Download - Session III- Rural Marketing
SESSION – III
XAVIER INSTITUTE OF MANAGEMENT, BHUBANESWAR
4Ps in Rural Markets
Product
“ Anything that has a value in exchange” Product – price – place – promotion 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
Cont’d
Appropriate Product Strategies
Existing & New Products Product features – service quality – price &
performance relationship Simplicity is key “ Sense & Simplicity” – Phillips Global
Campaign Urban market successes could be rural
market failures Appropriate new product development
processes
CORE BENEFIT
BASIC PRODUCT
EXPECTED PRODUCT
AUGMENTED PRODUCT
POTENTIAL PRODUCT
Product Levels
Cont’d
Product Level Characteristics Example Rural Vs Urban
Core Benefit Fundamental benefit/ services
Entertainment Same
Basic Product Benefit/service into tangibles
Television Set Same
Expected Product
Attributes & conditions buyers normally expect
Digital sound, flat screen
Appearance of differences in expectations
Augmented Product
Exceeding customer expectations
Battery Operated TV
Pleasant surprise for rural customer
Potential Product
Encompassing all augmentations & transformations
Jolly Startek TV Uniquely rural value proposition
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 the needs and wants of potential buyers, the environment and competition.
Concept Testing •Describe or show product concepts and their benefits to potential customers and determine their responses. Identify and drop poor product concepts. Gather useful information from product development and its marketing personnel.
Business Analysis •Assess the product’s potential profitability and suitability for the market-place. Examine the company’s research, development, and production capabilities. Ascertain the requirements and availability of funds for development and commercialisation. Project ROI.
Product Development
•Determine technical and economic feasibility to produce the product. Convert the product idea into a prototype. Develop and test various marketing mix elements.
Test Marketing •Conduct market testing. Determine target customers’ Reactions. Measure its sales performance. Identify Weaknesses in product or marketing mix.
Commercialisation •Make necessary cash outlay for production facilities. Produce and market the product in the target market and effectively communicate its benefits.
FMCG Consumption Trends
Products Urban( 1000 HH) Rural ( 1000 HH) Toilet Soap 998 992
Washing Cake 980 950Cooking Oil 968 952
Hair Oil/ Cream 897 787 Tea 876 758
Toothpaste 822 449Washing Powder 819 576
Electric Bulb 723 394Shampoo 663 352Biscuits 579 314
Health Beverages 324 67Source: National Council for Applied Economic Research, 2002
Consumption Ranking
Rank Rural Product Urban Product Rural HH Consumption
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 Retail Consumer Panel, 2001
Rural Durable Usage Trends
NCAER has classified durables into three categories Group One( <Rs. 1000)Group Two( Rs.1000- 6000)Group Three( >6000) In group one the growth is as high as 75 percent Electrical goods show the highest urban- rural disparity,
why ?Television( B & W) 195/1000HH in rural Vs 490/1000HH in
urban Colour TVs 48/1000 HH in rural Vs 304/1000HH in urban
Packaging
Associated with affordability - Convenience - Consumer recognition & product protection
Packaging material, size, convenience and aesthetics
Example: Chik Sampoo
Corporate Responses to Fakes
Look-alikes- Spell-alikes & Duplicates
Prices range from MRP to 60 % of MRP
Margins range from 60 % to 300 %
Legal action – awareness programmes – New Package Development
Fakes: Some Examples
Cont’d
Pricing
Issues in Pricing
Internal & external factors Selecting pricing methods Pricing adaptations Low price points – Simple packaging – utility
around packaging material Highlighting value
Price Adaptations ( Indicative)
Product sharing services, Example: Tractors Product Bundle pricing, Example: HUL
Operation Bharat Free gifts – may sometimes not work in rural
areasSpecial event pricing- Hero Honda Rs. 500
campaign
Colgate- Cibaca
Place- Rural Distribution Challenges
Large number of small markets Dispersed population and trade Poor connectivity Low availability of suitable dealers Inadequate banking/ credit facilities Poor product display and visibility Poor communication of offers and schemes
Levels of Distribution
LevelLevel Partner Partner Location Location
1 Company Depot/ C & FA
National/ State level
2 Distributor/ Van Operator/ Super Stockist/ Rural
Distributor
District level
3 Sub Distributor/ retail Stockist/ sub
stockist/star seller
Tehsil HQ, towns and large villages
4 Wholesaler Feeder towns, large villages, haats
5 Retailer Villages, haats
Distribution Adaption( Indicative)
Hub and Spoke Model, Example: Coca Cola Use of Affinity groups, Example: Project
Shakti Haat Activation, Example: Colgate Syndicated distribution, Example: Cavin Care
& Amrutanjan Use of marketing co-operatives, Example:
Warna Bazaar in Rural Areas Mobile traders, Example: FMCG companies
Promotion- Adaptations for Rural Markets
Conventional Non- Conventional Personalised
Television Haat and Mela Direct mailer
Radio Folk Media( puppet and magic show)
POS (demonstration, leaflet)
Press Video Van Word of mouth
Cinema Mandi Interpersonal communication
Outdoor: Wall Painting, Hoarding
Animator
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 serviced3. Sunday markets are most popular4. 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
Types of Promotions
Advertising
Sales promotions – coupons, contests, demonstrations and sampling, Example: Tata Shaktee Haat Hungama
Direct marketing, Example: Videocon
Publicity, Example: Project Shakti and AP Online
Using a direct selling through a sales force, Example: Swasthya Chetna for Lifebouy
Cont’d
Push strategy – sales force and trade promotion
Pull strategy – advertising and consumer promotion
Close of Session
Thank You