CHAPTER-1CHAPTER-1

IntroductionIntroduction

1

RURAL INDIA…a new dawnRURAL INDIA…a new dawn

India needs creative solutions to start a revolution which can take itsIndia needs creative solutions to start a revolution which can take its

villages fast forward in time – converting them into economically viablevillages fast forward in time – converting them into economically viable

units and growth engines, harnessing the power of the villagers, andunits and growth engines, harnessing the power of the villagers, and

opening up new horizons with the promise of a better tomorrow.opening up new horizons with the promise of a better tomorrow.

2

OBJECTIVE & SCOPE OF STUDY

Primary Objective:-

The primary objective of this study is to have a comparative study of penetration

strategies adopted by different companies for marketing of ‘Tea’ in rural areas of India.

Secondary Objective:-

1) To compare the penetration strategies of different companies.

2) To identify the situations of extra focus.

3) To study the consumption pattern of tea.

4) To identify the reasons behind the success of companies.

5) To identify the most effective channel of distribution.

6) To identify the most effective mode of communication.

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SCOPE OF STUDY

This project gives a great exposure to rural market because it include the problems of

rural India with existing opportunities and different strategies adopted by companies to

take advantages of these opportunities by serving rural markets. The different scopes of

this project are-

1) Approximately 72% of total Indian population lives in rural areas.

2) Saturation in urban markets.

3) Increase in literacy rate.

4) Rise in disposable income and hence rise in standard of living.

5) Holds 12.2percent of the world population

6) 70% of rural population can be reach by mass media

7) The contribution of rural market in GDP of India is 29%.

8) There is 25% contribution of rural market in FMCG sector.

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THEORETICAL BACKGROUND OF STUDY

Before gamboling into issues like where the Indian rural market stands and the

opportunities for corporate’s to explore there... let's look at the definition of urban and

rural India. The Census defined urban India as - "All the places that fall within the

administrative limits of a municipal corporation, municipality, cantonment board etc or

have a population of at least 5,000 and have at least 75 per cent male working population

in outside the primary sector and have a population density of at least 400 per square

kilometer. Rural India, on the other hand, comprises all places that are not urban!"

Now for some facts and figures The Indian rural market today accounts for only about Rs

8.8 billion (57 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 Lever Limited (HLL) is top of the mind with

their successful rural marketing projects like 'Project Shakti' and 'Operation Bharat'. The

lynchpin of HLL'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

5

activities, which are in line with the brand itself, is what sums up HLL'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 corporates

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.

Khaitan fans' ad on a horse cart Wheel's wall painting

We can safely say that until some years ago, the rural market was being given a step-

motherly treatment by many companies and advertising to rural consumers was usually a

hit and miss affair. More often than not, the agenda being to take a short-cut route by

pushing urban communication to the rural market by merely transliterating the ad copy.

Hence advertising that is rooted in urban sensitivities didn't touch the hearts and minds of

the rural consumer. While, this is definitely changing, the process is slow. The greatest

challenge for advertisers and marketers continues to be in finding the right mix that will

6

have a pan-Indian rural appeal. Coca Cola, with their Aamir Khan ad campaign

succeeded in providing just that.

Corporates are still apprehensive to "Go Rural." A few agencies

that are trying to create awareness about the rural market and its

importance are Anugrah Madison, Sampark Marketing and

Advertising Solutions Pvt Ltd, MART, Rural Relations, O&M

Outreach, Linterland and RC&M, to name a few. Also, the first

four agencies mentioned above have come together to form The

Rural Network. The paramount objective of the Network is to get

clients who are looking for a national strategy in rural marketing

and help them in executing it across different regions.

Interestingly, the rural market is growing at a far greater speed than its urban counterpart.

"All the data provided by various agencies like NCAER, Francis Kanoi etc shows that

rural markets are growing faster than urban markets in certain product categories at least.

The share of FMCG products in rural markets is 53 per cent, durables boasts of 59 per

cent market share. Therefore one can claim that rural markets are growing faster than

urban markets," says Sampark Marketing and Advertising Solutions Pvt Ltd managing

director R A Patankar.

Lifebuoy's wall

painting in rural

India

7

Coca-Cola India tapped the rural market in a

big way when it introduced bottles priced at Rs

5 and backed it with the Aamir Khan ads. The

company, on its behalf, has also been investing

steadily to build their infrastructure to meet the

growing needs of the rural market, which

reiterates the fact that this multinational has

realized the potential of the rural market is going strength to strength to tap the same.

Clearly the main challenge that one faces 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 face today when it comes to

going rural. "Reaching your product to remote locations

spread over 600,000 villages and poor infrastructure -

roads, telecommunication etc and lower levels of literacy

are a few hinges that come in the way of marketers to

reach the rural market," says MART managing director

Pradeep Kashyap.

"Yaara da Tashan..." McCann

Erickson's ads with Aamir Khan

created universal appeal for Coca Cola

In 2000, ITC took an

initiative to develop direct

contact with farmers who

lived in far-flung villages in

Madhya Pradesh. ITC's E-

choupal was the result of this

initiative.

8

Citing other challenges in rural marketing, Patankar says, "Campaigns have to be tailor

made for each product category and each of the regions where the campaign is to be

executed. Therefore a thorough knowledge of the nuances of language, dialects and

familiarity with prevailing customs in the regions that you 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 very effective means of reaching out physically to the

rural consumers."

The fact of the matter remains that when compared to the Indian urban society, which is

turning into a consumerism society; the rural consumer will always remain driven by his

needs first and will therefore be cost conscious and thrifty in his spending habits.

