Description
Strategy for MNCs, Opportunity in rural market, Approaches to rural marketing, Rural Retail Strategies, Retail in rural markets, Internet use in Rural Marketing – FMCG sector: A case study on ITC, Case study: Hyundai Utsav, Case Study: Vim GHAR GHAR Challenge, Case study: IMC in rural areas, GODREJ AADHAR- “Khusiyon Ka, Khushhali Ka”.
Innovations in Rural Marketing Strategies
Swati Gupta (116), Bhavesh Panchal (135), Dolly Sakhpara (045), Navamita Atreya (003) K.J.Somaiya Institute of Management Studies and Research
Table of Contents
Introduction ............................................................................................................................................ 3 general rural scenario.............................................................................................................................. 5 Geographic Information Systems- An important tool for rural marketing ............................................. 5 Market Analysis ............................................................................................................................... 5 Identification of potential market - Prioritization of districts. ........................................................... 5 Drilling down to the places of visit - Analysis by query ..................................................................... 6 Composite query ............................................................................................................................. 6 Buffer query .................................................................................................................................... 6 Route Planning ................................................................................................................................ 6 Rural Marketing Strategy for MNCs ..................................................................................................... 7 Opportunity in rural market ............................................................................................................. 7 Approaches to rural marketing ........................................................................................................ 7 Rural Retail Strategies........................................................................................................................ 10 Retail in rural markets ....................................................................................................................... 10 Strategies in Rural Retail .................................................................................................................... 11 Case Studies- FMCG............................................................................................................................... 12 Internet use in Rural Marketing – FMCG sector: A case study on ITC .................................................. 12 Case study: Hyundai Utsav................................................................................................................. 13 Conclusions ................................................................................................................................... 14 Case Study: Vim GHAR GHAR Challenge ............................................................................................. 15 Conclusions ................................................................................................................................... 16 Case study: IMC in rural areas............................................................................................................ 17 Campaign for Coca-Cola ................................................................................................................. 17 Campaign for Marico hair oil.............................................................................................................. 18 CASE STUDY: retail................................................................................................................................. 20 GODREJ AADHAR- “Khusiyon Ka, Khushhali Ka” ................................................................................. 20 Case Studies- pharmaceuticals............................................................................................................... 21 Case Study: Glaxo SmithKline............................................................................................................. 21 Case Study: LUPIN ............................................................................................................................. 22 Case Study: MANKIND ....................................................................................................................... 24 Indian Pharma Top 10 ........................................................................................................................ 25 2
Indian Top 5 ...................................................................................................................................... 25 Conclusion............................................................................................................................................. 26
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INTRODUCTION
The villages and small towns of India that were once inconsequential dots on maps are now getting the attention of all marketers. Rural India has more than 6 lakh villages, housing about three fourths of the country’s population that is one third of the national income. Rural India accounts for 30-60% of the total sales of a host of consume goods ranging from biscuits to toothpastes, shampoos and washing machines. It accounts for three fourths of all bicycles and radios sold in India, 56% of all batteries, 55% of both tea and washing cakes/bars, 31% of color televisions, 8% VCRs, 10% of washing machines, 18% refrigerators, 38% toothpastes, 24% of Shampoo, ad 28% of all face creams (Krishnamoorthy 2000). Over 60% of Lifebuoy sales occur here and over 60% of Nirma washing powder sales is rural. Philips is a household name in consumer durables. HMT watches are commonly found. Mahindra jeeps and tractors are very popular with farmers. Bullet continues to be a popular motorcycle. Thanks to globalization, economic liberalization, IT revolution and improving infrastructure, middle class rural India today has more disposable income than it had earlier. The growth in the rural markets is perhaps the most significant feature of the marketing environment of India in recent times. Marketers have realized that rural market is no push over. Apart from flagging urban consumption levels, a newly found rural prosperity is the key driver. Therefore, a thorough understanding of the rural markets has become an important aspect of marketing in the Indian marketing environment today. Saturation of Urban Market The high rate of growth of the rural market is not the main factor that has driven companies to go rural. The compelling factor is that the urban markets are becoming increasingly complex, competitive and saturated. Both domestic companies and multinationals have burnt their fingers fighting off the fierce competition, price wars and sluggish demand by high media spends and expensive consumer promotions in the urban markets. The marketers have almost used every trick to slice up the urban consumer pie form demographics to psychographics, usage patterns to gender. This intensified competition in urban markets leads to increased costs and reduced market shares. Therefore, marketers are queuing up to derive benefit from the great rural opportunity. With growing incomes and aspirations in rural areas, both Indian and multinational companies have started designing strategies suited to the rural market. The companies are now looking at the rural areas to increase sales and also try and gain the first mover advantage. Peculiarities of Rural Markets Entering into rural market is not an easy task. This is the reason except the major players of the industry companies are not venturing into this market in spite of the knowledge of the vast untapped potential of this market.
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Key growth drivers in the rural development are; • • • • • Rising disposable incomes (40%) Improvement in medical infrastructure (20%) Population growth (15%) Health insurance penetration (10%) Others (15%) ? Patent approval ? Increase in disease rate and profile ? Strengthening fragmented distribution in India – private pharma retail chain
Even some of the big companies find it difficult sometimes, to operate in these markets. For instance, P&G in a marked shift from its earlier obsession with chasing sales targets by aggressively expanding distribution cover is streamlining its distribution network, in an exercise code named Operation Golden Eye. Only for a limited set of products like Vicks action 500 and some detergent sachets, P&G will not have much of a distribution presence in rural areas. The idea behind rural marketing should be to expand and create markets. The companies are now redesigning the whole marketing mix to ensure that the rural needs are met effectively. In this paper we plan to present some successful and innovative rural marketing strategies adopted by companies to raise their bottom lines. Hence we divide the paper into following segments
GENERAL RURAL SCENARIO
Geographic Information Systems- An important tool for rural marketing
Market Analysis
To identify the potential markets application offers various procedures such as prioritizing districts according to the required parameters or assigning the pre-decided list of places to be covered for further analysis. Thus making selection process is flexible. These procedures as a result provide user with identified potential market on the basis of desired parameter depicted on the map.
Identification of potential market - Prioritization of districts.
The Function of district prioritization enables the user to rank the districts based on desired parameters and weightage. User can prioritize districts with the option of national or state level considering only the rural areas, or urban areas or both. "LinCompass" has identified approximately forty parameters related to demographic, infrastructure, agriculture, civic, and economic information. User can prioritize districts by selecting any or all of these parameters and by assigning desired weightage to them. Finally the application ranks the districts based on the composite Index value (index provided by the client). This 5
facilitates selection of below the line district. District priority index becomes the first step towards Below the Line (BTL) campaign planning.
Drilling down to the places of visit - Analysis by query
"LinCompass" allows different kinds of query for analysis purposes. It has the option of composite query and/ or buffer query for further filtering areas based on census indicators.
Composite query
Composite query gives user the option to drill into the data by running queries based on certain parameters. The user can have five parameters to run the query. This query can be invoked from within the buffer query as well as separately. User can generate 25 reports using varied AND/OR combinations. The query is very user-friendly, fast and assists the users to enter the query without knowing the structure of the tables.
Buffer query
This function is useful to perform spatial query. User can select places falling within a certain buffer distance from a nodal town or a certain highway by creating a buffer of desired distance. Application identifies all the places falling within the given range. It also gives the provision to further filter down the identified places by performing composite query. Query results can be stored as new maps that can be retrieved later for analysis. The query function is very flexible allowing users to go back and forth reselecting and performing queries using different set of parameters.
Route Planning
[
This function provides the facility to generate route plans for marketing campaigns. The user can create any number of route plans based on various parameters. The software has the facility to save and store the route plans generated in iteration. The user can then evaluate each of these plans individually and select the best. It generates route plans on the basis of shortest path and assigned weightage to the selected parameters. It provides user the facility to specify the 'Start Place' and the 'Start Date' of the route. Example of a typical route plan: The required route should cover villages of population less than 4000, and each day it should visit three villages that should have either a primary school or primary health center. The total travel distance should not exceed 60 Km and the distance between two villages should be less than 15 Km. As a result application will identify all the villages with population less then 4000 in Malihabad of Lucknow District having either haat day, primary school or primary health center and create a optimum route to cover maximum villages in the assigned days. 6
Features of Route Design Module Route Design Module contains the following options for designing the route plan, which gives user flexibility to have desired route plan. User can use any option with any combination at any stage of the process Route plan calculator 'Route Plan Calculator' helps user in optimizing the number of places and deciding campaign days. It first prompts user to provide necessary inputs like number of places to be covered per day and duration of campaign. It also shows other relevant information like number of days to be spent in the towns and corresponding values of the parameters selected during query. This helps user in deciding the duration of halt in the identified towns and to do the desired alterations. This feature is particularly helpful while designing route plans covering multiple villages per day and in the same plan having longer duration for a town. Finally it displays a route plan report having summary of places to be covered and the ratio of actual time required against the time allotted by user. Based on this the user can either proceed or go back to try different iterations for designing a more optimum route plan.
Rural Marketing Strategy for MNCs
To expand the market by tapping the countryside, more and more MNCs are foraying into India's rural markets. Among those that have made some headway are Hindustan Lever, Coca-Cola, LG Electronics, Britannia, HDFC Standard Life, Philips, Colgate Palmolive and the telecom companies.
