Transactional Vs Development MarketingAspect Transactional Development

Concept Consumer orientation, Marketing concept Society orientation, societal concept

Role Stimulating and conversional marketing Catalytic and transformation agent

Focus Product-market fit Social change

Key task Product innovations and communications Social innovations and communications

Nature of activity Commercial Socio-cultural, economic

Participants Corporate enterprises, Sellers Government, voluntary agencies, corporate enterprises, benefactors

Offer Products and services Developmentprojects/schemes/programs

Target group Buyers Beneficiaries and buyers

Communication Functional Developmental

Goal ProfitsCustomer satisfactionBrand image

Market developmentCorporate Image

Time-Frame Short-medium Medium-Long

Motivation Profit-motiveBusiness policy

Service-motiveIdeological or Public policy

Rural marketing Strategies for Pharma Companies

Novartis has chosen to approach rural markets in a way similar to FMCG companies. Their marketing strategy is based on a four 'A' approach. The company works by creating 'Awareness' at different levels, improving 'Affordability' and 'Attractiveness' (e.g. usability) of products, making them 'Available' close to the patient. The company has also begun a pilot project on a model somewhat similar to the model of e-Choupal by ITC in India or of Danone-Grameen in Bangladesh the company also offers drugs targeting serious ailments like tuberculosis. rural areas are also susceptible to counterfeit and spurious drugs and hence there is a huge space for quality medicines. Lupin. "Our marketing strategy in the rural areas is to provide patients with quality medicines at competitive prices

The company aims at reaching out to uncovered medical practitioners in these markets. The four 'P' strategy of the company works to supply the right set of medicines (product) by recruiting, training and developing local persons (people) as 'Medi-Pracharaks', The company also ensures that quality drugs are made available at an affordable price. As part of its promotional program, the company organises various knowledge campaigns like 'Arogya Jagriti Mela', 'Swastha Mela'

• Challenges for the Pharma Companies• lack of communication,• language barriers, • high penetration of spurious drugs, • lack of adequate infrastructure such as marketing and

distribution channels for niche therapeutic segments• poor storage facilities, and insufficient sales personnel

deployment.• rural markets are still dominated by the acute and infective

therapy segment and some of the prominent disease segments prevalent in the rural markets are pain or analgesics, anti-infective and respiratory

• pharma companies still choose to market their product range which has a low-risk involvement

• Most of the products that are being advertised and marketed aggressively are the low risk-low involvement products like pain balms, lozenges, and cough and cold syrups.

• The high risk-high involvement products like cardiac or cancer products are not advertised or marketed through media as regulatory guidelines prevent this.

• challenge lies in ensuring medicines reach the rural areas rather than concept-selling of drugs

2006-07, the rural Indian pharma market was estimated at around $1.4 billion. According to a Ranbaxy as a percentage to the total market, the rural market in India has evolved from 18 percent in 2005 to 21 percent in 2007.

• Pricing strategiesPricing strategies are very much linked to product strategies. Some of these strategies are mentioned here.

1. Low cost/cheap productsThis is a common strategy being adopted widely by many manufacturing and marketing men. Price can be kept low by small unit packings.

2. Avoid sophisticated packingSimple package can be adopted which can bring down the cost as it is presently being done in the case of biscuits. Some innovation in packing technology is very necessary for rural markets.

3. Refill packs/reusable packagingSuch measures have a significant impact on the rural market. By such technology also the price can be reduced. In addition the packaging material used should preferably lend itself for reuse in rural areas. An ideal example in this direction can be the packing of fertilizers.

4. Application of value engineeringThis is a technique which can be tried to evolve cheaper products by substituting the costly raw material with the cheaper one, without sacrificing the quality or functional efficiency of the product, for example in food industry, 'soya protein is being used instead of milk protein. Milk protein is expensive while soya protein is cheaper but the nutrition value is same. This technique yields itself for application in many engineering or product designed areas so that the price can be kept at an affordable level. These areas have to be explored by manufacturing and marketing men in the context of rural markets.

The pricing strategy for rural market will depend upon the scope for reducing the price of the product to suit the rural incomes and at the same time not compromising with the utility and sturdiness of the product.

• There can be three kinds of customers. One group can comprise the price-sensitive ones called the transactional ones. In India this segment exists in most product categories ranging from consumables to projects.