"Decision-making is still conscious and deliberated among the rural community. But

nevertheless, the future no doubt lies in the rural markets, since the size of the rural

market is growing at a good pace. There was a time when market predictions were made

on the basis of the state of the monsoon but this trend has changed over the years; there is

a large non farming sector, which generates almost 40 per cent of the rural wealth. Hence

the growth in the rural markets will be sustained to a large extent by this class in addition

to the farmer who will always be the mainstay of the rural economy," affirms Patankar.

"Although the melting of the urban - rural divide will take a while, this is not for want of

the availability of the means but for want of the rural consumer's mindset to change;

which has its own logic, which is driven by tradition, custom and values that are difficult

to shed," he points out.

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Fulcrum's Gowthaman says, "The biggest

impending factor or deterrent on rural

monies going up is that there is a general

sense of 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, you will not be

able to spend disproportionate monies in the rural market."

For HLL, a one rupee or a five rupee sachet or the Kutti

Hamam (the small Hamam) helps in giving the

consumers a trial opportunity. While it does help in

generate volume but not in terms of values. "Till the

time that volume - value equation is managed better, the

CPC is preventing anybody to look at rural at a large

scale activation programme," reiterates Gowthaman.

Ultimately, the ball lies in the court of rural marketers.

It's all about how one approaches the market, takes up

the challenge of selling products and concepts through innovative media design and more

importantly interactivity.

Anugrah Madison's chairman and managing director RV Rajan sums up, "There is better

scope for language writers who understands the rural and regional pulse better. I also see

great scope for regional specialists in the areas of rural marketing - specialists like Event

Satellite dish antennas reach rural India

Typical shop in rural India

stocked with sachets, etc

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Managers, Wall painters, folk artists, audio visual production houses. In fact all those

people who have specialised knowledge of a region are bound to do well, thanks to the

demands of the rural marketers."

So the fact remains that the rural market in India has great potential, which is just waiting

to be tapped. Progress has been made in this area by some, but there seems to be a long

way for marketers to go in order to derive and reap maximum benefits. Moreover, rural

India is not so poor as it used to be a decade or so back. Things are sure a changing!

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Rural Marketing - ConceptRural Marketing - Concept

In recent years, rural markets have acquired significance, as the overall growth of the

economy has resulted into substantial increase in the purchasing power of the rural

communities. On account of green revolution, the rural areas are consuming a large

quantity of industrial and urban manufactured products. In this context, a special

marketing strategy, namely, rural marketing has emerged. But often, rural marketing is

confused with agricultural marketing – the latter denotes marketing of produce of the

rural areas to the urban consumers or industrial consumers, whereas rural marketing

involves delivering manufactured or processed inputs or services to rural producers or

consumers.

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What makes Rural Market Attractive?What makes Rural Market Attractive?

Rural market has following arrived and the following facts substantiate this:

742 million people

Estimated annual size of the rural market

o FMCG Rs 65,000 Crore

o Durables Rs 5,000 Crore

o Agri-inputs (incl. tractors) Rs 45,000 Crore

o 2 / 4 wheelers Rs 8,000 Crore

In 2001-02, LIC sold 55 % of its policies in rural India.

Of two million BSNL mobile connections, 50% in small towns/villages

Of the six lakh villages, 5.22 lakh have a Village Public Telephone (VPT)

41 million Kisan Credit Cards issued (against 22 million credit-plus-debit cards in

urban) with cumulative credit of Rs 977 billion resulting in tremendous liquidity.

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Of 20 million Rediffmail signups, 60 % are from small towns. 50% transactions

from these towns on Rediff online shopping site

42 million rural HHs availing banking services in comparison to 27 million urban

HHs.

Investment in formal savings instruments: 6.6 million HHs in rural and 6.7

million in urban

Rural Consumer InsightRural Consumer Insight

Rural India buys:

o Products more often (mostly weekly)

o Buys small packs, low unit price more important than economy

In rural India, brands rarely fight with each other; they just have to be present at

the right place

Many brands are building strong rural base without much advertising support

o Chik shampoo, second largest shampoo brand

o Ghadi detergent, third largest brand

Fewer brand choices in rural: number of FMCG brand in rural is half that of urban

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Buy value for money, not cheap products

Some Myths about Rural MarketsSome Myths about Rural Markets

I. Myth-1: Rural Market Is a Homogeneous Mass

Reality: It’s a heterogeneous population. Various Tiers are present depending on the

incomes like Big Landlords; Traders, small farmers; Marginal farmers: Labors, artisans.

State wise variations in rural demographics are present viz. Literacy (Kerala 90%, Bihar

44%) and Population below poverty line (Orissa 48%, Punjab 6%)

II. Myth-2: Disposable Income Is Low

Reality: Number of middle class HHs (annual income Rs 45,000- 2, 15,000) for rural

sector is 27.4 million as compared to the figure of 29.5 million for urban sector. Rural

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incomes CAGR was 10.95% compared to 10.74% in urban between 1970-71 and 1993-

94.

III. Myth-3: Individuals Decide About Purchases

Reality: Decision making process is collective. Purchase process- influencer, decider,

buyer, one who pays can all be different. So marketers must address brand message at

several levels. Rural youth brings brand knowledge to Households (HH).

Why Different Strategies?Why Different Strategies?

Rural markets, as part of any economy, have untapped potential. There are several

difficulties confronting the effort to fully explore rural markets. The concept of rural

markets in India is still in evolving shape, and the sector poses a variety of challenges.

Distribution costs and non availability of retail outlets are major problems faced by the

marketers. The success of a brand in the Indian rural market is as unpredictable as rain.

