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Towns & Beyond Semi Urban India pdf offer by RC&M Experiential marketing. Semi Urban is surrounding residential areas of a bigger city; a group of these can collectively be regarded as the suburbs”. Generally they pertain to residential districts.
Towns & Beyond… Semi Urban India Index Understanding Semi Urban – Definition – List of Towns – Growing States Potential Markets - Fortuners & Competition in these Markets – Case Study Automobile – Case Study Durable – Case Study FMCG – Case Study Finance – Case Study Telecom Sales Point Presence – Sales Point – Population Segmentation – Virtual Presence Opportunities in Semi Urban Why should we go semi urban? Where to go in semi urban India? Who is the Semi Urban customer? Infrastructure – Lay out of a Semi Urban Town List of Semi Urban Towns State No. of Towns Definition West Bengal 43 Andhra Pradesh 40 Region Definition RC&M Specific Maharashtra 27 Karnataka 26 P Urban All statutory places with a All locations with a population of 5 o (100+ cities) Municipality, corporation, lac+ Tamil Nadu 22 p cantonment board or notified town i.e. Metros, State Capitals, Top 5 Madhya Pradesh 20 u area committee, etc. cities of every state l Haryana 19 a Semi Urban Surrounding residential areas of a All locations with a population of Bihar 18 t (300+ Towns) bigger city, a group of these can 1 lac - 5 lac i collectively be regarded as the i.e. District Head Quarters, Tehsils Western UP 16 o suburbs”. Generally they pertain to n Gujarat 15 residential districts Rajasthan 13 1 Rural Areas with Population density < 400 All locations with a population of (4000+ Blocks) / sq km , or where 75 % of the male less than 1 lac i.e. Blocks , Villages Punjab 11 t working population is engaged in Eastern UP 8 o agriculture , or areas with no Municipal corporation / board Orissa 8 5 Central UP 6 l Chhattisgarh 6 a Kerala 5 c Jharkhand 4 Himachal Pradesh 1 Uttaranchal 1 Total 309 Developing States – Growth & Income State Growth Rate State Per Capita Income (INR) Bihar 24.33% Haryana 68914 Chhattisgarh 19.88% Maharashtra 54867 Haryana 18.39% Punjab 52879 Andhra Pradesh 15.56% Gujarat 59570 Uttar Pradesh 15.27% Kerala 49316 West Bengal 14.96% Tamil Nadu 45058 Punjab 14.90% Himachal Pradesh 44538 Himachal Pradesh 14.60% Karnataka 40998 Kerala 14.55% Andhra Pradesh 40902 Madhya Pradesh 14.49% Uttarakhand 36675 Rajasthan 14.32% West Bengal 36322 Maharashtra 13.55% Chhattisgarh 34483 Karnataka 12.76% Arunachal Pradesh 33302 Orissa 12.21% Orissa 29464 Uttarakhand 11.63% Rajasthan 27001 Tamil Nadu 11.22% Assam 23993 Gujarat 11.02% Madhya Pradesh 21648 Assam 10.68% Jharkhand 21465 Jammu & Kashmir 9.35% Uttar Pradesh 18214 Jharkhand 9.33% Bihar 13663 Potential Semi Urban Markets INDUSTRY FORTUNER Four Wheeler Maruti Suzuki Two Wheeler Hero Honda/ Bajaj Finance ICICI Insurance Max Vijay Telecom BSNL Durable/ FMCG LG/HUL Case Study – 4 Wheelers Fortuner – Maruti Suzuki Competition – Hyundai Maruti India generates 10 per cent of its domestic sales from As per Hyundai “almost 50 per cent of the 220 million Semi Urban sales, amounting to 32000 cars. households in semi urban India are potential care buyers due to the agricultural subsidies extended by the Semi urban markets' share in Maruti's overall sales during government and also due to increase in productivity of April-January 2009 has gone up to 8.5 per cent from 3.5 agri-based products, thus presenting an attractive per cent in the same period last year. market for hi-technology products”. Plan The company plans to add another 600 people to its present Plan tally of 7,200 employees of which over half will be engaged in The company plans to touch 58% of the semi urban market in sales and marketing. India by targeting middle semi urban class. Campaign Campaign Maruti has launched its marketing campaign for semi urban Launched promotional scheme for semi urban areas titled India “Ghar Ghar Mein Maruti” (Maruti in every Household”), “Ghar Ghar ki Pehchan”, under which special schemes for 'Mera Sapna Meri Maruti‘ government employees in semi urban areas and members of gram panchayats on the purchase of Hyundai Santro Strategy Tying up with public sector banks that have both a branch Strategy network in these areas and the resource base to make loans Focus on Govt employees and panchayat members as they like PNB, Bank of India to increase finance penetration belong from well-to-do families Case Study – 2 Wheelers Fortuner – Hero Honda Competition – TVS Penetration Penetration HH has market share of 40 per cent from rural and semi urban Thanks to their increasing semi urban penetration, TVS areas. reported profit of 335.2 million rupees in the year ended March 31 after posting losses in the previous two financial Campaign years according to its website. The company planned to cover 1 lakh towns by end of 2010 financial year through the launch of the promotional Plan campaign called Har Gaon, Har Aangan (Every Village, every TVS Motor Co. Ltd is banking on new