Opportunity in rural market
The Indian rural market with its vast size and demand base offers a huge opportunity that MNCs cannot afford to ignore. With 128 million households, the rural population is nearly three times the urban. As a result of the growing affluence, fuelled by good monsoons and the increase in agricultural output to 200 million tonnes from 176 million tonnes in 1991, rural India has a large consuming class with 41 per cent of India's middle-class and 58 per cent of the total disposable income. The importance of the rural market for some FMCG and durable marketers is underlined by the fact that the rural market accounts for close to 70 per cent of toilet-soap users and 38 per cent of all two-wheeler purchased. The rural market accounts for half the total market for TV sets, fans, pressure cookers, bicycles, washing soap, blades, tea, salt and toothpowder, What is more, the rural market for FMCG products is growing much faster than the urban counterpart.
Approaches to rural marketing
The rural market may be alluring but it is not without its problems: Low per capita disposable incomes that is half the urban disposable income; large number of daily wage earners, acute dependence on the vagaries of the monsoon; seasonal consumption linked to harvests and festivals and special occasions; 7
poor roads; power problems; and inaccessibility to conventional advertising media. However, the rural consumer is not unlike his urban counterpart in many ways. The more daring MNCs are meeting the consequent challenges of availability, affordability, acceptability and awareness of products.
Availability of product The first challenge is to ensure availability of the product or service. India's 627,000 villages are spread over 3.2 million sq km; 700 million Indians may live in rural areas, finding them is not easy. However, given the poor state of roads, it is an even greater challenge to regularly reach products to the far-flung villages. Any serious marketer must strive to reach at least 13,113 villages with a population of more than 5,000. Marketers must trade off the distribution cost with incremental market penetration. Over the years, India's largest MNC, Hindustan Lever, a subsidiary of Unilever, has built a strong distribution system which helps its brands reach the interiors of the rural market. To service remote village, stockists use autorickshaws, bullock-carts and even boats in the backwaters of Kerala. Coca-Cola, which considers rural India as a future growth driver, has evolved a hub and spoke distribution model to reach the villages. To ensure full loads, the company depot supplies, twice a week, large distributors which who act as hubs. These distributors appoint and supply, once a week, smaller distributors in adjoining areas. LG Electronics defines all cities and towns other than the seven metros cities as rural and semi-urban 8
market. To tap these unexplored country markets, LG has set up 45 area offices and 59 rural/remote area offices. Affordability of a product The second challenge is to ensure affordability of the product or service. With low disposable incomes, products need to be affordable to the rural consumer, most of whom are on daily wages. Some companies have addressed the affordability problem by introducing small unit packs. Godrej recently introduced three brands of Cinthol, Fair Glow and Godrej in 50-gm packs, priced at Rs 4-5 meant specifically for Madhya Pradesh, Bihar and Uttar Pradesh - the so-called `Bimaru' States. Hindustan Lever, among the first MNCs to realise the potential of India's rural market, has launched a variant of its largest selling soap brand, Lifebuoy at Rs 2 for 50 gm. The move is mainly targeted at the rural market. Coca-Cola has addressed the affordability issue by introducing the returnable 200-ml glass bottle priced at Rs 5. The initiative has paid off: Eighty per cent of new drinkers now come from the rural markets. Coca-Cola has also introduced Sunfill, a powdered soft-drink concentrate. The instant and ready-to-mix Sunfill is available in a single-serve sachet of 25 gm priced at Rs 2 and mutiserve sachet of 200 gm priced at Rs 15. Acceptability of a product The third challenge is to gain acceptability for the product or service. Therefore, there is a need to offer products that suit the rural market. One company which has reaped rich dividends by doing so is LG Electronics. In 1998, it developed a customised TV for the rural market and christened it Sampoorna. It was a runway hit selling 100,000 sets in the very first year. Because of the lack of electricity and refrigerators in the rural areas, Coca-Cola provides low-cost ice boxes — a tin box for new outlets and thermocol box for seasonal outlets. The insurance companies that have tailor-made products for the rural market have performed well. HDFC Standard LIFE topped private insurers by selling policies worth Rs 3.5 crore in total premia. The company tied up with non-governmental organisations and offered reasonably-priced policies in the nature of group insurance covers. With large parts of rural India inaccessible to conventional advertising media only 41 per cent rural households have access to TV. Awareness of a product This is another challenge. Fortunately, however, the rural consumer has the same likes as the urban consumer — movies and music — and for both the urban and rural consumer, the family is the key unit of identity. However, the rural consumer expressions differ from his urban counterpart. Outing for the former is confined to local fairs and festivals and TV viewing is confined to the state-owned Doordarshan. Consumption of branded products is treated as a special treat or indulgence. Hindustan Lever relies heavily on its own company-organised media. These are promotional events organised by stockists. Godrej Consumer Products, which is trying to push its soap brands into the interior areas, uses 9
radio to reach the local people in their language. Coca-Cola uses a combination of TV, cinema and radio to reach 53.6 per cent of rural households. It doubled its spend on advertising on Doordarshan, which alone reached 41 per cent of rural households. It has also used banners, posters and tapped all the local forms of entertainment. Since price is a key issue in the rural areas, Coca-Cola advertising stressed its `magical' price point of Rs 5 per bottle in all media.LG Electronics uses vans and road shows to reach rural customers. The company uses local language advertising. Philips India uses wall writing and radio advertising to drive its growth in rural areas.
Rural Retail Strategies
Customize Merchandize
Customize Promotion
Customize the Store Operation
Rural Retail Strategies
Customize the Communication
Customize the Price
Retail in rural markets
India, like Britain, is also a nation of shopkeepers. With over 12mn retail outlets, India has one of the highest densities of retail outlets in the world with one retail outlet for ~90 persons. Retailers inspired by the Wal-Mart story of growth in small town America are tempted to focus on smaller towns and villages in India. In India for a long time a large chunk of retail outlets were grocery shop. This pattern had been changing in recent years, in urban and rural markets. Of late, India's largely rural population has also caught the eye of retailers looking for new areas of growth. A no. of companies like Tata, ITC, Godrej, etc. are set to storm the rural areas of the country offering a diverse product range from FMCG to 10
electronic appliances to automobiles, attempting to provide farmers a one-stop destination for all of their needs. Companies such as Godrej and DCM Shriram Consolidated are launching `one-stop shops' for farmers and their communities.
Strategies in Rural Retail
In this matrix, Ansoff’s four basic box matrix has been subsequently developed & refined to apply to rural retail. The basic purpose of these variations is to describe retail specific strategy options, ranging in level of risk from low at top left of the matrix to high at the bottom right , coupled with the growth vector to give strategic direction to the firm, both, within as well as across the quadrants, in line with its strategic capabilities. In adapting the basic matrix to a retail situation, broaden the “product” dimension to include trading style as well as product or range assortment, and new customer segments. An alternative classification of business strategies is a specifically rural retailing context- expansion, adaptation, and diversification.
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CASE STUDIES- FMCG
Internet use in Rural Marketing – FMCG sector: A case study on ITC
Taking the Internet to the villages and empowering rural India with information at the click of a button is what best describes ITC's much acclaimed initiative - e-Choupal. ITC's unique web based initiative offers farmers of India all the information, products and services they need to enhance farm productivity improve farm-gate price realisation and cut transaction costs. With the e-Choupal farmers can access latest local and global information on weather, scientific farming practices as well as market prices at the village itself through this web portal - all in Hindi. It also facilitates the supply of high quality farm inputs as well as purchase of commodities at their doorstep. Given the literacy and infrastructure constraints at village level, this model is designed to provide physical service support through a Choupal Sanchalak - himself a lead farmer - who acts as the interface between computer terminal and the farmers. Full contents of this site are therefore made available to the registered sanchalaks only. The e-Choupal initiative gave farmers the power of scale and better bargaining power when it came to selling their produce and buying agri-inputs. Through ‘real-time multicasting’ ability of the Internet, it was possible to delink ‘information’ from ‘transaction’ and this in turn places the freedom of choice in the hands of the farmer. Economic empowerment of the farmers was what the e-Choupal aimed at. The e-Choupal also made it possible for the farmers to bundle ‘information’, ‘knowledge’, and ‘transaction’ from independent participants in a collaborative business model to deliver unique value to the farmer and the business enterprises simultaneously. Thus, the heavy dependency on the traditional institutional infrastructure was reduced. IT can make a difference with regard to heterogeneity. He said that the Internet provided low-cost oneto-one interactive notwithstanding the fragmentation and geographical dispersion. At the end of the day what a farmer wants to achieve is higher income through increased yields, improved quality and reduced transaction costs, which is exactly what e-Choupals provided. These e-Choupals provided the power of scale to the small farmers, customised knowledge despite heterogeneity and real-time information despite distances. ITC's e-Choupal leverages IT to improve farmers’ decision making ability to align farm output with market demands, and to improve productivity and brings in best of breed partnerships. The company targeted the bottom rung of the farmers first as the company's vision was to cover the largest segment of rural India thus spanning 100,000 villages across 15 states by building capability to deliver superior shareholder value sustainably. ITC's only mandate was that of “Improving quality of life in rural India.”
