marketing mix

MARKETING MIXMARKETING MIX

APPROPRIATE COMBINATION OF FOUR MARKETING VARIABLES (4 Ps)

• VARIABLES ARE INTERDEPENDENT

• FLEXIBLE AND DYNAMIC CONCEPT

• CUSTOMER ORIENTED ACTIVITY


• Product • Pricing • Place (distribution) • Promotion• Pace• Packaging• Positioning


4 As OF RURAL MARKETING MIX

• AFFORDABILITY • AVAILABILITY• AWARENESS• ACCEPTABILITY


4 AS OF RURAL MARKETING MIX• Affordability• Does not mean cheap products• Designing products which match the

needs of rural consumer and within his buying capacity

• Example: Nirma detergent powder, Chik shampoo, Chinni pickle

MARKETING MIXMARKETING MIX• A product will be successful if it delivers

value and satisfaction. Value is the ratio between what the customer gets and what he gives.

• Satisfaction is a function of perceived performance and expectations. If the performance falls short of expectations, the customer is dissatisfied, if the performance matches expectations, he is satisfied, if the performance exceeds expectations, the customer is delighted.

MARKETING MIXMARKETING MIX 4 AS OF RURAL MARKETING MIX• Availability• To ensure that the product reaches the retailers

shelf• Awareness• Rural specific promotion media and methods• Acceptability• The product should serve its purpose and offer

solutions to their problems• Examples: Sturdy two wheelers to carry fertiliser

bag, milk can, cement, cattle feed, Wrist watches that can be easily repaired, Brass torch light, Basic models of mobile phones etc

MARKETING MIXMARKETING MIX• Chairman, IRDA has said “ Future growth of

the insurance industry lies in designing products that address the needs and aspirations of the people living in rural areas. The penetration of insurance portfolios will not grow unless products make sense to the people in rural areas.

• Rural population would benefit from a single product that could takes care of all their requirements. The combination of life and non-life features has become important.

MARKETING MIXMARKETING MIX• Eveready Industries, India’s largest

battery maker has introduced LED (Light emitting diode) under the brand name Nu Lite as a substitute to kerosene lanterns in power deficient states like Uttar Pradesh, Bihar, West Bengal and Assam.

• At two-three hours use per day, the LED lanterns cost 50 paise per hour, marginally lower than kerosene lanterns. Introduced in April 2009, the company sells at an average 3,50,000 units per month.

MARKETING MIXMARKETING MIX The LED lanterns are priced between Rs

150 and Rs 450 and two sets of batteries are given free along with the lanterns. The factors that have contributed to the success of Nu Lite are

Understanding the problems faced by villagers in electricity deficit states, affordability, manufacturing capacity, promotion through local news papers, wall paintings and distribution might.


• Rural market is not the rich man’s market for classy products.

• However, there is a small percentage of rich people, growing in numbers and also getting richer ( sales of Honda City, Denim, Pantene)

• Rural demand is about lot of people consuming a little and not about a small number consuming a lot.

PRODUCT STRATEGIESPRODUCT STRATEGIES

• STURDY PRODUCTS • Bullet/ Rajdoot motor cycles,

ambassador cars, HMT mechanical watches

• DESIGNING PRODUCTS• LG Electronics-Sampoorna brand TV,

Philips 14” TV


• SMALL UNIT PACKING

• Examples: Shampoos, biscuits, soaps, tooth paste etc

• Cavin Kare studied the rural consumer behaviour and came out with Chik shampoo priced at paise fifty and it created a revolution in the packaging/shampoo industry


• UTILITY PRODUCTS:• Free power radio by Philips, HMT

mechanical watches

• BRANDING• Billiwali cell, Ladkawala paint, Peedhari

balm, Nirma, Tata shakti, Rishi chavanprash, Parle biscuits

PRICING STRATEGIESPRICING STRATEGIES

• LOW PRICE• 5 Kg gas cylinder-deposit Rs350-refill cost

Rs90• 14 Kg gas cylinder-deposit Rs700-refill

cost Rs 250• NO FRILLS PRODUCTS• Nokia - focus on basic models • LG- 100 channels and 200 watts output


• VALUE ENGINEERING • Example: Nirma • Pedestrian pack, affordable price,

medium quality, availability at village shop, promotion through wall painting and famous jingle on doordarshan


CREDIT FACILITIES• Motivates retailers to stock the products• Risk/benefit to be assessed• Creditworthiness of dealers/distributors?

