reading material- rural marketing_aicar

8/3/2019 Reading Material- Rural Marketing_aicar

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AICAR Business SchoolNeral

Study Material

On

Rural Marketing

Developed & compiled by:

Hari Goyal

Visiting Faculty (Rural Marketing)Director, Rural Track

914, Devpath, Off C.G. Road, Ahmedabad 380 009Phone: 079 55429678, 94263 66138, E-mail: [email protected]

Website: www.ruraltrack.com

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mailto:[email protected]:[email protected]:[email protected]


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Rural MarketingRural Marketing: Definition

Rural Marketing can be seen as a function which manages all those activities

all those activities involved in assessing, stimulating and converting thepurchasing power into an effective demand for specific products and services,and moving them to the people in rural area to create satisfaction and astandard of living to them and thereby achieves the goal of organisation.

Rural Marketing is the process of developing, pricing, promoting, distributingrural-specific goods and services leading to exchanges between urban andrural markets which satisfies consumer demand and also achievesorganizational objectives

Rural Marketing involves a two-way marketing process.

Urban Rural

Rural Urban

Rural Rural

Definition of a village/rural area: Rural has been defined as settlements with itsmore than 75% male population engaged in Agriculture. There should not beany municipality committee//board. Population density should be less than 400persons per Km.

Rural marketing has changed in concept and scope over the years. Earlier itwas used to designate marketing of agricultural produce and artisan products

by rural to urban. Todays it is considered as a function concerned with theflow of goods and services that satisfy the needs and wants of households andoccupational activities in rural areas.

Factors that have made Rural Markets attractive

Large populationRaising prosperityGrowth in consumptionLife style changesProduct life-style advantageRelatively higher market growth ratesRemoteness is no longer a problem

Marketers so far relied only on the trickle-down theory, considering ruralmarkets as a passive segment dependent on urban feeder towns. However,after realizing the hidden potential, many marketers are advocating adifferentiated approach to attract and retain rural customers.Formulating rural marketing strategy requires an understanding of ruralmarkets and the significant rural-urban differences and similarities. Ruralmarketing philosophy should embody marketing concept and societal concept.

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Rural Environment

How do they live?

House Type Percentage (2001)Pucca 41%Semi-pucca 36%Kuccha 23%

Rural SEC Grid

Rural SEC composition

R1- 4%R2- 11%R3 37%R4 48%

Rural Electrification

Electrification in more than 90% villages

But 56% rural houses do not have electricity

Caste & social status plays important role in buying decision

Rural Indiais v

ast & scattered

Population distribution Rural

Population Number of villages % of total VillagesLess then 200

96,85515.2200-500 136,45421.4501-1000156,737

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Education Type of House

Pucca Semi-pucca kuchha

Illitrate R4 R4 R4

Literate,but no formal schooling R3 R4 R4

Up to Std IV R3 R3 R4Std V - IX R3 R3 R4

SSC/HSC R2 R3 R3

Some college but not Graduate R1 R2 R3

Graduate/Post Graduate - General R1 R2 R3


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24.61,001-2000140,75122.02,001-500087,206

13.75,000 and above20,3633.2

Total Number ofVillages

6,38,365100.0

Population Distribution-Urban

Socio-cultural difference

across the country-Implication rural ads

Agriculture i

s

the backbone of rural economy

-Ag.

provides

employment

to more than65% of rural

people

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5161

Total No. of Towns

237Less then 5,000Class VI

1,0575,000-9,999Class V

1,56010,000-19,999Class IV

1,38620,000-49,999Class III

49850,000-99,999Class II

4231 lakh and aboveClass I

Number of TownPopulationTown Class


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Distribution of HH by occupation (%)

Tractor

unconventional rural transport -

Transport farm produce to stocks of rural retailer to household goods torural passengers sabse acchha sabse sasta

Rural Income

&

spending power

highly variable

Distribution of HH by Income (percent )

Per capita income inRural India - Rs. 9481 per annum

Urban India - Rs. 19407 per annumlevel of disparity between urban and rural area.But disposal surplus????

Myth : Disposable income is low

Reality :

Number of middle class HHs (Annual income Rs. 45000-2,15000)o Rural 15.6 million

o Urban 16.4 million

For same income level, disposable surplus in rural is 3 times of urban.

Rural India product needs are different

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Head'sOccupation Urban Rural

Housewife 0,88 1,04

Cultivator 3,54 40,89

Wage Earner 20,87 35,22

Salary Earner 40,64 11,26

Professional 3,31 0,72

Artisan 6,77 3,44

Petty Shopkeeper 16,68 4,99

Businesman 3,77 0,44

Others 3,53 2,00


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Growth dimensions of Rural Markets

Growing Rural Markets

Dramatic shift in rural prosperityLower income group will shrink from 60% to 20 % by 2007Higher income group will get doubled

Its a big big market out there6.38 Lakh villages741 million people5.6 million retail outlets42000 haats

An ultimate market to crack open

Rural consuming class - growing @ 3-4 % per annum.Urban market is getting saturated

India is giving way to BharatPhilosophy : Dig deep & strike gold

Growth dimensions of rural market

LIC sold 55% of its policies in rural India (2001-02)

41 million Kisan Credit Cards (KCC) issued in ruralWhich exceeds 22 million credit cards issued in urban.Results in tremendous liquidity

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Rural facts : ownership

96 % of rural houses are self owned42% rural households own a radio27% individuals own watches

Rural facts : Living standards

41 % of rural India haspucca houses (urban 79%)44% rural HHs have electric connectionsIndividuals covered by life insurance policies - 6.5 croreHousehold with LPG

Rural- 7.8 million (6%)Urban- 25.7 million (48%)

Household with bank accountsUrban 26.6 million (50%)Rural 41.6 million (30%)

Phone ownership by HHsUrban 23%

Rural 4%Television ownershipAll India 61 million (32% families)Rural India 26 million

Two wheelers:Rural 9.2 million (7%)Urban 13.3 million (25%)Rural India will soon be the mainstay of demand

Rural facts: Consumption

98 % of rural India uses toilet soaps55% use detergent powder

35% uses dental products (tooth powder/tooth paste)

For host of consumer expendable and consumer durable the RURAL SHARE ismore than 50 %

Purchase of consumer expendables in rural market

Product Rural Share (%)Penetration Rate(per 1000 HH)

Body Talcum Powder 46 434

Cigarettes 58 200

Cooking Oil 66 952

Electric Bulbs 42 394Footwears(Casual) 61 682

Tea 60 758

Hair Oil/cream 52 787

Packaged biscuits 44 315

Sampoo 33 353

Toilet Soaps 58 992

Toothpaste 47 449

Tooth Powder 78 432

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Washing Cake 67 951

Washing Powder 58 576(Source: Indian Market Demographic Report 2001, NCAER)

