Innovation

Companies target rural markets with new products and pricing

Many consumer product are planning to create specific products and pricing to cater rural market
Companies target rural markets with new products and pricing

After witnessing faster growth in the rural markets, Godrej Consumer Products is planning to create specific products and pricing to cater to this market.

Vivek Gambhir, Managing Director, Godrej Consumer Products, said, “ Our rural growth has been higher at 16 percent while urban growth is at 10 per cent this quarter. There would be more affordable products and pricing created for the rural markets including more SKU(stock keeping units) specific to this segment. It is still a struggle to drive consumption in the urban markets while rural growth has been faster.’’

The FMCG major would pursue with more affordable points apart from increasing distribution to reach out to these markets. “ Over rural coverage this quarter has been increased with the addition of 1500 sub stockists. New affordable products like coconut hair cream and fast card also helped in getting rural growth for us,’’ added Gambhir.

With categories like soaps, hair colours and household insecticides, the company has bucked the trend of sluggish growth primarily due to the under penetrated nature of its categories (except soaps) and small base compared to big players like Hindustan Unilever.

“ There is 20 per cent penetration in the household insecticide category giving enough head room to grow. Products like fast card at low price points are allowing more users to come into the category,’’ added Gambhir.

However its fast card technology has been emulated by host of other mosquito repellent brands like Mortein, All Out and Maxo with similar pricing at Rs. 10 for 10 cards.

Having a stronger focus on the southern markets, which is the largest market for this category, has helped its household insecticide portfolio grow at 15 per cent during the first quarter. Competitors like Jyothy Labs which also has brands like Maxo in the same segment did not manage to fare that well.

As Ulhas Kamath, Joint Managing Director, Jyothy Labs observes,“ Our competitors like Godrej have a strong presence in the southern markets but since we have limited presence in the east and north where the summer lasted longer, we did not do that well in the household insecticide category.’’

Despite being the market leader in household insecticide category with brands like GoodKnight and Hit, Godrej has been slow in unleashing its offerings in the international markets. “ We did do a pilot in Nigeria but we are still testing the products and want to get the right proposition and marketing mix and experimenting with various brand options,’’ said Gambhir.

Meanwhile its urban centric brands like Protekt (health and wellness), Bblunt(hair care) and aer(air freshener) still have relatively limited distribution and revenues. “ These brands are not generators of significant revenues but have long term potential and are mostly in the modern trade outlets,’’ added Gambhir.

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