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Rural marketing is a process of developing, pricing, promoting, distributing ruralspecific goods and services leading to exchange between urban and rural markets which specifies consumer demand and also achieves organizational objectives. Rural marketing involves a two-way marketing process, however, the prevailing flow of goods and services from rural to rural areas cannot be undervalued. Since demands of urban and rural folks are different, companies should manufacture products to suit the rural demand rather than dump urban products on rural consumers. The process should be able to straddle the attitudinal and socio-economic disparity between the urban and rural consumers. Definitions:According to National Commission on Agriculture Rural marketing is a process which starts with a decision to produce a salable farm commodity and it involves all the aspects of market system, and includes pre and post harvest operations i.e. assembling, grading, storage, transportation and distribution. Rural Marketing is defined as any marketing activity in which one dominant participant is from a rural area. This implies that rural marketing consists of marketing of inputs (products or services) to the rural as well as marketing of outputs from the rural markets to other geographical areas. Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments. It is an integrated process through which companies build strong customer relationships and create value for their customers and for themselves. The concept of rural marketing in Indian economy has always played an influential role in the lives of people. In India, leaving out a few metropolitan cities, all the districts and industrial townships are connected with rural markets. The rural market in India brings in bigger revenues in the country, as the rural regions comprise of the maximum consumers in this country. Rural marketing in Indian economy can be classified under two broad categories. These are:
The rural market in India is much larger than the urban market in terms of population and no of households. The rural market consists of more than 100 million households with a total population of about 740 million. In spite of being larger in size, rural areas are characterized by low per capita income, low literacy, average agricultural productivity, and low level of industrialization. These characteristics of rural India have resulted in limited capacity for consumption of goods and services when compared to 2
The potential for marketing of goods and services in rural areas depends heavily on agriculture, since it is the main occupation here. The market for agricultural inputs like fertilizers, pesticides and insecticides, tractors, lift irrigation equipments, hybrid and highyielding seeds has been expanding over the years in rural areas as Indian farming is fast becoming market-oriented, as opposed to subsistence farming earlier. Indian farmers have been receptive to new technology, which has helped in improving their standard of living. Barring those organizations manufacturing agricultural inputs, the rural market has remained a dark area for many companies manufacturing consumables and consumer durables. Only a few major ones like HLL, the erstwhile Lipton and Brooke Bond, and P & G have been aware of the potential that existed in the rural market and have been operating here for a long time.
Given the impressive development that has taken place in the rural areas under the five year plans and other special programme, the rural market today offers vast untapped potential. Development programms in the field of agricultural and allied activities, health, education, communications, rural electrification and others have improved the levels of general awareness in the rural areas and considerably changed the lifestyles of the rural populace. Some market research agencies forecast that rural demand will outstrip the urban demand in the near future. This has probably already happened in states like Haryana and Punjab.
To successfully exploit the potential offered by the rural market, there is a need to understand the market not just in terms of households and population, but in terms of their occupation pattern, income generation, marketing arrangements for agricultural produce, the process of rural and cottage industrialization, communication facilities, infrastructure development, rural buyer behavior, attitude and belief of rural people and their changing values and aspirations.
RURAL MARKETING IN INDIA Some Unknown Facts About Rural Market in India
1. 742 million people 2. Estimated annual size of the rural market a. FMCG Rs 65,000 million b. Durables Rs 5,000 million c. Agri-inputs (incl. tractors) Rs 45,000 million d. 2 / 4 wheelers Rs 8,000 million e. In 2001-02, LIC sold 55 % of its policies in rural India. f. Of two million BSNL mobile connections, 50% in small towns/villages. g. Of the six lakh villages, 5.22 lakh have a Village Public Telephone (VPT) h. 41 million Kisan Credit Cards issued (against 22 million credit-plus-debit cards in urban) with cumulative credit of Rs 977 billion resulting in
tremendous liquidity. i. Of 20 million Rediffmail signups, 60 % are from small towns. 50% transactions from these towns on Rediff online shopping site 3. 42 million rural HHs availing banking services in comparison to 27 million urban HHs. 4. Investment in formal savings instruments: 6.6 million HHs in rural and 6.7 million in urban.
