Rural marketing in pakistan mirza shakeel

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Rural marketing in pakistan mirza shakeel

  1. 1. Rural Marketing in Pakistan
  2. 2. i am
  3. 3. Why Rural Pakistan IsImportant ???
  4. 4. 68% Population 32% Population
  5. 5. Thanks to TV Awareness in Rural Has Increased
  6. 6. Exponential Growth30% plusOrganic Growth (2o10)
  7. 7. Around35% S …of major companies comes from Rural Pakistan
  8. 8. Changing Market Place Modern Trade Wholesale Wholesale Family Grocers Retail Pharmacy/Mass Retail Rural
  9. 9. In the world 2.5 Billion peopleearn 1500$ plus per year …and remaining 4 Billion people Earn less than 1500$
  10. 10. Majority of these4 Billion people Lives in Rural
  11. 11. Key Factors InRural Marketing
  12. 12. 1. Awareness
  13. 13. 2. Availability
  14. 14. Vast Geographical Spread Trade Off Between Distribution Cost & Incremental Penetration
  15. 15. 3. Affordability
  16. 16. Low Disposable Income Avg. Monthly Consumption Rs.8945/- Vs. Income Rs.10,929/-
  17. 17. Dependent UponVagaries Of Monsoon
  18. 18. 4. Acceptability
  19. 19. Customization Vs.Standardization Low Price & Low Margins
  20. 20. Shopkeepers At Rural Divided into Wholesalers & Retailer
  21. 21. Assortments Carried Karyana Items Smaller SKU’s of Branded Items Unrelated ItemsVegetables, Ice etc
  22. 22. Ideas For Effective Rural Marketing
  23. 23. 1. Product Offering
  24. 24. Smaller SKUs Single Serving(per capita or per time period)
  25. 25. DistinctivePackaging Brands are identified & differentiated on basis of color Mainly due to illiteracy
  26. 26. 2. Price
  27. 27. Attractive Price Points Rs.10 sachet contributes around 50% in surf sales Rs.10 sachet major growth driver for powder creamer Rs.10 sachet rapidly growing despite challenges from smuggled tea
  28. 28. Per Gram Costing Brand Large SKU Sachet Surf Excel 0.20 0.17 Everyday Tea Whitener 0.43 0.40 Sunsilk Shampoo 0.78 0.60 Cheaper Small SKUs enhances consumer acceptance
  29. 29. Attractive Retail Margins For Retail Penetration & Advocacy
  30. 30. Retail Margins Brand Large SKU Sachet Surf Excel 4.7% 5.5% Supreme Tea 5.1% 11.1% Everyday Tea Whitener 8% 8% Sunsilk Shampoo 9.7% 9.7% Better Retail Margins on Small SKUs improves retail penetration
  31. 31. Credit to Retailers improves Trade Relationship & Product Penetration
  32. 32. 3. Promotion
  33. 33. Connect in More Understandable Way Use local dialects to engage consumers
  34. 34. Use Customized Media
  35. 35. Trade Engagement Activities P&G Golden Stores 2% for Displays Sachet Display Drives Unilever ProjectInterface paying 6-7% & Perfect Shops for small stores
  36. 36. Contribute Towards the Society CSR Activities creates a positive brand/company image
  37. 37. 4. Distribution
  38. 38. Wholesale ChannelPlaying Dominant Role Distributor Wholesellers These wholesalers supplies product to rural Retailers retailers. Products supplied included branded & loose (unbranded items) Traditional Rural Distribution System
  39. 39. Direct Distribution to Rural Retailers Distributor Wholesellers Retailers Product directly distributed to rural retailers ensuing product availability & minimizing the influence of wholesale Direct Rural Distribution System
  40. 40. Major Hurdle inDirect Distribution Cost of Distribution
  41. 41. …which is overcome bysubsidizing rural distributions Subsidy varies from 50% t0 100% of expenses
  42. 42. Rural Sales Van Costing Heads Unilever Unilever (Retail Extension (50% sharing) program 100% sharing) Rentals (Rs. 700/day @ 25 17,500 17,500 days) Unilever Subsidizing its rural distributorsFuel (Rs. 5/km cost & avg. 50 6,250 6,250 km/day) Salesman Salary 7,500 7,500 This subsidy varies from 50% to 100% in Loader Salary 4,500 4,500 (Retail Extension Program) Total Cost 35,750 35,750Breakeven Sales (assuming 1,021,428 1,021,428 3.5% avg. dist. margin) Estimated sub-dist margin 35,000 35,000 This subsidy helps in ( at 3.5% net margin ) (assuming Rs.40,000 (assuming Rs.45,000 sales/day) improving distributors ROI sales/day) & numeric expansion Company Sharing 17,875 (50% cost 35,750 (100% cost sharing) resulting in overall rural sharing) stronghold Net Dist Margin 17,125 (1.7%) 35,000 (3.4%) An Example Of How Subsidy Helps
  43. 43. Through Subsidy… …make distribution infrastructure Self Sustaining
  44. 44. But… Major Challenge
  45. 45. 201021% Shrinking consumer disposable income Maintaing price points becoming difficult for companies 2009 24% 2008 8% Increasing Distribution cost & struggling ROIs of distributors Consumer Price Index Inflation
  46. 46. Attractive Price Points Surf Excel promoting Rs. 15 SKU Rs.10 sachet contributes 50% plus in surf sales Decreasing weight Rs.10 sachet major growth driver for powder creamer Decreasing weight Rs.10 sachet rapidly growing despite challenges from smuggled tea
  47. 47. Pressure on Purchasing Power
  48. 48. So Companies Need to be very ….
  49. 49. In Short… Smaller Affordable Inflationary SKUs pressures Customized Media Right Price Points Rural Marketing Collaborative … Distribution Better Retail Margins
  50. 50. SoRural Marketing Is…
  51. 51. ProvidedYou Move With
  52. 52. Sources www.statpak.gov.pk www.flickr.com www.google.comwww.research.nestle.comHUL CDM Sanjiv Kakkar

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