RURAL INDIA…a new dawn

India needs creative solutions to start a revolution which can take its villages fast forward in time – converting them into economically viable units and growth engines, harnessing the power of the villagers, and opening up new horizons with the promise of a better tomorrow.

SR.NO. 1. 2. 3 4. 5. 6. 7. 8. 9.


Selection of the product:We have chosen this product, because India is a developing country and it can become fully developed when the literacy level in our country will increase from current position and this will increase when the people will be more educated as compared to current education level and for this they need many things and one amongst them is “PENCILS”.

As today’s students are tomorrow’s future so if they are guided in a proper manner and given sufficient pencils and notebooks as per their requirement, then their willingness to improve the future will increase. Apart from this, pencils are also treated as the friends of students, and in rural market there is a big need of pencils because their literacy level is very low due to many reasons and one amongst them is that they are not provided with sufficient number of pencils and notebooks. Hence being an Indian, I would also like to contribute in making THE FUTURE OF INDIA by helping or providing or fulfilling the needs and wants of rural market with this product called PENCILS.


India is always said a country of villages and it is fact as India’s 72% of population lives in villages. Size of rural market is estimated to be 42 million house holds and rural market has been growing at five times the pace of the urban market more government rural development initiatives have been seen to increase rural markets Increasing agricultural productivity leading to growth of rural disposable income. The number of middle income and high income households in rural India is expected to grow from 80 million to 111 million by 2007 while urban India is expected to grow from 46 million to 59 million. There is a lot of scope for companies in rural markets due to its big size.

Some impressive facts about the rural markets.

 In 2001-02, LIC sold 55 % of its policies in rural India.  Of two million BSNL mobile connections, 50% in small towns/villages.  Of the six lakh villages, 5.22 lakh have a Village Public Telephone (VPT)  41
million Kisan Credit Cards issued (against 22 million credit-plus-debit cards in urban) with cumulative credit of Rs. 977 billion resulting in tremendous liquidity.

 Of 20 million Rediffmail signups, 60 % are from small towns. 50% transactions from
these towns on Rediff online shopping site

 42 million rural HHs availing banking services in comparison to 27 million urban HHs.  Investment in formal savings instruments: 6.6 million HHs in rural and 6.7 million in
urban Many companies like Colgate-Palmolive, HLL, Godrej etc have already made forays into rural households but still capturing the markets is a distant dream. Most Marketers still lack in depth knowledge to analyze the complex rural market. It is also said that “The future lies with those companies who see the poor as their customers”

Purpose of the project: 1. To know the rural market. 2. To know the strategy of marketing in rural areas. 3. To see the demand of the rural consumers. 4. To see the different markets available for the product 5. To get experience by marketing our own product in rural market. 6. To see the competition in the rural market.

A pencil is a handheld instrument containing an interior strip of solid material that produces marks used to write and draw, usually on paper. The marking material is most commonly graphite, typically contained inside a wooden sheath. However, other marking materials are used, such as charcoal or cosmetics (as in an eyebrow pencil). Coloured pencils employ pigments, including those used in oil and water colour paints. Pencils may also have an eraser or "rubber" attached to one end, typically by means of a metal ferrule. Pencils were first manufactured in 1564 but documented use of the pencil did not appear until Conrad Gesner used one before he died in 1565. Modern pencils are the descendants of ancient writing instruments. The first mass-produced pencils were unpainted, to show off their high-quality wood casings. However, by the 1890s, many manufacturers were painting their pencils and giving them brand names. Early American pencils were made from Eastern Red Cedar, a strong, splinter-resistant wood that grew in Tennessee and other parts of the southeastern United States. By the 1900s, pencil manufacturers needed additional sources of wood, and turned to California's Sierra Nevada mountains. There they found Incense-cedar, a species that grew in abundance and made superior pencils. California Incense-cedar soon became the wood of choice for domestic and international pencil makers. Then the same procedure was followed by Indians. To ensure the continued availability of Incense-cedar, forest workers have carefully managed the stands of trees in which Incense-cedar grows, and timber companies have been careful to harvest the trees on a sustained-yield basis. "Sustained-yield" means that the annual growth of the forest is greater than the amount harvested from the forest. Forests managed on a sustained-yield basis are abundant and healthy, and will continue to provide wood for people and habitat for animals for generations to come. Therefore by using that cedar the writing is smooth.


1. Incense-cedar logs are cut into "Pencil Blocks." 2. Pencil Blocks are cut into "Pencil Slats." 3. Pencil Slats are treated with wax and stain. 4. A machine cuts grooves into the slats to accept the writing core (or "lead"). 5. Writing cores -- made from a mixture of graphite and clay -- are placed into the grooves. 6. A second grooved slat is glued onto the first -- making a "sandwich." 7. The sandwich is machined into pencil shapes. 8. Individual pencils are cut from the sandwich, and are sanded smooth. 9. Each pencil is painted. A recess is cut to accept the ferrule (the metal ring that holds the eraser to the pencil). 10. A ferrule and eraser are crimped into place on each pencil.


