MARKETING STRATEGIES FOR RURAL INDIAN MARKETS

Submitted By:

Sandeep Singh Bhadwal - 10

Twarit Bhargava - 12

Rajinder Dhindsa - 19

Gaurav Gupta - 26

Saurabh Kumar - 41

Alpana Sarangi - 61
Introduction
 Rural Marketing

Assessing, stimulating and

converting the purchasing
power of rural consumer into
an effective demand for
specific products and
services.
 Gaps
Bridge by Govt. & Development. Agencies

1) Low priority to Agriculture.

2) Failure of Land Reforms.

3) Inadequate Food Supplies.

4) Slow growth of Infrastructure.

5) Inadequate Inputs

6) Slowdown of rural Industrialization.

Phases of Rural Marketing

PHASE I (before mid 1960's)

Considered as a synonymous with "Agricultural

Marketing".

Referred to marketing of 118 rural products in

Rural and Urban areas and agricultural inputs in
rural markets.
 PHASE II (mid 1960's-mid 1990's)

Better irrigation facilities, soil testing, use of high yield

variety seeds, fertilizers, pesticides and employment of
machinery like power tillers, harvesters' crushers.

Two separate areas of activity had emerged- the new

"marketing of agricultural inputs " and the
conventional "agricultural marketing".

Formation of agencies like Khadi and Village Industries

Commission, Girijan CooperatIve Societies and Apco
Fabrics
 PHASE III (After mid 1990's)

India's Industrial Sector had gained strength

and maturity.

The market has grown for household

consumables and durables.

Development programs run by Central and

State Governments.
TAXONOMY OF RURAL MARKET
 • Watch
• Consu
CONSUMER MARKET

es,
mable •
s, Bicycl
• es,
• Indivi Food- •
Produ Radio,
duals • T.V,
cts,
• House • Kitche
• Toilet
holds. n
ries,
• Cosm Applia
etics, nces
etc Furnit
ure,
Constituents:

Durables :
Products :
 INDUSTRIAL MARKET
 Constituents :
 Agricultural and allied activities,
 Poultry farming,
 Fishing,
 Animal husbandry,
 Cottage Industries,
 Panchayat office etc.

 Products :
 Consumables,
 seeds,
 Fertilizers,
 Pesticides,
 Petroll diesel etc.

 Durables :
 Tillers,
 Tractors,
 Pump sets,
 Generators,
 Boat etc.
 • Repairs,
• Transport
• ,
Individual
•
SERVICES MARKET

s, Banking
• credit,
Househol
• Insurance
ds,
• ,
Offices
• Education
• Productio
,
n firms.
• Communi
cations
etc
Constituents:

Services :
MARKET DIFFERENCES WITH URBAN
MARKET
 Environment Differences

Small settlement units of villages widely dispersed.

Low Infrastructure level (such as road, electricity etc.)

Low Density of population per square kilometer of space

Poor physical connectivity with other villages and towns,

Low mobility.
Social Relations-Peculiar Aspects

Less number of impersonal interactions, more frequent interactions

between the same people.

Individual better known and with a strong identity of his/her own

Status is ascribed: determined by births in a family, lineage. Strong

class structure.

Social norms influencing individuals are more visible.

DEPENDENCE ON NATURE

Abundance of Natural Resources and high dependence

on them for a large number of households needs.

High dependence for livelihoods, employment and

Income on Natural factors.

Differential access to resources based on Caste,

Political and Money Power etc.
 STRATEGIES
PRODUCT STRATEGIES

Includes product mix changes

Modernization and product design considerations.

Competitive product strategies

Identity strategies

Customer value strategies

Packaging strategies

Branding strategies
 PRICING STRATEGIES

Quality conscious : Discriminatory, perceived value

and psychological pricing.

Value conscious : Psychological, value, penetration

and skimming.

Price conscious : Low prices, Premium pricing

(small units) and barter pricing.
 PROMOTION STRATEGIES

Mass media (Radio, Cinema, Press and TV)

Local media (Haats and Melas, Wall painting,Leaflets,

Video vans, Folk media, Animal parade)

Personalised media includes direct communication,

dealers, sales persons and researches

BY PROMOTING PRODUCTS WITH INDIAN MODELS

AND ACTORS
 DISTRIBUTION STRATEGIES

Distribution Channel Includes:

a) company depot

b) Redistribution stockiest, clearing agents

c) Semi wholesalers and retailers

d) Itinerant traders, Vans, Sales people, NGOs and garment agencies

 Communication Strategies

BY COMMUNICATING AND CHANGING QUAL-

ITY PERCEPTION

BY PROPER COMMUNICATION IN INDIAN

LANGUAGE

BY TARGET CHANGING PERCEPTION

 Other Strategies

BY DEVELOPING RURAL-SPECIFIC PRODUCTS

BY ACQUIRING INDIAN BRANDS

BY GIVING INDIAN WORDS FOR BRANDS

BY ASSOCIATING THEMSELVES WITH INDIAN

CELEBRITIES
What kinds of themes are attractive
to rural consumers?

Need category : Quality of life messages -nutritious, healthy.

Problem category : Convenience, economy I hassle free, easy to

maintain, lifetime companion, a friend in need and the way to
prosperity.

Desire category : Independence, status, luxury etc.

Ideal category : Communal harmony, social cohesiveness,

religious conformity, national integration and peace.
CASE STUDIES
 NIRMA
This washing powder adopted a market penetration strategy based
on price which was 40%.

lower than the highest priced product in the market.

Its distribution efforts were highly concentrated in Western and

Northern zones.

It made the industry leader lose its market share substantially in

those zones.

Nirma is possibly the largest detergent brand in the world with

sales of 700,000 tonnes a year.
 PROMISE TOOTHPASTE

The Company, Balsara, decided to "against position"

the new product and aimed at No.2 position.

