International Journal of Advanced Research in

Management and Social Sciences ISSN: 2278-6236

BRAND AWARENESS AND CONSUMER PREFERENCE WITH REFERENCE TO

FMCG SECTOR IN RURAL BIHAR.
Mridanish Jha*

Abstract: The purpose of the paper is to study the brand awareness and consumer
preference in rural areas of Bihar and to study the consumer preference in fast moving
consumer goods category. Over the years rural areas of Bihar has seen substantial
improvement in purchasing power, increased brand consciousness and changed
consumption pattern. Rural Bihar is emerging as a large market for a number of goods and
services. FMCG has emerged as a major product category in rural consumption. The rural
market has been growing steadily over the years and is now bigger than the urban market
for FMCG (Fast moving consumer goods). The key to a successful business is a steady
customer base. Consumer behavior in the rural market is mystifying because of lack of
consistency in groups which are homogeneous in parameters of demographics such as age,
occupation, education and income. Therefore organizations need to understand crucial
issues relating to rural consumer behavior. This paper highlights the rural consumers brand
awareness and preference with respect to fast moving consumer goods.
Keywords: awareness, brand, consumer, market, FMCG, preference, rural.

*Assistant Professor, Department of Management, Cambridge Institute of Technology,

Ranchi

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INTRODUCTION
The veteran marketing guru Prof. C.K. has rightly stated, “The future lies with those
companies who see the poor as their customers." A major part of “Bottom of Pyramid”
consumer class resides in rural areas. The census of India defines rural as any habitation
where the population density is less than 400 per sq. km, and where at least 75 per cent of
the male working population is engaged in agriculture, and where there is no any
municipality or board. Led by the rising purchasing power changing consumption pattern
increased access to information & technology and improving infrastructure, rural market
holds great potential for retailers. There is paradigm shift towards higher value consumption
among rural consumers like from tooth power towards tooth paste, from local brands
towards popular national brands. According to experts, the FMCG sector in the rural area
has displayed a growth of 40 % in comparison to 25 % in urban market. Right now, one out
of six rural customers has access to organized retailing or distribution. So, rural retailing has
tremendous potential for growth. India's rural markets are growing at double the rate of
urban markets and the retail revolution is going to act as a catalyst. Retail sector has
emerged as highly dynamic and fast paced industries with several players entering the
market. In the retail sector FMCG (Fast moving consumer goods) has a major role to play.
The Fast Moving Consumer Goods (FMCG) sector contributes in a major way in the growth
of Indian economy. This sector covers all aspects of human life. And because of this changed
scenario, today’s marketers are eying on the rural markets in a big manner and are leaving
no stone un-turn to make their presence felt in the rural India. Fast moving consumer goods
market has emerged as one of the most attractive rural markets. Now rural consumers need
not to go to a nearby city to buy branded products and services. The wide spread reach and
telecast of the regional programs on television, availability of the dish TV, has made a
customer in rural India quite literate about various products that are available in the market
place . The urban consumer is a shopper who has moved from essentials to luxuries. In rural
market consumer buy and not shop. They buy when they have a need. Therefore marketers
have to create a need for them. For instance an urban girl looks for style, bounce, shine,
texture in a shampoo while a rural girl wants a cleanser with nice perfume affordable and
available at a hand stretching distance, a use and throw sachet. In FMCG sector some of the
notable names are Dabur, ITC, HUL, Godrej, Pepsico, Parle, Tata, Brittannia etc. Some of the

