You are on page 1of 59

____________________________________________________RURAL MARKETING

The Overview

In our country over 70% of the total population live in villages. There are states like U.P, M.P, Bihar, Rajasthan and Orissa where rural population varies form 80 to 90 per cent. Agriculture and agriculture related activities contribute to about 75% of the income in rural areas. Over 6,31,307 villages, 700 million people a myriad of languages many traditions and a rich culture. A vibrant land with a long History. Rural Indian people are known as much for their warmth as their diversity. The real BHARAT. EXPLORE THE RURAL MARKETS DO NOT EXPLOIT THEM.









____________________________________________________RURAL MARKETING

Till recently, the focus of marketers in India was the urban consumer and by large no specific efforts were made to reach the rural markets. But now it is felt with the tempo of development accelerating in rural India, coupled with increase in purchasing power, because of scientific agriculture, the changing life style and consumption pattern of villagers with increase in education, social mobility, improved means of transportation and its various satellite channels have exposed rural India to the outside world and hence their outlook to life has changed. Because of all these factors, rural India is attracting more and more marketers. Increase in competition, saturated urban markets, more and more new products demanding urban customers, made the companies to think about new potential markets. Thus, Indian rural markets have caught the attention to many companies, advertisers and multinational companies. According to a recent survey conducted by National Council for Applied Economic Research (NCAER), the purchasing power of the rural people has increased due to increase in productivity and better price commanded by the agricultural products. By and large this rise in purchasing power remains unexploited and with growing reach of the television, it is now quite 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 even Multinational Companies (MNCs) like Pepsi, Coca Cola, L.G., Philips, and Cavin Kare are all eyeing rural to capture the large Indian Market. Coming to the frame work of Rural Marketing broadly involves reaching the rural customer, understanding their needs and wants, supply goods and services to meet their requirements, carrying out after sales service that leads to customer satisfaction and repeat purchase/ sales.


____________________________________________________RURAL MARKETING

Concept of Rural Marketing

Rural marketing is a process of developing, pricing, promoting, distributing ruralspecific goods and services leading to exchange between urban and rural markets which specifies consumer demand and also achieves organizational objectives. Rural marketing involves a two-way marketing process, however, the prevailing flow of goods and services from rural to rural areas cannot be undervalued. Since demands of urban and rural folks are different, companies should manufacture products to suit the rural demand rather than dump urban products on rural consumers. The process should be able to straddle the attitudinal and socio-economic disparity between the urban and rural consumers.


____________________________________________________RURAL MARKETING

Distinctiveness of Rural Markets

The Indian rural market with its vast size and demand base offers great opportunities to marketers. Two-thirds of countries consumers live in rural areas and almost half of the national income is generated here. It is only natural that rural markets form an important part of the total market of India. Our nation is classified in around 450 districts, and approximately 630000 villages, which can be sorted in different parameters such as literacy levels, accessibility, income levels, penetration, distances from nearest towns, etc. The features of Indian rural markets are: Major income from agriculture: Nearly 60 % of the rural income is from agriculture. Hence rural prosperity is tied with agricultural prosperity. Low standard of living: The consumer in the village area do have a low standard of living because of low literacy, low per capita income, social backwardness, low savings, etc. Traditional Outlook: The rural consumer values old customs and tradition. They do not prefer changes. Diverse socio-economic backwardness: Rural consumers have diverse socio-economic backwardness. This is different in different parts of the country. Infrastructure Facilities: The Infrastructure Facilities like roads, warehouses, communication system, and financial facilities are inadequate in rural areas. Hence physical distribution becomes costly due to inadequate Infrastructure facilities.

Rural V/S Urban


____________________________________________________RURAL MARKETING

SR. NO. 1 2

ATTRIBUTE Population Density Occupation

RURAL Low Agriculture

URBAN High Trade, Industry, and Services.


Close and less monetized.

Open and Monetized.

4 5

Infrastructure Attitude to Modernization

Poor and Weak. Tradition bound.

Abundant and Strong. Ready for adaptation and change.

6 7

Family Structure Possession of House hold assets

Joint Low

Nuclear High

8 9 10 11 12 13

Mobility Literacy Exposure Attitude towards Life Manufacturing Activity Distribution Outlets

Low Low Low Fatalistic Low Fewer

High High High Scientific High More


____________________________________________________RURAL MARKETING

Profile of Rural Consumers

Importance of customs
This however raises a fundamental problem of fathoming the differences between urban and rural markets in India. This is of paramount importance in the Indian marketing environment as rural and urban markets in our country are so very diverse in nature that urban marketing programmers just cannot be successfully extended to the rural markets. The buying behavior demonstrated by the rural Indian differs tremendously when compared to the typical urban Indian. Further, the values, aspirations and needs of the rural people vastly differ from that of the urban population. Basic cultural values have not yet faded in rural India. Buying decisions are still made by the eldest male member in the rural family whereas even children influence buying decisions in urban areas. Further, buying decisions are highly influenced by social customs, traditions and beliefs in the rural markets . Many rural purchases require collective social sanction, unheard off in urban areas. Another contrasting feature is the precision in the assessment of purchasing power of the consumers. In urban markets, income levels are generally used to measure purchasing power and markets are segmented accordingly. However, this measure is not adequate for defining the purchasing power in rural areas because of the single fact that rural incomes are grossly underestimated. Farmers and rural artisans are paid in cash as well as in kind. However, while reporting their incomes, they report only cash earnings, which then affect the calculation of their purchasing power. This is the reason why marketers are often surprised to find that their products are sometimes consumed by people who, according to their surveys and estimates do not have the purchasing power to do so. Every marketing manager must therefore make an attempt to understand the rural consumer better so that he can plan his strategies in such a manner that they produce the desired results.


____________________________________________________RURAL MARKETING

Problems Related To Rural Marketing

Although the rural market does offer a vast untapped potential, it should also be recognized that it is not that easy to operate in rural market because of several problems. Rural marketing is thus a time consuming affair and requires considerable investments in terms of evolving appropriate strategies with a view to tackle the problems. The major problems faced are: Underdeveloped People and Underdeveloped Markets : The number of people below poverty line has not decreased in any appreciable manner. Thus underdeveloped people and consequently underdeveloped market by and large characterize the rural markets. Vast majorities of the rural people are tradition bound, fatalistic and believe in old customs, traditions, habits, taboos and practices.

Lack of Proper Physical Communication Facilities : Nearly fifty percent of the villages in the country do not have all weather Physical communication of these villages is expensive. Even today most villages in the parts of the country are inaccessible during the monsoon. roads. highly eastern

Media for Rural Communication : Among the mass media at some point of time in the late 50's and 60's radio was considered to be a potential medium for communication to the rural people. Another mass media is television and cinemas.


____________________________________________________RURAL MARKETING Statistics indicate that the rural areas account for hardly 2000 to 3500 mobile theatres, which is far less when compared to the number of villages.

Dispersed Market: Rural areas are scattered and it is next to impossible to ensure the availability of a brand all over the country. Seven Indian states account for 76% of the countrys rural retail outlets, the total number of which is placed at around 3.7 million. Advertising in such a highly heterogeneous market, which is widely spread, is very expensive.

Many Languages and Dialects: The number of languages and dialects vary widely from state to state, region to region and probably from district to district. The messages have to be delivered in the local languages and dialects. Even though the number of recognized languages is only 16, the dialects are estimated to be around 850.

