____________________________________________________RURAL MARKETING

The Overview…

In our country over 70% of the total population live in villages. There are states like
U.P, M.P, Bihar, Rajasthan and Orissa where rural population varies form 80 to 90 per cent.
Agriculture and agriculture related activities contribute to about 75% of the income in rural
areas. Over 6, 31,307 villages, 700 million people a myriad of languages many traditions and
a rich culture. A vibrant land with a long History. Rural Indian people are known as much for
their warmth as their diversity. The real “BHARAT”.

“EXPLORE THE RURAL MARKETS

DO NOT EXPLOIT THEM”.

INDIAN ECONOMY

RURAL SECTOR URBAN SECTOR

NON-
AGRICULTURAL
AGRICULTURAL

--CROP CULTIVATION --INDUSTRY

--ANIMAL HUSBANDRY --BUSINESS
--DAIRYING --SERVICES
--FISHERIES
--POULTRY
--FORESTRY

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Till recently, the focus of marketers in India was the urban consumer and by large no
specific efforts were made to reach the rural markets. But now it is felt with the tempo of
development accelerating in rural India, coupled with increase in purchasing power, because
of scientific agriculture, the changing life style and consumption pattern of villagers with
increase in education, social mobility, improved means of transportation and its various
satellite channels have exposed rural India to the outside world and hence their outlook to life
has changed. Because of all these factors, rural India is attracting more and more marketers.

Increase in competition, saturated urban markets, more and more new products
demanding urban customers, made the companies to think about new potential markets. Thus,
Indian rural markets have caught the attention to many companies, advertisers and
multinational companies. According to a recent survey conducted by National Council for
Applied Economic Research (NCAER), the purchasing power of the rural people has
increased due to increase in productivity and better price commanded by the agricultural
products. By and large this rise in purchasing power remains unexploited and with growing
reach of the television, it is now quite easy for the marketers to capture these markets.

Rural marketing has become the latest mantra of most corporates. Companies like
Hindustan Lever, Colgate, Palmolive, Britannia, and even Multinational Companies (MNCs)
like Pepsi, Coca Cola, L.G., Philips, and Cavin Kare are all eyeing rural to capture the large
Indian Market.

Coming to the frame work of Rural Marketing broadly involves reaching the rural
customer, understanding their needs and wants, supply goods and services to meet their
requirements, carrying out after sales service that leads to customer satisfaction and repeat
purchase/ sales.

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Concept of Rural Marketing…

Rural marketing is a process of developing, pricing, promoting, distributing rural-

specific goods and services leading to exchange between urban and rural markets which
specifies consumer demand and also achieves organizational objectives.

Rural marketing involves a two-way marketing process, however, the prevailing flow
of goods and services from rural to rural areas cannot be undervalued.

Since demands’ of urban and rural folks are different, companies should manufacture
products to suit the rural demand rather than dump urban products on rural consumers.

The process should be able to straddle the attitudinal and socio-economic disparity
between the urban and rural consumers.

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Rural Marketing in India…

A thorough understanding of the rural markets has become an important aspect of

marketing in the Indian marketing
environment today. This attraction
towards the rural markets is
primarily due to the colossal size of
the varied demands of the 230
million rural people. In fact, the
rural markets are expanding in
India at such a rapid pace that they
have overtaken the growth in urban
markets. This rate of growth of the rural market segment is however not the only factor that
has driven marketing managers to go rural. The other compelling factor is the fact that the
urban markets are becoming increasingly complex, competitive and saturated.

Further, the vast untapped potential of the rural markets is growing at a rapid pace.
The policies of the government largely favour rural development programmes. This is clearly
highlighted by the fact that the outlay for rural development has risen from Rs 14000 crores
in the 7th plan to Rs 30000 crores in the 8th plan period. These figures also prove that the
rural market is emerging stronger with a gradual increase in disposable income of the rural
folk. In addition, better procurement prices fixed for the various crops and better yields due to
many research programmes have also contributed to the strengthening of the rural markets.
Thus, with the rural markets bulging in both size and volume, any marketing manager will be
missing a great potential opportunity if he does not go rural.

Distinctiveness of Rural Markets…

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The Indian rural market with its vast size and demand base offers great opportunities
to marketers. Two-thirds of countries consumers live in rural areas and almost half of the
national income is generated here. It is only natural that rural markets form an important part
of the total market of India. Our nation is classified in around 450 districts, and
approximately 630000 villages, which can be sorted in different parameters such as literacy
levels, accessibility, income levels, penetration, distances from nearest towns, etc. The
features of Indian rural markets are:

• Major income from agriculture: Nearly 60 % of the rural income is from

agriculture. Hence rural prosperity is tied with agricultural prosperity.
• Low standard of living: The consumer in the village area do have a low standard of
living because of low literacy, low per capita income, social backwardness, low
savings, etc.
• Traditional Outlook: The rural consumer values old customs and tradition. They do
not prefer changes.
• Diverse socio-economic backwardness: Rural consumers have diverse socio-
economic backwardness. This is different in different parts of the country.
• Infrastructure Facilities: The Infrastructure Facilities like roads, warehouses,
communication system, and financial facilities are inadequate in rural areas. Hence
physical distribution becomes costly due to inadequate Infrastructure facilities.

Problems Related To Rural Marketing…

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Although the rural market does offer a vast untapped potential, it should also be
recognized that it is not that easy to operate in rural market because of several problems.
Rural marketing is thus a time consuming affair and requires considerable investments in
terms of evolving appropriate strategies with a view to tackle the problems.

The major problems faced are:

• Underdeveloped People and Underdeveloped Markets: The number of people

below poverty line has not decreased in any
appreciable manner. Thus underdeveloped
people and consequently underdeveloped market
by and large characterize the rural markets. Vast
majorities of the rural people are tradition
bound, fatalistic and believe in old customs,
traditions, habits, taboos and practices.

• Lack of Proper Physical Communication Facilities: Nearly fifty percent of the

villages in the country do not have all weather roads.
Physical communication of these villages is highly
expensive. Even today most villages in the eastern
parts of the country are inaccessible during the
monsoon.

• Media for Rural Communication: Among the mass media at some point of time in
the late 50's and 60's radio was considered to be a potential medium for
communication to the rural people. Another mass media is television and cinemas.
Statistics indicate that the rural areas account for hardly 2000 to 3500 mobile theatres,
which is far less when compared to the number of villages.

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• Dispersed Market: Rural areas are scattered and it is next to impossible to ensure the
availability of a brand all over the country. Seven Indian states account for 76% of the
country’s rural retail outlets, the total number of which is placed at around 3.7
million. Advertising in such a highly heterogeneous market, which is widely spread,
is very expensive.

• Many Languages and Dialects: The number of

languages and dialects vary widely from state to
state, region to region and probably from district to
district. The messages have to be delivered in the
local languages and dialects. Even though the
number of recognized languages is only 16, the
dialects are estimated to be around 850.

• Low Per Capita Income: Even though about 33-35% of gross domestic product is
generated in the rural areas it is shared by 74% of the population. Hence the per capita
incomes are low compared to the urban areas.

• Low Levels of Literacy: - The literacy rate is low in rural areas as compared to urban
areas. This again leads to problem of communication for promotion purposes. Print
medium becomes ineffective and to an extent irrelevant in rural areas since its reach is
poor and so is the level of literacy.

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• Prevalence of spurious brands and seasonal demand: - For any branded product
there are a multitude of ‘local variants’, which are cheaper, and, therefore, more
desirable to villagers.

• Different way of thinking: - There is a vast difference in the lifestyles of the people.
The kind of choices of brands that an urban customer enjoys is different from the
choices available to the rural customer. The rural customer usually has 2 or 3 brands
to choose from whereas the urban one has multiple choices.

Constraints/Hurdles Faced…

With the change in the economic policies of the government, many companies have
ventured into the rural markets. However, their efforts have not been sufficiently rewarded.

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The various constraints can be enumerated as:-

• Lack of Infrastructure: The basic facilities like roads, transport facilities, electricity,
telecommunication, etc are missing in most of the rural areas of India.

