RURAL MARKETING STRATEGIES ADOPTED BY CHAUDARY GROUP:

A CASE STUDY OF CG FMCG

Sanjit Khadka

PU Regd No: 2013-2-03-0270

Exam Roll no. 14030262

Submitted To: Mr.Amit koirala

Ace Institute of Management

Pokhara University,

Nepal

In partial fulfillment of the requirement for the Degree of Bachelors in Business

Administration (BBA)

18th December, 2016

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD ii

DECLARATION

I, the undersigned state that this report, entitled is a consequence of my own

study/research carried out during the year 2016. It has not been previously submitted to

any other university or any other examination.

Signature:

____________________

Sanjit Khadka

BBA 6th sem

PU Exam Regd no: 2013-2-03-0270

Exam Roll no. 14030262

Ace Institute of Management

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD iii

BONAFIDE CERTIFICATE

Certified that this project report

Rural Marketing Strategies Adopted By CG FOOD

Is the Bonafide work of

Sanjit Khadka

Who carried out the summer project proposal work under my Supervision. This report is

forwarded for examination.

……………………………… ……………………………...

Signature Signature

Amit Koirala Ramesh Chauhan

Project Instructor Program Director

……………………………..

Name of the external Examiner:

Date: 18th December, 2016

ABSTRACT

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD iv

The aim of the study is to identify the marketing strategies adopted by the CG food. A

decade ago, the rural market was more unstructured and was not a prioritized target

location for corporate. There were no innovative strategies and promotional campaigns.

A distribution system did exist, but was feeble. Illiteracy and lack of technology were the

other factors leading to the poor reach of products and lower level of awareness amongst

villagers. The research questions that were used in the process are inclined towards

marketing towards the rural areas, product that people with low income can afford and

awareness and advertisement campaign done in the rural areas.

The methodologies that have been used during the process is qualitative research method

under which I have used interview method and observation method of data collection.

During the data collection process the 3 participants were interviewed and the

participants were fully satisfied with the research topic and methods.

In order to attract the customers, rural marketing requires separate marketing strategies

for the marketing mix elements include, Product, Price, Place and Promotions which

could be formulated after studying the market carefully. Marketing Strategy is affected

by various factors like Type of product, profile of target market, and facilities available

for using marketing mix etc. This made the need for studying rural retailers and their

strategies for marketing successfully.

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD v

ACKNOWLEDGEMENT

My outmost gratitude goes to the Pokhara University for including this Project Work in

the syllabus of BBA, which I think is very helpful in developing practical knowledge of

the student. This report aims to introduce a multinational company like Chaudhary Group

contributing to enhance Nepalese economy. It was challenging “Rural Marketing

Strategies of Chaudhary Group” as a topic and Chaudhary Group as the organization for

the assignment.

I have tried my best to present the subject matter in a most simple and easily

understandable form. The persons who remained source of inspiration and

encouragement to present this report deserve to be acknowledged in the right earnest. I

am thankful to the staff of Chaudhary Group who directly or indirectly helped me in

completion of the study.

Finally, my deepest appreciation goes to Mr. Amit Koirala, Mrs. Sharmila Maharjan and

Mr. Mukesh whose guidance gave me support to accomplish this task.

Thank you

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD vi

LIST OF ABBREVIATION

CG: Chaudhary Group

FMCG: Fast Moving Consumer Good

ISO: International Standardization for organization

CGFN: Chaudhary Group Foods Nepal

CUG: Chaudhary Udhyog Gram

GBN: Gold Beverage Nepal

CGBN: Chaudhary Group Brewery Nepal

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD vii

CONTENTS

ABSTRACT..................................................................................................................................iii

ACKNOWLEDGEMENT...........................................................................................................iv

CHAPTER I...................................................................................................................................1

INTRODUCTION.........................................................................................................................1

1.1 Background............................................................................................................................1

1.1.1 History.................................................................................................................................2

1.1.2 CG FMCG (Fast Moving Consumer Goods)......................................................................4

CG Foods (Nepal) Pvt. Ltd. (CGFN).......................................................................................4

CG Confectionaries..................................................................................................................5

CG Beverage............................................................................................................................5

CG Tobacco..............................................................................................................................6

CG Brewery..............................................................................................................................6

CG Packaging...........................................................................................................................6

1.2 Statement of problem.............................................................................................................7

1.3 Research Questions................................................................................................................8

1.4 Significance of the study........................................................................................................8

1.5 Delimitation...........................................................................................................................8

CHAPTER II................................................................................................................................10

LITERATURE REVIEW...........................................................................................................10

2.1 Introduction..........................................................................................................................10

2.1.1 Coke’s new strategy in India.............................................................................................10

2.1.2 Beating Hunger with Wai Wai..........................................................................................11

2.1.3 Mondelez launches Cadbury Bournvita biscuits in India.................................................12

2.2 Theoretical perspective........................................................................................................14

2.3 Conceptual framework.........................................................................................................15

CHAPTER III..............................................................................................................................18

RESEARCH METHODOLOGY...............................................................................................18

3.1 Research Design...................................................................................................................18

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD viii

3.2 Data Tools and Collection....................................................................................................19

3.3 Nature and source of data.....................................................................................................19

3.4 Study Population..................................................................................................................19

3.5 Ethical Consideration...........................................................................................................19

CHAPTER IV..............................................................................................................................20

DATA ANALYSIS.......................................................................................................................20

4.1 Marketing towards the people in rural areas........................................................................20

4.1.1 Marketing tools that are in use......................................................................................20

4.1.2 Retaining the costumers from the rural areas................................................................21

4.1.3 Target market of CG......................................................................................................21

4.2 Products that people with low income can afford................................................................22

4.2.1 Products that fall under the price range focused to the target audience........................22

4.2.2 Pricing strategies of the product distributed among the low income costumers................................................................................................................................................23

4.3Awareness through advertisements.......................................................................................24

4.3.1 Advertisement and sales promotion strategies in the rural market...............................24

4.3.2 Rural communication strategies and its impact.............................................................25

4.3.3 Effect of Advertisement on purchasing decision..........................................................25

CHAPTER V................................................................................................................................27

FINDINGS AND DISCUSSION.................................................................................................27

5.1 Findings of the study............................................................................................................27

5.2 Discussion............................................................................................................................28

CHAPTER VI..............................................................................................................................30

CONCLUSION AND IMPLICATIONS...................................................................................30

6.1 Conclusion...........................................................................................................................30

6.2 Implication...........................................................................................................................30

REFERENCES...........................................................................................................................viii

APPENDIX.....................................................................................................................................x

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD ix

CHAPTER I

INTRODUCTION

1.1 Background

The Chaudhary Group (CG) operates and conducts all business in a socially and

environmentally responsible manner. It believes in the relationships it builds with

employees, customers, partners and the community at large. As a result, the group has

been actively invested in the community for over two decades. The CG Foundation

follows our group’s belief in the power of the relationships and was setup to enhance our

contributions to society by reorganizing our social initiatives towards a sustainable and

focused model. (Bhandari, 2016).

