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4. Http://vuaccess.blogspot.comA REPORT ON “To analyze the marketing of
consumer products(both durable and non durable products) in rural areas” A
Dissertation report submitted to ASIA-PACIFIC INSTITUTE OF
MANAGEMENT STUDIES, Towards partial fulfillment of the Post Graduate
Program in Management Submitted To: Submitted By: Program: ASIA-PACIFIC
INSTITUTE OF MANAGEMENT STUDIES MATHURA ROAD, NEW
DELHIHttp://vuaccess.blogspot.com
5. Http://vuaccess.blogspot.comAcknowledgementI consider my proud privilege to
express deep sense of gratitude to……………………………… for his admirable
and valuable guidance, keeninterest, encouragement and constructive suggestions
during the course ofthe project. I would also like to thank my father
………………………., for theirinspiration and moral support received in
completing this work as forcollecting the data I had to visit so many rural areas or
villages.Http://vuaccess.blogspot.com
6. Http://vuaccess.blogspot.comTABLE OF CONTENTS TOPIC PAGE NUMBER
EXECUTIVE SUMMARY 04 RESEARCH METHODOLOGY O6 REVIEW OF
LITERATURE 09 INTRODUCTION 13 FINDINGS AND ANALYSIS 118
CONCLUSIONS 128 SUGGESTIONS AND 131 RECOMMENDATIONS
APPENDIX 132 BIBLIOGRAPHY 138Http://vuaccess.blogspot.com
7. Http://vuaccess.blogspot.comEXECUTIVE SUMMARY India’s way is not
Europe’s. India is not Calcutta and Bombay. India livesin her seven hundred
thousand villages.....................Mahatma Gandhi,1926 Marketing in developing
countries like India have often beenborrowed from the western world. Concepts
like Brand identity, Customerrelationship management, 4 Ps of the marketing mix,
Consumer behaviorprocess; Segmentation, targeting and positioning etc. have
often beenlifted straight from the marketing intelligentsia abroad and adopted
inIndian conditions, often with minimal success. Reason lies not in the faultof
such concepts, but their integration with the Indian ethos and culture.The rural
India offers a tremendous market potential. Nearly two-thirds ofall middle-income
households in the country are in rural India andrepresents half of India’s buying
potential. Despite, the strong potential therural markets are by and large less
exploited. Consider the market, out offive lakhs villages in India only one lakh
have been tapped so far. Accordingto us if the rural market has to be adequately
tapped, there has to be achange in the way marketing concepts learnt in B-schools
with adequateadoption according to scenarios prevalent in rural India. The paper
therebypresent the modified version of Philip Kotler’s famous marketing
mixconsisting of 4Ps. The focus is on its modification and
subsequentcustomization to Indian rural markets perspective. The 4Ps have to
bemodified to include 1P i.e. Packaging and 1R i.e. Retailer as special focusareas.
Further to ensure the sustainability of the marketing mix two Es i.e.Education and
Empowerment have to be at the core as they help ingenerating widespread
participation from the rural clientele by enhancingtheir standard of living. The
Products in the rural market should essentiallyoperate at the basic and expected
level of product classification. Theyshould essentially meet the basic needs of the
Report on to analyze the marketing of consumer products
consumer and should be ano-frill product, as the consumer would not be valuing
much any furtheraddition to the product concept. Companies also face a daunting
task incommunicating about their products to the consumer due to lack of
literacyand failure of traditional media to penetrate in the rural
households.Http://vuaccess.blogspot.com
8. Projectsformba.blogspot.comHence, the advertising mix has to be more towards
non-conventional yeteffective medium like Puppetry, Folk Theater Song, Wall
Painting,Demonstration, Posters, Agricultural Games, NGOs network, etc.
Thusoverall either the product or communication or preferably both need to
becustomized to target the rural customer. In terms of physical distributiondue to
lack of infrastructure the costs are very exorbitant to reach the ruralcustomer.
Thus, mediums like rural marketing vehicles and melas and haatsprovide better
opportunities to meet customer needs. Also the existingdistribution would need a
transformation to achieve the requiredpenetration levels as success of Project
Streamline of HLL has shown. Since,the value for money concept is more
important rural customers, there hasto be an approach of treating customer as
budget seeking consumer. Here,fitting the consumer needs into an affordable price
point is pursued firstand then other features of product are fitted in. Similarly,
packaging has tomeet customer needs of better brand recall and introducing
favorable pricepoints. At the same time the importance of retailer has to be
recognizedwhere he is one of the most major influencer is customer’s decision
makingprocess. He acts as the friend and guide in this process and hence, needs
tobe managed effectively through promotion programmes and incentives
topromote the brand of a company. In order to bridge the gap between
PhilipKotler and countryside Indian what is needed the appreciation of
uniquefeatures of rural India and thus, responding to them by making
adequateimprovements in the application of the marketing concepts learnt in
theclass. For achieving the desired results of capturing the rural customer
acomprehensive approach to the traditional marketing concepts has to betaken.
This marketing mix has to be responsive to customers needs and fitinto his life as
a tool of self-enhancement. To be successful the concept ofmarketing has to be
taken in conjunction with its economic, psychologicaland social
implications.Http://vuaccess.blogspot.com
9. Http://vuaccess.blogspot.comRESEARCH METHODOLOGYOBJECTIVES OF
THE STUDY: Any task without sound objectives is like Tree without roots.
Similarly incase of any research study undertaken, initially the objectives of the
sameare determined and accordingly the further steps are taken on. A
researchstudy may have many objectives but all these objectives revolve
aroundone major objective which is the focus of the study. In this study, the
focusis on the emergence of rural markets as the most happening market onwhich
every marketer has an eye. And so this study will be based onstudying the
emergence of rural market in various contexts.The main objective of the study is
to analyze and present the marketing ofconsumer products in rural areas. The
following objectives have been setforth. They are to: •Present a rural marketing
perspective. • Present a profile of Indian Rural market. •Study and analyze the
consumer behavior in rural areas. •Examine the product and brand penetration in
rural markets. •Analyze marketing of consumer product in rural markets. •Present
Report on to analyze the marketing of consumer products
low priced Tiger brandbiscuits has become some of the success story in rural
marketing..Http://vuaccess.blogspot.com
13. Projectsformba.blogspot.com3. Dr. N. Rajendhiran(MBA, PhD)/ Mr. S.
Saiganesh(MBA, MA, M.Phil)/ Ms.P. Asha(MBA)Prime Minister Dr. Manmohan
Singh recently talked about his vision for ruralIndia: "My vision of rural India is
of a modern agrarian, industrial and serviceseconomy co-existing side by side,
where people can live in well-equippedvillages and commute easily to work, be it
on the farm or in the non-farmeconomy. There is much that modern science and
technology can do to realisethis vision. Rural incomes have to be increased. Rural
infrastructure has to beimproved. Rural health and education needs have to be met.
Employmentopportunities have to be created in rural areas."Go rural is the slogan
of marketing gurus after analyzing the socio-economic changes in villages. The
Rural population is nearly three timesthe urban, so that Rural consumers have
become the prime target marketfor consumer durable and non-durable products,
food, construction,electrical, electronics, automobiles, banks, insurance companies
and othersectors besides hundred per cent of agri-input products such as
seeds,fertilizers, pesticides and farm machinery. The Indian rural market
todayaccounts for only about Rs 8 billion of the total ad pie of Rs 120 billion,
thusclaiming 6.6 per cent of the total share. So clearly there seems to be a longway
ahead. Although a lot is spoken about the immense potential of theunexplored
rural market, advertisers and companies find it easier to vie for ashare of the
already divided urban pie. Http://vuaccess.blogspot.com
14. Projectsformba.blogspot.comThe success of a brand and in the Indian rural market
is as unpredictable asrain. It has always been difficult to gauge the rural market.
Many brands,which should have been successful, have failed miserably. More
often thannot, people attribute rural market success to luck. Therefore,
marketersneed to understand the social dynamics and attitude variations
withineach village though nationally it follows a consistent pattern looking at
thechallenges and the opportunities which rural markets offer to the marketersit
can be said that the future is very promising for those who canunderstand the
dynamics of rural markets and exploit them to their bestadvantage. A radical
change in attitudes of marketers towards the vibrant andburgeoning rural markets
is called for, so they can successfully impress on the230 million rural consumers
spread over approximately six hundred thousandvillages in rural India.
