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Archive for the ‘Rural Marketing’ category

Distribution Channel Strategies (306) Views

Apr 19th
by admin |
in Marketing Management, Rural Marketing
( 0 )

The channel members consist of wholesalers and retailers who are middlemen in distribution and they perform all marketing functions. These middlemen facilitate the process of exchange of goods; create time, place and possession utilities. Therefore channels are useful to producers as well as consumers. Even if a company has a product that meets the requirements of rural consumers, it will succeed only if it is made available at the right place as and when required by the consumer.

Direct sales to consumers:

Examples: In many states, the government has encouraged farmers to sell vegetables directly to urban consumers by setting up “Framers market”. Farmers, in this case, put up stalls in the market place and directly sell fresh vegetables to the consumers, eliminating middlemen in the market.

Manufacturer-wholesaler-retailer-consumer:

The manufacturer appoints wholesalers in key rural markets and these wholesalers cater to the needs of retailers in villages. Example: Sale of pesticides used in agriculture.

Manufacturer-retailer-ultimate consumer:

Examples: 1) Companies like Hero Honda, have direct retailers in semi-urban markets. 2) Mahindra Tractors have appointed distributors in all prosperous rural areas and these distributors deal directly with farmers for sales and services of tractors. 3) Philips has direct distributors in areas with low demand and poor accessibilities. The distributors extend credit facilities; they follow a journey cycle and have delivery vans to service remote markets.

Manufacturer-C&F agent-wholesaler (stockiest)- retailer-consumer:

Fast moving consumer goods such as biscuits, soaps, and tooth paste are distributed through two/three intermediaries. Example: HLL, Nestle, Marico have appointed stockiest to service the village merchants and the merchants are met at fortnightly/monthly intervals through van operations.

Project Shakti:

HLL has come out with a new distribution model with main objective to develop income-creating capabilities of underprivileged rural women by providing a sustainable enterprise opportunity and to improve rural living standards through health and hygiene awareness.

Typically a women from the Self Health Group is selected as a Shakti entrepreneur and receives stocks of Lifebuoy, Wheel, Pepsodent, Annapurna salt, Clinic Plus, Ponds, LUX, Nihar, 3 Roses tea etc. at her doorstep from the HLL rural distributor. She sells directly to consumers as well as to small merchants in the village. Each Shakti entrepreneur services 6-10 villages in the population range of 1000-2000 people. With training and hand holding by the company for the first three months, she begins her door-to-door journey selling the products. Normally the entrepreneur has a turnover of Rs. 10000 to Rs.25000 per month and earns a profit of Rs.800 to Rs.2000 a month. The project was started in Nalgonda District in AP and at present there are about 1000 women entrepreneurs in AP, Karnataka, Gujarat and MP. The plan is to have over 11000 Shakti entrepreneurs covering one-lakh villages. The most powerful aspect of this model is that it creates a win-win partnership between HLL and the Women entrepreneur.

Development of retailers in rural markets: One of the important challenges faced by the marketer is the development of a chain of retailers in rural markets. The problems are non-availability of retailers and poor viability of retail outlets due to low business volumes. The marketer could consider some of the existing retail outlets in rural areas.

Co-operative societies: There are about 3 lakh cooperative societies operating in rural areas. Many of these societies distribute consumer goods and low value consumer durables.

Public distribution system: Essential commodities such as sugar, kerosene, edible oils are made available to the consumers at reasonable prices through fair price shops. Such shops are run by state civil supplies department, co-operatives or by private parties. Marketers could explore the possibility of selling goods through PDS.

Agricultural input dealers: There are about two lakh dealers selling fertilizers. Many of these dealers deal in consumer goods also. The marketers could approach these dealers and find out the possibility of selling consumer products in rural areas.

Feeder markets or mandis: The rural consumer visit nearby towns for selling agricultural produce and buying consumer durables. Stockiest could be appointed in such feeder towns to service the village shops in interior places.

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Promotion strategies-Informal or Rural specific media (253) Views

Apr 19th
by admin |
in Marketing Management, Rural Marketing
( 0 )

These media with effective reach and personalized communication will help in realizing the promotional objectives. Companies to suit the specific requirements of rural communication are using a variety of such media effectively and some of the more important media and methods are given below.

Farm-to-Farm/House-to-House visit:

Rural people prefer face-to-face communication and farm visits facilitate two-way communication. The advantage is that the sales person can understand the needs and wants of the rural customer by directly discussing with him and answer his queries on products and services. Potential customers in the village are identified and the company’s/distributor’s representative makes farm-to-farm visits and highlight the benefits of the products. The person carries with him literature in local language and also samples of products. The person does not sell the product but only promotes the use of the product. Very often the local dealer also joins the representative in making farm-to-farm visits. The dealer clarifies the terms and conditions of sale and also makes independent follow up visits for securing orders. Example: This approach has been found to be very effective for agricultural machinery, animal health products and agricultural inputs. Many LIC agents and companies dealing with high value consumer durables have tried this method with success in rich rural areas.