• Market Planning and Awareness: Lack of awareness and understanding of

consumer behavior in rural markets, creates problems in formulating strategies and
plans.

• Designing the Products: There is a drastic difference in the utility value in the urban
and rural market. A product with a particular design and pattern may not find
acceptance in rural markets, but may be a success in urban areas.

• Inadequacy of Channels of Distribution: Due to comparatively less focus on rural

markets – the exploitation of the rural market to the fullest extent has not taken place.

• Communication: With the given level of literacy and awareness of rural population,
communication constitutes a major hurdle in exploiting rural markets. Various factors
like language, religion, superstitions, rigidity etc make communication in rural
markets more difficult.

• Right to Decision: In most rural families, it is the head of the family who decides
what to buy and when to buy. Consequently his purchase decisions are influenced by
his own personality traits, rather than the aptitude and perception of the actual
consumers of these goods.

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• Pricing of the Product: Price factor is more crucial in rural areas than in urban
markets. The consumer must feel satisfied and benefited after paying the price for a
particular product.

Mass media…

The past two decades have seen a dramatic expansion of exposure to mass media in
rural areas. Since these are, almost, by definition urban media at present is an

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overwhelmingly urban portrayal of life and values, their impact on attitudes and behavior has
been profound.

• Radio is the medium with the widest coverage. Studies have recently shown high
levels of exposure to radio broadcasting both within urban and rural areas, whether or
not listeners actually own a set. Many people listen to other people's radios or hear
them in public places. Surveys indicate that in rural areas more than a one third of the
married women of reproductive age have listened to a radio within the last week.
• Television, video and films expose viewers to a common window on styles of life
and behaviour, an impact increased by the supranational reach of the media.
Television is extremely popular where it is
available. Television increasingly exposes viewers to
a wide range of national, regional and
international viewpoints. Rural exposure to
television has been lower by far than radio.

The mass media brings change wherever they go; but change does not have to be
random. Successful media campaigns have changed attitudes and behaviour in a variety
of areas, from basic literacy to health care and family planning.

• But Advertising to rural consumers continues to be a hit and miss affair. At best, it is
an exercise where communicators grapple with issues of language, regional and religious
affiliations and local sensitivities. Most often finding the right mix that will have a pan-
Indian rural appeal is the greatest challenge for advertisers. But more often than not,
marketers throw in the towel going in for simplistic solutions: such as going in for a mere
transliteration of advertising copy. The result: advertising that is rooted in urban
sensitivities and do not touch the hearts and minds of the rural consumer.

Various other reasons making the mass media ineffective are: -

1. The Indian society is a complex social system with different castes, classes, creeds
and tribes. The high rate of illiteracy added to the inadequacy of mass media
impedes reach almost to 80% of India's population who reside in village.

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2. Mass media reaches only 57% of the rural population. Generating awareness,
then, means utilizing targeted, unconventional media including ambient media.

3. Mass media is too glamorous, interpersonal and unreliable in contrast with the
familiar performance of traditional artist whom the villager could not only see and
hear, but even touch.

4. The communication and the design of marketing mix needs to be different, as

what attracts one need not attract the other as well. So again, even if the media
reaches a rural consumer, there might not be an impact as he may fail to connect
to it due to his different lifestyles. Moreover rural marketing is usually related
with products having low profit margins and high sales volumes and hence it is
more important to emphasize the availability of the product to all potential
consumers than an overdose of expensive inefficient mass-media strategies.

To understand the way the rural markets work - we need to go to these markets and
spend time there in understanding them. We live in surroundings where the things are
completely different from what the rural customer experiences. And we can't understand him
unless we go and spend time there. Things like what time does he get up, etc need to be
studied and customer needs to be understood. Also these studies need to be passed on so
others can also benefit from the ground works done and enhance them further.

We need in depth studies of the market, the medium, the message and the rural
customer in center of all these to understand the rural markets completely.

The winning combination will be a good product with consistent quality and
availability. Once you earn the villagers' loyalty (and they are known for their brand loyalty),
it will be difficult for competitors to take away your customers.

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• RETAILERS: -For the rural customer

the choices available are limited. So the
retailer plays a very big role in the
purchase decision. Data on rural
consumer buying behavior indicates that
the rural retailer influences 35% of
purchase occasions. The rural customer
goes to the same shop always to buy his
things. And there is a very strong
bonding in terms of trust between the two. The buying behavior is also such that the
customer doesn't ask for the things by brand but like - "paanch rupey waali chaye dena".
Now it is on the retailer to push whatever brand he wants to push as they can influence
the buyer very easily and very strongly on the preferences. Therefore, sheer product
availability can determine brand choice, volumes and market share. Thus distribution is
the key factor for the success of rural marketing.

This includes, maintaining favorable trade relations, providing innovative incentives

to retailers and organizing demand generation activities among a host of other things.

In rural areas, the place where consumers prefer to shop is very important, because it
has been found that they buy their requirements from the same shop. This high shop loyalty is
accentuated by the "khata" system, which is widely practiced. Hence, if the product is not
available at the place where the consumer shops, he would buy some other available brand.

• RURAL FOLK MEDIA: -As a general

rule, rural marketing involves more
intensive personal selling efforts
compared to urban marketing. Marketers
need to understand the psyche of the
rural consumers and then act
accordingly. To effectively tap the rural

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market a brand must associate it with the same things the rural folks do. Utilizing the
various rural folk media to reach them in their own language and in large numbers so that
the brand can be associated with the myriad rituals, celebrations, festivals, melas and
other activities where they assemble, can do this.

In the Indian rural marketing context, perhaps linguistics could provide a new
approach to tackling communication issues and arriving at a better understanding of rural
consumers. Also, the manner in which symbols and icons are used, which provides insights
and clues into the mindsets of rural audiences, can be deployed to grab their attention.

Though television and radio fare better then print, the best way to kick start sales are
events. Where the company meets and interacts with the audience, talks to them in their own
idioms and tells them what this product offers. Marketers should think up games and events,
which would attract the attention of the villagers from all professions uniformly. This would
require local level goods creation and social negotiation skills.

The best choice comes from weekly bazaars. With varying populations, one shop or
few shops cannot really cater to all the needs of the consumers. Thus, it makes sense to have
weekly outlets that caters to the needs of the consumers in these regions. Frugal though the
rural consumer is success from these weekly outlets is that much more pertinent.

What attracts her is the freshness of the produce, buying in the bulk for a week and
the bargaining power. These markets (haats and shandies) have high potential that corporates
are now waking up to. The scope that these markets offer to distribution is something that has
to be seriously considered. Distribution is clearly the key to rural marketing.

• TRADITIONAL MEDIA can be used to reach

these people in the marketing of new concept.
The traditional media with its effective reach,
powerful input and personalized communication
system will help in realizing the goal. Besides
this when the advertisement is couched in
entertainment it goes down easily with the
villager.

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The traditional media like folk/street plays, wall signs/shop paintings, van
campaign/Haat events (weekly fairs), melas, home-to-home contacts and product
demonstrations can be effectively used for this purpose.

Strategies…

The rural markets are expected to witness a different kind of a shift. As companies
aggressively compete to get a higher share of the rural pie, competitive advantage will lie
with those who have a higher reach.

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Marketing according to a leading management theorist Peter Druker can be put in this
way “There will be always, one can assume, be need for some selling. But the aim of
marketing is to make selling superfluous. The aim of marketing is to know and understand
the customer so well that the product or service fits him and sell itself. Ideally, marketing
should result in a customer who is ready to buy. All that should be needed then is to make the
product or service available."

Through this we feel that the gist of mktg. in rural & urban is the same. It is nothing
but teasing the minds of people, their desires, needs, expectations & playing with their
psychology. But the market for a product may vary in rural & urban area and the marketing
strategies to market the product is also different in urban and rural area.

The strategies should revolve around what attracts the rural customer to a product. For
example –

• Packaging:

Rural customers are usually daily wage earners and they don’t have monthly incomes
like the ones in the urban areas have. So the packaging is in smaller units and lesser-priced
packs that they can afford given their kind of income streams.

