the traditional marketing mix concepts (Gupta, 2000). Thus, education and empowerment
add to the modiIied rural marketing mix concept.

3.4 Rural Communication

Rural communication has recently emerged as a key concern Ior communicators oI
proIit-oriented corporations, who explore rural areas to market their products. A major
challenge Ior the rural communicator is conveying eIIective messages to the target
audience. Velayudhan (2002, p. 102-104) identiIied a number oI Iactors inIluencing the
communication oI messages. According to him, messages need to take into account the
Iollowing: Language, pictorial presentation, Iorm, source and association. This is shown
in Figure 6, in the Iollowing page.








32

Figure 6: Message Decisions











Source: Velayudhan (2002) p. 103

In terms oI language, the message should take into account the culture and religion oI the
consumers, including local Iestivals and sentiments. Das Gupta and Menon (1990)
showed how Dabur distributed religious texts and calendars with religious themes while
advertising their products. Rural audiences preIer messages that are straightIorward,
comprehensible and said in a simple language. In urban areas, Ior instance, a shampoo
may connote bounce and beauty, and toothpaste may imply confidence and girlfriends
but in less sophisticated markets, marketers are saIe being straightIorward about the
products` purpose.
Message
Language
Pictorial
Presentation
Form
Source
Associations
Meaning: Words carry
diIIerent meaning by region
and cause distortions
Simple: Improves receptivity
Improves recall
Utilitarian: InIluences attitude
and preIerence
Narrative: Increases retention
through involvement
Trustworthy: Used Ior
Ieedback on product
perIormance
Likeable: Increases acceptance
Expert: EIIectiveness increases
in evaluation Ior complex
products
Creates interest and improves
concentration
33
Taking the example oI the case oI Dandi Namak, a salt manuIacturing company who
made huge proIits in the rural sector, created a TV advertisement which was bland and
uninteresting. However, without any glitz, it was able to connect to its target customers
because it talked in the language oI its target customers. ThereIore, these brands sent a
powerIul message to its target customers that they are 'made for each other.

Visual messages also have enormous appeal and excellent recall on the rural Iolk. A
study carried out by Das (1994) proved that the use oI signs, symbols and pictorial
presentations, including the design oI the product, packaging, shape, size and colour all
help to create a strong image in the mind oI the rural consumer. Moreover, the rural
consumer preIers utilitarian messages that link the beneIits that they can derive out oI
products. Messages can also be narrative in form, eg., story-based commercials.

A message source is oIten a person who communicates to the rural consumer. Persons
can be Irom a likeable source, a trustworthy source or an expert source. A likeable source
can be a celebrity representing a product image. Rajan (1992) claimed that this boosts
sales. Trustworthy sources may be Iriends, relatives or neighbours having used/possessed
the product. Sirbhaiya (1993) showed that the most important interpersonal source was
the person who possessed the product (trustworthy source). Expert sources represented
opinion leaders, consulted by retail buyers.

Sirbhaiya (1993) showed, Ior example, a Mistry (mechanic) as an opinion leader Ior the
purchase oI bicycles and a Darzi (tailor), Ior the purchase oI sewing machines. Thus,
these are expert message sources.

Associations create interest in the product and improve comprehension. Recall oI
advertisements on products oI relevance to rural audiences was higher when compared to
the urban audience. This was observed in a study by NCAER on Socio-economic effects
of advertising` (Velayudhan, 2002, p.110). The rural audience is generally inIluenced by
the rural context oI the advertisement. Advertisements which show urban settings might
not Iavour rural consumers. ThereIore, while trying to create an interest in consumers,
adverts must be in a relevant environment or situation.


34
3.5 Types of Rural Media

It is important to understand the media that is being adopted by rural marketers. The
medial used is oI two Iorms- mass media (conventional media) which includes television,
radio, print, cinema/theatres, word oI mouth and video on wheels and traditional media
(non-conventional media) that includes puppetry, Iolk theatre, demonstrations, haats and
melas, wall paintings, postcards and posters. Ramkishen (2002, p.112) has provided a
diagrammatic presentation oI Iorms oI rural communication media, which is shown in
Figure 7.
Figure 7: Types of Media Channels








Source: Ramakishen Y. (2002), p.112






Mass media
(conventional)
Traditional media
(unconventional)
Television (Satellite
channels/local cable
networks
Radio
Print
Cinema Theatres
Word oI Mouth
Video on Wheels
Puppetry
Folk theatre
Demonstrations
Haats and Melas
Wall Paintings
Post cards and
posters
Rural Communication
35
Mass Media (conventional media)

1elevision seems to be the most powerIul media oI communication in rural areas. A
survey by NRS-ORG revealed that 31 per cent oI the adult rural population watch TV.
Aneja (1992) stated that there exist two main variables that depend on the use oI TV,
namely, the price oI TV and the level oI rural electriIication. The television is a critical
change and development agent, and the most potent engine Ior marketing and
communicating messages concerning social issues. DD-1 is the channel with the highest
views (Velayudhan, 2002, pp. 112-117). However, where mass media is used, variability
can, at times, back Iire.

On re-entering India in the 1990s, Coca Cola decided to reinvest massively on a TV
advertising campaign. It opted Ior slick commercials, rich in colour, with high production
values, but the eIIect was somewhere lost on a market where 60 oI all TVs are still
black and white (Lahiri, 2002).

Apart Irom the television, radios and transistors are highly visible in villages with a
population as low as 500-1,000. Due to their low price and easy availability, transistors
are a common sight in rural markets.

Aneja (1992) says that music channels are more popular than the news channels. Philips
India took advantage oI this situation. In a bid to trigger brand penetration in the rural
markets Ior the audio segment, it launched a new range oI battery Iree radio across the
nation. This device runs on a small dynamo that has to be charged by a winding key.
With the slogan oI Chavi Ghumao, Radio Bafao (Wind the key, play the radio), the
company`s product became a major hit.

Mr. Rupam Ganguly, general manager oI Philips says 'In smaller markets, given the
erratic supplv of electricitv, and the cost of batteries, I feel that there is an inherent need
and benefit which this product delivers and hence makes the consumers life better
(Ramakishen |2002|, p. 171).

Looking at the print media, the poor levels oI literacy in rural India underscore the role
that the Press can play in advertising products Ior rural consumers. The reach oI regional
36
magazines is better than the English magazines. Aneja (1992) states that the Press can be
considered a key medium Ior advertising only in states having high literacy. Newspapers
normally reach small towns and are read in roadside shops or hotels. In some cases, they
are read in social gatherings.

Moving on to cinema advertising, these are usually in the Iorm oI slides, or 30 seconds to
1 minute commercials. Usually, regional brand managers use slides as they are cheaper
than commercials. National brands on the other hand use commercials as they are more
popular and have a greater impact. Country Iolks usually skip slides or commercials.

In terms oI word-of-mouth, marketers have not as yet given due attention to this
phenomenon. It must be noted that inIormation about new products, quality and
perIormance travel Iast through word-oI -mouth. InIormation is oIten traded at weddings,
Iunctions, visits by Iriends and relatives Irom urban towns, trading and selling etc. Aneja
(1992) states that word oI mouth recommendations in villages make a signiIicant
diIIerence to the success oI a product.

Jideo on wheels, the biggest threat to cinema in the rural
areas, is an innovative concept to promote products through
advertising to the target market. It is about a van that moves
through villages, with the side panels exhibiting the products
(see picture on the right). The vans oIten play a video with
product inIormation (Ramakishen, 2002).

For example, Bharat Petroleum Company Ltd. moves Irom village to village and Iills
cylinders on the spot Ior rural consumers. The company considered the low-income oI the
rural population and thereIore introduced a smaller sized cylinder to reduce both the
initial deposit cost as well as the recurring reIill cost.

Also, Colgate`s launch oI Operation Jagrati` programme to create oral hygiene
awareness was an example oI this. Nearly 100 vans went deep into rural areas to generate
tribals through its 30gm pack. While some marketers have Iound them very useIul to
communicate and promote their brands in rural markets, other marketers do not Iind the
medium viable on a sustainable basis. The weakness oI this system can be attributed to
37
the sheer logistics oI such an exercise, complicated Iurther by bad weather, poor road
condition, local body regulations, incorrect identiIication oI villages, breakdowns and
human Iatigue (Velayudhan, 2002, p. 131).

1raditional (Aon-Conventional Media)

Apart Irom Ramkishen (2002), Velayudhan (2002) has stated various Iorms oI traditional
(non conventional) media which include wall paintings, direct mail, banners placed on
elephants parading through main bazaars, puppetry, processions, tableaus and floats,
contests to promote products, stalls, hoardings and audio-visual publicity at local fairs,
and demonstration and sampling at Haats and fairs. Communication using non
conventional media is eIIective in rural settings. This situation is illustrated in Figure 8
below.


Figure 8: Communicating using Non-Conventional Media

Source: Velayudhan (2002) p.123

Wall paintings are an eIIective way to communicate to rural
consumers as they are cost eIIective (see picture on leIt).
However, visual impacts created are less due to low literacy
levels. Retailers usually have paintings on their shops, walls,
name boards, etc. making the place look attractive. Companies like Coca-Cola, Pepsi and
Nirma use this communication method to advertise their products (Ramakishen, 2002).
Reach the
rural
consumer
Create
product or
brand
knowledge
Generate
Interest
Educate
and
persuade
Puppetry
Drama
Messages on
objects oI
interest
Giant
cutouts
Tableaus
Contests
Stalls at
Iairs
Sampling &
demonstrate
Wall
paintings
Mail to
opinion
leaders
38
Velayushn (2002) says that mailing campaigns can be useIul with opinion leaders who
oIten inIluence advertising agencies.

Folk theatre is yet another way marketers advertise their products. These are mainly
short and rhythmic in Iorm. They educate the people in an inIormal and interesting
manner. It has been used as an eIIective medium Ior social protests against injustice,
exploitation and oppression.

Burrakatha (picture shown on the right)
13
, Jeethi Natakah of
Andhra, Bharai of Gufarat
14
, Tamasha, Soudha and
Dashavatar
15
oI Maharashtra make a bouquet oI Iolk theatre in
India. Brooke Bond Lipton India Ltd. used magicians
eIIectively Ior the launch oI Kadak` Chhap Tea in Etawah district. The Uttar Pradesh (a
northern state oI India) Government, uses Iolk theatre to sell a wide variety oI seeds and
Iertilizers, as also Ior its Family WelIare Campaigns and Ior anti-AIDS campaigns
(Ramakishen, 2002).

Messages on camels, horses and elephants during exhibitions and fairs have proved to
be an eIIective medium. Instead oI staid billboards oI giant cut-outs, putting the message
on objects oI interest during popular events can be eIIective in attracting attention and
creating brand awareness.

Puppetry creates interest and grasps the attention oI the rural audience. Not only an
inexpensive activity, it is the most popular Iorm oI entertainment available to the rural
people. The manipulator uses the puppets as a medium to express and communicate
ideas, values and social messages. For example, the LiIe Insurance Corporation oI India
uses puppets to educate rural masses about its insurance policies. The government oI
India uses puppets in its campaigns to promote various projects like Iamily planning etc.
(Velayudhan, 2002).



13
The most popular Iorm oI narrative entertainment in the state oI Andhra Pradesh. The term burra` reIers
to tambur`, a stringed instrument worn across the right shoulder oI the perIormer. Katha` means a story.
14
A process oI selI-healing and group therapy Irom the Gods.
15
A play involving the 10 incarnations oI Lord Vishnu (God oI protection)
39

The puppet shows in Punjab, Iolk media like Ragini
16
in Haryana Ior
communicating qualities oI Virat cement, Pala
17
and Daskhita in
Orissa Ior promoting saIe electricity consumption and toothpastes oI
Colgate Palmolive, Baul songs
18
(see picture on the right) in West
Bengal are some examples.

Processions, tableaus and floats are common in rural markets and oIten create
excitement. For example, Hindustan Lever Ltd. dressed up a propagandist as Superman`
to demonstrate the super power oI Rin washing soap. In rural towns, such promotional
activities are vital to create and build awareness about the product.

Contests involving products and consumers themselves are used to create awareness and
brand recall, as they result in a high level oI involvement among the participants. For
example, Philips organizes shouting matches. The person who can shout Philips` the
loudest wins. The contest makes a clear association between the company`s audio
equipment and loudness (Mukherjee, 1993). Contests involving consumers can be
interactive and help create awareness, knowledge and trial oI the products.

Stalls, hoardings and audio-visual publicity at local
Iairs (see picture on the leIt are the points oI contact
with the rural audience. For example, Brooke Bond
establishes tea stalls at Iairs that tempt villagers to try
its products, especially iI it is Iree. GeoIIery Manners
participate in village Iairs, where its salesmen dress up in white aprons to resemble
doctors to publicize the beneIits oI the medicine, Anacin (Dasgupta and Menon, 1990).


16
Based on old Iolk-lore Irom the land oI culture- 'Rajasthan.
17
A popular perIormance whose origin goes back to Muslim-mughal period when asimilation oI Satya
Narayan oI Hindu pantheon with Pir oI Muhammadanism, brought about a synthetic cult known as
'Satyapir'. Shows the inter-change oI cultural traits between Hindusim and Islam resulting in subduing to a
great extext the intolerance and anticism oI Muslims.
18
A widely known type oI Iolk music, derived Irom the Sanskrit word 'Vatula means 'aIIected by the
wind disease, mad. People dress in costumes that are halI-dhoti and an alkhalla (saIIron robes), have long
coiled hair atop the head in a bun and wear a necklace made oI beads Iormed Irom the stems oI the basil
plant.
40
To sum up, the proIile oI the rural consumer is changing Iast. One marketing philosopher
noted, 'The new rural generation is clad in Jeans and T-shirts and though it mav not
know Schumacher, it stands divided on Sehwags abilitv to counter Glenn McGrath and
Brett Lee. Maga:ines of the Debonair and Fantasv genre adorn the kiosks of
Bikaner
19
fust as in an airport book shop book shop. This clearly demonstrates that it is
now becoming increasingly diIIicult to diIIerentiate between the rural and urban class
(Jejurikar, 2003, p. 46).

An example is the consumption oI Ruf and Tuf jeans Arvind Mills, who priced their
product at Rs.195 a pair, thereIore providing villagers the opportunity to wear jeans.
Additionally, charcoal-cleaned teeth are a rare sight; so is the case with twigs oI niim
(neem) and babul (babool) tree. Today, the ultra bright shine oI Colgate or some other
international brand oI toothpaste holds more appeal than the traditional methods oI
cleaning teeth.

One also Iinds that households are upgrading Irom traditional mosquito repellants such as
gobar`
20
to coiled mats. This clearly depicts that it is now becoming diIIicult to
diIIerentiate between the rural and urban class (Jejurikar, 2003, p. 46).

However, with a queer psychology oI purchase and usage, the Indian rural market is still
a puzzle to marketers. In many a case, it stretches its imagination to Iind surprisingly
diIIerent uses oI some oI the products. The embarrassed marketers admit that they
actually sell their products in areas they would otherwise Iind diIIicult, simply because
there are other uses Ior them.

For instance, in parts oI northern India, condoms are used by weavers as gloves on their
Iingers to weave Iine threads. Lubrication on condoms allows them Iine control on
threads and protects their sensitive Iingers. BuIIaloes displayed in the markets Ior sale are
dyed an immaculate black with Godrej hair dye. Horlicks
21
is used as a health beverage to
Iatten up cattle in Bihar. In villages oI Punjab, washing machines are being used to make

19
A small town in Rajasthan.
20
Cowdung.
21
A delicious and nourishing malted Iood drink.
41
Irothy Lassi
22
in bulk. Paints meant Ior colouring up the rich-smooth walls are used to
paint the horns oI cattle to make identiIication easier and to achieve a long-term
protection Irom theIt. Iodex
23
is rubbed into the skins oI animals aIter a hard day`s work
to relieve muscular pain. The organizations in question might not be pleased with such
usage. However, their moneybags keep on jingling (Lahiri, 2000).

