Escolar Documentos
Profissional Documentos
Cultura Documentos
Submitted by
G. RAVI
ROLL NO: Y85338
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VIJAYAWADA
(2008 – 2010)
Rural India constitutes ‘the heart of India’, generating more than half the
national income. According to the National Council of Applied Economic
Research (NCAER), with about 74% of its population living in its villages. India
has perhaps the largest potential rural market in the world.
“If you see a woman in a village milking a cow, do you see an opportunity?
but that is exactly where Dr. Varghese kurien saw an opportunity and it gave birth to
one of the most successful organizations in India-Amul .”
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The need to look at rural markets:
The above data [table 1] indicates, the Indian rural market with its vast demand
base, offers great opportunities to companies. FMCGs demand in India nearly 53%
comes from the rural market. For consumer durables the figure is 59%, these results has
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evidently helped, going by the significant share contributed by rural areas to the total
revenue of several leading consumer product companies. [Table-2]
Rural markets are already proving vital for company’s growth, clearly indicating
that these markets can not be ignored by big players.
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There is no denying the fact that Indian market is the fastest growing
market in the world and the fact is that about 60% of the market considered rural
market is yet to turn into a real market.
According to the Census of India 2001, there are more than 4,000 towns in the
country. It has classified them into six categories, class-I towns with one lake and
above population , Class-II towns with 50,000-99,999 population, Class-III towns
with 20,000-50,000 population and Class-IV towns with 10,000-19,999 population.
It is mainly Hindustan Unilever and ITC, most FMCG and consumer durable
companies, define Class-II and III towns that are rural.[table-3]
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From this above data one can analyze the economics of cost involved in rural
distribution coverage.
• Poor Infrastructure
• Non-availability of shops
• High levels of poverty
• Unemployment
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• Poor literacy rate
• Poor media penetration
• Skeptical customers (less use new brand )
• Rigid social customs
Indian consumers are poor but not backward. The future lies with those
companies who see the poor as their customers. Companies should focus on
creative solution and product engineering to reduce their costs and offer tremendous
‘life time value’ to the ‘Bottom of the Pyramid’ customers. Effective rural
marketing is one and only solution to reach the BOP segment.
philosophy. The following section deals with how MNC’s and local companies
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[1] Product Strategy:
The rural consumer is very conscious about getting ‘value for money’. Low
price, high quality and multiple uses is basic principles rural product design.
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Nokia 1100 has so penetrated in to the rural market.
Nokia had to stop its production of 1100 because as its own
product has become its toughest competitor. Nokia’s
low-end cell phones are used as radios, alarm - clocks and
flash lights by the rural customers.
Case 2 : LG sampoorna TV
LG Electronics launched a customized TV
sampoorna’. A more important aspect of customization
is to make TV set which can appeal to local needs,
it facilitated on screen display in vernacular language
like Hindi, Tamil and Bengali. selling 1,00,000 sets in the very first year.
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Case 4: HUL pure-it [a water purifier brand]
Suggestions:
• Innovative product designs and packaging.
• Avoid the marketing myopia, which means the costumer will have the same
need but will want the new product.
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• Application of value engineering, which means costly metal being replaced
by cheaper reinforced plastic. This technique does not sacrifice the functional
efficiency of a product but lower the product price.
• Using chinese product design strategy and raw material.
• Be care full on product duplicates and using security features.
Rural markets are low price high volume growth markets. The rural markets
being intensely price-sensitive in comparison to urban markets, reaching at a lower
cost is a major challenge.
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Case 1: Nirma
Nirma’s yellow detergent powder- a mass- market
Phenomenon. Nirma’s low price policy has penetrated into
the deepest rural markets in India.
Case 3: Mc Donald’s
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more at the cost of the low-priced detergents. There was
a 200% increase in Tide after the price cut .
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small pack being sold at an MRP of RS.1, 20 ml parachute
a RS 5 that enables loose oil users ad to parachute.
Strategy: “consumers to trail out the products with very little risk”
Suggestions:
• Use backward and forward integration.
• Using value-based pricing strategy . That means fixing of price, starting
with customer and end with product.
• Use psychological tricky pricing strategies. That means method of odd
number pricing etc.
• Effective total quality management is helps to low price high quality
product.
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The challenge is to create communication that would help the rural
consumer in recognizing brands, logos, visuals and colors. To effectively tap the
rural markets, a brand must associate with their culture and personality.
Case 2: Coca-cola
Coca-cola ad ‘thanda matlab coca-cola’ caught
attention of the rural consumers so much. Aamir khan
playing foot sic with village bells.
Case 3: Godrej
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Godrej uses radio to reach to the local people in their language and push
its soap in interior and remote areas.
Strategy: “lifebuoy has always been positioned on the platform of health and .
hygiene”
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HUL launched a dish washing bar Vim. HUL Started to
communicated the brand in rural area through public
challenging campaigns. In this campaigns is succeed people
washing utensils with sand are being educated to shift to dish
washing bars.
Strategy: “For a brand to succeed in India, its communication and image must
respect Indian values and serve to uphold them”.
Suggestions:
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• Provide social outlet campaigns, the outlet provide free to any one, what
brand they choose. Its creates a ‘trust factors’ to the consumers.
• Be care full on retail margins other wise they promoted local brands.
• Face-to-face ‘below the line’ touch, that means feel and talk mode at heats,
melas and mandis.
• To capture the local sprit in the communication. Using local language.
• Patience is the name of the game. That means a rural consumer is not in a
hurry and you can take your time in communicating the message.
• Developed a website, which gathers valuable feedback from satisfied
customers and also display the total amount saved by consumers with the product
impact.
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Planning physical distribution, managing logistics and controlling
marketing communication are major impediments for entering rural markets. The
distribution structure involves stock points in feeder towns to service these retail
outlets at the village levels.
Case 2: HUL
Strategy: “HUL product can reach a place, where you can not reach”
Suggestions:
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• Best solution for enter into the rural markets, that is the company should
start the production in rural areas. Then it is easy to distribute and also its increase
the local sprit.
• Tie’up with public distribution system (Fair Price Shops). In our country,
the public distribution system is fairly well organized. The revamped PDS places
more emphasis on reaching remote rural areas of hills and tribaks. So FMCG
companies collaborated with the PDS to utilize its well-established sales and
distribution network in the rural markets.
• Develop rural shopping malls. Rural shopping malls act as a two-way supply
chain. While selling goods to the farmers and also buy their farm produce.
• Use a combination of wholesalers and retailers to penetrate every nook and
corner of rural market.
Going paces ahead of small packs and sachets’ the corporate world is now
coming out with ‘Rural Malls’ and ‘Self help groups’ as channel partners to
promote consumer products in rural India. Unilever and ITC are working towards
increasing their visibility and reach through marketing - cum social responsibility
projects such as ‘shakti and e-choupal’ respectively.
Conclusion:
A silent revolution is sweeping the Indian countryside. It has
compelled marketing whizkids to go rural. The marketing battle fields has shifted
from the cities to the villages, but in this battle both consumers and companies are
winners, it is a win-win situation. ‘Go Rural’ seems to the latest slogan. Stop
depending on research number. Go and meet up with a million villagers and ask
what they want. Create the products and services that is relevant to their needs.
Thus, it is quite clear value-for-money offerings companies could convert luxuries
in to necessities for the Indian rural consumers.
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