MS 611 Free Solved Assignment
Q 1 What do you understand by the term ‘rural markets’? What are the implications for an FMCG company wanting to enter rural markets, in terms of
(a) its rural product mix (b) its pricing strategy
Ans. For the rural India have their basis in two major developments. The first is that on account of rising purchasing power in the rural India, corporate sector is discovering the huge potential that must be realized by creating access and focusing marketing efforts in the rural segment.
The second reason is that rural markets and the rural consumers are different enough to demand differential marketing effort and it is important for you to be able to understand these differences as well as the marketing implications that flow from them.
The infrastructure and the marketing institution that characterise the rural markets are very different from the urban setting which the marketers are used to.
Another development which has focused marketer attention now on to the-rural markets is that slowly but surely the infrastructural scenario in the rural India is changing.
Supported by thirteen consecutive good monsoons (barring the bad patch of 2002-2003), the rural economy is definitely looking up.MS 611 Free Solved Assignment
A look at the successive plan outlays will demonstrate the attention that the policy makers are now directing at Rural Devel6ment.
The plan outlays have progressively escalated from Rs. 14,000 crores in the seventh plan to Rs. 30,000 crores in the eighth plan, and Rs. 60,000 crores in ninth plan to a mammoth 90,000 crores in the tenth plan.
This resource allocation is expected to be invested in the road network, communication linkages, power, health and educational services, making incremental changes to the rural lifestyles.
Added to all this, has been the growth in institutional credit for agriculture in rural India, a sector typically dependent on unorganized credit services.
There was a 250% increase in institutional credit for agriculture between 1995 and 2000, and a total of 24 million kisan credit cards have been issued since the inception of the scheme in 1998.
Let us look at some interesting facts about the rural India which were presented as part of the background paper at the FICCI Conference Rural Marketing and Communication on 24’h April 2003, by Pradeep Kashyap, President, Marketing and Research Team, New Delhi.
Consider the following: The number of transient rural supermarkets in India (haats) is around 470,000, which is more than the total number of retail chain outlets in the US (35000). MS 611 Free Solved Assignment
The Life Insurance Corporation of India in the year 2001-2002, sold 55% of its policies in rural India. The 24 million kisan credit cards issued in the rural sector far outstrip the 17.7 million credit+debit cards issued in the urban sector.
The amount of money sanctioned under the KCC scheme is a phenomenal Rs. 52,000 crores.
The consumption of electricity by the agriculture sector went up from 17.6% of the total consumption in 198081 to 29.2% in 1991-2000. During the same period the industry share has dropped from 58.4% to 34.8%.
These indicators show a definite trend towards growth of markets and indicate towards the potential of rural India.
We must however, while looking at these statistics be always conscious that these figures are contributed by more than 70% of the population and therefore while indicative of the directions of growth, are still, in per capita terms, small.
Efforts at market making and creating wider access may create a far more healthy picture but only if these developments are also accompanied by a parallel accretion of income and purchasing power in the rural sector.
It is, however, important for you to understand at the very outset that rural market are not linear extensions, in more difficult terrain, of the urban market and since the context of the marketing effort and the consuming behaviour of the target segment are both different, specific efforts to analyse the dynamics of the, rural market are required to be made, hence the need to study rural marketing as a specialized course of study
(a) its rural product mix
Ans:- Marketing mix comprises of various controllable elements like product, price, promotion and place. Success of any business enterprise depends on marketing mix and these four elements are like powerful weapons in the hand marketers.
Since behavioral factors of rural consumers are different and almost unpredictable in nature, the marketers have a challenging task to design marketing mix strategies for the rural sectors. MS 611 Free Solved Assignment
Due to considerable level of heterogeneity, marketers need to design specific programs to cater needs and wants of specific groups.
Product Mix :
Product is a powerful tool of an organization’s success. The products must be acceptable to rural consumers in all significant aspects.
The firm must produce products according to the needs and future demands of rural buyers.
The product features like size, shape, color, weight, qualities, brand name, packaging, labeling, services, and other relevant aspect must be fit with needs, demands and capacity of buyers.
(b) its pricing strategy
Ans:- (a) Low Price:- A rural customer is price-sensitive mainly because of his relatively low level of income and unit price of a product will have an impact on sales. Pricing the product at a lower price really attracts rural population for trying the products.
Though rural incomes have grown in the past decade, the money earned by the average rural consumer is still much lower than that of his urban counterpart.
