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4Ps in Rural Markets
Product“ Anything that has a value in exchange”Product – price – place – promotionChallenges – Availability, affordability...
Cont’d
Appropriate Product StrategiesExisting & New ProductsProduct features – service quality – price &performance relationshipS...
Product Levels        CORE BENEFIT BASIC PRODUCTEXPECTED PRODUCTAUGMENTED PRODUCT                                     POTE...
Cont’dProduct Level       Characteristics     Example               Rural Vs UrbanCore Benefit        Fundamental         ...
Product Development Stages     Stage                                         Marketing Activities  Idea Generation     •Se...
FMCG Consumption Trends       Products             Urban( 1000 HH)           Rural ( 1000 HH)      Toilet Soap            ...
Consumption Ranking Rank           Rural Product      Urban Product          Rural HH                                     ...
Rural Durable Usage TrendsNCAER has classified durables into three categoriesGroup One( <Rs. 1000)Group Two( Rs.1000- 6000...
PackagingAssociated with affordability - Convenience -Consumer recognition & product protectionPackaging material, size, c...
Corporate Responses to FakesLook-alikes- Spell-alikes & DuplicatesPrices range from MRP to 60 % of MRPMargins range from 6...
Fakes: Some Examples
Cont’d
Pricing
Issues in PricingInternal & external factorsSelecting pricing methodsPricing adaptationsLow price points – Simple packagin...
Price Adaptations ( Indicative)Product sharing services, Example: TractorsProduct Bundle pricing, Example: HUL OperationBh...
Colgate- Cibaca
Place- Rural Distribution              ChallengesLarge number of small marketsDispersed population and tradePoor connectiv...
Levels of DistributionLevel              Partner                   Location 1         Company Depot/ C & FA        Nationa...
Distribution        Adaption( Indicative)Hub and Spoke Model, Example: Coca ColaUse of Affinity groups, Example: Project S...
Promotion- Adaptations for         Rural Markets     Conventional           Non- Conventional             Personalised    ...
Melas & Haats                Melas                                        Haat1. 25,000 melas                           1....
Types of PromotionsAdvertisingSales promotions – coupons, contests, demonstrationsand sampling, Example: Tata Shaktee Haat...
Cont’dPush strategy – sales force and trade promotionPull strategy – advertising and consumer promotion
Close of Session    Thank You
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4 ps in rural markets ppt @ bec doms bagalkot mba

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Transcript of "4 ps in rural markets ppt @ bec doms bagalkot mba"

  1. 1. 4Ps in Rural Markets
  2. 2. Product“ Anything that has a value in exchange”Product – price – place – promotionChallenges – 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. 3. Cont’d
  4. 4. Appropriate Product StrategiesExisting & New ProductsProduct features – service quality – price &performance relationshipSimplicity is key“ Sense & Simplicity” – Phillips Global Campaign Urban market successes could be rural market failures Appropriate new product development processes
  5. 5. Product Levels CORE BENEFIT BASIC PRODUCTEXPECTED PRODUCTAUGMENTED PRODUCT POTENTIAL PRODUCT
  6. 6. Cont’dProduct Level Characteristics Example Rural Vs UrbanCore Benefit Fundamental Entertainment Same benefit/ servicesBasic Product Benefit/service Television Set Same into tangiblesExpected Product Attributes & Digital sound, flat Appearance of conditions buyers screen differences in normally expect expectationsAugmented Exceeding Battery Operated Pleasant surpriseProduct customer TV for rural customer expectationsPotential Product Encompassing all Jolly Startek TV Uniquely rural augmentations & value proposition transformations
  7. 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. 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 67Source: National Council for Applied Economic Research, 2002
  9. 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 893Source: A.C Nielsen Retail Audit, MAT, July -2004 & ORG- MARG Retail Consumer Panel, 2001
  10. 10. Rural Durable Usage TrendsNCAER has classified durables into three categoriesGroup One( <Rs. 1000)Group Two( Rs.1000- 6000)Group Three( >6000)In group one the growth is as high as 75 percentElectrical goods show the highest urban- rural disparity, why ?Television( B & W) 195/1000HH in rural Vs 490/1000HH inurbanColour TVs 48/1000 HH in rural Vs 304/1000HH in urban
  11. 11. PackagingAssociated with affordability - Convenience -Consumer recognition & product protectionPackaging material, size, convenience and aestheticsExample: Chik Sampoo
  12. 12. Corporate Responses to FakesLook-alikes- Spell-alikes & DuplicatesPrices range from MRP to 60 % of MRPMargins range from 60 % to 300 %Legal action – awareness programmes – NewPackage Development
  13. 13. Fakes: Some Examples
  14. 14. Cont’d
  15. 15. Pricing
  16. 16. Issues in PricingInternal & external factorsSelecting pricing methodsPricing adaptationsLow price points – Simple packaging – utility aroundpackaging materialHighlighting value
  17. 17. Price Adaptations ( Indicative)Product sharing services, Example: TractorsProduct Bundle pricing, Example: HUL OperationBharatFree gifts – may sometimes not work in rural areasSpecial event pricing- Hero Honda Rs. 500 campaign
  18. 18. Colgate- Cibaca
  19. 19. Place- Rural Distribution ChallengesLarge number of small marketsDispersed population and tradePoor connectivityLow availability of suitable dealersInadequate banking/ credit facilitiesPoor product display and visibilityPoor communication of offers and schemes
  20. 20. Levels of DistributionLevel 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. 21. Distribution Adaption( Indicative)Hub and Spoke Model, Example: Coca ColaUse of Affinity groups, Example: Project ShaktiHaat Activation, Example: ColgateSyndicated distribution, Example: Cavin Care &AmrutanjanUse of marketing co-operatives, Example: WarnaBazaar in Rural AreasMobile traders, Example: FMCG companies
  22. 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 communicationOutdoor: Wall Painting, Animator Hoarding
  23. 23. Melas & Haats Melas Haat1. 25,000 melas 1. Periodic markets located in larger2. Companies can concentrate on villages(> 40,000) the top 100 melas 2. 10 – 50 villages are serviced3. Pushkar Mela in Rajasthan 3. Sunday markets are most popular4. Organised by the state veterinary 4. Average number of outlets is 315 and department average daily sales is about Rs 2 lakhs5. Product sales, promotion, 5. Traders participate in at least 4 haats demonstration and database 6. 81 percent of the visitors are repeat generation customers6. Cultural activities and rural sports
  24. 24. Types of PromotionsAdvertisingSales promotions – coupons, contests, demonstrationsand sampling, Example: Tata Shaktee Haat HungamaDirect marketing, Example: VideoconPublicity, Example: Project Shakti and AP OnlineUsing a direct selling through a sales force, Example:Swasthya Chetna for Lifebouy
  25. 25. Cont’dPush strategy – sales force and trade promotionPull strategy – advertising and consumer promotion
  26. 26. Close of Session Thank You
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