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Case study: Hyundai Utsav
Hyundai Motor India Ltd, the country’s largest passenger car exporter and the second largest car manufacturer, after securing its foothold in the urban and semi-urban markets, embarked upon an ambitious penetration drive to tap the consumers residing in the hinterlands of India. With this aim, the automotive major launched a special marketing initiative ‘Hyundai Utsav’ to boost its sales in rural areas and tier-III cities across the state of Andhra Pradesh and Punjab initially. Beginning 18th April, the ‘Hyundai Utsav’ initiative kicked off in over 50 venues in Andhra Pradesh and Punjab markets. Under the scheme, Hyundai reached out to the prosperous farmers, money lenders, business community, private companies, government employees, doctors and lawyers across all non dealership towns to create awareness about the Hyundai brand. The local wholesale marketplace or the ‘Mandi’ which witnesses a large daily congregation of people was the venue in many places. Speaking on the occasion, Arvind Saxena, Sr. Vice-President (Sales & Marketing), HMIL says, “Rising rural incomes, healthy agriculture growth, boost in demand, tremendous growth in rural infrastructure and growing consumerism have opened up new avenues for automobile manufacturers. We feel that 50 percent of the 220 million rural households are potential car buyers and to tap this vast unexplored market we have launched the ‘Hyundai Utsav’ campaign. In order to facilitate rural financing, we have also tied-up with various PSBs offering a deeper network in rural villages. Hyundai has a strong brand value in these markets and we are confident that a vast chunk of prospective car buyers would prefer our products.” Under the ‘Hyundai Utsav’ scheme, well-trained activation team was stationed across all the locations to supervise the entire activity, attend to the visitors, offer test drives, educate consumer about loans and schemes and also collate consumer data over a period of close to 42 days.
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Conclusions
Here we see that a big company like Hyundai forays into the Indian Rural market with its festival called as Hyundai Utsav with a view to penetrate the rural markets. The AIDA model demonstrated below acts as the guideline to creating a brand strategy (for this case) in the rural market.
Awareness
Interest
Desire
Action
Figure 1: The AIDA Model
Creating Awareness The company was aware that the hinterlands of India considered only 2 brands viz Tata Motors and Maruti Suzuki that can be bought by them. Hence there was a need to create awareness about the brand Hyundai and its products. The company reached all the influential people whom it had segmented to buy the brand. The company did so through a special initiative called Hyundai Utsav. The venue selected also holds a strategic importance because of the kind and amount of crowd that attends the venue. Hence it affects the visibility of the brand which is crucial to spread awareness about the brand. Creating Interest It was being difficult for the rural market to buy the Hyundai product as problems with rural financing cropped up. Hence even if consumers are aware about the brand their awareness did not translate on to the next level. Hence to facilitate rural financing Hyundai tied up with various PSBs that offered a deeper network in the rural markets. Hence easing away the financing difficulties and making the decision making process easier for the consumers. Creating Desire After taking the consumers to the second level of the AIDA Model, the next stage that strengthens the decision of the consumer, to buy the product is the DESIRE. Hence this desire amongst the consumers was created by giving test drives to the consumers. These test drives gave the consumers the feel of the product and an experience that was foreign to them till now. Hence it created a desire among the consumers to try and buy the brand. Action Action of the consumer depended upon his or her reaction to the above processes.
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Case Study: Vim GHAR GHAR Challenge
HUL, the MNC Company into FMCG products was one of the first to realize the importance of huge rural markets in India. Consider thee market out of 5 lakh villages in India only 1 lakh have been tapped so far. Teaching people how to wash utensils In June 2002, the employees of HUL, a subsidiary of FMCG major, Unilever and India’s leading FMCG Company literally took to streets. The company was undertaking a promotional exercise in rural areas of 3 states viz. MP, Bihar, Orissa for its utensil cleaning bar ‘VIM’. A part of HUL’s ongoing television campaign “VIM GHAR GHAR CHALLENGE”, the promotional drive involved company officials to visit rural towns and demonstrate how vessels are cleaned with VIM. Commenting on this, Sanjay Bhel, HLL’s marketing manager, said, “For the purpose, we are educating the rural masses on the ongoing “Vim Ghar Ghar Challenge”, TV commercial by conducting live demonstrations about vessel cleaning. Our aim is to tap the growth rate of the 4 billion scouring bar market; although it has been growing at a rate of 15% per annum, since last year it has been decelerating”. This exercise was just one of the numerous marketing drives undertaken by HUL over the decades to increase its penetration in the Indian Rural markets. The company had, in fact earned the distinction of becoming one of the few Indian companies that had tapped the country’s vast rural population so extensively. It was therefore not mere coincidence that around 50% of its turnover came from rural markets. With the penetration of their products reaching saturation levels in many urban markets, FMCG companies had to turn towards rural areas in order to sustain revenue, growth and profitability. Since the disposable income in the hands of rural people had been increasing in the late 1990s and the early 21st century, it made sense for companies to focus their energies on this segment. Industry observes also felt that HUL was at an advantage compared to most of its competitors, thanks to its consistent, pioneering efforts towards establishing well entrenched distribution and marketing networks to reach the vast Indian rural masses.
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Conclusions
70% of the Indian Rural population was found to be using unbranded scouring bars and liquids to wash utensils. Here lied the opportunity for HLL to tap the Indian rural market and improve or raise its bottom lines and expand the marketing base for ‘Vim’ bar. HLL hence, followed a strategy of a development program wherein they taught the rural population ways to wash utensils properly. Hence they tried to gel in with the rural consumers which entrenched them deep into the minds of the consumers. HLL also tried to uplift the whole rural market from using unbranded bars and other things that caused physical harm to who ever washes the utensils to using branded bars which were soft on the skin and also helped cleansing of utensils better. The company thus created a pull strategy for itself.
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Case study: IMC in rural areas
Campaign for Coca-Cola
Facts about rural India – Coca-Cola launch 1. Television: Television advertisements specifically targeted at rural consumers. Televisions Cover 26% of Total rural households of 145 Million. 2. Low Consumption: Product consumption remains low in rural India despite the fact that the area is home to half of the country’s total disposable income. 3. Pricing is Important: Effectively pitching a global brand to a rural household requires more than just a catchy phrase or a Bollywood face. You need to price and position your product correctly. The 2002 “Thanda matlab Coca Cola” television campaign India is still not a fully literate country, so television opens a new horizon in front of the advertising fraternity. In India, when somebody wants a cold drink they say, “Can I get a ‘thanda?’ – ‘thanda’ means cold drink. What we said is when anybody says ‘thanda’ it should mean only Coke. People really loved that [Thanda] campaign for various reasons. There was a very fresh take on India. The hero was not from a metropolitan area, coming from college or speaking a “yo” [Americanized slang] language. He was a normal guy, he could be a farmer, he could be a bank clerk or he could be a tourist guide, so he was a common man and people really warmed up to that because the country was becoming more confident. In rural India, they really liked the campaign. It was slice of life; it was out of their life. A drink that they felt was very alien, a taste that they feared or thought would be far removed from them they found coming closer to them. They found people like themselves being projected in advertising, so they warmed up to it. It changed the whole approach of Coca-Cola in this country. This Coke campaign “Thanda matlab Coca-Cola” became almost like a cult campaign and all the dialogues became part of the common parlance. People started using it in everyday life. The idea was to tell a story in a very different and unique way. Not a linear storyline but a much layered way of telling a story where every moment is significant and important and hence you are communicating something in a very unique way that wasn’t done before. With growing prosperity in rural India, multinationals are looking to the Coca-Cola template to crack the rural market. If marketers want to crack small town India, they have to speak their language — meaning understand their lifestyle. In a country that has so much poverty and hunger – how can one glorify some product like chewing gum or chocolates? One can only make the advertisements non-serious. If they are made serious, people would not buy it. If it is non-serious “oh it’s a chewing gum, it’s an impulse purchase,” then they just like the body language, tone and manner. In India there is a huge sort of resistance towards consumption, not in rural India only; it’s in every part of this country. In India, people feel indulgence is bad. So if a company wants to sell indulgence it has to sell it in the garb of convenience, in the garb of improvement of the consumer’s life. 17
Second, rural India is a very price sensitive market, very price conscious. A company has to price the product correctly and position it correctly so that it improves the consumer’s lives. The consumer in India wants to feel discerning. So a company has to make the consumer feel very comfortable with the price they are paying. Thirdly, Trust is important. If customers can trust the brand then any product can be launched and consumers will accept it.
Campaign for Marico hair oil
Marico Industries Client Product Brand Marico Perfumed Hair Oil Hair & Care
Task for the Agency Create awareness for Parachute Coconut Oil Pouch in towns with less than 20000 population in Tamil Nadu Convert loose oil buyers into Parachute pouch customers, by highlighting the advantages of the Parachute brand Convince them to pay a small premium for the brand.
Communication Strategy The Van Campaign aimed exclusively for women and for the first time conducted by women Get the women folk out of their homes and participate in a van campaign which usually is dominated by men and children Make them stay through the van programme and ensure their active involvement
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Result According to Marico, substantial increase in sales reported from the campaign areas A study by Marico showed a 25% conversion from loose coconut oil usage to Parachute Pouch Pack, Post Van Campaign The success of the campaign motivated Marico to repeat the campaign the following year even in towns with 1 lakh + population, with excellent results
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CASE STUDY: RETAIL
GODREJ AADHAR- “Khusiyon Ka, Khushhali Ka”
Indomitable force was born in 1897, a young man called Ardeshir Godrej gave up law & turned to lockmaking. He produced the finest security equipment, & then stunned the world by creating a soap from vegetable oils. Godrej Agrovet Ltd. (JV with Future Group has 80% stake), is into diversified agri-businesses, such as animal feed, integrated poultry business, agrochemical, oil palm plantation, & processing- and rural retailing through Godrej Aadhar. Godrej Agrovet offers complete agricultural solutions & a wide range of commodities , including food, grocery, apparel, footwear, home appliances, furniture, kitchenware, hardware to valueadded services including banking, postal services pharmacy to ease the burden of the entire community. Presently, there are 62 outlets acroos the country. Each store is spread over 30006500 sq.ft. & each outlet services around 20 villages in its radius. Positioned as `Godrej Aadhaar - Khushiyon Ka, Khushhali Ka', the new format stores mark the beginning of a chain which shall form the farmer's Aadhaar for `Unnati, Ghar Sansar & Gaon', a move from being just a complete agricultural solution provider to being a multi category retail outlet with wide range of products and services housing a fair mix of brands and private labels. The company is in the process of talking among others to Apollo Hospitals to set up pharmacy/polyclinics at the large format stores. Bajaj Alliance Life Insurance too has tied up with Godrej Aadhar to offer a life insurance plan for rural masses with a one time premium of Rs. 75 to be covered for a minimum of five years. The new format Aadhaars will provide a very conducive retail atmosphere and women-friendly interface, company officials said. Godrej Aadhaar, with an objective to improve productivity, higher returns and improved cost benefit ratio, at present offers crop advisory services, soil and water testing services; buy back of output, crop finance, supply of agri-inputs and animal feeds, transfer of information (weather, price, and demand supply), door delivery of products among other things.
