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Marketing management_rural marketing Marketing management_rural marketing Document Transcript

  • Marketing Management Project On Rural Marketing Submitted on: 16th Oct ‘12 Submitted to: Dr. Preeti Rajpal Singh (Teacher in-charge, Marketing Management) By: Dhruv Narula (50255) Kanika Suri (50275) 1
  • Marketing Management Contents ACKNOWLEDGEMENT .................................................................................................................... 3 PREFACE ........................................................................................................................................... 4 How is Urban Market different from Rural Market? ...................................................................... 5 The market is a place where buyers and Sellers Exchange Things. In lay man terms "It is a place where buyers and sellers exchange goods/Service for some value in return such as Money". So the Market is same everywhere. But, the difference is in the consumer behavior. There will be different buyers in each market. This is because of different factors which Influence them. So the same ......... 5 BASIS OF DIFFERENCE ................................................................................................................... 5 IMPULSE TO GO RURAL .................................................................................................................... 7 GROWTH IN MARKET ....................................................................................................................... 8 General Strategies by FMCG Majors for Rural market ..................................................................... 9 HINDUSTAN UNILEVER LIMITED ..................................................................................................... 10 Rural Markets ............................................................................................................................. 10 Marketing Strategies .................................................................................................................. 10 RURAL MARKETING CAMPAIGNS ............................................................................................... 11 Khushiyon ki Doli .................................................................................................................... 11 Project Shakti.......................................................................................................................... 12 BrookeBond Sehatman strategy for a healthy initiative in Rural India .................................. 13 LIFEBOUY SWASTHYA CHETNA PROGRAMME ....................................................................... 13 PROCTER & GAMBLE ...................................................................................................................... 15 Strategies .................................................................................................................................... 15 SANGEETA BHABHI AND KAMYAB JODI INITIATIVE................................................................ 15 AMBITIOUS STRATEGIES OF SOME OF THE MAJOR COMPETITORS ............................................... 16 CavinKare ........................................................................................................................................ 16 Growth Highlights ....................................................................................................................... 16 Strategy ...................................................................................................................................... 16 DABUR ............................................................................................................................................ 18 Strategies .................................................................................................................................... 18 Project Astra ........................................................................................................................... 18 Events and Contests ............................................................................................................... 18 BIBLIOGRAPHY ................................................................................................................................ 19 2
  • Marketing Management ACKNOWLEDGEMENT We owe a great many thanks to a great many people who helped and supported us during this project. Our deepest thanks to Ms. Preeti Rajpal Singh (Subject teacher- Marketing Management) for guiding and correcting various documents with attention and care. She has taken pain to go through the details and make necessary correction as and when needed. We express our thanks to the Principal of Shaheed Sukhdev College of Business Studies for extending her support and giving such an opportunity to do this project. We also extend our heartfelt thanks to our family and well wishers for cooperating with us during the time period. Ms. Preeti Singh __________________ 3
