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1 Introduction 5
2 Rural Marketing - Concept 10
3 What makes rural markets attractive? 11
4 Rural Consumer Insight 12
5 Some Myths about Rural Market 13
6 Why Different Strategies? 14
6 Opportunities 15
7 Company Profile 17
8 Products & Brands 18
9 4P’s of Marketing 20
10 Introduction 25
11 Company profile 26
12 Mission Statement 26
13 Benefits of Society Tea 27
14 4P’s of Marketing 29
15 Company Profile 32
16 Why Go Rural 32
17 4P’s of Marketing 34
18 STP of Parivar Tea 35
19 Cases & Conclusion 36,37
2
Introduction
Before gamboling into issues like where the Indian rural market
stands and the opportunities for corporate’s to explore there... let's
look at the definition of urban and rural India. The Census defined
urban India as - "All the places that fall within the administrative limits
of a municipal corporation, municipality, cantonment board etc or
have a population of at least 5,000 and have at least 75 per cent
male working population in outside the primary sector and have a
population density of at least 400 per square kilometer. Rural India,
on the other hand, comprises all places that are not urban!"
Now for some facts and figures The Indian rural market today
accounts for only about Rs 8 billion (53 per cent - FMCG sector, 59
per cent durables sale, 100 per cent agricultural products) of the total
ad pie of Rs 120 billion, thus claiming 6.6 per cent of the total share.
So clearly there seems to be a long way ahead.
3
Wheel's wall
Khaitan fans' ad on a horse cart
painting
We can safely say that until some years ago, the rural market was
being given a step-motherly treatment by many companies and
advertising to rural consumers was usually a hit and miss affair. More
often than not, the agenda being to take a short-cut route by pushing
urban communication to the rural market by merely transliterating the
ad copy. Hence advertising that is rooted in urban sensitivities didn't
touch the hearts and minds of the rural consumer. While, this is
definitely changing, the process is slow. The greatest challenge for
advertisers and marketers continues to be in finding the right mix that
will have a pan-Indian rural appeal. Coca Cola, with their Aamir Khan
ad campaign succeeded in providing just that.
4
NCAER, Francis Kanoi etc shows that rural markets are growing
faster than urban markets in certain product categories at least. The
share of FMCG products in rural markets is 53 per cent, durables
boasts of 59 per cent market share. Therefore one can claim that
rural markets are growing faster than urban markets," says Sampark
Marketing and Advertising
Solutions Pvt Ltd managing
director R A Patankar.
5
language, dialects and familiarity with prevailing customs in the
regions that you want to work for is essential. The other challenge is
the reach and the available means of reaching out to these markets,
hence the video van is one of the very effective means of reaching
out physically to the rural consumers."
The fact of the matter remains that when compared to the Indian
urban society, which is turning into a consumerism society; the rural
consumer will always remain driven by his needs first and will
therefore be cost conscious and thrifty in his spending habits.
"Decision-making is still conscious and deliberated among the rural
community. But nevertheless, the future no doubt lies in the rural
markets, since the size of the rural market is growing at a good pace.
There was a time when market predictions were made on the basis of
the state of the monsoon but this trend has changed over the years;
there is a large non farming sector, which generates almost 40 per
cent of the rural wealth. Hence the growth in the rural markets will be
sustained to a large extent by this class in addition to the farmer who
will always be the mainstay of the rural economy," affirms Patankar.
"Although the melting of the urban - rural divide will take a while, this
is not for want of the availability of the means but for want of the rural
consumer's mindset to change; which has its own logic, which is
driven by tradition, custom and
values that are difficult to shed,"
he points out.
6
For HLL, a one rupee or a five rupee sachet
or the Kutti Hamam (the small Hamam)
helps in giving the consumers a trial
opportunity. While it does help in generate
volume but not in terms of values. "Till the
time that volume - value equation is
managed better, the CPC is preventing
anybody to look at rural at a large scale
activation programme," reiterates
Typical shop in rural Gowthaman.
India stocked with
sachets, etc Ultimately, the ball lies in the court of rural
marketers. It's all about how one
approaches the market, takes up the challenge of selling products
and concepts through innovative media design and more importantly
interactivity.
So the fact remains that the rural market in India has great potential,
which is just waiting to be tapped. Progress has been made in this
area by some, but there seems to be a long way for marketers to go
in order to derive and reap maximum benefits. Moreover, rural India
is not so poor as it used to be a decade or so back. Things are sure a
changing!
7
Rural Marketing - Concept
8
What makes Rural Market
Attractive?