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CASE STUDIES- PHARMACEUTICALS
Case Study: Glaxo SmithKline
1. GSK India undertakes a number of Rural Development initiatives through GRAMIN AAROGYA VIKAS SANSTHA (GAVS), a Rural Health Development Organization. GAVS is a registered public trust promoted by the heritage company Glaxo India in April 1997. 2. India is a country with more than one billion people where an estimated 350 million people live in absolute poverty. Tribal people constitute roughly 8% of India’s population. Tribals are socioeconomically disadvantaged and marginalized groups. Most tribes are concentrated in heavily forested areas that combine inaccessibility with limited political or economic significance. 3. Tribals have been accorded special status in the constitution and there are several schemes designed for their upliftment. However, a number of these schemes are poorly implemented and there has not been much improvement in their status. Even today, the tribal population lags substantially behind in terms of education and health. 4. GAVS works in 15 predominantly Tribal villages in Peth Taluka, Nashik District. As a part of its Rural Tribal Development mission, GSK collected primary data from 92 villages around Nashik in the year 2005, to identify the most underserved village communities which need support. 5. Peth is the smallest Tehsil / Block in the district; it occupies 3.63% of the district. The tribal population in Nashik falls amongst the 10% of the total Tribal population (7.4 million) in the state of Maharashtra. These groups remain isolated, living in remote forest and hilly areas. A majority of them have poor health status and are ignorant about health issues. Inaccessibility, low literacy level, absence of any NGO and paucity of basic healthcare facilities characterize these villages. That is why we selected this cluster of villages for providing support. 6. The Trusts’ Mobile Clinic covers a distance of 160 kms each day and visits a cluster of five villages in rotation, covering all 15 villages. A qualified medical practitioner along with two healthcare workers visits the villages five days a week. Social workers and 30 Healthcare Workers from the local villages render help in this activity. Over 20000 Tribal people are benefited by this healthcare initiative. 7. The villagers often suffer from skin problems, TB, Asthma, water-borne diseases and Respiratory Tract Infections. Ignorance, poverty and difficult terrain make it near impossible for these inhabitants to avail of timely medical services. This results in aggravation of the diseases to extreme conditions, often leading to fatalities.
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Case Study: LUPIN
Companies like Lupin are working with this in mind. The marketing strategy in the rural areas is to provide patients with quality medicines at competitive prices. We follow a four point strategy of product, people, price and promotion. 1. The company aims at reaching out to uncovered medical practitioners in these markets. The four 'P' strategy of the company works to supply the right set of medicines (product) by recruiting, training and developing local persons (people) as 'Medi-Pracharaks', who are best equipped to service the needs of local community and doctors. The company also ensures that quality drugs are made available at an affordable price. As part of its promotional program, the company organises various knowledge campaigns like 'Arogya Jagriti Mela', 'Swastha Mela'. 2. For instance, Lupin has a strong brand franchise in anti-infective, pain management, and gastrointestinal and these segments accounts for 40 percent of domestic formulations sales. The company has a dedicated rural field force of more than 300 people and is rapidly expanding it. Presently, they are operating in ten states including Andhra Pradesh, Tamil Nadu, Madhya Pradesh, Chattisgarh, Bihar, Uttar Pradesh, Punjab, Haryana and Rajasthan and catering to 35,000 rural medical practitioners. The company is also planning to expand its operations to the remaining states in its next phase of expansion, said Chakraborty. 3. With its rural marketing initiative, through its Lupinova division, the Company is increasingly catering to the unmet needs of rural populace that constitute around 70% of the Indian population. Looking at the challenges posed by these markets in terms of reach, the Company introduced a self sustained model that has helped it in successfully taking its products to 10 states thus benefiting the rural patients in these states 4. Key Products: Lupinova Product X-Ceff Supraxone L-Flox Novazyme Ferinova Therapeutic Segment Cefotaxime Injectible Ceftriaxone Injectible Lovefloxacin Tab Digestive Enzyme FerricAmmonium Citrate
5. The Lupin Human Welfare and Research Foundation (LHWRF), which is committed to rural reconstruction, reaches out to over 1919 villages in eleven districts of four states covering nearly 1.45 million people in India. 22
6. On 2 October 1988, Mahatma Gandhi`s birthday, Lupin Chairman Dr Desh Bandhu Gupta founded the Lupin Human Welfare and Research Foundation [LHWRF]. It’s brief to provide an alternative, sustainable and replicable model of rural development. 7. A program that began modestly with 35 villages has succeeded in revitalizing more than 1919 villages in 11 districts in Rajasthan, Madhya Pradesh, Maharashtra and Uttar Pradesh to become one of the largest NGOs in India. For every rupee spent by Lupin, LHWRF`s efforts have attracted more than Rs.9 of contribution from other agencies and individuals. India`s central and state governments, the UN, and other international voluntary agencies have appreciated the LHWRF`s grassroots work.
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Case Study: MANKIND
Mankind pharmaceutical company started in 1995 by Mr. Ramesh C. Juneja who was working as a Medical Representative with Lupin Pharmaceuticals in meerut in UP. In 1984, he started BestoChem Formulations with his two brothers, Rajeev and Girish. A few years later, Ramesh and Rajeev left BestoChem with Girish, and in 1995, set up Mankind, a meager capital of 50 lacks and 20 employees. It focused more on rural and semi rural markets as compared to urban market. It started from 2 states in 1995 and employed 53 sales representatives by the end of 1995. Now they have branched to every corner of the country. They are present in every town having a population of more than 1000. Major differentiators in the company strategy were; Aggressive pricing strategy – Ramesh C. Juneja(M.D) said that pharma companies do not pass the decrease in bulk drug prices to patients, but mankind does e.g. Mankind sells antibiotics. 1. Moxikind CV (30 ml) at half rate for Rs 47.95 that GlaxoSmithKline (GSK) sells Augmentin, its best-selling antibiotic. 2. Extensive sales force and distribution network – Mankind has one of the largest sales force comprising of 5000 in 2009(compared to 2500 in Ranbaxy) sales representatives to ensure that drug is always available. They motivate their sales employees by providing a high variable pay. Mankind has made strategic changes in the company’s structure and function. Initially they used to cater to vitamins, painkillers and antibiotic that was soured from other Indian firms and branded as Mankind. Now it has expanded into three divisions namely Mankind, Discovery Mankind and Life Star. Mankind division has a mixed bag of cardio and diabetic medicines. Discovery mankind focuses on pain relief and antibacterial and it has brands like Zenotin, Sparkind, Nobel Gel, Nuforce-3 Kit, Fynal, and Mahacef. Life star division of mankind is on ophthalmology and the dermal segment. Soon it is preparing to enter into anti-malaria. The company is all set to enter the semi-regulated markets of South East Asia, South Africa, and former CIS countries along with targeting the neighbouring countries like Myanmar, Nepal and Sri Lanka. Mankind was able to achieve a turnover of 300 crores in 2005 over 3.5 crores in 1995. It’s fast pace has placed it amongst the top five fastest growing pharmaceutical companies of India (ORG-IMS, retail audit, 2005). According to research firm ORG-IMS, the Rs 920-crore (FY 2008-09 sales), with a compounded annual growth rate (CAGR) of 35 per cent over the past four years. The market leader Cipla is growing at a modest 15 per cent. Mankind is one of the fastest growing pharmaceutical company and its drugs are the most prescribed drugs in the market as per the data from ORG-IMS.
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Indian Pharma Top 10
Rank 1 2 3 4 5 6 7 8 9 10 Company Cipla Ranbaxy GSK Piramal Zydus Sun Pharma Alkem Lupin Mankind Aristo Retail sales in India* 2020 1837 1618 1533 1362 1333 1185 1028 993 906 Growth (%) 115 8 8 23 14 19 15 13 25 18
*Sales (Rs Crores) from Sep 08 – Aug 09
Indian Top 5
Rank 1 2 3 4 5 *Prescription per doctor per month Company Mankind GSK Cipla Piramal FDC P/D/M* 75 68 65 62 55
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For the current fiscal the company is targeting a sales target of 1250 crores. Mankind is already present in 90% of the total market (in terms of product portfolio), so now the company’s trying to come up with new dosage forms and delivery systems in addition to product launches. The anti infective and Gastro intestinal segments accounts for 47 % of mankind’s revenues. They are growing at 9% and 11% respectively. So as it has major earning coming from mature markets that are not growing at a good rate, mankind would have to look at segments like Cardiac, Diabetes and CNS as they are growing segments.
CONCLUSION
The key dilemma for MNCs eager to tap the large and fast-growing rural market is whether they can do so without hurting the company's profit margins. The company's product portfolio is essentially designed for urban consumers, and the companies are cautioned from plunging headlong into the rural market as capturing rural consumers can be expensive. Any generalization "about rural India could be wrong and one should focus on high GDP growth areas, be it urban, semi-urban or rural."
