In Focus : Rural Marketing

A Special Section on Product Development, Marketing, Distribution and Promotion in Rural India Rahul Mirchandani, ARIES AGRO-VET INDUSTRIES LIMITED

Rural Marketing - An Overview
It is well accepted that vyapaar (business) is apaar (boundless). An ideal society and its foundation includes moving from the traditional chaturalaya to a panchalaya. The chaturalaya had a devalaya (Temple) for spiritual needs, a vidyalaya (School) for education needs, a granthalaya (library) for knowledge needs and a vaidyalaya (dispensary or hospital) for health needs. This version of the foundations of a society needs to change into a panchalaya, by including the all important vikralaya (shop or sales outlet). India’s Rural Market has 170 million people. Furthermore, this market is non- homogeneous and the aggregate size is very large. However, individual subsets of this market tend to be rather small and disparate. Geographical, demographical, statistical, logistical differences are very apparent. Positioning and realities regarding the potential of each of these market segments differ and lie at the very core of forming the strategy for the rural markets. In the past few years, disposal income in these markets has risen very sharply. However, the market still remains largely unexploited and at most times potential markets need to be found and at times created. Such creation of demand needs efficient management of the supply chain. To increase market share, behavioural change needs to be at the forefront of any strategy. It is seen that choice made by a villager is based on:• • • • • Price Availability Neighbour's use Quality, and Advertising monthly basis. It is also observed that the wife buys 45% of the time, the husband buys 35% of the time, while joint purchases are made only on 19% occasions. Due to the diversity of this market, the traditional marketing philosophy of planning globally for all markets is not applicable. Marketers need to think and plan locally and also act locally. This becomes very difficult considering that Rural India has 3.7 million shops, with an average of six shops per village. The penetration of this market is not sustained and uniform. Infact, studies show that market penetration is rather sporadic. The market is also seeing the benefits and ills of liberalisation. Foreign competition is raising its head in areas of quality, price and efficient delivery of goods. It is seen that rural consumers are not looking only at the lowest price but they are looking at maximum value. It is the seller who fixes the price. However, it is the buyer who looks at value. To put it in line with Kauntilya’s Arthashastra, "If the buyer sees that your product has pramaana (quality), samayana (timely availability) and seva (service/utility), then the moolyam (value) of the product or service becomes amoolyam (priceless). The British Prime Minister Mrs. Margaret Thatcher has also stressed the importance of quality when she said in one of her famous speeches “I am a daughter of a grocer. So I know that if the goods are good then the customers come back. If the goods are not good, then the goods come back”. The Rural market is buoyant. It is fast changing from a seller's market into a buyer's market. Government expenditure in the current 5 year plan on Rural India has increased to 60,000 crores. Further, every economist and marketer believes that social development, economic development and market development are all linked. Corporate India believes that there will be a Resurgent India but “for this, the green revolution must become a sustainable ever green revolution”. The gap between the rural and urban areas in terms of consumption is fast closing. The face of agriculture is changing from dry land and irrigated

The buying behaviour is 55% on a cash basis, 21% on credit and 24% surprisingly still exists as barter trade. Another feature is that the rural consumer enjoys shopping, mainly due to the fact that they look at striking at a good bargain. Close to 81% of rural consumers buy only after bargaining. 41% shop daily, 43% shop weekly and only 9% buy on a