Many brands, which should have been successful, have failed miserably. This is because,

most firms try to extend marketing plans that they use in urban areas to the rural markets.

The unique consumption patterns, tastes, and needs of the rural consumers should be

analyzed at the product planning stage so that they match the needs of the rural people.

Therefore, marketers need to understand the social dynamics and attitude variations

within each village though nationally it follows a consistent pattern. The main problems

in rural marketing are:

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Understanding the rural consumer

Poor infrastructure

Physical Distribution

Channel Management

Promotion and Marketing Communication

Dynamics of rural markets differ from other market types, and similarly rural marketing

strategies are also significantly different from the marketing strategies aimed at an urban

or industrial consumer.

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OpportunitiesOpportunities

Infrastructure is improving rapidly.

o In 50 years only 40% villages connected by road, in next 10 years another

30%

o More than 90 % villages electrified, though only 44% rural homes have

electric connections

o Rural telephone density has gone up by 300% in the last 10 years; every

1000+ pop is connected by STD

Social Indicators have improved a lot between 1981 and 2001

o Number of “pucca” houses doubled from 22% to 41% and “kuccha”

houses halved (41% to 23%)

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o Percentage of BPL(Below Poverty Line) families declined from 46% to

27%

o Rural Literacy level improved from 36% to 59%

Low penetration rates in rural so there are many marketing opportunities

Durables Urban Rural Total (% of rural HH)

CTV 30.4 4.8 12.1

Refrigerator 33.5 3.5 12.0

FMCGs

Shampoo 66.3 35.2 44.2

Toothpaste 82.2 44.9 55.6

Marketers can make effective use of the large available infrastructure

o Post offices 1,38,000

o Haats (periodic markets) 42,000

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o Melas (exhibitions) 25,000

o Mandis (agri markets) 7,000

o Public distribution shops 3,80,000

o Bank branches 32,000

Proliferation of large format rural retail stores which have been successful also.

o DSCL Haryali stores

o M & M Shubh Labh stores

o TATA/Rallis Kisan Kendras

o Escorts rural stores

o Warnabazaar, Maharashtra (annual sale Rs 40 crore)

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CHAPTER-2

RESEARCH METHODOLOGY

Research methodology is considered as the nerve of the project. Without a proper well-

organized research plan, it is impossible to complete the project and reach to any

21

conclusion. The project was based on the survey plan. The main objective of survey was

to collect appropriate data, which work as a base for drawing conclusion and getting

result.

Therefore, research methodology is the way to systematically solve the research problem.

Research methodology not only talks of the methods but also logic behind the methods

used in the context of a research study and it explains why a particular method has been

used in the preference of the other methods.

Descriptive and Analytical type of study was adopted while conducting the project.. The

major purpose of the study is to describe the state of affairs as it exists at present. The

study was based on the facts or information already available, & analysis of this available

information make a critical evaluation of the material.

DEFINING THE PROBLEM

To find appropriate marketing mix for rural areas.

To find the way to overcome the problem of communication.

22

To find the suitable mode of distribution.

RESEARCH DESIGN

Research design is important primarily because of the increased complexity in the market

as well as marketing approaches available to the researchers. In fact, it is the key to the

evolution of successful marketing strategies and programmers. It is an important tool to

study buyer’s behaviour, consumption pattern, brand loyalty, and focus market changes.

A research design specifies the methods and procedures for conducting a particular study.

According to Kerlinger, “Research Design is a plan, conceptual structure, and strategy of

investigation conceived as to obtain answers to research questions and to control

variance.

Research design specifies methods and procedures for study. In this study Causal

Research Design has been used because this study was done by me to know the

strategies of different companies penetrating rural market and the effects of those

strategies on their targeted market.

SAMPLING METHOD

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Judgemental Sampling method

SAMPLE SIZE

6 Tea Companies operating in rural areas

RESEARCH TOOLS

Websites of companies

Wikipedia and Encyclopaedias

Journal and Magazines

Newspapers

Other research reports

COLLECTION OF DATA:

This report is based on secondary data and this data was arranged from the various

studies conducted in last few years and various other records of company & their

websites.

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Primary Data:

The primary data used in this report was taken from other research reports and data

available on websites of different companies.

Secondary Data:

Since the project is based on secondary data.. These data were collected from various past

studies, other sources of the companies, their websites and magazines.

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CHAPTER-3

26

COMPANY PROFILECOMPANY PROFILE

Set up in 1964 as a joint venture with UK-based James Finlay and Company to develop

value-added tea, the Tata Tea Group of Companies, which includes Tata Tea and the UK-

based Tetley Group, today represent the world's second largest global branded tea

operation with product and brand presence in 40 countries. Among India's first

27

multinational companies, the operations of Tata Tea and its subsidiaries focus on branded

product offerings in tea but with a significant presence in plantation activity in India and

Sri Lanka.

The consolidated worldwide branded tea business of the Tata Tea Group contributes to

around 86 per cent of its consolidated turnover with the remaining 14 per cent coming

from Bulk Tea, Coffee, and Investment Income. The Company is headquartered in

Kolkata and owns 27 tea estates in the states of Assam and West Bengal in eastern India,

and Kerala in the south.

PRODUCT & BRANDSPRODUCT & BRANDS

The company has five major brands in the Indian market - Tata Tea, Tetley & Agni with

three regional brands Kanan Devan, Chakra Gold and Gemini -- catering to all major

consumer segments for tea. The Tata Tea brand leads market share in terms of value and

28

volume in India and the Tata Tea brand is accorded "Super Brand" recognition in the

country. Tata Tea's distribution network in the country with 38 C&F agents and 2500

stockists caters to over 1.7 million retail outlets (ORG Marg Retail Audit) in India.

