Assignment-3OF

RURAL MARKETING

STATE ALLOTED: - NAME OF THE PRODUCT:-

SUBMITTED TO: - SUBMITTED BY:-

Mr. ABHISHEK DUTTA Mr. SOURAV RAINA

LOVELY INSTITUTE OF MANAGEMENT RT1903 A65

INTRODUCTION:-

JAPAN HONDAMOTOR CO.A US $ 84.3 Billion Enterprise with over 19.6 million products soldannually.95 Production Facilities in 34 countries.Over 5.9 million Portable Power Products sold annually.Over 46 million Portable Power Products existing customers base worldwide.

ABOUT THE PRODUCT (HONDA GENSETS):-

GENSET MARKET IN INDIA- AN ARTICLE

Generator business sees huge market potential

Dinesh Vyawahare, Senior General Manager, Marketing, KOEL

India’s thrust on achieving higher economic growth rate has intensified construction activities all across the country. This has also created huge demand for power supply. According to some market research, there is a demand-supply gap of about 17% in power generation. This has thrown open huge market opportunities for the power backup providing companies. The power backup market in India is growing at an annual rate of 15-20%, varying within the three different segments – generators, UPS and inverters. Major players like Kirloskar Oil Engines Ltd (KOEL), Mahindra-Powerol, Cummins India, Greaves Cotton, Ashok Leyland, Eicher, Caterpillar, MTU and few other imported brands are seeing huge market potential to grow in India. Dinesh Vyawahare, Senior General Manager, Marketing, KOEL, said: “India’s power market is growing faster than most other countries. With an installed generation capacity of 147 GW, generation of more than 600 billion kWh, and a transmission and distribution network of more than 6.3 million circuit kms, India is now the fifth largest power market in the world. The per capita electricity consumption in the country is around 665 units which is envisaged to increase to 1,000 units by 2011-12.”He said good opportunity continues to exist in power sector in India due to growing gap between demand and supply. The demand for power is typically driven by sectors such as Telecom, Commercial construction, IT, ITES, Retail, etc.KOEL is into manufacturing air cooled and liquid engines/ diesel Gensets with power output covering from 5kVA to 625kVA and 1800kVA to 6300 kVA. “Kirloskar engines are known for lower operating cost, higher reliability and longer life. We manufacture engines that are not only emission complaint and eco-friendly, but are also manufactured in an environment friendly way. KOEL engines and diesel generator sets are certified for the stringent noise and exhaust emission norms made mandatory by Central Pollution Control Board,” Vyawahare added.He said the domestic Genset market (inclusive of Telecom sector) is about two lakh per annum in the range from 10kVA to 2000kVA. “KOEL is a major player in India with about 27% market share. We foresee our market share to grow up to 35% in next couple of years,” he added.Diversifying into the power generation sector, Mahindra & Mahindra, another player to have its strong presence, had launched its Mahindra Powerol brand in the India market in 2001. The company realised huge potential in the segment and decided to start manufacturing and supplying complete DG sets under the new brand. This has helped them to grow their business to Rs1010 crore in 2009 from its earlier revenue of Rs51 crore in 2005. The company manufactures engines which can power Diesel generating sets ranging from 5kVA to 320kVA. “In Telecom segment we have 42% market share whereas we hold 21% market share in retail segment. In volume term, we had sold 52,000 DG sets in financial year 2008-09. Besides Telecom, DG sets are also powering customers from a diverse cross-section of industries such as banks, building & construction, public sector units, hospitals, hotels, homes and manufacturing units,” the company said.Mahindra had also launched B100 bio diesel generator sets for the Indian market. The company said

Mahindra Powerol engines and diesel generator sets are certified for the stringent noise and exhaust emission norms made mandatory by the Central Pollution Control Board, India. According to industry estimates, the DG set market in India (15-2000 kVA range) was estimated at Rs60,253 million with 147,040 units in financial year 2006-07. That is now projected to grow to Rs12,2230 million with sales of 205,450 units.

TYPE OF CUSTOMERS TO BE TARGETTED IN RURAL AREAS OF KERALA:-

Farmers Rural people who are involved in businesses like petty shopkeepers, event management etc

ANALYSIS OF RURAL AREAS OF KERALA

ABOUT THE PLACE (KERALA):-

The state has an area of 38,863 km2 (15,005 sq mi) and is bordered by Karnataka to the north, Tamil Nadu to the south and the east and the Arabian Sea on the west. The major cities in Kerala are Thiruvananthapuram, Kochi and Kozhikode. Kerala is also known for its many small towns that are scattered across the state, thus creating a higher density of population.

Kerala is a popular tourist destination famous for its backwaters, Ayurvedic treatments and tropical greenery. Kerala has a higher Human Development Index than all other states in India. The state has a literacy rate of 94.59 percent, the highest in India.

