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

5
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) 2008-

2010.

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 : Faculty member
Center : INC AKOLA

7
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.

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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:

15
 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

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 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

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 Population 698 million

RURAL INDIA:-

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 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
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 • 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 agri-
inputs 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, bullock-
carts 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 reasonably-
priced 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

27
 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 50
• Agricultural Labor 27
• Business 10
• Non Agricultural labor 09
• Salary Earners 02
• Not gainfully Employed 02
• Total 100

INCOME GENERATION:-

Sources of Income Proportion to Total

• Agriculture 59
• Agriculture Wages 16
• Business and Craft 09
• Non Agricultural Wages 07
29
 • Salaries 03
• Current Transfers 02
• Others 04
• Total 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 Urban

1. Cereals 55.38 52.34

2. Gram 10.40 10.59
3. Cereal Substitute 10.24 10.22
4. Pulses 18.31 20.04
5. Milk and milk products 28.35 39.53
6. Edible oils 19.10 24.60
7. Meat , eggs and fish 16.84 22.42
8. Clothing 24.15 38.86
9. Durable goods 8.33 30.38
10. Total Non –food items 137.68 264.54
11. Total Consumer Expenditure 378.46 596.00

LITERACY LEVEL:
Literacy Levels in Percentage

1991 2001

Rural 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.

33
 Chapter: 6

Literature Review

34
 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.

37
 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 agri-
input 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.

39
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

40
 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%

41
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 Grocery
Shop 24 24%

Anywhere 23 23%

Fixed Grocery Shop 30 30%

ITC Choupal Sagar 23 23%

Total 100 100%

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%

43
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%

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 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%

54
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%

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 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%

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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 GOOD SERVICE HELPFUL CONVIENCE

PRICE QUALITY NATURE

1 55 12 08 08 17
2 14 31 26 16 12
3 11 25 25 23 18
4 11 24 25 23 15
5 07 08 16 30 38

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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.

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 • 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 b) 3
c) 4 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
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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

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 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.
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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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