Module 2

Rural Marketing Mix - Brand & Channel

Management

Dr. Mohamad Imrozuddin

Associate Professor
Presidency University
Bangalore
 Rural Marketing Mix
The 4 As of marketing—
1. Affordability
2. Availability
3. Awareness
4. Acceptability
1. Affordability
It is important to realize that creating an affordable product or
service is not the same as creating a low-cost–low-quality version
of an urban product or service.
It is vital to design a product or service that caters to the needs of
the rural consumers in their unique environment and provides
value as perceived by them.
Rural consumers are driven by the value proposition, and not just
by cost.
Thus, branded personal care items have been successful in rural
areas through ‘sachet packaging’ by increasing affordability.
Companies like Max Vijay now offer life insurance through ‘sachet
purchasing’, small frequent payments made to local retailers.

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2. Availability
Availability remains the single largest challenge for marketers
There are 6,49,481 villages in India
Companies have adopted innovative distribution strategies—
HUL’s Shakti model and Colgate’s bicycle entrepreneurs—to
overcome this problem
Field observations have shown that when products or services
reach small towns, there may be no need to develop a distribution
strategy to go further. Retailers themselves will transport the
goods to the village level. Also, especially in the case of larger
ticket items, rural consumers visit nearby towns to purchase
items such as mobile phones, two wheelers, and branded clothing,
to avail of the greater choice or access services such as banking
and computer classes available there
Thus, the question is, which small towns to target?

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Salesman Raj Verma pushes his bicycle ladened with Colgate products in
the village of Hargaon, Uttar Pradesh August 26, 2011. REUTERS/Pawan
Kumar

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3. Awareness
Low levels of literacy remain a stumbling block for any
communications message for rural consumers. However, literacy
rates are rising, indicating that comprehension levels will rise,
too. Access to mass media, especially television, is very high in
rural India, with half of all television sets being sold in rural India.
This means that rural consumers are exposed to the same
advertising designed for urban markets, increasing the demand
for typically urban products and services such as fairness creams,
etc. However, alternative rural means of communication such as
wall paintings, vans, road shows, and nautankis in the local
language also play an important role in creating interest amongst
rural consumers

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4. Acceptability
Chinese models of mobile phones have been an instant hit in rural
markets without any advertising or promotion as they are
• low cost
• durable
• easy to use
have a built-in torch, and loudspeakers for playing music.

So the mobile phone transforms into a personal portable

entertainment system operable in ‘no electricity’ conditions

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Segmentation of Rural Markets

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Marketers are progressing from the traditional descriptive
geographic and demographic traits, largely used for segmenting
nascent markets, to more evolved segmentation methods such
as behaviour, psychographics and multiple attributes, which
provide deeper insights and directly relate to consumers’
purchases
Marketers venturing into rural markets may prosper through
creatively serving specific market segments whose needs are
imperfectly satisfied by the mass-market offerings
For example, 50 per cent of rural people are engaged in
agriculture, but they cannot be clubbed under one category of
farmers. There are large farmers, medium farmers, small farmers,
marginal farmers, and then agricultural labourers.
Therefore, rural customers could be segmented on the basis of
self-employed farmers, daily wage labour, salaried employees,
traders, micro-entrepreneurs, etc

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 Heterogenity in Rural Markets
Socio-cultural differences across regions (caste-based hamlets)
Variation in population size and population density of villages
Difference in the levels of infrastructural development (developed versus
developing states)
Media exposure levels (media dark, media grey, and media green regions)
Variation in literacy levels (Bihar versus Kerala)
Differences in income levels and patterns of income flow (farmers versus daily
wage earners)
Family structure (large joint families, individualized joint families, and nuclear
families)

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 The ‘Jeevan Sadhan’ service
Colgate Hindustan Unilever — of Nokia, launched in 2009, Dabur’s Anmol
introduced Hamam and Lifebuoy specifically targets rural hair oil, a
Cibaca introduced four variants Indian consumers. It is an mustard–amla
of its brand Lifebuoy— ambitious programme that based oil launched
Active Red, Active bundles the handset along for northern
Orange, Plus, and Gold— with services like providing Indian markets at
to reach four different agricultural tips, market INR 10 for a 50-ml
segments of the Indian prices, weather forecasts, pack, targeted at
market. career information, and rural consumers
entertainment services like using loose
ringtones, news, astrology, mustard oil.
and more.