The advertisements were framed so as to offer all the

benefits being claimed by No.1 in a positive sense.

The product became a success with growth rate of

30% in a market expanding at the rate of 7%.
 LIFEBUOY SOAP

Success of this soap can be attributed to the right market

focus.

The market segment is clearly identified as the lower income

segment and price sensitive.

Recently HUL introduced a new segment "Fighting sweat",

for relatively higher incomes.

This culminated in "Lifebuoy Plus" a pink coloured

deodorant soap at a price higher than Lifebuoy.
 ASIAN PAINTS

They entered the exterior decorative segment with "ace", focusing on non-metro
markets. "Utsav“ and "Opal PuB followed.

Advertisements in TV and cinema are resorted to before festivals like Pongal in

Tamilnadu and other festivals elsewhere when demand for outdoor decorative
paints.

It is recognized that turnover and volume growth will come from rural markets.

Mobile vans and demonstration cum sales techniques are used to flog "Utsav"
brand.
 RUF AND TUF JEANS

A ready to stitch jeans for the first time users priced at Rs.195/- as against the unorganized
sector's range of Rs.150-3501-

Arvind mills, India's leading denim manufacturer created this new product specifically for
the rural market.

The kit included a denim trouser length with specific tailoring instruction and the
branded zipper, rivets and buttons that distinguish jeans in the consumer's mind.

The product was made available in villages with a population as small as five thousand.

Local cloth shops were used as retail outlets.

Seminars were organized to train tailors in denim fits and inform them about the changes
required in sewing machines for stitching jeans.

The additional machine accessories were initially provided free of cost and later at a
subsidized rate.
 OUTCOME

The strategy worked. In the first two months, demand crossed a million pieces as
against a production capacity of 2,50,000 kits. So, the company had to stop advertising.

Consumer feed back showed that nearly 75% were first time jean wearers.

R& T shorts and ready-made jeans were' launched for the slightly more evolved
customer who demanded jean specifics like the right wash.

This is a perfect example of brilliant product promotion.

PSYCHOGRAPHIC SEGMENTATION

In some parts of Gujarat, it is reported

that farmers are going in for big 50 HP
tractors when their need was for smaller
25 to 30 HP ones. The reason was
compulsion to "Keep up with the
neighbours". Now M&M has come out
with 35 HP and 45 HP tractors name
"Sarpanch" to flatter the ego of such
buyers and retain them.
 PRODUCT LINE PRUNING

HUL is pruning its eighty strong brand

portfolio to the 30 power brands, which
account for 75% of its FMCG turnover.
This is an example of optimization of
resources to achieve more with the
same ad-spend and marketing effort.
 LINE MODERNISATION

HUL relaunched VIM dish wash bar

with a superior formulation. Vim bar,
the first such product fuelled the
growth of dish wash bar segment by
over 200% in five years. It converted
customers from unbranded proxy
products like ash and mud.
 BRAND AWARENESS BUILDING

In 1990, TVS launched TVS 50 XL as a

"value for money" vehicle. This was
supported by massive advertising
campaigns on TV to increase awareness of
the brand. TVS spent around Rs.1.5 crore
on the "Namma ooru Vandi" (Our own
vehicle) which showed people from
various walks of life swearing by TVS 50
XL.
USE OF INTERNET FOR RURAL MARKETING

ITC has launched three web-based initiatives (E-Choupals in company speak) as part
of its strategies to vertically integrate its sourcing operations. Aqua Choupal.com in
Andhra Pradesh, Soyachoupal.com in M.P and Planters net.com in Karnataka.

ITC - .has setup 235 Internet kiosks, which cater to 10,000 farmers and cover
2,50,000 hectares of land.

ITC Info Tech structured the entire virtual interaction model and Meta markets for
inputs like fertilizers, pesticides etc. that the farmers in different states can use.

Its plan was to set up 3000 kiosks to cover 100000 farmers. The idea is to use this
network as a distribution channel for other products
 AMUL

It recognized the fragmented and rural nature of milk production

in India.

It organized a very efficient milk collection network and

supported small dairy farmers with a variety of extension services.

It installed very modem processing and packaging facilities.

Used mass advertising very effectively to build high levels of

brand awareness and preference for its products.
 THE OUTLOOK

This new century brings a host of challenges and

opportunities in the rural market as the younger generation
frees itself from the bonds that tied down the previous one.

India's democracy allows the people to change the

government if the majority of the voters feel strongly about
the lack of basic amenities

Though marketers are alive to the importance of rural markets

it would be very difficult to wean the rural customer away
from regional or local brands unless there is perceived benefit
in price or value.
 Contd…

In FMCG Sector, the next battle for a market share in rural areas would be
between local or regional brands on one side and national brands on the
other. The former would fight like hell using all means fair and foul to retain
their share of market and survive.

In the white goods sector the battle would be between new producers with
latest technology and the older ones. The success of LG and SAMSUNG in
penetrating both urban and rural sectors in a short time is a lesson in market
approach.

Local brands have so far used gut feeling and plain common sense in their
marketing operations, as well as direct contact with the retailers. When they
scale up to regional level, they use low cost media as Cable TV, Radio and
Regional print media. This enables them to reach more customers while
retaining existing ones.
 Contd………

Agricultural inputs such as fertilizers and pesticides may see a price

increase and volumes may fall as more and more farmers turn to
"Precision farming”.

Increased incomes in the rural sector should result in investment in

goods and services enabling a better quality of life, like better
housing schooling and more white goods. But a portion may be
wasted in conspicuous consumption and even wasteful expenditure
as on liquor. Campaigns should be launched in such areas to avoid
such evils.