Lekhai itni sunder ke--khush hote padho

Pencils may look alike, but they can be very different! Here's how you can tell them apart:

Pencils made from Incense-cedar (a renewable resource) are a reddish brown inside with a smooth, fine grain and a visible seam. They also have that familiar cedar scent when sharpened!

Pencils made from plastic have a pinkish color with no grain or seam, because plastic composite pencils are extruded by machine. They bend easily, and snap cleanly when broken. They do not have a scent.

To be sure you're buying pencils made from genuine Incense-cedar; look for the Cedar Mark on the package.

Some impressive facts about the rural sector :

MARKET STORES: - The number of rural supermarkets in India – 42,000 – exceeds the total number of retail chain stores in the US (35,000).

INSURANCE: - In 2001 – 02, LIC sold 55 per cent of its policies in rural India. TELECOM SECTOR: -Of the two million BSNL mobile phone connections, 50 percent are in rural. INTERNET SERVICES: -Of the 20 million who have signed up for Rediffmail, 60 percent are from small towns. Of the one lakh who have transacted on Rediff online shopping site, 50 percent are from small towns. BANKING SERVICES: 1) 24 million Kisan Credit Cards (KCC) issued in rural areas exceeds the 17.7 million credit plus debit cards issued in urban India. 2) A whopping Rs. 52,000 core has been sanctioned under the KCC scheme.

OTHER DEVELOPMENTS: 1) The number of middle and higher income families (Having Rs. 70,000 plus annual income) in rural (21.7 Million) and urban (24.2 million) is nearly the same. 2) Electricity consumption by the agriculture sector has shown a sharp increase from 17.6 per cent of total.

Related to Ownership 1) 95.9 per cent of rural households (HHS) are self-owned. 2) 31 per cent of rural HHs own a radio and an almost equivalent number own a TV. 3) 27 per cent own watches. 4) 8.5 per cent HHs own a two – wheeler. Related to Consumption 1) 95 per cent of rural India uses toilet soaps. 2) 76 per cent uses detergent (powder/liquid). 3) 48 per cent uses dental products (toothpowder/toothpaste).

Related with Standard of Living 1) 45 per cent of rural India has pucca houses. 2) 3.6 crore HHs have a telephone connection. 3) 6.5 crore individuals in rural India are covered by life insurance policies. So, indeed, Rural market is a big mass, all right 13.5 crore households as per the latest Census figures and with 48 crore adult individuals. A segment – of 92 lakh HHs – that is prosperous and has urban – like consumption. So, undoubtedly, here is a tremendous opportunity to grow by tapping the rural consumer but first we need to understand them.


The name and tag line of the product plays an important role in the promotion of the product. The people remember the product by its name and Tag Line. The product gets famous by its Tag Line. The name of our pencil is “FUN WARD” as the name goes the pencil is taking the people to the funny world of writing and reading and studying. It seems to be funny for the children to write with these pencils which are specially made for children with cartoon characters on it. The Tag Line of the FUNWARD pencils is “Lekhai Itni Sunder ki---- Khush Hote Padho”. This depicts that children would feel to study happilt by using Fun Ward pencil. These pencils are filled with perfumed fragrance which is an added advantage of the product and hence children would like to purchase the Fun Ward pencil and the same at cheap rates.

Profile of rural market in general: Large & scattered market:
The rural market of India is large and scattered, in the sense that it consist of over 63 crore consumers from 6, 38,365 villages spread throughout the country.

 Major income from agriculture:
Nearly 60% of the rural income is from agriculture. Hence rural prosperity is tied with agricultural prosperity. During the harvest season, the demand for consume goods in village goes up. The population securing income from non-agricultural sector is now increasing due to rural development programs.

 Low standard of living:
The consumers in the village areas do have a low standard of living because of low literacy, low per capita income, social backwardness, low savings, etc.

 Traditional outlook:
The rural consumer values old customs and traditions. A change is beginning to take place in their outlook because of growth in literacy rate and mass media in the rural areas.

 Diverse socio-economic background:
Rural consumers have diverse socio-economic background. This is different in different parts of the country. This brings diversity among rural customers and market.

 Changing demand pattern:
The demand pattern of the rural consumers is fast changing. The re is new and growing demand for toiletries, ready-made garments, cosmetics, packaged foodstuffs, etc. this change is due to increase in rural income.

 Infrastructure facilities:
The infrastructural facilities like roads, warehouses, communication system, and financial facilities are inadequate in rural areas. Hence physical distribution becomes costly due to inadequate infrastructural facilities.

