marketing reading material

7/29/2019 marketing reading material

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Successful marketing

requires:

Profitable

Offensive (rather than defensive)

Integrated

Strategic (is future orientated)

Effective (gets results)


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Two Ps of Green Marketing

PRODUCTDevelop products that that are environmentally responsible

Example:CNG based Transport System in Delhi

CNG: Compressed Nitrogen Gas

PRICE

Environmentally accountable products are often less costlywhen product life cycle costs are considered

Example:CFL lamps by Phillips

CFL: Compact Fluorescent Light

SELLING MARKETING

Selling starts with seller Marketing starts with buyers

Emphasis is on saleable surplus Emphasis is on identification of a

Seeks to quickly convert products into cash Seeks to convert customer needs

Views business as goods producing process Views business as customer satis

Cost determines price Consumer determines price

Views customer as the last link in business Views customer as the very purpo

Firm makes the product first & then figure out how to sell it What is to be offered is determine


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While personal selling is a personal form of communication, advertising is an

impersonal form.

The message put across by advertisements is a standard one. However, in case of

personal selling one can mould the message according to the customer being

approached.

So, personal selling is highly flexible in comparison to advertising.

Talking about the cost involved per person, it is high in personal selling. While per

unit cost involved in advertising is quite low since it reaches a wider audience.

The time consideration is a big factor. Personal selling involves huge amount of time,

however, advertising is just done and paid for once and the word about the product

keeps spreading across the globe. To reach a wider market, personal selling

involves a lot of time.

Advertising is useful when one wants to reach out to the actual consumers, while,

personal selling helps to convey the message about a product to the intermediaries

such as wholesalers, distributors etc.

One can obtain immediate response from the promotional tool used when personal

selling is used. However in case of advertising, immediate and accurate feedback

cannot be obtained.

facebook, Twitter, Google+, Pinterest, Flickr, LinkedIn -- the list of leading social

networks businesses and brands must suddenly payattention to goes on and on.

Needless to say, it can be a daunting task to keep track of the social media marketing

world when it comes to your business. Before you get overwhelmed, know that there are

a number of handy online tools, software programs and apps out there that can not only

help you save time, but also simplify your social presence. While many great options

exist to choose from, to save time, we've narrowed the list down to seven of our favorite

tools that any corporate enterprise should be using.


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1. TweetDeckis a social media dashboard application that helps you manage Twitter

and Facebook accounts all in one place. If you are big on interaction (shares, retweets,

etc.) this is a great way to scroll across and see what's going on, find out where your

business was mentioned in conversation, and respond to several accounts at once.

TweetDeck is ideal for people who manage multiple social media accounts, however noin-depth analytics are currently provided with this service.

2. HootSuite is a social media management system that also allows the user to manage

multiple networks at once.It currently supports Twitter, Facebook, LinkedIn, Google+,

Foursquare, WordPress, Mixi and even MySpace. HootSuite has a great scheduling

system that allows you to pre-program an infinite amount of posts for future sharing, a

huge time saver. Users can also look at the scheduler page to see what posts they've

scheduled for the future, and HootSuite also keeps track of all-important analytics.

3. AddThis is a social bookmarking service that can be integrated into a website with

the use of a widget. Once this widget is added, website visitors can then bookmark an

item using Facebook, Google Bookmarks, Pinterest and Twitter. Capable

of boosting shares and user pass-along, it's a handy way to promote specific pieces of

content, sites or initiatives.

4. Instagram is a free photo sharing platform that allows users to take featured photos

and apply visual filters that can transform the look and feel of the image. Easy sharing

support makes it simple to post these photos on Facebook, Twitter and Tumblr, which

provides professional with a unique way to personalize social media content. Popular

with the technorati, it's a surprisingly practical and handy way to add a little sparkle to

any snapshot.

5. PinReach is a Pinterest tool that helps you view activity, measure impact and gaugesuccess on your Pinterest pages. This analytics tool is the leading Pinterest solution for

small businesses, according to MoneyandRisk.com. Its two main purposes are to assess

Pinterest marketing engagement and to identify new marketing and sales leads. Consider

it a handy go-to for those who are frequent users of the popular image-based social

network.