Packaging and package sizes are increasingly playing a vital role in the decision
making process of the rural buyers. Certain products like detergents and paste are bought in
large quantities, whereas shampoos, toilet soaps, eatables are bought in smaller pack sizes.
The reasoning behind this is that the products that are common to family members are bought
in large pack sizes, whereas individual-use products are preferred in smaller packs.

A successful example is that of HLL’s project ‘Operation Bharat’. HLL supplied

hampers for Rs. 5, 10, 15 and 20, each of which had a Clinic shampoo bottle, a tube each of

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Pepsodent, Fair & Lovely, and Pond’s Dreamflower Talc, in different sizes and
combinations. The idea behind this strategy was to have a product for hair care, dental care,
skin care and body care.

• Value for money:

Rural consumers are quite brand conscious. A rural consumer wants value for money
minus the frills. Zany advertising and marketing would be a no-go for this sector. A high
price tag usually deters the rural consumer from purchase. To counter this, companies need to
resort to low unit price strategy to expand sales.

A good example of this would be the sachet revolution and combi-packs. According
to a survey, 95 percent of total shampoo sales in rural India are by sachets. Colgate has
followed the very successful sachet route by introducing the toothpowders in 10g sachets of
Rs. 1.50 each and the toothpaste with Super Shakti in 15g packs of Rs. 3 each. The entrant
can also offer attractive exchange and money back schemes for its middle and lower
segments.

• Convenience:

An example is what Colgate did to its tooth powder packaging. Firstly – it made
sachets as was required by their income streams. Secondly - since many households don’t
have proper bathrooms and only have a window or things like that to keep such things -- it
was wise to cap this sachet for convenience of storage while use. So this is what they did.

• Demonstration:

Direct Contact is a face-to-face relationship with people individually and with groups
such as the Panchayat and other village groups. Such contact helps in arousing the villager's
interest in their own problem and motivating them towards self-development.

Demonstration may be:

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A. Method demonstration
B. Results demonstration

The five steps to make any demonstration effective are:

1. Information about people

2. Objectives to be accomplished
3. Demonstration plan & Execution of the plan
4. Evaluation of the demonstration
5. Reconsideration after evaluation.

In result demonstration, with help of audio -visual media can add value. Asian Paints
launched Utsav range by painting Mukhiya's house or Post office to demonstrate that paint
don’t peel off.

• Promotion and marketing communication:

While planning promotional strategies in rural markets, marketers must be very

careful in choosing the vehicle to be used for communication. They must remember that only
16% of the rural population has access to a vernacular newspaper. Although television is
undoubtedly a powerful medium, the audiovisuals must be planned to convey a right message
to the rural folk.

The marketers must try and rely on the rich, traditional media forms like folk dances,
puppet shows, etc with which the rural consumers are familiar and comfortable, for high
impact product campaigns.

Thus, a radical change in attitudes of marketers towards the vibrant and burgeoning
rural markets is called for, so they can successfully impress on the 230 million rural
consumers spread over approximately six hundred thousand villages in rural India.

• Wall Paintings

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Wall Paintings are an effective and economical medium for advertising in rural areas.
They are silent unlike traditional theatre .A
speech or film comes to an end, but wall
painting stays as long as the weather allows
it to. Rural household’s shopkeepers and
panchayats do not except any payment, for
their wall to be painted with product
messages.

The greatest advantage of the medium is the power of the picture completed with its
local touch. The images used have a strong emotional association with the surrounding, a feat
impossible for even a moving visual medium like television, which must use general image to
cater to greatest number of viewers.

Such a promotion has led to an interesting outcome. For both, washing and for taking
bath - one requires water. Now for rural markets there are three sources of water - wells, hand
pumps and ponds.

For the first in the history of advertising - these are being branded. Special stickers
were put on the hand pumps, the walls of the wells are lined with advertising tiles and
tinplates are put on all the trees surrounding the ponds. The idea is to advertise not only at the
point of purchase but also at the time of consumption.

So the customer could also see the advertising when he was bathing or washing. Now,
the customers who bought these brands got a sense of satisfaction by seeing their choice
being advertised in these places while a question was put in the minds of the customers who
had bought other brands. So this was an innovative strategy that worked quite well.

Example of successful use of wall painting is by Nirma, which makes extensive use of
wall paintings, also a soil conditioner called Terracare uses images of Sita, Luv and Kush to
attract the rural consumer.

• Haats & Melas

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The countries oldest tradition holds the key to

rural penetration. The average daily sale at a
Haat is about Rs.2.25 Lacs while the annual
sales at melas amount to Rs.3, 500 crore.

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. 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.

Dealing with this sector needs innovative and localized approaches: Watch major
Titan Industries plans to aggressively approach the rural and semi-urban markets in India by
creating a separate image for its low-priced Sonata brand. The company has opened its first
showroom in Bhopal and nine more showrooms are to be opened across the country. The
marketing strategy being followed is to keep the prices of the watches at an affordable range
of Rs 295-1,195 and create a niche market for the brand.

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They will not open showrooms in metros such as Mumbai or Delhi for Sonata brand.
The target segment would be the Rs 295-700 customers. They plan to open showrooms at
locations, which rural customers visit frequently such as bus terminals, railway stations
among others. Also, there would be a range of 300 models from smart plastics and all
weather steel to all gold and all-occasion gold and leather. Titan will be looking for the
marriage season, which will start from April-June where the rural customers become actual
buyers.

Another innovative idea is that of Sanjay Lalbhai's Ruf and Tuf jeans is targeted at
the rural market. And they are leaving nothing to chance. Arvind Mills is teaching tailors in
the villages how to stitch the jeans.

• Mobile Traders:

Even though they have been used before for redistribution,

Cycle Salesman could possibly emerge as one of the most cost-
effective ways of selling directly to rural consumers. The lack of
motor able roads and high distribution costs are not a hindrance
any more. Mobile traders score over the conventional wholesale channel on both counts of
cost and reach. They travel either on foot or on cycles. That means transportation costs are
virtually non-existent. Besides these traders can target smaller villages, which conventional
distribution channels often do not touch?

The mobile traders can play a crucial role in buying decision. Most rural women are
loath to visit retail outlets. Mobile traders therefore are a smart way of reaching women in
their home environment. The women rely on these mobile traders to sell them goods in the
security of their home.

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Rural India is a marketer’s dream given its tremendous potential and increasing
money power. The formula of success for companies entails a complete shift in marketing
and advertising strategies.

"To be successful in the rural market, remember- there is no unity in diversity, but
act local while thinking global."

If Distribution is the Key, then what’s going wrong???

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Unfortunately, most marketers of today try to extend marketing plans that they use in
urban areas to the rural markets and face, on many occasions failure. They should adopt a
strategy that appeals individually to the rural audience and formulate separate annual plans
and sales targets for the rural segment.

Changes must be made in the marketing mix elements such as price, place, product
and promotion. Corporate marketers should refrain from designing goods for the urban
markets and subsequently pushing them in the rural areas. The unique consumption patterns,
tastes, and needs of the rural consumers should be analyzed at the product planning stage so
that they match the needs of the rural people.

• Distribution costs and non-availability of retail outlets are major problems

faced by the marketers. But if one takes a closer look at the characteristic features of the
rural market, it will be clear that distribution in fact, is no problem at all. For most
companies wanting to enter the rural markets, distribution poses a serious problem.

• The problems of physical distribution and channel management adversely

affect the service as well as the cost aspect. The existent market structure consists of
primary rural market and retail sales outlet. The structure involves stock points in feeder
towns to service these retail outlets at the village levels. But it becomes difficult
maintaining the required service level in the delivery of the product at retail level.

Solution…

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DELIVERY VANS:-

The way to overcome the problem would be by using company delivery vans, which
can serve two purposes- it can take the products to the customers in every nook and corner of
the market and it also enables the firm to establish direct contact with them and thereby
facilitate sales promotion. However, only the bigwigs can adopt this channel. The companies
with relatively fewer resources can go in for syndicated distribution where a tie-up between
non-competitive marketers can be established to facilitate distribution.

