Mandar Final Report

Management thesis Ist

A Thesis on “A study on Rural Retailing and Consumer Behavior towards it with special Reference to ITC-Choupal Sagar in Washim Districrt”.

BY MANDAR .U.NAIK 0801210473 INC AKOLA ORGANIZATION:

ITC ABD Limited.

1

A REPORT ON

“A study on Rural Retaling and Consumer Behavior towards it with special Reference to ITC-Choupal Sagar in Washim Districrt”

BY MANDAR.U.NAIK 0801210473 INC AKOLA

Guided by

Ms. Smita Kulkarni {Faculty Guide}

2

A REPORT ON “A study on Rural Retaling and Consumer Behavior towards it with special Reference to ITC-Choupal Sagar in Washim Districrt” Submitted By MANDAR.U.NAIK 0801210473 INC AKOLA

Undertaken At ITC ABD Ltd. A report submitted in partial fulfillment Of the requirements of MBA Program Class of 2008-2010

TABLE OF CONTENTS 3

Certificate Declaration Acknowledgement Abbreviations Summary Chapter 1. Introduction

11

1.1

Objectives

12

1.2

Importance of the Study

13

1.3

Limitations

14

1.4

Research Methodology

15

Chapter 2. Industry Profile

16

2.1 Company Profile (ITC-Choupal Sagar)

17

2.2 Products of ITC- Choupal Sagar

19

Chapter 3. Conceptual –Overview

20

3.1Rural Retailing

21

3.2Rural Marketing

22

Chapter 4. Consumer Behavior

27

4.1Meaning of Consumer Behavior

28

4.2 Rural Consumer Profile

29

Chapter 5. Strategies

31

5.1Rural Retailing Strategies

32

5.2 Strategies of Choupal Sagar

33

Chapter 6. Literature Review

34

6.1 A Journey to the Interiors Prospects 4

For Rural Retailing in India

35

6.2 Case Studies on Hariyali Kissan Bazaar & Triveni Khushali Bazaar

38

Chapter 7. Analysis of Questionnaires

40

7.1 Data –Analysis & Interpretation

41

Chapter 8. Findings

59

8.1Findings & Recommendations

60

Conclusion

62

Annexure

63

References

65

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This is to certify that the Management Thesis-I titled “A A study on Rural Retailing and Consumer Behavior towards it with special Reference to ITC-Choupal Sagar in Washim District” District”submitted by MANDAR.U.NAIK University ID No: 0801210473 INC AKOLA in partial fulfillment of the requirement for the Degree of Mater of Business Administration (Marketing and Finance) 20082010.

DATE:

Campus Co-ordinator Mr.Rajendra Dongre INC AKOLA

(Certificate from Faculty Supervisor)

6

This is to certify that the Management Thesis-I titled “A A study on Rural Retailing and Consumer Behavior towards it with special Reference to ITC-Choupal Sagar in Washim District” District”submitted by MANDAR.U.NAIK University ID No: 0801210473 during Semester-III of the PG Program (Class of 2010) embodies original work done by him.

Signature of the Faculty Supervisor Name (in Capitals) :Ms. Smita Kulkarni Designation Center

7

: Faculty member : INC AKOLA

I hereby declare that this project work titled “A A study on Rural Retailing and Consumer Behavior towards it with special Reference to ITC-Choupal Sagar in Washim District” District” is my work, carried out under the guidance of my Faculty Guide Mrs. Smita Kulkarni. This report neither full nor in part has ever been submitted for award of any other degree of either this university or any other university.

DATE: PLACE: MANDAR.U.NAIK. 0801210473 INC AKOLA

I would like to thank to Mr. Rajendra D. Dongare Campus Coordinator of INC Akola for the moral support, encouragement and generous assistance. I express my heartfelt gratitude towards my Faculty Guide, Ms.Smita Kulkarni I wish to thank her for the constructive criticism, continuous encouragement and guidance provided by her time to time during the course of studies. This Management Thesis would not have been possible without her help. 8

A heartfelt thanks to the many respondents surveyed whose ideas, critical insights and suggestions have been invaluable in the preparation of this report. Last but by no means the least I would like to convey my special thanks to Mr.Prafulla Ghodchar Choupal Sagar Incharge of Washim for giving valuable guidance and encouragement to work on this Management Thesis.

MANDAR.U.NAIK

Abbreviations BSNL: Bharat Sanchar Company Ltd. BKC : Bhumiheen Kisan Card. DSCL: DCM Shriram Consolidated Ltd. FMCG: Fat Moving Consumer Goods. GCC: General Purpose Credit Card. HDFC: Housing Development Finance Company. HKB: Hariyali Kisaan Bazaars. 9

KCC : Kisan Credit Card. KYC: Know Your Customer. ITC: Indian Tobacco Company. MNCs: Multi National Company. NCAER: National Council for Applied Economic Research. SBI: State Bank of India. TKB: Triveni Khushali Bazaar.

Summary This research deals with the ITC (Indian Tobacco Company) for rural retailing and consumer behavior towards it. It is a new concept firstly adopted by ITC Company with the name as under Choupal Sagar which means small retail mall for the rural peoples. The 1st chapter deals on the objectives of the study. In that various objectives are studied during the research. In that importance of study& limitations is also studied. For collection of data what is sample size, sample area and sampling technique is studied. The 2nd chapter deals on the company profile and various products available in the ITC Choupal Sagar. The 3rd chapter deals on the meaning of the rural retailing. In that the definition and concept is studied. In that what is the meaning of rural marketing and there services is studied. 10

The 4th chapter deals on the meaning and definition of consumer behavior is studied. In that consumer profile is studied in through data available. The 5th chapter deals on the strategies adopted by the rural retailing to developing in that area. In that the research had studied what are strategies adopted by Choupal Sagar in rural retailing. The 6th chapter deals on the literature review on which the study is already carried out. In that study various different companies involve in rural retailing and the demographic features on rural retailing and its consumer. The 7th chapter deals on the analysis on the collected data. The interpretation and the each question are analyzed with the help diagrammatic presentation like charts and pie diagram. The 8th chapter deals on the findings of the study. In that quantitative and qualitative suggestions are drawn on study is carried out. On the study the conclusion is also done from every point of view in the study.

