Page 183 - DMGT509_RURAL MARKETING

Rural Marketing

Notes Most service industry therefore needs to do a Customer Value Analysis (CVA). For a star
hotel the following matrix needs to be completed to give a proper designation to each
customer/customer group.

Table 9.1

Room Health club Restaurant/bar Business
type/ordinary. usage usage centre usage
Deluxe/suite
Tourist solo
Tourists in groups
Small businessman
Senior executives

MNC Executives

Each customer is rated between 1-5 and then only the hotel can decide about the true value of a
particular customer to them.
Coming to pricing the following elements go into hotel room pricing:
1. CVA
2. Competitive pricing
3. Cost to sell the room

4. Seasonality
5. Location of the hotel

!
Caution Companies that have figured this out are doing better in the villages than in the
cities. Soft drinks giant Coca-Cola is growing at 37% in rural markets, compared with 24%
in urban areas. According to Hansa Research, a market research firm that has published a
Guide to Indian Markets 2006, the penetration of consumer durables has risen sharply in
India's villages between 2000 and 2005.

9.5 Rural Pricing Strategies

One of the key aspects of rural pricing is the distribution cost that adds to the overall cost of the
product. Marketers on the other hand have felt that the rural markets will fetch them lower
prices. Between this dilemma rural marketers have always looked at offering. Those products to
the consumers which offer more value at a lower cost. On the other hand, marketers have also
being making attempts to help consumers in rural markets switch to their products with better
price offer than their competitors or the nearest local version of the product. But before we dwell
on this issue further, it will be critical to evaluate some fundamental price structures that exist in
rural markets.

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