An example of the successful strategy is that of Tata Cellular in rural Andhra

Pradesh. Inspite of low advertisement budget, they created a hybrid distribution channel, with
four tiers direct, retail, showroom and franchise outlets that were designed for easy reach.
Specific road shows to rope in different segments such as transporters, traders and PSU
employees were organized.

Mr Harish Bijoor, CEO, Zip Telecom, says, "Rural markets need to be approached
differently and cannot be understood as extensions of urban markets. Most marketers err on
this count. Advertising that believes in translating the English version into the vernacular
cannot capture the rural heart. For rural markets, one needs to think in the local language,
remote with the local feel and mood and visualize advertising that is rich in this context."

To attract rural buyer’s advertisers need to use simple films showing how a product is
to be used. Rajdoot Paints issues such functional advertising very effectively.

Rural V/S Urban…

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SR. NO. ATTRIBUTE RURAL URBAN

1 Population Density Low High
2 Occupation Agriculture Trade, Industry, and
Services.
3 Economy Close and less Open and Monetized.
monetized.
4 Infrastructure Poor and Weak. Abundant and Strong.
5 Attitude to Modernization Tradition bound. Ready for adaptation
and change.
6 Family Structure Joint Nuclear
7 Possession of House hold Low High
assets
8 Mobility Low High
9 Literacy Low High
10 Exposure Low High
11 Attitude towards Life Fatalistic Scientific
12 Manufacturing Activity Low High
13 Distribution Outlets Fewer More

Marketing-Mix…

Aspect Rural Urban

Product
a) Awareness Low High
b) Concept Less Known Known
c) Positioning Difficult Easy

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____________________________________________________RURAL MARKETING

d) Usage Method Difficult to grasp Easily rasped

e) Quality Preference Moderate Good
f) Features Less Important Important
Price
a) Sensitive Very much Yes
b) Level Desired Low-Medium Medium-High
Physical Distribution
a) Channels Village Shops, Haats & Wholesalers&
jatras. Retailers.
b) Transport Facilities Average Good
c) Product Availability Limited High
Promotion
a) Advertising TV, Radio, Print Media to Print, Audio-Visuals,
some extent, More Outdoors, Exhibitions.
Languages

b) Personal Selling Occasionally Door-to-Door

Frequently
c) Sales Promotion Gifts, Price Discounts Contests, Gifts, Price
Discounts
d) Publicity
Less Good Opportunities.
Limited Adequate scope

Present position…

Change is the “LAW OF NATURE”. Though change is common, some changes

seem peculiar and paradoxical. Today, we witness in Indian Economy one such a bi-faceted
change – a change from national to global on one side and, urban to
rural on the other.

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“RURALISE” is among the Buzz words of this new era. Though change is evolutionary and
characteristic of a developing nation with huge population and vast resources, one requires a
visionary entrepreneurship to respond proactively to it.

The first five years of new millennium will belong neither to the urban markets,
which have reached saturation and where margins are under pressure nor to the export
markets, which suffer from inadequate infrastructure back home, and uncompetitive price
overseas. But it belongs to RURAL MARKETING.

“RURAL MARKETING” has become the latest mantra of most corporates. FMCG
majors like HLL, P&G, PARLE, COLGATE PALMOLIVE, BRITANNIA, etc. were the first
to wake up this fact. Even MNC’s like LG, PHILIPS, WIRLPOOL, and other consumer
electronic majors are also gung-ho about the rural segment. The fever has spread the
consumer durable companies and beyond.

Today, many of the Corporates and MNC’s look at these markets by compulsion as
well as by choice. Compulsion, because markets are saturated, and there is no where to go.
Choice: - because they are attractive and viable.

Profile of Rural Consumers…

Importance of customs

This however raises a fundamental problem of fathoming the differences between

urban and rural markets in India. This is of paramount importance in the Indian marketing
environment as rural and urban markets in our country are so very diverse in nature that
urban marketing programmes just cannot be successfully extended to the rural markets.

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____________________________________________________RURAL MARKETING

The buying behaviour demonstrated by the rural Indian differs tremendously when
compared to the typical urban Indian. Further, the values, aspirations and needs of the rural
people vastly differ from that of the urban population. Basic cultural values have not yet
faded in rural India. Buying decisions are still made by the eldest male member in the rural
family whereas even children influence buying decisions in urban areas. Further, buying
decisions are highly influenced by social customs, traditions and beliefs in the rural markets.
Many rural purchases require collective social sanction, unheard off in urban areas.

Another contrasting feature is the precision in the assessment of purchasing power of

the consumers. In urban markets, income levels are generally used to measure purchasing
power and markets are segmented accordingly. However, this measure is not adequate for
defining the purchasing power in rural areas because of the single fact that rural incomes are
grossly underestimated. Farmers and rural artisans are paid in cash as well as in kind.
However, while reporting their incomes, they report only cash earnings, which then affect the
calculation of their purchasing power.

This is the reason why marketers are often surprised to find that their products are
sometimes consumed by people who, according to their surveys and estimates do not have
the purchasing power to do so. Every marketing manager must therefore make an attempt to
understand the rural consumer better so that he can plan his strategies in such a manner that
they produce the desired results.

Consumer Behavior, Influences and Its Implications…

A stereotype of the rural consumer or of rural consumer behavior is absent and

this creates problems as well as opportunities for the marketer. Variations in behavior reflect
geographical, demographical and behavioral influences on lifestyle, which provides
marketers with options to segment the market.

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____________________________________________________RURAL MARKETING

To understand rural buying behavior, a marketer must first understand the

factors that influence buying behavior and the variations to behavior.

These help to generate information upon which a marketer can create bases to
segment the rural market taking the following factors consideration:

 Environment of the consumer

 Geographical Influences
 Influence of Occupation
 Place of Purchase
 Creative use of Products

Obviously rural consumers do make some purchases from urban areas (towns
etc) because there are a few product categories where rural distribution is still comparatively
low and therefore the consumers buys from towns; and in certain cases, the consumer seeks
variety. In the case of biscuits, toilet soaps and washing powders, the consumers may
perceive the range in villages as limited.

The Next Step…

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____________________________________________________RURAL MARKETING

The potentialities of the rural market are indeed

great. With the changing economic conditions in the
country and with emerging rural markets are bound to
yield rich dividends.

All this calls for concentrated and coordinated

action on the part of both, the government and the
industry.

The government’s role lies primarily in

developing the infrastructure, e.g. a good network of
roads in the interiors of rural India, speedy arrangements
for better light, water and irrigation facilities, financial
and technical assistance in setting up industries in villages, and distribution of their products.
The government’s role will be equally important in conducting rural market surveys and
compilation of vital statistics and their publication for the benefit of business and industry.

A hand-in-hand working of the government and industry will definitely help define a
smooth road to development and growth of rural market.

Hungry Kya???

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Its Biscuit Time folks!!!

Biscuits are something that doesn’t need an introduction as such. Everyone everyday
have them. Some have it for their taste, some for their health factor, some to fulfill their
hunger and so on.

A product that is consumed almost daily. A product that has no boundaries. There are
biscuits for all kinds of teeth. Sweet, Creamy, Salty, Semi Sweet, Sweet and Salty etc are the
various kinds of biscuits that are available in today’s market, fitting all kinds of mood. And if
you look at the history of biscuits, it dates back to second century Rome and it comes from
the Latin word "bis coctum" which mean twice baked.

As people started to explore the globe, biscuits became the ideal traveling food,
because they stayed fresh for long periods. Biscuits really boomed during the seafaring age,
when they were sealed in airtight containers to last for months at a time. In fact, the countries
where biscuits are most popular today, such those in Western Europe, led the seafaring
charge. The present biscuits scenario in India looks like a battle front.

The battle being led by stalwarts like Britannia and Parle with close competition from
other companies like ITC, Nutrine, HLL Kissan, Kwality and even International Brands like
Kellogg’s, Nestle, Sara Lee, United Biscuits etc. Britannia is undoubtedly the leader with
Brands like Tiger, Little Hearts, and Milk Bikis etc.

