•

Project Report
On
EMERGING TREND IN MORDEN RETAIL FORMAT
WITH SPECIAL REFERENCE TO HUL (SHAKTI), ITC
(E-CHAUPAL) & GODREJ (ADHAAR)

SUBMITTED TO- SUBMITTED BY-

DR. R. K. JAIN RAVI SONI

 KSHIPRA JOSHI

ABSTRACT

The field of Rural marketing has taken a giant leap at the threshold of twentieth century.
Rural marketing have become an booming sector in all over the globe. The proverb
‘Need is the mother of invention’ is proving equally correct in case of Rural marketing.
Rural marketing have already had a considerable impact on many aspects of our society.
This Project on
“EMERGING TREND IN MORDEN RETAIL FORMAT WITH SPECIAL

REFERENCE TO HUL (SHAKTI), ITC (E-CHAUPAL) & GODREJ (ADHAAR)

Deals with the automation of various activities done in Rural marketing like how the
Rural marketing spread his business and what is the Market strategy and what is supply
chain Management applied by HUL (SHAKTI) & ITC (e-chupal) GODREJ (Aadhar) in
Rural marketing.
 ACKNOWLEDGEMENT

We am hearty grateful to D r. R .K . jain . H e has alw ays been an

in v alu abl e s ource of ins piration.

I t g iv es me immens e pleas ure in submitt ing this project on “ EMERGING

TREND IN MORDEN RETAIL FORMAT WITH SPECIAL REFERENCE TO
HUL (SHAKTI), ITC (E-CHAUPAL) & GODREJ (ADHAAR)

We h ave developed this project in partial fulfillment of M .B .A . fro m

ME D I CA PS I NS T I T U T E OF T E C HN OL OGY AN D MAN A GE ME N T

We w ould like to expres s my s incere thanks to my P roject G uide D r .

R . K . J ain for her cons tant guidance and valuable s upport during th e
p r o ject w ork and als o for her Encouragement and excellen t guidance in
th e s u cces s ful completion of the project work.

A n d o f cours e nothing could have come true w ithout the support of my

f amily , and friend’s cons tant encouragement and us eful tips through ou t
my p r oject. I w ill alw ays be grateful to all of them.
 DECLARATION

We here by declare that this Project Report titled “EMERGING TREND IN

MORDEN RETAIL FORMAT WITH SPECIAL REFERENCE TO HUL
(SHAKTI), ITC (E-CHAUPAL) & GODREJ (ADHAAR)” is the result of my own
effort of my study which I did as a part of the curriculum, for the fulfillment of M.BA. It
has not been duplicated from any other earlier works and all information provided in this
report is genuine.
 CONTENTS

Chapter 1. Introduction & Background

1.1 Objective of the Project

1.2 Company Profile

Chapter 2. Research Methodology & Design

Chapter 3. Research Findings

Chapter 4. Conclusion

Chapter 5. Limitations

Chapter 6. Suggestion

References
Books
Web sources
 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 contend
that 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 behaviors.

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 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) 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

* CTV 30.4 4.8 12.1
* Refrigerator 33.5 3.5 12.0

FMCGs Urban Rural Total

* Shampoo 66.3 35.2 44.2

* Toothpaste 82.2 44.9 55.6
* 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
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.
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.
 OBJECTIVE

"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 measure the success of rural marketing campaign of few brands in Terms of
consumer appreciation.
♦ To understand the working process of HUL(sakti), ITC(e-choupal), GODREJ
(aadhar).
 HUL (SHAKTI)

Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods
Company, touching the lives of two out of three Indians with over 20 distinct categories
in Home & Personal Care Products and Foods & Beverages. The company’s 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 world’s leading suppliers of fast moving
consumer goods with strong local roots in more than 100 countries across the globe with
annual 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
of “Global Top Companies for Leaders” by a study sponsored by Hewitt Associates, in
partnership with Fortune magazine and the RBL Group. The company was ranked
number one in the Asia-Pacific region and in India.

The mission that inspires HUL's more than 15,000 employees, including over 1,400
managers, 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
more out of life. It is a mission HUL shares with its parent company, Unilever, which
holds about 52 % of the equity.

Heritage

HUL’s heritage dates back to 1888, when the first Unilever product, Sunlight, was
introduced in India. Local manufacturing began in the 1930s with the establishment of
subsidiary companies. They merged in 1956 to form Hindustan Lever Limited (The
company was renamed Hindustan Unilever Limited on June 25, 2007). The company
created history when it offered equity to Indian shareholders, becoming the first foreign
subsidiary company to do so. Today, the company has more than three lakh resident
shareholders.

HUL’s 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 the country. The operations involve over 2,000 suppliers and associates.HUL's
distribution network covers 6.3 million retail outlets including direct reach to over 1
million.
HUL has traditionally been a company, which incorporates latest technology in all its
operations. The Hindustan Lever Research Centre (now Hindustan Unilever Research
Centre) was set up in 1958.

