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RURAL MARKETING STRATEGIESa) Segmentation of Rural Market-India
has about 6,38,000 villages,50% of them are very small having
population of less than 500 persons with limited purchasing power
with many not having a single shop.The next category of villages
are having population between 501 persons to 2000 persons and are
numbering around 2.5 lakh villages.These villages are having around
five shops each.But the companies should focus initially on
villages with a population of 2000 or more which are more than
60,000 in number.FMCGs companies can cover 1,00,000 villages by
appointing 2000 stockists in towns of population of 20,000
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Each and the stockists can conveniently distribute products to
50 locations around their towns.The company can:-Focus on select
markets-Focus on select makes-Focus on select villagesb)
Competitive Strategy-Companies interested in entering rural market
can examine their strategy on the conceptual Michael Porter's Five
Force model to develop strategy.i) Supplier- A company should have
good suppliers who can provide good quality material or ingredients
at a very low price.ii) Customer Power- The rural consumer,due to
increased liteacy,advent of television,promotional efforts &
increased contact with urban markets has become knowlegeable about
products.Another primary customer,the retailer has a very high
bargaining power in the rural markets.But he only stocks few
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brands per category as the rural consumer accepts whatever is
offered & is not very choosy.The bargaining power of the
retailer can be neutralised through effectively executed
promotional & brand building efforts ,to create customer pull
which results in the retailer stocking a particular brand.iii)
Potential Entrants- Companies operating in the rural market must
raise entry barriers by being the first entrant in the market &
building good relations with the retailers so that the chances of
new entrants suurviving are low.Usually new entrants,especially
local & regional players ,offer lucrative terms to the
retailers like more credit period,low prices and margins.iv)
Substitute Products- Due to high level of illeteracyy,low awareness
& dependance on retailers,counterfeiting is prevalent and cheap
imitations flourish.Companies have to ensure through
packaging,promotion and brand identity that rural consumers are
educated about
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Product.Competiting with different substitutes for a product
requires a special approach and very different promotional
message.v) Competitors-The brands available in the rural market
rarely compete with each other and it is through the personal
influence of the retailer, that a particular brand is accepted by
the consumer.c) Product Strategy-Marketers have to undertake
product mix modifications to suit the variables of rural
markets.Escorts was the first company to position its
motorcycle'Rajdoot' as a rugged vehicle for the rural terrain.i)
Understanding of the Valued Product: Value consciousness is a big
driver for the rural market and are extremely aware of the equation
of price,quality and image.eg-Britannia came with the
concep,"Swasth khao tan man jagao".Thus Britannia was shown as a
brand standing for healthy food.Videocon "washer",a washing machie
without a drier,was launched specifically for rural markets.Thus
stripped down
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Down versions of the urban products,which have features that are
as per needs of the rural consumers without the frills & are
priced low without compromising on the quality are the ones that
are more likely to succeed than the typical models that are
successful in the urban market.ii) Packaging: The
affordability,storability,display ability,availability along with
the usage are the reasons for rural consumers to choose smaller
packs. When brand loyalty is difficult to achieve & brand
identification is a big challenge in face of fakes &
counterferits,innovation in packaging becomes extremely
critical.These innovations in the form of pack sizes and colors act
as differentiator & can create demand-pull in the mind of the
consumers.iii) Branding Strategy- In packaged goods
industry,reduction of the number of brands & creating a master
brand to serve many segments by product variety or brand extensions
is a strategic options adopted by many
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players.The high cost of building many brands is significantly
lowered if only few master brands have to be developed and promoted
for different but related products.iv) Emotional Surplus Identity-
ESI is a concept that differentiates a corporate in a market of
uniformity.This analytical concept developed by Shining,equates a
corporation to a tree that aligns roots(corporate value) and
trunk(process) to deliver fruits(the deliverables of an
organisation)eg-Tata Salt-"Maine desh ka namak khaya hai" .v) Logos
& symbols- As most of the rural consumers do not know English
& most of the products are labelled in English,the highlighting
of logos & symbols can help them to identify the brand for
their final selection.555 soaps,Monkey brand toothpowder,Gemini Tea
with elephant,Tortoise Mosquito Coil,Engine Mustard Oil,Ganesh
Mustard Oil are examples of using symbols and animals as brand
identifiers.