6. Storifyis a social media service that combines multiple parts of a story into one

cohesive whole. Or, in plain English, if you have a topic that is trending or being

discussed across different social media accounts, you can curate pieces from each

account and compile them all in one spot, creating a more easily read and followed

narrative timeline. Users can reorder the pieces, add text and massage previous posts to

create one larger piece. This can be used as a marketing tool for current customers or to

woo new clients.

7. YouTube's Audience Rentention Report. SocialMediaExaminer.com lists this as

the single most important social media marketing tool to come around in a long time.

Noting that many videos are carefully tailored to maximize search engine optimization

(SEO) efforts, time watched by viewers, and prompt specific reactions, this solution

helps you see which audience your clips are reaching, monitor audience habits, and

strategize accordingly. Video production and distribution cost companies countless

millions every year: Using such targeting tools, you can more effectively aim yourmarketing muscle where it counts


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hallenges In Rural Marketing

Introduction

Our country is endowed with a good degree of ethnic and regional

diversity. About three-fourth of the total population resides in the rural

areas and majority of them are dependent upon agriculture for

their subsistence. Agriculture contributes about 24.7% to the Gross

Domestic Product (GDP) of the country. It also contributes about13.1% to the total Indian exports. This sector provides employment to

58.4% of the country's workforce and livelihood to more than 650

million people. Despite this fact, the condition of these people has not

shown any significant improvement.

The development of the nation largely depends upon the development

of the rural population. Mahatma Gandhi had once said: "India's way

is not Europe's. India is not Calcutta and Bombay. India lives in herseveral hundreds of villages".

Rural Market Potential

India is an agro-based economy and the growth of most of the other

sectors of economy is driven by rural demand. Urban market is

reaching towards the saturation point, thus bringing in and urgent

need to focus on rural development. Moreover, more than 70% of

India's population lives in villages and constitutions a big market forindustry because of increasing disposal incomes and awareness

level.

In comparison to just 5,161 towns in India there are 6,38,365 villages

in India. This in itself is an indicator where the real India resides.

Companies are realizing slowly but surely that the key to gain true

market leadership lies in tapping the rural potential. However, the rural

sector in India suffers from different kinds of problems. Some areas

are having enough money but their level of awareness and hence


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consumerism is very low. But there are many areas where economic

empowerment, education, health etc., are major problems.

What is rural marketing

While there is a large growth in the urban market, the rural or latentmarket is yet to be tapped, and has an enormous potential for growth.

A rural market can be defined as any market that exists in a area

where the population is less than 10, 000. The rural market in India is

scattered and spread over a wide geographical area. Indian market is

divided into urban and rural markets.

o Urban market is flooded with low demand.

o Rural market witnesses a high demand It's the rural segment ofmarket that contributes more profit than its urban counterpart. Rural

marketing broadly involves reaching customers, understanding their

wants, supply of goods and services, and ultimately satisfying

consumers, leading to more sales. The general impression is that only

agricultural inputs like seeds, fertilizers, pesticides, cattle feed and

agricultural machinery have a potential for growth in the rural market.

However, there is a growing market for consumer goods now. It has

been estimated the rural market is growing at the rate of five times itsurban counterpart.

Challenges in Rural Marketing

Though rural markets are a huge attraction to marketers, it is not easy

to enter the market and take a sizeable share of the market, in the

short time due to the following reasons.

Low Literacy

There are not enough opportunities for education in rural areas. The

literacy level is as low (36%) when compared to all- India average of

52%.

Seasonal Demand

Demand for goods in rural markets depends upon agricultural

situation, as agriculture is the main source of income. Agriculture to a


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large extent depends upon monsoon and, therefore, the demand or

buying capacity is not stable or regular.

Transportation

Many rural areas are not connected by rail transport. Kacha roads

become unserviceable during the monsoon and interior villages get

isolated.

