Page 168 - DMGT509_RURAL MARKETING

Unit 8: Rural Product Strategy

rural consumers. In addition the packaging material used should be reusable in rural areas. Notes
Most fertilizers companies pack fertilizers in LDPE or HDPE sacks which can be washed &
reused, which are in demand by the farmers.

Figure 8.8: Chik’s Sachet Revolution in Rural Market

Pack Size and Convenience: The total market has expanded from US$ 17.6 billion in 1992-93 to
US$ 22 billion in 1998-99 at current prices. Rural demand constituted around 52.5 per cent of the
total demand in 1998-99. Hence, rural marketing has become a critical factor in boosting bottom
lines. As a result, most companies’ have offered low price products in convenient packaging.
These contribute the majority of the sales volume. In comparison, the urban elite consume a
proportionately higher value of FMCGs, but not volume.
The report further adds that by the early nineties FMCG marketers had figured out two things
one that Rural markets are vital for survival since the urban markets were getting saturated and
Rural markets are extremely price-sensitive. Thus, a number of companies followed the strategy
of launching a wide range of package sizes and prices to suit the purchasing preferences of
India’s varied consumer segments. Hindustan Lever, a subsidiary of Unilever, coined the term
nano-marketing in the early nineties, when it introduced its products in small sachets. Small
sachets were introduced in almost all the FMCG segments from oil, shampoo, and detergents to
beverages. Cola major, Coke, brought down the average price of its products from around
twenty cents to ten cents, thereby bridging the gap between soft drinks and other local options
like tea, butter milk or lemon juice. It also doubled the number of outlets in rural areas from
80,000 during 2001 to 160,000 the next year, thereby almost doubling its market penetration
from 13 per cent to 25 per cent. This along with greater marketing, led to the rural market
accounting for 80 per cent of new Coke drinkers and 30 per cent of its total volumes. The rural
market for colas grew at 37 per cent in 2002, against a 24 per cent growth in urban areas. The per
capita consumption in rural areas also doubled during 2000-02.

Packaging Aesthetics

Lower literacy levels in rural market
 Consumers appreciate bright colours

E.g.: Lifebuoy identified as red soap
Parachute is premium edible grade coconut oil, a market leader in its category. Synonymous
with pure coconut oil in the market is positioned on the platform of purity. Parachute thus
enjoys tremendous equity, trust with every passing generation and loyalty in the urban as well
as rural sectors of India. Innovations in the packaging whether from the aspect of user-friendliness
or aesthetics have and continue to help Parachute grow.

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