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What is Rural? What is Marketing? What is Rural Marketing? Evolution of Rural Marketing Indian Rural Market 4A’s of Rural Marketing Rural Facts Size Of Rural Marketing Case Studies Rural Marketing in India Recession  Conclusion



What is Rural?
Any habitation with a population density of less

than 400 sq. km., where at least 75% of the male population is engaged in agriculture and where there exists no municipality or board (Census 2001). other cities other than the 7 Metros (LG India).

The rural and semi urban area is defined as all Locations

having shops or commercial establishments with up to 10,000 people are treated as rural (Sahara, ITC, HUL)

What is Marketing?
The Chartered Institute of Marketing

define marketing as 'The management process responsible for identifying , anticipating and satisfying customer requirements profitably.’
Marketing is not about providing

products or services it is essentially about providing changing benefits to the changing needs and demands of the customer

Introduction to Rural Developing of Marketing the market in the area as

defined as Rural. Hence it could be aptly said that it encompasses the activities such as developing the process. To meet this Objective – 1.Right product at the right price to the right people at the right time. 2.Exchange between Rural and Urban is a factor could be Urban to Rural, Rural to Urban, Rural to rural.

due to the advent & spread of the Green Revolution. Phase 2 (1960s-1990s)During these times. rural marketing represented the emerging. In this period. Rural marketing then referred to the marketing of rural products in rural & urban products. rural marketing represented marketing of agriculture inputs in rural markets & marketing of rural produce in urban areas. Phase 3 (1990s to present) The third phase of rural marketing started after the liberalization of the Indian economy.Evolution Of Rural Marketing Phase 1 (Before 1960s) Before the advent of the Green revolution. the nature of rural market was altogether different. distinct activity of attracting & serving rural markets to fulfill the need .

(Urban.Indian Rural Market 47% of the total population. Semi urban. More than 570 Million people.28%.630 (as per NCAER. The annual rural household income of Rs 56.25%). . IMDR 2009) Changing consumption patterns and lifestyles Unfold tremendous opportunities for rural marketing.






The more daring MNC’s are meeting the consequent challenges of availability. affordability. acute dependence on the vagaries of the monsoon.  seasonal consumption linked to harvests and festivals and special occasions  poor roads.4As of rural Marketing large number of daily wage earners.power problems. inaccessibility to conventional advertising media. the rural consumer is not like his urban counterpart in many ways. acceptability and awareness (the socalled 4 A’s) . However.

. Marketers must trade off the distribution cost with incremental market saturation. Hindustan Lever. a subsidiary of Unilever.2 million sq km Poor state of roads. Greater challenge is to regularly reach products to the far-flung villages.  Around 700 million indians live in 627. has built a strong distribution system which helps its brands reach the interiors of the rural market.000 villages & are     spread over 3.Availability  first challenge is to ensure availability of the product or service. India's largest MNC.

. twice a week. once a week..  Coca-Cola considers rural India a future growth driver..Contd.  Stockiest use autorickshaws.  LG Electronics has set up 45 offices in urban and semi-rural areas and 59 rural/remote area offices. large distributors which who act as hubs. These distributors appoint and supply.  To ensure full loads. ... bullock-carts and even boats in the backwaters of Kerala to serve remote villages. the company depot supplies. has evolved a hub and spoke distribution model to reach the villages.

 Shampoos.  Godrej recently introduced three brands of Cinthol. Fair and lovely. priced at Rs 4-5. Colgate toothpaste and many others launched its smaller packs to cater most of the rural consumers. Affordability . Fair Glow and Godrej in 50-gm packs. The second challenge is to ensure affordability of the product or service.  Some companies have addressed the affordability problem by introducing small unit packs.  Most of rural people earn daily wages  With low disposable incomes. products need to be affordable to the rural consumer.

Lifebuoy at Rs 2 for 50 gm.contd. among the first MNC’s targeted the rural market has launched a variant of its largest selling soap brand.  Eighty per cent of new drinkers come from the rural markets. .  Coca-Cola has also introduced Sunfill. a powdered soft-drink concentrate..  Hindustan Lever. 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..  Coca-Cola has addressed the affordability issue by introducing the returnable 200-ml glass bottle priced at Rs 5..