agriculture into high-tech and low-tech agriculture. There is therefore a need to reprioritise, segment and activise rural markets. The aspirants are becoming climbers showing a sustained economic upturn as purchasing power is increasing in the rural markets. The proportion of very rich has increased five- fold. With these changes, new concepts need to be evolved. Any macro-level strategy for these markets should focus on availability, accessibility and affordability. Constant scanning and sieving of ideas and plans is essential at all times. Focussed attention needs to be paid to market research that goes on to reduce the uncertainly in dealing with these markets. More specifically, in relation to rural areas, demand is seen to a very highly price elastic. To break the price barrier is essential. Only this can keep the grey area local brands in check. A clear distinction needs to be made with regard to the reality versus the image of rural India. If such a distinction is not made, we will be unable to distinguish between the serpent and the rope and the rope and the serpent. For example, electricity has been made available to quite a large number of villages as compared to a few years ago. However, the reality is that much of this electricity, if not all of it, goes into powering pump sets and not to the households. Unless, such realities are understood, strategies can never be successful. Rural India is fast becoming a one stop shop. Demand is seasonal and credit arrangements hold the key to success. Another major feature is that point of purchase and point of contact material go a long way in creating product acceptance. This is because, the rural consumer likes to feel, hear and touch a product before deciding to buy. A study revealed that the average rural consumer takes approximately 2 years to decide on buying a watch ! He will not do so unless he is totally convinced that he is getting value for money. In terms of promotion, the use of local idioms and colloquial expressions are an excellent way to strike a rapport with a consumer and must be borne in mind when developing media plans and public relations programmes. No high voltage publicity is required. The rural consumer is soon as very down to earth but equally discerning and marketers need to step into the shoes of the rural folk while creating product campaigns. Every salesperson that enters the rural market must do his marketing activity with vidya (knowledge), shraddha (devotion to duty) and above all, knowledge of the local factors and external environment.

There is also a need to realise that the dealer is the company's "unpaid" sales force. It is essential to educate and involve him as he is the local company representative and is the only member in the channel of distribution who is in direct contact with the final consumer. The dealers' feedback needs to be obtained as the direction for future strategy emanates here. At all times, RELATIONSHIP with the customer is all important. This strong bond needs to be created with every consumer even in the remotest village and the smallest town. Marketing in Rural India is undoubtedly a long-haul exercise and one that involves great expense. Only those with a strong mind, a tough heart and stiff hands will survive. It is observed that the three C’s of Competence, Competitiveness and Customer orientation help a marketer understand the reality, the rightness and the optimum levels of utilisation of resources that are required to achieve success. Furthermore, the 3 I’s of Image, Initiative and Innovation ensure that short term gains get translated into long term rewards. While formulating any strategy therefore, the use of drishti (sight) to understand the problem and shrishti (insight) to look into deeper aspects of the problem are the starting point to develop the needed Insight and Foresight required to formulate a marketing plan. Training must receive a high priority and retraining is even more important. This is required to debrief the sales force of the old ways of doing things and transform the selling behaviour into that which is required at present. There is no doubt that divides do exist between urban and rural markets. However, with a silent revolution that has already begun, a seamless integration of rural and urban India is obvious. Once this happens the gulf that divides the two markets will become bridges. For this, change needs to be engaged and managed. Once this happens, there is no limit to the growth of rural India. Product life cycles as are becoming shorter and these are having their impact on company life cycles. Thus for any company and its products to move into next millennium with confidence, allegiance to the classic American P-A-L Principle of Partnership - Alliances - Linkages is a basis for survival. Enhancement of knowledge and inter personal skills is specifically required to share the rewards of prosperity with posterity.


