Customer Perception on FMCG Products in Rural Market

Counterfeit products are fake products that bear identical name of product/ packaging/graphics/colour scheme and even same name and address as the genuine manufacturer.

Someone produces these to look exactly like real products other than the legal owner of the real products, trademarks and product packaging. Sometimes it is becoming more and more difficult to tell which is the real "Ponds" talcum powder and "Clinic Plus" shampoo from the fake products. Pass-off products use similar sounding or are similar in spelling (for example "Luk" for "Lux", "510" for "501", "Saveena" for "Sabeena", "Sun Max" or "Super Master"). They use similar type of packaging or color or designs. They come out with the motive of misleading and cheating ordinary consumers who are uneducated or in a hurry in purchasing products.

A study conducted by AC Nielson, a research agency reveals that FMCG industry loses around 2500 crores annually to counterfeits and pass-off products. According to Ashok Chhabra, Executive Director, P&G the fake products are affecting the sales of leading brands to the extent of 20 to 30 percent. Another recent survey conducted by AC Nielson reveals that top brands in India are estimated to lose up to 30 percent of their business to fake products. Besides the loss of revenue, the leading companies also face the loss in the damage to brand image and brand loyalty of consumers.

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Laws Governing Following are the laws under which legal action can be taken against manufacturers and sellers of fake products:

1. Indian Penal Code 1860
2. Drugs and Cosmetics Act, 1940
3. Prevention of Food Adulteration Act, 1954
4. Consumer Protection Act, 1986
5. Bureau of Indian Standards Act, 1986
6. Trademarks Act, 1999

The rural consumers by looking into the ads of leading chocolate companies unknowingly purchase the fake chocolate brands because of their impulses. Hence, the researcher has conducted a survey in the petty shops in rural areas to find out the fake chocolates available.

1. List of Fake Chocolates/Toffees available in rural areas:
2. Dairy Milk
3. Kit Kat:Kir Kat
4. Coffee Bite:Coffee Toffee
5. Mango Bite:Mango Ripe and mango bite
6. Aasai:Aasha
7. Polo:Rolo
8. Vicks: Vibex

It has been found out that fake chocolates and toffees are available in more number of petty shops for the leading brands. Strategies for Chocolate/Toffee Companies in Rural Marketing (to kill fake brands).

Product: Without compromising on quality, the leading chocolate companies can reduce their size to match the rural demand.

Pricing: As the rural consumers are bothered about economy pricing the leading chocolate companies can follow the strategy of "penetration pricing"

Physical Distribution: Sales professionals of the local region who have familiarity in the local (regional) language can be appointed to look after the sales of rural areas, so that they can easily converse with the retailers and can build goodwill. Fake brands exist in rural as well as urban locations. But the problem is more acute in rural areas especially the deep pockets which are less accessible and people have very little knowledge about the original brands.

Most people in rural India can recognize alphabets but not complete words, so during a research, we found a whole lot of samples of fake Clinic Plus shampoo sachets where the visual was similar to the original brand but the name was changed to ‘Clinton’ as Bill Clinton was to arrive soon in the country. During another such raid, we collected about 99 variants of Fair&Lovely cream including Fair&Lonely, Far & Lovely etc. ”, said Mr. Pradeep Kashyap, president, Rural Marketing Association of India (RMAI) and CEO, MART while sharing an interesting incident in past.

The Indian rural landscape being scattered in smaller villages, gaining access in all of them is a tedious task for brands. Also, most of the FMCG brands have not been able to set up an efficient distribution network in such areas. The local entrepreneurs are well aware of these challenges. Hence, take advantage by manufacturing cheap substitutes of original brands, misleading the rural consumers. These manufacturers have an advantage of being local and thus reach the shops before the original brands do. Such counterfeits piggy back on huge marketing budgets of FMCG companies.

The rural consumers are aware of the brand owing to ads broadcasted on radio & television channels. But on time of purchase, the consumers tend to pick their fake counterparts due to unavailability of original product or get fooled by the retailers who on purpose sell cheap products for higher margins. Over the time the share of fake products in the FMCG market has grown to 10- 15% causing a deep hole in the pockets of the FMCG companies. A study conducted by AC Nielson, a research agency reveals that FMCG industry loses around 2500 crores annually to counterfeits and pass-off products.