A large part of the income is spent on the basic necessities, leaving a smaller portion for other consumer goods. MS 611 Free Solved Assignment
Examples- (1) Bharath Petroleum has introduced five kg gas cylinders to reduce initial deposit and refill cost for rural consumers. The deposit for 5 kg cylinder is Rs.350/- against Rs.700/- for 14 kg cylinder and refill cost is Rs.90/- against Rs.250/- for 14 kg cylinders.
(2) Small unit packs of shampoo, hair oil, toothpaste, biscuits and bathing soap.
(b) No-Frills Product: The production cost can be lowered by using less sophistication and rather concentrating on sturdiness and utility of the product. Examples-
(1. Maharaja Appliances Ltd., sells a sturdy Bonus washing machine, without a drier for rural market at Rs.2,990/-.
(2. The rural markets operate on a price-value proposition. LC Electronics has knocked off some of the frills in the products.
The idea is to give features that are absolutely indispensable. The rural consumer does not require Colden Eye feature and therefore base models do not have this feature.
Again not all consumers need 200 channels and therefore they have provided 100 channels in the base model. Everybody may not require a sound output of 350 watts and therefore they have given an output of 200 watts in base sets.
The rural consumer is value conscious. He will buy the product that gives value for money.
(c) Refill/Reusable Packaging: By giving refill packaging marketers can add value to the pricing of the product. Examples- Bourn vita available in refill pack and detergents made available in reusable packaging.
Q 2 Explain the role of Melas and Haats in rural distribution.
Ans:- Approximately 75% of Indian population resides in villages. Hence for many brands, rural markets are gaining importance.
Most the consumer brands such as HUL, ITC, and Dabur which got saturated in urban areas are trying to spread their presence in every luke and corner of Indian villages.
What are the tools these brands use to promote themselves? How are these different from the promotions in urban areas? Ever wondered a major part of rural marketing happens in haats, melas and mandis…MS 611 Free Solved Assignment
The above mentioned local media selling points are utilised instead of outdoor media though it is effective because of low literacy levels of rural people and differences in locations, the languages and cultural norms
Local media includes vehicles of written media – hoardings, wall paintings, leaflets or posters; mobile media – video vans, animal parades, transit media and folk media which include puppetry, theatre, music and dance and even acrobats and martial arts.
Haats: Tata Shakti utilised the opportunity provided by rural haats when it promoted it’s brand ‘Tata Shaktee Wider GC sheets’ by setting up stalls, organising games and gifting the visitors.
It was a success as they could connect to more than 5 million customers on a one-to-one basis. The three unique benefits it offers are targeted customer approach, touch and feel experience and communication in local language.
Melas: For example, Fair and lovely popularised in Allahabad Kumba Mela. About 25,000 melas are organised annually.
In rural India, annual melas organised with a religious or festive significance are quite popular and provide a very good platform for distribution. Rural markets come alive at these melas and people visit them to make several purchases.
According to the Indian Market Research Bureau, around 8000 such melas are held in rural India every year.
Rural markets have the practice of fixing specific days in a week as Market Days when exchange of goods and services are carried out. MS 611 Free Solved Assignment
This is another potential low cost distribution channel available to the marketers. Haats serve a good opportunity for promotion after brand building has been done at Mela.
Also, one satellite town where people prefer to go to buy their durable commodities generally serves every region consisting of several villages.
If marketing managers use these feeder towns they will easily be able to cover a large section of the rural population.
Melas are organized after harvest season, so the villager has enough money, which he will be ready to spend. Demonstration at Haat is essential to convert customers at haats since their attitude is far more utilitarian than that of visitors to a fair.
Q 3 How do culture and social class influence rural buying behaviour? Explain with reference to purchase of a consumer durable product.
Ans:- Culture is a very important aspect to understand the behavior of a consumer. It signifies the set of values of a particular community.
An individual decides to behave in a certain manner because of his culture. He gets all these values from his parents and family.
Every individual has different sets of values as compared to others, what they see from their childhood when they start practicing those habits, they become their culture.
Culture does vary from individual to individual, region to region, and country to country, so the marketer needs to pay a lot of attention in analyzing the culture of various regions and groups. MS 611 Free Solved Assignment
Throughout the process, the consumer is under influence of his culture as his friends, family, society, and his prestige influence him.
For a marketer, it is very crucial to take all these things into consideration while analyzing or observing a consumer’s behavior as they play a vital role in his behavior, perception and expectations
For example, if we observe the taste and preferences, people in southern India prefers rice to roti whereas north Indian people prefer roti than rice.
