1. RURAL MARKETING

2. The Potential of the Unreached
“The future lies with those companies who see the poor as their customers”
~C.K.Prahalad

3. What makes Rural markets attractive
Substantial increase in purchasing power of rural communities.
Due to the effect of Green revolution, rural areas are consuming a large quantity of industrial and urban manufactured products.
Rural marketing initiatives are driving manufactured or processed inputs or services to rural producers or consumers.

4. What makes Rural markets attractive
Estimated annual size of the rural market
Agri-inputs
Rs crs
Durables
Rs 5000 crs
Rural
Markets
FMCG
Rs crs
2/4 wheelers
Rs 8000 crs
742 million
people

5. What makes Rural markets attractive
LIC
sold 55% policies
in rural India
41 million
Kisan Credit Cards
issued
Rural
Markets
6.6 million
households have
formal savings
investments
42 million households
use banking service
6 lac villages
with Public Tel.

6. What makes Rural markets attractive
Of 20 million Rediffmail signups, 60 % are from small towns. Similarly the 1,00,000 who have transacted on Rediff online shopping site, 50 per cent are from small towns

7. Rural marketing
Two thirds of the countries live in rural areas and almost half of the National Income is generated here.

8. Rural market accounts for 56 % of the total FMCG demand, the tobacco major is moving fast to add 31,000 villages to its market – and all by leveraging its web of 6,000 e- choupals

9. CHARACTERISTICS OF RURAL CONSUMER GROUP
LOCATION PATTERN:-
SCATTERED MARKET
Rural market is a scattered market. Rural population is scattered across 5,70,000 villages.
Unlike urban demand, which is highly concentrator rural demand is scattered over a larger area.
SOCIO-ECONOMIC POSITION:-
Rural consumers continue to be marked by low purchasing power/low per capita income. They continue to be tradition based community.
60% of rural income comes from agriculture.

10. CHARACTERISTICS……CONTD.
CULTURALLY A DIVERSE AND HETEROGENOUS MARKET
Rural markets are diverse in terms of religious, social, cultural and linguistic factors.
Heterogeneity is the no.1 hallmark of the rural market-
5,70,000 villages,
half dozen religions,
33 languages,
1,650 dialects and diverse sub-cultures characterize the market.
LIFESTYLE
Conservative and tradition bound lifestyle.
Lifestyle undergoes major change which may be contributed to several factors:
1. Growth in income and change in income distribution.
2. Growth in education
3. Enhanced media reach.
4. Growing interaction with urban communities.
5. Marketer’s efforts to reach out the rural market.

11. RURAL DEMAND STEADY GROWTH
Welcome change in the composition of rural demand.
Many new products have entered the consumption basket of the rural consumer and relative shares of different categories of products have recorded welcome change.
Several products already well established in rural market.
Textiles, bath soaps, medicines and hygiene products, fans , TVs, packaged tea etc.
In many products rural consumption account for larger share than urban.
In washing soaps, rural share is over 60%, in bath soaps, more than 50% etc..

12. In several products rural market has overtaken the urban in growth rate
A survey by National Council of Applied Economic Research (NCAER) shows that rural market is growing faster than urban market in several products.
These include packaged tea, analgesics, detergent powder, washing soap and detergent cake.

13. Marketing mix for rural markets
Product strategy - Induce rural customers to buy and try the new product
i.e trial by low unit packs , Sachets(HLL),Cavin Care -Chik, P&G-Vicks Vaporub, Godrej with 6ml sachet , HUl – 75gm lifebuoy & 100gm Wheel Detergent , One Rasna schet can make six glasses
Social & Cultural variations – ITC sells its Gold Flake Cigarette pack in yellow cover in South India : Purity & same brand in Golden color in North India .
Visual Patten on Packing : Red soap signifies Lifebuoy soap
Combi- Packs – Colgate offers toothbrush with small toothpaste
Family Packs-Britannia , Priyagold
Product that are fairing well are Parle G , Lifebuoy ,Lux ,Nirma ,and Ghari ,Amul , Coca Cola ,Colgate , Eveready batteries , LG Electronics ,Philips , BSNL , Life Insurance Corporation , Cavin care , Britannia , Hero Honda
Sunfeast and Ashirwad which today contribute to 60% of ITC’s FMCG’s business find a place in all its rural shop shelves

