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Rural marketing is a function which manages all those activates involved in assessing, stimulating and converting the purchasing power into an effective demand for specific products and services, and moving them to the people in rural area to create satisfaction and a standard of living to them and thereby achieves the goals of the organization. NATURE AND CHARACTERISTICS OF RURAL MARKET There goes a saying that the proof of the pudding lies in the eating. So also the proof of all production lies in consumption/marketing. With the rapid pace of technological improvement and increase in peoples buying capacity, more and better goods and services now are in continuous demand. The liberalization and globalization of the Indian economy have given an added advantage to sophisticated production, proliferation and mass distribution of goods and services. Taking these into consideration, the question may arise whether marketers should concentrate their activities in urban India consisting of metros, district headquarters and large industrial townships only, or extend their activities to rural India. Rural India is the real India. The bulk of India’s population lives in villages. In terms of the number of people, the Indian rural market is almost twice as large as the entire market of the USA or that of the USSR. • Agriculture is main source of income. • The income is seasonal in nature. It is fluctuating also as it depends on crop production. • Though large, the rural market is geographically scattered. • It shows linguistic, religious and cultural diversities and economic disparities. • The market is undeveloped, as the people who constitute it still lack adequate purchasing power. • It is largely agricultural oriented, with poor standard of living, low-per capital income, and socio-cultural backwardness. • It exhibits sharper and varied regional preferences with distinct predilections, habit patterns and behavioral characteristics. • Rural marketing process is both a catalyst as well as an outcome of the general rural development process. Initiation and management of social and economic change in the rural sector is the core of the rural marketing process. It becomes in this process both benefactor and beneficiary. 2. What is the attractiveness of the rural markets over urban markets? Rural markets have become the new targets to corporate enterprises for two reasons: 1. Urban market has become congested with too many competitors. 2. The market has reached a near saturation point. Various factors which have made rule markets viable:1. Large population 2. Raising prosperity 3. Growth in consumption 4. Life-style changes 5. Life-cycle advantages 6. Market growth rates higher than urban 7. Rural marketing is not expensive 8. Remoteness is no longer a problem
How do you Segment Target and position products and services in the rural markets?
Rural market segmentation, targeting and positioning Rural markets are widely scattered and the culture, buying habits etc. vary from one region to the other. Marketers therefore have to divide the market into several sub-markets, which is called ‘market segmentation’. Rural segmentation is very tough to implement because there are a lot of parameters that have to be taken into consideration. Segmenting, Targeting and Positioning (STP) plays a crucial role in the marketing strategies of a firm. A rural marketer has to be careful and cautious in studying the consumer for STP. Segmentation Rural consumers are not homogeneous as far as economic conditions, literacy, lifestyles or buying behavior etc are concerned. It would therefore be unwise for firms to assume that the rural market as a whole and be served by a single offer or a single product-price-promotion combination. Firm’s can analyze the rural consumer indepth and through market segmentation select relevant segment as target markets by developing a distinctive positioning strategy. Identify segments variable A company can segment rural markets by using several bases. Following are some of the variables according to which companies can segment rural markets in India: 1. Geographic segmentation2. Demographic segmentation3. Psychographic segmentation4. Buyer behavioral segmentation Segment the market The marketer has different variables for segmenting the rural market; he has to decide which ones are the most suitable. Since the characteristics of the rural customer are widely spread across several variables, different bases can be used in combination to segment a given rural market. The different variables can be used in a suitable order for the market concerned; this type of segmentation I called multi level segmentation. Multi level segmentation provides the advantage of better selection of target markets and better choice of marketing mix. Develop the profile After deciding the variables according to which market segmentation into be done, a marketer needs to develop the profile of the markets with the help of selected variables. Any elements from the variables listed above can be used by a marketer for segmentation purposes. A marketer should use a combination of variables to segment the rural market, which is very large and scattered. Select the target market Selecting the target market is related to, but not synonymous with, market segmentation. It is the next step to multi level segmentation. Target market signifies only those segments that a company wants to adopt as its market. Here the step of selection is involved. Evaluate the market Evaluating the target market is the next step. Target markets can be evaluated with reference to their relevance, accessibility, size and profitability. The sales and profit potential of each segment must be accessed. The marketer also needs to evaluate its resources and then accordingly choose the market.
