This document discusses strategies for accessing rural consumers in India. It begins with an agenda that outlines background information, case studies, and recommendations. In the background section, it notes the improving infrastructure and connectivity in rural India, as well as rising incomes and aspirations. It also discusses challenges to rural marketing like low literacy, access to credit, and distribution challenges. The case studies section examines initiatives by companies like HUL, ITC, GSK, and Coca-Cola to better reach rural consumers through approaches like micro-entrepreneur programs, e-commerce platforms, reformulated products, and partnerships with local organizations. Key recommendations include designing affordable products, involving communities, using appropriate communication methods, exploring new distribution channels, and focusing on both
Expanding beyond the metros in india - Bottom of the Pyramid marketing
1. Proprietary and Confidential
Expanding Beyond the Metros: How to Access
Bottom of the Pyramid Consumers in India
Executive Briefing Teleconference – 6 December 2011
2. 2
Dr. Harshit Jain MD, MBA
Senior Vice President – Strategy Development,
VIA MEDIA GROUP
Dr. Harshit Jain is the Senior Vice President - Strategy at Via Media &
Communications, a comprehensive Healthcare Communications
organization based in India. He advises the brand management for over 35
brands for various multinational pharmaceutical, consumer healthcare &
Medical Device clients. He is also in the process of creating MED MEDIA,
which he considers is an outcome of evolution for Healthcare Professionals
from Social Media & Professional Media and hope to revolutionize the
entire Healthcare Practitioner Landscape vis a vis Healthcare , Medical
Device & Pharmaceutical Organizations.
Dr. Jain is former VP of Altruista Health, a health services and technology
company based in Reston, Virginia. His experience and expertise extends
across a wide range of areas including brand management, establishment of
SBUs, healthcare communication, health insurance, disease management,
direct clinical care, and health program/benefits design.
Dr. Jain completed his medical training from University College of Medical
Sciences and also has a Masters in Business Administration from the Indian
Institute of Management.
3. 3
AGENDA
§ SECTION I – Background
§ SECTION II – Case Studies
§ SECTION III – Recommendations
§ Questions and Answers
4. “Four Billion poor can be the engine for next round of global trade and prosperity.
Serving the Bottom of the Pyramid consumers will demand innovations in Technology,
products and services, and business Models. More importantly it will require large firms
to work collaboratively with civil society organizations and local governments.”
C.K. Prahlad
11. GM drives into rural
markets to spark
sales …………..MINT
Mobile Phone vendors dial
into rural segment
…………….ECONOMIC TIMES
Hero Honda to focus
on rural Markets……
Domain –B
LG to focus on rural
markets to fight slowdown
…………….ECONOMIC TIMES
Cement firms shift focus to villages … BUSINESS STANDARD
12. Infrastructure
> In last 50 years, 40% villages have been connected
by road, in next 10 years another 30% would be
connected
> More than 90% villages are electrified
> Rural Telephone density has gone up by 300% in
the last 10 years
> Number of pucca houses doubled from 22% to
41%
Media Penetration
> 41 million Kisaan Credit Cards issued.
> 42 mn rural household are availing banking
services in comparison to 27 mn urban HH
> Of the total 20 mn rediffmail signup , 60% are
from small towns.
Disposable Income
> 72% of the Population contributes nearly half of
GDP
> 6 Lakh + Villages, 36 Lakh Shops
> Percentage of BPL families declined from 46% to
27%
Aspirations
> 60% of the Goods Consumed by Rural in India
> By 2030, Rural will be 4 times the size of Today’s
urban Market
> Rural Literacy improved from 36% to 59% in past
two decades
What is
Changing ?
13. Availability Affordability
Acceptability Awareness
CHALLENGES IN RURAL MARKETING APPROACH
ü Lack Regular Cash Flow
ü Little access to Credit
ü Low per capita Income
ü Traditional Methods of
Advertising difficult
ü Low Literacy
ü Physical communication
facilities difficult
ü Conventional
Distribution channel
not effective.
