Slide Deck 2

8/2/2019 Slide Deck 2

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Rural Marketing

IPER - Bhopal


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Last Lecture.. RuralMarkets

Untapped Potential

Large Consumer Base (12.4% of worldpopulation)

Low penetration levels

Rising Rural Incomes

Go Rural Mantra for all Corporates. Engine for growth


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Rural Marketing- Challenges

3 DS

Distance (high cost , low penetration)

Diversity Dispersion

Limited Choice

Limited Consumer Insights

Lack of robust tools for Market Sizing

Communication


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Market Research

IMRB

Census of GOI

AC Nielson R.K.SWAMY BBDO Guide to Market

Planning

Covers 515 districts covering all townsand villages.

MPV (Mkt Potential Value)

Per Capita Income


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ITC WDs inMP- 60% Total 19

Districts.


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ITCStockists in

MP- 60%


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Parle Sales onMPV

0

2

4

6

8

10

12

Line Fit Plot

Linear Regression for

MPV

SALES

Regression analysis reveal a perfect fit when Sales is regressedon MPV.19 District account for 60% on MPV and contribute 70% of Parle


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Dist MPVBiscuitRank

Rank WD No.s Stkist No.s Parle Stkist

Indore 86.71 1 1 2 6 10Bhopal 60.9 2 2 5 2 10

Jabalpur 59.13 4 3 3 9 11Gwalior 43.49 3 4 2 4 9

Sagar 38.87 5 2 7 6

Ujjain 38.36 6 2 5 6

Chhindwara 33.95 7 2 10 3

East Nimar 31.69 8 1 5 6

Satna 30.73 9 3 8 3

Dhar 30.56 10 1 22 3

Rewa 30.24 11 1 18 3

Guna 28.29 12 2 5 5

Morena 26.44 5 13 2 5 6

Dewas 26.11 14 1 7 4

West Nimar 25.92 15 1 13 4

Ratlam 25.32 16 1 5 3

Shajapur 24.82 17 0 7 4

Sidhi 24.34 18 2 4 2

Bhind 24.26 19 1 10 3

Total : 690.13 34 152 101

Top 60%Districts :


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Dist MPV Rank WD No.s Stkist No.s Parle StkistBetul 24.13 20 1 14 4

Shahdol 23.6 21 2 9 2

Shivpuri 22.99 22 1 7 5

Chhatarpur 22.82 23 1 5 2Mandsaur 22.3 24 1 5 3

Vidisha 22.07 25 2 4 4

Hoshangabad 21.76 26 3 7 9

Balaghat 21.63 27 1 6 1

Rajgarh 21.57 28 1 3 4

Sehore 19.7 29 1 6 3

Tikamgarh 19.41 30 1 5 3

Damoh 18.87 31 1 2 2Raisen 18.81 32 1 5 5

Narsimhapur 18.15 33 1 5 2

Seoni 17.6 34 1 8 2

Jhabua 17.44 35 0 9 2

Katni 17.26 36 1 2 2Barwani 15.59 37 1 5 4

Neemuch 14.68 38 1 3 1

Datia 12.53 39 1 6 5Panna 12.31 40 1 2 2

Mandla 12.16 41 1 4 1Harda 9.37 42 1 7 3

Sheopur 8.61 43 1 2

Dindori 7.1 44 0 4 1

Umaria 7.01 45 0 2 1

Total : 449.47 27 135 75

Bal 40% Districts :


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n ers an ng e uraConsumer.Triggers of

Purchase Heterogeneous Markets varies intaste, socio-culture, purchasingpower. No fixed definition of a rural

consumer. Influencers-Opinion leader in the

community..village doctor

Economy per capita income,cropping patterns(cashcrops),agriculture productivity

Reli ious Socio- Culture Factors


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n ers an ng e uraConsumer.Triggers of

Purchase Situational Factors poor electricitysupply leads to increase in demandfor batteries.

Mobile usage high due to lack of fixedtelephone lines.

Washing bars more in demand than

washing powder.

Govt. Spending


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Imitations ..Contrabands

Fair & Lovely .. Neha &Lovely.Fame & Lovely

Bata Buta Parachute . Parasudh

Vicks Vikas..Venus


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Measures to CounterImitations

Education of Consumers Role of influences/opinion leaders

(School Teachers, village doctors)

Product Availability Product Usage

Trials

Sampling

Demonstration

E.x. Colgate Tooth Powder, Aashirwad


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Marketing Mix

Product

Not Cheap but VFM

Offer Unique Benefits for Less Philips Flashlights, Electrolux Bijlee

refrigerators(power backup),sachetstoothpaste, hairoil (bullets parachute)

Not just a function of Income ,but usagepattern, socio-economic conditions etc.