Http://vuaccess.blogspot.com
15. Http://vuaccess.blogspot.comRURAL INDIA…a new dawnIndia needs creative
solutions to start a revolution which can take its villages fast forward in time –
convertingthem into economically viable units and growth engines, harnessing the
power of the villagers, and opening up new horizons with the promise of a better
tomorrow.Http://vuaccess.blogspot.com
16. Http://vuaccess.blogspot.comINTRODUCTION“India lives in her villages”. As
described by Adi Godrej, Chairman, Godrej Group – “The ruralconsumers are
discerning and the rural market is vibrant. At the currentof growth, it will soon
outstrip the urban market. The rural market is nolonger sleeping but we are”.
Before gamboling into issues like where the Indian rural marketstands and the
opportunities for corporate’s to explore there... lets look atthe definition of urban
and rural India. The Census defined urban India as -"All the places that fall within
Report on to analyze the marketing of consumer products
wall painting in rural IndiaCorporates are still apprehensive to "Go Rural." A few
agencies that aretrying to create awareness about the rural market and its
importance areAnugrah Madison, Sampark Marketing and Advertising Solutions
Pvt Ltd,MART, Rural Relations, O&M Outreach, Linterland and RC&M, to name
afew. Also, the first four agencies mentioned above have come together toform
The Rural Network. The paramount objective of the Network is to getclients who
are looking for a national strategy in rural marketing and helpthem in executing it
across different regions.Http://vuaccess.blogspot.com
20. Projectsformba.blogspot.comInterestingly, the rural market is growing at a far
greater speed than itsurban counterpart. "All the data provided by various agencies
like NCAER,Francis Kanoi etc shows that rural markets are growing faster than
urbanmarkets in certain product categories at least. The share of FMCG productsin
rural markets is 53 per cent, durables boasts of 59 per cent market share.Therefore
one can claim that rural markets are growing faster than urbanmarkets," says
Sampark Marketing and Advertising Solutions Pvt Ltdmanaging director R A
Patankar."Yaara da Tashan..." McCann Ericksons ads with Aamir Khan
createduniversal appeal for Coca ColaCoca-Cola India tapped the rural market in a
big way when it introducedbottles priced at Rs 5 and backed it with the Aamir
Khan ads. The company,on its behalf, has also been investing steadily to build
their infrastructure tomeet the growing needs of the rural market, which reiterates
the fact thatthis multinational has realised the potential of the rural market is
goingstrength to strength to tap the same.Http://vuaccess.blogspot.com
21. Projectsformba.blogspot.comIn 2000, ITC took an initiative to develop direct
contact with farmerswho lived in far-flung villages in Madhya Pradesh. ITCs E-
choupal wasthe result of this initiative.Clearly the main challenge that one faces
while dealing with ruralmarketing is the basic understanding of the rural consumer
who is verydifferent from his urban counterpart. Also distribution remains to be
thesingle largest problem marketers face today when it comes to going
rural."Reaching your product to remote locations spread over 600,000 villagesand
poor infrastructure - roads, telecommunication etc and lower levels ofliteracy are a
few hinges that come in the way of marketers to reach therural market," says
MART managing director Pradeep Kashyap.Citing other challenges in rural
marketing, Patankar says, "Campaigns haveto be tailor made for each product
category and each of the regions wherethe campaign is to be executed. Therefore a
thorough knowledge of thenuances of language, dialects and familiarity with
prevailing customs in theregions that you want to work for is essential. The other
challenge is thereach and the available means of reaching out to these markets,
hence thevideo van is one of the very effective means of reaching out physically
tothe rural consumers."The fact of the matter remains that when compared to the
Indian urbansociety, which is turning into a consumerism society; the rural
consumerwill always remain driven by his needs first and will therefore be
costconscious and thrifty in his spending habits. "Decision-making is
stillconscious and deliberated among the rural community. But nevertheless,the
future no doubt lies in the rural markets, since the size of the ruralmarket is
growing at a good pace. There was a time when marketpredictions were made on
the basis of the state of the monsoon but thistrend has changed over the years;
Report on to analyze the marketing of consumer products
there is a large non farming sector,which generates almost 40 per cent of the rural
wealth. Hence the growthHttp://vuaccess.blogspot.com
22. Projectsformba.blogspot.comin the rural markets will be sustained to a large
extent by this class inaddition to the farmer who will always be the mainstay of
the ruraleconomy," affirms Patankar."Although the melting of the urban - rural
divide will take a while, this is notfor want of the availability of the means but for
want of the ruralconsumers mindset to change; which has its own logic, which is
driven bytradition, custom and values that are difficult to shed," he points
out.Satellite dish antennas reach rural IndiaFulcrums Gowthaman says, "The
biggest impending factor or deterrent onrural monies going up is that there is a
general sense of trying tobenchmark cost per contact (CPC). The television CPC is
going to anywaysbe cheaper to rural CPC and unless and until the volume - value
equationturns the other way round, you will not be able to spend
disproportionatemonies in the rural market."Http://vuaccess.blogspot.com
23. Projectsformba.blogspot.comTypical shop in rural India stocked with sachets,
etcFor HUL, a one rupee or a five rupee sachet or the Kutti Hamam (the
smallHamam) helps in giving the consumers a trial opportunity. While it doeshelp
in generate volume but not in terms of values. "Till the time thatvolume - value
equation is managed better, the CPC is preventing anybodyto look at rural at a
large scale activation programme," reiteratesGowthaman.Ultimately, the ball lies
in the court of rural marketers. Its all about howone approaches the market, takes
up the challenge of selling products andconcepts through innovative media design
and more importantlyinteractivity. INDIA INFRASTRUCTUREThe best
barometer of country’s economic standing is measured by its GDP.India, the
second most populated country of more than 1100 million hasemerged as one of
the fastest growing economies. It is a republic with afederal structure and well-
developed independent judiciary with politicalconsensus in reforms and stable
democratic environment .In 2008-09Http://vuaccess.blogspot.com
24. Projectsformba.blogspot.comIndia’s economy-GDP grew by 6.5% due to global
recession. In the previousfour years,economy grew at 9%.The Indian economy is
expected sustain agrowth rate of 8% for the next three years upto 2012. With the
expectedaverage annual compounded growth rate of 8.5%, Indias GDP is
expectedto be USD 1.4 trillion by 2017 and USD 2.8 trillion by 2027. Service
sectorcontribute to 50% of India‘s GDP and the Industry and agriculture
sector25% each.Investment Opportunities in Indian InfrastructureThe robust
current growth in GDP has exposed the grave inadequacies inthe country’s
infrastructure sectors. The strong population growth in Indiaand its booming
economy are generating enormous pressures to
modernizeHttp://vuaccess.blogspot.com
25. Projectsformba.blogspot.comand expand India’s infrastructure. The creation of
world class infrastructurewould require large investments in addressing the deficit
in quality andquantity. More than USD 475 billion worth of investment is to flow
intoIndia’s infrastructure by 2012. No country in the world other than Indianeeds
and can absorb so many funds for the infrastructure sector. With theabove
investments India’s infrastructure would be equal to the best in theworld by
2017.In the next five years planned infrastructure investment in India in somekey
sectors are (at current prices): Modernization of highways -US$ 75billion,
Report on to analyze the marketing of consumer products
piecemeal approaches will deliver only limited results in the rural markets. And, if
an organization wants to tap the realHttp://vuaccess.blogspot.com
31. Http://vuaccess.blogspot.compotential of the rural market, it needs to make a long-
term commitment with this market. Its approach & strategies must not focus in
just selling products & services, but they should also aim at creating an
environment for this to happen.The objective of rural marketing in the current
phase is the improvement ofthe quality of life by satisfying the needs & wants of
the customers, notthrough at and-alone products or services, but by
presentingcomprehensive & integrated solutions which might involve a set of
inter-related products & services.Till recently, the focus of marketers in India was
the urban consumer and bylarge number specific efforts were made to reach the
rural markets. Butnow it is felt that with the tempo of development accelerating in
ruralIndia, coupled with increase in purchasing power, because of
scientificagriculture, the changing life style and consumption pattern of
villagerswith increase in education, social mobility, improved means
oftransportations and communication and other penetrations of mass mediasuch as
television and its various satellite channels have exposed rural Indiato the outside
world and hence their outlook to life has also changed.Because of all these factors,
rural India is now attracting more and moremarketers.Increase in competition,
saturated urban markets, more and move newproducts demanding urban
customers, made the companies to think aboutnew potential markets. Thus, Indian
