A RESEARCH REPORT ON STUDY OF RURAL MARKETING IN PRESENT SCENARIO IN INDIAN CONTEXT

SUBMITTED BY: Saurabh Kumar (MBA- IVth SEM) Roll No. - 0921570048

SUBMITTED TO: Mrs. Anjali Gupta SGIT Ghaziabad

(IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR)

MBA DEGREE PROGRAMME OF U.P. TECHNICAL UNIVERSITY, LUCKNOW

Shree Ganpati Institute Of Technology (Ghaziabad)

1

ACKNOWLEDGEMENT

Making any project is always an opportunity to learn something but this project is of special importance because it has given me a chance to learn many things,

I would like to pay my gratitude to Mrs. Anjali Gupta for her kind attention, support and giving an opportunity to research work on STUDY OF RURAL MARKETING IN PRESENT SCENARIO IN INDIAN

CONTEXT.

Again, I greatly appreciate the diligent support provided by all the faculty of SGIT and my friends for their whole heart support and co- operation.

Saurabh Kumar

CONTENTS

Sr. No.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Introduction

Contents
Objectives of the study Methodology Used Rural Market Environment Future Of Rural Marketing Some Players In Rural Marketing Marketing-Mix For Rural Marketing Rural Media Rural Small Scale Industries Starting The E-marketing In Rural Market Impact Of Power Brand In Rural Market Cracking The Rural Market Changes In Rural Marketing Opportunities For Rural Market Problems In Rural Marketing Conclusion Suggestion Bibliography

OBJECTIVE

The over all objective of the Dissertation is to know the whole scenario of rural marketing in India. To know the scope of rural marketing in India

Future growth potential in Indian Rural marketing

Different strategies for competing in rural India

opportunities in Indian Rural marketing

Scope: It will help in understanding the whole marketing strategy about Indian rural market. It will also help in understanding, why Indian rural market is booming.

INTRODUCTION

"The rural market is a significant part of our marketing strategy which enables us to help the consumer link with our product."

While we all accept that the heart of India lives in its villages and the Indian rural market with its vast size and demand base offers great opportunities to marketers, we tend to conclude that the purse does not stay with them. Nothing can be far from truth. Rural marketing involves addressing around 700 million potential consumers, over 40 per cent of the Indian middleclass, and about half the country's disposable income. According to a NCAER study the consuming class households in rural equals the number in urban. and awareness The recent NCAER publication "The Great Indian Middle Class" further reveals that the Indian middle class consisted on 10.7 million households or 57 million individuals of which 36 per cent lived in rural areas. No wonder, the Rural markets have been a vital source of growth for most companies. For a number of FMCG companies in the country, more than half their annual sales come from the rural market.

Although with the substantial improvement in purchasing power, increasing brand consciousness, changing consumption pattern and rapid spread of communication network rural India offers a plethora of opportunities all waiting to be harnessed, the marketers lack the in-depth knowledge of the village psyche, strong distribution channels and awareness that are indeed the prerequisites for making a dent into the rural market. Moreover, vast cultural diversity and vastly varying rural demographics, poor infrastructure - be it inadequate roads and highways or the availability of telephones and electricity, low income levels, low levels of literacy often tend to lower the presence of the corporates in the rural markets. Thus, although the rural markets must be alluring, tapping the vast potential calls for a systematic psychographic analyses and an appropriate marketing mix to meet the consequent challenges of availability, affordability, acceptability. To achieve success, in rural India, companies will need to establish rural market development programme. There is a need to innovate and adapt products that suit rural operating conditions. The rural consumers need to be educated of new concepts, relevant to the environment and usage habits that will improve their quality of life.

In addition to focusing on targeted promotions and advertising there is an urgent need to work on economical packaging, dual pricing and special sizes of FMCG and household products. IT can be considered as an important marketing tool. Moreover, the corporates need to place emphasis on retailers directly rather than depending on the wholesalers for distribution in the rural market as this has not proved to be very effective and a proactive marketing medium. There is a need to generate superior data on rural marketing system, the haats, melas, mandis and on village and small town income levels and consumption patterns. They need to learn how to use existing market places - haats, melas, and mandis - to arrange live demonstrations of products. The ingredients for successful penetration into the hearts and wallets of village consumers include long-term commitment, cost re-engineering and sustained innovation and specialized strategies. I would like to mention that despite the hurdles that Rural economy presents, corporate-rural partnership can overcome these and bring about positive results for both the entities. Partnership needs to extend beyond agribusiness. It is not only the FMCGs but also the financial and insurance sector that needs to come forward. We are glad that today we have senior representatives from the Banking and Insurance sector to discuss their
8

success stories and tailor-made financial products that have been introduced by them to address the specific needs of the rural markets.

Characteristics of Rural markets There are certain characteristics of rural India, which every prospective marketer needs to be aware of before unleashing his product: Low income influenced by seasonal fluctuations Low literacy Diverse customs, languages and social structures Resistant to change Price sensitive High brand loyalty Influenced by traditions Moderate aspirational levels Quality Conscious Low to moderate risk taking ability These typical characteristics of the rural market make it evident that there are huge challenges, which a marketer will face. These challenges need to be tackled using appropriate strategies and proper planning. The major obstacles can be classified as follows:

The major obstacles can be classified as follows: Poor infrastructure facilities, which hamper the effective distribution of products and make the task of reaching the target consumer difficult. Traditional media is ineffective due to illiteracy and non availability. There is insufficient past research to provide some insight about consumer behavior. Disposable income is highly dependent on good monsoons and a rich harvest. Varying linguistic and socio-cultural norms compel the marketer to vary his marketing message for different parts of the same country. Role of women in buying process is still not independent of family constraints. Inadequate credit availability hampers the ability of rural retailers to carry stocks. Understanding the psyche of the rural consumer and gauging the complexity of the rural market has to be given utmost priority by marketer. Creative marketing solutions need to be devised to combat these barriers.

10

Difference between rural customer & urban customer:

Not only today - but there has been a vast difference between the two markets for a long time now. The difference is not only between urban and rural but also within the rural areas -- between regions, states and districts. There is a difference in the media reach, the education levels, in the culture and the type of products that the two markets are exposed to and this leads to a difference in the two markets. The difference is in things like -- how do you celebrate New Year, how do you celebrate birthdays? Small things like these are celebrated in a completely different manner when the rural and the urban customers are concerned. There is a vast difference in the lifestyles of the people in the two regions. The kind of choices of brands that a urban customer enjoys is different from the choices available to the rural counterparts. The rural customer usually
11

has 2 or 3 brands to choose from whereas the urban one has multiple choices. The difference is also in the way of thinking. The rural customer has a fairly simple thinking as compared to the its urban counterpart. The biggest thing is that there is lack of any research into the consumer behavior of the rural areas. There is considerable amount of data on the urban consumer regarding things like -- who is the influencer, who is the buyer, how do they go and buy, how much money do they spend on their purchases, etc. but on the rural front - the effort has started to happen now. So we need to understand the buyer. Also, whatever little understanding we have is not for the entire industry. There is no collective effort. Some people have spent time in the rural markets, carried out studies and have understood the rural behaviour, but their works have not been passed or known to the rest of the industry. So, an in depth understanding of the consumer is one key area that the industry needs to work on. Second is -- what appeals to him, what are the right kind of products for him. For example - can I sell the same Lux or the same Tata Tea that I sell to the urban customer to the rural as well? What needs to be the difference in the marketing mix when we try to sell the same commodity to the 2 different sections.

12

There are vast differences in the rural areas as well. There are some 5,60,000 villages and some 525 districts and each one is different from the other. The geographical spread is not as homogeneous as it is with the urban areas owing to vast cultural differences.

METHODOLOGY USED

In order to carry out any research investigation there is a need of a Systematic method and to adopt a well defined procedure for each and every research there is also a need of methodology . Methodology of any research constitutes ,application of the appropriate research tools and the techniques.

The research involves the following steps:1 - DEFINE THE PROBLEM AND RESEARCH OBJECTIVE:If the problem is clearly defined ,it is half solved .The problem Objective here to assess the scope of rural marketing
13

2 - COLLECT THE INFORMATION :The information is collected from secondary sources- Internet, books, magazines , newspapers , and journals

3- ANLAYZE THE INFORMATION :The next step in the marketing research process is to exact findings from the collected data . 4-PRESENT THE FINDINGS AND CONCLUSIONS :As the last step ,the findings and conclusion of whole research are presented . .

SOME PLAYERS ARE IN RURAL MARKET

Here the rain gods still play havoc with ones dreams. The dusty village path winds past a cluster of slumbering cottages and leads one to a weekly rural bazaar or haat, brimming over with din, bustle and transaction. This is where the real India resides. Telephone is a luxury here. Electricity, if at all, comes
14

here only in fits and starts. And a delivery by road may take any stretch of time. However, things are changing fast now. Thanks to the increasing literacy level and media explosion, people are becoming conscious about their lifestyles and about their rights to live a better life. Brand consciousness is on the rise. This, clubbed with increasing disposable income of rural households, has made the rural consumer more demanding and choosier in his purchase behaviour than ever before. And the dusky village damsel has now learned to pine for a satin rose .

The rural India offers a tremendous market potential. A mere one percent increase in Indias rural income translates to a mind-boggling Rs 10,000 crore of buying power. Nearly two-thirds of all middle-income households in the country are in rural India. And close to half of Indias buying potential lies in its villages. Thus for the countrys marketers, small and big, rural reach is on the rise and is fast becoming their most important route to growth. Realizing this Corporate India is now investing a sizeable chunk of its marketing budget to target the rural consumers.

