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STUDY ON THE DEMAND EXISTING IN THE RURAL
MARKET FOR AMRIT WATER PURIFIER
SUBMITTED TO: Dr. P. Sathyapriya
BY GROUP - 3
Vaishnavi P
Ankur Verma
Anubhav Gupta
Ashraf Basarikatti
Ashis Ranjan
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EXECUTIVE SUMMARY___________________________
The increase in the number of people becoming conscious of the risks of
drinking contaminated water has led to the rapid rising demand for waterpurifiers. The Indian rural market with its vast size and demand potential offers
great opportunities to the marketers. Even though the rural market is large in
size and potential, marketers are not able to reap profits out of the opportunities
in the rural market because of the obstacles they are facing in the rural areas.
The problems like geographic spread and low population density and low
purchasing power posed a great challenge to the marketers in taking the productto the rural market. Apart from this the vast display of buying behaviour in rural
segment challenges the marketers in understanding the factors influencing the
buying decision of the consumers. This study seeks to understand the influence
of various factors in the buying decision of the rural consumers which would
help to study on the demand for the product AMRIT water purifier of Eureka
Forbes. This study is purely based on the primary data collected using
questionnaire. The sample size is 50, taken from the village Anekal. The
findings from the study indicate that monthly family income has greater
influence on the buying decision of the rural consumers in Anekal. The
marketing implications to increase the demand for the product is given based on
the findings.
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TABLE OF CONTENTS
Serial
Number CONTENTS Page Number
1. Executive Summary 2
2. Introduction 4
3. Literature Review 5
4. Research Problem 7
5. Research Objective 8
6. Hypothesis 8
7. ResearchMethodology 9
8. Data Analysis 9 - 17
9. Findings 17
10. Limitations 18
11. Conclusion 18
12. Appendix 19 - 21
13. References 22
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INTRODUCTION_____________________________
Pure and safe drinking water has always been a necessity. In the past few years,
Indian water purifier industry has witnessed an exponential growth of 22%
CAGR. The water purifier industry sales grew dramatically during FY09 as
compared to previous fiscals due to improving demand and expanding
production capacity. The industry saw high growth of rate 17% during FY08
due to the increasing awareness for safe drinking water. According to Research,
Indian Water Purifier industry will continue its growth trajectory and is
expected to witness a turnover growth of more than 22% CAGR during the period between FY11 and to FY14. The Indian market has tremendous
potential which is more evident from the fact that global majors such as Philips
and Hindustan Lever have stepped in and are looking to increase their share of
the market. The three principal players today are Eureka Forbes, KENT RO and
Ion Exchange (PRLog, 2010). [1]
INDIAN RURAL MARKET:
India lives in villages, close to 72 percent of Indian population lives in rural
areas. In the country we have 6.36 lakh villages out of which only 13 percent
have population above 2000. More than 50 percent of the sales FMCG and
Durable companies come from the rural areas. The McKinsey report (2007) on
the rise on consumer market in India predicts that in twenty years the rural
Indian market will be larger than the total consumer markets in countries such
as South Korea or Canada today, and almost four times the size of todays urban
Indian market and estimated the size of the rural market at $577 Billion.
According to NCAER 2002, the number of rural middle class households
at 27.4 million is very close to their urban counterpart at 29.5 million. And
between, 1981-2001 there has been tremendous improvement in the literacy
levels, poverty and rural housing in the villages of the country. Rural literacy
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levels have improved from 36 percent to 59 percent, the number of below
poverty houses have declined from close to half to 46 percent and the numbers
of well built houses have doubled from 22 percent to 41 percent. These figures
provide us with a clear picture that rural India with the increase in agricultural
income and improving standards is on the verge of becoming a large untapped
market which marketers have been aspiring for a very long period of time. Thus
the current status of rural markets makes it an attractive market for marketers
(Aithal, Mukhopadhyay). [2]
LITERATURE REVIEW____________________________
Rural markets in India constitute a wide and untapped market for many products
and services which are being marketed for the urban masses. The rural market
provides vast potential as many new products have already made their entry into
the rural consumer basket. In spite of its large size and high potential, many
marketing firms are not able to avail the opportunities in rural market because of
problems in selling the goods in rural areas (Rao, 2002). This posed manychallenges to the marketers; the first is posed by the geographic spread and low
population density in the villages in the country. The second challenge is from
the low purchasing power and limited disposable incomes in these parts of the
country. But this has been changing in the last few decades. [3]
The current scenario is that about 70% of Indias population lives in rural
areas. Consumers in this segment have displayed vast differences in their
purchase decisions and the product use. Understanding the consumer behaviour
is vital while marketing the product in the rural segment. (Loya,). [4] In recent
years, the rural consumers are discerning and the rural market is more vibrant.