  • Marketing Management PREFACE This project highlights the role of urban and rural campaigning all over India. We have chosen HUL, P&G, Dabur and ITC. The project highlights the various campaigns the companies undertake to promote their brands. Up until recently, large part of the marketing that was done in this country was done, targeting the urban population of the country. Now the marketing potential of the rural part of the country is rapidly growing. Let us get an understanding of the urban and rural breakup of the country. 26% of the population lives in the cities or in urban India. The remaining 74% lives in the villages or in rural India. The population of the country is spread over the villages but is very concentrated in the cities. India has six of the largest cities in the world. These are - Calcutta, Bombay, Delhi, Madras, Bangalore and Hyderabad. Besides these cities, there are six other cities that are growing at a very rapid rate and have a huge concentration of the population. These are - Ahmedabad, Kanpur, Pune, Nagpur, Lucknow and Jaipur. As the standard of living in the villages also improves, many modern facilities are available in almost every house hold in the villages too. The country is growing, and is a place where business will thrive in the near future. To understand this better consider the following favourable shifts that have taken place in the consumer patters of buying. 4
  • Marketing Management How is Urban Market different from Rural Market? The market is a place where buyers and Sellers Exchange Things. In lay man terms "It is a place where buyers and sellers exchange goods/Service for some value in return such as Money". So the Market is same everywhere. But, the difference is in the consumer behavior. There will be different buyers in each market. This is because of different factors which Influence them. So the same way there is a difference between Rural and Urban Market. The companies which have understood the phenomena of rural market have succeeded in the market, For Ex: HUL, ITC, Colgate, Rajdoot Motorcycle. BASIS OF DIFFERENCE The Differences can be Infrastructure, Economy, Lifestyle, Socio- Cultural Background, Availability or reach, Habits, and Competition. 1. Infrastructure: The facilities like Electricity, Internet, Roads and Buildings, Educational Institutions, Financial Institutions, Communication and Organized Market, Other Facilities differs in urban and rural market. In urban everything gets implemented soon and Availability is also there. Whereas, in rural market everything takes a good amount of time. 2. Economy: Here the Economy means, the earning Capacity in a rural Market. The cost of Living always depends upon their way of earning. So, the Income levels are unreliable, as Most of them are depended upon the seasons and Agriculture. So the Income levels cannot be a fixed one. 3. Lifestyle: The lifestyle, that is living pattern of both the markets differ a lot. This can be important factor which influences the companies to think of when they approach rural market. 4. Socio- Cultural Background: Due to the illiteracy level, and Culture adaptability from long time the rural market always gets differ than the urban market. The superstition and other belief as well as the way of thinking towards products and goods differ in these two markets. 5
  • Marketing Management 5. Availability or Reach: Due to the areas which are diverted Geographically and Heterogeneous market the reach is very difficult. The logistics for rural market is a tough task than to reach the Urban Market. 6. Habits: The daily routine of the people makes them to cultivate different habits. Apart from due to the awareness is low in Media terms there will be a difference in the habits. Competition: The competition in the market for brands and Companies always differ. As in rural markets it is always the channel Partner and Retailer plays a vital role. But where as in Urban Market Brand Plays a great role. 6
  • Marketing Management IMPULSE TO GO RURAL There are many reasons that have urged the FMCG companies to enter the uncharted territory of rural India. Some of the attractions are discussed below: 1. Large Population The move underscores the point that rural market is important considering rural India comprises 12.2 % of the world population. The rural Indian population is large and its growth rate is also high. Over 70% India’s one billion plus population lives in around 627,000 villages in rural areas. This simply shows the great potentiality rural India has to bring the much needed volumes and help the FMCG companies to bank upon the volume driven growth. Table : Percentage Distribution of Households and Income Area Households Population Rural 72.6 74.6 Urban 27.4 25.4 All-India 100 100 Table 1 Rural-Urban Market Profile Urban Population 2001-02 (mn 53 household) Population 2009-10 (mn 69 household) % Distribution 28 Market (towns/villages) 3,786 Universe of outlets 1 Rural 135 153 72 627,000 3.3 2.Rising Rural Prosperity India is now seeing a dramatic shift towards prosperity in rural households. To drive home the potential of rural India just consider some of these impressive facts about the rural sector. As per the National Council for Applied Economic Research (NCAER) study, there are as many ‘middle income and above’ households in the rural areas as there are in the urban areas. There are almost 7
