( Affiliated AICTE)


Management Studies
presented by: Vijay Kumar & Seth Pal Singh

Under the aegis of Mrs. Arpita Srivastava

• Introduction. • Highlighting features of Rural market. • Significance of Rural markets in Indian economy. • Literature cited • • • • What is Innovation? Marketing innovations Rural Marketing Mix Challenges in Rural Market • Examples an eye view • Learning experience • Conclusion

• Villages are the heart of India. Approximately 75% of India’s population(equaling 12.2% of the world’s population)lives in 6,38,365 villages spread over 32 lakh square kilometers. • As per the census (2001) rural segments comprises 13.5 crore household which constitute 72% of total households in India with 48 crore adults individuals. Note:But the rural market is not homogenous across the country .

• places far away from towns or cities.

• CENSUS OF INDIA 2001 - A place where the population is not more than 5000, the density of population is not more than 400 per square kilometer and atleast 75% of the male population is engaged in agriculture.

Rural Marketing Definition
Function that manages all activities involved in assessing, stimulating and converting the purchasing power of rural consumers into effective demand for specific products and services to create satisfaction & a better standard of living for achieving organizational goals. Rural marketing involves the process of developing, pricing, promoting, distributing rural specific product and a service leading to exchange between rural and urban market which satisfies consumer demand and also achieves organizational objectives.

Features of Indian Rural Markets
• • • • • Large and Scattered market Major income from agriculture Low standard of living Traditional Outlook Infrastructure Facilities

1. Large Population 2. Higher Purchasing Capacity 3. Market Growth 4. Development of Infrastructure 5. Insulated from the global economic slowdown (RMAI)


Innovation may be defined as exploiting new ideas leading to the creation of a new product, process or service. Another way of putting this is that an innovation lowers the costs and/or increases the benefits of a task. A wildly successful innovation increases the benefits-to-costs ratio

“A marketing innovation is the implementation of a new marketing method involving significant changes in product design or Packaging, product placement, product promotion or pricing.” Innovative marketing of products is about leveraging the marketing mix, namely, the four P’s: Product (Design and Packaging), Price, Place and Promotion in ways that has not been before by the organisation implementing the innovations.

• FMCGs have come up with creams and soaps @ Rs 5, hair oil and shampoo sachets @ Re 1 and small Coke @ Rs 5. To develop a product to suit the rural scenario, • Companies came up with special rural products, like Chic Shampoo sachets @ Re 1, Parle-G Tikki Packs @ Rs 2, customised TVs by LG, Shanti Amla oil by Marico. All these brought positive results for them.

Low literacy rate Resistance to change Seasonal demand Lack of infrastructure facilities & proper warehousing facility  Threat of spurious products.  Communication problems.  Problems related to distribution and channel management.    

Rural Marketing Mix

• Rural Marketing Mix refers to the set of actions, tactics, tools or variables that a company uses to promote and sell its brand or product in a Rural markets

The 4Ps of Rural Marketing
PRODUCT: 1. Small unit size and low priced. 2. New product designs- sturdy products 3. Brand name. 4. Avoid sophisticated packing – Refill packs, Reusable packaging Factors to be considered while designing the product:  Specific requirements of Rural consumers.  Habits of usage and purchase  Income levels  Customs, beliefs and taboos.

The 4Ps of Rural Marketing
1. Low priced products 2. Application of value engineering (milk-soya protein) 3. Small sized utility packs

The 4Ps of Rural Marketing
• • • • PLACE: Segmentation Coverage of villages with 2,000 and above population Distribution up to flea markets/ Mandi/shanties/ Melas. Direct Contact with rural Retail

The 4Ps of Rural Marketing

• Television • Radio • Haats, Melas, Fairs. • Print media • Cinema • Hoarding/ Wall Painting • Rural van

Examples of Innovations in Rural an eye view

Examples of Innovations in Rural Marketing Mix
• ICICI BANK customized their rural ATMs, so they can operate biometric authentication. ICICI rural ATMS are battery operated so that power failure is not issue.

• Nokia develop affordable Mobile phones for rural markets with unique features such as local language capabilities, present time/ call limits. • Philip develop a TV ‘ Vardaan’ for rural markets. This TV work on the voltage 90-270 volts. • Philips developed ‘ Free Power radio’ this radio do not require power and battery also. it run on simple winding of level provided in the set. The price of this attractive set is Rs. 995.

• Asian Paints promoted its Utasv brand of paint by painting the village Sarpanch’s house a few months prior to the launch to demonstrate that the paint does not peel off and is an ideal replacement of chuna • The health development assistant of HUL regularly meets school teachers to promote Lifebuoy soap in Villages.

