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Fake Products-The Real Challenge to rural marketing (Analysis and solutions)

Introduction to Rural Market

Rural India has 75 percent of the population living in 5,72,000 villages speaking 33 languages. They have 53% percent share of the total market and consumer durables by 59% percent. National Samples Survey (NSS) data reveals that 75 percent of the expenditure on manufactured goods is accounted by rural India.

Facts And Figures

Approximate size of rural market is Rs.123000crores Rural India has seen a remarkable growth due to rise in agricultural prices Less exposure to various brands hence less competitive. Rise in expenditure is 9% since 2002 Govt. schemes like Bharat Nirman, NAREGA and loan waiver has made rural market approachable.

Shortcomings of Rural Market

Low literacy rate Lack of infrastructure facilities like power, roads etc. Fake product in the market No common language across areas Sparsely located population Low earning per household and low penetration of rural media Traditional outlook of rural consumers which makes them resist change.

Opportunities in rural sector

Rural market is fresh and new. A new brand can easily enter as competition is low Rural indias resistance to change gives established brand a leverage. Govt spending is increased as follows41 million Kisan credit cards issued providing the cumulitive credit of Rs 977 billion 90% villages are electrified Schemes like NAREGA and loan waiver have pumped liquidity.

Fake Products Real Challenge.

An ORG -MARG retail outlet found that for every 100 strips of genuine Vicks Action 500, there are 54 counterfeit strips sold in the market. AC Nielsen indicating that the FMCG segment in the country alone incurs a loss of about Rs 1,800 crore due to counterfeit products. P&G's Health care division sales were impacted upto 15 per cent.

Classification of products.

There are two types of Imitation Products: Counterfeits Pass-off products.


According to qualitative research by MART, there are three kinds of fakes that are doing the rounds The look a likes The spell a likes The duplicates

Analysis of fake products


Features Brand Name Pack Appearance Duplicates Original Replica Spell-Alike Mis spelt Identical Look Alike Different Similar

Manuf. Address
Price Margins Quality

Original
M.R.P. 200-300% Very Poor

Incomplete
40% low 100-150% Poor

Own Name
10-15% low 60-70% Reasonable

Intentions of retailer
Consumers Identity Offer

To cheat
Unaware None None

To mislead
Unaware Only literate Discounts

To freeload
Want cheeper products Majority Schemes

Examples of fake products.


Original Clinic Plus Counterfeit Clinic Plus(duplicate), Clitric Plus, Cosmic Plus

Sunsilk
Tata Salt Pepsi

Sumsilk
Taja Salt(spell alike) Tepsi

Ponds Magic
Vicco Fare and Lovely

Casino(look alike)
Viggo Friends and lovely

Parle G

Parla G

Reasons for fake product

Poor distribution channel. Lack of communication-Media Dark Area. Illiteracy among rural consumers. Influence and trust vested in opinion leader(retailer). Lack of brand awareness. Establishing a brand war of margin.

Counter Strategies
4ps strategies.

Price - Without compromising on quality, the leading chocolate companies can reduce their size to match the rural demand. Promotion -A portion of the ad budget can be allocated for retailers' margin. Product: Without compromising on quality, the leading chocolate companies can reduce their size to match the rural demand. Physical Distribution: Sales professionals of the local region who have familiarity in the local (regional) language can be appointed. Keep a check.

companies.

Brand Protection Committee under the aegis of the Federation of Indian Chambers of Commerce and Industry (FICCI). To increase information on the subject a Web site, fake-busters.com was also launched. In the case of Coca Cola they have deployed 48 Consumer Response Co-ordinators and Route Salesmen. They are going in for upgraded packaging so that manufacturers of counterfeits find it difficult to replicate their products. Ex

Continue..

Fill demand supply gap-Increase your reach. Increase effective communication packaging in simple regional language along with English. Create brand loyalty and awareness programmes.

Some governing laws.


Indian Penal Code 1860 Drugs and Cosmetics Act, 1940 Prevention of Food Adulteration Act, 1954 Consumer Protection Act, 1986 Bureau of Indian Standards Act, 1986 and Trademarks Act, 1999

Thank You