rural markets have caught theattention of many companies, advertisers and
multinational companies.Http://vuaccess.blogspot.com
32. Projectsformba.blogspot.comAccording to a recent survey conducted by the
National Council for AppliedEconomic Research (NCAER), the purchasing power
of the rural people hasincreased due to increase in productivity and better price
commanded bythe agricultural products. By and large this rise in purchasing
powerremains unexploited and with the growing reach of the television, it is
nowquite easy for the marketers to capture these markets.Rural marketing has
become the latest mantra of most corporate.Companies like Hindustan Lever,
Colgate Palmolive, Britannia and evenMultinational Companies (MNCs) like
Pepsi, Coca Cola, L.G., Philips, andCalvin kare are all eyeing rural markets to
capture the large Indian market.Coming to the frame work of Rural Marketing,
Rural Marketing broadlyinvolves reaching the rural customer, understanding their
needs and wants,supply of goods and services to meet their requirements, carrying
out aftersales service that leads to customer satisfaction and repeat
purchase/sales.The Indian growth story is now spreading itself to Indias
hinterlands. RuralIndia, home to about two-thirds of the country’s 1 billion
population, is notjust witnessing an increase in its income but also in consumption
andproduction. The union budget for 2009-10 hiked the allocation for theNational
Rural Employment Guarantee Act (NREGA) to US$ 8.03 billion,giving a further
boost to the rural economy. This is in addition to the farmerloan waiver of US$
13.86 billion and the ambitious Bharat NirmanProgramme with an outlay of US$
34.84 billion for improving ruralinfrastructure. Additionally, the rural economy
has not been impacted bythe global economic slowdown, according to a recent
study by the RuralHttp://vuaccess.blogspot.com
Report on to analyze the marketing of consumer products
in the first phase, and in the next phase, will look at expanding thebase in villages
with a population of 50,000.Http://vuaccess.blogspot.com
39. Projectsformba.blogspot.comNature of Rural Market •Large, Diverse and
Scattered Market: Rural market in India is large, and scattered into a number of
regions. There may be less number of shops available to market products. • Major
Income of Rural consumers is from Agriculture: Rural Prosperity is tied with
agriculture prosperity. In the event of a crop failure, the income of the rural
masses is directly affected. •Standard of Living and rising disposable income of
the rural customers: It is known that majority of the rural population lives below
poverty line and has low literacy rate, low per capital income, societal
backwardness, low savings, etc. But the new tax structure, good monsoon,
government regulation on pricing has created
disposableHttp://vuaccess.blogspot.com
40. Http://vuaccess.blogspot.comincomes. Today the rural customer spends money to
get value and is aware of the happening around him. •Traditional Outlook:
Villages develop slowly and have a traditional outlook. Change is a continuous
process but most rural people accept change gradually. This is gradually changing
due to literacy especially in the youth who have begun to change the outlook in
the villages. •Rising literacy levels: It is documented that approximately 45% of
rural Indians are literate. Hence awareness has increases and the farmers are well-
informed about the world around them. They are also educating themselves on the
new technology around them and aspiring for a better lifestyle. • Diverse
socioeconomic background: Due to dispersion of geographical areas and uneven
land fertility, rural people have disparate socioeconomic background, which
ultimately affects the rural market. •Infrastructure Facilities: The infrastructure
facilities like cemented roads, warehouses, communication system, and financial
facilities are inadequate in rural areas. Hence physical distribution is a challenge
to marketers who have found innovative ways to market their products.Some
Myths: •Myth-1: Rural Market Is a Homogeneous
MassHttp://vuaccess.blogspot.com
41. Projectsformba.blogspot.comReality: It’s a heterogeneous population. Various
Tiers are presentdepending on the incomes like Big Landlords; Traders, small
farmers;Marginal farmers: Labors, artisans. State wise variations in
ruraldemographics are present viz. Literacy (Kerala 90%, Bihar 44%)
andPopulation below poverty line (Orissa 48%, Punjab 6%). •Myth-2: Disposable
Income Is LowReality: Number of middle class HHs (annual income Rs 45,000-
2, 15,000)for rural sector is 27.4 million as compared to the figure of 29.5 million
forurban sector. Rural incomes CAGR was 10.95% compared to 10.74% inurban
between 1970-71 and 1993-94. •Myth-3: Individuals Decide About
PurchasesReality: Decision making process is collective. Purchase process-
influencer,decider, and buyer, one who pays can all be different. So marketers
mustaddress brand message at several levels. Rural youth brings brandknowledge
to Households (HH).Is rural marketing transactional or developmental in
itsapproach?Http://vuaccess.blogspot.com
42. Projectsformba.blogspot.comIt is true, rural markets have become an attractive
proposition forcommercial business organizations.The role of rural marketing as
such is more developmental thantransactional. It is more a process of delivering
Report on to analyze the marketing of consumer products
better standard of living andquality of life to the rural environment taking into
consideration theprevailing village milieu.Transactional Vs Developmental: For
better comprehension ofthis role let us distinguish development marketing and
transactionalmarketing. Table brings out the differences in brief. Transactional Vs
Development Marketing S.No Aspect Transactional Development 1. Concept
Consumer orientation, Society orientation, societal Marketing concept concept 2.
Role Stimulating and Catalytic and conversional transformation agent marketing
3. Focus Product-market fit Social change 4. Key task Product innovations Social
innovations and and communications communications 5. Nature of Commercial
Socio-cultural, economic activity 6. Participants Corporate enterprises,
Government, voluntaryHttp://vuaccess.blogspot.com
43. Http://vuaccess.blogspot.comSellers agencies, corporate enterprises, benefactors7.
Offer Products and services Development, projects/schemes/program s8. Target
group Buyers Beneficiaries and buyers9. Communication Functional
Developmental10. Goal Profits, Customer Market development satisfaction
Corporate Image Brand image11. Time-Frame Short-medium Medium-Long12.
Motivation Profit-motive Service-motive Business policy Ideological or Public
policyModel: The model of rural marketing represents a combination of
thetransactional and developmental approaches. •Rural marketing process is both
a catalyst as well as an outcome of the general rural development process.
Initiation and management of social and economic change in the rural sector is the
core of the rural marketing process. It becomes in this process both benefactor and
beneficiary.Http://vuaccess.blogspot.com
44. Http://vuaccess.blogspot.com•Innovation is the essence of marketing. Innovative
methods of social change for successful transformation of traditional society are
virtual. Such a change narrows the rural-urban divide. •The process of
transformation can be only evolutionary and not revolutionary. The growth of the
rural market can be a planned evolutionary process based on strategic instruments
of change rather than constitute just short-term opportunities for commercial
gains. •The exposure of ruralities to a variety of marketing transactions during the
change process puts them in the role of beneficiaries than of just `buyers of
modern inputs and infrastructural services. •Communication is the vital element of
rural marketing. It should serve to resolve social conflicts, encourage cooperation
and strengthen competitive spirit during interactions between rural and urban as
well as within rural areas. Another critical point for communication is the point of
conversion of ruralite from an "induced beneficiary" to an "autonomous
buyer".Classification of rural consumersThe rural consumers are classified into
the following groups based on theireconomic status: •The Affluent Group: They
are cash rich farmers and a very few in number. They have affordability but not
form a demand base largeHttp://vuaccess.blogspot.com
45. Http://vuaccess.blogspot.comenough for marketing firms to depend on. Wheat
farmers in Punjab and rice merchants of Andhra Pradesh fall in this group. •The
Middle Class: This is one of the largest segments for manufactured goods and is
fast expanding. Farmers cultivating sugar cane in UP and Karnataka fall in this
category. •The Poor: This constitutes a huge segment. Purchasing power is less,
but strength is more. They receive the grants from government and reap the
benefits of many such schemes and may move towards the middleclass. The
Report on to analyze the marketing of consumer products
farmers of Bihar and Orissa fall under this category.Roadblocks of Indian Rural
MarketThere are several roadblocks that make it difficult to progress in the
ruralmarket. Marketers encounter a number of problems like dealing withphysical
distribution, logistics, proper and effective deployment of salesforce and effective
marketing communication when they enter ruralmarkets. The major problems are
listed below. •Standard of living: The number of people below the poverty line is
more in rural markets. Thus the market is also underdeveloped and marketing
strategies have to be different from those used in urban marketing. • Low literacy
levels: The low literacy levels in rural areas leads to a problem of communication.
