RURAL MARKETING

RURAL MARKET ENVIRONMENT

 The Rural Consumer

 The Rural Demand

 Other Aspests
THE RURAL CONSUMER
A DETAILED PROFILE
 Size of Rural Consumer Group

* Rural population is about 73% of the total

population of India

* According to 2001 census the total rural population

amounts to 74 Crore
* 12 Crore households – 70% of the total

 Location Pattern

A Scattered market the comparison below shows the same –

* Urban Population is spread over 3,200 cities
* Rural population is spread across 5,70,000 villages
 SOCIO-ECONOMIC POSITION
 Low purchasing power & Per Capita Income
 Bounded by tradition, culture, religion & community
 60% of rural income is from Agriculture
 More than 50% rural households have monthly income <
Rs 25,000
 About 14% have income > Rs. 50,000
 In recent years, 70% rural households have started
saving/investing their income
 SOCIO-ECONOMIC POSITION
 Culturally a Diverse & Heterogeneous Market in terms of Religious,
linguistic, social & cultural factors
 State to State variation in extent of development
From a study conducted by IMRB (Indian Market Research Bureau) provides
development index points for each state on

Health & Education
 Transportation
 Electricity
 TV Transmission
 Banks
 Post Offices
 Water Supply

 Average villages have 33 index points

 SOCIO-ECONOMIC POSITION
 Literacy Level
 Rural India has a literacy rate of 28% compared to 55% of the whole
country
 Lifestyle
 Conservative & tradition bound
 There has been a change in the same over the years though with
 Increase in Income
 Growth in Education
 Greater Media Penetration
 Marketers efforts to reach and capture the rural market’s
 SOCIO-ECONOMIC POSITION
 Buying Behavior
Factors that Influence
 Literacy level

 Occupation

 Social & Cultural Factors

 Exposure to Media

 Marketer’s Efforts

 The buying behavior has undergone a major change. A

huge population in rural areas has seen an increase in
their income as a result of which they have the potential
to buy expensive/luxury products
 THE RURAL DEMAND
 Some well established products
 Pressure Cooker Artificial Jewellery
 Cooking Utensils Medicines
 Batteries Tobacco Products
 Scooters, Motorcycles Soaps,Detergents
 Bicycles Electrical Goods (fan,light)
 Radio T.V
 Pesticides, Fertilizers Wrist Watches
 Tea Mobile Phones
 Sewing Machines
 RECENT TRENDS
 SteadyGrowth from the past 2 decades
 Welcome change in the composition of Rural
Demand
 Several products already well established in the rural
market
 In many products the rural market share is greater
than the urban market
 In many products rural market has overtaken the
urban in growth rate
 RURAL MARKET BECOMES ATTRACTIVE
TO CORPORATES
 The Rural Market is being seen as a Growing
Oppurtunity mainly because of the following –
 Rural Demand is growing rapidly
 Purchasing power has increased
 Cut Throat competition in the Urban Markets
 Rural market is largely unexplored and untapped
 There would be opportunities for new entrants as compared to
urban population being loyal to specific brands
 The volume and the strength of the rural population
COMPANIES ALREADY INTO RURAL
MARKET

Company Rural Sales (% of total)

HUL 50

Colgate 50

Godrej 30

Cavinkare 33

Marico 25

Cadbury 25

Cipla 18
TAPPING THE RURAL MARKET
 Segmentation & Targeting
 Product Management

 Physical Distribution

 Channel Management

 Sales Force Management

 Marketing Communications
SEGMENTATION & TARGETING
 Geographic
 Climate & Level of Irrigation
 Nearness to a feeder town/ industrial project
 Demographic Segmentation
 Population Concentration
 Age
 Literacy Level
 Income – Regular & Seasonal
 Buying Behavior

Sources of data on rural consumers

 CMIE – Center for Monitoring Indian Economy
 Thompson Rural Index
 PRODUCT STRATEGY
 Whether the product from Urban Market can be
bought as it is in the rural market or it needs
changes/customizations
 Economic Income realities should be considered

 Lower priced versions do succeed in most cases

but not always
 PRODUCT STRATEGY
 Specifically designed products
 Tractor
 Everyday’s Jeevan Sathi torch
 Model Variants – Bikes
 Beverages – Chota Coke
 Color Variants – Asian Paints
  Different products/models,brands,packing, pricing and positioning
 Package Design and pack size
 Logos, symbols and mnemonics
 Brand Decisions
 Sell value brands, not cheap products
 Preconceived notions have no place
 PHYSICAL DISTRIBUTION
 Problems
 Transportation and warehousing
 Cost – Service dilemma becomes more acute,
transportation & warehousing costs are high
 The delivery van – ITC and HUL have their own
delivery van’s
 High cost can be taken care of, if the sales volumes
are high which is most likely if the porduct is
marketed properly
 CHANNEL MANAGEMENT
 Problems –
 Multiple tiers add to the cost
 Non Availability of dealers
 Poor viability of outlets
 Inadequate banking and credit facilities
 The village shop is the key to rural distribution
 Improving the viability of the outlets, deal in
number of product lines.