• The second group of customers require `consultative selling'. This will require the marketing organisation to have analytical and intimate knowledge of the customer's requirements and provide a consultative edge to the total offering.

• The third group of customers are the ones who require the `enterprise sales effort' by which they may have a strategic association with the marketer. This approach should enable the marketer to bring in marketing efforts which may require inputs from several functional areas of the marketing and buying organisation. This eventually results in offering the customer a strategic product. This approach leads to continuous improvement between the customer and the marketer.

• Introduction to Fake Products • Fake products are of two types – one: counterfeit products and two: pass-off products.

Counterfeit products are fake products that bear identical name of product/ packaging/graphics/colour scheme and even same name and address as the genuine manufacturer. Someone produces these to look exactly like real products other than the legal owner of the real products, trademarks and product packaging. Sometimes it is becoming more and more difficult to tell which is the real "Ponds" talcum powder and "Clinic Plus" shampoo from the fake products.

• Pass-off products use similar sounding or are similar in spelling (for example "Luk" for "Lux", "510" for "501", They use similar type of packaging or colour or designs. They come out with the motive of misleading and cheating ordinary consumers who are uneducated or in a hurry in purchasing products. A study conducted by AC Nielson, a research agency reveals that FMCG industry loses around 2500 crores annually to counterfeits and pass-off products. According to Ashok Chhabra, Executive Director, P&G the fake products are affecting the sales of leading brands to the extent of 20 to 30 percent. Another recent survey conducted by AC Nielson reveals that top brands in India are estimated to lose up to 30 percent of their business to fake products. Besides the loss of revenue, the leading companies also face the loss in the damage to brand image and brand loyalty of consumers.

PROMOTION STRATEGIESVarious media vehicles may be classified into: Mass media (Radio, Cinema, Press and 1V), Localmedia (Haats and Me/as, Wall painting! Leaflets, Video vans, Folk media, Animal parade andTransit media). Personalised media includes direct communication, dealers, sales persons and researches.

Designing a right promotion strategy is the crux of the problem. The message can be disseminated with the right choice of media -mix (Personal and non-personal) aided by sales promotion and direct marketing efforts.

1) Rural consumer environment must be understood before the creation of ad.

2) Rural mindset accepts the brands easily, which are close to their culture. This point must be reflected in ad for rural markets.

3) Sponsorships to the Melas and Hats must be considered in a significant manner.

4) Selection of brand ambassadors, lyrics must not be ignored in this regard. They have a special liking for folk culture so this can be taken in an effective utilization of brand promotions.

MARKETERS IN ACTIONThe strategies adopted by different marketers are: a) classification by positioning, b) offering "value for money" proposition, c) reviving category magic, d) finding new category values e)forcing inter-category competition and f} positioning for different segments.What kinds of themes are attractive to rural consumers?Need category : Quality of life messages -nutritious, healthy.

Problem category : Convenience, economy I hassle free, easy to maintain, lifetimecompanion, a friend in need and the way to prosperity.

Desire category : Independence, status, luxury etc.

Ideal category : Communal harmony, social cohesiveness, religious conformity,national integration and peace

Distribution strategies

The distribution strategies that are specifically designed for rural areas are: through co-operative societies, public distribution system, multi-purpose distribution centres, distribution up to feeder markets/mandi towns shanties/hat/jathras/melas, agricultural input dealers etc.

Experience has shown that the cooperatives have played a useful role in improving the marketing services in the regulated markets. these societies command only a small share of the total markets and do not present any challenge to the private trade at inmost places.

]The Gujarat Cotton Cooperative Marketing Societies set a good example of vertically integrated markets. The cooperative marketing institutions have to introduce scale economies in their marketing operation and provide efficient and comparable services to the customers in competition with the private trade. Cooperative institutions would do better if the state level marketing federations enter into multilevel activities to improve the turnover of their business. The non-govemmental organizations can anchor a key role in conscientizing the rural people to form into cooperatives highlighting the possible benefits without being exploited.