Print media has less utility compared to the other media of
communication.Http://vuaccess.blogspot.com
46. Http://vuaccess.blogspot.com• Low per capita income: Agriculture is the main
source of income and hence spending capacity depends upon the agriculture
produce. Demand may not be stable or regular. •Transportation and warehousing:
Transportation is one of the biggest challenges in rural markets. As far as road
transportation is concerned, about 50% of Indian villages are connected by roads.
However, the rest of the rural markets do not even have a proper road linkage
which makes physical distribution a tough task. Many villages are located in hilly
terrains that make it difficult to connect them through roads. Most marketers use
tractors or bullock carts in rural areas to distribute their products. Warehousing is
another major problem in rural areas, as there is hardly any organized agency to
look after the storage issue. The services rendered by central warehousing
corporation and state warehousing corporations are limited only to urban and
suburban areas. • Ineffective distribution channels: The distribution chain is not
very well organized and requires a large number of intermediaries, which in turn
increases the cost and creates administrative problems. Due to lack of proper
infrastructure, manufacturers are reluctant to open outlets in these areas. They are
mainly dependent on dealers, who are not easily available for rural areas. This is a
challenge to the marketers. • Many languages and diversity in culture: Factors like
cultural congruence, different behaviour and language of the respective
areasHttp://vuaccess.blogspot.com
47. Http://vuaccess.blogspot.commake it difficult to handle the customers. Traits
among the sales force are required to match the various requirements of these
specific areas. • Lack of communication system: Quick communication is the need
of the hour for smooth conduct of business, but it continues to be a far cry in rural
areas due to lack of communication facilities like telegraph and
telecommunication systems etc. The literacy rate in the rural areas is rather low
and consumer’s behaviour in these areas is traditional, which may be a problem
for effective communication. •Spurious brands: Cost is an important factor that
determines purchasing decision in rural areas. A lot of spurious brands or look-
alikes are available, providing a low cost option to the rural customer. Many a
time the rural customer may not be aware of the difference due to illiteracy.
•Seasonal demand: Demand may be seasonal due to dependency on agricultural
income. Harvest season might see an increase in disposable income and hence
more purchasing power. • Dispersed markets: Rural population is highly dispersed
and requires a lot of marketing efforts in terms of distribution and
communication.Attractiveness of rural marketHttp://vuaccess.blogspot.com
Report on to analyze the marketing of consumer products
promotion.Campaign like this, which can reach millions, costs twice as much in
urbanarea. Rural Vs Urban MarketingNo Aspect Urban Rural .1 Marketing &
Marketing & Societal Concepts Societal Concepts, & Relationship Development
Philosophy Marketing Marketing & Relationship Marketing2 •Market •Demand
High Low •Competition Among Units In Mostly From Organized Sector
Unorganized Units Consumers Location Concentrated Widely Spread Literacy
High Low Income High LowHttp://vuaccess.blogspot.com
55. Http://vuaccess.blogspot.comExpenditure Planned, Even Seasonal, Variation
Needs High Level Low Level Innovation/Adoptio Faster Slow n3 Product
Awareness High Low Concept Known Less Known Positioning Easy Difficult
Usage Method Easily Grasped Difficult To Grasp Quality Preference Good
Moderate4 Price Sensitive Yes Very much level desired Medium-high Medium-
low5 distribution Wholesalers, Village shops, stockists, retailer, “Haats”
supermarket, channels specialty stores, & authorised showrooms Transport
Facilities Good Average Product Availability High Limited6 Promotion
Advertising Print, audio visual TV, radio, printHttp://vuaccess.blogspot.com
56. Http://vuaccess.blogspot.commedia, outdoors, media to some exhibitions etc. few
extent. More languages languages Door-to-door, Occasionally Personal Selling
frequently Contests, gifts, Gifts, price Sales Promotion price discount discounts
Publicity Good opportunities Less opportunitiesSpecial Products for Rural
Markets:•Rural Transporter: Mahindra & Mahindra is busy developing
theprototype of what it calls a ‘Rural Transporter’ – basically a hybrid betweena
tractor and a rural transport vehicle. The product at 20-25 HP will betargeted at
those who cannot afford a normal tractor and would also fulfillthe need of family
transporter that could take in the rural roughs but wouldbe much more comfortable
and safer than the conventional tractor-trolley.•Sampoorna TV: LG Electronics,
the Korean firm has rejigged the TV toappeal to local needs. It spent Rs. 21 Lacs
to develop a set that would haveon-screen displays in the vernacular languages of
Hindi, Tamil and Bengali.The logic, rural consumers unfamiliar with English
would still be able to usethe TV without being
intimidated.Http://vuaccess.blogspot.com
57. Projectsformba.blogspot.com•Titan Watches: A recent NCAER study revealed
that there is a greatpotential for watches in rural areas. In fact it is considered to be
a highpriority list. It was also found that a rural consumer looks for theruggedness
of the watch more than the urban consumer does. He prefersthick watches than
slim watches. The biggest problem that the Marketersare facing in the Rural
Markets is Of IMITATIONS. Imitations may result intwo types of goods
depending upon the purpose, commitment, andcompetence of imitator. A poor
imitator will end up in producing deceptive,spurious, fake, copycat products. He
dupes the gullible customer byoffering products having close resemblance with
the original. In quality, it ispoor cousin to the original. On the other hand, a poor
imitator may evenproduce an improved version of the original product. In this
scenario thejob of the Marketer becomes even more difficult in the sense that he
hasnot to fight other competitors but also the imitated products. Theadvantages
that these products enjoy in the rural markets are that theImitators who are in the
villages are making these and they are offeringMore Margins & Better credit
Facilities.To solve this problem the Marketerhas to educate the consumer about
Report on to analyze the marketing of consumer products
his product and show him the benefitsof his products over the imitated ones.Need-
Product Relationships and the changes happening in Rural IndiaNeeds Old
Products New ProductsHttp://vuaccess.blogspot.com
58. Projectsformba.blogspot.comBrushing Teeth Neem sticks, Charcoal, Toothpaste,
tooth Rocksalt, Husk powderWashing Vessels Coconut fiber, Earthy Washing
Powders, materials, Brick Powder, soaps and liquids AshTransport Bullock Cart,
Horses, Tractors, LCVs, Donkeys Mopeds, Scooters, Motor cyclesIrrigation
Wells, Canals, Water Bore-wells, Motors, lifters, Wind Mills Power Generators,
Pump SetsHair Wash Shikakai powder, Retha, Shampoos and hair Besan care
soapsCONSUMER BEHAVIOR IN RURAL MARKETS:Promotion of brands in
rural markets requires the special measures. Due tothe social and backward
condition the personal selling efforts have achallenging role to play in this regard.
