Académique Documents
Professionnel Documents
Culture Documents
CHAPTER I
From bmsgroup.blog.co.in
-1-
From bmsgroup.blog.co.in
-2-
CHAPTER II
From bmsgroup.blog.co.in
-3-
Table: Profile of the Rural Working Class (%) Particulars Villages with >5,000 people Villages with Pucca Roads Villages with number of outlets Villages with number of haats North 2,00,106 78,217 9,75,111 11,436 South 73,585 45,102 East 1,81,982 41,348 West 1,35,936 44,693
CHAPTER III
-4-
URBAN RURAL
RURAL URBAN
RURAL
RURAL
URBAN TO RURAL (U 2 R)
A major part of rural marketing falls into this category. It includes the transactions of urban marketers who sell their goods and services in rural areas. The following are some of the important items, which are sold in rural areas and manufactured in urban areas: pesticides, fertilizers, seeds, FMCG products, tractors, bicycles, consumer durables, etc.
From bmsgroup.blog.co.in
-5-
RURAL TO RURAL (R 2 R)
This includes the activities that take place between two villages in close proximity to each other. The transactions relate to the areas of expertise the particular village has. The items in this category include: agricultural tools, handicrafts and bullock carts, dress materials, etc.
From bmsgroup.blog.co.in
-6-
CHAPTER IV
From bmsgroup.blog.co.in
-7-
From bmsgroup.blog.co.in
-8-
From bmsgroup.blog.co.in
-9-
CHAPTER V
From bmsgroup.blog.co.in
- 10 -
From bmsgroup.blog.co.in
- 11 -
From bmsgroup.blog.co.in
- 12 -
CHAPTER VI
Nearly 45% of the rural Indians are literate (men 59%, women 31%). The rural customer has much lesser education than his/her urban counterpart. Generally, the maximum education that one sees among rural areas is still primary school or high school level. Though rural literacy programmes have made significant headway, we are still confronted with a customer who is illiterate. This comes in the way of the marketer using print media and Visual displays and phonetics become Demonstration on handbills to promote the product.
important in promoting the product in the rural areas. promotion strategy. Low income levels
product usage and even on how to use it becomes integral to the marketers
Though rural incomes have grown manifold in the last one decade, still an average rural consumer has a much lower income than his or her urban counterpart. Still a large part of his income goes to provide the basic necessities, leaving smaller income to be spent on other consumer goods. This makes the rural consumer more price sensitive than the urban consumer. Marketers have evolved various strategies to lower the final prices. One such strategy is designing special products as reflected by Hindustan Levers strategy of developing Sunlight Detergent Powder and the other in even reducing the size of the product. Another aspect of this low income is that an average rural customer buys a single unit of the product and not in bulk.
From bmsgroup.blog.co.in
- 13 -
Typically in rural area, the reference groups are the primary health workers, doctors, teachers and the Panchayat members. One may even observe that the village trader or the grocery shop owner, commonly called the baniya or the mahajan, may also be an important influencer in the rural customers decision-making. This is because the trader extends credit to the farmers. Today, another person is also considered as a change agent and that is the rural banks officer or manager. patterns. Media Habits Likewise, A marketer needs to be aware of these influences that can effect a change in the rural customers consumption
A rural customer is fond of music and folklore. In a state like Maharashtra the rural theatre called Tamasha has held sway with the people. Nautanki in which the artists are a part of the audience entertains the rural Uttar Pradesh. Today, television and radio are important forms of media, which hold the attention of rural folks, so is the video. Radio Programmes reach almost 95% of the Indian population, while television programmes is now as high as 85%. As we mentioned earlier because of a low education level print media does not have that much of an impact as the audio and the audiovisual media does.
From bmsgroup.blog.co.in
- 14 -
Basic cultural values have not yet faded in rural India. Buying decisions are still made by the eldest male member in the rural family whereas even children influence buying decisions in urban areas. Further, buying decisions are highly influenced by social customs, traditions and beliefs in the rural markets. Many rural purchases require collective social sanction, unheard off in urban areas. The rural attitude towards consumption has been traditionally based on the values of restrain and self-denial. But the high exposure to T.V advertising in recent years where brands are working relentlessly to loosen this restraint by communicating escape/release and self-confidence messages is having its effect, particularly on the youth. But Caste and family are still paramount in rural life. But we should bear in mind that with more and more marketers eyeing for a piece of the rural cake, the awareness of the rural consumer is on the rise. He is moving towards branded purchases and is becoming more and more demanding in his purchase decisions.
