TATA ACE Rickshawale se motor

maalik
(2005 )

TATA ACE Small is Big

Flexible, comfortable & fuel efficient

Bullock carts & muddy paths gave way to small pick ups
Unemployed youth turned into owner drivers
To reach out potential buyer Tata Motors opened 600 small sales
outlets
Tata has shown product diversification skills
A) original base model mini truck
B) passenger carrier in Magic , a CNG version
C) Ace Ex with fuel efficient start stop technology
D) Super Ace with one tonne payload.
E) Innovation continues with four seater people carrier , Magic Iris

PRODUCT STRATEGY IN RURAL

MARKETS

Marketers have to use two frameworks namely :

The 4 Ps & 4 As (acceptability, affordability ,
availability , awareness ) .
You have to design innovative products for Rural e.g.
LG s customized TV Sampoorna was a runaway
hit . Sold 100,000 sets in first year .
Philips India launched Free Power Radio ( no
batteries & no electricity , except one minute
winding of the spring with the lever allows listening
time of 30 minutes . Price Rs 995

Phillips Free Power Radio

(Chavi Gumao Radio Bajao)
In a bid to trigger brand
penetration in the rural
markets for the audio
segment, Philips India has
launched a new range of
battery free, radio across
the nation. It runs on a
small, dynamo that has to
charged by winding a key.
Philips battery less radio will
enable consumers to save
Rs 1200 per year, which he
would otherwise have spent
on batteries.

Water Purifier for Rural

Market
The countrys largest
consumer products
company by turnover,
Hindustan Unilever Ltd,
has launched Pureit,
water purifier brand, in
rural markets targeted at
relatively well-off village
households that are able
to afford its recurring cost.

Tata Swach meaning

clean in Hindi is a low cost
water purifier targeted at
the low income group and
rural markets.

Requirements of product for

Rural
Appropriate for rural environment
Simple to operate
Visually identifiable
Affordable

Five Product Levels

E.g. Mobile Phone
Core Benefit : Connectivity , being in touch
Basic Product : Translated into a mobile phone
Expected Product : Product differentiation starts at this
level .Mobile phone in rural expects voice clarity , good
battery life, ease of operation & durability .
Augmented Product : Product should fulfill their latent needs
like mobile phones with inbuilt radios, cameras , flashlights,
additional 2GB memory cards , localized language displays
Potential Product : Product encompasses all augmentations
& transformations product will undergo in future . For eg
mobile phone that runs on battery that can be charged
using solar energy

 E.g. Micromax Mobile launched in 2008 priced

at Rs 1250 .
Micro max X1i, ( USP )
30 day battery backup and economical price

Rural products Classification

1) FMCGs
2) Consumer Durables
3) Services
4) Agricultural goods

Rural products Classification

1) FMCGs :

All non durables like toiletries , cosmetics,foods,beverages

& footwear .
Major players are HUL, Dabur, Marico , Colgate
Palmolive , Nirma, Cavin kare & Godrej.
FMCG growth in rural India mainly because of
Product
Penetration
( in
consumption of food categories.ie
acceptance
of
percent )
branded , packaged processedEdible
foods
in rural96areas .
oil
Penetration low for milk powder
, powders/ 90
Washing
liquids
instant noodles, jams etc.
Tea
89
Washing
cakes/Bars

85

Biscuits

76

Hair oil

70

Rural products Classification

2) Consumer Durables :
Home appliances , automobiles, watches &
furnitures .
Major players are Usha, Bajaj , Philips, Titan,
Godrej , Videocon , LG, Samsung , Hero
Honda, Mahindra& Mahindra , Maruti & Tata
in
5 fold growth in colour Product
televisions, 4Penetration
fold
in
percent
motorcycles and refrigerators
has doubled
.
TV
37
Pressure cooker

25

LPG stove

20

Electric iron

14

Moped/ scooter/bike

11

Rural products Classification

3) Services :
Include healthcare, telecommunication ,
information communication technology(ICT) ,
banking , insurance & education .
Players are LIC, State Bank of India,Bharat
Nigam Ltd and new entrants like Airtel ,
Reliance Communications , ITCs e-choupal

Rural products Classification

4) Agricultural Goods:
Goods are seeds, fertilizers, pesticides , insecticides, &
implements ( tractors, tillers,threshers,harvesters,pump).
Products of allied sectors like livestock,poultry,fishery
like animal feeds, dairy , poultry & fishery equipment's
etc. .
Major players are Rallis India,
Monsanto,Bayer,Mahindra& Mahindra ,Escorts .

Product Decisions & Strategies

While developing products for rural markets , it is important

for a marketer to take decisions on product attributes like
Quality , features, design & style .
Marketers have to make product decisions at 3 levels :
Individual product , Product line & Product mix
A) Individual Product decisions :
Quality : In rural areas customer set their own emotional
specifications for judging the quality of the product .
Consumer views
Heavy watches as quality watches , quality of cement
by bitter taste , tractor by sound of engine , .

Product Decisions & Strategies

Features: Are add-ons of a product that add value in eyes of
consumers ; E.g. John Deere is the first company to have added
power steering to its base model of 35 hp tractors.

Design & Style : While designing products for rural

markets , one should take into account the environmental
conditions in which the product will be used , its
functionality , convenience of operation & cost .
Cooking in rural , done at ground level requires pressure
cooker with
handles on both sides .
The popularity of metal torches over plastic ones is due to
high resale value of metal .