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monetized. 4 5 Infrastructure Attitude to Modernization Poor and Weak. Tradition bound. Abundant and Strong. Ready for adaptation and change. 6 7 Family Structure Joint Nuclear High
1) Demand pattern As the main occupation in the rural areas for maximum population is agriculture and allied activities the work is seasonal in nature the income generation is also seasonal in nature and thus the demand for consumption goods will also be seasonal in nature and thus the marketers will have to promote their goods keeping this in their mind whereas in the urban areas like cities and metropolitans people earn money during the whole year and also spend it in all the seasons. 2) Spread The urban population is concentrated in small areas as compared to rural areas where there is a huge gap between the two houses and also two different villages which can create huge difficulties for the marketers and their distribution networks. Many a times it may not be wise to sell their goods in each and every village as the transportation cost only can negate all the profit margins of the company. 3) Literacy level The literacy levels in the rural areas is very low as compared to the urban areas and thus before selling their goods in the rural areas the marketers have to make sure that the consumers are properly informed about the use, harms and other different facts of using the product which they may be using for the first time. The marketers should also educate the people in the rural areas thus they can be used for doing some positive word of mouth publicity for the company in future. 4) Sources of supply There are not adequate sources of supply available in rural areas for the companies to act upon their customers demand as soon as possible and thus not satisfying them as opposed to in the urban areas where all the sources are adequate and come in action as soon as the order is placed and is completed as soon as possible.
1) Underdeveloped people and underdeveloped market. The impact of technology has not been felt uniformly throughout the country. In some districts like Punjab and Haryana, a rural consumer may be comparable to his urban counterpart, but there still are large areas and groups of people who have remained untouched by technological breakthroughs. Even today, about 75 districts in the country are drought-prone and no new technology worth the name has percolated to drought proof these districts and increase the standard of living of the people here. Thus, rural markets, by and large, are characterized by underdeveloped people and consequently underdeveloped market. A vast majority of the rural people is traditions bound, fatalistic, are mired in age-old customs, traditions, habits, taboos and practices, and are not financially stable.
2) Lack of proper physical communication facilities Nearly half of the villages in the country do not have all-weather roads. Just getting to these villages physically is highly taxing. Even today, many villages in eastern parts of the country are inaccessible during the monsoons. Hence, the distribution efforts put in by a manufacturer prove expensive and sometimes ineffective. The Pradhan Mantri Gram Sadak Yojana promises to connect all the villages with 500 persons and above in plains and 250 and above in hill areas by all-weather roads by 2007. This should considerably ease the distribution logistics for marketers.
3) Media for rural communication Amongst the mass media, radio was considered to be a potential medium for communication to the rural people in the late 50s or early 60s. The advent and expansion of television network, appears to be offering another potential medium for easy communication with rural masses. Another mass media is cinema. It has also been
4) Vastness and uneven spread The no of villages in India is more than 5 lakh. Again, the villages are not uniform in size. Nearly 67 % of the villages have only a population of less than 500 persons, which accounts for 26 % of the rural population. About half of the rural population live in villages with a population size ranging from 1000 to 5000 persons, such villages being considered as medium sized. Only 18 % of the population lives in villages with populations of 5000 persons and above. Hence, one can only think of tackling about 2 lakh medium and large villages, which can be considered as having adequate potential. This type of distribution of population warrants appropriate distribution and promotion strategies to decide the extent of coverage of rural market.
5) Many languages and dialects Even assuming that media for communication or that the company commissions its own media vans or hires them from professional operators, the next road block is intelligibility of program across a broad spectrum of the rural population. The number of languages and dialects vary widely from state to state, region to region and probably from district to district. Messages have got to be delivered in local languages and dialects. Even though the no of recognized languages is only 16, the no of dialects is estimated to be around 850. Multi-dialect dubbing in AV presentations is a viable solution, but again, cost is a factor.