 Saving habits:
The saving habit of the rural community is increasing in the recent years as a result of the efforts put by co-operative and commercial banks

Profile of rural consumer in general  Size of the rural consumer:
The size of rural consumer group can be understood from the following details provided in the table:


Population 1971

% to Total

Population 1981

% to Total

Population 1991

% to Total

Population 2001

% to Total

Rural population Urban population Total population 54.81cr 100 65.82cr 100 84.4cr 100 102.7cr 100 43.90cr 10.91cr 80 20 50.20cr 15.62cr 76.3 23.7 64.1cr 20.3cr 76 24 74.2cr 28.5cr 72.25 27.75

Rural population forms a major portion of the Indian population as seen in the table. If we consider the state level picture, in several states like Uttar Pradesh, Rajasthan, Madhya Pradesh and Kerala, the rural population constitutes more than 80% of the total population. In states like Bihar and Orissa 90% of the population is in rural areas.

Significant aspects: It can be seen in general sense low purchasing power, low standard of living, low per capita income, low literacy level and over all low social and economic positions are the traits of the rural consumers. By and large, the rural consumers of India are a tradition

bound community; religion, culture and even superstition strongly influence their consumption habits

Location pattern of rural consumer: The urban population of India is concentrated in 3,200 cities and towns and rural population is scattered over 6,38,365 villages. Statistics shows that out of the 6,38,365 villages have population of more than 5,000 persons each. About 55% of the villages have population in the range of 500 people or less The influence is clear; rural demand is scattered over a large area, unlike the urban demand which is highly concentrated.

Literacy level: It estimated that there are 23% literate in rural India as compared with 36% for the whole country. The rural literacy in the rural area is on an increase. Among the rural population kerala tops with 77%. The literacy rate has its implication in communication with rural population; it appears that communication should not prove a hurdle, provided appropriate means are chosen.

Rural income: An analysis of the rural income pattern reveals that nearly 60% of the rural income is from agriculture. Rural prosperity and the discretionary income with the rural consumer are directly tied up with agricultural prosperity. The pre-dominance of agriculture in the income pattern has one more significance – rural demand is more seasonal.

Rural savings: The rural consumers have been drawn into the saving habit in a big way. The commercial banks and the co-operatives have marketing the saving habit in the rural areas for quite some years. Today nearly 70% of the rural household are saving a part of their income. The habit is particularly widespread among salary earners and self-employed non-farmers.

Profile of rural market for pencils  Large and scattered market:
As the rural market of Raigad District is large and scattered and it is been located on the eastern side of the Maharashtra so there is a lot of scope expansion as the other villages are been attached to it’s near by area.

 Low standard of living:
In Raigad district, the peoples are having low standard of living due to low per capita income and social backwardness that’s why I kept very low price for my product so that even low income group person can purchase the product

 Traditional outlook:
Nowadays also the people of titwala area follow the traditional prospects of living and traditional customs, approaches of living. Even today they do not know much about the invertors so they use candles when power goes off which shows good sign of expansion for my product.

Profile of rural consumer for pencils  Low literacy level:
Around 5000 people live in Raigad District out of which only 25 to 30 % are literate, hence it shows that thee is low literacy level in Raigad District. Even today people didn’t know much about the innovations they do not know about the invertors so they still use candles when power goes off

 Size of rural consumer:
Around 5000 people are living in the Raigad District area, hence the size of rural consumer is said to be large enough hence the demand for Roshini candles would be enough viewing to size of population.

 Significant aspects:
The various significant aspects of Raigad District area would also encourage me to move to this such as low per capita income, low standard of living, low level group, and low purchasing power. Due to these reasons my products demand can be high as my product t is low cost product and very cheaply available in the market.

 Low rural income:
Mostly, peoples of Raigad District are dependent on agriculture around 65% on agriculture and rests are dependent on other services/work. Hence most peoples in Raigad District has low rural income which has made to make my product sale specially of small pack to achieve good demand as my product is cheaply available even at a price of RS.1

The unique selling propositions of my product are as follows:-

It increases the literacy rate in rural areas due to which the Indian economy will also increases. It lasts for longer time as compared to other brands available in the market. Available in different sizes. Available I different colors. It is available cheaply in the market It is filled with fragrance.

A business needs to consider the products that it produces and the stage of the product life cycle that a product is at. Marketing strategies will vary according to the type of product and its stage in the life cycle.
1.Pencils are very convenient to use and will be easy for rural customers also to use this product. 2.By providing good quality of Pencils, students will be attracted towards writing and will also be encouraged. 3.Pencils are available in different colours, so a person has choices to select various types in one particular product. 4. Pencils are available in different prices, so people can buy it as per their affordability.

