A Seminar Report On “RURAL MARKETING”

Submitted in the partial fulfillment of the award of PG Degree of Master of Business Administration Session 2008-09

Submitted To:
Department of Management Studies,

Submitted By:Ravi MBA 4th sem. (Marketing) Jaipur


Executive Summary
A debate continued for a long time amongst the Indian marketers, both practitioners & academicians, on the justification for the existence of the distinct discipline of rural marketing. Consequently, two schools of thought emerged. The first school belived that the products/services, marketing tools & strategies that are successful in urban areas, could be transplanted with little or no more modifications in rural areas. However, the second school saw a clear distinction between urban & rural India, & suggested a different approach, skills, tools & strategies to be successful in rural markets. What differentiates the two markets is not mere income, but a host of other infrastructural & socio-cultural factors. Thus, the rural market cannot be tapped successfully with an urban marketing mindset & would definitely require its thorough understanding. In other words, the approach toward rural markets needs to be distinct from the one adopted for the urban markets. Thus, in a large rural economy like India’s, rural marketing has emerged as an important & distinct internal sub-division within the marketing discipline. This sub-division clearly highlights the differences between rural marketing & mainstream marketing.


Table of contents
1) Rural marketing 2) Evolution of rural marketing 3) Nature of rural market 4) Rural marketing transactional or developmental 5) Classification of rural consumers 6) Roadblocks of Indian Rural Markets 7) Attractiveness of rural market 8) Rural Vs Urban Marketing 9) Rural consumer behavior 10) 4 A’s approach of Indian Rural Market 11) Rural marketing Mix 12) Marketing strategies to capture rural market 12.1.Product strategies 12.2.Pricing strategies 12.3.Promotion strategies 12.4.Distribution strategies 13) Media vehicles 13.1.Formal media 13.2.Informal/rural specific media 13.3.Choosing media vehicles 14) Conclusion 15) References 44 45 46 53 54 57 64 65 66 3 4 8 9 11 12 14 19 22 25 28 37 42


fruits and vegetables. 3. Urban to Rural: A major part of rural marketing falls into this category. The following are some of the important items sold from the rural to urban areas: seeds. distributing rural specific product and a service leading to exchange between rural and urban market which satisfies consumer demand and also achieves organizational objectives. FMCG Products. The transactions relate to the areas of expertise the particular village has. An agent or a middleman plays a crucial role in the marketing process. These include: Pesticides. Rural to Rural: This includes the activities that take place between two villages in close proximity to each other. pricing. URBAN RURAL RURAL URBAN RURAL RURAL It is a two-way marketing process wherein the transactions can be: 1. It involves the selling of products and services by urban marketers in rural areas. Consumer durables. These include selling of agricultural tools. spices. carts and others to another village in its proximity.Rural Marketing Rural marketing involves the process of developing. forest produce. etc. cattle. milk and related products. promoting. Rural to Urban: Transactions in this category basically fall under agricultural marketing where a rural producer seeks to sell his produce in an urban market. 4 . etc. 2.

farmers. products. Rural marketing basically deals with delivering manufactured or processed inputs or services to rural producers. which in turn is characterised by various peculiarities in terms of nature of market. government agencies and traders. Most of the jobs of marketing and selling are left to the local dealers and retailers. consumer goods. money and labour. This has designed a new way for understanding a new process called Rural Marketing. product design and positioning. distribution and promotion. pricing. The rural agricultural production and consumption process plays a predominant role in developing the Indian economy. Indian agricultural industry has been growing at a tremendous pace in the last few decades. which includes participants. The concept of rural marketing has to be distinguished from Agricultural marketing. Rural marketing is different from agricultural marketing. One has to have a strategic view of the rural markets so as to know and understand the markets well. Rural marketing scientists also term it as developmental marketing. Companies need to understand rural marketing in a broader manner not only to survive and grow in their business. norms and outcomes. products and processes. Rural market for agricultural inputs is a case of market pull and not market push. which signifies marketing of rural products to the urban consumer or institutional markets. as the process of rural marketing involves an urban to rural activity. modalities. The rural areas are consuming a large number of industrial and urban manufactured products. In the context of rural marketing one has to understand the manipulation of marketing mix has to be properly 5 . opinion makers. but also a means to the development of the rural economy. besides being titled towards profit. Marketing is the process of identifying and satisfying customers needs and providing them with adequate after sales service.Rural marketing requires the understanding of the complexities. the demand for which is basically a derived outcome. The market for input gets interlocked with other markets like output. Rural marketing needs to combine concerns for profit with a concern for the society. Rural marketing differs from agricultural or consumer products marketing in terms of the nature of transactions. The participants in case of Rural Marketing would also be different they include input manufacturers. Rural marketing in India is not much developed there are many hindrances in the area of market. dealers.

Phase I ( from Independence to Green Revolution): 6 . Evolution of Rural Marketing PHASE I ORIGIN Before Mid1960 (from independence to green II revolution) Mid. Product usage is central to price.Nineties (Postliberalization period on 20th century) IV 21st century Developmental marketing Rural Marketing Consumables And Durables For Consumption & Production All products & services Urban & Rural Urban & Rural Urban & Rural Rural Marketing Of Agricultural Inputs Agricultural Inputs Urban Rural Agricultural Marketing Agricultural Produce Rural Urban FUNCTION MAJOR PRODUCTS SOURCE MARKET DESTINATION MARKET 1.Sixties (Green revolution to Preliberalization III period) Mid. promotion. thus any strategy in rural marketing should be given due attention and importance by understanding the product usage.understood in terms of product usage. company image and more important farmer economics. branding. all elements of marketing mix can be better organised and managed. distribution.

The objective of rural marketing in the current phase is the improvement of the quality of life by satisfying the needs & wants of the customers. Phase IV (21st century): Learning from its rural marketing experiences after the independence. Rural marketing then referred to the marketing of rural products in rural & urban products. 4. because of scientific agriculture. But now it is felt that with the tempo of development accelerating in rural India. And. rural India in now attracting more and more marketers. the focus of marketers in India was the urban consumer and by large number specific efforts were made to reach the rural markets. In this period. peoples & their occupations. improved means of transportations and communication and other penetrations of mass media such as television and its various satellite channels have exposed rural India to the outside world and hence their outlook to life has also changed. 2. Phase III (Post-liberalization period on 20th century): The third phase of rural marketing started after the liberalization of the Indian economy. Its approach & strategies must not focus in just selling products & services. the nature of rural market was altogether different. the changing life style and consumption pattern of villagers with increase in education. not through atand-alone products or services. rural marketing represented the emerging. it needs to make a long-term commitment with this market. social mobility. 3. rural marketing represented marketing of agriculture inputs in rural markets & marketing of rural produce in urban areas. but by presenting comprehensive & integrated solutions which might involve a set of interrelated products & services. but they should also aim at creating an environment for this to happen. Till recently. 7 . the corporate world has finally realized the quick-fix solutions & piecemeal approaches will deliver only limited results in the rural markets. coupled with increase in purchasing power. Phase II (Green Revolution to Pre-liberalization period): During these times. if an organization wants to tap the real potential of the rural market. distinct activity of attracting & serving rural markets to fulfill the need & wants of rural households. due to the advent & spread of the Green Revolution.Before the advent of the Green revolution. Because of all these factors.

Nature of Rural Market  Large. Thus. Companies like Hindustan Lever. the purchasing power of the rural people has increased due to increase in productivity and better price commanded by the agricultural products. According to a recent survey conducted by the National Council for Applied Economic Research (NCAER). Britannia and even Multinational Companies (MNCs) like Pepsi. understanding their needs and wants. Cavin Kare are all eyeing rural markets to capture the large Indian market. carrying out after sales service that leads to customer satisfaction and repeat purchase/sales. the income of the rural masses is directly affected. Diverse and Scattered Market: Rural market in India is large.. Indian rural markets have caught the attention of many companies.Increase in competition. advertisers and multinational companies.  Major Income of Rural consumers is from Agriculture: Rural Prosperity is tied with agriculture prosperity. In the event of a crop failure. Philips. Colgate Palmolive. By and large this rise in purchasing power remains unexploited and with the growing reach of the television. supply of goods and services to meet their requirements. saturated urban markets. Coming to the frame work of Rural Marketing. Rural Marketing broadly involves reaching the rural customer.G. more and move new products demanding urban customers. Rural marketing has become the latest mantra of most corporate. Coca Cola. and scattered into a number of regions. L. it is now quite easy for the marketers to capture these markets. There may be less number of shops available to market products. made the companies to think about new potential markets.  Standard of Living and rising disposable income of the rural customers: It is known that majority of the rural population lives below poverty line and has low 8 .

 Rising literacy levels: It is documented that approximately 45% of rural Indians are literate. etc. rural people have disparate socioeconomic background. warehouses.  Traditional Outlook: Villages develop slowly and have a traditional outlook. Hence physical distribution is a challenge to marketers who have found innovative ways to market their products. The role of rural marketing as such is more developmental than transactional.  Diverse socioeconomic background: Due to dispersion of geographical areas and uneven land fertility. It is more a process of delivering better standard of living and quality of life to the rural environment taking into consideration the prevailing village milieu. societal backwardness.  Infrastructure Facilities: The infrastructure facilities like cemented roads.literacy rate. Today the rural customer spends money to get value and is aware of the happening around him. low savings. Hence awareness has increases and the farmers are well-informed about the world around them. communication system. Change is a continuous process but most rural people accept change gradually. good monsoon. Is rural marketing transactional or developmental in its approach? It is true. This is gradually changing due to literacy especially in the youth who have begun to change the outlook in the villages. 9 . rural markets have become an attractive proposition for commercial business organizations. low per capital income. and financial facilities are inadequate in rural areas. They are also educating themselves on the new technology around them and aspiring for a better lifestyle. government regulation on pricing has created disposable incomes. which ultimately affects the rural market. But the new tax structure.

Marketing concept Development Society orientation. economic Government.Transactional Vs Developmental: For better comprehension of this role let us distinguish development marketing and transactional marketing. 12. corporate enterprises. 6. societal concept Catalytic and transformation agent Social change Social innovations and communications Socio-cultural. voluntary agencies. 8. 9. 5. Transactional Vs Development Marketing S. benefactors Development projects/schemes/programs Beneficiaries and buyers Developmental Market development Corporate Image Medium-Long Service-motive Ideological or Public policy 2.No. Role Focus Key task Nature of activity Participants Stimulating and conversional marketing Product-market fit Product innovations and communications Commercial Corporate enterprises. 10. Initiation and management of social and economic change in the 10 . 1. Offer Target group Communication Goal Products and services Buyers Functional Profits Customer satisfaction Brand image Short-medium Profit-motive Business policy 11. Table brings out the differences in brief. • Rural marketing process is both a catalyst as well as an outcome of the general rural development process. Sellers 7. Aspect Concept Transactional Consumer orientation. Time-Frame Motivation Model: The model of rural marketing represents a combination of the transactional and developmental approaches. 4. 3.

