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8/8/2019 Rural Marketing Stratgey 2
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4Ps in Rural Markets
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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 BY JYOTI MARATHE
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