In another recent survey conducted by AC Nielson reveals that top brands in India are estimated to lose up to 30 percent of their business to fake products. Besides the loss of revenue, the leading companies also bear the damage to brand image and brand loyalty of consumers. On a whole, the brands not only suffer in terms of revenue but also have to compromise on the brand image which in no case can be tolerable. Therefore, various brands have come up with unique strategies to overcome their shortcomings in the rural markets and curb the growth of fake brands in rural areas.

Companies like Coca-Cola have set up an elaborate system to curb the menace of duplicate manufacturers, offering incentives to informers. It has 48 consumer response coordinators across the countries who work with their teams and redress consumer complaints directly, including overcharging and spurious bottling. Besides, it has a large network of route salesmen who have a one-to-one relationship with the retailers on their beat and keep their ears to the ground. When they spot suspicious activity, they inform company officials.

So though it is impossible to stop counterfeiters totally, it is possible to minimize the damage they cause. Upgrading the product packaging periodically or launch product variants so that the manufacturers of counterfeits find it difficult to copy their products. Hindustan Lever has initiated special tamper-proof packs for its deodorant spray ‘AXE’, whose nozzle can’t be detached from the body while Procter and Gamble uses special labels for its Vicks Vapo Rub which does not peel off even if soaked overnight in water. This makes it difficult for spurious goods makers to imitate.

Stopping the counterfeits market is a long process but it’s more important for companies to create awareness among the consumers about the ill effects about such fake products and the hazards they pose. Geographic locations: Rural consumer behavior is also influenced by the geographic location of the consumers. For example, nearness to feeder towns and industrial projects influence the buying behavior of consumers in the respective clusters of villages. We are discussing this aspect in detail in the section on market segmentation in rural markets.

To cite one more example of how geographic location affects buying behavior, we can point out the fact that the lack of electricity in many rural households acts as a barrier to the purchase of certain consumer durables. Exposure to urban lifestyles: Extent of exposure of rural consumers to urban lifestyles also influences their buying behavior. An increased exposure and interaction with urban communities has been the trend in recent years. The way the consumer uses the products: The situation in which the consumers utilize the product also influences their buying.

The example of lack of electricity affecting buying behavior illustrates this point as well. Lack of electricity automatically increases the purchase of batteries by rural consumers. Similarly, since rural consumers cannot use washing powders/detergent powders that much, as they wash their clothes in streams or ponds, they go in more for washing bars and detergent cakes. Places of purchase: Buying behavior of rural consumer also varies depending on the place of purchase. Different segments of rural buyers buy their requirements from different places/outlets.

Some buy from the village shopkeepers; some from village markets/fairs; others buy from the town that serves as the feeder to the rural area. It is also seen that the same buyer buys different requirements from different laces. For understanding the buying behavior of the rural consumer correctly, the marketer must ask the question: Where from do they buy the products and why? Involvement of others in the purchase: Involvement of others in the purchase in the purchase decision is yet another relevant factor in this regard. There has been a change here in recent years.

In the past, the head of the family used to make the purchase decision all by himself. In contrast, the involvement of the other members of the family in the purchase decision has been growing in recent years. An increase in literacy coupled with greater access to information has resulted in this development. The marketer has to reckon the role of the influencers while sizing up the buying behavior of rural consumers. Almost 15 per cent of consumer goods sales in India is estimated to be of fake products. In value terms, around Rs 15,000 crore.

At an 18 per cent tax rate, the loss to the exchequer is Rs 2,700 crore. Despite efforts to curb counterfeiting of FMCGs, it remains rampant, especially in rural areas, where consumer awareness is low and the ability to track shipments is poor. This has prompted FMCG players to devise ways to act on units that manufacture these products. Emami, for instance, has a separate cell headed by an ex-assistant commissioner of police, whose job is to investigate leads provided by the in-house sales force on places where counterfeit products of its popular brands are made.