Low Per Capita Income: Even though about 33-35% of gross domestic product is generated in the rural areas it is shared by 74% of the population. Hence the per capita incomes are low compared to the urban areas.

Low Levels of Literacy: - The literacy rate is low in rural areas as compared to urban areas. This again leads to problem of communication for promotion purposes. Print medium becomes ineffective and to an extent irrelevant in rural areas since its reach is poor and so is the level of literacy.


____________________________________________________RURAL MARKETING Prevalence of spurious brands and seasonal demand: - For any branded product there are a multitude of local variants, which are cheaper, and, therefore, more desirable to villagers.

Different way of thinking: - There is a vast difference in the lifestyles of the people. The kind of choices of brands that an urban customer enjoys is different from the choices available to the rural customer. The rural customer usually has 2 or 3 brands to choose from whereas the urban one has multiple choices.


____________________________________________________RURAL MARKETING

Hurdles Faced
With the change in the economic policies of the government, many companies have ventured into the rural markets. However, their efforts have not been sufficiently rewarded. The various constraints can be enumerated as: Lack of Infrastructure: The basic facilities like roads, transport facilities, electricity, telecommunication, etc are missing in most of the rural areas of India.

Market Planning and Awareness: Lack of awareness and understanding of consumer behavior in rural markets, creates problems in formulating strategies and plans.

Designing the Products: There is a drastic difference in the utility value in the urban and rural market. A product with a particular design and pattern may not find acceptance in rural markets, but may be a success in urban areas.

Inadequacy of Channels of Distribution : Due to comparatively less focus on rural markets the exploitation of the rural market to the fullest extent has not taken place.

Communication: With the given level of literacy and awareness of rural population, communication constitutes a major hurdle in exploiting rural markets. Various factors like language, religion, superstitions, rigidity etc make communication in rural markets more difficult.

- 10 -

____________________________________________________RURAL MARKETING Right to Decision: In most rural families, it is the head of the family who decides what to buy and when to buy. Consequently his purchase decisions are influenced by his own personality traits, rather than the aptitude and perception of the actual consumers of these goods.

Pricing of the Product: Price factor is more crucial in rural areas than in urban markets. The consumer must feel satisfied and benefited after paying the price for a particular product.

- 11 -

____________________________________________________RURAL MARKETING

Role Of Media

The past two decades have seen a dramatic expansion of exposure to mass media in rural areas. Since these are, almost, by definition urban media at present is an overwhelmingly urban portrayal of life and values, their impact on attitudes and behavior has been profound. Radio is the medium with the widest coverage. Studies have recently shown high levels of exposure to radio broadcasting both within urban and rural areas, whether or not listeners actually own a set. Many people listen to other people's radios or hear them in public places. Surveys indicate that in rural areas more than a one third of the married women of reproductive age have listened to a radio within the last week. Television, video and films expose viewers to a common window on styles of life and behaviour, an impact increased by the supranational reach of the media. Television is extremely popular where it is available. Television increasingly exposes viewers to a wide range of national, regional and international viewpoints. Rural exposure to television has been lower by far than radio. The mass media brings change wherever they go; but change does not have to be random. Successful media campaigns have changed attitudes and behaviour in a variety of areas, from basic literacy to health care and family planning. But Advertising to rural consumers continues to be a hit and miss affair. At best, it is an exercise where communicators grapple with issues of language, regional and religious affiliations and local sensitivities. Most often finding the right mix that will have a panIndian rural appeal is the greatest challenge for advertisers. But more often than not, marketers throw in the towel going in for simplistic solutions: such as going in for a mere transliteration of advertising copy. The result: advertising that is rooted in urban sensitivities and do not touch the hearts and minds of the rural consumer.

- 12 -

____________________________________________________RURAL MARKETING

Various other reasons making the mass media ineffective are: 1. The Indian society is a complex social system with different castes, classes, creeds and tribes. The high rate of illiteracy added to the inadequacy of mass media impedes reach almost to 80% of India's population who reside in village.

2. Mass media reaches only 57% of the rural population. Generating awareness, then, means utilizing targeted, unconventional media including ambient media.

3. Mass media is too glamorous, interpersonal and unreliable in contrast with the familiar performance of traditional artist whom the villager could not only see and hear, but even touch.

4. The communication and the design of marketing mix needs to be different, as what attracts one need not attract the other as well. So again, even if the media reaches a rural consumer, there might not be an impact as he may fail to connect to it due to his different lifestyles. Moreover rural marketing is usually related with products having low profit margins and high sales volumes and hence it is more important to emphasize the availability of the product to all potential consumers than an overdose of expensive inefficient mass-media strategies.

To understand the way the rural markets work - we need to go to these markets and spend time there in understanding them. We live in surroundings where the things are completely different from what the rural customer experiences. And we can't understand him unless we go and spend time there. Things like what time does he get up, etc need to be studied and customer needs to be understood. Also these studies need to be passed on so others can also benefit from the ground works done and enhance them further. - 13 -

____________________________________________________RURAL MARKETING We need in depth studies of the market, the medium, the message and the rural customer in center of all these to understand the rural markets completely. The winning combination will be a good product with consistent quality and availability. Once you earn the villagers' loyalty (and they are known for their brand loyalty), it will be difficult for competitors to take away your customers. RETAILERS: -For the rural customer the choices available are limited. So the retailer plays a very big role in the purchase decision. Data on rural consumer buying behavior indicates that the rural retailer influences 35% of purchase occasions. The rural customer goes to the same shop always to buy his things. And there is a very strong bonding in terms of trust between the two. The buying behavior is also such that the customer doesn't ask for the things by brand but like - "paanch rupey waali chaye dena". Now it is on the retailer to push whatever brand he wants to push as they can influence the buyer very easily and very strongly on the preferences. Therefore, sheer product availability can determine brand choice, volumes and market share. Thus distribution is the key factor for the success of rural marketing. This includes, maintaining favorable trade relations, providing innovative incentives to retailers and organizing demand generation activities among a host of other things. In rural areas, the place where consumers prefer to shop is very important, because it has been found that they buy their requirements from the same shop. This high shop loyalty is accentuated by the "khata" system, which is widely practiced. Hence, if the product is not available at the place where the consumer shops, he would buy some other available brand.

- 14 -

____________________________________________________RURAL MARKETING RURAL FOLK MEDIA: -As a general rule, rural marketing involves more intensive personal selling efforts compared to urban marketing. Marketers need to understand the psyche of the rural consumers and then act accordingly. To effectively tap the rural market a brand must associate it with the same things the rural folks do. Utilizing the various rural folk media to reach them in their own language and in large numbers so that the brand can be associated with the myriad rituals, celebrations, festivals, melas and other activities where they assemble, can do this. In the Indian rural marketing context, perhaps linguistics could provide a new approach to tackling communication issues and arriving at a better understanding of rural consumers. Also, the manner in which symbols and icons are used, which provides insights and clues into the mindsets of rural audiences, can be deployed to grab their attention. Though television and radio fare better then print, the best way to kick start sales are events. Where the company meets and interacts with the audience, talks to them in their own idioms and tells them what this product offers. Marketers should think up games and events, which would attract the attention of the villagers from all professions uniformly. This would require local level goods creation and social negotiation skills. The best choice comes from weekly bazaars. With varying populations, one shop or few shops cannot really cater to all the needs of the consumers. Thus, it makes sense to have weekly outlets that caters to the needs of the consumers in these regions. Frugal though the rural consumer is success from these weekly outlets is that much more pertinent. What attracts her is the freshness of the produce, buying in the bulk for a week and the bargaining power. These markets (haats and shandies) have high potential that corporates are now waking up to. The scope that these markets offer to distribution is something that has to be seriously considered. Distribution is clearly the key to rural marketing.

