Towns & Beyond Semi Urban India pdf offer by RC&M Experiential marketing. Semi Urban is surrounding residential areas of a bigger city; a group of these can collectively be regarded as the suburbs”. Generally they pertain to residential districts.

1. Towns & Beyond…
Semi Urban India

2. Index
 Understanding Semi Urban
– Definition
– List of Towns
– Growing States
 Potential Markets - Fortuners & Competition in these Markets
– Case Study Automobile
– Case Study Durable
– Case Study FMCG
– Case Study Finance
– Case Study Telecom
 Sales Point Presence
– Sales Point – Population Segmentation
– Virtual Presence
 Opportunities in Semi Urban
 Why should we go semi urban?
 Where to go in semi urban India?
 Who is the Semi Urban customer?
 Infrastructure
– Lay out of a Semi Urban Town

3. List of Semi Urban Towns
State No. of Towns
Definition West Bengal 43
Andhra Pradesh 40
Region Definition RC&M Specific Maharashtra 27
Karnataka 26 P
Urban All statutory places with a All locations with a population of 5 o
(100+ cities) Municipality, corporation, lac+ Tamil Nadu 22 p
cantonment board or notified town i.e. Metros, State Capitals, Top 5 Madhya Pradesh 20 u
area committee, etc. cities of every state l
Haryana 19 a
Semi Urban Surrounding residential areas of a All locations with a population of
Bihar 18 t
(300+ Towns) bigger city, a group of these can 1 lac - 5 lac i
collectively be regarded as the i.e. District Head Quarters, Tehsils Western UP 16 o
suburbs”. Generally they pertain to n
Gujarat 15
residential districts
Rajasthan 13 1
Rural Areas with Population density < 400 All locations with a population of
(4000+ Blocks) / sq km , or where 75 % of the male less than 1 lac i.e. Blocks , Villages Punjab 11
t
working population is engaged in Eastern UP 8 o
agriculture , or areas with no
Municipal corporation / board Orissa 8
5
Central UP 6
l
Chhattisgarh 6 a
Kerala 5 c
Jharkhand 4
Himachal Pradesh 1
Uttaranchal 1
Total 309

4. Developing States – Growth & Income
State Growth Rate State Per Capita Income (INR)
Bihar 24.33% Haryana 68914
Chhattisgarh 19.88% Maharashtra 54867
Haryana 18.39% Punjab 52879
Andhra Pradesh 15.56% Gujarat 59570
Uttar Pradesh 15.27% Kerala 49316
West Bengal 14.96% Tamil Nadu 45058
Punjab 14.90% Himachal Pradesh 44538
Himachal Pradesh 14.60% Karnataka 40998
Kerala 14.55% Andhra Pradesh 40902
Madhya Pradesh 14.49% Uttarakhand 36675
Rajasthan 14.32% West Bengal 36322
Maharashtra 13.55% Chhattisgarh 34483
Karnataka 12.76% Arunachal Pradesh 33302
Orissa 12.21% Orissa 29464
Uttarakhand 11.63% Rajasthan 27001
Tamil Nadu 11.22% Assam 23993
Gujarat 11.02% Madhya Pradesh 21648
Assam 10.68% Jharkhand 21465
Jammu & Kashmir 9.35% Uttar Pradesh 18214
Jharkhand 9.33% Bihar 13663

5. Potential Semi Urban Markets
INDUSTRY FORTUNER
Four Wheeler Maruti Suzuki
Two Wheeler Hero Honda/ Bajaj
Finance ICICI
Insurance Max Vijay
Telecom BSNL
Durable/ FMCG LG/HUL