Distribution

An effective distribution system requires village-level shopkeeper,

Mandal/ Taluka- level wholesaler or preferred dealer, distributor or

stockiest at district level and company-owned depot or consignmentdistribution at state level. The presence of too many tiers in the

distribution system increases the cost of distribution.

Communication Problems

Facilities such as telephone, fax and telegram are rather poor in rural

areas.

Traditional Life

Life in rural areas is still governed by customs and traditions and

people do not easily adapt new practices. For example, even rich and

educated class of farmers does not wear jeans or branded shoes.

Buying Decisions

Rural consumers are cautious in buying and decisions are slow and

delayed. They like to give a trial and only after being personally

satisfied, do they buy the product.

Media for Promotions

Television has made a great impact and large audience has been

exposed to this medium. Radio reaches large population in rural areas

at a relatively low cost. However, reach of formal media is low in rural

households; therefore, the market has to undertake specific sales

promotion activities in rural areas like participating in melas or fairs.

Career in Rural Market


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While rural marketing offers a challenging career, a rural sales person

should require certain qualifications and specialized talent.

Cultural Factors

Culture is a system of shared values, beliefs and perceptions that

influence the behavior of consumers. There are different groups

based on religion, caste, occupation, income, age, education and

politics and each group exerts influence on the behavior of people in

villages.

There is a belief among rural people that experience is more

important than formal education and they respect salespersons who

can offer practical solutions to their problems. Therefore, it isdesirable that sales persons, especially those who have been brought

up in cities are given a thorough training consisting of both theory and

practical aspects of village life. The training will help these sales

persons to align themselves with the market realities and settle down

smoothly in their jobs.

Rural market has a tremendous potential that is yet to be tapped. A

small increase in rural income, results in an exponential increase in

buying power.

Future Trends

Markets which are not able to face the stiff competition posed by

MNCs, can restore their profits in the rural sector. The market share of

urban market when compared to the rural market is low, hence if

Indian industries concentrate on rural markets their sales will

increase. If rural markets are brought into the limelight of

development, they pave way to prosperity. Prosperity of India lies in

the prosperity of every Indian, hence no rural segment should be left

untapped

RURAL MARKETING WHERE MARKETERS SHOULD BREAK

THE RULES

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1

Marketers should know one basic rule-India is second largest consumer market in the world. India

has over 1 billion potential customers; hence one can see no surprise why consumer goods

companies see India as most prolific ground for development, expansion and growth.

According to this table around 71% of the total population in the rural areas that provide a larger

market compared to the urban market.

There are three most important things that attract rural markets more than urban ones:

1. Rural market growth: It is growing rapidly than the traditional urban market. The rural markets seeks

the 4 As rather than branding and luxurious items. The 4 As are affordability, availability, acceptability

and awareness. The stats about the income and their spending should be crystal clear for the marketers.

2. Purchasing power of rural consumers: Better facilities like irrigation, fertilizers, and credits have

enhanced the rural consumers to equip themselves to buy more. Hence they are looking to improvise on

their standard of living.

3. Saturation of Urban Markets: The intense competition in urban areas gave malls, retail stores, factory

outlets and forcing the market to operate at marginal profits. Thus marketers will have to find a new

fresh, less-competitive and more resourceful market to conquer new heights.

Now, the most important thing that marketers cant afford to miss out is the strategy.

Remembering basic characteristics as low spending on capital income, lack of formal retail and

distribution and conservative mentality for buying, marketers first need understand segmentation

of rural market. It can be done as:

a) Geographic: Dividing markets into sections having similar regions for better distribution

network. This helps in channelizing products as per the geographical features. Typically, the

success soaring for Chik shampoo having a USP of Amla, Shikakai and Neem as its

chief ingredients in all villages not growing such products.

b) Demographic: Division of market with basis of income, education, lifestyle, gender and

religion. Rural population insists to buy Rin Shakti or Ghadi detergent than th e Daag ache hai

international brand- surf excel.

c) Psychological: Interestingly, rural population is typical investor behind every penny. But it is

interesting to see them flex their financial machine when competing in the main field- Agriculture.