CG Foundation continues to add to the portfolio of initiatives taken up by the Chaudhary

Group over the past few decades. It is building upon past successes by applying the same

business-oriented approach in tackling these pressing challenges. Focused and optimistic,

the foundation is working with our partners to identify and implement innovative

solutions that can help every person have the opportunity to live a healthy and productive

life.

Kotler (2014), “Marketing is the science and art of exploring, creating, and delivering

value to satisfy the needs of a target market at a profit”. Marketing identifies unfulfilled

needs and desires. It defines measures and quantifies the size of the identified market and

the profit potential.

The company has given special focus on after sales service with robust service network

all over Nepal. The most obvious and working strategy that the company uses in terms of

brand marketing and communications is its ‘Life’s good’ tagline. (CG corporation, n.d.)

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD x

1.1.1 History

Founded by Mr. Lunkaran Das Chaudhary in 1968 Chaudhary Group is a multi-national

company headquartered in Nepal. It has diversified business interests including financial

services, fast-moving consumer goods, education, hospitality, energy, EPC, consumer

electronics, reality, biotech and Ayurveda. This group runs 136 companies under 15

different business verticals led by Mr. Binod K. Chaudhary. (Chaudary Group, n.d.)

It was here that the founder Mr.Bhuramull Chaudhary was given a shop on a yearly rental

fee of Rs. 200, which eventually increased to Rs 500. It was situated opposite the present

Bishal Bazaar and dealt in textiles imported from various parts of India.

The late Bhuramull Chaudhary having started his business in a humble manner by

importing fabrics from India was also one of the few privileged businessmen permitted to

enter the then Rana palace of Shri Shri Shri Judha Shumsher Jung Bahadur Rana.Mr.

Bhuramull Chaudhary along with his son carried items from his shop to the palace with

the help of several porters and arranged an open shop in the courtyard for the Queen,

courtiers and the King's people. This operation functioned under the informal name of

Bhuramull Lunkaran Das .

After the demise of the founder, Mr. Bhuramull Chaudhary, young Lunkaran Das

Chaudhary took over the reigns of the business at the age of 23 and took it to a whole

new dimension. He embarked on a lucrative business of exporting jute from Biratnagar to

USA & Europe. He imported fabrics from Japan & Korea under the name of Bhuramull

Lunkaran and Arun Impex.

Soon he diversified and established a construction company under the name of United

Builders. It was arguably the foremost construction company of Nepal at that time. Some

of the prestigious projects undertaken were Jor Ganesh Press at Balaju, the first phase of

the Soaltee Hotel, Janakpur Cigarette Factory and the road leading from Kathmandu to

Trishuli.

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD xi

Today Chaudhary Group has over 40 Companies under its umbrella and an investment

outlay of over $1Billion. Being the first Nepalese organization to have a distribution

network spanning the subcontinent, it has made substantial presence in South Asia's

fiercely competitive Food and Beverages market. Our Food & Beverages products have

been a common household name in Nepal for decades. With ISO 9002 certification,

providing the lead, our F&B products have crossed the borders to become a favorite in

South Asian cities (Chaudary Group, n.d.).

The Group's progress over the last sixty-seven years has been a trial-blazer on the

Nepalese horizon. In a land-locked, developing third world nation, this spells nothing

short of very hard-earned success. Apart from also being a responsible citizen, Chaudhary

Group forms an intrinsic part of every realm of life from Biotech, Cement, Education,

Electronics & White goods, Energy and Infrastructure, Financial Services, FMCG, Hotels

& Resorts, Realty to Retail. Since its inception, Chaudhary Group has contributed to the

upliftment of the nation's economy, equalizing the infrastructure and entrepreneurial

capability of Nepal with other developing nations. As Nepal's investment potential

progressively draws the attention of leading multinationals, Chaudhary Group continues

to lead, harnessing global partnerships in core sectors and offering cost-effective

procurement affiliation to corporate worldwide.  The company offers its products and

services through dealers, distributors, retailers, and suppliers. Chaudhary Group is based

in Kathmandu, Nepal (CG corporation, n.d.).

Today it has reached a stage where the tagline defines their brand. Coupled with selling

technologically superior products this equation has allowed the company to achieve the

simple market acceptance. With this product of CG product placement is already in the

minds of potential buyers, the company has the great luxury of being able to focus more

on customer care and value addition to the products.

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD xii

1.1.2 CG FMCG (Fast Moving Consumer Goods)

A well-integrated, self-contained FMCG industry set up by Chaudhary Group has

evolved to become one of Nepal’s leading manufacturers of FMCG products.CG has

interests across a variety of FMCG products like Food & Beverages, Beer and Cigarettes.

It has the following divisions under FMCG (CG corporation, n.d.)

CG Foods (Nepal) Pvt. Ltd. (CGFN) is an ISO 9001:2008 certified company and

formerly known as Nepal Thai Foods. It was established in 1984 in Kathmandu for

manufacturing instant noodles with a capacity of 120 packets per minute in technical

collaboration with Thai Preserved Food Factory, Thailand. Today it has increased in

multiple folds to the capacity to 1,350 packets of noodle per minute or 25,000 tonnes per

year. It has also increased its product portfolio to Extruded Snacks, Potato Chips, Fried

Snacks, Fruit Drinks, Chocolate Enrobed Wafer and Broken Noodles popularly known as

Bhujiya. CGFN has two manufacturing locations in Nepal which have been named as

FUDCO at Kathmandu and Chaudhary Udyog Gram (CUG) at Nawalparasi, 160 Kms

south west of Kathmandu (Boss Nepal, n.d.)

Instant Noodles

Brown Noodles

Wai Waiis a popular brown noodle (3 Seasonings) available in 2 different flavours -

Vegetable and Chicken. It is available in 75 gm packet.

Wai Wai Quick is a brown noodle (Curry Base - 3 Seasonings) available in Vegetable

and Chicken flavours. It is available in 75 gm packet.

White Noodles

Wai Wai X Pressis a white noodle (2 Seasonings) available in Vegetable and Chicken

flavours. It is available in 90 gm packet.

Wai Wai X Press Masala Delightis a white vegetable noodle with 2 seasonings. It is

available in 90 gm packet and 50 gm packet.

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD xiii

Soalteeis a white noodle available in Chicken flavour. It is available in 50 gm packet.