Rural Communication and Advertising
It is indeed surprising that in the year 1997 headlines of perhaps every marketing journal and business magazine screamed “Rural markets, the future is now!” Today in 1999, once again the headlines say "The Future lies in Rural India!" In 1999, we now have to comprehend where our markets are - Rural ? Semi Urban ? Semi Rural ? Urban Hinterland ? District Head Quarters ? Taluka Headquarters ? Village agglomerations? Where is it that the classic Pareto's 80:20 ratio tends towards ? In other words, where is that we receive 80% of our business from and where does the remaining 20% come from ? Today's buzzword is rural “mass” markets. Such a concept can never be realized in practice. There are a lot of barriers that militate against homogenous media and message delivery. These barriers stem from the fact that rural markets vary immensely in terms of tastes, habits and preferences leading to different expectations of every segment of the population. The classic conundrums of reach and coverage of the media are shattered. Marketers need to factor in blackout times for electricity and fugitive community sets. In all this first hand experiential learning is essential. Equally important are market visits to the dealers. Without such first hand knowledge, we would have never known that Duliajan, a village in the NorthEast had videos at least a quarter of a century before Bombay had them. This village was a silent wage island. Similarly, Chindwara a village in M.P. had built antennas that 20 years ago were considered strange but could catch TV signals including the BBC and PTV - way before India came across the cable TV revolution. In the words of a noted Economist, “By some means, India is an economic giant - one of the world’s 12 largest industrial economies - a country that has everything from off-shore drilling to satellite launching”. Considering this, it is very important for rural marketers to search and look for wage islands of prosperity hidden amongst India’s 6,30,000 villages. Importance of the 'trade' as a medium Intermediaries are the key to rural distribution. If the intermediary understands and is constantly reminded about your product, then the end user will not be allowed to forget. The companies must reinforce this highly effective medium and use all their innovation and money to develop more dramatic point of sale and point of contact material. This becomes all the more important when in rural India, more often than not, the overlap between the product categories sold in a single outlet in tremendous. For instance, a store may call itself as a grocery store but will stock everything from groceries to vegetables to fertilizers and may at times even stock medicines. In such cases, the point at which the customer actually comes in contact with a product may not be the point at which the sale is effected. Several creative communication media have been used by various companies to tackle the problem of having to use visual communication and non-verbal communication to reach the rural audience. This is required because a large proportion of the rural population cannot read or write. Alliances with cottage industries, dharmsalas, panchayats and police stations for advertising have also helped immensely. In rural India, experience has proved time and time again that word of mouth is the key influencer. Mandi and Mela magic - it works !! At last count, India witnessed over 50,000 melas. Of these 25,000 meals are held to signify religious, cultural festivals as well as local fairs and events. On an average, visitors at these melas spend between Rs. 5,000 to Rs. 50,000 a day. For example, 3 lakh people visited the annual mela at Navchadi which lasts for 7 days in Meerut. The largest such mela is the Maha Kumbh Mela which is visited by an average of 12 crore people. There is however, a caveat when an organization is considering using mela for marketing their products. Is the audience at this mela fit for promotion of the product at hand ? What are the psychographics of this audience ? What is the motivational and behavioural impetus that brings visitors to each of these melas. On considering these questions, it has been observed that melas are fit to generate product exposure, package familiarity, brand reminder and word of mouth. However, for products that need concept marketing and those that have high prices, such melas are not suitable promotion media. This is because the time and the mood of the people that visit these melas is not right to digest technical information or for making large purchases. People come to melas to have a good time and are not reminded of such high technology or high priced products when they return home. In the words of Mr. Neville Gomes, Managing Director of Multimedia Aquarius,


promotion at melas is like a “one night stand”. There will be no reminder later. Thus, a large amount of qualitative judgment is indeed in planning promotions at melas by media planners. Trends in Rural Markets Studies presented at the Seminar shattered some common urban beliefs about Rural markets. These need due consideration while planning market strategies. • The joint family is NOT the standard unit. Nuclear families are the rule rather than the exception. In poor households, it is seen that 71% of households are nuclear families. The joint family influence increases as affluence increases. Even then, only 56% of affluent families live in joint families. • Women are not housebound in rural India. 36% of women work outside the house either full or part time. This figure is as high 50% in West India and 45% in South India going down to 28% in the North and 21% in the East of the country. • Rural India is not as illiterate as expected. 3% of 1,066 lakh rural households have at least one graduate. 16% have atleast one member who has passed SSC, HSC levels. Keeping these figures in mind, Rural India has 5 times the population of Singapore and a little less than the population of Australia who have already attained minimum educational qualifications. Strategies for Rural markets 1. Focus beam strategy Marketers can aim to penetrate the rural outback by carrying the campaign planning to micro levels. This would involve moving from planning for a region to planning for a State or district head quarters, or taluka headquarters or even to the level of rural agglomerations. In fact, the deeper you go, the more successful and focussed your strategy will be. 2. Pincer communication grid In this form of strategy, a company can take Talukas or Districts on a map and decide on a minimum population cut off per area to be covered. Once this is done, concentric circles can be drawn on the map. A media plan can be made for each concentric circle thus plotted. Initially, focus should be laid on the innermost circle. Because, word of mouth is a powerful medium, the message delivered here will trigger responses even in surrounding talukas. Indeed “Rural India talks and travels a lot”. 3. Innovation -

