RURAL MARKETING

PRESENTED BY –
 VAIBHAV KOTHARE 39
 VINIT SANZGIRI 87
 The Number Game of rural india
 12.2% of the world's consumers live in India

 Rural households form 72% of the total households

 This puts the rural market at roughly 720 million
customers

 Total income in rural India
 Contributes about 43% of total national income
 Is expected to increase from around US$220 billion in 2004-
2005 to US$425 billion by 2010-2011, a CAGR of 12%


 The new investments are expected to enhance wireless

coverage in the countryside from just 30 percent at
present to 85 percent in 2011
 The durables & automobile sectors contribute US$2.5
billion each, and agri-inputs (including tractors) about
US$1 billion

 Some 42 million rural households use banking services
against 27 million urban households

 There are 41 million Kisan credit cardholders against
some 22 million card users in urban markets

 Be it automobile, telecom, insurance, retail, real estate
or banking, the future drivers of growth are rural

 No marketer can afford to ignore the possibilities of
rural India
 The FMCG the market has grown at a robust rate
of 23%

 As durables shrink in urban India, the rural
market is witnessing a 15% growth rate

 Some 60% of the durables market lies in rural
India

 Telecom in rural India is growing at 31%

 It depends on the product, just the sheer
population numbers don't mean very much
from a marketing point of view
 In telecom, service providers are growing rapidly in
villages. That's where the growth in what is now the
world's fastest growing mobile market lies


 According to industry estimates, 70% of all new

subscribers would be coming from rural areas


 According to a latest study on telecom sector called,

“Emerging Rural Mobile Market in India”, the mobile
market in rural India has significant potential with
number of subscribers anticipated to grow at a CAGR
of around 32% during 2009 to 2012

Source: RNCOS
 Mobile device manufacturers are also tailoring their products
to this market

 Nokia had earlier launched a basic handset with a torch (large
parts of rural India don't have electricity) and an alarm
clock

 In December 2008, it went one step further with the launch of
Nokia Life Tools

 Nokia Life Tools is a range of agriculture, education and
entertainment services designed especially for the
consumers in small towns and rural areas of emerging
markets

 Aimed at providing timely and relevant information
customized to the user's location and personal preferences
directly on their mobile devices, Nokia Life Tools was the
first step towards bridging the digital divide
 

MICROMAX



NOTHING LIKE ANYTHING

 ABOUT MICROMAX
 Micromax was founded in 1991 by Rajesh
Agarwal


 Micromax in its original avatar was a distributor

of computer hardwares


 In 1998, three more people Sumit Arora, Rahul

Sharma and Vikas Jain joined Micromax as co-
founders


 The company branched out from a mere

distributor to a marketer of
telecommunication equipments
 2008 – A BREAKTHROUGH
 In 2008 that Micromax ventured into the mobile
handset market


 The brand wanted to create a base before taking

on the large players


 Adopted a go-to- market strategy



 Micromax concentrated on the rural market



 It was a different move altogether



 As most of the marketers tend to concentrate on

the urban markets then move to the rural
markets

LAUNCH OF Micromax X1 i
Micromax launched its first phone in the rural market with a very unique USP
 -30 days battery standby time


 By increasing the size of the battery to 1800 mAh, Micromax was able to tout
a standby time of 30 days for the X1i


 The brand was launched from a consumer insight that



 Most of the rural households do not get enough electricity to recharge

phones on a daily basis


 They got the inspiration from a group of villagers standing in the

afternoon heat waiting to get their cell phones charged from a car
battery that was mounted on a bicycle


 Hence a phone with a 30 day battery standby would be a worthwhile

differentiation


 The first product was a big success, Micromax X1i priced at Rs 2150 was
lapped up by rural market
 LATCHING ON THE OPPORTUNITY
 The success of X1i enthused the company to go
aggressively into the market


 But tapping the rural market is not an easy task



 There was severe logistics pressure in servicing these

markets


 First thing that Micromax did was to leverage the

already developed powerful distribution network they
possessed


 According to a report in Forbes India ( March 5,2010),

Micromax created a distribution network comprising
of,
 34 super distributors
 450 distributors
 Around 55,000 retailers
 Dealing with the dealers
 One of the highlight of their distribution strategy,
 Micromax managed to make these dealers pay in advance
by offering them more margins