Purchase of consumer durables in rural markets

Product Rural Share (%) Penetration Rate

Bi cycle 78 606

Cassette recorder 68 246

Electric Iron 46 109

Fan (Ceiling) 56 280

Fan(Table) 68 177

Mixer/Grinder 33 44

Moped 47 24

Motorcycle 51 28

Pressure Cooker 52 178

Radio/Transistor 80 491

Refrigerator 28 35

TV (B&W) 81 195TV(Colour) 37 48

Washing Machine 17 10

Wrist Watch (Mech) 83 824

Wrist Watch (Qurtz) 59 400

(Source: Indian Market Demographic Report 2001, NCAER)

Lower penetration rates in rural indicate greater marketing opportunities

FMCG MarketUrban Rural Total

Mkt Size(Rs.mn) 431,951 483,537 915,488

Exp per HH 8,795 3,937 5,325(Source NCAER Study 2001)

Rural Marketing: Opportunities

Lower product penetration ratesIncreasing rural income& aspiration levelImproving life styles of rural peopleIncreasing urban orientation

Rural Marketing: The Future

From poverty to prosperity

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Consumer Class Income Groups 1994-95 2006-07Very Rich Above Rs. 215,000 1,6 5.6

Consuming Class Rs. 45001-215,00 2,7 5,8

Climbers Rs. 22001-45000 8,3 22,4

Aspirants 16001-22000 26.0 44,6

Destitutes Rs.16000 & below 61.4 20,2

Total 100.0 100.0


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Rural Marketing: the Challenges

Making poorer the customer Improving the availability of the products to the remote villages Leveraging IT for creating marketing opportunities in rural markets ITCs e-Choupal initiatives Exploring unconventional media opportunities to communicate rural

people in their own language Making use of unconventional but effective rural distribution channels Mobile traders, Haats & Melas, PDS, P & T Deptt.

Successful rural marketing initiatives (Discussed)

Britannia :Tiger BiscuitsBrooke Bond Lipton Ltd.,- A-One Kadak Chhaap teaArvind Mills : Ruf & Tuf JeansAsian Paints : Utsav range of paintsDabur IndiaLG Electronics : Sampurna TVHLL : Project BharatHLL : Project ShaktiColgate PalmoliveMarico IndustriesRickitt & Colman India : DettolTTKs Prestige Pressure CookersPaanch matlab chhota cokeITCs e-Choupal

Behavioral manifestations by rural buyer

Why customer buys?Practical reasons

Need

Emotional reasons

Status symbol, neighbor envy,

People play several roles in the buying decision

Initiator

Influencer

Decider

Buyer

User

All could be different in ruralIdentification of the buying roles is important.Influencer and decider - key persons

Personal factors influencing buying behaviour of rural customers

Age & Life Cycle Style

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Rural youths are more innovativeto be convinced

Economic status of rural populace

Lower Income Level higher price sensitivity

Evolving lifestyles in rural IndiaResulted in increased use of more life style products.

Urban orientation and product/brand useHigher the urban orientation the higher will be the demand for life styleproducts

Social factors influencing rural behaviourSocial factors influencing rural behaviour

Significantly influenced by their reference group

Importance of WoM

Use the same brand that is used by their neighbors

HIG consumers - fairly brand conscious and social prestige

Decision-making: shifting to younger generation

Individual v/s collective decision making

Rural youths: early adopter

Influencing segments in rural marketInfluencing segments in rural market

Influence the influencer- so as to act as brand ambassador of your company.

Developing relationship with personalized touch

Some behavioral aspects of rural buyerSome behavioral aspects of rural buyer

Plenty of common sense and practical experience. eg. Field Marshal

Seek Value for money Functionality not the frill is important. eg.

IGO TV, Sampoorna TV

Rural people buy more oftenEven sometimes on daily basisA larger segment of rural population is daily wagers

Low unit price products in small packing are more successful in ruralmarkets

R1 & R2 customers even buy expensive brands like Dettol soap, Fair &Lovely face cream, LG products etc.

Jo dikhata hai wo bikta hai

Rural retailer funds constraints to stock too many brands in a productcategory

stocks only 1-2 brands per category.

So availability of your brand there makes the difference. Eg. Nirma,Chik, Babool etc.

Rural customers purchase their 90% durables from a town withpopulation more than 20000.

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Even the major part of FMCG purchases by rural people are from nearbytown on weekly or fortnightly basis.

Generally wary and suspicious of urbanites implications ???

Life is highly routinized and governed by nature

Television viewing - highest among women and children who are

emerging the demand generator voice from village Brand loyalty More brand loyal, first entrant always benefited.

Lifebuoy, Bata, HMT watches etc.-Brand stickiness or Brand loyalty ???

Source of information co-villagers, rural retailers, opinion leaders etc.

Rural Market Research

The systematic gathering, recording, and analyzing of data about problemsrelating to the marketing of goods & services in rural areas

Qualitative Research is more effective in rural setting.

What is Quali research ?

Very simplistically, answers questions like What, Why or How not Howmany

Concerned with UNDERSTANDING this rather than MEASURING them

You canUnderstand, discover, diagnose, gain insightsExplore markets and brandsDevelop ideas, concepts, products

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Diagnose problem areas

Data collection methods

Focus Group Discussions:

Standard focus group (8-12 people per group

Minimum groups (4-6 people per group)In Depth Interviews: one to oneDiscussion/Interviews tape-recorded

Depth interviews

When applied to individual consumer, such research is generally aimed atfinding the thoughts, feelings and attitudes, which influence the consumerbehaviour

Focus Group interviews intended to provide some of the complex aspects of

relationship between consumer at one hand, and product, advertisement andsales efforts at other.

Focus Group Process

Moderator tells the purpose of the meeting and suggests a topic to openthe discussions.

Typical approach to have group start talking about general product,which they use.

Move the group to talk about their feeling, attitudes and behaviourtowards the products

Why they like some brand and not others Let the group carry the conversation by itself. Introduce topics of importance in between. Moderator must not dominate the discussions

Selecting samples for focus groups

Never use only one focus group 6 to 12 people in a group a thumb rule Group make up quota for demographic factors

Projective/Enabling Techniques

Help enter the private world of the individualWhat is projection?

a defence mechanism externalizing not-so-positive, unpleasant feelingsexperiences ascribing them to others.

Why used in quali. research?

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Direct questioning may put pressure on rural people, may not evokeauthentic response.