6. Case Study – 4 Wheelers
Fortuner – Maruti Suzuki Competition – Hyundai
Maruti India generates 10 per cent of its domestic sales from As per Hyundai “almost 50 per cent of the 220 million
Semi Urban sales, amounting to 32000 cars. households in semi urban India are potential care buyers
due to the agricultural subsidies extended by the
Semi urban markets' share in Maruti's overall sales during government and also due to increase in productivity of
April-January 2009 has gone up to 8.5 per cent from 3.5 agri-based products, thus presenting an attractive
per cent in the same period last year. market for hi-technology products”.
Plan
The company plans to add another 600 people to its present Plan
tally of 7,200 employees of which over half will be engaged in The company plans to touch 58% of the semi urban market in
sales and marketing. India by targeting middle semi urban class.
Campaign Campaign
Maruti has launched its marketing campaign for semi urban Launched promotional scheme for semi urban areas titled
India “Ghar Ghar Mein Maruti” (Maruti in every Household”), “Ghar Ghar ki Pehchan”, under which special schemes for
'Mera Sapna Meri Maruti‘ government employees in semi urban areas and members of
gram panchayats on the purchase of Hyundai Santro
Strategy
Tying up with public sector banks that have both a branch Strategy
network in these areas and the resource base to make loans Focus on Govt employees and panchayat members as they
like PNB, Bank of India to increase finance penetration belong from well-to-do families

7. Case Study – 2 Wheelers
Fortuner – Hero Honda Competition – TVS
Penetration Penetration
HH has market share of 40 per cent from rural and semi urban Thanks to their increasing semi urban penetration, TVS
areas. reported profit of 335.2 million rupees in the year ended
March 31 after posting losses in the previous two financial
Campaign years according to its website.
The company planned to cover 1 lakh towns by end of 2010
financial year through the launch of the promotional Plan
campaign called Har Gaon, Har Aangan (Every Village, every TVS Motor Co. Ltd is banking on new launches for a deeper
Household) penetration into the semi urban market to fuel growth in
2010, chairman and managing director Venu Srinivasan said.
Strategy TVS has also launched special marketing schemes for semi
Hero Honda is expanding its rural reach in India by adding urban markets.
about 500 more dealerships, service centers and other outlets
across the country. Hero Honda has set up health care Strategy
initiatives and services to guide people in getting driving The new Bharat Stage III compliant model TVS Max 4R will be
licenses. Coupled with motorcycle tax cuts and economic targeted at heavy load carrying riders predominantly found in
growth. the semi urban markets.
Result
Hero Honda expects to sell 50 per cent of its motorcycles in
semi urban in the next three to five years. Hero Honda could
boost sales 24 % in the past 11 months.

8. Case Study – Finance
Fortuner - SBI Competition - ICICI
Penetration Penetration
SBI, has a breathtaking semi urban branch network of 6,600 ICICI Bank is the country’s second largest bank,in urban as
with 972 specialized branches. These branches have been set well as in Semi Urban towns.
up in different parts of the country with the sole purpose of
developing agriculture through credit deployment.
Strategy
Strategy ICICI has adopted the franchise model of operation in semi
SBI has developed semi urban agricultural business units, urban markets A one man office (known as “kendra”) in the
education programs for local farmers and “kisan” cards. village forms an interface between the villager and the Bank’s
One of their recent endeavors is the tie-up with National products. Crop loans, housing loans, automobile loans, farm
Agricultural Cooperative Marketing Federation (NAFED) to equipment, seed financing and insurance policies are all on
finance farmers for cultivation of various crops like soyabean, offer.
paddy, jute and potato. ICICI is looking at tying up with micro-finance institutions
and local self-help groups (or creating them if already do not
exist)
Results
SBI has gradually evolved to become the leader in agricultural
finance with a portfolio of Rs. 18,000 crore in loans to around Results
50 lakh farmers. has 30 Regional semi urban Banks in India The number of borrowers has risen from 130 in 2000 to over
known as RRBs. 42,000 today, and the semi urban loan book has crossed Rs.
16,000 crore. And the bank’s default rate in the semi urban
The semi urban banks of SBI is spread in 13 states extending retail sector is 1 – 2 % as compared to 2 – 3% in the semi
from Kashmir to Karnataka and Himachal Pradesh to North urban wholesale sector and 5% for the banking sector as a
East. The total number of SBIs Regional semi urban Banks in whole
India branches is 2349 (16%).

