Rural Marketing in India | Rural Area | Brand

RURAL MARKETING

INTRODUCTION
Rural Markets are defined as those segments of overall market of any economy, which are distinct from the other types of markets like stock market, commodity markets or Labor economics. Rural Markets constitute an important segment of overall economy, for example, in the USA, out of about 3000 counties, around 2000 counties are rural, that is, nonurbanized, with population of 55 million. Typically, a rural market will represent a community in a rural area with a population of 2500 to 30000 Even as this debate continues, the term "rural" is being redefined. "'Rural' is difficult to define anymore," says Bijoor of Bijoor Consults. "Typically, from an Indian census point of view, rural has been defined with a 'deprivation' orientation, rural being a landmass without access to continuous electricity, water, the stock market. There has been a correction in this view, however. Marketers today define rural as people living a different lifestyle as opposed to that of those who have settled in the bigger cities and towns. Rural is defined as pastoral in nature and as a mass of people who relate their income closely to the lands they till or use to raise their cattle and livestock. I, personally, define rural differently. I believe rural is a mindset. Those who possess it are rural and those who do not are urban. To that extent, in Bangalore city, just off the old airport road, are a whole set of people who live by farming on their lands. If you visit their homes, their lifestyles are totally rural. Similarly, there are people who live in villages, who have

” Indian Rural Market: An Overview The Indian rural market with its vast size and demand base offers great opportunities to marketers. • Total income in rural India (about 43% of total national income) is expected to increase from around US$220 billion in 2004-2005 to US$425 billion by 2010-2011. penetration. accessibility. etc. • Some 42 million rural households use banking services against 27 million urban households • As durables shrink in urban India. Our nation is classified in around 604 districts. the rural market is witnessing a 15% growth rate. there are almost twice as many 'lower middle income' households in rural areas as in the urban areas.2 % of India's population lives in 638000 villages in rural areas.access to the best of it all. Telecom in rural India is growing at 31%. Some 60% of the durables market lies in rural India. Rural is not a geography. distances from nearest towns. 72. It is only natural that rural markets form an important part of the total market of India. it is a mindset. which can be sorted in different parameters such as literacy levels. a CAGR of 12% Opportunity The above figures are a clear indication that the rural markets offer the great potential to help the India Inc which has reached the plateau of their business curve in urban India to bank upon the volume-driven growth. According to the NCAER study. and approximately more than 630000 villages. Few Facts As per 2001 census. The Indian rural market with its vast size and demand base offers a huge opportunity that MNCs . income levels. These are urban folk. Two-thirds of countries consumers live in rural areas and almost half of the national income is generated here.

taboos and practices.cannot afford to ignore. the rural market for FMCG products is growing much faster than the urban counterpart. tea. . Thus underdeveloped people and consequently underdeveloped market by and large characterize the rural markets. What is more. washing soap. The major problems faced are: • • Underdeveloped People and Underdeveloped Markets: The number of people below poverty line has not decreased in any appreciable manner. With 128 million households. Rural marketing is thus a time consuming affair and requires considerable investments in terms of evolving appropriate strategies with a view to tackle the problems. As a result of the growing affluence. fatalistic and believe in old customs. blades. rural India has a large consuming class with 41 per cent of India's middle-class and 58 per cent of the total disposable income. fans. salt and toothpowder. Problems in the Booming Rural Marketing Although the rural market does offer a vast untapped potential. fuelled by good monsoons and the increase in agricultural output to 200 million tonnes from 176 million tonnes in 1991. Vast majorities of the rural people are tradition bound. traditions. the rural population is nearly three times the urban. Lack of Proper Physical Communication Facilities: Nearly fifty percent of the villages in the country do not have all weather roads. The importance of the rural market for some FMCG and durable marketers is underlined by the fact that the rural market accounts for close to 70 per cent of toilet-soap users and 38 per cent of all two-wheeler purchased. it should also be recognized that it is not that easy to operate in rural market because of several problems. Physical communication of these villages is highly expensive. bicycles. Even today most villages in the eastern parts of the country are inaccessible during the monsoon. pressure cookers. habits. The rural market accounts for half the total market for TV sets.

the dialects are estimated to be around 850. Low Levels of Literacy: The literacy rate is low in rural areas as compared to urban areas. Seven Indian states account for 76% of the country's rural retail outlets. Many Languages and Dialects: The number of languages and dialects vary widely from state to state.• • • • • • • Media for Rural Communication: Among the mass media at some point of time in the late 50's and 60's radio was considered to be a potential medium for communication to the rural people.7 million. more desirable to villagers. Another mass media is television and cinemas. The kind of choices of brands that an urban customer . Print medium becomes ineffective and to an extent irrelevant in rural areas since its reach is poor and so is the level of literacy. Prevalence of spurious brands and seasonal demand: For any branded product there are a multitude of 'local variants'. The messages have to be delivered in the local languages and dialects. which are cheaper. This again leads to problem of communication for promotion purposes. which is far less when compared to the number of villages. and. which is widely spread. Statistics indicate that the rural areas account for hardly 2000 to 3500 mobile theatres. Dispersed Market: Rural areas are scattered and it is next to impossible to ensure the availability of a brand all over the country. region to region and probably from district to district. therefore. Low Per Capita Income: Even though about 33-35% of gross domestic product is generated in the rural areas it is shared by 74% of the population. Advertising in such a highly heterogeneous market. Even though the number of recognized languages are only 16. the total number of which is placed at around 3. Different way of thinking: There is a vast difference in the lifestyles of the people. Hence the per capita incomes are low compared to the urban areas. is very expensive.

