RURAL market in India

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Presented by:-Sumit Kumar Chaubey (MBA)CERT Meerut Rural Market In India Under the valuable guidance of MISS RINKEY SHARM ( lec .) & Mrs Shivani Verma CERT, Meerut

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Rural Market Environment The Rural Consumer The Rural Demand Other Aspects

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Size of Rural Consumer Group * Rural population is about 73% of the total population of India * According to 2001 census the total rural population amounts to 74 Crore * 12 Crore households – 70% of the total Location Pattern A Scattered market the comparison below shows the same – * Urban Population is spread over 3,200 cities * Rural population is spread across 5,70,000 villages The Rural Consumer A Detailed Profile

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Low purchasing power & Per Capita Income Bounded by tradition, culture, religion & community 60% of rural income is from Agriculture More than 50% rural households have monthly income < Rs 25,000 About 14% have income > Rs. 50,000 In recent years, 70% rural households have started saving/investing their income Socio-Economic Position

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Culturally a Diverse & Heterogeneous Market in terms of Religious, linguistic, social & cultural factors State to State variation in extent of development From a study conducted by IMRB (Indian Market Research Bureau) provides development index points for each state on Health & Education Transportation Electricity TV Transmission Banks Post Offices Water Supply Average villages have 33 index points Socio-Economic Position

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Literacy Level Rural India has a literacy rate of 28% compared to 55% of the whole country Lifestyle Conservative & tradition bound There has been a change in the same over the years though with Increase in Income Growth in Education Greater Media Penetration Marketers efforts to reach and capture the rural market’s Socio-Economic Position

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Buying Behavior Factors that Influence Literacy level Occupation Social & Cultural Factors Exposure to Media Marketer’s Efforts The buying behavior has undergone a major change. A huge population in rural areas has seen an increase in their income as a result of which they have the potential to buy expensive/luxury products Socio-Economic Position

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Some well established products Pressure Cooker Artificial Jewellery Cooking Utensils , Medicines Batteries Tobacco Products Scooters, Motorcycles Soaps, Detergents Bicycles Electrical Goods (fan,light) Radio T.V Pesticides, Fertilizers Wrist Watches Tea ,Mobile Phones Sewing Machines The Rural Demand

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Steady Growth from the past 2 decades Welcome change in the composition of Rural Demand Several products already well established in the rural market In many products the rural market share is greater than the urban market In many products rural market has overtaken the urban in growth rate Recent Trends

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The Rural Market is being seen as a Growing Opportunity mainly because of the following – Rural Demand is growing rapidly Purchasing power has increased Cut Throat competition in the Urban Markets Rural market is largely unexplored and untapped There would be opportunities for new entrants as compared to urban population being loyal to specific brands The volume and the strength of the rural population Rural Market becomes attractive to Corporate

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Company Rural Sales (% of total) HUL 50 Colgate 50 Godrej 30 Cavinkare 33 Marico 25 Cadbury 25 Cipla 18 Companies already into Rural Area

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Segmentation & Targeting Product Management Physical Distribution Channel Management Sales Force Management Marketing Communications Tapping the Rural Market

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Geographic Nearness to a feeder town/ industrial project Demographic Segmentation Population Concentration Age Literacy Level Income – Regular & Seasonal Buying Behavior Sources of data on rural consumers CMIE – Center for Monitoring Indian Economy Thompson Rural Index Segmentation & Targeting

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Specifically designed products Tractor Everyday’s Jeevan Sathi torch Model Variants – Bikes Beverages – Chota Coke Color Variants – Asian Paints Different products/models,brands,packing, pricing and positioning Package Design and pack size Logos, symbols and mnemonics Brand Decisions Sell value brands, not cheap products Preconceived notions have no place Product Strategy

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Problems Transportation and warehousing Cost – Service dilemma becomes more acute, transportation & warehousing costs are high The delivery van – ITC and HUL have their own delivery van’s High cost can be taken care of, if the sales volumes are high which is most likely if the product is marketed properly Physical Distribution

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Problems – Multiple tiers add to the cost Non Availability of dealers Poor viability of outlets Inadequate banking and credit facilities The village shop is the key to rural distribution Improving the viability of the outlets, deal in number of product lines. Channel management