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doc_201938998.pdf
Strategy for MNCs, Opportunity in rural market, Approaches to rural marketing, Rural Retail Strategies, Retail in rural markets, Internet use in Rural Marketing – FMCG sector: A case study on ITC, Case study: Hyundai Utsav, Case Study: Vim GHAR GHAR Challenge, Case study: IMC in rural areas, GODREJ AADHAR- “Khusiyon Ka, Khushhali Ka”.
Innovations in Rural Marketing Strategies
Swati Gupta (116), Bhavesh Panchal (135), Dolly Sakhpara (045), Navamita Atreya (003) K.J.Somaiya Institute of Management Studies and Research
Table of Contents
Introduction ............................................................................................................................................ 3 general rural scenario.............................................................................................................................. 5 Geographic Information Systems- An important tool for rural marketing ............................................. 5 Market Analysis ............................................................................................................................... 5 Identification of potential market - Prioritization of districts. ........................................................... 5 Drilling down to the places of visit - Analysis by query ..................................................................... 6 Composite query ............................................................................................................................. 6 Buffer query .................................................................................................................................... 6 Route Planning ................................................................................................................................ 6 Rural Marketing Strategy for MNCs ..................................................................................................... 7 Opportunity in rural market ............................................................................................................. 7 Approaches to rural marketing ........................................................................................................ 7 Rural Retail Strategies........................................................................................................................ 10 Retail in rural markets ....................................................................................................................... 10 Strategies in Rural Retail .................................................................................................................... 11 Case Studies- FMCG............................................................................................................................... 12 Internet use in Rural Marketing – FMCG sector: A case study on ITC .................................................. 12 Case study: Hyundai Utsav................................................................................................................. 13 Conclusions ................................................................................................................................... 14 Case Study: Vim GHAR GHAR Challenge ............................................................................................. 15 Conclusions ................................................................................................................................... 16 Case study: IMC in rural areas............................................................................................................ 17 Campaign for Coca-Cola ................................................................................................................. 17 Campaign for Marico hair oil.............................................................................................................. 18 CASE STUDY: retail................................................................................................................................. 20 GODREJ AADHAR- “Khusiyon Ka, Khushhali Ka” ................................................................................. 20 Case Studies- pharmaceuticals............................................................................................................... 21 Case Study: Glaxo SmithKline............................................................................................................. 21 Case Study: LUPIN ............................................................................................................................. 22 Case Study: MANKIND ....................................................................................................................... 24 Indian Pharma Top 10 ........................................................................................................................ 25 2
Indian Top 5 ...................................................................................................................................... 25 Conclusion............................................................................................................................................. 26
3
INTRODUCTION
The villages and small towns of India that were once inconsequential dots on maps are now getting the attention of all marketers. Rural India has more than 6 lakh villages, housing about three fourths of the country’s population that is one third of the national income. Rural India accounts for 30-60% of the total sales of a host of consume goods ranging from biscuits to toothpastes, shampoos and washing machines. It accounts for three fourths of all bicycles and radios sold in India, 56% of all batteries, 55% of both tea and washing cakes/bars, 31% of color televisions, 8% VCRs, 10% of washing machines, 18% refrigerators, 38% toothpastes, 24% of Shampoo, ad 28% of all face creams (Krishnamoorthy 2000). Over 60% of Lifebuoy sales occur here and over 60% of Nirma washing powder sales is rural. Philips is a household name in consumer durables. HMT watches are commonly found. Mahindra jeeps and tractors are very popular with farmers. Bullet continues to be a popular motorcycle. Thanks to globalization, economic liberalization, IT revolution and improving infrastructure, middle class rural India today has more disposable income than it had earlier. The growth in the rural markets is perhaps the most significant feature of the marketing environment of India in recent times. Marketers have realized that rural market is no push over. Apart from flagging urban consumption levels, a newly found rural prosperity is the key driver. Therefore, a thorough understanding of the rural markets has become an important aspect of marketing in the Indian marketing environment today. Saturation of Urban Market The high rate of growth of the rural market is not the main factor that has driven companies to go rural. The compelling factor is that the urban markets are becoming increasingly complex, competitive and saturated. Both domestic companies and multinationals have burnt their fingers fighting off the fierce competition, price wars and sluggish demand by high media spends and expensive consumer promotions in the urban markets. The marketers have almost used every trick to slice up the urban consumer pie form demographics to psychographics, usage patterns to gender. This intensified competition in urban markets leads to increased costs and reduced market shares. Therefore, marketers are queuing up to derive benefit from the great rural opportunity. With growing incomes and aspirations in rural areas, both Indian and multinational companies have started designing strategies suited to the rural market. The companies are now looking at the rural areas to increase sales and also try and gain the first mover advantage. Peculiarities of Rural Markets Entering into rural market is not an easy task. This is the reason except the major players of the industry companies are not venturing into this market in spite of the knowledge of the vast untapped potential of this market.
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Key growth drivers in the rural development are; • • • • • Rising disposable incomes (40%) Improvement in medical infrastructure (20%) Population growth (15%) Health insurance penetration (10%) Others (15%) ? Patent approval ? Increase in disease rate and profile ? Strengthening fragmented distribution in India – private pharma retail chain
Even some of the big companies find it difficult sometimes, to operate in these markets. For instance, P&G in a marked shift from its earlier obsession with chasing sales targets by aggressively expanding distribution cover is streamlining its distribution network, in an exercise code named Operation Golden Eye. Only for a limited set of products like Vicks action 500 and some detergent sachets, P&G will not have much of a distribution presence in rural areas. The idea behind rural marketing should be to expand and create markets. The companies are now redesigning the whole marketing mix to ensure that the rural needs are met effectively. In this paper we plan to present some successful and innovative rural marketing strategies adopted by companies to raise their bottom lines. Hence we divide the paper into following segments
GENERAL RURAL SCENARIO
Geographic Information Systems- An important tool for rural marketing
Market Analysis
To identify the potential markets application offers various procedures such as prioritizing districts according to the required parameters or assigning the pre-decided list of places to be covered for further analysis. Thus making selection process is flexible. These procedures as a result provide user with identified potential market on the basis of desired parameter depicted on the map.
Identification of potential market - Prioritization of districts.
The Function of district prioritization enables the user to rank the districts based on desired parameters and weightage. User can prioritize districts with the option of national or state level considering only the rural areas, or urban areas or both. "LinCompass" has identified approximately forty parameters related to demographic, infrastructure, agriculture, civic, and economic information. User can prioritize districts by selecting any or all of these parameters and by assigning desired weightage to them. Finally the application ranks the districts based on the composite Index value (index provided by the client). This 5
facilitates selection of below the line district. District priority index becomes the first step towards Below the Line (BTL) campaign planning.
Drilling down to the places of visit - Analysis by query
"LinCompass" allows different kinds of query for analysis purposes. It has the option of composite query and/ or buffer query for further filtering areas based on census indicators.
Composite query
Composite query gives user the option to drill into the data by running queries based on certain parameters. The user can have five parameters to run the query. This query can be invoked from within the buffer query as well as separately. User can generate 25 reports using varied AND/OR combinations. The query is very user-friendly, fast and assists the users to enter the query without knowing the structure of the tables.
Buffer query
This function is useful to perform spatial query. User can select places falling within a certain buffer distance from a nodal town or a certain highway by creating a buffer of desired distance. Application identifies all the places falling within the given range. It also gives the provision to further filter down the identified places by performing composite query. Query results can be stored as new maps that can be retrieved later for analysis. The query function is very flexible allowing users to go back and forth reselecting and performing queries using different set of parameters.
Route Planning
[
This function provides the facility to generate route plans for marketing campaigns. The user can create any number of route plans based on various parameters. The software has the facility to save and store the route plans generated in iteration. The user can then evaluate each of these plans individually and select the best. It generates route plans on the basis of shortest path and assigned weightage to the selected parameters. It provides user the facility to specify the 'Start Place' and the 'Start Date' of the route. Example of a typical route plan: The required route should cover villages of population less than 4000, and each day it should visit three villages that should have either a primary school or primary health center. The total travel distance should not exceed 60 Km and the distance between two villages should be less than 15 Km. As a result application will identify all the villages with population less then 4000 in Malihabad of Lucknow District having either haat day, primary school or primary health center and create a optimum route to cover maximum villages in the assigned days. 6
Features of Route Design Module Route Design Module contains the following options for designing the route plan, which gives user flexibility to have desired route plan. User can use any option with any combination at any stage of the process Route plan calculator 'Route Plan Calculator' helps user in optimizing the number of places and deciding campaign days. It first prompts user to provide necessary inputs like number of places to be covered per day and duration of campaign. It also shows other relevant information like number of days to be spent in the towns and corresponding values of the parameters selected during query. This helps user in deciding the duration of halt in the identified towns and to do the desired alterations. This feature is particularly helpful while designing route plans covering multiple villages per day and in the same plan having longer duration for a town. Finally it displays a route plan report having summary of places to be covered and the ratio of actual time required against the time allotted by user. Based on this the user can either proceed or go back to try different iterations for designing a more optimum route plan.
Rural Marketing Strategy for MNCs
To expand the market by tapping the countryside, more and more MNCs are foraying into India's rural markets. Among those that have made some headway are Hindustan Lever, Coca-Cola, LG Electronics, Britannia, HDFC Standard Life, Philips, Colgate Palmolive and the telecom companies.