What are these techniques?* Associations with personalities* Personification/conversion into, say animals, beverages

Usage & Attitude Study for Toothpaste

(Qualitative Research)

Why? Why do rural people use Toothpaste? Importance of toothpaste versus other oral care products Why do rural people use X brand of toothpaste (and not Y brand) Why have people who were earlier using toothpaste and now stopped

using it, done so? Why have people switched from x brand to y brand?

What? What aspects/attributes do people look for in a toothpaste (eg teeth

cleaning, brightness of teeth, checking of germs, mouth fresheningability/fresh breathe, check cavity formation, taste, colour, packaging,pack size, price, availability, brand image etc..)

What benefits do they associate with toothpaste v/s tooth powder,manjan and neem twig?

What drawbacks do they see in toothpaste?

How? How do they decide on a particular brand ? How do thy decide on outlet?

Output of the qualitative research

Would generate a range of: Attributes on which toothpastes are evaluated Strength and drawbacks Reasons/hypotheses for usage of toothpaste/x or y brand of

toothpaste

Quantitative Research

Penetration of toothpaste- overall and by brand among target audience Frequency of purchase, pack size purchases, source of purchase Demographic profile of users Attributes for evaluation of toothpaste, relative importance of each Satisfaction rating Extent of shift, say from x brand to y brand of toothpaste. Validation/Rejection of Hypotheses

Sampling plan in rural

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Cluster sampling is more representative in rural settingIn villages - Mohallas on caste basis

Questionnaire design

Main requirements

Rural respondent must understand the question He must be willing to provide the information Respondent must be able to provide the information

Questionnaire framing

Use simple words Avoid ambiguous questions Avoid leading questions Do not ask generalized questions


Rural respondents have higher degree of courtesy biases pleasing theinterviewer

They try to give socially acceptable answers which also conform tovillage norms

Because of competence threatening, their answers are generally for selflifting

Rural consumers are wary and suspicious about urban consumer andbecause of their ignorance they have more fear and distrust biases.

They think that the information given will be passed on to banks, Govt.Officers

A different approach is needed

Probing and cross questioning is the key to research the rural people

Rural Research tool kitFor measuring attitude, preference and ranking

o Faces

o Colour wheel Dark green, light green, yellow, orange and red

o Dice

o Coin

o Ladder

o Playing cards

Dos and dont of rural market research

o They are wary and suspicious about urban people.

o Researchers should try to break the inhibitions by developing rapport.

o Wear simple cloths

o For first 15-20 spend in developing rapport.

o Tell them why are you doing the research

o They should feel comfortable with researchers body language

o Address sensitive issues with skills

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Place for research

o Where you can get large number of respondents

o Choupal, Tea stall, retailer, temple etc. could be the choice of the place

Timing

o In afternoon they are at home for 2-3 hours.

o Or in the evening

o Availability of the subject is an important issue in rural research


Relationship based rural market research - a new concept to test

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brand name should fit in culture traditions, customs, language, dialect &memory of rural consumers

should be easy to pronounce eg. Alpinelebe v/s Dandi

the brand name itself should convey the product benefits A1 kadakchhaap tea, Neem shop.

brand name should give the product a clear identity Ispat kavach- thebrand name conveys strength, toughness & durability

should have personality of its own; that should connect well withrural audience (eg M&Ms Bhumiputra, Sarpanch tractors)

Product strategies - symbol & logo

have great importance in rural areas even more than brand namebecause of lower rate of literacy and different languages usedeg. Fevicol, Kachhua Chaap Agarbatti, etc.Fertilizer companies normally use a logo on the fertiliser bag.Manglore chemical and fertiliser Ltd., uses a Poorna Kumbh with acoconut.

Some reference names are billi wali cell (Eveready batteries) ladke wala paint(Gattu of Asian paints)

Product Strategies -Packaging

Sturdy & robust: as products meant for rural markets have to travel for longdistances and on bumpy roadsA low unit price pack preferred as we are dealing low per capita incomeeg. Sachet of shampoo, toothpaste, Vicks cough tablets, paisa pack of teaEk rupia do Tiger lo

Pricing Strategies in rural market

Rural customers shop for value.Rural markets are far more utilitarian and price conscious.Value for money brands have performed better than premium brandsConsumers are increasingly opting for more VFM launches in FMCG categorylike soaps, detergent, toothpaste and biscuits.Breeze, Nima, Colgate-Cibaca top and tiger are doing better than thepremium brands from these companiesPricing in rural should be convenient for both retailer and customer

Pricing Strategies in rural

Address the issue of affordability through :

Product design : basic/generic product with functionality and without frills

eg Sampurna TV, Videocon washer, Phillipss Bhahadur brand transistor Small is beautiful : Low unit packing- major rural population is daily

wagers. eg shampoo sachet, Vicks 5 gm, paise pack of tea, Tiger (Re1.00)

Avoid sophisticated packaging:o Rural consumers are more interested in core product and its

functional value.

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o Refill/reusable pack : This benefits the consumers in terms of

price.

Application of value engineering : Evolve cheaper products for ruralmarket through value engineering.

Psychological pricing : Pricing like bata shoes Rs. 199.95 , Ruf & Tuf - Rs195,

Sonata Rs. 395 increases the chance of sales.

Tackling the problem of spurious brands

Spurious the menace

Marketers - plagued by copycat products.A brand works hard .. all to soon emerge a bunch of look alike to sharethe fruit effortlessly.Limebouy for lifebuoy, Colbate for Colgate, Narima for Nirma on rural shelves.For every 100 strips of Action 500 there are 54 look-alikes (ORG retail audit)

Market study revealed-125 imitated brands of Parle-G biscuitsTotal market size of spurious brands in India is estimated whopping Rs. 2800crore virtually a parallel market

30% loss of sales for liquor Manufacturers40% loss of Sales to music industry38% loss of sales to Auto parts industry50% loss of sales to fan Manufacturers

(A.C Nielsen report on FMCG)

What is spurious brand?

Loosely defined are look-alike products with similarity in packaging andand minor alterations in name. The primary motive- to capitalize on the trustbuilt by established brands.

Forms of spurious brands/counterfeits

Look-alikes

Spell-alikes

Duplicates

Winning features of spurious brands : a copycats approach

Close phonetic resemblance to the originals, similar colours, pack designand pack size.