The company has a 100% export-oriented unit (KOSHER & HACCP certified)

manufacturing Instant Tea in Munnar, Kerala, which is the largest such facility outside

the United States. The unit's product is made from a unique process, developed in-house,

of extraction from tea leaves, giving it a distinctive liquoring and taste profile. Instant Tea

is used for light density 100% Teas, Iced Tea Mixes and in the preparation of Ready-to-

drink (RTD) beverages.

With an area of approx 15,900 hectares under tea cultivation, Tata Tea produces around

30 million kg of Black Tea annually.

29

4P’s of Marketing of

Tata Tea

1#

Product:Product:

Bulk Tea

All grades of CTC Teas

30

All grades of Orthodox Teas

Organic Tea - Orthodox grades Teas

are supplied in packaging as per ISO norms as well as customer requirements viz. 4-ply

Kraft Paper Sacks, Multiwall Paper Sacks, Rigid T--Sacks, Polywoven Sacks, Currugated

Fibre Carlons, Polylined Jute Bags etc.

Instant Tea

Instant Tea Division caters to customer specific product and are used for light density

100% Teas, Iced Tea Mixes and in the preparation of Ready to Drink (RTD) beverages.

Instant Tea powder is packed in bulk packages of 20/25/35 kg each.

Intant tea powder - heavy density

Instant tea powder - institutional density

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Instant tea powder - grocery density

Micro milled instant tea powder

2#

Price:Price:

Marketers need to understand the psyche of the rural consumers and then act accordingly.

Rural marketing involves more intensive personal selling efforts compared to urban

marketing. Firms should refrain from designing goods for the urban markets and

subsequently pushing them in the rural areas. To effectively tap the rural market a brand

must associate it with the same things the rural folks do. This can be done by utilizing the

various rural folk media to reach them in their own language and in large numbers so that

the brand can be associated with the myriad rituals, celebrations, festivals, “melas” and

other activities where they assemble.

All the prices of the products depend upon the package ie 50gms or 100gms.

Normally a Penetrating Strategy is used frequently

3#

Place: (Distribution):-Place: (Distribution):-

One of the ways could be using company delivery vans which can serve two purposes- it

can take the products to the customers in every nook and corner of the market and it also

32

enables the firm to establish direct contact with them and thereby facilitate sales

promotion.

However, only the bigwigs can adopt this channel. The companies with relatively fewer

resources can go in for syndicated distribution where a tie-up between non-competitive

marketers can be established to facilitate distribution. Annual “melas” organized are quite

popular and provide a very good platform for distribution because people visit them to

make several purchases. According to the India n Market Research Bureau, around 8000

such melas are held in rural India every year.

Rural markets have the practice of fixing specific days in a week as Market Days (often

called “Haats’) when exchange of goods and services are carried out. This is another

potential low cost distribution channel available to the marketers. Also, every region

consisting of several villages is generally served by one satellite town (termed as

“Mandis” or Agri-markets) where people prefer to go to buy their durable commodities.

If marketing managers use these feeder towns they will easily be able to cover a large

section of the rural population.

4#

Promotion:-Promotion:-

Firms must be very careful in choosing the vehicle to be used for communication. Only

16% of the rural population has access to a vernacular newspaper. So, the audio visuals

33

must be planned to convey a right message to the rural folk. The rich, traditional media

forms like folk dances, puppet shows, etc with which the rural consumers are familiar and

comfortable, can be used for high impact product campaigns.

34

COMPANY PROFILECOMPANY PROFILE

35

Hindustan Unilever Limited (HUL) is India's largest fast moving consumer goods

company. The Anglo-Dutch company Unilever owns a 52% majority stake.

HUL was formed in 1933 as Lever Brothers India Limited and came into being in 1956

as Hindustan Lever Limited through a merger of Lever Brothers, Hindustan Vanaspati

Mfg. Co. Ltd. and United Traders Ltd. It is headquartered in Mumbai, India and has an

employee strength of over 15,000 employees and contributes to indirect employment of

over 52,000 people. The company was renamed in June 2007 as “Hindustan Unilever

Limited”.

Brooke Bond entered Indian market in 1900 and in 1903 it launched Red Label tea in the

country. In 1912, Brooke Bond & Co. India Limited was formed. Unilever acquired

Brooke Bond through an international acquisition. Similarly, Lipton's link with India date

back to 1898. Unilever acquired Lipton in 1972 and in 1977 Lipton Tea (India) Limited

was incorporated. Pond's (India) had been in Indian market since 1947. It joined the

Unilever ranks through an international acquisition of Chesebrough Pond's USA in 1986.

In 1992, the erstwhile Brooke Bond acquired Kothari General Foods, with significant

interests in Instant Coffee. In 1993, it acquired the Kissan business from the UB Group

and the Dollops Ice-cream business from Cadbury India. In one of the most talked about

events of India's corporate history, the erstwhile Tata Oil Mills Company (TOMCO)

merged with HLL, effective from April 1, 1993. In July 1993, Brooke Bond India and

Lipton India merged to form Brooke Bond Lipton India Limited (BBLIL). Brooke Bond

Lipton India Limited launched Wall's range of Frozen Desserts in 1994 and by the end of

36

the year, HLL entered into a strategic alliance with the Kwality Icecream Group families.

BBLIL merged with HLL, with effect from January 1, 1996.