The word of mouth is an importantmessage carrier in rural areas. Infect the
opinion leaders are the mostinfluencing part of promotion strategy of rural
promotion efforts. Theexperience of agricultural input industry can act as a
guideline for theHttp://vuaccess.blogspot.com
59. Projectsformba.blogspot.commarketing efforts of consumer durable and non-
durable companies.Relevance of Mass Media is also a very important factor.The
Indian established Industries have the advantages, which MNC dontenjoy in this
regard. The strong Indian brands have strong brand equity,consumer demand-pull
and efficient and dedicated dealer network whichhave been created over a period
of time. The rural market has a grip ofstrong country shops, which affect the sale
of various products in ruralmarket. The companies are trying to trigger growth in
rural areas. They areidentifying the fact that rural people are now in the better
position withdisposable income. The low rate finance availability has also
increased theaffordability of purchasing the costly products by the rural
people.Marketer should understand the price sensitivity of a consumer in a
ruralarea. This paper is therefore an attempt to promote the brand image in
therural market.Indian Marketers on rural marketing have two understanding (I)
The urbanmetro products and marketing products can be implemented in
ruralmarkets with some or no change. (ii) The rural marketing required theseparate
skills and techniques from its urban counter part. The Marketershave following
facilities to make them believe in accepting the truth thatrural markets are
different in so many terms.(i) The rural market has the opportunity for.(ii) Low
priced products can be more successful in rural markets becausethe low
purchasing, purchasing powers in rural markets.Http://vuaccess.blogspot.com
60. Projectsformba.blogspot.com(iii) Rural consumers have mostly homogeneous
group with similar needs,economic conditions and problems.(iv) The rural
markets can be worked with the different media environmentas opposed to press,
film, radio and other urban centric media exposure.How reality does affect the
planning of marketers? Do villagers have sameattitude like urban consumers? The
question arises for the management ofrural marketing effects in a significant
manner so than companies can enterin the rural market with the definite goals and
targets but not for a shortterm period but for longer duration. The Research paper
will discuss therole of regard. The strategy, which will be presented in the paper,
can beeither specific or universally applicable.The ultimate objective of
allproduction is consumption. A free market economy provides freedom tothe
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company on the need for education and also for new product ideas. •Brand
preference and loyalty - (80% of sale is branded items in 16 product
categories)Cultural factors influencing consumer behaviorCultural factors exert
the broadest and deepest influence on consumerbehaviour. The marketer needs to
understand the role played by thebuyer’s culture. Culture is the most basic element
that shapes a person’swants and behaviour. In India, there are so many different
cultures, whichonly goes on to make the marketer’s job tougher. Some of the few
culturalfactors that influence buyer behaviour are: •Product (colour, size, design,
and shape): There are many examples that support this point. •For example, the
Tata Sumo, which was launched in rural India in a white colour, was not well
accepted. But however, when the same Sumo was re-launched as Spacio (a
different name) and in aHttp://vuaccess.blogspot.com
64. Http://vuaccess.blogspot.combright yellow colour, with a larger seating capacity
and ability to transport good, the acceptance was higher. •Another good example
would be Philips audio systems. Urban India looks at technology with the
viewpoint of ‘the smaller the better’. However, in rural India, the viewpoint is
totally opposite. That is the main reason for the large acceptance of big audio
systems. Thus Philips makes audio systems, which are big in size and get accepted
in rural India by their sheer size. •Social practices: There are so many different
cultures, and each culture exhibits different social practices. For example, in a few
villages they have common bath areas. Villagers used to buy one Lifebuoy cake
and cut it into smaller bars. This helped lifebuoy to introduce smaller 75-gram
soap bars, which could be used individually. •Decision-making by male head: The
male in Indian culture has always been given the designation of key decision
maker. For example, the Mukhiya’s opinion (Head of the village), in most cases,
is shared with the rest of the village. Even in a house the male head is the final
decision maker. In rural areas, this trend is very
prominent.Http://vuaccess.blogspot.com
65. Http://vuaccess.blogspot.com•Changes in saving and investment patterns: From
gold, land, to tractors, VCR’s, LCV’s4 A’s approach of Indian Rural MarketThe
rural market may be appealing but it is not without its problems: Lowper capita
disposable incomes that is half the urban disposable income;large number of daily
wage earners, acute dependence on the vagaries ofthe monsoon; seasonal
consumption linked to harvests and festivals andspecial occasions; poor roads;
power problems; and inaccessibility toconventional advertising media.However,
the rural consumer is not unlike his urban counterpart in manyways. The more
daring MNC’s are meeting the consequent challenges ofavailability, affordability,
acceptability and awareness (the so-called 4 A’s) •AvailabilityThe first challenge
is to ensure availability of the product or service. Indias627,000 villages are
spread over 3.2 million sq km; 700 million Indians maylive in rural areas, finding
them is not easy. However, given the poor stateof roads, it is an even greater
challenge to regularly reach products to thefar-flung villages. Any serious
marketer must strive to reach at least 13,113villages with a population of more
than 5,000. Marketers must trade off thedistribution cost with incremental market
saturation. Over the years, IndiasHttp://vuaccess.blogspot.com
66. Projectsformba.blogspot.comlargest MNC, Hindustan Lever, a subsidiary of
Unilever, has built a strongdistribution system which helps its brands reach the
Report on to analyze the marketing of consumer products
change and makingunit sachet packs affordable is the key to inducing trial and
purchase.Systematic, in-depth research that can help understand the depths of
themind of the villagers, their buying criteria, purchase patterns andpurchasing
power are an essential input while developing rural specificproducts or services. A
common error has been to launch a completelystripped down version of the urban
product in the rural market, with theobjective of offering the lowest possible price.
This is not what a ruralconsumer wants. What is required is to introduce a product
with ‘essential’features, whose needs are recognized and for which the consumer
is willingto pay (value-adding features). Product developers should aim
ateliminating all the cost-adding features, i.e., features which a consumer
isunwilling to pay for as he sees no obvious utility. This would “redefinevalue” in
the minds of the consumer and tremendously increase
productacceptability.Product development is severely constrained by legislation in
the case ofagricultural inputs like fertilizers, insecticides and pesticides. In the
case offertilizers for instance, though levels of deficiency of nutrients
haveincreased significantly over the past decade, no significant changes
informulations notified under the Fertilizer Control Order have taken place.This
has severely restricted the availability of cost effective specialtyfertilizers of
global standards to Indian farmers. Technological know-
howHttp://vuaccess.blogspot.com
74. Projectsformba.blogspot.comfor manufacture of such fertilizers exists within the
country. However,farmers using modern farming practices are unable to get an
assuredsupply of such farm inputs due to draconian legislation. A move to
liberalizethe sector could perhaps consider the accepted worldwide norm
ofallowing manufacturers with a strong R&D base to decide their
ownformulations with the government machinery conducting checks on
marketsamples of finished products to ensure that they live up to the
labelledspecifications. This would be a major policy initiative that would give a
hugeimpetus to innovative product development in the farm sector. Product
lifecycles as are becoming shorter and these are having their impact oncompany
life cycles. Thus for any company wishing to develop its productportfolio,
allegiance to the classic American P-A-L Principle of Partnership -Alliances -
Linkages is a basis for survival.PricingA significant portion of the rural population
is paid in daily wages. Dailywage earners tend to have little stock of money, and
therefore tend tomake purchases only to meet their daily needs. The implication is
that packsizes and price points are critical to sales, and importantly, that
ruralconsumers view the purchase-tradeoff dilemma across a much wider rangeof
product categories. As a result, the nature of competition is
muchHttp://vuaccess.blogspot.com
75. Projectsformba.blogspot.comgreater; a beverage manufacturer is not only
competing with othermanufacturers in its category, but also other products that
consumers mayconsider one-off luxury purchases such as shampoo. So marketer
will haveto examine method by which he can make the product more affordable.
Inthe case of consumer durable one way is to work through rural bank andoffer
higher purchase terms to consumer. In short, the Value for money isthe most
important concept that will differentiate the successful brandfrom the
rest.BUDGET CONSCIOUS CONSUMERSTATUS SEEKING
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CONSUMERSEvery marketer must realize that the rural consumer is not a miser.
He isnot simply looking for the cheapest product in every category. Heunderstands
and demands value for money in every purchase that hemakes. Pricing therefore is
a direct function of factors including cost-benefitadvantage and opportunity cost.
Pricing offered to consumers should be forvalue offerings that are affordable.
Price sensitivity is extremely high andcomparison with competitive prices is
common. Consumers seem to createnarrow psychological price bands in their
minds for product groups andprice elasticity beyond the extreme price points is
very high. The perceivedutility or value of the product or service is the ultimate
decision makingfactor. It is certain however, that buying cheap is not the primary
objective.Rather, it is “buying smart”. A study revealed that the average
ruralconsumer takes approximately 2 years to decide on buying a watch! He
willnot do so unless he is totally convinced that he is getting value for
Money.Http://vuaccess.blogspot.com
76. Projectsformba.blogspot.comImpulse buys and purchases for conspicuous
consumption are alsoextremely few and far Between considering the “value for
money” factorthat reigns supreme in most rural purchase decisions.It must be
remembered that the rural consumer does not have a budgetproblem. He has a
cash flow problem. This is because the village folkreceive funds only twice a year.