A limited coverage

Low investment

Low quality considerations so low consumer price

Reliance on trade push-high retailer margins

Conditions of the operating environment that makes a spurious brand survivein the rural market

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-Last sales point having substantial influence on the end consumer buyingdecision-High cost to trace and pin point multiple sources of look-alike products-Lack of clearly defined legal remedies-Rural market provides ideal mix of these factors

Strategies to tackle spurious the menace Create clear brand identification and strong rural consumer pull

Local promotion in individual villages

Area specific examples of harmful counterfeits could becommunicated Fear psychosis. Bindi discolour the skin, Balm triggerallergies

Retailers push the pass-offs for higher margins. Consumer pullsupplemented with retail trade schemes

Launching low end, moderate quality & cheaper packing product tonegate price advantage

Convert poorer the customer eg Ek rupia do tiger lo.

JND concept Packing could be made difficult to replicate

Making availability of originals in rural markets by improvingdistribution

Distribution through institutions like SHGs, e-choupals

Constant pressure on manufacturers- Police raids, litigation, otherRegulatory authority.

Raids on imitators HLL 700-800 cases every year for trademarkviolation. 20 men outfit dedicated for it. Coke has 48 consumer responseco-ordinators

Surveillance on printing presses & raw material suppliers

More action on retailers- may recommend cancellation of theirlicense

Information sharing by industry

Develop a network of informers

Liaison with Govt. For stringent law and strict implementation

Syndicated efforts by the industry/companies to destroy look-alikes.Brand Protection Committee- focuses on enforcement and application ofLaws, publishing the negative economic impact of fake products, takingdirect action against illegal manufacturers, traders, wholesalers andretailers and enhancing communication amongst the stakeholders

Industry should share information, best practices, resources andcosts.

Govt. should also enforce law more effectively Interactive relationship based communication opinion leaders in thevillages can be used

Use of NGOs

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Selection of potential rural market & effectiverural distribution channel planning

Rural Distribution : the issues

How far a company should go to serve the poor customers in faraway ruralmarkets?How does such a company manage to sell its products profitably to hundredsof millions of people, dispersed and isolated?

3D : Dispersal, Disparity & Diversity characterize the villagesRural Distribution a daunting task

Urban RuralLocations 5161 towns 6.38 L villages

Population distribution Rural

Distribution of the villages

61 % villages have less than 1000 popn

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100.06,38,365Total Numberof Villages

3.220,3635,000 andabove

13.787,2062,001-5000

22.0140,7511,001-2000

24.6156,737501-1000

21.4136,454200-500

15.296,855Less then 200

% of totalVillagesNumber ofvillages

Population


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83 % villages have less than 2000 popn

Selectivity is the key to effective rural distribution

Strategies: Rural Distribution

Coverage of selective villages on the basis of its population and potentiality

Selection of the rural markets on the basis of population distributiono In the initial phase try to cover 2K + population.

4045% Population (250 million rural consumers) will be covered byreaching 82000 villages

Selection of rural market on the basis of potentiality of market

Measured the relative consumption potential HTA, MICA (MRMR),BBDO

District markets classified and rated for rural market potential

Thomson Rural Index 86o Measurement of inter district disparity in rural market potential

o 26 economic indicators used for calculating index number

o Markets are classified as A, B, C, D & E. 22 A markets

MICA Rural Market Rating

o Purpose was to evaluate market potential of rural districts (Total 445

districts)o Data helps in

o Market prioritization

o Developing rural marketing strategies

Indicators used in the index:

1. No. of cultivators2. Total cropped area3. Total irrigated area4. Fertilizer consumption5. Bank credit6. Value for aggregate output

42 other socio economic indicators like No. of shops, schools, three majorcrops, LPG & electricity connections and many more. Heart of the MRMR wasthe digital maps.

Top Ten of MRMR

Midnapur (WB), South Arkot(TN), Gangnanagar(Raj), Sangrur(Pun), Guntur(AP),Firozpur(Pun), Raipur(MP), Faridkot(Pun), Moradabad(UP), Belgaum(Kar)

Strategies: Rural Distribution

City-districts market segmentation:

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o Big cities dominates every single aspects of marketing thinking

o The need is to have the entire marketing structure totally dedicated to

districts marketing

Distribution up to feeder towns/mandis

o Rural consumers visit these towns on regular basis

o Rural retailers purchase from these feeder markets thru wholesalers andbig retailers

o A good distribution network should touch the identified feeder

towns/mandis eg HLL, P & G, Colgate-Palmolive etc.

Rural Haat & Mela: mobile shopping mall

Haat plays a vital role in rural economy

Some facts about Haats :1.Total No. of haats 47000 +2.Sale per haat per day Rs. 2.25 lakh3.No. of sales outlets per haat 300+4. No. of visitors per haat 4500 +

5. Sales per outlet Rs. 9006. Purchase per visitor Rs. 50

Melas : An opportunity to induce trial

Religious gatherings held periodically to commemorate importantevents

25000 melas are celebrated every year

Avg stall per mela 854

Avg sale 25 lakh/day

Avg number of visitors 7.6 lakh per mela

50 % outlets sell manufactured goods

Companies can reach half of the rural population at a fraction of the cost

Self Help Groups

SHGs a sustainable and cost effective distribution channel

A rural Amway concept

Women of the SHGs could be encouraged to become dealers

Project Shakti of HLL

HLL co-opted SHGs to sell its products in outer fringe of rural India

HLL trains women in micro-business skills

They sell the products to their neighbor on profit.

A low risk sustainable opportunityTVS, Nippo, Prestige and Phillips have also started using this channel

Syndicated distribution network

Two or more companies in non competing product categories, share thefacilities of distribution van

tie up at district level where redistribution stockists represent two threecompanies

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A army of mobile traders

A new way to go rural

4 Lakh mobile traders

Reach 8 crore rural HH-half of the Indias rural home

Transport cost virtually non-existent

Other channels of rural distribution

Van operationsUse of co-operative societies 3 lakhRevamp the existing infrastructure- 2.5 lakhs PDS, 1.3 lakhs Post officese-choupal- a one stop shop

ITCs e-Choupal:One of the greatest rural marketing initiativesBy leveraging IT (assets), the channel creates certain unique capabilitiesIt leads to 3-D marketing benefits in rural India, like no other channel

has been able to do to-date.

e-Choupal the unique 3-D marketing channel for rural India

e-choupal ITCs rural symphony

ITC-IBD is in the business of procurement & exports of agriculturalcommodities mainly soyabean, wheat, rice, oil etc.

A greater concern of ITC lack of control over the supply chain,dependence on middlemen for procurement of soya and wheat.

Company & farmers were loosing their fair earning

ITC used power of Internet, and worked out a model named e-choupal. An Internet kiosk was set up in the house of an influencial/lead farmer

known as choupal sanchalak.

The site provides the farmers with real time information on:

The latest weather report,Prices in various mandis,Global pricesBest farming practices.

