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Strategies of Rural Marketing.

Product strategies, Pricing strategies, Promotional Strategies and Place ( distribution ) strategies.
by

Sesha Sai

on 11 March 2013

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Transcript of Strategies of Rural Marketing.

Rural Marketing Strategies.. 3. Promotion Strategy.- Awareness.
4. Place or Distribution Strategy.- Availability. 1. Product Strategy. The 4 P's and 4 A's.
 
1. Nationality Branded Products Lifebuoy, Lux, Ponds, Nirma, Colgate.

2. Regional Branded Products Nanjangud Tooth Powder in Karnataka, Ponvandu in TN


3. Locally manufactured Rice, Oil, Food grains, Jaggery -unbranded products



4. Imitation products Lite boy (Life buoy), Pounds (Ponds) Narima ( Nirma)


5. Store / Distributors brand Iyengar Bakery products, Ice creams Etc.. 1. The core of the Product: Mysore Sandal Soap – combination of luxury & tradition
 




2. Brand name: Name, Term, Symbol or Design or a combination of them which is intended to identify goods and services of seller and to differentiate with competitors.
-A company plan for marketing its products
Product Strategies in Rural

New Product Designs for Rural
1.Sturdy Products
2.Brand Name
3.Small Unit Packing
4.Low Priced Packing Explain brand image strategies of any two companies operating in rural areas Class discussion Contd… Product Mix -Width extension- new product line
- Length extension – new product items
-Depth extension – new product variants

Product line Stretching – upward, downward , Line pruning –line modernization

Product item Quality, features, design, brand , Augmentations Scope 5. Based on price &quality: Mass product, Premium product

6. Based on product
development : Innovations, Imitations

7. Based on brand hierarchy level :
Global Brand : Pepsi, Coke
National brand : Godrej, Tata
Regional brand : Sun TV Channel
Local brands: surya masale, Joy chips
Unbranded products: oil, food grains
Commodities: Tamarind, cloves, fish PRODUCT CONCEPTS & CLASSIFICATION Product line
Product mix
Packaging
Labeling
Branding
Service after Sales Issues to be resolved in Product plan
General group of activities in the planning of a product. These activities concentrate on formulating a design of the package and producing an appropriate and attractive container or wrapper for a product.







An obligation of the producer and seller to stand behind the product and assure the buyer that he will derive certain services and satisfaction from the product.
 An assurance of the Quality, Service and Performance. 1-Gain acceptability for the product.

2-Need to offer products that suit the rural market.
i)LG Electronics – Sampoorna sold 100,000 sets in the first year.
ii) Coca cola provides low cost ice boxes, that is a tin box for new outlets and a thermo Cole box for seasonal outlets.
iii)Colgate Tooth Powder, Because Rural People are Used to Brushing with Ash, Brick Powder, Salt...
iv)The strategy taken by Hindustan Unilever Ltd. (HUL) to enter the rural sector, which has remained insulated so far, is a good one. In states like Maharashtra, Gujarat, Andhra Pradesh, Delhi and Haryana, the company is expanding steadily by expanding their network of dealers and making themselves household names. Contd… Is a crucial element of any marketing plan as it offers marketers a mix of product, services and prices, utilizes a promotion mix of advertising, sales promotion, direct marketing and personal selling to reach the target customers through distribution of channels Marketing Mix Quality strategies
Quality improvement strategies –TVS 50 48 cc to 49.9 cc

Spurious goods strategies
Lifebuoy-Love boy

Packaging strategies
Affordability, usage, storability, small, combi packs

Brand strategies
Brand extension strategies – New Cinthol
Multi band strategy – HLL Soaps- Lifebuoy, Lux
Co-branding strategy – IBM and Compaq buys Intel chip and advertise as ‘Intel’ inside
Brand image/ equity management – Onida, Lux Strategies for marketers Commodity strategies vegetables, oil, steels
Branding strategies brook bond’s red label tea, LG Sampoorna
Customer value strategies
Mass product strategies – Maharaja appliances Ltd, Rajdoot 223
Premium product strategies – Fair &Lovely, Surf
Innovation strategies
Rural urban strategies - Bajar electricals, Appollo hospital servicing in rural
Special for rural – Nyle Shampoo, Titan watches Strategies for marketers Contd… Long range competitive plan involving decisions on products, product line and product mix to make proper utilization of resources and achieve marketing goals, In Rural India. Different from Urban. Concept of Product strategy In Rural 1.Based on tangibility : tangible , intangible

2.Based on purpose : consumption, production

3.Based on functional life : Consumables, Durables

4. Based on habits : Convenience goods,
shopping goods,
Specialty goods PRODUCT CONCEPTS & CLASSIFICATION Contd…
 
 
For smooth maintenance and repairs at low charges as well as quick availability of spare parts and accessories at reasonable rates.
 
