rural marketing

RURAL MARKETING

Executive summary

Till recently, the focus of marketers in India was the urban consumer

and by large no specific efforts were made to reach the rural markets. But now

it is felt with the tempo of development accelerating in rural India, coupled

with increase in purchasing power, because of scientific agriculture, the

changing life style and consumption pattern of villagers with increase in

education, social mobility, improved means of transportation and its various

satellite channels have exposed rural India to the outside world and hence

their outlook to life has changed.

Coming to the frame work of Rural Marketing broadly involves reaching

the rural customer, understanding their needs and wants, supply goods and

services to meet their requirements, carrying out after sales service that leads

to customer satisfaction and repeat purchase/ sales.

Rural marketing has become the latest mantra of most corporate.

Companies like Hindustan Lever, Colgate, Palmolive, Britannia, and even

Multinational Companies (MNCs) like Pepsi, Coca Cola, L.G., Philips, and Cavin

Kare are all eyeing rural to capture the large Indian Market.

Objectives of study

RURAL MARKETING

To study rural marketing in detail.

To know importance of rural marketing.

To know the scope rural marketing in India.

To know the role played by rural marketing in development of rural

India.

To know the strategies adopted by Parle in rural market of India.

To know the services offered by Parle in the rural India.

The basic objective of the survey was to understand the concept of rural

marketing clearly by means of Parle biscuits demand analysis.

To understand the essential factors concerning rural marketing.

Understanding consumer behavior of rural India with respect to rural

marketing.

Limitations of study

RURAL MARKETING

The project is covering only the certain areas &aspects of marketing.

The secondary data is based on internet & books related to marketing.

The project is containing only one example of Parle’s.

This study is based on descriptive study.

METHODOLOGY

This project is the mixture of theoretical as well as practical knowledge.

Also it contains ideas and information imparted by the guide. The secondary

RURAL MARKETING

data required for the project was collected from various websites and books

of reputed authors.

The project started with sorting all the raw data and arranging them in

perfect order. To add value to the project and to understand the practicality of

rural marketing, primary data has been done to actually understand the

survey in a better way.

THE OVERVIEW

6, 31,307 villages, 700 million people a myriad of languages many traditions and a rich

culture. A vibrant land with a long History. Rural Indian people are known as much for their

warmth as their diversity. Welcome to the land of mysticism. The real BHARAT.

RURAL MARKETING

“EXPLORE THE RURAL MARKETS

DO NOT EXPLOIT THEM”.

INDIAN ECONOMY

--CROP CULTIVATION --INDUSTRY

--ANIMAL HUSBANDRY --BUSINESS

--DAIRYING --SERVICES

--FISHERIES

--POULTRY

--FORESTRY

Increase in competition, saturated urban markets, more and more new products

demanding urban customers, made the companies to think about new potential markets. Thus,

Indian rural markets have caught the attention to many companies, advertisers and multinational

companies. According to a recent survey conducted by National Council for Applied

Economic Research (NCAER), the purchasing power of the rural people has increased due to

increase in productivity and better price commanded by the agricultural products. By and large

URBAN SECTORRURAL SECTOR

NON-

AGRICULTURAL

AGRICULTURAL

RURAL MARKETING

this rise in purchasing power remains unexploited and with growing reach of the television, it is

now quite easy for the marketers to capture these markets.

Rural marketing has

become the latest mantra of most

corporate. Companies

like Hindustan Lever, Colgate,

Palmolive, Britannia, and

even Multinational Companies

(MNCs) like Pepsi, Coca Cola, L.G., Philips, and Cavin Kare are all eyeing rural to capture the

large Indian Market. Coming to the frame work of Rural Marketing broadly involves reaching

the rural customer, understanding their needs and wants, supply goods and services to meet their

requirements, carrying out after sales service that leads to customer satisfaction and repeat

purchase/ sales.

FORWARD

RURAL MARKETING

Change is the “LAW OF NATURE”. Though change is common, some changes seem

peculiar and paradoxical. Today, we witness in Indian Economy one such a bi-faceted change – a

change from national to global on one side and, urban to rural on the other.

“RURALISE” is among the Buzz words of this new era.

Though change is evolutionary and characteristic of a

developing nation with huge population and vast

resources, one requires a visionary entrepreneurship to

respond proactively to it.

The first five years of new millennium will belong neither to the urban markets, which

have reached saturation and where margins are under pressure nor to the export markets, which

suffer from inadequate infrastructure back home, and uncompetitive price overseas. But it

belongs to RURAL MARKETING.

“RURAL MARKETING” has become the latest mantra of most corporates. FMCG

majors like HLL, P&G, PARLE, COLGATE PALMOLIVE, BRITANNIA, etc. were the first to

wake up this fact. Even MNC’s like LG, PHILIPS, WIRLPOOL, and other consumer electronic

majors are also gung-ho about the rural segment. The fever has spread the consumer durable

companies and beyond.

Today, many of the Corporates and MNC’s look at these markets by compulsion as well

as by choice. Compulsion, because markets are saturated, and there is nowhere to go. Choice: -

because they are attractive and viable.

EVOLUTION OF RURAL MARKETING

RURAL MARKETING

CONCEPTION

Rural marketing is a process of developing, pricing, promoting, distributing rural-specific

goods and services leading to exchange between urban and rural markets which specifies

consumer demand and also achieves organizational objectives.

PHASE ORIGIN FUNCTION MAJOR

PRODUCTS

SOURCE

MARKET

DESTIONATIO

N MARKET

I Since

Independence

Agricultural

Marketing

Agricultural

Produce

Rural Urban

II Mid-Sixties Marketing of

Agricultural

Inputs

Agricultural inputs Urban Rural

III Mid-Nineties Rural

Marketing

Consumables and

Durables

Urban Rural Rural

RURAL MARKETING

Rural marketing involves a two-way marketing process, however, the prevailing flow of

goods and services from rural to rural areas cannot be undervalued.

Since demands’ of urban and rural folks are different, companies should manufacture

products to suit the rural demand rather than dump urban products on rural consumers.

The process should be able to straddle the attitudinal and socio-economic disparity

between the urban and rural consumers.

THREE-WAY PROCESS

URBAN RURAL

RURAL MARKETING

A major part of rural marketing falls into this category. It includes the transactions of

urban markets who sell their products and services in rural areas. The following are some of the

important items, which are sold in rural areas and manufactured in urban areas.

For example: - pesticides, fertilizers, seeds, FMCG products, bicycles, consumer durables, etc.

Transactions in this category basically fall under agricultural marketing where a rural

producer (farmer) seeks to sell his produce in an urban market. An agent or a middleman plays a

crucial role in this marketing. The following are some of the important items sold from rural

areas to an urban market: seeds, fruits and vegetables, milk and related products, forest produce.

This includes the activities which takes place between two villages in close proximity to

each other. The transactions relate to the areas of expertise the particular village has. The items

in this category include: agricultural tools, handicrafts and bullock carts and some dress

materials, etc.

RURAL MARKETING IN INDIA

A thorough understanding of the rural markets has become an important aspect of

marketing in the Indian marketing environment today. This attraction towards the rural markets

is primarily due to the colossal size of the varied demands of the 230 million rural people. In

fact, the rural markets are expanding in India at such a rapid pace that they have overtaken the

RURAL URBAN

RURAL RURAL

RURAL MARKETING

growth in urban markets. This rate of growth of the rural market segment is however not the only

factor that has driven marketing managers to go rural. The other compelling factor is the fact that

the urban markets are becoming increasingly complex, competitive and saturated.

Further, the vast untapped potential of the rural markets is growing at a rapid pace. The

policies of the government largely favor rural development programmes. This is clearly

highlighted by the fact that the outlay for rural development has risen from Rs 14000 crores in

the 7th plan to Rs 30000 crores in the 8th plan period.

These figures also prove that the rural market is emerging stronger with a gradual

increase in disposable income of the rural folk. In addition, better procurement prices fixed for

the various crops and better yields due to many research programmes have also contributed to

the strengthening of the rural markets. Thus, with the rural markets bulging in both size and

volume, any marketing manager will be missing a great potential opportunity if he does not go

rural.

RURAL V/S URBAN

SR. NO. ATTRIBUTE RURAL URBAN

1 Population Density Low High

2 Occupation Agriculture Trade, Industry, and

Services.

RURAL MARKETING

3 Economy Close and less

monetized.

Open and Monetized.

4 Infrastructure Poor and Weak. Abundant and Strong.

5 Attitude to

Modernization

Tradition bound. Ready for adaptation and

change.

