rural marketing original

8/14/2019 Rural Marketing Original

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RURAL MARKETING



“The future lies with those

companies who see the poor astheir customers”

~C.K.Prahalad

The Potential of the UnreachedThe Potential of the Unreached



What makes Rural markets attractiveWhat makes Rural markets attractive

•Substantial increase in purchasing power of rural

communities.

•Due to the effect of Green revolution, rural areas

are consuming a large quantity of industrial and

urban manufactured products.

•Rural marketing initiatives are driving

manufactured or processed inputs or services torural producers or consumers.




RuralMarkets

FMCGRs 65000 crs

Durables

Rs 5000 crs

Agri-inputs

Rs 45000 crs

2/4 wheelersRs 8000 crs

Estimated annual size of the rural market

742 million

people




Rural

Markets

6.6 million

households have

formal savings

investments

2005-06 LIC

sold 55% policiesin rural India

41 million

Kisan Credit Cards

issued

42 million households

use banking service6 lac villages

with Public Tel.



What makes Rural marketsWhat makes Rural markets

attractiveattractive

– Of 20 million Rediffmail signups, 60 % are

from small towns. Similarly the 1,00,000

who have transacted on Rediff onlineshopping site, 50 per cent are from small

towns



Rural marketing

• Two thirds of the countries live in rural

areas and almost half of the National

Income is generated here.



• Rural market accounts for 56 % of the

total FMCG demand, the tobacco major is

moving fast to add 31,000 villages to its

market – and all by leveraging its web of

6,000 e- choupals



CHARACTERISTICS OF RURAL CONSUMER

GROUP

LOCATION PATTERN:-

SCATTERED MARKET

•Rural market is a scattered market. Rural population is scattered

across 5,70,000 villages.

•Unlike urban demand, which is highly concentrator rural demand is

scattered over a larger area.

SOCIO-ECONOMIC POSITION:-

Rural consumers continue to be marked by low purchasing power/low

per capita income. They continue to be tradition based community.

•60% of rural income comes from agriculture.



CHARACTERISTICS……CONTD.

• CULTURALLY A DIVERSE AND HETEROGENOUS MARKET

Rural markets are diverse in terms of religious, social, cultural andlinguistic factors.

Heterogeneity is the no.1 hallmark of the rural market-

5,70,000 villages,

half dozen religions,

33 languages,

1,650 dialects and diverse sub-cultures characterize the market.

LIFESTYLE Conservative and tradition bound lifestyle.

Lifestyle undergoes major change which may be contributed to severalfactors:

1. Growth in income and change in income distribution.2. Growth in education

3. Enhanced media reach.

4. Growing interaction with urban communities.

5. Marketer’s efforts to reach out the rural market.



RURAL DEMAND•

STEADY GROWTH

Welcome change in the composition of rural demand.

Many new products have entered the consumption basket of the rural consumer and relative shares of different categories

of products have recorded welcome change.

Several products already well established in rural market.

Textiles, bath soaps, medicines and hygiene products, fans ,TVs, packaged tea etc.

In many products rural consumption account for larger sharethan urban.

In washing soaps, rural share is over 60%, in bath soaps,more than 50% etc..



• In several products rural market hasovertaken the urban in growth rate

A survey by National Council of Applied

Economic Research (NCAER) shows thatrural market is growing faster than urbanmarket in several products.

These include packaged tea, analgesics,

detergent powder, washing soap anddetergent cake.



Marketing mix for rural markets• Product strategy - Induce rural customers to buy and try the new

product

i.e trial by low unit packs , Sachets(HLL),Cavin Care -Chik, P&G-Vicks Vaporub,Godrej with 6ml sachet , HUl – 75gm lifebuoy & 100gm Wheel Detergent , One

Rasna schet can make six glasses

Social & Cultural variations – ITC sells its Gold Flake Cigarette pack in yellow cover in

South India : Purity & same brand in Golden color in North India .

Visual Patten on Packing : Red soap signifies Lifebuoy soap• Combi- Packs – Colgate offers toothbrush with small toothpaste

• Family Packs-Britannia , Priyagold

Product that are fairing well are Parle G , Lifebuoy ,Lux ,Nirma ,and Ghari ,Amul , Coca

Cola ,Colgate , Eveready batteries , LG Electronics ,Philips , BSNL , Life Insurance

Corporation , Cavin care , Britannia , Hero HondaSunfeast and Ashirwad which today contribute to 60% of ITC’s FMCG’s business find a

place in all its rural shop shelves



Marketing mix for rural markets• Specifically Designed Product – Rajdoot , Eveready brass torch- Jeevan

sathi , BATA introduced PVC shoes• Sturdy Product- HLL – Lesancy (big soap)

• Brand Names- Pilli tikki forn washing soaps , Logos inserted so thatconsumers recall the product, Britannia launched economy Glucosebiscuits –Tiger

• Utility oriented products- Philips introduced ‘Bahadur’ in rural area – a 2band trasistor which covered entertainment channels as well

• Brand names – Britannia ‘s Glucose biscuits as Tiger with redbackground symbolizing energy.