Opportunity in rural market
The Indian rural market with its vast size and demand base offers a huge opportunity that MNCs cannot afford to ignore. With 128 million households, the rural population is nearly three times the urban. As a result of the growing affluence, fuelled by good monsoons and the increase in agricultural output to 200 million tonnes from 176 million tonnes in 1991, rural India has a large consuming class with 41 per cent of India's middle-class and 58 per cent of the total disposable income. The importance of the rural market for some FMCG and durable marketers is underlined by the fact that the rural market accounts for close to 70 per cent of toilet-soap users and 38 per cent of all two-wheeler purchased. The rural market accounts for half the total market for TV sets, fans, pressure cookers, bicycles, washing soap, blades, tea, salt and toothpowder, What is more, the rural market for FMCG products is growing much faster than the urban counterpart.
Approaches to rural marketing
The rural market may be alluring but it is not without its problems: Low per capita disposable incomes that is half the urban disposable income; large number of daily wage earners, acute dependence on the vagaries of the monsoon; seasonal consumption linked to harvests and festivals and special occasions; 7
poor roads; power problems; and inaccessibility to conventional advertising media. However, the rural consumer is not unlike his urban counterpart in many ways. The more daring MNCs are meeting the consequent challenges of availability, affordability, acceptability and awareness of products.
Availability of product The first challenge is to ensure availability of the product or service. India's 627,000 villages are spread over 3.2 million sq km; 700 million Indians may live in rural areas, finding them is not easy. However, given the poor state of roads, it is an even greater challenge to regularly reach products to the far-flung villages. Any serious marketer must strive to reach at least 13,113 villages with a population of more than 5,000. Marketers must trade off the distribution cost with incremental market penetration. Over the years, India's largest MNC, Hindustan Lever, a subsidiary of Unilever, has built a strong distribution system which helps its brands reach the interiors of the rural market. To service remote village, stockists use autorickshaws, bullock-carts and even boats in the backwaters of Kerala. Coca-Cola, which considers rural India as a future growth driver, has evolved a hub and spoke distribution model to reach the villages. To ensure full loads, the company depot supplies, twice a week, large distributors which who act as hubs. These distributors appoint and supply, once a week, smaller distributors in adjoining areas. LG Electronics defines all cities and towns other than the seven metros cities as rural and semi-urban 8
market. To tap these unexplored country markets, LG has set up 45 area offices and 59 rural/remote area offices. Affordability of a product The second challenge is to ensure affordability of the product or service. With low disposable incomes, products need to be affordable to the rural consumer, most of whom are on daily wages. Some companies have addressed the affordability problem by introducing small unit packs. Godrej recently introduced three brands of Cinthol, Fair Glow and Godrej in 50-gm packs, priced at Rs 4-5 meant specifically for Madhya Pradesh, Bihar and Uttar Pradesh - the so-called `Bimaru' States. Hindustan Lever, among the first MNCs to realise the potential of India's rural market, has launched a variant of its largest selling soap brand, Lifebuoy at Rs 2 for 50 gm. The move is mainly targeted at the rural market. Coca-Cola has addressed the affordability issue by introducing the returnable 200-ml glass bottle priced at Rs 5. The initiative has paid off: Eighty per cent of new drinkers now come from the rural markets. Coca-Cola has also introduced Sunfill, a powdered soft-drink concentrate. The instant and ready-to-mix Sunfill is available in a single-serve sachet of 25 gm priced at Rs 2 and mutiserve sachet of 200 gm priced at Rs 15. Acceptability of a product The third challenge is to gain acceptability for the product or service. Therefore, there is a need to offer products that suit the rural market. One company which has reaped rich dividends by doing so is LG Electronics. In 1998, it developed a customised TV for the rural market and christened it Sampoorna. It was a runway hit selling 100,000 sets in the very first year. Because of the lack of electricity and refrigerators in the rural areas, Coca-Cola provides low-cost ice boxes — a tin box for new outlets and thermocol box for seasonal outlets. The insurance companies that have tailor-made products for the rural market have performed well. HDFC Standard LIFE topped private insurers by selling policies worth Rs 3.5 crore in total premia. The company tied up with non-governmental organisations and offered reasonably-priced policies in the nature of group insurance covers. With large parts of rural India inaccessible to conventional advertising media only 41 per cent rural households have access to TV. Awareness of a product This is another challenge. Fortunately, however, the rural consumer has the same likes as the urban consumer — movies and music — and for both the urban and rural consumer, the family is the key unit of identity. However, the rural consumer expressions differ from his urban counterpart. Outing for the former is confined to local fairs and festivals and TV viewing is confined to the state-owned Doordarshan. Consumption of branded products is treated as a special treat or indulgence. Hindustan Lever relies heavily on its own company-organised media. These are promotional events organised by stockists. Godrej Consumer Products, which is trying to push its soap brands into the interior areas, uses 9
radio to reach the local people in their language. Coca-Cola uses a combination of TV, cinema and radio to reach 53.6 per cent of rural households. It doubled its spend on advertising on Doordarshan, which alone reached 41 per cent of rural households. It has also used banners, posters and tapped all the local forms of entertainment. Since price is a key issue in the rural areas, Coca-Cola advertising stressed its `magical' price point of Rs 5 per bottle in all media.LG Electronics uses vans and road shows to reach rural customers. The company uses local language advertising. Philips India uses wall writing and radio advertising to drive its growth in rural areas.
Rural Retail Strategies
Customize Merchandize
Customize Promotion
Customize the Store Operation
Rural Retail Strategies
Customize the Communication
Customize the Price
Retail in rural markets
India, like Britain, is also a nation of shopkeepers. With over 12mn retail outlets, India has one of the highest densities of retail outlets in the world with one retail outlet for ~90 persons. Retailers inspired by the Wal-Mart story of growth in small town America are tempted to focus on smaller towns and villages in India. In India for a long time a large chunk of retail outlets were grocery shop. This pattern had been changing in recent years, in urban and rural markets. Of late, India's largely rural population has also caught the eye of retailers looking for new areas of growth. A no. of companies like Tata, ITC, Godrej, etc. are set to storm the rural areas of the country offering a diverse product range from FMCG to 10
electronic appliances to automobiles, attempting to provide farmers a one-stop destination for all of their needs. Companies such as Godrej and DCM Shriram Consolidated are launching `one-stop shops' for farmers and their communities.
Strategies in Rural Retail
In this matrix, Ansoff’s four basic box matrix has been subsequently developed & refined to apply to rural retail. The basic purpose of these variations is to describe retail specific strategy options, ranging in level of risk from low at top left of the matrix to high at the bottom right , coupled with the growth vector to give strategic direction to the firm, both, within as well as across the quadrants, in line with its strategic capabilities. In adapting the basic matrix to a retail situation, broaden the “product” dimension to include trading style as well as product or range assortment, and new customer segments. An alternative classification of business strategies is a specifically rural retailing context- expansion, adaptation, and diversification.
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CASE STUDIES- FMCG
Internet use in Rural Marketing – FMCG sector: A case study on ITC
Taking the Internet to the villages and empowering rural India with information at the click of a button is what best describes ITC's much acclaimed initiative - e-Choupal. ITC's unique web based initiative offers farmers of India all the information, products and services they need to enhance farm productivity improve farm-gate price realisation and cut transaction costs. With the e-Choupal farmers can access latest local and global information on weather, scientific farming practices as well as market prices at the village itself through this web portal - all in Hindi. It also facilitates the supply of high quality farm inputs as well as purchase of commodities at their doorstep. Given the literacy and infrastructure constraints at village level, this model is designed to provide physical service support through a Choupal Sanchalak - himself a lead farmer - who acts as the interface between computer terminal and the farmers. Full contents of this site are therefore made available to the registered sanchalaks only. The e-Choupal initiative gave farmers the power of scale and better bargaining power when it came to selling their produce and buying agri-inputs. Through ‘real-time multicasting’ ability of the Internet, it was possible to delink ‘information’ from ‘transaction’ and this in turn places the freedom of choice in the hands of the farmer. Economic empowerment of the farmers was what the e-Choupal aimed at. The e-Choupal also made it possible for the farmers to bundle ‘information’, ‘knowledge’, and ‘transaction’ from independent participants in a collaborative business model to deliver unique value to the farmer and the business enterprises simultaneously. Thus, the heavy dependency on the traditional institutional infrastructure was reduced. IT can make a difference with regard to heterogeneity. He said that the Internet provided low-cost oneto-one interactive notwithstanding the fragmentation and geographical dispersion. At the end of the day what a farmer wants to achieve is higher income through increased yields, improved quality and reduced transaction costs, which is exactly what e-Choupals provided. These e-Choupals provided the power of scale to the small farmers, customised knowledge despite heterogeneity and real-time information despite distances. ITC's e-Choupal leverages IT to improve farmers’ decision making ability to align farm output with market demands, and to improve productivity and brings in best of breed partnerships. The company targeted the bottom rung of the farmers first as the company's vision was to cover the largest segment of rural India thus spanning 100,000 villages across 15 states by building capability to deliver superior shareholder value sustainably. ITC's only mandate was that of “Improving quality of life in rural India.”