PROMOTIONAL SCHEMES• Off season, bulk purchases, timely

payment, cash discount, annual purchases

RURAL DISTRIBUTIONRURAL DISTRIBUTION Even if a company has a good product

that meets the requirements of rural consumers, it will succeed only if it is made available as and when required by the consumer.

Out of about 6 million retail outlets,

3 million outlets are in rural areas scattered in about 6 lakh villages. Making the products available in these outlets is a challenging job indeed

RURAL DISTRIBUTIONRURAL DISTRIBUTIONCONTRAINTS IN DISTRIBUTION• A large number of intermediaries• Non-availability of retailers: Practically no

shops in two lakh villages with less than 500 population

• There are about 2.7 lakh Villages with 500-2000 population and distribution cost is high to reach these villages

• Companies are concentrating in about one lakh villages having >2000 population

RURAL DISTRIBUTIONRURAL DISTRIBUTION

CONTRAINTS IN DISTRIBUTION• Inadequate banking facilities• Only 70% of the markets are

connected by road• Roads get flooded during rainy

season • Poor transportation facilities


CHANNEL MEMBERS• C&F Agents at state headquarters, big

towns: commission payable: 3-5%• Distributors at district headquarters:

commission payable 3-5% • Wholesalers at taluka/agri centres: 3-5%• Retailers in villages/ feeder markets:

about 10%


CHARACTERISTICS OF RURAL RETAILER

• Deals in a variety of goods• Sells local, regional and national

brands, depending upon the profile of the consumer

• Makes weekly/fortnightly visits to wholesalers in the town

• Provides information about new products to villagers


RURAL RETAILER• Extends credit facilities• Can switch brands • Sells at MRP/above MRP• Displays the products which he

wants to push• May not pass on free gifts/samples

etc to consumers

RURAL DISTRIBUTIONRURAL DISTRIBUTION RURAL RETAILER • Some retailers sell expired/ spurious

products• Three categories of spurious

products i.e. Look-alikes, spell alikes and duplicates

• Example: Lucky boy, Teta salt, Pure and lovely etc


CHANNELS OF DISTRIBUTION• Manufacturer-consumer• Farmers markets, Bata shops, Textile show

rooms• Manufacturer-retailer-consumer• Tractors, Two wheelers• Manufacturer-distributor -

retailer-consumer• Regional brands of Tea, coffee, edible oil,

biscuits


• Manufacturer-depot/C&F agent -dealer-consumer

• Asian paints, LG

• Manufacturer-Depot/C&F agent- distributor- retailer-consumer

• Agro companies like Bayer, Syngenta

• Manufacturer-Depot/C&F agent- distributor- stockist- retailer-consumer

Britannia, Eveready, HUL, Colgate

DISTRIBUTION MODELSDISTRIBUTION MODELS

• Star Sellers (HUL) • 1-2 Rural distributors in each district• 25-30 wholesalers (Star Sellers) under

each distributor• Star seller covers 60-100 retail outlets• Also supplies to Shakti entrepreneurs who

in turn cover villages having less than 2000 population


• Project Shakti (HUL) to cover villages having less than 2000 population-25000 shakti entrepreneurs

• Hub & Spokes method by Coca Cola: From bottling plan, stocks are supplied to main distributors (Hubs) in key markets. Main distributors supply to sub-distributors (Spokes), then to retailers and consumers.


• LPG distribution (HP)• Distributors have opened extension

counters in key villages and rural consumers take delivery of the cylinders from extension counters

• LPG cylinders in HP fuels stations in highways and agri centres.

• Operates filling vans in haats and large villages for refilling empty cylinders with LPG


• Bicyle distribution model developed by MART, Delhi provides business opportunity for rural youth.