It becomes in this process both benefactor and beneficiary. • Innovation is the essence of marketing. Such a change narrows the rural-urban divide. Classification of rural consumers The rural consumers are classified into the following groups based on their economic status: • The Affluent Group: They are cash rich farmers and a very few in number. • The process of transformation can be only evolutionary and not revolutionary. They have affordability but not form a demand base large enough for marketing firms to depend on. • Communication is the vital element of rural marketing. Farmers cultivating sugar cane in UP and Karnataka fall in this category. 11 . • The exposure of ruralites to a variety of marketing transactions during the change process puts them in the role of beneficiaries than of just `buyers' of modern inputs and infrastructural services. The growth of the rural market can be a planned evolutionary process based on strategic instruments of change rather than constitute just short-term opportunities for commercial gains. Another critical point for communication is the point of conversion of ruralite from an "induced beneficiary" to an "autonomous buyer". It should serve to resolve social conflicts. Innovative methods of social change for successful transformation of traditional society are virtual. Wheat farmers in Punjab and rice merchants of Andhra Pradesh fall in this group.rural sector is the core of the rural marketing process. encourage cooperation and strengthen competitive spirit during interactions between rural and urban as well as within rural areas. • The Middle Class: This is one of the largest segments for manufactured goods and is fast expanding.

Transportation and warehousing: Transportation is one of the biggest challenges in rural markets. Demand may not be stable or regular. about 50% of Indian villages are connected by roads. Many villages are located in hilly terrains that make it difficult to connect them through roads. Low per capita income: Agriculture is the main source of income and hence spending capacity depends upon the agriculture produce. 5. Print media has less utility compared to the other media of communication. but strength is more. The farmers of Bihar and Orissa fall under this category. Roadblocks of Indian Rural Markets There are several roadblocks that make it difficult to progress in the rural market. proper and effective deployment of sales force and effective marketing communication when they enter rural markets. Warehousing is another major problem in rural areas. The major problems are listed below. 3. Low literacy levels: The low literacy levels in rural areas leads to a problem of communication.• The Poor: This constitutes a huge segment. However. 4. logistics. As far as road transportation is concerned. Marketers encounter a number of problems like dealing with physical distribution. 2. They receive the grants from government and reap the benefits of many such schemes and may move towards the middleclass. 1. Standard of living: The number of people below the poverty line is more in rural markets. Purchasing power is less. Thus the market is also underdeveloped and marketing strategies have to be different from those used in urban marketing. which in turn increases the cost and 12 . as there is hardly any organized agency to look after the storage issue. Ineffective distribution channels: The distribution chain is not very well organized and requires a large number of intermediaries. Most marketers use tractors or bullock carts in rural areas to distribute their products. The services rendered by central warehousing corporation and state warehousing corporations are limited only to urban and suburban areas. the rest of the rural markets do not even have a proper road linkage which makes physical distribution a tough task.

10. different behaviour and language of the respective areas make it difficult to handle the customers. but it continues to be a far cry in rural areas due to lack of communication facilities like telegraph and telecommunication systems etc. This is a challenge to the marketers. 6. Traits among the sales force are required to match the various requirements of these specific areas. 8. Lack of communication system: Quick communication is the need of the hour for smooth conduct of business. providing a low cost option to the rural customer. which may be a problem for effective communication. Many a time the rural customer may not be aware of the difference due to illiteracy. A lot of spurious brands or look-alikes are available. 7.creates administrative problems. Many languages and diversity in culture: Factors like cultural congruence. Harvest season might see an increase in disposable income and hence more purchasing power. manufacturers are reluctant to open outlets in these areas. The literacy rate in the rural areas is rather low and consumer’s behaviour in these areas is traditional. They are mainly dependent on dealers. Spurious brands: Cost is an important factor that determines purchasing decision in rural areas. Due to lack of proper infrastructure. Attractiveness of rural market 13 . Seasonal demand: Demand may be seasonal due to dependency on agricultural income. who are not easily available for rural areas. Dispersed markets: Rural population is highly dispersed and requires a lot of marketing efforts in terms of distribution and communication. 9.

1 2 3 4 5 6 7 8 1. 2. Large population Rising prosperity Growth in consumption Life cycle changes Life cycle advantages Market growth rate higher than urban Rural marketing is not expensive Remoteness is no longer a problem Large Population: The rural population is large and its growth rate is also high. Rising Rural Propensity: 14 . Despite the rural urban migration. the rural areas continue to be the place of living majority of Indians.

25. 77.09 2006 – 07 RURAL TOTAL NO. 50. 0. STATES Punjab Kerala Haryana Rajasthan Gujarat Andhra Pradesh Maharastra West Bengal Orissa Tamil Naidu Uttar Pradesh Karnataka Assam Madhya Pradesh Bihar EXPENDITURE 614 604 546 452 416 386 384 382 381 381 373 365 338 326 289 High (Above Rs 382/-) 7 Average (Rs.07 12.8 4. Growth in consumption: PER CAPITA HOUSEHOLD EXPENDITURE (IS RS. 25.000.000 & BELOW 1994-95 1.4 2000-01 3.25. The rural consuming class is increasing by about 3-4% per annum.001-100.1 61.8 95.3% in 1994-95 to 67.3 2 3.0% in 2006-07.INCOME GROUP ABOVE RS.72 3.2 8 % 23.9 6 4. 100.52 0.000 RS.000 RS.3 26.7 13.000 will increase from 34.12 16. which roughly translates into 1.77.001-77.68 10.6 5.4 44.7 8. 382/-) 5 3 Distribution household’s income wise (projection in Rs Crore) 2001 – 02 RURAL TOTAL NO.) LEVEL NO.7 15 . 0. 3.0 41.000 RS.1 37.04 5.2 million new consumers yearly. 382/-) Low (Below Rs.26 0.0 61.4 2006-07 5.7 7.8 22.001-50.73 5.6 2.000 RS.6 20.2 Thus we see that population between income level of Rs.52 INCOME GROUPS HIGH MIDDLE LOW % 2 6.

04 12.4 20.TOTAL 18.7 7 1.90 13. 4.9 6 66.7 Spending pattern (Rural Household’s in Rs. 215/-. usage of packed consumer goods (% of household using) 16 .8 9 8.) ITEM FOOD ARTICLES TOILETRIES WASHING MATERIAL COSMETICS OTC PRODUCTS OTHERS TOTAL % RICH 4 147 4 2 67 0 1 43 3 1 33 0 4 13 9 30 333 POOR 73 33 22 17 6 15 166 AVERAGE 95 43 28 21 9 19 215 Average rural household spends on consumables excluding food grains. milk & vegetables are Rs. Life style changes: Income vs.

cooking medium (vanaspati). The rural market share will be more than 50% for the products like toilet soaps. Life cycle advantage: STAGES IN LIFE CYCLE PRODUCT MONTHLY HOUSEHOLD INCOME (RS.) UP TO 350 351 – 751 – 1501 + 60 57 22 20 22 750 78 72 36 25 30 1500 86 89 65 41 48 91 93 85 63 64 URBAN MARKET GROWTH RURAL Growth Early growth Early growth Growth Growth RATE % Popular soaps Maturity 2 Premium soaps Late growth 11 Washing powder Late growth 6 Skin creams Maturity 1. The rural distribution is not much developed for the reasons. Rural marketing is not expensive: Conventional wisdom dictates that since rural consumers are dispersed. van operations and merchandising and point of purchase promotion. new research indicates that the selling in Rural India is not expensive.GOODS WASHING CAKES/BARS TOILET SOAPS TOOTH PASTE/POWDER TALCUM POWDER TEA (PACKAGED) 5. Remoteness is no longer a problem: Remoteness in a problem but not insurmountable. costs twice as much in urban area. tea. 8. television spots. Market growth rates higher: Growth rates of the FMCG market and the durable market are higher in rural areas for many products. 17 . which can reach millions. cigarettes and hair oil. This includes the expenses of advertising in vernacular newspapers.1 Talcum powder Maturity 4 6. 7. radio. in-cinema advertising. According to one research it costs roughly Rs.1 Crore to promote a consumer durable inside a state. cooking medium (oil). body talcum powder. reaching them is costly. However. Campaign like this.

Marketers have so far. Development Marketing & Relationship Marketing 2 A) MARKET 18 . Lack of proper infrastructure such as all-weather roads. and  Lack of marketer’s imagination and initiative.Haats & Melas.Their near obsession with just duplicating the urban-type network and that too with very limited success. RURAL VS URBAN MARKETING-SUMMARY NO. 1 ASPECT URBAN Marketing & Societal Concepts & PHILOSOPHY Relationship Marketing RURAL Marketing & Societal Concepts. failed in analyzing the rural side and exploiting rural India’s traditional selling system. electrification and sanitation. has kept them blind to the potential of these two outlets.

print media to some extent. & authorised showrooms Good High Print.B) C) DEMAND COMPETITION CONSUMERS LOCATION LITERACY INCOME EXPENDITURE NEEDS INNOVATION/ADOPTION High Among Units In Organized Sector Concentrated High High Planned. stockists. exhibitions etc. Variation Low Level Slow Low Less Known Difficult Difficult To Grasp Moderate Very much Medium-low Village shops. gifts. “Haats” 3 4 5 PRODUCT AWARENESS CONCEPT POSITIONING USAGE METHOD QUALITY PREFERENCE PRICE SENSITIVE LEVEL DESIRED DISTRIBUTION CHANNELS specialty stores. frequently Contests. few languages Door-to-door. price discounts Less opportunities TRANSPORT FACILITIES PRODUCT AVAILABILITY 6 PROMOTION ADVERTISING media. supermarket. Even High Level Faster High Known Easy Easily Grasped Good Yes Medium-high Wholesalers. retailer. radio. More languages Occasionally Gifts. outdoors. price discount Good opportunities PERSONAL SELLING SALES PROMOTION PUBLICITY Special Products for Rural Markets: 19 . audio visual Average Limited TV. Low Mostly From Unorganized Units Widely Spread Low Low Seasonal.

it is poor cousin to the original. a poor imitator may even produce an improved version of the original product. fake. In fact it is considered to be a high priority list. It was also found that a rural consumer looks for the ruggedness of the watch more than the urban consumer does. rural consumers unfamiliar with English would still be able to use the TV without being intimidated. The product at 20-25 HP will be targeted at those who cannot afford a normal tractor and would also fulfill the need of family transporter that could take in the rural roughs but would be much more comfortable and safer than the conventional tractor-trolley. A poor imitator will end up in producing deceptive. 21 Lacs to develop a set that would have on-screen displays in the vernacular languages of Hindi. the Korean firm has rejigged the TV to appeal to local needs. Need-Product Relationships and the changes happening in Rural India Needs Old Products New Products 20 . He prefers thick watches than slim watches. In this scenario the job of the Marketer becomes even more difficult in the sense that he has not to fight other competitors but also the imitated products. spurious. Imitations may result in two types of goods depending upon the purpose.• Rural Transporter: Mahindra & Mahindra is busy developing the prototype of what it calls a ‘Rural Transporter’ – basically a hybrid between a tractor and a rural transport vehicle. It spent Rs. copycat products. To solve this problem the Marketer has to educate the consumer about his product and show him the benefits of his products over the imitated ones. The advantages that these products enjoy in the rural markets are that the Imitators who are in the villages are making these and they are offering More Margins & Better credit Facilities. He dupes the gullible customer by offering products having close resemblance with the original. • Titan Watches: A recent NCAER study revealed that there is a great potential for watches in rural areas. and competence of imitator. Tamil and Bengali. The logic. In quality. commitment. • Sampoorna TV: LG Electronics. The biggest problem that the Marketers are facing in the Rural Markets is Of IMITATIONS. On the other hand.

