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The demand for detergents has been growing at an annual growth rate of 10 to 11 per cent during the past five years. Where an urban consumer prefers washing powder and detergents, a rural consumer is more inclined towards washing cakes and bars. But, over the last few years, we have seen that rural consumers are gradually shifting their preferences from detergent bar to detergent powders. The market leader in the popular (low priced) detergent category, Nirma, created a revolution in the market by pioneering the concept of low-cost detergents. The Indian rural market is extremely price sensitive. Keeping this factor in mind, a number of companies followed the strategy of launching a wide range of package sizes and prices to suit the purchasing preferences of India’s varied consumer segments. Targeting on the price factor, P&G introduced Tide Naturals at a lower price unit which further helped the company to gain a bigger share of the detergent pie in the year 2010. Another strong Rural India is rapidly becoming target market for most of the brands in the country. The contribution of rural markets in the FMCG sector is growing faster than urban markets. Powered with an incremental increase with better employment opportunities, rural consumers are upgrading their lifestyle with shifting preferences from non-branded and local product to the branded ones. At present, the size of the Indian FMCG market is estimated to be Rs 125,000 crore and is growing at the rate of 12 per cent yearly. According to an industry reports, the sector is expected to grow by up to 17 per cent annually to touch Rs 400,000 crore by 2020. Consumption of detergent in rural India The per-capita consumption rate of detergents in India is 2.7 kg per annum and this market is expected to grow at the rate of 7 to 9 per cent per annum in terms of volume. The penetration level of detergent bars and powder in India is higher as compared to the urban market. According to the research conducted by Equitymasters.com, HUL, Nirma and P&G are the major players in the market with 40 per cent, 30 per cent and 12 per cent shares respectively. Further, the detergent market in India can be classified into premium, economic and popular segments. While HUL dominates the premium segment, Nirma is the leader in the popular segment. Low cost to rule rural India regional player in the category, Jyothy Laboratories, launched another detergent, Ujala Techno Bright, under its Ujala brand in the market. The new product was priced 15-30 per cent lower than other brands in the categories. The product is an addition to Jyothy’s portfolio in the laundry detergents space, which earlier comprised only the hand wash detergent, Ujala Washing Powder. These price-warriors, small in turnover figures but large in numbers, are said to be gnawing at the market shares of leading national detergent brands, forcing companies to rethink pricing strategies. Most brands are luring consumers with propositions like superior wash at affordable prices. Generally detergents in pack sizes of 500 gm to 20 gm are highly available in the stores with price ranging from Rs 50 to as low as Rs 2 and Re 1. Dalip Jolly, Director, Fena India Pvt Ltd, says, “We have seen an increase in the purchasing capacity of village people. For example, the demand for 100 gm pack is growing as compared to the
Rising product prices may discourage consumers from switching to relatively premium products. or investing in the value-added category of laundry aids. Thus. Future penetration in rural area According to the research firm. Though organised retail is showing double digit growth. which further limits the product use over the historic period. had slow growth in India because of the low penetration of washing machine in India. Thus. They have a low population density. (GIA). in spite of hand wash detergents enjoying appreciable penetration in both rural and urban areas. Euromonitor. “Increasing rural distribution network. village consumers are able to upgrade their lifestyle and shopping behaviour. though when large areas are described country towns and smaller cities will be included. is estimated to reach $13. “A laundry detergent as a whole is expected to reach a degree of saturation in terms of volume growth rates in the forecast period. Unexplored product categories Though detergents have been in India for a long time. During the end of 2010. that was . says market research firm. Product categories. As per the report. HUL and P&G. This implies that rural marketing consists of marketing of inputs (products or services) to the rural as well as marketing of outputs from the rural markets to other geographical areas. there have not been much trading up within the category.” The future value growth of the category may also be adversely affected by the consistently high inflation rates since 2010. the shift from bar to hand wash detergents and from hand wash to automatic detergents is pivotal to the category. is growing at a higher rate owing to the economic growth as compared to developed markets. The reason could be ignorance towards the functional difference between hand wash and automatic detergents. R&D and distribution so that their offering becomes more localised.” says Jolly. The Rural/Urban Definition. many product categories within these categories were still unexplored until 2010. brands are investing heavily on innovation. Rural areas of the country or countryside are areas that are not urbanized. such as washing machine detergents. Defra have a working definition. With the help of national rural employment initiatives. current demand for fabric softeners in developing markets. The national firms also get tough competition from regional and small unorganised players who account for a major share of the total volume of the detergent market in rural India due to low pricing. such as India.previous 20 gm pack. But both these categories have shown low penetration in rural areas. Global Industry Analysts Inc. two leading players. and typically much of the land is devoted to agriculture. Another emerging category.” More than 70 per cent of these low price detergent packs are sold through kirana. hiked their detergent prices up to 8 to 12 per cent. it has very little influence in rural India. accessible and affordable to consumers. Rural Marketing is defined as any marketing activity in which the one dominant participant is from a rural area. which are relatively mature. Fabric Softeners and Conditioners. value for money positioning and smaller packs are the three success keys for companies to strength their position in rural India. Today.3 billion globally by 2015. or mom-and-pop stores constituting almost 95 percent of the total retail market.
