Product Strategy For Rural Markets - Session 5

RURAL MARKET PRODUCT STRATEGY
 Launched in 2005
 First Four wheel Mini Truck
 New category in one tonne category of
commercial vehicles
 Useful for small time trasporter
 Poultry owners, laundry men, vegetable vendors
 Become the single largest brand of Tata motors
within the 18 months of launch
 LG Sampoorna – launched in 1998

 Onscreen display in regional languages like Hindi,
Tamil, Bengali.
 Sold 1 lakh TV within first year in rural area
 LPG penetration is as high as 74% in urban

but only 15% in rural areas
 HPCL 5-kg gas cylinder which can be used
for cooking and lighting
Eveready found that their plastic
torches which had a strong sales
in urban markets was not doing
well in rural areas. It was later
that they realized that farmers
preferred heavy brass torches
because of the scrap value that
the metal/alloy fetches
Philips came with an innovative radio that

neither consumed power through battery nor
electricity. It used a one-minute winding spring
(like mechanical watches) which would give
enough power for 30 minutes listening time.
Since the average radio costs Rs.1000 worth

of batteries per year, Philips radio would bring
savings too.
PRODUCT STRATEGY FOR RURAL MARKETS
LEARNING OUTCOME
Understand the concepts, levels and classification of products in rural markets
Discuss relevant product decisions and product strategies for the rural markets
Build and manage brands in the rural markets
Understand the challenge of fakes and counterfeits
Understand the role and elements of packaging products for rural markets
Recognize the role and importance of after sales service in rural
Describe new product development for rural consumers

WHAT IS PRODUCT?
Products include physical goods, services, places, ideas,

persons, organizations, etc.
• Refrigerators, TV, AC, CAR
• Airline, Hotels, Tourism, Telecom, Restaurant
• Cities, state, region, Commercial banks, Factories
• Personal Manager, PR agency
• Universities, Museums, NGO
4PS 4AS
4Ps are 4As are the
still the challenges
Rural marketers need tools
to deliver value to
consumers by Product Acceptability
developing suitable
products at a price
they are willing to pay Price Affordability
and at a place where
they can conveniently
purchase the Place Availability
products.
Promotion Awareness
Product Levels
CORE BENEFIT
BASIC PRODUCT
EXPECTED PRODUCT
AUGMENTED PRODUCT
POTENTIAL PRODUCT
5 LEVELS OF PRODUCTS
Core Benefit (eg. Connectivity, Being in touch)
Basic Product (eg. Mobile)
Expected Product - (Voice clarity, Good Battery Life, Ease of Operation, Durability)
Augmented Product- meet desires beyond expectations. Can be done only by

studying the physical environment of consumer (In built radio, camera, flashlight,
additional memory, localised language display mode)
Potential Product- finding new ways to satisfy consumers tomorrow, i.e. the
augmentation and transformation that the product might ultimately go tomorrow
( E.g. Mobile phone charged with Solar light)
CLASSIFICATION OF PRODUCTS
Rural Products
While rural product categories
do not differ much from
those urban, there are 2
separate ones: FMCGs
Agri goods (agri inputs like

fertilizers, pesticides etc.) Durables
Agri implements (tractors,

threshers, harvesters, pump
Agri Goods
sets etc.)
Services
FAST MOVING CONSUMER Product Basket
GOODS
Toilet soap Biscuits
Consists of all non- durable goods like Washing cake Tea
toiletries, cosmetics, foods, Tooth powder Beverage
beverages, footwear etc. These are
consumed quickly and purchased Talcum Cooking
frequently. powder oil
Hair oil Vanaspati
Major players in this category include Shampoo Bulb
HUL, Dabur, Marico, Colgate- Palmolive, Face cream Tube
Nirma, CavinKare, Godrej
Lipstick Footwear
Nail polish Cigarette
FAST MOVING CONSUMER GOODS
Products include toiletries, cosmetics, foods and beverages, and footwear
Major players in rural areas are HUL, Dabur, Marico, Colgate Palmolive, Nirma, CavinKare and
Godrej
Estimated size INR 1,350 billion
Accounts for more than 50% of total consumption