• Provides adequate training, SP materials, cycle, inbuilt storage box, colour umbrella, T-shirt, cap and public address system

• The promoter buys FMCGs from stockists and sells in interior villages

• Example: Exide, Colgate, HUL


Satellite distribution

• Appointment of rural stockists in taluka/agri centres

• Credit facilities and extra commission• Stockists supplies to village retailers• A number retailers hover around a

particular stockist

RURAL DISTRIBUTIONRURAL DISTRIBUTION• DEVELOPMENT OF RETAILERS

• Co-operative societies- 3 lakhs societies• Public distribution system- ration shops-

3.80 lakhs shops• Fertiliser dealers- 2 lakhs dealers• Postal department ( 1.40 lakhs) for

financial products• Appointment of dealers in Feeder Markets


• FEEDER MARKETS

Town class Population towns (nos)

1 1 lakh and above 423

11 50,000 to 99,000 498

111 20,000 t0 49,000 1386

1V 10,000 to 19,000 1560

V 5000 to 9900 1057

VI Less than 5000 237

90% of the durable are purchased from class 2/3 towns

5161

RURAL DISTRIBUTIONRURAL DISTRIBUTION• PHYSICAL DISTRIBUTION OF STOCKS

• Use of delivery van• Mobile traders (pheriwaalas)• Bullock carts/camels/boats• Syndicate van distribution• Haats• Melas

ORGANISED RETAILINGORGANISED RETAILING ORGANISED RETAILING SCENE IN INDIA• Government of India’s Public distribution system • Consumer co-operatives and co-operative

supermarkets• One stop stores of Spencer & Co in Plantation

areas in South• Bata show rooms in prosperous rural markets• Civil supplies department’s Maveli stores in

Kerala• Kamadhenu market in Chennai• Nilgiris in South

ORGANISED RETAILINGORGANISED RETAILING

Limitations of current distribution channels

• Push strategy• Sale of spurious products (duplicates,

look alikes and spell alikes)• Limited choice of products/brands• Retail price ( MRP/above MRP)

ORGANISED RETAILINGORGANISED RETAILINGOPPORTUNITIES• Increase in rural income and rising aspirations of

rural population • Rural people wants to replicate the life style of

urban population• Urban experience while shopping• Quality products instead of spurious products• Competitive pricing• Touch and feel experience• Outing for rural consumer and children• One stop shop for consumer goods, durables,

inputs and financial services


EXAMPLES

• ITC( Choupal Sagar)• First organised rural retail outlet in India

by a Corporate• Situated in Rafic ganj and 4 km from

sehore town• Eight acres of land, shopping area 7000 sq

feet


EXAMPLES

• ITC( Choupal Sagar)• Parking space for 100 tractors/jeeps• A wide range of products• Set up at a cost of about Rs 4 crores• Procurement centre for Soya in the

same compound


GODREJ AADHAR • Super markets in potential rural markets • Deals in consumer goods, house hold appliances, agri inputs• Soil analysis, veterinary and crop husbandry services• 18 outlets in Maharastra and Andhra

Pradesh• Recently Future Group has taken a major

share in Godrej Aadhar retailing


SHRIRAMS HARIYALI KISAN BAZAAR• 13 outlets in Northern states• All farm needs- inputs, loan facilities,

insurance, contract farming , technical service by qualified agronomists. Plans for procurement and distribution of milk

• The ambience is modern, the approach is farmer friendly

ORGANISED RETAILINGORGANISED RETAILING Tata Kisan Sansar by Tata

Chemicals• Solutions to field problems from

sowing to harvesting and supply of agricultural inputs under franchise arrangement

• Mahindra Shublabh, one stop shop to meet farming requirments and consultancy services


Agriclinics launched by Govt with the support of NABARD to provide farm consultancy services and supply of inputs. About 3000 clinics run by qualified agronomists.

ORGANISED RETAILINGORGANISED RETAILING WARNA BAZAAR• Two Super stores in Kolhapur and

Sangli in Maharastra• Area: 10,000 sq feet • 30 Village level stores of 500-1000

sq feet • Sells consumer goods, durables, agri

inputs, hardware, grocery items, apparel items

ORGANISED RETAILINGORGANISED RETAILING KASTI SOCIETY• Co-operative rural retailing store

near Ahmednagar• Serves 70 surrounding villages• Total retail space 5000 sq feet


Over 32,000 petrol outs• Many are located in high way

crossings• Enough footfalls and sales• Ideal locations for ATM, food joints,

music stores, automobile parts and even agri inputs and Impulse purchases


• Most domestic majors are moving to cities like Kanpur, Surat, Indore, Varanasi, Coimbatore, Madurai, Bhopal, Vijayawada

• Low real estate cost combined with the hype of branded living will make break even easier for retailers in these cities

marketing mix

Documents

marketing mix rural

rural population

rural areas

marketing variables

marketing mix chairman

needs of rural consumer

rural consumer behaviour

products available