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brands which have created a niche for itself in the Indian rural market are HUL’s Breeze,
Clinic Plus shampoo and lifebuoy. Britannia’s Tiger biscuit, 502 Pataka chai,Marico’s
Parachute, Colgate toothpaste ,Tata salt ,Godrej no 1 etc. The basic reason for the success of
these brands in the rural market is the efficient management of 4A’s of rural marketing
which is affordability, awareness, availability and acceptability .FMCG companies innovated
on package sizes to introduce low price points. They have modified promotional strategies
for rural markets using local language and talent. Simple and inexpensive ways of marketing
such as melas, posters, wall paintings mobile vans and 'haats' are being increasingly used to
connect and engage directly with the rural consumers. Around 40-45 per cent of the overall
sales of Emami come from villages, Other companies, such as Hindustan Unilever, Marico,
Godrej, Pepsi, Coca-Cola among others too clock around 40-45 per cent of their overall sales
from the rural market. Cable and satellite penetration has helped spread more information
about products in the rural areas. This has boosted the aspiration level of rural consumers
and has forced companies to launch products and market it through village melas (fairs),
road theatre, boat branding, mobile vans and wall paintings at minimal cost. Rural areas of
Bihar have become a target for marketers because of the huge potential it offers for all
kinds of products and services. Various researches shows that there is a huge income shift
taking place in rural Bihar and the aspiring middle class, with increasing purchasing power, is
the focus of all marketing initiatives by several organizations dealing in FMCG. Around 90 %
of the population of Bihar lives in rural area. This really becomes the first motivational factor
for the FMCG companies to tap the rural markets.
To capture the attractive rural market, companies need to formulate strategies, which can
deal with issues pertaining to consumer behavior and suitable marketing mix. The increase
in the rural literacy levels and the exposure to media, have made rural consumer more
conscious about their buying decisions like their urban counterparts. Studies indicate that
there has been a visible shift in the people's preference for brands. Consumers in rural areas
are also becoming conscious about their buying decisions like their urban counterparts with
the increase in the rural literacy levels and the exposure to media. They are upgrading from
the use of tooth powders to tooth pastes, and from using traditional mosquito repellants to
using mats and coils. An Indian farmer today wears the branded jeans, talks on a mobile
phone, owns a car, motorbike, has got TV, music systems, DVD players in their houses. To

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understand the buying behavior and the consumption pattern, the need and wants of the
rural consumer, a marketer should have an in depth understanding of the buying behavior
of rural consumer. A marketer must always keep this in mind that the requirements of the
rural market are different. Organizations need to develop special products and strategies for
the rural consumer. There has been a significant rise in the brand awareness among the
rural consumer. As a result they have become selective and demanding in their buying
preferences. Therefore a marketer has to appropriately analyze the psychographics before
entering the rural market. Hence if a company becomes complacent and takes the rural
consumers for granted it is ultimately going to lose in the market. The companies have to
constantly innovate and make their products appealing to the consumers to succeed.
LITERATURE REVIEW
The ORG Survey (2011) indicated that the major items which accounted for about 45-50
percent of the rural market were washing soaps, cleaning materials, toiletries and food and
beverage .But the survey also observed that the growth rate was very significant in certain
items like cosmetics and toiletries over the period of five years. The growth rate observed in
the case of cosmetics indicated that the rural women were not lagging behind their urban
counterparts. The psychologists developed the hierarchy of effects model, which proposes
that behavior is composed of three dimensions: cognitive, affective and behavioral (Lavidge
and Steiner, 1961). The cognitive dimension involves developing awareness and knowledge,
the affective component relates to developing feelings and attitudes, and the behavioral
dimension involves development of conviction or intention and actual behavior, such as
purchase decision making technique. (Lavidge and Steiner, 1961). S John Mano Raj & Dr. P
Selvaraj, explored about social changes and the growth of Indian Rural Markets with
reference to FMCG products. The paper concluded that FMCG companies would have to
really gain inroads in the rural markets in order to achieve double-digit growth target in
future. The winner would be the one with the required resources like time and money and
also with the much needed innovative ideas to tap the rural markets. In the marketing
literature, individuals with a high need for cognition have been shown to process and
evaluate advertising information more thoroughly than those with a low need for cognition.
They tend to be influenced by message relevant thoughts rather than peripheral cues such
endorse attractiveness (Haugtvedt and Petty, 1992), spokesperson credibility (Petty and

