Rural marketing-ppt-2 Presentation Transcript

1.
2. RURAL MARKETING
3. What is Rural Government agencies like I RDA (Insurance Regulatory And
Development Agency and NCAER ( National Council for applied Economic Research)
define Rural as villages with a population <5000 with 75% male population engaged In
agriculture etc Concept of Rural from the perspective of marketing has Indeed been
dynamic.- gradually changed over the times Was not India a so called Village/Rural for
the world a couple of decades back Census Towns are actually rural areas but satisfy The
following criteria Minimum Population>=5000 75% of the mail population engaged in
Non agri activity RB1 Location with population up to 10000 Considered Rural Semi
Urban 10000 to 100000 NABARD All locations upto a population of 10000 Will be
considered Rural Sahara All locations having shops/establishments Upto 10000 (not
population related) are Treated as Rural LG Elect. The rural and semi urban area is
defined As all cities other than major metros NABARD National Bank for Agriculture &
Rural Dev
4. What is Rural Marketing Developing of the market in the area as defined as Rural
Hence it could be aptly said that it encompasses the Activities such as developing the
process to meet this Objective Right product at the right price to the right people at the
right time. Exchange between rural and Urban is a Factor . Could be Urban to Rural:
Rural to Urban, Rural to Rural
5. Reasons for Going Rural Size of the market Largely Untapped Too crowded Urban
Market Income on the rise/disposable income Income from other than agriculture Income
flow from urban /abroad Better exposure - media Great success stories HLL 50% Colgate
50% LG 50% Asian Paints 60% Dabur 40% Videocon 40% Cadburys 25% Hero Honda
40%
6. Points to Note with Regard to Rural Markets Extremely Diverse Market Villages
Size, Population, Spread, Income Literacy levels , awareness level, languages Urban
Market scope and saturation Flow of funds from Urban National /International
Literacy levels on the rise Media Penetration
7. Encouraging Indicators/Initiatives for Rural Market Growth Scientific methods
major impetus to Production of food grains Export on the rise Increase in agriculture
and handicrafts Initiatives taken by banks for more branches and Kisan credit card to buy
seeds, fertilizers, consumer goods on installment basis Reputed Companies helping in
changing lifestyles Levers Britania ,Dabur, LG, Honda,Videocon Media creating an
impact-creating awareness levels Government Policies White Revolution Milk
products Yellow Revolution (poultry and edible oils) Blue Revolution Aqua culture
Employment Schemes JRY(Jawahar Rojgar Yojna, PMRY,Small Industries Training,
Ruiral Electrification, Spend on Health and Sanitation, Medical and Health, Primary
Education, Credit card for farmers Waiver of Loans Initiatives by leading organization in
spreading awareness Hindustan Levels Shakti, ITC Reliance etc
8. Move to Rural Market encouraging Data Rural India buys Soft Drinks approx 45%
of all soft drinks Almost 50% motor cycles Approx 55% of cigarettes Half the total
market for TV,Fans, pressure cooker, bicycles Washing soap, tea, lades, salt,
toothpowder Coca Cola is growing over 35% in Rural areas compared to Over 22 % in