Power Generators. Donkeys Wells.Brushing Teeth Washing Vessels Transport Irrigation Hair Wash Neem sticks. Husk Coconut fiber. Earthy materials. Motor cycles Bore-wells. tooth powder Washing Powders. Brick Powder. Canals. Mopeds. Water lifters. Wind Mills Shikakai powder. soaps and liquids Tractors. Retha. Motors. Pump Sets Shampoos and hair care soaps 21 . Horses. Rocksalt. Ash Bullock Cart. LCVs. Besan Toothpaste. Scooters. Charcoal.

Environmental of the consumer . The consumer market in this case is Rural India. 2. within which the consumer lives. About 70% of India’s population lives in rural areas.The geographic location in which the rural consumer is located also speaks about the thought process of the consumer. has a very strong influence on the buyer behavior. All of these final consumers combined make up the consumer market. Family size & the roles played by family members exercise considerable influence on the purchase decisions. etc.The environment or the surroundings.000 villages in the country as against about 300 cities and 4600 towns. There are more than 600. purchase of durable has less to do with income. Geographic influences . Thus utmost care in terms of understanding consumer psyche needs to be taken while marketing products to rural India. Thus. Villagers react differently to different products. colours. 3. Electrification. Thus. Factors influencing buying behavior The various factors that affect buying behavior of in rural India are: 1. villages in South India accept technology quicker than in other parts of India. HMT sells more winding watches in the north while they sell more quartz watches down south. Family – it is an important buying decision making organization in consumer markets. Industry observers are increasingly realizing that at times.individuals and households who buy goods and services for personal consumption. For instance. but has more to do 22 . sizes. water supply affects demand for durables. Consumers in this huge segment have displayed vast differences in their purchase decisions and the product use.Rural Consumer Behaviour Consumer Buyer Behaviour refers to the buying behaviour of final consumers . in different parts of India. it is important to study the thought process that goes into making a purchase decision. so that marketers can reach this huge untapped segment. egs.

5. But however. More than 70% of the people are in small-scale agricultural operation. For example. The marketer needs to understand the role played by the buyer’s culture. Brand preference and loyalty (80% of sale is branded items in 16 product categories) Cultural factors influencing consumer behaviour Cultural factors exert the broadest and deepest influence on consumer behaviour. agriculture is the primary occupation. 7. was not well accepted. which determine to a great extent. which only goes on to make the marketer’s job tougher. Some of the few cultural factors that influence buyer behaviour are: 1.with the size of the family & that’s where rural India with joint family structures. and shape): There are many examples that support this point. a. size. design. Creative use of product ex Godrej hair dye being used as a paint to colour horns of oxen. The study of product end provides indicators to the company on the need for education and also for new product ideas. what the customer will be able to buy. which was launched in rural India in a white colour. there are so many different cultures. the Tata Sumo. Culture is the most basic element that shapes a person’s wants and behaviour. In India. Economic factors – The quantum of income & the earning stream are one of the major deciding factors. Many people in the rural market are below poverty line & for large number of people. variety & price) Companies need to assess the influence of retailers on both consumers at village shops and at haats. Washing machine being used for churning lassi. 6. These factors affect the purchase decision. becomes an attractive proposition. Product (colour. Place of purchase (60% prefer HAATS due to better quality. when the same Sumo was re- 23 . 4.

launched as Spacio (a different name) and in a bright yellow colour, with a larger seating capacity and ability to transport good, the acceptance was higher. b. Another good example would be Philips audio systems. Urban India looks at technology with the viewpoint of ‘the smaller the better’. However, in rural India, the viewpoint is totally opposite. That is the main reason for the large acceptance of big audio systems. Thus Philips makes audio systems, which are big in size and get accepted in rural India by their sheer size. 2. Social practices: There are so many different cultures, and each culture exhibits different social practices. For example, in a few villages they have common bath areas. Villagers used to buy one Lifebuoy cake and cut it into smaller bars. This helped lifebuoy to introduce smaller 75-gram soap bars, which could be used individually. 3. Decision-making by male head: The male in Indian culture has always been given the designation of key decision maker. For example, the Mukhiya’s opinion (Head of the village), in most cases, is shared with the rest of the village. Even in a house the male head is the final decision maker. In rural areas, this trend is very prominent. 4. Changes in saving and investment patterns From gold, land, to tractors, VCR’s, LCV’s


4 A’s approach of Indian Rural Market
The rural market may be appealing but it is not without its problems: Low per capita disposable incomes that is half the urban disposable income; large number of daily wage earners, acute dependence on the vagaries of the monsoon; seasonal consumption linked to harvests and festivals and special occasions; poor roads; power problems; and inaccessibility to conventional advertising media. However, the rural consumer is not unlike his urban counterpart in many ways. The more daring MNC’s are meeting the consequent challenges of availability, affordability, acceptability and awareness (the so-called 4 A’s)

The first challenge is to ensure availability of the product or service. India's 627,000 villages are spread over 3.2 million sq km; 700 million Indians may live in rural areas, finding them is not easy. However, given the poor state of roads, it is an even greater challenge to regularly reach products to the far-flung villages. Any serious marketer must strive to reach at least 13,113 villages with a population of more than 5,000. Marketers must trade off the distribution cost with incremental market saturation. Over the years, India's largest MNC, Hindustan Lever, a subsidiary of Unilever, has built a strong distribution system which helps its brands reach the interiors of the rural market. To service remote village, stockiest use autorickshaws, bullock-carts and even boats in the backwaters of Kerala. Coca-Cola, which considers rural India as a future growth driver, has evolved a hub and spoke distribution model to reach the villages. To ensure full loads, the company depot supplies, twice a week, large distributors which who act as hubs. These distributors appoint and supply, once a week, smaller distributors in adjoining areas. LG Electronics defines all cities and towns other than the seven metros cities as rural and semiurban market. To tap these unexplored country markets, LG has set up 45 area offices and 59 rural/remote area offices.


The second challenge is to ensure affordability of the product or service. With low disposable incomes, products need to be affordable to the rural consumer, most of who are on daily wages. Some companies have addressed the affordability problem by introducing small unit packs. Most of the shampoos are available in smaller packs. Fair and lovely was launched in a smaller pack. Colgate toothpaste launched its smaller packs to cater to the travelling segment and the rural consumers.Godrej recently introduced three brands of Cinthol, Fair Glow and Godrej in 50-gm packs, priced at Rs 4-5 meant specifically for Madhya Pradesh, Bihar and Uttar Pradesh — the so-called `Bimaru' States. Hindustan Lever, among the first MNC’s to realize the potential of India's rural market, has launched a variant of its largest selling soap brand, Lifebuoy at Rs 2 for 50 gm. The move is mainly targeted at the rural market. Coca-Cola has addressed the affordability issue by introducing the returnable 200-ml glass bottle priced at Rs 5. The initiative has paid off: Eighty per cent of new drinkers now come from the rural markets. Coca-Cola has also introduced Sunfill, a powdered soft-drink concentrate. The instant and ready-to-mix Sunfill is available in a single-serve sachet of 25 gm priced at Rs 2 and multi serve sachet of 200 gm priced at Rs 15.

The third challenge is to gain acceptability for the product or service. Therefore, there is a need to offer products that suit the rural market. One company which has reaped rich dividends by doing so is LG Electronics. In 1998, it developed a customized TV for the rural market and christened it Sampoorna. It was a runway hit selling 100,000 sets in the very first year. Because of the lack of electricity and refrigerators in the rural areas, Coca-Cola provides low-cost ice boxes — a tin box for new outlets and thermocol box for seasonal outlets. The insurance companies that have tailor-made products for the rural market have performed well. HDFC Standard LIFE topped private insurers by selling policies worth Rs 3.5 crores in total premium. The company tied up with non-governmental organizations and offered reasonably-priced policies in the nature of group insurance covers. With large parts of rural India inaccessible to conventional advertising media — only 41 per cent rural households have access to TV — building awareness is another challenge. Fortunately, however, the rural consumer has the same likes as the urban consumer — movies and music — and for both the 26

Consumption of branded products is treated as a special treat or indulgence. LG Electronics uses vans and road shows to reach rural customers. Philips India uses wall writing and radio advertising to drive its growth in rural areas. which alone reached 41 per cent of rural households. uses radio to reach the local people in their language. »Awareness Brand awareness is another challenge. It has also used banners. Coca-Cola advertising stressed its `magical' price point of Rs 5 per bottle in all media. Consumption of branded products is treated as a special treat or luxury. the rural consumer expressions differ from his urban counterpart. Fortunately. These are promotional events organized by stockiest. the family is the key unit of identity. the family is the key unit of identity. 27 . the rural consumer expressions differ from his urban counterpart. Godrej Consumer Products. the rural consumer has the same likes as the urban consumer — movies and music — and for both the urban and rural consumer. The key dilemma for MNC’s ready to tap the large and fast-growing rural market is whether they can do so without hurting the company's profit margins. However. Coca-Cola uses a combination of TV. posters and tapped all the local forms of entertainment. However. however. It doubled it’s spend on advertising on Doordarshan. Hindustan Lever relies heavily on its own company-organized media.6 per cent of rural households. Outing for the former is confined to local fairs and festivals and TV viewing is confined to the state-owned Doordarshan. cinema and radio to reach 53. The company uses local language advertising.urban and rural consumer. which is trying to push its soap brands into the interior areas. Outing for the former is confined to local fairs and festivals and TV viewing is confined to the state-owned Doordarshan. Since price is a key issue in the rural areas.