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____________________________________________________RURAL MARKETING

Britannia's Tiger biscuits are doing a world of good to the company. It is indeed
selling like hot pancakes in the rural areas which actually constitute 56% of the biscuit
market.

But in the Glucose segment Parle G is the market leader. Parle G has indeed become
a household name. Not to forget the Market niches coming in the form of Hll and ITC. Hll
bistix(biscuits sticks that can be dipped into flavours like Strawberry and Chocolate) is
indeed an innovation and will surely have and is surely having a lot of takers. The pricing
adopted by HLL is also kind of unique. Its charging only Rs 5 for Bistix.

Whereas, ITC's foray into the world of Biscuits seems to be paying off good. ITC
Sunfeast brand of biscuits with a new and peppy flavour of Marie, Orange will surely
generate a kind of curiosity in the minds of biscuit consumers. The toughest competition for
these established players come from the unorganized market. This market is indeed
interesting to study. It consists of "n" number of companies. They are more or less
Counterfeiters or Cloners.

Introduction…

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____________________________________________________RURAL MARKETING

A long time ago, when the British ruled India, a small factory was set up in the
suburbs of Mumbai city, to manufacture sweets and toffees. The year was 1929 and the
market was dominated by famous international brands that were imported freely.

Despite the odds and unequal competition, this company called Parle Products,
survived and succeeded, by adhering to high quality and improvising from time to time. A
decade later, in 1939, Parle Products began manufacturing biscuits, in addition to sweets and
toffees. Having already established a reputation for quality, the Parle brand name grew in
strength with this diversification. Parle Glucose and Parle Monaco were the first brands of
biscuits to be introduced, which later went on to become leading names for great taste and
quality.

Evolution Of Parle Products Ltd..

Parle-G has been a strong household name across India. The great taste, high
nutrition, and the international quality, makes Parle-G a winner. No wonder, it's the
undisputed leader in the biscuit category for decades. Parle-G is consumed by people of all
ages, from the rich to the poor, living in cities & in villages. While some have it for breakfast,
for others it is a complete wholesome meal. For some it's the best accompaniment for chai,
while for some it's a way of getting charged whenever they are low on energy. Because of
this, Parle-G is the world's largest selling brand of biscuits.

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____________________________________________________RURAL MARKETING

Launched in the year 1939, it was one of the first brands of Parle Products. It was
called Parle Gluco Biscuits mainly to cue that it was a glucose biscuit. It was manufactured
at the Mumbai factory, Vile Parle and sold in units of half and quarter pound packs.

The incredible demand led Parle to introduce the brand in special branded packs
and in larger festive tin packs. By the year 1949, Parle Gluco biscuits were available not just
in Mumbai but also across the state. It was also sold in parts of North India. By the early
50s, over 150 tonnes of biscuits were produced in the Mumbai factory. Looking at the
success of Parle-G, a lot of other me-too brands were introduced in the market. And these
brands had names that were similar to Parle Gluco Biscuits so that if not by anything else, the
consumer would err in picking the brand. This forced Parle to change the name from Parle
Gluco Biscuits to Parle-G.

Originally packed in the wax paper pack, today it is available in a contemporary,

premium BOPP pack with attractive side fins. The new airtight pack helps to keep the
biscuits fresh and tastier for a longer period.

Parle-G was the only biscuit brand that was always in short supply. It was heading
towards becoming an all-time great brand of biscuit. Parle-G started being advertised in the
80's. 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 went on to become one of the most
popular commercials for Parle-G. The commercial was run for a period of 6 years.

Parle-G grew bigger by the minute. Be it the packs sold, the areas covered or the
number of consumers. It became a part of the daily lives of many Indians. It wasn't a biscuit
any more. It had become an icon. The next level of communication associated the brand with
the positive values of life like honesty, sharing and caring.

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____________________________________________________RURAL MARKETING

In the year 1997, Parle-G sponsored the tele-serial of the Indian superhero,
Shaktimaan that went on to become a huge success. The personality of the superhero
matched the overall superb benefits of the brand. Parle extended this association with
Shaktimaan and gave away a lot of merchandise of Shaktimaan, which was supported by
POS and press communication. The children just could not get enough of Parle-G and
Shaktimaan.

In the year 2002, it was decided to bring the brand closer to the child who is a major
consumer. 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. There were over 5
lakh responses and of that, over 300 dreams were fulfilled. Dreams that were fulfilled ranged
from trips to Disneyland at Paris & Singapore; meeting their favorite film star Hrithik
Roshan; free ride on a chartered plane; 20 scholarships worth Rs 50,000; a special cricket
coaching camp with the Australian cricketer - Ricky Ponting; etc.

The year 2002 will go down as a special year in Parle-G's advertising history. A year
that saw the birth of G-Man - a new ambassador for Parle-G. Not just a hero but also a
super-hero that saves the entire world, especially children from all the evil forces. A
campaign that is not just new to the audiences but one that involves a completely new way of
execution that is loved by children all over the world - Animation.
A TV commercial that showed G-Man saving the children from the evil force called
Terrolene launched this campaign. It was also supported by print medium through posters
and streamers put up at the retail outlets. G-Man, a new superhero of Parle-G has the
potential of making it big. And will be supported by a campaign that will see many a new
creative in the future so as to keep the children excited and generate pride in being a
consumer of Parle-G.

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____________________________________________________RURAL MARKETING

To make the brand much more interesting and exciting with children, it was decided
to launch a premium version of Parle-G called Parle-G Magix in the year 2002. Parle-G
Magix is available in two exciting tastes - ‘Choco’ and ‘Cashew’. The year 2002 also
witnessed the launch of Parle-G Milk Shakti, which has the nourishing combination of milk
and honey, especially launched for the southern market.

Parle-G continues to climb the stairs of success. Take a look at the global market
where it is being exported. First came the Middle East then USA followed by Africa and
then Australia. An Indian brand, that's exported to almost all parts of the world. After all
that's what you would expect from the Parle-G World's Largest Selling Biscuit

Parle’s efforts to make biscuits affordable to all?

Biscuits were very much a luxury food in India, when Parle began production in 1939.
Apart from Glucose and Monaco biscuits, Parle did offer a wide variety of brands.

However, during the Second World War, all domestic biscuit production was diverted
to assist the Indian soldiers in India and the Far East. Apart from this, the shortage of wheat
in those days, made Parle decide to concentrate on the more popular brands, so that people
could enjoy the price benefits.

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____________________________________________________RURAL MARKETING

Thankfully today, there's no dearth of ingredients and the demand for more premium
brands is on the rise. That's why; we now have a wide range of biscuits and mouthwatering
confectionaries to offer.

Strength of the Parle Brand…

Over the years, Parle has grown to become a multi-million US Dollar company. Many
of the Parle products - biscuits or confectionaries, are market leaders in their category and
have won acclaim at the Monde Selection, since 1971.

Today, Parle enjoys a 40% share of the total biscuit market and a 15% share of the
total confectionary market, in India. The Parle Biscuit brands, such as, Parle-G, Monaco and
Krackjack and confectionery brands, such as, Melody, Poppins, Mangobite and Kismi, enjoy
a strong imagery and appeal amongst consumers.

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____________________________________________________RURAL MARKETING

Be it a big city or a remote village of India, the Parle name symbolizes quality,
health and great taste!

And yet, this reputation has been built, by constantly innovating and catering to new
tastes. This can be seen by the success of new brands, such as, Hide & Seek, or the single
twist wrapping of Mango bite.

In this way, by concentrating on consumer tastes and preferences and emphasizing

Research & Development, the Parle brand grows from strength to strength.

Quality Commitment…

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____________________________________________________RURAL MARKETING

Parle Products has one factory at Mumbai that manufactures biscuits &
confectioneries while another factory at Bahadurgarh, in Haryana manufactures biscuits.
Apart from this, Parle has manufacturing facilities at Neemrana, in Rajasthan and at
Bangalore in Karnataka.