As seen in North Gujarat, farmers prefer a 50 horse power tractors rather than required 25 to 30hp just because they want to keep up with neighbors when it comes agriculture.

Its about making a right mix of strategy to identify and launch products accordingly. The strategy

still consists of the 4 Ps to work in rural marketing:

1) Product: The tapping of the traditional culture that rural women groomed hair seriously was

done perfectly right by HUL and launched shampoos with a view to sell shampoos because

knowing that rural women compromise in ornaments and clothes but not in hair. But they were

cautious enough to know that rural families used only soaps for hair and body both. These women,

having family oriented buying behavior, will not buy only shampoo just for hairs sake. Hence

they launched a 2-in -1 soap that can be used for hair and body both.
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It later on, after seeing Chik shampoos success started selling shampoos in single served sachets

priced at Re. 1, and the sales of shampoos of HUL have increased to the extent of 30%. 'Operation

Bharat', initiative by HUL tap the rural markets. Under this operation, it passed out low-priced

sample packets of its toothpaste, fairness cream, Clinic plus shampoo, and Ponds cream to million

households. ITC is setting up e-Choupals, which offers the farmers all the information, products

and services they need to enhance farm productivity, improve farm-gate price realization and cut

transaction costs.

2) Price: The most important P of all because the marketers will face a challenge to tap each

segment of their impending customer base. Looking at the table gives a novel idea to tap first two

groups (done by FMCG) to introduce products focused on them.

Household category share Annual income Population size

Low income (59%) Up to Rs. 22, 500 590 million

Lower middle income (25%) 22,500 to 45,000 250 million

Middle income (10%) 45,000 to 62,000 100 million

Upper-middle income (4%) 62,000 to 96,000 40 million

High income (2%) Above Rs. 96,000 20 million

Source: National center for Applied Economic Research (NCAER) in India.

The most apt conclusion said by C.K.Prahlad on rural marketing that is derived is to Focus on

volume, not marginsholds true in this case. In early 90s Kelloggs had launched breakfastcereals which had huge profit margin targeting last two groups of table and lost the plot but HUL,

by introducing products in sachets sells its products in 8 lakhs to 12 lakh villages.

Another example of Nirma where they went to focus on first two groups giving soaps to these

categories and today its success is a living proof of Prahlads most vital rule.

3) Place: The concept of distributed network, retailing and storage for goods is totally absent in

most villages and towns in India. The innovation marketers use IDC (indirect coverage) methods

for tackling above problems. Godrej used company vans to deliver its items in rural India and used

mobile traders which were people travelling on cycles or tractors from villages to towns. Coke

even provided cheap cold storages for storing coca cola bottles in them.

4) Promotion: The most challenging P for marketers because when it comes to rural markets,

two out of five are connected by TV, press, Radio and Cinema put together. SO the only way

possible are innovation promotions using channels where the rural populations are attracted to like

melas, haats and puppet shows. Few years ago, the Kumbh mela at Ganges witnessed 30 million

customers where FMCGs equipped salesmen launched Touch and feel demonstrations, gave

away samples and take aways.

Even, Colgate distributed herbal toothpastes, Lifebuoy and Brooke bond by HUL and Nupur Kali

Mehndi by Godrej. The quote goes saying When you cant predict, create it and it goes true in

the rural market as well. It goes to those who create the buying power for it like the HUL did in

1998 by targeting villages with population less than 3000. It trained the poorest income groups


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from it (15 to 20 people) to sell HUL products amongst other villagers with better profit margins

creating awareness of HUL.

To conclude, rural market is extremely lucrative for market growth but also the most complex to

reach into. These conservative, miserly spending, resistant mindset people can be won over by

offering most value for money products. Only a smart marketer will understand the golden rule offocusing on volumes and not on margins in rural markets.

Characteristics of the Indian Rural Market

* Large and Diverse Market

The Indian rural market is large and diverse. Therefore, the density of shops to market

the products is less when compared to the total population.

* Agriculture is the major source of Income

The main source of income of the rural people is agriculture. If crops fail, then their

income gets affected automatically and this reduces their purchasing power.