Important selling point helping the customer to take a quick decision to purchase costly durable goods.
  Tangibility
Separability
Variability
Perish ability Examples: Product : Soft drinks, office furniture, houses etc,
Services : Repairs, construction services, legal services No
No
Yes
Yes Yes
Yes
Sometimes , customized
Some products Services Characteristic Product 1 Based on tangibility. Tangible goods -- products
Intangible goods --services 4. Warranty 5.After Sales Service 3. The Package 2. Brand Name Components of Product Personality Product related Service related Channel Quality
Design style
Features
Packaging
Brand image Ordering
Deliver and credit
Installation
Customer tracking
Repair & maintenance
Expertise
Performance
Courtesy
Atmosphere Augmented Product : needs of consumers
Components of an offer Contd… Goods Product
type Buy frequency Decision Buying place a.



b.


c. Consumable



Durables


Durables Low



Moderate


High Frequent



Occasion


Once in
life Simple



Complex


Complex Paan shop, cooperative stores, fairs, provision store
Fairs, haats, show rooms, chain stores
Shops in towns ,cities Buyer
Involvement 4. Based on habits :
a. convenience
b. shopping
c. specialty Consumables


Durables Onetime


Lifetime Short


Long Food & beverages , soft drinks

Furniture, computers, cars, camera Examples Functional
life period Type Nature of use 3. Based on functional life Purpose Type User Products Consumption


Production Consumer goods

Industrial/
agricultural goods Households


Industries /poultries Toiletries, cosmetics, beverages, home appliances etc

Raw materials, components, agricultural inputs & machinery, animal feeds etc 2. Based on purpose of use Level Purpose Characteristics Determinants Sensory Attention Attractive
Distinctive
Visibility Easy to identify
(shapes, colors) Emotional Interest desire Adoptability
Compatibility
Communicability Easy to carry
Easy to use
Easy to store (milk, tooth pastes, creams) Rational Evaluation Informative
Interactive
Preservative
Economical Easy to know
Easy to store
Good to reuse
Fair price (glass bottles ) Three levels of appeal by packages 1-Product -at the heart of marketing
2-Products must achieve the best fit with rural conditions.
3-The shift of rural consumers from product generalization to product specialization
Promises better growth for urban centric products.
4-The first mover in new product categories will benefit. Points to be Noted whiled Developing a Product in Rural. 1.Core of the product
Basic constituent & associated features viz. Design, Quality, Size Color, Odors Performance Safety OPPORTUNITIES TO BE EXPLORED BY COMPANIES:
• Can you make energy-saving products?
• Can you provide a washing machine that consumes less water?
• Can you provide easy access to the product? Implementation Stage Types of Brands Types Examples 5.Service after sales : 3. The Package: 4. Product Warranty: Decisions at three levels Level Strategy Primary package : to hold the product
Secondary package : to hold the primary package : cardboard box
Shipping package : carry the products from one place to another Associated with Convenience - Consumer recognition & product protection
Packaging material, size, convenience and aesthetics
Example: Chik Sampoo Why Packaging? Kinds of Packaging.. Packaging.. Product Mix
Simple-mostly only one product of a particular company registers its availability on rural shelves due to
-limitations of investments in stocks,
-slow movement and replenishment of stocks,
-dominance of retailer in the rural market
Exceptions-HUL, Dabur Rural Products. FMCGs Consumer Durables Agri Goods Services Acceptability : In a market where life has revolved around deep rooted community values, joint families, and social customs and taboos (women, for example, are not allowed to wear trousers), marketers realize that the traditional routes of market entry and brand building employed in urban India are often not feasible.