3.6 Challenges of Rural Marketing

It has been seen that the rural markets oIIer numerous opportunities Ior the corporate
sector. As Ramaswami and Namakumari (2002, p.696) say, 'The first decade of the new
millennium is set to see its blossom. However, it is not so simple, and the market bristles
with a variety oI challenges, shown in Table 1 below. Since the aim oI this project is to
Iocus on the promotional challenges oI rural, these have been highlighted below.

Table 1: Challenges of Rural Marketing
1 Vastly scattered
market
About 75 oI the total population is spread in rural areas. In some states, 80-90 oI the
population live in rural areas. 'Demand is not concentrated, and scattered proving diIIiculty Ior
marketing communications (Dey and Adhikari, 1998, p.21).
2 Transportation
bottlenecks
Most rural markets are paralysed in the absence oI proper transportation and networking
systems. 'Rural people generally deal with agro-based products like Iruits, vegetables, Iish,
poultry, and dairy products, which get spoilt iI not transported properly (Sharma and Katewa,
1997, p.246). Lack oI proper roads and railway networks account Ior disruptions. The most
common method oI transportation is delivery vans and animal drawn carts. 'There exists
diIIiculty in accessibility and delivery oI products and services (Ramaswami and
Namakumari, 2002, p.709-710).
3 Seasonal demand The pre-dominance oI agriculture oIten causes Iluctuations in income patterns. InIluences oI
marriages, Iestivals aIIect the purchasing power oI consumers. 'During harvest time and in
Iestivals, demand increases signiIicantly (Dey and Adhikari, 1998, p.21).
4 Low standard of
living
'Rural consumers have low per capita income, low purchasing power and a low literacy rate,
contributing to a low standard oI living (Dey and Adhikari, 1998, p.21). 'However, this is
changing as consumers are becoming slowly literate (Ramaswami and Namakumari, 2002, p.
697-699).
5 Lack of desire
for New Life-
Style
Being a tradition bound community; rural consumers are strongly inIluenced by culture,
religion and superstition. They tend to stick to old customs and the pace oI liIe is slow (Dey
and Adhikari, 1998). Ramaswami and Namakumari (2002, p.698) say that 'this is undergoing a
signiIicant change.
6 Language
problem
Multiplicity oI languages spoken in villages is another diIIiculty Iaced by marketing people.
This poses insurmountable problem in designing the communications strategy (Dey and
Adhikari, 1998). More than 30 languages and 1700 dialects make rural communications
diIIicult. Urban areas are largely dominated by English and Hindi, rural areas oIten need
communication programs to be in the local language and idiom.
7 Urban mind vs. There is a tremendous diIIerence between the urban and rural mindset. There exists a huge gap

22
A traditional South Asian beverage, originally Irom Punjab, India/Pakistan, made by blending yogurt
with water, salt, and spices until Irothy.
23
Pain balm.
42
Rural mind between consumer behaviour in rural areas and urban areas. Marketers are Irom urban areas
and their minds think in an urban style, and there is diIIiculty to relate to the urban consumer
(Dey and Adhikari, 1998).
8 Overall
backwardness
Rural people are economically backward, poverty being one oI the main reasons. It conIines
people to basic necessities (Dey and Adhikari, 1998).
9 Low turn over Limited demand in rural areas Iorce companies to Iace stiII problems oI low turnover that adds
to the interest burden on business resources. 'The whole exercise turns out to be un-reunerative
and unproIitable (Sharma and Katewa, 1997, pp.245-246).
10 High inventory
costs
Rural marketing outlets don`t have the necessary knowledge and aptitude to decide the
optimum level or inventory. In the absence oI proper inventory management, they oIten have
unnecessary stock which squeezes out the proIit margin (Sharma and Katewa, 1997).
11 Inadequate
marketing
support
Producers and wholesalers do not extend Iull support in the Iorm oI liberal credit to the rural
marketing outlets due to the limited potential oI these outlets. This reduces their
competitiveness in comparison to urban marketing institutions. Sharma and Katewa (1997) say
this problem can be administered iI the network oI Iinancing agencies in rural areas is
improved.
12 Inadequate and
inefficient
communication
facilities
Rural markets cannot take the advantage oI opportunities; however this situation is changing
Iast due to optimum utilisation oI inIormation technology (Sharma and Katewa, 1997).
13

Lack of proper
planning
Most retailers in rural markets do not start a business Ior economic reason; rather they are
established and run with non-business objectives, sometimes compulsively to Iight
unemployment. They do not have a proIit motive and is undertaken as just another way oI liIe
(Kashyap, 2003).
14 Ancient and
obsolete business
technique
Rural marketing is run on old management lines, and lacks speciIic management skills,
resulting in an inability to attract and serve customers. It is devoid oI modern advertising
strategy and aggressive salesmanship (Kashyap, 2003).
15 InsuIIicient
storage and
warehousing
Iacilities
'Businesses oIten have storage problems and it is oIten diIIicult to Iind storage space in rural
areas (Ramaswami and Namakumari, 2000, p.710). This problem aIIects the service and cost
aspect oI distribution systems. Maintaining the required service level in delivery oI products
becomes very diIIicult. The cost oI distribution becomes escalated.
16 Immature
customers
Illiteracy, poverty and untimely hurried shopping are major contributors to Iailure oI Iorming
associations. Consumers oIten need credit Ior shopping which puts extra pressure on rural
retailers, who generally work with limited working capital (Sharma and Katewa, 1997).
17 Liberalisation
and globalisation
India is passing through a transition phase, and urban markets are Ilooded with Ioreign
products. These will soon enter the rural markets questioning the survival oI Indian brands.
India`s consumer base is poor, and customers preIer value-Ior-money products. Foreign brands,
with inherent cost structures are delivering aIIordable products. To survive, Indian brands need
better distribution systems and retailer service (Bijapurkar, 2001, p. 17).
18 Segmentation
dilemma
Demand Ior product is varied Ior people living in diIIerent areas with diIIerent climatic
conditions, occupations, literacy level, outlook towards liIe and their exposure to modern
goods and services. 'The income diIIerence between the Iew wealthy people and poor create
diIIerences in the demand, customs and belieIs, making segmentation diIIicult (Sahoo, 1997,
p.72).
19 Inadequate bank
and credit
Iacilities
A large majority oI the villagers do not understand banking Iacilities. 'Retailers experience
Iinancial diIIiculties in business operations and also in making payments to suppliers. They are
oIten unable to carry enough stocks with them (Sahoo and Panda, 1997, p. 73).
20 Availability of
appropriate
media
It has been estimated that all media in the country can reach only 30 oI the rural population
oI India. Print media covers 18, radio 90 and TV 20. Thus, 'mass marketing
communication opportunities are low (Reddy, 1997, p.44).
21 Rural markets
and sales
management
Rural marketing involves a greater amount oI personal selling eIIort compared to urban
marketing. The rural salesman must be able to guide the rural consumers in the choice oI
products, who sometimes do not properly motivate customers. Channel management poses a
problem as distribution networks in rural villages are lengthy, involving more intermediaries
and consequently higher consumer process. Also, 'dealers with experience are not available
43
(Reddy, 1997, p.44).
22 Branding Day by day, national brands are becoming popular; however, local brands are also signiIicantly
popular. This may be due to illiteracy, ignorance and low purchasing power oI rural
consumers. 'Local brands are becoming popular in spite oI their low quality, as the prices oI
these products are halI those oI the national brands (Reddy, 1997, p.45).
23 Packaging 'Smaller packages are popular in rural areas. All products are not able available in small
packages. Moreover, labelling is not in the local language, thereIore rural people are unable to
understand the product characteristics (Reddy, 1997, pp 45-46).
24 Awareness Lack oI awareness and understanding oI consumer behaviour in rural markets creates problems
in Iormulating strategies and marketing plans (Sharma and Rohmetra, 1997, p. 103).

Drawing attention to the 700 million potential consumers in rural India, the rural market
presents both an opportunity and a problem, given that this market has been characterized
by numerous challenges explained above. Rural marketing is not the Iad oI the decade.
Ingredients Ior success here include long-term commitment, cost re-engineering and
sustained innovation. To put it as a cliche 'it is the survival of the fittest.

3.7 Synopsis

From the literature review presented earlier it is evident that many companies have
understood the values and beneIits that rural consumers expect, but are unable to
successIully implement these. There has been ample work carried out concluding that
there exists a communication gap between the urban marketers and the rural consumers,
but ways to rectiIy this is inadequately researched.

Given the success oI marketing communication oI companies in the urban sector, the
purpose oI this project will be to explore whether companies can connect with their
consumers in the rural market, i.e. develop eIIective marketing communication strategies
to cater to this market. In particular, the project will Iocus on how eIIective marketing
communication can be developed using toilet soap as an example, Ior consumers in the
rural market.

Since soap is a popular purchase among rural consumers, their general understanding oI
marketing communication programmes will be assessed using data on this. Moreover, as
a subsection, the challenges oI rural marketing will also be analysed, with Iocus on the
promotions` aspect. The reason being, that there is adequate literature which lists out
various distribution challenges, however, the Iocus on the promotions side is limited.
44
ThereIore, the author oI this paper aspires to contribute to the earlier works by various
practitioners oI marketing communication.

The next section will outline the research methodology adopted by the author to
undertake this project.





























45
Chapter 4: Research Design


4.1 Overview

This chapter gives an overview oI the research design that has been used, i.e., the 'case
study method and the way it has been executed. The objectives Ior this project have
determined the reason Ior the choice oI the research design. A general deIinition oI
research design is established and inIormation is provided on the case study approach and
its components. Subsequently, a justiIication is provided on why Hindustan Lever`s
LiIebuoy was chosen as the case example. The methods oI data collection and the
strengths and weaknesses oI each data source are highlighted and the chapter concludes
with a discussion on methods employed to analyse data and issues oI data quality.

4.2 Research Objectives

A review oI the literature is a useIul way oI Iormulating the objectives that are most
relevant Ior the project. In this respect, the literature review was helpIul in understanding
how marketing communication programmes need to be customized Ior the rural market.
It was pointed out that FMCG companies have earlier been Iocusing on distribution
challenges and have ignored the promotion challenges, while carrying out their marketing
communication programmes. The theories developed by several academics and
practitioners in rural marketing will help understand how companies can successIully
communicate their products to the Indian rural market and overcome the promotional
challenges which they Iace.

The AIM oI this project is: By utilizing an example of a branded soap in rural areas,
how can FMCC companies develop effective marketing communication strategies for
consumers in the Indian rural market?

The RESEARCH OB1ECTIVE is: What are the main "promotional" challenges for
rural marketing communications and how can they be overcome?


46
4.3 Research Design - An Introduction

Malhotra and Birks (2003) describe a research design as the 'foundation for conducting
the profect. Colloquially, a research design can be explained as a 'logical plan for
getting from here to there`, where here can be deIined as the initial set oI questions
answered, and there is a set oI answers or conclusions about these questions (Yin, 2003).

To summarise, a research design conceptualises an operational plan, to undertake the
various procedures and tasks required to complete the study, and ensure that these
procedures are adequate to obtain valid, objective and accurate answers to the research
questions (Kumar, 1996).

Malhotra & Birks (2003) Iurther classiIy a research design into two broad classiIications
exploratory and conclusive (Figure 9).

Figure 9: A Classification of Marketing Research Designs









Source: Malhotra & Birks, 2003, highlighted area is the approach chosen Ior the project

Exploratory research as Malhotra & Birks (2003) explain, is used in a case when one has
to deIine the problem more precisely and identiIy relevant courses oI action. The
research process is loosely deIined at this stage and is Ilexible and unstructured. The
objective oI this kind oI research is to explore or search through a problem or situation to
provide insights and understanding (Malhotra & Birks, 2003). OIten the Iindings oI
exploratory research are regarded as input to Iurther research. Exploratory research can
be Iurther classiIied into qualitative or quantitative approaches.
Research Design
Exploratory Design Conclusive Design
Qualitative Quantitative Descriptive Research Causal
Research
47

Conclusive research on the other hand is used to 'test specific hvpotheses and examine
specific relationships (Malhotra & Birks, 2003). The researcher is usually required to
clearly outline the exact inIormation that is needed. Conclusive research as Figure 9
shows can be Iurther classiIied into Descriptive Research and Causal Research.
Descriptive research is when the major objective oI the research is to describe something
- usually market characteristics. On the other hand, causal research is when the research
aims to obtain evidence regarding cause-and-eIIect relationships.

Yin (2003) argues that there are several research strategies that can be adopted which
include: case studies, experiments, surveys, histories and the analysis oI archival
inIormation. In contrast to Malhotra & Birks` (2003) approach, he does not classiIy a
research method into exploratory or conclusive. He states that each research strategy can
be used Ior all three purposes (exploratory, descriptive or explanatory). Hence there may
be exploratory case studies, descriptive case studies or explanatory case studies etc. He
mentions other conditions to distinguish the research strategies. These include: (a) the
tvpe of research question posed (b) the extent of control an investigator has over actual
behavioral events and (c) the degree of focus on contemporarv as opposed to historical
events.

4.4 Selection of Case Study as the Research Design

The research objectives describe a situation where the case study approach would be the
most appropriate research design to Iollow. The choice oI the research design was
achieved by answering the three questions presented by Yin (2003).

The type oI research question: DeIining the type oI research question is the most
important step, in determining the research strategy to be adopted. Table 2 on the
Iollowing page, summarises the questions that can be asked (Yin, 2003). As seen in the
table, 'how` and 'whv questions Iavour the use oI case studies, histories and
experiments.

The extent oI control an investigator has over actual behavioral events: Once it has been
established that 'how` and 'whv type questions are the Iocus oI the study, a Iurther
48
distinction must be made between history, case study and experiment depending on the
extent oI the investigator`s access to and control over actual behavioral events. The case
study is chosen as a research method as, while examining contemporary events, the
relevant behaviours cannot be manipulated (Yin, 2003).

The degree oI Iocus on contemporary as opposed to historical events: The case study
relies on many oI the same techniques as history, but adds two sources oI evidence not
included in the historian`s repertoire: direct observation oI the events being studied and
interviews oI the person`s involved in the events. Although case studies and histories
overlap, a case study`s unique strength is its ability to deal with a variety oI evidences
documents, artiIacts, interviews and observations.

Table 2: Relevant Situations for Different Research Strategies
Strategy Form of Research
Question
Requires Control
of Behavioral
Events
Focuses on
Contemporary
Events
Experiment How, why? Yes Yes
Survey Who, what, where,
how many, how
much?
No Yes
Archival analysis Who, what, where,
how many, how
much?
No Yes/No
History How, why? No No
Case study How, why? No Yes
Source: Yin (2003)

Summarising the above we can see that the case study approach has an advantage in this
situation as the preIerred method when a "how" or "why" question is being asked about
a contemporary set of events over which the investigator has little or no control". Also,
the case study method attempts to encompass contextual conditions believing that they
may be highly pertinent to the phenomenon oI study (Yin, 2003).

Exploratory nature

The case study will be exploratory in nature, as it seeks to explore or search through a
problem or situation to provide insights and understanding (Malhotra & Birks, 2003).
This Ilexible research method Iits well with the objectives oI the project. Since the
49
purpose is to understand the response oI the rural people towards marketing
communication eIIorts oI a particular FMCG product, as well as uncover inIormation
Irom an organisation`s perspective, the data is not quantiIiable. Hence, data analysis will
Iocus on the qualitative approach (See Figure 9 shown earlier)

Qualitative Approach

The qualitative approach has been chosen Ior this project. Although case studies are not
exclusively concerned with qualitative methods, it is a primary Ieature oI this approach
(Gillham, 2000). Qualitative research seeks to gain an in-depth understanding oI un-
quantiIiable Iactors that aIIect consumers buying behaviour. The approach is
interpretative, which proposes that there are multiple realities, not single realities oI
phenomena, and that these realities can diIIer across time or place. Additionally it is
suitable Ior this project as there is a need to stimulate understanding oI meanings, reasons
and conditions associated with attitudes or behaviors (Mariampolski, 2001).