* Traditional Outlook

People in rural areas are traditional in their thinking; they are superstitious in theirbeliefs. This trend too is changing because of increasing literacy levels among the ruralyouth.

* Diverse Socioeconomic Background

Rural consumers are spread across different states in distant parts of India. Thus, theirsocial norms and economic status differs widely from each other.

* Change in Standard of Living

Rural population has in general a low literacy rate, low per capita income and thus lowsavings. Many of the rural people's standards of living are below the poverty line andthey are also socially backward. There is, however, a change for the better on thesefronts as a result of reduced tax structures, Government subsidies and favorable

regulations on pricing of farmers produce. Thus, their disposable income is increasingslowly.

Challenges and Opportunities of Rural Marketing in India

Latest data from the NSSO's 66th round of survey on household consumption

expenditure has also revealed that the difference between the spending patterns of theurban and rural poor have narrowed down over the last two years with average spendingby a rural household in 2009-10 at Rs 1,053.64 and urban households at Rs 1,984.46.Crisil, in its report, has pointed to a marked shift in spending on discretionary goods byrural households as against only necessities. The report states that more than half ofIndia's stock of consumer durables and two-wheelers are now in rural India. "Rural

consumption has outstripped urban consumption as a result of the government'sstrategy of inclusive growth, through programmes like MGNREGA ... The rise in prices ofagricultural commodities as well as loan waiver scheme and stimulus packages benefited


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rural households," said NR Bhanumurthy, professor at National Institute of PublicFinance and Policy, adding that the economic slowdown impacted urban incomes more

than rural incomes.

In addition to the consumption trends, the market potential of the rural market isconsidered to be the driver of the future growth by a number of companies.

The market size for the fast-moving consumer goods (FMCG) in the rural markets inIndia is estimated to be Rs. 6,500 billion; consumer durables at Rs. 500 billion,agricultural inputs (including tractors) at Rs. 4500 billion, and automobiles (two-wheelers and four-wheelers) at Rs. 800 billion, totaling to Rs 12,300 billion.

Although rural markets offer immense potential, marketers need to recognize the fact

that there are considerable differences in many respects, including the nature,characteristics buying patterns, and behavior of rural consumers, when compared withtheir urban counterparts.

While the urban economy thrives mainly on secondary and tertiary activities such as

manufacturing and services, the rural economy is driven mainly by primary activitiessuch as agriculture, fishing, and forestry.

The consumer demand and consumption patterns also differ across rural and urbanareas. In India, for example, electricity reaches only 57.6% of the rural population and,therefore, the market for household and other electrical equipment such as televisions

and fans is also restricted.

Similarly, there are also differences in rural literacy and education levels; in India therural and urban literacy levels are 58.7% and 79.9% respectively.

Pattern of income levels in rural markets is yet another differentiating factor that affects

the buying power and consumption behavior of rural consumers. About 80% of the ruralhouseholds in India, for instance, have a monthly income of less than Rs. 3000.

In addition, the dispersed nature of the population, the inadequacy of physicalinfrastructure like roads, the weak banking system, limited availability of credit facilities,

and problems of storage infrastructure are additional challenges for marketers. Thesechallenges need innovative solutions.

Corporate Initiatives and Innovations in Rural Market of India

* ITC is setting up e-Choupals, which offers the farmers all the information, productsand services they need to enhance farm productivity, improve farm-gate price realization

and cut transaction costs. Farmers can access latest local and global information onweather, scientific farming practices as well as market prices at the village itself throughthis web portal - all in Hindi. It also facilitates supply of high quality farm inputs as wellas purchase of commodities at their doorstep.

