Rural Marketing: Module-3
Rural Marketing: Module-3
Rural Marketing: Module-3
Module- 3
TOPICS TO BE COVERED
• Rural Marketing Mix-
• Relevance of Marketing mix for Rural market/Consumers.
• Product Strategies, Rural Product Categories-FMCGs, Consumer
Durables, Agriculture Goods &Services; Importance of Branding,
Packaging and Labelling.
• Nature of Competition in Rural Markets, the problem of Fake Brands
• Pricing Strategies & objectives
• Promotional Strategies. Segmentation, Targeting & Positioning for rural
market.
FOUR P’S OF MARKETING MIX
The term marketing mix was coined in an article written by Neil Borden called
“The Concept of the Marketing Mix.”
The marketer, E. Jerome McCarthy, proposed a four Ps classification in 1960 .
Product
Place
Promotion
Price
Fifth ‘P’ of marketing is:
packaging
7 P’S OF MARKETING MIX
Product
Place
Promotion
Price
• Physical evidence
• Process
• people
FEATURES OF MARKETING MIX
• 1. the four elements of marketing mix are co-equal, interdependent,
and essential.
• Eg. Depends upon the product the other three factors will change.
• 2. Marketing mix is very useful in achieving the marketing objectives,
i.e. sales, profit and customer satisfaction.
• 3. Marketing mix is a flexible and dynamic concept. The components
could be adjusted to meet the competition in the dynamic market
environment.
• Eg. Nirma washing powder packed in a pouch and sealed at the top without
sophistication packing has been well accepted even in the face of intense
MNC competition.
• 4. Marketing manager acts as mixer of all marketing ingredients and he has
to use his knowledge, skills and experience in developing optimum
marketing mix.
• 5. the concept of marketing mix is applicable to business and non-business
organization.
• 6. A thorough understanding of the customer is common to all the four
elements. The focus points of marketing mix is the customer and the
marketing mix is expected to provide maximum customer satisfaction. e.g. in
the case of products like water purifiers, computers, etc. after sales service
plays an Important role in customer satisfaction.
ELEMENTS OF MARKETING MIX
PRODUCT MIX
MEANING OF PRODUCT MIX
• Product mix or product assortment refers to the number of product lines that an organization
offers to its customers. Product line is a group of related products manufactured or marketed
by a single company. Such products function in similar manner, sold to the same customer
group, sold through the same type of outlets, and fall within a same price range .
• Product mix consists of various product lines that an organization offers, an organization may
have just one product line in its product mix and it may also have multiple product lines. These
product lines may be fairly similar or totally different, for example - Dish washing detergent
liquid and Powder are two similar product lines, both are used for cleaning and based on same
technology; whereas Deodorants and Laundry are totally different product lines.
An organization's product mix has following four dimensions :-
• Width,
• Length,
• Depth, and
• Consistency.
VARIABLES OF PRODUCT MIX
• Size, shape, color, design and other features
• Packaging of the products
• Product labelling
• Guarantee and warrantee of the product.
• E.g. Frooti in different sizes and shapes and packaging.
• Nescafe in different line extension, sizes, packaging, color.
PRICE MIX
CONCEPT OF PRICING STRATEGY
• A common strategy for beginning small businesses is creating a bargain pricing impression
by pricing their product lower than their competitors. Although this may boost initial sales,
low price usually equates to low quality and this may not be what customers to see in your
product.
• Your pricing strategy should reflect your product’s positioning in the market and the
resulting price should cover the cost per item and the profit margin. The amount should not
project your business as timid or greedy.
• Low pricing hinders your business’ growth while high pricing kicks you out of the
competition.
• There are a number of pricing strategies that you can follow. Some strategies may call for
complex computation/ calculative methods and others are intuitive/ spontaneous decisions.
Select a pricing strategy that’s based on the product itself, competitive environment,
customer demand, and other products that you offer.
• Cost Plus
• Cost Plus is taking the production cost and adding a certain profit percentage. The
resulting amount will be the product’s price. You need to consider variable and fixed
production costs for this pricing method.
• Value Based
• Instead of using the production cost as your basis, you consider the customer’s
perception of the product’s value. The perception of the buyer is dependent on the
product’s quality, the company’s reputation, and healthfulness, aside from the cost
factors.
• Competitive
• You take a survey of the pricing implemented by your competitors on a similar product
that you are trying to market and then decide whether to price your product lower, the
same, or higher. You should also monitor their prices and be able to respond to changes.