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CHAPTER 1 INTRODUCTION

1.1OBJECTIVES

•

To study the Rural Retailing.

•

To study the consumer behavior towards rural retailing.

•

To study the Rural Retailing in Choupal Sagar.

•

To study the different strategies adopted by Choupal Sagar.

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1.2 Importance of the Study

•

To find what is mean Choupal Sagar.

•

To known what Choupal Sagar plays a role on rural people.

•

To known whether it is useful for rural people or not.

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1.3LIMITATIONS

•

It is time consuming.

•

It is very hard to ask for the Choupal Sagar to the people.

•

It is far away from the local place so it is hard to collect data.

•

Some people are not aware about Choupal Sagar facilities.

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1.4 Methodology

Method is the way of doing something. Methodology means studying something from the particular subject. Sample Size: 100. Sample Area: Washim. Sample Method: Random Sampling.

PRIMARY DATA:

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It is collected from the 100 respondents through questionnaire method new in Washim. SECONDARY DATA: It is collected from the following method Internet Journals Articles Books.

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Chapter:-2 Industry profile

2.1ITC Choupal Sagar

ITC has continued to build new infrastructure by supplementing the farmgate presence of Choupal with new physical infrastructure rural retailing hubs called Choupal Sagars, positioned within tractor able distance of 30 Choupal-sagar centers and their user communities. The Choupal Sagar hub and spoke combination is first-time grassroots click and mortar infrastructure transporting rural local economies to a new level of productivity and consumption. The ITC Company wants to say that is “LET INDIA PUT FIRST”.Choupal-Sagar offer a combination of Made-to-design agri-business hubs, they function as: 1. ITC is a agri-sourcing centers providing farmers a transparent best price sales window, 2. Shopping centers bringing a range of products comparable to urban levels of choice, and 3. Facilitation centers delivering a host of farm-related services – training, soil testing, product quality certification, medical and clinical services, and cafeteria and fuel station. 17

24 Choupal Sagar hubs are already in operation in 3 states, to grow to 100 by 2010. (MAH,M.P.,RAJ) 4. It works on mainly 4R’s •

Right Time,

•

Right Place,

•

Right Price &

•

Right Quantity

The pioneering effort towards the establishment of rural malls came from the tobacco major, ITC Ltd.As a logical extension of its highly lauded e- Chaupal project, the company launched rural malls under the banner “Choupal Saagar” came up at a cost of Rs.4 cr on an eight acre plot in Rafiqganj, about 4 k.m. from Sehore in Madhya Pradesh.The idea was that farmer could drive in with his family on his tractor laden with harvest, get it weighed on a digital weighing machine & offload the same at a huge go down at the back of the mall for a fair price. In meantime, the lady of the house could look around the mall & pick items from the racks bursting with packaged foods, spices, cereals, clothes ( trousers at Rs.166 a pair) , shoes sewing machines , watches, grinders, TVs , DVD players, pressure cookers, room heaters. The children would have swings & videogames to engage themselves, while their mothers went about their shopping. These apart, the houses a soil testing laboratory, doctor, pharmacy, pathology lab ( in Madhya Pradesh & Uttar Pradesh, the choupal saagars have tied up with the Apollo Group & with Care Foundation to extend medical services to the customers), a diesel pump , a training center for farmers & a cafeteria. Moreover, there is enough space to

display new models of tractors, threshers,

motorbikes etc.ITC welcomed companies like Marico, Eicher,TVS, LG Philps, Usha, Prestige, Hawkins & Everday, among others to display their products in the mall, apart from its own. The company plans to synergize its rural distribution network through one choupal saagar for every 40 e- Choupals. The ultimate objective is to set up around 1,000 such rural malls in India.

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2.2PRODUCTS OF ITC CHOUPAL SAGAR

ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports. It is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel and Greeting Cards. ITC is one of the India’s foremost private sector companies with a market capitalization of nearly US $ 18 billion and a turnover of over US $ 4.75 billion. It is a diversified presence in:  Cigarettes  Daily needs  Paperboards & Specialty Papers  Footwear’s  Agricultural products  Packaged Foods & Confectionery  Dress material  Branded Apparel  Personal Care 19

Greeting Cards Safety Matches FMCG products Choupal Sagar is the culmination of all farming activities in one place.  Seven thousand sq ft stacked with brand names a place where  Sonata watches and Usha,  Prestige and Hawkins home appliances jostle for space with  Italio, Cosmo, Springwood and John Players shirts, jeans, and Philips and LG products.  You can buy fertilizers and pesticides or motor pumps.    

Chapter: 3 20

Conceptual Overview

3.1Rural Retailing

Retailing can be defined “as the set of activities that markets products or services to final consumers for their own personal or house hold use.” This is done by organizing the availability of goods and then supplying them to consumer on a relatively small scale. The mix of variables including price, location, communications, wholesaler, physical attributes, services and personnel form the retail mix and these components form the over all strategic marketing components of retailing. Retailing is for the rural markets are virgin markets. It is the pillars of Indian economy. It is having high transportation, traveling cost low maintenance cost. Accuracy is maintained through intermediaries. It is handled by local kirana stores. Retailing the first phase of the distribution channel and available for the distribution that grows in rural of Indian markets. Hence, it will undergo in greater organization and maturity level in rural markets. New ideas in retail models are the way for getting good satisfaction level from the customer. Distribution of Mall Spaces 21

across zones: Northzone-39%, Westzone-33%, Southzone-18% and Eastzone-10%. Haats are usually weekly that serve groups of10 to 50 villages and sell day -to- day necessities. Melas are larger in size and provide more variety in terms of goods, such as T.V. sets etc.

