Lecture - 3

Marketing of Consumables & Durables

Rural shops have been stocking & selling packaged product like tea packs, soaps & other similar items Packaged products are available in village shops, shandies, haats, Jathras & melas Operations Research Group, Vadodara (ORG) conduct retail shop level audit to know brand wise off take of packaged goods in rural areas. Packaged products are classified into six categories: - Washing & Cleaning Material - Toiletries - Cosmetics - Food/Beverages - Pharmaceuticals - OTC Products

 Rural market is about 50% for most of the consumer items Products which are in the final stages of their product cycle in urban areas are in growth phase of their product life cycle for rural markets. Ex- Safety Razors, blades, shaving rounds is picking up in rural areas. Ex- of Consumer durables whose sale is picking up Radios & mono tape recorders etc., A survey conducted by ORG in 1990 named Growth of Rural Markets observed followings: - Pharmaceuticals industry depends on rural market for their 15 to 20 % sales - Rural Markets grew from 28 to 37% - In volume terms market for packaged goods in rural areas growth of 300% is observed between 1984 to 1989 - Rural Market was growing faster than urban market

Major items which accounted for about 75 to 80% of rural market were washing soaps, cleaning materials, toiletries & food & beverages. Growth rate was very significant in certain items like cosmetics & toiletries were 385% & 213% respectively over a period of five years. Shift in demand was seen in case of oral care from tooth powder to tooth paste Usage of safety razor blades considerably increased In rural areas.

Factors Contributing to Growth of RM

General Factors Growing Rural Population Growth in rural incomes Government investment in development programmes Specific Factors Increase in productivity in agriculture & agriculture related activities which contribute to increased marketable surplus Increase in no. of rural development programmes Improved infrastructure facilities like transport, communication etc., Expansion of retail netework Expansion of TV network, cable television & no. of channels Liberalised government policies

Manufacturers & marketers placing special emphasis on rural markets Evolution of a new cadre of entrepreneurs in rural areas Competitive & creative promotions & advertising Revolution in packaging Changing life styles Introduction of new products

Product
Does product offered in urban markets require modification or redesign for sale in rural markets? Examples of Product Redesign are: - Paisa packs of tea costing 25 paisa - 5 gms vicks vapourub tin - 75 gms Lifebuoy - 25 gms pouch of colgate tooth powder - Smaller denomination packets of washing powders, nirma, sachet packets of shampoo - Low priced cigarettes like hero - Cough syrups in sachets; Vicks singles cough drops

Product
Factors to be considered while redesigning or modification of product are: Specific requirement of rural consumers Their habits of usage Their purchase habits Their income levels Customs, beliefs, taboos etc., Four kind of products: Nationally branded products Regionally branded products Locally manufactured unbranded products Imitation or piggyback products

Product
Reasons for wide range of products being sold in rural areas: - Heterogeneous nature - Wide disparities in income level - Lifestyle Examples of Modified Products for Rural Markets - Colgate Palmolive small tubes (Chota packet) - ITC cigarette Hero 15 paise/stick - Pepsi & Thums up introduced 200 ml bottles at Rs.5/- Tea marketed by HUL (70% tea; 20% chichory; 10% tapoica flour) Consumer Durables: - PVC shoes & chappals - TVS Suzuki AX-100 R (This model had wide tyres & hard paint) - Philips modified their radios, mono 2-in-1 radios & tape recorders to suit rural taste & preferences (Bigger in size & louder)

Product
2 Brands of Motor Cycles which are popular in rural areas: - 1st Rajdoot by Escorts Ltd (Low maintainance cost, minimal break down & easy service repairs) - Royal Enfield (Everyday use for selling milk, veg, eggs, flowers etc.,) Mopeds offered mechanized form of personal transport (Service & repair facilities easily available) Many products found their own way into rural market. Ex- Hawkins pressure cooker.