At these times, he is capable of making highvolume purchases. At all times,
however, the unit price is critical and so isthe pack size. Because of this, in the
lean season when there is a cash flowcrunch, marketers need to provide financial
products, schemes or solutionsthat suit the needs of the rural
population.Promotions & AdvertisingThere are a lot of barriers that militate
against homogenous media andmessage delivery. These barriers stem from the
fact that rural markets varyimmensely inTerms of tastes, habits and preferences
leading to different expectations ofevery segment of the population. However, one
fact is certain across allareas. The rural consumer likes to touch and feel a product
before making achoice. Demonstrations are undoubtedly the most effective
promotionaltool that shapes purchase decisions of the rural
population.Demonstrations establish the credentials of any new technology used
indeveloping the product.Http://vuaccess.blogspot.com
77. Projectsformba.blogspot.comIn today’s information era, it is very important for
companies to wise-up onemerging technologies. It has in fact become a medium to
attract largeraudiences for a product demonstration. Technology must be used
toprepare a database of customers and their requirements. The use of videousing
mobile vans and even large screen video walls at events should bearranged.The
classic conundrums of reach and coverage of the media are shattered.Several
creative communication media have been used by variouscompanies to tackle the
problem of having to use visual communicationand non-verbal communication to
reach the rural audience. This is requiredbecause a large proportion of the rural
population cannot read or write.Alliances with cottage industries, dharmsalas,
panchayats, post offices andpolice stations for advertising have also helped
immensely. Moreimportantly, in rural India, experience has proved time and time
again thatword of mouth is the key influencer.Intermediaries are the foundation to
rural distribution. If the intermediaryunderstands and is constantly reminded about
your product, then the enduser will not be allowed to forget. The companies must
Report on to analyze the marketing of consumer products
reinforce this highlyeffective medium and use all their innovation and money tom
developmore dramatic point of sale and point of contact material. This becomes
allthe more important when in rural India, more often than not, the
overlapbetween the product categories sold in a single outlet in tremendous.
ForHttp://vuaccess.blogspot.com
78. Projectsformba.blogspot.cominstance, a store may call itself as a grocery store but
will stock everythingfrom groceries to vegetables to fertilizers and may at times
even stockmedicines. In such cases, the point at which the customer actually
comes incontact with a product may not be the point at which the sale is
affected.The re-use capacity and colour of the container in which the product
ispacked is also a crucial factor. In fact, reusable packaging is considered amajor
aid in promoting sales for products in the rural market. Consumerand Trade
schemes that Incentivise Spending using discount coupons, offseason discounts,
free samples, etc. encourage spending. Lucky draws andgift schemes are a major
hit in most states.The use of local idioms and colloquial expressions are an
excellent way tostrike a rapport with the rural consumer and must be borne in
mind whendeveloping media plans and public relations programmes. No high
voltagepublicity is required. The rural consumer is very down to earth but
equallydiscerning andmarketers need to step into the shoes of the rural folk while
creatingproduct promotion campaigns. Another unique feature of rural markets
isthat the Decision making process is collective. The persons involved in
thepurchase process - influencer, decider, buyer, one who pays can all bedifferent.
So marketers must address brand messages in their campaigns atseveral levels.
Apart from regular household goods, several agribusinesscompanies have also
started providing gift schemes with offers for freejewellery that influences the
ladies to pressure the farmers to purchaseHttp://vuaccess.blogspot.com
79. Projectsformba.blogspot.comagricultural inputs from select companies. This
promotion strategy thusmakes women influence purchase decisions that they
would ordinarily notbe involved in.Youth power is becoming increasingly evident
in villages. Rural youth bringbrand knowledge to the households. This has forced
several companies tochange the focus and positioning of their products and
services towardsthis segment that is growing in absolute number and relative
influence.There are other attributes in the promotion strategy which are explained
asunder:1. Mass media: In the present world mass media is a powerful medium
ofcommunication. The following are the mass media generally used: •Television.
•Cinema. •Radio •Print media: Handbills and Booklets, posters, stickers, banners,
etc.2. Personal selling and opinion leaders: In personal selling it isrequired that the
potential users are identified and awareness is createdamong them about the
product, its features, uses and benefits. This can beachieved only by personal
selling by highly motivated sales person. In factthe word of mouth information
holds lot validity in rural areas even today.This is the reason why opinion leaders
and word of mouth are thrivingamong rural consumers. An opinion leader in rural
areas can be defined asa person who is considered to be knowledgeable and is
consulted by othersHttp://vuaccess.blogspot.com
80. Projectsformba.blogspot.comand his advice is normally followed. The opinion
leaders may be biglandlords or politicians or progressive farmers.3. Special
campaigns: During crop harvest and marketing seasons it isbeneficial to take up
Report on to analyze the marketing of consumer products
even whenthey can use Neem or Babool sticks or Gudakhu, villagers are using
soapslike Nima rose, Breeze, Cinthol etc. even when they can use
locallymanufactured very low priced soaps. Villagers are constantly
lookingforward for new branded products. What can one infer from
theseincidents, is the paradigm changing and customer no longer price sensitive?
Indian customer was never price sensitive, but they want value for money.They
are ready to pay premium for the product if the product is offeringsome extra
utility for the premium. •BY UNDERSTANDING CULTURAL AND SOCIAL
VALUESCompanies have recognized that social and cultural values have a
verystrong hold on the people. Cultural values play major role in deciding whatto
buy. Moreover, rural people are emotional and sensitive. Thus, topromote their
brands, they are exploiting social and cultural values. •BY PROVIDING WHAT
CUSTOMER WANTHttp://vuaccess.blogspot.com
87. Projectsformba.blogspot.comThe customers want value for money. They do not
see any value in frillsassociated with the products. They aim for the basic
functionality.However, if the seller provides frills free of cost they are happy with
that.They are happy with such a high technology that can fulfil their need.
As"Motorola" has launched, seven models of Cellular Phones of hightechnology
but none took off. On the other hand, "Nokia" has launched asimple product,
which has captured the market. •BY PROMOTING PRODUCTS WITH INDIAN
MODELS AND ACTORSCompanies are picking up Indian models, actors for
advertisements as thishelps them to show themselves as an Indian company. Diana
Hyden andShahrukh Khan are chosen as a brand ambassador for MNC quartz
clockmaker "OMEGA" even though when they have models like Cindy Crawford.
•BY ASSOCIATING THEMSELVES WITH INDIAMNCs are associating
themselves with India by talking about India, byexplicitly saying that they are
Indian. M-TV during Independence Day andRepublic daytime make their logo
with Indian tri-colour. Nokia has designeda new cellular phone 5110, with the
India tri-colour and a ringing tone of"Sare Jahan se
achcha".Http://vuaccess.blogspot.com
88. Http://vuaccess.blogspot.com•BY PROMOTING INDIAN SPORTS
TEAMCompanies are promoting Indian sports teams so that they can
associatethemselves with India. With this, they influence Indian mindset. LG
haslaunched a campaign "LG ki Dua, all the best". ITC is promoting Indiancricket
team for years; during world cup they have launched a campaign"Jeeta hai jitega
apna Hindustan India India India". Similarly, Whirlpool hasalso launched a
campaign during world cup. •BY TALKING ABOUT A NORMAL
INDIANCompanies are now talking about normal India. It is a normal tendency
ofan Indian to try to associate him/her with the product. If he/she canvisualize
himself/herself with the product, he /she become loyal to it. Thatis why companies
like Daewoo based their advertisements on a normalIndian family. •BY
DEVELOPING RURAL-SPECIFIC PRODUCTSMany companies are developing
rural-specific products. Keeping intoconsideration the requirements, a firm
develops these products. Electroluxis working on a made-for India fridge designed
to serve basic purposes: chilldrinking water, keep cooked food fresh, and to
withstand long power cuts.Http://vuaccess.blogspot.com
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clean. Ruralpeople like the sight of bright colors. COKE, PEPSI and TATA
tradersadvertise their products through paintings.Product StrategiesThe specific
strategies, which can be employed to develop or modify theproducts to targets the
rural market, can be classified as follows:1. Small unit packing: Given the low per
capita income & purchasinghabits of the rural consumers, small unit packages
stand a good chance ofacceptance in rural market. Single serve packets or sachets
are enormouslypopular in India. They allow consumers to buy only what they
need,Http://vuaccess.blogspot.com
92. Projectsformba.blogspot.comexperiment with new products, & conserve cash at
the same time. Thismethod has been tested by products life shampoos, pickles,
biscuits, Vickscough drops in single tablets, tooth paste, etc. Small packing stands
a goodchance of acceptance in rural markets. The advantage is that the price islow
and the rural consumer can easily afford it. Also the Red Label Rs. 3.00pack has
more sales as compared to the large pack. This is because it is veryaffordable for
the lower income group with the deepest market reachmaking easy access to the
end user satisfying him. The small unit packingwill definitely attract a large
number of rural consumers.2. New product designs: Keeping in view the rural life
style themanufacturer and the marketing men can think in terms of new
productdesigns. The rural product usage environment is tough because of
roughhandling, rough roads & frequent power fluctuations. Thus, all
theseenvironmental factors must be considered while developing the
productsmeant for rural audience.Nokia’s 1100 model is a very good example of a
customized model for ruralmarkets. Its design has been modified to protect it
against rough usage inrural environment; it is dust resistant & has a small torch
light in view of thefrequent power cuts in rural India. It is also introduces
messaging in Hindilanguage now, in some of the economically priced models in
order to caterto the semi-urban or rural consumers. This is in real terms, thinking
global& acting local.Http://vuaccess.blogspot.com
93. Projectsformba.blogspot.com3. Sturdy products: Sturdiness of a product is an
important factor forrural consumers. The product should be sturdy enough to stand
roughhandling, transportation & storage. The experience of torch light drybattery
cell manufacturers supports this because the rural consumerspreferred dry battery
cells which are heavier than the lighter ones. Forthem, heavier weight meant that it
has more over and durability.Sturdiness of a product either or appearance is an
important for the ruralconsumers.4. Utility oriented products: The rural consumers
are more concernedwith utility of the product and its appearance Philips India Ltd.