14. Marketing mix for rural markets
Specifically Designed Product – Rajdoot , Eveready brass torch- Jeevan sathi , BATA introduced PVC shoes
Sturdy Product- HLL – Lesancy (big soap)
Brand Names- Pilli tikki forn washing soaps , Logos inserted so that consumers recall the product, Britannia launched economy Glucose biscuits –Tiger
Utility oriented products- Philips introduced ‘Bahadur’ in rural area – a 2 band trasistor which covered entertainment channels as well
Brand names – Britannia ‘s Glucose biscuits as Tiger with red background symbolizing energy.
Samsung’s CTV’s for rural markets in the 14” and 20” categories ,semi-automatic machine below Rs 10,000/-
Salora International , LG Electronics launched Sampoorana , India’s first TV with Devnagri script on screen display
LG’s Golden eye and Onida’s KY Thunder

15. Marketing mix for rural markets
Pricing Strategy- Low cost products i.e Clinic-plus in 50 paisa, one rupee , two rupee pack, Colgate at Rs. 50 /-
HLL derives 50% of its revenue from rural areas,
sells Lux shampoo in a four militer sachet priced at 50 Paisa and six-milliliter sachet priced at one rupee ,
Quality products – Marico - Indian Edible Oil Company
Substitute costly parts with cheaper parts and materials –( Milk proteins with Soya protein) Britannia-Probisk
No steady monthly income –LG electricals
Seconds sale – Akai in India- sales increase

16. Marketing mix for rural markets
Place or Distribution-
Co-operative societies
Utilization of petrol pumps
Feeder markets / Mandi towns
Delivery vans- HLL( Operation Harvest ) fleet of vans regularly visiting remote village and ITC
Project Shakti is HLL’s rural initiative which is an attempt to use self help groups as an alternate distribution channel
Samsung- Van displays all the products , the company has tied up with local distributors to showcase the Samsung range in local melas and fairs

17. Marketing mix for rural markets
Promotion –
Television
Cinema- 36% of the population view cinema
radio
Print Media – 9% read newspaper , 5% publications reach rural area
Hoardings , Posters , Banners- in Melas and puppet shows e.g. HLL,ITC,Godrej,Nirma ,P&G are major FMCG players who book their stalls
Gift Schemes etc,
Unilever – Video Vans

18. Arvind Mills
When Arvind Mills discovered even the cheapest brand could not make dent in the rural markets .
It introduced ready-to-stitch Ruf&Tuf Jeans with price as low as 195 a Piece .
The Jeans were distributed using local retail outlets in villages with population up to 5,000 .
Tailors were trained and given Machine accessories needed to stitch heavy denim
In about year and a half Arvind sold 50 Lakh Rug & Tuf kits because it had beaten the lowest-priced organized sector jeans around Rs. 300 at that time

19. Coca Cola
When Coca –Cola re-entered the Indian Market in the mid-1990’s , it took the high road to marketing and got nowhere.
More recently it re-invented itself and its TV commercial showed Bollywood star Aamir Khan first as a Punjabi Farmer and also in other rustic roles in different parts of India .
Coca –Cola available at Rs. 5 a bottle
Result was within months Coke was able to reach out to rural audiences in large numbers all over India .

20. Cavin Care
Cavin Care ( Chik shampoo fame ) found that many rural consumers are using bathing soap for washing hair since it was practice followed for years
The rural consumer was aware that shampoo cleaned hair better , but at Rs. 2 a sachet it was still beyond reach .
Cavin Care therefore launched Chik in sachet prices very cheap .
Today it is a huge success in rural markets .

21. RURAL MARKETING IS DEVELOPMENTAL MARKETING
FACINATING AND CHALLENGING
Challenges
Lack of understanding of rural customers and data
Poor infrastructure

22. CHANNEL MANAGEMENT Non availability of dealers.
Inadequate banking and credit facilities
The Village shop is the key to Rural Distribution.

23. Sales Force Management
Rural Marketing Calls for Some Special Traits on the Part of Salesmen.
Willingness to be located in rural areas.
Cultural congruence.
Attitude factors.
Knowledge of local language.
Ability to handle several product lines
Creativity.

24. India- Rural Market Opportunities
The rural market in India constitutes 740+ million people, and is by far the largest potential market in the world
Rural annual household income averages Rs.56,630 with high savings rates
Changing rural aspirations in consumption patterns and lifestyle unfolds opportunities for rural marketing
Literacy levels are rising steadily