Snack Noodles

Mimi snack noodle (2 Seasonings) available in Chicken flavour. It is available in 50gm

packet.

Bhujia and Snacks

Mama Bhujiais available in Chicken flavour in three different weights - 40gm,

10gm and 20 gm.

Kwiks Potato Chipsis very popular among the youngsters is available in 16 and

35 grams. It is available in the spicy Tangy Masala and Tomato Chilli.

Kwiks Cheese Ballsis made in the most modern and hygienic plant with the best

quality, they are blended with right amount of Corn, Cheese and Salt. The Cheese

Balls is available in 12 gm.

CG Confectionaries

The Zoom wafers are available in four Different flavors namely, Chocolate Enrobed

Wafer, Vanilla Flavor Wafer, Orange Flavor Wager and Orange Flavor Wafer. It contains

Sugar, Vegetable Fat, Wheat Flour, Milk Powder and Sodium Bicarbonate. (Gerard

Manley, n.d.)

CG Beverage

Fruit Drink

Gold Beverage Nepal (GBN), a unit of CG Foods (Nepal) Pvt. Ltd. was established in the

year 1998 for the production of Fruit juice. Currently it produces more than 30 Million

packets per year. It produces popular flavours like Alfanso Mango, Mixed fruit, and

Pineapple under its brand name Rio.

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD xiv

Natural Spring Water

CG has recently tied up with Raybot Springs Mineral Water Pvt. Ltd. to bottle water from

natural springs with the objective of exporting to various international markets and for

domestic sales. The plant manufactures bottled natural spring water of the Himalayas in

various packaging sizes. The bottling plant is located in Kathmandu. The unit has its own

source that rivals to any spring water from any part of the world. CG Beverages’ CG

Raybot unit is taking the Himalayan spring water to the world.

CG Tobacco

CG has a cigarette manufacturing unit, Perfect Blends (Nepal) Pvt. Ltd. that produces

popular brands like Bagh, Gaurav, James, Josh, Matrix, Pine, Pride and Sahasi. It was

established in 1998 with the capacity of 1,500 sticks per minute. It currently has a

capacity of 4,500 sticks per minute.

CG Brewery

CG Brewery (Nepal) Pvt. Ltd. (CGBN) formerly known as Sungold Brewery (Nepal)

Pvt. Ltd. (SBN) was established in 1997 as the Brewery arm of Chaudhary Group and has

a current capacity of producing 250,000 cartons of beer per month. It has its own popular

brands like Nepal Ice, Real Gold and Mustang which are also exported to Hongkong,

Japan, Australia, UK and the USA besides domestic sales. It has also tied up with

international brewer In Bev International, Netherlands Production.

CG Packaging

CG Packaging (Nepal) Pvt. Ltd. was set up in 2010 with the objective of manufacturing

high quality corrugated boxes for own internal demand as well as for external customers.

CG produces a variety of food & beverage items that require corrugated boxes and in

order to meet this demand CG Packaging was setup. CG Packaging is Nepal’s first

automatic corrugation line with capacity to manufacture 100,000 boxes per day.

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD xv

1.2 Statement of problem

The rural market with its vast size and demand base offers a huge opportunity that

companies cannot afford to ignore. (American Marketing Association, 2004), states that,

“Rural marketing is a process of planning, and executing the conception, pricing,

promotion, and distribution of ideas, goods, and services to create exchange (for rural

segments) that satisfy individual and organizational objectives.” This paper critically

examined the current status of rural marketing in present economic scenario. It analyzed

the problems prevail in the rural marketing. It does quest the opportunities, rural

marketing strategies, problems along with challenges exists in rural marketing. Due to the

media explosion and increasing literacy levels, people in rural areas are becoming

conscious about their lifestyles and demanding a better life. With increasing disposable

incomes, the rural consumer has become more demanding & choosier in his purchase

behavior than ever before. Brand consciousness is on the rise and marketers have realized

this. As urban markets are getting saturated for consumer goods, marketing executives

are fanning out and discovering the strengths of large rural markets.

The Nepalese rural market is deprived and is out of reach in the very same context. The

number of people below the poverty line has not decreased in any appreciable manner.

Thus, poor people and consequently underdeveloped markets characterize rural markets.

Similarly, there is a problem of geographical barrier due to which the products are not

easily viable to all parts of the country causing geographical dispersion (Bhandari, 2016).

Channel Management is another problem in the rural market leading to problem in

distribution of FMCG in the rural sector. In rural distribution we need relatively longer

chain distribution involving multiple channels as we have widely scattered markets.

Multiple channels lead to higher costs of operating a complex dealer network and we also

have to solve management problems of the complex channels (Entomo, 2015).

Promotion and marketing communication is the factor that retains the costumer in the

market place. Marketing communication is often the largest component of

communication within a company, which may be to present company value, objectives or

specific products and services to investors, customers or the general public. (Chand,

2011).

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD xvi

Distribution of FMCG in the rural target market difficult as there is large number of small

market, poor road connectivity, dispersed population and trade, large number of

intermediaries, high credit driven market, poor storage system leading to inadequate

storage and low density of shop per village ultimately causing shortage of product and

retail stores.

1.3 Research Questions

The main questions arising in this case are:

How is CG focusing on marketing towards the people in rural area?

How can they introduce products that people with low income can afford?

What kind of advertisement actions are done so that the people of rural areas are

made aware about the products?

1.4 Significance of the study

The research specifies and digs in the market strategies applied by CG and this research

can be an information source and practical applicability for the company and can also act

as a competitive edge for other completive companies existing in the market. As this

research is entirely based on the plan and procedures of CG, it can be useful for the

company to keep the past record about the company. The research findings can provide a

brief insight about the rural market of Nepal and the data can be practically applicable for

further research as well. The data can create a competitive edge for the marketers and the

competitors as they will get to know about the company’s strategies on marketing.

1.5 Delimitation

The study is based totally on the primary data as well as secondary data and such data

relates to something of the past and not the exact present scenario. Hence totally

depending on such given data could at times be misleading, that is no matter how good

the report is one has to do certain amount of homework before jumping to conclusions on

the basis of such study. (Ekantipur, 2011) Marketing activity is something that is never

stable and is constantly changing with the changing circumstances, ever changing rules

and regulations that control these activities. Hence something which is very up-to-date as

of now might become obsolete in a very short span of time. One has to be very cautious

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD xvii

before taking any decision based on such data and has to think beyond what is given. No

amount of data can be accurate enough to give the desired results. Another major

drawback with respect to the study of scope of rural marketing for CG FOOD of

Chaudhary Group is that it is something that has been here for the past few years only

and hence trying to get much information regarding it is also difficult, and whatever little

that is available has to be taken note of and believed into.