Increasing brand awareness In the rural families, studies indicate a slow but determined shift in the use of categories. There is a r Increasing brand awareness In the rural families, studies indicate a slow but determined shift in the use of categories. There is a remarkable improvement in the form of products used. For instance, households are upgrading from indigenous teeth-cleaning ingredients to
15

tooth powder and tooth-pastes, from traditional mosquito repellant to coils and mats. There is also a visible shift from local and unbranded products to national brands. From low-priced brands to premium brands.

FMCG CONSUMPTION Organizations like Hindustan Lever Ltd., Nirma Chemical Works, Colgate Palmolive, Parle foods and Malhotra Marketing have carved inroads into the heart of rural markets. Various categories of products have been able to spread their tentacles deep into the rural market and achieved significant recognition in the country households. And, in the process, the regional brands, local brands and the other unbranded offerings got displaced by the leading brands.

Company HLL Nirma Chemical Company HLL Colgate Parle

Household penetration

Household penetration 88%

Nirma Chemical Works 56% Palmolive 33% Foods 31% 27% % volume of local

Malhotra marketing Category

brands/unbranded
16

Washing Tea Salt

cakes/bars

88 56 33

Of the expenditure on consumer goods in rural household, approximately, 44% is on food articles such as biscuits, tea, coffee and salt, 20% on toiletries, 13% on washing material, 10% on cosmetics, 4% on OTC products and 9% on other consumables. A number of category products have established themselves firmly in the rural households. It is evident that in the villages low-priced brands are well accepted and one might feel that a larger proportion of the purchases made in rural market can be attributed to local/ unbranded players. Surprisingly, however, the unbranded/local component contributes to a substantial portion of the volume of only a few of the highly penetrated categories. Focus on urban categories

Category Toilet Soap

Category

Brand with highest Lifebuoy Wheel Double mustard Lipton Nirma Tata Parle G Salt Taaza iran

Penetration penetration

Washing cakes/Bars 91% Edible oil 88% Tea Washin liquid Salt Biscuits powder 84% / 77% 70% 64% 61%

17

Though the commodity products have greater penetration, traditionally urban categories such as skin creams and talcum powder have also made a mark. While the urban talcum powder market suffered a de-growth, the rural talcum powder market darted ahead. Similarly, growth of rural skin cream market was at par with that of urban skin cream market. This clearly indicated that after being considered urban for a long time, some categories are now wearing a rural face. And, in many a case, it is the rural market that is actually driving the growth of category.

Premium brands Ponds is the leader in the talcum powder category with a penetration of 65% and volume contribution of 56%. Its rivals viz. Nycil and Liril are trailing far behind. Moreover, 60% of the Ponds users have purchased no other brand i.e. they are 100% brand loyal. This reflects the strength of the brand in rural bazaar. Category Skin creams Household Penetration 18% 15%

Talcum Powders

In the skin care category, Fair & Lovely fairness cream, with a penetration of 75%, accounts for 60% of the skin care market in rural India. It also enjoys the undistinguished patronage of 58% of its user households. Both Ponds and Fair & Lovely are enjoying a monopoly in the rural markets in their respective categories. Rural India is not averse to trying out the premium brands at high prices. A study indicated that a majority of the premium brand users are using the
18

brand for the first time. Similarly 0.9% of the talcum powder-using families have started using Denim talc and 0.7% of the shampoo using households started using Pantene. Surveys also reveal that trials are not restricted to the more affluent echelon of the villages. The experimenting households are more-or-less evenly spread across the various socio-economic clusters of the rural market. This should further encourage the marketers to focus their attention on rural buyers. Brand Surf Ariel Pantene Penetration category users 6.2% 4.5% 1.8% of

Denim 1.8% The rural youths are more open to fresh concepts as against their elderly family members. Their difference in choice of products/brands with the seniors of the households often leads to a dual-usage of product categories. As an instance, 20% of the households using tooth powder also use tooth paste. Similarly, many of the households using premium brands also use mass market brands. For example, while 15% of Surf and 12% of Ariel using families also use Nirma detergent, 3% of Denim users use Ponds Dreamflower talc and 18% of Pantene using households use Clinic shampoo as well.

19

MARKETING MIX FOR RURAL MARKETING Product The strategy revolves around what attracts the rural customer to a product. For example - Packaging. Now the rural customers are usually daily wage earners and they dont have monthly incomes like the ones in the urban areas have. So the packaging is in smaller units and lesser-priced packs that they can afford given their kind of income streams. Then a thing like the colour that attracts him is also important. Another important factor is Convenience. An example is what Colgate did to its tooth powder packaging. Firstly - it made sachets as was required by their income streams. Secondly - since many households dont have proper bathrooms and only have a window or things like that to keep such things -it was wise to cap this sachet for convenience of storage while use. So this is what they did. There is also a difference in the kind of media mix that is used to convey the messages to the rural customers. We need to use different models and means to reach them as what appeals to the urban customer may not appeal to him due to varying lifestyles. The communication and the design of it are also different as what attracts one need not attract the other as well. So again,

20

even if the media reaches him, there might not be an impact as it may fail to attract him as fails to connect to it due to the lifestyles being different. Then there is the case of product availability that again has different strategies. The concept of supermarkets coming up in urban areas is not the same as in rural areas. There the concept of Haats is more prevalent. FOR all the management jargon associated with it, CRM has had grassroots beginnings. Here's a classic example which illustrates this perfectly: CavinKare's Chik shampoo in 50-paise sachets - a huge success which redefined shampoo usage and forced giants such as HLL and P&G to follow suit - saw the idea germinate from the grassroots. Literally. Several years ago, CavinKare found that many rural consumers were using bathing soap for washing their hair. The company field force found the reasons - the rural consumer had not heard of soaps damaging hair, and in any case, hair was being washed by soaps for generations by their predecessors. Interestingly, the rural consumers were aware that a shampoo cleansed hair better, but was expensive at Rs 2 per sachet. That's when CavinKare began working on a shampoo for the rural consumer. The 50paise Chik shampoo was conceptualized then, and has since been a runaway success in rural markets

21

Keep Products Simple and Functional Driving consumption of goods in rural areas is not just about lowering prices and increasing volume sales. It is also about product innovation: developing indigenous products that cater to the needs of rural consumers who demand quality products at an affordable cost. This requires substantial R&D to better understand consumer behavior and preferences. A case in point is the rural market for shampoo. Hair products were introduced to rural India in an attempt to capitalize on a culture where hair grooming is taken extremely seriously by women. While rural women may wear faded saris and little jewelry, few step out without ensuring that their hair is in place. Consumer goods companies introduced a transplanted product from developed markets, the 2-in-1 shampoo/conditioner. Companies thought that women would be attracted to this product because it was cost-effective; however, initial sales were dismal. What companies failed to recognize is that most rural consumers had previously never used shampoo and did not value or understand the full benefits of conditioner. Several years back, Hindustan Lever focused on product development strategies for rural consumers who still did not use shampoo in India. Their research indicated that a prevailing consumer habit in rural India was to use soap for hair and body care. Rather than try to change instilled consumer
22

behavior, product developers focused on creating an opportunity. Consumers wanted a product that was convenient and low-cost. The result was a new 2-in-1 soap, a product that cleans the hair and body, and is targeted towards consumers in rural areas.

MODEL VARIANT:Models developed specifically for the rural market have found more takers in the market. For instance, Motorcycles that are designed to take on the rig ours of rural roads have succeeded more in the rural market. COLOUR VARIANT:The rural consumer differ from their urban cousins in colour preference . in case of some products , colour may matter vary much . firms can exploit this fact to their advantage. For example , ASIAN PAINTS understood the substantial difference between the rural buyer in the colour preference .

23

Different products/ models, Different brands, packing, pricing and different positioning By and large, the rural market can be tapped better through different products / models , different brands, different packaging and different positioning.

PACKAGE DESIGN AND PACK SIZE In some case, the product can be the same, but the package and pack size may have to be different for the rural target group. Package design and colour help identification of brands by rural buyers. Many rural consumers are not quite conversant with various brands .All the same, they manage to pick the brand that they want . They recognize the brands by its packaging. This reason why a number of local brands in rural areas imitate the packaging of big national brands. As regard pack size, as a general, it can be stated that smaller packs are more suited to the rural areas. Low purchasing power and limited availability of cash for shopping force the rural consumer to go in for smaller packs with low unit price. In some cases, they also prefer small

24

packs so that they can make a beginning on small scale and after trial and satisfaction go in for regular purchases. In recent years , sale of shampoo brands were priced at Re 1 or below per sachet helped the trail and adoption. The 5-gram Vicks Vapourb tin and the small size Lifebuoy soap are other such examples. HLL, has deepened coverage of many of its products in the rural market through such combination. It has come up with a series of small pack sizes/saches that specially cater to low end consumers. Logo , Symbols and Mnemonics :Image is far more potent the rural market , which in many cases is an uninitiated market. Symbols, therefore , add value to brand recall and brand personality in the rural market.

Asian Paints Gattu: Asian Paints Gattu though equally well known in urban and rural market , has greater effectiveness as an identity tool in the rural market .Actually in many rural parts of India , Asian Paints is referred to as the bahahawala or chokrawala company.

