A firm may decide to expand its present mix by increase the number of lines or the depth within the lines. Now lines may be related or unrelated to the present products.
TO expand the market by tapping the countryside, more and more MNCs are foraying into India's rural markets. Opportunity The Indian rural market with its vast size and demand base offers a huge opportunity that MNCs cannot afford to ignore. With million households, the rural population is nearly three times the urban.
As a result of the growing affluence, fuelled by good monsoons and the increase in agricultural output to million tonnes from million tonnes inrural India has a large consuming class with 41 per cent of India's middle-class and 58 per cent of the total disposable income.
The importance of the rural market for some FMCG and durable marketers is underlined by the fact that the rural market accounts for close to 70 per cent of toilet-soap users and 38 per cent of all two-wheeler purchased.
The rural market accounts for half the total market for TV sets, fans, pressure cookers, bicycles, washing soap, blades, tea, salt and toothpowder, What is more, the rural market for FMCG products is growing much faster than the urban counterpart.
The 4A approach The rural market may be alluring but it is not without its problems: Low per capita disposable incomes that is half the urban disposable income; large number of daily wage earners, acute dependence on the vagaries of the monsoon; seasonal consumption linked to harvests and festivals and special occasions; poor roads; power problems; and inaccessibility to conventional advertising media.
However, the rural consumer is not unlike his urban counterpart in many ways. The more daring MNCs are meeting the consequent challenges of availability, affordability, acceptability and awareness the so-called 4 As Availability The first challenge is to ensure availability of the product or service.
India'svillages are spread over 3. However, given the poor state of roads, it is an even greater challenge to regularly reach products to the far-flung villages. Any serious marketer must strive to reach at least 13, villages with a population of more than 5, Marketers must trade off the distribution cost with incremental market penetration.
Over the years, India's largest MNC, Hindustan Lever, a subsidiary of Unilever, has built a strong distribution system which helps its brands reach the interiors of the rural market.
To service remote village, stockists use autorickshaws, bullock-carts and even boats in the backwaters of Kerala. Coca-Cola, which considers rural India as a future growth driver, has evolved a hub and spoke distribution model to reach the villages.
To ensure full loads, the company depot supplies, twice a week, large distributors which who act as hubs. These distributors appoint and supply, once a week, smaller distributors in adjoining areas.
LG Electronics defines all cities and towns other than the seven metros cities as rural and semi-urban market. Affordability The second challenge is to ensure affordability of the product or service. With low disposable incomes, products need to be affordable to the rural consumer, most of whom are on daily wages.
Some companies have addressed the affordability problem by introducing small unit packs.Subject: Rural Marketing Management of Business Science MBA study Material, lecturing Notes, assignment, reference, wiki, description, explanation, brief detail and important questions and answers Important Questions and Answers.
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Visvesvaraya Technological University Belgaum MBA Master of Business Administration Draft Syllabus (Effective from ) 2 Objectives: The basic objectives of MBA Programme are: 1.
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