Page 25 - DMGT509_RURAL MARKETING

Rural Marketing

Notes components and raw materials, which go in to the manufacture of any product. Home cooking
is a good example of food manufacture. The cook buys meat, vegetables, cooking oil, condiments
and stoves and then he goes through a process to convert the ingredients in to edible food. It is
difficult to imagine any one person who can grow his own vegetables, keep his poultry and
manufacture a stove for cooking. Cooking therefore is a conversion process.
As there are many other manufacturers in each area, it is important that the manufacturer keeps
his cost of manufacture as low as possible without compromising on his quality standards.

Quality Standards: Firms, find out through market surveys the correct specification of the
product they plan to make. These specifications are then converted to manufacturing standards
and firms have to keep meeting these specifications for each unit produced by them. For exporting
to Europe and other places, the foreign buyers now want that Indian firms follow ISO 9000
STANDARDS. These standards help firms in maintaining their specifications and assist in tracing
causes of deviations if there are any. These standards are meant to keep a check on the
manufacturing process.
For Product standardization each country has its own body, mostly Government owned, which
defines standards for various products. While mostly it is not mandatory for firms to conform to
these specifications, nevertheless it helps to have products with these specifications in product
marketing to an extent.

Market Share: In order to improve market share, firms have to fight competitive forces. This can
be done by different means; some of them are as follows:
Differentiation: As customers are always looking for products, which are different from other
similar products, sellers try to give a little modification in the product or service, or distribution
to make a marked change from the run of the mill operations. These differences should be cost
effective, noticeable and acceptable to the customers.
Cost leadership: Product manufacturing cost have a major bearing on how well it can be sold in
the market. If all competitive products are equally acceptable to the customers, the firm with
lower cost will gain advantage over competitors. Cost leadership is obtained by either achieving
economies of scale of manufacture when the firm is able to reduce unit fixed cost. For reducing
variable cost firms have to look for experience curve.
Quick response to market demand and needs can also provide definite competitive advantage to
firms as it helps them to catch the customers with a product they are waiting for.

Self Assessment

Multiple Choice Questions:
12. Cost leadership is obtained by either achieving economies of scale of manufacture when
the firm is able to reduce unit:
(a) variable cost (b) fixed cost
(c) multiple cost (d) production cost
13. Any firm, which becomes a market leader normally, has at least one:

(a) lead brand (b) secondary brand
(c) primary brand (d) multiple brand

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