As Adi Godrej, Chairman of the Godrej Group, says, “The challenge [for brands] is to understand the [psyche] of the rural consumer, create better distribution, and [appreciate] the heterogeneity.” Brand Building in Rural India Product Warranty and After sales service.. 1. Will increase Market share.
2. Products like Tractor, Motorcycles, Appliances,
Televisions, Batteries need After sales service..
3. After sales service itself is a sustainable business
4. Eg. Air Tel Services in local languages. Identity strategies 2.Pricing Strategies Rural Marketing Mix.. 1.The consumers need to be guided in the proper direction ,in order to make a decision.
2.Providing such information on time develops trust.
3. It raises the emotional involvement of consumers in order to prevent brand defection. Coca Cola
Case Study and Videos A brand’s price doesn’t have to be high to provide an emotional benefit to users.

A mid-priced brand that offers a satisfactory brand experience can be loved as much as an
expensive one that offers a superior experience.

The fact is, a brand that gives us a good
deal evokes a strong positive emotion in most of us. Pricing Right for Rural Consumers.. 1.Godrej and Boyce Manufacturing Co. Ltd has developed the ChotuKool, which costs Rs.3500 Affordability Innovation Radios by and @Rs.250 and Rs.180. LG s Low Cost Tvs. Sampoorna Tvs.
1. They had Only 100 Channels instead of 200.
2. Removed other frills. The production cost can be lowered by using less sophistication and rather concentrating on sturdiness and utility of the product. Affordability is, in determined by two factors- 1.Income of consumer
2.Price of the Product & Services Internal Factors
Cost, Pricing Objective.
External Factors
Customers,Suppliers,Competitors. Factors influencing the price. Cost Factor Determines on... 1. Packing.- Pouch packing than Glass, No sophistication required. Reusable packing. 2. Distribution. - Direct distribution than Agents.Credit Based Transactions Increase costs.- HLL has Shakthi..



3.Production Cost- No Frills.

4. Promotions.- Local Promotions in Haats and Melas. 1.Product sharing services, Example: Tractors
2.Product Bundle pricing, Example: HUL Operation Bharat .
3.Free gifts – may sometimes not work in rural areas
4.Special event pricing- Hero Honda Rs. 500 campaign Product Adaptations Low Pricing is the Key in Rural Areas. Discounts..
1.Cash discount
2.Quantity Discount
3.Off season discount
4. Promotional Schemes. Pricing for Quality Conscious.. Low Price Pricing the product at a lower price really attracts rural population for trying the products.
For many FMCG companies ,

Rs.5 is an appropriate price point to draw new customers and increase consumption.
Tata tea introduced Samunder salt in the economy category.

Bharat Petroleum has introduced five kg gas cylinders to reduce initial deposits and refill cost for rural consumers. The deposits for 5 kg cylinder is Rs. 350. Value Engineering This technique helps the organization not only lower cost but enhance the value.
Nirma detergent powder over a period of ten years has become the largest selling brand in rural India.
The success of Nirma is due to affordable price, medium quality, availability at village shops and use of rural specific mass media.
One can Use Soya Milk Protein, Instead of Milk Protein. 1.Discriminatory pricing
2.Perceived value pricing

Discriminatory pricing is employed to charge different customers grouped differently projecting in quality offer.
Perceived Pricing - Companies add features to their products with a view to enhancing their customers perceived value. For each factures which enhance convince durability reliability attractiveness. 1.Have a long run perspective
2.Idea is to penetrate first
3.Increase Volume
4.Make using the product a habit
5.Volumes to take care of the Margins
6.Keep eye on Competition Price.
7.Uniform Pricing. RURAL PRICING OBJECTIVES Promotion Strategy.. Awareness.. Advertising Five Important Decisons. Rural Communication. 1. Advertising

2. Sales promotions – coupons, contests, demonstrations and sampling, Example: Tata
Shaktee Haat Hungama

3. Direct marketing.

4. Publicity.

5. Push strategy.

6. Pull strategy . Types of Promotions 1. Setting Advertising Objectives.
2. Setting Advertisement Budgets.
3.Creating a message.
4.Deciding on Media Mix.
4. Evaluating Advertising Campaings. Ideal Media Strategy for Reaching Rural Audiences 1.Keep the communication simple…
2.No scope for gimmicks
3.Take time in communicating the message
4.Quickies have no impact.
5.Think in the local language to capture the local spirit in the communication aimed at specific region.
6.Demonstration – a key element for success.
7.ICT.-Information and Communication Technology in Rural .. Television does not distinguish between urban and rural