ü High Cost of Creation
ü Vast & uneven spread
ü Barriers – Cultural ,
Social
ü Multiple Languages ,
Dialects
ü Seasonal demand
patterns
ü Product positioning
14. PRODUCTION à SALE CYCLE FOR BOP
Product Design
&
Manufacturing
Distribution
Marketing &
Promotion
Purchase by
End Consumer
ü Product Relevance – Social
Determinant
ü Low Price Packs – Entry barrier
low
ü Induce Trial
ü Educate
ü Usage of Acceptable tools of
promotion
ü Use Platforms, commonly visited
ü Social , Emotional Connect
ü Repeat purchase
ü Word of Mouthü Involvement of the Community
ü Community Empowerment
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AGENDA
§ SECTION I – Background
§ SECTION II – Case Studies
§ SECTION III – Recommendations
§ Questions and Answers
17. HUL – PROJECT SHAKTI
■ Collaborated with Self-Help Groups (SHG) to extend rural reach by offering them
opportunities for business.
BUSINESS OBJECTIVE
■ Direct reach into untapped markets through local influencers
■ Sales and distribution initiative that delivers growth
■ Communication initiative that builds brands
■ Micro-enterprise initiative that creates livelihoods
SOCIAL OBJECTIVE
■ Provide sustainable livelihood opportunities for underprivileged rural women.
■ Social initiative that improves the standard of life in rural India by providing quality
products.
■ Scalable and sustainable
Started with 17 women in two states. Today, it provides livelihood enhancing
opportunities to about 45,000 women in 15 Indian states and provides access to quality
products across 100,000+ villages and over 3 million households every month.
18. LIFEBUOY - HUL
■ Reformulation : Added Floral Scent, Milled Soap for longer life and more lather
■ Change in Price : Low Cost
■ Awareness : Soap only associated with removal of visible dirt, Mass Media Radio & TV not
available.
■ Community Involvement : Hired two-person “facilitator” teams to go into village schools
and initially teach youngsters between the ages of 5 and 13 about the problems that can be
caused by invisible germs and how they can be largely eliminated by washing hands with
soap. Parents and village elders are then approached with similar messages.
Most cases of diarrhea can be prevented simply
by washing hands with soap. In India, which
contributes 30% of all diarrhea deaths in the
world, surveys indicate that even though 95% of
Indian households own soap, only 30% use soap
daily.
19. E-Choupal - ITC
■ Offers the farmers all the information, products and services they
need to enhance farm productivity, improve farm-gate price
realization and cut transaction costs.
■ Madhya Pradesh,Uttar Pradesh, Andhra Pradesh, and Karnataka
■ Recognized as India’s largest Internet-based initiative, covering
1,300 choupals, linking 7,500 villages, and serving almost 1
million farmers.
■ Altogether, more than Rs 1 billion (US$21 million) in
transactions have occurred so far.
■ KEY REASONS FOR SUCCESS
l Partnerships built with academia and NGOs to create and
document relevant knowledge about agricultural practices that
are useful for farming communities.
l Participatory method in which ITC tried to understand the
information needs of rural communities.
20. HORLICKS ASHA - GSKCH
■ People in rural areas were not regular users of Horlicks because they were short of cash. They could
afford to buy it rarely and would make it last for months. The company needed a product that could
be used on a regular basis.
■ Reformulation : Horlicks Asha, along with a Small Low Price pack
■ Change in Price : 40% cheaper than the mainstream brand
■ Test-marketed in pockets of Andhra Pradesh & Karnataka.
■ Promotion
l Distribution
– Added 4,000 sub-distributors to its existing 500 distributors in smaller towns.
l Awareness
– Series of street plays for introducing the product.
– Screening movies and taking the product message across.
– Participated in 60 Village Fairs
– Tie up with a microfinance group ( SKS Finance ) to distribute 75,000 Samples
PROJECT FAILED – PRODUCT WITHDRAWN
21. Micronutrient
Deficiencies
Prevalence
(World wide)
Success of
Interventions
Solutions
Low Medium High
Good Moderate Low
Iodized Salt
with Ki & KiO3
Natural & Synthetic
Vitamin A
Food Fortification &
Supplementation
Iodine Vitamin A Iron
ü Price : Low Price , Small Unit Packs
ü Taste & Form : Acceptable, Iron Fortified Beverage
ü Distribution : NGO Partnership with Community
Engagement
ü Marketing & Promotion : Women Empowerment with
creation of Women Entrepreneurs
VITINGO : COCA COLA INDIA
22. ü Initiated Partnership with BISWA in 2009
ü Effectively utilize BISWA infrastructure (Office and Manpower) to reach out to >
9,00,000 women beneficiaries.
