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Project Report

OnEMERGING TREND IN MORDEN RETAIL FORMAT

WITH SPECIAL REFERENCE TO HUL (SHAKTI), ITC

(E-CHAUPAL) & GODREJ (ADHAAR)

http://var/www/apps/conversion/current/tmp/scratch23620/mbanetbook.blogspot.com

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CONTENTS

Chapter 1. Introduction & Background

1.1 Company Profile

1.2 Objective of the Project

Chapter 2. Research Methodology & Design

Chapter 3. Research Findings

Chapter 4. Conclusion

Chapter 5. Limitations

Chapter 6. Suggestion

References

Books

Web sources

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Chapter 1

Introduction

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Introduction

From the strict marketing point of view, the market structure in India is dichotomous

having rural and urban markets. But many do not concur with this view as they contendthat consumer everywhere is a consumer and hence their needs, aspirations, beliefs and

attitudes will also be the same. The fact, however, remains that there are certain unique

characteristic features which call for separate marketing strategies to be distinctively

developed to suit the rural and urban market behaviour.

Conditions existing in urban markets at present can also be analyzed in this context. First,

the urban markets have almost reached a saturation level that further tapping them with a

high profit margin has become difficult. Secondly, competition is becoming tough in urban

markets compelling many firms to incur heavy costs in promotional expenditure. Thirdly,

the awareness level of urban consumers is high and hence product features have to be

changed often. Needless to say this process needs a huge investment which will have a

negative impact on profitability. Thus, except perhaps for easy reach the urban markets

have become as oasis.

Significance of Rural Markets

The rural markets are estimated to be growing fastly compared to the urban markets. The

potentiality of rural markets is said to be like a 'woken up sleeping giant'. These facts are

substantiated in a study of market growth conducted by various researches. In recent years,

rural markets have acquired significance in countries like China and India, as the overall

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

rural communities. On account of the green revolution in India, 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 taken shape. Sometimes, rural

marketing is confused with agricultural marketing the later 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

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consumers.

A number of factors have been recognized as responsible for the rural market boom to

come into existence:

1. Increase in population and hence increase in demand.

2. A marked increase in the rural income due to agrarian prosperity.

3. Standard of living is also increasing in rural areas.

4. Large inflow of investment for rural development programmes from government and

other sources.

5. Increased contact of rural people with their urban counterparts due to development of

transport and wide communication network.

6. Increase in literacy and educational level and resultant inclination to sophisticated lives

by the rural folks.

7. Inflow of foreign remittances and foreign made goods into rural areas.

8. Change in the land tenure systems causing a structural change in the ownership patterns

and consequent changes in the buying behaviour.

9. Rural markets are laggards in picking up new products. This will help the companies to

phase their marketing efforts. This will also help to sell inventories of products out dated in

urban markets.

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

What makes Rural Markets Attractive?

* 742 million people

* Estimated annual size of the rural market

- FMCG Rs. 65,000 Crores

- Durables Rs. 5,000 Crores

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

- 2 / 4 wheelers Rs. 8,000 Crores

* 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)

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

* 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

Opportunities: In Rural Marketing

Infrastructure is improving rapidly.

- In 50 years only 40% villages connected by road, in next 10 years another 30%.

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

connections.- 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

- Number of "pucca" houses doubled from 22% to 41% and "kuccha" houses halved

(41% to 23%)

- Percentage of BPL families declined from 46% to 27%

- 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 Urban Rural Total (% of rural HH)

Shampoo 66.3 35.2 44.2

Toothpaste 82.2 44.9 55.6

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* Marketers can make effective use of the large available infrastructure

- Post offices - 1, 38,000

- Haats (periodic markets) - 42,000

- Melas (exhibitions) - 25,000

- Mandis (agri markets) - 7,000

- Public distribution shops - 3, 80,000

- Bank branches - 32,000

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

- DSCL Haryali stores

- M & M Shubh Labh stores

- TATA/Rallis Kisan Kendras

- Escorts rural stores

- Warnabazaar, Maharashtra (annual sale Rs. 40 crores)

EMERGING TRENDS IN MARKETS

ONLINE RURAL MARKET (INTERNET, NICNET):

Rural people can use the two-way communication through on line service for crop

information, purchases of Agri-inputs, consumer durable and sale of rural produce

online at reasonable price. Farm information online marketing easily accessible in rural

areas because of spread of telecommunication facilities all over India. Agricultural

information can get through the Internet if each village has small information office.

INFORMATION THROUGH LOCAL AGRICULTURE

INPUT DEALERS

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Most of the dealers have direct touch with the local farmers; these farmers need

awareness about pests, decease, fertilizers, seeds, technology and recent developments.

For this information, farmers mostly depend on local dealers. For development of rural

farmers the government may consider effective channel and keep information at

dealers, for farmer education hang notice board and also train the dealer recent changes

and developments in agriculture.

National Chain Stores: large number of stores set up in different rural areas throughout

the country by the same organization for marketing its products. Thus national chain

stores can serve large number of customers in rural area.

COST BENEFIT ANALYSIS

Cost benefit can be achieved through development of information technology at the

doorsteps of villagers; most of the rural farmers need price information of agri-produce

and inputs. If the information is available farmers can take quick decision where to sell

their produce, if the price matches with local market farmer no need to go near by the

city and waste of money & time it means farmers can enrich their financial strength.

NEED BASED PRODUCTION

Supply plays major role in price of the rural produce, most of the farmers grow crops in

particular seasons not through out the year, it causes oversupply in the market and

drastic price cut in the agricultural produce. Now the information technology has been

improving if the rural people enable to access the rural communication, farmers

awareness can be created about crops and forecasting of future demand, market taste.

Farmers can equates their produce to demand and supply, they can create farmers

driven market rather than supply driven market. If the need based production system

developed not only prices but also storage cost can be saved. It is possible now a days

the concept of global village.

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MARKET DRIVEN EXTENSION

Agricultural extension is continuously going through renewal process where the focus

includes a whole range of dimensions varying from institutional arrangements,

privatization, decentralization, partnership, efficiency and participation. The most

important change that influences the extension system is market forces. There is a need

for the present extension system to think of the market driven approach, which would

cater the demands of farmers.

PROCESSING INDUSTRY

India is the second largest producer of fruits and vegetables in the world with an annual

production of more than 110 million tones of fruit and vegetable only 1.3 percent of the

output is processed by the organized sector commercially, the reason higher

consumption in fresh form. However, as the packaging, transportation and processing

capacities increase, the market for processed fruits and vegetables is projected to grow

at the rate of about 20 % per annum. 100 % export oriented units (EOU) and Joint

venture units required improving the processing industry.

APANAMANDI / KISAN MANDI / RYTHUBAZAAR

There is a need to promote direct agricultural marketing model through retail outlets of

farmer's co-operatives in urban areas. The direct link between producers and consumers

would work in two ways: one, by enabling farmers to take advantage of the high price

and secondly, by putting downward pressure on the retail prices.

RURAL AGRI- EXPORT

Rural produce, raw fruits and vegetable, processing goods, have the potential market in

Asian, Europe and western countries. Particularly soudhy countries have commendable

potential for Indian rural produce.

Integrated Marketing

Under this concept, both the supply of inputs and servicing of inputs are undertaken at

the same point or by the same company.