3.2Rural Marketing

RURAL MARKET:To successfully exploit the potential offered by rural market, there is a need to first understand the rural market , not only in terms of households and population , but also their occupational pattern, income generation , marketing arrangements for agricultural produce , the process of rural and cottage industrialization , communication facilities, rural buyer behavior , attitudes and beliefs of rural people and their aspirations.

POPULATION:-

Rural

Villages

627000 22

Population

698 million

Population Strata

Number of Towns

% of Population

> 10,000

1,831

0.3

5 - 10,000

7,145

1.3

2 - 5,000

46,754

8.4

1 - 2,000

94,658

19.6

500 - 1,000

136,232

24.7

< 500

340,380

48.7

RURAL INDIA:-

RURAL AREAS REQUIREMENTS:-The requirements of rural areas can be classified under the following heads:Rural Households Consumption Goods • More and better food • More and better clothing • Medicines • Toiletries and cosmetics • Educational supplies • Wines and spirits • Beverages • Cigarettes, beedies, etc. Household Durable Goods • Furniture • Cooking utensils • Electrical appliances • Radio and television • Clock and Wrist Watches • Sewing machines Construction Materials • For residences • For infrastructure facilities • For rural cottage industries Consumable Agricultural Inputs • Manures and fertilizers 23

• Seeds • Tools and implements • Petrol , diesel , oil and lubricants • Electricity Capital Agriculture Inputs • Tractors and implements • Trailers • Pumps sets • Pipes and fittings for irrigation and drainage Transportation Equipments • Bullock carts • Bicycles , motor cycles and mopeds • Jeep/car • Light commercial vehicles Services • Banking • Health • Education • Transport and communication • Electricity CURRENT RURAL MARKET Rural India represents the heart of India. Approximately 80% of India lives in over half a million villages (627,000), generating more than half of the national income. Today, rural markets are critical for every marketer - be it for a branded shampoo or an automobile. Trends indicate that the rural markets are coming up in a big way and growing twice as fast as the urban, witnessing a rise in sales of hitherto typical urban kitchen gadgets such as refrigerators, mixer-grinders and pressure cookers. According to a National Council for Applied Economic Research (NCAER) study, there are as many 'middle income and above' households in the rural areas as there are in the urban areas. There are almost twice as many 'lower middle income' households in rural areas as in the urban areas. At the highest income level there are 2.3 million urban households as against 1.6 million households in rural areas. According to Mr. D. Shivakumar, Business Head (Hair), Personal Products Division, Hindustan Lever Limited, the money available to spend on FMCG (Fast Moving Consumer Goods) products by urban India is Rs. 49,500 crores as against is Rs. 63,500 crores in rural India. As per NCAER projections, the number of middle and high income households in rural India is expected to grow from 80 million 24

to 111 million by 2007. In urban India, the same is expected to grow from 46 million to 59 million. Thus, the absolute size of rural India is expected to be double that of urban India. The study on ownership of goods indicates the same trend. It segments durables under three groups – (1)Necessary products - Transistors, wristwatch and bicycle,

(2) Emerging products - B&W TV and cassette recorder, (3) Lifestyle products - CTV and refrigerators. Marketers have to depend on rural India for the first two categories for growth and size. Even in lifestyle products, rural India will be significant over next five years. MART, the specialist rural marketing and rural development consultancy has found that 53 per cent of FMCG sales lie in the rural areas, as do 59 per cent of consumer durable sales, said its head Pradeep Kashyap. According to a study by Chennai-based Francis Kanoi Marketing Planning Services Pvt Ltd, the rural market for FMCG is Rs 65,000 crore, for durables Rs 5,000 crore, for tractors and agriinputs Rs 45,000 crore and two- and four-wheelers, Rs 8,000 crore. In total, a whopping Rs 1, 23,000 crore. This could be doubled if corporate understood the rural buying behavior and got their distribution and pricing right. Now for some facts and figures. The Indian rural market today accounts for only about Rs 8 billion (53 per cent - FMCG sector, 59 per cent durables sale, 100 per cent agricultural products) of the total ad pie of Rs 120 billion, thus claiming 6.6 per cent of the total share. So clearly there seems to be a long way ahead. Time and again marketing practitioners have waxed eloquent about the potential of the rural market. But when one zeroes in on the companies that focus on the rural market, a mere handful names come to mind. Hindustan Unilever Limited (HUL) is top of the mind with their successful rural marketing projects like 'Project Shakti' and 'Operation Bharat'. The lynchpin of HUL's strategy has been to focus on penetrating the market down the line and focusing on price point. Furthermore, activating the brand in the rural market through activities, which are in line with the brand itself, is what sums up HUL's agenda as far as the rural market is concerned informs MindShare Fulcrum general manager R Gowthaman. Amul is another case in point of aggressive rural marketing. Some of the other corporate that are slowly making headway in this area are Coca Cola India, Colgate, Eveready Batteries, LG Electronics, Philips, BSNL, Life Insurance Corporation, Cavin Kare, Britannia and Hero Honda to name a few. CHALLENGES IN RURAL MARKETING 25

Challenges in Rural marketing that are:•

Availability

The first challenge is to ensure availability of the product or service. India's 627,000 villages are spread over 3.2 million sq km; 700 million Indians may live in rural areas, finding them is not easy. However, given the poor state of roads, it is an even greater challenge to regularly reach products to the far-flung villages. Any serious marketer must strive to reach at least 13,113 villages with a population of more than 5,000. Marketers must trade off the distribution cost with incremental market penetration. To service remote village, stockists use auto rickshaws, bullockcarts and even boats in the backwaters of Kerala. •

