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Chapter 18.docx

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International Business
INTB 2200
Luming Wang

Chapter 18: Rural Marketing Strategies Creation Is A Tradition And Technology A Way Of Life An appropriate segmentation of highly heterogeneous rural market and identification of the needs and wants of different segments will form the very basis for rural marketing strategies. For the rural market, strategies for the 4P‟s of the marketing mix would be an ideal one. (A) Product Strategies (B) Pricing Strategies (C) Distribution Strategies (D) Promotional Strategies A) Product Strategies The following are the product strategies for the rural market and rural consumers: 1. Small unit packing: This method has been tested by products life shampoos, pickles, biscuits, Vicks cough drops in single tablets, tooth paste, etc. Small packings stand a good chance of acceptance in rural markets. The advantage is that the price is low and the rural consumer can easily afford it. Also the Red Label Rs. 3.00 pack has more sales as compared to the large pack. This is because it is very affordable for the lower income group with the deepest market reach making easy access to the end user satisfying him. The small unit packings will definitely attract a large number of rural consumers. 2. New product designs: Keeping in view the rural life style the manufacturer and the marketing men can think in terms of new product designs. For e.g. PVC shoes and chappals can be considered sited ideally for rural consumers due to the adverse working conditions. The price of P.V.C items is also low and affordable. 3. Sturdy products: Sturdiness of a product is an important factor for rural consumers. The experience of torch light dry battery cell manufacturers support this because the rural consumers preferred dry battery cells which are headier than the lighter ones. For them, heavier weight meant that it has more over and durability. Sturdiness of a product either or appearance is an important for the rural consumers. 4. Utility oriented products: The rural consumers are more concerned with utility of the product and its appearance Philips India Ltd. Developed and introduced a low cost medium wave receiver named BAHADUR during the early seventies. Initially the sales were good but declined subsequently. On investigation it was found that the rural consumer bought radios not only for information and news but also for entertainment. 5. Brand name: For identification, the rural consumers do give their own brand name on the name of an item. The fertilizers companies normally use a logo on the fertilizer bags though fertilizers have to be sold only on generic names. A brand name or a logo is very important for a rural consumer for it can be easily remembered. Many a times rural consumers ask for peeli tikki in case of conventional and detergent washing soap. Nirma made a peeli tikki specially for those peeli tikki users who might have experienced better cleanliness with the yellow colored bar as compared to the blue one although the actual difference is only of the color. B) Pricing Strategies Pricing strategies are linked to the product strategies. The product packaging and presentation also keeps the price low to suit the rural consumer. Some of the pricing strategies are discussed below: 1. Low cost/ cheap products: the price can be kept low by low unit packings like paisa pack of tea, shampoo sachets, vicks 5 grams tin, etc. this is a common strategy widely adopted by many manufacturing and marketing concerns. 2. Refill packs / Reusable packaging: in urban areas most of the health drinks are available. The containers can be put to multipurpose uses. Such measures can a significant impact in the rural market. For example, the rural people can efficiently reuse the plastic bottle of hair oil. Similarly the packages of edible oil, tea, coffee, ghee etc can be reused. Pet jars free with the Hasmukhrai and Co Tea, Ariel Super Compact. 3. Application of value engineering: in food industry, Soya protein is being used instead of milk protein. Milk protein is expensive while Soya protein is cheaper, but the nutrition content of both is the same. The basic aim is to reduce the value of the product, so that a larger segment can afford it, thus, expanding the market C) Distribution Strategies While it is necessary to formulate specific strategies for distribution in rural areas, the characteristic of the product – whether it is consumable or durable, the life of the product and other factors have to kept in mind. The following strategies formulated for the rural category. 1. Coverage of villages with 2000 and above population: Ideally, coverage of villages with up to 2000 and above population could be the break-even point for a distribution setup. By doing so the percentage of villages covered comes to only 10% of all the rural population covered will b substantial. With improved communication facilities it is possible to reach distribution vas to these villages. 2. Use of co-operative societies: There are over 3 lacks co-operative societies operating in rural areas for different purposes like marketing cooperatives, farmers service cooperatives and other multipurpose cooperatives. These cooperatives have an arrangement for centralized procurement and distribution through their respective state level federation. Such state level federation can be motivated to procure and distribute consumables items and low value durable items to the members to the society for serving to the rural consumers. Many of the societies extend credit to the members for purchases. 3. U
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