- 15 -

____________________________________________________RURAL MARKETING TRADITIONAL MEDIA can be used to reach these people in the marketing of new concept. The traditional media with its effective reach, powerful input and personalized communication system will help in realizing the goal. Besides this when the advertisement is couched in entertainment it goes down easily with the villager.

The traditional media like folk/street plays, wall signs/shop paintings, van campaign/Haat events (weekly fairs), melas, home-to-home contacts and product demonstrations can be effectively used for this purpose.

- 16 -

____________________________________________________RURAL MARKETING

Strategies In Rural Marketing

The rural markets are expected to witness a different kind of a shift. As companies aggressively compete to get a higher share of the rural pie, competitive advantage will lie with those who have a higher reach. Marketing according to a leading management theorist Peter Druker can be put in this way There will be always, one can assume, be need for some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sell itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed then is to make the product or service available." Through this we feel that the gist of mktg. in rural & urban is the same. It is nothing but teasing the minds of people, their desires, needs, expectations & playing with their psychology. But the market for a product may vary in rural & urban area and the marketing strategies to market the product is also different in urban and rural area.

The strategies should revolve around what attracts the rural customer to a product. For example

- 17 -

____________________________________________________RURAL MARKETING

Rural customers are usually daily wage earners and they dont have monthly incomes

like the ones in the urban areas have. So the packaging is in smaller units and lesser-priced packs that they can afford given their kind of income streams. Packaging and package sizes are increasingly playing a vital role in the decision making process of the rural buyers. Certain products like detergents and paste are bought in large quantities, whereas shampoos, toilet soaps, eatables are bought in smaller pack sizes. The reasoning behind this is that the products that are common to family members are bought in large pack sizes, whereas individual-use products are preferred in smaller packs. A successful example is that of HLLs project Operation Bharat. HLL supplied hampers for Rs. 5, 10, 15 and 20, each of which had a Clinic shampoo bottle, a tube each of Pepsodent, Fair & Lovely, and Ponds Dreamflower Talc, in different sizes and combinations. The idea behind this strategy was to have a product for hair care, dental care, skin care and body care.

Value for money:

Rural consumers are quite brand conscious. A rural consumer wants value for money minus the frills. Zany advertising and marketing would be a no-go for this sector. A high price tag usually deters the rural consumer from purchase. To counter this, companies need to resort to low unit price strategy to expand sales. A good example of this would be the sachet revolution and combi-packs. According to a survey, 95 percent of total shampoo sales in rural India are by sachets. Colgate has followed the very successful sachet route by introducing the toothpowders in 10g sachets of Rs. 1.50 each and the toothpaste with Super Shakti in 15g packs of Rs. 3 each. The entrant can also offer attractive exchange and money back schemes for its middle and lower segments. - 18 -

____________________________________________________RURAL MARKETING

An example is what Colgate did to its tooth powder packaging. Firstly it made

sachets as was required by their income streams. Secondly - since many households dont have proper bathrooms and only have a window or things like that to keep such things -- it was wise to cap this sachet for convenience of storage while use. So this is what they did.

Direct Contact is a face-to-face relationship with people individually and with groups

such as the Panchayat and other village groups. Such contact helps in arousing the villager's interest in their own problem and motivating them towards self-development. Demonstration may be: A. Method demonstration B. Results demonstration The five steps to make any demonstration effective are: 1. Information about people 2. Objectives to be accomplished 3. Demonstration plan & Execution of the plan 4. Evaluation of the demonstration 5. Reconsideration after evaluation. In result demonstration, with help of audio -visual media can add value. Asian Paints launched Utsav range by painting Mukhiya's house or Post office to demonstrate that paint dont peel off.

- 19 -

____________________________________________________RURAL MARKETING

Promotion and marketing communication:

While planning promotional strategies in rural markets, marketers must be very careful in choosing the vehicle to be used for communication. They must remember that only 16% of the rural population has access to a vernacular newspaper. Although television is undoubtedly a powerful medium, the audiovisuals must be planned to convey a right message to the rural folk. The marketers must try and rely on the rich, traditional media forms like folk dances, puppet shows, etc with which the rural consumers are familiar and comfortable, for high impact product campaigns. Thus, a radical change in attitudes of marketers towards the vibrant and burgeoning rural markets is called for, so they can successfully impress on the 230 million rural consumers spread over approximately six hundred thousand villages in rural India.

Wall Paintings
Wall Paintings are an effective and economical medium for advertising in rural areas. They are silent unlike traditional theatre .A speech or film comes to an end, but wall painting stays as long as the weather allows it to. Rural households shopkeepers and panchayats do not except any payment, for their wall to be painted with product messages. The greatest advantage of the medium is the power of the picture completed with its local touch. The images used have a strong emotional association with the surrounding, a feat impossible for even a moving visual medium like television, which must use general image to cater to greatest number of viewers.

- 20 -

____________________________________________________RURAL MARKETING Such a promotion has led to an interesting outcome. For both, washing and for taking bath - one requires water. Now for rural markets there are three sources of water - wells, hand pumps and ponds. For the first in the history of advertising - these are being branded. Special stickers were put on the hand pumps, the walls of the wells are lined with advertising tiles and tinplates are put on all the trees surrounding the ponds. The idea is to advertise not only at the point of purchase but also at the time of consumption. So the customer could also see the advertising when he was bathing or washing. Now, the customers who bought these brands got a sense of satisfaction by seeing their choice being advertised in these places while a question was put in the minds of the customers who had bought other brands. So this was an innovative strategy that worked quite well. Example of successful use of wall painting is by Nirma, which makes extensive use of wall paintings, also a soil conditioner called Terracare uses images of Sita, Luv and Kush to attract the rural consumer.

Haats & Melas

The countries oldest tradition holds the key to rural penetration. The average daily sale at a Haat is about Rs.2.25 Lacs while the annual sales at melas amount to Rs.3, 500 crore. In rural India, annual melas organised with a religious or festive significance are quite popular and provide a very good platform for distribution. Rural markets come alive at these melas and people visit them to make several purchases. According to the Indian Market Research Bureau, around 8000 such melas are held in rural India every year.

- 21 -

____________________________________________________RURAL MARKETING Rural markets have the practice of fixing specific days in a week as Market Days when exchange of goods and services are carried out. This is another potential low cost distribution channel available to the marketers. Haats serve a good opportunity for promotion after brand building has been done at Mela. Also, one satellite town where people prefer to go to buy their durable commodities generally serves every region consisting of several villages. If marketing managers use these feeder towns they will easily be able to cover a large section of the rural population. Melas are organized after harvest season, so the villager has enough money, which he will be ready to spend. Demonstration at Haat is essential to convert customers at haats since their attitude is far more utilitarian than that of visitors to a fair.