4.5 Components of Case Study

According to Yin (2003), the Iive components oI research design are important Ior case
study. These are: a) study`s questions, (b) its propositions (c) unit oI analysis (d) logic
linking the data to the propositions and (e) criteria Ior interpreting Iindings.

The proposition Ior this project is to understand the key aspects Ior a consumer while
purchasing an FMCG product, and the response to the marketing eIIorts. The unit oI
analysis is the organization. In this study, the case observes the rural consumers`
perspective towards marketing communication, which inIluence purchase Ior an FMCG
product. Additionally, it analyzes the rural communication strategies oI an FMCG
company. For the Iourth component, pattern matching is used where several pieces oI
inIormation Irom the same case is related to some theoretical proposition.

4.6 Characteristics of the Case Study

Yin (2003) states that the case study design can be divided into Iour types. These are:
single case holistic designs (Type 1), single case embedded designs (Type 2), multiple
50
case holistic designs (Type 3) and multiple case embedded designs (Type 4). As
highlighted in Figure 10, Type 1 is the case study design chosen.


Figure 10: Basic Types of Designs for Case Studies








Type 1 Type 3






Type 2 Type 4
Key : Case
Context
Embedded Unit oI Analysis
Source: Yin, 2003

For the purpose oI this project, the single case study approach seems to be appropriate.
In particular the rational Ior a single case study is that it should be critical, extreme or
unique and revelatory. The opportunity oI working with Hindustan Lever`s LiIebuoy
proved satisIied the above Ieatures and these will be examined below:

Critical: In the case oI LiIebuoy, the single case can be used to represent a signiIicant
contribution to knowledge and theory building in the rural market oI the FMCG industry.
It will help reIocus Iuture investigations in an entire Iield (Yin, 2003).

case
case
case
case case
Single Case Designs Multiple Case Designs
H
o
l
i
s
t
i
c

E
m
b
e
d
d
e
d

case
51
Unique: The case is unique as the recommendations will be tailored speciIically Ior
LiIebuoy helping Hindustan Lever to understand the behaviour oI the rural people, their
response to marketing communication and the eIIectives oI the media. This will help
position their product better and enable the success oI their marketing communication
strategies.

Revelatory in Nature: Since rural marketing communication has not been investigated
previously in any great depth, the research will prove relevancy. With regard to the
challenges oI rural marketing communication, as mentioned earlier, Iocus has not been on
the promotions` side. Thus, this paper will help not only help Hindustan Lever, but also
other companies that are looking at the rural people as a potential market.

Apart Irom the single case chosen, the case study can be described as holistic as only one
unit oI analysis is chosen.

4.7 Choice of Case - Hindustan Lever`s Lifebuoy

HLL`s LiIebuoy was chosen as the case example, particularly because the researcher was
aware that the company is the largest FMCG organization in India and its product
(LiIebuoy soap) is largely used by the rural consumers. In the past, the researcher had
been encouraged by Pressman Advertising and Marketing Ltd. (An advertising and
marketing agency in India), to probe into consumers` insight when purchasing a FMCG
product. This was carried out to support the company while designing their print
advertisements.

Even though HLL`s LiIebuoy has a signiIicant share in the rural market, there is scope
Ior greater potential. It Iaces numerous problems, and these need to be overcome.
Understanding how the consumer reacts to diIIerent types oI marketing techniques will
give the company the opportunity to leverage innovative elements in their marketing
communication programmes to position their product more eIIectively. The
recommendations will help them Iormulate the advertising and communications strategy
Ior HLL`s LiIebuoy in a more eIIicient manner.


52
4.8 Data Collection

Secondary data collection is data that has been collected Ior the purpose other than the
problem at hand. In the beginning oI this study, external data was gathered on research
done by academics, practitioners and other experts in the area oI both rural marketing and
FMCG products.

SpeciIic literature on rural consumers and rural marketing communications were explored
Irom several books and journals. The advantage oI using this kind oI data is that it can be
collected relatively quickly at relatively low cost (Malhotra & Birks, 2003). The
secondary data was useIul in developing an approach to the problem and helped answer
certain research questions, and interpret primary data with greater insight.

Internal Data and Primary Data Collection

Internal data is data available within the organization Ior whom the research is conducted
(Malhotra & Birks, 2003), whereas primary data is inIormation originated by the
researcher speciIically to address the research problem (Malhotra & Birks, 2003). Data
collection Ior case studies can come Irom many sources oI evidence.

However Yin (2003), states there are six key sources, which include: documentation,
archival records, interviews, direct observation, participant-observation, and physical
artiIacts. The table in Appendix 1 gives an overview oI the six major sources oI evidence
and their strengths and weaknesses. As Yin (2003) mentions, none oI the sources has a
complete advantage over the other but in Iact the sources are highly complementary and a
good case study will encapsulate as many sources as possible. This particular case study
Iocuses on three sources oI evidence:

1. Documentation

The documentation Ior this study included administrative records such as sales data Ior
LiIebuoy soap products, providing inIormation on the FMCG sector oI the rural market.
Newspaper clippings and magazine articles on HLL`s LiIebuoy products were also
useIul. Also the company website (www.hll.com) was a source oI inIormation. The
53
strength oI documentation is that it can be reviewed whenever necessary and is
unobtrusive since it is not created as a result oI the case study (Yin, 2003).

2. Archival Records

Archival records included previous survey data providing inIormation on LiIebuoy`s
customers and their current market perception towards usage oI soap. Print and TV
advertisements Ior LiIebuoy was extracted Irom the advertising database.

3. Interviews

In-depth interviews were conducted with consumers who purchase and consume soap as
part oI their liIestyle. Additionally, interviews with the organization members were
carried out. These interviews were the most important source oI evidence as the
underlying purposes oI the study was to delve into the eIIectiveness oI marketing
communications Ior the rural people, when purchasing soap and the marketing
communication strategies oI the organization. In-depth, semi-structured interviews were
used Ior the purpose oI this study. Semi-structured interviews are the most important
form of interviews in case studv research and can be the richest single source of data
(Gillham, 2000).

Interview Process

Consumer interviews were conducted each lasting between 45 minutes and an hour.
Additionally, 4 organization interviews (employees) were carried out. 1 oI these lasted
about an hour, 3 others were sent on email.

BeIore the interview commenced, the consumers and employees were told that the
researcher was interested in the reasons Ior particular product choices in response to
marketing communication. Since the respondents were asked to be introspective and talk
about motivations, a non-threatening interview environment was created. This was
Iacilitated by inIorming the participants that in the context oI this research, there is no
such thing as a correct or incorrect answer (Coolen & Hoekstra, 2001).

54
The respondents were encouraged to reply in their own words when describing their
opinions. Non-verbal signals such as an eye-contact, smile or nod, or brieI utterances
like hmm, right, etc made sure that the interviewee Ielt important. 'It is a strategv to
reassure the interviewee that vou are listening to what is being said (Arksey & Knight,
1999).

A digital recorder was used to keep track oI what was being said. This helped the
interviewer concentrate better. The recorder and batteries were checked prior to the
interview to ensure the interview was not lost (Arksey & Knight, 1999). Also
handwritten notes were taken in case there was a need to reconstruct the interview iI the
recording Iailed (Rubin & Rubin, 1995).

BeIore the start oI the interview, it was ensured that each person sign a consent Iorm
(Mason, 1996). Please reIer to Appendix 2 Ior a copy oI the consent Iorm.

Both organization and consumer interviews were conducted with the help oI an
'interview guide. This serves as a Iramework Ior the main body oI the semi-structured
interview. It is based on key questions the study is addressing (Arksey & Knight, 1999).
The interview guides presented in Appendix 3. As highlighted by Rubin & Rubin (1995),
the consumer interviews were divided into three kinds oI questions:

1. The Iirst round oI questions consisted oI main questions, which helped start and
guide the conversation. The nature oI these questions is that it should cover an
overall subject in ways that have an underlying Iocus (Rubin & Rubin, 1995).
Questions were asked about hygiene, usage oI soap, importance oI soap usage,
awareness and use oI brands etc. This helps introduce the topic and builds rapport
(Arksey & Knight, 1999).

2. The second round consisted oI probes, an important part oI an in-dept interview.
The probes were used to Iind out the attitudes, behaviour and selI-expressive
values that the rural people seek when purchasing soap. Probes helped clariIy and
conIirm answers, making them intelligible and signaling to interviewees the
expected level oI depth (Rubin & Rubin, 1995).

55
3. The last round consisted oI Iollow up questions which helped pursue themes that
had been discovered and exploring the implications oI what had been said. It
involved asking questions speciIically about marketing communication. Insight
was given on the rural marketing mix model, modiIied Irom Kotler`s original
model.

AIter these interviews, another interview was carried out which involved speaking to the
managing director oI Hindustan Lever Ior some general insights about rural marketing.
Again, the questions asked were open-ended and reIlected depth. Additionally, Iollow-up
questionnaires were sent over email to the employees oI Hindustan Lever, and speciIic
questions on their marketing communication strategies were addressed (Appendix 3).

4.9 Data Analysis

Combining the inIormation Irom the above three sources was important in completing a
successIul case study. Figure 11, shows how multiple sources oI evidence were used to
design a single case.


Figure 11: Convergence of Evidence (Single Study)









Source: Adapted Irom Yin, 2003

The analysis oI Iindings oI the case study was grounded on theoretical propositions. The
propositions helped create a good structure Ior the case study analysis. It allowed the
researcher to Iocus on speciIic data (Yin, 2003). These helped shape the set oI research
objectives and devise recommendations Ior the company. The Iindings oI the study were
achieved through documentation, archival records and in-depth interviews were
compared to the literature review.

FACT
Documentation Archival
Records
Interviews
56
4.10 Issues of Data Quality - Reliability and Validity

Various tests have been suggested by Yin (2003) to test the reliability and validity oI the
case study approach. We can ascertain that the case establishes construct validity
24
, as it
uses multiple sources oI evidence. It was ensured that every available resource, given the
boundaries oI time and access, was utilized to create a 'complete case study. Relevant
sources oI inIormation included both primary and secondary inIormation.

Primary data included data collected Irom in-depth interviews oI rural consumers and
employees oI an FMCG company. Secondary sources oI inIormation included company
documentation and archival records. This is known as triangulation oI data where
'converging lines of inquirv are used Ior a more balanced approach. Pattern matching
logic suggested by Yin (2003) was also adopted to strengthen the validity oI the study.
This was done by comparing the results to some previously established Iramework or
theory. To conclude, the project was responsive to opposing evidence and inIormation
was veriIied Irom multiple sources (Yin, 2003).

4.11 Synopsis

This chapter highlights the importance oI research design during the research process.
The author has justiIied the methodology (case study approach) used Ior the purpose oI
this report. The case study components are discussed and the choice oI Hindustan
Lever`s LiIebuoy as a case has been discussed. Finally the manner in which the data will
be analysed is presented. This leads us to the next chapter oI the project, which presents
inIormation on the case study 'Hindustan Lever's Lifebuoy chosen Ior this project.








24
Construct validity is the extent to which the data measures what it is supposed to measure.
57
Chapter 5: Case Study lindings

5.1 Overview

This chapter is a case study oI Hindustan Lever Ltd.`s LiIebuoy soap. The chapter begins
with an external audit, which will enable the reader to understand the market environment
in which Lever operates. Since the Iocus oI this dissertation is only on the rural FMCG
segment, the urban market is not analysed. The second part consists oI the internal audit
where the company background and the product range Ior LiIebuoy is established. Both
the internal and external audit is based on documentation and archival records. Interview
Iindings oI the organization are presented, using the model oI Rural Marketing Mix (This
model was explained earlier in the literature review).

5.2 External Audit

Market Size

India has a population oI 960 million people (Business Week Online) with 57 million
urban and 136 million rural households (Super Brands, 2004). 73 oI the population is
in rural areas and 27 in urban areas. Whereas the urban population oI India is
concentrated in 3,200 cities and towns, the rural population is scattered over 570,000
villages. The inIerence is clear, unlike urban demand, which is highly concentrated, rural
demand is scattered over a large area (Bansal, 2004). This can be seen in Figure 12.













Figure 12: The Indian Market
27
73
Rural
Urban
58
Market Crowth

Table 3: Growth of Rural FMCG`s Market
Rural Size Category

Total Size
(Rural-Urban)
1998-1999 (Rs.
Crore)
oI Growth
(over last 5
years)
2001-2002
(Rs. Crore)
2006-2007
(Rs. Crore)
25

Toilet Soap 7,500 13.4 6,021 11,219
Talcum Powder 940 23.65 793 2,292
Toothpaste 2,080 23.50 1,441 4,140
Cooking Oil 17,000 10.91 15,377 25,806
Vanaspati
26
3,900 7.63 2,844 4,108
Tea 6,500 10.97 4,955 8,337
Health Beverages 908 28.54 601 2,110
Electric Bulbs 750 9.40 354 555
Electric Tubes 158 9.40 74 121
Cigarettes 7,662 13.09 6,422 11,879
Packaged Biscuits 2,500 6.79 1,323 1,937
Hair Oil/Cream 175 30.85 179 689
Source: Business Intelligence Unit and NCAER, Delhi

As Iar as the FMCG sector is concerned, very high growth, apparent in the mid-nineties,
declined rapidly by the end oI the decade. The initial growth was due to increase in
product penetration and consumption levels. Among the mass-market products with high
penetration levels, consumption levels have almost stagnated. Income has a signiIicant
bearing on rural consumption levels and market size has grown Ior toilet soap (77), tea
(34) and cooking media (25). Premium products like toothpaste and talcum powder
are also growing. These products have low penetration and consumption levels (Shukla
and Brahmankar, 2003, p.65). The FMCG penetration in rural India is shown in Table 4.










25
Projected estimates
26
A kind oI vegetable used Ior cooking
59
Table 4: The FMCG Penetration
Product Category Total Penetration ()
Analgesics/Cold/Ethical Tablets 27.9
Batteries 21.3
Bulbs 29.9
Edible Oils 84.7
Hair Wash Preparations 39.4
Iodized Salt 61.5
SaIety Razor Blades 45.4
Tea 79.1
Toilet Soaps 88.3
Tooth Powders 22.8
Tooth pastes 33.1
Washing Cakes/Bars 87.5
Washing Powders/Liquids 70.3
Source: Business Week, 7-21 April 1999, p.69

This table shows that some FMCGs have penetrated deep down in rural India. Staples
like tea and toilet soap are the highest, but that does not mean that rural consumers only
purchase basic products. One oI the most startling results- tooth powders were long
assumed to be the only sort oI oral care product that rural markets would purchase, yet
toothpaste penetration has actually overtaken powders.

The overall high penetration oI oral care products is also testimony to public health
awareness campaigns (Singh, 2001). The success oI hair wash preparations shows that
personal care is as important Ior rural consumers as urban ones. While the penetration oI
batteries may not be a surprise, the penetration oI bulbs is certainly interesting.

Rural India is clearlv not an area of darkness anvmore, and as a further incentive to keep
lights on, farmers get free electricitv (Business World, 7-21, April 1999, pp68-69).









60
Table 5 below shows a comparison between the rural and urban consumer. This table
shows that there exists a vast diIIerence in each and every Ieature oI the rural and
urban` liIestyle.

Table 5: Rural Vs. Urban Consumer
Features Rural Urban
1 Demand Pattern Seasonal UniIorm
2 Spread Widely Spread Concentrated
3 Literacy Level Low High
4 Source oI Supply Inadequate Adequate
5 Physical Communication Facilities Poor Very Good
6 Product Knowledge Not Known Known
7 Awareness oI needs Not Known Known
8 Source oI InIormation. Word oI mouth- oral Any media
9 Product Concept Not Known Known
10 Timeliness oI Supply Untimely Timely
11 AIter Sales Services Availability Inadequate Adequate
12 Expenditure Pattern Somewhat unproductive Productive
13 Guidance on Usage Needed Not needed
14 Per Capita Income Low High
15 Product as Status Symbol Mostly No Mostly Yes
16 Consumer Protection Rarely Available Easily Available
17 Choice oI Brands Low High
Source: Gopalswami (1997), Wheeler Publishing, p. 28

Segmentation

The rural market can be segmented using the concept oI 'urban orientation. Urban
orientation is defined as the degree to which a rural consumer aspires to replicate the
urban lifestvle (Kannan, 2001). Urban orientation can be inIluenced by connectivity and
social links. Villages closer to the urban center will be higher on urban orientation,
compared to distant villages. Similarly, villages connected by public transport will be
higher on urban orientation as compared to villages that have no connection. Based on
connectivity, villages can be divided into three groups- (a) close to the urban center, (b)
villages connected by public transport and (c) remote.

