The '4 As' of Rural Marketing Mix

International Journal of Management and Social Sciences Research (IJMSSR) ISSN:

2319-21!olume 2" No# 1" Januar$ 2%13i-&'lore International Research Journal
(onsortium )))#ir*c*ournals#org
+
,he - .s/ of Rural Mar0eting Mi1
(hintan Shah"
.ssit# 2rof#" 3hag)an Maha4ir (ollege of 3usiness .dministration" Surat" India
Renc$ 5esai"
I6( 2rinci'al" 3hag)an Maha4ir (ollege of 3usiness .dministration" Surat" India
.3S,R.(,
,he rural mar0ets in India ha4e gro)n si7e" range andso'histication in recent times#
8nder the changing Socio-economic scenario" the rural mar0ets ha4e great 'otentialities
in India and offer 9right 'ros'ects andattraction to the com'anies# Rural mar0eting is
confused)ith agricultural mar0eting 'articular em'hasis is 'lacedon the im'act of the
four ./s 'rinci'les on the ruraleconom$ and its 'artici'ants" namel$ farmers"
landlessla9ourers and mar0eting intermediaries# ,he mar0etinghad a 'ositi4e effect on all
these 'artici'ants through thecreation of 4ast mar0eting o''ortunities# ,he dri4ing
forceof this success )as :mar0et forces"; generating 4irtuousc$cles in the transition
mar0eting# .t the same time" the:a9sence of 9ad mar0eting 'olic$; is em'hasi7ed as a
0e$ for the success in the conte1t of India" )here e1cessi4einter4ention of 'ri4ate
com'anies li0e <#8#=" (.=!IN(.R> 2?R,>R .N5 @.M3=>" often resulted in
successof rural mar0eting in India# ,he Indian rural mar0et iso9ser4ed as a high 'otential
mar0et across the )orld# More than three-fourths of countr$/s consumers reside inrural
areas and more than half of the national income isgenerated 9$ them# 5ue to the glo9al
economic do)nturn"the com'anies are fe) facing slo)er ur9an sales" 'rom'ting them to
ma0e a rush to)ards rural India# ,hedo)nturn has not im'acted rural mar0ets in the same
)a$as ur9an mar0ets# =astl$ )e can sa$ that
Rural Markets are future battlegrounds. Keywords:
Rural mar0et" Socio-economic" .gricultural Mar0eting" 8r9an Mar0ets#

INTRODUCTION
,he rural mar0ets in India ha4e gro)n si7e" range andso'histication in recent times#
8nder the changing Socio-economic scenario" the rural mar0ets ha4e great 'otentialities
in India and offer 9right 'ros'ects andattraction to the com'anies# In fact" the rural
mar0ets aregreen 'astures for com'anies toda$" as the$ are gro)ingfaster as com'ared to
the ur9an mar0ets# Aith their hugesi7e and demand 9ase" the$ offer great o''ortunities to
themar0eters# More than three-fourths of countr$/s consumersreside in rural areas and
more than half of the nationalincome is generated 9$ them# 5ue to the glo9al
economicdo)nturn" the com'anies are fe) facing slo)er ur9ansales" 'rom'ting them to
ma0e a rush to)ards rural India#,he do)nturn has not im'acted rural mar0ets in the
same)a$ as ur9an mar0ets# Stagnant ur9an demand and relati4erural 'ros'erit$ are
attracting com'anies to the ruralmar0ets for selling their 'roducts and ser4ices# .'art
fromthe traditional agricultural income" go4ernment s'endingand infrastructure 'ro*ects
ha4e meant cash flo) in thesemar0ets# ,hus" the relati4e rural 'ros'erit$ is
fuellingdemand and" therefore" dra)ing com'anies to)ard them#,he 4illages" )hich )ere
once inconseBuential" are no)getting the attention of com'anies across different
sectors#.ll the ma*or industries in India are tilting to)ards ruralIndia as the Indian rural
mar0et is full of o''ortunities andhas seen im'ressi4e gro)th in recent $ears# ,oda$"
ruralconsumer has almost 9ro0en all the 're4ailing 9arriers#Momentous gro)th in
'urchasing 'o)er" im'ro4ement inliterac$ le4el" change in lifest$le" increasing
9randconsciousness" changing consum'tion 'attern"im'ro4ement in infrastructure
facilities and ra'id s'read ofcommunication net)or0 in rural areas ha4e 'resented
agro)ing 'otential of rural India for the com'anies# ,hecor'orate sector is" therefore"
increasingl$ loo0ing to)ardsthe rural consumers and fine-tuning their
mar0etingstrategies in order to 'romote their 'roducts and ser4icesin the rural areas#
C>.,8R>S ?C IN5I.N R8R.=M.RD>,S
=arge and Scattered mar0et:
,he rural mar0et of India is large and scattered in thesense that it consists of o4er +3
crore consumers fromE"F%"%%% 4illages s'read throughout the countr$#
Ma*or income from agriculture:
Nearl$ +% G of the rural income is from agriculture#<ence rural 'ros'erit$ is tied )ith
agricultural 'ros'erit$#
,raditional ?utloo0:
,he rural consumer 4alues old customs and tradition#,he$ do not 'refer changes#
5i4erse socio-economic 9ac0)ardness:
Rural consumers ha4e di4erse socio-economic 9ac0)ardness# ,his is different in different
'arts of thecountr$#
Infrastructure Cacilities:
,he Infrastructure Cacilities li0e roads" )arehouses"communication s$stem" financial
facilities are inadeBuate
International Journal of Management and Social Sciences Research (IJMSSR) ISSN:
2319-21!olume 2" No# 1" Januar$ 2%13i-&'lore International Research Journal
(onsortium )))#ir*c*ournals#org
F
in rural areas# <ence 'h$sical distri9ution 9ecomes costl$due to inadeBuate Infrastructure
facilities#,he rural 9a7aar is 9ooming 9e$ond e4er$oneHse1'ectation# .n estimated
induction of Rs 1% 9illion inthe rural sector through the go4ernmentHs ruralde4elo'ment
schemes in the Se4enth 2lan and a9out Rs3%% 9illion in the >ighth 2lan is also 9elie4ed
to ha4esignificantl$ contri9uted to the ra'id gro)th in demand#
R>.S?NS C?R 3??S, IN 28R(<.SIN@2?A>R ?C R8R.= C?=DS:
(om'anies across different segment from Maruti Su7u0i"<ero <onda" <industan
8nile4er" I,(" =@" Samsung" No0ia" Idea (ellular" 3harti .irtel etc# are all
mo4ingto)ards rural India to slo)do)n in ur9an demand in theface of the recent
de4astating glo9al do)nturn#(onseBuentl$" rural mar0ets are com'ensating for
ado)ntrend in ur9an sales# Rural India" )hich )asunnoticed for the 'ast se4eral $ears" is
no) at the centre ofattention of com'anies# Cor four consecuti4e $ears" there)as 'ositi4e
gro)th in rural @52" )hich am'lified thes'ending 'o)er of rural floc0s# ,he rural
econom$ alsogot a 9oost )ith go4ernment initiati4e li0e the farm loan)ai4ers" )age
'a$outs under the National >m'lo$ment@uarantees .ct and the am9itious 9harat
Nirman2rogrames for im'ro4ing rural infrastructure# More than% 'ercent increase in
su''ort 'rices of cro's o4er the lastfe) $ears has also enhanced the 'ros'erit$ of rural
India#,he follo)ing factors ga4e a 9oost 'urchasing 'o)er ofrural fol0s:

Growing Investments:
5irect go4ernment e1'enditure in agriculture has)itnessed a shar' rise o4er the last fi4e
$ears" there9$ena9ling 9etter farm credit and creation of su''ortinfrastructure li0e
irrigation# .s a result" the countr$ has 9een a rise in the ca'ital formation in agriculture
sector")hich is e4ident in increase 'ro'ortion of irrigated landand higher 'ro'ortion of
fertili7ers and 'esticides# .'artfrom in4estment in agriculture" the go4ernment
isem'hasi7ing on de4elo'ing infrastructure li0e roads"housing" telecommunication"
electrification and irrigationunder the national 'ro*ect called 3harat Nirman Io*ana#,hus"
the o4erall de4elo'ment of rural India assisted inincreasing the 'urchasing 'o)er of rural
'eo'le" 9esidesraising the Bualit$ of rural life# In a )a$" this is good ne)sfor com'anies
)ho are 4enturing into the hinterland tota0e their mantle of gro)th for)ard# ,hus" there
is amar0ed increase in the rural income due to agrarian 'ros'erit$# .ll this has left rural
'eo'le richer and moream9itious" ena9ling the com'anies to rush in )ith s'ecialschemes
and tailor-made 'roducts for the highl$ 'ricesensiti4e rural mar0ets# (hange has also
9een 9roughta9out 9$ the 4ast im'ro4ement in rural road connecti4it$"from less than %
'ercent in 2%% to at least J% 'ercentconnecti4it$ 9$ the end of 2%11# <ence" there is
increasedcontact of rural 'o'ulace )ith their ur9an counter'arts dueto de4elo'ment of
trans'ort and )ide communicationnet)or0#

Implementation of National Rural EmployeeGuarantee Act:
,he 9asic 'ro9lem in rural areas is lo) income of rural 'eo'le" )hich is also seasonal in
nature# ,o address thisissue" the go4ernment 'ut forth the national Rural>m'lo$ee
@uarantee .ct (NR>@.)" )hich guarantees1%% da$s of em'lo$ment to e4er$ adult in
rural areas e4er$$ear# Most of the *o9s are 'ro4ided during the non-farmingseason and"
therefore" su''lement famil$ income )ithoutu'setting the farming c$cle# ,he
im'lementation of this.ct is a significant reason for surge in rural income and
itdecreased the de'endence on farm income to a largee1tent# ,he increased income of
rural 'eo'le has caused as'urt in demand for consumer non-dura9le and dura9le 'roducts#
In fact" rural mar0ets ha4e turned out to 9eattracti4e to com'anies for mar0eting their
'roducts#

Increasing In .gro# (ommodit$ 'rice ,rends:
.fter the green re4olution" ur9an consumers gained 9$)a$ of chea' food" 9ut this
affected food grain 'rices andmade agriculture an economicall$ un4ia9le occu'ation#,his
trend has ho)e4er 9een re4ersed o4er the last fe)$ears as the consum'tion of es'eciall$
high-end foodgrains li0e )heat#" rice and 'luses has gone u' faster thanthe gro)th in
su''l$" 9uilding u' underl$ing 'ressure on 'rices# Most of the agro 'roducts )itnessed
rice in 'ricesin the last cou'le of $ears" )hich are currentl$ at nearl$dou9le than 2%%+
'rices# ,he demand for different 'roducts and ser4ices is thus" 'ulling u' in rural areas
dueto increase in 'urchasing 'o)er of rural fol0s#

Increase In iteracy An! E!ucation:
Rise in literac$ and educational le4el among rural 'eo'leand the resultant inclination to
lead so'histicated li4es alsohas a 9earing in 9oosting their 'urchasing 'o)er# ,hus"there
e1ists tremendous 'otential in rural India and thecom'anies are coming for)ard to
harness it for the 'ros'ects of mar0eting their 'roducts and ser4ices# ,hus"ma0ing a dash
to the hinterland is ena9ling the com'aniesto ma0e u' for the sluggish ur9an demand#

