Download Session III- Rural Marketing

4Ps in Rural Markets
SESSION – III
XAVIER INSTITUTE OF MANAGEMENT,
BHUBANESWAR
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
Product Levels
CORE BENEFIT
BASIC PRODUCT
EXPECTED PRODUCT
AUGMENTED PRODUCT
POTENTIAL PRODUCT
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
Idea Generation
Idea Screening
Concept Testing
Business Analysis
Product Development
Test Marketing
Commercialisation
Marketing Activities
•Searching
for new product ideas
•Select
the most promising ideas and drop those with only limited potential. Study the
needs and wants of potential buyers, the environment and competition.
•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.
•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.
•Determine technical and
economic feasibility to produce the product. Convert the product
idea into a prototype. Develop and test various marketing mix elements.
•Conduct
market testing. Determine target customers’ Reactions. Measure its sales
performance. Identify Weaknesses in product or marketing mix.
•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
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
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 areas
 Special 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
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
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
1. 25,000 melas
2. Companies can concentrate on
the top 100 melas
Haat
1. Periodic markets located in larger
villages(> 40,000)
2. 10 – 50 villages are serviced
3. Pushkar Mela in Rajasthan
3. Sunday markets are most popular
4. Organised by the state veterinary
4. Average number of outlets is 315 and
department
5. Product sales, promotion,
demonstration and database
generation
6. Cultural activities and rural
sports
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