* Shakti is HLL's rural initiative. It seeks to empower underprivileged women ofvillages with populations of 2000 or less by providing income-generating opportunities,

health and hygiene education through the Shakti-Vani program, and creating access torelevant information through the i-Shakti community portal. Shakti is a pioneering effortfrom the private sector in creating livelihoods for rural women. Started in 2001, Shaktihas already been extended to about 50,000 villages in 12 states Andhra Pradesh,

Karnataka, Gujarat, Madhya Pradesh, Tamil Nadu, Chhattisgarh, Uttar Pradesh, Orissa,Punjab, Rajasthan, Maharashtra and West Bengal (respective state governments and

several NGOs are also actively involved in the initiative). For HLL, it is "enlightened self-interest"creating opportunities to increase the rural family income; putting more


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money in their (rural people) hands to purchase the range of daily consumptionproducts-from soaps to toothpastes-that HLL makes. It also enables HLL to access

hitherto unexplored rural hinterlands. (Kamath, 2003).

* Maruti has been organizing road shows with film screenings. This is much like atravelling cinema that rural India is already quite familiar and fascinated with. The only

difference being that the film is not set up in a tent, but inside a TATA truck fitted aSamsung LCD TV, an air conditioner and reclining seats. The film strikes a chord with thevillagers because it tells a simple story of an average villager who buys a Wagon R afterbeing persuaded by a friend who also bought a Wagon R.

* " Gaon Chalo" by Tata Tea

"Gaon Chalo" is a distinctive rural marketing initiative started in the year 2006 in UttarPradesh by Tata Tea. For penetrating the rural market, the company partnered withNGOs with wide reach among Uttar Pradesh's rural masses. The "Gaon Chalo project hascreated employment opportunities to the youth of villages and small towns. It has

brought steady income to those who are distributors of Tata Tea. Tata Tea's consolidated

market shares from rural areas rose from 18% to 26.6%.

* Nokia's Low-Cost Handsets

According to marketers, rural India has a huge progressive customer base for mobiles.As most rural consumers are price-sensitive, Nokia has launched seven handsets in the

price range of Rs. 1500 to Rs. 5500 targeting rural customers. Further, Nokia ispromoting a subscription-based service called "Life Tools" which provides informationabout agriculture and education that is helpful to rural people. It also providesentertainment services. The "life Tools" service is priced between Rs.30 to Rs. 60 per

month, based on the package an individual opt for.

* Dabur- Indian Oil Partnership

In order to tap India's rural market, Dabur India Ltd. Has tied up with Indian OilCorporation (IOC). According to the agreement between the two companies, IOC's retailoutlets all over the country will stock and sell Dabur's products consisting of healthcare,

oral care, personal wash, skin care and home care products. The Kisan Seva Kendra is aone-stop rural retail outlet of IOC, which offers fuel and non-fuel products like fertilizers,grocery, tools used for cultivation, seeds, personal care products, auto spares, etc. There

are 1600 such IOC outlets across India.

* Airtels's Telecom Revolution in Rural India

Airtel's rural start up package offers its customers a Motorola handset for just Rs. 1599.Its recharge cards come in a minimum denomination of Rs.10, so that even daily wageearners can afford to use the service, Airtel is spreading awareness in villages by itsroadside advertisements highlighting its red and white logo. It is also increasing itsbusiness network through commission-based retailers, who can be anyone who is sellingcigarette, paan, textiles, etc. The company already has 55000 retailers in Bihar andJharkhand, and is planning to expand the network by approaching 5000 more cigarette

and paan sellers.

* Mahindra-Leading Brand in Rural India

After launching its Super Turbo 595 DI Tractor, Mahindra wanted to create awarenessabout its new technology and high efficiency to farmers and thereby sell the tractor. It,

therefore, identified opinion leaders and progressive farmers and organized interactivediscussions between the company (Mahindra) and its target audience (farmers and


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opinion leaders). It gave free test rides and thereby sold the tractor initially to opinionleaders. This marketing activity was carried out in Maharashtra, Haryana and Punjab.

After using the tractor for a reasonable time period, the initial buyers were glad to havethe product and expressed their positive word-of-mouth about the tractor to theirfriends, relatives and neighbors. This initiative has helped the company to a greatextent.

Table: Corporate Innovations for Rural Market

CompanyIndustrySegment

Product/ProgramDescription Impact

Godrej &

BoyceConsumer

DurablesChotuKool

Refrigerator

Powered by battery, a

perfect refrigerator for ruralpopulation. Does not requireregular electricity supplyunlike the conventional

models.