6 Family Structure Joint Nuclear

7 Possession of House

hold assets

Low High

8 Mobility Low High

9 Literacy Low High

10 Exposure Low High

11 Attitude towards

Life

Fatalistic Scientific

12 Manufacturing

Activity

Low High

13 Distribution Outlets Fewer More

MARKETING-MIX DIFFERENCES

ASPECT RURAL URBAN

Product

a) Awareness

b) Concept

c) Positioning

Low

Less Known

Difficult

Difficult to grasp

High

Known

Easy

Easily rasped

RURAL MARKETING

d) Usage Method

e) Quality Preference

f) Features

Price

a) Sensitive

b) Level Desired

Physical Distribution

a) Channels

b) Transport Facilities

c) Product Availability

Promotion

a) Advertising

b) Personal Selling

c) Sales Promotion

d) Publicity

Moderate

Less Important

Very much

Low-Medium

Village Shops, Haats & jatras.

Average

Limited

TV, Radio, Print Media to some extent, More Languages

Occasionally

Gifts, Price Discounts

Less

Limited

Good

Important

Yes

Medium-High

Wholesalers& Retailers.

Good

High

Print, Audio-Visuals, Outdoors, Exhibitions.

Door-to-Door Frequently

Contests, Gifts, Price Discounts

Good Opportunities.

Adequate scope

DISTINCTIVENESS OF RURAL MARKETS

The Indian rural market with its vast size and demand base offers great

opportunities to marketers. Two-thirds of countries consumers live in rural areas and almost

half of the national income is generated here. It is only natural that rural markets form an

important part of the total market of India. Our nation is classified in around 450 districts,

and approximately 630000 villages, which can be sorted in different parameters such as

literacy levels, accessibility, income levels, penetration, distances from nearest towns, etc.

RURAL MARKETING

The features of Indian rural markets are:

Major income from agriculture: Nearly 60 % of the rural income is from agriculture.

Hence rural prosperity is tied with agricultural prosperity.

Low standard of living: The consumer in the village area do have a low standard of

living because of low literacy, low per capita income, social backwardness, low savings,

etc.

Traditional Outlook : The rural consumer values old customs and tradition. They do not

prefer changes.

Diverse socio-economic backwardness: Rural consumers have diverse socio-economic

backwardness. This is different in different parts of the country.

Infrastructure Facilities : The Infrastructure Facilities like roads, warehouses,

communication system, and financial facilities are inadequate in rural areas. Hence

physical distribution becomes costly due to inadequate Infrastructure facilities.

Profile of rural market

1) LARGE AND SCATTERED MARKET :

The rural market of India is large and scattered in the sense that it consist of over 63 crore

consumers from 6, 38,365 villages spread throughout the country.

2) MAJOR INCOME FROM AGRICULTURE:

RURAL MARKETING

Nearly 60% of rural of rural income is from agriculture hence rural prosperity is tied with

agricultural prosperity. During the harvest season the demand for consumer goods in villages

goes up. The population securing income from non- agricultural sector is now increasing due to

rural development programmes.

3) HETEROGENEOUS MARKET:

The relative status of the rural areas of different state differs. Parameters on which differ

are health and educational facilities, nature of facilities, availability of public transport,

electricity, T.V. transmission, banks, post office, etc.

4) CHARACTERIZED BY GREAT DIVERSITY:

The rural consumers of India are vastly diverse in terms of religious, social, cultural and

linguistic factors.

5) STEADY GROWTH DESPITE INHIBITING FACTORS:

The market has grown not only in quantitative terns but qualitatively also. Many new

products have made entry into rural consumer basket.

6) SAVING HABITS:

The saving habit of rural community is increasing in recent years as a result of the

efforts put by co-operative and commercial banks.

7) MEDIA HABITS:

RURAL MARKETING

The rural people are very much fond of music and folklore. “tamasha” is a popular form of

entertainment in Maharashtra. Similarly “nautanki” in uttar Pradesh and for more there are

televisions, video flim, and radio to influence the rural crowd.

8) BRAND LOYALIST:

Rural consumers sense a patronizing attitude of even formidable barriers to protect

themselves. It is not easy to introduce new products for them. They are bigger brand loyalists

than their urban counterparts.

9) INTER PERSONAL COMMUNICATIONS:

Inter personal communication skill accounts for 80% of the rural communication process

in the villages. This means that the word of mouth recommendations by users and sheer

familiarly influences rural folk in their purchase decisions.

10) CONSULTATION:

Very often dealers act as consultants and so their influence carries a lot of weight at the

point of purchase. Decisions regarding the brand of the consumer durables are taken by the man

in the house hold in consultation with others in the community.

CONS BOOMING IN THE RURAL MARKETS?

Although the rural market does offer a vast untapped potential, it should also be

recognized that it is not that easy to operate in rural market because of several problems. Rural

marketing is thus a time consuming affair and requires considerable investments in terms of

evolving appropriate strategies with a view to tackle the problems.

RURAL MARKETING

The major problems faced are:

Underdeveloped People and Underdeveloped Markets : The number of

people below poverty line has not decreased in any

appreciable manner. Thus underdeveloped people

and consequently underdeveloped market by and

large characterize the rural markets. Vast majorities

of the rural people are tradition bound, fatalistic and

believe in old customs, traditions, habits, taboos and

practices.

Lack of Proper Physical Communication Facilities :

Nearly fifty percent of the villages in the country do not have all

weather roads. Physical communication of these villages is

highly expensive. Even today most villages in the eastern parts

of the country are inaccessible during the monsoon.

Media for Rural Communication : Among the mass media at some point of time in the

late 50's and 60's radio was considered to be a potential medium for communication to

the rural people. Another mass media is television and cinemas. Statistics indicate that

the rural areas account for hardly 2000 to 3500 mobile theatres, which is far less when

compared to the number of villages.

Dispersed Market : Rural areas are scattered and it is next to impossible to ensure the

availability of a brand all over the country. Seven Indian states account for 76% of the

country’s rural retail outlets, the total number of which is placed at around 3.7 million.

Advertising in such a highly heterogeneous market, which is widely spread, is very

expensive.

RURAL MARKETING

Many Languages and Dialects : The number of languages and dialects vary widely from

state to state, region to region and probably from district to

district. The messages have to be delivered in the local

languages and dialects. Even though the number of recognized

languages is only 16, the dialects are estimated to be around

850.

Low Per Capita Income: Even though about 33-35% of gross domestic product is

generated in the rural areas it is shared by 74% of the population. Hence the per capita

incomes are low compared to the urban areas.

Low Levels of Literacy : - The literacy rate is low in rural areas as compared to urban

areas. This again leads to problem of communication for promotion purposes. Print

medium becomes ineffective and to an extent irrelevant in rural areas since its reach is

poor and so is the level of literacy.

MASS MEDIA – IS IT THE KEY?

The past two decades have seen a dramatic expansion of exposure to mass media in rural

areas. Since these are, almost, by definition urban media at present is an overwhelmingly urban

portrayal of life and values; their impact on attitudes and behavior has been profound.

Radio is the medium with the widest coverage. Studies have recently shown high levels

of exposure to radio broadcasting both within urban and rural areas, whether or not listeners

actually own a set. Many people listen to other people's radios or hear them in public places.

RURAL MARKETING

Surveys indicate that in rural areas more than a one third of the married women of reproductive

age have listened to a radio within the last week.

Television, video and films expose viewers to a common window on styles of life

and behavior, an impact increased by the supranational reach of the media. Television is

extremely popular where it is available. Television increasingly exposes viewers to a wide range

of national, regional and international viewpoints. Rural exposure to television has been lower by

far than radio.

But Advertising to rural consumers continues to be a hit and miss

affair. At best, it is an exercise where communicators grapple with issues of language, regional

and religious affiliations and local sensitivities. Most often finding the right mix that will have a

pan-Indian rural appeal is the greatest challenge for advertisers. But more often than not,

marketers throw in the towel going in for simplistic solutions.

Various other reasons making the mass media ineffective are: -

The Indian society is a complex social system with different castes, classes, creeds and

tribes. The high rate of illiteracy added to the inadequacy of mass media impedes reach

almost to 80% of India's population who reside in village.

Mass media reaches only 57% of the rural population. Generating awareness, then, means

utilizing targeted, unconventional media including ambient media.

RURAL MARKETING

Mass media is too glamorous, interpersonal and unreliable in contrast with the familiar

performance of traditional artist whom the villager could not only see and hear, but even

touch.

The communication and the design of marketing mix need to be different, as what attracts

one need not attract the other as well. So again, even if the media reaches a rural

consumer, there might not be an impact as he may fail to connect to it due to his different

lifestyles.

Moreover rural marketing is usually related with products having low profit

margins and high sales volumes and hence it is more important to emphasize the

availability of the product to all potential consumers than an overdose of expensive

inefficient mass-media strategies.

IF NOT MASS MEDIA, THEN WHAT?

To understand the way the rural markets work - we need to go to these markets and

spend time there in understanding them. We live in surroundings where the things are completely

different from what the rural customer experiences. And we can't understand him unless we go

and spend time there. Things like what time does he get up, etc need to be studied and customer

needs to be understood. Also these studies need to be passed on so others can also benefit from

the ground works done and enhance them further. We need in depth studies of the market, the

RURAL MARKETING

medium, the message and the rural customer in center of all these to understand the rural markets

completely.

