Rural Marketing 2

Meaning of rural marketing: It is the process of developing, pricing,promoting,distributing rural specific goods & services, leading to exchanges between urban and rural markets, which satisfies consumer demand & also achieves organizational objectives.(Ramkishen.Y)

It is a process which starts with a decision to produce a saleable farm commodity and involves all aspects of market structure….includes pre and post harvest opeartions,assembling,grading,storage,transportation and distribution.(National Commission on Agriculture)

Features of Indian rural Market: “The rural mindset is open to

consumption of newer, more contemporary categories, as a result driving consistent growth”(Prashant Singh,VP,Nielsen India)

Large diverse & scattered market Agriculture is the major source of Income

Urban market saturation Rising disposable income of rural consumers

Change in standard of living Infrastructural facilities

Problems of Indian rural Market: Factors contributing urban-rural divide Low literacy rate Understanding the psyche of the rural consumers

Sale of fake & spurious products Traditional outlook Lack of proper infrastructure Logistic problem Seasonal demand Communication gap

Question for Evaluation:

Assume that you are a manufacturer of packaged food product like biscuits and bread. Looking at the rising opportunity in rural markets, you want to make an entry into these markets. Clearly identify what are the challenges you are likely to confront in marketing your products in rural markets.

Note: Answer within 200 words.

Suggested Hints: "The rural consumers are also looking for quality. They will not stay with a Parle-G or Tiger (Britannia's glucose biscuit) for life. Agricultural income is growing pretty rapidly and consumers are looking to upgrade for better consumption experiences,“-Varun Berry, India business head and executive Director at Britannia.

Britannia Industries, the bakery and dairy arm of the Wadia Group, is looking to tap in to India's rural consumption story with its portfolio of value added biscuits and cookies.

Over the last five years the share of glucose biscuits, a segment that has traditionally found favour in rural markets, has fallen from 35% to 15% of Britannia's biscuit sales. The $1-billion company now plans to push its slightly more premium offerings like Good Day cookies and Britannia Marie brands in to the country's hinterland in value packs of Rs 5.

Accordingly, the number of salesmen has been increased and each person has been given a smaller portfolio (around 160 of its 320 SKUs) of products so that they can focus more.

In the rural market, Britannia will focus on expanding to villages with populations of 5,000 people. “We might explore villages with populations of up to 2,000 people sometime in the future,” Berry said.

Strategy adopted by ITC: ITC Foods, the fastest growing business of cigarette

maker ITC Ltd , is aggressively expanding distribution in small towns and villages, where it trails rivals such as Britannia Industries Ltd and Parle Products Ltd . ITC Foods, which makes Sunfeast biscuits and Bingo chips, expects increased distribution in rural areas and new product launches in biscuits and snacks to help it grow sales by 28-30% this year, chief executive Chitaranjan Dar.

They created 3,000 stock points instead of 1,000 stock points earlier.

Increasing distribution in rural areas is important for ITC Foods, which likely accounted for over 11% of ITC’s sales last year

Case Study session:Points to be noted:At least 3 member in each groupSummarized the case and suggested solutions within 500 words10 minutes time to discus followed by interactive sessionWrap up session