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Classification of Customers

India 1 India 2 India 3

Consuming Class Serving Class Struggling class

Constitutes only 14 % of

the countrys population

Most of these customers

have a substantial

disposable income and

they form part of usually

called as the upper

middle and the lower

middle class

Includes people like

drivers, house hold

helpers, office peons,

liftmen, washer man etc.

These people make life

easier and more

comfortable for the

consuming class or India

1.

Research indicates that for

every India one at least

three India Twos are there,

making up approx. 55 %

of the population but due

to low income they have a

very little disposable

income to spend on

buying aspirational goods

& services .

It lives hand-to-mouth

existence, so can not

afford to even aspire for

good living.

Unfortunately this

segment will continue to

be on the peripheries of

the consumption cycle in

India, in years to come.

Source: Future Group Research, Published in the Book It Happened in India by

Kishore Biyani, 2007 issue.

Emerging Trends in Modern Retail Formats:

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It is difficult to fit a successful international format directly and expect a similar

performance in India. The lessons from multinationals expanding to new geographies also

point to this. For example, Wal-Mart is highly successful in USA but the story is different

in Asian countries like China. Therefore, it is important for a retailer to look at local

conditions and insights into the local buying behavior before shaping the format choice.

Considering the diversity in terms of taste and preferences prevailing in India, the retailers

may go for experimentation to identify the winning format suited to different geographies

and segments. For example, the taste in south is different from that in north and this brings

challenges to the retailers. Therefore, most of grocery retailers are region centric at this

point in time. The available research findings on retail indicate the following trends in

Modern Retail formats:

1) Trial & Error: Now a number of retailers are in a mode of experimentation and

trying several formats which are essentially the representation of retailing concepts

to fit into the consumer mind space. Apart from geography even rural and urban

divide poses different kind of challenge to the retailer. Pantaloon Retail India is

experimenting with several retail formats to cater to a wide segment of consumers

in the market. Some of the new formats are Fashion Station (popular fashion), Blue

Sky (fashion accessories), aLL (fashion apparel for plus-size individuals),

Collection i (home furnishings), Depot (books & music) and E-Zone (Consumerelectronics).

2) Emergence of Wholesale Clubs: Since retailers are trying to segment the

market with the help of formats, they developed another new format in the form of

Wholesale Club to sell a segment of consumers, who purchase on bulk and look out

for substantial discounts and offers. The new format is going to be a kind of

wholesale club which is likely to be located close to Food Bazaar. Consumers who

are interested to purchase on bulk can take benefit from this format. Similarly the

Land mark group also operates multiple formats such as hypermarket (Max),

departmental store (Lifestyle), Shoe mart and Funcity8 etc. Such experimentation

and identification of an appropriate format for the local conditions would separate

winners from losers in India, possibly implying multiple formats could be the

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reality in the long run. Pantaloon Retail India Ltd is a live example of that in Indian

scenario.

3) Increasing Acceptance of Rural Markets: Mall-mania is phenomenal in

India and is spreading fast and entering even the second tier cities in India. Real

estate developers are jumping very fast to take this further from Metro cities to

smaller cities and corporate houses like ITC and Sriram group are making steady

progress to make this phenomena feasible in rural markets as well. There is no

denying that the top notch cities like Mumbai, Delhi, Bangalore, Hyderabad,

Kolkata, Chennai and Pune are leading the way but the second tier cities like

Ludhiana, Chandigarh, Nagpur and Surat are also catching the eye of all retailers.

Retail developers are in such a mood that they may over ride the requirement in a

specific city.

4) Govt. is also promoting the Development of Modern Retail

Formats: Large format malls are increasingly getting prominence with adequate

retail space allocated to leisure and entertainment. Some states like Punjab have

lifted entertainment tax on multiplexes till 2009. This boosted the confidence of the

mall developers to accommodate entertainment players like PVR, Waves, Adlab

and Fun Republic in large malls.

5) Efficient Buying: Increasing Importance of Supermarkets &

Discount Stores:Such a format provides the greatest selection of any general

merchandize and very often serves as the anchor store in shopping mall or shopping

centre. In India, the number of department stores is less as compared to other retail

formats such as supermarkets and discount stores. Shoppers' Stop is the first one to

open a department store in the early 1990s and currently operates 19 stores in 10

different cities in India .The store strongly focuses on lifestyle retailing and mainly

divides into five departments such as apparel, accessories, home dcor, gift ideas

and other services. Shoppers Stop is getting stronger and stronger year after year.

It attracts more than 12 million shoppers every year with a conversion rate of 38 per

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cent. In the end of FY2000 this retailer had 5 stores and is in the process of

reaching 39 stores with retail space of 2,502,747 sq ft by FY08.

Another operator Lifestyle India began operations in 1998 with its first store in Chennai

in 1999 and in March 2006 it opened one of the largest department stores in the same

city. The store spreads over 75,000 sq. ft and store provides customers a great shopping

experience with three floors of apparel, footwear, products for children, household

furniture and decor, health and beauty products.

6) Hypermarkets: The Biggest Crowd Puller: Hypermarkets have emerged

as the biggest crowd pullers due to the fact that regular repeat purchases are a norm

at such outlets. Hypermarkets not only offer consumers the most extensive

merchandise mix, product and brand choices under one roof, but also create

superior value for money advantages of hypermarket shopping. With product

categories on offer ranging from fresh produce and FMCG products to electronics,

value apparels, house ware, do it yourself (DIY) and outdoor products, the

hypermarkets are emerging as one of the popular formats in India.. Number of

players operating hypermarket format are increasing day by day. One of the leading

players in this format is Pantaloon Retail India Limited which operates 32 Big

Bazaars in twenty cities. In early 2006, the K. Raheja Corp (C.L. Raheja Group)

has introduced its value retail concept hyper city which is the countrys largesthypermarket at 118000 sq ft. hyper city Retail plans to open 55 hypermarkets by

2015. As the market is expanding and consumers are in a mood to accept changes,

hypermarkets are getting overwhelming response from consumer. Currently there

are about 40 odd hypermarkets in India but this format holds a great potential for

growth.

7) Customers still rely on traditional concepts: A super market normally

sells grocery, fresh, cut vegetables, fruits, frozen foods, toiletries, cosmetics, small

utensils, cutlery, stationery and Gift items. In India Food World, Food Bazaar,

Nilgiri (30 plus stores), and Adani are the leading super market operators .One of

the biggest super market operators in the western India is Adani Retail Limited

which operates Adani super market plans to continue its journey to reach total 19

cities with the store strength of 60 plus in the state of Gujarat. ARL also plans to

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expand its operation in the neighboring states of Rajasthan, Madhya Pradesh,

Maharashtra and Chhattisgarh.

Subhiksha is one of the leading super market operators, who largely operates in the

southern part of India is expanding to western India. One more retailer Reliance

Retail is on the move and this retailer opened its Reliance Fresh-a super market chain

with 11 stores in Hyderabad in November 2006 and is planning to enter 70 more cities

within 2 years.