The days of hanging around the mandis, waiting for the agents to examinetheir stock and dictate prices are over.

The farmer now have the choice to sell his stock to ITC or a mandi of choice.

Building blocks of e Choupal

1. Transparent processLeverage IT, to deliver real time information and customized knowledge toimprove farmers decision making ability to sell farm output profitably andimprove farm productivity

2. A direct output marketing channel

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Leverage IT, to act as a direct marketing channel with more efficient pricediscovery and lower transaction costs in output marketing

3. Demand aggregationLeverage IT, to aggregate demand like a virtual producers co-operative andaccess high quality farm inputs and other household goods at low cost

4.

Allow community to manage itselfPhysical net access and community interface through a lead farmer identifiedfrom within the village and appointed as Choupal Sanchalk

5. Developing network of partnerships :Interlocking network of partnerships brings the best in class information,knowledge and inputs. ITC+Met dept + Universities+ Input Co+ Sanyojaks

The privileged Assets of e-ChoupalITC infrastructureComputer

Internet (Hindi)MultimediaBroadbandSmart Card

Physical reach:Choupal within a walking distanceMultipurpose WH hubs within driving distance

Key intermediaries:Sanchalak (1 per cluster of 5-6 villages)Sanyojak (1 per group of 10-15 choupal)

ITC (support the farm produce marketing end)Role of Sanchalak

Key person, trained on the concept Uses net to provide spot quotes Supplies information on best practices in farming and weather forecasts Earns commissions on procurement and sales Emerging as a prominent & powerful personality

Role of SanyojakA role was created for some of the middlemen of mandis as Sanyojak

Their job is -To co-ordinate with group of villages and choupal Sanchalaks

-To perform the mandi documentation work and logistics management-To supply farm inputs from ITC and partner companies to sanchalaks andcollects payments from sanchalaks and make payments to the companiesthrough ITC-use their ties in the villages to nominate sanchalaks

e-choupal : a one stop shop

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ITC is trying to convert the Internet kiosk from mere supply chain mechanismto a one-stop shopA system that allows a two-way flow of products and services to the ruraleconomyEnvision e-choupal as an e-commerce hub for the village.A single point of contact among farmers and wide range of suppliers of agri-

input and consumption goodsAlready started selling seeds, pesticides, fertilizers, tractors, motorbikes,insurance, salt etc.

Monsanto, Nagarjun fertilizers, BASF, Eicher Tractors, TVS Suzuki, ICICIlife Insurance etc. have already tied up with ITC for penetrating rural market.

ITC plans to endorse the products if the product meets certain specificationsITC earns a transaction fee for the dealPotential seller does not have to invest in infrastructure

e-choupal: inherent strength

A finger on the pulse on Rural India:

Sanchalak picks up market signals and customer information first andtransmit them back to the distribution channel.

Extend companies reach to the population even below 2000, in a costeffective way

Product endorsement by ITC

e-choupal: benefits to the farmers

Fair return of his crop- Rs.300-400 more per ton of soya

Procurement of the company so no storages, no manipulation

Gets updated information on crop, weather

Immediate payments no waiting periods

Can purchase quality agri-inputs and consumption goods from choupal atreasonable rates

3-D Marketing model

By leveraging these assets, the channel creates certain unique capabilitiesLeading to 3-D marketing benefits in rural India, like no other channel hasbeen able to do to-date

What is 3-D Marketing?

1st D Superior & Distinctive functional benefits

2nd D Process benefits (which makes the transaction between buyer & sellereasier, quicker, less expensive & more pleasant)

3rd D Relationship benefits (which reward the willingness of customers toidentify themselves & to reveal their purchasing behaviour)

This is any marketers dream for Rural India

The process benefits of e-choupal

-Creating bundling and unbundling of various elements of value chain thatbundled knowledge (what to use) and information (when to use), withtransaction (ordering an input) to deliver unique value to the farmer.

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-Sanchalak can help forecast demand better, and with the help of ITinfrastructure, he can now transmit it across the network instantly or real time-demand aggregation & servicing-Storage at strategic locations (farm produce receiving points also storeproducts for the sale into rural markets)

The relationship benefits of e-Choupal-Wealth enhancing ability of e- Choupal-Farmers disclose information can customise products eg insurance products,--Power of endorsement of product- spurious brands??-Interlock two-way transaction-Promote loyalty- bonus points-Understand the terrain requirements-Develop product/process appropriate for rural markets

The product related benefits of e-Choupal

-Ability to assemble groups of highly involves customers-Demonstrate product features/get feedback-Scope to tailor make product/services-Web casting to/video conferencing with highly focused target group-New business opportunities (telemedicine, education, entertainmentConstraints of e-Choupal ????? - Discussed

Rural Retail System

Rural retail outlets

o

Can not be classified as grocer, general store or sabjiwalao Carry wide range of products- onion to toiletries to hair care products to

grains to edible oil to kerosene to Anacin to needle to cementlist is long.

Place of Purchaseo Go to nearby town or feeder villages once or twice a month to buy their

stocks.o Implication for the marketer ensure stocking at feeder villages/town

Product Lineo Product line very wide and varied but the width of product line is small

o Retail shelf : stock standard product categories like -toiletries,

cosmetics, packaged food stuffs etc.

o Few retailers even sell hardware items, garments, cloths, cement andfertilizers

Rural retailers influence on customers brand choiceo Retailer influence is greater in rural markets, however it is the knowledge of

the brand that influence choiceo Influence of rural retailer on consumer choice suggests the need to

examine rural retail system

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Information source and influence

o Determination of what to stock is important

o A larger number gets information from suppliers the wholesalers, followed

by customers and advertisements

Source of supplies

o Two major source wholesalers & manufacturers agent (generally local co.

& spurious brands manufacturer)o Larger part of purchase thru wholesalers

o Reasons for purchase thru wholesaler are:

-Credit facilities-Small quantity

Important factors for selection of the source

Credit 92%

Reasonable price 58%Variety of stocks 29%Others - 13%

Terms of purchaseCash & credit 92 %Hard cash 8 %

Reason for stocking a particular brand

Because consumers request it and lesser extent to wholesalers push.

Marketer should promote the brand both to the consumer and towholesaler.

Mode of transport

Buses

Tractors

Motorbikes & Bicycle

Bullock cart

Retailer as a route to the rural market

Channel credit: larger retailers in feeder markets buy on credit.

Channel promotion: discount schemes should be targeted to retailers infeeder market and are usually ineffective in interior markets.

Terms of Sales

Credit facilities to customers: varies by location and by product

Pricing: interior villages charge more than MRP.