Insulation "rom T#e Economic $low!own:
,he rural and small to)ns ha4e remained insulated fromthe economic slo)do)n as
em'lo$ment o''ortunities andincome streams ha4e gro)n steadil$ )ith
consistentdemand for goods and ser4ices# Since the 'ercentage ofsalaried )or0ers in rural
India is a third of the ur9an andthat too" mostl$ in go4ernment ser4ices" there is hardl$an$
im'act 4isi9le in terms of *o9 la$offs" e1ce't in select 'oc0ets of the countr$# <igher
dis'osa9le sur'lus amongconsumer in these mar0ets is thus resulting in smart 9u$ing and
creating a lot of 9usiness o''ortunities for the com'anies to ma0e a full-throttle fora$
into the ruralmar0ets#
T#e %A Approac#
,he rural mar0et ma$ 9e alluring 9ut it is not )ithout its 'ro9lems: =o) 'er ca'ita
dis'osa9le incomes that is halfthe ur9an dis'osa9le incomeK large num9er of dail$
)ageearners" acute de'endence on the 4agaries of the monsoonKseasonal consum'tion
lin0ed to har4ests and festi4als ands'ecial occasionsK 'oor roadsK 'o)er 'ro9lemsK
andinaccessi9ilit$ to con4entional ad4ertising media#,oda$" rural India is seen as the
most lucrati4e segment 9ecause com'anies across different sectors are )ooingthem to
su''ort their momentum of 9usiness gro)th#Rural mar0ets offer o''ortunities" )hich are
enormousand relati4el$ unta''ed# ,he$ 'resent tremendous 'ros'ects for com'anies to
sell their 'roducts and ser4ices#(or'oration across 4aried industr$ 4erticals are 9uc0ingu'
to address the rural 'otential demand# ,he attitudes"as'irations and demands of rural
consumers are 4er$different from other their ur9an counter'arts# (om'aniesare
connecting to this 9ase afresh and are together to caterto this mar0et effecti4el$ and
efficientl$# (om'anies resortto a num9er of strategies li0e re'ositioning of
9rands"re'ac0aging 'roducts and re-'ricing them" all )ith an e$eon rural )allets# ,he
o4erall mar0eting mi1 frame)or0 forrural mar0ets necessaril$ focuses around deli4er$
the right 'roduct" using 4alue for mone$ 'ricing" using effecti4emeans of 'romotion"
selecting the most a''ro'riatemethod of distri9ution and 9uilding long term
relationshi')ith the customer in order to sell their 'roducts
#
<o)e4er" the rural consumer is not unli0e his ur9ancounter'art in man$ )a$s# ,he more
daring MN(s aremeeting the conseBuent challenges of
AVAILABILITY A!!"R#ABILITY A$$%&TABILITY and A'AR%(%)). *T+e so,-alled
. As/.
.fforda9ilit$:
,he first challenge is to ensure afforda9ilit$ of the 'roductor ser4ice# Aith lo) dis'osa9le
incomes" 'roducts need to 9e afforda9le to the rural consumer" most of )hom are ondail$
)ages# Some com'anies ha4e addressed theafforda9ilit$ 'ro9lem 9$ introducing small
unit 'ac0s#@odre* recentl$ introduced three 9rands of (inthol" Cair@lo) and @odre* in
E%-gm 'ac0s" 'riced at Rs -E meants'ecificall$ for Madh$a 2radesh" 3ihar and 8ttar
2radesh- the so-called L3IM.R8H States#<industan =e4er" among the first MN(s to
realise the 'otential of IndiaHs rural mar0et" has launched a 4ariant ofits largest selling
soa' 9rand" =ife9uo$ at Rs 2 for E% gm#,he mo4e is mainl$ targeted at the rural mar0et#
(oca-(ola has addressed the afforda9ilit$ issue 9$ introducingthe returna9le 2%%-ml
glass 9ottle 'riced at Rs E# ,heinitiati4e has 'aid off: >ight$ 'er cent of ne) drin0ersno)
come from the rural mar0ets# (oca-(ola has alsointroduced Sunfill" a 'o)dered soft-
drin0 concentrate#,he instant and read$-to-mi1 Sunfill is a4aila9le in asingle-ser4e sachet
of 2E gm 'riced at Rs 2 andmultiser4e sachet of 2%% gm 'riced at Rs 1E#,he rural areas
continue to 'ose different t$'es ofchallenges" including understanding of the d$namics
ofrural mar0ets and strategies to su''l$ the 'roducts andsafet$ these consumers# ,he
consumers in rural areas are4alue-conscious and a lot sa44ier# ,he$ are )illing to 'a$for
a 'roduct if it )orth it# .fforda9ilit$ is thus critical tosuccess in rural mar0ets# .s -nano/
'aradigm is emergingin all segmentsK small stoc0 0ee'ing units (SD8)" lo) 'riced
'roducts are all ma0ing 4arious segment of 'roducts a lot more afforda9le to the rural
consumers"# Infact lo)er 'rices and small SD8s are the most commonstrategies ado'ted
9$ CM(@ com'anies to 'enetrate ruralmar0ets# ,he smaller SD8s are one of the
strategies tohel' increase 'roduct 'enetration" as trials )ould increasedue to a lo)er 'ut-
do)n 'rice# Smaller 'ac0s are moreafforda9le" so the$ offer consumers a change to tr$
out 'roducts 9efore graduating to a larger 'ac0# Most CM(@com'anies ha4e reduced
SD8 of soa's" sham'oos" 9e4erages" 9iscuits and e4en 9utter to 9oost consum'tionand
increase afforda9ilit$ for consumers#<8=/s initiated -o'eration 3harat/ to ta' rural
mar0ets 9$ 9ringing out lo) 'riced sam'le 'ac0ets of itstooth'aste# Cairness cream"
sham'oo" cream and other 'roducts#Cor 5a9ur" rural demand 0ee's on gro)ing at a fast
'ace#Initiati4e li0e lo) unit 'ac0s of (h$a)an'rash and 5a9ur.mla" and ne) 'roducts
such as .mla Clo)er Magichair-oil ha4e accelerated this gro)th momentum#.ccording
to a (hennai 9ased consumer 'roductscom'an$ (a4inDare" )hich ma0es N$le and
(hi0sham'oos and Caire4er Cairness (ream" go4ernment/s NR>@. has 'ut a lot of
mone$ in the hands of ruralconsumer" )hich is good ne)s for them# (a4inDare/s N$le
and (hi0 Sham'oos in Rs#1 'ac0s are among the(om'an$/s strongest 4olume dri4es# In
the same )a$"=2@ com'anies ha4e introduce small si7ed c$linders"ensuring that 'rice
remains in the afforda9le rangemar0ets 9$ reducing 'rice of their 'roducts#Dee'ing in
mind the rural )allet" the telecom giant"3harti .irtel had lo)ered its tic0ets si7es# Instead
ofRs#3% recharging cou'on 4alid for a month# It launched aRs#1% cou'on 4alid for 1%
da$s for the rural mar0ets#Idea (ellular" from the .#! 3irla @rou'" had alsointroduced
rural calling card that charged onl$ E% 'aisa 'er minute for a local call# (om'anies li0e
2hili's ande4en >4eread$ ha4e 9rought out ne) chea' lanterns to