8) Emergence of Private-Label Brands: The private labels are offering

flexibility to both the retailer and the consumer on price front. The objective of the

store is to offer variety at affordable price in each category. Food Bazaar have made

the transition from just a grocery retailer to developing emotional bonding with

shoppers by providing some value added services to the shoppers. Some of these

initiatives include : ( Jo Dikhta Hai wo hi Bikta Hai )

Live chakki: which allows customers to buy fresh wheat and have it grinded there

at the store

Fresh Juice counter: This provides customer to have fresh juices.

Live dairy: This provides customers with fresh milk and milk products.

Live kitchen: Customers have the option of buying vegetables, getting themchopped, cooked fully or partly. Soups, salads and sandwiches are also available at live

kitchen.

9) Ease of Shopping & Customized Services: Order of the Day: To

activate it a new format has emerged in the name of Convenience

Store. A Convenience store offers locational advantage to the shoppers and

provides ease of shopping and customized service to the shoppers. It charges

average to above average prices, depending on the product category and carries amoderate number of stock keeping units (SKUs). Normally it remains open for long

hours and shoppers use it for buying fill-in merchandize and emergency purchases.

In India, Convenience stores occupied 23 thousand sq. meter of retail space with

sales of about Rs 1347 million in 2005 and are expected occupy 85 thousand square

meter of selling space by 2010 .

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10) Magnetic Effect: Discounters not Shopkeepers: Wal-Mart, the largest

retailer in the world is a discounter. Practically the discounters offer several

advantages such as lower price, wider assortment and quality assurance. The

discounters like Wal-Mart and Aldi were able to quickly build scale and pass on the

benefits to the consumer. However, in the long run success depends on the

operational efficiency and consistent value delivery to the consumer. The same

retailer Wal-Mart struggles in Asian countries like China but extremely successful

in USA. It is believed that the average Indian consumer is highly price-sensitive

and looks for savings in term of money in their grocery purchase. So price-value

equation is a critical component in most of the grocery purchases.

11) Category Killer: A New Concept imported from U.S.: The category

killer concept originated in the U.S. due to abundance of cheap land and the

dominant car culture. Category Killer is a kind of discount specialty store that

offers less variety but deep assortment of merchandise. By offering a deep

assortment in a category at comparative low prices, category specialist can be able

to kill that specific category of merchandize for other retailers. Generally such

kind of retailers uses a self service approach. They use their buying power to

negotiate low prices, excellent terms and assured supply when items are scarce. In

India this kind of retail stores are not prevalent at this point of time. But there isscope for such kind of format. In India, Mega-Mart is one sort of category killer

which sells apparel products.

12) Dollar Stores: Dollar stores have their roots in America's homey five-and-

dimes, the general stores that offered a range of products at low prices. But modern

dollar-store retailers are having more sophisticated operations; leveraging their

growing buying power to strike special deals with vendors and continuously

striving for unique advantage of both convenience and price. Some chains sell all

their goods at $1 or less. Others offer selected items at higher prices. Most sell a

combination of paper products, health and beauty supplies, cleaning products, paper

and stationery, household goods, toys, food and sometimes clothing. Both private-

label and brand-name goods fill the shelves. They are looking for employing

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technology to manage large distribution networks. Store 99 is the example of it in

Indian Scenario.

13) Retail Development in Rural India: A Market with Silver lining:

Chennai based market research firm Francis Kanoi estimated the size of the rural

market to be INR 1, 08,000 crore annually. During the survey in 2002 the firm took

into account four categories - FMCG, durables, agri-inputs, and two- and four-

wheelers for theirestimation. Rural incomes are growing steadily as well. NCAER

data shows while the number of middle-class households (with annual income

between Rs 45,000 and Rs 2.15 lakh) is at 16.4 million in urban India, the figure

stands at 15.6 million18 in the rural areas, data from. Largely this rural market is

untapped and there is huge opportunity for retailers.

Recent Developments in Rural Retailing: Therefore, in recent times rural

retailing is witnessing explorations by both corporate houses and entrepreneurs ITC's

Choupal Sagar, HLL's project Shakthi and Mahamaza are some of the models being tried

out. At this juncture there is no conclusive evidence of winning rural retail formats

available. However, corporate forays into rural retail are expected to bring more

experimentation and innovation in term of retail format. The Godrej Adhaar, the rural retail

initiative of Godrej Agrovet Ltd operates a chain of 18 stores providing a host of services

to farmers and their families and is planning to set up at least 1,000 stores19 across ruralIndia in the next five years. Apart from Godrej Adhar and Choupal Sagar other formats

operating successfully in the rural area are, M & M Shubh Labh stores, Escorts rural stores,

Tata Kisan Sansar, and Warnabazaar, Maharashtra (annual sale Rs 40 crore).

DSCL Haryali Kisan Bazaar

Hariyali stores keep wide range of product assortments such as fertilizers, pesticides, farm

implements, seeds, animal feed and irrigation equipment among other agriculture related

products. They also have officers who offer free advices to farmers regarding bestagriculture practices. Offering insurance and financial services to farmers is part of the

business. So far, 22 "Hariyali" Stores have been operational in different states across North

India. Farmer response has been extremely encouraging. A centre is attracting 150 - 200

farmers a day. Hariyali Kisaan Bazaar has plans to rapidly scale up the operations & create

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a national footprint covering all the major agricultural markets of the country. Mahindra

& Mahindra Shubh Labh

This is the rural initiative taken by Mahindra & Mahindra group to provide complete

package of products and services related to firm productivity. One of the basic objectives isto establish market linkage and optimize farm produce supply chain. There are about

franchised Shub Labh store established in ten states in India.

14: e-Retailing: The importance of internet retailing is growing all over the world.

Some internet retailers such as e Bay and rediff.com are providing a platform to vendors to

sell their products online and they do not take the responsibility of delivering the product to

buyer. They provide virtual shopping space to the vendors. On the other hand online

retailers like amazon.com and walmart.com have to maintain their warehouse to stock

products and take the responsibility of delivering products to the buyer. So, most of the

brick and mortar stores are entering into online retailing as they have physical

infrastructure and they can use that to capture additional consumer wallet. All the big

retailers like Target, Sears and Kmart are operating online shop and some manufactures

also operate online.

For example Apple Inc. operates through apple.com and Dell Inc. sells its products online

Through dell.com.

In India internet retailing is growing by 29% CAGR and Euro-monitor report estimates that

the a CAGR 48 per cent and in value term it going to touch INR 27 billion by 2010 from

INR 4 billion in 2005. The report also predicts that the contribution of internet retailing to

non-store retailing to is likely to be 46 per cent by 2010.

Emerging recent developments in the Indian Mall Development scenario include the

coming up of so called Gen X Malls and Central which is a Seamless Mall. Gen X

Malls have been defined Chesterton Megharaj as greater than 5, 00,000 sq.ft andincorporate large entertainment area with enough space for parking and excellent

infrastructural benefit that shall be passed on to the retailer . The target audience for

the Gen X malls is tourist /out of town visitor and the person from the city looking for

entertainment options. So, we can say that we are moving from a nation of Dukandars

to a Nation that loves to shop.

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After 1991: This post-economic reform period evidenced both setbacks and progress.