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d) Pricing Strategy- Companies must follow the strategy of
penetration pricing with backup of a good quality product to be
successful in the rural market.FMCG companies can cut cost to
maintain the price points through reducing the net weight of the
product and doing away with freebies and promotions.Constant
efforts should be undertaken to reudce capital investments
throughoutsourcing,manufacturing,streamlining supply
chains,actively managing receivables and monitoring of performance
of channel partners.e) Communication Strategy- To communicate
effectively with the rural audience,it is important to understand
the aspirations,fears and hopes of the rural consumers ,in relative
to each product category,before developing a communication
package.The organisation has to think locally.It is very important
to invest in developing the specific & right communication
package aimed at the rural audience,if an organisation expects to
build a brand,in the rural market.
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Some of the promotional strategies for the rural markets are
classified here under:i) Education Instead of Promotion: The basic
promise for communicating a promotional mesage for the rural market
is that it has to be essentially an educational message.Rural
consumers has to be conveyed about how the benefits delivered by
the brand outweigh cost that he is going to incur.The benefits that
has to be projected should be in accordance with the needs &
lifestyles of the rural consumer.The rural consumers entering the
market for the first time for many product categories need to be
guided with regard to usage & benefits of the products also.ii)
Customisation of the Promotional Message: Using aspirational urban
looking model but using simple and direct communication which is
not complicated,works well with the rural audience.The anchors
conducting demonstration in rural areas need to be trained in to
speak in the local language or dialect during
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road shows so that they can connect better with the
audience.Tricky,clever,gimmicky or even suggestive advertising is
not clearly understood by the rural cosumer.iii) Regionalisation of
Advertisement: An in-depth study of the mind-set of consumers of
each region & for each product category has to be
undertaken.Perceptions,traditions & values vary from state to
state & from region to region within a state.eg-Philips while
developing a rural campaign for their radios,for southern
India,developed apunch line "Enga Veetu Super Star",meaning
"Superstar of my Home" basing on Rajnikanth.For AP,the punch line
developed was "Maa Inty Mega Star" meaning Megastar of my Home
meaning Chiranjeevi.Philips also used the photograph of a village
girl besides the range of radios & transistors so that the
rural consumer could identify themselves with the range.
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iv) Understanding Role of Mass Media: Mass media is the most
favoured medium for promotional activities. TV is the most
preferred medium with Doordarshan being the network
preferred,because of its wide reach in the country.According to the
National Readership Survey,the print media reaches about 23% of
rural consumers in India,with 36% having access to TV.The mass
media reaches about 57% of the rural population.v) Outdoor Media
Options:a)Wall Paintings- Retailers have wall paintings of their
shops,walls & name boards and the paintings stay as long as the
weather allows it to.b) Video Vans: Promotions using video vans
create a lot of word of mouth publicity for a brand in a
regionAlthough,these vans have a very good potential to deliver the
intended comunication,they are costly to hire &
maintain.Thus,only the large organisations can afford these
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vans. The challenge is how to modify the audio-visual
promotional message according to the different languages &
variations in the dialects.vi) Unconventional Platform to Promote
Brands: a) Mandis: These terminal markets have been set up by state
governments for procurement of agri commodities from farmers.These
markets are generally located in agricultural area with population
of more than 10,000 on an average and cater to 1,36,000 people.Cash
rich farmers can be directly contacted by setting brand stalls in
mandis.b) Haats: There are 42,000 haats each catering to the daily
needs of 10 to 20 villages.The number of visitors on an average per
hour is 4,500.c) Melas: There are about 25,000 melas in India and
90% are religious.
