Product Strategy

Unit 4
Spike in usage of credit/ debit cards and e-
Wallets
Small traders and the unorganised retailing
segment impacted
Segments such as jewellery and luxury goods
have seen a higher impact than others
Lower footfalls in shopping malls is a passing
phase
Economy will normalise in a few quarters
Marketplace to become more transparent and
structured
Voice over Long Term Evolution (VoLTE)
features:
Better sounding voice calls
Simultaneous voice call and data usage
No increase in voice charges
3 times more capacity than 3G network
and 6 times more capacity than 2G
network
HD Calling -Calls are in HD only if the
parties engaged in a phone call are both
on Reliances Jio network
Richard Branson of India
Fundamental Marketing Precept- Brand can
succeed in a narrowly defined space
Virgin- Highly innovative Challenger Brand,
operating in Finance to cellular services, from
travel to healthcare.
Baba Ramdeo- Captured markets of Colgate-
Palmolive, Nestle, HUL, P&G, Dabur, Marico,
Britannia and Emami).
Ramdev/Patanjali master-brand ketchups,
choco-flakes, skin-care products, shaving gels,
detergents, atta, fruit juices, Ayurvedic
remedies, ghee etc.
Getting into Jeans business
 Patanjali grew by a factor of over 10X in the past
four years alone (ITC -9x in 10 years).
Patajali expects its business to grow by another
eye-popping 2.5X.
The company claims that by 2020 it will hit a
turnover of Rs 20,000 crore and, by 2025, Rs
100,000 crore (compare this with Hindustan
Unilever which, having been a leader in the Indian
market for the past eight decades, has now
touched a turnover of Rs 34,000 crore.)

Amma Meals
Amma packaged mineral water
Amma Salt- Double Fortified Salt, Refined Free
Flow Iodised Salt and Low Sodium Salt
Amma Cement- Rs. 190 a bag of 50 kg
Amma farm-fresh vegetables- Half the price (sold
within a few hours)
Amma master health check ups- one fifth price
Comprehensive health insurance-1,016
procedures, 113 follow up procedures and 23
diagnostic procedures.
Amma Theatre
Amma Pharmacy
Rural Products
Amma Gyms- Attached to a park with 10 Lakh
investment
Micro loans, health insurance, special amma
camps
Freebies- Amma seeds, Amma call centre,
Amma Baby care kit, laptops, grinder, mixie,
potable water, mobiles to SHG
Avoid Comfort Zone-Selling urban products in
rural area
Rural consumers- Aclonal, amoebic,
marketers baby
Avoid Ironbox Syndrome- 236 sambar
varieties
Mass MR will not work
value driven and not volume driven-Brand
/Service equity
Not a second rung opportunity (primary
market)
Rural marketing is not punishment transfer;
Dont depute underperforming managers
Focus on selling and distribution efficiency
Use edutainment for campaigns
Finally,
Rural is not a Market, its an Eco System
Do not recklessly harvest rural market
Examine all top-down approach
Get sensitive
Urban market successes could be rural
market failures
Philips- Larger and louder Music System, free
power radio (Rs.995/-)
Union Carbide- Heavy brass torches Jeevan
Sathi
Texla- B / W TV cabinets altered
LG Electronics- Semi automatic washing machine
with double capacity and memory back up
Ushas heavy duty black fans
Cadbury Ca chocolate colored biscuits
Observe and Listen to the rural consumers-
Godrej (Islampur), Amrutanjan, Jolly Startek TV
(14)
Try innovating- Cadbury chocolates
Max Gas LPG cylinder- Auto cut off regulator in
case of leakage, special steel braided hose
pipe, wider base of cylinder for stability, double
sealed cylinder for correct weigh
Mahindra Maxx- Mahindra (Std for value
seekers, TX for cab drivers and Festiva for
image seekers)
Focus on : Product features service
quality price & performance relationship
LG Sampoorna TV
LG integrated the technology to give better picture
and sound quality to overcome poor signal quality
Apt Brand name Sampoornaand on screen
displays in the vernacular languages like Hindi,
Tamil and Bengali.
TATADEEP Solar Lanterns-Portable lighting
systems.
Provide high quality light output through CFL
Oorja stove (by First Energy)- It is a biomass based
cooking solution (fuel pellets made from ground nut
shells, peanuts husk and other agricultural waste).
 Product Levels

CORE BENEFIT

BASIC PRODUCT

EXPECTED PRODUCT

AUGMENTED PRODUCT

POTENTIAL PRODUCT
Product Level Characteristics Example Rural Vs Urban

Core Benefit Fundamental Entertainment Same

benefit/ services
Basic Product Benefit/service Television Set Same
into tangibles
Expected Attributes & Digital sound, Appearance of
Product conditions flat screen differences in
buyers normally expectations
expect
Augmented Exceeding Battery Pleasant
Product customer Operated TV surprise for rural
expectations customer
Potential Encompassing Jolly Startek TV Uniquely rural
Product all value
augmentations proposition
&
transformations
 Rank Rural Product Urban Product Rural HH
Consumption
grams / month

