MARKETING INNOVATIVE

STRATEGIES EFFECTS ON FMCG

COMPANIES IN RURAL MARKETS
By

Mr. S. KUMAR.,MBA.,M.PHIL.,(Ph.D)
Asst.Professor & HOD / MBA,
Maharaja Engineering College, Avinashi-641 654.
&
Mr. A.V.HARIHARAN.,MBA.,M.PHIL.,(Ph.D) Asst.
Professor, RVS Faculty of Management, Kannampalayam,
Coimbatore.
&
S.Vandhana,
Student
Maharaja Engineering College , Avinashi.
 INTRODUCTION

 The scope for the FMCG in Rural market is fast growing.

 There are nearly 6,38,000 villages in INDIA. Of these only 0.5% have
the population above 10,000. And 2% of the population between
5,000 to 10,000. 50% of the villages have a population below 200.

 At least 75 per cent of the male working population engaged in

agriculture and allied activities would qualify as rural.

 70% of the total population live in rural India.

 From this it becomes clear that the rural India is the best market ever
for the FMCG in the country.
SOME OF THE FAST MOVING
CONSUMER GOODS IN INDIA
FNCG COMPANY’S FOCUS ON PRODUCT
INNOVATION
 Many FMCG companies a large chunk of their revenues up to about 60
per cent comes from new product launches.

 Companies like Dabur, ITC, Britannia Industries, Nestle and Amul

HUL, ITC, Nestle, Procter & Gamble and GlaxoSmithKline Healthcare
account for almost 70 % of FMCG revenues in the country spend
almost 10 % of their turnover on advertising and brand promotion.

 They market their brand through heavy expenditure on brand

promotion, advertisement and a proper marketing channel.

 The promotion strategy includes tying up with Bollywood actors and

other celebrities, brand ambassadors to advertise and promote their
products.
DABUR’S BRAND AMBASSADOR MR
AMITABH BACHAN
 NIRMA PRODUCTS - A BREAK
THROUGH IN INDIAN RURAL MARKET
 STRATEGIES OF NIRMA

 NIRMA is considered to be one of the leading brand which used

various innovative techniques to capture the rural market.

 It introduced various small budget consumer goods to attract the

rural consumers. They targeted mainly on the third class
consumers to marker their products.

 They introduced toilet soaps, detergents and other consumer

attractive goods at a low cost.

 They were considered one of the toughest competitor to Unilever

India ltd.
UNILEVER INDIA – RURAL MARKETING
INITIATIVES
 HLL derived around 50% of its sales from rural areas.

 HLL's rural marketing initiatives began way back in 1988, when the
company had launched 'Wheel' for the rural and lower income urban
consumer.

 As a competition to the NIRMA products they introduced Wheel to

demolish the market of NIRMA and to capture the rural market.
 HLL’S CLINIC PLUS SHAMPOO

 HLL introduced Clinic Plus.

 They made the rural people to understand the product by

demonstrating its uses to the people in public.

 They made the people understand the effect of using shampoo and
they demonstrated how it makes the hair smooth.
RETAILER AND DISTRIBUTION NETWORK AND
WITH INNOVATIVE MARKETING STRATEGIES
 The two major Cola brands Coca-Cola and Pepsi apart from their
usual battle over market share have been trying hard to enter into
rural markets.

 They have come up with many marketing strategies such as pricing,

distribution strategies etc, like providing ice boxes,
refrigerators, credit facilities etc.

 They provided small bottles apart from 1 liter bottles to attract the
low income groups.

 They both used a good effective distribution channel to make the

product available in the rural consumer markets.
TINS AT A MUCH CHEAPER RATE
 BRAND-BUILDING ACTIVITIES AND COST-
REDUCTION SPUR SALES IN THE FMCG SPACE

 Almost 50 per cent of the FMCG companies cited earlier reported a

double digit growth in sales. Companies like P&G, ITC, Tata Tea,
Dabur, Marico, GlaxoSmithkline, Gillette and Godrej recorded good
top line growth.

 This is because of the various techniques they used to develop their

products according to the rural consumers needs.

 They adopted various new technologies to out run their

competitors.

 They concentrated more on the product diversification.

NEWLY DIVERSIFIED PRODUCTS UNDER
FMCG SECTOR
 COLGATE

 Colgate-Polmolive India Ltd, which makes oral care and personal

care products kept expenses down by reducing its stock keeping
units or SKU.
 They also diversified their products. Colgate herbal, Colgate Salt,
Colgate white, Colgate gel and much more.
 BRITANNIA INDUSTRIES LTD

 They increased their net profit by 10.0% after entering in to the

rural markets.

 They increased the price of their products by 5% to 7%.

 DABUR INDIA LTD AND NESTLE INDIA LTD
OTHERS

 They focused to reduce their operational cost by reducing their

cost they spend on the purchase of the raw materials.

 Godrej Consumer Products Ltd focused on reducing the cost by

organizing a good supply chain management process and
selecting a better and a cheaper mode of transport.

 Wipro Ltd provided the consumers with a reduction in the weight

of the products at the same price thus improving their margin of
profit.
 CONCLUSION

 From all the above information's it is clear that the rural India can be
one of the most feasible market for the development of the FMCG
in INDIA.

 FMCG’s companies or marketers make consistent attempts to

innovate tools and strategies to overcome the challenges the face in
the business area.

 Corporate India and government bodies alike have made several

efforts to bridge the gap between rural and urban India.

 Thus if planned properly and with the use of new strategies and
technologies the rural India market can be captured and a great
margin of profit can be earned by the FMCG companies.