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Rural marketing - FMCG
- 1. FMCG SECTOR IN RURALINDIA
- 2. INTRODUCTION TO RURAL MARKETING •The term “Rural Marketing” used to be an umbrella term for the people who dealt with rural people in one way or another. It got a separate meaning and importance after the economic revolution in India after 1990. • Process of developing, pricing, promoting and distributing rural specific goods and services leading to satisfaction of rural customers’ needs and wants.
- 3. WHAT ARE RURALAREAS? • In general, a rural area is a geographic area that is located outside towns and cities. • As per census, any habitation with a population density of less than 400 sq. km. is known as rural. • The definition of ‘rural’ differ from country to country based on experience. • It is difficult to identify rural places is expected to be, it is hard to agree on a common definition of a rural area for statistical purposes. • Therefore, there is no standard international definition of rural.
- 4. IMPORTANCE OF RURALMARKETING LARGE MARKET LESS EXPENSIVE BRINGS SOCIO- ECONOMIC CHANGES INCREASING COMPETITION IN URBAN INDIA
- 5. MARKETING PROCESS INRURAL AREAS URBAN TO RURAL RURAL TO URBAN RURAL TO RURAL • Major part of rural marketing • Includes transactions of urban marketers who sell their goods and services in rural areas • Pesticides, fertilizers, FMCG products, tractors, bicycles, consumer durables, etc. • Basically, falls under agricultural marketing • A rural producer seeks to sell his produce in urban market • Seeds, fruits and vegetables, forest produce, spices, milk and dairy products, etc. • Includes the activities that take place between two villages in close proximity to each other • Agricultural tools, handicrafts, dress materials, bullock carts, etc.
- 6. BENEFITS OF RURALMARKETING • Increased size of rural market. • Increased employment. • Better living conditions for rural people. • Contribution to national income. • Increase in farm income.
- 7. PROBLEMS FACED INRURAL MARKETING Deprived people and deprived market. Lack of communication facilities. Lack of transport facilities. Low per capita income. Low levels of literacy. Warehousing problems.
- 8. INDIAN FMCG COMPANIESWORKING TOWARDS RURAL DEVELOPMENT
- 9. PIDILITE’S STEPS TOWARDSRURAL DEVELOPMENT • The company has made arrangements/ signed MOUs with various institutes and expert organizations for providing technical inputs to the farmers. • For the important crops of the region such as cotton, onion, groundnut, coconut, etc., these tie-ups have helped the farmers to adopt the modern package of practices for working towards reducing input costs and increasing yield of these crops. • They have also supported activities for conservation of water and efficient usage of water-soluble fertilizers.
- 10. ITC’S E-CHOUPAL • Choupalis a Hindi word which means “village meeting place”. • Launched in 2000. • It is a unique web-based initiative taken by ITC Ltd. offering farmers required information, products and services they need. • Farmers can directly negotiate the sale of their products with the company. • ITC has provided computers and internet access in several rural regions of the country. • Since the introduction of this, farmers have seen a rise in their income levels because of increase in yields.
- 11. AMUL’S RURAL SANITATIONCAMPAIGN • Amul dairy has launched a novel scheme for total rural sanitization and set a target for itself whereby not a single milk producer will attend to defecate in the open. • The dairy with the support of District Rural Development Agency (DRDA) will provide interest-free loans to its milk producers in Anand and Kheda districts to set up pakka toilet blocks, which will not only help women milk producers avoid embarrassment but also ensure hygiene. • The mission is not just about brining a cultural change by imbibing good among milk producers but also targeted towards encouraging hygienic practices in the milk supply chain.
- 12. DABUR’S SWALAMBHAN • In 2015India’s leading consumer products maker Dabur India Ltd. announced the launch of a mega initiative aimed at improving the employability of local youth from villages by providing free technical training and skill development. • It is being run in association with the Rural Development and Self-Employment Training Institute (RUDSETI). • It will provide training to rural youth on three key areas of sales, merchandising, and promotion. • It will also seek to provide guaranteed employment to these youth post- completion of their training.
- 13. HUL’S KHUSHIYON KITOLI • Launched in three Indian states – Uttar Pradesh, Andhra Pradesh and Maharashtra. • Main objective is to reach out to media dark villages. • Aims at changing attitudes of rural mass to inculcate good personal hygiene. • Helps to create a cost-efficient rural activation module. • Other unique characteristic of this initiative is the effective use of popular traditional symbols with technology to create more acceptance.
- 14. 5 P’s OFMARKETING MIX
- 15. 1.) Product • Developingrelevant products to meet the specific needs and wants of rural consumers will exercise the minds of marketers. • Products must be modified or built to suit the lifestyle and requirements of the people. 2.) Price • Price refers to the pricing strategy for products and services and how it will affect customers. Pricing decisions do not include just the selling price, but also discounts, payment arrangements, credit terms, and any price-matching services offered. • The villagers/ people belonging to rural places are very price sensitive by nature due to the limited resources available and low income.
- 16. 3.) Promotion • Promotionrefers to the activities that make the business more known to consumers. It includes items such as sponsorships, advertising, and public relations activities. • Since promotion costs can be substantial, it is essential to conduct a break-even analysis when making promotion decisions. It is important to understand the value of a customer and whether it is worth conducting promotions to acquire them. 4.) Place • Place refers to where the product/service of the business is seen, made, sold, or distributed. In essence, place decisions are associated with distribution channels and ways of getting the product to targeted key customers. • It is important to consider how accessible the product or service is and ensure that customers can easily find you. The product or service must be available to customers at the right time, at the right place, and in the right quantity. • For example, a business may want to provide their products over an e-commerce site, at a retail store, or through a third-party distributor.
- 17. 5.) People • Peoplerefer to the staff, salespeople, and those who work for the business. People decisions are usually centered around customer service – how do you want your employees to be perceived by customers?
- 18. FUTURE OF FMCG’SIN RURAL INDIA • Leading FMCG players such as ITC, Godrej, Dabur, Emami and Marico are witnessing robust sales in rural and semi-urban markets, bolstering hopes of a speedy recovery from the impact of the COVID- 19 crisis. • The companies are also reporting a spike in sales of health and wellness, hygiene and immunity- boosting products in these markets, apart from the food products category. • ITC has launched its hand sanitizer pack priced at just 50 paise to target these markets. • Marico aims to drive direct distribution and value to consumers, as they will be the key growth drivers in rural markets, while continuing to focus on increasing market share and maintaining volume growth which is independent of category growth. • Nielsen expects India’s rural FMCG market to reach a size of US$ 100 billion by 2025. Another report by McKinsey Global Institute forecasts the annual real income per household in rural India to rise to 3.6 per cent 2025, from 2.8 per cent in the last 20 years.
- 19. • The ruralFMCG market in India is expected to grow to US$ 220 billion by 2025 from US$ 23.6 billion in FY18. • the organised sector growth is expected to rise with increased level of brand consciousness, augmented by the growth in modern retail. • Internet has contributed in a big way, facilitating a cheaper and more convenient mode to increase a company’s reach. It is estimated that 40% of all FMCG consumption in India will be made online by 2020. • The online FMCG market is forecast to reach US$ 45 billion in 2020 from US$ 20 billion in 2017.