Product design for rural needs

Godrej Chotu kool

Chotu Kool
12 volt battery power
2 variants 30 litres & 43 litres
Light weight fully plastic body makes it highly
mobile
Keeps basic food like water , milk,vegetables,fruits
cool for a family of four or five
Priced at half the cost of entry level conventional
refrigerator s

Product branding in Rural

markets

Rural consumers brand association is mainly with colours,

numbers, & visuals & not with the name of the brand
for e.g.
Colours :- Lal dant Manjan, Lal Sabun ( Lifebuoy ) , red battery
( Red eveready), Brooke Bond Red Label tea .
Numbers : Godrej no 1 soap , 555 detergent , 502 Pataka chai
, Brooke Bond A1 karak chai
Visuals: Ghari detergent , Rath Vanaspati , Wagh Bakri tea, 3
Roses Tea, Katchua Chaap mosquito coil & Cycle Agarbatti .
RETAILERS are highly influential in Rural markets( Paanch
rupaye waali chai dena )

Building brands in Rural Markets

Involves 3 decisions: Developing a brand name, creating brand
identity , building brand image .

Brand name : for easy recall, draw any colour , visual or

numeric association e.g. LG s Sampoorna brand TV .
Sampoorna meaning Wholesome in Sanskrit .

Creating a brand identity : E.g. Tata Steel branded its

galvanized corrugated sheet as Tata Shaktee to create brand
identity that conveys qualities of strength .
Shree Ultra created brand identity for cement which said
jungRodhakor rust retardant .
Britannia Tiger biscuit created identity of smart , active &
sharp child .

Building brands in Rural Markets

Building a Brand image :
Mahindra & Mahindra the Bhoomiputra ( son
of soil ) series of tractors with rugged features &
sarpanch ( village head) series have to helped
to improve sales .
Sarpanch series drew a close brand recognition
between product & village head

Brand Loyalty V/s Brand

Stickiness

Rural consumers are brand sticky rather than

brand loyal
Companies should work towards meaningful & long term
relationships. E.g. LIC : Once the number of people in the
village taking policies exceeds a certain percentage , LIC
declared the place as LIC Jeevan Bima Gram .&
contributed INR 75 000 for development of infrastructure
facilities .

Rural Market
(Look alikes, Spell alikes,
Duplicates )

Bonds for Ponds

Fair and Lonely to Fair and Lovely
Likeboy for Lifebuoy
Clamic for clinic plus shampoo
Fighter for Tiger Biscuits
Teta for Tata.
College for Colgate

Packaging for Rural markets

Packaging for rural markets ,needs a special focus
because of problems
Poor transportation system (poor road conditions )
Difficulties of safe storage ( rats, moisture, heat , rainwater )
Poor facilities ( erratic power supply ,leading to poor cold storage
facilities for food products )

A product for rural markets should :

Have a long shelf life than pdcts for urban markets
Be able to withstand extreme weather conditions
Be able to withstand sudden & jerky movements on dusty roads
Have alternate storage arrangements( ice box for cold drinks )

Packaging for Rural markets

Marketers need to consider 3 factors in packaging :

Packaging material
Pack size & convenience
Packaging aesthetics
Packaging Material : Tetra pack has become

ubiquitous . Traditional packing replaced by high & low density

polyethylene films & plastics .
E.g. Godfrey Philips introduced their sona bidi range in zip
plastic pouches .
Frooti in 65 ml Tetra Pack at INR 3.50 helped Parle woo rural
kids . Tetra pack ensures longer shelf life in absence of
refrigeration .

Packaging for Rural markets

Pack size & convenience :Major consumers earn

daily wages hence limited amount of money to spend .

Issue of affordability addressed by bringing small sacchets .
Eg Chik shampoo ,
HUL introduced 50 gm lifebuoy soap pack costing Rs 2 ,
Coco-cola launched small bottle,
Nestle came with small packs of noodles i.e. Maggi Masalaae- magic and Maggi Rasile Chow priced at INR 2 & INR
4.
Rasna introduced sachet at INR 5 which makes 6 glasses
compared to regular pack costing 27.50 which made 32
glasses .

Packaging for Rural markets

Pack size & convenience;

Close up toothpaste were made available at INR 5 in sm
packs
Tiger biscuits were introduced in transparent Oro pack
especially
designed for small outlets like panwallas shops , which no
do
not stock biscuits .
HUL launched its toothpaste in a sachet with a nozzle
Packs of Fair & Lovely cream also come with caps for
convenience

Packaging for Rural markets

Packaging Aesthetics :
Rural consumers appreciate bright colours

Lifebuoy is identified as the red soap , Tiger biscuits

have an attractive red pack with an image of a tiger .
Distinct lettering ,use of local languages on the
pack ,& images or symbols that convey the products
benefits influence consumer perception about the
product .

Packaging for Rural markets

Operation Bharat :
HUL launched operation Bharat in 1997 to create
awareness about its rural brands .
HUL provided hampers at discounted prices of
INR 5,10,15,20 each comprising a clinic
shampoo,pepsodent toothpaste ,Fair & lovely
cream & ponds dream flower talc .
The idea was to include a product each for hair
care, dental care ,skin care & body care .

Product Warranty and After sales

service
Warranty cover is an effective selling plank in rural
markets .
Many tractor companies regularly organize service camps
in big villages/small towns . They invite tyre, battery ,
fuel engine and other component suppliers to participate .
The low cost Exide Jai Kissan battery caters to the
replacement market in rural areas .A robust & localized after
sales service network has helped Exide to increase the
penetration in this segment .