PRODUCTS & BRANDS

37

HUL have two brands in tea-

Lipton Tea:-

Lipton's main pillar brands are Lipton Yellow Label and Lipton Iced Tea. Other product

lines exist as well, like the Lipton pyramid range in Europe and North America, and

Lipton Milk Tea in East Asia. In 2008, the brand launched Lipton Linea in Western

Europe.

Lipton Clear was also launched in 4 variants –Green Tea Jasmine, Green Tea Mint,

Green Tea Citrus and Green Tea Pure.

It is not famous brand for rural areas of India.

Brooke Bond Tea:-

Brooke Bond Taj Mahal, Brooke Bond Red Label, Brooke Bond Taaza and Brooke Bond

3 Roses are the most popular products under this brand. Brooke Bond 3 Roses which is

the leading tea brand of South India, launched ‘Brooke Bond 3 Roses Natural Care'. All

the products that have been launched by Brooke Bond have been the result of carefully

conducted research and experiments between the Brooke Bond Tea Excellence Centre

which is situated in Kolkata and the research centre in Bangalore.

This brand is intimately associated with the life of Indians. With the aim of adding color

to the different Indian festivals, Brooke Bond announces exciting offers such as Diwali

38

Offer and Olimayamaana Vaazhkaimake Festival Offer. Brook Bond remains the best

choice of millions of Indian tea lovers.

39

4P’s of Marketing of Brooke Bond Tea

1#

Product:-Product:-

40

Lipton is not present in Indian Rural Market.Lipton is not present in Indian Rural Market.

Different products of Brooke Bonds are-Different products of Brooke Bonds are-

Brooke Bond Taj Mahal- available in simple and flavoured bags

Brooke Bond Red Label- 250gms,Dust,Natural Care and Special

Brooke Bond Taaza- Taaza Leaf and Taaza Dust

Brooke Bond 3 Roses- Present in three variants- 3 roses regular,3 roses natural

care and 3 roses mind sharp

Brooke Bond Sehatmand-22g,44g,200g and 900g

2#

Price:-Price:-

Different products of Brooke Bond are available in 22gms to 900gms packages with a Different products of Brooke Bond are available in 22gms to 900gms packages with a

reasonable price at each retail store which are suitable for rural consumers, since they usereasonable price at each retail store which are suitable for rural consumers, since they use

to buy products more often in small sachet.to buy products more often in small sachet.

3#

41

Place: (Distribution):-Place: (Distribution):-

Hindustan Unilever's distribution covers over 1 million retail outlets across India directly

and its products are available in over 6.3 million outlets in the country, nearly 80% of all

retail outlets in India. It estimates that two out of three Indians use its many home and

personal care products, food and beverages.

Hindustan Unilever Ltd. Has also a strong direct selling network with provides advantage

in rural areas.

4#

Promotion:-Promotion:-

Hindustan Unilever Ltd. relies heavily on its own company-organised media network for

promotion. There are some promotional events also organised by stockists.

42

MOHANI TEAMOHANI TEA

COMPANY PROFILECOMPANY PROFILE

43

Mohani Tea Leaves Pvt. Ltd. (MTL) is synonymous with the finest tea company in the

industry. The company was established with the resolution that its reputation must be

based on the quality of its products. We maintain commitment to quality. It manifests

itself in the imaging, branding and packaging of its entire product range and has helped

us achieve sales target across several states in India and reach out to millions of satisfied

customers.

The company provides excellent value added quality tea to its esteemed customers. With

a combination of outstanding service to our business associates and value for money

products to our customers, Mohani Tea Leaves Pvt. Ltd. has rapidly gained faith of a

chain of highly supportive business channel partners and satisfied customers, enabling

our business to grow and flourish.

We are a nationwide company focused on manufacturing high quality and strong,

flavoured tea. Passionate about what we do, and how we do it, we have acquired the sort

of knowledge and expertise which we believe is second to none.

Mohani Tea Leaves Pvt. Ltd. (MTL) is one of the India’s leading tea processing,

marketing and branding companies. Tea buying, blending, producing tea extracts and

packaged tea in various value added forms, bulk packaging, marketing, creating market

reports and forecasting trends - Mohani Tea Leaves Pvt. Ltd., prides in its ability to meet

its customer's needs to their utmost satisfaction, however diverse they may be.

PRODUCT & BRANDS

44

Today there are 6 major Tea Brands of Mohani Tea along with their variants in the Indian

marketplace and it is our responsibility to ensure that the requirements across all

parameters for Tea Quality and Packaging Materials are met.

Mohani Blue

Mohani Green

Mohani Gold

Mohani Royal

Mohani Fresh

Mohani Red

Available in Packing of 1 Kg., 500 gm., 250 gm., 200 gm., 100 gm., 50 gm. & 25 gm.

45

4P’s of Marketing of Mohani Tea

46

1#

Product:-Product:-

Following products of Mohani Tea are available-

Mohani Blue

Mohani Green

Mohani Gold

Mohani Royal

Mohani Fresh

Mohani Red

Available in Packing of 1 Kg., 500 gm., 250 gm., 200 gm., 100 gm., 50 gm. & 25 gm.

2#

Price:-Price:-

Tea sachets of Mohani Tea are available at competitive price following other companies. Tea sachets of Mohani Tea are available at competitive price following other companies.

These are available in 25g sachet pricing Rs.5 onwards which is suitable for rural These are available in 25g sachet pricing Rs.5 onwards which is suitable for rural

markets.markets.

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3#

Place: (Distribution):-Place: (Distribution):-

In today's hyper-competitive and highly global business environment, manufacturing and

trading companies must lower their operating costs and increase productivity to be

competitive. In order to achieve this, they must focus on their core competencies and

outsource the non-core activities in the supply chain. Logistics is also one such activity.