Group meeting:

Group meetings of rural customers as well as prospects are an important part of interpersonal media. The company is able to pass on the message regarding benefits of the products to a large number of customers through such meetings. Group meeting of key customers are conducted by banks, agricultural inputs and machinery companies in rural areas. The bankers visit an identified village, get the village people in a common place and explain the various schemes to the villagers. Such meetings could be organized in prosperous villages for promoting consumer durables and two wheelers also. Example: MRF Tyres conduct tractor owners meet in villages to discuss repairs and maintenance of tractors.

Opinion leaders:

Villagers place more emphasis on the experience of others who have used a product/brand to make purchase decision. Opinion leader is a person who is considered to be knowledgeable and is consulted by others and his advice is normally followed. Such opinion leaders could be big landlords, bank official, panchayath-president, teachers, extension workers etc. Examples: a) Mahindra Tractors use bankers as opinion leaders for their product. b) Asian Paints promoted its Utsav brand of paint by painting the village Sarpanch’s house a few months prior to the launch if the branch to demonstrate that the paint does not peel off. Read more…

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Promotion strategies-Formal media (81) Views

Apr 19th
by admin |
in Marketing Management, Rural Marketing
( 0 )

Through the rural markets offer big attractions to the marketers, one of the most important questions frequently asked is “How do we reach the large rural population through different media and methods?

Formal media

It includes Press and print, TV, Cinema, Radio, and Point of purchase and Outdoor advertisement. Reach of formal media is low in rural households (Print:18%, TV:27%, Cinema:30%, and Radio:37%) and therefore the marketer has to consider the following points:

Newspapers and magazines:

English newspapers and magazines have negligible circulation in rural areas. However local language newspapers and magazines are becoming popular among educated facilities in rural areas. Examples: Newspapers: Eenadu in A.P., Dina Thanthi in Tamil Nadu, Punjab Kesari in the North, Loksatta in Maharashtra and Tamil magazine Kumudam are very popular in rural areas.

Television:

It has made a great impact and large audience has been exposed to this medium. HLL has been using TV to communicate with the rural masses. Lifebuoy, Lux, Nihar oil etc are some of the products advertised via television. Regional TV channels have become very popular especially in Southern states. Examples: SUN TV is very popular even in rural areas in Tamil Nadu and Asianet is a preferred regional channel in Kerala. Many consumer goods companies and fertilizer companies are using these TV channels to reach the rural customer.

Radio:

Radio reaches large population in rural areas at a relatively low cost. Example: Colgate, Jyoti Labs, Zandu Balm, Zuari industries are some of the companies using radio communication programme. There are specific programmes for farmers like Farm and Home/Krishi Darshan in regional languages. The farmers have a habit of listening to regional news/agricultural news in the morning and the late evening. The advertisement has to be released during this time to get maximum coverage in rural areas. Another advantage is that the radio commercial can be prepared at short notice to meet the changing needs of the rural folk. Example: Release of a pesticide ad at the time of outbreak of a pest or disease in crops.

Cinema:

About 65% of the earnings from cinema are from rural markets. Film viewing habits is high in certain states like Tamil Nadu, Karnataka and Andhra Pradesh. Village theatres do roaring business during festivals by having four shows per day. The monthly charge for showing an ad film is within Rs.500. Local distributor or dealer who has good contacts with cinema houses in villages can easily monitor this activity. Examples: Films on products like Vicks, Lifebuoy and SPIC fertilizers are shown in rural cinema halls. Apart from films, Ad slides can also be screened in village theatres.

Outdoor advertisements:

This form of media, which includes signboards, wall painting, hoarding, tree boards, bus boards, dealer boards, product display boards etc, is cost effective in rural areas. Symbols, pictures and colours should be used in POPs meant for rural markets so that they can easily identify the products. Generally rural people prefer bright colours and the marketer should utilize such cues.

Point of purchase:

Display of hangings, festoons and product packs in the shops will catch the attention of prospective buyers. However a clutter of such POP materials of competing companies will not have the desired effect and is to be avoided.

Direct mail advertising:

It is a way of passing on information relating to goods or services for sale, directly to potential customers through the medium of post. It is a medium employed by the advertiser to bring in a personal touch. In cities lot of junk mail is received by all of us and very often such mails are thrown into the dustbin whereas a villager get very few letters and he is receptive to such mailers.