In fiscal year 2007-2008, nominal gross state domestic product (GSDP) was 162,414.79 crore (US$35.24 billion). Recent GSDP growth (9.2% in 2004–2005 and 7.4% in 2003–2004) has been robust compared to historical averages (2.3% annually in the 1980s and between 5.1% and 5.99% in the 1990s).

ABOUT RURAL MARKET IN KERALA:-

S No. State No. of villages less than 500 persons

1 Kerala 6

S No. State No. of villages (1000 - 4999 persons)

1 Kerala 79

S No. State No. of villages (5000 - 9999 persons)

1 Kerala 207

S No. State No. of villages (10000 or more persons)

1 Kerala 1,072

DISTRICT WISE TOTAL/RURAL/ URBAN/ POPULATION OF KERALA:-

S No. District TRU Persons Males Females

1. Alappuzha Total 2,109,160 1,014,529 1,094,631

2. Alappuzha Rural 1,487,703 712,867 774,836

3. Alappuzha Urban 621,457 301,662 319,795

4. Ernakulam Total 3,105,798 1,538,397 1,567,401

5. Ernakulam Rural 1,628,713 808,609 820,104

6. Ernakulam Urban 1,477,085 729,788 747,297

7. Idukki Total 1,129,221 566,682 562,539

8. Idukki Rural 1,071,628 538,064 533,564

9. Idukki Urban 57,593 28,618 28,975

10. Kannur Total 2,408,956 1,152,817 1,256,139

11. Kannur Rural 1,196,058 578,544 617,514

12. Kannur Urban 1,212,898 574,273 638,625

13. Kasaragod Total 1,204,078 588,083 615,995

14. Kasaragod Rural 970,378 475,196 495,182

15. Kasaragod Urban 233,700 112,887 120,813

16. Kollam Total 2,585,208 1,249,621 1,335,587

17. Kollam Rural 2,119,230 1,021,415 1,097,815

18. Kollam Urban 465,978 228,206 237,772

19. Kottayam Total 1,953,646 964,926 988,720

20. Kottayam Rural 1,653,838 817,819 836,019

21. Kottayam Urban 299,808 147,107 152,701

22. Kozhikode Total 2,879,131 1,399,358 1,479,773

23. Kozhikode Rural 1,777,974 863,632 914,342

24. Kozhikode Urban 1,101,157 535,726 565,431

25. Malappuram Total 3,625,471 1,754,576 1,870,895

26. Malappuram Rural 3,269,301 1,581,794 1,687,507

27. Malappuram Urban 356,170 172,782 183,388

28. Palakkad Total 2,617,482 1,266,985 1,350,497

29. Palakkad Rural 2,260,907 1,093,515 1,167,392

30. Palakkad Urban 356,575 173,470 183,105

31. Pathanamthitta Total 1,234,016 589,398 644,618

32. Pathanamthitta Rural 1,110,218 529,823 580,395

33. Pathanamthitta Urban 123,798 59,575 64,223

34. Thiruvananthapuram Total 3,234,356 1,569,917 1,664,439

35. Thiruvananthapuram Rural 2,142,695 1,035,265 1,107,430

36. Thiruvananthapuram Urban 1,091,661 534,652 557,009

37. Thrissur Total 2,974,232 1,422,052 1,552,180

38. Thrissur Rural 2,134,799 1,018,315 1,116,484

39. Thrissur Urban 839,433 403,737 435,696

40. Wayanad Total 780,619 391,273 389,346

41. Wayanad Rural 751,007 376,424 374,583

42. Wayanad Urban 29,612 14,849 14,763

ABOUT THE ECONOMY OF KERALA:-

As per the latest figures the per capita state income at constant prices (1999-2000) increased from Rs. 25,657 in 2005-06 to Rs. 27,284 in 2006-07 recording a 6.3 percent growth. It is also to be noted that the per capita state income is still higher (Rs. 27,284) than the national income of Rs. 22,483. The growth rate of Gross State Domestic Product (GSDP) was 8.1 percent in 2006-07. At current prices the GSDP is estimated at Rs. 1,32,738.53 crore (quick estimate) during 2006-07, whereas at current prices it is 11.6 percent in 2006-07 compared to 11.2 percent in 2005-06.

The sectoral share of territory sector, which is growing fast, and its contribution to the GSDP at constant prices (1999-2000) constitutes 60.6 % and at current prices it was 61.3 % whereas, the contribution from agriculture (primary sector) is decreasing at 17.8% in 2006-07 (constant prices) and 16.5% at current prices. The secondary sector remains almost stagnant of about 22 percent only.