ACTION
ü Initiated Partnership with Madura Micro Finance in 2010
ü Create Women Entrepreneurs to reach out to > 5,00,000 women beneficiaries across
the State.
ü Initiated Partnership with Gajam India in 2011
ü To Create Village Level Entrepreneurs (Women) to reach out to > 10,000 schools in
Bihar.
Currently in talks with MYRADA to:
ü Co-create a small scale production unit at the village level that will be independently managed by
a MYRADA Community Manager
ü To integrate the production capacity with Government of Karnataka to on-board Vitingo on to the
National Rural Health Mission (NRHM) project on iron deficiency alleviation.
ORISSA
TAMIL NADU
BIHAR
KARNATAKA
23. GE HEALTHCARE
■ PRODUCT - ECG for rural Market
l Low Price , reducing the cost of a single ECG exam to as little as the price of a bottle of water for
rural patients
l Incorporating a smaller printer
l High Battery Life. Moreover, battery performance has been enhanced, enabling as many as 500
ECG readings on a single battery charge.
■ MARKETING - It’s through direct sales efforts that GE is making strides into the rural and semi-
rural markets in India, and slowly making an impact on the quality of rural health.
OTHER PRODUCTS
■ Low Cost Infant Warmers
■ Portable Ultrasound Machines
24. NOVARTIS – AAROGYA PARIVAR SCHEME
■ KEY OBJECTIVE
l Creating Awareness
l Enhancing Local Availability
l Developing Affordable Health Solutions
l Innovative Direct Approach to make villagers aware or prevalent diseases and encourage them to
seek treatment
■ DECENTRALISED MODEL
l The Field force is in Autonomous Cells. Each Cell has Health Educators and supervisors who
collaborate with Local Health professionals, pharmacy chains and NGOs to address the whole
“patient flow” including education, diagnosis , treatment, delivery and availability and
accessibility of medicines.
l Offering patients integrated solutions to Health Probems rather than mainly selling products to
Health Professionals.
l Low Cost, Small Size products
25. MORE CASE STUDIES – OTHER INDUSTRIES
■ Telecom : Cellular Phone Network
■ Banking : Financial Inclusion
■ Mobile Instruments : Nokia
■ Healthcare Delivery : Narayan Hrudalaya , Sankar Netralaya, Arvind Eye Center
■ Insurance : MicroInsurance , Microfinance corporations
■ Automobile : Hero Honda, Mahindra
■ Development Organizations : GAIN ( Fortified Wheat Flour , Milk , Edible Oil ) , Micronutrient
Initiative
■ FMCG : Lehar Iron Chusti,HUL Pureit,Britannia Nutrition Foundation
■ Pharmaceutical : Abbott,Elder Pharmaceutical ( Elvista ), Novo Nordisk ( The Changing Diabetes
Barometer Project ), Eli Lily
■ Medical Device : GE , Roche
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AGENDA
§ SECTION I – Background
§ SECTION II – Case Studies
§ SECTION III – Recommendations
§ Questions and Answers
27. RECOMMENDATIONS – KEY LEARNINGS
l Product Design
– Firms should refrain from designing goods for the urban markets and subsequently pushing
them in the rural areas.
– Social Determinants should be considered
l Price & Packaging
l Community Involvement & Engagement
l Communication Media & Messaging should be relevant to the Target Audience
– The audio visuals must be planned to convey a right message to the rural folk. The rich,
traditional media forms like folk dances, puppet shows, etc., with which the rural consumers
are familiar and comfortable, can be used for high impact product campaigns.
– Usage of More Influencing Media
l Effective & Efficient Distribution Channels should be explored.
l New PPP ( Private- Private Partnership ) should be explored as an evolution of PPP ( Public-
Private Partnership Model )
l Awareness may be a bigger challenge than affordability , so price should not only be considered,
rather stress should be laid on awareness part as well.
l Market Development Costs should be low.
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AGENDA
§ SECTION I – Background
§ SECTION II – Case Studies
§ SECTION III – Recommendations
§ Questions and Answers