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APPROPRIATE COMBINATION OF FOUR

MARKETING VARIABLES (4 Ps)

‡ VARIABLES ARE INTERDEPENDENT

‡ FLEXIBLE AND DYNAMIC CONCEPT

‡ CUSTOMER ORIENTED ACTIVITY

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‡ Product
‡ Pricing
‡ Place (distribution)
‡ Promotion
‡ Pace
‡ Packaging
‡ Positioning
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‡ AFFORDABILITY
‡ AVAILABILITY
‡ AWARENESS
‡ ACCEPTABILITY
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‡ 
‡ 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
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‡ 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.
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‡ 
‡ To ensure that the product reaches the retailers
shelf
‡ 
‡ Rural specific promotion media and methods
‡  
‡ 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
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‡ !"#$
% has said ³ 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.
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‡ &, 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.
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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,
$ manufacturing capacity,
promotion through local news papers, wall
paintings and distribution might.
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‡ 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.
 Y
%!


‡ 
%'Y
%!
‡ Bullet/ Rajdoot motor cycles,
ambassador cars, HMT mechanical
watches
‡ %Y
%!
‡ LG Electronics-Sampoorna brand TV,
Philips 14´ TV
 Y
%!

‡ m Y !
‡ 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
 Y
%!


‡ 'Y
%!(
‡ Free power radio by Philips, HMT
mechanical watches

‡ )
%
‡ Billiwali cell, Ladkawala paint, Peedhari
balm, Nirma, Tata shakti, Rishi
chavanprash, Parle biscuits
 Y
!

‡ *Y
!
‡ 5 Kg gas cylinder-deposit Rs350-refill cost
Rs90
‡ 14 Kg gas cylinder-deposit Rs700-refill
cost Rs 250
‡ 
Y
%!
‡ Nokia - focus on basic models
‡ LG- 100 channels and 200 watts output
 Y
!


‡ + 

‡ Example: Nirma
‡ Pedestrian pack, affordable price,
medium quality, availability at village
shop, promotion through wall
painting and famous jingle on
doordarshan
 Y
!

!
% !
‡ Motivates retailers to stock the products
‡ Risk/benefit to be assessed
‡ Creditworthiness of dealers/distributors?
Y
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‡ Off season, bulk purchases, timely
payment, cash discount, annual
purchases


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‡ 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


%
)

!
%
)
‡ Inadequate banking facilities
‡ Only 70% of the markets are
connected by road
‡ Roads get flooded during rainy
season
‡ Poor transportation facilities


%
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‡ 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%


%
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!,
!
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‡ 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


%
)



 

‡ 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


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)



 

‡ 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


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)
‡ m&&-&#
‡ Farmers markets, Bata shops, Textile
show rooms
‡ m&&--&#
‡ Tractors, Two wheelers
‡ m&&-&-
-&#
‡ Regional brands of Tea, coffee, edible oil,
biscuits


%
)
‡ m&&- .!/ 0-
-&#
‡ Asian paints, LG
‡ m&&-% .!/ 0-
&- -&#
‡ Agro companies like Bayer, Syngenta
‡ m&&-% .!/ 0-
&- 1- -
&#
Britannia, Eveready, HUL, Colgate
 %
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‡ 2,3
‡ 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
 %
)m%

‡ Y4"1 (HUL) to cover villages

having less than 2000 population-25000
shakti entrepreneurs

‡ ,&/ 1 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.
 %
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‡ Y&2,Y3
‡ 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
 %
)m%
‡ )&# 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
 %
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&

‡ 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


%
)
‡ %+Ym 
 

‡ 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


%
)
‡ %
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 Y & 
 23
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 5161
purchased from class 2/3
towns


%
)
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) !
‡ Use of delivery van
‡ Mobile traders (pheriwaalas)
‡ Bullock carts/camels/boats
‡ Syndicate van distribution
‡ Haats
‡ Melas
 
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‡ Push strategy
‡ Sale of spurious products
(duplicates, look alikes and spell
alikes)
‡ Limited choice of products/brands
‡ Retail price ( MRP/above MRP)
 
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YY

‡ 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
 
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‡ !2!"& 03
‡ 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
 
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‡ !2!"& 03
‡ 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
 
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%
5 %,

‡ 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
 
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‡ 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
 
 %
 
 by Tata
Chemicals
‡ Solutions to field problems from
sowing to harvesting and supply of
agricultural inputs under franchise
arrangement
‡ m""&", one stop shop
to meet farming requirments and
consultancy services
 
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0 launched by Govt with
the support of NABARD to provide
farm consultancy services and supply
of inputs. About 3000 clinics run by
qualified agronomists.
 
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‡ 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
 
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‡ Co-operative rural retailing store
near Ahmednagar
‡ Serves 70 surrounding villages
‡ Total retail space 5000 sq feet
 
 %
 
78$999 &
‡ 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
 
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‡ 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