Rural Market

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Rural Market

• Prof. Atul Tandan
• Director
• MICA

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Rural - Urban Distribution Population()

• Rural
• 74.2 million 72.2
• Urban
• 28.6 million 27.8

Source Census of India 2001
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Households in India

• Total 19.3 million
• Rural 13.8 million 71.2
• Urban 5.5 million 28.8

Source Census of India 2001
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Indias Population in Villages
Source Census of India 2001
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Source The rural marketing handbook
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Component of Rural Market

• FMCGs
• Durables
• Agricultural inputs
• Others

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FMCG

• Currently, the rural market size of FMCG products
  is estimated at 52 per cent, and is projected to
  reach 57 per cent by 2010, growing by 10 per cent
  in the next three years
• As per estimates, the domestic FMCG market size
  is currently 15 bln of which 7.9 bln is the
  rural contribution
• Source Assocham

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Consumer Expenditure -Durables

• Expenditure on durable goods formed 3.75 per cent
  (Rs 21.74 out of Rs 579.17) of average per capita
  consumer expenditure
• 1993-1994 () 2004-2005 ()
• Motorcycles 2 7.7
• Cars 0.2 0.8
• TVs 7 25.6
• Electric Fans 12-13 38
• Refrigerators 1 4

Source NSSO
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Rural Purchasing Power

• Marketable agricultural surplus
• Rural crafts and trade
• Overseas/domestic remittance
• Government subsidies and investment
• Handicraft and SSI

10
Source McKinsey Consumer report 2007
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Source McKinsey Consumer report 2007
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Distinct Features of the Rural Market

• Environment
• Social Structure
• Economic System
• Marketing Environment

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Distinct Features of the Rural Market

• Environment
• Villages are widely dispersed
• Inadequate infrastructure
• Low density of population
• Lower mobility and poor physical connectivity

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Distinct Features of the Rural Market

• Social Structure
• Traditional and modern
• Less cross-societal interaction
• Social norms influencing individuals
• Status by birth
• Influence of caste/community is direct and strong
• Unequal land distribution

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Distinct Features of the Rural Market

• Economic System
• Seasonal employment
• Daily and weekly wages for workers
• Low quantity and high frequency of purchase

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Distinct Features of the Rural Market

• Marketing Environment
• Low product exposure (branded products)
• Less ad exposure, low comprehension of ads and
  less brands awareness
• Less exposure to market research, limited sources
  of information and learning
• Less convenient buying

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Rural Marketing Problems

• Distribution logistics, storage, transport and
  handling
• Location and degree of concentration of demand
• Dealers attitude and motivation
• Transmission media, their reach and impact
• Literacy and steady income

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Challenges

• Limited media reach
• Absence of organised data information
• Emerging marketing and buying opportunities
• Poor infrastructure
• Limited availability of shops
• Low literacy rate
• Erratic power supply
• Limited media penetration
• Conventional social customs
• Regional politics community based structure
• Skeptical customers

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Opportunities

• Increasing Government expenditure to improve
  infrastructure development
• Commercialization of agriculture
• Increasing media (electronic) reach
• Less development on timely rain
• Increasing mechanisation and employment
  opportunities

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Market Mix Challenges
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Rural Marketing Initiatives

• Shampoo - Packaging one time use
• Detergents product modified - cakes for hard
  water and scrubbing of clothes makes them cleaner
• Sewing Machine less complex product - manually
  operated sturdy machines are preferred
• Tractor new technology perform numerous
  functions

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VIM-BAR
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Product Mix Strategies

• Innovative product designs/uses
• LG Electronics Sampoorna
• Yamaha Rajdoot
• Washing machine Churn out butter
• Godrej Hair Dye Color their buffaloes
• Horlicks Beverages for cattles
• Iodex Muscular pain of cattle