From bmsgroup.blog.co.in
- 15 -
CHAPTER VII
From bmsgroup.blog.co.in
- 16 -
The slowdown in the economy is of serious concern to everyone in Government, industry and every other sector of the economy. Our GDP growth target for the Tenth Plan is 7.7%, rising to 8.1% in the subsequent one. Today we are at a 6% level, which is itself below the current Plan. Even more worrying is the fact that our growth rate has been trending down for the last 3 years. The sectoral components of this slowdown are very telling. Agricultural growth has dropped to 0.9% from an average of 3.9% in the 1980's and 3.3% in the 90's. Industrial growth too has slowed to below 6% from 6.6% in the last decade. We believe there is an urgent need to lift overall GDP growth sustainable by addressing a central issue - the slowdown in rural incomes. Low Per Capita Income
Even though about 33-35% of gross domestic product is generated in the rural areas it is shared by 74% of the population. Hence the per capita incomes are low compared to the urban areas. High costs in finance is a stumbling block while higher purchase is unheard of, the small town culture works against financing of products. The sprawling unorganized market offers prices that the organized industry finds difficult to match. Many existing product lines continue to be too expensive or irrelevant. Many languages and dialects The number of languages and dialects vary widely from state to state, region to region and probably from district to district. Messages have to delivered in local languages and dialects. Even though the number of recognized languages is only 16, the dialects are estimated to be around 850. Low levels of literacy Literacy rate is low in rural areas as compared to urban areas. This again leads to problem of communication. Print medium becomes ineffective and to an extend irrelevant in rural areas since its reach is poor.
From bmsgroup.blog.co.in
- 17 -
From bmsgroup.blog.co.in
- 18 -
Radio
Irrespective of the literacy levels of the people, topography and geographical location of the area of residence, the radio reaches rural people easily. It continues to be the principal source of information by habit and choice for many rural people.
From bmsgroup.blog.co.in
- 19 -
Over 47,000 haats and 25,000 melas are held annually. The average daily sale at a Haat is about Rs.2.25 Lakhs Annual sales at melas amount to Rs.3, 500 Crores. Over half the shoppers at haats have shopping lists. More than 10,000 melas draw visitors from all over India.
From bmsgroup.blog.co.in
- 20 -
From bmsgroup.blog.co.in
- 21 -
Video Van The pioneer of the medium in India was Sadhna Bharadwaj, Director, and Video on Wheels. It started commercial operations in 1989. This is a vehicle that goes to selected villages and towns on weekly markets days to communicate the benefits of the product. Its repertoire includes audio, video, film playback equipment, etc. Animal Parade Companies can resort to parading of animals with the banners highlighting the product messages. For example, in the Pushkar mela held annually in Rajasthan, the camels participating in the camel race are painted with colours or have banners displayed on them like blue for Rin, green for Wheel detergent, etc. Mobile Displays Dabur used this novel way of communication. It selected a cluster of 300 villages in Banda district and sent in 3 bowling alleys. The bowling pins represented the various germs that Chawanprash protects against.