In rural India, the major road-blocks related to distribution and channel management are identified as: -•Lack of retail infrastructureLack of proper warehousing facilityTransportation problemLarge and scattered market

Lack of Retail InfrastructureAvailability of retail infrastructure is directly related to the size of the village. Thus, many small villages may not even have a shop from which products can be made available. According to an Indian Market Research Bureau (IMPB) Study, 60,000 villages in India did not have a retail outlet of any kind. Thus, it is very difficult for marketers to make their product available to rural consumers. Also rural India is having 3 million retail outlets which are located in 6.3 lakh villages. Thus, marketers find it very difficult to make their products available in those retail outlets spread over such a vast area.

Again, the average sale in these outlets is only Rs. 5000 and that too mostly on credit. Rural people also prefer to buy from haats or melas as compared to retail shops where there is less chance of bargaining

• Some problems that are faced by rural retailers are: -• He has to deal in a large number of products which results in large inventory

and high inventory costs.• He cannot charge higher mark-up as the consumers can not afford to pay

higher prices.• Major purchases are done by rural consumers on credit basis.• Retailers have to travel frequently to feeder town / mandis to collect products.

Due to this additional cost of traveling, their total expenditure towards collecting product increases.

• In rural market, the wholesalers play an important role in distribution structure. Wholesalers are based in feeder town / mandis. They pick up their stocks from nearest company stock point. Rural people and retailers purchase products from these wholesalers when they visit the mandis. The wholesalers usually operate on a cash and carry basis and at a very thin margin and manage a return on investment only by achieving a high inventory turnover. Though the wholesale channel is a low cost channel, there are certain problems with this model. Marketers have lack of control over their operation.

Distribution up to Feeder Towns / MandisCompanies can cater to the needs of rural consumers by making their products available upto feeder towns or mandis. Feeder markets or mandis provide excellent scope for distribution of products like consumer durables, clothes, kitchen equipment, agri-inputs and tools. The rural consumers visit these towns at regular intervals not only for selling their agricultural produce but also to purchase clothes, jewelry, hardware, radio, and other consumer durable products.

HaatsAlong with permanent retail outlets, haats can also be utilised to make the products available to rural consumers. Haats are held on a particular day of every week. Typically, an average haat has 300 stalls. A haat usually serves around 5000 visitors. So if we consider average population of an Indian village to be 1000, then one haat caters to the needs of 5 villages. There are almost 47,000 haats in India. The sale per haat per day is Rs. 2.25 Lakh (approximately) and average sale per outlet is Rs. 900 (approximately).

• A large number of retailers also buy products from haats for their village stores. About 90% of sales on haats are on cash basis. The participation fees at haats are a flat Re. 1 to Rs. 5 per stall which is very low.

• These figures show that targeting haats for distribution purpose can prove to be beneficial for companies. Companies can tap the rural consumers for clothes, cosmetics, FMCGs, kitchen equipments and agricultural tools, health check ups at these haats. Leading manufacturers are introducing sachets of tea, blues and washing powders in these haats to create a demand and then meet the demand in affordable packages.

• Melas• Over 25,000 melas are held every year all over the country. Out

of these, 5000 are commercial melas, 2,000 are cultural melas and 18,000 religious melas. The following facts regarding melas will help us to understand their importance to marketers: -

• Number of visitors per mela is approximately 7.5 lakh.• On an average, 850 outlets are set-up in every mela.• Average sale per day in a mela is Rs. 25 Lakh.• Visitor turn-out in a mela is very high.• A large part of the visitors in these melas are women and

children, which is significant because rural women are restricted to leave village often.

• Melas are generally used to sell durables, high-priced items and new products launched.

• Examples of effective use of melas by marketers are: -

• Post & Telegraph Department InfrastructureLet us highlight few examples of companies who have already taken the initiative to use postal network for rural marketing: - •Finance companies like SBI Mutual Fund and ICICI have tied-up with postal department enabling investors to make their investments through Post Offices. ICICI is even planning to set-up ATM counters in Post Offices.•Selected Post Offices in Faizabad, Kanpur and Sultanpur in Uttar Pradesh are selling Assam Tea.

Kolkata-based Emami has entered into a distribution arrangement with Department of Post to sell its products through Post Offices. They are currently doing a pilot project to sell the products in Maharastra region. After the success of this partnership, they will tie-up with Department of Post to use its Pan-India distribution network.Similar deals are in process between Department of Post and Kodak to sell the camera and film rolls through Post offices.

