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M.S.

RAMAIAH INSTITUTE OF TECHNOLOGY

(Autonomous, Affiliated to Visvesvaraya Technological University)


Vidya Soudha, MSR Nagar, M.S.R.I.T Post, Bangalore-5600054

Department of Management Studies


SEMINAR on
INNOVATIONS IN RURAL MARKETING

Submitted by: Divya Shree. S


USN – 1MS08MBA14

Under the Guidance of in co-ordination with

Mr. V.K. Srirama Mrs. Rizwana. M


CONTENTS

• Introduction. • What is Innovation?


• Scope of the study • Marketing innovations
• Highlighting features of • Rural Marketing Mix
Rural market. • Challenges in Rural
• Significance of Rural Market
markets in Indian • Examples
economy. • Learning experience
• Literature cited • Conclusion
Rural Marketing Definition

Function that manages all activities


involved in assessing, stimulating and
converting the purchasing power of
rural consumers into effective demand
for specific products and services to
create satisfaction & a better standard
of living for achieving organizational
goals.
SCOPE OF THE STUDY
 The emergence of Rural markets in Indian
context.
 The present scenario of rural marketing in India.
 The future prospects of rural markets and their
scope for the MNCs and Indian companies, in
India.
 The challenges faced by rural marketers in India.
 The reasons of popularity of rural markets in
India.
Features of Indian Rural Markets

• Large and Scattered


market
• Major income from
agriculture
• Low standard of living
• Traditional Outlook
• Infrastructure Facilities
SIGNIFICANCE OF RURAL MARKETS

1. Large Population
2. Higher Purchasing Capacity
3. Market Growth
4. Development of
Infrastructure
5. Insulated from the global
economic slowdown (RMAI)
 Some of the facts that will highlight the potentiality of rural market are: -
 According to a study by the Chennai-based Francis Kanoi Marketing
Planning Services, estimated annual size of market is –
 In 2001-02 -
* LIC sold 55% of its policies in rural India.
* 50% of BSNL mobile connections sold were in small towns / villages.
* 41 million Kisan Credit Cards issued were in rural areas (as against
22 million Credit Plus Debit Card in urban).

FMCG Rs. 65,000 Crore


Consumer Durables Rs. 5000 Crore
Agri Inputs (e.g., Tractors) Rs. 45,000 Crore
2/4 Wheelers Rs. 8,000 crore
Total Rs. 1,23,000 Crore
Literature cited
 Books:  Articles:
• Rural Marketing by C.S.G. • Rural Retailing by Navya
Krishnamacharyulu, Lalitha Choudary, NIFT New Delhi
Ramakrishnan • India business Directory
• Rural Marketing by • Rural mktg and its significance, by
T.P.Gopalswamy, II edition. C. Pavithra (Research scholar,
• Rural Marketing- Text and cases Periyar University)
by U.C.Mathur. • Soumen Banerjee Senior
 Websites: Administrative Officer at ICFAI
• www.wikipedia.org National College, Asansol. &
• www.business-standard.com Lecturer at IIAM, Durgapur.
Article posted on March 21, 2009
• www.indiastudychannel.com
• www.ruralrelations.com

WHAT IS INNOVATION?

 Innovation may be defined as exploiting new ideas


leading to the creation of a new product, process or
service.

 Another way of putting this is that an innovation


lowers the costs and/or increases the benefits of a
task. A wildly successful innovation increases the
benefits-to-costs ratio
MARKETING INNOVATIONS

“A marketing innovation is the implementation of a


new marketing method involving significant changes
in product design or Packaging, product placement,
product promotion or pricing.”

Innovative marketing of products is about leveraging


the marketing mix, namely, the four P’s: Product
(Design and Packaging), Price, Place and Promotion
in ways that has not been before by the organisation
implementing the innovations.
MARKETING INNOVATIONS
• FMCGs have come up with creams and soaps @ Rs 5,
hair oil and shampoo sachets @ Re 1 and small Coke @
Rs 5. To develop a product to suit the rural scenario,
• Companies came up with special rural products, like
Chic Shampoo sachets @ Re 1, Parle-G Tikki Packs @
Rs 2, customised TVs by LG, Shanti Amla oil by Marico.
All these brought positive results for them.
CHALLENGES IN RURAL MARKETING
 Low literacy rate
 Resistance to change
 Seasonal demand
 Lack of infrastructure facilities & proper warehousing
facility
 Threat of spurious products.
 Communication problems.
 Problems related to distribution
and channel management.
Rural Marketing Mix

• Rural Marketing Mix refers to the set of


actions, tactics, tools or variables that a
company uses to promote and sell its
brand or product in a Rural markets
The 4Ps of Rural Marketing
PRODUCT:
• Small unit size and low priced.
 New product designs- sturdy products
 Brand name.
 Avoid sophisticated packing – Refill packs,
Reusable packaging
Factors to be considered while designing the product:
 Specific requirements of Rural consumers.
 Habits of usage and purchase
 Income levels
 Customs, beliefs and taboos.
The 4Ps of Rural Marketing

PRICE:

1. Low priced products


2. Application of value
engineering (milk-soya protein)
3. Small sized utility packs
The 4Ps of Rural Marketing
• PLACE:
• Segmentation
• Coverage of villages with 2,000
and above population
• Distribution up to flea markets/
Mandi/shanties/ Melas.
• Direct Contact with rural Retail
The 4Ps of Rural Marketing
PROMOTION: • Television
• Radio
• Haats, Melas,
Fairs.
• Print media
• Cinema
• Hoarding/ Wall
Painting
• Rural van
Examples of Innovations in
Rural Marketing Mix
• ICICI BANK customized their rural ATMs, so
they can operate biometric authentication. ICICI
rural ATMS are battery operated so that power
failure is not issue.
Examples of Innovations in
Rural Marketing Mix
• Nokia develop affordable Mobile phones for rural
markets with unique features such as local
language capabilities, present time/ call limits.

• Philip develop a TV ‘ Vardaan’ for rural markets.


This TV work on the voltage 90-270 volts.

• Philips developed ‘ Free Power radio’ this radio


do not require power and battery also. it run on
simple winding of level provided in the set. The
price of this attractive set is Rs. 995.
Examples of Innovations in
Rural Marketing Mix - ITC e-choupal
EXAMPLES
• HUL’s Shakti:
Learning experience
 Companies are finding Rural Markets increasingly attractive.

 Rural population is gradually getting urbanized and has a


great potential and improving purchasing power.

 The 4 As- Acceptability, Affordability, Availability,


Awareness has to be effectively adopted in order
To capture the untapped potential of the rural
consumers.

 With the initiation of various rural development


programs there have been an upsurge of employment
opportunities for the rural poor.
Learning experience
 Rural markets are delicately powerful. Certain
adaptations are required to cater to the rural
masses; they have unique expectation and warrant
changes in all four parameters of product, price,
promotion and distribution.

 Continuous customization seems a sure shot


approach to provide both short and long-term
returns in the rural markets.
CONCLUSION

• The rural market in India is vast and scattered


and offers a plethora of opportunities in
comparison to the urban sector.
• Improvement in infrastructure and reach promise
a bright future for those intending to go rural.
• Rural market is not exploited Completely and is
yet to be explored.
THANK YOU