Rural income poverty increased from 34% in 1989-90 to 43% in 1992 and then fell to 37%

in 1993-94. Urban income poverty went up from 33.4% in 1989-90 to 33.7% in 1992 and

declined to 32% in 1993-94 Also, NSS data for 1994-95 to 1998 show little or no poverty

reduction, so that the evidence till 1999-2000 was that poverty, particularly rural poverty,

had increased post-reform. However, the official estimate of poverty for 1999-2000 was

26.1%, a dramatic decline that led to much debate and analysis. This was because for this

year the NSS had adopted a new survey methodology that led to both higher estimated

mean consumption and also an estimated distribution that was more equal than in past NSS

surveys. The latest NSS survey for 2004-05 is fully comparable to the surveys before 1999-2000 and shows poverty at 28.3% in rural areas, 25.7% in urban areas and 27.5% for the

country as a whole, using Uniform Recall Period Consumption. The corresponding figures

using the Mixed Recall Period Consumption method was 21.8%, 21.7% and 21.8%

respectively. Thus, poverty has declined after 1998, although it is still being debated

whether there was any significant poverty reduction between 1989-90 and 1999-00. The

latest NSS survey was so designed as to also give estimates roughly, but not fully,

comparable to the 1999-2000 survey. These suggest that most of the decline in rural

poverty over the period during 1993-94 to 2004-05 actually occurred after 1999-2000.

In summary, the official poverty rates recorded by NSS are:

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Year RoundUniform Poverty

Rate (%)Mixed (%)

Poverty

Reduction per

year(%)

Mixed

Reduction (%)

1977-78 32 51.3

1983 38 44.5 1.3

1987-88 43 38.9 1.2

1993-94 50 36.0 0.5

1999-00 55 26.9

2004-05 61 27.5 21.8 0.8 1.0

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HUL (SHAKTI)

Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer GoodsCompany, touching the lives of two out of three Indians with over 20 distinct categories inHome & Personal Care Products and Foods & Beverages. The companys Turnover is Rs.20, 239 crores (for the 15 month period January 1, 2008 to March 31, 2009).

HUL is a subsidiary of Unilever, one of the worlds leading suppliers of fast movingconsumer goods with strong local roots in more than 100 countries across the globe withannual sales of 40.5 billion in 2008. Unilever has about 52% shareholding in HUL.

Hindustan Unilever was recently rated among the top four companies globally in the list ofGlobal Top Companies for Leaders by a study sponsored by Hewitt Associates, inpartnership with Fortune magazine and the RBL Group. The company was ranked numberone in the Asia-Pacific region and in India.

The mission that inspires HUL's more than 15,000 employees, including over 1,400managers, is to add vitality to life". The company meets everyday needs for nutrition,hygiene, and personal care, with brands that help people feel good, look good and get moreout of life. It is a mission HUL shares with its parent company, Unilever, which holdsabout 52 % of the equity.

Heritage

HULs heritage dates back to 1888, when the first Unilever product, Sunlight, wasintroduced in India. Local manufacturing began in the 1930s with the establishment ofsubsidiary companies. They merged in 1956 to form Hindustan Lever Limited (Thecompany was renamed Hindustan Unilever Limited on June 25, 2007). The companycreated history when it offered equity to Indian shareholders, becoming the first foreignsubsidiary company to do so. Today, the company has more than three lakh residentshareholders.

HULs brands -- like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Sunsilk,Clinic, Close-up, Pepsodent, Lakme, Brooke Bond, Kissan, Knorr, Annapurna, Kwality-Walls - are household names across the country and span many categories - soaps,detergents, personal products, tea, coffee, branded staples, ice cream and culinary products.They are manufactured in over 35 factories, several of them in backward areas of thecountry. The operations involve over 2,000 suppliers and associates.HUL's distributionnetwork covers 6.3 million retail outlets including direct reach to over 1 million.

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HUL has traditionally been a company, which incorporates latest technology in all itsoperations. The Hindustan Lever Research Centre (now Hindustan Unilever ResearchCentre) was set up in 1958.

Doing Well by Doing Good

HUL believes that an organisations worth is also in the service it renders to thecommunity. HUL focuses on hygiene, nutrition, enhancement of livelihoods, reduction ofgreenhouse gases and water footprint.It is also involved in education and rehabilitation ofspecial or underprivileged children, care for the destitute and HIV-positive, and ruraldevelopment. HUL has also responded in case of national calamities / adversities andcontributes through various welfare measures, most recent being the relief andrehabilitation of the people affected by the Tsunami disaster, in India.

Project Shakti was launched in the year 2001 in the Nalgonda district situated inAndhra Pradesh.HULs Project Shakti is a rural initiative that targets small villages

populated by less than 5000 individuals. Through Shakti, HUL is creating micro-enterprise opportunities for rural women, thereby improving their livelihood and thestandard of living in rural communities. Shakti also provides health and hygieneeducation through the Shakti Vani programme.The program now covers 15 states inIndia and has over 45,000 women entrepreneurs in its fold, reaching out to 100,000villages and directly reaching to over three million rural consumers.

HUL also runs a rural health programme, Lifebuoy Swasthya Chetana. The programmeendeavours to induce adoption of hygienic practices among rural Indians and aims to bringdown the incidence of diarrhoea. It has already touched 120 million people inapproximately 50, 676 villages across India.

If Hindustan Unilever straddles the Indian corporate world, it is because of being single-minded in identifying itself with Indian aspirations and needs in every walk of life.

The recruitment of a Shakti Entrepreneur or Shakti Amma (SA) begins with theexecutives of HUL identifying the uncovered village. The representative of thecompany meets the panchayat and the village head and identify the woman whothey believe will be suitable as a SA. After training she is asked to put up Rs 20,000as investment which is used to buy products for selling. The products are then solddoor-to-door or through petty shops at home. On an average a Shakti Amma makesa 10% margin on the products she sells.

It is the association between the company and the self help groups and financial

institutions.

The Shakti Entrepreneur programme creates income- generating capabilities forunderprivileged rural women by providing them with a sustainable micro-enterpriseopportunity.

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* The Shakti Vani programme improves rural quality of life by spreading awarenessof best practices in health and hygiene.

* The iShakti community portal tries to empower rural communities by creatingaccess to relevant information.

Objective of Shakti program

The Shakti entrepreneur program creates livelihood opportunities forunderprivileged rural women.

The Shakti Vani program works to improve the quality of life in rural India, byspreading awareness of best practices in health and hygiene.

They are also studying the consumption habits of the rural people.

HOW IT WORKS

Villages with a population of about 20003000 are selected Personnel from HUL approach SHGs Selection of the Shakti Amma HUL vouches for Shakti Ammas with banks for credit one Shakti entrepreneur

is appointed for one village &

Villages that are about 2 kilometres

apart from her village

(satellite villages ).

The Shakti dealer places initial orders worth Rs. 15,000/(principal customer ofHUL)

Finance : Self+SHG+micro credit Training by the Rural sales promoter.

The Shakti dealer organizes, a Shakti Day in the village (display of products &free gifts ) Core Brands: Lifebuoy, Wheel, Pepsodent, Annapurna salt, Clinic Plus, Lux,

Ponds, Nihar and 3 Roses tea.

Vision 2010

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100,000 Entrepreneurs

500,000 villages

600 million Consumers

Shakti shall reach every home in every village, create sustainable livelihood opportunities,and enhance the quality of life in rural India

Future plans

Project Shakti plans to extend to the states of West Bengal, Punjab and Rajasthan. Partnership with other non-competitor companies to sell their products through the

Shakti network. Nippo, TVS Motor for mopeds, insurance companies for LIC policies.