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Case study: Hyundai Utsav
Hyundai Motor India Ltd, the country’s largest passenger car exporter and the second largest car manufacturer, after securing its foothold in the urban and semi-urban markets, embarked upon an ambitious penetration drive to tap the consumers residing in the hinterlands of India. With this aim, the automotive major launched a special marketing initiative ‘Hyundai Utsav’ to boost its sales in rural areas and tier-III cities across the state of Andhra Pradesh and Punjab initially. Beginning 18th April, the ‘Hyundai Utsav’ initiative kicked off in over 50 venues in Andhra Pradesh and Punjab markets. Under the scheme, Hyundai reached out to the prosperous farmers, money lenders, business community, private companies, government employees, doctors and lawyers across all non dealership towns to create awareness about the Hyundai brand. The local wholesale marketplace or the ‘Mandi’ which witnesses a large daily congregation of people was the venue in many places. Speaking on the occasion, Arvind Saxena, Sr. Vice-President (Sales & Marketing), HMIL says, “Rising rural incomes, healthy agriculture growth, boost in demand, tremendous growth in rural infrastructure and growing consumerism have opened up new avenues for automobile manufacturers. We feel that 50 percent of the 220 million rural households are potential car buyers and to tap this vast unexplored market we have launched the ‘Hyundai Utsav’ campaign. In order to facilitate rural financing, we have also tied-up with various PSBs offering a deeper network in rural villages. Hyundai has a strong brand value in these markets and we are confident that a vast chunk of prospective car buyers would prefer our products.” Under the ‘Hyundai Utsav’ scheme, well-trained activation team was stationed across all the locations to supervise the entire activity, attend to the visitors, offer test drives, educate consumer about loans and schemes and also collate consumer data over a period of close to 42 days.
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Conclusions
Here we see that a big company like Hyundai forays into the Indian Rural market with its festival called as Hyundai Utsav with a view to penetrate the rural markets. The AIDA model demonstrated below acts as the guideline to creating a brand strategy (for this case) in the rural market.
Awareness
Interest
Desire
Action
Figure 1: The AIDA Model
Creating Awareness The company was aware that the hinterlands of India considered only 2 brands viz Tata Motors and Maruti Suzuki that can be bought by them. Hence there was a need to create awareness about the brand Hyundai and its products. The company reached all the influential people whom it had segmented to buy the brand. The company did so through a special initiative called Hyundai Utsav. The venue selected also holds a strategic importance because of the kind and amount of crowd that attends the venue. Hence it affects the visibility of the brand which is crucial to spread awareness about the brand. Creating Interest It was being difficult for the rural market to buy the Hyundai product as problems with rural financing cropped up. Hence even if consumers are aware about the brand their awareness did not translate on to the next level. Hence to facilitate rural financing Hyundai tied up with various PSBs that offered a deeper network in the rural markets. Hence easing away the financing difficulties and making the decision making process easier for the consumers. Creating Desire After taking the consumers to the second level of the AIDA Model, the next stage that strengthens the decision of the consumer, to buy the product is the DESIRE. Hence this desire amongst the consumers was created by giving test drives to the consumers. These test drives gave the consumers the feel of the product and an experience that was foreign to them till now. Hence it created a desire among the consumers to try and buy the brand. Action Action of the consumer depended upon his or her reaction to the above processes.
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Case Study: Vim GHAR GHAR Challenge
HUL, the MNC Company into FMCG products was one of the first to realize the importance of huge rural markets in India. Consider thee market out of 5 lakh villages in India only 1 lakh have been tapped so far. Teaching people how to wash utensils In June 2002, the employees of HUL, a subsidiary of FMCG major, Unilever and India’s leading FMCG Company literally took to streets. The company was undertaking a promotional exercise in rural areas of 3 states viz. MP, Bihar, Orissa for its utensil cleaning bar ‘VIM’. A part of HUL’s ongoing television campaign “VIM GHAR GHAR CHALLENGE”, the promotional drive involved company officials to visit rural towns and demonstrate how vessels are cleaned with VIM. Commenting on this, Sanjay Bhel, HLL’s marketing manager, said, “For the purpose, we are educating the rural masses on the ongoing “Vim Ghar Ghar Challenge”, TV commercial by conducting live demonstrations about vessel cleaning. Our aim is to tap the growth rate of the 4 billion scouring bar market; although it has been growing at a rate of 15% per annum, since last year it has been decelerating”. This exercise was just one of the numerous marketing drives undertaken by HUL over the decades to increase its penetration in the Indian Rural markets. The company had, in fact earned the distinction of becoming one of the few Indian companies that had tapped the country’s vast rural population so extensively. It was therefore not mere coincidence that around 50% of its turnover came from rural markets. With the penetration of their products reaching saturation levels in many urban markets, FMCG companies had to turn towards rural areas in order to sustain revenue, growth and profitability. Since the disposable income in the hands of rural people had been increasing in the late 1990s and the early 21st century, it made sense for companies to focus their energies on this segment. Industry observes also felt that HUL was at an advantage compared to most of its competitors, thanks to its consistent, pioneering efforts towards establishing well entrenched distribution and marketing networks to reach the vast Indian rural masses.
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Conclusions
70% of the Indian Rural population was found to be using unbranded scouring bars and liquids to wash utensils. Here lied the opportunity for HLL to tap the Indian rural market and improve or raise its bottom lines and expand the marketing base for ‘Vim’ bar. HLL hence, followed a strategy of a development program wherein they taught the rural population ways to wash utensils properly. Hence they tried to gel in with the rural consumers which entrenched them deep into the minds of the consumers. HLL also tried to uplift the whole rural market from using unbranded bars and other things that caused physical harm to who ever washes the utensils to using branded bars which were soft on the skin and also helped cleansing of utensils better. The company thus created a pull strategy for itself.
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Case study: IMC in rural areas
Campaign for Coca-Cola
Facts about rural India – Coca-Cola launch 1. Television: Television advertisements specifically targeted at rural consumers. Televisions Cover 26% of Total rural households of 145 Million. 2. Low Consumption: Product consumption remains low in rural India despite the fact that the area is home to half of the country’s total disposable income. 3. Pricing is Important: Effectively pitching a global brand to a rural household requires more than just a catchy phrase or a Bollywood face. You need to price and position your product correctly. The 2002 “Thanda matlab Coca Cola” television campaign India is still not a fully literate country, so television opens a new horizon in front of the advertising fraternity. In India, when somebody wants a cold drink they say, “Can I get a ‘thanda?’ – ‘thanda’ means cold drink. What we said is when anybody says ‘thanda’ it should mean only Coke. People really loved that [Thanda] campaign for various reasons. There was a very fresh take on India. The hero was not from a metropolitan area, coming from college or speaking a “yo” [Americanized slang] language. He was a normal guy, he could be a farmer, he could be a bank clerk or he could be a tourist guide, so he was a common man and people really warmed up to that because the country was becoming more confident. In rural India, they really liked the campaign. It was slice of life; it was out of their life. A drink that they felt was very alien, a taste that they feared or thought would be far removed from them they found coming closer to them. They found people like themselves being projected in advertising, so they warmed up to it. It changed the whole approach of Coca-Cola in this country. This Coke campaign “Thanda matlab Coca-Cola” became almost like a cult campaign and all the dialogues became part of the common parlance. People started using it in everyday life. The idea was to tell a story in a very different and unique way. Not a linear storyline but a much layered way of telling a story where every moment is significant and important and hence you are communicating something in a very unique way that wasn’t done before. With growing prosperity in rural India, multinationals are looking to the Coca-Cola template to crack the rural market. If marketers want to crack small town India, they have to speak their language — meaning understand their lifestyle. In a country that has so much poverty and hunger – how can one glorify some product like chewing gum or chocolates? One can only make the advertisements non-serious. If they are made serious, people would not buy it. If it is non-serious “oh it’s a chewing gum, it’s an impulse purchase,” then they just like the body language, tone and manner. In India there is a huge sort of resistance towards consumption, not in rural India only; it’s in every part of this country. In India, people feel indulgence is bad. So if a company wants to sell indulgence it has to sell it in the garb of convenience, in the garb of improvement of the consumer’s life. 17
Second, rural India is a very price sensitive market, very price conscious. A company has to price the product correctly and position it correctly so that it improves the consumer’s lives. The consumer in India wants to feel discerning. So a company has to make the consumer feel very comfortable with the price they are paying. Thirdly, Trust is important. If customers can trust the brand then any product can be launched and consumers will accept it.
Campaign for Marico hair oil
Marico Industries Client Product Brand Marico Perfumed Hair Oil Hair & Care
Task for the Agency Create awareness for Parachute Coconut Oil Pouch in towns with less than 20000 population in Tamil Nadu Convert loose oil buyers into Parachute pouch customers, by highlighting the advantages of the Parachute brand Convince them to pay a small premium for the brand.
Communication Strategy The Van Campaign aimed exclusively for women and for the first time conducted by women Get the women folk out of their homes and participate in a van campaign which usually is dominated by men and children Make them stay through the van programme and ensure their active involvement
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Result According to Marico, substantial increase in sales reported from the campaign areas A study by Marico showed a 25% conversion from loose coconut oil usage to Parachute Pouch Pack, Post Van Campaign The success of the campaign motivated Marico to repeat the campaign the following year even in towns with 1 lakh + population, with excellent results
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CASE STUDY: RETAIL
GODREJ AADHAR- “Khusiyon Ka, Khushhali Ka”
Indomitable force was born in 1897, a young man called Ardeshir Godrej gave up law & turned to lockmaking. He produced the finest security equipment, & then stunned the world by creating a soap from vegetable oils. Godrej Agrovet Ltd. (JV with Future Group has 80% stake), is into diversified agri-businesses, such as animal feed, integrated poultry business, agrochemical, oil palm plantation, & processing- and rural retailing through Godrej Aadhar. Godrej Agrovet offers complete agricultural solutions & a wide range of commodities , including food, grocery, apparel, footwear, home appliances, furniture, kitchenware, hardware to valueadded services including banking, postal services pharmacy to ease the burden of the entire community. Presently, there are 62 outlets acroos the country. Each store is spread over 30006500 sq.ft. & each outlet services around 20 villages in its radius. Positioned as `Godrej Aadhaar - Khushiyon Ka, Khushhali Ka', the new format stores mark the beginning of a chain which shall form the farmer's Aadhaar for `Unnati, Ghar Sansar & Gaon', a move from being just a complete agricultural solution provider to being a multi category retail outlet with wide range of products and services housing a fair mix of brands and private labels. The company is in the process of talking among others to Apollo Hospitals to set up pharmacy/polyclinics at the large format stores. Bajaj Alliance Life Insurance too has tied up with Godrej Aadhar to offer a life insurance plan for rural masses with a one time premium of Rs. 75 to be covered for a minimum of five years. The new format Aadhaars will provide a very conducive retail atmosphere and women-friendly interface, company officials said. Godrej Aadhaar, with an objective to improve productivity, higher returns and improved cost benefit ratio, at present offers crop advisory services, soil and water testing services; buy back of output, crop finance, supply of agri-inputs and animal feeds, transfer of information (weather, price, and demand supply), door delivery of products among other things.