Providing the rural/ semi-

urban areas with a high-endproduct, the company payscommission of US$ 3/refrigerator to the rural agent;

making rural population thelast mile connectivity of itssupply chain.

Vortex Banking Low cost ATM Low-cost Automated TellerMachines (ATM) which

provide banking solutions topeople in rural/ semi-urbanareas. The machineconsumes very less power,

and has an elegant, ruggedand reliable Cash DispenseModule. A wide range ofproducts meant for rural and

semi-urban bankers makes

the financial operationsseamless and uncomplicated

A wide range of productsmeant for rural and semi-

urban bankers makes thefinancial operations seamlessand uncomplicated

TataChemicals

Consumergoods

Water Purifier Swach range of waterpurifiers promise pure

drinking water to the ruralpeople at a very low cost ofINR 999. It does not requirerunning water or electricityto provide harmless,bacteria-free drinking water.

The winner of the gold at theAsian Innovation Awards 2010

would be rolled out nationallyand then in emerging marketsacross Africa, South-East Asiaand Latin America.

HUL FMCG Khushiyon ki Doli The multi-brand ruralengagement module-

Khushiyon ki Doli- initiatedby HUL, provides variouspersonal care and home carebrands such as Wheel, SurfExcel, Fair & Lovely, Sunsilk,

Vim, Lifebuoy and Close Up.

The main objective of thecampaign is to reach out to

media dark villages with HULbrand messages to inculcategood personal hygiene habitsamong the people. Shaktidistributors now account for

15 per cent of the company'ssales in rural India

Nestle FMCG Smaller packs ofmaggi noodles andtomato ketch-ups

The initiative aimed at'indianising' Nestle's globalportfolio to propel its growthin the rural markets. Thecompany promises

nutritionally superiorproducts for people residing

With an aim to penetrate intorural markets, Nestle hasstrived to create productsspecifically for the consumersat the bottom of the pyramid.

The taste maker introducednot only delights the taste


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in the hinterlands. buds, but also adds nutritionalquality to the food.

Nokia Software Nokia Life tools The mobile application,launched in June 2009,empowers people to haveaccess to agricultural,

educational andentertainment content

Nokia has tied up withgovernment organizations,NGOs and Reuters for thiscampaign and has partnered

with Idea Cellular as theservice provider. It haslaunched an ancillarymicrofinance campaign to

facilitate handset purchase inthe rural areas.

ITC Agriculturee-Choupal An initiative by ITC, e-Choupal aims to empowerfarmers with up-to-date

agricultural and marketinginformation through accessto internet and computers.The campaign was launchedin 2000 and targets toempower 10 million farmersby 2012.

e-Choupal delivers real-timeinformation and customisedknowledge to improve the

farmer's decision-makingability, thereby better aligningfarm output to marketdemands; securing betterquality, productivity andimproved price discovery.

GlaxoSmithKline

FMCG Asha- milk fooddrink

GlaxoSmithKline's Asha,which is 40 per cent cheaper

than the regular variant ofHorlicks, is the first productfrom the UK-based MNCdesigned for ruralconsumers.

Realising that right productneeds to reach the right

consumer in time, thecompany will continue toidentify and bridge need gapsfor BoP consumers,particularly in terms ofnutrition products and their

availability.HeroHonda

ConsumerDurable

Splendor Hero Honda Motors Ltd., ajoint venture between India'sHero Group and Japan'sHonda Motor Co., has bet bigon rural India by selling fuel-efficient motorcyclesdesigned for shallowpockets. The Splendor, forinstance, costs US$ 800.

Late Dr C K Prahalad has rightly said that if we stop thinking of the poor as victims or as

a burden and start recognising them as value-conscious consumers, a whole new world

of opportunity will open up. He suggests that four billion poor can be the engine of the

next round of global trade and prosperity, and can be a source of innovations.

Limitations and Future Scope of the Study

The present study is based on secondary data and has limitations of secondary data.

Study is explorative in nature and there is scope for detailed study corporate wise with

its success, challenges and failure rate.