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ITC E-chupal

ITC was incorporated on August 24, 1910 under the name Imperial Tobacco Company of

India Limited. As the Company's ownership progressively Indianised, the name of the

Company was changed from Imperial Tobacco Company of India Limited to India

Tobacco Company Limited in 1970 and then to I.T.C. Limited in 1974. In recognition of

the Company's multi-business portfolio encompassing a wide range of businesses -

Cigarettes & Tobacco, Hotels, Information Technology, Packaging, Paperboards &

Specialty Papers, Agri-business, Foods, Lifestyle Retailing, Education & Stationery and

Personal Care - the full stops in the Company's name were removed effective September

18, 2001. The Company now stands rechristened 'ITC Limited'.

ITC is one of India's foremost private sector companies with a market capitalisation of

nearly US $ 19 billion and a turnover of over US $ 5 billion.* ITC is rated among the

World's Best Big Companies, Asia's 'Fab 50' and the World's Most Reputable Companies

by Forbes magazine, among India's Most Respected Companies by BusinessWorld andamong India's Most Valuable Companies by Business Today. ITC ranks among India's `10

Most Valuable (Company) Brands', in a study conducted by Brand Finance and published

by the Economic Times. ITC also ranks among Asia's 50 best performing companies

compiled by Business Week.

ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers,

Packaging, Agri-Business, Packaged Foods & Confectionery, Information Technology,

Branded Apparel, Personal Care, Stationery, Safety Matches and other FMCG products.

While 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, Personal

Care and Stationery.

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As one of India's most valuable and respected corporations, ITC is widely perceived to be

dedicatedly nation-oriented. Chairman Y C Deveshwar calls this source of inspiration "a

commitment beyond the market". In his own words: "ITC believes that its aspiration to

create enduring value for the nation provides the motive force to sustain growing

shareholder value. ITC practices this philosophy by not only driving each of its businesses

towards international competitiveness but by also consciously contributing to enhancing

the competitiveness of the larger value chain of which it is a part."

ITC's diversified status originates from its corporate strategy aimed at creating multiple

drivers of growth anchored on its time-tested core competencies: unmatched distribution

reach, superior brand-building capabilities, effective supply chain management and

acknowledged service skills in hoteliering. Over time, the strategic forays into new

businesses are expected to garner a significant share of these emerging high-growth

markets in India.

ITC's Agri-Business is one of India's largest exporters of agricultural products. ITC is one

of the country's biggest foreign exchange earners (US $ 3.2 billion in the last decade). The

Company's 'e-Choupal' initiative is enabling Indian agriculture significantly enhance its

competitiveness by empowering Indian farmers through the power of the Internet. This

transformational strategy, which has already become the subject matter of a case study at

Harvard Business School, is expected to progressively create for ITC a huge rural

distribution infrastructure, significantly enhancing the Company's marketing reach.

ITC's wholly owned Information Technology subsidiary, ITC Infotech India Ltd, provides

IT services and solutions to leading global customers. ITC Infotech has carved a niche for

itself by addressing customer challenges through innovative IT solutions.

ITC's production facilities and hotels have won numerous national and international awards

for quality, productivity, safety and environment management systems. ITC was the first

company in India to voluntarily seek a corporate governance rating.

ITC employs over 26,000 people at more than 60 locations across India. The Company

continuously endeavors to enhance its wealth generating capabilities in a globalising

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environment to consistently reward more than 3,47,000 shareholders, fulfill the aspirations

of its stakeholders and meet societal expectations. This over-arching vision of the company

is expressively captured in its corporate positioning statement: "Enduring Value. For the

nation. For the Shareholder."

Rural market E CHUPAL

Before ITC introduced us to e-Choupal, we were restricted to selling our produce in thelocal mandi. We had to go through middlemen and prices were low. ITC trained me tomanage the Internet kiosk and I became the e-Choupal Sanchalak in my village. Today weare a community of e-farmers with access to daily prices of a variety of crops in India andabroad this helps us to get the best price. We can also find out about many otherimportant things weather forecasts, the latest farming techniques, crop insurance, etc. e-

Choupal has not only changed the quality of our lives, but our entire outlook.

e-Choupal Now

States covered 10

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Villages covered 40,000

No. of e-Choupals 6,500

Farmers e-empowered 4 million

A powerful illustration of corporate strategy linking business purpose to larger societal

purpose, e-Choupal leverages the Internet to empower small and marginal farmers who

constitute a majority of the 75% of the population below the poverty line.

By providing them with farming know-how and services, timely and relevant weather

information, transparent price discovery and access to wider markets, e-Choupal enabled

economic capacity to proliferate at the base of the rural economy.

Today 4 million farmers use e-Choupal to advantage bargaining as virtual buyers

co-operatives, adopting best practices, matching up to food safety norms. Being linked

to futures markets is helping small farmers to better manage risk. e-Choupal has been

specially cited in the Government of Indias Economic Survey of 2006-07, for its

transformational impact on rural lives.The network of 6,500 e-Choupal centres

spread across 40,000 villages has emerged as the gateway of an expanding spectrum of

commodities leaving farms wheat, rice, pulses, soya, maize, spices, coffee, aqua-

products. The reverse flow carries FMCG, durables, automotives and banking

services back to villages

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ITC has continued to build new infrastructure by supplementing the farmgate presence of

e-Choupal with new physical infrastructure rural marketing hubs called Choupal Saagars,

positioned within tractorable distance of 30 e-Choupal centres and their user communities.

The e-Choupal Choupal Saagar hub and spoke combination is unprecedented grassroots

click and mortar infrastructure transporting rural local economies to a new level of

productivity and consumption.

Choupal Saagars offer a combination of services to rural India.

Made-to-design agri-business hubs, they function as:

1. ITC agri-sourcing centres providing farmers a transparent best price sales window,

2. shopping centres bringing a range of products comparable to urban levels of choice,

and

facilitation centres delivering a host of farm-related services training, soil testing, product

quality certification, medical and clinical services, cafeteria and fuel station. 24 Choupal

Saagar hubs are already in operation in 3 states, to grow to 100 by 2010

ITCs strategic intent is to develop e-Choupal as a significant two-way multidimensional

delivery channel, efficiently carrying goods and services out of and into rural India. By

progressively linking the digital infrastructure to a physical network of rural business hubs

and agro-extension services, ITC is transforming the way farmers do business, and the way

rural markets work

e Choupal is an initiative ofITC Limited (a large multi business conglomerate in India) tolink directly with rural farmers for procurement ofagricultural / aquaculture produce likesoybeans, wheat, coffee, and prawns. eChoupal was conceived to tackle the challengesposed by the unique features of Indian agriculture, characterized by fragmented farms,

weak infrastructure and the involvement of numerous intermediaries

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Springboard for competitive farming

The digital and physical infrastructure has a third dimension. It galvanises ITCs constant

agency for propagating adoption of best practices in farming and soil and water

management.

In 2006-07, ITCs unique paid Choupal Khet Pradarshan farm extension service conducted

over 15,000 Field demonstrations in 9 states. This continuous interaction sustains the rising

tide of productivity channeled by the click and mortar infrastructure.