Rural market has following arrived and the following facts
substantiate this:
9
Rural Consumer Insight
Rural India buys:
o Products more often (mostly weekly)
o Buys small packs, low unit price more important than
economy
In rural India, brands rarely fight with each other; they just have
to be present at the right place
Many brands are building strong rural base without much
advertising support
o Chik shampoo, second largest shampoo brand
o Ghadi detergent, third largest brand
Fewer brand choices in rural: number of FMCG brand in rural is
half that of urban
Buy value for money, not cheap products
10
Some Myths about Rural Markets
11
Why Different Strategies?
Rural markets, as part of any economy, have untapped potential.
There are several difficulties confronting the effort to fully explore
rural markets. The concept of rural markets in India is still in evolving
shape, and the sector poses a variety of challenges. Distribution
costs and non availability of retail outlets are major problems faced by
the marketers. The success of a brand in the Indian rural market is as
unpredictable as rain. Many brands, which should have been
successful, have failed miserably. This is because, most firms try to
extend marketing plans that they use in urban areas to the rural
markets. The unique consumption patterns, tastes, and needs of the
rural consumers should be analyzed at the product planning stage so
that they match the needs of the rural people. Therefore, marketers
need to understand the social dynamics and attitude variations within
each village though nationally it follows a consistent pattern. The
main problems in rural marketing are:
12
Opportunities
13
Proliferation of large format rural retail stores which have been
successful also.
o DSCL Haryali stores
o M & M Shubh Labh stores
o TATA/Rallis Kisan Kendras
o Escorts rural stores
o Warnabazaar, Maharashtra (annual sale Rs 40 crore)
14
Company Profile
15
Products & Brands
The company has five major brands in the Indian market - Tata Tea,
Tetley, Kanan Devan, Chakra Gold and Gemini -- catering to all major
consumer segments for tea. The Tata Tea brand leads market share
in terms of value and volume in India and the Tata Tea brand is
accorded "Super Brand" recognition in the country. Tata Tea's
distribution network in the country with 38 C&F agents and 2500
stockists caters to over 1.7 million retail outlets (ORG Marg Retail
Audit) in India.
16
4P’s of Marketing of
TATA TEA
17
1#
Product:
Bulk Tea
Instant Tea
Instant Tea Division caters to customer specific product and are used
for light density 100% Teas, Iced Tea Mixes and in the preparation of
Ready to Drink (RTD) beverages. Instant Tea powder is packed in
bulk packages of 20/25/35 kg each.
18
Instant tea powder - grocery density
Micro milled instant tea powder
2#
Price:
Marketers need to understand the psyche of the rural consumers and
then act accordingly. Rural marketing involves more intensive
personal selling efforts compared to urban marketing. Firms should
refrain from designing goods for the urban markets and subsequently
pushing them in the rural areas. To effectively tap the rural market a
brand must associate it with the same things the rural folks do. This
can be done by utilizing the various rural folk media to reach them in
their own language and in large numbers so that the brand can be
associated with the myriad rituals, celebrations, festivals, “melas” and
other activities where they assemble.
All the prices of the products depend upon the package ie 50gms or
100gms.
19
3#
Place: (Distribution)
One of the ways could be using company delivery vans which can
serve two purposes- it can take the products to the customers in
every nook and corner of the market and it also enables the firm to
establish direct contact with them and thereby facilitate sales
promotion.
However, only the bigwigs can adopt this channel. The companies
with relatively fewer resources can go in for syndicated distribution
where a tie-up between non-competitive marketers can be
established to facilitate distribution. Annual “melas” organized are
quite popular and provide a very good platform for distribution
because people visit them to make several purchases. According to
the India n Market Research Bureau, around 8000 such melas are
held in rural India every year.
20
4#
Promotion:
Firms must be very careful in choosing the vehicle to be used for
communication. Only 16% of the rural population has access to a
vernacular newspaper. So, 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.
21
SOCIETY TEA
22
An aromatic story
23
Company Profile
Tea is a tradition in our country. As, no doubt, it is in yours as well.
But slowly, surely, people all over are being a little more conscious
about the tea that they drink. Slowly but surely, tea is being referred
to as SOCIETY TEA. Surely, one more delightful indication of the
world growing smaller. And in a way, of people coming closer. Now
let's raise our cups, to this cheerful tradition and to our little world of
big-tasting teas.