Affordability

The second challenge is to ensure affordability of the product or service. With low disposable incomes, products need to be affordable to the rural consumer, most of who are on daily wages. Some companies have addressed the affordability problem by introducing small unit packs. Godrej recently introduced three brands of Cinthol, Fair Glow and Godrej in 50-gm packs, priced at Rs 4-5 meant specifically for Madhya Pradesh, Bihar and Uttar Pradesh — the so-called `Bimaru' States. Hindustan Lever, among the first MNCs to realize the potential of India's rural market, has launched a variant of its largest selling soap brand, Lifebuoy at Rs 2 for 50 gm. The move is mainly targeted at the rural market. Coca-Cola has addressed the affordability issue by introducing the returnable 200-ml glass bottle priced at Rs 5. The initiative has paid off: Eighty per cent of new drinkers now come from the rural markets. •

Acceptability

The third challenge is to gain acceptability for the product or service. Therefore, there is a need to offer products that suit the rural market. One company which has reaped rich dividends by doing so is LG Electronics. In 1998, it developed a customized TV for the rural market and christened it Sampoorna. It was a runway hit selling 100,000 sets in the very first year. Because of the lack of electricity and refrigerators in the rural areas, Coca-Cola provides low-cost ice boxes — a tin box for new outlets and thermocol box for seasonal outlets. The insurance companies that have tailor-made products for the rural market have performed well. HDFC Standard LIFE topped private insurers by selling policies worth Rs 3.5 crore in total 26

premium. The company tied up with non-governmental organizations and offered reasonablypriced policies in the nature of group insurance covers. •

Awareness

With large parts of rural India inaccessible to conventional advertising media — only 41 per cent rural households have access to TV — building awareness is another challenge. Fortunately, however, the rural consumer has the same likes as the urban consumer — movies and music — and for both the urban and rural consumer, the family is the key unit of identity. However, the rural consumer expressions differ from his urban counterpart. Outing for the former is confined to local fairs and festivals and TV viewing is confined to the state-owned Doordarshan. Consumption of branded products is treated as a special treat or indulgence.

Chapter:-4 Consumer Behavior

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4.1 Meaning of Consumer Behavior

“We can believe that we know where the world should go. But unless we’re in touch with our customers, our model of the world can diverge from reality. There’s no substitute for innovation, but innovation is no substitute for being in touch, either”. -Steve Ballmer, CEO, Microsoft Corporation In this era of competition, understanding the consumer is necessity for marketers. Consumer needs & preferences are continuously changing, given the changes in factors like demographic& lifestyles. These changes can become great business opportunities for alert marketers & threats for marketers who fail to adapt. Consumers acquire, consume & dispose off the products & services created by organizations. They go through several cognitive & behavioral processes while making their purchase & consumption decisions. The knowledge of how they decide on one brand instead of another and what factors influence their decision-making is crucial for marketers not only to cater to the existing needs of their consumers but also to prepare for their future needs. This knowledge is also essential to make various business decisions related to product development, packaging, pricing, distribution promotions communications, etc. Consumer Behavior helps to understand the internal variables like motivation, perception, learning & attitude & external variables like reference groups, family, social class & culture their influence on consumer decision-making process. It also discusses the consumers’ acceptance of innovation & their purchase & post-purchase behavior & the need for its regulation. Consumer Behavior can 28

be defined as a, “the acquisition, consumption & disposition of products, services, time & ideas by decision - making units.” units.” In other words, it is the body of knowledge which studies various aspects of purchase & consumption of products & services by individuals with various social & psychological variables at play. The Need to Study Consumer Behavior: The field of consumer behavior is interdisciplinary, i.e. it uses concepts from a large variety of fields like anthropology, sociology, and marketing, psychology etc.The belief that consumer behavior could be predicated and consumers influenced gave an added impetus to study of consumer behavior. There are thus, four underlying principles on which the field of consumer behavior is based: •

Sovereignty of the consumers.

•

Consumer research facilities an in-depth understanding of the consumers.

•

It is possible to influence consumers.

•

It is socially acceptable to influence consumers.

4.2Rural Consumer Profile OCCUPATION PATTERN:-

Occupation

Proportion of Rural Population (%)

• • • • • • •

Agriculture Agricultural Labor Business Non Agricultural labor Salary Earners Not gainfully Employed Total

50 27 10 09 02 02 100

INCOME GENERATION:-

Sources of Income • • • •

Proportion to Total

Agriculture Agriculture Wages Business and Craft Non Agricultural Wages

59 16 09 07 29

• • • •

Salaries Current Transfers Others Total

03 02 04 100

EXPENDITURE PATTERN:The National Sample Survey Organization conducts consumer expenditure surveys in the country. Table presented the weighted average of all expenditure classes for rural and urban. The total expenditure on food items is of the order of Rs.9, 07,505 million in rural areas as opposed to Rs.4, 26,887 million Value of Consumption per Person per month (In Rs.) Items

Rural

1. Cereals 2. Gram 3. Cereal Substitute 4. Pulses 5. Milk and milk products 6. Edible oils 7. Meat , eggs and fish 8. Clothing 9. Durable goods 10. Total Non –food items 11. Total Consumer Expenditure

Urban

55.38 10.40 10.24 18.31 28.35 19.10 16.84 24.15 8.33 137.68 378.46

52.34 10.59 10.22 20.04 39.53 24.60 22.42 38.86 30.38 264.54 596.00

LITERACY LEVEL: Literacy Levels in Percentage

1991 Rural

2001 Urban

Rural

Urban

Males

41

66

58

81

Females

18

48

31

64

All

30

57

45

73

30

To develop a communication program for the rural audience, you have to take cognizance of the following characteristics of the rural consumer: •

The rural consumer is very conscious about getting value for money.

•

He understands symbols and colors better, and looks for endorsement by local leaders or icons.

•

He doesn't like to pay extra for frills he cannot use.

•

He has his daily routine, and there is no sense of urgency in his lifestyle.

•

He has a very high involvement in any product purchased, especially when he decides to buy high-end products, which cost a few hundreds or thousands of rupees.

Divisions based on caste, community and other hierarchical factors continue to exist in rural areas. Perceptions, traditions and values vary from State to State and, in some cases, from region to region within a State.