1 Toilet Soap Toilet Soap 268

2 Washing Powder Biscuits 950

3 Packaged Tea Washing Powder 268

4 Biscuits Packaged Tea 302

5 Detergent Cake Detergent Cake 893

Source: A.C Nielsen Retail Audit, & ORG- MARG Retail Consumer
Panel
 NCAER has classified durables into three categories

Group One( <Rs. 1000)

Group Two( Rs.1000- 6000)

Group Three( >6000)

In group one the growth is as high as 75 percent

Electrical goods show the highest urban- rural disparity,

why ?
Television( B & W) 195/1000HH in rural Vs 490/1000HH in
urban
Colour TVs 48/1000 HH in rural Vs 304/1000HH in urban
 Associated with affordability - Convenience - Consumer
recognition & product protection
Choose the right packaging material, size, convenience
and aesthetics
Example: Operation Bharat(Rs.5,10,15 and 20/-)
containing pepsodent toothpaste, clinic plus shampoo,
Fair and Lovely and Ponds Dreamflower powder
It targeted 65,ooo villages in 1997, 1.5 Lakh villages
by 2005
Packaging Aesthetics- Tesla B.W Tv
Colours- Lal dant manjan, Eveready, Lifebuoy
Numbers- 555 detergent cake, 502 pataka
chai
Visuals- Ghari detergent, Rath vanaspati,
Wagh Bakri tea, 3 Roses tea, Katchua chaap
mosquito coil
 Look-alikes

Spell-alikes &

Duplicates
Prices range from MRP

to 60 % of MRP
Margins range from 60

% to 300 %
Legal action Raids by P&G on manufacturers of vicks
vaporub and cough drops (Vikas cough rub, Venus cough
drops ad Super plus 5 mentol drop)
Awareness p ogrammes Coco Cola has 48 consumer
response coordinators to redress overcharging and
spurious bottling issues.
Large route salesmen with ears on the ground
New Package Development Dabur moved from blow
moulded container to a premium 4 colour shrink sleeve
packaging (grainy texture and water bubbles)
Sales growth- 12 % increase
Tractor servicing-
Almost all tractor manufacturers and component
supplier organize regular service camps. Free
check-up and charts on maintenance and
care of the engine.
Spares like oil filters and engine oil and
Discounted prices.
Attend to warranty complaints

Videocon-Employs 1800 engineer and

mechanics who visit the village twice a week
Exide battery servicing-Battery replacement
constitutes 30% of total annual battery
demand
Ustad suppies replacement batteries at less
cost
Rs.4o million rural initiative (Long life,
aggressive pricing)- Ustads made dealers,
commission for servicing faulty batteries
Internal & external factors
Selecting pricing methods
Pricing adaptations
Low price points Simple packaging utility
around packaging material
Highlighting value
Product sharing services, Example: Tractors
Product Bundle pricing, Example: HUL
Operation Bharat
Free gifts may sometimes not work in rural
areas
Special event pricing- Hero Honda Rs. 500
campaign
Large number of small markets

Dispersed population and trade

Poor connectivity

Low availability of suitable dealers

Inadequate banking/ credit facilities

Poor product display and visibility

Poor communication of offers and schemes

Level Partner Location
1 Company Depot/ C & National/ State level
FA
2 Distributor/ Van District level
Operator/ Super
Stockist/ Rural
Distributor
3 Sub Distributor/ retail Tehsil HQ, towns and
Stockist/ sub large villages
stockist/star seller

4 Wholesaler Feeder towns, large

villages, haats

5 Retailer Villages, haats

Hub and Spoke Model, Example: Coca Cola
Use of Affinity groups, Example: Project Shakti
Haat Activation, Example: Colgate
Syndicated distribution, Example: Cavin Care
& Amrutanjan
Use of marketing co-operatives, Example:
Warna Bazaar in Rural Areas
Mobile traders, Example: FMCG companies
 Conventional Non- Conventional Personalised

Television Haat and Mela Direct mailer

Radio Folk Media( puppet and POS (demonstration,

magic show) leaflet)

Press Video Van Word of mouth

Cinema Mandi Interpersonal

communication

Outdoor: Wall Painting, Animator

Hoarding
 Melas
1. 25,000 melas
2. Companies can concentrate
on the top 100 melas
3. Pushkar Mela in Rajasthan
4. Organised by the state
veterinary department
5. Product sales, promotion,
demonstration and database
generation
6. Cultural activities and rural
sports
Haat
1. Periodic markets located in larger
villages(> 40,000)
2. 10 50 villages are serviced
3. Sunday markets are most
popular
4. Average number of outlets is 315
and average daily sales is about
Rs 2 lakhs
5. Traders participate in at least 4
haats
6. 81 percent of the visitors are
repeat customers
Advertising

Sales promotions coupons, contests,

demonstrations and sampling, Example: Tata

Shaktee Haat Hungama
Direct marketing, Example: Videocon

Publicity, Example: Project Shakti and AP Online

Using a direct selling through a sales force,

Example: Swasthya Chetna for Lifebouy

Push strategy sales force and trade

promotion
Pull strategy advertising and consumer

promotion