85 % sales against credit & cash

15 % on pure cash basis

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Prospecting & Selling in rural market

Type of customers

IndifferentObjectingSkepticalAccepting

Selling Process

Prospecting & Qualifying -> Pre-approach -> Approach -> Presentation &

Demonstration -> Handling the objection -> Closing -> Follow-upProspecting the lifeblood of selling

Prospecting searching for individuals who have need and the ability topurchase a high involvement item like tractor, MUV, insurance etc.

Lead Only know nameProspect qualified person/customer

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Qualified customer is MADMoney to buyAuthority to buyDesire to buy

Where do all those wonderful leads come from for a tractor purchase?1.Referral from existing customers

While meeting salesmenAt service station/show room

2.Tractor garage in villages/towns - thru rural mechanics3.Tractor driver of the village4.Village Sarpanch/Talati5.Pan parlour/barber6.Own circle of friends/acquaintances networking7.Manager rural bank8.Krishi mela/trade fair9.Trading of leads from salesmen of other companies in agro business.10.From opinion leaders of the village

Pre approach- Know your prospect

Know your prospect-the potential buyer, his needs, decision makersKnow their business- farming, type of land, cropsKnow their needs Why the product is needed ?Know the influences Who are influencing their buying ?Collect more information on previous purchases (brand), his currentrequirements, financial position etc.Develop a game plan how to persuade him for the purchase

Pre approach- k now what you are selling

The product , its range, features, services, companys profileConstantly try to educate yourself with new product informationAlso know the history of your product and servicesStrong product knowledge increases the confidence of the field executive

Pre approach- k now your competition

Get as much information about competitorsTheir strengths and weaknesses try to convert their weaknesses into youropportunity while making presentation.

Also prepare your reply for their strengths.

Approach- opening the presentation

Opening lines should be positiveShow courtesy & attention to the buyerAvoid distracting mannerism staring the customer

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Introduce yourself, your company, and your products in an upbeat,confident mannerSalesmen should know how to meet and greet the farmer -buyerDo not make weak statement

Presentation

A presentation is a complete sales package that is given to a prospect for thesole purpose of getting him to commit to purchase a product or service

A successful presentation needs preparationLearn about your product, competition, your customers & the markets

Discover the needs by probing thru questioning

LQR Technique for probing

L ListenQ QuestionR Restate

Presentation:Once prospects needs are established, the presentation should indicate howhe will benefit, and satisfy these needs with the use of your product.

A FABulous approach to Buyer Need Satisfaction

Stressing benefits is the most powerful selling technique

FAB selling technique

FAB emphasize benefit selling

Feature

Advantage

Benefit

The product feature : so what?

Feature tangible characteristics direct inject, improved gear system,powerful high performance engine, better lift, new styling dash board, fueltank lock, water separatorYou should not over emphasize the featureMust discuss the products advantages as they relate to buyers needs

Product advantage : prove it !

Advantage a performance characteristic- fuel efficiency, greater power,smooth gear operation, lower maintenance, improved visibility, safety of fuel,prevention of water entry in FIP.

The chances of making a sale are increased by describing the advantages ofthe product being offered (fuel efficient, high performance, lower maintenanceetc.)

The customer asks benefits

Benefits a result of advantage kamai, bachat

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Post Sale Process

Measure satisfactionHandling complaintsPayments follow up

New product or new process

You may have the greatest product in the world but customer wont careunless you match it with creative sales process

Communication strategies for rural markets

Issues in rural communication

o Barely half of the rural market is reachable via conventional media-

create huge media dark areas.o Brand on the shelf but off the mind

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o A blind spot in rural marketing- lack of promotional activities

o Promotion in rural markets is more demanding

o Demand needs to be created for product category first

o Villagers are conservative buyers

o Desire to innovate with new product is restricted

Rural communication: scenario

o India is a country of diversity

o Information rich and information poor existing together

o Majority of information poor live in rural areas characterised by low

level of awarenesso Rural people - have their own communication pattern which look

unorganizedo It is a face to face, informal, horizontal, and interactive

o Information is shared, filtered and discussed before acceptance and

rejection

o Information coming from any channel finally travel throughinterpersonal channel

o 80% communication in rural is interpersonal communication

o They need proper information before deciding to buy a product

o Demonstration helps grasping information better

Rural communication : Advertising and rural buyer

Without the physical availability of the products advertising has no meaningeg. Dandi salt

Study the rural consumer in relation to adverting - rural attitudes, habits,social standards, importance of festival, marriage season, significance ofastrology. These have an impact on daily life of rural consumer.

The conventional media says hit the man where he lives. Unconventionalmedia as they say hitting the consumers where they congregate eg HLL

Rural communication: Strategies

Communication needs to go through all the stages of creating awareness,addressing attitudes and changing behaviour

Tailor made communication

* Urban templates need to be ruralised* Content should be moulded as per regional requirements-Can counter linguistic, social & cultural differences

difficult v/s simple Ad rural people simple and nave (Dandi Namak)

Reach and role of conventional media

TV powerful media option, viewer ship 36 %Radio: An effective reminderCinema: Appeal of the big screen -exciting AV medium southern states

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Print media: Press does not make headlines low literacy level

Myth: Sales promotion schemes are equally effective in rural

Reality: Rural retailers sell the free gifts, as rural people are less educated/lessaware.Difficulty in announcing schemes due to lack of availability of print media

Inter personal communication accounts for over 80% of the ruralcommunication process

Use unconventional media to reach rural consumers in their own language

Traditional media

A powerful input and personalized communication systemAdvertisement is couched in entertainment

Type of traditional media

o Puppetry

o Folk Theater

o Demonstration

o Haats and Melas

o Rural sports/events

-LIC, BBIL, Asian Paints, Marico, HLL etc. used these media successfully

Wall Paintingo Effective and economic medium of advertising in rural areas.

o Retailers normally welcome the paintings of their shopso The power of picture completed with local touch

SemioticsSigns speaks louder

Helps in easy association and recollection of the brands.

Even more important than brand names in rural areas

Many languages used & lower literacy rateTortoise mosquito coil, tiger biscuits, Dalda is well registered and received inrural markets

Rural communication

Influence the influencer: Focus on reference group/op leaders

Op leaders & reference group exposure to media is high

Have capacity to promote the brand thru their advice and influence

Should be taken into account while chalking out the communicationstrategy

Appropriate communication mix:

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Generally 70:30 (local promo:mass media) is suggested by rural marketingexperts

Appropriate scheduling:Post harvest period is most appropriate as farmers are cash rich

Selective communication strategy:Advertising and promotional tools should be used only in large and potentialvillages

Thanda matlab CocacolaReach out the rural customer in its own language

Add local flavour to the campaign

Weaving the product positioning theme into the local festivals and traditionalevents & culture.Participate in welfare programmes Show your concern for welfare whilebuilding brand

Effective implementation of rural promotion

Explore explosive media opportunities, socially relevant but inexpensiveBrand to build relationship with deprived rural.