You may be able to get away with a common TVC for both urban and rural audience particularly for FMCG products… provided your communication is not gimmicky, suggestive and is easy to comprehend. 1. Product Strategy. -Acceptability. 2. Price Strategy.-Affordability. But when it comes to Durables, where rational decisions are involved, it is advisable to target the opinion leaders first.
While urban oriented TVC may register with opinion leaders and help create awareness, for real impact down the line, a region specific and need specific communication programme has to be devised which provides for demonstration and touch & feel of the products. Eg. Anchor, Ajanta, Cavinkare (Chik), Power, Goldwinner, Arasan. 1.They understand the regional ‘ethos’ better. 2.They satisfy a perceived local need 3.Their communication touches a ‘chord’ which helps
in brand acceptance 5.Adapt to changing market situations Lessons from the Success of regional brands in recent times Distribution Strategy. 1. The characteristic of the product.
2. whether it is consumable or durable.
3. The life of the product.
4. Seasonality.
5. Infrastructure. Strategies. 1.Coverage of villages with 2000 and above population.
2.Use of co-operative societies.
3.Utilization of public distributory system.
4.Utilization of multipurpose distribution centres by petroleum/oil companies.
5.Distribution up to feeder markets/mandi towns.
6.Shandies/Haaths/Jathras/Melas: These are places where the rural consumers .
7.Agricultural Input Dealers.
8. Post Offices.. New Approaches in Rural Distribution. The burgeoning rural markets have become a great opportunity for many companies to expand sales.

Many of them back out as they find distribution as a major problem. Used to the developed distribution network in the urban markets, they try the same tricks in rural markets, namely, extensive retailing and sustained pull generation through mass media advertising.

As a result they fail and place the blame on the less developed infrastructure of the rural markets. Creative companies like HLL, have been experimenting to find innovative ways of reaching the rural consumers. Problems in Rural Distribution. vii)Non Availability of Dealers 1.Difficulty in reaching rural consumers The major problems are: i).Lack of adequate transport facilities, iii).Large distances between villages, ii).Lack of pucca roads connecting villages to nearest townships, Intelligent Approach in Rural Distribution. There are wide regional variations in the prosperity levels of the districts and hence in their market potential.
These need to be analyzed and understood sectorwise in order to determine the methods for approaching them.


A socio-economic survey undertaken in four progressive districts, one from each part of the country—Tanjore, Ludhiana, Burdwan and Kolhapur—revealed a healthy per capita income growth of 5 per cent per annum among big and small farmer against a nation average of 1.5 per cent. This has come about through improved use of land coupled with a reduction in family size. iv).Lack of proper retail out lets. v) Multi Layers to reach Consumer. vi)Administrative Problems. viii) Poor Viability for Retailers Levels of Distribution. Melas and Haats. Distribution Adaptations.. 1.Hub and Spoke Model, Example: Coca Cola

2.Use of Affinity groups, Example: Project Shakti

3.Haat Activation, Example: Colgate

4.Syndicated distribution, Example: Cavin Care & Amrutanjan

5.Use of marketing co-operatives, Example: Warna Bazaar in Rural Areas

6.Mobile traders, Example: FMCG companies

7. Unofficial Channels.

8.Public Distribution System (PDS).

9.Agricultural Input Dealers.

10.NGOs

11.Barefoot Sales man or Cycle.

12. Network Marketing- Single level and Multi level. ix) Credit Banking and Facilities. x)Poor product display and visibility Dabur to double rural reach to 27,000 villages this fiscal
June 18, 2012 — INDOLINK Consulting (es)
Source: The Economic Times, Jun 16, 2012 4.They are flexible Availabilty Points Dabur uses Astra to boost rural sales Shopkeepers selling Dabur India's consumer products would now learn marketing through role-plays staged by professional actors at their shops.
As part of a recent initiative titled Astra, advanced sales training for retail ascendance, FMCG major has recruited 75 sales and HR managers across the country who would educate over 2,000 distribution channel partners of the firm about the complexities of sales and distribution through the audio-visual medium Dabur has a distribution reach of 25 lakh retail outlets across the country.
About 75 per cent of the company's sales come form rural areas, hence, it has created the Astra training consultancy module in five vernacular languages, Bengali, Tamil, telungu, Malayalam and Kannada 2.Sales Promotions-- Consumer and Trade Schemes
that incentivise spending using discount coupons, off sesson discounts, free samples encourage spending..
Off Season discounts can be encouraged. 3. Direct Marketing Video Eg Philips Bulbs Example: Project Shakti and AP Online 4. Publicity 5. Push strategy. – sales force and trade promotion 6. Pull Strategy -advertising and consumer promotion
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