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SYNOPSIS

TOPIC: ORIGINAL PRODUCT OVER FAKE PRODUCT IN RURAL AREA

INTRODUCTION
Rural market is the most happening market for all the FMCG companies to penetrate and
increase volume. As urban market is getting saturated and FMCG companies are seeing rural
market as their potential market to sell products. But to tap rural market is not that easy task
because of various obstacles and challenges. One of the most crucial challenges for every FMCG
company is the presence of spurious products.
Fake brands exist in rural as well as urban locations. But the problem is more acute in rural areas
especially the deep pockets which are less accessible and people have very little knowledge
about the original brands. “Most people in rural India can recognize alphabets but not complete
words, so during a research, we found a whole lot of samples of fake Clinic Plus shampoo
sachets where the visual was similar to the original brand but the name was changed to ‘Clinton’
as Bill Clinton was to arrive soon in the country. During another such raid, we collected about 99
variants of Detergent powders said Mr. Pradeep Kashyap, president, Rural Marketing
Association of India (RMAI) and CEO, MART while sharing an interesting incident in past.
The Indian rural landscape being scattered in smaller villages, gaining access in all of them is a
tedious task for brands. Also, most of the FMCG brands have not been able to set up an efficient
distribution network in such areas. The local entrepreneurs are well aware of these challenges.
Hence, take advantage by manufacturing cheap substitutes of original brands, misleading the
rural consumers. These manufacturers have an advantage of being local and thus reach the shops
before the original brands do.
Such counterfeits piggy back on huge marketing budgets of FMCG companies. The rural
consumers are aware of the brand owing to ads broadcasted on radio & television channels. But
on time of purchase, the consumers tend to pick their fake counterparts due to unavailability of
original product or get fooled by the retailers who on purpose sell cheap products for higher
margins.
Over the time the share of fake products in the FMCG market has grown to 10- 15% causing a
deep hole in the pockets of the FMCG companies. A study conducted by AC Nielson, a research
agency reveals that FMCG industry loses around 2500 crores annually to counterfeits and pass-

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off products. In another recent survey conducted by AC Nielson reveals that top brands in India
are estimated to lose up to 30 percent of their business to fake products. Besides the loss of
revenue, the leading companies also bear the damage to brand image and brand loyalty of
consumers.
On a whole, the brands not only suffer in terms of revenue but also have to compromise on the
brand image which in no case can be tolerable. Therefore, various brands have come up with
unique strategies to overcome their shortcomings in the rural markets and curb the growth of
fake brands in rural areas.
Companies like Coca-Cola have set up an elaborate system to curb the menace of duplicate
manufacturers, offering incentives to informers. It has 48 consumer response coordinators across
the countries who work with their teams and redress consumer complaints directly, including
overcharging and spurious bottling. Besides, it has a large network of route salesmen who have a
one-to-one relationship with the retailers on their beat and keep their ears to the ground. When
they spot suspicious activity, they inform company officials. So though it is impossible to stop
counterfeiters totally, it is possible to minimize the damage they cause.
Stopping the counterfeits market is a long process but it’s more important for companies to
create awareness among the consumers about the ill effects about such fake products and the
hazards they pose.

Spurious or fake or counterfeit products are also affecting the business of branded
companies by hurting their brand image and value. Spurious products are broadly divided
into three categories:

1. Fake/Duplicate products: Manufacturer of fake or duplicate products uses the identical


name of the product, packaging, colour scheme, logo and even the same name and address
as the genuine manufacturer.

2. Look alike products: Look alike products are those products where manufacturer other
than original producer cleverly uses the similar looking packaging or colour or design or
logo scheme to deceive the customers.

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Why rural market?

It has been observed that spurious products are more prevalent in rural market. Rural market is
more affected by spurious products because of illiteracy and unawareness of rural consumers is
much higher than their urban counterparts. Role of retailer is also plays an important role in selling
of spurious products in the rural market mostly due to unawareness and high margin of profit.

STATEMENT OF PROBLEM
By increasing market demand for their products so effectively, manufacturers are also,
unintentionally, creating a market for counterfeit products, which are almost always lower in
price. Manufacturers are thus victims of their own success. Price differences between various
markets, which are often strategically segmented by manufacturers and distributors, are reflected
in pricing policy, underscoring a significant gap in consumer purchasing power in different
countries. This policy often drives people to produce and distribute counterfeit goods in their
local market. As counterfeiting activities have become rampant, counterfeiters create distribution
channels and establish an economic and even political presence in society. Some economies are
supported by these activities which create local job opportunities. Emerging markets are
producing an increase in demand of startling proportions for well-known products, which
legitimate manufacturers have been unable to completely satisfy.

