Description
Rural Marketing is defined as any marketing activity in which the one dominant participant is from a rural area-
Rural Marketing
Hitesh Kar
Prof. (Marketing)
Rural Marketing is defined as any
marketing activity in which the one
dominant participant is from a rural
area- Wikipedia
Product
? Anything that has a value in exchange
? Product – price – place – promotion
? Attributes: Availability, affordability,
acceptability & awareness
Marketing Tools Marketing Challenge
Product Acceptability
Price Affordability
Place Availability
Promotion Awareness
Source: The Rural Marketing Book- Kashyap. P & Raut. S
Cont’d
Appropriate Product Strategies
? Existing & New Products
? Product features – service quality – price & performance
relationship
? Simplicity is key
? “ Sense & Simplicity” – Phillips Global Campaign
? Urban market successes could be rural market failures
? Appropriate new product development processes
CORE BENEFIT
BASIC PRODUCT
EXPECTED PRODUCT
AUGMENTED PRODUCT
POTENTIAL PRODUCT
Customer Value HeirarchyLev
Cont’d
Product Level Characteristics Example Rural Vs Urban
Core Benefit Fundamental
benefit/ services
Entertainment Same
Basic Product Benefit/service
into tangibles
Television Set Same
Expected
Product
Attributes &
conditions
buyers normally
expect
Digital sound,
flat screen
Appearance of
differences in
expectations
Augmented
Product
Exceeding
customer
expectations
Battery
Operated TV
Pleasant
surprise for rural
customer
Potential
Product
Encompassing
all
augmentations &
transformations
Jolly Startek TV Uniquely rural
value
proposition
Product Development Stages
Stage Marketing Activities
Idea Generation •Searching for new product ideas
Idea Screening •Select the most promising ideas and drop those with only limited potential. Study
the needs and wants of potential buyers, the environment and competition.
Concept Testing •Describe or show product concepts and their benefits to potential customers and
determine their responses. Identify and drop poor product concepts. Gather useful
information from product development and its marketing personnel.
Business Analysis •Assess the product’s potential profitability and suitability for the market-place.
Examine the company’s research, development, and production capabilities.
Ascertain the requirements and availability of funds for development and
commercialisation. Project ROI.
Product
Development
•Determine technical and economic feasibility to produce the product. Convert the
product idea into a prototype. Develop and test various marketing mix elements.
Test Marketing •Conduct market testing. Determine target customers’ Reactions. Measure its sales
performance. Identify Weaknesses in product or marketing mix.
Commercialisation •Make necessary cash outlay for production facilities. Produce and market the
product in the target market and effectively communicate its benefits.
FMCG Consumption Trends
Products Urban( 1000 HH) Rural ( 1000 HH)
Toilet Soap 998 992
Washing Cake 980 950
Cooking Oil 968 952
Hair Oil/ Cream 897 787
Tea 876 758
Toothpaste 822 449
Washing Powder 819 576
Electric Bulb 723 394
Shampoo 663 352
Biscuits 579 314
Health Beverages 324 67
Source: National Council for Applied Economic Research, 2010
Consumption Ranking
Rank Rural Product Urban Product Rural HH
Consumption
grams / month
1 Toilet Soap Toilet Soap 268
2 Washing Powder Biscuits 950
3 Packaged Tea Washing Powder 268
4 Biscuits Packaged Tea 302
5 Detergent Cake Detergent Cake 893
Source: A.C Nielsen Retail Audit
Rural Durable Usage Trends
? NCAER has classified durables into three categories
? Group One( 6000)
? In group one the growth is as high as 75 percent
? Television( B & W) 195/1000HH in rural Vs 490/1000HH in
urban
? Colour TVs 48/1000 HH in rural Vs 304/1000HH in urban
Packaging
? Associated with affordability - Convenience -
Consumer recognition & product protection
? Packaging material, size, convenience and
aesthetics
? Example: Chik Sampoo
Corporate Responses to Fakes
? Look-alikes- Spell-alikes & Duplicates
? Prices range from MRP to 60 % of MRP
? Margins range from 60 % to 300 %
? Legal action – awareness programmes – New
Package Development
Fakes: Some Examples
Cont’d
Pricing
Issues in Pricing
? Internal & external factors
? Selecting pricing methods
? Pricing adaptations
? Low price points – Simple packaging –
utility around packaging material
? Highlighting value
Price Adaptations ( Indicative)
? Product sharing services, Example:
Tractors
? Product Bundle pricing, Example: HUL
Operation Bharat
? Free gifts – may sometimes not work in
rural areas
? Special event pricing- Hero Honda Rs.
