4 ps in rural markets ppt @ bec doms bagalkot mba

1. 4Ps in Rural Markets

2. Product
“ Anything that has a value in exchange”
Product – price – place – promotion
Challenges – Availability, affordability, acceptability &
awareness
Marketing Tools Marketing Challenge
Product Acceptability
Price Affordability
Place Availability
Promotion Awareness
Source: The Rural Marketing Book- Kashyap. P & Raut. S

3. Cont’d

4. Appropriate Product Strategies
Existing & New Products
Product features – service quality – price &
performance relationship
Simplicity is key
“ Sense & Simplicity” – Phillips Global Campaign
Urban market successes could be rural market failures
Appropriate new product development processes

5. Product Levels
CORE BENEFIT
BASIC PRODUCT
EXPECTED PRODUCT
AUGMENTED PRODUCT
POTENTIAL PRODUCT

6. Cont’d
Product Level Characteristics Example Rural Vs Urban
Core Benefit Fundamental Entertainment Same
benefit/ services
Basic Product Benefit/service Television Set Same
into tangibles
Expected Product Attributes & Digital sound, flat Appearance of
conditions buyers screen differences in
normally expect expectations
Augmented Exceeding Battery Operated Pleasant surprise
Product customer TV for rural customer
expectations
Potential Product Encompassing all Jolly Startek TV Uniquely rural
augmentations & value proposition
transformations

7. Product Development Stages
Stage Marketing Activities
Idea Generation •Searching for new product ideas
Idea Screening •Selectthe most promising ideas and drop those with only limited potential. Study the
needs and wants of potential buyers, the environment and competition.
Concept Testing •Describeor show product concepts and their benefits to potential customers and
determine their responses. Identify and drop poor product concepts. Gather useful
information from product development and its marketing personnel.
Business Analysis •Assessthe product’s potential profitability and suitability for the market-place. Examine
the company’s research, development, and production capabilities. Ascertain the
requirements and availability of funds for development and commercialisation. Project
ROI.
Product Development •Determine technical and economic feasibility to produce the product. Convert the product
idea into a prototype. Develop and test various marketing mix elements.
Test Marketing •Conductmarket testing. Determine target customers’ Reactions. Measure its sales
performance. Identify Weaknesses in product or marketing mix.
Commercialisation •Make necessary cash outlay for production facilities. Produce and market the product in
the target market and effectively communicate its benefits.

8. FMCG Consumption Trends
Products Urban( 1000 HH) Rural ( 1000 HH)
Toilet Soap 998 992
Washing Cake 980 950
Cooking Oil 968 952
Hair Oil/ Cream 897 787
Tea 876 758
Toothpaste 822 449
Washing Powder 819 576
Electric Bulb 723 394
Shampoo 663 352
Biscuits 579 314
Health Beverages 324 67
Source: National Council for Applied Economic Research, 2002

9. Consumption Ranking
Rank Rural Product Urban Product Rural HH
Consumption
grams / month
1 Toilet Soap Toilet Soap 268
2 Washing Powder Biscuits 950
3 Packaged Tea Washing Powder 268
4 Biscuits Packaged Tea 302
5 Detergent Cake Detergent Cake 893
Source: A.C Nielsen Retail Audit, MAT, July -2004 & ORG- MARG Retail
Consumer Panel, 2001

10. Rural Durable Usage Trends
NCAER has classified durables into three categories
Group One( <Rs. 1000)
Group Two( Rs.1000- 6000)
Group Three( >6000)
In group one the growth is as high as 75 percent
Electrical goods show the highest urban- rural disparity, why ?
Television( B & W) 195/1000HH in rural Vs 490/1000HH in
urban
Colour TVs 48/1000 HH in rural Vs 304/1000HH in urban

11. Packaging
Associated with affordability - Convenience -
Consumer recognition & product protection
Packaging material, size, convenience and aesthetics
Example: Chik Sampoo

12. Corporate Responses to Fakes
Look-alikes- Spell-alikes & Duplicates
Prices range from MRP to 60 % of MRP
Margins range from 60 % to 300 %
Legal action – awareness programmes – New
Package Development

13. Fakes: Some Examples

14. Cont’d

15. Pricing

16. Issues in Pricing
Internal & external factors
Selecting pricing methods
Pricing adaptations
Low price points – Simple packaging – utility around
packaging material
Highlighting value

17. Price Adaptations ( Indicative)
Product sharing services, Example: Tractors
Product Bundle pricing, Example: HUL Operation
Bharat
Free gifts – may sometimes not work in rural areas
Special event pricing- Hero Honda Rs. 500 campaign

18. Colgate- Cibaca

19. Place- Rural Distribution
Challenges
Large number of small markets
Dispersed population and trade
Poor connectivity
Low availability of suitable dealers
Inadequate banking/ credit facilities
Poor product display and visibility
Poor communication of offers and schemes

20. Levels of Distribution
Level Partner Location
1 Company Depot/ C & FA National/ State level
2 Distributor/ Van District level
Operator/ Super Stockist/
Rural Distributor
3 Sub Distributor/ retail Tehsil HQ, towns and
Stockist/ sub stockist/star large villages
seller
4 Wholesaler Feeder towns, large
villages, haats
5 Retailer Villages, haats

21. Distribution
Adaption( Indicative)
Hub and Spoke Model, Example: Coca Cola
Use of Affinity groups, Example: Project Shakti
Haat Activation, Example: Colgate
Syndicated distribution, Example: Cavin Care &
Amrutanjan
Use of marketing co-operatives, Example: Warna
Bazaar in Rural Areas
Mobile traders, Example: FMCG companies

22. Promotion- Adaptations for
Rural Markets
Conventional Non- Conventional Personalised
Television Haat and Mela Direct mailer
Radio Folk Media( puppet and POS (demonstration, leaflet)
magic show)
Press Video Van Word of mouth
Cinema Mandi Interpersonal
communication
Outdoor: Wall Painting, Animator
Hoarding

23. Melas & Haats
Melas Haat
1. 25,000 melas 1. Periodic markets located in larger
2. Companies can concentrate on villages(> 40,000)
the top 100 melas 2. 10 – 50 villages are serviced
3. Pushkar Mela in Rajasthan 3. Sunday markets are most popular
4. Organised by the state veterinary 4. Average number of outlets is 315 and
department average daily sales is about Rs 2 lakhs
5. Product sales, promotion, 5. Traders participate in at least 4 haats
demonstration and database 6. 81 percent of the visitors are repeat
generation customers
6. Cultural activities and rural sports

24. Types of Promotions
Advertising
Sales promotions – coupons, contests, demonstrations
and sampling, Example: Tata Shaktee Haat Hungama
Direct marketing, Example: Videocon
Publicity, Example: Project Shakti and AP Online
Using a direct selling through a sales force, Example:
Swasthya Chetna for Lifebouy

25. Cont’d
Push strategy – sales force and trade promotion
Pull strategy – advertising and consumer promotion

26. Close of Session
Thank You