Chapter: 5 Strategies 31

5.1Rural Retailing Strategies

• • • • • •

Discounted price: It is given the discount means it is given at reasonable prices. Functional in nature: It is diversified in various functions like minimum prices, good quality etc. Designed to encourage impulse purchase – By farmers – By influencers: It is influenced by various peoples like references, peoples etc. Blocks competitor’s entry: There are various competitors’ in market Keeps everything a farmer may need. : In that mall all things are available which are used by farmers Additional support services: It provides good quality of product to increase their value.

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5.2 Strategies of Choupal Sagar

ITC has diversified status originates from its corporate strategy aimed at creating multiple drivers of growth anchored on its time-tested core competencies: •

Unmatched distribution reach,: It reaches to its customers by various distribution channels

•

Superior brand-building capabilities: It provides good quality of brands of products.

•

Effective supply chain management: The supply chain of Choupal Sagar is very good & updates it inventory daily.

•

Acknowledged service skills: The skills in that adopted are very attractive.

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Chapter: 6 Literature Review

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6.1 A Journey to the Interiors Prospects For Rural Retailing in India

INDIA is on the threshold of retail revolution in the rural areas. According to McKinsey and Co.a global consulting firm India’s rural market will touch $ bn by2020.Nearly 70%Indians, who constitute 12%of the world’s consumers reside in 5, 70,000 plus villages. Merger and erratic levels of income and lack of infrastructure have so far kept away many marketers from this domain. However, a slew of measures to augment the income of the rural mass as well as to improve substantially the rural infrastructure together with stagnation in urban markets, have shifted the spotlight to the rural markets. Rise in the purchasing power and overall literacy exposure to urban influence & electronic media have tremendous influence on the rural psyche. The rural people are now willing to spend on branded products_ whether regional, national or international – thereby throwing up tremendous opportunities for corporate sector, to push their retail trade. Responding to this emerging trend, the first rural mall under the banner “Choupal Sagar”was established by the tobacco major,ITC.This was followed by Tata’s(Tata Kisan Sansar), Mahindra & Mahindra(Mahindra Sulbhlabh & Mahindra Krishi Vihar) &DCM Shriram Consolidated Ltd. (Hariyali Kisan Bazars), to name few. The soaring the popularity of these retail formats can be attributed to a plethora of reasons. The retail formats have attracted commitments and investments from companies which were not originally associated with consumer goods. It does not therefore come as a surprise that according to a Technopak study, $12bn is likely to be invested in India in organized retail over the next 5 years. Side by side, the local kirana stores with their intimate the knowledge of the customer and extension of credit have kept the fire burning in many villages homes. The weekly or monthly 35

haats and occasional melas continue to deliver the simple luxuries and provide entertainment to its visitors. Again these are being increasingly leveraged by companies to popularize their brands. The population in India is unevenly distributed between cities &villages(table:1).In the urban areas high population density, good transportation connectivity and enlightened consumers among other factors have traditionally attracted marketers who remained satisfied catering to this vast consumer class which yielded large margins with relatively less marketing effort. In contrast rural India is the home for more than 70%of the country’s location but is besieged with marketing bottlenecks in one form or another. This region is, therefore, generally ignored or at best sidelined by many marketers. When India opened its market to the world, pot-liberalization in 1991, MNCs lined up their goodies for urban consumers. While manufactures of high- end product targeted the ‘global Indians’, the ‘aspiring Indians’ were the key demand drivers for companies catering to the popular segment. Not to be left behind, the Indian companies too went full throttle to retain their market share across various categories of products & services. All India Population distribution

Distribution

Population

Percentage

Rural

741,660,293

72.22

Urban

285,354,954

27.78

Total

1,027,015,247

100.00

Source: National Council for Applied Economic Research (NCEAER)2002

Consequently the urban consumers in India were bombarded with a vide variety of choices of every needs of theirs, big or small. As the battle between competing products & brands intensified, the urban market began to reach its saturation level. Companies – both national & international- were forced to seek greener pastures. The untapped rural market , comprising about 12% of the world’s consumers & being twice as large as the entire population of the US & Russia, provided tremendous opportunities for these companies.

Current Retailing Landscape in Rural India Since long, the local kirana strores satisfied the frugal needs of rural customers. The kirana stores (covering approximately 50 sq. ft. in area) are small family- owned businesses where all 36

household members chip in to run the shop. Their intimate knowledge of the customers helped them to sell on credit, & endeared them further to cash – strapped village folks. The haats & melas added a little color to the serene pace of rural life. However, shopping for occasions or providing for the occasional luxury invariably necessitated a trip to the nearby town. The competitors for this are: Hindustan Unilever- Project Shakti. Tata- Tata Kisan Sansar. Mahindra & Mahindra- Mahindra Shubhlabh & Mahindra Krishi Vihar. Godrej- Aadhar & Manthan. DCM- Hariyali Kisan Bazaars. Triveni Engineering- Triveni Khushali Bazaars. Availability of Credit & Credit Cards to Rural Customers: The government of India has introduced several measures to in crease the availability of the rural areas thereby, adding fillip to their purchasing power. In this Know Your Customer (KYC), No-frills Account, General Purpose Credit Card (GCC), Kisan Shatabdi Card, Bhumiheen Kisan Card & Kisan Credit Card (KCC) is noteworthy. The State Bank of India is launching Smart Card in West Bengal in an attempt to reach out to the rural population. Under this project, every user will be given a bio-metric smart card. The amount of money lent to the customers will be twice the amount of savings. Electronic payment enabler companies like Oxygen, Obopay,Atom, India pay, Easy Bill & Suvidha are planning to tie-up with kirana stores to facilitate cashless payments (electronic wallet) for transactions like recharging of prepaid bills , electricity & water bills, DTH recharges, travel services & other utility /insurance bill payments through mobile phones. They are wating for the RBI guidelines to start operations from Mumbai or Chennai & spread to Tier II cities. Eventually, they would extend their operations to rural areas too.

