rural marketing 920

8/4/2019 Rural Marketing 920

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INDIAN RETAIL INDUSTRY

ANDRURAL RETAILING :

BY :

GAURAV 10

NITHIN 15


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Retailing

Retailing is the transaction between the seller andconsumer for personal consumption .It does not includetransaction between the manufacturer, corporatepurchase, government purchase and other wholesale

purchase. A retailer stocks the goods from themanufacturer and then sells the same to the end user fora marginal profit. In the supply chain that also consistsof manufacturing and distribution, retailing is the lastlink before the product reaches the consumer.


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Retail Sector in India

Post liberalization the Retail sector in India isheralded as one of the sunrise industries. Ithas never been better for the retail sector in

India. Today within the booming service sector,retailing is the single biggest contributor interms of GDP to the National Income. Retailingitself can be further divided into organized andunorganized sector.


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ORGANISED RETAIL SECTOR UNORGANIZED RETAIL SECTOR


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ORGANISED VS UNORGANISEDFACTOR ORGANIZED UNORGANIZED

DEFINITION MODERN RETAILING TRADITIONAL FORM OFRETAILING

EXAMPLES HYPERMARKET, RETAILCHAIN ETC

MOM N POP STORES,HSND CART, PVT ETC

MARKET SHARE 14% 85%

MARKET GROWTH 42% 10%

CHALLENGES POOR SUPPLY CHAINMANAGEMENT,AGGRESSIVEEXPANSION ETC

USE OF LABOURINTENSIVE TECH, LACKOF GOV SUPPORT ETC


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RURAL AREA

Census of India defines Rural Settlements as......

Population lower than 5,000 persons

Population density lower than 400 persons/sq. km

At least 75% of male population engaged in Agri. activities.


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IMPORTANCE OF RURALAREAS

. Urban markets are becoming increasingly

complex, competitive and saturated.

. Large size of rural markets

742 million people (73 % of the population)

200 million households (70% of total

households)


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Rural India consists of 720 Million consumers across

6,38,000 villages

---17% of these villages account for50% of the ruralpopulation and 60% of the rural wealth

----Extensive reach is required as to cover 50% market

1,00,000 villages must be catered Immense opportunity

amounting to US$ 125billion


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DATA


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Rural Retail is growing @ 7% p.a.

Rural consumption is also shifting from basic food grains to

fruits, vegetables, dairy and poultry products, as well as

beverages

Demand for better quality food leading to huge demand for

basic foods


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THE INDIAN RURAL MARKET

The Rs 140,000 crore rural retailmarket is expected to cross Rs

180,000 crore mark by 2010, And upto Rs 240, 000 crore by 2015 (CII).


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PRODUCT

AUDIO SYSTEMMOTOR CYCLES

REFRIGERATERS

TELEPHONES

TELEVISION

WASHING MpACHINE

YEAR09 .10

3512

10

46

34

4

Product penetration in terms of % ofrural households


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Income distribution (Million population)

288

130

41

90

153

312

0

100

200

300

400

Low Low er middle Middle high

Rural Urban

2001-02

305

17

79

272

170

352

0

100

200

300

400

Low Low er middle Middle high

Rural Urban

2010-112004-05


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Urban Rural

Food 51.5 63.7

Consumer goods 19.6 13.1

Fuel, clothing & foot we 13.9 14.8

Medical 5.5 5.5

Education 5.1 2.5

Rent & taxes 4.5 0.4

Distribution of Monthly Per Capita expenditure

Source: Household Consumer Expenditure

Survey, JanuaryJune 2004


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CATEGORYCategory

Penetration

Brand with

highest

penetration

Toilet Soap

Washing cakes/BarsTea

Washing powder / liquid

Salt

Biscuits

91%

88%77%

70%

64%

61%

Lifebuoy

WheelLipton Taaza

Nirma

Tata Salt

Parle G


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CONTRIBUTING FACTORS

1. Agriculture revolution

Consistent good monsoons

Better procurement prices fixed for various crops.

Better yields due to many research programs (HYV

seeds provided by the government)


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2. New improved tax structures

3. Spread of education

4. Improved infrastructure

5. Better banking facilities

(financial assistance given by NABARD)

6. Government schemes like IRDP,JRY.

7. Increased expenditure in plan outlay (from 14000

cr.in 7th plan to 30,000 cr.in 8 th plan.