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Melas provide a platform for communicating with rural masses.The
female population of these villages who do not often visit nearby
towns are present in large numbers in these melas.Melas work best
for introducing new brands & building brands through the
organisation of events at the venue.Some of the widely visited
melas include Kumbh Mela at
Haridwar,Allahabad,Ujjain,Nashik,Sonepur Mela in Bihar &
Pushkar Mela at Ajmer,Rajasthan.d) Mills: It was found in a survey
by MART of 24 villages across UP & Punjab that around 200
tractors visit a mill in a day during the peak season.This gives an
opportunity to target the farmers as they are relatively free just
waiting for their turn, will be receptive to the demonstrations
being given & may participate in interactive sessions.e)
Pilgrim Sites-f) Rural Meets- Nearly one lakh spectators turn up to
watch
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the rural sports at Quila Raipur village for three days in
Punjab.Rural games & tournaments are largely popular in rural
areas & are attended by the rural population in large
numbers.These tournaments can be sponsored at a reasonable price
& can be utilised as a platform for brand building &
demonstrations.The company's products can also be given for
increasing brand awareness.g) Primary Health Centres:These centres
are good platforms where health & hygiene based products can be
sold.e.g.- Swasthya Chetna Campaign by HLL in rural areas for
promoting washing of hands would have directly or indirectly
promoted sale of Lifebuoy in the rural areas.vii) Alternative Media
for Rural Market: In rural India,there are two distinct
segments:Rural rich & the middle class with
aspirations,exposure to
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mass media,with a lot of purchasing power.Vast majority of
illiterate masses who are poor & cannot be reached easily
through mass media.For reaching the rich class,conventional mass
media can be utilised.For reaching the less privileged
class,unconventional masses like nautanki,jatra,villupattu can be
utilised in support of conventional mass media.viii)Folk Media- a)
Puppetry- In rural India,puppetry is an avenue for entertainment
& creative expression which can act asmeans of social
communication & vehicles of social transformation.eg-LIC used
puppets to educate rural masses about the organisation in the
villages of UP,Bihar & MP.The number of enquiries at the local
office of LIC immediately following the performance as compared to
the normal frequency was found to be considerably higher.b) Folk
Theatre- This has been used as an effective medium
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For popularising social issues and by the government for
informing about government sponsored projects for the rural
population.c) Nautanki- It is a folk dance drama which is performed
in Uttar Pradesh on a make-shift stage & is a prime
attractionin the village fairs amongst all age groups because of
its narrative style & rustic flavour.This media providescaptive
audience & marketers can use it as a platform for promoting
their products as the rural audience believes that performers are
more credible than conventional media.d) Tamasha- It involves dance
drama & interactive session with the audience which comprises
of only males.Therefore,products meant for males can be effectively
promoted.x) Innovative & Special Promotion Campaigns in Rural
Market- Some of innovative promotional campaigns are:
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a) The scarecrow in fields can act as an advertising campaign.b)
The mid-wife can be employed to promote baby care products.c)One on
One Contact contact programmes provide an opportunity to
demonstrate the product & can induce trial.Examples: TAFE
Tractor launched a direct campaign to strengthen the bond with
existing customers through direct contact exercise in 44 centres in
9 states.It resulted in sales increasing by 12% after one month of
campaign.-When MRF decided to introduce bullock cart tyres with
nylon,it decided to call it " Pehelwan Chhaap Buggy Gaadi
Tyre".They organised nylon cord-breaking contest for the
'Pehelwan'.As nylon threads do not break,it effectively
demonstrated that MRF tyres comes with strength of nylon that even
the pehelwan cannot break.-Ogilvy Rural conducted promotion
programmes for 'Breeze',a HLL brand which had Rose fragrance &
was meeting
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competition from Nirma Rose.To prove that Breeze contained
roses,the company employed a effective presentation.In the interval
of folk performances,it wheeled in an outsized bar of 'Breeze' made
of thermocol on the stage,and the bar was smashed.A heap of roses
fell out of the bar,signifying that the soap was indeed filled with
roses and the message was conveyede) Demonstrations: may be :Method
Demonstration -On Dalda's launch the company organised frying of
pakoras on street corners to convince people that the medium can be
used for frying.Reckitt & Coleman educates customers about
hygeine aspects of Dettol vis-a-vis haldi.A sugar cooperative in
Kolhapur district had Hero,TVS & Kinetic give a competetive
demonstration so that an order for 400 mopeds could be placed.f)
Targeting Opinion Leaders- Rural consumers take a buying decision
after discussions with the opinion leaders.
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The following play the role of opinion leaders for advising on
various product categories:Successful
Farmer/Agri-Extensionworkers/Village Leaders-------- For Agri
InputsVillage Youth visiting the city---------For lifestyle
productsSchool Children------------For personal care
products.eg-Asian Paints launched its Utsav range during the
Pre-Diwali season.The salesman selected the opinon leaders in
villages and painted the village post office,the residence of the
Pradhan to demonstrate that the paint does not peel off.Salesmen
organised meets at the local dealers,where village painters were
invited.