The factories at Bahadurgarh and Neemrana are the largest such manufacturing
facilites in India. Parle Products also has 14 manufacturing units for biscuits & 5
manufacturing units for confectioneries, on contract. All these factories are located at
strategic locations, so as to ensure a constant output & easy distribution. Each factory has
state-of-the-art machinery with automatic printing & packaging facilities.

All Parle products are manufactured under the most hygienic conditions. Great care is
exercised in the selection & quality control of raw materials, packaging materials & rigid
quality standards are ensured at every stage of the manufacturing process. Every batch of
biscuits & confectioneries are thoroughly checked by expert staff, using the most modern
equipment.

Marketing Strength...

The extensive distribution network, built over the years, is a major strength for
Parle Products. Parle biscuits & sweets are available to consumers, even in the most remote
places and in the smallest of villages with a population of just 500.

Parle has nearly 1,500 wholesalers, catering to 4,25,000 retail outlets directly or
indirectly. A two hundred strong dedicated field force services these wholesalers & retailers.
Additionally, there are 31 depots and C&F agents supplying goods to the wide distribution
network.

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____________________________________________________RURAL MARKETING

The Parle marketing philosophy emphasizes catering to the masses. We constantly

endeavour at designing products that provide nutrition & fun to the common man. Most Parle
offerings are in the low & mid-range price segments. This is based on our cultivated
understanding of the Indian consumer psyche. The value-for-money positioning helps
generate large sales volumes for the products.

However, Parle Products also manufactures a variety of premium products for the up-
market, urban consumers. And in this way, caters a range of products to a variety of
consumers.

Customer Confidence…

The Parle name conjures up fond memories across the length and breadth of the
country. After all, since 1929, the people of India have been growing up on Parle biscuits &
sweets.

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____________________________________________________RURAL MARKETING

Today, the Parle brands have found their way into the hearts and homes of people all
over India & abroad. Parle Biscuits and confectioneries, continue to spread happiness & joy
among people of all ages.

The consumer is the focus of all activities at Parle. Maximizing value to consumers
and forging enduring customer relationships are the core endeavour at Parle.

Parle’s efforts are driven towards maximizing customer satisfaction and this is in
synergy with their quality pledge.

"Parle Products Limited will strive to provide consistently nutritious & quality food
products to meet consumers' satisfaction by using quality materials and by adopting
appropriate processes. To facilitate the above we will strive to continuously train our
employees and to provide them an open and participative environment."

Parle’s Rural Marketing Management…

Marketing management refers to distribution of the firm’s

product or service to the customers in order to satisfy their needs
and to accomplish the firm’s objectives.

Marketing includes developing the product, pricing,

distribution, advertisement, and merchandising, doing personal
selling, promoting and directing sales and service to customers.

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____________________________________________________RURAL MARKETING

Marketing is an essential function because unless the firm has a market, or can
develop a market, for its product or service, other functions of staffing, producing and
financing are futile.

Developing rural marketing Strategies for Parle: -

Determine what the customer’s needs are and how those needs can be satisfied.
Select the market that would be served.
Decide what advantage that will give a competitive edge over other firms.

Meeting customer’s needs

Learning customer’s needs
Conscious about the firm’s image
Looking for danger signals

These are the questions which arise while introducing a new product, such as HIDE n SEEK.

Market Segmentation:

A market should be defined in terms of various characteristics such as economic

status, age, education, occupation and location. The best opportunity is to identify a market
segment that is not well served by other firms. To determine the firm’s market segment, the
fundamental aspects are summarized:

What is the place of the firm in the industry and how it can compete with others?
Whether the firm is known for its quality or price.
Image of the firm among the customers.

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____________________________________________________RURAL MARKETING

“As Parle is a well established brand, its

products are not new to the people. So,
when they launch a new product, it
becomes easy for them as the Company is
known for its branded products all over the
country.”

Strategic marketing Policies of Parle…

Formulation of strategic marketing policies for certain areas of the Parle Are:

Morality and public service

Product
Market
Profit
Customer relations
Promotion
Credit Policies

• Morality and Public Service

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____________________________________________________RURAL MARKETING

Policies on morality and public service consist of general statements expressing

Parle’s desire to be honest in its dealings with public and its customers. They fulfill the
demands of the consumers by supplying adequate quantities to them. And they follow
morality by providing products at good and acceptable quality.

• Product

Parle often finds its most effective competitive weapon in the field of product
strategy. It may concentrate on narrow product line, develop a highly specialized product
service or provide a product containing an unusual amount of advantage and satisfaction.
Competitor’s products, prices and services are constantly examined to determine whether the
Company can build a better product.

Parle has always followed this principle of making the product as the most important
thing rather than spending more on advertising and promotions. They feel that if the product
has quality, than it will be promoted on its own. It will itself act as publicity.

• Market

Market policies are designed to clarify with geographic areas Parle wishes to serve
and other marketing characteristics appropriate for it. The market policies are framed as per
the market segmentation. As the Parle Biscuits don’t have the targeted market as such,
because it is a product consumed by all. So, there are market strategies as per the potentiality
to cover the markets

And the biggest achievement for Parle is that, it is available in “Every Nook and

Corner” of the country. It has even reached the interior most part of the rural areas. This has
been possible only by the foolproof distribution system.

• Profit

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____________________________________________________RURAL MARKETING

Profit policies may require that sales goals be specified that will provide Parle a
sufficiently large sales volume or profit as percentage of sales may be specified which calls
for low marketing costs.

As the biscuits of Parle are well known, they don’t have to spend much on
advertisements. So, the profit margins are increasing substantially. Initially, they followed
penetration policy of pricing. And it worked. Still, the price is too low to be affordable by the
common man.

But, now they are planning to increase the prices of the biscuits, to increase their
profits even more. This pricing policy refers to as Skimming the Cream.

• Customer Relations

Parle’s relationship with its customers may be indicated with a question

Should the firm have a policy that customer is always right?

Parle, also like other company’s feel that consumers are the most important aspect.
The consumers are always right because they are the sources through which a company
comes to know about its performance. Same is the case with Parle.

They follow the feedback by the consumers and do as they want. They consider the
consumers views as of prime importance. Because, if the consumers are satisfied no one can
stop the growth of Parle.

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____________________________________________________RURAL MARKETING

• Promotion

The pattern of Parle’s advertisement may reveal the promotion policies. It always
follows a policy of tasteful advertising at all times. Sales promotion may be restricted to trade
shows or to industrial publications or to some other advertising media.

There are different promotion techniques like free samples, scholarships, etc.

• Credit Policies

In order to stimulate sales, customer should be provided with credit. However, an

appropriate credit policy is essential to be successful in granting credit. This is a useful policy
as it attracts the consumers and the retailers. And also increases their confidence in the brand.
The credit can be given by the company to the whole sellers or retailers. And in turn they will
give credit to consumers

Marketing Mix…
4 P’S considered in Parle

Biscuits are the commodity which was considered as a product for the rich class
people. As this a product, that is traced out from western countries. So, it was considered to

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____________________________________________________RURAL MARKETING

be an urban based product. The rural people were not able to get this thing. But this belief
was being broken down by Parle.

Parle Product Limited is a company which introduced their quality biscuits at a

reasonable cost. A cost which is affordable by each and every class people. Even irrespective
of the consumer of urban or that of the rural areas.

“Parle rules the market because it provides quality assurance with its penetrating
potentiality pricing”.

In a rural area, there are people with different economic statues. So, the Parle biscuits
are being priced to suit their statues. Rich people buy this, because of good quality. And the
middle class or poor people buy it, because it provides low cost benefit to them along with
quality.

The product policy and strategy is the corner stone of a marketing mix. To the
marketer products are the building blocks of a marketing plan.

PRODUCT

BISCUITS are the products of daily consumption.

Consumed by, one and all.
And when it comes to Parle biscuits, it is loved by all.