This generally refers to the physical locations of product sales as well as the methods of distribution. However, it is also considered to be the "place" or "position" in the market of the product; refer to information below. Businesses need to make many decisions related to "place": access, parking, competition, physical location etc. It’s the most important P in the pencil wars — Place. And nothing evokes more passion in distribution. Major innovation is underway on the distribution front at co. name, pre-selling being the biggest of all.. We have chosen the different zones especially south schools and colleges and west zones as keen interest is shown by nearby villages of it. We had chosen these places due to following reasons:

LITERACY RATE: In these areas literacy rate is better than other areas. “So WHERE THERE IS WILL, THERE IS A WAY”.

PRODUCT DEMAND: As people living in this area have mostly standard income so they can purchase our product “pencils” as they are cheaply and in a better way available.

CHANCE FOR EXPANSION: There is a lot of scope of expansion as these areas are surrounded by various other villages so great scope of expansion is there.

Most businesses use a "cost plus" method for setting the prices of their products. This involves determining unit production costs and then adding in a profit margin. However, many other factors are involved. Consider "perceived price" (what you think consumers will be prepared to pay), demand elasticity (is it elastic or inelastic?), competitors' pricing (can you afford to undercut their prices?), pricing objectives (what do you want to achieve Ð increased market share? increased profits? market leadership? etc.) Example 2 Perfume

  

How much does it cost to make? Can businesses afford a "price war"? Why is apsara so successful?

Price is the only factor which decides the presence of the product in the rural market. As people are having standard purchasing power, low income or high group of income persons etc can afford my pencils as they are available cheaply and in a better way. Hence keeping all the dynamic factors we have decided to go for penetration pricing for our product.

Penetration pricing: We have decided to go with the application of penetration pricing as the people
in the rural area are having low income, low purchasing power and we are newly entering the market. The pricing will be in way: Small pencils: 1 pencil = RS.1./10 pencils of pencils box = RS.8/Large pencils: 1 pencils = RS.1.5/10 pencils of pencils box= RS.12/-

Promotion is said to be the vital for all companies until now the promotional tools have been acted as the targeting tool used to attract huge demand for rural people and also huge demand for company’s product. The promotional strategies are as follows:-

Tree borders:
A new innovative broad aspect followed by me to attract huge attraction towards my product will be the use of tree borders. we will make use of tree borders as in rural areas mostly there are villages surrounded by huge and number of trees, so the hoardings at tree border will definitely attract huge demand.

Hoardings on retail shops:
We will be putting hoardings on retail shops so that whenever the customer comes over the shop they should easily come to know about the arrival of new Pencils i.e. “name of the pencils” in the market.

Wall paintings:
We will also promote my product through wall paintings. As wall paintings lasts for longer time and through this maximum customer can be attracted.

There are some other strategies also like,

 Influencer strategy:
The role of the influencer or influencing communication cannot be ignored as far as rural India is concerned. The advertisements that revolve around this very strategy actually depend on the influence of different influential people and/or events in the villages to put across the message powerfully with more effect and purchase intention. An example of this kind of advertisement may be brand endorsement by any influential person in the village like the ‘Mukhiya’ or the ‘school master’.

 Participatory strategy:
Events like different festivals and different games and sports competitions actually have a high participation level in the rural India, as other sources of entertainment are very less in those areas. So, these events and shows offer great opportunity to reach rural India cost effectively. Different brands sponsor different events and shows in rural villages, which is actually a cost-effective way to advertise with the participatory strategy.

 Show-n-tell strategy:
Many brands are venturing into different ways to educate their rural consumers about their brands and their usage through different shows and events. This kind of initiatives actually creates huge awareness about the brand among the interested people in the rural India. Different health related advertisements like Polio awareness and AIDS awareness programmes involve a ‘show-n-tell’ strategy of advertising.

Formal media

It includes Press and print, TV, Cinema, Radio, and Point of purchase and Outdoor advertisement. Reach of formal media is low in rural households (Print:18%, TV:27%, Cinema:30%, 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. However local language newspapers and magazines are becoming popular among educated facilities in rural areas. Examples: Newspapers: Eenadu in A.P., Dina Thanthi in Tamil Nadu, Punjab Kesari in the North, Loksatta in Maharashtra and Tamil magazine Kumudam are very popular in rural areas.


It has made a great impact and large audience has been exposed to this medium. HLL has been using TV to communicate with the rural masses. Lifebuoy, Lux, Nihar oil etc are some of the products advertised via television. Regional TV channels have become very popular especially in Southern states. Examples: SUN TV is very popular even in rural areas in Tamil Nadu and Asianet is a preferred regional channel in Kerala. Many consumer goods companies and fertilizer companies are using these TV channels to reach the rural customer.


Radio reaches large population in rural areas at a relatively low cost. Example: Colgate, Jyoti Labs, Zandu Balm, Zuari industries are some of the companies using radio communication programme. There are specific programmes for farmers like Farm and Home/Krishi Darshan in regional languages. The farmers have a habit of listening to regional news/agricultural news in the morning and the late evening. The advertisement has to be released during this time to get maximum coverage in rural areas. Another advantage is that the radio commercial can be prepared at short notice to meet the changing needs of the rural folk. Example: Release of a pesticide ad at the time of outbreak of a pest or disease in crops.