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Cacioppo, 1986), humour (Zhang, 1996) or the number of arguments presented (Cacioppo
et al., 1983). B B S Parihar, Sanjay Yadav and Irfan Siddiqui (2007) empirically found that
there is a significant difference between the buying behavior of urban and rural consumers
with regard to their preference for technology, style, brand image, price and after-sales
service. Matrade Chennai (2005), studied a lot of aspects related to consumer behavior in
India and found that Indian consumers are deeply concerned with the traditions, values and
they consider their family advice in the purchase decisions. About rural Indian consumer the
study revealed that rural consumers in India are changing rapidly related the education,
awareness of the products. Through internet now they connected with the whole world.
Janmejaya Sinha and Arvind Subramanian (2007) studied the next billion consumers. Rural
Indian consumers are now being richer and they are contributing more in the total
purchases. Rahul Joshi studied in his as The Discovery of Rural India and revealed the fact
that the prosperity is rising in rural India and the strategies adopted by the companies like
HUL and ITC are effective enough and they are tapping the market successfully. Williams
(2002) argues that deviation in “attitude, motivation and value orientations associated with
differences in occupational opportunities and demands, childhood socialization patterns and
educational influences may lead consumers to vary in many of their purchase behaviors
across social classes”. Hansa Research (2006) explored that the preferences in rural India
are shifting from loose to packaged products. Rural India is now buying specialized, branded
utensil cleaners, and moving away from the typical ash/soil usage in the past. The
penetration of branded items has also increased significantly for the products like
toothpaste, detergent cakes, hair oils etc. Ritesh Sud and Pritesh Y. Chothani (2006) studied
that there has been a significant rise in the brand awareness among the people in the rural
markets. As a result they are becoming choosier and demanding than ever before, so the
marketer has to properly analyze the psychographics before entering this market. Studies
indicate that there has been a visible shift in the people's preference for brands. People are
upgrading from the use of tooth powders to tooth pastes, and from using traditional
mosquito repellants to using mats and coils. Also there is shift from low priced brands to
semi premium brands. Rajendhiran N. Saiganesh S. Asha P. (2006) explored that brand
ambassadors play an important role in putting an impact on the brand preferences of rural
India. Keeping the Literacy scenario in to consideration the promotion of Brands in rural

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markets requires the special measures. The same becomes the base for brand awareness
and preference in the markets. Rao G Srinivas (2002) studied that rural India buys small
packs, as they are perceived as value for money. There is brand stickiness, where a
consumer buys a brand out of habit and not really by choice. Brands rarely fight for market
share; they just have to be visible in the right place.Hence, a marketer needs to focus his
attention primarily on the major source of information for the rural consumers.
OBJECTIVES OF THE STUDY
1. To Study the brand awareness of rural customers for FMCG Products.
2. To Study the brand preferences of rural customers for FMCG Products.
RESEARCH METHODOLOGY
The present study was undertaken to study the brand awareness and brand preference
towards FMCG products. Respondents for the present study are the villagers. The nature of
data used in the present study is primary which has been collected by using a structured
questionnaire. The data required for the study was collected from the selected respondents
of rural areas of Bihar. Five villages were selected and twenty respondents from each village
were selected. The total sample selected was 120. Data has been collected on the basis on
convenience sampling, data is analyzed by the help of Percentile, Mean and Standard
Deviation and presented by tables and figures. Preliminary discussions were held with the
rural consumers and the marketers about the consumption of FMCG products as well as
about the brands available and preferred in the study area to gather information on the
products to be selected for the study. Based on the discussions, the most commonly
available and used products in the study area were selected.
DATA ANALYSIS AND INTERPRETATION
Demographic Characteristics of Respondents:
Table 1: Age Wise Distribution of 120 Respondents
AGE (YEARS) FREQUENCY PERCENTAGE

15-25 16 13.33
25-35 31 25.83
35-45 43 35.83
>45 30 25.0
Total 120 100

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Table 2: Gender Wise Distributions of 120 Respondents

GENDER FREQUENCY PERCENTAGE

Male 91 75.83
Female 29 24.16

Table 3 : Distribution on the basis of occupation.

OCCUPATION FREQUENCY PERCENTAGE
Students 19 15.83
farmers 54 45.0
Servicemen 32 26.66
Others 15 12.5
Total 120 100

Table 4 Distribution on the basis of Education.

EDUCATION FREQUENCY PERCENTAGE
Post graduate 10 8.33
Graduate 22 18.33
10+2 31 25.83
10th 46 38.33
Below 10th 11 9.1
Total 120 100

The study was conducted with a sample size of 120 respondents. On the basis of
Demographic factors, maximum 35.83% are from an age group of 35-45 years and 25.83% in
the age group of 25-35.Twenty five percent are from the age group of more than 45 (Table-
1). On the basis of gender the respondents are maximum male (75.83%) and rest females
(24.16%), (Table-2). In occupation maximum numbers of respondents are farmers (45%)
which are followed by servicemen (26.66%), the number of respondents in the category of
other also becomes significant (12%) because of the participation of female respondents in
this category and rest are the students (19%) (Table 3) .The educational levels of the
respondents were also moderate and it varied significantly between the qualifications 10th
to Graduate.