PLACE MIX
PLACE MIX
• Place refers to distribution or the methods and location you use for your products or
services to be easily accessible to the target customers.Your product or service dictates
how it should be distributed.
• If you own a retail shop, for example, the distribution chain ends with you and you supply
to your customers directly. If you own a factory, your options will be to either sell your
products directly or sell them to retailers or vendors as your distribution strategy.
• Selling Directly
• Direct selling can be a good starting point, especially if the product supply is limited or
you only sell seasonal products. One advantage of selling your products directly is you
get a more personal feel of the market because you interact directly with the customers so
you can easily adapt to the changes. Another is that you control your product’s pricing and
the methods on which it should be sold. Distribution methods may include, but are not
limited to, door-to-door, retail, e-commerce, mail order, or on-site.
• Selling Through a Reseller
• If you want to have wider distribution for your product, you can sell it through a third party, either a
retailer or wholesaler, who will then resell the product to their customers. This distribution
strategy also reduces the pressure of running a distribution system. Reseller sales also reduce the
storage space required for product stocks. However, you will lose personal contact, and even company
identity in some cases, with the customers since they will be talking now to your resellers. Some
resellers may request that your product be sold under their own brand.
• Market Coverage
• Market coverage refers to how wide or varied you want your products to be distributed. This applies to
either direct sales or through intermediaries. There are two types of market coverage that you may
want to adopt.
• Intensive distribution
• This ensures the widest distribution possible for your product or service. You sell your products in as
many locations or markets as possible. And oftentimes, you need to lower your prices. This is the
method most commonly used by large businesses or manufacturers to reach customers nationwide or
even globally. Examples of products effectively distributed using this distribution strategy are
convenience products or things we buy regularly, like candy or chewing gum.
• Exclusive distribution
• This strategy restricts your product distribution to only one reseller. The reseller will have
exclusive rights to sell your product or service, and in return, you may also be the sole supplier.
This works more effectively with specialty products that you can promote as prestigious
because you are the sole supplier and the intermediary is the sole reseller.
PROMOTION MIX
• Promotion is the part of marketing where you advertise and market your product, also
known as a promotional strategy. Through it, you let potential customers know what you are
selling.
• In order to convince them to buy your product, you need to explain what it is, how to use it,
and why they should buy. The trick in promoting is letting consumers feel that their needs
can be satisfied by what you are selling.
• Advertising
• PR/ Publicity
• Sales promotion
• Personal selling
PRODCUT STRETEGY
• Rural consumers are more concerned with the utility of the product and
its appearance.
• Example:
• Philips introduced low cost radio “Bahadur” with only medium wave
receiver, which was failed and fund that rural consumer purchase radio
not only for news but also for entertainment
5. BRAND NAME
• Rural consumers are more brand loyalists than urban consumer. The brand name
should instantly be understood by the rural consumers. Rural consumers are
unfamiliar with English and absurd names. More preferably rural brand is a symbol,
logo or color.
• Example:
• Everyday battery with a cat symbol – rural consumers remember it as ‘billi wali
battery’.
• Lifebuoy soap – rural consumers remember it as ‘lal saboon’
• Mahindra tractor’s brand ‘Bhumiputra’
• Slogan of Red Label Tea “jiyo mere lal” proved very effective to promote sale.
DUPLICATE AND COUNTERFEIT PRODUCTS IN
RURAL MARKET
• Spurious products are the copy of established brand name at a cost of
few thousand rupees and sold it in the rural market. This duplication
takes place in all sectors and especially in FMCG, food items and
medicines.
• Counterfeiting is a kind of duplication where the fake products bear
the identical name of the original product, its packaging, graphics,
color pattern, design and even same name and address as the genuine
manufacturer. A pass-off product is one that comes with a few minor
changes from the original product. The slight changes are made to
avoid legal problems.
EXAMPLE:
Rural products
Agricultural
FMCG Consumer goods
goods services
RURAL PRODUCTS
• FMCG – Major players are HUL, Dabur, Marico, Colgate Palmolive, Nirma, CavinKare
and Godrej, move relatively faster, irregular income induces small quantity
purchase like sachets, small tubes. It is classified into household,(floor cleaner,
utensils cleaner, detergent, toilet cleaners, mosquito repellent, etc) food & beverages,
(health beverages, soft driks, dairy products, branded rice, wheat, flour. Branded juices,
branded sugar etc. ) and personal care. (oral care, skin care, hair care, cosmetics,
deodorants, perfumes, feminine hygiene)
• Consumer Durables – these are purchased once in a few years, it is in less demand
due to low income and bad infrastructural facility, and lifestyle. LG Sampoorna TV,
small refridgerator by Philips. Usha, Bajaj, Philips, Titan, Godrej, Videocon, Onida,
Salora, Hero Cycles, Hero Honda, Mahindra & Mahindra and Tata. New entrants – LG,
Samsung and Maruti.