At logistics plan, we are fully geared to offer our customers a complete Supply Chain

Management Solutions.

Mohani Tea has a good network of stockiest and retailers with direct selling/marketing

team.

4#

Promotion:-Promotion:-

Mohani Tea follows the traditional promotional events like-Mohani Tea follows the traditional promotional events like-

Double Dhamaka Uphaar Lucky DrawDouble Dhamaka Uphaar Lucky Draw

Swadeshi Mela,KanpurSwadeshi Mela,Kanpur

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Punjab Lucky DrawPunjab Lucky Draw

GODREJ TEAGODREJ TEA

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COMPANY PROFILECOMPANY PROFILE

Godrej Tea is product of Godrej Tea is product of Godrej Hershey Ltd. (GHL) operates in Food and Beverages

space. Formed in 2007, a Joint Venture (JV) between The Hershey Company (USA) and

Godrej Group, GHL operates in multiple categories such as confectionery, beverages, and

grocery items.

With GHL has four Regional Sales Offices based at Mumbai, Delhi, Chennai and

Kolkata. The organization has a strong sale force of 500 people reaching to more than a

million retail outlets through 1500 distributors spread across expanse of India.

GHL has an aggressive growth plan to evolve as the market leader in Food & Beverage

space in India. Strong product innovations, brand building, and investments in improving

people and process capabilities would form critical aspects of future growth strategy for

the organization.

Godrej Packaged Tea is made with unmatched blend of hand-picked tea leaves from

selected tea gardens. Rich in colour aroma, strength and flavour, Godrej Tea is full of

antioxidants that stimulate your mind and body to function better.

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PRODUCT & BRANDS

Even so, the Godrej Group recently entered the tea business with the launch of two new tea

products, Godrej Noble House and Godrej Chai House. Godrej Chai House is targeted at the

popular and mid-premium segments, while Godrej Noble House is being positioned in the

premium category.

Nobel House is priced at Rs 55 for a 250 gm pack for its leaf varient and Rs 48 for the dust.

Chai House similarly, is priced at Rs 40 for a 250 gm pack of leaf and Rs 37 for dust. The firm

is selling the tea in 2kg, 1kg, 500gm, 250gm, 100gm, 50gm and 25gm packaging at prices as

low as Rs 3. Goodrej Tea also plans to introduce Re 1 packs. The pricing on both products

represents a 13% discount to the Tata Tea and Hindustan Lever Ltd. counterparts.

Godrej Tea enters the market hoping to latch on to the opportunity of consumers converting

to branded tea products. The Rs 4,000 crore branded tea market constitutes 44% of the

total tea market in the country, up from 32.5% in 1999, and is growing at a faster pace as

compared to the loose tea market due to conversions. The Rs 9,000 crore total tea market is

said to be growing at 1.5 to two per cent annually.

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4P’s of Marketing of Godrej Tea

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1#

Product:Product:

Godrej Tea has two products-

Godrej Noble House

Godrej Chai House

These are available in:

100gms, 250gms, 1 kg

Leaf / Dust forms

Standup pouches

2#

Price:Price:

Nobel House is priced at Rs 55 for a 250 gm pack for its leaf varient and Rs 48 for the

dust. Chai House similarly, is priced at Rs 40 for a 250 gm pack of leaf and Rs 37 for

dust. The firm is selling the tea in 2kg, 1kg, 500gm, 250gm, 100gm, 50gm and 25gm

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packaging at prices as low as Rs 3. Goodrej Tea also plans to introduce Re 1 packs. The

pricing on both products represents a 13% discount to the Tata Tea and Hindustan Lever

Ltd. counterparts.

3#

Place: (Distribution):-Place: (Distribution):-

Godrej Tea is utilizing 50% to 60% the existing Godrej Group distributors, while it has

appointed an additional 500 distributors on its own.

Godrej is strengthening its distribution by tapping new channels like new retail outlets

partners and direct selling to push its tea and advertising its low-price units both

regionally and nationally.

4#

Promotion:Promotion:

The company has an introductory offer for its teas, giving away fair glow soaps and

Cinthol Original for approximately 1-1.5 months.

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SOCIETY TEASOCIETY TEA

"Time for you and time for me,"Time for you and time for me,

And time yet for a hundred in decisions,And time yet for a hundred in decisions,

And for a hundred visions and revisions,And for a hundred visions and revisions,

Before the taking of a cup of tea"Before the taking of a cup of tea"

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An aromatic storyAn aromatic story

It's happening slowly, surely and smoothly.

People of the world are now waking up

To the pleasures of SOCIETY TEA

It comes from the people who have been giving the

World some of the finest blends of tea, since

1933 - Hasmukhrai & Co. The Company

launched Society Tea to meet

the ever-increasing demands from

distant shores such as yours.

Wherever tea is a tradition, Society Tea

Is always welcome, because here is a blend

Of such fine flavour, freshness and consistency,

That meets your expectations.

It's everything your cup of tea should be.

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COMPANY PROFILECOMPANY PROFILE

Tea is a tradition in our country. As, no doubt, it is in yours as well. But slowly, surely,

people all over are being a little more conscious about the tea that they drink. Slowly but

surely, tea is being referred to as SOCIETY TEA. Surely, one more delightful indication

of the world growing smaller. And in a way, of people coming closer. Now let's raise our

cups, to this cheerful tradition and to our little world of big-tasting teas.

Mission StatementMission Statement

The objective is to create new blends for the world.

Teas of a superlative quality that taste buds had never known

To extend its reach, cross geographical and cultural boundaries and reaching the hearts of

the people.