,he - .s/ of Rural Mar0eting Mi1
(hintan Shah"
.ssit# 2rof#" 3hag)an Maha4ir (ollege of 3usiness .dministration" Surat" India
Renc$ 5esai"
I6( 2rinci'al" 3hag)an Maha4ir (ollege of 3usiness .dministration" Surat" India
.3S,R.(,
,he rural mar0ets in India ha4e gro)n si7e" range andso'histication in recent times#
8nder the changing Socio-economic scenario" the rural mar0ets ha4e great 'otentialities
in India and offer 9right 'ros'ects andattraction to the com'anies# Rural mar0eting is
confused)ith agricultural mar0eting 'articular em'hasis is 'lacedon the im'act of the
four ./s 'rinci'les on the ruraleconom$ and its 'artici'ants" namel$ farmers"
landlessla9ourers and mar0eting intermediaries# ,he mar0etinghad a 'ositi4e effect on all
these 'artici'ants through thecreation of 4ast mar0eting o''ortunities# ,he dri4ing
forceof this success )as :mar0et forces"; generating 4irtuousc$cles in the transition
mar0eting# .t the same time" the:a9sence of 9ad mar0eting 'olic$; is em'hasi7ed as a
0e$ for the success in the conte1t of India" )here e1cessi4einter4ention of 'ri4ate
com'anies li0e <#8#=" (.=!IN(.R> 2?R,>R .N5 @.M3=>" often resulted in
successof rural mar0eting in India# ,he Indian rural mar0et iso9ser4ed as a high 'otential
mar0et across the )orld# More than three-fourths of countr$/s consumers reside inrural
areas and more than half of the national income isgenerated 9$ them# 5ue to the glo9al
economic do)nturn"the com'anies are fe) facing slo)er ur9an sales" 'rom'ting them to
ma0e a rush to)ards rural India# ,hedo)nturn has not im'acted rural mar0ets in the same
)a$as ur9an mar0ets# =astl$ )e can sa$ that
Rural Markets are future battlegrounds. Keywords:
Rural mar0et" Socio-economic" .gricultural Mar0eting" 8r9an Mar0ets#

INTRODUCTION
,he rural mar0ets in India ha4e gro)n si7e" range andso'histication in recent times#
8nder the changing Socio-economic scenario" the rural mar0ets ha4e great 'otentialities
in India and offer 9right 'ros'ects andattraction to the com'anies# In fact" the rural
mar0ets aregreen 'astures for com'anies toda$" as the$ are gro)ingfaster as com'ared to
the ur9an mar0ets# Aith their hugesi7e and demand 9ase" the$ offer great o''ortunities to
themar0eters# More than three-fourths of countr$/s consumersreside in rural areas and
more than half of the nationalincome is generated 9$ them# 5ue to the glo9al
economicdo)nturn" the com'anies are fe) facing slo)er ur9ansales" 'rom'ting them to
ma0e a rush to)ards rural India#,he do)nturn has not im'acted rural mar0ets in the
same)a$ as ur9an mar0ets# Stagnant ur9an demand and relati4erural 'ros'erit$ are
attracting com'anies to the ruralmar0ets for selling their 'roducts and ser4ices# .'art
fromthe traditional agricultural income" go4ernment s'endingand infrastructure 'ro*ects
ha4e meant cash flo) in thesemar0ets# ,hus" the relati4e rural 'ros'erit$ is
fuellingdemand and" therefore" dra)ing com'anies to)ard them#,he 4illages" )hich )ere
once inconseBuential" are no)getting the attention of com'anies across different
sectors#.ll the ma*or industries in India are tilting to)ards ruralIndia as the Indian rural
mar0et is full of o''ortunities andhas seen im'ressi4e gro)th in recent $ears# ,oda$"
ruralconsumer has almost 9ro0en all the 're4ailing 9arriers#Momentous gro)th in
'urchasing 'o)er" im'ro4ement inliterac$ le4el" change in lifest$le" increasing
9randconsciousness" changing consum'tion 'attern"im'ro4ement in infrastructure
facilities and ra'id s'read ofcommunication net)or0 in rural areas ha4e 'resented
agro)ing 'otential of rural India for the com'anies# ,hecor'orate sector is" therefore"
increasingl$ loo0ing to)ardsthe rural consumers and fine-tuning their
mar0etingstrategies in order to 'romote their 'roducts and ser4icesin the rural areas#
C>.,8R>S ?C IN5I.N R8R.=M.RD>,S
=arge and Scattered mar0et:
,he rural mar0et of India is large and scattered in thesense that it consists of o4er +3
crore consumers fromE"F%"%%% 4illages s'read throughout the countr$#
Ma*or income from agriculture:
Nearl$ +% G of the rural income is from agriculture#<ence rural 'ros'erit$ is tied )ith
agricultural 'ros'erit$#
,raditional ?utloo0:
,he rural consumer 4alues old customs and tradition#,he$ do not 'refer changes#
5i4erse socio-economic 9ac0)ardness:
Rural consumers ha4e di4erse socio-economic 9ac0)ardness# ,his is different in different
'arts of thecountr$#
Infrastructure Cacilities:
,he Infrastructure Cacilities li0e roads" )arehouses"communication s$stem" financial
facilities are inadeBuate in rural areas# <ence 'h$sical distri9ution 9ecomes costl$due to
inadeBuate Infrastructure facilities#,he rural 9a7aar is 9ooming 9e$ond
e4er$oneHse1'ectation# .n estimated induction of Rs 1% 9illion inthe rural sector through
the go4ernmentHs ruralde4elo'ment schemes in the Se4enth 2lan and a9out Rs3%% 9illion
in the >ighth 2lan is also 9elie4ed to ha4esignificantl$ contri9uted to the ra'id gro)th in
demand#
R>.S?NS C?R 3??S, IN 28R(<.SIN@2?A>R ?C R8R.= C?=DS:
(om'anies across different segment from Maruti Su7u0i"<ero <onda" <industan
8nile4er" I,(" =@" Samsung" No0ia" Idea (ellular" 3harti .irtel etc# are all
mo4ingto)ards rural India to slo)do)n in ur9an demand in theface of the recent
de4astating glo9al do)nturn#(onseBuentl$" rural mar0ets are com'ensating for
ado)ntrend in ur9an sales# Rural India" )hich )asunnoticed for the 'ast se4eral $ears" is
no) at the centre ofattention of com'anies# Cor four consecuti4e $ears" there)as 'ositi4e
gro)th in rural @52" )hich am'lified thes'ending 'o)er of rural floc0s# ,he rural
econom$ alsogot a 9oost )ith go4ernment initiati4e li0e the farm loan)ai4ers" )age
'a$outs under the National >m'lo$ment@uarantees .ct and the am9itious 9harat
Nirman2rogrames for im'ro4ing rural infrastructure# More than% 'ercent increase in
su''ort 'rices of cro's o4er the lastfe) $ears has also enhanced the 'ros'erit$ of rural
India#,he follo)ing factors ga4e a 9oost 'urchasing 'o)er ofrural fol0s:

Growing Investments:
5irect go4ernment e1'enditure in agriculture has)itnessed a shar' rise o4er the last fi4e
$ears" there9$ena9ling 9etter farm credit and creation of su''ortinfrastructure li0e
irrigation# .s a result" the countr$ has 9een a rise in the ca'ital formation in agriculture
sector")hich is e4ident in increase 'ro'ortion of irrigated landand higher 'ro'ortion of
fertili7ers and 'esticides# .'artfrom in4estment in agriculture" the go4ernment
isem'hasi7ing on de4elo'ing infrastructure li0e roads"housing" telecommunication"
electrification and irrigationunder the national 'ro*ect called 3harat Nirman Io*ana#,hus"
the o4erall de4elo'ment of rural India assisted inincreasing the 'urchasing 'o)er of rural
'eo'le" 9esidesraising the Bualit$ of rural life# In a )a$" this is good ne)sfor com'anies
)ho are 4enturing into the hinterland tota0e their mantle of gro)th for)ard# ,hus" there
is amar0ed increase in the rural income due to agrarian 'ros'erit$# .ll this has left rural
'eo'le richer and moream9itious" ena9ling the com'anies to rush in )ith s'ecialschemes
and tailor-made 'roducts for the highl$ 'ricesensiti4e rural mar0ets# (hange has also
9een 9roughta9out 9$ the 4ast im'ro4ement in rural road connecti4it$"from less than %
'ercent in 2%% to at least J% 'ercentconnecti4it$ 9$ the end of 2%11# <ence" there is
increasedcontact of rural 'o'ulace )ith their ur9an counter'arts dueto de4elo'ment of
trans'ort and )ide communicationnet)or0#

I01le0entat2on of (at2onal Rural EmployeeGuarantee Act:
,he 9asic 'ro9lem in rural areas is lo) income of rural 'eo'le" )hich is also seasonal in
nature# ,o address thisissue" the go4ernment 'ut forth the national Rural>m'lo$ee
@uarantee .ct (NR>@.)" )hich guarantees1%% da$s of em'lo$ment to e4er$ adult in
rural areas e4er$$ear# Most of the *o9s are 'ro4ided during the non-farmingseason and"
therefore" su''lement famil$ income )ithoutu'setting the farming c$cle# ,he
im'lementation of this.ct is a significant reason for surge in rural income and
itdecreased the de'endence on farm income to a largee1tent# ,he increased income of
rural 'eo'le has caused as'urt in demand for consumer non-dura9le and dura9le 'roducts#
In fact" rural mar0ets ha4e turned out to 9eattracti4e to com'anies for mar0eting their
'roducts#

Increasing In .gro# (ommodit$ 'rice ,rends:
.fter the green re4olution" ur9an consumers gained 9$)a$ of chea' food" 9ut this
affected food grain 'rices andmade agriculture an economicall$ un4ia9le occu'ation#,his
trend has ho)e4er 9een re4ersed o4er the last fe)$ears as the consum'tion of es'eciall$
high-end foodgrains li0e )heat#" rice and 'luses has gone u' faster thanthe gro)th in
su''l$" 9uilding u' underl$ing 'ressure on 'rices# Most of the agro 'roducts )itnessed
rice in 'ricesin the last cou'le of $ears" )hich are currentl$ at nearl$dou9le than 2%%+
'rices# ,he demand for different 'roducts and ser4ices is thus" 'ulling u' in rural areas
dueto increase in 'urchasing 'o)er of rural fol0s#

Increase In =iterac$ .nd >ducation:
Rise in literac$ and educational le4el among rural 'eo'leand the resultant inclination to
lead so'histicated li4es alsohas a 9earing in 9oosting their 'urchasing 'o)er# ,hus"there
e1ists tremendous 'otential in rural India and thecom'anies are coming for)ard to
harness it for the 'ros'ects of mar0eting their 'roducts and ser4ices# ,hus"ma0ing a dash
to the hinterland is ena9ling the com'aniesto ma0e u' for the sluggish ur9an demand#

