Innovations In Rural Marketing

M.S.RAMAIAH INSTITUTE OF TECHNOLOGY (Autonomous, Affiliated to Visvesvaraya Technological University)

Vidya Soudha, MSR Nagar, M.S.R.I.T Post, Bangalore-5600054

Department of Management Studies SEMINAR on INNOVATIONS IN RURAL MARKETING

Submitted by: Divya Shree. S USN – 1MS08MBA14 Under the Guidance of Mr. V.K. Srirama

in co-ordination with Mrs. Rizwana. M

CONTENTS • Introduction. • Scope of the study • Highlighting features of Rural market. • Significance of Rural markets in Indian economy. • Literature cited

• • • •

What is Innovation? Marketing innovations Rural Marketing Mix Challenges in Rural Market • Examples • Learning experience • Conclusion

Rural Marketing Definition Function that manages all activities involved in assessing, stimulating and converting the purchasing power of rural consumers into effective demand for specific products and services to create satisfaction & a better standard of living for achieving organizational goals.

SCOPE OF THE STUDY  The emergence of Rural markets in Indian context.  The present scenario of rural marketing in India.  The future prospects of rural markets and their scope for the MNCs and Indian companies, in India.  The challenges faced by rural marketers in India.  The reasons of popularity of rural markets in India.

Features of Indian Rural Markets • • • • •

Large and Scattered market Major income from agriculture Low standard of living Traditional Outlook Infrastructure Facilities

SIGNIFICANCE OF RURAL MARKETS 1. Large Population 2. Higher Purchasing Capacity 3. Market Growth 4. Development of Infrastructure 5. Insulated from the global economic slowdown (RMAI)

 Some of the facts that will highlight the potentiality of rural market are:  According to a study by the Chennai-based Francis Kanoi Marketing Planning Services, estimated annual size of market is –  In 2001-02 * LIC sold 55% of its policies in rural India. * 50% of BSNL mobile connections sold were in small towns / villages. * 41 million Kisan Credit Cards issued were in rural areas (as against 22 million Credit Plus Debit Card in urban). FMCG Consumer Durables Agri Inputs (e.g., Tractors) 2/4 Wheelers Total

Rs. 65,000 Crore Rs. 5000 Crore Rs. 45,000 Crore Rs. 8,000 crore Rs. 1,23,000 Crore

Literature cited  Books: • Rural Marketing by C.S.G. Krishnamacharyulu, Lalitha Ramakrishnan • Rural Marketing by T.P.Gopalswamy, II edition. • Rural Marketing- Text and cases by U.C.Mathur.  Websites: • www.wikipedia.org • www.business-standard.com • www.indiastudychannel.com • www.ruralrelations.com •

 Articles: • Rural Retailing by Navya Choudary, NIFT New Delhi • India business Directory • Rural mktg and its significance, by C. Pavithra (Research scholar, Periyar University) • Soumen Banerjee Senior Administrative Officer at ICFAI National College, Asansol. & Lecturer at IIAM, Durgapur. Article posted on March 21, 2009

WHAT IS INNOVATION?  Innovation may be defined as exploiting new ideas leading to the creation of a new product, process or service.  Another way of putting this is that an innovation lowers the costs and/or increases the benefits of a task. A wildly successful innovation increases the benefits-to-costs ratio

MARKETING INNOVATIONS “A marketing innovation is the implementation of a new marketing method involving significant changes in product design or Packaging, product placement, product promotion or pricing.” Innovative marketing of products is about leveraging the marketing mix, namely, the four P’s: Product (Design and Packaging), Price, Place and Promotion in ways that has not been before by the organisation implementing the innovations.

MARKETING INNOVATIONS • FMCGs have come up with creams and soaps @ Rs 5, hair oil and shampoo sachets @ Re 1 and small Coke @ Rs 5. To develop a product to suit the rural scenario, • Companies came up with special rural products, like Chic Shampoo sachets @ Re 1, Parle-G Tikki Packs @ Rs 2, customised TVs by LG, Shanti Amla oil by Marico. All these brought positive results for them.

CHALLENGES IN RURAL MARKETING Low literacy rate Resistance to change Seasonal demand Lack of infrastructure facilities & proper warehousing facility  Threat of spurious products.  Communication problems.  Problems related to distribution and channel management.    

Rural Marketing Mix • Rural Marketing Mix refers to the set of actions, tactics, tools or variables that a company uses to promote and sell its brand or product in a Rural markets

The 4Ps of Rural Marketing PRODUCT: • Small unit size and low priced.  New product designs- sturdy products  Brand name.  Avoid sophisticated packing – Refill packs, Reusable packaging Factors to be considered while designing the product:  Specific requirements of Rural consumers.  Habits of usage and purchase  Income levels  Customs, beliefs and taboos.

The 4Ps of Rural Marketing PRICE: 1. Low priced products 2. Application of value engineering (milk-soya protein) 3. Small sized utility packs

The 4Ps of Rural Marketing • PLACE: • Segmentation • Coverage of villages with 2,000 and above population • Distribution up to flea markets/ Mandi/shanties/ Melas. • Direct Contact with rural Retail

The 4Ps of Rural Marketing PROMOTION:

• Television • Radio • Haats, Melas, Fairs. • Print media • Cinema • Hoarding/ Wall Painting • Rural van

Examples of Innovations in Rural Marketing Mix • ICICI BANK customized their rural ATMs, so they can operate biometric authentication. ICICI rural ATMS are battery operated so that power failure is not issue.

Examples of Innovations in Rural Marketing Mix • Nokia develop affordable Mobile phones for rural markets with unique features such as local language capabilities, present time/ call limits. • Philip develop a TV ‘ Vardaan’ for rural markets. This TV work on the voltage 90-270 volts. • Philips developed ‘ Free Power radio’ this radio do not require power and battery also. it run on simple winding of level provided in the set. The price of this attractive set is Rs. 995.

Examples of Innovations in Rural Marketing Mix - ITC e-choupal

EXAMPLES • HUL’s Shakti:

Learning experience  Companies are finding Rural Markets increasingly attractive.  Rural population is gradually getting urbanized and has a great potential and improving purchasing power.  The 4 As- Acceptability, Affordability, Availability, Awareness has to be effectively adopted in order To capture the untapped potential of the rural consumers.  With the initiation of various rural development programs there have been an upsurge of employment opportunities for the rural poor.

Learning experience  Rural markets are delicately powerful. Certain adaptations are required to cater to the rural masses; they have unique expectation and warrant changes in all four parameters of product, price, promotion and distribution.  Continuous customization seems a sure shot approach to provide both short and long-term returns in the rural markets.

CONCLUSION • The rural market in India is vast and scattered and offers a plethora of opportunities in comparison to the urban sector. • Improvement in infrastructure and reach promise a bright future for those intending to go rural. • Rural market is not exploited Completely and is yet to be explored.

THANK YOU