6) Low per capita incomes Even though about 30 % of the gross domestic product is generated in rural areas, it is shared by 72 % of the population. Hence, per capita incomes are low compared to urban areas. That apart, the distribution of income is highly skewed since the land holding pattern which is the basic asset, is itself skewed. Thus the rural population presents a highly 8
7) Low levels of literacy The literacy rate is low in rural areas as compared to urban areas and leads to the problem of communication for promotion purposes. With low literacy rates, print medium becomes ineffective and to an extent irrelevant in rural areas since its reach is poor. The dependence is more on electronic media- cinema, radio and television. While the access to cinema and radio appears to be fairly easy and common in villages it is not so in case of television. In addition, television advertising is very expensive. As regards mobile advertising there are lots of wear and tear expenses.
8) Seasonal demand The distribution of any product in the rural areas- either agricultural inputs, consumables or durables- should necessarily follow a seasonal pattern. Since 75 % of rural income is generated through agricultural operation which is seasonal, the demand pattern is also seasonal. A typical example is that of fertilizers. The demand for fertilizer is always high during the start of kharif and rabi seasons. The fertilizer manufacturers have evolved a distribution pattern so that seasonal demand can be met. Likewise, the demand for consumables and durables will be during the peak crop harvesting and marketing seasons. This is the time at which the rural people have substantial cash inflows. Hence, the distribution should be fairly intensive during peak crop harvesting and marketing seasons. This arrangement would result in adequate sales realizations. During summer, in places that lack irrigation facilities, demand will be very minimal. Thus the distribution system has to be geared to meet the seasonal pattern of demand. But in spite of all these problems there are a few facts which show the huge opportunities for the companies to foray in the rural market.
Underdeveloped Markets:The number of people below poverty line has not decreased in any appreciable manner. Thus underdeveloped people and consequently underdeveloped market by and large characterize the rural markets. Vast majorities of the rural people are tradition bound, fatalistic and believe in old customs, traditions, habits, taboos and practices. Lack of Proper Physical Communication Facilities:- Nearly fifty percent of the villages in the country do not have all weather roads. Physical communication of these villages is highly expensive. Even today most villages in the eastern parts of the country are inaccessible during the monsoon. Media for Rural Communication:- Among the mass media at some point of time in the late 50's and 60's radio was considered to be a potential medium for communication to the rural people. Another mass media is television and cinemas. Statistics indicate that the rural areas account for hardly 2000 to 3500 mobile theatres, which is far less when compared to the number of villages. Dispersed Market:- Rural areas are scattered and it is next to impossible to ensure the availability of a brand all over the country. Seven Indian states account for 76% of the countrys rural retail outlets, the total number of which is placed at around 3.7 million. Advertising in such a highly heterogeneous market, which is widely spread, is very expensive. 10
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Packaging: Rural customers are usually daily wage earners and they dont have monthly
incomes like the ones in the urban areas have. So the packaging is in smaller units and lesser-priced packs that they can afford given their kind of income streams. Packaging and package sizes are increasingly playing a vital role in the decision making process of the rural buyers. Certain products like detergents and paste are bought in large quantities, whereas shampoos, toilet soaps, eatables are bought in smaller pack sizes. The reasoning behind this is that the products that are common to family members are bought in large pack sizes, whereas individual-use products are preferred in smaller packs. 12
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one of the most cost-effective ways of selling directly to rural consumers. The lack of motor able roads and high distribution costs are not a hindrance any more. Mobile traders score over the conventional wholesale channel on both counts of cost and reach. They travel either on foot or on cycles. That means transportation costs are virtually nonexistent. Besides these traders can target smaller villages, which conventional distribution channels often do not touch? The mobile traders can play a crucial role in buying decision. Most rural women are loath to visit retail outlets. Mobile traders therefore are a smart way of reaching women in their home environment. The women rely on these mobile traders to sell them goods in the security of their home. Rural India is a marketers dream given its tremendous potential and increasing money power. The formula of success for companies entails a complete shift in marketing and advertising strategies.