• Mode of Operation• Nicholas Piramal (NPIL) It has tied up with Sorento

Healthcare Communications for an Epilepsy Outreach Programme launched under the banner 'Reach More, Teach More'.

• Strepsils lozenges It builds brand awareness in villages through billboards at bus stands, branding buses, hoardings, promotions at village haats, jatras and melas, road shows etc.

• Ajanta Pharma It uses stalls at fairs, slides in cinema halls, moving vans. It also educates tertiary health workers, who work in smaller villages.

• Eli Lilly It works with the Self-Employed Women's Association (SEWA) in Ahmedabad to educate people on tuberculosis and encourage them to seek treatment

• RW promotions play an important role, by conducting medical camps which help in increasing the number of prescriptions of the brand for the next four weeks once the van leaves the town.

• It also helps the pharma client build awareness about the ailment for which the drug is being promoted. No other medium can provide such a mass reach like these medical camps

• It has already conducted a few medical camps including GlaxoSmithKline's Parivar Swasthya Parikshan Shibir, in Uttar Pradesh, to create awareness for calcium intake in body through a basket of drugs mainly Osteo Calcium along with Zentel, Zevit and Becadexamin. This in return added 9,000 new prescriptions which in turn resulted in almost about 95 percent of it getting converted into sales

Hame Jeetna Hai’ in Uttar Pradesh by Piramal Healthcare was an 18 month long activity, focusing on creating general awareness for epileptic patients through free medical check-up camps with readily available medicines like Garoin and Gardenal, which was prescribed by the doctor when required. This helped them in generating additional prescriptions of about 10,000 patients

An average medical camp campaign over a 30 day route cycle would costs between Rs 4.5-5 lakh depending upon the drug being promoted. Campaigns with Wyeth Pharma and IPCA labs are kick starting within the next two weeks and big names like Ranbaxy, Unichem Pharma, Fulford and Biological E are few pharma companies who have expressed interest in this innovative medium of promoting their brands, informs Srinivasan.

The value chain- Farm to Factory gate

The Model 'e-Choupal' makes use of the physical transmission capabilities of current intermediaries - aggregation, logistics, counter-party risk and bridge financing -while disintermediating them from the chain of information flow and market signals.

village internet kiosks managed by farmers - called sanchalaks - themselves, enable the agricultural community access ready information in their local language on the weather & market prices, disseminate knowledge on scientific farm practices & risk management, facilitate the sale of farm inputs and purchase farm produce from the farmers' doorsteps Real-time information and customised knowledge provided by 'e-Choupal' enhance the ability of farmers to take decisions and align their farm output with market demand and secure quality & productivity. The

While the farmers benefit through enhanced farm productivity and higher farm gate prices, ITC benefits from the lower net cost of procurement (despite offering better prices to the farmer) having eliminated costs in the supply chain that do not add value.

e choupal a new business model

Launched in June 2000, 'e-Choupal', has already become the largest initiative among all Internet-based interventions in rural India. (IBD International Business divisions)

'e-Choupal' services today reach out to over 4 million farmers growing a range of crops - soyabean, coffee, wheat, rice, pulses, shrimp – in over 40,000 villages through 6500 kiosks across ten states (Madhya Pradesh, Haryana, Uttarakhand, Karnataka, Andhra Pradesh, Uttar Pradesh, Rajasthan, Maharashtra, Kerala and Tamil Nadu

The problems encountered while setting up and managing these 'e-Choupals' are primarily of infrastructural inadequacies, including power supply, telecom connectivity and bandwidth, apart from the challenge of imparting skills to the first time internet users in remote and inaccessible areas of rural India.

e-choupal is, thus, distributed transaction platform that brings together sellers, buyersalong with information and service providers. e-choupal is a model with a number ofnon-conventional characteristics namely:· customer centric· capable of being used for many commodities and multiple transactions· easily scalable once it is verified· uses local talent and local people and develops local leaders· can be extended to local as well as global procurers· stimulates local entrepreneurs to extend their innovativeness· uses all the existing institutions and legal frameworks and· many others can join the market as transaction time is low

Grameen Danone Model1 Project started in 2005 in Bangladesh between DANONE grp ( Europe) and Grameen

bank ( Mohd Yunus , father of Micro credit)2 Bangladesh is in the worlds poorest countries, 72.9% of population is rural ,

Population 160 million . 40% of the population is below poverty line.3 One out of two in Bangladesh is suffering from malnutrition and lack of Micro

nutrients

4 Mission : To bring health through nutrition at affordable prices.

Shokti +, a fortified yoghurt to meet nutritional needs of Bangladesh( Product Grameen Danone)

Shokti + is a yogurt made with cow's milk, date molasses and sugar. It is a natural source of calcium and protein, which are essential for healthy growth and bones. It also contains live fermenting cultures that help to reduce the severity and duration ofdiarrhea.

