Rural Mkting

7/31/2019 Rural Mkting

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Rural Marketing


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Reference

New Perspective in Rural & Agricultural MarketingY RamkishenRural Marketing Book Pradeep Kashap & Siddhartha Raut

Cases In Rural Marketing An Integrated ApproachCGS Krishnmacharyulu & Llith Ramkrishnan


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PROFILE OF RURAL MARKET

RURAL CONSUMERMARKETING RESEARCHRURAL MARKET RESEARCHRURAL SEGMENTATIONTARGETING &

POSITIONINGRURAL MARKETING STRATEGY

RURAL PRODUCTRURAL PRICE

RURAL DISTRIBUTIONRURAL SALES FORCE MANAGEMENTRURAL COMMUNICATION


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What is Rural ?

Government agencies like IRDA (Insurance RegulatoryAnd Development Agency and NCAER (National Councilfor applied Economic Research) define Rural as villageswith a population


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Census

Towns are actually rural areas but satisfy

The following criteria

Minimum Population>=5000

75% of the male population engaged in

Non agri activity

RBI

Location with population up to 10000

Considered RuralSemi Urban 10000 to 100000


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NABARD

All locations upto a population of 10000

Will be considered Rural

Sahara

All locations having shops/establishmentsUpto 10000 (not population related) are

Treated as Rural

LG Elect.

The rural and semi urban area is definedAs all cities other than major metros


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Concept of Rural from the perspective of marketing has

Indeed been dynamic.- gradually changed over thetimes

Was not India a so called Village/Rural for the world a

couple of decades back


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What is Rural Marketing ?

Developing of the market in the area as defined as

Rural

Hence it could be aptly said that it encompasses the

Activities such as developing the process to meet thisObjective Right product at the right price to the right

people at the right time. Exchange between rural and

Urban is a Factor . Could be Urban to Rural: Rural to

Urban, Rural to Rural


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Reasons for Going Rural

Size of the market

Largely Untapped

Too crowded Urban Market

Income on the rise/disposable income

Income from other than agriculture

Income flow from urban areas /abroad

Better exposure - media


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Great success stories

HLL 50% Colgate 50% LG 50% Asian Paints 60% Dabur 40% Videocon 40% Cadburys 25% Hero Honda 40%

Source ORG Marg and Fransis Kanoi


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Points to Note with Regard to Rural Markets

Extremely Diverse MarketVillages Size,

Population,

Spread,

Income

Literacy levels ,

awareness level,

languages

Urban Market scope and saturationFlow of funds from Urban National /InternationalLiteracy levels on the riseMedia Penetration


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Encouraging Indicators/Initiatives for Rural Market GrowthScientific methods major impetus to Production of

food grainsExport on the rise Increase in agriculture and handicraftsInitiatives taken by banks for more branches and Kisan credit card to buy

seeds, fertilizers, consumer goods on installment basisReputed Companies helping in changing lifestyles Levers ,Britania

,Dabur,LG,Honda,VideoconMedia creating an impact-creating awareness levelsGovernment Policies White Revolution Milk products

Yellow Revolution (poultry and edible oils)Blue Revolution Aqua culture


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Employment Schemes JRY(Jawahar Rojgar Yojna, Small Industries Training,Rural Electrification, Spend on Health and Sanitation, Medical and Health,

Primary Education,Credit card for farmersWaiver of LoansInitiatives by leading organization in spreading awareness Hindustan Levers,

Shakti, ITC Reliance etc.


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Move to Rural Market encouraging DataRural India buysSoft Drinks approx 45% of all soft drinksAlmost 50% motor cyclesApprox 55% of cigarettesHalf the total market for TV,

Fans,pressure cooker,bicyclesWashing soap,tea,blades,salt,toothpowder

Coca Cola is growing over 35% in Rural areas compared toOver 22 % in Urban


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According to Hansa Research , a market research firm thatHas published a Guide to Indian Markets 2006Consumer durables in Indian Villages risen sharplyTV Sales up by 200%Motorcycle by 77%There are 3000 households in rural area that earn > 50 lakhs

We have come some way ahead but there is a long way to go


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PROBLEMS IN RURAL MARKETINGLow per capita incomeLow disposable incomeInadequate fixed income (daily wages)Majority depends on Agricultural Income

Acute dependence on monsoon Consumption linked to harvest

Infrastructure problems - Roads, powerLow awarenessCommunication- difficult & expensiveToo many languagesGeographic Spread


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Urban & Rural MarketsKey Differences

Per capita IncomeDisposable IncomeLiteracy levelsInfrastructureCommunicationGeographical SpreadCustomer has many choices


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Characteristics of Rural Population>Low Literacy Level

>Low Income Level

>Massive Geographic Spread

Urban population concentrated 3200 cities townRural scattered over 630000 villages

>Reference Group

Health Workers

Doctors

Teachers

Panchayat MembersRural Bank Managers

District Managers

>Occupation Principal Farming

Trading

HandicraftsCattle & Poultry Farming

>Media Habits Fond of music T.V Radio Video Films

Generally they have a lot of reservation/inhibition

rigid in their behaviour


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RURAL CONSUMER CLASS

The Affluent Class

The Middle Class

The Poor

RURAL CONSUMER BEHAVIOR

How does an individual decide to spread his

Available resources (time,money effort) on

Consumption-related products.