Samsung’s CTV’s for rural markets in the 14” and 20” categories ,semi-automatic machine below Rs 10,000/-

Salora International , LG Electronics launched Sampoorana , India’s firstTV with Devnagri script on screen display

LG’s Golden eye and Onida’s KY Thunder



Marketing mix for rural markets

• Pricing Strategy- Low cost products i.e Clinic-plus in50 paisa, one rupee , two rupee pack, Colgate at Rs. 50 /-

HLL derives 50% of its revenue from rural areas,

sells Lux shampoo in a four militer sachet priced at 50Paisa and six-milliliter sachet priced at one rupee ,

• Quality products – Marico - Indian Edible Oil Company

• Substitute costly parts with cheaper parts and materials –(Milk proteins with Soya protein) Britannia-Probisk

• No steady monthly income –LG electricals• Seconds sale – Akai in India- sales increase



Marketing mix for rural markets• Place or Distribution- Co-operative societies Utilization of petrol pumps Feeder markets / Mandi towns Delivery vans- HLL( Operation Harvest ) fleet of vans regularly visiting

remote village and ITC Project Shakti is HLL’s rural initiative which is an attempt to use self help

groups as an alternate distribution channelSamsung- Van displays all the products , the company has tied up with

local distributors to showcase the Samsung range in local melas andfairs



Marketing mix for rural markets

• Promotion – Television

Cinema- 36% of the population view cinema

radio

Print Media – 9% read newspaper , 5%publications reach rural area

Hoardings , Posters , Banners- in Melas and puppet

shows e.g. HLL,ITC,Godrej,Nirma ,P&G are major FMCG players who book their stalls

Gift Schemes etc,

Unilever – Video Vans



Arvind Mills

• When Arvind Mills discovered even the cheapest brandcould not make dent in the rural markets .

• It introduced ready-to-stitch Ruf&Tuf Jeans with price aslow as 195 a Piece .

• The Jeans were distributed using local retail outlets invillages with population up to 5,000 .

• Tailors were trained and given Machine accessoriesneeded to stitch heavy denim

• In about year and a half Arvind sold 50 Lakh Rug & Tuf kits because it had beaten the lowest-priced organizedsector jeans around Rs. 300 at that time



Coca Cola

• When Coca –Cola re-entered the Indian Marketin the mid-1990’s , it took the high road tomarketing and got nowhere.

• More recently it re-invented itself and its TV

commercial showed Bollywood star Amir Khanfirst as a Punjabi Farmer and also in other rusticroles in different parts of India .

• Coca –Cola available at Rs. 5 a bottle

• Result was within months Coke was able toreach out to rural audiences in large numbers allover India .



Cavin Care

• Cavin Care ( Chik shampoo fame ) found thatmany rural consumers are using bathing soap

for washing hair since it was practice followed

for years

• The rural consumer was aware that shampoocleaned hair better , but at Rs. 2 a sachet it was

still beyond reach .

• Cavin Care therefore launched Chik in sachetprices very cheap .

• Today it is a huge success in rural markets .



RURAL MARKETING IS

DEVELOPMENTAL MARKETING

• FACINATING AND CHALLENGING

Challenges

• Lack of understanding of rural customers

and data

• Poor infrastructure



CHANNEL MANAGEMENT

• Non availability of dealers.• Inadequate banking and credit facilities

• The Village shop is the key to Rural Distribution.



Sales Force Management

Rural Marketing Calls for Some SpecialTraits on the Part of Salesmen.

• Willingness to be located in rural areas.

• Cultural congruence.

• Attitude factors.

• Knowledge of local language.

• Ability to handle several product lines

• Creativity.



India- Rural Market Opportunities

Opportunities• The rural market in India constitutes 740+

million people, and is by far the largest potentialmarket in the world

• Rural annual household income averagesRs.56,630 with high savings rates

• Changing rural aspirations in consumptionpatterns and lifestyle unfolds opportunities for rural marketing

• Literacy levels are rising steadily

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