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Strategy   URGENT - Need Help Fast!  
 
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How To Compete With Unorganised Sector In Rural Mk
Posted By: ranjitkaramchandani on 8/29/2005 12:46 AM (CST) 250 Points
I am marketer of branded set top box (to view only free to air channels) and is finding extremely tough to market it . Just to gv u an idea of STB mkt , it iscurrently flooded with chinese and various local makes at extremely low cost(almost 60% less than our cost). target market for this product is basicaly rural mkt where cable has not penetrated .since tgt mkt is rural in nature i am finding extremely tough to communicate that why user should go for branded (organised sector)STB rather than low cost local make or chinese. here i would like to mention that the diff in cost is mainly becaz of taxes avoided by unorganised players and low quality chipsets used by them how ever these boxes do serve the basic purpose that is viewing Free To Air channels.For our so called branded prod i am not getting even channel partners support as they dont make as good money in it as in local products and with out placing my STBs in their counters i cant go for big advt also as there will b no use of ad if prod is nt avail over the counters . so i am facing extreme dilemma abt hw to win both channel partner 's confidence along with customer's confidence that is rural in nature.It seems for rural people organised product and all does nt matter much and cost is only criteria. pls suggest some thing to overcome this dilemma.

Posted by: virago* Accepted Answer
8/29/2005 8:22 AM (CST)
The China Price. This is what's it's called. Industries have been wiped out within 2 years from Chinese imports cutting the cost out of local products and ruining the market.

When you are up against a product that is 60% cheaper we know where we are all going to go. Look it from a consumers point of view, and one that is price senstive as the rural market. You are going to go for the cheaper option.

When you are not offering a differentiated product at a higher price, more services etc then it's hard to justify the price difference.

As I hate to say it but can you reduce your price to close to theirs and advertise on the local product, better quality angle? Otherwise sell through your stock and import from China your product but branded. This will compete in the market on price but also have an added branded product that will differentiate better.
 
Posted by: Wiglaf Accepted Answer
8/29/2005 12:47 PM (CST)
Two answers here:

Seconding Virago - why should a customer buy your product over the cheaper one? You listed the reasons why your product is more expensive from a component basis, but you didn't mention any reasons why it would provide greater value to the customers so as to warrent thier purchasing of your product at the higher price.

And, as to how to reach the rural market, have you tried working with the Rural Electric Cooperatives as a route to get Rural America your product? They sell some stuff and what you offer sounds like something they would be willing to sell as a channel partner. Try call a few after looking up RECA in google.

Alternatively, you can try advertising in some of the farming equipment magazines or seed magazines.
 
Posted by: skoobie99 Accepted Answer
8/29/2005 4:28 PM (CST)
Both Virago and Wiglaf are right on the mark.

You didn't mention it, but perhaps your branded product (soon to be sourced from China, as Virago points out) ought to have a killer warranty, based on the better components used to build it - this is not going to make someone pay 60% higher price, but it will help when you get your price close (think Hyundai automobiles and 10-yr warranties).

Another area you might want to try in addition to rural electric cooperatives is farm co-ops. Some can be quite large and they will definitely help you target the individuals in the rural areas who will be spread all over.

Hope this helps,
John
 
Posted by: deedee Accepted Answer
8/30/2005 6:40 AM (CST)
From your name, i am assuming you are based in India. and my answer is pertaining to second half of your question on how to reach rural audiences.

You could try a tie up with ITC's e-chaupal. You could speak to a rural agency who puts up mobilevans during haats (local markets). Wall painting is another idea.

You could look at providing higher margins to distributors and retailers of these products (especially the ones who sell chinese products) and emphasise 'service' as your selling point. but i agree with all other comments, at 60% higher price, it is going to be tough if there is no product or service differentiator; unless you are a well known brand in rural markets.
 
Posted by: sshibad* Accepted Answer
8/30/2005 10:18 AM (CST)
Rural marketing is a complex art in India. Few have mastered it.
A few suggestions:

1. Never, ever think the rural customer is stupid as compared his urban counterpart.
2. Price is king. Quality comes second.
3. Initiate a promotion: Buy one, get one free. This will allow you to make inroads into the market. or an exchange offer.
4. Organise demos/roadshows where you can show the customers how your STB is superior in clarity, reception, etc. to the Chinese imports.
5. Get the village sarpanch and other prominent denizens to endorse your brand.

Hope this helps.

Sunil
 
Posted by: rajsdoshi Accepted Answer
9/9/2005 8:07 PM (CST)
Here :

Before you get market share, you will have to create awareness. That is, do the following to generate a 'response' from the market. The strength of this response will tell you which option to pick, and how hard you should drive it.

-------------------------------------------------
Option 1: Offer a different business model:
-------------------------------------------------
- using a contract, offer a low monthly installment
- Buy 10, get 10 free; and highlight the 10 Free.

------------------------------------------
Option 2: Play the Nationality factor:
------------------------------------------
- Jai Jawan, Jai Kishan, Jai
- Demonstrate (via Ads or TV) that Indian workers are starving and Chinese workers are laughing
- Highlight Patriots as those that buy India products, while Cowards buy non-Indian products

---------------------------------------------
Option 3: Illustrate your differentiation:
---------------------------------------------
- Create an AD that illustrates the unreliability of Chinese product. For eg., show people watching a favorite show, and the STB conks out. Show helplessness and desparation.
- Show a beautiful woman who turns down a marriage proposal from one guy but accepts a proposal from a guy looking like a 'loser' but was smart to buy and install your STB in his bedroom.
- Or other ways that redefine 'smartness.'
- Or any way you can highlight your proposition that creates a smile on the viewer's face.
- Also, run a promotion that says 10 callers will get a STB for free. You can say: "We are giving the Chinese real competition. We give it away FREE!!!!" Provide a number where they can call your company. Monitor what calls you get when. Keep this data to refine you next promotion.

-----------------------------------------------------
Option 4: Change Focus: Grease the Reseller:
-----------------------------------------------------
- Pick a high-volume or visible reseller
- Find a way to motivate the reseller to carry/promote you
- If all else fails, before the busiest season, grease the palms of the reseller to promote you for a short time.

---------------------------------------------
Option 5: Create FUD: Fear Uncertainty and Doubt.
---------------------------------------------
- Bribe officials to conduct raids on resellers who don't pay taxes. Alert reporters. Create negative press around Competitor product.
- Have an official 'confiscate' Competitor's STB during a favorite show. Have reportors cover the event. Headline should be: "Real cost of Chinese STB = Rs. 500,000" or some outrageous number.

Which Option you pick depends on your situation.

The main idea is First to test if the market will even respond to you. That is, make space in their heads or hearts for you. Monitor buzz. If they talk about you, then they want some competition. If they do, then invest more in your campaigns.

- Raj Doshi -
 
Posted by: carrie77 Moderator Response
9/16/2005 7:13 AM (CST)
Hello all. I am closing this question since it's more than 2 weeks old. We do this to reward the contributions of participants in a timely manner + to give increased visibility to the newer questions.

Thanks for participating!
Carrie (Porduction Editor)
 


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