Innovative media must be used in order to deliver "double-duty" messages. These are messages in which more than one job is done using the same message and different responses are generated at different localities or with different audiences. 4. Monitoring Publicity using press campaigns or Point of contact material can be monitored by issuing a direct coupon or response coupon along with the message that readers of the message can be induced to return. In case of van campaign, a systematic taluka itinerary must be formulated including a house by house record format which includes travel schedule, area covered and publicity material distributed. It must also contain reports of audience feedback. Research and media feedback forms must be developed and regularly used. At all times, local campaigns must proceed with required validation and the local supervisor should ensure that interactivity is maintained at all times. Role of Technology In today’s information era, it is very important for companies to wise-up on emerging technologies. It has in fact become a medium to attract larger audiences for product demonstration. Technology must be used to prepare a database of customers and their requirements. The use of video using mobile vans and even large screen video walls at events can be arranged. Farmers have a lot of money at certain points of the year. Banks that begin issuing debit cards instead of credit cards will certainly increase consumption expenditure in the villages. The cellular phone is today seen as a modern day bioscope. Many big traders in Rural India are seen using these on a regular basis to keep abreast with their businesses. Market mapping is being done on a regular basis by media planners and by Government agencies and can be extremely useful while planning sales territories and promotional efforts. More importantly, considering the importance of point of sale and point of contact material, digitised image printing does wonders to improve the quality of a company's literature, posters, banners and similar other promotional aids. In the words of J.Krishnamurthy “ The only way to solve your problems is to go beyond thought, beyond knowledge, beyond time - TO ACHIEVE FREEDOM FROM THE KNOWN"


Product Marketing Strategies for Rural India
12.2% of the world lives in Rural India. Put in a different context, this works out to 1 in 8 people on Earth. The population of India is seen as India’s biggest economic problem. However, for marketers, this very same population turns into their biggest opportunity. This is because, these close to one billion people consume everything. Further, 1.2 million users are added every month to India’s population. This is indeed a marketing man’s dream. Come to Rural Country !!! India’s markets are fast changing. In the words of Rama Bijapurkar, India is moving from being two Indias (Rural and Urban) to many Indias. Mr.D.Shivkumar, Marketing Manager, Hindustan Lever Ltd., says "The classical distinction between rich and poor, urban India and rural Bharat is changing to many shades of rich, the not so rich, the not so poor and the poor. This opens tremendous number of opportunities to which companies need to understand to tailor make their offerings. According to the latest Census, the consumer classes in India are divided into 5 groups namely the very rich (annual income greater than Rs.2,15,000), the consuming class, climbers, aspirants and destitutes (annual income below Rs.16,000). Rural India’s distribution of these consuming classes is expected to radically change by 2006 to 2007. The dramatic shifts to come are seen in the table below:The major question that comes up is whether “There really is a mythical middle class”. Most studies show such a class does exist. However, the myth behind it will exist only until the time that marketers have no answers. According to ORG-MARG surveys several surprising facts have emerged about Rural markets. These include: • • • • 9 in 10 households use branded washing powder or cakes. 2 in 5 uses more than 1 brand of soap. This statistic throws the loyalty factor out of the window. More than 1/2 of households use branded skin creams. The penetration of toothpaste in Rural India is higher than that of tooth powder. • For every joint family, there are more nuclear families.

Thus, it is observed that the gap between urban and rural India is faster narrowing. This only proves that the learning curve of Rural India is much faster. What are Rural Indians consuming ? In the area of fast moving consumer goods and agricultural inputs, 80% of branded goods in 18 categories were consumed in Rural India. There has been a significant growth of premium products and 10 to 40% of consumers are seen using multiple brands of the same product type. Another significant factor as far as distribution is concerned is that 25% of products are bought from nearby towns rather than from the village itself. Brands are seen to enter the household from 3 different sources. The child is the first source. The next most significant influence is the confluence of marriage where new tastes, habits and brands enter the house from the homes of the respective spouses. The third influence is that of travel between towns and villages. Considering that the rural contribution to frost free refrigerator sales is 40% of the top 7 cities in India substantiates the fact that consumption habits are changing. In just 3 months, Dena Bank approved subscriptions to 11,000 Farmers' credit cards. Just like the UAE frog-leaped from camels to Rolls Royces, Rural India will frog-leap directly into cellular phones and satellite telephony. This is because, the villager who today is unaware about land phones, will wholeheartedly accept satellite phones provided the are made affordable. In fact, Cellular phone operators who operate in rural India have observed that the average air- time used by rural subscriber is 400 minutes compared to a much lower 120 minutes usage by a subscriber in Bombay or Delhi. It is clear that if prices are made affordable and the consumer feels that the features he is being provided with give him adequate value for money, then the market can explode. There are however, four major barriers to such leapfrogging : Literacy To overcome this barrier, marketers need to create a language for the semi- literate and illiterate consumer. This can be achieved using visuals, symbols, colour, pictures, music and the spoken


