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Introduction Key Influencors Strategy

Rural Marketing : an evolving concept Improvement in infrastructure promises a bright future for those intending to go rural. Any macro-level strategy for these markets should focus on availability, accessibility and affordability. Constant scanning and sieving of ideas and plans is essential at all times. Focused attention needs to be paid to market research that goes on to reduce the uncertainly in dealing with these markets since demand is highly price elastic.

Till recently most FMCG companies used to treat rural markets as adjuncts to their urban strongholds and rural consumers as a homogeneous mass without segmenting them into target markets and positioning brands appropriately. However it is beyond doubt that the treat rural markets are not dumping grounds for low-end products basically designed for an urban audience. The winning strategy instead is to focus on their core competency such as technological expertise and to design specific products for the rural economy.

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PRICE Rural consumer is not a miser. He is not simply looking for the cheapest product in every category. He understands and demands value for money in every purchase that he makes. Pricing therefore is a direct function of factors including cost-benefit advantage and opportunity cost. Pricing offered to consumers should be for value and offerings that are affordable. Price sensitivity is extremely high and comparison with competitive prices is common.

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BUDGET Rural consumer does not have a budget problem. He has a cash flow problem. This is because the village folk receive funds only twice a year. At these times, he is capable of making high volume purchases. At all times, however, the unit price is critical and so is the pack size. Because of this, in the lean season when there is a cash flow crunch, marketers need to provide financial products, schemes or solutions that suit the needs of the rural population

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COMMUNICTION
Large proportion of the rural population cannot read or write. Several creative communication media have been used by various companies to tackle the problem of using visual communication and non-verbal communication to reach the rural audience. Getting together with small industries, dharmasalas, post offices or other rural outlets for advertising and marketing purposes can be quite useful. Word of mouth is a big advantage in rural India.

Different target segments require different marketing approach and rural market is no exception to it. Mere extension of urban marketing strategies in rural India will fail unless they are customized to the needs and ethos of rural India. One of the best way to capture the audience is through Event Management to bring a good response. Some of the interesting events are Road Shows, Melas, Street Theatre, Film Shows and so on. Several Agrochemical companies such as Rallis India Limited, Wockhardt and tractor companies like Escort, Mahindras have successfully employed melas, local communication to get higher sales.

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Need based :
When developing products in any category, marketers must identify the typical rural specific needs. Urban products cannot be dumped into rural markets without modifications. The rural audience better receives tailor-made products as the consumers feel empowered and tend to identify with the offering. For instance, shampoos or soaps with distinctive, strong rose or jasmine perfumes are popular with the rural women in South India. The urban women do not identify as strongly with these perfumes.

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Cost effective channels


Direct selling through company delivery vans, syndicated distribution between non-competitive marketers, setting up of temporary stalls in rural melas/haats are successful examples. Use of stockist for effecting direct sales to rural consumers is successfully done by companies like Hindustan Unilever / ITC / Colgate / Godrej. Rural markets/mandis are emerging as the target centers for direct sales.

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POINT OF SALE
Most rural consumers purchase their day-to-day goods is at a kirana or street shop. These small open stalls line the streets , approximately the size of a living room. Consumers purchase everything from bananas to razors at a kirana. There are over 2.5 million kiranas throughout Indias rural towns and villages. Keeping store shelves stocked is one of the main challenges to consumer goods manufacturers in order to reach these local shops and establish a brand presence in them. Companies need substantial amounts of working capital and a large committed sales force

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PACKAGING
Two of the most effective elements of a package designed for rural India include the size and visual communication. Material usage is also another important element for the packaging engineer to consider. Think Small ! Due to the fact that rural Indians have small disposable incomes and very little storage space, one of the most popular concepts has been sachets . By creating a bond with the consumer through the package, companies are able to establish a relationship that encourages repeat purchases.

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VISUAL COMMUNICTION
The rural area is a market where large portions of the population are illiterate. So, when packaging consumer products for rural markets, companies must use prominent logo symbols and logo colors to assure that illiterate consumers will be able to recognize the products Therefore, communicating brand values through the package rather than with words becomes very essential.

Loud bright colors are typically used on packages to differentiate a product from the others on the shelf and to create a lasting impression in a consumers mind

Products and Uses

Before a company considers entering the rural market, understanding the types of products and packages that rural Indians typically use is crucial. Next important issue is Price and Distribution. Partnering with or buying out an existing Indian company, as well as importing from overseas, are all viable ways to get packaged consumer goods into rural India. Another key aspect to consider is how and where to produce and package the product. There are several options which a company may attempt

a) b) c)

Options: Companies can partner with an existing Indian company Buy out a local Indian manufacturer of a similar product, or Import products into India while keeping manufacturing facilities elsewhere.

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Partnering
The first and best option for aligning with the Indian industry is for the multinational to partner with an Indian company that is already successfully producing and selling a similar type of product.

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Buy-Out
Buying out a local manufacturer gives a company the ability to capitalize on existing manufacturing facilities and distribution networks.

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Import
It is expensive if quantity is low and distribution will be added problem

HUL Strategy Other FMCG Strategy

An innovative distribution model is the HULs Shakti project, which connects Self-Help Groups (SHGs) with business opportunities. HUL promotes and uses the SHGs network present in the villages for increasing its sales in the rural areas. The SHGs are offered chance to become companys local small scale distributor in the rural areas. The groups, typically of 15 to 20 people, buy a small stock of items such as soap, detergent or shampoo and then sell directly to consumers . The model is a win-win for the company and the village SHGs

Rural Malls Chaupal Sagar by ITC is one of the first organized retail effort in the rural area. It extended its warehouse into rural shoppingcum information centre to attend the needs of rural consumers. The size of the mall is very small with just around 7000sq. ft. as compared to ordinary mall sizes in urban area. It offers everything- from toothpaste to television, hair oils to motor cycles, mixer grinders to water pumps, shirts to fertilizers, whatever a rural consumer needs. ITC started its first rural mall in Sehore, Madya Pradesh

DCM Sriram Consolidated Ltd. (DSCL) opened Haryali Bazaars in 2002 focussing mainly on agri-products. These bazaars offer: - Quality Agri- Inputs - Financial Services - Farm Output Services - Other Product and Services So far, 70 Haryali stores have been set up in different states across India Ranbaxys Fortis Health World is tying up with Haryali Kissan Bazaar to enter the rural market

Godrej Agrovet Ltd. has initiated its rural retail business through Godrej Aadhar. These outlets offer rural households, the basic food, grocery, apparel, footwear, furniture, kitchen ware, and home appliances,value added services and pharmacy. HLL initiated Operation Bharat to tap rural market by rolling out low priced sample packets of its toothpaste, fairness cream, shampoo, cream and other products. Chennai-based CavinKare Products which makes hair dyes, organises live demonstrations in remote areas where villagers get a free tinge of jet black or blonde or red free of cost.

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Brooke Bond Lipton India markets its rural brands through magic shows and skits. Reckitt and Coleman uses NGOs in rural areas to educate customers about product benefits. Tobacco and foods major ITC is focusing on the rural segment to bring down its transaction costs. With a judicious blend of internet kiosks - known as EChoupals - to access ready information in their local language on the weather & market prices. Indian Oil is tapping the rural market by opening Kisan Seva Kendras across the rural areas to provide fuel and non-fuel services to rural consumers.

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