Shokti+ is also enriched with micronut rients. Asingle 60g cup provides 30% of a child's daily requirements of vitamin A, iron, zinc and iodine.Price per cup of Shokt i+ has been designed for the poorest families to be able to afford it regularly.Price is 6 BDT for 60g.

Distribution was mainly done through small shopsin Bogra town and rural sales ladies that sold door to-door. Promotion was done through visits to Grameen Bank centers.

In September 2007, a full time Executive Director,Mr Wahidun Nabi, joined the team. Number of sales ladies went from 29 to 270 (in march 08).Sales expanded quickly to reach 350 000 cups sold in a month

Initial Shokt i Doi recipe was not sweet enough for Bangladeshi taste. Therefore decision was made to upgrade the level of sweetness, but it still remained lower than local yogurt product .

Raw material cost s rose sharply. Milk price jumped by 100 percent . Grameen DANONE boardmade a tough decision to remain economically sustainable. It increased the price by 60%

The price of 60g cup went from 5tk to 8tk. Consumer demand immediately collapsed. In the process sales ladies’ network disintegrated completely. June 08,

Grameen DANONE Foods Ltd (GDFL) launched a new formula maintaining 30% RDA in micronut rients in a smaller 60g cup, bringing down price to 6tk. With mini-promot ional events and school nut rit ion programs in the villages,

GDFL started to recover the market . A small effect ive professional ladies’ network (35 ladiesworking 17 days / month and selling 50 cups / day)was built up.

Increase in production was necessary to decrease the per unit fixed cost .Dhaka price was set to get a margin to offset the loss in rural market . 80gr cup was priced at 12 tk for Dhaka.

To support rural sales in 2009, 1270 proximity mini-events took place in villages. School nutrition programs were also organized in rural and urban schools reaching 80 000 pupils among B-C-D social economic classes.

In January 2010, ladies’ network expanded to 650 and 22% of GDFL sales in volume.

GDFL bumpy learning curveNew record in April:170 tons or 95 000 units per day

CUPS SOLDRural 2007 2008 2009 B’10Sales in kg 78,1 149,6 701, 1500Cups sold / day 3 414 6 532 35 319 86 250

Price from 5to 8 takas

60g-6tk

Newareas

Newmango+launchDhaka

Rural relaunch

400 ladies 2000 urban shops

900 ladies12 000 shops

0

Feb 07 April 10

3000000

A Sustainable Rural Health Care Delivery ModelThis new approach focuses on service delivery where the major asset is the collection of service delivery capabilities rather than fixed infrastructure in a local market.

stewardship principle: appropriate care in the appropriate location, through the appropriate channel. A similar concept allowed Wal-Mart to fully transform theretail industry.

Rural Health Care Delivery Model

Local assets Based at site

District!Services(distributedacross!network)

Regional!Assets(partnered)

SUSTAINABLE UNSUSTAINABLE SUSTAINABLE

Local Services

Ambulatory Services:

screening, prevention anddiagnostics, with no acute capabilities

Basic Hospital Full-Service Hospital

basic hospitals offer ambulatory and inpatientservices focused on diagnostic and non-emergenttreatment, medical inpatient and rehabilitationrecovery.

These markets have traditionallydefined critical access hospitals.

District Servicesappropriate care in the appropriate location, through the appropriate channel.

district services must first focus on major population needs, which in most rural markets are the three leading causes of death: cancer, heart disease and stroke.

Regional ServicesServices provided through partnerships with expert providers, where the patient travels to the site for care and consultation with subspecialists

Role and Scope of Operational Components

Rural channels of Communication

Rural Companies in advertisingOgilvy Activation AnugrahMadisonMARTLinterlandImpactCommunicationsRuralRelationsRural Eight