Rural markting ajahar husain NDIM

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RURAL MARKETING IN INDIA

M3 GROUP 704/10/2023 2

Presented To-

Mrs.Veena Kumar

AJAHAR HITESH

AMRITAABHISHEK

JAYATI

HARSHITMonday, April 10, 2023

3

Presented By-

Introduction

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Rural marketing is a function which manages all those activities involved in assessing Stimulating and converting the purchasing

power into an effective demand for specific Products and services, and moving them to the people in rural areas to

create satisfaction-and a standard of living to them and thereby achieves the goals of the organization.

Rural India

Population density > 400 / sq km

75 percent of the male working population is engaged in agriculture

No municipal corporation / board

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Rural market is larger than Urban Market in India.

Total size of the Rural Market for FMCG is Rs.41550

as compared to Rs 37130 crores in Urban areas.

Contd…

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Socio-economic position

• Bounded by tradition, culture, religion & community

• 60% of rural income is from Agriculture

• More than 50% rural households have monthly income < Rs 25,000

• About 14% have income > Rs. 50,000

• In recent years, 70% rural households have started saving/investing their income

Posi

tion

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In India, total potential of 3,800 towns and 6,27,000 villages.

Distribution network reached 300,000 villages.

Dilemma was how to extend its network to the remaining villages in inaccessible rural areas.

Penetrating new markets would be challenge.

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Need of Rural Marketing ?

Phases in Rural Marketing

1 Time Frame Key Events &Trends ( Pre 1960’s )

Marketing rural

products in rural areas

Agricultural inputs in

rural areas

“Agricultural marketing”

Farming methods

were primitive and mechanizatio

n was low

Markets unorganized

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2 Time Frame Key Events &Trends ( 1960s to 90s)

Green Revolution

Mahindra and Mahindra, Sri ram fertilizers and IFFCO emerge rural products were also marketed through agencies like KVIC

Contd…

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( 1990s to Present)

3 Time Frame Key Events &Trends

Demand for consumables and durables rise in

Rural areas Companies find growth

in urban markets stagnating or falling

Contd…

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Reasons for growing Interest

The large number of consumers

Largely untapped markets

Market size

Potential increase in income

Purchasing power accessibility of markets competition in Urban markets

17

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Innovation

Personal care appliances

Improved marketing strategy

Product dual benefits

Rise in organic products

Teen’s market

Key trends

18

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Brand image

Small unit packaging's

Low priced packaging's

New product designs

Utility oriented products

Product strategies for Rural Mrkets

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Availability Affordability

Acceptability Awareness

4 A’s approach of Indian Rural Market

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Hindustan Unilever , has built a strong distribution system which helps its brands reach the interiors of the rural market.

Even stockiest use auto rickshaws, bullock-carts etc.

Availability

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Some companies have addressed the affordability problem by introducing small unit packs.

Most of the shampoos are available in smaller packs.

Fair and lovely was launched in a smaller pack.

Colgate toothpaste launched its smaller packs to cater to the travelling segment and the rural consumers.

Affordability

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Acceptability

LG electronics. In 1998, it developed a customized TV for the rural market

It was a runway hit selling 100,000 sets in the first year. Because of the lack of electricity and refrigerators in the rural areas

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Coca-Cola uses a combination of TV, cinema and radio to reach 53.6 per

cent of rural households.

It doubled it’s spend on

advertising on doordarshan, which alone

reached 41 % of rural households.

It has also used banners, posters

and tapped all the local forms of

entertainment.

Awareness

Levels Of distribution channel

Producer

Consumer Segment2

Retailers Retailers

Distributors

Consumer Segment 1 Consumer Segment 3

Zero Level One Level

Two Level

Distribution channel in Rural area

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Special Campaigns

During crop harvest and marketing seasons it is beneficial to take up special promotion campaigns in rural areas

For example, 3 lakh people visited the annual Mela at Navchadi for 7 days in Meerut.

The largest such Mela is the Maha Kumbh Mela which is visited by an average of 12 crores people.

It has been observed that melas are fit to generate product exposure, package familiarity, brand reminder and word of mouth.