Insulation Crom ,he >conomic Slo)do)n:
,he rural and small to)ns ha4e remained insulated fromthe economic slo)do)n as
em'lo$ment o''ortunities andincome streams ha4e gro)n steadil$ )ith
consistentdemand for goods and ser4ices# Since the 'ercentage ofsalaried )or0ers in rural
India is a third of the ur9an andthat too" mostl$ in go4ernment ser4ices" there is hardl$an$
im'act 4isi9le in terms of *o9 la$offs" e1ce't in select 'oc0ets of the countr$# <igher
dis'osa9le sur'lus amongconsumer in these mar0ets is thus resulting in smart 9u$ing and
creating a lot of 9usiness o''ortunities for the com'anies to ma0e a full-throttle fora$
into the ruralmar0ets#
T#e %A Approac#
,he rural mar0et ma$ 9e alluring 9ut it is not )ithout its 'ro9lems: =o) 'er ca'ita
dis'osa9le incomes that is halfthe ur9an dis'osa9le incomeK large num9er of dail$
)ageearners" acute de'endence on the 4agaries of the monsoonKseasonal consum'tion
lin0ed to har4ests and festi4als ands'ecial occasionsK 'oor roadsK 'o)er 'ro9lemsK
andinaccessi9ilit$ to con4entional ad4ertising media#,oda$" rural India is seen as the
most lucrati4e segment 9ecause com'anies across different sectors are )ooingthem to
su''ort their momentum of 9usiness gro)th#Rural mar0ets offer o''ortunities" )hich are
enormousand relati4el$ unta''ed# ,he$ 'resent tremendous 'ros'ects for com'anies to
sell their 'roducts and ser4ices#(or'oration across 4aried industr$ 4erticals are 9uc0ingu'
to address the rural 'otential demand# ,he attitudes"as'irations and demands of rural
consumers are 4er$different from other their ur9an counter'arts# (om'aniesare
connecting to this 9ase afresh and are together to caterto this mar0et effecti4el$ and
efficientl$# (om'anies resortto a num9er of strategies li0e re'ositioning of
9rands"re'ac0aging 'roducts and re-'ricing them" all )ith an e$eon rural )allets# ,he
o4erall mar0eting mi1 frame)or0 forrural mar0ets necessaril$ focuses around deli4er$
the right 'roduct" using 4alue for mone$ 'ricing" using effecti4emeans of 'romotion"
selecting the most a''ro'riatemethod of distri9ution and 9uilding long term
relationshi')ith the customer in order to sell their 'roducts#
<o)e4er" the rural consumer is not unli0e his ur9ancounter'art in man$ )a$s# ,he more
daring MN(s aremeeting the conseBuent challenges of
AVAILABILITY A!!"R#ABILITY A$$%&TABILITY and A'AR%(%)). *T+e so,-alled
. As/.
Affor!a&ility:
,he first challenge is to ensure afforda9ilit$ of the 'roductor ser4ice# Aith lo) dis'osa9le
incomes" 'roducts need to 9e afforda9le to the rural consumer" most of )hom are ondail$
)ages# Some com'anies ha4e addressed theafforda9ilit$ 'ro9lem 9$ introducing small
unit 'ac0s#@odre* recentl$ introduced three 9rands of (inthol" Cair@lo) and @odre* in
E%-gm 'ac0s" 'riced at Rs -E meants'ecificall$ for Madh$a 2radesh" 3ihar and 8ttar
2radesh- the so-called L3IM.R8H States#<industan =e4er" among the first MN(s to
realise the 'otential of IndiaHs rural mar0et" has launched a 4ariant ofits largest selling
soa' 9rand" =ife9uo$ at Rs 2 for E% gm#,he mo4e is mainl$ targeted at the rural mar0et#
(oca-(ola has addressed the afforda9ilit$ issue 9$ introducingthe returna9le 2%%-ml
glass 9ottle 'riced at Rs E# ,heinitiati4e has 'aid off: >ight$ 'er cent of ne) drin0ersno)
come from the rural mar0ets# (oca-(ola has alsointroduced Sunfill" a 'o)dered soft-
drin0 concentrate#,he instant and read$-to-mi1 Sunfill is a4aila9le in asingle-ser4e sachet
of 2E gm 'riced at Rs 2 andmultiser4e sachet of 2%% gm 'riced at Rs 1E#,he rural areas
continue to 'ose different t$'es ofchallenges" including understanding of the d$namics
ofrural mar0ets and strategies to su''l$ the 'roducts andsafet$ these consumers# ,he
consumers in rural areas are4alue-conscious and a lot sa44ier# ,he$ are )illing to 'a$for
a 'roduct if it )orth it# .fforda9ilit$ is thus critical tosuccess in rural mar0ets# .s -nano/
'aradigm is emergingin all segmentsK small stoc0 0ee'ing units (SD8)" lo) 'riced
'roducts are all ma0ing 4arious segment of 'roducts a lot more afforda9le to the rural
consumers"# Infact lo)er 'rices and small SD8s are the most commonstrategies ado'ted
9$ CM(@ com'anies to 'enetrate ruralmar0ets# ,he smaller SD8s are one of the
strategies tohel' increase 'roduct 'enetration" as trials )ould increasedue to a lo)er 'ut-
do)n 'rice# Smaller 'ac0s are moreafforda9le" so the$ offer consumers a change to tr$
out 'roducts 9efore graduating to a larger 'ac0# Most CM(@com'anies ha4e reduced
SD8 of soa's" sham'oos" 9e4erages" 9iscuits and e4en 9utter to 9oost consum'tionand
increase afforda9ilit$ for consumers#<8=/s initiated -o'eration 3harat/ to ta' rural
mar0ets 9$ 9ringing out lo) 'riced sam'le 'ac0ets of itstooth'aste# Cairness cream"
sham'oo" cream and other 'roducts#Cor 5a9ur" rural demand 0ee's on gro)ing at a fast
'ace#Initiati4e li0e lo) unit 'ac0s of (h$a)an'rash and 5a9ur.mla" and ne) 'roducts
such as .mla Clo)er Magichair-oil ha4e accelerated this gro)th momentum#.ccording
to a (hennai 9ased consumer 'roductscom'an$ (a4inDare" )hich ma0es N$le and
(hi0sham'oos and Caire4er Cairness (ream" go4ernment/s NR>@. has 'ut a lot of
mone$ in the hands of ruralconsumer" )hich is good ne)s for them# (a4inDare/s N$le
and (hi0 Sham'oos in Rs#1 'ac0s are among the(om'an$/s strongest 4olume dri4es# In
the same )a$"=2@ com'anies ha4e introduce small si7ed c$linders"ensuring that 'rice
remains in the afforda9le rangemar0ets 9$ reducing 'rice of their 'roducts#Dee'ing in
mind the rural )allet" the telecom giant"3harti .irtel had lo)ered its tic0ets si7es# Instead
ofRs#3% recharging cou'on 4alid for a month# It launched aRs#1% cou'on 4alid for 1%
da$s for the rural mar0ets#Idea (ellular" from the .#! 3irla @rou'" had alsointroduced
rural calling card that charged onl$ E% 'aisa 'er minute for a local call# (om'anies li0e
2hili's ande4en >4eread$ ha4e 9rought out ne) chea' lanterns to