About 65% of the earnings from cinema are from rural markets. Film viewing habits is high in certain states like Tamil Nadu, Karnataka and Andhra Pradesh. Village theatres do roaring business during festivals by having four shows per day. The monthly charge for showing an ad film is within Rs.500. Local distributor or dealer who has good contacts with cinema houses in villages can easily monitor this activity. Examples: Films on products like Vicks, Lifebuoy and SPIC fertilizers are shown in rural cinema halls. Apart from films, Ad slides can also be screened in village theatres.

Outdoor advertisements:

This form of media, which includes signboards, wall painting, hoarding, tree boards, bus boards, dealer boards, product display boards etc, is cost effective in rural areas. Symbols, pictures and colours should be used in POPs meant for rural markets so that they can easily identify the products. Generally rural people prefer bright colours and the marketer should utilize such cues

Point of purchase:

Display of hangings, festoons and product packs in the shops will catch the attention of prospective buyers. However a clutter of such POP materials of competing companies will not have the desired effect and is to be avoided.

Direct mail advertising:

It is a way of passing on information relating to goods or services for sale, directly to potential customers through the medium of post. It is a medium employed by the advertiser to bring in a personal touch. 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.

Wall paintings:

It is an effective and economical medium for communication in rural areas, since it stays there for a long time depending upon the weather conditions. The cost of painting one square foot area is just Rs.10. Retailers welcome painting of their shops so that the shop will look better. Walls of farm houses, shops and schools are ideal places for painting and the company need not have to pay any rent for the same. The walls have to be painted at least one or two feet from ground level. It is better to take permission of the owner. Very often the owner takes responsibility for taking care of the wall painting. Painting to be avoided during election time and rainy season. The matter should be in the form of pictures, slogans for catching the attention of people. Companies marketing TV, fans, branded coffee/tea, toothpaste, pesticides, fertilizers etc. use wall painting as promotion medium in rural areas.

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 cost of such a painted board is about Rs.80. These boards are fixed to the trees on both sides of the village road at a height of about 10 feet from ground level. These boards attract the attention of slow moving vehicles like cycles, bullock carts and tractors and people walking on the road. Considering the poor condition of roads, even the buses move at slow speed through village road. Fertilizer and pesticide companies in rural areas extensively use tree boards. These are low priced promotion items and can be used by consumer goods companies too.

Informal/Rural specific media

These media with effective reach and personalized communication will help in realizing the promotional objectives. 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.

Farm-to-Farm/House-to-House visit:

Rural people prefer face-to-face communication and farm visits facilitate two-way communication. The advantage is that the sales person can understand the needs and wants of the rural customer by directly discussing with him and answer his queries on products and services. 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. The person carries with him literature in local language and also samples of products. The person does not sell the product but only promotes the use of the product. Very often the local dealer also joins the representative in making farm-to-farm visits. The dealer clarifies the terms and conditions of sale and also makes independent follow up visits for securing orders. Example: This approach has been found to be very effective for agricultural machinery, animal health products and agricultural inputs. Many LIC agents and companies dealing with high value consumer durables have tried this method with success in rich rural areas.

Group meeting:

Group meetings of rural customers as well as prospects are an important part of interpersonal media. 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 of key customers are conducted by banks, agricultural inputs and machinery companies in rural areas. The bankers visit an identified village, get the village people in a common place and explain the various schemes to the villagers. Such meetings could be organized in prosperous villages for promoting consumer durables and two wheelers also. Example: MRF Tyres conduct tractor owners meet in villages to discuss repairs and maintenance of tractors.

Opinion leaders:

Villagers place more emphasis on the experience of others who have used a product/brand to make purchase decision. Opinion leader is a person who is considered to be knowledgeable and is consulted by others and his advice is normally followed. Such opinion leaders could be big landlords, bank official, panchayath-president, teachers, extension workers etc. Examples: a) Mahindra Tractors use bankers as opinion leaders for their product. 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 Melas:

Melas are of different types i.e. commodity fairs, cattle fairs and religious fairs and may be held only for a day or may extend over a week. Many companies have come out with creative ideas for participating in such melas. Examples: a) Britannia promotes Tiger Brand Biscuits through melas. b) The mahakumbh at Allahabad is the biggest mela in India. HLL has put up 14 stalls in the mela grounds for promoting Lifebuoy. Handcarts have been deployed for increasing access.

The Haats:

Traditionally on certain days of week, both the sellers and buyers meet in the village to buy and sell goods and services. These are the haats that are being held regularly in all rural areas. The sellers arrive in the morning in the haat and remain till late in the evening. 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. For the marketer, the haat can be an ideal platform for advertising and selling of goods. By participating in haats and melas, the company can not only promote and sell the products but also understand the shared values, beliefs and perceptions of rural customers that influence his buying behaviour.