Urban According to Hasna Research , a market research farm that Has published a Guide
to Indian Markets 2006 Consumer durables in Indian Villages risen sharply TV Sales up
by 200% Motorcycle by 77% There are 3000 households in rural area that earn > 50
lakhs We have come some way ahead but there is a long way to go
9. PROBLEMS IN RURAL MARKETING Low per capita income Low disposable
income Inadequate fixed income (daily wages) Majority depends on Agricultural
Income Acute dependence on monsoon Consumption linked to harvest Infrastructure
problems Roads, power Low awareness Communication- difficult & expensive Too
many languages Geographic Spread Digging for Diamond
10. Urban & Rural Markets Per capita Income Disposable Income Literacy levels
Infrastructure Communication Geographical Spread Customer has many choices Key
Differences
11. Profile of the Rural Consumer
12. Profile of the Rural Consumer >Low Literacy Level >Low Income Level >Massive
Geographic Spread Urban population concentrated 3200 cities town Rural scattered over
630000 villages >Reference Group Health Workers Doctors Teachers Panchayat
Members Rural Bank Managers District Managers Occupation Principal Farming
Trading Handicrafts Cattle & Poultry Farming >Media Habits Fond of music T.V Radio
Video Films Generally they have a lot of reservation/inhibition rigid in their behaviour
13. RURAL CONSUMER CLASS The Affluent Class The Middle Class The Poor
RURAL CONSUMER BEHAVIOR How does an individual decide to spread his
Available resources (time,money effort) on Consumption-related products. That is what
they buy why they buy when they buy where they buy it how often they buy it how often
they use it Poor Aspirant Climbers Well Off Very Rich
14. Simple Model of Rural Consumer Behaviour Need Recognition Pre Purchase Search
Evaluation of Alternatives Purchase Decision Post purchase behaviour
15. Factors that Influence Rural Behaviour Stimuli Inputs to any senses Products Package
Commercials Brand image Reference Information cues about the characteristics of the
product Perception Depends on Exposure Interpretation Eg IFB had not adequately
Educated farmers about the Washing machine -they thought It was a churn for making
large quantities of lassi (prosperous village of Punjab) Iodex muscular pain Reliever
used on animals After hard days work in MP Godrej hair dye on Buffaloes To make them
look better in Village haats in Raichur Attitude >Consumer belief Consumer feelings
16. Key Challenges 4A Awareness Affordability Availability Acceptability 4 Ps 4 As
Promotion Awareness Price Affordable Product Acceptable Available Place
17. RURAL MARKET RESEARCH
18. Marketing Research is a formalized means of obtaining Information to be used in
making marketing decisions Market research Issue Information Required to address
Design Method of Collecting Information Manage The data collection process Analyze
The results Communicate Finding and implication
19. SOURCES FOR CONDUCTING RURAL MARKET RESEARCH Primary Sources
Retail shops/STD booths Tea Stalls Playgrounds/schools Chaupals (meeting point
old/middle aged/ influential) Haats & Melas Influence Group Secondary Sources
Government website www.censusindia.com www.indiastat.com www agroindia.com
Private bodies (market research advertising agencies Indian Market Research Bureau
Thompson Rural Index Guide to Rural Markets Publications

20. Tool Kits Used for Rural Market Research

21. Tool Kits Used for Rural Market Research Faces Color Wheel Same Color
Different shades Different Color Happy Sad Number of Coins Ladder Playing
Cards
22. POINTS TO REMEMBER FOR RURAL MARKETING RESEARCH
23. Build Rapport - *** Greet need to be informal Speak local language Do not jump to
survey speak of other matters of interest Gradually lead to the objective of the interview
Explain the benefit of the survey how it will gain Interviewer should be aware of the
rural area Never make the respondent uneasy if he offers tea do not refuse Remember

24. RURAL MARKET SEGMENTATION TARGETING & POSITIONING

25. SEGMENTATION Very Varied hence proper segmentation very essential
Geographic : Region North, East, West and South Village size Climate Demographic Age
Family Size Gender Income,Occupation,Education,Caste Psychographics (consists of
psychological: sociology: anthropological) Lifestyle Rigid ,changing attitude, urban
influence Personality Authoritarian, Ambitious Behavioral Occasions Regular, special
occasion Benefits User status regular user, first time user, non user Usage rate Light,
medium, heavy Loyalty None, medium, strong Attitude to ) positive, negative, hostile
Product ) Different variables could be used.. multilevel segmentation
26. transistor/radio wristwatch,pressure cooker,cassette recorder Households owning
any/all of the foll 20.20% 61.40% Households other than those classified above The
Destitutes/Poor (not those mentioned in above 3 categories) bicycle,electric fans, electric
iron with other durab 44.60% 26.00% Households owning any/all of the foll The
Aspirants (not those mentioned in above 2 categories) audio equip, B/W TV,geyser with
other durables VCR/VCP,mixer grinder sewing m/c 22.40% 8.30% Households owning
any/all of the foll The Climbers color TV with other durable (No car/jeep)
A.C/Motorcycle/scooter/washing m/c 5.80% 2.70% Household owning any/all of the foll.
The Well Off personal cars/jeep with other products 5.60% 1.60% Households owning
The Affluent/Very Rich 2006=2007 1995-96 Rural Consumer Classification Class
Source - NCAER
27. DEVELOP THE PROFILE Select the Target Market Evaluate the Market Evaluate
the Segment size growth rate profitability accessible compatible with firms resources &
capabilities Easy Hard Low High Ease of Implementation Value to Rural Customer
28. TARGETING >Select Target Segment >Formulate Market a marketing strategy for
the target market POSITIONING One shoe fits all !!!! . Everything for Everyone !!!
It is Something for Someone How to Position USP of the product uniqueness of the
product Special needs either address partially/ unaddressed Noticeable gap in the
products available Positioning Concept Study the possible motives of the rural customer
Then figure out how to appeal to them (USP, Price Quality Uses, Class, Culture etc
Select & Develop the Concept Bridge gap between the product and the target market.
Communicate the Concept Advertise and Reach (Media) Offer Product After STP
(Segmentation, Targeting and Positioning) Post Sales Feedback & After Sales Service
29. RURAL MARKETING STRATEGY
30. ENTERINING THE RURAL MARKET New Entrant Company starts Rural Market
first & then ventures in Urban Market (eg Cavin Kare Chik & Meera Shampoo) MidEntrant Company starts Rural Market after success in Urban Market (eg HLL, LG) Late -