RETAILERS: -For the rural customer the choices

available are limited. So the retailer plays a very big

role in the purchase decision. Data on rural consumer

buying behavior indicates that the rural retailer

influences 35% of purchase occasions. The rural

customer goes to the same shop always to buy his

things. And there is a very strong bonding in terms of

trust between the two.

The buying behavior is also such that the customer doesn't ask for the things by brand but

like - "paanch rupey waali chaye dena". Now it is on the retailer to push whatever brand he

wants to push as they can influence the buyer very easily and very strongly on the

preferences. Therefore, sheer product availability can determine brand choice, volumes and

market share. Thus distribution is the key factor for the success of rural marketing.

RURAL FOLK MEDIA: -As a general rule, rural marketing involves more intensive

personal selling efforts compared to urban marketing. Marketers need to understand the

psyche of the rural consumers and then act accordingly. To effectively tap the rural market a

brand must associate it with the same things

the rural folks do. Utilizing the various

rural folk media to reach them in their

own language and in large numbers so

RURAL MARKETING

that the brand can be associated with the myriad rituals, celebrations, festivals, melas and

other activities where they assemble, can do this.

In the Indian rural marketing context, perhaps linguistics could provide a new approach

to tackling communication issues and arriving at a better understanding of rural consumers.

Also, the manner in which symbols and icons are used, which provides insights and clues

into the mindsets of rural audiences, can be deployed to grab their attention.

TRADITIONAL MEDIA can be used to reach these people in the marketing of new

concept. The traditional media with its effective reach, powerful input and personalized

communication system will help in realizing the goal. Besides this when the advertisement is

couched in entertainment it goes down easily with the villager.

The traditional media like folk/street plays, wall signs/shop paintings,

van campaign/Haat events (weekly fairs), melas, home-to-home contacts and

product demonstrations can be effectively used for this purpose.

Some companies, which have successfully penetrated the rural market, used

the following strategies:

The Strategy: Reckitt and Coleman uses NGO's in rural areas to educate customers about

product benefits.

RURAL MARKETING

The Lesson: Establishes one to one communication channels.

The Strategy: BBLIL markets its rural brands through magic shows and skits.

The Lesson: Use local idioms to convey your message in a meaningful context.

The Strategy: Hero Honda has established mobile service centers to take care of rural

customers.

The Lesson: Reinforce product quality through service indicators.

Another example of a successful well-integrated rural campaign is that of the

company, Sun star Lubricants. Sun star prints leaflets in regional languages, attends

panchayat meetings and participates in agro meets to promote its products.

Sun star is using a combination of low pricing and incentives to distributors to

extend its reach in the rural areas. The quest is for higher volumes to offset marketing

costs, be it transaction costs of distributors or low selling price.

RURAL MARKETING

IF DISTRIBUTION IS

THE KEY, THEN

WHAT’S GOING

WRONG???

Unfortunately, most marketers of today

try to extend marketing plans that they use in urban areas to the rural markets and face, on many

occasions failure. They should adopt a strategy that appeals individually to the rural audience

and formulate separate annual plans and sales targets for the rural segment.

Horizontal Flow:

Changes must be made in the marketing mix elements such as price, place, product and

promotion. Corporate marketers should refrain from designing goods for the urban markets and

subsequently pushing them in the rural areas. The unique consumption patterns, tastes, and needs

of the rural consumers should be analyzed at the product planning stage so that they match the

needs of the rural people.

RETAILER

Manufacturer

Manufacturer

Manufacturer

Consumer

Consumer

Consumer

RURAL MARKETING

Vertical Flow:

Distribution costs and non-availability of retail outlets are major problems

faced by the marketers. But if one takes a closer look at the characteristic features of the

rural market, it will be clear that distribution in fact, is no problem at all. For most

companies wanting to enter the rural markets, distribution poses a serious problem.

The problems of physical distribution and channel management adversely

affect the service as well as the cost aspect. The existent market structure consists of

primary rural market and retail sales outlet. The structure involves stock points in feeder

towns to service these retail outlets at the village levels. But it becomes difficult

maintaining the required service level in the delivery of the product at retail level.

MANUFACTURER

CONSUMER

RETAILER

RURAL MARKETING

SOLUTION

DELIVERY VANS:-The way to overcome the problem would be by using company

delivery vans, which can serve two purposes- it can take the products to the customers in every

nook and corner of the market and it also enables the firm to establish direct contact with them

and thereby facilitate sales promotion. However, only the bigwigs can adopt this channel. The

companies with relatively fewer resources can go in for syndicated distribution where a tie-up

between non-competitive marketers can be established to facilitate distribution.

An example of the successful strategy is that of Tata Cellular in rural Andhra Pradesh.

Inspire of low advertisement budget, they created a hybrid distribution channel, with four tiers

direct, retail, showroom and franchise outlets that were designed for easy reach. Specific road

shows to rope in different segments such as transporters, traders and PSU employees were

organized.

Mr. Harish Bijoor, CEO, Zip Telecom, says, "Rural markets need to be approached

differently and cannot be understood as extensions of urban markets. Most marketers err on this

count. Advertising that believes in translating the English version into the vernacular cannot

capture the rural heart. For rural markets, one needs to think in the local language, remote with

the local feel and mood and visualize advertising that is rich in this context."

To attract rural buyer’s advertisers need to use simple films showing how a product is to

be used. Rajdoot Paints issues such functional advertising very effectively.

RURAL MARKETING

STRATEGIES FOR THE PRESENT AND FUTURE

The rural markets are expected to witness a different kind of a shift. As companies

aggressively compete to get a higher share of the rural pie, competitive advantage will lie with

those who have a higher reach.

Marketing according to a leading management theorist Peter Druker can be put in this

way “There will be always, one can assume, be need for some selling. But the aim of marketing

is to make selling superfluous. The aim of marketing is to know and understand the customer so

well that the product or service fits him and sell itself. Ideally, marketing should result in a

customer who is ready to buy. All that should be needed then is to make the product or service

available."

Through this we feel that the gist of mktg. in rural & urban is the same. It is nothing but

teasing the minds of people, their desires, needs, expectations & playing with their psychology.

But the market for a product may vary in rural & urban area and the marketing strategies to

market the product is also different in

urban and rural area

RURAL MARKETING

Packaging:

Rural customers are usually daily wage earners and they don’t have monthly incomes like

the ones in the urban areas have. So the packaging is in smaller units and lesser-priced packs that

they can afford given their kind of income streams.

Packaging and package sizes are increasingly playing a vital

role in the decision making process of the rural buyers. Certain

products like detergents and paste are bought in large quantities,

whereas shampoos, toilet soaps, eatables are bought in smaller pack

sizes. The reasoning behind this is that the products that are common to

family members are bought in large pack sizes, whereas individual-use

products are preferred in smaller packs.

A successful example is that of HLL’s project ‘Operation Bharat’. HLL supplied hampers

for Rs. 5, 10, 15 and 20, each of which had a Clinic shampoo bottle, a tube each of Pepsodent,

Fair & Lovely, and Pond’s Dreamflower Talc, in different sizes and combinations. The idea

behind this strategy was to have a product for hair care, dental care, skin care and body care.

Value for money:

Rural consumers are quite brand conscious. A rural consumer wants value for money

minus the frills. Zany advertising and marketing would be a no-go for this sector. A high price

tag usually deters the rural consumer from purchase. To counter this, companies need to resort to

low unit price strategy to expand sales.

A good example of this would be the sachet revolution and combo-packs. According to a

survey, 95 percent of total shampoo sales in rural India are by sachets. Colgate has followed the

very successful sachet route by introducing the toothpowders in 10g sachets of Rs. 1.50 each and

the toothpaste with Super Shakti in 15g packs of Rs. 3 each. The entrant can also offer attractive

exchange and money back schemes for its middle and lower segments.

http://www.arsworldwide.com/products/hygiene/h4.jpg

RURAL MARKETING

Convenience:

An example is what Colgate did to its tooth powder packaging.

Firstly – it made sachets as was required by their income streams.

Secondly - since many households don’t have proper bathrooms and only have a window

or things like that to keep such things -- it was wise to cap this sachet for convenience of storage

while use. So this is what they did.

Demonstration:

Direct Contact is a face-to-face relationship with people individually and with groups

such as the Panchayat and other village groups. Such contact helps in arousing the villager's

interest in their own problem and motivating them towards self-development.

Demonstration may be:

A. Method demonstration

B. Results demonstration

The five steps to make any demonstration effective are:

1. Information about people

2. Objectives to be accomplished

3. Demonstration plan & Execution of the plan

4. Evaluation of the demonstration

5. Reconsideration after evaluation.

In result demonstration, with help of audio -visual media can add value.

RURAL MARKETING

Asian Paints launched Utsav range by painting Mukhiya's house or Post office to

demonstrate that paint don’t peel off

Promotion and marketing communication:

While planning promotional strategies in rural markets, marketers must be very careful in

choosing the vehicle to be used for communication. They must remember that only 16% of the

rural population has access to a vernacular newspaper. Although television is undoubtedly a

powerful medium, the audiovisuals must be planned to convey a right message to the rural folk.