Developedand introduced a low cost medium wave receiver named BAHADUR
duringthe early seventies. Initially the sales were good but declined
subsequently.On investigation it was found that the rural consumer bought radios
notonly for information and news but also for entertainment.5. Brand name: For
identification, the rural consumers do give their ownbrand name on the name of an
item. The fertilizers companies normally usea logo on the fertilizer bags though
fertilizers have to be sold only ongeneric names. A brand name or a logo is very
important for a ruralconsumer for it can be easily remembered. Many a time’s
rural consumersask for peeli tikki in case of conventional and detergent washing
soap.Nirma made a peeli tikki especially for those peeli tikki users who mighthave
Report on to analyze the marketing of consumer products
experienced better cleanliness with the yellow colored bar ascompared to the blue
one although the actual difference is only of theHttp://vuaccess.blogspot.com
94. Projectsformba.blogspot.comcolor. e.g.: Coca-Cola targeted the whole Indian rural
market with thepositioning of “Thanda Matlab Coca-Cola” advertisements
because most ofthe villagers say when wanting a drink refer to it as Thanda……
so Coca-colaused that word.Pricing strategies1. Low cost/ cheap products: This
follows from the product strategy.The price can be kept low by low unit
packaging’s like paisa pack of tea,shampoo sachets, vicks 5 grams tin, etc. this is a
common strategy widelyadopted by many manufacturing and marketing
concerns.2. Refill packs / Reusable packaging: In urban areas most of the
healthdrinks are available. The containers can be put to multipurpose uses.
Suchmeasures can a significant impact in the rural market.For example, the rural
people can efficiently reuse the plastic bottle of hairoil. Similarly the packages of
edible oil, tea, coffee, ghee etc can be reused.Pet jars free with the Hasmukhrai
and Co Tea, Ariel Super Compact.3. Application of value engineering: in food
industry, Soya protein isbeing used instead of milk protein. Milk protein is
expensive while Soyaprotein is cheaper, but the nutrition content of both is the
same. The basicaim is to reduce the value of the product, so that a larger segment
canafford it, thus, expanding the market.Http://vuaccess.blogspot.com
95. Projectsformba.blogspot.com4. Large volume-low margins (Rapid or slow
penetrationstrategy): Marketers have to focus on generating large volumes & not
bigprofit margins on individual products. If they price their product at a
levelwhich can lead to good volumes, then they can still generate good returnson
the capital employed.5. Overall efficiency & passing on benefits to consumers:
For ruralproducts, the strategy should be to cut down the production, distribution
&advertising costs & passing on these benefits to the customers to furtherincrease
the turnover. Most often, it has been observed that advertisinghas less to do with
product sales in the rural areas. If an organization getsthe price point right, then it
can work in rural market.6. Low volume-low price strategy: This strategy of
reducing prices byreducing the package size in order to make it appear more
affordable, isdelivering very good results for a large number of FMCG
productcategories, in the rural markets of India. In categories where
maintainingthe price point is extremely critical, this strategy is delivering very
goodresults.7. Ensuring price compliance: Rural retailers, most of the times,
chargesmore than the MRP. The manufacture has to ensure price complianceeither
through promotional campaigns, as was done by Coca Cola, or byensuring the
availability of products at the retail outlets directly.Http://vuaccess.blogspot.com
96. Projectsformba.blogspot.comPromotion strategiesCustomized promotional media
& messages need to be developed by theorganizations to effectively target the
rural market. The following strategiescan be considered while developing
promotional campaigns for the ruralmarkets: •Think Global Act Local Rural
population is diverse, but the commonalities of their ethos & simple living habits
need to be understood for advertising to succeed. For that, the theme of the
advertisement needs to revolve among universal themes, such as family-love. But
the context, storyline, language & idioms should be such that the rural audience of
different rural market segments can relate to. •Think in Local Idiom This is the
need of the advertising professionals who can think like the rural people. The only
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we can have insights like ‘Thanda matlab Coca Cola’. There should be the use of
language writers who understands the rural & regional pulse better. •Simplicity &
Clarity All promotional messages targeted at rural audience need to be simple &
clear, which can be easily understood, & they should not include any confusing
elements. It is preferable that it has only a few propositions at a time. Bombarding
rural consumers with too much, in less time can easily confuse them & leave them
bewildered.Http://vuaccess.blogspot.com
97. Http://vuaccess.blogspot.comPromotional message should highlight only the
functional values of the product & explains how those values can make the
consumer’s life even better & solve any of his problems. •Narrative Story Style
The promotional message can be delivered in the form of an entertaining story
with a message depicting how the brand delivers “larger good” to the family &
society. The theme of the story line can be about how the product can solve the
problems of the rural consumers. •Choice of Brand Ambassador Brand
Ambassador for the rural markets need to be picked carefully as urban successes
might not get replicated in the rural markets. That is why Govinda in the Mirinda
as boosted the sales of the drink in the rural markets. An organization might spend
a lot of money in hiring a brand ambassador only to find out later that it had little
impact on the rural consumer.Distribution StrategyMany companies view the rural
markets as great opportunity for expandingtheir sales but find distribution as a
major problem. Unfortunately, it isalmost impossible to transplant strategies
which work successfully in urbanmarkets onto rural markets, namely, extensive
retailing and sustained pullgeneration through mass media
advertising.Http://vuaccess.blogspot.com
98. Projectsformba.blogspot.comThe road blocks to reach the rural customers
are:•Lack of adequate transport facilities.•Large distances between villages.•Lack
of roads connecting villages to nearest townships.•Lack of proper retail
outlets•Lack of mass media infrastructure.The marketers were of the opinion that
the villagers would come to nearbytowns and buy the products that they want.
What has been found is that ifwe have to serve the rural consumer we will have to
take our products tohim through the channels that he is using and some innovative
ways ofgetting to him.The following distribution strategies formulated for the
rural category.1. Coverage of villages with 2000 and above population:
Ideally,coverage of villages with up to 2000 and above population could be
thebreak-even point for a distribution setup. By doing so the percentage ofvillages
covered comes to only 10% of all the villages, but the ruralpopulation covered will
be substantial, to the extent of about 40 to 45percent. With a distribution network
in about 55,000 villages, which have apopulation of 2000 persons & above each,
one can cover about 25 croresrural consumers. This strategy is good to begin with
& then subsequently,villages with lesser populations can be
added.Http://vuaccess.blogspot.com
99. Projectsformba.blogspot.com2. Segmentation: the number of villages in India is
huge & it is not viableto contact & serve all villages directly. Therefore,
companies or distributorscan carefully examine the market potential of different
villages & target thevillages that can be served in a financially viable manner
through anorganized distribution effort.3. Use of co-operative societies: There are
over 3 lacks co-operativesocieties operating in rural areas for different purposes
Report on to analyze the marketing of consumer products
conditions.The cost of painting one square foot area is just Rs.10. Retailers
welcomepainting of their shops so that the shop will look better. Walls of
farmhouses, shops and schools are ideal places for painting and the
companyHttp://vuaccess.blogspot.com
111. Projectsformba.blogspot.comneed not have to pay any rent for the same.
The walls have to be painted atleast one or two feet from ground level. It is better
to take permission ofthe owner. Very often the owner takes responsibility for
taking care of thewall painting. Painting to be avoided during election time and
rainy season.The matter should be in the form of pictures, slogans for catching
theattention of people. Companies marketing TV, fans, branded
coffee/tea,toothpaste, pesticides, fertilizers etc. use wall painting as
promotionmedium in rural areas.•Tree boards:These are painted boards of about
two square feet in dimension having thepicture or name or slogan of the product
painted on it. The cost of such apainted board is about Rs.80. These boards are
fixed to the trees on bothsides of the village road at a height of about 10 feet from
ground level.These boards attract the attention of slow moving vehicles like
cycles,bullock carts and tractors and people walking on the road. Considering
thepoor condition of roads, even the buses move at slow speed through
villageroad. Fertilizer and pesticide companies in rural areas extensively use
treeboards. These are low priced promotion items and can be used byconsumer
goods companies too.•Informal/Rural specific mediaHttp://vuaccess.blogspot.com
112. Http://vuaccess.blogspot.comThese media with effective reach and
personalized communication will help in realizing the promotional objectives.