The Nirma Girl:

25

The Nirma Girl in Frock on the packs of Nirma washing powder has become the mnemonic for effective and good value in washing powders.

The Dettol Sword and the Mortein Genie: For the same reason , Reckitt& Colman has been focusing on the Dettol Sword and the Mortein genie in its rural communication.

Brand Decisions :Branding too needs skillful handling in the rural market. The rural consumers have already graduated from generic products to branded products. Today, the brand name is the surest means of conveying quality to rural consumers. In other words, brand is the key to confidence building among the rural consumers. Besides quality, it conveys that the manufacturer is going to show sustained interest in those products ands markets. Whether the same brand is used in either urban and rural market, or appropriate variants of the brand must be adopted for the rural market, is a matter for conscious decisions by the individual firms depending on the context. In quite a few cases, the same brand is providing right and cost effective. In some cases, however, the brand name that is suited to the urban market may not be quite suitable to the rural market. Low priced variants
26

seem to work better in majority of cases in the rural market. It will, however, be incorrect to assume that rural consumers prefer local brands to national brands.

Sell Value Brands, Not Cheap Brands;While brands specifically developed for the rural market and low priced variants may work better in many cases , the strategy should be one of selling value brands . HLLs Lifebuoy, for example, is a low priced carbolic soap that is often the first choice of bath soap by a rural consumer .HLL, however , does not sell it as a cheap soap. Instead, sell it as a hygiene brand. It communicates the value of the brand to the target market. It also tries to enhances the value of the offer by giving suitable add-ons .for example, while targeting rural students for the soap , it distributed height charts along with the soap and conveyed its concern for their health and well being . Rural marketers would do well to add some value to their products in this fashion if they are keen to secure the loyalty of the consumers.

27

Wider competition for a product

Many of the rural buyers tend to have little stock of money, only a flow. Consequently, they tend to make purchases only to meet their daily needs and have little capacity to build inventory. The marketing implications of this are far-reaching. Not only are pack sizes and price points affected, but in turns out that consumers have to make a selection from a much wider array of product categories. Thus the nature of competition for any given product is much broader. For instance, in a village haat, Coca Cola competes not just with Pepsi, but with a broad set of purchases that the rural consumers consider as treats.

Preference for Low Unit Packs (LUP) Trial is often encouraged by Low Unit Packs (LUP) or sachets. The sachet packaging strategy caught the popular FMCG imagination in the early 1990s and it was considered as a breakthrough in the psyche of the rural consumers. Today, the sachets are increasingly dominant on shelves. Shampoo, for instance, has invaded the rural households with sachets at low affordable prices. Sachets of tea, blues and washing powder are being
28

launched in a big way in the village haats by leading manufacturers. Companies like HLL and Marico are making concrete efforts to create and then meet the demand of rural consumers by launching products in small affordable packs.

Price: According to Euromonitor data, the 2002 per capita income of India was a mere $360. Marketing strategies in rural India must rely on large volumes over fat margins to drive profitability in such a price sensitive market. However, how can consumer goods companies drive volume growth when a regular bottle of shampoo costs more than the average daily rural wage? Hindustan Lever, a subsidiary of Unilever coined the term nanomarketing in the early 90s when it introduced its products in small satchets. In tiny pillow-like plastic packets that contain about 20 millilitres of product, Unilever sells shaving gel, dishwashing liquid and toothpaste, to name just a few items. The satchets answer the needs of rural consumers who cannot, or are not used to, buying larger sizes and enables them to buy on a more frequent basis.This strategy provides a viable entry-level price for many rural consumers who want to try new products, and allows companies to drive volume sales. Today, Hindustan Lever estimates its shampoo
29

sachets are sold in around 400,000 of India's 600,000 villages.Other multinational companies, such as Coca-Cola, have learned the hard way. After being thrown out by Indias earlier socialist government, Coca-Cola re-entered the Indian market in 1993 and struggled to grow its business. Coca-Cola overestimated the size of the market, misread consumer preferences and underestimated Pepsis market penetration in India which had beene stablished through its long-standing presence in the country. In 2000, the company wrote down its Indian bottling assets by $405 million after incurring years of financial losses.Since Coca-Cola recruited a local Hindustan Lever veteran, Sanjeev Gupta, its Indian operations have started to turn around. With a pulse on rural consumer needs and preferences, companies introduced a new, smaller sized bottle in 2001. The 200ml CocaCola bottle sells at 10c and is aimed at rural areas and lower-income urban markets (the Climbers and the Consumers).Furthermore, this year Gupta dropped the price of a 300ml bottle of Coca-Cola to 17c from 24c.These price cuts have boosted volume sales and the smaller sized bottle has been extremely successful and is expected to represent about half of Coca-Colas sales by volume in 2003,turning Coca-Colas operations to profitability.

Distribution:
30

Retailer Power While independent retailers are a fragmented group, they have a substantial amount of power in driving consumer purchases, particularly in rural areas. Most rural stores are cramped providing little opportunity for consumers to browse. The consumer interacts directly with the retail salesperson (usually the owner) and services often include informal lines of credit and home delivery in addition to personal opinions on goods. In rural areas, retailers tend to carry only a single brand in a product category. In such a retailing environment, being first on the shelf and developing a privileged relationship with the retailer is extremely important and a competitive advantage to consumer goods companies.One of the grey areas that needs to be probed more into is the Trade -- that is the retailer. When an urban consumer goes to shop -- he has many options in front of him(around 10 to 15 in some cases) as are displayed in the store. But for the rural customer these choices are limited. So the retailer plays a very big role here. The rural customer goes to the same shop always to buy his things. And there is a very strong bonding in terms of trust between the two. The buying behaviour is also such that the customer doesn't ask for the things by brand but like -- "paanch rupey waali chaye dena". Now it is on the retailer to push whatever brand he wants to
31

push as they can influence the buyer very easily and very strongly on the preferences. Unfortunately, we have not spent enough money and time on understanding the rural markets in a collective way. As we need to understand the consumer, we need to do the same thing for the retailer as he is a chief influencer in the buying decision.

Promotion There is an example in innovative media. It was used to push products in personal wash like Lux and Lifebuoy and fabric wash items like Rin and Wheel. For both, washing and for taking bath - one requires water. Now for rural markets there are three sources of water - wells, handpumps and ponds. For the first in the history of advertising - these were branded. Special stickers were put on the handpumps, the walls of the wells were lined with advertising tiles and tinplates were put on all the trees surrounding the ponds. The idea was to advertise not only at the point of purchase but also at the time of consumption. So the customer could also see the advertising when he was bathing or washing. Now, the customers who bought these brands got a sense of
32

satisfaction by seeing their choice being advertised in these places while a question was put in the minds of the customers who had bought other brands. So this was an innovative strategy that worked quite well. Therefore to understand the way the rural markets work -- we need to go to these markets and spend time there in understanding them. We live in surroundings where the things are completely different from what the rural customer experiences. And we can't understand him unless we go and spend time there. Things like what time does he get up, etc need to be studied and customer needs to be understood. Also these studies need to be passed on so others can also benefit from the ground works done and enhance them further. We need in depth studies of the market, the medium, the message and the rural customer in center of all these to understand the rural markets completely.

33

RURAL MEDIA

Urban consumers shop daily and have 365 opportunities a year to switch brands while the rural purchasers who buy their goods in weekly haats have only 54. Attempts to reach rural consumers, even once during the purchase cycle to ensure repeat purchase, make point of purchase advertising and trade push indispensable. This requires a significant reorientation in the allocation of funds across media. For example, outdoor advertising accounts for over 7% of all media expenditures in India, while it only accounts for 0.8% in USA.

Rural buyers living in small isolated groups distributed across vast distances have limited access to the broadcast media. The existence of a multiplicity of languages and varying level of illiteracy complicates the task of communication further. To overcome some of these challenges, Unilever pioneered the concept of video vans that travel from village to village screening films in the local language, interspersed with advertisements for Unilevers products. The company also provides product usage

demonstrations to the captive audience because written instructions on the pack may be illegible to the consumers who are either illiterate or do not
34

understand the dialect. Where mass media is used, variability can, at times, back fire. On re-entering India in the 1990s, Coca Cola decided to reinvest massively on a TV advertising campaign. It opted for slick commercials, rich in colour, with high production values, but the effect was somewhere lost on a market where 60% of all TVs are still black and white. However, in the recent past, the improved technology has allowed the cable and satellite networks to increase their reach across the countryside thus exposing a rural consumer to a lifestyle that was beyond his dreams. And this increasing awareness has led to a significant change in his buying behaviour and consumption patterns. While the urban market is getting increasingly competitive and saturated, the rural market is blooming with increase in the disposable incomes of the households, thus promising a far better scope for growth for marketers. Hence, with the shifting dynamics of the present-day market situation, now it is the turn of the rural consumers to dictate the terms. And this reinforces the need for marketers to formulate a well-designed strategy to feel the pulse and to tackle the mystic rural marketing.

35

Selecting The Media Mix :TV :With he increase in coverage and increase in TV ownership in rural areas , TV is gradually becoming the prime media for rural communication . Cinema :The cinema is a useful medium in rural context . most large and medium villages have one or more cinema house. Also, more than one-third of all rural people do see cinema as a matter of regular lifestyle. Advertisement films , short feature films, with disguised advertisement message, and documentaries that combine knowledge and advertisements, can be employed for rural communication. It has been estimated that 33 per cent of the total cinema earnings in the country come from rural India.

