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Session – 1
Environment
1
Income distribution (Million population)
Impressive growth in purchasing power
400
312 12000
300
288
2001-02 9665
10000
79 Urban Rural
100
17
0
Annual growth (%)
Low Low er middle Middle high Urban 2.4 3.2
Rural Urban
Rural 3.4 4.5
Rural Economy
• Share of rural income to national income is declining
1995-96
2004-05
62%
60%
Rural India
40
• Low purchasing power (2001-02)
30 Monthly PCI (Rs.)
Rural Urban
20 Cultivator 805 1,467
Wage earner 522 636
Salary/Professionals 1,540 1,876
10
Business 1,112 1,637
2
Understand &
Feel Press Availability
250
50 DD1/2
MTV 55 & NGC Any Media 60.7 86.4 51
Sun TV
DD Reg DD (Info)
Cable
0
CNN 5
13 …that’
that’s 425 mn people, or Japan, France,UK and
1990 1991 1993 1995 1999 2002 2004 Germany put together !
Source : Broadcasting Corporation of India & Industry estimates
Little Use
Of electricity
3
The Change… Distribution of Monthly Per Capita expenditure
160 700
600
120 500
400
80
300
40 200
100
0 0
AC VCP VC Car Mo pe d M o to rcycle SM S co o ter WM F ridge MG TB (C ) TV (B ) Ele c tric Tra ns is to r B ic yc le PC
Iro n
4
Product penetration - Case III
(Ownership per thousand households) Rural share in total stock
Products Total Stock Rural Share
(Million) (%)
2000 Air Conditioner
Family Car 11 6.8
Vaccum Cleaner
1500 VCP & VCR
Washing Machine 42 18.0
Refrigerator
1000 Mixer Grinder
Scooter
Color Television
189 37.2
500 Electric Iron
Moped
Pressure Cooker
0 Motorcycle
Fan
239 52.7
Fan Wrist Watch Sew ing Machine
Television (B&W)
Wrist w atch
Rural Urban Transistor 503 67.9
Bicycle
All Products (19) 984 55.5
2001-02
Households Share in stock Average
(%) (19 products) number of 19%
31%
goods per
households 8%
Urban
Low 4.1 3.9 5.0
Lower midlle 9.0 11.8 6.8
Middle high 15.3 28.8 9.8
28.4 44.4 8.2 42%
Rural
Low 30.6 14.2 2.4
Income Infrastructure Interaction Lifestyle
Lower midlle 28.3 22.4 4.1
Middle high 12.7 19.0 7.8
71.6 55.6 4.1
Factors affecting change in market size Factors affecting change in market size
(between 1995-96 and 2001-02) (between 1995-96 and 2001-02)
42%
34% 17%
15%
46%
6%
21% 46%
5
Factors affecting change in market size
(between 1995-96 and 2001-02)
Traders,Small Farmers
z “Rural customer” to be entirely
Marginal Farmers
different from the “Urban Customer”.
z “Rural customer” to be one Laborers, Artisans
16 languages
homogenous set of customers.
z “Rural preferences” to be stationary in time. State wise variations in rural demographics
z “Rural customer” wants everything cheap. Literacy (Kerala 90%, Bihar 44%)
z Rural folk are hard-working “son Population below poverty line (Orissa 48%, Punjab 6%)
of the soils” who do not need conveniences.
z Rural customers are widely dispersed
across Village level haats.
6
MYTH 2: Disposable Income Is Low MYTH 3: Individuals Decide About Purchases
REALITY REALITY
Number of middle class HHs (annual income Rs 45,000-
2,15,000)
Rural 27.4 million Decision making process is collective
Urban 29.5 million
Per Capita Annual Income
Purchase process- influencer, decider, buyer, one who
Rural Rs 9,481
pays can all be different. So marketers must address
Urban Rs 19,407
brand message at several levels
Total Rs 12,128 Source: NCAER,2002
Rural incomes CAGR was 10.95% compared to 10.74%
in urban between 1970-71 and 1993-94 Rural youth brings brand knowledge to HH
Source:ETIG,2002-03
In 50 years only 40% villages connected by road, in next 70% of R1,R2, R3 can be reached through
10 years another 30%. mass media. 70
53
More than 90 % villages electrified, though only 44% rural
homes have electric connections. 41
26
21
Rural telephone density has gone up by 300% in the last 14
10 years, every 1000+ pop is connected by STD.
7
Climbing Social Indicators But Rural India Offers Huge
potential
Between 1981 to 2001
Number of pucca houses doubled from 22% to 41% and kuccha
houses halved (41% to 23%)
21.9 21.4
8
A Day in his life
The Rural Indian .. Male
Up at 5.30 Prepare fodder ..my biggest assets..
Cattle
Plays cards & Hangs out
Religious At Choupal
Supports children
Religious
Guilt about
spending on Secretly seeks to be beautiful
My children's school Girl child helps at home Children help on fields
Self Children
Disturbed by vulgarity
Conservative
Personal acquaintance with Make high-volume z Multiple uses from the same product
neighborhood retailer purchases – Dettol liquid for cuts, gargle for bad throat, washing clothes
-Only Influencer at weekly village as a disinfectant , dandruff etc
- Provides credit markets
– Jet mosquito coil for mosquito repellent and room freshener
9
Drivers for choice .. Therefore …
At Home At Work
10
Touch Points .. Touch Points ..
Communication Medium:
Communicating to the Rural One on One contact
Consumer
z One on One contact Personal Interface
programs are extremely
efficient manner to
reach the Rural
Consumer
z Provides an opportunity
to
– Demonstrate
– Induce Trial
– Educate
Ramayan - UP Ragini - MP
11
Communication Medium Unilever India – Haats
Haats - Presence in the Market
1. TG interaction
3 2 2. Exchange offer
3. Spot sales
sampling
Maha Kumbh
z Clients
– Unilever , Titan, Ministry of Environment, Medimix, GM Pens, Cavin
Care, Anchor, Khaitan, Maruti, Tata Tea
z Achievements Sampling Branding at Prayag Station
– Largest sampling exercise ever done;
z Fair & Lovely sachets distributed to 4.1 million
z 25000 packs worth
z 10560 family photographs taken as incentive
– 4 million people exposed through large screens
– 15.8 million people exposed through branding of “Prayag” railway station
– 17.4 million people exposed through branding of “Naini” railway station
– 18 watches sold per day as against an average sale of 38 watches per Branding at Prayag Station Giant Screen
month by the local dealer
12
Communication Medium: Static Media Other Branding Opportunities
Vicks Buntings
Postal Stationery
LG Wall Paintings
Shopboards
Tinplates
13
Challenges in the Future
Using IT to transform markets
Housing
Housing
66Mn
Mnhouses
houses
DrinkingWater
Water The future lies with those companies who see the
Irrigation
Irrigation Drinking
74,000Habitations
74,000 Habitations poor as their customers.
11Mn
Mnhectares
hectares
CK Prahalad to Indian CEO's, Jan 2000.
RuralIndia
Rural India
Roads Electrification
Electrification
Roads 125,000Villages
125,000 Villages
Villageswith
Villages with1000
1000 i.e.23
23Mn
Mnmore
more
population i.e.
population people
people
Telephones To get rich, sell to the poor.
Telephones
67,000Villages
67,000 Villages Pradeep Kashyap.
14