Overall strategy needed:

Need to invest much more in understanding the rural consumer

Owning rural India

Communication for big-ticket items

There is a stronger need to build reassurance/trust

Communication mix has to have more weightage for trust building Above the line has a limited role in trust building. BTL needed

Higher need for personal interaction in rural markets to build reassurance

Integrated communication mix Leader weedicide

Launched in North India in 98Total wheat weedicide market is 11 million acresNew molecule usage increased from 500 acres in 98 to 3.5 million acres in2002Leader market share: 60%Largest-selling molecule across entire Monsanto market worldwide

(Re)Positioning the brand

Identified the ideal place to pre-test or test launchUsed feedback to fine tune campaign quickly

Print ad said..Gahun ka asli rakhwala, Leader teen gunowala

Guli Dande ko sajay maut

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Maximising one-to-one contactSarpanch Mela-Gained support of opinion leaders from 3,500 villages across Punjab

Direct Mailing

Entire mailing list generated through data collection from various marketexercises.Mailers sent to over 61,000 farmers

Kanak Rath (Agri Info Centre on wheels)6 vans25-day cycle on each vanCovering 6-7 villages per dayOrganizing farmer meeting at least 3 villages a day906 villages covered28 districts covered

Mandi Campaign:51 mandis15 days at each mandi53,000+ coupons collected: Lucky DrawPosters (13,457) + leaflets (100,510) + prizes distributed (1,980)nTotal farmers contacted: 78,997

Leader: Emerging a best-sellerEarly-use campaign:Agri-universities endorsed 25th-45th day as best time to use weedicidePackaging innovation:Khirkiwala pack and 5-acre pack/promo

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Relationship Marketing in rural context

Rural Environment distinctly different from urban environment

Urban buying behaviour individual drivenRural buyer behaviour decision making a collective action

Actual experience of the actual user significantly influence the buyingdecision

The word of mouth information holds validity Efforts of salesmen should be supplemented by the influence of opinion

leaders

Collective decision, opinion leaders major influencer, Company needs to relatenot only customers but also opinion leaders

Relationship Marketing in rural market would be a big differentiator, and,would lead to competitive advantage

Developing relationship with rural customer through social marketing

Social Marketing an imp tool to develop relationship with the customerand to generate goodwill for the company in rural

Village adoption programmes by fertilisers and banks foroverall development of villages eg IFFCO Gram, Bima Gram

Colgate Palmolive Oral hygiene programme for rural India

NECC advertisement campaign for nutrition

ITC-IBD

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Marketing of insurance services in rural markets

Rural scenario for life assurance

Rural sector the backbone of Indian economyBut generally characterized by illiteracy, poverty, lack of insuranceawareness, lack of saving habits for long term needs, a tendency to hoard

gold, inadequate medical, transportation & communication facilities etc.But due to planned development, the rate of change in rural India is frenetic.-Significant increase in literacy rate-Increase in rural income-Modernization in agri sector-Development in rural industries-Perceptible development in infrastructure-The life style is evolving due to increasing urban orientation

Given the vastness in size.- 6.38 lakhs villages

- a market of 740 million customers

..the rural market is too alluring to ignore by any marketing executiveincluding of financial/insurance services

Rural scenario for life assurance

LIC issued last year 3.7 million policies in rural market with a gross sumassured Rs. 25400 crore, and generated a premium of Rs. 910 crore.Given the potential, as measured by the total rural population, there is a longway to goAgriculture now constitute less than 25% of GDP, yet it provides 65% of thetotal employment.With rising farm & non-farm incomes, rural India provides vast opportunitiesfor life insurers

Marketing practices of LIC in rural areas

19000 Development Officers were appointed. 8,00,000 insurance agents arecovering 4.38 lakhs villagesIntroduced non medical scheme for insurance in rural areas

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Collection of premia through post office inadequate banking facilities inrural areasPromotion of the insurance services thru.Advertising, hoardings, field publicity vans, film shows, participation in villagefairs and use of traditional media like puppet show, bhajan mandli etc.Capitalizing on their credibility among consumers, LIC now uses the slogan

We know India better.

Bima Gram a new rural marketing initiative from LIC

For availing the endorsement of Bima gram:At least 75% of HHs of that village must have at least one LIC policy100 new policies in that FYLIC will plough back part of the premium earned to build infrastructure likehand pumps, solar power supply, rooms for schools etc.

Insurance Regulatory Development Authority (IRDA)

IRDA decides who gets a license to sell insuranceIRDA makes it mandatory for the private insurance companies to procurefrom rural areas as much as 5% of their business in the first year.By the second, third, fourth and fifth year their obligation is 7, 10, 12 & 15%respectively.

Other private players into rural fray

ICICI PrudentialHDFC Standard LifeBirla Sun LifeAllianz Bajaj

AMP SanmarAVIVAING Vysya LifeMetlife IndiaOm Kotak MahindraSBI LifeTata AIG Life

The top three private performers are ICICI Prudential, HDFC Standard Life &Birla Sun Life.

Allianz Bajaj campaign weaving the familiar Indian image like traditionalNamaste greeting and a slogan of care for Indias 1 billion people.

AMP Sanmar Assurance is taking regional approach.Max New York Life appoints gram sahayaks to sell life policies in rural areas.

Rural customers knowledge, attitudes and practices regarding saving &insurance

o Rural saving habits are oriented towards fulfilling specific objectives,

such as celebrating a wedding, purchase of a land, cattle or other farmassets, and building a general corpus.

o Preference is for long term saving on a secured basis.

