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Rural India constitutes the heart of India, generating more than half the national income. According to the National Council of Applied Economic Research (NCAER), with about 74% of its population living in its villages. India has perhaps the largest potential rural market in the world. A potential of 742 million rural consumers live in 6,38365 villages across India. Rising incomes, improving infrastructure, and favorable government policies offer huge potential for rural marketing.
The Green Revolution has in turn, brought a socioeconomic revolution in Indian villages. On account of the green revolution the rural areas are consuming a large quantity of not just the essential commodities but premium products as well. The younger generation in rural areas is now spending more on personal care and grooming products.
The above data [table 1] indicates, the Indian rural market with its vast demand base, offers great opportunities to companies. FMCGs demand in India nearly 53% comes from the rural market. For consumer durables the figure is 59%, these results has evidently helped, going by the significant share contributed by rural areas to the total revenue of several leading consumer product companies. [Table-2]
Rural markets are already proving vital for companys growth, clearly indicating that these markets can not be ignored by big players. Industry analysts have projected that urban households will grow by 4% while their rural counterparts are expected to grow 11% by 2009-10, implying that if the rural income rise by 1%, then the spending power of consumers will increase by about Rs.10,000cr. According to FICCI, by the end of 2025, rural consumption is expected to nearly three times of what it is today. There is no denying the fact that Indian market is the fastest growing market in the world and the fact is that about 60% of the market considered market is yet to turn into a real market. rural
From this above data one can analyze the economics of cost involved in rural distribution coverage.
the financial, structural, economic and social aspects are addressed in a holistic manner. This is possible if these areas are supported by adequate funds, equipments, infrastructure and education. Indian consumers are poor but not backward. The future lies with those companies who see the poor as their customers. Companies should focus on creative solution and product engineering to reduce their costs and offer tremendous life time value to the Bottom of the Pyramid customers. Effective rural marketing is one and only solution to reach the BOP segment.
flash lights by the rural customers. Strategy: digital convergence at the bottom of market
Case 2 : LG sampoorna TV
LG Electronics launched a customized TV sampoorna. A more important aspect of customization is to make TV set which can appeal to local needs, it facilitated on screen display in vernacular language like Hindi, Tamil and Bengali. selling 1,00,000 sets in the very first year. Strategy: thinking locally, succeeding globally
Suggestions:
Innovative product designs and packaging. Avoid the marketing myopia, which means the costumer will have the same need but will want the new product. Application of value engineering, which means costly metal being replaced by cheaper reinforced plastic. This technique does not sacrifice the functional efficiency of a product but lower the product price. Using chinese product design strategy and raw material. Be care full on product duplicates and using security features. Marketers must often understanding rural customers needs and aspirations even better than customers themselves do and creating products and services that meet existing and latent needs, now and in the future. A fair amount of research is required to understand the latent needs and desires of rural customers and provide suitable products.
Rural markets are low price high volume growth markets. The rural markets being intensely price-sensitive in comparison to urban markets, reaching at a lower cost is a major challenge.
Case 1: Nirma
Nirmas yellow detergent powder- a mass- market Phenomenon. Nirmas low price policy has penetrated into the deepest rural markets in India. Strategy: value- for- money
Case 3: Mc Donalds
The Indian customers seek high value for every rupee spent . so Mc Donalds has been highlighting the Happy price menu- Rs. 20 to shackle entry barriers appeal to Indian customers. Strategy: highlighting the value being delivered for a small . price.
Suggestions:
Use backward and forward integration. Using value-based pricing strategy . That means fixing of price, starting with customer and end with product. Use psychological tricky pricing strategies. That means method of odd number pricing etc. Effective total quality management is helps to low price high quality product.
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Companies should focus on creative solutions and product engineering to reduce their cost. Second, the company can design basic models minus frills to save cost.
Case 2: Coca-cola
Coca-cola ad thanda matlab coca-cola caught attention of the rural consumers so much. Aamir khan playing foot sic with village bells. Strategy: Using a renowned celebrity from in rural background
Case 3: Godrej
Godrej uses radio to reach to the local people in their language and push its soap in interior and remote areas.
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Suggestions:
Provide social outlet campaigns, the outlet provide free to any one, what brand they choose. Its creates a trust factors to the consumers. Be care full on retail margins other wise they promoted local brands. Face-to-face below the line touch, that means feel and talk mode at heats, melas and mandis. To capture the local sprit in the communication. Using local language. Patience is the name of the game. That means a rural consumer is not in a hurry and you can take your time in communicating the message. Developed a website, which gathers valuable feedback from satisfied customers and also display the total amount saved by consumers with the product impact. World-of-mouth communication strategy works better in rural markets as these markets enjoy limited reach media. Once people become familiar with these products, they would perceive them as necessities.
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distribution structure involves stock points in feeder towns to service these retail outlets at the village levels.
Case 2: HUL
Hindustan unilever, the pioneer and a large player in Indias FMCG market. HUL is the first company to step into the Indian rural marketing. HUL launched operation stream line, distributed HULs products in villages using unconventional transport like bullock carts, tractors and cycles. Today HULs products touch the lives of two out of every three Indians. Strategy: HUL product can reach a place, where you can not reach
Suggestions:
Best solution for enter into the rural markets, that is the company should start the production in rural areas. Then it is easy to distribute and also its increase the local sprit. Tieup with public distribution system (Fair Price Shops). In our country, the public distribution system is fairly well organized. The revamped PDS places more emphasis on reaching remote rural areas of hills and tribaks. So FMCG companies collaborated with the PDS to utilize its well-established sales and distribution network in the rural markets. Develop rural shopping malls. Rural shopping malls act as a two-way supply chain. While selling goods to the farmers and also buy their farm produce. Use a combination of wholesalers and retailers to penetrate every nook and corner of rural market. Going paces ahead of small packs and sachets the corporate world is now coming out with Rural Malls and Self help groups as channel partners to promote consumer products in rural India. Unilever and ITC are working towards 14
increasing their visibility and reach through marketing - cum social responsibility projects such as shakti and e-choupal respectively.
Conclusion:
A silent revolution is sweeping the Indian countryside. It has compelled marketing whizkids to go rural. The marketing battle fields has shifted from the cities to the villages, but in this battle both consumers and companies are winners, it is a win-win situation. Go Rural seems to the latest slogan. Stop depending on research number. Go and meet up with a million villagers and ask what they want. Create the products and services that is relevant to their needs. Thus, it is quite clear value-for-money offerings companies could convert luxuries in to necessities for the Indian rural consumers.
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