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6.2 Case Studies on Hariyali Kissan Bazaar & Triveni Khushali Bazaar

Hariyali Kisaan Bazaar "Hariyali Kisaan Bazaar" - a rural business centre, is a pioneering micro level effort, which is creating a far-reaching positive impact in bringing a qualitative change and revolutionizing the farming sector in India. It is also an example of how well meaning corporate can contribute to development of agriculture by building sustainable business models. DCM Shriram Consolidated Ltd. (DSCL), capitalizing its over 35 years of experience in the agriinput markets & first hand knowledge of Indian farmers, is setting up a chain of centers aimed at providing end-to-end ground level support to the Indian farmer & thereby improving his "profitability" & "productivity". The key constraints of the Indian farming sector, being addressed by "Hariyali" are: • • • • •

Lack of last mile delivery mechanism of modern agriculture know-how & practices. Lack of availability of critical good quality agri-inputs. "Middlemen" driven farmer interface. High cost credit. Lack of direct access to buyers of varied & high value crops.

Hariyali Kisaan Bazaar The "Hariyali Kisaan Bazaar" chain, seeks to empower the farmer by setting up centers, which provide all encompassing solutions to the farmers under one roof. Each "Hariyali Kisaan Bazaar" centre operates in a catchment of about 20 kms. A typical centre caters to agricultural land of about 50000-70000 acres and impacts the life of approx. 15000 farmers. Each centre is engaged in: 38

• •

• • •

Bridging the last mile: Provides handholding to improve the quality of agriculture in the area. Provides 24x7 supports through a team of qualified agronomists based at the centre. Quality Agri-Inputs: Provides a complete range of good quality, multi-brand agri inputs like fertilizers, seeds, pesticides, farm implements & tools, veterinary products, animal feed, irrigation items and other key inputs like diesel, petrol at fair prices. Financial Services: Provides access to modern retail banking & farm credit through simplified and transparent processes as also other financial services like insurance etc. Farm Output Services: Farm produce buyback opportunities, access to new markets & output related services. Other Products and Services: Fuels, FMCG, Consumer Goods and Durables, Apparels etc. These centers provide the much needed respect/dignity and freedom to the Indian farmer. In the near future, Hariyali Kisaan Bazaars plan to move beyond agri to meet the other needs of farmers as customers.

Technology as an important enabler IT has been a critical backbone to the chain of centers. It is being used to provide online support on latest technical advancements, weather forecasts, mandi (market) prices, fair & transparent billing to farmers as well as in maintaining extensive farmer databases with micro information about the farmers' field to provide customized service to the farmers. Farmer So far over 302 Hariyali outlets have been set up across eight states- Haryana, Punjab, Uttar Pradesh, Rajasthan, Chhattisgarh, Madhya Pradesh, Maharashtra and Andhra Pradesh. The ground-level agri-support is already yielding results in the farmer's fields. Whether it is adoption rate of high yielding seeds, right doses of fertilization, productivity of cattle-feed, moisture conservation measures, adoption of new crops/allied occupations or adoption of new technologies like zero tillage, the farmers in catchment of Hariyali centers are already way ahead of the national averages. Future Hariyali Kisaan Bazaar has plans to rapidly scale up the operations & create .A national footprint covering all the major agricultural markets of the country. This would mean catering to cultivable land of over 30 million acres and touching the lives of over 10 million farmers.

Triveni Khushali Bazaar Triveni Khushali Bazaar (TKB), a rural super store chain of Triveni Engineers and Industries Ltd, plans to nearly double the number of its outlets by March 2008 to 80, as organized retail takes off in the country’s rural pockets. By 2009, it plans to have a total of 200 stores. The chain currently has 45 outlets that sell agricultural implements, diesel, fertilizers, and consumer goods to the farming and rural community.TKB has the majority of its stores around 35 of then in Uttar Pradesh. During the visit to one of their outlets in Hathras, western UP a flavor of their model was obtained. The store is present just on the outskirts of the town of Hathras and the main visible category is Grocery. They also sell Agri-inputs, cycles, tyres etc.

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Customers This concept should have been very successful, since the town (rural) customers do not have too much variety and options in the local market. A survey on the income group showed a good portion of local businessman and government employees with household incomes in the range of 10k to 30k per month. But still the store has not done well and the daily average sales are only in the ranges of 15,000, which is very dismal in comparison with local town retailers. Communications The main reason for this could be the very poor Marketing Communication practices followed by TKB. An example of an inefficient visual merchandising is shown here. These are how the promotional offers displayed in store. The store also has very poor visibility within the local town. A new establishment should advertise aggressively in order to pull new customers to visit its store.

Chapter: 7 Analysis of Questionnaires

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7.1 Data-Analysis & Interpretation How many members are there in your family?

Members

No. of Respondents

%

02

21

21%

03

24

24%

04

31

31%

05

24

24%

Total

100

100%

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From here we can analysis that in the family members: 2 members are 21%, 3 members are 24% 4 members31% and 05members are 24%.

From where do you purchase your grocery?

Purchase of Grocery No. of Respondents

%

Nearby Shop

24

24%

Anywhere

23

23%

Fixed Grocery Shop

30

30%

ITC Choupal Sagar

23

23%

Total

100

100%

Grocery

42

From here we can analysis that:24% people purchase their grocery from the nearby grocery shop,23% people purchase their grocery from anywhere, 30% people purchase their grocery from the fixed grocery shop & 23% people purchase their grocery from the ITC Choupal Sagar.It means people are more interested towards their fixed grocery shop.

What is the frequency to purchase your grocery? Frequency of purchasing grocery No. of Respondents

%

Daily

7

7%

Weekly

13

13%

Fortnightly

35

35%

Monthly

45

45%

Total

100

100%

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From here we can analysis that:7%people purchase grocery daily.13% people purchase grocery weekly,35% people purchase grocery fortnightly & 45% people purchase grocery monthly.

Are you using any the Electronic items?