Doing Well by Doing Good

HUL believes that an organisation’s worth is also in the service it renders to the
community. HUL focuses on hygiene, nutrition, enhancement of livelihoods, reduction of
greenhouse gases and water footprint.It is also involved in education and rehabilitation of
special or underprivileged children, care for the destitute and HIV-positive, and rural
development. HUL has also responded in case of national calamities / adversities and
contributes through various welfare measures, most recent being the relief and
rehabilitation of the people affected by the Tsunami disaster, in India.

Project Shakti was launched in the year 2001 in the Nalgonda district situated in Andhra
Pradesh.HUL’s 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 the standard of
living in rural communities. Shakti also provides health and hygiene education through
the Shakti Vani programme.The program now covers 15 states in India and has over
45,000 women entrepreneurs in its fold, reaching out to 100,000 villages and directly
reaching to over three million rural consumers.

HUL also runs a rural health programme, Lifeboy Swasthya Chetana. The programme
endeavours to induce adoption of hygienic practices among rural Indians and aims to
bring down the incidence of diarrhoea. It has already touched 120 million people in
approximately 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 the
executives of HUL identifying the uncovered village. The representative of the
company meets the panchayat and the village head and identify the woman who they
believe will be suitable as a SA. After training she is asked to put up Rs 20,000 as
investment which is used to buy products for selling. The products are then sold door-
to-door or through petty shops at home. On an average a Shakti Amma makes a 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 for

underprivileged rural women by providing them with a sustainable micro-enterprise
opportunity.
• The Shakti Vani programme improves rural quality of life by spreading awareness of
best practices in health and hygiene.

• The Shakti community portal tries to empower rural communities by creating access to
relevant information.

OBJECTIVE OF SHAKTI PROGRAM

• The Shakti entrepreneur program creates livelihood opportunities for

underprivileged rural women.

• The Shakti Vani program works to improve the quality of life in rural India, by
spreading 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 2000–3000 are selected

• Personnel from HUL approach SHGs
• Selection of the Shakti Amma
• HUL vouches for Shakti Ammas with banks for credit
• one Shakti entrepreneur

• The Shakti dealer places initial orders worth Rs. 15,000/(principal customer of
HUL)
• 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: Lifeboy, Wheel, Pepsodent, Annapurna salt, Clinic Plus, Lux,
Ponds, Nihar and 3 Roses tea.
VISION 2010

• 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.
 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 and
among 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.
 Rural market E –CHUPAL

Before ITC introduced us to e-Choupal, we were restricted to selling our produce in the
local mandi. We had to go through middlemen and prices were low. ITC trained me to
manage the Internet kiosk and I became the e-Choupal Sanchalak in my village. Today
we are a community of e-farmers with access to daily prices of a variety of crops in India
and abroad – this helps us to get the best price. We can also find out about many other
important 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

Villages covered 40,000

No. of e-Choupals 6,500

Farmers e-empowered 4 million

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 India’s 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.

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.

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.

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.

ITC’s 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
Effects of e-Choupal

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 sanchalak’s 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 reorganized role. Indeed these middlemen make up for the
lack of infrastructure and fulfill critical jobs like cash disbursement, quantity aggregation
and transportation.

Because 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 cost. Even
small 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 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 practices.
4. 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.

FUTURE PLAN

There are 6,500 eChoupals today. ITC Limited plans to scale up to 20,000 eChoupals by
2012 covering 100,000 villages in 15 states, servicing 15 million farmers.

MISSION

ITC’s 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.
GODREJ AADHAR
Godrej 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
Diagnostics and 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 has 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.
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 Group’s retail formats such as Food
Bazaar and KB’s Fair Price and even become supplier to other retailers across the
country.

Mr Arvind Chaudhary, Chief Executive Officer, Aadhar Retailing, told Business 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 Group’s 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.

FRESH INPUTS

Meanwhile, the existing 66 Godrej Aadhar outlets would also be stocking the Future
Group’s 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.

Besides, there is also a possibility of the Future Card (the Future Group’s loyalty cum
credit card) being introduced.
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.

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 centers 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.
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.

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.

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.
Gone are the days when rural consumer went to nearby city to buy ’branded products and
services’. 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 automobiles. Indian Oil is planning to invest $ 189.10 in the rural
areas during the financial year 2009.
 RESEARCH METHODOLOGY

RESEARCH METHODOLOGY

Research Methodology is a way to systematically solve the research problem. In it we study

the various steps that are generally adopted by a researcher in studying his research problem
along 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 on
exploratory research.

DATA COLLECTION:-

In data collection method we shall collect the secondary data from the following sources.
News paper
Magazine
Internet

PARAMETERS OF RESEARCH

Business process
Service
Satisfaction

RESEARCH DESIGN:
The study is a cross sectional study because the data were collected from many source’s. For
the 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

FINDING’S
There are very big opportunity in rural market that’s why many big giants are move to
rural market .they made serious efforts to tap the potential ,initially, innovation were
confined to 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 changes 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.
 CONCLUSION

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 government 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.

LIMITATIONS

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.

SUGGESTION
 PRICING
Pricing is the major element for rural marketing so cheaper price product is 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 naïve 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.

BIBLIOGRAPHY

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