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Physical Distribution a) Channels Village Shops, Haats & Wholesalers& jatras. b) Transport Facilities c) Product Availability Average Limited Retailers. Good High
Promotion a) Advertising TV, Radio, Print Media to Print, some extent, More Audio-Visuals,
Outdoors, Exhibitions.
b) Personal Selling
Languages Occasionally
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Television increasingly exposes viewers to a wide range of national, regional and international viewpoints. Rural exposure to television has been lower by far than radio. The mass media brings change wherever they go; but change does not have to be random. Successful media campaigns have changed attitudes and behaviour in a variety of areas, from basic literacy to health care and family planning. But Advertising to rural consumers continues to be a hit and miss affair. At best, it is an exercise where communicators grapple with issues of language, regional and religious affiliations and local sensitivities. Most often finding the right mix that will have a pan-Indian rural appeal is the greatest challenge for advertisers. But more often than not, marketers throw in the towel going in for simplistic solutions: such as going in for a mere transliteration of advertising copy. The result: advertising that is rooted in urban sensitivities and do not touch the hearts and minds of the rural consumer.
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consumer buying behavior indicates that the rural retailer influences 35% of purchase occasions. The rural customer goes to the same shop always to buy his things. And there is a very strong bonding in terms of trust between the two. The buying behavior is also such that the customer doesn't ask for the things by brand but like - "paanch rupey waali chaye dena". Now it is on the retailer to push whatever brand he wants to push as they can influence the buyer very easily and very strongly on the preferences. Therefore, sheer product availability can determine brand choice, volumes and market share. Thus distribution is the key factor for the success of rural marketing. This includes, maintaining favorable trade relations, providing innovative incentives to retailers and organizing demand generation activities among a host of other things. In rural areas, the place where consumers prefer to shop is very important, because it has been found that they buy their requirements from the same shop. This high shop loyalty is accentuated by the "khata" system, which is widely practiced. Hence, if the product is not available at the place where the consumer shops, he would buy some other available brand. RURAL FOLK MEDIA: -As a general rule, rural marketing involves more intensive personal selling efforts
compared to urban marketing. Marketers need to understand the psyche of the rural consumers and then act
accordingly. To effectively tap the rural market a brand must associate it with the same things the rural folks do. Utilizing the various rural folk media to reach them in 21
communication system will help in realizing the goal. Besides this when the advertisement is
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Present position
Change is the LAW OF NATURE. Though change is common, some changes seem peculiar and paradoxical. Today, we witness in Indian Economy one such a bifaceted change a change from national to global on one side and, urban to rural on the other. RURALISE is among the Buzz words of this new era. Though change is evolutionary and characteristic of a developing nation with huge population and vast resources, one requires a visionary entrepreneurship to
The first five years of new millennium will belong neither to the urban markets, which have reached saturation and where margins are under pressure nor to the export markets, which suffer from inadequate infrastructure back home, and uncompetitive price overseas. But it belongs to RURAL MARKETING. RURAL MARKETING has become the latest mantra of most corporate. FMCG majors like HLL, P&G, PARLE, COLGATE PALMOLIVE, BRITANNIA, etc. were the first to wake up this fact. Even MNCs like LG, PHILIPS, WIRLPOOL, and other consumer electronic majors are also gung-ho about the rural segment. The fever has spread the consumer durable companies and beyond. Today, many of the Corporate and MNCs look at these markets by compulsion as well as by choice. Compulsion, because markets are saturated, and there is nowhere to go. Choice: - because they are attractive and viable.
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A long time ago, when the British ruled India, a small factory was set up in the suburbs of Mumbai city, to manufacture sweets and toffees. The year was 1929 and the market was dominated by famous international brands that were imported freely.
Despite the odds and unequal competition, this company called Parle Products, survived and succeeded, by adhering to high quality and improvising from time to time. A decade later, in 1939, Parle Products began manufacturing biscuits, in addition to sweets and toffees. Having already established a reputation for quality, the Parle brand name grew in strength with this diversification. Parle Glucose and Parle Monaco were the first brands of biscuits to be introduced, which later went on to become leading names for great taste and quality.
