Page 189 - DMGT509_RURAL MARKETING

Rural Marketing

Notes 14. A price rise by the competitor should be matched in a period of growing ...................... or
rising costs.
(a) significance (b) production

(c) price (d) demand

9.8 Role Play Module 3

The CEO of the company wants to finalise the price of the product and he gets his team to discuss
the same.
CEO: "Gentlemen, since we have decided to launch the product, let us finalise its price today."
Finance Director: "I believe the rural market is ready to pay the same price as we charge the
urban buyer. Therefore I think we should keep the same price all over the country."
Marketing Director: "Oh come on! the rural buyers do not have that kind of money and the urban
prices will score the rural buyers away and we would have a non starter launch."

HR Director: "Rural markets are ready for the product but they cannot pay the urban market
prices. Let us see how we can reduce the prices even as we keep the product's quality the same."
CEO: "What about making certain changes in the product and keep it of slightly lower standards
for rural markets?"
Marketing Director: "I believe the answer lies in planning for a new low cost package and
supplying the same product. This will help in cultivating the rural buyers as they will endorse
the high quality of the product."
Operation Director: "May be we should give the idea a try. I will get our R&D team to work on
a low cost attractive package."
CEO: "Please see that we get the final package in a week's time to ensure we are able to stick to
our launch schedule."

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Case Study ITC Rural Initiative

TC started as a tobacco product company. It has since forayed into several of the key
developmental areas in the country, an important one being that of rural development.
IITC has the following story to tell on this issue.
Agriculture is vital to India. It produces 23% of GDP, feeds a billion people, and employs
66% of the workforce. Because of the Green Revolution, India's agricultural productivity
has improved to the point that it is both self-sufficient and a net exporter of a variety of
food grains. Yet most Indian farmers have remained quite poor. The causes include
remnants of scarcity-era regulation and an agricultural system based on small, inefficient
landholdings. The agricultural system has traditionally been unfair to primary producers.
Soybeans, for example, are an important oilseed crop that has been exempted from India's
Small Scale Industries Act to allow for processing in large, modern facilities. Yet 90% of
the soybean crop is sold by farmers with small holdings to traders who act as purchasing
agents for buyers at a local, government-mandated marketplace, called a mandi. Farmers
have only an approximate idea of price trends and have to accept the price offered to them

Contd...

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