Household Penetration of
FMCG Products in Rural India
FAST-MOVING CONSUMER GOODS
CONSUMER DURABLES
Group1 Group2 Group3
This group includes home appliances, (<Rs. (Rs. 1K- (<Rs.
watches, automobiles, furniture etc. 1000) 6K) 6000)
Rural consumers purchase from nearby
towns while urban consumers purchase Pressure TV Color TV
from city dealers. Cooker (black
&white)
Pressure Geyser VCR/
The major players are Usha, Bajaj, Philips,
Titan, Godrej,Videocon, Onida, Salora, pan VCD
Hero Cycles, Hero Honda, Mahindra, Tata. Bicycle Sewing Scooter
m/c
Watch Mixer/ Motor
grinder cycle
Can be divided into 3 price ranges- low,
medium, high-priced products. Electric Stereo Fridge
iron
CONSUMER DURABLES
Household Penetration of Select Durables in Rural India
Accounts for
more than 50% of
total consumption
AGRICULTURAL GOODS
These are goods used for farm activities. These include

inputs like seeds, fertilizers, pesticides, insecticides
and implements like tractors, tillers, threshers.
Major players include Rallis India, Monsanto, DCM Shriram,

Chambal Fertilizers, IFFCO, Mahindra, Eicher, Escorts.
SERVICES
This includes telecommunication, transport,

healthcare, banking, insurance and
education.
Emerging services include ITES, Internet, Mobile

phone services.
The major players include LIC, SBI, SBNL. There

are also new entrants which include Reliance
Infocomm, ITC e- Choupal, ICICI Prudential Life
Insurance, IFFCO-TOKIO General Insurance etc.
PRODUCT DECISIONS AND STRATEGIES
Individual Product line Product

product and mix lifecycle
decisions decisions strategies
Product attributes, branding,

packaging, labelling and product
support services.
INDIVIDUAL PRODUCT DECISIONS
Design and
Quality Features
style
• Rural people • Based on • Take into
set their own perceived account
emotional value add and environmental
specifications cost addition conditions,
for judgement functionality
on quality and ease of
operation
Extra add –on of a Pressure cooker Intel Computers

Durability, efficiency, product that add values in HUL Dishwash bar
economy and reliability the eyes of consumer Metal torches vs plastic torches
PRODUCT LINE AND MIX DECISIONS
Product Line Product Mix
• A group of closely • Set of all product

related products lines and items
priced within a offered by a company
certain range • Generally simple in
• May consist of rural due to
different brands or a limitations on
single family brand investment and
dominance of retailer
PRODUCT LINE AND MIX DECISIONS
Product Mix and Product Line Length for Hindustan Unilever Limited
PRODUCT LIFE CYCLE
PLC stages in rural India are usually much

longer than urban markets.
Companies struggle to push growth of their

products through consumer education and
adopting alternate channels to reach deeper to
grow the market.
HUL, ITC and Eveready having tasted

success by introducing products at the
maturity stage have now entered new
segments and gone for brand extension.
BRAND BUILDING IN RURAL INDIA
Rural Lifestyle
Brand name: should facilitate easy brand recall through color, visual or
numeric association. Thus names like Nirma, Sampoorna, Utsav were chosen
by those firms.
Creating & building brand identity: all promotions should match the
identity you wish to create. Thus Tata Steel branded its sheets as Tata
Shaktee to create an identity of strength, durability, toughness.
Britannia Tiger biscuits associates an identity with smart, active and sharp
children.
Mahindra maintained its image through the Bhumiputra series of

tractors and Sarpanch series both of which matched the tough,
hardworking image the company wanted associations with.
PRODUCT BRANDING IN RURAL MARKETS
Building brands in rural markets