 Need to offer products that suit the rural market.000 sets in the very first year. .  In 1998 LG Electronics. It was a runway hit  selling 100.  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. developed a customized TV for the rural market and christened it Sampoorna.Acceptability  The third challenge is to gain acceptability for the product or service.

however.  HDFC Standard LIFE topped private insurers by selling policies worth Rs 3. the rural consumer has the same likes as the urban consumer — movies and music — and for both the urban and rural consumer. .. the rural consumer expressions differ from his urban counterpart.. However. Fortunately.contd. the family is the key unit of identity..  The insurance companies that have tailor-made products for the rural market have performed well.5 crores in total premium.  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.

the family is the key unit of identity. which is trying to push its soap brands into the interior areas.Awareness  The rural consumer has the same likes as the urban consumer — movies and music — and for both the urban and rural consumer.  The rural consumer expressions differ from his urban counterpart.  Consumption of branded products is treated as a special treat or indulgence. . uses radio to reach the local people in their language.  Godrej Consumer Products.  Outing is confined to local fairs and festivals and TV viewing is confined to the state-owned Doordarshan.  Hindustan Lever relies heavily on its own companyorganized media.

The company uses local language advertising.. which alone reached 41 per cent of rural households. cinema and radio to reach 53.Coca-Cola uses a combination of TV. Coca-Cola doubled it’s spend on advertising on Doordarshan. posters and all the local forms of entertainment.. . LG Electronics uses vans and road shows to reach rural customers. The key dilemma for MNC’s ready to tap the large and fastgrowing rural market is whether they can do so without hurting the company's profit margins.. Philips India uses wall writing and radio advertising to drive its growth in rural areas. Use of banners.6 per cent of rural households. Coca-Cola advertising stressed its `magical' price point of Rs 5 per bottle in all media. continued...

93% people in Rural Area live in their own houses as comparative to 61% of Urban.Rural facts The average Monthly per capita Consumer Expenditure (MPCE) for rural areas is Rs 495 and that for urban areas is Rs 914. Food Expenditure in Rural Area is 56% as in Urban it is 44%. .

 Rural contribution is 40% in sales to top 7 cities of Frost Free refrigerator  More than 70 Million Kisan Credit Cards are already issued by Banks to rural households.Contd……… 9 in 10 Rural households use branded washing powder or cakes  2 in 5 uses more than 1 brand of soap  More than 1/2 of households use branded skin creams.MARG Survey / NSSO Survey). . (Source: ORG.

Agri products and 2/4 wheelers. which includes FMCGs. Durables.Inputs 2/4 Wheelers Total Source: Francis Kanoi 2009 Rs.Size of the Rural Market The total size of the rural market is estimated at Rs.8000 crore Rs.123000 crore . Estimated Annual Size : Rural Market FMCG Durables Agri.000 crore.23. 1.5000 crore Rs.45000 crore Rs.65000 crore Rs.

Rural customer…. Understand them Illiterate but not fools .

no advertising  Posters  Farmer meets  Leaflets .Agro Advertising No brands.

Rural Marketing Common.. One follows other… .


Rs.LG’s advertising strategies for rural Market… LG launched its first low priced TV for rural consumers. -Sampoorna.RS 4900 Promotion Mobile Vans Exhibition Road Shows ..3000 -Cineplus.


HUL Hindustan Levers’ Project Shakti fetches 10% of its total sales from rural markets. .


ITC .200 a day and nets Rs 2 lakh.eCHOUPAL . the company will be launching 50 such rural malls by the end of the next fiscal.ITC-eChoupal Sagar records an average footfalls of 1. it stacks almost all the leading durables and non-durables brands.

Power Connectivity Training .

Social messaging to reach the hearts and minds of Abhishek Bachchan.presented as a humble public servant.   . bringing power to the people. an agent of change.IDEA Has a customer base of over 17 million. Promotional Strategy (An Idea can change your life!) ‘Idea’ as an instrument of democracy. rural India.


We don’t consider other service providers.” . only IDEA works here..

00 . 1199.sim + mobile At only Rs.ji? Combi pack.

Nokia Variety of product  Number of low Priced phones Airtel sim free with nokia cell Teaching them how to use Low priced phones. easy to use .


Hero Honda Free trials On the spot finance Broad servicing range .

.7 million HHs in urban. Of two million BSNL mobile connections. 50% of transactions from these towns are on Rediff online shopping site. 50% are in small towns / villages. 42 million rural households are availing banking services in comparison to 27 million urban House Holds. 60% are from small towns.In 2001-02. LIC sold 55% of its policies in rural India. Of the 20 million Rediffmail sign-ups. Investment in formal savings instruments is 6.6 million HouseHolds in rural and 6.

low unit price more important than economy Rural market involves more intensive personal selling efforts compared to urban marketing To effectively tap the rural market. This can be done by utilizing the various rural folk media to reach them in their own language and in large numbers so that the brand can be associated with the myriad rituals. Buys small packs. festivals. celebrations. a brand must associate it with the same things the rural folks do.Rural Consumer Insights Rural India buys Products more often (mostly weekly). and other activities where they assemble. "melas". .

