RURAL MARKETING

Assignment 1
Group 4

Submitted by: 1. 2. 3. 4. 5. Ashwini Rakhame Navin Yadav Ram Ashish Rahul Kumar Sadiq Siddiqui

What is Rural Marketing

Developing of the market in the area as defined as Rural Hence it could be aptly said that it encompasses the Activities such as developing the process to meet this Objective Right product at the right price to the right people at the right time. Exchange between rural and Urban is a Factor . Could be Urban to Rural: Rural to Urban, Rural to Rural

Size of the market Largely Untapped Too crowded Urban Market

Reasons for Going Rural

Income on the rise/disposable income Income from other than agriculture Income flow from urban /abroad Better exposure - media
Great success stories HUL 50% Colgate 50% LG 50% Asian Paints 60% Dabur 40% Videocon 40% Cadburys 25% Hero Honda 40%

Some facts Regarding Rural Markets Extremely Diverse Market Villages Size, Population, Spread, Income Literacy levels , awareness level, languages Urban Market scope and saturation Flow of funds from Urban National /International Literacy levels on the rise Media Penetration

Contd Rural India buys Soft Drinks approx 45% of all soft drinks Almost 50% motor cycles Approx 55% of cigarettes Half the total market for TV,Fans, pressure cooker, bicycles Washing soap, tea, lades, salt, toothpowder Coca Cola is growing over 35% in Rural areas compared to Over 22 % in Urban According to Hasna Research , a market research farm that Has published a Guide to Indian Markets 2006 Consumer durables in Indian Villages risen sharply TV Sales up by 200% Motorcycle by 77% There are 3000 households in rural area that earn > 50 lakhs
We have come some way ahead but there is a long way to go

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

Urban & Rural Markets

Key Differences

Per capita Income Disposable Income Literacy levels Infrastructure Communication Geographical Spread Customer has many choices

Youth of a rural market

Product: Brand loyal on every products. e.g. Colgate, Head and shoulders, Nokia, Reliance, Airtel, wheat, salt etc. Place: Often using Local market Price Vs Quality: more focused on quality and features. Often avoid SALE products Promotion: Television, local News paper and mouth publicity

A working men of rural Market

Product: Brand value in the sense of FMCG like soap, shampoo, oil but prefer local product for rations. Place : Local market Price: Highly price sensitive, often shop during SALE. Promotion: Word of mouth mainly

Profile of the Rural Consumer

Profile of the Rural Consumer

>Low Literacy Level >Low Income Level >huge Geographic Spread Urban population concentrated 3200 cities town Rural scattered over 630000 villages >Reference Group Health Workers Doctors Teachers Panchayat Members Rural Bank Managers District Managers Occupation Principal Farming Trading Handicrafts Cattle & Poultry Farming >Media Habits Fond of music T.V Radio Video Films Generally they have a lot of reservation/inhibition rigid in their behaviour

RURAL CONSUMER CLASS

The Affluent Class The Middle Class The Poor RURAL CONSUMER BEHAVIOR How does an individual decide to spread his Available resources (time,money effort) on Consumption-related products. That is what they buy why they buy when they buy where they buy it how often they buy it how often they use it Well Off Aspirant Poor Climbers

Very Rich

Simple Model of Rural Consumer Behaviour

Need Recognition

Pre Purchase Search

Evaluation of Alternatives

Purchase Decision

Post purchase behaviour

Factors that Influence Rural Behaviour

Stimuli
Inputs to any senses Products Package Commercials Brand image Reference Information cues about the characteristics of the product

Attitude
>Consumer belief Consumer feelings

Perception
Depends on

Exposure
Eg IFB had not adequately Educated farmers about the Washing machine -they thought It was a churn for making large quantities of lassi (prosperous village of Punjab)

Interpretation
Iodex muscular pain Reliever used on animals After hard days work in MP Godrej hair dye on Buffaloes To make them look better in Village haats in Raichur

Key Challenges 4A

Awareness Affordability Availability Acceptability

4 Ps Promotion Price Product Place

4 As Awareness Affordable Acceptable Available

RURAL MARKET STP: SEGMENTATION TARGETING & POSITIONING

SEGMENTATION Very Varied hence proper segmentation very essential Geographic: Region North, East, West and South Village size Climate Demographic Age Family Size Gender Income,Occupation,Education,Caste Psychographics (consists of psychological: sociology: anthropological) Lifestyle Rigid ,changing attitude, urban influence Personality Authoritarian, Ambitious Behavioral Occasions Regular, special occasion Benefits User status regular user, first time user, non user Usage rate Light, medium, heavy Loyalty None, medium, strong Attitude to ) positive, negative, hostile Product Different variables could be used.. multilevel segmentation