Radio:The radio is well -established medium in rural areas. A big expansion in broadcasting facilities has taken place in the country over the years. The availability of radio sets has also expanded. While radio as a medium cannot match TV in potency and effectiveness, in the existing context ,it can certainly play a significant role in rural communication.
36

Print media too has some scope :The role of print media is certainly limited in the rural context. Even the remotest rural parts have a small group, which is literate. Moreover, while the group may be numerically small , its member usually happen to be the opinion leaders , influencing the purchasing behaviour of the large segment of the rural consumers. so, it would be unwise to assume that the print media has no scope at all in the rural areas . Moreover, the younger generation in the rural areas is comparatively more literate. With the new trend of increasing rural literacy , the scope for using print media in rural communication will increase further. Outdoor:The outdoors , which include hoardings, wall paintings, illumination and other displays, also lend well for rural communication . In fact , many companies are using the outdoors in the rural communication mix. POPs ( point of purchase) :The POPs Point of purchase promotional tools- are also quite useful in the rural markets. The POPs meant for the rural market should be specially designed to suit the rural requirements. Symbols, Pictures, and colours must be liberally in POPs meant for the rural market. Colour is of particular

37

significance . As a general rule ,the rural people love bright colours. The effective Communicator utilize such cues.

Credit Rating Scheme A Credit Rating Scheme has been introduced to encourage the SSI Units to get their credit rating done by the reputed credit rating agencies, with a view to facilitating credit flow to them and enhancing the comfort-level of the lending banks. 75% of the cost of the credit rating exercise, with a maximum limit of Rs.40, 000 per SSI unit, is now reimbursed to the SSI units availing of this one-time facility. The scheme is being implemented by the NSIC. SME Fund Looking to the credit needs of the SMEs in 1990, the Small Industries Development Bank of India, (SIDBI) was launched to aid and finance for small enterprises with a corpus of Rs. 2500 crores. To further improve credit availability, a SME Fund of Rs. 10,000 crores has been operationalised under SIDBI from April 2004. Credit to SSI In order to facilitate smooth flow of credit to SSIs, the composite loan limit for SSI entrepreneurs has been increased from Rs. 50 lakh to Rs. 1 crore. Credit Cards Laghu Udyami Credit Card (LUCC) Scheme has been liberalized by enhancing the credit limit from Rs. 2 lakh to Rs. 10 lakh, for borrowers who have a satisfactory track record.

38

SSI Clusters 16 new industrial clusters were identified and taken up under Small

Industries Development Programme during this year. These are: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. Food Processing, Muzaffarpur, Bihar Steel Re-rolling Mills, Raipur, Chhatisgarh Agricultural Implements, Karnal, Haryana General & Light Engineering, Parwanoo, Himachal Pradesh Readymade Garments, Bangalore, Karnataka Gold Ornaments, Thrissur, Kerala Readymade garments, Indore, Madhya Pradesh Brass & Bell metal, Khurda, Orissa Agricultural Implements, Moga, Punjab Ball Bearings, Jaipur, Rajasthan Leather Footwear, Agra, Uttar Rpadesh Leather goods, Shaniniketan, Uttar Pradesh Installation of Common Facility Centre in Brass/Bronze, Utensils, Manufacturing Cluster at Pareb, Bihar Development of Whiteware Cluster at Khurja, U.P. Development of Auto Parts Clusters at Phagwara, Jallandhar and Development of Cane & Bamboo Cluster at Dimapur, Nagaland. The development of these clusters is at various stages of implementation.

Ludhiana

39

STARTING THE E - MARKETING IN RURAL INDIA

Modern information and communications technologies (ICTs) and web based marketing of agricultural produce hold great promise for the socioeconomic development of rural hinterlands in India. However, if they are to serve the `unserved and spawn innovation at grass root level their implementation must be carefully localised. This paper explores several models of ICT deployment and information design issues which have been tried in various parts of the developing world in the context of agricultural marketing over the web and uses that learning with field experience from a live project. The flexible systems framework is found appropriate and useful to design the next action agenda. The anytime-anywhere advantage of e marketing leads to efficient price discovery and offers economy of transaction for agricultural trading. This attracts many rural developmental agencies to deploy websites for marketing agricultural produce. But in spite of a core value proposition and significant investment by the Indian government/NGOs and commercial agencies in developing such portals, many have failed. Internet traffic on these websites is either very limited or none at all. Yet there is a lack of empirical studies on the modes of their failures. This study using the sap-lap methodology examines the experiences of a number of internet portals from India and other countries engaged in rural
40

marketing or disseminating rural development information, with usability measures derived from farmers and traders and those suggested by researchers. The findings are used in developing a conceptual framework for e-marketing info design for agricultural market in rural northern India for the portal (DM). Situation Common wisdom has it that the advent of modern information and communication technologies (ICTs) such as telephony or the internet hold unprecedented opportunities for rural development. Researchers, policymakers and entrepreneurs alike frequently claim that ICTs represent one of the most powerful tools in the struggle against poverty. The significance of the Web in disseminating information and

communicating this effectively to the targeted user has been sufficiently debated. Most experts agree to it that the Web will have a great impact on the way rural marketing would be conducted in the future, yet there has been little research towards exploring the effectiveness of the provision of agriculture-related and rural marketing information in the electronic form. This study set out to assess the current performance of agricultural websites in some key areas of information provision through such websites maintained by government departments and agencies, private profitmotivated as well as non-governmental organizations (NGOs), and to identify the barriers to communication. The results offer significant implications for researchers and practitioners interested in development of portal information structure for Web development, multi-dimensional
41

communication, electronic commerce networks and e-commerce trading platforms for rural marketing. There are a number of ways some obvious and some not-so-obvious ones in which ICTs may serve the development process. For instance rural entrepreneurs can benefit because ICTs help to improve access to markets or supply chains and provide a broader base for decision-making, thus making risk more calculable. Moreover, many local communities have experienced that ICTs have increased bottom-up participation in the governance processes and may expand the reach and accessibility of government services and public infrastructure. In Andhra Pradesh, Internet-based Integrated Citizen Service Centres allow for electronic bill payment, issuing of certificates, permits and licenses; or access to public information. The electronic village project of M.S.Swaminathan Research Foundation (MSSRF) in Pondicherry received the Stockholm award for its promise. However, there is as yet little systematic empirical evidence of the supposed enormous developmental impacts of ICTs. Moreover, in many especially rural areas, the private sector is yet to invest significantly in ICT experiments (except for a few like ITC or Tata Chemicals) because of lack of experience with rural markets or low purchasing power of the local population. This means that, if ICT access is to be expanded, public money will have to be spent which in turn means that there are important tradeoffs to be considered. In many areas, there are serious questions about how much money policymakers should spare for the build-up of ICTs instead of investing further in potable water supply, roads, electricity or other physical infrastructure projects.

42

Given such trade-offs, there is a need to identify which kinds of ICT access deliver the best value for money, and how the limited resources that can be spent on it can be made to best suit the particular needs of rural India. A number of `models have so far been tried. One of the most famous projects of successful ICT application for development is the Grameen Village Phone system, undertaken by Grameen Telecom (a member of the Grameen Group). The project aims at ultimately spreading phone access to the over 100 million inhabitants of Bangladesh who are so far unwired, made possible by combining the Grameen Banks expertise in village-based micro-enterprise and micro-credit with the latest digital wireless technology. The aim is to have selected member borrowers of Grameen Bank purchase the phones under a lease programme and make the phones available to all users in the village on a fee-paying basis.

Another model of ICT provision in rural areas of developing countries, and one which attempts to combine phone access with access to the Internet is that of the so-called Telecentres or Information Kiosks or the recently introduced Infothela of MLAKLH. An Infothela is a common point of access for multiple users (often an entire community), providing a range of ICT services including Internet, fax, phone, e-mail, word processing, and even specialised information retrieval or applications (e.g. distance education or matrimonial matchmaking). Telecentres have been established widely in the developing world, and vary in their service provision and means of funding. In Peru, the establishment of numerous `Cabaas Pblicas created one of the highest concentrations of public internet access and a significant reduction in prices. Nevertheless,
43

the experience with telecentres has so far been a mixed one. In numerous cases, usage, particularly of PCs, has been lower than expected or commercial viability was not attained. Of the over 70 Community Telecentres established since 1997 by the South African Universal Services Agency, only 40 per cent remain open today, with only 3 per cent making enough money to cover costs. Buried at the end of the World Bank policy paper on the Networking revolution: opportunities and challenges for developing countries ( June, 2000) is an account of multipurpose community telecentres (MCTs) in rural Mexico. It turns out that of twenty-three MCTs built in rural Mexico, only five were working two years later. This is a failure rate of 80 percent. The policy paper comments, Problems encountered included insufficient maintenance funding, inadequate political interest and will, and cultural constraints which hamper community interest in the projects. The paper gives no hint why political interest and will might have been inadequate and why community interest might have been constrained by that holdall excuse for failure, culture. The paper concludes that the Mexican case underscores the importance of participatory design and attention to sustainability issues in the development of such programs.