From bmsgroup.blog.co.in
- 22 -
From bmsgroup.blog.co.in
- 23 -
CHAPTER VIII
INTERESTING OBSERVATIONS
India's rural market is characterized by its vast spread Over 6,38,365 villages with a total population exceeding 733 million. 145,098 villages have population less than 200 1,70,475 have population between 200 and 500 3,50,000 villages have population between 500 and 2000. 60,000 villages have population between 2000 and 5000. A total of 13,113 villages have population over 5,000. Of these 9,988 villages or 76% are in seven states - Uttar Pradesh, Bihar, West Bengal, Maharashtra, Andhra Pradesh, Kerala and Tamil Nadu. Kerala is characterized by large villages; 1,259 out of the total of 1,384 have population over 5,000. While the average population in Kerala is 15,475 per village, for rest of the country the figure is 954. Overall literacy rate (7 years and above) in rural India is 45%: literacy among men is 59% and among women is 31%. There are a total of 3,697,527 shops (retail outlets) in the rural sector, leading to an average of 5.85 shops per village. Number of shops per village is lowest, around 1.5 - in Himachal Pradesh, Arunachal Pradesh and Meghalaya. On the other extreme, Kerala has the largest number of shops - 192 per village. In Punjab, West Bengal, Goa, Gujarat, Andhra Pradesh, Tamil Nadu and Pondicherry there are 7 or more shops per village. Data on rural consumer buying behaviour indicates that the rural retailer influences 35% of purchase occasions.
From bmsgroup.blog.co.in
- 24 -
From bmsgroup.blog.co.in
- 25 -
From bmsgroup.blog.co.in
- 26 -
From bmsgroup.blog.co.in
- 27 -
ITC- e-CHOUPAL
From bmsgroup.blog.co.in
- 28 -
WHAT IS AN eCHOUPAL?
When a choupal is equipped with a computer & internet connectivity it is called an e-choupal. Since power is a cause for concern in rural areas it involves backing the computer with solar power.
ITCS e-CHOUPAL: The project e-Choupal is ITCs unique click & mortar initiative. eChoupal is an ITC platform for carrying out trade at a number of locations. The e-Choupal redefines choupal, which as mentioned earlier, is the Hindi word for village square where elders meet to discuss matters of importance. The all-important letter in the word is "e". It stands for a computer with an Internet connection for farmers to gather around and interact not just among themselves but with people anywhere in the
From bmsgroup.blog.co.in
- 29 -
It begins with ITC installing a computer with solar-charged batteries for power and a VSAT (Very Small Aperture Terminal) Internet connection in selected villages in the house of one of their key links called the Sanchalak. The computer's functioning is freed from the notorious power and telecom facilities at the village level. e-Choupal delivers real-time information and customized knowledge to improve the farmer's decision-making ability, thereby better aligning farm output to market demands; securing better quality, productivity and improved price discovery.ITC accumulates information regarding: Weather, Modern farming practices And market prices etc.
From bmsgroup.blog.co.in
- 30 -
All information is customized according to the local farmers requirements and provided in the local language through computer set up by ITC in the Sanchalaks house. Thus the e-choupal model helps aggregate demand in the nature of a virtual producers' co-operative, in the process facilitating access to higher quality farm inputs at lower costs for the farmer. The e-Choupal initiative also creates a direct marketing channel, eliminating wasteful intermediation and multiple handling, thus reducing transaction costs and making logistics efficient. The e-Choupal project is already benefiting over 3.5 million farmers.
From bmsgroup.blog.co.in
- 31 -
9 36,000 6000
ITC OPERATES THE e-CHOUPAL THROUGH: THE SANYOJAK The Sanyojak is the main link between ITC and the Sanchalaks. Each Sanyojak acts as a co-coordinator for an e-choupal hub which consists of around 50 odd e-choupals. He is either a former Mandi dealer or a local ITC product dealer. The Sanyojak earns a certain commission on every e-choupal deal.
THE SANCHALAK The Sanchalak is a lead farmer, who acts as the interface between the computer and the acts as the interface between the computer and the farmer. He operates the computer on behalf of ITC, but exclusively for farmers. The Sanchalak also known as the Pratinidhi is the most important link between the Sanyojak and the farmers. Sanchalaks are required to take a public oath of serving their community without
From bmsgroup.blog.co.in
- 32 -
ITC provides the farmer appropriate documentation which records the quantity and quality of his output. Payment is instant.
ITC's mobile vans take the message of e-Choupal to new villages. Thereafter, virtual helpdesks enable the farmer to find solutions to his problems through online interactions. ITC has set up VSAT links to overcome connectivity problems.
MARKETING STRATEGIES
From bmsgroup.blog.co.in
- 33 -
Besides this, every Sanchalak also gets a commission for every product bought by the farmers from ITC. Also, the farmers who sell their produce to ITC are required to follow a certain, minimum quality standard. When the quality of their produce exceeds this required minimum specification, then, they are given a certain discount on any product they would like to buy from the ITC Company.
