Importance of Rural Marketing in India

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Why Rural Market is so Important?
Rural market has following arrived and the following facts substantiate this. •742 million people
Estimated annual size of the rural market
FMCG Rs 65,000 Crore
Durables Rs 5,000 Crore
Agri-inputs (incl. tractors) Rs 45,000 Crore
2 / 4 wheelers Rs 8,000 Crore

Infrastructure is improving rapidly.
In 50 years only 40% villages connected by road, in next 10 years another 30%. •More than 90 % villages electrified, though only 44% rural homes have electric connections. •Rural telephone density has gone up by 300% in the last 10 years; every 1000+ pop is connected by STD. •Social Indicators have improved a lot between 1981 and 2001 •Number of “pucca” houses doubled from 22% to 41% and “kuccha” houses halved (41%to 23%) •Percentage of BPL families declined from 46% to 27%

Rural Literacy level improved from 36% to 59%
Low penetration rates in rural so there are many marketing opportunities. Durables Urban Rural Total (% of rural HH)
CTV 30.4 4.8 12.1
Refrigerator 33.5 3.5 12.0
FMCGs Urban Rural Total (% of rural HH)
Shampoo 66.3 35.2 44.2
Toothpaste 82.2 44.9 55.6

Synthetic Detergents are formulations comprising surfactants like alkyl benzene sulphonate, fatty acid soaps, fatty alcohol, ester and similar compounds, bleaching, optical brighteners, phosphates and anti-redeposition agents, fabric softeners and certain other chemicals to improve the detergent action.

Classified either based on the charge on the organic part of the detergent (like anionic, cationic or non-ionic) or on the case with which they decompose into smaller units which would no longer foam (bio degradable or soft detergents and non bio degradable or hard detergents).

Use pattern
Anionics are the most commonly used detergents for washing and cleaning applications, while cationic (with germicidical characteristics) and non-ionics (with low foaming propertion) are mainly used for industrial applications.

The traditional heavy-duty laundry powder contains approximately 15% active surfactant, often Acid slurry (Linear alkylbenzene sulphonate).
The builder has traditionally been Sodium tripoly phosphate (STPP) at an average level of 20 to 25%.
This phosphate builder is added to help soften the water.

Fabric wash market structure
The estimated production of synthetic detergents including powders and bars is approximately 36 lakh tonnes in 1999. The ratio of powder to bar is 60 : 40.

The detergent powder segment caters to three categories, lower, middle and higher end markets.

Per capita Consumption of Synthetic detergents in India (average) 2.5 to 3 kg Characteristics of the Detergent market
More users opt for the convenience of detergent powders over bars. Powder usage would improve as more users change their washing habit, in favour of bucket wash. Studies show that usage of synthetic detergents such as Surf, Ariel and Henko, has increased, compared to the conventional detergent bars that were produced with vegetable oils. Market initiatives

Industry majors have been kept busy evolving responses to the challenges of growth in the detergent industry. Faced with distinctly sluggish volume growth, Hindustan Lever launched a rural initiative to enhance the penetration of its products. Procter and Gamble Home Products took a very different approach of streamlining its distribution network and reducing the number of stockist, in an effort to cut costs. HLL also put through de-bottlenecking and cost-cutting measures at Vashisti Detergents, in which it has a stale. Nirma, in an effort to cut costs, launched a series of ambitious backward integration projects; completed, it will manufacture practically every key input. Henkel SPIC, a relatively recent entrant into the market, waited two years and spent Rs.60 crores to acquire...
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