The marketers must try and rely on the rich, traditional media forms like folk dances,

puppet shows, etc with which the rural consumers are familiar and comfortable, for high impact

product campaigns. Thus, a radical change in attitudes of marketers towards the vibrant and

burgeoning rural markets is called for, so they can successfully impress on the 230 million rural

consumers spread over approximately six hundred thousand villages in rural India

Wall Paintings

Wall Paintings are an effective and economical medium for advertising in rural areas. They are

silent unlike traditional theatre .A speech or film

comes to an end, but wall painting stays as long as the

weather allows it to. Rural household’s shopkeepers

and panchayats do not except any payment, for their

wall to be painted with product messages.

The greatest advantage of the medium is the power of the picture completed with its local

touch. The images used have a strong emotional association with the surrounding, a feat

impossible for even a moving visual medium like television, which must use general image to

cater to greatest number of viewers.

Such a promotion has led to an interesting outcome. For both, washing and for taking

bath - one requires water. Now for rural markets there are three sources of water - wells, hand

pumps and ponds. For the first in the history of advertising - these are being branded.

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Special stickers were put on the hand pumps, the walls of the wells are lined with

advertising tiles and tinplates are put on all the trees surrounding the ponds. The idea is to

advertise not only at the point of purchase but also at the time of consumption.

So the customer could also see the advertising when he was bathing or washing. Now, the

customers who bought these brands got a sense of satisfaction by seeing their choice being

advertised in these places while a question was put in the minds of the customers who had

bought other brands. So this was an innovative strategy that worked quite well.

Example of successful use of wall painting is by Nirma, which makes extensive use of

wall paintings; also a soil conditioner called Terracare uses images of Sita, Luv and Kush to

attract the rural consumer.

Haats & Melas

The country’s oldest tradition holds the key to rural penetration. The average daily sale at a Haat

is about Rs.2.25 Lacs while the annual sales at melas

amount to Rs.3, 500 crore.

In rural India, annual melas organized with a

religious or festive significance are quite popular and

provide a very good platform for distribution. Rural

markets come alive at these melas and people visit them

to make several purchases.

According to the Indian Market Research Bureau, around 8000 such melas are held in

rural India every year.

Rural markets have the practice of fixing specific days in a week as Market Days when

exchange of goods and services are carried out. This is another potential low cost distribution

channel available to the marketers. Haats serve a good opportunity for promotion after brand

building has been done at Mela.

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Also, one satellite town where people prefer to go to buy their durable commodities

generally serves every region consisting of several villages. If marketing managers use these

feeder towns they will easily be able to cover a large section of the rural population.

Dealing with this sector needs innovative and localized approaches: Watch major

Titan Industries plans to aggressively approach the rural and semi-urban markets in India by

creating a separate image for its low-priced Sonata brand.

The company has opened its first showroom in Bhopal and nine more showrooms are to

be opened across the country. The marketing strategy being followed is to keep the prices of the

watches at an affordable range of Rs 295-1,195 and create a niche market for the brand.

They will not open showrooms in metros

such as Mumbai or Delhi for Sonata brand. The target segment would be the Rs 295-700

customers. They plan to open showrooms at locations, which rural customers visit frequently

such as bus terminals, railway stations among others.

Also, there would be a range of 300 models from smart plastics and all weather steel to all

gold and all-occasion gold and leather. Titan will be looking for the marriage season, which will

start from April-June where the rural customers become actual buyers.

Another innovative idea is that of Sanjay Lalbhai's Ruf and Tuf jeans is targeted at the

rural market. And they are leaving nothing to chance. Arvind Mills is teaching tailors in the

villages how to stitch the jeans.

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Mobile Traders:

Even though they have been used before for redistribution,

Cycle Salesman could possibly emerge as one of the most cost-

effective ways of selling directly to rural consumers. The lack of

motor able roads and high distribution costs are not a hindrance any

more.

Mobile traders score over the conventional wholesale channel

on both counts of cost and reach. They travel either on foot or on cycles. That means

transportation costs are virtually non-existent. Besides these traders can target smaller villages,

which conventional distribution channels often do not touch?

The mobile traders can play a crucial role in buying decision. Most rural women are loath

to visit retail outlets. Mobile traders therefore are a smart way of reaching women in their home

environment. The women rely on these mobile traders to sell them goods in the security of their

home.

Rural India is a marketer’s dream given its tremendous potential and increasing money

power. The formula of success for companies entails a complete shift in marketing and

advertising strategies.

"To be successful in the rural market, remember- there is no

unity in diversity, but act local while thinking global."

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PROFILE OF RURAL CONSUMERS

The rural customer shows distinctive characteristics, which makes him

different from the urban buyers.

Education Profile

Nearly 45% of the rural Indians are literate (men 59%, women 31%). The rural customer

has much lesser education than his/her urban counterpart. Generally, the maximum education

that one sees among rural areas is still primary school or high school level. Though rural literacy

programmes have made significant headway, we are still confronted with a customer who is

illiterate. This comes in the way of the marketer using print media and handbills to promote the

product.

Visual displays and phonetics become important in promoting the product in the rural

areas. Demonstration on product usage and even on how to use it becomes integral to the

marketer’s promotion strategy.

Low income levels

Though rural incomes have grown manifold in the last one decade, still an average rural

consumer has a much lower income than his or her urban counterpart. Still a large part of his

income goes to provide the basic necessities, leaving smaller income to be spent on other

consumer goods.

This makes the rural consumer more price sensitive than the urban consumer. Marketers

have evolved various strategies to lower the final prices. One such strategy is designing special

products as reflected by Hindustan Levers strategy of developing Sunlight Detergent Powder and

the other in even reducing the size of the product. Another aspect of this low income is that an

average rural customer buys a single unit of the product and not in bulk.

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Occupations

Typically, in the rural area one finds that the principal occupation is farming, trading,

crafts, and other odd jobs like plumbing, electric works, etc. One also finds primary health

workers and teachers in the rural areas. Since farming, animal husbandry and poultry farming are

the principal occupations we find that even here we have different types of farmers.

The basis for differentiation is obviously their size and ownership of land. We have their

consumption patterns differ mainly because of their income levels. For example, a large or a big

farmer will have almost everything that an urban consumer will have. He is an affluent farmer

and represents the highest end of the rural income continuum.

Reference Groups

Typically in rural area, the reference groups are the primary health workers, doctors,

teachers and the Panchayat members. One may even observe that the village trader or the

grocery shop owner, commonly called the “baniya” or the “mahajan”, may also be an important

influence in the rural customer’s decision-making.

This is because the trader extends credit to the farmers. Today, another person is also

considered as a change agent and that is the rural bank’s officer or manager. A marketer needs

to be aware of these influences that can effect a change in the rural customer’s consumption

patterns.

Media Habits

A rural customer is fond of music and folklore. In a state like Maharashtra the rural

theatre called “Tamasha” has held sway with the people. Likewise, “Nautanki” in which the

artists are a part of the audience entertains the rural Uttar Pradesh. Today, television and radio

are important forms of media, which hold the attention of rural folks, so is the video.

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Radio Programmes reach almost 95% of the Indian population, while television

programmes is now as high as 85%. As we mentioned earlier because of a low education level

print media does not have that much of an impact as the audio and the audiovisual media does.

Importance of customs

Basic cultural values have not yet faded in rural India. Buying decisions are still made by

the eldest male member in the rural family whereas even children influence buying decisions in

urban areas. Further, buying decisions are highly influenced by social customs, traditions and

beliefs in the rural markets. Many rural purchases require collective social sanction, unheard off

in urban areas.

The rural attitude towards consumption has been traditionally based on the values of

restrain and self-denial. But the high exposure to T.V advertising in recent years where brands

are working relentlessly to loosen this restraint by communicating escape/release and self-

confidence messages is having its effect, particularly on the youth. But Caste and family are

still paramount in rural life.

But we should bear in mind that with more and more marketers eyeing for a piece of the

rural cake, the awareness of the rural consumer is on the rise. He is moving towards branded

purchases and is becoming more and more demanding in his purchase decisions.

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CONSUMER BEHAVIOR, INFLUENCES

A stereotype of the rural consumer or of rural consumer behavior is absent and

this creates problems as well as opportunities for the marketer. Variations in behavior reflect

geographical, demographical and behavioral influences on lifestyle, which provides marketers

with options to segment the market.

To understand rural buying behavior, a marketer must first

understand the factors that influence buying behavior and the variations to

behavior. These help to generate information upon which a marketer can

create bases to segment the rural market taking the following factors

consideration:

Environment of the consumer

Geographical Influences

Influence of Occupation

Place of Purchase

Creative use of Products

Obviously rural consumers do make some purchases from urban areas (towns etc)

because there are a few product categories where rural distribution is still comparatively low and

therefore the consumers buys from towns; and in certain cases, the consumer seeks variety. In the

case of biscuits, toilet soaps and washing powders, the consumers may perceive the range in

villages as limited.

