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Introduction to Rural Marketing

Introduction to Rural Marketing


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Published by: kishore.vadlamani on Dec 18, 2009
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Prof. V.R. Kishore Kumar M.A., M.


Introduction Evolution of rural marketing Why companies go rural? Definition Classification of rural markets Characteristics of rural markets Problems in rural markets Conclusion

“ 6,38,667 villages, 597 districts, 700 million people, myriad of languages, many traditions and a rich culture. A vibarant land with a long history. Rural Indian people are known as much for their warmth as their diversity. Welcome to the land of mysticism. The Real Bharat”. EXPLORE THE RURAL MARKETS, DONOT EXPLOIT THEM

The rise of rural markets has been the most important

marketing phenomenon of the 1990s, providing volume growth to all leading companies. Many corporates have been trying get a grip on rural market. But challenges are many: how to make the product affordable, how to penetrate the villages with small population, languages, brands etc.,

The reasons why companies are going rural are manifold. Ex: high rural incomes driven by agriculture growth, mass media etc. Marketers and manufactures are increasingly aware of the burgeoning purchasing power, vast size and demand base of the once neglected Indian hinterland. Efforts are now on to understand the attitude of rural consumers, and to walk their walk and talk their talk.

Definition of Rural: “Village with a population of less than 5000 with 75% of the male population engaged in agriculture” --- IRDA & NCAER
2/3 of consumers in rural areas(700 million) 26% NI generated, increasing purchasing power

India has 597 districts,

6,38,667 villages 32% connected with pucca roads 68% stilled untapped because of inaccessibility and lack of awareness etc.,

THE GLORIOUS PAST(1940-1990) THE PULS OF THE PRESENT(1990-2000) THE FURIOUS FUTURE (2000 onwards)

The glorious past(1940-1990)

1949- Asian Paints first entered 1960- HLL entered with Lifebuoy soap, dominates presence in more than 1 lakh villages, Colgate, Dabur followed it. 1980- Nirma,Cavincare and Marico entered, Procter and Gamble also entered.

The pulse of Present(1990-2000)

70% of rural population lies in villages 1% increase in purchasing power leads to increase of Rs 10,000 crores in government revenue. Companies launching plethora of products to cater changing life style in rural India.

The Furious of Future(2000 onwards)

The media explosion and satellite invasion have brought about drastic changes in the consuming habits of rural Indians and the future would hold a lot in store for companies entering rural markets.

Why companies go rural?
In the present scenario, companies operating in India will have only two options: either to go Global or go Rural . Today rural markets are as critical as urban markets for marketers. Reasons: urban markets are getting saturated a huge untapped market rising disposable income remittances from abroad and impact of media

Rural Marketing
“Rural marketing is the process of developing,

pricing, promoting, distributing rural specific goods and services, leading to exchange between urban and rural markets, which satisfies consumer demand and also achieves organisational objectives”. -- Ramkishen.Y

Classification of Rural Markets

Characteristics of Rural Markets
India is a big country and its rural markets have varied characteristics that change from people to people, region to region. Some of the main characteristics of India's rural markets are:
 Diverse nature  Urban market saturation  Rising disposable income  Rising literacy levels  Spread of cable television

Changingproduction of foodrural patterns patterns in grains Increased
Increased exports Better banking facilities Companies make a beeline to rural markets The power of rural communication Government policies Government employment schemes Socio-political changes in the wake of govt., policies

Credit cards for formers Cooperatives and corporate support

Problems in Rural Marketing
Although the rural market does offer vast

potential, it should also be recognised that it is not easy to operate there. Rural marketing is a time consuming affair and requires considerable investments interms of evolving appropriate strategies.

Problems  Deprived people and deprived markets  Lack of proper physical communication facilities  Transport  Many languages and dialects  Dispersed markets  Low percapita incomes  Low levels of literacy  Prevalence of spurious brands and seasonal


 Different way of thinking  Distribution problem  Narrow constraint basket

Rural marketing will grow in importance in the coming years. Some crude estimates point out that rural markets are growing at the rate of Rs400 crore per annum (at present the total estimated rural market is growing is Rs1,00,000crore). Corporates that have understood the psyche of rural consumers and markets and how to work it have notched up successes.

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