 The most difficult part in managing distribution is the

payment collection part


 According to the news report, Micromax managed this

hurdle through this strategy of more margins for
advance payment


 It is not a new strategy to offer such kind of discounts

for advance payments (cash discounts), but to make a
retailer accept such an offer is indeed a remarkable
feat (if the Forbes report is true)
 Nokia usually gives a channel margin of 2 percent,
of which 1 percent is usually given away as
discounts


 The remaining 1 percent cannot sustain any

business


 So Micromax decided to give a 5 percent

commission to each of its distribution chain
partners which included,


 34 super distributors
 450 distributors
 Around 55,000 retailers
 But there was a catch,


 It would not offer any credit



 Instead distributors are expected to complete an

online bank transfer to Micromax before getting
any of its phones to sell further on


 As a result they were not plagued with dead

inventory


 The retailer only picks up what he sees demand for



 And as their money is involved, (distribution)

partners tend to work harder
 PRICING AT MICROMAX
 Micromax specialized in entry-level and mid-
segment handsets which are suitable for rural
markets


 Price ranged between Rs1,800 & Rs2,400 when

they started selling the devices in 2008


 Confining itself to small towns and specifically

focusing on rural areas in the first 12-18 months


 Although all Micromax products were towards the

lower end of the pricing spectrum, the brand was
focusing on adding more features at a reasonable
price . The focus was more on value than price.
 COST + INNOVATION = MICROMAX
 Micromax was careful in its product strategy


 Although all Micromax products were towards the lower

end of the pricing spectrum ( Focusing on COST )


 The brand was focusing on adding more features at a

reasonable price ( Focusing on Innovation)


 The focus was more on value than price



 There was some USP in their products which offered

more value


 Mantra for Micromax

 Value orientation with a clear differentiation

 Variety is the spice of Micromax
 The company in their website claims to have
invested heavily in the product development


 The brand boast of launching many firsts in the

rural market like,
 30 day battery life
 Affordable Dual Sim
 Mobiles with Mosquito repellants
 Universal remote
•

 Apt for rural marketS


 According to Vikas Jain the business director at

Micromax Informatics Ltd. the company’s main customer
base is in rural India


 Six in every 10 handsets that it sells are sold in

India’s villages


 80% of companies’ sales is driven by Rural India 

 Apt for rural marketS
 Radio without enhancements


• In any mobile phones if you have to access the radio/FM it has

to be connected with the headphones i.e. enhancement


• But in case of Micromax the enhancement was not required



• The music output is also very powerful even in entry level

handsets


• Workers while working in factories or farms can enjoy the

music while they are on the go and use the phone like a
mobile cum radio



 Apt for rural marketS
 Mobile as a Universal Remote


 Also have a handset which acts as a universal

remote


 It is no more a luxury but has become a need



 In rural areas these days each & every

household has a remote control operated TV


 In this case as well the Handset serves

multiple uses


 In urban areas the same handset has even

more uses

 The way ahead
 MOBILES WITH MOSQUITO REPELLANTS


 Planning to come up with a entry level

handset in which a mobile phone and a
mosquito repellant are integrated


 In rural areas without any doubt mosquito

repellants would be required


 It would serve dual needs of the rural people



 Therefore would turn out to be a multi utility

product
•
 Mobiles bundled with Insurance Services

 the concept


 Once a person buys a handset, he can get

insurance for the handset and for himself


 In rural areas, people are not inclined to insure

themselves


 But if it is available free of cost, they are very

interested


 Large sales volumes make it easier to negotiate

with insurance providers
•
 MICROMAX VERY WELL UNDERSTOOD
THAT,


 “If you give people something that

helps them in their day to day lives,
they will buy it,”
 MICROMAX VERY WELL UNDERSTOOD
THAT,


 competing on price along with Nokia,

Samsung or LG would not get them
anywhere


 Instead they wanted to create, and own

categories and did that with
perfection
 


 VISTAAR SE SUNNE KE LIYE AAP SABHI KA
BAHUT BAHUT SHUKRIYA

पसतुतकता



िवनीत- 87

वैभव - 39