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SOCIAL AND BEHAVIORAL INFLUENCES

Likewise social and attitudinal influences serve as a guide to decisions or product

positioning, media, message etc

Social –

This is a nebulous subject that involves stratifying people into groups with various

amounts of prestige, power and privilege. Although the cast system in India is now illegal, it still

remains a tremendous influence on rural society. Within a society, an important broad factor

influencing consumer behavior is social class.

This constitutes a relatively permanent division of category in a society, a division that

brings out some restrictions of behavior between individuals in different classes; individuals in a

given social class share similar values, lifestyles, and behavior standards.

Cultural –

Culture is a complex of abstract and material elements created by society. It refers to

values, ideas, attitudes and meaningful symbols, as well as artifacts elaborated in a society.

Those elements are transmitted from one generation to another and serve to shape human

behavior, implying explicit or implicit patterns of and for behavior.

Perception –

Perception is an approximate of reality. Our brain attempts to make sense of the stimuli to

which we are exposed. Perception can be defined as a process of selecting, organizing and

interpreting or attaching meaning to events happening in the environment. Exposure involves the

extent to which we encounter a stimulus.

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In rural areas, when marketers fall short of exposing their produces, alternate uses for the

same product crop up. Interpretation involves making sense of the stimulus. Perception being a

subjective process, different people may interpret an event differently.

Attitude-

Consumer’s attitudes are a composite of a consumer’s beliefs, feelings and behavioral

intentions towards some object within the context of marketing, usually a brand or establishment.

These components are viewed together since they are highly interdependent and together

represent forces that influence how the consumers will react to the object.

Demographics-

This refers to as segmentation of target consumers for whom the product is being

designed. For example, the shaving cream and different accessories are only meant for men.

There are different ways of classification (i.e.) on the basis of age, sex, income groups, social

reasons, etc. which are prevailing in rural areas.

Influence groups-

Influence groups involve consumer decisions, and individuals greatly influence each

other. The term comes about because an individual uses a relevant group as a standard of

reference against which he compares himself. The influence group includes reference groups,

opinion leaders, family and innovation.

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CONSTRAINTS/HURDLES FACED

With the change in the economic policies of the government, many companies have

ventured into the rural markets. However, their efforts have not been sufficiently rewarded. The

various constraints can be enumerated as:-

Lack of Infrastructure: The basic facilities like roads, transport facilities, electricity,

telecommunication, etc are missing in most of the rural areas of India.

Market Planning and Awareness: Lack of awareness and understanding of consumer

behavior in rural markets, creates problems in formulating strategies and plans.

Designing the Products: There is a drastic difference in the utility value in the urban and

rural market. A product with a particular design and pattern may not find acceptance in

rural markets, but may be a success in urban areas.

Inadequacy of Channels of Distribution: Due to comparatively less focus on rural

markets – the exploitation of the rural market to the fullest extent has not taken place.

Communication: With the given level of literacy and awareness of rural population,

communication constitutes a major hurdle in exploiting rural markets. Various factors

like language, religion, superstitions, rigidity etc make communication in rural markets

more difficult.

Pricing of the Product: Price factor is more crucial in rural areas than in urban markets.

The consumer must feel satisfied and benefited after paying the price for a particular

product.

Right to Decision: In most rural families, it is the head of the family who decides what to

buy and when to buy. Consequently his purchase decisions are influenced by his own

personality traits, rather than the aptitude and perception of the actual consumers of these

goods.

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THE NEXT STEP

The potentialities of the rural market are

indeed great. With the changing economic

conditions in the country and with emerging rural

markets are bound to yield rich dividends.

All this calls for concentrated and coordinated

action on the part of both, the government and the

industry.

The government’s role lies primarily in

developing the infrastructure, e.g. a good network

of roads in the interiors of rural India, speedy

arrangements for better light, water and irrigation

facilities, financial and technical assistance in setting up industries in villages, and distribution of

their products. The government’s role will be equally important in conducting rural market

surveys and compilation of vital statistics and their publication for the benefit of business and

industry.

A hand-in-hand working of the government and industry will definitely help define a smooth

road to development and growth of rural market.

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INTRODUCTION

A long time ago, when the British ruled India, a small factory was set up in the suburbs of

Mumbai city, to manufacture sweets and toffees. The year was 1929 and the market was

dominated by famous international brands that were imported freely.

Despite the odds and unequal competition, this company called Parle Products, survived

and succeeded, by adhering to high quality and improvising from time to time. A decade later, in

1939, Parle Products began manufacturing biscuits, in addition to sweets and toffees. Having

already established a reputation for quality, the Parle brand name grew in strength with this

diversification.

Parle Glucose and Parle Monaco were the first brands of biscuits to be introduced, which

later went on to become leading names for great taste and quality.

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EVOLUTION OF PARLE FOODS LTD

Parle-G has been a strong household name across India. The great taste, high nutrition,

and the international quality, makes Parle-G a winner. No wonder, it's the undisputed leader in

the biscuit category for decades. Parle-G is consumed by people of all ages, from the rich to the

poor, living in cities & in villages. While some have it for breakfast, for others it is a complete

wholesome meal. For some it's the best accompaniment for chai, while for some it's a way of

getting charged whenever they are low on energy. Because of this, Parle-G is the world's

largest selling brand of biscuits.

Launched in the year 1939, it was one of the first brands of Parle Products. It was called

Parle Glucose Biscuits mainly to cue that it was a glucose biscuit. It was manufactured at the

Mumbai factory, Vile Parle and sold in units of half and quarter pound packs.

The incredible demand led Parle to introduce the brand in special branded packs and in

larger festive tin packs. By the year 1949, Parle Glucose biscuits were available not just in

Mumbai but also across the state. It was also sold in parts of North India. By the early 50s, over

150 tones of biscuits were produced in the Mumbai factory.

Looking at the success of Parle-G, a lot of other me-too brands were introduced in the

market. And these brands had names that were similar to Parle Glucose Biscuits so that if not by

anything else, the consumer would err in picking the brand. This forced Parle to change the name

from Parle Glucose Biscuits to Parle-G.

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Originally packed in the wax paper pack, today it is available in a contemporary,

premium BOPP pack with attractive side fins. The new airtight pack helps to keep the biscuits

fresh and tastier for a longer period.

Parle-G grew bigger by the minute. Be it the packs sold, the areas covered or the number

of consumers. It became a part of the daily lives of many Indians. It wasn't a biscuit any more. It

had become an icon. The next level of communication associated the brand with the positive

values of life like honesty, sharing and caring.

In the year 1997, Parle-G sponsored the tale-serial of the Indian superhero, Shaktimaan

that went on to become a huge success. The personality of the superhero matched the overall

superb benefits of the brand. Parle extended this association with Shaktimaan and gave away a

lot of merchandise of Shaktimaan, which was supported by POS and press communication.

The children just could not get enough of Parle-G and Shaktimaan.

In the year 2002, it was decided to bring the brand closer to the child who is a major

consumer. A national level promo - `Parle-G Mera Sapna Sach Hoga' was run for a period of 6

months. The promo was all about fulfilling the dreams of children. There were over 5 lakh

responses and of that, over 300 dreams were fulfilled. Dreams that were fulfilled ranged from

trips to Disneyland at Paris & Singapore; meeting their favorite film star Hrithik Roshan; free

ride on a chartered plane; 20 scholarships worth Rs 50,000; a special cricket coaching camp

with the Australian cricketer - Ricky Ponting; etc.

The year 2002 will go down as a special year in Parle-G's advertising history. A year

that saw the birth of G-Man - a new ambassador for Parle-G. Not just a hero but also a super-

hero that saves the entire world, especially children from all the evil forces. A campaign that is

not just new to the audiences but one that involves a completely new way of execution that is

loved by children all over the world - Animation. A TV commercial that showed G-Man saving

the children from the evil force called Terrolene launched this campaign. It was also supported

by print medium through posters and streamers put up at the retail outlets.

http://www.parleproducts.com/images/G-man.rm

http://www.parleproducts.com/images/SHAKTIMAAN.rm

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G-Man, a new superhero of Parle-G has the potential of making it big. And will be

supported by a campaign that will see many a new creative in the future so as to keep the

children excited and generate pride in being a consumer of Parle-G.

To make the brand much more interesting and exciting with children, it was decided to

launch a premium version of Parle-G called Parle-G Magic in the year 2002. Parle-G Magic is

available in two exciting tastes - ‘Chocó’ and ‘Cashew’. The year 2002 also witnessed the

launch of Parle-G Milk Shakti, which has the nourishing combination of milk and honey,

especially launched for the southern market.