9. Case Study – Telecom
Fortuner - BSNL Competition – Bharti Airtel
Penetration – BSNL covers total number of 5,23,532 towns Penetration – about 55% of Airtel’s 100-million customer base
and villages across India. Its the largest telecom service is from the semi urban areas
provider in India
Strategy – Has set up 14,000 Airtel Service Centres
Strategy – Grameen Sanchar Sewak (GSS) Scheme was and initiated self-service options like Start Stop to build
launched in 2002 which provides Door-t-Door facility by trust amongst customers .
Delovery agents in rural and and semi urban markets. Focus on Value added services (VAS) as, Music and SMS
constitute significant part of Bharti’s Rs 3500-crore VAS
revenue
Results – At present, 2685 GSS are covering more than 11997
towns and villages. Across India, the scheme has been Results – Company expects this share to reach 65% very
launched in most of the states shortly, bringing renewed focus on VAS for the semi urban
customers

10. Case Study – Consumer Durables
Fortuner - LG Competition - Samsung
Penetration Penetration
LG has set up 45 area offices and 59 semi urban and remote- To counter LG’s strong semi urban presence, Samsung visited
area offices. semi urban market accounts for 60% of new CTV 48 small towns in 100 days in an effort to increase brand
buyers for LG awareness of its products.
Strategy Strategy
“Thinking locally, succeeding globally” “Samsung Guru comes to your town with Lots of excitement
and valuable prizes”
Product Product
LG Electronics launched a customized TV ‘Sampoorna’ Guru 1105, Guru 1080, Samsung Dholak (E-1160), E-2120 and
Samsung Tabla (E-2130)
Plan
A more important aspect of customization was to make TV set Plan
which can appeal to local needs, it facilitated on screen Samsung rolled out its 'Dream Home' road show, to provide
display in vernacular language like Hindi, Tamil and Bengali. recreation in the entertainment starved semi urban areas.
Results Results
It is selling 1,00,000 sets in the very first year.semi urban It has created an awareness in the semi urban areas and today
market for LG grew at 25% over the last year as compared to in mobile phones category, it’s the leading brand in semi
15% urban urban

11. Case Study – FMCG
Fortuner – Sunsilk (HUL) Competition – Vatika (Dabur)
Penetration Penetration
Company launched Chik shampoo to target the low segment LG has set up 45 area offices and 59 semi urban and remote-
people . Chik shampoo has a penetration of about 22% of area offices. semi urban market accounts for 60% of new CTV
semi urban market buyers for LG
Strategy Strategy
launched shampoo in several sachets – 5ml,10ml,2ml etc and Dabur conducted Beauty Contests to make women conscious
also launched low priced bottles in several sizes of how their looks, to encourage them to use beauty and hair
care products. It re-named products as per language used in
Plan regions
Direct media promotions, free sampling helped majorly to
build knowledge about product categories. Results
Dabur is fourth largest It is selling 1,00,000 sets in the very
Results first year.semi urban market for LG grew at 25% over the last
year as compared to 15% urban
The shampoo brands like Chik, Nyle (herbal category)
contribute 50% of the company’s turn over

12. Sales Point Presence

13. Sales Point Presence
Automobile -
Dealerships, sales and
Service outlets
Automobile – Salesmen,
Monthly service camps 10 lac + Finance-
Branch Offices, Finance
Finance- institutions, Banks
Regional Rural branches,
post offices FMCG-
5lac – 10 lac Shops, Retail Outlets
FMCG-
Small Shops with limited Durables-
supply Small Outlets, Dealers
Durables-
Salesmen 1lac – 5 lac
Below 1 lac