Folk dances:

These are well-appreciated form of entertainment available to the village people. The folk dance “Kuravan Kurathi” is popular in Tamil Nadu. The troupe consists of dancers, drummers and musicians and they move in a well-decorated van from one village to another village singing and dancing. In a day the troupe covers about 8-10 villages. As soon as the van reaches a village, film songs are played to attract the attention of the villages. This is followed by folk dances. Mike announcement is made about the company’s products and leaflets are distributed. After the dance programme, queries, if any, about the products are answered by the sales person. Folk dance programme costs about Rs.5000 per day and therefore these programmes are conducted during the peak season in selected villages. Examples: Fertilizer and pesticide companies organize folk dance programmes during peak season in selected markets. Thumps Up has sponsored Lavnis, the folk dance programme of Maharashtra and over 30 programmes have been arranged in selected rural markets.

Audio Visual Publicity Vans (AVP Vans):

AV unit is one of the effective tools for rural communication. The van is a mobile promotion station having facilities for screening films slides and mike publicity. The sales person makes a brief talk about situation in the village, the products and the benefits. The ad film is screened along with some popular film shots and this continues for about 30 minutes. At the end of the film show, he distributes handbills and answers queries of the customers. The whole operation takes about 1-2 hours depending upon the products under promotion, number of participants in the meeting and time taken for question and answers. The vans move to the next village for the second show. The cost of running a fully equipped AVP unit is about Rs.4000 per day and AVP van operation has to be considered as an investment for business development in rural areas. Example: Companies such as HLL, Colgate, and Phillips have made effective use of AVP vans for popularizing their products in rural areas.

Product display contests:

Package is an integral part of the product. Its main purpose is to protect the product during transit, 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. Another objective is to influence the dealer to stock the product and support the company in increasing the sales. 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. Prizes for best displays are announced to motivate the dealers; the contest lasts for about a month. A well-planned product display contest not only increases the involvement of dealers in the company’s products but also increases the sales during the contest period. This is used for promoting consumer goods such as shampoos, soaps and toothpaste

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. 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. 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. Examples: a) Spraying a particular brand of an insecticide against insect pests and showing the farmer how effectively the insects are controlled. b) Demonstrating the use of tractor/implements for different agricultural operations. c) Hawkins pressure cooker has demonstration representatives who carry out demos in rural households. The representative receives 1% commission for every customer who approaches the dealer via demonstrations. e) Similarly effectiveness of detergents, pressure cookers, vaccum cleaners and mosquito coils could be promoted by demonstrations in selected markets.

Field days:

These are extension of field demonstrations. One of the main objectives of following modern agricultural practices is to increase the yield. The company organizes demonstrations in a piece of land belonging to progressive farmers. All the fertilizers, pesticides, nutrients etc. are applied after making field observations. Just before harvest, 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. Field demonstrations/field days consume lot of time and efforts and therefore have to be planned well.

Information centers:

They provide latest information on cultivation of crops, fertilizer application, weed, management and control of pests and diseases. Experienced agricultural graduates who make frequent visits to the field and advice farmers on modern agricultural practices manage the centers. They also provide information on farm implements, seeds, fertilizers, pesticides, diesel engines, sprayers and tractors etc. Many consumer goods companies have opened show rooms in prosperous rural areas. Example: Hero Honda has opened extension counters with show room facilities in major rural markets.

Life-style marketing:

Each rural market segment has certain special features i.e. they share common life-style traits. They include village sports, religious events, prominent personalities and role models. Examples: Textile mills maintaining community gardens, Mineral water companies supplying clean drinking water during summer festivals in villages and Consumer goods companies sponsoring Kabaddi.

Distribution Channel Strategies

The channel members consist of wholesalers and retailers who are middlemen in distribution and they perform all marketing functions. These middlemen facilitate the process of exchange of goods; create time, place and possession utilities. Therefore channels are useful to producers as well as consumers. Even if a company has a product that meets the requirements of rural consumers, it will succeed only if it is made available at the right place as and when required by the consumer.

 Direct sales to consumers:
Examples: In many states, the government has encouraged farmers to sell vegetables directly to urban consumers by setting up “Framers market”. Farmers, in this case, put up stalls in the market place and directly sell fresh vegetables to the consumers, eliminating middlemen in the market.

 Manufacturer-wholesaler-retailer-consumer:
The manufacturer appoints wholesalers in key rural markets and these wholesalers cater to the needs of retailers in villages. Example: Sale of pesticides used in agriculture.

 Manufacturer-retailer-ultimate consumer:
Examples: 1) Companies like Hero Honda have direct retailers in semi-urban markets. 2) Mahindra Tractors have appointed distributors in all prosperous rural areas and these distributors deal directly with farmers for sales and services of tractors. 3) Philips has direct distributors in areas with low demand and poor accessibilities. The distributors extend credit facilities; they follow a journey cycle and have delivery vans to service remote markets.