Parle-G continues to climb the stairs of success. Take a look at the global market where

it is being exported. First came the Middle East then USA followed by Africa and then

Australia. An Indian brand, that's exported to almost all parts of the world. After all that's what

you would expect from the Parle-G World's Largest Selling Biscuit

STRENGTH OF THE PARLE BRAND

http://www.parleproducts.com/importexport.html

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Over the years, Parle has grown to become a multi-million US Dollar company. Many of

the Parle products - biscuits or confectionaries, are market leaders in their category and have won

acclaim at the Monde Selection, since 1971.

Today, Parle enjoys a 40% share of the total biscuit market and a 15% share of the total

confectionary market, in India. The Parle Biscuit brands, such as, Parle-G, Monaco and

Krackjack and confectionery brands, such as, Melody, Poppins, Mangobite and Kismi, enjoy a

strong imagery and appeal amongst consumers.

Be it a big city or a remote village of India, the Parle name symbolizes quality,

health and great taste!

And yet, this reputation has been built, by constantly innovating and catering to new

tastes. This can be seen by the success of new brands, such as, Hide & Seek, or the single twist

wrapping of Mango bite.

In this way, by concentrating on consumer tastes and preferences and emphasizing

Research & Development, the Parle brand grows from strength to strength.

QUALITY COMMITMENT

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Parle Products has one factory at Mumbai that manufactures biscuits & confectioneries

while another factory at Bahadurgarh, in Haryana manufactures biscuits. Apart from this, Parle

has manufacturing facilities at Neemrana, in Rajasthan and at Bangalore in Karnataka.

The factories at Bahadurgarh and Neemrana are the largest such manufacturing facilites

in India. Parle Products also has 14 manufacturing units for biscuits & 5 manufacturing units for

confectioneries, on contract. All these factories are located at strategic locations, so as to ensure

a constant output & easy distribution. Each factory has state-of-the-art machinery with automatic

printing & packaging facilities.

All Parle products are manufactured under the most hygienic conditions. Great care is

exercised in the selection & quality control of raw materials, packaging materials & rigid quality

standards are ensured at every stage of the manufacturing process. Every batch of biscuits &

confectioneries are thoroughly checked by expert staff, using the most modern equipment.

MARKETING STRENGTH

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The extensive distribution network, built over the years, is a major strength for Parle

Products. Parle biscuits & sweets are available to consumers, even in the most remote places and

in the smallest of villages with a population of just 500.

Parle has nearly 1,500 wholesalers, catering to 4,25,000 retail outlets directly or

indirectly. A two hundred strong dedicated field force services these wholesalers & retailers.

Additionally, there are 31 depots and C&F agents supplying goods to the wide distribution

network.

The Parle marketing philosophy emphasizes catering to the masses. We constantly

Endeavour at designing products that provide nutrition & fun to the common man. Most Parle

offerings are in the low & mid-range price segments. This is based on our cultivated

understanding of the Indian consumer psyche. The value-for-money positioning helps generate

large sales volumes for the products.

However, Parle Products also manufactures a variety of premium products for the up-

market, urban consumers. And in this way, caters a range of products to a variety of consumers.

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HOW PARLE FOUGHT TO MAKE BISCUITS

AFFORDABLE TO ALL?

Biscuits were very much a luxury food in India, when Parle began production in 1939.

Apart from Glucose and Monaco biscuits, Parle did offer a wide variety of brands.

However, during the Second World War, all domestic biscuit production was diverted to

assist the Indian soldiers in India and the Far East. Apart from this, the shortage of wheat in those

days, made Parle decide to concentrate on the more popular brands, so that people could enjoy

the price benefits.

Thankfully today, there's no dearth of ingredients and the demand for more premium

brands is on the rise. That's why; we now have a wide range of biscuits and mouthwatering

confectionaries to offer.

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CUSTOMER CONFIDENCE

The Parle name conjures up fond memories across the length and breadth of the country.

After all, since 1929, the people of India have been growing up on Parle biscuits & sweets.

Today, the Parle brands have found their way into the hearts and homes of people all over

India & abroad. Parle Biscuits and confectioneries, continue to spread happiness & joy among

people of all ages.

The consumer is the focus of all activities at Parle. Maximizing value to consumers and

forging enduring customer relationships are the core Endeavour at Parle.

Parle’s efforts are driven towards maximizing customer satisfaction and this is in synergy

with their quality pledge.

"Parle Products Limited will strive to provide consistently nutritious & quality food

products to meet consumers' satisfaction by using quality materials and by adopting

appropriate processes. To facilitate the above we will strive to continuously train our

employees and to provide them an open and participative environment."

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MARKETING MIX…

4 P’S CONSIDERED IN PARLE

Biscuits are the commodity which was considered as a product for the rich class people.

As this a product, that is traced out from western countries. So, it was considered to be an urban

based product. The rural people were not able to get this thing. But this belief was being broken

down by Parle.

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Parle Product Limited is a company which introduced their quality biscuits at a

reasonable cost. A cost which is affordable by each and every class people. Even irrespective of

the consumer of urban or that of the rural areas.

“Parle rules the market because it provides quality assurance with its penetrating

potentiality pricing”.

In a rural area, there are people with different economic statues. So, the Parle biscuits

are being priced to suit their statues. Rich people buy this, because of good quality. And the

middle class or poor people buy it, because it provides low cost benefit to them along with

quality.

The product policy and strategy is the corner stone of a marketing mix. To the

marketer products are the building blocks of a marketing plan.

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PRODUCT

BISCUITS are the products of daily consumption.

Consumed by, one and all.

And when it comes to Parle biscuits, it is loved by all.

Parle Products Limited has launched different brands of biscuits and confectioneries. Not

only in urban areas but also in rural markets as well. They have entered the rural markets with

the same price and quality. Not with all the brands but many of them. Out of which Parle-G is

the most vital one. It has penetrated so much in the market that it has become the house hold

name.

Even it is compared to the meal of a person. That if a person consumes a full packet of

biscuit instead of having lunch or dinner. And this is accepted by the consumers, as the

nutritional value is high enough. This stands as a biggest accomplishment for the company.

A Company needs nothing except the consumer satisfaction. And Parle has successfully

gained that. This is its biggest achievement which creates a SUCCESS STORY.

The Core of the Product: - The core or the basic constituent of the product is the first

component in the total personality of any product. Same is the case with Parle Products. It is

presented as a product of daily consumption, which has a combination of unique features like

Quality and nutritional value as well. For Example, the unique pack of Parle G biscuits, the

rectangular shape of biscuits, the unique smell, the brand name, the price, the positioning as a

product for all age people and even all class people, economically.

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PRICE

For example, PARLE G

WEIGHT NUMBER OF

BISCUITS

PRICE

19 grams 4 Biscuits Re. 1

50 grams 8 Biscuits Rs. 2

100 grams 16 Biscuits Rs. 4

300 grams 48 Biscuits Rs. 10.00

500 grams 110 Biscuits Rs. 15.00

These are the various prices of Parle-G Biscuits in urban as well in rural areas. The price

is too low, which is affordable by all irrespective of an

individual’s economic status.

Rural consumers look for value than its price. Product

strategy and pricing are inter linked with each other to

deliver value at the right price. So, the biscuits of Parle are

of good quality and nutritious.

Also, the rural consumers are more interested in the utility of the product rather than

packaging. So, it’s better to avoid sophisticated packing. And it will help out in reducing the cost

as well. Simple packing should be adopted. Parle uses polyethylene sheets instead of boxes,

which keeps the quality and quantity of biscuits and confectioneries in good condition.

The price is low enough as it has to penetrate in the market even in the interior of the

country. It makes it affordable by each and every one.

PLACE

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Place refers to as the distribution channels adopted by Parle Products to reach even the

interior part of the village. This is a quiet difficult and challenging task. But, Parle has always

seen further to find solutions and grab opportunities.

Determining Channels of Distribution

A marketing channel is the pipeline through which a product flows on its way to its

ultimate consumer.

Own designed channel of distribution: Channels are tailor- -made to meet the needs of

the company. New products, like hide n seek etc., commonly require different distribution

channels from those needed for products, which are well established and widely accepted

like Parle G, Marie. Etc.

Avoid multiple channels: Multiple distribution channels sometimes create conflicts.

Distribution will be adversely affected unless these conflicts are resolved. So, the Parle

Company doesn’t go for multi channel as it is harmful. So, they have only the established

ones.

When to change the channel: Change in buyer’s location may dictate a change in

marketing channels. Changes in concentration of buyers may also require a change in

marketing channels.

DISTRIBUTION CHANNEL: -

AGENCIES OR AGENTS

PARLE’ S PRODUCTION UNIT

WHOLESELLER

TEA SHOPS / PAANWALLASRETAILER RAILWAY STATIONS

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AGENTS OF AGENCIES

This shows that Parle’s Production units dispatching the biscuits to the well established

agents or agencies. They send it further to the Whole seller.

Now, the wholes seller and the agents send the biscuits to the small retailers.

