Customer Perception on Fmcg Products in Rural Market

Topics: Brand, Fast moving consumer goods, Brand management Pages: 32 (7740 words) Published: April 21, 2013

"A rural consumer is brand loyal and this also makes it easy to sell look-alike"                                                                                    - Mr. R.V. Rajan, CMD, Anuragh Fake products are of two types – one: counterfeit products and two: pass-off products.  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.

Laws Governing
Following are the laws under which legal action can be taken against manufacturers and sellers of fake products: * Indian Penal Code 1860
* Drugs and Cosmetics Act, 1940
* Prevention of Food Adulteration Act, 1954
* Consumer Protection Act, 1986
* Bureau of Indian Standards Act, 1986
* 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.

List of Fake Chocolates/Toffees available in rural areas
* Dairy Milk:Daily Milk
* Kit Kat:Kir Kat
* Coffee Bite:Coffee Toffee
* Mango Bite:Mango Ripe and mango bite
* Aasai:Aasha
* Polo:Rolo
* 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...
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