good# 3oth the telecom com'anies-3harti .irtel and Idea(ellular a'art from 'ro4iding
ser4ices message in the locallingo of the su9scri9er" also 'ro4ide alerts on commodit$
'rices at the nearest )holesale mar0et and e4en >nglishlanguage tutorials# ,he most
'o'ular 4alue-add ser4ices ismusic" es'eciall$ in the local dialect of the su9scri9er#,ata
(hemicals ne)l$ launched )ater 'urifier" S)ach"targets the lo)er-income grou' in rural
India and aims toresol4e one of the crucial issues 'laguing India" i#e#" accessto clean drin0
)ater# ,ata chemicals 'lans to sell S)ach asfast-mo4ing-consumer-goods (CM(@)
studies re4eal thatFE 'ercent of the rural 'o'ulation does not ha4e access to 'ure drin0ing
)ater leading to high incidence of )ater 9orne diseases and ,ata @rou' is going to
address thisissue through ,ata S)ach" )hich is manufactured usingnano technolog$#
(om'anies li0e Nestle and@la1oSmithDline consumer <ealthcare (@SD) too
ha4elaunched 'roducts es'eciall$ for rural mar0ets# S)issCoods (om'an$K Nestle and
also announced the launchedof a lo)-'riced 4ariant of Maggi noodles under its
flagshi'Maggi Instant Noodles" aimed at meals for the 9ottom of '$ramid consumers#
,he ne) Maggi 4ariants ha4e 9eende4elo'ed es'eciall$ for the rural and semi-ur9an
mar0etsin order to 'ro4ide lo)-cost fortified meals for consumers#Ahile -Rasile (ho)/ is
gra4$ noodles at Rs# " -MaggiMasala Magic/ is a taste enhancer in a single use sachet
'riced at Rs# 2 each# In some )a$" @la1oSmithDline isrolling out -.sha/" a mil0 food
drin0 in the line of<orlic0s for rural consumers in .ndhra 2radesh#@la1oSmithDline/s
-.sha/" )hich is % 'ercent chea'erthan the regular 4ariant of <orlic0s" is the first
'roductfrom the 8D 9ased MN( designed for rural consumers#(oca (ola has 9egun
selling a 'o)er-9ased fortified 9e4erage called -!itigo/ in 1J gm sachets at Rs#2#E%
eachacross 4illage in ?rissa# ,he (om'an$ has tied u' )ith N@? and micro finance
institution 3ISA. in ?rissa forthe same#
A'ARENE$$:
Mass media is a9le to reach onl$ to EFG of the rural 'o'ulation# (reating a)areness then"
means utili7ingtargeted" uncon4entional media including am9ient media#Cor generating
a)areness" e4ents li0e fairs and festi4als"<aats" etc#" are used as occasions for
9randcommunication# (inema 4ans" sho'-fronts" )alls and )ellsare other media 4ehicles
that ha4e 9een utili7ed to increase 9rand and 'ac0 4isi9ilit$# inno4ati4e media used 9$
'ersonal )ash li0e =u1 and =ife9uo$ and fa9ric )ashitems li0e Rin and Aheel# Idea )as
to ad4ertise not onl$ atthe 'oint of 'urchase 9ut also at the time of consum'tion#Aith
large 'arts of rural India inaccessi9le to con4entionalad4ertising media - onl$ 1 'er cent
rural households ha4eaccess to ,! - 9uilding a)areness is another challenge#<o)e4er"
the rural consumer e1'ressions differ from hisur9an counter'art# ?uting for the former is
confined tolocal fairs and festi4als and ,! 4ie)ing is confined to thestate-o)ned
channels# (onsum'tion of 9randed 'roducts istreated as a s'ecial treat or
indulgence#<industan =e4er relies hea4il$ on its o)n com'an$-organised media# ,hese
are 'romotional e4ents organised 9$ stoc0ists# @odre* (onsumer 2roducts" )hich is
tr$ing to 'ush its soa' 9rands into the interior areas" uses radio toreach the local 'eo'le in
their language#(oca-(ola uses a com9ination of ,!" cinema and radio toreach E3#+ 'er
cent of rural households# Since 'rice is a0e$ issue in the rural areas" (oca-(ola
ad4ertising stressedits LmagicalH 'rice 'oint of Rs E 'er 9ottle in all media#=@>lectronics
uses 4ans and road sho)s to reach ruralcustomers# ,he com'an$ uses local language
ad4ertising#,he 0e$ dilemma for MN(s eager to ta' the large andfast-gro)ing rural
mar0et is )hether the$ can do so)ithout hurting the com'an$Hs 'rofit margins# In case
ofnestle" com'an$Hs 'roduct 'ortfolio is essentiall$ designedfor ur9an consumers )hich
cautions com'anies from 'lunging headlong into the rural mar0et as ca'turing
ruralconsumers can 9e e1'ensi4e#(reating 9rand a)areness through a''ro'riate media
is4er$ im'ortant for the com'anies to gain acce'ta9ilit$among rural fol0s# ,he (or'orate
Sector has also utili7edtraditional arts of India 4er$ effecti4e in its a)arenesscam'aigns
in rural areas# Cor its entr$ into .ndhra2radesh/s interior" telecom com'an$" Idea (ellular
usedthe fol0lore art form of 3urra Datha (a tra4elling theatretrou'e) to create 9rand
a)areness# Modern media such astele4ision has also in4aded rural India 9$ reaching
e4er$noo0 and corner of the countr$# ,ele4ision has reduced theresistance to change 9$
creating ne) as'irations anda)areness for rural fol0s" there9$ increasing theacce'ta9ilit$
of most 'roducts in rural areas# ?nceacce'ta9ilit$ is esta9lished and lo$alties are formed"
thefame of the 'roducts s'read li0e )ildfire through )ord-of-mouth" )hich in fact is the
most effecti4e means of 'romotion in rural India# !arious 9rands ha4e le4eragedon the
tele4ision 'enetration in rural areas# ,he -@old2lus/ *e)eller$ 9rand 9$ ,ata @rou' is a
fascinatinge1am'les of the 9rand addressing the non-metro *e)eller$culture# ?n rural
India" gold *e)eller$ is used as a reser4estore and gi4en the adulteration in goldK ,ata seal
of goodfaith is ta0ing the 9rand far and )ide# ,he telecom sectorhas also focused its
strategies to)ards ma0ing seriousinroads into rural India# ,he rural thrust has not
onl$hel'ed the sector esca'e the slo)do)n" 9ut also allo)ed itto flourish# ,he telecom
sector has car4ed a 'rominentmodel that is shifting focus to rural areas as ma*orit$ of the
'la$ers are e1'anding their rural infrastructure 9ase for 9oosting organic gro)th# ,elecom
(om'an$" ,ata,eleser4ices has 'lanned a fresh mar0eting strateg$ ofgoing door-to-door
and e4en in4ol4ing gram 'ancha$ats toim'ress u'on 'eo'le" the 9enefits of mo9ile
tele'hon$#,he CM(g com'anies are also 4enturing into the rural