The study has been only possible by overcoming various barriers in the process but there

were some barriers which could not be eliminated nor be ignored. So, to conduct the

research and accomplish its objectives, we considered the limitations during our study.

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD xviii

CHAPTER II

LITERATURE REVIEW

2.1 Introduction

This literature review aims to present a critique of existing, published literatures that

analyze the relationship between marketing strategies and the firm’s performance.

Historically, marketing strategy formulation is viewed as an antecedent to performance

outcomes. It is the modus operandi that allows an organization to concentrate its limited

resources on the best available opportunities to increase sales and achieve a sustainable

competitive advantage.

2.1.1 Coke’s new strategy in India

As per the Business and Management case studies, (January 8, 2010), Coke’s new

strategy involves training retailers (around 6,000 of them) in a program launched by the

Coca-Cola University.(In 2007, the company launched Coca-Cola University — a virtual,

global university for all learning and capability-building activities).

The company calls this the “parivartan” program (meaning “Change” in English). Shop

owners (traditional retailers) are given training on displaying and stocking products well.

The goal of the innovative training program is to provide traditional Indian retailers with

the skills, tools and techniques required to succeed in a constantly changing retail

scenario. Presentations (including audio/visual technology) in local Hindi language help

small retailers (with stores less than 200 square feet in average size) to better understand

the concepts involved. Each retailer also receives a Coca-Cola “Certified Retailer”

certificate at the conclusion of the program.

Last year, PepsiCo set up a research facility in India. Last month, Coke too set up an

R&D faculty in India to develop beverages that suit local taste and increase focus on

localizing its portfolio of beverages. Earlier, Coca-Cola India had been outsourcing all

R&D functions from its facility in Shanghai. Some examples of local flavors include

Maaza aam panna by Coca-Cola and Pepsi has locally-produced flavors under its

Tropicana juice brand (with nimbu pani in the pipeline).

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD xix

2.1.2 Beating Hunger with Wai Wai

As cited in The Himalayan Times, (February 14, 2013), Nepal was primarily dominated

by the white noodles, Maggie in the 80s. Detecting a need for brown instant noodles in

the Nepali market, Chaudhary Group tapped on the demand in 1984 with the introduction

of the brown instant noodles, WaiWai. With technical collaboration from Thai Preserved

Food Factory (TPFF), Thailand, the popularity of this brand has been escalating since its

introduction.

Although primarily a local brand, Wai Wai is also exported to countries like India, USA,

the Middle East, Hong Kong, Malaysia and Japan. “We have a small share in the global

market, but Wai Wai sells the most in the Middle East besides Nepal,” says G P Shah,

vice president (FMCG Division) of Chaudhary Group. “The product is the same, but the

packaging differs according to requirements of the countries importing Wai Wai,” adds

Shah, informing that worldwide, Wai Wai has an annual turnover of Rs 3 billion, while in

Nepal it is approximately Rs 1.40 billion.

Wai Wai is the most affordable food product. Earlier when the noodle was introduced, it

had a small market as consumer’s awareness had to be created and the noodles market

back then was dominated by Maggie. Soon, many competitors joined the market. The

market size increased with the introduction of instant noodles brands like Mayos and

Rum Pum in 2000.

“Wai Wai has stood the pressure of competitions and prevailed as the best instant

noodle,” informs Shah. The reasons for securing the top position according to Shah are

due to its unique taste, innovation and constant upgrading that includes adopting better

and safer packaging. “Wai Wai was the first brand to introduce food fortification in

Nepal in 2006,” informs Shah. New flavours have been introduced. Quick, a variant

of Wai Wai comes in various flavours like Schezwan chicken, Manchurian veg, Chicken

curry, Veg curry, Chicken pizza and Kimchi. 

“Three years back, Mayos used to be our biggest competitor but currently we are at the

top,” claims Shah. 

For the last three consecutive years, Wai Wai stood as the number one brand according to

the research done by ACNielsen, Nepal. Wai Wai is the member of World Instant Noodle

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD xx

Association, Japan since 2007 and is also the member of Snack Food Association, USA.

“We have a strict quality control practice,” says Shah. The Quality Assurance and

Quality Control Division go through all the processes from manufacturing to packaging.

Time and again, health concerns are raised regarding use of monosodium glutamate as

one of the ingredients in Wai Wai. Shah defends the use by saying, “Japan has the highest

per capita consumption of monosodium glutamate and Japanese have the highest life

expectancy in the world.” 

Shah informs that the cost of production has been increasing as input costs are on the rise.

Costs of wheat, flour, oil and spices have been increasing. In addition, load shedding and

transportation also affect production. “However, we have reduced and stabilized the

prices with better plant efficiency,” shares Shah. 

The annual growth rate for instant noodles has been 20 to 25 per cent in the last five

years. “Chaudhary Group as a company holds a market share of 42 per cent

and Wai Wai as a brand holds a market share of 25 per cent in Nepal,” says Shah. The

brand plans to continue its innovation and introduce new flavors and products. “A third

plant is in the pipeline which will increase our efficiency,” informs Shah.

2.1.3 Mondelez launches Cadbury Bournvita biscuits in India 

As per The Econimic Times, (April 19, 2016), Confectionery giant Mondelez today

launched its second biscuit brand 'Bournvita' in India, five years after it first entered the

segment with highly popular 'Oreo'. 

"Cadbury Bournvita is our second offering in the biscuit space in India. It has been

developed specially for the Indian market. Biscuits category in India is estimated to be

around Rs 25,000 crore and has been growing steadily," Mondelez India Foods Managing

Director Chandramouli Venkatesan told PTI. 

Priced at Rs 10 and Rs 25, Bournvita cookies are pitched for morning snacks and would

be available on shelves from May. 

"Bournvita biscuits is targetted to the morning occasion, when 45 per cent of biscuits are

consumed. We have sharp focus on that occasion and we want to base this whole

proposition on strong sustainable competitive advantage and that come from Bournvita

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD xxi

brand," said Mondelez India Foods Associate Director Marketing Biscuits India and Kids

Fuel AP Chella Pandyan. 

He further said the extension of its health drink brand Bournvita would help its heritage

and legacy along with taste in the segment. 

"We wanted it to be acceptable from both as a price and product standard," he added. 

The company, which is present in chocolates, beverages, biscuits as well as gums and

candy segments would continue to add new brands from its global portfolio. 

Since the past four year the company has been focussing on rural sales and has created a

separate hub to cater to tier III and IV markets. 

"We have a very aggressive rural drive for the last three to four years and are seeing

tremendous success. Rural markets are definitely growing fast. We have sustained

intervention in terms of creating market and establishing coverage there and it’s working

well," said Venkatesan. 