Places where the Parle Products are available: -

1. Kiryana Stores

2. General Stores

3. Tea Shops.

4. Railway Stations.

5. Paan wallas.

6. Place where the cultural programmes of village are being organized, like melas, etc.

7. Mobile traders, etc.

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PROMOTION

Sales promotion consists of activities that have the purpose of making other sales efforts

(e.g. advertisement) more effective. Some popular sales promotion techniques of Parle are:

a. Special displays

b. Offering Scholarship

c. Running contest

d. Distribution of free samples

e. Offering free introductory services

f. Demonstrating products

In spite of all efforts spent in doing market research, sales forecasting and advertising and

sales promotion, someone ultimately must do some personal selling of products or services.

Selling through Agent Middlemen

Selling Agent: The selling agents perform on the basis of extended contracts and

negotiate all sales of a specialized line of merchandise or the manufacturer’s entire

output. Usually, the agent has full authority concerning prices and terms and is the sole

seller for the line represented and is not given market area.

Manufacturer’s Agent: the manufacturer’s agent or representatives is an independent

business person who sell a part of output of two or more client manufacturers whose

products are related but non-competing, on a continuous or contractual basis in a limited

or exclusive territory. Manufacturers use agents more often than any other type of agent

middlemen. The agents do not take title to the goods, are paid a commission and have

little or no control over prices, credit or other terms of sales.

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Advertising

It is used to inform the customers of the availability of the firm’s products or service and

to its competitor’s products. In order to be successful, advertising should be based on the firm’s

capability to provide quality workmanship and efficient service. It should be closely related to

changes in customer’s needs and desires.

The advertisement in the rural areas is done by: -

Television commercials.

Radio commercials.

Wall Paintings

Banners.

Shop Displays.

Newspapers.

Magazines.

Accepting visits of students to the company for giving detailed information

about the Company to them.

Counter Sale is about to start now.

RURAL MARKETING

STRATEGIC MARKETING POLICIES OF PARLE

Formulation of strategic marketing policies for certain areas of the Parle Are:

1. Morality and public service

2. Product

3. Market

4. Profit

5. Customer relations

6. Promotion

7. Credit Policies

Morality and Public Service

Policies on morality and public service consist of general statements expressing Parle’s desire

to be honest in its dealings with public and its customers. They fulfill the demands of the

consumers by supplying adequate quantities to them. And they follow morality by providing

products at good and acceptable quality.

Product

Parle often finds its most effective competitive weapon in the field of product strategy. It may

concentrate on narrow product line, develop a highly specialized product service or provide a

product containing an unusual amount of advantage and satisfaction. Competitor’s products,

prices and services are constantly examined to determine whether the Company can build a

better product.

Parle has always followed this principle of making the product as the most important thing

rather than spending more on advertising and promotions. They feel that if the product has

quality, than it will be promoted on its own. It will itself act as publicity.

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Market

Market policies are designed to clarify with geographic areas Parle wishes to serve and other

marketing characteristics appropriate for it. The market policies are framed as per the market

segmentation. As the Parle Biscuits don’t have the targeted market as such, because it is a

product consumed by all. So, there are market strategies as per the potentiality to cover the

markets

And the biggest achievement for Parle is that, it is available in “Every Nook and

Corner” of the country. It has even reached the interior most part of the rural areas. This has

been possible only by the foolproof distribution system.

Profit

Profit policies may require that sales goals be specified that will provide Parle a sufficiently

large sales volume or profit as percentage of sales may be specified which calls for low

marketing costs.

As the biscuits of Parle are well known, they don’t have to spend much on advertisements.

So, the profit margins are increasing substantially. Initially, they followed penetration policy of

pricing. And it worked. Still, the price is too low to be affordable by the common man.

But, now they are planning to increase the prices of the biscuits, to increase their profits even

more. This pricing policy refers to as Skimming the Cream.

Customer Relations

Parle’s relationship with its customers may be indicated with a question

Should the firm have a policy that customer is always right?

Parle, also like other company’s feel that consumers are the most important aspect. The

consumers are always right because they are the sources through which a company comes to

know about its performance. Same is the case with Parle.

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They follow the feedback by the consumers and do as they want. They consider the

consumers views as of prime importance. Because, if the consumers are satisfied no one can stop

the growth of Parle.

Promotion

The pattern of Parle’s advertisement may reveal the promotion policies. It always follows a

policy of tasteful advertising at all times. Sales promotion may be restricted to trade shows or to

industrial publications or to some other advertising media.

There are different promotion techniques like free samples, scholarships, etc.

Credit Policies

In order to stimulate sales, customer should be provided with credit. However, an appropriate

credit policy is essential to be successful in granting credit. This is a useful policy as it attracts

the consumers and the retailers. And also increases their confidence in the brand. The credit can

be given by the company to the whole sellers or retailers. And in turn they will give credit to

consumers

PARLE’S RURAL MARKETING MANAGEMENT

RURAL MARKETING

Marketing management refers to distribution of the firm’s product or service to the

customers in order to satisfy their needs and to accomplish the firm’s objectives.

Marketing includes developing the product, pricing,

distribution, advertisement, and merchandising, doing personal selling, promoting and directing

sales and service to customers.

Marketing is an essential function because unless the firm has a market, or can develop a

market, for its product or service, other functions of staffing, producing and financing are futile.

Developing rural marketing Strategies for Parle: -

a. Determine what the customer’s needs are and how those needs can be satisfied.

b. Select the market that would be served.

c. Decide what advantage that will give a competitive edge over other firms.

Meeting customer’s needs

Learning customer’s needs

Conscious about the firm’s image

Looking for danger signals

These are the questions which arise while introducing a new product, such as HIDE n SEEK.

Market Segmentation

http://www.cogentis.com.au/marketing-strategy-win-new-clients.jpg

RURAL MARKETING

A market should be defined in terms of various characteristics such as economic status,

age, education, occupation and location. The best opportunity is to identify a market segment that

is not well served by other firms. To determine the firm’s market segment, the fundamental

aspects are summarized:

a. What is the place of the firm in the industry and how it can compete with others?

b. Whether the firm is known for its quality or price.

c. Image of the firm among the customers.

“As Parle is a well established brand, its products are not new to the people. So,

when they launch a new product, it becomes easy for them as the Company is

known for its branded products all over the country.”

TALK WITH

MANAGING DIRECTOR

RURAL MARKETING

I had visited a production unit of Parle Biscuits, which is situated in Ambernath, near Thane. The

unit’s name is Bunty Food Products.

There I got an opportunity to talk to one of the Managing Directors of that unit

“Mr.MUKESH S. MOHINANI”.

He proved to be very co-operative and resourceful

He gave me adequate information, which is required in the project.

Below is the information gained through the visit: -

What are the products (biscuits) of Parle?

Parle-G, Krackjack, Monaco, Milk-Shakti, Hide n Seek, Fun Center, Cheeselings, Jeffs, Marie

Choice, Parle Magix, Monaco Bites etc.

Which products are being marketed in the rural areas?

All the products are marketed in rural areas but the vital products are Parle-G, Marie Choice n

Monaco.

Which rural areas are being covered to market these products?

According to the production unit in Vadgaon {Shiv Shakti Parle Products Ltd.} rural markets

covered are Vadgaon, Kamshed, Talegaon, Kanhe and Chakan etc.

What are the Marketing/Advertising Strategies for Rural areas?

All 7 p’s of marketing are considered in order to penetrate in the market and to be the world’s

leader, to gain customer confidence through TQM policy in production units. For advertising

free sampling of the products is done along with picturization of its benefits to the consumers.

What are the Distribution Channels?

RURAL MARKETING

The distribution channel of the unit is through established agencies who supply products to the

various markets in the nearby villages.

What are the targeted consumers in the rural areas?

There are no particular target consumers because it’s a product which is

consumed by all. So, it targets all the people irrespective of age, sex, economic

differences, etc.

What are the pricing policies for Rural Markets?

Initially, Parle had started with a very low price. Just to penetrate into the markets. It has

prevailed as yet. But now Parle people are trying to increase their profits by raising prices of the

products. Just they are deciding to change the pricing policy to SKIMMING THE CREAM.

Any specific Packaging, for Rural Markets?

There is no specific or low grade packing for rural areas as compared to the urban areas. The

packaging remains same as it is all over.

How do you tackle Competition?

Parle faces competition by just keeping up the quality and prices as per the pre defined standards.

There are no levels in it. It has stable marketing strategies.

Problems Faced, If any?

There used to be some problem due to imitation brands, like Payal G, Parole G, Parale G,

Parel G, etc.

But now people identify the brand very well. They recognize by the sweet girls’ image on the

pack and the PARLE on it written in Red. It acts as the logo.

So, now this drench is cleared off. And the question about different companies competition, than

they are also here to business. And the best may win.

What are the reactions of the consumers towards the products?

RURAL MARKETING

The consumers are the ones who decide upon one’s fate in business. As it’s a product of daily

use, it is accepted by everyone. And about its good taste and nutritional content makes it

outstanding. It is today an established brand which is known to everyone.

How is Rural marketing different from Urban Marketing?

Rural marketing is also a type of marketing, but the only difference is that its more challenging.