launches for a deeper Household) penetration into the semi urban market to fuel growth in 2010, chairman and managing director Venu Srinivasan said. Strategy TVS has also launched special marketing schemes for semi Hero Honda is expanding its rural reach in India by adding urban markets. about 500 more dealerships, service centers and other outlets across the country. Hero Honda has set up health care Strategy initiatives and services to guide people in getting driving The new Bharat Stage III compliant model TVS Max 4R will be licenses. Coupled with motorcycle tax cuts and economic targeted at heavy load carrying riders predominantly found in growth. the semi urban markets. Result Hero Honda expects to sell 50 per cent of its motorcycles in semi urban in the next three to five years. Hero Honda could boost sales 24 % in the past 11 months. Case Study – Finance Fortuner - SBI Competition - ICICI Penetration Penetration SBI, has a breathtaking semi urban branch network of 6,600 ICICI Bank is the country’s second largest bank,in urban as with 972 specialized branches. These branches have been set well as in Semi Urban towns. up in different parts of the country with the sole purpose of developing agriculture through credit deployment. Strategy Strategy ICICI has adopted the franchise model of operation in semi SBI has developed semi urban agricultural business units, urban markets A one man office (known as “kendra”) in the education programs for local farmers and “kisan” cards. village forms an interface between the villager and the Bank’s One of their recent endeavors is the tie-up with National products. Crop loans, housing loans, automobile loans, farm Agricultural Cooperative Marketing Federation (NAFED) to equipment, seed financing and insurance policies are all on finance farmers for cultivation of various crops like soyabean, offer. paddy, jute and potato. ICICI is looking at tying up with micro-finance institutions and local self-help groups (or creating them if already do not exist) Results SBI has gradually evolved to become the leader in agricultural finance with a portfolio of Rs. 18,000 crore in loans to around Results 50 lakh farmers. has 30 Regional semi urban Banks in India The number of borrowers has risen from 130 in 2000 to over known as RRBs. 42,000 today, and the semi urban loan book has crossed Rs. 16,000 crore. And the bank’s default rate in the semi urban The semi urban banks of SBI is spread in 13 states extending retail sector is 1 – 2 % as compared to 2 – 3% in the semi from Kashmir to Karnataka and Himachal Pradesh to North urban wholesale sector and 5% for the banking sector as a East. The total number of SBIs Regional semi urban Banks in whole India branches is 2349 (16%). Case Study – Telecom Fortuner - BSNL Competition – Bharti Airtel Penetration – BSNL covers total number of 5,23,532 towns Penetration – about 55% of Airtel’s 100-million customer base and villages across India. Its the largest telecom service is from the semi urban areas provider in India Strategy – Has set up 14,000 Airtel Service Centres Strategy – Grameen Sanchar Sewak (GSS) Scheme was and initiated self-service options like Start Stop to build launched in 2002 which provides Door-t-Door facility by trust amongst customers . Delovery agents in rural and and semi urban markets. Focus on Value added services (VAS) as, Music and SMS constitute significant part of Bharti’s Rs 3500-crore VAS revenue Results – At present, 2685 GSS are covering more than 11997 towns and villages. Across India, the scheme has been Results – Company expects this share to reach 65% very launched in most of the states shortly, bringing renewed focus on VAS for the semi urban customers Case Study – Consumer Durables Fortuner - LG Competition - Samsung Penetration Penetration LG has set up 45 area offices and 59 semi urban and remote- To counter LG’s strong semi urban presence, Samsung visited area offices. semi urban market accounts for 60% of new CTV 48 small towns in 100 days in an effort to increase brand buyers for LG awareness of its products. Strategy Strategy “Thinking locally, succeeding globally” “Samsung Guru comes to your town with Lots of excitement and valuable prizes” Product Product LG Electronics launched a customized TV ‘Sampoorna’ Guru 1105, Guru 1080, Samsung Dholak (E-1160), E-2120 and Samsung Tabla (E-2130) Plan A more important aspect of customization was to make TV set Plan which can appeal to local needs, it facilitated on screen Samsung rolled out its 'Dream Home' road show, to provide display in vernacular language like Hindi, Tamil and Bengali. recreation in the entertainment starved semi urban areas. Results Results It is selling 1,00,000 sets in the very first year.semi urban It has created an awareness in the semi urban areas and today market for LG grew at 25% over the last year as compared to in mobile phones category, it’s the leading brand in semi 15% urban urban Case Study – FMCG Fortuner – Sunsilk (HUL) Competition – Vatika (Dabur) Penetration Penetration