• Agricultural Products – Agricultural inputs such as seeds, fertilizers,
pesticides, insecticides and implements (tractors, tillers and
threshers) Livestock, poultry and fishery. Major players are Rallis India,
Monsanto, DCM Shriram, Chambal Fertilisers, IFFCO, Mahindra &
Mahindra, Eicher and Escorts.
• Services – rural services are witnessing the birth and growth, internet
services are growing as well. Rural market witnessing e-choupal.
• Telecommunications (BSNL), transport, health care, banking (SBI),
insurance (LIC) and education. Kisan credit cards, debit cards.
BRANDING, PACKAGING AND LABELLING
Brand is a specific term and includes a name, symbol, sign or design given
to a product for easy identification. It provides distinct identity to a product
• Brand Association is mainly with Colors, numbers, and visuals and not
necessarily with the name of the brand.
• Retailers play a major role in brand promotion. Due to strong bonding and
trust between customers and retailers, coupled with low brand awareness,
consumers often do not ask for the product by brand but instead will request
the retailer, ‘Paanch rupaye waali chai dena’. It is up to the retailer to push the
brand.
• First mover brands become generic brands – Detergent powder came to
be identified with Surf, mosquito coil with Kachua Chaap, vegetable oil with
Dalda.
BRAND BUILDING IN RURAL INDIA
• Brand name development – Facilitates easy brand recall and in drawing any color,
visual or numeric association. E.g. Ajanta for toothpaste, Sansar for sewing machines.
• Creating a brand identity – Involve the need to relate the brand with the rural
lifestyle, or with appropriate status symbols, or with the rural environment. E.g.
Britannia Tiger Biscuits created an identity associated with a smart, active and sharp
child. Parle G was created as glucose supplement.
• Building a brand image – Brand should have a personality of its own. E.g. Mahindra &
Mahindra have maintained their sterling image in rural.
• Brand choices are often limited due to the small market size and the limited
investment capacity available with the rural retailer.
• Only Three brands are available in rural retail shop against six to nine
brands in urban shops.
BRAND LOYALTY/ STICKINESS
• Low levels of literacy and awareness make rural people less likely to
switch brands as they do not have the required knowledge or
information to exercise a choice. They are more comfortable in
purchasing tried and tested brands. They are therefore, brand sticky
rather than brand loyal.
• First / Early mover advantage – Whichever brand enters a village
market first seems to gain acceptance in the community through ‘word
of mouth’ communication and thereafter many prefer to stick to this
particular brand
FAKE BRANDS
• Rural markets suffer from the problems of low penetration and poor
availability of branded products. Hence, although there exists a huge demand
for branded products, there are no distribution channels to make the product
reach the customer. This has led to the growth of fake brands.
• Ponds has been replaced by Bond’s talc
• Fair & Lovely by Fair & Lonely
• Lifebuoy by Likebuoy
THE FAKE MARKET
• Lookalikes – Products where the color scheme on the packaging
material closely resembles that of a popular brand but the pack carries
a different name. Shagun for Lifebuoy, Lalita Amla for Dabur Amla
• Spell alike – Fakes of original brands packaged in colors and
designs similar to those of the originals but have names that are subtly
and cleverly misspelt. E.g. Paracute for Parachute, Fair & Lonely for Fair
& Lovely.
• Duplicates – Exact replicas of original brands. The color, design, and
name on the package are the same as those of the original brands.
STRATEGY TO COUNTER FAKE MARKET
• Introduce upgraded packaging which is difficult to copy – Dabur replaced its plastic
blow molded container with a premium four-color shrink-sleeve packaging, which
has a grainy texture and water bubbles. The packaging is difficult to replicate. Tetra
packs for Juices.
• Raids or Legal course – Raids on the premises of the fake manufacturer and seize
the products. File a patent for the product. E.g. P&G initiated action against the
manufacturers of lookalike Vicks Vaporub.
• Educate the customers – Coca Cola has put into place 48 consumer response
coordinators, who work with their teams to redress the consumers complaints about
overcharging and fake bottling.
IMPORTANCE OF BRANDING