Social links are high when (a) incomes are high, (b) many oI their relatives would have
been staying in bigger cities and (c) sending their children to cities Ior education. They
are medium when (a) incomes are high, (b) they are agriculturally dependent and (c) they
are the Iirst generation to attain Iinancial status, (d) relatives in urban centers would also
61
be Iirst generation migrants and (e) their children opt Ior education in urban centers, but
are not completely detached Irom agriculture (Kannan, 2001). Table 6 shows a summary.

Table 6: Market segments by urban orientation of India
Physical
connectivity

Social Links
Villagers connected by local
transport (riksha, auto, city
bus, local trains)
Villagers connected by
public transport (bus,
train)
Remote village (not
connected by public
transport
High Highest (super premium goods) High (premium and value-
Ior-money goods)
Moderate (value-Ior-
money goods)
Medium High (premium and value-Ior-
money goods)
Moderate (value-Ior-money
goods)
Low (duplicates)
Low Moderate (value-Ior-money
goods)
Low (duplicates) Lowest (not a market)
Source: Kannan (2001)

Broadly, the market can be segmented into three categories

1. Premium niche segment
2. Premium and value-Ior-money segment
3. Value-Ior-money segment

Competition

In terms oI rural market share, Hindustan Lever Ltd and Colgate capture most consumers.
This is shown in Table 7 below.

Table 7: Rural Shares of FMCG
Company Rural Share ()
Hindustan Lever Ltd. 50
Colgate 50
Godrej 30
Calvin Kare 33
Marico 25
Cadbury 25
Smith Kline Beecham 20
Heinz 7
Source: Ramakishen (2002)

62
The current brands in the rural soap market are LiIebuoy, Hammam, Rexona, Cynthol,
Lyril, Dettol and others. Figure 13 below shows the market share oI each oI the diIIerent
brands.

Figure 13: Market share of each soap product










Source: www.indiainIoline.com

Hindustan Lever`s LiIebuoy dominates with more than halI percentage oI market share.


Table 8: Characteristics of each of the different brands of soap

Characteristics Brand Company
Fresh clean carbolic scent
Pure Antibacterial Soap
Distinctive Smell
Combats body odour
LiIebuoy


Hindustan Lever Ltd.
Neem, Tulsi and Aloe Vera extracts
Non-Allergenic


Hamam

Hindustan Lever Ltd.
Cucumber extracts, coconut
oil and milk cream.
PerIumed
Rexona

Hindustan Lever Ltd.
Extracts oI lime
Deep cleansing, Ireshness and vitality.
Long-lasting Iragrance.
Cynthol Godrej
Rich lather
Ayurvedic
Pure coconut oil
Medimix Cholayil Private Limited
Tackles bacteria
Combats perspiration
Antiseptic qualities
Skin moisturiser
Dettol Reckitt Benckiser (India)
Ltd.
Source: www.superbrands.com

This table shows the diIIerent competitors oI LiIebuoy and each product`s characteristics.

55
10
11
6
8
3
7
Hammam (HLL)
LiIebuoy (HLL)
Rexona (HLL)
Cynthol
Medimix
Dettol
Others
63
Customers

Singh (2001) classiIies rural consumers into various segments according to their reasons
oI purchase. Rural consumers largely purchase soap due to hygienic needs, closely
Iollowed by the Ieeling oI Ireshness. The perIumed element in the soap is the next Iactor
oI purchase Iollowed by the product`s antiseptic qualities. Beauty, moisturizing Iactor
and disease prevention are low on the buying scale (Singh, 2001). See Figure 14 below.

Figure 14: Classification of rural consumers who purchase soap













Source: (Singh, 2001)

Customer - Demographic Characteristics

Ramakishen (2002) outlines the demographic characteristics oI rural soap users shown
below:

Males 49
Female 51

Advertising

Toilet Soaps advertising spends grew 30 per cent in 2004 compared to 2003 in the rural
sector. A dip in advertising spends was observed only in 2003 shown in Figure 15.




0
20
40
60
80
100
Freshness
Hygiene
Moisturizing
PerIume
Antiseptic
Disease Prevention
Beauty
Reasons oI purchase

64
Figure 15: Toilet Soap Advertising Spends













Source: www.indiatelevison.com


Advertising is the key Iactor in driving sales and has mainly Iocused on education and
awareness. There is a positive relationship between ad spend by the major brands and the
sales oI the entire category. Advertising spend by some oI the leading brands is shown
below:

Table 9: Advertising spend by the different brands
Brand Company oI Share
LiIebuoy Hindustan Lever Ltd. 13
Hamam Hindustan Lever Ltd 9
Rexona Hindustan Lever Ltd. 7
Cynthol Godrej 6
Medimix Cholayil Private Limited 6
Dettol Reckitt Benckiser (India) Ltd. 4
Others - 8
Source: www.exchange4media.com









oI growth
2001 2002 2003 2004
-10
0
10
20
30
40
50
60
70
80
65

5.3 Internal Audit

1he Company





Hindustan Lever Limited (also called HLL) is India`s largest consumer products
company and is headquartered in Mumbai. Lever Brothers India Limited was Iormed in
1933 which became Hindustan Lever Limited. It has 41,000 employees. HLL is the
market leader in Indian products such as tea, soaps and detergents. As oI May 2006, it is
headed by Mr Douglas Bailey.

The Anglo-Dutch company Unilever owns a majority stake in Hindustan Lever Limited,
as seen in Figure 16. Lever, as a company is divided into two sections- home and
personal care and Iood. Some oI its brands include Kwality Wall`s ice cream, LiIebuoy,
Lux, Breeze, Liril, Rexona, Hamam, Moti soaps, Lipton tea, Brooke Bond coIIee,
Pepsodent and Close Up toothpaste and brushes, and SurI, Rin and Wheel laundry
detergents, Kissan squashes and jams, Annapurna salt and atta
27
, Ponds talcs and creams,
Vaseline lotions, Fair & Lovely creams, Lakme beauty products, Clinic Plus, Clinic All
Clear, Sunsilk and Lux shampoos, Vim dishwash, Ala bleach and Domex disinIectant
(www.hll.com).













27
Wheat Ilour.
66


Figure 16: Corporate Structure of Hindustan Lever Ltd.

Source: www.hll.com

Mission Statement:

"Our mission is to add Jitality to life. We meet everyday needs for
nutrition, hygiene, and personal care with brands that help people feel
good, look good and get more out of life".

Employees at Lever - 1he 1hrill of HLL

'It takes a lot of heat, pressure and hard work to mould anvthing into shape. Building
vour career isnt anv different. At HLL, vou will have all the right elements that vou need
to get to the top. The onlv difference is that, well make sure that vou have loads of fun
getting there`, the company`s promise to all its employees.

As part oI the Iindings Ior this project, 6 employees at HLL were interviewed. Their role
in the company is summarized in the Table 10. Additionally, the table presents challenges
oI HLL and its Iuture strategies to improve upon them.


Home & Personal Care Foods
67
Table 10: Hindustan Lever`s Employees
Name & Role in HLL Responsibilities Challenges oI HLL Future Strategy
Mr. Harpeet-Singh
Tibbs- Activation
Manager Ior
LiIebuoy soap
Bringing hygiene messages to 70
million people in India.
Championed the 'LiIebuoy
Swasthya Chetna initiative.

Travels to villages to check on
progress. Talks directly to local
people to understands the impact oI
the initiative & ascertains any unmet
needs, & plans Iuture activities.
Faces diIIiculty in
changing deeply
entrenched
behaviours.
Hopes to establish contact
with more villages in the
next two years, aiming to
reach 100 million people by
2005.
Mr. Rahul Welde-
General Manager,
Media Buying
Works closely with local
communications teams. Is
passionate about ensuring the
company delivers its mission: 'to
have a clear voice & strong
message every time one talks to
Unilever people.
Unable to engage
with the rural
consumer at a level
which the company
expects.
Looking towards a new
approach to brand building
& communications, with a
much higher level oI
engagement than the more
traditional Iorms oI
commercial advertising.
Mr. Sanjay Behl-
Marketing Manager


Handles Indian as well as global
assignments. Manages household
brands like SurI, Rin, Vim,
Sunlight, etc.

He is an integral part oI the global
br& team on two oI Unilever power
br&s CiI & Domestos.
Unable to upgrade
its users with its
new innovative
technologies across
all brands
combined with
price cuts to justiIy
its price value
equation.
Sees technology
inIluencing the lives oI
millions oI Indians living in
rural areas.

Mr. Somnath Ghosal-
Manager Ior personal
care products
Working on household products,
personal care, packaging, product
saIety, and the environment.

Involved with producing shows
annually in rural villages to educate
consumers to the need Ior personal
hygiene products.
Unable to optimize
inventory,
manuIacturing
eIIiciency &
customer service
levels without
disrupting its
production &
distribution
Incorporating promotional
demand Iorecasts into
advance planning &
providing the enterprise
with visibility into the
impact oI demand.
Mr. Yuri Jain-
General Manager
Manages overall sales and
proIitability oI a product category.
Stimulate demand Ior products in
retail outlets & develops close
relationships with brand managers,
account managers and the
consumers themselves. Looks to
improve turnover & increase proIit
and market share. An essential part
oI his job is customer service.
Makes incorrect
decisions on
pricing &
distribution. Is
sometimes unable
to understand the
'rural mind.
Optimising return &
channeling insights into
consumers & competitors,
& making key decisions on
pricing, promotion,
merchandising and growth.
Ms Priya Nair-
Marketing manager
oI Hindustan Lever

Managing & marketing business
operations oI Project Shakti.
People in rural
communities don`t
have access to
useIul inIormation
that could beneIit
them economically
as well as socially.
To ensure Project Shakti
can create enough business,
income, Ior every
entrepreneur involved.
68
Lifebuoy Soap

The Lever brothers created LiIebuoy in 1894 by mixing residue Irom the manuIacturing
process Ior Sunlight detergent with red coloring and cresylic acid to create a strong soap.
From the beginning, HLL linked the bright red colour and sanitary carbolic smell to
'healthy clean.

Beginning in the 1960`s, the brand messages were reinIorced through the use oI a 'sports
idiom in LiIebuoy`s advertising. An active and energetic sports player needed a strong,
eIIective soap to get truly clean. The LiIebuoy jingle played behind a team sports
vignette, 'There`s a LiIebuoy wherever there is health!

By 1992, LiIebuoy`s sales surpassed sales oI any other soap in India. Beginning in the
1980`s, the cheaply priced beauty bar segment began to eat LiIebuoy`s proIits
(Gopalaswami, 1997).

As described by Harpeet-Singh Tibbs, Activation Manager Ior the brand, 'We kept saving
health, health and health. And over time, health became svnonvmous with the base level
of cleaning. Everv soap over time started speaking about basic health plus something.
And the net result was that we were thought to be at the base level of protection. So, our
health offering became less attractive.

He went on to explain that the carbolic Iragrance was outdated, since younger generations
and women showed a preIerence Ior more Ilora-type Iragrances. At the same time, the
enormous brand-equity associated with the 107-year old LiIebuoy name, especially in
rural India, was something the company could not lose (Please reIer to Appendix 4 Ior
more inIormation).







69
Lifebuoy's Soap Launches




Lifebuoy Lifebuoy Lifebuoy GOLD Lifebuoy PLUS Lifebuoy
(Original) (Re launch) Naturals




Lifebuoy Original: Hard rectangular carbolic disinIectant soap with a strong smell.
Lifebuoy Re launch: Curved milled antibacterial soap with Iloral scent. Produces a lot oI lather.
Lifebuoy Gold: Innovative antibacterial Iormulation which serves everyone`s requirements in the
home controls adolescent pimples, body odour, protects bruises Irom Iurther inIection.
Lifebuoy Plus: Deodourized pink antiseptic soap catering to the urban market.
Lifebuoy Naturals: Has the do-good qualities oI Neem (natural herb with antiseptic qualities) to
the promise oI protection Irom germs.
Source: www.hll.com

The Rural Marketing Mix will now be discussed, in the case oI Hindustan Lever. Since
the Iocus oI this project is on marketing communications, a separate section will be
devoted to this.

Hindustan Lever and the Rural Marketing Mix- Product, price, place,
packaging, retailer, education and empowerment

'A rural consumer has clearlv different mindsets in relation to attitudes, perceptions,
portfolios and comprehension. It is important to understand these differences of rural
consumers to everv product categorv to enable marketers to develop and relate to, says
Rahul Welde, General Manager at HLL.

1985 2002 2004 2004 2004
70
Rural purchase decision-making is largely in groups. 'For instance, when the first tractor
is bought in a village, there will be lot of debate and discussion in the village Panchavat.
It is about collective decision-making, he adds.

HLL always had a Iocus on innovation. It has increased standard oI living in India. For
example, the company launched a new brand in 1995, Kissan Annapurna, Ior staple
Ioods, including iodized salt.

'Our research labs have discovered an improved wav of fortifving slat with iodine, which
adds health benefits. Through the use of a proprietarv method for encapsulating iodine, it
was prevented from boiling wav in Indias unique cooking environments, says Welde.
This is an example oI product customisation.

HLL also requires all employees in India to spend six weeks living in rural villages,
actively seeks local consumer insights and preIerences as it develops new products, and
sources raw materials almost exclusively Irom local producers. The company has also
created an R&D center in rural India Iocused speciIically on technology and product
development to serve the needs oI the poor (www.hll.com).

In terms oI pricing, HLL`s approach to reaching the rural poor involves a dedicated
research and development eIIort.

'Manv companies assume that high-tech R&D cannot possiblv fit in the budget for low
price products, and that developing products for the poor is simplv a matter of making
existing products cheaper bv lowering their qualitv, says Sanjay Behl, Marketing
Manager, HLL.

He adds, 'More than benchmarking competition, dropping prices is all about triggering
growth and this has alwavs been an integral part of our strategv. Straddling almost
every price segment with its SKUs (Stock Keeping Units), HLL has also been trying to
upgrade its consumers, even at the cost oI cannibalising its own brands. For instance,
early this year it dropped prices Ior SurI Excel by nearly 15 per cent just to have its users
Irom the lower-priced brands migrate to its superior technology-driven brand. Behl adds,
71
'We are lowering the price barriers for our consumers so that thev can have access to
our high qualitv products.

In terms oI place oI purchase Behl claims that 'The place of purchase for a rural
consumer is often at Melas (fairs).

HLL has participated at the twin mega melas - Pushkaram Rajahmundry and Nashik
Kumbh. It promoted Vim- the Iour rupee bar and sampling product through a game
Raakh Se A:adee. The consumer was asked to open a locked box (having a Vim bar
inside) by choosing an A:adee (means Ireedom) key among a lot oI Iour. Three
Pepsodent kiosks were positioned as Iree teeth-brushing centers Ior the pilgrims.
Pepsodent-branded kiosks were operational in early morning hours at Tapovan and
Trimbakeshwar.

Rural consumers preIer small sized economical
packaging. Fancy packaging does not appeal to
them, as they preIer no Irills` products. An example
is when the company`s intensive research approach
was the development oI Bree:e 2 in 1, a combined
soap and shampoo that was cost eIIective and less
harsh on hair that typical body soaps.


In terms oI packaging, 'our companv packaged this product in small quantities, as poor
customers cannot afford large quantities on a given dav, says Welde.

