Presentation on theme: "Rural Marketing Group - 4. We are…. Name Roll No. Shehnaz Bajaria03 Sumit Bhatia05 Wilson D’Souza13 Stephaney Fernandes17 Abhishek Kumar28 Augustine Moniz37."— Presentation transcript:
We are…. Name Roll No. Shehnaz Bajaria03 Sumit Bhatia05 Wilson D’Souza13 Stephaney Fernandes17 Abhishek Kumar28 Augustine Moniz37
The Biscuit Industry One of the first ‘foods’ offered to kids Brand association starts early Nutritional Value Biscuits were assumed as sick-man's diet in earlier days. Today, it has become one of the most loved fast food product for every age group. Biscuits are easy to carry, tasty to eat, cholesterol free and are reasonably priced.
Annual production of Biscuit in India YoY growth shows rising consumption in India…
Introduction on Biscuit Industry Rural-urban penetration of Biscuit : Urban Market : 75% to 85% Rural Market : 50% to 65% Per capita consumption of Biscuits : INDIA 1.8 kg South East Asian Countries 2.5 kg to 5.5 kg USA 7.5 kg
About PARLE AGRO Established in 1929 1st brands – Parle Glucose and Parle Monaco Market leader in many products 35% share of the total biscuit market 15% share of the total confectionery market 70% share in glucose biscuits Parle has largest such manufacturing units in India Estimated brand worth Rs. 2000 crores Sales for 2008 – 2009 were approx Rs. 3500 crores ( Rs. 35 billion)
SWOT Analysis of Parle Agro Strengths Parle Brand, Diversified product range, Extensive distribution network. Low and mid price range Catering to mass, Better understanding of consumer psyche Weakness Dependence on retailers & grocery Stores for displaying diversified Parle Products on shelf, induce impulsive buy Dependence on Parle G (flagship brand) Opportunities Estimated annual growth of 20% Low per capita consumption, Changing consumer preference, Increasing demand for sugar free, Diet biscuit, Threats Hike in cost of production due to hike In Raw material cost, Increasing distribution cost, Local bakery products, Entry of various new entrant, ITC etc.
Urban Contribution of Small Packs (% of Sales) Categories199820012007 Toothpowder35.742.957 Talcum Powder1318.128 Hair Oils9.811.515 Coffee8.313.323.3 All Biscuits1.44.410 Coconut Oil47.916 Toothpaste0.92.76.2 Mosquito Rep.220.127.116.11 Source: KEIC
Rural Contribution of Small Packs (% of Sales) Categories199820012007 Toothpowder49.865.895 Talcum Powder22.331.649 Hair Oils16.418.322.1 Coffee19.637.873 All Biscuits18.104.22.168 Coconut Oil6.413.126.5 Toothpaste0.83.48.5 Mosquito Rep.2.84.79 Source: KEIC
Why Rural Markets? Rural India accounts for over 75% of India's population. Strength of Market Size of Market Incomes in rural India have improved dramatically. Tax benefits associated with incomes in rural areas boost spending power of the average rural family. The rural markets are growing at about two time faster pace than urban markets. Rural India accounts for 60 % of the total national demand. India entering the globalisation mode and the rural revolution being governed by rising purchasing power, increased savings, changing consumer habits, there are sure and positive signs that a new dawn of rural India is going to come.
Problems in Rural Marketing Under developed people Low levels of literacy Physical Communication Facilities Media for Rural Communication Multiplicity languages and dialects Vast and Uneven Spread Low per capita income Logistics, Storage, Handling and Transportation Marketing Organisation and Staff Product Positioning Hierarchy of markets Seasonal demand patterns
Consumer Diversity India’s economic diversity matches its social diversity Class is difficult to define in India Incomes alone don’t define the class Purchase behaviour is related to cultural conditioning, location, source of income, education and occupation A typical rural family is a price conscious consumer and this is where the key to success lies.
Product Strategies for Rural Markets Brand Name Small Unit Packagings Low Priced Packagings New Product Designs Sturdy Products Utility Oriented Products
Snacking habits in Rural India Biscuits o With tea o For guests o Mini breakfast
Some Facts Britannia and Colgate, apart from Hindustan Lever, are the only FMCG companies in India that derive over 30% of their revenues from rural markets. Britannia has rejuvenated its rural thrust by the launch of Tiger biscuits Colgate has been attempting to woo the rural masses by offering low priced products in convenient packaging. Understanding the psyche of the rural family as it as important distribution network. Stiff competition, however, companies that have the first mover advantage, are still leading their peers in terms of market shares.
Main barriers for other brands Parle G Low awareness Weak distribution Unorganized sector Mindset
The 7 P’s & 4 A’s of Marketing Affordability Availability Awareness Accepatblilty Marketing Tools Product Price Place Promotion Marketing Challenges People Process Physical Evidence Price
Affordability Parle G has adopted the Market Penetration strategy i.e. low price along with capturing of a large market Low price range, as low as Re 1, Rs. 2 and Rs. 4 Product available in 8 different sizes 16.5G, 38.5G, 60.5G, 82.5G, 99G, 209G, 313.5G, 418G, 825G 70% of total sales volumes comes from products priced Rs. 5 and below
Pricing Strategy A brand that has held its price line at Rs 4 for 25 years Profit margin for distributors is 4% and for retailers is 10-12% Even though Parle G gives lesser margins to the seller, more preferred because of huge volumes sold. Didn't try to raise prices to offset the overall hike in costs Soaring input prices meant it opted for reducing the weight of the biscuit The number of biscuits in a pack come down from 16 to 15 Philosophy - price more important than the weight of the biscuit
Accessibility 1500 wholesalers catering to 425,000 retail outlets 200 dedicated field force 31 depots and C&F agents Factories at strategic locations & Establishment of manufacturing units in rural areas
Acceptability Distinctly comfortable position in consumer’s psyche built over decades Old is Gold Family is the largest influence group Friend circle and reference groups E.g. Social groups, classmates etc. Parle G is consumed by people of all ages, from the rich to the poor, living in cities & in the villages While some have it for breakfast, for others it is a complete wholesome meal. For some it’s the best accompaniment for chai
Awareness Television and Cinema are the main media to reach the rural audience Print media - It was advertised mainly through press ads. The communication spoke about the basic benefits of energy and nutrition. In 1989 Parle-G released its “Dadaji” commercial which was a huge success and was aired over a period of 6 years. The communication spoke about the basic benefits of energy and nutrition.