When asked if the biscuit range will cannablise into the beverage Bournvita's sales,

Venkatesan said: "Our expectation is that there will be very low cannabalisation."

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD xxii

2.2 Theoretical perspective

Marketing Mix

The marketing mix refers to the set of actions, or tactics, that a company uses to promote

its brand or product in the market. The 4Ps make up a typical marketing mix - Price,

Product, Promotion and Place. However, nowadays, the marketing mix increasingly

includes several other Ps like Packaging, Positioning, People and even Politics as vital

mix elements. All the elements of the marketing mix influence each other. They make up

the business plan for a company and handled right, can give it great success. But handled

wrong and the business could take years to recover. The marketing mix needs a lot of

understanding, market research and consultation with several people, from users to trade

to manufacturing and several others.

The 4Ps of marketing is just one of many lists that have been developed over the years.

They are just a subset of the detailed probing that may be required to optimize the

marketing mix. The importance of a marketing mix is that companies are reminded that

there are a lot of factors to look into in order to succeed in business. It isn’t enough to

promote–one should see to it that the product is of good quality, is sold at a price that

matches its target market and quality, and that it is easy to acquire (Marketing mix, n.d.)

Social Marketing Theory

Social marketing theory is a theory of mass communication that promotes socially

valuable information and socially accepted behaviors. It tries to integrate marketing

ideas, principles, tools, techniques and socially beneficial concepts to promote

communication and benefit society. The theory emerged in 1970s when marketing

techniques were realized to sell ideas, attitudes and behaviors rather than products and

includes the concept of “Edutainment” (Education and Entertainment). The theory was

proposed by (Kotler and Zaltman, n.d.) which is now being used by social and welfare

organizations. Social marketing is not social media marketing.

Social Marketing Theory is a framework that is helpful in planning, designing,

implementing and evaluating social campaigns with information sharing as its major

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD xxiii

objective. It uses creativity, rather than depending on public service announcements, like

in the past for giving out information. Information is packaged and distributed following

a plan so that maximum sharing and outcome is possible. Social marketing tries to

understand social and psychological factors which bring resistance to change in society.

It increases acceptability, response and practice of any social idea for target group.

Techniques of marketing like market segmentation, exchange theory and consumer

research are used extensively. Social intervention is the main objective of social

marketing.

There are two types of social marketing: Operational social marketing and strategic social

marketing. Operational social marketing is used to change behavior, whereas strategic

social marketing is used to form new policies and development strategies.

2.3 Conceptual framework

Independent Variables Dependent Variable

Figure 1: Conceptual body of the market and consumer satisfaction on the product

Price

Product

Place

Promotion

Market strategy

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD xxiv

Marketing strategy is one of the major elements of export performance and one of the key

factors impacting export performance. Researches on the significance of the marketing

showed a strong association between export marketing strategy and export performance;

a positive and direct impact of marketing strategy on export performance of the firms in

question. Salavou and Halikias (2008), in their study, also found that the majority of

exporter companies that obtained higher profitability, was due to their marketing-based

strategies. Also in the research by Abdul Adis and Md.Sidin,(2010) revealed that there

were no direct or significant relationship between export marketing strategy(concluding

product adaption, promotion adaption, distribution strategy, design strategy, price

competitiveness, support to foreign distributer, target market specification) and export

performance of Malaysian wooden furniture industry. In brief, although a few studies

mention there is not any relationship, most of researchers concluded that marketing

strategy had significant positive effects on export performance and it was an important

part of studies that had been evaluated many times. At the commencement of the new

millennium, small businesses are being heralded as the engine of economic growth, the

incubator of innovation, and the solution to decades of persistent unemployment the

fulfillment of the enormous potential of the sector has been a consistent theme since the

commencement of industrial revolution.

In the above figure, Market Strategy is a dependent variable whereas price, product, place

and promotion are independent variables. The price of a product directly affects the

marketing strategy. If a product is high in price, then the consumer may not prefer to buy

it and if it is low priced then the company may suffer from loss. So the company must set

a reasonable price as it’s the part of their marketing strategy.

The product also plays a vital role. Its quality, quantity, packaging etc. also adds a factor

in market strategy. The product should be adequately produced considering its quality

and quantity in a right order. Similarly its packaging should also be taken care of as it

will be a strong factor to attract a consumer.

Market strategy is also affected by the place. The placing in marketing mix signifies the

target market of the product, ie: where the product is dispersed. Placement or distribution

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD xxv

is a very important part of the product mix definition. One has to position and distribute

the product in a place that is accessible to potential buyers. This comes with a deep

understanding of your target market. Understand them inside out and you will discover

the most efficient positioning and distribution channels that directly speak with your

market.

Promotion is also responsible to affect the market strategy. Promotion of a product is

done so that the people will get to know about it. It should be done in an effective way.

Promotion is the act or fact of being raised in position or rank (Merrian webster).

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD xxvi

CHAPTER III

RESEARCH METHODOLOGY

3.1 Research Design

Research Methodology simply refers to the methods that are going to be taken into

account for conducting the study of the topic chosen. In order to carry out any research

investigation there is a need of a Systematic method and to adopt a well-defined

procedure for each and every research there is also a need of methodology. Methodology

of any research constitutes the selection of representative sample of the universe or the

general population, application of the appropriate research tools and the techniques.

In my research I have used the Qualitative Research Methodology. Quantitative research

is about asking people for their opinions in a structured way in order to produce hard

facts and statistics to guide for preparing the report analysis. To get reliable statistical

results, it’s important to survey people in fairly large numbers and to make sure they are a

representative sample of the target market. Denzin and Lincoln (2005) describe

qualitative research as involving “an interpretive naturalistic approach to the world. This

means that qualitative researchers study things in their natural settings, attempting to

make sense of or interpret phenomena in terms of the meanings people bring to them”. 

Qualitative research methods originated in the social and behavioral sciences: sociology,

anthropology and psychology. Qualitative research is designed to reveal a target

audience’s range of behavior and the perceptions that drive it with reference to specific

topics or issues. It uses in-depth studies of small groups of people to guide and support

the construction of hypotheses. The results of qualitative research are descriptive rather

than predictive.

Thus, I applied Qualitative Research method under which interview and case study

approach of data collection is used to get a deeper insight about the rural market situation

of FMCG delivered by Chaudhary Group. Qualitative research helps to get an

understanding through a behavioral perspective that provides information collected in the

natural habitat of the observation and the observant.

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD xxvii

3.2 Data Tools and Collection

The related data were all collected through direct personal interview and secondary

sources as well. The questionnaires asked to the respondent having the reliable data

related to the research were made simple and in the easiest manner possible. The data has

been collected in a qualitative way of order.

