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Rural MarketingRural MarketingGroup - 4Group - 4
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We are….We are….Name Roll No.Shehnaz Bajaria 03Sumit Bhatia 05Wilson D’Souza 13Stephaney Fernandes 17Abhishek Kumar 28Augustine Moniz 37
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The Biscuit IndustryThe Biscuit Industry
One of the first ‘foods’ offered to kids Brand association starts early Nutritional Value Biscuits were assumed as sick-man's diet in earlier
days. Today, it has become one of the most loved fast food product for every age group. Biscuits are easy to carry, tasty to eat, cholesterol free and are reasonably priced.
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Annual production of Biscuit in IndiaAnnual production of Biscuit in India
0
2
4
6
8
10
12
14
16
18
2003-04 2004-05 2005-06 2006-07
11
12.54
14.29
16.14
Annual Production of Biscuit in India
Lakh MT
YoY growth shows rising consumption in India…
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Biscuit Industry profile Biscuit Industry profile
Organised : Unorganised :: 40 : 60
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Introduction on Biscuit IndustryIntroduction on Biscuit Industry
Rural-urban penetration of Biscuit :
• Urban Market : 75% to 85%• Rural Market : 50% to 65%
Per capita consumption of Biscuits :
• INDIA 1.8 kg • South East Asian Countries 2.5 kg to 5.5 kg • USA 7.5 kg
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About PARLE AGROAbout PARLE AGRO Established in 1929 1st brands – Parle Glucose and Parle Monaco Market leader in many products 35% share of the total biscuit market 15% share of the total confectionery market 70% share in glucose biscuits Parle has largest such manufacturing units in India Estimated brand worth Rs. 2000 crores Sales for 2008 – 2009 were approx Rs. 3500 crores ( Rs. 35
billion)
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SWOT Analysis of Parle Agro SWOT Analysis of Parle Agro
Strengths•Parle Brand, •Diversified product range,•Extensive distribution network. •Low and mid price range •Catering to mass, •Better understanding of consumerpsyche
Weakness•Dependence on retailers & grocery •Stores for displaying diversified Parle •Products on shelf, induce impulsive buy• Dependence on Parle G (flagship brand)
Opportunities•Estimated annual growth of 20%•Low per capita consumption,•Changing consumer preference,• Increasing demand for sugar free,•Diet biscuit,
Threats •Hike in cost of production due to hike•In Raw material cost, •Increasing distribution cost,•Local bakery products,•Entry of various new entrant, ITC etc.
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Urban Contribution of Small Packs (% Urban Contribution of Small Packs (% of Sales)of Sales)
Categories 1998 2001 2007
Toothpowder 35.7 42.9 57
Talcum Powder 13 18.1 28
Hair Oils 9.8 11.5 15
Coffee 8.3 13.3 23.3
All Biscuits 1.4 4.4 10
Coconut Oil 4 7.9 16
Toothpaste 0.9 2.7 6.2
Mosquito Rep. 1.3 4.1 9.7
Source: KEIC
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Rural Contribution of Small Packs (% of Rural Contribution of Small Packs (% of Sales)Sales)
Categories 1998 2001 2007
Toothpowder 49.8 65.8 95
Talcum Powder 22.3 31.6 49
Hair Oils 16.4 18.3 22.1
Coffee 19.6 37.8 73
All Biscuits 1.5 5.2 12.6
Coconut Oil 6.4 13.1 26.5
Toothpaste 0.8 3.4 8.5
Mosquito Rep. 2.8 4.7 9
Source: KEIC
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Why Rural Markets?Why Rural Markets? Rural India accounts for over 75% of India's population. Strength of Market Size of Market Incomes in rural India have improved dramatically. Tax benefits associated with incomes in rural areas boost spending
power of the average rural family. The rural markets are growing at about two time faster pace than
urban markets. Rural India accounts for 60 % of the total national demand. India entering the globalisation mode and the rural revolution being
governed by rising purchasing power, increased savings, changing consumer habits, there are sure and positive signs that a new dawn of rural India is going to come.
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Problems in Rural MarketingProblems in Rural Marketing
Under developed people Low levels of literacy Physical Communication Facilities Media for Rural Communication Multiplicity languages and dialects Vast and Uneven Spread Low per capita income Logistics, Storage, Handling and Transportation Marketing Organisation and Staff Product Positioning Hierarchy of markets Seasonal demand patterns
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Consumer DiversityConsumer Diversity
India’s economic diversity matches its social diversity
Class is difficult to define in India
Incomes alone don’t define the class
Purchase behaviour is related to cultural conditioning, location,
source of income, education and occupation
A typical rural family is a price conscious consumer and this is
where the key to success lies.