14. Virtual Presence - Automobile

15. Virtual Presence - Retail

16. Virtual Presence - Finance

17. Virtual Presence - Durables

18. Going the Semi Urban Way..
Why?? Where?? Who??
Why should we go Semi Urban???

19. Growing Industry Size
 The total number of semi urban households is expected to rise to 153 million in 2009-10 from 135 million in
2001-02, suggesting a huge market
 Estimated annual Industry size
 FMCG – 65,000 Cr
 Agri Inputs – Rs.45,000 Cr
 2 / 4 Wheelers – Rs.8,000 Cr
 Durable – Rs. 5,000 Cr
 42 million house holds in semi urban and rural areas are availing banking services
 Of the 20 million Rediffmail signups, 60% are from small towns
 50% of online shopping transactions, are from semi urban towns
 % age of BPL families has declined from 46% to 27%
 Rural literacy level has raised from 36% to 59%
 Low penetration rates make it an open and high
opportunity market with substantially less competition

20. Media Penetration
 More than 50% of the villages today have cinema, stars fan associations,
mahila mandals, youth clubs, self-help groups, angan wadi centres and
ration shops
 More than 80% of villages have community TV and cable connection,
separate place of worship and general provision stores
 In all villages, the main source of any information was through television
 Other available Information sources are:
– wall posters in 55%
– publicity by panchayat office meetings in 53%
– dandora in 43%
– friends and relatives in 22%
– announcement by loud speakers in 18%
– cable TV in 16%
– radio in 10% and
– through health workers like VHN/ICDS
workers in 8%
The graph shows results of a study of more than
50 towns across India

21. Information Centers
 Most of the towns have local associations and place of worship where the people and community members
meets and share information
 Policy makers and program managers tap all these resources to educate the semi urban community
 There are local libraries as well in growing towns where people are encouraged to read newspapers and
magazines in local language so that they can stay informative
FMCG Growing Penetration
 Semi urban consumers spend around 13 per cent of their income, the second highest after food (35 per cent), on
fast moving consumer goods (FMCG), as per a RMAI study
 The FMCG industry in India was worth around US$ 16.03 billion in August 2008 and the semi urban market accounted
for a robust 57 per cent share of the total FMCG market in India
 Moreover, according to an ASSOCHAM study, FMCG sector in semi urban areas is expected to grow by 40 per cent as
against 25 per cent in urban areas

22. Telecommunications
 A Gartner forecast revealed that Indian cellular services revenue will grow at a compound
annual growth rate (CAGR) of 18.4 % to touch US$ 25.6 bn by 2011, with most of the
growth coming from semi urban markets.
 A joint Confederation of Indian Industries (CII) and Ernst & Young report reveals that of
the next 250 million Indian wireless users, approximately 100 million (40%) are likely to be
from semi urban areas.
 By 2012, semi urban users will account for over 60 per cent of the total telecom subscriber
base in India.
 Mobile phones in semi urban India also grew by close to 13.72 per cent to reach 70.83
million in April-June 2008
Automobiles
 The traditional market for auto sector in semi urban areas has been driven by tractors
and two-wheelers
 The two wheeler penetration in villages is only 10% as compared to 25% in urban areas
 Nearly 50% of the Indian rural market, which includes 220 million households, is
potential car buyers. Two-wheeler penetration in rural belts is still very low with less than
10% households owning a two-wheeler. Sensing a huge opportunity many automobile
companies are trying to woo the rural consumer
 However, seeing a huge potential in villages and smaller towns where incomes are increasing,
most of the bigger auto brands are now focusing on expanding their share of rural markets

23. Where should we go in Semi Urban???

24. Congregations
 Markets
 University/College areas
 Hotels/Tourist Complexes
UP, Haryana, Punjab,
 NRI
MP, HP, Rajasthan  Defence Areas
Reasoning
UP, Haryana, Punjab, MP, Rajasthan
» People are very flamboyant, enjoy festivals and
spend lavishly during festivals
» Most expensive weddings take place in these
states, also the gatherings are enormous
» HP is a state with high educational preferences and
only sources of development as usually research
work is undertaken there (agri studies)

