INTERNATIONAL MANAGEMENT INSTITUTE, BHUBANESWAR

RURAL MARKETING TERM PAPER REPORT

(MK609)
On

Submitted To: Submitted By:

Prof. Pravesh Kumar Padamwar Souradipa Kanjilal
Sharmeen Khan
SEGMENTATION

COLGATE separate its market into two

segments –

1. Oral care- Colgate sell products

mainly pharmaceuticals and its I
the global leader in this segment
2. Personal care- It also has strong
market for personal care products
like shampoos, shower gels, soaps
etc.

Segmentation increase the customer

loyalty in rural market. To target the audience Colgate, consider following factors –

 Geographic segmentation – Colgate expands business over 200 countries. The company ell
different types and number of products in different markets. E.g.- in US it sells 16 varieties and
in UK 22 types of toothpastes.
 Demographic segmentation – Colgate segments its market by demographic mean like gender,
age, education, income etc. it has separate products for kids, teenagers, adults, illiterate, lower
income etc. e.g.- for girls DORA the explorer toothbrush and for boys PONGEBOBS square pants
toothbrush.
 Psychographic segmentation – Colgate classify according to social class, personality, lifestyles of
the customer. E.g.- whisp toothbrush having toothpaste already on it specially people who
travel a lot.
 Benefit segmentation – It is Colgate’s basic problem solving products. It requires special types of
advertising and targeting through realistic ads. E.g. sensitive pro-relief toothbrush and
toothpaste, whitening toothpastes.

SALES AND DISTRIBUTION

Many companies find that rural market is the huge market to expand their business but distribution is
the main problem that arise over there. And it is impossible to apply the urban distribution strategy in
rural market. Problem that arises are lack of transport facilities, pucca roads, proper retail outlets, and
long distance between villages. Colgate, which is 2nd of widely distributed product across the country. It
have 940direct accounts, 3.8 million retail outlets. We will talk about some initiatives taken by Colgate in
further discussion below to strengthen its distribution network.

 Wholesalers
The Indian wholesaler are mainly food grain merchant who belief that business is risky in nature than
distributive in nature.

 Retailers

Village retailer are much close and are in much reach to the rural consumer.

- Credibility: he enjoys the dependency of the villagers.

- Influence leader: shelf display is less in rural market where retailer is the influencer.
- Brand promoter: retailer is the selector of brands that which product to sell.
 Vans

Mobile vans are covering 80 million rural consumer per year for distribution and promotion. Where
vans cannot reach to the inner villages, there bicycle vendors do the same work.

 Weekly haat, bazaars, shandies

There are 47000 haats throughout the country. Its is the most traditional way to trade goods and
purchase household items.

 Melas and fairs

There are 8000 mela in rural india every year. It is another low cost distributional channel of the
rural market.

 Educational films

Short films are shown between the theatre to educate farmers or other people of the villages about
the product and later after the movies end free sample are given to the audience.

 ITC E-Choupal

Colgate tied up with ITC and rotary to spread oral hygiene in villages across India. It targeted 136
villages in Uttar Pradesh and 36 villages in Maharashtra.
  Teachers training program

Colgate launch School Dental Health Program a online school curriculum.

 “Oral health educational program”

Colgate targeted rural village population of 30000-100000 with dental check up camp where dentist
teach the villagers the benefits of oral hygiene.

Process Flows in COLGATE

1. Business planning process

2. Vendor managed inventory
3. Order frequency, supply and payment flow
4. Communication through review meetings
Retailers’s margins - For more value toothpaste like Colgate sensitive, advanced white margin is 15% and
For normal regular toothpaste margin is 10%

Distributer’s margin - They get margin of 5.95% ( including 0.25% for ullage abd 0.70% for tax paid on
profit)

AFFORDABILITY

Colgate ensured the affordability of its product in the rural market by packing it in small sachet tubes of
price between Rs. 5/- to Rs. 15/-. At the same time, the quantity offered by Colgate is much higher than
its competitors at the same price. Colgate seeks to have greater dominance in the market of dental care
with its existing set of products. Hence to expand its reach and rural market share, it regularly play with
the price and quantity of their product which they offer in the rural market. It also launched dental
health campaigns in rural localities where the rural population could get access to free dental check-ups.

Company incurred very low per head cost as rural people do not use tooth brush. Rural people were
comfortable with the powdered form of toothpaste. They used their fingers instead of toothbrush.

ACCEPTIBILITY

For rural population to accept the Colgate products, they tried to position themselves as the one
offering innovative products with different brand name such as “Vedshakti”, however under the
umbrella of Colgate Palmolive. To ensure acceptability, it was necessary to increase the awareness
regarding the brand and its products first. They made sure that rural market understand the relevance
of their product by several dental health campaigns. Most of the rural people did not find it necessary to
brush their teeth even for one time a day. Hence, upon entering the rural market, Colgate focused on
the rich and consuming segment of the population.

