Rural Marketing
Rural Market Environment ? The Rural Consumer ? The Rural Demand ? Other Aspests The Rural Consumer ? Size of Rural Consumer Group ? Rural population is about 73% of the total population of India ? According to 2001 census the total rural population amounts to 74 Crore ? 12 Crore households – 70% of the total ? Location Pattern A Scattered market the comparison below shows the same – ? Urban Population is spread over 3,200 cities ? Rural population is spread across 5,70,000 villages Socio-Economic Position ? Low purchasing power & Per Capita Income ? Bounded by tradition, culture, religion & community ? 60% of rural income is from Agriculture ? More than 50% rural households have monthly income < Rs 25,000 ? About 14% have income > Rs. 50,000 ? In recent years, 70% rural households have started saving/investing their income ? Culturally a Diverse & Heterogeneous Market in terms of Religious, linguistic, social & cultural factors From a study conducted by IMRB (Indian Market Research Bureau) provides development index points for each state on • Health & Education • Transportation • Electricity • TV Transmission • Banks • Post Offices • Water Supply ? Average villages have 33 index points ? Literacy Level ? Rural India has a literacy rate of 28% compared to 55% of the whole country ? Lifestyle
? Conservative & tradition bound ? There has been a change in the same over the years though with ? Increase in Income ? Growth in Education ? Greater Media Penetration ? Marketers efforts to reach and capture the rural market’s ? Buying Behavior Factors that Influence ? The buying behavior has undergone a major change. A huge population in rural areas has seen an increase in their income as a result of which they have the potential to buy expensive/luxury products The Rural Demand ? Some well established products ? Pressure Cooker ? Artificial Jewellery ? Cooking Utensils ? Medicines ? Batteries ? Tobacco Products ? Scooters, Motorcycles ? Soaps,Detergents ? Bicycles ? Electrical Goods (fan,light) ? Radio ? T.V ? Pesticides, Fertilizers ? Tea ? Mobile Phones ? Sewing Machines Recent Trends ? Steady Growth from the past 2 decades ? Welcome change in the composition of Rural Demand ? Several products already well established in the rural market ? In many products the rural market share is greater than the urban market
? In many products rural market has overtaken the urban in growth rate Rural Market becomes attractive to Corporates ? The Rural Market is being seen as a Growing Oppurtunity mainly because of the following – ? Rural Demand is growing rapidly ? Purchasing power has increased ? Rural market is largely unexplored ? There would be opportunities for new entrants as compared to urban population being loyal to specific brands ? The volume and the strength of the rural population Companies already into Rural Market Company HUL Colgate Godrej Cavinkare Marico Cadbury Cipla Tapping the Rural Market ? ? ? ? ? ? Segmentation & Targeting Product Management Physical Distribution Channel Management Sales Force Management Marketing Communications Rural Sales (% of total) 50 50 30 33 25 25 18
Segmentation & Targeting
? ? ? ? ? ? ? ?
Geographic Climate & Level of Irrigation Demographic Segmentation Population Concentration Age Literacy Level Income – Regular & Seasonal Buying Behavior
Product Strategy
? Whether the product from Urban Market can be bought as it is in the rural market or it
? ? ? ? ? ? ? ?
?
? ?
needs changes/customizations Economic Income realities should be considered Lower priced versions do succeed in most cases but not always Specifically designed products Tractor Everyday’s Jeevan Sathi torch Model Variants – Bikes Beverages – Chota Coke Color Variants – Asian Paints Different products/models ,brands ,packing , pricing and positioning Package Design and pack size Logos, symbols and mnemonics
Physical Distribution ? Problems ? Transportation and warehousing ? Cost – Service dilemma becomes more acute, transportation & warehousing costs are high ? The delivery van – ITC and HUL have their own delivery van’s ? High cost can be taken care of, if the sales volumes are high which is most likely if the product is marketed properly
Channel management ? Problems – ? Multiple tiers add to the cost ? Non Availability of dealers ? Poor availability of outlets ? Inadequate banking and credit facilities ? The village shop is the key to rural distribution ? Improving the feasibility of the outlets, deal in number of product lines.