mar0ets )ith their inno4ati4e strategies to create M@am9le" (olgate" @odre* and Maricos
are gearing u' for 9igger ad4ertisement and sales 'romotion cam'aignstargeted at rural
mar0ets to create 9rand a)areness#.utomo9ile sector is also gi4ing e1tra attention to
ruralmar0eters as a considera9le chun0 of their 'roduct linesuch as commercial 4ehiclesK
tractors" motorc$cle etc# arecatering s'ecificall$ to the demand# .utomo9ilecom'anies
are also 9eing assisted in this rural 'ush 9$their gro)ing 'artnershi's )ith 'u9lic sector
9an0s" all of)hich en*o$ a good 'resence in the rural 9elt and ha4e aread$ list of 'otential
customers# Maruti Su7u0i rolled outa s'ecial cam'aign for rural areas 9$ ro'ing in
2ancha$atmem9ers and 'rimar$ health centre )or0ers# Recogni7ingthe 'otential of rural
India" the com'an$ <ero <onda hasalso esta9lished a dedicated -rural 4ertical/ running
underthe theme -<ar @aaon" <ar .angan/ (>4er$ 4illage" e4er$house)" to 'enetrate
unta''ed rural and uncountr$ mar0etsin India# ,he (om'an$ has also de'lo$ed E%%
salese1ecuti4es )ho meet o'inion leaders and tal0 a9out <ero<onda# (onsumer
electronics com'an$" Samsung had alsorolled out its -5ream <ome/ road sho)" )hich
)as to 4isitJ small to)ns/ in1%% da$s in an attem't to increase 9randa)areness of its
'roducts# ,he com'an$ also has 'lans toe1'and its sales channel 9$ 2E-3% in rural India#
CONCU$ION
2rolonged ur9an slo)do)n has dri4en the com'aniesacross different segments to ma0e
fora$ at the 9urgeoningrural mar0ets to fuel their gro)th engine# Rural India hasso far
9een insulated from the slo)do)n and a largeunta''ed mar0et e1ists there# ,here is a
good 'otential inthe rural mar0et" not onl$ for the consumer dura9le 'roducts" 9ut also for
CM(@ 'roducts# Saturation and alsoslo)do)n in the ur9an mar0ets" along )ith lo)
'enetration of consumer goods in rural areas is also 9ig 9ait for com'anies to rush
to)ards India/s si1 la0h odd4illages# ,here is a 9eginning of rural mar0et 9oom
andcom'anies across different sectors ha4e caught the ideathat rural mar0ets cannot 9e
ignored and instead" the$ 9eser4ed as a 'riorit$# Increasing rate of literac$" increase
inlonge4it$" economic de4elo'ment of rural areas and hugede4elo'ment in standard of
li4ing of the rural 'eo'le" all 'ro4ide mar0eting o''ortunities for com'anies to sell their
'roducts and ser4ices in rural areas# Curther" the gro)th inrural India and the
@o4ernment/s commitment for thede4elo'ment of rural region )ill sustain and strengthen
the 9oom in the hinterland# In fact" rural mar0ets ha4eunloc0ed ne) fronts for the modern
mar0eters# (om'aniesacross are no) a''roaching rural mar0ets )ith attracti4eincenti4e
to ensure targeted sales# ,he income of rural 'o'ulation in India and their 'urchasing
'o)er hasaugmented in recent $ears# ,he com'anies ha4e toascertain their needs and
desire in order to e1'loit 4ast 'otential of rural mar0ets )ith suita9le mar0etingstrategies#
<o)e4er" the rural mar0ets are 9roadl$scattered and heterogeneous# ,here is insufficient
ruraltrans'ortation" inefficient communication and inadeBuate)arehousing facilities#
?4erall 9ac0)ardness" 'referencefor con4entional )a$ of life of the rural 'eo'le etc#
aresome such factors" )hich must 9e tac0led a'tl$" as theseha4e 9een hindering the
gro)th of com'anies in the ruralregions# (om'anies ha4e to find )a$s to cater to the
ruralmar0ets 9$ ta0ing into account the - .s/" i#e#afforda9ilit$" a)areness" a4aila9ilit$
and acce'ta9ilit$#