Considering the rate of growth in these markets, it will soon become more
successful than the urban market. (Adi, Godrej)
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The factors influencing the rural consumer behaviour are:
1. socio-economic environment of the consumer2.
education/literacy level
3. occupation4. exposure to urban lifestyles and media5. involvement of others in the purchase decision6. marketers effort to reach out the rural markets (Rao, 2008)
Socio-economic environment of the consumer influences the buying decision to
a greater extent. The income level and the standard of living have a major role
to play. Rural segments are ignored by few companies because of the low
income level and the conservative attitude of the people in rural areas.
Literacy level of the consumers in the rural market in turn explains the
awareness of the consumers on health issues. Educated people tend to be more
health conscious. Consumers with low-literacy level might want the product if
proper awareness is given about water borne diseases and the importance of
purified water.
Consumers in rural market might be self-employed or employed in other firms.
Consumers depending on monthly income will be more conservative. Their
perceptions and the buying decisions might be influenced by the occupation
factor.
Rural consumers prefer to stay in the village rather visiting nearby towns except
for markets. They may not have exposure to the urbanized life. This might
influence their acceptance for a product. Also, the exposure to media influence
on the perceptions and the buying decision of the rural consumers.
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Involvement of others in the purchase decision is yet another factor in this
regard. There has been a change in the recent years. In the past, the head of the
family used to make the purchase decision all by himself. In contrast, the
involvement of the other members of the family has been growing in recent
years. An increase in literacy coupled with greater access to information has
resulted in this development.
The consumers in the rural segments are ignored by most of the companies
because of the infrastructure and the cost of reaching out. It is marketers
responsibility to find the selling practice which would make the consumers
comfortable and get awareness about the product. The method of selling might
influence the buying decision of the consumer. [5]
RESEARCH PROBLEM____________________________
In view of the above discussion, this study cites the problem whether Amrit
water purifier of Eureka Forbes will be accepted by the rural consumers in
Anekal. The rural consumers have been displaying vast buying behaviour. The
factors influencing the buying decision in rural segments differ from place to
place. This study attempts to study on the consumer behaviour in Anekal market
where Eureka Forbes intends to penetrate.
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RESEARCH OBJECTIVE__________________________
The objective is to make a study on the demand for the product Amrit water
purifier of Eureka Forbes in the rural market Anekal. In order to make a study
on the demand for the product, the marketer should understand the factors
influencing the buying behaviour of the rural consumers in Anekal. We consider
the factors mentioned in the previous study on the consumer behaviour in the
rural market and determine the factor which has most significant influence on
the demand for the product in Anekal market.
HYPOTHESIS_____________________________________
The null hypothesis for the influencing factors considered:
H1: there is no significant influence of the socio-economic factor on the demand
for the product
H2: there is no significant influence of the educational factor on the demand for
the product
H3: there is no significant influence of the occupation factor on the demand for
the product
H4: there is no significant influence of the exposure to urban lifestyles and
media on the demand for the product
H5: there is no significant influence of the involvement of others in the purchase
decision on the demand for the product
H6: there is no significant influence of the marketers effort to reach out the
rural markets on the demand for the product
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RESEARCH METHODOLOGY_____________________
In order to understand the perceptions and the buying behaviour of the
consumers in Anekal, a descriptive research has been carried out to describe the
data and the characteristics about the observations, seeking better understanding
about the buying behaviour of the rural consumers. This study is based upon the
primary data collected from the sample population in Anekal.