PURPOSE OF THE STUDY

Imitation strategy is the strategy that mimics the strategy of other companies. Imitation strategy
can be classified into four types.

• Imitation strategy of the first type is piracy strategy. Companies that perform this kind of
imitation strategy sell products with the brand and product design exactly the same. This strategy
has illegal activities.

• Imitation strategy of the second type is cloning strategy. Companies using this strategy are
really imitating an existing product, but give other brands.

• Strategy imitation of the third type is a strategy that mimics the design or trade dress
mentioned.

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• Strategy imitation of the fourth type is creative adaptation strategies, namely copying existing
products and developing or adapting to apply to the new environment. This strategy is also
referred to as a strategy of camouflage or disguise strategies.

The aim of the creators of imitator brands is to position the new product next to a better known
(often market leader) brand. One potential result of brand imitation is consumer brand confusion,
where consumers buy the imitator brand thinking it is the original. Brand imitation is not a minor
problem. Brand imitation cases involve fast moving consumer goods, automobiles, sportswear,
travel companies, professional sports associations, petroleum products, limousine services, fast
food restaurants, insurance companies, casinos, medicines, watches, and food products, to
mention only a few.

LITERATURE REVIEW
There are many articles written in newspapers, paragraphs one can find in rural marketing books
and few research papers talking about the economic, health and legal problems due to spurious or
fake products. But a very few papers and works have done in this direction to suggest counter
strategies to protect brands.

In a book Cases in Rural Marketing an Integrated Approach Prof CSG Krishnamacharyulu and
Lalitha Ramkrishnan suggested some counter strategies under case study “Fighting the fakes”.
In this case study author suggested three strategies Legal method, Surveillances and Upgrading
packages. Legal method a proactive strategy adopted by P&G against fake manufacturers, Under
Surveillance method where Coke actively keep surveillance over fake manufacturers by
connecting its employees with retailers and direct consumers. In Upgrading packages a case of
Dabur has been discussed and how Dabur changed from the simple packaging of Lal Dant Manjan
to more complex packaging which is difficult to copy.

Formation of BPC (Brand Protection Committee) under FICCI (Federation of Indian


Chambers of Commerce and Industry) consists of about 50 legal experts, manufacturers and
research company AC Nielsen. BPC has put a fourfold strategy by focus on enforcement and
application of laws; publicizing the negative economic impact of fake products; taking direct
action against spurious manufacturers; traders, wholesalers and retailers. Also started a website

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www.fake-busters.com; to aware people and increase information about fake products. As far as
rural market is concerned creating awareness by launching a website is not a great idea.

Objectives of the study


1. To know about the various strategies adopted by FMCG companies to counter fake
products in rural market.

2. To suggest the holistic strategy to counter fake products in rural market.

RESEARCH METHDOLOGY
The present paper depends on descriptive research technique and attempts optional information
into record. The examination was broadly accomplished for specific purposes which are to be
thinks about in certain confinement also. Research philosophy further incorporates the different
destinations and speculation intended for the examination, alongside writing survey. The data
and information sources are assembled from different sources (Secondary sources) to set up
contentions and counter contention for new businesses in India.

Present technique advocates Qualitative research, along these lines making this examination
paper a subjective research paper. Alongside it, data/inputs have been joined on perception. The
investigation depends on specific targets and confinement, as referenced prior; the endeavors
will be made to meet destinations dependent on precise examination of data sources/data
accessible through a few sources. Following are the wellspring of data for the investigation

DATA COLLECTION METHOD:

 Primary Data
 Secondary data.

STATISTICAL TOOLS:

The data are analyzed through statistical methods. Simplex percentage analysis are used for

analyzing are used for analyzing the data collected.

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Graphs:

Graphical representations are used to show the results in simple form. The graphs are prepared

on the basis of data that is received from the percentage analysis

Analysis of data

Simple Statistical tools used:

1) Average
2) Comparative analysis

LIMITATION OF STUDY

 Data collected for Analysis


 Unwillingness of respected personnel’s to provide relevant data for my study
 Time allotted for the project was not sufficient to go for detailed analysis of the research
problem.
 Study of awareness and perception of the customers is only based on sample size .