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In the year 2002, it was decided to bring the brand closer to the child who is a major consumer. A national level promo - `Parle-G Mera Sapna Sach Hoga' was run for a period of 6 months. The promo was all about fulfilling the dreams of children. There were over 5 lakh responses and of that, over 300 dreams were fulfilled. Dreams that were fulfilled ranged from trips to Disneyland at Paris & Singapore; meeting their favorite film star Hrithik Roshan; free ride on a chartered plane; 20 scholarships worth Rs 50,000; a special cricket coaching camp with the Australian cricketer - Ricky Ponting; etc. The year 2002 will go down as a special year in Parle-G's advertising history. A year that saw the birth of G-Man - a new ambassador for Parle-G. Not just a hero but also a super-hero that saves the entire world, especially children from all the evil forces. A campaign that is not just new to the audiences but one that involves a completely new way of execution that is loved by children all over the world - Animation. A TV commercial that showed G-Man saving the children from the evil force called Terrolene launched this campaign. It was also supported by print medium through posters and streamers put up at the retail outlets. G-Man, a new superhero of Parle-G has the potential of making it big. And will be supported by a campaign that will see many a new creative in the future so as to keep the children excited and generate pride in being a consumer of Parle-G.
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Parle-G continues to climb the stairs of success. Take a look at the global market where it is being exported. First came the Middle East then USA followed by Africa and then Australia. An Indian brand, that's exported to almost all parts of the world. After all that's what you would expect from the Parle-G World's Largest Selling Biscuit
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Quality Commitment
Parle Products has one factory at Mumbai that manufactures biscuits & confectioneries while another factory at Bahadurgarh, in Haryana manufactures biscuits. Apart from this, Parle has manufacturing facilities at Neemrana, in Rajasthan and at Bangalore in Karnataka.
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All Parle products are manufactured under the most hygienic conditions. Great care is exercised in the selection & quality control of raw materials, packaging materials & rigid quality standards are ensured at every stage of the manufacturing process. Every batch of biscuits & confectioneries are thoroughly checked by expert staff, using the most modern equipment.
Marketing Strength
The extensive distribution network, built over the years, is a major strength for Parle Products. Parle biscuits & sweets are available to consumers, even in the most remote places and in the smallest of villages with a population of just 500. Parle has nearly 1,500 wholesalers, catering to 4,25,000 retail outlets directly or indirectly. A two hundred strong dedicated field force services these wholesalers & retailers. Additionally, there are 31 depots and C&F agents supplying goods to the wide distribution network. The Parle marketing philosophy emphasizes catering to the masses. We constantly endeavor at designing products that provide nutrition & fun to the common man. Most Parle offerings are in the low & mid-range price segments. This is based on our cultivated understanding of the Indian consumer psyche. The value-for-money positioning helps generate large sales volumes for the products. However, Parle Products also manufactures a variety of premium products for the up-market, urban consumers. And in this way, caters a range of products to a variety of consumers.
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The Parle name conjures up fond memories across the length and breadth of the country. After all, since 1929, the people of India have been growing up on Parle biscuits & sweets. Today, the Parle brands have found their way into the hearts and homes of people all over India & abroad. Parle Biscuits and confectioneries, continue to spread happiness & joy among people of all ages. The consumer is the focus of all activities at Parle. Maximizing value to consumers and forging enduring customer relationships are the core endeavor at Parle. Parles efforts are driven towards maximizing customer satisfaction and this is in synergy with their quality pledge. "Parle Products Limited will strive to provide consistently nutritious & quality food products to meet consumers' satisfaction by using quality materials and by adopting appropriate processes. To facilitate the above we will strive to continuously train our employees and to provide them an open and participative environment."
advertisement, and merchandising, doing personal selling, promoting and directing sales and service to customers. Marketing is an essential function
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These are the questions which arise while introducing a new product, such as HIDE n SEEK. Market Segmentation: A market should be defined in terms of various characteristics such as economic status, age, education, occupation and location. The best opportunity is to identify a market segment that is not well served by other firms. To determine the firms market segment, the fundamental aspects are summarized: a. What is the place of the firm in the industry and how it can compete with others? b. Whether the firm is known for its quality or price. c. Image of the firm among the customers.
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Biscuits are the commodity which was considered as a product for the rich class people. As this a product, that is traced out from western countries. So, it was considered to be an urban based product. The rural people were not able to get this thing. But this belief was being broken down by Parle. Parle Product Limited is a company which introduced their quality biscuits at a reasonable cost. A cost which is affordable by each and every class people. Even irrespective of the consumer of urban or that of the rural areas. Parle rules the market because it provides quality assurance with its penetrating potentiality pricing. In a rural area, there are people with different economic statues. So, the Parle biscuits are being priced to suit their statues. Rich people buy this, because of good quality. And the middle class or poor people buy it, because it provides low cost benefit to them along with quality. The product policy and strategy is the corner stone of a marketing mix. To the marketer products are the building blocks of a marketing plan.