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Benefits of Society Tea Benefits of Society Tea

Health BenefitsHealth Benefits

Want the least expensive answer to memory problem? Drink tea, every few hours a day,

say recent findings by Unilever Research Laboratories. After much experiment with

combinations of various kinds of drugs that supposedly enhanced memory power, the

findings seek to subtly suggest that the most affordable remedy, without medical

expenses involved, was already available and yet ignored.

Findings by Unilever point to a strong link between tea and an increase in mental

alertness and other mental and physical attributes. Drinking tea every few hours can help

prevent a decline in mental alertness and performance throughout the day.

Tea is a rich source of flavonoids. The flavonoids in tea are found to be effective in

improving blood circulation and skin health. Research in Japan and Netherlands also

indicate that tea prevents strokes and heart attacks, certain cancers, check cholesterol

levels and inhibit formation of dental plaque.

Studies have shown that black tea consumption reduces the risk of heart disease and

stroke. It maintains a healthy circulatory system of arteries and veins.

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Today researchers are finding that a steaming cup of tea can relieve more than just the

stress of a harried day. Drinking the brew has been linked with a lowered risk of

everything from tooth decay to heart disease to stroke.

In a study of more than 1000 Japanese men, the more green tea they drank, the lower

their concentrations of blood cholesterol dropped. And recently, University of Minnesota

researchers found a link between tea consumption and a decreased risk for cancers of

digestive and urinary tract organs in women. Study on humans on tea and heart health,

revealed that drinking more than five cups of black tea had the lowest risk of severe

atherosclerosis.

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4P’s of Marketing of Society Tea

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1#

Product:

SOCIETY TEA

Available in 50, 100, 250 & 500 grams respectively.

SOCIETY TEA - PET JAR

Available in 250, 500 grams and 1 Kg. only.

SOCIETY TEA BAGS

In Packs of 25, 50 & 100 respectively.

SOCIETY PREMIUM

Available in 250 grams Jars on Request. only.

T - TOWN TEA

Available in 250 & 500 grams Jar only.

SOCIETY PURE DARJEELING TEA

Available on request only.

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2#

Price:Price:

The Pricing strategy used by Society Tea is somewhere in between penetrating and

skimming, but the major part is occupied by Penetrating.

Prices of Tea are as per the product packages.

Eg;- 100 gms are @ Rs.20/-

3#

Place: (Distribution)Place: (Distribution)

Rural markets have the practice of fixing specific days in a week as Market Days (often

called “Haats’) when exchange of goods and services are carried out. This is another

potential low cost distribution channel available to the marketers. Also, every region

consisting of several villages is generally served by one satellite town (termed as

“Mandis” or Agri-markets) where people prefer to go to buy their durable commodities.

If marketing managers use these feeder towns they will easily be able to cover a large

section of the rural population.

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Distribution of Society is all around the Urban and Rural Market.

The Manufacturer gives it to the wholesaler, wholesaler in turn gives it to the retailer and

then finally to the customers.

4#

Promotion:Promotion:

They arrested the eyes. There was something different about them. Something fresh.

Something elegant. Little wonder then, that tea-lovers felt persuaded to pick them up and

take them home. Yes, we're talking about the package.

As a matter of fact, everything was designed to appeal to the senses. From the packaging

to the point-of-sales attractions. From the press advertisements to the posters. From radio

jingles to TV commercials. The jingle "Tea. Tea. Tea…………." caught on so much that

people we heard humming it, while walking into stores, waiting for trains, watching a

cricket-match or generally to ease out their boredom.

Even children were heard singing it. One felt a freshness, a newness, a sense of

contentment similar to the feeling one gets after each sip of Hasmukhrai & Co.'s teas.

You couldn't expect any less from them. After all, they take so much trouble to create

such exquisite blends of tea. Each of these pieces of communication was an invitation in

every sense of the word. In fact, the first ad for SOCIETY Tea said "Welcome to the

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Society….". It was an invitation well accepted, for the society of tea lovers is growing

larger, day by day. We're tempted to say " Tea cheers for the design."

Parivar Tea LimitedParivar Tea Limited

Company Profile:

A newly established company in the tea & coffee industry

Board of Directors are the group members and is a partnership firm

Manufacturing Plant is at Vashi and head office is at Malad

Why go Rural?

Little has changed in the villages of India in the past decades. Schools have been built,

but many still lack teachers and appropriate teaching methods. There are phone lines in

many villages, but getting a dial tone is still a challenge. Electricity supply is at best

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intermittent. Health care is still limited in its availability.

India’s villages are dependent on agriculture for much of their sustenance. Drought is a

common occurrence across much of India. As a result, villagers, for the most part, remain

a poor lot - the per capita income of India’s villages is perhaps no more than Rs 12-

18,000 (USD 240-360, USD1 = INR50) per annum, as compared to the national average

of Rs 25,000 (USD 500).

Perhaps, most importantly, the opportunities available to villagers are not dramatically

different from what they were many years ago. Villages in India are where you live if you

have no other option.

And yet, India is in its villages. 70% of Indians live there. Even as one India races ahead

with optimism towards the future, there is another India which seems to be stuck in the

past. If India as a nation has to progress, there is little doubt that India’s villages too have

to progress.

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4P’s of Marketing of

Parivar Tea

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1#

Product:Product:

There are 2 types of tea:

General Tea

Herbal Tea

2#

Price:Price:

Prices are set according to the rural market / village. Prices are set after considering

whether it is a general tea or a herbal tea. Prices will be a bit high for herbal tea, as It

contains herbs which are costlier. Also as per the packages of tea.