word. Once we are able to use media in these forms for knowledge transfer, the barrier can be effectively tackled. This is possible just like a child learns to use and play with toys much before she learns to read or write. The language barrier is has already broken in the case of the youth. The youth of rural India are seen with the same three accessories as they are urban counterparts. They are almost always seen with a cap turned backwards, keds or sport shoes and the quintessential pair of jeans. The only difference is that the rural youth will most probably be wearing a local brand which is much less expensive than the Nike or Adidas or Reebok worn by the urban youth. Distance The distance barrier is most effectively tackled with communication using STD and ISD booths, cellular phones and such other forms of communication. For instance, an STD booth was placed in a village were no outstation calls could be made. Trade in this village increased by 25% in less than a month. The barrier can also be overcome by shamelessly piggyback with large institutions, which have a greater reach. For instance, messages and advertising can be spread using the postal department (India Post has already allowed for advertising on post cards, envelops etc.) and bank representatives. In a few years, commercialisation of these services and their sponsorship might even lead to the creation of a “branded postman”. The answer seems to be in changing the theorems of retailing. The most effective in this is the practice of sampling. Indeed there is nothing quite as successful as a promotional tactic as giving something for free. It must be remembered that the rural consumer does not have a budget problem. He has a cash flow problem. This is because the villager receives funds only twice a year. At these times, he is capable of making high volume purchases. At all times, however, the unit price is critical and so is the pack size. Because of this, in the lean season when there is a cash flow crunch, marketers need to provide financial products or solutions that suit the needs of the rural folk. Incentivise spending This can be achieved by using discount coupons, household credit cards and similar products that encourage spending.

Redefine value The rural consumer is out to look out for value for money. The day it is possible to offer branded Tea at the cost of loose Tea, a shampoo sachet at less than a price of 1 egg, it is only then that the consumer will feel he is getting true value. Further local brands and the grey area products will be effectively curtailed. Fig : How do rural consumers upgrade their wants?

Value Added Products Basic product propositions Home Preparations Loose Commodities

Thus, in rural markets making a product available is not the only factor for success. A marketer must understand that the rural consumer has a distinct identity. He is not just a non-urbanite without money. There is a tremendous need to educate the rural consumer and this involves going beyond simply providing information. The consumers need to be guided in the proper direction in order to make a decision. All in all it must be borne in mind that they are not looking for the lowest price, but to MAXIMUM VALUE.