Dealing with this sector needs innovative and localized approaches: Watch major Titan Industries plans to aggressively approach the rural and semi-urban markets in India by creating a separate image for its low-priced Sonata brand. The company has opened its first showroom in Bhopal and nine more showrooms are to be opened across the country. The marketing strategy being followed is to keep the prices of the watches at an affordable range of Rs 295-1,195 and create a niche market for the brand. They will not open showrooms in metros such as Mumbai or Delhi for Sonata brand. The target segment would be the Rs 295-700 customers. They plan to open showrooms at locations, which rural customers visit frequently such as bus terminals, railway stations among others. Also, there would be a range of 300 models from smart plastics and all weather steel to all gold and all-occasion gold and leather. Titan will be looking for the marriage season, which will start from April-June where the rural customers become actual buyers. Another innovative idea is that of Sanjay Lalbhai's Ruf and Tuf jeans is targeted at the rural market. And they are leaving nothing to chance. Arvind Mills is teaching tailors in the villages how to stitch the jeans.

Mobile Traders:
- 22 -

____________________________________________________RURAL MARKETING Even though they have been used before for redistribution, Cycle Salesman could possibly emerge as one of the most cost-effective ways of selling directly to rural consumers. The lack of motor able roads and high distribution costs are not a hindrance any more. Mobile traders score over the conventional wholesale channel on both counts of cost and reach. They travel either on foot or on cycles. That means transportation costs are virtually non-existent. Besides these traders can target smaller villages, which conventional distribution channels often do not touch?

The mobile traders can play a crucial role in buying decision. Most rural women are loath to visit retail outlets. Mobile traders therefore are a smart way of reaching women in their home environment. The women rely on these mobile traders to sell them goods in the security of their home. Rural India is a marketers dream given its tremendous potential and increasing money power. The formula of success for companies entails a complete shift in marketing and advertising strategies.

If Distribution is the Key, then whats going wrong???

- 23 -

____________________________________________________RURAL MARKETING

Unfortunately, most marketers of today try to extend marketing plans that they use in urban areas to the rural markets and face, on many occasions failure. They should adopt a strategy that appeals individually to the rural audience and formulate separate annual plans and sales targets for the rural segment. Changes must be made in the marketing mix elements such as price, place, product and promotion. Corporate marketers should refrain from designing goods for the urban markets and subsequently pushing them in the rural areas. The unique consumption patterns, tastes, and needs of the rural consumers should be analyzed at the product planning stage so that they match the needs of the rural people.

Distribution costs and non-availability of retail outlets are major problems

faced by the marketers. But if one takes a closer look at the characteristic features of the rural market, it will be clear that distribution in fact, is no problem at all. For most companies wanting to enter the rural markets, distribution poses a serious problem.

The problems of physical distribution and channel management adversely

affect the service as well as the cost aspect. The existent market structure consists of primary rural market and retail sales outlet. The structure involves stock points in feeder towns to service these retail outlets at the village levels. But it becomes difficult maintaining the required service level in the delivery of the product at retail level.


- 24 -

____________________________________________________RURAL MARKETING

DELIVERY VANS:The way to overcome the problem would be by using company delivery vans, which can serve two purposes- it can take the products to the customers in every nook and corner of the market and it also enables the firm to establish direct contact with them and thereby facilitate sales promotion. However, only the bigwigs can adopt this channel. The companies with relatively fewer resources can go in for syndicated distribution where a tie-up between non-competitive marketers can be established to facilitate distribution.

An example of the successful strategy is that of Tata Cellular in rural Andhra

Pradesh. Inspite of low advertisement budget, they created a hybrid distribution channel, with four tiers direct, retail, showroom and franchise outlets that were designed for easy reach. Specific road shows to rope in different segments such as transporters, traders and PSU employees were organized. Mr Harish Bijoor, CEO, Zip Telecom, says, "Rural markets need to be approached differently and cannot be understood as extensions of urban markets. Most marketers err on this count. Advertising that believes in translating the English version into the vernacular cannot capture the rural heart. For rural markets, one needs to think in the local language, remote with the local feel and mood and visualize advertising that is rich in this context." To attract rural buyers advertisers need to use simple films showing how a product is to be used. Rajdoot Paints issues such functional advertising very effectively.


- 25 -

____________________________________________________RURAL MARKETING

Product a) Awareness b) Concept c) Positioning d) Usage Method e) Quality Preference f) Features Price a) Sensitive b) Level Desired Physical Distribution a) Channels b) Transport Facilities c) Product Availability Promotion a) Advertising Low

High Known Easy


Less Known Difficult Difficult to grasp Moderate Less Important Very much Low-Medium Village Shops, Haats & jatras. Average Limited TV, Radio, Print Media to some extent, More Languages

Easily rasped Good Important Yes Medium-High Wholesalers& Retailers. Good High Print, Audio-Visuals, Outdoors, Exhibitions.

b) Personal Selling c) Sales Promotion d) Publicity

Occasionally Gifts, Price Discounts Less Limited

Door-to-Door Frequently Contests, Gifts, Price Discounts Good Opportunities. Adequate scope

Present position

- 26 -

____________________________________________________RURAL MARKETING Change is the LAW OF NATURE. Though change is common, some changes seem peculiar and paradoxical. Today, we witness in Indian Economy one such a bi-faceted change a change from national to global on one side and, urban to rural on the other. RU RALISE is among the Buzz words of this new era. Though change is evolutionary and characteristic of a developing nation with huge population and vast resources, one requires a visionary entrepreneurship to respond proactively to it. The first five years of new millennium will belong neither to the urban markets, which have reached saturation and where margins are under pressure nor to the export markets, which suffer from inadequate infrastructure back home, and uncompetitive price overseas. But it belongs to RURAL MARKETING. RURAL MARKETING has become the latest mantra of most corporates. FMCG majors like HLL, P&G, PARLE, COLGATE PALMOLIVE, BRITANNIA, etc. were the first to wake up this fact. Even MNCs like LG, PHILIPS, WIRLPOOL, and other consumer electronic majors are also gung-ho about the rural segment. The fever has spread the consumer durable companies and beyond. Today, many of the Corporates and MNCs look at these markets by compulsion as well as by choice. Compulsion, because markets are saturated, and there is no where to go. Choice: - because they are attractive and viable.

Consumer Behavior, Influences and Its Implications

- 27 -

____________________________________________________RURAL MARKETING

A stereotype of the rural consumer or of rural consumer behavior is absent and this creates problems as well as opportunities for the marketer. Variations in behavior reflect geographical, demographical and behavioral influences on lifestyle, which provides marketers with options to segment the market. To understand rural buying behavior, a marketer must first understand the factors that influence buying behavior and the variations to behavior. These help to generate information upon which a marketer can create bases to segment the rural market taking the following factors consideration: Environment of the consumer Geographical Influences Influence of Occupation Place of Purchase Creative use of Products

Obviously rural consumers do make some purchases from urban areas (towns etc) because there are a few product categories where rural distribution is still comparatively low and therefore the consumers buys from towns; and in certain cases, the consumer seeks variety. In the case of biscuits, toilet soaps and washing powders, the consumers may perceive the range in villages as limited.


- 28 -

____________________________________________________RURAL MARKETING

A long time ago, when the British ruled India, a small factory was set up in the suburbs of Mumbai city, to manufacture sweets and toffees. The year was 1929 and the market was dominated by famous international brands that were imported freely. Despite the odds and unequal competition, this company called Parle Products, survived and succeeded, by adhering to high quality and improvising from time to time. A decade later, in 1939, Parle Products began manufacturing biscuits, in addition to sweets and toffees. Having already established a reputation for quality, the Parle brand name grew in strength with this diversification. Parle Glucose and Parle Monaco were the first brands of biscuits to be introduced, which later went on to become leading names for great taste and quality.

Evolution Of Parle Products Ltd..

