Great Mahatma Gandhi once said "India lives in villages". Later on in 20th and 21st century, great marketer research on villages and wrote saveral books about the immense opportunities available in villages for business. Still, Products like shampoo, cold drink etc were not being frequently used by Bottom of the pyramid. Consumption of such products was very low in rural markets because people used to wash their hair with soap instead of purchansing a 100 ml bottle shampoo worth Rs 70 or 80. Then came marketer like Cavinkare pvt ltd and Coca cola, who changed the face of rural consumption habit and suddenly the bottom of pyramid become the hot place for FMCG companies. Cavinkare came up with small sachet of 4ml and 6ml in 50 paisa and Rs 1 respectively which was the first revolution for rural market. Consumption of shampoo increased in an unexpected way in rural market. Few other example of such innovations are Coka Rs 5 price point for 200ml coke, 40 gm soap at Rs 5 price point and small toothpaste tubes and oil sachet to increase consumption with frequent traveller. Lets see the communication strategy of coke price point Rs 5 for 200 ml bottle-
In my previous post I have written about different channel to be created by major FMCG companies to cater this huge rural market. But having strong distribution model is not enough for having greater market share. You must have good product offering at affordable price point. Aiming at major market share, big FMCG companies including coca cola, pepsico and britannia are introducing product in low price point particularly Rs 5 as a part of their strategy to shore up volume and increase penetration.
According to market research agency A C Neilsen, bottm of pyramid segment provides a huge opportunity, although currently it contributes only 20% of total consumption and is tipped for explosive growth. By 2015, more than half of consumption spending in India would come from families earning Rs 25,000 a month.
Indian branded powder ready to drink market is valued at Rs 300 crore and the orange flavour is the largest segment in powder softdrink industry where Rasna controls over 90% market share. Coca cola decided to re-enter into branded powder ready-to-drink market with its brand 'Fanta Fun Taste' at an attractive Rs 5 price point in 23.5 gm sachet after it pulled the plug on its sunfill brand 6 year ago.Company has decided to place the product in 1500 outlet across maharasta and gujrat as a part of its pilot project. Company has clear strategy to target the consumer segment at the bottom of socio-economic pyramid.
On the other hand, to maintain market share of company, biscuit giant Britannia has consistently focused on lower end of segment by bringing out products in small packet size and low price point.One reason why Britannia efficiently maintain its market share is because they provide premium quality biscuit under brand name 'Tiger' and 'Treat' lower price point.
Beside these companies, Pepsico who already launched 'Lays' and 'Kurkure' at price point Rs 5 also played at lower price point Rs 5 to increase consumption of its brand 'Nimbooz'.
For FMCG companies these low units pack and low price point has been used as a strategy to build the brand appeal. They act like a brand ambassador even they contribute major chunk of volume. Low price point halps the brand to increase the penetration, while small packs increase the volume because of their convinience. low price and small packs are seem to be best strategy to increasing penetration as well as volume. Hope few more players will come up with different products to cater this market with same strategy.
In my previous post I have written about different channel to be created by major FMCG companies to cater this huge rural market. But having strong distribution model is not enough for having greater market share. You must have good product offering at affordable price point. Aiming at major market share, big FMCG companies including coca cola, pepsico and britannia are introducing product in low price point particularly Rs 5 as a part of their strategy to shore up volume and increase penetration.
According to market research agency A C Neilsen, bottm of pyramid segment provides a huge opportunity, although currently it contributes only 20% of total consumption and is tipped for explosive growth. By 2015, more than half of consumption spending in India would come from families earning Rs 25,000 a month.
Indian branded powder ready to drink market is valued at Rs 300 crore and the orange flavour is the largest segment in powder softdrink industry where Rasna controls over 90% market share. Coca cola decided to re-enter into branded powder ready-to-drink market with its brand 'Fanta Fun Taste' at an attractive Rs 5 price point in 23.5 gm sachet after it pulled the plug on its sunfill brand 6 year ago.Company has decided to place the product in 1500 outlet across maharasta and gujrat as a part of its pilot project. Company has clear strategy to target the consumer segment at the bottom of socio-economic pyramid.
On the other hand, to maintain market share of company, biscuit giant Britannia has consistently focused on lower end of segment by bringing out products in small packet size and low price point.One reason why Britannia efficiently maintain its market share is because they provide premium quality biscuit under brand name 'Tiger' and 'Treat' lower price point.
Beside these companies, Pepsico who already launched 'Lays' and 'Kurkure' at price point Rs 5 also played at lower price point Rs 5 to increase consumption of its brand 'Nimbooz'.
For FMCG companies these low units pack and low price point has been used as a strategy to build the brand appeal. They act like a brand ambassador even they contribute major chunk of volume. Low price point halps the brand to increase the penetration, while small packs increase the volume because of their convinience. low price and small packs are seem to be best strategy to increasing penetration as well as volume. Hope few more players will come up with different products to cater this market with same strategy.
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