3#

Place:Place:

The distribution pattern of our product will be different form the usual pattern. The first

this is that the company will have a company outlet in each and every village which will

eliminate the problem releting with middlemen. Along with this tea pouches will be

available at every shop in villages.

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4#

Promotion:Promotion:

Initially we will be giving free sampling for the first user, thereby promoting the brand

Wall painting at different places

Mouth to Mouth Publicity

Mobile Publicity with the use of vans and bicycles

Free tea at festivals and other occasion and also at our outlets.

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S T P of Parivar Tea LimitedS T P of Parivar Tea Limited

Segmenting / Targeting / Positioning

1. Segmenting: Buyers behavioral segmentation

All variables are in some way or the other related to buyers behavior, which vary often

confuses marketers. There is a difference between the buyers characteristics reflected in

there geographic, demographics and psychographic profiles, and there buying behavior.

Buyer behavior involves many elements like purchasing occasion benefits, user status,

rate of product usage, loyalty rate, and attitude towards the product.

2. Targeting: -

The company targets the whole family ie anyone in the family can drink the tea. Also

special for farmers as it also contains herbs which will refresh farmers.

3. Positioning:-

A Marketer can position his product in various ways to develop or enhance it’s value to

the consumer. He also do it according to :

Product Characteristics / Consumer Benefits

Price Quality

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Use or Application

Product User

Product Class

Culture Symbols

Competitors

Your company positions its products as a Quality product at fare prices and consumer

benefits which is a herbal tea.

Some Live ExamplesSome Live Examples

1. One very fine example can be quoted of Escorts where they focused on deeper

penetration. They did not rely on T.V or press advertisements rather concentrated on

focused approach depending on geographical and market parameters like fares, melas

etc. Looking at the ‘kuchha’ roads of village they positioned their bike as tough

vehicle. Their advertisements showed Dharmendra riding Escort with the punch line

‘Jandar Sawari, Shandar Sawari’. Thus, they achieved whopping sales of 95000

vehicles annually.

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2. HLL started ‘Operation Bharat’ to tap the rural markets. Under this operation it

passed out low–priced sample packets of its toothpaste, fairness cream, Clinic plus

shampoo, and Ponds cream to twenty million households.

3. ITC is setting up e-Choupals which offers the farmers all the information,

products and services they need to enhance farm productivity, improve farm-gate

price realization and cut transaction costs. Farmers can access latest local and global

information on weather, scientific farming practices as well as market prices at the

village itself through this web portal - all in Hindi. It also facilitates supply of high

quality farm inputs as well as purchase of commodities at their doorstep.

4. BPCL Introduced Rural Marketing Vehicle (RMV) as their strategy for

rural marketing. It moves from village to village and fills cylinders on the spot for the

rural customers. BPCL considered low-income of rural population and therefore

introduced a smaller size cylinder to reduce both the initial deposit cost as well as the

recurring refill cost.

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CHAPTER 4CHAPTER 4

FINDINGS &FINDINGS &

RECOMMENDATIONSRECOMMENDATIONS

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FINDINGSFINDINGS

The findings of project are-The findings of project are-

1.1. Tea is a widely consumed product with 95 per cent penetration.

2.2. Tata Tea which has a brand called Agni in the popular economy

segment.

3.3. HUL is differentiating its product with HUL is differentiating its product with 50 per cent Reference Daily

Intake (RDA) of important B vitamins thorough its product

Sehatmand.

4.4. Companies are attracted towards rural market, so companies are Companies are attracted towards rural market, so companies are

going rural.going rural.

5.5. The main target group is all family members (who drinks tea) of The main target group is all family members (who drinks tea) of

middle segment households.middle segment households.

6.6. Companies are selling their tea products in little sachet as much as Companies are selling their tea products in little sachet as much as

possible. (e.g. 22 g sachet of Mohani Tea)possible. (e.g. 22 g sachet of Mohani Tea)

7.7. The main focus is on availability of tea products at every retail store The main focus is on availability of tea products at every retail store

in demanded size of sachet.in demanded size of sachet.

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8.8. Companies are following the traditional methods of promotion like Companies are following the traditional methods of promotion like

haats, melas and lucky draw events.haats, melas and lucky draw events.

9.9. Companies use to give promotional schemes mainly, on the occasion Companies use to give promotional schemes mainly, on the occasion

of festivals like Dewali Offer.of festivals like Dewali Offer.

10.10. Companies have stockiest for distribution of Tea products.Companies have stockiest for distribution of Tea products.

11.11. Companies are also promoting and selling their Tea products through Companies are also promoting and selling their Tea products through

Direct Selling/Marketing.Direct Selling/Marketing.

12.12. Some companies have their own distribution network.e.g. HUL has itsSome companies have their own distribution network.e.g. HUL has its

unique network of retail outlets and direct selling.unique network of retail outlets and direct selling.

13.13. Different rural consumer groups of same area have different tests so Different rural consumer groups of same area have different tests so

companies are targeting them with good product line and variants.companies are targeting them with good product line and variants.

14.14. Companies sale their different variants tea products in unique packets Companies sale their different variants tea products in unique packets

so that villagers can recognize those packets easily. so that villagers can recognize those packets easily.

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ConclusionConclusion

Thus looking at the challenges and the opportunities which rural markets offer to the

marketers it can be said that the future is very promising for those who can understand

the dynamics of rural markets and exploit them to their best advantage. A radical change

in attitudes of marketers towards the vibrant and burgeoning rural markets is called for,

so they can successfully impress on the 230 million rural consumers spread over

approximately six hundred thousand villages in rural India.

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