- 29 -

____________________________________________________RURAL MARKETING Parle-G has been a strong household name across India. The great taste, high nutrition, and the international quality, makes Parle-G a winner. No wonder, it's the undisputed leader in the biscuit category for decades. Parle-G is consumed by people of all ages, from the rich to the poor, living in cities & in villages. While some have it for breakfast, for others it is a complete wholesome meal. For some it's the best accompaniment for chai, while for some it's a way of getting charged whenever they are low on energy. Because of this, Parle-G is the world's largest selling brand of biscuits. Launched in the year 1939, it was one of the first brands of Parle Products. It was called Parle Gluco Biscuits mainly to cue that it was a glucose biscuit. It was manufactured at the Mumbai factory, Vile Parle and sold in units of half and quarter pound packs. The incredible demand led Parle to introduce the brand in special branded packs and in larger festive tin packs. By the year 1949, Parle Gluco biscuits were available not just in Mumbai but also across the state. It was also sold in parts of North India. By the early 50s, over 150 tonnes of biscuits were produced in the Mumbai factory. Looking at the success of Parle-G, a lot of other me-too brands were introduced in the market. And these brands had names that were similar to Parle Gluco Biscuits so that if not by anything else, the consumer would err in picking the brand. This forced Parle to change the name from Parle Gluco Biscuits to Parle-G. Originally packed in the wax paper pack, today it is available in a contemporary, premium BOPP pack with attractive side fins. The new airtight pack helps to keep the biscuits fresh and tastier for a longer period. Parle-G was the only biscuit brand that was always in short supply. It was heading towards becoming an all-time great brand of biscuit. Parle-G started being advertised in the 80's. It was advertised mainly through press ads. The communication spoke about the basic benefits of energy and nutrition. In 1989, Parle-G released its Dadaji commercial, which went on to become one of the most popular commercials for Parle-G. The commercial was run for a period of 6 years. Parle-G grew bigger by the minute. Be it the packs sold, the areas covered or the number of consumers. It became a part of the daily lives of many Indians. It wasn't a biscuit - 30 -

____________________________________________________RURAL MARKETING any more. It had become an icon. The next level of communication associated the brand with the positive values of life like honesty, sharing and caring.

In the year 1997, Parle-G sponsored the tele-serial of the Indian superhero, Shaktimaan that went on to become a huge success. The personality of the superhero matched the overall superb benefits of the brand. Parle extended this association with Shaktimaan and gave away a lot of merchandise of Shaktimaan, which was supported by POS and press communication. The children just could not get enough of Parle-G and Shaktimaan. In the year 2002, it was decided to bring the brand closer to the child who is a major consumer. A national level promo - `Parle-G Mera Sapna Sach Hoga' was run for a period of 6 months. The promo was all about fulfilling the dreams of children. There were over 5 lakh responses and of that, over 300 dreams were fulfilled. Dreams that were fulfilled ranged from trips to Disneyland at Paris & Singapore; meeting their favorite film star Hrithik Roshan; free ride on a chartered plane; 20 scholarships worth Rs 50,000; a special cricket coaching camp with the Australian cricketer - Ricky Ponting; etc. The year 2002 will go down as a special year in Parle-G's advertising history. A year that saw the birth of G-Man - a new ambassador for Parle-G. Not just a hero but also a super-hero that saves the entire world, especially children from all the evil forces. A campaign that is not just new to the audiences but one that involves a completely new way of execution that is loved by children all over the world - Animation. A TV commercial that showed G-Man saving the children from the evil force called Terrolene launched this campaign. It was also supported by print medium through posters - 31 -

____________________________________________________RURAL MARKETING and streamers put up at the retail outlets. G-Man, a new superhero of Parle-G has the potential of making it big. And will be supported by a campaign that will see many a new creative in the future so as to keep the children excited and generate pride in being a consumer of Parle-G.

To make the brand much more interesting and exciting with children, it was decided to launch a premium version of Parle-G called Parle-G Magix in the year 2002. Parle-G Magix is available in two exciting tastes - Choco and Cashew. The year 2002 also witnessed the launch of Parle-G Milk Shakti, which has the nourishing combination of milk and honey, especially launched for the southern market. Parle-G continues to climb the stairs of success. Take a look at the global market where it is being exported. First came the Middle East then USA followed by Africa and then Australia. An Indian brand, that's exported to almost all parts of the world. After all that's what you would expect from the Parle-G World's Largest Selling Biscuit

- 32 -

____________________________________________________RURAL MARKETING

Parles efforts to make biscuits affordable to all?

Biscuits were very much a luxury food in India, when Parle began production in 1939. Apart from Glucose and Monaco biscuits, Parle did offer a wide variety of brands. However, during the Second World War, all domestic biscuit production was diverted to assist the Indian soldiers in India and the Far East. Apart from this, the shortage of wheat in those days, made Parle decide to concentrate on the more popular brands, so that people could enjoy the price benefits. Thankfully today, there's no dearth of ingredients and the demand for more premium brands is on the rise. That's why; we now have a wide range of biscuits and mouthwatering confectionaries to offer.

- 33 -

____________________________________________________RURAL MARKETING

Strength of the Parle Brand

Over the years, Parle has grown to become a multi-million US Dollar company. Many of the Parle products - biscuits or confectionaries, are market leaders in their category and have won acclaim at the Monde Selection, since 1971. Today, Parle enjoys a 40% share of the total biscuit market and a 15% share of the total confectionary market, in India. The Parle Biscuit brands, such as, Parle-G, Monaco and Krackjack and confectionery brands, such as, Melody, Poppins, Mangobite and Kismi, enjoy a strong imagery and appeal amongst consumers. Be it a big city or a remote village of India, the Parle name symbolizes quality, health and great taste! And yet, this reputation has been built, by constantly innovating and catering to new tastes. This can be seen by the success of new brands, such as, Hide & Seek, or the single twist wrapping of Mango bite. In this way, by concentrating on consumer tastes and preferences and emphasizing Research & Development, the Parle brand grows from strength to strength.

- 34 -

____________________________________________________RURAL MARKETING

Quality Commitment

Parle Products has one factory at Mumbai that manufactures biscuits & confectioneries while another factory at Bahadurgarh, in Haryana manufactures biscuits. Apart from this, Parle has manufacturing facilities at Neemrana, in Rajasthan and at Bangalore in Karnataka. The factories at Bahadurgarh and Neemrana are the largest such manufacturing facilites in India. Parle Products also has 14 manufacturing units for biscuits & 5 manufacturing units for confectioneries, on contract. All these factories are located at strategic locations, so as to ensure a constant output & easy distribution. Each factory has state-of-the-art machinery with automatic printing & packaging facilities. All Parle products are manufactured under the most hygienic conditions. Great care is exercised in the selection & quality control of raw materials, packaging materials & rigid quality standards are ensured at every stage of the manufacturing process. Every batch of biscuits & confectioneries are thoroughly checked by expert staff, using the most modern equipment.

- 35 -

____________________________________________________RURAL MARKETING

Marketing Strength...
The extensive distribution network, built over the years, is a major strength for Parle Products. Parle biscuits & sweets are available to consumers, even in the most remote places and in the smallest of villages with a population of just 500. Parle has nearly 1,500 wholesalers, catering to 4,25,000 retail outlets directly or indirectly. A two hundred strong dedicated field force services these wholesalers & retailers. Additionally, there are 31 depots and C&F agents supplying goods to the wide distribution network. The Parle marketing philosophy emphasizes catering to the masses. We constantly endeavour at designing products that provide nutrition & fun to the common man. Most Parle offerings are in the low & mid-range price segments. This is based on our cultivated understanding of the Indian consumer psyche. The value-for-money positioning helps generate large sales volumes for the products. However, Parle Products also manufactures a variety of premium products for the upmarket, urban consumers. And in this way, caters a range of products to a variety of consumers.

