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Acc to 2001 census – 74 crore population 12 crore households – 70% of total Location Pattern: A scattered market – Urban population in 3,200 cities Rural population in 5,70,000 villages <1.1% - 5000 >55% - 500 >25% - 200 Slide 4: Socio-economic Position Low purchasing power/per capita income Bounded by tradition, culture, religion & community. 60% rural income from agriculture >50% have income < Rs. 25,000 About 14% have income >50,000 In recent years, 70 % rural households have started saving their income. (service class, non-farmers like shop keepers) Slide 5: Culturally a Diverse & Heterogeneous Market In terms of – religious, linguistic, social & cultural factors. State to state variation in extent of development From study conducted by IMRB (Indian Market Research Bureau) provides development index points for each state on Health & education Availability of public transport Electricity TV transmission Banks Post offices Water supply, etc Average villages have 33 index points In Kerala – 88 index points Bihar – 22 UP, MP, Rajasthan – close to 22 Maharashtra, Haryana, Karnataka – 40-50 Slide 6: Literacy level: Rural India has literacy rate of 28% compared with 55% of the whole country. Scenes have changed since last few years. Literacy rate has increased from 20% to 28%. Every year 8 million people get added to rural India's literate population Adult literacy programmes have been launched Lifestyle: Conservative & tradition bound. But it has changed to a good extent due to: Increase in income Growth in education Enlarged media reach Growing interaction with urban area Marketer's effort to reach rural areas Slide 7: Buying Behaviour: factors that influence Literacy level Occupation Social & cultural factors Exposure to media Exposure to urban lifestyle Marketer’s efforts The way the product is used. Involvement of others in the purchase The buying Behaviour has undergone a major change. There are people in the rural area whose income has increased & they have the potential to buy expensive products. The Rural Demand:Some well established products : The Rural Demand:Some well established products Pressure cooker Cooking utensils Batteries Cycles, bikes, scooters Radio/tape Pesticides, fertilizers Tea Toothpowder/paste Sewing machines Artificial jewelry Medicines Tobacco & products Bathing soaps, washing cakes, washing powder Cell phones Fans TV Wristwatches Recent Trends : Recent Trends Steady growth Welcome change in the composition of Rural Demand. Several products already well established in the rural market In many products, rural consumption accounts for a larger share than urban In many products, rural market has overtaken the urban in growth rate – detergent powders, washing soaps, analgesics. Position of durables - (bicycle – 53, ceiling fan – 19, radio - 42 ) Slide 10: Who buys the high-priced durables in the rural areas? NCAER (National Council for Applied Economic Research) classified durables into 3 categories- Low priced durables – watches, radios, irons, fans, etc. Relatively higher priced durables – b/w TV, sewing machines, mixers 2-in-1 music systems. High aspiration & high priced – color TVs, refrigerators, motorized two-wheelers. Factors behind the Growth & Diversification in rural demand – New income due to agricultural/ rural development Green revolution since 1970. New employment, income & purchasing power. Slide 11: The expectation revolution – The rising expectations have enlarged the desire & awareness. Strengthened their motivation to work, earn & consume. Rural demand is more seasonal – Agriculture dominates the income source. Purchasing on marriages & festivals (also the harvesting time) Rural Market Becomes Attractive To Corporates : The growing opportunity, one main driver - Rural demand is growing rapidly Increase in income/purchasing power has increased in access of products. Heat of competition in the urban market – Growing competition in the urban market Rural market is largely untapped (advantage to early entrants) Competition in urban area is tough for products whose penetration is high. (E.g. – toothpaste penetrates to 80% in urban & 30% in rural market) Brand loyal customers in urban. First time users in rural. Not competing in the rural market will keep them out of about half of country’s market Rural Market Becomes Attractive To Corporates Slide 13: Many cos. Have already taken to the rural market in a big way Tapping the Rural Market : Tapping the Rural Market Segmentation & Targeting Product Management Physical Distribution Channel Management Sales Force Management Marketing Communications Segmentation and Targeting : Segmentation and Targeting Geographic segmentation Climate & level of irrigation Nearness to a feeder town/industrial project Demographic segmentation Population concentration Age Literacy level Income – regular income & seasonal income Buying behaviour segmentation Sources of data on rural consumers – CMIE (Centre For Monitoring India Economy) Thompson rural index Product Strategy : Product Strategy Whether the product that is sold in the urban market can be supplied as it is or need any modification. Economic and income realities should be considered. Lower priced versions do succeed in many cases but not in all cases. Slide 17: Specifically designed products The Tractor/trailer Eveready’s Jeevan Saathi Torch Model Variants - bikes Colour Variants – Asian Paints Different products/models, brands, packing, pricing & positioning Package design & pack size Logos symbols & mnemonics Brand decisions Sell value brands, not cheap brands Preconceived notions have no place Physical distribution : Physical distribution PROBLEMS: Transportation & warehousing Cost – service dilemma becomes more acute – transportation & warehousing costs r high The delivery van – ITC & HUL have their own vans. High costs can be covered if business is good Channel management : Channel management Problems: multiple tiers add to the costs Non-availability of dealers Poor viability of outlets – manufacturer- additional expenses & shopkeeper- no returns Inadequate banking and credit facilities – 50 villages & 1 bank branch The village shop is the key to rural distribution Improving the viability of the outlets – deal in no. of product lines. Sales force management : Sales force management What a salesman requires to be in rural market Willingness to be located in rural areas Cultural congruence – guide in choosing the right product and not forcing to buy everything or anything Attitude factors – salesman should be patient & should have perseverance. Knowledge of local language Ability to handle several product lines Creativity – create consumption pioneers & opinion leaders Managing rural sales force – practical training to rural sales force Marketing communications : Marketing communications Selecting the media mix TV Cinema Radio Print media Outdoor POPs Audio-visual/publicity vans Syndicated AV vans Puppet shows, Harikatha Music cassettes Communication should be uniquely assembled & delivered Need for creativity – buyers are time consuming HUL’s rural communication for surf Rural Marketing Is Developmental Marketing : Rural Marketing Is Developmental Marketing You do not have the permission to view this presentation. In order to view it, please contact the author of the presentation.