PPT_Arijit_14PGP007.pptx

8/10/2019 PPT_Arijit_14PGP007.pptx

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Chapter 11

Rural Consumer India


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Ready to be shaped but why so few takers?

Most of the businessman

has incorrect perception

about rural market which

reduces interest

Vastly under deserved

33% of India's savings

56% of India's income

Here income is growing significantly

Pre capita growth rate is same as urban.

But population is 3 times more than urban


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Ready to be shaped but why so few takers?

Rural market is vastly underserved

Businessman often looses interest because of lack

of infrastructure

But with innovation, they can have sustainable

business in rural area


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Rasoi Ghar Community Kitchen

Innovation in Rural Business


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Microfinance of Bandhan

Innovation in Rural Business


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The changing structure of rural economy : Beyond

agriculture

Only one fourth of the rural GDP

is now coming from agriculture


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Per capita income has also grown at the same rate like

urban between 1993-94 to 2000-2001

Demand for goods, education, service has also

increased in rural area

Top quartile of rural India has higher expenditure than

the average

There is a considerable pent up demand for goods and

services like education, communication and medical

treatment


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Comparison of size and purchasing power of rural vs

urban consumer India

Per capita income is half than that of urban

But population is 3 times more the urban

India

But population is 3 times more the urban

India


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Example of some rural marketing strategies


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Introduced Rs 10, Rs 5 recharge facility


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Introduced Rs 5 bottle


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Surf and Shampoo brands also are selling

their products in sachet


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Craft food is selling Oreo in Rs. 5


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Kellogsis selling mini pack in Indian market


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Spending pattern of Rural India

Rural India wants life improving products and services


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Bajaj Boxer is specially for rural market


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Nokia low cost mobiles were introduced for penetrating

in the rural market.


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Segmentation scheme for rural India

Affluence segments, Demand segment

Scattered oasis of affluence

Developing and developed states


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LG has a very high rural distribution network and generated 35

percent of the companys India revenues from rural sales


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Hero has a very high rural distribution network and generates

over 40 percent of sales from rural areas.


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HUL has faster growth in rural market than urban market

Revenue from rural market is more than 40% of total revenue


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Recession free Rural market

Not effected by any direct shock transmitted by global economy

This market was not even effected in 2008 recession


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Understanding the Bottom of the PyramidConsumer India

Chapter 12


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While companies are witnessing competitive clutter, there is an invisiblemarketwhich is yet largely untapped.

This market, precisely known as the bottom of pyramid (BoP) market,

comprises the population living below the poverty line as well as the lower

income segment in the country.

About 33% of the Indiaspopulation forms the base of pyramid i.e. around

400 mn people earn below $1.1 (Rs. 66) per day.

Overview of Bottom of Pyramid


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Why bother about the Bottom of the

Pyramid consumer India?

Larger Value

A dollar per day is a reasonable

income in India

Sensible investment for the future

Guaranteed income growth

Favorable change in social attitude


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Leveraging Opportunities among BoP Consumers


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Healthcare >> Pharma

Arogya Parivaris Novartisinitiative,wherein it markets a portfolio of

drugs for common ailments.

Women and childrens nutrition issold in smaller packs, in line with

rural affordability.

Novartis also organizes camps to

increase healthcare awareness.


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Pfizer runs project Sanjeevani so

that it can reach out to Tier II and

below areas.

The project is mainly for its mature

portfolio, thereby extending the

product life cycle of these well

known brands.


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Set up mobile clinics all over Goa

to diagnose people with diabetes.


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Has a tie up with Self Employed

Womens Association (SEWA) in

Ahmedabad to educate,

diagnose and treat people for

tuberculosis.


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Knee implant

Reusable stapler for use in

surgeries

Both are available at price points

affordable in the domestic

market


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Approach -'In India, for India;

launch of low-cost products

ECG machine

Ultrasound machine


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Screening device iCCnet for cardio-vascular disease -suitable for use in

rural settings


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FMCG

Nestle introduced smaller packs of their

productsMaggi Noodles and Ketchups.

This is helping them to increase the

penetration of their products.

They have innovated and created a taste

enhancer with added iron and vitamins,

specifically for the BoP audience.

This allows them to not only improve the

taste of everyday dishes, but also

enhance the nutritive value of the food.


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FMCG

Project Shakti

by Hindustan Unilever Ltd.


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FMCG

ITC e-Choupal

Over 35000 villages linked through around 6100 e-Choupals

servicing around 4 million farmers


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Indian Market

Fundamentally Different demand structure from that of the developed

market

A consumer base which expects high functionality at low cost

All elements required to support a business is are not equally

developed


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Successful strategy for Indian market

Strategy should not be the worlds best marketing strategy

Strategy must be specifically made for India strategy


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Examples


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Success of Honda Amez


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Success of Xiaomi


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Success of Nokia


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Success of OLX.in


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Failure of Kellogs


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Failure of Vanilla Coke

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