Current Scenario Rural India.84 billion for improving rural infrastructure. The Union Budget for 2009-10 hiked the allocation for the National Rural Employment Guarantee Act (NREGA) to US$ 8.03 billion. giving a boost to the rural economy. the rural and small town economy which accounts for 60 per cent of India’s income has not been impacted . According to a study on the impact of the slowdown on rural markets commissioned by RMAI and conducted by MART. This is in addition to the ambitious Bharat Nirman Programme with an outlay of US$ 34. which accounts for more than 70 per cent of the country’s one billion population is not just witnessing an increase in its income but also in consumption and production.

Dabur....The rural consumer market. The . is expected to reach US$ 425 billion in 2010-11 with 720-790 million customers Several FMCG companies such as Godrej Consumer Products. Marico and Hindustan Unilever (HUL) have increased their hiring in rural India and small towns in order to establish a local connect and increase visibility. GlaxoSmithkline Consumer Healthcare (GSK) and Nestle and are now launching products specifically for rural markets At present 53 per cent of all FMCGs and 59 per cent of all consumer durables are being sold in rural India. 2008 when demand in urban areas slowed due to the global recession. which grew 25 per cent in Contd.

RuralMarketing In INDIA. The rural consumer market. Witnessing an increase in its income but also in consumption and production.A Strategy To Fight global RECESSION” Rural India accounts for more than 70 per cent of the country's one billion population (according to the Census of India 2001). grew 25 per cent in 2008 Demand in urban areas slowed due to the global recession. The rural economy had not been impacted by .

000 on various models in rural markets.000 to 8.Maruti Suzuki The industry posted a growth rate of 11% from April to October 2007 which fell to just 3% in 2008. Discounts from Rs 3.000 sales executives Target rural areas and started special schemes for village panchayats. rural teachers and rural officers. The sale of small cars (the entry-level segment) also decreased in the face of the credit squeeze. A mobile van was put on standby to provide car servicing at the villagers doorstep. Maruti planned to tap the rural market.Rural areas and middle class cities pushed the company’s sales during the period of . Maruti appointed 2.

as it drew in a record number . that is more than 30%. especially the rural mobile market in India.Mobile Industry Stock markets crashed Nasscom lowered its expectations for IT-BPO to 16- 17%. Bharti Airtel saw its profit in the three months to December 31 climb to 22 billion rupees . The mobile markets didn’t got affected but on the other hand reported a record growth. 8 million were from the villages. up 25 per cent from a year earlier. The mobile subscriber base is growing in leaps and bounds. 25 million new mobile subscribers added during April 2008 to June 2008. The industry‟s overall subscriber base grew 48 per cent in 2008 to 347 million customers.

1 percent to 26.00. Tata Tea realized that it was not selling in more than 1. In the same period of time.6 percent. Tata Tea also invested in rural India.4 percent in January-March 2008.HUL lost its market share from 21. Tata Tea decided to tie up with NGOs. Tata Tea‟s shares incresed from 18 percent in JanuaryMarch 2006 to 21.2 percent to 18.Tata tea During the time of recession. .000 villages in UP.9 percent and Tata Tea consolidated its market share from 18. Tata Tea created a unique channel of distribution with NGOs acting as the first tier and followed by 2 tiers from villages thus providing a means for funding to NGOs and as a source of steady income to youths who became distributors at level 2 and 3.

‘Rural melas' are being organised by Godrej in order to access potential rural consumers. Project Shakti (Hindustan Unilever) and Naya Yug Bazaar have established rural retail hubs. . ITC. Reliance Fresh. Choupal Sagars (ITC). Aadhars (PantaloonGodrej JV). such as LG India and Godrej. have increased their marketing efforts in rural areas. Kisan Sansars (Tata).Post Recession Initiatives Major domestic retailers like AV Birla. DCM Shriram Consolidated (DSCL) has undertaken the process of improving the business model of the rural retail chain. Hariyali Kisan Bazaars (DCM). Godrej. Reliance and many others have already setup farm linkages. durable companies.

Conclusion “Rural market has an untapped potential like rain but it is Different from the urban market so it requires the defferent marketing strategies and marketer has to meet the challenges to be successful in rural market.” .

Thank You! Sat Shiri Akal 52 .


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