- 36 -

____________________________________________________RURAL MARKETING

Customer Confidence

The Parle name conjures up fond memories across the length and breadth of the country. After all, since 1929, the people of India have been growing up on Parle biscuits & sweets. Today, the Parle brands have found their way into the hearts and homes of people all over India & abroad. Parle Biscuits and confectioneries, continue to spread happiness & joy among people of all ages. The consumer is the focus of all activities at Parle. Maximizing value to consumers and forging enduring customer relationships are the core endeavour at Parle. Parles efforts are driven towards maximizing customer satisfaction and this is in synergy with their quality pledge. "Parle Products Limited will strive to provide consistently nutritious & quality food products to meet consumers' satisfaction by using quality materials and by adopting appropriate processes. To facilitate the above we will strive to continuously train our employees and to provide them an open and participative environment."

- 37 -

____________________________________________________RURAL MARKETING

Parles Rural Marketing Management

Marketing management refers to distribution of the firms product or service to the customers in order to satisfy their needs and to accomplish the firms objectives. Marketing includes developing the product, pricing, distribution, advertisement, and merchandising, doing personal selling, promoting and directing sales and service to customers. Marketing is an essential function because unless the firm has a market, or can develop a market, for its product or service, other functions of staffing, producing and financing are futile.

Developing rural marketing Strategies for Parle: a. Determine what the customers needs are and how those needs can be satisfied. b. Select the market that would be served. c. Decide what advantage that will give a competitive edge over other firms. Meeting customers needs Learning customers needs Conscious about the firms image Looking for danger signals

These are the questions which arise while introducing a new product, such as HIDE n SEEK.

- 38 -

____________________________________________________RURAL MARKETING

Market Segmentation:

A market should be defined in terms of various characteristics such as economic status, age, education, occupation and location. The best opportunity is to identify a market segment that is not well served by other firms. To determine the firms market segment, the fundamental aspects are summarized:

a. What is the place of the firm in the industry and how it can compete with others? b. Whether the firm is known for its quality or price. c. Image of the firm among the customers.

As Parle is a well established brand, its products are not new to the people. So, when they launch a new product, it becomes easy for them as the Company is known for its branded products all over the country.

- 39 -

____________________________________________________RURAL MARKETING

Strategic marketing Policies of Parle

Formulation of strategic marketing policies for certain areas of the Parle Are: 1. Morality and public service 2. Product 3. Market 4. Profit 5. Customer relations 6. Promotion 7. Credit Policies

Morality and Public Service

Policies on morality and public service consist of general statements expressing Parles desire to be honest in its dealings with public and its customers. They fulfill the demands of the consumers by supplying adequate quantities to them. And they follow morality by providing products at good and acceptable quality.

Parle often finds its most effective competitive weapon in the field of product strategy. It may concentrate on narrow product line, develop a highly specialized product service or provide a product containing an unusual amount of advantage and satisfaction. Competitors products, prices and services are constantly examined to determine whether the Company can build a better product.

- 40 -

____________________________________________________RURAL MARKETING Parle has always followed this principle of making the product as the most important thing rather than spending more on advertising and promotions. They feel that if the product has quality, than it will be promoted on its own. It will itself act as publicity.

Market policies are designed to clarify with geographic areas Parle wishes to serve and other marketing characteristics appropriate for it. The market policies are framed as per the market segmentation. As the Parle Biscuits dont have the targeted market as such, because it is a product consumed by all. So, there are market strategies as per the potentiality to cover the markets And the biggest achievement for Parle is that, it is available in Every Nook and

Corner of the country. It has even reached the interior most part of the rural areas. This has
been possible only by the foolproof distribution system.

Profit policies may require that sales goals be specified that will provide Parle a sufficiently large sales volume or profit as percentage of sales may be specified which calls for low marketing costs. As the biscuits of Parle are well known, they dont have to spend much on advertisements. So, the profit margins are increasing substantially. Initially, they followed penetration policy of pricing. And it worked. Still, the price is too low to be affordable by the common man. But, now they are planning to increase the prices of the biscuits, to increase their profits even more. This pricing policy refers to as Skimming the Cream.

- 41 -

____________________________________________________RURAL MARKETING

Customer Relations
Parles relationship with its customers may be indicated with a question Should the firm have a policy that customer is always right? Parle, also like other companys feel that consumers are the most important aspect. The consumers are always right because they are the sources through which a company comes to know about its performance. Same is the case with Parle. They follow the feedback by the consumers and do as they want. They consider the consumers views as of prime importance. Because, if the consumers are satisfied no one can stop the growth of Parle.

The pattern of Parles advertisement may reveal the promotion policies. It always follows a policy of tasteful advertising at all times. Sales promotion may be restricted to trade shows or to industrial publications or to some other advertising media. There are different promotion techniques like free samples, scholarships, etc.

Credit Policies

- 42 -

____________________________________________________RURAL MARKETING In order to stimulate sales, customer should be provided with credit. However, an appropriate credit policy is essential to be successful in granting credit. This is a useful policy as it attracts the consumers and the retailers. And also increases their confidence in the brand. The credit can be given by the company to the whole sellers or retailers. And in turn they will give credit to consume

4 PS considered in Parle

Biscuits are the commodity which was considered as a product for the rich class people. As this a product, that is traced out from western countries. So, it was considered to be an urban based product. The rural people were not able to get this thing. But this belief was being broken down by Parle. Parle Product Limited is a company which introduced their quality biscuits at a reasonable cost. A cost which is affordable by each and every class people. Even irrespective of the consumer of urban or that of the rural areas. Parle rules the market because it provides quality assurance with its penetrating potentiality pricing.

- 43 -

____________________________________________________RURAL MARKETING In a rural area, there are people with different economic statues. So, the Parle biscuits are being priced to suit their statues. Rich people buy this, because of good quality. And the middle class or poor people buy it, because it provides low cost benefit to them along with quality. The product policy and strategy is the corner stone of a marketing mix. To the marketer products are the building blocks of a marketing plan.

BISCUITS are the products of daily consumption. Consumed by, one and all. And when it comes to Parle biscuits, it is loved by all. Parle Products Limited has launched different brands of biscuits and confectioneries. Not only in urban areas but also in rural markets as well. They have entered the rural markets with the same price and quality. Not with all the brands but many of them. Out of which Parle-G is the most vital one. It has penetrated so much in the market that it has become the house hold name. Even it is compared to the meal of a person. That if a person consumes a full packet of biscuit instead of having lunch or dinner. And this is accepted by the consumers, as the nutritional value is high enough. This stands as a biggest accomplishment for the company. A Company needs nothing except the consumer satisfaction. And Parle has successfully gained that. This is its biggest achievement which creates a SUCCESS STORY.

The Core of the Product: - The core or the basic constituent of the product is the first component in the total personality of any product. Same is the case with Parle Products. It is - 44 -

____________________________________________________RURAL MARKETING presented as a product of daily consumption, which has a combination of unique features like Quality and nutritional value as well. For Example, the unique pack of Parle G biscuits, the rectangular shape of biscuits, the unique smell, the brand name, the price, the positioning as a product for all age people and even all class people, economically.