Channel Selection and Distribution
In Rural India, the selection and use of distribution channels is a nightmare. The reason for this is very clear when we consider that on an average, Urban and Rural India both have approximately 3 million retail outlets. However, Urban India has only 4,000 towns where these outlets are located. On the other hand, Rural India’s 3 million outlets are located in 6.3 lakh villages. Thus, marketers are faced with the problem of feeding 3 million shops located in vastly diverse areas each of which records an average sale of only Rs.5,000 per outlet. Further compounding this problem is the fact that even this meagre sale is mostly on credit. The diversity in the distribution of shops is the selflimiting factor in terms of servicing the rural distribution network. Further, Rural India does not buy from shops as there is no possibility of bargaining and a very limited variety. The rural folk are more at ease purchasing from haats and melas. Haats Haats are the nerve centre of Rural India. They have been held on a regular basis across the length and breadth of the country for over 1000 years. Right from the time of Chandragupta Maurya, Haats are seen as a place for social, cultural and economic interchange. Typically, an average haat will have close to 300 stalls. A haat usually serves around 5000 visitors. Considering that the average population of an Indian village is approximately 1000, each haat serves 5 villages. Everything is sold on the ground and the variety and range are very large. Haats not only sell loose commodities, but a significant amount of packaged goods are also sold. Urban arrogance led to the virtual ignoring of this very potential means of distribution. In fact, the first systematic study of haats was conducted only in 1995. It was found that all states in the country except Haryana, Western Rajasthan and some North Eastern states conducted haats. The reasons why these States did not have haats ranged from the fact that Haryana is almost urban, Western Rajasthan has a very low population density and the North eastern States are in accessible. The study estimates that 47,000 haats are conducted in rural India. These rural super markets are much larger than all the world's K-marts and Wal-marts put together. The sale per haat per day is over Rs.2.25 lakhs and the average sale per outlet is approximately Rs.900. Sales are usually effected on a 10% margin which gives each stall owner an average daily income of approximately Rs.90. The average purchase per visitor is Rs.50 and the command area i.e. the number of villages catered by each haat, is on average between 5 and 10. The study also came up with estimates regarding the type of outlets that exist in each haat. These are listed below : Type of outlet Agro related products Manufactured goods Processed food Garments Textiles and handicrafts Groceries, stationery and medicines Services Forest products Entertainment % of stalls 39.5 24.3 13.2 8.4 6.0 3.3 2.1 Negligible

Sellers at Haats are typically mobile. They sell in one haat on one day and move to another on the next. The reason for this is that villagers in Rural India are paid on a weekly basis. Haats are usually scheduled on the day that employees get their "Hafta". Since the payment days differ from village to village, haat sellers also move accordingly. It is therefore said “Hat taa jaata hai haat”! 81% of visitors to haats said that they did not make purchases from their respective villages and regularly visited haats for their requirements. 58% said that they specifically come to buy a particular product and that the purpose of visiting the haat is to complete their “shopping list”. That haat was not seen as a place of fun. What is very surprising is the fact that 58% of people who visited haats said that the same product was available in their own village but that the shops and the village did not offer them the same variety, price and choice of bargains. Advantages of companies marketing through haats Haats are a readymade distribution network and this large rural marketing system has been embedded in the fabric of rural society for over a 1000 years. A lot of re-distribution also occurs through haats. This is because, a large number of retailers and sub-wholesalers buy from haats for their village stores.


The 1991 Census and the study on haats reveals the following data: Village Population 2000 - 4999 5000 + Total Number of Villages 68,000 14,500 82,500 Villages with haats 10,700 4,300 15,000

Rs.25 lakhs. The efficiency of this system of distribution is evident from the fact that melas have been used for over 1,300 years and have continued to remain popular inspite of India going through so many rulers, invasions and conflicts. This speaks volumes of the rigidity and strength of this rural marketing system. Advantages to companies using melas The Statistics presented above clearly indicate that the visitor turnout at melas is very high. In fact, what is more significant is that women and children participate in melas on a large scale. In fact, melas are one place where women have collective social sanction to leave their respective villages. This is very special because rural women are usually restricted from leaving their homes to visit other villages. A high proportion of sales made at melas are of factory made products. The mood at melas is very conducive to making rural folk try out new things. Sampling at melas is thus very successful in building awareness to new innovations and initiating trials. Visitors to melas are usually cash rich as most melas are held immediately post harvest. 73% of visitors to melas claimed that they came to buy a specific product. However, the difference here between haats and melas was that only 14% of products purchased at melas were available in the visitor's village. This is because melas are generally used to sell durables, high priced items and new product types. The survey of melas indicated the type of outlets that exist. These are presented below : Type of outlet Agro related products Manufactured goods Processed food Garments Textiles and handicrafts Groceries, stationery and medicines Services Forest products Entertainment % of stalls 5.8% 42.0% 19.5% 15.6% 9.0% 4.2% 0.1% 4.0%