Uttar Pradesh 10.380

Bihar

4,993

West Bengal

4078

Jharkhand

3,996

Maharashtra

3758

States with maximum Haats

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58%21%

7%

5%

5%4%

Sales

Agriculture product Manufactured GoodsProcessed GoodsHandicraftsForest goodsServices

States with maximum Haats

Confectionary sal

t

Biscuits

Detergent

Face

cream

Talcum powder

Toothpast

e

Bathing s

oap

Sham

poo0

102030405060708090

100

Brand awareness for specific FMCG products sold at HAATS Aw

aren

ess

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17%

16%

15%14%11%

10%

6% 5%4% 3%

GroceriesToilet soapsDetergentsTeaShampooBiscuitsMatchboxCosmeticsOral careMosquito repellent

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FMCG Products preferred at Haats

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Under developed people

Low levels of literacy

Media for rural communication

Multiplicity languages and dialects

Low per capita income

Logistics storage ,handling and transportation

Problems in Rural Marketing

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FOOD ITEMS

NON-FOOD ITEMS

12268

Value of Consumption Per Month in Rural India in Rupees

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Rural Market Share

PRODUCT CATEGORY % SHARERadio 80.89

Bicycle 77.83Wrist watch 75

Fan(table &ceiling) 60Washing cake 66.88

Cooking oil 65.92Tea 59.85

Mobile 51.12Color TV 36.68

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Market share of FMCG

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Out of 20 million

rediffmail signups 60%

are from small towns.

The 24 million Kisan credit cards

issued in rural India.

Out of 2 million

BSNL mobile connection , 50% are in rural India.

In 2008-11 LIC sold 65%

of its policies in rural India.

Rural Market Share in Services

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The Rural Consumer

The Rural Demand

Other Aspects

Rural Market Environment in India

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Rural population is about 73% of the total population of India

2011 census the total rural population amounts to 80 Crore

12 Crore households – 70% of the total

Urban Population is spread over 3,200 cities

Rural population is spread across 6,27,000 villages

The Rural Consumer

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Rural India has a literacy rate of 28% compared to 55% of the whole country

There has been a change • Increase in Income• Growth in Education• Greater Media

Penetration• Marketers efforts to

reach and capture the rural market’s

Lite

racy

Lev

el

Life

styl

e

Changes in Rural Area

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Why people prefer Urban Market

Customer mindset:

low credibility among rural customers

rampant availability of

fake ,look alike products

FMCG sector loss of 18

billion each year due to

fake products

The range available at the

local retail stores is also low because people go to

towns.

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Rural market becomes attractive to corporate

Rural Demand is growing rapidly

Purchasing power has increased

Cut Throat competition in the Urban Markets

Rural market is largely unexplored and untapped

There would be opportunities for new entrants as compared to urban population

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Companies into Rural Marketing

COMPANY Rural Sales (% of total)

HUL 50

Colgate 50

Godrej 30

Cavinkare 33

Marico 25

Cadbury 25

Cipla 18

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Place of Purchase

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

grocery apparel durables farm input

own village shop

mandi

nearby village

city/urban market

haat mela

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Establishment in 1929

1st brand Parle glucose and Parle Monaco

35% share of total biscuit market

15% share of the total confectionery market

70% share in glucose biscuit

Parle has largest such manufacturing units in India

Size of the biscuit industry Rs 8,000 crore

Company Profile of Parle G

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One of the first food offered to

kids

Nutritional value

It assumed as sick

man’s diet in earlier

days.

one of the most loved

fast food for every age

group

Biscuit’s are easy to

carry , tasty to eat ,

cholesterol free and are reasonably

priced .

The Biscuit Industry

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30%

70%

Un - organized sector Organized sectors

Biscuit Industry Profile

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2007-08 2008-09 2009-10 2010-110

2

4

6

8

10

12

14

16

18

Chart Title

Annual Production of Biscuit in India

Rural market – 70%-85%

Urban market-

50%-65%

India – 1.8 Kg /capita

South-east Asian

countries – 2.5 kg – 5.5

kg

USA – 7.5kg/capit

a

Rural-Urban Penetration of Biscuits

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Biscuits for kids

Biscuit with tea

Biscuit for guest

Mini breakfast

Snacking Habits in Rural India

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Britannia Tiger and sun feast

Locally manufactured

biscuits

Unpacked baked items (e.g – khari ,

and rusk

Freshly fried item (eg: Vada

pao , bhaji , samosa)