To make ensure that the products do not get unacceptability in the market due to its high price as most
of the rural people could not afford to buy bigger packs at higher price, Colgate launched its sachets
products. As maximum rural population earn from daily wages, they have a tendency to buy in smaller
lots.

AVAILABILITY

Apart from selling products from rural retail counters, Colgate made its products available in Melas,
Haats, Vans, Free dental check-up camps, free sample, “Sampark” campaign. Under this campaign, the
sales representatives went for door to door selling of the product in which they explained the relevance
of brushing teeth and using Colgate toothpaste. It also took support of ITC e-choupals (Coupal sagar).

AWARENESS

Markets are not made,they are found. So to find market in rural places it is needed for the marketer to
be creative. They have to skillfully communicate with scattered cutomer with variations in their
language and lifestyles. Colgate always use to provide high quality product so they now have to think
bigger and change rural peoples mindset from using neem daal manjans to toothpaste. In 1998, Colgate
entered into 20000 villages of which 15000 villages have never used toothpaste and toothbrushes.

Colgate create awarness in following ways –

 Melas
 Door to door selling
 Haats
 Sampark campaign
 Vans
 Free dental checkup
 Free samples
 Wall paintings

SAMPARK Penetration

Many people in rural areas still does not have radio or TV. So mass media if not costly will not be able to
reach every people. Sampark was implemented as the promotional scheme for rural people. It is a
special program for advising people in door to door selling.

It initiated a campaign with Indian Dental Association in which they provided dental health care
assistance by providing a toll free number accessible through ordinary mobile phones.

The Threesome Requirement for Strategic Promotion

1. To segment customer according to region and understand the charechter of the target market.
2. To create proper motivation and communication startegies and make the targeted audience buy
the product.
3. To search what type of media can be given to what locations.

Promotion

Colgate adopted a good promotional strategy and by this way it can able to maintain its image as well as
sales. Colgate mainly focuses on different type of promotional strategies i.e. advertiing, sales promotion
publicity etc. colgate carefully observe the market and the culture around itself. It produce product and
promote them specially for kids with the label of various cartoon charechters like Barbie, Barney,
Spongebobs etc which the children would love to buy. Colgate not only use the traditional advertising
for its promotion but it also make use of internet. Sometimes Colgate offer product in bundle or provide
it in low cost according to affordibility to faciliate customer. Colgate’s promotion help the company to
build and maintain its brand image. By using AIDA and IMC, Colgate’s promotional activity helps to build
a strong convincing customers.

INNOVATION

They have successfully advertised their brand in the Kumbh mela by distributing free sachets of Colgate
toothpaste, mostly of Colgate Vedshakti. Apart from this, their Kumbh mela campaign also included
distribution of safety bands to be tied on the wrist of specifically kids with their guardian’s name and
contact number written on it. This move aligns their positioning of being concerned for about the safety.

PACKAGING

Primary – cylindrical tube which is made up of plastic and is germ free.

Secondery – use of recyclable cardboard box for protection of the primary packages.

Tertiary – comes in carton which becomes easy for shipping, handling and storage.

Colgate use the red and white combination for packaging which look attractive for the customers
specially for the rural consumers. This type of packaging technique is most visible and noticable in the
shelves of the kirana shops.

Colgate like other corporates move towards recyclable packaging. It made some commitment which are
asr follows –

 By 2020 three out of its four product catagories like home care, personal care and pet packaging
will become 100% recyclable
 The oral care product category will develop into fully recycable toothpaste tube.
 Will stop the ue of PVC.
 Recycled packaging will increase from 40% to 50%.

FUTURE GROWTH

Colgate is the most successful rural brand in India and its it’s future also seems bright.Long term growth
drivers of COLGATE

 Strategic initiatives
 Target BOP – India 1.13 billion people among which 75% lives in vilages. There are 27
cities(11%), 396 towns(8%), 4738 semi-urban(9%), & 600000 villages(72%).
 Improve penetration – by developing better distribution network and introduce other modes of
oral care.
 Increased usage – improve consumption by increasing frequency of usage.
 Population growth – population increase of 1.5% annually will help the increase of oral care.
 Innovative promotions – which will create demand in rural areas.
  Build awareness – communicate with school children, Primary health workers and communities
in rural belts to spread the benefits of oral healthcare.

Convincing rural consumer from shifting from charcoal, neem ticks, ash, husk salt misxture and other
traditional form to using toothpaste is a huge challenge for colgate.

 Colgate suraksha chakra – convince cutomers to switch to toothpaste/toothpowder thus

launching more herbal product (colgate charcoal, colgate active salt etc) in rural segment by
providing branded product at comparatively lower price.
 Oral health care program- from conducting free dental check up camps to free sample
distribution, influencing villagers through street plays to convey importance.
 Other initiatives – operation red storm, oral health month (september-october), little dentit
program.