119/07/2010

“A STUDY OF RURAL PRODUCT MIX”

Prof. (Dr.) Nitin ZawareZeal Institute of Management, Pune

nitinzaware@gmail.com+91 9861121311

2

Introduction• In India marketing acquired urban bias;

because of economy of rural customer, less purchasing power, limited reach of media, lack of transportation and communication.

• Government initiatives for rural development provided a boost to the rural economy.

• The fact remains that the rural market in India has great potential,

…..............which is just waiting to be tapped.

3

Objectives of studyPrimary objective “To study the rural Product mix”. Research Design

• Descriptive Research Design: used to portray the rural consumers characteristics and determine their market awareness, buying decision and consumption pattern.

• Exploratory Research Design : used to dig out the information as a secondary data. Exploration was done at very early stage of the research work to identify rural market, rural consumer and attributes; to formulate the objectives of this study.

4

Data Collection Method • Literature review

was done to trace the evolution of the theories of product mix and rural marketing, in order to define the framework within which this construct has been studied, and also to establish hypothesis.

• Sources of Data Data has been collected from the various sources that are

• Primary Data Sources• Secondary Data Sources

5

Sample Frame • Non-probability quota sampling of the

population is used. • A quota of 10 household respondents and

04 retailer respondents in rural village and 05 rural villages in every tahasil is selected.

• Total 700 rural household respondents and 280 rural retailer respondents are interviewed.

• Random sampling method is used to select the households as well as rural retail stores in rural villages.

6

Hypothesis Testing Hypothesis One H0: There is no significant difference

between rural and urban product mix.

H1: There is significant difference between rural and urban product mix.

7

Product Mix VariablesReturns

WarrantiesServices

SizesPackaging

Brand nameFeatures

DesignQuality

Variety

Mea

n Pe

rcen

tage

of R

espo

nden

ts100.00

80.00

60.00

40.00

20.00

0.00

83%

83%

86%

89%88

%

97%96

%94%

90%89

%

17%

17%14

%11%

12%

3%4%

6%

10%

11%

No significant DifferenceSignificant Difference

Response of Rural Retailer

8

• The analysis shows that- • 3% to 17% rural retailers in product

mix variable; response that there is significant difference between rural and urban marketing mix

• Hence there is strong evidence to reject null hypothesis.

• Hence null hypothesis is accepted.

9

Hypothesis Two H0 : There is a no association

between Product mix attributes and satisfaction level of rural households.

H1 : There is a significant association between Product mix attributes and satisfaction level of rural households.

• Test used Non-Parametric Chi-square test of independence.

• The level of significance of test is, α = 0.05; i.e.5%.

10

Decision From the Chi-square test, the P-value of test (0.000) is less than the level of significance 0.05, hence there is a strong evidence to reject null hypothesis.

Conclusion Alternative hypothesis (H1) is accepted.

Chi-Square Tests

1557.362a 28 .0001624.154 28 .000

5600

Pearson Chi-SquareLikelihood RatioN of Valid Cases

Value dfAsymp. Sig.

(2-sided)

0 cells (.0%) have expected count less than 5. Theminimum expected count is 80.00.

a.

11

Findings and Observations 1. The rural population is predominantly

illiterate, having low income, characterized by irregular income, lack of monthly / regular income and flow of income fluctuating with the monsoon winds.

2. Because of lack of infrastructure facilities like power, difficult logistics and high cost of living; rural customers found innovative uses of the product.

3. Personal ownership against devises shared within the household but not owned, and those used outside the family unit.

12

4. Rural consumers’ preference for brands shifting from low priced brands to semi-premium brands.

5. Rural consumers are aware of the leading brands.

6. Rural consumers wanted to be very sure about branded product buying decisions because it involves their social status and social norms.

13

7. Product expectations in rural consumer are not as high; therefore a reasonable product at an affordable price is preferred than expensive product.

8. Rural customers identify a product by its packaging.

9. The rural markets are considered as dumping grounds for low-end products basically designed for an urban market.

10. The perception of improved social status due to the use of branded products is also one of the major influences on the buying process.

11. A typical rural buyer buys single unit of product instead of pack.

14

15

Conclusions and Suggestions

1. There is a strong need to build assurance and trust about product quality, service support, and company credentials in the minds of rural consumers.

2. Regular surveys and analytical studies on rural marketing should be conducted, so that appropriate policy adjustments and refinements whenever necessary will be feasible.

16

3. The products for the rural markets have to be simpler, easy to use and serviced or maintained.

4. Instead of scaling down the features of products sold in urban markets, marketers should evolve into developing completely new products to suit the rural consumers’ needs and wants.

5. Small unit size and low priced

packing will be suitable in rural market.

17

6.The product developed for rural markets should be sturdy enough either in terms of weight or appearance to stand rough handling and storage with bright flashy colors.

7. Regional celebrity should be selected for brand development.

8. The brand names of the products should be easy to remember and pronounce to rural consumer.

18

9. The extensive network of postal and medical workers can be used as an alternative vehicle for brand promotion in the rural market.

10. The brand promotion needs to be tailored to suit the expectations of the rural market with techniques like van campaigns, edutainment films, generating word of mouth publicity through opinion leaders, colorful wall paintings and weekly hats.

19

11. The product and price combination in terms of packaging in sachets should adopt.

12. The product should be in single units. Reusable packaging will be a major aid in promoting sales for products in the rural market.

13. Pack size has to match the rural consumers demand.

20

Thank you