this works out to 1 in 8 people on Earth. due to the diversity of this market. The growing incomes have modified demand patterns and buyer behaviour. As a result. Such creation of demand needs efficient management of the supply chain. The aspirants are becoming climbers showing a sustained economic upturn as purchasing power is increasing in the rural markets. the need for a product or service is now adequately backed up with the capacity. India’s rural markets are often misunderstood. Farmers in states like Maharashtra and Andhra Pradesh have reaped the benefits of adopting new age farming practices. However. However. The rural market is not homogeneous. The proportion of very rich has increased five. including green house cultivation. logistical differences are very apparent. Though the aggregate size is very large.2% of the world lives in Rural India. ability and willingness to pay. we will be unable to distinguish between the serpent and the rope and the rope and the serpent.fold. Moreover. To increase market share. It is therefore essential to develop an accurate Marketing Mix for selling to rural Indians.Evolving a New Marketing Mix for Selling to Rural Indians 12. Positioning and realities regarding the potential of each of these market segments differ and lie at the very core of forming the strategy for the rural markets. Further. increasing yields due to integrated crop management practices and reducing the dependence on rainfall. the market still remains largely unexploited. plan and act locally. statistical. 28 . marketers need to think. potential markets need to be found and at times. myths abound. even created. Geographical. This has radically changed the economics of farming. behavioural change needs to be at the forefront of any strategy. Being able to successfully tap this growing market is every marketer’s dream. fert-irrigation and hydroponics. At most times. If such a distinction is not made. individual subsets of this market tend to be rather small and disparate. with the investment in these systems lowering the cost of cultivation. The face of Indian agriculture is changing from dry land and irrigated agriculture into high-tech and low-tech agriculture. Put in a different context. demographical. disposable income has grown sharply. A clear distinction needs to be made with regard to the reality versus the image of rural India.

Product developers should aim at eliminating all the cost-adding features. This is not what a rural consumer wants. When developing products in any category. features which a consumer is unwilling to pay for as he sees no obvious utility.Product The Rural market is not a homogenous set of customers with preferences frozen in time. In the case of fertilizers for instance. insecticides and pesticides. For instance. no significant changes in formulations notified under the Fertilizer Control Order have taken place. in-depth research that can help understand the depths of the mind of the villagers. As demand in several categories is being created. intensity of use is quite low. rural folk would use a shampoo only once a week. This has severely restricted the availability of cost effective specialty fertilizers of global standards to Indian farmers. On average. The urban women do not identify as strongly with these perfumes. purchase patterns and purchasing power are an essential input while developing rural specific products or services. Urban products cannot be dumped onto rural markets without modifications. though levels of deficiency of nutrients have increased significantly over the past decade. i. A move to liberalize the sector could perhaps consider the accepted worldwide norm of allowing manufacturers with a strong R&D base to decide their own formulations with the government machinery conducting checks on market samples of finished products to ensure that they live up to the labelled specifications. shampoos or soaps with distinctive. Tailor-made products are better received by the rural audience as the consumers feel empowered and tend to dentify with the offering. their buying criteria. marketers must identify the typical rural specific needs. farmers using modern farming practices are unable to get an assured supply of such farm inputs due to draconian legislation. However. with the objective of offering the lowest possible price.e. What is required is to introduce a product with ‘essential’ features. Systematic. Technological know-how for manufacture of such fertilizers exists within the country. strong rose or jasmine perfumes are very popular with the rural women in South India. Product development is severely constrained by legislation in the case of agricultural inputs like fertilizers. This would “redefine value” in the minds of the consumer and tremendously increase product acceptability. Sachetization is also a distinctly rural-driven phenomenon. A common error has been to launch a completely stripped down version of the urban product in the rural market. 29 . whose needs are recognized and for which the consumer is willing to pay (value-adding features). Habits take time to change and making unit sachet packs affordable is the key to inducing trial and purchase..

Pricing Every marketer must realize that the rural consumer is not a miser. Promotions & Advertising There are a lot of barriers that militate against homogenous media and message delivery. habits and preferences leading to different expectations of every segment of the population. he is capable of making high volume purchases. marketers need to provide financial products. it is “buying smart”.This would be a major policy initiative that would give a huge impetus to innovative product development in the farm sector.Alliances . Rather. Price sensitivity is extremely high and comparison with competitive prices is common. Product life cycles as are becoming shorter and these are having their impact on company life cycles. Pricing therefore is a direct function of factors including cost-benefit advantage and opportunity cost. Thus for any company wishing to develop its product portfolio. It is certain however. 30 . in the lean season when there is a cash flow crunch. schemes or solutions that suit the needs of the rural population. He has a cash flow problem. It must be remembered that the rural consumer does not have a budget problem. He understands and demands value for money in every purchase that he makes. A study revealed that the average rural consumer takes approximately 2 years to decide on buying a watch! He will not do so unless he is totally convinced that he is getting value for Money. Pricing offered to consumers should be for value offerings that are affordable. This is because the village folk receive funds only twice a year. allegiance to the classic American P-AL Principle of Partnership . At these times. The perceived utility or value of the product or service is the ultimate decision making factor. Because of this. He is not simply looking for the cheapest product in every category. Impulse buys and purchases for conspicuous consumption are also extremely few and far Between considering the “value for money” factor that reigns supreme in most rural purchase decisions. the unit price is critical and so is the pack size. Consumers seem to create narrow psychological price bands in their minds for product groups and price elasticity beyond the extreme price points is very high. At all times.Linkages is a basis for survival. These barriers stem from the fact that rural markets vary immensely in terms of tastes. however. that buying cheap is not the primary objective.

the overlap between the product categories sold in a single outlet in tremendous. In fact.However. The use of video using mobile vans and even large screen video walls at events should be arranged. Lucky draws and gift schemes are a major hit in most states. The re-use capacity and colour of the container in which the product is packed is also a crucial factor. 31 . a store may call itself as a grocery store but will stock everything from groceries to vegetables to fertilizers and may at times even stock medicines. reusable packaging is considered a major aid in promoting sales for products in the rural market. In today’s information era. experience has proved time and time again that word of mouth is the key influencer. Several creative communication media have been used by various companies to tackle the problem of having to use visual communication and non-verbal communication to reach the rural audience. Demonstrations establish the credentials of any new technology used in developing the product. Alliances with cottage industries. more often than not. free samples. Demonstrations are undoubtedly the most effective promotional tool that shapes purchase decisions of the rural population. off season discounts. It has in fact become a medium to attract larger audiences for a product demonstration. the point at which the customer actually comes in contact with a product may not be the point at which the sale is affected. it is very important for companies to wise-up on emerging technologies. dharmsalas. post offices and police stations for advertising have also helped immensely. Intermediaries are the foundation to rural distribution. For instance. Consumer and Trade schemes that Incentivise Spending using discount coupons. then the end user will not be allowed to forget. If the intermediary understands and is constantly reminded about your product. The classic conundrums of reach and coverage of the media are shattered. The rural consumer likes to touch and feel a product before making a choice. More importantly. etc. one fact is certain across all areas. The companies must reinforce this highly effective medium and use all their innovation and money tom develop more dramatic point of sale and point of contact material. in rural India. This is required because a large proportion of the rural population cannot read or write. encourage spending. Technology must be used to prepare a database of customers and their requirements. This becomes all the more important when in rural India. panchayats. In such cases.

decider. banners. The persons involved in the purchase process . So marketers must address brand messages in their campaigns at several levels. Youth power is becoming increasingly evident in villages. Rural youth bring brand knowledge to the households. Mass media: In the present world mass media is a powerful medium of communication. etc. This has forced several companies to change the focus and positioning of their products and services towards this segment that is growing in absolute number and relative influence. This can be achieved only by personal selling by highly motivated sales person. Another unique feature of rural markets is that the Decision making process is collective. In fact the word of mouth information holds lot validity in rural areas even today. Cinema Radio Print media: Handbills and Booklets. There are other attributes in the promotion strategy which are explained as under: 1. The following are the mass media generally used: Television. Personal selling and opinion leaders: In personal selling it is required that the potential users are identified and awareness is created among them about the product. This is the reason why opinion leaders and word of mouth are thriving among rural consumers. several agribusiness companies have also started providing gift schemes with offers for free jewellery that influences the ladies to pressure the farmers to purchase agricultural inputs from select companies. An opinion leader in rural areas can be defined as a person who is considered to be knowledgeable and is consulted by others and his advice is normally followed. one who pays can all be different. This promotion strategy thus makes women influence purchase decisions that they would ordinarily not be involved in.The use of local idioms and colloquial expressions are an excellent way to strike a rapport with the rural consumer and must be borne in mind when developing media plans and public relations programmes. Apart from regular household goods.influencer. 32 . uses and benefits. No high voltage publicity is required. 2. its features. The rural consumer is very down to earth but equally discerning and marketers need to step into the shoes of the rural folk while creating product promotion campaigns. posters. stickers. buyer. The opinion leaders may be big landlords or politicians or progressive farmers.

for products that need concept marketing and those that have high prices. it has been observed that melas are fit to generate product exposure. A village as a place for promotion. People come to melas to have a good time and are not reminded of such high technology or high priced products when they return home. In the words of Mr. these products fails to reach the village as the distribution channel fails to put in the required efforts. distribution & consumption is very different from a town or city. Reaching the right place is the toughest part in today’s rural marketing. promotion at melas is like a “one night stand”. Mandi and Mela magic At last count. such melas are not suitable promotion media. Special campaigns: During crop harvest and marketing seasons it is beneficial to take up special promotion campaigns in rural areas. cultural festivals as well as local fairs and events. Is the audience at this mela fit for promotion of the product at hand? What are the psychographics of this audience? What is the motivational and behavioural impetus that brings visitors to each of these melas. Brooks Bond carries out marches in rural areas with band. On an average. Thus. Tractor owners (tonee) conducted by MRF Limited is one such example. Most of the times. brand reminder and word of mouth. However.000 melas. 5. but due to higher distribution costs. There will be no reminder later. package familiarity. The largest such mela is the Maha Kumbh Mela which is visited by an average of 12 crore people. as most of the products reach up to the nearest townships of any village.000 to Rs. Of these 25. For example. the rural 33 .000 a day. There is however. India witnessed over 50. On considering these questions. This is because the time and the mood of the people that visit these melas are not right to digest technical information or for making large purchases. a large amount of qualitative judgment is indeed in planning promotions at melas by media planners.3.000 meals are held to signify religious. a caveat when an organization is considering using mela for marketing their products. 3 lakh people visited the annual mela at Navchadi which lasts for 7 days in Meerut. thus the general marketing theories can’t be applied directly in rural markets. visitors at these melas spend between Rs. Place place is the major reason behind the evolution of rural marketing as a distinct discipline. music and caparisoned elephants to promote their brand of tea. Managing Director of Multimedia Aquarius. Neville Gomes. 50.