 Manufacturer-C





Fast moving consumer goods such as biscuits, soaps, and tooth paste are distributed through two/three intermediaries. Example: HLL, Nestle, Marico have appointed stockiest to service the village merchants and the merchants are met at fortnightly/monthly intervals through van operations.

 Development of retailers in rural markets: One of the important
challenges faced by the marketer is the development of a chain of retailers in rural markets. The problems are non-availability of retailers and poor viability of retail outlets due to low business volumes. The marketer could consider some of the existing retail outlets in rural areas.

Co-operative societies: There are about 3 lakh cooperative

societies operating in rural areas. Many of these societies distribute consumer goods and low value consumer durables.

Public distribution system: Essential commodities such as sugar,

kerosene, edible oils are made available to the consumers at reasonable prices through fair price shops. Such shops are run by state civil supplies department, co-operatives or by private parties. Marketers could explore the possibility of selling goods through PDS.

Agricultural input dealers: There are about two lakh dealers

selling fertilizers. Many of these dealers deal in consumer goods also. The marketers could approach these dealers and find out the possibility of selling consumer products in rural areas.

Feeder markets or mandis: The rural consumer visit nearby

towns for selling agricultural produce and buying consumer durables. Stockiest could be appointed in such feeder towns to service the village shops in interior places

Physical Distribution Strategies:Considering the constraints in

physical distribution of stocks in rural areas, many companies have come out with innovative solutions.

 Satellite distribution:
In this system, the company appoints stockiest in important towns. These stockiest are responsible for placing orders with the company, receiving the stocks, sorting of stocks and supply the goods in small lots to the retailers and merchants situated is rural areas and in and around the towns. The stockiest is given 15-20 days credit by the company. Over a period of time along with increase in business, some of the good retailers will be elevated as stockiest. Therefore, many retailers hover around a particular stockiest. The advantage of this system is it enables the organization to penetrate interior markets. Example: Companies like HLL, Nestle, and Marico have appointed stockiest to service he village merchants and the merchants are met at fortnightly/monthly intervals through van operations.

 Syndicate distribution:
There are cases wherein companies do not have resources for running exclusive vans for delivery of goods to the rural market. In this case, the firms selling non-competitive consumer goods come together and operate delivery van to service the rural retailers

 Haats:
Traditionally on certain days of week, both the sellers and buyers meet in the village to buy and sell goods and services. These are the haats that are being held regularly in all rural areas. By participating in haats and melas, the company can not only promote and sell the products but also understand the shared values, beliefs and perceptions of rural customers that influence his buying behaviour.

 The Melas:
Melas are of different types i.e. commodity fairs, cattle fairs and religious fairs and may be held only for a day or may extend over a week. Many companies have come out with creative ideas for participating in such melas. Example: Kisan Mela in Ludhiana is an annual feature and companies like Maruti have been able to book orders for cars by participating in this Mela.

 Physical distribution of stocks:

Through delivery vans:

The van may be owned by the company or by wholesalers. The delivery van takes the product to the retail shops in villages. The distributor’s salesperson travels in the van and he delivers the stocks to the retailer and collects the money too. Example: Bharat Petroleum has introduced Rural Marketing Vehicle (RMV) way back in 1999 in Punjab. The vehicle moves from village to village and fills LPG cylinders on the spot to rural customers.

Through Hired vans:

In this case, the wholesaler uses a hired vehicle to cover the retailers in villages. Normally, the cost of operation of the hired vehicle is shared between the wholesaler and the company. Example: Balsara distributors use hired vehicles to reach the rural retailers.

Through Bullock cart or camels:

It is used for covering remote villages with no motorable road.


The Silent sales man:
What does a sales man do when you go to a shop or he comes to your house, he first s how’s you the product then starts to tell you the features of the product like its brand name, method of production, ingredients (if it is eatable), price etc. In short he tries to persuade you to buy his product, this same activity is performed by packets of any product but without any use of language this is called silent salesman ship

Thus we say that “packaging – A silent salesman”

Packaging is done for the three reasons: 1) To protect the product 2) To make the product easy to carry 3) To make the product attractive.

Pencils do not require heavy packaging but still we have come up with the two packaging strategies for our pencils: 1) To have a packet of 3 pencils sets 2) To have a packet of 10 pencils sets. The rural India is not much developed, hence their purchasing power is also not high. Hence, for their convenience we have come up with these packaging strategies. This was also done to reduce the cost of the product so as to supply the product at cheap rates and also for a profitable deal for our company.

Why Company go to rural market?
The cost of going global is very high, and it is difficult to gauge markets in other countries. It is better to target the rural market as it is growing by the day. Today rural markets are as critical as urban markets.