The population of this study is taken from Anekal, a rural area quite far from
the city zone. The sample size is 50 using simple random sampling out of the
whole population available in Anekal. The data was collected using
questionnaire comprising of the consumers demographic profile and questions
probing the factors influencing the buying behaviour will be developed as
follows;
What is your occupation? What is your income level? Do you think purifying water will avoid health issues to some extent? What method would you prefer to purify the water? How often you visit cities? Who makes the buying decision in your family? Have you heard about the product amrit water purifier? Would you like to prefer Amrit water purifier?
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DATA ANALYSIS_________________________________
In this study the dependent variable is the demand for the product in Anekal and
the influencing factors are the independent variables. The influencing factors
considered in this study might not have a significant relationship with the
dependent variable because it varies from place to place.
Correlation test will be conducted to verify if there exist a significantrelationship between the dependent and the independent variables.
ANOVA will be conducted to validate and get the values for regressionmodel
Regression analysis will be done to determine the coefficients ofcorrelation in order to understand to what extent each factor influences
the dependent variable demand for the product.
STATISTICAL REPRESENTATION OF MARKET SURVEY :
CORRELATION:
Educa
tion
level
Occ
upati
on
Mont
hly
Inco
me
Buyin
g
Decisi
on
Visit
to
city
Exposu
re to
media
Type
of
selling
Dem
and
Educationlevel
PearsonCorrela
tion
1 -.175
.372
**
.237 .296
*
.224 -.146 -.156
Sig. (2-
tailed)
.224 .008 .098 .037 .118 .313 .279
N 50 50 50 50 50 50 50 50
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Occupation Pearson
Correla
tion
-.175 1 -.159 -.160 .073 -.131 .328* .088
Sig. (2-
tailed)
.224 .269 .268 .615 .366 .020 .545
N 50 50 50 50 50 50 50 50
Monthly
Income
Pearson
Correla
tion
.372** -
.159
1 .297* .382** .259 -.114 -
.598*
*
Sig. (2-
tailed)
.008 .269 .036 .006 .069 .431 .000
N 50 50 50 50 50 50 50 50
Buying
Decision
Pearson
Correla
tion
.237 -
.160
.297* 1 .276 .288* .041 -
.298*
Sig. (2-
tailed)
.098 .268 .036 .052 .043 .776 .036
N 50 50 50 50 50 50 50 50
Visit to city Pearson
Correla
tion
.296* .073 .382** .276 1 .209 .072 -.252
Sig. (2-
tailed)
.037 .615 .006 .052 .146 .618 .077
N 50 50 50 50 50 50 50 50
Exposure to
media
Pearson
Correla
tion
.224 -
.131
.259 .288* .209 1 .182 -.181
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Sig. (2-
tailed)
.118 .366 .069 .043 .146 .205 .210
N 50 50 50 50 50 50 50 50
Type of selling Pearson
Correla
tion
-.146 .328* -.114 .041 .072 .182 1 .020
Sig. (2-
tailed)
.313 .020 .431 .776 .618 .205 .892
N 50 50 50 50 50 50 50 50
Demand Pearson
Correla
tion
-.156 .088 -
.598**
-.298* -.252 -.181 .020 1
Sig. (2-
tailed)
.279 .545 .000 .036 .077 .210 .892
N 50 50 50 50 50 50 50 50
**. Correlation is significant at the 0.01 level (2-tailed).
*. Correlation is significant at the 0.05 level (2-tailed).
FINDINGS:
There is a significant relationship between the following variables.
Educational level and Monthly Income.
Educational level and Visit to city. Occupation and Type of selling. Monthly Income and Buying Decision. Monthly Income and Visit to city. Monthly Income and Demand. Buying Decision and Exposure to media.
Buying Decision and Demand.
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REGRESSION:
Variables Entered/Removed
Model
Variables
Entered
Variable
s
Remove
d
Metho
d
1 Type of
selling,
Buying
Decision,
Visit to city,
Exposure to
media,
Education
level,
Occupation,
Monthly
Income
. Enter
a. All requested variables entered.
b. Dependent Variable: Demand
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FINDINGS:
R2 value shows that the independent variables are related to an extent of 38.3%.