3.3 Nature and source of data

The research has been conducted with the data collected on the basis of direct personal

interview and questions. The essential documents and information has been extracted

from the primary sources but there were such information which could not be accessible

to the general sample public. So, in such case secondary data have been used as well.

3.4 Study Population

For this course of study I have interviewed 3 of the much found professionals from

Chaudhary Group itself. The Interview was taken from the personals who are themselves

involved in the strategy formulation procedure in the company.

The sample populations from which I have extracted the information have been well

knowledge individuals from the company itself including the employees and staffs. The

sample population is small but can be taken out from a diversified background with

people coming from different ethnography, geography and having different preferences.

Disclosure of the respondents name is unethical thus, pseudo name of the participants are

used.

3.5 Ethical Consideration

Some of the questions could make the respondents feel uneasy. To receive the Answers,

informal dialogue and discussion was held with the informants. (Murphy and Dingwill,

2006) Speak of “ethical theory in this context, which they see linked to four issues. I

have used Non malfeasance i.e. avoidance of harming participants. The next one is that

the research that I conducted is used to produce some positive and identifiable benefit

rather than simply be carried out for its own sake; denoted as Beneficence. Also, I respect

the values and decisions of the participants. Lastly, I have treated all the participants

equally.

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD xxviii

CHAPTER IV

DATA ANALYSIS

4.1 Marketing towards the people in rural areas

CG as it has ruled over FMCG products in Nepal for a very long time is basically known

for its product WAIWAI which is known to all. There’s no such person who has not

come across WAIWAI in the entire nation but there are some rural and remote areas

where CG has not been able to spread its hands.

The people from such remote lands are still unaware about the convenient food that they

get in a very reasonable price for instance.

Mr. Sapkota states “CG is focusing on marketing through banners and hoarding boards

which are kept outside the shops of rural areas”. The shopkeepers love to keep it at their

shop as the advertisement trend is very low in such areas. He says that only a handful of

shops are available in such remote places and all the villagers come to the very same

place through which the marketing is done through the hoarding boards in the shops.

Mr. Shrestha says, “Marketing is really tough in such areas as there is no alternative

source of media to publish an advertisement.” He describes marketing through word of

mouth is the best alternative.

4.1.1 Marketing tools that are in use

Mr. Shrestha as a marketing professional focuses on the very same 4p’s of marketing

which consist of product, price, placing and promotion. In rural marketing price is an

essential factor as people with low level of income are more in number so they value

even a single rupee before spending it on any commodity unlike the people living in the

urban and semi-urban region.

He clearly states ‘quality is not an important measure but price is’.

Mr. Karki who also works in the same department refers the tools to the marketing in a

different perspective as he suggests pamphlets and leaflets can work out as a very

effective tool to marketing and word of mouth can be very useful.

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD xxix

Tapping the rural market: While rural sector constitutes an attractive and sizeable

market, firm have to strive hard for securing a share of it. (Marshall) Practically in every

task of marketing, rural marketing poses some unique problems. The major tasks that

need unique handling in rural marketing are Segmentation and targeting, product

management, physical distribution and channel management.

4.1.2 Retaining the costumers from the rural areas

Costumer Retainment is harder in the rural areas as there is no brand preference and

loyalty from the costumer’s point of view. Costumer seeks for a product which is cheap

and comes in huge quantity.

According to the respondents CG is basically working on the price segmentation to its

product which divides the product to its price and can target various categories of

costumers. This can help in costumer retainment as the cheaper product is available in the

market and it also come in the exact standard quantity. CG has been producing economy

class products as well which target these groups. ie. WAIWAI TENZ is available in

market at rs.12 only. Therefore, in such areas price is the only factor that can retain

customers.

4.1.3 Target market of CG

According to Mr. Sapkota who has been working on some research based on the target

market of the CG foods. He states western Nepal is focused more in the present context

as WAIWAI product are new in that sector.

People have a different craze about the product and they value it as a very prestigious and

healthy diet that can even be served to the guest arriving at our house.

He shares his experience when he was at bajhang, tamohill. His research team and he

himself went for a survey camp to the western Nepal and one evening they went to a

local restaurant near by the village.

They ordered the local ‘dal bhat and tarkari’, minutes after the waiter comes up with a

‘dal’ made up of WAIWAI noodles.

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD xxx

Mr. Sapkota asks “Bhai yo k banako?,dal magako timile tah chauchau lyayou”.

The owner replied “kasto manche hola chauchau ko dal pauda pani nakhane”.

So, then he finally understood that people from western Nepal value WAIWAI noodles

and they find it very healthy and prestigious as well.

There’s a reason behind the building craze of western people towards noodles as CG has

just established a new WAIWAI plant in the western Nepal and are planning to open up a

new outlet in the eastern Nepal as well. Till date there are 3 CG food outlet in Nepal and

11 outlets in India.

4.2 Products that people with low income can afford

Producing products with low cost is entirely based upon how much is the cost of

production from the inventory phase to the final product development phase. If

production cost can be minimized then the rice falls down automatically.

4.2.1 Products that fall under the price range focused to the target audience

According to Mr. Karki, he states, “Cutting down unnecessary cost while production is

necessary but minimizing the production cost to create a low cost product having low

quality is the answer to the problem”. Product segmentation is the only way, by which

different product can be produced at the company and the products must be segmented

according to the target market.ie: CG produces three categories of noodles:

Premium noodles that is the original WAIWAI itself, it basically sells in the Urban area

and competes with RUMPUM and MAYOS and costs around 18 rupee.

Regular noodles are midrange product focused more on flavor and taste rather than

quality of the product. It falls under the mediocre level product for example WAIWAI

Quiks which competes with preeti and ABC and costs around 15 rupee.

And finally there’s this economy class product especially made for the low income

earning consumers which is comparatively cheaper but does not vary much in taste but

does vary a lot in quality for example WAIWAI TENZ which competes with pet puja and

hurray and costs around 13 rupee in the market.

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD xxxi

Therefore, product and price segmentation according to the market structure can help to

introduce products that fit all categories of income earning costumers.

4.2.2 Pricing strategies of the product distributed among the low income

costumers

Good pricing strategy helps to determine the price point at which we can maximize

profits on sales of the products or services. When setting prices, a business owner needs

to consider a wide range of factors including production and distribution costs,

competitor offerings, positioning strategies and the business’ target customer base. While

customers won’t purchase goods that are priced too high, company won’t succeed if it

prices goods too low to cover all of the business costs. Along with product, place and

promotion, price can have a profound effect on the success of the business.

Mr. Sapkota and Shrestha agree on the same point that can help to formulate pricing

strategy of the product distributed among the low income costumers.