Actor Internet and Information Kiosks exist in various kinds, each with their respective merits. First, one might distinguish between the small private sector cyber cafes on the one hand and bigger, donor-funded telecentres like
44

e-Seva in Andhra Pradesh or e-Village in Pondicherry on the other hand. Smaller, privately run cyber cafes are often financially self-sustaining but are thus usually restricted to areas where they expect to be viable (usually urban centers) and are usually neither within physical nor financial reach of the poor. They are also unlikely to be able to provide local content. By contrast, larger, often externally funded telecentres are rarely financially sustainable but can focus more on specific development aspects, including access specifically targeted at rural communities and the poorest in general, as well as a focus on training. A second distinction is according to the institutional context they are embedded in. This often has a significant influence on the developmental impact of telecentres. commercial telecentres and commercial franchises (like e-choupals of ITC) are usually closest to commercial viability but, as mentioned, are unlikely to have an impact on the poor outside the economic circle of the e-Choupals. Telecentres run by or with the involvement of developmental NGOs are more likely to target poor and marginalized communities and focus on much-needed additional services like training, content creation, provision of public goods without which ICT access would be of limited developmental use. Telecentres in village schools for example as another alternative have the significant advantage that for their establishment an existing physical infrastructure only has to be extended and some of the ICT-relevant training can be cost-effectively integrated into the mainstream curriculum of the educational institution. This partnership has successfully worked in the DM project. One further idea for the Digital Mandi that evolved was Virtual Telephones or village voice mail systems, as have been set up in Brazil. These can
45

provide individuals with their own telephone number and access to a voice mailbox. In other words, the individual need not possess a telephone but can receive calls to a voice mailbox using his/her personal PIN. Extending this idea to text e-mail access, a South African company assigns e-mail addresses to every Post Office box address in the country, thereby providing electronic mail indirectly to around eight million South African households through public internet terminals located in post offices which users can access with a personal identification number. The Postal Department in India has now taken up a similar programme. . Thus there are a number of alternatives and apparently mutually exclusive business models for ICT implementation in Rural India. On one hand it appears that kiosks run by local entrepreneurs with localized and targeted applications (like e choupals in Northern India or voicemail service in Brazil or matrimonial matchmaking service in Tamil Nadu) will succeed on the other hand following the success model of the world wide web itself one may suggest that if an infrastructure is created and user friendly appropriate interfaces are continuously accessible then local rural folks will develop their own applications and Information Kiosks or Infothela will survive. The Digital Mandi Project conceived as an electronic trading platform for agro-commodities of Northern India and meant to run as a core application on the mobile Infothela faced additional problems. Barriers to information access may be physical, economic, intellectual or technological, that impede a users participation in the activities on a website. The barriers may be actively imposed by the architects and website designers or they may be allowed to continue simply through their lack of
46

action or lack of understanding of the critical user conditions. Such critical user conditions may arise due to particular demographic, geographic, cultural, social, psychological, economic or other factors. Issues related to usability such as ease of use, usefulness (Davis, 1989), decision effectiveness (Mason et al, 1973), user response, user satisfaction (Doll et al, 1988) and many other aspect of usability have been studied in great detail by researchers. But interactions with focus groups at various agricultural market places around Lucknow-Kanpur showed the need of a more detailed study on Information communication barriers on a more localised set of priorities. Learning It is therefore, assumed that a website with relatively high-level of accurate, up-to-date and pertinent content, deployed in a user-friendly way, customized to particular user groups, and tailored to specific geographical needs should be universally successful and hence, accepted in India too. However many such efforts have apparently failed to achieve their targets. The challenges to agricultural website usability for rural marketing in India arise mainly because of the highly specific local needs and the great diversity in local conditions. The major challenges are Poor literacy rate low use of textual information Remote village locations - physical distances compounding problems of lack of proper price information and habitual dependence on middlemen.
47

 Absence of alternate media for dissemination of info. Absence of info in vernacular languages and multiplicity of languages. Cash crunch of farmers, immediate cash transaction system and reluctance of banks to provide soft loans to farmers. Economic, low-cost solutions - any technology solution aimed at benefiting the masses in rural India must be affordable and low-cost so that the perceived economic benefits of such an endeavor are much more than the cost of switching over to a different technological solution.

Action The Digital Mandi project demonstrates that there are a number of features pertaining to the ICT access projects that are particularly successful from a developmental viewpoint This means, for instance, to somehow convey the relevant (local) content provided through internet access to the largely illiterate rural populations of developing countries in local language may have far- reaching spin-offs. It has a leased line connection to the Internet, and in the so-called process of radio browsing programme presenters browse the Web in the studio on behalf of listeners (who provide requests/input through phone or post). Relevant experts from the community then interpret the information for listeners. Another good example of the creation of relevant local content are the Infoshops in Pondicherry, India. After information requirements are
48

identified during a trial period, volunteers from the village create a local database comprising government programs for low income rural families; cost and availability of farming inputs such as seeds and fertilisers, grain prices in different local markets; a directory of insurance plans for crops and families; pest managements plans for rice and sugar cane; a directory of local hospitals, medical practitioners and their specialties; a regional timetable for buses and trains; a directory of local veterinarians, cattle and animal husbandry programs. All these preceding experiments contributed to the Digital Mandi design. Web site success depends on a number of factors the most important of which is the website design, which encompasses both the content creation and information design. All website design issues aim at providing certain requisite features in the website. Jonathan Palmer (see references) has contented that website success depends on such factors as website download delays, navigation, content, interactivity and responsiveness. The inclusion of these features into a good website can be addressed as (a) content-related issues (b) information design issues and (c) communication design issues. Traditionally, the basic work of a good website design has been considered as addressing the content-creation and context-appropriateness issues only. While website designing objectives for other purposes may be fulfilled by creating a good fusion of relatively high-level content with fine design features taking care of the issues mentioned above, they would certainly fall behind their objectives when considering agricultural websites for rural
49

marketing. The reasons as has been listed earlier, can be found in the inherent characteristics of rural markets in India. These websites are therefore bound to fail unless delivery services for agricultural information can be effectively integrated with good information design models and grass root innovators/ social activists agenda.

Performance The basic findings from our initial research at Digital Mandi has shown that the presence of a number of desired features in a website leads to higher user satisfaction. Such features are broadly aimed at satisfying one or the other of the following immediate user objectives: a) Ease of access. b) Up-to-date content. c) Layout, design, consistent themes. d) Easy navigation. e) Higher interactivity. f) Access through multiple media. g) Higher use of non-textual information. h) Multiple languages. i) Lower cost of transaction. It was assumed that each of these factors contributed to higher user satisfaction. The Digital Mandi project now wants to integrate an ethnographic approach with flexible systems methodology to focus on the
50

communication design issues for web-portals specifically devoted to rural marketing in India. The specific research questions are: 1. What are the major information design features for rural marketing in India? Hypotheses (a), (b), (c), (d) and (e) are tested to find answer to this question. 2. What are the major communication media tools to be used for agricultural websites in India? Hypothesis (f) is tested against this question. 3. What are the modes employed to transcend communication and cost barriers for specific user groups? What local language solutions are to be provided through What non-textual solutions can be provided for the What makes ICT relevant for the unserved rural

which media? under-educated, untrained user? communities?

51

IMPACT OF POWER BRANDS

"With the implementation of the power brands strategy almost complete, we have shown both topline and bottomline growth in this quarter." D Sundaram, finance director, Hindustan Lever Limited, after announcing Q3 2005 results. "We benefited by dropping brands with low profit margins or moving out of categories that were not growing." Harsh Mariwala, chairman and managing director, Marico Industries. Three men, one voice. Indian fast moving consumer goods companies like HLL, Godrej Consumer Products Limited and Marico Industries are completely sold on the concept of "power brands". But in their rush to put their best brands forward, are these big companies in danger of overlooking the potential offered by some of the also-ran brands? It's been almost five years since these three FMCG giants opted to manage their brand portfolios on the basis of the power brand strategy. How have they fared? And what does the future hold? Why power brands? In 2001, HLL decided to put its marketing resources behind 30 power brands out of a bouquet of 110. Of these select brands, the top five brands of the company contributed more than Rs 3,000 crore (Rs 30 billion) to the company's turnover (close to 30 per cent of sales). So what did it take to be a power brand? In a nutshell - size, brand strength, uniqueness and growth potential. The thinking in HLL? Helping brands grow under the prevailing market conditions required scale.
52

Even in 2001, the Indian FMCG market was crowded. More than 3,000 advertisements were beamed on television every month, while stockkeeping units at retail outlets had increased by over 40 per cent, in just three years. Unfortunately, for the most part, shop sizes remained the same. Which meant in-store displays - critical for impulse purchases - suffered. Even the plethora of television commercials wasn't helping the FMCG cause: it was difficult for brands to stand out amidst the clutter. For others like Marico, GCPL or Dabur, too, "getting more from fewer brands" became the magic mantra. In 2002, GCPL decided to focus on five brands in a bid to sustain growth; since these five contributed more than 90 per cent of the company's total sales, that strategy made eminent sense. Around the same time, Marico decided to exit from slow-growth, low margin sectors such as Sweekar edible oil and Sil jams. Instead, it chose to stick with brands like Parachute, Saffola and Hair & Care. Was the approach correct? Arindam Banerjee, professor and chairman, marketing area, Indian Institute of Management, Ahmedabad, agrees cautiously. "Power branding counters brand dilution by allocating organisation resources on lesser but more secured marketing investments," he explains. Adi Godrej is more emphatic. "[Power branding] is not to prevent dilution of brand, but to prevent dilution of the company's focus. If a company has 10 brands and tries to support all of them, focus on the important brands would be diluted." Top to bottom Has it worked out quite the way these companies anticipated? Global marketing experts aren't too bullish about a power brands strategy's impact on the balance sheet. "Power brands will have an impact on the bottomline of companies, but not necessarily on the topline growth," says Nirmalya Kumar, director, centre for marketing, and co-director, Aditya V Birla India
53