That is what they buywhy they buy

when they buy

where they buy it

how often they buy it

how often they use it


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Aspirant

Climbers

Well Off

Poor

Very Rich


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Simple Model

ofRural Consumer Behaviour


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Factors thatInfluence RuralBehaviour

StimuliInputs to any senses

Products

Package

Commercials

Brand imageReference

Information cues about the

characteristics of the

product

Attitude>Consumer belief

Consumer feelings

PerceptionDepends on

Exposure

Eg IFB had not adequately Educatedfarmers about the Washing machine

-they thought It was a churn for making

large quantities of lassi (prosperous

village of Punjab)

I

InterpretationIodex muscular painReliever used on animals

After hard days work in MP

Godrej hair dye on Buffaloes

To make them look better in

Village haats in Raichur


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Key Challenges

4As

Awareness

Affordability

Availability

Acceptability

4 Ps

PromotionPriceProductPlace


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RURAL MARKET RESEARCH


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Marketing Research is a formalized means of obtaining

Information to be used in making marketing decisions

Market research

Issue Information Required to address

Design Method of Collecting Information

Manage The data collection process

Analyze The results

Communicate Finding and implication


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Primary Sources

Retail shops/STD booths

Tea Stalls

Playgrounds/schools

Chaupals (meeting point

old/middle aged/

influential)

Haats & Melas

Influence Group

Secondary SourcesGovernment website

www.censusindia.com

www.indiastat.com

www agroindia.com

Private bodies (market research

advertising agenciesIndian Market Research Bureau

Thompson Rural Index

Guide to Rural Markets

Publications


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Tool Kits Used forRural Market Research


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Tool Kits Used for Rural Market ResearchFaces

Color Wheel

Same Color Different shades

Different Color

Happy Sad

Number of Coins

Ladder

Playing Cards


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Build Rapport - ***Greet need to be informalSpeak local languageDo not jump to survey speak of othermatters of interestGradually lead to the objective of the interviewExplain the benefit of the survey how it will gainInterviewer should be aware of the rural areaNever make the respondent uneasy if he offers tea do not

refuse


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RURAL MARKET

SEGMENTATION TARGETING &

POSITIONING

SEGMENTATION


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SEGMENTATION

Very Variedhence proper segmentation very essential

Geographic:

RegionNorth, East, West and South

Village size

Climate

Demographic

Age

Family SizeGender

Income

Occupation

Education

Caste

Psychographics

(consists of psychological: sociology:

anthropological)Lifestyle - Rigid ,changing attitude,

urban influence

Personality - Authoritarian,

Ambitious

Different variables could be used.. multilevel

segmentation

Behavioral

Occasions Regular, special occasion

Benefits - User status regular user, first

time user, non user

Usage rate - Light, medium, heavy

Loyalty - None, medium, strong

Attitude to product - positive, negative,hostile


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DEVELOP THE PROFILESelect the Target MarketEvaluate the MarketEvaluate the Segment

sizegrowth rateprofitabilityaccessiblecompatible with firms

resources & capabilities

TARGETING


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TARGETING

>Select Target Segment

>Formulate Market a marketing strategy for the target market

POSITIONING

One shoe fits all! !! ! .

Everything for Everyone !!!It is Something for Someone

How to Position

USP of the product uniqueness of the product

Special needs either address partially/ unaddressed

Noticeable gap in the products availablePositioning Concept

Study the possible motives of the rural customer

Then figure out how to appeal to them

(USP, Price Quality Uses, Class, Culture etc.)

Select & Develop the ConceptBridge gap between the product and the target market.

Communicate the Concept

Advertise and Reach (Media)

Offer Product

After STP (Segmentation, Targeting and Positioning)

Post Sales Feedback & After Sales Service


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RURAL MARKETING STRATEGY


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Mid- Entrant

Company starts RuralMarket after success inUrban Market

(eg HLL, LG)

Late - EntrantCompany starts RuralMarket after success inUrban Market for long

(eg Cadbury]

New EntrantCompany starts RuralMarket first & thenventures in Urban

Market

(eg Cavin Kare Chik &Meera Shampoo)

ENTERINGTHERURALMARKET


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R - Retain

G - GrowA - Add

Purpose To the market


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DEVELOPMENTAL MARKETING

Developmental marketing is a process through which

awareness is created

>could be demonstration>could be presentation

>Free samples

>could be through up eg tie up with Bank

tie up with Petrol/Diesel pumps

(Hyndai did with IOC and PNB and SBI subsidiaries

>30% sale of Hyndai from Rural/Semi Urban areas)