In terms oI education urban audiences can buy a product aIter reading product literature,
the same is not true oI rural buyers. For rural audiences, 'seeing is believing, said
Ghosal, managing director oI personal care products. The company provides scholarships
Ior education such that it opened career avenues; speciIically targeting low-income
groups are being provided. 2003 was the Iirst year oI scholarships - 147 students have
received scholarships in 2003. The 2004 scholarships Ior rural students have been
announced; 72 women have received the scholarships.

72
Looking at empowerment
issues, one can throw light
upon the Fair & Lovely
Foundation, which is HLL`s initiative aimed at economic empowerment oI women across
India. It aims to achieve this through providing inIormation, resources, inputs and support
in the areas oI education, career and enterprise. It speciIically targets women Irom low-
income groups in rural as well as urban India (www.hll.com).

Additionally, 'our companv encourages rural Indians to become retailers of our
products, states Welde. 'The companv encourages villagers to go into business
themselves bv selling HLL products... We distribute our products to local stores and this
personalised marketing effort to educate them about the benefits of HLL products has
been a huge success. This initiative requires a tremendous training effort, as manv people
who sell HLL products are illiterate, with no relevant work experience, he says.

Looking at the promotional side of HLL

'Contrarv to popular belief, regional (language) press and television do reach the people
in rural India to some extent`, said Yuri Jain, general manager oI HLL. 'Marketers, who
take the trouble of developing communication strategies which connect better with rural
audience alwavs succeed, provided the rural customers perceive value for monev in the
product or service, he added.

The company has had many successes in marketing communications, some oI which will
be outlined below.

Positioning ~Vim Bar on a new platform

In June 2002, the employees oI Hindustan Lever Ltd. (HLL) literally took to the streets.
The company was undertaking a promotional exercise in the rural areas
oI three states - Madhya Pradesh (MP), Bihar and Orissa Ior its utensil-
cleansing bar, Vim.` A part oI HLL`s ongoing television (TV)
73
campaign, Vim Khar Khar
28
Challenge,` the promotion drive involved company oIIicials
to visit rural towns and demonstrate how vessels are cleaned with Vim. The company
was involved with educating the rural masses on the on-going 'Vim Khar Khar
Challenge, 1J commercial by conducting live demonstrations about vessel cleaning
(Khan, 2000).

A rural thrust for a toothpaste brand

Additionally, 'Hindustan Lever Ltd is pushing oral care brand
Pepsodent in rural India with a country-wide pitch aimed at
10,000 villages initially. This campaign will propagate the
beneIits oI oral care to around 13 million children by end-2002, is expected to improve
volumes and also create a benchmark in the industry.

'HLL has alreadv reached selected villages in Andhra Pradesh, Maharashtra, Uttar
Pradesh and Madhva Pradesh, and will go national soon, said Yuri Jain. Pepsodent, one
oI HLL`s 30 power brands, is being routed via young dentists. Along with an oIIer oI Iree
dental check-ups, HLL is also planning to organise health camps involving villagers to
IortiIy its campaign.

'To promote Pepsodent, we will also offer free samples to the villagers to trv out the
product and offer discount coupons on wrapper redemption schemes, says Jain.

A nationwide talent hunt for rural children

Another campaign launched by the company is called; 'Rin Mv Super
Star a nationwide talent hunt dedicated to unearthing talent in
children aged 5-14. The programme provides a national platIorm Ior
talented children to showcase their potential in three categories -
singing, acting and dancing. The winning contestant will get a
scholarship oI Rs. 500,000 to help him/her chase the dream oI becoming an artist or to
pursue Iuture education.


28
A term used Ior the word 'rough.
74
With Rin Mera Star Super Star`, Hindustan Lever`s large brand promotion, Rin
Advanced White Star Hunt, is being taken to national television. Since June 2006, over
100,000 children across 22 cities have already auditioned and the entries are still coming
in. Around 2,000 schools are also participating in the audition process Ior the brand
promotion.

Priya Nair, Marketing Manager, Hindustan Lever said, 'Rin is all about making an
impression and a talent hunt among kids is the perfect arena. Manv children are blessed
with ama:ing talent and Rin provides them with a great platform to make an impression.

Added Rahul Welde, General Manager, Media Services, Hindustan Lever, 'This marks a
new approach to brand building - with a much higher level of engagement than the more
traditional forms of commercial advertising. The launch of this show is a true win-win
association for Rin and STAR
29
providing Rin a nationwide platform from which to
communicate with consumers and STAR, an excellent format show to entertain its
audiences`.

In the interest oI aligning their marketing campaigns with various sets oI social values,
Hindustan Lever has tired to emphasize its reputation Ior ethical conduct or the social
value oI their products. The principal issue in rural development is to create income-
generating opportunities Ior the rural population. Such initiatives are successIul and
sustainable when linked with the company`s core business and is mutually beneIicial to
both the population Ior whom the programme is intended and Ior the company.

Hindustan ~Citizen Lever- Changing Lives in Rural India

Based on these insights, HLL launched Project Shakti
30
in
the year 2001, in keeping with the purpose oI integrating
business interests with national interests
(www.hllshakti.com). The model was piloted in Nalgonda
district oI Andhra Pradesh in 50 villages in the year 2000.
The objectives oI Project Shakti are to create income-generating capabilities Ior

29
A popular channel viewed on television by people oI all ages.
30
'Shakti means strength.
Project Shakti Logo
75
underprivileged rural women by providing a small-scale enterprise opportunity, and to
improve rural living standards through health and hygiene awareness.

The Government oI Andhra Pradesh took the pioneering step oI supporting the initiative
by enabling linkages with the network oI DWACRA (Development oI Women and
Children in Rural Areas). Postcards and posters were advertised in various villages about
this program.

'Profect Shakti is a highlv appreciable effort to reach out to the rural people bring in
social change, said Girija Shankar, an employee oI the Govt. oI Andhra Pradesh. Most
SHG (selI help group) women view Project Shakti as a powerIul business proposition and
are keen participants in it.

Participants in Project Shakti said 'It felt good to be part of a group but thats not the
same as eating food; another claimed 'When mv husband left me I had nothing except
mv daughters. Todav evervone knows me. I am someone now (www.unilver.com).
(Please reIer to Appendix 5 Ior more inIormation oI Project Shakti).

Promoting the need for health and hygiene

Hindustan Lever`s soap Iactory at Orai in Uttar Pradesh, northern India, is also working
on promoting health and hygiene Ior more than 7,000 people in Iive local villages. The
Iactory is located in an agricultural area with high levels oI poverty, where less than halI
the local population can read and awareness oI good hygiene, nutrition and Iamily
planning is poor.

Health camps are organized to promote healthier living. These oIIer medical check-ups;
basic treatments such as deworming Ior children; and straightIorward advice on treating
common diseases and on improving hygiene, through the regular cleaning and
chlorination oI wells Ior example. So Iar nearly halI the population oI the Iive villages
has attended a health camp and there have been no outbreaks oI disease since 1998
(www.hll.com).

76
While questioning various people at Lever, they explained the company marketed their
soap products in the past.

'Soap executives reali:ed that people who didnt see dirt on their hands thought that
their hands were clean, said Welde. This attitude partly explained why people didn`t
wash their hands aIter washing clothes in the river or Ieeding the cows, a key cause oI
disease transmission. Although the connection was clear in the executives` mind, the
company had to create a similar urgency and emotional connection to soap Ior the
consumer.

'What would be a better place to educate people about the importance of frequent soap
use than where 70 million people come to clean themselves? exclaimed Welde. Thus,
Hindustan Lever joined the pilgrims visiting Allahabad Ior
Kumbh Mela, the religious Iestival held every 12 years.
(The picture on the right shows the pilgrims at Kumbh
Mela). Executives wanted to show that dirt is always
present, though oIten invisible. Marketers waved an
ultraviolet-light wand over attendees` hands to show where
germs and dirt resided. While the pilgrims came to bathe at
the conIluence oI India`s sacred rivers to cleanse their souls, they also learned to keep
their hands Iree oI pathogens.

Playing with emotions- an innovative promotional act

The village street theatres represented a more emotional play
(see picture on the leIt). Lever recruited local magicians,
dancers, and actors who knew each market and village that the
company wanted to target. In total, 50 teams oI 13 perIormers
were recruited to serve as connections between the brands and
the residents. Scripts were changed Ior diIIerent dialects, education levels, and religions.
In all, Lever coordinated two-hour perIormances at 2,005 Haats over six months.

The results were compelling. Awareness oI Breeze, a low-cost soap with more oI a
beauty pitch, increased Irom 22 to 30 over the six months that the perIormances were
77
running. Awareness oI Rin Shakti, a moderately priced detergent bar and powder brand,
increased Irom 28 to 36, a company spokesman said. And in all Iive states, sales oI
SurI Excel, a premium washing detergent, shot up in the Iirst halI oI 2000 compared with
1999, while sales oI Rin shot up in Iour states.

Reaching the consumers directly

In 1998-99, Hindustan Lever implemented a major direct consumer contact, called
Profect Bharat, which covered 2.2 crore homes. Each home was given a box, at a special
price oI Rs.15, comprising a low unit price pack oI shampoo, talcum powder, toothpaste
and skin cream, along with educational leaIlets and audio-visual demonstrations.

'The profect has helped eliminate barriers to trial, and has
strengthened salience of both particular categories and
brands, said Nair, an employee at HLL.

Similarly in 2002, Hindustan Lever launched a similar large-
scale direct contact, called LiIebuoy Swasthya Chetana, which
already covers 70 million people in 18,000 villages oI 8 states.
The project intended at generating awareness about good
health and hygiene practices, and speciIically how a simple
habit oI washing hands is essential to maintaining good health. Swasthya Chetna banners
were used to convey the importance oI handwashing soap, and communal washing with
soap was carried out. The initiative involved interaction with students and senior citizens,
who acted as change agents (See pictures on the right)

Building a rural information service

Apart Irom these campaigns, Hindustan Lever started to pilot an inIormation technology
initiative called i-Shakti in 2003 (www.hll.com). This is designed to meet rural villagers`
inIormation needs. Mostly housed in the homes oI Shakti entrepreneurs, i-Shakti kiosks
provide villagers with Iree inIormation on a wide range oI topics, including health and
hygiene, agriculture and horticulture, child and adult education, Iinance, employment,
and entertainment.
78

One oI the kiosk owners, Shantamma, says, 'The programme has created a stir ever
since it began. People from all over the countrv have become aware of this, and it is
largelv advertised bv word of mouth. We have people from all age group using the
svstem. Practicallv all are registered users and we have six to seven users coming in
evervdav (www.yonearth.com).

Content is in the local language and has been specially developed by institutions and
NGOs with experts in these Iields, including the Azim Premji Foundation Ior children`s
education, the Tata Consultancy Services` Adult Literacy Programme and ICRISAT
(International Crops Research Institute Ior the Semi-Arid Tropics) Ior inIormation on
agriculture. i-Shakti also includes an interactive service in which villagers can email
questions to a panel oI experts and receive a response within 24 hours. Farmers can Iind a
quick solution to pest problems with their crops, villagers can email their symptoms to a
doctor and get a diagnosis in hours rather than days, and computer programs with
voiceovers will teach people who are illiterate (Look at Figure 17).

YonEarth interactive, a Mumbai based IT-enabled marketing solutions company, was
hired to design, develop and manage the venture. 'Everv one knew it was an extremelv
uphill task, says Vivek Marolli, Director, YonEarth Interactive. 'lt was completelv
untreaded territorv. Making such an ambitious profect work in far-flung villages across
rural India, under difficult conditions such as sporadic power supplv, heat, dust, poor
computer literacv and almost non-existent or verv slow Internet connectivitv, would
indeed be a challenge. We had to design a svstem that would beat all these barriers and
work in wavs that were never thought possible before. (www.yonearth.com).













79
Figure 17: The i-Shakti model






Source: www.hllshakti.com

For more inIormation in i-shakti see Appendix 6.

Having outlined the diIIerent types oI marketing communication media used by
Hindustan Lever, Figure 21 shows a summary.









80

Figure 18: Media Channels by Hindustan Lever








Source: Primary inIormation, diagram adapted Irom the literature review.


Having outlined the rural marketing communication mix Ior Hindustan Lever, the
Iollowing table will show some oI the challenges Iaced by the company.

Table 11: Challenges faced by Hindustan Lever
Rural Vs. Urban Mind
Distribution
Language problem
High Costs
Competition resulting in low stock price

Television Talent hunt of
~Rin My Super Star
Direct Advertising- Project
Bharat
Traditional media
(unconventional)
Puppetry and Folk theatre (using
actors, magicians, singers and
dancers)- Awareness of Breeze, Rin
Shakti and Surf excel
Mass media
(conventional)
Freebies- Pepsodent
toothpaste
Word oI Mouth- iShakti
Demonstrations- The Vim
Challenge
Haats and Melas- joined the
pilgrims at Kumbh Mela
Awareness campaigns- Factory at
Orai
Post cards and posters- Project
Shakti
Rural Communication
Direct Customer Contact-
Project Bharat and Lifebuoy
Swatha Chetna
81
The greatest challenge Ior advertisers and marketers continues to be in Iinding the right
mix that will have a pan-Indian rural appeal. Clearly, the main challenge that one Iaces
while dealing with rural marketing is the basic understanding of the rural consumer
who is very different from his urban counterpart.
Also distribution remains to be the single largest problem marketers Iace today when it
comes to going rural. 'Reaching vour product to remote locations spread over 600,000
villages and poor infrastructure - roads, telecommunication etc and lower levels of
literacv are a few hinges that come in the wav of marketers to reach the rural market,
say HLL`s employees.
Citing other challenges in rural marketing, they say, 'Campaigns have to be tailor made
for each product categorv and each of the regions where the campaign is to be executed.
Therefore a thorough knowledge of the nuances of language, dialects and familiaritv with
prevailing customs in the regions that vou want to work for is essential. The other
challenge is the reach and the available means of reaching out to these markets, hence
the video van is one of the verv effective means of reaching out phvsicallv to the rural
consumers say HLL`s employees.
According to Hetal (2004), although the melting oI the urban - rural divide will take a
while, this is not Ior want oI the availability oI the means but Ior want oI the rural
consumer's mindset to change; which has its own logic, which is driven by tradition,
custom and values that are diIIicult to shed.
The biggest impending Iactor or deterrent on rural monies going up is that there is a
general sense oI trying to benchmark cost per contact (CPC). The television CPC is going
to anyways be cheaper to rural CPC and unless and until the volume - value equation
turns the other way round, one will be unable to spend disproportionate monies in the
rural market, says Hetal (2004). HLL`s market share in many product categories is also
dipping as new competitors oIIer rock-bottom prices. That has driven revenues down and
hurt its stock price.
5.4 Synopsis
This chapter has analysed the external and internal audit oI Hindustan Lever and the
Iindings oI the organization interviews have been summarized using the Rural Marketing
82
Mix. Since the aim oI this project is to Iocus on the promotions` side oI marketing
communications, the diIIerent types oI media used by Hindustan Lever have been
discussed. The challenges Iaced by the company when promoting their products has been
summarized. It is evident that Lever has Iocused on the challenges related to distribution;
however, the promotional aspect has been given less importance. The company is aware
that there exist many challenges oI Rural Marketing, but has been unable to implement
these in an eIIective manner. This issue will be Iurther discussed in the latter part oI this
paper. The next section provides a general insight on rural consumers and their response
to marketing communication programs.















83
Chapter 6: Consumer Study
6.1 Overview
This chapter is a study oI consumers which aims to explore their insights about marketing
communications oI FMCG products. Utilizing a brand oI soap as an example, various
challenges oI rural marketing communication have been uncovered by a series oI
interviews. The chapter begins with a general insight on the consumers` Ieelings about
soap, Iindings related to the rural marketing mix and their Iindings related to the message
decisions model (this model has been explained in the literature review). The Iinal section
summarizes the challenges oI rural marketing communication.
6.2 Interview Findings (Consumers)

Onset

The general consensus among soap users who participated in the study is that soap is
critical in today`s liIestyle. Most likely answers were 'If vou dont use it, vou dont feel
good. One respondent said she Ieels 'happv and fresh`, aIter using soap. Another said
'The bodv smells and feels unclean iI you don`t use soap. Out oI the 10 respondents, one
claimed that I look good after using soap. Overall, everyone agreed that using soap is a
part oI their daily activities.