For example, PARLE G

19 grams 50 grams 100 grams 300 grams 500 grams

4 Biscuits 8 Biscuits 16 Biscuits 48 Biscuits 110 Biscuits

Re. 1 Rs. 2 Rs. 4 Rs. 10.00 Rs. 15.00

These are the various prices of Parle-G Biscuits in urban as well in rural areas. The price is too low, which is affordable by all irrespective of an individuals economic status. Rural consumers look for value than its price. Product strategy and pricing are inter linked with each other to deliver value at the right price. So, the biscuits of Parle are of good quality and nutritious. Also, the rural consumers are more interested in the utility of the product rather than packaging. So, its better to avoid sophisticated packing. And it will help out in reducing the cost as well. Simple packing should be adopted. Parle uses polyethylene sheets instead of boxes, which keeps the quality and quantity of biscuits and confectioneries in good condition.

- 45 -

____________________________________________________RURAL MARKETING The price is low enough as it has to penetrate in the market even in the interior of the country. It makes it affordable by each and every one.

Place refers to as the distribution channels adopted by Parle Products to reach even the interior part of the village. This is a quiet difficult and challenging task. But, Parle has always seen further to find solutions and grab opportunities. Determining Channels of Distribution A marketing channel is the pipeline through which a product flows on its way to its ultimate consumer.

Own designed channel of distribution : Channels are tailor- -made to meet the needs of the company. New products, like hide n seek etc., commonly require different distribution channels from those needed for products, which are well established and widely accepted like Parle G, Marie. Etc.

Avoid multiple channels: Multiple distribution channels sometimes create conflicts. Distribution will be adversely affected unless these conflicts are resolved. So, the Parle Company doesnt go for multi channel as it is harmful. So, they have only the established ones.

When to change the channel : Change in buyers location may dictate a change in marketing channels. Changes in concentration of buyers may also require a change in marketing channels.

- 46 -

____________________________________________________RURAL MARKETING







This shows that Parles Production units dispatching the biscuits to the well established agents or agencies. They send it further to the Whole seller. Now, the wholes seller and the agents send the biscuits to the small retailers.

Places where the Parle Products are available: 1. Kiryana Stores 2. General Stores 3. Tea Shops.

- 47 -

____________________________________________________RURAL MARKETING 4. Railway Stations. 5. Paan wallas. 6. Place where the cultural programmes of village are being organized, like melas, etc. 7. Mobile traders, etc.

Sales promotion consists of activities that have the purpose of making other sales efforts (e.g. advertisement) more effective. Some popular sales promotion techniques of Parle are: a. Special displays b. Offering Scholarship c. Running contest d. Distribution of free samples e. Offering free introductory services f. Demonstrating products In spite of all efforts spent in doing market research, sales forecasting and advertising and sales promotion, some one ultimately must do some personal selling of products or services. Selling through Agent Middlemen Selling Agent: The selling agents perform on the basis of extended contracts and negotiate all sales of a specialized line of merchandise or the manufacturers entire output. Usually, the agent has full authority concerning prices and terms and is the sole seller for the line represented and is not given market area.

Manufacturers Agent: the manufacturers agent or representatives is an independent business person who sell a part of output of two or more client manufacturers whose products are related but non-competing, on a continuous or contractual basis in a

- 48 -

____________________________________________________RURAL MARKETING limited or exclusive territory. Manufacturers use agents more often than any other type of agent middlemen. The agents do not take title to the goods, are paid a commission and have little or no control over prices, credit or other terms of sales.

Survey in Rural Area - Vadgaon

To enhance the project, a survey to gain primary data was being performed by me. I did the survey of retailers in Vadgaon, near by Pune. After retaining the information from the Parle Company itself, it made me curious to find out the demand of Parle biscuits in the near by village. I had collected the information from the various retail shops present in that area. About 15 retailers, I have approached. The questionnaire format was produced as below: -

OBJECTIVES OF SURVEY: The basic objective of the survey was to understand the concept of rural marketing clearly by means of Parle biscuits demand analysis. To find out the consumer behaviour in relation to the biscuits of Parle. To find out the competitors, local brands and imitation brands. To find out its effect on sales of Parle.


- 49 -

____________________________________________________RURAL MARKETING The survey worked got started by preparation of the Survey form (Questionnaire). The questions are related to the demand analysis of the Parle products. The survey was being conducted by the method of interviewing the sample size of 15 retailers at random. These retailers included the General stores and the Kiryana Stores available there. The Questionnaire is given in the Annexure.

Findings: Surprisingly, all the 15 retailers have Parle biscuits available with them. Not all the brands but most of them. All the retailers have in common PARLE G, MONACO, MARIE and KRACKJACK. About 9 retailers have with them the other brands of PARLE as well along with the above four, such as HIND n SEEK, FUNCENTRE, MILK SHAKTI, and CHEESELINGS. All the retailers were satisfied with the demand of Parle. They said that Parle is the most selling biscuits amongst all. And the brands of Parle are known very well to the people (consumers). They dont ask for biscuits, but just ask for PARLE. But, 4 retailers which are the smaller ones got some less demand as compared to others. Due to Britannias TIGER, the sale of PARLE G is being affected. But still people retain to the Parle brands. Due to competition, the Parles demand is being decreased to 15-20%.This was said by 6 retailers. But the rest 9 retailers said that the sales have been decreased only by 7-10%. Only 3 retailers said that the imitation brands take away the Parles sales. The imitation brands are PAYAL G, PAREL G, PRIYA G, PARAL G, etc. That too to a limited extent. And the rest 12 retailers were very sure about the Parles brand as they had no imitation brands with them. So there is no chance of fake sale. All the retailers have no complaint about the Parle among the consumers.

- 50 -

____________________________________________________RURAL MARKETING 2 retailers have the complaint that the brands like HIDE n SEEK and FUNCENTRE dont have much demand because people are not known to these brands as much.

The graphical representation of the findings of the survey is as follow: -

% 5% 3


5 3%

Parle-G Com petitor'sB rand Local B rand Lim itationsBrands

Suggestions: Some of the retailers, that are 3 of them, should not buy the imitation brands as this is a wrong thing done to the consumers as well as to the Company. So, 2 retailers who have less demand of some products should make the brand known to the people by giving them informed about the new brands which come up.

- 51 -

____________________________________________________RURAL MARKETING The retailers who have the imitation brands available with them should make the consumers aware about the fakeness of it. And also, the retailers who buy the imitations should stop buying. All the retailers should have all the products of Parle.


Parle-G is the world leader in biscuit sales

TIMES NEWS NETWORK [MONDAY, SEPTEMBER 15, 2003 12:26:36 AM] NEW DELHI: In 1929 when Indians were munching crispy imported biscuits shipped in by the British, an Indian set up a small factory in the suburbs of Mumbai to make toffees. A decade later, he started making biscuits without giving a damn to the imported biscuits that were freely available. And six decades later, one of the factorys product has emerged as the worlds single largest brand in any country. With annual sales volume of 179.9m kg, Prakash Chauhans Parle-G is the world beater in biscuits, followed by Italys Mulino Bianco with 110.3m kg and Americas Control Brand at 108.9m kg.