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Awareness

Trial

Purchase

Post-Purchase Satisfaction

Colgateprogram Operation Jagruti

Switch from Charcoal to Colgate tooth powder

HLL-

Free samples of Lifebuoy

Cavin Kare Free sample of Chik Champoo

Marico Industries Parachute coconut oil

Sudhata ki pehchan smell to differentiate between real ands urious


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Rural Product

Product to be marketed with the requirements of the Rural Consumer

should not be an extension of urban offerings

(Philips launched Free Power Radio does not require

Battery/electricity you wind it with a lever and radio runs

For approximately 30 min. ]

1.FMCG

(HLL, Dabur, Marico, Colgate=Palmolive

Coke, Pepsi)

2.Consumer DurablesTV ,Fridge, Fan, Presssure Cooker,

Cycle, Two wheelers, Sewing machines,

watch, mixer grinder, radio, music system,

Fans, Washing machines

(Philips, LG, Videocon, Onida )3.Services

Telecom, Banking, Health care ,Insurance

(Airtel, BSNL, SBI, PNB,Dena bank,)

4.Agri-inputs

Seeds, pesticides, tractors

(Rallis India, Bayer,)


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Points to noteRural Products

Easy to Use

After sales support

Conveniently packed- success of Sachets

Product literature to be simpleHave a logo easy to identify eg Thums Up

Rural PackagingPackaging materialplastics, poly packs, unbreakable materialsLooks

- attractive colors (like all tea companies)

Size and convenience- small is beautiful


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Rural Branding1. Brand Name

2 Create Brand Identity

3 Enhance Recognition

4 Build a Brand Image

5 Countering Spurious brands

Look alike

Spell alike

Duplicates


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Enhancing Brand Strategies with SocialPerspectiveSoaps for Hygiene

Cooking gas for environment

Creating need by more awareness

Partnering with a long term perspective requires total belief and

Commitment - to the people, to the processes, to their own

employee.

Need to work for a cause ITC, Hindustan Petroleum, HLL ,Colgate Palmolive , Several Banks are a few such examples


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RURAL PRICEPricing In Rural Market plays a key role in the success of a product

RURAL PRICING OBJECTIVESHave a long run perspective

Idea is to penetrate first

Increase VolumeMake using the product a habit

Volumes to take care of the Margins

Keep eye on Competition Price

The following may help in addressing the issueLow costless amount (small packages- sachets)

Simple but colorful packaging eg. success of biscuits

Refill packs

Value engineering eg soya protein in place of milk protein


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METHODS OF PRICING

CostPlus Pricing = cost of product +distribution+profit

Value Pricing (VFM-Value for Money) High Benefit

Power Price eg Re 1, Rs 2, 3, 5,10

Penetration Price Introduce at low and hike price

after success

Differential PricingDifferent price for different market

Price Gap Comp prices range


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Supply Chain Stores


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Rural Super Market

Small companies tie up with large companies

Leverage/Syndicate

Distribution network of Marico to sell Tide by P&G

Satellite DistributionWhole-

Saler

Town

D-dealer

SD- Sub DealerR-Retaile


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PLANNING FOR SALES FORCE MANAGEMENT

SET THE PERSONAL SELLING OBJECTIVES

FORMULATE THE SALES POLICIES

STRUCTURE THE SALES FORCE

SIZE OF THE SALES FORCE

ASSIGNING SALES TARGETSCREATING SALES FORCE- SELECT, RECRUIT,

TRAIN

SALES FORCE COMPENSATION, MOTIVATION,

SUPERVISION

SALES COMMUNICATION & REPORTING

SALES COORDINATION/SALES CONTROL


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TRAITS OF A RURAL SALESPERSONHardworking

Have Empathy

Enthusiastic

Perseverance

Knowledge

AttitudeSkills

Additional traits for making it Big in Rural Areas

Willingness to work in Rural AreasAdopting to cultural differences

Down to earth approach

Fluent in local language

Developmental approach Create not only Communicate


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The Success of Organizations depends on lot on theSales Force

They are the face of the Organization the

AmbassadorThey are the ones who have direct interaction with

The Potential Consumer/Customer

The Users

The DealersThe Distributors

The Retailers

They are a major link to the chain and establish the

link

They are the ones who help in building Trust

They need to break the rigid ideas and preconceived

notions


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RURAL MEDIA

Mass Media(Conventional)

T.V /Cable network

Satellite Channels

RadioPrint

Cinema/

Theatre

Word of

Mouth

Video on

Wheels

Traditional Media(Non Conventional)

Puppet Shows

Folk Theatre/Opera

Demonstration

Haats and Mela

Wall painting

Post card and posters

Booklets/Calendar


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Mass Media

Advantages

>Excellent Reach

Less expensive ,wider

coverage

Disadvantages

At times unnecessarycoverage

No customized messages

Companies using this medium

Levers, Onida, Videocon

Mahindra Tractors, Eveready

Traditional Media

Advantages

>High involvement

High Interest

Localized administered at low

cost

Disadvantages

Coverage

Repeat /Re enforcement

Skill of performer

Rural Mkting

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