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Product Mix Strategies

• Small unit packaging
• CavinKares Chik shampoo prices at 50 paise for 8
  ml
• Britannias Tiger Glucose Biscuit
• Cadburys Dairy Milk Chocolate
• Inducing product trial
• Coke
• Panch matlab chota Coke
• Thanda matlab Coca Cola
• Colgate Palmolive distributed free herbal
  toothpaste for trial use

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COCA COLA
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COCA COLA
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COLGATE
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Product Communications Strategies

• Brand awareness increased
• Cable TV
• Satellite channel
• Shift
• Indigenous teeth cleaning ingredients are now
  lead to using toothpaste
• Dettol/Lifebuoy for maintaining basic hygiene
• Washing utensils with washing bar instead of sand
• Utility-Oriented Products
• Eveready Torches replaced with plastic parts

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EVEREADY
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NIPPO
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Price Mix

• Low-Cost Products
• Nestles brands
• Maggi at Rs. 5
• KitKat at Rs. 2
• CavinKares brand
• Chik at Rs. 17 for 100 ml.
• Godrej Consumer Product
• Cinthol, Fairglow and Godrej No. 1 (50 gm at
  Rs.5)

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POLO
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Rural Products

• Asian Paints
• Max Gas Cylinder
• Mahindra MaXX
• Nokia with torch
• HPCL 5 kg. Gas Cylinder
• Mr. Kadak Bidi
• Water Purifier Jalshodhak
• Eicher 3-KW generator

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NOKIA
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ASIANPAINT APEX ULTIMA
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Mr. KADAK BIDI
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EVEREST
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ROOFIT
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Distribution Mix

• Shandies/Haats and Melas
• 47,000 haats
• 25,000 melas
• Audio-Visual Vans
• Marico Industries and HUL (syndicated
  distribution)
• Delivery vans
• Maintain stock at retail point

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Distribution Mix

• Distribution upto feeder market
• Stockists or wholesalers and retailer
• HUL
• Coca Cola
• P G collaborated with Godrej to use its well
  established network
• Public Distribution System
• Co-operative societies

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AMUL
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Challenges in Rural Communication

• Low literacy level
• Limited media reach
• Heterogeneous
• Diversely spread rural audience
• Variations in language
• Culture
• Lifestyle

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LIRIL
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LIRIL
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Shannon and Weaver Model
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Developing Effective Communication

• Profiling the target audience
• Social classes and intentions
• Consumer receptivity
• Growing brand consciousness
• Lifestyles
• Buying roles
• Children
• Purchase needs
• Community and the personal value proposition
• Value for money proposition
• Determining communications objectives

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Developing Effective Communication

• Determining the communications objectives
• Efforts to change consumers mind
• Change attitude
• Get the consumer to act
• AICDA Model of Communication
• Awareness Interest Conviction Desire
  

Action
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FEVICOL
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Developing Effective Communication

• Designing the message
• Message content
• Rational appeals
• Emotional appeals
• Moral appeals
• Language

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AIRTEL
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ACC CEMENT
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Developing Effective Communication

• Designing the message
• Message content
• Rational appeals
• Emotional appeals
• Moral appeals
• Language
• Message structure
• Pictorial presentation
• Message format
• Context association
• Message source
• Expert source

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Developing Effective Communication

• Message effectiveness
• Language
• Pictorial presentation
• Form of the message
• Source of the message
• Context association

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Developing Effective Communication

• Selecting the communication channels
• Personal communication channels
• Advocate channels
• Experts channels
• Social channels
• Non-personal communication channels

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Developing Effective Communication

• Designing the promotional strategy and
  integrating the communication process
• Advertising
• Sales promotion
• Communication
• Incentive
• Invitation
• Sampling
• Direct marketing

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Developing Effective Communication

• Designing the promotional strategy and
  integrating the communication process
• Public relations and publicity
• High credibility
• Personal selling
• Direct contact
• Response

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• New Rural India

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FAIREVER
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BAJAJ BRAHMI
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HERO HONDA PLEASURE
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Idea
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UNITED INDIA
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• THANK YOU
• Prof. Atul Tandan e-mail
• Director, MICA director_at_mica.ac.in