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Rural India has 75 percent of the population living in 5,72,000 villages speaking 33 languages. They have 53% percent share of the total market and consumer durables by 59% percent. National Samples Survey (NSS) data reveals that 75 percent of the expenditure on manufactured goods is accounted by rural India.
Approximate size of rural market is Rs.123000crores Rural India has seen a remarkable growth due to rise in agricultural prices Less exposure to various brands hence less competitive. Rise in expenditure is 9% since 2002 Govt. schemes like Bharat Nirman, NAREGA and loan waiver has made rural market approachable.
Low literacy rate Lack of infrastructure facilities like power, roads etc. Fake product in the market No common language across areas Sparsely located population Low earning per household and low penetration of rural media Traditional outlook of rural consumers which makes them resist change.
Rural market is fresh and new. A new brand can easily enter as competition is low Rural indias resistance to change gives established brand a leverage. Govt spending is increased as follows41 million Kisan credit cards issued providing the cumulitive credit of Rs 977 billion 90% villages are electrified Schemes like NAREGA and loan waiver have pumped liquidity.
An ORG -MARG retail outlet found that for every 100 strips of genuine Vicks Action 500, there are 54 counterfeit strips sold in the market. AC Nielsen indicating that the FMCG segment in the country alone incurs a loss of about Rs 1,800 crore due to counterfeit products. P&G's Health care division sales were impacted upto 15 per cent.
Classification of products.
Manuf. Address
Price Margins Quality
Original
M.R.P. 200-300% Very Poor
Incomplete
40% low 100-150% Poor
Own Name
10-15% low 60-70% Reasonable
Intentions of retailer
Consumers Identity Offer
To cheat
Unaware None None
To mislead
Unaware Only literate Discounts
To freeload
Want cheeper products Majority Schemes
Sunsilk
Tata Salt Pepsi
Sumsilk
Taja Salt(spell alike) Tepsi
Ponds Magic
Vicco Fare and Lovely
Casino(look alike)
Viggo Friends and lovely
Parle G
Parla G
Poor distribution channel. Lack of communication-Media Dark Area. Illiteracy among rural consumers. Influence and trust vested in opinion leader(retailer). Lack of brand awareness. Establishing a brand war of margin.
Counter Strategies
4ps strategies.
Price - Without compromising on quality, the leading chocolate companies can reduce their size to match the rural demand. Promotion -A portion of the ad budget can be allocated for retailers' margin. Product: Without compromising on quality, the leading chocolate companies can reduce their size to match the rural demand. Physical Distribution: Sales professionals of the local region who have familiarity in the local (regional) language can be appointed. Keep a check.
companies.
Brand Protection Committee under the aegis of the Federation of Indian Chambers of Commerce and Industry (FICCI). To increase information on the subject a Web site, fake-busters.com was also launched. In the case of Coca Cola they have deployed 48 Consumer Response Co-ordinators and Route Salesmen. They are going in for upgraded packaging so that manufacturers of counterfeits find it difficult to replicate their products. Ex
Continue..
Fill demand supply gap-Increase your reach. Increase effective communication packaging in simple regional language along with English. Create brand loyalty and awareness programmes.
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