  • Marketing Management twice as many ‘lower middle income’ households in rural areas as in the urban areas. 3. Distribution of people income-wise The Indian middle class, target consumers for many companies, is expected to swell up to 267 million people in the next five years, up 67 percent from the current levels, thus providing a great market opportunity for firms, according to NCAER. A report by National Council for Applied Economic Research's (NCAER) Centre for Macro Consumer Research said by 2015-16, India will be a country of 53.3 million middle class households, translating into 267 million people falling in the category. As per the study, which uses 'household income' as the criterion, a family with an annual income between Rs 3.4 lakh to Rs 17 lakh (at 2009-10 price levels) falls in the middle class category. NCAER also said with increase in village incomes and growing urbanisation, the percentage of rural population in the total middle class of the country will reach 48.8 percent by 2025-26 from 37.4 percent at present. This apparently is the result of development work, which happened under the five years plans and other special programmes such as land reforms, rural electrification rural communication, and rural credit facilities, etc. The absolute size of the rural market is thus expected to double that of urban India. But despite the high rural share in these categories, the rural penetration rates are low, thus offering tremendous potential for growth. According to Mr. D. Shivakumar, Business Head (Hair), Personal Products Division, Hindustan Lever Limited, the money available to spend on FMCG (Fast Moving Consumer Goods) products by urban India is Rs. 49,500 crores as against is Rs. 63,500 crores in rural India. GROWTH IN MARKET The purchasing power in rural India is on steady rise and it has resulted in the growth of the rural market. The market has been growing at 3-4% per annum adding more than one million new consumers every year and now accounts for close to 50% of volume consumption of FMCG. The growth rates of lot of FMCG are higher in rural markets than urban markets. In product categories like toilet soaps, talcum powder, cooking oil, vanaspati ghee, tea, cigarettes and hair oil, the share of rural market is more than 50%. The estimated annual business from rural markets was Rs 1,23,000 crore, comprising Rs 65,000 crore of FMCG, Rs 5,000 crore of durables, Rs 45,000 crore of agricultural inputs including tractors and Rs 8,000 crore of two-wheelers and fourwheelers. 8
  • Marketing Management Twenty nine per cent of the rural people own cars, 27 per cent own colour televisions, 24 per cent own refrigerators and 10 per cent own washing machines, which points to the untapped potential in the rural areas. Table 2 : Rural FMCG Market Projections Year 2011 2020 Turnover (in lakh crores) 1.25 4.00 Fast Moving Consumer Goods (FMCG) will be witnessing more than 50% of growth in its Rural and Semi Urban Segments by 2012 which in totality is projected to grow at an CAGR of 10% to carry forward its market size to over Rs.1,06,300 crore from present level of Rs. 87,900 crore, according to an analysis carried out by the Associated Chambers of Commerce and Industry of India (ASSOCHAM). General Strategies by FMCG Majors for Rural market     More product variants More product categories Attractive price points Different marketing and distribution channels 9
  • Marketing Management HINDUSTAN UNILEVER LIMITED Rural Markets While general trade encompasses both urban and rural markets, serving customers in more remote areas of India poses unique challenges. Rural markets are scattered over large areas with low per capita consumption rates. While the aggregate potential of rural markets is large, the potential of each of the 600+ dispersed markets is very low. As well, rural markets are not connected to urban centers by air or rail, with road connectivity poor at best. Accessing these markets, even when feasible, means additional logistics costs to HUL. Despite the roadblocks, conquering the rural markets is a must for HUL. One out of every eight people on this planet lives in an Indian village. In comparison to the urban market, which consists of roughly 250 million people, the rural market is 775 million people across 638,000 villages. Within ten years, per household consumption in rural India is forecasted to equal today’s urban levels. To penetrate the rural markets, HUL launched a unique four tier distribution system. Markets were segmented based on their accessibility and business potential. Marketing Strategies  Direct Coverage: HUL appointed a common stockist to service all outlets within a town and sell a limited selection of the brand portfolio. Towns consisted of populations of under 50,000 people.  Indirect Coverage: HUL targeted retailers in accessible villages close to larger urban markets. Retail stockists were assigned a permanent route to ensure that all accessible villages in the vicinity were served at least once a fortnight.  Streamline: Streamline leveraged the rural wholesale channel to reach markets inaccessible by road. Star Sellers were appointed among wholesalers in a particular village. Star Sellers would purchase stock from a local distributor and 10
