RURAL MARKETING

SOME FACTS ABOUT

RURAL SECTOR

There are 42,000 rural supermarkets (haats) in India

that exceed the total number of retail chain stores in
the United States (35,000)

Of the 20 lakh BSNL mobile phone connections, 50

percent are in small towns and villages

Of the six lakh odd villages in the entire country, 5.22

lakh had a Village Public Telephone (VPT) as of March
2004

The 41 million Kisan Credit Cards (KCC) issued in rural

India exceed the 40 million credit-plus-debit cards
issued in urban India

Electricity consumption by the agricultural sector has

shown a sharp increase from 17.6 percent of total
consumption in 1980-81 to 29-2 percent in 1999-2000

In 2001-02, the Life Insurance Corporation (LIC) sold 55

percent of its policies in rural India

DEFINING RURAL
INDIA
The Census of India defines rural
as:
Any habitation with a population
density of less than 400 per sq.km.,
where at least 75 percent of the
male working population is engaged
in agriculture and where there
exists no municipality or board

FMCG sector defines rural as:

An any place with a population up to
20,000

 Durable & Agri-input companies

consider rural as:
Any town with a population below
50,000

DEFINITIONS
DEFINITIONS

What is Rural
Marketing?
According to the National
Commission on Agriculture:

 Rural marketing is a process

which starts with a decision to

produce a saleable farm
commodity and it involves all
the aspects of market
structure or system, both
functional and institutional,
based on technical and
economic considerations and
includes pre and post harvest
operations, assembling,
grading, storage,
transportation and
distribution

 Simply, It referred to marketing

of rural products in rural and
urban areas and agricultural inputs
in rural markets

What is Rural
Marketing?
Rural Marketing is a two-way
marketing process that includes
the flow of goods and services
from rural to urban areas and the
flow of goods and services from
urban to rural areas, as well as the
flow of goods and services within
rural areas

DIFFERENCE
BETWEEN URBAN &
RURAL
DIFFERENCE BETWEEN
URBAN & RURAL
DIFFERENCE BETWEEN
URBAN & RURAL

The Importance of the Rural

Market

The Importance of the

Rural Market

More than 70% of countrys consumers

are in the rural market

More than half of national income is

generated here

Should All Firms Go Rural?

For several products there is now enough

demand in urban markets

But firms with huge ambitions have to

necessarily tap rural markets

The Rural Marketing Environment It can be studied

under 2 heads, the Rural Consumer and the Rural
Demand

The Rural Consumer

Many Rural Indias within Rural India and No Such

Thing as a Typical Rural Consumer

Rural Consumer

contd

Highly stratified

Age mix

Region to region and state to state

variation in economic position

Occupation is now beyond agriculture for

over 1/3rd of the workforce

Diversification of the rural economy brings

new income sources

New income is generated from agriculture

as well as other sectors

Heterogeneity in literacy rate too

There is a huge literate population in

rural India

There is heterogeneity in the literacy

rate

In lifestyle too, rural consumers do not

fall into a single bracket

 The Expectation Revolution

Rising expectations; the aspirations of the

rural people growing ahead of their income

The Idea of a Stereotype does Not

Fit

Heterogeneity gives rise to variations in buying

behaviour of the consumers

Size of the Rural Population

More than 81

crore consumers; 73% of Indias population is rural

Rural Demand contd..

In many products, rural

consumption accounts for a
larger share than urban

Washing soaps, popular bath soaps,

package tea, hair oils, batteries

Sewing machines, radio, transistor, tape

recorder, watches, B&W TV, bicycles,
table fan, pressure cookers

In growth rate too, rural market

overtake urban in many products

Packaged tea, analgesics, washing soap,

detergents, motorcycles

MARKETING MIX
FOR RURAL MARKETS

Marketing Mix refers to the set of

actions, tactics, tools or variables that
a company uses to promote and sells its
brand or product in a markets

The marketing mix is a crucial

elements of any marketing plan as it
offers marketers a mix of products,
services and prices, utilizes a
promotion mix of advertising, sales
promotion, direct marketing and
personal selling to reach the target
customers through distribution
channels

The 4 Ps of the marketing mix remain

the same, both in urban and rural
markets. However, marketers need to
meet the challenges of availability,
affordability, acceptability and
awareness (4 As) of products and
services that are peculiar to rural
markets

The 4 Ps of Marketing:
A re-look from the
rural perspective
The basic marketing-mix tools
remain the same both in rural
and urban markets, but it is the
challenges of the 4 As that
compel the marketer to revisit
the marketing tools when he
ventures into rural markets

Availability
Total 6,38,000 villages in India;
742 million Indians live in rural
areas

 HUL : strong distribution system

to reach the interiors of the rural
market

Coca-Cola : evolved a hub-andspoke distribution model to reach

villages

LG has set up 45 area offices and

59 rural / remote area offices

Affordability
Low disposable income, daily wage
earners attract small unit packs.

 Godrej : introduced three brands

of Cinthol, Fair Glow & Godrej in
50-gm. packs, priced at Rs 4-5 for
MP, Bihar & UPthe so-called
BIMARI states

HUL : launched soap brand

Lifebuoy, at Rs. 2 for 50gm.

Coca-Cola : Introduced 200-ml

glass bottle at Rs. 5. The Sunfill, a
powered soft-drink concentrate,
sachet of 25gm priced at Rs. 2

Acceptability
The third challenge is to gain
acceptability for the product or
service

 LG Electronics : developed
customized television christened
it Sampoorna. It was a runway hit,
selling 1,00,000 sets in the very
first year.

Coca-Cola : provides low-cost ice

boxes, that is a tin box for new
outlets and a thermocole box for
seasonal outlets considering lack
of electricity and the absence of
refrigerators in rural areas

Awareness

Only 41 percent of rural households

have access to televisionbuilding
awareness

HUL : relies heavily on its own

company-organized media. These are
promotional events organized by
stockists

Godrej Consumer Products : uses radio

to reach the local people in their own
language

Coca-Cola : uses combination of

television, cinema and radio to reach
53.6 percent of rural households

LG Electronics : uses vans, locallanguage advertising and road shows to

reach rural customers

Philips India : uses wall writing and

radio advertising

ICICI BANK customized their rural

ATMs, so they can operate biometric
authentication. ICICI rural ATMS are
battery operated so that power failure
is not issue.

BP energy Sell smoke less, biomass run

stoves
(Oorja) for rural markets, priced
attractively Rs.675.

Bank of India introduced Bhumiheen

credit cards for providing credit card
facilities to landless farmers.

Noika develop affordable Mobile

phones for rural markets with unique
features such as local language
capabilities, present time/ call limits
etc.

 Philip develop a TV Vardaan for

rural markets. This TV work on
the voltage 90-270 volts.

Philips developed Free Power

radio this radio do not require
power and battery also. it run on
simple winding of level provided in
the set. The price of this
attractive set is Rs. 995.

LG developed CTV called CinePlus

was launched in rural markets
price Rs.5000

Examples of rural
marketing mix
Hyundai increases focus on Rural
India
new promotional scheme titled - Ghar
Ghar Ki Pehchaan'. In this first of its
kind initiative, Hyundai Motor would
extend
special
schemes
for
government employees in rural areas
and members of Gram Panchayats on
the purchase of the Hyundai Santro

Launched on May 1, the Ghar Ghar Ki

Pehchaan' scheme will continue till July
31, 2008. Through this special rural
scheme Hyundai Motor India plans to
touch base with at least 58 per cent of
Indian villages with a population of 500
or more.

DISCUSSION