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CASE STUDIES- PHARMACEUTICALS
Case Study: Glaxo SmithKline
1. GSK India undertakes a number of Rural Development initiatives through GRAMIN AAROGYA VIKAS SANSTHA (GAVS), a Rural Health Development Organization. GAVS is a registered public trust promoted by the heritage company Glaxo India in April 1997. 2. India is a country with more than one billion people where an estimated 350 million people live in absolute poverty. Tribal people constitute roughly 8% of India’s population. Tribals are socioeconomically disadvantaged and marginalized groups. Most tribes are concentrated in heavily forested areas that combine inaccessibility with limited political or economic significance. 3. Tribals have been accorded special status in the constitution and there are several schemes designed for their upliftment. However, a number of these schemes are poorly implemented and there has not been much improvement in their status. Even today, the tribal population lags substantially behind in terms of education and health. 4. GAVS works in 15 predominantly Tribal villages in Peth Taluka, Nashik District. As a part of its Rural Tribal Development mission, GSK collected primary data from 92 villages around Nashik in the year 2005, to identify the most underserved village communities which need support. 5. Peth is the smallest Tehsil / Block in the district; it occupies 3.63% of the district. The tribal population in Nashik falls amongst the 10% of the total Tribal population (7.4 million) in the state of Maharashtra. These groups remain isolated, living in remote forest and hilly areas. A majority of them have poor health status and are ignorant about health issues. Inaccessibility, low literacy level, absence of any NGO and paucity of basic healthcare facilities characterize these villages. That is why we selected this cluster of villages for providing support. 6. The Trusts’ Mobile Clinic covers a distance of 160 kms each day and visits a cluster of five villages in rotation, covering all 15 villages. A qualified medical practitioner along with two healthcare workers visits the villages five days a week. Social workers and 30 Healthcare Workers from the local villages render help in this activity. Over 20000 Tribal people are benefited by this healthcare initiative. 7. The villagers often suffer from skin problems, TB, Asthma, water-borne diseases and Respiratory Tract Infections. Ignorance, poverty and difficult terrain make it near impossible for these inhabitants to avail of timely medical services. This results in aggravation of the diseases to extreme conditions, often leading to fatalities.
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Case Study: LUPIN
Companies like Lupin are working with this in mind. The marketing strategy in the rural areas is to provide patients with quality medicines at competitive prices. We follow a four point strategy of product, people, price and promotion. 1. The company aims at reaching out to uncovered medical practitioners in these markets. The four 'P' strategy of the company works to supply the right set of medicines (product) by recruiting, training and developing local persons (people) as 'Medi-Pracharaks', who are best equipped to service the needs of local community and doctors. The company also ensures that quality drugs are made available at an affordable price. As part of its promotional program, the company organises various knowledge campaigns like 'Arogya Jagriti Mela', 'Swastha Mela'. 2. For instance, Lupin has a strong brand franchise in anti-infective, pain management, and gastrointestinal and these segments accounts for 40 percent of domestic formulations sales. The company has a dedicated rural field force of more than 300 people and is rapidly expanding it. Presently, they are operating in ten states including Andhra Pradesh, Tamil Nadu, Madhya Pradesh, Chattisgarh, Bihar, Uttar Pradesh, Punjab, Haryana and Rajasthan and catering to 35,000 rural medical practitioners. The company is also planning to expand its operations to the remaining states in its next phase of expansion, said Chakraborty. 3. With its rural marketing initiative, through its Lupinova division, the Company is increasingly catering to the unmet needs of rural populace that constitute around 70% of the Indian population. Looking at the challenges posed by these markets in terms of reach, the Company introduced a self sustained model that has helped it in successfully taking its products to 10 states thus benefiting the rural patients in these states 4. Key Products: Lupinova Product X-Ceff Supraxone L-Flox Novazyme Ferinova Therapeutic Segment Cefotaxime Injectible Ceftriaxone Injectible Lovefloxacin Tab Digestive Enzyme FerricAmmonium Citrate
5. The Lupin Human Welfare and Research Foundation (LHWRF), which is committed to rural reconstruction, reaches out to over 1919 villages in eleven districts of four states covering nearly 1.45 million people in India. 22
6. On 2 October 1988, Mahatma Gandhi`s birthday, Lupin Chairman Dr Desh Bandhu Gupta founded the Lupin Human Welfare and Research Foundation [LHWRF]. It’s brief to provide an alternative, sustainable and replicable model of rural development. 7. A program that began modestly with 35 villages has succeeded in revitalizing more than 1919 villages in 11 districts in Rajasthan, Madhya Pradesh, Maharashtra and Uttar Pradesh to become one of the largest NGOs in India. For every rupee spent by Lupin, LHWRF`s efforts have attracted more than Rs.9 of contribution from other agencies and individuals. India`s central and state governments, the UN, and other international voluntary agencies have appreciated the LHWRF`s grassroots work.
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Case Study: MANKIND
Mankind pharmaceutical company started in 1995 by Mr. Ramesh C. Juneja who was working as a Medical Representative with Lupin Pharmaceuticals in meerut in UP. In 1984, he started BestoChem Formulations with his two brothers, Rajeev and Girish. A few years later, Ramesh and Rajeev left BestoChem with Girish, and in 1995, set up Mankind, a meager capital of 50 lacks and 20 employees. It focused more on rural and semi rural markets as compared to urban market. It started from 2 states in 1995 and employed 53 sales representatives by the end of 1995. Now they have branched to every corner of the country. They are present in every town having a population of more than 1000. Major differentiators in the company strategy were; Aggressive pricing strategy – Ramesh C. Juneja(M.D) said that pharma companies do not pass the decrease in bulk drug prices to patients, but mankind does e.g. Mankind sells antibiotics. 1. Moxikind CV (30 ml) at half rate for Rs 47.95 that GlaxoSmithKline (GSK) sells Augmentin, its best-selling antibiotic. 2. Extensive sales force and distribution network – Mankind has one of the largest sales force comprising of 5000 in 2009(compared to 2500 in Ranbaxy) sales representatives to ensure that drug is always available. They motivate their sales employees by providing a high variable pay. Mankind has made strategic changes in the company’s structure and function. Initially they used to cater to vitamins, painkillers and antibiotic that was soured from other Indian firms and branded as Mankind. Now it has expanded into three divisions namely Mankind, Discovery Mankind and Life Star. Mankind division has a mixed bag of cardio and diabetic medicines. Discovery mankind focuses on pain relief and antibacterial and it has brands like Zenotin, Sparkind, Nobel Gel, Nuforce-3 Kit, Fynal, and Mahacef. Life star division of mankind is on ophthalmology and the dermal segment. Soon it is preparing to enter into anti-malaria. The company is all set to enter the semi-regulated markets of South East Asia, South Africa, and former CIS countries along with targeting the neighbouring countries like Myanmar, Nepal and Sri Lanka. Mankind was able to achieve a turnover of 300 crores in 2005 over 3.5 crores in 1995. It’s fast pace has placed it amongst the top five fastest growing pharmaceutical companies of India (ORG-IMS, retail audit, 2005). According to research firm ORG-IMS, the Rs 920-crore (FY 2008-09 sales), with a compounded annual growth rate (CAGR) of 35 per cent over the past four years. The market leader Cipla is growing at a modest 15 per cent. Mankind is one of the fastest growing pharmaceutical company and its drugs are the most prescribed drugs in the market as per the data from ORG-IMS.
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Indian Pharma Top 10
Rank 1 2 3 4 5 6 7 8 9 10 Company Cipla Ranbaxy GSK Piramal Zydus Sun Pharma Alkem Lupin Mankind Aristo Retail sales in India* 2020 1837 1618 1533 1362 1333 1185 1028 993 906 Growth (%) 115 8 8 23 14 19 15 13 25 18
*Sales (Rs Crores) from Sep 08 – Aug 09
Indian Top 5
Rank 1 2 3 4 5 *Prescription per doctor per month Company Mankind GSK Cipla Piramal FDC P/D/M* 75 68 65 62 55
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For the current fiscal the company is targeting a sales target of 1250 crores. Mankind is already present in 90% of the total market (in terms of product portfolio), so now the company’s trying to come up with new dosage forms and delivery systems in addition to product launches. The anti infective and Gastro intestinal segments accounts for 47 % of mankind’s revenues. They are growing at 9% and 11% respectively. So as it has major earning coming from mature markets that are not growing at a good rate, mankind would have to look at segments like Cardiac, Diabetes and CNS as they are growing segments.
CONCLUSION
The key dilemma for MNCs eager to tap the large and fast-growing rural market is whether they can do so without hurting the company's profit margins. The company's product portfolio is essentially designed for urban consumers, and the companies are cautioned from plunging headlong into the rural market as capturing rural consumers can be expensive. Any generalization "about rural India could be wrong and one should focus on high GDP growth areas, be it urban, semi-urban or rural."
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