500 campaign
Place- Rural Distribution Challenges
? Large number of small markets
? Dispersed population and trade
? Poor connectivity
? Low availability of suitable dealers
? Inadequate banking/ credit facilities
? Poor product display and visibility
? Poor communication of offers and schemes
Levels of Distribution
Level Partner Location
1
Company Depot/ C &
FA
National/ State level
2
Distributor/ Van
Operator/ Super
Stockist/ Rural
Distributor
District level
3
Sub Distributor/ retail
Stockist/ sub
stockist/star seller
Tehsil HQ, towns and
large villages
4
Wholesaler Feeder towns, large
villages, haats
5
Retailer Villages, haats
Distribution Adaption( Indicative)
? Hub and Spoke Model, Example: Coca Cola
? Use of Affinity groups, Example: Project Shakti
? Haat Activation, Example: Colgate
? Syndicated distribution, Example: Cavin Care &
Amrutanjan
? Use of marketing co-operatives, Example: Warna
Bazaar in Rural Areas
? Mobile traders, Example: FMCG companies
Promotion- Adaptations for Rural Markets
Conventional Non- Conventional Personalised
Television Haat and Mela Direct mailer
Radio Folk Media( puppet and
magic show)
POS (demonstration,
leaflet)
Press Video Van Word of mouth
Cinema Mandi Interpersonal
communication
Outdoor: Wall Painting,
Hoarding
Animator
Melas & Haats
Melas Haat
1. 25,000 melas
2. Companies can concentrate
on the top 100 melas
3. Pushkar Mela in Rajasthan
4. Organised by the state
veterinary department
5. Product sales, promotion,
demonstration and database
generation
6. Cultural activities and rural
sports
1. Periodic markets located in larger
villages(> 40,000)
2. 10 – 50 villages are serviced
3. Sunday markets are most
popular
4. Average number of outlets is 315
and average daily sales is about
Rs 2 lakhs
5. Traders participate in at least 4
haats
6. 81 percent of the visitors are
repeat customers
Types of Promotions
? Advertising
? Sales promotions – coupons, contests,
demonstrations and sampling, Example: Tata
Shaktee Haat Hungama
? Direct marketing, Example: Videocon
? Publicity, Example: Project Shakti and AP Online
? Using a direct selling through a sales force,
Example: Swasthya Chetna for Lifebouy
Cont’d
? Push strategy – sales force and trade promotion
? Pull strategy – advertising and consumer
promotion
Rural retailing formats
Inputs
Agri
• Seeds
• Fertilisers
• Pesticides
• Insecticides
NON-AGRI
• Apparels
• Consumer
durables
• FMCG
• Energy
Products
• Financial
Services
• Credit
Facility
• Insurance
Outputs
• Wheat
• Soybean
• Barley
• Maize
• Chilly
• Fishes
Services:
• Soil testing
• Price Information
• Technology
dissemination
• Internet facility
Models:- Hub and Spoke
TYPE OF CHOUPALS-
Soy choupal (soybean procurement)
Wheat choupal (wheat)
Aqua choupal (fishes)
Planters net (coffee)
Installation cost 2 Lakhs
• E choupal serves 600 farmers in 10 villages in 5 kms.
• Sanchalak uses computer to give orders and give info.
• Choupal Sagar have replaced hub as retail hub for agri
as well as non agri products.
Company owned company operated
ITC e choupal
HUB:-Company Operated
Spoke:-Franchisee Operated
17/02/10 & 18/02/10
Company owned franchisee operated
Cargill- saathi krishi samadhan kendra
Model:- Hub and Spoke
HUB:-Franchise Operated
Spoke:-Franchise Operated
17/02/10 & 18/02/10
Franchisee owned franchisee operated
Mahindra shubh labh
Strategies
? Dynamics of rural markets differ from other market types, and similarly rural
marketing strategies are also significantly different from the marketing
strategies aimed at an urban or industrial consumer. This, along with several
other related issues, have been subject matter of intense discussions and
debate in countries like India and China and focus of even international
symposia organized in these countries.
? Rural markets and rural marketing involve a number of strategies, which
include:
? Client and location specific promotion
? Joint or cooperative promotion..
? Bundling of inputs
? Management of demand
? Developmental marketing
? Unique selling proposition (USP)
? Extension services
? Business ethics
? Partnership for sustainability
Conclusion
Thank U
Any questions ????