25. Money Belts
 Industrial
 Govt. Offices
 Banks
Bihar, Jharkhand,  Fisheries/Beach
Maharashtra, Kerala,  IT Belts
Tamil Nadu,
Karnataka, Orissa
Reasoning
Bihar, Jharkhand, Kerala
» Extremely rich people, coal and diamond mines,
rubber plantations(Kerala, Maharashtra, Karnataka)
» IT Hubs, Industries in all sectors (Orissa, Tamil Nadu)
» Bank chains, posh residential societies

26. Potential Areas
Finance
North (Rajasthan, Haryana, MP)
 Kotak Mahindra
 IDBI
 HDFC
 ICICI
 Regional State Banks
(Eg: Rajasthan- Bank of Rajasthan)
South (AP, Karnataka, Kerala)
 Dhanlaxmi
 TVS Sundaram
 Vijaya Bank
 South India
 ICICI

27. Who is the Semi Urban Consumer???

28. Semi Urban Consumer
Male Profile Female Profile
 He is aware about myriad products that are on  She is coming out of her closet and is exercising
offer in the market place, thanks to television her choice in selected categories
 He is a responsible, family person and starts  She is literate, but now transforming as a career
looking for employment at an early age oriented woman
 He looks for respect more than anything else  Mostly women seek work in Home Sciences
 He could be a bank clerk, an accountant, a  She is comfortable going out in groups and tries
factory worker, small shop owner, a teacher etc. to find similar company
 His annual income is pretty low as compared to  She is a content woman, happy with her
an urban male but he is recognizing better changing lifestyle and recognition
lifestyle needs & aims for a higher income

29. Buying Habits
 They buy daily usable things in large quantities like wheat flour, edible oil etc. Besides the daily use items; they buy
things in small quantities and are not concerned with economy
 They recognize the need of advanced quality products but buy them only on special occasions like wedding or
festival
 They like to show what they have bought when in groups, or evening meets, very common in semi urban
 The samples or small quantity bottles, in FMCG, is more often preferred by women
 There is a general perception that if more quantities are bought, it would lead to more wastage
 They are also flamboyant at times with their purchases so often they go to their neighbors after shopping or take
them along

30. Purchase Patterns
 Influence Customs - They believe in old customs and traditions which influences
a lot on the purchasing decision. They look at functionality than on the style,
brand and features
 Packaging and Color - The size, color, shape, and packaging of the product
matters a lot. For example, in the south people prefer yellow as good, but in the
North it is a sign of a disease
 Retail Outlet Friendly - More retail outlet friendly customers, and there are fewer stores available per 1000
population
 Long Term Usage - They buy the product if they feel that the product will sustain for long term usage
 Economical with Good Quality - There is a saying in Hindi "sasta, sundar, mazboot”
They buy the product if it is in their budget. But if the product is good in technology, quality and adds value to their
role and status in the society then they do not look at money to buy it. If it is good and long lasting then there is no go
back from the consumers
 Society - They are driven by society. Word of mouth is the key factor in purchasing a product

31. Decision Making Pattern in Semi Urban
Category Influencer Decision Maker User
Automobile Peers, Neighbors
Finance Peers
Durables Peers, Neighbors
FMCG Friends, Acquaintances,
Relatives
Telecom Peers, Friends, Neighbors
 The Male Member in the family exercises the right to make purchase decisions
 Only decisions with respect to the eatables are chiefly contributed by the woman in the family
 The neighbors, friends and peers play a crucial role in the decision making for a semi urban consumer
 As he is a society man primarily, he also wants to buy what his neighbor or his friends have purchased

32. Infrastructure

33. Layout of a Sub Urban Town
No. of Households – 9893
Total HH Population – 39255
*The Table shows Education and Health Facilities available in Semi Urban Towns
*The survey was conducted in more than 50 towns in South India

34. Marketers’ Infrastructure - Sub Urban Towns across India
The availability of Infrastructure in 50 towns
surveyed in south India
Marketers can make use of large Infrastructure ,
enhancing today at a greater pace

35. Thank You