From bmsgroup.blog.co.in
- 34 -
CHAUPAL SAGAR
Chaupal Sagar is one of the first organized retail forays into the hinterland. One of the first Chaupal Sagars was soft-launched in a small village in Madhya Pradesh, 40 km. from Bhopal. The company had promised to open 1,000 rural malls in India and this is one of the first. It is located just next to the ITC warehouse where the farmers bring in their produce to sell to ITC. The whole idea behind this is that the farmer will be tempted to go visit the Sagar Chaupal once he has money in his hands and also, his money will be spent in a wise manner. The Chaupal Sagar has opted for self service, stocking its merchandise on shelves lining the neat aisles, it stocks a breadth of products no supermarket can. It offers almost everything - from toothpastes to televisions, hair oils to motorcycles, mixer-grinders to water pumps, shirts to fertilizers; mostly all of them being national products like Marico, LG, Philips, torches from Eveready, shirts from ITC's apparel business, bikes from TVS, and tractors from Eicher etc and many
From bmsgroup.blog.co.in
- 35 -
Next to Chaupal Sagar, ITC is setting up a bank, a cafeteria and a learning room to offer more services to farmers
One of the main reasons why ITC started on this foray is with the hope of capturing the rural folks' out-of-village shopping. The warehouse is one part of its strategy, obviously. But the farmers will come here only after every harvest. To ensure that they keep coming to Chaupal Sagar even at other times, the company is offering a slew of other goodies. Another building is coming up next to the main warehouse. When completed, it will house a bank, a cafeteria, apart from an insurance office and a learning centre. ITC has tied up with agro-institutes to offer farmer training programmes. Then, plots of land have been earmarked to display large agricultural machinery like threshers. Other parcels of land have been earmarked for pesticide and fertilizer companies for demonstrating their products. A petrol pump is coming up as well.
From bmsgroup.blog.co.in
- 36 -
ITC is tentatively planning to open another 4-6 malls this year and not more than that, as it is waiting to see how well the malls do. If these malls are picked up well by the rural Indians, not only will ITC prosper, but even the rural areas will prosper. Already, with the advent of e-Choupal, many of the rural areas are prospering; thus increasing the buying to capacity, focus which on will thus India encourage as new well. entrepreneurs rural
States to be covered: 15 Villages to be covered: 1, 00,000 e-Choupals to be installed: 20,000 Farmers to be e-empowered: 10 million
From bmsgroup.blog.co.in
- 37 -
From bmsgroup.blog.co.in
- 38 -
The Company behind the creation and success of Shakti: HLL i.e.
Hindustan Lever Limited; one of Indias largest companies is the brain behind project Shakti. Hindustan Lever Limited (HLL) is India's largest fast moving consumer goods company with leadership in Home & Personal Care Products and Foods & Beverages. HLL's brands, spread across 20 distinct consumer categories, touch the lives of two out of three Indians. If Hindustan Lever straddles the Indian corporate world, it is because of being single-minded in identifying itself with Indian aspirations and needs in every walk of life.
- 39 -
productive
employment
From bmsgroup.blog.co.in
- 40 -
the field and provide them with on-the-job training and support. This is a key factor in ensuring the stabilization of their fledgling businesses. HLL imparts the necessary training to these groups on the basics of enterprise management, which the women need to manage their enterprises. For the SHG women, this translates into a muchneeded, sustainable income contributing towards better living and prosperity. Armed with micro-credit, women from SHGs become direct-to-home distributors in rural markets.
- 41 -
making. This results in better health and hygiene, education of the children, especially the girl child, and an overall betterment in
living standards.
The most powerful aspect about this model is that it creates a winwin partnership between HLL and the consumers, some of whom will depend on the organization for their livelihood, and builds a self-sustaining cycle of growth for all.