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8. Increased penetration of electronic media


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9. Life style changes

50 % of todays rural income is not

coming from the agriculture sector.

Up gradation from local brands to branded ones and from low

priced bands to premium ones.

Increasing influence of the youth in the buying decisions.


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HURDLES IN RURAL RETAILING

1. High distribution costs

2. Low per capita disposable income that is half the

urban disposable income.

3. Large no. of daily wage earners

4. Acute dependence on the vagaries of the monsoons

5. Seasonal consumption linked to harvest and festivals


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6. Inaccessibility to conventional advertising media

7. Poor roads,power problems

8. Banking and credit problems

9. High initial market development expenditure

10.Wholesaler and dealer network problems


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11. Highly dispersed and thinly populated markets

12. Social and cultural backwardness of the rural

masses.

13. Low level of exposure to different product

categories and product brands.

14. Cultural gap between urban based marketers and

rural consumers.


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THE RURAL CONSUMERS

Is a value seeker

Seeks comforts and amenities

Does not wish to be seen as thedeprived cousin.

Does not experiment easily but

this does not mean that he would not change.

Values local relationships becauseof unfavourable past experiences


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STRATEGIES FOR RURAL MARKETING


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1. Being first on the shelf

It is very important because the brands rarely fight with

each other as the retailers generally stock a single brand

in a product category.


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2. Different means of advertising

A. Haats and melas

A survey by MART (marketing and research

team revealed that 47000 haats and 25000melas take place every year in India.

B. Performance arts including theatres,songs,dancepuppetry, magic shows etc.


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Advantages

1. Large visitor turnaround.

2. These melas are held during post harvest season,

when the purchasing power of the people is more.

The companies provide touch and feel demonstrations and

distributed free samples.


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CAVIN CARE

This company first come out with the concept of sachets and

it revolutionize the whole market, making the Chic

shampoo the 2nd largest selling shampoo in India

What followed was the flood of products in small packing

ranging from toothpaste,facecreams,soaps,hairoil etc.


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NIRMA

This company introduced the innovative technique ofusing video vans for marketing Nirma products .

Advantages1. Reach to interior parts

2. Offer opportunity for personal interaction .

Similar strategies helped Ghadi to become the 3rdlargest selling detergent.


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L.G

The top brass closed down on 2 points

1. The company figured that it needed new cheaper products tolure the rural buyers .

The company did this by introducing a cheaper range ofTV's by the name of Sampoorna.

2. More offices in small town was the need of the hour.The company went on in a office opening spree andcurrently it has 178 branch offices.


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COCA-COLA

1. Increase in number of outlets from 80,000 in 2001 to

190,000 in 2005 resulting in increased market penetration

from 13 % to 28 %.


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2. It also tapped the local form of entertainment like

annual haats and fairs and made huge investment in

infrastructure for distribution and marketing.


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3. It brought down the average price of its products

from rs.10 to rs.5,therby bridging the gap between

soft drinks and other local options like tea,

buttermilk or lemon water.

4. It doubled the spend on doordarshan


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5. It concentrated its entire advertising

towards the rural customer.

As a result the rural market accounts for 80 % of the

new coke drinkers and 30% of its total volumes.


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I.T.C e.CHAUPALThe companys e-chaupal initiative is a novel idea which

bypasses the brokers between the Company and the

farmers.


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It is helping Indian agriculture to enhance its

competitiveness by empowering Indian farmers

through the power of internet .

This unique transformational strategy has

become the subject matter of a case study at

Harvard b school ,has created for I.T.C a huge

rural distribution infrastructure ,significantly

enhancing the companys marketing reach.


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Formed in 1946,it is a brand name managed by

an apex cooperative organization ,Gujarat co-

operative milk marketing federation limited

which today is jointly owned by some 2.41million milk producers in Gujarat.

It has been a sterling example of right mix of

rural marketing and has established itself as auniquely appropriate model for rural

development.


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Amul has spurred the white revolution inIndia and it is today the worlds biggest cheese

brand.


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parle g.mpeg


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ONIDA

The company introduced its igo range of t.vs

priced cheaply at rs.5000 for 14 inches particularly to

cater to the backward states like Bihar, Rajasthan andUttar Pradesh.


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CONCLUSION

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.


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rural marketing 920

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