Class

Rural Consumer Classification

1995-96

2006=2007

The Affluent/Very Rich

Households owning personal cars/jeep with other products

1.60%

5.60%

The Well Off

Household owning any/all of the foll. A.C/Motorcycle/scooter/washing m/c color TV with other durable (No car/jeep)

2.70%

5.80%

The Climbers

Households owning any/all of the foll VCR/VCP,mixer grinder sewing m/c audio equip, B/W TV,geyser with other durables (not those mentioned in above 2 categories)

8.30%

22.40%

The Aspirants

Households owning any/all of the foll bicycle,electric fans, electric iron with other durab (not those mentioned in above 3 categories)

26.00%

44.60%

The Destitutes/Poor

Households other than those classified above Households owning any/all of the foll wristwatch,pressure cooker,cassette recorder transistor/radio

61.40%

20.20%

Source - NCAER

Rural Product
Product to be marketed with the requirements of the Rural Consumer should not be an extension o 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. Classification Of Rural Products FMCG (HLL, Dabur, Marico, Colgate=Palmolive Coke, Pepsi) 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 ) Services Telecom, Banking, Health care ,Insurance (Airtel, BSNL, SBI, PNB,Dena bank,) Product Life Cycle (PLC) Agri-inputs Seeds, pesticides, tractors Maturity (Rallis India, Bayer,) Take Off Launch

Decline

Points to note 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

Consumption by age and life-cycle stages

Age Below 12 13-19 20-40 40-60 Above 60 Life Cycle Stage Childhood Teenage Young Middle age Old Age Product & services Consumed Toys, local kulfi,chocolate,snacks like kurkure Mobile,telivision,cinema Motorcycle,mobile,LPG,readymade clothes, local liqor,jeep,haat Tractor, playing cards,kisan credit cardts,postal saving,mela Chaupal,pligrimage,hukka,social and political function

Characteristics and Attributes of an Agriculturist

Low literacy level Local language communication More spare time Price sensitive people Purchase of high involvement product such as tractor tire, selling of crops, buying seeds, pumpsets etc. is a long, well researched and discussed process in these people life.

Best example of the Identification of an agriculturists needs is ITC-e-choupal.

ITC Limited
Enduring Value. For the Nation. For the Shareholder.

Now we can try to understand difference between the conventional value chain for farmer and value addition by ITC e-choupal

CONVENTIONAL VALUE CHAIN

e-choupal concept
e-choupal is a Hindi word which means village meeting place. Market is a meeting place where vendors and customers come together to do transactions. e-choupal is a virtual market place where farmers can transact directly with a processor and can realize better price for their produce. Idea Generation The idea of creating and leveraging an electronic market place came from the brainstorming session done by senior executives of ITCIBD. Idea Initiation The challenge of servicing the changing needs of global customers, competing with the aggressive transnationals trading behemoths in a low margin agri-commodity business, operating from a high cost economy like India and looking for alternative markets in the period of recession were the basic business driver behind the new business model.

IDENTIFYING THE PROJECT GOALS

Helps enhance farm productivity by Disseminating latest information on district level weather forecasts for short & medium terms Best practices in farming Supply of quality inputs (seed,herbicide, fertilizer, pesticides etc) in the village itself

Cont..
Helps improve price realization for farm produce by Making available live data on markets viz. Location / Buyer wise prices offered. International market prices of relevant agricommodities. Historical & Up-to-date information on supply & demand. Expert opinion on expected future price movements.

Helps minimize transaction costs in marketing farm produce by Buying output at the farmers doorstep Through transparent pricing & weight management practices

UNIQUE BUSINESS MODEL: E-CHOUPAL

ITC accumulates information regarding weather, modern farming practices, and market prices from sources like Meteorological Department, Agri-universities, mandis (regional market) etc., and uploads all information on to e-Choupal web site.

It is an interlocking network of partnerships (ITC + Met Dept + Universities + Input COs + Sanyojaks, the erstwhile Commission Agents) bringing the best-inclass information, knowledge and inputs.

UNIQUE BUSINESS MODEL: E-CHOUPAL

e-choupal is a model with a number of nonconventional characteristics namely:
Customer centric Capable of being used for many commodities and multiple transactions easily scalable once it is verified uses local talent and local people and develops local leaders stimulates local entrepreneurs to extend their innovativeness uses all the existing institutions and legal frameworks and many others can join the market as transaction time is low.

UNIQUE BUSINESS MODEL: E-CHOUPAL

THANK YOU