Centre, at London Business School. Jagdish Sheth, Charles H Kellstadt Professor of Marketing, Goizueta Business School, has a slightly different viewpoint. "You may have problems in the short run, but these can be ironed out in the long run. Introducing brand variants will help." Consider some numbers. Between 2001-02 and 2004-05, profits at GCPL increased 19.66 per cent, from Rs 41.98 crore (Rs 419.8 million) to Rs 86.07 crore (Rs 860.7 million). Over the same period, turnover went up less than 4 per cent, from Rs 520.47 crore (Rs 5.2 billion) to Rs 603.46 crore (Rs 6.03 billion). "This is clearly unsustainable," says an analyst. In sharp contrast, Marico has shown significant hikes in both turnover and profit from 2002 to 2005. While sales climbed from Rs 671.08 crore (Rs 6.71 billion) to Rs 953 crore (Rs 9.53 billion), profits increased from Rs 49.32 crore (Rs 493.2 million) to Rs 73.79 crore (Rs 737.9 million). For its part, HLL has been plagued by flat or declining growth for some time now. Between 2001 and 2004, profits plunged more than 22 per cent {Rs 341 crore (Rs 3.41 billion)}, while turnover dropped by Rs 892 crore (Rs 8.92 billion). The troubles magnify when specific categories are considered. Toilet soaps, for instance, contributed 24 per cent of HLL's sales in 2004, with sales value increasing marginally from Rs 2,089 crore (Rs 20.89 billion) to Rs 2,380 crore (Rs 23.8 billion). But sales volumes had actually declined, from 384,000 tonnes in 2001 to 368,000 tonnes, indicating that the growth was mainly on the back of price hikes. The story was repeated in reverse in the detergents sector, where HLL had three power brands (Surf, Rin and Wheel). Sales volumes increased from 892,000 tonnes to 930,000 tonnes, but sales value crashed from Rs 1,975 crore (Rs 19.75 billion) to Rs 1,872 crore (Rs 18.72 billion), thanks to the price wars with Procter & Gamble.
54

The lesson? Power brands may be "powerful" to the company or the retailer, not necessarily to the consumer. Not everyone agrees. Counters a senior HLL executive, "The impact was because of the migration phase to power brands - sales of non-power brands declined." He adds that the company's power brands strategy will boost both topline and bottomline growth in the future. It doesn't help that India isn't just one, big market: it's several hundred. Brooke Bond tea may be a power brand for HLL, but it doesn't face the same enemy in every market in the country: if Wagh Bakri rules in Gujarat, Girnar and Sapat vie for the top honours in Maharashtra. Making matters worse is the fact that rural India is an entirely different nation when it comes to preferences. That's a problem GCPL, too, faces; at present, rural sales account for just 30 per cent of the Rs 603.46 crore (Rs 6.03 billion) company's sales, but the company expects that figure to go up substantially in the coming years. Marico's Mariwala agrees that penetration is difficult to achieve with a power brands strategy. Consequently, segmentation takes a hit, because you don't have 20 brands for 20 different people. "As a brand grows larger, it simply cannot mean everything to everybody," agrees London Business School's Kumar. There is a way out, though. Kumar points out that a power brand strategy allows a company the luxury of targeting fewer segments, but the more profitable segments. HLL found another way. In addition to its 30 national superpowers, it also has 10 regional jewels. HLL executives point out that with fewer brands on which to focus, the company will be able to manage its marketing spends better.
55

Godrej is attempting to beat regional diversity at its own game. For instance, when toilet soap Godrej No.1 entered the sub-popular category in 1998-99, it had only one offering: rose. It soon also introduced its first variant, sandal, which has proved popular in the southern markets. The rose variant finds takers in northern states such as Uttar Pradesh, Bihar, Punjab, Madhya Pradesh and Rajasthan. One, two, three, you go free If the rural-urban divide cuts into the aspirations of power brands, the changes in the urban shopping landscape renew hopes. Most analysts expect shoppers to throng to malls and hypermarkets, for everything from electronics and clothing to groceries. As the shopping landscape changes in India and malls look down upon holein-the-wall outlets, power brands could be an answer. According to HLL, at present just 3 per cent of Indian customers shop through organised retail outlets. The average in Asia -- 30 to 35 per cent. How will organised retail help power brands? In developed markets, all brands, leaving aside the top three sellers, have to buy space on retailer shelves. Since private labels get a free ticket to the shelves as the third brand, it is important to be a No. 1 or No. 2 in a category. Marketing experts claim that large-format retailers have changed the destiny of companies in foreign countries. Sheth refers to P&G's experience in Canada. In that market, rival Unilever was a market leader with loyal customers, while P&G wasn't doing all that well. When Wal-Mart entered Canada, it changed the complexion of the market. Wal-Mart provided P&G a much-needed distribution channel. In five years, P&G gained significant market shares in Canada. "When a Wal-Mart happens to India, the power branding companies will reap better benefits," says Sheth. That's because
56

organised retail formats will provide more display space to power brands, their extensions and variants: and marketers believe that whatever gets seen, gets sold. That's not happening at present. Remember, more than 90 per cent of grocer shops in India are cubby-hole outlets. So, what's the final take-away? Will a power brands strategy work in the future in India? The answer: it depends on the category, the market and the consumer. Now, where have we heard that before? Power brands in perspective Power brands as a concept came into existence by seeing the retailer as an economic partner. When a P&G executive paid a visit to Japan, he saw the respect and importance given to retailers -- something that was not happening in the US where there were several layers in the distribution channel. Later, when Wal-Mart emphasised that it was the largest customer for P&G and the company could work closely with the retail chain and reduce costs in its supply chain, P&G started power brand projects with Wal-Mart, K Mart and others. The principle was simple. Brands were rationalised to support the super retailer. In 1999, P&G's arch-rival Unilever decided to focus on 400 out of its 1,600 strong brand portfolio. Two years later, Unilever's Indian arm, too, adopted the same strategy. Hindustan Lever decided to spend on only 30 brands and 10 regional brands from its original basket of 110 brands. Other Indian companies, too, decided to follow the power brands strategy, including Godrej, Britannia, Dabur and Marico.
57

Recently, Vijay Mallya's United Spirits also joined this group by naming Director's Special, Antiquity, Bagpiper, McDowell No 1, Signature and 10 other brands as power brands. CHANGES IN RURAL MARKETING

Anugraha Madison has widely been credited with introducing the concept of rural marketing in India. The company was one of the first marketing firms to realise the potential of rural India and decided to focus on rural marketing. R V Rajan, chief managing director, Anugraha Madison, shares his views with Shobha Warrier on how rural India has changed over the last two decades. When marketing agencies concentrated only on urban India, why did you decide to focus on the rural market? My foray into the rural market was not deliberate. It so happened that when I came to Chennai from Mumbai in 1974, I found that most of the clients belonged to the agriculture and fertiliser sectors. So I had to deal with farmers. When Sam Balsara of Madison came down to Chennai looking for an associate, we decided to have a joint venture and position ourselves as rural specialists mainly because of my experience in the field. Although I have been involved with rural communication and marketing for the last two and a half decades, the positioning of Anugraha took off only after the joint venture.
58

In the last two and a half decades, how much has rural India changed in its aspirations, attitude and consumption? Rural India has changed tremendously. The data published by the National Council of Applied Economic Research shows that in the last ten years, the income of rural India has grown several-fold. There is a definite shift from middle to upper middle class and from lower to middle class segments. Is the shift due to the growth in Indian agriculture? For the last 10 consecutive years, we have had good monsoons. So, agriculture is prospering. Of course, there have been setbacks in the last couple of years. Another interesting aspect is, today rural India is not 100 per cent dependent on an agrarian economy. Unlike in the past where the ratio between those who involved in agriculture and in other business was 75-25, today the estimated ratio is 50:50, if not 60:40. So today, 50-60 per cent of the rural population is involved in other businesses. A lot of people belonging to the second generation are getting white-collar jobs in nearby towns. So, there is a growing middle class with a monthly income in rural India and it is a drastic change from the past where their income was totally dependent on the monsoon, cropping season, etc. This has resulted in a definite growth in the prosperity level in rural India. Of course, there are still a lot of poor people, especially the agricultural labourers. But there is a growing middle class with regular income and the rural rich are becoming richer. Is the urban-rural divide in India thinning now?