Sales promotion - Every year it holds day fairs at branded venues where games and fun events are organized for the employees of Parle and their families; where Parle products are giveaway prizes. Public relations - Parle has done the following for enhancing public relations: In the year 1997, Parle-G sponsored the tele-serial of the Indian superhero, Shaktimaan that went on to become a huge success. In the year 2002, a national level promo - `Parle-G Mera Sapna Sach Hoga' was run for a period of 6 months. The promo was all about fulfilling the dreams of children. Parle Saraswati Vandana, one of its initiatives, is an inter-school contest based on the Saraswati Puja celebrations. Since it started in 2002 it has seen a tremendous increase in participating each year, with entries coming from schools of West Bengal. Parle had introduced the novel promotion called Parle Golu Galata contest in 2005. (Golu means Doll & Galata means Dhammal.) Awareness
Awareness The next level of communication associated the brand with the positive values of life like honesty, sharing and caring. Just a few months back a reminder TV commercial was launched for Parle-G where the product is being called ‘Hindustan Ki Takat’ Recently Parle G has started the use of celebrity in their advertisements The current campaign features Aamir Khan and Darsheel Safary along with many situational ads around ‘G maane Genius’ ad campaign.
Situational Analysis Protecting the turf of its largest-selling glucose brand, Parle has also decided to restrict its line extensions to avoid diluting its equity. Pravin Kulkarni, Marketing Manager, Parle G: "We are recognising the presence of these players and are already trying to plug in the gaps needed. For instance, there are distribution gaps in the eastern and southern markets (compared to the North and the West), and we are enhancing our distribution in these parts. Observes A. Sundara Rajan, Chief Executive, Market Search, a research firm: "Parle's equity extends into the heartland of India. At the same time, the company realises that if it does not do anything, its equity will get eroded. Over the years Parle has been enhancing its packaging and communication and luckily the market has also been expanding." Thus, new players have not really poached on Parle's territory and lack of penetration has helped all the players grow.
Even though Parle G gives lesser margins to the seller, more preferred because of huge volumes sold. Didn't try to raise prices to offset the overall hike in costs Soaring input prices meant it opted for reducing the weight of the biscuit The number of biscuits in a pack come down from 16 to 15 Philosophy - price more important than the weight of the biscuit
Small gives “Value” Small is convenient Small is affordable Price Small is to attract Non-users One time users New users Small saves the space
Small is Big For customers, small packs mean Affordably priced products Less investment Reduced risk of buying And for companies, it translates into Large volumes Helps address diverse customer segment Attracts non-users Single-serve packs are expected to find more prominence in low penetration categories like health food, baby products and more
FUTURE STRATEGY Hire managers from the Institute of Rural Management Anand (IRMA) Rural marketing efforts need special mindsets, separate marketing and sales vertical headed by people with passion and commitment to rural marketing and supported by a field team that can face the rough and tough of the vast country-side with courage and conviction is a must. To recruit students from specialised institutes such as the Indian Institute of Rural Management or management graduates who have studied the “Rural Marketing” subject as an elective. Pay them well and discuss their career paths which they are likely to take in the organisation &then send them out in the field only after thorough training. Ensure the consistency of the team involved in any project, until the completion of a specific task. Teams involved in the initial stages, participate enthusiastically in the campaign & shift out midway because of Company’s Policy to shift & promote people
FUTURE STRATEGY Focused & comprehensive brand building strategy for rural India, with both short term and long term goals, is a must. Objective to build a strong equity for Parle- G brand in rural India Focus on core competency To promote Parle Biscuits & Confectionaries in the mass rural market To reach rural customer and also the target segment To increase sales & derive more revenues from rural market Flexible Policies Adoption to fast changing marketing situations Rural retailing: Established rural retail hubs like other FMCGs – Hariyali Kisan Bazaars (DCM) and Aadhars (Pantaloon-Godrej JV) Choupal Sagars (ITC) Kisan Sansars (Tata) Reliance Fresh Project Shakti (Hindustan Unilever)
Melas (25000)Haats (47000 ) 1.Companies can concentrate on the top 100 melas Eg. Pushkar Mela in Rajasthan 2.Product sales, promotion, demonstration and database generation 3.Cultural activities and rural sports 1.Periodic markets located in larger villages 2. Sunday markets are most popular 3. Traders participate in the haats 4. Most visitors are repeat customers
Adaptations for Rural Markets Conventional Non- Conventional Personalised TelevisionHaat and MelaDirect mailer RadioFolk Media( puppet and magic show) POS (demonstration, leaflet) PressVideo VanWord of mouth CinemaMandiInterpersonal communication Outdoor: Wall Painting, Hoarding Animator
Small is smart Small is future Small is for penetration and growth Conclusion