  • Marketing Management then distribute stock to retailers in smaller villages using local means of transport (e.g. motorcycles, rickshaws). RURAL MARKETING CAMPAIGNS Khushiyon ki Doli Hindustan Unilever (HUL) new target for 2010 is to reach – the most happening part of India – the rural India. The latest brand building initiative by the HUL in the rural India is “Khushiyon Ki Doli”.The main motto behind the campaign is to create awareness with the use of technology and engaging the common mass. And Hardaurpur is the first destination. There are four set of dolis or palkis being moved all around the village. Equipments like LCD TV, a DVD Player and a small generator is there in each of these dolis or palkis. The village housewives are the main target of audience. The wide ranges of HUL’s products commercials are being shown in these LCD’s. as a common human habit it has been observed that the rural masses always look upon the urban mass and what about the urban mass? They tend to look upon the metro lot. HUL new campaign can easily grasp the rural housewives and children. Soon the LCD’s are on these rural crowds stands awe keeping close view of the video with full concentration as its something new for them. They hardly get the chance to have a view to all these. In the urban people hardly look at the commercials. Here makes the final difference. These commercials of Surf Excel, Close Up toothpaste to Huggies diapers etc all have enchanted the rural lot. It’s more effecting to them. To make the campaign more interesting HUL has also organised few games at the end with prizes. And again there is commercialisation. The winners are given with special offers on bundles products few sachet as prizes. 11
  • Marketing Management Next move by the HUL is to the local retailers big or small. Brand building is the main target for HUL. HUL tried to engage these retailers with new purchase of the merchandize and new sale of the stock to them. Project Shakti Project Shakti is a rural distribution initiative of Hindustan Unilever Limited (HUL) that targets small villages populated by less than 5,000 individuals. It is a unique win-win initiative that catalyses rural affluence even as it benefits business. Project Shakti benefits business by significantly enhancing HUL's direct rural reach, and by enabling HUL's brands to communicate effectively in media-dark regions. It also impacts society by creating livelihood opportunities for underprivileged rural women. Project Shakti impacts society in two ways - the Shakti Entrepreneur programme creates livelihood opportunities for underprivileged rural women. As competition is increasing day by day, its difficult to maintain the leader position & to further strengthen the distribution network HUL made the project called Project Shakti which will serve the following purpose: 1. To Reach  Small scattered settlements and poor infrastructure make distribution difficult.  Over 5,00,000 villages not reached directly by villages. 2. To Communicate  Low literacy hampers effectiveness of print media.  Poor media reach – 500 million Indian lack TV & Radio. 3. To Influence  Low category penetration, consumption. 4. Awareness  Per capita consumption is 33% of Urban level. 12
  • Marketing Management BrookeBond Sehatman strategy for a healthy initiative in Rural India Thus began extensive research using the company's internal tracker called Living Standards Measure (LSM) to determine the success of the product. LSM can range anywhere between one and 18 - a higher score shows a higher living standard. For Sehatmand, HUL needed to target LSM 14 individuals (those who cannot afford their own mode of transport) the bulk of who reside in rural areas. Research reiterated what HUL felt. India has over 200 million undernourished people, the largest in any country. Nearly 70 per cent of the population is deficient in iron, vitamins and minerals. But with growing awareness, research showed that these people were concerned about their access to supplements. "Tea is a widely consumed product with 95 per cent penetration." Differentiating factors Taste too has been given priority based on geographic preferences. "Taste palates vary across the country, which is why tea has largely been a regional product. So, Sehatmand in Uttar Pradesh will not taste the same as in Maharashtra," Srinivas says, thus, for each region the company has come out with a unique taste, colour and aroma. For instance, South India has a strong preference for strong and dark tea, while North India is inclined towards taste and aroma rather than colour. HUL has paid close attention to these nuances. Restructuring Distribution Channels HLL has also established a single distribution channel by consolidating categories. The channel seeks to build a network of sub-stockists. In 2003, about 6000 such sub stockists were appointed to service 50,000villages with a total population of 250 million. LIFEBOUY SWASTHYA CHETNA PROGRAMME 13
  • Marketing Management Lifebuoy's “Swasthya Chetna” (LSC) was a five-year health and hygiene education program initiated by Hindustan Lever Limited (HLL), the Indian arm of the fast moving consumer goods (FMCG) major, Unilever. The program was formally launched in 2002, in eight states across India. The objective of this program was to educate around 200 million people in rural and urban areas about the importance of adopting good 'health and hygiene practices. The program spread awareness about germs and their adverse effects on health, and how proper 'health and hygiene practices, such as bathing and washing hands with soap could prevent diseases like diarrhoea. According to HLL, LSC was not a philanthropic activity, but a marketing program with a social benefit. HLL sought to grow the Lifebuoy brand in India by attracting those consumers who never used soap. In the process, the company sought to bring about a behavioral change by convincing people to use soaps more frequently, thus creating more users for its brand. This program was also seen as a successful case for public-private partnership. 14