7.fertilizers. environmental and/or social credibility stand a better chance. Brands with demonstrable local. Slow to adopt brands.introduced in 2004 as a joint project between a number of Government Departments and was delivered by the Rural Evidence Research Centre at Birkbeck College (RERC).KRIBHCO Company bloomed and government paid special attention to promote these products. 6. use of high yield variety seeds . Online shopping is seen as a solution by many but will be dependent on broadband speed 3. Retail outlets in rural areas have many demonstration areas along with markets for tasting. Rural Marketing meant different in 3 different periods. This means there will be more disposable income at certain times with rural businesses and employees. soil testing. Rural consumers will be slower to pick up trends or brands but will remain loyal when accepted. handloom textiles. Marketing strategies that worked for urban markets do not necessarily work for the rural ones. Scarcity of media bandwidth. pesticides and deployment of machines like power tillers.Rural marketing was another word for agricultural marketing because agricultural produces like food grains and industrial like food grains and industrial like cotton. Now marketing of rural marketing meant “marketing of agricultural inputs” and “agricultural marketing”. Expenses are year long. Due to this marketing of agricultural inputs was also now there a new potential market. 2. Slow to give them up. 2009 1. and socially acceptable. Part1(before 1960):It was a completely an unorganized market. Agencies like Khadi and Village Industries Commission. Word-of-mouth in close knit communities is more powerful. Higher receptivity to experience advertising.where “baniyas and mahajans” dominated the market. 4.the output increased especially wheat and paddies. Part 3(after mid 1990):Since 1990 . JWT. It’s contribution to GNP . IFFCO. rural. but entertainment starved. Commercially profitable.safety matches and crackers increased on large scale in urban areas. Part 2(1960 to 1990):The greatest thing which happened in this period was green revolution which led to farming involving scientific and technological methods and many poor villages became prosperous business centers . Isolation from entertainment centres has led to companies trying edutainment to get their message across. Sale of handicrafts. Many rural areas rely on seasonal tourism peaks when income will be high and to a lesser extent agricultural incomes from seasonal crops. Intra community influences are relatively more important than inter-community ones. 5.India’s industrial sector had gained strength and maturity. harvesters .sugarcane etc occupied primary attention and the supply chain activities of firm supplying agricultural inputs and of artisans in the rural areas received secondary attention. Rural individual's access to media channels is limited and in the case of broadband the comparable upload and download speed may be slower. There are 7 differentiators identified in Why the rural market is different. income is seasonal.oil seeds. Girijan Cooperatie Societies APCO Fabrics.threshers etc. Information hungry. soaps .With better irrigation facilities.
ITC tried developing direct contact with farmers in remote villages in Madhya Pradesh.many parts in India are not connected through railways.By 1999 “Bharat Operation” covered 13 million rural household. Everyday batteries .With support and development programmes of central and state governments.BSNL. English and Hindi are not understood by many people.Tatas. Due to lack of adequate and scientific storage facilities in rural areas. Rural Marketing is growing at a far greater speed than its urban counterpart .Goenkas and others the rural areas progressed socially and economically. .Therefore opportunities are very low in rural areas.Hindustan Unilever began the first home to home operation in rural areas in personal products in 1998 which was known as “Operation Bharat”.these languages and many dialects are spoken in rural India. Coca Cola also explored the market by introducing bottles at rs.India has second largest railway system in the world.In India there are six lakh villages.Philip India.LG Electronics . Hindustan Unilever(HUL) started successful rural marketing projects like “Project Shakti” and “Operation Bharat” in India. Life Insurance Corporation. A few other companies known for their marketing orientation –Hindustan Lever.During the course of operation.Birla. Problems in Rural Marketing Communication: The literacy rate among rural consumers is very low there print media has very little scope in the rural areas . Britannia and Hero Honda are trying to seep in rural markets.talcum powder .Amul is another case in point of aggressive rural marketing .Phillips .toothpaste and skincream priced at 15rs. stocks are being maintained in towns only.Singer and Larsen and Turbo have also taken great efforts in this direction.increased substantially.In 2000.Asian Paints.There was metamorphosis of agricultural society to industrial society. Transportation: The transportation infrastructure is extremely poor in rural India.backed with Aamir Khan advertisement .the rural market grew steadily for household consumables and durables. The economic reforms further increased competition in the market. Warehousing: There are many agricultural products which are produced in a particular seoson but is demanded throughout.Almost 50 per cent of them are not connected by road also. there were HUL vans which visited villages across the country distributing sample packs comprising a low unit price pack each of shampoo. Due to this rural consumers do not get exposure to new products.5.In India there are 18 languages which are recognized.ITC E-choupal was a result of this initiative.Multinationals have realized the potential and are ready to tap rural markets .service organizations and socially responsible business groups like Mafatlal.This was to create awareness of the company’s product categories and of the affordability of the product.but people who actually listen is less.To name a few Colgate.V is not available in every house in rural areas.T. Availability of appropriate media:The radio network in theory covers 90 per cent.
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