5. the selection and use of distribution channels is a nightmare. The reason for this is very clear when we consider that on an average.000 towns where these outlets are located. pricing or promotion strategy.retailers themselves go to the urban areas to procure these goods. In Rural India. Further compounding this problem is the fact that even this meagre sale is mostly on credit. Distribution must be strengthened and this would raise investment cost barriers for new entrants. 34 . However. On the other hand.000 per outlet. The diversity in the distribution of shops is the self-limiting factor in terms of servicing the rural distribution network. Urban and Rural India both have approximately 3 million retail outlets. Rural markets imply complex logistical challenges that show up as high distribution costs. Thus. marketers are faced with the problem of feeding 3 million shops located in vastly diverse areas each of which records an average sale of only Rs. the most crucial link in ensuring the success of rural marketing efforts is distribution. Urban India has only 4.3 lakh villages. Rural India’s 3 million outlets are located in 6. Significance of Distribution No matter how well devised a company’s product.

35 . They do not expect such items to be present in every village. After such sale of produce. A TV will not be sold there as the cash flow does not exist at that point in the hierarchy of markets.The distribution of outlets however shows that a marketer need not be present in all markets at all times. the purchase would be made in an assembly market for reasons of choice and availability of adequate cash flow. easier to reach and service. They are a readymade distribution network embedded in the fabric of rural society for over 1000 years. district headquarters. It is essential for rural marketing companies to understand this hierarchy. Rural distribution has a rigid hierarchy of markets that make channel decisions relatively structured. Rural folk are habituated to travelling once a week for their weekly purchases to a satellite town. Right from the time of Chandragupta Maurya. Keeping the hierarchy in mind will help decide the optimum level of penetration required to reach a critical mass of rural consumers. assembly markets and such central locations. they are cash rich and can afford to make such purchases. A television distributor must be present at assembly markets which are much smaller in number. For durables where the outlay involved is typically large. Rural wealth and demand is concentrated typically at satellite towns. cultural and economic interchange. Haats Haats are the nerve centre of Rural India. Haats are seen as a place for social. This is due to the fact that it is at assembly markets that auction yards are present where the farmers congregate to sell their output. They have been held on a regular basis across the length and breadth of the country for over 1000 years. more controllable. Being present in 6 lakh villages is virtually impossible for an organization of any size. It is therefore not necessary for a marketer of TV sets to take their distribution channel all the way down to the village shop.

A study estimates that 47.1 to Rs. Traditionally. There is also a need to realise that the dealer is the company's "unpaid" sales force. Only those with a strong mind. an average haat will have close to 300 stalls. A lot of re-distribution also occurs through haats. It is essential to educate and involve him as he is the local company representative and is the only member in the channel of distribution that is in direct contact with the final consumer. the system gets derelationalised. 5 to 7% is conducted on barter system and the rest 3 to 5% is on credit. everybody knows everybody. A strong bond needs to be created with every consumer even in the remotest village and the smallest town. Considering that the average population of an Indian village is approximately 1000. A haat usually serves around 5000 visitors. in village shops a lot of credit sales occur due to the fact that in a small geographic area of a village. Also attractive to companies wishing to use the system is the low selling overheads. Perhaps the other most important factor to consider while developing rural distribution strategy is that the move from transactional marketing to relationship marketing is most evident in the village market. MARKRTING STRATEGIES TO CAPTURE RURAL INDIA 36 . a large number of retailers and subwholesalers buy from haats for their village stores. What is most attractive to marketers is that 90% + of sales in haats are on cash basis. Apart from the 90% cash sale. In villages with less than 2000 people this figure reduces to 1 in 20 villages. Typically.000 haats are conducted in rural India. These rural super markets are much larger than all the world's K-marts and Wal-marts put together.5 per stall and this rate is common to a giant like Hindustan Lever and the smallest local seller. The dealers' feedback needs to be obtained as the direction for future strategy emanates here. a tough heart and stiff hands survive. incorporating haats in the distribution strategy of a rural marketing organization selling consumer goods and FMCG products (typically once a week purchase items) is a tremendous opportunity.One in every five villages with a population of over 2000 has a haat. Thus. Marketing in Rural India is undoubtedly a long-haul exercise and one that involves great expense. Participation fees at haats are a flat Re. Considering that over 5000 visit a haat from 5 villages. Distribution costs must be reduced through optimum utilization of the network. each haat serves 5 villages. This is because.

Thus. one can notice difference in current market scenario. this positioning of technology is very crucial.  Focus on select villages. BY COMMUNICATING AND CHANGING QUALITY PERCEPTION Companies are coming up with new technology and they are properly communicating it to the customer. There is a trade of between Quality a customer perceives and a company wants to communicate. rural customer started asking for value for money. The perception of the Indian about the desired product is changing. The organization can do the following thing to start with:  Focus on select markets. With their promotion. Now they know the difference between the products and the utilities derived out of it. As a rural Indian customer always wanted value for money with the changed perception. SEGMENTATION OF RURAL MARKET The first step is to develop & implement any strategy for the rural market should include the appropriate segmentation of the rural market. Different product categories have different rural markets to cater to & these can be selected by applying different criteria of segmentation. BY TARGET CHANGING PERCEPTION 37 . The important thing is that appropriate segmentation basis need to be applied. Their main focus is to change the Indian customer outlook about quality. They have started selling the concept of quality with proper communication. BY PROPER COMMUNICATION IN INDIAN LANGUAGE The companies have realized the importance of proper communication in local language for promoting their products.

seven models of Cellular Phones of high technology but none took off. Breeze. BY PROVIDING WHAT CUSTOMER WANT The customers want value for money. they are exploiting social and cultural values. BY UNDERSTANDING CULTURAL AND SOCIAL VALUES Companies have recognized that social and cultural values have a very strong hold on the people.If one go to villages they will see that villagers using Toothpaste. They aim for the basic functionality. to promote their brands. even when they can use Neem or Babool sticks or Gudakhu. Cultural values play major role in deciding what to buy. "Nokia" has launched a simple product. As "Motorola" has launched. Cinthol etc. Moreover. They do not see any value in frills associated with the products. However. if the seller provides frills free of cost they are happy with that. On the other hand. even when they can use locally manufactured very low priced soaps. which has captured the market. actors for advertisements as this helps them to show themselves as an Indian company. Thus. They are ready to pay premium for the product if the product is offering some extra utility for the premium. is the paradigm changing and customer no longer price sensitive? Indian customer was never price sensitive. rural people are emotional and sensitive. BY PROMOTING PRODUCTS WITH INDIAN MODELS AND ACTORS Companies are picking up Indian models. villagers are using soaps like Nima rose. They are happy with such a high technology that can fulfil their need. BY ASSOCIATING THEMSELVES WITH INDIA 38 . Villagers are constantly looking forward for new branded products. What can one infer from these incidents. Diana Hyden and Shahrukh Khan are chosen as a brand ambassador for MNC quartz clock maker "OMEGA" even though when they have models like Cindy Crawford. but they want value for money.

M-TV during Independence Day and Republic daytime make their logo with Indian tri-colour. by explicitly saying that they are Indian. It is a normal tendency of an Indian to try to associate him/her with the product. That is why companies like Daewoo based their advertisements on a normal Indian family. If he/she can visualize himself/herself with the product. Whirlpool has also launched a campaign during world cup. ITC is promoting Indian cricket team for years. Nokia has designed a new cellular phone 5110. they influence Indian mindset. LG has launched a campaign "LG ki Dua.MNCs are associating themselves with India by talking about India. Electrolux is working on a made-for India fridge designed to serve basic purposes: chill drinking water. BY PROMOTING INDIAN SPORTS TEAM Companies are promoting Indian sports teams so that they can associate themselves with India. BY DEVELOPING RURAL-SPECIFIC PRODUCTS Many companies are developing rural-specific products. with the India tri-colour and a ringing tone of "Sare Jahan se achcha". keep cooked food fresh. BY GIVING INDIAN WORDS FOR BRANDS 39 . Similarly. and to withstand long power cuts. during world cup they have launched a campaign "Jeeta hai jitega apna Hindustan India India India". Keeping into consideration the requirements. a firm develops these products. With this. he /she become loyal to it. BY TALKING ABOUT A NORMAL INDIAN Companies are now talking about normal India. all the best".

Local Baniya" only they can succeed. BY EFFECTIVE MEDIA COMMUNICATION Media Rural marketing is being used by companies. LG has sold one lakh 20-inch Sampoorna TVs. they were wrong. Adidas.000. Electrolux has acquired two Indian brands Kelvinator and Allwyn this has gave them the well-established distribution channel. MNCs have found that it is much easier for them to operate in India if they acquire an Established Indian Brand. Like LG has used India brand name "Sampoorna" for its newly launched TV. BY ADOPTING LOCALISED WAY OF DISTRIBUTING Proper distribution channels are recognized by companies. while the modern media includes TV. radio. BY ACQUIRING INDIAN BRANDS As Indian brands are operating in India for a long time and they enjoy a good reputation in India. As well as trust of people. In between such a show. In the past one year. They have to reach the "local Paan wala. Citra and Limca so that they can kill these brands. soon they realized that to succeed in India they have to reach the nook and the corner of the country. puppetry. all in towns with a population of around 10. they thought that a similar system can be grown in India. Hindi. Brook Bond Lipton India ltd used magicians electively for launch of Kadak Chap Tea in Etawah district. However. and e-chaupal. Marathi and Tamil tongue. folk theatre etc.Companies use Indian words for brands. They can either go for the traditional media or the modern media. as people believe these brands. but later on they realized that to survive in the market and to compete with their competitor they have to rejuvenate these brands. LIC uses puppets to educate rural masses about its insurance policies. Reebok. and Nike started with exclusive stores but soon 40 . Govt of India uses puppetry in its campaigns to press ahead social issues. The word is a part of the Bengali. The traditional media include melas. MNC shoe giants. Gold Spot. Similarly Coke has acquired Thumps up. the lights are switched of and a torch is flashed in the dark (EVEREADYs tact). The distribution channel could be big scale Super markets.