Parle Products Limited has launched different brands of

biscuits and confectioneries. Not only in urban areas but also in rural
markets as well. They have entered the rural markets with the same
price and quality. Not with all the brands but many of them. Out of
which Parle-G is the most vital one. It has penetrated so much in the
market that it has become the house hold name. Even it is compared to
the meal of a person. That if a person consumes a full packet of
biscuit instead of having lunch or dinner. And this is accepted by the

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____________________________________________________RURAL MARKETING

consumers, as the nutritional value is high enough. This stands as a biggest accomplishment
for the company.

A Company needs nothing except the consumer satisfaction. And Parle has
successfully gained that. This is its biggest achievement which creates a SUCCESS STORY.

The Core of the Product: - The core or the basic constituent of the product is the first
component in the total personality of any product. Same is the case with Parle Products. It is
presented as a product of daily consumption, which has a combination of unique features like
Quality and nutritional value as well. For Example, the unique pack of Parle G biscuits, the
rectangular shape of biscuits, the unique smell, the brand name, the price, the positioning as a
product for all age people and even all class people, economically.

PRICE
For example, PARLE G

WEIGHT NUMBER OF PRICE

BISCUITS
19 grams 4 Biscuits Re. 1
50 grams 8 Biscuits Rs. 2
100 grams 16 Biscuits Rs. 4
300 grams 48 Biscuits Rs. 10.00
500 grams 110 Biscuits Rs. 15.00

These are the various prices of Parle-G Biscuits in urban as well in rural areas. The
price is too low, which is affordable by all irrespective
of an individual’s economic status.

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Rural consumers look for value than its price. Product strategy and pricing are inter
linked with each other to deliver value at the right price. So, the biscuits of Parle are of good
quality and nutritious.

Also, the rural consumers are more interested in the utility of the product rather than
packaging. So, it’s better to avoid sophisticated packing. And it will help out in reducing the
cost as well. Simple packing should be adopted. Parle uses polyethylene sheets instead of
boxes, which keeps the quality and quantity of biscuits and confectioneries in good condition.

The price is low enough as it has to penetrate in the market even in the interior of the
country. It makes it affordable by each and every one.

PLACE

Place refers to as the distribution channels adopted by Parle Products to reach even
the interior part of the village. This is a quiet difficult and challenging task. But, Parle has
always seen further to find solutions and grab opportunities.

Determining Channels of Distribution

A marketing channel is the pipeline through which a product flows on its way to
its ultimate consumer.

Own designed channel of distribution: Channels are tailor- -made to meet the needs of the
company. New products, like hide n seek etc., commonly require different distribution
channels from those needed for products, which are well established and widely
accepted like Parle G, Marie. Etc.

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Avoid multiple channels: Multiple distribution channels sometimes create conflicts.

Distribution will be adversely affected unless these conflicts are resolved. So, the
Parle Company doesn’t go for multi channel as it is harmful. So, they have only the
established ones.

When to change the channel: Change in buyer’s location may dictate a change in marketing
channels. Changes in concentration of buyers may also require a change in marketing
channels.

DISTRIBUTION CHANNEL: -

PARLE’ S PRODUCTION
UNIT

AGENCIES
AGENTSOR
OFAGENTS
AGENCIES

WHOLESELLER

TEA SHOPS / RAILWAY

RETAILER
PAANWALLAS STATIONS

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____________________________________________________RURAL MARKETING

This shows that Parle’s Production units dispatching the biscuits to the well
established agents or agencies. They send it further to the Whole seller.

Now, the wholes seller and the agents send the biscuits to the small retailers.

Places where the Parle Products are available: -

Kiryana Stores
1. General Stores
2. Tea Shops.
Railway Stations.
Paan wallas.
Place where the cultural programmes of village are being organized, like melas, etc.
Mobile traders, etc.

PROMOTION

Sales promotion consists of activities that have the purpose of making other sales
efforts (e.g. advertisement) more effective. Some popular sales promotion techniques of Parle
are:

Special displays
Offering Scholarship
Running contest
Distribution of free samples
Offering free introductory services
Demonstrating products

In spite of all efforts spent in doing market research, sales forecasting and advertising
and sales promotion, some one ultimately must do some personal selling of products or
services.

Selling through Agent Middlemen

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Selling Agent: The selling agents perform on the basis of extended contracts and negotiate all
sales of a specialized line of merchandise or the manufacturer’s entire output. Usually,
the agent has full authority concerning prices and terms and is the sole seller for the
line represented and is not given market area.

Manufacturer’s Agent: the manufacturer’s agent or representatives is an independent

business person who sell a part of output of two or more client manufacturers whose
products are related but non-competing, on a continuous or contractual basis in a
limited or exclusive territory. Manufacturers use agents more often than any other
type of agent middlemen. The agents do not take title to the goods, are paid a
commission and have little or no control over prices, credit or other terms of sales.

Survey in Rural Area - Vadgaon…

To enhance the project, a survey to gain primary data was being performed by me. I
did the survey of retailers in Vadgaon, near by Pune.

After retaining the information from the

Parle Company itself, it made me curious to find out
the demand of Parle biscuits in the near by village. I
had collected the information from the various retail
shops present in that area. About 15 retailers, I have approached. The questionnaire
format was produced as below: -

OBJECTIVES OF SURVEY: -

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• The basic objective of the survey was to understand the concept of rural marketing
clearly by means of Parle biscuits demand analysis.
• To find out the consumer behaviour in relation to the biscuits of Parle.
• To find out the competitor’s, local brands and imitation brands.
• To find out its effect on sales of Parle.

Methodology
The survey worked got started by preparation of the Survey form (Questionnaire).
The questions are related to the demand analysis of the Parle products.
The survey was being conducted by the method of interviewing the sample size of 15
retailers at random. These retailers included the General stores and the Kiryana
Stores available there. The Questionnaire is given in the Annexure.

Findings: -

• Surprisingly, all the 15 retailers have Parle biscuits available with them. Not
all the brands but most of them. All the retailers have in common PARLE G,
MONACO, MARIE and KRACKJACK.
• About 9 retailers have with them the other brands of PARLE as well along
with the above four, such as HIND n SEEK, FUNCENTRE, MILK SHAKTI, and
CHEESELINGS.
• All the retailers were satisfied with the demand of Parle. They said that Parle
is the most selling biscuits amongst all. And the brands of Parle are known very
well to the people (consumers). They don’t ask for biscuits, but just ask for
“PARLE”.
• But, 4 retailers which are the smaller ones got some less demand as compared
to others.
• Due to Britannia’s TIGER, the sale of PARLE G is being affected. But still
people retain to the Parle brands.

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• Due to competition, the Parle’s demand is being decreased to 15-20%.This

was said by 6 retailers.
• But the rest 9 retailers said that the sales have been decreased only by 7-10%.
• Only 3 retailers said that the imitation brands take away the Parle’s sales. The
imitation brands are PAYAL G, PAREL G, PRIYA G, PARAL G, etc. That too to a
limited extent.
• And the rest 12 retailers were very sure about the Parle’s brand as they had no
imitation brands with them. So there is no chance of fake sale.
• All the retailers have no complaint about the Parle among the consumers.
• 2 retailers have the complaint that the brands like HIDE n SEEK and
FUNCENTRE don’t have much demand because people are not known to these
brands as much.

The graphical representation of the findings of the survey is as follow: -

D EMAN D AN ALYSIS

Parle G

5% 3% Com petitor's
brands
39% 53% Local Brands

Im itations Brands

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Suggestions: -

• Some of the retailers, that are 3 of them, should not buy the imitation brands
as this is a wrong thing done to the consumers as well as to the Company.
• So, 2 retailers who have less demand of some products should make the brand
known to the people by giving them informed about the new brands which
come up.
• The retailers who have the imitation brands available with them should make
the consumers aware about the fakeness of it.
• And also, the retailers who buy the imitations should stop buying.
• All the retailers should have all the products of Parle.

Articles…

Parle-G is the world leader in biscuit sales

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TIMES NEWS NETWORK [MONDAY, SEPTEMBER 15, 2003 12:26:36 AM]

NEW DELHI: In 1929 when Indians were munching crispy imported biscuits shipped in by
the British, an Indian set up a small factory in the suburbs of Mumbai to make toffees. A
decade later, he started making biscuits without giving a damn to the imported biscuits that
were freely available. And six decades later, one of the factory’s product has emerged as the
world’s single largest brand in any country.

