Page 176 - DMGT509_RURAL MARKETING

Unit 9: Pricing Strategies

Then came the industrial revolution with mass production techniques and emergent market for Notes
the products, which was far flung in area. It is believed that the money system started in China
and it gave commerce the much-needed fillip. Now people could buy and sell products as per
their requirements for a larger variety of things.

P ro d u c t

M o n e y

Till that time there were only a few manufacturers of a product and competition was not known
as a business reality. With industrial revolution came the affluence in the society and demand
for most products started increasing. With demand increase came competition. Today we see the
competition as a multi-headed dragon swallowing up lesser products or brands or poorer
managed firms.

Did u know? With urban market showing signs of saturation, companies are excited about
the potential of rural India. Some major companies that have focused in the rural sector
are Philips, Parle, Proctor & Gamble, Colgate-Palmolive, Godrej Soap, Bajaj Auto, TVS,
Atlas Cycle and HUL.

9.1 Pricing Elements

Product pricing in highly competitive world has assumed unprecedented importance in the
management of rural markets for firms' profitability.
The following are the elements considered while prices are fixed:

1. Production unit cost
2. Expected units sales in a given period like one year
3. Profit plans
4. Brand image or equity

5. Seasonality of business
6. Market segment
7. Competition
8. Product life cycle stage

9. Guaranty/warranty offered
10. Payment methods and terms
11. Discounts/special offers
12. Range of products with the firm

13. Product launches
14. Product value and utility for the customers
It is pertinent to note here that in rural markets, the MTBP - Mean Time Between Purchase
becomes eminently vulnerable with price.

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