The 1 million tons of wheat sourced by ITC over e-Choupal strategically supporting its

packaged foods business makes e-Choupal robust and open, a successful application of

business logic to serve a larger cause.

Effects of eChoupal

ITC Limited has now established computers and Internet access in rural areas across

several agricultural regions of the country, where the farmers can directly negotiate the sale

of their produce with ITC Limited. The PCs and Internet access at these centres enable the

farmers to obtain information on mandi prices, good farming practices and place orders for

agricultural inputs like seeds and fertilizers. This helps farmers in improving the quality of

produce, and also helps in realizing a better price. Each ITC Limited kiosk having an

access to Internet is run by a sanchalak a trained farmer. The computer housed in the

sanchalaks house is linked to the Internet via phone lines or by a VSAT connection and

serves an average of 600 farmers in the surrounding ten villages within about a 5 km

radius. The sanchalak bears some operating cost but in return earns service fee for the e-

transactions done through his eChoupal. The warehouse hub is managed by the same

traditional middle-men, now called samyojaks, but with no exploitative power due to the

reorganised role. Indeed these middlemen make up for the lack of infrastructure and fulfill

critical jobs like cash disbursement, quantity aggregation and transportantion.

Due to the eChoupal services, farmers have seen a rise in their income levels because of

rise in yields, improvement in quality of output and a fall in transaction costs. Even small

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farmers have gained from the initiative. Customized and relevant knowledge is offered to

the farmers despite heterogeneous cultures, climates and scales of production. Farmers can

get real-time information despite their physical distance from the "mandis". The system

saves procurement costs for ITC Limited. The model is quite different from the other

models, as the farmers do not pay for the information and knowledge they get from

eChoupals. The principle of the eChoupals is to inform, empower and compete. At the

same time ITC Limited also has extracted value in four steps to make the model sustainable

and scalable:

1. elimination of non-value added activities

2. differentiated product through identity preserved supply chains

3. value added products traceable to farm practices4. e-market place for spot transactions and support services to futures exchange

One of the factors leading to eChoupal's success is ITC's managerial expertise in executing

complex projects and managing costs. ITC Limited adopted a flexible project management

approach called "roll out, fix it, and scale up" to deal with uncertainties in a pioneering

model.

There are 6,500 eChoupals today. ITC Limited plans to scale up to 20,000 eChoupals by2012 covering 100,000 villages in 15 states, servicing 15 million farmers.

Critical problem

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Mission Sunehra Kal, ITCs rural capacity building programme, now

active in 11 States, empowers rural communities to adopt

sustainable changes that make them economically competitive and socially secure.

In the rural communities where the mission has put down roots there is a new spirit of

optimism and confidence. People have augmented and diversified their livelihoods.

Education for children, employment for women, sanitation and family health have taken on

a new urgency. Every family and every farm has resources to build a better future.

Stagnation and deterioration have given way to change and improvement.

To accomplish this change, ITC targets four problems, which it believes are the

fundamental obstacles to productivity and growth in the farm sector :

1. Loss of productivity through soil erosion caused by intensification of land use and

decline of water tables and forest resources.

2. Dependence on out-moded farm practices and inferior inputs.

3. Loss and disruption of farm incomes and non-availability of alternative livelihoods.

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ITCs mission is to build community based capacity to remove these

adverse conditions

and create the basis for renewed agrarian prosperity:

help farmers to achieve higher farm productivity,

enable communities to develop and manage water, soil and forest resources for long

term ecological security,

empower rural men and women by creating new non-farm livelihoods,

facilitate development of infrastructure for primary education, health

ITC enables farmers to implement solutions that are sustainable because they are

1. mutually reinforcing,

2. based on knowledge transfer and co-operative application of technology,

3. dependent on mobilisation and optimisation of local resources.

The delivery model mobilises a four-way partnership between village communities,

specialist NGOs, the Government and ITC, bringing to every initiative the best relevant

management and technical expertise.

ITC has also worked with State Governments in pioneering public-private partnerships. In

Andhra Pradesh, 3,596 hectares of wasteland have been developed so far through a

collaboration with the State Governments rural poverty reduction project, Indira Kranthi

Padham, and its Comprehensive Land Development programme. ITC has also signed a

landmark agreement with the Government of Rajasthan to bring 5,000 hectares under soil

and moisture conservation in the drought-prone Bhilwara district.

By augmenting water resources and forest cover and fostering organic soil management,ITC has enhanced farm productivity. It has simultaneously opened up new avenues of non-

farm income and employment to reduce pressure on land.

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Godrej AadharGodrej Group is one of the largest conglomerates based in Mumbai, India, involved in

various industries that include appliances, precision equipment, machine tools, furniture,

healthcare, interior solutions, office equipment, food-processing, security, materials

handling and industrial storage solutions, construction and information technology. Its

products include security Systems and Safes, Typewriters and Word processors, Rocket

Launchers, Refrigerators and Furniture, Outsourcing Services, Machine Tools and Process

Equipment, Cosmetics and Detergents, Engineering Workstations, Medical Diagnosticsand Aerospace Equipment, Edible Oils and Chemical, Mosquito Repellents, Car perfumes,

Chicken and Agri-products, Material Handling Equipments Like FORKLIFT Trucks,

Stackers, Tyre handlers, Sweeping machines, access equipments etc. The Group is headed

by Mr. Adi Godrej & Mr. Jamshyd Godrej.

Traditionally, Vikhroli, a suburb to the Northeast of Mumbai has been Godrej's

manufacturing base, but increasingly the group have moved significant production facilities

away from Mumbai. The Godrej group also owns vast land in Vikhroli, occupying 3500

acres (14 sq km) of land on both sides of the Vikhroli section of the LBS marg. That makes

the Godrej group the biggest private land owner in Mumbai by far[citation needed]. Such vast

land can, in theory, be used to create at least 1500 acres of residential floor space, which, at

very modest rates (Rs.10000/sq ft), can be sold for USD 16 billion . Thus, the Godrej group

is sitting on an invisible cashpile that is envy of other Indian conglomerates.

Aadhar Retailing

agri-services to direct sourcing from farmers, Aadhar Retailing is now getting into the

business of output management with farmers across the country. With the Future Group

owing a 70 per cent stake in Godrej Aadhar, the newly formed company, Aadhar, would

now serve as a procurement hub for the Future Groups retail formats such as Food Bazaar

and KBs Fair Price and even become supplier to other retailers across the country.

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Mr Arvind Chaudhary, Chief Executive Officer, Aadhar Retailing, toldBusiness Line, We

have now started buying the farmers produce and getting into the business of output

management. With the intention of selling the farmers produce to other retailers, we would

be adding one crop after another and help them in managing their produce, stated Mr

Chaudhary.

Reaching out to 50,000 farmers every month, the company has already employed 300

people to directly access the produce of farmers across 2,000-odd villages in the country.

The States where farmers are being approached include Punjab, Haryana, Maharashtra and

Gujarat.

With the Future Groups cash-and-carry format on the backburner, sourcing from farmers

and helping them sell their produce to other retailers is being seen as an extension of the

same format by analysts.