doc_634695968.doc
Rural Market Environment ? The Rural Consumer ? The Rural Demand ? Other Aspests The Rural Consumer ? Size of Rural Consumer Group ? Rural population is about 73% of the total population of India ? According to 2001 census the total rural population amounts to 74 Crore ? 12 Crore households – 70% of the total ? Location Pattern A Scattered market the comparison below shows the same – ? Urban Population is spread over 3,200 cities ? Rural population is spread across 5,70,000 villages Socio-Economic Position ? Low purchasing power & Per Capita Income ? Bounded by tradition, culture, religion & community ? 60% of rural income is from Agriculture ? More than 50% rural households have monthly income < Rs 25,000 ? About 14% have income > Rs. 50,000 ? In recent years, 70% rural households have started saving/investing their income ? Culturally a Diverse & Heterogeneous Market in terms of Religious, linguistic, social & cultural factors From a study conducted by IMRB (Indian Market Research Bureau) provides development index points for each state on • Health & Education • Transportation • Electricity • TV Transmission • Banks • Post Offices • Water Supply ? Average villages have 33 index points ? Literacy Level ? Rural India has a literacy rate of 28% compared to 55% of the whole country ? Lifestyle
? Conservative & tradition bound ? There has been a change in the same over the years though with ? Increase in Income ? Growth in Education ? Greater Media Penetration ? Marketers efforts to reach and capture the rural market’s ? Buying Behavior Factors that Influence ? The buying behavior has undergone a major change. A huge population in rural areas has seen an increase in their income as a result of which they have the potential to buy expensive/luxury products The Rural Demand ? Some well established products ? Pressure Cooker ? Artificial Jewellery ? Cooking Utensils ? Medicines ? Batteries ? Tobacco Products ? Scooters, Motorcycles ? Soaps,Detergents ? Bicycles ? Electrical Goods (fan,light) ? Radio ? T.V ? Pesticides, Fertilizers ? Tea ? Mobile Phones ? Sewing Machines Recent Trends ? Steady Growth from the past 2 decades ? Welcome change in the composition of Rural Demand ? Several products already well established in the rural market ? In many products the rural market share is greater than the urban market
? In many products rural market has overtaken the urban in growth rate Rural Market becomes attractive to Corporates ? The Rural Market is being seen as a Growing Oppurtunity mainly because of the following – ? Rural Demand is growing rapidly ? Purchasing power has increased ? Rural market is largely unexplored ? There would be opportunities for new entrants as compared to urban population being loyal to specific brands ? The volume and the strength of the rural population Companies already into Rural Market Company HUL Colgate Godrej Cavinkare Marico Cadbury Cipla Tapping the Rural Market ? ? ? ? ? ? Segmentation & Targeting Product Management Physical Distribution Channel Management Sales Force Management Marketing Communications Rural Sales (% of total) 50 50 30 33 25 25 18
Segmentation & Targeting
? ? ? ? ? ? ? ?
Geographic Climate & Level of Irrigation Demographic Segmentation Population Concentration Age Literacy Level Income – Regular & Seasonal Buying Behavior
Product Strategy
? Whether the product from Urban Market can be bought as it is in the rural market or it
? ? ? ? ? ? ? ?
?
? ?
needs changes/customizations Economic Income realities should be considered Lower priced versions do succeed in most cases but not always Specifically designed products Tractor Everyday’s Jeevan Sathi torch Model Variants – Bikes Beverages – Chota Coke Color Variants – Asian Paints Different products/models ,brands ,packing , pricing and positioning Package Design and pack size Logos, symbols and mnemonics
Physical Distribution ? Problems ? Transportation and warehousing ? Cost – Service dilemma becomes more acute, transportation & warehousing costs are high ? The delivery van – ITC and HUL have their own delivery van’s ? High cost can be taken care of, if the sales volumes are high which is most likely if the product is marketed properly
Channel management ? Problems – ? Multiple tiers add to the cost ? Non Availability of dealers ? Poor availability of outlets ? Inadequate banking and credit facilities ? The village shop is the key to rural distribution ? Improving the feasibility of the outlets, deal in number of product lines.
doc_634695968.doc