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 Bases for Segmenting Rural Consumer Markets
1.Geographic Segmentation
Regions
■ North: UP, Rajasthan, J&K, Himachal Pradesh, Punjab, Haryana,
Delhi
■ South: Tamil Nadu, Andhra, Kerala, Karnataka
■ East: Bihar, West Bengal, Orissa, Assam, and Northeast states
■ West: Maharashtra, MP, Gujarat

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New Product Development in Rural Market
Once a company has carefully segmented the market, chosen its
target customer groups, identified their needs, and determined its
desired market positioning, it is ready to develop and launch the
appropriate new product.
That is why companies like LG, Godrej, Philips, Tata, Mahindra &
Mahindra, and GE are trying hard to innovate and develop
products suitable to meet the requirements of rural conditions
Recently introduced in rural markets are the Pureit water purifier
by Hindustan Unilever, Chotukool refrigerator by Godrej, Tata
Swach water purifier and the Tata Nano car by Tata. GE is also
developing low-cost ultrasound and ECG machines for India’s
base-of-pyramid market.

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 New product development process involves four stages
• Idea generation
Dupont and Godrej-unique approach of rural immersion for new
product idea generation through an exploration of and immersing
within rural markets
• Concept testing
Concept testing in rural markets needs to be done in different
regions, as needs change from area to area depending upon the
characteristics of a particular region.
The concept of a low-cost, dry toilet promoted by UNICEF
(requiring little water) was appreciated in the water-scarce region
of Rajasthan, but opposed in other regions where water
availability is not a problem

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• Product development – Renault Chief Executive Carlos Ghosn-Frugal
Engineering (low cost engineering) or Reverse Innovation
A cell phone that makes phone calls and does little else (Nokia 1100);
a portable refrigerator the size of a small cooler (Godrej ChotuKool)
a car that sells for about INR 100,000 (Tata Nano)-The Nano uses not only just
one wiper, but also just one side-view mirror, and the seats are not adjustable
• Market testing

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Rural Product Life Cycle
Lifecycle of a product in rural markets is often longer than it is in
urban market due to the multiple challenges involved in the
distribution, communication, and adoption of the product
Many products launched in rural markets without serious planning
die out rather quickly—either soon after introduction or during
the growth stage
The length of each stage in the product lifecycle (PLC) depends on
• Consumer acceptance
• Innovativeness
• Price proposition
• Nature of the product

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Rural markets can be categorized into three stages—
• Developed
• Developing
• Under-developed
On the basis of this classification, it is evident how the same
product could have reached maturity in a developed market while
remaining in the introductory stage in an under-developed
market.
For example, Haryana is a more matured market for tractors than
Bihar
Most companies that have introduced products in rural markets
are struggling to increase their penetration into this market

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This is forcing companies to re-engineer their products or introduce
low-price packs (sachets, 200-ml chota Pepsi, pricing white goods below the
psychological barrier of INR 10,000).
They are also trying to change consumption patterns through consumer
education (increasing the frequency of soap usage from weekly to daily) and
through the adoption of alternative channels to reach deeper (HUL’s Project
Shakti, haats, mobile vans, youth volunteers) and grow the market.
Pioneers in rural markets such as HUL, Eveready, and ITC, having achieved a
high penetration with products at the maturity stage, are either extending their
brands (Lifebuoy Regular to Lifebuoy Gold and Active; Eveready White to Red)
or entering new segments (Dabur Hajmola initially targeted children, and was
later promoted among adults). Companies like ITC are also creating new market
systems (e-Choupal) to bypass the age-old mandi system and purchase agri-
commodities directly from farmers. The decline of products in rural markets is
slow; it is hastened sometimes because of technological advancement (from VCR
to VCD/DVD players; from analogue cameras to digital cameras)

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Product branding in rural areas
It is only in the recent past that consumers have graduated from unbranded to
branded products due to increased awareness and affordability of brands
A quick study of the popular brands in rural markets reveals an unusual trend
—rural consumers’ brand association is mainly with
Colours
Numbers
Visuals and not necessarily with the name of the brand.
For example:
■ Colours—Lal Dant Manjan, Lal sabun (Lifebuoy), Red battery (Eveready),
Brooke Bond Red Label tea
■ Numbers—Godrej No.1 soap, 555 detergent bar, 502 Pataka chai, Brooke
Bond A1 karak chai
■ Visuals—Ghari detergent, Rath vanaspati, Wagh Bakri tea, 3 Roses Tea,
Katchua Chaap mosquito coil and Cycle Agarbatti