PRODUCT BISCUITS are the products of daily consumption. Consumed by, one and all. And when it comes to Parle biscuits, it is loved by all.
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Company
needs
nothing
except
the
consumer
satisfaction. And Parle has successfully gained that. This is its biggest achievement which creates a SUCCESS STORY. The Core of the Product: - The core or the basic constituent of the product is the first component in the total personality of any product. Same is the case with Parle Products. It is presented as a product of daily consumption, which has a combination of unique features like Quality and nutritional value as well. For Example, the unique pack of Parle G biscuits, the rectangular shape of biscuits, the unique smell, the brand name, the price, the positioning as a product for all age people and even all class people, economically. PRICE
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Rural consumers look for value than its price. Product strategy and pricing are inter linked with each other to deliver value at the right price. So, the biscuits of Parle are of good quality and nutritious.
Also, the rural consumers are more interested in the utility of the product rather than packaging. So, its better to avoid sophisticated packing. And it will help out in reducing the cost as well. Simple packing should be adopted. Parle uses polyethylene sheets instead of boxes, which keeps the quality and quantity of biscuits and confectioneries in good condition. The price is low enough as it has to penetrate in the market even in the interior of the country. It makes it affordable by each and every one. PLACE Place refers to as the distribution channels adopted by Parle Products to reach even the interior part of the village. This is a quiet difficult and challenging task. But, Parle has always seen further to find solutions and grab opportunities. Determining Channels of Distribution:- A marketing channel is the pipeline through which a product flows on its way to its ultimate consumer. Own designed channel of distribution: Channels are tailor- -made to meet the needs of the company. New products, like hide n seek etc., commonly require different distribution channels from those needed for products, which are well established and widely accepted like Parle G, Marie. Etc. Avoid multiple channels: Multiple distribution channels sometimes create conflicts. Distribution will be adversely affected unless these conflicts are resolved. So, the Parle Company doesnt go for multi channel as it is harmful. So, they have only the established ones.
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Distribution Channel
AGENCIES OR AGENTS
WHOLESELLER
RETAILER
RAILWAY STATIONS
This shows that Parles Production units dispatching the biscuits to the well established agents or agencies. They send it further to the Whole seller.
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OBJECTIVES OF SURVEY
The basic objective of the survey was to understand the concept of rural marketing clearly by means of Parle biscuits demand analysis. To find out the consumer behaviour in relation to the biscuits of Parle. To find out the competitors, local brands and imitation brands. To find out its effect on sales of Parle.
Findings
Surprisingly, all the 15 retailers have Parle biscuits available with them. Not all the brands but most of them. All the retailers have in common PARLE G, MONACO, MARIE and KRACKJACK. About 9 retailers have with them the other brands of PARLE as well along with the above four, such as HIND n SEEK, FUNCENTRE, MILK SHAKTI, and CHEESELINGS. All the retailers were satisfied with the demand of Parle. They said that Parle is the most selling biscuits amongst all. And the brands of Parle are known very well to the people (consumers). They dont ask for biscuits, but just ask for PARLE. But, 4 retailers which are the smaller ones got some less demand as compared to others. Due to Britannias TIGER, the sale of PARLE G is being affected. But still people retain to the Parle brands.
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DEMAND ANALYSIS
5% 3%
39%
53%
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To sum up in general, the Indian rural market has grown in recent years in size, range and sophistication. Economic reforms in India have brought about major changes in the whole market environment. Successful rural marketing calls for a review of the nature and profile of rural consumers, designing the rural products to appeal to them, and adopting suitable media as well as appropriate strategies for communication and distribution. Economic reforms and changing economic conditions have clearly pointed out that the rural market is the future market of India. To become successful and contending players calls in for a review of rural marketing environment, rural consumer, media and strategies to be adopted.
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RURAL MARKETING IN INDIA Bibliography A) BOOKS Rural Marketing in India: Strategies and Challenges by Ruchika Ramakrishnan. Rural Marketing In India by Rajagopal B) WEBSITES www.managementstudyguide.com
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