New Product Development –Given the rising interest of companies in the rural market, developing new products suitable for the rural market has become an imperative. For eg.
Jolly battery operated color television, 5 kg cooking gas cylinder by HPCL, Philips free power radio, LG Washing Machine, Kisan Credit Card, Max Gas LPG cylinder.
Philips free power radio does not require batteries or any external source of electricity for operation.
LG Electronics spent 21 lakhs to develop a set, that would have on-screen displays in the vernacular languages of Hindi, Tamil and Bengali.
Max Gas LPG Cylinder has special steel-braided hose pipe, which is rat resistant and wider base of cylinder to ensure stability even on uneven rural kitchen floors.
Sturdy Products –Village people believe that the product should be sturdy enough to withstand rough consumers handling and storage. Rajdoot Motorcycle manufactured by Escorts Ltd. Is very popular in rural areas because of its adaptability, low maintenance costs, minimal breakdown and easy accessibility of service and repairs. LG Electronics has devised a semi-automatic washing machine with double the capacity of their urban-based machines.
Brand Name –A brand should have short, simple, easy to pronounce, can be remembered easily and should lend itself to virtual interpretation. In rural markets, consumers do give their own brand name or the name of an icon. Many a times rural consumers ask for peeli tikki or neeli tikki in case of washing soaps. Eg. LG Electronics branded one of the TV set as Sampoorna.
Fertiliser companies normally use a logo on the fertilizer bag.
Small Unit Packings –Rural consumers receive daily wages and at the same time their
income is unsteady. Hence they can‘t make purchases in large quantities. Eg. HUL sells
Shampoo and Hair oil in sachet packs in rural areas.
Cavin Kare Ltd. has launched a sachet priced at 50 paise for its Chic Shampoo.
Low Priced Packing –Tata Tea launchedeconomy brand‗Agni‘inruralareasasto an compete with loose tea powder.
ITC has launched ‗Hero‘ containing blended rural consumers.
Marketing Mix Challenges
Availability –Poor road condition is a challenge to make the products available in remote areas. HUL has built a strong distribution system that helps its brands reach the interiors of rural market. Village stockists use auto rickshaws, bullock carts and even boats to reach remote areas. Coca Cola uses hub and spoke model to reach villages.
Affordability –Low disposable income of rural consumers. Small unit packs re being introduced. Coca Cola has introduced 200 ml glass bottle priced at Rs. 5, Lifebuoy at Rs
2, Videocon washing machine without dryer at Rs. 3000.
Awareness –Only 41% of rural households have access to television-building awareness is another challenge. Hindustan Lever relies heavily on its own company-organized media. These are promotional events organized by stockists. Godrej consumer products, which is trying to push its soap brands into the interior areas, uses radio to reach the local people in their own language. Coca Cola doubled its spend on advertising on Doordarshan, which alone reaches 41% of rural households.
Acceptability –There is a need to offer products that suit the rural market. LG developed a customized television for the rural market and named it Sampoorna. HDFC insurance tied up with non-governmental organizations and offered reasonably priced policies in the rural market.