Social Classes :
The social groups or membership groups to which an individual belongs are the social classes that influence him. In the social classes, we usually find people with similar values, lifestyle and behavior.
Now a marketer or a researcher needs to pay attention here because generally the buying behavior of people in a particular social class to some extent is similar,
though the level of influence may be low or high, he can tailor his marketing activities according to different social classes.MS 611 Free Solved Assignment
Social perception is a very important attribute that influences the buying behavior of an individual.
Example − A person from a low-income group may focus on price while making the purchase while a person from a higher income group may consider the quality and uniqueness of the product.
Sometimes an individual also is influenced by a social group to which he does not belong, but wishes to get connected with others.
For example, in a college a student is in no need to buy a smart phone but purchases it to be part of that group and be accepted by them.
Marketers need to understand these situations well and plan their strategies accordingly for such social benefits. Individuals play various roles in the consumer buying process −
Initiator − Initiator is usually the person who comes up with an idea and suggests the purchase.
Influencer − He is the individual who actually pushes for the purchase. He highlights the benefits of the product. This individual can be from the family or friend or outside the group too.MS 611 Free Solved Assignment
Decision Maker − He is generally the person who takes the final decision or the final call after analyzing all the pros and cons of the product. He may not necessarily be the final buyer as may also take the decision on behalf of the consumer.
For example, a father might decide on buying a laptop for his son or a brother might decide on the best career option for his sister.
Buyer − Buyer is generally the end user or the final consumer who uses the product.
Rural India’s recently discovered predilection to enthusiastically consume everything from shampoo to motorcycles has been the subject of much discussion.
However the dominant view of the market is as seen through the product window (i.e. from the perspective of “how much of what is being bought”).
To gain a better insight into the structure and drivers of consumer demand in Rural India, we need to also develop a view of the market by looking at it through the consumer or ‘people’ window (i.e. from the perspective of “how many of what kind of people are buying”).
We need to enlarge the discussion from ‘the market’ to also include ‘the consumers’; from not just what is being bought, but also who is buying; and from thinking ‘product segments’ to also thinking consumer segments.
This article presents one vignette of the rural market based on data from the IRS 1998 study, conducted by the MRUC (Media Research Users Council), and ORG – MARG.
But first, a quick ‘context setting’ run through of what’s happening to rural demand for durables, as seen through the familiar product window.
Data presented at seminars and conferences on this is all drawn from the NCAER study – by far the best data source in the country on macro market facts.
It appears that NCAER, in its Indian Market Demographics report, 1998, has estimated that Rural India’s market for consumer durables as being worth around Rs. 4500 crores, with an average annual growth rate of around 8%. MS 611 Free Solved Assignment
They have introduced a very useful product segmentation of durables, where they have grouped durables into three price baskets – a sort of equivalent of the “premium, popular and low priced ” construct which we all instinctively use when thinking about packaged consumer goods brands.
Group I comprises a basket of basic low cost durables like watches, radios, irons, fans etc. Group II comprises higher order durables like black and white televisions, sewing machines, mixers and two-in-one music systems.
Group III comprises the high priced, high aspiration durables like colour TVs, refrigerators, motorised two wheelers and music systems – the litmus tests of whether Rural India is awakening to join the mainstream of New Indian Consumerism!
The first group is well penetrated, accounts for the lion’s share of rural durables demand, and is slow growing.
The second is modestly penetrated, accounts for one fifth of the total value of rural durables demand and is growing at a healthy clip, while the last group is nascent but explosively growing. And that is the view from the product window.
Q 5 What are the major objectives of sales promotion? Suggest rural sales promotion methods for the following products (any two)
(a) Tooth powder
(c) Cooking oil
Ans. Sales promotion is one of the many tools used in a retailer’s promotional mix. Sales promotional tactics include contests, coupons, freebies, loss leaders, point-of-purchase displays, premiums, prizes, product samples, and rebates.
Sales promotion may be referred to as “below the line” or “point of sale. ” For example, price reductions at the cash register or complimentary gifts with purchases all fall under sales promotional tactics. MS 611 Free Solved Assignment
The objectives of a sales promotion is to increase consumer demand, stimulate market demand, to get potential buyers to heed a call to action, increase the size of purchases and improve product availability using media and non-media marketing communications.
Sales Promotion Techniques :
Sales promotions can be directed to consumers, sales employees, or other retailers. Sales and coupons are some of the most common sales promotion tactics to stimulate interest and encourage consumers to purchase products.
