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Chapter 11

Rural Consumer India

A Market in Transition Ready to be Shaped

70% of India's Population

56% of India's income

33% of India's savings

Here income is growing significantly

Pre capita growth rate is same as urban.
But population is 3 times more than urban

Ready to be shaped but why so few takers?

Vastly under deserved

Most of the businessman

has incorrect perception
about rural market which
reduces interest
56% of India's income
33% of India's savings
Here income is growing significantly
Pre capita growth rate is same as urban.
But population is 3 times more than urban

Ready to be shaped but why so few takers?

Rural market is vastly underserved
Businessman often looses interest because of lack
of infrastructure
But with innovation, they can have sustainable
business in rural area

Innovation in Rural Business

Rasoi Ghar Community Kitchen

Innovation in Rural Business

Microfinance of Bandhan

The changing structure of rural economy : Beyond


Only one fourth of the rural GDP

is now coming from agriculture

Per capita income has also grown at the same rate like
urban between 1993-94 to 2000-2001
Demand for goods, education, service has also
increased in rural area
Top quartile of rural India has higher expenditure than
the average

There is a considerable pent up demand for goods and

services like education, communication and medical

Comparison of size and purchasing power of rural vs

urban consumer India
Per capita income is half than that of urban
But population is 3 times more the urban

But population is 3 times more the urban


Example of some rural marketing strategies

Introduced Rs 10, Rs 5 recharge facility

Introduced Rs 5 bottle

Surf and Shampoo brands also are selling

their products in sachet

Craft food is selling Oreo in Rs. 5

Kellogs is selling mini pack in Indian market

Spending pattern of Rural India

Rural India wants life improving products and services

Bajaj Boxer is specially for rural market

Nokia low cost mobiles were introduced for penetrating

in the rural market.

Segmentation scheme for rural India

Affluence segments, Demand segment

Scattered oasis of affluence

Developing and developed states

LG has a very high rural distribution network and generated 35

percent of the companys India revenues from rural sales

Hero has a very high rural distribution network and generates

over 40 percent of sales from rural areas.

HUL has faster growth in rural market than urban market

Revenue from rural market is more than 40% of total revenue

Recession free Rural market

Not effected by any direct shock transmitted by global economy

This market was not even effected in 2008 recession

Chapter 12
Understanding the Bottom of the Pyramid
Consumer India

Overview of Bottom of Pyramid

While companies are witnessing competitive clutter, there is an invisible
market which is yet largely untapped.
This market, precisely known as the bottom of pyramid (BoP) market,
comprises the population living below the poverty line as well as the lower
income segment in the country.

About 33% of the Indias population forms the base of pyramid i.e. around
400 mn people earn below $1.1 (Rs. 66) per day.

Why bother about the Bottom of the

Pyramid consumer India?
Larger Value

A dollar per day is a reasonable

income in India
Sensible investment for the future
Guaranteed income growth
Favorable change in social attitude

Leveraging Opportunities among BoP Consumers

Healthcare >> Pharma

Arogya Parivaris Novartis initiative,
wherein it markets a portfolio of
drugs for common ailments.
Women and childrens nutrition is
sold in smaller packs, in line with
rural affordability.
Novartis also organizes camps to
increase healthcare awareness.

Healthcare >> Pharma

Pfizer runs project Sanjeevani so

that it can reach out to Tier II and
below areas.
The project is mainly for its mature
portfolio, thereby extending the
product life cycle of these well
known brands.

Healthcare >> Pharma

Set up mobile clinics all over Goa

to diagnose people with diabetes.

Healthcare >> Pharma

Has a tie up with Self Employed

Womens Association (SEWA) in
diagnose and treat people for

Healthcare >> Pharma

Knee implant
Reusable stapler for use in

Both are available at price points

affordable in the domestic

Healthcare >> Pharma

Approach -'In India, for India;

launch of low-cost products

ECG machine
Ultrasound machine

Healthcare >> Pharma

Screening device iCCnet for cardiovascular disease -suitable for use in

rural settings


Nestle introduced smaller packs of their

products Maggi Noodles and Ketchups.
This is helping them to increase the
penetration of their products.
They have innovated and created a taste
enhancer with added iron and vitamins,
specifically for the BoP audience.
This allows them to not only improve the
taste of everyday dishes, but also
enhance the nutritive value of the food.


Project Shakti
by Hindustan Unilever Ltd.


ITC e-Choupal
Over 35000 villages linked through around 6100 e-Choupals
servicing around 4 million farmers

Chapter 13

Winning in the Indian Market

Indian Market
Fundamentally Different demand structure from that of the developed
A consumer base which expects high functionality at low cost
All elements required to support a business is are not equally

Successful strategy for Indian market

Strategy should not be the worlds best marketing strategy

Strategy must be specifically made for India strategy


Success of Honda Amez

Success of Xiaomi

Success of Nokia

Success of OLX.in

Failure of Kellogs

Failure of Vanilla Coke