Fake Products-The Real Challenge to rural marketing

(Analysis and solutions)

Introduction to Rural Market

Rural India has 75 percent of the population living in 5,72,000 villages speaking 33 languages.

They have 53% percent share of the total market and consumer durables by 59% percent.

National Samples Survey (NSS) data reveals that 75 percent of the expenditure on manufactured goods is accounted by rural India.

Facts And Figures

Approximate size of rural market is Rs.123000crores

Rural India has seen a remarkable growth due to rise in agricultural prices

Less exposure to various brands hence less competitive.

Rise in expenditure is 9% since 2002 Govt. schemes like Bharat Nirman,

NAREGA and loan waiver has made rural market approachable.

Shortcomings of Rural Market Low literacy rate Lack of infrastructure facilities like

power, roads etc. Fake product in the market No common language across areas Sparsely located population Low earning per household and low

penetration of rural media Traditional outlook of rural consumers

which makes them resist change.

Opportunities in rural sector

Rural market is fresh and new. A new brand can easily enter as competition is low

Rural india’s resistance to change gives established brand a leverage.

Govt spending is increased as follows-41 million Kisan credit cards issued providing the

cumulitive credit of Rs 977 billion90% villages are electrifiedSchemes like NAREGA and loan waiver have

pumped liquidity.

Fake Products –Real Challenge.

An ORG -MARG retail outlet found that for every 100 strips of genuine Vicks Action 500, there are 54 counterfeit strips sold in the market.

AC Nielsen indicating that the FMCG segment in the country alone incurs a loss of about Rs 1,800 crore due to counterfeit products.

P&G's Health care division sales were impacted upto 15 per cent.

Classification of products.

There are two types of Imitation Products: Counterfeits Pass-off products.

According to qualitative research by MART, there are three kinds of fakes that are doing the rounds –

The look a likes The spell a likes The duplicates

Analysis of fake productsFeatures Duplicates Spell-Alike Look Alike

Brand Name Original Mis spelt Different

Pack Appearance Replica Identical Similar

Manuf. Address Original Incomplete Own Name

Price M.R.P. 40% low 10-15% low

Margins 200-300% 100-150% 60-70%

Quality Very Poor Poor Reasonable

Intentions of retailer

To cheat To mislead To freeload

Consumers Unaware Unaware Want cheeper products

Identity None Only literate Majority

Offer None Discounts Schemes

Examples of fake products.Original Counterfeit

Clinic Plus Clinic Plus(duplicate), Clitric Plus, Cosmic Plus

Sunsilk Sumsilk

Tata Salt Taja Salt(spell alike)

Pepsi Tepsi

Ponds Magic Casino(look alike)

Vicco Viggo

Fare and Lovely Friends and lovely

Parle G Parla G

Reasons for fake product

Poor distribution channel. Lack of communication-Media Dark Area. Illiteracy among rural consumers. Influence and trust vested in opinion

leader(retailer). Lack of brand awareness. Establishing a brand –war of margin.

Counter Strategies4ps strategies.

Price - Without compromising on quality, the leading chocolate companies can reduce their size to match the rural demand.

Promotion -A portion of the ad budget can be allocated for retailers' margin.

Product: Without compromising on quality, the leading chocolate companies can reduce their size to match the rural demand.

Physical Distribution: Sales professionals of the local region who have familiarity in the local (regional) language can be appointed. Keep a check.

Initiatives taken by some companies.

Brand Protection Committee under the aegis of the Federation of Indian Chambers of Commerce and Industry (FICCI).

To increase information on the subject a Web site, fake-busters.com was also launched.

In the case of Coca Cola they have deployed 48 Consumer Response Co-ordinators and Route Salesmen.

They are going in for upgraded packaging so that manufacturers of counterfeits find it difficult to replicate their products. Ex

Continue…..

Fill demand supply gap-Increase your reach. Increase effective communication – packaging

in simple regional language along with English.

Create brand loyalty and awareness programmes.

Some governing laws.

Indian Penal Code 1860

Drugs and Cosmetics Act, 1940Prevention of Food Adulteration Act, 1954Consumer Protection Act, 1986Bureau of Indian Standards Act, 1986 andTrademarks Act, 1999

Thank You………………