Recently Luxor Writing Instruments Ltd. COKE. who is promoted by Reebok. and to capture the market share in India they have to go the local market shoe sellers. 5000. The message is simple and clean. Product Strategies 41 . Makbul Fida Hussain a renowned painter who has created "Gajgamini" range of paintings.they realized that they do not enjoy much Brand Equity in India. BY ASSOCIATING THEMSELVES WITH INDIAN CELEBRITIES MNCs have realized that in India celebrities enjoyed a great popularity so they now associate themselves with Indian celebrities. PEPSI and TATA traders advertise their products through paintings. priced at Rs. Companies are promoting players like Bhaichung Bhutia. Rural people like the sight of bright colors. MELAS Melas are places where villagers gather once in a while for shopping. Escorts also display its products like tractors and motorcycles in such melas. Dabur uses these events to sell products like JANAM GHUTI (Gripe water). This pen is signed by Mr. They have to reach to local cities with low priced products. a JV of Gillette and Luxor has launched 500 "Gajgamini" ranges of Parker Sonnet Hussain special edition fountain pens. PAINTINGS A picture is worth thousand words. Companies take advantage of such events to market their products. so that they can associate their name with players like him and get popularity. NCAER estimates that around half of items sold in these melas are FMCG products and consumer durables.

& conserve cash at the same time. The product should be sturdy enough to stand rough handling.The specific strategies. For them. thinking global & acting local. tooth paste. can be classified as follows: . The advantage is that the price is low and the rural consumer can easily afford it. This is because it is very affordable for the lower income group with the deepest market reach making easy access to the end user satisfying him. 42 . pickles. Its design has been modified to protect it against rough usage in rural environment. Sturdy products: Sturdiness of a product is an important factor for rural consumers. 3. heavier weight meant that it has more over and durability. etc. The small unit packing’s will definitely attract a large number of rural consumers. Sturdiness of a product either or appearance is an important for the rural consumers. Nokia’s 1100 model is a very good example of a customized model for rural markets. It is also introduces messaging in Hindi language now. which can be employed to develop or modify the products to targets the rural market.1. The rural product usage environment is tough because of rough handling. small unit packages stand a good chance of acceptance in rural market. experiment with new products. Vicks cough drops in single tablets. This is in real terms. Single serve packets or sachets are enormously popular in India. Also the Red Label Rs. The experience of torch light dry battery cell manufacturers supports this because the rural consumers preferred dry battery cells which are heavier than the lighter ones. 3. They allow consumers to buy only what they need. This method has been tested by products life shampoos. in some of the economically priced models in order to cater to the semi-urban or rural consumers. Thus. Small unit packing: Given the low per capita income & purchasing habits of the rural consumers. biscuits.00 pack has more sales as compared to the large pack. transportation & storage. 2. rough roads & frequent power fluctuations. all these environmental factors must be considered while developing the products meant for rural audience. New product designs: Keeping in view the rural life style the manufacturer and the marketing men can think in terms of new product designs. it is dust resistant & has a small torch light in view of the frequent power cuts in rural India. Small packing’s stand a good chance of acceptance in rural markets.

Utility oriented products: The rural consumers are more concerned with utility of the product and its appearance Philips India Ltd. A brand name or a logo is very important for a rural consumer for it can be easily remembered. e. the rural consumers do give their own brand name on the name of an item. Nirma made a peeli tikki especially for those peeli tikki users who might have experienced better cleanliness with the yellow colored bar as compared to the blue one although the actual difference is only of the color.g. Many a time’s rural consumers ask for peeli tikki in case of conventional and detergent washing soap. 5. Developed and introduced a low cost medium wave receiver named BAHADUR during the early seventies. Initially the sales were good but declined subsequently. On investigation it was found that the rural consumer bought radios not only for information and news but also for entertainment. Pricing strategies 43 . The fertilizers companies normally use a logo on the fertilizer bags though fertilizers have to be sold only on generic names. Brand name: For identification.4.: Coca-Cola targeted the whole Indian rural market with the positioning of “Thanda Matlab Coca-Cola” advertisements because most of the villagers say when wanting a drink refer to it as Thanda…… so Coca-cola used that word.

this strategy is delivering very good results. coffee. 44 . Low volume-low price strategy: This strategy of reducing prices by reducing the package size in order to make it appear more affordable. as was done by Coca Cola. so that a larger segment can afford it. it has been observed that advertising has less to do with product sales in the rural areas. 7. then they can still generate good returns on the capital employed. If they price their product at a level which can lead to good volumes. For example. 3. this is a common strategy widely adopted by many manufacturing and marketing concerns. Low cost/ cheap products: This follows from the product strategy. 6. the strategy should be to cut down the production.1. Overall efficiency & passing on benefits to consumers: For rural products. etc. If an organization gets the price point right. Most often. charges more than the MRP. expanding the market. Pet jars free with the Hasmukhrai and Co Tea. Such measures can a significant impact in the rural market. Similarly the packages of edible oil. The price can be kept low by low unit packaging’s like paisa pack of tea. 4. Milk protein is expensive while Soya protein is cheaper. most of the times. in the rural markets of India. ghee etc can be reused. the rural people can efficiently reuse the plastic bottle of hair oil. The containers can be put to multipurpose uses. Soya protein is being used instead of milk protein. vicks 5 grams tin. The basic aim is to reduce the value of the product. distribution & advertising costs & passing on these benefits to the customers to further increase the turnover. In categories where maintaining the price point is extremely critical. Application of value engineering: in food industry. tea. Large volume-low margins (Rapid or slow penetration strategy) : Marketers have to focus on generating large volumes & not big profit margins on individual products. Ariel Super Compact. 2. shampoo sachets. then it can work in rural market. Ensuring price compliance: Rural retailers. but the nutrition content of both is the same. The manufacture has to ensure price compliance either through promotional campaigns. Refill packs / Reusable packaging: In urban areas most of the health drinks are available. is delivering very good results for a large number of FMCG product categories. 5. thus. or by ensuring the availability of products at the retail outlets directly.

The only we can have insights like ‘Thanda matlab Coca Cola’. For that. which can be easily understood. language & idioms should be such that the rural audience of different rural market segments can relate to. But the context. 5. Bombarding rural consumers with too much. Promotional message should highlight only the functional values of the product & explains how those values can make the consumer’s life even better & solve any of his problems. in less time can easily confuse them & leave them bewildered. the theme of the advertisement needs to revolve among universal themes. Choice of Brand Ambassador 45 . It is preferable that it has only a few propositions at a time. storyline. but the commonalities of their ethos & simple living habits need to be understood for advertising to succeed. There should be the use of language writers who understands the rural & regional pulse better. 4. Think Global Act Local Rural population is diverse. such as family-love. The following strategies can be considered while developing promotional campaigns for the rural markets: 1. Narrative Story Style The promotional message can be delivered in the form of an entertaining story with a message depicting how the brand delivers “larger good” to the family & society.Promotion strategies Customized promotional media & messages need to be developed by the organizations to effectively target the rural market. 3. Simplicity & Clarity All promotional messages targeted at rural audience need to be simple & clear. The theme of the story line can be about how the product can solve the problems of the rural consumers. 2. Think in Local Idiom This is the need of the advertising professionals who can think like the rural people. & they should not include any confusing elements.

it is almost impossible to transplant strategies which work successfully in urban markets onto rural markets. The marketers were of the opinion that the villagers would come to nearby towns and buy the products that they want. Lack of proper retail outlets Lack of mass media infrastructure. DISTRIBUTION STRATEGY Many companies view the rural markets as great opportunity for expanding their sales but find distribution as a major problem. Large distances between villages. The road blocks to reach the rural customers are: • • • • • Lack of adequate transport facilities. What has been found is that if we have to serve the rural consumer we will have to take our products to him through the channels that he is using and some innovative ways of getting to him.Brand Ambassador for the rural markets need to be picked carefully as urban successes might not get replicated in the rural markets. Unfortunately. The following distribution strategies formulated for the rural category. That is why Govinda in the Mirinda as boosted the sales of the drink in the rural markets. namely. An organization might spend a lot of money in hiring a brand ambassador only to find out later that it had little impact on the rural consumer. extensive retailing and sustained pull generation through mass media advertising. Lack of pucca roads connecting villages to nearest townships. 46 .

to the extent of about 40 to 45 percent. sugar. Utilization of multipurpose distribution centers by petroleum/oil companies: In order to cater to the rural areas the petroleum/oil companies have evolved a concept of multipurpose distribution centers in rural areas. This strategy is good to begin with & then subsequently. but the rural population covered will be substantial. The revamped PDS places more emphasis on reaching remote rural areas like the hills and tribal’s. 5. Here again there is an arrangement for centralized procurement and distribution. The purpose of PDS is to make available essential commodities like food grains. These shops are run by the state civil Supplies Corporation. These cooperatives have an arrangement for centralized procurement and distribution through their respective state level federation. In addition to petrol/diesel. co-operatives as well as private entrepreneurs. lubricants. which have a population of 2000 persons & above each. 4. The manufacturing and marketing men should explore effective utilization of PDS. kerosene. Such state level federation can be motivated to procure and distribute consumables items and low value durable items to the members to the society for serving to the rural consumers. Coverage of villages with 2000 and above population: Ideally.000 villages. farmer’s service cooperatives and other multipurpose cooperatives. 3.1. Utilization of public distributory system: The PDS in the country is fairly well organized. one can cover about 25 crores rural consumers. edible oils and others to the consumers at a reasonable price. Therefore. oil47 . Many of the societies extend credit to the members for purchases. The rural consumer who has tractors. It is estimated that there are about 450 such outlets in operation in the country. Use of co-operative societies: There are over 3 lacks co-operative societies operating in rural areas for different purposes like marketing cooperatives. By doing so the percentage of villages covered comes to only 10% of all the villages. Segmentation: the number of villages in India is huge & it is not viable to contact & serve all villages directly. pesticides and seeds. The shops that distribute these commodities are called fair price shops. these outlets also stock consumables agricultural inputs like fertilizers. companies or distributors can carefully examine the market potential of different villages & target the villages that can be served in a financially viable manner through an organized distribution effort. 2. coverage of villages with up to 2000 and above population could be the break-even point for a distribution setup. villages with lesser populations can be added. With a distribution network in about 55.