 Urban markets are getting saturated:
The rural markets provide better opportunities. In village vast competition exists. Different companies come with different flavors. So people have ample choice.

 A huge untapped market:
With only around 100000 of the 638667 villages tapped so far there is huge potential and market areas. So we get high percentage of total market though profit margin is less.

 Rising disposable incomes:
Now a days villagers also spend on luxuarary & comfort products. Afterall SAPNA is a one type of necessity product. As it plays a role of anti aids medicine.

 Impact of media:
Media also plays an important role in promotion of goods.the growing reach of the electronic media has created a huge change in the lifestyle of rural consumer. Due to this demand for SAPNA pills also increases.

Population of India – Rural v/s Urban
Popula -tion In Crores % Total Population In Crores % Total Popula -tion In Crores % Total Popula -tion in Crores % Total

Year Rural

1971 43.9

1971 80

1981 50.2

1981 76.3

1991 64.1

1991 76

2001 74

2001 73

Urban Total

10.91 54.8

20 100

15.62 65.82

23.7 100

20.3 84.4

24 100

29 103

27 100

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. A radical change in attitudes of marketers towards the vibrant and burgeoning rural markets is called for, so they can successfully impress on the 230 million rural consumers spread over approximately six hundred thousand villages in rural India.


Market segmentation is one of the steps that goes into defining and targeting specific markets. It is the process of dividing a market into a distinct group of buyers that require different products or marketing mixes. A key factor to success in today's market place is finding subtle differences to give a business the marketing edge. Businesses that target specialty markets will promote its products and services more effectively than a business aiming at the "average" customer. Opportunities in marketing increase when segmented groups of clients and customers with varying needs and wants are recognized. Markets can be segmented or targeted using a variety of factor. The bases for segmenting consumer markets include:
• • • •

Demographical bases (age, family size, life cycle, occupation) Geographical bases (states, regions, countries) Behavior bases (product knowledge, usage, attitudes, responses) Psychographic bases (lifestyle, values, personality)

A business must analyze the needs and wants of different market segments before determining their own niche. To be effective in market segmentation keep the following things in mind:
• •

Segments or target markets should be accessible to the business Each segmented group must be large enough to provide a solid customer Each segmented group requires a separate marketing plan.


Large companies segment their markets by conducting extensive market research projects. This research is often too expensive for small businesses to invest in, but there are alternative ways for to a small business to segment their markets.

A small business can do the following to gain knowledge and information on how to segment their markets: 1. Use secondary date resources and qualitative research. You can use the following resources for external secondary data:
• • •

Trade and association publications and experts Basic research publications External measurement services Watching key competitors marketing efforts and copying Talking to key trade buyers about new product introductions Conducting needs analysis from qualitative research with

2 Conduct informal factor and cluster analysis by:

• •

individuals and groups. There are many reasons for dividing a marketing into smaller segments. Any time you suspect there are significant, measurable differences in your market you should consider market segmentation. By doing so you will make marketing easier, discover niche markets, and become more efficient with your marketing resources.

 Dark
The pencil is used for writing and if the writing is not dark i.e. it is light then the reader will not be able to understand the written matter. Hence we have invented the pencil which would be darker than any other pencil.

 Cheap
The goods which are cheaply available with no compromise in quality then those goods or products are liked by every consumer. This is the reason why we are coming up with a pencil which would be cheaper.

 Velvet Body
The body of the pencil would be covered with velvet piece or a rubber piece to make the pencil body of either velvet or rubber. This is the extra feature added because this would help the writer to have a firm hold over the pencil and to write faster.

 Square body
The body and its shape also adds to the beauty of the product. Hence it is said that in the business world what ever is seen is taken. So the shape or the body of the pencil would be squared shaped which is not at all seen in the market till the date.

 Rubber attached behind
The pencil is seemed to be incomplete without the rubber. The writer might commit a mistake while writing and hence to correct the same rubber is provided at the end point of the pencil so that there is not an extra expenditure on the purchase of the rubber.s

 Longer

This pencil would be extra long then any other pencil and also at the minimum cost. So that the buyer would be able to enjoy the good writer pencil for a longer period of time.

 Availability
This pencil would be available at each and every store of the rural market so that there are no extra efforts taken by the customer to come at a long distance for the purchase of this unique pencil.

 Cartoon characters
The pencil is a such kind of a product which is mostly used by children and the children enjoy watching cartoons or such characters which seems to be funny. So then the children are going to get their favorite cartoon characters on this lovely pencil which is effectively made for kids but it is not that only kids could enjoy the writing with this pencil but it is for everyone to enjoy the writing with this pencil.

 Fragrance
The pencil has come up with new innovative feature of fragrance. This means that kids will enjoy good hand writing with sweet fragrance. This is an added advantage to our product as this idea is not applied to any of the pencil to the date.

Sign up to vote on this title
UsefulNot useful