From bmsgroup.blog.co.in
- 42 -
Pond's Talc at Rs.5, Pepsodent toothpaste at Rs. 5, Fair & Lovely Skin Cream at Rs.5,
From bmsgroup.blog.co.in
- 43 -
Rs.10,000 Rs. 15,000 per month, which gives her an income of about Rs 700 - Rs.1000 per month on a sustainable basis. As most of these women are from below the poverty line, and live in extremely small villages (less than 2000 population), this earning is very significant, and is almost double of their past household income. The impact is slow and HLL too is not expecting any quick returns on this project. HLL contributes 20 per cent of the total FMCG business in the country. So, clearly, the onus is on HLL to grow the market. Returns may not happen in the next five years, but a lot of consumer understanding and insights comes from an exercise like Project Shakti, which in turn can lead to product innovation. The full benefit of Project Shakti will be realized after some years. Hindustan Lever will further strengthen its rural distribution through mutually beneficial alliances with rural Self Help Groups (SHGs). Over the last five years, financial institutions, NGOs and government organisations are working closely to establish SHGs, whose objective is to alleviate From bmsgroup.blog.co.in
- 44 -
I-SHAKTI
From bmsgroup.blog.co.in
- 45 -
A key factor that has inhibited the development of rural India has been lack of access to critical information and services. Given Indias large geography and weak infrastructure, it is often difficult to reach out to the rural areas. In order to impact both livelihood opportunities and living standards of rural communities IShakti - an IT-based rural information service has been developed to provide information and services to meet rural needs in agriculture, education, vocational training, health and hygiene.
The premise of the I-Shakti model is to provide need based demand driven information and services across a large variety of sectors that impact the daily livelihood opportunities and living standards of the village community.
The I-Shakti kiosk will be operated by the Shakti Entrepreneur, which further strengthens the relationship we have already cultivated and builds new capacity. HLL expects that the
From bmsgroup.blog.co.in
- 46 -
The information provided in the above areas is culled from the best available resources, taking additional care to ensure that information, especially in areas like agriculture, is locally relevant and includes inputs from home-grown experts. These experts are also available on request, to help provide solutions to problems raised by users through a query mailing system.
THE VISION
From bmsgroup.blog.co.in
- 47 -
From bmsgroup.blog.co.in
- 48 -
From bmsgroup.blog.co.in
- 49 -
Lifebuoy
INTRODUCTION
Lifebuoy Swasthya Chetna is an HLL initiative in rural health and hygiene, launched in 2002, which has covered more than 17,000 villages across the country. Lifebuoy Swasthya Chetna was conceived by HLL as a hygiene practice to combat preventable diseases with a high mortality rate in rural areas like diarrhea in rural India. Diarrhoea causes over three million deaths a year worldwide, mostly among children under five years old. To put that into perspective, that is the equivalent of one child dying every ten seconds. Unilever is one of the worlds major soap manufacturers, with brands such as Lifebuoy, Lux and Dove. The company is no stranger to the life protecting potential hand washing with soap can have on poor communities. Soap was the product on which Lever Brothers, one of Unilevers two founding companies, was built. The company found that the widespread availability of good quality, low-cost, branded soap can do much to improve levels of hygiene in rural India. While Unilever has supported hygiene education programmes in India for many years, in 2002 the Lifebuoy brand team decided that, to have any real impact on reducing diarrhea disease, something bigger was needed. Much bigger. It was decided to create a new programme with the
From bmsgroup.blog.co.in
- 50 -
INDUSTRY REVIEW
Lifebuoy has a sizeable share of the Indian soap market; and so, in order to conquer the entire Indian market, the company could simply focus its attention on persuading the millions of Indians who currently use soap made by its competitors to switch to Lifebuoy. For Unilever to build its business in India over the long term, though, it must attract new consumers, including the estimated 70 million people who never use soap.
Swasthya Chetna is not about philanthropy. Its a marketing programme with social benefits, explains Hindustan Lever Lifebuoy Brand Manager Harpreet- Singh Tibb. The Swasthya Chetna programme started in 2002 in the eight Indian states where deaths from diarrhea diseases are highest and soap sales are lowest. In its first year 9,000 villages were visited by 150 teams of outreach workers speaking seven dialects and with leaflets and posters printed in four languages. In 2003, another 9,000 villages were added, including Gangijoodi, and in 2004 the emphasis was on introducing new phases to these 18,000 villages. By the end of 2004 the campaign had reached 70 million people, including 20 million children at a cost to Hindustan Lever of 22.25 million.