  • Marketing Management PROCTER & GAMBLE Strategies SANGEETA BHABHI AND KAMYAB JODI INITIATIVE Bhabhi is no relation to her infamous online character, but an icon created by consumer goods major Procter & Gamble to hardsell its stuff in rural India. After a two year long push into the hinterland, P&G has come up with a new addition to its marketing strategy in the form of a character called Sangeeta Bhabhi, a dedicated housewife. The personality was conceived to push P&G’s leading brands, Tide and Head & Shoulders as a dual proposition called ‘kamyab jodi’ in rural areas of the country. After much deliberation over the eight to nine categories that P&G operates in, marketers picked the detergent brand Tide and shampoo Head & Shoulders as the focus in this particular rural initiative. Last March, more than 100 villages in central UP were covered as part of the pilot stage of the ‘kamyab jodi’ initiative. The exercise involved teams narrating Sangeeta Bhabhi’s story, an educated married woman, who highlights the benefits of using the two brands. Sandeep Bansal, country head - Xpanse, the agency handling the particular rural activation, says the particular style was used to communicate the value add proposition of the brands. “Tide is a value added brand priced higher than the regular brands. The challenge was to communicate it to the target audience on the benefits of using a brand superior in quality,” explains Bansal. 15
  • Marketing Management AMBITIOUS STRATEGIES OF SOME OF THE MAJOR COMPETITORS CavinKare Growth Highlights  Chennai-based CavinKare Limited has launched the Fairever skincare cream. taking the dominant. HLL's Fair & Love!)' by surprise. Fair & Lovely had a 97% market share but Fairever has already garnered a good 14%share of the roughly Rs. 650 crore fairness cream market.  The company has also entered the toilet soap market with the launch of Meera herbal soap. It is planning to introduce a range of other soap brands as well as detergents. Thus directly competing with Nirma. Procter and Gamble (P&G) and HLL.  In the hair care segment too. It launched its Chik brand through the small packaging sachet route and has picked up a sizeable market sharerough!)' 15%of the RS.840 crore shampoo market - in just two years. Strategy  ACQUISITION STRATEGY - It has decided that apart from an organic growth. it would even take to the brand acquisition route.  PRODUCT INNOVATION - CavinKare is also trying innovations in pricing and packaging areas. For example, In May 2001 it launched a single-use perfume Spinz Singlez priced at Rs. 1.50 per sachet. This is expected to drive usage 16
  • Marketing Management and volumes by expanding the Rs. 66 crore category. Current. It is estimated that only one percent of the population use perfumes. Chik's shampoo sachets priced at 50 paise have already created waves in the market. Within ayear of its launch. the shampoo penetration in the country grew from 17.90% to 19.4%.  R&D and BUDGET ALLOCATION – Today, the company spends around 4% of its turnover on R&D and close to 25% on advertising and marketing while constant upgrading its offerings based on consumer feedback.  LEARNING FROM PAST - It has employee forums like 'cross functional teams' which discuss and plan new product developments while sharing learning and insights from its successes and failures. The company also records its brand histories on compact disks for the benefit of new employees. 17
  • Marketing Management DABUR Strategies Project Astra Shopkeepers selling Dabur India's consumer products would now learn marketing through role-plays staged by professional actors at their shops. As part of a recent initiative titled Astra, advanced sales training for retail ascendance, FMCG major has recruited 75 sales and HR managers across the country who would educate over 2,000 distribution channel partners of the firm about the complexities of sales and distribution through the audio-visual medium in 5 vernacular languages since 75% of its sales comes from Rural market only, they are Bengali, Tamil, Telugu, Malayalam and Kannada. Dabur needed to bring awareness among the distributors and a standardisation into our system across India and so Astra was created. Events and Contests India's largest hair oil brand Dabur Amla Hair Oil is hosting the first-ever Dabur Asli Amla Star Ki Khoj – a unique contest to identify the girl with the best hair across India. The winner of this contest in each city round will be featured in an advertising campaign along with Bollywood celebrity and Dabur Amla Hair Oil Brand Ambassador Rani Mukherjee. 18
  • Marketing Management BIBLIOGRAPHY  http://popupcity.net/2012/07/procter-gamble-launches-qr-truck-store/  http://www.financialexpress.com/news/procter-amp-gamble-aims-marketingcampaigns-at-black-consumers/107683/  http://thesocialmarketplace.org/casestudy/hindustan-unilever/  http://www.slideshare.net/jamilabano/hindustan-unilever-its-marketing-strategies  http://www.financialexpress.com/news/hul-itc-take-battle-to-villages/658713/0  http://www.financialexpress.com/news/hul-itc-take-battle-to-villages/658713/0  http://www.iilm.edu/iilm-online/Casebook/Cases2007/5.pdf  http://www.scribd.com/doc/49606209/1152-MARKETING-STRATEGIES-OF-HUL  http://www.vsrdjournals.com/MBA/Issue/2012_02_Feb/Web/5_KC_Behura_584_Resea rch_Communication_Feb_2012.pdf 19