Electronic Items

No. of Respondents

%

Yes

92

92%

No

08

08%

Total

100

100%

44

From above analysis we can say that: 92% people use electronic items& 8% are not using electronic items.

Which electronic item do you use?

Use of electronic Item No. of Respondents

%

T.V.

46

46%

Washing Machine

13

13%

Fridge

23

23% 45

Mixer

18

18%

Total

100

100%

From above analysis we can say that: 46% are using the T.V., 13%are using washing machine, 23% are using fridge &18% are using the mixer.

Are you using any agricultural product? Use of Agricultural Product No. of Respondents

%

Yes

35

35%

No

65

65%

Total

100

100% 46

From above analysis we can say that: 65% are not using the agricultural product &35 % are using it.

What you prefer most while purchasing grocery/electronic item/agri products? Use of electronic Item No. of Respondents

%

Product Quality

44

44%

Price

29

29%

Service

16

16% 47

Convince

11

11%

Total

100

100%

From above analysis we can say that:44% people see the product quality while purchasing the grocery/electronic item/agri products,29% price,16%service & only 11% see for the convince for them.

If all these services if you will get under one roof do you will purchase from there?

Under one roof

No. of Respondents

%

Yes

85

85%

No

15

15%

Total

100

100% 48

From above analysis we can say that: 85% are people are willing to buy less than one roof &15% are not interested at all.

Are you aware of Choupal Sagar in Washim city?

Awareness

No. of Respondents

%

Yes

78

78%

No

22

22% 49

Total

100

100%

From above analysis we can say that: 78%are aware of Choupal sagar in washim &22% are not aware about it.

How many times do you visit Choupal Sagar?

Visited number of times No. of Respondents

%

Once

33%

33 50

Twice

21

21%

Weekly

08

08%

Not at all

38

38%

Total

100

100%

From above analysis we can say that: 33% people visited there only once, 21% people visited twice, 8% weekly &38% people not visited at all.

With whom do you visited Choupal Sagar? Visited with whom

No. of Respondents

%

Individual

32

32%

Friends

15

15% 51

Family

37

37%

Relative

16

16%

Total

100

100%

From above analysis we can say that: 32% visited there individually, 15% with their friends, 37% with their family &16% with their relatives.

What would you like most to purchase from there? Purchase from there

No. of Respondents

%

Grocery

49

49%

Daily needs

22

22% 52

Electronic Items

15

15%

Agricultural Product 14

14%

Total

100%

100

From above analysis we can say that: 49% people are interested in purchasing grocery, 22% are interested in purchasing the daily needs, 15 5 are interested in purchasing the electronic items &14% are interested in purchasing agricultural products.

Whether Choupal Sagar satisfied your need or not? Satisfaction level

No. of Respondents

%

Yes

50

50%

No

06

06%

To some Extent

18

18%

Nothing to say

26

26% 53

Total

100

100%

From above analysis we can say that: 50% people say that they satisfied with their service, 6% are not satisfied, 18% to some extent they are satisfied &26% cannot say for it.

Whether it convenient from your home to travel there? Travel

No. of Respondents

%

Yes

45

45%

No

55

55%

Total

100

100%

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From above analysis we can say that: 45% say that it is convient for them to travel there & 55% are saying that it is situated very long from the city.

Whether it is costly or cheaper than any other retailer? Costly or cheaper

No. of Respondents

%

Yes

42

42%

No

10

10%

To some Extent

15

15%

Nothing to say

33

33%

55

Total

100

100%

From above analysis we can say that: 42% people say that it is very cheaper than others, 10% say that more costly than any other, 15% say that it is almost same to some extent & 33% cannot judge it properly.

What is your opinion regarding there service and product quality? Opinion on Service & Product Quality No. of Respondents

%

Very Good

25

25%

Good Quality

33

33%

Service

10

10%

Helpful Nature

32

32%

Total

100

100% 56

From above analysis we can say that: 25 % gave their opinion it is very good, 33% simple say it is good, 10%say it is bad &32% people say it is very bad.

Whether Choupal Sagar is successful in Washim city? Satisfaction level

No. of Respondents

%

Yes

48

48%

No

04

04%

To some Extent

14

14%

Nothing to say

34

34%

Total

100

100%

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From above analysis we can say that: 48% people say that it is successful in washim, 4%people say it is not, 14% to some extent & 34% say that they cannot say for this statement.

Give the rating to Choupal Sagar on the basis of the following :( Between 01 to 05) Sr No.

LOW PRICE

GOOD SERVICE HELPFUL CONVIENCE QUALITY NATURE

1 2 3 4 5

55 14 11 11 07

12 31 25 24 08

08 26 25 25 16

08 16 23 23 30

58

17 12 18 15 38

From above analysis we can say that: 55% rank to low price first, 14% rank second, 11% rank third, 11% rank fourth & 7% rank five.12% rank to good quality first,31% rank as second,25% as third,24% rank as a fourth & 8% as a fifth.8% rank as first service 26% as a second,25% as a third, 25% as a fourth & 16% as a fifth.8% rank to helpful nature as a first, 16% as a second, 23% as a third, 23% as a fourth,30% as a fifth.17% as a first to convince,12% as a second,18% as a third,15% as a fourth & 38% as a fifth.

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Chapter: 8 Findings

8.1Findings & Recommendations Quantitative

•

02 members are 21%, 03 members are 24% 04 members31% and 05members are 24%.

•

24% people purchase their grocery from the nearby grocery shop,23% people purchase their grocery from anywhere, 30% people purchase their grocery from the fixed grocery 60

shop & 23% people purchase their grocery from the ITC Choupal Sagar.It means people are more interested towards their fixed grocery shop. •

7%people purchase grocery daily.13% people purchase grocery weekly, 35% people purchase grocery fortnightly & 45% people purchase grocery monthly.

•

92% people use electronic items& 8% are not using electronic items.

•

46% are using the T.V., 13%are using washing machine, 23% are using fridge &18% are using the mixer.

•

65% are not using the agricultural product &35 % are using it.