From bmsgroup.blog.co.in
- 51 -
MARKETING MIX
PRODUCT
As stated earlier, Diarrhea causes over three million deaths a year worldwide, mostly among children under five years old. In India this is important, because diarrhea, caused by invisible germs, is the second largest cause of death among children below the age of 5. The Swasthya Chetna project will help reduce incidence of such diseases, by raising awareness of preventive hygienic practices.
Key facts: Today Lifebuoy is mainly sold in Asia and parts of Africa. It is market leader in every Asian market where it is sold. Lifebuoy soap has been proven in laboratories to provide 100% more effective germ protection than ordinary soaps. To date, 70 million people in rural India alone have experienced the pioneering, Lifebuoy sponsored Health Education programme the single largest private hygiene education programme in the world.
From bmsgroup.blog.co.in
- 52 -
DISTRIBUTION
Hindustan Lever's distribution network is recognized as one of its key strengths. Its focus is not only to enable easy access to their brands, but also to touch consumers with a three-way convergence - of product availability, brand communication, and higher levels of brand experience. HLL's products, manufactured across the country, are distributed through a network of about 7,000 redistribution stockists covering about one million retail outlets. The distribution network covers the rural population as well. HLL has also revamped its sales organization in the rural markets to fully meet the emerging needs and increased purchasing power of the rural population. The company has brought all markets with populations of below 50,000 under one rural sales organization. The team comprises an exclusive sales force and exclusive redistribution stockists, under the charge of dedicated managers. The team focuses on building superior availability, while enabling brand building in the deepest interiors. HLL's distribution network in rural India already directly covers about 50,000 villages, reaching about 250 million consumers, through about 6000 substockists. Generating awareness pays dividends only when steps are taken to ensure constant availability of products. In rural India particularly,
From bmsgroup.blog.co.in
- 53 -
Therefore, over the decades, Hindustan Lever has progressively strengthened its distribution reach in rural India, which today has about 33 lakh outlets. Direct rural distribution in Hindustan Lever began with the coverage of villages adjacent to small towns. The company's stockists in these towns were made to use their infrastructure to distribute products to outlets in these villages. But this distribution mode could only be extended to villages connected with motorable roads, and it could cover about 25% of the rural population by 1995. Therefore in 1998, Hindustan Lever launched Project Streamline to further extend its distribution reach. Under this initiative, the company identifies sub-stockists in a large village, connected by motorable road to a small town. This sub-stockist in turn distributes the company's products to outlets in adjacent smaller villages using transportation suitable to interconnecting roads, like cycles, scooters or the age-old bullock cart. Hindustan Lever is thus trying to circumvent the barrier of motorable roads. As a result, the distribution network, as of now, directly covers about 50,000 villages, reaching about 250 million consumers. The company simultaneously uses the wholesale channel, suitably incentivising them to distribute company products. HLL has in the recent past established a common distribution system in rural areas for all its products. Given the number of brands and their packs the rural retailer usually requires, one HLL representative can take all the products from the company portfolio that he needs. This common distribution system is now fully operational, under one Regional Sales Manager exclusively dedicated to rural markets of each region of the country.
PROMOTION
From bmsgroup.blog.co.in
- 54 -
acting out sketches and songs that extol the virtues of hand washing with soap. In the third phase, the Swasthya Chetna team visits every house in the village, inviting mothers of young children to attend a health education session at which the hand washing message is reinforced and local health workers give children a height and weight check-up. The next phase involves recruiting schoolchildren, parents and other villagers as volunteers to start up health clubs that, in turn, organize events such as community bathing at the pond villagers use for washing. The whole process, from initial contact to self-managed health club, takes two to three years. While this represents a significant time
From bmsgroup.blog.co.in
- 55 -
PRICING: -
To help people on low incomes afford to buy soap, an 18 gram bar of Lifebuoy soap has been introduced, enough for one person to wash their hands once a day for 10 weeks. This sells for two rupees, equivalent to the price of four cups of tea or enough wheat for a meal for one person. Once the Swasthya Chetna program is implemented and people become aware, they are ready to spend this price on a soap of a Lifebuoy. Hence the pricing strategies of Lifebuoy were effectively designed in accordance with its promotional campaign.