- 52 -

____________________________________________________RURAL MARKETING

Industry sources said Parle-G sells the most because it is the cheapest biscuit in the branded category. Most Parle offerings, unlike Britannia, are mass brands in the low and midrange price segments. As it has been around for over 60 years, it has a loyal consumer base. And for most, it is a food supplement rather than an evening snack. In mid-income households, kids averse to dal chawal are often given glucose biscuits to make up for the cereals, said an industry source. But the industry says that even though Parle-G is the highest selling brand, the per capita consumption of biscuits in India is still very low. On an average Indians eat 0.48 kg every year, while Americans eat 4 kg. But surprisingly, Indians eat over three times more branded biscuits (490m kg) than the Chinese (180.5m kg). Given that both India and China have conventional food habits where traditional snack items like idli, dosa, dhokla, samosa have a fair share, Indian consumers appetite for biscuits is enormous, says Anmol Sherpa, global services coordinator for AC Neilsen India. According to him, Americans depend on biscuits as they have very few ready-to-eat food items for snacks. They spend $6,897m on 1134.6m kg of biscuits every year, outpacing both India (490m kg valued at $583m) and China (180.5m kg valued at $406.3m). Besides heritage and price points, distribution is crucial to the success of any consumer goods brand. Even though Kellogs launched Chocos at Rs 5/pack, its distribution strategy was not up to the mark. Parle has 1,500 wholesalers catering to 4,25,000 retail outlets. Chocos were later taken off the shelves. Biscuits require a mass distribution network and Kellogs had limited itself to the up market outlets with its premium-priced cereals. Parle over the years has built a robust distribution network. For the fast moving consumer goods industry, the packaged biscuit basket has emerged as a winner with all other product lines like soaps, detergents, hair oil, packaged tea biting the dust. The quick, tea-time snack has zoomed into a Rs 2,500 crore industry clocking 3-4% growth annually.

- 53 -

____________________________________________________RURAL MARKETING

Parle creates a flutter in the atta market

KALA VIJAYRAGHAVAN TIMES NEWS NETWORK [ SUNDAY, SEPTEMBER 28, 2003 10:23:19 PM ] At a time when most branded atta majors are facing survival issues, mass-market biscuits market Parle Products, has decided to enter the atta market. The 60-year old company has launched the Parle G brand of chakki fresh atta in certain markets in India . This would mean further competition for industry majors like HLL, ITC, Pillsbury and others, given Parle Gs brand equity in the foods market and its huge distribution network. The brand is priced at more or less the same level as the existing market rates. A 2 kg pack of Parle G atta is being offered at Rs 35.50 while a Rs 5 kg is being offered at around Rs 90. Parle officials were unavailable for comment. Analysts feel that that it is logical for Parle Products to offer a product which is the core of their backward integration. They have little to worry about as far as distribution strength or creating a brand presence is concerned. It is certainly not going to be easy for the other existing FMCG majors in the foods business said an analyst. The recent entry of players like ITC and ConAgra, besides the existing ones like HLL, Pillsbury and Cargill have intensified competition in a market where margins are wafer-thin and the only way to profits are volumes.

- 54 -

____________________________________________________RURAL MARKETING The Indian atta market is estimated at around 45 million tonnes, of which branded atta is only 3 lakh tonnes, or less than 1%.

On an average, a 5 kg pack of branded atta is sold in the range of around Rs 87-Rs 90. The price fluctuates widely depending on which scheme is being offered by the company. If a competitor drops prices, all the brands follow suit. Theres not much choice for these companies since most stockists refuse to push the uncompetitive brand, sources said. Regular purchasers of the branded attas are institutional buyers like hotels, airlines or food caterers. However, there are local suppliers in all majors markets like Mumbai, Delhi etc who have a loyal customers base. Currently, Parle Products has offerings in the mass and mid segment of the biscuits market. Parle G biscuits, market sources said, are consumed more as food supplements rather than a snack.

- 55 -

____________________________________________________RURAL MARKETING

View Of Consumers On Parle Biscuits!

Here are some views of the consumers for Parle G biscuits which are collected on the basis of questioning them in the rural area of Vadgaon.

Rajeshri says,
I do not think this product is targeted for any age group. Parle Products Pvt. Ltd. (Mfg. by Bunty Food Product not a known to name) markets Parle G. Parle is reputed old business house and incidentally the only Indian big player in this field. I trust them not because of Swadeshi feeling but due to their endeavor to give their best to consumer. Price and consistency in quality of Parle G reflects tells about their attitude.

So, some of the essentials are there in this biscuit like many other varieties. However, we need many other things for survival and good health. But we cannot expect all essential from one pack of biscuit.

H. patel says,
Parle G Biscuits which are manufactured by Parles in India. They are more than 50 years old and have been rated as the largest selling Glucose biscuit in the whole world in terms of volume. This biscuit is one of the cheapest and tastiest. I always buy a packet or two when I am traveling by train as they are not only tasty but also nutritious. As the famous advertisement goes swaad bhare, swaasthya bhara aptly describes this biscuit. This biscuit is recommended by doctors for convalescing children but you need not worry any age will enjoy this biscuit.

- 56 -

____________________________________________________RURAL MARKETING I will end by saying that you should try out this biscuit and once you have bitten it you will always eat it.

Sushma says,
Hey This is one brand of Parle I vouch for. 1 .The taste is excellent and small children love it, they should reduce the sweetness a bit as it is good for diabetics who have to eat a little at a time to get their energy. 2. The lingering taste and flavour I like, theres no doubt I eat it because I like it, alternate flavours out here you get plenty the only one that beats it is the Danish cookies. Which is my second best. 3. You see out here we get so many types of biscuits that if youre new out here you wont know what to buy. I like the short bread biscuits as they are less sweet. If I do not get Parles then only. 4. I should say people of all ages can eat it as an energizer instead of glucose. Believe me I cannot resist it; I am very much always an Indian at heart and try never to forget that. So Parles heres a brand I vouch for, I know as said by me my opinions will be downright honest. Another thing if possible always carry a packet it saves you from hunger till you reach wherever you want to, I used do it in India and still do. 5. Give it to your kids they will cry less, as it will always keep them full and it softens very fast for babies.My advice to Parle would be keep up the product, only sugar a bit less then its a must for all, young or old Parle biscuits are gold.

J martin says,
Parle g is best for health and hunger- we can offer it to any body- no age barrier, it is best substitute to any other outside food what we always doubt and fall sick. It is best for students and patients. But also preferred in party and for day to day use. In market many

- 57 -

____________________________________________________RURAL MARKETING other glucose biscuits have come, but Parle the name stands for quality and guarantee- a trusted company is always rely- and i and my family always like to buy glucose d of only Parle Company. Yes, cream biscuits we buy of other company but, to my children i prefer to put Parle glucose, and they also love it.

The detailed study about the Parle products mainly PARLE G, gives out a Success Story in rural areas. This shows that products even at low prices can earn substantially considerable profits. The results of the survey also indicate the importance of Parle G in comparison with its competitors, local and imitation brands. The views of the consumers on the Parle G biscuits also put light on its vitality. To sum up in general, the Indian rural market has grown in recent years in size, range and sophistication. Economic reforms in India have brought about major changes in the whole market environment. Successful rural marketing calls for a review of the nature and profile of rural consumers, designing the rural products to appeal to them, and adopting suitable media as well as appropriate strategies for communication and distribution. Economic reforms and changing economic conditions have clearly pointed out that the rural market is the future market of India. To become successful and contending players calls in for a review of rural marketing environment, rural consumer, media and strategies to be adopted. As they say,

The game has just begun. And its Time for players to understand the rules, Play the gameand


- 58 -

____________________________________________________RURAL MARKETING

- 59 -