Pricing at a Premium

With premium pricing, businesses set costs higher than their competitors. Premium

pricing is often most effective in the early days of a product’s life cycle, and ideal for

small businesses that sell unique goods. Because customers need to perceive products as

being worth the higher price tag, a business must work hard to create a value perception.

Pricing for Market Penetration

Penetration strategies aim to attract buyers by offering lower prices on goods and

services. While many new companies use this technique to draw attention away from

their competition, penetration pricing does tend to result in an initial loss of income for

the business.

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD xxxii

Economy Pricing

Used by a wide range of businesses including generic food suppliers and discount

retailers, economy pricing aims to attract the most price-conscious of consumers. With

this strategy, businesses minimize the costs associated with marketing and production in

order to keep product prices down. As a result, customers can purchase the products they

need without frills.

Price Skimming

Designed to help businesses maximize sales on new products and services, price

skimming involves setting rates high during the introductory phase. The company then

lowers prices gradually as competitor goods appear on the market.

4.3Awareness through advertisements

There are no such huge advertisement campaign done in the rural areas but advertisement

on small scale is always done through various Medias like Local FM, hoarding boards

and posters (DPS), trade fare, cultural festival, NGO and INGO (CG Unnati)

4.3.1 Advertisement and sales promotion strategies in the rural market

The advertisement and sales promotion strategies are almost the same but to increase the

sales CG focuses on providing customers with skims that attract the costumer to buy their

products.

Various skims and offers with huge amount of return are provide to the costumers in

order to maximize the sales. Costumers of rural area are more inclined towards luck and

faith so it utilizes this benefit the skims can help a lot.

Costumer buy product in greed to get an offer that can benefit them with something and

end up in buying lot of it.

The skims and offers vary from small amount of cash back offer to offers that can get you

a car and an apartment to live for free. These skims and offers according to Mr. Sapkota

attract a lot of costumer in the rural segment.

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD xxxiii

4.3.2 Rural communication strategies and its impact

“Advertising goes hand in hand with economic growth”, says Mr. Karki. With economic

liberalization and increasing rural prosperity, marketers are keen to inform villagers about

the benefits of buying and consuming their products and services.

The rural environment is different from the urban and therefore communication to

potential customers in a proper and effective manner is a major challenge for corporate

marketers. The majority of advertisements designed by corporate marketers, are largely

urban oriented and extend themselves to rural areas without any consideration to the

values and sensitivities of the rural audience, which are often in striking contrast to those

of their urban counterparts. This has led to a negative perception in the minds of

villagers, about urban media planners and advertisers. Rural communication is not a

'peripheral activity'.

Rural media can be classified broadly into conventional mass, non-conventional media

and personalized media. The various media vehicles are as follows:

Conventional Mass Media Non- Conventional Media Personalized Media

Television Haat and Mela Direct Mailer

Radio Folk Media (puppet

show,magic show)

Point of sale

(demonstration, leaflet)

Press Video van Word of mouth

Cinema Mandi Interpersonal

Communication

Outdoor: wall painting,

hoardingAnimator

4.3.3 Effect of Advertisement on purchasing decision

Advertising is the key for building, creating and sustaining brands. Advertisements play a

major role in persuading, informing and reminding both potential and existing customers

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD xxxiv

towards making a purchase decision. It plays a vital role in shaping dreams and

aspirations and helps customer take conscious product and brand decisions.

Advertisements with endorsements create easy remembrance for the customers for the

advertised brand or product as the customers associate the brand with the celebrity and

can easily register the brand. Measuring the influence of Advertisement in Consumer

Brand Preference is very essential for every marketer. If advertisement does not create

any positive change in consumers’ brand preference, all the resources such as money,

time and efforts spent on advertisement will go in vain. Advertising also helps in creating

Top of the Mind Awareness of a brand and aims at facilitating brand recall.

Mr. Sapkota clearly states “we create advertisements in order to control the mind of

costumer to make them buy our product”. What he says is, repetition of a single

advertisement over times creates an impact on a costumer’s brain and whenever he goes

to the market to buy a similar product with the similar features the recalls of the

advertisement and finally he ends up buying the destined product.

Advertisement creates a long term impact on a costumers head as it strikes him back

again when he see the product but he also says that our market is homogenous and the

costumers forget very easily so even if continuous featuring of the same advertisement is

not necessary it must be shown and presented. Otherwise the costumer will forget it and

shift to any other product.

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD xxxv

CHAPTER V

FINDINGS AND DISCUSSION

5.1 Findings of the study

In respect to our primary research questions and the data that are extracted the findings of

the study shows that people from such remote lands are still unaware about the

convenient food that they get in a very reasonable price for instance. In rural marketing

price is an essential factor as people with low level of income are more in number so they

value even a single rupee before spending it on any commodity unlike the people living

in the urban and semi-urban region. Participants CG is basically working on the price

segmentation to its product which divides the product to its price and can target various

categories of costumers. This can help in costumer retainment as the cheaper product is

available in the market and it also come in the exact standard quantity. The basic findings

from our second question is cutting down unnecessary cost while production is necessary

but minimizing the production cost to create a low cost product having low quality is the

answer to the problem. Product segmentation is the only way; by which different product

can be produced at the company and the products must be segmented according to the

target market. The price and the products are segmented into three different categories

ranging from premium class which cost around Rs.18, regular class which costs around

Rs.15 and the economy class specially designed and produced for the rural market which

cost around Rs.12. the research question also focuses on the pricing strategies of the

products targeted to various costumers. Pricing at a Premium, pricing for market

penetration, economy pricing, price skimming are the fundamental pricing strategies used

in rural marketing.

The final question answers the strategies used in advertising the product in the rural

market segment. The advertisement and sales promotion strategies are almost the same

but to increase the sales CG focuses on providing customers with skims that attract the

costumer to buy their products. The rural environment is different from the urban and

therefore communication to potential customers in a proper and effective manner is a

major challenge for corporate marketers. The majority of advertisements designed by

corporate marketers, are largely urban oriented and extend themselves to rural areas

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD xxxvi

without any consideration to the values and sensitivities of the rural audience, which are

often in striking contrast to those of their urban counterparts

Rural Demand: - Rural demand has grown steadily over the years. Not only has the

market grown in quantitative terms, but qualitative terms too it has undergone a

significant change. Change in the composition of Rural Demand

The composition of rural demand has also been changing significantly in recent years.

Many new products have entered the consumption basket of the rural consumers. and the

relative shares of the different categories of products in the consumption basket .The

upper segments, in particular, have started buying and using a variety of modern

consumer products, which were till recently unknown in the rural market. Several

products already well established in the rural market Marketers cannot now assumes that

rural consumers consumes only certain traditional/ essential products and that its share in

other product category is meager.