There are 50 such big rural fairs held in various parts of country. as there will be ready captive audience. This distribution can be done by mopeds. 7. The rural customers visit these towns at regular intervals not only for selling the agricultural produce but also for purchasing cloth. Kumbh Mela at Hardwar in U. It can be beneficial for companies to organize sales of their product at such places.P. Afterwards. bullock-carts. 6. These outlets crop up every week. the feeder markets and mandi towns offer excellent scope for distribution. which attract urbanite also like ‘Mankanavillaku’ in Malappara in Kerela. They are normally timed with religious festivals. Only temporary shops come up selling goods of all kinds. radios. For convincing the manufacturing and marketing man with regard to the importance of these places from rural marketing point of view a visit to such places is necessary. providing consumers immense choice and prices. Promotion can be taken. cycles. Such places attract large number of itinerant merchants. • Attractive: The weekend shopping is not only convenient but also entertaining. The markets start early and will be over by lunch. Biggest fair ‘Pushkar Mela’ is estimated to attract over 10 million people. there will be entertainment. Distribution up to feeder markets/mandi towns: Keeping in view the hierarchy of markets for the rural consumers. torch cells and other durables and consumer products. While shandies/heaths are held a particular day every week. camelbacks etc. It is estimated that over 5. These outlets can be profitably utilized for selling consumables and durable items also. Jathras and melas are held once or twice a year for longer durations. Shandies/Haaths/Jathras/Melas: These are places where the rural consumers congregate as a rule. jewelry. depending upon the township.engine pump sets and mopeds frequent these outlets for their requirement. Merits: • Convenience: The entire market can be related to large departmental stores in cities. where the advantage is a one-stop shopping exercise. From the feeder markets and mandi towns the stockiest or wholesaler can arrange for distribution to the village shops in the interior places. In 48 . ‘Periya Kirthigai’ at Tiruparunkunaram in Tamil Nadu.000 fairs are held in the country and the estimated attendance is about 100 million rural consumers. hardware.

both in cooperative & private sector.N) arranges free transit of rural consumers to the supermarket of their purchases. making it easier to sell the product & maximise sales for the company. farming equipment. a week and the bargaining advantage attract the frugal and weeklong hard working rural folk. Example of Varana Nagar in Maharashtra proved an eye opener in this regard where the sugar and milk cooperatives have totally changed the life style of people. The supermarket in Varana Nagar caters exclusively to rural consumers. • Availability: It is a market for everyone and for everything. 10. 8. Household goods. Agricultural Input Dealers: Fertilizers should be made available to the farmers within the range of 4-5 km from their residence. Personal Selling Network: It is very successful distribution channel being developed by companies like HUL. different non-competing companies can come together to jointly operate distribution vans for the rural market. It adds a personal touch to the marketing. it is an attractive place to those who want to buy second hand durables and to those who prefer barter transactions. cattle. clothes. Further the freshness of the produce. Similarly a co-operative supermarket called ‘Chintamani’ in Coimbatore (T. jewellery. raw materials and a host of products are available. 9. as per the essential commodities act. This will enable them to share the cost of operating the van & on account of the sharing of the cost by four or five companies. durables. THE OLD SETUP 49 . Joint distribution by Non-competing Companies: As the cost of distributing the products in the rural market through distribution vans can be unviable for a single company. buying in bulk for. machinery. the entire operation can become financially viable for all the players. This is why there are about 2 lakh fertilizer dealers in the country. as the salesmen are the resident of the village or community itself.respect of transactions.

Village retailers have traditionally been among the most mobile of rural residents. • Rural markets were neglected by many. and Bazaars & Shadies. Therefore many companies were dependent on whole salers. 2. Their multi – person interaction in the closed village society.Whole seller. Wholesalers The Indian wholesaler is principally a Galla – Kirana (food-grain) merchant who sustains the belief that business is speculative rather than distributive in character. Vans. Weekly Haats. The occurrence of retail outlets was low. 50 . Often doubling up as money lenders. who are very large in number. • Shops within the village • Shops located on the main road and not exactly within the village • Kasba market or the tahsil market. The reason for this speculative character and dormant role of wholesalers are: • • Indian market was largely sellers market. Retailer. Companies laid more emphasis or retailers in urban areas. He is a trader / commodity merchant rather than a distributor and therefore tends to support a brand during boom and withdraw support during slump. 1. There was no need for active sales growth.The historically available people & places for distribution include: . As a result of retail based distribution was weakened. The current need is to activate and develop wholesaler of the adjoining market as a distributor of products to rural retail outlets and build his loyalties to the company. Retailers There are different kinds of retailers.

 The urban consumers have numerous sources of information.  Presence of spurious brands is an ample testimony to this view. BRAND PROMOTER:  In rural market retailers remains the deciding factor to sell particular brand. CREDIBILITY:  He enjoys the confidence of the villagers.  Although retailer’s opinion is sought it may not be 100% believed and followed. He is to intelligently drive home his recommendations. I.) II. there is less influence of shelf displays and point of purchase promotion. (. INFLUENCE LEADER:  His role as influence leader is indisputable. III. as urban consumers do not trust him completely.  His views are accepted and followed by the rural people whose awareness and media exposure levels are low.  The role of urban retailer is weak.The urban retailer has a limited role as a brand promoter.As a result retailers play a significant role. It is through shelf displays and incentive offers that he has to push the 51 .  Retailers helps in identification and selection of brands. His view points are evaluated with other sources of information. From tender twig of neem to washing powder retailer testimony has been vital part of the product adoption process. He is seen as a businessman with profit motto. recommend the brands. (The urban retailer is not trusted. He cannot directly.

His customers base comprises largely the mobile service class prone to shift residence at least once. (As against this. have an important place in distribution and promotion of the products in villages.50.brands. he has been harbinger of change.) IV. the urban retailers have to make an effort to adopt relationship marketing. if not more. 52 . in less than a decade. wielding limited influence in changing the product choices and quality of life of consumers. It hired vans to penetrate the rural interior. RELATIONSHIP MARKETER  Village retailer practices relationship marketing.  He caters to a set of buyers who have income from immovable land resources and would be static over a much longer time span. HARBINGER OF CHANGE  In an environment relatively isolated from external developments. JK Dairy launched whitener ‘Dairy Top’ in small 50 gm sachets priced at Rs.) V. This limits the time span and perspective of the retailer – customer relationship. (on the contrary.  He is one of the main sources of information and opinion as well as supplier of product and services. Vans Mobile vans long since. It decided to make a concerted foray into rural India in 1996. we find urban retailer. each van traveling around 125 km a day. 6. 25 days a month.) 3.  The relationship could extend beyond three generations. backed by historical credibility of the retailer as a product referral.

Shandies The haats are the oldest outlets to purchase household goods and for trade. Fairs Wall Paintings Hoardings Leaflets Video Vans Folk Media Animal Parade Transit Media Personalized Media Direct Communication Dealers Sales Persons Researchers  Formal media 53 . A typical market is in an open field with ample space for displaying all sorts of goods. in all. Bazaars. These markets have different names in different regions. It is reported that there are. Weekly Haats. one of the most important questions frequently asked is “How do we reach the large rural population through different media and methods? Mass Media Radio Cinema Press TV Local Media Haats.000 haats held throughout the country.4. Melas. But they are strikingly similar in what they sell. These markets are very well organized with shopkeepers having pre-assigned spaces for them to sell their wares. Its location changes every week. Media Vehicles Through the rural markets offer big attractions to the marketers. about 47.

HLL has been using TV to communicate with the rural masses. Many consumer goods companies and fertilizer companies are using these TV channels to reach the rural customer.P. TV. Dina Thanthi in Tamil Nadu. Lux. Punjab Kesari in the North. Lifebuoy. Examples: SUN TV is very popular even in rural areas in Tamil Nadu and Asianet is a preferred regional channel in Kerala. Cinema: 30%. Radio. Cinema. Examples: Newspapers: Eenadu in A.  Radio: 54 . TV: 27%. However local language newspapers and magazines are becoming popular among educated facilities in rural areas. Regional TV channels have become very popular especially in Southern states.  Television: It has made a great impact and large audience has been exposed to this medium. Reach of formal media is low in rural households (Print: 18%. Nihar oil etc are some of the products advertised via television. Loksatta in Maharashtra and Tamil magazine Kumudam are very popular in rural areas.It includes Press and print. and Point of purchase and Outdoor advertisement.. and Radio: 37%) and therefore the marketer has to consider the following points:  Newspapers and magazines: English newspapers and magazines have negligible circulation in rural areas.

Generally rural people prefer bright colours and the marketer should Utilize such cues. The farmers have a habit of listening to regional news/agricultural news in the morning and the late evening. Zandu Balm. Ad slides can also be screened in village theatres. Examples: Films on products like Vicks. Zuari industries are some of the companies using radio communication programme. bus boards. Lifebuoy and SPIC fertilizers are shown in rural cinema halls. wall painting. The advertisement has to be released during this time to get maximum coverage in rural areas. 55 . dealer boards. Example: Release of a pesticide ad at the time of outbreak of a pest or disease in crops. product display boards etc. Karnataka and Andhra Pradesh. Jyoti Labs. Symbols.  Outdoor advertisements: This form of media.Radio reaches large population in rural areas at a relatively low cost. Local distributor or dealer who has good contacts with cinema houses in villages can easily monitor this activity. hoarding. which includes signboards. Another advantage is that the radio commercial can be prepared at short notice to meet the changing needs of the rural folk.500.  Cinema: About 65% of the earnings from cinema are from rural markets. tree boards. Example: Colgate. Village theatres do roaring business during festivals by having four shows per day. The monthly charge for showing an ad film is within Rs. Film viewing habits is high in certain states like Tamil Nadu. There are specific programmes for farmers like Farm and Home/Krishi Darshan in regional languages. pictures and colours should be used in POPs meant for rural markets so that they can easily identify the products. is cost effective in rural areas. Apart from films.

Retailers welcome painting of their shops so that the shop will look better. fertilizers etc. However a clutter of such POP materials of competing companies will not have the desired effect and is to be avoided. Companies marketing TV. pesticides. shops and schools are ideal places for painting and the company need not have to pay any rent for the same.10. 56 .  Wall paintings: It is an effective and economical medium for communication in rural areas. Painting to be avoided during election time and rainy season. The walls have to be painted at least one or two feet from ground level. slogans for catching the attention of people. The matter should be in the form of pictures. It is better to take permission of the owner. festoons and product packs in the shops will catch the attention of prospective buyers. It is a medium employed by the advertiser to bring in a personal touch. Walls of farm houses. since it stays there for a long time depending upon the weather conditions. In cities lot of junk mail is received by all of us and very often such mails are thrown into the dustbin whereas a villager get very few letters and he is receptive to such mailers.  Direct mail advertising: It is a way of passing on information relating to goods or services for sale. Very often the owner takes responsibility for taking care of the wall painting. fans. branded coffee/tea. toothpaste. directly to potential customers through the medium of post. use wall painting as promotion medium in rural areas. Point of purchase: Display of hangings. The cost of painting one square foot area is just Rs.