Evaluate the segments A segment should be selected only after a proper evaluation of different target segments is made. The marketer has to evaluate the segment selected, whether it is sizeable, growing, profitable, accessible, and compatible with the firm’s resources and capabilities etc. Targeting After a thorough evaluation of the selected segment, the marketer has to choose the target market and then formulate marketing strategy, which I further linked to the positioning formulation. Marketer cannot formulate an effective strategy without proper targeting. It is through the process of segmentation and targeting that a marketer understands not only the characteristics of each of the segment but also the distinctive excellence that he requires to cater to specific needs of consumers in each of them. Positioning Positing is a platform for the brand to get through to the target consumer. In positioning, the firm decides how and around what parameters the product offer has to b placed before target consumers. The need for positioning arises from the fact that a product cannot be everything to everyone but has to be something to someone (segment).Positioning can be done by taking into consideration some unique Features of the product, some special needs of the market or some noticeable gap in competitor’s products and then positioning the product around some features or a combined one for particular target consumers. Identify the positioning concept The marketer has to take into consideration the fact that the rural consumer is governed by certain motives while buying a product. Marketer who is trying to identify the positioning theme for his product haste study the possible buying motives of rural consumers and figure out how to appeal to them. Select the concept Now that there are so many parameters for positioning the product, the marketer has to select the best and effective alternatives. A marketer has to select a positioning concept that is a bride between the products and the target market. Often products fail in the initial stage due to improper selection of the positioning strategy when they are launched. Develop the concept Once the positioning strategy is selected, the marketer needs to develop the concept in an effective manner such that it can be properly addressed to the target market and has to find the most appropriate media that reaches the maximum part of the target market effectively. The marketer should try to relate and link the positioning strategy to the target consumers and ensure that it appeals to them. Communicate the concept The advertising agency needs to effectively communicate the positioning that the marketer seeks to the target consumer. The ad agency also has to come up with the appropriate media, message, source, headlines and display so as to effectively communicate the positioning to rural consumers. An effective advertisement is one
that clarifies the target market, value proposition and the supporting product differentiation- in other words clarifies successfully the positioning strategy of the product. Offer product After STP, the company should offer the rural product to the market for acceptance. As communication about the product has already been done, the company will just have to make it available to rural people with the help of it distribution network. This will further lead to sales of products.
4. Explain the significance of product strategy compared to pricing strategies in the rural markets?
Rural Product Product to be marketed with the requirements of the Rural Consumer should not be an extension of urban offerings (Philips launched Free Power Radio – does not require Battery/electricity you wind it with a lever and radio runs For approximately 30 min. The following is the classification of products in the rural markets. 1. FMCG (HLL, Dabur, Marico, Colgate=Palmolive Coke, Pepsi) 2. Consumer Durables TV ,Fridge, Fan, Presssure Cooker, Cycle, Two wheelers, Sewing machines, watch, mixer grinder, radio, music system, Fans, Washing machines (Philips, LG, Videocon, Onida )
3. Services Telecom, Banking, Health care ,Insurance (Airtel, BSNL, SBI, PNB,Dena bank,) 4. Agri-inputs
Seeds, pesticides, tractors (Rallis India, Bayer,) The following are the characteristics of the products in the rural market Rural Products Easy to Use After sales support Conveniently packed- success of Sachets Product literature to be simple Have a logo – easy to identify eg Thums Up Rural Packaging Packaging material –plastics, poly packs, unbreakable materials Looks - attractive colors (like all tea companies)
Size and convenience- small is beautiful Rural Branding 1. Brand Name 2 Create Brand Identity 3 Enhance Recognition 4 Build a Brand Image 5 Countering Spurious brands Look alike, Spell alike, Duplicates Enhancing Brand Strategies with Social Perspective Soaps for Hygiene Cooking gas for environment Creating need by more awareness Partnering with a long term perspective requires total belief and Commitment - to the people, to the processes, to their own employee. Need to work for a cause – ITC, Hindustan Petroleum, HLL , Colgate Palmolive , Several Banks are a few such example The following are the pricing strategies in the rural market:-
RURAL PRICE Pricing In Rural Market plays a key role in the success of a product RURAL PRICING OBJECTIVES Have a long run perspective Idea is to penetrate first Increase Volume Make using the product a habit Volumes to take care of the Margins Keep eye on Competition Price The following may help in addressing the issue Low cost –less amount (small packages- sachets) Simple but colorful packaging – eg. success of biscuits Refill packs Value engineering – eg soya protein in place of milk protein METHODS OF PRICING 1. Cost –Plus Pricing = cost of product +distribution +profit 2. Value Pricing (VFM-Value for Money) High Benefit 3. Power Price – eg Re 1, Rs 2, 3, 5,10 4. Penetration Price – Introduce at low and hike price after success 5. Differential Pricing –Different price for different market Price Gap – Comp prices – range
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