FUTURE OF LIFEBUOY SWASTHYA CHETNA: The vision of this on-going project is to make a billion Indians feel safe and secure by focusing on their health and hygiene needs. It is too soon to say what the impact has been on community health or the programmes long-term sustainability, but the campaign has prompted a lot of media interest in India and discussions are taking place with the Indian government at national level about extending the programme to other states and beyond Lifebuoys initial five-year commitment. Started in 2002, the programme has as of now covered about 15000 villages in 8 states - Uttar Pradesh, Bihar, Jharkhand, West Bengal, Orissa, Madhya Pradesh, Chattisgarh and Maharashtra; it has already touched about 70 million people, imparting hygiene education to over 25 million children.
From bmsgroup.blog.co.in
- 56 -
From bmsgroup.blog.co.in
- 57 -
The Sapat Group of companies founded in 1897, consists of diversified businesses in tea. The various Indian manufacturing units are located in and around Nashik, with its marketing office and IT facilities located at Mumbai. Sapat has been one of the very first companyies to launch the rural marketing van scheme. It was also the first to introduce a low unit pack (LUP) range as well as the flavored tea range in India. With innovation strategies over the last decade the company has grown five times touching a turnover of almost Rs100cr., making it the largest packet tea company in the Rs500cr tea market of Maharashtra. Currently, Sapat has over 250 distributors in Maharashtra and plans to expand to other tea drinking states. When Parivar tea was being developed, the Maharashtra tea market was mainly dust tea and leaf tea. (After tea leaves are picked, they are dried and fermented to make granules. The bigger granules are packed as leaf tea while smaller granules are passed off as dust tea). Say around 1800tons of dust and similar volume of leaf. Also, there were many competitors who had products in both these categories. When the Sapat Company did a price sensitivity analysis, they found that the dust tea users were willing to pay lot more for getting a leaf tea if it was strong and also, the products available as leaf were not strong. So Parivar Tea was created.
TEA INDUSTRY
From bmsgroup.blog.co.in
- 58 -
MARKETING MIX
PRODUCT
The Sapat Company launched its new brand of leaf tea, Parivar, in 1999-2000 The Sapat Parivar Family Blend is a unique 'marriage' of large and small grain CTC teas for exceptional flavor and strength. Its fast-moving brand, Parivar, has helped the company shoot up the rankings, making it one of the fastest-growing top 10 tea companies in India in 2004. While the industry grew by 1% in volume in 2004, Sapat grew by 41%.
DISTRIBUTION
One of the most difficult tasks for any company working in the rural areas is the distribution. The Sapat Company knew that the villagers wouldnt take likely to a company salesman and so the company made a research and found that each village had a population of youth with
From bmsgroup.blog.co.in
- 59 -
PROMOTION
The company knew that television gives little reach in the rural regions. Products advertised on outdoor hoardings are perceived as costly in the rural areas. So Sapat created Parivar-branded nameplates on which the CAs wrote the household's name. Families who agreed to fix this nameplate on their doors were given a free sample pack of tea. Soon, most families in a village wanted to have their names written on Parivar's metal nameplate. The company contacted close to 500,000 households across 1,600 villages in Maharashtra through this programme. Sapat executives claim that this initiative earned them some brownie points. Villagers began to look at Parivar as a bonding factor, as the entire village started showing off uniform nameplates. Having put its name on the doors, the company decided to get into the mind of rural consumers. This was best done through village schools, given that teachers and principals are largely appreciated by the
From bmsgroup.blog.co.in
- 60 -
PRICING
As said earlier the largest-selling variety of tea in the rural markets (60%) is dust tea, as it was considered to be cheaper and stronger. Sapat, however, felt the time was ripe to convert the markets to leaf tea. Hence the real challenge was now to take on the dust brands which were cheaper than leaf tea, and to not only convert and upgrade, but also get consumers to pay extra for it. Each 1 kg. pack of Parivar tea is priced at Rs. 159 as compared to the other brands which are priced at Rs. 125 per kilo. Even though the Parivar tea brand was priced much higher than the other brands, it was not only accepted but was also more preferred because of its uniqueness. The taste was catered to; keeping in mind the customers needs (the rural Indian consumer likes his leaf tea to be strong and so Sapat created such a tea). Also, the
From bmsgroup.blog.co.in
- 61 -
CONCLUSION
At present, Sapat earns 60 per cent of its revenue from Parivar. In 2004, the company entered the markets of Madhya Pradesh also. For Sapat, the eighth largest tea-maker in the country, gunning for the top slot might be a distant dream. But for now, the villages in Maharashtra have given it enough reason to throw a tea party. Parivar Tea is one of those products which show that only pricing is not an important factor. In spite of being a tad costlier than the other products, its effective marketing and distribution strategies helped this unique product to reach the position it is at, right now.