Companies to suit the specific requirements of rural communication are using a
variety of such media effectively and some of the more important media and
methods are given below.•Farm-to-Farm/House-to-House visit: Rural people
prefer face-to-face communication and farm visits facilitate two-way
communication. The advantage is that the sales person can understand the needs
and wants of the rural customer by directly discussing with him and answer his
queries on products and services. Potential customers in the village are identified
and the company’s/distributor’s representative makes farm-to-farm visits and
highlight the benefits of the products. The person carries with him literature in
local language and also samples of products. The person does not sell the product
but only promotes the use of the product. Very often the local dealer also joins the
representative in making farm-to- farm visits. The dealer clarifies the terms and
conditions of sale and also makes independent follow up visits for securing orders.
Example: This approach has been found to be very effective for agricultural
machinery, animal health products and agricultural inputs. Many LIC agents and
companies dealing with high value consumer durables have tried this method with
success in rich rural areas.•Group meeting:Http://vuaccess.blogspot.com
113. Projectsformba.blogspot.comGroup meetings of rural customers as well as
prospects are an importantpart of interpersonal media. The company is able to
pass on the messageregarding benefits of the products to a large number of
customers throughsuch meetings. Group meeting of key customers are conducted
by banks,agricultural inputs and machinery companies in rural areas. The
bankersvisit an identified village, get the village people in a common place
andexplain the various schemes to the villagers. Such meetings could beorganized
Report on to analyze the marketing of consumer products
totalmarket share. This data can be graphically explained with the help of the
following bargraph: Which hair oil u prefers to use? The reaction of people
towards various HAIR OIL brands canbe tabulated in the following
manner:BRANDS PARACHUTE DABUR AMLA DABUR OTHERS
VATIKAPERCENTAGE 37 29 19 15In the survey, it can easily be concluded that
PARACHUTE, the product ofMERICO captures 37%of the total market share.
This is followed by DABURAMLA, the product of DABUR which captures
29%of the total marketHttp://vuaccess.blogspot.com
125. Projectsformba.blogspot.comshare. This is followed by DABUR
VATIKA, another product of DABUR whichcaptures 19%of the market. And
after that, followed by other brands(EXCEPT PARACHUTE, DABUR AMLA,
DABUR VATIKA) captures 15% of themarket share.This data can be graphically
explained with the help of the following bargraph: Which biscuits u prefers to
use? The reaction of people towards various BISCUITS brands can be tabulatedin
the following manner:BRANDS MARIE GOLD GOOD DAY PARLE G
OTHERSPERCENTAGE 24 21 38 17In the survey, it can easily be concluded
that PARLE-G, the product of PARLE, holds a major market share of 38%.This is
followed by MARIE GOLD, aproduct of BRITANNIA which holds 24%of the
market share. After that,GOOD DAY, another product of BRITANNIA, holds
21%of the market share.This is followed by other brands (EXCEPT MARIE
GOLD, GOOD DAY, PARLE-G) which hold a market share of 17%.This data
can be graphically explained with the help of the following bargraph: Which
detergent u prefers to use?The reaction of people towards various DETERGENT
brands can betabulated in the following manner:Http://vuaccess.blogspot.com
126. Projectsformba.blogspot.comBRANDS SURF RIN TIDE
OTHERSPERCENTAGE 27 35 22 16In the survey, it could be easily concluded
that RIN, the product of HULcaptures 35%of the total market share. This is
followed by SURF, theproduct of HUL which has a market share of 27%.This is
followed by TIDE,the product of PROCTER & GAMBLE which has a market
share of 27%.This isfinally followed by other brands (EXCEPT
SURF,RIN,TIDE)which captures16%of the market share.This data can be
graphically explained with the help of the following bargraph: Which shampoo u
prefers to use?The reaction of people towards various SHAMPOO brands can be
tabulatedin the following manner:BRANDS CLINIC PLUS SUNSILK HEAD &
OTHERS SHOULDERSPERCENTAGE 33 25 28 14In the survey, it can easily
be concluded that CLINIC PLUS, the product ofHUL, captures the major portion
of the market with a market share of33%.This is followed by HEAD &
SHOULDERS, the product of PROCTER&GAMBLE which holds 28%of the
market share. This is followed bySUNSILK, the product of HUL which holds
25%of the market share. Finallyfollowed by other brands (EXCEPT CLINIC
PLUS, SUNSILK, HEAD &SHOULDERS) with a market share of
14%.Http://vuaccess.blogspot.com
127. Projectsformba.blogspot.comThis data can be graphically explained with
the help of the following bargraph: Which pack u prefer to use?In order to
determine the income pattern of the consumers, it wasnecessary for the researcher
to distribute the consumers on the basis oftheir demand for the various packs of
SHAMPOO brands available in themarket. However, the reaction of people
Report on to analyze the marketing of consumer products
biscuits u prefers to use? Good day Marie gold Parle G Others •Which detergent u
prefers to use? Surf Rin Tide OthersHttp://vuaccess.blogspot.com
139. Http://vuaccess.blogspot.com•Which shampoo u prefers to use? Sunsilk
Head and shoulders Clinic plus Others •Which pack u prefers to use? Sachet Small
pack Medium pack •Which Television you prefer to use? Onida Beltek Crown
Others •Which bicycle you prefer to use? Avon Atlas Hero Others •Which
refrigerator you prefer to use? Videocon Kelvinator Godrej Others •Which wrist
watch you prefer to use? Titan Hmt Maxima OthersHttp://vuaccess.blogspot.com
140. Http://vuaccess.blogspot.com•Which fan you prefer to use? Local fans
Khaitan Polar CromptonHttp://vuaccess.blogspot.com
141. Http://vuaccess.blogspot.comBIBLIOGRAPHY •UTTAR PRADESH
DEVELOPMENT AUTHORITY •http://business.mapsofindia.com/rural-
economy/state-development/ marketing.html
•http://www.ibef.org/economy/ruralmarket.aspx
•http://en.wikipedia.org/wiki/Rural_markets
•http://www.indianmba.com/Faculty_Column/FC213/fc213.html
•http://www.123eng.com/forum/viewtopic.php?p=76117
•http://ezinearticles.com/?Challenges-In-Rural-Marketing&id=1092597
•http://www.infibeam.com/Books/info/t-p-gopalaswamy/rural- marketing-
environment-problems-strategies/9788125916178.html
•http://www.naukrihub.com/india/fmcg/
•http://www.naukrihub.com/india/fmcg/overview/
•http://www.naukrihub.com/india/fmcg/consumer-
class/income/Http://vuaccess.blogspot.com
142. Http://vuaccess.blogspot.com•Aithal K Rajesh, importance &growth of
rural markets •Purba basu,research on living style of rural consumers
•http://toostep.com/idea/challenges-in-rural-marketing
•http://images.google.co.in/images? hl=en&rlz=1W1ADSA_en&q=%20rural
%20marketing %20indi a & revid=199480125 8&resnum=0&um=1&ie=UTF-
8&sa=N&tab=wi •http://www.articlesbase.com/marketing-articles/rural-
marketing-a-critical-review-1102352.html
•http://www.marketresearch.com/product/display.asp? productid=2106282
•http://www.google.co.in/search? hl=e n & rlz=1W1ADSA_e
nHttp://vuaccess.blogspot.com