Model Summary
Mod
el R
R
Square
Adjusted R
Square
Std. Error
of the
Estimate
1 .619a .383 .280 .519
a. Predictors: (Constant), Type of selling, Buying
Decision, Visit to city, Exposure to media,
Education level, Occupation, Monthly Income
ANOVAb
Model
Sum of
Squares Df
Mean
Square F Sig.
1 Regressio
n
7.010 7 1.001 3.719 .003a
Residual 11.310 42 .269
Total 18.320 49
a. Predictors: (Constant), Type of selling, Buying Decision, Visit to
city, Exposure to media, Education level, Occupation, Monthly
Income
b. Dependent Variable: Demand
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Coefficientsa
Model
Unstandardized
Coefficients
Standardize
d
Coefficient
s
t Sig.B Std. Error Beta
1 (Constant) 2.418 .406 5.952 .000
Education
level
.083 .116 .097 .710 .481
Occupation -.002 .117 -.003 -.019 .985
Monthly
Income
-.453 .109 -.590 -4.140 .000
Buying
Decision
-.090 .086 -.140 -1.047 .301
Visit to city -.012 .108 -.015 -.106 .916
Exposure to
media
-.001 .119 -.002 -.012 .991
Type of selling -.033 .173 -.025 -.189 .851
a. Dependent Variable: Demand
**. Coefficient is significant at the 0.01 level .
*. Coefficient is significant at the 0.05 level .
FINDINGS:
There is a significant impact of Monthly Income on Demand of the product with
less than 1% significant level.
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INDEPENDENT VARAIBLE :1. Educational Level2. Occupation.3. Monthly Income.4. Buying Decision5. Visit to City.6. Exposure to Media.7. Type of Selling.
DEPENDENT VARIABLEDemand for the product. HYPOTHESIS :
H0: There is no significant influence of Educational level,
Occupation, Monthly Income, Buying Decision, Visit to City,
Exposure to Media and Type of Selling on Demand of the product.
REGRESSION LINE:
Y = ^
+ ^x1+ ^x2+ ^x3+ ^x4+ ^x5+ ^x6+ ^x7
Where,
Y= 2.418 - 0.453 x (Monthly Income)
^
= constant value of the dependent variable.
^= Beta value of the variables.
X1-X7 = independent variables.
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ANOVA TEST :
Since the Significance value is less than 1%(0.01) we reject the Null
hypothesis (H0) , which states that there is a significance influence of
Educational level, Occupation, Monthly Income, Buying Decision, Visit
to City, Exposure to Media and Type of Selling on Demand of the
product.
RESULT :
Monthly Income has a significance level of impact on Demand for the
product with less than 1% (0.01) level of significant, but the Beta value of
Monthly Income is negative which means that if Monthly Income
increases the Demand of the product will decrease.
FINDINGS________________________________________
The study on the demand for Amrit water purifier gives a brief idea about
the market scenario of the rural market Anekal. The study shows how different
factors influence the buying behaviour of the consumers in the rural market.
These factors change with demographics and geographies which show huge
diversity of buying behaviour in rural and urban market. The finding which wegot from the study is that the Monthly Income has a great influence on the
demand of the product, as the income level rises the demand of the product goes
down and vice versa.
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LIMITATIONS____________________________________
Although all the efforts have been made to make the results as accurate as
possible, yet the survey suffers from some limitations. Following are some ofthe limitations of the study. The purpose of mentioning these limitations is not
to dilute or decrease the quality of results rather to enable the reader to judge the
validity of the result regarding the study. Following are some limitation of the
study.
Sample size is limited due to cost constraint.Geographical area is limited to Anekal area Bangalore.Most of the users don't know about water purifier so they might
assume the answers.
Many respondents were not interested to give the required time to fillthe questionnaire.
CONCLUSION____________________________________
This study revealed the insights about the factors influencing the buying
behaviour of the rural consumers. The findings are made by using the responses
provided by 50 rural consumers. This study suggests the marketers to focus on
the promotional activities since the result of the test indicates that the monthly
family income factor influences the buying decision to a greater extent
compared to the other factors.
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APPENDIX_______________________________________
The questionnaire used for collecting the primary data.
CUSTOMER QUESTIONNAIRE
Dear respondent,
We, students of Alliance University would like you to fill up this
questionnaire which would help us to make study on the demand for the
product- AMRIT water purifier of EUREKA FORBES.
