rural marketing stratgey 2

8/8/2019 Rural Marketing Stratgey 2

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4Ps in Rural Markets

RURAL MARKETING BY JYOTI MARATHE


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Product

y Anything that has a value in exchange

y Product price place promotion

y Challenges Availability, affordability, acceptability

& awareness

Marketing Tools Marketing Challenge

Product Acceptability

Price Affordability

Place Availability

Promotion Awareness

Source: The Rural Marketing Book- Kashyap. P & Raut. S



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Contd



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Appropriate Product Strategies

y Existing & New Products

y Product features service quality price &performance relationship

y Simplicity is key

y Sense & Simplicity Phillips Global Campaign

y Urban market successes could be rural marketfailures

y Appropriate new product development processes



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CORE BENEFIT

BASIC PRODUCT

EXPECTED PRODUCT

AUGMENTED PRODUCT

POTENTIAL PRODUCT

Product Levels



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Contd

Product Level Characteristics Example Rural Vs Urban

Core Benefit Fundamentalbenefit/ services

Entertainment Same

Basic Product Benefit/service

into tangibles

Television Set Same

Expected Product Attributes &conditions buyersnormally expect

Digital sound, flatscreen

Appearance ofdifferences inexpectations

AugmentedProduct

Exceedingcustomer

expectations

Battery OperatedTV

Pleasant surprisefor rural customer

Potential Product Encompassing allaugmentations &transformations

Jolly Startek TV Uniquely ruralvalue proposition



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Product Development Stages

Stage Marketing Activities

Idea Generation Searching for new product ideas

Idea Screening Select the most promising ideas and drop those with only limited potential. Study theneeds and wants of potential buyers, the environment and competition.

Concept Testing Describe or show product concepts and their benefits to potential customers anddetermine their responses. Identify and drop poor product concepts. Gather usefulinformation from product development and its marketing personnel.

Business Analysis Assess the products potential profitability and suitability for the market-place. Examinethe companys research, development, and production capabilities. Ascertain therequirements and availability of funds for development and commercialisation. ProjectROI.

Product Development Determine technical and economic feasibility to produce the product. Convert the productidea into a prototype. Develop and test various marketing mix elements.

Test Marketing Conduct market testing. Determine target customers Reactions. Measure its salesperformance. Identify Weaknesses in product or marketing mix.

Commercialisation Make necessary cash outlay for production facilities. Produce and market the product inthe target market and effectively communicate its benefits.



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FMCG Consumption Trends

Products Urban( 1000 HH) Rural ( 1000 HH)

Toilet Soap 998 992

Washing Cake 980 950

Cooking Oil 968 952

Hair Oil/ Cream 897 787

Tea 876 758

Toothpaste 822 449

Washing Powder 819 576

Electric Bulb 723 394Shampoo 663 352

Biscuits 579 314

Health Beverages 324 67

Source: National Council for Applied Economic Research, 2002



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Consumption Ranking

Rank Rural Product Urban Product Rural HHConsumption

grams / month

1 Toilet Soap Toilet Soap 268

2 Washing Powder Biscuits 950

3 Packaged Tea Washing Powder 268

4 Biscuits Packaged Tea 302

5 Detergent Cake Detergent Cake 893

Source: A.C Nielsen Retail Audit, MAT, July -2004 & ORG- MARG RetailConsumer Panel, 2001



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Rural Durable Usage Trends

y NCAER has classified durables into three categories

y Group One( 6000)

y In group one the growth is as high as 75 percent

y Electrical goods show the highest urban- rural disparity, why ?

y Television( B & W) 195/1000HH in rural Vs 490/1000HH in

urban

y Colour TVs 48/1000 HH in rural Vs 304/1000HH in urban



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Packaging

yAssociated with affordability - Convenience -

Consumer recognition & product protection

y Packaging material, size, convenience and

aesthetics

y

Example: Chik Sampoo



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Corporate Responses to Fakes

y Look-alikes- Spell-alikes & Duplicates

y Prices range from MRP to 60 % of MRP

y Margins range from 60 % to 300 %

y Legal action awareness programmes New

Package Development



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Fakes: Some Examples



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Contd



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Pricing



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Issues in Pricing

y Internal & external factors

y Selecting pricing methods

y Pricing adaptations

y Low price points Simple packaging utility aroundpackaging material

y Highlighting value



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Price Adaptations ( Indicative)

y Product sharing services, Example: Tractors

y Product Bundle pricing, Example: HUL OperationBharat

y Free gifts may sometimes not work in rural areasy Special event pricing- Hero Honda Rs. 500 campaign



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Colgate- Cibaca



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Place- Rural Distribution Challenges

y Large number of small markets

y Dispersed population and trade

y Poor connectivity

y Low availability of suitable dealers

y Inadequate banking/ credit facilities

y Poor product display and visibility

y Poor communication of offers and schemes



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Levels of Distribution

LevelLevel PartnerPartner LocationLocation

1 Company Depot/ C & FA National/ State level

2 Distributor/ VanOperator/ Super Stockist/

Rural Distributor

District level

3 Sub Distributor/ retailStockist/ sub stockist/star

seller

Tehsil HQ, towns andlarge villages

4 Wholesaler Feeder towns, largevillages, haats

5 Retailer Villages, haats



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Distribution Adaption( Indicative)

y Hub and Spoke Model, Example: Coca Cola

y Use of Affinity groups, Example: Project Shakti

y Haat Activation, Example: Colgate

y Syndicated distribution, Example: Cavin Care &Amrutanjan

y Use of marketing co-operatives, Example: WarnaBazaar in Rural Areas

y Mobile traders, Example: FMCG companies



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Promotion- Adaptations for Rural Markets

Conventional Non- Conventional Personalised

Television Haat and Mela Direct mailer

Radio Folk Media( puppet andmagic show)

POS (demonstration, leaflet)

Press Video Van Word of mouth

Cinema Mandi Interpersonal

communication

Outdoor: Wall Painting,Hoarding

Animator



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Melas & Haats

Melas Haat

1. 25,000 melas

2. Companies can concentrate on

the top 100 melas

3. Pushkar Mela in Rajasthan

4. Organised by the state veterinary

department

5. Product sales, promotion,

demonstration and database

generation

6. Cultural activities and rural

sports

1. Periodic markets located in larger

villages(> 40,000)

2. 10 50 villages are serviced

3. Sunday markets are most popular

4. Average number of outlets is 315 and

average daily sales is about Rs 2 lakhs

5. Traders participate in at least 4 haats

6. 81 percent of the visitors are repeat

customers



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Types of Promotions

y Advertising

y Sales promotions coupons, contests, demonstrations

and sampling, Example: Tata Shaktee Haat Hungama

y Direct marketing, Example: Videocon

y Publicity, Example: Project Shakti and AP Online

y Using a direct selling through a sales force, Example:

Swasthya Chetna for Lifebouy



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Contd

y Push strategy sales force and trade promotion

y Pull strategy advertising and consumer

promotion



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Close of Session

Thank You


rural marketing stratgey 2

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