Conclusion:


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The key challenge that companies face in the rural market is to identify and offer

appropriate products without hurting the company's profitability or margins. Companies

should recognize that rural consumers are quite discerning about their choices and

customize products and services accordingly. Product awareness campaigns and

advertising communications too need to be designed and executed keeping in tune with

the context. The products should not only be made available at the right time and at the

right place but should also be affordable and acceptable to the rural people.

Rural markets consisting of 70% of the total Indian population with thin density and

inadequate infrastructure with low per household income poses unique challenges to

marketers and calls for innovative marketing solutions.

REQUIREMENTS OF

SEGMENTATION

Introduction

It is difficult to effectively cater for everybody in the market place, so businesses

will aim their products and services at specific parts of the market. After selecting

asegment(of the market), businesses should evaluate their choice carefullyand ensure they have made the right decision. If a business begins promoting

products (at market segments) without a full evaluation, it is risking wasting timeand money. A successful market segment will usually meet the following criteria:
http://www.learnmarketing.net/segmentation.htmhttp://www.learnmarketing.net/segmentation.htmhttp://www.learnmarketing.net/segmentation.htmhttp://www.addthis.com/bookmark.php?v=250&pub=learnmarketinghttp://www.learnmarketing.net/segmentation.htm


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Clearly Defined and Distinguishable Segment

The chosen segments should be clearly defined to avoid doubt about which part ofthe market, the firm's marketing activities are aimed at. Otherwise there is a risk

that market activities will "spill over" into different segments. If there is more thanone segment, each one should be made up of target markets which require specific

marketing, due to differences in buying behaviour. For example if marriedand unmarried men behave similarly when purchasing shoes, there is little value in

placing them in different segments.

Measurability of Segment

Before embarking on a sales strategy it is important to know the size of existingsales in that segment. A firm also needs to know how product sales are growing in

the chosen segment. If you can not measure the growth rate, it will be difficult toassess whether your chosen segment is profitable. For example smart phone sales

are growing rapidly but which segments of the market are they growing in? and inwhich segments is growth stagnant?

Accessibility of segment

Accessibility is about communicating with your customers and being able to getthings to them. Communication is usually through the internet, TV, radio. However

if target customers do not use these things it will be difficult to communicate withthem. Post is also a challenge unless you can find out where people making up

your market segment live. If you cannot target your segment effectively through


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marketing communication then it is not viable as you will be unable to tell them

about your product or firm.

The other aspect of accessibility is being able to distribute your product to your

chosen segment. For example a shop based in South London is unlikely to get alarge number of customers from North England. In this instance the shop will haveto reassess it's chosen segment or think about solutions to help accessibility such as

selling to customers through the internet and mailing out purchases.

Size and Suitability of Segment

Firms need to ensure that the segment is suitable. This means that thecharacteristics of the people making up the segment, suggest the segment are likely

to buy the product and have the spending power to buy the product.

There needs to be an opportunity to increase product sales within the chosen

segment. Using our smart phone example, if the chosen segment contains people

aged 20-30 and if we imagine 95% of this age group own a smart phone, thechosen segment will probably need to be reconsidered. This is unless the companyfeels that the segment would like to replace their existing smart phone and have the

money to purchase a replacement smart phone.

Segment suitability also includes the size of the segment. If the segment is too

small, potential for sales growth will be limited. If is is too large, it will be difficult

to create marketing activities to suit all of the groups included in the segment.

Actionability of Segment

Even if all of the criteria listed above are satisfied a segment is unsuitable unlessthe business has the resources to cater for the needs of the segment. For example asmall business with a 45000 turnover would not accept a multi million pound

manufacturing contract.

Conclusion

An effective segment is defined, measurable, accessible, actionable and suitable for

the firm. These elements mean that a firm

- has a clearly defined, distinguishable and profitable segment

- has the resources to cater for its segments and- is able to access its segment,

so that it can profit from a segment with growing product sales. If any of these

elements is missing it will hinder the success of the firm and lead to wasted effort.


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Documents

marketing reading material