Reasons for purchase (Product)

The reasons Ior purchase also varied between participants. Table 12 gives an overview
oI the purchasing decisions by each oI the individual respondents. Hygiene, Ireshness and
perIume oI the soap were the major preIerence Iactors.






84
Table 12: Reasons for purchasing Toilet Soap

Freshness Beauty Hygiene Moisturizing PerIume Antiseptic Disease
Prevention
R 1

R 2

R 3

R 4

R 5

R 6

R 7

R 8

R 9

R 10

Source: Primary Data (interviews)

Consumption patterns

Table 13: Toilet Soap Consumption Per Month
Family Size No. oI Soaps
(75 grams) 1-3 4-6 7-9
1-3 3
4-6 5
7-9
10-12 1
Source: Primary Data (interviews)

In terms oI soap consumption, 50 oI the respondents usage oI soap per month was an
average oI 6 bars, shared between a Iamilies oI Iour. 3 oI the participants purchased 2
bars oI soap a month, as they either lived with their partner, or alone. 1 person claimed to
have bought 10 bars oI soap as she was living in a household oI 10 people.

Affordability (Price)

Looking at the price Iactor, most oI the respondents admitted that they could not purchase
soap on a daily basis. A maximum oI Rs.25 was spent on soap per month, said the
respondents, including one that lived with 10 people. For example, one respondent said I
spend Rs.13.50 on 6 bars of soap for two of mv children, mv husband and mvself`.
Another said I spend Rs.16 on 6 soaps, which last me a whole month.I live with 5
people. Few claimed that they would continue to buy the brand oI soap even iI the
85
price was increased slightly. In terms oI oIIers, many did not buy soap in wholesale as
they could not aIIord large quantities at a given time.

Place of Purchase (Distribution/Place)

A large number oI the people interviewed purchased soap Irom nearby stores. Others
purchased at weekly Haats. In terms oI convenience, 9 out the 10 respondents claimed
that there was no hassle in purchasing soap, and it was conveniently available. 1 person
said 'Sometimes the soap I want is not available from the shop in the village, so I fust buv
mv second preference.

Packaging

OI all the people interviewed, only 2 said that the packaging mattered to them. 'I read the
date on the packaging, said one, the other stated that he looked at the packet to observe
whether the product was Iake or real. 'I dont like using fake products and am bothered
about the qualitv, he said. Most oI the respondents admitted that only the name oI the
product had signiIicance.

Retailer

Out oI the 10 participants said that they relied on the retailer while purchasing soap. One
said 'Sometimes, I ask the retailer if there are anv cheaper variations of the soap that I
am using. I trust him, another said 'I trv to find out if there are anv new cheap
products, because I like experimenting. Another said, 'I aspire to use new products, but
I am afraid to tell mv husband, as he might not be able to afford it.

Education and Empowerment

Out oI the 10 people interviewed, all oI them had not been educated beyond middle
school. 5 out oI the 10 admitted that they didn`t know how to read or write, just speak in
the local language. Others were not conIident about their reading and writing skills. 'I
couldnt go to school after a certain age because I was responsible for looking after the
house, said one girl. Another said, 'Ive never been to a school, as mv mother taught me
86
how to read and write, but it is at a verv basic level. In terms oI employment, all the
males were working, and 2 out oI the 5 Iemales were unemployed, the rest either worked
as housewives or maid servants in the city.

Brand Awareness

LiIebuoy soap was known by everyone, Iollowed by Rexona, Hammam and Lux (See
Figure 19).

Figure 19: Brand Awareness among soap users interviewed













Source: Primary Data (interviews)


The Iollowing section will highlight consumers` thoughts with respect to marketing
communication messages and the challenges that marketers Iace. The message decision
model by Velayudhan (2002) will be used.

Promotions: Effect of different types of marketing communication


Various challenges were uncovered Irom the interviewees (These are underlined in blue).
For example, Basanti, a tea-garden worker claimed that she was earlier using Lux,
through a TV commercial, which she saw at her mother`s house, since she did not own a
TV oI her own. 'I liked the commercial, because it showed how a girl in the village of
Rafasthan started using this soap, and all the people around her started commenting how
good she looked and smelt, said Basanti. Being a Rajasthani, she was Iascinated when
she saw her native place in the advertisement. 'I could make a strong association with
0
2
4
6
8
10
No. oI people Irom
those interviewed
1
Brand names
Lifebuoy
Rexona
Cinthol
Liril
Hamam
Lux
Chandrika
Medimix
Fresh
Dove
87
the advertisement, and will alwavs remember it. ThereIore it can be seen that
advertisements which show familiar settings form strong connections with the rural
mind.

Basanti had used Rexona once earlier, and it 'had a nice fragrance, she said. The lady
was aware that both Lux and Rexona were perIumed and were long lasting. Hence, she
chose the cheaper option (Rexona) as consumption oI soap proves to be quite expensive,
proving the poverty oI the rurals. However, iI by chance both the options were
unavailable at the village shop, she claims 'I would ask for a recommendation from the
retailer Thus, the rural consumer looks Ior 'trust that is used for feedback on product
performance. In response to owning televisions, more than 50 oI the respondents did
not own a television.

The radio adverts seemed more popular than TV adverts, and Sunil, a 35 year old tailor
claimed that he has been using the LiIebuoy brand oI soap ever since the commercial. 'It
suits me, and mv familv`. As he said 'I would trv other brands but this is the one that mv
wife and mv children like, so I will stick to it. The only reason I would switch to a
diIIerent brand is on 'if the price significantlv increases. Thus, brand switching happens
only iI prices are increased drastically.

'I see frequent video adverts of new and upcoming products, as companies send video
vans across mv village sometimes, but some of them are more expensive than the one I
use now, said Sunil. 'The advertisements are oIten hard to interpret, and I oIten don`t
understand the slang language, and double meanings, said Sunil. Thus, it can be seen
that rural advertising is best understood when it is simple and straightforward.

For example, Basanti said that a simple commercial oI Lux soap, seen in her mother`s
house conveyed to her that it had a mild and fresh scent, something that was attractive,
and thereIore she purchased it. Also, the message was utilitarian which conveyed the
beneIits oI the product that the she was looking Ior.

Word oI mouth advertising also seemed to work Ior most oI the rural people. 'Mv
husband bought Hamam soap as it is cheap and is recommended bv all our friends, as
thev all like it, claimed Gita, a landless agricultural labourer. Thus, when a product is
88
likeable for the rural consumer, his/her Iriends or close associations will be likely to
purchase it.

'I have seen advertisements as wall paintings in lots of places in the village, but I dont
understand the language, fust the pictures, said Gita. When asked about her literacy
level, she said she didn`t know how to read or write, similar to a majority oI the
interviewees.

Indrani said, 'I use Cinthol, because it makes me feel fresh, exactlv like the TJ
advertisement which I see when I watch mv favourite serials.however, I cant watch TJ
often because our village has tremendous electricity problems. She glances through the
newspaper occasionally. She cannot read or write, but enjoys looking at adverts and
pictures. 'I see various pictures of celebrities and people living in big cities, thev wear
good clothes and look nice. I aspire to be like them one dav. This 12 year old has never
attended school and handles household chores. Thus, one can observe that the rural
people possess aspirations to become like the urbans. Moreover, one can conclude that
pictorial presentations improve their recall.

In terms oI awareness programs, a major part oI the rurals had come across these
sometime in their liIe. 'I have heard of manv soap companies doing promotional
programs. In mv village, Lifebuov had carried out the Lifebuov Swasthva Chetna, and I
reali:ed that soap prevents diseases. I didnt know that it kills germs.` Ive used Lifebuov
in the past, but I didnt like the fragrance, so I switched to other soaps.I like to smell
good, because I feel good`, said Indrani.

Some oI the rural people did go to the cinema, although this proved to be inIrequent as
they could not aIIord Irequent visits. 'I reallv like Preitv Zinta, she acts reallv well, and
the least I can do is buv the soap that she uses! said Ajay, a cook in one oI the
metropolitan city hotels. Being an illiterate, Ajay, was unable to realize that this celebrity
only advertised the product, and did not really use it. 'Ive gone to the cinema and seen
her adverts in the commercials during the intervals.

Ajay has always used Lux, as it has many diIIerent variants. 'However, mv wife does not
appreciate these kinds of advertisements, because she thinks thev are vulgar as the
89
women shown are bathing and exposing their bodv, which is not acceptable in our
conservative societv, claimed Ajay. Thus, words and actions carry different meanings
for the rural consumers. An urban consumer might Ieel that the woman in the
advertisement looks beautiIul or sexy`, while the rural consumer might portray her to be
vulgar and against the society`s morals and values (DiIIerence between rural and urban
minds).

Villagers oIten buy products at Haats or melas. 'I buv soap from Haats, and I usuallv go
there weeklv, as the soap I purchase over there is cheap.I also visit Melas during
festivals, as Im verv fond of buving bangles, said Pinky, a housewiIe in the village.

'I take mv children to watch the traditional dances, folk songs, performances bv stilt
walkers, magicians, puppeteers and fire-eaters`. 'Once, at the Kumbh Mela, Rexona
soap was giving awav freebies, so I started using this soap from then on.it is perfect for
me, said Gautam. This man is very poor, and he can barely make ends meet. ThereIore,
he cannot by soap regularly, and sometimes goes without using soap.

Ravi, a Iarmer who works long hours in the paddy Iield, says, 'I own a television and a
radio, but either I am too tired for entertainment, or I fust don`t have the time... I started
using Medimix soap, after being recommended bv a village retailer, but it was horrible
and did not last long. He can read, so whenever he buys soap, he looks at the expiry
date. He has switched to Hamam. Both Medimix and Hamam are herbal and natural
soaps, and he is aware oI that. Hamam is cheaper and oI better quality.

It can be concluded that conveying messages to the eIIective target audience is oI
importance to the marketer. Velayudhan (2002, p. 102-104) has identiIied a number oI
Iactors inIluencing the communication oI messages, shown in the message decisions
model in the literature review. Figure 20 shows a summary oI the Iindings oI the
consumers` interviews in relation to this. A table Iollowing this Iigure has been used to
summarize the key challenges that have emerged Irom these interviews.




90
Figure 20: Message Decisions from Consumer Interviews









Source: Primary inIormation, Diagram adapted Irom the Literature review.

To summarize the challenges that emerged Irom these interviews, it is important to take a
look at the table 14. These have already been explained earlier (beIore Figure 20).








Message
Associations
Language
Pictorial
Presentation
Form
Source
Meaning: Words carry diIIerent
meaning by region and cause
distortions E.g.
COASERJA1IJE SOCIE1Y
Simple: Improves receptivity:
E.g. LUX ADJER1
MESSACE- mild and Iresh`
Improves recall: E.g.
CELEBRI1Y ADJER1ISIAC
Trustworthy: Used Ior Ieedback
on product perIormance. E.g.
RE1AILER
Likeable: Increases acceptance.
E.g. WORD OF MOU1H
Utilitarian: InIluences attitude
and preIerence: LUX ADJER1
Creates interest and improves
concentration E.g. LUX
ADJER1 in RA1AS1HAA
91
Table 14: Challenges emerged from consumer interviews

Poverty
Low standard oI living
Illiteracy
Busy LiIestyle
Rural Vs. Urban thinking


6.3 Synopsis
This chapter has analysed the Iindings oI the consumer interviews, which have been
summarized using the Rural Marketing Mix. Since the aim oI this project is to Iocus on
the promotions` side oI marketing communications, message decisions model has been
discussed with relation to the interviews. The challenges emerged Irom the consumer
interviews have been summarized. It is evident that consumers Iace challenges such as
poverty, low standard oI living, illiteracy, busy liIestyle and the diIIerence between rural
and urban minds. The next section provides a detailed analysis oI the consumers` and
organizations` challenges oI rural marketing.














92
Chapter : Discussion

7.1 Overview

In this chapter the challenges oI the case study and consumers` study are summarized and
thereaIter analysed in relation to the various challenges outlined in the literature review.
This analysis will enable me to critically discuss the research objective by combining
hypothesis Irom literature review and the case study Iindings. It will help me explore the
challenges oI the rural marketing process to ultimately recommend meaningIul initiatives
which need to be taken to develop eIIective marketing communications to the LiIebuoy
brand oI Hindustan Lever Ltd.

7.2 Analyzing the Research Objective

What are the main "promotional" challenges for rural marketing communications and
how can they be overcome?

Table 15: Promotional Challenges for Rural Marketing
Challenges from Research
Challenges from Literature Review Company Findings Consumer Findings
Vastly scattered market
Rural vs. Urban Mind
Poverty
Low standard oI living Distribution Low standard oI living
Lack oI desire Ior new liIe-style Language Problem Illiteracy
Language problem High Costs Busy LiIestyle
Rural vs. Urban Mind
Competition resulting in low
stock price
Rural vs. Urban
thinking
Overall backwardness
Inadequate marketing support
Inadequate communication Iacilities
Lack oI proper planning
Ancient and obsolete business technique
Immature customers (poverty, illiteracy)
Liberalisation and globalisation
Segmentation dilemma
Availability oI appropriate media
Rural markets and sales management
Branding
Packaging
Awareness

93
According to the literature review, the major dilemma Ior companies today is the gap
between the rural and the urban consumer. The reason why only Iew companies have
managed to venture out is because oI the lack oI understanding into the psyche oI the
rural consumer. Findings Irom the interviews oI both the organization and the consumers
show that this challenge exists (See Table 15).

Interviews with Hindustan Lever Ltd. show that it has been successIul in the past and has
really carved into the heart oI the rural market. Due to their consistent eIIorts at
marketing their products, HLL has achieved signiIicant recognition in the country
households. However, competition is Iorcing this company to lower its prices which is
eventually hurting its stocks.

Being the largest FMCG company in India, HLL has tremendous growth opportunities. It
has to realize that it needs to understand the rural environment and put in place the
distribution and communication strategies. This is shown in Figure 21.

Figure 21: A combination of strategies

Strategy 1 Strategy 2

PROBLEM
(Cannot develop
effective
marketing
strategy)




SOLUTION
(Develops
effective
marketing
strategy)


Focus on Promotion
ONLY
Focus on Distribution
ONLY
Focus on Promotion





Focus on Distribution
GAP
HLL`s present strategy

94
Figure 21 shows that there is a gap which exists in HLL`s strategy to capture markets.
This problem can be solved only iI there is a combined Iocus on distribution and
promotion, thus enabling the company to acquire proIits and growth.

'HLL will compete bv 'plaving to strengths - using our strong brands, leveraging
technologv and scale to cut costs and drive distribution, says Jain, an employee at HLL.

For instance, in the laundry market, where there are over a thousand local players, HLL`s
wheel is the market leader, and in the area oI skin care, the FMCG major have recorded
impressive growth despite low cost competition.

'We are confident, that we will sustain growth in the face of such competition in other
categories also, as we have done in the past`. Freebies and buy Iree get one Iree` kind
oI campaigns shore up sales per se but do not help top line growth.

'Ultimatelv, companies, irrespective of the categories thev operate in, will have to
ensure that their brands induce consumer pull because of differentiated benefits and
value that thev offer`, says Jain.

The company believes that once sustainable and eIIective distribution system has been
established, a rural consumer might actually turn out to be a more loyal consumer that his
urban counterpart. The reasons being that he has less brands Iighting Ior his mind space
and he has more time to reIlect about each brand he uses.

HLL plans to increase the width and depth oI its distribution. It has already established a
single distribution channel Ior rural India by consolidating categories, and is now
reaching out to 250 million rural consumers in approximately 50,000 villages
(www.hll.com). The emphasis Ior the present seems to be on distribution, which is to
ensure availability oI their brands even in smaller markets.