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In a rural set-up, the retailer plays a significant role in brand
promotion.
Retailers in rural markets have a strong bond with consumers.
This, coupled with the consumers’ low brand awareness, enables
retailers to push any brand of their choice.
Frequently, the customer will ask the retailer, ‘Paanch rupaye
waali chai dena’. In other words, the customer trusts the retailer,
and is okay with purchasing any brand of tea as long as it is priced
at INR 5. Now it is up to the retailer to push the brand that he
chooses. Thus, retailers are highly influential in rural markets.
The first-mover brands in rural markets have become generic
brands.
Surf,
Vegetable oil with Dalda
mosquito coil with Katchua Chaap
Clinic Plus and Lifebuoy-most successful brands despite being
priced higher than the competition.
Converting consumers from a Generic brand to a better brand in
the same product category becomes a rather difficult proposition
Building Brands in Rural Markets
Building a brand in rural markets involves three important
decisions—
• Developing a brand name-A brand name in the rural context
facilitates easy brand recall, and helps in drawing any colour,
visual or numeric association
• Creating a Brand Identity-Tata Steel branded its galvanized
corrugated sheets Tata Shaktee to create a brand identity that
conveys the qualities of strength, durability, and toughness;
Shree Ultra created a brand identity for its cement that said
‘jung rodhak’ or rust retardant;
• Britannia Tiger biscuits created an identity of a smart, active,
and sharp child.
 Building a Brand Image
The brand should emote, empathize, and talk to its consumers to
establish a brand connect with rural audiences and contribute a
great deal to brand equity and competitive advantage.
Mahindra & Mahindra has maintained its sterling image in rural
India.
Mahindra & Mahindra’s “The Bhoomiputra (son of soil) series of
tractors, with their rugged features and sarpanch (village head)
series, have helped to improve sales.
The sarpanch brand helped to draw a close brand recognition
between the product and the head of the village. In this way, it
provided an opportunity to the consumer to relate himself with
the sarpanch, who commands high status and respect in the
village.
 Brand Loyalty Vs. Brand Stickiness
Low levels of literacy and awareness make rural people less likely
to switch brands, as they do not have the required knowledge or
information to exercise a choice.
They feel more comfortable purchasing tried-and-tested brands.
They are therefore ‘brand sticky’ rather than ‘brand loyal.
To establish a brand, the company needs to
• Educate rural consumers
• Develop their interest through interactive communication
• Encourage their desire to own/use new products
• Deepen their confidence in the brand through live
demonstrations
LIC introduced a village adoption scheme.
Once the number of people in the village taking an LIC policy exceeded a
certain percentage, LIC declared the place ‘LIC Jeevan Bima Gram’, and
contributed INR 75,000 for the development of infrastructure facilities.
Early mover Advantage
Low levels of literacy and awareness limit the rural consumer’s ability to
understand technical benefits
Progressive farmer whom they regard as knowledgeable and well-informed
They feel more comfortable purchasing a tried-and-tested brand
Loyalty is low in low-involvement products such as toilet soaps and
toothpaste,
Loyalty is high in the case of Chyawanprash, skin creams, hair oil, and shaving
creams
Brand loyalty is mostly lower in product categories where there are more
product choices
Fake Brands
• Bond’s (for Pond’s) talc
• Fair & Lonely (for Fair & Lovely)
• Likeboy (for Lifebuoy)
• Clinic shampoo with Clamic
• Tiger biscuits with Fighter.
• Loss of business worth millions
The entire range of products available in the spurious market can
be divided into three distinct categories—
• Look-alikes-Shagun for Lifebuoy (150 g) and Lalita Amla for
Dabur Amla
• Spell-alikes-Paracute for Parachute, Fare & Lovely for Fair &
Lovely, Pomes for Pond’s
• Duplicates-
Comparison of Different Categories
of Fakes
Strategies to Counter Fakes
Upgraded packing
Dabur replaced its plastic blow moulded container of Chyawanprash with a
premium four-colour shrink sleeve packaging, which had a grainy texture and
water bubbles.
This packaging was difficult to replicate, and resulted in a sales growth of 12
per cent of the original product.
Checking counterfeits to their sales force
Coca-Cola put in place 48 consumer response coordinators, who worked with
their teams to redress consumer complaints about overcharging and spurious
bottling. In addition, they had a large network of route salesmen, who had a
one-to-one relationship with the retailers on their beat and hence were able to
keep their ears to the ground.
However, the only sustainable strategy in the long run is to ensure deeper
penetration, and continuous and regular availability of products through
coverage of the markets and by forging strong relationships with local retailers.
Rural marketers should also create awareness through local promotion and
should highlight the harm that spurious produ
Indian Rural Retail
Marketers also need to motivate retailers to stock their product or
brand
The rural retail market is currently estimated at US$ 112 billion
according to a study paper, 'The Rise of Rural India‘
A/c to MART, a New Delhi-based research organisation that offers
rural solutions to the corporate world, Rural India buys
• 46 per cent of all soft drinks
• 49 per cent of motorcycles
• 59 per cent of cigarettes and almost
• 11 per cent of the rural women use lipstick
Big retailers are focusing on the rural market:-
• ‘Aadhar’, the Future Group and Godrej Agrovet's joint venture
(JV)
• Rajkot - Champion Agro Ltd is planning to open 400 agri-retail
outlets across Gujarat.
• ACIL Cotton Industries, a company based in Vadodara, has
launched 40 ACIL Krishi Stores across Gujarat.
Eggfirst Chalo Rural India Conclave 2023 Is A Huge Success