People are same everywhere. Only their perceptions, attitudes, lifestyles differ. Rest all is same.

Only we have to identify the ways to convince them.

What are the current marketing strategies of Parle?

1. Analyze present and future market situation

2. Shape the product to suit the market

3. Evaluate the company’s resources

4. Keep informed about the competitors

Finally, he gave the knowledge about his own

production unit. This included the production process and the

factory site. Through this I got to know about the Techniques of

TQM & Quality Management being followed in the process. And the techniques are followed in

all the units of Parle.

This shows that Parle has satisfied their employees as well as the customers. Customers

come to know about the techniques of TQM and Quality Management being followed. And their

confidence in the product increases even more as the biscuits of Parle which they are consuming

are of Quality and nutritional value.

RURAL MARKETING

ARTICLES

Parle-G is the world leader in biscuit sales

TIMES NEWS NETWORK [MONDAY, SEPTEMBER 15, 2003 12:26:36 AM]

NEW DELHI: In 1929 when Indians were munching crispy imported biscuits shipped in by the

British, an Indian set up a small factory in the suburbs of Mumbai to make toffees. A decade

later, he started making biscuits without giving a damn to the imported biscuits that were freely

available. And six decades later, one of the factory’s products has emerged as the world’s single

largest brand in any country.

With annual sales volume of 179.9m kg, Prakash Chauhan’s Parle-G is the world beater

in biscuits, followed by Italy’s Mulino Bianco with 110.3m kg and America’s Control Brand at

108.9m kg.

Industry sources said Parle-G sells the most because it is the cheapest biscuit in the

branded category. Most Parle offerings, unlike Britannia, are mass brands in the low and mid-

range price segments. As it has been around for over 60 years, it has a loyal consumer base. And

for most, it is a food supplement rather than an evening snack. “In mid-income households, kids

averse to dal chawal are often given glucose biscuits to make up for the cereals,” said an industry

source. But the industry says that even though Parle-G is the highest selling brand, the per capita

consumption of biscuits in India is still very low. On an average Indians eat 0.48 kg every year,

while Americans eat 4 kg.

RURAL MARKETING

But surprisingly, Indians eat over three times more branded biscuits (490m kg) than the

Chinese (180.5m kg). “Given that both India and China have conventional food habits where

traditional snack items like idli, dosa, dhokla, samosa have a fair share, Indian consumers’

appetite for biscuits is enormous,” says Anmol Sherpa, global services co-coordinator for AC

Neilsen India.

According to him, Americans depend on biscuits as they have very few ready-to-eat food

items for snacks. They spend $6,897m on 1134.6m kg of biscuits every year, outpacing both

India (490m kg valued at $583m) and China (180.5m kg valued at $406.3m).

Besides heritage and price points, distribution is crucial to the success of any consumer

goods brand. Even though Kellog’s launched Chocos at Rs 5/pack, its distribution strategy was

not up to the mark. Parle has 1,500 wholesalers catering to 4,25,000 retail outlets.

Chocos were later taken off the shelves. Biscuits require a mass distribution network and

Kellogs had limited itself to the up market outlets with its premium-priced cereals. Parle over the

years has built a robust distribution network. For the fast moving consumer goods industry, the

packaged biscuit basket has emerged as a winner with all other product lines like soaps,

detergents, hair oil, packaged tea biting the dust. The quick, tea-time snack has zoomed into a Rs

2,500 crore industry clocking 3-4% growth annually.

RURAL MARKETING

Britannia to unleash Tiger on rural markets

Namrata Singh

Mumbai, Feb 10: Britannia Industries Ltd has chalked out ambitious plans to make

`Tiger' the number one brand in the glucose segment of the Rs 2,000-crore branded biscuit

market in India by the year 2001, says company managing director and CEO Sunil Alagh.

Tiger, a mass market brand in the glucose category, has grown to become an over Rs

150-crore brand for Britannia in terms of sales. The current leader in the glucose biscuits

category is Parle Foods' `ParleG' brand with a market share of 55 per cent. Tiger has already

garnered a market share of 20-25 per cent in two years, according to industry estimates.

According to Alagh, a major chunk in market share of Tiger will come from the rural

market where the company is making a substantial investment in increasing the distribution

network. ``Tiger will gain market share to become a leader in two years on the back of certain

rural initiatives being undertaken,'' he said.

Britannia Industries is already on the mission to double its distribution network with a

focus on the rural market. The distribution will increase to eight lakh retail outlets, with the rural

network doubling during this time.

However, Britannia does not intend to ride on the pricing plan to beat the competition.

``We will not cut prices to increase sales. We will rely on the quality factor of our products to

achieve that,'' said Alagh.. Both Tiger and ParleG are priced at Rs 4 for a 100gm pack. Tiger was

launched in July 1997. The brand was extended to Tiger Oro priced at Rs 9. The company has

also introduced value-added variants of the brand priced at a slight price premium.

Britannia leads in the branded biscuits market with a share of around 38 per cent. Parle

has a market share of 30 per cent in the branded market. The glucose category contributes 35 per

cent to the overall biscuit market.

RURAL MARKETING

In the glucose category, however, Parle leads ahead of Britannia. Britannia's strategy with

the launch of Tiger was to target this huge segment which has major unorganized sector

participation. Being a leader in the branded biscuits market, analysts say, that Britannia could not

have ignored the glucose segment.

With a maximum contribution to its sales coming from biscuits, the company has reason

to give priority to this category, say analysts. Biscuits contribute 72 per cent to Britannia's

turnover of Rs 824 crore.

In the overall Rs 4,000-crore biscuits market (including the unorganized market),

Britannia's share stands at around 14 per cent with that of Parle's at around 10 per cent.

RURAL MARKETING

Parle creates a flutter in the Atta market

KALA VIJAYRAGHAVAN

TIMES NEWS NETWORK [SUNDAY, SEPTEMBER 28, 2003 10:23:19 PM ]

At a time when most branded Atta majors are facing survival issues, mass-market biscuits

market Parle Products, has decided to enter the Atta market.

The 60-year old company has launched the Parle G brand of chakki fresh Atta in certain

markets in India . This would mean further competition for industry majors like HLL, ITC,

Pillsbury and others, given Parle G’s brand equity in the foods market and its huge distribution

network. The brand is priced at more or less the same level as the existing market rates. A 2 kg

pack of Parle G Atta is being offered at Rs 35.50 while a Rs 5 kg is being offered at around Rs

90.

Parle officials were unavailable for comment. Analysts feel that that it is logical for Parle

Products to offer a product which is the core of their backward integration. “They have little to

worry about as far as distribution strength or creating a brand presence is concerned. It is

certainly not going to be easy for the other existing FMCG majors in the foods business” said an

analyst.

The recent entry of players like ITC and ConAgra, besides the existing ones like HLL,

Pillsbury and Cargill have intensified competition in a market where margins are wafer-thin and

the only way to profits are volumes.

The Indian Atta market is estimated at around 45 million tones, of which branded Atta is

only 3 lakh tones, or less than 1%. On an average, a 5 kg pack of branded Atta is sold in the

range of around Rs 87-Rs 90.

RURAL MARKETING

“The price fluctuates widely depending on which scheme is being offered by the

company. If a competitor drops prices, all the brands follow suit.

There’s not much choice for these companies since stockiest refuse to push the

uncompetitive brand,” sources said. Regular purchasers of the branded attas are institutional

buyers like hotels, airlines or food caterers.

However, there are local suppliers in all majors markets like Mumbai, Delhi etc who have

a loyal customer’s base. Currently, Parle Products has offerings in the mass and mid segment of

the biscuits market. Parle G biscuits, market sources said, are consumed more as food

supplements rather than a snack.

RURAL MARKETING

CONCLUSION

The detailed study about the Parle products mainly PARLE G, gives out a Success Story

in rural areas. This shows that products even at low prices can earn substantially considerable

profits. The results of the survey also indicate the importance of Parle G in comparison with its

competitors, local and imitation brands. The views of the consumers on the Parle G biscuits also

put light on its vitality.

To sum up in general, the Indian rural market has grown in recent years in size, range and

sophistication. Economic reforms in India have brought about major changes in the whole

market environment.

Successful rural marketing calls for a review of the nature and profile of rural consumers,

designing the rural products to appeal to them, and adopting suitable media as well as

appropriate strategies for communication and distribution.

Economic reforms and changing economic conditions have clearly pointed out that the

rural market is the future market of India. To become successful and contending players calls in

for a review of rural marketing environment, rural consumer, media and strategies to be adopted.

As they say…,

RURAL MARKETING

Bibliography

BOOKS

Rural Marketing: Romeo Mascarenhas.

Marketing Management: S.A.Shrelekar.

Marketing Management: Philip Kotler.

NEWSPAPERS:

The Economic Times

Hindustan Times

Mid Day

The Financial Express

Times News Network

WEBLIOGRAPHY

WWW.Agencyfags.Com

WWW.Oligvy.Com

WWW.Adagency.Com

SEARCH ENGINES

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