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Purchase Location in rural areas

Table 5 Purchase Location Preferences in Rural market

PURCHASE LOCATION FREQUENCY PERCENTAGE

From the Nearest Retail Shop 46 38.33
. From the Nearest town 39 32.5
From local haat /mela 35 29.16
Total 120 100

For FMCG Products rural customers purchase goods from the nearest location. They prefer
to purchase from the nearest shops and retail stores (38.33%). That is followed by the
purchase from the nearest city (32.5%) and the rest (29.16%) customer’s purchase from
haat/mela.(Table: 5)
Brand Loyalty Status
Table 6: Brand loyalty status in rural market
SAME BRAND FREQUENCY PERCENTAGE
Always 41 34.16
Usually 33 27.5
Sometimes 26 21.66
Never 20 16.66
Total 120 100

Brand Preferences
34.16% of respondents always purchase the same brands while 16.66% customers are highly
disloyal they never purchase the same brand. 27.5 % usually purchase the same brand and
21.66% purchase the same brand sometimes. (Table: 6)
Table 7: Brand preference for FMCG products in rural market
CATEGORY FREQUENCY PERCENTAGE
TOOTHPASTE
Colgate 36 30
Babool 27 22.5
Cibaca 21 17.5
Dabur lal 16 13.13
Anchor 15 12.5
Others 05 4.1
Total 120 100
SOAP

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Lux 32 26.66
Lifebuoy 21 17.5
Breeze 19 15.83
Godrej No.1 14 11.66
Superia 11 9.1
Rexona 09 7.5
Santoor 08 6.66
Others 06 5
Total 120 100
DETERGENT POWDER
Ghari 38 31.66
Active Wheel 29 24.16
Nirma 17 14.16
Rin 13 10.8
Sunlight 10 08
Local brands/Others 13 10.8
Total 120 100
HAIR OIL
Navratan 34 28.33
Dabur Amla 29 24.16
Nihar 21 17.5
Keo Karpin 17 14.16
Parachute 13 10.8
Others 06 05
Total 120 100
SHAMPOO
Clinic Plus 37 30.83
Sunsilk 29 24.16
Chik 18 15.00
Pantene 12 10
Head & Shoulders 09 7.5
Shikakai 08 6.66
Others 07 5.8
Total 120 100

The results show the brand preference in rural area for major FMCG categories like
toothpaste, bath soap, detergent, hair oil and shampoo (Table 7). If we look at Toothpaste,
then Colgate is number one with the first preference of 30% respondents, which is followed
by Babool and Cibaca with 22.5% and 17.5% respectively, almost half of Colgate. 21% prefer
to use the other brands including local brands of toothpastes and tooth powders. In the
Soap category Lux dominates the rural market with 26.6%, which is followed by Lifebuoy
and breeze with 17.5% and 15.83% of respondents preferring it. In detergent powder

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category Ghari has the maximum preference among the rural market with 20% respondents
while active wheel and Nirma are preferred by 24.16% and 14.16 % of respondents
respectively. In case of Hair Oil Navratana is preferred by 28.33 % of respondents while
Dabur Amla is preferred by 24.16% of respondents. In the shampoo category 30.83%
respondents prefer Clinic plus while 24.16% respondents prefer Sunsilk shampoo.Chik
shampoo the pioneer of sachet revolution was ranked third with 15% respondents
preferring it.
CONCLUSION
The findings from the study suggest some discernible points about the consumer behavior
of rural Bihar. The rural consumers have become value conscious as reflected by their
buying behavior. For rural customers, when the FMCG meets the intended benefits then
value for money is achieved. Rural marketers should design innovative promotional
strategies for rural markets that can express messages in an easy way to the villagers and
compatible with their education and understanding levels. To move rural buyers from trial
to preference, brands need to deliver on their value proposition. Pricing, promotional deals
and product availability, all have remarkable impact on the position of the brand in the
buyer’s preference. Quality is important in the context of rural purchase and consumption
of FMCG. Therefore organizations should not compromise on the quality of FMCG.
Attractive packaging creates a favorable impression in rural customers’ minds which
influences their buying behavior. The responses of customers are quite mixed in the rural
India. Customers prefer some of the popular brands but they also prefer to use local brands
also. The loyalty status for brands is also moderate in the rural markets. The rural consumer
also depends upon observed source like exhibitions and road shows because they provide
an opportunity to evaluate the product personally and absorb relevant information at their
own relaxed pace. Marketers need to focus on plummeting the information search time by
inducing product trials and successfully reaching out to the consumer through ideal
information channels. Marketers also need to understand the product specific evaluation
process from primary research to mapping the succession of their brand from consideration
set to choice set. The brands’ potential can only be fulfilled by continually reinforcing its
perceived quality, up market identity and relevance to the buyer.

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