Mission Statement
24
Benefits of Society Tea –
Health Benefits
Want the least expensive answer to memory problem? Drink tea,
every few hours a day, say recent findings by Unilever Research
Laboratories. After much experiment with combinations of various
kinds of drugs that supposedly enhanced memory power, the findings
seek to subtly suggest that the most affordable remedy, without
medical expenses involved, was already available and yet ignored.
Studies have shown that black tea consumption reduces the risk of
heart disease and stroke. It maintains a healthy circulatory system of
arteries and veins.
Today researchers are finding that a steaming cup of tea can relieve
more than just the stress of a harried day. Drinking the brew has
been linked with a lowered risk of everything from tooth decay to
heart disease to stroke.
In a study of more than 1000 Japanese men, the more green tea they
drank, the lower their concentrations of blood cholesterol dropped.
And recently, University of Minnesota researchers found a link
between tea consumption and a decreased risk for cancers of
25
digestive and urinary tract organs in women. Study on humans on tea
and heart health, revealed that drinking more than five cups of black
tea had the lowest risk of severe atherosclerosis.
SOCIETY TEA
4P’s of Marketing of
SOCIETY TEA
26
1#
Product:
27
2#
Price:
The Pricing strategy used by Society Tea is somewhere in between
penetrating and skimming, but the major part is occupied by
Penetrating.
3#
Place: (Distribution)
Rural markets have the practice of fixing specific days in a week as
Market Days (often called “Haats’) when exchange of goods and
services are carried out. This is another potential low cost distribution
channel available to the marketers. Also, every region consisting of
several villages is generally served by one satellite town (termed as
“Mandis” or Agri-markets) where people prefer to go to buy their
durable commodities. If marketing managers use these feeder towns
they will easily be able to cover a large section of the rural population.
28
4#
Promotion:
They arrested the eyes. There was something different about them.
Something fresh. Something elegant. Little wonder then, that tea-
lovers felt persuaded to pick them up and take them home. Yes,
we're talking about the package.
Even children were heard singing it. One felt a freshness, a newness,
a sense of contentment similar to the feeling one gets after each sip
of Hasmukhrai & Co.'s teas. You couldn't expect any less from them.
After all, they take so much trouble to create such exquisite blends of
tea. Each of these pieces of communication was an invitation in every
sense of the word. In fact, the first ad for SOCIETY Tea said
"Welcome to the Society….". It was an invitation well accepted, for
the society of tea lovers is growing larger, day by day. We're tempted
to say " Tea cheers for the design."
29
Parivar Tea Limited
Company Profile:
Why go Rural?
30
progress, there is little doubt that India’s villages too have to
progress.
31
1#
Product:
There are 2 types of tea:
• General Tea
• Herbal Tea
2#
Price:
Prices are set according to the rural market / village. Prices are set
after considering whether it is a general tea or a herbal tea. Prices will
be a bit high for herbal tea, as It contains herbs which are costlier.
Also as per the packages of tea
3#
Place:
32
The distribution pattern of our product will be different form the usual
pattern. The first this is that the company will have a company outlet
in each and every village which will eliminate the problem releting
with middlemen. Along with this tea pouches will be available at every
shop in villages.
4#
Promotion:
Initially we will be giving free sampling for the first user, thereby
promoting the brand
All variables are in some way or the other related to buyers behavior,
which vary often confuses marketers. There is a difference between
the buyers characteristics reflected in there geographic,
demographics and psychographic profiles, and there buying behavior.
Buyer behavior involves many elements like purchasing occasion
benefits, user status, rate of product usage, loyalty rate, and attitude
towards the product
2. Targeting: -
The company targets the whole family ie anyone in the family can
drink the tea. Also special for farmers as it also contains herbs which
will refresh farmers
3. Positioning
33
A Marketer can position his product in various ways to develop or
enhance it’s value to the consumer. He also do it according to :
34
3. ITC is setting up e-Choupals which offers the farmers all
the information, products and services they need to enhance farm
productivity, improve farm-gate price realization and cut
transaction costs. Farmers can access latest local and global
information on weather, scientific farming practices as well as
market prices at the village itself through this web portal - all in
Hindi. It also facilitates supply of high quality farm inputs as well as
purchase of commodities at their doorstep.
Conclusion:
Thus looking at the challenges and the opportunities which rural
markets offer to the marketers it can be said that the future is very
promising for those who can understand the dynamics of rural
markets and exploit them to their best advantage. A radical change in
attitudes of marketers towards the vibrant and burgeoning rural
markets is called for, so they can successfully impress on the 230
million rural consumers spread over approximately six hundred
thousand villages in rural India.
35