59

The urban-rural divide is still there, but the divide between urban and rural India is thinning among the top segment of rural India. The rural rich are almost like urban India. Rural India is like a pyramid. The top of the pyramid is occupied by the rich farmers and businessmen. They may constitute around 5 per cent of the population. The next level belongs to those with a regular income and the base of the pyramid is occupied by the vast majority of the people who are daily wage labourers. So we cannot say that the urban-rural divide has melted. It is still there. But there is hope with the growing emphasis on education. How would you categorise different parts of rural India? In India, we have the developed rural India and undeveloped rural India. Punjab, Haryana, Tamil Nadu, Andhra Pradesh, Kerala and parts of Maharashtra come under the developed rural India but the rest of the states are undeveloped where power, infrastructure, etc are big problems. The prosperity of Kerala has come from the NRI income and not from agriculture. Today, there is hardly any village in Kerala. Tamil Nadu is prosperous as power and good roads are available. All the villages with proper infrastructure have developed. In such villages, people also have better access to towns and cities. What are the major reasons for the change in the lifestyle of the developed rural India? Television has done wonders to rural India. Today, especially in the south, the penetration of satellite television is very high, which is around 50 per cent unlike 25-30 per cent in the rest of the country. These people may not be literate in the true sense but they know what is happening around the world because of television. They know how the rest of the country live.
60

Do you television is driving the aspirations of rural India? Definitely, the rural youth today is an important trigger in changing the profile of rural India. About 40 per cent of the graduates coming out of Indian universities today are from mofussil areas. And, they are all doing very well. Their aspirations are similar to the urban youth, and it gets reflected in their eagerness to earn more and live better. So, if there is a problem in agriculture, they do something else. They ensure that they have steady flow of income. It has been reported that by 2009-10, the number of urban households is projected to grow by 4 per cent, while rural households are expected to grow by 11 per cent. Does this mean developmental initiatives are reaching rural India? The total expenditure of urban India is almost equal to what has been spent by rural India. But what is being spent by urban India is being done by only a small percentage of the population. About 25 per cent of the urban India is spending as much as 75 per cent of what rural India is spending. This shows the potential exists in rural India. There is a huge market waiting to be tapped in rural India. So the corporate world cannot ignore rural India? Yes, they cannot afford to ignore rural India. Unfortunately, they are only talking about it, they are not investing enough to get the maximum mileage out of it. For them, rural India is an unknown entity even today, and it calls for a lot of investment. Initially, the ratio between investment and returns will not be the same as you see in urban India. For urban India, one television spot is enough but it's not so in rural India. You have to slog it out there. But eventually, you will get the returns. In today's corporate world, all
61

the managers, especially those working in the MNCs depend on their quarterly results. They only look at what gives them immediate success. Freebies have no meaning in rural India. You have to give value for money for the brand you are selling.

How long can the corporate world ignore rural India? You will not be able to survive without rural India in future. One company that conquered the rural market 50 years ago and has consistently ruled is Hindustan Lever. About 50-55 per cent of their sales come from the rural market. Even today, they are constantly innovating and improvising. And Hindustan Lever is marketing directly in the rural markets. The success of Cavin Kare has become a very notable case study. It is a company that began in a small way. It started the Chic shampoo sachet for 50 paise when shampoo was available at Re 1, and it revolutionised the market. The sachet pack itself was a novel way of attracting the rural market. Now, it has conquered the rural market all over India. They are giving a run for Hindustan Lever's investments, as they have understood the local market very well and communicate in their language. Now, Maruti is also seriously looking at rural India. According to a report, between June 2002 and December 2003, rural per capita consumption expenditure grew by 11.5 per cent while the urban expenditure grew by 9.6 per cent.
62

There is a tremendous potential for consumer durables like television sets, refrigerators, air-conditioners and household appliances in rural India. After the basic needs of food, cloth and shelter, they are looking at how to live better. Television is the most sought after consumer item in rural India followed by two wheelers. Gradually, they are moving to small cars like Maruti and that's what Maruti is trying to exploit.

Creating Rural Business Hubs To strengthen, stched are often well below the fair market price The creation of a global trading network proposed by representatives of groups, governments and development agencies Accenture Development Partnerships (ADP), UK commissioned to conduct feasibility tudy. Recommendation: The business case is strong and establishment of the company should commence as soon as possible Grassroots Trading Network (GTN) will be piloted in India in 200405. GTN will then be expanded across Asia, moving into Latin America in year 3 and Africa in year 6 Connect poor producers globally to wider markets grassroots producer

63

 Provide support for the development, marketing and distribution of products by mentoring + capacity building Facilitate collaborations between producer groups, businesses, research and policy think tanks, advocacy groups, international organizations, and governments Campaign to improve international trade policies and tariffs that hinder the poor Aggregate best practice from the commercial sector and apply it to grassroots producer organizations Vibrant Centres of Commerce in rural areas with the right conditions to accelerate grassroots entrepreneurship as well as to encourage the expansion of businesses that have traditionally operated in urban markets into rural markets Small rural entrepreneurs exist need to expand for economies of scale Their strength lies in production, not in marketing and distribution With access to marketing and distribution, their volumes will grow Distribution Houses is one solution Distribution Networks should allow flow of products and services

out Small rural entrepreneurs exist need to expand for economies of scale

Their strength lies in production, not in marketing an

DISRIBUTION

64

With access to marketing and distribution, their volumes will grow Distribution Houses is one solution Distribution Networks should allow flow of products and services of rural markets as well as into rural markets Out Small rural entrepreneurs exist need to expand for economies of scale Their strength lies in production, not in marketing and Distribution Houses is one solution Distribution Networks should allow flow of products and services of rural markets as well as into rural markets Over 95% of urban India does not know rural India Corporate India realises the need for expansion into rural markets given saturation of urban mkts + eroding margins. Over 70% of countrys populationuntapped consumer market + human capital How? Presently, lack of knowledge, data and experience inhibit success Result: Products and Marketing Strategies are not being adapted or created with rural consumers in mind Learn from 1. FMCG industries 2. NGOs 3. Others (e.g. IRMA) with knowledge and experience of how things work at the grassroots GTNs Role: Demonstrate the poor are viable consumers+producers The GTN Consolidator Model Identify needs / benefits for involved partners to ensure a win-win situation for all With Globalisation, economies of scale is critical If we can tap the production strength of this large rural population with its small scale enterprises, consolidate it
65

distribution

With access to marketing and distribution, their volumes will grow

and provide larger players

with their requirements - we have an answer

 GTN projects in agriculture demonstrate the model. Also being extended to handicrafts/handlooms/textiles Sewa Graam Mahila Haat (SGMH), agricultural marketing arm of SEWA, provides small and marginal farmers with technical, financial and marketing assistance Pilot between ITC & SGMH for procuring sesame seeds, where SGMH was positioned as the Consolidator In 2003, ITC purchased 250 tonnes of sesame seed from SGMH who procured this from 1450 poor farmers Price realisation went up from Rs 18/kg in 02 to an avg of Rs 29/kg in 03. Avg realisation/farmer: up by Rs 2,000 ITC now plans to procure amla, cumin, groundnut in 04 + equip SGMH to produce organic sesame Creating a Rural Distribution Network -The Objectives SGMH & HLL A. B. Procure agricultural and cottage industry goods from SEWA rural producer members Employ SEWA women members to: Process and pack the goods Sell finished goods in a direct-to-home model, most effective communication channel, given low literacy Implement promotional campaign e.g., skits SGMH, GTN & HLL established the business and implementation plan:
66

 Piloting in 84 Gujarat villages between Oct 04 - Feb 05 Brand name RUDI (Rural and Urban Development Initiative). Also, means beautiful, pure + SEWAs first woman member

67

Bridging the Knowledge Gap Partner with NGOs and others to leverage their grassroots experience + knowledge Executive Training Programs to understand rural India Expose small enterprises + NGOs to business practices

Financial Capital Expand Micro Finance Schemes nationally Micro Finance Schemes largely debt-based. Also need Equity Finance Industry Chambers + Banks work with Government to devise new ways to lend to the rural sector, safeguarding banks interests Marketing and Distribution Government Policy, incentivizing Distribution Houses Reduce Entry Barriers The Government and Industry Chambers need to work out the modalities to make the process less cumbersome and more transparent. This will also reduce rent seeking behavior

68

COMMUNICATION Dealing with two very different worlds Initiatives breakdown because of lack of understanding of the other world Organizations arent on the same page Market Linkages Sales & Distribution of GPOs Branded Goods: Promote ears-to-ground approach Analyze sales data for understanding and directing production to the market Identify domestic and international markets for expansion Identify products for markets based on GPOs capability Create responsibility/accountability for sales targets

Large Retailers: Identify buyers based on GPOs capability Facilitate understanding of buyers requirements Enhance GPOs skills to supply to large buyers through domain experts Vendor Development:
69

 Identify buyer interested in vendor development exercise Map GPO products to buyer needs Define gaps where buyer and domain experts will work with GPO to upgrade skills Capacity-Building Support Conduct As Is Analysis to determine gap between GPOs status and vision Map business processes to identify bottlenecks in supply chain Engage domain experts to work with GPOs to address critical problem areas, develop or refine systems, and upgrade skills Knowledge and Information Management Host workshops bringing together experts from GPOs, businesses, government, development and multilateral agencies for sharing knowledge and best practices Document and disseminate case studies based on hands on experience with GPOs Policy Analysis and Advocacy Partner with international bodies/lobbies to promote interests of GPOs Host multi-stakeholder consultations for GPOs to voice thei

70

OPPORTUNITY OF RURAL MARKETING

Urban consumers shop daily and have 365 opportunities a year to switch brands while the rural purchasers who buy their goods in weekly haats have only 54. Attempts to reach rural consumers, even once during the purchase cycle to ensure repeat purchase, make point of purchase advertising and trade push indispensable. This requires a significant reorientation in the allocation of funds across media. For example, outdoor advertising accounts for over 7% of all media expenditures in India, while it only accounts for 0.8% in USA. Rural buyers living in small isolated groups distributed across vast distances have limited access to the broadcast media. The existence of a multiplicity of languages and varying level of illiteracy complicates the task of communication further. To overcome some of these challenges, Unilever pioneered the concept of video vans that travel from village to village screening films in the local language, interspersed with advertisements for Unilevers products. The company also provides product usage demonstrations to the captive audience because written instructions on the pack may be illegible to the consumers who are either illiterate or do not understand the dialect. Where mass media is used, variability can, at times, back fire. On reentering India in the 1990s, Coca Cola decided to reinvest massively on a
71