Company launched Chik shampoo to target the low segment LG has set up 45 area offices and 59 semi urban and remote- people . Chik shampoo has a penetration of about 22% of area offices. semi urban market accounts for 60% of new CTV semi urban market buyers for LG Strategy Strategy launched shampoo in several sachets – 5ml,10ml,2ml etc and Dabur conducted Beauty Contests to make women conscious also launched low priced bottles in several sizes of how their looks, to encourage them to use beauty and hair care products. It re-named products as per language used in Plan regions Direct media promotions, free sampling helped majorly to build knowledge about product categories. Results Dabur is fourth largest It is selling 1,00,000 sets in the very Results first year.semi urban market for LG grew at 25% over the last year as compared to 15% urban The shampoo brands like Chik, Nyle (herbal category) contribute 50% of the company’s turn over Sales Point Presence Sales Point Presence Automobile - Dealerships, sales and Service outlets Automobile – Salesmen, Monthly service camps 10 lac + Finance- Branch Offices, Finance Finance- institutions, Banks Regional Rural branches, post offices FMCG- 5lac – 10 lac Shops, Retail Outlets FMCG- Small Shops with limited Durables- supply Small Outlets, Dealers Durables- Salesmen 1lac – 5 lac Below 1 lac Virtual Presence - Automobile Virtual Presence - Retail Virtual Presence - Finance Virtual Presence - Durables Going the Semi Urban Way.. Why?? Where?? Who?? Why should we go Semi Urban??? Growing Industry Size The total number of semi urban households is expected to rise to 153 million in 2009-10 from 135 million in 2001-02, suggesting a huge market Estimated annual Industry size FMCG – 65,000 Cr Agri Inputs – Rs.45,000 Cr 2 / 4 Wheelers – Rs.8,000 Cr Durable – Rs. 5,000 Cr 42 million house holds in semi urban and rural areas are availing banking services Of the 20 million Rediffmail signups, 60% are from small towns 50% of online shopping transactions, are from semi urban towns % age of BPL families has declined from 46% to 27% Rural literacy level has raised from 36% to 59% Low penetration rates make it an open and high opportunity market with substantially less competition Media Penetration More than 50% of the villages today have cinema, stars fan associations, mahila mandals, youth clubs, self-help groups, angan wadi centres and ration shops More than 80% of villages have community TV and cable connection, separate place of worship and general provision stores In all villages, the main source of any information was through television Other available Information sources are: – wall posters in 55% – publicity by panchayat office meetings in 53% – dandora in 43% – friends and relatives in 22% – announcement by loud speakers in 18% – cable TV in 16% – radio in 10% and – through health workers like VHN/ICDS workers in 8% The graph shows results of a study of more than 50 towns across India Information Centers Most of the towns have local associations and place of worship where the people and community members meets and share information Policy makers and program managers tap all these resources to educate the semi urban community There are local libraries as well in growing towns where people are encouraged to read newspapers and magazines in local language so that they can stay informative FMCG Growing Penetration Semi urban consumers spend around 13 per cent of their income, the second highest after food (35 per cent), on fast moving consumer goods (FMCG), as per a RMAI study The FMCG industry in India was worth around US$ 16.03 billion in August 2008 and the semi urban market accounted for a robust 57 per cent share of the total FMCG market in India Moreover, according to an ASSOCHAM study, FMCG sector in semi urban areas is expected to grow by 40 per cent as against 25 per cent in urban areas Telecommunications A Gartner forecast revealed that Indian cellular services revenue will grow at a compound annual growth rate (CAGR) of 18.4 % to touch US$ 25.6 bn by 2011, with most of the growth coming from semi urban markets. A joint Confederation of Indian Industries (CII) and Ernst & Young report reveals that of the next 250 million Indian wireless users, approximately 100 million (40%) are likely to be from semi urban areas. By 2012, semi urban users will account for over 60 per cent of the total telecom subscriber base in India. Mobile phones in semi urban India also grew by close to 13.72 per cent to reach 70.83 million in April-June 2008 Automobiles The traditional market for auto sector in semi urban areas has been driven by tractors and two-wheelers The two wheeler penetration in villages is only 10% as compared to 25% in urban areas Nearly 50% of the Indian rural market, which includes 220 million households, is potential car buyers. Two-wheeler penetration in rural belts is still very low with less than 10% households owning a two-wheeler. Sensing a huge opportunity many automobile companies are trying to woo the rural