From bmsgroup.blog.co.in
- 62 -
From bmsgroup.blog.co.in
- 63 -
Coca Cola:
In India, Coca-Cola was the leading soft drink till 1977 when govt. policies necessitated its departure. Coca-Cola made its return to the country in 1993 and made significant investments to ensure that the beverage is available to more and more people, even in the remote and inaccessible parts of the nation. As we all know, where there is a consumer, there is a producer & this results into completion. Bigger the player, the harder it plays. In such a situation brand identity is very strong. It takes a long time to make the brand identity famous. Coca Cola has its beginning in 1981 & since then has been one of the three most dominant players in this soft drink industry.
From bmsgroup.blog.co.in
- 64 -
URBAN
RURAL
From bmsgroup.blog.co.in
- 65 -
PRODUCT
The two global majors Pepsi & Coca Cola dominate the soft drink industry market. Coca Cola, which had wound up its business in 1977 from India reentered in India after 16 years later in 1993.Coca Cola has acquired a major soft drink market by buying out local brands like Thums up, Limca & Gold Spot from Parle Beverages.
DISTRIBUTION
Coca-cola focused on strengthening its distribution network there. Rural India meant reaching 6,27,000 villages spread over 32,87,263 square kms; it meant getting distributors to travel 200 kms to reach five shops with drop sizes of less than a case. It realized that the centralized distribution system used by the company in the urban areas would not be suitable for rural areas. In the centralized distribution system, the product was transported directly from the bottling plants to retailers.
From bmsgroup.blog.co.in
- 66 -
HUB
From bmsgroup.blog.co.in
- 67 -
VILLAGE 1
VILLAGE 1
(THE HUB AND SPOKE MODEL -Coca-cola distribution system in rural areas)
PROMOTION
From bmsgroup.blog.co.in
- 68 -
The promotion strategies Coca-cola used to enter the rural market can be given as under: As far as the TV media is concerned, it doubled the spend on Doordarshan, increased price compliance from 30 per cent to 50 per cent in rural markets and reduced overall costs by 40 per cent. Many of us can remember the advertisement with the tag line -.
'Thanda Matlab Coca-Cola This ad was targeted mainly at the rural and semi-urban
a Nepali
Tashana were a great success and an important aspect focusing on acceptability of the product in the rural areas. Besides this, CCI also concentrated on 47,000 haats (weekly markets) and 25,000 melas (fairs) held annually in various parts of the country which are local forms of entertainment. Thus it made huge investments in infrastructure for distribution and marketing.
PRICING
From bmsgroup.blog.co.in
- 69 -
500ml Rs. 15 -
The initiative has paid off: Eighty per cent of new drinkers now come from the rural markets. Coca-Cola has also introduced Sunfill, a powdered soft-drink concentrate. The instant and ready-to-mix Sunfill is available in a single-serve sachet of 25 gm priced at Rs 2 and mutiserve sachet of 200 gm priced at Rs 15.
From bmsgroup.blog.co.in
- 70 -
Conclusion
From bmsgroup.blog.co.in
- 71 -
- 72 -
CHAPTER IX
From bmsgroup.blog.co.in
- 73 -
Bibliography
From bmsgroup.blog.co.in
- 74 -