However, when it comes to promotions in rural markets, it is mostly engaging in short-
term sales-oriented below-the-line activities, without any emphasis on how the core
message oI the brand is to be communicated to the rural masses. Using the same
communication package that is being employed to target urban audiences will not work.
95

Since the Iocus oI this project is on communication issues, rather than distribution, the
challenges to overcome promotional problems will be discussed. Moreover, HLL does
not seem to be Iacing a crisis related to distribution at present. Thus, it is advisable Ior
this company to include promotional aspects in its strategy. The Iollowing paragraph will
discuss how to bridge the gap between the urban mind and the rural mind, a major
promotional challenge that emerged Irom the primary research that was carried out.

Urban Mind vs. Rural Mind- A Major Challenge

'Companies have believed that rural markets are fust geo-graphical extensions of urban
markets. On the contrarv, rural markets are separate entities altogether- cultures and
ethos, values and beliefs, distribution value chain.attitudes, approaches to buving,
consuming etc., all are different`.
- R V Rajan, CMD, Anugrah Madison Advertising PVT Ltd.

Conventional wisdom on rural marketing states that the needs oI the rural consumers are
similar to those oI the urban consumers. Hence, the products made to urban
speciIications should suit the requirements oI the rural consumers (Singh. 2001, p.203).
However, this is not true in many cases, as there is a market diIIerence between rural and
urban environments.

For instance, Kerosene or LPG gas stoves, where the Ilame
can be controlled are used Ior cooking in urban areas. In
rural areas, an open Iire or Chulha` is used (See picture on
the right). Pressure cookers with handles one side suit
urban consumers, but not a rural one, as they use open
Iires. A wide-bodied cooker with handles on opposite sides
suit rural requirements. ThereIore, while designing and developing products; the
requirements oI the rural consumers are to be considered.

Though rural communication is so vital in rural marketing, it is being given a step-
motherly treatment by Hindustan Lever, with the result that the company only gets
96
inadequate results Irom their rural eIIorts. This clearly indicates a poor understanding oI
rural marketing in general and the role oI rural communication in particular.

Carrying out a van campaign, once in a blue moon, is not rural marketing. For sustained
results, it is important to plan an integrated campaign covering both mass media and
below-the-line activities. In these davs of quarterlv results and managers looking for
better bottomlines to keep their fobs, it is clear that most companies look at the rural onlv
for short-term promotional efforts (Rajan, 2005).

To be successIul in rural India, HLL must go with a clear long-term strategy. They
should be willing to invest as much energy in rural markets as they did to build brands in
the urban ones. As rural eIIorts take longer to give sustained results, they must be
prepared Ior a long haul. While anyone can think oI ideas Ior below-the-line activities, it
requires conscious eIIorts by proIessionals to connect with the audience with the right
communication package, which takes the core message oI the brand and communicates it
in a language and style that is easily understood by the target audience.

With the increase in the rural literacy levels and exposure to media, people in rural areas
are also becoming conscious oI their purchasing decisions akin to their urban
counterparts.

'This makes it even more challenging for companies to understand the buving behaviour,
the consuming pattern, and the needs and wants of the rural consumer, avers Das
(2006).

Findings Irom the interviews suggest that and even though a majority oI people do not
own televisions and radios, communication oI this kind oI media seems to be more
successIul, in comparison to print media. These channels have greater growth rates, and
priority should be given to these.

Another way to bridge the gap between the urban and rural, use oI new lingo, style,
glamour, Iashion-celebrity appeal should be used as they help get attention. Moreover,
elements that have undertones oI achievements like freedom and progress are a huge
success, said Sivakumar (2006). The need here is to Iocus on communication that is
97
inclusive oI rural people and stay away Irom the urban-rural divide. Thus, companies
should be able to engage the rural consumer on a platIorm that it part oI his natural
environment and create an atmosphere oI trust around it.

The complete concept oI selling in rural markets lies in communication- what you do, Ior
whom do you do, when you do and how you do it. Brands being non-existent,
identiIication is basically on the basis oI colours, visuals (animals, birds or any symbol)
and numbers along with endorsements by local leaders or icons (USP Age 2006).

Illiterate people remember brands only by pictures symbols as opposed to brand names.
Care should be taken to deliberately design a symbol Ior the product beIore introducing it
(Dhingra & Sharma |2002|, p.160). To avoid any alternative use oI a company`s
products, such as the usage oI shampoo Ior brushing teeth, and toothpaste Ior washing
hair, using washing machines to make drinks, educating and creating awareness about the
right use oI products is another major promoting activity.

Advertisements should be tailor-made and modiIied to suit regional requirements, in
order to counter linguistic, social and cultural diIIerences. However, priority should be
given to local promotional tools (wall paintings, stalls, hoardings etc. over advertising, as
the latter is marked by selective attention and retention. Vans and animal publicity should
be used as these help spreading advertising messages. Vans can also carry products to
induce brand trial.

For example, elephants can be used to carry banners on them and be made to parade in
the villages. Appropriate scheduling oI advertisements is also necessary, and these
should be implemented during post-harvest periods, when Iarmers and cash-rich rurals
are in the correct Irame oI mind to consider buying new products. A Iocus on opinion
leaders and reIerence groups may help as these inIluence the buying decisions oI the rural
consumer.

One must keep in mind that a rural consumer cannot understand clever, gimmicky, Iast,
quick, suggestive and hi-tech messages. Unrelated symbols, icons and characters
misguide and conIuse them which oIten create a gap between the company and rural
Iolks. A clear connection between the problem and the solution is what they want and
98
what companies need to oIIer. Additionally, understanding the wants, needs, aspirations,
dreams and expectations oI the rural consumer is important.

Additionally, rural consumers still live in the traditional Irame oI mind, where he values
emotions, customs, and belieIs are given prime importance. This is not to state that the
urban consumer has Iorgotten his traditions and values. But, there exists a shiIt in mind
set where the urban society is slowly, but surely, turning into a consumerism society
(USP Age, 2006).

7.3 Limitations of the Study and Future Research

It is seen that there are certain limitations to the study conducted by the author. The Iirst
disadvantage is that only 10 consumer interviews were conducted and hence it is possible
that the Iindings may not reIlect a comprehensive picture oI the general population oI the
rurals.

Yet another drawback was that in view oI time constraints, only Iew company
perspectives was considered. The research Iindings Irom this paper could, however, be
taken Iurther by involving more consumers and company Ieedback as part oI the
interview exercise so that the Iindings could be more accurate.

The study would have been more comprehensive, iI the advertising and communication
oI competitors were studied Ior the sake oI comparison. A single case study approach
oIten causes restrictions, and there is no scope to think strategically using a broader
perspective. Moreover, it can be weak and lack precision.

Additionally, using more than one FMCG product as part oI analysis would have made
this paper more productive.

7.4 Synopsis

It is well known that marketers who take the trouble oI developing communication
strategies which connect better with the rural audience always succeed, provided the rural
customers perceive value in the product or service. Findings Irom the interviews suggest
99
that companies need to Iocus on both the distributional and promotional side oI
marketing to eIIectively market their products to the rural consumer.

Using a mix oI traditional and conventional media is vital, and bridging the gap between
the urban and rural mindset is oI absolute importance beIore implementing any marketing
strategy. By equating the rural consumer with the urban, companies are missing on a
potential market. It must be understood that rural consumers are diIIerent in their
attitudes, values, belieIs, and consumption pattern, purchase preIerences and tastes.
Companies should not Iorget that the rural consumer has an aspirational urban consumer
in him. They have to provide products with a mix oI both utilitarian and aspirational
Ieatures.























100
Chapter 8: Recommendations and Implications

8.1 Overview

This chapter is divided into two sections. The Iirst part will have a TOWS analysis
which will enable Hindustan Lever`s LiIebuoy to understand how it can manage the
strengths oI its brand to the opportunities in the environment. Recommendations and
implications will be provided to this brand oI soap, to help develop eIIective marketing
communication programs.

ThereIore, this section will answer the aim oI this paper which (stated earlier) is By
utilizing an example of a branded soap (in this case Lifebuoy) in rural areas, how can
FMCC companies develop effective marketing communication strategies for
consumers in the Indian rural market?

8.2 TOWS Analysis

A TOWS analysis is done to match the strengths and weaknesses oI the LiIebuoy brand
to the opportunities and threats that exist in the environment. It is based on the Iindings
presented in the case study chapter (Chapter 5). Quadrants highlighted in blue exempliIy
the strengths, weaknesses, opportunities and threats. Those highlighted in pink show the
strategies (recommendations) that the company could possibly undertake to use its
strengths (internal) and opportunities (external) to reduce the eIIect oI weaknesses and
threats.

One reason why a TOWS analysis is done instead oI the conventional SWOT analysis is
because it oIten leaves the vital question unanswered, 'so what do we do now that we
have a SWOT table? A TOWS analysis helps compare, contrast and combine the Ts, Os,
Ws and Ss, in various ways so that action plans can use the strengths to exploit an
opportunity (Coyle, 2004). The TOWS analysis is presented on the Iollowing page.




101

Strengths

Sizeable share oI the Indian soap
market

Strong distribution network-
easy access, product availability,
brand communication, & higher
levels oI brand experience

Deep roots in understanding local
cultures & markets

Invests in consumer research &
marketing


Weakness

Costly awareness programs
that are not always sustainable

Declining brand proIits

Brand becoming less attractive

Fierce competition

Product characteristics
becoming outdated

Earlier relaunch- not a huge
success, increase in production
costs
Opportunity

Growth in rural markets twice
as urban markets

Increase in branded products
Strategies

Build brand loyalty using
consumer research

Capture a larger market share by
advertising & using earlier brand
knowledge and experience
Strategies

Increase price slightly with
improved product Ieatures to
make the product attractive, &
thereby increase proIits &
minimize competition


Threat

Rural areas not reached by
television, radio or
newspapers.

Illiteracy is widespread


Deep-rooted belieIs
about cleanliness that have
to be addressed, such as
the widely held belieI that
iI hands look clean, they
are clean.

Saturated market- Ilooded
with too many brands

Poverty
Strategies

Use oI traditional media to reach
the target audience in their
language and culture

Educate rural consumers about
health beneIits

Direct campaigns to transIorm
hand wash behaviour & greatly
increase the Irequency oI hand
wash & sales



Create an attractive product
characteristic that is unique

AIIordable product that
minimizes diseases & is made
available using the distribution
network
Strategies

Strategic selection oI villages
so that costs are low and
eIIiciency is high


TOWS
ANALYSIS
102
The TOWS analysis above shows that the cheaplv priced beautv bar, in other words,
LiIebuoy, is beginning to become less attractive causing a decline in sales. The soap
stands Ior 'improving health and killing germs (Sharma, 2002). A method needs to be
implemented in a way that will touch the hearts oI the consumers.

The company is becoming synonymous with other players in the market who promote
their soaps with reIerence to health`. Hindustan Lever`s LiIebuoy can go a step Iurther
by demonstrating how soap can help eliminate common health problems, such as
stomach inIections, inIected sores and eye inIections. It can improve its product
characteristics making it more attractive. Incorporating anti-bacterial agents and
additional beneIits can beneIit this soap brand.

For example, by adding an extra germ-kill ingredient and increasing the price slightly,
the strategy implemented can be value for monev. The product will still be aIIordable
by the rurals, and will also be oI higher quality. Not only will this beneIit the consumers
and raise their quality oI liIe, but will also help the company in seeking additional proIits.
By creating commercials that link LiIebuoy to the prevention oI diarrhoea, eye inIections
and inIections oI cuts and wounds, mass media can reach a variety oI customers.
However, not all rurals have access to mass media, thus the company can use traditional
media to market LiIebuoy soap.

In order to reach rural consumers, HLL has to understand rural behaviours and
preIerences. Research on hygiene and hand washing procedures should be carried out.
Most consumers in India still associate cleanliness with the absence oI dirt as opposed to
the eradication oI bacteria.

'Consumers often define their hands being dirtv if thev were stickv, oilv, discoloured or
have odour (Sharma, 2002). However, iI their hands look and Ieel clean, then consumers
consider their hands to be clean. By promoting a strategy that visual clean is not real
clean`, the consumers will become aware. This will lead to Irequent hand washing and a
higher usage oI soap will be seen. HLL should strive to educate consumers on germs and
the consequences oI these on one`s health, in order to increase soap usage as a means oI
deterring bacterial inIection.

103
By designing education campaigns Iocussing on uniting the health attributes oI LiIebuoy
soap with messages oI germ eradication, the company can successIully reach the minds
oI illiterates. The programs should be aimed at being scalable and sustainable, and
interaction should be a key Iocus.

Using audio-visual equipment, puppetry, Iolk dances, drama and games, the company can
eIIectively educate consumers. However, using low coast equipment and props is
necessary as expenses in rural areas can be enormous. Hiring Iacilitators Irom local
regions who know local dialects and can utilize local Iorms oI transportation is important.
In this way, HLL can maximize its reach to new customers as well as reassure old
customers that the new LiIebuoy Iormulation is better than the old Iormulation.

Focussing on the entire country may prove to be diIIicult and expensive; thereIore the
company can systematically chose areas to target these campaigns. Choosing states that
have strong loyalty to the LiIebuoy brand, reviewing district data to determine which
states have high inIrequent soap users and which ones use soap Irequently would help the
company in deciding which markets to target. This will help the team in capitalizing on
high-growth regions. It could aim to provide a direct multiple-contact program that could
bring about a liIe-long behavioural change. This would lead to a liIe-long increase in
soap consumption. By working to ensure that its products are distributed and available in
all targeted regions, the company can beneIit Irom a huge increase in sales.

Also, research has shown that the 'use of a brand can help strengthen the health
messages being delivered bv conveving qualitv, increasing consumer confidence, and
ensuring that messages are delivered in a non-patroni:ing or demeaning tone (Sharma,
2002).

By reaching out to poor populations with a strong brand name, and building habits
involving their brand name, HLL can create an unshakeable hold on consumers` wallets.
However, promotion oI a branded product may leave a company open to criticism
(Sharma, 2002). ThereIore, it is important Ior the campaigns to have a solid Ioundation,
and prove the beneIits oI the product advertised.

104
The points mentioned above claims that the company should adapt its 'product and
'promotions strategy. Thus, it should implement dual adaptation` shown in Figure 22.


Source: Adapted Irom the literature review

To summarise, HLL`s will beneIit Irom this 'dual strategy, as diIIerentiating its soap
product on a platIorm oI health will take advantage oI an opening in the competitive
landscape Ior soap. Providing aIIordable health soap to the needy achieves not only
product diIIerentiation, Ior a mass-market soap, but also taps into an opportunity Ior
growth through increased usage.

As mentioned earlier, in India, soap is perceived as a beauty product, rather than a
necessary health measure. Consumers Ieel that visual clean is real clean and either do
not use soap to wash their hands, or use soap inIrequently. Sometimes, they substitute
cheaper products which they believe deliver the same beneIits. Through innovative
communicative programs, HLL can link the use oI soap to a promise oI health as a means
oI creating behavioural change. This will increase sales oI its low-cost, mass market soap.

The company can build new habits and develop increased brand loyalty. A health
benefit will in turn create a higher perceived value for monev, increasing a consumers
willingness to pay. By raising consumers` level oI understanding about illness
Straight Extension
Communications
Adaptation
Product
Adaptation
Dual Adaptation
Product
Invention
Do not change Product Adapt Product Develop New Product
Do not change
Promotion
Adapt
Promotion
PROMOTION
PRODUCT
Figure 22: Lifebuoy`s Product/Promotion Mix
Lifebuoy`s
future strategy
105
prevention, the company will have a meaningIul impact on the Indian population`s well
being and IulIil its corporate purpose to 'raise the qualitv of life.
































106
Chapter 9: Conclusion

Gone are those days when a rural consumer travelled Ior a couple oI hours to a nearby
city to buy 'branded products and services. Time was when only exclusive households
consumed branded goods, be it tea, cosmetics or jeans. There were days when huge
organizations Ilocked to rural markets to establish their brands. Today, rural markets are
critical Ior every marketer - be it Ior a branded soap or an automobile. As urban markets
are getting saturated Ior consumer goods (FMCG & Durables), marketing executives are
Ianning out and discovering the strengths oI large rural markets.

