touchingruralindia

Just another WordPress.com site

Difference in Differentiation ( A comparison between urban and rural market) January 31, 2011

Filed under: Uncategorized — priyasurendran @ 7:14 pm

In the book .’Differentiate or Die’, the author claims that gone are the days when quality, price and creativity were differentiating ideas.  Now the era has come when the preference, leadership, hotness(newness to market) etc have become the watch words for differentiation. Without a fit between the product and the consumer preference, the brand is doomed to fail.  This article tries to find out how preference can be used as a differentiating factor in a rural market in comparison to an urban market.

The values of the product

Most of the times, in the urban market, the products are offered at the augmented value level which is the preference there. But in the rural markets of India, the population still believe in utility rather than the extended values. So in the rural markets the product are still offered at the preferred basic or the expected level rather than the augmented level.

For e.g.Hair products were introduced to rural India in an attempt to capitalize on a culture where hair grooming is taken extremely seriously by women.While rural women may wear faded saris and little jewelry, few step out without ensuring that their hair is in place. Consumer goods companies introduced a transplanted product from developed markets, the 2-in-1 shampoo/conditioner. But the product doomed because the companies failed to understand that the rural consumers did not prefer shampoos instead used soap to wash their hair. However, several years back, Hindustan Lever focused on product development strategies for rural consumers who still did not use shampoo in India. Rather than try to change instilled consumer behavior, product developers focused on creating an opportunity which offered convenience at low cost. The result was a new 2-in-1 soap, a product that cleans the hair and body, and is targeted towards consumers in rural areas.

These are the examples of products which were introduced into rural markets after successful or near successful run in the urban markets with slight modifications.  But what are the modifications which needs to be done when we take a product successful in the rural market to the urban market?  Medimix soap is an epitome where a brand which had modest beginnings in the rural market made it big in the urban market by trying to differentiate the product with the preference of  the consumers. As a user of this brand since childhood, I have been a witness of the transformation of this brand, from a rural market, to grab the share of heart and mind of urban consumer. In 1969 , the brand was lauched in the market with its basic and the expected value in the rural market. It was positioned as a dual purpose soap for both hair and body with ayurvedic components. Inside the carton of soap there used to be a note which described the usage method i.e to apply to hair and body and leave for 3 minutes and so. Thus the brand gave more importance to the utility side of  the product which goes without saying is the preference of  a rural mind.

The old pack of Medimix soap

Few years back, Medimix was launched as a national brand. Then the company revamped the packaging and positioned it as an Ayurvedic product leveraging on the augmented value rather than the core value. The hair cleansing usage of the soap was completely removed from the positioning. The company brilliantly launched the new promotional campaign in line with the preference of the urban consumers for ayurvedic products to get closer to nature. The company also came up with new variants like Medimix Glycerine and sandal considering the preference of the urban population.

The new pack of Medimix soap which clearly positions it as a medicinal soap with the goodness of Ayurveda

Supplying ‘what the other people think is correct’ is what using ‘preference’ is all about. When these preferences get build into a product, it becomes successful.

 

Reinventing the USP January 21, 2011

Filed under: Uncategorized — priyasurendran @ 5:57 pm

In 1960, Rosser Reeves, a highly successful American advertising executive, published one of the most popular book in advertising named ’Reality in Advertising’ .  In this book, he introduced and defined the concept called Unique Selling Propositions or USP for short. In ‘Differentiate or Die’, the author Jack Trout illustrates how the concept of Reeves’ USP has changed over the years from tangible differences between products to reinventing themselves every day by the corporates. From products, the focus of USP has shifted to creating new usage experiences as done by Gillette by reinventing shaving itself through their twin blade, shock absorbent razors.

Rural market offers even more potentials for USP generation. Till some years back the companies were carried away by the fact that pricing is the only unique selling proposition for the rural masses. Many companies initially made a whopping profit from the bottom of the pyramid by introducing scaled down low cost versions of the urban products. But with rising income levels and education, price no longer remains as a USP in rural India for the cos. Hence the MNCs are coming up with new products which give better benefits in the form of experience rather than price. For example, Hindustan Lever introduced “Brooke Bond Sehatmand” a tea with vitamins whose launch comes in the face of critical challenges that India faces, in eradicating micronutrient deficiency. Using a breakthrough coating technology, this new product of HUL guarantees vitamins in each cup that would help combat micro nutrient deficiency and in turn provide affordable option to better health for families.  At the same time compliance is also easy since they fit into daily lifestyles of communities in rural India.

Nokia who once became the biggest player in the rural mobile segment owing to its affordable mobiles no has started facing troubles due to the increased competition from the local players. Now the company has devised new strategies to improve their share by giving better customer support and not just low cost mobiles. This strategy has helped the mobile major to maintain dominance in the rural market in India and stay ahead of its competitors. All these examples cement the fact that even in rural market, the USP has shifted from pricing to usage experiences.

 

 

Rural Market:An Overview January 14, 2011

Filed under: Uncategorized — priyasurendran @ 7:05 am

Before we start on with rural marketing and the application of the concepts of management on rural market, it is quintessential that we understand the definitions of what a ‘Rural Market’ in India is. This has often been a platform for heated debate since the definition of rural by government and the corporates vary.

Typically, from an Indian census point of view, rural has been defined with a ‘deprivation’ orientation, rural being a landmass without access to continuous electricity, water, the stock market. But the corporaes define it as ‘Rural India comprises all places that are not urban.’ As per the Indian census, the urban India is (a) All statutory places with a municipality, corporation, cantonment board or notified town area committee, etc. (b) A place satisfying the following three criteria simultaneously:

i) a minimum population of 5,000;

ii) at least 75 per cent of male working population engaged in non-agricultural pursuits; and

iii) a density of population of at least 400 per sq. km. (1,000 per sq. mile).

Initially the companies had a step child approach to a rural market with them launching only scaled down low cost version of products compared to the respective urban counterparts. But the saturation of the urban markets with competition has made the cos to sit up and think about the rural markets which has 72.2% of the total population as well contributing 43% of the total national income.

With the increase in competition, the importance for differentiating in the market gains significance. This hold good for a rural market as well. This blog tries to apply the principles stated in the book ‘Differentiate or Die‘ by Jack Trout as a strategy to survive the killer competition in the market with special reference to the rural market.