We request you to fill in the questionnaire with at most accuracy. The
information provided by you will be used only for the academic purpose.
1. Name :_________________________________2. Gender : a) Male b) Female3. Education :
a) Nil b) High school c) Graduated) Post graduate
4. occupation : a) Business b) Employee c) Others__________5. Monthly family Income :
a) Upto Rs 10,000 b) Rs 10,000- Rs 25,000
c) Above Rs 25,0006. How many members are there in your family?
a) 2 b) 2-4 c) >47. Who makes the buying decision in your family?
a) Man b) woman c) consult with everyone
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8. How often you visit city in a month?a) 1-2 b) 2-5 c) more than 5 times
9. What level of importance do you give for purified water in your daily life?Very high High Medium Low Very low
10.Do you agree that purifying water will help in avoiding health issues tosome extent?
a) Yes b) No11.How do you purify your water?
a) Cloth b) Boil c)Water purifiers d) Others_______12.Do you think water purifier is important?
a) Yes b) No13.What do you expect in a water purifier?
a) Ease of use b) Durability c) Qualityd) Others ____________
14.What kind of water purifier would you prefer?a) Electrical b) Non-electrical
15.How much would you spend on Water purifier?a) Rs 1000 b) Rs 1000Rs 1500 c) Rs 1500- Rs 2000
16.Have you heard of the product AMRIT EUREKA FORBES?a) Yes b) No
17. If yes, how did you come to know about the product?
a) TV b) Newspaper Ad c) Local magazine
d) Friends
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18. If from friends, what feedback you have received about the product?
a) Bad b) Good c) Very good d) Excellent
19. Do you think AMRIT is affordable for you?
a) Yes b) No
20. What type of selling makes it comfortable for you to buy?
a) Personal selling b) Retailers c) self-groups
21. Would you prefer to buy AMRIT water purifier?
a) Yes b) No
22. Your expectations from a water purifier?
.
.
.
THANK YOU FOR YOUR COOPERATION. . .
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REFERENCES____________________________________
[1] PRLog(press release) - Oct 2010 India water purifier market outlook 2014
http://www.prlog.org/10978400-india-water-purifier-market-has-tremendous-growth-potential.html
[2] Rajesh k Aithal and Arunabha Mukhopadhyay
http://www.csi-sigegov.org/3/32_319_3.pdf
[3] Consumer behaviour in rural market http://books.google.co.in/books
[4] Prof. Arpit Loya consumerbehaviour and rural marketing
http://www.sapientindore.org/sm/mba/semiv/405m/rural%20consumer%20beha
vior.pdf
[5] V S Rama Rao, Feb 2008http://www.citeman.com/2777-buying-behavior-
of-rural-consumers/
http://www.prlog.org/10978400-india-water-purifier-market-has-tremendous-growth-potential.htmlhttp://www.prlog.org/10978400-india-water-purifier-market-has-tremendous-growth-potential.htmlhttp://www.csi-sigegov.org/3/32_319_3.pdfhttp://www.sapientindore.org/sm/mba/semiv/405M/Rural%20Consumer%20Behavior.pdfhttp://www.sapientindore.org/sm/mba/semiv/405M/Rural%20Consumer%20Behavior.pdfhttp://www.citeman.com/2777-buying-behavior-of-rural-consumers/http://www.citeman.com/2777-buying-behavior-of-rural-consumers/http://www.citeman.com/2777-buying-behavior-of-rural-consumers/http://www.citeman.com/2777-buying-behavior-of-rural-consumers/http://www.citeman.com/2777-buying-behavior-of-rural-consumers/http://www.citeman.com/2777-buying-behavior-of-rural-consumers/http://www.sapientindore.org/sm/mba/semiv/405M/Rural%20Consumer%20Behavior.pdfhttp://www.sapientindore.org/sm/mba/semiv/405M/Rural%20Consumer%20Behavior.pdfhttp://www.csi-sigegov.org/3/32_319_3.pdfhttp://www.prlog.org/10978400-india-water-purifier-market-has-tremendous-growth-potential.htmlhttp://www.prlog.org/10978400-india-water-purifier-market-has-tremendous-growth-potential.html