consumer However, seeing a huge potential in villages and smaller towns where incomes are increasing, most of the bigger auto brands are now focusing on expanding their share of rural markets Where should we go in Semi Urban??? Congregations Markets University/College areas Hotels/Tourist Complexes UP, Haryana, Punjab, NRI MP, HP, Rajasthan Defence Areas Reasoning UP, Haryana, Punjab, MP, Rajasthan » People are very flamboyant, enjoy festivals and spend lavishly during festivals » Most expensive weddings take place in these states, also the gatherings are enormous » HP is a state with high educational preferences and only sources of development as usually research work is undertaken there (agri studies) Money Belts Industrial Govt. Offices Banks Bihar, Jharkhand, Fisheries/Beach Maharashtra, Kerala, IT Belts Tamil Nadu, Karnataka, Orissa Reasoning Bihar, Jharkhand, Kerala » Extremely rich people, coal and diamond mines, rubber plantations(Kerala, Maharashtra, Karnataka) » IT Hubs, Industries in all sectors (Orissa, Tamil Nadu) » Bank chains, posh residential societies Potential Areas Finance North (Rajasthan, Haryana, MP) Kotak Mahindra IDBI HDFC ICICI Regional State Banks (Eg: Rajasthan- Bank of Rajasthan) South (AP, Karnataka, Kerala) Dhanlaxmi TVS Sundaram Vijaya Bank South India ICICI Who is the Semi Urban Consumer??? Semi Urban Consumer Male Profile Female Profile He is aware about myriad products that are on She is coming out of her closet and is exercising offer in the market place, thanks to television her choice in selected categories He is a responsible, family person and starts She is literate, but now transforming as a career looking for employment at an early age oriented woman He looks for respect more than anything else Mostly women seek work in Home Sciences He could be a bank clerk, an accountant, a She is comfortable going out in groups and tries factory worker, small shop owner, a teacher etc. to find similar company His annual income is pretty low as compared to She is a content woman, happy with her an urban male but he is recognizing better changing lifestyle and recognition lifestyle needs & aims for a higher income Buying Habits They buy daily usable things in large quantities like wheat flour, edible oil etc. Besides the daily use items; they buy things in small quantities and are not concerned with economy They recognize the need of advanced quality products but buy them only on special occasions like wedding or festival They like to show what they have bought when in groups, or evening meets, very common in semi urban The samples or small quantity bottles, in FMCG, is more often preferred by women There is a general perception that if more quantities are bought, it would lead to more wastage They are also flamboyant at times with their purchases so often they go to their neighbors after shopping or take them along Purchase Patterns Influence Customs - They believe in old customs and traditions which influences a lot on the purchasing decision. They look at functionality than on the style, brand and features Packaging and Color - The size, color, shape, and packaging of the product matters a lot. For example, in the south people prefer yellow as good, but in the North it is a sign of a disease Retail Outlet Friendly - More retail outlet friendly customers, and there are fewer stores available per 1000 population Long Term Usage - They buy the product if they feel that the product will sustain for long term usage Economical with Good Quality - There is a saying in Hindi "sasta, sundar, mazboot” They buy the product if it is in their budget. But if the product is good in technology, quality and adds value to their role and status in the society then they do not look at money to buy it. If it is good and long lasting then there is no go back from the consumers Society - They are driven by society. Word of mouth is the key factor in purchasing a product Decision Making Pattern in Semi Urban Category Influencer Decision Maker User Automobile Peers, Neighbors Finance Peers Durables Peers, Neighbors FMCG Friends, Acquaintances, Relatives Telecom Peers, Friends, Neighbors The Male Member in the family exercises the right to make purchase decisions Only decisions with respect to the eatables are chiefly contributed by the woman in the family The neighbors, friends and peers play a crucial role in the decision making for a semi urban consumer As he is a society man primarily, he also wants to buy what his neighbor or his friends have purchased Infrastructure Layout of a Sub Urban Town No. of Households – 9893 Total HH Population – 39255 *The Table shows Education and Health Facilities available in Semi Urban Towns *The survey was conducted in more than 50 towns in South India Marketers’ Infrastructure - Sub Urban Towns across India The availability of Infrastructure in 50 towns surveyed in south India Marketers can make use of large Infrastructure , enhancing today at a greater pace Thank You
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