• Developing a brand name
• Creating a brand identity
• Building a brand image
Brand loyalty versus brand stickiness

• Rural consumers prefer tried and tested brands
• They are more “brand sticky” rather than brand loyal
Escort Village
• “Word of Mouth” very important in rural Mahindra Village
• “Brand stickiness” higher amongst older people
• Brands need to cater to local tastes to increase “stickiness”
FAKE BRANDS
FAKE BRANDS
FAKE BRANDS
FAKE BRANDS
FAKE BRANDS
Rampant in rural due to low penetration and poor availability of branded products
Fake market can be categorized as:

• Look-alikes
• Spell-alikes
• Duplicates
Strategies to counter fakes
• Upgraded packaging
• Use of sales force
• Raids and legal recourse (with resultant problems)
• Deeper penetration (the long-term solution)
PACKAGING FOR RURAL MARKETS
Special focus because of:

• Poor road conditions
• Difficulties of safe storage
• Poor facilities such as erratic power supply
A product for rural market should:
• Have a longer shelf life than urban
• Be able to withstand extreme weather conditions
• Be able to withstand problems of dusty roads
• Have alternate storage arrangements
PACKAGING FOR RURAL MARKETS
Pack size and Packaging

Packaging material
convenience aesthetics
• Shift to plastic • Small unit packs • Rural consumers
which is and sachets appreciate
waterproof, addresses the brighter colours
sunlight resistant issue of • Distinct
and light affordability lettering, use of
• Sachet phase local languages
followed by on the pack
coinage pack and • Use of images or
see through symbols that
packs convey product
benefits
PRODUCT WARRANTY AND AFTER-SALES SERVICE
Rural consumers attach great value to warranty
Service centres not easily accessible to rural consumers
Organization of service camps essential for bridging this gap
Need to extend service to smaller towns
34
NEW PRODUCT DEVELOPMENT IN RURAL MARKETS
Idea generation
Understand rural environment through rural immersion programmes
Concept testing
Needs to be done in different regions due to heterogeneity
Product development
Renault
Reverse innovation or frugal engineering 2006
Market testing
Costs insignificant compared to total project costs
SONAM WANGCHUK FRUGAL INNOVATION
SONAM WANGCHUK FRUGAL INNOVATION

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RURAL MARKET PRODUCT STRATEGY

 LG Sampoorna – launched in 1998

 LPG penetration is as high as 74% in urban

Philips came with an innovative radio that

Since the average radio costs Rs.1000 worth

Build and manage brands in the rural markets

Understand the challenge of fakes and counterfeits

Recognize the role and importance of after sales service in rural

Describe new product development for rural consumers

Products include physical goods, services, places, ideas,

Core Benefit (eg. Connectivity, Being in touch)

Basic Product (eg. Mobile)

Augmented Product- meet desires beyond expectations. Can be done only by

Agri goods (agri inputs like

Agri implements (tractors,

Products include toiletries, cosmetics, foods and beverages, and footwear

Estimated size INR 1,350 billion

Accounts for more than 50% of total consumption

These are goods used for farm activities. These include

Major players include Rallis India, Monsanto, DCM Shriram,

This includes telecommunication, transport,

Emerging services include ITES, Internet, Mobile

The major players include LIC, SBI, SBNL. There

Individual Product line Product

Product attributes, branding,

Extra add –on of a Pressure cooker Intel Computers

Product Line Product Mix

• A group of closely • Set of all product

PLC stages in rural India are usually much

Companies struggle to push growth of their

HUL, ITC and Eveready having tasted

Mahindra maintained its image through the Bhumiputra series of

Building brands in rural markets

Brand loyalty versus brand stickiness

Fake market can be categorized as:

Special focus because of:

Pack size and Packaging

Rural consumers attach great value to warranty

Service centres not easily accessible to rural consumers

Organization of service camps essential for bridging this gap

Need to extend service to smaller towns

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