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2 Payment collection
3 Pricing While Sachet pricing may have worked very well for Chik shampoo,
the overheads involved in payment collection do not always allow easy
execution of sachet pricing. It is easier to collect in larger amounts as every
instance of collection and carrying of cash has associated costs
4 Scaling cross geographies
rural is a volume market and requires scale and achieving that scale organically or
inorganically is a major challenge
In 20 years, rural Indian Market will be larger than the total consumer markets
in countries such as South Korea or Canada today, & almost 4 times the size of
today’s urban Indian market.
Rural India –Key Statistics
Rural India constitutes 69% of India’s population.
86% of Rural population earns less than $2 per day (most of Indian BoP
households earn $67 per month in 2010 from $42 per month in2000)
There are more phones than Radio in Rural India (100million subscriber base).
Only 0.29 per cent of the male population has reached the graduation level
(0.04% for women) and 6.% of the rural males are educated up to the middle
level
70 % of the disabled in India lives in rural areas
The 4A Approach
Availability
To service remote village, stockiest use auto-rickshaws, bullock-carts and even
boats in the backwaters of Kerala.. LG Electronics defines all cities and towns
other than the seven metros cities as rural and semi-urban market. To tap these
unexplored country markets, LG has set up 45 area offices and 59 rural/remote
area offices.
rural retailers influences 35% of purchase occasions
Affordability
Acceptability
Awareness Mass media is able to reach only to 57% of the rural population.
For generating awareness, events like fairs and festivals, Haats, etc., are used as
occasions for brand communication. Cinema vans, shop-fronts, walls and wells
are other media vehicles that have been utilized to increase brand and pack
visibility. Ideas like putting stickers on the hand pumps, walls of the wells putting
on tin plates on all the tree surrounding the pond are some of the innovative
media used by personal wash like Lux and Lifebuoy and fabric wash items like
Rin and Wheel. Idea was to advertise not only at the point of purchase but also
at the time of consumption.
1 Focus on price performance of products and services. Serving BOP markets is not just
about lower prices. It is about creating a new price - performance
2 Innovation requires hybrid solutions. BOP consumer problems cannot be solved with old
technologies.
3 As BOP markets are large , solutions that are developed must be scalable and
transportable across states and cultures
4 The developed markets are accustomed to resource wastage . All innovations must focus
on conserving resources
5 Product development must start from deep understanding of functionality not form.