Special Thanks To WWW.FREEMBANOTES.IN
doc_166625202.pptx
Rural Marketing is defined as any marketing activity in which the one dominant participant is from a rural area-
Rural Marketing
Hitesh Kar
Prof. (Marketing)
Rural Marketing is defined as any
marketing activity in which the one
dominant participant is from a rural
area- Wikipedia
Product
? Anything that has a value in exchange
? Product – price – place – promotion
? Attributes: Availability, affordability,
acceptability & awareness
Marketing Tools Marketing Challenge
Product Acceptability
Price Affordability
Place Availability
Promotion Awareness
Source: The Rural Marketing Book- Kashyap. P & Raut. S
Cont’d
Appropriate Product Strategies
? Existing & New Products
? Product features – service quality – price & performance
relationship
? Simplicity is key
? “ Sense & Simplicity” – Phillips Global Campaign
? Urban market successes could be rural market failures
? Appropriate new product development processes
CORE BENEFIT
BASIC PRODUCT
EXPECTED PRODUCT
AUGMENTED PRODUCT
POTENTIAL PRODUCT
Customer Value HeirarchyLev
Cont’d
Product Level Characteristics Example Rural Vs Urban
Core Benefit Fundamental
benefit/ services
Entertainment Same
Basic Product Benefit/service
into tangibles
Television Set Same
Expected
Product
Attributes &
conditions
buyers normally
expect
Digital sound,
flat screen
Appearance of
differences in
expectations
Augmented
Product
Exceeding
customer
expectations
Battery
Operated TV
Pleasant
surprise for rural
customer
Potential
Product
Encompassing
all
augmentations &
transformations
Jolly Startek TV Uniquely rural
value
proposition
Product Development Stages
Stage Marketing Activities
Idea Generation •Searching for new product ideas
Idea Screening •Select the most promising ideas and drop those with only limited potential. Study
the needs and wants of potential buyers, the environment and competition.
Concept Testing •Describe or show product concepts and their benefits to potential customers and
determine their responses. Identify and drop poor product concepts. Gather useful
information from product development and its marketing personnel.
Business Analysis •Assess the product’s potential profitability and suitability for the market-place.
Examine the company’s research, development, and production capabilities.
Ascertain the requirements and availability of funds for development and
commercialisation. Project ROI.
Product
Development
•Determine technical and economic feasibility to produce the product. Convert the
product idea into a prototype. Develop and test various marketing mix elements.
Test Marketing •Conduct market testing. Determine target customers’ Reactions. Measure its sales
performance. Identify Weaknesses in product or marketing mix.
Commercialisation •Make necessary cash outlay for production facilities. Produce and market the
product in the target market and effectively communicate its benefits.
FMCG Consumption Trends
Products Urban( 1000 HH) Rural ( 1000 HH)
Toilet Soap 998 992
Washing Cake 980 950
Cooking Oil 968 952
Hair Oil/ Cream 897 787
Tea 876 758
Toothpaste 822 449
Washing Powder 819 576
Electric Bulb 723 394
Shampoo 663 352
Biscuits 579 314
Health Beverages 324 67
Source: National Council for Applied Economic Research, 2010
Consumption Ranking
Rank Rural Product Urban Product Rural HH
Consumption
grams / month
1 Toilet Soap Toilet Soap 268
2 Washing Powder Biscuits 950
3 Packaged Tea Washing Powder 268
4 Biscuits Packaged Tea 302
5 Detergent Cake Detergent Cake 893
Source: A.C Nielsen Retail Audit
Rural Durable Usage Trends
? NCAER has classified durables into three categories
? Group One( 6000)
? In group one the growth is as high as 75 percent
? Television( B & W) 195/1000HH in rural Vs 490/1000HH in
urban
? Colour TVs 48/1000 HH in rural Vs 304/1000HH in urban
Packaging
? Associated with affordability - Convenience -
Consumer recognition & product protection
? Packaging material, size, convenience and
aesthetics
? Example: Chik Sampoo
Corporate Responses to Fakes
? Look-alikes- Spell-alikes & Duplicates
? Prices range from MRP to 60 % of MRP
? Margins range from 60 % to 300 %
? Legal action – awareness programmes – New
Package Development
Fakes: Some Examples
Cont’d
Pricing
Issues in Pricing
? Internal & external factors
? Selecting pricing methods
? Pricing adaptations
? Low price points – Simple packaging –
utility around packaging material
? Highlighting value
Price Adaptations ( Indicative)
? Product sharing services, Example:
Tractors
? Product Bundle pricing, Example: HUL
Operation Bharat
? Free gifts – may sometimes not work in
rural areas
? Special event pricing- Hero Honda Rs.