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f) Distribution Strategy :The marketer can adopt the following
strategies to make their products acceptable to the rural market.i)
Ensuring Reach & Visibility :Since a retailer can't afford to
keep many different SKUs,it is critical that a company's product
should be first on the shelf and develop a privileged relationship
with the retailer.eg-Maggi noodles was the first to reach the
shelves and is still the market leader.ii) Reaching upto
Mandis/Towns/Semi-Urban centres: There is a perspective that if the
distribution reaches even upto the feeder markets,it automatically
finds its way down to the rural market.Iii) Targeting Larger
Villages:iv) Understanding the Peak Season:As peak seasons are at
different times in different parts of India,organisations can focus
their distribution energy for that period to that particular
region.Missing these times for a particular region is almost y
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equivalent to missing the year in that rural market for many
product categories. The rural retailer considering the peak season
could be willing to stock more brandsThe promotional campaigns at
local & regional level can be customised according to the theme
of the festivity.v) Delivery Vans: In order to move products in
rural areas in a cost effective manner,the organisation and
distributors can make use of rural makeshift transport vehicles
known in different areas in different names.They are very cost
effective and are very rugged to handle the excessive wear and tear
of the rural roads.These vehicles are very popular in the states of
UP,Punjab & Haryana and can be available to companies to
transport their products in remote villages at a lower cost.Such
vehicles were used effectively by the rural sub-stockists of
Coca-Cola to distribute the soft drinks in the rural market.
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vi) Collaboration for Distribution: Cost of setting up of a huge
retail network on one's own has its own intrinsic problems like
capital investment,close monitoring of the channel partners and
allied problems.Therefore,companies collaborate to maintain
distribution channels.eg-P&G had tie ups with Godrej,Marico
Industries and Nirma for distribution of its brands. These tie ups
are of immense benefit for both the organisations as one gets an
immediate reach to million of retail outlets & the other can
leverage its distribution networks over larger range of products
& earn better returns on existing networks.Development of joint
distribution infrastructure by non-competing companies can reduce
the cost of distribution per organisation & these can make the
operation viable.eg-JK Dairy employed this strategy for
distributing milk powder satchets through three non-competing
companies.
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vii) Sales Women Network: eg-Project Shakti of HLL & TTK
group have employed women sales personnel for promoting their
products.viii) Converting Unorganised Sector Manufacturers into
Distributors: Small or tiny scale manufacturers are finding it
difficult in face of intense competition from domestic &
international products to survive.Organisations like Exide are
attempting to convert these small manufacturers as dealers in the
unorganised sector in Punjab & Haryana since they have good
knowledge of the territory & have good sales
network,credibility & relationship with the retailers &
consumers.ix)Company's Own Distribution Network:Some organisations
are contemplating & testing their own distribution network in
order to promote their brands directly to the retailers and
consumers in the rural areas.eg-Rasna Enterprises has built such a
network in the rural areas of
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' viUP,Rajasthan,Maharashtra,Gujarat & TN.Dealership
Education: The decision to buy a product is made by the head of the
family who has greater awareness about a product available in the
nearest town.The dealer can influence the decision maker.x)
Continuous Availability of the Brand: The retailer can influence a
consumer in opting for another brand ,if their preferred brand is
not available.This trial may result in the consumer shifting to the
new brand and there can be wider demand for the new brand as the
promotion spreads through word of mouth publicity.This will make
the retailer stock the new brand and drop his previous brand
resulting in the established brand regaining its previous
position.Therefore,the organisatins need to ensure that their
brands are available at the retailer's shelves on a regular
basis.xi) Quantity Discount for Rural Stockists: The distributors
rural stockists have to be provided with bulk discounts based
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on the quantities purchased by them which will motivate them to
ensure that the products are marketed intensely in the rural
market.For stockists not stocking products in larger
quantities,they can be provided with gifts or lucky coupons based
promotions.g) Hiring Strategyh: The whole process of tapping the
rural market can be made effective,if the company hires
professionals having technical rural management qualifications.The
following characteristics are essential requirements for a
professional to effectively cater to the rural population.i)
Fluency in Local Language : The salesperson selected should have
fluency in the local language so that they can connect with the
local population.h) Social Strategies: Some of the social strategy
initiatives which could be adopted be the corporate world are as
given below:
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i) Encouraging Primary Education in the Villages :to This can be
a key to influenceint people's behaviour.eg-HLL has introduced such
an effort in Maharashtra and believes that this step will result in
improving of sanitary habits & will create awareness about
personal hygiene & cleanliness which will have a direct impact
on their sales.ii) Employment of Rural Youth:Provision of
employment opportunities in sales & distribution in rural areas
to local youths will increase the goodwill & image of the
company in the eyes of the villagers.The rural youth will be in a
better position to sell the product after undergoing a sales
training programme.