Rural Marketing Strategies
In simple terms, a product is anything that satisfies human want (customers) and includes product quality, features, benefits, design, style, colour, brand, services, and warranties. Product is something like the heart in the human body. Product is the most important element of marketing-mix.
The product strategies used by companies in rural markets are as follows:
Product Strategy # (a) Sturdy Products:
Most of the rural consumers believe that heavier the item, higher the power and durability. Examples- (1) Bullet motor cycle continues to be popular in villages due its ruggedness. Royal Infield sells about 65 per cent of two wheelers in semi-urban and rural areas. (2) Ambassador car continues to be popular in rural areas due to sturdiness, roomier rear seat and luggage space.
Product Strategy # (b) Designing Products:
The companies can come out with new products or promote existing products to suit field conditions in rural areas. Examples- (1) LG Electronics came out with a unique product for rural market. It launched ‘Sampoorna’, India’s first TV with a Devanagari script on screen display. The word Sampoorna meaning ‘Wholesome’ cuts across all linguistic barrier in our country. It is affordable and aimed at semi-urban and rural areas. It can withstand power fluctuations and has sold over one lakh 20″ TV in towns with a population of over 10,000. (2) Godrej has introduced a refrigerator Chotukool for rural areas. (3) Chota coke in 200 ml packing priced at Rs.5/- has increased the sale of coca cola in rural market.
Product Strategy # (c) Small unit packing have been used for many consumer products. Examples- (1) Tiger brand of biscuit is available at rupee one for a packet of four biscuits. (2) Ponds has gained market share over the past few years by focusing on rural market and it has introduced 20 gm talcum power. (3) Cavin Kare studied rural buyer behaviour and introduced Chik shampoo in small sachet of 4 ml at low price of 50 paise and (4) Rasna is now available in Sachet pack priced at Rs.1 each and one sachet will make two glasses of soft drink. The product is available in a variety of flavours such as mango, lemon, etc.
Product Strategy # (d) Utility Products:
The rural people are concerned with the utility of the items rather than appearance/show. Examples- (a) Philips has introduced Free Power Radio priced at Rs.995/- for the first time in India. The radio requires no external batteries or electricity for operation. A one-minute winding of the lever runs the radio for about 30 minutes, (b) HMT watches are popular for utility value.
Product Strategy # (e) Branding:
Brand is a name, word, symbol, design or a picture or a combination of them used to identify the product and distinguish it from that of the competitions. A brand name not only represents the product but also conveys the quality of the product.
(1) Tata Steel has branded its galvanised corrugated sheets as Tata Shakthi, a sign of power. Similarly the galvanised corrugated sheet produced by Ispat Industries has been named as Ispat Kavach .The brand name conveys strength, durability and toughness.
(2) Some of the brands that have created a lasting impact on rural consumers are Billy wali cell (Eveready batteries- battery with cat as symbol), Lal saboon (Lifebuoy). Ladkawala paint (Cattu-Asiant paints Mascot), Nirma girl (Nirma detergent) Rishi (Dabur Chawanaprash), Parle baby (Parle biscuits) and Coconut tree (Parachute), Amul (From Sanskrit word ‘Amoolya’ Meaning Priceless). Peedhari Balm (Zandu Balm), Desh Ka Namak (Tata Salt).
Price refers to exchange value of the product and includes- (a) Maximum retail price, (b) Discounts, (c) Credit, (d) Terms of delivery and (e) Maintenance charges. Rural retailers generally require credit and, therefore, product pricing has to be adjusted to meet their requirements.
Pricing Strategy # (a) Low Price:
A rural customer is price-sensitive mainly because of his relatively low level of income and unit price of a product will have an impact on sales. Pricing the product at a lower price really attracts rural population for trying the products. Though rural incomes have grown in the past decade, the money earned by the average rural consumer is still much lower than that of his urban counterpart.
A large part of the income is spent on the basic necessities, leaving a smaller portion for other consumer goods. Examples- (1) Bharath Petroleum has introduced five kg gas cylinders to reduce initial deposit and refill cost for rural consumers. The deposit for 5 kg cylinder is Rs.350/- against Rs.700/- for 14 kg cylinder and refill cost is Rs.90/- against Rs.250/- for 14 kg cylinders. (2) Small unit packs of shampoo, hair oil, toothpaste, biscuits and bathing soap.
Pricing Strategy # (b) No-Frills Product:
The production cost can be lowered by using less sophistication and rather concentrating on sturdiness and utility of the product. Examples- 1. Maharaja Appliances Ltd., sells a sturdy Bonus washing machine, without a drier for rural market at Rs.2,990/-. 2. The rural markets operate on a price-value proposition. LC Electronics has knocked off some of the frills in the products.
The idea is to give features that are absolutely indispensable. The rural consumer does not require Colden Eye feature and therefore base models do not have this feature. Again not all consumers need 200 channels and therefore they have provided 100 channels in the base model. Everybody may not require a sound output of 350 watts and therefore they have given an output of 200 watts in base sets. The rural consumer is value conscious. He will buy the product that gives value for money.
Pricing Strategy # (c) Refill/Reusable Packaging:
By giving refill packaging marketers can add value to the pricing of the product. Examples- Bourn vita available in refill pack and detergents made available in reusable packaging.
Pricing Strategy # (d) Credit Facilities:
Success or failure of crop depends upon climatic conditions. Favourable conditions give bumper yields and unfavourable conditions result in very low yields, and, therefore, rural income is seasonal in nature. The farmer requires credit for meeting cultivation expenses as well as running the family between marketing of produce and the harvest of next crop.
He avails credit facilities from the village merchant for buying household necessities. The rural retailer in turn requires credit facilities from the distributors of consumer goods. Many companies extend credit to the village retailers to persuade them to stock the company’s products and push it in the market.
The decision to extend credit is based on the volume of business and credit worthiness of the retailers. The credit period varies between 15-30 days in the case of fast-moving consumer goods.
Pricing Strategy # (e) Discounts:
Discounts are offered to motivate the retailers to sell more of the companies’ products. A discount of about 10 per cent is given on the maximum retail price in the case of fast-moving consumer goods. Many Companies offer attractive additional discounts to motivate the retailer to stock the products during off-season.
Pricing Strategy # (f) Promotional Schemes:
Normally farmers purchase consumer durable items after the harvest of crops. Similarly, Diwali, Pongal, Onam, Dassera, Id and Christmas are the festivals for buying household articles. Special promotion schemes such as new product introduction scheme, festival offer by way of special discounts, exchange offer i.e., taking back used consumer durables are aggressively promoted during harvesting and festival seasons in rural areas for increasing sales of the products.
Pricing Strategy # (g) Value Engineering:
This is an internationally used technique, which helps organisations not only lower costs but enhance value to customer. The concept has been implemented by a few firms in tapping the rural markets. Example- Nirma detergent powder, over a period of ten years has become the largest selling brand in rural India. The success of Nirma is due to affordable price, medium quality, availability at village shops and use of rural specific mass media.
- Place (Distribution):
Place refers to distribution of the product and includes distribution channel, area coverage, channel remuneration, warehousing, inventories, banking and transportation.