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Product Strategies for Rural Product Strategies for Rural MarketsMarkets
Brand Name Small Unit Packagings Low Priced Packagings New Product Designs Sturdy Products Utility Oriented Products
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Snacking habits in Rural IndiaSnacking habits in Rural India
Biscuits o With tea o For guestso Mini breakfast
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Closest CompetitorsClosest Competitors
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Closest CompetitorsClosest Competitors
Locally manufactured biscuits.
Unpacked baked items (eg: khari and rusk).
Freshly fried items ( eg: vada pao, bhajji, samosa)
Newest threat – Brittania TIGER
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Some FactsSome Facts Britannia and Colgate, apart from Hindustan Lever, are the only
FMCG companies in India that derive over 30% of their revenues from rural markets.
Britannia has rejuvenated its rural thrust by the launch of Tiger biscuits
Colgate has been attempting to woo the rural masses by offering low priced products in convenient packaging.
Understanding the psyche of the rural family as it as important distribution network.
Stiff competition, however, companies that have the first mover advantage, are still leading their peers in terms of market shares.
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Main barriers for other brandsMain barriers for other brands
Parle G Low awareness Weak distribution Unorganized sector Mindset
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Changing habits - How?Changing habits - How?
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The 7 P’s & 4 A’s of The 7 P’s & 4 A’s of Marketing Marketing
Affordability
Availability
Awareness
Accepatblilty
Marketing Tools
Product
Price
Place
Promotion
Marketing Challenges
People ProcessPhysical Evidence
Price
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AffordabilityAffordability
Parle G has adopted the Market Penetration strategy i.e. low price
along with capturing of a large market
Low price range, as low as Re 1, Rs. 2 and Rs. 4
Product available in 8 different sizes
16.5G, 38.5G, 60.5G, 82.5G, 99G, 209G, 313.5G, 418G, 825G
70% of total sales volumes comes from products priced Rs. 5 and
below
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Pricing StrategyPricing Strategy
A brand that has held its price line at Rs 4 for 25 years Profit margin for distributors is 4% and for retailers is 10-12% Even though Parle G gives lesser margins to the seller, more
preferred because of huge volumes sold. Didn't try to raise prices to offset the overall hike in costs Soaring input prices meant it opted for reducing the weight of the
biscuit The number of biscuits in a pack come down from 16 to 15 Philosophy - price more important than the weight of
the biscuit
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AccessibilityAccessibility
1500 wholesalers catering to 425,000 retail outlets200 dedicated field force31 depots and C&F agentsFactories at strategic locations & Establishment of manufacturing units in rural areas
1500 wholesalers catering to 425,000 retail outlets200 dedicated field force31 depots and C&F agentsFactories at strategic locations & Establishment of manufacturing units in rural areas
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AcceptabilityAcceptability
Distinctly comfortable position in consumer’s psyche built over decades
Old is Gold Family is the largest influence group Friend circle and reference groups E.g. Social groups, classmates
etc. Parle G is consumed by people of all ages, from the rich to the
poor, living in cities & in the villages While some have it for breakfast, for others it is a complete
wholesome meal. For some it’s the best accompaniment for chai
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AwarenessAwareness
Television and Cinema are the main media to reach the rural audience
Print media - It was advertised mainly through press ads. The communication spoke about the basic benefits of energy and nutrition.
In 1989 Parle-G released its “Dadaji” commercial which was a huge success and was aired over a period of 6 years.
The communication spoke about the basic benefits of energy and nutrition.
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Sales promotion - Every year it holds day fairs at branded venues where games and fun events are organized for the employees of Parle and their families; where Parle products are giveaway prizes.
Public relations - Parle has done the following for enhancing public relations: In the year 1997, Parle-G sponsored the tele-serial of the Indian superhero, Shaktimaan that went on to become a huge success. In the year 2002, a national level promo - `Parle-G Mera Sapna Sach Hoga' was run for a period of 6 months. The promo was all about fulfilling the dreams of children. Parle Saraswati Vandana, one of its initiatives, is an inter-school contest based on the Saraswati Puja celebrations. Since it started in 2002 it has seen a tremendous increase in participating each year, with entries coming from schools of West Bengal. Parle had introduced the novel promotion called Parle Golu Galata contest in 2005. (Golu means Doll & Galata means Dhammal.)