These are low priced promotion items and can be used by consumer goods companies too. These boards attract the attention of slow moving vehicles like cycles.  Farm-to-Farm/House-to-House visit: Rural people prefer face-to-face communication and farm visits facilitate two-way communication. even the buses move at slow speed through village road. Fertilizer and pesticide companies in rural areas extensively use tree boards. bullock carts and tractors and people walking on the road. The cost of such a painted board is about Rs. These boards are fixed to the trees on both sides of the village road at a height of about 10 feet from ground level. Considering the poor condition of roads. Companies to suit the specific requirements of rural communication are using a variety of such media effectively and some of the more important media and methods are given below. Informal/Rural specific media These media with effective reach and personalized communication will help in realizing the promotional objectives. Tree boards: These are painted boards of about two square feet in dimension having the picture or name or slogan of the product painted on it. The advantage is that the sales person can understand the needs and wants 57 .80.

The bankers visit an identified village. Example: This approach has been found to be very effective for agricultural machinery. agricultural inputs and machinery companies in rural areas. Group meeting of key customers are conducted by banks. The person does not sell the product but only promotes the use of the product. Such meetings could be organized in prosperous villages for promoting consumer durables and two wheelers also. The person carries with him literature in local language and also samples of products.  Opinion leaders: Villagers place more emphasis on the experience of others who have used a product/brand to make purchase decision. The dealer clarifies the terms and conditions of sale and also makes independent follow up visits for securing orders.of the rural customer by directly discussing with him and answer his queries on products and services. Such opinion 58 . animal health products and agricultural inputs. Potential customers in the village are identified and the company’s/distributor’s representative makes farm-to-farm visits and highlight the benefits of the products. get the village people in a common place and explain the various schemes to the villagers. Very often the local dealer also joins the representative in making farm-to-farm visits. Opinion leader is a person who is considered to be knowledgeable and is consulted by others and his advice is normally followed. The company is able to pass on the message regarding benefits of the products to a large number of customers through such meetings.  Group meeting: Group meetings of rural customers as well as prospects are an important part of interpersonal media. Many LIC agents and companies dealing with high value consumer durables have tried this method with success in rich rural areas. Example: MRF Tyres conduct tractor owners meet in villages to discuss repairs and maintenance of tractors.

Examples: a) Mahindra Tractors use bankers as opinion leaders for their product. The troupe consists of dancers. extension workers etc. teachers.e. Next day they move to another haat. The reason being that in villages the wages are paid on weekly basis and haat is conducted on the day when the villages get their wages. b) The mahakumbh at Allahabad is the biggest mela in India.  The Melas: Melas are of different types i. For the marketer. drummers and musicians and they move in a well-decorated van from one village to another village singing and dancing. Handcarts have been deployed for increasing access. Many companies have come out with creative ideas for participating in such melas. beliefs and perceptions of rural customers that influence his buying behaviour. bank official. The sellers arrive in the morning in the haat and remain till late in the evening. b) Asian Paints promoted its Utsav brand of paint by painting the village Sarpanch’s house a few months prior to the launch if the branch to demonstrate that the paint does not peel off. The folk dance “Kuravan Kurathi” is popular in Tamil Nadu. These are the haats that are being held regularly in all rural areas. commodity fairs. HLL has put up 14 stalls in the mela grounds for promoting Lifebuoy. In a day the troupe covers about 8-10 villages. the company can not only promote and sell the products but also understand the shared values. cattle fairs and religious fairs and may be held only for a day or may extend over a week. both the sellers and buyers meet in the village to buy and sell goods and services. the haat can be an ideal platform for advertising and selling of goods. Examples: a) Britannia promotes Tiger Brand Biscuits through melas.  Folk dances: These are well-appreciated form of entertainment available to the village people.leaders could be big landlords.  The Haats: Traditionally on certain days of week. panchayath-president. By participating in haats and melas. As soon as the 59 .

At the end of the film show. he distributes handbills and answers queries of the customers. The van is a mobile promotion station having facilities for screening films slides and mike publicity. Examples: Fertilizer and pesticide companies organize folk dance programmes during peak season in selected markets. number of participants in the meeting and time taken for question and answers. The cost of running a fully equipped AVP unit is about Rs. if any. The vans move to the next village for the second show. the products and the benefits. The sales person makes a brief talk about situation in the village.van reaches a village. Colgate.5000 per day and therefore these programmes are conducted during the peak season in selected villages. Mike announcement is made about the company’s products and leaflets are distributed. Folk dance programme costs about Rs.  Audio Visual Publicity Vans (AVP Vans): AV unit is one of the effective tools for rural communication. Example: Companies such as HLL. 60 . and Phillips have made effective use of AVP vans for popularizing their products in rural areas. The ad film is screened along with some popular film shots and this continues for about 30 minutes. The whole operation takes about 1-2 hours depending upon the products under promotion. After the dance programme.4000 per day and AVP van operation has to be considered as an investment for business development in rural areas. the folk dance programme of Maharashtra and over 30 programmes have been arranged in selected rural markets. Thumps Up has sponsored Lavnis. queries. This is followed by folk dances. film songs are played to attract the attention of the villages. about the products are answered by the sales person.

Prizes for best displays are announced to motivate the dealers. Its main purpose is to protect the product during transit. A wellplanned product display contest not only increases the involvement of dealers in the company’s products but also increases the sales during the contest period. A progressive farmer who is an opinion leader is selected and the demonstration is conducted in his field in the presence of a group of farmers in the village.  Field demonstration: This is based on the extension principle “seeing is believing” and is one of the most effective methods to show the superiority of the company’s products to the customers. Examples: a) Spraying a particular brand of an insecticide against insect pests and showing the farmer how effectively the insects are controlled. Product display contests: Package is an integral part of the product.  Field days: 61 . The representative receives 1% commission for every customer who approaches the dealer via demonstrations. The display contest has to be announced well in advance and promotional materials to be distributed to all the selected dealers in a geographical area. c) Hawkins pressure cooker has demonstration representatives who carry out demos in rural households. to preserve the quality and to avoid any loss in quality and quantity. The main purpose of this contest is to remind the customer to buy the product as soon as he enters the shop. pressure cookers. Another objective is to influence the dealer to stock the product and support the company in increasing the sales. soaps and toothpaste. vaccum cleaners and mosquito coils could be promoted by demonstrations in selected markets. e) Similarly effectiveness of detergents. The farmers observe the results in the field and the local dealer calls on them in their farms and persuades them to buy the particular brand of pesticide or fertilizer. This is used for promoting consumer goods such as shampoos. b) Demonstrating the use of tractor/implements for different agricultural operations. the contest lasts for about a month.

Field demonstrations/field days consume lot of time and efforts and therefore have to be planned well. The company organizes demonstrations in a piece of land belonging to progressive farmers. are applied after making field observations. seeds.  Information centers: They provide latest information on cultivation of crops.  Life-style marketing: Each rural market segment has certain special features i. Many consumer goods companies have opened show rooms in prosperous rural areas.e. Just before harvest. They also provide information on farm implements. pesticides. Examples: Textile mills maintaining community gardens. all the important farmers are invited to see demonstration plot and see for themselves how the yields are better in the plot compared to other fields. One of the main objectives of following modern agricultural practices is to increase the yield. prominent personalities and role models. weed.These are extension of field demonstrations. fertilizers. they share common life-style traits. religious events. Mineral water companies supplying clean drinking water during summer festivals in villages and Consumer goods companies sponsoring Kabaddi. All the fertilizers. diesel engines. They include village sports. nutrients etc. management and control of pests and diseases. fertilizer application. Choosing media vehicles 62 . Experienced agricultural graduates who make frequent visits to the field and advice farmers on modern agricultural practices manage the centers. sprayers and tractors etc. pesticides. Example: Hero Honda has opened extension counters with show room facilities in major rural markets.

Depending on the factor of reach & frequency. frequency.The choice of different media vehicles for any market is based on an analysis of the standard features like: reach. (a) High reach High frequency • • • • • • • • • • • • • • • • • • • • • Jeep based advertising Wall painting Bus stand & bus panels Haats Hoardings Postal branding (b) Low reach High frequency Co-operative notice board Shop front painting Tin plating – house Dealer boards Village boards Well tiles Calendars/labels (c) High reach Low frequency Van based advertising Melas Direct to home Folklore group Exhibitions/created events (d) Low reach Low frequency Tin painting – tree/shops Leaflets Posters & banners 63 . cost & availability. This categorization can help the marketer to make a decision about which type of media would be more suitable to the product & the organization. the different media can be classified into the following categories.

• • Streamers Danglers Conclusion 64 .

good.coolavenues. A radical change in attitudes of marketers towards the vibrant and burgeoning rural markets is called for. It is necessary for all the major companies to provide those products which are easy to available and affordable to the consumers. The rural market is very large in compare to the urban market as well as it is more challenging market.thehindubusinessline. www. The companies can reduce their prices by cutting the costs on the packaging because the rural consumers don’t need attractive packaging.com/nic/073/index. Application of 4A* is also a major task for the major companies in this area. easy to use and cheaper. The income level of rural consumers is not as high as the income level of urban consumers that’s why they want low price goods. so they can successfully impress on the 230 million rural consumers spread over approximately six hundred thousand villages in rural India. The consumer wants those products which are long lasting. Rural market has an untapped potential like rain but it is different from the urban market so it requires the different marketing strategies and marketer has to meet the challenges to be successful in rural market. but at the same time the market size is much large in the rural area. www.com/know/mktg/ 65 . It is right that the profit margin is very low in the FMCG products. It is one of the reasons that the sell of sachet is much larger in the rural area in all segments.Thus looking at the challenges and the opportunities which rural markets offer to the marketers it can be said that the future is very promising for those who can understand the dynamics of rural markets and exploit them to their best advantage. References 1.htm 2.

com/Faculty_Column/FC658/fc658. www.3.mapsofindia.htm 66 .icmrindia. business. www.html 5.html 4.org/casestudies/catalogue/Marketing/MKTG081.indianmba.com/rural-economy/state-development/marketing.

Sign up to vote on this title
UsefulNot useful

Master Your Semester with Scribd & The New York Times

Special offer: Get 4 months of Scribd and The New York Times for just $1.87 per week!

Master Your Semester with a Special Offer from Scribd & The New York Times