Wall paintings:

It is an effective and economical medium for communication in rural areas, since it stays there for a long time depending upon the weather conditions. The cost of painting one square foot area is just Rs.10. Retailers welcome painting of their shops so that the shop will look better. Walls of farm houses, shops and schools are ideal places for painting and the company need not have to pay any rent for the same. The walls have to be painted at least one or two feet from ground level. It is better to take permission of the owner. Very often the owner takes responsibility for taking care of the wall painting. Painting to be avoided during election time and rainy season. The matter should be in the form of pictures, slogans for catching the attention of people. Companies marketing TV, fans, branded coffee/tea, toothpaste, pesticides, fertilizers etc. use wall painting as promotion medium in rural areas.

Tree boards:

These are painted boards of about two square feet in dimension having the picture or name or slogan of the product painted on it. The cost of such a painted board is about Rs.80. These boards are fixed to the trees on both sides of the village road at a height of about 10 feet from ground level. These boards attract the attention of slow moving vehicles like cycles, bullock carts and tractors and people walking on the road. Considering the poor condition of roads, even the buses move at slow speed through village road. Fertilizer and pesticide companies in rural areas extensively use tree boards. These are low priced promotion items and can be used by consumer goods companies too.

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Characteristics of rural markets (189) Views

Apr 19th
by admin |
in Marketing Management, Rural Marketing
( 0 )

Large number of consumers:

According to the 1991 census, the rural population constitutes about 74% of the total population in our country. While the population went from 55 crores (1971) to 85 crores (1991), the rural-urban proportion have remained more or less the same as in 1971. There are states like U.P, M.P, Bihar, Rajasthan and Orissa where rural population varies from 80 to 90 percent. Therefore a large population gives an opportunity for marketing a variety of goods and services. However income and purchasing power play a major role in determining the demand in rural areas.

Occupation pattern:

Agriculture and related activities continue to be the main occupation for majority of the rural population. Land is the major source of income for about 77% of the population. Others are engaged in business (10%), non-agriculture labour (9%), salary earners (2%) and not gainfully employed (2%). It is evident that rural prosperity depends upon growth and development of agriculture.

Literacy level:

It has been estimated that the rural literacy level is 36% compared to 62% in urban areas. Literacy is one of the important factors in developing awareness and knowledge about technological changes. As many as 16 major languages are spoken adding to the complexities in rural communication.

Low standard of living:

Low income, low purchasing power, overall social and economic backwardness lead to low standard of living. In general a rural consumer spends less on non-food items.

Media reach:

The media reach in rural household is low. Statistics indicates that the reach of Print media is 10%, followed by TV 31%, Radio 32% and Cinema 36%. Therefore the marketer has to consider rural specific promotion media and methods to reach the villagers.

Communication facilities:

About 20% of the six lakh villages are without telephone facility even today. This includes Rajasthan (17600 villages), MP (14200 villages), Maharashtra (12000 villages), Gujarat (7000 villages), and AP, Assam, Orissa about 6000 villages each. (Source: The Indian Express dated 30.3.2003).

Transportation facilities:

About 50% of the markets are not connected by road. Most of the roads are kachha and become unusable during rainy season. Many farmers use bullock cart for transporting their produce from village to the market. This means of transport is time consuming.

Rural electrification:

The main objective is to provide electricity for agricultural operations and for small industries in rural areas. About 5 lakh villages (77%) have electric supply and this has increased the demand for electric supply and this has increased the demand for electric motors, pumps and agricultural machinery.

Medical facilities:

Medical facilities are quite inadequate and the villagers have to travel long distances for getting medical treatment.

Distance:

Village nearer to towns has elements of the urban life. Interior villages are more traditional.

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Introduction (58) Views

Apr 19th
by admin |
in Rural Marketing
( 0 )

In our country over 70% of the total population live in villages. There are states like U.P, M.P, Bihar, Rajasthan and Orissa where rural population varies form 80 to 90 per cent. Agriculture and agriculture related activities contribute to about 75% of the income in rural areas.

The general impression is that the rural markets have potential only for agricultural inputs like seeds, fertilizers and pesticides, cattle feed and agricultural machinery. More than 50% of the national income is generated in rural India and there are opportunities to market modern goods and services in rural areas and also market agricultural products in urban areas. Infact it has been estimated that the rural markets are growing at fives times the rate of urban markets. About 70% of bicycles, mechanical watches and radios and about 60% of batteries, sewing machine and table fans are sold in rural India. At the same time the sales of colour television, washing machines, refrigerators, shampoos, face cream, mosquito repellent and tooth paste are very low and there is tremendous potential for such products in rural markets

While rural markets offer big attractions to the marketers, it is not easy to enter the market and take a sizeable share of the market within a short period. This is due to low literacy, low income, seasonal demand and problems with regards to transportation, communication and distribution channel. Further there are different groups based on religion, caste, education, income and age. There is a need to understand the rural markets in terms of buyer behaviour, attitudes, beliefs and aspirations of people.

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