AwarenessAwareness
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AwarenessAwareness The next level of communication associated the brand with the
positive values of life like honesty, sharing and caring. Just a few months back a reminder TV commercial was launched for Parle-G where the product is being called ‘Hindustan Ki Takat’
Recently Parle G has started the use of celebrity in their advertisements
The current campaign features Aamir Khan and Darsheel Safary along with many situational ads around ‘G maane Genius’ ad campaign.
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Situational AnalysisSituational Analysis Protecting the turf of its largest-selling glucose brand, Parle has also
decided to restrict its line extensions to avoid diluting its equity. Pravin Kulkarni, Marketing Manager, Parle G: "We are recognising the
presence of these players and are already trying to plug in the gaps needed.
For instance, there are distribution gaps in the eastern and southern markets (compared to the North and the West), and we are enhancing our distribution in these parts.
Observes A. Sundara Rajan, Chief Executive, Market Search, a research firm: "Parle's equity extends into the heartland of India. At the same time, the company realises that if it does not do anything, its equity will get eroded. Over the years Parle has been enhancing its packaging and communication and luckily the market has also been expanding."
Thus, new players have not really poached on Parle's territory and lack of penetration has helped all the players grow.
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Even though Parle G gives lesser margins to the seller, more preferred because of huge volumes sold.
Didn't try to raise prices to offset the overall hike in costs
Soaring input prices meant it opted for reducing the weight of the biscuit
The number of biscuits in a pack come down from 16 to 15
Philosophy - price more important than the weight of the biscuit
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Small gives “Value”Small gives “Value”
Small is convenient
Small is affordable Price
Small is to attract Non-users One time users New users
Small saves the space
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Small is BigSmall is Big
For customers, small packs mean Affordably priced products Less investment Reduced risk of buying
And for companies, it translates into Large volumes Helps address diverse customer segment Attracts non-users
Single-serve packs are expected to find more prominence in low penetration categories like health food, baby products and more
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FUTURE STRATEGYFUTURE STRATEGY• Hire managers from the Institute of Rural Management Anand (IRMA)
• Rural marketing efforts need special mindsets, separate marketing and sales vertical headed by people with passion and commitment to rural marketing and supported by a field team that can face the rough and tough of the vast country-side with courage and conviction is a must.
• To recruit students from specialised institutes such as the Indian Institute of Rural Management or management graduates who have studied the “Rural Marketing” subject as an elective.
• Pay them well and discuss their career paths which they are likely to take in the organisation &then send them out in the field only after thorough training.
• Ensure the consistency of the team involved in any project, until the completion of a specific task. Teams involved in the initial stages, participate enthusiastically in the campaign & shift out midway because of Company’s Policy to shift & promote people
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FUTURE STRATEGYFUTURE STRATEGY Focused & comprehensive brand building strategy for rural India, with
both short term and long term goals, is a must. Objective to build a strong equity for Parle- G brand in rural India Focus on core competency To promote Parle Biscuits & Confectionaries in the mass rural market To reach rural customer and also the target segment To increase sales & derive more revenues from rural market Flexible Policies Adoption to fast changing marketing situations Rural retailing: Established rural retail hubs like other FMCGs –
Hariyali Kisan Bazaars (DCM) and Aadhars (Pantaloon-Godrej JV) Choupal Sagars (ITC) Kisan Sansars (Tata) Reliance Fresh Project Shakti (Hindustan Unilever)
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Melas & HaatsMelas & Haats
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Melas & HaatsMelas & HaatsMelas (25000) Haats (47000)
1. Companies can concentrate on
the top 100 melas Eg. Pushkar
Mela in Rajasthan
2. Product sales, promotion,
demonstration and database
generation
3. Cultural activities and rural
sports
1. Periodic markets located in larger
villages
2. Sunday markets are most popular
3. Traders participate in the haats
4. Most visitors are repeat customers
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Adaptations for Rural Adaptations for Rural MarketsMarkets
ConventionalConventional Non- Non- Conventional Conventional
Personalised Personalised
Television Haat and Mela Direct mailer
Radio Folk Media( puppet
and magic show)
POS (demonstration,
leaflet)
Press Video Van Word of mouth
Cinema Mandi Interpersonal communication
Outdoor: Wall Painting, Hoarding
Animator
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Small is smartSmall is futureSmall is for penetration and growth
ConclusionConclusion
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Thank YouThank You