1. SESSION – III
XAVIER INSTITUTE OF MANAGEMENT, BHUBANESWAR
4Ps in Rural Markets

2. Product
“ Anything that has a value in exchange”
Product – price – place – promotion
Challenges – Availability, affordability, acceptability
& awareness
Marketing Tools Marketing Challenge
Product Acceptability
Price Affordability
Place Availability
Promotion Awareness
Source: The Rural Marketing Book- Kashyap. P & Raut. S

3. Cont’d

4. Appropriate Product Strategies
Existing & New Products
Product features – service quality – price &
performance relationship
Simplicity is key
“ Sense & Simplicity” – Phillips Global Campaign
 Urban market successes could be rural market
failures
 Appropriate new product development processes

5. CORE BENEFIT
BASIC PRODUCT
EXPECTED PRODUCT
AUGMENTED PRODUCT
POTENTIAL PRODUCT
Product Levels

6. Cont’d
Product Level Characteristics Example Rural Vs Urban
Core Benefit Fundamental
benefit/ services
Entertainment Same
Basic Product Benefit/service
into tangibles
Television Set Same
Expected Product Attributes &
conditions buyers
normally expect
Digital sound, flat
screen
Appearance of
differences in
expectations
Augmented
Product
Exceeding
customer
expectations
Battery Operated
TV
Pleasant surprise
for rural customer
Potential Product Encompassing all
augmentations &
transformations
Jolly Startek TV Uniquely rural
value proposition

7. Product Development Stages
Stage Marketing Activities
Idea Generation •Searching for new product ideas
Idea Screening •Select the most promising ideas and drop those with only limited potential. Study the
needs and wants of potential buyers, the environment and competition.
Concept Testing •Describe or show product concepts and their benefits to potential customers and
determine their responses. Identify and drop poor product concepts. Gather useful
information from product development and its marketing personnel.
Business Analysis •Assess the product’s potential profitability and suitability for the market-place. Examine
the company’s research, development, and production capabilities. Ascertain the
requirements and availability of funds for development and commercialisation. Project
ROI.
Product Development •Determine technical and economic feasibility to produce the product. Convert the
product idea into a prototype. Develop and test various marketing mix elements.
Test Marketing •Conduct market testing. Determine target customers’ Reactions. Measure its sales
performance. Identify Weaknesses in product or marketing mix.
Commercialisation •Make necessary cash outlay for production facilities. Produce and market the product in
the target market and effectively communicate its benefits.

8. FMCG Consumption Trends
Products Urban( 1000 HH) Rural ( 1000 HH)
Toilet Soap 998 992
Washing Cake 980 950
Cooking Oil 968 952
Hair Oil/ Cream 897 787
Tea 876 758
Toothpaste 822 449
Washing Powder 819 576
Electric Bulb 723 394
Shampoo 663 352
Biscuits 579 314
Health Beverages 324 67
Source: National Council for Applied Economic Research, 2002

9. Consumption Ranking
Rank Rural Product Urban Product Rural HH
Consumption
grams / month
1 Toilet Soap Toilet Soap 268
2 Washing Powder Biscuits 950
3 Packaged Tea Washing Powder 268
4 Biscuits Packaged Tea 302
5 Detergent Cake Detergent Cake 893
Source: A.C Nielsen Retail Audit, MAT, July -2004 & ORG- MARG Retail
Consumer Panel, 2001

10. Rural Durable Usage Trends
NCAER has classified durables into three categories
Group One( <Rs. 1000)
Group Two( Rs.1000- 6000)
Group Three( >6000)
In group one the growth is as high as 75 percent
Electrical goods show the highest urban- rural disparity, why ?
Television( B & W) 195/1000HH in rural Vs 490/1000HH in
urban
Colour TVs 48/1000 HH in rural Vs 304/1000HH in urban

11. Packaging
Associated with affordability - Convenience -
Consumer recognition & product protection
Packaging material, size, convenience and
aesthetics
 Example: Chik Sampoo

12. Corporate Responses to Fakes
Look-alikes- Spell-alikes & Duplicates
Prices range from MRP to 60 % of MRP
Margins range from 60 % to 300 %
Legal action – awareness programmes – New
Package Development

13. Fakes: Some Examples

14. Cont’d

15. Pricing

16. Issues in Pricing
Internal & external factors
Selecting pricing methods
Pricing adaptations
Low price points – Simple packaging – utility
around packaging material
Highlighting value

17. Price Adaptations ( Indicative)
Product sharing services, Example: Tractors
Product Bundle pricing, Example: HUL Operation
Bharat
Free gifts – may sometimes not work in rural areas
Special event pricing- Hero Honda Rs. 500
campaign

18. Colgate- Cibaca

19. Place- Rural Distribution Challenges
Large number of small markets
Dispersed population and trade
Poor connectivity
Low availability of suitable dealers
Inadequate banking/ credit facilities
Poor product display and visibility
Poor communication of offers and schemes

20. Levels of Distribution
LevelLevel PartnerPartner LocationLocation
1 Company Depot/ C & FA National/ State level
2 Distributor/ Van
Operator/ Super Stockist/
Rural Distributor
District level
3 Sub Distributor/ retail
Stockist/ sub stockist/star
seller
Tehsil HQ, towns and
large villages
4 Wholesaler Feeder towns, large
villages, haats
5 Retailer Villages, haats

21. Distribution Adaption( Indicative)
Hub and Spoke Model, Example: Coca Cola
Use of Affinity groups, Example: Project Shakti
Haat Activation, Example: Colgate
Syndicated distribution, Example: Cavin Care &
Amrutanjan
Use of marketing co-operatives, Example: Warna
Bazaar in Rural Areas
Mobile traders, Example: FMCG companies

22. Promotion- Adaptations for Rural Markets
Conventional Non- Conventional Personalised
Television Haat and Mela Direct mailer
Radio Folk Media( puppet and
magic show)
POS (demonstration, leaflet)
Press Video Van Word of mouth
Cinema Mandi Interpersonal
communication
Outdoor: Wall Painting,
Hoarding
Animator

23. Melas & Haats
Melas Haat
1. 25,000 melas
2. Companies can concentrate on
the top 100 melas
3. Pushkar Mela in Rajasthan
4. Organised by the state veterinary
department
5. Product sales, promotion,
demonstration and database
generation
6. Cultural activities and rural
sports
1. Periodic markets located in larger
villages(> 40,000)
2. 10 – 50 villages are serviced
3. Sunday markets are most popular
4. Average number of outlets is 315 and
average daily sales is about Rs 2 lakhs
5. Traders participate in at least 4 haats
6. 81 percent of the visitors are repeat
customers

24. Types of Promotions
Advertising
Sales promotions – coupons, contests, demonstrations
and sampling, Example: Tata Shaktee Haat Hungama
Direct marketing, Example: Videocon
Publicity, Example: Project Shakti and AP Online
Using a direct selling through a sales force, Example:
Swasthya Chetna for Lifebouy

25. Cont’d
Push strategy – sales force and trade promotion
Pull strategy – advertising and consumer
promotion

26. Close of Session
Thank You