Not wanting to be compared with ITCs e-Choupal, Aadhar Retailing believes it would

operate in the business of providing solutions for farmers. We would operate on a

different model from e-Choupal as we would be advising farmers on what to produce and

giving services such as soil testing and weather prediction facilities. The purpose is to

become a one-stop-shop in the rural areas, says Mr Chaudhary.

Fresh inputs

Meanwhile, the existing 66 Godrej Aadhar outlets would also be stocking the Future

Groups private labels and financial products to extend its current portfolio. New brands

such as Koryo (for consumer durables) and food brands such as Tasty Treat and Fresh N

Pure would be making an appearance at the Aadhar outlets.

Besides, with the Future Group having forged strategic alliances with players such as

GlaxoSmithKline to develop the Gopika brand of ghee, its outlets would also see the brand

making an appearance at Aadhar outlets. Financial products, such as insurance-based

products of Future Generalli, would also get sold at the outlets.

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Besides, there is also a possibility of the Future Card (the Future Groups loyalty cum

credit card) being introduced.

Corporate details

Adi Godrej is the current Chairman of the Godrej Group. Godrej & Boyce Mfg. Co. Ltd. is

headed by Mr. Jamshyd Godrej. The Group revenue was approximately US$ 1.7 billion in

financial year 06/07. Godrej Interio is the flagship company of the group.

The Godrej group can be broadly divided into two major holding companies, working

independently:

1. Godrej Industries Ltd.

2. Godrej & Boyce Mfg. Co. Ltd.

The Major Companies, subsidiaries and affiliates are

Chemical & Commodities

Godrej Industries

Chemicals

Veg Oils

FMCG

Godrej Consumer Products

Keyline Brands UK

Rapidol South Africa

Godrej Global Mideast FZE

Godrej SCA Hygiene Limited

Godrej Hershey Foods & Beverages Limited

Nutrine

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Godrej Sara Lee

AGRI

Godrej Agrovet

Animal Feeds

Goldmohur Foods and Feeds

Golden Feed Products

Higashimaru Feed Products

Oil Palm

Agri Inputs

Godrej Aadhaar

Nature's Basket

Integrated Poultry Business

Plant Biotech

Services

Godrej HiCare (Pest Management Services) Godrej Global Solutions (ITES)

Godrej Properties

Achievement

In 1897, Godrej Introduced the first lock with lever technology in India.

In 1902, Godrej made the first Indian safe.

In 1920, Godrej made soap using vegetable oil, which was a huge hit with thevegetarian community in India

In 1955, Godrej produced India's first indigenous typewriter

In 1989, Godrej became the first company to introduce PUF ( Polyurethane Foam)

Introduced India's first and only 100% CFC, HCFC, HFC free refrigerators

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Godrej Agrovet

Godrej Agrovet (GAVL) is a diversified agribusiness company with interests in animal

feed, oil palm plantations, agrochemicals and poultry.It is headquartered at Vikhroli,

Mumbai India. The business was set up in 1971. GAVL today has 45 manufacturing

facilities across India, a network of over 10,000 rural distributors, dealers & agents and

over 1900 employees committed to improving the lives of Indian farmers. The

company has a presence in 21 states.Under the guidance of Chairman, noted

industrialist Nadir Godrej and its Cheif Executive Officer Balram Singh Yadav , GAVL

today occupies the position of India's largest animal feed company, producing over

750,000 tons of nutritionally balanced feed for diary cattle, poultry & aquaculture

every year.

Its oil palm plantation business is the market leader in India, with over 35,000 hectares of

smallholder cultivation across Andhra Pradesh, Karnataka, TamilNadu, Orissa, Goa,

Gujarat & Mizoram.

With the intend of radically improving farmer economics, the agrochemicals

business focuses on innovative and environmentally sensitive products.It has

dominant market share in plant growth promoters & soil conditioners.

GAVL has introduced fresh, chilled chicken to Indian consumer over the past decade, and

now has a 20% market share in processed poultry. Its Real good chicken brand is the

best known fresh poultry product in India, with a consumer loyalty about 80%.

The Rs 900 crore Godrej Agrovet Ltd, a unit of the $1 billion Godrej Industries Ltd, will

open 1,000 'hub-and- spoke' centres in rural and semi-urban areas across the country in the

next five years.

These centres will also provide technical services like farm management, soil micro-

nutrient analyses to farmers. The hub would cover about 10,000 sq ft and spoke 3,000 sq ft,

each costing about Rs 75 lakh and Rs 30 lakh respectively.

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These outlets will sell agro-products like seeds, pesticides, fertilisers and grocery, apparel,

footwear, home appliances, furniture and kitchen appliances. It will also house banks,

insurance offices, pharmacies, post offices and petrol pumps.

R S Vijan, executive vice-president, Godrej Agrovet, said: "We have decided to expand in

rural and semi-urban markets. We will open 100-120 stores in the country in this financial

year and these centres would be funded and managed by the company itself."

Godrej Agrovet posted a turnover of Rs 900 crore in 2005-06 and is expecting revenues of

Rs 3,500-4,000 crore from these stores in the next five years.

At present, it has 24 Aadhaar centres in Maharashtra, Punjab, West Bengal, Orissa and

Tamil Nadu. It has earmarked Rs 750 crore to train technical and marketing staff.

Godrej Agrovet is a key player in the farm segment with a large presence in cattle and

poultry feed. It covers the whole spectrum of poultry business -- from breeding and

hatching broilers to the marketing of its branded chicken. The company also has foothold

in animal feeds, agricultural inputs and palm oil, and retail presence in urban areas through

Nature's Basket. The animal feed segment constitutes about 75% of the company's

revenues; almost 10% comes from poultry and the remaining from the rest of the

businesses.

Recently, the firm signed a deal with Apollo Pharmacy, part of the Apollo Hospitals group

and the country's largest retail pharmacy chain, to give medical support to the farming

community.Earlier in January, in a bid to strengthen its hold on the farmer, Godrej Aadhaar

had launched two new formats. The large format stores have been opened at Mancher and

Alephata on the Pune-Nashik highway in Maharashtra, taking the Aadhaar tally to 18

nationally.

To increase its rural reach, Godrej Agrovet, which set up Aadhaar a year ago, is now

moving away from being a standalone outlet to hub and spoke model.

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Aadhaars Structure

(Agri. section)

Store In-Charge (S I)

Technical Service Incharge (T S I)

Field Service Assistance (F S A)

Farmer (Target Customer)

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Benefit of Multinational companies in Rural Market

RURAL INDIA with its traditional perceptions has grown up over the years, not only in

terms of income, but also in terms of thinking. The rural markets are growing at about two

time faster pace than urban markets, not surprisingly, rural India accounts for 60 per cent of

the total national demand.

According to a survey conducted by Mckinsey in 2007, rural India with a population of 630

million (approximately) would become bigger than total consumer market in countries such

as South Korea or Canada in another 20 years and it will grow at least four times from its

existing size.

Gone are the days when rural consumer went to nearby city to buy branded products andservices. The rural consumer is growing and this is an opportunity to grab the market share

for all the global players in the market -- whether it is into Fast Moving Consumer Goods

(FMCG) sector or retail sector (either insurance or banking or for that sake any other

sector).

