Transcript of Session iii rural marketing
- 1. SESSION III XAVIER INSTITUTE OF MANAGEMENT, BHUBANESWAR 4Ps
in Rural Markets
- 2. Product
- Anything that has a value in exchange
- Product price place promotion
- Challenges Availability, affordability, acceptability &
awareness
Source: The Rural Marketing Book- Kashyap. P & Raut. S
Marketing Tools Marketing Challenge Product Acceptability Price
Affordability Place Availability Promotion Awareness
- 3. Contd
- 4. Appropriate Product Strategies
- Product features service quality price & performance
relationship
- Sense & Simplicity Phillips Global Campaign
- Urban market successes could be rural market failures
- Appropriate new product development processes
- 5. CORE BENEFIT BASIC PRODUCT EXPECTED PRODUCT AUGMENTED
PRODUCT POTENTIAL PRODUCT Product Levels
- 6. Contd 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
- 7. 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 products potential profitability and suitability for
the market-place. Examine the companys 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.
- 8. 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 723 394 Shampoo 663 352 Biscuits 579
314 Health Beverages 324 67 Source: National Council for Applied
Economic Research, 2002
- 9. 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
- 10. Rural Durable Usage Trends
- NCAER has classified durables into three categories
- Group Two( Rs.1000- 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
- 11. Packaging
- Associated with affordability - Convenience - Consumer
recognition & product protection
- Packaging material, size, convenience and aesthetics
- 12. 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
- 13. Fakes: Some Examples
- 14. Contd
- 15. Pricing
- 16. Issues in Pricing
- Internal & external factors
- Selecting pricing methods
- Low price points Simple packaging utility around packaging
material
- 17. Price Adaptations ( Indicative)
- Product sharing services, Example: Tractors
- Product Bundle pricing, Example: HUL Operation Bharat
- Free gifts may sometimes not work in rural areas
- Special event pricing- Hero Honda Rs. 500 campaign
- 18. Colgate- Cibaca
- 19. Place- Rural Distribution Challenges
- Large number of small markets
- Dispersed population and trade
- Low availability of suitable dealers
- Inadequate banking/ credit facilities
- Poor product display and visibility
- Poor communication of offers and schemes
- 20. Levels of Distribution Level Partner 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
- 21. 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
- 22. 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
- 23. Melas & Haats Melas Haat
- Companies can concentrate on the top 100 melas
- Pushkar Mela in Rajasthan
- Organised by the state veterinary department
- Product sales, promotion, demonstration and database
generation
- Cultural activities and rural sports
- Periodic markets located in larger villages(> 40,000)
- 10 50 villages are serviced
- Sunday markets are most popular
- Average number of outlets is 315 and average daily sales is
about Rs 2 lakhs
- Traders participate in at least 4 haats
- 81 percent of the visitors are repeat customers
- 24. Types of Promotions
- 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
- 25. Contd
- Push strategy sales force and trade promotion
- Pull strategy advertising and consumer promotion
- 26. Close of Session