5.2 Discussion

Rural Marketing has evolved over the years and its definition has kept changing with the

time. In simple words, rural marketing is the promotion of the products by a company in

rural markets with strategies which differ from those used in urban markets.

In the above findings and showcasing cost is a fundamental variable as individuals with

low level of salary are more in number so they esteem even a solitary rupee before

spending it on any item dissimilar to the general population living in the urban and semi-

urban district. Respondents CG is essentially taking a shot at the value division to its item

which separates the item to its cost and can target different classifications of costumers.

This can help in costumer retainment as the less expensive item is accessible in the

market and it likewise come in the correct standard amount.

Product and pricing segmentation is the main path; by which distinctive item can be

created at the organization and the items must be portioned by target showcase. The cost

and the items are sectioned into three distinct classifications running from premium class

which cost around Rs.18, normal class which costs around Rs.15 and the economy class

exceptionally composed and delivered for the country advertise which cost around Rs.12.

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD xxxvii

the exploration address additionally concentrates on the valuing procedures of the items

focused to different costumers. Estimating at a Premium, valuing for market infiltration,

economy evaluating, value skimming are the central evaluating procedures utilized as a

part of rustic promoting.

The provincial environment is not the same as the urban and along these lines

correspondence to potential clients in a legitimate and powerful way is a noteworthy test

for corporate advertisers. The research done shows that there is a huge potential for the

already growing FMCG sector, and companies need to form right rural marketing

strategies so as to take full benefit of the opportunities in the rural market. As the urban

market is already saturating, going rural gives companies not only a diversifying factor

but also a competitive advantage over their competitors who are yet to cater to the rural

audiences.

However, there are certain challenges and these will have to be taken care of in the

strategy for rural markets to grow. Most rural families take pride in the fact they do not

buy many products for their daily living. They try to grow most of the food items that

they need and generally avoid using products that they have to buy. They will substitute a

product that they have to buy with the one that they have. These practices are not entirely

due to ignorance but because of the guilt that they feel when they buy consumable

product. CG food cannot reach the rural market by invading it, the companies will have

to know and understand the substitutes or home-made products that rural consumers use

in their daily lives. The companies will have to demonstrate to rural consumers that their

products are better than the home-made products that they use. The framework that is

introduced for marketing channel strategy in rural emerging market is meant to help

companies navigate the challenging operating environment. By educating consumers,

designing creative affordability strategies, and building brand trust, companies will be

able to unlock rural customers‟ latent desire to consume. By designing appropriate

distribution networks and constructing trustworthy distribution channels, companies will

be able to make products available when and where rural consumers expect them.

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD xxxviii

CHAPTER VI

CONCLUSION AND IMPLICATIONS

6.1 Conclusion

The core of a scientific approach is to understand the market opportunities for rural

products along with the country's development priorities and to chalk out a strategy

where rural industries have an important role to play. While rural products are forced to

increasingly become part of global supply chains, these products need to adapt

themselves, not only according to the changing tastes of the national market, but also

according to changes in tastes in the international market.

In this paper I suggest that the key to building a successful marketing channel in a rural

emerging market depends on a company’s ability to activate customers, deliver products,

and maintain products. CG is able to produce and distribute its various product ranges to

the rural market place and is successfully able to stratify its product according to the

varying price range which is targeted to the specific range of costumer. CG has been able

to strategize its product positioning, pricing, placing and promotion model into the rural

context and is able to get the maximum return out of the investment.

Thus, looking at the challenges and the opportunities, which rural markets offer to the

marketers, it can be said that the future is very promising for those who can understand

the dynamics of rural markets and exploit them to their best advantage.

6.2 Implication

The implication of the rural marketing concept is very applicable in such areas. The

findings extracted from the data collected are presented with the various techniques.

Implication for distributors

This research provides a brief framework on how the food product is supplied over the

market and how the marketing channels work in process to increase the demand of the

costumer which significantly increases the supply ultimately profiting the company. The

distribution channel can study the strategies adopted by CG and implement in order to do

business in the rural sectors.

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD xxxix

Implication for the marketers

Marketers of the company are the people who formulate strategies based on the situation

of the market and the various determining factor of the uprising market scenario. The

changed economic conditions are affecting consumer behavior and attitudes. Can the

marketing strategies based on the understanding of the consumers in the prosperous times

still hold, this is the question that is to be asked to the marketers? Consumers are

changing their behavior in several different ways and various underlying attitudes and

values govern these changes. It is critical for the marketers to re-look at the consumer and

refresh their understanding to fine tune the marketing strategies.

Implication for consumers

The research provides a brief insight about the pricing strategies and product positioning

in the market which is relevant to the marketing mix. It is essential for the costumer to

know the price of the product according to various regions and segment of the target

market. Price may vary according to the geographical dispersion and the quality may

differ as well because the pricing strategies and product development is also done in the

same context. The skims provided with the product may differ as consumer from various

regions may have various need and demands.

Implication for competitors

The research work may be useful for the competing parties to the organization who have

been constantly trying to compete in the market. They may find the information relevant

and useful as it contains all the product and pricing strategies adopted by CG Food. The

competing companies like Mayos, Preeti, Rumpum can implement the same strategies to

overcome the market gap or they can even develop an advance strategy based on which

can be used for marketing their own product. The data and information about the

competitor can always come in handy as potential competitor should always be taken

care after and the strategies of the competitors should always be forecasted in order to

take some immediate actions if necessary.

RURAL MARKETING STRATEGIES ADOPTED BY CGFOOD viii

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APPENDIX

Semi-structured Interview Questions (Interview Schedule)

The information gathered with the help of this interview schedule is confidential and will

be exclusively used for partial fulfillment for the requirements for the Bachelors in

Business Administration in Pokhara University, Nepal. The aim of the research is to

“Understanding the Rural marketing strategies adopted by Chaudhary Group”.

Topic: Rural Marketing Strategies Adopted BY CG Food

Thank you.

Sanjit Khadka

Undergraduate BBA Student, Pokhara University, Nepal

Rapport Building

How is CG focusing on marketing towards the people in rural areas?

What are the marketing tools that are being used?

How is CG retaining the costumers from the rural areas?

What is the target market of CG for Rural marketing?

How can they introduce products that people with low income can afford?

What are the products that fall under the price range focused to the target

audience?

What are the pricing strategies of the product distributed among the low income

costumers.

What kind of advertisement actions are done so that the people of rural areas are made

aware about the products?

What are the advertisement and sales promotion strategies in the rural market?

What are the rural communication strategies and its impact?

How the advertisements effect the purchasing decision of the product?