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o Purely covering the life risk is perceived as an avoidable expense

o Rural people have faith in Govt./formal institutions like banks, LIC etc.

for their savings.o In villages an incident of cheating by a private finance or forestation

company reaches to all the inhabitants.o Seldom occurrence of such incidents had strong adverse impact on rural

masses for investing in other private finance/insurance companies

Strategies for rapid penetration of insurance products in rural markets

1. Segment Rural India2.Address the product needs3.Effective distribution channel planning4. Rural Communication5. Improvement in servicing

Segment Rural IndiaDo not lump Rural India under a single canvas.Segment the rural market on the basis of urban orientation (urban contacts,proximity to urban centers), socio-economic development etc. asDeveloped villagesDeveloping villagesUnderdeveloped villages

Developed villages:-Villages near to mega cities, state capitals and area of green revolution.-Sizeable working force engaged in non-agricultural industrial employment

adjoining to major towns.-Population is generally educated up to school level and beyond

Developed villages:-Avg income level high, ranging from Rs. 20K-200K per annum.-Fairly Good knowledge of financial investment and insurance opportunities.Insurers have great opportunity here to excel

Developing villages:-Where green revolution has taken deeper roots-Local infrastructure developed well-Several villages covered by rural development schemes have shown higher

income level (Rs. 30K-50K).-Awareness of insurance products good.-Insurers can quickly accelerate the level with some focused efforts

Primitive/underdeveloped villages:-Villages that have not joined the mainstream growth due to the reasons suchas in accessibility, extreme level of poverty and other socio-economic reasons.-Thinly inhabited-Focal points for micro credit schemes, SHGs

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-Low awareness for insurance products-With the help of NGOs the insurance level can be ramped up quickly.

Product needs of rural India

Strong bias in favour of long term saving products in rural market.

Endowment policies (fixed sum assured at the end of definite period) as wellas standard money back policies are highly popular.Last year, 93% policies fall in this category.The average sum assured under an endowment policy was Rs. 66,000.Rural thinking - on the line of receiving a tangible return on any investmentmadeA pure term insurance plan where premium is utilised solely towards coveringrisk is perceived as unavoidable expense.Term insurance schemes can be popularised the cover is made available without much paperworkthrough a network of institutions that are active in providing rural credit

Insurance companies can design a simple plan offering life cover to customerswho have taken any loan facility from the banking system so as to guaranteerepayment of outstanding loan amount to the lender in the event of death ofthe borrower

Needs to provide flexibility to rural policyholders in the matter of periodicity &quantum premium payments

The premium payments dates should be linked to the period when the farmproduce is sold and cash flow is generated.Need to build flexibility for the premium interruptions to take place due to cropfailure or other genuine reasons.An important emerging requirement in the rural market is the life insurance

policies that combine healthcare benefits.Insurance companies in the life and non-life segments that come up withcredible and convenient policies that cater to this need can expect large salesvolumes. 2

Effective distribution channel planning

Effective insurance marketing depends on the effectiveness of distributionchannel employed.Various delivery systems in rural market include individualagents (barefoot), Primary co-operative societies, regional rural banks, post

offices, and NGOs.

Individual agents have been the most effective medium in selling life products.But.. Finding the right type of candidates and in good number for rural

markets and arranging insurance training is a difficult task. AP Govt. has beenhelping insurers.Life insurer in rural regions need to have effective systems to keep watch onthe performance of these agents.

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eg Ammonium sulphate, urea, Calcium ammonium nitrate (whichsupply only the nutrient of Nitrogen) and single super phosphate, triple superphosphate (which supply phosphate).

Compound and complex fertilizers : Which contain more than one nutrienteg. Di-ammonium phosphate (DAP) is a complex fertilizer which supply

both nitrogen and phosphate.Fertilizer mixer : supply all the three nutrients in proportions as required in thecase of different crops and regions

Fertilizer- the marketing scenario

Highly controlled by Government regulationsGoverned by ECA & FCOCan be marketed only on generic name no brand name. Manufacturers addthe companys name and logoEach type of fertilizer should contain a specified percentage of nutrients.Fertilisers have to be sold at uniform price through out the country. Govt

notify the prices.

Fertilizer- the marketing mix

Product:-No much maneuverability is possible for the manufacturers in productdesigning.-Can manufacture fertilizer mixers required by certain type of soils or crops orregions. Paddy mixture, sugarcane mixture, Neem coated fertilizers.

Price :-Controlled by the Govt. including the margins for channel members and thecompany.

-Companies can offer their dealers the volume or off season discount at themost.

Distribution :is through dealer network which consists of co-operatives, agro-industriescorporations and private trade.-A few manufacturers - own retail outlets also. GSFC

Promotion:Various promotional measures adopted by the fertilizer marketers are:Inter-personal and group contacts :house to house contact campaigns

discussions with small farmer groupstraining programmes for the farmers.

Fertilizer- the marketing mix -Promotion

Mass media:Ads in vernacular press and journal, literature on crops.

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Traditionally the seed market was in the hand of central and state seedcorporations.

The responsibility of evolving new variety of high yielding seeds rested withthe Govt. agencies Ag University, Ag Research StationWith the entry of multinational companies- the seed market scenario is fast

changingResulted in competition and increase in seed demand (market development)Seed perishable product & seasonal in demand with fluctuations

Seed demand is driven by factorsPrice of the cropPrice of other competing cropsReplacement rateClimateDistributionGovt. policies

Seed market: Major factors for choice of outletsQuality of seeds

Timely supplyEasy access

In co-op channel credit & fair price emerged as imp consideration

Farmer behaviour for the use of hybrid seeds characterized largely by

Irrigation conditionsExcessive dependence on seeds alone for productivity enhancementInappropriate timing of sowingPurchase just before sowingRole of dealers in influencing about variety and brand.

Marketing mix- Seed

Product and brand differentiations- increasingly crucial due to the new patentregime.Fluctuations in demand is a major problem in efficient marketingWith low replacement rates and large area still under non-hybrid varieties, thefirm should resort generic promotion of the product (hybrids) extensionactivities.

This should be followed by product and brand specific promotions by way of Demonstration

Farmer advocacyLocal sales promotion staffField days and farmers toursCrops competitionFree seed kitsFarmer literatureDealer level promotion

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Tractor marketing

Tractors market scenario

Tractor industry grew at a CGAR of 16% between 1994-1998.However it has shown steady drop in recent two years90% of the Tractor industry is concentrates in nine major states.Total tractor sale is 221676 tractor in FY02.

Criteria count in tractor purchase

Area of land holdingNature of land holding (irrigated/dry)Types of crops grown in a yearAvailability of loanPossibility of hiring out the services of the tractor to othersRequirement of the tractor for transport of produce to market and inputs tothe farm

Factors count for successful tractor sale

Building relationship in rural settingPersonal selling skills : prospecting and benefit sellingLoan availability from the bankTrouble free service less number of breakdownsAvailability of spare partsResale value of tractorsTraining on how to use tractorsFuel efficiencyPerformance of tractorAvailability of spare partsResale value of tractors

Training on how to use tractors

Tractor sellingThe tractor marketing personnel should know

About his customers their requirements, financial status, theirinfluencersAbout the product (tractor)About competitionFAB sellng the benefit selling

reading material- rural marketing_aicar

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