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The future lies with those companies who see the poor as their customers.
CK Prahalad to Indian CEO's, Jan 2000.
Lecture Plan
Course Plan Nature of Assignments Rural Marketing Issues, Opportunities & Challenges
RURAL MARKETING
Course Plan
Rural Marketing
Rural Marketing
Consumer Behaviour
Cultural Factors Technological Factors Economic Factors Characteristics of the Rural Consumer Buying Behaviour Patterns Customer Relationship Management and the Trade role
Rural Marketing
Product Strategy
Product Concepts & Classification Rural Product Categories New Product Development Consumer adoption process The Role of Fakes
Pricing Strategy
Pricing Influences Pricing Strategies Role of Retailer & Schemes/Margins
Distribution Strategy
Coverage challenges & dilemma Channels of Distribution Existing Distribution Models Emerging Distribution Models
Rural Marketing
Communication Strategy
Challenges in Rural Communication The Communication Process Developing Effective Communication Rural Media Role of Innovative Media
Rural Marketing
Nature of Assignments
Case Studies from Indian experiences Visits to different rural markets, haats & melas Interviewing Rural Practitioners Conducting Rural Market Research Attachments with strong rural marketing organisations
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RURAL MARKETING
Issues, Opportunities & Challenges
53% 59% Rs Rs Rs Rs
Source: NCAER
Total
Rs 1,23,000 Crore
Source: Francis Kanoi Latest McKinsey Report estimates that by 2020, Rural Consumer Market 10 Will be worth Rs. 250,000 crores
12
0.8
54.7
63.3
25.0
14.7
Aspirants Destitutes
20.9 2001 - 02
12.2 2006-7
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All figures in %
Annual Income
Above Rs 215,000 Rs 45,001215,000 Rs 22,001- 45,000 Rs 16,001 - 22,000 Rs 16,000 & Below
1995-96
0.3 13.5 31.6 31.2 23.4 100.0
2006-07
0.9 25.0 49.0 14.0 11.1 100.0
> Projections Based on 7.2% GDP Growth Consuming class households in rural nearly equal to urban. Rural Purchasing Power higher due to lower expenses on food, shelter, education & health
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Issues In Rural
Distribution Understanding the rural consumer Communication Poor infrastructure
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Distribution of Villages
Population
Less than 200 200-500 501-1000 1001-2000 2001-5000 5001-10000 Total no of villages
No of villages
92,541 127,054 144,817 129,662 80,313 18,758 593,154*
% of total villages
15.6 21.4 24.4 21.9 13.5 3.2 100.0
17% of villages account for 50% of rural population & 60% rural wealth
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Fewer brand choices in rural : number of FMCG brands in rural are half that of urban. Buy value for money , not cheap products
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Traders,Small Farmers
21 14
26
Satellite TV
Radio
Press
Cinema
TV
All Media
24
25
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Marketing Opportunities
Low penetration rates in rural
% of rural HH
Durables
CTV Refrigerator Mobile Phones
Urban
30.4 33.5 40.0
Rural
4.8 3.5 12.0
Total
12.1 12.0 18.0
FMCGs
Shampoo Toothpaste
Urban
66.3 82.2
Rural
35.2 44.9
Total
44.2 55.6
Source: NCAER
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Marketing Opportunities
R1 - 4% R2 - 11% R3 - 37% R4 - 48% Low rural consumption in FMCGs (rich HHs) urban rural Annual consumption Rs 13,000 Rs 9,400
Rural consumption volumes (R1+R2+R3) Toothpaste 88% Toothpowder 79% Shampoo 88%
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