Price


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PRICING TECHNIQUES

1. Premium Pricing - Use a high price where there is a uniquenessabout the product or service. Eg. Concorde flights.

2. Penetration Pricing - Price charged for products is set artificiallylow in order to gain market share. Eg. France Telecom

3. Economy Pricing - This is a no frills low price. Eg. atsupermarkets

4. Price Skimming - Charge a high price because of a temporarycompetitive advantage. Eg. digital watches in 1970s

5. Psychological Pricing - Consumer needs to respond on an

emotional, rather than rational basis. Eg price point of Rs.99 andnot Rs.100.


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PRICING TECHNIQUES (contd.)

7. Optional Product Pricing - Increase the amount customers spendonce they start to buy. Eg. Extra charges for reserving a row ofseats next to each other.

8. Captive Product Pricing - Where products have complements,

companies will charge a premium price where the consumer iscaptured. Eg. Razor blade strategy

9. Product Bundle Pricing - Here sellers combine several productsin the same package. Eg. Videos and CDs

10. Promotional Pricing - Pricing to promote a product is a verycommon application. Eg. Buy One Get One Free.

11.Geographical Pricing - Geographical pricing is evident where


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PRICING STRATEGIES FOR RURAL INDIA

Consumer Categorization

Category

Annual

Income Lifestyle Pricing StrategyQuality

conscious

over

150001 Very rich

Perceived value

pricing

Value

conscious

45001-

150000

Consuming

class

Value pricing,Psychological

pricing

Priceconscious

22001-45000 Climbers

Small unit low

pricing,

Promotionalpricing


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PRICING STRATEGIES FOR RURAL INDIA

Low price points - Pricing the product at a low priceattracts the rural consumer to try the product-HLLsells Pepsodent for Rs. 4 /sachet, BP introduced 5kggas cylinders ensuring low refill cost and low initialdeposit

Avoid sophisticated packaging - the production cost

is reduced by focusing on simple packaging andincreased utility Eg. LG provides TV with lesserchannels and without the golden eye technology,

thus making the TV much cheaper

Highlight value not price - by giving refill packaging,marketers can add value pricing to the product. Eg.

Bournvita available in refill packs.


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Credit facility - credit period varies between 7-30days in case of fast moving consumer goods thusmaking it easy & attractive for rural consumers.

Discounts - discounts are very widely accepted inrural and urban markets but in rural marketsdiscounts & freebies become the sole motivation forpurchase. Some types of discounts could be cashdiscount, quantity discount, off season discount,

promotional schemes, free items.

Value engineering - this helps in loweringproduction cost and enhancing value. Eg. Nirma is

affordable, of medium quality and has a wide anddeep distribution reach.


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SUCCESS STORIES

Some examples of a successful adoption of an appropriate pricingstrategy:

Videocon was one of the first companies to enter the ruralmarket with a plethora of products in the home appliances. Itattacks market leaders by introducing no frill products priced

much lower than competition

LG launched Sampoorna priced at 3000/- to

brid e the a between local black and white TVs


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SUCCESS STORIES

v Cavin Kare was the company responsible for smallsachet revolution in the country which took rural

FMCG sales to a different height. Attractive price

points such as Rs. 1, 2, 3 were decided to entice

customers with sporadic incomes

v Operation Bharat-HLL launched a combo pack comprising aClinic shampoo bottle, a tube each of Pepsodent, Fair & lovelycream and Ponds Dream-flower talc in different sizes and

combinations for the rural market to increase consumerawareness and change usage habits.


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INNOVATIVE PRICING TECHNIQUE

Coinage Pricing for Pre-mixedTea/Coffee pouches

Pre-mixed tea and coffee priced at Rs. 1/- or Rs. 2/-(particularly enforcing the use of coins) in ready to usesachets can be a market for people who go away fromhome for a days work or for consumers who do nothave immediate facilities or skill to prepare tea/coffeethe traditional way.


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That all for Today Folks.

Next lecture we will explore Product ,Place and Promotion aspects ofMarketing Mix.

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