500 campaign
Place- Rural Distribution Challenges
? Large number of small markets
? Dispersed population and trade
? Poor connectivity
? Low availability of suitable dealers
? Inadequate banking/ credit facilities
? Poor product display and visibility
? Poor communication of offers and schemes
Levels of Distribution
Level Partner Location
1
Company Depot/ C &
FA
National/ State level
2
Distributor/ Van
Operator/ Super
Stockist/ Rural
Distributor
District level
3
Sub Distributor/ retail
Stockist/ sub
stockist/star seller
Tehsil HQ, towns and
large villages
4
Wholesaler Feeder towns, large
villages, haats
5
Retailer Villages, haats
Distribution Adaption( Indicative)
? Hub and Spoke Model, Example: Coca Cola
? Use of Affinity groups, Example: Project Shakti
? Haat Activation, Example: Colgate
? Syndicated distribution, Example: Cavin Care &
Amrutanjan
? Use of marketing co-operatives, Example: Warna
Bazaar in Rural Areas
? Mobile traders, Example: FMCG companies
Promotion- Adaptations for Rural Markets
Conventional Non- Conventional Personalised
Television Haat and Mela Direct mailer
Radio Folk Media( puppet and
magic show)
POS (demonstration,
leaflet)
Press Video Van Word of mouth
Cinema Mandi Interpersonal
communication
Outdoor: Wall Painting,
Hoarding
Animator
Melas & Haats
Melas Haat
1. 25,000 melas
2. Companies can concentrate
on the top 100 melas
3. Pushkar Mela in Rajasthan
4. Organised by the state
veterinary department
5. Product sales, promotion,
demonstration and database
generation
6. Cultural activities and rural
sports
1. Periodic markets located in larger
villages(> 40,000)
2. 10 – 50 villages are serviced
3. Sunday markets are most
popular
4. Average number of outlets is 315
and average daily sales is about
Rs 2 lakhs
5. Traders participate in at least 4
haats
6. 81 percent of the visitors are
repeat customers
Types of Promotions
? Advertising
? Sales promotions – coupons, contests,
demonstrations and sampling, Example: Tata
Shaktee Haat Hungama
? Direct marketing, Example: Videocon
? Publicity, Example: Project Shakti and AP Online
? Using a direct selling through a sales force,
Example: Swasthya Chetna for Lifebouy
Cont’d
? Push strategy – sales force and trade promotion
? Pull strategy – advertising and consumer
promotion
Rural retailing formats
Inputs
Agri
• Seeds
• Fertilisers
• Pesticides
• Insecticides
NON-AGRI
• Apparels
• Consumer
durables
• FMCG
• Energy
Products
• Financial
Services
• Credit
Facility
• Insurance
Outputs
• Wheat
• Soybean
• Barley
• Maize
• Chilly
• Fishes
Services:
• Soil testing
• Price Information
• Technology
dissemination
• Internet facility
Models:- Hub and Spoke
TYPE OF CHOUPALS-
Soy choupal (soybean procurement)
Wheat choupal (wheat)
Aqua choupal (fishes)
Planters net (coffee)
Installation cost 2 Lakhs
• E choupal serves 600 farmers in 10 villages in 5 kms.
• Sanchalak uses computer to give orders and give info.
• Choupal Sagar have replaced hub as retail hub for agri
as well as non agri products.
Company owned company operated
ITC e choupal
HUB:-Company Operated
Spoke:-Franchisee Operated
17/02/10 & 18/02/10
Company owned franchisee operated
Cargill- saathi krishi samadhan kendra
Model:- Hub and Spoke
HUB:-Franchise Operated
Spoke:-Franchise Operated
17/02/10 & 18/02/10
Franchisee owned franchisee operated
Mahindra shubh labh
Strategies
? Dynamics of rural markets differ from other market types, and similarly rural
marketing strategies are also significantly different from the marketing
strategies aimed at an urban or industrial consumer. This, along with several
other related issues, have been subject matter of intense discussions and
debate in countries like India and China and focus of even international
symposia organized in these countries.
? Rural markets and rural marketing involve a number of strategies, which
include:
? Client and location specific promotion
? Joint or cooperative promotion..
? Bundling of inputs
? Management of demand
? Developmental marketing
? Unique selling proposition (USP)
? Extension services
? Business ethics
? Partnership for sustainability
Conclusion
Thank U
Any questions ????
Special Thanks To WWW.FREEMBANOTES.IN
doc_166625202.pptx