The FMCG sector includes companies like Indian Tobacco Corporation (ITC), Godrej,

Hindustan Lever Limited (HLL), Gujarat Cooperative Milk Marketing Federation

(GCMMF-Amul) and Dabur India Limited. All these have shown a strong global presence

in the rural sector and it can be said that all the FMCG companies should target the rural

sector.

Some FMCGs products like toothpaste, hair oil and other like shampoos have done much

better in the rural areas than the urban and the semi urban areas. It has been a phenomenon

that the sales of many companies have gone up; Coca-Cola, Nestle and Godrej too have

also reported better sales in rural areas.

The retail sector has a huge potential for growth as a study shows that opportunities in rural

retail sector were estimated to be over $34 billion in the year 2007, which is expected to

touch $43 billion by the year 2010. It can be seen from the market that companies like

Reliance, Subhiksha are expanding in the rural market. ITC has launched its first rural mall

Chaupal Sagar, which offers products ranging from FMCG to electronic appliance to

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automobiles. Indian Oil is planning to invest $ 189.10 in the rural areas during the financial

year 2009.

Insurance sector has one of the biggest potential in the upcoming scenario and the fact lies

in the statement that only eight to 10 per cent of the rural households are covered by life

insurance. Rural investments are limited to their available option -- post offices and a few

limited commercial banks rural extension counters. The remaining 90 per cent offer a huge

potential as such for the insurance companies. The rural market is vibrant and holds

tremendous potential for growth of insurance business, particularly because of the strong

saving habits. LIC has a target of selling four million policies in the current financial year.

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OBJECTIVE

OBJECTIVE

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"Any task without sound objectives is like Tree without roots". Similarly in case of any

research study undertaken, initially the objectives of the same are determined and

accordingly the further steps are taken on. A research study may have many objectives but

all these objectives revolve around one major objective which is the focus of the study. In

this study, the focus is on the emergence of Rural markets as the most happening market on

which every marketer has an eye. And so this study will be based on studying the

emergence of rural market in various contexts.

The following are the objectives of this research study :-

To study the emergence of Rural markets in the context of India.

To study the present scenario of rural marketing in India.

To study the future prospects of rural markets and their scope for the MNCs and

Indian companies, in India.

To study the challenges faced by rural marketers in India.

To study the reasons of popularity of rural markets in India.

To measure the success of rural marketing campaign of few brands in Terms of

consumer appreciation.

To study the determinants of specification factors which can decide the success the

rural promotion strategy.

To evaluate the effects of adopting the specific brand ambassadors in the rural

marketing context.

.

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Chapter 2

RESEARCHMETHODOLOGY

&

DESIGN

RESEARCH METHODOLOGY

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RESEARCH METHODOLOGY

Research Methodology is a way to systematically solve the research problem. In it we studythe various steps that are generally adopted by a researcher in studying his research problemalong with logic behind them.

TYPE OF RESEARCH-

To Study on emerging trend in modern retail format. I have gone through various news papers, magazines, websites and collected information and data. And my study based onexploratory research.

DATA COLLECTION :-

In data collection method we shall collect the secondary data from the following sources.

News paperMagazineInternet

PARAMETERS OF RESEARCH

Business processServiceSatisfaction

RESEARCH DESIGN :

The study is a cross sectional study because the data were collected from many sources. Forthe purpose of present study a related sample of population was selected on the basis of

convenience.RESEARCH INSTRUMENT:

This work was carried out through Secondary data based.

TOOLS TO BE USED:

MS Excel

MS word

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Chapter 3

RESEARCHFINDINGS

FINDINGS

There are very big opportunity in rural market thats why many big giants are move to rural

market .they made serious efforts to tap the potential ,initially, innovation were confined to

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product or services offering, or to packaging (SKUs),price (point) and communication

strategy by brands.

Companies are concentrated on low cost product

5 Rs product are very famous in rural market

They use communication in local medium ( folk media ,haats,melas)

They make small size /quantity products for rural India

There are a change in rural people lifestyle.

Rural peoples are aware with urban market.

Lots of job opportunities are coming in rural market.

Growth of employment .

Rural people are aware with information technology with help of these Companies.

Farmers are benefited with ITC E chupal & Godrej Aadhar & hul shakti .

Increase the productivity of rural India.

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Chapter 4

CONCLUSION

CONCLUSION

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Marketers make consistent attempt to innovate tools and strategy to overcome the

challenges they face in the business arena .business innovation are broadly classified under

two heads ,namely product/service innovation and process innovation .marketers need to

design creative solution to overcome challenges typical of the rural environment such as

physical distribution channel management and promotion and communication.

Corporate India and govement bodies alike have made several efforts to bridge the gap

between rural and urban India .the ICT-drive value chain and the organized retail format

have been found to be the best innovation for rural India.

ITC e-Choupal, Godrej Aadhar & HUL Shakti, an innovative strategy which is elaborative

and extensive in rural markets so far. Critical factors in the apparent success of the venture

are they provide extensive knowledge of agriculture, the & has made to retain many

aspects of the existing production system, including retaining the integral importance of

local partners, the companies commitment to transparency, and the respect and fairness

with which both farmers and local partners are treated.

The concepts, which are becoming more important in every market, include color, product

attractiveness visibility, and display quality. In addition, availability (meeting local demand

by increasing production locally), acceptability (building brand equity), and affordability

(pricing higher than local brands, but adapting to local conditions) are the key factors.

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Chapter 5

LIMITATIONS

LIMITATIONS

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Problems related to rural marketing

Barter system.

Underdeveloped people and underdeveloped markets

Lack of proper physical communication facilities.

Many language and Dialects.

Dispersed population and trade.

Poor road connectivity.

poor availability of dealers.

low destiny of shops per village and high variation in their concentration.

poor storage system,leading to inadequate stocking .

Inadequate Media coverage for rural communication.

Highly credit driven market and low investment capacity of retailers.

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Chapter 6

SUGGESTION

SUGGESTION

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PRICING

Pricing is the major element for rural marketing so cheaper price product are affordable for

rural people.

IMPROVEMENT IN TECHNOLOGY

Technology is the major part of the rural area without nothing is possible

through media and electrification we improve the lifestyle of rural people.

MAINTAIN THE QUALITY STANDARD

Quality standard is also very important part of rural market because some people are

quality oriented customer.

ESTABLISHMENT OF DISTRIBUTION CHANNELS

Rural market certainly offer a big attraction to marketers, it would be nave to think that

any company can enter the market without facing any problem and walk away with sizable

share .but there are large number of small marketers .

Make a good distribution channel.

Underdeveloped people and underdeveloped markets

Lack of proper physical communication facilities so trained people.

Make an opinion leader for every village.

Increase the communication strategy in villages

Many language and Dialects

Make the idol distribution channel in the villages .

Improve the electrification in the villages.

Provide the training program for rural people.

Motivate to increase investment capacity of retailers.

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REFERENCES

BIBLIOGRAPHY

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BOOKS:

Marketing Research Paneerselvam

Research Methodology C.R Kothari

Principles of Marketing Philip Kotler

Rural Marketing -Pradeep kashyap

WEB RESOURCES:

www.godrej.com

www.google.com

www.hul.co.in

www.itcportal.com

MAGAZINE:

Outlook Express

Business today

Money Outlook

NEWS PAPER:

Business standard

Times of India

Economic times