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Changing game in slowdown

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` Rural marketing- process involves Developing

Pricing

Promoting

Distributing

` Two way marketing processx Urban to rural

x Rural to urban

x Rural to rural

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` DEMOGRAPHIC Population

Growth of purchasing power

Age of 48 percent of population below 20

Literacy rate Family structures

Occupation

` PHYSICAL Scattered population

24% village with population below 500, no shops

Only markets is weekly haats

Villages with populatin above 2000 have 15-16 shops

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` SOCIAL AND CULTURAL Caste system

Conservative society

Less exposure to media

Strong opinion leadership

` ECONOMIC Moving from lower incomes to higher incomes

From kuchha houses to pukka houses

From food products only to durables and branded products

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` TECHNOLOGICAL Green revolution

White revolution

NGO movement

` POLITICAL Panchayati Raj- 3 level

Sarpanch at the block

Gram Sabha

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` The rural consumer market, which grew 25 per cent in 2008, is

expected to reach US$ 425 billion in 2010-11 with 720-790 million

customers, according to a white paper prepared by CII-Technopak,

in November 2009.

` The figures are expected to double the 2004-05 market size of US$

220 billion.

` The Union Budget for 2010-11 has hiked the allocation under the

National Rural Employment Guarantee Act (NREGA) to US$ 8.71

billoin in 2010-11, giving a boost to the rural economy.

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While there is a general tendency to equate rural India to BoP market, here

are some of the consumption numbers that will blow your mind

` 46% of the soft drinks sales happen in the rural areas.

` Rural India accounts for 49% of motorcycle sales.

` Rural India accounts for 59% ofCigarettes sales.

` 53% of FMCG sales happen at Rural India.

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Rural India Opportunities

` Talcum powder is used by more than 25% of rural India.

` Lipsticks are used by more than 11% of the rural women and less than 22%

of the urban women.

` Close to 10% ofMaruti Suzukis sales come from the rural market.

` Hero Honda, on its part, had 50% of its sales coming from rural market in

FY09.

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S.NO Product Percentage

1 Toilet soap 12

2Shampoo

10

3 Toothpaste 7

4 Talcum 12

5 Hairoil 12

6 Skin creams 20

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S.NO Products Percentage

1 Washing cakes 13

2 Washing powder 9

3 Bathroom cleaners 17

4 Scourers 7

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` Rural India has a large consuming class with 41% ofIndias middle-class

and 58% of the total disposable income accounting for consumption.

` By 2010 rural India will consume 60% of the goods produced in the

country.

` In 20 years, rural Indian Market will be larger than the total consumer

markets in countries such as South Korea orCanada today, & almost 4

times the size of todays urban Indian market.

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` Consumption of food and beverages slipped slightly in rural India due to

increased prices.

` Personal care and household products sales grew.

` Reason could have been food inflation which strained the overall demand.

` Margins were affected, due to low pricing strategy, but sales grew overall.

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S.NO Commodity %value

Contribution

Value Growth

%

Volume

Growth %

1 FMCG - 1 -

2 Personal Care 16 8 3

3 Household Care 10 7 10

4 Food & Beverages 74 -1 -2

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In order to overcome the decreased demand in rural market differentcompanies took different measures to maintain profits

` FMCG sector Dabur-focus on price point and increased direct market contact by

company sales

HUL- additional distributors and offering lowered price products.

P&G- offering more affordable product

Emami- launching smaller denomination product packs and

innovative below the line activities.

` Personal and household care segments Slashed prices to boost volumes

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` Pricing Strategy

Discount strategy

Optional product pricing. Low cost/cheap products

Refill packs/reusable packaging

Application of value engineering

Avoid sophisticated packaging

Product bundle pricing

Coinage pricing

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` Promotional Strategy

OrganizeMelas

Wall Paintings

Gram Panchayats

Through NGOs ( Tata tea)

Schools and religious places for target and promotion

Mass media promotion through radio.

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` Distribution strategies

Through co-operative societies

Public distribution system

Multi-purpose distribution centres

Distribution up to feeder markets

Mandi towns shanties

Haat

Jathras

Melas

Agricultural input dealers etc.

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` New product designs

A close observation of rural household items indicates the importance ofredesigning or modifying the products. The manufacturing and marketingmen can think in terms of new product designs specially meant for ruralareas keeping their lifestyles in view.

` Study the Products

We need to understand the product in such a way that we know how tomarket it and who can be the target market .

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` We cannot get stuck in only one strategy

` The companies should not always follow what the market is following

` Understand the problem well before coming up with any solution

` Trial and Error method do work

` Urban and rural markets are completely different as consumer base itself isdiverse

` The promotional methods discussed has its special significance

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` Priyanka Mandla

` Sahil Narang

` Suprita Tamrakar

` Sirish Amatya` Shraddha Mukul

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