District wise analysis showed that, 'Ernakulam district' topped in the three aspects of Kerala economy. The district has the highest growth rate of per capita income, per capita income and GSDP. With regard to GSDP the district has the highest income of Rs. 18,729.37 crore in 2006-07 registering the growth rate of 12.1 percent than the previous year. The same district stands first with the per capita income of Rs. 39,034 at constant (1999-2000) prices in 2006-07 as against Rs. 36,520 in 2005-06. The highest rate of growth of per capita income at constant (1999-2000) prices of 6.9 percent was also recorded in Ernakulam district in 2006-07 followed by Pathanamthitta (6.8 percent) and Thiruvananthapuram (6.7 percent) districts. Ernakulam district also holds the position of having the major portion of the income from secondary sector. (Rs. 5337.17 crore) leaving behind Thiruvananthapuram (Rs. 2729.50 crore) and Thrissur (Rs. 2327.67 crore) districts.

Sector wise analysis in GSDP showed that the highest contribution from primary sector falls in the Idukki district of Rs. 1,883.88 crore (2006-07) followed by Malappuram (Rs. 1,871.71 crore) and Kollam (Rs. 1,585.74 crore) at constant prices respectively.

Viewed from a long-term perspective, however it is the territory sector that stands out with the highest growth and the primary sector does not hold the promise of propelling higher growth rate for the economy. Thus, the analysis both in terms of rate of growth and sectors share of GSDP, the tertiary sector has dominated, pointing the fact that Kerala has certainly moved towards a non-agricultural economy. Still it is important for the State to increase production in real sectors of the economy such as agriculture and industry.

The global financial recession has started affecting the economy of Kerala, with a fall in rubber price, decrease in exports and decline in job opportunities abroad. The price of natural rubber (1 kg) has dropped from Rs. 140 to around Rs. 80. Market leaders in the State's spices, cashew export sector as well as tourism are also reasonably apprehensive about the global economic contraction. Above all, the effects of the global financial and economic crisis have already had its toll on the information technology (IT) sector in Kerala. If the IT sector in the state slows down, the state might face a lot of problems with unemployment, because the category of people being employed in the IT sector in Kerala might not easily find employment with salaries similar to their current pay cheques.

Thus, in order to shape Kerala to a new model of development based on faster economic growth with distributive justice the State government has been giving equal importance to the traditional sectors like agriculture, education, health and other services as well as the emerging the sectors like tourism and Information Technology.

MARKETING MIX (4As OF RURAL MARKETING)

1. Affordability: The meaning of affordability is to reach the customer by satisfying their needs. The designing of the product should match the needs of the customer. The Customer should not think that they cannot buy it that means it should be in their buying capacity. The income earned in rural markets is from different ways, so by keeping this in mind most of the companies should design the product in such a way that it reaches the customer. HONDA producing a large range of small GENSETS keeping in eyes the consumer of rural market, who are not ready to lock a huge investment in a particular time. The price of HONDA GENSETS is very reasonable price (Starting from Rs 11999 only). Along with it HONDA having a varied range of generators in various versions like kerosene oil generator, LPG generator etc, which are cheap in price as compare to other generators. Moreover as per the latest figures the per capita state income at constant prices (1999-2000) increased from Rs. 25,657 in 2005-06 to Rs. 27,284 in 2006-07 recording a 6.3 percent growth. It is also good news for HONDA as people have the potential to buy the GENSETS.

2. Availability: The greatest problem in the rural market is to reach the customer or retailer. Its the logistics way to make the product available there. Once it reaches the retailers shelf then there will not be any problem. This is because there will be lesser number of brands available at market and the Influence or image/ Relationship of the retailer makes the difference. The companies should work out to reach the customer in time. Most of the products are promoted well but by the time it reaches the customer it gets late. So reaching the market should be considered.Rural areas of Kerala have good infrastructure as compare to others states of India, they have a good coverage of transport facilities. So the distribution of the HONDA GEENSETS is comparatively easy in those areas.HONDA can adopt the following distribution system in order to make its products available to potential customers of rural areas in Kerala.

The distribution system includes the product flow of HONDA GENSETS directly from distribution department to dealer, from where customer can buy the products. It will minimize the distribution cost of HONDA as no mediator is involved in the whole process.

3. Awareness: The Awareness program should be in such a manner that it should reach the customers mindset. The main way of reaching the customer is through the commercials on media like TV, Radio and Outdoor. The awareness programs should be conducted at the area (Junction) where the village heads meet or in other way the meeting place at the villages. The awareness program should be in such a way that it should contain some message to the audience; there should be some concern for them and their place. Apart from this there are some things which the company should think of, such as Color of the product, Packaging etc.

In Kerala the literacy rate is almost 94.59 % which is highest in India, and the many people used to speak English and Malayalam language. So the communication is no barrier if it is taken care properly.

