2-1 Chapter XVI Rural Marketing of Customer Durables
Learning Objectives • Comprehend the characteristics of Consumer Durables • Understand how and why the marketing of consumer durables is different from FMCGs • Examine the issues with regard to rural marketing of consumer durables
Consumer Durables: An Introduction • Durable goods are tangible goods that usually last over an extended number of uses. They need more personal selling and service, command a higher margin and require more seller guarantee. • The consumers spend saving of few months or years on these articles and want to be doubly sure on the long time performance of these articles.
Consumer Durables: An Introduction • As most of the consumers especially the rural ones are purchasing them for first time, they require lot of information and reassurance and guarantee. • In most of cases live demonstration of the benefits prior to the purchase is extremely important.
Consumer Durables: An Introduction • Rural market for Group–I consumer durables (priced less than Rs.1000 in value: transistors, pressure cookers, wrist watches, bicycles) was bigger than the urban markets in as early as 1999. • Rural market was likely to be bigger than the urban one by the year 2001-02 itself for Group–II durables (Rs.1001-Rs.6,000 in value : items like B&W TVs, sewing machines, mixers, cassette recorders). • Even with the larger population base in the rural areas the growth rate for the Group–I and Group–II durables is faster than the urban ones.
Marketing of Consumer Durables vis-à-vis FMCGs • The amount of money that is spent, perceived risk that is associated and the involvement of the consumer are significantly higher for consumer durables than for FMCGs. • Consumer durables are purchased once in few years whereas FMCGs are purchased daily, weekly or monthly.
Marketing of Consumer Durables vis-à-vis FMCGs • Consumer behaviour in consumer durables is either complex or dissonance reduction. The consumer behaviour for FMCGs is either habitual or variety seeking. • The effort made by the customer in searching for the information and discussion with the opinion leaders might last for many months for consumer durables. But, the purchase decision for FMCG can be made on the basis of sudden impulse or the recommendation of retailer.
Issues related to Marketing of Consumer Durables in Rural Market • Lesser penetration • Lack of Infrastructure • Purchase priorities different in rural market • Purchases in towns and semi-urban centers • Importance of segmenting the market • Importance of studying the consumer behaviour
Rural Marketing Strategies for Consumer Durables • Majority of the sales of the consumer durables happen in the urban centers but the consumers are from the villages and even those living in the semi-urban centers have a rural mindset. Therefore, organisations need to study the need profile and the buying behaviour of the rural consumers and accordingly develop the marketing mix for them. • Rural markets are evolving and there are no frameworks to understand rural consumer behavior, marketer needs to conduct thorough research to have consumer insight.
Rural Marketing Strategies for Consumer Durables • Instead of a marketing general, a developmental leader is needed who can involve and integrate different stakeholder in the marketing mix. • Instead of Ivory tower approach, managers need to visit rural areas quite periodically to have the direct feel of the market in which an organization is operating.
Rural Marketing Strategies for Consumer Durables • The patchy once or twice a year promotional effort can only bring results to a limited extent. • There also must be shift in the marketing mindset of selling products made for urban areas to rural population with urbane promotional campaigns.
Rural Marketing Strategies for Consumer Durables • The focus needs to be changed from high value to high volume sales, from “one size fits all” to creative thinking. • A strategic, committed and integrated approach to rural market can pay rich dividends. Therefore, there must be unwavering commitment from the CEO and similar sentiment in the frontline sales staff that has to actually implement the vision.
Summary: Points to Ponder • Marketing of consumer durables is different from FMCGs. • There is lot of scope to increase the penetration level of consumer durables in rural markets of India. This can be made possible if the organisations develop marketing mix strategies according to the rural market. • Lack of supporting infrastructure like supply of electricity is one of the major hurdle in the marketing of consumer durables to the rural markets. Designing or modifying the products in a manner in which they can overcome this limitation can counter this problem.
Summary: Points to Ponder • Majority of consumer durables are not purchased from village shops but from adjoining town/cities/semi-urban centers. This purchase pattern significantly reduces the level of problems that are likely to be encountered in marketing consumer durables to the rural markets. Durables organisations need not place their products with retailers in the villages for sale. • It is very important to study the rural buyer’s consumer behaviour and then also to segment the rural market on the basis of market potential value in order to understand what type of consumer durables can be marketed to different rural market segments.