Time was when marketers thought van campaigns, cinema commercials and a Iew wall
paintings would suIIice to entice rural Iolks under their Iolds. Thanks to television, today
a customer in a rural area is quite literate about myriad products that are on oIIer in the
market place. An Indian Iarmer going through his daily chores wearing jeans may sound
idiotic. Not anymore, though. Advertising is creating quite a sensation among the rural
Iolks and they are indulging in branded purchases. A mix oI traditional and modern
communication methods is the key to success Ior any organization which aims to woo the
rural consumer.

The aim oI this project was to analyse how FMCG (Iast moving consumer good)
companies can develop effective marketing communication strategies by overcoming
the promotional challenges oI rural marketing. The Rural Marketing Mix by Gupta, 2000
Iormed the main basis oI analysis Ior this project. The Product/Promotion Mix (Gupta
2000), The Message Decisions Model (Velayudhan 2002) and The Types oI Media
Channels by Ramakishen (2002) were also used Ior explanation oI the literature review
and the analysis.

Hindustan Lever Ltd. has been chosen as the case study as part oI the research design
process. The case study was exploratory in nature, as it aimed to explore or search
through a problem or situation and to provide insights and understanding. Since the
purpose was to understand the response oI the rural people towards marketing
communication eIIorts oI a particular FMCG product, as well as uncover inIormation
Irom an organization`s perspective, the data was not quantiIiable. Hence, data analysis
Iocused on the qualitative approach. It was suitable Ior this project as there was a need to
107
stimulate understanding oI meanings, reasons and conditions. Both primary and
secondary data were collected which included books, journals, magazine articles,
documents, archival records and interviews with consumers and company employees.

According to the analysed data, the major dilemma Ior companies today is the gap
between the rural and the urban consumer. The reason why only Iew companies have
managed to venture out is because oI the lack oI understanding into the psyche oI the
rural consumer. Findings Irom the interviews oI both the organization and the consumers
show that this challenge exists. This reveals that poverty, illiteracy, low standard oI living
and diIIerence in language are major problems that companies Iace.

Hindustan Lever Ltd. has been successIul in the past and has really carved into the heart
oI the rural market. A consistent eIIort at marketing its products has led the company to
achieve signiIicant recognition in the country households. However, competition is
Iorcing this company to lower its prices which is eventually hurting its stocks. Thus, there
is a gap which exists in HLL`s strategy to capture markets, as it only Iocuses on
distribution and provides little attention to communication strategies.

Not only HLL, but many companies are Iacing similar problems while marketing their
products to rural consumers. To develop eIIective marketing strategies, an organization
must make use oI both conventional and traditional media, while keeping in mind the
diIIerence in the mindset oI the rural Iolk. Extensive consumer research, education
programs, direct campaigns, attractive product characteristics, aIIordable and superior
quality products are highly recommended.

Thus looking at the challenges and the opportunities which rural markets oIIer to the
marketers, it can be said that the Iuture is very promising Ior those who can understand
the dynamics oI rural markets and exploit them to their best advantage. A radical change
in attitudes oI marketers towards the vibrant and burgeoning rural markets is called Ior,
so they can successIully impress on the 230 million rural consumers spread over
approximately six hundred thousand villages in rural India.


108
Reerences

Aaker, D.A. (1996) Building Strong Brands. London: Simon & Schulster.

Agadi, R.B. and Paramshiviah, P. (1997). Rural Marketing in India, Udaipur: National
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Aneja, Rajendra K. (1992), 'Evolving Optimum Media- Mix and Communication
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116
Appendix 1
Six Sources of Evidence - Strengths and Weaknesses

Source of
Evidence
Strengths
Weaknesses
Documentation Stable can be reviewed
repeatedly
Unobtrusive not created
as a result oI the case
study
Exact contains exact
names, reIerences, and
details oI an event
Broad coverage long
span oI time, many
events, and many settings
Retrievability can be
low
Biased selectivity, iI
collection is incomplete
Reporting bias
reIlects (unknown) bias
oI author
Access- may be
deliberately blocked
Archival Records |Same as above Ior
documentation|
Precise and quantitative
|Same as above Ior
documentation|
Accessibility due to
privacy reasons
Interviews Targeted Iocuses
directly on case study
topic
InsightIul provides
perceived causal
inIerences
Bias due to poorly
constructed questions
Response bias
Inaccuracies due to
poor recall
ReIlexibility
interviewee gives what
interviewer wants to
hear
Direct
Observations
Reality covers events in
real time
Contextual covers
context oI event
Time consuming
Selectivity unless
broad coverage
ReIlexivity event may
proceed diIIerently
because it is being
observed
Cost- hours needed by
human observers
Participant-
Observation
|Same as above Ior direct
observations|
InsightIul into
interpersonal behavior
and motives
|Same as above Ior
direct observations|
Bias due to
investigator`s
manipulation oI events
Physical Artifacts InsightIul into cultural
Ieatures
InsightIul into technical
operations
Selectivity
Availability

Source : Yin (2003)


117
Appendix 2
Consent Form
Title of Study: Rural Marketing Communication Ior Fast Moving Consumer Goods
Principal Investigator: Pooja Suchanti
BeIore agreeing to participate in this research study, it is important that you read the Iollowing:
Purpose of the study and how long it will last:
The purpose oI this interview is to understand the buying behaviour (FMCG products) oI the rural
people in response to rural marketing communication. It will take approximately 45 minutes to
complete the interview.
Description of the study including the procedures to be used:
You will be asked about your daily purchases oI FMCG products and your attitudes towards
diIIerent Iorms oI marketing communications used by advertisers.
Description of procedures/elements that may result in discomfort or inconvenience:
There are no Ioreseeable physical or psychological risks when you participate in the interview.
Confidentiality of research records:
A digital recorder will be used to record your answers. Your answers to the interview will be
kept conIidential. Only the researcher will have access to the data. No attempt will be made to
identiIy you individually.
There is a possibility that data Irom this survey could be used Ior Iurther research beyond the
initial study.
Withdrawal from Study
You are Iree to withdraw your consent and discontinue participation in the study at any time
without consequences.
Payment for participation in the research:
Participants in this study receive Rs.20 Ior participating in the interview (CONSUMERS ONLY)
RESEARCH SUB1ECTS` RIGHTS: I have read or have had read to me all oI the above.
Signature.






118
Appendix 3
Interview Guide- Consumers
Round 1: General questions

Do you think using soap is critical in today`s liIestyle? II so, why?

Are you aware that soap can save lives, kill germs and prevent disease? What are your
comments?

Do you use toilet soap? II so, how oIten?

II not, how do you cleanse yourselI? Why don`t you use soap?

For how long have you been using this soap, and which brand oI toilet soap were you using
beIore this?

Who in your Iamily decides which soap to buy?

What brands oI toilet soap are you aware oI?

Instruction: The brand names will be asked Iirst on Iree-recall and then once a list is obtained the
list oI names will be presented to Iind out iI those are being used: LiIebuoy, Hamam, Lux,
Rexona, Cinthol, Lyril, Chandrika, Fresh.

Now that you have mentioned the diIIerent brands could you kindly tell me the ones that you
have used?

Round 2: Experience of use

What are the immediate beneIits you seek when you use soap?

Freshness, cleanliness, beauty, no side eIIects any others?

Are you aware oI the active ingredients oI the diIIerent brands or the brand you currently
use? Do you Ieel that diIIerent ingredients make a diIIerence to you when using the product?

Could you describe your personal reasons Ior cleanliness? makes me look good and hence need
to use soap! etc.

Could you describe a day in the past where unhygienic ness has really aIIected you and what
negative Ieelings did you go through?

What are the positive Ieelings associated with cleanliness?

Would you switch between brands iI they oIIered the exact same attributes that you are looking
Ior?

What are your current perceptions on the diIIerent brands that are available? Do you Ieel that they
work mostly the same or there is a diIIerence?



119
Round 3: The Rural Marketing Mix: Product, Price, Place (Distribution), Promotion,
Retailer, Education & Empowerment

Product:

What is that makes you like using your brand oI soap? (PerIume, long lasting, Ireshness, lather)

Does the product Iunction according to your needs? Does it meet your expectation level, or
beyond it?

Does size matter when you purchase soap? What do you preIer and why?

Does the packaging make any diIIerence to you? Is there anything about the packaging that
attracts you to the product that you are currently using?

Does the quality matter? Would you opt Ior using a premium quality product?

Do you think it is saIe to use the product?

Have you used any soap product in the past and have been dissatisIied by it? What did you not
like about this particular brand?

Price:

Can you aIIord to buy soap Ior daily use? II so, how many do you buy a month, and how much do
you pay Ior it?

How many persons are there in your household and how much soap does your household use per
month?

Would you rather buy products on wholesale or at a discounted rate?

Are you Ilexible while buying this product? Would you still purchase it iI the price was slightly
increased?

Would you still use the current product iI the price was signiIicantly increased, or would you opt
Ior another brand?

Place/Distribution:

Where do you purchase your product? (Street shops, melas and Haats, village retailer, cities?)
Why do you purchase Irom this place?

Is it convenient Ior you to purchase this product? II not, why?

Promotion: (Mass Media vs Traditional Media)

How did you come to know about the soap you are using presently?

Mass Media

Do you read newspapers? II so, which newspapers do you read? Can you recall any
advertisements?

120
Do you own a Television? Do you watch programmes on Television? Which part oI the day do
you watch it? Do you like seeing the adverts?

Do you own a radio set? Do you listen to radio? What do you listen to on the radio?

Do you watch movies in theatres? How oIten do you go to the movies? What do you do during
the interval and slide shows?

Have you heard Irom anyone about the product that you are using? Any Iriends or relatives that
use it?

Have you ever seen an advertisement on wheels (video on wheels)? What do you Ieel about
them?

Do the village Panchayat` in any way try to inIluence your toilet soap purchase decision?

Traditional Media

Are you aware oI banners, posters, tableaus etc. in the area that you live? Do you have any
comments on them? Can you comprehend them?

Do you enjoy watching Puppet shows and Iolk theatre? II yes, how oIten do you watch them?

Have you ever come across processions, or been a part oI them?

Do you have wall paintings in your village? Have you come across any adverts on them?

Do you like going to Haats and Melas? Do you purchase products Irom these places? II so, why,
and what do you purchase? Why do you go to these places?

Retailer

Has a retailer ever inIluenced your purchasing decision when you buy this product? Does he/she
provide you with relevant inIormation (quantity, quality, promotional schemes, inIluence oI
adverts, consumer Ieedback)?

Do you see a strong bond between yourselI and the retailer? Is he/she trustworthy? Does he/she
support your buying decisions? Is he/she convincing?

Education and Empowerment

What is your level oI education? Are you literate/illiterate? Can you read/write English, or both?
What languages do you understand?

Can you conIidently make your own purchases? Do you need someone`s help while purchasing
this product?

Demographic Characteristics

Age
Gender
Income range (optional)
Occupation

121
Organization Interviews/ Questionnaire over Email

About the Indian Rural Market

Q1. From your past experience, what are the most important diIIerences you Iind in
marketing oI goods and services to the rural market versus the urban market?

Q2. Would traditional media modes that have worked till now in the urban and semi-urban
areas work in such places?

Q3. There exists a point oI view that most companies are merely playing` with the rural
markets and are seeking short term gains. What is your opinion?

Q4. In other words, then, companies are not investing enough to reach potential clients?

Q5. The rural market seems to be quite tricky. While consumers in small towns aspire to
emulate their counterparts Irom the urban areas, their purchase preIerences are still in
sync with the rural markets. In such a scenario, how can companies address their needs?

Q6. What are the major challenges that one Iaces in rural marketing?

Q7. How, aIter these many years in the industry, do you gauge the potential oI the market in
small towns and rural areas?

Q8. So, would it be right to say that rural marketing is the next big thing` Ior potential
marketers?

About HLL
Q9. Can you please tell me about your company`s present position in the marketplace?

Q10. Can you give an example how HLL has been successIul in the past?

Q11. How does HLL reach the rural poor?

Q12. What about selling its products?

Q13. Has HLL ever sold its products at Melas?

Q14. It has been said that HLL directors have toured rural India in tune with its strategy to
maximize its growth through aggressive marketing in rural markets. Is this true?

Q15. HLL has been Iacing stiII competition Irom low price competitors, especially in the rural
and semi-urban areas, where smaller regional players dominate. What do you have to say
about this?

About Lifebuoy

Q16. What exactly was the problem with LiIebuoy soap?

Q17. What are the company`s realizations about this situation?

Q18. What is it doing to help LiIebuoy gain market share?


122
About HLL`s Promotional Campaigns

Q19. Can you provide some Ieedback about Project Shakti?

Q20. What about I-Shakti?

Q21. What about Shakti-Vani?

Q22. Please provide any more inIormation on HLL`s rural marketing campaigns.





















123
Appendix 4

About Lifebuoy









Achievements.

LiIebuoy is India`s largest selling soap brand and has been so Ior a long time now.
The brand has a mammoth user base oI over 600 million consumers in India and is
one oI the most recognisable symbols oI health.
The advertising and communication Ior LiIebuoy has been recognised as one oI the
most eIIective at the advertising eIIectiveness awards EIIies-2003`.
The LiIebuoy jingle, synonymous with health and hygiene, has become a classic
indeed, it can be considered as part oI the Indian social Iabric.
The Brand Equity Survey, 2003 ranked this mega-brand as one oI the Most Trusted
Brands in India
Things you didn't know about
Lifebuoy

Lord Leverhume looked out oI the window Irom his home and saw the Iamiliar liIesaver
in Port Sunlight and the word LiIebuoy Ilashed through his mind and he named the soap
thus.
LiIebuoy is India`s Iirst bathing soap.
2000 LiIebuoy soaps are sold every minute.
The original LiIebuoy jingle was sung by Jagjeet Singh today, one oI India`s Ioremost
ghazal exponents.
LiIebuoy has been a trusted brand Ior over 100 years now.
One in ten people in the world use LiIebuoy

Source: www.suberbrands.com



124
Appendix 5




~Shakti means Strength Project Shakti is HLL`s initiative to usher prosperity
and uplift the standard of living in rural India














How much Strength does it take to smile.?

.in the face of an uncertain tomorrow?
.through eyes bleary with ceaseless toil?
.in the light of an existence, insecure and repressed?
.beneath a veil of suppressed dignity?
1rue Story

Usha Sarvatai, mother oI 2, had to travel 32 km everyday to work because
her husband`s income was not enough to meet their basic needs. The odd
timings and travelling costs Iorced her to quit the job. Her husband tried to
Iind a part time job but was unable to Iind one. But luckily, she got a call
Irom the Government dept. to attend a meeting, convened by Project
Shakti. Usha decided to become a Shakti Amma and start a new venture.
In a short time the good relationships she developed with the villagers
helped her do good business. Her enthusiasm motivated her husband who
started supporting her. She says, 'I am happy IulIilling my Iamily`s requirements and people give
me a lot oI respect today. And she now very eager to grow her business in the years to come.

'Profect Shakti is an initiative that is extremelv close to mv heart`

- M.S. Banga, Chairman, Hindustan Lever Ltd.

Source: www.hllshakti.com

125
Appendix 6








In order to impact both livelihood opportunities and
living standards of rural ommunities i-Shakti` - an
I1-based rural information service has been developed
by HLL to provide information and services to meet rural
needs in agriculture, education, vocational training,
health and hygiene.


i-Shakti kiosks offer information in the following areas:

Health & Hygiene
E-Governance
Education
Agriculture
Employment
Legal services
Veterinary services

i-Shakti's strength's lies in the unparalleled

reach it offers in reaching out to the rural
populace. 1he need for such services across
most of India's villages is beyond doubt and
the benefits immense







A snap-shot of the i-Shakti Website







Source: www.hllshakti.com