Entrant Company starts Rural Market after success in Urban Market for long (eg
Cadbury) R G A Retain Grow Add Purpose the market
31. RURAL MARKETING STRATEGY P L A N N I N G E X E C U T I O N F E E D
B A C K Profile the Rural Market Profile the Consumer Market Behaviour & MR
Segmentation Targeting Positioning -------------------------------------------------------------------------------- --------------------------------------------------------------------------------- Rural
Product Rural Pricing Rural Distribution Rural Sales Force Management Rural
Communication Monitor the Rural Strategy Feedback & Control 1 2 3
32. DEVELOPMENTAL MARKETING Developmental marketing is a process through
which awareness is created >could be demonstration >could be presentation >Free
samples >could be through up eg tie up with Bank tie up with Petrol/Diesel pumps
(Hyndai did with IOC and PNB and SBI subsidiaries >30% sale of Hyndai from
Rural/Semi Urban areas) Awareness Trial Purchase Post-Purchase Satisfaction Colgate
program Operation Jagruti Switch from Charcoal to Colgate tooth powder HLL - Free
samples of Lifebuoy Cavin Kare Free sample of Chik Champoo Marico Industries
Parachute coconut oil Sudhata ki pehchan smell to differentiate between real and
spurious
33. RURAL PRODUCT RURAL PRICE RURAL DISTRIBUTION RURAL SALES
FORCE MANAGEMENT RURAL COMMUNICATION
34. Rural Product Product to be marketed with the requirements of the Rural Consumer
should not be an extension of urban offerings ( Philips launched Free Power Radio does
not require Battery/electricity you wind it with a lever and radio runs For approximately
30 min. Classification Of Rural Products FMCG (HLL, Dabur, Marico,
Colgate=Palmolive Coke, Pepsi) Consumer Durables TV ,Fridge, Fan, Presssure Cooker,
Cycle, Two wheelers, Sewing machines, watch, mixer grinder, radio, music system, Fans,
Washing machines (Philips, LG, Videocon, Onida ) Services Telecom, Banking, Health
care ,Insurance (Airtel, BSNL, SBI, PNB,Dena bank,) Agri-inputs Seeds, pesticides,
tractors (Rallis India, Bayer,) Product Life Cycle (PLC) Launch Take Off Maturity
Decline
35. Points to note Rural Products Easy to Use After sales support Conveniently packedsuccess of Sachets Product literature to be simple Have a logo easy to identify eg
Thums Up Rural Packaging Packaging material plastics, poly packs, unbreakable
materials Looks - attractive colors (like all tea companies) Size and convenience- small is
beautiful Rural Branding 1. Brand Name 2 Create Brand Identity 3 Enhance Recognition
4 Build a Brand Image 5 Countering Spurious brands Look alike, Spell alike, Duplicates
Enhancing Brand Strategies with Social Perspective Soaps for Hygiene Cooking gas for
environment Creating need by more awareness Partnering with a long term perspective
requires total belief and Commitment - to the people, to the processes, to their own
employee. Need to work for a cause ITC, Hindustan Petroleum, HLL , Colgate
Palmolive , Several Banks are a few such examples
36. RURAL PRICE Pricing In Rural Market plays a key role in the success of a product
RURAL PRICING OBJECTIVES Have a long run perspective Idea is to penetrate first
Increase Volume Make using the product a habit Volumes to take care of the Margins
Keep eye on Competition Price The following may help in addressing the issue Low cost
less amount (small packages- sachets) Simple but colorful packaging eg. success of
biscuits Refill packs Value engineering eg soya protein in place of milk protein

