RURAL MARKETING

DATE : 03-04-2010 PRESENTED BY : SUSHMA. C. S VIJAY JAMWAL CHIDANANDA. N

WHAT IS RURAL?
NCAER (National Council for Applied Economic Research) define Rural as villages with a population less than 8,000 with 75% of population engaged in agriculture. NABARD (National Bank for Agriculture and Rural Development) The locations which are having a population up to 10, 000 are considered as Rural Areas.

RURAL MARKETING
Rural

marketing can be defined as a function which manages all those activities 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 areas to attain satisfaction and thereby achieve the goals of the organization.

Low per capita income Low disposable income Inadequate fixed income (daily wages) PROBLEMS IN RURAL MARKETING Infrastructure problems Roads, power Low awareness Communication- difficult & expensive Too many languages Geographic Spread Majority ² depends on Agricultural Income Acute dependence on monsoon Consumption linked to harvest

Simple Model of Rural Consumer Behavior
Need Recognition

Pre Purchase Search

Evaluation of Alternatives

Purchase Decision

Post purchase behavior

New Entrant Company starts Rural Market first & then ventures in Urban Market (eg Chik & Meera Shampoo) Mid- Entrant Company starts Rural Market after success in Urban Market (eg HUL, LG) Late - Entrant Company starts Rural Market after success in Urban Market for long (eg Cadbury) Purpose R G Retain Growth

ENTERINING THE RURAL MARKET

Rural Marketing Strategy
Profile the Rural Market
P L A N N I N G

Profile the Consumer

Market Research

Segmentation Targeting Positioning

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Rural Product Rural Pricing Rural Distribution Rural Sales Force Management

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F E E D B A C K

Rural Communication

Monitor the Rural Strategy Feedback & Control

DEVELOPMENTAL MARKETING
marketing is a process through which awareness is created; it could be demonstration it could be presentation free samples it could be through tie up e.g. tie up with Bank (Hyundai did with PNB and SBI subsidiaries up to 30% sale of Hyundai from Rural/Semi Urban areas)
Developmental

PRODUCT

Product to be marketed with the requirements of the Rural Consumer should not be an extension of urban offerings. Product Strategies Small unit packing (Red Label Tea with Rs. 3) New Product Designs (Nokia 1100) Simple and Attractive packaging Brand name: For identification, the rural consumers do give their own name of an item. The fertilizers companies normally use a logo on the fertilizer for better identification. A brand name or a logo is very important for a rural consumer for it can be easily remembered. Nirma made a peeli tikki especially for those peeli tikki users who might have experienced better cleanliness with the yellow colour bar as compared to the blue one although the actual difference is only of the colour. e.g.: Coca-Cola targeted the whole Indian rural market with the positioning of ´Thanda Matlab Coca-Colaµ advertisements because most of the villagers say when wanting a drink refer to it as Thanda«« so Coca-cola used that word

PRODUCT AND PACKAGING
Easy to Use  After sales support  Conveniently packed- success of Sachets  Product literature to be simple  Have a logo ² easy to identify easily RURAL PACKAGING  Packaging material ²plastic materials, poly packs, reusable containers etc.  Looks - attractive colors (like all tea companies)  Size and convenience ( small quantity is preferable) 

PRICING

Ensuring price compliance: Rural retailers, most of the times, charges more than the MRP. The manufacture has to ensure price compliance either through promotional campaigns, as was done by Coca Cola, or by ensuring the availability of products at the retail outlets directly. Low volume-low price strategy: This strategy of reducing prices by reducing the package size in order to make it appear more affordable, is delivering very good results for a large number of FMCG product categories, in the rural markets of India. In categories where maintaining the price point is extremely critical, this strategy is delivering very good results Large volume-low margins (Rapid or slow penetration strategy): Marketers have to focus on generating large volumes & not big profit margins on individual products. If they price their product at a level which can lead to good volumes, then they can still generate good returns on the capital employed

METHODS OF PRICING

1.

2. 3. 4.

5.

Cost Plus Pricing = cost of product +distribution +profit Value Pricing (VFM-Value for Money) High Benefit Power Price ² eg Re 1, Rs 2, 3, 5,10 Penetration Price ² Introduce at low and hike price after success Differential Pricing ²Different price for different market segments

PROMOTION
Advertisements ² mainly through TV and print media Think in local perspective Simplicity and Clarity Narrative story style (Red Label Tea with the family stories in its ads) Choice of Brand Ambassador Brand Ambassador for the rural markets need to be picked carefully as urban successesmight not get replicated in the rural markets. Eg., Govinda boosted the sales of the Mirinda (soft drink) in the rural markets.

DISTRIBUTION

Segmentation Personal Selling Better Supply Chain Service Centers Utilization of public warehouses and transport system Wholesalers Retailers ( in rural areas) - enjoys credibility - influence leader - brand promoter - relationship marketer Delivery Vehicles

RURAL MEDIA

News papers (local news papers) Television (regional channels) Radio (telecast of special programs for farmers) Wall paintings Tree boards Melas Group meetings Door to Door selling Product Display contests Pamphlets with the daily news papers Hoardings Field Demonstration Audio Visual publicity vans

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