•

44% people see the product quality while purchasing the grocery/electronic item/agri products,29% price,16%service & only 11% see for the convince for them.

•

85% are people are willing to buy less than one roof &15% are not interested at all.

•

78%are aware of Choupal sagar in washim &22% are not aware about it.

•

33% people visited there only once, 21% people visited twice, 8% weekly &38% people not visited at all.

•

32% visited there individually, 15% with their friends, 37% with their family &16% with their relatives.

•

49% people are interested in purchasing grocery, 22% are interested in purchasing the daily needs, 15 % are interested in purchasing the electronic items &14% are interested in purchasing agricultural products.

•

50% people say that they satisfied with their service, 6% are not satisfied, 18% to some extent they are satisfied &26% cannot say for it.

•

45% say that it is convince for them to travel there & 55% are say that it is situated very long from the city.

•

42% people say that it is very cheaper than others, 10% say that more costly than any other, 15% say that it is almost same to some extent & 33% cannot judge it properly.

•

25 % gave their opinion it is very good, 33% simple say it is good, 10%say it is bad &32% people say it is very bad.

•

48% people say that it is successful in Washim, 4%people say it is not, 14% to some extent & 34% say that they cannot say for this statement.

•

12% people given rate to the low price, 25% for good quality, 13% for service, 15% for helpful nature & 35% for convince to reach there. 61

•

From above analysis we can say that: 55% rank to low price first, 14% rank second, 11% rank third, 11% rank fourth & 7% rank five.12% rank to good quality first,31% rank as second,25% as third,24% rank as a fourth & 8% as a fifth.8% rank as first service 26% as a second,25% as a third, 25% as a fourth & 16% as a fifth.8% rank to helpful nature as a first, 16% as a second, 23% as a third, 23% as a fourth,30% as a fifth.17% as a first to convince,12% as a second,18% as a third,15% as a fourth & 38% as a fifth.

Qualitative •

Some people are less aware about the Choupal sagar.

•

Some people say they are having high price than others grocery shop.

•

Some people say that it is good concept for the farmer to satisfy their need in the mall.

•

Some people say it is far away from the city.

•

Some people say it is having helping nature & people who work there they guide us to the people what are good things& what is beneficial for them.

Conclusion From the research the researcher concludes that: Retailing can be defined “as the set of activities that markets products or services to final consumers for their own personal or house hold use.” This is done by organizing the availability of goods and then supplying them to consumer on a relatively small scale. The mix of variables including price, location, communications, wholesaler, physical attributes, services and personnel form the retail mix and these components form the over all strategic marketing components of retailing. In rural retailing there are 6 players: Hindustan Unilever- Project Shakti. 62

Tata- Tata Kisan Sansar. Mahindra & Mahindra- Mahindra Shubhlabh & Mahindra Krishi Vihar. Godrej- Aadhar & Manthan. DCM- Hariyali Kisan Bazaars. Triveni Engineering- Triveni Khushali Bazaars. Some people are aware about retailing concept but not for the rural retailing. There are some strategies adopted by the ITC choupal sagar to satisfy the customer needs. They are unmatched distribution channels, good quality of products available there, effective supply chain management &servcing skills. Some people visited with their family, individually, friends& relatives. Some purchase grocery daily needs, electronic items& agricultural products. After analyzing the primary data some respondents given rates to the choupal sagar are in that they are given the lowest rate to the convince only.

Annexure Name:Age:Profession /Occupation:Address:Contact No:1) How many members are there in your family?

63

a) 2 c) 4

b) 3 d) 5

2) From where do you purchase your grocery? a) Nearby Grocery Shop

b) Anywhere

c) Fixed Grocery Shop

d) ITC Choupal Sagar

3) What is the frequency to purchase your grocery? a) Daily

b) Weekly

c) Fortnightly

d) Monthly

4) Are you using any the Electronic items? a) Yes

b) No

5) Which electronic item do you use? a) T.V.

b) Washing Machine

c) Fridge

d) Mixer

6) Are you using any agricultural product? a) Yes

b) No

7) What you prefer most while purchasing grocery/electronic item/agri products? a) Product Quality

b) Price

c) Service

d) Convince

8) If all these services if you will get under one roof do you will Purchase from there? a) Yes

b) No 64

9) Are you aware of Choupal Sagar in Washim city? a) Yes

b) No

10) How many times do you visit Choupal Sagar? a) Once

b) Twice

c) Weekly

d) Not at all

11) With who do you visited Choupal Sagar? a) Individual

b) Friends

c) Family

d) Relative

12) What would you like most to purchase from there? a) Grocery

b) Daily Needs

c) Electronic Items

d) Agricultural Products

13) Whether Choupal Sagar satisfied your need or not? a) Yes

b) No

c) To some extent

d) Cannot say

14) Whether it convenient from your home to travel there? a) Yes

b) No

15) Whether it is costly or cheaper than any other retailer? a) Yes

b) No

c) To some extent

d) Nothing to say 65

16) What is your opinion regarding there service and product quality? a) Very Good

b) Good

c) Bad

d) Very Bad

17) Whether Choupal Sagar is successful in Washim city? a) Yes

b) No

c) To some extent

d) Nothing to say

18) Give the rating to Choupal Sagar on the basis of the following: (Between 1 to 5) Low Price

Good Quality

Service

Helpful Nature Convince

Any Suggestions:

THANK YOU

References

Consumer Behavior: ICFAI Publication of Semester 3rd Kaberi Bhattacharrya Article on “A Journey to the Interiors Prospects for Rural Retailing in India” Marketing Mastermind: “Magic Mirror Trial Room of the Future” Rural Retailing April 2009. Mr.Prafulla Ghodchar, Choupal Sagar Incharge, Washim. 66

http://www.google.com/rural retailing/ITC/LETINDIA PUT FIRST.html http://www.itcportal.com/e-choupal sagar .html http://www.slideshare.net//rural retailing ITC Choupal Sagar.html

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