Reward programs focus on customer retention and repeat purchases, awarding customers points, miles, or credits for purchases and future redemptions.
Besides price reduction and loyalty programs, point-of purchase displays are a common tactic used by brands to prompt “impulse” customer purchases.
For example, chewing gum and candy are often placed next to the register to increase sales of those products Other promotional tools include coupon booklets, mobile couponing, on-shelf couponing, as well as product signage and packaging,
which are strategically placed to encourage immediate customer sales. For new marketing initiatives, brands implement retail “mechanics” such as “Buy One, Get One Free” Or “Three for Two” promotions to encourage consumers to buy new market releases.
Brands also use sales promotion techniques to encourage supermarkets and stores to stock and display their products. MS 611 Free Solved Assignment
Some of these trade promotion activities are:
Trade allowances – Short-term incentives offered to retailers to stock up on a product.
Dealer loaders – Incentives used to persuade retailers to purchase and display a product.
Trade contests – Contests used to reward retailers that sell the largest quantity or highest units of a brand’s product.
Training programs – Training instructing dealer employees in selling the brand’s product.
Push money (also known as “spiffs”) – Extra commission paid to retail employees to push products.
Trade discounts (also called functional discounts) – Payments to distribution channel members for performing certain functions.
(a) Tooth powder
Ans:- It may not be a glamorous product, but toothpaste is an essential product consumers cannot do without. For more established brands, selling toothpaste products is relatively straightforward. MS 611 Free Solved Assignment
However, if you wish to launch a new toothpaste into the market or increase sales of a relatively new product, you must undertake some rigorous but strategic marketing.
There are several techniques and tools that can help you market effectively, but you have to be purposeful in your toothpaste marketing strategy and evaluate how your initiatives will enhance the credibility of your brand and influence potential customers.
It’s practical advice that small-business owners can apply to virtually any other type of product, too.
The toothpaste market has several similar competing products, and you have to brand yours in such a way that it stands out. Prominently display your logo and name on the packaging to boost brand awareness and sales.
Identify the specific qualities that clients are looking for in a toothpaste, such as the ability to whiten or strengthen teeth, freshen breath and protect against tooth decay, Ask the Dentist says.
Emphasize the characteristics of your toothpaste and the range of benefits that consumers will get from using it, always ensuring that the information you provide is factual and supported by research. MS 611 Free Solved Assignment
Consider Toothpaste Ads
Depending on your budget, you can leverage several print and electronic media channels to market your toothpaste products effectively.
Your toothpaste ads, which should highlight the top features of your toothpaste to attract maximum attention, can be placed with radio and television stations that reach a wide audience.
Local daily or national newspapers and health magazines also offer good opportunities to advertise your toothpaste.
Having a product website that is modern and easily navigable with links to social media helps you explain your product to readers, creating positive brand impressions.
In fact, you may even wish to create an app that encourages, monitors or rewards children for brushing their teeth, Marketing Dive says. If you can think of an activity that makes brushing fun, you could strike gold for your toothpaste brand.
(b) Biscuit MS 611 Free Solved Assignment
Ans:- 1) Offer people free biscuits in front of bakeries and retail stores. Make sure when you are offering free biscuits, you have banners, displays of free product in packaging for consumers to see and remember.
Also if coupons are used in Pakistan, give coupons in addition to free taste.
2) Sell in retail stores especial BUY ONE GET FREE PACKAGES OR 25% FREE BSICUITS IN THE PACKAGE FOR A LIMITED TIME.
3) Biscuits are consumed with tea. How about putting coupons (and also free biscuits) in tea packets.
4) Get tea stalls involved in marketing your biscuits. Tea stalls can offer 2 free biscuits with every cup of tea purchased and you provide those biscuits as long as they keep your biscuits for sale and display your banner.
But for a long term strategy, you will have to look at all the 4Ps (Product, Price, Placement and Promotion)
1) PRODUCT–.What do the consumers think/perceive of your product (taste, quality, freshness etc.), survey the consumers and see where you need to improve. It is not what the company thinks; it is what the consumer thinks of your product.
Is competition coming up with lot of new biscuits that consumers perceive to be lot tastier, healthier etc.and thus buying those biscuits? MS 611 Free Solved Assignment
2) PRICE—Is competition simply selling biscuits for less. If yes, you will have to take a look at if you want to do down that road and decrease the price or you want to improve the product so that you have a better product than the competition.
