Product Strategies, Rural product categories: FMCG, Consumer Durables, Agriculture goods and Services

27th March 2021 0 By indiafreenotes


Rural markets offer FMCG companies a good growth opportunity. A slogan suits FMCG companies’’ More rural, more profit’’ However few things which can make jobs of FMCG companies easy are:

1) Rural-urban hubs: Creating some rural urban hubs where every village is within an hour of reach and could ensure a large percentage of population has easy access to urban areas and become the big markets of tomorrow.

2) Formal banking: Access to formal banking in rural areas would make the informal banking services like money lenders at stake which would be beneficial for the rural consumers, as it will also bring capital investments I to rural. This would improve agricultural productivity and also help to build small scale enterprises and other commercial venture.

3) Skill building: With the help of ITI’s industrial skills can be built up and young people can be prepared for their role in retail due to which skill building is needed for generating income opportunities in rural India. BPO, hospitality and other services would also build similar skills in them.

4) Market Penetration: Companies need to apply rigour to governance and control to make sure their strategies translate into required action and they have to develop novel strategies to serves rural consumers. It is required to understand consumers culture and thereby sustain in rural markets.

5) Get regional: FMCG companies can adopt strategies which the rural consumers would feel closeness towards them according to rural consumers tradition and use of folks for the region would even help to gain customer loyalty.

6) Continuous Research: Continuous research should be undertaken by FMCG companies to understand the changing needs of the rural consumers and thereby the companies would also change and manufacture products accordingly.

Consumer Durables

Consumer durables involves any type of products purchased by consumers that manufactured for long term use. As opposed to many goods that are intended for consumption in the short term. The consumer durables industry can categorize into two segments:

  • Consumer electronics (brown goods): Television, laptops, cameras, computers.
  • Consumer appliances. (white goods): Washing machines, kitchen appliances, ovens, air conditioners and fan.

Rural consumers are very much cautious about their money and their spending level. It might be due to the fact that they have little scope of earning additional money outside their usual sources. In other words, for them marginal utility of money is very high so they are very cautious. Indian rural consumer durable market is very vast size and having lot of opportunities. Guidelines to consumer durable industry are as follows:

  • Modify the product to market for the needs of rural awareness about the products.
  • Arrange customer care units in all areas for clarifying and giving the information about their products.
  • By considering the population the organization have to establish or open new sale outlets.
  • To encourage social activities for development of rural areas for brand loyalty.

The key growth drivers for consumer durable industry are as follows:

  • Rise in disposable income: The demand for consumer electronics has been rising with the increase in disposable income coupled with more and more consumers falling under the double income families.
  • Availability of newer variants of a product: Consumers are split for choice when it comes to choosing products, Newer variants of a product will help a company in getting the attention if consumers who look for innovation in products.
  • Product pricing: The consumer durable industry is highly price sensitive making the price the determining factor in increasing the volumes at least for lower range consumers. For middle and upper range consumers, it is the brand name, technology and product features that are important.
  • Availability of financing schemes: Availability of credit and the structure of the loan determine the affordability of a product. Sale of a product is determined by the cost of credit as much as flexibility of the scheme.
  • Rise in the share of organised retail: Rise in organized retail will set the growth pace of the Indian consumer durable industry. The share will go bigger players entering the market.
  • Innovative advertising and brand promotion: Sales promotion measure such as discounts, free gifts and exchange offer, coupon codes helps company in distinguishing itself from others.
  • Festive season sale: Demand for TVs come during the festive season as at that point of time the company releases new tvs with different and unique features which thereby attracts the customers.

Agriculture goods and Services

Agriculture produces and marketing continues to be on a higher side amongst the Indian population. Most of the agricultural produce comes from the rural market due to the large access of the land to be produced for as compared to the urban areas. Agricultural produce has its own features of their own they are as follows:

  • Uncertainty: There is a high degree of uncertainty because the country wholly depends on the rainfalls. It is very difficult to forecast the volume and the output. The cultivator can only plan the production of a certain crop but he final output depends upon the weather, disease, pests, fertilizers etc which does not posses any control. Hence things are uncertain during agricultural produce.
  • Heterogeneity of produce: The quality of agricultural produce cannot be controlled as it can be done to other products. This lack of standardization of quality makes the task of gradation and assortment very difficult for the marketers.
  • Perishability: Agricultural goods are more perishable than industrial goods. Although some crop such as rice, wheat, gram etc. retain their quality for a long time but most of the farm products are perishable and cannot remain long on the way to the final consumer without losing loss and deterioration in quality.Hence the marketer needs to preserve in an appropriate manner and make it available to the consumer at its earliest way or manner.
  • Seasonality: Seasonal agriculture is a problem itself and one cannot stop it as production cannot be adjusted according to the demand. Hence maintaining smooth supply of agricultural produce according to the season helps to call for good and large storage space.
  • Processing: Some of the agricultural products like sugarcane, cotton, jute, tobacco etc have to be processed before they are consumed. This requires adequate processing facility.
  • Bulkiness: Agricultural products tend to be bulky and their weight and volume are high when compared with their value. This makes their storage and transportation difficult and copy.