METHODS OF PRICING Cost Plus Pricing = cost of product +distribution +profit

Value Pricing (VFM-Value for Money) High Benefit Power Price eg Re 1, Rs 2, 3, 5,10
Penetration Price Introduce at low and hike price after success Differential Pricing
Different price for different market Price Gap Comp prices range
37. RURAL DISTRIBUTION Physical Distribution Channel of Distribution
Transportation Warehousing Communication PHYSICAL DISTRIBUTION
Transportation Railways, Roads ,Waterways, Animals Communication ITC using
internet, Mobile users by fisherman Warehousing (Three Tier Rural Warehousing Set
Up) Central/State Warehousing Cooperatives Rural Godowns
38. WHY CHANNELS OF DISTRIBUTION Geographical Spread Dealers are few
hence required to bank on a number of resources Financial Viability Inadequate Bank and
Credit Facilities TO ADDRESS THE ABOVE CHALLENGES Rely on Private Village
Shops Supply Chain Stores Rural Super Market Small companies tie up with large
companies Leverage/Syndicate Distribution network of Marico to sell Tide by P&G
Satellite Distribution Whole- Saler Town D D D D SD SD SD SD SD SD SD SD SD SD
SD SD SD SD SD SD SD R D-dealer SD- Sub Dealer R-Retailer
39. PLANNING FOR SALES FORCE MANAGEMENT SET THE PERSONAL
SELLING OBJECTIVES FORMULATE THE SALES POLICIES STRUCTURE THE
SALES FORCE SIZE OF THE SALES FORCE ASSIGNING SALES TARGETS
CREATING SALES FORCE- SELECT, RECRUIT, TRAIN SALES FORCE
COMPENSATION, MOTIVATION, SUPERVISION SALES COMMUNICATION &
REPORTING SALES COORDINATION/SALES CONTROL
40. TRAITS OF A RURAL SALESPERSON Hardworking Have Empathy Enthusiastic
Perseverance Knowledge Attitude Skills Willingness to work in Rural Areas Adopting to
cultural differences Down to earth approach Fluent in local language Developmental
approach Create not only Communicate Common to both Urban & Rural Sales person
Additional traits for making it Big in Rural Areas
41. The Success of Organizations depends on lot on the Sales Force They are the face of
the Organization the Ambassador They are the ones who have direct interaction with
The Potential Consumer/Customer The Users The Dealers The Distributors The Retailers
They are a major link to the chain and establish the link They are the ones who help in
building Trust They need to break the rigid ideas and preconceived notions
42. RURAL COMMUNICATION Effective Communication goes a long way in
establishing the right Messages and thereby more interaction with Potential Customers
Communication, however, is not complete if there is no feedback It is very important to
re enforce messages in Rural areas Factors Affecting Rural Communication Literacy
level Media Habits Traditional approach High resistance more so initially Lavish at
occasions (eg Marriage) Purchasing power also depending on weather- the crops
Inequitable distribution of wealth Too many languages Culture
43. RURAL MEDIA Mass Media (Conventional) Traditional Media (Non Conventional)
T.V /Cable network Satellite Channels Radio Print Cinema/ Theatre Word of Mouth
Video on Wheels Puppet Shows Folk Theatre/Opera Demonstration Haats and Mela Wall
painting Post card and posters Booklets/Calendar Advantages >Excellent Reach Less
expensive ,wider coverage Disadvantages At times unnecessary coverage No customized
messages Companies using this medium Levers, Onida, Videocon Mahindra Tractors,
Eveready Advantages >High involvement High Interest Localized administered at low

cost Disadvantages Coverage Repeat /Re enforcement Skill of performer Companies

using this medium Bajaj, Levers, HUL, ITC
44. You are the Marketing Director of A Company dealing in Consumer Durables (TV,
Fridge, Washing Machine Music System, Microwave etc). Your business has been
growing steadily in the Urban Market however, you are aware that the Business will
grow manifold if you also cater to the Rural market. (Present growth rate has been 8%.
You are targeting a growth of 14%) Take into account the following The Target
Audience The Product proposition Distribution Strategies and Sales Forecast Pricing
Strategies Promotional Strategies How the above strategies will help in achieving the
Business Objectives. While making the presentation you need to be clear on Why you
chose to launch the particular product Why did you chose the particular location
(Opportunity Assessment)