The 4A Approach The rural market may be alluring but it is not without its problems: Low per capita disposable incomes that is half the urban disposable income.2 million sq km. Marketers must trade off the distribution cost with incremental market penetration. Availability . India's largest MNC. the company depot supplies. To ensure full loads. has evolved a hub and spoke distribution model to reach the villages. Coca-Cola. However. once a week. which helps its brands reach the interiors of the rural market. has built a strong distribution system. acute dependence on the vagaries of the monsoon. power problems. 700 million Indians may live in rural areas. The difference is also in the way of thinking. affordability. The more daring MNCs are meeting the consequent challenges of availability. smaller distributors in adjoining areas. the rural consumer is not unlike his urban counterpart in many ways. acceptability and awareness (the so-called 4 As). To service remote village. given the poor state of roads. large number of daily wage earners. The rural customer has a fairly simple thinking as compared to the urban counterpart. it is an even greater challenge to regularly reach products to the far-flung villages. bullock-carts and even boats in the backwaters of Kerela. large distributors which who act as hubs. However. which considers rural India as a future growth driver. The rural customer usually has 2 or 3 brands to choose from whereas the urban one has multiple choices. finding them is not easy. India's 627. Any serious marketer must strive to reach at least 13. LG Electronics defines all . These distributors appoint and supply. Hindustan Lever.000 villages are spread over 3.113 villages with a population of more than 5. 1.enjoys is different from the choices available to the rural customer.000. poor roads. twice a week. and inaccessibility to conventional advertising media. Over the years. stockists use auto-rickshaws. seasonal consumption linked to harvests and festivals and special occasions.The first challenge is to ensure availability of the product or service. a subsidiary of Unilever.

most of whom are on daily wages.cities and towns other than the seven metros cities as rural and semi-urban market.the so-called `Bimaru' States. Study on buying behaviour of rural consumer indicates that the rural retailers influences 35% of purchase occasions. which has reaped rich dividends by doing so. Bihar and Uttar Pradesh . Affordability . The initiative has paid off: Eighty per cent of new drinkers now come from the rural markets. The instant and ready-to-mix Sunfill is available in a single-serve sachet of 25 gm priced at Rs 2 and multiserve sachet of 200 gm priced at Rs 15. 2. is LG Electronics. it developed a customised TV for . One company. Therefore. 3. Some companies have addressed the affordability problem by introducing small unit packs. a powdered soft-drink concentrate. there is a need to offer products that suit the rural market. volumes and market share. CocaCola has also introduced Sunfill. With low disposable incomes. Fair Glow and Godrej in 50-gm packs.The third challenge is to gain acceptability for the product or service. among the first MNCs to realise the potential of India's rural market. has launched a variant of its largest selling soap brand. The move is mainly targeted at the rural market. priced at Rs 4-5 meant specifically for Madhya Pradesh. LG has set up 45 area offices and 59 rural/remote area offices. Godrej recently introduced three brands of Cinthol. To tap these unexplored country markets. Some of the FMCG giants like HLL took out project streamline to significantly enhance the control on the rural supply chain through a network of rural substockists. Apart from this to acquire further edge in distribution HLL started Project Shakti in partnership with Self Help groups of rural women. In 1998. Coca-Cola has addressed the affordability issue by introducing the returnable 200-ml glass bottle priced at Rs 5. Lifebuoy at Rs 2 for 50 gm. products need to be affordable to the rural consumer. Acceptability .The second challenge is to ensure affordability of the product or service. Hindustan Lever. who are based in the villages only. Therefore sheer product availability can affect decision of brand choice.

a tin box for new outlets and thermocol box for seasonal outlets. It offers . shop-fronts. walls of the wells putting on tin plates on al the tree surrounding the pond are some of the innovative media used by personal wash like Lux and Lifebuoy and fabric wash items like Rin and Wheel. It was a runway hit selling 100.. etc. 4. Because of the lack of electricity and refrigerators in the rural areas. walls and wells are other media vehicles that have been utilized to increase brand and pack visibility. The insurance companies that have tailor-made products for the rural market have performed well. means utilizing targeted. Creating awareness then.For generating awareness.5 crore in total premia. Coca-Cola provides low-cost ice-boxes . events like fairs and festivals. are used as occasions for brand communication. CONCLUSION It is evident from the various discussions above that the Indian rural market is at once fascinating and challenging. unconventional media including ambient media . Idea was to advertise not only at the point of purchase but also at the time of consumption. HDFC Standard LIFE topped private insurers by selling policies worth Rs 3.Mass media is able to reach only to 57% of the rural population. Ideas like putting stickers on the hand pumps. Haats. Cinema vans. Awareness .the rural market and christened it Sampoorna. The company tied up with non-governmental organisations and offered reasonably priced policies in the nature of group insurance covers.000 sets in the very first year.

for certain products. This is particularly true of the rural market of India. as said earlier. not found. And. firms can certainly reap big rewards from the rural market. It is a market meant for truly creative marketer. In fact. They must recognise that rural marketing is primarily developmental marketing and must be willing to take an approach of ‘market seeding’ in the initial stages. . As such. it is totally a virgin market. whereas the urban market is highly competitive. It is often said that markets are made. the rural market is fairly quiet.large scope on account of its size and potential. The firms have to face them squarely. It is also growing steadily. The catch is that the market also poses several problems and hurdles.

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