Presented by : Satish N Nande ID No : ABM-08134 Master of Agribusiness Management Department of Economic

Rural marketing Evolution of rural marketing What makes rural marketing attractive Opportunities of Indian rural marketing Myths about Rural Marketing Challenges and Strategies for Rural Marketing Case Study ITC e- Choupal Conclusion

On account of green revolution, the rural area are consuming a large quantity of industrial and urban manufactured products. Thus a special marketing strategy emerged known as Rural Marketing. Rural marketing involve delivering manufactured or processed inputs or services to rural producers or consumers.

Untapped rural potential - 6,27,000 villages across the country - account for 70% of population - 60% of national demand for various product categories

41 million kisan Credit Card have been issued Of the 20 million Rediffmail sign up, 60% are from small towns. 50% of transaction from these town . 42 million rural household are avaling banking services in comparison to 27 million HHs in urban HHs. Investment in formal saving instruments is 6.6 million HHs and 6.7 million HHs in urban.

Opportunities....

1) 60 per cent of the Indian population lives in villages 2) In the period between 2003-04 and 2008-09, the Indian Government increased Agriculture Budget allocation by a significant 300 per cent.

3) The Rashtriya Krishi Vikas Yojana was launched in 2007-08 with an outlay of Rs.25 thousand crore 4) increase the flow of credit to agriculture gone up from Rs.87 thousand crore in 2003-04 to about Rs.2.5 lakh crore in 2007-08

- In 50 years , 40% villages have been connected by road, in next 10 year another 30% would be connected -More than 90%villages are electrified ,through only rural homes have electric connection -Rural telephone density has gone up by 300% in the last 10 years

-No. of pucca house doubled from 22% to 41% -No. of Kuccha house halved from 41% to 27% -Percentage of BPL families declined from 46% to 27% -Rural literacy level improved from 36% to 59% in past two decades

Low penetration rates in rural areas , so there are many marketing opportunities
Urban Rural

Durable
CTV Refrigerater 30.4 33.5

FMCGs
Shampoo Toothpaste

Urban
66.3 82.2

Rural
35.4 55.6

1) Rural market is a homogeneous 2) Disposable income is low 3) Individuals decide about purchases

REALITY
Heterogeneous population Various tiers depending on the income State wise variation in rural demographics Literacy % in ( Kerala 90%, Bihar 44%) Population below poverty line (Orissa 48%, Punjab 6%)

REALITY Number of middle class ( annuals income Rs 450002,15,000) Rural 27.4 million Urban 29.5 million
Per Capita annual income Rural Rs 9481 Urban Rs 19,407 Total Rs 12,128

Reality: Decision making process is collective Purchase process - can all be different

Challenges.

 Understanding the Rural Consumer

Poor Infrastructure
Physical Distribution Channel Management Promotion and Marketing Communication

1) Availability (Place)
2) Affordability (Price) 3) Acceptability (Product) 4) Awareness (Awareness)

Challenges
Regularly reach product to the far-flung villages. Indias 627,000 villages are spread over 3.2 millions sq Km ; 700 million indians may live rural areas

Strategies
Strive to reach at least 13,113 villages with a population market penetration Can reach the market bye the following ways:

Hindustan lever, to serve remote village ,use auto rickshaws ,bullock-carts and even boats in the backwaters of Kerala. Coca-Cola, has evolved a hub and spoken distribution Mosel to reach the village .to ensure full loads ,the company depot supplies ,twice a week, large distributors which who act as hub . These distributors appoint and supply ,once a week, smaller distributors in adjoining areas.

AFFORDABILITY

Challenges : To provide at cheaper price

Strategies :
Introduce small unit packs.

Challenge: To gain acceptability for the product or service Strategies: Offer product or services that suit the rural market Easy to understand Coca-Cola company because of the lack of electricity and refrigerator in the rural area ,it provide low cost ice boxes ,a tin box for new outlets and thermocol box for seasonal outlets.

Challenges : less exposure to the world , low literacy rate Strategies : Opinion leaders play a key role in popularizing product and influence in rural market so choose the appropriate opinion. Can use the following promotional methods:

One on One contact programs are extremely efficient manner to reach the rural consumer. Provide an opportunity to Demonstrate Induce Trial Educate

An opportunity to present brand stories using better display tools Large screens Animations Melas can be used for Retail sale points Sampling exercise Demonstration

1) Marketing Strategy 2) Distribution Strategy 3) Promotional Strategy

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2)

3)

4)

Marketers need to understand the psyche of the rural consumers . intensive personal selling efforts Firms should refrain from designing goods for the urban markets and subsequently pushing them in the rural areas by utilizing the various rural folk media to reach them in their own language

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2)

3)

4)

using company delivery van which can serve two purposes Annual "melas fixing specific days in a week as Market Days (often called "Haats') "Mandis" or Agri-markets

the audio visuals must be planned to convey a right message to the rural folk. The rich, traditional media forms like folk dances, puppet shows, etc., with which the rural consumers are familiar and comfortable, can be used for high impact product campaigns.