3) PLACEMENT—Is the product visible to consumers where they shop. Is it in the bottom shelf where it is hard to see and reach or at the eye level?
One of the benefits of the idea of promoting at tea stalls is that your product will get lot of visibility and hopefully very little for competition.
Q 5 Discuss the impact of technology on rural marketing.
Ans:- An understanding of the term “Rural Marketing” is essential to gain insights into the present article in its perspective. Rural Marketing is any marketing activity which identifies and serves the needs of the consumers living in villages.
Technological advancement will prove successful if and when marketers dwell in rural areas, live rural lives and understand the nuances of Rural Consumer Behaviour.
In recent times, the focus of marketing has been channelised on rural markets, as they offer huge opportunities that Multi Nationals can ill afford to ignore.
Green Revolution has ushered in the intelligent use of fertilizers, herbicides, high yielding agricultural crops, modern implements and improved use of technology which has resulted in increase in disposable income of the farmers, substantial use in purchasing power, decent lifestyle and a better standard of living of the large rural population.
The growing rural markets envisages tremendous marketing opportunities for growth and expansion as they are vast, attractive, scattered, homogeneous and is nearly three times the urban markets.MS 611 Free Solved Assignment
The rural markets may be beset with problems but are alluring and are virgin markets waiting to be explored. They pose challenges of availability, affordability, acceptability and awareness (4 A’s).
Tapping and capturing these markets can prove a mc kena’s gold the future marketing gurus. Here the focus of the marketer should be initially change the mindset of the rural folk to think urban.
Innovation is the key. Companies need to innovate profusely with their products and services. They need to design them specific to the rural community.
Pricing and credit facilities also poses a great threat. If companies want to sell to rural consumers, they need to extend credit till harvest time and accept payment in grains and also have oodles of patience when it is receivable time.
Technology and communications have penetrated into the hinterland of the villages.
Education and employment have resulted in a shift from ignorance to awareness, poverty to plenty and greater access to products and services like never before.
IT involves the electronic processing, storage and communication of information, where anything that can be represented in digital form is included in the term ‘information’.
Thus news, entertainment, personal communications, educational material, blank and filled-out forms, announcements, Schedules, and so on are all information.
Software programs that process data (searching, tabulating, and calculating, for example) are also information in this sense, representing a particular kind of intermediate good.
We can use standard economic characterizations to classify the different kinds of information. MS 611 Free Solved Assignment
For example, entertainment, personal communications, and sometimes news, are final goods.
Educational material, job announcements, or some kinds of news (weather news for farmers, for example) are intermediate goods, typically used for improving income-earning opportunities.
Information goods typically have the characteristic that one person’s use does not reduce their availability for another person.
Thus, message or weather news can be viewed by many people, simultaneously or sequentially.
Depending on the content of the news or message, different people may place different valuations on the information.MS 611 Free Solved Assignment
Only friends and relatives may be interested in a personal message, all farmers in a district may be interested in local weather news, and so on.
The ability to share information among users can impact the feasibility of providing it on a commercial basis.
Experience with Internet use in developed countries suggests that information exchange related to the completion of market transactions is especially valuable.
The ability of IT-based communications (combined with storage and processing) to bring together buyers and sellers more effectively represents major potential gains.
These gains can come about through lower search costs, better matching of buyers and sellers, and even the creation of new markets. MS 611 Free Solved Assignment
The successes of auction and employment websites in the US illustrate these gains.
In the rural Indian context, farmers selling their crops and buying inputs, parents seeking matrimonial alliances for their children, and job seekers are all potential users of Internet-based matching services.
Also IT makes the closeness between government agriculture extension workers and farmers.
For example farmers can get immediately any type of assistance from agriculture extension workers of agriculture department regarding when to sow the crop, when to harvest and treatment against pests and weeds and other climatic hazards through the use of IT tools like e-call centers, web-portals, mobile technologies (including CDMA and GPRS).
So this process makes the effectiveness of various schemes and programmes undertaken by the government of India for the green revolution and development of rural economy of India.
Because now with the implementation of information technology in rural sectors specially agriculture sectors there is no wastage in terms of money and time for implementing any development scheme otherwise a lot of money and time are wasted for making interaction with farmers by agriculture extension workers and sometimes some scheme get failed also.
For example government of Andhra Pradesh launched “Farmers call centre” as a pilot project on July 1, 2003 to serve the farmers queries and provide them solutions.
It was unique and first of its kind in India at that time and became very popular among the farmers with a lot of response and queries.MS 611 Free Solved Assignment
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