Wikipedia report of MEDIA in KERALA as follows:-

Media in Kerala

From Wikipedia, the free encyclopedia

Media in Kerala are widely accessible and cater to a wide variety of audiences in urban as well as rural areas.

Newspapers

Dozens of newspapers are published in Kerala; they are printed in nine major languages. The principal languages of publication are Malayalam and English. The most widely circulating Malayalam-language newspapers include Madhyamam, Mathrubhumi, Malayala Manorama, Mangalam , Deepika, Kerala Kaumudi,Thejas, and Desabhimani. Among major Malayalam periodicals are Madhyamam weekly, Mathrubhumi weekly,India Today Malayalam, Chithrabhumi, Thejas, Kanyaka, and Bhashaposhini.

Television

Doordarshan is the state-owned television broadcaster. Multi system operators provide a mix of Malayalam, English, and international channels via cable television. The first group to enter the television field was Asianet in 1993, followed by Surya TV in 1998. Kairali TV started broadcast in the year 2000. Multiple channels then started broadcasting including Manorama News, Kiran, Kairali People, Kairali We, Amrita TV, Jeevan, Indiavision news, Jai Hind (news), Channel IBC (news), Shalom TV (Religious) and PowerVision TV (Religious).

Mobile

BSNL, Reliance Infocomm, Tata Docomo, Tata Indicom, Idea, Uninor, Aircel, Vodafone Essar and Airtel compete to provide cellular phone services. Broadband internet is available in selected towns and cities and is provided by the state-run Kerala Telecommunications (which is run by BSNL) and by other private companies. Dial-up access is provided throughout the state by BSNL and other providers.

Radio

In Kerala, Radio had a very vital role in communication. All India Radio, the national radio service, reaches much of Kerala via its Thiruvananthapuram 'A' Malayalam-language broadcaster. After AIR Malayalee audiences. Radio Alakal, the first Community radio in the state, started narrowcasting from Trivandrum on 1 May 2006. Kerala's First private FM station, Radio Mango 91.9, was launched on 29th, November 2007 in Calicut, sparking off the FM revolution in the state. Today, Kerala has a host of private FM channels that are fast gaining influence among its population.

From the above reports it has been clear that media exposure in KERALA is quite high. The presence of wide variety of communication medium can help HONDA to promote its GENSETS effectively as well as it will reduce its cost by using a portfolio of different media tools. Apart from it HONDA can contact the ‘sarpanchs’ of villages in rural areas and can make them aware of benefits of HONDA GENSETS. It would help HONDA to generate a positive ‘word of mouth’ among people in rural areas and can result into increase in sale.

An ad of HONDA GENSET is shown below that is used by HONDA into its print media campaign throughout INDIA.

4. Acceptability: The most important theme of Marketing Mix is Acceptability. The customer should think that they can buy the product by putting an extra money on that. They should feel that the product is designed as per their needs and it should deliver a great solution to the customer. They should think that the product gives some value to them, and it should serve the purpose what they are planning to buy for. The customer should feel the comfort with the product and there should not be any hesitation to go for it.

Acceptability of a product is purely depending upon its relevance according to the needs and demands. HONDA GENSETS are developed specially keeping in mind the problems of rural India. The

harsh conditions of rural areas, they are specially designed to run with kerosene oil , LPG gas etc.

These HONDA GENSETS are LPG run which is comparatively cheaper source of energy, as the disposable income of the rural people is comparatively low, so HONDA LPG GENSETS can be the best option to them.

Along with these HONDA offers a wide range of its kerosene run GENSETS, some of them are designed in such a way so that they can generate AC as well as DC output. In the rural areas of KERALA where electricity is a major problem, such Gensets can be handy.

Moreover a wide range of advertisements to reinforce the customers that they made a right choice can help the company to retain their customer satisfied.

CONCLUSION:-

By studying the every aspect of the product and rural market in KERALA, the following conclusion can be drawn:-

Rural market of Kerala is highly potential (higher disposable income) for the sale of GENSETS. HONDA’s offering of a wide range of GENSETS can a positive move towards the acceptability of

products in rural areas of Kerala. A wide range of promotional campaigns by using various communication tools can be effective

to increase the sale of HONDA GENSETS in rural markets of Kerala. A compatible distribution system can be effective and cost savvy, as the transport facilities in

Kerala is better as compare to other states

REFERENCES:-

http://www.hondasielpower.com/products_generators.html

www.census.com

www.constructionweekonline.in/article-6196-generator_business_sees_huge_ market _potential/

http://www.saching.com/Articles/4A-s-of-Rural-Marketing-501.html

http://en.wikipedia.org/wiki/Media_in_Kerala