The data reveals that 1 in every 5 villages with a population of over 2000 has a haat. In villages with less than 2000 people this figure reduces to 1 in 20 villages. It is also observed that the larger the village, the larger the purchasing power. Haats have developed structure to suit all rural requirements. It is also observed that this system has developed using the tremendous amount of wisdom that rural India possesses. What is most attractive to marketers is that 90% + of sales in haats are on cash basis. Traditionally, in village shops a lot of credit sales occur due to the fact that in a small geographic area of a village, everybody knows everybody. Considering that over 5000 visit a haat from 5 villages, the system gets derelationalised. Apart from the 90% cash sale, 5 to 7% is conducted on barter system and the rest 3 to 5% is on credit. Also attractive to companies wishing to use the system is the low selling overheads. Participation fees at haats are a flat Re.1 to Rs.5 per stall and this rate is common to a giant like Hindustan Lever and the smallest local seller. Melas India is a country of melas. Over 25,000 are held every year all over the country. It is seen that 5,000 of these are commercial melas, 2,000 are cultural melas, while the majority of 18,000 are held with religious significance. Exposure of a company’s product at the 500 “big” melas should be sufficient enough to generate product awareness in the rural market. Statistics reveal that the number of visitors per mela is approximately 7.5 lakhs. The largest such mela is held once every 12 years called the Maha Kumbh mela and attracts close to 2.5 crore people. This is the population of Delhi and Bombay put together converging at one place - indeed a tremendous marketing opportunity. On average, 850 outlets are set up in every mela. In fact, the Vali Yatra mela is held from the time of the Ramayan and has over 3,000 stalls. Sales at the Sonepur mela of Uttar Pradesh average Rs.40 crores. The average sale per day at a mela is

The clear distinction between haats and melas become apparent here. Where almost 40% of stalls in haats sold agro related products, only 5.8% of stalls in melas sold such goods. On the other hand, only 24.3% stalls in haats sold manufactured goods. This number increased to 42% of stalls in melas.



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Buyer behaviour in Rural India
• • • • • • Point of purchase material plays a very large influence in the buying process. Media and advertising has a large influence. The greatest influencer is word of mouth Attitude and behavioural change are impacted by consumption patterns of urban India. The perceived utility or value of the product or service is the ultimate decision making factory. The use of the local idiom or proverbs helps strike a rapport in rural communication media. The principle of recall is embedded in such a strategy. The rural consumer likes to touch and feel a product before making a choice. The re-use capacity and colour of the container in which the product is packed is also of significant importance.

The rural consumer is product loyal. Timely availability is an important factor in making buying decisions. Customer satisfaction holds the key to repeat purchases. The housewife and family members make their own decisions regarding purchases and have different buying criteria. Due to the diversity and size of rural markets, consumers depend on the channel of distribution to a very large extent. The customer's decision-making capacity is restricted by level of education. The dealer and the local leaders apart from neighbours therefore play a great influence. The consumers are extremely price sensitive

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Breaking entry barriers into rural markets
o It is essential to raise the emotional involvement of consumers in order to prevent brand defection. Distribution must be strengthened and this would raise investment cost barriers for new entrants. Distribution costs must be reduced through optimum utilization of the network. The use of the classic American P-A-L principle of Partnerships, Alliances and Linkages will help gain sustainable competitive advantage.

Market research using a systematic survey and analytical study can help understand the depths of the mind of the villagers, their buying criteria and their purchasing power. Trial marketing is essential before a full scale product launch is conducted. Careful segmentation needs to be carried out in line with Income, Distributors, Seasonality, Channels of distribution etc. Markets must be targeted in a focused manner as per promotional strategies developed. There is an urgent need to upgrade all point of purchase material and customer support. Demonstrations are very important in order to establish the credentials of any new technology used in developing the product.


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Thus, the overall strategy framework for rural markets must focus around plugging the segments with the product, using predatory pricing, selecting the most appropriate channel of distribution, building long term relationships with the customers and finally, using the power of emotional brands.


Product Place Price Promotion Packaging Performance People

Basic concepts of marketing as applied to rural markets
Supply led and demand level - Availability must be ensured on time. Retail outlets - Easy accessibility is essential Low cost - Value-based costs must ensure affordability and value for money Price offers, gifts, cross tie-ups, schemes Small packs - Convenient to use and reusable Large volume operation - manage local brands Customer friendly, local dialects, local variations