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Chapter 11

Rural Consumer India

A Market in Transition Ready to be Shaped


70% of India's Population
Indian
Rural
Market

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


agriculture

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
treatment

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
India

But population is 3 times more the urban


India

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
Ahmedabad
to
educate,
diagnose and treat people for
tuberculosis.

Healthcare >> Pharma

Knee implant
Reusable stapler for use in
surgeries

Both are available at price points


affordable in the domestic
market

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

FMCG

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.

FMCG

Project Shakti
by Hindustan Unilever Ltd.

FMCG

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
market
A consumer base which expects high functionality at low cost
All elements required to support a business is are not equally
developed

Successful strategy for Indian market

Strategy should not be the worlds best marketing strategy

Strategy must be specifically made for India strategy

Examples

Success of Honda Amez

Success of Xiaomi

Success of Nokia

Success of OLX.in

Failure of Kellogs

Failure of Vanilla Coke