Competitors of Parle G

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Strength of market , size of market

Income in rural India have improved

dramatically

The rural markets are growing at about two time faster pace then

urban

Reasons for opting Rural Market

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Rural marketing

Marketing Strategy

Personal Selling

Direct selling

Distribution strategies

Feeder Town

Promotion Strategies

Near market

Familiar shows

All media

Marketing Strategy of Parle G

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SWOT Analysis of Parle G

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Parle Brand

Product Range

Distribution Network

Strengths

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Dependence on retailers

Dependence on Parle –G (flagship brand)

Stores for displaying diversified Parle

Weakness

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Estimated annual growth of 20%

Increasing demand for sugar free

Using advertising aggressively

Opportunities

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Increasing distribution cost

Local bakery products

Entry of various new entrants ITC etc. .

Threats

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Vodafone came to India in 2005

Vodafone was officially launch on 27th september 2007 in Mumbai

Owned : Vodafone and Essar

Market Position : At the 3rd position

Connectivity : Presence in 16 telecom sectors

Call Rates : very cheaper

Company Profile

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Mission capturing the potential of mobile to bring socio-economic

Vision To be one of the most trusted companies in the

markets

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Passion for customers

Passion for their people

Passion for results

Passion for the world around

them

Beliefs and Values

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Total number of Vodafone Essar Subscribers : 14,15,19,840 i.e. 23.63%

of total 59,87,79,674 Indian mobile phone users

Subscribers of Vodafone

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Competitors

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Laal dukaans (red shop)

Project pappu

‘Gappa Goshti’ scheme

Vayalum vaazhvum (chennai)

Mobile Banking (with HDFC bank)

Initiatives in Rural India

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HDFC Bank, Vodafone India launch mobile

banking product for rural coverage (Jaipur)

Vodafone ties up with Handy

go to launch IVR service for rural

India

Vodafone has tied up with mobile VAS

company Handygo

Technologies

To launch IVR based service called “Behtar

Zindagi for rural India.”

Contd…

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Vodafone Airtel Tata Docomo Reliance Idea Cellular

Experience storesMini stores

465 681 348 217 369

(Urban and rural) 7125 1151 2497 1827 1105

Total 7590 1832 2845 2044 1474

Source: Vodafone

Project Pappu’s Retail Footprint

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Displays board

Schemes to distributors & retailers (commission & gifts on achieving target sales)

Tie up with local panchayat & use flash mobs (street play) on

the theme of Vodafone message

Sales Promotion in Rural

38%

62%

RuralUrban

Market Share of Vodafone

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SWOT Analysis of Vodafone

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Popular cellular service provider in India

Largest Telecom operator in the world

High brand visibility

Strong advertising with ZooZoo concept

Strengths

Price competition from BSNL and Airtel

Untapped Rural Market

Weaknesses

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Fast expanding cellular market

Latest and low cost technology

Research and development of new mobile technologies

Opportunities

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New entrant's low price offering

Saturation point in Basic telephony service

Mobile Number Portability

Threats

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Few Companies

Taking Initiatives

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Hindustan liver Limited is on the top with its successful rural marketing projects like ‘Project

Shakti' and 'Operation Bharat'.

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Coca cola invested us$ 1 billion 27 owned & 17 franchise operations using celebrities 30% revenue from rural sector

“ Thanda…” campaign different promotion in south

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Dabur In villages promote its hair oil as a substitute for mustard oil which village folks

generally used. In rural UP & Bihar

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Sonata launched project Swades, aimed at changing people's mindsets and making them

aware of the value of time in rural India

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Medimix focused brand-building initiatives—like participation at community events such as “melas” (village fairs),“haats” (markets), street theater, van campaigns, and

puppet shows

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Tata salt story begins in 1983“Namak ho Tata Ka , Tata Namak”15% spends on promotion

2004,“deshkanamak”television wall painting calendar in rural area

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Colgate incorporated in 1937 ,enjoys 50% market share “Colgate fresh energy gel” use of mass media opinion leader

strong distribution networkIn rural area

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Nokia

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References www.rmai.com www.tata.com/company/Articles www.financialexpress.com/news/rural www.colgate.co.in www.dabur.com www.cholayil.com www.trai.co.in

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