With annual sales volume of 179.9m kg, Prakash Chauhan’s Parle-G is the world
beater in biscuits, followed by Italy’s Mulino Bianco with 110.3m kg and America’s Control
Brand at 108.9m kg.

Industry sources said Parle-G sells the most because it is the cheapest biscuit in the
branded category. Most Parle offerings, unlike Britannia, are mass brands in the low and mid-
range price segments. As it has been around for over 60 years, it has a loyal consumer base.
And for most, it is a food supplement rather than an evening snack. “In mid-income
households, kids averse to dal chawal are often given glucose biscuits to make up for the
cereals,” said an industry source. But the industry says that even though Parle-G is the
highest selling brand, the per capita consumption of biscuits in India is still very low. On an
average Indians eat 0.48 kg every year, while Americans eat 4 kg.

But surprisingly, Indians eat over three times more branded biscuits (490m kg) than
the Chinese (180.5m kg). “Given that both India and China have conventional food habits
where traditional snack items like idli, dosa, dhokla, samosa have a fair share, Indian
consumers’ appetite for biscuits is enormous,” says Anmol Sherpa, global services co-
ordinator for AC Neilsen India.

According to him, Americans depend on biscuits as they have very few ready-to-eat
food items for snacks. They spend $6,897m on 1134.6m kg of biscuits every year, outpacing
both India (490m kg valued at $583m) and China (180.5m kg valued at $406.3m).

Besides heritage and price points, distribution is crucial to the success of any
consumer goods brand. Even though Kellog’s launched Chocos at Rs 5/pack, its distribution
strategy was not up to the mark. Parle has 1,500 wholesalers catering to 4,25,000 retail
outlets.

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Chocos were later taken off the shelves. Biscuits require a mass distribution network
and Kellogs had limited itself to the up market outlets with its premium-priced cereals. Parle
over the years has built a robust distribution network. For the fast moving consumer goods
industry, the packaged biscuit basket has emerged as a winner with all other product lines like
soaps, detergents, hair oil, packaged tea biting the dust. The quick, tea-time snack has
zoomed into a Rs 2,500 crore industry clocking 3-4% growth annually.

Parle creates a flutter in the atta market

KALA VIJAYRAGHAVAN

TIMES NEWS NETWORK[ SUNDAY, SEPTEMBER 28, 2003 10:23:19 PM ]

At a time when most branded atta majors are facing survival issues, mass-market
biscuits market Parle Products, has decided to enter the atta market.

The 60-year old company has launched the Parle G brand of chakki fresh atta in
certain markets in India . This would mean further competition for industry majors like HLL,
ITC, Pillsbury and others, given Parle G’s brand equity in the foods market and its huge
distribution network. The brand is priced at more or less the same level as the existing market

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rates. A 2 kg pack of Parle G atta is being offered at Rs 35.50 while a Rs 5 kg is being offered
at around Rs 90.

Parle officials were unavailable for comment. Analysts feel that that it is logical for
Parle Products to offer a product which is the core of their backward integration. “They have
little to worry about as far as distribution strength or creating a brand presence is concerned.
It is certainly not going to be easy for the other existing FMCG majors in the foods business”
said an analyst.

The recent entry of players like ITC and ConAgra, besides the existing ones like HLL,
Pillsbury and Cargill have intensified competition in a market where margins are wafer-thin
and the only way to profits are volumes.

The Indian atta market is estimated at around 45 million tonnes, of which branded atta
is only 3 lakh tonnes, or less than 1%.

On an average, a 5 kg pack of branded atta is sold in the range of around Rs 87-Rs 90.
“The price fluctuates widely depending on which scheme is being offered by the company. If
a competitor drops prices, all the brands follow suit. There’s not much choice for these
companies since most stockists refuse to push the uncompetitive brand,” sources said.
Regular purchasers of the branded attas are institutional buyers like hotels, airlines or food
caterers.

However, there are local suppliers in all majors markets like Mumbai, Delhi etc who
have a loyal customer’s base. Currently, Parle Products has offerings in the mass and mid
segment of the biscuits market. Parle G biscuits, market sources said, are consumed more as
food supplements rather than a snack.

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View Of Consumers On Parle Biscuits!

Here are some views of the consumers for Parle G biscuits which are collected on the
basis of questioning them in the rural area of Vadgaon.

Rajeshri says,
I do not think this product is targeted for any age group. Parle Products Pvt. Ltd.
(Mfg. by Bunty Food Product – not a known to name) markets Parle G. Parle is reputed old
business house and incidentally the only Indian big player in this field. I trust them not
because of Swadeshi feeling but due to their endeavor to give their best to consumer. Price
and consistency in quality of Parle G reflects tells about their attitude.

So, some of the essentials are there in this biscuit like many other varieties. However,
we need many other things for survival and good health. But we cannot expect all essential
from one pack of biscuit.

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H. patel says,
Parle G Biscuits which are manufactured by Parle’s in India. They are more than 50
years old and have been rated as the largest selling Glucose biscuit in the whole world in
terms of volume.

This biscuit is one of the cheapest and tastiest. I always buy a packet or two when I
am traveling by train as they are not only tasty but also nutritious. As the famous
advertisement goes’’ swaad bhare, swaasthya bhara’’ aptly describes this biscuit.

This biscuit is recommended by doctors for convalescing children but you need not
worry any age will enjoy this biscuit.

I will end by saying that you should try out this biscuit and once you have bitten it
you will always eat it.

Sushma says,
Hey
This is one brand of Parle I vouch for.

1 .The taste is excellent and small children love it, they should reduce the sweetness a bit as it
is good for diabetics who have to eat a little at a time to get their energy.

2. The lingering taste and flavour I like, there’s no doubt I eat it because I like it, alternate
flavours out here you get plenty the only one that beats it is the Danish cookies. Which is my
second best.

3. You see out here we get so many types of biscuits that if you’re new out here you won’t
know what to buy. I like the short bread biscuits as they are less sweet. If I do not get Parle’s
then only.

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4. I should say people of all ages can eat it as an energizer instead of glucose. Believe me I
cannot resist it; I am very much always an Indian at heart and try never to forget that. So
Parle’s here’s a brand I vouch for, I know as said by me my opinions will be downright
honest. Another thing if possible always carry a packet it saves you from hunger till you
reach wherever you want to, I used do it in India and still do.

5. Give it to your kids they will cry less, as it will always keep them full and it softens very
fast for babies.My advice to Parle would be keep up the product, only sugar a bit less then it’s
a must for all, young or old Parle biscuit’s are gold.

J martin says,
Parle g is best for health and hunger- we can offer it to any body- no age barrier, it is
best substitute to any other outside food what we always doubt and fall sick. It is best for
students and patients. But also preferred in party and for day to day use. In market many
other glucose biscuits have come, but Parle the name stands for quality and guarantee- a
trusted company is always rely- and i and my family always like to buy glucose d of only
Parle Company. Yes, cream biscuits we buy of other company but, to my children i prefer to
put Parle glucose, and they also love it.

Conclusion…

The detailed study about the Parle products mainly PARLE G, gives out a Success
Story in rural areas. This shows that products even at low prices can earn substantially
considerable profits. The results of the survey also indicate the importance of Parle G in
comparison with its competitors, local and imitation brands. The views of the consumers on
the Parle G biscuits also put light on its vitality.

To sum up in general, the Indian rural market has grown in recent years in size, range
and sophistication. Economic reforms in India have brought about major changes in the
whole market environment. Successful rural marketing calls for a review of the nature and
profile of rural consumers, designing the rural products to appeal to them, and adopting
suitable media as well as appropriate strategies for communication and distribution.

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Economic reforms and changing economic conditions have clearly pointed out that
the rural market is the future market of India. To become successful and contending players
calls in for a review of rural marketing environment, rural consumer, media and strategies to
be adopted. As they say…,

The game has just begun….

And its
Time for players to understand the rules,

Play the game…and Win!!

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