Once these are identified, the team and local authorities raid these factories. “On an average, we do at least two to three raids per month,” says Aditya Agarwal, director. Most companies are adopting this model of conducting raids with the help of the local authorities. “It works faster that way,” says C K Ranganathan, chairman & managing director, CavinKare. Godrej Consumer Products Ltd managing director, Dalip Sehgal, rues: “Counterfeiting has not only led to a lower offtake in products in particular towns but also has an effect on our top line and bottom line”.

GCPL has been facing pass-offs of many of its various products, such as Powder Hair dye, deo spray and their toilet soap brand, Godrej No. The company had complained to local authorities and seized personal and healthcare products and medicines worth about Rs 2 crore. The company has mapped locations where these activities take place and is going after the spurious manufacturers systematically.

Leads have been obtained on packaging and label suppliers as well, and Dabur India will spare no efforts to get them all behind bars,” said Dabur India Director P D Narang. The seized goods included 50,000 labels of Dabur Gulabari, over 30,000 labels of Dabur Keora water and both filled and empty bottles of different sizes of Dabur Lal Danth Manjan, Honitus and Active Antacid. Hindustan Unilever (HUL) has had reports of 118 spurious varieties of their products, Fair and Lovely and Clinic Plus, available in the market. HUL says it has a ‘three-pronged approach’ to address this.

It includes, as a spokesperson, from the company puts it: “Creating awareness regarding the problem; engaging with enforcement agencies on implementation and government bodies for changes in laws; and actively taking market action through raids and seizures. ” Tthe bigger the company, the larger is its spurious counterpart. To counter this, some companies have changed the packaging and design of their products at frequent intervals to make it difficult for counterfeiters to duplicate these easily. But, this is expensive, which makes conducting raids the most common pratice of dealing with the menace.

Companies also say most manufacturers of spurious products work in collusion with wholesalers and retailers who stock these, eventually pushing them to unsuspecting consumers, lured by the low price. The discount in price between the original and fake product is said to be 20-25 per cent. So, even as companies try getting manufacturers under their net, the distributor-retailer end is unaddressed. By some accounts, almost 10 per cent of the retail universe in the country is dealing in spurious products.

The Survey Research was used in this project, because consumer’s feedback was necessary for obtaining the data. Hear descriptive type of research was followed. Descriptive research includes surveys and fact finding enquiries of different kind. The purpose is description of the state of affairs as it exists at the present. Data Sources There two types of data Primary and secondary. * The Primary data are those, which are collected a fresh and for the first time, and thus happen to be original in character. Primary Data was collected with the help of questionnaire. The secondary data, on the hand are those which have already been collected by someone else and which have already been passed through the statistical process. The methods of collecting Primary and secondary data differ since; Primary data are to be originally collected, while in case of secondary data the nature of data collection work is merely that of compilation. Secondary Data was obtained from journals, magazines, newspapers, book and the internet. Research Instrument For doing the survey research, Structured Questionnaire with both open-ended and closed-ended questions was used.

The mode of survey was questionnaire methods distributed directly to the people. Sample Size A sample size of 100 respondents is used for the study. The collected information has been processed both manually and with the help of computer. The statistical tool used in this study is simple percentage methods. Simple percentage analysis = Number of respondents/Total number of respondents? 100 Sample Area A sample area is rural areas in Theni district.

The method of collecting Primary data has setup as questionnaire thus, the collection from the respondents made difficulty and response was not bad. The place of research is rural areas in Theni district so collection of data can be done only randomly with the limited sample size of 100. Many people are not able to understand the questionnaire because they are not well in English. Some people were not aware of fake brands. It takes too time to collect the questionnaire from the respondents. Some people not even know the meaning of “fake”.

A product is the heart of marketing. A rural marketer has to be sensitive to the needs of rural consumers and must design products that achieve the best fit with rural conditions. To succeed in rural markets, it is important for companies to make products that cater to all facets of rural needs, from product design to branding, from packaging to after-sales service. Based on the types of products currently seen and the likely aspirations of rural consumers, products may proliferate in many directions.

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WEBSITES

1. www. google. com
2. www. wikipedia. com
3. www. businessmanthra. com

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