TV advertising campaign. It opted for slick commercials, rich in colour, with high production values, but the effect was somewhere lost on a market where 60% of all TVs are still black and white. However, in the recent past, the improved technology has allowed the cable and satellite networks to increase their reach across the countryside thus exposing a rural consumer to a lifestyle that was beyond his dreams. And this increasing awareness has led to a significant change in his buying behaviour and consumption patterns. While the urban market is getting increasingly competitive and saturated, the rural market is blooming with increase in the disposable incomes of the households, thus promising a far better scope for growth for marketers. Hence, with the shifting dynamics of the present-day market situation, now it is the turn of the rural consumers to dictate the terms. And this reinforces the need for marketers to formulate a well-designed strategy to feel the pulse and to tackle the mystic rural market. The above article has been condensed/abstracted from the following articles with all their rights are reserved. 1. Rethinking marketing programs for emerging markets, 2. Growing brand awareness, Concept: In recent years, rural markets have acquired significance, as the overall growth of the economy has resulted i.e. companies who see the poor as their customers. substantial increase in the purchasing power of the rural
72

communities. On account of green revolution, the rural areas are consuming a large quantity of industrial and urban manufactured products. In this context, a special marketing strategy, namely, rural marketing has emerged. But often, rural marketing is confused with agricultural marketing the latter denotes marketing of produce of the rural areas to the urban consumers or industrial consumers, whereas rural marketing involves delivering manufactured or processed inputs or services to rural producers or consumers. What makes Rural Markets Attractive? Rural market has following arrived and the following facts substantiate this.742 million people

Estimated annual size of the

rural market FMCG Rs 65,000 Crore Durables Rs 5,000 Crore Agri-inputs (incl. tractors) Rs 45,000 Crore 2 / 4 wheelers Rs 8,000 Crore In 2001-02, LIC sold 55 % of its policies in rural India. Of two million BSNL mobile connections, 50% in small towns/villages. Of the six lakh villages, 5.22 lakh have a Village Public Telephone (VPT) 41 million Kisan Credit Cards issued (against 22 million credit-plus-debit cards in urban) with cumulative credit of Rs 977 billion resulting in tremendous liquidity. Of 20 million Rediffmail signups, 60 % are from small towns. 50% transactions from these towns on Rediff online shopping site
73

42 million rural HHs availing banking services in comparison to 27 million urban HHs. Investment in formal savings instruments: 6.6 million HHs in rural and 6.7 million in urban Opportunities: Infrastructure is improving rapidly. In 50 years only 40% villages connected by road, in next 10 years another 30%. More than 90 % villages electrified, though only 44% rural homes have electric connections. Rural telephone density has gone up by 300% in the last 10 years; every 1000+ pop is connected by STD. Social Indicators have improved a lot between 1981 and 2001 Number of pucca houses doubled from 22% to 41% and kuccha houses halved (41% to 23%) Percentage of BPL families declined from 46% to 27% Rural Literacy level improved from 36% to 59% Low penetration rates in rural so there are many marketing opportunities. Durables Urban Rural Total (% of rural HH) CTV 30.4 4.8 12.1 Refrigerator 33.5 3.5 12.0 FMCGs Urban Rural Total (% of rural HH) Shampoo 66.3 35.2 44.2 Toothpaste 82.2 44.9 55.6 Marketers can make effective use of the large available infrastructure
74

Post offices 1,38,000 Haats (periodic markets) 42,000 Melas (exhibitions) 25,000 Mandis (agri markets) 7,000 Public distribution shops 3,80,000 Bank branches 32,000 Proliferation of large format rural retail stores which have been successful also. DSCL Haryali stores M & M Shubh Labh stores TATA/Rallis Kisan Kendras Escorts rural stores Warnabazaar, Maharashtra (annual sale Rs 40 crore) Rural Consumer Insights: Rural India buys. Products more often (mostly weekly). 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. Chik shampoo, second largest shampoo brand. 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
75

Strategies to be followed: Marketing Strategy: 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. Distribution Strategy: 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. 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
76

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. Promotional Strategy: 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.

77

PROBLEMS IN RURAL MARKETING 1. Underdeveloped people and underdeveloped market; The agriculture technology has tried to develop the people and market in rural areas . unfortunately ,the impact of the tectology is not felt uniformly through out the country .while there are pockets- some districts in punjab .haryana or western utter Pradesh where a rural consumer is some what comparable to his urban counterpart , there are lage areas and groups of people who have remained beyond the technogial break throgh .

2. Lack of proper physical communication facilities; Nearly 50% of the villages is the country does not have villages in the country do not have all weather roads. Physical communication to these villages is highly expensive. even today ,most villages is in eastern part today inaccessible during monsoon season. hence, distribution put in by manufacturer prove expensive and some times of no consequences .to be effective the products have to be physically moved to places of consumption or places to purchase.

78

3. Media for rural communication; Among the mass media, at some point of time, say in late 50s or early 60s ,radio was considered to be a potential ,medium for communication to the rural families . Now the advent and expansion of telecast network appears for easy communication with rural masses. The question is how many peole access viewing television? There is a need to examine the ownership pattern of television sets in rural areas to judge the potential reach of this medium. Another mass medias cinema. it has been observed that cinema viewing is fairly satisfactory ,where available . Mobile theaters are also good medium but very expansive companies like HLL using these vans found 10 to12 times higher in rural areas than urban areas due to bad roads in areas

4. Hierarchy of markets. Rural consumer has identified market places for different items of their requirements. So there can not be uniform distribution pattern for all products. It has been seen that 90% of farmers visited the nearest town , where an agricultural produces assembling market is situated at least once a quatter for either selling the produce or for purchase of there requirements . so town/ mandi centers with large hinterland villages become
79

the focal point thus depending upon the purchase habit of rural people. The distribution netwpork for different commodities has to be different.

5. Low level of literacy:

the literacy rate is low in rural areas as compare to urban areas. This again leads to the problem of communication for promotion purposes. Print medium becomes in effective and to an extent irrelevant in rural areas since ita reach is poor and so is the level of literacy. The dependent should be more on electronic media cinema, radio and television. While the excess to cinema and radio appears to be fairly easy and common. in not so in case of television. Television advertising is very expensive. Probably it will be prudent to take advantage of such professional rural advertising agencies. The promotion of product along with distribution is also being resorted to by many.

6,

Seasonal demand:

the distribution of any product in rural areas either agricultural inputs , consumables or durable should necessarily follow a seasonal pattern. Since 75% of the rural income is generated through agricultural operation which is seasonal so the demand pattern is also seasonal. A typical example is that of
80

fertilisers.the demand of fertilizers is always high during the start of kharif and rabi system the fertilizers manufacturers have evolved a distribution pattern so that the seasonal demand can be met. Like wise the demand for consumables and durable will be high during the pek crop harvesting and marketing season. . this is the time at which the rural people have substantial cash inflows. Hence the distribution should be fairly intensive. During harvesting season this arrangement would result in adequate sales realisation vise versa in summer months the demand will be very low festivals seasons like sankranti, poangal, vaisakhi or depawali are also demand seasons. So the distribution of rural areas should be more and frequent during the harvest and festival seasons as opposed to a fairly uniform demand pattern in urban areas.

81

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. My research has attempted to explore the key opportunities and challenges of marketing in rural India. To be successful, multinational consumer goods companies need to be innovative, dogged and culturally sensitive in developing rural marketing strategies. A direct transportation of traditional marketing strategies that have worked in core first world markets will likely need to be localized to cater to the substantially lower per capita incomes, a lack of formal retail and distribution networks and the relatively low cost of labor. It is a testament to both multinational and local consumer goods companies that they have been able to innovate and address the challenges offered by Indias rural market to bring goods, to and improve the lives so many people. These successful marketing techniques may even be introduced to other large emerging markets.
82

SUGGESTION
Products must be specifically designed/modified for rural costomers through industrial engineering excercises for transportation, storage, performance, operation, packaging and servicing requirements.

thrusting urban technology down rural markets is not desirable. relate technology to market development indexes. Check primary, secondary, and transport packaging for rural oreintation.
Sales forecasting, positioning, inventory management, inter territory

transfers, pricing and credit management are functions of how the agriculture in the area is faring. managers must learn to corelate and respond to drought, floods, irrigation,good and bad monsoons,

harvesting and sowing seasons and impact of these on disposable incomes of rural households. Location, shop profile, dealer network, financial position, cash to credit outlook, reputation, track record, allied lines, accounting, ability to implement company policy, competitive products position, attitude and partnership status are some useful criteria. Demand generation programs should be carried out through teams with daily review by team leaders. dgp must result in brand awareness and movement from dealer shelves.
83

Brands must have visual identity, be regularly available, and promoted with few price changes. Make an it enabled system for reporting, informatiom, data

collection, and periodicity area wise, mandiwise. Make market research an ongoing activity territory wise rural development plus rural marketing should be done companies should introduce good supply chain practices - deliver 24 hrs

84

BIBLIOGRAPHY

Rural Marketing -S.L.Gupta www.google.com www.ciionline.org www.msnsearch.com

85