• Paint companies supporting Pola fair in Maharashtra by painting the horns of the bulls. • Sonepur Mela, Vaisakh Purnima Mela( Bihar). • Navaratri Fair, Ambaji (Gujarat) • Naucahndi Mela, Ramlila Mela(UP) • Kartik Mela, Gawlier Trade Fair( MP)

• Parachut Oil, Nirma washing powder and tiger brand biscuits have been promoted through haats. • About 40,000 Haats are held in rural areas in our country, highest number haats in U.P (10,000).

Increased penetration of electronic media

Examples of Innovations in Rural Marketing Mix - ITC e-choupal

ITC is setting up e-Choupals
• The company’s e-chaupal initiative is a novel idea which bypasses the brokers between the Company and the farmers.

• It is helping Indian agriculture to enhance its competitiveness by empowering Indian farmers through the power of internet . • This unique transformational strategy has become the subject matter of a case study at Harvard b school ,has created for I.T.C a huge rural distribution infrastructure ,significantly enhancing the company’s marketing reach.

Formed in 1946,it is a brand name managed by an apex cooperative organization ,Gujarat co-operative milk marketing federation limited which today is jointly owned by some 2.41 million milk producers in Gujarat. It has been a sterling example of right mix of rural marketing and has established itself as a uniquely appropriate model for rural development.

Amul has spurred the white revolution in India and it is today the world’s biggest cheese brand.

The company introduced its igo range of t.v’s priced cheaply at rs.5000 for 14 inches particularly to cater to the backward states like Bihar, Rajasthan and Uttar Pradesh.

Mobile phone market penetration

•LG-BSNL –Reliance tie up for rural market. •Handsets which are cheap and with offers are provided to the rural customers.

parle g.m peg

• This company introduced the innovative technique of using video vans for marketing Nirma products . 1. Reach to interior parts 2. Offer opportunity for personal interaction .

• LG India- tripled the number of its retail & distributor outlets in rural areas from 2004 to 2008. • The avg. price of its Sampoorna range of CTVs came down to about the price so competitive that, thereby bridging the gap between CTVs and other local B/W TVs. • It also tapped local forms of entertainment like annual haats and fairs and made huge investments in infrastructure for distribution and marketing.

This company first come out with the concept of sachets and it revolutionize the whole market, making the Chic shampoo the 2nd largest selling shampoo in India What followed was the flood of products in small packing ranging from toothpaste, face creams, soaps, hair oil etc.

Increase in number of outlets from 80,000 in 2001 to 190,000 in 2005 resulting in increased market penetration from 13 % to 28 %.

. It concentrated its entire advertising towards the rural customer. It also tapped the local form of entertainment like annual haats and fairs and made huge investment in infrastructure for distribution and marketing.

GODREJ Introduced Cinthol and Fairglow in 50 gram packs priced at rs.4

coca-cola is providing low cost ice-boxes
because of the lack of electricity and refrigerators in the rural areas.

Learning experience
 Companies are finding Rural Markets increasingly attractive.  Rural population is gradually getting urbanized and has a great potential and improving purchasing power.  The 4 As- Acceptability, Affordability, Availability, Awareness has to be effectively adopted in order To capture the untapped potential of the rural consumers.  With the initiation of various rural development programs there have been an upsurge of employment opportunities for the rural poor.

Learning experience
 Rural markets are delicately powerful. Certain adaptations are required to cater to the rural masses; they have unique expectation and warrant changes in all four parameters of product, price, promotion and distribution.  Continuous customization seems a sure shot approach to provide both short and long-term returns in the rural markets.

• The rural market in India is vast and scattered and offers a plethora of opportunities in comparison to the urban sector. • Improvement in infrastructure and reach promise a bright future for those intending to go rural. • Rural market is not exploited Completely and is yet to be explored.

Literature cited
 Books: • Rural Marketing by C.S.G. Krishnamacharyulu, Lalitha Ramakrishnan • Rural Marketing by T.P.Gopalswamy, II edition. • Rural Marketing- Text and cases by U.C.Mathur.  Websites: • • • • •

 Articles: • Rural Retailing by Navya Choudary, NIFT New Delhi • India business Directory • Rural mktg and its significance, by C. Pavithra (Research scholar, Periyar University) • Soumen Banerjee Senior Administrative Officer at ICFAI National College, Asansol. & Lecturer at IIAM, Durgapur. Article posted on March 21, 2009

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